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HIGH COURT OF AUSTRALIA STATE OF VICTORIA APPELLANT AND TATTS GROUP LIMITED RESPONDENT Victoria v Tatts Group Limited [2016] HCA 5 2 March 2016 ORDER Appeal allowed with costs. Set aside the orders of the Court of Appeal of the Supreme Court of Victoria made on 4 December 2014 and in their place order that: the appeal be allowed with costs; orders 1 and 2 of the orders of Hargrave J made on 27 June 2014 be set aside, and in their place order that the proceeding be dismissed with costs; the respondent pay the appellant $540,467,887.92 with interest, calculated from 27 June 2014. On appeal from the Supreme Court of Victoria Representation W A Harris QC with R G Craig and K A Loxley for the appellant (instructed by Johnson Winter & Slattery) N J Young QC with P D Crutchfield QC and N P De Young for the respondent (instructed by Clayton Utz Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Victoria v Tatts Group Limited Contract – Construction of terms – Where contract used statutory term "gaming operator's licence" – Where contract provided for payment to respondent if "new gaming operator's licence" issued to person other than respondent – Where statutory scheme amended so gaming operator's licence could no longer be issued – Meaning of "new gaming operator's licence" – Whether payment due. Contract – Construction of terms – Context and purpose – Where commercial context regulated by statutory regime – Where letter from member of Executive annexed to contract – View of reasonable business people. Contract – Construction of terms – Whether pre-existing contractual right operated independently of statutory right on same subject matter – Whether pre-existing contractual right discharged or abrogated by subsequent legislative enactment. Words and phrases – "gaming machine entitlement", "gaming operator's licence", "new gaming operator's licence". Gaming Machine Control Act 1991 (Vic), Pt 3. Gambling Regulation Act 2003 (Vic), Pts 4 and 4A of Ch 3. FRENCH CJ, KIEFEL, BELL, KEANE AND GORDON JJ. Introduction The legalisation of gaming in Victoria in 1991 by the Gaming Machine Control Act 1991 (Vic) ("the 1991 Act"), the creation in 1992 of a duopoly in the gaming industry in Victoria by the issue of a gaming operator's licence to each of the Totalisator Agency Board of Victoria ("TAB") and the Trustees of the Will and Estate of the late George Adams ("Tatts"1) for a term of 20 years2, the subsequent privatisation of TAB (resulting in the creation of Tabcorp Holdings Limited ("Tabcorp")) in 1994 and the enactment of the Gaming and Betting Act 1994 (Vic) ("the 1994 Act"), as well as the inclusion in the 1994 Act of a "terminal payment provision"3 in favour of Tabcorp, are explained in the reasons published in the related appeal in Tabcorp Holdings Ltd v Victoria4. That factual and legislative history is also relevant to the resolution of this appeal by the State of Victoria ("the State"). This appeal concerns steps taken by the State and Tatts after the privatisation of TAB in 1994. One of those steps was the entry into an agreement between the State and Tatts dated 17 November 1995 ("the 1995 Agreement"). Clause 7.1 of the 1995 Agreement provided for a terminal payment to be made to Tatts "[i]f the Gaming Operator's Licence expires without a new gaming operator's licence having issued to [Tatts]". Clause 7.2 then went on to provide that no amount would be payable if a new gaming operator's licence was not issued at all, or was issued to Tatts or a related entity of Tatts. In 1998, that estate was restructured and corporatised and the respondent, Tatts Group Limited, became the holder of the gaming operator's licence previously held by the Trustees. In these reasons, for convenience both the Trustees and Tatts Group Limited are referred to as "Tatts" unless it is necessary to refer to them specifically. 2 Under s 33 of the 1991 Act. s 21(1) of the 1994 Act. [2016] HCA 4 at [11]-[29]. Bell Gordon The principal question in this appeal is whether Tatts is entitled to payment under cl 7.1 because the State allocated gaming machine entitlements ("GMEs") to licensed venue operators under s 3.4A.5 of the Gambling Regulation Act 2003 (Vic) ("the 2003 Act"). The answer to that question turns on whether the primary judge and the Court of Appeal of the Supreme Court of Victoria were correct in concluding that the phrase "new gaming operator's licence" in cl 7.1 was not restricted to a gaming operator's licence granted under Pt 3 of the 1991 Act (as it might be amended, re-enacted or replaced from time to time) but had a broader generic meaning which covered any statutory authority whose effect was to confer on the holder substantially the same rights as were conferred on Tatts by its gaming operator's licence at the time of its expiration. For the reasons that follow, the phrase "new gaming operator's licence" in cl 7 referred to a gaming operator's licence granted under Pt 3 of the 1991 Act (as it might be amended, re-enacted or replaced from time to time). The phrase did not have a generic meaning which covered any statutory authority whose effect was to confer on the holder substantially the same rights as were conferred on Tatts by its gaming operator's licence at the time of its expiration. A "new gaming operator's licence" never issued and Tatts is not entitled to payment under cl 7 of the 1995 Agreement. Structure These reasons will set out the facts, including the relevant provisions of the 1995 Agreement, the legislative history and events subsequent to the 1995 Agreement. The reasons will then turn to the question of the proper construction of cl 7 of the 1995 Agreement. Facts Negotiations with Tatts following the privatisation of TAB Following the privatisation of TAB in 1994, Tabcorp held its conjoined wagering licence and gaming licence under the 1994 Act. Tatts still held its gaming operator's licence under the 1991 Act. The duopoly that had been created in 1992 was retained, but the terms on which Tatts and Tabcorp participated in that duopoly were different. Tabcorp had paid for its conjoined licences and had the benefit of a terminal payment provision. Tatts had not paid for its gaming operator's licence and did not have the benefit of a terminal payment provision. Bell Gordon The State wanted to level the playing field between the duopolists (Tatts and Tabcorp) and to divide that playing field between them (with the limited exception of the Crown Casino). The State also wanted an adequate return from the "co-exclusive" licence which had been provided to Tatts and to put Tatts onto a more equal competitive footing with Tabcorp5. 1995 Agreement The State entered into negotiations with Tatts. Those negotiations culminated in the 1995 Agreement. The arrangements in that agreement were broadly similar to those which applied to Tabcorp in relation to gaming6. The recitals to the 1995 Agreement provided: [Tatts] hold[s] a Gaming Operator's Licence in the [State]. Clause 8 of the Gaming Operator's Licence provides for a review of amounts payable by [Tatts] under Section 136 of [the 1991 Act] to the Victorian Casino and Gaming Authority, to be undertaken not later than 1 November 1996. This Agreement when it becomes unconditional constitutes that review. This Agreement recognises that the business carried on by [Tatts] is to be regulated on terms substantially as favourable as the terms regulating the gaming machine business operated by [Tabcorp] or its operator, and is to otherwise have the benefit of the terms of this Agreement. The parties have agreed to enter into an arrangement on the terms and conditions contained in this Agreement." (emphasis added) The term "Gaming Operator's Licence" was defined in cl 1.1 of the 1995 Agreement to mean "the gaming operator's licence issued to [Tatts] pursuant to [the 1991 Act]". "[B]usiness" was defined in cl 1.1 of the 5 See Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 4 June 1996 at 565-566 in relation to the history of the negotiations. 6 Tabcorp Holdings Ltd v Victoria [2016] HCA 4 at [18]-[29]. Bell Gordon 1995 Agreement to mean "[Tatts'] gaming machine business carried on in the [State], including the acquisition, supply, installation and operation of gaming machines". Clause 8 of the 1995 Agreement, entitled "Draft Legislation", relevantly provided: "8.1 The Minister will cause to be drafted and will use his best endeavours to procure that the Parliament of Victoria enacts legislation which: 8.1.1 includes [Tatts'] obligation to pay the Minister in accordance with clause 3 of this Agreement; 8.1.2 includes the obligation of the [State] to pay the Licence Value to [Tatts] in accordance with the provisions of clause 7 of this Agreement; 8.1.6 includes provision requiring the holder of any new gaming operator's licence issued following the expiry of the Gaming Operator's Licence to pay any licence fee by way of lump sum premium upon the grant of the new licence; 8.1.7 includes any other provision deemed necessary or desirable to give effect to this Agreement." (emphasis added) So what were the obligations in cll 3 and 7 of the 1995 Agreement? Clause 3 imposed a new obligation on Tatts to pay the State an annual licence fee. The present discounted value of the annual licence fee payments to the State was substantially equivalent to the amount paid by Tabcorp from the proceeds of TAB's privatisation. Clause 7, entitled "Compensation", cannot be understood without reference to cll 5 and 6. Under cl 5, headed "New Licensee", cl 5.2 provided: "If the Gaming Operator's licence is transferred to, or a new gaming operator's licence is issued to, a related entity of [Tatts] prior to the time at which the Gaming Operator's Licence would expire by effluxion of time, no compensation will be payable to [Tatts] pursuant to clause 7 at the time of such transfer or issue but such related entity will be entitled to the Bell Gordon benefit of clause 7 as a permitted assignee or properly constituted successor of [Tatts]." By cl 6 of the 1995 Agreement, entitled "Other Gaming Machine Operator", the State and Tatts agreed that: "… [T]he Minister agrees that for the term of the Gaming Operator's Licence [Tatts'] conduct of the business will be regulated on terms substantially as favourable as the terms regulating the gaming machine business operated by [Tabcorp] or its operator. At the time of entering into this Agreement the share of net machine income retained by [Tatts] is 33 1/3 percent and other terms regulating the business are contained in the Ministerial Directions document dated 28 August 1995 (annexed as Schedule 1). Prior to entering into this Agreement [Tatts] received from the Treasurer of Victoria, and considered, the letter annexed to this Agreement as Schedule 2." (emphasis added) The letter referred to was addressed to Tatts and signed by the Treasurer of Victoria, and stated: "LICENCE PAYMENT FOR ELECTRONIC GAMING MACHINES I am writing to confirm the principles on which the Government of Victoria is reaching agreement with you over the payments relating to your Gaming Operator's Licence. I must, however, make it clear that the statement of principles in this letter does not bind this Government or future Governments and, of course, that the Victorian Parliament has the power at any time to amend existing legislation or pass new legislation affecting your operations or the terms on which those operations are conducted. The principles are as follows:- You have been granted a Gaming Operator's Licence pursuant to [the 1991 Act]. This licence gives you a concurrent right (with [Tabcorp] and Crown Limited) to conduct gaming, for a fixed period. The licence will expire on 14 April 2012. Bell Gordon The Government does not currently intend to grant further gaming licences to persons who are not now authorised to conduct gaming or wagering during the licence period. Amounts which may be retained by you by way of commission on gaming will be maintained at 33.33% for the period of the licence. [Tatts] may apply for a new licence after the initial licence terminates and on the same terms as other applicants. The process of awarding a new licence may involve a public tender. It is also expected but not guaranteed that the new licence would be awarded to the highest qualifying bidder. If the new licensee is not [Tatts], [Tatts] will be entitled the State capital to receive compensation as provided for in the agreement between the Minister for Gaming and [Tatts], shortly to be entered into [ie the 1995 Agreement]. from It is intended that any new licence will be granted on conditions which include conditions substantially to the same effect as those to which [Tatts'] licence is subject. The Government recognises the importance of the gaming industry to the Victorian economy and, in recognition of that, it will continue to deal with [Tatts] reasonably and in good faith." (emphasis added) It is in that context that cl 7, entitled "Compensation", must be construed. It was a terminal payment provision. It relevantly provided that: If the Gaming Operator's Licence expires without a new gaming operator's licence having issued to [Tatts], [Tatts] shall be entitled to be paid, by the [State], an amount of money as compensation for the investment in infrastructure lost. This amount will be equal to the Licence Value of the Gaming Operator's Licence or the premium payment by the new licensee, whichever is the lesser. 7.2 No amount will be payable pursuant to sub-clause 7.1 if a new gaming operator's licence is not issued to any person, or is issued to [Tatts] or a related entity of [Tatts]. For the purposes of sub-clause 7.1 (but subject to sub-clause 7.4) 'Licence Value' in relation to the former Gaming Operator's Licence means the amount calculated in accordance with the following formula: ... Bell Gordon The parties acknowledge that the Licence Value has been determined having regard to the value of [Tatts'] current investment in the gaming industry …" (emphasis added) It will be necessary to return to consider the formula later in these reasons. In short, cl 7 provided for a terminal payment to be paid to Tatts "[i]f the Gaming Operator's Licence expires without a new gaming operator's licence having issued to [Tatts]" but for no amount to be payable if a new gaming operator's licence was not issued at all, or was issued to Tatts or a related entity of Tatts. By entering into the 1995 Agreement, the State achieved its two objectives – to level the playing field between the duopolists (Tatts and Tabcorp) and to divide that playing field between them (with the limited exception of the Crown Casino). The different outcomes in the Court of Appeal in Victoria v Tatts Group Ltd7 and Tabcorp Holdings Ltd v Victoria8 would entail that those objectives were not achieved. 1996 Act As contemplated by cl 8 of the 1995 Agreement (the State's obligation to use best endeavours to procure legislation), the Gaming Acts (Amendment) Act 1996 (Vic) ("the 1996 Act") was enacted. It amended the 1991 Act with effect from 2 July 1996. A stated purpose of the 1996 Act was "to make further provision in relation to gaming operator's licences"9. The 1996 Act inserted new ss 33, 33A and 35A to provide for the issue of a new gaming operator's licence on the expiration of Tatts' existing licence and for the payment of compensation to Tatts if the new gaming operator's licence [2014] VSCA 311. [2014] VSCA 312. s 1(a) of the 1996 Act. Bell Gordon was not granted to Tatts or a related entity10. These sections addressed cl 7 of the 1995 Agreement. They relevantly provided: "33. Gaming operator's licence Subject to this Act, [Tatts] or any other person may apply to the [Victorian Casino and Gaming] Authority for a gaming operator's licence. (2) A licence granted under this section must not commence before the expiry, or earlier termination, of the gaming operator's licence held by [Tatts] immediately before the commencement of section 5 of [the 1996 Act]. 33A. Premium payment Before a licence is granted under section 33, the applicant must pay to the Treasurer as consideration for the grant of the licence the amount determined by the Treasurer as the premium payment. The premium payment is a tax. 35A. Entitlement of former licensee on grant of new licence a gaming operator's licence held by a person ('the former licensee') expires; and the [Victorian Casino and Gaming] Authority grants a gaming operator's licence to a person other than the former licensee, or a related entity of the former licensee being a licence that commences within 6 months after that expiry; and the [Victorian Casino and Gaming] Authority does not grant a gaming operator's licence before the expiration of that 10 ss 5 and 6 of the 1996 Act. Bell Gordon period to the former licensee or a related entity of the former licensee— the former licensee is entitled to be paid an amount equal to the licence value of the licence held by the former licensee or the premium payment paid by the holder of the licence referred to in paragraph (b), whichever is the lesser. ..." (emphasis added) A new s 135A, entitled "Amounts payable by [Tatts]", was also inserted into the 1991 Act11. In general terms, it required Tatts to pay the annual licence fee equivalent to its obligations under cl 3 of the 1995 Agreement. Subsequent events This appeal can be decided by reference to the proper construction of the phrase "new gaming operator's licence" in cl 7 of the 1995 Agreement. It remains necessary, however, to explain the legislative and other factual history after the 1995 Agreement and the 1996 Act in order to identify what Tatts alleged to be the new licences that triggered its entitlement to payment under cl 7. 1999 Agreement In July 1998, the Australian Taxation Office issued a Private Ruling which was adverse to Tatts. It ruled that the licence fees paid to the State by Tatts would not be deductible. On 28 June 1999, the State and Tatts entered an agreement purporting to amend the 1995 Agreement to reflect a change in payment arrangements as a that adverse Private Ruling result of ("the 1999 Agreement"). The recitals relevantly recorded that: "A. On the 17th day of November 1995 [Tatts] and the [State] entered into [the 1995 Agreement] which inter alia, reviewed amounts to be paid by [Tatts] to the Victorian Casino and Gaming Authority pursuant to Section 136 of [the 1991 Act]. By [the 1996 Act] the Parliament of Victoria legislated to reflect in statutory form the payment requirements contained in clause 3 of the 1995 Agreement. 11 s 9 of the 1996 Act. Bell Gordon The Government of Victoria and [Tatts] have decided for mutual benefit to alter the payment requirements as reflected in the 1995 Agreement and in [the 1996 Act], and for this purpose inter alia, the Government of Victoria has introduced to the Parliament of Victoria and the Parliament of Victoria has passed the State (Act No 47/1999, Taxation Acts the '1999 Act'). (Amendment) Act 1999 The Government of Victoria and [Tatts] have agreed to amend the 1995 Agreement in view of the new statutory payment obligations and the parties wish to reduce their further agreement to writing." The two amendments to the 1995 Agreement may be put to one side. The final clause in the 1999 Agreement, cl 4, entitled "Affirmation", provided that "[t]he parties affirm their obligations to perform and the validity of the 1995 Agreement as amended by this Agreement". 2003 Act In 2003, multiple pieces of legislation in Victoria regulating gambling in its various forms were re-enacted and consolidated into the 2003 Act. The duopoly was retained. Tabcorp's wagering licence and gaming licence were provided for in Pt 3 of Ch 4 of the 2003 Act. Tabcorp's terminal payment provision in s 21(1) of the 1994 Act was materially re-enacted in s 4.3.12(1) of the 2003 Act. Tatts' gaming operator's licence was provided for in Pt 4 of Ch 3 of the 2003 Act. The phrase "gaming operator's licence" was defined in s 1.3(1) of the 2003 Act to mean "a licence granted under Division 3 of Part 4 of Chapter 3" of the 2003 Act. Section 3.4.2, in Pt 4 of Ch 3, headed "Authority conferred by gaming operator's licence", restated the authority conferred by a gaming operator's licence in substantially the same terms as s 14 of the 1991 Act: "A gaming operator's licence authorises the licensee and the operator, subject to this Act and any conditions to which the licence is subject— to obtain from a person listed on the Roll [of Manufacturers, Suppliers and Testers] approved gaming machines and restricted components; and to manufacture approved gaming machines and components; and restricted Bell Gordon to supply approved gaming machines and restricted components to venue operators; and to conduct gaming at an approved venue; and to sell or dispose of gaming equipment with the approval of the Commission; and to service, repair or maintain gaming equipment through the services of licensed technicians; and to do all things necessarily incidental to carrying on the activities authorised by this section." The prohibition on holding both a gaming operator's licence and a venue operator's licence at the one time, previously in s 19A of the 1991 Act, was materially re-enacted in s 3.4.9 of the 2003 Act. Sections 3.4.29, 3.4.30 and 3.4.33, in Div 3 of Pt 4 of Ch 3, enacted similar but not identical provisions for the issue of further gaming operator's licences and for the terminal payment provision to those which were previously in ss 33, 33A and 35A of the 1991 Act, relevantly as follows: Gaming operator's licence The Commission, on application by [Tatts] or any other person, may grant a gaming operator's licence to [Tatts] or [the] other person. Premium payment Before a licence is granted under section 3.4.29, the applicant must pay to the Treasurer as consideration for the grant of the licence the amount determined by the Treasurer as the premium payment. The premium payment is a tax. Bell Gordon Entitlement of former licensee on grant of new licence a gaming operator's licence held by a person ('the former licensee') expires; and the Commission grants a gaming operator's licence to a person other than the former licensee, or a related entity of the former licensee, being a licence that commences within 6 months after that expiry; and the Commission does not grant a gaming operator's licence before the expiration of that period to the former licensee or a related entity of the former licensee— the former licensee is entitled to be paid an amount equal to the licence value of the licence held by the former licensee or the premium payment paid by the holder of the licence referred to in paragraph (b), whichever is the lesser. Listing on the ASX of the shares in Tatts and the 2005 Transfer Agreement Following an announcement by the Trustees of an intention to corporatise and to list on the ASX, the Trustees requested and the State prepared amending legislation to permit the transfer of the existing gaming operator's licence (and other authorisations) from the Trustees to what is now Tatts Group Limited. The Gambling Regulation (Amendment) Act 2004 (Vic) was assented to in September 2004. Then, on 31 May 2005, the State, the Trustees and what is now Tatts Group Limited executed a "Transfer Agreement". Recital D recorded that they wished to enter into the Transfer Agreement to: facilitate the proposed Corporatisation and Listing [of Tatts]; Bell Gordon effect the transfer of the rights and obligations under the 1995 Agreement as amended by the 1999 Agreement together with all rights and obligations of the Trustees arising pursuant to the 1999 Agreement from the Trustees to [what is now Tatts Group Limited]; and (iii) facilitate the transfer of the Licences from the Trustees to [what is now Tatts Group Limited]." "Licences" was defined to mean the licences and authorisations then held by the Trustees under the 2003 Act, which included the gaming operator's licence held under that Act. Clause 10 of the Transfer Agreement, headed "1995 Agreement", stated that: "The rights and obligations of the Trustees arising pursuant to the 1995 Agreement as amended by the 1999 Agreement together with all rights and obligations of the 1999 Agreement are transferred to [what is now Tatts Group Limited] in accordance with clause 11 of the 1995 Agreement, as contemplated by the [Gambling Regulation (Amendment) Act 2004 (Vic)]." the Trustees arising pursuant The Premier's announcement, 2009 Amendments the 2008 Amendments and the On 10 April 2008, the Premier of Victoria announced that the State would introduce a new structure for Victoria's gaming industry which would fundamentally reshape that industry as part of a broader reform of all gaming and wagering in Victoria. The consequence was that Tabcorp's and Tatts' gaming licences would not be renewed. The Premier's announcement stated that: "The Government's decision represents an entirely new regulatory model for the operation of wagering, gaming and keno in Victoria after the expiration of the current licences in 2012, and the Government has formed the view that neither [Tatts] nor Tabcorp are entitled to compensation." The reference to "current licences" was, of course, a reference to the licences held by Tatts and Tabcorp. The new structure was relevantly introduced Bell Gordon through amendments to the 2003 Act passed in 2008 in respect of wagering12 respect of gaming13 ("the 2008 Amendments") ("the 2009 Amendments"). The text of the terminal payment provision in s 3.4.33 of the 2003 Act was not altered by the 2008 Amendments or the 2009 Amendments. and Section 3.4.3 was inserted by the 2009 Amendments. It was headed "Application of Part—gaming operator's licences" and it provided: "This Part applies only with respect to the gaming operator's licence that was issued on 14 April 1992 and does not authorise the grant of any further gaming operator's licence." Put simply, there was to be a new regime and the duopoly was not to continue. The 2009 Amendments also provided for the creation of GMEs and their subsequent allocation to operators of approved venues14. By amendments to s 3.4.1 of the 2003 Act, the 2009 Amendments also provided for the expansion of the authority conferred by a venue operator's licence so as to include the acquisition and transfer of GMEs; the conduct of gaming on approved gaming machines in an approved venue operated by the licensee while holding GMEs; selling or disposing of gaming equipment while holding a GME; and servicing, repairing or maintaining gaming equipment through the services of a licensed technician while holding a GME15. (e) Allocation of GMEs On 7 June 2010, the Minister for Gaming created 27,500 GMEs with an effective date of 16 August 2012, being the day after Tatts' gaming operator's licence expired. GMEs were allocated to holders of venue operator's licences. The result was that the gaming operations which Tatts conducted under its 12 Gambling Regulation Amendment (Licensing) Act 2008 (Vic). 13 Gambling Regulation Amendment (Licensing) Act 2009 (Vic); Gambling Regulation Amendment Act 2009 (Vic). 14 By a new Pt 4A of Ch 3 of the 2003 Act, inserted by s 25 of the Gambling Regulation Amendment (Licensing) Act 2009 (Vic). 15 s 3.4.1(1)(aa)-(ad) of the 2003 Act. Bell Gordon gaming operator's licence ceased and were then carried on by the holders of GMEs. Tatts did not apply for, or receive, any GMEs. Recipients of the GMEs were required to make payments totalling approximately $981 million to the State. The State made no payment to Tatts under the 1995 Agreement or under s 3.4.33 of the 2003 Act. Tatts' claim for payment On 16 August 2012, Tatts issued proceedings seeking, amongst other things, a payment in excess of $490 million plus interest pursuant to cl 7 of the 1995 Agreement and/or s 3.4.33 of the 2003 Act. Previous decisions The primary judge upheld Tatts' entitlement to payment under cl 7 of the 1995 Agreement and ordered the State to pay Tatts $451,157,286 plus interest. The primary judge found that the reference in cl 7 to "the issue of 'a new gaming operator's licence' after expiry of the defined 'Gaming Operator's Licence' would have been understood by a reasonable businessperson as the issue of any licence or other authority of substantially the same kind as [Tatts'] existing gaming operator's licence"16. The Court of Appeal (Nettle, Osborn and Whelan JJA) upheld that conclusion17. The Court of Appeal also concluded that the 1995 Agreement was intended to survive the enactment of the 1996 Act incorporating the statutory provisions which the 1995 Agreement envisaged18. The Court of Appeal stated that "it would be commercially improbable to attribute an intention to the parties that their rights and obligations under the 1995 Agreement should be spent upon the passage of the legislation provided for by cl 8" of the 1995 Agreement19. 16 Tatts Group Ltd v Victoria [2014] VSC 302 at [95]. 17 Victoria v Tatts Group Ltd [2014] VSCA 311 at [133]-[146]. 18 Victoria v Tatts Group Ltd [2014] VSCA 311 at [211]-[215]. 19 Victoria v Tatts Group Ltd [2014] VSCA 311 at [212]. Bell Gordon Proper construction of cl 7 of the 1995 Agreement Issue Did the phrase "new gaming operator's the 1995 Agreement mean a gaming operator's licence granted under Pt 3 of the 1991 Act (as it might be amended, re-enacted or replaced from time to time) or any statutory authority whose effect was to confer on the holder substantially the same rights as were conferred on Tatts by its gaming operator's licence at the time of its expiration? in cl 7 of licence" As just seen, both the primary judge and the Court of Appeal rejected the State's contention that the phrase "new gaming operator's licence" in cl 7 of the 1995 Agreement referred to a gaming operator's licence granted under Pt 3 of the 1991 Act (as it might be amended, re-enacted or replaced from time to time). Both the primary judge and the Court of Appeal concluded that the expression "new gaming operator's licence" in cl 7 of the 1995 Agreement meant "any licence or other authority of substantially the same kind as [Tatts'] existing gaming operator's licence"20. The Court of Appeal stated21: "Whilst it is plain that the State is correct to submit that the gaming operator's licence held by [Tatts] at the date of the 1995 Agreement was specifically defined and identified as one granted under the 1991 Act, it does not follow that 'a new gaming operator's licence' contemplated by cl 7 taking effect some 17 years later was intended to be so confined." The Court of Appeal continued22: "[H]ad [honest and reasonable business people in the position of the parties] been asked at the point of entry into the 1995 Agreement whether 'a new gaming operator's licence' meant not only a new gaming operator's licence issued under the 1991 Act (as it might be amended, 20 Tatts Group Ltd v Victoria [2014] VSC 302 at [95]. See also Victoria v Tatts Group Ltd [2014] VSCA 311 at [147]. 21 Victoria v Tatts Group Ltd [2014] VSCA 311 at [132]. 22 Victoria v Tatts Group Ltd [2014] VSCA 311 at [146]. Bell Gordon re-enacted or replaced from time to time) but also any form of authority which conferred rights to carry on gaming operations in substance the same as the rights which were conferred on [Tatts] by the Gaming Operator's Licence, they would undoubtedly have answered, yes." For the reasons that follow, that construction should not be accepted. The phrase "new gaming operator's licence" in cl 7 of the 1995 Agreement referred to a gaming operator's licence granted under Pt 3 of the 1991 Act (as it might be amended, re-enacted or replaced from time to time). That construction is supported by reference to the text, context and purpose23 of cl 7 of the 1995 Agreement. Text of the 1995 Agreement Clause 7 of the 1995 Agreement relevantly stated: If the Gaming Operator's Licence expires without a new gaming operator's licence having issued to [Tatts], [Tatts] shall be entitled to be paid, by the [State], an amount of money as compensation for the investment in infrastructure lost. This amount will be equal to the Licence Value of the Gaming Operator's Licence or the premium payment by the new licensee, whichever is the lesser. 7.2 No amount will be payable pursuant to sub-clause 7.1 if a new gaming operator's licence is not issued to any person, or is issued to [Tatts] or a related entity of [Tatts]. For the purposes of sub-clause 7.1 (but subject to sub-clause 7.4) 'Licence Value' in relation to the former Gaming Operator's Licence means the amount calculated in accordance with the following formula: ..." (emphasis added) Words and phrases appearing in the 1995 Agreement had, by reason of cl 1.3 of that agreement, the same meaning as in the 1991 Act unless the contrary intention appeared. Section 3(1) of the 1991 Act, at the time of the 1995 Agreement, relevantly defined "gaming operator" to mean "the holder of a gaming operator's licence under Part 3" of the 1991 Act. There was nothing in 23 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 89 ALJR 990 at 998-999 [46]-[51]; 325 ALR 188 at 197-198; [2015] HCA 37. Bell Gordon the text of cl 7 of the 1995 Agreement to suggest that the phrase "gaming operator" was not to be defined by reference to the meaning in the 1991 Act. The phrase "gaming operator" in cl 7 therefore meant "the holder of a gaming operator's licence under Part 3" of the 1991 Act. The Court of Appeal accepted the State's submission that the phrase "gaming operator's licence" had a clear meaning under the 1991 Act24. That conclusion was not surprising. That phrase was used throughout the 1991 Act and had one relevant meaning – a gaming operator's licence issued under Pt 3 of the 1991 Act. However, contrary to the view expressed by the Court of Appeal25, the meaning of the phrase "gaming operator's licence" in cl 7 did not change because of the addition of the word "new". When construing that phrase it is to be presumed, as the State submitted, that the parties used the phrase consistently26. There was nothing in cl 7 to suggest a different meaning. That conclusion is supported by the fact that Tatts' "Gaming Operator's Licence" and the "new gaming operator's licence" referred to in cl 7 were not unconnected instruments. The commercial value of the "new gaming operator's licence" (ie the premium payment to be paid by the new licensee) was treated as one indicator of the amount Tatts could be entitled to if its "Gaming Operator's Licence" expired without a "new gaming operator's licence" being issued to it27. Similarly, the other method of calculation of the amount to which Tatts could be entitled on the expiry of its "Gaming Operator's Licence" was the "Licence Value" of its Gaming Operator's Licence. The Licence Value of Tatts' Gaming Operator's Licence was to be calculated by the application of the formula in cl 7.3, which incorporated reference to $520 million, the sum generated by the float in respect of Tabcorp's gaming business. In other words, the Licence Value was to reflect the market value of the advantage secured by Tatts' semi-exclusive right to conduct the business of gaming in Victoria. Tatts' "Gaming Operator's Licence" and the "new gaming operator's licence" were not unconnected. 24 Victoria v Tatts Group Ltd [2014] VSCA 311 at [151]. 25 Victoria v Tatts Group Ltd [2014] VSCA 311 at [149], [151]. 26 See, for example, Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 at 109; [1973] HCA 36. 27 cl 7.1 of the 1995 Agreement. Bell Gordon The ability of any other person to apply for a gaming operator's licence28, and the likely resulting bidding to fix the market value of the new gaming operator's licence provided for under the 1991 Act and the 2003 Act, stand in stark contrast with the statutory price fixing mechanism for GMEs under the 2003 Act. The premium payment referred to in cl 7.1 reflects that to acquire the new gaming operator's licence, the new licensee must have been willing and able to pay a significant sum to acquire a semi-exclusive entitlement to conduct the gaming business throughout Victoria. The regime in relation to GMEs is different – the person acquiring the GME(s) must pay the price fixed by the Minister for the right to operate a certain number of gaming machines at a specific venue in respect of which a venue operator's licence must also be held29. Next, although cl 7.1 describes the amount of money payable as "compensation for the investment in infrastructure lost", it must be read with cl 7.2, which expressly provides that no amount is payable at all – whatever the value of infrastructure lost – if Tatts' Gaming Operator's Licence expires without a new one being "issued to any person". In other words, if a new gaming operator's licence having the commercial advantages of Tatts' existing Gaming Operator's Licence was not issued to any person, no amount would be payable. The terms of cl 7.2 are inconsistent with a suggestion that Tatts would become entitled to the terminal payment simply upon the expiration of its Gaming Operator's Licence. Indeed, in other provisions of the 1995 Agreement30 the phrase "new gaming operator's licence" was used to refer to a new gaming operator's licence issued under Pt 3 of the 1991 Act, being of the same kind as Tatts' Gaming Operator's Licence. For example, cl 5.2 of the 1995 Agreement provided that if Tatts' "Gaming Operator's licence is transferred to, or a new gaming operator's licence is issued to, a related entity of [Tatts] prior to the time at which the Gaming Operator's Licence would expire by effluxion of time, no compensation will be payable to [Tatts] pursuant to clause 7 at the time of such transfer or issue but such related entity will be entitled to the benefit of clause 7 as a permitted assignee or properly constituted successor of [Tatts]" (emphasis added). 28 See s 33 of the 1991 Act and s 3.4.29 of the 2003 Act. 29 See ss 3.4A.1 and 3.4A.5 of the 2003 Act. 30 See, for example, cll 5.2 and 8.1.6. Bell Gordon This provision (and the other provisions that use the phrase similarly) supports a construction of "new gaming operator's licence" in cl 7 as referring to a new gaming operator's licence issued under Pt 3 of the 1991 Act which was to serve the same purpose as Tatts' initial Gaming Operator's Licence. Context and purpose of the 1995 Agreement That the phrase "new gaming operator's licence" in cl 7 of the 1995 Agreement referred to a gaming operator's licence granted under Pt 3 of the 1991 Act (as it might be amended, re-enacted or replaced from time to time) is further supported by the context and purpose of the 1995 Agreement. The Court of Appeal took the view that honest and reasonable business people in the position of the parties, at the point of entry into the 1995 Agreement, would have answered "yes" to the question whether "a new gaming operator's licence" extended to "any form of authority which conferred rights to carry on gaming operations in substance the same as the rights which were conferred on [Tatts] by the Gaming Operator's Licence"31. The question posed by the Court of Appeal did not reflect the context in which the question arose or the purpose of the 1995 Agreement. That context and purpose should have led to a different answer. 1995 Agreement predicated upon the existence of the duopoly First, the 1995 Agreement was predicated upon the existence of the duopoly in the operation of gaming machines in Victoria. The question posed by the Court of Appeal failed to take sufficient account of that important contextual consideration. That the duopoly existed and was the basis of the 1995 Agreement is reflected in that agreement's terms. Recital A recorded that Tatts held a "Gaming Operator's Licence" in Victoria (under the 1991 Act). The only other entity authorised to operate gaming machines in Victoria at the time the 1995 Agreement was executed was Tabcorp, which held its conjoined wagering licence and gaming licence under the 1994 Act. Recital D recorded that the 1995 Agreement recognised that the business carried on by Tatts was to be regulated on terms "substantially as favourable" as 31 Victoria v Tatts Group Ltd [2014] VSCA 311 at [146]. Bell Gordon the terms regulating Tabcorp's gaming machine business and that Tatts was otherwise to have the benefit of the 1995 Agreement. Recital D acknowledged the existence of the duopoly and that an object of the 1995 Agreement was to ensure that the balance of power was not distorted by government regulation. Clause 6, in referring to the "Other Gaming Machine Operator", assumed the existence of the duopoly. It went on to provide that the Minister agreed that "for the term of the Gaming Operator's Licence [Tatts'] conduct of the business will be regulated on terms substantially as favourable as the terms regulating the gaming machine business operated by Tabcorp". In other words, the clause acknowledged the existence of the duopoly. Indeed, it is not possible to understand or explain the reference to "the premium payment" in cl 7 of the 1995 Agreement without understanding it as being a payment by the new licensee which would reflect the value of the right to participate in the duopoly. For the payment entitlement under cl 7.1 to arise, it was necessary that the duopoly continue and that the new licence to participate in that duopoly not be issued to Tatts. If the duopoly were to continue and Tatts was not granted a new licence, the value of the business which it had built up, and paid for under cl 3 of the 1995 Agreement, would have been amortised because the right lawfully to carry it on would have been denied to it and given to another. But if the duopoly were not continued, then even though Tatts would no longer share in the advantages of the duopoly in respect of gaming operations, the business which it built up and paid for would not have been given to another. Clause 5.2 of the 1995 Agreement also assumed the existence of the duopoly32. The right to payment under cl 7 would not arise if Tatts transferred the licence to a related entity. However, Tatts' related entity would have been entitled to the benefit of cl 7, reflecting the value of the right it would then hold to participate in the duopoly whilst it continued. Finally, reference should be made to the Treasurer's letter which, it will be recalled, was annexed to the 1995 Agreement as Sched 233. It confirmed the existence and the terms of the duopoly by stating that: 32 See [16] above. 33 See [18] above. Bell Gordon the Gaming Operator's Licence granted to Tatts under the 1991 Act gave Tatts "a concurrent right (with [Tabcorp] and Crown Limited) to conduct gaming, for a fixed period"; the Gaming Operator's Licence would expire on 14 April 2012; the Government did not then intend to grant further gaming licences to persons who were not then authorised to conduct gaming or wagering during the licence period; Tatts' entitlement to retain amounts by way of commission on gaming would be maintained at 33.33 per cent for the period of the licence; Tatts (or its successors) could "apply for a new licence after the initial licence terminates and on the same terms as other applicants. The process of awarding a new licence [might] involve a public tender. It [was] also expected but not guaranteed that the new licence would be awarded to the highest qualifying bidder. If the new licensee [was] not [Tatts], [Tatts would] be entitled to receive the State capital compensation as provided from [the 1995 Agreement]"; for it was "intended that any new licence [would] be granted on conditions which include[d] conditions substantially to the same effect as those to which [Tatts'] licence [was] subject"; and those principles did not bind "this Government or future Governments" and "the Victorian Parliament [had] the power at any time to amend existing legislation or pass new legislation affecting [Tatts'] operations or the terms on which those operations [were] conducted". the Treasurer's Reasonable business people reading letter would understand that the "new licence", like the initial gaming operator's licence held by Tatts, would be an element of the duopoly and that Tatts' entitlement to receive "capital compensation" from the State was dependent upon another applicant's successful tender for that new gaming operator's licence on the basis that the duopoly continued. Reasonable business people reading the Treasurer's letter would not have failed to appreciate that the grant of a new licence – which was necessary to create and fund an entitlement to the terminal payment – was dependent upon the continuation of the duopoly and the concomitant Bell Gordon that entailed commercial advantages which the new duopolist. Reasonable business people reading the Treasurer's letter would have appreciated the evident need for the payment to Tatts to be revenue neutral for the State. They would have understood that this meant that there would need to be a payment by an entity ready and able to make a payment which would reflect the market value of the share of the duopoly which the grant of the new licence would carry with it. for the duopoly would continue. No less importantly, reasonable business people reading the Treasurer's letter would have appreciated that the 1995 Agreement gave no assurance that the duopoly would be continued, and that if the Executive government and legislature were not persuaded that the duopoly should continue, the entitlement to "capital compensation" would not arise. The statements in the Treasurer's letter, and the terms of cl 7 of the 1995 Agreement itself, withheld any assurance that That was both unsurprising and understandable. It could be expected that, following the experience of years of the duopoly, a political judgment might be made that the continuation of the duopoly was not in the public interest. Arrangements which restrict competition have generally been regarded as contrary to the public interest34, and the socio- economic issues attending gambling (and the extent of State involvement in, and revenue raised by, those activities) might be expected to be of concern to legislators. The Executive government was, understandably, not willing to commit the State to a position whereby a decision as to the public interest might be compromised by entrenched interests of the duopolists, whose exercise of their powers and advantages as duopolists would necessarily be a factor in any political judgment as to the future of the gaming industry. Other contextual matters Another important contextual matter was the fact that the "business" protected by the 1995 Agreement was that defined in cl 1.1 of that agreement – "[Tatts'] gaming machine business carried on in the [State], including the acquisition, supply, installation and operation of gaming machines". The Court of Appeal concluded that the aggregate of rights conferred on venue operators with GMEs was substantially and relevantly the same as those conferred on Tatts by the Gaming Operator's Licence. But the authority conferred by a GME, when linked – as is required by the 2009 Amendments – to a venue operator's licence, is limited in its effect and value, both geographically and functionally, when 34 Holdsworth, A History of English Law, 2nd ed (1937), vol 8 at 56-62. Bell Gordon compared with the value of the authority conferred on Tatts and Tabcorp under the legislative regime which sustained the duopoly. Finally, the Court of Appeal35 and the primary judge36 were of the view that it made "commercial nonsense" of the State's promise to make the terminal payment, as compensation for infrastructure lost under cl 7 in return for Tatts' agreement to pay the substantial fees set out in cl 3 of the 1995 Agreement, to construe the phrase "new gaming operator's licence" in cl 7 of the 1995 Agreement as referring to a gaming operator's licence granted under Pt 3 of the 1991 Act (as it might be amended, re-enacted or replaced from time to time). This approach was based on too broad a view of the commercial interests of Tatts that were protected by cl 7 of the 1995 Agreement. Protection of Tatts' commercial interests was limited37. Tatts' commercial interests were protected whilst the duopoly continued. They were not protected if the duopoly did not continue. The proper construction of cl 7 For these reasons, the text, context and purpose of the 1995 Agreement all support the conclusion that the phrase "new gaming operator's licence" in cl 7 of the 1995 Agreement referred to a gaming operator's licence granted under Pt 3 of the 1991 Act (as it might be amended, re-enacted or replaced from time to time). As a "new gaming operator's licence" was never issued to any person, Tatts is not entitled to payment under cl 7 of the 1995 Agreement. The 1995 Agreement and the 1996 Act The Court of Appeal also concluded that the 1995 Agreement "was intended to survive the enactment of the statutory provisions which it envisaged … [I]t would be commercially improbable to attribute an intention to the parties that their rights and obligations under the 1995 Agreement should be spent upon the passage of the legislation provided for by cl 8"38. 35 Victoria v Tatts Group Ltd [2014] VSCA 311 at [157]-[158]. 36 Tatts Group Ltd v Victoria [2014] VSC 302 at [101]-[102]. 37 See [64]-[72] above. 38 Victoria v Tatts Group Ltd [2014] VSCA 311 at [211]-[212]. Bell Gordon Given the view formed about the proper construction of the 1995 Agreement, it is not necessary to address the correctness of that conclusion or the two propositions which underpinned it. The two propositions were, first, that the creation of an enforceable promise by the State to make the terminal payment was entirely a matter for agreement between the parties without the need for the legislation contemplated by cl 8 of the 1995 Agreement and, second, that the parties intended that cl 7 should continue to have an operation independent of that legislation. The first proposition may raise questions under the State Constitution, as to which we say nothing. The second is essentially constructional and does not sit well with cl 8. The express words of cl 8, which have already been set out in these reasons, provide support for the conclusion that, objectively speaking, the parties did not intend that the terminal payment obligation in cl 7 of the 1995 Agreement should have an operation independent of, and more extensive than, the provisions of the 1991 Act dealing with that subject. Indeed, cll 8.1.1 and 8.1.2 of the 1995 Agreement are readily understandable as directed to providing the desirable certainty and avoidance of doubt. The balance of cl 8 of the 1995 Agreement provides further support for that conclusion. The text of cl 8.1.7 indicates that the provisions of the legislation referred to in the earlier sub-clauses were intended by the parties "to give effect to this Agreement". The natural reading of this provision is that there was to be only one legal "effect" or outcome on the performance of cl 8. Next, cll 8.1.1 and 8.1.2 contemplate legislation will "include" obligations to pay, the content of these obligations being in accordance with cll 3 and 7 of the 1995 Agreement. The possibility of variance between what may be achieved by the Minister by the exercise of his best endeavours and the effect of cll 3 and 7 of the 1995 Agreement is necessarily acknowledged by the fact that the Minister's obligation was only to "use his best endeavours". But there is no suggestion that the Minister did not comply with his obligation. The respective obligations as to payment imposed upon Tatts and the State were included in the legislation to "give effect to" that agreement. that the Put simply, the parties' expectation was that, upon the passing of the legislation, their respective payment obligations would be included in the legislation and have effect. There is nothing to suggest that the parties intended that the obligations which were to be "included" would remain operative independently of the legislation contemplated by the 1995 Agreement. If that supposition were adopted, there would be two charters of the parties' rights in respect of the same subject matter operative at the same time. Such a result is unlikely. One would not readily attribute to the parties an intention that Tatts Bell Gordon should be obliged to make two sets of payments, one under cl 3 and one under the legislation passed to give effect to cl 3. Such a result would be inconsistent with the express terms of the 1995 Agreement that this payment obligation was to be "included" in the legislation. Effect of 2009 Amendments The State also contended that if the relevant provisions of the 1995 Agreement survived the enactment of the 1996 Act, then those provisions were abrogated by the enactment of the 2009 Amendments. Given the view formed about the proper construction of the 1995 Agreement and the effect of the 1996 Act on the 1995 Agreement, it is not necessary to address this contention. Tatts' Notice of Contention and s 3.4.33 of the 2003 Act By a Notice of Contention, Tatts sought to support the orders of the Court of Appeal on the basis that it was entitled to payment under s 3.4.33 of the 2003 Act because the phrase "gaming operator's licence" in that section included "any licence or entitlement which in substance authorises the conduct of gaming operations at approved venues", which in turn would include the allocation of GMEs by the State. That contention cannot be accepted for the reasons stated by the primary judge39 and by the Court of Appeal40 – namely, that the precise definition of "gaming operator's licence" in s 1.3(1) as "a licence granted under Division 3 of Part 4 of Chapter 3" of the 2003 Act leaves no room for an alternative, broader interpretation of "gaming operator's licence". Conclusion and orders For those reasons, the appeal to this Court should be allowed with costs. The orders of the Court of Appeal made on 4 December 2014 should be set aside and, in their place, there should be orders that: the appeal be allowed with costs; 39 Tatts Group Ltd v Victoria [2014] VSC 302 at [204], [250]. 40 Victoria v Tatts Group Ltd [2014] VSCA 311 at [51]-[53]. Bell Gordon orders 1 and 2 of the orders of the primary judge made on 27 June 2014 be set aside and, in their place, the proceeding be dismissed with costs; Tatts Group Limited pay the State of Victoria $540,467,887.92 with interest, calculated from 27 June 2014.

HIGH COURT OF AUSTRALIA AND THE QUEEN APPELLANT RESPONDENT [2012] HCA 27 15 August 2012 ORDER Appeal dismissed. On appeal from the Supreme Court of Victoria Representation M J Croucher SC with L C Carter for the appellant (instructed by Doogue G J C Silbert SC with B L Sonnet for the respondent (instructed by Solicitor for Public Prosecutions (Vic)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Criminal law – Evidence – Common law – Hearsay – Admissions – Appellant and co-accused jointly tried for murder – Appellant convicted; co-accused acquitted – Co-accused made certain admissions in police interview and to witnesses ("out-of-court confessional statements") – Consideration of Bannon v The Queen (1995) 185 CLR 1 – Whether out-of-court confessional statements were admissible in exculpation of appellant as exception to hearsay rule. Words and phrases – "admissions", "against penal interest", "hearsay rule", "out-of-court confessional statements". FRENCH CJ, GUMMOW, HAYNE, CRENNAN, KIEFEL AND BELL JJ. On 26 March 2008, the appellant and a juvenile, LM, were arraigned in the Supreme Court of Victoria (Whelan J) on a presentment charging them jointly with the murder of a young man named Albert Snowball. On Sunday 27 November 2005, the deceased was at a party on the first floor of a converted warehouse in Brunswick. At around 3am, an altercation took place on the landing of the stairwell just outside the party. In the course of the altercation, the deceased crashed through a window and fell 5.4 metres to the ground. He died two days later as the result of the injuries he sustained in the fall. It was the Crown case that at the time of his fall the deceased was being attacked by the appellant and LM. The precise circumstances of the fall were not known. A push or punch might have projected him through the window, or the window may have shattered as he backed away from the fury of the attack. On either view, the act or acts of the appellant and LM in attacking the deceased were capable of being the legal cause of his death1. It was not alleged that the appellant or LM intended that the deceased should go through the window. On the Crown case, each was liable for his murder because they were acting in concert with the intention of inflicting really serious injury or because one was aiding and abetting the other knowing the other was assaulting the deceased with that intention. A number of witnesses described the events on the landing leading up to the deceased's fall. There were two inconsistent versions. On the first version, the appellant was the principal assailant. On the second version, the appellant was restrained throughout the fight by a bystander and LM was the sole assailant. The appellant made no admissions as to any involvement in the incident. Neither he nor LM gave or called evidence at the trial. LM participated in an interview with the police in which he made admissions which included that he had pushed the deceased. LM also made statements to witnesses in the immediate aftermath of the incident which were capable of being viewed as an admission of responsibility for the deceased's fall. 1 Royall v The Queen (1991) 172 CLR 378 at 389-390 per Mason CJ, 398 per Brennan J, 410-411 per Deane and Dawson JJ, 423 per Toohey and Gaudron JJ, 441 per McHugh J; [1991] HCA 27. Crennan Bell The course of the trial and the procedural history At the date of the trial, the common law governed the admissibility of LM's statements in the appellant's case2. Subject to recognised exceptions, the rule against hearsay precludes the admission of out-of-court statements as evidence of the fact asserted in the statement3. In Bannon v The Queen, it was acknowledged that the common law of Australia has not to date recognised an exception for the out-of-court confessional statements of a co-accused or a third party from the operation of the rule4. At the conclusion of the evidence, the trial judge raised with counsel the content of the directions to be given to the jury in the trial of the appellant with respect to LM's statements. His Honour observed that the circumstances of the joint trial were "very closely analogous" to those considered in Bannon. Counsel for the appellant submitted that there was a clear distinction between the two cases and that fairness required that the jury be permitted to take into account LM's admissions in considering whether the Crown had established his client's guilt. Whelan J ruled that LM's out-of-court statements were not admissible in the appellant's trial, observing that "there is at present no exception to the hearsay rule which would render [LM's] admissions admissible in [the appellant's] trial." Notwithstanding the ruling, and it would seem without objection, the appellant's counsel told the jury that he was precluded from addressing them on LM's admission to the police that "I pushed him". 2 The trial commenced on 26 March 2008. The verdict on the appellant's trial was returned on 26 May 2008. The relevant provisions of the Evidence Act 2008 (Vic) commenced on 1 January 2010. It is modelled on the Evidence Act 1995 (Cth) and the Evidence Act 1995 (NSW), which were largely the product of the draft Evidence Bill proposed by the Australian Law Reform Commission in its report, Evidence, Report No 38, (1987). See also Australian Law Reform Commission, Evidence, Report No 26, Interim, (1985). 3 Cross on Evidence, 8th Aust ed (2010) at 1072 [31010]. 4 Bannon v The Queen (1995) 185 CLR 1 at 22 per Dawson, Toohey and Gummow JJ; [1995] HCA 27. Crennan Bell Whelan J directed the jury in conventional terms that: "The evidence concerning admissions by [LM] is only evidence in his case, it is not evidence in [the appellant's] case. So when you separately consider [the appellant's] case, you ignore the admissions allegedly made by [LM], they are not evidence in [the appellant's] case." The jury returned verdicts acquitting LM outright and convicting the appellant of the murder of the deceased. The appellant applied for leave to appeal against his conviction to the Court of Appeal of the Supreme Court of Victoria (Maxwell P, Buchanan and Bongiorno JJA). The grounds of appeal included a contention that LM's out-of- court statements had been wrongly excluded. On the hearing of the application in the Court of Appeal, that ground was not pressed. The application was argued on the sole ground that the verdict was unreasonable and could not be supported having regard to the evidence5. The Court of Appeal considered there was no substance to this ground and the application for leave to appeal was refused6. The appellant applied for special leave to appeal on the ground not pressed in the Court of Appeal: that LM's out-of-court statements had been wrongly excluded. The appellant submitted that his failure to preserve the point below should not preclude the grant of special leave in circumstances in which the Court of Appeal was bound to uphold Whelan J's ruling. He submitted that LM's admissions met the requirements of reliability and prejudice that the joint reasons in Bannon suggest are a prerequisite to the consideration of any extension of the exceptions to the hearsay rule. In the circumstances, special leave to appeal was granted. Nonetheless, the proper course was for the appellant to have maintained his ground of challenge in the Court of Appeal. This Court would have had the benefit of that Court's analysis of the issues that are said to be presented. Contrary to the appellant's submissions, LM's statements when assessed in the context of the Crown case do not present issues materially different from those considered in Bannon. The exclusion of LM's out-of-court statements in the appellant's trial did not occasion a miscarriage of justice. For the reasons to be given, the appeal should be dismissed. 5 Baker v The Queen [2010] VSCA 226 at [2]. 6 Baker v The Queen [2010] VSCA 226 at [51], [55]-[57]. Crennan Bell It is convenient at this juncture to refer to the evidence given at the joint trial and the contents of LM's statements in some detail. The evidence On the evening of Saturday 26 November 2005, around 100 to 200 people attended the warehouse party. A band was to perform at the party. LM attended the party with a view to "free-styling" with the band. LM travelled to the party in a car with several other persons. The group included the appellant, Ali Faulkner The atmosphere at the party was described as being good until around 3am. At that time, two persons, who it was open to find were the appellant and Faulkner, commenced an apparently random and unprovoked assault on the party-goers. On the Crown case, LM joined in the violence. Neither the appellant nor LM put in issue his presence at the party at the time the violence commenced or on the landing in the period before the deceased's fall. There were a number of people on the landing at that time. Common to the accounts of all of the witnesses was that a fight was taking place on the landing at the time the window shattered. As may be expected, the accounts of the witnesses of this violent and fast-moving incident varied considerably. The appellant, LM and Morgan are all of African origin. The deceased was Caucasian. A number of witnesses described the appellant by reference to his wide, or big, eyes, muscly body, and headband described as a "do-rag". Several said he was bare chested at the time of the fight on the landing. Morgan is tall. His hair was styled in "corn rows". Faulkner does not appear to be of African origin. He was described as being of Arabic or Lebanese appearance. The following account of the evidence is taken from the judgment of the Court of Appeal supplemented by reference to the summary of evidence, which forms part of the appeal papers. The appellant, Faulkner and, on the Crown case, LM exhibited a high degree of aggression over several minutes inside the room in which the party was held. Party-goers, including women, were punched and struck with bottles. The appellant, Faulkner and LM then left the party through a doorway which opened onto a landing on the stairwell. Crennan Bell On the first version of events, given by Asher Doig, Peter Arcaro, Earl Stuart and Patricia Brady, it was open to find that the appellant was the principal assailant. On the second version, given by Nassir Asfer, Eric Masonga and, to some extent, Morgan, it was open to find that LM was the sole assailant. Doig was on the landing. He saw five or six black men come out onto it from the party. They were behaving "very aggressively". They started pushing the deceased. At least two instigated the assault on him. The appellant was the main instigator. The other assailant was tall and had corn rows. At one point, the deceased was pushed against a railing and the appellant ran up and kneed him in the chest or ribs. The group then walked down to the lower landing. As they did, the deceased said something like "you bastards". The appellant ran back up the stairs and began punching the deceased and behaving "in a very psychotic manner". Another black man was also punching the deceased. This was not the man whose hair was styled in corn rows. The appellant picked up a chair to hit the deceased, but Doig and another man each took hold of the chair's legs and pulled it down. The fight was "fairly brutal"; like a form of kick boxing. Towards the end, the appellant threw the deceased against the wall and "king-hit" him. He then went to hit him again, but the blow missed. A further punch connected. After this, either as the result of a punch or a push, Doig saw the deceased "literally flying through the window". Arcaro was also on the landing. He saw a group of three or four men walking down the stairs, a few of them were dark skinned. The appellant looked at the deceased and ran back up the stairs to fight with him. It was a one-on-one fight. The appellant was punching and pushing the deceased, who was not really fighting back. A few people, including Doig, tried to restrain the appellant. The appellant was "incredibly aggressive … every movement … was kind of aggressive and wild". At one stage, the appellant picked up a chair but it was taken from him. During the fight, the appellant and the deceased "worked their way" to the left of the window. The appellant either punched or pushed the deceased through the window. Stuart said that the appellant and two other African men had been ushered out onto the landing by a number of people. The appellant was "very angry, very animated" and he was "passionately … resisting". The three African men were ushered down the stairs and then they came back up in a "fighting manner". The appellant was fighting and one of the others was trying to stop the fight. The deceased was struck by more than one person and he was "bumped back" by "the velocity of the activity". The appellant was involved in a "quite severe fight" and his actions were "scary". There had been "a frenzy of blows … with hands and Crennan Bell feet" but, according to Stuart, the deceased was not the target of the attack. The deceased went through the window as the result of being pushed back "by the force of what was occurring". Stuart's evidence departed from an earlier statement that he had made to the police and the Crown Prosecutor was given leave to put leading questions to him. Stuart then confirmed that the appellant was yelling in an aggressive and threatening manner and that his eyes were fixed on the deceased when he came onto the landing. He was kicking him. The appellant carried out a sustained attack on the deceased. Another African man was also punching the deceased, but not at the same rate as the appellant. The ferocity of the attack caused the Under deceased cross-examination by the appellant's counsel, Stuart said that the white male being attacked by the appellant was not the person who went out the window. This was a direct contradiction of the evidence that Stuart had given in response to the Crown Prosecutor's leading questions. to be "kicked or pushed" the window. through Brady was on the landing when the door opened and a group of mostly black persons came out. They were fighting: "just a huge ball of fight literally coming out and moving down the stairs." One of them came charging back up the stairs. He was looking at someone behind Brady. He "whacked" this person. Brady's description of the aggressor was consistent with him being the appellant. This man picked up a chair as if to throw it, but someone grabbed it off him. He was throwing lots of punches at the white man. She could not recall if the white man fought back. The fight continued for a minute or two and then she heard the window smash, she turned around and the white man was gone. Two witnesses, Benjamin Dudding and John Corrin, appear to have seen the incident on the landing through a frosted glass door. Dudding saw a fight between a dark skinned man and a Caucasian. He said there may have been more than two involved in the fight. Corrin saw two black skinned individuals attacking one person. He could see that punches were being thrown. An alternative version of events was given by Asfer and Masonga, who were both on the landing with Morgan. Asfer had travelled to the party with the appellant, LM, Faulkner and Morgan. He did not see any fighting inside the party. He said that the appellant and Faulkner had come outside looking upset and walked downstairs. They said that they had been involved in a fight inside. The deceased came from the party onto the landing and asked the appellant and Faulkner, "Why did you hit me?" The appellant and Faulkner ran back up the stairs, at which time LM came out onto the landing. Morgan grabbed Faulkner Crennan Bell and restrained him and Asfer restrained the appellant. LM began fighting with the deceased. The appellant was not fighting with anyone. He could not have made contact with anyone in the fight because Asfer had hold of him. At some point, the appellant picked up a chair and was holding it over his head but was forced to drop it because Asfer was still holding him. LM continued to fight with the deceased. The two were punching each other. LM was facing the window and the deceased was facing the stairs. Asfer heard the window break. He did not see it break because he was struggling with the appellant. Asfer was in the car with the appellant, LM, Faulkner and Morgan after the incident. He said that LM had challenged Faulkner, saying "look what you made me do". Masonga saw the appellant, LM and Faulkner come out of the party and go down the stairs to the middle landing. After a pause, the appellant and LM came back up the stairs. The appellant approached a white male on the landing near the railing and a fight broke out between them. LM approached the deceased and they started fighting. The appellant did not fight with the deceased. In evidence in chief, Masonga said that he had not seen anyone go through the window. In cross-examination, he said that the deceased had lost his balance in fighting LM, stepped backwards to recover his footing and fallen through the window. Masonga was clear that LM was the last person to have physical contact with the deceased before the deceased fell. In his initial account to the police, Masonga said that he had not seen any fighting on the landing. He acknowledged under cross-examination that his first statement contained a number of "inventions". He had signed the false statement because he had not wanted to get involved. Morgan was on the landing when the appellant and Faulkner came out. He thought they had rushed down the stairs. A person came out of the party and the appellant focussed on that person. The appellant came back up the stairs. Faulkner ran after him. Morgan stopped Faulkner because Faulkner had been behaving aggressively all night. At this point, LM came onto the landing. There was a fight, but Morgan was focussed on Faulkner and did not really know what was going on. He recalled that LM was hit in the face and that he hit someone back. He did not know who LM hit or who hit first. He thought that the appellant may have been physically involved but he was not sure. He thought he saw the appellant pick up a chair and put it down again. The appellant was fighting. This went on for less than five minutes. There was yelling and people came out onto the landing and the situation got out of control. He heard the Crennan Bell sound of smashing glass and looked up. He heard that someone had fallen out of a window. After this, everyone on the landing went down the stairs and Morgan saw the man on the ground. The appellant, LM, Morgan, Faulkner and Asfer ran off. They all got in a car. The appellant was driving. LM was angry with Faulkner and they exchanged words. Morgan remembered LM saying "see what you've done" and "see what you put us through". In cross-examination, Morgan agreed that in his statement to the police he had said that LM said, "see what you've done, look what you've made me do". LM's out-of-court statements LM's interview with the police took place on the evening of the incident. LM spoke with a solicitor prior to its commencement. His father was present throughout the interview. At the beginning of the interview, LM was cautioned and advised that the investigation related to serious assaults in which a male had received life threatening injuries. LM was reluctant to name his associates or to identify the person who had invited him to attend the function. He had been "pretty drunk". LM's initial narrative description of events on the landing is set out below: "There was a dispute with my – one of my friends against some people there which we never met before. And then they sort of went out to the stairs – the stairway and al–, I was just tryin' to break it up 'cos that was my night that I performed there. So I didn't want a bad name for my first career name. So, I was breaking – I was breakin' – bas–, basically, breakin' the fights that they were fightin'. I said, 'I'm performin', what are youse doin', boys?' In the end, they sort of went outside to the stairs and were pushing my mates down the stairs and this guy came out, just through the door, started yelling at my friend. And my friend just went to hit him. And I – like, I – I – I was pushing – I broke it up and said, 'Keep walkin', mate,' to my friend. And the other guy from the side hit me here. I go, 'What are you doin'?' an' I pushed him away. I turned away and ke–, went down the stairs. And then, when I got downstairs, the guy was outside on the pavement. And was shocked, so … disappear." The essentials of this account were repeated on a number of occasions in the course of the interview: Crennan Bell "Q. 180 Okay. Did your friend that was with you walking down punch the other white guy near the landing? A. No. Th–, the – they couldn't 'cos I was in the middle. Q. 181 You were in the middle between the white guy – – – ? Q. 182 And your friend? Q. 183 And you've pushed him downstairs? A. My friend. Q. 184 Yep. A. Keep walkin', pushed him down the stairs. He – and then he – he – he was swearing at him but he kept walkin'. And as I was walkin' down, the guy hit me from the back. Q. 185 The guy who was following you? Q. 186 How – what fist did he use to punch you? A. I don't know 'cos – but, that's what I mean. Like, I was – I was pushing my friend. That's what I mean, so by the time I turned around, I copped a punch here. I don't know if it was a left or a right. Q. 190 And where were you? Were you at the top of the landing or halfway down the stairs? A. On the top. Crennan Bell A. And the guy was standing here. And my friend was here. I was in the middle. You know, so I – I – I'm – I'm – I'm tryin' sort them 2 to stop fighting. Pushing my friend down the stairs, the guy from the side hits A. Then I turn around and I push him. I go, 'Piss off, mate,' and kept walkin'. And then when I went downstairs, the guy is on the – on the pavement. Q. 200 Did you see him go out the window? A. I pushed him and I turned and walked out. Q. 204 Did you hear anything? A. No. W–, when I went downstairs, when I seen the guy, I'm like, 'Oh my God.' I – I took off. I was – I was – I was shocked. Q. 209 And none of your other friends were involved? A. They're li–, when we went downstairs, like, we were lookin' at this guy and – and then all my friends came down. You know what I mean? I see 'em, I go, 'Let's get out of here. I don't know what – let's get out of here, done somethin' bad.' We t–, we left. Q. 210 You said, 'Let's get out of here, we've done something bad?' Q. 211 Why do you say you've done something bad? A. 'Cos, like, this guy fell from the stairs – the window. I–, like I – I thought, like, well, I dunno if it was me still but that was the guy that I Crennan Bell pushed, so he was – he was facin' on the ground and looked like unconscious. That was not – like, I was – I can't explain it. Q. 212 But you said you've done somethin' bad, but if you've only pushed him when he was punching you, do you think that's bad? A. Yeah, I – that's what I mean, like, either I did it or someone. But I know it was the guy that I pushed, 'cos I seen his face. Because they were – my friends, they were to still fight. I seen his face. I know what he looked like and – – –". LM was asked why he did not remain at the scene to tell police what had happened. He responded: "A. 'Cos it was somethin' terrible I did. Q. 275 Okay. We–, once again, I – I'm just a bit confused by this. You tell me you've done something terrible but then you say all you did was push a guy away who punched you. A. Well, I'm assuming that I did something terrible because at – at – as – I was the only person to have any contact with him at last, from – from – from what I've seen, so I'm only assuming that this guy is badly injured from me pushing him. And from what you – the information I've been told by you." LM estimated that the man was about a metre and a half in front of the window when he pushed him. He had not thought the man would go through the window. LM's references to his friend in his account of events on the landing and in the stairwell were not references to the appellant. On LM's account, he did not see the appellant on the landing or in the stairwell. Before turning to the appellant's submissions, there should be some reference to this Court's decision in Bannon v The Queen7. (1995) 185 CLR 1. Crennan Bell Bannon v The Queen Bannon and his co-accused, Calder, were jointly charged with the stabbing murders of a man and his de facto wife. Shortly after the killing, Calder made statements to associates that were capable of being understood as admissions that she had stabbed the victims. Bannon sought to rely on those statements in support of his case that Calder had acted alone. He was granted special leave to appeal on the ground that the trial judge erred by refusing to allow the jury to take Calder's statements into account in exculpation of him. Bannon argued that the exception to the hearsay rule respecting statements against pecuniary or proprietary interest should be extended to include, at the instance of the accused, third party statements against penal interest made by a person who is unavailable to give evidence. Alternatively, he argued that the hearsay rule should be relaxed in the case of confessional statements adjudged as meeting a test of reliability. Calder's statements would not have been admissible on either basis. The assertion on which Bannon sought to rely, that Calder acted alone, was not an asserted fact against Calder's penal interest8. The admissions went no further than the implied assertion that she had wielded the knife, an assertion that was not inconsistent with the Crown case that the two had acted in concert. The further implication, that she acted alone, was a "dubious inference" lacking the degree of reliability on which Bannon's submission depended9. Deane J was in general agreement with the joint reasons for dismissing Bannon's appeal10. His Honour considered that there were no grounds for apprehending that Bannon's trial had miscarried as the result of the exclusion of Calder's statements. Her statements did not provide unambiguous support for his case11. His Honour considered circumstances in which the exclusion of the confession of one accused at a joint trial may be productive of unfairness12. He 8 Bannon v The Queen (1995) 185 CLR 1 at 10 per Brennan CJ, 27-28 per Dawson, 9 Bannon v The Queen (1995) 185 CLR 1 at 26-27 per Dawson, Toohey and 10 Bannon v The Queen (1995) 185 CLR 1 at 12-13. 11 Bannon v The Queen (1995) 185 CLR 1 at 16. 12 Bannon v The Queen (1995) 185 CLR 1 at 13-14. Crennan Bell gave two examples of circumstances of this kind. The first was the joint trial of A and B for murder at which each asserts the other to be solely responsible and in which the prosecution tenders against B an unambiguous confession that he alone killed the deceased. The second, a variant of the first, posited the prosecution's acceptance that only one of the two committed the offence. In the context of these examples his Honour said13: "[I]t appears to me to be strongly arguable that the basic requirement of fairness dictates that, in circumstances where the Crown has seen fit to bring a person (the first accused) to a joint trial with another accused and to place before the jury material which is tendered only against that other accused but which is supportive of the innocence of the first accused, the trial judge have a discretion to direct that that material, even though otherwise inadmissible in the trial of the first accused, be evidence in that trial at the instance of the first accused if, in all the circumstances of the case, the trial judge considers that fairness to the first accused and the interests of the administration of justice support the conclusion that such a direction be given." As will appear, the appellant's principal argument is constructed on this passage in his Honour's reasons. The grounds of challenge The appellant's first ground of appeal asserts error in the trial judge's failure to direct the jury that LM's admissions could be used in exculpation of the appellant. The second ground is dependent upon success on the first. It asserts that it was an error for the Court of Appeal to hold that the evidence was capable of supporting the verdict without taking LM's admissions into account. The determination of the first ground makes it unnecessary to say more about the second. The appellant's argument acknowledged that under the present state of the law Whelan J's ruling was correct. Success on the appeal is dependent upon making good one of two contentions respecting the modification of the law of evidence governing hearsay. The appellant's principal contention was that a limited exception to the rule against hearsay confined to the conduct of joint trials should be allowed. A 13 Bannon v The Queen (1995) 185 CLR 1 at 15. Crennan Bell further, broad contention was that an exception for third party confessions should be allowed in order to bring the common law into line with the uniform Evidence Act provisions governing the reception of first hand hearsay when a witness is unavailable. The principal contention The appellant framed his principal contention this way: at a joint trial in which the prosecution relies on admissions by an accused, A, in proof of A's guilt, and those admissions also tend to exculpate the co-accused, B, the trial judge should be required (or have the discretion) to direct that A's admissions are evidence in B's trial to be considered in exculpation of B. It was submitted that an exception to the hearsay rule of the limited kind proposed would not be attended by the dangers of third party confessions generally14. Unlike the potential mischief of gaol-house confessions15, a confession tendered by the Crown against the maker at a joint trial is assumed to pass a threshold of reliability. The rationale for the exception to the rule respecting admissions (what a party himself admits to be true may reasonably be presumed to be so16) was suggested to apply with equal force to "LM's admission that he pushed the deceased and caused him to fall". It is to be observed that LM did not assert that his push caused the deceased's fall. His admission was to pushing the deceased when he was about one metre and a half from the window. In the context of the issues at the trial, the appellant's intended reliance on the assertions made by LM in his interview was not on the admission of the push but on the inference that the push was the cause of the fall because LM was the only person engaged in hostile physical contact with the deceased at the time of his fall. The appellant's submissions were apt to treat the assertions contained in LM's interview as an undifferentiated whole, possessed of reliability because they were made against LM's penal interest. Whether a previous representation 14 See R v Blastland [1986] AC 41 at 52-53 per Lord Bridge of Harwich. 15 Bannon v The Queen (1995) 185 CLR 1 at 9 per Brennan CJ. 16 Slatterie v Pooley (1840) 6 M & W 664 at 669 [151 ER 579 at 581] per Parke B cited in Nicholls v The Queen (2005) 219 CLR 196 at 266 [184] per Gummow and Callinan JJ; [2005] HCA 1. Crennan Bell is against the penal interest of the maker requires consideration of the fact that the maker intended to assert. LM's statement "I pushed him" was an admission against penal interest. It was an assertion that was consistent with both versions of events: that the appellant was the principal aggressor or that LM was the sole aggressor. Other assertions, including those which directly or indirectly conveyed that the appellant was not involved in any assault on the deceased before his fall, were not evidently against LM's penal interest. As explained in Bannon, the question to be asked is whether LM apprehended that it was to his prejudice to have made admissions implicating himself alone as opposed to having acted in concert with or having been assisted by the appellant17. There is no reason to suppose that he did. The appellant submitted that LM's acquittal was eloquent of the rejection of the prosecution case that he and LM were acting in concert. On this analysis, the issue was whether the appellant or LM was the aggressor. While the jury were not satisfied of LM's guilt, it was submitted that his admissions supported acceptance of the accounts given by Masonga, Asfer and Stuart and to this extent might have raised a doubt in the appellant's favour. The submission wrongly reasoned backwards from the verdicts. The Crown case was that the appellant and LM were acting in concert (or one was aiding and abetting the other) in assaulting the deceased. LM's admission to pushing the deceased was consistent with the Crown case and, if received in the appellant's trial, amounted to proof of an element in the case against him. One very important reason for the hearsay rule is the unfairness of depriving the party against whom the hearsay is tendered of the opportunity of cross-examining the maker18. In Bannon, Deane J contemplated circumstances in which the failure to admit the untested assertions of B at the instance of A might operate unfairly in the trial of A19. The examples that his Honour gave each concerned an unambiguous confession of sole guilt. The unfairness that his Honour identified was the conduct of A's trial "without regard to material which 17 Bannon v The Queen (1995) 185 CLR 1 at 27 per Dawson, Toohey and Gummow JJ citing Wigmore on Evidence, Chadbourn rev (1974), vol 5, §1462; see also at 38 per McHugh J. 18 Lee v The Queen (1998) 195 CLR 594 at 602 [32]; [1998] HCA 60; Cross on Evidence, 8th Aust ed (2010) at 1074 [31015]. 19 See above at [43]. Crennan Bell was, if reliable, inconsistent with ... guilt"20. The risk of unfairness of this description may be thought more evident in the second of the two examples, in which not only has B made an unambiguous confession of sole guilt, but it is apparent that only one of A and B committed the offence. Perhaps it should also be hypothesised that B's confession contains esoteric knowledge of the offence? Whether such a case could not be dealt with satisfactorily by an order for separate trials is not a question that need be addressed in this appeal. The concept of unfairness is concerned with A's right to a fair trial21. While the discretion to exclude admissible evidence if its reception would operate unfairly to the accused may be engaged for reasons other than unreliability22, the suggested discretion to admit otherwise inadmissible material is posited on the basis of the reliability of the confession of sole guilt23. The tender of a confession of sole guilt against the maker as probative of his or her guilt does not vouch for the reliability of all the assertions made in it. Among other considerations, B may have reasons for choosing not to implicate his confederate in his confession of guilt. In a case in which the Crown is in possession of credible evidence tending to establish the complicity of A in the commission of the offence for which B has admitted sole guilt there will ordinarily be no unfairness in the prosecution of A and B at a joint trial, nor in the tender of B's confession against B alone. The Crown did not rely upon the contents of LM's interview as reliable in its case against LM, save as to show that LM "had a hand in [the deceased] going through the window." The assertions in LM's interview did not provide 20 Bannon v The Queen (1995) 185 CLR 1 at 14. 21 Van der Meer v The Queen (1988) 62 ALJR 656 at 666 per Wilson, Dawson and Toohey JJ; 82 ALR 10 at 26; [1988] HCA 56; R v Swaffield (1998) 192 CLR 159 at 174 [18] per Brennan CJ, 189 [53]-[54] per Toohey, Gaudron and Gummow JJ; [1998] HCA 1. 22 R v Swaffield (1998) 192 CLR 159 at 197 [78] per Toohey, Gaudron and 23 Bannon v The Queen (1995) 185 CLR 1 at 14-15 per Deane J. Crennan Bell unambiguous support for the appellant's case24. There was no unfairness in the exclusion of those statements in the appellant's trial. The broad contention The appellant's broad contention was that developments since the decision in Bannon make it appropriate to now recognise an exception to the hearsay rule in the case of third party confessions. Three developments were relied upon. First, Tasmania and Victoria have now enacted legislation modelled on the Evidence Act 1995 (Cth) and the Evidence Act 1995 (NSW)25. The appellant submitted that LM's statements would be admissible under s 65(2)(b), (c) or (d) and s 65(8) of the Evidence Act 2008 (Vic)26. Secondly, third party confessions 24 Bannon v The Queen (1995) 185 CLR 1 at 16 per Deane J. 25 Evidence Act 2001 (Tas), Evidence Act 2008 (Vic). 26 Section 65 of the Evidence Act 2008 (Vic) relevantly provides: The hearsay rule does not apply to evidence of a previous representation that is given by a person who saw, heard or otherwise perceived the representation – the representation being made, was made when or shortly after the asserted fact occurred and in circumstances that make it unlikely that the representation is a fabrication; or was made in circumstances that make it highly probable that the representation is reliable; or was – against the interests of the person who made it at the time it was made; and (ii) made in circumstances that make it likely that the representation is reliable. (Footnote continues on next page) Crennan Bell in homicide cases are admitted in Queensland following the decision of the Court of Appeal of Queensland in R v Zullo27. On this analysis, there is now a clear majority of Australian jurisdictions in which third party confessions are admissible at the instance of the defence. Thirdly, in England, following the decision of the House of Lords in R v Myers28, legislative provision has been made for the admission of the confessional statements of co-accused29. In Bannon, McHugh J commented on the enactment of the Evidence Act 1995 (Cth) and comparable legislation in New South Wales, then the only jurisdictions to have adopted uniform Evidence Acts30. In circumstances in which other States might adopt some or all of the provisions of the Commonwealth Act, his Honour proposed that this Court adopt a cautious approach to the development of new exceptions to the hearsay rule31. While the uniform Evidence Acts preserve the rule against hearsay, the treatment of the rule and the exceptions to it differs in material respects from the common law. The hearsay rule does not apply to – evidence of a previous representation adduced by an accused if the evidence is given by a person who saw, heard or otherwise perceived the representation being made; or a document tendered as evidence by an accused so far as it contains a previous representation, or another representation to which it is reasonably necessary to refer in order to understand the representation." 27 [1993] 2 Qd R 572. 29 Section 76A(1) of the Police and Criminal Evidence Act 1984 (UK) provides that "[i]n any proceedings a confession made by an accused person may be given in evidence for another person charged in the same proceedings (a co-accused) in so far as it is relevant to any matter in issue in the proceedings and is not excluded by the court in pursuance of this section." 30 See fn 2 above. 31 Bannon v The Queen (1995) 185 CLR 1 at 41. Crennan Bell Whether LM's previous representations would meet the conditions of s 65(2)(b), (c) or (d) of the Evidence Act 2008 (Vic) need not be addressed. Section 65(8) provides a broad exception to the hearsay rule with respect to first hand hearsay adduced by a defendant in criminal proceedings. The only condition for the admission of evidence of a previous representation given by a person who saw, heard or otherwise perceived it being made when adduced by an accused is for the provision of reasonable notice32. If the appellant's broad contention were upheld, it would have no consequence for any new trial at which the admission of LM's statements (if he were unavailable to give evidence) would be governed by the Evidence Act 2008 (Vic). The consequence of upholding the broad contention would be to effect a significant alteration to the common law of evidence in those States which to date have chosen not to adopt the uniform Evidence Act or to modify the hearsay rule along the lines of the English legislation or otherwise. In circumstances in which the application of the hearsay rule in the appellant's trial did not occasion a miscarriage of justice, the invitation to effect that change should be rejected. Something should be said about the appellant's submissions respecting the Queensland line of authority. Zullo was decided before Bannon. At Zullo's trial for murder, evidence was admitted of a confession to the killing made by a man named Beard. The evidence of the confession was given by a police officer. Beard was not charged with any offence arising out of his confession33. He gave evidence at the trial and, when questioned about the confession, claimed privilege on the ground of self-incrimination34. Zullo appealed against his conviction for manslaughter to the Court of Appeal of Queensland on grounds including a suggested error in the trial judge's directions concerning the use that might be made of the confession. In dealing with this ground, the Court commented that there was "authority of some strength" in favour of the view that the evidence of Beard's confession was not admissible35. Nonetheless, the Court 32 Evidence Act 2008 (Vic), s 67. 33 K; Ex parte Attorney-General (Qld) (2002) 132 A Crim R 108 at 114 [17] per 34 R v Zullo [1993] 2 Qd R 572 at 573. 35 R v Zullo [1993] 2 Qd R 572 at 574 citing R v Blastland [1986] AC 41 at 52-53, Re Van Beelen (1974) 9 SASR 163 and Donnelly v United States 228 US 243 Crennan Bell said that the confession was to be considered by the jury "for what they thought it was worth"36. Although not necessary for the decision, there was discussion of Zullo in K; Ex parte Attorney-General (Qld)37. McPherson JA, who gave the leading judgment of the Queensland Court of Appeal in the latter, commented that Zullo was contrary to decisions in overseas jurisdictions and that the New South Wales Court of Criminal Appeal had declined to follow it. However, his Honour observed that Zullo was binding in Queensland until overruled. In R v Martin, the Court of Appeal of Queensland considered Zullo in the context of a submission that an accused's confession to a killing should be received in the trial of a co-accused38. McPherson JA noted that Bannon had not been drawn to the Court's attention in K; Ex parte Attorney-General (Qld). However, for reasons that were not explained, his Honour said that he was not persuaded that statements in Bannon were necessarily inconsistent with the line of authority in Queensland relating to the admission of hearsay confessions to a killing39. The success of the appeal of the accused Klinge in Martin did not turn on the admissibility of the confessional statements of the co-accused. There was no discussion of how the statements in Zullo might be reconciled with the law as it was subsequently stated in Bannon. The common law of evidence governs the admission of hearsay confessions in Queensland. To the extent that the appellant's submissions identified Queensland as an Australian jurisdiction in which hearsay confessions are admissible, the submission was misconceived. For these reasons, the appeal should be dismissed. 36 R v Zullo [1993] 2 Qd R 572 at 574. 37 (2002) 132 A Crim R 108 at 113-114 [17]. 38 (2002) 134 A Crim R 568. 39 (2002) 134 A Crim R 568 at 575 [21]. HEYDON J. In the Sussex Peerage Case, Lord Brougham stated40: "To say, if a man should confess a felony for which he would be liable to prosecution, that therefore, the instant the grave closes over him, all that was said by him is to be taken as evidence in every action and prosecution against another person, is one of the most monstrous and untenable propositions that can be advanced." The proposition to which Lord Brougham applied this soft impeachment was far less extreme than the proposition advocated by the appellant in this appeal. The appellant submitted that an out-of-court statement incriminating its declarant is admissible in an accused person's favour even when the declarant is alive, available, and sitting in the courtroom in which the out-of-court statement is tendered, but has simply chosen not to testify. Hitherto Australian courts, apart from the Supreme Court of Queensland, have held that that submission is not the law41. That position was challenged in Bannon v The Queen42, but this Court did not overturn it. The appellant now challenges Bannon v The Queen itself. The issues in this case arose out of an extensive fight which broke out during a large "warehouse party" at 3.00am. During that fight, a young man fell through a glass window. He died from the effects of the fall. The prosecution alleged that the appellant and a minor tried jointly with him, LM, caused the deceased's fall. The prosecution case was that the appellant and LM intended to cause the deceased really serious injury and that one or other or both of the accused pushed the deceased, causing his fall. The question in this appeal is whether hearsay statements made by LM which allegedly exculpated the appellant were admissible in his favour. 40 (1844) 11 Cl & F 85 at 111-112 [8 ER 1034 at 1045]. 41 See Re van Beelen (1974) 9 SASR 163 at 203-232; R v Martin (1983) 32 SASR 419 at 439; Wade v Gilroy (1986) 83 FLR 14 at 18-19 and 29; R v Greatorex (1994) 74 A Crim R 496 at 498 and 507-508; Robinson v The Queen (1996) 15 WAR 191 at 194-196; Question of Law Reserved (No 3 of 1997) (1998) 70 SASR 555 at 561-562, 568 and 573-574; Willis v The Queen (2001) 25 WAR 217 at 238 [122]; Button v The Queen (2002) 25 WAR 382 at 445-457 [203]-[239]; Etherton v Western Australia (2005) 30 WAR 65 at 92 [138]; Manufekai v The Queen (2006) 196 FLR 460 at 465-466 [24]; Brown v Western Australia (2011) 207 A Crim R 42 (1995) 185 CLR 1; [1995] HCA 27. Bannon v The Queen: summary Bannon v The Queen was heard by six Justices. Four judgments were delivered: one by Brennan CJ, one by Deane J, one by Dawson, Toohey and Gummow JJ, and one by McHugh J. Apart from some dicta of Deane J which are examined below43, their Honours did not support abandoning the common law position that the rule against hearsay prohibits receiving statements of one co-accused favourable to another co-accused and statements of third parties favourable to an accused. The appellant states the key question in this case as being whether the Court should now "recognize an exception to the rule against hearsay of the kind considered, but not decided, in Bannon v The Queen". That formulation compels reconsideration of the arguments which did not prevail in that case. The appellant in Bannon v The Queen advanced three arguments for the Court's consideration44. One was that the rule against hearsay should be applied flexibly. The second argument was that there was an exception to the rule against hearsay when an out-of-court statement by a person other than the accused was against that person's penal interest and that person is not available to testify. The third argument was that an out-of-court statement of that kind which was reliable should be admitted where its admission was reasonably necessary to prove a fact in issue. Each of the six Justices who heard Bannon v The Queen either denied that the law should be changed in this way or held that even if the common law could be appropriately modified, that modification would not assist the appellant in the circumstances of the case. It is convenient to deal in turn with each of these arguments, with a difficulty that emerged in the course of judgment in Bannon v The Queen, and with the dicta of Deane J. Finally, the arguments of the present appellant not raised in Bannon v The Queen will be examined. However, it is desirable first to deal with two preliminary points of a factual character. The appellant submitted that LM's out-of-court statements exculpated him. The appellant also submitted that those statements were reliable. Neither submission is correct. Did LM's statements exculpate the appellant? The appellant repeatedly submitted that the admissions of LM which the prosecution relied on tended to implicate LM and exculpate the appellant. Those 43 See below at [98]-[107]. 44 Bannon v The Queen (1995) 185 CLR 1 at 6-7 and 31. admissions fell into two groups. It is not correct to say that either group exculpated the appellant. The first group of statements allegedly exculpating the appellant comprised statements by LM to police officers during a formal interview. Those statements were to the effect that he had pushed the deceased. The problem for the appellant is that LM did not admit pushing the deceased out of the window. He said only that he assumed that that was the case. And he specifically denied two leading questions by a police officer suggesting that he had pushed the deceased out of the window. LM told the police officers that the deceased was one or two metres, or one and a half metres, from the window when he pushed him. LM claimed that he did not see the deceased go out of the window. LM's statements that he had pushed the deceased do not amount to evidence that he pushed the deceased out of the window. And they do not amount to evidence that the appellant did not push the deceased out of the window. In the police interview, LM said that he and the appellant had come to the party in LM's car. The appellant had driven. LM said that they left the party by the same means. They left together. The appellant and LM were dancing at the party when the fighting broke out. LM persistently refused to name his friends or describe their conduct. The trial judge treated LM's denials of recollection and refusal to name his friends with great scepticism. The second group of statements allegedly exculpating the appellant comprised statements by LM in the car in which he left the party. The appellant, LM and three others left in the car immediately after the deceased had fallen. Mr Asfer testified that LM had said to Mr Faulkner: "Look what you made me do". Mr Morgan testified that LM had said: "See what you've done" and "see what you've put us through". In cross-examination, Mr Morgan accepted that he had told the police that LM had said: "See what you've done, look what you've made me do." These rather vague statements may inculpate LM and Mr Faulkner. However, again, they do not exculpate the appellant. LM's statements were thus affected by the same weakness as that of the co-accused whose statement was considered in Bannon v The Queen. Professor C R Williams has analysed the appellant's position in that case as follows45: "The argument of the defence involved using the statement of the co-accused as implied hearsay. From the admission 'I killed the deceased' without reference to the accused, it was sought to infer that the co-accused was in substance saying 'I alone killed the deceased', which if the statement had been made, would have been direct hearsay. If a general 45 Williams, "Implied Assertions in Criminal Cases", (2006) 32 Monash University Law Review 47 at 62-63. rule against the admission of hearsay evidence is accepted, then the statement of the co-accused was correctly regarded as not admissible for the purpose of drawing such an inference. No issues of faulty perception or erroneous memory on the part of the co-accused arose. Possible issues of insincerity and ambiguity were however both present and significant. There are any number of reasons why a person who has committed a killing may choose not to implicate another participant in the offence. When considered for the purpose for which it was sought to be used, the statement was highly ambiguous; a statement 'I committed a killing' by no means necessarily means 'I alone committed a killing'." That reasoning is particularly apposite here. LM's statements that he pushed the deceased, taken in isolation, are not the same as LM saying: "I, and I alone, pushed the deceased." The contexts in which LM made those statements could of course suggest otherwise. But here those contexts, particularly the police interview, do not suggest otherwise. They are neutral or point in the opposite direction. In the police interview, LM was extremely keen to minimise the involvement of his friends in general and the appellant in particular. Yet he never explicitly said that the appellant had no involvement. In view of his manifest desire to protect the appellant, that is significant. It is not possible to infer from LM's statements that the appellant did not push the deceased. The statements by LM in the car were made in the presence of the appellant and three other people. At the time they were made, the appellant was driving the car. It is perhaps unlikely that LM would have intended to accuse the appellant in front of the others, especially while the appellant had control of the vehicle in which he was a passenger. In any event, nothing about the circumstances in which this group of statements were made suggests that LM was taking responsibility for the deceased's death to the exclusion of the appellant. The hearsay statements by LM do not exculpate the appellant. The factual substratum necessary for debate about creating a new hearsay exception for third party confessions favourable to the accused does not exist in this case. That conclusion alone is sufficient ground for dismissing the appeal. However, the appeal should also be dismissed on other grounds set out below. It is relevant to those grounds to consider a second preliminary point of a factual character – whether LM's statements were reliable. Were LM's statements reliable? The appellant submitted that LM's statements were reliable for four reasons. First, the prosecution relied on them as inculpatory of LM. This was significant because the burden on the prosecution to prove guilt beyond a reasonable doubt "tends to ensure a relatively high degree of reliability". Secondly, LM did not object to the admissibility of his own admissions. Thirdly, the first group of admissions were made to the police. Fourthly, the evidence of Messrs Asfer and Masonga that the blows were struck by LM corroborated that group of admissions. It is convenient to deal with these four reasons in turn. As to the first, it is true that the prosecution relied on the admissions. But it relied on them as inculpatory of LM only. The appellant's submission suggests that the burden of proof resting on the prosecution causes it always to call weighty evidence. It suggests that every piece of evidence that the prosecution relies on is valuable. It suggests that the prosecution vouches for or warrants the truth of each piece of evidence. These suggestions overlook the prosecution duty to call all available evidence. In R v Apostilides46, Gibbs CJ, Mason, Murphy, Wilson and Dawson JJ said: "A refusal to call [a] witness will be justified only by reference to the overriding interests of justice. Such occasions are likely to be rare. The unreliability of the evidence will only suffice where there are identifiable circumstances which clearly establish it; it will not be enough that the prosecutor merely has a suspicion about the unreliability of the evidence." It was for the jury to assess what caused the deceased's death, taking into account the hearsay evidence of LM as well as many other accounts of the evening. The conflicts between the testimony of prosecution witnesses did not mean that the prosecution was warranting one version or another as reliable. The second reason advanced for thinking that the hearsay evidence was reliable was that LM did not object to the admissibility of his own admissions. How could he? Police officers recorded the first group of admissions. They were made in circumstances not raising any possibility of objection on grounds of involuntariness. The circumstances did not raise any possibility of discretionary exclusion either. LM had consulted his solicitor. The interview took place in his father's presence. He received all necessary warnings about his rights. The second group of admissions were made in circumstances not raising any possibility of objection by LM. In any event, the fact that LM did not object does not of itself make his admissions reliable. The events he had participated in were confused and fast-moving. They had the capacity to affect the accuracy of perception. The third supposed reason why LM's evidence was reliable was that the admissions in the first group were made to police officers. It is true that the statements were made in a formal setting under police caution. That 46 (1984) 154 CLR 563 at 576; [1984] HCA 38. circumstance supports the conclusion that the admissions were made. It does not render reliable LM's powers of perception of the events he narrated, his recollection of those events or his expression of that recollection. It is a novel proposition that where the police are investigating a death, there is some special solemnity attaching to police interviews of witnesses. The fourth reason the appellant assigned for the reliability of LM's statements was that the testimony of Messrs Asfer and Masonga corroborated them. That takes no account of the fact that they were contradicted by the evidence of Mr Doig, Mr Arcaro and, to some extent, Mr Stuart. In any event, so far as reliability is relevant to the reception of LM's statements, it must be assessed independently of what other witnesses said. For all of those reasons, LM's statements were not reliable. Flexible application of the hearsay rule? It is now necessary to turn to the three arguments put in Bannon v The Queen on which the appellant relied. The first is that the hearsay rule should be relaxed in the case of highly or sufficiently reliable evidence47. In Bannon v The Queen, Brennan CJ attacked and rejected the proposed relaxation. Dawson, Toohey and Gummow JJ (and Deane J, who agreed with their Honours) did not address it. McHugh J did not find it necessary to deal with it. His Honour held that the evidence was not sufficiently reliable to satisfy the exception if it existed48. The grounds which Brennan CJ assigned for his Honour's conclusion are, with respect, convincing49. One of his Honour's points concerned the parties' inability to cross-examine the makers of out-of-court statements who do not give evidence. Another concerned the fact that neither the judge nor the jury would have seen the out-of-court statement being made or seen the declarant giving evidence. To these points may be added the following considerations. Suppose a witness, Mr W, testifies to a relevant event which he has himself observed. In those circumstances, the jury is invited to accept that Mr W did perceive the event, that he has remembered correctly what he perceived, that there is no ambiguity in his narration of the event to the court, and that he is sincere in his testimony. Sincerity may be promoted by the making of an oath or affirmation. Mr W's fear of criticism for false evidence, inside the court or outside it, and the prospect of prosecution for perjury may also promote truthfulness. But the principal guarantee and test of the witness's honesty and the 47 (1995) 185 CLR 1 at 7. 48 (1995) 185 CLR 1 at 33. 49 (1995) 185 CLR 1 at 7-8: see below at [94]. accuracy of his perception, memory and narration lie in his capacity to be cross- examined. At the end of the day, the jury must be satisfied both that the witness believes that the event took place, and that his belief is justified. It is obvious that any danger that the jury wrongly reaches, or fails to reach, that state of satisfaction is accentuated when what is offered to the court is not Mr W's account of what he saw, but his account of what another person, who does not testify – Mr Jones – saw. In that instance, the jury must be satisfied that Mr W believed he heard Mr Jones say that the event happened. It must be satisfied that Mr W's belief is justified. It must be satisfied that Mr Jones believed that the event happened. And it must be satisfied that Mr Jones's belief was justified. The jury must decide whether it is so satisfied without the safeguards which the ordinary conditions of testimony would have provided in relation to Mr Jones had he been called as a witness. It must decide without testing of Mr Jones's account in cross-examination. And it must decide despite the diminished value of these safeguards so far as Mr W is concerned. There is no direct link between Mr W's testimony and the conclusion that the jury is invited to reach as a result of it. The direct witness, who asserts that the event occurred, can be cross-examined much more fruitfully about his perception and memory of that event than the hearsay witness can be cross-examined. The direct witness claims personal experience of the event and can be cross-examined on that experience. The hearsay witness, who merely testifies that he heard the direct witness say "the event took place", can only be cross-examined about what he claims he heard the direct witness say. The direct witness is giving the "best" evidence50. The hearsay witness is not. There is a further danger in the introduction of a relaxed or flexible rule based on "reliability". In Pollitt v The Queen certain Justices in this Court employed the kind of thinking that the appellant advocated in this appeal to create a limited exception permitting parties to telephone conversations to be identified. The differences of opinion that emerged between those Justices Whatever the merits of a flexible application of the hearsay rule based on reliability, it would not be correct to indulge in that process here. LM did not directly exculpate the appellant. And the evidence concerning what LM said is not a very reliable guide to what he saw. 50 Teper v The Queen [1952] AC 480 at 486. 51 See Pollitt v The Queen (1992) 174 CLR 558 at 566-567, 595-596, 610-611 and 621-622; cf at 582-583 and 605; [1992] HCA 35. Statement against penal interest? The second argument advanced in Bannon v The Queen that the appellant relied on was that this Court should recognise an exception to the rule against hearsay for out-of-court statements by persons other than the accused where those statements are against the maker's penal interest and the maker is unavailable to testify. In Bannon v The Queen52, Brennan CJ pointed out that Holmes J (dissenting in Donnelly v United States53) and Wigmore54 had attacked the narrowness of the exception to the hearsay rule based on declarations against interest. That exception applied to proprietary and pecuniary interest only. Extending that exception to include declarations against penal interest would depend at least on the declarant's death, as the exception concerning declarations against proprietary or pecuniary interest does. An extension to that extent only would not assist in the present case: LM was not dead at the time of the appellant's trial. Brennan CJ observed that in Canada a hearsay exception developed as a result of these criticisms. It depends on satisfaction of at least two conditions. The first is that the declarant "should have apprehended a vulnerability to penal consequences as a result" of making the statement, which vulnerability was "not remote". The second is that the declarant be unavailable through death, insanity, grave illness or absence in a jurisdiction to which the processes of the court do not extend55. The first condition corresponds with an equivalent condition that applies to declarations against proprietary and pecuniary interest. In Ward v H S Pitt & Co Hamilton LJ, speaking for himself, Sir Herbert Cozens-Hardy MR and Buckley LJ, said56: "It is essential that the deceased should have known the fact [declared in his out-of-court statement] to be against his interest when he made [the statement], because it is on the guarantee of truth based on a man's conscious statement of a fact, 'even though it be to his own hindrance', that the whole theory of admissibility depends." 52 (1995) 185 CLR 1 at 8. 53 228 US 243 at 278 (1913). 54 Wigmore on Evidence, Chadbourn rev (1974), vol 5, §§1476-1477. 55 Bannon v The Queen (1995) 185 CLR 1 at 9, quoting R v O'Brien [1978] 1 SCR 56 [1913] 2 KB 130 at 137-138, citing Sturla v Freccia (1880) 5 App Cas 623 at 633 and Tucker v Oldbury Urban Council [1912] 2 KB 317 at 321. Even if the powerful objections that Brennan CJ stated to extending the law in this way were put aside57, it would be futile to create the exception in this case. LM did not meet any of the conditions of unavailability. And, at least in respect of the second group of statements, the "apprehended vulnerability to non- remote penal consequences" condition was not met either. Hence adopting this proposed exception would not benefit the appellant. In Bannon v The Queen, Dawson, Toohey and Gummow JJ (Deane J concurring) did not decide on the correctness of the second postulated exception. Their Honours did not need to decide because they held that the declarant in that case did not appreciate that what she narrated was to her prejudice58. McHugh J took the same course59. In this appeal, the appellant submitted that the Canadian requirements for the reception of third party or co-accused confessions, such as "reliability" and "corroboration", were satisfied here. For the reasons given above60, that is not so. Necessity and reliability? The third argument from Bannon v The Queen that the appellant advocated was that there exists a hearsay exception for statements exculpatory of an accused where those statements are both reliable and reasonably necessary to prove a fact in issue. Brennan CJ rejected this submission in Bannon v The Queen61. His Honour did so on the ground that this third proposed exception is fundamentally inconsistent with Australian authority. Dawson, Toohey and Gummow JJ (Deane J concurring) did not deal specifically with this third proposed exception. McHugh J criticised it, but held that it was unnecessary to decide whether it should be adopted in Australia. That was because the evidence did not satisfy the reliability threshold62. Even if the exception existed, which it is unnecessary to decide, LM's statements would not satisfy its terms. They do not exculpate the appellant. Even if they did, they are not reliable. And they were not necessary to prove that 57 Bannon v The Queen (1995) 185 CLR 1 at 9-10. 58 (1995) 185 CLR 1 at 27-28. 59 (1995) 185 CLR 1 at 38. 60 See above at [77]-[82]. 61 (1995) 185 CLR 1 at 10-12. 62 (1995) 185 CLR 1 at 40-41. fact in issue. The relevant fact, that LM alone pushed the deceased, could have been proved by the appellant deciding to enter the witness box and testifying to that effect. The inculpation of the accused In the concluding paragraph of his reasons for judgment in Bannon v The Queen, Brennan CJ observed that "counsel for the appellant did not submit that any exception to the hearsay rule should admit evidence inculpatory of an accused person."63 It is plain that Brennan CJ thought that any new hearsay exception admitting evidence inculpatory of an accused person was undesirable. That is because, in rejecting the "flexible application" exception, his Honour had said64: "To admit hearsay evidence whenever the judge forms the opinion that the evidence is sufficiently reliable would be to transform the nature of a criminal trial. If the judge's opinion be based on no specific criteria but only on an appreciation of the circumstances generally, the judge would have to exercise a lively discretion to exclude evidence that the judge thought to be reliable in order to prevent undue prejudice to the accused who could not cross-examine the maker of the out-of-court statement." McHugh J noted that non-inculpation of the accused was a requirement in Canadian law65. In the concluding paragraph of his reasons for judgment in Bannon v The Queen, Brennan CJ also said the out-of-court statements of the co-accused, Kerry Calder, "in so far as they inculpated herself were likely to be understood by the jury as inculpatory of the appellant as an aider and abettor."66 On Brennan CJ's approach, that made them inadmissible. Hence, said Brennan CJ67: "It follows that, on any view of the scope of an exception to the hearsay rule as contended for, the appellant cannot succeed. If Calder's statements were understood to be exculpatory of the appellant in the sense that the 63 (1995) 185 CLR 1 at 12. 64 (1995) 185 CLR 1 at 7. 65 (1995) 185 CLR 1 at 35. 66 (1995) 185 CLR 1 at 12. 67 (1995) 185 CLR 1 at 12. appellant was not a party to Calder's offence, Calder's statements can hardly be taken to be reliable as to that fact. That fact is not asserted and the circumstances in which the statements were made give no assurance that Calder was adverting to the appellant's involvement in the murders." These passages are germane in this appeal too. Here, too, counsel for the appellant did not submit that any new exception to the hearsay rule should admit evidence inculpatory of an accused person. Here, too, LM's statements to the police officers were likely to be understood as inculpatory of the appellant as an aider and abettor. That is so because the prosecution case at the joint trial of the appellant and LM was put on an alternative basis: either they acted in concert, or each aided and abetted the other. If LM's statements were admitted not only against LM, but in favour of the appellant, it was open to the jury to infer, given LM's statement that the appellant was present, that LM's reluctance to speak fully about the appellant's role68 was attributable to the fact that they had acted in concert or aided and abetted each other. Finally, like Kerry Calder's statements in Bannon v The Queen, if LM's statements were understood to be exculpatory of the appellant, they were not reliable in that respect. If out-of-court confessions of crime are admissible in favour of the accused, why are they not admissible against the accused? The difficulties which their admissibility against the accused would present suggest that they should not be admitted either against or in favour of accused persons. Deane J's dicta in Bannon v The Queen The appellant relied on several passages in Deane J's reasons in Bannon v The Queen. The appellant stressed three in particular. The first appears after his Honour set out certain examples not comparable to the present facts69: "The point of the examples is simply to demonstrate that, in circumstances where the Crown has seen fit to proceed against two accused persons jointly and to lead particular evidence on the joint trial against one only of them, a situation can arguably arise in which ordinary considerations of fairness would be affronted and the administration of criminal justice mocked if the other accused were precluded from relying upon that evidence if it supported his or her innocence or raised a doubt about his or her guilt." 68 See above at [71]. 69 (1995) 185 CLR 1 at 14. By "doubt" his Honour meant "reasonable doubt". That characterisation is supported by a later passage in Deane J's reasons on which the appellant also relied70: "The central prescript of our criminal law is that no person should be convicted of a crime unless his or her guilt is established beyond reasonable doubt after a fair trial according to law. The specific content of the requirement of a fair trial may vary with changing circumstances, including contemporary standards and perceptions. When it appears that judge-made rules of evidence or procedure conflict, or are liable to conflict, with the basic requirements of fairness, it is a function of a final appellate court … to address the question whether those rules should be altered or adjusted to avoid such conflict." (footnote omitted) The third passage on which the appellant relied was71: "it appears to me to be strongly arguable that the basic requirement of fairness dictates that, in circumstances where the Crown has seen fit to bring a person (the first accused) to a joint trial with another accused and to place before the jury material which is tendered only against that other accused but which is supportive of the innocence of the first accused, the trial judge have a discretion to direct that that material, even though otherwise inadmissible in the trial of the first accused, be evidence in that trial at the instance of the first accused if, in all the circumstances of the case, the trial judge considers that fairness to the first accused and the interests of the administration of justice support the conclusion that such a direction be given." Deane J made it plain that he was not asserting these views as concluded statements of the law, but as suggestions only. The appellant's submissions about them are expressed subject to that caveat. The appellant submitted that "Deane J's suggested exception" was sound in principle. But what is the suggested exception? If it corresponds with the final passage quoted, LM's statements do not support the appellant's innocence or raise a reasonable doubt about his guilt. The appellant referred to Parke B's aphorism: "what a party himself admits to be true, may reasonably be presumed to be so."72 Parke B's aphorism justifies the reception of admissions which the maker was aware were against 70 (1995) 185 CLR 1 at 15. 71 (1995) 185 CLR 1 at 15. 72 Slatterie v Pooley (1840) 6 M & W 664 at 669 [151 ER 579 at 581]. interest. But it cannot justify the reception of all admissions. The reception of admissions, unlike the reception of declarations against proprietary or pecuniary interest, does not depend on the maker's awareness that they are against interest at the time they are made. Some admissions are received even though their makers thought them to be in their interests at the time they were made. E M Morgan has advanced a sounder justification for the reception of admissions73: "The exclusionary rules of evidence and the procedure for enforcing them are not designed to be automatic eliminators of untrustworthy testimony; in the main they rather provide a privilege of protection against such testimony to the party against whom it is offered. A litigant can scarcely complain if the court refuses to take seriously his allegation that his extra- judicial statements are so little worthy of credence that the trier of fact should not even consider them. He can hardly be heard to object that he was not under oath or that he had no opportunity to cross-examine himself." However that may be, on the strength of Parke B's aphorism, the appellant then made a submission assuming that a confession by B implicating himself and exculpating A was necessarily a reliable confession. The submission also assumed that LM's admissions implicated him and exculpated the appellant. The submission was: "The same rationale dictates that LM's admission that he pushed the deceased and caused him to fall, in circumstances where there are competing versions as to which of the two accused pushed the deceased, and the appellant disputes that he did so, may reasonably be presumed to be (or possibly be) a true statement that the appellant did not push the deceased." It may be accepted that LM's admission that he pushed the deceased could reasonably be presumed to be true. But LM did not say that the appellant did not push the deceased74. Deane J's statements in Bannon v The Queen depend on a consideration stated fairly early in his reasons for judgment. That consideration is that the hearsay statement be one in which the maker "unambiguously admits that, alone and without assistance", he or she committed the crime 75. That is not true of LM's statements. 73 "The Rationale of Vicarious Admissions", (1929) 42 Harvard Law Review 461 at 74 See above at [71]-[72]. 75 (1995) 185 CLR 1 at 14. What if it were true of LM's statements? It is convenient to examine what force the argument has. There is a conceptual difficulty in it. On the strength of an approach similar to Parke B's, many confessions and admissions have weight because it is assumed that their makers would not invent their involvement in criminal conduct. But it does not follow from that reasonable assumption that those makers would not lie about the involvement of persons other than themselves. On the one hand, it is a commonplace that one accomplice may falsely exaggerate the guilty role of others76. On the other hand, it is possible that an accused person may falsely diminish the guilty role of others – whether out of affection for those others, or out of fear of future retribution. It does not follow from the putative reliability of self-inculpation that the exculpation of others is reliable. Indeed, the view that exculpations of others in these circumstances are reliable is not supported by experience. Another conceptual difficulty in Deane J's appeal to fairness is this. If an admission is made, the tendering party must accept that what is to be received in evidence comprises not only the parts adverse to the opposing party, but also "everything … which is fairly connected with that admission"77. That is so even if that which is fairly connected is adverse to the tendering party. That is, the party against whom the evidence is tendered must suffer the adverse consequences of the admission, but may take advantage of everything fairly connected with it that is favourable to that party. The appellant's submission seeks to apply this advantage not only to the party against whom the admission is tendered but to a party against whom the admission is not tendered. The prosecution tendered LM's statements against LM. They were not tendered against the appellant and were not admissible against the appellant. In the result, the proposed extension based on "fairness" is anything but fair. "Fairness" applies to all parties to litigation. It must involve parity and reciprocity. It cannot be limited to the defence. At common law, instances in which the rules of evidence differ as between prosecution and defence are rare, apart from the burden and standard of proof. Suppose B makes an inculpatory statement exculpating A. If the prosecution's tender of the confession against B is said, because of its reliability, to make it "fair" to receive the exculpatory evidence in favour of A, why is the reverse not "fair"? That is, why is it not "fair" for the prosecution to rely, against A, on a reliable confession by B inculpating A? For the reasons given above, it is unfair 76 R v Farler (1837) 8 C & P 106 at 108 [173 ER 418 at 419]. 77 Lyell v Kennedy (1884) 27 Ch D 1 at 15 per Cotton LJ. to take the latter course78. And if that is unfair, it must be equally unfair to use B's confession to exculpate A. Deane J's suggested exception creates a further unfairness. That unfairness is perhaps only transitory, but it has real effects. The police officers who conducted the interview of LM probably thought that the answers LM gave would be admissible evidence against him, but no-one else. They probed LM about what he did. They did not probe LM about what others did. Making a retrospective change to the common law rule, as the appellant suggests this Court should do, would operate unfairly to the prosecution. It would permit LM's evidence to suggest the appellant's innocence in circumstances where the police officers investigating the deceased's death did not, and the prosecution at the trial could not, examine that possibility by questioning. There may be cases where unfairness arises because the prosecution tenders an out-of-court statement by one co-accused that points to the innocence of another. But in those cases the solution may not lie in the rules of evidence. It might be more appropriate to grant a separate trial or to turn to doctrines of abuse of process to cure the unfairness. The risk of perjury It is common now to downplay the risk of manufactured evidence as a reason for not widening admissibility. But it is a real danger in cases such as the present case. In Re van Beelen, Walters, Wells and Jacobs JJ used the following words, plainly written by Wells J, to describe it79: "The mere knowledge that an extra-judicial confession of crime could, in favourable circumstances, be received to exculpate an alleged offender, would, however, be likely, in our opinion, to tempt the less scrupulous members of our community to undertake clandestine operations of self-help. All that would be required by a guilty accused person would be the services of two or three accomplices and a person, known to all, who had died after the date of the alleged offence and who, theoretically, could have committed it. The accomplices, when called as witnesses, could then simply attribute a 'confession' to the deceased man, and the confession could be given artistic verisimilitude by inserting in it evidence of esoteric knowledge that had, in fact, come from the best of all sources – the offender. If there were not at hand a deceased person into whose mouth the confession could conveniently be put, the unavailability of a living person could, no doubt, be arranged by any one of a number of 78 See above at [103]-[104]. 79 (1974) 9 SASR 163 at 205. irregular methods – direct or indirect. Where serious crime was alleged, the motive for making such arrangements would be strong. If answer be made that the foregoing observations are, mutatis mutandis, equally applicable to the alibi, evidence of which is not excluded, the reply may be offered that the alibi is at least closely and naturally associated with the accused himself and his connection with the case against and for him; it is usually susceptible of being tested and assessed with the aid of, and against, the case as a whole. The extra- judicial confession of a stranger who does not appear in the witness box, however, has the merit, from a guilty accused's point of view, that the circumstances of its making would, more often than not, be largely beyond the natural purview of the principal case on which issue had been joined, and would be likely to raise questions that, except for the connection of the text of the confession with the corpus delicti, related to facts and events not likely to be canvassed by the main body of evidence. Perjurious or lying defences would thus become dangerously easy to fabricate, and correspondingly difficult to expose." Simpson J described that danger as "obvious" in R v Greatorex80. In Bannon v The Queen, Brennan CJ said that if the common law were changed, "false confessions untested by cross-examination would bedevil criminal trials" and "[g]aol-house confessions allegedly made by prisoners who would decline to admit guilt testimonially would be a commonplace."81 The circumstances those remarks contemplate differ from those in this appeal. But the appellant did not attempt to deal with the risk of fabricated confessions that an exception to the hearsay rule might create. He tried to construct a rule limited to the particular circumstances of this appeal. However, any evidentiary rule which would benefit the appellant in this appeal would have to be structured so as to operate more widely as well. Australian authority The appellant acknowledged that most intermediate appellate courts in this country had not gone beyond the principles elucidated in Bannon v The Queen. But he submitted that the opposite was true in Queensland. Like the mother watching her son in the parade, the appellant submitted that Queensland was the only one in step, and that the common law in the other jurisdictions should be made to conform with Queensland. 80 (1994) 74 A Crim R 496 at 508. 81 (1995) 185 CLR 1 at 9. The first of the Queensland cases is R v Zullo. It preceded Bannon v The Queen. The case concerned a hearsay statement by a person not charged with a killing that he was the killer. That person gave a different version when interviewed by police officers. He said that it was the accused and not he who was responsible. At the trial, he successfully claimed the privilege against self- incrimination in relation to his incriminating statement. The prosecution tendered the hearsay statement82. The judge directed the jury83: "Before an out of Court confession by some other person would result in an acquittal of an accused, you would have to be satisfied that it had such substance, after scrutinising all the evidence relevant to it carefully, that you had a reasonable doubt as to the accused's guilt. If after scrutinising all the evidence relevant to that confession you reached the conclusion that there is no substance in it, or that it was not truthful, then you may conclude that nothing relating to that evidence causes you to have a reasonable doubt as to the accused's guilt." On appeal, the accused claimed that this was a misdirection. The Court of Appeal noted that there was "authority of some strength" against the admissibility of the evidence84. But it treated the evidence as admissible. No reasons were given beyond reliance on Holmes J's dissenting judgment in Donnelly v United States85. The Court of Appeal said86: "The confession … was … to be considered by the jury for what they thought it was worth, and may very well have inclined the jury towards a 'not guilty' verdict, even if they were by no means convinced that it was truthful." Their Honours also agreed that there had been a misdirection87: 82 See R v K; Ex parte Attorney-General (Qld), where it was observed that the maker of the third party confession did not give evidence in either of Zullo's trials: (2002) 132 A Crim R 108 at 114 [17]. 83 [1993] 2 Qd R 572 at 573-574. 84 [1993] 2 Qd R 572 at 574. 85 228 US 243 at 278 (1913). 86 [1993] 2 Qd R 572 at 574. 87 [1993] 2 Qd R 572 at 574. "If the jury were inclined to suspect that the … confession was spurious, that would not necessarily have been a justification for ignoring it when coming to their final conclusion." But how can an out-of-court confession raise a reasonable doubt if the jury does not believe its truth? The Court of Appeal's assumption that the third party confession was admissible was obiter only. It was inconsistent with the Australian common law as received from England88. Leaving aside short-run disagreements, there is but one Australian common law89. Whether or not the common law rule in question – the hearsay rule – was of a kind which an intermediate appellate court ought to have departed from is a controversy which can be put to one side90. In R v K; Ex parte Attorney-General (Qld), the Court of Appeal followed R v Zullo as a case which "remains binding in Queensland."91 Whether it was right to do this, or whether it should not have been followed because it was only an obiter assumption inconsistent with the leading common law cases, is another controversy which may be put to one side. In R v K, the Court of Appeal's attention was not drawn to Bannon v The Queen, notwithstanding that it had been decided more than six years earlier. However, when R v Martin was decided a few months later, Bannon v The Queen was drawn to the Queensland Court of Appeal's attention. The Court of Appeal held that the "Queensland line of authority" remained binding in Queensland until this Court overruled it. In its view, what this Court said in Bannon v The Queen was not necessarily inconsistent with the Queensland cases92. The Court of Appeal did not explain this alleged congruity. In truth, Bannon v The Queen is inconsistent with the Queensland cases. Though no majority of this Court decided unequivocally against any future departure from the traditional law, their Honours made it plain that the law as it then stood contained no exception to the hearsay rule in favour of accused persons for 88 Sussex Peerage Case (1844) 11 Cl & F 85 at 111-114 [8 ER 1034 at 1044-1046]. 89 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 563; [1997] HCA 25. 90 Cf Myers v Director of Public Prosecutions [1965] AC 1001 at 1021-1022. 91 (2002) 132 A Crim R 108 at 114 [17]. 92 R v Martin (2002) 134 A Crim R 568 at 575 [21]. confessions made by a co-accused or a third party93. The Queensland cases reveal no basis on which they should be preferred. They should be overruled. Impact of legislative developments The appellant submitted that legislation largely corresponding with the Evidence Act 1995 (Cth) ("the Evidence Act") now existed in New South Wales, Tasmania and Victoria, and that the Northern Territory was preparing to follow suit. The Australian Capital Territory, formerly governed in large part by the Evidence Act, now also has its own legislation in very similar form. The appellant submitted that there is now a "consistent pattern of legislative policy to which the common law of Australia can adapt itself." The appellant took the quoted words from Esso Australia Resources Ltd v Federal Commissioner of Taxation94. They appear in the discussion by Gleeson CJ, Gaudron and Gummow JJ of the questions whether and how the courts should use legislative developments as a guide for changing the common law. Those are large and significant questions. Gleeson CJ, Gaudron and Gummow JJ95 quoted a passage from Lord Diplock's judgment in Warnink v J Townend & Sons (Hull) Ltd96: "Where over a period of years there can be discerned a steady trend in legislation which reflects the view of successive Parliaments as to what the public interest demands in a particular field of law, development of the common law in that part of the same field which has been left to it ought to proceed upon a parallel rather than a diverging course." Their Honours then pointed out that Lord Diplock was speaking in the context of a nation which at the time had only one Parliament. Australia is a federation with nine Parliaments. It can be difficult to detect a "steady trend" or a "consistent pattern" in the conduct of State and Territory legislatures. Often they seek to maintain, so far as ss 109 and 122 of the Constitution will let them, a sturdy independence. Queensland, South Australia and Western Australia have not adopted the Evidence Act. Those polities are very large in area. More importantly, they are quite large in population. Their legislatures are entitled to arrange their court processes along lines which they perceive to be desirable. In Bannon v The Queen, McHugh J observed that to change the Australian common 93 For example, Bannon v The Queen (1995) 185 CLR 1 at 22. 94 (1999) 201 CLR 49 at 62 [23]; [1999] HCA 67. 95 (1999) 201 CLR 49 at 62 [24]. 96 [1979] AC 731 at 743. law by changing the common law of Victoria was not a course which should lightly be taken. Writing in 1995, just after the enactment of the Evidence Act, he said97: "The recent legislative activity in this field provides a sound reason for this Court proceeding cautiously when invited to alter the settled rule against hearsay evidence. If any change is to come about as the result of judicial law-making, it should only occur after the Court has had the benefit of full argument from counsel representing the States and the Commonwealth." This Court heard no argument in this appeal from any counsel within this category except counsel for the respondent. The appellant's submission that the common law should adapt itself to the Evidence Act raises the question – which part of it? The appellant mentioned s 65(1), (2)(b), (c) or (d) and (8)98. Those provisions permit the reception of "representations". The appellant submits that LM made a "representation" exculpating the appellant. That submission is factually incorrect99. And so far as the provisions of s 65(2)(b)-(d) require non-fabrication or reliability, the requirements are not satisfied100. Another difficulty is that the Evidence Act is, if not a completely integrated and exhaustive code, at least based on a carefully thought out scheme. Its parts are interdependent to some degree. Any adaptation of the common law to conform to the Evidence Act must be workable. To ensure this, it may be necessary to recognise many more provisions as forming part of the common law than those to which the appellant referred – for example, many definitions in the legislation, and the s 67(1) procedural duties to give notice. It would not be easy to decide how far this recognition should go. A further difficulty is that minds may well differ on the desirability of importing the Evidence Act into the common law. Tests for admissibility that turn on questions of "fabrication" and "reliability" are alien to common law approaches. In Vocisano v Vocisano101, Barwick CJ said that "statements made 97 (1995) 185 CLR 1 at 41. 98 See above at [54]. 99 See above at [70]-[76]. 100 See above at [77]-[82]. 101 (1974) 130 CLR 267 at 273; [1974] HCA 14. on an occasion when they are unlikely to be concocted are [not] for that reason admissible." In Pollitt v The Queen, Brennan J said102: "[I]t is not desirable to subsume the res gestae principle under a general principle which would admit hearsay evidence when a trial judge believes that concoction was extremely unlikely". And in Bannon v The Queen, Brennan CJ said the following position would apply if like requirements were imported into the common law103: "Admissibility would reflect no more than the judge's opinion of the fairness of exposing the accused to the risk of conviction on the hearsay evidence. That is not an appropriate power to vest in a trial judge who has not heard the declarant making the statement and ordinarily would not have seen the declarant. It is one thing for a trial judge to rule on the fairness of admitting an accused's confession when the accused was, ex hypothesi, the actor in the relevant events and is able to contest, by cross-examination and by testimony, the case advanced against him that is based on the confession; it is another thing to rule on the fairness of admitting the statement of another declarant when the accused was not involved in the making of the statement and is unable effectively to contest the case based on the statement." (footnote omitted) The provisions of s 65(2)(b)-(d) are characterised by more safeguards than the regime Brennan CJ attacked. Nonetheless, those regimes share significant common ground. Sections 135 and 137 of the Evidence Act deal with the exclusion of evidence where its probative value is outweighed by the risk of prejudice to the accused. Further, s 65(8) of the Evidence Act undercuts the safeguards in s 65(2). And the applicability of s 65(8) to the present circumstances is unclear. It applies where the defence tenders evidence. Here the prosecution tendered it. The processes by which the common law might "adapt itself" to the Evidence Act are thus neither manifestly desirable nor simple. The judgments the Act makes and the techniques it adopts cannot be incorporated into the common law without a violent act of legislation, this time judicial. 102 (1992) 174 CLR 558 at 582. 103 (1995) 185 CLR 1 at 7-8. English developments Finally, the appellant relied on the fact that in England a confession by one co-accused is admissible in favour of another co-accused. This was the result of legislative change104. The difficulties of adapting the common law of Australia to meet a foreign legislative change are even greater than adapting it to meet an Australian legislative change. The English legislation was enacted after the decision in R v Myers105. In general, that case favours the appellant's position. Evidently, the legislature thought the decision to be unsatisfactory. R v Myers was an appeal by the accused against the reception of her own out-of-court statements. Those statements were tendered by her co-accused. R v Myers thus did not raise the issue in the present case. Indeed, in numerous respects it is factually distinguishable from the present case. And as Lord Hope of Craighead pointed out, the certified question did "not … sufficiently analyse the issues"106. The appellant made only two passing references to R v Myers. He took the Court to no part of what their Lordships said. The appellant did not demonstrate, or seek to demonstrate, its suitability as a precedent to be followed in Australia. Conclusion The present common law in relation to hearsay exceptions should not be changed in the respects the appellant advocated. LM's evidence was not admissible in the appellant's favour. The trial judge's direction was correct. The appeal should be dismissed. 104 Police and Criminal Evidence Act 1984 (UK), s 76A(1). 106 R v Myers [1998] AC 124 at 146.

HIGH COURT OF AUSTRALIA COMMONWEALTH BANK OF AUSTRALIA APPELLANT AND RESPONDENT Commonwealth Bank of Australia v Barker [2014] HCA 32 10 September 2014 ORDER Appeal allowed. Set aside paragraphs 1 (save as to costs) and 2 of the order of the Full Court of the Federal Court of Australia made on 6 August 2013 and, in their place, order that: the appeal be allowed; and paragraphs 1 and 2 of the order of the Federal Court of Australia made on 3 September 2012 be set aside and, in lieu thereof, order that: judgment be entered for the applicant against the respondent in the sum of $11,692.31; and the respondent pay the applicant interest in an amount to be determined by a judge of the Federal Court of Australia if not otherwise agreed. Appellant to pay the respondent's costs of the appeal and of the application for special leave to appeal. On appeal from the Federal Court of Australia Representation B W Walker SC with C D Bleby SC for the appellant (instructed by Minter Ellison Lawyers) R C Kenzie QC with P A Heywood-Smith QC, S J Mitchell and M A Irving for the respondent (instructed by Pace Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Commonwealth Bank of Australia v Barker Contract – Employment contract – Implied terms – Employee's position made redundant – Employer's conduct denied employee opportunity of redeployment – Whether term of mutual trust and confidence should be implied by law in employment contracts. Words and phrases – "duty of cooperation", "employment contract", "employment relationship", "necessity", "relational contract", "term of mutual trust and confidence", "terms implied by law", "terms implied in fact". FRENCH CJ, BELL AND KEANE JJ. Introduction The employment relationship, in Australia, operates within a legal framework defined by statute and by common law principles, informing the construction and content of the contract of employment. This appeal raises the question whether, under the common law of Australia, there is a term of mutual trust and confidence to be implied by law in all employment contracts. For the reasons that follow, that implication is a step beyond the legitimate law-making function of the courts. It should not be taken. This appeal, against a decision of the Full Court of the Federal Court of Australia1, which made the implication, should be allowed. Factual history The respondent, Mr Stephen Barker, commenced employment with the appellant, the Commonwealth Bank of Australia ("the Bank"), in November 1981. He continued with the Bank until his employment was terminated by reason of redundancy on 9 April 2009. At the time of his dismissal, Mr Barker occupied the position of Executive Manager Adelaide Corporate Banking, Institutional and Business Services, South Australia. His employment at the time was governed by a written agreement ("the Agreement"), which came into effect on and from 1 July 20042. Clause 6 of the Agreement provided for termination at any time by written agreement between the parties or, except in circumstances of misconduct, by four weeks' written notice by either party (or by the Bank paying four weeks' salary in lieu of notice). Clause 8 provided for compensation payable on termination in the event that the employee's position became redundant and the employee could not be redeployed: "This Clause applies only where the Employee was already employed by the Bank immediately preceding the date of this Agreement. In the case where the position occupied by the Employee becomes redundant and the Bank is unable to place the Employee in an alternative position with the 1 Commonwealth Bank of Australia v Barker (2013) 214 FCR 450. 2 This appeal turned upon the Agreement. No question of the content of any anterior contract was raised — cf Concut Pty Ltd v Worrell (2000) 75 ALJR 312; 176 ALR 693; [2000] HCA 64; Federal Commissioner of Taxation v Sara Lee Household & Body Care (Australia) Pty Ltd (2000) 201 CLR 520; [2000] HCA 35. Bell Bank or one of its related bodies, in keeping with the Employee's skills and experience, the compensation payment for the Employee will be calculated on the basis of the greater of — the amount of $107815.67 (in addition to payments made under Clause 15); or an amount equivalent to 0.25 times Base Remuneration as set out in the Annexure. Clause 7 does not apply in any case where a payment is made under this Clause."3 This appeal is concerned with the Agreement. There is a distinction, relevant in cases of wrongful dismissal, between the employment relationship and the contract of employment, such that the contract may persist when the relationship is at an end4. That distinction is not relevant in the present case, which is concerned with the contractual question of the existence of an implied term in law. In February 2009, the Bank decided to make Mr Barker's position redundant as part of a nationwide restructuring of the Corporate Financial Services ("CFS") teams within the Bank. On 2 March 2009, Mr Joe Formichella, the General Manager of CFS South Australia/Northern Territory, and Mr Glen Davis, the Bank's Executive Manager — Strategic Human Resources, so informed Mr Barker. They told him that the decision was not related to his performance, but that if he was not redeployed within the Bank, which was the Bank's preference, his employment would be terminated approximately four weeks thereafter. He was required to work out the day, clear out his desk, hand in the keys and the mobile phone which the Bank had issued to him and not return to work. His access to his Bank email account, voicemail and the intranet was terminated. Mr Davis sent an email to Mr Barker's Bank email address on 20 March 2009 urging him to take steps, in conjunction with Ms Helen Breccia in the Career Support team, to seek out redeployment opportunities. In the event that a 3 Clause 15 provided for payment upon termination in lieu of accrued annual and long service leave. Clause 7 provided for additional compensation where the Bank terminated employment other than for misconduct or unsatisfactory performance. 4 Visscher v Giudice (2009) 239 CLR 361 at 379–381 [53]–[55] per Heydon, Crennan, Kiefel and Bell JJ; [2009] HCA 34. Bell redeployment opportunity could not be found and the decision was made to retrench him, his effective exit day would be 30 March 2009. Mr Barker, having been deprived of access to his Bank email address, did not see that message until it was received at his personal email address on or about 23 March 2009. On 26 March 2009, Mr Barker received an email from Ms Breccia advising that she had been trying to contact him for several weeks with respect to redeployment support. She included a position description for the position of "Executive Manager — Service Excellence", one for each region of CFS, which was to be circulated within the Bank the following day. Until advised by Mr Barker's solicitor that he had had no access to his Bank email account or voicemail since 2 March, Ms Breccia seemed to be unaware of that fact. She did not speak to Mr Barker at any time during the redeployment period. Ms Jade Baines, who was a recruitment consultant for CFS at the time, was involved in facilitating the recruitment process. At no time did she communicate with Mr Barker. It was only on receiving Ms Breccia's email of 26 March 2009 that Mr Barker became aware of the Service Excellence position. The possibility of retraining for the role was never discussed with him. In any event, it was unlikely that an application by him would have been successful. Mr Formichella did not consider him suitable for the position. On 7 April 2009, the Bank wrote to Mr Barker's solicitor advising her that his exit date had been extended to 9 April "to give him every chance to participate in the redeployment process." On 9 April, the Bank wrote to Mr Barker advising him that his employment "will be terminated by reason of redundancy effective from the close of business today." His retrenchment payments amounted to $182,092.16. They were calculated on the basis that he had received four weeks' notice of termination of his employment and "one extra week's notice due to [his] being over the age of 45." The proceedings in the Federal Court Mr Barker commenced proceedings against the Bank in the Federal Court on 17 November 2010. He alleged that the terms of the Agreement incorporated the Bank's "Redundancy, Redeployment, Retrenchment and Outplacement Policy" ("the Redeployment Policy") and its Equal Employment Opportunity Policy ("the EEO Policy"). He also alleged in par 14 of his amended statement of claim that: "The following further terms were implied into the Contract to give the same business efficacy and arising from the mutual intentions of the parties namely that: Bell 14.1. The Bank would maintain trust and confidence with the Applicant; and 14.2. The Bank would not do anything likely to destroy or seriously damage the relationship of trust and confidence without proper cause for so doing." Under the heading "Breach of Implied Terms", Mr Barker claimed that the Bank had failed to conduct the termination or redundancy process in a bona fide and/or proper manner, thereby breaching, inter alia, the Redeployment Policy and the EEO Policy, and, on that account, breaching the Agreement. He alleged in par 56: "The Applicant ... asserts that the conduct of the Bank was in breach of the implied term of mutual trust and confidence and resulted in the Applicant being denied the opportunity of redeployment and the opportunity to thereby retain his employment with the Bank. The Applicant thereby lost a chance." The primary judge, Besanko J, held that there was a term of mutual trust and confidence implied in the Agreement which would be breached if a party, without reasonable and proper cause, engaged in conduct likely to destroy or seriously damage the relationship of trust and confidence between employer and employee5. He held that the Bank's failure, after 2 March 2009, to take meaningful steps with respect to Mr Barker's redeployment, within a reasonable period, was a serious breach of the Redeployment Policy and thereby a breach of the implied term6. Mr Barker's damages were assessed at $317,500, based upon discounted past and future economic loss7. The Full Court of the Federal Court, by majority (Jacobson and Lander JJ, Jessup J dissenting), also held that a term of mutual trust and confidence was implied by law into the Agreement8. The majority adopted the language of the House of Lords in Malik v Bank of Credit and Commerce International SA (In 5 Barker v Commonwealth Bank of Australia (2012) 296 ALR 706 at 757–758 [330]. (2012) 296 ALR 706 at 758 [331], 761 [351]–[352]. Besanko J rejected the contention that the Redeployment Policy was incorporated in the Agreement: at (2012) 296 ALR 706 at 764–765 [370]–[372], 768 [388]. (2013) 214 FCR 450 at 456 [13], 464 [94]–[95]. Bell Compulsory Liquidation)9, holding that the implied term required that "the employer will not, without reasonable cause, conduct itself in a manner likely to destroy or seriously damage the relationship of confidence and trust between employer and employee"10. Their Honours did not accept the reasoning of Besanko J that a serious failure to act in accordance with the Redeployment Policy amounted to a breach of the implied term11. In the circumstances of the case, however, the implied term required that the Bank take positive steps to consult with Mr Barker about alternative positions within the Bank and give him the opportunity to apply for them12. It failed to make contact with him for a period which the primary judge had found to be unreasonable13. The Bank could not do what was required of it because it had withdrawn Mr Barker's email and mobile phone facilities without telling the person charged with the responsibility of contacting him of those facts14. That was sufficient to constitute a breach of Jessup J, dissenting, found no basis for the premise that, under a contract of employment, the employer owes a duty of trust and confidence to the employee beyond those duties which are conventionally associated with contracts of that class16. The implied term could not be justified as a mutualisation of the employee's duty of fidelity to the employer, nor could it be justified as a principled development of the implied duty of cooperation as between parties to the contract17. It would enable defined limits in existing common law and equitable remedies to be sidestepped and would overlap a number of legislated [1998] AC 20 at 34 per Lord Nicholls of Birkenhead. 10 (2013) 214 FCR 450 at 464 [98]. 11 (2013) 214 FCR 450 at 466 [113]–[114]. 12 (2013) 214 FCR 450 at 467–468 [130]–[131]. 13 (2013) 214 FCR 450 at 468 [131]. 14 (2013) 214 FCR 450 at 468 [131]. 15 (2013) 214 FCR 450 at 468 [132]. 16 (2013) 214 FCR 450 at 531 [340]. 17 (2013) 214 FCR 450 at 531 [340]. Bell prohibitions and requirements affecting particular dimensions of the employment relationship18. His Honour further held that even if the term were implied, it had not been breached in this case19. The question on the appeal The primary question raised by the appeal is whether, under the common law of Australia, employment contracts contain a term that neither party will, without reasonable cause, conduct itself in a manner likely to destroy or seriously damage the relationship of trust and confidence between them. The answer to that question, being in the negative, is dispositive of the appeal. The employment relationship and the employment contract The history of the employment relationship is considerably longer than the history of the employment contract. The master–servant relationship, as it was once called, attracted incidental obligations before it began to be treated as contractual20. The evolution of its treatment by the common law has been described as "a classic illustration of the shift from status (that of master and servant) to that of contract (between employer and employee)" 21. That shift began in the United Kingdom in the nineteenth century with higher level occupations and had encompassed employees generally by the early twentieth century22. Associated with it were what Dixon J called "the fluctuating changes over the centuries in the extent to which the terms and conditions of the employment are left to free contract."23 Today, it would be unusual to find an 18 (2013) 214 FCR 450 at 531 [340]. 19 (2013) 214 FCR 450 at 533–534 [349]. 20 Attorney-General for NSW v Perpetual Trustee Co Ltd (1952) 85 CLR 237 at 245– 246 per Dixon J, 256 per McTiernan J; [1952] HCA 2. 21 Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 436 per McHugh and Gummow JJ; [1995] HCA 24. 22 Deakin and Morris, Labour Law, 4th ed (2005) at 22 [1.16], 25–26 [1.19]; Peden, "Contract Development Through the Looking-Glass of Implied Terms", in Gleeson, Watson and Peden (eds), Historical Foundations of Australian Law, Volume II: Commercial Common Law, (2013) 201 at 204. 23 Attorney-General for NSW v Perpetual Trustee Co Ltd (1952) 85 CLR 237 at 248. Bell employment relationship defined purely by contract24. Large categories of employment relationships are governed, at least in part, by statutory obligations expressed in industrial awards and agreements. There are laws dealing with unfair dismissal and the conditions of employment in relation to occupational health and safety. Anti-discrimination statutes of general application affect the conduct of the employment relationship. The relationship also has a fiduciary aspect25. While the emerging contractual aspect of the employment relationship attracted the application of principles concerning the implication of terms in contracts generally, their application to employment contracts was also informed by the evolving statutory environment. That interaction reflected the "symbiotic relationship" of legislation and the common law26, which is of significance when it comes to considering the relevance of decisions of the courts of the United Kingdom for the implication of a term of mutual trust and confidence in employment contracts in Australia. The point is illustrated by Lord Hoffmann's discussion in Johnson v Unisys Ltd27 of the transformation in the United Kingdom of the nature of the contract of employment. The law had changed to recognise the reality that employment gives "not only a livelihood but an occupation, an identity and a sense of self-esteem."28 Lord Hoffmann said29: "Most of the changes have been made by Parliament. ... European Community law has made a substantial contribution. And the common law has adapted itself to the new attitudes, proceeding sometimes by analogy with statutory rights." 24 Concut Pty Ltd v Worrell (2000) 75 ALJR 312 at 315 [17] per Gleeson CJ, Gaudron and Gummow JJ; 176 ALR 693 at 697. 25 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 96–97 per Mason J; [1984] HCA 64. 26 Brodie v Singleton Shire Council (2001) 206 CLR 512 at 532 [31] per Gleeson CJ; [2001] HCA 29. 27 [2003] 1 AC 518 at 539 [35]. 28 [2003] 1 AC 518 at 539 [35]. 29 [2003] 1 AC 518 at 539 [35]. Bell His Lordship described the implied term of trust and confidence as "[t]he most far reaching" contribution of the common law to the "employment revolution"30. Lord Steyn, who had written the leading judgment in Malik, writing separately in Johnson, referred to greater pressures on employees due to "the progressive deregulation of the labour market, the privatisation of public services, and the globalisation of product and financial markets"31. His Lordship concluded, on the basis of those and other considerations, that32: "The need for protection of employees through their contractual rights, express and implied by law, is markedly greater than in the past." His observations were linked to the suggestion that the contract of employment could be described in modern terms as a "relational contract"33. The breadth of the statements made by Lord Hoffmann and Lord Steyn points to a specific societal context for the development of the common law in the United Kingdom and considerations which, to the extent that they exist in Australia, would ordinarily be directed to legislatures. In so saying, it should be acknowledged that in South Australia v McDonald34, the Full Court of the Supreme Court of South Australia, in similar vein but not quite as expansively, saw the development of the implied term "as consistent with the contemporary view of the employment relationship as involving elements of common interest and partnership, rather than of conflict and subordination."35 The regulatory history of the employment relationship and of industrial relations generally in Australia differs from that of the United Kingdom. Levels of statutory protection for employees and employers have ebbed and flowed. 30 [2003] 1 AC 518 at 539 [36]. 31 [2003] 1 AC 518 at 532 [19]. 32 [2003] 1 AC 518 at 532 [19]. 33 [2003] 1 AC 518 at 532 [20] — a concept attributed originally to IR Macneil and S Macaulay, eg Macneil, The New Social Contract: An Inquiry into Modern Contractual Relations, (1980) and Macaulay, "Non-Contractual Relations in Business: A Preliminary Study", (1963) 28 American Sociological Review 55 and discussed in Brodie, "How Relational Is the Employment Contract?", (2011) 40 Industrial Law Journal 232. 34 (2009) 104 SASR 344. 35 (2009) 104 SASR 344 at 389 [231]. Bell The statutory framework from time to time is not uniform across Australia because it comprises not only Commonwealth laws36 but also diverse State and Territory laws37. Judicial decisions about employment contracts in other common law jurisdictions, including the United Kingdom, attract the cautionary observation that Australian judges must "subject [foreign rules] to inspection at the border to determine their adaptability to native soil"38. That is not an injunction to legal protectionism. It is simply a statement about the sensible use of comparative law. The implication of terms The common law in Australia must evolve within the limits of judicial power and not trespass into the province of legislative action. This Court and, to a lesser extent, intermediate appeal courts have a law-making function. That function can only be exercised as an incident of the adjudication of particular disputes. The first point of reference in its exercise is "the web of established legal principle"39. As Brennan J said in Dietrich v The Queen40: "There must be constraints on the exercise of the power, else the courts would cross 'the Rubicon that divides the judicial and the legislative powers'". A judicial announcement of an obligation of mutual trust and confidence, to be applied as an incident of employment contracts and applicable to employers and employees alike, involves the assumption by courts of a regulatory function defined by reference to a broadly framed normative standard. Broadly framed 36 See eg Racial Discrimination Act 1975 (Cth); Sex Discrimination Act 1984 (Cth); Australian Human Rights Commission Act 1986 (Cth); Disability Discrimination Act 1992 (Cth); Age Discrimination Act 2004 (Cth); Fair Work Act 2009 (Cth); Work Health and Safety Act 2011 (Cth). 37 See eg Industrial Relations Act 1979 (WA); Industrial Relations Act 1984 (Tas); Fair Work Act 1994 (SA); Industrial Relations Act 1996 (NSW); Industrial Relations Act 1999 (Q). 38 Finn, "Statutes and the Common Law", (1992) 22 University of Western Australia Law Review 7 at 13 quoting Traynor, "Statutes Revolving in Common-Law Orbits", (1968) 17 Catholic University Law Review 401 at 409. 39 McHugh, "The Judicial Method", (1999) 73 Australian Law Journal 37 at 48. 40 (1992) 177 CLR 292 at 320; [1992] HCA 57. Bell normative standards are familiar to courts required to apply, in common law or statutory settings, criteria such as "reasonableness", "good faith" and "unconscionability". However, the creation of a new standard of that kind is not a step to be taken lightly. Where the standard is embodied in a new contractual term implied in law, the bases for the implication in law of contractual terms must be considered as the first point of reference. Courts have implied terms in contracts in a number of ways: in fact or ad hoc to give business efficacy to a contract41; by custom in particular classes of contract42; in law in particular classes of contract; or in law in all classes of contract. Contractual terms implied in law may be effected by the common law or by statute. If effected by the common law they may be displaced by the express terms of the contract or by statute. Implication of a term in fact in a contract, by reference to what is necessary to give it business efficacy, was described in Codelfa Construction Pty Ltd v State Rail Authority of NSW as raising issues "as to the meaning and effect of the contract"43. Implication is not "an orthodox exercise in the interpretation 41 Such implications are made when the conditions set out in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283 per Lord Simon of Glaisdale, Viscount Dilhorne and Lord Keith of Kinkel are satisfied. These were conditions adopted by this Court in Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 at 605–606 per Mason J, Gibbs and Stephen JJ agreeing at 599, Aickin J agreeing at 615; [1979] HCA 51; see also Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 347 per Mason J, Stephen J agreeing at 344, Wilson J agreeing at 392, 404 per Brennan J; [1982] HCA 24. 42 The custom or usage must be notorious, certain, legal and reasonable. See Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226 at 236–237; [1986] HCA 14; Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 423–424 per Brennan CJ, Dawson and Toohey JJ, 440 per McHugh and Gummow JJ. 43 (1982) 149 CLR 337 at 345 per Mason J, Stephen J agreeing at 344, Wilson J agreeing at 392. Bell of the language of a contract, that is, assigning a meaning to a particular provision."44 It is nevertheless an "exercise in interpretation, though not an orthodox instance."45 The implication of terms in fact was also characterised in Attorney General of Belize v Belize Telecom Ltd46 as an exercise in construction. Lord Hoffmann, delivering the judgment of the Privy Council, said47: "it is not enough for a court to consider that the implied term expresses what it would have been reasonable for the parties to agree to. It must be satisfied that it is what the contract actually means." The distinction thus drawn is appropriate even though the scope of the constructional approach adopted by Lord Hoffmann has been debated48. In Codelfa, the implication of a term in law was said to be based upon "more general considerations" than those covered by the concept of business efficacy49. That distinction attracted authoritative support in Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd50. It has also been argued that some "terms" said to be implied in law are in fact rules of construction and that all implied "terms" of universal application fall into that category51. The application of that proposition to what has been treated 44 (1982) 149 CLR 337 at 345 per Mason J, Stephen J agreeing at 344, Wilson J agreeing at 392. 45 (1982) 149 CLR 337 at 345 per Mason J, Stephen J agreeing at 344, Wilson J agreeing at 392. 46 [2009] 1 WLR 1988; [2009] 2 All ER 1127. 47 [2009] 1 WLR 1988 at 1994 [22]; [2009] 2 All ER 1127 at 1134. 48 Hooley, "Implied Terms After Belize Telecom", (2014) 73 Cambridge Law Journal 315; Courtney and Carter, "Implied Terms: What Is the Role of Construction?", (2014) 31 Journal of Contract Law 151 at 160–163. 49 (1982) 149 CLR 337 at 345–346 per Mason J citing Lister v Romford Ice and Cold Storage Co Ltd [1957] AC 555 at 576 per Viscount Simonds and Liverpool City Council v Irwin [1977] AC 239 at 255 per Lord Wilberforce. 50 (1986) 160 CLR 226 at 237. 51 Peden, "'Cooperation' in English Contract Law — to Construe or Imply?", (2000) 16 Journal of Contract Law 56 at 66–67. Bell as a contractual duty to cooperate is considered below. Debates about characterisation have attracted persuasive protagonists on both sides52. They involve taxonomical distinctions which do not necessarily yield practical differences. Those debates are not concerned with the distinct question whether, and when, implication of a term is to be regarded as an exercise in the construction of a contract or class of contract. It has been accepted in this Court that some rules treated as implications of terms in law in particular classes of contract, or contracts generally, can also be characterised as rules of construction. Mason J, in Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd53, so characterised the principle enunciated by Lord Blackburn in Mackay v Dick54: "where in a written contract it appears that both parties have agreed that something shall be done, which cannot effectually be done unless both concur in doing it, the construction of the contract is that each agrees to do all that is necessary to be done on his part for the carrying out of that thing, though there may be no express words to that effect. What is the part of each must depend on circumstances." The language of Lord Blackburn was indicative of a rule of construction rather than of implication. Nevertheless, Mason J also referred to the rule as defining an implied "duty to co-operate"55. The majority in the Full Court of the Federal Court referred to the implied duty of cooperation as providing an "alternative approach" to the application of 52 Carter, Contract Law in Australia, 6th ed (2013) at 32–33 [2–19]; Seddon and Bigwood, Cheshire and Fifoot Law of Contract, 10th Aust ed (2012) at 461 [10.41]; Tolhurst, "Contractual Confusion and Industrial Illusion: A Contract Law Perspective on Awards, Collective Agreements and the Contract of Employment", (1992) 66 Australian Law Journal 705 at 716; and in relation to good faith see Allsop, "Good faith and Australian contract law: A practical issue and a question of theory and principle", (2011) 85 Australian Law Journal 341 at 361. 53 (1979) 144 CLR 596 at 607. 54 (1881) 6 App Cas 251 at 263 — a characterisation evidently endorsed in Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 448–449 per McHugh and 55 (1979) 144 CLR 596 at 607. Bell the implied duty of mutual trust and confidence56. Their Honours relied upon its formulation in Secured Income as one which "requires a party to a contract to do all things necessary to enable the other party to have the benefit of the contract."57 That obligation of cooperation required the Bank to take the positive steps necessary to enable Mr Barker to have the benefit of cl 8, which contemplated the possibility of redeployment within the Bank as an alternative to termination58. In opening that alternative approach, their Honours adverted to the suggestion by Lord Steyn in Malik 59 that the implied duty of mutual trust and confidence propounded in that case "probably has its origin in the duty of co- operation between contracting parties."60 As appears below, whatever the historical basis in the United Kingdom for the implied duty of mutual trust and confidence, it cannot be supported in this country as an expression or development of the implied duty of cooperation. As to the direct application of the implied duty of cooperation, the Bank submitted in this Court, as Jessup J had reasoned in his dissent, that there was no relevant contractual benefit with which the implied term could engage. Clause 8 conferred a benefit by way of a termination payment but did not confer a contractual entitlement to the benefit of the Redeployment Policy. The submission made on behalf of Mr Barker that "the prospect of ... redeployment was a benefit in the relevant sense" should not be accepted. An implication in law may have evolved from repeated implications in fact. As Gaudron and McHugh JJ observed in Breen v Williams61, some implications in law derive from the implication of terms in specific contracts of particular descriptions, which become "so much a part of the common understanding as to be imported into all transactions of the particular description."62 The two kinds of implied terms tend in practice to "merge 56 (2013) 214 FCR 450 at 466. 57 (2013) 214 FCR 450 at 467 [121]. 58 (2013) 214 FCR 450 at 467 [126]–[128]. 59 [1998] AC 20 at 45. 60 (2013) 214 FCR 450 at 461 [67]. 61 (1996) 186 CLR 71; [1996] HCA 57. 62 (1996) 186 CLR 71 at 103 quoting Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 449 per McHugh and Gummow JJ. Bell imperceptibly into each other"63. That connection suggests, as is the case, that the "more general considerations" informing implications in law are not so remote from those considerations which support implications in fact as to be at large. They fall within the limiting criterion of "necessity", which was acknowledged by both parties to this appeal. The requirement that a term implied in fact be necessary "to give business efficacy" to the contract in which it is implied can be regarded as a specific application of the criterion of necessity. The present case concerns an implied term in law where broad considerations are in play, which are not at large but are not constrained by a search for what "the contract actually means." In Byrne v Australian Airlines Ltd, McHugh and Gummow JJ emphasised that the "necessity" which will support an implied term in law is demonstrated where, absent the implication, "the enjoyment of the rights conferred by the contract would or could be rendered nugatory, worthless, or, perhaps, be seriously undermined"64 or the contract would be "deprived of its substance, seriously undermined or drastically devalued"65. The criterion of "necessity" in this context has been described as "elusive"66 and the suggestion made that "there is much to be said for abandoning"67 the concept. Necessity does, however, remind courts that implications in law must be kept within the limits of the judicial function. They are a species of judicial law-making and are not to be made lightly. It is a necessary condition that they are justified functionally by reference to the effective performance of the class of contract to which they apply, or of contracts generally in cases of universal implications, such as the duty to cooperate. Implications which might be thought reasonable are not, on that account only, necessary68. The same constraints apply whether or not such implications are characterised as rules of construction. 63 (1996) 186 CLR 71 at 103 quoting Glanville Williams, "Language and the Law — IV", (1945) 61 Law Quarterly Review 384 at 401. 64 (1995) 185 CLR 410 at 450. 65 (1995) 185 CLR 410 at 453. See also Jarratt v Commissioner of Police (NSW) (2005) 224 CLR 44 at 68 [78] per McHugh, Gummow and Hayne JJ; [2005] HCA 66 Crossley v Faithful & Gould Holdings Ltd [2004] ICR 1615 at 1627 [36]. 67 Peel, Treitel: The Law of Contract, 13th ed (2011) at 231 [6-043]. 68 University of Western Australia v Gray (2009) 179 FCR 346 at 376–377 [139]– Bell The implied term of mutual trust and confidence in the United Kingdom Employment contracts have attracted a number of implied terms in the course of the evolution of the employment relationship. All such terms are subject to the express provisions of the particular contracts and any applicable statutes. They include an implied duty imposed on the employer to provide the employee with a safe system of work69 and to give reasonable notice of the termination of the contract other than for breach70. An employee has an implied duty of fidelity to the employer not to engage in conduct which "impedes the faithful performance of his obligations, or is destructive of the necessary confidence between employer and employee"71. That duty may derive from the fiduciary obligations which employees owe to their employers, albeit those obligations have "different conceptual origins" from the contractual obligations72. Relevantly, the employment contract, in common with contracts generally, attracts the duty to cooperate enunciated by Lord Blackburn in Mackay v Dick73. It may also be noted that in the employment law of the United States there has been recognised an implied obligation which, though it "does not lend itself to precise definition ... requires at a minimum that an employer not impair the right of an employee to receive the benefits of the employment agreement."74 69 Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44 at 53 [19] per McHugh, Gummow, Hayne and Heydon JJ; [2005] HCA 15. 70 Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 423, 429 per Brennan CJ, 71 Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66 at 81 per Dixon and McTiernan JJ; [1933] HCA 8. 72 Concut Pty Ltd v Worrell (2000) 75 ALJR 312 at 317–318 [25]–[26] per Gleeson CJ, Gaudron and Gummow JJ; 176 ALR 693 at 700–701. 73 (1881) 6 App Cas 251 at 263, recognised in Butt v M'Donald (1896) 7 QLJ 68 at 70–71 per Griffith CJ, although expressed expansively as encompassing all things that are necessary to enable the other party to have the benefit of the contract. See also Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 at 607 per Mason J. 74 Jones v Central Peninsula General Hospital 779 P 2d 783 at 789 (1989). See also Metcalf v Intermountain Gas Co 778 P 2d 744 at 749 (1989); Wieder v Skala 609 NE 2d 105 at 109 (1992). Bell The submissions to the Court in this case focussed upon the question whether the proposed implied term of mutual trust and confidence was "necessary" in the sense that without it, the rights conferred by the Agreement could or would be rendered nugatory or worthless, or seriously undermined. Mr Barker relied substantially upon the decision of the House of Lords in Malik. The implied term of mutual trust and confidence in employment contracts in the United Kingdom arose out of what Professor Mark Freedland has described as "a highly context-specific and instrumental body of case law."75 Its development may be traced back to the enactment of a constructive dismissal provision in labour relations legislation in 197476. In a seminal decision for that development, the Court of Appeal in Western Excavating (ECC) Ltd v Sharp77 held that whether an employee was entitled to terminate employment by reason of the employer's conduct, and be treated as having been dismissed, was to be determined in accordance with the law of contract78. It was not to be determined merely by reference to the unreasonableness of the employer's conduct. The contractual test for constructive dismissal, as accepted by the Court of Appeal, required the employer to be guilty of conduct constituting a significant breach going to the root of the contract of employment, or which showed that the employer no longer intended to be bound by one or more of the essential terms of the contract79. After the decision in Western Excavating, the Employment Appeal Tribunal implied the term of mutual trust and confidence to meet the contractual test. In the leading decision, Courtaulds Northern Textiles Ltd v Andrew80, the implication, apart from one aspect of its wording, was not in dispute81. 75 Freedland, The Personal Employment Contract, (2003) at 155. 76 Trade Union and Labour Relations Act 1974 (UK), Sched 1, par 5(2)(c), now s 95(1)(c) of the Employment Rights Act 1996 (UK). 78 [1978] QB 761 at 770 per Lord Denning MR, Eveleigh LJ agreeing at 773. 79 [1978] QB 761 at 769–770 per Lord Denning MR, Eveleigh LJ agreeing at 773. Lawton LJ, conscious of the involvement of lay tribunals, said at 772 "[s]ensible persons have no difficulty in recognising such conduct when they hear about it." 80 [1979] IRLR 84. 81 [1979] IRLR 84 at 85. Bell Professor Freedland described what happened after Western Excavating "a process of formulation of implied terms, which were in effect back-formations, in the sense that they were terms the breach of which would amount to expulsive or repudiatory conduct sufficient to constitute constructive dismissal by the employer. It was in this particular crucible that the implied term as to mutual trust and confidence was formed." It was the case, however, that before the decision of the Court of Appeal, tribunals and courts in the United Kingdom had begun to formulate the test of constructive dismissal in terms of conduct by an employer rupturing the employee's trust or confidence in the employment relationship, a test applied by those who envisaged it as contractual or as a broader based test83. In the event, the implied term became, by the mid-1980s, "an orthodox tenet of the law of constructive unfair dismissal."84 That was the position in courts, other than the House of Lords, when Malik was decided. In Malik, the employer bank had carried on its business "dishonestly and corruptly."85 Former employees of the bank sued its provisional liquidators for damages for the stigma attaching to them by reason of their prior employment association with it. Lord Nicholls held that the bank was under an implied obligation to its employees not to conduct a dishonest or corrupt business86. That obligation was said to be a particular aspect of the general obligation imposed by the implied term87: "not to engage in conduct likely to undermine the trust and confidence required if the employment relationship is to continue in the manner the employment contract implicitly envisages." 82 Freedland, The Personal Employment Contract, (2003) at 155. 83 Freedland, The Personal Employment Contract, (2003) at 155. 84 Freedland, The Personal Employment Contract, (2003) at 156. 85 [1998] AC 20 at 34 per Lord Nicholls. 86 [1998] AC 20 at 34–35. 87 [1998] AC 20 at 35. Bell Although Malik was the first occasion on which the implied term was considered by the House of Lords, it appears to have been treated by their Lordships as a fait accompli. Lord Nicholls described it as a useful tool, well established in employment law88. Lord Steyn, who wrote the leading judgment, proceeded, like Lord Nicholls, upon the basis that the implied term was established as a standard term implied by law as an incident of all contracts of employment, albeit he described it as "a comparatively recent development" which probably had its origin "in the general duty of co-operation between contracting parties"89. His "The evolution of the implied term of trust and confidence is a fact. It has not yet been endorsed by your Lordships' House. It has proved a workable principle in practice. It has not been the subject of adverse criticism in any decided cases and it has been welcomed in academic writings. I regard the emergence of the implied obligation of mutual trust and confidence as a sound development." The implication in Australia The conclusion reached by the House of Lords in Malik must be understood in the context of the existing body of decisions made by the courts and tribunals of the United Kingdom, reflecting a consensus as to the implication which predated Malik91. The history of the development of the term in the United Kingdom is not applicable to Australia. There is a background of approving references to the implied term in decisions of Australian State and federal courts92. The strength of those approving references, however, depends 88 [1998] AC 20 at 39. 89 [1998] AC 20 at 45. 90 [1998] AC 20 at 46. 91 See eg Courtaulds Northern Textiles Ltd v Andrew [1979] IRLR 84; Woods v WM Car Services (Peterborough) Ltd [1981] ICR 666; Imperial Group Pension Trust Ltd v Imperial Tobacco Ltd [1991] 1 WLR 589; [1991] 2 All ER 597. See generally Lindsay, "The Implied Term of Trust and Confidence", (2001) 30 Industrial Law Journal 1. 92 See eg Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144; Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186; Irving v Kleinman [2005] NSWCA 116; Delooze v Healey [2007] WASCA 157; Shaw v New South Wales Bell upon the analysis underpinning them. In South Australia v McDonald, decided in 2009, the Full Court of the Supreme Court of South Australia observed that, with the exception of two first instance decisions, none of the Australian authorities to that date had "addressed in any detail the basis for the implication of the implied term."93 In that case, the Full Court concluded that the extensive statutory and regulatory context in which the contract in question operated rendered the implied term unnecessary94. In an obiter statement, their Honours acknowledged that it had long been recognised in Australia that contracts of employment involve "elements of mutual confidence."95 They related the development of the implied term to a contemporary view of the employment relationship as one of common interests and partnership96. There have been passing references to the duty in two decisions of this Court, neither of which constituted a determination that the duty should be implied97. In the end, while taking appropriate note of the decisions of State and federal courts, this Court must determine the existence of the implied duty by reference to the principles governing implications of terms in law in a class of contract. That requires this Court to determine whether the proposed implication is "necessary" in the sense that would justify the exercise of the judicial power in a way that may have a significant impact upon employment relationships and the law of the contract of employment in this country. The broad concept of "necessity" discussed earlier in these reasons may be defined by reference to what "the nature of the contract itself implicitly requires"98. It may be 93 (2009) 104 SASR 344 at 388 [227]. 94 (2009) 104 SASR 344 at 398 [270]. 95 (2009) 104 SASR 344 at 385 [215]. 96 (2009) 104 SASR 344 at 389 [231]. 97 Concut Pty Ltd v Worrell (2000) 75 ALJR 312 at 322 [51] per Kirby J; 176 ALR 693 at 706; Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44 at 55 [24] per McHugh, Gummow, Hayne and Heydon JJ. 98 Liverpool City Council v Irwin [1977] AC 239 at 254 per Lord Wilberforce. Bell demonstrated by the futility of the transaction absent the implication99. It is not satisfied by demonstrating the reasonableness of the implied term100. The duty to cooperate satisfies the criterion of necessity explained in Byrne. The implied term of mutual trust and confidence, however, imposes mutual obligations wider than those which are "necessary", even allowing for the broad considerations which may inform implications in law. It goes to the maintenance of a relationship. It appears, at least in part, to be informed by a view of the employment contract as "relational", a characteristic of uncertain application in this context and not one which was advanced on behalf of Mr Barker. The implied term cannot be treated as a particular application to employment contracts of the duty to cooperate, which applies to contracts generally. That duty is directly related to contractual performance, which explains to some degree why it can arguably be characterised as a rule of construction. The duty of mutual trust and confidence is proposed in this appeal as an implication apposite to the disposition of a particular dispute in which an employee complains of an employer's conduct. Yet it is an implication which would impose obligations not only on employers but also on employees, whose voices about that consequence of the implication are not heard in this appeal. Neither party had a direct interest in putting submissions to the Court about the burden the implication might place on employees. While the mutuality of an obligation and its effect upon a range of interests is not a bar to its implication, it locates the propounded implication close to the boundary between judicial law- making and that which is within the province of the legislature. The need for a cautious approach to the implication is underlined by the observation in the fourth edition of Deakin and Morris's Labour Law, that "[i]n its most far-reaching form [the development of the implied term] could be said to mark an extension of the duty of co-operation 'from the restricted obligation not to prevent or hinder the occurrence of an express condition upon which performance of the contract depends to a positive obligation to take all those steps which are necessary to achieve the purposes of the employment relationship 99 Liverpool City Council v Irwin [1977] AC 239 at 255 per Lord Wilberforce citing Miller v Hancock [1893] 2 QB 177 at 181 per Bowen LJ. 100 University of Western Australia v Gray (2009) 179 FCR 346 at 376 [139] and authorities there cited. Bell ...'."101 That extension was said to reflect a broader functional view, essentially a tribunal's view, of good industrial relations practice, embracing not only the material conditions of employment such as pay and safety, but also the psychological conditions which are essential to the performance by an employee of his or her part of the bargain102. The complex policy considerations encompassed by those views of the implication mark it, in the Australian context, as a matter more appropriate for the legislature than for the courts to determine. It may, of course, be open to legislatures to enshrine the implied term in statutory form and leave it to the courts, according to the processes of the common law, to construe and apply it. It is a different thing for the courts to assume that responsibility for themselves. The mutual aspect of the obligation cannot be put to one side by characterising its operation with respect to employees as merely a restatement of the existing duty of fidelity. It is more broadly worded than that obligation. As Jessup J observed in his dissenting judgment in the Full Court, the proposed implied duty of mutual trust and confidence might apply to conduct by employees which was neither intentional nor negligent and did not breach their implied duty of fidelity, but objectively caused serious disruption to the conduct of their employer's business103. Importantly, the implied duty of trust and confidence as propounded in Malik is directed, in broad terms, to the relationship between employer and employee rather than to performance of the contract. It depends upon a view of social conditions and desirable social policy that informs a transformative approach to the contract of employment in law. It should not be accepted as applicable, by the judicial branch of government, to employment contracts in Australia. The above conclusion should not be taken as reflecting upon the question whether there is a general obligation to act in good faith in the performance of contracts. Nor does it reflect upon the related question whether contractual powers and discretions may be limited by good faith and rationality requirements 101 Deakin and Morris, Labour Law, 4th ed (2005) at 335 [4.91] quoting Hepple, Hepple & O'Higgins: Employment Law, 4th ed (1981) at 135. 102 Deakin and Morris, Labour Law, 4th ed (2005) at 335 [4.91] quoting Hepple, Hepple & O'Higgins: Employment Law, 4th ed (1981) at 135. 103 (2013) 214 FCR 450 at 518 [304]. Bell analogous to those applicable in the sphere of public law104. Those questions were not before the Court in this appeal. Mr Barker also sought to support the decision of the Full Court by way of a notice of contention and the submission that the term of mutual trust and confidence should be implied as a matter of fact in the Agreement. For the reasons already given, the term did not answer the criterion of necessity required to support its implication in law in employment contracts generally. Mr Barker's counsel was unable to point to any particular feature of the Agreement that would support its implication in fact, albeit he referred to Mr Barker's seniority, his long and distinguished career with the Bank, and the silence of the contract on matters of trust and confidence. The submission in support of an implication in fact must be rejected. Conclusion There was a conceded entitlement to damages in favour of Mr Barker of $11,692.31 together with interest based upon a breach of cl 6 of the Agreement found by the primary judge. The Bank gave an undertaking at the special leave hearing that it would pay Mr Barker's costs of the application for special leave and the appeal and not seek costs against him if successful in the appeal, nor would it seek to disturb costs orders made below which were favourable to him. In light of the concession and the undertaking, the following orders should be made: Appeal allowed. Set aside paragraphs 1 (save as to costs) and 2 of the order of the Full Court of the Federal Court of Australia made on 6 August 2013 and, in their place, order that: the appeal be allowed; and paragraphs 1 and 2 of the order of the Federal Court of Australia made on 3 September 2012 be set aside and, in lieu thereof, order that: judgment be entered for the applicant against the respondent in the sum of $11,692.31; and 104 See eg Paterson, "Implied Fetters on the Exercise of Discretionary Contractual Powers", (2009) 35 Monash University Law Review 45 at 59, 73. Bell the respondent pay the applicant interest in an amount to be determined by a judge of the Federal Court of Australia if not otherwise agreed. Appellant to pay the respondent's costs of the appeal and of the application for special leave to appeal. KIEFEL J. The question in this case is whether the appellant, the former employer of the respondent, is liable to the respondent for damages in connection with the termination of the respondent's employment. The respondent worked for the appellant from 1981 in various positions. From July 2004, he held the position of Executive Manager, Level Three Corporate Banking, Institutional and Business Services in Adelaide. His position was subsequently changed to Regional Manager and to Regional Executive. Despite some variations to reflect the changes in his role, the terms of the Employment Agreement between the respondent and the appellant dated 10 August 2004 remained the same in relevant respects. Clause 6 of the Employment Agreement provided that it could be terminated by agreement or by four weeks' written notice by either party to the other, except in circumstances of misconduct. As an alternative, the appellant could make a payment of an amount equivalent to four weeks' pay in lieu of notice. No reason for termination was required to be given in either circumstance. Clause 7 provided that, where the appellant initiated termination of employment other than for misconduct or unsatisfactory performance, the appellant would pay the respondent compensation. Clause 7 did not apply in a case where payment was made under cl 8. Clause 8 applied where an employee was already employed by the appellant before the date of the Employment Agreement and where the position occupied by the employee became redundant. Both conditions were met in the case of the respondent. Clause 8 provided that, where these circumstances arose "and the Bank is unable to place the Employee in an alternative position with the Bank or one of its related bodies, in keeping with the Employee's skills and experience", compensation would be payable. Clauses 7 and 8 provided for the assessment of compensation in somewhat different terms. The quantum of compensation under them is not relevant for present purposes. It will be observed that cll 6 and 7, on the one hand, and cl 8, on the other, dealt with different subjects – respectively, termination and redundancy. If an employee was made redundant, cl 8 contemplated that the appellant would attempt to find another, suitable position for the employee. If it could not, impliedly within a reasonable time, the employment would come to an end and the compensation for which cl 8 provided would be payable. If a position was found, it is to be inferred that the employment would continue. If the employee was dissatisfied with the alternative position, he or she could terminate the employment under cl 6; but in that circumstance, no compensation would be payable. On 2 March 2009, the respondent was called to a meeting and handed a letter which advised him that his position as Regional Executive was to be made redundant. The letter said that it was the appellant's preference to redeploy the respondent to a suitable position within the appellant and that it would explore, in consultation with the respondent, appropriate options. The letter also said that "the redeployment process" was supposed to commence that day. However, the appellant accepts that this redeployment process miscarried. The upshot was that the respondent's employment was terminated by the appellant by letter on 9 April 2009105. He received retrenchment payments totalling $182,092.16. Following a trial in the Federal Court of Australia, the primary judge (Besanko J) found that the appellant had repudiated the contract of employment on 9 April 2009, when it purported to terminate the contract without giving the requisite notice under cl 6106. It followed that the respondent would have been entitled to damages amounting to four weeks' pay. However, the respondent claimed more than that amount. The respondent pleaded a breach of the Employment Agreement, anterior to its termination, which resulted in him losing the opportunity to be redeployed. This claim was not based upon cl 8 of the Employment Agreement, but upon a term to be implied in the Employment Agreement to the effect that the appellant, as an employer, must not, without reasonable and proper cause, conduct itself in a manner likely to destroy or seriously damage the relationship of trust and confidence between employer and employee ("the term of trust and confidence"). A term to this effect, referable to all contracts of employment, was recognised by the House of Lords in Malik v Bank of Credit and Commerce International SA The primary judge applied the term of trust and confidence108 and held that the appellant breached it by failing to take steps to comply with its own redeployment policy109, as the respondent had alleged. Although accepting that the redeployment policy did not form part of the Employment Agreement, his 105 Barker v Commonwealth Bank of Australia (2012) 296 ALR 706 at 739 [215]. 106 Barker v Commonwealth Bank of Australia (2012) 296 ALR 706 at 748 [278]- 107 [1998] AC 20. The decision is also referred to by the name of the second action joined, Mahmud v Bank of Credit and Commerce International SA (In Compulsory Liquidation). 108 Barker v Commonwealth Bank of Australia (2012) 296 ALR 706 at 757 [330]. 109 Barker v Commonwealth Bank of Australia (2012) 296 ALR 706 at 761 [352]. Honour held that a serious breach of the policy would amount to a breach of the term of trust and confidence110. His Honour awarded damages assessed by reference to the respondent's loss of opportunity to be redeployed111. The Full Court held that his Honour was in error in treating the term of trust and confidence as co-extensive with an obligation to observe the redeployment policy112. There is no appeal from that finding. Nevertheless, the Full Court, by a majority (Jacobson and Lander JJ, Jessup J dissenting), upheld the primary judge's award of damages on the basis that the term of trust and confidence required the appellant to take steps to consult with the respondent and inform him of suitable employment options, and that term had been breached113. The implication of terms The term of trust and confidence recognised in Malik is one implied by law114. It is intended to apply to all contracts of a particular class or description, namely contracts of employment. It may be distinguished from a term that it is necessary to imply to give business efficacy to a particular contract115, which focuses on the form of a contract and its express and unique terms116. Implication of a term by law involves "a search, based on wider considerations, for such a term as the nature of the contract might call for, or as a legal incident 110 Barker v Commonwealth Bank of Australia (2012) 296 ALR 706 at 758 [331]- 111 Barker v Commonwealth Bank of Australia (2012) 296 ALR 706 at 764-765 [369]- 112 Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 at 466 [113]- 113 Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 at 466 [117], 467- 114 Malik v Bank of Credit and Commerce International SA (In Compulsory Liquidation) [1998] AC 20 at 45. 115 Lister v Romford Ice and Cold Storage Co Ltd [1957] AC 555 at 576 per Viscount Simonds; Liverpool City Council v Irwin [1977] AC 239 at 255 per Lord Wilberforce; Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 345-346 per Mason J; [1982] HCA 24; Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 448 per McHugh and Gummow JJ; [1995] HCA 24. 116 Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 448. of this kind of contract."117 In either case, a requirement for the implication of a term is that it be necessary in the respective senses which will shortly be discussed. A test of necessity does not appear to have been applied in Malik. A covenant for quiet enjoyment furnishes a good example of a term which will be implied in contracts between landlord and tenant, because it is a necessary incident of the relationship between landlord and tenant. Liverpool City Council v Irwin118 furnishes another. At issue in that case was whether there should be implied a covenant, on the part of a local authority (which was the landlord of a multi-occupied building), to keep in repair common parts of the building (such as lifts, staircases, rubbish chutes and passages), over which it retained control. Lord Wilberforce considered that no novel approach was involved in implying such a covenant119. The use of the parts of the building in question was essential to the tenancy. A similar approach had been taken in Miller v Hancock120, to which Lord Wilberforce referred. In that case, Bowen LJ held that, without the implication of a term requiring a landlord to maintain a staircase in leased premises, the whole transaction would be futile. It would be rendered "inefficacious and absurd". In Irwin, Lord Wilberforce regarded this reasoning as "common sense"121. Scally v Southern Health and Social Services Board122 involved obligations arising from the relationship of employer and employee. It was referred to by Lord Steyn in both Malik123 and Johnson v Unisys Ltd124 as being illustrative of developments in the law relating to employers' obligations. On another view, Scally may be seen to adopt an approach similar to that in Irwin. In Scally, a change to the regulations governing a statutory superannuation scheme permitted employees who had joined the scheme late to purchase "added 117 Liverpool City Council v Irwin [1977] AC 239 at 255. 119 Liverpool City Council v Irwin [1977] AC 239 at 254. 120 [1893] 2 QB 177 at 180-181. 121 Liverpool City Council v Irwin [1977] AC 239 at 255. 123 [1998] AC 20 at 46. 124 [2003] 1 AC 518 at 531 [18]. years" of pension entitlements, but the right could be exercised only within a limited time of the regulations coming into force and thereafter on less favourable terms. The question identified by Lord Bridge of Harwich was whether the law would imply a contractual obligation, on the part of the employer, to take reasonable steps to bring the existence of the contingent right to the notice of employees125. His Lordship considered that the implication could not be justified for the sake of giving business efficacy to the contract of employment as a whole. However, since the employee's entitlement to enhance the pension would be of no contractual effect unless the employee was made aware of it, it was necessary to imply an obligation on the part of the employer "to render efficacious the very benefit which the contractual right to purchase added years was intended to confer."126 His Lordship stressed that the criterion for the implication was necessity, not just reasonableness127. In Byrne v Australian Airlines Ltd128, McHugh and Gummow JJ observed that both Irwin and Scally had adopted the test of "necessity". Their Honours observed that, in Scally, the term implied was a necessary incident of a definable category of contractual relationship. Their Honours explained that many of the terms now said to be implied by law in various categories of cases reflect the concern of the courts that, without the term, the enjoyment of the rights conferred would be "rendered nugatory, worthless, or … seriously undermined"129. It is in this sense that the word "necessity" is used. In their Honours' view, the notion of necessity has been crucial in modern cases when the law has implied a term as a matter of law for the first time. In Breen v Williams130, Gaudron and McHugh JJ observed that the notion of necessity is central to the rationale for an implication 125 Scally v Southern Health and Social Services Board [1992] 1 AC 294 at 304. 126 Scally v Southern Health and Social Services Board [1992] 1 AC 294 at 306. 127 Scally v Southern Health and Social Services Board [1992] 1 AC 294 at 307; see also Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 346, discussing terms implied into a particular contract. 128 (1995) 185 CLR 410 at 451-452. 129 Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 450, referring to Nullagine Investments Pty Ltd v Western Australian Club Inc (1993) 177 CLR 635 at 647- 648, 659; [1993] HCA 45. 130 (1996) 186 CLR 71 at 103; [1996] HCA 57. of this kind. The requirement of necessity has been confirmed by a number of decisions of this Court since Byrne and Breen131. The courts will also imply an obligation on the part of each party to a contract to co-operate in the doing of acts necessary to performance, or to enable the other party to secure a benefit provided by the contract 132. Such an obligation may be traced to Mackay v Dick133. In the sphere of terms implied to render efficacious a particular contract, necessity is also required. In BP Refinery (Westernport) Pty Ltd v Shire of Hastings134, it was said that no term will be implied if the contract is effective without it and that any implied term must be so obvious that it "goes without saying". The term of trust and confidence It is necessary in the first place to distinguish between an employee's duty of trust and confidence, which the law has for a long time implied in contracts of employment, and the term recognised in Malik. The former is not concerned with obligations on the part of an employer, but with obligations of fidelity on the part of an employee to his or her employer, breach of which may justify dismissal. The term of trust and confidence recognised in Malik, on the other hand, imposes obligations on an employer not to engage in "trust-destroying conduct"135 which may sound in damages if breached. As to the duty of trust and confidence that the law earlier applied to the conduct of an employee, in Pearce v Foster136, Lord Esher MR said that it was a 131 Jarratt v Commissioner of Police (NSW) (2005) 224 CLR 44 at 68 [78]; [2005] HCA 50; Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577 at 596 [59]; [2006] HCA 55; Copyright Agency Ltd v New South Wales (2008) 233 CLR 279 at 305-306 [92]; [2008] HCA 35. 132 Butt v M'Donald (1896) 7 QLJ 68 at 70-71; Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 at 607; [1979] HCA 51; Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 133 (1881) 6 App Cas 251 at 263. 134 (1977) 180 CLR 266 at 283. 135 Malik v Bank of Credit and Commerce International SA (In Compulsory Liquidation) [1998] AC 20 at 34. 136 (1886) 17 QBD 536 at 539. rule of law that, "where a person has entered into the position of servant, if he does anything incompatible with the due or faithful discharge of his duty to his master, the latter has a right to dismiss him."137 In English and Australian Copper Co Ltd v Johnson138, Griffith CJ cited Pearce v Foster and noted that the conduct of the employee in question would have created a serious loss of confidence in his employer. In Shepherd v Felt and Textiles of Australia Ltd139, the employer discovered, subsequent to its termination of Shepherd's services as a sales representative, that he had attempted to persuade a customer to deal directly with him and not the employer. It was observed that the employee was obliged to render faithful and loyal service. If that service was not rendered, the employer had the right to determine the contract140. In Blyth Chemicals Ltd v Bushnell141, the Court reiterated what had been said in Shepherd142 concerning the maintenance of confidence between employer and employee. Dixon and McTiernan JJ said that any conduct on the part of the employee which is incompatible with his duty, involves conflict between his interests and that duty or "is destructive of the necessary confidence between employer and employee" is a ground of dismissal143. The duty of trust and confidence of which these cases speak is not some abstract concept. It refers to conduct, on the part of an employee, which is contrary to the interests of the employer and serious enough to have the effect that the employer could not reasonably be expected to have confidence in the employee. The duty reflects an essential aspect of the relationship between employer and employee. Whilst trust and confidence is maintained, the relationship endures. In that sense, the employee's duty may be said to be directed to the maintenance of the relationship. Yet the law recognises that, where a point of no confidence is reached, it would be intolerable for the 137 See also Boston Deep Sea Fishing and Ice Co v Ansell (1888) 39 Ch D 339; Robb v Green [1895] 2 QB 315; Wessex Dairies Ltd v Smith [1935] 2 KB 80; Hivac Ltd v Park Royal Scientific Instruments Ltd [1946] Ch 169. 138 (1911) 13 CLR 490 at 497, 500; [1911] HCA 65. 139 (1931) 45 CLR 359; [1931] HCA 21. 140 Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359 at 370, 372, 378. 141 (1933) 49 CLR 66 at 72-73, 81-82; [1933] HCA 8. 142 (1931) 45 CLR 359. 143 Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66 at 81-82; see also at 72-74. employer to continue with the relationship. In such a circumstance, termination of the employment is justified. No decision of this Court has dealt with the question whether the term of trust and confidence recognised in Malik should be implied in employment contracts in Australia. Contrary to the view expressed by the primary judge144, on which the respondent relies, the application of the term has not been assumed by members of this Court. The decision in Concut Pty Ltd v Worrell145 concerned the misconduct of an employee and the above-mentioned duty of confidence to his employer. The joint reasons referred146 to Pearce v Foster147 and included, in a footnote, a reference to Malik148. The latter reference did no more than draw attention to what was then recent authority in England. In Koehler v Cerebos (Australia) Ltd149, there was a parenthetical reference to "the implied duty of trust and confidence" between parties to an employment contract. However, that case concerned a claim in negligence and there was no discussion of whether the term of trust and confidence recognised in Malik should apply in Australia. The words adopted in Malik as the formulation of the term of trust and confidence, to be applied in connection with the duties of employers, did not have their origin in decisions of the ordinary courts, but rather those of employment tribunals exercising statutory powers with respect to unfair dismissals. The Trade Union and Labour Relations Act 1974 (UK) contained a provision to the effect that an employee was to be taken to be dismissed if the employee terminated the contract on account of the employer's conduct (which some call "constructive dismissal")150. In Western Excavating (ECC) Ltd v Sharp151, the Court of Appeal held that, for the provision to apply, the employer 144 Barker v Commonwealth Bank of Australia (2012) 296 ALR 706 at 757 [324], 145 (2000) 75 ALJR 312; 176 ALR 693; [2000] HCA 64. 146 Concut Pty Ltd v Worrell (2000) 75 ALJR 312 at 317 [25]; 176 ALR 693 at 700. 147 (1886) 17 QBD 536 at 539. 148 [1998] AC 20 at 34-35, 45-46. 149 (2005) 222 CLR 44 at 55 [24]; [2005] HCA 15. 150 Trade Union and Labour Relations Act 1974 (UK), Sched 1, par 5(2)(c). 151 [1978] QB 761 at 769-770. must be guilty of conduct which amounted to a significant breach going to the root of the contract of employment. The question for the employment tribunals was what conduct on the part of an employer, which caused the employee to resign, qualified as a breach of this kind. In Courtaulds Northern Textiles Ltd v Andrew152, the Employment Appeal Tribunal accepted that "it was an implied term of the contract that the employers would not, without reasonable and proper cause, conduct themselves in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between the parties." The purpose and importance of the term of trust and confidence was explained in Woods v WM Car Services (Peterborough) Ltd153. Without it, it was said, an employee had no remedy even if his or her employer had behaved unfairly, and so employers could "squeeze out" employees and still avoid a statutory claim for unfair dismissal. The claim in Malik, however, did not concern dismissal. The liquidators of the employer, a bank, had already terminated the employment of the two appellants on the ground of redundancy. The employees lodged proofs of debt in the winding up, claiming compensation on the basis that they were unable to secure further employment because of the stigma that attached to them as former employees of a bank which had, for a number of years, carried on its business fraudulently. The matter proceeded upon the basis that the employees were innocent of misconduct. The crucial point in Malik, Lord Nicholls of Birkenhead observed154, concerned whether damages were recoverable. The decision in Addis v Gramophone Co Ltd155 was understood to preclude the recovery of damages by an employee for the manner in which a wrongful dismissal took place, for injured feelings or for any loss sustained because the fact of dismissal itself might make it more difficult for the employee to obtain alternative employment156. The decision in Addis v Gramophone Co Ltd was not followed in Malik, on the basis that the term of trust and confidence had since been developed and was to be implied in all contracts of employment. Lord Steyn said that "[t]he evolution of the implied term of trust and confidence is a fact … It has proved a workable 152 [1979] IRLR 84 at 85 [10]. 153 [1981] ICR 666 at 671-672. 154 Malik v Bank of Credit and Commerce International SA (In Compulsory Liquidation) [1998] AC 20 at 37. 156 Malik v Bank of Credit and Commerce International SA (In Compulsory Liquidation) [1998] AC 20 at 38. principle in practice. It has not been the subject of adverse criticism in any decided cases and it has been welcomed in academic writings. I regard the emergence of the implied obligation of mutual trust and confidence as a sound development."157 The question whether the term of trust and confidence should be recognised was not argued in Malik. Its application to contracts of employment was assumed, although it had been applied and developed by the employment tribunals for a very different purpose. As applied by the employment tribunals, in connection with constructive dismissals, the term referred to conduct, on the part of an employer, which caused a breakdown in the relationship between employer and employee such that the employee had no real alternative but to resign. An analogy with the duty that applies to employees is evident. An employer may be placed in a position by the conduct of an employee where dismissal is the only option. Although the term of trust and confidence necessarily referred to conduct occurring prior to the employment relationship coming to an end, the context for its development was a claim, provided by statute, for compensation in the event of termination of the employment. The duty of trust and confidence owed by employees also generally assumes relevance only after dismissal; the conduct in breach of the duty causes the employment relationship to come to an end. The term of trust and confidence was not applied in Malik in this way. The term was said to be breached by "trust-destroying conduct"158, which need not be connected to a termination of employment. The conduct which breached the term in Malik was held to be the employer engaging in a corrupt and dishonest business. Lord Nicholls reasoned that, since that conduct would, hypothetically, have entitled the employees to leave their employment had they known of the employer's practices, it constituted a repudiation by the employer of the contract of employment159. The real question arising from the employees' claims in Malik was whether the employer ought reasonably to have foreseen that damage to the employees' prospects of future employment, referred to as "continuing financial loss", was a serious possibility, given the employer's conduct in breach of the 157 Malik v Bank of Credit and Commerce International SA (In Compulsory Liquidation) [1998] AC 20 at 46. 158 Malik v Bank of Credit and Commerce International SA (In Compulsory Liquidation) [1998] AC 20 at 34. 159 Malik v Bank of Credit and Commerce International SA (In Compulsory Liquidation) [1998] AC 20 at 34-35. term160. However, it was not necessary for the House of Lords to determine the question of recoverability. The proceedings were analogous to strike out applications and questions such as remoteness had not been raised in answer to the claims161. It was held that, in principle, there was nothing unreasonable in holding an employer liable for such a loss162. As has been discussed, the term recognised in Malik was of broad application. Later, in Johnson v Unisys, the House of Lords identified some difficulties in the application of the term of trust and confidence to claims for wrongful dismissal at common law. In relation to the employment contract itself, Lord Hoffmann observed163 that any express term permitting termination by an employer on notice without any reason makes it difficult to imply a term, such as the term of trust and confidence, providing for dismissal only for good cause. The problem identified is inconsistency, which has long been understood to preclude implication. His Lordship ventured the opinion that a requirement of fairness and good faith on the part of the employer in the manner of the dismissal might overcome such an obstacle164, but it was not necessary to resolve that question. The insurmountable difficulty for the application of the term of trust and confidence was the system which had been set up by the legislature to deal with unfair dismissal. Lord Hoffmann observed165 that the Industrial Relations Act 1971 (UK) had introduced a new concept of unfair dismissal, with new remedies, in respect of which exclusive jurisdiction had been given to courts and tribunals other than the ordinary courts. These unfair dismissal provisions were later consolidated in Pt X of the Employment Rights Act 1996 (UK), which contained elaborate measures dealing with what constitutes dismissal and the concept of unfairness. The employment tribunal that had jurisdiction under the legislation had power to order reinstatement or compensation. 160 Malik v Bank of Credit and Commerce International SA (In Compulsory Liquidation) [1998] AC 20 at 37. 161 Malik v Bank of Credit and Commerce International SA (In Compulsory Liquidation) [1998] AC 20 at 49. 162 Malik v Bank of Credit and Commerce International SA (In Compulsory Liquidation) [1998] AC 20 at 36-38. 163 Johnson v Unisys Ltd [2003] 1 AC 518 at 540 [42]. 164 Johnson v Unisys Ltd [2003] 1 AC 518 at 540-541 [43]-[44]. 165 Johnson v Unisys Ltd [2003] 1 AC 518 at 542-544 [50]-[56]. These provisions were in existence when Malik was determined; indeed, Lord Nicholls made some reference to them in drawing an analogy with the way in which courts might approach an award of damages166. The only relevant difference in the provisions would appear to be that, by the time Johnson v Unisys was decided, the limit on the amount of compensation which might be awarded by an employment tribunal for unfair dismissal had been substantially increased167. In Johnson v Unisys, the appellant had been summarily dismissed and had received compensation for unfair dismissal from the employment tribunal. He also brought a common law claim for damages arising from the manner of dismissal, which, he alleged, had caused him to suffer a mental breakdown. Lord Hoffmann observed168 that an employment tribunal could award such compensation under the statute as it considered to be just and equitable (up to a prescribed limit)169, which could include compensation for damage to reputation and distress. The statute therefore provided the very remedy which the appellant sought. The courts, in the face of the evident intention of the legislature to provide a remedy, but limit its application and extent, could not construct a general common law remedy arising from unfair circumstances attending dismissal. Although Malik did not itself concern a breach of the term of trust and confidence in connection with dismissal, the discussion170 relating to Addis v Gramophone Co Ltd suggests that it was assumed that the term could apply in such circumstances. The decision in Johnson v Unisys, however, held that it did not apply in those circumstances, and so denies a substantial area for the operation of the Malik term. The only area left for its operation would appear to be claims for damages respecting conduct antecedent to, but unconnected with, termination. The conduct in breach of the term of trust and confidence to which Malik refers need not be destructive of the employment relationship in fact, so long as it is conduct of a "trust-destroying" kind. Since Malik, the courts have indicated 166 Malik v Bank of Credit and Commerce International SA (In Compulsory Liquidation) [1998] AC 20 at 39. 167 Johnson v Unisys Ltd [2003] 1 AC 518 at 543 [53]. 168 Johnson v Unisys Ltd [2003] 1 AC 518 at 544 [55]-[56], [58]. 169 Employment Rights Act 1996 (UK), s 123(1). 170 Malik v Bank of Credit and Commerce International SA (In Compulsory Liquidation) [1998] AC 20 at 38-39. that the following may be examples of such conduct: a wrongful suspension171; a "capricious" failure on the part of an employer to offer the same, beneficial terms of redundancy172; and the improper conduct of a disciplinary process173. The decision of the Full Court In the Full Court, only Jessup J applied the test of necessity in determining whether the term of trust and confidence for which the respondent contended should be implied. His Honour concluded that it was not necessary to imply it to prevent the enjoyment of rights conferred by the contract being rendered nugatory or seriously undermined174. The majority appears to have adopted175 the view expressed in University of Western Australia v Gray176, that necessity is an "elusive concept", as a reason for not applying it. The majority favoured the implication of the term of trust and confidence recognised in Malik. Since their Honours were speaking of an implication of the kind recognised in Malik, they may be taken to have considered an implication of a term by law, rather than one referable to the particular contract. The majority in the Full Court referred177, with approval, to the statement by a Full Court of the Supreme Court of South Australia in South Australia v McDonald178 that the development of the term of trust and confidence in England is consistent with the contemporary view of the employment relationship. It is policy considerations referable to the nature of the relationship between employer and employee which explain the need for the implied term, the majority observed. It was suggested that, at this point in its development, the content of 171 Gogay v Hertfordshire County Council [2000] IRLR 703; see also Bliss v South East Thames Regional Health Authority [1987] ICR 700. 172 Transco plc v O'Brien [2002] ICR 721. 173 Eastwood v Magnox Electric plc [2005] 1 AC 503 at 529 [34]. 174 Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 at 530 [339]. 175 Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 at 463-464 [93], 176 (2009) 179 FCR 346 at 377-379 [141]-[147]. 177 Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 at 464 [94]-[95]. 178 (2009) 104 SASR 344 at 389 [231]. the implied term should be moulded according to the nature of the particular relationship and the facts of the case179. Turning to the facts of this case, the majority noted180 that the respondent was a long-term employee of a large corporate employer. Those facts, together with cl 8 of the Employment Agreement (which contemplated that the respondent's employment might be terminated if the appellant was unable to place him in an alternative position), informed the content of the implied term. The majority concluded that the term of trust and confidence required the the respondent about appellant redeployment181. take positive steps to consult with There are a number of difficulties with this approach. The requirement of necessity for the implication of a term in a contract, or a contract of a particular kind, cannot be brushed aside as "elusive". It is fundamental to the basis for implications. It is not uncertain. It has the meaning referred to in Irwin and in Byrne. It has the advantage of providing objectivity to the test employed by the courts. It is not the particular relationship of the parties to the contract which is in question respecting implications by law. It is the relationship of employer and employee more generally which identifies what is necessary to the operation or fulfilment of employment agreements. The relationship of landlord and tenant, the example earlier referred to, necessarily implies that the landlord will ensure that the tenant has quiet enjoyment of the premises the subject of the tenancy and access to that part of the premises rented. Moreover, the reasoning of the majority in the Full Court does not appear to apply the term of trust and confidence recognised in Malik, one requiring the appellant not to engage in "trust-destroying conduct". It identifies a positive obligation, on the part of the appellant, to take steps in connection with the process of redundancy, but it does so by reference to an express term of the contract, cl 8. An alternative approach adopted by the majority was based upon the implied duty of co-operation. In this respect, reliance was placed upon the observation of Lord Steyn in Malik182 that the term of trust and confidence may 179 Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 at 465 [108]. 180 Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 at 465-466 [111]. 181 Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 at 466 [112], 182 [1998] AC 20 at 45. have had its origin in the general duty of co-operation between contracting parties. However, as the majority in the Full Court correctly observed183, the duty of co-operation "is anchored upon the need for one party to take a positive step without which the other party is unable to enjoy a right or benefit conferred upon it by the contract." Once again, the majority identified cl 8 as relevant to the duty. On either approach, the source of the obligation to attempt to redeploy the respondent that was said to found the breach by the appellant was not the term of trust and confidence; it was cl 8 of the Employment Agreement. It would hardly seem necessary to imply an obligation of co-operation to ensure the respondent had the benefit of what cl 8 offered. The clause says, clearly enough, that steps were to be taken in connection with redeployment. In any event, the respondent's case has never been one for breach of cl 8; the proceedings have never been conducted on that basis and the appeal cannot now be approached as if such a claim had been made. The majority in the Full Court did not answer the question whether the implication of a term requiring the appellant to take steps to redeploy the respondent was necessary to give efficacy to the Employment Agreement. The respondent, by notice of contention, seeks to support the conclusion of the majority on this basis. Clause 8 again provides the answer. A term cannot be said to be necessary in this sense if the contract is effective without it184. A contract clearly is effective where it already contains a term to the effect sought. The only difference is that the compensation which the respondent would receive under the clause is more limited than the damages sought, but that is not a matter to which the requirement of necessity is addressed. In the Employment Agreement, the parties provided for the very circumstance now sought to be made the subject of an implication. An application of the term of trust and confidence? It remains to consider the respondent's broader argument that the term of trust and confidence recognised in Malik can, and should, be applied to maintain the decision of the Full Court. This involves the question whether the term should apply generally to contracts of employment in Australia. It may immediately be observed that the term of trust and confidence recognised in Malik can have no application to claims for common law damages 183 Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 at 467 [122]. 184 BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283; Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 at 605-606. arising out of dismissals, for the reasons identified in Johnson v Unisys. That decision may be taken to acknowledge what Gleeson CJ referred185 to as the "symbiotic relationship" of the common law and legislation, and that neither operates alone. Commonwealth legislation has made provision for unfair dismissal since 1994186. Prior to this, provision was made by State legislation. The system as it existed at the time of the decision in State of New South Wales v Paige187 was described by Spigelman CJ as a "carefully calibrated balancing of the conflicting interests involved". Claims of unfair dismissal are determined by a tribunal188 which has the power to grant the remedies provided by statute. The test of unfairness has for some time been whether the dismissal is harsh, unjust or unreasonable. Since 2006189, the definition of dismissal in Commonwealth legislation has included the circumstance where a person is forced to resign from his or her employment because of conduct engaged in by the employer190. The current legislation places restrictions on when an employee can bring a claim of unfair dismissal where the termination of the employment was a case of "genuine redundancy" 191. One of the circumstances in which a claim might nevertheless be made is where the employee could have been reasonably redeployed192, which is the opportunity which the respondent says that he has lost in this case. 185 Brodie v Singleton Shire Council (2001) 206 CLR 512 at 532 [31]; [2001] HCA 29. 186 Industrial Relations Act 1988 (Cth), Pt VIA, Div 3, introduced by the Industrial Relations Reform Act 1993 (Cth), with effect from 30 March 1994. The relevant provisions are now contained in Pt 3-2 of the Fair Work Act 2009 (Cth). 187 (2002) 60 NSWLR 371 at 400 [154]. 188 Previously known as the Australian Industrial Relations Commission and Fair Work Australia; now the Fair Work Commission. 189 Workplace Relations Amendment (Work Choices) Act 2005 (Cth), Sched 1, item 105A. 190 See now Fair Work Act 2009, s 386(1)(b). 191 Fair Work Act 2009, s 385(d). 192 Fair Work Act 2009, s 389. In any event, the respondent is unable to make a statutory claim for unfair dismissal because, since 1994193, provisions respecting unfair dismissal have not applied to a termination of employment if an employee's wages exceed a certain amount, which the respondent's did194. Contrary to the respondent's contention, this does not create a gap which the common law can fill. In Johnson v Unisys, Lord Hoffmann noted195 that certain classes of employees were excluded from the protection of the legislation there in question. Yet, as his Lordship observed196, it was the evident intention of the Parliament that the statutory remedy provided be limited in its application. Likewise, the Australian Parliament has determined what remedies are to be provided for unfair dismissal and it has determined who may seek them. The area left for the operation of the term recognised in Malik is therefore with respect to "trust-destroying conduct" on the part of an employer which does not have the consequence of ending the employment relationship. The respondent suggests that a term by which damages are awarded for "trust- destroying conduct" would promote the maintenance of the employment relationship. The appellant submits to the contrary and that the effect of implying the term of trust and confidence is not likely to be the maintenance of employment relationships, but the greater likelihood of their termination. For instance, an employer, faced with the possibility of a claim for common law damages for wrongfully suspending an employee, or a claim for unfair dismissal for which compensation would be limited, may be inclined to choose dismissal. The term could also work against employers. In the later case of Eastwood v Magnox Electric plc197, Lord Nicholls observed that, because tribunals could not always provide full compensation for a dismissed employee's financial loss, employees and their legal advisors, understandably, were now seeking to side-step those limitations by identifying elements in the events preceding dismissal that could be used "as pegs on which to hang a common law claim". His Lordship considered that the situation merited legislative intervention. 193 Industrial Relations Amendment Act (No 2) 1994 (Cth), s 6. 194 See now Fair Work Act 2009, s 382(b)(iii). The threshold is determined in accordance with the Fair Work Regulations 2009 (Cth), reg 2.13. 195 Johnson v Unisys Ltd [2003] 1 AC 518 at 543 [52]. 196 Johnson v Unisys Ltd [2003] 1 AC 518 at 544 [58]. 197 [2005] 1 AC 503 at 529 [33]. No doubt because there was no issue in Malik about whether the term of trust and confidence was to be implied in the employment contracts there in question, discussions of policy were limited to the topic of damages. It may be accepted that policy initially favoured the use of the term of trust and confidence in the context of unfair dismissal claims where the legislation left a gap. However, the potential for the term to create anomalies suggests that the policy of the law is not an appropriate basis for the application of the term. The respondent places some store on the term achieving mutuality with the obligation of fidelity which the law imposes upon employees. It is pointed out that employers have the right to terminate the employment where an employee has acted dishonestly or against their interests, but an employee has no corresponding right. The analogy is not perfect, for the duty of trust and confidence as it applies to employees does not concern the standard of conduct sought to be applied to employers, which, in reality, involves notions of fairness. In any event, where an employer is dishonest in the conduct of its business, Malik confirms that an employee would have the same right to terminate the employment; but that right is based on the doctrine of constructive dismissal and does not depend on a term of trust and confidence. The appellant submits that the term is devoid of content and too uncertain to be applied generally. In support of this contention, it points to the fact that the majority in the Full Court did not explain how the obligation to attempt to redeploy the respondent could arise from the term of trust and confidence; rather, their Honours sourced it in the express terms of the Employment Agreement. It may be added that the majority in the Full Court did not apply the test of necessity in implying the term, for the reasons earlier explained. In its original context of unfair dismissal, the term of trust and confidence could be understood to refer to conduct on the part of the employer directed towards, or affecting, the employee, which might be expected to bring about the employee's resignation and therefore the destruction of the employment relationship. Taken out of that context and disconnected from the subsequent action of the employee in terminating the employment, the conduct effectively becomes anything that damages the employment relationship. The English cases referred to above198, which have applied the term of trust and confidence, have done so by reference to conduct which could be described as unfair towards the employee. It will be recalled that the conduct in question in those cases involved the wrongful suspension of an employee, an employer's improper conduct of disciplinary proceedings and discrimination as The respondent's written outline of submissions between employees. 198 Referred to at [81] above. acknowledges that unfairness would be a touchstone for breach of the term of trust and confidence. Fairness in dealings as between contracting parties may be understood as an aspect of a duty of good faith, which has been accepted in other legal systems and is wider than that of honesty. It has been observed199 that in some legal systems good faith is regarded as a vitally important ingredient for a modern general law of contract, and that this raises the question how other legal systems cope without it. Acceptance of a standard of good faith in all contractual relationships is not confined to civilian legal systems. In the United States, §205 of the Restatement of the Law Second, Contracts contains an obligation of good faith and fair dealing. Amongst the meanings of good faith identified by the Restatement is that of the Uniform Commercial Code as applied to merchant contracts ("honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade"), although it is recognised that its meaning varies somewhat with the context200. In any event, it is the view of some that good faith reflects a standard of conduct rather than operating as a fixed rule201. In 1766, Lord Mansfield considered that good faith was a governing principle applicable to all contracts and dealings202. Aspects of it may be evident in the duty of co-operation referred to in Mackay v Dick. However, in more recent times, English law has for the most part turned its face against the 199 Whittaker and Zimmermann, "Good faith in European contract law: surveying the legal landscape", in Zimmermann and Whittaker (eds), Good Faith in European Contract Law, (2000) 7 at 13. 200 American Law Institute, Restatement of the Law Second, Contracts, (1979), §205, 201 Lücke, "Good Faith and Contractual Performance", in Finn (ed), Essays on Contract, (1987) 155 at 166. 202 Carter v Boehm (1766) 3 Burr 1905 at 1910 [97 ER 1162 at 1164]. imposition of a general duty of good faith203, preferring the predictability of a legal outcome in a case to "absolute justice"204. The question whether a standard of good faith should be applied generally to contracts has not been resolved in Australia205. Neither that question, nor the questions whether such a standard could apply to particular categories of contract (such as employment contracts) or to the contract here in issue, were raised in argument in these proceedings. It is therefore neither necessary nor appropriate to discuss good faith further, particularly having regard to the wider importance of the topic. It is sufficient for present purposes to observe that the more specific requirement, deriving from notions of fairness, that an employer must attempt to redeploy an employee before terminating his or her employment does not arise from, and is not an incident of, the legal relationship between employer and employee. Contracts of employment are not rendered futile because of the absence of a term to this effect. To the contrary, it would not be possible for all employers to give effect to such a term. This tells against the application of such a requirement as a universal rule. It cannot be said to be "necessary" in the sense described earlier in these reasons. In summary, the Employment Agreement between the appellant and the respondent does not require for its efficacy the implication of the term of trust and confidence for which the respondent contends. That term is not necessary given the provisions of cl 8. More generally, contracts of employment do not require such an implication for their effective operation. It remains to add that, if such a term were sought to be implied into the Employment Agreement, the problem of inconsistency, to which Lord Hoffmann 203 The recent decision of Leggatt J in Yam Seng Pte Ltd v International Trade Corporation Ltd [2013] 1 All ER (Comm) 1321 at 1350-1353 [131]-[142] considers the possibility of implying a term of good faith, although arguably only in particular contracts and by a process of construction: see Mid Essex Hospital Services NHS Trust v Compass Group UK and Ireland Ltd (trading as Medirest) [2013] BLR 265 at 287 [150]. 204 Goode, "The Concept of 'Good Faith' in English Law", Paper delivered at Centro di studi e ricerche di diritto comparato e straniero, March 1992, referred to in Whittaker and Zimmermann, "Good faith in European contract law: surveying the legal landscape", in Zimmermann and Whittaker (eds), Good Faith in European Contract Law, (2000) 7 at 15. 205 Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 240 CLR 45 at 63 [40], 94 [156]; [2002] HCA 5. alluded in Johnson v Unisys, would arise. A general obligation of redeployment prior to termination, for breach of which damages would follow, contradicts the terms of cl 6, which permits the appellant to terminate the employment by giving four weeks' notice or payment in lieu of it. The fact that cl 8 contains a similar requirement in the case of redundancy does not prevent this inconsistency arising, although that latter clause does point to what might have been a basis for relief. Conclusion and orders The appeal should be allowed. The appellant concedes that the respondent is entitled to damages limited to four weeks' pay, following upon the finding by the primary judge of a breach of cl 6 of the Employment Agreement. Accordingly, paragraphs 1 and 2 of the orders of the Full Court of the Federal Court should be set aside (save as to costs), along with paragraphs 1 and 2 of the orders of the primary judge. In lieu of the orders set aside, there should be an order that judgment be entered for the respondent in the sum of $11,692.31 plus interest. 113 Contractual terms implied in fact are "individualised gap fillers, depending on the terms and circumstances of a particular contract". Contractual terms implied in law, of the kind in issue in the present case, are "in reality incidents attached to standardised contractual relationships" operating as "standardised default rules"206. The former are founded on what is "necessary" to give "efficacy" to the particular contract. The latter are founded on "more general considerations"207, which take into account "the inherent nature of [the] contract and of the relationship thereby established"208. Determination by a court of whether or not a new term should be implied in law into a particular class of contracts has often itself been described as involving the application of a "test" of "necessity". The sense in which "necessity" is used in this context is that of "something required in accordance with current standards of what ought to be the case, rather than anything more absolute"209. The requisite inquiry is informed by a consideration of what is needed for the effective working of contracts of that class210. But the inquiry is not exhausted by that consideration211; it does not exclude considerations of justice and policy212. Couching the ultimate evaluation in terms of necessity serves usefully to emphasise this and no more: that a court should not imply a new term other than by reference to considerations that are compelling. 206 University of Western Australia v Gray (2009) 179 FCR 346 at 375 [135] quoting Society of Lloyd's v Clementson [1995] CLC 117 at 131-132. 207 Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 345-346; [1982] HCA 24 quoting Lister v Romford Ice and Cold Storage Co Ltd [1957] AC 555 at 576 as endorsed in Liverpool City Council v Irwin [1977] AC 208 Liverpool City Council v Irwin [1977] AC 239 at 254. 209 Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234 at 261; Devefi Pty Ltd v Mateffy Pearl Nagy Pty Ltd (1993) 113 ALR 210 Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 450; [1995] HCA 24. 211 Castlemaine Tooheys Ltd v Carlton & United Breweries Ltd (1987) 10 NSWLR 212 Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151 at 194-197; University of Western Australia v Gray (2009) 179 FCR 346 at 377 The reasons for judgment of Jessup J in dissent in the Full Court of the Federal Court demonstrate that the term of mutual trust and confidence in contracts of employment, now implied in law in the United Kingdom, ought not to be imported into the common law of Australia. Without repeating the detail of his Honour's exhaustive analysis, the critical points highlighted by it can be summarised as follows. First, the emergence of the implied term in the 1970s and 1980s213, and then its confinement in 2001214, were the product of particular statutory circumstances in the United Kingdom215. Those statutory circumstances have no analogue in Australia216. The emergence of the implied term was not capable of being explained in the United Kingdom, and would not be capable of being explained here, merely as the mutualisation of the employee's duty of fidelity to the employer217 or as a principled development of the implied duty of co- operation between parties to a contract218. Second, framed as the implied term is in passive language, descriptive of the overall nature of the employment relationship, the prescriptive content of the implied term is not spelt out in its terms219. This inherent uncertainty about what the obligation imposed by the implied term actually requires of the employer and of the employee gives the implied term, as Jessup J put it, "the potential to act as a Trojan horse in the sense of revealing only after the event the specific prohibitions which it imports into the contract"220. The implied term has the 213 See Eastwood v Magnox Electric plc [2005] 1 AC 503 at 522 [4]-[7]. 214 Johnson v Unisys Ltd [2003] 1 AC 518. 215 Industrial Relations Act 1971 (UK); Pt X of the Employment Rights Act 1996 216 Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 at 484-495 [211]- 217 Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 at 515-518 [296]- 218 Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 at 518-522 [306]- 219 Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 at 522-527 [317]- 220 Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 at 531 [340]. potential in some circumstances to circumvent established limits of common law and equitable remedies for breach of more conventional terms221. Finally, but no less importantly, in its intersection with the law of unfair dismissal, the implied term would intrude a common law policy choice of broad and uncertain scope into an area of frequent, detailed and often contentious legislative activity222. Commonwealth and State unfair dismissal legislation has produced, and has over time reproduced and adjusted, "a particular and carefully calibrated balancing of the conflicting interests involved namely, between preserving the expectations of employees on the one hand and enabling employers to create jobs and wealth, on the other hand"223. Gleeson CJ observed224: "Legislation and the common law are not separate and independent sources of law; the one the concern of parliaments, and the other the concern of courts. They exist in a symbiotic relationship." Common law obligations in contract, like common law obligations in tort, ought not to be developed by courts other than in a manner that is sensitive to their As to whether a term of mutual trust and confidence can be implied in fact in the circumstances of the present case, and as to whether there was a breach by the employer of the implied duty of co-operation between parties to a contract, I agree with and have nothing to add to the joint reasons for judgment. I agree with the orders proposed in the joint reasons for judgment. 221 Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 at 527 [331]. See also McDonald v Parnell Laboratories (Aust) Pty Ltd (2007) 168 IR 375 at 399 222 Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 at 527-529 [332]- 223 State of New South Wales v Paige (2002) 60 NSWLR 371 at 400 [154]. 224 Brodie v Singleton Shire Council (2001) 206 CLR 512 at 532 [31]; [2001] HCA 29. 225 Sullivan v Moody (2001) 207 CLR 562 at 576 [42], 581 [55]; [2001] HCA 59. See also State of New South Wales v Paige (2002) 60 NSWLR 371 at 395 [132]; Russell v The Trustees of the Roman Catholic Church for the Archdiocese of Sydney (2008) 72 NSWLR 559 at 574-575 [63]-[64].

HIGH COURT OF AUSTRALIA Matter No S248/2015 BELL GROUP N.V. (IN LIQUIDATION) & ANOR PLAINTIFFS AND THE STATE OF WESTERN AUSTRALIA DEFENDANT Matter No P63/2015 W.A. GLENDINNING & ASSOCIATES PTY LTD PLAINTIFF AND THE STATE OF WESTERN AUSTRALIA DEFENDANT Matter No P4/2016 MARANOA TRANSPORT PTY LTD (IN LIQ) & ORS PLAINTIFFS AND STATE OF WESTERN AUSTRALIA & ORS DEFENDANTS Bell Group N.V. (in liquidation) v Western Australia W.A. Glendinning & Associates Pty Ltd v Western Australia Maranoa Transport Pty Ltd (in liq) v Western Australia [2016] HCA 21 16 May 2016 S248/2015, P63/2015 & P4/2016 ORDER Matter No S248/2015 The questions stated by the parties in the amended special case dated 29 February 2016 and referred for consideration by the Full Court be answered as follows: Question 1 Do the plaintiffs have standing to seek relief in respect of the alleged invalidity of Parts 3 and 4 of the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA) on the grounds alleged in paragraph 56 of the statement of claim? Answer Yes. Question 1A Does any justiciable controversy arise in respect of the alleged invalidity of Parts 3 and 4 of the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA) on the grounds alleged in paragraphs 56.1 and 56.2 of the statement of claim insofar as the grounds rely on former s 215 of the [Income Tax Assessment Act 1936 (Cth)] (and alternatively, s 260-45 of Schedule 1 to the [Taxation Administration Act 1953 (Cth))]? Answer Yes. Question 2 Is the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA) invalid in its entirety? Answer Yes. Question 3 If the answer to question 2 is "no", are any of the provisions of Parts 3 and 4 and any of ss 48, 54, 55, 56, 58 and 69 to 74 of the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA) invalid (and, if so, to what extent)? Answer Unnecessary to answer. Question 4 If the answer to question 3 is yes is the invalid provision severable from the rest of the Act (and, if so, to what extent)? Answer Unnecessary to answer. Question 5 Who should pay the costs of the special case? Answer The defendant. Matter No P63/2015 The questions stated by the parties in the amended special case dated 26 February 2016 and referred for consideration by the Full Court be answered as follows: Question 1 Do the plaintiffs have standing to seek relief in respect of the alleged invalidity of Parts 3 and 4 [of] the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA) (Bell Act) on the grounds alleged in paragraphs 56 to 58 of the statement of claim? Answer Yes. Question 2 Does any justiciable controversy arise in respect of the alleged invalidity of Parts 3 and 4 of the Bell Act on the grounds alleged in paragraphs 56.1 and 56.2 of the statement of claim insofar as the grounds rely upon s 215 of the [Income Tax Assessment Act 1936 (Cth)] (alternatively, s 260-45 of Schedule 1 to the [Taxation Administration Act 1953 (Cth)])? Answer Yes. Question 3 Are any of the provisions of Parts 3 and 4 and any of ss 51, 52 and 73 of the Bell Act invalid (and, if so, which and to what extent): by the operation of s 109 of the Commonwealth Constitution by reason of: inconsistency between that provision (as a law of the State of Western Australia) and: the Income Tax Assessment Act 1936 (Cth), the Income Tax Assessment Act 1997 (Cth) or the Taxation Administration Act 1953 (Cth), on the grounds alleged in paragraph 56 to 58 of the statement of claim; further or alternatively the Corporations Act 2001 (Cth), on the grounds alleged in paragraphs 72 to 88 of the statement of claim; further or alternatively s 39(2) of the Judiciary Act 1903 (Cth), on the grounds alleged in paragraphs 59 to 68 of the statement of claim?; further or alternatively because it infringes Chapter III of the Constitution, on the grounds alleged in paragraphs 59 to 68 of the statement of claim? Answer (a)(i)(1) Yes. The Bell Act is invalid in its entirety. (a)(i)(2) Unnecessary to answer. (a)(i)(3) Unnecessary to answer. Unnecessary to answer. Question 4 If any provisions of the Bell Act are invalid, are they severable from the rest of the Act (and, if so, to what extent); or is the Bell Act invalid in its entirety? Answer The Bell Act is invalid in its entirety. Question 5 Is the Bell Act invalid in its entirety because it infringes Chapter III of the Constitution on the grounds alleged in paragraphs 69 and 71 of the Statement of Claim? Answer Unnecessary to answer. Question 6 Who should pay the costs of the special case? Answer The defendant. Matter No P4/2016 The questions stated by the parties in the amended special case dated 26 February 2016 and referred for consideration by the Full Court be answered as follows: Question 1 Do the Plaintiffs have standing to seek relief in respect of the alleged invalidity of Parts 3 and 4 of the [Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA) ("the Bell Act")] on the grounds alleged in: paragraph 56.1 of the [statement of claim], insofar as the grounds rely upon ss 215 of the [Income Tax Assessment Act 1936 (Cth)] (alternatively, s 260-45 of Schedule 1 the [Taxation Administration Act 1953 (Cth)]) and 254(1)(h) of the [Income Tax Assessment Act 1936 (Cth)]; and paragraphs 56.2, 56.3 and 56.4 of the [statement of claim]? Answer Yes. Yes. Question 2 Does any justiciable controversy arise in respect of the alleged invalidity of Parts 3 and 4 of the Bell Act on the grounds alleged in paragraphs 56.1 and 56.2 of the [statement of claim] insofar as the grounds rely upon s 215 of the [Income Tax Assessment Act 1936 (Cth)] (alternatively, s 260-45 of Schedule 1 to the [Taxation Administration Act 1953 (Cth)]) and s 254(1)(h) of the [Income Tax Assessment Act 1936 (Cth)]? Answer Yes. Question 3 Are any of ss 9, 10, 22, 25, 27, 28, 29, 30, 33, 35, 37, 38, 39, 40, 41, 42, 43, 44, 45, 47, 54, 55, 56, 68, 69, 71, 72 or 73 of the Bell Act invalid, and, if so, which and to what extent, by the operation of s 109 of the Commonwealth Constitution by reason of inconsistency between that provision (as a law of the State of Western Australia) and: the Income Tax Assessment Act 1936 (Cth), the Income Tax Assessment Act 1997 (Cth) or the Taxation Administration Act 1953 (Cth), on the grounds alleged in paragraphs 40 to 56 and 91A of the statement of claim; further or alternatively: the Corporations Act 2001 (Cth), on the grounds alleged in paragraphs 59 to 91 and 91B of the statement of claim? Answer Yes. The Bell Act is invalid in its entirety. (b) Unnecessary to answer. Question 4 If any provisions of the Bell Act are invalid, are they severable from the rest of the Act (and, if so, to what extent); or is the Bell Act invalid in its entirety? Answer The Bell Act is invalid in its entirety. Question 5 Who should pay the costs of the special case? Answer The first defendant. Representation B W Walker SC with A A D'Arcy for the plaintiffs in S248/2015 S Penglis with A K Sharpe and B C Gauntlett for the plaintiff in P63/2015 (instructed by DLA Piper Australia) C G Colvin SC with J C Vaughan SC and P A Walker for the plaintiffs in G R Donaldson SC, Solicitor-General for the State of Western Australia with A J Sefton and R Young for the defendant in S248/2015 and P63/2015 and the first defendant in P4/2016 (instructed by State Solicitor (WA)) Submitting appearance for the second defendants in P4/2016 Interveners J T Gleeson SC, Solicitor-General of the Commonwealth with J A Watson, the M J O'Meara and Z C Heger for Commonwealth and the Commissioner of Taxation, both intervening (instructed by Australian Government Solicitor) the Attorney-General of M G Sexton SC, Solicitor-General for the State of New South Wales with S Robertson for the Attorney-General for the State of New South Wales, intervening (instructed by Crown Solicitor (NSW)) M G Hinton QC, Solicitor-General for the State of South Australia with D F O'Leary for the Attorney-General for the State of South Australia, intervening (instructed by Crown Solicitor (SA)) P J Dunning QC, Solicitor-General of the State of Queensland with the State of Queensland, the Attorney-General of A D Keyes for intervening (instructed by Crown Law (Qld)) M E O'Farrell SC, Solicitor-General of the State of Tasmania with S K Kay for the Attorney-General of the State of Tasmania, intervening (instructed by Crown Law (Tas)) R M Niall QC, Solicitor-General for the State of Victoria with K E Foley for the Attorney-General for the State of Victoria, intervening (instructed by Victorian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Bell Group N.V. (in liquidation) v Western Australia W.A. Glendinning & Associates Pty Ltd v Western Australia Maranoa Transport Pty Ltd (in liq) v Western Australia Constitutional law – Inconsistency between Commonwealth and State laws – Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA) – Where rights and obligations arose and had accrued to Commonwealth under Commonwealth law prior to commencement of State law – Where State law purports to create scheme under which Commonwealth tax debts stripped of characteristics ascribed to them by Income Tax Assessment Act 1936 (Cth) and Taxation Administration Act 1953 (Cth) – Whether State law invalid by reason of s 109 of Constitution – Whether State law alters, impairs or detracts from operation of Commonwealth law – Whether provisions can be read down or severed – Whether State law invalid in its entirety. Constitutional law – Standing – Where Attorney-General of Commonwealth intervened generally in support of plaintiffs – Whether plaintiffs have standing in their own right to challenge validity of State law. Words and phrases – "accrued rights", "alter, impair or detract from", "inconsistency", "justiciable controversy", "reading down", "severance", "standing". Constitution, s 109. Income Tax Assessment Act 1936 (Cth), ss 177, 208, 209, 215, 254. Taxation Administration Act 1953 (Cth), Sched 1, ss 255-5, 260-45, 350-10(1). Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA). FRENCH CJ, KIEFEL, BELL, KEANE, NETTLE AND GORDON JJ. In November 2015, the Parliament of Western Australia enacted the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA) ("the Bell Act")1 – an "Act to provide a legislative framework for the dissolution, and administration of the property, of The Bell Group Ltd ACN 008 666 993 (In Liquidation) and certain of its subsidiaries and for related purposes"2 – to deal with a list of companies, each defined in the Bell Act as a "WA Bell Company"3. When the Bell Act was enacted, each WA Bell Company was in liquidation or deregistered. None of the windings up of the companies in liquidation had concluded prior to 27 November 2015, which was the "transfer day" under the Bell Act4. There are three proceedings before the Court – S248 of 2015 ("the BGNV Proceeding"), P63 of 2015 ("the WA Glendinning Proceeding") and P4 of 2016 ("the Maranoa Transport Proceeding"). The State of Western Australia is a defendant in each proceeding. In each proceeding, the parties stated a special case and questions of law arising for the opinion of the Full Court under r 27.08.1 of the High Court Rules 2004 (Cth). The questions of law include whether the Bell Act or certain provisions of the Bell Act are invalid by the operation of s 109 of the Constitution because of inconsistency with one or more provisions of the Income Tax Assessment Act 1936 (Cth) ("the 1936 Act") and the Taxation Administration Act 1953 (Cth) ("the TAA") (collectively, "the Tax Acts"), the Corporations Act 2001 (Cth) ("the Corporations Act"), and s 39(2) of the Judiciary Act 1903 (Cth) ("the Judiciary Act"). The plaintiffs in the BGNV Proceeding and the 1 The Bell Act received the Royal Assent on 26 November 2015. The Bell Act was amended by the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Amendment Act 2016 (WA) ("the Amending Act"). The Amending Act received the Royal Assent on the evening of 5 April 2016 – the first day of the hearings before this Court. 2 Long title. s 3(1), Sched 1 to the Bell Act. 4 Section 3(1) of the Bell Act defines "transfer day" to mean "the day on which Part 3 [of the Bell Act] comes into operation", which was on the day after the Bell Act received the Royal Assent: s 2(1)(d) of the Bell Act. Bell Nettle Gordon WA Glendinning Proceeding also contended that provisions of the Bell Act are invalid because they infringe Ch III of the Constitution. Interveners The Commissioner of Taxation ("the Commissioner") sought, and was granted, leave to intervene in each proceeding in relation to the question of inconsistency between the Bell Act and the Tax Acts. The Attorney-General of the Commonwealth intervened pursuant to s 78A of the Judiciary Act in each proceeding. inconsistency between The Solicitor-General of the Commonwealth appeared for both the Commissioner and the Attorney-General of the Commonwealth in relation to the question of the Tax Acts. The Attorney-General of the Commonwealth also made submissions in respect of three other issues – aspects of the proper construction of ss 5F and 5G of the Corporations Act; whether the Bell Act is inconsistent with s 39(2) of the Judiciary Act within the meaning of s 109 of the Constitution; and whether the Bell Act infringes Ch III of the Constitution. the Bell Act and Each of the Attorneys-General of intervened. Each intervening State addressed the question of the proper construction of ss 5F and 5G of the Corporations Act. South Australia, Queensland and Victoria also addressed whether the Bell Act is inconsistent with s 39(2) of the Judiciary Act within the meaning of s 109 of the Constitution and whether the Bell Act infringes Ch III of the Constitution. the other States Standing In each proceeding, the State of Western Australia initially contested the standing of the plaintiffs to challenge the validity of the Bell Act in relation to inconsistencies with the Tax Acts. However, when the Attorney-General of the Commonwealth intervened and adopted the proposed submissions of the Commissioner, generally in support of the plaintiffs, that issue fell away5. It should nevertheless be observed that the plaintiffs have standing in their own right to challenge the validity of the Bell Act. That is because, like the 5 See Williams v The Commonwealth (2012) 248 CLR 156 at 181 [9], 223-224 [112], 240 [168], 341 [475], 361 [557]; [2012] HCA 23. Bell Nettle Gordon Commissioner, they have an interest in the due administration of the liquidation of debtor companies – an interest which is sufficient to seek the assistance of the Court to ensure that the company's assets are dealt with in accordance with the law governing the winding up6. Once the plaintiffs' interest is correctly identified it will be understood that the central theme of Western Australia's argument, that the enactment of the Bell Act might not mean that the plaintiffs (and the Commissioner) will receive less than they would in a winding up, and that they will therefore not be adversely affected by it, misses the point. The Bell Act is invalid For the reasons which follow, it should be concluded that the Bell Act is invalid in its entirety by the operation of s 109 of the Constitution because of inconsistency between provisions of the Bell Act and provisions of the Tax Acts. The Bell Act purports to create a scheme under which Commonwealth tax debts are stripped of the characteristics ascribed to them by the Tax Acts as to their existence, their quantification, their enforceability and their recovery. The rights and obligations which arose and had accrued to the Commonwealth as a creditor of the WA Bell Companies in liquidation, and to the Commissioner, under a law of the Commonwealth prior to the commencement of the Bell Act are altered, impaired or detracted from by the Bell Act. Facts Relevant entities BGNV The first plaintiff in the BGNV Proceeding, Bell Group NV (in liq) ("BGNV"), is a company formed or incorporated in the Netherlands Antilles. It was registered as a foreign company in each jurisdiction in Australia under s 344 of the Corporations Law on 4 April 1996. In 1995, Troika Holding BV was appointed BGNV's liquidator in the Netherlands Antilles. On 19 July 1996, the second plaintiff in the BGNV Proceeding ("Mr Trevor") was appointed the liquidator of BGNV in Western Australia by order of the Supreme Court of 6 Commissioner of Stamp Duties (Q) v Livingston (1964) 112 CLR 12 at 22-23; [1965] AC 694 at 712-713; Federal Commissioner of Taxation v Linter Textiles Australia Ltd (In liq) (2005) 220 CLR 592 at 606-607 [31], 612-613 [54]; [2005] HCA 20. Bell Nettle Gordon Western Australia to assist the insolvency administration of BGNV in the Netherlands Antilles. On 26 March 1997, the Supreme Court of Western Australia ordered that BGNV be wound up by the Court in insolvency under the Corporations Law and that Mr Trevor be appointed as ancillary liquidator of BGNV in Australia for the purpose of its winding up. The winding up of BGNV has not concluded. TBGL and its subsidiaries The Bell Group Limited (in liq) ("TBGL") is the holding company of a group of companies known as "the Bell Group". TBGL's wholly owned subsidiaries include BGNV, Bell Group Finance Pty Ltd (in liq) ("BGF") (which acted as the treasury entity for the Bell Group) and Maranoa Transport Pty Ltd the Maranoa Transport Proceeding. liq) ("Maranoa Transport"), the plaintiff Mr Woodings is the liquidator (or provisional liquidator) of a number of companies in the Bell Group. The companies relevantly fall into two groups – the WA Bell Companies7 and those companies8 that are not WA Bell Companies. Immediately prior to the commencement of the Corporations Act, each WA Bell Company was registered and incorporated in Western Australia under Western Australian law. After the commencement of the Corporations Act, each WA Bell Company was taken, by operation of s 1378 of that Act, to be registered in Western Australia and incorporated in Australia. Under the Bell Act as amended, a reference to a "WA Bell Company" includes Maranoa Transport9, even though 7 Albany Broadcasters Ltd (in liq), Ambassador Nominees Pty Ltd (in liq), Belcap Enterprises Pty Ltd (in liq), Bell Bros Holdings Ltd (in liq), Bell Bros Pty Ltd (in liq), Bell Equity Management Ltd (in liq), BGF, Bell Publishing Group Pty Ltd (in liq), Dolfinne Pty Ltd (in liq), Dolfinne Securities Pty Ltd (in liq), Harlesden Finance Pty Ltd (in liq), Industrial Securities Pty Ltd (in liq), Maranoa Transport, Neoma Investments Pty Ltd (in liq), TBGL, TBGL Enterprises Ltd (in liq), Wanstead Pty Ltd (in liq), Wanstead Securities Pty Ltd (in liq), WAON Investments Pty Ltd (in liq), Wigmores Tractors Pty Ltd (in liq). 8 Great Western Transport Pty Ltd (in liq), Maradolf Ltd (in liq), W&J Investments Pty Ltd (in liq), Western Interstate Pty Ltd (Provisional Liquidator Appointed), Western Transport Pty Ltd (in liq). s 3(5) of the Bell Act, inserted by s 4(2) of the Amending Act. Bell Nettle Gordon that company was not taken to be registered in Western Australia, but in Queensland. As seen earlier, none of the windings up of the companies in liquidation had concluded prior to 27 November 2015, which was the "transfer day" under the Bell Act. Creditors of the Bell Group companies BGNV is an ordinary, unsecured creditor of TBGL and BGF with an admitted proof of debt in the windings up of TBGL and BGF of $69,334,059 and $394,809,067.88 respectively. WA Glendinning & Associates Pty Ltd ("WA Glendinning"), the plaintiff in the WA Glendinning Proceeding, is an ordinary, unsecured creditor of BGF with an admitted proof of debt in the winding up of BGF of $183,297,347.04. The Commonwealth is also a creditor. It has lodged proofs of debt (or amended proofs of debt) for unpaid tax liabilities totalling $167,648,203.86 in the windings up of 10 WA Bell Companies. The proofs are largely in respect of assessments for income tax for income years prior to the commencement of the late payment winding up of ("the pre-liquidation assessments"). The proofs have either been admitted or not been determined. that company and additional tax for On 5 August 2015, TBGL notified the Commissioner under Pt 3-90 of the Income Tax Assessment Act 1997 (Cth) that it had formed an income tax consolidated group with effect from 1 July 2002, and that, as at the date of the notification, certain Bell Group companies10 were subsidiary members of the consolidated group. In August 2015, the Commissioner issued further income tax assessments to TBGL and the remaining WA Bell Companies in liquidation not forming part 10 Albany Broadcasters Ltd (in liq), Ambassador Nominees Pty Ltd (in liq), Belcap Enterprises Pty Ltd (in liq), Bell Equity Management Ltd (in liq), BGF, Bell Publishing Group Pty Ltd (in liq), Dolfinne Pty Ltd (in liq), Great Western Transport Pty Ltd (in liq), Harlesden Finance Pty Ltd (in liq), Maradolf Ltd (in liq), Maranoa Transport, TBGL Enterprises Ltd (in liq), W&J Investments Pty Ltd (in liq). Bell Nettle Gordon of the consolidated group11 in respect of taxation liabilities incurred after liquidation (from activities during the liquidation process) ("the post-liquidation assessments"). An income tax assessment was also issued to Mr Woodings in his capacity as liquidator of TBGL. The total amount of the post-liquidation the assessments Commissioner prior to the enactment of the Bell Act and prior to the "transfer day" under the Bell Act. Each assessment was issued by Other known creditors of TBGL have claimed debts totalling in excess of $1.02 billion. The amount owed to other known creditors of BGF is estimated to exceed $1.6 billion. The other known creditors of 14 other WA Bell Companies have claimed debts from those companies of more than $1.41 billion. The Bell Act The Bell Act received the Royal Assent on 26 November 2015. Part 1 of the Bell Act came into operation on that day12. Sections 54 to 56 of the Bell Act (dealing with offences) are deemed to have come into operation at 12 noon on 5 May 201513. The rest of the Act, other than s 47, came into operation on 27 November 201514, the transfer day. The Bell Act does not operate retrospectively, except for ss 54 to 56. The following references are to the Bell Act as amended by the Amending Act15. 11 Bell Bros Holdings Ltd (in liq), Bell Bros Pty Ltd (in liq), Dolfinne Securities Pty Ltd (in liq), Industrial Securities Pty Ltd (in liq), Neoma Investments Pty Ltd (in liq), Wanstead Pty Ltd (in liq), Wanstead Securities Pty Ltd (in liq), WAON Investments Pty Ltd (in liq), Wigmores Tractors Pty Ltd (in liq). 12 s 2(1)(a) of the Bell Act. 13 Being the day before the Bill for the Bell Act was introduced into the Western Australian Legislative Assembly. See s 2(1)(c) and (2) of the Bell Act. 14 s 2(1)(b) and (d) of the Bell Act. 15 Section 2(b) of the Amending Act provides that certain provisions of the Amending Act are deemed to come into operation on the transfer day. Bell Nettle Gordon The objects of the Bell Act are set out in s 4: to provide a mechanism, that avoids litigation, for the distribution of funds (the Bell litigation funds) received by the liquidator of TBGL and certain of its subsidiaries (the Bell group of companies) as a consequence of the Bell litigation[16] and the settlement of it in to provide a form of external administration of WA Bell Companies and require that it be carried out only in accordance with the provisions of this Act; to provide appropriate compensation to the creditors who funded the Bell litigation taking into account the funding provided and the associated risks assumed by them; to reflect the circumstance that without the funding mentioned in paragraph (c), the Bell litigation funds would not exist and the creditors of the Bell group of companies would have received no (or only nominal) dividends in the liquidation of those companies; to make reasonable provision for the distribution of the property of the WA Bell Companies having regard to the uncertainties existing as to the nature and extent of that property; to make reasonable provision for the satisfaction of liabilities owed to creditors having regard to the uncertainties existing as to the nature and extent of those liabilities; to distribute the Bell litigation funds generally in accordance with the commercial substance of the agreements between the liquidator and the creditors who funded the Bell litigation, as made before the enactment of this Act; 16 The "Bell litigation" means the litigation listed in Sched 2 to the Bell Act: s 3(1). More than 20 proceedings are listed, divided into three groups – the "Main proceedings", related foreign proceedings and related Supreme Court of Western Australia proceedings. Bell Nettle Gordon to avoid further litigation that will waste the resources of the State and other persons and consume the Bell litigation funds." The Authority and the Fund The WA Bell Companies Administrator Authority ("the Authority") and the WA Bell Companies Administrator Authority Fund ("the Fund") established by the Bell Act are essential to the scheme of the Bell Act. Section 7 of the Bell Act establishes the Authority as a body corporate17 with the "status, immunities and privileges of the State"18, to be governed by the "Administrator"19. The functions of the Authority include "to collect, and realise or otherwise deal with, the property of the WA Bell Companies in accordance with the objects of [the Bell Act]"; "to administer each WA Bell Company until it is dissolved"; "to administer, invest and manage the Fund"; and "to perform any other functions that are conferred on it by [the Bell Act]"20. Section 27(1) of the Bell Act provides that the Authority is "the administrator" of each WA Bell Company. While a WA Bell Company is under the administration of the Authority, the Authority has control of the WA Bell Company's property and affairs, with power, amongst other things, to manage that property and those affairs and dispose of any of that property21. While a company is under the administration of the Authority, no person, other than the Authority, can perform or exercise, or purport to perform or exercise, a function or power as an officer of the company (including as liquidator) without the Authority's written approval, unless the performance or exercise of the function or power is in the exercise of a power or duty under the 17 s 7(1) and (2) of the Bell Act. 18 s 7(6) of the Bell Act. 19 s 7(5) of the Bell Act. The Administrator is appointed under s 8 of the Bell Act. 20 s 9(1) of the Bell Act. 21 s 28 of the Bell Act. Bell Nettle Gordon Bell Act22. However, the Bell Act further provides that this restriction does not remove a director or the liquidator of a WA Bell Company from his or her office23. The Fund is established under the Bell Act and is to be administered by the Authority24. The following must be credited to the Fund25: all money transferred to the Authority under Part 3 or realised out of other property transferred to, or vested in, the Authority under that Part; (b) money received from the investment of the Fund; any advances made Management Act 2006 section 28." the Authority under the Financial The amounts to be paid out of the Fund are listed in s 16(4) of the Bell Act and include, among other things, any payment determined by the Governor under s 44 of the Bell Act. It will be necessary to return to consider s 44. Part 3 – WA Bell Companies Part 3 of the Bell Act is also essential to the scheme created by the Bell Act and ss 22 and 25 in that Part are critical. Section 22, entitled "Transfer of property", relevantly provides: "(1) At the beginning of the transfer day the following are transferred to, and vested in, the Authority by force of this section — all property vested in a WA Bell Company, including property held by it on trust for any person; 22 s 29(1) and (2) of the Bell Act. 23 s 29(3) of the Bell Act. 24 s 16(1) and (2) of the Bell Act. 25 s 16(3) of the Bell Act. Bell Nettle Gordon all property held by any person (including a liquidator of a WA Bell Company) on behalf of or on trust for a WA Bell Company; all property held (in any capacity) by a person who is a liquidator of a WA Bell Company on trust for any person, other than property held in a capacity that does not relate to the liquidation of a WA Bell Company. Property received by a WA Bell Company or another person, on or after the transfer day, that would have been transferred to, and vested in, the Authority by subsection (1) were it vested or held by the company or person as described in subsection (1) before the transfer day, is transferred to, and vested in, the Authority by force of this section, at the time at which it is received. In relation to a reinstated WA Bell Company, property revested in the company as a consequence of its reinstatement is taken to have been received by the company for the purposes of subsection (2). Subsection (1) or (2), whichever is relevant, does not apply to a share in a company that was a subsidiary of TBGL — immediately before the transfer day; or if the company was deregistered before the transfer day — immediately before the time at which the company was deregistered. (5) A share to which subsection (1) or (2) would have applied but for subsection (4), is transferred to, and vested in, the Authority by force of this section immediately before the earlier of — the day specified by the Authority, by instrument published in the Gazette, for the purposes of this paragraph; and the day on which the WA Bell Company is dissolved under section 30. To the extent to which a right to make a taxation objection, or a right or capacity to seek the review of, or to appeal against, a decision of the Commissioner in relation to a taxation objection, Bell Nettle Gordon is property of a WA Bell Company, subsection (1) or (2), whichever is relevant, does not apply to the right or capacity. (7) Words and expressions used in subsection (6) and also in [the TAA] Part IVC have the same meanings in that subsection as they have in that Part. This section applies to property whether situated in or outside the State. (9) A transfer takes effect despite any restriction arising under contract, written law, the common law or in any other way. (10) All property transferred to the Authority under this section vests absolutely in the Authority freed from any encumbrance, trust, equity or interest (of any kind and however arising) to which it was subject immediately before so vesting. (11) The Authority has all the powers of an owner over property vested in it under this section. …" (emphasis in sub-s (1) added) Some aspects of s 22 and its interaction with other sections of the Bell Act should be noted. The Authority has "all the powers of an owner over property vested in it" under s 2226. The Minister and the Authority "are each empowered and required to take all practicable steps" to secure the transfer and vesting of property under s 22 "[i]f a transfer and vesting of property under section 22 is not, to any extent, fully effective (whether because a matter is governed by a law other than the law of [Western Australia], or for any other reason)"27 (emphasis added). There are two exceptions in s 22 to property of the WA Bell Companies being transferred to, and vested absolutely in, the Authority on the transfer day: first, a right of a WA Bell Company to make a taxation objection or a right or 26 s 22(11) of the Bell Act. 27 s 24 of the Bell Act. Bell Nettle Gordon capacity of the company to seek the review of, or to appeal against, a decision of the Commissioner in relation to a taxation objection28; second, a share in a company that was a subsidiary of TBGL either immediately before the transfer day or, if the company was deregistered before the transfer day, immediately before the time at which the company was deregistered29. Any such share under the second exception is transferred to and vests in the Authority immediately before the earlier of the day specified by the Authority or the day on which the WA Bell Company is dissolved30. Section 25 deals with the "[t]reatment of liabilities" of WA Bell Companies. Section 25(1) provides that: "If, immediately before the transfer day, a liability of a WA Bell Company was admissible to proof against the company in the winding up of the company, that liability may be proved in accordance with Part 4 Division 2 of [the Bell Act]." Section 25(3) provides that "[t]he liabilities may be proved by the liquidator (or by a creditor of a WA Bell Company or the liquidator if they have not been paid or satisfied) in accordance with Part 4 Division 2" (emphasis added). "[C]reditor", in relation to a WA Bell Company, is defined to mean "a person in relation to whom, immediately before the transfer day, the WA Bell Company had a liability and includes a beneficiary of any trust of, or with respect to, a liability"31. As is apparent, it extends to include secured creditors as well as a beneficiary who would not be a creditor under the Corporations Act. Section 25(4) provides that "[i]f, by section 22, property is freed from an encumbrance, trust, equity or interest on being transferred to, and vested in, the Authority, that encumbrance, trust, equity or interest may be proved as a liability in accordance with Part 4 Division 2." Section 25(5) provides that: 28 s 22(6) and (7) of the Bell Act. 29 s 22(4) of the Bell Act. 30 s 22(5) of the Bell Act. 31 s 3(1) of the Bell Act. Bell Nettle Gordon "No action, claim or proceeding of any nature arising out of, or relating to, a liability that may be proved in accordance with Part 4 Division 2 may, otherwise than in accordance with that Part, be made or maintained against — the Authority; or the Fund; or a WA Bell Company; or a liquidator of a WA Bell Company; or the Administrator; or the State." Part 4 – "Completion of winding up of WA Bell Companies" Part 4 of the Bell Act is also essential to the scheme created by the Bell Act. It is headed "Completion of winding up of WA Bell Companies", but the heading is misleading. The Part does not provide for completion of the winding up of WA Bell Companies. Rather, it provides for the termination of the winding up of the WA Bell Companies that is provided for under the Corporations Act, and, among other effects on creditors, the purported annihilation of the rights of the Commonwealth as a creditor of certain WA Bell Companies to a pro-rata distribution of any surplus in a winding up under subdiv D of Div 6 of Pt 5.6 of the Corporations Act. Division 2 of Pt 4 contains two sections, ss 33 and 34. They identify how the liability of a WA Bell Company may be asserted and brought to the attention of the Authority. The methods in ss 33 and 34 of the Bell Act are the only methods by which a liability may be "proved" for the purposes of s 25 of the Bell Act32. 32 See [34]-[36] above. Bell Nettle Gordon (a) Determinations and recommendations by the Authority Division 3 of Pt 4, among other things, deals with recommendations by the Authority to the Minister with respect to "liabilities". Under s 37, the Authority must determine, and has an absolute discretion in determining, the property and liabilities of each WA Bell Company33, and in doing so must have regard to specified matters and any other matters that the Authority in its discretion considers appropriate34. The rules of natural justice, including any duty of procedural fairness, do not apply to the Authority or to the Administrator in discharging functions under Pts 3 or 4 of the Bell Act35. The Authority must report to the Minister on the property and liabilities of each WA Bell Company as finally determined by the Authority under s 3736. The report must contain the recommendation of the Authority37, to the Minister, made under s 39 of38: "the amount (if any) to be paid to a person, or the property (if any) to be transferred to or vested in a person (instead of or in addition to the payment of money), in respect of the aggregate of all liabilities of all WA Bell Companies to that person as a creditor." (emphasis added) The recommendation need not contain reasons39. The Authority has an absolute discretion as to the quantification of any liability; as to the amount recommended to be paid to a person or the property recommended to be transferred to, or vested in, a person; and as to the priority to 33 ss 35 and 37(1) and (3) of the Bell Act. 34 s 37(2) of the Bell Act. 35 s 74(3)(c) and (d) of the Bell Act. 36 s 38(1) of the Bell Act. 37 s 38(2) of the Bell Act. 38 s 39(1) of the Bell Act. 39 s 39(5) of the Bell Act. Bell Nettle Gordon give to that payment, transfer or vesting40. The Authority also has absolute privilege in making that recommendation and in relation to any fact or matter In making a recommendation, the Authority must have regard to, among other things, the objects of the Bell Act and any agreement between any of the creditors as to the distribution of the proceeds of the Bell litigation entered into after 12 noon on 5 May 201542. In addition, the Authority may have regard to, among other things, the Authority's assessment of the value of unliquidated liabilities; the relative importance of the satisfaction of a liability to a creditor; the detriment to a creditor of not receiving payment of any liability in full; and any amount paid by a creditor for the acquisition of, or of any interest in, a liability43. But, subject to those considerations, the Authority retains absolute discretion. Two other aspects of s 39 should be noted. First, nothing in s 39 requires that "the aggregate value of all money recommended to be paid, and all property recommended to be transferred or vested, under this section must be equal to the value of the money or property held by the Authority or the total liabilities of all WA Bell Companies as determined under section 37"44. Any surplus vests in the State of Western Australia45. Second, nothing in s 39 "creates any right in, or for the benefit of, a creditor of a WA Bell Company or any other person"46. 40 s 39(6) of the Bell Act. 41 s 39(9) of the Bell Act. 42 s 39(2)(a) and (b) of the Bell Act. 43 s 39(2)(e) of the Bell Act. 44 s 39(7) of the Bell Act. 45 ss 46(2) and 48 of the Bell Act. 46 s 39(8) of the Bell Act. Bell Nettle Gordon The Governor's determination Division 4 of Pt 4 deals with the Governor's determination. The Minister must submit the report of the Authority under s 38(1) of the Bell Act to the Governor47. The Governor may determine an amount to be paid to, or property to be transferred to or vested in, a person48. The Governor's determination need not contain reasons49. The Governor is not required "to determine that any amount is to be paid to, or any property is to be transferred to or vested in, any person on any account whatsoever"50 (emphasis added). The Governor has absolute privilege in making a determination and in relation to any fact or matter stated in a determination51. The rules of natural justice do not apply52. The Governor is not required to perform a function, or exercise a power, in a particular way in any The Bell Act also expressly provides that nothing in Div 4 of Pt 454 "creates any right in, or for the benefit of, a creditor of a WA Bell Company or any other person"55; and, further, that, on the Governor making the determination, "every liability of every WA Bell Company to a person to whom nothing is to be paid and to whom no property is to be transferred and in whom no property is to 47 s 42(1) of the Bell Act. 48 s 42(2) of the Bell Act. 49 s 43(4) of the Bell Act. 50 s 43(1) of the Bell Act. 51 s 43(7) of the Bell Act. 52 s 74(3)(a) of the Bell Act. 53 s 74(2) of the Bell Act. 54 ss 41-43 of the Bell Act, which deal with the Governor's determination. 55 s 43(6) of the Bell Act. Bell Nettle Gordon be vested under a determination under [Div 4 of Pt 4] is, by force of this Act, discharged and extinguished"56 (emphasis added). Additionally, as seen earlier in relation to the Authority making a recommendation under s 39, the Bell Act does not require "that the aggregate value of all money determined by the Governor to be paid, and all property determined by the Governor to be transferred or vested, under [Div 4 of Pt 4] must be equal to the value of the money or property held by the Authority or the total liabilities of all WA Bell Companies as determined under section 37"57. The surplus simply goes to the State of Western Australia58. Section 44 of the Bell Act contains provisions which purport to give effect to the Governor's determination. Section 44(3) provides that a person is not entitled to have a payment made to them, or property transferred to or vested in them, unless the person gives to the Authority a deed that, among other things, provides for the release or discharge of any person from any liability that the Minister considers appropriate. There are also time limits. Section 44(5) provides that three months after notice of the Governor's determination is given to a person, "every liability of every WA Bell Company to [that] person is, by force of [the Bell Act], discharged and extinguished"59 and if the person has not given the executed deed of release or discharge in relation to the determination, "the determination ceases to have effect in relation to [that] person"60. Stay of proceedings and no appeal or review Section 73(1) provides that, on and from the transfer day, a person cannot begin or continue proceedings in a court with respect to property that was, immediately before that day, property of a WA Bell Company, except with the leave of the Supreme Court of Western Australia. This restriction does not apply, however, to a right to make a taxation objection, or a right or capacity to 56 s 43(8) of the Bell Act. 57 s 43(2) of the Bell Act. 58 ss 46(2) and 48 of the Bell Act. 59 See s 44(4), (5)(a) and (8) of the Bell Act. 60 s 44(4), (5)(b) and (8) of the Bell Act. Bell Nettle Gordon seek the review of, or to appeal against, a decision of the Commissioner in relation to a taxation objection, to the extent such a right or capacity is the property of the company61. Finally, although expressed not to affect the jurisdiction of the Supreme Court of Western Australia to grant relief for jurisdictional error62, the Bell Act provides that any decision made, or other thing done, by the Governor, the Minister, the Authority or the Administrator under or for the purposes of the Bell Act is final and conclusive63; must not be challenged, appealed against, reviewed, quashed or called into question in any court64; and is not subject to review or remedy by way of prohibition, mandamus, injunction, declaration or certiorari, or a remedy having the same effect as a remedy that could be provided by means of such a writ, in any court on any account65. Applicable principles – s 109 of the Constitution Where there is an alleged conflict between a Commonwealth law and a State law, "s 109 requires a comparison between any two laws which create rights, privileges or powers, and duties or obligations, and s 109 resolves conflict, if any exists, in favour of the Commonwealth"66. A conflict may arise in a number of ways. The State law, if valid, might "alter, impair or detract from the operation of a law of the Commonwealth Parliament"67. If so, then to that extent it will be invalid because of what 61 s 73(2) and (3) of the Bell Act. 62 s 74(4) of the Bell Act. 63 s 74(1)(a) of the Bell Act. 64 s 74(1)(b) of the Bell Act. 65 s 74(1)(c) of the Bell Act. 66 Jemena Asset Management (3) Pty Ltd v Coinvest Ltd (2011) 244 CLR 508 at 523 [37]; [2011] HCA 33. 67 Jemena (2011) 244 CLR 508 at 524 [39]. See also Victoria v The Commonwealth ("The Kakariki") (1937) 58 CLR 618 at 630; [1937] HCA 82; Telstra Corporation (Footnote continues on next page) Bell Nettle Gordon sometimes is described as "direct inconsistency"68. As the Court said in Jemena Asset Management (3) Pty Ltd v Coinvest Ltd69: "The crucial notions of 'altering', 'impairing' or 'detracting from' the operation of a law of the Commonwealth have in common the idea that a State law conflicts with a Commonwealth law if the State law undermines the Commonwealth law." (emphasis added) The conflict may also arise from the laws' legal operation or from their practical effect70. "[A]ny alteration or impairment of, or detraction from, a Commonwealth law must be significant and not trivial"71. The question of whether any alteration or impairment of, or detraction from, a Commonwealth law is significant is "always one of fact and degree"72. The starting point is an analysis of the laws in question and their true construction73. The extent of the inconsistency "depends Ltd v Worthing (1999) 197 CLR 61 at 76 [28]; [1999] HCA 12; Dickson v The Queen (2010) 241 CLR 491 at 502 [13]-[14]; [2010] HCA 30. 68 See Dickson (2010) 241 CLR 491 at 502 [14]. See also Telstra (1999) 197 CLR 61 69 (2011) 244 CLR 508 at 525 [41]. See also Metal Trades Industry Association v Amalgamated Metal Workers' and Shipwrights' Union (1983) 152 CLR 632 at 642-643, 651; [1983] HCA 28; Telstra (1999) 197 CLR 61 at 76 [27]. 70 APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322 at 399-400 [202]-[206]; [2005] HCA 44. 71 Jemena (2011) 244 CLR 508 at 525 [41]. 72 APLA (2005) 224 CLR 322 at 400 [206]. 73 Momcilovic v The Queen (2011) 245 CLR 1 at 111 [242], 135 [323]; [2011] HCA 34. Bell Nettle Gordon on the text and operation of the respective laws"74. As Dixon J explained in Wenn v Attorney-General (Vict)75: "[W]hile s 109 invalidates State legislation only so far as it is inconsistent, the question whether one provision of a State Act can have any operation apart from some other provision contained in the Act must depend upon the intention of the State legislation, ascertained by interpreting the statute. … No doubt s 109 means a separation to be made of the inconsistent parts from the consistent parts of a State law. But it does not intend the separation to be made where division is only possible at the cost of producing provisions which the State Parliament never intended to enact." Inconsistency with the Tax Acts As seen earlier, the Commonwealth is a substantial creditor of a number of WA Bell Companies. The tax liabilities include pre-liquidation tax debts76 and liabilities incurred after liquidation77. Rights of the Commonwealth and the Commissioner The legal operation and practical effect of the Tax Acts is such that the production of a notice of assessment is conclusive evidence of the due making of the assessment of a taxation liability and, except in proceedings under Pt IVC of the TAA, that the amount and all the particulars of the assessment are correct78. 74 Jemena (2011) 244 CLR 508 at 526 [45] quoting Western Australia v The Commonwealth (Native Title Act Case) (1995) 183 CLR 373 at 465; [1995] HCA 47. 75 (1948) 77 CLR 84 at 122; [1948] HCA 13. 76 See [16] above. 77 See [18] above. 78 Former s 177 of the 1936 Act (now Item 2 of the table in s 350-10(1) of Sched 1 to the TAA). See Federal Commissioner of Taxation v Futuris Corporation Ltd (2008) 237 CLR 146; [2008] HCA 32. Item 2 of the table in s 350-10(1) of Sched 1 to the TAA applies to assessments issued after 1 July 2015, namely the post-liquidation assessments. Bell Nettle Gordon The assessed taxation liability is a debt due to the Commonwealth which may be recovered by the Commissioner79. The rights of the Commonwealth and the Commissioner to rely on an assessment in relation to the existence, quantification, enforceability and recovery of a taxation liability accrued under a law of the Commonwealth (the Tax Acts) prior to the commencement of the Bell Act and accrued in the Commonwealth's capacity as a creditor of each relevant WA Bell Company, including rights to a pro-rata distribution of any surplus in a winding up under subdiv D of Div 6 of Pt 5.6 of the Corporations Act. The Bell Act purports to override those rights. As explained earlier, the purported legal operation and practical effect of the Bell Act is that the State of Western Australia collects, pools, and vests in a State authority, the property of each WA Bell Company80. The State of Western Australia then determines in its "absolute discretion" who is paid an amount or has property transferred to or vested in them out of the pooled property (if anyone)81. And then, to the extent that the State of Western Australia chooses not to distribute the pooled property of the WA Bell Companies, the surplus vests in the State of Western Australia82. The Authority has an absolute discretion to determine the existence of a liability of a WA Bell Company to the Commissioner83. The Authority also has an absolute discretion as to the quantification of any liability of a WA Bell Company to the Commissioner84. The Governor has an absolute discretion 79 Former ss 208 and 209 of the 1936 Act (now s 255-5 of Sched 1 to the TAA). Sections 208 and 209 apply to amounts due and payable before 1 July 2000. For tax debts due and payable after 1 July 2000, s 255-5 of Sched 1 to the TAA applies. Section 255-5 of Sched 1 to the TAA is in substantially similar terms to ss 208 and 209 of the 1936 Act. 80 ss 9, 10, 16 and 22 of the Bell Act. 81 ss 37, 38, 39, 40, 42, 43 and 44 of the Bell Act. 82 ss 39(7), 43(2) and 48 of the Bell Act. 83 ss 35, 37, 38 and 39 of the Bell Act. 84 ss 35, 37, 38 and 39 of the Bell Act. Bell Nettle Gordon (on the recommendation of the Authority) whether to make a payment (or transfer or vest property) in respect of any liability determined by the Minister and the amount to be paid (or the property to be transferred or vested)85 in respect of that liability. And the Governor is given the power to extinguish the tax debts of the Commonwealth simply by making no determination in respect of If the Governor does make a determination, she is effectively empowered to require the release or discharge of liabilities of the WA Bell Companies to the extent that they exceed any determination made, because, if the Governor determines an amount to be paid to a creditor, that payment can only be made on the condition that any liability the Minister considers appropriate is otherwise released or discharged87. If that condition is not met within three months of the determination, the liability is discharged and extinguished88. to be extinguished89, Further, the Bell Act not only purports to allow the tax debts owed to the Commonwealth the recommendation of the Authority or the determination of the Governor creates any right in, or for the benefit of, the Commonwealth as a creditor of a WA Bell Company90 and it prohibits any action, claim or proceeding of any nature being brought or continued by the Commissioner against a WA Bell Company in relation to the tax liabilities91. that nothing it provides The Bell Act to create a scheme under which Commonwealth tax debts are stripped of the characteristics ascribed to them by thus purports 85 ss 35, 38, 39, 42, 43 and 44 of the Bell Act. 86 ss 42 and 43 of the Bell Act. 87 s 44(3) of the Bell Act. 88 s 44(5) of the Bell Act. 89 ss 43(8) and 44 of the Bell Act. 90 ss 39(8) and 43(6) of the Bell Act. 91 ss 25(5), 73 and 74 of the Bell Act. Bell Nettle Gordon the Tax Acts as to their existence92, their quantification93, their enforceability and their recovery94. It purports to override the Commonwealth's accrued rights under a law of the Commonwealth as a creditor of each of the WA Bell Companies. With respect to the recovery of tax debts due to the Commonwealth, the Commonwealth (and the Commissioner) is reduced to the position of a mere supplicant for the exercise of a favourable discretion on the part of the Executive of the State of Western Australia. In particular, ss 9, 16, 22, 25, 35, 37, 38, 39, 42, 43, 44, 73 and 74 of the Bell Act have the effect of altering, impairing or detracting from s 177 of the 1936 Act (now Item 2 of the table in s 350-10(1) of Sched 1 to the TAA) and ss 208 and 209 of the 1936 Act (now s 255-5 of Sched 1 to the TAA). The Bell Act thereby purports to alter, impair or detract from the operation of each of those rights which arose, and had accrued, to the Commonwealth and to the Commissioner under a law of the Commonwealth prior to the enactment of the Bell Act. That alteration or impairment of, or detraction from, the Tax Acts is significant so as to engage s 109 of the Constitution. Liquidator's obligations to the Commissioner Additionally, by operation of other provisions of the Tax Acts, in particular s 215 of the 1936 Act (now s 260-45 of Sched 1 to the TAA) and s 254 of the 1936 Act, in relation to the pre-liquidation tax debts, obligations of the liquidator of each WA Bell Company in liquidation had arisen in favour of the Commissioner95. They include an obligation under s 215 of the 1936 Act not to 92 ss 35, 37, 38 and 39 of the Bell Act. 93 ss 35, 37, 38 and 39 of the Bell Act. 94 ss 35, 38, 39, 42, 43, 44, 73 and 74 of the Bell Act. 95 Section 215 of the 1936 Act was repealed in 2006: Item 161 of Sched 1 to the Tax Laws Amendment (Repeal of Inoperative Provisions) Act 2006 (Cth). It remains relevant for the WA Bell Companies, except Albany Broadcasters Ltd (in liq), in respect of assessments issued by the Commissioner for periods before the 2006-07 income year: Item 1 of Sched 6 to the Tax Laws Amendment (Repeal of Inoperative Provisions) Act 2006 (Cth). Section 260-45 of Sched 1 to the TAA, which is in substantially similar terms to s 215, applies to Albany Broadcasters Ltd (in liq). Bell Nettle Gordon part with any of the assets of the company without the leave of the Commissioner until the liquidator has been notified by the Commissioner of the amount which appears to be sufficient to provide for any tax which is or will become payable by the company96, an obligation to set aside, out of the assets available for payment of ordinary debts of the company, assets to meet the taxation liabilities of a WA Bell Company97 and, to the extent of the value of the assets that the liquidator is required to set aside, a liability to pay the tax98. In relation to the post-liquidation tax debts, obligations are imposed on the liquidator of the WA Bell Companies in liquidation under s 254 of the 1936 Act. They include an obligation, as taxpayer, to do all things that are required to be done by the 1936 Act, among other Acts, in respect of the income, or any profits or gains of a capital nature, derived by him as liquidator and for the payment of tax thereon99, as well as an obligation to retain from time to time out of any money that comes to him as liquidator so much as is sufficient to pay tax which is or will become due in respect of any income, or any profits or gains of a capital nature, derived by him as liquidator100. That retention obligation crystallised once the Commissioner issued the post-liquidation assessments101. To the extent of any amount that he retained or should have retained under s 254(1)(d), the liquidator is under a liability to pay the tax as liquidator and personally102. 96 s 215(2) and (3)(a) of the 1936 Act. 97 s 215(3)(b) of the 1936 Act. See also Bruton Holdings Pty Ltd (In liq) v Federal Commissioner of Taxation (2009) 239 CLR 346 at 351 [12], 352-353 [16]; [2009] HCA 32. 98 s 215(3)(c) and (4)(a) of the 1936 Act. 99 s 254(1)(a) of the 1936 Act. 100 s 254(1)(d) of the 1936 Act. 101 Federal Commissioner of Taxation v Australian Building Systems Pty Ltd (In liq) (2015) 90 ALJR 151 at 155 [1], 160 [26], 163 [42]-[43], 166 [58]; 326 ALR 590 at 591, 598, 602, 605; [2015] HCA 48. 102 s 254(1)(e) of the 1936 Act. Bell Nettle Gordon Each of those obligations imposed on the liquidator under s 215 of the 1936 Act (now s 260-45 of Sched 1 to the TAA) and s 254 of the 1936 Act had arisen, and was owed to the Commissioner, prior to the commencement of the Bell Act. Section 22 of the Bell Act purports to transfer to and vest in the Authority all WA Bell Company property103, with the result that no funds are retained by the liquidator to meet the accrued tax liabilities (or the proportionate share of them) of the WA Bell Companies in liquidation, or the tax liabilities of the liquidator in that capacity. As a result, the Bell Act purports to prevent and prohibit the liquidator from complying with his obligations to retain funds and pay or cause the companies to pay tax debts pursuant to the Tax Acts. Section 22 of the Bell Act thereby purports to substitute, for the obligations which had arisen and were owed to the Commissioner under the Tax Acts104, a mere expectancy or possibility of the payment of an uncertain amount resting in the discretion of the Authority and ultimately the Governor. Section 22 of the Bell Act thus has the purported effect of altering, impairing or detracting from s 215 of the 1936 Act (now s 260-45 of Sched 1 to the TAA) and s 254 of the 1936 Act. That alteration or impairment of, or detraction from, the Tax Acts is significant so as to engage s 109 of the Constitution. Justiciable controversy There is a dispute, which this Court does not need to resolve, as to whether lodging proofs of debt in the windings up, based on pre-liquidation assessments105, constitutes notice under the 1936 Act. The Commissioner also served post-liquidation assessments106 and, on s 215(2) of 103 See also s 16(3) of the Bell Act at [27] above. 104 In addition to the accrued obligations owed to the Commissioner under s 215 of the 1936 Act (now s 260-45 of Sched 1 to the TAA) and s 254 of the 1936 Act, on the transfer day, the Commonwealth also had a right to a pro-rata distribution of any surplus in a winding up under subdiv D of Div 6 of Pt 5.6 of the Corporations Act. 105 See [16] above. 106 See [18] above. Bell Nettle Gordon 26 November 2015, demanded TBGL and Mr Woodings pay the outstanding tax pursuant to the post-liquidation assessments. Even if none of the steps taken by the Commissioner constitute notice under s 215(2) so that the liquidator's obligation to set aside under s 215(3) has not yet arisen, the Bell Act is inconsistent with and purportedly alters, impairs or detracts from s 215 of the 1936 Act (now s 260-45 of Sched 1 to the TAA) and s 254 of the 1936 Act. For those reasons, a justiciable controversy did arise in respect of the alleged invalidity of Pts 3 and 4 of the Bell Act. Severance and reading down Although s 109 invalidates the Bell Act only so far as it is inconsistent with a law of the Commonwealth, the Bell Act presents as a package of interrelated provisions which appears intended to operate fully and completely according to its terms. The evident purpose of it is to provide a comprehensive regime for dealing with all the relevant property of the WA Bell Companies and to give the Authority and the Governor complete discretion as to how all the liabilities of the WA Bell Companies are to be determined and as to any payments to be made (or property to be transferred) in respect of those liabilities. That is not to say that there are not some provisions of the Bell Act which, if standing alone, would not be inconsistent with the Tax Acts. But, as parts of a regime for dealing with all the relevant property of the WA Bell Companies and giving the Authority and the Governor complete discretion in the determination of liabilities, those provisions assume the valid operation of the provisions of the Bell Act that vest the WA Bell Companies' property in the Authority and give the Authority and the Governor complete discretion as to how the liabilities of the WA Bell Companies are to be determined and paid. Consequently, severance of the provisions of the Bell Act107 that have been identified as inconsistent with provisions of the Tax Acts would result in a radically different and essentially ineffective residue. The offending provisions are so fundamental to the scheme of the Bell Act and thus so bound up with the remaining provisions that severance of the offending provisions would leave standing a residue of "provisions which the State Parliament never intended to enact"108. 107 ss 9, 16, 22, 25, 35, 37, 38, 39, 42, 43, 44, 73 and 74 of the Bell Act. 108 Wenn (1948) 77 CLR 84 at 122. Bell Nettle Gordon It might be suggested that if s 22 of the Bell Act was inconsistent with a provision of the Tax Acts, the offending aspects of s 22 should be read down. But it is impossible by any permissible process of reading down to produce a result which is consistent with s 109 of the Constitution. Section 109 does not permit reading down that results in provisions that the State Parliament could never have intended to enact. Nor does s 109 permit reading into s 22 words which are not there. In particular, it is not possible under s 109 to read s 22 as if it provided, for example, that all of the property of the WA Bell Companies other than that which is set aside under s 215 of the 1936 Act shall be vested in the Authority. Nor may that be done under s 7 of the Interpretation Act 1984 (WA). That section "does not speak to the situation where the issue is not one of the absence of State legislative power, but is one of the extent of inconsistency, by operation of s 109 of the Constitution, of a State law made in exercise of concurrent power"109. The only means available under s 109 for making s 22 of the Bell Act cease to be inconsistent with a provision of the Tax Acts is to completely sever s 22. And since, for the reasons already given, the scheme of the Bell Act is dependent upon the vesting of the WA Bell Companies' property in the Authority, severance of s 22 would result in a set of provisions which, to the extent they might be capable of any rational application, could not possibly have been regarded as something which the Parliament of Western Australia intended. It should be concluded, therefore, that the Bell Act is invalid in its entirety. Other questions Each special case may thus be answered by reference to the fact that the Bell Act creates a scheme under which Commonwealth tax debts are stripped of the characteristics ascribed to them by the Tax Acts as to their existence, their quantification, their enforceability and their recovery, with the result that the Bell Act purports to override the Commonwealth's accrued rights as a creditor of each of the WA Bell Companies and the rights of the Commissioner. The Bell Act thereby significantly alters, impairs or detracts from the rights and obligations created by a law of the Commonwealth and existing prior to the commencement 109 Sportsbet Pty Ltd v New South Wales (2012) 249 CLR 298 at 317 [13]; [2012] HCA 13. Bell Nettle Gordon of the Bell Act. That alteration or impairment of, or detraction from, the Tax Acts engages s 109 of the Constitution, which operates to render the offending provisions of the Bell Act invalid. The invalid provisions of the Bell Act are not severable from the rest of the Bell Act. The Bell Act is therefore invalid. That being so, it is unnecessary to consider the other challenges to the validity of the Bell Act. There is no reason to depart from this Court's settled practice that it does not decide constitutional questions unless necessary for the decision110. Conclusion For these reasons, the questions of law which the parties agreed in stating in the form of a special case for the opinion of the Full Court under r 27.08.1 of the High Court Rules should be answered as follows: Matter No S248 of 2015 – The BGNV Proceeding Question 1: Do the plaintiffs have standing to seek relief in respect of the alleged invalidity of Parts 3 and 4 of the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA) on the grounds alleged in paragraph 56 of the statement of claim? Answer: Yes. Question 1A: Does any justiciable controversy arise in respect of the alleged invalidity of Parts 3 and 4 of the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA) on the grounds alleged in paragraphs 56.1 and 56.2 of the statement of claim insofar as the grounds rely on former s 215 of the [Income Tax Assessment Act 1936 (Cth)] (and alternatively, s 260-45 of 110 Attorney-General for NSW v Brewery Employés Union of NSW (1908) 6 CLR 469 at 590; [1908] HCA 94; Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 473-474 [248]-[252]; [2001] HCA 51; ICM Agriculture Pty Ltd v The Commonwealth (2009) 240 CLR 140 at 199 [141]; [2009] HCA 51. Bell Nettle Gordon Schedule 1 to the [Taxation Administration Act 1953 (Cth))]? Answer: Yes. Question 2: Is the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA) invalid in its entirety? Answer: Yes. Question 3: If the answer to question 2 is "no", are any of the provisions of Parts 3 and 4 and any of ss 48, 54, 55, 56, 58 and 69 to 74 of the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA) invalid (and, if so, to what extent)? Answer: Unnecessary to answer. Question 4: If the answer to question 3 is yes is the invalid provision severable from the rest of the Act (and, if so, to what extent)? Answer: Unnecessary to answer. Question 5: Who should pay the costs of the special case? Answer: The defendant. Matter No P63 of 2015 – The WA Glendinning Proceeding Question 1: Do the plaintiffs have standing to seek relief in respect of the alleged invalidity of Parts 3 and 4 [of] the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA) (Bell Act) on the grounds alleged in paragraphs 56 to 58 of the statement of claim? Answer: Yes. Question 2: Does any justiciable controversy arise in respect of the alleged invalidity of Parts 3 and 4 of the Bell Act on the grounds alleged in paragraphs 56.1 and 56.2 of the statement Bell Nettle Gordon of claim insofar as the grounds rely upon s 215 of the [Income Tax Assessment Act 1936 (Cth)] (alternatively, s 260-45 of Schedule 1 to the [Taxation Administration Act 1953 (Cth)])? Answer: Yes. Question 3: Are any of the provisions of Parts 3 and 4 and any of ss 51, 52 and 73 of the Bell Act invalid (and, if so, which and to what extent): by the operation of s 109 of the Commonwealth Constitution by reason of: inconsistency between that provision (as a law of the State of Western Australia) and: (Cth) the Income Tax Assessment Act 1936 (Cth), the Income Tax Assessment Act Taxation Administration Act 1953 (Cth), on the grounds alleged in paragraph 56 to 58 of the statement of claim; further or alternatively the the Corporations Act 2001 (Cth), on the grounds alleged in paragraphs 72 to 88 of the statement of claim; further or alternatively s 39(2) of the Judiciary Act 1903 (Cth), on the grounds alleged in paragraphs 59 to 68 of the statement of claim?; further or alternatively because it infringes Chapter III of the Constitution, on the grounds alleged in paragraphs 59 to 68 of the statement of claim? Answer: (a)(i)(1) Yes. The Bell Act is invalid in its entirety. (a)(i)(2) Unnecessary to answer. Bell Nettle Gordon (a)(i)(3) Unnecessary to answer. Unnecessary to answer. Question 4: If any provisions of the Bell Act are invalid, are they severable from the rest of the Act (and, if so, to what extent); or is the Bell Act invalid in its entirety? Answer: The Bell Act is invalid in its entirety. Question 5: Is the Bell Act invalid in its entirety because it infringes Chapter III of the Constitution on the grounds alleged in paragraphs 69 and 71 of the Statement of Claim? Answer: Unnecessary to answer. Question 6: Who should pay the costs of the special case? Answer: The defendant. Matter No P4 of 2016 – The Maranoa Transport Proceeding Question 1: Do the Plaintiffs have standing to seek relief in respect of the alleged invalidity of Parts 3 and 4 of the [Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA) ("the Bell Act")] on the grounds alleged in: paragraph 56.1 of the [statement of claim], insofar as the grounds rely upon ss 215 of the [Income Tax Assessment Act 1936 (Cth)] (alternatively, s 260-45 of Schedule 1 to the [Taxation Administration Act 1953 (Cth)]) and 254(1)(h) of the [Income Tax Assessment Act 1936 (Cth)]; and paragraphs 56.2, 56.3 and 56.4 of the [statement of claim]? Answer: (a) Yes. (b) Yes. Bell Nettle Gordon Question 2: Does any justiciable controversy arise in respect of the alleged invalidity of Parts 3 and 4 of the Bell Act on the grounds alleged in paragraphs 56.1 and 56.2 of the [statement of claim] insofar as the grounds rely upon s 215 (Cth)] [Income Tax Assessment Act 1936 (alternatively, s 260-45 of Schedule 1 to the [Taxation Administration Act 1953 (Cth)]) and s 254(1)(h) of the [Income Tax Assessment Act 1936 (Cth)]? the Answer: Yes. Question 3: Are any of ss 9, 10, 22, 25, 27, 28, 29, 30, 33, 35, 37, 38, 39, 40, 41, 42, 43, 44, 45, 47, 54, 55, 56, 68, 69, 71, 72 or 73 of the Bell Act invalid, and, if so, which and to what extent, by the operation of s 109 of the Commonwealth Constitution by reason of inconsistency between that provision (as a law of the State of Western Australia) and: the Income Tax Assessment Act 1936 (Cth), the Income Tax Assessment Act 1997 (Cth) or the Taxation Administration Act 1953 (Cth), on the grounds alleged in paragraphs 40 to 56 and 91A of the statement of claim; further or alternatively: the Corporations Act 2001 (Cth), on the grounds alleged in paragraphs 59 to 91 and 91B of the statement of claim? Answer: (a) Yes. The Bell Act is invalid in its entirety. (b) Unnecessary to answer. Question 4: If any provisions of the Bell Act are invalid, are they severable from the rest of the Act (and, if so, to what extent); or is the Bell Act invalid in its entirety? Answer: The Bell Act is invalid in its entirety. Question 5: Who should pay the costs of the special case? Answer: The first defendant. GAGELER J. Section 109 of the Constitution resolves an inconsistency between a State law and a Commonwealth law made in the exercise of concurrent legislative power by rendering the State law "invalid", in the sense of "inoperative"111, "to the extent of the inconsistency". Thus, in Victoria v The Commonwealth ("The Kakariki"), Dixon J stated that "[w]hen a State law, if valid, would alter, impair or detract from the operation of a law of the Commonwealth Parliament, then to that extent it is invalid"112. The section does not render an inconsistent State law invalid to the extent that the State law has an operation consistent with the Commonwealth law provided that the State law operating to that more limited extent remains an expression of the legislative will of the State Parliament. That is the import of the further statement of Dixon J in Wenn v Attorney-General (Vict) that, while "s 109 means a separation to be made of the inconsistent parts from the consistent parts of a State law"113, "it does not intend the separation to be made where division is only possible at the cost of producing provisions which the State Parliament never intended to enact"114. I agree with the conclusion, expressed in the formal answers proposed by the other members of the Court to the questions reserved, that the Bell Act is invalid in its entirety by reason of inconsistency with the Tax Acts. I also agree that, although the plaintiffs have standing quite independently of any intervention to raise questions about other potential bases of invalidity of the Bell Act, the conclusion of invalidity by reason of inconsistency with the Tax Acts makes it unnecessary to answer most of the other questions set out in the special cases. I agree with the substance of all of the proposed answers and do not quibble about their form. However, I reach the conclusion that the Bell Act is invalid on a narrower basis than the other members of the Court. In my opinion, it is sufficient to conclude that the Bell Act is invalid in its entirety that ss 22 and 29 of the Bell Act are essential to the scheme of the Bell Act and that those sections, if valid, would alter, impair or detract from the operation of ss 215 of the 1936 Act (and the relevant equivalent provision of the TAA) and 254 of the 1936 Act. I do not think it necessary to address the question of the effect of ss 177, 208 and 209 of the 1936 Act (and the equivalent provisions of the TAA) on the Bell Act or to delve into related issues canvassed in argument concerning the Crown Debts (Priority) Act 1981 (Cth). 111 Butler v Attorney-General (Vict) (1961) 106 CLR 268 at 274; [1961] HCA 32. 112 (1937) 58 CLR 618 at 630; [1937] HCA 82. 113 Compare Victoria v The Commonwealth ("The Kakariki") (1937) 58 CLR 618 at 114 (1948) 77 CLR 84 at 122; [1948] HCA 13. Section 22 of the Bell Act, if valid, would have had the immediate result on 27 November 2015 of vesting in the Authority all of the property of each WA Bell Company, including those then in liquidation. Section 29, if valid, from that same date would have had the ongoing effect of preventing the liquidator from performing any function (including any duty or responsibility115) or exercising any power (including any authority or discretion116) of the liquidator except with the consent of the Authority. Unless each of those sections has full operation, the elaborate scheme for the external administration of the WA Bell Companies mapped out in the Bell Act simply cannot work. Section 22 is needed to sweep up all of the assets of each WA Bell Company in order to establish the pool of property, which includes the Fund, from which the Authority is to make payments or transfers to be determined by the Governor. Section 29 is needed to prevent the performance of an obligation or the exercise of a power by a liquidator coming into conflict with the performance by the Authority of the numerous functions conferred on it, which include not only managing the Fund and making payments or transfers determined by the Governor but also collecting and realising or otherwise dealing with the property of each WA Bell Company and administering each WA Bell Company until it is dissolved. There is no dispute that ss 215 of the 1936 Act (or the relevant equivalent provision of the TAA) and 254 of the 1936 Act operated in relation to each WA Bell Company that was in liquidation immediately before 27 November 2015 and would continue to operate to impose obligations on the liquidator of each such WA Bell Company but for the operation of ss 22 and 29 of the Bell Act. Western Australia nevertheless argues that there is no inconsistency between the two groups of sections. I am not sure that I am able to follow the totality of the argument; I am sure that I am unable to accept its conclusion. Section 215 of the 1936 Act is addressed, amongst other things, to the pre- liquidation tax liabilities of a company in liquidation. Section 215 relevantly provides: "(1) Every person (in this section called the trustee): (a) who is liquidator of any company which is being wound up; 115 Section 5 of the Interpretation Act 1984 (WA), "function". 116 Section 5 of the Interpretation Act 1984 (WA), "power". shall within 14 days after he has become liquidator, ... give notice thereof to the Commissioner. The Commissioner shall as soon as practicable thereafter, notify to the trustee the amount which appears to the Commissioner to be sufficient to provide for any tax which then is or will thereafter become payable by the company or principal, as the case may be. Subject to subsection (3B), if the trustee is a person of the kind referred to in paragraph (1)(a) ..., the trustee: shall not, without the leave of the Commissioner, part with any of the assets of the company until the trustee has been so notified; shall set aside, out of the assets available for payment of ordinary debts of the company, assets to the value of an amount that bears to the value of the assets available for payment of ordinary debts of the company the same proportion as the amount notified by the Commissioner under subsection (2) bears to the sum of: (iii) the amount notified by the Commissioner under subsection (2); any amount of prescribed tax that the Commissioner is required to notify to the trustee under an Act other than this Act and has so notified; and the aggregate of the ordinary debts of the company (excluding any debt in respect of tax or prescribed tax); and is, to the extent of the value of the assets that the trustee is so required to set aside, liable as trustee to pay the tax. (3B) Nothing in paragraph (3)(a) prevents the trustee parting with assets of the company for the purpose of paying debts of the company that are not ordinary debts of the company. (3C) For the purposes of subsections (3) and (3B), a debt of the company is an ordinary debt if: the debt is an unsecured debt; and the debt is not required, under a law of the Commonwealth or of a State or Territory, to be paid in priority to some or all of the other debts of the company. (3D) In subsection (3), prescribed tax means any amount that the Commissioner is required to notify under a section of another Act that corresponds to this section. If the trustee refuses or fails to comply with any provision of this section or refuses or fails as trustee duly to pay the tax for which the trustee is liable under subsection (3) ..., the trustee: is, to the extent of the value of the assets that the trustee is required under subsection (3) ... to set aside, personally liable to pay the tax". The section has a sequential operation. First, it imposes an obligation on a liquidator to notify the Commissioner of his or her appointment and not to part with any of the assets of the company without the leave of the Commissioner until such time as the liquidator is notified by the Commissioner of the amount which appears to be sufficient to provide for any tax which is or will become payable by the company ("the liquidator's initial retention obligation"). It confers a power on the Commissioner to notify the liquidator of the amount which appears to the Commissioner to be sufficient to provide for any tax which is or will become payable by the company ("the Commissioner's notification power"). Next, it imposes an obligation on the liquidator to set aside, out of the assets available for payment of ordinary debts of the company, assets to the value of an amount that is proportionate to the proportion which the amount notified by the Commissioner bears to the sum of the tax debts and other ordinary debts of the company ("the liquidator's proportionate setting aside obligation"). It imposes a liability on the liquidator, as liquidator, to pay the tax to the extent of the value of the assets that the liquidator is so required to set aside ("the liquidator's payment obligation"). Finally, in the event of the liquidator refusing or failing to comply with any of those obligations, it operates to impose a personal liability on the liquidator to pay the tax to the extent of the value of the assets that the liquidator is so required to set aside ("the liquidator's personal tax liability"). Extrapolating from observations made by members of the Court in the course of adjudicating on issues of priority of payment which arose in the application of legislative antecedents of s 215117, Western Australia argues that the section is no more than a machinery provision imposing obligations on a 117 See the references in The Commonwealth v Cigamatic Pty Ltd (In liq) (1962) 108 CLR 372 at 388-389; [1962] HCA 40. liquidator for the purpose of ensuring that there will be funds at the conclusion of the winding up of a company sufficient to cover any distribution that might ultimately be required to be made to the Commonwealth in respect of that company's pre-liquidation tax debts. Just what that distribution might be, Western Australia argues, is left by the section to be determined in accordance with whatever the law is that governs the winding up, irrespective of whether that law is a law of the Commonwealth or of a State or Territory. The Bell Act, Western Australia argues, is such a law. Western Australia's characterisation glosses the legal operation of the section and understates its purpose. The characterisation fails to account for the precise method of quantification of the liquidator's proportionate setting aside obligation set out in s 215(3)(b). That method of quantification provides its own measure of the value of the assets of a company that are to be set aside in performance of the liquidator's proportionate setting aside obligation. Through the definition of "ordinary debt" in s 215(3C)(b), that method of quantification draws on the effect of such law of the Commonwealth or of a State or Territory as might govern the priority of payment of debts of the company. But the method of quantification is not otherwise dependent on the operation of any law of the Commonwealth or of a State or Territory. Western Australia's characterisation, more fundamentally, fails to account for the equivalence of the value of the assets required to be set aside in performance of the liquidator's proportionate setting aside obligation with the amount of the liquidator's payment obligation imposed, separately from any other law of the Commonwealth or of a State or Territory, by force of s 215(3)(c). The method of quantification of the liquidator's proportionate setting aside obligation has the result that the amount of the liquidator's payment obligation coincides with the amount which would ordinarily be required to be paid to the Commonwealth in respect of the tax debts of the company in accordance with the general requirement of s 555 of the Corporations Act that all debts proved in a winding up rank equally except as otherwise provided by that Act. The amount derived under that method of quantification also coincides with the amount that would previously have been ordinarily required to be paid to the Commissioner in respect of the tax debts of the company in accordance with the equivalent provision of the Corporations Law of a State or Territory. That coincidence of the amount of the liquidator's payment obligation with the requirements which exist under another law of the Commonwealth, or which previously existed and which might even now have the potential to exist under a law of a State or Territory, is part of the design of s 215 which has in harmony with applicable to operate allowed the section ordinarily Commonwealth, State and Territory winding up regimes118. The coincidence cannot be allowed to obscure what is for present purposes the critical point. It is that s 215 operates as a separate and distinct law of the Commonwealth of its own force to impose the liquidator's payment obligation and to impose in addition, in default of the liquidator meeting that obligation, the liquidator's personal tax liability. The section is a machinery provision for the protection of the revenue, but the scope of its protection is considerably more extensive and prescriptive than is accommodated by Western Australia's characterisation. Western Australia argues next that a liquidator cannot breach the liquidator's initial retention obligation by parting with property involuntarily. Western Australia also argues that, despite the Commissioner having issued notices of assessment and having proved in the liquidations for the pre- liquidation tax liabilities of WA Bell Companies, there is no agreed fact, and no basis for inferring, that the Commissioner has yet exercised the Commissioner's notification power in respect of the pre-liquidation tax liabilities of any of the WA Bell Companies. Assume all of that to be so. It means that the liquidator would not be placed in breach of the liquidator's initial retention obligation by operation of s 22 of the Bell Act and that the liquidator's proportionate setting aside obligation and the liquidator's payment obligation had not arisen by 27 November 2015 and could not arise thereafter. It does not mean that, if valid, s 22 of the Bell Act did not, or that s 29 of the Bell Act does not, alter, impair or detract from the operation of s 215 of the 1936 Act. To the contrary, s 22, if valid, would have removed from the control of the liquidator of each WA Bell Company that was in liquidation the whole of the property that formed the subject-matter of the liquidator's initial retention obligation. The section would have correspondingly removed from the control of the liquidator the whole of the property capable of forming the subject-matter of the liquidator's proportionate setting aside obligation and the liquidator's payment obligation, each of which would arise as a result of any subsequent exercise of the Commissioner's notification power. The section would thereby render any such exercise of the Commissioner's notification power futile. And s 29, if valid, would prohibit observance by the liquidator of each of those obligations in the absence of the Authority choosing to consent. Thus, s 22 would have resulted in the targeted removal of the factual substratum of the obligations imposed by s 215 of the 1936 Act and s 29 would operate to prevent their observance in any event. Together, ss 22 and 29 would 118 Compare Bruton Holdings Pty Ltd (In liq) v Federal Commissioner of Taxation (2009) 239 CLR 346 at 354 [21]; [2009] HCA 32. denude s 215 of its relevant practical operation and in so doing flout its protective purpose. Their practical effect would be to "qualify, impair and, in a significant respect, negate the essential legislative scheme"119. Section 254 of the 1936 Act is addressed, amongst other things, to the post-liquidation tax liabilities of a company in liquidation. Including a liquidator within its reference to a "trustee", the section relevantly provides: "(1) With respect to every agent and with respect also to every trustee, the following provisions shall apply: (a) He or she shall be answerable as taxpayer for the doing of all such things as are required to be done by virtue of this Act in respect of the income, or any profits or gains of a capital nature, derived by him or her in his or her representative capacity, or derived by the principal by virtue of his or her agency, and for the payment of tax thereon. (b) He or she shall in respect of that income, or those profits or gains, make the returns and be assessed thereon, but in his or her representative capacity only, and each return and assessment shall, except as otherwise provided by this Act, be separate and distinct from any other. (d) He or she is hereby authorized and required to retain from time to time out of any money which comes to him or her in his or her representative capacity so much as is sufficient to pay tax which is or will become due in respect of the income, profits or gains. (e) He or she is hereby made personally liable for the tax payable in respect of the income, profits or gains to the extent of any amount that he or she has retained, or should have retained, under paragraph (d); but he or she shall not be otherwise personally liable for the tax." Section 254 operates to impose an obligation on a liquidator to make returns and be assessed in respect of income, or profits or gains of a capital nature, derived in his or her capacity as liquidator. Where the Commissioner makes an assessment of the amount of tax payable on such income, profits or 119 Australian Mutual Provident Society v Goulden (1986) 160 CLR 330 at 339; [1986] HCA 24. gains so derived by the liquidator120, it operates sequentially to impose an obligation on the liquidator to retain from time to time out of any money which comes to the liquidator so much as is sufficient to pay tax which is or will become due ("the liquidator's retention obligation") and to impose a liability on the liquidator to pay the tax payable to the extent of any amount that he or she has retained, or should have retained ("the liquidator's taxation liability"). Western Australia's arguments about s 254 mirror its arguments about s 215 and must suffer the same fate. Sections 22 and 29 of the Bell Act, if valid, would alter, impair or detract from the operation of s 254 – s 22 because it would have resulted in the same targeted removal of the factual substratum of each of the separate and distinct obligations imposed by force of s 254, and s 29 because it would operate to prevent the observance of each of those obligations in any event. The fact that the Commissioner had made post-liquidation assessments before 27 November 2015 adds yet another dimension to that inconsistency. The making of the assessments meant that both the liquidator's retention obligation and the liquidator's taxation liability had by that date been triggered so as to have given rise to a corresponding right on the part of the Commonwealth to payment. "A provision which prevents or suspends the enforcement of an accrued right cannot do otherwise than impair the enjoyment of that right"121. The Commissioner concludes his written submissions with the observation that the basic problem here is that the drafter of the Bell Act either has forgotten the existence of the Tax Acts or has decided to proceed blithely in disregard of their existence. That, indeed, is the basic problem. 120 See Federal Commissioner of Taxation v Australian Building Systems Pty Ltd (In liq) (2015) 90 ALJR 151; 326 ALR 590; [2015] HCA 48. 121 Stock Motor Ploughs Ltd v Forsyth (1932) 48 CLR 128 at 136; [1932] HCA 40.

HIGH COURT OF AUSTRALIA APPELLANT AND THE QUEEN RESPONDENT Roach v The Queen [2011] HCA 12 4 May 2011 ORDER Appeal dismissed. On appeal from the Supreme Court of Queensland Representation M J Byrne QC with H C Fong and C W Heaton for the appellant (instructed by Legal Aid Queensland) A W Moynihan SC with A D Anderson for the respondent (instructed by Office of the Director of Public Prosecutions (Qld)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Roach v The Queen Criminal law – Evidence – Propensity evidence – Admissibility and relevance – Where appellant charged with assault occasioning bodily harm – Where trial judge admitted evidence of other assaults by appellant upon complainant during their relationship pursuant to s 132B of Evidence Act 1977 (Q) ("Act") making admissible relevant evidence of history of domestic relationship – Where s 130 of Act preserved trial judge's discretion to exclude evidence where admission would be unfair to accused – Whether rule in Pfennig v The Queen (1995) 182 CLR 461 to be applied in determining admissibility under s 132B or exercising discretion under s 130 – If evidence admitted, whether jury ought to have been directed they could not rely upon evidence unless satisfied of its truth beyond reasonable doubt. Words and phrases – "domestic violence", "prejudicial", "probative", "propensity", "relationship evidence", "unfairness". Evidence Act 1977 (Q), ss 130, 132B. FRENCH CJ, HAYNE, CRENNAN AND KIEFEL JJ. The appellant was convicted by a jury of one count of assault occasioning bodily harm1, following a trial in the District Court of Queensland. The appellant and the complainant had been in a sexual relationship for some two and a half years prior to the alleged assault, although the relationship was intermittent. For part of that period the appellant was the complainant's carer. The complainant suffered from a number of conditions, including cirrhosis of the liver, drug dependence and depression. The appellant and the complainant were also somewhat itinerant. At the time of the alleged offence, April 2006, the complainant lived alone in a unit in the suburb of New Farm in Brisbane. The appellant was visiting her when the alleged offence occurred. The circumstances of the offence, as given in evidence by the complainant and summarised by Holmes JA in the Court of Appeal, were as follows2: "At 12.45 am on the morning of 13 April, the appellant telephoned the complainant and asked if he could visit her. She agreed, and he arrived very promptly. When she admitted him, he went straight to the refrigerator to get himself a drink. She remonstrated with him, saying that he ought not to help himself before he was invited to do so. The appellant, on the complainant's account, reacted angrily, punching her face and arms with a closed fist and then pulling on her left arm, which he had previously injured. He said, 'I know you're gonna ring the fuckin' coppers, so I may as well make a fuckin' good job of it', before punching her another eight times. The appellant was, the complainant said, intoxicated. He left the unit after assaulting her, and she did call the police. One of the officers attending observed bruises on the complainant's arms and swelling to her left eye, while a general practitioner who examined her some four days later recorded bruises on her arm and her face and a haematoma around the left eye." At the commencement of the trial, the trial judge (Howell DCJ) admitted evidence of other assaults by the appellant upon the complainant in the course of their relationship. Such evidence may be admitted pursuant to s 132B of the Evidence Act 1977 (Q), if it is relevant. Section 130 of that Act confirms that a 1 Criminal Code (Q), Ch 30, s 339. 2 R v Roach [2009] QCA 360 at [4]. Hayne Crennan trial judge has the power to exclude evidence, which is otherwise admissible, where it would be unfair to an accused to admit it. In the Court of Appeal the appellant contended that, in determining whether the evidence would be unfair to him, it was necessary that the trial judge apply the rule in Pfennig v The Queen3 and consider whether "viewed in the context of the prosecution case, there is a reasonable view of [the relationship evidence] which is consistent with innocence"4. Alternatively, if the evidence were admitted, the jury ought to have been directed that they could not rely upon the evidence unless satisfied of its truth beyond reasonable doubt. The Court of Appeal (Keane and Holmes JJA and A Lyons J) rejected both arguments and dismissed the appeal. On appeal to this Court the appellant advanced the same arguments. The Evidence Act 1977 provisions Although the appellant's submissions in this Court focussed upon the decision in Pfennig, the correct starting point is the provisions of the Evidence Act 1977 which govern the admissibility of evidence of the kind here in question and provide for a discretion to exclude it. Section 132B of the Evidence Act 1977 is entitled "Evidence of domestic violence". It provides: "(1) This section applies to a criminal proceeding against a person for an offence defined in the Criminal Code, chapters 28 to 30. Relevant evidence of the history of the domestic relationship between the defendant and the person against whom the offence was committed is admissible in evidence in the proceeding." The offence of assault occasioning bodily harm appears in Ch 30 of the Criminal Code and s 132B of the Evidence Act 1977 therefore applies to a proceeding for that offence. The section has no application to sexual offences against children or to rape and other sexual assaults. These offences are dealt with in, respectively, Chs 22 and 32 of the Criminal Code. (1995) 182 CLR 461; [1995] HCA 7. 4 Pfennig v The Queen (1995) 182 CLR 461 at 485. See also Phillips v The Queen (2006) 225 CLR 303 at 308; [2006] HCA 4. Hayne Crennan Section 132B was inserted by s 122 of the Criminal Law Amendment Act 1997 (Q) on the motion of the Shadow Attorney-General, who spoke of concerns that the criminal justice system had unfairly discriminated against women5. The example he gave was of a case involving a woman killing her husband and the rejection of her plea of provocation at trial6, despite a lengthy history of violence on the part of her husband towards her. In the debate which followed, the Attorney-General questioned the need for the provision, on the basis that the courts had already accepted that evidence of the kind to which it was directed was admissible if relevant7. It is of some interest to observe that the Attorney- General referred8, in this regard, to the decision in Wilson v The Queen9, to which reference will be made later in these reasons. Section 132A was inserted at the same time as s 132B. It deals expressly with similar fact evidence, requiring that when such evidence has particular probative value it must not be ruled inadmissible on the ground that it may be the result of collusion. The section was no doubt introduced as a response to Hoch v The Queen10. It does not assume particular relevance on this appeal. Although the words of s 132B suggest that it alone governs the admissibility of evidence of the kind with which this appeal is concerned, s 130 contains reference to the power of a trial judge to exclude evidence in criminal proceedings. That section provides: "Nothing in this Act derogates from the power of the court in a criminal proceeding to exclude evidence if the court is satisfied that it would be unfair to the person charged to admit that evidence." 5 Queensland, Legislative Assembly, Parliamentary Debates (Hansard), 25 March 6 Corrected on appeal: The Queen v R (1981) 28 SASR 321. 7 Queensland, Legislative Assembly, Parliamentary Debates (Hansard), 26 March 8 Queensland, Legislative Assembly, Parliamentary Debates (Hansard), 26 March (1970) 123 CLR 334; [1970] HCA 17. 10 (1988) 165 CLR 292; [1988] HCA 50. Hayne Crennan Relevance, admissibility and exclusionary rules Section 132B, it will be observed, contains reference to the concepts of relevance and admissibility of evidence, which have been developed by the common law. The common law has also developed rules or discretions which require or permit evidence that is otherwise admissible to be excluded by a trial judge in a criminal trial. The rule in Pfennig operates as an exclusionary rule with respect to similar fact evidence tendered for a particular purpose. Separate and distinct from that rule is the common law discretion11 to exclude relevant evidence in criminal proceedings. It permits a judge to exclude evidence where its prejudicial effect exceeds its probative value. It is commonly applied to similar fact evidence. Section 130 confirms the operation of what is sometimes referred to as a "residual discretion" at common law, which is directed to prevent unfairness to an accused. The first requirement which must be fulfilled, for evidence to be admissible, is that it be relevant. The question as to relevance is whether the evidence, if accepted, could rationally affect the assessment by the jury of the probability of the existence of a fact in issue12. It may do so indirectly. As Gleeson CJ observed in HML v The Queen13, evidence may be relevant if it assists in the evaluation of other evidence. In Smith v The Queen14 it was said that evidence is relevant or it is not; no question of discretion arises. If it is not relevant, no further question arises about its admissibility, for irrelevant evidence may not be received. It was then said that15: 11 Although, as Cross on Evidence, 8th Aust ed (2010) at 397 [11125] observes, the term "discretion" may not be entirely apt. 12 Smith v The Queen (2001) 206 CLR 650 at 654 [7]; [2001] HCA 50. 13 (2008) 235 CLR 334 at 352 [6]; [2008] HCA 16. 14 (2001) 206 CLR 650 at 653 [6]. 15 Smith v The Queen (2001) 206 CLR 650 at 653-654 [6] per Gleeson CJ, Gaudron, Gummow and Hayne JJ (footnote omitted). Hayne Crennan "These propositions are fundamental to the law of evidence and well settled. They reflect two axioms propounded by Thayer and adopted by Wigmore: 'None but facts having rational probative value are admissible,' and 'All facts having rational probative value are admissible, unless some specific rule forbids.'" The common law rules of exclusion arise for consideration only with respect to evidence which is relevant16. Included in the exclusionary rules by which evidence that is otherwise admissible may be rejected in criminal proceedings, is that which concerns similar fact evidence. By that rule, the prosecution may not adduce evidence of other misconduct on the part of the accused, if that evidence shows that the accused had a propensity to commit crime or the offence in question, unless the evidence is sufficiently highly probative of a fact in issue to outweigh the prejudice it may cause17. This rule of evidence is based upon the concern of the law about the prejudicial effect of such evidence and "the possibility that the jury will treat the similar facts as establishing an inference of guilt where neither logic nor experience would necessitate the conclusion that it clearly points to the guilt of the accused."18 The decision in Pfennig added further requirements concerning proof, which make the rule more stringent. The prosecution case in Pfennig, that the appellant had abducted and murdered a young boy, was based upon circumstantial evidence which included the evidence of another boy (H), that the appellant abducted and raped him a year after the alleged murder. The appellant had pleaded guilty to the abduction and rape. A majority of the Court held that because the prejudicial capacity of evidence of propensity is so high, a trial judge is required to apply the same test as a jury, in determining the admissibility of the evidence, and "ask whether there 16 Papakosmas v The Queen (1999) 196 CLR 297 at 306 [21] per Gleeson CJ and Hayne J; [1999] HCA 37. 17 Cross on Evidence, 8th Aust ed (2010) at 709 [21010]. 18 Pfennig v The Queen (1995) 182 CLR 461 at 482 per Mason CJ, Deane and Hayne Crennan is a rational view of the evidence that is consistent with the innocence of the accused"19. Their Honours explained20: "Only if there is no such view can one safely conclude that the probative force of the evidence outweighs its prejudicial effect. And, unless the tension between probative force and prejudicial effect is governed by such a principle, striking the balance will continue to resemble the exercise of a discretion rather than the application of a principle." It will be seen that their Honours distinguished the principle, or rule, to be applied from the exercise of the common law discretion. This assumes some importance on this appeal. So far as concerns the application of the "residual discretion" to which s 130 refers, it has been observed that it is difficult to see how unfairness could be tested otherwise than by reference to the more general discretion21. That is to say, consideration must be given to whether the prejudicial effect of the evidence exceeds its probative value. In the latter regard, consideration may be given to directions which may be given to the jury which may reduce the prejudicial effect of the evidence. The evidence The prosecution disavowed any reliance upon the evidence of the previous assaults as evidence of the appellant's propensity to injure the complainant. The evidence of other assaults upon the complainant by the appellant in the course of their relationship was ruled admissible by the trial judge on the basis that, without it, the jury would be faced with a seemingly inexplicable or fanciful incident. The evidence of the incident charged would otherwise appear to be given in a vacuum, his Honour held. The evidence which was led consequent upon the ruling was as follows. Shortly after the commencement of the relationship between the complainant and the appellant, in early 2004, the appellant became angry with the complainant. He reached into his pocket and threw a handful of "silver" at her, hitting her on the forehead and causing her to bleed. In the months following that incident, the 19 Pfennig v The Queen (1995) 182 CLR 461 at 483. 20 Pfennig v The Queen (1995) 182 CLR 461 at 483. 21 Cross on Evidence, 8th Aust ed (2010) at 397-398 [11125]. Hayne Crennan appellant would frequently punch the complainant causing bruises or marks. As those injuries were nearly healed, the appellant would repeat his assaults. At a point about nine months into the relationship the appellant caused the first injury to the complainant's arm. The appellant and the complainant were then living together. The complainant had returned to their home after undertaking an errand for the appellant to obtain some money from an acquaintance. The appellant was intoxicated. On this occasion the appellant punched the complainant in the face many times and then hit her in the back and she fell to the floor, injuring her left arm. She required surgery, including reconstruction of her shoulder, as a consequence of these injuries. The complainant said that in 2005 the appellant assaulted her many times, by punching her in the face and in the arms. She said that "if [the appellant] had more than that one too many Chardonnays, I always copped a flogging." The decision of the Court of Appeal In the Court of Appeal it was not disputed by the appellant that the evidence in question qualified as part of the history of the relationship between the complainant and the appellant. The Court did not accept the appellant's submission that the rule in Pfennig applied to the admissibility of the evidence. Holmes JA, with whom Keane JA and A Lyons J agreed, held that the sole test for the admissibility of such evidence under s 132B is relevance and the Pfennig test has no application22. It followed, in her Honour's view, that the trial judge had not been required to apply that test, nor to have regard to the judgments in HML v The Queen23 dealing with the application of the test. Although rejecting the test for the admissibility of propensity evidence propounded in Pfennig as unnecessary to evidence falling within s 132B, Holmes JA characterised the evidence in question as propensity evidence and held it to be relevant on that basis. Her Honour rejected the characterisation of the evidence as "relationship" evidence. It was, in her Honour's view, in reality propensity evidence, but admissible as such under s 132B24. Her Honour said25: 22 R v Roach [2009] QCA 360 at [14]. 23 R v Roach [2009] QCA 360 at [14]. 24 R v Roach [2009] QCA 360 at [19]-[23]. 25 R v Roach [2009] QCA 360 at [19]. Hayne Crennan "In seeking to have the evidence admitted, the Crown spoke in terms of needing it to provide context for the incident and to ensure that the jury was not considering the complainant's account in a vacuum. Although it disclaimed any reliance on propensity, in reality, the way in which it sought to give that context and to fill that vacuum was by adducing evidence of the complainant. The bland references to 'context' or 'relationship' evidence were not incorrect, but they offered nothing to explain how the evidence was probative; they failed to acknowledge the propensity reasoning underlying the proposed use of the evidence." the appellant's disposition to aggression against Her Honour referred in this regard to statements made by Mason CJ, Deane and Dawson JJ in Pfennig that propensity evidence and relationship evidence "are not necessarily mutually exclusive."26 is prejudicial. In Pfennig it had been observed that evidence of a general propensity lacks cogency, yet Particular, distinctive propensity demonstrated by acts constituting manifestations or exemplifications of it will have greater cogency27. Holmes JA considered it to be important that, in this case, the evidence had not been directed to show "a propensity at large on the appellant's part to behave aggressively."28 Rather, it showed a proclivity on his part, when intoxicated, to assault the complainant in the same way as he was alleged to have done in the incident charged. It showed an animosity on his part towards her. That anger manifested itself in violence towards her. Her Honour then concluded29: "By providing that particular context for the charged assault, which otherwise might indeed have been 'out of the blue', the evidence made the appellant's conduct on that occasion intelligible, and it made it more probable that he assaulted the complainant as she said. It was thus relevant to whether the charged act took place." 26 (1995) 182 CLR 461 at 465 and to observations made by Dawson J in S v The Queen (1989) 168 CLR 266 at 275; [1989] HCA 66, referred to in R v Roach [2009] QCA 360 at [19]. 27 Pfennig v The Queen (1995) 182 CLR 461 at 483. 28 R v Roach [2009] QCA 360 at [21]. 29 R v Roach [2009] QCA 360 at [21]. Hayne Crennan Turning to s 130, Holmes JA held that the evidence had strong probative value, which must be weighed against any difficulty the evidence created for the appellant. That probative value lay in it "establishing the nature of the appellant's regular response to the complainant"30. Whilst the trial judge had not correctly characterised the evidence as "tendency" or "propensity" evidence, a recognition of the true function of the evidence would have resulted in its admission, in the exercise of the discretion given by s 13031. The question which remained for the Court of Appeal was the standard of proof to be applied by the jury to the evidence following its reception. Holmes JA noted that in some judgments in HML v The Queen views had been expressed that proof to the criminal standard was required where it constituted a step, or indispensable step, in reasoning towards guilt32. However, in her Honour's view, whilst the evidence of the previous assaults in this case might make it more likely that the charged act occurred, it fell far short of being essential to the jury's reasoning to a conclusion of guilt. As her Honour observed, the jury could have convicted on the basis simply of the complainant's account of the charged assault. Applying Shepherd v The Queen33, her Honour concluded that the evidence did not constitute an "indispensable link" in the chain of proof so as to require a direction that it be proved beyond reasonable doubt34. The appeal It will be observed that the Court of Appeal took a view different from that of the trial judge as to the relevance of the evidence of the alleged prior assaults. On this appeal the appellant did not challenge Holmes JA's characterisation of the evidence as relevant to establish a propensity on the part of the appellant. Little attention was therefore directed in written argument to the 30 R v Roach [2009] QCA 360 at [25]. 31 R v Roach [2009] QCA 360 at [25]. 32 HML v The Queen (2008) 235 CLR 334 at 361 [32] per Gleeson CJ, 371 [61] per Kirby J, 406 [196] per Hayne J, Gummow J agreeing, 502 [512] per Kiefel J, referred to in R v Roach [2009] QCA 360 at [27]-[28]. 33 (1990) 170 CLR 573; [1990] HCA 56. 34 R v Roach [2009] QCA 360 at [30]. Hayne Crennan question of relevance, but it is a topic to which it will be necessary to return later in these reasons. The starting point in the appellant's argument was that, were it not for ss 130 and 132B, the rule in Pfennig would apply. So much may be accepted, if the evidence was to be used in proof of the appellant's propensity. What it was necessary for the appellant to explain was how that rule could be applied, given the terms of ss 130 and 132B. This directs attention to the purpose and intended operation of those sections. Although the appellant submitted that it was necessary to consider and apply the decision in Pfennig in connection with both sections, the principal focus of submissions on his behalf was s 130. It was submitted that in determining unfairness under s 130, it was necessary to apply the rule in Pfennig. That exclusionary rule applied because the theoretical foundation for it was the unfairness of admitting evidence of other, uncharged, acts unless the evidence has the probative force required by the test. Thus, it was necessary for the trial judge to consider whether "viewed in the context of the prosecution case, there is no reasonable view of the … evidence consistent with the innocence of the accused"35, the appellant submitted. It should first be observed that the text of s 130 and s 132B does not contain any suggestion that the test in Pfennig is to be applied. Evidence of the kind contemplated by s 132B – of other acts of domestic violence in the history of a relationship – may clearly enough qualify as similar fact evidence which might, in a particular case, be tendered as proof of an accused's propensity. It may also be relevant as evidence of a person's state of mind, or as part of the res gestae, which is to say, part of the circumstances of the crime. Its further possible relevance, to show the kind of relationship the complainant and the accused had and its use to assist in the evaluation of the complainant's evidence, will be discussed later in these reasons. And, in cases where the recipient of domestic violence is accused of an offence against the perpetrator of the violence, the evidence may be relevant and admissible to a plea of provocation or self-defence. The section therefore has a potentially wide operation. It is not restricted in its application to similar fact evidence tendered to prove propensity on the part of the accused, which is the focus of this appeal. Its purpose is to ensure that in 35 Phillips v The Queen (2006) 225 CLR 303 at 308 [9], applying Pfennig v The Queen (1995) 182 CLR 461. Hayne Crennan criminal trials evidence of the history of domestic violence is put before a jury, or other arbiter of fact, so long as it is relevant to an issue in those proceedings. Relevance is the only requirement stated for admissibility. It may be assumed that that legislative choice was made with knowledge of the decision in Pfennig, which had been made some two years earlier and which effected an important change. It was not necessary for the rule in that case to be expressly excluded, as the appellant submitted. The sole basis to be applied for admissibility, relevance, is clearly stated. Section 132B must, however, be read with s 130, which, as earlier observed, preserves the common law discretion to exclude evidence on the ground of unfairness. Evidence relevant and therefore admissible under s 132B may nevertheless be rejected, if a trial judge considers that the evidence will be productive of unfairness in the trial of the accused. The question which then arises from the appellant's argument is whether the rule in Pfennig may be imported into s 130. It would be necessary for that rule to operate within s 130 for it to have an effect upon the question of admissibility, which is otherwise governed by s 132B. The discretion referred to in s 130 is the only possible basis for the exclusion of evidence of a domestic relationship which satisfies the test of relevance of s 132B. There seems no reason to doubt that the question of unfairness, to which s 130 refers, would ordinarily be resolved by reference to the common law principle, expressed as the exercise of a discretion, that the probative value of the evidence in question must exceed the potential prejudice to the accused if the evidence is not to be excluded. It may be accepted that the concern in Pfennig was as to the highly prejudicial effect that similar fact evidence of propensity may have for an accused; although such an effect alone cannot be said to be unfair if the evidence has high probative value. More to the point, the possibility that a jury might reason to guilt, when such a conclusion is not compelled, might be productive of unfairness. It may be said that the rule in Pfennig addresses that problem. But it does so in a way quite different from the exercise of a discretion. The rule in Pfennig accepts the probative force of evidence of propensity. Indeed in Pfennig the evidence in question was a necessary step in the prosecution case towards a conclusion of guilt36. This does not mean that the rule is concerned with the sufficiency of evidence otherwise admissible in proof of guilt. Its focus is upon the propensity evidence itself. The rule requires a trial 36 Pfennig v The Queen (1995) 182 CLR 461 at 483. Hayne Crennan judge, when determining whether the evidence of propensity is to be admitted before the jury, apply the standard which the jury must eventually apply. The judge must ask whether there is a rational view of the propensity evidence, seen in the setting of the prosecution case, which is consistent with the accused's innocence. If the judge so concludes, the evidence ought not to be admitted37. The rule in Pfennig was said to be applied in order to resolve "the tension between probative force and prejudicial effect"38. It therefore addressed the same factors as are relevant to the common law discretion. However, the rule resolves that tension without more. The majority in Pfennig were at pains to point out that no exercise of discretion was involved, but rather the application of a rule of law39. No conclusion as to whether the evidence may operate unfairly is thereby reached as it is in the exercise of the discretion, by balancing the evidence's probative force and its prejudicial effect. So understood, the rule in Pfennig cannot be imported into the exercise of the power confirmed by s 130, which is in the nature of a discretion. If the rule applied, it would not be possible for a trial judge to test for unfairness in a manner consistent with that discretion. The rule operates in such a way that there would be no room for the exercise of any discretion. The foregoing permits two conclusions to be reached. The application of the rule in Pfennig would not be consistent with the common law discretion which is preserved by s 130. It follows that if the exclusionary rule in Pfennig was to apply to evidence of the kind in question, it would be necessary to express it as a qualification of s 132B. Absent such a qualification, and subject to the exercise of the s 130 discretion, evidence of domestic violence in the history of a relationship is admissible so long as it is relevant. The rule in Pfennig had no application in this case, even if the evidence was to be used as evidence of the appellant's propensity, as the Court of Appeal held. The fact that the Court differed from the trial judge as to the relevance of the evidence is therefore not critical to the outcome of this appeal. Nevertheless, the assumption upon which the Court proceeded, that relationship evidence may 37 Pfennig v The Queen (1995) 182 CLR 461 at 485. 38 Pfennig v The Queen (1995) 182 CLR 461 at 483. 39 Pfennig v The Queen (1995) 182 CLR 461 at 483. Hayne Crennan not be relevant other than as propensity evidence, is not unimportant and requires further consideration. In submissions for the appellant it was put that in cases involving domestic violence, "relationship" evidence can only, in truth, be admissible as evidence of propensity. The Court of Appeal appears to have been of a similar view. Holmes JA appears to have doubted that the evidence could have probative value other than as to propensity. Such a view may confuse evidence that may show propensity with evidence used in proof of the offence charged. In HML v The Queen, Gleeson CJ observed that it is necessary to consider Pfennig in its context. It was a case about the fact of propensity as circumstantial evidence in proof of the offence charged. It was not a case involving evidence that happened to show propensity40. In such a case, if the evidence has other, sufficient, probative value, it may be necessary to give directions to the jury as to its specific use. If evidence is admissible on one issue, the fact that it may be logically, but not legally, relevant to another issue does not render it irrelevant and therefore inadmissible on the first issue41. The purpose of the evidence in Pfennig may be contrasted with that for which the evidence in question was tendered in the present case. Here the complainant gave direct evidence both of the alleged offence and of the "relationship" evidence. The latter evidence, which included evidence of other assaults, was tendered to explain the circumstance of the offence charged. It was tendered so that she could give a full account and so that her statement of the appellant's conduct on the day of the offence would not appear "out of the blue" to the jury and inexplicable on that account, which may readily occur where there is only one charge. It allowed the prosecution, and the complainant, to meet a question which would naturally arise in the minds of the jury42. It is difficult to resist the conclusion that it was intended, by the insertion of s 132B, that persons suffering from domestic violence not be disadvantaged in the giving of their evidence and that they be able to tell their story comprehensively. It may be taken to express a perception that it is in the public 40 HML v The Queen (2008) 235 CLR 334 at 357 [22]. 41 Bull v The Queen (2000) 201 CLR 443 at 463 [68]; [2000] HCA 24; HML v The Queen (2008) 235 CLR 334 at 499 [503] per Kiefel J. 42 HML v The Queen (2008) 235 CLR 334 at 502 [513] per Kiefel J. Hayne Crennan interest that they be able to do so and that the prosecution of offences which involve a history of domestic violence be thereby enabled. The reception of the evidence operates more fairly to a complainant. Unfairness to the accused, by its reception, is to be considered by reference to s 130. Moreover, a view that evidence of the history of a relationship, including the conduct of one party to it towards the other, is not relevant other than as to the other person's propensity does not accord with what was said by Menzies J (with whom McTiernan and Walsh JJ agreed) in Wilson v The Queen43 to which, it will be recalled, reference was made by the Attorney-General for Queensland in the debate on the Bill containing s 132B. Menzies J said: "It seems to me that here, as so often happens, an attempt has been made to reduce the law of evidence—which rests fundamentally upon the requirement of relevancy, ie having a bearing upon the matter in issue—to a set of artificial rules remote from reality and unsupported by reason. Any jury called upon to decide whether they were convinced beyond reasonable doubt that the applicant killed his wife would require to know what was the relationship between the deceased and the accused. Were they an ordinary married couple with a good relationship despite differences and disagreements, or was their relationship one of enmity and distrust? It seems to me that nothing spoke more eloquently of the bitter relationship between them than that the wife, in the course of a quarrel, should charge her husband with the desire to kill her. The evidence is admissible not because the wife's statements were causally connected with her death but to assist the jury in deciding whether the wife was murdered in cold blood or was the victim of mischance. To shut the jury off from any event throwing light upon the relationship between this husband and wife would be to require them to decide the issue as if it happened in a vacuum rather than in the setting of a tense and bitter relationship between a man and a woman who were husband and wife. Accordingly, in my opinion the evidence in question was properly admitted because it was pertinent to the issues which the jury had to decide." In the present case the evidence, if accepted, was capable of showing that the relationship between the appellant and the complainant was a violent one, punctuated as it was with acts of violence on the part of the appellant when affected by alcohol. Without this inference being drawn, the jury would most likely have misunderstood the complainant's account of the alleged offence and 43 (1970) 123 CLR 334 at 344. Hayne Crennan what was said by the appellant and the complainant in the course of it. To an extent Holmes JA acknowledged this in the conclusions to her reasons. Whilst her Honour identified the relevance of the evidence as showing the particular propensity of the appellant, she also concluded that it made the appellant's conduct in relation to the alleged offence intelligible and not out of the blue44. No issue was taken by the appellant concerning the exercise of the discretion to exclude the evidence under s 130, absent the application of the rule in Pfennig. The trial judge appears to have accepted that the evidence had high probative value, for the reason that otherwise the complainant's evidence would seem "inexplicable or arguably fanciful". There seems no reason to doubt that it was concluded, properly, to outweigh its prejudicial effect and that the latter could be addressed by directions to the jury. The importance of directions in cases where evidence may show propensity should not be underestimated. It is necessary in such a case that a trial judge give a clear and comprehensible warning about the misuse of the evidence for that purpose and explain the purpose for which it is tendered. A trial judge should identify the inferences which may be open from it or the questions which may have occurred to the jury without the evidence. Those inferences and those questions should be identified by the prosecution at an early point in the trial. And it should be explained to the jury that the evidence is to allow the complainant to tell her, or his, story but that they will need to consider whether it is true. The directions in this case were sufficient. At the conclusion of the evidence the trial judge directed the jury of the need to exercise care and that it would be dangerous to convict on the complainant's evidence alone unless they were convinced of its accuracy. His Honour told the jury that the history of the relationship between the complainant and the appellant had been led "for a very specific purpose" and that they must be "very, very careful in relation to the limited use that [they] may make of such evidence." He explained how evidence could be used as evidence of propensity and directed them that they were not to use the evidence in that way. His Honour informed the jury that the evidence was led so that the incident charged was not considered in isolation or in a vacuum but "to give [them] a true and proper context to properly understand what the complainant said happened on the 13th of April 2006." More specifically, his Honour said that otherwise they would consider the relationship of "boyfriend/girlfriend" had been on and off for about two and a half years, and 44 R v Roach [2009] QCA 360 [21]. Hayne Crennan then "on the Sunday evening out of the blue he suddenly attacked her with quite a degree of violence". He said that their reaction to that might be to say "[w]ell, that's highly unlikely. That just doesn't make sense." Having regard both to the footing on which the evidence of the appellant's earlier conduct was admissible and admitted, and to the directions given to the jury about the use to which that evidence might be put, it was neither necessary nor appropriate for the trial judge to give the jury any direction about the standard of proof to be applied to that evidence. The appellant's alternative ground of appeal (that the jury should have been told not to act on that evidence unless persuaded of its accuracy beyond reasonable doubt) should be rejected. The appeal should be dismissed. HEYDON J. Section 132B of the Evidence Act 1977 (Q) ("the Act") may be said to deal with the admissibility of a species of "relationship evidence"45. Section 130 of the Act preserves the power of a court to exclude otherwise admissible evidence on grounds of unfairness to the accused46. The grounds of appeal raise three questions. One is a question about the interaction between the common law of similar fact evidence and s 132B. The second is a question about the interaction between the common law of similar fact evidence and s 130. The third is whether there is a duty to direct the jury as to the need to be satisfied beyond reasonable doubt about evidence received under s 132B. Pfennig v The Queen and s 132B At common law, similar fact evidence is only admissible if it is relevant and satisfies the test stated in the majority judgment in Pfennig v The Queen. That test is to be applied on the assumptions that the similar fact evidence will be accepted as true but that without it the other evidence will be insufficient to exclude a reasonable doubt. On that test and those assumptions, similar fact evidence is inadmissible unless there is no reasonable view of the similar fact evidence, viewed in the context of the prosecution case, consistent with the innocence of the accused47. There is a qualification stated in Hoch v The Queen48 45 Section 132B provides: "(1) This section applies to a criminal proceeding against a person for an offence defined in the Criminal Code, chapters 28 to 30. (2) Relevant evidence of the history of the domestic relationship between the defendant and the person against whom the offence was committed is admissible in evidence in the proceeding." In the Criminal Code (Q), Ch 28 deals with homicide, suicide and concealment of birth. Chapter 29 deals with offences endangering life or health and Ch 30 deals with assaults. 46 Section 130 provides: "Nothing in this Act derogates from the power of the court in a criminal proceeding to exclude evidence if the court is satisfied that it would be unfair to the person charged to admit that evidence." 47 Pfennig v The Queen (1995) 182 CLR 461 at 485; [1995] HCA 7; Phillips v The Queen (2006) 225 CLR 303 at 323-324 [63]; [2006] HCA 4. 48 (1988) 165 CLR 292; [1988] HCA 50. excluding evidence in relation to which there is a possibility of concoction by collaboration between complainants. The first question raised by the appellant is whether evidence cannot be admitted under s 132B(2) unless it complies with Pfennig v The Queen. The question is not unlike the debate among evidence scholars about whether at common law it is necessary for "relationship evidence" tendered as background to satisfy the rule stated in Pfennig v The Queen in relation to similar fact evidence49. Since this case does not exclusively concern the common law, it is not necessary now to resolve that debate. But the existence of the debate is not irrelevant to the first question raised by the appellant. No part of the express language of s 132B(2) suggests that the provision incorporates or assumes the prior application of the rule in Pfennig v The Queen. Nor do any implications from it. There is no reason to conclude that s 132B(2) is to be read as adopting Pfennig v The Queen in the field which it describes, particularly since there is a debate about whether Pfennig v The Queen applies to the common law rules in relation to "relationship evidence", of which s 132B(2) is one species. Nor can the appellant's submission that the rule in Pfennig v The Queen will survive unless abolished by clear words be upheld. The question of how similar fact evidence and relationship evidence (whether relationship evidence of the type tendered at common law or that tendered under s 132B(2)) are to be treated is a fundamentally important question. But the rule of the Australian common law for the reception of similar fact evidence stated in Pfennig v The Queen is not one of those fundamental common law rules which cannot be abolished without clear words. The formulations of it and its predecessors have evolved over time. Both those formulations and their application have led to an extraordinary amount of academic controversy and an unusually large number of appellate decisions. There is much to be said for Pfennig v The Queen, but it has proved to be unpopular with legislatures. All Australian legislatures have abolished the Hoch qualification except South Australia and the Northern Territory50. All Australian legislatures have abolished Pfennig v The Queen apart from that qualification except Queensland, South Australia and the Northern Territory. Those legislatures which have abolished Pfennig v The Queen have introduced their own somewhat different regimes for dealing with the fundamentally important question to which similar fact rules are directed. But even if clear words were needed in s 132B(2) to abolish the common law rule, they have been used. 49 HML v The Queen (2008) 235 CLR 334 at 445-451 [320]-[335]; [2008] HCA 16. 50 For the position apart from Queensland, see HML v The Queen (2008) 235 CLR 334 at 431 [288] n 309. In short, the proposition that the Pfennig principle should be incorporated into s 132B is incompatible with the express language of s 132B(2). So is the proposition that, if the Pfennig principle exists at common law in the area to which s 132B applies, it has survived. It follows that the reasoning of the Court of Appeal is to be preferred to that of the trial judge. The trial judge held that the evidence was "relationship evidence", that it was not "propensity evidence", and that therefore the Pfennig test did not apply. The Court of Appeal held that the evidence was admissible simply because it fell within s 132B(2), and that the Pfennig test did not apply for that reason. The evidence fell within s 132B(2) because it was "relevant" – a proposition which the appellant contested, but not convincingly. It is not necessary for the purposes of this appeal to determine whether it was relevant as establishing propensity (as the Court of Appeal thought) or in another way (as the trial judge thought); nor to discuss what the significance of the difference might be. The appellant submitted that evidence could only be admitted under s 132B if it were propensity evidence, but that is too extreme a submission. The common law and s 130 The appellant submitted that a court applying s 130 was under a duty to apply the Pfennig test. Section 130 does not create an exclusionary rule in its own right. It merely preserves an existing power – doubtless a common law power – to exclude evidence on grounds of unfairness. There are common law principles relevant to similar fact evidence (a) by which evidence may be excluded where its prejudicial effect exceeds its probative value51, and (b) by which evidence may be rejected if the strict rules of admissibility would operate unfairly against the accused52. In terms s 130 appears to refer, at least primarily, to the second of these powers, but it may also preserve the first, and perhaps others53. The powers 51 Sutton v The Queen (1984) 152 CLR 528 at 534 and 565; [1984] HCA 5. At 565 Dawson J said the possibility of exclusion was not to be denied but was "ordinarily no more than a theoretical possibility" because "the whole purpose of restricting the admissibility of similar fact evidence is to ensure that it cannot be used unless its probative force is sufficiently strong to outweigh or transcend its prejudicial effect". 52 Stephens v The Queen (1985) 156 CLR 664 at 669; [1985] HCA 30. 53 For example, in relation to confessions: Tofilau v The Queen (2007) 231 CLR 396 at 469-470 [247]; [2007] HCA 39. which s 130 preserves only operate once a strict rule of admissibility has been satisfied, for if it has not been satisfied, the question of exercising the exclusionary powers preserved by s 130 does not arise. In Harriman v The Queen54, in 1989, Brennan J said: "As the argument against admissibility in this case relied on the judicial discretion to reject evidence otherwise admissible when it is necessary to do so to secure a fair trial, it is necessary to say something about the scope of the discretion. Is there a residual judicial discretion to reject evidence revealing the commission of another offence or a predisposition to commit an offence on the ground that its prejudicial effect is disproportionate to its probative effect when the evidence is found to be admissible because its probative force clearly transcends its merely prejudicial effect? Obviously, the occasions for the exercise of such a discretion are hard to envisage, for evidence which satisfies the criterion of admissibility is unlikely to attract the exercise of the discretion. Nevertheless, one cannot exclude the possibility of a case where, despite the substantial probative force of the evidence, fairness dictates its exclusion. As against the prospect of such an exceptional case arising, the continued existence of the residual discretion should be admitted." In this passage Brennan J appears to assimilate principle (a) and principle (b), though they are analytically distinct. Brennan J does make it clear, however, that what he calls the "discretion" to reject evidence on the ground that its prejudicial effect excludes its probative value is quite distinct from the common law similar fact rule of admissibility itself – what is now known as the rule in Pfennig v The Queen. Brennan J also assumed that the "discretion" to reject admissible evidence in order to secure a fair trial is distinct from the common law similar fact rule of admissibility. The rule in Pfennig v The Queen now states what Brennan J called "the criterion of admissibility" at common law. That criterion of admissibility can be traced back to at least 193655, but it had evolved into full existence by 1989. It had found support from Murphy J from 54 (1989) 167 CLR 590 at 594-595; [1989] HCA 50. 55 Martin v Osborne (1936) 55 CLR 367; [1936] HCA 23. 1982 on56, from Dawson J from 1984 on57, and from Mason CJ, Wilson and Gaudron JJ in 1988 – a majority of the Court sitting on the relevant case58. The common law power or powers preserved by s 130 assume that evidence has been held admissible, pursuant to what Brennan J called "the criterion of admissibility", subject to the possible exercise of powers which are sometimes called "discretions". It follows that the rule in Pfennig v The Queen, which is "the criterion of admissibility" at common law, and is not in any sense a "discretionary" power but a rule of strict admissibility, cannot be incorporated into s 130 to regulate its operation as a "discretion". It may be accepted that one form of "unfairness" arises where evidence is tendered having the characteristic that its prejudicial effect exceeds its probative value. It may also be accepted that underlying the Pfennig test is a desire to avoid receiving evidence having that characteristic. But it does not follow that in considering s 130 the court incorporates the Pfennig test. The Pfennig test is very favourable to the interests of the accused and very restrictive of the prosecution's capacity to use similar fact evidence. In principle, many may think those to be attractive consequences of the test, but, as already noted, many legislatures, including the Queensland legislature, have not thought so. A construction of s 130 which would incorporate the Pfennig test when the court considers exercising its powers preserved by s 130 would be bringing in at the second stage of an admissibility inquiry a strict rule which the legislature had been concerned to exclude at the first stage by force of s 132B. The relevant criteria of strict admissibility operate before s 130 cuts in. In Queensland those criteria of strict admissibility are to be found in the common law Pfennig rule as modified by s 132A, and, in the field in which it operates, in s 132B(2). Section 132B(2) does not incorporate or leave operative the Pfennig test, and that test is not a criterion of admissibility. There is therefore no occasion for incorporating the test under s 130, which operates only after the relevant criterion of admissibility has been applied. Whatever s 130 refers to, it does not incorporate the Pfennig test. 56 Perry v The Queen (1982) 150 CLR 580 at 594-595; [1982] HCA 75; Sutton v The Queen (1984) 152 CLR 528 at 539. 57 Sutton v The Queen (1984) 152 CLR 528 at 564. 58 Hoch v The Queen (1988) 165 CLR 292 at 294 and 296. Standard of proof in relation to the evidence of the uncharged acts of domestic violence The appellant submitted that four judges in HML v The Queen held that where evidence of uncharged acts was admitted, it was necessary to direct the jury of the need to be satisfied of its truth beyond reasonable doubt. It is true that three judges59 so held and that one judge60 uttered dicta to that effect. Assuming (but not deciding) that that is the standard of proof and that the jury must be so directed, the terms of the judge's summing up conformed with that duty. At several stages he spoke of the need to be satisfied beyond reasonable doubt of "every element of the offence" or "every necessary element of the offence". That would not suffice, because there is a distinction between the elements of the offences and a particular category of evidence, like relationship evidence (which is only a means of proving the elements of the offences). But the judge also said to the jury: "If … you do have a reasonable doubt … about facts that would prove him guilty of the offence, then it is your duty to give the benefit of that reasonable doubt to the accused." That was a direction concerning the need for the relationship evidence to be established beyond reasonable doubt, for the relationship evidence was capable of establishing facts which might prove the accused guilty of the offence charged. It was reinforced by a direction to approach the complainant's evidence – which concerned both the crime alleged and the relationship evidence – "with special care"; a direction about the need to be "convinced of its accuracy"; a direction about the danger of convicting "on her evidence which has no independent support"; and a direction to be "very, very careful" about the relationship evidence. Order The appeal should be dismissed. 59 HML v The Queen (2008) 235 CLR 334 at 362 [42] per Gummow J, 371-372 [61] per Kirby J and 406 [196] per Hayne J. 60 HML v The Queen (2008) 235 CLR 334 at 500 [506] per Kiefel J.

HIGH COURT OF AUSTRALIA CLIVE FREDERICK PALMER & ORS PLAINTIFFS AND AUSTRALIAN ELECTORAL COMMISSION & ORS DEFENDANTS Palmer v Australian Electoral Commission [2019] HCA 24 Date of Order: 7 May 2019 Date of Publication of Reasons and Further Order: 14 August 2019 ORDER Made on 7 May 2019: The application is dismissed. Made on 14 August 2019: The plaintiffs pay the defendants' costs, being the costs that the defendants incurred up to and including the date that they filed their submitting appearance. Representation D F Jackson QC with L T Livingston and S J Chordia for the plaintiffs (instructed by Alexander Law) Submitting appearance for the defendants S P Donaghue QC, Solicitor-General of the Commonwealth, with G J D del Villar and S Zeleznikow for the Attorney-General of the Commonwealth, (instructed by Australian Government Solicitor) intervening Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Palmer v Australian Electoral Commission Parliamentary elections (Cth) – House of Representatives – Counting of votes – Where s 274(2A)-(2C) of Commonwealth Electoral Act 1918 (Cth) provides for indicative two-candidate preferred count in each Division – Where s 7(3) of Commonwealth Electoral Act confers power on Australian Electoral Commission to do all things necessary or convenient for or in connection with performance of its functions – Where practice of Australian Electoral Commission to publish information about indicative two-candidate preferred count for a Division after close of polls in that Division – Whether publication of information for a Division before polls closed in all parts of nation has any demonstrated effect on electoral choices – Whether information inaccurate or misleading – Whether publication constitutes imprimatur to any particular candidate or outcome – Whether publication authorised by s 7(3). Constitutional law (Cth) – Parliament – Elections – Whether publication of information about indicative two-candidate preferred count prior to close of polls nationally contrary to ss 7 and 24 of Constitution – Whether factual foundation of challenge established. Words and phrases – "direct and popular choice", "effect on electoral choices", "factual foundation", "imprimatur", "indicative two-candidate preferred count", "necessary or convenient", "partiality", "scrutiny of votes". Constitution, ss 7, 24. Commonwealth Electoral Act 1918 (Cth), ss 7, 274. KIEFEL CJ, BELL, KEANE, NETTLE, GORDON AND EDELMAN JJ. Since 1992, the Commonwealth Electoral Act 1918 (Cth) ("the Electoral Act") has required the scrutiny of votes in an election for each Division1 of the House of Representatives two-candidate preferred count ("the Indicative TCP Count")2. The Indicative TCP Count takes place, in a Division, after counting of first preference votes. It is a "count of preference votes (other than first preference votes) on the ballot papers that, in the opinion of the Australian Electoral Officer, will best provide an indication of the candidate most likely to be elected for the Division"3. include an indicative The plaintiffs were endorsed and nominated by the United Australia Party as candidates in a Division of the House of Representatives or for the Senate in the recent federal election, held on 18 May 2019. Prior to that election, the plaintiffs filed an application for a constitutional or other writ in this Court seeking to challenge the practice of the first defendant, the Australian Electoral Commission ("the Commission"), in making public, while polls remained open in some parts of Australia, one or both of the identity of the candidates selected by the Commission for the purpose of the Indicative TCP Count in a Division ("the TCP Candidates") and the progressive results of any of those indicative counts (collectively, "the TCP Information"). The plaintiffs' complaint was about when the Commission made the TCP Information public. The plaintiffs did not allege that the Commission could not make the TCP Information public after the polls had closed in all States and Territories. The plaintiffs put their case in two ways. First, they submitted that publishing the TCP Information before the polls closed in all parts of the nation was not authorised by the Electoral Act. In particular, they submitted that by publishing that information, the Commission would not be impartial or avoid the appearance of favouring one or more of the candidates. Second, they submitted that by publishing the TCP Information while the polls remained open in any part of the nation, the Commission "would impermissibly distort the voting system in a manner that would compromise the representative nature of a future 1 Defined to mean "an Electoral Division for the election of a member of the House of Representatives": Electoral Act, s 4(1) definition of "Division". 2 Electoral Act, s 274(2A)-(2C). 3 Electoral Act, s 274(2A). Bell Nettle Gordon Edelman Parliament" contrary to the constitutional mandate for direct and popular choice in ss 7 and 24 of the Constitution. The plaintiffs' application for a constitutional or other writ, which was referred to a Full Court for hearing, proceeded on a statement of agreed facts. The defendants − the Commission, the Electoral Commissioner and the Australian Electoral Officers for each State, the Northern Territory and the Australian appearances. The Attorney-General of the Commonwealth intervened and made written and oral submissions. submitting Territory Capital filed At the conclusion of the hearing before the Full Court on 7 May 2019, the plaintiffs' application was dismissed with reasons to be published at a later date. These are our reasons for joining in that order. Publication of the TCP Information relating to a Division after the polls in that Division had closed, but before the polls had closed elsewhere in the nation, is authorised by s 7(3) of the Electoral Act. The factual foundation for the plaintiffs' statutory challenge was not established – for example, it was not shown that publication suggested "imprimatur" or appeared to favour one or more of the candidates. Moreover, there was no factual foundation for the contention that the publication of the TCP Information after the polls in a Division had closed, but before the polls had closed elsewhere in the nation, had any effect on the requirement for direct and popular choice in ss 7 and 24 of the Constitution. There were the plaintiffs' case: three central difficulties with first, there were no facts showing that publication of the TCP Information had any effect on the electoral choices of voters in Divisions where the polls had not closed; second, the plaintiffs did not say that the Commission could not publish the results of the counting of the first preference votes after the polls had closed, even if other polls across the nation remained open; and, third, the Indicative TCP Count was based on votes cast and was a prediction of the candidate most likely to be elected – not an expression of any opinion by the Commission about whether that prediction pointed to a desirable or undesirable outcome. The Constitution and the Electoral Act Subject to the express and implied limitations with respect to federal elections, it is the Constitution that provides Parliament with the power, and responsibility, for establishing an electoral system which balances Bell Nettle Gordon Edelman "the competing considerations relevant to the making of a free, informed, peaceful, efficient and prompt choice by the people"4. It is the Electoral Act that gives effect to the electoral system chosen by the Parliament, in the exercise of that legislative power, with respect to federal elections. The Electoral Act establishes the Commission5, the stated functions of which, relevantly, are6: to perform functions that are permitted or required to be performed by or under [the Electoral Act], not being functions that: a specified person or body, or the holder of a specified office, is expressly permitted or required to perform; ... and to promote public awareness of election and ballot matters, and Parliamentary matters, by means of the conduct of education and information programs and by other means; and to publish material on matters that relate to its functions". Section 7(3) provides that "[t]he Commission may do all things necessary or convenient to be done for or in connection with the performance of its functions". 4 Murphy v Electoral Commissioner (2016) 261 CLR 28 at 88 [184]; [2016] HCA 5 Electoral Act, s 6(1). 6 Electoral Act, s 7. Bell Nettle Gordon Edelman The Electoral Act, among other things, provides for Divisions for the House of Representatives7; the roll of electors for each State and Territory and each Division8; the qualifications and disqualifications for enrolment and voting9; the registration of political parties10; the procedures by which candidates are nominated and required qualifications11; the regulation of polling and compulsory voting12; the appointment and role of scrutineers appointed by candidates13; and the scrutiny of votes in an election14. This matter is concerned with the scrutiny of votes in an election for a Division of the House of Representatives. The scrutiny is conducted in the manner set out in s 27415. First preference votes are counted16 and then, after that count is recorded17, that information is transmitted in an expeditious manner to the Divisional Returning Officer for the Division18. It was an agreed fact not only that the progressive results of the first preference counts are released by the Commission 7 Electoral Act, Pt IV. 8 Electoral Act, Pt VI. 9 Electoral Act, Pt VII. 10 Electoral Act, Pt XI. 11 Electoral Act, Pt XIV. 12 Electoral Act, Pt XVI. 13 Electoral Act, Pt XVI; see, in particular, ss 217 and 218. 14 Electoral Act, Pt XVIII. 15 Electoral Act, s 274(1). The scrutiny is subject to s 266, which is not relevant to the present matter. 16 Electoral Act, s 274(2)(b)(i). 17 Electoral Act, s 274(2)(d). 18 Electoral Act, s 274(2)(f)(i). Bell Nettle Gordon Edelman and the scrutineers appointed by the candidates, but also that the publication of the progressive first preference counts has the capacity to affect electoral choices. The plaintiffs did not suggest that the release or publication of the first preference count was not authorised by the Electoral Act or that it infringed the Constitution. If, in an election for the House of Representatives, there are more than two candidates for a Division, an Indicative TCP Count is conducted. That count is addressed in s 274(2A)-(2C) of the Electoral Act. The process starts well before polling day. Given the limited nature of the plaintiffs' complaint, it is not necessary to describe the process of the Indicative TCP Count in elaborate detail. The ultimate purpose of the process is described in s 274(2A) as requiring returning officers "to conduct a count of preference votes (other than first preference votes) ... that, in the opinion of the Australian Electoral Officer, will best provide an indication of the candidate most likely to be elected for the Division" (emphasis added). Section 274(2A)-(2C) does not prescribe the procedure by which the Australian Electoral Officer is to reach their opinion as to the identity of the TCP to be conducted. Candidates or how The Commission's established practice for preparing for, and carrying out, the Indicative TCP Count in each Division comprised part of the agreed facts and is summarised below. Indicative TCP Count the Commission's established practice After nominations close, and before the polling day, the Commission's Election Management System selects a default set of TCP Candidates, based on the results of the previous election. The Australian Electoral Officer for each State and Territory reviews the default TCP Candidates for each Division in their State or Territory and either endorses the default selection or advises of any changes that should be made. Once the Australian Electoral Officer has identified the TCP Candidates, they are submitted to the National Election Manager for endorsement, who informs the Deputy Electoral Commissioner and the Electoral Commissioner as required. The Commission's identification of the TCP Candidates is finalised in the second week before polling day to enable the information to be entered into the Commission's Election Management System. Further changes cannot be made prior to election night. Once the Election Management System, a written direction with the names of the TCP Candidates the TCP Candidates have been entered into Bell Nettle Gordon Edelman in a Division is produced to the Assistant Returning Officer in that Division19 and placed in a sealed envelope. In the lead up to election night, Australian Electoral Officers actively monitor potential issues to be alert to potential deviations from the identified TCP Candidates. At each polling place in every Division, after the close of polling (at 6.00 pm on polling day in the applicable time zone) and in view of the scrutineers, the Assistant Returning Officer opens the sealed envelope containing the names of the TCP Candidates and announces those names to everyone present (including the scrutineers). Then, after the first preference count20, the ballot papers for the TCP Candidates for that Division are removed to a secure area and the ballot papers for the remaining candidates are notionally allocated to the TCP Candidate for whom a higher preference has been expressed on the ballot paper. The result of the allocation of ballot papers to the TCP Candidates – the Indicative TCP Count – for each polling place is telephoned to the Divisional Returning Officer for the Division. The Divisional Returning Officer progressively enters the Indicative TCP Count for each polling place into the Commission's Election Management System. The Election Management System updates a webpage on the Commission's website, "The Tally Room". From the close of polls in the principal time zone of a Division, or shortly thereafter, the Tally Room displays the identity of the TCP Candidates in respect of whom the Indicative TCP Count will be undertaken and, once information about the Indicative TCP Count for each polling place begins to be received into the Election Management System, the Commission uses a "matched polling place method" to calculate a "matched polling place projection" in each Division. The matched polling place projection is a prediction of the Indicative TCP Count in the Division, expressed as a "swing" in the Division since the last election. It is calculated by comparing the Indicative TCP Count in a polling place with the votes received at the same polling place in the previous election. The Commission explained, in a publication regarding the electoral process, that the "matched polling place method relies on the empirical fact that swings to or from political parties or candidates tend not to vary greatly within electoral 19 Pursuant to Electoral Act, s 274(2A). 20 See [13] above. Bell Nettle Gordon Edelman divisions" – that is, "swings within divisions tend to be consistent across polling places in a particular electoral division"21. The matched polling place projection is progressively updated as information from the Indicative TCP Count becomes available from each polling place. From approximately 2.00 am AEST the following day, the results of the Indicative TCP Count are displayed on the Tally Room. There are two situations where the Commission adopts a different approach. The first is where one of the identified TCP Candidates for the Division did not contest the previous election or is endorsed by a party which did not endorse a candidate in that Division in the previous election. In that situation, the Tally Room displays the results of the Indicative TCP Count on a progressive basis, rather than a matched polling place projection. The second is where, on election night, it becomes apparent that one or both of the TCP Candidates in a Division should no longer be included in the Indicative TCP Count – for example, because a candidate polling first or second on first preferences was not one of the TCP Candidates identified by the Commission. In that situation, the matched polling place projection and the results of the Indicative TCP Count in that Division are masked from public view on the Tally Room ("TCP Exception") to avoid incorrect consideration of the eventual winner. A TCP Exception does not stop the counting or entry of the results of the Indicative TCP Count. However, because changes to TCP Candidates can only occur from the Sunday after polling day, the TCP Exception remains in place until the new TCP Candidates are recorded in the Election Management System. After the polls close, the Commission also maintains a "real-time" media feed that provides to media organisations and interested third parties the identity of the TCP Candidates in each Division as well as the Indicative TCP Count for each Division, updated by the Commission every 90 seconds on election night. Thus, after the polls close in each Division, the TCP Information is made available in different ways to different people and organisations. The TCP Candidates are identified to scrutineers in a Division, to the public via the Tally Room and to media organisations and interested third parties via the media feed. 21 Australian Electoral Commission, "Election 96: the votes and the count" (1996) 55 Electoral Newsfile 1 at 3. Bell Nettle Gordon Edelman The progressive results of the Indicative TCP Count in a Division are provided to the scrutineers, and to media organisations and interested third parties via the media feed. The matched polling place projection for a Division or the progressive results of the Indicative TCP Count in a Division are published to the public via the Tally Room. Before saying something more about the plaintiffs' complaints, it is necessary to record why s 274 of the Electoral Act was amended to include the Indicative TCP Count. Legislative history In the 1990 election, there was a delay of some days in determining election results despite the fact that the government was returned with a majority of eight seats22. As a result, the Joint Standing Committee on Electoral Matters ("the JSCEM") in 1990 recommended the addition of "a new step to the House of Representatives scrutiny process to guarantee that scrutineers would have the opportunity to readily observe a 'two-candidate preferred vote' in each polling place on election night"23. After the amendment to give effect to that recommendation was introduced in the Senate in 199224, the JSCEM in 1992 expressed two concerns about the Commission's original method of identifying the TCP Candidates, namely, the possibility of the Commission "getting it wrong and jeopardising an early result on election night" and "the effect on the electoral system of two candidates appearing to be the 'two most likely' in the judgment" of the Commission25. The JSCEM in 1992 identified two measures to address those 22 Joint Standing Committee on Electoral Matters, 1990 Federal Election: Report from the Joint Standing Committee on Electoral Matters (1990) at 32 [4.1]. 23 JSCEM, 1990 Federal Election: Report from the Joint Standing Committee on Electoral Matters (1990) at xviii (Recommendation 4). 24 See JSCEM, Conduct of the 1990 Federal Election Part II and Preparations for the Next Federal Election, Interim Report: Counting the Vote on Election Night 25 JSCEM, Conduct of the 1990 Federal Election Part II and Preparations for the Next Federal Election, Interim Report: Counting the Vote on Election Night Bell Nettle Gordon Edelman concerns. First, to maximise the chances of identifying the correct TCP Candidates, the Commission would take into account all relevant objective data including, but not limited to, historical performance26. Second, the Commission would keep confidential the identity of the TCP Candidates until the close of polls27. It was not in dispute that both of these recommendations are given effect in the Commission's established practice for selecting the TCP Candidates and conducting the Indicative TCP Count. the two-candidate preferred result When s 274(2A) was introduced into the Electoral Act28, the new procedure was intended to "provide the public on [election] night with an early in most electorates"29. indication of That reflected the recommendations of the JSCEM in 1992 that it was "highly desirable that the public and candidates know the result of the count as it becomes available"30 and, thus, that not only should the results of the first preference count be transmitted "immediately"31 but "[t]he result of the provisional two-candidate preferred distribution should be transmitted as soon as possible from each polling place, and transmitted in at least three batches from 26 JSCEM, Conduct of the 1990 Federal Election Part II and Preparations for the Next Federal Election, Interim Report: Counting the Vote on Election Night (1992) at 7 [2.3.2]-[2.3.4], 20 (Recommendation 1). 27 JSCEM, Conduct of the 1990 Federal Election Part II and Preparations for the Next Federal Election, Interim Report: Counting the Vote on Election Night (1992) at 8 [2.3.5]-[2.3.7], 21 (Recommendation 2). 28 Electoral and Referendum Amendment Act 1992 (Cth), s 26. 29 Australia, Senate, Parliamentary Debates (Hansard), 15 October 1992 at 1904; (Hansard), Australia, House of Representatives, Parliamentary Debates 16 December 1992 at 3866. 30 JSCEM, Conduct of the 1990 Federal Election Part II and Preparations for the Next Federal Election, Interim Report: Counting the Vote on Election Night 31 JSCEM, Conduct of the 1990 Federal Election Part II and Preparations for the Next Federal Election, Interim Report: Counting the Vote on Election Night (1992) at 22 (Recommendation 4). Bell Nettle Gordon Edelman the Divisional Office to the National Tally Room"32. Again, it was not in dispute that both of these recommendations are given effect in the Commission's established practice for conducting the count of the first preference votes and the Indicative TCP Count. Lack of factual foundation The plaintiffs' contentions about the Indicative TCP Count process, which underpinned both their statutory and constitutional challenges, lacked a factual foundation. It is convenient to address each in turn. No demonstrated effect on electoral choices It was an agreed fact that there was no practicable means, in the time available before the 2019 election, to quantify the extent or likelihood of the effect, if any, on the electoral choices of voters who become aware of the identity of the TCP Candidates in any Division, or the results of the matched polling place projection or the Indicative TCP Count in any Division, if the voters had not already voted and when polls were still open in the Division in which they were electors. Instead, the plaintiffs referred to and relied on three published articles33, each of which concerned overseas jurisdictions – the United States of America, France and Denmark. The plaintiffs submitted that the studies recorded in these articles supported a proposition that voters who were yet to cast their ballot may be influenced by the release of election results elsewhere or by the publication of opinion polls or exit polls while voting booths remain open, sometimes referred to as the "bandwagon effect". Taken as a whole, the articles do not assist the plaintiffs. 32 JSCEM, Conduct of the 1990 Federal Election Part II and Preparations for the Next Federal Election, Interim Report: Counting the Vote on Election Night (1992) at 22 (Recommendation 5). 33 Morton and Williams, "Information Asymmetries and Simultaneous versus Sequential Voting" (1999) 93 American Political Science Review 51; Morton et al, "Exit polls, turnout, and bandwagon voting: Evidence from a natural experiment" (2015) 77 European Economic Review 65; Dahlgaard et al, "Research Note: How Election Polls Shape Voting Behaviour" (2017) 40 Scandinavian Political Studies 330. Bell Nettle Gordon Edelman The studies recorded in two of those articles related to electoral systems markedly different from the system of compulsory preferential voting, and parliamentary elections, prescribed by the Electoral Act in Australia, with the systems under consideration including such features as non-compulsory voting, national presidential elections, "sequential" voting over a period of weeks and months, and voting on weekdays. The third article considered the effect of election polls on party support in the abstract. The studies did not address the effect, if any, of an action similar to that of the publication of the TCP Information. The studies did not address a situation where the TCP Information relates to candidates in a given Division, and is released after the close of polls in that Division, but the claimed effect on voting is said to occur in other Divisions, where the polls remain open. Thus, the studies do not establish that the action of the Commission in making public the result of a predictive exercise intended to assist with counting, or even a count based on that exercise, had an effect similar to, for example, opinion or exit polls on voters who had not yet voted. Even then, the views expressed by the authors of these studies do not all point towards conclusions of the kind the plaintiffs put as the foundation for their arguments34. In particular, it was said in one study that no significant effect on turnout was identifiable in parliamentary elections, as opposed to presidential elections35. Thus, there was nothing to support any finding that the publication of the TCP Information by the Commission prior to the polls closing across the nation distorted the voting system in any relevant way. 34 See Morton and Williams, "Information Asymmetries and Simultaneous versus Sequential Voting" (1999) 93 American Political Science Review 51 at 64; Morton et al, "Exit polls, turnout, and bandwagon voting: Evidence from a natural experiment" (2015) 77 European Economic Review 65 at 71; Dahlgaard et al, "Research Note: How Election Polls Shape Voting Behaviour" (2017) 40 Scandinavian Political Studies 330 at 333, 339. 35 Morton et al, "Exit polls, turnout, and bandwagon voting: Evidence from a natural experiment" (2015) 77 European Economic Review 65 at 71. Bell Nettle Gordon Edelman Not sufficient that voting "may be affected" More loosely, the plaintiffs contended that it was sufficient that voting "may be affected" by release of the TCP Information before the close of polls nationally to render the publication invalid. Not only was there no factual foundation for such a contention36, but the parties agreed that other sources of information have the capacity to affect the electoral choices of voters, including the progressive first preference counts for candidates released by the Commission and scrutineers; the results of opinion polls published in close proximity to the election; other media reporting on the election, including reporting of the results of exit polls; the presence of party officials and/or candidates near polling booths; the offer of, and prevalence of, "how to vote" cards at polling booths; and the number of parties and candidates listed on the ballot for Senate elections in that State or Territory, and the order in which those parties and candidates are listed on the ballot paper. How, if at all, publication of the TCP Information about one Division might interact with these matters, which it was agreed may affect choices of voters in another Division, was not explained. Selection of TCP Candidates not inaccurate or misleading The plaintiffs also sought to rely on the idea that the selection of candidates for the Indicative TCP Count was inaccurate or misleading. Again, there was no factual foundation for that contention. The process adopted by the Commission has been addressed. It is a predictive exercise and the identification of the TCP Candidates is generally accurate. Indeed, the matter proceeded on agreed facts that in relation to the Commission's identification of the TCP Candidates in the two preceding federal elections, only two Divisions in the 2013 election, and none in the 2016 election, did not include the eventual winner. Moreover, it must be recalled that any imprecision in the identification of the TCP Candidates is addressed by masking the matched polling place projection and the results of the Indicative TCP Count from public view on the Tally Room when it appears that one or both of the TCP Candidates in a Division should no longer be included. And after the polls have closed in that Division and the TCP Candidates are announced, that masking can occur at any time. 36 See [31]-[36] above. Bell Nettle Gordon Edelman No imprimatur or partiality in publication of TCP Information Contrary to the plaintiffs' submission, publication of the TCP Information does not constitute the Commission giving any imprimatur to any particular candidate or outcome. As a matter of statutory construction, the Indicative TCP Count is a prediction after the close of polls. The TCP Candidates remain secret in those Divisions where polls have not yet closed. It is only after the close of polls in a Division that the prediction is made public. And the progressive results that are published by the Commission are based on the votes cast and counted. Publication does not constitute any expression of opinion by the Commission about the desirability of the results that are published. It is not an expression by the Commission of any opinion favouring one candidate over another and, thus, is not a form of partiality. Indeed, the Commission is alert to the need to avoid any appearance of partiality: it explained as early as 1996 that the identification of the TCP Candidates is not made public prior to polling day "so as to ensure that the [Commission] is not seen to be giving any public endorsement to the perceived popularity of any candidates contesting the election"37. Statutory challenge As the factual foundation for the plaintiffs' statutory challenge has not been established, it remains necessary only to address the contention that the release of the TCP Information before close of polls nationally is not authorised by the Electoral Act. The Indicative TCP Count is a predictive statutory exercise that will best provide an indication of the candidate most likely to be elected for a Division in the House of Representatives. The Attorney-General of the Commonwealth submitted that publication of the TCP Information was authorised under s 274(2A). It may be accepted that that sub-section, with its reference to "best provide an indication", recognises that the TCP Information can be, even should be, published. But, be that as it may, the functions given by s 7 of the Electoral Act to the Commission to "promote public awareness of election and ballot matters" and to "publish material on matters that relate to its 37 Australian Electoral Commission, "Election 96: the votes and the count" (1996) 55 Electoral Newsfile 1 at 2. Bell Nettle Gordon Edelman functions"38 are functions that include publishing election results which, as s 274(2A) provides, include both the first preference count and the TCP Information. Section 7(3) then gives the Commission power to do all things necessary or convenient to be done for or in connection with the performance of those and its other functions. The language of s 7(3) is broad39 and it is for the Commission, in its discretion, to determine how that power is exercised. The plaintiffs did not say that the Commission could not publish the results of the progressive first preference count in a Division after the polls in that Division closed even if other polls were still open. That is unsurprising: the Commission's power to publish the first preference count under s 7(3) existed before s 274(2A)-(2C) was enacted. The plaintiffs did not say that the Commission could not publish the TCP Information. The plaintiffs did not dispute that it was necessary or convenient for the Commission to publish the TCP Information. The plaintiffs' complaint was limited to the timing and mode of publication of the TCP Information in circumstances where there were no facts showing that publication of the TCP Information had any effect on voters in other Divisions where the polls had not closed. Having regard to the statutory framework and the legislative history, s 7(3) empowered the Commission to publish the TCP Information as soon as the polls closed in a Division. It was open to the Commission to decide that publication of that information was both necessary and convenient for or in connection with the performance of the Commission's functions to "promote 38 Electoral Act, s 7(1)(c) and (f). 39 See, eg, Morton v Union Steamship Co of New Zealand Ltd (1951) 83 CLR 402 at 410; [1951] HCA 42; Kathleen Investments (Aust) Ltd v Australian Atomic Energy Commission (1977) 139 CLR 117 at 143, 145, 153-155; [1977] HCA 55; Leon Fink Holdings Pty Ltd v Australian Film Commission (1979) 141 CLR 672 at 679; [1979] HCA 26; Anthony Lagoon Station Pty Ltd v Aboriginal Land Commissioner (1987) 15 FCR 565 at 585, 590; Botany Municipal Council v Federal Airports Corporation (1992) 175 CLR 453 at 462; [1992] HCA 52. Bell Nettle Gordon Edelman public awareness of election and ballot matters" and to "publish material on matters that relate to its functions"40. That conclusion is consistent with both the 1990 and 1992 reports of the JSCEM and the extrinsic materials which record that the purpose of the Indicative TCP Count was to provide the public with an early indication of who was most likely to be the elected candidate41. There would be no point to the Indicative TCP Count if the count was not made public until the actual count was completed. In any democratic vote, electors would expect to have information about the vote made publicly available, in the interests of transparency, in order to have confidence in the maintenance of the electoral system chosen by the Parliament in the exercise of its legislative power with respect to federal elections42, and to achieve "promptitude, certainty and finality in the declaration of the poll"43. Thus, the Commission has power under the Electoral Act to publish the TCP Information. Once the Commission has the power, the issue of how it is preferable for that power to be exercised is not a matter for the Court44. It is possible that questions as to the limits to that power might arise, but they do not in this case. 40 Electoral Act, s 7(1)(c) and (f). 41 See [27]-[29] above. 42 See Smith v Oldham (1912) 15 CLR 355; [1912] HCA 61; Mulholland v Australian Electoral Commission (2004) 220 CLR 181; [2004] HCA 41; Spence v Queensland (2019) 93 ALJR 643; 367 ALR 587; [2019] HCA 15. 43 Murphy (2016) 261 CLR 28 at 89 [184]. 44 See generally Kioa v West (1985) 159 CLR 550 at 622; [1985] HCA 81; Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 35-36; [1990] HCA 21. See also, in different contexts, Actors and Announcers Equity Association v Fontana Films Pty Ltd (1982) 150 CLR 169 at 188; [1982] HCA 23; Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 47-48; [1986] HCA 40; Abebe v The Commonwealth (1999) 197 CLR 510 at 579-580 [195]; [1999] HCA 14; NAIS v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 228 CLR 470 at 477-478 [14]-[15]; [2005] HCA 77. Bell Nettle Gordon Edelman As the plaintiffs have not established their factual contention that publication of the TCP Information conveys "imprimatur"45, it is unnecessary to address the plaintiffs' written submission that the Commission's conduct contravened an implied statutory limitation against partiality. A deviation from a statutorily prescribed course might say something about the validity of the exercise of a statutory power46, but that does not arise here. Constitutional challenge What has been said earlier about the factual bases on which the case proceeded is reason enough to reject the plaintiffs' arguments that publication of the TCP Information in relation to a Division, after the polls in that Division had closed but before the polls had closed throughout the nation, is unconstitutional. There is no factual foundation for the plaintiffs' contention that the publication of the TCP Information, while the polls remained open in any part of the nation, "would impermissibly distort the voting system in a manner that would compromise the representative nature of a future Parliament", contrary to the constitutional mandate for direct and popular choice in ss 7 and 24 of the Constitution47. In particular, the agreed fact that there was no practicable means, in the time available before the 2019 election, to quantify the extent or likelihood of the effect, if any, on the electoral choices of voters who became aware of the identity of the TCP Candidates in any Division or the results of the matched polling place projection or the Indicative TCP Count in any Division – if they had not already voted and when polls were still open in the Division in which they were electors – means that there is no basis for the plaintiffs' complaint. Moreover, the Indicative TCP Count and the publication of the TCP Information prior to the polls closing across the nation do not imply the 45 See [40]-[41] above. 46 See Isbester v Knox City Council (2015) 255 CLR 135 at 146 [21], 153 [49]; [2015] HCA 20. 47 See generally Commonwealth Freighters Pty Ltd v Sneddon (1959) 102 CLR 280 at 292; [1959] HCA 11; Breen v Sneddon (1961) 106 CLR 406 at 411; [1961] HCA Bell Nettle Gordon Edelman Commission's support or imprimatur for the particular TCP Candidates that are selected. As a result, the question of whether it would be constitutionally problematic for a government agency to endorse or support particular candidates for election does not arise in this case. Costs The plaintiffs should pay the defendants' costs, being the costs that the defendants incurred up to and including the date that they filed their submitting appearance. GAGELER J. My reasons for having joined in the orders dismissing the application conformed in substantial measure to those now expressed by the other members of the Court. Adopting their abbreviations, I add a short explanation of my specific reasons for rejecting the plaintiffs' statutory argument. The plaintiffs' statutory argument was that publication of the TCP Information for Divisions in States and Territories in Eastern Australia after close of polling there but before close of polling two hours later in Divisions in Western Australia (or even before close of polling up to an hour and a half after that in the Division which encompassed Christmas Island and the Cocos (Keeling) Islands) was beyond the power conferred on the Commission by s 7(3) of the Electoral Act. The argument involved a number of legal propositions which I thought and still think to have been sound. The first was that the power of the Commission to publish the TCP Information was to be found, if at all, in the power conferred on the Commission by s 7(3) of the Electoral Act. The second was that, although s 7(3) left the Commission with a choice as to the precise timing of publication, publication at a time chosen by the Commission would not be within power if publication at the chosen time failed to meet the objective description in s 7(3) of something "necessary or convenient to be done for or in connection with the performance of its functions". The third was that publication at the time chosen by the Commission would fail to meet that description if publication at that time were found to favour, or to create the appearance of favouring, one candidate or political party over another. The purpose of the Indicative TCP Count for which provision was made in s 274(2A), (2B) and (2C) of the Electoral Act was to provide an early indication of the likely result of an election. Achieving that purpose depended on the resultant TCP Information being published before the actual result of the election became known in accordance with the scrutiny for which provision was made in other sub-sections of s 274. That necessity for publication in order to render the Indicative TCP Count efficacious did not indicate that the power to publish the TCP Information was implicit in s 274(2A), (2B) and (2C). There was no need for the power of the Commission to publish the TCP Information to be found by implication in s 274(2A), (2B) and (2C) if that power was expressly conferred on the Commission by another provision of the Electoral Act. The route to the power expressly conferred on the Commission by s 7(3) of the Electoral Act was through the functions of the Commission referred to in The functions of the Commission to which s 7(1)(a) of the Electoral Act referred as "functions that are permitted or required to be performed by or under this Act" included the functions conferred by s 274(2A), (2B) and (2C) respectively on an Australian Electoral Officer, an Assistant Returning Officer and a Divisional Returning Officer, each of whom was required to act with respect to the performance of the functions conferred on them by the Electoral Act subject to the directions of the Electoral Commissioner48, who was both a member of the Commission49 and its chief executive officer50. The exclusion by s 7(1)(a)(i) from the functions of the Commission to which s 7(1)(a) referred of functions that "a specified person or body, or the holder of a specified office, is expressly permitted or required to perform" was inapplicable to them. The exclusion was properly read in context as an exclusion only of functions conferred by or under the Electoral Act on functionaries who were permitted or the Electoral required Commissioner. independently of to perform functions those The functions conferred by s 274(2A), (2B) and (2C) which generated the Indicative TCP Count having thus been functions of the Commission under s 7(1)(a), the Commission had power under s 7(3) to "do all things necessary or convenient to be done for or in connection with the performance of [those] functions". Publication of the TCP Information being necessary to give efficacy to the Indicative TCP Count, it followed that publication of the TCP Information met the description in s 7(3) of a thing necessary to be done by the Commission in connection with the performance of those functions. The power expressly conferred on the Commission by s 7(3) was in that way applicable to authorise the Commission to publish the TCP Information irrespective of whether the publication of the TCP Information could be characterised as falling within either or both of the additional functions of the Commission referred to in s 7(1)(c) or s 7(1)(f), namely to promote public awareness of election matters and to publish material relating to the Commission's functions. Save that the efficacy of the Indicative TCP Count for a Division required publication of the TCP Information to occur during the period between the close of polling in the Division and completion of the scrutiny for the Division, the efficacy of the Indicative TCP Count did not dictate the precise timing of the earliest publication of the TCP Information. That does not mean, however, that the timing of the earliest publication of the TCP Information within that period was committed to the unconstrained discretion of the Commission. 48 Sections 20, 32 and 33 of the Electoral Act. 49 Section 6(2)(b) of the Electoral Act. 50 Section 18(2) of the Electoral Act. Although a power to do things "necessary or convenient" is one of considerable latitude, such a power will not support the doing of a thing which departs from the scheme of the enactment by which the power is conferred51. Fundamental to the scheme of the Electoral Act, and inherent in the Commission's composition, was that the Commission be and appear to be apolitical or non-partisan. That character of political neutrality was inherent in the composition of the Commission, quite apart from being implicit in the nature of its functions. The Electoral Act required that the Commission consist of: a chairperson who was a Judge or former Judge of the Federal Court of Australia chosen from a list of names submitted to the Governor-General by the Chief Justice of that Court52; an Electoral Commissioner, who was an Agency Head for the purpose of the Public Service Act 1999 (Cth)53; and a non-judicial appointee holding an office of, or an office equivalent to that of, Agency Head within the meaning of that Act54. There would, in my opinion, have been an imminent departure from the scheme of the Electoral Act in that important respect were the timing of the proposed publication of the TCP Information by the Commission to have been likely to have favoured, or to have created an appearance of favouring, other candidates over the plaintiffs or other political parties over the United Australia Party. The difficulty for the plaintiffs was that neither effect was self-evident and neither effect was shown on the agreed facts or able to be found by any inference capable of being drawn from the academic writing on which the plaintiffs relied. To the extent that the characterisation of a thing done or proposed to be done as "necessary or convenient" turns on an issue of fact, it is incumbent on the party challenging the doing or the proposed doing of that thing to establish those facts which demonstrate a want of power55. That is where the plaintiffs failed. 51 Morton v Union Steamship Co of New Zealand Ltd (1951) 83 CLR 402 at 410; [1951] HCA 42. 52 Sections 5 (definition of "eligible Judge"), 6(2)(a) and 6(4) of the Electoral Act. cf Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1 at 9; [1996] HCA 18. 53 Sections 6(2)(b) and 29(2)(b) of the Electoral Act. See ss 7 (definition of "Agency Head"), 10(5), 13(11) and 14(1) of the Public Service Act 1999 (Cth). 54 Sections 6(2)(c) and 6(5) of the Electoral Act. 55 Kathleen Investments (Aust) Ltd v Australian Atomic Energy Commission (1977) 139 CLR 117 at 145-146, 153-154, 160; [1977] HCA 55. The fundamental defect in the plaintiffs' statutory argument lay not in its legal structure but in its lack of any established factual foundation.

HIGH COURT OF AUSTRALIA CHIEF EXECUTIVE OFFICER OF CUSTOMS APPELLANT AND LABRADOR LIQUOR WHOLESALE PTY LTD & ORS RESPONDENTS Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd [2003] HCA 49 5 September 2003 1. Appeal allowed in part. ORDER 2. Set aside paragraphs 2 and 3 of the orders of the Court of Appeal of Queensland made on 20 July 2001 and, in lieu thereof, vary the order of Atkinson J made on 9 June 2000 by substituting the following: (a) What is the standard of proof required of the plaintiff in these customs prosecutions in order for him to obtain convictions for offences against ss 33 and 234(1)(a) and (d) of the Customs Act 1901 (Cth)? Answer: In order to obtain a conviction of a defendant for any of the offences specified, the elements of the offence must be established beyond reasonable doubt. (b) What is the standard of proof required of the plaintiff in these excise prosecutions in order for him to obtain convictions for offences against ss 61 and 120(1)(iv) of the Excise Act 1901 (Cth)? Answer: In order to obtain a conviction of a defendant for any of the offences specified, the elements of the offence must be established beyond reasonable doubt. (c) Are these customs prosecutions criminal proceedings for the purposes of the Evidence Act 1977 (Q)? Answer: Those provisions of the Evidence Act 1977 (Q) which would be applied by the Supreme Court of Queensland in civil cases (including, in particular, the provisions of s 92 of that Act) are to be applied in the trial of the present proceedings. (d) Are these excise prosecutions criminal proceedings for the purposes of the Evidence Act 1977 (Q)? Answer: Those provisions of the Evidence Act 1977 (Q) which would be applied by the Supreme Court of Queensland in civil cases (including, in particular, the provisions of s 92 of that Act) are to be applied in the trial of the present proceedings. On appeal from the Supreme Court of Queensland Representation: A Robertson SC with F W Redmond and G A Hill for the appellant (instructed by Australian Government Solicitor) T D O J North SC with J Brasch for the respondents (instructed by Forde Lawyers) Intervener: A Robertson SC with F W Redmond and G A Hill intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd Customs and excise – Prosecutions under Customs Act 1901 (Cth) and Excise Act 1901 (Cth) – Standard of proof required in order to obtain convictions for offences against specified provisions of Customs Act 1901 (Cth) and Excise Act 1901 (Cth). Practice and procedure – Prosecutions under Customs Act 1901 (Cth) and Excise Act 1901 (Cth) – Whether standard of proof a matter of "practice and procedure" in the context of s 247 Customs Act 1901 (Cth) and s 136 Excise Act 1901 (Cth) – Whether standard of proof within contemplation of rules governing "commencing, prosecuting or proceeding with" a prosecution – Whether statutory averment provisions affect question of standard of proof. Federal jurisdiction – Supreme Court exercising federal jurisdiction in respect of "Customs prosecutions" and "Excise prosecutions" under Customs Act 1901 (Cth) and Excise Act 1901 (Cth) – Whether s 79 Judiciary Act 1903 (Cth) "picks up" any State law prescribing standard of proof to be applied – Whether s 80 Judiciary Act 1903 (Cth) applies to direct attention to common law principles. Criminal law – Prosecutions under Customs Act 1901 (Cth) and Excise Act 1901 (Cth) – Standard of proof – Common law requirements where conviction sought for offence against a law of the Commonwealth – Significance of orders sought in prosecution proceedings – Meaning of "conviction" – Relevance of penal consequences of prosecutions to issue of whether proof beyond reasonable doubt necessary. Words and phrases – "Customs prosecution", "Excise prosecution", "recovery of penalties", "usual practice and procedure", "commenced prosecuted and proceeded with", "conviction". Customs Act 1901 (Cth), ss 33, 234, 244, 247, 255. Excise Act 1901 (Cth), ss 61, 120, 133, 136, 144. Judiciary Act 1903 (Cth), ss 68, 79, 80. Crimes Act 1914 (Cth), ss 4(1), 21B. Evidence Act 1977 (Q), s 92. GLEESON CJ. I have had the benefit of reading in draft the judgment of Hayne J. I agree with the orders proposed by his Honour and with his reasons. As to the question of standard of proof, the statutory provisions invoked by the appellant in these proceedings refer to offences, guilt, conviction and punishment. To paraphrase what was said by McTiernan J in Mallan v Lee1, the legislative description of the conduct alleged, and of the orders which the appellant seeks, should be accepted at face value. That being so, the common law requires that the appellant should establish the elements of the alleged offences beyond reasonable doubt. (1949) 80 CLR 198 at 217-218. McHugh McHUGH J. I agree with the orders proposed by Hayne J and with his Honour's reasons. GUMMOW J. The prosecutions under the Customs Act 1901 (Cth) ("the Customs Act") and the Excise Act 1901 (Cth) ("the Excise Act") giving rise to this appeal concern the alleged unlawful failure to pay certain customs and excise duties due on alcohol and cigarettes, by falsely claiming that the goods had been exported from Australia to the Solomon Islands and Fiji in 1996. The second and third respondents are directors of the first respondent, and are charged, broadly, with having aided and abetted the commission of the offences alleged against the corporation. The proceedings The appellant instituted proceedings by writ of summons in the Supreme Court of Queensland naming the three respondents as defendants. A judge of the Supreme Court (Atkinson J) answered preliminary questions posed by consent of the parties2. There were four questions. The first two concerned the standard of proof required of the appellant. The remaining two concerned the application of the Evidence Act 1977 (Q) ("the Queensland Evidence Act"). The appellant wished at trial to avail himself of the provisions of s 92 of that statute respecting the admissibility of documentary evidence as to facts in issue. The Court of Appeal (McMurdo P, Thomas JA, Byrne J), with McMurdo P dissenting as to the questions respecting the Queensland Evidence Act, answered both sets of questions to the opposite effect of the primary judge3. The questions respecting standard of proof were answered by the Court of Appeal by stipulating "proof beyond reasonable doubt" and the answers respecting the Queensland Evidence Act produced the result that s 92 thereof would not be applicable at trial. I would allow the appeal to this Court and make orders as proposed by Hayne J. The effect of these orders is to determine that, in order to obtain a conviction, it will be necessary for the elements of the relevant offences to be established beyond reasonable doubt. However, at trial, s 92 of the Queensland Evidence Act will be applicable. What follows are my reasons for reaching that result. I begin with consideration of those questions directed to the standard of proof. 2 Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2000) 179 ALR 563. 3 Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2001) 188 ALR 493. Standard of proof By the Amended Statement of Claim, the appellant sought (i) declarations that each of the respondents was liable to conviction for offences contrary to s 33 and pars (a) and (d) of s 234(1) of the Customs Act and contrary to s 61 and par (iv) of s 120(1) of the Excise Act; (ii) conviction for those offences; (iii) orders for recovery of penalties against the respondents; and (iv) an order pursuant to s 21B of the Crimes Act 1914 (Cth) ("the Crimes Act"). Section 21B operates in circumstances including those where "a person is convicted of an offence against a law of the Commonwealth"; it empowers the court, in addition to imposing penalties, to order the offender, amongst other things, "to make reparation to the Commonwealth ... by way of money payment or otherwise, in respect of any loss suffered, or any expense incurred, by the Commonwealth ... by reason of the offence". It will be apparent from the reliance upon s 21B that the provisions of the Customs Act and the Excise Act to which reference has been made are treated in the Amended Statement of Claim as answering the description of offences against laws of the Commonwealth in respect of which conviction is sought. That assumption is well founded. The identified sections of the Customs Act were s 33 and pars (a) and (d) of s 234(1). Paragraph (a) of s 234(1) is concerned with the evasion of duty and par (d) with the making of false or misleading statements to an officer of the Australian Customs Service ("Customs"). Paragraphs (a) and (c) of s 234(2) deal with persons who contravene the relevant paragraphs of s 234(1); they do so by stating that persons contravening the laws in question are "guilty of an offence punishable upon conviction" by the pecuniary penalties specified. Further provision for those convicted of offences against par (d) of s 234(1) is made in s 234(3). The phrases "guilty of an offence" and "punishable upon conviction" are significant for what follows in these reasons. Section 33(1) of the Customs Act imposes a prohibition upon the moving of goods subject to the control of Customs. At the relevant time, at the foot thereof a sum was stated beside the term "Penalty". Section 5 of the Customs Act states that, where a penalty is set out at the foot of a sub-section, this indicates that a contravention of the sub-section is "an offence against this Act, punishable upon conviction by a penalty not exceeding the penalty so set out". The other offences in question are those created by ss 61 and 120(1)(iv) of the Excise Act. Section 61 is in similar form to s 33 of the Customs Act. Section 5 of the Excise Act broadly corresponds to s 5 of the Customs Act. Section 120(1)(iv) is in similar form to par (a) of s 234(1) of the Customs Act. The form in which all of these provisions are cast is significant. It indicates that what is sought against the respondents are convictions for offences against the laws of the Commonwealth. Ordinary understanding then would suggest that what is required for that result is proof beyond reasonable doubt. That conclusion the appellant calls into question. He seeks restoration of the answer given by the primary judge that the civil standard of proof applies. Section 4 of the Crimes Act is of central importance in meeting the appellant's case. The section was inserted, with effect from 15 September 1995, by s 3 of the Crimes Amendment Act 1995 (Cth) ("the 1995 Act")4. It was in force at the time of the alleged commission of the offences and the taking of subsequent proceedings in the Supreme Court of Queensland. Section 4 was repealed with effect from 15 December 2001 by Sched 51 of the Law and Justice Legislation Amendment (Application of Criminal Code) Act 2001 (Cth) ("the Application of Criminal Code Act")5. However, given the sequence of events in this case, the operation of s 4 upon the present prosecution would be preserved by s 8 of the Acts Interpretation Act 1901 (Cth) ("the Interpretation Act"). Section 4 states: "(1) Subject to this Act and any other Act, the principles of the common law with respect to criminal liability apply in relation to offences against laws of the Commonwealth. This section has effect despite section 80 of the Judiciary Act [1903 (Cth) ('the Judiciary Act')]." The Explanatory Memorandum to the House of Representatives for the Bill for the 1995 Act stated one of its purposes, pending the enactment of the Bill for the Criminal Code Act 1995 (Cth), to be the application of the common law principles of criminal liability to all Commonwealth offences. The note to cl 3 of the Bill stated: "Proposed subsection 4(1) provides that, subject to the Act or another Act, the principles of common law with respect to criminal liability apply to all Commonwealth offences. The omitted section 4 had only applied these principles to offences under the [Crimes Act]. Any other offence was dealt with according to the prevailing law of the particular State or 4 Previously, s 4 of the Crimes Act had stated: "The principles of the common law with respect to criminal liability shall, subject to this Act, apply in relation to offences against this Act." 5 Sched 51, Item 4. Territory where it was committed. So a person committing an offence against such a law in Victoria, a common law jurisdiction, was treated differently to [a] person committing the same offence in Queensland, a Griffith Code jurisdiction. Proposed subsection 4(2) provides that the section applies despite section 80 of the [Judiciary Act]. Section 80 was the means by which the principles were applied and will no longer operate in that manner with respect to the principles of criminal liability." As to the common law principles of criminal liability, the general proposition stated by Professor Glanville Williams is in point6: "Questions of burden of proof and presumptions are intimately bound up with the substantive law." That scholar went on to repeat what Kitto J said7 were the memorable words of Lord Atkin in Lawrence v The King8: "[I]t is an essential principle of our criminal law that a criminal charge has to be established by the prosecution beyond reasonable doubt". As it happens, Glanville Williams' statement respecting the intimate connection between this burden of proof and the substantive law is further supported in Australia by the general provision now made, since the institution of this litigation, by further Commonwealth law. With effect from 15 December 2001, Ch 2 of the Criminal Code (Cth) ("the Criminal Code") applies to offences against the laws of the Commonwealth (s 2.2). The purpose of Ch 2 is to codify the general principles of criminal responsibility under the laws of the Commonwealth (s 2.1). Section 13.2 states: "(1) A legal burden of proof on the prosecution must be discharged beyond reasonable doubt. Subsection (1) does not apply if the law creating the offence specifies a different standard of proof." It will be recalled that s 4 of the Crimes Act was repealed by Sched 51 of the Application of Criminal Code Act with effect from the commencement date of 6 Criminal Law, The General Part, 2nd ed (1961), §286. 7 Thomas v The Queen (1960) 102 CLR 584 at 595. [1933] AC 699 at 707. s 13.2 of the Criminal Code and is superseded by it. Section 4 now does not apply in relation to an offence to which Ch 2 of the Criminal Code applies9. the there is now However, following difficulty with Customs prosecutions. Whilst s 5AA(1) of the Customs Act10 states that Ch 2 of the Criminal Code applies to offences against the Customs Act, that general provision is subject to the exclusion of Pt 2.6 of the Criminal Code. The exclusion is made by s 5AA(2)(b) of the Customs Act. Part 2.6 includes the provision respecting standard of proof in s 13.2. Further, s 5AA(4) of the Customs Act states that the section "is not to be interpreted as affecting in any way the standard or burden of proof for any offence under this Act that is the subject of a Customs prosecution". The term "Customs prosecution" is said to have the meaning given in s 244 of the Customs Act. What that standard of proof requires is left unspecified by s 5AA. The apparent intention of the Parliament in enacting s 5AA, as part of the Application of Criminal Code Act, was to leave unaltered the law respecting the Customs Act as it stood at 15 December 2001. What is the result? It may be that the Parliament has partly qualified the repeal of s 4 of the Crimes Act by the same statute as enacted s 5AA of the Customs Act. As to Customs prosecutions, was there left to operate in accordance with its terms the statement in s 4 of the Crimes Act that the principles of the common law with respect to criminal liability apply in relation to offences against laws of the Commonwealth? It is unnecessary here to determine that question. This appeal, given the relevant time scale and the operation in any event of the Interpretation Act, turns upon the application of s 4 in its pristine state. Section 4 is expressly qualified by anything provided in "any other Act". Do any provisions of the Evidence Act 1995 (Cth) ("the Commonwealth Evidence Act") make provision qualifying what otherwise would be the operation of s 4 for the present appeal? The answer is in the negative. This is for several reasons. First, s 8(1) of the Commonwealth Evidence Act states that that statute "does not affect the operation of the provisions of any other Act". Secondly, the Commonwealth Evidence Act does not apply to the Supreme Court of Queensland, even in its exercise of federal jurisdiction. That is the result of s 4. Further, and in any event, s 141 of the Commonwealth Evidence Act, to which reference was made in argument, would confirm rather than deny the operation of s 4 of the Crimes Act. Section 141 states that in a criminal 9 Section 3BB of the Crimes Act, added by the Application of Criminal Code Act, so provides. 10 Inserted by Sched 21 to the Application of Criminal Code Act. proceeding, the court is not to find the case of the prosecution proved unless it be satisfied of that proof beyond reasonable doubt. The phrase "[s]ubject to ... any other Act" in s 4 of the Crimes Act is apt to identify the Customs Act itself. The submissions neither in this Court nor at first instance or in the Court of Appeal of Queensland took s 4 as their starting point. But that is what s 4 must be. However, the submissions do inferentially speak to s 4. They do so by asserting or denying, according to the stance of the party, the proposition that the Customs Act itself, upon its proper construction, requires no more than the civil standard. In that regard, primary reliance was placed upon ss 244 and 24711. Section 244 is the first provision in Pt XIV (ss 244-264), headed, as it has been since the enactment of the statute in 1901, "CUSTOMS PROSECUTIONS". At the relevant time for the purposes of the present appeal, the section stated12: "Proceedings by the Customs for the recovery of penalties other than a pecuniary penalty referred to in section 243B under this Act or for the condemnation of ships, aircraft or goods seized as forfeited are herein referred to as Customs Prosecutions." (emphasis added) The term "Customs" is defined in s 4 as meaning "the Australian Customs Service". Throughout the life of the Customs Act, Pt XIII has been headed "PENAL PROVISIONS" and has included two Divisions, Div 1 headed "Forfeitures" and Div 2 headed "Penalties". Section 234 relied upon in the present prosecution is included in Div 2. Other penal provisions are found elsewhere in the Customs Act. Section 33, also relied upon in this prosecution, is an example. The exclusion from s 244 of the pecuniary penalty referred to in s 243B has the effect of excluding the whole of Div 3 (ss 243A-243S) of Pt XIII. Division 3 is headed in Narcotic Goods". "Recovery of Pecuniary Penalties Section 243B is the central provision in that Division and has no role in this appeal. for Dealings The prosecution here, as indicated, was instituted in the Supreme Court of Queensland, a step provided for in s 245(1)(a). That sub-section speaks of the 11 Sections 133 and 136 of the Excise Act are in terms to corresponding effect of ss 244 and 247 respectively. They are found in Pt XI (ss 133-153) headed "EXCISE PROSECUTIONS". 12 Section 244 was repealed and substituted by Sched 3, Item 95 of the Taxation Laws Amendment (Excise Arrangements) Act 2001 (Cth). institution of Customs prosecutions "by action, information or other appropriate proceeding". Here, a writ of summons was employed in the Supreme Court. (Provision also is made in s 245(1) for the institution of proceedings in a State court of summary jurisdiction.) The appellant then relies on s 247. This states: "Every Customs prosecution in a court referred to in subsection 245(1) may be commenced prosecuted and proceeded with in accordance with any rules of practice (if any) established by the Court for Crown suits in revenue matters or in accordance with the usual practice and procedure of the Court in civil cases or in accordance with the directions of the Court or a Judge." Section 248 also is to be considered. It provides, so far as relevant: "Subject to the provisions of this Act the provisions of the law relating to summary proceedings in force in the State ... where the proceedings are instituted shall apply to all Customs prosecutions before a Court of summary jurisdiction in a State". (emphasis added) The opening words of s 248 subject its provisions to s 247. Section 247 applies in its terms to every Customs prosecution in any court referred to in s 245(1), that is to say, superior courts and courts of summary jurisdiction. Upon its proper construction, s 247 requires every Customs prosecution, whatever the court designated in s 245(1) may be, to be commenced, prosecuted and proceeded with in one of the three modes set out in s 247. For present purposes, no question arises respecting the repository of the power of choice apparently conferred by the term "may" in s 247. In his reasons for judgment, Hayne J details the content of the expression in s 247 "rules of practice (if any) established by the Court for Crown suits in revenue matters". Whilst the procedures in the Court of Exchequer and its successors in England13 appear to have some similarities with criminal procedure, there are dangers in enforcing a system of classification containing but two classes, civil and criminal. So, as Frankfurter J put it14: 13 Including, until 1881, the Exchequer Division of the High Court of Justice and thereafter the Queen's Bench Division: Halsbury, The Laws of England, 1st ed, vol 9, §125. See also the judgment of Atkinson J (2000) 179 ALR 563 at 566. 14 United States ex rel Marcus v Hess 317 US 537 at 554 (1943). See also Austin v United States 509 US 602 at 609-610 (1993). "Punitive ends may be pursued in civil proceedings, and, conversely, the criminal process is frequently employed to attain remedial rather than punitive ends." The immediate task is not to ponder what is an imprecise dichotomy but to construe Pt XIV of the Customs Act. This deals on the one hand with the recovery of penalties and on the other with forfeiture. As to forfeitures, the operative order identified is one for condemnation or of dismissal; for penalties it is conviction. There is a long history in this field of distinction between forfeitures and penalties and it is reflected in these provisions of Pt XIV of the Customs Act. The same is true of Pt X of the Excise Act, which, like Pt XIII of the Customs Act, is headed "PENAL PROVISIONS" and deals distinctly with forfeitures and penalties. One outcome of that history in the United States has been that in some decisions civil penalties such as fines have been distinguished from forfeitures so that the latter do not constitute punishments under the double jeopardy clause of What is of present importance is that the legislation in respect of contravention of which the appellant sought remedies against the respondents by action commenced in the Supreme Court of Queensland in terms identified offences which upon the establishment of guilt lead to conviction and punishment. The matter of the applicable standard of proof is, upon the proper construction of s 4(1) of the Crimes Act, one of the principles of the common law "with respect to criminal liability". That conclusion is not displaced by anything in the Customs Act, in particular by any of the three branches of s 247. The text of s 247 has been set out earlier in these reasons. The corresponding provision in the Excise Act is s 136. Reference has been made to the first branch of s 247, that dealing with rules of practice in revenue matters. None such were ever established in the Supreme Court of Queensland and, in any event, a displacement of s 4 of the Crimes Act would not be achieved by a "rule of practice". Nor is the third limb of s 247 sensibly to be construed as effecting a displacement of s 4 merely by empowering the giving of a direction by the particular court. Substantive rights are involved. That being so, the second limb of s 247 has no relevant operation. It refers to "the usual practice and procedure of the Court in civil cases". The same construction applies to s 136 of the Excise Act. I agree with what Hayne J says respecting the significance of the averment provisions of both the Customs Act and the Excise Act. I also agree with the 15 United States v Ursery 518 US 267 at 274-288 (1996). discussion by Hayne J of the nineteenth century English decisions of Attorney- General v Radloff16 and Attorney General v Bradlaugh17, and of the earlier decisions of this Court. It should be added that these and other Australian decisions predate the enactment in 1995 of s 4 of the Crimes Act. Indeed, the state of decision may illustrate a mischief in the federal statute law to which s 4 was directed. Admissibility of documentary evidence I turn to consider the remaining questions, those concerned with the application of the Queensland Evidence Act. The questions were poorly framed. They appeared wrongly to assume that the Queensland statute might of its own force operate in the exercise of the federal jurisdiction with which the Supreme The questions are best understood as requiring consideration whether any, and if so what, law of the Commonwealth renders the Queensland Evidence Act and, in particular, s 92 thereof, applicable to the proceeding instituted in the Supreme Court by the appellant. Section 92 is stated to apply only in any proceeding which is not a criminal proceeding. The term "criminal proceeding" is defined in s 3 as including a proceeding wherein a person is charged with a simple offence, and an examination of witnesses in relation to an indictable offence. Section 68(1) of the Judiciary Act renders the laws of the State of Queensland respecting the procedure for summary conviction and for trial and conviction on indictment of persons charged with offences against State laws applicable, subject to the balance of s 68 and only in so far as those State laws are applicable to persons charged with offences against the laws of the Commonwealth. Section 92 of the Queensland Evidence Act is not a provision respecting the procedure for the trial of offenders against the criminal law. Therefore, s 68 has no application. Section 79 of the Judiciary Act is expressed more broadly. It is unnecessary to enter into the question of the interrelation between s 68 and s 79. Section 79 renders the laws of Queensland binding on the Supreme Court of Queensland in the execution of federal jurisdiction in Queensland but only in cases to which those State laws are applicable. Further, s 79 operates "except as 16 (1854) 10 Ex 84 [156 ER 366]. 17 (1885) 14 QBD 667. 18 cf Austral Pacific Group Ltd (In liq) v Airservices Australia (2000) 203 CLR 136. otherwise provided by ... the laws of the Commonwealth". That exception applies to exclude any application of s 79 to this case. Here, there are other such laws of the Commonwealth which make specific provision for the "picking up" of certain State laws. They are s 247 of the Customs Act and s 136 of the Excise Act. The text of s 247 is set out earlier in these reasons. As there remarked, the section applies to "Customs Prosecutions", a term so defined in s 244 as to include prosecutions for the recovery of penalties for offences against the Customs Act. Likewise, s 136 of the Excise Act applies to "Excise Prosecutions", defined in s 133 to include proceedings for the recovery of penalties under that Act. Section 247 of the Customs Act and s 136 of the Excise Act thereby both contemplate and overcome any incongruity otherwise apparent in the application of s 92 of the Queensland Evidence Act to the prosecution of the present respondents. They do so by stipulating for the prosecution to be proceeded with in accordance with the usual practice and procedure of the Supreme Court of Queensland in civil cases. The question of the admissibility of documentary evidence to facts in issue, the topic dealt with in s 92, falls within the ordinary meaning of the expression "the usual practice and procedure of the [Supreme] Court [of Queensland] in civil cases". For the foregoing reasons, I support the making of the orders proposed by Kirby KIRBY J. This appeal concerns questions reserved by the Supreme Court of Queensland relating to the proof of offences against the Customs Act 1901 (Cth) and the Excise Act 1901 (Cth) with which the respondents have been charged. It presents questions upon which the law does not speak with a clear voice. The facts, legislation and issues The facts19 and the course that the proceedings took in the Supreme Court of Queensland20 are set out in the reasons of Hayne J. So are the relevant provisions of the two Acts of the Federal Parliament that have given rise to the appeal21. As there explained, the Acts, and their English predecessors, have a long history in which may be found the seeds of the problems that now fall for resolution22. The ambivalence of contemporary Australian customs and excise legislation concerning the issues that divided the judges of the Supreme Court of Queensland (from whose orders this appeal comes23) resonates, to some extent, with the issues that evenly divided the Court of Exchequer Chamber in England almost 150 years ago24. Those issues relate to the classification of particular aspects of proceedings brought for breach of revenue laws. The source of the differences of judicial opinion in 1854 and now is fundamentally the same. It lies in an omission of the legislature to enact provisions that, so far as possible, are unmistakably clear, setting out the rules to be applied in the proof of offences so that there is no doubt as to whether the legal regime applicable is that normally followed in a criminal trial or that normally observed in the trial of a civil proceeding. 19 Reasons of Hayne J at [98]. 20 Reasons of Hayne J at [99]-[100]. 21 Reasons of Hayne J at [101]-[102]. See also reasons of Gummow J at [11]-[13]. 22 Reasons of Hayne J at [101]-[107]. 23 Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2000) 179 ALR 563 (per Atkinson J); Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2001) 188 ALR 493 (per Thomas JA and Byrne J; McMurdo P dissenting in part). 24 In Attorney-General v Radloff (1854) 10 Ex 84 [156 ER 366]. See reasons of Kirby In England, in 1854, the question was presented in the context of an attempt by the accused's counsel to call the accused himself as a witness in support of the defence case. At that time, that course was forbidden by the general law governing criminal trials. In the present case, two issues of controversy, equally fundamental, were separated for decision. The first was whether, in the proceedings under the two federal Acts alleging offences against the accused, the standard of proof borne by the prosecutor ("the Customs"), in order to establish the elements of the offences, was that ordinarily required in the case of proof of a criminal offence (that is, proof beyond reasonable doubt). Or was it the standard ordinarily applied in establishing a civil claim (that is, proof on the balance of probabilities; but with appropriate regard to the nature of the proceedings, the issue to be proved and the gravity of the matters alleged25)? The second issue separated at the trial concerned what provisions of the Evidence Act 1977 (Q) would be applied in the prosecution by force of federal law. As re-expressed in this Court, the second issue questioned whether the provisions of that Act applicable to civil cases in Queensland (and in particular s 92 of that Act26) were applicable to the trial of the respondents for their alleged offences against the two federal Acts. In the conduct of the respondents' trial, the Supreme Court of Queensland exercises federal jurisdiction. As such, it is required to conform to applicable federal law. However, federal law, in turn, applies to such proceedings the laws of the State concerned, "including the laws relating to procedure [and] evidence … except as otherwise provided by … the laws of the Commonwealth"27. A third, contingent, issue of a constitutional character was raised defensively by the respondents. The respondents submitted that, if, contrary to their principal argument, this Court was persuaded that, on a proper construction of the federal Acts, proof of their guilt of the elements of the offences alleged against them was to be determined according to the civil standard of proof, such a construction would offend s 71 of the Constitution, be beyond the legislative 25 Briginshaw v Briginshaw (1938) 60 CLR 336 at 361 per Dixon J; cf Evidence Act 1995 (Cth), s 140(2). See Anderson, Hunter and Williams, The New Evidence Law (2002) at 526-527. In the United States, the Briginshaw standard is described as requiring "clear and convincing evidence". It is sometimes expressly provided by law eg Customs Courts Act of 1980, 28 USC §2639(b). 26 The Evidence Act 1977 (Q), s 92 provides for the admissibility of documentary evidence as to facts in issue "[i]n any proceeding (not being a criminal proceeding)". 27 Judiciary Act 1903 (Cth), s 79. See also Evidence Act 1995 (Cth), s 64. Kirby power of the Federal Parliament and thus be inapplicable to their proceedings. By this issue, the respondents sought to invoke what they described as a "general guarantee of due process" contained in Ch III of the Constitution28. In his reasons29, Hayne J concludes that the questions separated in the Supreme Court should be reworded and, as so expressed, should be answered by making it clear that the "elements of the offence" charged against each respondent respectively under each of the federal Acts in question "must be established beyond reasonable doubt"30. His Honour also concludes that the provisions of the Evidence Act 1977 (Q) that would be applied in the Supreme Court of Queensland in civil cases31 (including s 92 of that Act) are to be applied in the trial of the proceedings brought against the respondents in respect of their alleged offences against the federal Acts. In light of the first of these conclusions, in which the other members of the Court join, the constitutional issue does not arise for decision. Common ground and points of difference Upon certain matters, I fully agree in the reasons of Hayne J and also in the separate reasons of Gummow J. First, it is clear that the Evidence Act 1977 (Q) cannot of its own force, in any circumstances, apply to proceedings against the respondents under the Customs Act or the Excise Act. Those statutes are federal laws. The court hearing proceedings under them is exercising federal jurisdiction. It can only apply State law to such proceedings with the authority of federal law32. The terms in which the questions concerning the Evidence Act 1977 (Q) were expressed appear to assume otherwise. They must therefore be amended. The answer given must reflect this basic feature of our constitutional arrangements. Secondly, the questions to be answered require close examination of the applicable laws, most especially the terms, and intended operation, of the 28 Relying on Re Tracey; Ex parte Ryan (1989) 166 CLR 518 at 580 per Deane J; Dietrich v The Queen (1992) 177 CLR 292 at 326, 362 and McHugh, "Does Chapter III of the Constitution protect substantive as well as procedural rights?", (2001) 21 Australian Bar Review 235 at 238-240. 29 With which Gleeson CJ and McHugh J agree. 30 Reasons of Hayne J at [150]. 31 That is, in the exercise of State jurisdiction. 32 Reasons of Gummow J at [35]-[40]; cf R v Gee (2003) 77 ALJR 812; 196 ALR Kirby Customs Act and the Excise Act. A strict dichotomy between "criminal" and "civil" proceedings is not always observed in Australian legislation. In the end, what is necessary is a conclusion about the requirements of the statutes principally in question and how they are intended to operate. As Hayne J has demonstrated, the history of revenue statutes (of which the Customs Act and the Excise Act are modern examples) indicates that sometimes proceedings under them take on features normal to the general rules governing criminal and sometimes civil trials. Generalities, unconnected with the specific provisions of the two federal Acts, may fall short of providing the solutions called for in this appeal. On the other hand, in the end, on the first issue, it is necessary to classify the subject proceedings in a general way. This task can only be accomplished by reference to the usual features of criminal, as distinct from civil, proceedings. In Australia, one such usual feature is that normally a proceeding resulting in a "conviction" is classified as criminal. To secure such a "conviction" the prosecutor must accept the burden to prove all of the elements of the alleged offence by a standard of proof described as "beyond reasonable doubt". Thirdly, as Gummow J points out33, the Judiciary Act 1903 (Cth) does not contain the provision specifying the common law to be applied to the proceedings brought, in this case, under federal statutory law and tried in a Queensland court exercising federal jurisdiction34. It was s 4 of the Crimes Act 1914 (Cth)35, as applicable at the time of the alleged offences, that governed the law as to the "criminal liability" of the respondents. It provided that, subject to federal law, such "criminal liability" was to be determined in accordance with "the principles of the common law". I agree with Gummow J that the usual principles as to burden and standard of proof of a criminal charge are, within s 4 of the Crimes Act, "principles of the common law with respect to criminal liability". They were therefore picked up and applied by s 4 of the Crimes Act to the liability of the respondents in the prosecutions brought against them for customs and excise offences. This was so by force of federal legislation specifically so providing. This is the starting point for ascertaining the answer to the separated questions. Section 4 of the Crimes Act cannot be ignored because, the relevant law having been enacted in statutory form with particularity and by the Federal Parliament, it must be obeyed as the source of the law governing the case. It 33 Reasons of Gummow J at [15]. 34 Whether the Judiciary Act, ss 68, 79 or 80 or otherwise. 35 Set out in reasons of Gummow J at [16]. Kirby cannot be overridden, varied or altered by the more general provisions of the Judiciary Act which, in any case, take the reader back to the particular terms of s 4 of the Crimes Act. In so far as there is a difference between Gummow J and Hayne J36 on this point, I prefer the opinion that Gummow J has expressed. There remains one matter upon which I would depart from the reasons of Hayne J. This relates to the view stated concerning the significance of the penal consequences of customs and excise prosecutions for the classification of such proceedings. His Honour concludes that characterising the particular forms of relief sought in particular proceedings as "penal" offers little or no assistance in deciding what standard of proof is to be applied37. I accept that statutory penalties exist that represent a kind of hybrid, lying somewhere between compensation, restitution and restoration (the usual business of civil process) and punishment and public denunciation (the usual business of criminal process). However, where the remedy provided envisages a public "conviction" of an "offence" and the imposition of a "penalty", which in some circumstances in the case of a natural person is backed up by the possibility of imprisonment, it is easier than otherwise to come to a conclusion that the proper classification of the proceedings is criminal. This is especially so when such proceedings are contrasted with proceedings in which the legal sanctions involve reparation to a party, such as in the form of a money payment. In our form of society, loss of liberty as a punishment, in particular, is ordinarily one of the hallmarks reserved to criminal proceedings conducted in the courts, with the protections and assurances that criminal proceedings provide. Three elements of hesitation Putting these considerations to one side, three matters cause me to hesitate before embracing the conclusions reached by the other members of this Court. They are: That the answers proposed to the first two separated questions, as reframed, appear to conflict with holdings or assumptions expressed by Justices of this Court concerning the standard of proof applicable to establishing the elements of the offences charged in such trials and to be inconsistent with the trend of authority in other Australian courts deciding that issue; That the answers to the first two questions appear, upon one view, to contradict the express instruction of the Federal Parliament in s 247 of the 36 See reasons of Hayne J at [134]. 37 Reasons of Hayne J at [139]. Kirby Customs Act (and the equivalent provisions of the Excise Act38) requiring (with emphasis added) that every such prosecution in a court may be "proceeded with … in accordance with the usual practice and procedure of the Court in civil cases"; and That the apparent discordancy of the answers provided to the first two questions and the terms of the legislation is given emphasis by the answers proposed to the third and fourth questions. Thus, if the proper understanding of the federal Acts and decisional law is to the effect that the standard of proof for the establishment of the elements of the offence is, where a conviction is sought, the criminal standard (beyond reasonable doubt), it seems odd that the State evidence law governing civil cases is rendered applicable by federal law to the trial of such offences in a State court, including in a case in which that State law expressly excludes its application to "a criminal proceeding"39. I shall deal with each of these concerns in turn. The state of decisional authority Earlier court decisions: The starting point for an examination of the first hurdle is an appreciation that the question for decision has not, as such, previously arisen for resolution by this Court. It is true that on a number of occasions the issue has been "touched upon" by Full Courts of this Court40 in proceedings concerned with legislation other than the two federal Acts under consideration in this appeal. Those two Acts, being amongst the earliest statutes passed by the Federal Parliament, were the source of a template that was copied, with minor variations, in a number of later federal statutes41. 39 Evidence Act 1977 (Q), s 92. 40 Naismith v McGovern (1953) 90 CLR 336 at 340-341. 41 eg Sales Tax Assessment Act (No 1) 1930 (Cth), s 57 (repealed); Income Tax Assessment Act 1936 (Cth), s 237 (repealed); Pay-roll Tax Assessment Act 1941 (Cth), s 53; Stevedoring Industry Charge Assessment Act 1947 (Cth), s 46 (repealed); States Receipts Duties (Administration) Act 1970 (Cth), s 72 (repealed). Kirby In Naismith v McGovern42 and in Mallan v Lee43, the Full Court of this Court considered the nature and incidents of the offences created by s 230 of the federal income tax legislation. That section provided offences against that legislation in some ways similar to those in question here. Nevertheless, the precise questions decided in Naismith and Mallan, both as a matter of legal authority and of substance, were different from the questions that must now be resolved. The present questions concern the Customs Act and Excise Act and the different attributes of the proceedings for which they respectively provide. This said, it is fair to state, as the Customs did, that much decisional law, in this Court44, by a Justice before his appointment to this Court45, by intermediate appellate courts46 and by single judges after careful examination of authority47, has concluded that the standard of proof applicable to prosecutions of offences of the kind in question is the civil and not the criminal standard. True, there are contrary indications in the course of this judicial authority. The penal features of the statutory language ("offence", "prosecution"), the nature of the consequences ("conviction") and the public purposes of the applicable law have led some judges to contrary conclusions concerning the standard to be applied to the proof of the elements of the offence. In a number of instances where the question of the standard of proof arose in this Court, 42 (1953) 90 CLR 336. 43 (1949) 80 CLR 198. 44 eg R v McStay (1945) 3 AITR 209 at 212; McGovern v Hillman Tobacco Pty Ltd (1949) 4 AITR 272 at 275. 45 Jackson v Butterworth [1946] VLR 330 at 332 per Fullagar J; Jackson v Gromann [1948] VLR 408 at 411 per Fullagar J. 46 eg Evans v Lynch [1984] 3 NSWLR 567 at 570; Evans v Button (1988) 13 NSWLR 57 at 73-75; Bridal Fashions Pty Ltd v Comptroller-General of Customs (1996) 17 WAR 499 at 503; Wong v Kelly (1999) 154 FLR 200 at 209-210 [57]-[64]; Chief Executive Officer of Customs v Jiang (2001) 111 FCR 395 at 414-415 [77]-[80], 415 [82], 415-416 [86]-[87]. Some of these cases concern prosecutions in summary jurisdictions upon which see Customs Act, s 245(1). 47 eg Button v Evans [1984] 2 NSWLR 338 at 349-353; Comptroller-General of Customs v Jayakody unreported, Supreme Court of Victoria, 9 November 1993 per Byrne J; Chief Executive Officer of Customs v Amron (2001) 164 FLR 209 at 226 [59]-[60]; Chief Executive Officer of Customs v Nasher (2002) 130 A Crim R 148; Chief Executive Officer of Customs v Australian Petroleum Supplies Pty Ltd [2002] VSC 223. Kirby individual Justices have held, or assumed, that the criminal standard would apply to the proof of the offence48. There are suggestions of similar opinions in dicta in this Court concerning the approach to be taken to penal laws generally49. There are like remarks of an explicit50 and implicit51 character in other courts. I emerge from a reading of these authorities without a conviction that they point in a consistent direction. Opinion in the Brabham case: This lack of clarity in judicial authority has not changed in the 15 years since I last considered the features of a "Customs prosecution for the recovery of a penalty". Re-reading what I said in Jack Brabham Holdings Pty Ltd v Minister for Industry, Technology and Commerce52 ("Brabham"), I see no reason to alter the opinion expressed there. Indeed, the intervening years, and many more cases, have reinforced the conclusion I then stated53: "[F]or some purposes the nature of a Customs prosecution for the recovery of a penalty may be assimilated to civil process (as s 247 contemplates). However, that does not stamp on such proceedings, for all purposes, the badge of a civil action. It could scarcely be so, having regard to the nature of such proceedings, for the reasons pointed out by Mahoney JA in Evans v Button54. A long series of cases, including in the High Court of Australia, dealing with s 247 and its equivalents in other statutes had made 48 Henty v Bainbridge-Hawker (1963) 36 ALJR 354 per Owen J (the relevant extract, not there reproduced, is noted in Button v Evans [1984] 2 NSWLR 338 at 351); Scott v Geoghegan & Sons Pty Ltd (1969) 43 ALJR 243 at 246 per Taylor J. 49 eg R v Associated Northern Collieries (1910) 11 CLR 738 at 741; Wilson v Chambers & Co Pty Ltd (1926) 38 CLR 131; R v Adams (1935) 53 CLR 563 at 567-568; He Kaw Teh v The Queen (1985) 157 CLR 523; Waugh v Kippen (1986) 160 CLR 156 at 164. 50 Comptroller-General of Customs v D'Aquino Bros Pty Ltd (1996) 85 A Crim R 517 51 Murphy v KRM Holdings Pty Ltd (1985) 8 FCR 349 at 353-354; Ludwigs Canberra Bond Cellar Pty Ltd v Sheen (1982) 46 ACTR 13 at 23; Research and Development Engineers Pty Ltd v Lanham (1983) 49 ALR 351 at 365; Stitt v CBI Constructors Pty Ltd (1990) 93 ALR 325 at 339. 52 (1988) 85 ALR 640. 53 (1988) 85 ALR 640 at 652. 54 (1988) 13 NSWLR 57 at 73. Kirby the point that the section has a hybrid characteristic55. Thus the fact that … proceedings for the recovery of a statutory penalty do not amount to a 'criminal cause or matter' cannot determine the question now before this court … In many cases the distinction between civil and criminal proceedings will be academic as it was in McGovern v Hillman Tobacco Pty Ltd56". In Brabham, the Court of Appeal of New South Wales was not concerned with the applicable standard of proof. Instead, it had to identify the character of the proceedings for the purpose of deciding the rule applicable to an accused's application for a stay of prosecution on the ground that its continuance was oppressive or unjust. According to authority, accepted in that case, such a stay might be granted in civil57 as well as criminal proceedings. However, because, in the case of civil proceedings, it was normal to invoke a statute of limitations (such as exists for prosecutions under the Customs Act58), and because of the other incidents of civil proceedings, courts are more reluctant to provide stays in such proceedings than in criminal proceedings found oppressive or unjust. It was in the context of the classification of the proceedings in Brabham for that purpose that I remarked59: "… I do not consider that s 247 alters the fundamental nature of the present proceedings. They remain proceedings based upon provisions found amongst the penal provisions of the Act. They are brought to recover penalties for 'offences'. Such penalties are imposed when a person is found 'guilty' of an 'offence' which is 'punishable' upon 'conviction'. The offences are expressed in terms of criminal wrongdoing. At the relevant time, the conviction, although not immediately resulting in a risk of imprisonment, could lead on to loss of liberty for a second conviction. Conviction necessarily involves public opprobrium and condemnation for such an offence is one against the public law60. Seeking to characterise these proceedings for the purpose of the application of the relevant rule for 55 R v Associated Northern Collieries (1910) 11 CLR 738 at 741. 56 (1949) 4 AITR 272 at 275 per Williams J (HC). 57 Birkett v James [1978] AC 297; Stollznow v Calvert [1980] 2 NSWLR 749; Herron v McGregor (1986) 6 NSWLR 246 at 253 per McHugh JA. 58 Customs Act, s 249. 59 Brabham (1988) 85 ALR 640 at 653 (original emphasis). 60 Evans v Button (1988) 13 NSWLR 57 at 74 per Mahoney JA. Kirby a stay for abuse of process, they are much more closely akin to criminal proceedings, properly so called, than to purely civil litigation between parties." Brabham, and many decisions before and since (including in this Court), illustrate the importance of the point upon which Hayne J insists in his reasons in this case. With it I agree. Given the ambivalent elements in the provisions of the federal Acts in question (and what I call the "hybrid" characteristics of the proceedings envisaged in the two Acts), two important considerations must be kept in mind. The first is that it is erroneous to seek "to classify proceedings as either 'criminal' or 'civil' such that never the twain would meet"61. The two categories do not cover the relevant universe62. Secondly, in applying particular rules or procedures characteristic of criminal or civil proceedings to the provisions of the federal Acts (or in deriving inferences from the legislation as to the availability or unavailability of such rules or procedures) it is essential to address the precise question that has to be resolved. There is no universal approach that can be adopted whatever the question in issue or the procedure to be classified. In each case, it is necessary for the identified purpose to focus attention on the precise statutory language. Conclusion – an open question: It follows that, although I would be prepared to concede that much previous judicial authority, probably a preponderance of it, supports the Customs' submission that the standard of proof to be applied in the prosecutions of the respondents is the standard applicable in civil cases, no binding rule of this Court so holds. Conflicting opinions have been expressed on the point, including in this Court. Accordingly, it is necessary to resolve the controversy in the usual way. This means starting with the requirements of the legislative language. To the extent that that language is ambiguous or uncertain, regard may be had to analogous developments of the law and to relevant considerations of legal principle and legal policy63. Requirements of the statutes and legal policy Requirements of the Acts: The provisions of s 247 of the Customs Act (and the equivalent provisions in the Excise Act64) obviously contain a critical 61 Brabham (1988) 85 ALR 640 at 650. 62 Reasons of Gummow J at [30]; reasons of Hayne J at [114]. 63 Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 at 252; Northern Territory v Mengel (1995) 185 CLR 307 at 347; Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 77 ALJR 40 at 53 [67]; 192 ALR 561 at 578-579 ("Daniels Corp"). Kirby instruction of the Parliament concerning the approach that is to be taken to prosecutions of the kind involved in these proceedings. So long as the provision in the law is constitutionally valid (a question contingently raised by the respondents) it is the duty of courts to give effect to it. Consonant with authority, they may do so with greater confidence because the provision relates to the conduct of prosecutions "in a court". In terms, provisions such as s 247 accord a large measure of control over the prosecution to the "Court or a Judge" concerned. Legislation of this kind is normally given an ample interpretation because of the designated repository of the stated powers65. Three other features of the language of s 247 are relevant to the approach to be taken to its ambit. The first is the very broad scope of the section which applies to "[e]very Customs prosecution in a court". Secondly, the section, on its face, reflects both its historical origins66 and the residual provision it makes for the observance of "the usual practice and procedure of the Court in civil cases". Without knowing of the history of prosecutions in revenue cases for debts to the Crown, the instruction of s 247 of the Customs Act67 would seem remarkable, even astonishing. This is because, normally, one would expect that the statutory features and the predominantly penal character of such prosecutions would attract the general rules of practice and procedure observed in criminal cases. The history of Crown revenue law helps to explain the origins of s 247 (and its equivalent in the Excise Act). But it does not diminish the exceptional particularity of the provision by which the Parliament has stated its will. Thirdly, there never having been in this country rules established for Crown suits in revenue matters and no particular directions having been given by the court or a judge in the respondents' proceedings, attention is focussed on the remaining phrase in s 247. This is the portion of the section that would ordinarily be applied and which applies to this case. In terms, it imports into prosecutions, such as those commenced in these proceedings, "the usual practice and procedure of the Court in civil cases". The issue, so far as this legislative 65 Knight v FP Special Assets Ltd (1992) 174 CLR 178 at 185-191, 202-203, 205; Owners of "Shin Kobe Maru" v Empire Shipping Co Inc (1994) 181 CLR 404 at 420-421; CDJ v VAJ (1998) 197 CLR 172 at 201 [110]; Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at 423-424 [110]. 66 In its reference to "rules of practice (if any) established by the Court for Crown suits in revenue matters". This is explained in the reasons of Hayne J at [118]. 67 And of its equivalent in the Excise Act, s 136. Kirby instruction is concerned, is whether the standard of proof applicable to the establishment of the elements of the offence falls within that phrase. With Hayne J68, I would accept that the topic of the standard of proof in legal proceedings is one that is quite commonly addressed in Australian law as an aspect of the law of evidence. It is so treated in the Evidence Act 1995 (Cth)69. There are similar provisions in earlier federal legislation. Thus s 79 of the Judiciary Act, providing for the applicability of State and Territory laws to courts exercising federal jurisdiction, enacts that such "laws relating to procedure, evidence, and the competency of witnesses, shall … be binding on all Courts". In federal legislation, the specified subjects have long been treated as aspects of adjectival law, suitable on the face of things to be "picked up" and applied in federal proceedings. However, it is at this point that I feel the hesitation that I have expressed to embracing the reasoning of Hayne J. When I take into account the scope of the language of s 247 (and its equivalent in the Excise Act), the words used, the historical and unusual content of the legislative instruction, the power it gives to the courts and the setting of the provisions in federal statute law more generally, I find it difficult to say that this particular aspect of the adjectival law of evidence (the standard of proof) cannot, as a matter of language, be included in the phrase "the usual practice and procedure of the Court in civil cases". Unlike Hayne J70, I do not regard the words in the section that surround the reference to "the usual practice and procedure of the Court" as throwing much light on the meaning of the critical phrase. I accept (as the cases demonstrate) that the intended ambit of "the usual practice and procedure of the Court in civil cases" is not beyond doubt. In one sense, the determination of the standard of proof in a particular proceeding is a matter of evidence law and thus of "practice and procedure". Yet in another sense it is something more fundamental71. It relates to the very character of the proceeding. It is not a matter of detail for the carrying on of the proceeding. It is an attribute of the proceeding that ultimately governs the evaluation of the accusation when the evidence for the prosecution is completed. In this sense, it concerns substantive criminal liability. 68 Reasons of Hayne J at [122]. 69 Pt 4.1 (ss 140-142). 70 Reasons of Hayne J at [125]. 71 See reasons of Gummow J at [17], [32] where he discusses common law principles of criminal liability. Kirby Whilst the assignment of the burden of proof and the identification of the standard of proof can be of critical importance to the conduct of the trial, thereby partaking of certain features of "practice and procedure", each is also, arguably, something more than that because each affects, in a way, the very character of the trial. Each is therefore arguably more than simply a matter of "practice and procedure". This is a chief consideration that ultimately causes me to agree with Gummow J72 that "[s]ubstantive rights are involved". What is the proper way to resolve what I accept to be an ambiguity in the statutory reference to the "usual practice and procedure of the Court"? The resolution is not to be found within the four corners of the section. Nor is it to be discovered in the verbiage of the surrounding sections. Gummow J and Hayne J each look to principles of the common law, consideration of which is required by s 4 of the Crimes Act73 or otherwise74. In my view, the ambiguity is to be resolved with the assistance of larger considerations of legal principle and policy, the guidance afforded to this Court by its recent approach to an analogous question and a consideration of the fact that the Parliament omitted to address the issue that now falls for decision, although it had a perfect opportunity to do so. Abrogation of basic entitlements: This Court has consistently held that, to deprive a person of a fundamental right or privilege recognised by the law, clear legislative provisions are required. This is especially so where that right or privilege may be viewed as a basic doctrine of the law75 or, in effect, a "practical guarantee of fundamental rights"76 and something more than a mere rule of evidence law applicable in proceedings77. In part, this approach to statutory meaning arises from the respect that courts accord to the legislature assuming, as they do, that the Parliament would not intend drastic consequences for ordinary civil entitlements without expressly considering and approving them. In part, the 72 Reasons of Gummow J at [33]. See also reasons of Hayne J at [133]. 73 Reasons of Gummow J at [32]. 74 Reasons of Hayne J at [134]. 75 Goldberg v Ng (1995) 185 CLR 83 at 121 per Gummow J (diss); Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 505, 76 Goldberg v Ng (1995) 185 CLR 83 at 121. 77 O'Reilly v State Bank of Victoria Commissioners (1983) 153 CLR 1. Kirby rule derives from a judicial recognition that "vigilance is required against accidental and unintended erosions of the right"78. From its earliest days79 and its establishment80 right up to the present time81, this Court has insisted upon this approach. Thus, in Cassell v The Queen82, I relied upon it to support an elementary proposition in the context of criminal liability: in many cases decided since "It is a fundamental principle of the criminal law in Australia that, save for those rare exceptions where a legislature has provided otherwise, the burden rests on the prosecution to prove beyond reasonable doubt every element necessary to establish the criminal offence charged. No authority is required for this proposition. This Court has a duty to safeguard the principle against attempted erosion. … Other legal systems have adopted different institutions, rules and procedures for the conduct of criminal trials. These may sometimes appear more rational, effective and efficient. But the high measure of individual liberty which is enjoyed in Australia is, in part, attributable to the stringent limits which the law places upon the state when it prosecutes an individual for a crime. It must then prove every fact necessary to support the legal elements of the offence." It might be said that the differentiation between the civil and criminal standard of proof is a peculiarity of the common law and, unlike other features of criminal process, cannot be regarded as a matter of basic doctrine or of 78 Daniels Corp (2002) 77 ALJR 40 at 56 [85]; 192 ALR 561 at 583. See also Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 523. 79 Potter v Minahan (1908) 7 CLR 277 at 304. 80 Ex parte Walsh and Johnson; In re Yates (1925) 37 CLR 36 at 93; Coco v The Queen (1994) 179 CLR 427 at 435-438. 81 eg Malika Holdings Pty Ltd v Stretton (2001) 204 CLR 290 at 328 [121]; Daniels Corp (2002) 77 ALJR 40 at 59-60 [105]; 192 ALR 561 at 588. 82 (2000) 201 CLR 189 at 194 [24]-[25]. Kirby fundamental human rights. For example, the International Covenant on Civil and "Everyone charged with a criminal offence shall have the right to be presumed innocent until proved guilty according to law." This provision is not, as such, part of Australian municipal law. It may influence the developments and exposition of the law85. Yet the words used leave unanswered the characterisation of the "offences" for which the respondents have been prosecuted and the particular question of the burden and standard of proof required in establishing such offences. Because it would be normal in Australian law to expect that an "offence", the subject of "prosecution" with serious consequences for a person convicted86, would be proved beyond reasonable doubt, a provision depriving the party accused of that normal protection is one that, potentially, affects basic civil entitlements. It is therefore a matter upon which the legislature may be expected to speak clearly and unequivocally. It follows that general words, such as those appearing in s 247 of the Customs Act (and the equivalent provision in the Excise Act), will not suffice to work such a deprivation. Analogous decision in Daniels Corp: The recent decision of this Court in Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission87 ("Daniels Corp") illustrates the approach that the Court takes to the construction of federal legislation which is propounded to abrogate an important right, privilege or immunity88. Self-evidently, the standard of proof 83 Done at New York on 19 December 1966, 1980 Australia Treaty Series 23. Entered into force for Australia 13 November 1980 in accordance with Art 49. 84 Art 14.2. I have not overlooked the question whether the rights stated in the ICCPR apply to corporations such as the first respondent. The Customs Act certainly applies without differentiation to natural persons as well as to legal persons such as the first respondent and the point remains good as one of legal principle. 85 Mabo v Queensland [No 2] (1992) 175 CLR 1 at 42 per Brennan J. 86 Both under the Customs Act and the Excise Act and also, as Hayne J points out, under the Constitution and other laws. See reasons of Hayne J at [138]. 87 (2002) 77 ALJR 40; 192 ALR 561. 88 (2002) 77 ALJR 40 at 43 [11], 49 [43], 60 [106], 65-66 [132]; 192 ALR 561 at 565, Kirby applicable to the trial of a "prosecution" for an "offence" against the Acts in question in these proceedings will often be critical to the success or failure of the prosecution. Many a criminal prosecution is won or lost on arguments concerned with the proof, or failure of proof, of the elements of the offence. The enactment of provisions facilitating the proof of offences under the two federal Acts by the averment of matters in the originating process89 increases rather than diminishes the significance of the standard of proof which the law demands of the prosecutor to achieve success. Therefore, in the context of a statutory prosecution said to relieve the prosecutor of the burden which the law would usually impose upon a "prosecutor" for proof warranting "conviction" of an "offence", clear statutory language is required. This is what this Court held in Daniels Corp. Like the first respondent, the complaining party in that appeal was a corporation. But the legal principle was held equally applicable to such a case90. In many respects, the principle of law that assigns to a prosecutor the burden of proving an offence to a standard beyond reasonable doubt is even more fundamental to the rights of an accused than the facility of legal professional privilege, the purported abrogation of which was in issue in Daniels Corp. It follows that, consistently with the recent and unanimous opinion of this Court in that case, the general language of s 247 relied upon by the Customs in this appeal did not abrogate the criminal standard of proof in the case of these prosecutions. Even before Daniels Corp was decided, McHugh J in Witham v Holloway91 (admittedly in a context different from this) said that "contemporary notions of justice" would be offended if a party were to be punished, including by imprisonment, for failure to comply with an order "the breach of which has only been proved on the balance of probabilities". Where, as in the present case, punishment and public opprobrium attach, with other consequences, to a successful prosecution under the Customs Act and the Excise Act, it can equally be said that contemporary notions of justice would be offended if such results could flow, without clear authority of law, by proof of an "offence" on the 89 Customs Act, s 255(1); Excise Act, s 144(1). See reasons of Hayne J at [141]. 90 Daniels Corp (2002) 77 ALJR 40 at 60 [108]; 192 ALR 561 at 589 applying R (Morgan Grenfell & Co Ltd v Special Commissioner of Income Tax [2003] 1 AC 91 (1995) 183 CLR 525 at 548. See also Smith v Corrective Services Commission (NSW) (1980) 147 CLR 134 at 139; Waugh v Kippen (1986) 160 CLR 156 at 164; Piper v Corrective Services Commission of NSW (1986) 6 NSWLR 352 at 361. Kirby balance of probabilities. What is in issue is more than the words of the legislation. In issue is the substance of the prosecutor's obligation if it wishes to secure outcomes so harmful to an accused. Failure of legislative reform: A third consideration reinforces this conclusion. Although the Federal Parliament has had ample opportunity to clarify, so far as it could, the issue now under consideration, it has failed to do so92. Although the Customs Act and the Excise Act have been regularly amended since the predecessors to the general provisions invoked by the Customs were enacted, no occasion has been taken to remove the uncertainty. It is an uncertainty evidenced by countless judicial remarks, including in this Court. When the Evidence Act 1995 (Cth) was enacted, the opportunity was not taken, by way of cross-reference to Pt 4.1 of that Act ("Standard of proof"), to put at rest the doubts that had been expressed in the course of many decisions. Even more striking is the failure of the Parliament to address those doubts when the Law and Justice Legislation Amendment (Application of Criminal Code) Bill 2000 (Cth) was before it. In the Explanatory Memorandum93 distributed with that Bill, the Minister explained that the proposed s 5AA of the new federal Criminal Code did not apply to offences against the Customs Act. This distinction was justified on the basis of the "unusual nature" of most such offences. The Minister pointed out that whilst some offences against the Customs Act were "purely criminal in nature, such as the narcotic drug import and export offences under Part XIV of the Act", there were other offences that involved "monetary penalties". These, she said, were dealt with differently in accordance with the choice of the court in which they were tried94. The Minister noted the exception of Queensland (inferentially, a reference to these proceedings). She acknowledged that the resulting "anomaly is not logical". She promised future review of "these offences" making explicit reference to ss 247 and 248 of the Customs Act. The Minister went on95: 92 Australian Law Reform Commission, Customs and Excise, Report No 60, (1992), vol II at 171 [14.13]. 93 Australia, Senate, Explanatory Memorandum, Law and Justice Legislation Amendment (Application of Criminal Code) Bill 2000 (Senator Vanstone) at 164 94 cf Customs Act, s 245(1). 95 Australia, Senate, Explanatory Memorandum, Law and Justice Legislation Amendment (Application of Criminal Code) Bill 2000 at 164 [595]. Kirby "It is therefore considered that the least complex solution is to apply critical aspects of the general principles in Chapter 2 of the Criminal Code to all Customs prosecutions … At the same time the provision will not apply Parts 2.4, 2.5 and 2.6 of Chapter 2 … in recognition that those aspects may not translate easily to 'Customs prosecutions'. For example, the fundamental difference between criminal and civil matters – the burden and standard of proof – will be left to the existing law rather than applying the codified provisions in Part 2.6 [of the Criminal Code]. As is the case now, the standard of proof will depend on the court in which the matter is heard. If it is dealt with as a criminal matter, the standard of proof will remain beyond reasonable doubt." When the Parliament had the opportunity, as it did in 2000, to remove the uncertainties and the acknowledged "anomalies", and omitted to do so, it is specially appropriate for this Court to apply the basic principle reaffirmed in Daniels Corp. To apply that principle in such a case is, in effect, to require the Parliament, if it wishes to have a lesser standard of proof in revenue prosecutions, to address explicitly the issue which the parties have argued before this Court. Such an obligation obliges the Parliament to determine the important issues of principle involved. It is then the Parliament, not the courts, that accepts the responsibility (as it should) for any enacted departure from the basic legal principle that ordinarily applies to proof of the elements of penal offences. Where, so recently, the Parliament has failed to shoulder that responsibility, I see no reason why this Court should do anything to relieve it of its obligation. Conclusion – the criminal standard: It follows that the general language of s 247 of the Customs Act (and s 136 of the Excise Act) is not sufficient to relieve the prosecutor in a prosecution of the offences in question in these proceedings of the standard of proof normally applicable to the proof of the elements of an "offence". That subject does not fall within the "usual practice and procedure of the Court in civil cases". If the general principle of the common law governing criminal liability is to be altered in this respect for prosecutions under the Customs Act or the Excise Act, clear and express legislation is necessary. No such alteration has occurred. Application of the Evidence Act 1977 (Q) This leaves the apparent discordancy between the foregoing conclusion and the conclusion that s 247 of the Customs Act and s 136 of the Excise Act operate to pick up and apply to the federal jurisdiction invoked in this case those provisions of the Evidence Act 1977 (Q) that would apply in civil cases in the Supreme Court of Queensland if that Court were exercising State jurisdiction. Kirby On this question I agree with Gummow J and Hayne J96. I also agree with the views expressed in the Court of Appeal by McMurdo P97. There is no reason why, in this respect, the general provisions of the respective federal Acts do not apply according to their terms, which are clear in their expression. The applicable law of evidence clearly represents a matter of "practice and procedure". If there is a resulting apparent discordancy between the answers to the reserved questions it is one mandated by the terms of the applicable federal legislation, properly understood. The constitutional argument does not arise The conclusion on the applicable standard of proof makes it unnecessary to consider the constitutional argument raised by the respondents only in the context of the questions concerning the standard of proof. As those questions are resolved in favour of the respondents, I will refrain from addressing the constitutional argument. Orders I agree in the orders proposed, and the answers to the questions contained, in the reasons of Hayne J. 96 Reasons of Gummow J at [40]; reasons of Hayne J at [146]-[148]. 97 Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2001) 188 ALR 493 at 504-505 [36]. Hayne HAYNE J. After federation, the Customs Act 1901 (Cth) and the Excise Act 1901 (Cth) were among the first Acts passed by the new Parliament of the Commonwealth. (They were Act Nos 6 and 9 of 1901.) Part XIV of the Customs Act provided for what it called "Customs Prosecutions". Section 244 of the Customs Act provided that: "Proceedings by the Customs for the recovery of penalties under this Act or for the condemnation of ships or goods seized as forfeited are herein referred to as Customs Prosecutions." Part XI of the Excise Act made equivalent provisions for "Excise Prosecutions"98. The provisions regulating Customs prosecutions and Excise prosecutions have been amended in various ways since they were first enacted, and it will be necessary to notice some of those amendments. In all fundamental respects, however, the scheme of the provisions has remained unchanged. The central issues in this appeal concern what standard of proof is to be applied in proceedings of this kind and what statutory provisions regulate the admissibility of evidence tendered in them. Resolution of those issues will require reference to some historical matters. Before dealing with those matters it is necessary to record the steps that have been taken in the present proceedings. The present proceedings its amended statement of claim The appellant (whom it is convenient to refer to simply as "the Customs") commenced proceedings in the Supreme Court of Queensland by writ of summons. The three respondents in the present appeal were named as defendants. the Customs sought (i) declarations that each of the respondents was "liable to conviction for offences" contrary to identified sections of the Customs Act and Excise Act, (ii) "[t]he conviction of the first, second and third [respondents]" for offences contrary to those sections of the Customs Act and Excise Act, (iii) "[a]n order for recovery of penalties" against the respondents pursuant to those Acts, (iv) "[a]n order pursuant to s 21B of the Crimes Act 1914" that the respondents "make reparation to the Commonwealth of Australia", and (v) costs and further or other relief. The respondents filed a defence to this amended statement of claim. 98 Section 133 of the Excise Act 1901 provided that "Proceedings by the Customs for the recovery of penalties under any Excise Act or for the condemnation of goods seized as forfeited are herein referred to as Excise Prosecutions." In both the Customs Act and the Excise Act, the proceedings are referred to as "Customs prosecutions" and "Excise prosecutions" in all except the provisions defining the terms, but nothing turns on this oddity. Hayne The parties then joined in seeking, and obtaining, an order99 for the separate trial of certain questions before trial of the action. Two questions concerned the standard of proof; two concerned the application of the Evidence Act 1977 (Q) to the proceedings. It is important to notice the form of the questions. The questions about standard of proof asked "What is the standard of proof required of [the Customs] ... in order for [it] to obtain convictions for offences" against, in the one case, specified provisions of the Customs Act and, in the other, specified provisions of the Excise Act. That is, the questions assumed that the Customs was entitled to the second form of relief sought in the amended statement of claim, namely, conviction of the respondents for offences against the Customs Act or Excise Act. The questions about the Evidence Act asked whether the proceedings were "criminal proceedings for the purposes of the Evidence Act". At first instance100, Atkinson J ordered that the questions about standard of proof should be answered "the civil standard of proof" and that the questions about the Evidence Act should be answered "no". The present respondents appealed to the Court of Appeal of Queensland. That Court held101, by majority (Thomas JA and Byrne J, McMurdo P dissenting), that the appeal should be allowed, the questions about standard of proof be answered "Proof beyond reasonable doubt", and the questions about the Evidence Act be answered "yes". Some matters of history Provisions of the kind found in Pt XIV of the Customs Act and Pt XI of the Excise Act have a long history. Their antecedents lie in England, in proceedings in the Exchequer for recovery of sums owed to the Crown. Sections 245 and 247 of the Customs Act (and their equivalent provisions in the Excise Act102) allude to that history. As originally enacted, s 245 of the Customs Act provided that: "Customs prosecutions may be instituted in the name of the Minister by action information or other appropriate proceeding – 99 Pursuant to Ch 13, Pt 5 of the Uniform Civil Procedure Rules 1999 (Q). 100 Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2000) 179 ALR 563. 101 Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2001) 188 ALR 493. 102 ss 134 and 136. Hayne In the High Court of Australia; or In the Supreme Court of any State; and when the prosecution is for a pecuniary penalty not exceeding Five hundred pounds or the excess is abandoned the Customs prosecution may be instituted in the name of the Collector in (c) Any County Court District Court Local Court or Court of summary jurisdiction." Section 247, as originally enacted, provided: "Every Customs prosecution in the High Court of Australia or the Supreme Court of any State may be commenced prosecuted and proceeded with in accordance with any rules of practice established by the Court for Crown suits in revenue matters or in accordance with the usual practice and procedure of the Court in civil cases or in accordance with the directions of the Court or a Judge." Both ss 245 and 247 have been amended since they were first enacted103. The courts in which Customs prosecutions may be brought include courts other than the State Supreme Courts and no longer include this Court. No longer are they instituted in the name of the Minister. Section 245 still refers to the institution of a Customs prosecution "by action, information or other appropriate proceeding". Section 247 still refers to the rules of practice established for Crown suits in revenue matters but adds to that reference, the words "if any". The relevant provisions of the Excise Act have also been amended but are, in substance, identical in relevant respects to those provisions of the Customs Act previously mentioned. The references to instituting proceedings by information and to "rules of practice ... established ... for Crown suits in revenue matters" take on significance when some matters of history are noticed. First, amounts owed to the Crown for customs duty, or as a penalty for not paying customs duty when due, were, at least from the 18th century, and the enactment of 8 Geo I c 18, recoverable by proceedings commenced in the Exchequer by information. The procedure then followed was, to the modern eye, a procedure having at least some similarities 103 Section 247 now provides: "Every Customs prosecution in a court referred to in subsection 245(1) may be commenced prosecuted and proceeded with in accordance with any rules of practice (if any) established by the Court for Crown suits in revenue matters or in accordance with the usual practice and procedure of the Court in civil cases or in accordance with the directions of the Court or a Judge." Hayne with criminal procedure. Upon the information being filed, a writ of capias would issue for the arrest of the debtor to answer the matters charged in the information104. Upon arrest, the debtor would stand committed to prison unless admitted to bail. But such proceedings were not, at the time, seen as anything more than "the king's action of debt"105. Procedures to be followed in pursuing claims of this kind, in England, were much affected by statute. As Dixon CJ pointed out in Bainbridge-Hawker v The Minister of State for Trade and Customs106, consideration of the history of Customs prosecutions must take account of those statutes. Dixon CJ made particular reference to 26 Geo III c 77, 16 & 17 Vict c 107, 39 & 40 Vict c 36 and 42 & 43 Vict c 21 but, for present purposes, it is not necessary to notice the detail of those provisions. What is important is that they were statutory procedures. Developments that occurred in connection with the jurisdiction of the Exchequer, and the rules governing procedures in what s 247 of the Customs Act was later to refer to as "Crown suits in revenue matters", are also important. Of those developments, two warrant particular mention. First, by 22 & 23 Vict c 21, practice and procedure on the revenue side of the Court of Exchequer was amended and, under s 26 of that Act, new rules promulgated for the conduct of such proceedings107. Those Rules were followed by the further alterations made by the Crown Suits Act 1865 (UK) (28 & 29 Vict c 104) and the Rules made under that Act108. The second change of importance was the vesting of the jurisdiction of the Court of Exchequer in the King's Bench Division of the High Court of Justice by s 16 of the Supreme Court of Judicature Act 1873 (UK) (36 & 37 Vict c 66). Although it is convenient to notice some aspects of the procedures that were followed under those Acts and Rules, the point of chief importance is that, at least by the later part of the 19th century, the procedures for recovery of sums owing to the Crown were regulated by statute and Rules of Court. No doubt it was with that history in mind that those who drafted the Customs Act and Excise Act contemplated courts making rules of practice for 104 8 Geo I c 18, s 15. See Manning, The Practice of the Court of Exchequer, 2nd ed 105 Cawthorne v Campbell (1790) 1 Anst 205 at 214 [145 ER 846 at 850]. 106 (1958) 99 CLR 521 at 547. 107 The Regulae Generales on the Revenue Side of the Court of Exchequer, commonly known as the Exchequer Rules 1860. 108 Rules of Court for Regulating the Procedure and Practice in Suits by English Information, commonly referred to as the English Information Rules. Hayne "Crown suits in revenue matters". But it also follows that 19th century English cases must be understood against the background of the applicable Acts and Rules. Further, although proceedings by English Information were central to revenue practice in England at the end of the 19th century, other procedures were available to the Crown for the enforcement of penalties under Customs legislation. The Customs Consolidation Act 1876 (UK) (39 & 40 Vict c 36) had provided, by s 247, that "suits, prosecutions, or informations for recovery of penalties under the Customs Acts" might be commenced either by writ of subpoena or capias as the first process, at the election of the Commissioners of Customs. The Annual Practice 1912 suggested that proceedings by way of capias were seldom resorted to except in cases of smuggling109. But the Customs Consolidation Act made plain that if proceedings were instituted by capias, one possible outcome of the proceedings was that the defendant might be convicted and "the person against whom such capias shall issue ... be taken to prison". It is, nonetheless, important to recognise that too much would be made of the use, in 19th century English practice, of language like "information" and processes like capias if the language and processes were taken as necessarily referring to, or invoking the processes of, the criminal law. Rather, proceedings on the revenue side had a unique history and should properly be understood as being proceedings distinctly different, not only from proceedings brought in the name of the Crown for punishment of crime, but also from proceedings for the vindication of rights and duties between subjects. That proceedings on the revenue side were different from what might be called ordinary criminal proceedings and ordinary civil proceedings is not only evident from the adoption of different procedures and methods of trial, it is a difference that was maintained, in England, even after the vesting of the jurisdiction of the Court of Exchequer in the King's Bench Division. For many years after the Judicature Acts, revenue practice in the King's Bench remained governed by the Exchequer Rules and the English Information Rules. No doubt the differences in procedures on the revenue side from the procedures in other kinds of cases, more readily classified as "civil" or "criminal", stemmed from history. But they are differences that reveal the dangers in attempting to force proceedings of this kind into a system of classification in which there are only two classes of proceedings: civil and criminal. To attempt to do that would be to ignore the history of the way in which amounts owing to the Crown, whether for customs duties or for penalties or on other accounts, were treated in England. 109 Matthews White and Stringer (eds), The Annual Practice 1912, vol 2 at 1132. Hayne Recovery of penalties When the Customs Act and Excise Act were first enacted by the new federal Parliament, no provision was made for the general regulation of claims made by the government against a citizen. In the first year of federation, provision was made for claims against the Commonwealth by the Claims Against the Commonwealth Act 1902 (Cth). The general regulation of suits by the Commonwealth, which now is found in s 64 of the Judiciary Act 1903 (Cth), was not enacted until two years later. Thus Pt XIV of the Customs Act and Pt XI of the Excise Act were enacted in order to provide for the recovery of certain penalties by the newly formed federal polity. The definitions of "Customs prosecutions" and "Excise prosecutions" refer only to the "recovery of penalties" and the condemnation of goods or other items as forfeited. Looked at in isolation from other provisions of the relevant parts of the Acts, the reference to "recovery of penalties" might, in light of the history I have mentioned, be understood as confining the definitions to proceedings in which the only relief sought is an order for the payment of money or the condemnation of goods. That would read the provisions too narrowly. Neither Pt XIV of the Customs Act nor Pt XI of the Excise Act confined attention to the recovery of money and condemnation of goods or other items. The "penalties" for which each provided evidently extended to the conviction of the defendant. So much is apparent from several provisions of each of the Acts as they stood when first enacted. Section 248 of the Customs Act provided that "an appeal shall lie from any conviction ... in the manner provided by the law of the State where such conviction ... is made for appeals from convictions"110. Section 252 of the Customs Act provided that "[n]o conviction ... shall be held void quashed or set aside" by reason of any defect or want of form111. Section 254(2) of the Customs Act treated Customs prosecutions as including prosecutions for indictable offences and for offences directly punishable by imprisonment by providing that in every Customs prosecution except for such offences the defendant should be compellable to give evidence112. Finally, the provisions of ss 258-261 of the Customs Act113, concerning the committing to gaol of what s 258114 referred to as "any convicted person" pending that person's 110 cf Excise Act, s 137. 111 cf Excise Act, s 141. 112 cf Excise Act, s 143(2). 113 cf Excise Act, ss 147-150. 114 cf Excise Act, s 147. Hayne payment of a pecuniary penalty adjudged payable, were provisions which evidently assumed that a conviction may be recorded in a Customs prosecution. Amendments made to the Customs Act and Excise Act after they were first enacted do not permit, let alone require, a different conclusion. The definition of Customs prosecutions in s 244 was amended by the Customs Act 1952 (Cth) and the Customs Amendment Act 1979 (Cth) and, after the events giving rise to the present proceedings, was repealed and substituted by the Taxation Laws Amendment (Excise Arrangements) Act 2001 (Cth). The amendments that have been made did not confine the reach of the definition in any relevant respect. The definition of Excise prosecutions in s 133 of the Excise Act had not been amended at the time of the events giving rise to the present proceedings. It, too, was later repealed and substituted by the Taxation Laws Amendment (Excise Arrangements) Act but again, even if regard were had to that new form of the definition, it did not confine the reach of Excise prosecutions in any relevant respect. Although the provisions for imprisonment of a convicted person pending payment of a pecuniary penalty have been repealed, the references to appeals against conviction115, and convictions not being held void quashed or set aside by reason of defect or want of form116, remain in both Acts. The "penalties" which may be "recovered" in a Customs prosecution or an Excise prosecution extend to conviction of the defendant. Orders that convictions be recorded in Customs prosecutions have been made in this Court117 and in other courts118. Customs prosecutions and Excise prosecutions are proceedings which now go, and always have gone, beyond being actions for debt119. In this respect, the provisions for Customs prosecutions and Excise prosecutions differ markedly from procedures for penalties and forfeitures under United States customs law120. The remedies available under those procedures do not include conviction of the defendant but are limited to the recovery of civil penalties (the maximum amount of which varies according to whether the 115 Customs Act, s 248; Excise Act, s 137. 116 Customs Act, s 252; Excise Act, s 141. 117 L Vogel & Son Pty Ltd v Anderson (1968) 120 CLR 157. 118 For example, Chief Executive Officer of Customs v Mak (2002) 135 A Crim R 562. 119 Cawthorne v Campbell (1790) 1 Anst 205 at 214 [145 ER 846 at 850]. 120 Tariff Act of 1930, 19 USC §1592 (1988). Hayne violation is fraudulent121, grossly negligent122 or negligent123) and forfeiture of the goods124. Proceedings for recovery of such monetary penalties or for forfeiture of goods have been held to be civil causes125. Provisions fixing the burden of proof to be met in such proceedings at less than the criminal standard of proof126, or casting the burden of proof on the person resisting forfeiture127, have been held not to violate constitutional due process requirements128. Even leaving aside the difficulties inherent in attempting to obtain guidance from judicial decisions made in a constitutional framework that is different in so many ways from the Australian framework, because conviction is not available under the procedures considered in those cases, they offer no guidance to resolution of the questions now under consideration. Standard of proof Against this background it is convenient to deal with the standard of proof required in these proceedings. Much of the argument advanced proceeded from some unstated premises. They should be identified. First, there was the premise, reflected in the questions, that a Customs prosecution and an Excise prosecution can lead to a conviction. The validity of that premise has already been considered. Secondly, much of the argument assumed that the questions about standard of proof could be answered by assigning either the word "civil", or the word "criminal", as an apt description of the "nature" of the proceedings. Thirdly, the argument often assumed that the standard of proof can be determined without considering who bears the onus of proof, or, what effect statutory averment provisions129 may have on proving the case. Fourthly, the argument 121 19 USC §1592(c)(1) (1988). 122 19 USC §1592(c)(2) (1988). 123 19 USC §1592(c)(3) (1988). 124 19 USC §1592(c)(5) (1988). 125 Snyder v United States 112 US 216 (1884); Friedenstein v United States 125 US 126 19 USC §1592(e) (1988). 127 19 USC §1615 (1988). 128 United States v One 1977 36 Foot Cigarette Ocean Racer 624 F Supp 290 (1985); United States v One Beechcraft King Air 300 Aircraft 107 F 3d 829 (1997). 129 Customs Act, s 255; Excise Act, s 144. Hayne assumed that what was to be proved to the requisite standard of proof could be identified in the present case. These last two assumptions will require further consideration. It is enough to say, for the moment, that all four assumptions illustrate the difficulties that attend the ordering of the separate trial of questions of law divorced from a factual substratum of sufficient particularity130. The questions which were asked in the present case were questions of law, not questions of mixed law and fact. Unlike the questions considered in Bass v Permanent Trustee Co Ltd131, they were not hypothetical questions. Nonetheless, the isolation of the questions of law about standard of proof from any reference to the elements or issues to be proved or determined, and from any reference to who bears the onus of establishing relevant propositions, or how that proof could be, or has been, attempted, leads to some difficulty. The requirements of the Acts Arguments founded on classification of the proceedings as "civil" or "criminal" as determinative of the standard of proof, must fail. As reference to the historical matters mentioned earlier reveals, the classification proposed is, at best, unstable. It seeks to divide the litigious world into only two parts when, in truth, that world is more complex and varied than such a classification There are proceedings with both civil and criminal acknowledges. characteristics: for example, proceedings for a civil penalty under companies132 and trade practices133 legislation. The purposes of those proceedings include purposes of deterrence, and the consequences can be large and punishing. In any event, this chain of reasoning, from an a priori classification to a conclusion about standard of proof, treats the relevant Acts as providing no more than background information when, in truth, it is with the terms of the Acts that the inquiry must begin. (For the same reason, decisions about the operation of other statutory provisions offer little assistance134.) Sections 247 of the Customs Act and 136 of the Excise Act deal with how Customs prosecutions and Excise prosecutions "may be commenced prosecuted 130 Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334. 131 (1999) 198 CLR 334 at 354-358 [43]-[54]. 132 Corporations Act 2001 (Cth), Pt 9.4B (ss 1317DA-1317S). 133 Trade Practices Act 1974 (Cth), s 77. 134 First Indian Cavalry Club Ltd v HM Commissioners for Customs and Excise [1998] SC 126; Han v Customs and Excise Commissioners [2001] 1 WLR 2253; [2001] 4 All ER 687. Hayne and proceeded with". Those three aspects of the matter are to be governed by rules of practice, established by the court in which the proceeding is brought, for Crown suits in revenue matters, or "in accordance with the usual practice and procedure of [that] Court in civil cases", or in accordance with the directions of the court or a judge. Is standard of proof a matter of practice and procedure? The Customs submitted that the standard of proof to be applied was a matter of "practice and procedure" and that the civil standard of proof should, therefore, be applied, that being "in accordance with the usual practice and procedure of the [Supreme Court of Queensland] in civil cases". The Customs submitted that this conclusion found support in history, and in the present state of the authorities in this Court and in intermediate and trial courts. The Customs sought to draw particular support from Attorney-General v Radloff135 and Attorney-General v Bradlaugh136. It was submitted that the Customs Act and Excise Act should be understood as having been enacted against a background of the settled understanding, in England, that proceedings like Customs prosecutions and Excise prosecutions were civil in nature. In Radloff, the Court of Exchequer Chamber was equally divided about whether proceedings taken under s 82 of 8 & 9 Vict c 87 were properly classed as civil or criminal137. In Bradlaugh, Brett MR held that s 35 of the Crown Suits Act had resolved this difference of opinion, by providing that the revenue side of the Court of Exchequer was to be deemed to be a court of civil judicature138. By majority, the Court held that a proceeding to recover a penalty under the Parliamentary Oaths Act 1866 (UK) (29 Vict c 19) was not a "criminal cause or matter" for the purposes of the Supreme Court of Judicature Act139. Even if the opinion of Brett MR is taken as settling the question that arose in Bradlaugh, it by no means follows that Bradlaugh established any rule or principle of the width for which the Customs contended. The question presented by the statute relevant in Bradlaugh was whether the description "civil", as distinct from "criminal", should be applied to the particular proceeding. That is, 135 (1854) 10 Ex 84 [156 ER 366]. 136 (1885) 14 QBD 667. 137 (1854) 10 Ex 84 at 97-98 per Martin B, 101-102 per Platt B, 105-106 per Parke B, 108-109 per Pollock CB [156 ER 366 at 371-373, 374-376]. 138 Attorney-General v Bradlaugh (1885) 14 QBD 667 at 690. 139 Bradlaugh (1885) 14 QBD 667 at 678. Hayne the statute required classification into one of two possible categories. Bradlaugh, therefore, cannot be understood as establishing that such a method of classification is universally valid or as establishing that proceedings for recovery of penalty are necessarily "civil" in nature. The question presented by s 247 of the Customs Act and s 136 of the Excise Act is different from the question that arose in Bradlaugh. It is whether standard of proof is a matter of practice and procedure. What was said in Bradlaugh does not bear upon the question in this case. Distinctions between matters of practice and procedure on the one hand, and matters of substantive law on the other, are often made. Like the distinction between "civil" and "criminal" proceedings, the distinction between "substance" and "procedure" is, at best, unstable. Much turns on the purpose for drawing the distinction. Reference to issues of this kind, in a context very different from the present, was made in John Pfeiffer Pty Ltd v Rogerson140. It is not necessary in this case to explore the outer boundaries of this difficult field. Burden and standard of proof are commonly treated as aspects of the law of evidence. Not only are these subjects dealt with in treatises on evidence141, it is the Evidence Act 1995 (Cth) that provides for the standard of proof to be applied by federal courts in civil142 and criminal143 proceedings. These reasons will later seek to demonstrate that rules governing the admissibility of evidence fall within the expression "practice and procedure" when it is used in s 247 of the Customs Act and s 136 of the Excise Act. If that is so, why should questions of burden and standard of proof not also be regarded as falling within that expression? There are statements in earlier decisions of this Court which may appear to support the view that the burden and standard of proof in a particular kind of case is a matter of practice and procedure. In Williamson v Ah On, Higgins J said144, "the evidence by which an offence may be proved is a matter of mere procedure" and Rich and Starke JJ145 treated laws regulating the burden of proof 140 (2000) 203 CLR 503 at 542-544 [97]-[100]. 141 For example, Cross on Evidence, 6th Aust ed (2000), Ch 4. 144 (1926) 39 CLR 95 at 122. 145 (1926) 39 CLR 95 at 127. Hayne as but one species of the genus laws of evidence. Isaacs J146 adopted the very wide definition of procedure given in Dicey and Keith, Conflict of Laws147 which, as the authors said, they treated as covering the whole field of practice and the whole law of evidence. Similar statements, or approval of what was said in Williamson, are to be found in Milicevic v Campbell148, Sorby v The Commonwealth149 and Nicholas v The Queen150. What is said in each of these cases must be understood in its context. None of them decided what is meant by "practice and procedure". Williamson and Milicevic both concerned the limits of legislative power. Williamson and Milicevic held that power to legislate with respect to the subject-matters under consideration (immigration and emigration in Williamson and trade and commerce in Milicevic) extends to enacting "laws prescribing the rules of evidence and procedure to be observed in any legal proceedings, whether criminal or civil, arising in relation to that subject matter and may in particular cast the onus of proof upon either party to those proceedings"151. Sorby and Nicholas concerned the possible intersection between provisions regulating the burden or standard of proof and the requirements of Ch III of the Constitution. Sorby and Nicholas held that the particular provisions under consideration in each of those cases were not invalid for want of compliance with the requirements of Ch III of the Constitution. In each of these cases, "practice and procedure" or other similar expressions appear to have been used in a very general way: as expressions convenient for describing the methods that are employed for the resolution of controversies by the application of the judicial power of the Commonwealth. Nothing said in those cases governs the question of construction that now arises. The references in the Customs Act and Excise Act to practice and procedure in civil cases must be construed in the context which those Acts provide. Most notably, the references must be understood in a context in which there are two related features. First, the relevant subjects, which are to be regulated by the provision, are commencing prosecuting and proceeding with prosecutions. Secondly, in addition to referring to practice and procedure in civil 146 (1926) 39 CLR 95 at 109. 147 3rd ed (1922) at 761-763. 148 (1975) 132 CLR 307 at 316-317 per Gibbs J, 318-319 per Mason J. 149 (1983) 152 CLR 281 at 298 per Gibbs CJ. 150 (1998) 193 CLR 173 at 189-190 [24] per Brennan CJ. 151 Milicevic v Campbell (1975) 132 CLR 307 at 316 per Gibbs J. Hayne cases, there is reference to the three subjects I have identified being regulated by rules of practice established by a court or by directions given by the court or a judge. The standard of proof to be attained in Customs prosecutions or Excise prosecutions is not to be fixed by court-established rules of practice about commencing prosecuting or proceeding with the prosecution. Nor is it to be fixed by directions given on those subjects by a court or a judge. Standard of proof is not to be fixed by either of those methods because it does not fall within the identified subject-matters: commencing prosecuting or proceeding with the prosecution. Absent specific statutory authority it is not to be supposed that the standard of proof to be attained in a particular matter may be fixed by rules of court, or determined by direction of the court or a judge in a particular case. To hold that the standard of proof could be fixed by rules of court, or determined by judicial direction, would entail that the standard of proof to be attained in a proceeding taken under federal legislation might vary according to the court in which the proceeding is brought or might be different in different cases brought in the one court. The provisions of s 247 of the Customs Act and s 136 of the Excise Act are not to be construed as permitting such results. Neither section offers any guidance for what matters should inform a decision about such a fundamental matter as burden or standard of proof. No matter what relief might be sought in a particular Customs prosecution or Excise prosecution it would be odd indeed if the availability of that relief depended upon the giving of a direction in the particular case about which party bore the onus of proving particular issues, or upon the giving of a direction about the standard of satisfaction to be attained. When the relief in question is, or includes, conviction of the defendant, the results described could be held to follow only from the use of clear and unequivocal statutory language, in particular language requiring the conclusion that it would be open to the judge to decide in each case what standard of proof should be met. Neither of the provisions now under consideration require that conclusion. All this being so, it would be wrong to read the third source which the Acts give for the regulation of the commencement prosecution and proceeding with a prosecution (namely the rules of practice and procedure in civil cases) as dealing with the subject of standard of proof when the other two sources do not. If it is not within the power of a judge hearing a Customs prosecution or Excise prosecution to give a direction fixing the standard of proof to be attained in a particular proceeding, and if it is not within the rule-making competence of the judges of a court to make rules having that effect, the expression "the usual practice and procedure ... in civil cases" should not be construed as extending so far. Contrary to the Customs' submission, this Court's decision in Naismith v McGovern152 does not require a different conclusion. The particular question at 152 (1953) 90 CLR 336. Hayne issue in Naismith was whether, in a Taxation prosecution, a defendant was entitled to an order for discovery of documents against the Commissioner of Taxation. Part VII of the Income Tax and Social Services Contribution Assessment Act 1936 (Cth) made provision for Taxation prosecutions in terms substantially the same as those governing Customs prosecutions and Excise prosecutions. The Court held153 that, the Act providing that the procedure for obtaining an order for recovery of penalty should be governed by the civil procedure of the Court, an order for discovery should be made. In its reasons in Naismith, the Court referred to a number of cases in which statements were made about the nature of proceedings such as the present154. Of those, it is only in the two decisions of Fullagar J, as a Judge of the Supreme Court of Victoria, that any general description of the proceedings as being civil rather than criminal in their nature155 is given, and in neither of those cases was it necessary to decide a point described in such general terms. In the other decisions mentioned in Naismith, including, in particular, Mallan v Lee, nothing decisive of the questions now under consideration is said. Some decisions of trial and intermediate courts, after Naismith, may certainly be understood as suggesting that the standard of proof to be applied in proceedings of the present kind is the civil standard, not the criminal standard. It may be doubted, however, that a single dominant view has emerged. In Evans v Lynch156, the proceedings were said to be "by statute, civil proceedings". In Button v Evans, Carruthers J held157 that the applicable standard of proof was the civil standard. On appeal to the Court of Appeal of New South Wales, it was said158 that Carruthers J had also recorded that the evidence would have satisfied him on the relevant matters beyond reasonable doubt. The Court of Appeal said, of s 247159, that its purpose was to assimilate Customs prosecutions to 153 (1953) 90 CLR 336 at 341. 154 R v McStay (1945) 7 ATD 527 at 533; McGovern v Hillman Tobacco Pty Ltd (1949) 4 AITR 272; Mallan v Lee (1949) 80 CLR 198 at 209, 217-218; Jackson v Butterworth [1946] VLR 330; Jackson v Gromann [1948] VLR 408 at 411; Attorney-General v Freer (1822) 11 Price 183 at 197 [147 ER 441 at 446]. 155 Jackson v Butterworth [1946] VLR 330 at 332; Jackson v Gromann [1948] VLR 156 [1984] 3 NSWLR 567 at 570. 157 [1984] 2 NSWLR 338 at 353. 158 Evans v Button (1988) 13 NSWLR 57 at 73. 159 (1988) 13 NSWLR 57 at 74. Hayne proceedings of a civil nature. It was not argued, on appeal to the Court of Appeal160, that the trial judge had erred in approaching the standard of proof as he had. Those decisions may be contrasted with Moore v Jack Brabham Holdings Pty Ltd161 and Comptroller-General of Customs v D'Aquino Bros Pty Ltd162. In the former, Hunt J said163 that "the true nature" of a Customs prosecution was criminal, not civil, despite the civil nature of the procedure made applicable to them. In the latter, his Honour, then Chief Judge at Common Law, concluded164 that a Customs prosecution might not be brought to recover fines, as distinct from penalties, and said165 that he adhered to the conclusion he had reached in Jack Brabham Holdings that a Customs prosecution was a proceeding in relation to a criminal offence. As is apparent from what I have already said, I do not consider it useful or relevant to attempt any classification of proceedings of the present kind as civil or criminal and then argue from that classification to a conclusion about standard of proof. It is, therefore, neither necessary nor appropriate to engage in any examination of the reasoning which underpins this aspect of the decisions in Jack Brabham Holdings or D'Aquino Bros. Nor is it necessary or appropriate for me to examine the particular issues that were agitated in those cases about the applicability of proceedings for dismissal for want of prosecution166 or the availability of the Customs prosecution procedure when what is sought to be recovered is a fine167. Rather, the questions asked about standard of proof require consideration, in the first instance, of what (if anything) the Customs Act and Excise Act provide in that particular respect. They do not require a general classification of the proceedings as a whole. For the reasons given earlier, neither s 247 of the Customs Act nor s 136 of the Excise Act provides for what 160 (1988) 13 NSWLR 57 at 73. 161 (1986) 7 NSWLR 470. 162 (1996) 135 ALR 649. 163 (1986) 7 NSWLR 470 at 482. 164 (1996) 135 ALR 649 at 656. 165 (1996) 135 ALR 649 at 661. 166 Moore v Jack Brabham Holdings Pty Ltd (1986) 7 NSWLR 470 at 483. 167 Comptroller-General of Customs v D'Aquino Bros Pty Ltd (1996) 135 ALR 649 at Hayne standard of proof is to be applied. No other provision of those Acts was said to do so. The Judiciary Act – State laws and the common law The Customs Act and Excise Act not providing for what standard of proof is to be applied in proceedings of the present kind, it is necessary to consider the operation of ss 79 and 80 of the Judiciary Act. When hearing the proceedings, the Supreme Court of Queensland exercises federal jurisdiction. Section 79 of the Judiciary Act picks up and applies State laws, including the laws relating to procedure evidence and the competency of witnesses. No State law was said to prescribe the standard of proof to be applied in cases of the present kind. Section 80 therefore operates, "[s]o far as the laws of the Commonwealth are not applicable or so far as their provisions are insufficient to carry them into effect", to pick up and apply the common law as modified by the Constitution and State statute law. As Gummow J points out, at the times relevant to the present matter, s 4(1) of the Crimes Act 1914 (Cth) provided that, subject to that Act and any other Act, "the principles of the common law with respect to criminal liability apply in relation to offences against laws of the Commonwealth". That provision had effect despite s 80 of the Judiciary Act. Again, as Gummow J points out, there is undoubtedly an intimate connection, in the criminal law, between questions of burden of proof and the substantive law, a connection which is maintained by the provisions of the Criminal Code Act 1995 (Cth). Although burden of proof is closely connected with substantive rules prescribing criminal liability, I tend to prefer the view that "the principles of the common law with respect to criminal liability" to which s 4(1) of the Crimes Act referred did not include common law principles about burden and standard of proof. It is, however, not necessary to decide whether that is right because whether by s 80 of the Judiciary Act, or by s 4(1) of the Crimes Act, attention was directed in this case to the common law. (The Customs Act was later amended to apply some, but exclude some other, provisions of the Criminal Code. The Criminal Code's provisions about standard of proof are excluded. These amendments to the Customs Act neither permit nor require some different conclusion. As s 5AA(4) of the Customs Act now provides, the application of some provisions of the Criminal Code is not to be interpreted as affecting the standard or burden of proof for an offence under the Customs Act that is the subject of a Customs prosecution.) What does the common law require? Where what is sought is conviction of the defendant for an offence against a law of the Commonwealth, it must be strongly arguable that nothing short of proof beyond reasonable doubt will do. If no conviction is sought, but other relief is (as, for example, a declaration that the defendant contravened identified provisions of the relevant Act coupled with Hayne orders for payment of monetary penalties), it must be strongly arguable that, in proceedings conducted according to civil procedures, proof to the civil standard will suffice. No doubt, in accordance with well-established principle168, if the civil standard were to be applied, "the nature of the issue [would] necessarily [affect] the process by which reasonable satisfaction is attained" and "exactness of proof [would be] expected"169. Those tentative conclusions do not depend upon attributing a description of "civil" or "criminal" to the proceedings as a whole or seeking to identify some "essential character" of the proceedings. (By what process of distillation the "essential character" of proceedings could be revealed is not apparent.) Rather, the conclusions proposed focus upon, and attach significance to, the kinds of orders which the proceedings seek. In particular, proceedings are distinguished according to whether or not they seek the conviction of the defendant for an offence. As Dawson and McHugh JJ said in Maxwell v The Queen170, "[t]he question of what amounts to a conviction admits of no single, comprehensive answer". The word has long been recognised as being used in various ways171. In particular, there may well be a question whether conviction depends upon verdict or plea, or upon the sentence of the court172. What is clear, however, is that where the Customs Act and Excise Act speak of "conviction" they speak of an adjudication by the court that the defendant has contravened a provision of the Act. The adjudication sought is in no relevant way different from the adjudication that occurs when a person accused of crime pleads guilty to, or is found guilty of, that crime, and the court accepts or determines173 that the accused is criminally responsible for that offence. 168 Briginshaw v Briginshaw (1938) 60 CLR 336; Helton v Allen (1940) 63 CLR 691; Hocking v Bell (1945) 71 CLR 430; Rejfek v McElroy (1965) 112 CLR 517; Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170; 110 ALR 449. 169 Briginshaw (1938) 60 CLR 336 at 363. 170 (1996) 184 CLR 501 at 507. 171 Cobiac v Liddy (1969) 119 CLR 257 at 271 per Windeyer J; Burgess v Boetefeur (1844) 7 Man & G 481 at 504 per Tindal CJ [135 ER 193 at 202]. 172 Cobiac (1969) 119 CLR 257 at 271 per Windeyer J; Maxwell v The Queen (1996) 184 CLR 501 at 507 per Dawson and McHugh JJ, 519-521 per Toohey J, 529-531 per Gaudron and Gummow JJ. 173 Maxwell (1996) 184 CLR 501 at 509 per Dawson and McHugh JJ, 520 per Toohey J, 531 per Gaudron and Gummow JJ. Hayne Seeking to obtain the conviction of a person accused of contravening written or unwritten law lies at the heart of the criminal process. The fact of conviction is an important criterion for the operation of constitutional provisions174 and the operation of federal175 and State176 legislation. Absent statutory provision to the contrary, a conviction should not be recorded except where the requisite elements of the contravening conduct are established beyond reasonable doubt. Penal consequences Other criteria which might be used to distinguish between cases in which proof beyond reasonable doubt is necessary, and those in which it is not, are unhelpful. Apart from attempting to classify proceedings as "civil" or "criminal", the only other possible criterion advanced for consideration focused upon the penal consequences of Customs and Excise prosecutions. But penal consequences (in the form of punitive damages) can follow from proceedings which, in all other respects, would ordinarily be referred to as civil proceedings177 and it has not hitherto been suggested that proof beyond reasonable doubt is necessary before that kind of relief is ordered. Further, both federal and State companies legislation178 has provided for recovery of what are described as "civil penalties" on proof of the requisite matter to the civil standard of proof179 but the operation of those provisions did not, and does not, extend to proceedings for an offence. Characterising particular forms of relief sought in proceedings as "penal" offers little or no assistance in deciding what standard of proof should be applied. 174 s 44(ii). 175 For example, legislation governing the holding of certain statutory offices such as offices under the Aboriginal and Torres Strait Islander Commission Act 1989 (Cth), s 31(2). 176 For example, legislation governing the sentencing of offenders such as the Sentencing Act 1991 (Vic), s 8. 177 Gray v Motor Accident Commission (1998) 196 CLR 1. 178 Corporations Act, Pt 9.4B (ss 1317DA-1317S); Corporations Law of New South Wales (and other equivalent State Corporations Laws), Pt 9.4B (ss 1317E-1317S). 179 Corporations Act, s 1332; Corporations Law of New South Wales, s 1332. Hayne The significance of the averment provisions In Customs and Excise prosecutions the Customs bears the onus of proving the elements of its case. It is, nonetheless, important to notice the way in which that proof may be effected. Both the Customs Act and the Excise Act provide that the averment of the prosecutor or plaintiff "contained in the information, complaint, declaration or claim shall be prima facie evidence of the matter or matters averred"180. This provision applies to any matter so averred even if evidence in support, or rebuttal, of the matter averred is given by witnesses181. Any evidence given by witnesses in support or rebuttal must be considered on its merits and "the credibility and probative value of such evidence shall be neither increased nor diminished" by reason of the section182. Although the averment provisions of the Acts do not apply to an averment of the intent of the defendant, or to proceedings for an indictable offence or an offence "directly punishable by imprisonment"183, they are provisions which can be engaged in many proceedings in which conviction for an offence against the Customs Act or Excise Act is one of the orders sought. Indeed, in the present matter, the whole of the Customs' amended statement of claim was set out beneath the introductory words that pursuant to s 255 of the Customs Act and s 144 of the Excise Act "the plaintiff says and avers and it is the fact that". (Whether reliance on the averment provisions in this way is open to the Customs in this case is a question which was not argued and about which I express no view.) For present purposes, what is important is that although the averment provisions do not place upon the defendant the burden of disproving facts184, averments of the Customs will suffice to discharge its onus of proving those facts. It will, in every case, be a matter for the judge to say, on the whole of the material, whether the facts are established to the requisite degree of proof. The judge may, but need not, treat what is properly averred as establishing that degree of proof. Is requiring proof beyond reasonable doubt consistent with these averment provisions? If evidence is given in rebuttal of a fact averred, and that fact is an 180 Customs Act, s 255(1); Excise Act, s 144(1). 181 Customs Act, s 255(2)(a); Excise Act, s 144(2)(a). 182 Customs Act, s 255(3); Excise Act, s 144(3). 183 Customs Act, s 255(4); Excise Act, s 144(4). 184 R v Hush; Ex parte Devanny (1932) 48 CLR 487 at 507. Hayne element of a contravention in respect of which conviction is sought, how is the judge to approach the task of deciding whether the Customs has proved that fact beyond reasonable doubt? How can the judge, in those circumstances, "feel an actual persuasion"185 of the occurrence or existence of that fact? That problem is real but it is not avoided if a civil standard of proof is applied. If that were to be held to be the applicable standard of proof, it would follow from Briginshaw v Briginshaw, and like cases in that line of authority, that proof of an issue to the "reasonable satisfaction" of the tribunal of fact "should not be produced by inexact proofs, indefinite testimony, or indirect inferences"186 and that the tribunal must feel that "actual persuasion" of which Dixon J spoke in Briginshaw187. No matter what standard of proof is adopted, the averment provisions may, in certain circumstances, confront a judge with the difficulty of resolving a competition between the requirement of the averment provisions that, as a matter of law, certain facts may, but need not, be taken to have been established to the requisite standard, and evidence tendered in contradiction of that conclusion. No matter what the standard of proof, the judge can resolve that competition in favour of the party making the averment only if persuaded of the existence or occurrence of the fact averred. The averment provisions, therefore, neither suggest nor require departure from the tentative answer expressed earlier in these reasons that if conviction is sought, proof beyond reasonable doubt of the elements of the relevant offence is necessary. The questions about standard of proof should be answered accordingly. Lest there be some misunderstanding about the effect of the answers that are given, it is as well to make explicit that what must be proved beyond reasonable doubt is the elements of the relevant offence. That should not be understood as denying the application of established principles about such matters as proof by circumstantial evidence188 or as suggesting that every matter alleged in a particular form of pleading must be established to that standard. It is the elements of the offences that must be established. The Evidence Act The third and fourth questions asked whether these Customs prosecutions and Excise prosecutions are "criminal proceedings for the purposes of the Queensland Evidence Act". The questions proceed from the premise that it is 185 Briginshaw (1938) 60 CLR 336 at 361. 186 Briginshaw (1938) 60 CLR 336 at 362. 187 (1938) 60 CLR 336 at 361. 188 Shepherd v The Queen (1990) 170 CLR 573. Hayne relevant to ask how the Queensland statute would classify the proceedings. That premise is wrong. The relevant questions are whether, by s 247 of the Customs Act and s 136 of the Excise Act, those provisions of the Evidence Act which operate in criminal proceedings are to be applied in these proceedings. For the reasons given earlier in connection with the questions about standard of proof, s 247 of the Customs Act and s 136 of the Excise Act require the Supreme Court of Queensland to apply its usual practice and procedure in civil cases in proceedings with the present matters. Those provisions of the Evidence Act which regulate the admissibility of evidence as to facts in issue are provisions regulating the practice and procedure of the courts of Queensland. That being so, those provisions of the Evidence Act that would be applied in a civil case are to be applied in the present proceedings. In particular, the admissibility of documentary evidence as to facts in issue is to be regulated by s 92 of that Act, not s 93. It is not to the point to ask how a classification of proceedings which is adopted in the Queensland statute (as a "criminal proceeding"189 or as a "proceeding (not being a criminal proceeding)"190) might be applied to proceedings of the present kind. The questions about the Evidence Act should, therefore, each be answered: "Those provisions of the Evidence Act 1977 (Q) which would be applied by the Supreme Court of Queensland in civil cases (including, in particular, the provisions of s 92 of that Act) are to be applied in the trial of the present proceedings." Orders The appeal to this Court should be allowed to the extent necessary to permit the substitution of the answers I propose for the answers which the Court of Appeal ordered to be given. Each party having had a measure of success on the appeal to this Court there should be no order for the costs of the appeal to this Court. In accordance with the terms on which special leave to appeal was granted, the orders for costs made in the courts below should not be disturbed. Accordingly, I would order: Appeal allowed in part. 189 Evidence Act 1977 (Q), s 3. 190 Evidence Act, s 92(1). Hayne Set aside pars 2 and 3 of the orders of the Court of Appeal of Queensland made on 20 July 2001 and, in lieu thereof, vary the order of Atkinson J made on 9 June 2000 by substituting the following: In order to obtain a conviction of a defendant for any of the offences specified, the elements of the offence must be established beyond reasonable doubt. In order to obtain a conviction of a defendant for any of the offences specified, the elements of the offence must be established beyond reasonable doubt. Those provisions of the Evidence Act 1977 (Q) which would be applied by the Supreme Court of Queensland in civil cases (including, in particular, the provisions of s 92 of that Act) are to be applied in the trial of the present proceedings. Those provisions of the Evidence Act 1977 (Q) which would be applied by the Supreme Court of Queensland in civil cases (including, in particular, the provisions of s 92 of that Act) are to be applied in the trial of the present proceedings. There is no order as to the costs of the appeal in this Court.

HIGH COURT OF AUSTRALIA APPELLANT AND REPATRIATION COMMISSION RESPONDENT Roncevich v Repatriation Commission [2005] HCA 40 10 August 2005 ORDER Appeal allowed. Set aside the order of the Full Court of the Federal Court of Australia dated 30 June 2003 and, in place thereof, order that: the appeal be allowed; the order of Mansfield J in the Federal Court of Australia dated 2 December 2002 be set aside and, in place thereof, order that: the appeal be allowed; the decision of the Tribunal be set aside; and (iii) the matter be remitted to the Tribunal to be determined according to law. The respondent is to pay the appellant's costs in the Federal Court, both at first instance and in the Full Court, and the appellant's costs of the appeal to this Court. On appeal from the Federal Court of Australia Representation: D De Marchi for the appellant (instructed by Pipers) P J Hanks QC with E Ford for the respondent (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Roncevich v Repatriation Commission Repatriation pension – Whether injury arose out of or was attributable to defence service – Whether attendance at Mess function compulsory – Whether attendance at Mess function constituted defence service – Applicant injured as a result of falling from window due to intoxication. Administrative law – Tribunal of the Commonwealth – Whether Administrative Appeals Tribunal gave reasons which conformed to law – Sufficiency of reasons – Whether perverse findings of fact constitute an error of law – Jurisdiction of Federal Court to disturb perverse findings of fact – Whether returning matter to the Administrative Appeals Tribunal would be futile – Whether High Court should substitute a finding on the facts. Statutes – Construction – Interpretation of beneficial provisions. Words and phrases – "defence-caused", "defence service", "attributable to", "arose out of". Administrative Appeals Tribunal Act 1975 (Cth) ss 29, 43, 44, 57A. Federal Court Act 1976 (Cth) ss 19, 20. Veterans' Entitlement Act 1986 (Cth) ss 44(1), 70(1), 70(5), 70(7), 70(9), 120(4), 120B(3), 180A(3). McHUGH, GUMMOW, CALLINAN AND HEYDON JJ. The matters for determination in this appeal are the meaning of the terms "defence-caused", "defence service" and "arose out of, or was attributable to, any defence service" as used in sub-ss (1) and (5) of s 70 of the Veterans' Entitlement Act 1986 (Cth) ("the Act"). Facts Between 11 February 1974 and 13 February 1998 the appellant was an enlisted non-commissioned officer ("NCO") in the Australian Army. On his discharge, which was voluntary, he held the highest non-commissioned rank in the Army, Warrant Officer (Class 1). On 27 February 1986 the appellant, who was then a Sergeant, attended a dinner at the Sergeants' Mess at Holsworthy Military Barracks (the "Base") where he was stationed and resided. The reason for his attendance at the Mess was that the Regimental Sergeant Major of the Army ("RSM Army"), the most senior soldier in the whole Army and a person of considerable military importance, was visiting the Base. Short notice only had been given of this officer's visit. The evidence was that at the time of the relevant events it was the expectation and custom of the Army for NCOs on Base to attend at the Mess when a distinguished visitor was a guest. The circumstances and implications of the appellant's attendance at the Mess were well summarised by Heerey J in the Full Court of the Federal Court1: "The evidence of the present appellant and RSM Lee, the truthfulness of which was not disputed and which was implicitly accepted by the tribunal, show that attendances by a SNCO at the sergeants' mess, and especially at a function to welcome visiting dignitaries, were an integral, and valuable, part of army life. Sergeants and other SNCOs need to be in regular informal contact about the operation of the unit and the well-being of those serving in it. The longstanding tradition is that a mess, whether sergeants' or officers', is perhaps the best place where this can be done effectively. Moreover the camaraderie of the mess 1 Roncevich v Repatriation Commission (2003) 75 ALD 345 at 350-351 [26]-[27]; 37 AAR 397 at 402. McHugh Callinan encourages the maintenance and development of trust, loyalty and regimental pride which are essential for an effective military organisation. When the mess entertains a distinguished visitor the unit is, so to speak, on show. If 3 Battalion RAR were to provide an embarrassingly small turnout of Warrant Officers and Sergeants for the Senior RSM in the Australian Army because the appellant preferred to read a book in his own quarters, it may be doubted whether his conduct would have been accepted by his colleagues and RSM Lee as purely a matter of free choice for him." The appellant was present at the Mess from about 4:30pm until 9:00pm. In this period he drank a considerable quantity of beer, indeed to the extent that he became inebriated. The evidence was that alcoholic drinks were from time to time and in various ways subsidised, and that it was "frowned upon" to consume drinks of low alcoholic content. Later in the evening the appellant left the Mess with the permission of RSM Colin Lee, his immediate superior. He intended to change from his military fatigues into civilian clothes, iron his uniform for the next day, and then return to the Mess. Others present there were already in civilian clothes. The appellant's military commitments had prevented him from changing earlier. The appellant returned to his room on the second floor of the barracks at the Base, opened his windows to air the room, and began to iron his uniform. The appellant was a smoker. He felt the need to clear his throat. He walked to a window, stood on a trunk beneath it and lent forward with the intention of expectorating. He overbalanced and fell to the ground below. The fall caused an "internal derangement" of his left knee. The proceedings below On his retirement the appellant made a claim under the Act seeking recognition, for the purpose of claiming compensation, of various injuries he had suffered during his service, including the derangement of his knee. The respondent rejected the claim. The appellant made an application for review of the decision in the Administrative Appeals Tribunal ("the Tribunal"). It is convenient to set out the applicable statutory provisions at this point. Relevantly, s 70(1) of the Act provides: McHugh Callinan "70 Eligibility for pension under this Part (1) Where: a member of the Forces or member of a Peacekeeping Force has become incapacitated from a defence-caused injury or a defence-caused disease; the Commonwealth is, subject to this Act, liable to pay: in the case of the incapacity of the member – pension by way of compensation to the member; in accordance with this Act." Section 70(5) is as follows: "(5) For the purposes of this Act, the death of a member of the Forces (other than a member to whom this Part applies solely because of section 69A) or member of a Peacekeeping Force shall be taken to have been defence-caused, an injury suffered by such a member shall be taken to be a defence-caused injury or a disease contracted by such a member shall be taken to be a defence-caused disease if: the death, injury or disease, as the case may be, arose out of, or was attributable to, any defence service, or peacekeeping service, as the case may be, of the member; the death is to be deemed by subsection (6) to be defence- caused, the injury is to be deemed by subsection (7) to be a defence-caused injury or the disease is to be deemed by subsection (7) to be a defence-caused disease, as the case may be; or the injury or disease from which the member died, or has become incapacitated: McHugh Callinan was suffered or contracted during any defence service or peacekeeping service of the member, but did not arise out of that service; or (ii) was suffered or contracted before the commencement of the period, or the last period, of defence service or peacekeeping service of the member, but not during such a period of service; and, in the opinion of the Commission, the injury or disease was contributed to in a material degree by, or was aggravated by, any defence service or peacekeeping service rendered by the member, being service rendered after the member suffered that injury or contracted that disease; ..." The appellant sought to rely in this Court and in the Full Court of the Federal Court on s 70(7) which is as follows: "(7) Where, in the opinion of the Commission, the incapacity of a member of the Forces or member of a Peacekeeping Force was due to an accident that would not have occurred, or to a disease that would not have been contracted, but for his or her having rendered defence service or peacekeeping service, as the case may be, or but for changes in the member's environment consequent upon his or her having rendered any such service: if the incapacity of the member was due to an accident – that incapacity shall be deemed to have arisen out of the injury suffered by the member as a result of the accident and the injury so suffered shall be deemed to be a defence-caused injury suffered by the member; or if the incapacity was due to a disease – the incapacity shall be deemed to have arisen out of that disease and that disease shall be deemed to be a defence-caused disease contracted by the member, for the purposes of this Act." There are other relevant provisions. Section 120(4), requires, in respect of an injury caused during general service2 that the standard of proof be to the 2 As opposed to "operational service", "peacekeeping service" or "hazardous service", all of which receive separate attention in the Act. McHugh Callinan "reasonable satisfaction" of the respondent. Sub-section (3) of s 120B should also be noted: the In applying subsection 120(4) Commission is to be reasonably satisfied that an injury suffered by a person, a disease contracted by a person or the death of a person was war-caused or defence-caused only if: to determine a claim, the material before the Commission raises a connection between the injury, disease or death of the person and some particular service rendered by the person; and there is in force: a Statement of Principles determined under subsection 196B(3) or (12); or a determination of the Commission under subsection 3 Section 180A(3) provides: "180A Determination by Commission (3) A determination under this subsection in respect of a particular kind of injury, disease or death must be in writing and must: (a) state that it has effect only in relation to the class of veterans or members of the Forces referred to in subparagraph (1)(b)(i); and (b) state that it applies only in respect of claims relating to: (i) eligible war service (other than operational service) rendered by a veteran; or (ii) defence service (other than hazardous service) rendered by a member of the Forces; and (c) set out: the factors that must exist; and (Footnote continues on next page) McHugh Callinan that upholds the contention that the injury, disease or death of the person is, on the balance of probabilities, connected with that service." There is a relevant Statement of Principles with respect to Internal Derangement of the Knee4. It acknowledges that internal knee derangement is capable of being caused by defence service. The Tribunal5 affirmed the decision under review. The Administrative Appeals Tribunal Act 1975 (Cth) provided for an "appeal to the Federal Court of Australia, on a question of law" (s 44(1)). The Federal Court (von Doussa J) held that the Tribunal's decision was affected by error of law, the respondent having made a concession to that effect. The matter was remitted to the Tribunal for a fresh hearing6. The Tribunal on this occasion reached the same conclusion as the first one. After summarising some of the evidence and the competing contentions, the Tribunal said this7: "The Tribunal finds that on the evening of 27 February 1986, between 4.30pm and 9.00pm, the applicant attended the sergeants mess at the Holdsworthy Army Base to socialise with fellow NCOs. They drank alcoholic beverages, ate a meal and had a friendly conversation. The situation was in fact no different to what they might have done, had they decided to go to a hotel away from the Base. (ii) which of those factors must be related to service rendered by a person; before it can be said, on the balance of probabilities, that an injury, disease or death of that kind is connected with the circumstances of that service." 4 Repatriation Medical Authority Instrument No 60 of 1997. 5 Roncevich v Repatriation Commission [2001] AATA 199 (16 March 2001). 6 Roncevich v Repatriation Commission (2001) 66 ALD 105. 7 Roncevich v Repatriation Commission [2002] AATA 343 (14 May 2002) at [9]- McHugh Callinan The only links between the Army and the intoxication of [the appellant] were that the intoxication occurred on an Army Base and that [the appellant] and his fellow drinkers were soldiers. The intoxication was not caused by, nor did it arise out of any task that [the appellant] had to do as a soldier, nor did it arise out of his defence service, nor did it occur in the course of his defence service. Consequently, the subsequent injury to [the appellant's] knee was not caused by his defence service, nor did it arise out of or in the course of his defence-service. It was not service-related nor was it defence-caused, within the meaning of those terms in the Veterans' Entitlement Act 1986." The appellant again appealed to the Federal Court. The appeal came on for hearing before Mansfield J. His Honour concluded that the Tribunal did not err in law in deciding that the injury to the appellant's knee was not attributable to defence service. His Honour's understanding of the relevant principles appears from this paragraph in his reasons8: "Whether the left knee injury arose out of the applicant's defence service depends upon whether there is a causal connection between the defence service and the incapacity from the left knee injury9. The connection need not be the sole or dominant or prominent cause of the injury; it is sufficient if it is a contributory cause or connection. In Repatriation Commission v Law10 Aickin J (with whom Gibbs CJ, Stephen and Mason JJ agreed) said the natural meaning of the words then under consideration (in ss 101(1)(b) and 101(1A) of the Repatriation Act 1920 (Cth)) was to point to a causal connection rather than a temporal connection between the defence service and the injury or disease. The words there under consideration were relevantly to the same effect as those in s 70(5)(a) of the Act. If the cause of the injury is the personal or domestic activities of the claimant, and the defence service provides no 8 Roncevich v Repatriation Commission [2002] FCA 1458 (2 December 2002) at 9 See eg Holthouse v Repatriation Commission (1982) 1 RPD 287 at 288 per 10 (1980) 147 CLR 635 at 649. McHugh Callinan more than the circumstances in which the cause operated, then the injury does not arise out of, and is not attributable to, defence service11." The appellant unsuccessfully appealed to the Full Court of the Federal Court (Whitlam and Marshall JJ, Heerey J dissenting). The majority set out in their reasons several passages from the reasons of the primary judge, Mansfield J, before stating that in substance they agreed with them, including the rejection of arguments by the appellant that the Tribunal's reasons were so slight as to fall short of the properly reasoned judgment which it was bound to give, and that the appellant had made out a case which the Tribunal had failed to address, that subsequent defence service had aggravated the injury to the knee caused by the appellant's falling from a window to the ground below his room. Whitlam and Marshall JJ added this12: "The reasons of the AAT were brief ... It is true, as Heerey J observes, that neither in that passage13 nor in the next paragraph of its reasons did the AAT refer to the expression 'attributable to' used in s 70(5)(a) of the Act. Such an omission was not relied on as a ground of appeal below or before us. That is hardly surprising. The intoxication and the fall took place during [the appellant's] defence service. In that context, any notion of attribution would not suggest a less proximate causal relationship, between defence service and the injury, than would be conveyed by the expression 'arise out of', which expression was fastened upon by the AAT. The critical finding of the AAT was that [the appellant] was not required to attend the relevant function on the day in question. Its view about whether the injury was defence caused was based on that finding. 11 See eg Wedderspoon v Minister of Pensions [1947] 1 KB 562 at 563-564 per 12 Roncevich v Repatriation Commission (2003) 75 ALD 345 at 359 [57]-[58]; 37 AAR 397 at 411. 13 Their Honours were referring to the following passage: "The only links between the Army and the intoxication of [the appellant] were that the intoxication occurred on an Army Base and that [the appellant] and his fellow drinkers were soldiers. The intoxication was not caused by, nor did it arise out of any task that [the appellant] had to do as a soldier, nor did it arise out of his defence service, nor did it occur in the course of his defence service." Roncevich v Repatriation Commission [2002] AATA 343 (14 May 2002) at [10]. McHugh Callinan We agree with the primary judge that that finding was open to the AAT. Moreover, the statement by the AAT that the intoxication did not 'arise out of any task that [the appellant] had to do as a soldier' does not, in our view, suggest that the AAT took the view that the only relevant service was that performed by a member at risk of disciplinary action for insubordination." In his dissenting judgment, Heerey J cited a passage from Henderson v Commissioner of Railways (WA)14 and made these observations with which we are in agreement15: "The tribunal said that the appellant's intoxication did not 'arise out of any task that (he) had to do as a soldier'. However, things a person does in the course of serving as a soldier are not limited to the obeying of lawful commands, directions and orders under disciplinary sanction pursuant to ss 27, 28 or 29 of the Defence Force Discipline Act 1982 (Cth). In Henderson v Cmr of Railways (WA) (1937) ... where the High Court was concerned with a workers' compensation statute which spoke of injury 'arising out of or in the course of employment', Dixon J said16: 'To be in the course of employment, the acts of the workman must be part of his service to the employer. But the difficulty lies in the application of this conception. For the service consists in more than the actual performance of the work which the workman is employed to do. It includes the doing of whatever is incidental to the performance of the work. General expressions of this kind have not proved very helpful. ... Where the accident arises shortly before the beginning of actual work or shortly after its cessation, or in an interval when labour is suspended, and it occurs at or near the scene of operations, the question whether it arises in the course of the employment will depend on the nature and terms of the employment, on the circumstances in which work is done and on what, as a result, the workman is reasonably required, expected or authorized to do in order to carry out his actual duties." (Emphasis added by Heerey J) 14 (1937) 58 CLR 281. 15 Roncevich v Repatriation Commission (2003) 75 ALD 345 at 350 [24]; 37 AAR 16 (1937) 58 CLR 281 at 294. McHugh Callinan Heerey J stated his conclusion in these paragraphs17: "In the present case, the expression 'arose out of, or was attributable to, any defence service', although made up of ordinary words, is one that conveys a compound legal concept. It is not like the ordinary word 'business' which was at issue in Hope18 or the word 'insulting'19. For upwards of a century in common law jurisdictions, courts have construed the meaning of such expressions in workers' compensation legislation. Accordingly the correct application of the expression to the facts found in the present case raised a question of law for the purposes of s 44 of the Administrative Appeals Tribunal Act 1975 (Cth), subject to the need to make a further finding on the causation issue, as explained above20. The Tribunal erred in law in the application of this statutory criterion. It effectively ignored what the appellant was, as a matter of practicality, required or expected to do as part of his service in the army. The primary judge did not correct that error. It might also be said that if injury can only arise out of or be attributable to defence service if it occurs when the claimant is doing something which he or she is ordered to do, it is strange that the Act contemplates injury being compensable even when it arises out of disobedience of an order, as long as there has not been a serious default or wilful act or a serious breach of discipline." The appeal to this Court One of the appellant's arguments advanced in the Federal Court was repeated in this Court, that the paucity of reasoning on the part of the Tribunal was so deficient as to constitute error of law. It should be rejected. Sufficient appears from the judgment of the Tribunal to enable the courts below, and this 17 Roncevich v Repatriation Commission (2003) 75 ALD 345 at 354-355 [36]-[37]; 37 AAR 397 at 406-407. 18 Hope v Bathurst City Council (1980) 144 CLR 1. 19 Brutus v Cozens [1973] AC 854. 20 Roncevich v Repatriation Commission (2004) 75 ALD 345 at 354 [34]; 37 AAR McHugh Callinan Court to understand, and to deal with the reasoning and decision of the Tribunal21. The appellant's argument based on s 70(7) of the Act The appellant contended that he was entitled to the benefit of s 70(7) of the Act which we have set out above. The argument was that the provision deems an injury to be defence-caused where it is due to an accident that would not have occurred but for the defence service rendered by the appellant: indeed, that it extends the application of s 70(5) even in circumstances in which the injury may not have arisen due to defence service, but is sufficiently proximate to that service to be deemed to be service related. The second and quite distinct limb of s 70(7), unique to the Act, brings into play as a separate consideration, environmental changes that may have occurred in consequence of a member having rendered defence service. The inebriation of the appellant, having regard to the circumstances of his attendance in the Sergeants' Mess, the appellant submitted, falls within s 70(7), even if the injury were to be held to have been suffered other than in the course of the appellant's defence service. It is correct, as the respondent submits, that this argument was not advanced in, or founded upon any ground of appeal to the Federal Court. The appellant should not therefore be permitted to raise it in this Court, although, subject to s 57A of the Act22, the width of the grounds stated in the appellant's 21 cf Pettitt v Dunkley [1971] 1 NSWLR 376 at 381-382, 385, 388; Fox v Percy (2003) 214 CLR 118 at 165-166 [148] per Callinan J. 22 At the date of the claim made by the appellant under the Act, s 57A provided: "57A Application for review (1) A request for review of a decision under section 57 must: (a) be made within 3 months after the person seeking review was notified of the decision; and (b) set out the grounds on which the request is made; and (c) be in writing. (2) If a request for review of a decision is made in accordance with subsection (1) the Commission must review the decision. (Footnote continues on next page) McHugh Callinan application for review, and the Administrative Appeals Tribunal Act, the appellant may be able to advance it on the rehearing of his application. the Tribunal's powers under s 29 of Another argument of the appellant should however be accepted. It was, that in asking itself whether the appellant's intoxication was caused by, or arose out of a task that the appellant had to do as a soldier, it asked itself the wrong question, and not the question that the Act requires it to answer. The question that it should have asked is the one posed by s 70(5), whether the injury arose out of, or was attributable to, any defence service of the appellant? The evidence in this case is capable of providing an affirmative answer to the correct question. As Dixon J said in the passage from Henderson cited by Heerey J in the Full Court, whether an event arises in the course of an activity, or as here, out of "an activity", depends upon such matters as the nature of the person's employment, the circumstances in which it is undertaken, and what, in consequence, the person is required or expected to do to carry out the actual duties. The connexion must however be a causal and not merely temporal one23. There is little doubt in this case that there was a requirement, albeit not one to be found in formal military orders, and an expectation, of attendance at the Sergeants' Mess and the consumption in some quantity, even perhaps to the point of intoxication short of physical incapacity, of alcoholic drinks. So too, the need for the appellant's return to his quarters and the preparation of his uniform for the next day, are capable of being seen to have arisen out of, or of having been attributable to, his defence service. The remaining question is whether, climbing on to the box to expectorate through the open window, and then falling because he was inebriated, similarly either arose out of, or was attributable to his defence service. The point made by Heerey J argues in favour of a broad construction of s 70(5). Section 70(9) states that the Commonwealth is not liable under that section to a member in respect of death, injury or disease if any of these resulted from or arose out of a member's serious default, wilful act, or a serious breach of (3) If the Commission has delegated its powers under this section to the person who made the decision under review, that person must not review the decision." 23 Kavanagh v The Commonwealth (1960) 103 CLR 547 at 558 per Fullagar J; Repatriation Commission v Law (1981) 147 CLR 635 at 647, 649 per Aickin J. McHugh Callinan discipline. It is not suggested that the appellant's conduct even remotely approached the magnitude of a serious default, wilful act or serious breach of discipline, yet the respondent has concluded that the appellant's drinking and his subsequent fall constituted such a departure from defence service as to disqualify him from obtaining compensation. The presence and language of s 70(9) argues strongly in favour of a construction of s 70(5) capable of embracing within its terms the appellant's conduct on the evening of his fall. These further observations may be made about the Tribunal's reasons which included a statement that "[t]he situation was in fact no different to what they might have done, had they decided to go to a hotel away from the Base."24 That what in fact happened occurred on the Base and interrupted the performance of a military duty, the preparation of the appellant's uniform, were relevant matters. It was also of relevance that the inebriation of the appellant occurred on the Base. That is not to say however that a defence-caused injury inevitably could not have resulted if the events had occurred at an hotel rather than at the Base. Nor is it irrelevant that at the time when the appellant hurt his knee it is almost certain that he would have been subject to military discipline25. The use disjunctively in s 70(5) of the expressions "arose out of" and "attributable" manifest a legislative intention to give "defence-caused" a broad meaning, and certainly one not necessarily to be circumscribed by considerations such as whether the relevant act of the appellant was one that he was obliged to do as a soldier. A causal link alone or a causal connexion is capable of satisfying a test of attributability without any qualifications conveyed by such terms as sole, dominant, direct or proximate26. In failing to pose and answer the correct question the Tribunal erred in law. That error constituted an appealable error of law within the meaning of s 44 of the Administrative Appeals Tribunal Act. The Federal Court in determining an appeal pursuant to that section may make such order as it thinks appropriate (s 44(4)), as may of course this Court on appeal from the Full Court. It is not appropriate however that this Court, or indeed the Federal Court decide the 24 Roncevich v Repatriation Commission [2002] AATA 343 (14 May 2002) at [9]. 25 Re Colonel Aird; Ex parte Alpert (2004) 78 ALJR 1451; 209 ALR 311. 26 R v Monopolies and Mergers Commission; Ex parte National House Building Council, [1994] TLR 38; Walsh v Rother District Council [1978] 1 All ER 510 at McHugh Callinan ultimate question of the appellant's entitlement, that is, whether the injury to his knee was defence-caused, a conclusion which is available on the whole of the evidence. The order we would make is that the appeal be allowed, the order of the Full Court be set aside and in place thereof the appeal to that Court be allowed, the order of Mansfield J be set aside and in place of that order the appeal to the Federal Court be allowed, the decision of the Tribunal be set aside and the case be remitted to the Tribunal to be determined according to law; the respondent should pay the appellant's costs in the Federal Court, both at first instance and in the Full Court, and the appellant's costs of the appeal to this Court. Kirby KIRBY J. This appeal comes from a divided decision of the Full Court of the Federal Court of Australia27. It concerns a complaint that the Administrative Appeals Tribunal ("the Tribunal") erred "on a question of law"28 in rejecting a claim to pension benefits under the Veterans' Entitlement Act 1986 (Cth) ("the Act") brought by a former member of the Australian Army29. I agree in the conclusion reached by McHugh, Gummow, Callinan and Heydon JJ in their reasons ("the joint reasons"). The appeal must be allowed. However, several points raised in argument merit consideration because we are correcting the majority in the Federal Court and, effectively, the Tribunal. As the issues raised may recur, I will address them. They do not alter the outcome. But they explain how I arrive at my conclusion. The facts A soldier falls from a window: Most of the evidence relevant to the disposition of the appeal is referred to in the joint reasons30. There was no material dispute about it. The contest in the case concerns the legal classification of the facts and whether they give rise to an entitlement under the provisions of the Act upon which Mr Jure Roncevich ("the appellant") relied. Amongst amendments to the appellant's notice of appeal, agreed to by the Repatriation Commission ("the respondent"), was one allowing the appellant to base his contention of error on the part of the Federal Court by reference to the evidence given before the Tribunal, as well as to the facts found by it. In order to understand the Tribunal's conclusion, and that of the majority in the Federal Court, it is therefore helpful to notice some evidence additional to that recorded in the joint reasons. The appellant received injury to his left knee at about 9 pm on 27 February 1986 when he fell from a window in his room on the second floor of the Army barracks at Holsworthy, near Sydney. The incident occurred when he stood on a trunk near the window to expectorate but over-balanced, falling to the ground below. Earlier, he had consumed six to eight cans of full strength beer and was intoxicated as a consequence. He had returned to his room in order to change clothes and iron his uniform for use on the following day. It was accepted that his fall and consequent injury were causally related to his 27 Roncevich v Repatriation Commission (2003) 75 ALD 345. 28 Administrative Appeals Tribunal Act 1975 (Cth) ("AAT Act"), s 44(1). 29 Constituted pursuant to the Defence Act 1903 (Cth), s 30. 30 Joint reasons at [2]-[8]. Kirby intoxication, both in occasioning his loss of balance and in causing him to attempt the manoeuvre in the first place. Army mess intoxication: The appellant's consumption of beer occurred at an Army Mess function which the appellant had attended, with other non- commissioned officers, to welcome a visit to the regiment by the Regimental Sergeant Major of the Army ("RSM Army"). According to the appellant, attending the Mess function was treated as "compulsory", even if it was not legally obligatory. He explained: "… we were all military and you understand most of the people same as I had joined the military at 17, had seen no outside life, had no other life, there was no life but the military. That's all we knew, that's all we talked about." Beer was sold cheaply in the Mess and drinking "that light stuff" was frowned on by colleagues. Talk at such functions was substantially about Army concerns and life. The appellant attributed his desire to expectorate from the window to his then heavy smoking habit. But he was forthright in inculpating the preceding consumption of beer as a cause of his fall: "I … went to spit out, and out I went of my window and over-balanced drunk, that's – I went out my window". Later, he confirmed in cross-examination: "And you were a bit the worse for ware [sic] because of alcohol, were you? … Yes, I had drunk, yes. Is that what you are claiming, that because you were the worse for ware [sic] from alcohol you fell out the window, or was it just an accidental over-balance? … Well, I think it is a matter – I don't think I would have over-balanced and gone out if I hadn't drunk." The Regimental Sergeant Major on the evening of the appellant's fall was Sergeant Colin Lee. He gave evidence describing the informal gathering arranged at short notice in the Mess for the visit of RSM Army. He agreed that available Mess members, such as the appellant, were invited to attend the informal gathering. He stated that "a certain level of decorum" was necessary because of the presence of the visitor. Members of the Mess could excuse themselves earlier than 9 pm. Alcohol was served but non-drinkers would not be forced to partake. He agreed that the amount of alcohol consumed by members "was a matter for them". He also agreed that no members of the Army "are ever required to drink alcohol to the point of intoxication at any of these functions". Kirby The resulting forensic contest: The foregoing evidence explains the forensic contest before the Tribunal. The appellant sought to bring himself within the entitlements of the Act by linking the causative element of his intoxication to the circumstances in which that had occurred in a Mess activity which he was expected to attend because of the visit of an Army dignitary. In his written statement, Sergeant Lee described attendance at the Mess as "required" of all living-in members of the Regiment in order "to make up the numbers". On the other hand, the respondent sought to demonstrate that attendance and drinking beer and other alcoholic beverages at the Mess was a personal choice, not compulsory and, when the consumption passed over to intoxication it became a private and voluntary act of the soldier, the consequences of which he must wear for himself and not seek to attribute to his defence service. The legislation and decisional history The legislation: The provisions of the Act under which the appellant made his claim for a pension are set out in the joint reasons31. I will not repeat this material. Before this Court, the appellant sought to bring himself within the general provisions of the Act entitling him to a "pension by way of compensation"32 for a "defence-caused injury"33. The appellant submitted, as he had done before the Tribunal and in the Federal Court, that his injury arose out of, or was attributable to, his defence service and was thus a "defence-caused injury" within the principal definition in s 70(5) of the Act. As a fall-back position, the appellant sought to bring himself within the extended definitions covering post-injury material aggravation by defence service34 and a notional defence service injury attributable to changes in the member's environment consequent on his service35. Decision of the primary judge: The "appeal" to the Federal Court from the relevant decision of the Tribunal36 failed. Essentially, this was because the 31 Joint reasons at [9]-[11]. 32 Under the Act, s 70(1)(c). 33 Under the Act, s 70(1)(b). 34 Under the Act, s 70(5)(d)(ii). 35 The Act, s 70(7)(a). 36 As explained in the joint reasons at [13], there were two Tribunal decisions. The first decision was set aside by order of von Doussa J in the Federal Court for error of law. A fresh hearing was then undertaken by the Tribunal but with the same consequence adverse to the appellant affirming the decision of the respondent. Kirby primary judge in the Federal Court (Mansfield J) and the majority in the Full Court,37 were of the opinion that the issue for decision, as concluded by the Tribunal, was one of fact, not law and involved a conclusion open to the Tribunal upon the evidence before it. Addressing himself to the principal way in which the appellant had sought to bring himself within the Act, under s 70(5)(a), Mansfield J was unimpressed. In effect, he accepted that it was open to the Tribunal to conclude that the cause of the appellant's injury was personal and not service related38. The judge recorded the appellant's complaint that the Tribunal had erred in law in failing to find that his attendance at the Mess function, with consequent consumption of alcohol, was obligatory, thereby rendering the consequent fall and knee injury causally related to his defence service at the function39. But his Honour said40: "The Tribunal made a different finding, namely the [appellant's] attendance at the function and his excessive consumption of alcohol at the function was not related in any relevant way to his defence service. It found his attendance at the function was a matter for the [appellant], as was the extent of his alcohol consumption. that In my view these findings were clearly open to the Tribunal." The primary judge reminded himself of the need, under s 70(5)(a) of the Act, to establish a causal connection between the defence service and the knee "If the cause of the injury is the personal or domestic activities of the claimant, and the defence service provides no more than the circumstances in which the cause operated, then the injury does not arise out of, and is 37 Whitlam and Marshall JJ; Heerey J dissenting. 38 Roncevich v Repatriation Commission [2002] FCA 1458 (2 December 2002) at 39 [2002] FCA 1458 at [15]. 40 [2002] FCA 1458 at [16]-[17]. 41 [2002] FCA 1458 at [18] citing Repatriation Commission v Law (1981) 147 CLR 635 at 649 per Aitkin J (with whom Gibbs CJ, Stephen and Mason JJ concurred). 42 [2002] FCA 1458 at [18]. Kirby not attributable to, defence service: Wedderspoon v Minister of Pensions43." see eg per Denning J in Decision of the Full Court: The same approach to the appellant's primary claim was adopted by the majority in the Full Court. For their Honours, the problem presented for the appellant was the limited jurisdiction afforded to the Federal Court. It was confined to correcting an error on a question of law. This did not extend to substituting a preferred finding of fact for the decision on the facts reached by the Tribunal on the basis of evidence. Their Honours said44: "[t]he critical finding of the AAT was that Mr Roncevich was not required to attend the relevant function on the day in question. Its view about whether the injury was defence caused was based on that finding. We agree with the primary judge that that finding was open to the AAT. Moreover, the statement by the AAT that the intoxication did not 'arise out of any task that Mr Roncevich had to do as a soldier' does not, in our view, suggest that the AAT took the view that the only relevant service was that performed by a member at risk of disciplinary action for insubordination." In effect, the Full Court majority held that, whilst others engaged in fact- finding might have reached a different conclusion concerning the "requirements" of the appellant to attend the Mess function on the day of his fall, there had been differences in the evidence over the circumstances of attendance at the function and it had therefore been open to the Tribunal (and the primary judge) to conclude that "the [appellant's] claims that he was obliged to attend the function, and to consume alcohol, as part of his defence service" should be rejected45. It is unnecessary for the present purposes to examine the ways in which the alternative claims under the Act, now pressed by the appellant, were dealt with by the primary judge and by the Full Court, within the grounds of appeal severally pressed upon them. It is enough to observe that the majority view in the Full Court, on the principal case pressed by the appellant, was that the attempt to link causally the appellant's intoxication, and hence his fall, to defence service had been rejected on the facts within a jurisdiction given to the Tribunal by law to decide the facts. On that footing, the Federal Court, within its own limited jurisdiction, had no power to substitute different conclusions of fact 43 [1947] 1 KB 562 at 563-564. 44 (2003) 75 ALD 345 at 359 [58]. 45 (2003) 75 ALD 345 at 357 [51] quoting Mansfield J at first instance. Kirby involving different characterisations of the appellant's conduct. This, then, was the response which the majority in the Full Court gave46. I have explained what I take to have been the reasoning of the majority judges in the Federal Court, so that their Honours' approach will be understood and the issue for decision by this Court refined. The question is whether the approach of the majority itself evidenced an error on a question of law or was undermined by reasons that indicate an erroneous approach to the Federal Court's statutory functions. Common ground A number of points of common ground can be mentioned at this stage. They provide further background to the resolution of the appeal. Interpreting beneficial provisions: The provisions of the Act are obviously beneficial, designed to afford important pension rights for members of the Australian Defence Forces. The provision of pensions to injured service members, and in the case of their death to their dependants, was first provided by the War Pensions Act 1914 (Cth) ("War Pensions Act"), enacted at the outbreak of the First World War. Section 3 of that Act provided that a pension was payable upon the death or incapacity of certain members of the forces which "... resulted from ... employment in connexion with warlike operations". The War Pensions Act was replaced at the conclusion of the War by the Repatriation Act 1920 (Cth) ("Repatriation Act"). That Act, frequently amended, eventually conferred benefits on defined members of the Forces where the member's "incapacity or death has resulted from any occurrence that happened during the period from the date of his enlistment to the date of the termination of his service ... or ... whose incapacity or death has arisen out of or is attributable to his war service"47. For some decades before the enactment of these provisions, workers' compensation and seamen's compensation legislation in Australia had adopted different criteria of connection to activities of service, being the conjunctive requirement that the applicant demonstrate the happening of an injury "arising out of and in the course of the employment"48. It would have been possible for 46 Set out in the joint reasons at [16]. 47 Repatriation Act, s 101(1) (emphasis added). See Repatriation Commission v Law (1981) 147 CLR 635 at 642. This test did not appear in the Act until it was amended by the Australian Soldiers' Repatriation Act 1943 (Cth) s 37. 48 See eg Seamen's Compensation Act 1911 (Cth), s 5. See Joyce v Australasian United Steam Navigation Co Ltd (1939) 62 CLR 160 at 164. See also Union (Footnote continues on next page) Kirby the Federal Parliament to have adopted the same formula for repatriation entitlements. However, it did not. Moreover, the beneficial operation of the Repatriation Act was assured by two statutory provisions, one relatively common and the other quite unusual. The common provision was an instruction to the decision-maker, determining claims to repatriation benefits, to do so "according to substantial justice and the merits of the case"49 without being bound by technicalities or legal forms or rules of evidence50. The unusual provision was one introducing a burden of proof of disentitlement beyond reasonable doubt, in certain cases, in favour of the applicant. This provision for an exceptional standard and burden of proof remains in the present Act51, although it is now applicable to more limited circumstances. Normally, the respondent, in making any determination or decision in respect of a matter arising under the Act, is required (as it was in the present case) to "decide the matter to its reasonable satisfaction"52. The point of this legislative history is that, in every case, care has to be taken to observe the precise language of the Act. It contains its own peculiarities and special features. Problems in the application of the Act cannot be avoided by the invocation of generalities about beneficial construction53. Causal not merely temporal connection: Whatever the provisions for entitlements in workers' compensation or like statutes, or other laws providing repatriation benefits, it follows from the first point that it is essential, certainly so far as the principal claim based on ss 70(1)(b) and 70(5)(a) of the Act is concerned, to focus on the causative relationship postulated between the posited "defence-caused injury" and "any defence service". The need for such a causative relationship is indicated by the phrase "arose out of, or was attributable Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1 at 15 considering s 10A of that Act, later enacted, adopting a disjunctive criterion. 49 See Repatriation Act, s 39B. The Act was later amended in 1979 by the insertion of s 107VG(b): see Repatriation Commission v Law (1981) 147 CLR 635 at 644- 50 See Repatriation Act, s 107VG(a). Similar provisions were very common in workers' compensation statutes: see, eg, Workers' Compensation Act 1926 (NSW) 51 The Act, s 120(1), (2). 52 The Act, s 120(4). 53 (2003) 75 ALD 345 at 357 [53]. Kirby to". As the primary judge correctly noted, that expression was explained by this Court in Repatriation Commission v Law54. This Court accepted that the natural meaning of the words pointed to a "causal connexion rather than a temporal one". To this extent, the words were, by 1981 when they were considered in Law, viewed as significantly narrower than the formulae then common in workers' compensation legislation affording an alternative basis for entitlement, namely causal or temporal connection to the posited service55. The difference so established is clearly a deliberate one. The apparent disadvantages involved in the applicable phrase are offset by special provisions enlarging entitlement in certain cases56 and the unique provisions governing the burden and onus of proof just mentioned. The duty of the decision-maker is to attend to the precise language of the Act. In respect of the principal claim of the appellant, this is the language of causal connection. That said, the causal connection postulated (as the primary judge noted) is not confined to "the sole or dominant or prominent cause of the injury; it is sufficient if it is a contributory cause or connection"57. Other statutory entitlements: It emerged during argument of this appeal that the appellant enjoyed, and had pursued, concurrent entitlements, in respect of his service injuries under the Safety, Rehabilitation and Compensation Act 1988 (Cth). By that Act, in respect of the notional employment of service members, such as the appellant, an alternative basis of claim exists in respect of injuries arising "in the course of" such service. This Court has not examined the entitlements, if any, of the appellant under the latter Act with its wider formulation or how they relate to the present claim made under the Act. The only entitlements in issue in this appeal are those to a veteran's pension under the Act in respect of the appellant's knee injury. Any other entitlements must be disregarded58. 54 (1981) 147 CLR 635 at 649 per Aitkin J (with whom Gibbs CJ, Stephen and 55 See eg Kavanagh v The Commonwealth (1960) 103 CLR 547 at 555-557 considering the Commonwealth Employees' Compensation Act 1930 (Cth), s 9(1); cf Zickar v MGH Plastic Industries Pty Ltd (1996) 187 CLR 310 at 335, 351-352. 56 Under the Act, s 70(5)(c) and (d) and s 70(7). 57 [2002] FCA 1458 at [18] citing Holthouse v Repatriation Commission (1982) 1 RPD 287 at 288. 58 Defence personnel were earlier entitled to benefits under the Commonwealth Employees' Compensation Act 1930 (Cth). That Act was repealed by the Compensation (Commonwealth Employees) Act 1971 (Cth). Kirby The issues Against this background, the following issues arise for decision: The sufficiency of reasons issue: Whether the Tribunal gave sufficient reasons for its conclusion adverse to the appellant and, if it did not, whether the Federal Court erred on a question of law in failing to detect and remedy that insufficiency? The error on a question of law issue: Whether the decision of the Tribunal adverse to the appellant was correctly found by the Federal Court to have been open to it on the evidence, rendering it impermissible for that Court, as the majority concluded, to disturb the Tribunal's fact finding, even if that finding might appear factually erroneous or even perverse? The causation issue: Whether it was open to the Tribunal on the evidence before it to conclude that the intoxication of the appellant, that caused him to fall suffering injury to his knee, was a personal, voluntary or domestic act sustaining the Tribunal's conclusion that the appellant's injury was not "defence-caused" excluding correction by the Federal Court? The misdirection issue: Whether the Tribunal erred in law in the way in which it defined the attributes of defence service, and if so, whether this required correction by the Federal Court? The futility issue: Whether it would be futile for this Court to remit this case to the Tribunal bearing in mind the probability of the Tribunal concluding, on a correct application of the law, that the appellant's injury was, or was not, "defence-caused"? The consequential orders issue: Having regard to the conclusions on the foregoing issues, and the resolution of other grounds of appeal, what relief should be granted in the case, if any? Sufficiency of reasons The appellant's complaint: The appellant complained that, in rejecting his claim under the Act, the Tribunal had given inadequate reasons for doing so. In particular, the appellant complained of errors of commission and omission on the part of the Tribunal in giving its reasons. As to commission, the appellant argued that the Tribunal had expressed his case too narrowly in describing the "links" Kirby between the Army and the appellant's intoxication59. According to the appellant, the Tribunal's statement neglected to refer, or to give apparent weight, to the matters of military culture, courtesies to a visiting senior officer, habits of expected conduct and Sergeant Lee's statement that "[a]ll living in members were required to make up the numbers" when the RSM Army arrived for a visit. So far as omissions were concerned, these were said to include the failure of the Tribunal to refer, and respond, to the evidence of both the appellant and Sergeant Lee concerning the expectations imposed on members such as the appellant to attend, as he did, the function in the Mess. The fact that the occasion was not a "top dinner night" and that it was not "compulsory" to attend (in the sense of inviting disciplinary proceedings for a failure to do so) was less relevant, so the appellant argued, than the practical and service pressures imposed which were ignored by the Tribunal and uncorrected by the Federal Court. The statutory obligations: This is not a case where the scope of the duty of the administrative body to state reasons for its decision has been left to the common law. Here, Parliament has provided for a system of "appeals" from the Tribunal to the Federal Court. Self-evidently, sufficient reasons on the part of the Tribunal would be required to make the system of appeals effective and to fulfil its assumptions. Moreover, the Parliament has spelt out a general obligation for the Tribunal to give reasons "either orally or in writing for its decision"60. Where, as in the present case, the Tribunal gave its reasons in writing "those reasons shall include its findings on material questions of fact and a reference to the evidence or other material on which those findings were based"61. The Tribunal is obliged to cause a copy of its decision to be served on each party to the proceedings62. It is such a "decision" that enlivens the right in a party to a proceeding before the Tribunal to appeal to the Federal Court on a question of law63. Although such an "appeal" engages the jurisdiction of the Federal Court, as a matter of law that Court is 59 Roncevich v Repatriation Commission [2002] AATA 343 (14 May 2002) at [10] ("Reasons of the Tribunal"). 60 AAT Act, s 43(2). 61 AAT Act, s 43(2B). 62 AAT Act, s 43(3). 63 AAT Act, s 44(1). Kirby exercising its original and not its appellate jurisdiction under the Federal Court of Australia Act 1976 (Cth), ss 19 and 2064. The scope of the obligation on the part of an administrative decision- maker, acting in accordance with provisions such as those governing the Tribunal in this case, to set out "findings on material questions of fact", was considered by this Court in Minister for Immigration and Multicultural Affairs v Yusuf65. In that case, a majority concluded that provisions, not materially different from those governing the Tribunal in the present case, required the decision-maker only to set out findings on those questions of fact which the decision-maker considered material to the decision66. Although I took a broader view concerning the ambit of the statutory obligation in that case67, in the present appeal it is appropriate for me to proceed upon the basis of the correctness of the approach adopted by the majority. Conclusion: reasons adequate: Upon this basis, it may be accepted (as the primary judge concluded in the Federal Court68) that the reasons of the Tribunal were brief. However, that is not necessarily a flaw in the context of such a busy administrative tribunal. Courts conducting this form of review have been repeatedly enjoined by this Court to avoid overly pernickety examination of the reasons69. The focus of attention is on the substance of the decision and whether it has addressed the "real issue" presented by the contest between the parties. The primary judge defined this as70: "The real issue was whether the relevant factor, namely the fall, was in fact related to the [appellant's] defence service. That issue was identified and addressed by the Tribunal." 64 Director-General of Social Services v Chaney (1980) 3 ALD 161 at 171; 31 ALR 65 (2001) 206 CLR 323. 66 Yusuf (2001) 206 CLR 323 at 331 [9] per Gleeson CJ, 338 [34] per Gaudron J, 346 [68]-[69] per McHugh, Gummow and Hayne JJ, 389 [212] per Callinan J. 67 Yusuf (2001) 206 CLR 323 at 367 [136]-[138]. 68 [2002] FCA 1458 at [12]. 69 Minister for Immigration and Ethnic Affairs v Guo (1997) 191 CLR 559 at 575 at 597; cf Yusuf (2001) 206 CLR 323 at 348 [74]. 70 [2002] FCA 1458 at [33]. Kirby Within the ambit of what it has been held the statutory provisions governing the Tribunal required of it, no error has been shown in the conclusion that followed. The Tribunal's reasons adequately set out the reasons for its decision, "includ[ing] its findings on material questions of fact and a reference to the evidence ... on which those findings were based"71. The Tribunal might be right or wrong about the features that it identified in the evidence that afforded links between the appellant's defence service and the intoxication that caused his fall and consequent injury. However, it made its reasons plain enough. The attack on the decision, based on a failure by the Tribunal to conform to the statutory obligations of reasoning, must be rejected. Limits to a "question of law" The respondent's argument: The Federal Court's jurisdiction in the present case derived from s 44 of the Administrative Appeals Tribunal Act 1976 (Cth). It was limited to an "appeal", being one "on a question of law". This is a technical phrase. The respondent asserted that it brought with it restrictions on the ability of the Federal Court to disturb a conclusion "on a question of fact", even if such a conclusion were one which the Federal Court would not itself have reached, so long as the conclusion was sustained by evidence. This limitation is an important one because the respondent argued that it went to the heart of the reasoning of the majority judges in the Federal Court. As fact-finders, they might, or might not, have reached the same conclusion. But because there was evidence to sustain the conclusion, notably the evidence of Sergeant Lee, it was one which the Federal Court had no jurisdiction to disturb within its limited powers in an "appeal". Perverse fact finding?: Statutory provisions limiting appeals to those involving an error or question of law are relatively common. Accordingly, the scope of these expressions has attracted much judicial attention. In the New South Wales Court of Appeal, at least after Poricanin v Australian Consolidated Industries Limited72, it was repeatedly held that even perverse or unreasonable findings of fact do not constitute errors of law. Consequently, such findings could not raise a question of law. So much was held by majority in that Court in Azzopardi v Tasman UEB Industries Limited73. I dissented there from the view so expressed. I did so by reference to considerations of legal authority and principle. In particular, to combat the notion that errors of fact-finding could never rise to an error of law, I drew attention to the opinion of the Court, 71 AAT Act, s 43(2B). 72 [1979] 2 NSWLR 419 at 426. 73 (1985) 4 NSWLR 139 at 155-156 per Glass JA (Samuels JA concurring). Kirby delivered by Jordan CJ, in Brakell v Metropolitan Ice & Cold Storage Works (W Angliss & Co Aust Pty Ltd)74 to the effect that "in extreme cases only one [factual] inference may be possible as a matter of law"75. The notion that a decision-maker, including a judge, could reach perverse conclusions on the facts and the evidence, and yet be immune from judicial correction, is one that I have never accepted76. Nonetheless, Poricanin, affirmed in Azzopardi, has continued to enjoy judicial support77. Applying that authority, if all that was involved in the present case was a question whether the Tribunal had reached a "perverse" finding of fact, on the basis of the evidence submitted to it concerning the relationship of the appellant's fall and injury to his defence service, the appeal would be doomed to fail. If "perverse" findings of fact are protected from disturbance by courts limited to a jurisdiction confined to correcting errors on questions of law, a conclusion which is far from "perverse" is even more obviously protected from disturbance. After all, Sergeant Lee's evidence would sustain a conclusion of fact that alcohol consumption at Mess functions, although permitted, was not obligatory. Still less was it part of defence service, as such, "to drink alcohol to the point of intoxication". Ordinary commonsense would affirm that alcohol intoxication reduces the capacity of a member of the Forces, or anyone else, to perform duties if called upon at short notice to do so. Alcohol-aided conviviality might contribute to social harmony at Mess functions. But it is more than arguable, and far from perverse, to conclude that intoxication passes beyond any implied function related directly or indirectly to a member's defence service as such. 74 (1946) 63 WN (NSW) 203 at 203. 75 Azzopardi v Tasman UEB Industries Limited (1985) 4 NSWLR 139 at 149. 76 Azzopardi v Tasman UEB Industries Limited (1985) 4 NSWLR 139 at 146-151. See also Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 253- 254; Warley Pty Ltd v Adco Constructions Pty Ltd (1988) 8 BCL 300 at 305-308; X v The Commonwealth (1999) 200 CLR 177 at 218-219 [136]. 77 See eg Mahony v Industrial Registrar of New South Wales (1986) 8 NSWLR 1 at 5; Haines v Leves (1987) 8 NSWLR 442 at 476; cf at 469-470; Warley Pty Ltd v Adco Construction Pty Ltd (1988) 8 BCL 300 at 310-311; Tracy Village Sports and Social Club v Walker (1992) 111 FLR 32 at 37; Bowen-James v Delegate of the Director-General of the Department of Health (1992) 27 NSWLR 457 at 474-475; Wilson v Lowery (1993) 110 FLR 142 at 146-147; Bruce v Cole (1998) 45 NSWLR Kirby Should the "perverse findings" test be applied to the conclusions reached by the Tribunal? If it should, it would certainly strengthen the immunity of such conclusions from correction in the Federal Court in a proceeding such as the present. It would strengthen the respondent's case. On the other hand, the Azzopardi approach does not appear to have been uniformly applied by the Federal Court in deciding cases such as the present.78 It has been doubted in some state79 and territory decisions80. It is hard to reconcile with developments of administrative law involving decision-makers of lesser skill than judicial officers. In a suitable case, this Court should overrule the majority holding in Azzopardi. Perverse fact-finding, like perverse decision-making generally, is not immune from judicial correction in an appeal limited to correction of an error on a question of law. But the present is not a case in which it is necessary to establish that point. In its argument, the respondent did not seek to support the approach expressed in Azzopardi. Instead, by reference to the reasons of the Full Court of the Federal Court in Maunder v The Commonwealth81, in turn applying the reasons of Jordan CJ in Davidson v Mould82, the respondent emphasised the need for an approach to such questions that would comply with the language and purpose of the Act affording "appeals" on a question of law. In Davidson, "… [a] question of law arises when it is contended on the one hand that there was no material before the Commission on which it could find that it did, or on the other that on the material which the Commission accepted and its findings on that material it necessarily followed that it did … Between these two extremes, the question is one of degree, depending on the view taken of the relative importance and significance of the facts 78 See, for example, Dibeek Holdings Pty Ltd v Notaras [2000] FCA 1212 at [52]; contra C A Ford Pty Ltd t/as Caford Castors v Comptroller-General of Customs (1993) 46 FCR 443 at 446. 79 See, for example, Hill v Green (1999) 48 NSWLR 161 at 212-213; contra at 177. 80 See, for example, Young v Northern Territory (2004) 183 FLR 121 at 129. 81 (1983) 76 FLR 341. 82 (1943) 44 SR (NSW) 113. 83 (1943) 44 SR (NSW) 113 at 115 (citations omitted). See also Davidson v Mould (1944) 69 CLR 96 where the decision of the New South Wales Supreme Court was affirmed. Kirby proved in the evidence; and a decision either way by the Commission is one of fact and cannot be disturbed by this Court." Maunder was itself a case bearing some factual similarities to the present. A member of the Australian Army had attended a party in the Sergeants' Mess where he was Adjutant Quartermaster. The party began at 5.30 pm and continued until 3 am the following morning. An accident occurred on the member's journey home at 4.54 am. In the result, the member sustained injuries resulting in his death. A claim was made by his widow under the Compensation (Commonwealth Government Employees) Act 1971 (Cth). It raised legal issues different from the present case. However, as here, the claim was determined by the Tribunal adversely to the claimant and made subject to an "appeal" to the Federal Court. The Tribunal in Maunder had determined that it was an incident of the member's duty to be present at the Mess party until 10.30 pm but not thereafter. Rejecting the appeal to it, the Federal Court unanimously concluded that it was open to the Tribunal, on the evidence, to reject the claim on the assessment of the reasonableness of the member's attempt, after the prolonged Mess party, to drive himself home. This, it was concluded, was a question of fact immune from correction in an appeal limited to one on a "question of law". Thus, it was "open to the Tribunal on the evidence before it". The decision was therefore affirmed. There was no error of law. The respondent urged a similar approach on the part of this Court to the question whether the present appellant's injury was "defence-caused" within the meaning of the Act. It argued that it was open to the Tribunal to conclude, as a matter of fact, that the injury did not arise out of, nor was it attributable to, any defence service. As with Captain Maunder's case, the Tribunal was competent to conclude that a point was reached where convivial participation in a Mess party, even if initially connected to defence service and causes, turned into a purely personal pursuit of activities having no causal relationship with defence service. Conclusion: a strong argument: Subject to what follows, it will be obvious that I consider the respondent's submission to be a powerful one, consistent with legal authority and principle. Save for the legal misdescription to which reference will shortly be made, it would, in my view, have been fatal to an appeal limited to a "question of law". Causation and voluntary intoxication Causation and antecedent conditions: An argument related to the subject just considered arises from the respondent's contention that it was open to the Tribunal to draw the distinction of fact, sustained by the Federal Court, between Kirby conduct that could be classified as "defence-caused"84 and conduct that could be classified as "personal", "domestic" or "voluntary". In this sense, whatever view might have been taken of attendance at the Mess function for a time, for the purpose of welcoming a distinguished Army guest, it was open to the Tribunal to conclude that proceeding to become intoxicated was not "defence-caused" and thus not within the causative character of the phrase relied upon by the appellant ("arose out of or was attributable to, any defence service"). In support of its argument in this respect, the respondent called in aid the analysis by Professors Hart and Honoré in their text Causation in the Law85. In discussing voluntary action, as it relates to the concept of causation, the authors wrote: "[A] deliberate human act is therefore most often a barrier … in tracing back causes … [I]t is often something through which we do not trace the cause of a later event and something to which we do trace the cause through intervening causes of other kinds". (original emphasis) Later in the same text the authors observed, as a general principle of causation, that "the free, deliberate and informed act or omission of a human being, intended to exploit the situation created by defendant [sic], negatives causal connection"86. In such a case, the voluntary act of the subject might be "an antecedent condition not amounting to a cause"87. It might not, at least for legal purposes, be viewed as a cause in itself. Like so many other "general principles" in the matter of causation, this one admits of exceptions. One is that voluntary action will not be regarded as an intervening cause when it was the defendant's conduct that gave rise to the risk that injury would ensue from such voluntary conduct.88 Thus, in Reeves v Commissioner of Police of the Metropolis89 the House of Lords held that the fact 84 The Act, s 70(1)(b). 85 2nd ed (1985) at 44. 86 Causation in the Law, 2nd ed (1985) at 136. A good example is Beard v Richmond [1987] Aust Torts Reports ¶80-129 at 69,000. 87 March v Stramare (E & M H) Pty Ltd (1991) 171 CLR 506 at 517. 88 March v Stramare (E & M H) Pty Ltd (1991) 171 CLR 506 at 518-519; Empress Car Co (Abertillery) Ltd v National Rivers Authority [1999] 2 AC 22 at 30-32; Hart and Honoré, Causation in the Law, 2nd ed (1985) at 193-204. Kirby that a prisoner committed suicide while in police custody did not preclude an action brought against the police on behalf of the prisoner's estate on the basis that the prisoner was only capable of committing suicide because the police had failed in their duty to exercise reasonable care to prevent prisoners like him from performing acts of self-harm.90 Nevertheless, judicial authority, cited by the respondent, gives a measure of support for this kind of analysis. Like the present case, such authority concerned a claim to the grant of a pension for a serviceman. In Wedderspoon v Minister of Pensions91, cited by the primary judge, the facts involved a Surgeon Lieutenant in the Voluntary Reserve of the Royal Navy. During war service he suffered from sleeplessness and took a drug to overcome this difficulty. However, the drug had fatal consequences and he died on board his ship. His widow brought a claim for a service pension. It was disallowed on the basis that the death was due to misadventure unconnected with war service. The relevant tribunal stated a case for the opinion of the English High Court. Denning J affirmed the disallowance of the pension. His Lordship said92: "His weak heart and his sleeplessness were not causes of his death, but only the circumstances in which the cause operated. They were factors in the situation, but factors which fell short of being causes. … The dose was taken by [him] in his personal capacity. … The consequences of such an action are no more attributable to war service than the consequences of drinking too much or smoking too much or playing a game of squash. The cases show that when the cause of the death or disablement lies in the man's own personal or domestic sphere, and the war service does no more than provide the circumstances in which the cause operated, it is not attributable to war service." Given the attention of the Act presently applicable to similar questions of causation and its use, in the primary definition, of the same phase of connection ("attributable to"), the respondent urged that a like approach was open to the Tribunal and the Federal Court and should be affirmed by this Court. The circumstances in which the appellant had become intoxicated were part of the factual substratum of the case. But they did not provide a "defence-cause". Nor could the fall, consequent upon intoxication, be "attributable to" any defence activities or service as such. 90 See also Goodsell v Murphy (2002) 36 MVR 408 at 411-412 [22]-[29]; [2002] Aust Torts Reports ¶81-671 at 69,083-69,094. 92 [1947] KB 562 at 563. Kirby Whilst there are points of distinction between Wedderspoon and the present case, most notably the statutory foundation for the pension claim in Australia, and whilst Denning J's rejection of entitlements for such conduct as "smoking too much" hardly accords with later Australian repatriation cases93, a point of importance remains. As with all issues of causation in law, it is necessary to identify the limits of the propounded obligations. Such limits are usually drawn in a commonsense way by reference to any considerations of policy reflected in the language and purposes of the governing law.94 The prior existence of facts and circumstances does not, as such, make those facts and circumstances causally relevant, in a legal sense, for an event that follows in time. In every case, it is necessary to postulate an outer boundary of liability. According to the respondent, this is what the Tribunal did in finding that the appellant's intoxication in the Mess was not "defence-caused" and did not arise out of, nor was it attributable to, any defence service. Intoxication: recent authority: Some possible support for this line of reasoning may also be found in the approach of the majority of this Court in Cole v South Tweed Heads Rugby League Football Club Limited95. That was a case in which a club patron, supplied by or in the club over many hours with free alcohol, was seriously injured on her way home in an intoxicated state. Although in that case, with McHugh J, I dissented, and although the legal issue (being concerned with negligence law) was different, some of the reasoning of the majority in Cole contains expressions about the voluntary choice made by people who become intoxicated. It is thus reflective of the arguments of causation pressed on this Court by the present respondent. Self-evidently, no different principle of general application could apply to the resolution of issues arising out of intervening intoxication because the appellant was a woman with a problem of alcohol tolerance and the appellant was an intoxicated soldier, otherwise commendable in his service as such. In Cole, Gleeson CJ described the appellant's extended drinking as "voluntary 93 See, eg, Repatriation Commission v Law (1981) 147 CLR 635. See also Repatriation Commission v O'Brien (1985) 155 CLR 422. 94 Fitzgerald v Penn (1954) 91 CLR 268 at 277-278; Alphacell Ltd v Woodward [1972] AC 824 at 847; March v Stramare (E & M H) Pty Ltd (1991) 171 CLR 506 at 515, 522-523; Royall v The Queen (1991) 172 CLR 378 at 441; Bennett v Minister of Community Welfare (1992) 176 CLR 408 at 412-413; Chappel v Hart (1998) 195 CLR 232 at 238 [6], 243 [24], 268-269 [93], 281-282 [111], 285 [125], 95 (2004) 217 CLR 469. Kirby behaviour"96. There are similar references to voluntariness of alcohol consumption in the reasons of Callinan J97. His Honour remarked, in words seemingly applicable to the present appellant98: "Everyone knows as the outset that if the consumption continues, a stage will be reached at which judgment and capacity to care for oneself will be impaired, and even ultimately destroyed entirely for at least a period." In their joint reasons, Gummow and Hayne JJ rejected the argument of liability in negligence by reference to the concept of causation99: "Even assuming the various difficulties identified about the formulation of a duty of care to monitor and moderate the amount of liquor the appellant drank could be overcome, the breach of such a duty, however it is expressed, was not a cause of the injuries the appellant sustained. … [T]he Club could do nothing more to require her to take care. In particular, it could not lawfully detain her. If, as happened here, she left the Club and was injured, any carelessness of the Club in selling her liquor was not a cause of what happened." Can it be said that, by analogous reasoning, it was open to the Tribunal in the appellant's case to conclude, on the facts, that his consumption of alcohol to the point of intoxication was "voluntary behaviour" and that his later fall and injury were not causative of any service liability, simply the outcome of his own personal conduct, even if such conduct was itself affected by the antecedent consumption of alcohol in a defence facility on a service occasion? Conclusion: distinguishable issues: I will assume for present purposes that the issues raised about voluntariness and causation in Cole are special to the facts of that case or limited to the law of negligence. Certainly, because of my own views in Cole100, I would not want to extend any principle of exemption from legal liability of the suppliers of alcohol products for which that case stands101. The considerations emphasised for the respondent in this appeal as to 96 (2004) 217 CLR 469 at 473 [3]. 97 (2004) 217 CLR 469 at 502 [115]. 98 (2004) 217 CLR 469 at 507 [131]. 99 (2004) 217 CLR 469 at 491 [76]. 100 (2004) 217 CLR 469; see especially at 494-495 [90]-[92]. 101 cf Chamberlain, "Duty-Free Alcohol Service", (2004) 12 Tort Law Review 121; Hamad, "The intoxicated pedestrian: Tortious reflections", (2005) 13 Tort Law (Footnote continues on next page) Kirby the voluntariness of the appellant's consumption of alcohol may yet prove important for the resolution of the facts of this case. This analysis brings me to the point under the Act that ultimately carries the day for the appellant. The Tribunal misdirected itself The content of "defence service": The Tribunal rejected the appellant's claim by reference to a view of the operation of the Act that was unduly narrow. Despite the extensive evidence of the circumstances of the appellant's defence service and the events that had effectively required him to make up the numbers in the Mess function, the Tribunal allowed itself to be diverted into issues concerning the appellant's obligation to attend that function. Thus, the Tribunal referred to the evidence of Sergeant Lee that the occasion was "not a 'top dinner night'. It was not compulsory to attend". It recorded that it was "not compulsory to drink alcohol" and "not compulsory to stay until any specified time". It was in this context that the Tribunal concluded102: "The only links between the Army and the intoxication of Mr Roncevich were that the intoxication occurred on an Army Base and that Mr Roncevich and his fellow drinkers were soldiers. The intoxication was not caused by, nor did it arise out of any task that Mr Roncevich had to do as a soldier, nor did it arise out of his defence service, nor did it occur in the course of his defence service." It was common ground that the reference in this passage to the "course of his defence service" was immaterial, no temporal expression in these terms appearing in the Act103. For the present, I will assume, as the respondent argued, that this error was immaterial. That still left the criterion, applied by the Tribunal of what the appellant "had to do as a soldier". The respondent submitted that this reading of the Tribunal's reasons involved fine tooth-combing the language of the reasons. It suggested that the expression was no more than a reference to any task of the appellant "as a soldier", in effect omitting the words "had to do". I would gladly embrace that reading of the Tribunal's reasons but for the Tribunal's repeated emphasis, in Review 14; Dixon and Spinak, "Common Law Liability of Clubs for Injury to Intoxicated Patrons: Cole v South Tweed Heads Rugby League Football Club Ltd", (2004) 27 University of New South Wales Law Journal 816. 102 Reasons of the Tribunal at [10] (emphasis added). 103 A similar reference to "in the course of his defence service" appears in the Reasons of the Tribunal at [11]. Kirby describing the evidence of Sergeant Lee, as to what it was compulsory for the appellant to do at the Mess function. Clearly enough, the Tribunal was considering the scope of defence service by reference to notions of compulsion, requirement and obligation. It was after reference to such notions that the Tribunal rejected the claim as not defence- caused nor arising out of the appellant's defence service nor service related within the meaning of the Act. The question is whether this approach involved a material legal error that contaminated the fact-finding otherwise immune from correction in the Federal Court in an appeal limited to one on a "question of law". Did it show that the Tribunal misdirected itself in law, calling for correction on this account by the Federal Court? The authority of Henderson: In the joint reasons, approval is given to the reasoning in the Full Court of Heerey J, in dissent, citing in turn a passage from the reasons of Dixon J in Henderson v Commissioner of Railways (WA)104. With respect, that passage appears in an explanation by Dixon J of the content of the phrase "in the course of the employment" which phrase is contained in many workers' compensation statutes. As has been pointed out, when the War Pensions Act and the Repatriation Act were enacted, that phrase was omitted. Instead of expressing the foundation of entitlement in such temporal terms, causal criteria were adopted in both instances. A causal criterion has persisted in the Act to the present time in respect of the primary entitlement to pension benefits upon which the appellant relied. The "injury" must be "defence-caused". It must be one that "arose out of, or was attributable to" defence service. Therefore, as such, Henderson does not provide authority that applies to the applicable statutory language. And, as has been pointed out, that language is deliberate, different and must be given effect according to its terms. Yet does the approach in Henderson nonetheless apply, beyond the category which Dixon J elaborated in that case, so as to define the ambit of "defence service"? True it is, Dixon J was specifically concerned with accidents arising "shortly before the beginning of actual work or shortly after its cessation", and thus addressing himself to issues of temporal connection. But in defining the scope of defence service, considerations arise similar to those presented in defining the scope of "the course of employment". Just as the latter includes not only work that is "required" to be done but also that is "expected or authorised" to be done, notions of "defence service" and "defence-caused" should be similarly extended. To adopt a narrow reading of "defence service" in the 104 See joint reasons at [17], citing Henderson v The Commissioner of Railways (WA) (1937) 58 CLR 281. See also Hatzimanolis v ANI Corporation Ltd (1992) 173 CLR 473. Kirby modern age would be unduly constricting. True, defence service is disciplined. It is subject to many laws and regulations. But there is also scope, and need, for individual initiatives that go beyond the performance of what is "compulsory", "obligatory" or "required". By confining attention to considerations of what it was "compulsory" for the appellant to do as part of his "defence service" and limiting notions of "defence service" and "defence-caused", the Tribunal unduly narrowed the appellant's activities as a member of the Forces out of which entitlements under the Act might arise. This was not an immaterial restriction. Indeed, it went to the heart of the issues to which the evidence before the Tribunal was addressed. Those issues concerned whether, whatever the legal or disciplinary obligations, attendance by the appellant in the Mess function was expected of him, with the consequence that he would become involved in drinking with colleagues and might become intoxicated because of the social, cultural and environmental norms to which he was subjected at such an event. Conclusion: error of law: It follows that the Tribunal misdirected itself on a question of law material to its decision. This error ought to have been detected and corrected by the Federal Court. In the Full Court, far from correcting the error, the majority repeated as the "critical finding" of the Tribunal that the appellant "was not required to attend the relevant function on the day in question"105. It acknowledged that the Tribunal's view about whether the injury was "defence caused was based on that finding"106. In stating that such a finding was open to the Tribunal, the majority in the Full Court failed to perceive that narrowing the ambit of the appellant's "defence service" and what was thus "defence-caused" potentially prejudiced the appellant in the factual establishment of his claim. Instead of considering, as a question of fact, what was reasonably expected or authorised to be done by the appellant to carry out his duties of defence service, the Tribunal diverted its attention to notions of requirement, obligation and compulsion. Because, arguably, this deprived the appellant of the chance to secure a favourable determination on the facts concerning the cause of his fall and injury, it deprived him of the application of the Act to his case according to its terms. On the face of things, this requires a factual redetermination by the Tribunal free of this legal misdirection and free of the 105 (2003) 75 ALD 345 at 359 [58] (emphasis added). 106 (2003) 75 ALD 345 at 359 [58]. Kirby consequential confinement of the "only links" between the Army and the intoxication which the Tribunal nominated. Redetermination is not futile The appellant's suggested futility: Having reached this point, a question arises whether this Court should terminate this over-long saga of litigation stretching back nearly 20 years. The appellant suggested that this was one of the "rare cases" where it would be appropriate for this Court to substitute a finding on the facts in favour of the appellant so as to bring the litigation to a close. The Full Court of the Federal Court has held that, in limited circumstances, it has the power in an "appeal" on a question of law to enter upon a substantive determination of the matter107. Any powers that the Federal Court enjoys in this respect would belong to this Court in the exercise of its own appellate For a number of reasons, assuming (without deciding) that such a power exists, this would not be a case for exercising it. First, since these proceedings commenced, express power has been afforded to the Federal Court, in appeals of this character, to make findings of fact in specified circumstances109. Where the Parliament has provided such a power, but with restrictions that are material, that affords a substantial reason why a like power should not be assumed in other circumstances by this Court. Secondly, the appellant's proposition invited this Court to make a finding of fact which, due to an error on a question of law, has never been decided by the body entrusted by the Parliament with fact-finding, namely the Tribunal. The proper and limited function of "appeals" from the Tribunal should be observed. The advantages of the Tribunal in fact-finding should be respected. Behind observance of the statutory provisions in this respect lies an important constitutional principle, limiting the disturbance of administrative decisions by courts created under Ch III of the Constitution, such as this Court110. 107 Lowerson v Repatriation Commission (1994) 50 FCR 252 at 269-271; Repatriation Commission v Nation (1995) 57 FCR 25 at 35. 108 Judiciary Act 1903 (Cth), s 37. 109 See AAT Act, s 44(7). The transitional provisions applicable to the amendment provide that the sub-section applies only to an appeal instituted after the commencement of the item, thus making it inapplicable to the present appeal: Administrative Appeals Tribunal Amendment Act 2005 (Cth), Sched 1 (175). 110 cf Minister for Immigration and Ethnic Affairs v Guo (1997) 191 CLR 559 at 598- Kirby Thirdly, as the discussion of the issues of fact-finding and causation demonstrate, it is far from certain, even within a larger concept of "defence- caused" and "defence service" that the appellant would succeed on the facts. He still has to confront the respondent's arguments designed to limit the ambit of what is "defence-caused" and what arises out of, or is attributable to, any "defence service" by reference to excluding conduct that can be classified as "personal", "domestic" or "voluntary" in the circumstances. Obviously, the appellant's case does not fall within the somewhat extreme evidentiary circumstances described in Maunder111. Nevertheless, in the current judicial environment of expressed faith in the voluntarism of alcoholic intoxication, the respondent undoubtedly has a strong factual argument to exclude liability, at least under s 70(5)(a) of the Act. The respondent's suggested futility: But can it be said that returning this case to the Tribunal for a third time would be futile because the Tribunal would inevitably reach a result adverse to the appellant even without any misdirection of law? I think not. It is not impossible that, absent restrictions derived from notions of obligation, requirement and compulsion, a factual conclusion could be reached that the appellant's consumption of alcohol on this occasion was defence related or defence-caused and thus that his consequent fall "arose out of or was attributable to" defence service in its more ample factual understanding. Conclusion: not futile: I do not therefore regard it as futile to return this matter to the Tribunal. This was the course that was favoured by the dissenting judge in the Full Court112. It is the course that the proper application of the law requires. Consequential orders The appellant succeeds in this Court on a ground not, as such, argued in the Federal Court and not finally expressed in this Court until the very day of the hearing. A consideration arises as to whether this fact, and the meandering course of the grounds of appeal as the matter progressed through the Federal Court, should be reflected in this Court's order for costs. However, as the respondent, somewhat benignly, did not so submit, I am content to agree with the order proposed by my colleagues, that the respondent should pay the costs of the appellant. 111 (1983) 76 FLR 341. 112 Roncevich v Repatriation Commission (2003) 75 ALD 345 at 355 [38]. Kirby In his submissions to this Court, principally those in writing, the appellant propounded his claim beyond the one chiefly relied on under s 70(5)(a) of the Act. Because the matter must now be returned to the Tribunal, where the ultimate claims may be reformulated yet again and the evidence propounded accordingly, it would be superfluous to add remarks concerning the other provisions of the Act. They were not specifically addressed in the Tribunal's decision. Remitter to the Tribunal will afford the opportunity to do so, should further reflection convince those appearing for the appellant that they deserve separate consideration and decision and should the Tribunal permit that course. I agree in the orders proposed in the joint reasons.

HIGH COURT OF AUSTRALIA AND APPELLANT THE QUEEN RESPONDENT IL v The Queen [2017] HCA 27 9 August 2017 ORDER Appeal allowed. Set aside the orders of the Court of Criminal Appeal of the Supreme Court of New South Wales made on 8 April 2016 and in their place order that the appeal to that Court be dismissed. On appeal from the Supreme Court of New South Wales Representation B J Rigg SC with R C Pontello for the appellant (instructed by Benjamin & Leonardo Criminal Defence Lawyers) S C Dowling SC with H R Roberts for the respondent (instructed by Solicitor for Public Prosecutions (NSW)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS IL v The Queen Criminal law – Murder and manslaughter – Where appellant and deceased engaged in joint criminal enterprise – Where act causing death committed in course of joint criminal enterprise – Where Crown could not exclude possibility that deceased had committed act causing death – Where appellant charged with murder or manslaughter of deceased – Whether s 18(1) of Crimes Act 1900 (NSW) encompasses self-killing. Criminal law – Joint criminal enterprise liability – Whether acts or liability for actus reus of crimes committed in course of joint criminal enterprise attributed to co-participant – Whether act of deceased causing death attributable to appellant. Words and phrases – "attribution of acts", "complicity", "constructive murder", "derivative liability", "felo de se", "felony murder", "joint criminal enterprise liability", "primary liability", "rules of attribution", "self-murder", "suicide". Crimes Act 1900 (NSW), s 18. KIEFEL CJ, KEANE AND EDELMAN JJ. The legal issue on this appeal The background, facts, and legislative provisions are set out in the judgment of Bell and Nettle JJ. We agree that the appeal should be allowed on the first ground of appeal. We also agree with the orders that their Honours propose. However, we reach the conclusion that the appeal should be allowed on the first ground for different reasons. The offences of murder and manslaughter in s 18 of the Crimes Act 1900 (NSW) require that one person kill another person. Section 18 is not engaged if a person kills himself or herself intentionally. Nor is it engaged if the person kills himself or herself in the course of committing a crime punishable by imprisonment for life or for 25 years or by an unlawful and dangerous act. This conclusion is sufficient to allow the appeal on the first ground. It is unnecessary to consider the second ground of appeal or the notice of contention, which concerned whether the killing was "malicious" within s 18(2)(a). Since we conclude that murder in s 18 does not apply to circumstances involving self-killing, it is not strictly necessary for us to consider the operation of the rules of attribution when co-offenders act in concert. It suffices to observe that we agree with the assumption upon which this case was conducted by the parties, namely, that when two or more persons act in concert to effect a common criminal purpose, it is the acts of each person to effect their common purpose which are attributed to the others. The decision of this Court in Osland v The Queen1 establishes that it is the acts which are attributed in this scenario, it is not the liability. Nor is it the actus reus of a notional offence. The way this issue arises As Bell and Nettle JJ explain, the Crown's case was that the appellant and the deceased were participants in a joint criminal enterprise to manufacture a large commercial quantity of a prohibited drug, methylamphetamine. A ring burner attached to a gas cylinder was lit in a small and inadequately ventilated room during the commission of that crime, causing a fire which led to the death of the deceased. The Crown relied upon the category of murder in s 18(1)(a) of the Crimes Act, commonly referred to as "felony murder" or "constructive murder", in support of its case that the appellant murdered the deceased. That was the focus of submissions on this appeal. Alternatively, the Crown alleged that the appellant was guilty of manslaughter of the deceased by an unlawful and (1998) 197 CLR 316; [1998] HCA 75. Edelman dangerous act. Section 18 is set out later in these reasons but, in summary, the elements of that section relevant to this appeal concerning the proof of murder are the following: (1) an "act of the accused ... causing the death charged"; (2) which "was done ... during ... the commission, by the accused, or some accomplice ... of a crime"; and (3) the crime is one which is punishable by imprisonment for life or for 25 years. The Crown's case in respect of those three requirements was that: (1) the act of the accused was the lighting of the ring burner which caused the death of the appellant's co-participant; (2) that act was done during the commission by the appellant, or the co-participant, of the crime of manufacture or production of a large commercial quantity of a prohibited drug contrary to s 24 of the Drug Misuse and Trafficking Act 1985 (NSW); and (3) that crime is punishable by imprisonment for life (s 33(3)(a)). There was no dispute that requirements (2) and (3) were satisfied. However, the Crown could not prove whether it was the appellant or the deceased who lit the ring burner. So the Crown submitted at trial that even if it were the deceased who lit the ring burner, his act could be attributed to the appellant with the result that his act could be the "act of the accused" for the purposes of murder or manslaughter under s 18 of the Crimes Act. The Crown relied upon rules of attribution commonly known as "joint enterprise liability". The most elementary difficulty with the Crown case is the assumption upon which it was based, that s 18 applied in a case of self-killing. Properly construed, s 18 is not engaged in a circumstance in which a deceased accomplice killed himself or herself. It was, therefore, not engaged in this case. Questions of attribution need not arise. The origins of s 18 of the Crimes Act Section 18(1) of the Crimes Act originated in s 9 of the Criminal Law Amendment Act 1883 (NSW)2. In Ryan v The Queen3, Windeyer J quoted with approval the comment from two Draftsmen of that Act, Sir Alfred Stephen and Alexander Oliver4, the expression "malice aforethought", the New South Wales definition of murder did not otherwise alter from banishing that apart 2 Ryan v The Queen (1967) 121 CLR 205 at 238; [1967] HCA 2; R v Lavender (2005) 222 CLR 67 at 76 [20]; [2005] HCA 37. (1967) 121 CLR 205 at 241. 4 Stephen and Oliver, Criminal Law Manual, (1883) at 201. Edelman the common law. Section 9 of the 1883 Act (later s 18(1) of the Crimes Act) was therefore intended to be a restatement of the common law relating to murder and manslaughter "but shorn of some of the extravagances of malice aforethought and constructive malice"5. In order to understand the operation of s 18, it is necessary, therefore, to appreciate what was meant by murder and manslaughter at common law. The common law position prior to 1883 was that a homicide which was neither justifiable nor excusable was a felony. For centuries, the common law had divided the felony of homicide into three categories. As Blackstone explained in 1769, the first category was felo de se. This was a "peculiar species of felony, a felony committed on oneself"6. Blackstone continued7: "The other species of criminal homicide is that of killing another man. But in this there are also degrees of guilt, which divide the offence into manslaughter, and murder." (emphasis in original) In the 1800 edition of his manuscript, Hale drew the same distinction. He wrote of the basic division between a felony "which concerns the loss of life happening to a man's self" and a felony concerned with the loss of life "happening to another"8. Hale explained that the first of these, involving a voluntary act, was felo de se (ie suicide)9. In the 1817 edition of Sir Edward Coke's Institutes, the distinction between self-killing and the killing of another was reiterated. Although using the looser language of "murder of a man's self" interchangeably with felo de se10, it 5 Parker v The Queen (1963) 111 CLR 610 at 657 per Windeyer J; [1963] HCA 14, cited with approval in R v Lavender (2005) 222 CLR 67 at 78 [26] per Gleeson CJ, McHugh, Gummow and Hayne JJ. See also Stephen and Oliver, Criminal Law Manual, (1883) at 10. 6 Blackstone, Commentaries on the Laws of England, (1769), bk 4 at 189. 7 Blackstone, Commentaries on the Laws of England, (1769), bk 4 at 190. 8 Hale, Historia Placitorum Coronae: The History of the Pleas of the Crown, (1800), vol 1 at 411. 9 Hale, Historia Placitorum Coronae: The History of the Pleas of the Crown, (1800), vol 1 at 411-413. 10 Coke, The Third Part of the Institutes of the Laws of England; Concerning High Treason, and other Pleas of the Crown and Criminal Causes, (1817) at 54. Edelman was plain that Sir Edward Coke treated self-killing separately from murder. However, in A History of the Criminal Law of England, Sir James Fitzjames Stephen sought to assimilate suicide and murder despite recognising the distinction in Sir Edward Coke's writing between the two offences11. This was apparently for the rhetorical purpose of agitating for the exclusion of felo de se from homicides altogether12. Nevertheless, even Stephen was forced to recognise differences between felo de se and murder. For instance, he contrasted accessories to suicide and accessories to murder when he said that the "abetment of suicide may, under circumstances, be as great a moral offence as the abetment of murder" (emphasis added) but that the abetment of suicide involves much less public danger than the abetment of murder13. In 1824, in the eighth edition of Hawkins' A Treatise of the Pleas of the Crown14, felonious homicide was again divided into the same three categories, separating self-killing and murder: "[(1)] felo de se, or felonious homicide of a man's self; [(2)] murder, which is the killing of another with malice aforethought, either express or implied; and [(3)] manslaughter, which is the killing of another without premeditation or malice aforethought." The same distinction was reflected in the results of the decided cases for two centuries. Almost without exception, arguments which attempted to treat felo de se as a type of murder, based on the inaccurate and loose language of "self-murder", were consistently rejected by the courts. In 1660, in R v Ward15, the crime of felo de se was held not to be murder and therefore capable of being pardoned. The view which prevailed in that case was that "felo de se and murder 11 Stephen, A History of the Criminal Law of England, (1883), vol 3 at 52-53. 12 Stephen, A History of the Criminal Law of England, (1883), vol 3 at 107. 13 Stephen, A History of the Criminal Law of England, (1883), vol 3 at 107. 14 Hawkins, A Treatise of the Pleas of the Crown; or, a System of the Principal Matters Relating to that Subject, Digested under Proper Heads, 8th ed (1824), vol 1 at 76 fn 1. 15 (1660) 1 Lev 8 [83 ER 270]. Edelman are distinct things, and distinctly treated of by all authors"16. The same point was made in Tombes v Ethrington17. In 1832, in R v Russell18, the Crown argued that a prisoner could be tried as an accessory before the fact of "self-murder" where the self-killing was in the course of a felonious act. Nine judges of the Court held that although the prisoner was an accessory before the fact of the offence of felo de se, neither by the preceding common law nor under the 1826 statute19, which conferred jurisdiction to try felonies committed abroad, could a person be tried as an accessory to murder where the killing was a self-killing. Tindal CJ observed that another statute, the Burial of Suicide Act 1823 (4 Geo IV c 52), had used the term "felo de se" rather than the word "murder" throughout, and that this confirmed that "'murder' means murder of another only"20. Again, in 1862 in R v Fretwell21, the question arose whether a conviction for murder could be upheld where the prisoner had, at the deceased's request, procured a poison for her to attempt an abortion. The Chief Justice explained that it was not necessary to decide whether the deceased was felo de se22. It was sufficient for the Court to conclude that the prisoner was not guilty of murder. It was not necessary for the Court to consider whether the prisoner could have been convicted of felo de se by a derivative liability for aiding and abetting. Conviction of felo de se was not a conviction for murder. Yet again, in 1862 in R v Burgess23, the Court held that an attempt to commit suicide is not an offence within the terms of a statute creating the offence of an "attempt to commit murder". The issue arose by a case stated to determine 16 R v Ward (1660) 1 Lev 8 at 8 [83 ER 270 at 270]. 17 (1663) 1 Lev 120 [83 ER 327]. 18 (1832) 1 Mood 356 [168 ER 1302]. 19 Criminal Law Act 1826 (7 Geo IV c 64), s 9. 20 R v Russell (1832) 1 Mood 356 at 367 [168 ER 1302 at 1306]. 21 (1862) Le & Ca 161 [169 ER 1345]; cf R v Gaylor (1857) D & B 288 [169 ER 22 R v Fretwell (1862) Le & Ca 161 at 164 [169 ER 1345 at 1346-1347]. 23 (1862) Le & Ca 258 [169 ER 1387]. Edelman whether the Court of Quarter Sessions had jurisdiction in a case of attempted self-killing. If the accused's attempt to kill herself were attempted murder within the statute then the Court of Quarter Sessions would have no jurisdiction. The Crown argued that the attempted self-killing was not attempted murder and that it remained only a common law misdemeanour within the jurisdiction of the Court of Quarter Sessions. The entirety of the Crown submissions by Poland (later Sir Harry Poland QC) were to the effect that the crime of felo de se is separate from murder. His submissions began with the assertion that these two crimes were treated separately in all the text books. He concluded his submissions with an aside that Sir John Jervis had said, in his A Practical Treatise on the Office and Duties of Coroners, that it was not necessary to use the word "murdravit" in an inquisition for suicide24. In a further passage from that work, Sir John Jervis explained that although an inquisition for felo de se should conclude with the words "sic seipsum murdravit" (and so murdered himself), there had been inquisitions where these words had not been added25, including the decision in The final submission by Poland about coronial inquests did not assist the Crown case. As Sir John Jervis had observed27, and as the reporter of Toomes v Etherington28 expressed the point, the omission of the concluding words of "self- murder" in a coronial inquest was explicable because, unlike the killing of another person, to different punishments". This point was noticed by the Court during argument. In response to the submission concerning inquisitions by coroners, Pollock CB postulated that the absence of a reference to murder in an inquisition for suicide was because there was no offence of "self-manslaughter"29. To this, Williams J added that there are "no degrees in self-destruction" so that if "a man feloniously kill himself, it must be self-murder"30. His Honour also added that the there were no "different degrees subject 24 R v Burgess (1862) Le & Ca 258 at 260 [169 ER 1387 at 1388]. See Jervis, A Practical Treatise on the Office and Duties of Coroners, (1829) at 322 fn 4. 25 Jervis, A Practical Treatise on the Office and Duties of Coroners, (1829) at 286. 26 (1562) 1 Plow 253 at 255 [75 ER 387 at 390]. 27 Jervis, A Practical Treatise on the Office and Duties of Coroners, (1829) at 269, 28 (1663) 1 Wms Saund 353 at 356 [85 ER 515 at 516]. 29 R v Burgess (1862) Le & Ca 258 at 260 [169 ER 1387 at 1388]. 30 R v Burgess (1862) Le & Ca 258 at 261 [169 ER 1387 at 1388]. Edelman presentment in Toomes v Etherington was equivalent to an allegation of self- murder31. Poland, for the Crown, accepted this explanation of the lack of need for words of "murder" in coronial inquests but reiterated his principal submission by referring to a number of cases where felo de se was treated separately from murder32. The Court reserved its decision for a week, indicating the importance of the issue. The reasons for decision of the five judges were delivered by Pollock CB. His Lordship concluded that an attempt to commit suicide was not an attempt to commit murder within the Offences against the Person Act 1861 (24 & 25 Vict c 100). However, like the submissions of Poland for the Crown, his Lordship's reasoning was not based upon a mere matter of statutory construction. He said33: "[A]ttempting to commit suicide is not attempting to commit murder within that statute. If it were, it would follow that any one attempting to commit suicide by wounding himself must be indicted for the offence of wounding with intent to commit murder, which until very recently was punishable with death. There is a vast difference between inflicting a wound on another and inflicting a wound on oneself with that intent." The distinction between these three different types of homicide, namely (i) self-killing; (ii) manslaughter (of another); and (iii) murder (of another), was therefore well known in 1883 when the progenitor to the Crimes Act was enacted. Although some cases were difficult to classify, the distinction was one which was constantly drawn. Two examples given in Hawkins' A Treatise of the Pleas of the Crown34 illustrate the careful distinction that was drawn between self-killing and murder in difficult cases. The first example was where one 31 R v Burgess (1862) Le & Ca 258 at 261 [169 ER 1387 at 1388], with reference to Jervis, A Practical Treatise on the Office and Duties of Coroners, (1829) at 322 32 R v Burgess (1862) Le & Ca 258 at 261 [169 ER 1387 at 1388]. 33 R v Burgess (1862) Le & Ca 258 at 262 [169 ER 1387 at 1389]. 34 Hawkins, A Treatise of the Pleas of the Crown; or, a System of the Principal Matters Relating to that Subject, Digested under Proper Heads, 8th ed (1824), vol 1 at 78. Edelman person "kills another upon [the other's] desire or command"35. The killing of another in these circumstances was treated as murder and "the person killed [was] not looked upon as a felo de se"36. In contrast, the second example was where one person induces another to buy a poison which they both drink with the intention of killing themselves. The purchaser of the poison does not die but, nevertheless, since he was not the inducer, the purchaser was not a murderer and the deceased was treated as a felo de se. In between these two examples was the difficult case where two people reached a joint agreement to commit suicide. If only one died, the agreement of the survivor was sometimes held to be sufficient to treat the survivor as having a derivative liability as "principal in the second degree"37. As we explain later, the derivative liability was not a primary liability. It was a derived liability for the crime committed by the person who was primarily liable. As we have explained, that crime could only have been felo de se even if, on occasion, it was loosely, and inaccurately, described as "self- murder". The categories were reiterated in Kenny's criminal law text in 190238. In that text Kenny again distinguished between, on the one hand, (i) felo de se, that is, "a suicide that takes place under such conditions as to be criminal"39, and, on the other hand, two other categories, being (ii) manslaughter, that is, "killing another person unlawfully, yet under conditions not so heinous as to render the act a murder"40, or (iii) murder, involving the killing of another person including with the "distinctive attribute"41 of malice aforethought. 35 Hawkins, A Treatise of the Pleas of the Crown; or, a System of the Principal Matters Relating to that Subject, Digested under Proper Heads, 8th ed (1824), vol 1 at 78. 36 Hawkins, A Treatise of the Pleas of the Crown; or, a System of the Principal Matters Relating to that Subject, Digested under Proper Heads, 8th ed (1824), vol 1 at 78. 37 R v Dyson (1823) Russ & Ry 523 at 524 [168 ER 930 at 931]; R v Jessop (1877) 16 Cox CC 204 at 206. 38 Kenny, Outlines of Criminal Law, (1902). 39 Kenny, Outlines of Criminal Law, (1902) at 112. 40 Kenny, Outlines of Criminal Law, (1902) at 115. 41 Kenny, Outlines of Criminal Law, (1902) at 132. Edelman In relation to the killing of another which amounted to murder, the difficulty with the expression "malice aforethought" was that "malice" was misleading, and "aforethought" was false42. The expression was an unfortunate description of six different species of mens rea which were sufficient to establish murder. Although the mens rea for murder, and particularly for felony murder, was amended in s 9 of the Criminal Law Amendment Act 1883 and s 18 of the Crimes Act, these sections remained concerned only with murder and manslaughter. They were not concerned with felo de se (self-killing). Other statutes, enacted at the same time, dealt with self-killing43. The species of murder which was felony murder was controversial. As Kenny explained, "if a thief gives a man a push with intent to steal his watch, and the man falls to the ground and is killed by the fall − or if a man assaults a woman, with intent to ravish her, and she, having a weak heart, dies in the struggle − such a homicide would ... be murder"44. The 1883 Act preserved felony murder but confined it to capital offences or those punishable by life imprisonment. Although qualifying the common law, this was based upon a common law conception of murder. As explained by the two Draftsmen of the 1883 Act45: "The accidental taking of life, by a person committing (or about to commit) a felony of any kind, is by the Common Law murder. Under the ninth section [later s 18] it will not amount to that crime, unless the felony was a capital one, or punishable by penal servitude for life." The terms of s 18 of the Crimes Act are not concerned with self-killing Section 18 of the Crimes Act provides as follows: 42 Kenny, Outlines of Criminal Law, (1902) at 133. 43 Law of Felo-de-se Amendment Act 1862 (NSW); Verdicts of Felo-de-se Abolition Act 1876 (NSW). 44 Kenny, Outlines of Criminal Law, (1902) at 137. 45 Stephen and Oliver, Criminal Law Manual, (1883) at 201. Edelman "Murder and manslaughter defined (a) Murder shall be taken to have been committed where the act of the accused, or thing by him or her omitted to be done, causing the death charged, was done or omitted with reckless indifference to human life, or with intent to kill or inflict grievous bodily harm upon some person, or done in an attempt to commit, or during or immediately after the commission, by the accused, or some accomplice with him or her, of a crime punishable by imprisonment for life or for 25 years. (b) Every other punishable homicide shall be taken to be manslaughter. (a) No act or omission which was not malicious, or for which the accused had lawful cause or excuse, shall be within this section. (b) No punishment or forfeiture shall be incurred by any person who kills another by misfortune only." It would be a strong thing to hold that, under the common law in 1883 upon which this section was based, the appellant was guilty of murder when no case can be found which held that a person in the position of the appellant, ie a person whose accomplice unintentionally killed himself in the course of carrying out a joint criminal enterprise, was guilty of murder. Consistently with its origins in the common law, the text and context of s 18 also confirm that the concern of the section was not with the killing of oneself. First, when it was enacted s 18 was immediately followed by the penalty in s 19, which provided that the person who commits murder "shall be liable to suffer death"46. That plainly indicated that the "murder" the section was concerned with was the killing of another person. Secondly, the instance of murder involving "intent to kill or inflict grievous bodily harm upon some person" (emphasis added) contemplated that "some person" was some person 46 The same words were used in the text of Criminal Law Amendment Act 1883 (NSW), s 9. Edelman other than the person causing the death. Indeed, on a literal reading of s 18(1) the "person" whose death is caused is differentiated from the "accused" and the "accomplice". The language in which s 18(1) is cast does not contemplate that the accomplice of the accused might be the person whose death was caused by is an express the accused or acknowledgement that the punishment or forfeiture in relation to killing, other than by misfortune, is concerned with the killing, by murder or manslaughter, of "another". Thirdly, s 18(2)(b) the accomplice. The short point is that the murder "taken to have been committed" and "[e]very other punishable homicide" taken to be manslaughter to which s 18 refers require the killing by one person of another. Section 18 is not concerned with the circumstance of a person who kills himself or herself intentionally. Nor is it concerned with a person who kills himself or herself accidentally. It follows that the offence of murder is not committed where a person kills himself or herself in an attempt to commit, or during or immediately after the commission of, a relevant crime. Nor is the offence of manslaughter committed when a person kills himself or herself in some other way. Section 18 did not create such new offences. Nor could the section be engaged, and such offences created, by attributing to another person an act which caused a self-killing. Attribution Our conclusion that s 18(1) was not engaged by an act of the deceased lighting the ring burner is sufficient to allow the appeal. However, we record our agreement with the assumption of the parties that the usual rules of attribution in criminal law, sometimes described as "joint enterprise liability", apply. On the assumption (which was not in dispute on this appeal) that those rules apply to s 18(1), an act done by one participant in the course of effecting a common criminal purpose, which was incidental to that purpose, can be attributed to the other participant under s 18 of the Crimes Act47. This makes the act of the other participant an act for which the accused is personally responsible. In relation to murder, the attribution of an act causing personal responsibility for the other participant is, in summary terms, an "act of the accused" within the meaning of s 18(1)(a) although, plainly, attribution does not mean that the actual act is committed by the accused. 47 Johns v The Queen (1980) 143 CLR 108 at 130; [1980] HCA 3; McAuliffe v The Queen (1995) 183 CLR 108 at 114; [1995] HCA 37. Edelman In R v Surridge48, Jordan CJ explained, in the context of felony murder, that where the act to be attributed is an act in the course of a common criminal purpose: "[I]t is necessary, in order that the person who is an accomplice only may be guilty of murder, that it should have been within the common purpose of both that ... a crime [punishable by imprisonment for life or for 25 years] should be committed, and the cause of the death must have been something done by the other in an attempt to commit or during or immediately after the commission of that ... crime." It is not necessary on this appeal to speculate about the different circumstances in which acts might fall within (so as to attribute), or outside (so as not to allow attribution), the scope of something done during the commission, or immediately after the commission, of a crime. It suffices to illustrate this point with an example based on the circumstances of this case. On the assumption that the deceased lit the ring burner, that act would have been an act within the scope of the commission of a crime. If the deceased's act of lighting the ring burner had led to an explosion which killed a child standing outside the house then the appellant could have been charged under s 18(1) with felony murder for the death of the child. It was within the common purpose of both the appellant and the deceased that the crime of manufacture of a large commercial quantity of methylamphetamine (punishable by imprisonment for life) should be committed, and the cause of the child's death was an act done by the deceased during the commission of that crime. There should not be anything surprising in the notion of attributing the acts of one person to others with a common criminal purpose where the person's acts are in the course of, or incidental to, carrying out a common criminal purpose. The same principle applies in civil cases, where, apart from cases of employment or agency, "to constitute joint tortfeasors two or more persons must act in concert in committing the tort"49. The important point is that it is the acts which are attributed from one person (the actor) to another who shares the common purpose and, by attribution, becomes personally responsible for the acts. It is not the liability of the actor which is attributed. Nor is it the actus reus of some notional crime without a mental element that might be committed by the 48 (1942) 42 SR (NSW) 278 at 283. 49 Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574 at 580- 581; [1996] HCA 38. Edelman actor. These points were established in the decision of the majority of this Court in Osland. In Osland, Mrs Osland and her son David were tried for the murder of Mr Osland. The prosecution case was that the blows causing death were struck by David but that Mrs Osland acted in concert with him. The jury convicted Mrs Osland but were unable to reach a verdict in relation to David. One question on the appeal was whether those verdicts were inconsistent. The majority of the High Court (McHugh, Kirby and Callinan JJ) held that they were not. As McHugh J (with whom Kirby J50 and Callinan J51 agreed on this point) explained, the liability of persons as accessories before the fact to murder (ie persons not present at the commission of the crime) was a form of derivative liability52. So too was the liability derivative for persons who were "merely present, encouraging but not participating physically, or whose acts were not a substantial cause of death"53. But where two or more persons act in concert then any liability is primary. The acts of one are attributed to the others because they reached an understanding or arrangement that together they would commit a crime and the acts were performed in furtherance of that understanding or arrangement54. In Osland, McHugh J concluded that it was likely that the jury had found beyond reasonable doubt that Mrs Osland and David killed the deceased in accordance with a common understanding or arrangement but that one or more jurors were not satisfied that the Crown had negatived David's claim of justification based on self-defence. This meant that David's act was not proved to lack justification. It was not proved to be a criminal act. Nevertheless, the reason why the verdicts in Osland were not inconsistent was that it was David's acts which were attributed to Mrs Osland. David's acts did not need to be criminal acts. They did not even need to be wrongful. A critical passage of the reasoning of McHugh J was as follows55: 50 Osland (1998) 197 CLR 316 at 383 [174]. 51 Osland (1998) 197 CLR 316 at 413 [257]. 52 Osland (1998) 197 CLR 316 at 341-342 [71]. 53 Osland (1998) 197 CLR 316 at 342 [71] (footnotes omitted). 54 Osland (1998) 197 CLR 316 at 342-343 [72]-[73]. 55 Osland (1998) 197 CLR 316 at 347-348 [85]. Edelman "It is more accurate to describe the person, who escapes liability in a concert case where the other person is convicted, as a non-responsible ... agent. No doubt there are cases where the person who does the harm-causing act is innocent in a moral sense. For example, the accused may have induced a child of tender years to do the act which constitutes the actus reus of the crime56, or imported drugs via an airline carrier57. In that case, the agent is innocent of any wrong doing and the accused is regarded as a principal in the first degree. The acts of the innocent person are attributed to the accused who is guilty of the crime because the latter has the necessary mens rea. The fact that the innocent agent is not guilty of the crime is of no relevance." When McHugh J spoke of the child of tender years doing the act which "constitutes the actus reus of the crime" he was referring to the actus reus of the crime which was committed by the accused person, not some notional crime which might have been committed if the young child had been an adult. The same is true of the case which his Honour cited concerning the importation of drugs. Justice McHugh cited the decision in White v Ridley58 in the context of attribution based on acts in concert, although the rule of attribution in that case was that an agent's acts are attributable to a principal. However, the key point was that the acts were attributed although the airline agent was wholly innocent and committed no crime. As Gibbs J had said earlier, "it is well settled at common law that a person who commits a crime by the use of an innocent agent is himself liable as a principal offender"59. This conclusion is also consistent with the discussion by McHugh J of a proposition of a majority of the Full Court of the Supreme Court of Victoria in R v Demirian60. That case concerned a circumstance where a person accidentally killed himself by detonating a bomb in the course of commission of a crime with an accused accomplice. The accused was convicted of murder. That conviction was quashed by the Full Court. The proposition to which McHugh J referred was that even if the accused was present at the scene of the explosion and was acting in concert with the deceased, the accused could not have been convicted as a 56 Cf R v Manley (1844) 1 Cox CC 104. 57 White v Ridley (1978) 140 CLR 342; [1978] HCA 38. 58 (1978) 140 CLR 342. 59 White v Ridley (1978) 140 CLR 342 at 346. 60 [1989] VR 97 at 123-124. Edelman principal in the first degree (ie by attribution of acts). Justice McHugh said that on the facts of Demirian the proposition may be correct61. The accused would not be guilty of murder by attribution of the act of the deceased person. But McHugh J rejected62, as contrary to a long line of cases, the "general proposition" that those acting in concert at the scene of a crime were not principals in the first degree63. The conclusion that joint enterprise liability involves attributing only the acts of the participants who share a common purpose is consistent with the controversial64 English decisions in Bourne65, R v Austin66, and R v Cogan67. However, there is difficulty with some of the reasoning in those cases. The difficulty, not confined to the criminal law68, arises due to a failure to separate clearly a liability which is primary, and a liability which is derivative. Liability which is primary can involve attribution of the acts of another. But the liability remains personal to the accused. Liability which is derivative depends upon attribution to the accused of the liability of another. If the other is not liable then the accused cannot be liable. In Bourne, a husband was found guilty of aiding and abetting his wife to commit buggery with a dog. On appeal to the Court of Criminal Appeal it was submitted that the husband could not commit an offence as an aider and abetter unless his wife was also guilty of an offence. It was submitted that the wife would have had a defence of duress and therefore did not commit an offence. The Court of Criminal Appeal dismissed the appeal without calling on the 61 Osland (1998) 197 CLR 316 at 349 [91]. 62 Osland (1998) 197 CLR 316 at 349-350 [91]-[92]. 63 Demirian [1989] VR 97 at 124. 64 See Glanville Williams, "Secondary Parties to Non-Existent Crime", (1953) 16 Modern Law Review 359 at 384; Glanville Williams, "The Extension of Complicity", [1975] Cambridge Law Journal 182. 65 (1952) 36 Cr App R 125. 66 [1981] 1 All ER 374. 68 Pioneer Mortgage Services Pty Ltd v Columbus Capital Pty Ltd [2016] FCAFC 78 Edelman Crown. In brief reasons, the Court explained that even assuming that the wife had a defence of duress, the husband was liable as a principal in the second degree69. The difficulty with this reasoning is that, as McHugh J noted in Osland70, the liability of a principal in the second degree is derivative, not primary71. The husband's guilt as a principal in the second degree required the wife to be guilty. As Glanville Williams observed72: "The notion that, where the actus reus of felony is committed without mens rea, there is a felony for collateral purposes, is one without precedent in the long history of the criminal law." This conclusion does not mean that no offence was committed in Bourne. The husband could have been indicted as a principal on the basis, as explained by McHugh J in Osland73, that the husband and wife were involved in a joint criminal enterprise. The acts of the wife were attributed to the husband. It did not matter if the wife was not liable for any crime, because it was not the liability that was attributed. Nor did it matter that the husband could not physically have performed the precise act of buggery, because the notion of attribution of an act does not involve a fiction that the act was undertaken by the husband. In company law, for example, it is never said that acts cannot be attributed to a company merely because the company cannot physically perform the acts itself. "To say that a company cannot do something means only that there is no one whose doing of that act would, under the applicable rules of attribution, count as an act of the company"74. The same explanation applies to R v Austin75. In that case, the four appellants were convicted of assisting a father to take his child from the mother. 69 Bourne (1952) 36 Cr App R 125 at 129. 70 (1998) 197 CLR 316 at 342 [71]. 71 R v Tyler and Price (1838) 8 Car & P 616 at 618 [173 ER 643 at 644]. 72 Glanville Williams, "Secondary Parties to Non-Existent Crime", (1953) 16 Modern Law Review 359 at 384. 73 (1998) 197 CLR 316 at 347-348 [85]-[86]. 74 Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500 at 506. 75 [1981] 1 All ER 374. Edelman They had planned and executed the taking of the child by the father. The Court of Appeal held that although the father had committed the offence of "child stealing" using force to take away the child, he could have claimed "a right to possession of the child", which would have excused him from commission of the offence under a proviso to s 56 of the Offences against the Person Act 186176. The Court of Appeal upheld the conviction of the appellants for aiding and abetting the commission of the offence even though the father had committed no offence. In Osland77, McHugh J treated this case as one in which the appellants were principals in the first degree, that is, persons who were primarily liable for the forcible acts of "child stealing" committed by the father. On that basis, the father's excuse under the proviso was irrelevant. The decision in R v Cogan78 is also possibly explicable in these terms, although the reasoning in the case is again difficult to justify. In that case, Leak was charged with aiding and abetting Cogan to rape Leak's wife. The jury convicted Cogan of rape, and convicted Leak of aiding and abetting the rape. The jury also returned a special verdict that Cogan had believed that Leak's wife was consenting but had no reasonable grounds for that belief. Cogan's appeal against conviction was allowed and his conviction was quashed, based upon the decision of R v Morgan79. Leak appealed on the basis that he could not be guilty of aiding and abetting Cogan since Cogan's conviction had been quashed. The Court of Appeal upheld Leak's conviction, saying that it "would be an affront to justice and to the common sense of ordinary folk" if a person could not be convicted of aiding and abetting an offence "merely because the person alleged to have been aided and abetted was not or could not be convicted"80. As Gaudron and Gummow JJ observed in Osland81, the reasoning of the Court of Appeal in R v Cogan has been described as "demonstrably unsound" and "contrary to principle". It is, at least, difficult to understand how liability can 76 R v Austin [1981] 1 All ER 374 at 378. 77 (1998) 197 CLR 316 at 348 [87]. 80 R v Cogan [1976] QB 217 at 224, quoting R v Humphreys and Turner [1965] 3 All ER 689 at 692. 81 (1998) 197 CLR 316 at 326 [19] fn 42. Edelman be attributed for an offence which had not been proved. However, in Osland82, McHugh J referred to the obiter dictum of the Court of Appeal in R v Cogan83 where the Court suggested that Leak could have been indicted as a principal offender. The basis for such an indictment would be the attribution of the acts of Cogan, rather than Cogan's liability, based upon a joint criminal enterprise. The Court of Appeal dismissed an objection to this view on the basis of the "presumption", then current in England84, that a husband could not rape his wife. The Court of Appeal said that there "is no such presumption when a man procures a drunken friend to do the physical act for him"85. Whether or not this exception to the abhorrent fiction was correct, the obiter dictum rests upon the correct assumption that acts can be attributed even if the actor is not liable for any offence. In summary, the decision of the majority of this Court in Osland resolved much confusion that had existed in the context of the primary liability of an accused person based upon the attribution of acts done in the course of a joint criminal enterprise. That decision was, and continues to be, authority for the proposition that joint criminal liability involves the attribution of acts. The attribution of acts means that one person will be personally responsible for the acts of another. The decision in Osland does not involve attribution of liability for either the whole of a crime or part of a notional crime. Conclusion The appeal should be allowed and orders made as proposed by Bell and 82 (1998) 197 CLR 316 at 348 [87]. 83 [1976] QB 217 at 223. 84 R v Cogan [1976] QB 217 at 223, citing Hale, Pleas of the Crown, (1778), vol 1 at 629. Cf PGA v The Queen (2012) 245 CLR 355; [2012] HCA 21. 85 R v Cogan [1976] QB 217 at 223. Bell Nettle BELL AND NETTLE JJ. The appellant was tried in the Supreme Court of New South Wales on one count of manufacturing a large commercial quantity of a prohibited drug, namely 6.7 kilograms of methylamphetamine (Count 1); one count of murder (Count 2a); in the alternative, one count of unlawfully causing the death of Zhi Min Lan ("the deceased") (Count 2b); and four offences relating to the unlawful possession of firearms. The Crown alleged that the appellant committed the offence charged by Count 1 by participating with the deceased in a joint criminal enterprise to manufacture the methylamphetamine. In relation to Counts 2a and 2b, the Crown alleged that, although the evidence could not exclude the possibility that the deceased was killed accidently as a result of his own act, the appellant was guilty of his murder, or alternatively manslaughter, pursuant to s 18(1) of the Crimes Act 1900 (NSW) by reason that the act which caused the deceased's death was committed in the course of the joint criminal enterprise to manufacture the methylamphetamine, an offence punishable by imprisonment for life, and was therefore an act of the appellant as a participant in that enterprise. At the conclusion of the Crown case, the trial judge (Hamill J) directed the jury to acquit the appellant of Counts 2a and 2b. On appeal by the Crown pursuant to s 107(2) of the Crimes (Appeal and Review) Act 2001 (NSW), the Court of Criminal Appeal (Simpson JA, R A Hulme and Bellew JJ agreeing) held that the directed verdicts of acquittal should be quashed and that there should be a new trial on those counts. The question for decision in this appeal is whether the trial judge was correct to direct the jury to acquit the appellant of the counts of murder and manslaughter charged by Counts 2a and 2b. For the reasons which follow, the question should be answered affirmatively and the appeal should be allowed. Relevant statutory provisions To the extent that is relevant, ss 24 and 33 of the Drug Misuse and Trafficking Act 1985 (NSW) provide as follows: "24 Manufacture and production of prohibited drugs (2) A person who manufactures or produces, or who knowingly takes part in the manufacture or production of, an amount of a prohibited drug which is not less than the commercial quantity applicable to the prohibited drug is guilty of an offence. Bell Nettle Penalties for offences involving commercial quantities or cultivation for a commercial purpose (1) This section applies to the following offences: an offence under section 23(1A) or (2), 24(2) or 25(2) or (2A), (2) The penalty for an offence is: except as provided by paragraph (b), a fine of 3,500 penalty units or imprisonment for 20 years, or both, (3) Despite subsection (2), if the court is satisfied that the offence involved not less than the large commercial quantity of the prohibited plant or prohibited drug concerned, the penalty for the offence is: except as provided by paragraph (b), a fine of 5,000 penalty units or imprisonment for life, or both, or (b) where the offence relates to cannabis plant or cannabis leaf, a fine of 5,000 penalty units or imprisonment for 20 years, or both. In this section: large commercial quantity, in relation to a prohibited plant or prohibited drug, means the number or amount, if any, specified opposite the plant or drug in Column 5 of Schedule 1." Section 18 of the Crimes Act defines murder, including that known as constructive or "felony" murder, thus: "Murder and manslaughter defined (a) Murder shall be taken to have been committed where the act of the accused, or thing by him or her omitted to be done, causing the death charged, was done or omitted with reckless indifference to human life, or with intent to kill or Bell Nettle inflict grievous bodily harm upon some person, or done in an attempt to commit, or during or immediately after the commission, by the accused, or some accomplice with him or her, of a crime punishable by imprisonment for life or for 25 years. (b) Every other punishable homicide shall be taken to be manslaughter. (a) No act or omission which was not malicious, or for which the accused had lawful cause or excuse, shall be within this section. (b) No punishment or forfeiture shall be incurred by any person who kills another by misfortune only." The trial The evidence adduced at trial86 established that, on 4 January 2013, emergency services officers were called by a neighbour to attend a fire that had broken out in residential premises owned by the appellant in the Sydney suburb of Ryde. Upon the officers' arrival, the appellant attempted to block their entry into the premises. After gaining entry, the officers treated the deceased and the appellant for injuries suffered in the fire. The deceased's injuries were severe and he died in hospital on 14 January 2013 without regaining consciousness. Police found that a process of evaporation and purification had been set up at the premises to allow for the refinement of raw methylamphetamine which had been manufactured at another location. It appeared to be a serious commercial venture. The bathroom was equipped with a gas burner, liquid petroleum gas bottle and large cooking pot. The kitchen was equipped to be used in the same way. Various quantities of methylamphetamine, totalling more than six kilograms, were found in differing degrees of purity, indicating that the process of refinement had been ongoing. There were also funnels, sieves, buckets, latex gloves, thermometers, a vacuum flask and pump, and other equipment which converted the bathroom into an "ad hoc meth lab", as well as evidence, in the form of empty tins and bottles, that more than 70 litres of acetone had been kept at the premises. This equipment and evidence suggested that the premises were used for the singular purpose of refining methylamphetamine. 86 See R v IL (No 2) [2014] NSWSC 1710 at [54]-[74]; R v IL (No 4) [2014] NSWSC Bell Nettle On further searches of the premises, police found three pistols, a prohibited weapon and cash in the sum of $328,000, in circumstances indicating that the cash belonged to the deceased. Police also discovered a sum of $16,900 in cash and 15 grams of methylamphetamine in the appellant's locked bedroom in her home in Hurstville. From those facts and circumstances, it was concluded that the appellant was paid for her involvement in the manufacture of methylamphetamine at the Ryde premises. The process of refining the methylamphetamine involved dissolving a solute (containing raw methylamphetamine) in a solvent (acetone) over a low heat. Acetone is flammable and, when heated, the liquid generates flammable vapours. Once the concentration of flammable vapours reaches a certain level, the vapours may explode if exposed to a source of ignition. A spark from an electrical appliance or a naked flame can operate as a source of ignition. An ardent concentration of vapours is likely to be reached more quickly when the evaporation process is undertaken in a confined space. The Crown case on Count 1, relating to the manufacture of the methylamphetamine, was based on evidence of the appellant's ownership of the Ryde premises; her purchase of eight litres of acetone from a hardware store on 1 January 2013; her presence at the premises at the time of the fire; and what was said to be a consciousness of guilt demonstrated by her trying to bar entry by emergency services officers to the premises. The appellant also gave evidence that she had taken two gas bottles, similar to the ones found in the bathroom, to a service station and filled that she had stirred a pot of methylamphetamine in the kitchen early in the morning of 4 January 2013. The Crown contended that, because of the amount of items associated with the manufacture of drugs located at the premises, anyone who entered the premises would have appreciated that they were being used for the manufacture of drugs and, for that reason, the appellant must have understood that the premises were being used for that purpose. This evidence was said to establish, at least, that the appellant was involved in the manufacture of methylamphetamine by permitting it to occur at premises she owned. them, and The Crown case on Counts 2a and 2b, murder and manslaughter respectively, was that the fire, and thus the deceased's death, was caused by the lighting of the gas ring burner in the small and inadequately ventilated bathroom in circumstances which created an objectively appreciable risk of serious injury. The Crown did not allege, however, and could not prove, that it was the appellant who lit the gas ring burner. The Crown argued instead that, because the appellant was a participant with the deceased in a joint criminal enterprise to manufacture a large commercial quantity of methylamphetamine – being an offence punishable by life imprisonment – the appellant was criminally liable, for the purposes of s 18(1) of the Crimes Act, for all acts committed in the course of carrying out that enterprise. It followed in the Crown's contention that, although Bell Nettle it could have been the deceased who lit the gas ring burner, the appellant was criminally liable for the consequence of it having been so lit and thus for the deceased's death. At the close of the Crown case, the appellant moved for directed verdicts of not guilty in respect of Counts 2a and 2b. For reasons which the trial judge published on 2 December 2014, his Honour acceded to that application and so directed to conclusion on the 9 December 2014 when the jury brought in verdicts of guilty on each of the remaining counts. trial continued Thereafter, jury. the The trial judge's reasons for the directed verdicts The trial judge considered87 that there was a flaw in the Crown's argument arising from a misunderstanding of the true effect of the doctrine of common purpose. As his Honour observed, in McAuliffe v The Queen this Court explained88 that if one or other of the parties to an understanding or arrangement comprising a joint criminal enterprise to commit a crime does, or they do between them, in accordance with the continuing understanding or arrangement, all those things which are necessary to constitute the crime, they are all equally guilty of the crime regardless of the part played by each participant in its commission. The trial judge was persuaded by a submission of the appellant's counsel that any criminal liability that the appellant may have had for the death of the deceased according to the doctrine of common purpose would be "derivative" and, since the deceased had not committed a crime by killing himself, the appellant could not be convicted of murder or manslaughter as a principal in the second degree89. As his Honour explained: "Properly analysed, if the [appellant] is liable for murder, she is liable as a principal in the second degree. ... The deceased could not be convicted of his own murder. The offence of suicide was long ago abolished and [in any event] there is no evidence capable of establishing that he acted with the requisite specific intent." 87 IL (No 2) [2014] NSWSC 1710 at [79]. 88 (1995) 183 CLR 108 at 114; [1995] HCA 37. 89 IL (No 2) [2014] NSWSC 1710 at [82]. Bell Nettle Thus, the trial judge concluded90: "I do not accept that the combination of principles of common purpose and constructive murder work together to make [the appellant] liable to conviction for murder in the circumstances of the present case. Whether the situation may be different where the deceased person was not the one who committed the act or where the death was of an innocent victim is not necessary to decide in the circumstances of this case." His Honour further concluded91 that there was insufficient evidence to support a verdict of guilty in relation to the alternative charge of manslaughter. Proceedings in the Court of Criminal Appeal In the Court of Criminal Appeal, Simpson JA, with whom R A Hulme and Bellew JJ agreed, held92 that the trial judge erred in treating the liability of a passive participant for acts committed by a co-participant in the course of a joint criminal enterprise as derivative, and by focussing on whether the deceased's death was within the scope of the joint criminal enterprise or contemplated by the participants. Her Honour stated that93: "The correct question is whether the ignition of the ring burner was within that scope [of the enterprise] or contemplation; if it was, both participants were responsible for it, and liable for its consequences." It followed, her Honour held94, that the trial judge was incorrect to direct a verdict of acquittal on the count of murder and, because the lighting of the gas ring burner was an unlawful and dangerous act for which the appellant was criminally liable, the trial judge was also incorrect to direct a verdict of acquittal on the count of manslaughter. 90 IL (No 2) [2014] NSWSC 1710 at [85]. 91 IL (No 2) [2014] NSWSC 1710 at [99]. 92 R v IL [2016] NSWCCA 51 at [40], [60], [63]-[64], [70]. 93 IL [2016] NSWCCA 51 at [63]. 94 IL [2016] NSWCCA 51 at [65], [66]-[68], [71]. Bell Nettle Constructive murder Section 18 of the Crimes Act is poorly drafted and, for that reason, difficult to construe. It assists, however, to break down the provision into its constituent parts. For present purposes, the relevant part of s 18(1)(a) is that which defines constructive murder as having been committed by an accused "where the act of the accused ... causing the death charged, was done ... during ... the commission, by the accused, or some accomplice with him or her, of a crime punishable by imprisonment for life or for 25 years". There are two points to note about that definition. First, unlike the common law felony murder rule from which the definition of constructive murder derives, and unlike most statutory formulations enacted in other States95, the act which causes the death charged need not be an act of violence. It is sufficient, for the purpose of s 18(1)(a), that the act causing death be done during the commission of a crime punishable by imprisonment for life or 25 years96. Secondly, although the natural and ordinary meaning of the terms of s 18 is that the act which causes the death charged must be "the act of the accused" (even though the crime punishable by imprisonment for life or 25 years' imprisonment, during which the act causing death was done, may be committed either by the accused or by some accomplice with the accused), it has long been held that, upon its proper construction, s 18 relevantly imports common law rules of complicity. Thus, an accused may be found guilty of murder even if he or she did not commit the act which caused the death charged provided the act was committed by an accomplice of the accused in the course of carrying out a joint 95 See and compare Criminal Code (Q), s 302; Criminal Law Consolidation Act 1935 (SA), s 12A; Criminal Code (Tas), s 157; Crimes Act 1958 (Vic), s 3A; Criminal Code (WA), s 279. 96 See Ryan v The Queen (1967) 121 CLR 205 at 221 per Barwick CJ, 240-241 per Windeyer J; [1967] HCA 2; R v Jacobs (2004) 151 A Crim R 452 at 489 [207] per Wood CJ at CL (Sperling J and Kirby J agreeing at 514 [349], 515 [355]); New South Wales Law Reform Commission, Complicity, Report 129, (2010) at 158 [5.75], 160 [5.81]-[5.82]; Button and Babb, "Some Aspects of Constructive Murder in New South Wales", (2007) 31 Criminal Law Journal 234 at 243. For reasons which will later appear, it is unnecessary to consider whether the Crown must also establish foresight of the act causing death. See R v Sharah (1992) 30 NSWLR 292 at 297 per Carruthers J (Gleeson CJ and Smart J agreeing at 293, 306); cf Batcheldor v The Queen (2014) 249 A Crim R 461 at 475 [79] per Hidden J (Bathurst CJ agreeing at 463 [1]), 483-485 [128]-[132] per R A Hulme J (Bathurst CJ agreeing at 463 [2]). Bell Nettle criminal enterprise to which both were parties97. In the result, it is the common law doctrine of joint criminal enterprise liability which is determinative of the outcome of this appeal. Joint criminal enterprise liability At its base, the common law doctrine of joint criminal enterprise liability, or "common purpose" or "concert" as it may equally be called98, is that99: "if two or more persons reach an understanding or arrangement that together they will commit a crime and then, while that understanding or arrangement is still on foot and has not been called off, they are both present at the scene of the crime and one or other of them does, or they do between them, in accordance with their understanding or arrangement, all the things that are necessary to constitute the crime, they are all equally guilty of that crime regardless of what part each played in its commission. In such cases they are said to have been acting in concert in committing the crime." (emphasis added) The doctrine also has a further dimension which extends to any other crime committed by a party to the understanding or arrangement in the course of carrying out the understanding or arrangement if that other crime is within the scope of the understanding or arrangement. Thus, as was explained by Stephen J in Johns v The Queen100: "The criminal responsibility here under discussion is not that relating to the crime which is the prime object of a criminal venture. As to that crime, one who, while not actually physically present and participating in its commission, nevertheless knows what is contemplated, and both approves of it and in some way encourages it thereby becomes 97 See R v Grand and Jones (1903) 3 SR (NSW) 216 at 223-224; R v Surridge (1942) 42 SR (NSW) 278 at 282-283; Jacobs (2004) 151 A Crim R 452 at 488 [199]-[205] per Wood CJ at CL (Sperling J and Kirby J agreeing at 514 [349], 515 [355]). 98 McAuliffe (1995) 183 CLR 108 at 113; Gillard v The Queen (2003) 219 CLR 1 at 35-36 [109]-[110] per Hayne J (Gummow J agreeing at 15 [31]); [2003] HCA 64. 99 R v Lowery and King (No 2) [1972] VR 560 at 560, adopted by McHugh J in Osland v The Queen (1998) 197 CLR 316 at 342-343 [72]-[73] (Kirby J and Callinan J agreeing at 383 [174], 413 [257]); [1998] HCA 75. 100 (1980) 143 CLR 108 at 118; [1980] HCA 3. See also at 125 per Mason, Murphy Bell Nettle an accessory before the fact ... His knowledge, coupled with his actions, involves him in complicity in that crime. But if, in carrying out that contemplated crime, another crime is committed there arises the question of the complicity of those not directly engaged in its commission. The concept of common purpose provides the measure of complicity, the scope of that common purpose determining whether the accessory before the fact to the original crime is also to share in complicity in the other crime. If the scope of the purpose common both to the principal offender and to the accessory is found to include the other crime, the accessory will be fixed with criminal responsibility for it." called "extended common purpose" or There is then also a third dimension of joint criminal enterprise "extended liability  usually concert"  which was considered by this Court in McAuliffe101 and more recently in Miller v The Queen102, which extends to crimes that, although not within the scope of the understanding or arrangement, are foreseen as possibly being committed in the course of carrying out the understanding or arrangement, and are then committed by one of the participants when carrying out the understanding or arrangement. The doctrine of extended common purpose is not in issue in this appeal103 and, for present purposes, need not be considered further. Nonetheless, it should be observed that the doctrine of common purpose and the doctrine of extended common purpose are at one in attributing criminal liability to one participant for a crime committed by another participant in the course of carrying out their joint criminal enterprise. In this matter, it is apparent that the Court of Criminal Appeal proceeded on the basis that the doctrine of joint criminal enterprise liability renders an accused liable for all acts within the scope of the enterprise committed by a co-participant in the course of carrying out the enterprise, whether or not those acts amount to a crime. Hence, as Simpson JA reasoned104: "The Crown case on murder was that [the deceased's] death was caused by an act of the [appellant], in the course of the commission, or attempted commission, of an offence of manufacturing a large commercial quantity of methylamphetamine. However, as has been noted above, because the 101 (1995) 183 CLR 108 at 117-118. 102 (2016) 90 ALJR 918 at 921 [4] per French CJ, Kiefel, Bell, Nettle and Gordon JJ; 334 ALR 1 at 4; [2016] HCA 30. 103 See IL (No 2) [2014] NSWSC 1710 at [81]. 104 IL [2016] NSWCCA 51 at [26]-[27], [39]. Bell Nettle Crown was unable to nominate any act or event that caused the ignition of the ring burner, it was unable to nominate any specific act of the [appellant] that caused [the deceased's] death. The Crown therefore relied upon principles of law relating to joint criminal enterprise, particularly those with respect to fixing one participant with criminal liability for the acts (or omissions), within the scope of their agreement, of another participant, or other participants. ... It was, thus, the Crown case that, because the [appellant] and [the deceased] were engaged in a joint criminal enterprise, the [appellant] was equally responsible for the act of ignition whichever of the two actually did it; that, in effect, if it were [the deceased's] act that caused the ignition of the ring burner that act was, on the principles stated in Johns and McAuliffe, the [appellant's] act. Since the [appellant] was thus responsible for the act causing death, and it was an act done in the course of the commission of an offence punishable by imprisonment for life, the [appellant] was guilty of the murder of [the deceased]. There was no real dispute that the Crown could make out a case that the [appellant] and [the deceased] were engaged in a joint criminal enterprise to manufacture a large commercial quantity of a prohibited drug. There could have been no real dispute that each bore criminal liability for all of the acts of the other that were within the scope of that joint criminal enterprise, or were contemplated by it. Plainly, the act of lighting the ring burner was such an act. Whichever of the [appellant] and [the deceased] did that act, the other was equally liable for it." (emphasis added) With respect, however, that is not so. Although it is not infrequently, and in a sense not inaccurately, stated in the authorities that a participant in a joint criminal enterprise is criminally liable for acts committed by a co-participant in the course of carrying out the enterprise, a careful examination of those authorities shows that such references are invariably to acts that are identified, expressly or by necessary implication, as comprising the actus reus of a crime. And logically it could not be otherwise, given, as has been seen, that the essence of joint criminal enterprise liability is that two or more participants in a joint criminal enterprise who between them do all the things that are necessary to constitute a crime are equally liable for the acts which constitute the actus reus of that crime105. Thus, by definition, joint criminal enterprise liability is limited to 105 Osland (1998) 197 CLR 316 at 342-343 [72]-[73] per McHugh J (Kirby J and Callinan J agreeing at 383 [174], 413 [257]). See also at 331 [33] per Gaudron and (Footnote continues on next page) Bell Nettle participation in acts constituting the actus reus of a crime and has nothing to say about liability for acts which are not the actus reus of a crime or are incapable of constituting the actus reus of a crime. Of course, that does not mean that the liability of one participant for the actus reus of a crime committed by another participant in the course of carrying out their joint criminal enterprise is derivative of the other participant's liability for committing the act constituting the offence106. As was established in Osland v The Queen107, the liability of each participant in a joint criminal enterprise for acts committed in the course of the enterprise is direct, primary liability. Rather, the foregoing observations emphasise that the purpose of the doctrine of joint criminal enterprise liability in this respect is, and is only, to attribute liability for crimes incidental to the enterprise108. For that reason, it is not open under the doctrine of joint criminal enterprise liability to attribute criminal liability to one participant in a joint criminal enterprise for an act committed by another participant in the course of carrying out the enterprise unless the act is or is part of the actus reus of a crime. By way of illustration of the point, if two persons enter into an arrangement to commit an armed robbery of a bank with a dangerous weapon109, and pursuant to that arrangement one participant in the enterprise is to wait in a car keeping a lookout while the co-participant goes directly across a busy street to the bank to effect the robbery, and, in crossing the street, the latter participant walks in front of a bus and is killed, although the act of walking across the street was done in furtherance of the joint criminal enterprise, the participant who waited in the car is not guilty of the murder or manslaughter of the co-participant: the act of the co-participant in walking across the street was not the, or part of the, actus reus of the crime of murder or manslaughter. Gummow JJ; Huynh v The Queen (2013) 87 ALJR 434 at 442 [37]; 295 ALR 624 at 633; [2013] HCA 6. 106 See, for example, R v Austin [1981] 1 All ER 374. 107 (1998) 197 CLR 316 at 329 [27] per Gaudron and Gummow JJ, 342 [72], 346 [81] per McHugh J, 383 [174] per Kirby J, 402 [217] per Callinan J. See also Handlen v The Queen (2011) 245 CLR 282 at 287 [4] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ; [2011] HCA 51. 108 Johns (1980) 143 CLR 108 at 125 per Mason, Murphy and Wilson JJ. 109 Crimes Act, s 97(2). Bell Nettle Equally, if two persons enter into an arrangement to break into a dwelling with a dangerous weapon with an intent to commit a serious indictable offence110, and one participant in the enterprise falls from the roof while attempting to gain entry to the dwelling via a second-storey window and is killed, although the act of attempting to access the dwelling was done in furtherance of the joint criminal enterprise, the other participant is not guilty of the murder or manslaughter of the co-participant: the act of climbing on the roof did not amount to the actus reus of the crime of murder or manslaughter. Again, if two persons enter into an arrangement to cultivate a large commercial quantity of opium plants111 and one participant in the enterprise is killed as a result of some mechanical failure of the tractor used to cultivate the opium crop, the other participant is not guilty of the murder or manslaughter of the co-participant: the use of the tractor was not the actus reus of the crime of murder or manslaughter. Despite that being so, before this Court, the Crown invoked passages from the reasons for judgment of Street CJ in Johns in the New South Wales Court of Criminal Appeal112, and from the judgments of Barwick CJ and Mason, Murphy and Wilson JJ in Johns in this Court113, as establishing that the doctrine of joint criminal enterprise liability does impose "liability for acts and not liability for crimes". It was also contended that the judgment of McHugh J in Osland makes clear that the doctrine of joint criminal enterprise liability renders participants in a joint criminal enterprise liable for all acts within the scope of the enterprise that are committed in the course of carrying out the enterprise regardless of whether the acts constitute the actus reus or part of the actus reus of a crime. So to construe those judgments misunderstands the essential effect of them. In the passage from the judgment of Street CJ in Johns to which the Crown referred, his Honour stated114: "A principal in the second degree may be held liable pursuant to the doctrine of common purpose, if the particular actus reus, whilst differing 110 Crimes Act, ss 109(3), 112(3). 111 Drug Misuse and Trafficking Act, ss 23(2), 33(3)(a). 112 R v Johns [1978] 1 NSWLR 282 at 285-286. 113 (1980) 143 CLR 108 at 112-113 per Barwick CJ, 125-126, 130 per Mason, Murphy 114 [1978] 1 NSWLR 282 at 285-286. Bell Nettle from that directly and specifically intended by the principals, was nevertheless one that the jury regard as within the contemplation of the parties as an act which might be done in the course of carrying out their primary criminal intention. This can be described, alternatively, as an act contemplated by the principals as a possible incident of the particular venture upon which they embarked". (emphasis added) It is true that Barwick CJ in this Court spoke in terms of acts, as opposed to acts comprising the actus reus of a crime. In the passage relied upon by the Crown in this appeal, his Honour stated115: "The participants in a common design are liable for all acts done by any of them in the execution of the design which can be held fairly to fall within the ambit of the common design." But it needs to be understood that this passage follows immediately after Barwick CJ's approval of the judgment of this Court in Brennan v The King116, which speaks unmistakably in terms of participants in a joint criminal enterprise being liable for an offence or unlawful act committed in the course of carrying out the venture117. It is, therefore, necessarily implicit in Barwick CJ's subsequent reference to "all acts" that such acts are limited to those which comprise an offence. The relevant passage from the judgment of Mason, Murphy and Wilson JJ in Johns also makes clear that the doctrine of joint criminal enterprise liability is concerned with acts by which a crime is committed118: "The object of the doctrine is to fix with complicity for the crime committed by the perpetrator those persons who encouraged, aided or assisted him, whether they be accessories or principals. Broadly speaking, the doctrine looks to the scope of the common purpose or design as the gravamen of complicity and criminal liability." In Osland, it was not in issue that Mrs Osland and her son David had agreed to kill Mr Frank Osland, nor that Frank Osland had been killed pursuant to that agreement. In each case the issue was whether self-defence and 115 Johns (1980) 143 CLR 108 at 113. 116 (1936) 55 CLR 253; [1936] HCA 24. 117 (1936) 55 CLR 253 at 259-260 per Starke J, 263 per Dixon and Evatt JJ. 118 (1980) 143 CLR 108 at 125. Bell Nettle provocation had been negatived. The jury convicted Mrs Osland but were unable to agree on whether David should be acquitted on the ground of self-defence. Mrs Osland appealed against conviction on the ground inter alia of inconsistency of verdicts. It was held that there was no inconsistency: David's acts in delivering the fatal blows were consistent with him having acted in self-defence and in accordance with the agreement with his mother, whereas Mrs Osland was not acting in self-defence. As McHugh J explained119, the liability of each party to a joint criminal enterprise for crimes committed in the course of that enterprise is direct or primary liability, not derivative or secondary liability: "they are all equally liable for the acts that constitute the actus reus of the crime"120 (emphasis added). Hence, although a participant whose act causes death may have a defence to the homicide, the other participant in the joint criminal enterprise cannot escape liability121. David's acts which constituted the actus reus of the unlawful homicide charged against Mrs Osland were acts for which she was responsible and, unlike her son, she could not call in aid a legal justification for their commission. Admittedly, at one point in McHugh J's reasoning, his Honour stated that "it is the acts, and not the crime, of the actual perpetrator which are attributed to the person acting in concert"122. But, immediately after that statement, his Honour reiterated: "If the latter person has the relevant mens rea, he or she is guilty of the principal offence because the actus reus is attributed to him or her by reason of the agreement and presence at the scene. It is irrelevant that the actual perpetrator cannot be convicted of that crime because he or she has a defence such as lack of mens rea, self-defence, provocation, duress or insanity." (emphasis added) The point was further emphasised later in his Honour's reasons in observations concerning the decision of the Full Court of the Supreme Court of Victoria in R v Demirian123. In that case, the accused had entered into an arrangement with an accomplice to place and detonate a bomb so as to destroy a 119 Osland (1998) 197 CLR 316 at 345-346 [79]-[81] (Kirby J and Callinan J agreeing at 383 [174], 413 [257]). See also at 329-330 [27] per Gaudron and Gummow JJ. 120 Osland (1998) 197 CLR 316 at 343 [73] per McHugh J (Kirby J and Callinan J agreeing at 383 [174], 413 [257]). 121 Cf R v Demirian [1989] VR 97 at 105-107, 116 per McGarvie and O'Bryan JJ. 122 Osland (1998) 197 CLR 316 at 344 [75] (Kirby J and Callinan J agreeing at 383 123 [1989] VR 97 (in which the Crown did not rely upon constructive murder). Bell Nettle building, but, in the course of carrying out the arrangement, the accomplice had accidentally detonated the bomb, thereby killing himself. On those facts, a majority of the Full Court held that the accused could not be convicted as a principal in the first degree in respect of the accomplice's murder, because, although acting in concert with the accomplice and, subject to proof by the prosecution, present at the scene when the accomplice detonated the bomb, the accused himself did not detonate the bomb124. Their Honours took the law to be that parties acting in concert to commit a crime who were present when the crime was committed were not liable as principals unless they actually committed the act or one of the acts that constituted the actus reus of the crime; they were liable otherwise only as accessories. As was later demonstrated in Osland, however, that was not so. As McHugh J stated125: "Counsel for the appellant relied on R v Demirian where a majority of the Full Court of the Supreme Court of Victoria said that, even if it could have been established that the accused in that case was present at the scene of a bomb explosion and was acting in concert with the person who exploded the bomb, the accused could not have been convicted as a principal in the first degree. Upon the facts of that case, the statement may be correct. However, it is plain that their Honours were seeking to lay down a general proposition. In my opinion it is not an accurate statement of the modern law." (emphasis added; footnote omitted) His Honour continued126: "Where the parties are acting as the result of an arrangement or understanding, there is nothing contrary to the objects of the criminal law in making the parties liable for each other's acts and the case for doing so is even stronger when they are at the scene together. If any of those acting in concert but not being the actual perpetrator has the relevant mens rea, it does not seem wrong in principle or as a matter of policy to hold that person liable as a principal in the first degree. Once the parties have agreed to do the acts which constitute the actus reus of the offence and are present acting in concert when the acts are committed, the criminal liability of each should depend upon the existence or non-existence of mens rea or upon their having a lawful justification for the acts, not upon 124 Demirian [1989] VR 97 at 123-125 per McGarvie and O'Bryan JJ. 125 Osland (1998) 197 CLR 316 at 349 [91] (Kirby J and Callinan J agreeing at 383 126 Osland (1998) 197 CLR 316 at 350 [93] (Kirby J and Callinan J agreeing at 383 Bell Nettle the criminal liability of the actual perpetrator. So even if the actual perpetrator of the acts is acquitted, there is no reason in principle why others acting in concert cannot be convicted of the principal offence. They are responsible for the acts (because they have agreed to them being done) and they have the mens rea which is necessary to complete the commission of the crime." (emphasis added) As each of those passages of McHugh J's judgment affirms, in order to engage the doctrine of joint criminal enterprise liability, the participants in the joint criminal enterprise must do between them all things necessary to constitute the crime; and so, in order to render a participant in a joint criminal enterprise criminally liable for an act of homicide committed by a co-participant in the course of the enterprise, the act causing death must constitute the actus reus of a crime involving the unlawful killing of the deceased. Evidently, that is why McHugh J observed that, apart from principle, upon the facts of Demirian it was possible that the accused could not have been convicted as a principal in the murder of the accomplice. At the time of Demirian127, the crime of suicide had been abolished in Victoria and so the accomplice's act of killing himself was not the actus reus of a crime. The actus reus of the crime for which the appellant was liable In this case, it was accepted that the Crown could not negative the reasonable possibility that it was the deceased who lit the gas ring burner which sparked the fire that caused his death. It followed that the Crown could not exclude as a reasonable possibility that the deceased had killed himself by his own act. And, as the trial judge observed in the course of his ruling on the directed verdicts, it is no longer an offence to kill oneself in the State of New South Wales128. As was earlier noted, the trial judge reasoned129 that the liability of a participant in a joint criminal enterprise for an offence committed by another participant in the course of the enterprise is secondary or derivative liability, and therefore, because the deceased committed no crime in killing himself, the appellant could not be held liable for the killing. And as Simpson JA observed in the Court of Criminal Appeal, that process of reasoning was erroneous because the liability of a participant in a joint criminal enterprise for a crime committed by another participant in the course of that enterprise is direct or primary 127 [1989] VR 97 at 131 per Tadgell J. See also at 107-108 per McGarvie and 128 IL (No 2) [2014] NSWSC 1710 at [82]; Crimes Act, s 31A. 129 IL (No 2) [2014] NSWSC 1710 at [83]. Bell Nettle liability130. But, although the trial judge's process of reasoning was incorrect in that respect, his Honour's conclusion was correct. To explain why that is so it is necessary to digress. life but also the doing of a At common law, murder included self-murder, or suicide as it is now more often called, and self-murder included not only the intentional taking of one's own felonious act which unintentionally caused one's own death. Thus, in R v Russell131, it was held by a majority of the Court for Crown Cases Reserved that the act of a woman in taking arsenic to procure her own miscarriage and thereby killing herself, though that self-killing was not her intention, was felo de se or self-murder. The decision in Russell was later doubted132. The argument in Russell133 had relied upon the ancient common law conception of implied malice aforethought that, if an act were malum in se, it was no excuse that the actor did not intend all its consequences. That was at odds with subsequent 19th century developments that confined the common law felony murder rule so that an act causing death committed in the course of a felony was not considered murder unless the act involved violence or danger to some person134 and early 20th century cases, also involving illegal abortion procedures, in which it was held that it was not murder to cause a woman's death in the course of procuring her miscarriage if the act were done with her consent and without it being considered that the act would, or would likely, cause her death135. But the authority of 130 IL [2016] NSWCCA 51 at [70]. 131 (1832) 1 Mood 356 at 367 [168 ER 1302 at 1306]. 132 See R v Fretwell (1862) Le & Ca 161 at 162 [169 ER 1345 at 1346]. 133 (1832) 1 Mood 356 at 365-366 [168 ER 1302 at 1306]. 134 See Ryan (1967) 121 CLR 205 at 240-241 per Windeyer J; R v Brown and Brian [1949] VLR 177 at 181-182 per Lowe and Martin JJ (Barry J agreeing at 182). See also Director of Public Prosecutions v Beard [1920] AC 479 at 493 per Lord Birkenhead LC, with whom Lord Buckmaster agreed (Earl of Reading LCJ, Viscount Haldane, Lord Dunedin, Lord Atkinson, Lord Sumner and Lord Phillimore agreeing at 507-508); Daniel v State of Trinidad and Tobago [2014] AC 1290 at 1309-1310 [36]. 135 R v Whitmarsh (1898) 62 JP 711 at 712; R v Bottomley (1903) 115 LT 88; R v Lumley (1911) 22 Cox CC 635; R v Stone (1937) 53 TLR 1046 at 1047. See also Brown and Brian [1949] VR 177; R v Ryan and Walker [1966] VR 553 at 563-564; R v Van Beelen (1973) 4 SASR 353 at 403. Bell Nettle Russell was followed136 and there is no reason to doubt that it formed part of the common law in New South Wales. To a large extent, the common law of murder was replaced in New South Wales by s 9 of the Criminal Law Amendment Act 1883 (NSW), the legislative forebear of s 18(1) of the Crimes Act. Like s 18(1), s 9 defined murder by reference to various categories of acts causing death which at common law gave rise to murder. In its terms it did not include acts of self- murder but nor did it abrogate common law rules to which it was not specifically directed137. Hence, it is arguable that the common law rule that it was murder to kill oneself intentionally, or unintentionally by an act committed in the course or furtherance of a felony, continued to apply in New South Wales138, with provision for attempted suicide to be dealt with summarily139, until the rule was abrogated by the enactment of s 31A of the Crimes Act in 1983140. Certainly from that point, however, suicide or self-murder ceased to be a crime in New South Wales; and self-manslaughter was never a crime, even at common law141. Accordingly, assuming it were the deceased's act of lighting the gas ring burner which caused the deceased's death, that act was not the actus reus of a crime of murder or manslaughter; or, to put it another way, the deceased and the appellant did not do between them all the things necessary to constitute a crime of murder or manslaughter. It follows that the appellant could not properly be considered liable for the deceased's death pursuant to the doctrine of joint criminal enterprise liability. It would have been a very different case, however, if a third party had been killed. The Crown contended in the course of argument before this Court that, according to the doctrine of joint criminal enterprise liability, each participant in 136 See R v Croft [1944] KB 295. See also Demirian [1989] VR 97 at 131 per 137 Jacobs (2004) 151 A Crim R 452 at 488 [200] per Wood CJ at CL (Sperling J and Kirby J agreeing at 514 [349], 515 [355]). 138 Barry, "Suicide and the Law", (1965) 5 Melbourne University Law Review 1 at 8. 139 See Criminal Law and Evidence Amendment Act 1891 (NSW), s 18; Crimes Act, ss 476 and 477 (before the repeal of s 477 in 1974: Crimes and Other Acts (Amendment) Act 1974 (NSW), s 11). 140 Crimes (Mental Disorder) Amendment Act 1983 (NSW), Sched 1, Item 2. 141 See Stephen, A History of the Criminal Law of England, (1883), vol 3 at 104; Kenny, Outlines of Criminal Law, 14th ed (1933) at 113; Williams, Criminal Law: The General Part, 2nd ed (1961) at 126-127 §46, 393 §131. Bell Nettle a joint criminal enterprise is considered to be the agent of each other participant for the purpose of committing acts within the scope of the understanding or arrangement, and consequently that, although it is to be assumed that the deceased may have lit the gas ring burner which caused his death, by operation of the doctrine the appellant is to be taken to have done that act herself through the agency of the deceased. It followed, it was contended, that the act of lighting the gas ring burner which caused the deceased's death was a crime because it was an act done, or which must be taken to have been done, by the appellant in the course of manufacturing the methylamphetamine, and so was an act causing death to which s 18(1) of the Crimes Act applied. That contention should be rejected. It confuses liability for an act committed by an agent with the doing of the act itself. Agency attributes legal responsibility for an act done by an agent, within the scope of his or her authority, to the agent's principal. It does not in a physical sense transmogrify the act done by the agent into an act done by the principal. For that reason, where in the criminal law it is recognised that an accused may commit an offence by a "non-responsible" (or partially responsible) agent142, the act of the agent remains in fact the act of the agent. It is the act of the agent, as was committed by the agent, and not such an act as if it had been committed by the principal, that is to be assessed to determine whether the act comprised the actus reus of an offence. As has been observed by Professor Gillies143: "The courts have never pretended that the defendant incriminated pursuant to [the doctrine of innocent agency] has personally perpetrated the criminal act ... Rather, it is the offender's classification as a constructive principal which has represented the enduring element of fiction in the doctrine." The point may be illustrated by reference to three of the authorities mentioned by McHugh J in Osland in his Honour's consideration of the law relating to criminal offending by means of an innocent agent. In the first of those cases, Bourne144, a husband was found guilty of bestiality as a principal in the 142 See R v Michael (1840) 9 Car & P 356 [173 ER 867]; Osland (1998) 197 CLR 316 at 347-349 [85]-[88] per McHugh J (Kirby J and Callinan J agreeing at 383 [174], 143 Gillies, The Law of Criminal Complicity, (1980) at 141. See and compare Smith and Hogan, Criminal Law, 6th ed (1988) at 131-132; Fisse, Howard's Criminal Law, 5th ed (1990) at 325. 144 (1952) 36 Cr App R 125. See also Matusevich v The Queen (1977) 137 CLR 633 at 638 per Gibbs J (Stephen J agreeing at 639); [1977] HCA 30. Bell Nettle second degree on the basis that he compelled his wife to have sexual intercourse per vaginam with a dog. The wife was not charged with an offence, and it was assumed that, if she had been charged, she would have been entitled to an acquittal on the ground of duress145. But it was held146 that the husband was rightly convicted as a principal because: "if this woman had been charged herself with committing the offence, she could have set up the plea of duress, not as showing that no offence had been committed, but as showing that she had no mens rea because her will was overborne by threats of imprisonment [by the husband] or violence so that she would be excused from punishment. But the offence ... does not depend upon consent; it depends on the act, and if an act of buggery [sic] is committed, the felony is committed." The significance of that for present purposes is that the actus reus of the crime was the wife's act in having sexual intercourse with the dog. There was no suggestion that, because the husband had coerced the wife into performing that act, the husband was somehow to be taken as himself having had sexual intercourse with the animal. Nor, obviously, could he have done so per vaginam, that being the manner in which the offence was said to have been committed. The second case, R v Cogan147, concerned a husband, Leak, who had forced his wife to have sexual intercourse with another man, Cogan. The husband was convicted of aiding and abetting the rape of his wife but Cogan was acquitted of the rape by reason that the jury were not satisfied that he knew that the wife was not consenting148. Notwithstanding that the husband's appeal was against his conviction for aiding and abetting, it was observed that he could equally have been convicted as a principal and if he had been so indicted149: "[i]t would have been no defence for him to submit that if Cogan was an 'innocent' agent, he was necessarily in the old terminology of the law a principal in the first degree, which was a legal impossibility as a man 145 Bourne (1952) 36 Cr App R 125 at 128. 146 Bourne (1952) 36 Cr App R 125 at 128-129. 148 Cogan [1976] QB 217 at 222. 149 Cogan [1976] QB 217 at 223. Cf Likiardopoulos v The Queen (2012) 247 CLR 265 at 275-276 [26]-[27] per Gummow, Hayne, Crennan, Kiefel and Bell JJ (French CJ agreeing at 268-269 [1]); [2012] HCA 37. Bell Nettle cannot rape his own wife during cohabitation. The law no longer concerns itself with niceties of degrees in participation in crime; but even if it did [the husband] would still be guilty. The reason a man cannot by his own physical act rape his wife during cohabitation is because the law presumes consent from the marriage ceremony ... There is no such presumption when a man procures a drunken friend to do the physical act for him." The significance of that observation for present purposes is that it was not considered, for the purpose of the husband's criminal liability as a principal, that Cogan's act of rape was in any sense converted into an act committed by the husband. Rather, to the contrary, it was Cogan's act  an act of non-consensual sexual penetration of a woman by a man other than the woman's husband  that comprised the actus reus of the crime, and the husband was guilty by reason of procuring that act to be committed. Had that not been so  more precisely, had Cogan's act been treated as if the act of penetration had been committed by the husband himself  the husband would have had a complete defence to the charge as the law then stood in England150. The third case was R v Austin151, concerning a father who forcibly took possession of his child from his wife. Four other men who assisted the father in locating the wife and child and in taking possession of the child were charged with aiding and abetting an offence of child stealing contrary to s 56 of the Offences against the Person Act 1861 (UK). The four men contended that, although they had deliberately aided and abetted the father, they had not committed an offence because the father had not acted unlawfully within the meaning of s 56. That section provided in substance that a person who unlawfully by force takes any child under 14 years of age with the intent of depriving any parent of the child's possession is guilty of an offence "[p]rovided, that no person who shall have claimed any right to the possession of such child ... shall be liable to be prosecuted by virtue hereof on account of the getting possession of such child". The Court of Appeal held152 that the effect of s 56 was that the taking of the child was "unlawful" but that the proviso operated to protect the father as a person claiming a right of possession of the child. That did not protect the father's aiders and abettors against the unlawfulness of the father's act. 150 Hale, The History of the Pleas of the Crown, 1st Am ed (1847), vol 1 at 628; Cogan [1976] QB 217 at 223. Cf PGA v The Queen (2012) 245 CLR 355; [2012] HCA 21. 151 [1981] 1 All ER 374. 152 Austin [1981] 1 All ER 374 at 377-378. See generally R v D [1984] AC 778 at Bell Nettle In the result, it was the father's unlawful, albeit protected, act which comprised the actus reus of the offence in relation to which the aiders and abettors were convicted and it was that act, not some act which they were deemed or somehow supposed to have committed themselves, for which they were held criminally liable. That stands in contrast to the situation in this case, where an act of the deceased causing his own death was not unlawful and was thus incapable of constituting the actus reus of the offence of murder with which the appellant was charged. Malice and foresight of incidental crime What has been said to this point is sufficient to resolve the appeal. Counsel for the appellant accepted that was so, but urged the Court to confine the doctrine of joint criminal enterprise liability on a broader basis relating to the foresight of any incidental crime and also to hold that, perforce of s 18(2)(a) of the Crimes Act, an act cannot fall within the scope of s 18(1) unless the act is malicious. It is unnecessary to take up those arguments. So far as foresight of incidental crimes is concerned, it is sufficient to note that what was said by Carruthers J in R v Sharah about the need to prove foresight of the possibility of an outcome153 has been subsequently questioned by the New South Wales Court of Criminal Appeal in Batcheldor v The Queen154 and was questioned by the Court of Criminal Appeal below155. For this Court, the resolution of that difference can await another day. As to malice, it should be recorded that nothing advanced in argument in this appeal has dissuaded us from the view recently expressed in Aubrey v The Queen156 that the effect of s 18(1) is to replace the common law concept of malice aforethought with a list of matters that would previously have established malice aforethought; and, consequently, that in a case in which the Crown is able to prove an act of the kind described in s 18(1), s 18(2)(a) (which excludes from the definition in s 18(1) any act or omission which was not malicious) has no role to play. 153 (1992) 30 NSWLR 292 at 297 (Gleeson CJ and Smart J agreeing at 293, 306). 154 (2014) 249 A Crim R 461 at 475 [79] per Hidden J (Bathurst CJ agreeing at 463 [1]), 483-485 [128]-[132] per R A Hulme J (Bathurst CJ agreeing at 463 [2]). 155 IL [2016] NSWCCA 51 at [34]-[37]. 156 (2017) 91 ALJR 601 at 614-615 [46] per Kiefel CJ, Keane, Nettle and Edelman JJ; [2017] HCA 18. Bell Nettle Conclusion For these reasons, the appeal should be allowed. The orders of the Court of Criminal Appeal should be set aside. In lieu thereof, it should be ordered that the appeal to the Court of Criminal Appeal be dismissed. Intention as a mental element of serious crime is now generally regarded as "the most fundamental element in a rational and humane criminal code"157. It has not always been so. In particular, it has not always been so in relation to the crime of murder. "At common law, killing constituted murder in two classes of case which, stated broadly, were (1) where the killing was intentional, and (2) where it was done unintentionally in the course of committing certain crimes which did not necessarily involve killing"158. The same distinction was maintained in the two limbs of the statutory definition of murder enacted in s 9 of the Criminal Law Amendment Act 1883 (NSW) and re-enacted in s 18(1)(a) of the Crimes Act 1900 (NSW). Murder under the first limb of s 18(1)(a) is taken to have been committed where "the act of the accused, or thing by him or her omitted to be done, causing the death charged, was done or omitted with reckless indifference to human life, or with intent to kill or inflict grievous bodily harm upon some person". That is not this case. Murder under the second limb of s 18(1)(a) is constructive murder. Murder under that limb is taken to have been committed where "the act of the accused, or thing by him or her omitted to be done, causing the death charged, was … done in an attempt to commit, or during or immediately after the commission, by the accused, or some accomplice with him or her, of a crime punishable by imprisonment for life or for 25 years". Except for its identification of the foundational crime (as enacted in 1900 as an act obviously dangerous to life or as a crime punishable by death or penal servitude for life but as amended since 1989159 as a crime punishable by imprisonment for life or for 25 years), the second limb of s 18(1)(a) replicates the common law crime of felony murder as understood in 1883160. The common law moved on, ultimately to hold that "an unintended killing in the course of or in connexion with a felony is murder if, but only if, the felonious conduct involved violence or danger to some person"161. The statute did not. 157 Thomas v The King (1937) 59 CLR 279 at 309; [1937] HCA 83. See also R v Martineau [1990] 2 SCR 633 at 645-646. 158 R v Surridge (1942) 42 SR (NSW) 278 at 282. 159 See Crimes and Other Acts (Amendment) Act 1974 (NSW), s 5(a) and Crimes (Life Sentences) Amendment Act 1989 (NSW), s 3 and Sched 1, item 2. 160 Stephen and Oliver, Criminal Law Manual, (1883) at 201. See Ryan v The Queen (1967) 121 CLR 205 at 241; [1967] HCA 2. 161 Ryan v The Queen (1967) 121 CLR 205 at 241. This Court has recently confirmed that, by stating that "[n]o act or omission which was not malicious ... shall be within this section", s 18(2)(a) does not cut down the scope of the definition in s 18(1)(a) and does not add to that definition by making malice a freestanding element of murder162. Although a reservation had earlier been tentatively expressed to the effect that malice might have some independent role in relation to constructive murder163, there is no warrant in the text or history of s 18 for attempting to give s 18(2)(a) such a differential operation. In the case of murder under the first limb of s 18(1)(a), the malice inheres in the requisite intent or reckless indifference. In the case of murder under the second limb of s 18(1)(a), as was indicated by its drafters164 and as has been recognised judicially165, malice no less than the crime itself is constructive: the malice is taken to inhere in the requisite intention to commit the foundational offence. the fact Drawing attention that many crimes punishable by imprisonment for life or for 25 years are not crimes of violence, the New South Wales Law Reform Commission observed in 2010 that the law of constructive murder "risks over-criminalising those who are involved in a foundational offence that, inadvertently, escalates to a homicide, at least so far as accomplices to the foundational offence are concerned"166. This case is an extreme illustration of that observation. Constructive murder, like other constructive crime, "should be confined to what is truly unavoidable"167. Had I been able to see any path of reasoning to the conclusion that Lan's assumed lighting of the ring burner resulting in his own death did not make IL the constructive murderer of Lan, I would have felt justified in taking that path to allow the appeal. Regrettably, I cannot. The Court of Criminal Appeal's holding that constructive murder was an available verdict in this case was, I am convinced, the inexorable result of the statutory assimilation 162 Aubrey v The Queen (2017) 91 ALJR 601 at 614-615 [46]; [2017] HCA 18, approving R v Coleman (1990) 19 NSWLR 467 at 473-474. 163 R v Coleman (1990) 19 NSWLR 467 at 474. 164 Stephen and Oliver, Criminal Law Manual, (1883) at 7. 165 Royall v The Queen (1991) 172 CLR 378 at 428; [1991] HCA 27, explaining Mraz v The Queen (1955) 93 CLR 493; [1955] HCA 59. 166 New South Wales Law Reform Commission, Complicity, Report 129, (2010) at 167 Wilson v The Queen (1992) 174 CLR 313 at 327; [1992] HCA 31, quoting R v Wilson (1991) 55 SASR 565 at 570. and perpetuation of an outmoded common law doctrine. Together with Gordon J, I would therefore dismiss IL's appeal to this Court. Mindful of the irony of finding myself compelled to reach a deeply disquieting conclusion rejected by the majority in this Court, I confine my reasons to explaining why I am unable to take either of the two alternative paths of reasoning to allowing the appeal indicated by the majority. Lan's lighting of the ring burner was an "act" of IL The starting point for each limb of the definition of murder in s 18(1)(a) is an "act of the accused, or thing by him or her omitted to be done, causing the death charged". The singular reference to an "act of the accused" has consistently been held to encompass an act of an accomplice attributed to the accused through the application of the common law doctrine of joint criminal enterprise168. According to that doctrine, "the participant in a joint enterprise or common design is liable for all that occurs in the course of its execution which is of a kind which fairly falls within the ambit of the enterprise or design"169. More specifically, according to that doctrine, a participant bears criminal responsibility for an act subjectively contemplated by that participant "as an act which might be done in the course of carrying out the primary criminal intention – an act contemplated as a possible incident of the originally planned particular venture"170. The common law doctrine of joint criminal enterprise applies to render an act of an accomplice an act of the accused for the purpose of each of the two limbs of s 18(1)(a). There is a difference, however, in how the doctrine works out in its application as between the two limbs. The difference derives from the difference in the requisite characteristics of the act causing the death charged. For the purpose of the first limb, the act of the accomplice causing death will be an act of the accused only if the joint enterprise or common design in which the accused and the accomplice participated was contemplated by the accused to extend to the accomplice doing an act of that kind with reckless indifference to human life or with intent to kill or inflict grievous bodily harm upon some person. For the purpose of the second limb, the act of the accomplice causing death will sufficiently be an act of the accused if the joint enterprise or 168 R v Grand and Jones (1903) 3 SR (NSW) 216 at 223, 224; R v Jacobs (2004) 151 A Crim R 452 at 488 [199]-[205]. 169 Johns v The Queen (1980) 143 CLR 108 at 112; [1980] HCA 3. 170 Johns v The Queen (1980) 143 CLR 108 at 131, quoting R v Johns [1978] 1 NSWLR 282 at 290. common design in which the accused and the accomplice participated was contemplated by the accused to extend to the accomplice doing an act of that kind as an incident of committing the foundational crime. That difference in how the doctrine of joint criminal enterprise works out in its application as between the two limbs of s 18(1)(a) is reflected in the reasoning in R v Sharah171, which has been consistently followed, and which was not challenged in this case. I do not think Sharah to be inconsistent with the earlier explanation in R v Surridge172. As the circumstances in Sharah and Surridge both illustrate, there is no reason in principle why the two limbs cannot both be engaged in the same circumstances173. The entirety of the explanation in Surridge was given in the context of explaining how both limbs were capable of applying where the accused and the accomplices had the common purpose of robbing a man using "any violence, without any limitation as to its quantum, which might be necessary to overcome his resistance"174. Surridge was accordingly a case in which the mental element identified in Sharah as necessary to render an act of an accomplice an act of the accused for the purpose of each limb of s 18(1)(a) was satisfied. The nature and extent of the criminal responsibility attributed by operation of the common law doctrine of joint criminal enterprise has long been obscure175, but was squarely addressed in Osland v The Queen176. On my understanding of the reasoning of the majority in that case, the effect of the operation of the doctrine is to attribute to the accused primary (as distinct from derivative) criminal responsibility for the physical act of the accomplice, and to do so whether or not the act of the accomplice was one which the accused was physically capable of performing and whether or not the act of the accomplice amounted to an element of a crime committed by the accomplice. The irrelevance of whether the act of the accomplice was one which the accused was physically capable of performing was, I think, implicit in the 171 (1992) 30 NSWLR 292 at 297. 172 (1942) 42 SR (NSW) 278 at 282. 173 See R v Spathis [2001] NSWCCA 476 at [230]-[236]. 174 (1942) 42 SR (NSW) 278 at 282. 175 Miller v The Queen (2016) 90 ALJR 918 at 935 [85]; 334 ALR 1 at 22; [2016] HCA 30. 176 (1998) 197 CLR 316; [1998] HCA 75. majority's acceptance of the outcomes in the English cases of R v Cogan177 and R v Austin178 and its treatment of those outcomes as explicable "only on the basis that the person acting in concert with the actual perpetrator has attributed to him or her the acts of the actual perpetrator"179. The irrelevance of whether or not the act of the accomplice amounted to an element of a crime committed by the accomplice was, on my reading, the basis of the actual holding in Osland that there was no inconsistency in the jury in that case having convicted the accused of the murder of her husband while having failed to agree whether her son acted in self-defence or under provocation in performing the act which caused death. The irrelevance of whether the act of the accomplice amounted to an element of a crime committed by the accomplice was emphasised by the majority's express rejection of a statement in the Full Court of the Supreme Court of Victoria in R v Demirian180 which had been made in the course of examining the potential for an accused who had conspired with another man to blow up a building to be liable at common law for the murder of that man when the bomb exploded accidentally, killing him. What had been said in Demirian was that the accused could not have been convicted of murder as a principal even if the accused was present at the scene of the bomb explosion and was acting in concert with the man who exploded the bomb and who was killed by it181. That statement was said in Osland not to be an accurate statement of Osland was unchallenged in this case. My understanding of Osland accords with the explanation given by Kiefel CJ, Keane and Edelman JJ. That understanding prevents me from acceding to the view of Bell and Nettle JJ that Lan's lighting of the ring burner was not an "act" of IL if IL contemplated Lan lighting the ring burner as an incident of executing their joint enterprise of manufacturing methylamphetamine. For completeness, I note that Osland concerned only the doctrine of joint criminal enterprise and not the doctrine of extended joint criminal enterprise 178 [1981] 1 All ER 374. 179 Osland v The Queen (1998) 197 CLR 316 at 349 [88]. 181 [1989] VR 97 at 123-124. 182 (1998) 197 CLR 316 at 349 [91]. recently affirmed by majority in Miller v The Queen183. This case too concerns only joint criminal enterprise. Whether criminal responsibility attributed by operation of the doctrine of extended joint criminal enterprise is primary or derivative and how, if at all, the doctrine of extended joint criminal enterprise might intersect with constructive murder are questions which do not now arise for consideration. Lan's killing of himself is no answer to constructive murder Were the text of s 18 to be read without reference to historical context, the first limb of s 18(1)(a) might be read as drawing a distinction between (1) the accused, being the person whose act or omission has caused death, and (2) the person whose death has been caused. Implicit in that two-fold distinction might be thought to be that the accused and the deceased must be different persons, with the result that a person who intentionally kills himself or herself could never commit murder as defined by the first limb. That reading might be thought to be confirmed by the statement in s 18(2)(b) that "[n]o punishment or forfeiture shall be incurred by any person who kills another by misfortune only" and by the prescription of the punishment for murder, originally in s 19 but now in s 19A, being a punishment which can only be imposed on a person who is alive. The second limb might similarly be read as distinguishing between (1) the accused, (2) the person whose death has been caused, and (3) an accomplice with the accused in the foundational crime. Implicit in that three-fold distinction, it might be thought, is a requirement that the deceased be neither the accused nor any accomplice with the accused in the commission of the foundational crime. One result of that reading would be that a person who unintentionally killed himself or herself in the course of attempting to commit a foundational crime could not become the constructive murderer of himself or herself. Another result would be that a person who unintentionally killed an accomplice in the course of attempting to commit the foundational crime could not become the constructive murderer of the accomplice. The difficulty with that reading of s 18(1)(a) is that it runs counter to the accepted view that the statutory definition replicated the definition of murder as understood at common law in 1883, other than to the extent of removing the common law requirement for malice aforethought and altering the identification of the foundational crime for constructive murder184. The contrast in language between ss 18(2)(a) and 18(2)(b), together with the relationship between ss 18(1)(a) and 18(2)(b), is to be understood against the background that whether 183 (2016) 90 ALJR 918; 334 ALR 1. 184 Ryan v The Queen (1967) 121 CLR 205 at 241. a person had committed murder and whether a person was able to be tried and punished for murder were treated at common law as distinct questions. Murder at common law encompassed self-murder, and self-murder at common law could be constituted either by intentional self-killing or by unintentional self-killing in the course of the commission or attempted commission of another felony185. That murder (at that time defined as "the killing [of] a man with malice prepense") included the intentional killing of a man by himself ("felonia de se") was authoritatively determined at common law in 1562186. The casuistic reasoning then used to support the conclusion that intentional self-killing was self-murder soon entered into popular culture187. That murder included as well the unintentional killing of a woman by herself in the course of attempting to commit another felony was accepted by text writers188 and was judicially confirmed in 1832189. To an assertion made in argument in 185 See generally Barry, "Suicide and the Law", (1965) 5 Melbourne University Law Review 1; Glanville Williams, The Sanctity of Life and the Criminal Law, (1958) at 224-276; Turner, Kenny's Outlines of Criminal Law, 17th ed (1958) at 163-164 ¶127; Russell, A Treatise on Crimes and Misdemeanors, 8th ed (1923), vol 1 at 618-620; Halsbury, The Laws of England, (1909), vol 9 at 579 [1172], 592-593 [1198]; Mikell, "Is Suicide Murder?", (1903) 3 Columbia Law Review 379; Hawkins, A Treatise of the Pleas of the Crown, 8th ed (1824), vol 1 at 77-78, 102; Hale, Historia Placitorum Coronae: The History of the Pleas of the Crown, (1800), vol 1 at 411-413; Blackstone, Commentaries on the Laws of England, (1769), bk 4, c 14 at 188-189. 186 Hales v Petit (1562) 1 Plowden 253 at 261 [75 ER 387 at 399-400], referred to in Stuart v Kirkland-Veenstra (2009) 237 CLR 215 at 249-250 [94]; [2009] HCA 15. 187 Compare Hales v Petit (1562) 1 Plowden 253 at 261-262 [75 ER 387 at 399-401] with Shakespeare, Hamlet, act V, scene 1, lines 1-22, as noted in Blackstone, Commentaries on the Laws of England, 12th ed (1794), bk 2, c 27 at 409, fn 1. See also the definition of "suicide" in Dr Johnson's Dictionary: Johnson, A Dictionary of the English Language, (1755). 188 Hale, Historia Placitorum Coronae: The History of the Pleas of the Crown, (1800), vol 1 at 411-413; Hawkins, A Treatise of the Pleas of the Crown, 8th ed (1824), vol 1 at 77-78, 102. 189 R v Russell (1832) 1 Mood 356 at 367 [168 ER 1302 at 1306], followed in R v Leddington (1839) 9 Car & P 79 [173 ER 749] and distinguished in R v Fretwell (1862) Le & Ca 161 [169 ER 1345]. 1862 that "[t]he crime of felo de se is treated of apart from murder in all the text books"190, the judicial response was immediate and blunt191: "There are no degrees in self-destruction. If a man feloniously kill himself, it must be self-murder." The man who feloniously killed himself obviously could not be prosecuted for his own murder. But others could. A person present at a self- killing who aided and abetted could be a principal in the second degree to murder. That was true even of the survivor of a suicide pact. Equally, a person not present at a self-killing who aided and abetted could be an accessory before the fact to murder. An accessory before the fact to self-murder was in practice shielded from prosecution at common law through the operation of the general common law rule that an accessory before the fact could not be tried unless the principal felon had first been convicted. The statutory abrogation of that general common law rule was held in 1857 to have the consequence that a person could thereafter be tried for and convicted of being an accessory before the fact to self- murder by another person, including a self-murder constituted by an unintentional self-killing in the course of committing another felony192. Moreover, it was by applying the general common law rule that an attempt to commit a felony was a misdemeanour that attempted suicide came to be held in 1854 to be a misdemeanour at common law193. Attempted suicide came in that way to be recognised as a common law misdemeanour not as a result of "deliberate penal policy" but rather as the result of "mechanical legal logic"194: attempted suicide was a misdemeanour for no reason other than that it was an attempt to commit the common law felony of self-murder. The common law misdemeanour of attempted suicide was held in 1862195 to be unaffected by the creation in England in 1861196 of the statutory felony of "attempt to commit murder". That holding was not on the basis that suicide was not self-murder. An 190 R v Burgess (1862) Le & Ca 258 at 260 [169 ER 1387 at 1388]. 191 R v Burgess (1862) Le & Ca 258 at 261 [169 ER 1387 at 1388]. 192 R v Gaylor (1857) Dears & Bell 288 at 292-293 [169 ER 1011 at 1012-1013]. See also R v Croft [1944] KB 295 at 297. 193 R v Doody (1854) 6 Cox CC 463. 194 Glanville Williams, The Sanctity of Life and the Criminal Law, (1958) at 248. 195 R v Burgess (1862) Le & Ca 258 [169 ER 1387]. 196 Offences against the Person Act 1861 (UK) (24 & 25 Vict c 100), s 15. argument to that effect, as already noted, was specifically rejected197. The holding was rather on the basis that on a purposive construction the general statutory reference to an attempt to commit murder did not encompass the specific case of an attempt to commit self-murder; the statute did not turn what had previously been a common law misdemeanour punishable by imprisonment into a statutory offence punishable by death198. Writing in 1883, the year of enactment of the Criminal Law Amendment Act, Sir James Fitzjames Stephen was accordingly able to state without equivocation or qualification that "[s]uicide is by the law of England regarded as a murder committed by a man on himself" and that "[s]uicide is held to be murder so fully, that every one who aids or abets suicide is guilty of murder". Stephen added the illustration of a suicide pact. "If, for instance, two lovers try to drown themselves together, and one is drowned and the other escapes, the survivor is guilty of murder"199. The illustration alluded to a case determined by the opinion of nine of the common law judges of England in 1823200, which had been relied on in the Supreme Court of New South Wales in 1836201. The statutory abolition of the coronial verdict of "felo-de-se" in New South Wales in 1876202 was expressed not to affect the law with respect to attempts to commit suicide, and did nothing to remove self-murder from the felony of murder at common law. Within the Crimes Act, as enacted in 1900, the application of the definition of murder in s 18(1)(a) to self-killing needed to be understood in light of s 345203, which provided that "[e]very principal in the second degree in any felony ... shall be liable to the same punishment as the principal in the first degree", and also in light of s 346204, which went on to provide that "[e]very 197 R v Burgess (1862) Le & Ca 258 at 260-261 [169 ER 1387 at 1388]. 198 R v Burgess (1862) Le & Ca 258 at 262 [169 ER 1387 at 1389]. 199 Stephen, A History of the Criminal Law of England, (1883), vol 3 at 104. 200 R v Dyson (1823) Russ & Ry 523 [168 ER 930]. See later R v Jessop (1877) 16 Cox CC 204 at 206. 201 R v James (1836) NSW Sel Cas (Dowling) 309. 202 Verdicts of Felo-de-se Abolition Act 1876 (NSW). 203 See also s 302 of the Criminal Law Amendment Act. 204 See also s 303 of the Criminal Law Amendment Act. accessory before the fact to any such felony may be indicted, convicted, and sentenced, either before or after the trial of the principal felon, or together with such felon, or indicted, convicted, and sentenced, as a principal in the felony, and shall be liable in either case to the same punishment as the principal felon, whether the principal felon has been tried or not, or is amenable to justice or not". The application of the definition in s 18(1)(a) to self-killing also needed to be understood in light of the inclusion by s 477(a) of "attempting to commit suicide" within the list of offences punishable summarily under s 476. The offence of attempting to commit murder created by s 30, read consistently with the prior judicial interpretation of its English progenitor of 1861, did not extend to attempting to commit self-murder205. There then being no statutory offence of attempting to commit suicide, s 477(a) could only have been drafted on the assumption of the continuing existence of that offence as a common law misdemeanour. The logic which led to attempting to commit suicide continuing to be treated as a common law misdemeanour required that actually committing suicide continue to be treated either as a common law or statutory felony. Borrowing language from the Suicide Act 1961 (UK), the Crimes Act was amended in 1983206 to insert s 31A, which provides that "[t]he rule of law that it is a crime for a person to commit, or to attempt to commit, suicide is abrogated". Sections 31B and 31C were also then inserted, the latter to create the new and distinct statutory offence of aiding or abetting the suicide or attempted suicide of another person, and the former to provide that the survivor of a suicide pact is not to be guilty of murder or manslaughter but may be guilty of that new and distinct offence. The rule of law that it was a crime in New South Wales for a person to commit suicide, to which s 31A referred and which it abrogated, cannot be treated as having been a remnant of the common law which somehow survived outside the statutory definition of murder which had existed since 1883. The rule was rather the consequence of s 18(1)(a) being read consistently with the definition of murder at common law so as to permit of the possibility that the accused, being the person whose act or omission caused death, and the person whose death has been caused, might be one and the same person. Although I am aware of no case in which the point was considered, I can see no reason why suicide before 1983 did not constitute murder within s 18(1)(a). Nor can I see any reason why the survivor of a suicide pact would not have been liable to murder, if not as a principal in the first degree by reason of having been a participant in a joint criminal enterprise, then as a principal in the second degree 205 See Weigall and McKay, Hamilton and Addison: Criminal Law and Procedure, 6th ed (1956) at 61. 206 Crimes (Mental Disorder) Amendment Act 1983 (NSW), s 3 and Sched 1, item 2. under s 345 read with s 18(1)(a). Similarly, I can see no reason why a person who knowingly assisted without being present at a suicide would not have been liable as an accessory before the fact to murder under s 346 read with s 18(1)(a). Section 31A operated from 1983 to carve suicide out of the definition of murder in s 18(1)(a). So operating, s 31A had the effect of removing suicide as the basis for the common law crime of attempted suicide (which was for good measure also expressly abrogated by s 31A) and as the basis for accessorial liability under s 346207. Suicide within the meaning of s 31A undoubtedly encompasses intentional self-killing208 previously amounting to intentional self-murder within the first limb of s 18(1)(a). Less clear is whether suicide within the meaning of s 31A encompasses unintentional self-killing previously amounting to constructive self- murder within the second limb of s 18(1)(a). Telling in favour of the view that s 31A encompasses constructive self-murder is that the term suicide appears to have been used historically to refer to any felonious self-killing209, an example of which given as late as 1929 being that of death of a duellist occurring as a result of the duellist's own pistol exploding in the course of the duel210. Telling against the view that s 31A encompasses constructive self-murder is that, by the time of the incorporation of the term into the language of the Suicide Act, felony murder and with it felony self-murder had been abolished in the United Kingdom211. There may accordingly be room for doubt as to whether an act by which a person unintentionally causes his or her own death in the course of committing a foundational crime now constitutes constructive self-murder. This is not the case in which to resolve that doubt. That is because the criminal responsibility of IL for the constructive murder of Lan does not depend on whether Lan was a constructive murderer of himself. The act of Lan in lighting the ring burner was for the purpose of s 18(1)(a) the act of IL. The prosecution case against IL is not one of constructive self-murder, but one of constructive murder of an accomplice with the accused in the foundational crime. 207 See R v Demirian [1989] VR 97 at 107-108. 208 See X v The Sydney Children's Hospitals Network (2013) 85 NSWLR 294 at 308 209 See Borradaile v Hunter (1843) 5 Man & G 639 at 668 [134 ER 715 at 727-728]. 210 Kenny, Outlines of Criminal Law, 13th ed (1929) at 112. 211 Homicide Act 1957 (UK), s 1. Clear enough is that suicide within the meaning of s 31A does not encompass the killing of one person by another person. Before 1983, there was no reason why an act attributed to an accused which caused the unintentional death of an accomplice with the accused in the foundational crime did not result in the accused becoming the constructive murderer of the accomplice in the same way as the accused would have become a constructive murderer if the same act had caused the unintentional death of a third person. Since 1983, nothing has changed. For these reasons, I am unable to agree with Kiefel CJ, Keane and Edelman JJ that the appeal in relation to constructive murder can be allowed on the basis that Lan's lighting of the ring burner resulted only in the death of Lan. Lan's killing of himself is also no answer to manslaughter Given that Kiefel CJ, Keane and Edelman JJ and Bell and Nettle JJ do not address manslaughter as a discrete topic, the explanation for my dissent on that topic can be brief. Unlike s 18(1)(a), which defines murder, s 18(1)(b) merely provides that every punishable homicide other than murder is taken to be manslaughter. The elements of the offence of manslaughter are supplied by the common law. According to the taxonomy of the common law, manslaughter can be either voluntary manslaughter or involuntary manslaughter can be either manslaughter by criminal negligence or manslaughter by an unlawful and dangerous act carrying with it an appreciable risk of serious injury212. The prosecution case in manslaughter against IL was limited to the last of those sub-categories: involuntary manslaughter by an unlawful and dangerous act constituted by lighting the ring burner carrying with it an appreciable risk of serious injury. involuntary manslaughter, and Lighting the ring burner was plainly not unlawful in itself. Lighting the ring burner was unlawful because it was an incident of executing the joint enterprise of manufacturing methylamphetamine. It was open to the jury to conclude that, to the knowledge of Lan and of IL, the act of lighting the ring burner was dangerous and carried an appreciable risk of serious injury. The common law never recognised involuntary manslaughter to extend to self-manslaughter213. Lan's criminal responsibility for his own unlawful and 212 Wilson v The Queen (1992) 174 CLR 313 at 333; R v Lavender (2005) 222 CLR 67 at 70 [2], 82 [38]; [2005] HCA 37. 213 R v Burgess (1862) Le & Ca 258 at 260-261 [169 ER 1387 at 1388]; Stephen, A History of the Criminal Law of England, (1883), vol 3 at 104; Glanville Williams, The Sanctity of Life and the Criminal Law, (1958) at 250. dangerous act could not have resulted in Lan being guilty of his own manslaughter. But that is no answer to the case against IL, which turns on IL having primary criminal responsibility for Lan's act. The common law doctrine of joint criminal enterprise, which applies to attribute responsibility for the act of Lan to IL for the purpose of constructive murder, applies also to attribute responsibility for that act to IL for the purpose of involuntary manslaughter. If the joint enterprise in which IL and Lan participated was contemplated by IL to encompass Lan lighting the ring burner as an incident of manufacturing methylamphetamine, the verdict of manslaughter was available as an alternative to murder. 129 GORDON J. Felony murder has a long history214. In general terms, the common law felony murder rule provides that a person who causes the death of another in the course of committing another offence of a specified category (the "foundational offence") is guilty of murder regardless of whether that person had the mental element otherwise required for the offence of murder215. From at least the 1860s, the felony murder rule has been the subject of strident criticism216. Despite those concerns about the felony murder rule, New South Wales adopted the common law felony murder rule in an amended form by the enactment of s 9 of the Criminal Law Amendment Act 1883 (NSW). As Windeyer J said in Ryan v The Queen217: "Sir Alfred Stephen and Alexander Oliver, Parliamentary Draftsmen, said in their commentary on the Act, and were it would seem right in saying, that the effect of the New South Wales definition was to banish the expression 'malice aforethought', but not otherwise to alter the common law, except in one respect. 'In one particular', they said, 'there is an important difference. The accidental taking of life, by a person committing (or about to commit) a felony of any kind, is by the common law murder. Under the ninth section it will not amount to that crime unless the felony was a capital one or punishable by penal servitude for life'". (emphasis added) Section 9 of the 1883 Act was re-enacted as s 18(1) of the Crimes Act 1900 (NSW). In its statutory form, the felony murder rule is commonly referred to as "constructive murder". Notwithstanding continued criticisms of both felony murder and constructive murder218, s 18, headed "Murder and manslaughter defined", continues to include constructive murder as one method of establishing the offence of murder. Constructive murder is not a separate offence. 214 See Coke, The Third Part of the Institutes of the Laws of England, (1797) at 56. 215 See R v Van Beelen (1973) 4 SASR 353 at 403. 216 See, eg, R v Horsey (1862) 3 F & F 287 at 288-290 [176 ER 129 at 130-131]; R v Serné (1887) 16 Cox CC 311 at 312-313; Ryan v The Queen (1967) 121 CLR 205 at 240; [1967] HCA 2. See also Stephen, A History of the Criminal Law of England, (1883), vol 3 at 57-58. 217 (1967) 121 CLR 205 at 241. 218 See New South Wales Law Reform Commission, Complicity, Report 129, (2010) Section 18 of the Crimes Act Section 18 relevantly provides that: (a) Murder shall be taken to have been committed where the act of the accused, … causing the death charged, was done … with reckless indifference to human life, or with intent to kill or inflict grievous bodily harm upon some person, or done in an attempt to commit, or during or immediately after the commission, by the accused, or some accomplice with him or her, of a crime punishable by imprisonment for life or for 25 years. Every other punishable homicide shall be taken to be manslaughter. (a) No act or omission which was not malicious, or for which the accused had lawful cause or excuse, shall be within this section. …" (emphasis added) Although this appeal is concerned with the italicised words in s 18(1)(a) – constructive murder – the whole section is important. For present purposes, s 18(1)(a) comprises a number of distinct but interrelated elements. First, it requires an "act of the accused … causing the death charged". That element is common to each method of establishing murder. That element has the same meaning and operation for each method. Second, that element – "the act of the accused … causing the death charged" – must take one of two forms. It must be an act done: (1) with reckless indifference to human life or with intent to kill or inflict grievous bodily harm; or in an attempt to commit, or during or immediately after the commission by the accused or some accomplice of, a crime punishable by imprisonment for life or for 25 years (the foundational offence) – constructive murder. The distinction drawn in s 18(1)(a) between the two categories of murder (which is consistent with the common law and its approach to liability for murder) was identified in 1942 by Jordan CJ in R v Surridge219. First category In relation to the first category, Jordan CJ in Surridge stated that the special mention of the accomplice in the second category did not exclude accomplices from liability for murder in the first category because of the common law principles of complicity220. That point is illustrated by R v Grand and Jones221. Mr Grand, along with another person, was convicted of murder for a death that occurred during a burglary as a result of a gunshot. The jury were directed that "if they thought that the persons who committed the burglary went there resolved, if necessary, to resist at all hazards any interference with them in the execution of their purpose, and the constable was killed by one of them, it was not necessary to determine which of them fired the fatal shot"222. In the course of upholding the conviction, "I do not think that s 18 was intended to alter the Common Law, that where two persons go out with the common intention of committing a crime and of resisting any opposition by force, and death ensues as the result of the use of force, then both of those engaged are guilty of murder." In the circumstances described by Stephen ACJ, "both of those engaged are guilty of murder" because "the killing was within the common purpose"224. Grand was a case in the first category because, at the time, burglary was not capable of being a foundational offence for the purpose of constructive murder225. The case does not directly address constructive murder. It does, however, 219 (1942) 42 SR (NSW) 278 at 282-283. 220 (1942) 42 SR (NSW) 278 at 282. 221 (1903) 3 SR (NSW) 216. 222 Grand (1903) 3 SR (NSW) 216 at 217. 223 Grand (1903) 3 SR (NSW) 216 at 223-224. 224 See Surridge (1942) 42 SR (NSW) 278 at 283. 225 See (1903) 3 SR (NSW) 216 at 221-222. illustrate the meaning to be given to "the act of the accused ... causing the death charged" in s 18(1)(a). It is not always necessary to show that the accused applied the fatal force. Second category In relation to the second category, Jordan CJ in Surridge relevantly stated that for an accomplice to be guilty of constructive murder, all that is required under s 18(1)(a) is that it was within the common purpose of the parties that an offence capable of being a foundational offence be committed and that "the cause of the death [ie, the act(s)] must have been something done by the other in an attempt to commit or during or immediately after the commission of that … crime"226. Here, the Crown did not run a case against IL based on the first category. As Simpson JA noted in the Court of Criminal Appeal of the Supreme Court of New South Wales, the Crown could not "realistically proceed" on the basis of the first category227. The Crown's case against IL was based solely on the second category228. On the approach to the second category explained by Jordan CJ in Surridge, IL could be found guilty of constructive murder. The Crown could make out a case that it was within the common purpose of IL and Mr Lan to commit an offence capable of being a foundational offence, namely the manufacture of a large commercial quantity of a prohibited drug229, and that the act "causing the death charged" – the act of lighting the ring burner – was something done by the other (Mr Lan) during the commission of the foundational offence. Complicity and constructive murder under s 18 The application of the constructive murder limb of s 18(1)(a) is harsh. law antecedent have persisted, But the statutory rule and its common 226 (1942) 42 SR (NSW) 278 at 283. The words "of an act obviously dangerous to life" were removed from s 18(1)(a) by s 5(a) of the Crimes and Other Acts (Amendment) Act 1974 (NSW). 227 R v IL [2016] NSWCCA 51 at [33]. 228 Alternatively to the murder charge under s 18(1)(a), the indictment contained a charge of manslaughter under s 24 of the Crimes Act. 229 R v IL [2016] NSWCCA 51 at [39]. See ss 24(2) and 33(1)(a) and (3)(a) of the Drug Misuse and Trafficking Act 1985 (NSW). notwithstanding that they have been criticised for over 150 years. Common law complicity may be understood as infringing on, and in some instances taking the place of, constructive murder. But while constructive murder remains on the statute books, the provision must be applied where it is sought to be relied upon. The outcome may be thought unattractive, but that feeling of unease cannot be met by ignoring the terms of the provision. And the further developments of the common law of complicity do not require a departure from Surridge in relation to either category. Rather, those developments assist in explaining how "the act of the accused ... causing the death charged" in s 18(1)(a) encompasses acts done by another. Osland v The Queen230 is not a constructive murder case, but it is one example of liability for murder where the accused did not personally apply the fatal force. In that case, the deceased was killed in accordance with a common understanding or arrangement between the accused and another person, with the other person striking the fatal blow or blows in the presence of the accused. The accused, who did not personally do the physical act or acts, was convicted of murder even though the person who did do the physical act or acts was acquitted. That outcome was possible because, as McHugh J (with whom Kirby J and Callinan J agreed) explained, "it is the acts constituting the actus reus, and not the crime, of the actual offender which are attributed to the other party. The liability is direct or primary, not derivative"231. The distinction between primary and derivative liability may sometimes be important. The person who does the act might have a defence that diminishes or absolves that person of criminal responsibility. But that does not mean the other party to the enterprise cannot be convicted of the more serious offence. "Once the parties have agreed to do the acts which constitute the actus reus of the offence and are present acting in concert when the acts are committed, the criminal liability of each should depend upon the existence or non-existence of mens rea or upon their having a lawful justification for the acts, not upon the criminal liability of the actual perpetrator." 230 (1998) 197 CLR 316; [1998] HCA 75. 231 Osland (1998) 197 CLR 316 at 346 [81]; see also at 383 [174], 413 [257]. 232 Osland (1998) 197 CLR 316 at 350 [93]. And as was explained by the Court of Criminal Appeal of the Supreme Court of New South Wales in Tangye233, quoted with approval by McHugh J in Osland234, "where two or more persons carry out a joint criminal enterprise, each is responsible for the acts of the other or others in carrying out that enterprise" (emphasis added). Each person is responsible for the acts of the other or others "because they have agreed to them being done"235. For the constructive murder limb of s 18(1)(a), where it is established that the accused was a party to a joint criminal enterprise to commit an offence capable of being a foundational offence, the accused is responsible for the acts of the other party to the agreement that were done in carrying out that enterprise. An act of the other party done in those circumstances can be "the act of the accused" for the purpose of s 18(1)(a)236. It follows that, if the act of the other party causes the death charged and the act is done in an attempt to commit, or during or immediately after the commission of, the foundational offence, then the accused will be liable for constructive murder. As Jordan CJ correctly explained in Surridge237, nothing more is required238. As explained above, those elements were capable of being satisfied in this case: "There was no real dispute that the Crown could make out a case that [IL] and Mr Lan were engaged in a joint criminal enterprise to manufacture a large commercial quantity of a prohibited drug"239. The act of lighting the ring burner was done by Mr Lan in carrying out the enterprise. That act caused "the death charged" and was done during the commission of the foundational offence. 233 (1997) 92 A Crim R 545 at 556. See also Surridge (1942) 42 SR (NSW) 278 at 234 (1998) 197 CLR 316 at 343 [73]. 235 Osland (1998) 197 CLR 316 at 350 [93]. 236 See R v Jacobs (2004) 151 A Crim R 452 at 486 [189]-[192]. 237 (1942) 42 SR (NSW) 278 at 283. 238 See, eg, R v Vandine [1970] 1 NSWR 252 at 254-255, 258. 239 R v IL [2016] NSWCCA 51 at [39]. IL was responsible for that act as it was an act done in carrying out the joint criminal enterprise, such that it could be "the act of the accused" for the purpose of s 18(1)(a). Distinguishing between an act and the actus reus of a crime is not useful when considering the application of s 18(1)(a). Introducing a distinction of that kind departs from the statutory words used in the provision. It is a departure because introducing a distinction of that kind necessarily attributes a different meaning to the phrase "the act of the accused ... causing the death charged" for the purpose of constructive murder from the meaning of the phrase for the purpose of the first category of murder. On that approach, it is not doubted that for the first category, the acts of the parties to a joint criminal enterprise that, between them, comprise the actus reus of an offence within the scope of the agreement can be relied on to establish murder. But the same approach leads to the result that, for the second category, the acts of the parties to a joint criminal enterprise that, between them, comprise the actus reus of an offence within the scope of the agreement and which is a foundational offence cannot be relied on to establish constructive murder. There is no basis for that distinction and one has not been identified. Moreover, observing that the common law principles of complicity do not apply to render IL guilty of murder within the first category does not address the issue of how the common law principles of complicity inform (as they do) what is the relevant "act of the accused ... causing the death charged" for the purpose of the second category – constructive murder. In the present case, that question (what is the act of the accused causing death) is to be answered by applying the common foundational offence. The consequence of applying those principles is that the accused (IL) is responsible for all of the steps taken by Mr Lan towards manufacturing the methylamphetamine, including the lighting of the burner. law principles of complicity the Once that is recognised, the question whether Mr Lan could have been liable for homicide does not arise. First, as noted above, Osland makes it clear that IL's liability for constructive murder would be primary, not derivative. Thus, Mr Lan's liability or otherwise for murder is irrelevant. Second, consideration of the question whether Mr Lan could have been liable for homicide distracts attention from the relevant statutory question. The statutory question is not answered by observing that s 18(1)(a) requires the death of a person other than the person who did the act. Once it is understood that Mr Lan's act of lighting the burner was "the act of the accused" – that is, the act of IL – then that act did cause the death of another. Constructive murder is not a separate offence; it is one method of establishing the offence of murder under s 18(1)(a). Observations in other cases involving the offence of murder or manslaughter under different statutory regimes and different facts must be approached with caution240. They are in different terms. And observing that this method of establishing murder under s 18(1)(a) – constructive murder – leads to harsh and potentially absurd results does no more than highlight the continued difficulties of this method of establishing murder remaining on the statute books. Nevertheless, the liability of accomplices for constructive murder is not at large. As with any charge of murder under s 18(1)(a), the act must be an act of the accused, the act must be voluntary and the act must "caus[e] the death charged"241. Each of these may be a live issue, where, for example, a person who is a party to a joint criminal enterprise, in the course of carrying out that enterprise, is hit by a bus while crossing the road or slips and falls from a height, or where machinery malfunctions. But in this appeal, neither voluntariness nor causation was in issue. This view of the operation of the constructive murder limb of s 18(1)(a) is consistent with the common law rule of felony murder and with the approach adopted in cases both before and after Surridge242. Put another way, subsequent cases in New South Wales do not require a departure from Surridge. In particular, subject to a line of authority beginning with R v Sharah243, which proceeds on a wrong premise and to which it will be necessary to return, the cases do not stand for the proposition that where a foundational offence has been committed, liability for constructive murder depends upon anything more than establishing (1) an agreement between the parties to commit an offence capable of being a foundational offence and (2) that the act causing the death was done in an attempt to commit, or during or immediately after the commission of, that foundational offence. Before dealing with some of the New South Wales cases, it is useful to say something about the common law principles that had developed in relation to felony murder. It is to be recalled that s 18 was intended to encompass those common law principles. And, as explained in these reasons, that is what the words of the section achieve. The common law position was summarised in R v Solomon244 in the following terms: 240 See, eg, Osland (1998) 197 CLR 316 at 349 [91]; see also at 383 [174], 413 [257]. 241 See Ryan (1967) 121 CLR 205 at 213. 242 See Jacobs (2004) 151 A Crim R 452 at 486-494 [188]-[229]; Batcheldor v The Queen (2014) 249 A Crim R 461 at 470-475 [58]-[82]. 243 (1992) 30 NSWLR 292. 244 [1959] Qd R 123 at 126-127 quoted in R v R (1995) 63 SASR 417 at 420. "By the common law if the victim of robbery, which is a felony involving violence, be killed in the course of the robbery all parties to the robbery are guilty of murder. The probability or possibility that homicide would or would not be done is irrelevant. The fact that the homicide occurred independently of the exercise of the will of one of the accomplices would not exonerate him." The common law approach was followed by the Full Court of the Supreme Court of South Australia in R v R245, a case concerning the common law felony murder rule in that State. In that case, an accomplice in a joint criminal enterprise to commit an armed robbery contended that the criminal liability of a principal in the second degree, or of an accessory before the fact, to a felony for a murder committed in the course of the felony should be determined according to the common purpose rule laid down in Johns v The Queen246. In other words, the jury should have been directed that the accomplice was guilty of murder only if it was in his contemplation that the principal would or might inflict a fatal stab wound. The contention was rejected. King CJ, with whom the other four members of the Court agreed, observed247: "[T]he argument on grounds of policy is really an attack on the felony murder rule itself. If the policy is accepted that the actual perpetrator should be liable for the unintended consequences of his actions in the course of the felony because in engaging in a violent or dangerous felony he must accept responsibility for what occurs in the course of that felony, even though unintended, there appears to be no reason of policy why other participants in the felony should not also have to accept the same responsibility." The common law rule was replaced in South Australia in 1994248 by a constructive murder provision analogous to s 18(1)(a). That section provides: "A person who commits an intentional act of violence while acting in the course or furtherance of a major indictable offence punishable by imprisonment for ten years or more (other than abortion), and thus causes the death of another, is guilty of murder." (note omitted) 245 (1995) 63 SASR 417 at 420. 246 (1980) 143 CLR 108 at 113, 130-131; [1980] HCA 3. 247 (1995) 63 SASR 417 at 421; see also at 424-425. 248 s 12A of the Criminal Law Consolidation Act 1935 (SA), inserted by s 5 of the Criminal Law Consolidation (Felonies and Misdemeanours) Amendment Act 1994 That provision was considered by this Court The Queen249. In directions to the jury the trial judge said250: in Arulthilakan v "As to joint enterprise, if you are satisfied that all of the accused had the common purpose that they would roll or rob Hillam, and for the purpose of their joint enterprise they would be armed with knives and a billiard ball, that they would use the knives and billiard ball if necessary to achieve their purpose in the course of the attempted armed robbery, the knives or billiard ball would be used to threaten or intimidate the victims. I realise that sounds very similar to the concept of joint enterprise in relation to common law murder, but it is different in that it is not necessary that any of the accused had an intention to cause death, or to cause grievous bodily harm, or contemplated as part of the joint enterprise the possibility that the use of the knives could result in an intentional inflicting of grievous bodily harm. That is the difference between them." (emphasis added) That aspect of the directions was not challenged on appeal and there was no suggestion in Arulthilakan (or in this appeal) that it was deficient. Subject to one qualification, the cases decided in New South Wales about the application of s 18(1)(a) are consistent with the conclusions expressed earlier in these reasons. As already noted, Grand251, decided in 1903, was not a constructive murder case. It was a common purpose case where the agreement extended to "resist[ing] at all hazards any interference with [the parties to the agreement] in the execution of their purpose"252. The acts done in furtherance of committing the agreed offence were attributable to both participants; the acts would be "the act of the accused" for both participants under the first category of murder in s 18(1)(a). Sharah253 was a constructive murder case. During the course of an armed robbery with wounding, an offender killed a person and wounded another person. Mr Sharah was charged as an accomplice to the armed robbery with wounding 249 (2003) 78 ALJR 257; 203 ALR 259; [2003] HCA 74. 250 Arulthilakan (2003) 78 ALJR 257 at 260-261 [16]; 203 ALR 259 at 263. 251 (1903) 3 SR (NSW) 216. 252 Grand (1903) 3 SR (NSW) 216 at 217. 253 (1992) 30 NSWLR 292. and with both categories of murder. In relation to Mr Sharah's culpability for the foundational offence of armed robbery with wounding, the Court of Criminal Appeal said that the prosecution had to prove that: (1) there was a common purpose between Mr Sharah and his co-offender in company to rob while his co-offender was, to Mr Sharah's knowledge, armed with an offensive weapon; (2) during the course of the armed robbery, the co-offender wounded the victim of the armed robbery; and (3) Mr Sharah contemplated that, in carrying out the common unlawful purpose of armed robbery, such wounding might occur254. In relation to what the prosecution had to establish for constructive murder in Sharah, the Court held that the prosecution had to prove that: (1) there was a common purpose between Mr Sharah and his co-offender in company to rob while his co-offender was, to Mr Sharah's knowledge, armed with an offensive weapon; (2) during the course of the armed robbery, the co-offender wounded the victim of the armed robbery, and, during the course of such armed robbery with wounding or immediately thereafter, the co-offender discharged the weapon causing the death of another person; and (3) Mr Sharah had in mind the contingency that his co-offender would discharge the weapon during or immediately after the armed robbery with wounding, whether or not the weapon was fired intentionally and whether or not in furtherance of the common unlawful purpose255. As is apparent, the Court imported a third element – an additional limited mental or fault element – for constructive murder in the case of Mr Sharah, an accomplice. As the New South Wales Law Reform Commission noted256: "The historical basis for [the third element] is unclear. It may be that it was thought appropriate to draw, by analogy, on the approach that had been developed, in relation to joint criminal enterprise liability; or perhaps, that the case was seen as one to which that form of liability applied." Sharah has been followed in New South Wales257 but it should not be: to the extent that it is authority for the proposition that it is necessary to establish 254 (1992) 30 NSWLR 292 at 297-298. 255 Sharah (1992) 30 NSWLR 292 at 297. 256 See New South Wales Law Reform Commission, Complicity, Report 129, (2010) at 149 [5.38]. See also Batcheldor (2014) 249 A Crim R 461 at 475 [79], 257 See R v Spathis [2001] NSWCCA 476 at [233], [312]-[315], [443]. See also Foster (1995) 78 A Crim R 517 at 519-520. the third element for the purpose of constructive murder, it is wrong. There is no foundation for the inclusion of that element. As the New South Wales Law Reform Commission correctly noted, until Sharah the constructive murder limb of s 18(1)(a) had, in relation to both the principal and the accomplice, required only that the act or omission causing death be connected (in the sense already explained) with the acts forming part of the foundational offence258. If the parties have agreed to commit the foundational offence, neither felony murder at common law nor constructive murder under s 18(1)(a) required or requires any additional foresight or contemplation on the part of the accomplice. Malice In this case, the Court of Criminal Appeal allowed the Crown's appeal and quashed the directed verdicts of acquittal on counts 2a and 2b. In considering whether to exercise its discretion not to order a new trial, the Court of Criminal Appeal considered a contention that a new trial on the count of murder (count 2a) should not be ordered because the Crown could not prove that the act causing death was done maliciously as required by s 18(2)(a)259. The Court of Criminal Appeal concluded that the lighting of the ring burner during the commission of the foundational offence was malicious within the meaning of s 18(2)(a)260; in addition, it could properly be regarded as reckless within the meaning of s 5 of the Crimes Act with the consequence that it could be taken to have been done maliciously even if it was not otherwise done with malice261. As I am in dissent in this appeal, it is sufficient if I set out my conclusions as follows. First, s 18(1) did not depart from the common law, except for altering the type of felony necessary for felony murder. Section 18(1) was a statutory reformulation of the element of malice in the crime of murder262; it "replaced the common law concept of malice aforethought with a list of matters that would previously have established malice aforethought"263. 258 New South Wales Law Reform Commission, Complicity, Report 129, (2010) at 259 R v IL [2016] NSWCCA 51 at [75]. 260 R v IL [2016] NSWCCA 51 at [98]-[102]. 261 R v IL [2016] NSWCCA 51 at [91]-[97]. 262 See R v Lavender (2005) 222 CLR 67 at 78 [26]; [2005] HCA 37. 263 Aubrey v The Queen (2017) 91 ALJR 601 at 614-615 [46]; [2017] HCA 18. See also Lavender (2005) 222 CLR 67 at 78 [25]-[26]. Second, for constructive murder, once the mental element for the foundational offence is established to the requisite standard, malice is also established264. As Toohey and Gaudron JJ said in Royall v The Queen, "in the case of the murder-felony rule, the commission of the felony satisfies any requirement of malice"265. That is, for the purposes of constructive murder, s 18(2)(a) will be satisfied by proof of the foundational offence. As the plurality in R v Lavender stated266, the effect of s 18(1)(a) is that certain forms of punishable homicide are taken to be murder and thereby satisfy s 18(2)(a). If the act is not one of those in s 18(1)(a), then it is manslaughter. Manslaughter The second count charged IL with the alternative charge of manslaughter on the basis that the death of Mr Lan was caused by an unlawful and dangerous act – the lighting of the ring burner. On the analysis of the constructive murder limb of s 18(1)(a) explained in these reasons, the alternative charge of manslaughter was unnecessary in the circumstances of this case. It was unnecessary because the act relied upon was done in the course of committing an offence capable of being a foundational offence for a constructive murder charge, and the act was done by one of the parties to the joint criminal enterprise to commit that offence. That is not to say that an alternative verdict of manslaughter will never be available in a case based on constructive murder267. For example, "[t]here may be an issue of fact to be resolved by the jury as to whether the act causing death occurred immediately after the commission of the foundational offence, or whether such act was too remote in time. If the jury were not satisfied that the relevant act occurred sufficiently proximately to the commission of the foundational offence, it would, nevertheless, be open to them in an appropriate case, to convict the accused of manslaughter on the basis that the act which caused death was an unlawful and dangerous act"268. And, of course, if the 264 Mraz v The Queen (1955) 93 CLR 493 at 505, 513; [1955] HCA 59; Ryan (1967) 121 CLR 205 at 224, 230-231, 235; Van Beelen (1973) 4 SASR 353 at 402. 265 (1991) 172 CLR 378 at 428; [1991] HCA 27 citing Mraz (1955) 93 CLR 493. 266 (2005) 222 CLR 67 at 79 [30]. 267 cf R v Hitchins [1983] 3 NSWLR 318 at 324; Foster (1995) 78 A Crim R 517 at 268 Spathis [2001] NSWCCA 476 at [248]. offence the subject of the joint criminal enterprise cannot be a foundational offence, manslaughter may be the only option available to the Crown. As the plurality said in Lavender269, s 18 defines murder; it does not define manslaughter. It provides that murder is punishable homicide when it involves one of the elements in s 18(1)(a)270. Or, put differently, the section refers to manslaughter but only in excluding from the category of murder any form of punishable homicide "which does not satisfy s 18(1)(a)"271. In any application of s 18, there must be a death. The section then asks whether a person is criminally responsible for that death and, if so, which classification of responsibility (if any) attaches to that death. There are several paths to criminal responsibility. As the section states, it is murder when it involves one of the elements in s 18(1)(a)272 – the positive definition of murder, divisible into the two categories explained earlier. If the person is not criminally liable for the offence of murder by one of the several paths provided for by s 18(1)(a), then the section directs the reader to determine whether the person is criminally responsible for the death in manslaughter273 – the negative definition of murder. As the plurality said in Lavender, the reader must go to the common law of manslaughter to answer that question274. Constructive murder – the second category of murder – sits uncomfortably within that structure because a person can be found guilty of murder even if the person has not intended to kill or inflict grievous bodily harm or has not acted with reckless indifference to human life. Further, in conjunction with the principles of joint criminal enterprise, constructive murder can operate where the person has not applied the fatal force. But observing that a person can be held criminally responsible for murder even though they did not have the requisite state of mind for murder in the first category, and did not apply the fatal force, does not create a unique legal conundrum. The same consequence follows from 269 (2005) 222 CLR 67 at 79 [30]. 270 Lavender (2005) 222 CLR 67 at 78 [26], 79 [30]. 271 Lavender (2005) 222 CLR 67 at 79 [30]; see also at 81 [34]. 272 Lavender (2005) 222 CLR 67 at 78 [26], 79 [30]. 273 Lavender (2005) 222 CLR 67 at 79 [30]. 274 (2005) 222 CLR 67 at 79 [30]. the application of the principles of extended joint criminal enterprise to the first category of murder275. Order For those reasons, I would dismiss the appeal. 275 See, eg, McAuliffe v The Queen (1995) 183 CLR 108; [1995] HCA 37.

HIGH COURT OF AUSTRALIA APPELLANT AND THE QUEEN RESPONDENT Douglass v The Queen [2012] HCA 34 Date of Order: 16 August 2012 Date of Publication of Reasons: 11 September 2012 ORDER Appeal allowed. Set aside the order of the Court of Criminal Appeal of the Supreme Court of South Australia made on 3 December 2010 and in its place order: appeal allowed; conviction and sentence quashed; and direct the entry of a verdict of acquittal. On appeal from the Supreme Court of South Australia Representation M E Shaw QC with B J Doyle for the appellant (instructed by Patsouris & Associates) M G Hinton QC, Solicitor-General for the State of South Australia with A F Cairney and J Litster for the respondent (instructed by Director of Public Prosecutions (SA)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Douglass v The Queen Criminal law – Evidence – Trial by judge alone – Appellant convicted of aggravated indecent assault of granddaughter ("CD") – CD aged three years at time of alleged offence – Appellant gave sworn evidence denying offence – CD's unsworn statement only evidence of offence – Trial judge did not record any finding respecting appellant's evidence – Whether reasons sufficient to make clear appellant's evidence rejected beyond reasonable doubt – Whether CD's evidence reliable – Whether evidence sufficient to prove offence beyond reasonable doubt. FRENCH CJ, HAYNE, CRENNAN, KIEFEL AND BELL JJ. After a trial before a judge alone in the District Court of South Australia (Barrett DCJ) the appellant was convicted of the aggravated indecent assault1 of his granddaughter, CD, a child aged three years. He was alleged to have persuaded CD to hold his penis on an occasion when the two were alone in a shed. The only evidence of the offence came from CD. It comprised statements made by her in an interview with a psychologist employed by the Child Protection Agency ("the interview") and her unsworn answers in cross- examination at the trial. The offence was alleged to have occurred on or about 23 October 2008, one week before CD's fourth birthday. The interview took place five weeks later on 26 November 2008. The trial was held in August 2010. CD was then aged five years and nine months. Her evidence was confined to her answers to questions on four topics for which the Court had given permission for cross-examination2. The appellant gave evidence of his contact with CD on the day of the alleged offence. He denied that they had been inside a shed or that she had touched his penis. The trial judge did not in terms reject the appellant's evidence. Nonetheless, his Honour was satisfied beyond reasonable doubt that on or about 23 October the appellant had contrived to have CD touch his penis around the time he urinated in a shed. His Honour was not able to identify the shed in which the offence occurred since, as will appear, CD had given inconsistent accounts in this respect. On 10 November 2010, the appellant was sentenced to a term of three years' imprisonment, with a non-parole period of 18 months. The Court of Criminal Appeal of the Supreme Court of South Australia (Doyle CJ, Anderson and David JJ) dismissed the appellant's appeal against his conviction3. On 11 May 2012, Crennan and Bell JJ granted the appellant special leave to appeal from the order of the Court of Criminal Appeal. The appeal was heard before the Full Court on 16 August 2012. At the conclusion of the hearing, the 1 Criminal Law Consolidation Act 1935 (SA), s 56(1). 2 Evidence Act 1929 (SA), s 34CA. 3 R v Douglass [2010] SASCFC 66. Hayne Crennan Bell Court made orders allowing the appeal, setting aside the order of the Court of Criminal Appeal made on 3 December 2010 and in its place allowing the appeal to that Court, quashing the appellant's conviction and sentence and directing the entry of a verdict of acquittal. Our reasons for joining in the making of those orders are set out below. The first ground – sufficiency of the reasons The appellant's primary challenge was to the sufficiency of the judge's reasons for the verdict. He complained that the judge had arrived at a conclusion of guilt without rejecting his sworn denial of the offence. The material discussion is contained in the concluding three paragraphs of the judgment: "I warn myself of the caution I must take in determining whether to accept CD's unsworn evidence and the weight to be given to it. I bear in mind as well that the accused has given sworn evidence denying the allegations. Further, I do not find anything in his demeanour that assists the prosecution. While bearing all these matters in mind, I am satisfied beyond reasonable doubt that the accused contrived to have CD touch his penis during or about the time he urinated in a shed. I am unsure of which shed. I find the incident occurred on or about 23 October ..." In South Australia, s 7 of the Juries Act 1927 (SA)4 provides for the trial of an accused on an information presented in the Supreme or District Court by a 4 Section 7 relevantly provides: Subject to this section, where, in a criminal trial before the Supreme Court or the District Court – the accused elects, in accordance with the rules of court, to be tried by the judge alone; and the presiding judge is satisfied that the accused, before making the election, sought and received advice in relation to the election from a legal practitioner, the trial will proceed without a jury. (Footnote continues on next page) Hayne Crennan Bell judge alone. Unlike the statutory provisions governing trial by judge alone considered in Fleming v The Queen5 and AK v Western Australia6, the South Australian statute does not specify requirements for the contents of the reasons for judgment. However, it was common ground on the appeal that a judge returning a verdict following a trial without a jury is obliged to give reasons sufficient to identify the principles of law applied by the judge and the main factual findings on which the judge relied7. The appellant submitted that discharge of that obligation required that the judge give some explanation of why he had excluded the appellant's evidence as not reasonably possibly true. The first ground – the Court of Criminal Appeal The same challenge was advanced in the Court of Criminal Appeal8. The Court said that following a trial by judge alone, a judge should state findings on the main grounds on which the verdict rests and the judge should usually give reasons for making those findings9. However, when a finding or the resolution of a case turns on credibility, the Court said that it may be enough for the judge to state that he or she believes one witness in preference to another10. This was a If a criminal trial proceeds without a jury under this section, the judge may make any decision that could have been made by a jury and such a decision will, for all purposes, have the same effect as a verdict of a jury." (1998) 197 CLR 250; [1998] HCA 68, considering the Criminal Procedure Act 1986 (NSW), s 33(2). (2008) 232 CLR 438; [2008] HCA 8, considering the Criminal Procedure Act 2004 (WA), s 120(2). 7 See AK v Western Australia (2008) 232 CLR 438 at 480-481 [107] per Heydon J. 8 R v Douglass [2010] SASCFC 66 at [2]. 9 R v Douglass [2010] SASCFC 66 at [46]. 10 R v Douglass [2010] SASCFC 66 at [47]. Hayne Crennan Bell reference to the statement of McHugh JA in Soulemezis v Dudley (Holdings) Pty Ltd11: "Where the resolution of the case depends entirely on credibility, it is probably enough that the judge has said that he believed one witness in preference to another; it is not necessary 'for him to go further and say, for example, that the reason was based on demeanour': Connell v Auckland City Council [1977] 1 NZLR 630 at 632-633 per Chilwell J." (emphasis in original) The Court of Criminal Appeal characterised the appellant's trial as a case of "word against word"; observing that it had been for the trial judge to assess the credibility and reliability of the evidence of CD and the appellant. It said12: "The fact that there was no inherent weakness in the evidence given by [the appellant], and the fact that there was nothing in his demeanour that led the Judge to reject his evidence, do not mean that the Judge was not entitled to do so." And13: "Having considered the evidence as a whole, and being satisfied of the truth and reliability of [CD's] evidence, the Judge necessarily rejected the denials by [the appellant]." The first ground – consideration The Court of Criminal Appeal's reliance on McHugh JA's statements in Soulemezis was misplaced. Soulemezis concerned the sufficiency of the reasons of a judge of the Compensation Court of New South Wales in a proceeding in which the right of appeal was confined to a question of law or in relation to the admission or rejection of evidence. It was an error to view the appellant's trial as reducing to a case of "word against word". It is a characterisation which fails to recognise that the resolution of a criminal case does not depend on whether the evidence of one witness is preferred to that of another. The resolution of a 11 (1987) 10 NSWLR 247 at 280. 12 R v Douglass [2010] SASCFC 66 at [63]. 13 R v Douglass [2010] SASCFC 66 at [64]. Hayne Crennan Bell criminal trial depends upon whether the evidence taken as a whole proves the elements of the offence beyond reasonable doubt. The point is made by Gummow and Hayne JJ in Murray v The Queen14: "The choice for the jury was not to prefer one version of events over another. The question was whether the prosecution had proved the relevant elements of the offence beyond reasonable doubt. This required no comparison between alternatives other than being persuaded and not being persuaded beyond reasonable doubt of the guilt of the appellant." To dismiss the appellant's complaint respecting the sufficiency of the reasons on the footing that the judge's acceptance of CD's evidence necessarily carried with it rejection of his evidence was to overlook that the judge's acceptance of CD as truthful was not inconsistent with the existence of a reasonable doubt as to guilt. Even if the judge was not persuaded by the appellant's evidence, he could not convict unless satisfied that it was not reasonably possibly true15. In R v Keyte, Doyle CJ explained why a judge is required to give reasons for the judge's verdict following a trial under s 7 of the Juries Act 1927 (SA)16. These included that in the absence of reasons, the appellate court is unable to determine whether the judge has correctly applied the relevant rules of law. In this case, the failure to record any finding respecting the appellant's evidence left as one possibility that the judge simply preferred CD's evidence and proceeded to convict upon it applying a standard less than proof beyond reasonable doubt. The absence of reasons sufficient to exclude that possibility constituted legal error. It is unnecessary to address the consequence of that error in circumstances in which, as will appear, the appellant's second ground must succeed. The second ground – the sufficiency of the evidence In its discussion of the appellant's challenge to the sufficiency of the trial judge's reasons, the Court of Criminal Appeal said that the judge had adequately explained why he found CD "to be credible and reliable."17 The judge's finding 14 (2002) 211 CLR 193 at 213 [57]; [2002] HCA 26. 15 Liberato v The Queen (1985) 159 CLR 507 at 515 per Brennan J; [1985] HCA 66. 16 (2000) 78 SASR 68 at 76. 17 R v Douglass [2010] SASCFC 66 at [64]. Hayne Crennan Bell was of satisfaction "beyond reasonable doubt of the truthfulness of CD's evidence" (emphasis added). Nowhere did the judge address the distinct question of the reliability of CD's evidence in the sense of its capacity to establish the commission of the offence to the criminal standard. That question is the subject of the appellant's second ground, which contends that the verdict cannot be supported by the evidence18. Success on this ground requires that the appellant's conviction be quashed and a verdict of acquittal be entered 19. The evidence of young children Before referring to the evidence it is convenient to say something about the reception of the evidence of young children under the Evidence Act 1929 (SA) ("the Evidence Act"). A "young child" is a child of or under the age of 12 years20. A young child is a "protected witness" for the purposes of s 34CA of the Evidence Act. That section permits the court to admit evidence of the nature and contents of a statement made outside the court by a "protected witness" to prove the truth of the facts asserted in the statement21. Reception of an 18 Criminal Law Consolidation Act 1935 (SA), s 353(1). 19 M v The Queen (1994) 181 CLR 487; [1994] HCA 63; MFA v The Queen (2002) 213 CLR 606 at 618 [38] per McHugh, Gummow and Kirby JJ; [2002] HCA 53. 20 Evidence Act, s 4, definition of "young child". 21 Section 34CA relevantly provides: A court may admit evidence of the nature and contents of a statement made outside the court by a protected witness from the person to whom the statement was made if – the court, having regard to the circumstances in which the statement was made and any other relevant factors, is satisfied that the statement has sufficient probative value to justify its admission; and the protected witness has been called, or is available to be called, as a witness in the proceedings; and (Footnote continues on next page) Hayne Crennan Bell out-of-court statement under s 34CA is subject to the court's satisfaction that the statement has sufficient probative value to justify its admission and the availability of the protected witness to be called as a witness in the proceeding22. CD's statements made in the interview were received under s 34CA as evidence of the truth of the facts asserted therein. Senior counsel for the appellant objected to their admission at trial, submitting that they lacked sufficient probative value to justify admission. Following a voir dire examination, the trial judge ruled that CD's statements possessed sufficient probative value to justify admission (subject to an inquiry into CD's capacity to give unsworn evidence). A court may only give permission to allow a protected witness to be cross- examined on matters arising from evidence admitted under s 34CA if satisfied that the cross-examination is likely to elicit material of substantial probative value or material that would substantially reduce the credibility of the evidence 23. the court gives permission for the protected witness to be cross-examined on matters arising from the evidence. A court may only give permission to allow a protected witness to be cross-examined on such matters if satisfied that the cross- examination is likely to elicit material of substantial probative value or material that would substantially reduce the credibility of the evidence. Evidence that is admitted in a trial under this section of the nature and contents of a statement made outside the court by a protected witness may be used to prove the truth of the facts asserted in the statement. In a criminal trial, the judge must, if evidence of the nature and contents of a statement made outside the court by a protected witness has been admitted but the protected person has not, for some reason, been cross-examined on matters arising from the evidence, warn the jury that the evidence should be scrutinised with particular care because it has not been tested in the usual way." 22 Evidence Act, s 34CA(1). 23 Evidence Act, s 34CA(2). Hayne Crennan Bell The Court of Criminal Appeal of South Australia has remarked on the difficulties presented by the drafting of s 34CA24. No question involving the interpretation of the provision arises in the appeal. The appellant's counsel sought and obtained permission to cross-examine CD on four topics: CD's account that she had touched her older brother's penis; the relationship between CD and the appellant; the number of times CD had spoken to people about her allegation; and putting the appellant's case that "it didn't happen". A person is presumed to be capable of giving sworn evidence in any proceedings in South Australia unless the judge determines that the person does not have sufficient understanding of the obligation to be truthful entailed in giving such evidence25. As earlier noted, CD was not yet six years old at the date of the trial. The judge did not embark on an inquiry of the sufficiency of her understanding of the obligation entailed in giving sworn evidence. His Honour proceeded directly to the consideration of whether the requirements for the admission of unsworn evidence were satisfied. Section 9(2) of the Evidence Act provides: "If the judge determines that a person does not have sufficient understanding of the obligation to be truthful entailed in giving sworn evidence, the judge may permit the person to give unsworn evidence provided that – the judge – is satisfied that the person understands the difference between the truth and a lie; and tells the person that it is important to tell the truth; and the person indicates that he or she will tell the truth." 24 R v J, JA (2009) 105 SASR 563 at 575 [56]-[59] per Duggan J, 593 [154] per Nyland J and 598 [176]-[180] per White J; R v Byerley (Question of Law Reserved No 1 of 2010) (2010) 107 SASR 517 at 524 [18] per Doyle CJ. 25 Evidence Act, s 9(1). Hayne Crennan Bell At the commencement of the s 9(2) inquiry it was ascertained that there were two other persons in the remote location from which CD gave her evidence. The judge asked CD the following questions and obtained the following replies: If I were to say there were two people in the room with you, would that be the truth or would that be a lie. Truth. If I were to say there were 50 people in that room with you, would that be the truth or would that be a lie. A. A lie." The judge impressed on CD the need for people to tell the truth in court and she agreed that she would do so. His Honour was satisfied that the conditions of s 9(2) were met and CD was permitted to give unsworn evidence. The evidence – CD's complaint In summarising the evidence at the trial it is convenient to commence with an account of how CD's allegation came to light. CD's parents were separated at the time of these events. On 27 October 2008, CD and her older brother, MD, were staying with their father, TD. It was about a week before CD's fourth birthday. Both the children were in TD's bedroom when CD asked "Do you have a beautiful penis, daddy?". TD had never heard CD use the word "penis" before and he was shocked by her question. The following day a further incident occurred. TD had taken CD with him to visit the home of a friend. During the course of the visit, TD urinated in the backyard of his friend's house. CD asked, "Did you just do wees, daddy?", TD said that he had, and CD volunteered "I had to hold grandpa's willy while he did wees". She said that this had happened on the weekend. CD did not understand the distinction between weekends and week days at the time. She had not stayed with the appellant on the weekend; however she had stayed with him overnight on the previous Wednesday. Hayne Crennan Bell TD's evidence of CD's statements was admitted as evidence of her "initial complaint"26. The statements were not evidence of the truth of the assertions but they were available to be used as evidence of the consistency of her conduct27. TD told CD's mother, LD, of CD's complaint. LD confronted the appellant, her father, with the allegation. The appellant denied it. LD said that TD was going to report the matter to the police, to which the appellant replied "Let him". LD gave evidence of statements made by CD, which were received by way of elaboration of her initial complaint28. LD had spoken with CD on 31 October 2008 and asked her about "what they did at [CD's] grandparents". This inquiry led to CD saying that the appellant had told her to "hold his willy". On a subsequent occasion, CD told her mother that the offence occurred while the appellant was urinating on the tyre of a tractor in the tractor shed. The contents of CD's statements to LD were not received to prove the truth of the assertions. Those statements, too, were received as bearing on the consistency of CD's conduct. The interview The evidence relied upon by the Crown to establish the offence was the answers that CD gave during the interview. After some initial questions, the interview with the psychologist, L, proceeded as follows: "L Has someone ever asked you to touch their willy? [CD] … I touched [m]y brother's. L You touched your brother's did you. And what happened? [CD] … I told to MD to pee in the bucket. 26 Evidence Act, s 34M(3). 27 Evidence Act, s 34M(4). 28 Evidence Act, s 34M(6). Hayne Crennan Bell L Did you? And he did. Oh Okay. And what about anybody else. Did someone ask you to touch their willy? [CD] No. L Or do anything to their willy? [CD] No. L Or. Some people call this a penis. Did you know that? That's the proper word for it isn't it. [CD] Yes. L Has anyone asked you to touch their penis? [CD] No. L Are you sure? [CD] No. L Yeah? Okay. I was just was talking with mum about all that sort of stuff before. L If somebody did ask you to hold or touch their penis. [CD] I touched on my grandpa's. L O did you? You touched your grandpa's? Oh, tell me about that. What happened? [CD] I don't know. L Oh, okay. Well do you know what. I wasn't there and you were there. So what if I try and figure out what happened and you help me. Okay? [CD] Yes. L Alright. So where were you when that happened? Hayne Crennan Bell [CD] In the shed. L You were at the shed, were you? At whose house? [CD] His shed. L His shed, yeah, and what were you do[i]ng in the shed? [CD] Holding his willy. L Holding his willy. Ohm, and how did that happen, like? [CD] He told me. L Yeah, and then what, he said, what did he say to you? [CD] He just said I said to him I didn't want to. L Oh did you? Good. That was good. And then what happened? [CD] Mmm, I holded his willy again. L Did you? Even though you said you didn't want to? [CD] Yes, L Yeah. That was a bit rough wasn't it. [CD] Yeah." The interviewer asked CD what the appellant's "willy" looked like and CD replied that it looked like MD's "willy". At the time, MD was six years old. The only other details of the offence provided by CD in the interview were that the appellant was wearing pants and a singlet and that his "wee" was yellow. The cross-examination of CD The cross-examination of CD commenced with some "settling questions". CD's answers to these questions may be thought to illustrate one difficulty in making an assessment of the reliability of her account given in the earlier interview: "Q Do you know your great-nanna. Hayne Crennan Bell A Not anymore. Q Not anymore. When did you last see great-nanna. A A long time ago. Q Do you remember the last time you saw her. A No. Q You don't or you do. A Don't." The last occasion on which CD had seen her great-grandmother was the date of the alleged offence. In the course of cross-examination, counsel put to CD an account of the events of 23 October 2008, with which she appeared to agree, variously responding "Mm", "Yes" or "Yep". In summary, that account was that CD had gone shopping with her grandmother in the morning and bought some doughnuts. In the afternoon she and the appellant rode on a motorbike to visit her great- grandmother. Afterwards, they dug a hole in a sheep paddock and CD lined up some rocks. CD did not volunteer that the outing included a visit to a shed or that she had held the appellant's penis. Nor was it suggested to her that any such incident had occurred. The only information that CD supplied concerning the events of the afternoon was that they had buried the rocks. While CD agreed with the proposition that on her return from the outing she had told her grandmother that she had played with the dog, Lucky, other of her answers suggested that she had no memory that her great-grandmother had a dog called Lucky or of playing with Lucky that day. CD had been shown a recording of her interview not long before she gave evidence. Counsel asked CD if she remembered the lady interviewer asking her about her brother, MD. The cross-examination continued: "Q did that lady ask you this 'Has someone ever asked you to touch their willy?' and you said 'I touched my brother's'. A Yes. Hayne Crennan Bell Q When did you touch your brother's willy. A After a long time ago. Q Where were you when you touched his willy. A Toilet. Q In the toilet. Was he having a pee. A Yes. Q And while he was having a pee you touched his willy, did you. Is that because he asked you to touch his willy. A Yes." Counsel put to CD that she had "never touched [the appellant's] willy". CD maintained that she had. She said that she had touched MD's "willy" and the appellant's "willy". She had talked to her mother and father about these matters on 10 occasions. The scene of the offence It will be recalled that CD told her mother that the appellant had urinated on the tyre of a tractor on the occasion of the offence. The appellant and his de facto wife, CD's grandmother, were living on a property at Lenswood at the time of these events. The appellant's mother, CD's great-grandmother, was living on a neighbouring property. There were two sheds on the great-grandmother's property: a wood shed and a tractor shed. There were three sheds on the appellant's property but none housed a tractor. On 1 November 2009, Detective Kelly, who was investigating the matter, asked LD why she believed that the offence had occurred in the tractor shed. Detective Kelly permitted LD to show CD a plan with a view to inviting her to identify the shed in which the offence had taken place. For reasons that are unexplained, CD was not shown a plan of the appellant's property but only a plan of the great-grandmother's property. It appears that CD identified the wood shed on the great-grandmother's property as the scene of the offence. Hayne Crennan Bell The defence case They had the afternoon. left home at 2.30pm The appellant gave evidence of the last occasion on which CD had stayed with him and his wife. He said that he had been alone with CD for a period during the great-grandmother. He was in the habit of visiting her every afternoon at 3.00pm. They left early on this occasion because the appellant had to fix a broken pipe in the sheep paddock. He had dug a hole and glued a new piece onto the pipe. While he did this, CD lined up rocks beside the hole. They rode on a quad bike to the great-grandmother's house. They spent about 30 minutes there, during which CD ate some of her doughnut. Then they returned to the appellant's property. The appellant's wife was at home. The appellant denied that he and CD had been inside a shed or that he had urinated in CD's presence. He said that CD had never touched his penis. to visit The appellant's wife gave evidence in the defence case. She recalled the appellant taking CD to see his mother on the day he fixed the broken pipe. She had packed a doughnut for CD to take on the trip. On their return, CD was happy and excited. She had given an account of playing with Lucky at her great-grandmother's house and of digging a hole with the appellant. The appellant's wife saw nothing in CD's demeanour to cause her concern. The trial judge appears to have accepted the appellant's wife as a truthful witness. The Court of Criminal Appeal observed that the wife's evidence supported the appellant in a general way but that it did not exclude that the appellant had the opportunity to commit the offence29. As the Court commented, evidence of CD's normal behaviour on her return did not assume significance given that there was nothing to suggest that she would have been upset if the offence had occurred. The trial judge's assessment of CD's evidence The trial judge gave reasons for accepting that CD was truthful when she said that the appellant had contrived to have her touch or hold his penis while urinating. Her allegation was of an "unusual event", one his Honour considered unlikely that a three year old would make up. Her complaint to her father was "completely spontaneous", and her reports to her mother by way of elaboration of the complaint were "important bolsters" to her credibility. Another reason for 29 R v Douglass [2010] SASCFC 66 at [54]. Hayne Crennan Bell accepting CD as a truthful witness was the firmness with which she had maintained her allegation in cross-examination. The judge noted that when the topic of touching a penis was first raised in the interview, CD volunteered that she had touched MD's penis. Thereafter, on three occasions, she denied touching anyone else's penis, before saying that she had touched the appellant's penis. That allegation only emerged after the interviewer said that she, the interviewer, had spoken to CD's mother "about all that sort of stuff". The judge said that if an adult or older child had responded in the interview in the way that CD had, it would have cast "serious doubt" on the occurrence of the incident. He considered that CD's inability to provide details of her allegation would add to the doubts about its occurrence had she been an adult or older child. However, CD's initial denials and lack of detail did not diminish her credit. Nor was the inconsistency in CD's account of the location of the offence a matter of significance. The second ground – the Court of Criminal Appeal When it came to deal with the appellant's second ground the Court of Criminal Appeal applied the test formulated in the joint reasons in M v The Queen30: "Where, notwithstanding that as a matter of law there is evidence to sustain a verdict, a court of criminal appeal is asked to conclude that the verdict is unsafe or unsatisfactory, the question which the court must ask itself is whether it thinks that upon the whole of the evidence it was open to the jury to be satisfied beyond reasonable doubt that the accused was guilty. But in answering that question the court must not disregard or discount either the consideration that the jury is the body entrusted with the primary responsibility of determining guilt or innocence, or the consideration that the jury has had the benefit of having seen and heard the witnesses. On the contrary, the court must pay full regard to those considerations." (footnotes omitted) The Court of Criminal Appeal agreed with the trial judge that CD's initial denials and the inconsistencies between her statements in the interview and on later occasions were explicable on the basis of CD's young age. However, the 30 (1994) 181 CLR 487 at 493 per Mason CJ, Deane, Dawson and Toohey JJ, cited in R v Douglass [2010] SASCFC 66 at [37]. Hayne Crennan Bell Court was not prepared to place the same weight on the two factors on which the trial judge relied for his finding that CD was truthful. Doyle CJ, who gave the leading judgment, was not confident that the allegation was one a three year old child was unlikely to make up. Nor was Doyle CJ confident that he would have given as much weight to CD's firmness in cross-examination as the trial judge had done31. Nonetheless, Doyle CJ considered that it had been open to the trial judge to accept CD's account and to rely on it to reach a finding of guilt32. In reaching that conclusion, Doyle CJ said this33: "One cannot simply say that because [CD] was a three year old one could discard any difficulties with her evidence, accepting and acting on her evidence of the alleged offence. But equally one cannot say that [CD's] evidence should be assessed in the same way as one would assess the evidence of an adult. Nor could one say that [CD's] evidence was inherently unreliable because of her age. However, having regard to [CD's] age, it was open to the Judge to decide that she was truthful and reliable during the interview by the psychologist, which became her evidence, despite the problems with that evidence that [the appellant's counsel] identified." The respondent's submissions The respondent embraced the Court of Criminal Appeal's reasons respecting the assessment of CD's evidence. In written submissions, the respondent referred to a body of research dealing with the capacity of children to give reliable evidence34 and to the enactment of s 12A of the Evidence Act35. 31 R v Douglass [2010] SASCFC 66 at [52]. 32 R v Douglass [2010] SASCFC 66 at [57]. 33 R v Douglass [2010] SASCFC 66 at [52]. 34 Baker-Ward and Ornstein, "Cognitive Underpinnings of Children's Testimony", in Westcott et al (eds), Children's Testimony: A Handbook of Psychological Research and Forensic Practice, (2002) 21; Bruck et al, "Disclosure of Child Sexual Abuse: What Does the Research Tell Us About the Ways That Children Tell?", (2005) 11 Psychology, Public Policy and Law 194; Fivush, "The Development of Autobiographical Memory", in Westcott et al (eds), Children's Testimony: A Handbook of Psychological Research and Forensic Practice, (2002) 55; Layton, "The Child and the Trial", in Gray et al (eds), Essays in Advocacy, (2012) 201; Oates, "Problems and prejudices for the sexually abused child", (2007) 81 (Footnote continues on next page) Hayne Crennan Bell The latter provision precludes the giving of a warning that it is unsafe to convict on a child's uncorroborated evidence unless, in the circumstances of the case, there are cogent reasons, apart from the fact that the witness is a child, to doubt the reliability of that evidence. No question of the giving of a warning under s 12A (or of the relationship between s 12A and s 9(4)36) of the Evidence Act Australian Law Journal 313; Pezdek and Hinz, "The Construction of False Events in Memory", in Westcott et al (eds), Children's Testimony: A Handbook of Psychological Research and Forensic Practice, (2002) 99; Powell and Thomson, "Children's Memories for Repeated Events", in Westcott et al (eds), Children's Testimony: A Handbook of Psychological Research and Forensic Practice, (2002) 69; The Australasian Institute of Judicial Administration Incorporated, Bench Book for Children Giving Evidence in Australian Courts, (2010) at 22-50; Westcott, "Child witness testimony: what do we know and where are we going?", (2006) 18 Child and Family Law Quarterly 175. 35 Section 12A provides: In a criminal trial, a judge must not warn the jury that it is unsafe to convict on a child's uncorroborated evidence unless – the warning is warranted because there are, in the circumstances of the particular case, cogent reasons, apart from the fact that the witness is a child, to doubt the reliability of the child's evidence; and a party asks that the warning be given. In giving any such warning, the judge is not to make any suggestion that the evidence of children is inherently less credible or reliable, or requires more careful scrutiny, than the evidence of adults." 36 Section 9(4) of the Evidence Act provides: "If unsworn evidence is given under this section in a criminal trial, the judge must explain to the jury the reason the evidence is unsworn; and (Footnote continues on next page) Hayne Crennan Bell arises. The respondent's invocation of s 12A was because its enactment was said to reflect "contemporary understanding of a child's capacity to give truthful and reliable evidence". Contrary to the tenor of that submission, the evident intention of the provision is that child witnesses are not to be treated as a class. The issue raised by the appeal is not resolved by recourse to the results of studies concerning the capacity of children generally to give truthful and reliable evidence. In question in the circumstances of this trial is the sufficiency of CD's evidence to support a conclusion beyond reasonable doubt that the offence charged in the Information occurred. The second ground – consideration The Court of Criminal Appeal was right to question the cogency of the reasons given by the trial judge for his acceptance of CD's account. First, CD said that she had touched her brother's penis at his request while he was urinating. In these circumstances it is not apparent how the trial judge drew the inference that CD's account of doing the same thing at the appellant's request was a description of an event that it was unlikely a child of her age would make up. Secondly, since it was at least possible that CD could not recall the day of the alleged offence when she gave evidence 22 months later, her firmness in cross-examination, while capable of bearing on her truthfulness, was an uncertain foundation for accepting that her account in the interview was reliable. In the passage set out earlier in these reasons, the Court of Criminal Appeal said that one could not discard any difficulties with CD's evidence simply because she was a three year old. In the same passage, the Court went on to say that having regard to CD's age it had been open to the judge to decide she was truthful and reliable despite the problems with her evidence. The Court did not explain how the two propositions were to be reconciled. How was the judge to arrive at a state of satisfaction beyond reasonable doubt of the reliability of CD's statements in the interview given that the limited detail of the allegation was supplied in response to leading questions and only after initial denials? Those statements were the only evidence of the commission of the offence. In later statements, CD gave inconsistent accounts of the scene of the offence. It is understandable that CD may have been confused when she was (b) may, and if a party so requests must, warn the jury of the need for caution in determining whether to accept the evidence and the weight to be given to it." Hayne Crennan Bell shown the plan of her great-grandmother's property and asked to identify the shed. Nonetheless, the fact that CD gave three different accounts of the scene of the offence cannot be dismissed in any assessment of her reliability as an historian. The criminal standard of proof is a designedly exacting standard. A different, lesser, standard is applied by courts dealing with contested issues involving the care and protection of children37. This was not such a proceeding. In the circumstances of this trial, it was an error for the Court of Criminal Appeal to hold that it had been open to the trial judge to be satisfied of the reliability of CD's statements in the interview and to reason from that, despite the appellant's denials, to a conclusion that his guilt had been proved beyond reasonable doubt. 37 The civil standard of proof on the balance of probabilities applies to proceedings under Pt VII Div 13A of the Family Law Act 1975 (Cth). See also Children and Young Persons (Care and Protection) Act 1998 (NSW), s 93; Child Protection Act 1999 (Q), s 105; Children's Protection Act 1993 (SA), s 45; Children, Young Persons and Their Families Act 1997 (Tas), s 63; Children, Youth and Families Act 2005 (Vic), ss 215, 551; Children and Community Services Act 2004 (WA), s 151; Children and Young People Act 2008 (ACT), s 711; Care and Protection of Children Act 2007 (NT), s 95. And see discussion in M v M (1988) 166 CLR 69 at 77; [1988] HCA 68; Re W (Sex Abuse: Standard of Proof) (2004) FLC ¶93-192.

HIGH COURT OF AUSTRALIA AND PLAINTIFF DEFENDANT [2018] HCA 11 21 March 2018 ORDER The questions referred to the Full Court under s 18 of the Judiciary Act 1903 (Cth) be amended and answered as follows: Question (1) Can and should the High Court decide in this proceeding whether the defendant was a person declared by the Constitution to be incapable of sitting as a Member of the House of Representatives for the purposes of section 3 of the Common Informers (Parliamentary Disqualifications) Act 1975 (Cth) ("Common Informers Act")? Answer Question (2) If the answer to question (1) is yes, is it the policy of the law that the High Court should not issue subpoenas in this proceeding directed to a forensic purpose of assisting the plaintiff in his attempt to demonstrate that the defendant was a person declared by the Constitution to be incapable of sitting as a Member of the House of Representatives for the purposes of section 3 of the Common Informers Act? Answer Unnecessary to answer. The plaintiff's proceeding under the Common Informers Act be stayed until the question whether the defendant is incapable of sitting is determined. Representation B W Walker SC with J E Mack for the plaintiff (instructed by Maurice Blackburn Lawyers) G O'L Reynolds SC with D P Hume for the defendant (instructed by Colin Biggers & Paisley Solicitors) S P Donaghue QC, Solicitor-General of the Commonwealth with C L Lenehan and J D Watson for the Commonwealth, (instructed by Australian Government Solicitor) the Attorney-General of intervening Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Constitutional law (Cth) – Parliamentary elections – Common informer action – Where plaintiff commenced common informer action in original jurisdiction of Informers High Court – Where (Parliamentary Disqualifications) Act 1975 (Cth) requires determination of whether defendant incapable of sitting as member of House of Representatives – Whether High Court has jurisdiction to determine eligibility of member of House of Representatives in common informer action – Proper construction of s 46 of Constitution – Proper construction of s 47 of Constitution. to penalty under Common liability Words and phrases – "common informer", "common informer action", "Court of Disputed Returns", "declared by this Constitution", "exclusive cognisance", "incapable of being chosen or of sitting", "jurisdiction", "until the Parliament otherwise provides". the Constitution", "declared by Constitution, ss 44(v), 45, 46, 47, 49. Common Informers (Parliamentary Disqualifications) Act 1975 (Cth), s 3. Commonwealth Electoral Act 1918 (Cth), s 376. KIEFEL CJ, BELL, KEANE AND EDELMAN JJ. Section 3(1) of the Common Informers (Parliamentary Disqualifications) Act 1975 (Cth) ("the Common Informers Act") provides that any person who "has sat as a senator or as a member of the House of Representatives while he or she was a person declared by the Constitution to be incapable of so sitting" is liable to pay to any person who sues for it the penalty prescribed. Section 5 of the Common Informers Act provides that original jurisdiction is conferred on the High Court in respect of actions under the Common Informers Act and no other court. On 20 July 2016 the defendant, Dr David Gillespie, was declared elected as a member of the House of Representatives. On 7 July 2017 the plaintiff, Mr Peter Alley, commenced proceedings in this Court against the defendant under the Common Informers Act claiming the imposition of penalties. In those proceedings, the plaintiff contends that the defendant was incapable of being chosen as a member of the House of Representatives and was and is incapable of sitting as a member of that House because, on about 3 September 2015, a company in which the defendant is a shareholder leased premises to Australia Post. The plaintiff claims that the lease agreement is an agreement of the kind referred to in s 44(v) of the Constitution. Section 44(v) refers to an agreement "with the Public Service of the Commonwealth" and provides that any person who has a direct or indirect pecuniary interest in such an agreement "shall be incapable of being chosen or of sitting as a senator or a member of the House of Representatives"1. The defendant has filed a defence to that claim. Whether the defendant is liable to a penalty under the Common Informers Act requires an anterior determination as to whether the defendant has been or is incapable of sitting as a member of the House of Representatives. The question whether this Court has jurisdiction to decide that question was raised in directions hearings before Bell J. In addition, the plaintiff sought notes from a Justice pursuant to r 24.02.1 of the High Court Rules 2004 (Cth) for the issue of five subpoenas. The defendant objected to the issue of those notes. Bell J ordered that the following questions be referred to the Full Court under s 18 of the Judiciary Act 1903 (Cth): "(1) Can and should the High Court decide [in this proceeding2] whether the defendant was a person declared by the Constitution to be incapable of 1 See Re Day (No 2) (2017) 91 ALJR 518; 343 ALR 181; [2017] HCA 14. 2 These words were suggested in the course of argument for clarity. It is not suggested that the Court cannot determine a question whether a person is incapable of sitting in a proceeding under the Commonwealth Electoral Act 1918 (Cth). Bell Edelman sitting as a Member of the House of Representatives for the purposes of section 3 of the [Common Informers Act]? If the answer to question (1) is yes, is it the policy of the law that the High Court should not issue subpoenas in this proceeding directed to a forensic purpose of assisting the plaintiff in his attempt to demonstrate that the defendant was a person declared by the Constitution to be incapable of sitting as a Member of the House of Representatives for the purposes of section 3 of the Common Informers Act?" It will not be necessary to answer question (2). The answer to question (1) is no. Whether the defendant is incapable of sitting as a member of the House of Representatives by reason of the Constitution is a question to be determined by that House unless it resolves to refer the matter to the Court of Disputed Returns pursuant to s 376 of the Commonwealth Electoral Act 1918 (Cth) ("the Electoral Act"). Question (1) and the plaintiff's contentions with respect to it direct attention to the provisions of Ch I Pt IV of the Constitution, in particular ss 46 and 47 and their relationship to s 44 in the scheme of that Part. Constitutional provisions The initial positive qualifications for senators and members of the House of Representatives alike, such as age and citizenship status, were stated in s 34 of the Constitution3. Section 43 provides that a member of either House of Parliament shall be incapable of being chosen or of sitting as a member of the other House. Section 44 lists five conditions, the existence of any of which will render a person "incapable of being chosen or of sitting as a senator or a member of the House of Representatives". Section 45(i) provides that if a senator or a member of the House of Representatives "becomes subject to any of the disabilities" referred to in s 44, "his place shall thereupon become vacant". Section 46 of the Constitution provides: "Until the Parliament otherwise provides, any person declared by this Constitution to be incapable of sitting as a senator or as a member of the House of Representatives shall, for every day on which he so sits, be liable to pay the sum of one hundred pounds to any person who sues for it in any court of competent jurisdiction." 3 And see now s 163 of the Commonwealth Electoral Act 1918 (Cth). Bell Edelman The Parliament has otherwise provided for the purposes of s 46 by enacting the Common Informers Act. It may be observed that s 3(1) of the Common Informers Act mirrors the requirement for liability under s 46. Section 47 of the Constitution provides: "Until the Parliament otherwise provides, any question respecting the qualification of a senator or of a member of the House of Representatives, or respecting a vacancy in either House of the Parliament, and any question of a disputed election to either House, shall be determined by the House in which the question arises." The Parliament has made other provision with respect to s 47. It first provided for a method of disputing elections or returns in the Commonwealth Electoral Act 1902 (Cth). Section 353(1), which appears in Pt XXII Div 1 of the Electoral Act, now provides that the validity of any election or return may be disputed by petition addressed to the Court of Disputed Returns and not otherwise. This Court is constituted as the Court of Disputed Returns4. The time for bringing a petition is limited to within 40 days after the return of the writ for the election in dispute or, where the choice or appointment of a person to hold the place of a senator pursuant to s 15 of the Constitution is in dispute, the notification of that choice or appointment5. No proceedings were commenced by the plaintiff under Pt XXII Div 1 with respect to the election or the return of the defendant. The process whereby either House might refer questions concerning the qualification of a senator or member of the House of Representatives or a vacancy in either House to the Court of Disputed Returns was first provided for in the Disputed Elections and Qualifications Act 1907 (Cth). It is now provided for in s 376, in Pt XXII Div 2 of the Electoral Act. Any such question may, by resolution, be referred to the Court of Disputed Returns, which shall have jurisdiction to hear and determine the question. Section 376 enables, but does not oblige, the Houses to refer such questions to the Court of Disputed Returns. The House of Representatives has not referred any question relating to the defendant's ability to sit to the Court of Disputed Returns. It has not itself determined that question. 4 Commonwealth Electoral Act 1918 (Cth), s 354(1). 5 Commonwealth Electoral Act 1918 (Cth), s 355(e). Bell Edelman It remains to mention that s 49 of the Constitution provides that the powers, privileges and immunities of the Senate and of the House of Representatives "shall be such as are declared by the Parliament", and until declared shall be those of the House of Commons of the United Kingdom Parliament at the time of Federation. The issue and contentions The liability of a person who sat as a senator or member of the House of Representatives to a penalty under the Common Informers Act depends upon the answer to the question whether that person was a person declared by the Constitution to be incapable of sitting. The issue in this matter is whether the forum for the resolution of that question is this Court or the House of Representatives. The plaintiff contends that the jurisdiction of this Court in proceedings under the Common Informers Act extends to all elements necessary to decide a person's liability to a penalty. This follows because of the nature of the question and because the words "declared by this Constitution" are referable to the exercise of judicial power. Further, the scheme of Ch I Pt IV of the Constitution contemplates courts deciding the question arising under s 46. that the words "declared by The Attorney-General submits this Constitution to be incapable of sitting" direct attention to the constitutional provisions which provide for the circumstances in which a person may be disqualified from sitting. Relevantly, s 44 provides that if a person suffers from any of the disabilities there stated, that person "shall be incapable of being chosen or of sitting as a senator or a member of the House of Representatives". Questions concerning the qualifications of a person who is a senator or member of the House of Representatives fall within one of the categories of questions in s 47. Questions of this kind fall to be determined by the House in which they arose unless the Parliament otherwise provides. Part XXII Div 2 of the Electoral Act permits either House to refer such a question to the Court of Disputed Returns, but the House of Representatives has not done so. The plaintiff construes the words "shall be incapable of being chosen or of sitting" in s 44 as providing for a "singular condition". Those words refer to a person who is incapable of sitting because he or she is incapable of being chosen. That question is to be determined under s 46. The position of a person who has been duly elected or chosen and who subsequently comes under a disability is different. The singular condition does not apply to such a person because he or she has been duly elected or chosen. That person is incapable of sitting, not Bell Edelman because of the operation of s 44, but because s 45 operates to render the person's seat vacant. Whether s 45 does so is a question to be dealt with under s 47. The plaintiff's construction of the provisions of Ch I Pt IV appears to create something of a division of responsibility with respect to questions concerning whether a person is incapable of sitting. The plaintiff explains that division by reference to constitutional policy and underlying notions of judicial power. The background to s 46 The proceedings for which the Common Informers Act provides are in the nature of the old common informer action, by which a citizen could, for his or her own benefit, sue a person who breached a statute. When the statute allowed such an action to be brought, the citizen suing could recover the prescribed statutory penalty on proof of the breach6. The origins of the common informer action lay in the need to provide incentives to citizens to put the processes of the law in train at a time when the State was weak and its laws not always enforced7. English statutes gave common informers the right to bring a case to recover penalties for breaches of a wide range of laws including, by way of example, unlawful gaming, unlicensed disorderly houses, depositing of rubbish on the streets and throwing of fireworks8. By the mid-19th century it appears that the need for common informers to bring actions had substantially diminished. In the Second Reading Speech for the Common Informers Bill 1951 (UK), it was observed that there had been no new enactment of common informer provisions in the last 100 years9. This 6 Tranton v Astor (1917) 33 TLR 383 at 385. 7 Holdsworth, A History of English Law, 3rd ed (1923), vol 2 at 453. 8 Radzinowicz, A History of English Criminal Law and its Administration from 1750, (1956), vol 2 at 140-150. 9 United Kingdom, House of Commons, Parliamentary Debates, vol 483 at 2085 (9 February 1951). Bell Edelman decline seems to have coincided with the creation of police forces in England and the low regard in which common informers had come to be held10. The action contemplated by s 46 of the Constitution has its origins in legislation in the United Kingdom dating from the 18th century, as Gaudron J observed in Sue v Hill11. The first such provision appears to be the Succession to the Crown Act 170712, which set out the circumstances in which a person was disabled or declared incapable by the statute from being elected but nevertheless sits. Such a person was liable to a penalty to be recovered by a person who sued for it. The common informer action in its parliamentary context was transplanted to the Australian Colonies. The Constitution of each Colony contained a section providing for such an action to lie in the case of persons incapable of sitting or voting in the Colony's Parliament13. The first official draft of the Commonwealth Constitution Bill prepared for the National Australasian Convention in 1891 did not contain a clause in terms similar to s 46. The precursor to s 46 was first introduced during a meeting of the Constitutional Committee on 30 March 1891, in the handwriting of Andrew Inglis Clark, in what Professor John Williams describes as "[a] curious addition"14. It was adopted without discussion. There was little discussion about it thereafter. Sir Samuel Griffith provided a critique of the 1897 draft Bill but no comment was made by him about the provision, which was by then cl 49 of the draft Constitution15. 10 Radzinowicz, A History of English Criminal Law and its Administration from 1750, (1956), vol 2 at 153-155. 11 (1999) 199 CLR 462 at 509 [116]-[117]; [1999] HCA 30. 12 6 Anne c 41, s 28. 13 Constitutional Act 1854 (Tas), 18 Vict No 17, s 28; New South Wales Constitution Act 1855 (Imp), 18 & 19 Vict c 54, Sched 1, s 29; Victoria Constitution Act 1855 (Imp), 18 & 19 Vict c 55, Sched 1, s 26; Constitution Act 1855-6 (SA), Act No 2 of 1855-6, s 18; Constitution Act 1867 (Q), 31 Vict No 38, s 7; Constitution Act 1889 (WA), 52 Vict No 23, s 32 and Constitution Acts Amendment Act 1899 (WA), 63 Vict No 19, s 39. 14 Williams, The Australian Constitution: A Documentary History, (2005) at 259. 15 Williams, The Australian Constitution: A Documentary History, (2005) at 614, Bell Edelman Clause 49 was the subject of brief debate during the Sydney Convention in September 1897. Dr Quick drew attention to the nature of cl 49 as a penalty and compared the provision to the consequences for breach of the law against plural voting, which had been struck out of the draft. Dr Quick observed that "[i]n this clause, not only is an offence created, but a penalty is also created in the constitution"16. He suggested that it be struck out, as the penalty against plural voting had been, and that provision be made for a simple prohibition against doing certain acts. The Hon Edmund Barton undertook to produce such a clause, but it was ultimately not implemented17. The words "[u]ntil The Parliament otherwise provides" were introduced into the final draft arising from the Sydney Convention18. Clause 49 was thereafter subject to only slight revision and no debate. The background to s 47 By contrast with s 46, there was significant debate concerning the precursors to s 47, particularly concerning the appropriate forum for the determination of the questions concerning qualifications, vacancies and disputed elections. At the time of the Adelaide Convention of 1897, there were two clauses which together were in substantially the same terms as the first form of s 47, though they dealt with the Senate and the House of Representatives separately19. During that Convention, Sir Edward Braddon suggested that these questions, particularly the question of disputed returns, should be determined by the High Court20. The Hon George Reid expressed a similar sentiment21. Mr Barton 16 Official Record of the Debates of the Australasian Federal Convention, (Sydney), 21 September 1897 at 1034. 17 Williams, The Australian Constitution: A Documentary History, (2005) at 776. 18 Williams, The Australian Constitution: A Documentary History, (2005) at 776. 19 Williams, The Australian Constitution: A Documentary History, (2005) at 504 (Senate) and 507 (House of Representatives). 20 Official Report of the National Australasian Convention Debates, (Adelaide), 15 April 1897 at 680. 21 Official Report of the National Australasian Convention Debates, (Adelaide), 15 April 1897 at 681. Bell Edelman discouraged the amendment, explaining that the clause reflected significant discussion in the Constitutional Committee which had added the proviso "until The Parliament otherwise provides"22. In his view it was preferable to leave it to the federal Parliament to decide after the Houses were called together. During the same debate, Bernhard Wise pointed to there being distinct questions. He described the question of a disputed return as "a matter of altogether a different character"23 from questions as to the qualifications of a member or as to vacancies. Whilst these latter questions might be decided by the relevant House, he proposed that disputed returns be decided by the High Court when it was established. This was accepted. The reference to disputed returns was removed from the two clauses and another24, dealing with disputed returns, was inserted. In the result, disputed elections were to be referred to the Court and questions of qualifications and vacancies were left to be determined by the Houses of Parliament unless they otherwise provided25. At the Sydney Convention in 1897, the question whether to restore disputed elections to the other two clauses was considered. After initial objection, Mr Wise conceded that the matter was best left to the Drafting Committee26. Mr Barton was of the same view27. The revised draft presented by the Drafting Committee replaced all prior clauses with one which was in terms substantially the same as s 47. Only minor drafting changes were made thereafter and no further debate took place. The result was that all three questions – as to the qualifications of a senator or member of the House of 22 Official Report of the National Australasian Convention Debates, (Adelaide), 15 April 1897 at 681. 23 Official Report of the National Australasian Convention Debates, (Adelaide), 15 April 1897 at 681. 24 Clause 48A: see Official Report of the National Australasian Convention Debates, (Adelaide), 22 April 1897 at 1150. 25 Official Report of the National Australasian Convention Debates, (Adelaide), 22 April 1897 at 1150. 26 Official Record of the Debates of the Australasian Federal Convention, (Sydney), 13 September 1897 at 465. 27 Official Record of the Debates of the Australasian Federal Convention, (Sydney), 21 September 1897 at 1034. Bell Edelman Representatives, as to a vacancy in either House, and concerning a disputed election – were left to be determined by the House in which the question arose. It is no doubt correct to observe that s 47 reflects the long-standing tradition of the House of Commons in the United Kingdom, which reserved to itself questions concerning disputed elections and the qualifications of members. It is not necessary to consider what changes were made to those arrangements by statute in the period leading up to Federation and the extent to which those changes may have been imported by s 4928. It is not necessary to do so because s 47 expressly provides for the determination of these questions. Section 47 and authority The authority given in s 47 to the Houses of the Commonwealth Parliament to determine the questions there stated, and the denial of that authority to the courts unless Parliament otherwise provided, is confirmed by the Convention Debates and it is confirmed by authority. In R v Governor of South Australia29, the election of a person to the Senate was held to be void. The Parliament of South Australia purported to treat it as a casual vacancy and appointed another person as a senator. The claim for mandamus against the Governor of South Australia, to issue writs for a new election, failed for the reason that the Governor was not an officer of the Commonwealth. The Court also declined to answer the question whether there was or was not a vacancy in the representation of South Australia. Barton J, speaking for the Court, expressly refrained from doing so. His Honour explained30: "It seems to be clear that the question whether there is or is not now a vacancy in the representation of South Australia in the Senate is one of the questions to be decided by the Senate under sec 47 'unless the Parliament otherwise provides.' Parliament can, no doubt, confer authority to decide such a question upon this Court, whether as a Court of Disputed Returns or otherwise. But until the question is regularly raised for decision we reserve our opinion upon it." 28 Sue v Hill (1999) 199 CLR 462 at 483 [36]. 29 (1907) 4 CLR 1497; [1907] HCA 31. 30 R v Governor of South Australia (1907) 4 CLR 1497 at 1513. Bell Edelman This passage was referred to with approval by this Court in In re Wood31. It was there observed that the jurisdiction given by s 47 to the respective Houses of Parliament, to determine questions respecting the qualifications of their own members or respecting a vacancy, had been acknowledged in that case. Stott v Parker32 concerned the question of a vacancy in the House of Assembly of the Parliament of South Australia. Section 43 of the Constitution Act 1934 (SA) was of similar effect to s 47 of the Commonwealth Constitution. It provided that any question respecting any vacancy shall be determined by the House of Parliament in which the vacancy occurred. The Speaker of the House of Assembly took the view that a seat had become vacant by reason of a member's bankruptcy and withheld that person's parliamentary salary. In proceedings by the person to enforce payment of the salary, he contended that he remained a member of the House. Napier J33 and Richards J34 considered that the legal right to payment depended upon a determination whether there was a vacancy. Their Honours held that the Court had no jurisdiction to determine that question as it was one for the House pursuant to s 4335. In Sue v Hill36 it was said of the jurisdiction given by s 376 of the Electoral Act to the Court of Disputed Returns that there is no reason to think that it is more limited than that of the relevant House, if the House was itself determining the question. In the joint judgment in that case it was said that any question respecting the qualification of Mrs Hill as a senator, any question respecting a vacancy in the Senate, and any question of her disputed election to the Senate would, if the Parliament had not otherwise provided, have been for determination by the Senate37. This would have followed from the operation of 31 (1988) 167 CLR 145 at 159; [1988] HCA 22. 32 [1939] SASR 98. 33 Stott v Parker [1939] SASR 98 at 103-105. 34 Stott v Parker [1939] SASR 98 at 106. 35 Stott v Parker [1939] SASR 98 at 105, 109. 36 (1999) 199 CLR 462 at 476 [16], 478-479 [21], 480 [27]. 37 Sue v Hill (1999) 199 CLR 462 at 473 [5]. Bell Edelman The Common Informers Act – purpose The extrinsic materials suggest that the principal purpose of the Common Informers Act was to limit the amount that a person might have to pay by way of penalty in the event that he or she was found to be incapable of sitting. That possibility was regarded as distinctly real at the time38. In the Second Reading Speech for the Bill39, the Attorney-General described the total penalty which such a person might have to pay as "enormous sums". This was so, not the least, because s 46 provided for a penalty for every day that a person had sat whilst disqualified, without limit. The Common Informers Act provided that limit40. The mischief to which the plaintiff submits the Common Informers Act was directed may be seen in what the Attorney-General said in Parliament about public perceptions. He envisaged a situation where a majority of the House resolved not to refer a question about a person's incapacity to sit to this Court. He considered that the public might think this to be little different from a conspiracy. This was a situation which the Government was anxious to avoid, he said41. These remarks were made by the Attorney-General at the conclusion of debate. They do not form any part of the materials which may be used as an aid It is nevertheless correct to observe, as McHugh J did in Sue v Hill43, that there appears to have been something of an assumption made in the Second Reading Speeches in the Senate and the House of Representatives that this Court would be dealing with the question whether a person was disqualified and unable to sit in a proceeding brought under the Common Informers Act. Assumptions of this kind are not useful to determine questions of the construction of the Constitution. 38 In re Webster (1975) 132 CLR 270; [1975] HCA 22. 39 Australia, House of Representatives, Parliamentary Debates (Hansard), 22 April 40 See Common Informers (Parliamentary Disqualifications) Act 1975 (Cth), s 3(2). 41 Australia, House of Representatives, Parliamentary Debates (Hansard), 22 April 42 Acts Interpretation Act 1901 (Cth), s 15AB. 43 (1999) 199 CLR 462 at 556 [244]. Bell Edelman The Common Informers Act and judicial power The plaintiff submits that the Common Informers Act should not be read less amply than the provisions of the Electoral Act were read in Sue v Hill44. They should be read so as to authorise the determination by this Court of all elements of liability necessary for the imposition of a penalty, including the defendant's ability or otherwise to sit. Reliance is placed in this regard on what was said in Sue v Hill concerning the conferral of judicial power. One of the issues in Sue v Hill concerned whether Pt XXII Div 1 of the Electoral Act is a law for the determination of a matter falling within the judicial power of the Commonwealth. In the passage in the joint judgment on which the plaintiff relies45 it was said that, regarding the incapacity specified in s 44 from which Mrs Hill was said to suffer, the Parliament had provided the means of resolving the facts and their legal consequences by enacting Pt XXII Div 1. And it was said that that Division is a law for the judicial determination of a matter arising under the Constitution or involving its interpretation, within the meaning of s 76(i) of the Constitution. It may be accepted that Pt XXII Div 1 of the Electoral Act and the Common Informers Act have in common that they involve a conferral of the judicial power in s 71 of the Constitution. It is also clear from the joint judgment in Sue v Hill that Pt XXII Div 1 is a law of the kind referred to in s 76(i) of the Constitution, but that is because it is a law made under s 47. The petition brought in Sue v Hill raised the question whether Mrs Hill was incapable of being chosen as a senator because she was a "citizen of a foreign power" within the meaning of s 44(i). In the passage in the joint judgment immediately following that relied upon by the plaintiff46, it was observed that if the Parliament had not otherwise provided by enacting Pt XXII Div 1, that question would have "been for the determination of the Senate". Their Honours said "[t]hat would have followed from the operation of s 47 of the 44 (1999) 199 CLR 462. 45 Sue v Hill (1999) 199 CLR 462 at 472-473 [4]. 46 Sue v Hill (1999) 199 CLR 462 at 473 [5]. 47 Sue v Hill (1999) 199 CLR 462 at 473 [5]. Bell Edelman The Common Informers Act is a law made under s 46 not s 47, as the plaintiff concedes. It does not share the characteristics of a law made under s 47, from which it may be concluded that it is also a law conferring authority to decide questions arising under s 76(i). Whether it does so is to be resolved by a process of construction, not by analogy with a law of a different kind. Sue v Hill is not authority for the proposition for which the plaintiff contends. It is authority for the proposition that the context for questions as to qualification arising under s 47 is s 44. This is a proposition which the plaintiff's argument largely denies. The plaintiff submits that the words "declared by this Constitution" necessarily involve the exercise of judicial power. The plaintiff overstates the importance of these words. The word "declared" is used throughout the Constitution in various contexts. The use of the word "declared" in s 46 and the use of the word "determined" in s 47 do not identify, respectively, a judicial and a non-judicial power. The words "declared by this Constitution to be incapable of sitting" in s 46, in relation to the person to be penalised, are apt to direct attention to other provisions in the Constitution which provide the circumstances which render a person incapable of sitting. As the words suggest, the Constitution itself states the circumstances which render a person incapable of sitting48. It does so in s 44 and in other provisions relating to qualifications. The question as to which forum has the authority to determine whether a person is incapable of being chosen or of sitting – because he or she suffers from a disability referred to in s 44 or is otherwise disqualified from sitting – is not to be decided by assumptions about whether it must have been intended to provide courts with the authority to decide the first element of liability in a common informer action. In the absence of express provision in s 46 conferring an authority to decide, the question is whether an implication of that power is necessary. That depends largely upon whether provision has been made for the determination of the question elsewhere in the Constitution. Attention is immediately directed to s 47. Questions arising under s 47 The disabilities referred to in s 44 may prevent a person from being elected, or otherwise chosen, or from continuing to sit. In the latter respect the section has a continuing operation. Questions as to whether a person is 48 Sue v Hill (1999) 199 CLR 462 at 472 [4], 484 [38]. Bell Edelman disqualified might arise with respect to a forthcoming election or an election which has been held, or they might arise during the term that the person sits in either House. The three categories of questions in s 47 are apt to deal with questions arising under s 44 at any time. In Sykes v Cleary [No 1]49, In re Wood50 and Sue v Hill51 it was pointed out that the three categories of questions in s 47 are not mutually exclusive. In Sykes v Cleary [No 1], Dawson J observed that a question of the qualification of a person may arise in a context other than that of a disputed election; conversely a disputed election may involve a qualification of a person to be chosen52. In some circumstances the question of a vacancy may arise in connection with a disputed election; in others it may arise independently of it. In Sue v Hill53 Gaudron J took up what his Honour had said in Sykes v Cleary [No 1] and Gleeson CJ, Gummow and Hayne JJ agreed54. There can be no doubt about the breadth of the operation of s 47. This is evident from the use of the words "any" and "respecting" with respect to the questions referred to in it. The question whether the defendant is disqualified by reason of s 44(v) and therefore incapable of sitting would seem readily to fall within the language of s 47. A determination of that question could supply the necessary element for liability for the purposes of s 46. Questions arising under s 46 The question most clearly arising under s 46 is the amount of the penalty which is to be imposed on a person who sat in either House whilst disqualified in some respect. Clearly enough, the court in which the common informer 49 (1992) 66 ALJR 577 at 578; 107 ALR 577 at 579; [1992] HCA 32. 50 (1988) 167 CLR 145 at 160. 51 (1999) 199 CLR 462 at 480 [25], 507-508 [113]-[114]. 52 Sykes v Cleary [No 1] (1992) 66 ALJR 577 at 578; 107 ALR 577 at 579. 53 (1999) 199 CLR 462 at 507-508 [112]-[113]. 54 Sue v Hill (1999) 199 CLR 462 at 480 [25]. Bell Edelman proceeding is brought is to make that order in the exercise of its judicial power and it must determine the quantum. Unlike s 47, s 46 does not contain any express authorisation for the court to determine any matter as to the qualifications of a person from which it may be concluded that he or she is incapable of sitting. The words "any person declared by this Constitution to be incapable of sitting" strongly suggest that the circumstances rendering the person incapable of sitting are to be found elsewhere in the Constitution. The particular forum which is to determine whether the provisions of the Constitution have that effect in a given case is not identified by these words. It is to be identified within the scheme of Ch I Pt IV and in particular by reference to the authority given to determine questions arising under s 44 and the other provisions. Whilst the question posed by these words in s 46 is one necessary to be determined before a person is liable to the imposition of a penalty, it is not necessary that the answer to that question be determined by the court hearing a common informer action. Indeed, there may be good reason to conclude that the question should not be determined in that proceeding, given that the same question is to be dealt with under s 47 and that it may be part only of the overlapping questions which may there arise. It is not necessary to the scheme of Ch I Pt IV that s 46 itself may authorise the courts to determine questions of qualifications for the purposes of a common informer action. It is not necessary given that the question is one which may be determined by the relevant House or as Parliament otherwise provides under s 47. The silence of s 46 on the matter is explicable given the operation of s 47. The operation of s 47 and the scheme of Ch I Pt IV is less clear if s 46 permits the intrusion of a judicial decision as to qualifications in common informer proceedings. Section 44 – a singular condition? It is necessary then to consider the plaintiff's argument concerning the construction of s 44 and the scheme of Ch I Pt IV in some more detail. The starting point for it is the words "any person", which appear in s 46 and also at the commencement of s 44. The plaintiff submits that they are an important textual feature of s 46. It is difficult to discern any special connection from their use in the two sections. The words are used in s 44 because it applies the disabilities there stated to both persons who seek to be chosen and those who have been chosen. They are used in s 46 to refer to any person who, by reason of Bell Edelman s 44, was or is incapable of sitting as a senator or member of the House of Representatives and does so. The plaintiff points to a distinction between the words "any person" in ss 44 and 46 and other provisions of Ch I Pt IV, which have as their subject "a senator or a member of the House of Representatives". It may be observed, however, that the subject of s 47 in the first category of questions is not such a person; its subject is any question respecting the qualifications of that person to hold those offices. The further distinction which the plaintiff seeks to draw between a senator or a member, as persons who have been chosen, on the one hand, and a person who is incapable of being chosen, on the other, is more closely related to his argument that s 44 contains a singular condition, as referred to earlier in these reasons55. The singular condition in s 44 for which the plaintiff contends is where a person is incapable of being chosen and sits. Section 44 is to be construed in this way, on the plaintiff's argument, because s 46 does not impose a penalty if a person is chosen but does not sit. The words "or of sitting" do not furnish an alternative path to liability in a common informer suit. It follows from the singular condition in s 44 that a person who has been duly elected or otherwise chosen, but who later becomes subject to any of the disabilities mentioned in s 44, is not a person "incapable of being chosen" within the meaning of s 44. The plaintiff submits that that person is incapable of sitting or continuing to sit not because of the operation of s 44, but because s 45 provides that his or her place "shall thereupon become vacant". The operation of the scheme of Ch I Pt IV for which the plaintiff contends is not entirely clear. It can nevertheless be deduced that questions as to the qualifications of persons seeking to be chosen do not fall within s 47, but they do within s 46. On the plaintiff's argument, s 47 authorises the determination of questions relating to qualifications which arise under s 34 (and presumably also s 43) and it authorises questions relating to a vacancy or a disputed election. The plaintiff does not explain how the text of s 47 is to be construed either alone or in the context of s 44 in order to accommodate this division of responsibility. He does not explain why questions under ss 34 and 43 would be assigned to s 47, but not those arising under s 44. Bell Edelman The constitutional division of responsibility effected by the plaintiff's argument is said to be explained by reference to constitutional policy. The Constitution, he says, was less concerned with people who had been duly elected but subsequently became subject to a s 44 disability during his or her term than it was with respect to the person being chosen. It is not explained how such a policy was to be gleaned, or why the Constitution would create such a division and at the same time make it subject to Parliament otherwise providing. In his written submissions, the plaintiff went so far as to assert that s 47 is not "the exclusive source, or even a source" of a court's authority to decide a matter under s 44. In oral submissions the plaintiff acknowledged that even on his argument it could not be said that s 47 does not refer to s 44. It must necessarily do so because s 45 includes s 44 in its reference to a person becoming subject to the disabilities referred to in that section. The plaintiff did not suggest that this altered the general tenor or structure of his argument. It is not necessary to further consider the scheme for which the plaintiff contends and the difficulties in the operation of the provisions of Ch I Pt IV which might arise from it. It is not necessary to do so because the construction for which he contends founders on its fundamental premise. It involves a misconception concerning ss 44 and 45. Section 44 does not contain a singular condition. The words "incapable of being chosen or of sitting" are clearly disjunctive. If a person seeking to be chosen suffers from one of the disabilities there stated he or she is "incapable of being chosen". If a person subsequently comes under a disability he or she is "incapable of sitting". Section 45 then operates to vacate his or her seat. The plaintiff's argument that s 44 does not itself render a person who becomes subject to a disability during his or her term incapable of sitting, but s 45 does so, cannot be accepted. It is plainly inconsistent with what was said in Re Nash (No 2)56. It was there explained that if a person, after becoming a senator or member of the House of Representatives, becomes subject to a disability mentioned in s 44, "not only does s 44 operate to prevent the person from sitting but s 45(i) operates to vacate his or her place. Section 45(i) has that operation even if the person has not yet taken his or her seat for the place for which he or she was chosen and, by reason of becoming subject to the disability, is prevented by s 44 from ever doing so." 56 (2017) 92 ALJR 23 at 29-30 [33]; 350 ALR 204 at 212; [2017] HCA 52. Bell Edelman Properly understood, the place of s 46 in the scheme of Ch I Pt IV is to allow for the imposition and recovery of a penalty in a common informer action. It is the role of the Court to determine the quantum of the penalty under the Common Informers Act. It may do so when the anterior question of liability is determined by the means provided by s 47. Conclusion and orders The questions should be answered: (2) Unnecessary to answer. The plaintiff's proceeding under the Common Informers Act should be stayed until the question whether the defendant is incapable of sitting is determined57. 57 Stott v Parker [1939] SASR 98. GAGELER J. I agree that the questions reserved should be answered in the terms stated by Kiefel CJ, Bell, Keane and Edelman JJ. My reason for considering that the High Court lacks jurisdiction in a common informer action to determine whether a person is constitutionally incapable of sitting as a senator or member of the House of Representatives comes down to an overriding concern to ensure coherence in the operation of ss 46, 47, 76 and 77 of the Constitution. Section 46 of the Constitution does no more than to create a cause of action, which is to exist unless and until the Parliament otherwise provides by a law enacted under s 51(xxxvi) of the Constitution either abolishing the cause of action altogether or substituting another cause of action. The section does not confer upon any court authority to decide any of the elements of that cause of action. The section's reference to suit on the cause of action being brought "in any court of competent jurisdiction" is premised on the jurisdiction of the court – its authority to decide – being found in another source58. The source of the jurisdiction of a court of competent jurisdiction might be a State law conferring State jurisdiction on a State court which is then bound in the exercise of that State jurisdiction by the Constitution and any applicable Commonwealth law, as recognised in covering cl 5 of the Constitution. The source of the jurisdiction of a court of competent jurisdiction might alternatively be a Commonwealth law conferring federal jurisdiction on the High Court under s 76(i) or (ii) of the Constitution or on a State court or another federal court under s 77(i) or (iii) of the Constitution. Section 47 of the Constitution, in contrast, is squarely addressed to authority to decide and to nothing other than authority to decide. The relevant effect of the section is that, unless the Parliament otherwise provides and to the extent that the Parliament does not otherwise provide59, "any question" which answers the description of a "question respecting the qualification of a senator" can only be determined by the Senate and "any question" which answers the description of a "question respecting the qualification of a ... member" can only be determined by the House of Representatives. As with the prescription in Art I §5 of the Constitution of the United States that "[e]ach House shall be the Judge of the … Qualifications of its own Members", there is in s 47 a "textually 58 Cf R v Ward (1978) 140 CLR 584 at 588-589; [1978] HCA 27. 59 See R v Pearson; Ex parte Sipka (1983) 152 CLR 254 at 260-261; [1983] HCA 6; In re Wood (1988) 167 CLR 145 at 157-162; [1988] HCA 22. demonstrable constitutional commitment" of the determination of the identified questions "to a coordinate political department"60. Absent the Parliament otherwise providing for the purpose of s 47 of the Constitution by a law enacted under s 76(i) or (ii) or s 77(i) or (iii) of the Constitution, no question respecting the qualification of a senator or of a member is within the adjudicatory competence of the High Court or of any other court. Conversely, jurisdiction conferred on a court by a law enacted under s 76(i) or (ii) or s 77(i) or (iii) of the Constitution that is not for the purpose of otherwise providing for the purpose of s 47 of the Constitution cannot extend to jurisdiction to determine any question respecting the qualification of a senator or of a member. The question posed by s 46 of whether a senator or member against whom a suit is brought is a "person declared by this Constitution to be incapable of sitting" answers the description of a "question respecting the qualification" of that senator or member within the meaning of s 47. The consequence is that, unless the Parliament otherwise provides for the purpose of s 47, that element of the cause of action created by s 46 or by a law enacted under s 51(xxxvi) for the purpose of s 46 can only be established by a prior determination of the Senate or the House. The alternative view of the relationship between ss 46 and 47 is not without precedent. It was the view to which Gaudron J was persuaded in Sue v Hill61. It was presaged by Professor Enid Campbell in an opinion prepared for the Royal Commission on Australian Government Administration in 197662. Professor Campbell called in aid what she fairly described in that opinion as "dictum in the English case of Bradlaugh v Gossett63 which suggests that the court trying the suit for penalties would not be bound by the House's adjudication"64. The same dictum was noted in the edition of Erskine May's well-known treatise on parliamentary practice current at the time of federation as 60 See Lindell, "The Justiciability of Political Questions: Recent Developments", in Lee and Winterton (eds), Australian Constitutional Perspectives, (1992) 180 at 184, quoting Baker v Carr 369 US 186 at 217 (1962). See also Powell v McCormack 395 US 486 at 548 (1969). 61 (1999) 199 CLR 462 at 510 [118]; [1999] HCA 30. 62 Royal Commission on Australian Government Administration, Report of Royal Commission, (1976), Appendix, vol 1 at 208-209 [54]-[55]. 63 (1884) 12 QBD 271 at 281-282. 64 Royal Commission on Australian Government Administration, Report of Royal Commission, (1976), Appendix, vol 1 at 208 [54]. one of a number of "conflicting opinions as to the limits of parliamentary privilege, and the jurisdiction of courts of law"65. The alternative view, however, bristles with difficulty. First, it treats s 46 as addressed to the topic of authority to decide, when that section is not. Second, it departs from the language of s 47 in order to treat the authority of a court to decide one of the questions posed by s 46 as an exception to the generality of the exclusive authority conferred on the Senate and the House by s 47 to decide all of the questions referred to in that section. In so doing, it gives rise to the potential for the constitutional structure to produce contradictory yet equally authoritative answers to the same constitutional question – one emanating from a court and another emanating from the Senate or the House. It countenances legal uncertainty and institutional disharmony. To the objection that rejection of the alternative view robs s 46 of meaningful practical operation, two responses can be made. The first is to observe that the progenitor of s 46, s 28 of the Succession to the Crown Act 170766, appears never to have been acted on to give rise to a single common informer action at any time in the two and a half centuries in which that section remained in force until its repeal by the House of Commons Disqualification Act 1957 (UK). The second is to note that the practical operation that is left to s 46 perfectly fulfils the function which the Report of a Select Committee of the House of Commons in 1941 suggested may have been intended by that House when participating in the enactment of s 28. Having noted that how provision for a common informer action came to be incorporated in the Act of 1707 was "somewhat obscure", the authors of the Report expressed the opinion that "[i]t is difficult therefore to believe that the Commons in 1707 had any deliberate intention of giving the courts any jurisdiction which would interfere with the privileges they had been so jealously fighting to maintain, or of giving the courts a right to interfere with the exclusive control of the Commons over questions relating to membership of the House". The authors of the Report went on to proffer the suggestion that "it may well be held that the Commons in 1707 not only did not intend to, but did not in fact, give up their claim to exclusive jurisdiction in regard to qualification for membership of their House, but that they merely established machinery for enforcing by penalties a decision made by 65 Erskine May, A Treatise on the Law, Privileges, Proceedings and Usage of Parliament, 10th ed (1893) at 134. 66 6 Anne c 41. 67 United Kingdom, House of Commons, Report from the Select Committee on Offices or Places of Profit under the Crown, (1941) at xxxi-xxxii [55]-[56]. The Commonwealth Parliament has, by a law enacted under s 76(i) and (ii) of the Constitution, otherwise provided for the purpose of s 47 of the Constitution in the enactment of Pt XXII of the Commonwealth Electoral Act 1918 (Cth) ("the Electoral Act")68. By enacting ss 3 and 4 of the Common Informers (Parliamentary Disqualifications) Act 1975 (Cth) ("the Common Informers Act"), the Parliament has exercised its power under s 51(xxxvi) to make a law which replaces the constitutional cause of action created by s 46 with a statutory cause of action. As is common ground in the present case, however, the Parliament has not by enacting s 5 of the Common Informers Act otherwise provided for the purpose of s 47 in conferring jurisdiction on the High Court under s 76(i) and (ii) of the Constitution. The jurisdiction conferred by s 5 is therefore circumscribed to the extent of the continuing exclusive operation of s 47 of the Constitution. The consequence of the jurisdiction conferred on the High Court under s 76(i) and (ii) of the Constitution by s 5 of the Common Informers Act being circumscribed to the extent of the continuing exclusive operation of s 47 of the Constitution is that the element of the statutory cause of action spelt out in s 3 of the Act which requires that the person against whom suit is brought be "a person declared by the Constitution to be incapable of so sitting" as a senator or member can be established only by a separate determination of that question by the Senate or the House or by this Court sitting as the Court of Disputed Returns under Pt XXII of the Electoral Act. The High Court cannot determine the question for itself in the exercise of the jurisdiction conferred by s 5 of the Common Informers Act. That outcome, it must be acknowledged, means that the Common Informers Act fails to meet the central concern identified by the then Attorney- General when introducing the Bill for its enactment. That concern, borne out by then recent experience69, was that a political majority in the Senate or the House might prevent a putative disqualification from being tested by voting down referral of the question of disqualification to the High Court sitting as the Court of Disputed Returns under the Electoral Act70. The discrepancy is perhaps explicable on the basis suggested by McHugh J in Sue v Hill71 that the Bill was prepared with an expedition which did not allow for adequate reflection. More 68 In re Wood (1988) 167 CLR 145 at 157-161. 69 See Sawer, Federation under Strain, (1977) at 35. 70 Australia, House of Representatives, Parliamentary Debates (Hansard), 22 April 71 (1999) 199 CLR 462 at 556 [244]. likely, I think, is that the Attorney-General was acting on a considered view of the constitutional structure which the High Court now unanimously rejects. Whatever the explanation, the Attorney-General's failure to appreciate the scope of the continuing exclusive operation of s 47 of the Constitution cannot alter the constitutional characterisation of the Common Informers Act as an Act which otherwise provides solely for the purpose of s 46 of the Constitution. NettleJ NETTLE AND GORDON JJ. Section 3(1) of the Common Informers (Parliamentary Disqualifications) Act 1975 (Cth) ("the Common Informers Act") provides that "[a]ny person who … has sat as a senator or as a member of the House of Representatives while he or she was a person declared by the Constitution to be incapable of so sitting" shall be liable to pay a penalty to any person who sues for it. The plaintiff, Mr Alley, commenced proceedings in the High Court claiming, pursuant to s 3(1)(a) and (b) of the Common Informers Act, that the defendant, Dr Gillespie, was liable to pay to him $200 for any or all of the days that Dr Gillespie sat as a member of the House of Representatives of the Parliament of the Commonwealth of Australia when allegedly incapable of doing The House of Representatives has not determined or declared that Dr Gillespie was not capable of being chosen as a member of the House of Representatives, was not or is not capable of sitting as a member of the House, was not or is not qualified to be a member of the House, or was or is declared by the Constitution to be incapable of sitting as a member of the House. The House of Representatives has not referred any question respecting the qualifications of Dr Gillespie as a member of the House to the Court of Disputed Returns under s 376 of the Commonwealth Electoral Act 1918 (Cth). the No proceedings have been commenced under Pt XXII of Commonwealth Electoral Act disputing the validity of the election or the return of Dr Gillespie as a member of the House of Representatives in July 2016. The High Court of Australia, whether sitting as the Court of Disputed Returns or otherwise, has not determined or declared that Dr Gillespie was not capable of being chosen as a member of the House of Representatives, was not or is not capable of sitting as a member of the House, was not or is not qualified to be a member of the House, or was or is declared by the Constitution to be incapable of sitting as a member of the House. Two questions have been referred to the Full Court under s 18 of the Judiciary Act 1903 (Cth). First, can and should the High Court decide whether Dr Gillespie was a person declared by the Constitution to be incapable of sitting as a member of the House of Representatives for the purposes of s 3 of the Common Informers Act? Second, if the answer to the first question is "Yes", is it the policy of the law that the High Court should not issue subpoenas in this proceeding directed to a forensic purpose of assisting the plaintiff in his attempt to demonstrate that Dr Gillespie was a person declared by the Constitution to be incapable of sitting NettleJ as a member of the House of Representatives for the purposes of s 3 of the Common Informers Act? The first question should be answered "No". Whether a member or senator is incapable of being chosen or is ineligible to sit in the House or Senate is to be decided in accordance with s 47 of the Constitution, including the additional mechanisms prescribed by legislation made under it. It is not open in a proceeding under s 3 of the Common Informers Act for the High Court to decide whether Dr Gillespie was a person declared by the Constitution to be incapable of sitting as a member of the House of Representatives. It is therefore unnecessary to answer the second question. Section 3 of the Common Informers Act must be understood and applied in its constitutional context. In particular, it must be understood and applied having regard to ss 46 and 47 of the Constitution. Section 46 of the Constitution is headed "Penalty for sitting when disqualified". It provides that "[u]ntil the Parliament otherwise provides" a penalty may be recovered by a person who sues for it in any court of competent jurisdiction, where a person is declared by the Constitution to be incapable of sitting and has sat (emphasis added). Section 47 of the Constitution is headed "Disputed elections". It provides that: "Until the Parliament otherwise provides, any question respecting the qualification of a senator or of a member of the House of Representatives, or respecting a vacancy in either House of the Parliament, and any question of a disputed election to either House, shall be determined by the House in which the question arises." (emphasis added) Both sections give the Parliament power to make "other" provision. The Parliament has "otherwise provide[d]" with respect to s 4672 by enacting the Common Informers Act. Parliament has "otherwise provide[d]" with respect to s 47 by enacting Pt XXII of the Commonwealth Electoral Act. The Common Informers Act limits both the time within which a penalty may be sought73 and the amount of the penalty that may be recovered74. 72 Read with s 51(xxxvi) and s 76(i) and (ii) of the Constitution. 73 s 3(2) of the Common Informers Act. 74 s 3(1) of the Common Informers Act. NettleJ The Commonwealth Electoral Act provides for, and fixes, means additional to s 47 by which questions about the eligibility of senators and members are to be determined75. The plaintiff seeks to have a question about eligibility decided in a way which is not provided for by s 47 of the Constitution, or by the Commonwealth Electoral Act, but rather in a proceeding he has instituted under the Common Informers Act. That cannot be done. The title of the Common Informers Act is "[a]n Act to make other Provision with respect to the Matter in respect of which Provision is made by section 46 of the Constitution", not s 47 of the Constitution. The matter in respect of which provision is made by s 46 is the imposition of a penalty for a person declared by the Constitution to be incapable of sitting as a senator or as a member of the House of Representatives. The Common Informers Act uses express language to confirm that the legislature has "otherwise provide[d]" pursuant to s 46 of the Constitution. Section 3(1) of the Common Informers Act provides that "any person" may commence proceedings against "[a]ny person who … has sat as a senator or as a member of the House of Representatives while he or she was a person declared by the Constitution to be incapable of so sitting" for a prescribed amount76 (emphasis added). Section 4 provides that on or after the date of commencement of the Common Informers Act, a person is not liable to pay any sum under s 46 of the Constitution and no suit shall be instituted, continued, heard or determined in pursuance of that section. The effect of s 4 of the Common Informers Act is that s 3 of that Act replaces the right to institute a suit under s 46 of the Constitution. Original jurisdiction is conferred on the High Court in suits under the Common Informers Act and no other court has jurisdiction in such a suit77. A suit under the Common Informers Act must be brought within 12 months after 75 See generally Pt XXII of the Commonwealth Electoral Act. 76 The amount is equal to the total of $200 in respect of his or her having so sat on or before the day on which the originating process in the suit is served on him or her and $200 for every day, subsequent to that day, on which he or she is proved in the suit to have so sat: s 3(1)(a) and (b) of the Common Informers Act. 77 s 5 of the Common Informers Act. NettleJ the sitting of the senator or member to which the suit relates78. The High Court shall refuse to make an order in a suit under the Common Informers Act that would, in the opinion of the Court, cause the person against whom it was made to be penalized more than once in respect of any period or day of sitting as a senator or as a member of the House of Representatives79. What issues may be raised in a proceeding under the Common Informers Act directs attention to s 47 of the Constitution, and the Commonwealth Electoral Act. Sections 46 and 47 are adjacent to each other. Section 46 creates an enforceable liability and empowers the Parliament to alter that liability. Section 47 provides for means of determining any question respecting qualifications. The plaintiff's submissions – that s 46 should be seen as empowering the Parliament to provide for means of determining whether a person is incapable of sitting as a senator or member of the House of Representatives, and that s 47 should be seen as empowering the Parliament to provide for means of determining questions concerning the qualification of a senator or member only in relation to questions other than whether a person is incapable of sitting as a senator or member – are untenable. Section 46 does not expressly or by necessary implication empower the Parliament to provide for means of determining any question concerning the qualification of a senator or member of the House of Representatives. Section 47 does. That difference, and the considerations mentioned in what follows, signify that the determination of who is disqualified is left to the processes fixed under s 47. First, s 47 states that "any question respecting the qualification of a senator or of a member of the House of Representatives … shall be determined by the House in which the question arises" (emphasis added). The word "any" makes clear that s 47 deals entirely with questions concerning qualifications of senators or members of the House of Representatives, unless the legislature "otherwise provides" pursuant to s 47. If it had been intended that a proceeding by a common informer could (in any court of competent jurisdiction) determine the qualification of a senator or member, it is unlikely that it would provide, as it does, that "any question" shall be determined by the House in which the question arises. Secondly, before the Parliament otherwise provided under s 47, the determination of any question respecting the qualification of a member or senator was to be made by the relevant House. That is, the question whether, in the 78 s 3(2) of the Common Informers Act. 79 s 3(3) of the Common Informers Act. NettleJ words of s 46, a person was "declared by this Constitution to be incapable of sitting" was a matter within the exclusive cognisance of the relevant House. Unless and until the relevant House made such a determination in accordance with s 47, no liability under s 46 would arise. A determination under s 47 was antecedent to the determination that a penalty was payable under s 46. Thirdly, that relationship between ss 46 and 47 of the Constitution, and, in particular, that the determination of qualifications of members of Parliament was within the exclusive cognisance of the Parliament, is consistent not only with the text and structure of the Constitution but also with the common law principle of exclusive cognisance. The principle of exclusive cognisance is that each House of Parliament has "the exclusive right … to manage its own affairs without interference from the other or from outside Parliament"80. Exclusive cognisance can be waived or relinquished by Parliament; and, as a result, the areas of exclusive cognisance have changed, significantly, as a result of legislation. Here the Parliament has made other provision under s 47. Parliament has altered the existing and long-standing institutional arrangements for the determination of questions about the qualification of persons by enacting Pt XXII of the Commonwealth Electoral Act. That Part of the Act is a law which otherwise provides under s 47 of the Constitution. But it provides only two additional means by which questions concerning the qualifications of senators or members or the validity of elections or returns may be determined. In Div 1 of Pt XXII, the Commonwealth Electoral Act provides a mechanism for an election to be disputed by petition addressed to the Court of Disputed Returns, and not otherwise, within a prescribed time limit81. In Div 2 of that Part, s 376 provides that: "Any question respecting the qualifications of a Senator or of a Member of the House of Representatives … may be referred by resolution to the Court of Disputed Returns by the House in which the question arises and the Court of Disputed Returns shall thereupon have jurisdiction to hear and determine the question." (emphasis added) Unless a petition is instituted within time, or a question is referred to the Court of Disputed Returns by resolution of the House in which the question arises, the Court of Disputed Returns has no jurisdiction. 80 R v Chaytor [2011] 1 AC 684 at 712 [63]. 81 See ss 353 and 355 of the Commonwealth Electoral Act. NettleJ Fourthly, to say that Parliament has, by enacting Pt XXII of the Commonwealth Electoral Act, "otherwise provide[d]" for the determination of questions concerning the qualification of senators or members does not mean that s 47 can be regarded as the "source" of the Court of Disputed Returns' jurisdiction in respect of such matters. As has been seen, the long-standing institutional arrangement was for such questions to be determined by the relevant House. Fifthly, it was not contended, and it is not the case, that the Common Informers Act is a law that otherwise provides for the purposes of s 47. It was passed in 1975 in the wake of the Webster controversy82. It is a law that otherwise provides for the purposes of s 46 as a complete displacement of it. But it does not alter or add to the provisions that were then, and are now, made by s 47 of the Constitution and by Pt XXII of the Commonwealth Electoral Act for deciding any question respecting the qualifications of a senator or member to be chosen or sit as a senator or member. Finally, the plaintiff's contention that the High Court can and should decide whether Dr Gillespie was a person declared by the Constitution to be incapable of sitting as a member of the House of Representatives for the purposes of s 3 of the Common Informers Act not only is contrary to the text and context of s 47 of the Constitution and the common law principle of exclusive cognisance but also would create uncertainty. Allowing the Court to decide that issue in a suit instituted under s 3 of the Common Informers Act would permit an action to be brought up to seven years after an election for the Senate and up to four years after an election for the House of Representatives83, contrary to the prescribed time limits84 in the Commonwealth Electoral Act, and create the potential for inconsistent determinations on disqualification between a House of the Parliament and the High Court. The plaintiff's submissions did not address these difficulties. In the result, it is to be concluded that any question respecting the qualifications of a senator or member to be chosen or to sit as a senator or member may be determined only by the House in which the question arises or by one of the processes prescribed by the Commonwealth Electoral Act. It may not be determined in a proceeding under the Common Informers Act. In the absence 82 See In re Webster (1975) 132 CLR 270; [1975] HCA 22; Sue v Hill (1999) 199 CLR 462 at 556 [244]; [1999] HCA 30. 83 See ss 13 and 28 of the Constitution read with s 3(2) of the Common Informers Act. 84 See s 355(e) of the Commonwealth Electoral Act. NettleJ of a determination by the House in which the question arises, or by one of the processes prescribed by the Commonwealth Electoral Act, the Court does not have jurisdiction to determine liability under s 3 of the Common Informers Act. Conclusion The questions referred to this Court under s 18 of the Judiciary Act should be answered in the terms stated by Kiefel CJ, Bell, Keane and Edelman JJ.

HIGH COURT OF AUSTRALIA PLAINTIFF S156/2013 PLAINTIFF AND MINISTER FOR IMMIGRATION AND BORDER PROTECTION & ANOR DEFENDANTS Plaintiff S156/2013 v Minister for Immigration and Border Protection [2014] HCA 22 18 June 2014 ORDER The questions reserved in the Stated Case dated 13 February 2014 be answered as follows: Is s 198AB of the Migration Act 1958 (Cth) invalid on the ground that it is not supported by any head of power in s 51 of the Constitution? Answer: Is s 198AD of the Migration Act 1958 (Cth) invalid on the ground that it is not supported by any head of power in s 51 of the Constitution? Answer: Is the Minister's designation that PNG is a regional processing country made on 9 October 2012 under s 198AB of the Migration Act 1958 (Cth) invalid? Answer: Is the Minister's direction made on 29 July 2013 under s 198AD(5) of the Migration Act 1958 (Cth) invalid? Answer: these proceedings otherwise able Are for determination in the Federal Court of Australia or the Federal Circuit Court of Australia? to be remitted Answer: The proceedings are otherwise able to be remitted for determination the Federal Circuit Court of Australia. Who should pay the costs of and incidental to this Stated Case? Answer: The plaintiff. Representation M A Robinson SC with G J Williams and J Williams for the plaintiff (instructed by Adrian Joel & Co Solicitors) the Commonwealth and J T Gleeson SC, Solicitor-General of S P Donaghue QC with N M Wood for the defendants (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Plaintiff S156/2013 v Minister for Immigration and Border Protection Constitutional law (Cth) – Legislative power of Commonwealth – Constitution, s 51(xix) – Aliens power – Section 198AB of Migration Act 1958 (Cth) provides that Minister may designate country as regional processing country – Section 198AD(2) provides that unauthorised maritime arrival ("UMA") must, as soon as reasonably practicable, be taken from Australia to regional processing country – Section 198AD(5) provides that, if there are two or more regional processing countries, Minister must, in writing, direct an officer to take UMA, or class of UMAs, to regional processing country specified in direction – Whether ss 198AB and 198AD laws with respect to aliens – Whether ss 198AB and 198AD valid. Administrative law – Judicial review of administrative decisions – Where Minister designated country as regional processing country under power conferred by s 198AB of Migration Act 1958 (Cth) – Where only condition for exercise of power is that Minister thinks it is in national interest to do so – Whether Minister was obliged to, but did not, take into account other relevant considerations – Whether designation valid. Administrative law – Judicial review of administrative decisions – Where Minister made direction under s 198AD(5) of Migration Act 1958 (Cth) – Whether direction uncertain or vague – Whether direction valid. Words and phrases – "aliens power", "national interest", "proportionality", "reasonably appropriate and adapted", "relevant considerations", "with respect Constitution, s 51(xix). Migration Act 1958 (Cth), Pt 2, Div 8, subdiv B, ss 5(1), 5AA, 5E, 14, 36, 46A, 189, 198, 198AA, 198AB, 198AD, 198B, 474, 476, 476A, 476B, 494AA. Judiciary Act 1903 (Cth), s 44(1). FRENCH CJ, HAYNE, CRENNAN, KIEFEL, BELL AND KEANE JJ. The plaintiff is a citizen of the Islamic Republic of Iran and entered Australia's migration zone by sea at Christmas Island on 23 July 2013. Christmas Island is an "excised offshore place" within the meaning of s 5(1) of the Migration Act 1958 (Cth). An officer of what is now the Department of Immigration and Border Protection1 ("the Department") detained the plaintiff, pursuant to the power given by s 189(3) of the Migration Act with respect to unlawful non- citizens2. The plaintiff's method of entry into Australia also qualified him as an "unauthorised maritime arrival" ("a UMA")3 for the purposes of the Migration Act. The plaintiff claims that he is a member of a minority religious group and that he fears persecution in Iran. He claims to be a refugee within the meaning of the international convention relating to refugees ("the Refugees Convention")4, to which Australia is a party. The plaintiff did not make an application for a protection visa5. As a UMA who is an unlawful non-citizen, he could not make a valid application for a visa6 unless the first defendant, the Minister for Immigration and Border Protection ("the Minister"), exercised his discretion under s 46A(2) of the Migration Act. The Minister did not consider lifting the bar created by s 46A(1) and no steps were taken to enable him to do so. The plaintiff made no request for such consideration. Whilst on Christmas Island, the plaintiff was advised by an officer of the Department that he would be sent to Manus Island in the Independent State of Papua New Guinea ("PNG"); that it would take a long time for any refugee claim 1 Previously the Department of Immigration and Citizenship. 2 Migration Act 1958 (Cth), ss 5(1) and 14. 3 Migration Act 1958, s 5AA. 4 Convention relating to the Status of Refugees (1951) as amended by the Protocol relating to the Status of Refugees (1967). 5 Migration Act 1958, s 36. 6 Migration Act 1958, s 46A(1). Hayne Crennan Bell he might make to be processed; and that, even if he was found to be a refugee, he would never be resettled in Australia. The assessment of the plaintiff's claim to be a refugee was not undertaken while the plaintiff was in Australia and would not appear to have been undertaken by Australia subsequent to his removal. The Minister had designated PNG to be a "regional processing country" before the plaintiff's arrival at Christmas Island. In consequence of that designation and a direction given by the Minister, both of which are provided for in subdiv B of Div 8 of Pt 2 of the Migration Act, the plaintiff was removed to an assessment centre at the PNG Naval Base on Manus Island ("the Centre"). Since his arrival on Manus Island, the plaintiff has resided at the Centre, where he is effectively detained. In the Stated Case for this Court, it is said that an officer of the PNG Immigration Department has the day-to-day management and control of the Centre and that Australia has appointed a co-ordinator to assist that officer, including by managing all Australian officials and service providers at the Centre. The extent to which Australia participates in the continued detention of the plaintiff is not evident from these facts or the Administrative Arrangements between PNG and Australia to which they relate7. In any event, the Stated Case does not raise questions as to who detains the plaintiff or the authority under which he is detained. The questions which are reserved for the determination of this Court concern the constitutional validity of provisions of subdiv B of Div 8 of Pt 2 of the Migration Act for the designation by the Minister of a country as a regional processing country and for the Minister's direction as to the regional processing country to which persons such as the plaintiff are to be taken; and the validity of the decisions made by the Minister to designate PNG as a regional processing country and to direct the removal of classes of UMAs, to one of which the plaintiff belongs. It may be noted that s 198B provides that an officer may, for a temporary purpose, bring a transitory person to Australia from a country or place outside Australia. Under s 5(1), "transitory person" includes a person who was taken to a regional processing country. Hayne Crennan Bell Migration Act provisions Part 2 of the Migration Act is entitled "Control of arrival and presence of non-citizens" and Div 8 of that Part "Removal of unlawful non-citizens etc". Subdivision A of Div 8 is headed "Removal" and subdiv B "Regional processing". Section 198(2) in subdiv A provides that an officer8 must remove from Australia, as soon as reasonably practicable, an unlawful non-citizen who, inter alia, has not made a valid application for a visa (sub-s (2)(c)(i)). As has been mentioned, the plaintiff was unable to make such an application. Section 198AD in subdiv B applies to a UMA who is detained under s 189, as the plaintiff was. Section 198AD(2) provides that an officer must, as soon as reasonably practicable, take a UMA from Australia to a regional processing country. The reason for subdiv B, and its provisions relating to the removal of persons to a regional processing country designated by the Minister, is stated in s 198AA: "This Subdivision is enacted because the Parliament considers that: people smuggling, and its undesirable consequences including the resulting loss of life at sea, are major regional problems that need to be addressed; and unauthorised maritime arrivals, including unauthorised maritime arrivals in respect of whom Australia has or may have protection obligations under the Refugees Convention as amended by the Refugees Protocol, should be able to be taken to any country designated to be a regional processing country; and it is a matter for the Minister and Parliament to decide which countries should be designated as regional processing countries; and 8 Migration Act 1958, s 5(1). Hayne Crennan Bell the designation of a country to be a regional processing country need not be determined by reference to the international obligations or domestic law of that country." Subdivision B was inserted into the Migration Act by the Migration Legislation Amendment (Regional Processing and Other Measures) Act 2012 (Cth), with effect from 18 August 2012. The Revised Explanatory Memorandum to that Act9 said that it was a legislative response to the decision of this Court in the Malaysian Declaration Case10, which was handed down on 31 August 2011. It was acknowledged by the defendants during the hearing of this matter that a consequence of the removal of persons to a regional processing country following upon the Minister's exercise of the power to designate that country could be that Australia does not meet its international obligations. That possibility and its consequences need not be gone into for the purposes of the Stated Case. Section 198AB(1) provides that the Minister may, by legislative instrument, designate that a country is a regional processing country. The only express condition for the exercise of this power is that "the Minister thinks that it is in the national interest to designate the country to be a regional processing country" (sub-s (2)). Sub-section (3)(a) provides that, in considering the national interest, the Minister: "must have regard to whether or not the country has given Australia any assurances to the effect that: the country will not expel or return a person taken to the country under section 198AD to another country where his or her life or freedom would be threatened on account of his or her race, religion, nationality, membership of a particular social group or political opinion; and the country will make an assessment, or permit an assessment to be made, of whether or not a person taken to the country under that 9 Australia, Senate, Migration Legislation Amendment (Regional Processing and Other Measures) Bill 2012, Revised Explanatory Memorandum at 2. 10 Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 244 CLR 144; [2011] HCA 32. Hayne Crennan Bell section is covered by the definition of refugee in Article 1A of the Refugees Convention as amended by the Refugees Protocol". The assurances referred to in sub-s (3)(a) are not required to be legally binding (sub-s (4)). Sub-section (3)(b) provides that, in the same process, the Minister: "may have regard to any other matter which, in the opinion of the Minister, relates to the national interest." Section 198AD(5) provides that, if there are two or more regional processing countries, the Minister must, in writing, direct an officer to take a UMA, or a class of UMAs, to the regional processing country specified by the Minister in the direction. If the Minister gives such a direction, the officer must comply with it (sub-s (6)). Section 198AE(1) provides that the Minister may, in writing, determine that s 198AD does not apply to a UMA if the Minister thinks it is in the public interest to do so. However, its provisions do not assume importance in this case. Subdivision B contains no reference to what is to happen to UMAs following their removal from Australia to a regional processing country. It contains no provisions dealing with the custody and detention of UMAs or the Certain "Administrative to refugee status. processing of Arrangements" were entered into between PNG and Australia in April 2013. However, the questions reserved for the Court are not addressed to these Administrative Arrangements. They turn upon the validity of provisions of subdiv B and decisions made pursuant to them. their claims The designation and the direction On 8 September 2012, Australia and PNG entered into a "Memorandum of Understanding Relating to the Transfer to and Assessment of Persons in Papua New Guinea, and Related Issues" ("the MOU"). On 9 October 2012, the Minister designated PNG to be a regional processing country. Clause 18 of the MOU contained assurances from PNG. In his statement of reasons as to why he thought it to be in the national interest to designate PNG as a regional processing country, the Minister said that he had regard to those assurances. On 9 and 10 October 2012 respectively, the House of Representatives and the Senate resolved to approve the designation. On 29 July 2013, the Minister gave a written direction that officers take UMAs of four classes – family groups, adult females who are not part of a family Hayne Crennan Bell group, adult males who are not part of a family group and unaccompanied minors – to PNG or to the Republic of Nauru, which earlier had been designated as a regional processing country. The conditions which were to be fulfilled for removal to either country were the same, namely if: facilities and services are available for the class of persons of which the person is a member; and there is vacant accommodation designated for the class of persons of which the person is a member and that vacant accommodation is greater than that available in [Nauru, in the case of PNG, and PNG, in the case of Nauru]; and this does not result in a family group that all arrived together on or after 19 July 2013 from [sic] being split". The questions reserved The first challenge made by the plaintiff is to the validity of ss 198AB and 198AD. Questions (1) and (2) ask whether each section is invalid on the ground that it is not supported by any head of power in s 51 of the Constitution. It is argued that neither the aliens power (s 51(xix)), nor the immigration (s 51(xxvii)) and external affairs (s 51(xxix)) powers, support those sections. Questions (3) and (4) are predicated upon ss 198AB and 198AD being valid. The questions are directed to the Minister's decisions to designate PNG as a regional processing country and to direct that UMAs of a specified class be taken to PNG. They ask whether these decisions are invalid. The plaintiff's principal argument with respect to these questions is that there were relevant considerations which the Minister was obliged to, but did not, take into account in reaching these decisions. Question (5) asks whether the proceedings are otherwise able to be remitted for determination to the Federal Court of Australia or the Federal Circuit Court of Australia. There is no dispute between the parties that the Federal Circuit Court, but not the Federal Court, has jurisdiction with respect to any remaining grounds for judicial review of the Minister's decision or the action of the officer in taking the plaintiff to PNG. Hayne Crennan Bell This Court may remit any part of a matter that is pending in the Court to any federal court that has jurisdiction with respect to the matter11. The effect of s 476B of the Migration Act is that this Court may not remit a matter that relates to a "migration decision" to the Federal Court unless the Federal Court has jurisdiction under s 476A(1)(b) or (c); this Court may only remit such a matter to the Federal Circuit Court (and it may only do so if that Court has jurisdiction under s 476). The decision to take the plaintiff to PNG is a migration decision12. It is not a decision in respect of which the Federal Court has jurisdiction under s 476A(1)(b) or (c); but the Federal Circuit Court has jurisdiction under s 476(1). This is so notwithstanding the terms of s 494AA(1)(e), which provides that certain proceedings relating to UMAs may not be "instituted or continued" in any court. Section 494AA(3) makes plain that that provision does not affect the jurisdiction of the Constitution. Section 494AA(1)(e) should not therefore be construed as limiting this Court's ability to remit matters to the Federal Circuit Court. the High Court under s 75 of The question as to the jurisdiction of the Federal Circuit Court may be answered in the affirmative. Whether an order for remittal should be made is a matter for a single Justice. Sections 198AB and 198AD and the aliens power The first enquiry is whether the provisions of subdiv B in question are laws "with respect to" the head of power concerning aliens, which is conferred by s 51(xix). The words "with respect to" require a relevance to or connection with the subject assigned by the Constitution to the Commonwealth Parliament13. Before the question of connection is considered, it may be necessary to characterise the law, by construing it and determining its legal operation and 11 Judiciary Act 1903 (Cth), s 44(1). 12 See Migration Act 1958, ss 5(1), 5E and 474 definitions. 13 Grannall v Marrickville Margarine Pty Ltd (1955) 93 CLR 55 at 77; [1955] HCA Hayne Crennan Bell effect14. In Chu Kheng Lim v Minister for Immigration15, Brennan, Deane and Dawson JJ (Mason CJ agreeing16) said that, as a matter of characterisation, laws which provide for the expulsion or deportation of non-citizens who are present in Australia without a visa are laws respecting that class of aliens and fall within the scope of the legislative power given by s 51(xix). If a law operates directly upon a matter forming part of a subject enumerated among the federal legislative powers, its validity could hardly be denied on the ground of irrelevance or lack of connection to the head of power17. In Al-Kateb v Godwin18, McHugh J observed that a law authorising the detention of aliens deals with the very subject matter of s 51(xix) and is not incidental to the aliens power. The same may be said of laws requiring their removal. In Lim, Gaudron J observed the direct connection between a law providing for the departure of aliens and the status of aliens19. Sections 198AB and 198AD operate to effect the removal of aliens from Australia. in Melbourne Corporation v The Commonwealth20, generally speaking, once a federal law has an immediate operation within a field assigned to the Commonwealth as a subject of legislative 14 Bank of NSW v The Commonwealth ("the Bank Nationalisation Case") (1948) 76 CLR 1 at 186-187; [1948] HCA 7; The Commonwealth v Tasmania (The Tasmanian Dam Case) (1983) 158 CLR 1 at 152; [1983] HCA 21; Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 at 368-369; [1995] HCA 16. 15 (1992) 176 CLR 1 at 25-26; [1992] HCA 64. 16 Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 10. 17 Melbourne Corporation v The Commonwealth (1947) 74 CLR 31 at 79; [1947] HCA 26. 18 (2004) 219 CLR 562 at 582-583 [39]; [2004] HCA 37. 19 Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 57; see also Plaintiff M76/2013 v Minister for Immigration and Multicultural Affairs and Citizenship (2013) 88 ALJR 324 at 358 [206]; 304 ALR 135 at 178; [2013] HCA 20 (1947) 74 CLR 31 at 79. Hayne Crennan Bell power, that is enough. On this approach, ss 198AB and 198AD are laws with respect to aliens. No further enquiry is necessary. The plaintiff argues for a different approach. He acknowledges that UMAs qualify as aliens and that the power conferred by s 51(xix) extends to legislation to exclude or deport aliens. The plaintiff does not deny that the relevant test for whether a law is with respect to a head of power is whether there is a sufficient connection between the law and the power. However, the plaintiff contends that for a law to be supported by s 51(xix), it is necessary for it to satisfy another test – one of proportionality – and that these provisions cannot do Sections 198AB and 198AD are laws which facilitate the removal of aliens from Australia by identifying a place to which they must be removed. The relevance of proportionality to characterisation of laws of this kind or to the question of whether there is a sufficient connection to the power to make laws respecting aliens is not immediately apparent. The relevance of proportionality might depend upon what is said to be the proportionality test to be employed and also upon views about the purpose of such tests. The plaintiff does not contend for a test of proportionality in addition to that of connection. Rather, he says that the former inheres in the latter. It is his contention that "proportionality may inform the question of whether a sufficient connection with a head of power exists in the first place." It is first necessary to understand what the plaintiff means by "a proportionality test". He uses the words "proportionality" and "reasonably appropriate and adapted" interchangeably. By themselves, these words do not convey a process of reasoning. They may mean different things about the effect of a law. Without further explication, they are little more than statements of conclusion and as such they may mask more than reveal what is being said and whether a test has been applied. The plaintiff does not explain the meaning of those words or identify a test of proportionality which he says must be applied. It is necessary to refer to his argument to glean what is spoken of and how it is said to operate on the provisions in question. The plaintiff submits that "the scheme" established by ss 198AB and 198AD goes significantly further than merely regulating the entry of aliens to, or providing for their removal from, Australia. His argument may be summarised Hayne Crennan Bell as follows: the scheme imposes a requirement of deportation to, and subsequent control at, a regional processing country for a purpose unconnected with the determination of status or entry rights under Australian law; this goes so far beyond what is necessary to control the entry to Australia of persons subjected to the scheme that it cannot be said to be directed to that purpose; ss 198AB and 198AD cannot be justified by the purpose of deterrence because the scheme established by them is so extreme in its operation that they are not reasonably appropriate and adapted to that end either; and the control that the scheme imposes upon persons after their removal from Australia cannot be said to be appropriate and adapted to that end. The "scheme" to which the plaintiff refers is the detention of UMAs in PNG, where their status as refugees may or may not be determined and where, it is contended, they may be subject to refoulement. The essential difficulty with this aspect of the plaintiff's argument is that neither ss 198AB and 198AD, nor subdiv B as a whole, makes any provision for these matters. At most, the references to the removal of UMAs to a regional processing country may imply that their refugee status is to be determined in that country and s 198B21 may imply some ability to bring a UMA to Australia temporarily. The subdivision says nothing else about what is to happen to such persons in regional processing countries, such as PNG. The plaintiff seeks to supplement his submissions regarding the statutory provisions in question by reference to facts relating to the Administrative Arrangements between Australia and PNG. Whatever relevance those facts may have to the decisions sought to be reviewed, they can have none to the questions relating to the constitutional validity of ss 198AB and 198AD. The character of those provisions and their connection to a head of power are determined by reference to their terms, operation and effect. It is the operation and effect of the themselves which fall for consideration, not Administrative provisions Arrangements which are made Administrative Arrangements between PNG and Australia can say nothing about the connection of the provisions in question to s 51(xix). The plaintiff's case for proportionality – that the sections do more than provide for the removal of aliens – therefore proceeds from a wrong premise. independently of them. 21 See fn 7. Hayne Crennan Bell At other points in his argument, the plaintiff refers to the use of proportionality as determining the limits of s 51(xix). In this regard, the plaintiff calls in aid what was said by Gaudron J in Lim22, where her Honour expressed the view that "a law imposing special obligations or special disabilities on aliens … which are unconnected with their entitlement to remain in Australia and which are not appropriate and adapted to regulating entry or facilitating departure … is not, in my view, a valid law under s 51(xix)". Her Honour was alone in Lim in expressing this view. Her Honour's reference to a law not being "appropriate and adapted" to facilitating departure might bring to mind a law which is not suitable to that end or which is unnecessary. So far as this may involve proportionality, it says nothing about the limits of s 51(xix), as the plaintiff contends. The kind of law which her Honour appears to have had in mind was one which made further provision with respect to aliens beyond their removal, and in doing so came within the operation of the incidental power. Sections 198AB and 198AD do neither of those things. There was reference to the use of proportionality to determine the limits of legislative power in Leask v The Commonwealth23, to which the plaintiff also refers. Brennan CJ there spoke of the use of proportionality in the circumstance where a law is challenged on the basis that it infringes a constitutional limitation, express or implied, which restricts a head of power24. It may be taken from his Honour's to Australian Capital Television Pty Ltd v The Commonwealth25 that his Honour had in mind the relevance of proportionality to a legislative restriction operating upon the implied freedom of communication in matters of politics and government. However, his Honour drew a distinction between the use of proportionality in such a context and its use to determine the character of a non-purposive law26. Nothing said in Leask lends support for the reference 22 (1992) 176 CLR 1 at 57. 23 (1996) 187 CLR 579; [1996] HCA 29. 24 Leask v The Commonwealth (1996) 187 CLR 579 at 593-595. 25 (1992) 177 CLR 106; [1992] HCA 45. 26 See also Leask v The Commonwealth (1996) 187 CLR 579 at 602-603 per Dawson J, 614-615 per Toohey J. Hayne Crennan Bell use of proportionality for which the plaintiff contends in this aspect of his argument. The plaintiff also seeks to argue that there is an inherent constitutional limitation on s 51(xix) which restricts the Commonwealth's capacity with respect to laws that operate on aliens. The limitation to which the plaintiff refers is to be found in Ch III. The plaintiff made a similar submission when seeking leave to further amend his Statement of Claim. The plaintiff sought to argue that the impugned sections do not authorise the Executive to, in effect, imprison persons in third countries against their will for an indefinite period. French CJ refused leave to amend on this point because the plaintiff's submission did not engage with the question of the invalidity of the provisions. In any event, as his Honour observed, the contention is untenable, because neither s 198AB nor s 198AD makes any provision for imprisonment in third countries. For the reasons given earlier, ss 198AB and 198AD are laws with respect to a class of aliens and are within s 51(xix). The plaintiff's challenges to their validity fail. It is not necessary to consider any other heads of power. Questions (1) and (2) should each be answered "No". The designation and direction decisions The decision to designate PNG The plaintiff submits, relying on Minister for Aboriginal Affairs v Peko- Wallsend Ltd27, that there were a number of considerations which were relevant to the Minister's decision to designate PNG as a regional processing country which were not taken into account and, as a result, the decision is invalid. The premise for the plaintiff's argument is that there are to be implied in subdiv B considerations which the Minister was obliged, as a matter of law, to take into account. The plaintiff lists a number of them. They include: Australia's international law obligations; the need to consult with the Office of the United Nations High Commissioner for Refugees ("the UNHCR") prior to designation; PNG's international obligations and its domestic law; PNG's capacity to implement its obligations; the framework, if any, for processing refugee claims in PNG; the possibility of indefinite detention; and the conditions in which UMAs would be detained. 27 (1986) 162 CLR 24 at 40; [1986] HCA 40. Hayne Crennan Bell The fundamental difficulty with the plaintiff's argument is that there is no mandatory condition for the exercise of the power of designation under s 198AB apart from the formation by the Minister of an opinion that it is in the national interest to do so. Section 198AB(2) expressly states that the "only condition" for the exercise of the power under sub-s (1) is that the Minister thinks that it is in the national interest to designate the country to be a regional processing country. What is in the national interest is largely a political question, as s 198AA(c) recognises. The only matter to which the Minister is obliged to have regard, in considering the national interest, is whether or not the country to be designated has given Australia any assurances as set out in s 198AB(3)(a). There is no issue in this case that such assurances were in fact given. In Peko-Wallsend, Mason J said28 that, if a statute "expressly states the considerations to be taken into account, it will often be necessary for the court to decide whether those enumerated factors are exhaustive or merely inclusive." With respect to s 198AB(2), it is plain from the singular condition stated for designation that the Minister is not obliged to take any other matter into account. In Peko-Wallsend, Mason J also said29 that, when a statute confers a discretion which is unconfined, the factors which may be taken into account are similarly unconfined. Section 198AB(3)(b) provides the Minister with a general discretion to have regard to other matters that, in the opinion of the Minister, relate to the national interest. What par (b) does not say is that the Minister is obliged to take any matter, other than those identified in par (a), into account. Thus, the Minister could, and did, consult with the UNHCR about designating PNG, but he was not obliged to do so. A failure to consider the matters said by the plaintiff to be relevant cannot spell invalidity. There is nothing in the text or scope of subdiv B that supports the implication of the further conditions for which the plaintiff contends. The plaintiff relies on what was said in Plaintiff M61/2010E v The Commonwealth (Offshore Processing Case)30 about the Migration Act more generally. It was said that, read as a whole, the Migration Act contains an "elaborated and interconnected set of statutory provisions directed to the purpose of responding to 28 (1986) 162 CLR 24 at 39. 29 (1986) 162 CLR 24 at 40. 30 (2010) 243 CLR 319 at 339 [27]; [2010] HCA 41. Hayne Crennan Bell the international obligations which Australia has undertaken in the Refugees Convention and the Refugees Protocol." It was also said that "the text and structure of the [Migration Act] proceed on the footing that the [Migration Act] provides power to respond to Australia's international obligations by granting a protection visa in an appropriate case and by not returning that person, directly or indirectly, to a country where he or she has a well-founded fear of persecution for a Convention reason." These statements were cited in the Malaysian Declaration Case31. There may be some doubt whether the provisions of subdiv B, which were inserted after these cases, can be said to respond to Australia's obligations under the Refugees Convention. Indeed, that is part of the plaintiff's complaint. This possibility does not assist the plaintiff's argument. Rather, it would follow that the conditions for which the plaintiff contends cannot be implied on the basis of any assumptions respecting the fulfilment by Australia of its international obligations. This ground for invalidity fails, as does that which relies upon the designation decision being legally unreasonable, in the sense explained in Minister for Immigration and Citizenship v Li32. The plaintiff's case for unreasonableness relies upon the Minister's failure to give weight to the matters which the plaintiff erroneously contends that the Minister was obliged to take into account. The plaintiff's argument that the Minister gave too much weight to other considerations was not developed. The plaintiff also argues that there was no evidence that PNG would fulfil its assurances and would promote the maintenance of a programme which was fair to UMAs. However, there was no statutory requirement that the Minister be satisfied of these matters in order to exercise the relevant power. They do not qualify as jurisdictional facts33. 31 Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 244 CLR 32 (2013) 249 CLR 332; [2013] HCA 18. 33 Minister for Immigration and Multicultural and Indigenous Affairs v SGLB (2004) 78 ALJR 992 at 998-999 [39]; 207 ALR 12 at 21; [2004] HCA 32; Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611 at 622 [31]; [2010] HCA 16. Hayne Crennan Bell The direction to take persons to PNG Section 198AD(2) obliges an officer to take a UMA to a regional processing country as soon as reasonably practicable. Where there are two or more regional processing countries, the Minister is to direct the officer to take a UMA or a class of UMAs to the regional processing country specified in the direction (sub-s (5)). The officer is obliged by sub-s (6) to comply with that direction. The Minister's direction divided UMAs into four classes. The direction provided, in effect, that members of those classes be taken to either PNG or Nauru, depending upon whether three conditions could be satisfied. The plaintiff's argument rests on the failure of the Minister to specify only one country to which the plaintiff, or a class of UMAs, should be taken. In the plaintiff's submission, s 198AD does not comprehend such uncertainty or vagueness34. Given that an officer must comply with a direction, there must be sufficient specification in the direction to enable the officer to comply with it. The three conditions which the direction placed on removal involved simple enquiries, not an evaluative process as the plaintiff contends. In the case of the plaintiff, as a single adult male, the effect of the direction was that he be taken to PNG, provided that there were facilities and services available for him there and that there was more accommodation for his class of UMAs there than in Nauru. Answers The questions reserved should be answered: Is s 198AB of the Migration Act 1958 (Cth) invalid on the ground that it is not supported by any head of power in s 51 of the Constitution? Answer: 34 King Gee Clothing Co Pty Ltd v The Commonwealth (1945) 71 CLR 184 at 196; [1945] HCA 23. Hayne Crennan Bell Is s 198AD of the Migration Act 1958 (Cth) invalid on the ground that it is not supported by any head of power in s 51 of the Constitution? Answer: Is the Minister's designation that PNG is a regional processing country made on 9 October 2012 under s 198AB of the Migration Act 1958 (Cth) invalid? Answer: Is the Minister's direction made on 29 July 2013 under s 198AD(5) of the Migration Act 1958 (Cth) invalid? Answer: (5) Are these proceedings otherwise able to be remitted for determination in the Federal Court of Australia or the Federal Circuit Court of Australia? Answer: The proceedings are otherwise able to be remitted for determination in the Federal Circuit Court of Australia. (6) Who should pay the costs of and incidental to this Stated Case? Answer: The plaintiff.

HIGH COURT OF AUSTRALIA DIANE McGRATH FINGLETON APPELLANT AND THE QUEEN RESPONDENT Fingleton v The Queen [2005] HCA 34 23 June 2005 ORDER Appeal allowed. Set aside the orders of the Court of Appeal of the Supreme Court of Queensland made on 26 June 2003 and in their place order: appeal allowed; conviction of the appellant quashed; and judgment and verdict of acquittal entered on both counts in the indictment. On appeal from the Supreme Court of Queensland Representation: B W Walker SC with S J Hamlyn-Harris for the appellant (instructed by Woods Prince Lawyers) D F Jackson QC with M J Copley for the respondent (instructed by Director of Public Prosecutions (Qld)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Fingleton v The Queen Courts and judicial system – Magistrates – Judicial officers' immunities – Immunity conferred upon magistrates in the performance or exercise of an administrative function or power conferred under an Act – Appellant Chief Magistrate proposed to remove Co-ordinating Magistrate from that position – Whether immunity extends to a criminal charge against appellant of unlawful retaliation against a witness. Criminal law – Unlawful retaliation against a witness – "Without reasonable cause" – Whether trial judge misdirected jury as to the meaning of "reasonable cause" in s 119B of the Criminal Code (Q) – Relevance of the meaning of the terms "detriment" and "retaliation" to an assessment of "without reasonable cause". Constitutional law (Cth) – Federal judicial power – Appellate jurisdiction of the High Court – Criminal matter – Grounds of appeal – Point not taken at trial or before Court of Criminal Appeal – Whether new ground of appeal can be raised before the High Court – Whether following trial point waived or spent – Whether raising new ground deprives proceedings of the character of an "appeal" for purposes of s 73 of the Constitution. Words and phrases – "appeal", "without reasonable cause", "detriment", "retaliation", "under an Act". Magistrates Act 1991 (Q), ss 10, 21A. Criminal Code (Q), ss 30, 119B, 620. Constitution, s 73. GLEESON CJ. The principal issue in this appeal concerns the protection and immunity conferred upon magistrates by s 21A1 of the Magistrates Act 1991 (Q) ("the Magistrates Act"), which provides: "A magistrate has, the performance or exercise of an administrative function or power conferred on the magistrate under an Act, the same protection and immunity as a magistrate has in a judicial proceeding in a Magistrates Court." In relation to criminal proceedings against a magistrate, the concluding words of that section direct attention to s 30 of the Criminal Code (Q) ("the Code"), which provides: "Except as expressly provided by this Code, a judicial officer is not criminally responsible for anything done or omitted to be done by the judicial officer in the exercise of the officer's judicial functions, although the act done is in excess of the officer's judicial authority, or although the officer is bound to do the act omitted to be done." The appellant was the Chief Magistrate in Queensland. Following a trial in the Supreme Court of Queensland, before Helman J and a jury, she was convicted of an offence against s 119B of the Code, which prohibits unlawful retaliation against a witness. An alternative charge of attempting to pervert the course of justice was not the subject of a verdict because of the conviction on the primary charge. The appellant was sentenced to a term of imprisonment. An appeal against conviction to the Court of Appeal of the Supreme Court of Queensland was dismissed2. The Court of Appeal reduced the appellant's sentence. The custodial part of the sentence has been served. At trial, and in the Court of Appeal, no point was taken concerning s 21A of the Magistrates Act, or s 30 of the Code. Those provisions were first raised by this Court when considering an application for special leave to appeal from the decision of the Court of Appeal. Special leave to appeal was granted. In the Court of Appeal, there was only one ground of appeal. It is an element of the offence created by s 119B of the Code that the proscribed retaliatory conduct is engaged in without reasonable cause. The sole ground of appeal was that no reasonable jury could have found beyond reasonable doubt an absence of reasonable cause in the appellant's conduct. In this Court, seven 1 Subsequent to the events that gave rise to these proceedings s 21A has been renumbered as s 51. It is convenient to refer to the statutory provisions as they were in force at the relevant time. 2 R v Fingleton (2003) 140 A Crim R 216. grounds of appeal are pressed, one of which is the same as the ground considered by the Court of Appeal. The first ground is as follows: "The provisions of s 119B of the Criminal Code (Qld) did not apply to the actions of the appellant; having regard to the provisions of s 30 of the Code, and s 21A of the Magistrates Act 1991 (Qld)." The respondent accepts that, if the proposition of law upon which that ground is based is correct, then the conviction was obtained in circumstances where there was no liability to conviction, and this Court would have power to set it aside. Senior counsel for the respondent acknowledged that the immunity now relied upon by the appellant exists for the public benefit and not for the private advantage of magistrates, and that if it applied in the case of the appellant it could not be waived. On that basis, the case being one in which the appellant may have had available to her a point of law which was a complete answer to both of the charges against her, the point may be raised for the first time in this Court, in accordance with the principles stated in Gipp v The Queen3 and Crampton v The Queen4. The same cannot be said of the other new grounds of appeal, but they can be left aside at this stage. It is appropriate to deal with the question of immunity first because, if the appellant's argument is correct, there should never have been a trial of the other issues in the case. In order to place the allegations against the appellant in the appropriate context, it is necessary to begin by examining the functions and powers of the appellant under the Magistrates Act. It was her conduct in relation to those functions and powers that allegedly contravened s 119B of the Code, and also allegedly involved an attempt to pervert the course of justice. It is also necessary to take note of certain other features of the Magistrates Act, which formed part of the background to the appellant's conduct. The Magistrates Act The following references are to the legislation in its form at the time of the alleged offences. It has since been amended in certain respects. The Magistrates Act is described in its long title as "[a]n Act relating to the office of Magistrates, the judicial independence of the magistracy, and for related purposes". (1998) 194 CLR 106. (2000) 206 CLR 161. Part 2 of the Magistrates Act deals with the appointment, jurisdiction, and powers of magistrates. Section 4 states the qualifications for appointment, and s 5 provides for appointment, by the Governor in Council, of "as many Magistrates as are necessary for transacting the business of the Magistrates Courts." Before making a recommendation to the Governor in Council about an appointment, the Minister must first consult with the Chief Magistrate. Sub- sections (3) and (4) provide that the appointment of a magistrate must state the place where the magistrate is to sit and the period (not longer than five years) for which that determination is to apply, provided that the Chief Magistrate and the magistrate may agree upon a change of location before the expiration of such period. Section 7 provides: "A Magistrate may exercise, throughout the State, all the jurisdiction, powers and functions conferred on a Magistrate, or on 2 justices, by or under any law of the State." No doubt the words "throughout the State" explain the purpose of the provision, which is related to concepts of territorial limitations of jurisdiction that were still reflected in the Justices Act 1886 (Q) ("the Justices Act") in the form it took in 2002. Section 19 of the Justices Act referred to the exercise of summary jurisdiction in certain circumstances by two or more justices. Part 3 of the Magistrates Act deals with the Chief Magistrate. Section 10, which describes the functions of the Chief Magistrate, provides: The Chief Magistrate is responsible for ensuring the orderly and expeditious exercise of the jurisdiction and powers of Magistrates Courts. Subject to this Act and to such consultation with Magistrates as the Chief Magistrate considers appropriate and practicable, the Chief Magistrate has power to do all things necessary or convenient to be done for ensuring the orderly and expeditious exercise of the jurisdiction and powers of Magistrates Courts, including, for example – determining the Magistrates who are to constitute Magistrates Courts at particular places appointed under section 22B(1)(c) of the Justices Act 1886 or who are to perform particular functions; and issuing directions with respect to the practices and procedures of Magistrates Courts; and allocating the functions to be exercised by particular Magistrates; and nominating a Magistrate to be a supervising Magistrate or a coordinating Magistrate for the purpose of the allocation of work of the Magistrates Court. Subsection (2) does not authorise the Chief Magistrate to promote a Magistrate. The Chief Magistrate must not make a determination under subsection (2)(a) about the place at which a magistrate is to constitute a Magistrates Court unless the Chief Magistrate – first – consults with the magistrate; and gives the magistrate written notice of the proposed maximum period that the magistrate is to constitute a Magistrates Court at the place; and the has sufficient and magistrate's personal circumstances and all other relevant considerations. reasonable regard The Chief Magistrate must give a magistrate written notice of a determination under subsection (2)(a) stating – the place the magistrate is to constitute a Magistrates Court; and the period Magistrates Court at the place; and the magistrate to constitute the the reasons for the determination. However, subsection (4) does not apply if – circumstances, because of urgent the Chief Magistrate makes a determination (a 'temporary determination') under subsection (2)(a) about the place at which a magistrate is to constitute a Magistrates Court; and (b) under the temporary determination, the magistrate is to constitute a Magistrates Court at the place for no longer than 3 months. To remove doubt, it is declared that subsection (4) does not affect a condition of appointment or agreement under section 5(3) or (4). The Chief Magistrate may discipline by way of reprimand a magistrate who, to the Chief Magistrate's satisfaction – is seriously discharge of the administrative duties of office; or incompetent or inefficient the is seriously negligent, careless or indolent in the discharge of the administrative duties of office; or is guilty of misconduct; or is absent from duty without leave or reasonable excuse; or (e) wilfully fails to comply with a reasonable direction given by the Chief Magistrate or a magistrate authorised to give the direction; or is guilty of conduct unbecoming a magistrate. If action is contemplated under subsection (8)(d), the Chief Magistrate may appoint a medical practitioner to examine and report on the mental and physical condition of the Magistrate, and may direct the Magistrate to submit to the examination. If the Chief Magistrate reprimands a Magistrate, the Chief Magistrate must immediately submit a written report on the matter to the Minister. (11) Action taken by the Chief Magistrate under subsection (8) does not affect the operation of sections 15 and 17." Section 10(2) is of central importance in the present case. At the appellant's trial, Helman J directed the jury that, in the context of s 10(2), nominating a supervising or coordinating magistrate effectively meant appointing a magistrate to that position. That was not in dispute. By virtue of s 25(1) of the Acts Interpretation Act 1954 (Q), a power to appoint includes a power to remove or suspend. It was a demand by the appellant made to a coordinating magistrate that he show cause why he should not be removed from that position that constituted the conduct of the appellant which gave rise to the charges against her. The principal question for decision is whether that conduct was "in the performance or exercise of an administrative function or power conferred on the magistrate under an Act" within the meaning of s 21A of the Magistrates Act. As will appear from a recital of the facts, sub-ss (2)(a), (4), (5) and (6) are relevant to an understanding of the background to the appellant's dealings with the coordinating magistrate in question, as are the provisions of Pt 4 of the Magistrates Act. Section 22B of the Justices Act provided for the appointment of districts, and divisions of districts, for the purposes of Magistrates Courts, and for the appointment of places for the holding of Magistrates Courts. Magistrates were empowered to sit at more than one place (s 22B(1A)). Subject to the provisions of s 5 of the Magistrates Act, the Chief Magistrate's responsibilities included the assigning of magistrates to localities throughout the State of Queensland. Obviously, the discharge of that responsibility involved decisions that could affect magistrates significantly. The evidence showed that there was a history of tension between the Chief Magistrate, and her predecessor, on the one hand, and some individual magistrates and the Magistrates Association on the other hand, about that issue. There had been a series of administrative law challenges to such decisions. Part 4 evidently was a legislative response to the problem. Part 4 established a judicial committee to review certain determinations of a Chief Magistrate at the request of a magistrate aggrieved by a reviewable determination (ss 10A, 10B). A "reviewable determination" included a determination under s 10(2)(a) about the place at which a magistrate was to constitute a Magistrates Court (s 3). The members of the committee were to be the Chief Justice of the Supreme Court or a judge of the Supreme Court nominated by the Chief Justice, the Chief Judge of the District Court or a District Court judge nominated by the Chief Judge, and another judge nominated by the Chief Justice (s 10C). The committee was to consider the merits of a reviewable determination and either affirm it or substitute its own determination (s 10E). The committee could determine its own procedures, and the Chief Justice was empowered to issue directions as to procedures (s 10F). The events that gave rise to this case arose out of a magistrate's request for review of a determination by the appellant under s 10(2)(a). The Chief Justice issued a direction that evidence in the proceedings was to be given by affidavit. It was the appellant's response to the making of an affidavit by a coordinating magistrate that resulted in the charges against her. Parts 5 and 6 are presently immaterial. Part 7 contains general provisions including provisions relating to terms and conditions of what was described as the "employment" of magistrates (s 18). It includes s 21A, which appears at the commencement of these reasons. Section 21A was introduced by the Justice Legislation (Miscellaneous Provisions) Act (No 2) 1999 (Q). By the same legislation, the District Court Act 1967 (Q) was amended by the insertion of s 28AA, which provided that a judge has, in the performance or exercise of an administrative function or power conferred on the judge under an Act, the same protection and immunity as a judge in a judicial proceeding in the court. The Explanatory Notes stated: "Clause 18 [of the Bill] inserts a new s 28AA granting protection and immunity to a judge of District Courts following concern that was expressed by judges about the potential personal liability of judges who authorise the use of surveillance and listening devices and perform or exercise other administrative functions or powers conferred on them under an Act. In the absence of any specific legislative provisions, judges are exposed to potential personal liability. Federal judges exercising these functions and powers are granted like situations. Accordingly, the amendment provides the same protection and immunity to judges in the performance or exercise of administrative functions as they have in judicial proceedings in their courts." immunity The facts The appellant's predecessor as Chief Magistrate was Mr Deer. One of the coordinating magistrates nominated by the appellant under s 10(2)(d) of the Magistrates Act was Mr Gribbin, a magistrate at Beenleigh. The position carried with it an annual allowance of $2,000. In September 2002, Mr Gribbin was also Vice-President of the Magistrates Association. On 16 July 2002, the appellant determined that a magistrate, Ms Thacker, should be transferred to Townsville. On 30 July 2002, Ms Thacker filed an application for a review of that determination by the judicial committee. Ms Thacker wrote to the Magistrates Association seeking assistance with her application. In particular, she sought information and evidence relating to the history of transfers of magistrates. On 12 August 2002, Mr Gribbin provided an affidavit to Ms Thacker's solicitors for use in the review proceedings. A copy was given to the appellant's solicitors on 16 August 2002. The appellant made an affidavit in reply on 30 August 2002. In early September 2002, there was friction between the appellant and Mr Gribbin concerning the matter of the agenda for a meeting of coordinating magistrates which was due to take place on 19 September 2002. On 18 September 2002, the appellant sent Mr Gribbin by email a letter calling on him to show cause why she should not exercise her power to withdraw his nomination as a coordinating magistrate and thereby remove him from that position. The day before she sent the letter the appellant obtained legal advice from a solicitor, Mr Searles, who had been retained by the Crown Solicitor to advise the appellant. The appellant showed Mr Searles a draft of a letter which, if sent, would have removed Mr Gribbin. Mr Searles advised that the letter be altered to give Mr Gribbin an opportunity to show cause why he should not be removed. The material parts of the letter were as follows: "Could you also explain to me why you sought [sic] fit to supply an affidavit in the matter of Ms Thacker's Review of my decision to transfer her to Townsville. You were critical in it of both Mr Deer and myself in relation to transfer matters. Is this a matter which you feel should be discussed by you in an affidavit before the Judicial Committee, when you have never raised it with me personally or at a Co-ordinating Magistrate's meeting? In the circumstances, I feel that I do not have your confidence in my leadership abilities. No other magistrate, certainly not a co-ordinating magistrate has seen fit to enter into any such matters. In fact, in the matter of Payne v Deer, I specifically refused to supply an affidavit to Ms Payne's Solicitors because of the need to be seen not to be in dispute with the then Chief Magistrate. Further, you circulated all other co-ordinating magistrates (except Mr Hine and with no reference to myself), in relation to a proposed agenda item for the forthcoming co-ordinating magistrates meeting. The agenda is, in the end, a matter for my discretion, following consultation with the other Co-ordinating magistrates. No-one put to me that such an item should not be on the agenda. I consider that action on your part, again, to be disloyal to the leadership of the magistracy and disruptive of the morale of the magistracy. The position of Co-ordinating Magistrate in the Queensland Magistracy is a privileged position. I regularly meet with all Co- ordinating Magistrates who give input into the administration of the courts. Whilst constructive criticism will always be appreciated, there must be loyalty to the Chief Magistrate. As stated, you sought to agitate a view about an item on the agenda for the meeting beginning tomorrow, without my knowledge. This and the other example I refer to above, manifest to me a clear lack of confidence by you in me as Chief Magistrate. In the circumstances, I ask you to show cause, within seven days, as to why you should remain in the position. In the circumstances, it is not appropriate that you attend the Co- ordinating Magistrates meeting this Thursday and Friday at Central Courts." Criminal Code, s 119B Section 119B of the Code provides: "A person who, without reasonable cause, causes, or threatens to cause, any injury or detriment to a judicial officer, juror, witness or a member of the family of a judicial officer, juror or witness in retaliation because of – anything lawfully done by the judicial officer as a judicial officer; or anything lawfully done by the juror or witness in any judicial proceeding; is guilty of a crime. Maximum penalty – 7 years imprisonment." The offence involves causing or threatening harm by way of retaliation without reasonable cause. In the conduct of the present case at trial, the elements of retaliation and of absence of reasonable cause were treated as being separate, but related factually. Ordinarily, causing or threatening harm to a witness in retaliation because of something lawfully done by the witness in judicial proceedings would also be without reasonable cause. It is not mere retaliation that attracts the operation of the section. It is causing or threatening injury or detriment in retaliation because of something lawfully done. The occasions on which there would be reasonable cause for such conduct might, in practice, be relatively rare. The qualification, "without reasonable cause", is not related to purely objective conduct. It is related to purposive conduct, that is to say conduct causing or threatening harm in retaliation for lawful conduct by a judicial officer, juror, or witness. As will appear, in the way in which the prosecution and defence cases were conducted at trial, the question of how s 119B operates in a situation where, objectively, there may have been reasonable cause to take or foreshadow some action which would involve detriment, but subjectively a threat was made for the retaliatory purpose described in the section, was not a subject of argument. Nor was it a subject of argument in the Court of Appeal. The issues at trial and in the Court of Appeal The trial at which the appellant was convicted was a second trial, which followed immediately an earlier trial at which the jury could not agree upon a verdict. Before the first trial there was a directions hearing. Section 592A of the Code provides: If the Crown has presented an indictment before a court against a person, a party may apply for a direction or ruling, or a judge of the court may on his or her initiative direct the parties to attend before the court for directions or rulings, as to the conduct of the trial. (2) Without limiting subsection (1) a direction or ruling may be given in relation to – the quashing or staying of the indictment; or deciding questions of law including the admissibility of evidence and any step that must be taken if any evidence is not to be admitted." No mention was made, either at the directions hearing, or at the trial, of s 21A of the Magistrates Act or s 30 of the Code. No application was made to quash or stay the indictment. The form of the indictment was such that, on its face, it simply alleged a breach of s 119B without revealing any facts relevant to the application of s 21A or s 30. However, at the directions hearing, counsel and the trial judge discussed particulars of the indictment that had been furnished by the prosecution. It is evident, from the record of the directions hearing, that the facts relevant to an argument based on s 21A and s 30 either appeared from those particulars or were agreed between the parties. It was common ground that the appellant was Chief Magistrate, that Mr Gribbin was a coordinating magistrate, that Mr Gribbin had furnished an affidavit to the judicial committee in support of an application by another magistrate for a review of a determination by the appellant under s 10(2) of the Magistrates Act, that the appellant had sent Mr Gribbin the letter of 18 September 2002, and that it was her conduct in so doing that constituted the alleged contravention of s 119B and the alleged attempt to pervert the course of justice. If the appellant's present argument is correct, then it was only necessary to identify her functions and powers under the Magistrates Act in order to reach the conclusion that she could not be held criminally responsible for the conduct in question. There was no fact in issue requiring the decision of a jury. At the directions hearing, counsel for the appellant, after referring to the particulars furnished by the prosecution, said: "But apart from ... facts [about the relationship between the appellant and Mr Gribbin] that put the letter [of 18 September] in context, it would seem the only issues at the trial – the only substantial issues will be the purpose with which she sent the letter on the 18th of September, her intent in sending the letter, and whether there was reasonable cause with respect to the first charge. There are other issues but it would seem on the facts that we have there's not going to be much in contention. They will be the central issues." At the trial, at the conclusion of the case for the prosecution, counsel for the appellant opened the defence case to the jury, and then called the appellant as his first witness. The opening was consistent with what had been said at the directions hearing. The appellant gave evidence about the matters referred to in the letter of 18 September, and the advice she received from Mr Searles about the draft letter. She denied that she sent the letter with intention of deterring Mr Gribbin and other magistrates from supporting Ms Thacker's case. When asked why she sent the email, she said that there had been friction between her and Mr Gribbin, that she was surprised and hurt by what she regarded as the unfair criticisms of her contained in his affidavit, that she needed the confidence and loyalty of a person in his position, and that his conduct showed she did not have that confidence and loyalty. She denied "absolutely and unequivocally" that she sent her letter "as a payback" for Mr Gribbin's support of Ms Thacker. In his final address to the jury, counsel for the appellant identified "three matters in dispute: whether what [the appellant] did was to threaten to cause a detriment, whether it was a detriment; whether it was done without reasonable cause; and whether it was done in retaliation." As to the question of reasonable cause and retaliation, counsel invited the jury to consider a number of matters, including the Chief Magistrate's need to have a good working relationship with a coordinating magistrate. Counsel for the prosecution contended that the threat to remove Mr Gribbin implicit in the requirement to show cause was an abuse of power. It was not made because of any lack of competence or an inability to perform his duties. Counsel for the prosecution invited the jury to find that "[the appellant] just wanted to humiliate [Mr Gribbin], strip him of that job as a payback and as an example to anyone minded to do anything similar." She argued that "it is unreasonable in the extreme to retaliate against someone who is only telling the truth, who is only giving everything they know in an affidavit to a Judicial Committee to assist that Judicial Committee to do justice between the parties who are the litigants before it." In summing-up, the trial judge told the jury that the prosecution had to establish beyond reasonable doubt "that the accused made the threat to Mr Gribbin in retaliation – that is, as a repayment in kind, or requital, or reprisal – because of his providing the affidavit as he was entitled in law to do." The prosecution case, the judge said, was that the accused was a vengeful person and "that the accused wanted to humiliate Mr Gribbin for providing the affidavit, as a payback, as a punishment, and ... to deter others from doing such a thing." At the conclusion of the summing-up, neither counsel sought any redirections or made any complaint about the way the issues were left to the jury. The sole ground of appeal against conviction to the Court of Appeal was that no reasonable jury could have found beyond reasonable doubt an absence of reasonable cause. As the case was conducted at trial, there was a strong relationship between the issues of retaliation and reasonable cause. This was reflected in the Court of Appeal's statement: "The prosecution case at the trial was that the appellant's claim that in sending the email she was acting to resolve a breakdown in their working relationship was a contrivance designed to conceal her true purpose, which was to 'pay back' or exact retribution from Mr Gribbin for having provided the affidavit in the Thacker application." The Court of Appeal analysed the evidence in the light of the way the trial had been conducted, and the issues as left to the jury. Bearing in mind that there was no criticism, either at trial or on appeal, of the trial judge's directions, that is not surprising. The members of the Court of Appeal (McPherson, Davies and Williams JJA) expressed their conclusion by saying that they had "satisfied themselves that on the evidence it was objectively open to the jury to decide that the appellant acted as she did with a view to punishing Mr Gribbin rather than resolving any difficulty supposed to exist between them of working together in performing their respective functions." It would have been possible for both the prosecution and the defence cases to have been framed in a more complex fashion. At one point in his final address to the jury, counsel for the appellant appeared to accept that, on the retaliation issue, the prosecution only had to prove that retaliation was one of the reasons for the appellant's conduct. That, however, was not the way the case for the prosecution was put. The prosecutor made a blunt accusation that retaliation was the reason for the conduct, and that is how the trial judge left the case to the jury. Similarly, from the defence point of view, it might have been possible to go into greater detail about the administrative complexities facing the appellant, and the context of workplace relations in which she had to resolve her dispute with Mr Gribbin. At an appellate level, it may often appear that the issues at a jury trial have been over-simplified. In considering the way the prosecution case was put, it is important not to overlook the fact that there were two charges against the appellant. No verdict was taken on the charge of attempting to pervert the course of justice, because it was an alternative to the first charge. Even so, the presence of the alternative charge probably explains the view of the facts for which the prosecution contended. There was no suggestion, either in the addresses by counsel or in the summing-up, that the prosecution case as to the appellant's intention in sending the letter to Mr Gribbin was put in alternative ways, or that the jury were being invited to consider a number of different possibilities. The allegation was that the appellant just wanted to humiliate and punish Mr Gribbin, thereby exacting retribution against him and at the same time sending a message to other magistrates as to what might happen to them if they crossed the Chief Magistrate, and in particular if they supported Ms Thacker's case against the Chief Magistrate. The allegation was that this was purely a matter of "payback" and was not in any respect a bona fide attempt to resolve an administrative problem that had arisen within the court. Neither side put to the jury an intermediate possibility, such as that the appellant might have had both a genuine purpose of resolving an administrative issue that arose out of a breakdown of her relations with Mr Gribbin, but at the same time a desire to exact retribution for his support for Ms Thacker and to assert her authority as a warning to other potentially rebellious magistrates. Because of the way the case was fought, the trial judge was not asked to give any directions, and gave no directions, to the jury as to the legal consequences of such a view of the facts. On the s 119B charge, the prosecution case was that the resolution of an administrative problem resulting from a breakdown in personal relations was no part of the true explanation for the appellant's conduct, and was therefore irrelevant to the question whether she acted without reasonable cause. There is a legal proposition, or assumption, involved in that, but it was not the subject of argument. The defence case was that a desire to deal with such a problem was the sole explanation of the appellant's conduct, and therefore she acted with reasonable cause. Those competing approaches were consistent with the approaches taken with respect to the charge of attempting to pervert the course of justice. If the appellant had argued that, even if the prosecution view of the facts were true, she had a legal answer to the s 119B charge because objectively there was cause to consider Mr Gribbin's removal, even if it were not an operative cause of her conduct, that would still have left the alternative charge to be answered. Furthermore, if the appellant were now to be permitted to raise such an argument in this Court, success on that point alone would ordinarily result in an order for a new trial, since there has never been a verdict on the second count. Criminal Code, s 30 The criminal law of Queensland was codified in 1899. Save for the fact that it is now expressed in gender-neutral terms5, s 30 remains in its original form. The section is concerned with criminal responsibility, not with civil liability. The Code defines "criminal responsibility" to mean "liability to punishment as for an offence"6. Thus, the provision that a judicial officer is not criminally responsible for anything done or omitted to be done in the exercise of the officer's judicial functions means that a judicial officer does not commit an offence, and is not liable to punishment, by reason of an act or omission that falls within the section. The opening words of s 30 contain an important qualification to the immunity. Section 120 of the Code, which refers in terms to conduct on the part of a holder of judicial office, exposes judicial officers to criminal punishment for various forms of corruption. That qualification is consistent with the common law7. Section 136 is another example of an express provision of the kind referred to in s 30. However, neither s 119B, nor s 140 (which deals with attempting to pervert the course of justice), contains the explicit language necessary to engage the qualification to s 30. It was not suggested in argument that the introductory qualification to s 30 touches the present case. 5 As authorised by ss 7 and 24 of the Reprints Act 1992 (Q). 6 Criminal Code, s 1. 7 Sirros v Moore [1975] QB 118 at 132 per Lord Denning MR. The Code now defines "judicial officer". The definition was inserted, with effect from 19 July 2002, by the Criminal Law Amendment Act 2002 (Q). The Explanatory Notes to the Bill said: "A new definition of 'judicial officer' is now included. As well as judges or magistrates the definition of 'judicial officer' includes members of tribunals, persons conducting hearings of the Crime and Misconduct Commission, arbitrators and umpires." That reflects the view, which was common ground in this appeal, that, from the outset, "judicial officer" in s 30 included magistrates. In any event, it certainly included magistrates by September 2002. In dealing generally, and in the same manner, with all "judicial officers", s 30 put aside distinctions between various levels in the judicial hierarchy which existed at common law in relation to judicial immunity. Those distinctions attracted strong criticism in the United Kingdom from the Court of Appeal in Sirros v Moore8 and the House of Lords in In re McC (A Minor)9. Section 30 treats all judicial officers in the same way, and confers immunity from criminal responsibility for acts or omissions by the judicial officer in the exercise of the officer's judicial functions, even where an act done is in excess of authority, or an officer is bound to do an act omitted. The immunity provided by s 30 is limited, not only by the introductory words of the section, but also by the words which confer the immunity. It applies only to acts or omissions in the exercise of judicial functions, although conduct in excess of authority has the benefit of the protection. The Code's use of the words "excess of authority" reflects what courts applying the common law have held to be the sense in which "jurisdiction" is used in the context of judicial immunity, that is to say, "the broad and general authority conferred upon [a judicial officer's] court and upon [the judicial officer] to hear and to determine issues between individuals or between individuals and the Crown."10 We are concerned with the application of the Code, not the common law. Even so, it is material to note the policy of the common law, reflected also in the Code. Most discussion of judicial immunity concerns the possibility of civil liability, including liability for damages, at the suit of an aggrieved litigant. The general principle is as stated by Lord Denning MR in Sirros v Moore11: "Ever since the year 1613, if not before, it has been accepted in our law that no action is maintainable against a judge for anything said or 10 Nakhla v McCarthy [1978] 1 NZLR 291 at 301. 11 [1975] QB 118 at 132. done by him in the exercise of a jurisdiction which belongs to him. The words which he speaks are protected by an absolute privilege. The orders which he gives, and the sentences which he imposes, cannot be made the subject of civil proceedings against him. No matter that the judge was under some gross error or ignorance, or was actuated by envy, hatred and malice, and all uncharitableness, he is not liable to an action." An allegation of judicial misconduct by a dissatisfied litigant often, perhaps even typically, will be accompanied by an accusation of malice or want of good faith in the exercise of judicial authority. In In re McC (A Minor)12, Lord Bridge of Harwich said: "It is, of course, clear that the holder of any judicial office who acts in bad faith, doing what he knows he has no power to do, is liable in damages. If the Lord Chief Justice himself, on the acquittal of a defendant charged before him with a criminal offence, were to say: 'That is a perverse verdict', and thereupon proceed to pass a sentence of imprisonment, he could be sued for trespass. But, as Lord Esher MR said in Anderson v Gorrie13: 'the question arises whether there can be an action against a judge of a court of record for doing something within his jurisdiction, but doing it maliciously and contrary to good faith. By the common law of England it is the law that no such action will lie.'" This immunity from civil liability is conferred by the common law, not as a perquisite of judicial office for the private advantage of judges, but for the protection of judicial independence in the public interest. It is the right of citizens that there be available for the resolution of civil disputes between citizen and citizen, or between citizen and government, and for the administration of criminal justice, an independent judiciary whose members can be assumed with confidence to exercise authority without fear or favour. As O'Connor J, speaking for the Supreme Court of the United States, said in Forrester v White14, that Court on a number of occasions has "emphasized that the nature of the adjudicative function requires a judge frequently to disappoint some of the most intense and ungovernable desires that people can have." She said that "[i]f judges were personally liable for erroneous decisions, the resulting avalanche of suits ... would provide powerful incentives for judges to avoid rendering decisions likely to provoke such suits." 12 [1985] AC 528 at 540. 13 [1895] 1 QB 668 at 670. 14 484 US 219 at 226-227 (1988). This does not mean that judges are unaccountable. Judges are required, subject to closely confined exceptions, to work in public, and to give reasons for their decisions. Their decisions routinely are subject to appellate review, which also is conducted openly. The ultimate sanction for judicial misconduct is removal from office upon an address of Parliament. However, the public interest in maintaining the independence of the judiciary requires security, not only against the possibility of interference and influence by governments, but also against retaliation by persons or interests disappointed or displeased by judicial decisions. The immunity lie behind same considerations from criminal responsibility, of the kind and to the extent conferred by s 30 of the Code. At common law, judicial officers enjoy no immunity or protection from criminal responsibility for their extra-judicial conduct, and even in respect of their judicial conduct there are well-established limits to their immunity. Judicial corruption of the kind dealt with in s 120 of the Code is an obvious example. Subject to those limitations, however, the public policy which supports immunity from civil liability even in respect of conduct alleged to be malicious and lacking in good faith extends to immunity from criminal responsibility. In Yeldham v Rajski15, a litigant charged a judge with contempt of court (a criminal offence) alleging that the judge knowingly and wilfully abused the process of the court and interfered with the course of justice. The allegations arose out of the way in which the judge had disposed of an application for leave to prosecute a witness for perjury. The New South Wales Court of Appeal dismissed the proceedings, on the ground that the judge was entitled to invoke judicial immunity. Hope A-JA, with whom "The basis of the immunity of judges from civil proceedings in respect of their judicial acts, which has been part of the law for centuries, is based on high policy which has been put in a number of ways but in essence is that the immunity is essential to the independence of judges. It is a policy designed to protect the citizen and not merely to give protection to judges. As it seems to me this policy is as equally applicable to criminal proceedings for the acts of judges, in the exercise of their judicial functions, as it is in respect of civil proceedings. ... If the law were that any disgruntled litigant could charge a judge with contempt for being wrong and mala fide in his conclusion, or in arriving at the conclusion without any or any sufficient evidentiary basis, the independence required of judges would be greatly eroded." 15 (1989) 18 NSWLR 48. 16 (1989) 18 NSWLR 48 at 69. Because the present case does not fall to be determined under the common law, it is unnecessary to explore the precise boundaries of the common law immunity from criminal responsibility in the exercise of judicial functions17. The boundaries of the immunity given by s 30 of the Code are to be found in the language of the section. It was not argued that the allegations of bad faith and malice made against the appellant in the conduct of the case against her at trial, if accepted, would defeat what would otherwise be the operation of s 30, either alone or as picked up by s 21A of the Magistrates Act. Nor are we concerned with the kind of issue that arose on the facts of Yeldham v Rajski, concerning the dividing line between the exercise of judicial and administrative or ministerial functions. Some of the powers conferred by s 10 of the Magistrates Act may be so closely allied to the adjudicative function that they ought not to be regarded as purely administrative. It is unnecessary to consider whether s 30 alone would extend to the exercise of such powers because, for the reasons given below, they are covered by s 21A of the Magistrates Act. Magistrates Act, s 21A This section provides that in performing or exercising an administrative function or power conferred under an Act, a magistrate has the same protection and immunity as a magistrate has in a judicial proceeding in a Magistrates Court. Where what is involved is alleged criminal responsibility, the protection and immunity of a magistrate in judicial proceedings is that conferred by s 30 of the Code. Section 30 means that a magistrate is not criminally responsible for anything done by the magistrate in the exercise of the magistrate's judicial functions, although the act done is in excess of the magistrate's judicial authority. By conferring the same protection and immunity in respect of administrative functions or powers, s 21A has the consequence that a magistrate is not criminally responsible for anything done or omitted to be done by the magistrate in the exercise of an administrative function or power conferred on the magistrate under an Act, although the act done is in excess of the magistrate's administrative authority. This, of course, is subject to the qualification contained in the opening words of s 30: "[e]xcept as expressly provided by this Code". The legislative history of s 21A has been referred to above. A similar legislative provision applies to judges. While the legislative changes do not appear to have been directed solely to criminal responsibility, and the Explanatory Notes relating to District Courts spoke of "the potential personal liability of judges" in general terms, they embraced the matter of criminal responsibility, and proceeded from a concern that, because judicial officers were given by that might be regarded as administrative rather than judicial, the immunity conferred by s 30 required legislation some responsibilities 17 See Olowofoyeku, Suing Judges: A Study of Judicial Immunity, (1993) at 74-77. expansion. The particular subject that raised concern was the exercise of power to authorise the use of surveillance and listening devices. It was pointed out that federal judges, exercising that power, had an immunity, and it was considered necessary that State judicial officers should be in the same position. While that was the matter that prompted legislative consideration of the wider topic, it is clear that s 21A extends beyond the function of authorising the use of surveillance and listening devices, to all administrative functions or powers conferred on a magistrate under an Act. In the absence of s 21A of the Magistrates Act, there might have been room for argument about whether s 30 applied to one of the most common of the functions of a magistrate, that is to say, deciding, when a person is charged with an indictable offence, whether the person should or should not be committed for trial. It has often been held that this "is essentially an executive and not a judicial function"18. On the other hand this Court, in R v Murphy19, described the function as sui generis, and as having the closest, if not an essential, connexion with an actual exercise of judicial power. That question apart, there are many examples of Queensland statutes which confer on magistrates functions or powers that are commonly described as administrative rather than judicial. The following examples were given in argument. It is common for statutes to confer on a magistrate the power to issue a search warrant. We were informed that, in 2002, there were 78 such statutes in Queensland. The Assisted Students (Enforcement of Obligations) Act 1951 (Q) empowered magistrates to approve the execution of a contract by a minor. Under the City of Brisbane Act 1924 (Q) a magistrate sits on an employment appeals tribunal. Magistrates have supervisory responsibilities under the Community the Police Powers and Services (Aborigines) Act 1984 (Q). Responsibilities Act 2000 (Q), a magistrate may extend the prescribed detention period for the purposes of questioning a suspect. No doubt many other examples could be found. Under It is not for this Court to decide the wisdom or fairness of the legislative policy that led the Queensland Parliament to extend the ambit of the immunity from criminal responsibility conferred by s 30; and this case is not concerned with immunity from civil liability. The respondent accepts, as a general proposition, that the protection and immunity contemplated by s 21A of the Magistrates Act adapts, to certain administrative functions and powers, the protection conferred by s 30 of the Code. That adaptation could give rise to problems that do not exist in the present case. Whether particular conduct is 18 Ex parte Cousens; Re Blacket (1946) 47 SR (NSW) 145 at 146 per Jordan CJ. 19 (1985) 158 CLR 596 at 616. properly characterised as being in the performance or exercise of an administrative function or power, or whether in a given case it should be seen as a purely personal escapade, may be an issue. It is not an issue in this case. If s 21A otherwise applied to the conduct of the appellant, the conduct that gave rise to the charges against her (calling upon Mr Gribbin to show cause why he should not be removed as a coordinating magistrate) was conduct in the exercise of a power conferred on the appellant, that is to say, the power to nominate and remove coordinating magistrates. The argument for the appellant in this Court was that s 10 of the Magistrates Act conferred on the appellant as Chief Magistrate a series of administrative functions and powers, that she acted in the performance or exercise of those powers, that she had the same protection and immunity as she had in the exercise of her judicial functions, and that, except as expressly provided by the Code, she was not criminally responsible for anything done by her in the exercise of her administrative functions, even if the act done was in excess of her administrative authority. The argument for the respondent turned upon a question of construction of s 21A and, in particular, the words "administrative function or power conferred on [a] magistrate under an Act". The respondent submitted that those words did not cover s 10 of the Magistrates Act itself. The argument called in aid two considerations: one textual; the other related to the rationale of immunity. The Magistrates Act is not itself the source of the civil or criminal jurisdiction exercised by magistrates. Section 7, to which reference has already been made, empowers a magistrate to exercise, throughout the State of Queensland, all jurisdiction, powers and functions conferred on a magistrate by or under any law of the State. Leaving to one side s 10, which is the focus of the present argument, the Magistrates Act does not itself confer jurisdiction, powers and functions on magistrates generally. They are to be found in other legislation. When s 21A refers to "an administrative function or power conferred on the magistrate under an Act" then, beyond question, it is referring, at least in part, to functions or powers conferred under other Acts. The Magistrates Act does not provide, as does s 2(2) of the Acts Interpretation Act 1954 (Q), that in the Magistrates Act "a reference to 'an Act' includes a reference to this Act." The question is left open, and is not resolved by ss 6 and 7 of the Acts Interpretation Act. The functions and powers conferred on the Chief Magistrate by s 10 are the only administrative functions and powers conferred on a magistrate by the Magistrates Act itself. According to the submission for the respondent, they are not the kinds of administrative functions and powers in contemplation in s 21A. There is, it is said, a textual uncertainty as to whether the words "under an Act" mean "under an Act including this Act". As a matter of general principle, such uncertainty should be resolved against any extension of the immunity beyond cases for which its necessity is evident20. Furthermore, so the argument runs, the rationale for an immunity of the kind conferred by s 21A does not extend to matters of internal court administration of the kind dealt with in s 10. It is clear that s 30 of the Code is in aid of the independent and impartial administration of justice; the exercise of judicial functions without fear or favour. The purpose of s 21A, which extended the s 30 immunity beyond the exercise by magistrates of judicial functions to the exercise of administrative functions, is also related to the independence of the magistracy. Such independence is important in relation to the exercise by magistrates of the various responsibilities conferred on them by other Acts of the kind set out above. What, the respondent asks, does it have to do with matters of internal court administration and discipline of the kind dealt with by the Magistrates Act itself? The answer to that question, and to the respondent's argument, requires closer examination of s 10 of the Magistrates Act. In truth it covers a number of matters closely related to issues of judicial independence. Sub-sections (1) and (2) of s 10 cover the whole range of matters relevant to the orderly and expeditious exercise of the jurisdiction and powers of the Magistrates Courts, and include the organising of court lists, the allocation of magistrates to particular localities, and the assigning of magistrates to particular work. Arrangements of that kind are not merely matters of internal administration. They affect litigants and the public. Within any court, the assignment of a judicial officer to a particular case, or a particular kind of business, or a particular locality, is a matter intimately related to the independent and impartial administration of justice. This was the basis of the decision of the New South Wales Court of Appeal in Rajski v Wood21, where it was held that the nomination or allocation of a judge to hear a particular case was not justiciable. As was pointed out in Minister for Immigration and Multicultural Affairs v Wang22, where it is the function of a head of jurisdiction to assign members of a court to hear particular cases, the capacity to exercise that function, free from interference by, and scrutiny of, the other branches of government is an essential aspect of judicial independence. The same may be said of the capacity to exercise that function free from the threat of civil or criminal sanctions23. The responsibilities conferred upon a 20 Gibbons v Duffell (1932) 47 CLR 520 at 528. 21 (1989) 18 NSWLR 512. 22 (2003) 215 CLR 518 at 523-524 [12]. 23 As to the limits on the power to investigate the reasons for a decision to assign a judge to a case, see the decision of the Supreme Court of Canada in MacKeigan v Hickman [1989] 2 SCR 796. Chief Magistrate by s 10 would cover some mundane issues of a kind that arise in the administration of any substantial organisation. On the other hand, some of those responsibilities, and especially those involving decisions which directly or indirectly determine how the business of Magistrates Courts will be arranged and allocated, concern matters which go to the essence of judicial independence. The selection of supervising and coordinating magistrates is a matter that falls into that category. It is, therefore, incorrect to say that the functions and powers conferred on the Chief Magistrate by s 10 are unrelated to the rationale for the immunity in question. As to some of those functions the rationale is directly relevant. As to some it may be of no relevance, or of limited relevance. As to others, its relevance may depend upon the circumstances. Furthermore, it is not the case that decisions of the kind covered by s 10 affect only the conditions of service of individual magistrates. Such decisions affect the assignment of judicial officers to cases. If a Chief Magistrate could be called to account, in civil or criminal proceedings, for decisions about how Magistrates Courts arrange their business, or about the assignment of magistrates to cases, or classes of case, the capacity for the erosion of independence is obvious. In recent years, the Supreme Court of Canada24, and the Constitutional Court of South Africa25, have found it necessary to examine the theoretical foundations of judicial independence for the purpose of considering whether arrangements in relation to particular courts satisfied the minimum requirements of that concept. In that context reference was made to "matters of administration bearing directly on the exercise of [the] judicial function."26 The adjudicative function of a court, considered as an institution, was seen as comprehending matters such as the assignment of judges, sittings of the court and court lists, as well as related matters of allocation of court-rooms and direction of the administrative staff engaged in carrying out that function. Judicial control over such matters was seen as an essential or minimum requirement for institutional independence27. The distinction between adjudicative and administrative functions drawn in the context of discussions of judicial independence is not clear cut. Nevertheless, the powers conferred by s10 of the Magistrates Act include powers that fall squarely within the rationale of the immunity in question. Apart from submitting that the words "under an Act" completely exclude functions and powers conferred under the Magistrates Act itself, the respondent 24 Valente v The Queen [1985] 2 SCR 673; R v Genereux [1992] 1 SCR 259; Reference re: Public Sector Pay Reduction Act [1997] 3 SCR 3. 25 Van Rooyen v The State 2002 (5) SA 246. 26 Valente v The Queen [1985] 2 SCR 673 at 708. 27 Valente v The Queen [1985] 2 SCR 673 at 709. has not proposed any intermediate position according to which s 21A could apply to some of the powers conferred by s 10 but not to others. The rationale behind the immunity it confers requires that s 21A be read as covering the exercise by a Chief Magistrate of the powers conferred by s 10 of the Magistrates Act. Conclusion The appellant should not have been held criminally responsible for the conduct alleged against her. By statute, she was entitled to a protection and immunity that was wrongly denied to her. She is entitled to succeed on her primary ground of appeal. With one exception, the remaining grounds of appeal seek to raise points that were not taken, and in some cases were expressly conceded, at trial and in the Court of Appeal. Those points do not raise any conclusive legal objection to the proceedings or the outcome of the trial, and some of them, if made good, would only result in an order for a new trial. The appellant should not be permitted to pursue those points in this Court. As to the ground that was argued in the Court of Appeal, it is sufficient to say that the reasoning of the Court of Appeal was closely related to the way in which the parties at trial presented and conducted their respective cases. In this Court, the appellant has endeavoured to alter the position that was taken at trial in respect of a number of fundamental issues. Furthermore, she has succeeded in an argument that there should never have been a trial of those issues. In the circumstances, this Court should express no view on the remaining ground of appeal. The appeal should be allowed. The orders of the Court of Appeal of the Supreme Court of Queensland should be set aside. In place of those orders the appeal to the Court of Appeal should be allowed, the appellant's conviction should be quashed, and a verdict and judgment of acquittal on both counts in the indictment should be entered. McHugh 59 McHUGH J. I agree that this appeal must be allowed and the appellant's conviction quashed because the acts that were the subject of the charge under s 119B of the Criminal Code (Q) were acts done by a magistrate "in the performance or exercise of an administrative function or power conferred on the magistrate under an Act" within the meaning of s 21A of the Magistrates Act 1991 (Q)28. My reasons for doing so are the same as those of Gummow and Heydon JJ with whose judgment I agree. But I would also quash the conviction on the ground that the learned trial judge failed to put the appellant's true case on "reasonable cause" to the jury and failed to direct the jury as to the meaning of that term and the evidence relevant to its evaluation. To understand why that is so, it is necessary to examine the summing-up in detail, much of which in my opinion did not adequately explain to the jury how they should apply a novel legal provision, set in an unusual context, with legal terms and issues upon which the jurors required clear guidance. The appellant has never complained that the summing-up was generally defective. Ordinarily in such a case, it would not be part of this Court's function to examine the summing-up. Further, the trial was presided over by an experienced judge and an experienced member of the Queensland Criminal Bar represented the appellant at the trial. Those two facts provide a further reason why this Court would not ordinarily examine the adequacy of a summing-up when its adequacy is not a ground of appeal. But, despite these considerations, it is necessary to examine the summing-up generally to understand the strength of the ground that is raised in this Court. The appellant complains that the "learned trial judge misdirected the jury by not giving them any directions as to the meaning of 'without reasonable cause' in Section 119B of the Criminal Code". The appellant did not argue this ground in the Court of Appeal. In that Court, the only ground argued was that no reasonable jury could have found beyond reasonable doubt an absence of "reasonable cause" for the conduct that was the basis of the charge. However, Crampton v The Queen29 holds that there is no constitutional objection to raising a ground of appeal for the first time in this Court although special leave to appeal on such a ground will be allowed only in exceptional circumstances. As will appear, the circumstances of this case are so exceptional that it is appropriate to allow both the immunity ground and the present "reasonable cause" ground to be raised in this Court. 28 (Reprint No 3), formerly Stipendiary Magistrates Act 1991 (Q). 29 (2000) 206 CLR 161. McHugh Statement of material facts The appellant was the Chief Magistrate of Queensland. Section 10(2)(d) of the Magistrates Act 1991 (Q) empowered the Chief Magistrate to nominate a magistrate to be a Co-ordinating Magistrate for the purpose of the allocation of the work of the Magistrates Court. The grant of this power also gave her the power to remove a nominated magistrate30. Section 10(2) of the Magistrates Act also empowered her to transfer magistrates, but this power was subject to review by a Judicial Committee established under the Act for the purpose of reviewing such decisions. One Co-ordinating Magistrate nominated by the appellant was Mr Basil John Gribbin. He was appointed a magistrate in 1987, and the appellant nominated him as a Co-ordinating Magistrate in April 2000. The position of Co-ordinating Magistrate entailed greater administrative duties than that of a magistrate. They included the allocation of work between magistrates in the area. The position also carried an annual stipend of $2,000. In September 2002 – the month when the events critical to this case took place – Mr Gribbin was also Vice-President of the Stipendiary Magistrates Association of Queensland ("the Magistrates Association"). On 26 October 2001, the Magistrates Association had sent a letter to the Attorney-General for Queensland proposing changes to the powers of the Chief Magistrate. Mr Gribbin was not a President, Vice-President or Secretary of the Association at that time, and it is not clear that he was even a member of the Executive. The letter was signed by the then President. However, Mr Gribbin testified that the appellant was not consulted about the issues raised in the letter. On 17 December, the appellant made a phone call to Mr Gribbin during which she complained that none of the matters in the letter had been raised with her despite ample opportunity to do so, particularly at the September 2001 meeting of Co-ordinating Magistrates. Mr Gribbin said that during this conversation the appellant had told him that there was a conflict of interest between his position on the Magistrates Association and his position as Co-ordinating Magistrate. He said that she attempted to deliver an ultimatum to the effect that he must choose between these positions and could not maintain both of them. However, this dispute between the appellant and Mr Gribbin seemed to have been resolved after an e-mail from the appellant which Mr Gribbin described in evidence as "a complete backdown". In July 2002, the appellant determined that another magistrate, Ms Anne Thacker, should be transferred to Townsville. Later that month, Ms Thacker 30 Acts Interpretation Act 1954 (Q), s 25(1)(b)(i). McHugh filed an application for a review by the Judicial Committee of that determination. She wrote to the Magistrates Association seeking assistance with her application for review. On 12 August 2002, Mr Gribbin provided an affidavit to Ms Thacker's solicitors for use in the review proceedings. The appellant filed an affidavit in reply on 30 August 2002. In his affidavit, Mr Gribbin outlined the process for transferring magistrates between centres and the statutory change to that system that was effected in 1991 by the Stipendiary Magistrates Act, which conferred upon the Chief Magistrate the power to make transfer decisions. In his affidavit, Mr Gribbin said that the appellant's exercise of her power was "difficult to tie to a clear policy approach", that there had been many "forced transfers" and that magistrates generally felt "susceptible to arbitrary, unadvertised, involuntary transfers". In evidence, Mr Gribbin said that at that time he considered the appellant to be an "appalling Chief Magistrate". Mr Gribbin agreed that, before expressing his view of her policies in his affidavit, he had not told the appellant that her transfer policy was unclear. He said that there had been a "measure of friction" between him and the appellant but that it had subsided by the time he wrote the affidavit in the application by Ms Thacker. On 4 September 2002, Mr Gribbin received an amended draft agenda for a Co-ordinating Magistrates meeting which was to take place on 19 and 20 September 2002. One of the items added to the agenda was "Role of the Association". On 9 September 2002, Mr Gribbin sent an e-mail about this agenda to several magistrates who were to attend the September meeting of the Co-ordinating Magistrates. His e-mail expressed the concerns he had about that item and sought to initiate discussion about it with other Co-ordinating Magistrates. Mr Gribbin said he did not send the e-mail either to the appellant or to her Deputy, Mr Hine, but that he "fully intended to publish [his] concerns at the meeting to both of them". On 18 September 2002, the appellant sent Mr Gribbin a letter by e-mail calling on him to show cause why she should not exercise her power to withdraw his nomination as a Co-ordinating Magistrate. Before sending the e-mail, she consulted Mr David Graham Searles, who was retained by the Queensland Law Society in relation to professional misconduct prosecutions. He advised the appellant in relation to the application by Ms Thacker and in relation to an earlier transfer issue. The original draft letter that the appellant showed to Mr Searles provided for the removal of Mr Gribbin. However, Mr Searles advised her that the letter should be altered so as to give Mr Gribbin an opportunity to show cause why he should not be removed. Relevantly, the amended letter stated: McHugh "Could you also explain to me why you sought [sic] fit to supply an affidavit in the matter of Ms Thacker's Review of my decision to transfer her to Townsville. You were critical in it of both Mr Deer and myself in relation to transfer matters. Is this a matter which you feel should be discussed by you in an affidavit before the Judicial Committee, when you have never raised it with me personally or at a Co-ordinating Magistrate's meeting? In the circumstances, I feel that I do not have your confidence in my leadership abilities. No other magistrate, certainly not a co-ordinating magistrate has seen fit to enter into any such matters. ... Further, you circulated all other co-ordinating magistrates (except Mr Hine and with no reference to myself), in relation to a proposed agenda item for the forthcoming co-ordinating magistrates meeting. The agenda is, in the end, a matter for my discretion, following consultation with the other Co-ordinating magistrates. No-one put to me that such an item should not be on the agenda. I consider that action on your part, again, to be disloyal to the leadership of the magistracy and disruptive of the morale of the magistracy. The position of Co-ordinating Magistrate in the Queensland Magistracy is a privileged position. I regularly meet with all Co-ordinating Magistrates who give input into the administration of the courts. Whilst constructive criticism will always be appreciated, there must be loyalty to the Chief Magistrate. As stated, you sought to agitate a view about an item on the agenda for the meeting beginning tomorrow, without my knowledge. This and the other example I refer to above, manifest to me a clear lack of confidence by you in me as Chief Magistrate. In the circumstances, I ask you to show cause, within seven days, as to why you should remain in the position. the circumstances, the Co-ordinating Magistrates meeting this Thursday and Friday at Central Courts." is not appropriate that you attend As a result of sending this letter, the appellant was charged with an offence under s 119B of the Criminal Code and with attempting to pervert the course of justice under s 140 of the Criminal Code. Section 119B of the Criminal Code provides: "A person who, without reasonable cause, causes, or threatens to cause, any injury or detriment to a judicial officer, juror, witness or a member of the family of a judicial officer, juror or witness in retaliation because of – McHugh anything lawfully done by the judicial officer as a judicial officer; anything lawfully done by the juror or witness in any judicial proceeding; is guilty of a crime. Maximum penalty – 7 years imprisonment." The appellant was subsequently tried in respect of the two charges. The jury convicted her of the offence under s 119B of the Code and were directed that the charge of attempting to pervert the course of justice was an alternative count. As a result, the jurors were not required to return a verdict in respect of the charge of attempting to pervert the course of justice. Subsequently, the Court of Appeal of Queensland dismissed the appellant's appeal against her conviction, and this Court granted her special leave to appeal against the order of the Court of Appeal dismissing her appeal to that Court. The requirements of a summing-up Section 620 of the Criminal Code declares that, after the evidence has concluded and counsel have addressed the jury, "it is the duty of the court to instruct the jury as to the law applicable to the case, with such observations upon the evidence as the court thinks fit to make." The court does not discharge that duty by merely referring the jury to the law that governs the case and leaving it to them to apply it to the facts of the case. The key term is "instruct". That requires the court to identify the real issues in the case, the facts that are relevant to those issues and an explanation as to how the law applies to those facts31. As McMurdo P said in Mogg32, ordinarily the duty imposed on a trial judge in respect of a summing-up requires the judge to identify the relevant issues and relate those issues to the relevant law and facts of the case. In the same case, after referring to s 620 Thomas JA said33: "The consensus of longstanding authority is that the duty to sum up is best discharged by referring to the facts that the jury may find with an 31 cf Alford v Magee (1952) 85 CLR 437 at 466. 32 (2000) 112 A Crim R 417 at 427 [54]. 33 (2000) 112 A Crim R 417 at 430 [73]. McHugh indication of the consequences that the law requires on the footing that this or that view of the evidence is taken." (footnote omitted) The statements of the learned President and Thomas JA show that the law concerning a summing-up in trials under the Criminal Code is no different from the law in trials at common law. Their Honours' statements are consistent with the statements of Gaudron ACJ, Gummow, Kirby and Hayne JJ in RPS v The Queen34 concerning the duty of a trial judge in jurisdictions that have no counterpart to s 620: "The fundamental task of a trial judge is, of course, to ensure a fair trial of the accused. That will require the judge to instruct the jury about so much of the law as they need to know in order to dispose of the issues in the case. No doubt that will require instructions about the elements of the offence, the burden and standard of proof and the respective functions of judge and jury. Subject to any applicable statutory provisions it will require the judge to identify the issues in the case and to relate the law to those issues. It will require the judge to put fairly before the jury the case which the accused makes." (footnotes omitted) As Diplock LJ pointed out in R v Mowatt35, the "function of a summing-up is not to give the jury a general dissertation upon some aspect of the criminal law, but to tell them what are the issues of fact on which they must make up their minds in order to determine whether the accused is guilty of a particular offence." (emphasis added) A summing-up is radically defective unless it adequately explains "to the jury the nature and essentials of" the offence with which a person is charged36. Where the offence involves statutory terms, it is usually "imperative that the jury be specifically directed as to the criteria to be applied and the distinctions to be observed in determining" whether particular conduct is within the terms of the In the present case, I think that the summing-up was defective in material respects. Furthermore, it did not comply with the above principles. In fairness to the learned trial judge, it has to be emphasised that his directions to the jury tracked the arguments that counsel for the appellant and the Crown put to the 34 (2000) 199 CLR 620 at 637 [41]. 35 [1968] 1 QB 421 at 426. 36 McBride v The Queen (1966) 115 CLR 44 at 47. 37 McBride v The Queen (1966) 115 CLR 44 at 50. McHugh jury. In my view, the defects in the summing-up resulted from the prosecution case being built upon an erroneous application of s 119B to the facts of the case. To use the words of Windeyer J38 in a similar context, that had the consequence that "[t]he trial of this action got off to a bad start." And it was not improved when counsel for the appellant did not seriously challenge the conceptual structure of the prosecution case, perhaps because it raised factual issues that he thought gave his client a forensic advantage. In these circumstances, it is not surprising that the summing-up of the learned trial judge followed the conceptual structure of the case accepted by counsel and the factual arguments put by each counsel. No doubt the arguments of counsel for the appellant at the trial reflected his belief that the appellant's best chance of acquittal lay in putting the issues in the way that he did. His failure to ask the judge for the legal directions that should have been given may also have reflected the belief that putting issues to the jury that did not reflect the course of his address might have confused the jury and made the chance of acquittal less likely. He may have thought that his client's chance of acquittal would not be improved, but would be likely to be harmed, if he asked the judge to direct the jury in accordance with what I think were the real issues posed by the s 119B charge and the evidence. Similarly, he may have thought that the best interests of his client would not be advanced by a close interpretation of the various terms of the section. But if he held these views, he was mistaken because it led to the appellant's true case not being put before the jury. Whatever the offence and however the accused's case is conducted, the law requires that a judge's summing-up comply with the principles to which I have referred. A trial judge is bound to put to the jury every lawfully available defence open to the accused on the evidence even if the accused's counsel has not put that defence and even if counsel has expressly abandoned it39. Barwick CJ stated the relevant principles in Pemble v The Queen40: "There is no doubt that the course taken by counsel for the appellant at the trial contributed substantially to the form of the summing up. If the trial had been of a civil cause, it might properly be said that the trial judge had put to the jury the issues which had arisen between the parties. But this was not a civil trial. The decision of the House of Lords in Mancini v Director of Public Prosecutions following Lord Reading's judgment in 38 Australian Consolidated Press Ltd v Uren (1966) 117 CLR 185 at 201. 39 Pemble v The Queen (1971) 124 CLR 107. 40 (1971) 124 CLR 107 at 117-118. McHugh R v Hopper and its influence in the administration of the criminal law must ever be borne in mind (see Kwaku Mensah v The King). Whatever course counsel may see fit to take, no doubt bona fide but for tactical reasons in what he considers the best interests of his client, the trial judge must be astute to secure for the accused a fair trial according to law. This involves, in my opinion, an adequate direction both as to the law and the possible use of the relevant facts upon any matter upon which the jury could in the circumstances of the case upon the material before them find or base a verdict in whole or in part." (footnotes omitted) After giving due respect to the advantage that counsel and the learned trial judge had in hearing the evidence and absorbing the atmosphere of the trial, I am nevertheless convinced that the summing-up was defective in radical respects. I do not think that the jury received the assistance that they needed in respect of a novel offence that is formulated in imprecise language and had to be applied to evidentiary issues and factual distinctions of some subtlety. No doubt the course taken by counsel on each side put the learned trial judge in a difficult position. To a considerable extent, he would have had to instruct the jury on matters that counsel who then appeared for the appellant had eschewed. But as Barwick CJ makes clear in Pemble, the proper administration of the criminal law requires nothing less. The right of every accused to a fair trial according to law cannot automatically depend on the forensic choices of the counsel who represents the accused. The summing-up The summing-up commenced by describing the offences laid in the indictment. The learned judge gave standard directions concerning the functions of himself and the jury, the onus and standard of proof and the need for each verdict to be unanimous. He instructed the jury that the opening speeches and closing addresses of counsel were not evidence although their submissions and comments had to be carefully considered. He told them that, although he would comment on some of the evidence, the fact that he did so did not necessarily mean it had more weight than other evidence. He identified the witnesses by name and the positions that they held. He reminded the jury that, although they had heard a good deal of evidence concerning discord among magistrates in particular on the subject of transfers, "the rights and wrongs of the controversy concerning transfers are not for you to determine." His Honour then said: "In this case a question arises, in relation to both charges, as to the accused's state of mind when she did what the Crown has alleged against her. In relation to the first charge, the question arises whether she did what she did in retaliation. On the second charge, the question arises whether she did what she did with the intention of perverting, et cetera, the course of justice. So her state of mind is relevant. McHugh The Crown alleges on the first count that she did what she did in retaliation, as a payback; on the second count, that she did what she did with the intention of perverting, et cetera, the course of justice. And the Crown relies on circumstantial evidence." Later, his Honour again referred to the Crown submission that what the appellant did was "by way of retaliation with the intention of inflicting a punishment on Mr Gribbin". These were the only references his Honour made to the appellant's state of mind in respect of the s 119B charge although in my opinion her state of mind was the critical issue in respect of the "reasonable cause" issue. And, arguably, "reasonable cause" was the key issue in the case. Thus, on the critical issue of "reasonable cause" the jury had no assistance concerning the relevance of the appellant's state of mind. That the judge's directions concerning the appellant's state of mind were limited to the retaliation issue is not surprising. Counsel for the appellant put the issue of "retaliation" in the forefront of the appellant's defence. He told the jury that the "retaliation" issue was the most complicated of the three issues in the case because it concerned an analysis of the appellant's mind. He appears to have overlooked that her beliefs concerning Mr Gribbin were fundamental to another of the issues he mentioned – "reasonable cause". After these directions, the judge gave a standard direction in relation to proof of circumstantial evidence. After telling the jury that certain tape recordings and not the transcripts of them were evidence, he came "to the law that applies to these offences." His Honour described the offence the subject of the first count. His Honour then said: "In this case the Crown must prove beyond reasonable doubt, first, that Mr Gribbin was a witness in a judicial proceeding. A 'judicial proceeding' includes, under our law, any proceeding had or taken in or before any tribunal in which evidence may be taken on oath. The judicial committee constituted concerning Ms Thacker's transfer was such a tribunal, and Ms Thacker's request that the judicial committee review the accused's determination was a judicial proceeding. Mr Gribbin became a witness in the proceeding when his affidavit was filed. accused's determination review the Secondly, the Crown must prove beyond reasonable doubt that the accused threatened to cause an injury or detriment to Mr Gribbin. The Crown must prove beyond reasonable doubt that the accused threatened to cause an injury or detriment to Mr Gribbin. A loss of the status of coordinating magistrate and of the extra remuneration in addition to salary as a magistrate that goes with that status could be a detriment. It is for you to decide whether such a loss would be a detriment. To be a detriment, the benefit in question must be something more than a trifle. McHugh Thirdly, the Crown must prove beyond reasonable doubt that the accused made the threat to Mr Gribbin in retaliation – that is, as a repayment in kind, or requital, or reprisal – because of his providing the affidavit as he was entitled in law to do. The Crown must prove beyond reasonable doubt that the accused made the threat to Mr Gribbin in retaliation, as a repayment in kind, or requital, or reprisal, because of his providing the affidavit as he was entitled in law to do. Fourthly, the Crown must prove beyond reasonable doubt that the accused made the threat without reasonable cause. You have heard evidence of a difficulty presented by an apparent inability of a coordinating magistrate and the Chief Magistrate to work harmoniously and constructively together in performing their respective functions. That difficulty could constitute reasonable cause for the Chief Magistrate to call upon the coordinating magistrate to show cause why the coordinating magistrate should remain as a coordinating Magistrate. But whether such a difficulty would be a reasonable cause for the accused's sending the e-mail that has led to the charges before you when she did, and in the circumstances then existing, is for you to determine. Remember that such a cause must be reasonable. Please also remember that, in the end, the Crown must prove absence of reasonable cause. The Crown must prove absence of reasonable cause beyond reasonable doubt. As I have said, if you are not satisfied beyond reasonable doubt that the Crown has proved any one of those elements of the offence of retaliation against a witness, the accused must be acquitted of that charge." In my view, the learned trial judge's directions did not assist – and indeed misled – the jury in relation to elements of the charge. First, his Honour told the jury that "[a] loss of the status of coordinating magistrate and of the extra remuneration in addition to salary as a magistrate that goes with that status could be a detriment" for the purpose of the section. However, the injury or detriment to which Mr Gribbin was subjected was the requirement that he respond to a "show cause" notice that might lead to the loss of status and remuneration if his answer was not regarded as sufficient. There is a difference, and in the context of this case and s 119B it is more than one of degree, between a threat to demote and calling on a person to show cause why that person should not be demoted with a consequential loss of status and remuneration. Calling on a person to show cause is not necessarily a threat. This Court does not threaten a respondent when it issues an order nisi calling on that person to show cause why a particular constitutional writ should not issue out of the Court. Of course, in certain circumstances a jury might find that a show cause notice is indeed a threat. But the jury's attention in this case should have been drawn to the distinction between a direct threat of demotion and a show cause notice that could lead to demotion so that they could make a judgment as to whether it was a threat. Necessarily, that would require instruction as to what is involved in the procedure where a McHugh show cause notice is issued. Furthermore, the distinction between a threat to demote and a show cause notice that might lead to demotion is critical to other issues under s 119B. The precise nature of the threat, for example, is relevant to and ordinarily determinative of the issue of "reasonable cause". There is a world of difference between a reasonable excuse for making a direct threat of a loss of status and remuneration and a reasonable cause for issuing a notice calling upon a person to show cause why, in the absence of a satisfactory explanation, that person should not lose that status and remuneration. It will always be harder to justify the making of the direct threat than it will be to justify the making of the show cause notice unless the jury conclude the show cause notice was a sham. Second, the learned judge defined retaliation "as a repayment in kind, or requital, or reprisal – because of his providing the affidavit as he was entitled in law to do." In other contexts, "repayment in kind", "requital" or "reprisal" may serve as synonyms for "retaliation". But I do not think that any of these terms explain the meaning of "retaliation" in s 119B. The section assumes that there may be a "reasonable cause" for the retaliation. It is hard to see how a reprisal, repayment in kind or requital in relation to a witness could be the subject of a reasonable cause. Those concepts imply revenge. And it is hard to see how a revengeful response could be the subject of a reasonable cause. For the same reason, it is difficult to see how "retaliation" can mean "payback", an expression much used by counsel for the prosecution to describe the sending of the show cause notice by the appellant to Mr Gribbin. The difficulty in giving the phrase "in retaliation" a sensible meaning in the context of s 119B arises from the fact that it is largely, if not wholly, superfluous and is merely descriptive of the effect of the rest of the section. A person who "causes ... any injury ... to a ... witness ... because of ... anything lawfully done by the ... witness" has acted "in retaliation" for the doing of that thing. Except for emphasis, it is difficult to see how the phrase "in retaliation" adds anything of substance to the section. "Retaliation" implies a causal connection for a particular reason. Used in a context where the "retaliation" may constitute reasonable cause, the term suggests that, in s 119B, it simply means "a response" because of something done by a judicial officer, juror or witness. If the reason for the response constitutes a reprisal or a repayment in kind, the reason will destroy the notion of "reasonable cause" in most, if not all, cases. But in s 119B it is the "response" that constitutes the "retaliation". To construe "retaliation" in the manner that the learned trial judge did would render the notion of "reasonable cause" largely irrelevant. "Retaliation" and "reasonable cause" are conceptually different. No directions should be given that might make one or other superfluous in deciding a charge brought under s 119B. McHugh Third, the judge told the jury that the "difficulty presented by an apparent inability of a coordinating magistrate and the Chief Magistrate to work their respective together harmoniously and constructively functions ... could constitute reasonable cause for the Chief Magistrate to call upon the coordinating magistrate to show cause ...". But with great respect, this statement does not do justice to the appellant's case on the issue of "reasonable cause". And the matter was aggravated by the judge's failure to assist the jury as to the meaning of "reasonable cause" or to identify for their consideration the circumstances that were relevant to that issue. in performing In the e-mail that was the subject of the charge, the appellant informed Mr Gribbin, "I feel that I do not have your confidence in my leadership abilities." At the end of the e-mail she said: "The position of Co-ordinating Magistrate in the Queensland Magistracy is a privileged position. I regularly meet with all Co-ordinating Magistrates who give input into the administration of the courts. Whilst constructive criticism will always be appreciated, there must be loyalty to the Chief Magistrate. As stated, you sought to agitate a view about an item on the agenda for the meeting beginning tomorrow, without my knowledge. This and the other example I refer to above, manifest to me a clear lack of confidence by you in me as Chief Magistrate. In the circumstances, I ask you to show cause, within seven days, as to why you should remain in the position. In the circumstances, it is not appropriate that you attend the Co- ordinating Magistrates meeting this Thursday and Friday at Central Courts." In her evidence, the appellant said that she "felt that my working relationship with Mr Gribbin had reached a point where I felt he lacked confidence in my leadership abilities and I lacked confidence in his – my ability to work with him on the Coordinating Magistrates meeting." She was asked: "So have you given us all of the reasons why you decided to send him this e-mail calling on him to show cause why he shouldn't be removed from that position? -- I think I have said that I believed our working relationship, with him as Coordinating Magistrate, given the expanded role – I had no criticism of him running the Beenleigh Court, but a lot of people could do that. I needed his confidence. I needed his loyalty. Not blind loyalty, but loyalty, because this sort of thing is very disruptive, and so I thought it had come to an end and that's why I sent it. McHugh Well, did you send it as a payback for the fact that he'd supported Ms Thacker in her appeal against your transfer decision? -- Absolutely and unequivocally not." The evidence of Mr David Searles, a solicitor who had advised the Queensland Law Society on professional misconduct, supported the appellant's case. He told her that she had to give Mr Gribbin an opportunity to deal with the matters raised against him saying: "He may very well change his mind and you may work harmoniously together. So give him the opportunity." Mr Searles also said that the appellant "was not wanting to pick a fight with Mr Gribbin. She was wanting – hoping they could work things out". Mr Searles said: "[S]he expressed the view – I don't know whether it was on this occasion or on another occasion – that he was a very experienced Magistrate and she would benefit by having him on side but in her view he wasn't on side, he was agitating against her and she felt it very uncomfortable." Thus, the evidence of the appellant was that she believed Mr Gribbin was not loyal to her and did not have confidence in her leadership of the Magistrates Court. As a result, she did not have confidence in him and believed that, unless he cooperated, he had to be removed. It was because of these beliefs that she called on him to show cause why he should not be removed from his office. For the Crown to succeed in the prosecution, it had to prove beyond reasonable doubt that she did not hold that belief or, if she did, that it was not a "reasonable cause" for her e-mail. Unless the jury were satisfied that she did not have that belief, they had to consider whether holding that belief was a "reasonable cause" for sending the show cause notice and whether that belief caused her to send it. That meant that the Crown had to prove inter alia that her belief did not constitute a "reasonable cause" for issuing a notice to Mr Gribbin calling on him to show cause why he should retain the office of Co-ordinating Magistrate. Unfortunately, the trial judge did not put the issue of the appellant's state of mind to the jury in connection with the question of whether she had "reasonable cause" for what she did. In his summing-up, as I have pointed out, the learned judge made reference to the appellant's state of mind only in relation to retaliation. He said: "In this case a question arises, in relation to both charges, as to the accused's state of mind when she did what the Crown has alleged against her. In relation to the first charge, the question arises whether she did what she did in retaliation." McHugh This was certainly true but the hypothesis of the section is that what is done in "retaliation" may be the subject of "reasonable cause". Thus, it was not sufficient simply to direct the jury that her state of mind was relevant in determining whether she was retaliating against Mr Gribbin. Clearly his actions were the cause of her sending the e-mail. Her e-mail was a response to his actions. In that sense, the giving of the affidavit with its critical content as well as the issue of the agenda item precipitated the e-mail and made it virtually inevitable that the jury would find it was "in retaliation" for them. It was vital to the issue of "reasonable cause", however, whether the reason for the "retaliation" was her belief that Mr Gribbin had lost confidence in her and that she had no confidence in him. The reason for the "retaliation" is fundamental to the issue of "reasonable cause". And in this case, as I have indicated, the state of mind of the appellant was central to the "reasonable cause" issue. Instead of referring to her state of mind, however, his Honour referred to a difficulty presented by "an apparent inability of a coordinating magistrate and the Chief Magistrate to work harmoniously and constructively together" and told them that this could constitute a reasonable excuse. To direct the jury in this way failed to put the appellant's case on "reasonable cause" to the jury in the way that the law required, given her evidence about her beliefs concerning Mr Gribbin. The direction that his Honour gave invited the jury to look at the objective facts of the conflict between Mr Gribbin and the appellant rather than the appellant's beliefs and their relationship to the sending of the e-mail. It invited the jury to determine for themselves whether "an apparent inability ... to work harmoniously and constructively" with Mr Gribbin was "reasonable cause" for "[a] loss of the status of coordinating magistrate and of the extra remuneration in addition to salary as a magistrate that goes with that status". It invited the jury to decide the "reasonable cause" issue without taking into consideration the subjective beliefs of the appellant in relation to working with Mr Gribbin. The question for the jury on this issue was whether the sending of the e-mail by a person holding the appellant's beliefs constituted "reasonable cause". The learned judge's directions also gave authority to the following submission of counsel for the Crown: "[Counsel for the appellant] has suggested to you that if you find that a detriment was caused and if you find that it was in retaliation, then you must look at reasonable cause. [Counsel for the appellant] has suggested to you a number of factors which together might establish a reasonable cause for the accused to retaliate against Mr Gribbin for his evidence in the circumstances. Now, the first one that [counsel] said was that it was within the accused's power to remove him; it wasn't an abuse of power. But, ladies and McHugh gentlemen, the Crown would submit to you that for the accused to remove Mr Gribbin is an abuse of power if it is not done because of his inability to perform the duties of his position. It is an abuse of power to remove him because he has put in an affidavit that's on another person's side. That's an abuse of power, because the only reason that he should be removed, you might think, is if he can no longer do his work. If he is not competent, not able and too lazy, or one of those types of reasons. Not because of this affidavit." (emphasis added) This submission of the Crown was erroneous. It could not possibly be an abuse of power for a Chief Magistrate – or for that matter any public office holder – to call on a subordinate to show cause why the subordinate should not be removed if the Chief Magistrate has lost confidence in the loyalty of the subordinate. Moreover, the italicised passages in this submission turned the issue of "reasonable cause" into a merits case. The appellant was not required to show that Mr Gribbin was incompetent or lazy or that she believed that he was for her to succeed on the "reasonable cause" issue. The evidence and the law called for a different direction from that given by the learned trial judge. His Honour should have directed the jury that they had to acquit the appellant unless they found beyond a reasonable doubt that: she did not hold the beliefs to which she testified, or if she held them, they did not constitute a "reasonable cause" for the show cause notice, or if she held them, they were not the reason that gave rise to the show cause notice. It is true that this was not the way that the appellant's counsel had put her case on "reasonable cause" to the jury. He told the jury: "So when you look at all of those circumstances – I will just summarise them for you – remember, you are asking yourselves did she have good cause to do what she did; is it within her power to do what she did; the detriment he was going to suffer would be minimal; it occurred in the context of a quarrel between senior Magistrates about administrative matters; she needed and deserved and was entitled to have a good working relationship with senior Magistrates and that was being frustrated by this dispute between them; did she have other reasons for retaliating against him which were not frivolous? The answers are, 'Yes', and I have listed them for you. So when you look at those matters, ladies and gentlemen, my submission to you is you would feel very comfortably satisfied that she did have good McHugh cause to do what she did. Retaliation or otherwise, payback or otherwise, she had good cause to do it. If that is your thinking, then your verdict is not guilty." Earlier in his submissions, counsel had said: "Ask yourselves in what context was it done, and my suggestion is this: it was done in the course of a squabble or a quarrel between senior Magistrates over some aspects of the administration of Magistrates Courts in Queensland. That's where it has its origin. That's the context in which it happened. A squabble, a quarrel, each of them assuming a stance, no doubt each of them convinced that their own stance was reasonable and proper but opposed to each other in this dispute about administrative matters; that's the context in which it happened." But, as Pemble decides, whatever course counsel for an accused person may see fit to take, the trial judge has a duty to secure the fair trial of the accused according to law. That requires a proper "direction both as to the law and the possible use of the relevant facts upon any matter upon which the jury could in the circumstances of the case upon the material before them find or base a verdict in whole or in part."41 Moreover, the summing-up on the "reasonable cause" issue was defective in three other important respects. First, the learned trial judge did not give the jury any assistance as to what would constitute reasonable cause or what that term meant. In Taikato v The Queen42, Brennan CJ, Toohey and Gummow JJ and I discussed the meaning of the similar term "reasonable excuse" in a provision of the New South Wales Crimes Act. We said: "[T]he reality is that when legislatures enact defences such as 'reasonable excuse' they effectively give, and intend to give, to the courts the power to determine the content of such defences. Defences in this form are categories of indeterminate reference that have no content until a court makes its decision." The indeterminacy of the term "reasonable cause" makes it necessary for a jury in a case like this to be given all possible assistance as to the circumstances that should be taken into account in determining whether a reasonable cause existed. As the Queensland Court of Appeal pointed out in R v Campbell43, in 41 (1971) 124 CLR 107 at 117-118. 42 (1996) 186 CLR 454 at 464-466. 43 [1997] QCA 127. McHugh relation to the similar term "reasonable and probable cause", it "is not without potential difficulty". The Court of Appeal in Campbell thought that the expression raised an objective test, that it was determined by "what a reasonable person would consider as reasonable or probable" and that "more complex directions and fuller explanations than were contained in the trial judge's summing-up in this case will sometimes be required."44 The same comment can be made in respect of the expression "reasonable cause". A fuller explanation of "reasonable cause" required a direction that the jury had to determine whether a reasonable person holding the appellant's beliefs would have been justified in sending the appellant's e-mail to a Co-ordinating Magistrate in whom she had lost confidence and who had no confidence in her. It also required a direction that contained a close examination of the function of a Co-ordinating Magistrate and the relationship of that position with the office of Chief Magistrate. Only by examining that relationship could the jury evaluate whether the beliefs of the appellant constituted a "reasonable cause". Second, in determining the "reasonable cause" issue, it was also important to distinguish between the effect on Mr Gribbin and what he may have perceived as the reason for the issue of the show cause notice and the appellant's reason for giving the notice. Understandably, Mr Gribbin thought that he was to be downgraded as a punishment for giving an affidavit in the application by Ms Thacker in respect of her transfer to Townsville. But the relationship between Mr Gribbin's perception of the appellant's reason for the notice and the appellant's reason for the notice was not necessarily a reflexive one. In the industrial and social conflict that had arisen from the appellant's policies concerning magistrates, Mr Gribbin and the appellant might each say, "You should see it from my side." But for the purpose of s 119B and the issue of "reasonable cause", the only side that mattered was the appellant's side. The effect on Mr Gribbin and his perception of her purpose were irrelevant. If the reason for the appellant's show cause notice was the belief that Mr Gribbin had no confidence in her and as a result she had no confidence in him, she had a strong case on the issue of "reasonable cause". Given the trial judge's direction as to what was the threat and therefore the potential for the jury to think that Mr Gribbin was in fact being punished for giving an affidavit, the issue of the appellant's beliefs – her mental state – and the relationship between the position of Co-ordinating Magistrate and the office of Chief Magistrate needed to be the subject of clear directions to the jury. Third, in determining the issue of "reasonable cause", the jury should have been directed as to what was involved in giving the show cause notice and what its consequences might be. Unless the jury were convinced that the appellant did not hold the beliefs which she set out in the e-mail, they had to make a judgment 44 [1997] QCA 127. McHugh as to whether it was reasonable to call upon Mr Gribbin to show cause because of those beliefs. The jury should have been directed that, in determining the "reasonable cause" issue, it was not a necessary consequence of a show cause notice that loss or detriment would flow from the issuing of the notice. Whether it will have that consequence depends on the addressee's response and its effect on the person giving the notice. In the present case, for example, Mr Gribbin might have asserted his loyalty and his confidence in the appellant or claimed that she had no basis for not having confidence in him. Mr Searles, the solicitor advising the appellant, told her that Mr Gribbin "may very well change his mind and you may work harmoniously together." Moreover, Mr Searles said that the appellant "had expressed to me her wish that she and Mr Gribbin could patch up their differences because she saw him as a very experienced Magistrate and one who could give her assistance in the running of the Courts." Unfortunately, Mr Gribbin did not reply directly to the grounds asserted by the appellant in the show cause notice because he perceived it as an attempt to intimidate him. His e-mail to her dated 19 September stated: "Your e-mail of 18 September 2002 contains a direct threat to cause me a detriment on account of my having supplied an affidavit in the matter of Magistrate Thacker's proceedings before the Judicial Committee. That committee is constituted, inter alia, by the Chief Justice and another Judge of the Supreme Court. Accordingly I consider that your threatening behaviour towards a witness in those proceedings is capable of constituting either a contempt of the Supreme Court or an attempt to pervert the course of justice. Further, your attempt to exclude me from attending the meeting of Co-ordinating Magistrates can only compound that threat. I intend to be present at that meeting. Any attempt by you to exclude me will leave me no option but to consider taking steps to bring the matter to the notice of the Judicial Committee." If the jury were not convinced that the Crown had disproved the appellant's claim that she had lost confidence in Mr Gribbin, it is difficult to see how they could conclude that that belief was not a "reasonable cause" for sending the show cause notice. That is so, even if reasonable people might think that she should not have lost confidence in him simply because of the matters to which she referred or that it was unfair to place Mr Gribbin at risk of losing his status and remuneration because of those matters. If the Chief Magistrate has lost confidence in a subordinate occupying a particular position and calls on that person to show cause why he or she should not be removed from the position, it is difficult to see how the conduct of the Chief Magistrate is unreasonable in McHugh issuing the show cause notice. Removal of the subordinate may in fact be unreasonable after the subordinate has responded. But it is hard to see how the issuing of the notice by a Chief Magistrate in such circumstances would not be reasonable. Careful directions on the issue of "reasonable cause" were all the more important because of the theory of the prosecution case. It attributed bad faith to the appellant from beginning to end. Its theory impliedly rejected the claim that the appellant had lost confidence in Mr Gribbin. Instead, it contended that the show cause letter was simply a step, forced upon her by Mr Searles' advice, in a plan to punish Mr Gribbin for filing an affidavit in the Thacker application and to deter other magistrates from doing likewise. The prosecution theory of the case rejected any claim that the appellant thought that she was acting in the best interests of the administration of the Magistrates Courts. Its theory was that the e-mail was nothing more than an instrument to terrify magistrates so that they would fear to support other magistrates who appealed against her transfer decisions. It was a remarkable theory involving as it did the assumption that the appellant was prepared to remove a magistrate who, ex hypothesi, she believed was loyal and competent so that she could assert power over the magistracy. But its very boldness, aided by the forensic claim of "payback", made it imperative for the learned trial judge to put the appellant's true case clearly to the jury. In my opinion, the summing-up was defective in fundamental respects. Each of those respects had an impact on the issue of "reasonable cause". Because that issue was dependent on other issues such as "detriment" and "retaliation", misdirection or non-direction in respect of the latter issues inevitably meant that the directions concerning "reasonable cause" were inadequate. The appellant's grounds of appeal, however, raise only the adequacy of the directions concerning "reasonable cause" itself. As it happens, the directions or lack of them concerning "reasonable cause" were themselves defective. Consequently, this ground of appeal must succeed as well as the claim of immunity under s 21A of the Magistrates Act 1991. Order The appeal should be allowed. The order of the Court of Appeal should be set aside. In its place should be substituted an order that the appeal to that Court be allowed and an acquittal entered in favour of the appellant on both counts in the indictment. 117 GUMMOW AND HEYDON JJ. Before the commencement of the trial of the appellant in the Supreme Court of Queensland on an indictment alleging breach of s 119B of the Criminal Code (Q) ("the Code")45, there had appeared from particulars furnished by the prosecution and from agreement between the parties the primary facts to found an application under s 592A of the Code to quash the indictment for trespassing upon the protection and immunity of the appellant as Chief Magistrate of Queensland which was conferred by s 21A of the Magistrates Act 1991 (Q) ("the Magistrates Act"). No such application under s 592A was made. However, the fundamental issue provided by s 21A of the Magistrates Act is now the first ground of the appeal to this Court against the decision of the Queensland Court of Appeal to uphold the appellant's conviction. Section 21A states: "A magistrate has, the performance or exercise of an administrative function or power conferred on the magistrate under an Act, the same protection and immunity as a magistrate has in a judicial proceeding in a Magistrates Court." In his oral submissions, counsel for the respondent accepted that no immunity provided by s 21A could have been waived and that, if the first ground of appeal is now made good, the conviction is liable to be quashed. The appeal in this Court thus turns upon the construction of s 21A of the Magistrates Act. The submissions for the respondent fix upon the phrase therein "conferred on the magistrate under an Act". The respondent seeks to introduce a limitation upon those words so that the phrase is to be understood as if it read "under any Act other than this Act". Section 10 of the Magistrates Act conferred upon the appellant a range of administrative functions or powers. They included the nomination of coordinating magistrates, the allocation of magistrates to particular localities and the power of reprimand. Indeed, it was a demand made by the appellant upon a coordinating magistrate to show cause why he should not be removed from that post which gave rise to the charge against her under s 119B of the Code. Attainment of the evident purpose of s 21A will be limited if it were to be given the qualified reading for which the respondent contends. 45 There was a second count of attempting to pervert the course of justice but, in the events that happened, this was not the subject of a verdict. For these reasons, which concern the construction of s 21A, and those on this issue developed by the Chief Justice in his judgment, the appellant was not liable to be held criminally responsible for the conduct alleged against her. That being so, the subsidiary grounds of appeal do not arise. They canvass questions of the construction of s 119B and various aspects of the conduct of the trial. Nor is this the occasion to consider the perimeter of the common law doctrines respecting judicial immunity. The essential point is that, as a matter of law, the appellant should not have been put to trial. In that circumstance, it will be inappropriate to enter upon any consideration of the other issues or of their merits. We should add that we agree with what is said by Hayne J respecting Truong v The Queen46. The appeal should be allowed, the orders of the Queensland Court of Appeal set aside and in place thereof the appeal to that Court should be allowed, the conviction of the appellant quashed, and there be entered a judgment and verdict of acquittal on each ground of the indictment. 46 (2004) 78 ALJR 473; 205 ALR 72. Kirby 128 KIRBY J. This appeal from a judgment of the Court of Appeal of the Supreme Court of Queensland47 concerns an extraordinary case. Ms Diane Fingleton ("the appellant"), then the Chief Magistrate in Queensland, was convicted of an offence against the Criminal Code (Q) ("the Code"). She was sentenced to be imprisoned. Her conviction, following a jury verdict of guilty, was confirmed by the Court of Appeal48. Her sentence of imprisonment for twelve months was varied by that Court which suspended the sentence for an operational period of two years after the appellant had served six months imprisonment49. Upon the making of these orders, the appellant resigned as Chief Magistrate. She did so before making application to this Court for special leave to appeal. Such leave was later sought and granted. Meanwhile, the appellant had served the custodial part of her sentence. She now seeks the setting aside of her conviction. In a sense, this appeal illustrates a clash between two principles important to the proper administration of justice. Each of these principles is reflected in the Queensland legislation invoked before this Court. On the one hand, there is the principle providing an immunity to judicial officers in respect of things done and omitted to be done in the exercise of their functions as such. That principle, together with protected tenure in office, reinforces the independence of mind and action of judicial officers, essential to the proper discharge of their functions. On the other hand, there is a further principle that forbids anyone from causing, or threatening to cause, injury or detriment to a witness in judicial proceedings. Self-evidently, judicial proceedings would be undermined, and their just and lawful outcome frustrated, if, without reasonable cause and in retaliation against a person for becoming a witness, threats or other detriments were occasioned to such a witness. In the remarkable circumstances of this case, the second principle was allowed to prevail in the courts below. It did so without any consideration, either at trial or in the Court of Appeal, of the first. When the law is properly applied to the facts, the first principle prevails. It removes "criminal responsibility" on the part of the appellant that was essential to sustain the conviction recorded against her. She should not have been prosecuted, still less tried and convicted, for she was entitled to the immunity belatedly invoked on her behalf. Her conviction must be set aside. 47 R v Fingleton (2003) 140 A Crim R 216. 48 Fingleton (2003) 140 A Crim R 216 at 224 [23]. 49 Fingleton (2003) 140 A Crim R 216 at 226 [33]. Kirby The facts, legislation and arguments The facts and legislation: The facts are described in the reasons of Gleeson CJ in terms that I accept50. In one respect, it is unfortunate to recount once again the events and exchanges that led the appellant to her predicament. The chief point of the immunity (now upheld) is to avoid the kind of judicial and public scrutiny of such circumstances as has now repeatedly occurred51. The immunity, once it is held to exist, applies because of the law's acceptance that, for reasons of public interest higher even than the accountability and transparency of the exercise of public power, such exercise (in a case of the present type) should not be examined in a criminal or civil court. On the other hand, it is as well that the background to the case should be explained so that, years hence, the events of these proceedings will be remembered for such lessons as they teach. And also because the outcome now favoured by this Court demonstrates the extent to which the immunity, found applicable to the case, operates to exclude judicial and public scrutiny, notwithstanding the adverse interpretation inferentially placed by the jury upon aspects of the appellant's conduct. The reasons of Gleeson CJ contain the relevant provisions of the Magistrates Act 1991 (Q) ("the Magistrates Act")52 and of the Code. The former provisions describe the applicable powers, duties and responsibilities of the Chief Magistrate in Queensland. They contain the extension, in respect of the performance or exercise of an administrative function or power, of the immunity enjoyed by a magistrate in judicial proceedings in the Magistrates Court53. The Code contains a general provision for the immunity of judicial officers in the exercise of judicial functions54. It is this provision that is picked up and extended to the "performance or exercise of an administrative function or power" by provision of the Magistrates Act. As well, the Code contains a section expressing the criminal offence of retaliation against a witness with which the appellant was charged and of which she was convicted55. It is unnecessary to repeat any of this statutory material. 50 Reasons of Gleeson CJ at [16]-[18]. See also reasons of McHugh J at [63]-[76]. 51 At trial, in the Court of Appeal, now in this Court, in the media and before the public. 52 Reasons of Gleeson CJ at [10]-[11]. 53 Magistrates Act, s 21A. See reasons of Gleeson CJ at [1]. 54 The Code, s 30. See reasons of Gleeson CJ at [2]. 55 The Code, s 119B. See reasons of Gleeson CJ at [19]. Kirby The appellant's arguments: It is clear enough that the threshold point upon which the appellant now succeeds in this Court was overlooked by the prosecutor, by all counsel in the courts below, by the trial judge and by the Court of Appeal. No mention of it is made in the directions hearing that took place before the trial56. That would have been the natural and proper time and place for such a fundamental point to have been raised, on a motion to quash or stay the indictment. Nor was the point mentioned during the trial (or, so far as appears, in the earlier trial of the appellant that resulted in an order for retrial when the first jury failed to reach a verdict). Neither was it raised before, or by, the judges of the Court of Appeal. In this respect, the case bears a certain similarity to the circumstances that arose in Giannarelli v The Queen57. Here, as there58, the legal point that proves fatal to the successful prosecution of the appellant was first raised in this Court59. On the return of the appeal, once the immunity issue was raised, it assumed predominance in the argument addressed to this Court. It may seem surprising that the question of immunity did not occur to anyone earlier. Analogous questions have arisen, under the general principles of the common law (apart from the statutory provisions invoked here), in several cases in recent years, both in Australia60 and overseas61. Such cases have extended both to civil and criminal proceedings against judicial officers. Such proceedings have included those concerned with the discharge of judicial functions, properly so called, and also with administrative functions ancillary to such functions62. 56 Under the Code, s 592A. See reasons of Gleeson CJ at [22]. 57 (1983) 154 CLR 212. 58 (1983) 154 CLR 212 at 217, 221. In Giannarelli the point was raised "in other proceedings" at first instance after the Court of Criminal Appeal dismissed the appeals of the appellants but before the application for special leave to appeal to this Court: see Giannarelli v Wraith (1988) 165 CLR 543 at 554. 59 See [2004] HCATrans 380 at line 17. 60 See eg Gallo v Dawson (1988) 63 ALJR 121; 82 ALR 401; Rajski v Powell (1987) 11 NSWLR 522. 61 See eg Sirros v Moore [1975] QB 118; Nakhla v McCarthy [1978] 1 NZLR 291 at 301; Re Clendenning and Board of Police Commissioners for City of Belleville (1976) 75 DLR (3d) 33; Imbler v Pachtman 424 US 409 (1976). 62 eg Yeldham v Rajski (1989) 18 NSWLR 48. The challenge there concerned a State Supreme Court judge's refusal to grant leave to prosecute a witness for perjury, (Footnote continues on next page) Kirby Leaving aside the statutory provisions that govern the outcome of this appeal, the close relationship between institutional arrangements for the assignments of judicial officers and the discharge of the judicial function63 ought to have set legal alarm bells ringing concerning any attempt to have a court, specifically a criminal court, intrude into the internal exchanges between the appellant, as Chief Magistrate in Queensland, and Magistrate Gribbin, a coordinating magistrate. If the question of immunity was ever contemplated by anyone, perhaps it was rejected because of the rules, now overtaken by statute and the common law, that formerly drew artificial distinctions in this respect between judicial officers at different ranks in the hierarchy64. More likely, the immunity was simply overlooked because of the press of business, the novelty of the circumstances or a slip up, easy enough to happen in human affairs. As a consequence of the belated presentation of the immunity argument, it becomes necessary, in my view, to address three issues. Only if the appellant were to fail on those issues, would this Court have to consider the other arguments advanced in this Court on her behalf65. Those arguments, like that concerning immunity, were also new, in the sense that they had not been specifically relied on in the Court of Appeal. In that Court, the sole point that such refusal being held to be ministerial or administrative in character. See also Imbler 424 US 409 (1976). 63 Rajski v Wood (1989) 18 NSWLR 512 at 519 referring to United Nations, Basic Principles on the Independence of the Judiciary, cl 14: "The assignment of cases to judges within the court to which they belong is an internal matter of judicial administration." 64 See Sirros v Moore [1975] QB 118 at 134-136; Maharaj v Attorney-General of Trinidad and Tobago (No 2) [1979] AC 385 at 404 (PC); Attorney-General (NSW) v Agarsky (1986) 6 NSWLR 38; Rajski v Powell (1987) 11 NSWLR 522 at 65 The appellant also argued (1) that her conduct manifestly fell outside the expressions "without reasonable cause" and "threatens to cause ... detriment" and "because of" in s 119B of the Code and that the trial judge's directions to the jury on those matters were inadequate; (2) that a person who supplied an affidavit to a judicial proceeding but who was not called to give oral evidence was not a "witness" within the meaning of s 119B of the Code; and (3) that the prosecution had been obliged, as a matter of fundamental fairness, to call as a witness in the prosecution case the solicitor, retained by the Crown Solicitor to advise the appellant, on whose advice the appellant acted in sending the letter that was alleged to constitute the offence with which she was charged. The Crown Prosecutor declined to call that witness, obliging the appellant to do so in the defence case. Kirby was argued in contest to the conviction of the appellant of the offence against s 119B of the Code, was that no reasonable jury could have found beyond reasonable doubt an absence of reasonable cause for the appellant's threat to remove Magistrate Gribbin from the office of coordinating magistrate66. The issues The issues that I will consider, relevant to the immunity point, are: The constitutional "appeal" issue: Whether, the ground of immunity not having been propounded at trial or in the Court of Appeal, this Court, in discharging, as here, its constitutional function of hearing and determining "appeals" from judgments, orders and sentences of the Supreme Court of a State, may correct the orders of such a court for error, although that court was never invited to, and did not, pass upon the matter, later invoked, in reaching its subject "judgment, order and sentence". The waiver or spent ground issue: Whether the failure of the appellant, at the directions hearing or on her arraignment, or otherwise, to raise the issue of immunity now argued, constituted a waiver of the point67. Alternatively, whether it represented an instance where the appellant's right to immunity, deriving as it was said from the combined operation of s 30 of the Code and s 21A of the Magistrates Act, was "spent". And whether the circumstances were such as to exclude any "miscarriage of justice" necessary to justify intervention by a court, including this Court, in a criminal appeal. The judicial immunity issue: Whether, if the foregoing constitutional and procedural impediments are overcome, the appellant can make good her belated appeal in this Court to an immunity from criminal responsibility, having regard to three possible reasons for denying such immunity: That, within s 21A of the Magistrates Act, the immunity provided with respect to the performance or exercise of an administrative function or power "under an Act" did not apply to the function or power relevant to this case, namely the exercise by the appellant as Chief Magistrate of her powers with respect to the nomination of Magistrate Gribbin as a coordinating magistrate (and hence the 66 (2003) 140 A Crim R 216 at 219 [9]. 67 Truong v The Queen (2004) 78 ALJR 473 at 493 [110]; 205 ALR 72 at 99. Kirby termination of such nomination) under s 10 of the Magistrates Act68; That, within the language of s 21A of the Magistrates Act, and in particular having regard to the verdict of the jury, the appellant's conduct was not to be characterised as the performance or exercise by her of functions and powers "conferred on the magistrate under an Act" but rather as a personal and aberrant activity of her own, that took her outside her judicial and administrative functions and powers, and hence beyond the immunities provided by the Queensland laws; or That, within the opening words of s 30 of the Code, the provisions upon which the counts of the indictment found against the appellant relied for the two offences alleged against her were "expressly provided by this Code", so as to exclude the application of the statutory immunity from criminal responsibility in this case. Before this Court, the prosecution sought to argue only one of the foregoing issues in order to sustain the conviction of the appellant. This was issue (3)(a). However, subject to considerations of procedural fairness, it is not ultimately for parties, by their arguments, agreements or conduct of litigation, to control the application by this Court of the law applicable to a case before it69. In this appeal, that principle applies even more clearly because of the history of apparent oversight of relevant arguments earlier in the proceedings. I therefore propose to deal with all of the identified issues. Doing so will demonstrate that this case is one that properly invites the application of the legal immunity. It obviates the consideration of the other issues argued by the appellant to which, however, I will make some brief closing reference. The constitutional "appeal" issue Appeal where no prior determination: A controversy has existed in the past as to whether the failure of a party to raise a ground before the trial and intermediate courts means that such party cannot thereafter establish error of the courts below, necessary to warrant disturbance of their orders by an appellate court such as this. Over my objection, this Court has applied a strict view of the 68 Section 10 is set out in the reasons of Gleeson CJ at [11]. Under the Acts Interpretation Act 1954 (Q), s 25, the power to appoint includes the power to remove or suspend, at any time, a person appointed to an office. 69 Roberts v Bass (2002) 212 CLR 1 at 54 [143]. In criminal appeals see Conway v The Queen (2002) 209 CLR 203 at 241-242 [102]-[104]. Kirby meaning of "appeals", appearing in s 73 of the Constitution70. Thus, it has concluded that the Constitution, in providing for the form of appeal that it does, has excluded the reception of new facts not proved in the courts below71. This strict view of the appellate function undoubtedly affords a foundation for an argument that, if a party fails to raise a point before the trial and intermediate courts, that party cannot thereafter contend that such courts were in error in disposing of the case without deciding the point, if it was only raised for the first time in this Court. In Gipp v The Queen72, McHugh and Hayne JJ referred to this point. Their Honours did so by reference to the jurisdiction conferred on this Court by s 73 of the Constitution. They also noted the terms in which the constitutional jurisdiction in appeals is to be discharged (to "give such judgment as ought to have been given in the first instance") in accordance with the Judiciary Act 1903 (Cth), s 3773. By reference to the jurisdiction of the Court of Appeal of Queensland in that case, McHugh and Hayne JJ appeared to favour the view that, constitutionally, the appellate jurisdiction of this Court does not extend to setting aside a judgment of a State or federal court upon a ground not earlier argued in such courts74. If this were the correct view of s 73 of the Constitution, it would deny the appellant any chance now to invoke the immunity argument raised in these proceedings. That argument would simply not give rise to an "appeal" of the limited kind for which the Constitution provides. The flexible constitutional rule: Such a possibility, which was inconsistent with this Court's past authority and practice75, did not find favour with the other members of the Court in Gipp76. It is the majority opinions in Gipp, and necessarily not the dissenting opinions in that case, that establish the 70 Eastman v The Queen (2000) 203 CLR 1 at 12-13 [17]-[18], 25-26 [75]-[76], 41 [131]-[133], 63 [190], 96-97 [290]; cf at 93 [277], 117-118 [356]. 71 eg Mickelberg v The Queen (1989) 167 CLR 259 at 271, 297-299. 72 (1998) 194 CLR 106. 73 (1998) 194 CLR 106 at 126 [57]. 74 (1998) 194 CLR 106 at 128-129 [65]. 75 See eg Giannarelli v The Queen (1983) 154 CLR 212 at 221, 230-231; Pantorno v The Queen (1989) 166 CLR 466 at 475. 76 (1998) 194 CLR 106 at 116 [23], 153-155 [135]-[138], 169 [184]. Kirby relevant constitutional principle77. Later cases such as Crampton v The Queen78 simply affirm and reinforce what was held and decided in Gipp. The tension between the view of constitutional "appeals" adopted in Gipp and that taken in other cases concerning the admissibility of new evidence in appeals in exceptional circumstances, remains for resolution by this Court. Since Gipp79 it has been accepted that this Court has the jurisdiction and power, in determining "appeals" within s 73 of the Constitution, to permit new grounds to be raised before it for the first time "[i]n exceptional cases, where serious error is brought to light … which concerns a 'manifest miscarriage of justice'"80. The appellant so submitted. The respondent did not deny this Court's power. So long as a matter remains alive within the Australian judicature and, specifically, whilst it is before this Court, it is competent for this Court, under the Constitution, to permit a new ground to be raised, although that ground was never previously relied upon and was not earlier determined adversely to the party later relying upon it. It is important to acknowledge this point at the outset for it provides the constitutional moorings for this case without which the appellant would be out of court without any consideration of her new arguments. The waiver or spent ground issue The principle of finality: But should the appellant be denied the opportunity belatedly to raise the immunity ground, having regard to the way in which her defence was conducted below? It was not disputed that, at her trial, in the pre-trial directions hearing and on the first appeal, the appellant was represented by competent senior counsel. The formula referring to "serious error" belatedly brought to light concerning a "manifest miscarriage of justice" is unilluminating when a decision-maker reaches the decision in a particular case. Where experienced counsel did not raise the point, should this Court permit it to be argued for the first time, at such a late stage in these proceedings? Both in civil and criminal appeals, this Court has repeatedly refused leave to parties to propound new points, argued for the first time before it. Commonly, this refusal is justified by the "elementary rule of law that a party is bound by the 77 cf reasons of Hayne J at [195]. 78 (2000) 206 CLR 161. 79 See eg Crampton (2000) 206 CLR 161 and Heron v The Queen (2003) 77 ALJR 908; 197 ALR 81. See reasons of McHugh J at [62]. 80 Gipp (1998) 194 CLR 106 at 154 [136]. Kirby conduct of his or her case"81. That rule has been stated by six Justices of the Court in University of Wollongong v Metwally (No 2), in the context of civil "Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so." In criminal appeals, this rule is tempered, to some extent, by the ordinary focus of the governing legislation upon issues of "miscarriage of justice" and by the heightened concern of the law with questions of liberty, status and reputation typically involved. Nonetheless, the law's proper anxiety about finality of litigation, and about the costs and other burdens that litigation occasions, focuses attention, in cases such as the present, upon the question of whether "special" or "exceptional" circumstances are shown that warrant a belated reliance on a new point. This obstacle cannot be brushed aside. Consistency in the treatment of appeals requires that this issue be given specific attention in this appeal. Obviously, it would be quite wrong if it were thought that an ordinary prisoner would be refused leave to raise a point but a former judicial officer would be given special treatment. In the present case, two factual elements and two legal considerations need to be weighed in deciding the availability of the issue of immunity now presented. So far as the factual elements are concerned, they are (1) the quality of the appellant's representation at trial and on the appeal and (2) the tactical decision that arguably appears to have been taken by the appellant's then legal representatives to present the case to the jury (and to the Court of Appeal) in a simple, black-and-white way. As Gleeson CJ has pointed out83, there were several intermediate possibilities for the presentation of the appellant's defence to the jury. However, her case was presented in a particular way. In the Court of Appeal, nuanced arguments for the appellant were likewise disclaimed. Presumably, this course was adopted so as to simplify the questions for decision (especially before the jury) and to withdraw attention from the detail of the facts so as to address the primary battleground that was chosen as the one inferentially judged most favourable to the appellant. Presumably, this was the suggestion that the jury were bound, in the circumstances, to have a reasonable doubt 81 Liftronic Pty Ltd v Unver (2001) 75 ALJR 867 at 875 [44]; 179 ALR 321 at 331. See also University of Wollongong v Metwally (No 2) (1985) 59 ALJR 481 at 483; 60 ALR 68 at 71; Coulton v Holcombe (1986) 162 CLR 1 at 8-9. 82 (1985) 59 ALJR 481 at 483; 60 ALR 68 at 71. 83 Reasons of Gleeson CJ at [30]. Kirby concerning the presence of a "reasonable cause" for the conduct of the appellant, and (the related point) that they were bound to have a reasonable doubt that the appellant's actions were performed "in retaliation" against Magistrate Gribbin for giving a witness statement to the judicial proceeding. The Court's approach in Truong: Potentially a serious obstacle for the appellant in raising in this Court the new legal ground of immunity is suggested by analogy to the Court's recent decision in Truong v The Queen84. In that case, Mr Truong had sought, for the first time before the Court of Appeal of Victoria, to raise an objection to his trial and conviction of charges of kidnapping and murder, upon the basis that the Extradition Act 1988 (Cth) forbade the trial on the offences charged because the trial constituted a breach of the "speciality" requirement contained in that Act85. Such breach was said to have arisen because the Act demanded that an extradited person, surrendered to Australia, "shall not … be ... tried in Australia for any offence" other than (relevantly) the offence for which he or she was surrendered by the foreign state. As here, the appellant's legal representatives in Truong had not noticed, or raised, the extradition point at the trial. Specifically, they had not done so at the correct moment, which was held to be at the stage of the arraignment of Mr Truong, prior to the commencement of the trial. In resistance to this point, the prosecution argued in this Court, when the point was renewed, that Mr Truong had waived his right to rely on the suggested departure from the statutory requirements of "speciality". Alternatively, it was submitted that he should be denied relief on the basis of his failure to raise the point earlier. This, it was said, meant that the issue was "spent" or that no "miscarriage of justice" had thereby occurred, warranting the intervention of this Court86. Because of what appeared to have been oversight on the part of those representing Mr Truong at trial, in failing to notice the point (rather than any tactical decision to hold it in abeyance), no member of this Court considered that waiver afforded a correct category with which to deny Mr Truong the opportunity to argue the breach of the law of "speciality" in this Court. Nevertheless, Gummow and Callinan JJ (who were members of the majority in Truong), whilst finding an arguable question on the suggested breach of the requirement of "speciality", decided that such point had been lost once Mr Truong's trial commenced. Their Honours said87: 84 (2004) 78 ALJR 473; 205 ALR 72. 85 Extradition Act 1988 (Cth), s 42(a)(i). 86 Because of the terms of the Crimes Act 1958 (Vic), s 390A. 87 Truong (2004) 78 ALJR 473 at 493 [110]; 205 ALR 72 at 99 (footnote omitted). Kirby "It was with the arraignment that, in ordinary usage, the trial may be said to have commenced. Reference is made … to ss 390A and 391 of the Crimes Act. It is not useful to use the term 'waiver' in this context. The reasons why the point was not taken do not appear in the record. But there is no suggestion that the appellant was the victim of any malpractice in this regard. In the absence of such a plea and in the face of the pleading of the general issue by the plea of not guilty, the appellant's personal right derived from s 42 [of the Extradition Act] was spent." In his reasons in Truong, Hayne J concluded that s 42 of the Extradition Act did not apply in the manner alleged by Mr Truong88. However, his Honour also rejected Mr Truong's attempt belatedly to rely on the argument on the basis that the circumstances of that omission indicated that there was no "miscarriage of justice" that would justify this Court's intervention89: "[O]nce the appellant, on being arraigned, pleaded not guilty he could not later, having been convicted, say that he should not have been tried. On arraignment he could have entered, as a special plea90, the plea that his trial would contravene s 42 of the Act. Not having done so, even if the premise for this second contention had been made out, there would have been no miscarriage of justice warranting the intervention of the Court of Appeal91." In my reasons in Truong92, I held that it was inappropriate to consider the prosecutor's objection to the belated reliance on the argument of "speciality" in terms of waiver93. However, by reference to the language and policy of s 42 of the Extradition Act, designed to prevent a trial contrary to the rule of "speciality" happening at all, I concluded that, to uphold the language and object of the statutory immunity from such a trial, this Court should permit the appellant, although belatedly, to rely on his objection. Important considerations of public 88 Truong (2004) 78 ALJR 473 at 507 [197]; 205 ALR 72 at 119. The relevant provisions of the Extradition Act 1988 (Cth) are set out in the reasons of Hayne J at 89 Truong (2004) 78 ALJR 473 at 507 [198]; 205 ALR 72 at 119. 90 Crimes Act 1958 (Vic), s 390A. 91 Crimes Act 1958 (Vic), s 568(1). 92 Truong (2004) 78 ALJR 473 at 498-502 [138]-[162]; 205 ALR 72 at 106-111. 93 Truong (2004) 78 ALJR 473 at 501 [157]; 205 ALR 72 at 110. Kirby law, not just private rights, were involved. I disagreed that the point had been "spent" once the trial commenced and after Mr Truong had undergone the trial that ensued. I concluded that the lateness in raising the point did not exclude a miscarriage of justice. Consistent approaches to new grounds: Upon the approach that I took in Truong, there is no difficulty in the present appellant's raising in this Court the immunity point that was not raised on her behalf in the courts below. As in Truong, the point is one that concerns a large question of public policy. There, as here, it is a ground directly relevant to whether there should have been a criminal trial at all, as propounded by the prosecution. The issue was expressly reflected in Truong (as the immunity is here) in the terms of the governing legislation. As here, the point in Truong was not one concerned solely with the rights of the appellant before this Court but with wider considerations of legal policy. Moreover, in the view that I took in Truong, procedural rules and impediments, at least in such matters, could not be allowed to impede consideration of the substance of the complaint, namely that an important aspect of the statute law of the State had been overlooked and therefore not applied. In Truong, in words that I consider equally applicable to the present appeal, I said94: "In the present case it is difficult to believe that, if the appellant could make good his objection to the lawfulness of his trial, he would lose the opportunity to be heard on that issue simply because of a delay in raising it. Much less substantial grounds of objection to less serious convictions carrying much shorter sentences have been permitted by this Court, notwithstanding a failure of the prisoner to raise the objection at trial. Here, the appellant submitted that the conduct of any trial at all, on the offences in the presentment, was contrary to the express command of … law. If this was so, it is arguable that the 'proviso' is inapplicable, being designed to defend a lawful trial which was flawed in its conduct, not one which explicit … legislation said should not be conducted at all." The controversy that arose in Truong between the approach that I favoured and the approach taken by the majority to the belated point raised there, is reflected in other recent decisions of this Court where there have been similar divisions of opinion95. I adhere to the views that I have earlier expressed. In my opinion, neither waiver, nor procedural loss of the point as "spent", nor a 94 Truong (2004) 78 ALJR 473 at 501 [154]; 205 ALR 72 at 110 (footnotes omitted) (emphasis in original). 95 See eg Conway v The Queen (2002) 209 CLR 203 at 241 [102]. Kirby suggested lack of a "miscarriage of justice" stand in the way of the appellant's now relying on the immunity argument. That argument is one that concerns obedience to statute law enacted by Parliament. Equally, it involves a high policy for the administration of justice, expressed in that law. Yet can the belated attempt of the appellant in this case to rely on the immunity now invoked be upheld by this Court, consistently with the approach that the majority adopted so recently in Truong? Obviously, if my view were applied there is no difficulty once this Court considers that the circumstances are sufficiently "special" or "extraordinary", so as to warrant a determination of the belated point. But I was in dissent in Truong. The express prohibition in the federal legislation in Truong was upon the conduct of a "trial". Arguably therefore, as Gummow and Callinan JJ concluded, once that "trial" had commenced (and particularly after it was completed) the opportunity for raising the objection was lost forever. So it is said, for good or ill, the offence to the provisions of the Extradition Act had occurred and it was necessary to consider what followed. I do not find this point of suggested distinction very satisfying given that immunity from trial at all was the common purpose of each enactment invoked by the respective accused in this case and in Truong. However, as those who rejected the immunity in Truong are content to admit of the distinction, I will not struggle to deny it given that I disagree with the supposed rule on which the exception operates. Although the respondent in this Court did not raise any of the foregoing points, it is important for this Court to notice them to ensure the application of a consistent approach to belated grounds of appeal in criminal appeals before it. Self-evidently, it should not matter that such a ground is raised by a convicted sex offender96 or by a convicted foreign kidnapper and murderer97 or by a convicted judicial officer98. This Court must approach, and must be seen to approach, such cases in a consistent and impartial way. Properly, an appeal such as the present is subject to close scrutiny. No special favours must be accorded, or appear to be accorded, to a person such as the appellant. This Court must act in a principled fashion, holding the scales evenly whatever the character of the alleged offence or identity of the offender. That is certainly the way in which I have endeavoured to approach the cases. Conclusion: no procedural impediment: No impediment of waiver, no procedural barrier and no want of a miscarriage of justice arise in this appeal to 96 As in Gipp (1998) 194 CLR 106. 97 As in Truong (2004) 78 ALJR 473; 205 ALR 72. 98 As in the present appeal. Kirby suggest that the appellant should be denied the opportunity of reliance on the immunity overlooked below. Specifically, as others have stated, the immunity in question here, although protective of individual judicial officers, does not exist solely for that purpose99. It exists for the wider public benefit of preventing curial and other public interventions into the internal arrangements of courts, and the independent performance and exercise of administrative functions and powers, specifically those relevant to the assignment of judicial officers to hear and determine cases within such courts. If such matters could be the subject of judicial proceedings, the result would be the risk that those with money, power or determination could vex judicial officers by challenging (and thereby seeking to influence) assignments within courts of the judicial officers who will participate in, and determine, cases. Subject to what follows, the foregoing immunity is expressly provided for by s 21A of the Magistrates Act. There is no relevant procedural impediment to the appellant's raising the point belatedly. She should be permitted to do so. The judicial immunity issue The reference to "an Act": To my mind, there is an undecided question as to whether the appellant's exercise of her functions and powers concerning the nomination of colleagues who will determine the judicial officers within the Magistrates Court who would hear cases, involves the exercise of her "judicial functions" within s 30 of the Code. If it does, there was no need to rely on the extension of that immunity in the Magistrates Act to an "administrative function or power". However, it is unnecessary to decide that point100. Assuming that, properly classified in the light of the statute law of Queensland, the internal arrangements of the magistracy of the State affecting the assignment of cases (and specifically the nomination or withdrawal of the to be a supervising magistrate101) were nomination of a magistrate 99 Similarly, in respect of the Extradition Act considered in Truong, public policy considerations existed for permitting a belated invocation of the Extradition Act to succeed: defence of the sovereignty of the nations engaged in extradition; insistence that Australia, like other nation states, comply with "speciality" conditions on a reciprocal basis; and avoidance of abuse of extradition procedures generally. These are not considerations personal to the prisoner, nor arguably to be waived by him. They concern extradition states and their respective rights and duties. 100 cf reasons of Gleeson CJ at [44]. 101 Within the Magistrates Act, s 10(2). Kirby "administrative" and not "judicial" in character, the appellant relied on s 21A of the Magistrates Act to extend the statutory immunity for the exercise of her "judicial" functions to that "administrative" decision and the steps necessarily involved in it. The respondent resisted such an extension. It did not address what I have described as the unresolved point. Its resistance relied on the argument that one of the preconditions stated in s 21A was not established, namely that the administrative function or power in question must be one "conferred on the magistrate under an Act". The respondent's argument102 was that the identified phrase did not cover s 10 of the Magistrates Act but was a reference to some other and different Act. Otherwise, it was submitted, s 21A would have contained words such as "including this Act". Section 21A of the Magistrates Act is ambiguous. Legislative ambiguity is a common visitor to this Court103. Resolving such uncertainties involves a court in looking for textual and other clues as to the purpose of Parliament in adopting the language chosen. Such clues may be derived from considerations of legal principle and policy that throw light on the interpretative task in hand. So far as considerations of text and structure are concerned, it is true that, had it been intended that s 21A of the Magistrates Act would refer to functions and powers conferred by its own provisions, it would have been common, even perhaps usual, for explicit reference to have been made to functions or powers conferred by that Act itself. It is also fair to say that the use of the indefinite article ("an") lends some support to the respondent's submission. As against these arguments, the Magistrates Act is undoubtedly "an Act". Reference to it is not expressly excluded, as it might have been (by use of a phrase such as "other than this Act"). The Magistrates Act includes provisions for the performance of administrative functions and powers, including by the Chief Magistrate. The language chosen is stated in general terms. It is not intended to provide, nor is it suitable for, a restriction on the application of the immunity the telephonic Explanatory Notes that accompanied the Bill inserting what became s 21A of the Magistrates Act104. interception, nominated instance of the 102 See reasons of Gleeson CJ at [48]. 103 News Ltd v South Sydney District Rugby League Football Club Ltd (2003) 215 CLR 563 at 580 [42]. 104 Justice Legislation (Miscellaneous Provisions) Bill (No 2) 1999 (Q), Explanatory Notes at 8, 10; cf reasons of Gleeson CJ at [15] where the Explanatory Notes are quoted. Kirby The only possible reason of legal principle and policy for confining the interpretation of s 21A as the respondent submitted is the law's strong disposition against immunities that derogate from an individual's ordinary legal obligations to others, and to the community, on a footing of full equality before the law105. In the event of a real doubt, legislation will normally be construed so as to uphold such equality and to confine the immunity. This follows on the assumption to depart from such an interpretation, it would have said so in plain terms. This principle is but one instance of the general approach of the courts to construe statutes favourably to the observance of fundamental rights and duties, of which equality before the law is one106. legislature that, had intended the I give full weight to this consideration in the present case. However, the express terms of s 10 of the Magistrates Act are virtually impossible to reconcile with a view of s 21A of the same Act that would exclude the application of s 21A to the performance or exercise of the "administrative" functions or powers provided in s 10 (if administrative be their correct classification). Moreover, the very large number of plainly "administrative" functions and powers of magistrates, contained in numerous Queensland statutes107, makes it extremely difficult to see a consistent legislative policy that would extend the immunity to them but deny it to the performance or exercise of the sensitive and important functions and powers conferred by s 10 of the Magistrates Act. Conclusion: appellant entitled to immunity: It follows that the preferable interpretation of the phrase "under an Act" in s 21A of the Magistrates Act is that it includes reference to that Act itself. In this, I agree with the other members of this Court. The consequence is that, at the least, the appellant was entitled to the immunity provided by the express extension in s 21A of the Magistrates Act of the general judicial immunity provided in s 30 of the Code against criminal responsibility. The appellant may invoke that immunity in this Court, albeit 105 cf Gibbons v Duffell (1932) 47 CLR 520 at 528, 534; Brodie v Singleton Shire Council (2001) 206 CLR 512 at 554-558 [91]-[101], 600-601 [228], 602-603 [234]-[236]; D'Orta-Ekenaike v Victoria Legal Aid (2005) 79 ALJR 755 at 811 [317]; 214 ALR 92 at 170. 106 Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 at 553 [11], 562-563 [43], 577 [90], 592-593 [134] and cases there cited. 107 Referred to in the reasons of Gleeson CJ at [45]. Kirby belatedly, as she has done. Subject to what follows, because the immunity applied to the appellant's relevant acts and omissions, she should not have been charged, or tried, for an offence against s 119B of the Code, as contained in the indictment. The alternative offence with which she was charged, against s 140 of the Code, upon which the verdict of the jury was not taken108, stands in the same position. Characterisation of the exercise of functions: A second potential argument of a textual kind should be mentioned. Although not pressed by the respondent, it is proper for this Court, in deciding this appeal, to deal with it. It concerns the ambit of the immunity for which s 30 of the Code provides. Hence it concerns the extended ambit which s 21A of the Magistrates Act enacts. In s 30 of the Code it is stated (with emphasis here added) that the immunity from criminal responsibility applies "for anything done or omitted to be done by the judicial officer in the exercise of the officer's judicial functions". By extension under s 21A of the Magistrates Act, the same immunity applies "for anything done or omitted to be done by the judicial officer in the exercise of" an "administrative function or power" of that officer. It is necessary, therefore, to characterise the conduct that is impugned. Simply because an action is performed by a person who is a judicial officer does not, without more, attract the immunity. Nor does the fact that the action was done during work hours, in or from the judicial officer's chambers, on official notepaper or otherwise with an outward semblance of official conduct, afford the immunity if the reality posited by the legislation is missing109. Can it be said, in this case, that the verdict of the jury, finding the appellant guilty of the offence against s 119B of the Code, indicates, or suggests, a characterisation by the jury of her conduct, or some of it, as involving the conclusion that the appellant stepped outside the "exercise of [her] administrative function or power", in order to pursue a personal "payback" or retribution or private vendetta against Magistrate Gribbin110? A suggestion similar to this appears to have been made by the prosecution at the trial. So, does the jury's verdict indicate a rejection of the characterisation of the "function or power" necessary to attract the statutory immunity to the actions of the appellant? Is it such that this Court should reject the appellant's belated appeal to the immunity point or, possibly, commit that issue to be retried with explicit reference to it before a new jury? 108 Relating to attempting to pervert the course of justice. 109 R v Johnson (1805) 7 East 65 [103 ER 26]. 110 cf reasons of Gleeson CJ at [27]-[29]. Kirby In this case, these questions should be answered in the negative. First, although "retaliation" and "lack of reasonable cause" were certainly pressed upon the jury, this was because of the terms of s 119B of the Code111. No consideration whatever was given by the jury to any issue of judicial immunity. This was because no such issue was raised before or during the appellant's trial. The jury's verdict cannot, therefore, be taken as affirming a characterisation of the appellant's actions relevant to the application of s 30 of the Code, as extended by s 21A of the Magistrates Act. Secondly, the purpose of the immunities provided by the cited provisions of the Queensland statute law is to forestall, in the cases to which they apply, the very kind of proceedings that occurred in this instance, involving as they did curial examinations of the exercise of functions and powers which the statutory provisions aimed to remove from such accountability, and do so for important principles of public policy supportive of judicial independence. It would defeat the expression and policy of the legislation and be wholly inappropriate to introduce an obligation in every case to examine all the facts so as to provide the characterisation of the "true nature" of what was done or omitted to be done by the judicial officer as within or outside the exercise of that officer's functions112. To require this would be to undermine the achievement of the purpose of the immunity. It would render it ineffective in practice and would be contrary to the obvious object of the Queensland Parliament in enacting the provisions as it did. Cases might arise in which an issue as to the characterisation of the judicial officer's functions and powers is presented so as, arguably, to take the exercise of those functions and powers out of the immunity provided for in the legislation. It is unnecessary in this appeal to explore the circumstances in which that might be so. It is sufficient to say that the exercise by the appellant of the functions and powers conferred on her under s 10 of the Magistrates Act with respect to Magistrate Gribbin, as now disclosed in all its detail in these proceedings, is clearly within the classification of a performance or exercise of an administrative function and power such as conferred on her by s 10 of the Magistrates Act. If the immunity point had been raised at the proper time (namely when any charge for criminal responsibility was being considered by the prosecution, at the directions hearing or on any arraignment of the appellant), the facts then known would have demanded classification of the appellant's conduct 111 The terms of s 119B of the Code are set out in the reasons of Gleeson CJ at [19]. 112 See the recantation of the analogous introduction of a requirement of "good faith" mentioned by Lord Denning MR in Sirros v Moore [1975] QB 118 at 135 applied in Attorney-General (NSW) v Agarsky (1986) 6 NSWLR 38 at 40 but "refined" in Rajski v Powell (1987) 11 NSWLR 522 at 536, 539. Kirby as falling within s 30 of the Code. Certainly, it would have fallen within that provision as extended by s 21A of the Magistrates Act. The second textual issue must therefore be decided in the appellant's favour. The provision for express exceptions: The third textual consideration was likewise not advanced for the respondent. However, it too should be dealt with. It concerns the opening words of s 30 of the Code, by which the immunity there afforded (including as the foundation for the extension to an "administrative" function and power by s 21A of the Magistrates Act) is to apply "[e]xcept as expressly provided by this Code". Can it be argued that s 119B (dealing with retaliation against witnesses in judicial proceedings) and s 140 (dealing with an attempt to pervert the course of justice) contain language indicating that the sections fall within the exception so provided? This question is answered by considering what the "express" provision contemplated by the opening words of s 30 of the Code intended. Simply because a person is a judicial officer, he or she is not immune from responsibility for criminal conduct, such as stealing from court funds or improperly interfering with the performance by a colleague of that colleague's judicial functions. However, the reference to the "express" provision by the Code is to those sections of the Code that create specific offences that, in terms, are incompatible with the immunity for which s 30 of the Code provided. Thus, certain provisions of the Code deal explicitly with offences specifically applicable to a judicial officer. Instances include ss 120 (corruption) and 136 (acting oppressively or when interested). Tested by this standard, neither s 119B nor s 140 constituted an express provision of the Code for the criminal responsibility of a judicial officer as such. Each section is stated in general terms. Each imposes liability on "a person". Neither is expressed as applicable to "a person who, being a justice ..."113. Such offences do not, therefore, fall within the express derogations from immunity for which the Code provides. The third textual issue should likewise be decided in favour of the appellant. Conclusions and orders The operation of immunity: The result is that no impediment, of a constitutional or procedural kind, stands in the way of the appellant's relying in this Court on the belated argument based on her immunity from criminal responsibility for the offences with which she was charged and upon one of 113 cf the Code, s 136. Kirby which, under s 119B of the Code, she was convicted. The immunity is a complete answer to the counts of the indictment upon which the appellant was tried. Because of this, the appellant should not have been charged, still less tried, let alone convicted of that offence. The large public policy for which the immunity is provided was a complete defence for the appellant. It was available at the threshold. It is one which the appellant is entitled to raise belatedly, and in effect retrospectively, because it defends interests that go far beyond her personal entitlements. She did not waive it. It is not spent. The failure to give effect to it constitutes a "miscarriage of justice". This is so despite the fact that the immunity was not relied upon in a timely manner, as it should have been. In the result, the appellant's conviction should be quashed. This conclusion means that this Court is not required to consider the appellant's residual arguments raising further textual contentions that were not addressed in the courts below and presenting additional contentions on the merits, to the effect that the jury's verdict was unreasonable and contrary to the evidence. The residual merits grounds: Having concluded that the immunity applies, it is inappropriate to examine the "merits" arguments in any detail, for doing so may tend to undermine the very purpose for which the law provides that immunity114. However, the record of this case, as it was permitted to proceed, is indelible. The public trial of the appellant cannot be undone. Out of fairness to her, this Court should, in my opinion, make it clear that she has not succeeded on a purely "technical" point where she failed on the "merits" before the jury in a battleground selected by her, with expert legal advice. The appellant, in my opinion, had substantial arguments on the merits that will not now be reached. In particular, she had significant points to make in her complaint that the conduct of the prosecution by the respondent115 and the directions given to the jury by the trial judge were flawed116. The fact that the appellant succeeds in this Court on 114 Reasons of Gleeson CJ at [56]-[57]. 115 In particular, in failing to pay regard to the immunity provided by law; in charging the appellant at all in the circumstances; and in declining to call a witness in the prosecution case. 116 In particular, in relation to the meaning of s 119B of the Code and in relating the key provisions in that section to the evidence in the trial. See the reasons of Kirby the basis of a statutory immunity does not mean (so far as I am concerned) that she did not also have significant arguments on the legal and factual merits in her appeal. Importance of immunity of judicial officers: In any event, the provision of the immunity from criminal prosecution to the appellant, for her exchanges with Magistrate Gribbin, is not divorced from the merits of the matters in issue in the trial, when those merits are viewed in a wider context. Sometimes, legal immunities from criminal and civil responsibilities cannot be justified. I always regard such immunities with vigilance and strictness. Unless they are provided by valid and clear law, they need sometimes to be confined in their operation and sometimes to be abolished117. Judicial independence from external pressure from litigants and others is one of the legal immunities that can be fully justified. It is supported by reference not only to legal authority but also to legal principle and policy, including considerations of the protection of human rights and fundamental freedoms and the functions of the judiciary in securing those ends. Such immunity is an essential precondition to the rule of law. The independence of judicial officers comes at a price. It is a price that our society has long been prepared to pay. That price is the immunity provided by law. The Queensland Parliament has enacted, and also extended, that immunity. It protects the public interest, not just the interests of individual judicial officers118. The Supreme Court of the United States explained the rationale for this immunity. Speaking of constitutional and common law principles akin to those which in Australia preceded the Queensland laws, that Court said in Pierson v Ray119: "Few doctrines were more solidly established at common law than the immunity of judges from liability for damages for acts committed within their judicial jurisdiction, as this Court recognized when it adopted the doctrine, in Bradley v Fisher120. This immunity applies even when the judge is accused of acting maliciously and corruptly, and it 'is not for the 117 See eg Brodie (2001) 206 CLR 512 at 601 [228], 602-604 [234]-[237]; D'Orta- Ekenaike (2005) 79 ALJR 755 at 810-811 [314]-[317]; 214 ALR 92 at 169-170. 118 Kirby, "Independence of the Legal Profession: Global and Regional Challenges", (2005) 26 Australian Bar Review 133. 119 386 US 547 at 553-554 (1967) per Warren CJ for the Court quoted in Rajski v Powell (1987) 11 NSWLR 522 at 534. 120 13 Wall 335 (1872). Kirby their functions with protection or benefit of a malicious or corrupt judge, but for the benefit of the public, whose interest it is that the judges should be at liberty to independence and without fear of exercise consequences.'121 … [A judge's] errors may be corrected on appeal, but he should not have to fear that unsatisfied litigants may hound him with litigation charging malice or corruption. Imposing such a burden on judges would contribute not to principled and fearless decision-making but to intimidation." From the early days of our legal system, it has been recognised that such an immunity will sometimes expel other legal values that are also precious. Yet so important is judicial independence, that the immunity necessary for it to survive is afforded by statute and the common law and possibly, in Australia, as an implication in the Constitution itself. It is afforded notwithstanding that it will occasionally derogate, within its defined applications, from the criminal and civil responsibility of all persons equally before the law. Lord Bridge of Harwich explained this in In re McC (A Minor)122, in terms applicable to the Queensland laws invoked in this case. Where the immunity applies in terms of the law, the possibility that, in a rare case, it might be abused or that it might occasionally mask a wrong or ill-judged action by a judicial officer must be tolerated for the wider good that the immunity defends123: "[I]t is less harmful to the health of society to leave that party without a remedy than that nine hundred and ninety-nine honest judges should be harassed by vexatious litigation alleging malice in the exercise of their proper jurisdiction." Where that jurisdiction concerns internal arrangements, directly and indirectly affecting the assignment of judicial officers to hear cases, it is especially important that interference from outside a court should be rebuffed. The immunity in such cases is fully justified as essential to the performance of the judicial function. It should not be cut back. Especially is this so because, under the Queensland laws invoked in this case, Parliament has taken the pains not only to enact the immunity in conventional terms but to extend it in a way protective of a person in the position of the appellant from the criminal prosecution to which she was subjected. 121 Scott v Stansfield (1868) LR 3 Ex 220 at 223 quoted in Bradley v Fisher 13 Wall 123 In re McC (A Minor) [1985] AC 528 at 541. See also Anderson v Gorrie [1895] 1 QB 668 at 670-671. Kirby I agree in the orders proposed by Gleeson CJ. Hayne 193 HAYNE J. I agree with the reasons of Gummow and Heydon JJ. I add something only to deal with the suggestion that there may be some difference between what is done in this case, when the appeal is allowed on a point that was not raised in the courts below, and what was done in Truong v The Queen124. In Truong, effect was not given to a point, raised for the first time in the intermediate court, because it had not been raised at trial. Examination of the principles to be applied may begin at various points. For present purposes, it is appropriate to begin with the Court's decision in Crampton v The Queen125, not with the earlier decision in Gipp v The Queen126. The views expressed by McHugh J and me in our dissenting opinions in Gipp, about taking a point for the first time in this Court, were rejected by a majority of the Court in Crampton. It is Crampton, not the dissenting opinions in Gipp, that states the relevant principle127: there is no constitutional inhibition upon the jurisdiction of the Court to entertain an appeal under s 73 of the Constitution on grounds raised for the first time in the Court, but special leave to appeal on such grounds will be granted only in exceptional circumstances. This is such a case. On the hearing of the appeal, there was no submission made that the appellant waived the point upon which she now relies – whether by pleading to the indictment preferred against her, or in some other way. On the contrary, the respondent expressly conceded that the Court could and should entertain the point which is decisive of the appeal. Effect must be given to that concession. It is not a concession about the Court's jurisdiction. That would not bind the Court. But, after Crampton, there is no question about the Court's jurisdiction. The respondent not making the submission that the point now raised was given up by the appellant at trial, or cannot now be raised, it is not for this Court to say of its own motion that the appellant is barred from making the argument. Given the position adopted by the respondent, only fleeting reference was made in oral argument to Truong. Views expressed about the differences between that case and the present are, therefore, unassisted by argument. It is as well, however, to say something shortly about Truong. 124 (2004) 78 ALJR 473; 205 ALR 72. 125 (2000) 206 CLR 161. 126 (1998) 194 CLR 106. 127 (2000) 206 CLR 161 at 171-172 [12]-[14] per Gleeson CJ, 184 [52], 185 [57] per Gaudron, Gummow and Callinan JJ, 206-207 [122] per Kirby J, 216-217 Hayne The provision at issue in Truong was s 42(a) of the Extradition Act 1988 (Cth). That section provided: "Where an extraditable person surrendered to Australia by a country (other than New Zealand), the person shall not, unless he or she has left, or has had the opportunity of leaving, Australia or, in a case where the person was surrendered to Australia for a limited period, has been returned to the country: to Australia in relation be detained or tried in Australia for any offence that is alleged to have been committed, or was committed, before the surrender of the person, other than: any offence in respect of which the person was surrendered or any other offence (being an offence for which the penalty is the same or is a shorter maximum period of imprisonment or other deprivation of liberty) of which the person could be convicted on proof of the conduct constituting any such offence; or any other offence in respect of which the country consents to the person being so detained or tried, as the case may be". The reference to "shall not … be … tried" is important in considering whether the appellant in that case, by pleading not guilty and thus going to trial, gave up the argument that he was not to be tried. By contrast, in the present case, the immunity which the appellant had was an immunity which would be engaged upon demonstrating certain facts including, for example, that she held office as Chief Magistrate and had done what she did in performing functions or exercising powers conferred on her as Chief Magistrate. (I leave aside any question about acts in excess of authority.) In this case, it seems that none of the facts relevant to the application of s 21A of the Magistrates Act 1991 (Q) was in issue. It may have been open, then, to the appellant to apply to stay the indictment before entering a plea, or to move, after entering a plea, for a directed verdict of acquittal. But her pleading to the indictment constituted no waiver of the immunity. First, the immunity is not personal to her; it is not for the holder of the office to waive it. Secondly, pleading not guilty to the indictment did not foreclose the appellant from making the argument that the facts alleged against her, even if proved, revealed no criminal responsibility. I agree in the orders proposed by Gleeson CJ.

HIGH COURT OF AUSTRALIA NORTH AUSTRALIAN ABORIGINAL JUSTICE AGENCY LIMITED & ANOR PLAINTIFFS AND NORTHERN TERRITORY OF AUSTRALIA DEFENDANT North Australian Aboriginal Justice Agency Limited v Northern Territory [2015] HCA 41 11 November 2015 ORDER The questions asked by the parties in the special case dated 10 June 2015 and referred for consideration by the Full Court be answered as follows: Question 1 Is Division 4AA of Pt VII of the Police Administration Act (NT) (or any part thereof) invalid on the ground that: it purports to confer on the executive of the Northern Territory a power to detain which is penal or punitive in character: it had been passed by which, the Commonwealth Parliament, would be beyond the powers of that Parliament under section 122 of the Constitution, which powers are limited by the separation of powers enshrined in the Constitution; and which is therefore beyond the powers of the Legislative Assembly of the Northern Territory under the Northern Territory (Self-Government) Act 1978 (Cth), which powers are subject to the same limits; and/or it purports to confer on the executive (rather than the courts) of the Northern Territory a power of detention which is penal or punitive in character, thereby undermining or interfering with the institutional integrity of the courts of the Northern Territory in a manner contrary to the Constitution? Answer (a) Division 4AA of Pt VII of the Police Administration Act (NT) does not confer on the executive of the Northern Territory a power to detain which is penal or punitive in character; it is otherwise unnecessary to answer this question. (b) No. Question 2 Who should pay the costs of the Special Case? Answer The plaintiffs. Question 3 What (if any) order should be made to dispose of the proceeding or for the conduct of the balance (if any) of the proceeding? Answer The proceeding should be remitted to a single Justice of this Court for further directions. Representation M K Moshinsky QC with K E Foley and C J Tran for the plaintiffs (instructed by Ashurst Australia) M P Grant QC, Solicitor-General for the Northern Territory with S L Brownhill for the defendant (instructed by Solicitor for the Northern Territory) Interveners J T Gleeson SC, Solicitor-General of the Commonwealth with J S Stellios for the Attorney-General of the Commonwealth, intervening (instructed by Australian Government Solicitor) M G Sexton SC, Solicitor-General for the State of New South Wales with B K Baker for the Attorney-General for the State of New South Wales, intervening (instructed by Crown Solicitor (NSW)) G R Donaldson SC, Solicitor-General for the State of Western Australia with J D Berson for the Attorney-General for the State of Western Australia, intervening (instructed by State Solicitor (WA)) P J Dunning QC, Solicitor-General of the State of Queensland for the Attorney-General of the State of Queensland, intervening (instructed by Crown Solicitor (Qld)) M G Evans QC with D F O'Leary for the Attorney-General for the State of South Australia, intervening (instructed by Crown Solicitor (SA)) H Younan for the Attorney-General for the Australian Capital Territory, intervening (instructed by ACT Government Solicitor) S E Pritchard SC with J E Davidson for the Australian Human Rights Commission, as amicus curiae (instructed by Australian Human Rights Commission) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS North Australian Aboriginal Justice Agency Limited v Northern Territory Statutory interpretation – Div 4AA of Pt VII of Police Administration Act (NT) provides members of Northern Territory Police Force who arrest person without warrant in relation to infringement notice offence can detain person for up to four hours – Whether detention penal or punitive in character – Relevance of principle of legality – Relevance of principle in Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1. Constitutional law (Cth) – Separation of judicial power – Whether Legislative Assembly of Northern Territory subject to constitutional limitations which limit legislative power of Commonwealth Parliament – Interaction between s 122 and Ch III of Commonwealth Constitution. Constitutional law (Cth) – Constitution – Ch III – Principle in Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 – Whether Div 4AA of Pt VII of Police Administration Act (NT) conferred powers on Northern Territory executive which impaired, undermined or detracted from institutional integrity of Northern Territory courts. Words and phrases – "infringement notice offence", "institutional integrity", judicial power", "Kable principle", "penal or punitive", "separation of "supervisory jurisdiction". Constitution, Ch III, s 122. Bail Act (NT), ss 16, 33. Fines and Penalties (Recovery) Act (NT), ss 9, 12B, 13, 21, 22. Police Administration Act (NT), Pt VII, Div 4AA; ss 123, 137, 138. Police Administration Regulations (NT), reg 19A. FRENCH CJ, KIEFEL AND BELL JJ. Introduction The first plaintiff is a corporation which provides legal services to Aboriginal and Torres Strait Islander people in the Northern Territory. The second plaintiff is an Aboriginal person resident in the Territory who was arrested by an officer or officers of the Police Force of the Northern Territory ("the Police Force") in Katherine on 19 March 2015. She was taken into custody purportedly pursuant to s 133AB of the Police Administration Act (NT) ("the PA Act") which appears in Div 4AA of Pt VII of that Act. Section 133AB of the PA Act empowers a member of the Police Force who has arrested a person without a warrant, on the basis of an offence for which an infringement notice can be issued, to hold that person in custody for a period of up to four hours, or longer if the person is intoxicated. The section provides for the person to be released unconditionally, released and issued with an infringement notice, released on bail or brought before a justice or court for the offence for which he or she was arrested or any other offence allegedly committed by the person. The second plaintiff was held in custody for nearly twelve hours from 5.40pm on 19 March 2015 until her release at 5.20am on 20 March 2015. She was issued with an infringement notice bearing an issue date of 19 March 2015. It recorded two alleged offences. One was designated "use obscene/indecent behaviour" contrary to s 53(1)(a) of the Summary Offences Act (NT)1. The other was designated "bring liquor into restricted area" contrary to s 75(1) of the Liquor Act (NT)2. The infringement notice provided for the payment of fines of $144 and $50 respectively for the two offences and a levy of $40 with respect to each offence, making a total of $274. In an amended statement of claim filed in proceedings commenced in this Court on 31 March 2015 by the first plaintiff and joined in by the second plaintiff on 19 May 2015, the plaintiffs allege that Div 4AA of Pt VII of the PA Act is invalid. They contend that it purports to confer on the Executive of the Northern 1 Section 53(1)(a) of the Summary Offences Act (NT) makes it an offence, among other things, for a person to use any profane, indecent or obscene language in a public place, or within the view or hearing of any person passing therein. 2 Section 75(1) of the Liquor Act (NT) makes it an offence, among other things, for a person to bring liquor into a general restricted area. A general restricted area is a specified area of land declared to be a general restricted area under s 74(1)(a). Bell Territory a power to detain which is penal or punitive in character, which, if it had been passed by the Commonwealth Parliament, would be beyond the powers of that Parliament under s 122 of the Constitution, and which is therefore beyond the powers conferred on the Legislative Assembly of the Northern Territory by s 63 of the Northern Territory (Self-Government) Act 1978 (Cth). Division 4AA is also said to confer on the Executive of the Northern Territory a power of detention which undermines or interferes with the institutional integrity of the courts of the Northern Territory in a manner contrary to the Constitution. The second plaintiff also alleges false imprisonment. Declaratory and other relief are sought. A Special Case was referred to the Full Court in the proceedings by Nettle J on 3 June 20154. It poses three questions. The first goes to the issues of validity, the second goes to the costs of the proceedings and the third asks what orders should be made in light of the answers to those questions. For the reasons that follow, the plaintiffs' challenge to the validity of Div 4AA fails and the questions in the Special Case should be answered accordingly. The Special Case questions The Special Case poses the following questions: "Question 1: Is Division 4AA of Part VII of the Police Administration Act (NT) (or any part thereof) invalid on the ground that: it purports to confer on the executive of the Northern Territory a power to detain which is penal or punitive in character: which, if it had been passed by the Commonwealth Parliament, would be beyond the powers of that Parliament under section 122 of the Constitution, which powers are 3 Section 6 provides: "Subject to this Act, the Legislative Assembly has power, with the assent of the Administrator or the Governor-General, as provided by this Act, to make laws for the peace, order and good government of the Territory." [2015] HCATrans 135. Bell limited by the separation of powers enshrined in the Constitution; and which is therefore beyond the powers of the Legislative Assembly of the Northern Territory under the Northern Territory (Self-Government) Act 1978 (Cth), which powers are subject to the same limits; and/or it purports to confer on the executive (rather than the courts) of the Northern Territory a power of detention which is penal or punitive in character, the institutional integrity of the courts of the Northern Territory in a manner contrary to the Constitution? thereby undermining or interfering with Question 2: Who should pay the costs of the Special Case? Question 3: What (if any) order should be made to dispose of the proceeding or for the conduct of the balance (if any) of the proceeding?" The plaintiffs' case The plaintiffs' primary case depended on a number of propositions: The limitation on the legislative power of the Commonwealth imposed by the doctrine of separation of judicial power from legislative and executive powers applies to the Commonwealth Parliament's power to make laws under s 122 of the Constitution for the government of any Territory. That limitation on the legislative power of the Commonwealth under s 122 applies to the legislative power of a Territory legislature conferred by a law of the Commonwealth made under s 122. Division 4AA exceeds the legislative power of the Northern Territory Legislative Assembly because it confers a judicial power on non-judicial officers to detain persons in custody for a punitive purpose. Alternatively, the plaintiffs argued that Div 4AA effectively withholds from the courts of the Territory judicial supervision of the exercise of the detention power. The supervision of executive detention of a subject in custody was said to be a defining characteristic of the Territory courts. The impugned provisions created powers effectively beyond the reach of the courts and on that Bell account were beyond the legislative power of the Territory based on the principles enunciated in Kable v Director of Public Prosecutions (NSW)5 and subsequent decisions of this Court. Before considering the constitutional validity of any statute, it is necessary to consider its construction and operation. Its construction will give effect to the ordinary meaning of its text in the wider statutory context and with reference to the purpose of the provision6. Further, the principle of legality favours a construction, if one be available, which avoids or minimises the statute's encroachment upon fundamental principles, rights and freedoms at common law7. That presumption, which is well established, has been called "a working hypothesis, the existence of which is known both to Parliament and the courts, upon which statutory language will be interpreted"8. It is a presumption whose longstanding rationale is that it is highly improbable that parliament would "overthrow fundamental principles, infringe rights, or depart from the general system of law, without expressing its intention with irresistible clearness"9. Its (1996) 189 CLR 51; [1996] HCA 24. 6 Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 46‒47 [47] per Hayne, Heydon, Crennan and Kiefel JJ; [2009] HCA 41. 7 Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252 at 259 [15] per French CJ, Gummow, Hayne, Crennan and Kiefel JJ; [2010] HCA 23; Lacey v Attorney-General (Qld) (2011) 242 CLR 573 at 591‒592 [43] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ; [2011] HCA 10; Australian Crime Commission v Stoddart (2011) 244 CLR 554 at 622 [182] per Crennan, Kiefel and Bell JJ; [2011] HCA 47; Australian Education Union v General Manager of Fair Work Australia (2012) 246 CLR 117 at 135 [30] per French CJ, Crennan and Kiefel JJ; [2012] HCA 19. 8 Electrolux Home Products Pty Ltd v Australian Workers' Union (2004) 221 CLR 309 at 329 [21] per Gleeson CJ; [2004] HCA 40. See also K-Generation Pty Ltd v Liquor Licensing Court (2009) 237 CLR 501 at 519‒520 [46]‒[47] per French CJ; [2009] HCA 4; Australian Crime Commission v Stoddart (2011) 244 CLR 554 at 622 [182] per Crennan, Kiefel and Bell JJ. 9 Bropho v Western Australia (1990) 171 CLR 1 at 18 per Mason CJ, Deane, Dawson, Toohey, Gaudron and McHugh JJ; [1990] HCA 24, quoting Potter v Minahan (1908) 7 CLR 277 at 304 per O'Connor J; [1908] HCA 63; Coco v The Queen (1994) 179 CLR 427 at 437 per Mason CJ, Brennan, Gaudron and McHugh JJ; [1994] HCA 15; Electrolux Home Products Pty Ltd v Australian Workers' Union (2004) 221 CLR 309 at 329 [21] per Gleeson CJ. Bell object was set out in the joint judgment of Mason CJ, Brennan, Gaudron and McHugh JJ in Coco v The Queen10: "curial insistence on a clear expression of an unmistakable and unambiguous intention to abrogate or curtail a fundamental freedom will enhance the parliamentary process by securing a greater measure of attention to the impact of legislative proposals on fundamental rights." It is a principle of construction which is not to be put to one side as of "little assistance" where the purpose of the relevant statute involves an interference with the liberty of the subject. It is properly applied in such a case to the choice of that construction, if one be reasonably open, which involves the least interference with that liberty. As TRS Allan has written11: "Liberty is not merely what remains when the meaning of statutes and the scope of executive powers have been settled authoritatively by the courts. The traditional civil and political liberties, like liberty of the person and freedom of speech, have independent and intrinsic weight: their importance justifies an interpretation of both common law and statute which serves to protect them from unwise and ill-considered interference or restriction." Part VII of the PA Act — police powers of arrest and apprehension The PA Act established the Police Force, the "core functions" of which include "to uphold the law and maintain social order"12, "to protect life and property"13 and "to prevent, detect, investigate and prosecute offences"14. The Police Force consists of "a Commissioner and other members appointed and holding office under and in accordance with this Act."15 The PA Act is 10 (1994) 179 CLR 427 at 437–438. 11 Allan, "The Common Law as Constitution: Fundamental Rights and First Principles", in Saunders (ed), Courts of Final Jurisdiction: The Mason Court in Australia, (1996) 146 at 148. 12 PA Act, s 5(2)(a). 13 PA Act, s 5(2)(b). 14 PA Act, s 5(2)(c). 15 PA Act, s 6. Bell concerned with, among other things, the Police Force and its administration, and the powers and duties of members of the Police Force. Part VII of the PA Act is entitled "Police powers". It includes Div 3 entitled "Arrest" and Div 4 entitled "Apprehension without arrest"16. Division 4AA of Pt VII is entitled "Taking person into custody for infringement notice offence". Division 4A relates to the power of a police officer to issue and serve a person with a notice to appear before the Court of Summary Jurisdiction. Division 6 deals with the bringing of detained persons before a justice of the peace or court and obtaining evidence after taking them into custody. Section 121, which appears in Div 3, provides for the issue of arrest warrants by justices of the peace upon information on oath, supported by an affidavit, showing reasonable grounds for believing that the person the subject of the proposed warrant has committed an offence17. The justice must be satisfied that there are reasonable grounds for issuing the warrant18. Section 123, which also appears in Div 3, provides for arrest without warrant. It is the section under which the second plaintiff was arrested. It provides: "A member of the Police Force may, without warrant, arrest and take into custody any person where he believes on reasonable grounds that the person has committed, is committing or is about to commit an offence." It involves the exercise of two powers — arrest and taking into custody. The combination of those powers has a long history in the Northern Territory19. 16 Section 128 in Div 4 of Pt VII of the PA Act provides for apprehension of an intoxicated person and taking him or her into custody but, by operation of s 129, "only for so long as it reasonably appears ... that the person remains intoxicated." The apprehension is not an arrest. 17 PA Act, s 121(1) and (3). 18 PA Act, s 121(3). 19 Before the PA Act, s 27(1)(e) in Pt IV of the Police and Police Offences Ordinance 1923 (NT) provided that a police officer "without any warrant other than this Ordinance ... may apprehend ... any person whom he has just cause to suspect of having committed, or being about to commit, any felony, misdemeanour or offence". Part IV was repealed by the Summary Offences Act 1978 (NT), which commenced operation on the same date as the PA Act in 1979. In its original form, (Footnote continues on next page) Bell Division 4AA — custody for an infringement notice offence Division 4AA applies to a subset of the cases in which a person has been arrested without warrant under s 123. They are cases in which the person has been arrested in relation to the commission or apprehended commission of an infringement notice offence. The operative provision of Div 4AA, s 133AB, confers a power upon an officer to take a person arrested in relation to an infringement notice offence into custody and to hold him or her for up to four hours, or longer if he or she is intoxicated. That power is enlivened at the point of arrest under s 123. It is not necessary for the operation of s 133AB to treat the reference to taking a person into custody in that provision as creating a power distinct from that under s 123. The distinct power created by s 133AB is to hold the person arrested and taken into custody with the option of release with an infringement notice. Section 133AB provides: "(1) This section applies if: a member of the Police Force has arrested a person without a warrant under section 123; and the person was arrested because the member believed on reasonable grounds that the person had committed, was committing or was about to commit, an offence that is an infringement notice offence. The member may take the person into custody and: hold the person for a period up to 4 hours; or if the person is intoxicated — hold the person for a period longer than 4 hours until the member believes on reasonable grounds that the person is no longer intoxicated. The member, or any other member, on the expiry of the period mentioned in subsection (2), may: s 123(1) of the PA Act authorised arrest without warrant. Section 123(2) provided that a police officer could detain a person to ensure the person's appearance before a court; to prevent a continuation or repetition of the offence; or to prevent loss or destruction of evidence relating to the offence. Section 123(2) was repealed (by the Police Administration Amendment Act (No 2) 1992 (NT)) because the objectives of s 123(2) were achieved by s 137(2): see Northern Territory, Legislative Assembly, Parliamentary Debates (Hansard), 4 March 1992 at 4268. Bell release the person unconditionally; or release the person and issue the person with an infringement notice in relation to the infringement notice offence; or release the person on bail; or under section 137, bring the person before a justice or court for the infringement notice offence or another offence allegedly committed by the person. For deciding how to deal with the person under subsection (3), the member, or another member, may question the person about the infringement notice offence, or any other offence in relation to which the person is of interest to police." The term "infringement notice offence" is defined in s 133AA as "an offence under another Act for which an infringement notice may be served and which is prescribed for this Division by regulation." The term "infringement notice" is not defined in the PA Act. Its meaning appears from s 9 of the Fines and Penalties (Recovery) Act (NT): "An infringement notice is a notice issued under a law of the Territory to the effect that the person to whom it is directed has committed a specified offence and that the person may expiate the offence by paying the penalty specified in the notice in the manner and within the time specified." Infringement notice offences are prescribed by reg 19A of the Police Administration Regulations (NT). They cover a wide class of offences, most of which are relatively minor. A substantial number of them do not carry any custodial penalty20. There are some, however, which provide for a monetary penalty and/or a custodial term to be imposed21. A number of the offences prescribed could, according to the circumstances, involve elements of disorderly conduct. However, they also include the offence of failing to keep a clean yard 20 There are 25 offences in that category according to a table contained in the Special Case. 21 For example, offensive conduct under s 47 of the Summary Offences Act (NT) and obscenity under s 53(1)(a) of the Summary Offences Act (NT). Bell so as to create a nuisance by an offensive smell or otherwise22 and failing to comply with liquor licence conditions23. Section 133AC requires that a member of the Police Force establish the identity of a person taken into custody under s 133AB, by taking and recording the person's name and further information relevant to identification including photographs, fingerprints and other biometric identifiers24. The person may also be searched and money, valuables or items that are likely or could be used to cause harm to the person or another person removed from the person for safekeeping25. Such force as is "reasonably necessary" to exercise a power under s 133AC may be used26. The infringement notice process The effect of an infringement notice is set out in the Fines and Penalties (Recovery) Act. If the penalty specified in the notice is paid within the period specified or within the further time allowed by an enforcement agency under s 12B, the alleged offence is expiated and no further proceedings can be taken in relation to it unless the notice is withdrawn in accordance with the law under which the notice was issued27. A person may elect, under s 21 of the Act, to be dealt with by a court. In that event, proceedings in respect of the alleged offence may be taken as if an infringement notice had not been issued28. Regulation 6 of the Summary Offences Regulations (NT) makes similar provision for infringement notice offences under the Summary Offences Act. 22 Summary Offences Act (NT), s 78. 23 Liquor Act (NT), s 31A(5). 24 PA Act, s 133AC(1). 25 PA Act, s 133AC(2). 26 PA Act, s 133AC(7). 27 Fines and Penalties (Recovery) Act (NT), s 13. Section 14 provides that if the penalty is not paid within the period specified or allowed, enforcement action may be taken under the Act unless the notice is withdrawn. 28 Fines and Penalties (Recovery) Act (NT), s 22(1). Bell Court, bail or release — ss 123 and 137 Before considering the operation of Div 4AA, it is necessary to set out the relevant obligations imposed upon a police officer arresting a person without warrant under s 123 and taking the person into custody under that section. The taking of a person into custody under s 123 immediately engages the obligation imposed by s 137(1), which appears in Div 6, and provides: limiting the operation of section 123, but subject "Without subsections (2) and (3) of this section, a person taken into lawful custody under this or any other Act shall (subject to that Act where taken into custody under another Act) be brought before a justice or a court of competent jurisdiction as soon as is practicable after being taken into custody, unless he or she is sooner granted bail under the Bail Act or is released from custody." The effect of s 137(1) of the PA Act is that a person arrested and taken into custody under s 123 must "as soon as is practicable": be released; or be brought before a justice or a court30. 29 Release on bail may be effected by an authorised police officer pursuant to s 16 of the Bail Act (NT). Under s 33, a refusal is reviewable by a magistrate or justice as is a failure to determine whether or not to grant bail within four hours after the person is charged. 30 The legislative history discloses that, before the PA Act, s 34 of the Police and Police Offences Ordinance 1923 (NT) provided that any person apprehended without a warrant was to be secured until he or she was granted bail or could be brought before a justice to be dealt with according to law. Section 136 of the PA Act required a police officer to bring a person arrested and charged for an offence before a justice or to take steps to initiate the bail application process. Section 136 was repealed by the Police Administration Amendment Act 1982 (NT) to coincide with the commencement of the Bail Act 1982 (NT), which provided a comparable provision in s 16. Section 137(1) and (2) were introduced by the Police Administration Amendment Act 1988 (NT) in response to this Court's decision in Williams v The Queen (1986) 161 CLR 278; [1986] HCA 88. Cognate amendments were also made to s 16 of the Bail Act by the Bail Amendment Act (Footnote continues on next page) Bell The period of custody limited by the requirement to bring the person before a justice of the peace or a court "as soon as is practicable after being taken into custody" may be extended, pursuant to s 137(2) and (3), to "a reasonable period" for questioning or to enable further investigations in relation to offences attracting a term of imprisonment. The factors relevant to determining a reasonable period of custody for those purposes are set out in s 138. They are practical matters including the time taken for various arrangements to be made for investigators to attend31, available witnesses to be interviewed32, legal advisors to be contacted33, and forensic investigations to be completed34. The statutory requirement to bring a person arrested before a justice of the peace or a court, as soon as is practicable, has its origins in the common law. The common law does not authorise the arrest of a person or holding an arrested person in custody for the purpose of questioning or further investigation of an offence35. A person can be deprived of personal liberty only to the extent and for the time which the law prescribes36. It is an obvious application of the principle of legality that clear words are required if a statute is to authorise holding an arrested person in custody for a purpose other than for the purpose of charging that person and bringing him or her before a justice of the peace or court as soon as is practicable if he or she is not earlier released on bail or unconditionally. In Williams v The Queen, Wilson and Dawson JJ construing the words "as soon as is practicable" in s 34A(1) of the Justices Act 1959 (Tas) said37: "Those words must be given a construction which, so far as is possible, is in accordance with the common law ... The common law requires an 1988 (NT): see Northern Territory, Legislative Assembly, Parliamentary Debates (Hansard), 16 September 1987 at 1228‒1230. 31 PA Act, s 138(a). 32 PA Act, s 138(c). 33 PA Act, s 138(h). 34 PA Act, s 138(k). 35 Williams v The Queen (1986) 161 CLR 278 at 292‒294 per Mason and Brennan JJ, 305‒306 per Wilson and Dawson JJ. 36 (1986) 161 CLR 278 at 292 per Mason and Brennan JJ. 37 (1986) 161 CLR 278 at 313. Bell arrested person to be taken before a justice as soon as is reasonably possible and the words 'as soon as is practicable' should be taken to mean the same thing." Absent s 137, the common law would have imposed the like requirement that a person arrested under s 123 be taken before a justice of the peace as soon as practicable after arrest. At common law delay, even if for some purpose such as questioning or to dispel or confirm the suspicion which was the basis of the arrest, would defeat the true purpose of arrest38. Custody after arrest is an executive measure not an exercise of judicial power. As Wilson and Dawson JJ also observed in Williams39: "The point at which an arrested person is brought before a justice upon a charge is the point at which the machinery of the law leading to trial is put into operation. It is the point from which the judicial process commences and purely ministerial functions cease." The common law was modified by s 137(2) and (3) to enable post-arrest custody to be extended to "a reasonable period" for the purpose of questioning the person arrested or for further investigations in relation to offences attracting custodial penalties40. in all Australian jurisdictions41. That modification reflected recommendations made by the Australian Law Reform Commission ("the Commission") in its interim report entitled Criminal Investigation published in 1975. Similar modifications have been made 38 (1986) 161 CLR 278 at 306 per Wilson and Dawson JJ. 39 (1986) 161 CLR 278 at 306. 40 Section 137(3) was introduced by the Police Administration Amendment Act (No 2) 1992 (NT). The Second Reading Speech outlined the amendment in that Act resulted from, among other things, the Police Powers Review Committee's "consideration of ... the investigative detention power" under s 137(2): see Northern Territory, Legislative Assembly, Parliamentary Debates (Hansard), 4 March 1992 at 4268. 41 Crimes Act 1914 (Cth), ss 23C‒23DA; Law Enforcement (Powers and Responsibilities) Act 2002 (NSW), ss 114‒121; Police Powers and Responsibilities Act 2000 (Q), ss 403‒411; Summary Offences Act 1953 (SA), s 78; Criminal Law (Detention and Interrogation) Act 1995 (Tas), s 4; Crimes Act 1958 (Vic), ss 464A‒464B; Criminal Investigation Act 2006 (WA), ss 140‒142; Crimes Act 1900 (ACT), s 212. Bell The Commission's report in relation to post-arrest custody included a recommendation that its permissible duration be precisely specified in legislation with a statutory maximum of four hours. It was proposed that the limit be capable of extension up to another eight hours following application to a magistrate with further extensions obtainable from a Federal, Territory or State Supreme Court Judge42. The Commission also recommended that the four hour period be regarded as the maximum rather than the norm. The primary statutory requirement should be to take a person before a justice or a magistrate, to make a police bail decision or to release him or her "as soon as reasonably practicable" after the custody began43. Sections 133AB and 137 The plaintiffs and the Northern Territory differed about the interaction between s 133AB and s 137. The Northern Territory maintained that s 137 applied to persons arrested under s 123 and taken into custody under s 133AB. It characterised s 137 as imposing an overarching requirement — to bring a person before a justice or a court unless otherwise bailed or released — and characterised that requirement as one which constrained and defined the purpose of the detention. That submission was reinforced by a reference to s 106 of the Criminal Code (NT) which creates an offence of delaying the bringing of a person arrested before the courts. The plaintiffs submitted that the Northern Territory's construction should be rejected as it would require the Court to disregard the clear words and statutory purpose of Div 4AA. Moreover, s 137 is expressed to be subject to the provisions of any other Act for taking a person into custody. They pointed to the specific requirement in s 133AB(3)(d) to bring a person before a justice or court under s 137 as an option available to a member of the Police Force at the expiry of the period of detention. The debate between the plaintiffs and the Northern Territory on this question was a rather arid one. Even if s 137(1) did not apply, the common law obligations, which operate in the absence of clear words to the contrary, would require the police officer taking a person into custody under s 133AB to bring that person before a justice of the peace or a court as soon as practicable. That obligation would not be engaged if the person were released unconditionally or 42 Australia, Law Reform Commission, Criminal Investigation, Report No 2, Interim, 43 Australia, Law Reform Commission, Criminal Investigation, Report No 2, Interim, Bell on bail or released and issued with an infringement notice. As a matter of textual analysis of s 133AB, the obligation imposed by the common law and given a statutory form by s 137(1) was not modified by the four hour time limit. That time limit does no more than impose a cap on what is a reasonably practicable time to make a determination about which one of the options under s 133AB(3) is to be exercised. The time limit also constrains the exercise of the questioning power under s 133AB(4) which displaces the questioning power applicable under s 137(2) read with s 138 in the case of taking a person into custody otherwise than pursuant to Div 4AA. So understood the construction of Div 4AA accords with the approach adopted by the Commission that the four hour period which it recommended should be regarded as a maximum rather than the norm. Against that background it is necessary to consider the purpose of Div 4AA in order to determine the character of the custody which it authorises. Division 4AA — purpose Division 4AA was the Police Administration Amendment Act 2014 (NT). Its function, as described by the Attorney-General and Minister for Justice of the Northern Territory in the Second Reading Speech for the Bill, was44: the PA Act by introduced into "to provide members of the Northern Territory Police Force with an alternative post-arrest option, where a person who has committed certain prescribed offences may be held by police for up to four hours and can then be released with an infringement notice, as opposed to requiring that the person be charged and have those charges be heard by a court." The Attorney-General and Minister for Justice referred to the concept as "paperless arrest". Its purpose was to provide further flexibility and efficiency in policing work. It would enable police officers to return to their patrol in a more timely fashion, as opposed to being detained for long periods providing necessary paperwork for a court to consider the charges. Just how it would have that effect was not spelt out. On its face there was nothing in the PA Act before the enactment of Div 4AA to prevent a person arrested and taken into custody under s 123 from being released unconditionally, an option contemplated by s 137(1), and issued with an infringement notice pursuant to the Fines and Penalties (Recovery) Act. Nevertheless, the Solicitor-General for the Northern 44 Northern Territory, Legislative Assembly, Parliamentary Debates — Police Administration Amendment Bill (Serial 98) — presentation and second reading motion (Hansard), 12th Assembly, Parliamentary Record No 15, 22 October 2014. Bell Territory submitted that, prior to the amendment, it was unclear whether a person arrested and detained under s 123 could be released and issued with an infringement notice rather than being charged and brought before a court. That concern may illuminate the use of the term "paperless arrest" in the Second Reading Speech. The Attorney-General and Minister for Justice in his Second Reading Speech also made reference to a social control objective, which he described as45: "An additional benefit to the community is intended by the use of such an option to de-escalate social disorder situations or potential situations of public disorder before they escalate into major incidents." The Northern Territory submitted in this Court that the purpose of custody following arrest was unchanged by Div 4AA. It was to ensure that persons accused of offending are dealt with by the courts, albeit if an infringement notice was issued such a person had the option of expiating the offence by payment of a fine. The period of custody provided for by s 133AB(2) was prescribed for the purpose of enabling police officers to decide how to deal with persons taken into custody under s 133AB. To that end, s 133AB(4) conferred a power to question the person arrested about the offence for which he or she was arrested or any other offence in relation to which the person was of interest to the police. The plaintiffs characterised the custodial period authorised by s 133AB as a "superadded four hour period of detention". All the other options of dealing with a person taken into custody under s 123 remained in place46. The only purpose served by the "superadded four hour period of detention" was to postpone a dispositive decision. Where an infringement notice issued at the end of that period the effect of the detention was little short of double punishment. The plaintiffs' submissions, however, relied upon the premise that s 133AB authorised any person taken into custody for an infringement notice offence to be detained for four hours. Section 133AB properly construed, by reference to its purpose, does not have that effect. 45 Northern Territory, Legislative Assembly, Parliamentary Debates — Police Administration Amendment Bill (Serial 98) — presentation and second reading motion (Hansard), 12th Assembly, Parliamentary Record No 15, 22 October 2014. 46 Those options were release; grant of bail; issuing a notice to appear and/or infringement notice; or bringing the person before a justice or court under s 137. Bell The construction of s 133AB Section 133AB confers a discretionary power exercisable, when a person has been arrested without warrant under s 123, if, and only if, the arrest relates to an infringement notice offence committed, being committed, or about to be committed. Arrest relating to an infringement notice offence does not mean that the person taken into custody can be held for up to four hours at the unfettered discretion of a police officer. As a general proposition there is no such thing as an unfettered statutory power. As Kirby and Callinan JJ said: "No Parliament of Australia could confer absolute power on anyone."47 Every statutory power, however widely expressed, is confined by the subject matter, scope and purpose of the statute48. An official who lawfully takes a person into custody cannot continue to hold that person in custody other than for a purpose authorised by the statute conferring the power. The Northern Territory submitted that the circumstances in which Div 4AA operates are confined to those in which arrest is appropriate, having regard to the need to: ensure the person is available to be dealt with in respect of an offence if considered appropriate; preserve public order; prevent the completion, continuation or repetition of the offence or the commission of another offence; 47 Gerlach v Clifton Bricks Pty Ltd (2002) 209 CLR 478 at 504 [70]; [2002] HCA 22. See also R v Secretary of State for the Environment, Transport and the Regions, Ex parte Spath Holme Ltd [2001] 2 AC 349 at 381 per Lord Bingham, 396 per Lord Nicholls, 404 per Lord Hope, 412 per Lord Hutton; R (GC) v Commissioner of Police of the Metropolis [2011] 1 WLR 1230 at 1260 [107] per Lord Rodger; [2011] 3 All ER 859 at 891. 48 Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492 at 496 per Latham CJ, 505 per Dixon J; [1947] HCA 21; R v Australian Broadcasting Tribunal; Ex parte 2HD Pty Ltd (1979) 144 CLR 45 at 49; [1979] HCA 62; FAI Insurances Ltd v Winneke (1982) 151 CLR 342 at 368 per Mason J; [1982] HCA 26; Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 40 per Mason J; [1986] HCA 40; O'Sullivan v Farrer (1989) 168 CLR 210 at 216 per Mason CJ, Brennan, Dawson and Gaudron JJ; [1989] HCA 61; Oshlack v Richmond River Council (1998) 193 CLR 72 at 81 [22], 84 [31] per Gaudron and Gummow JJ; [1998] HCA 11. Bell prevent the concealment, loss or destruction of evidence relating to the offence; prevent the harassment of, or interference with, persons in the vicinity; prevent the fabrication of evidence in respect of the offence; and/or preserve the safety or welfare of the public or the person detained. Those constraints were relied upon to support the contention that detention for the purposes of Div 4AA for a period of up to four hours, or until a person ceased to be intoxicated, was not detention for a penal or punitive purpose. It may be accepted that Div 4AA is confined by those purposes although the applicability of (d) and (f) in the context of infringement notice offences may be questionable. Thus confined in its operation, Div 4AA does not disclose a punitive purpose. To keep a person in custody under Div 4AA in order to punish that person's conduct would be unlawful. An example which demonstrates the point is the arrest under s 123 of a person because an officer believed on reasonable grounds that the person was about to commit an infringement notice offence. Assuming the person not to be intoxicated and no question of any other offences attracting the application of the questioning power under s 133AB(4), it is difficult to see what lawful purpose would be served in detaining that person under Div 4AA for more than the very short time necessary to prevent him or her from committing the offence and to establish his or her identity as required by s 133AC. Assuming no other offence had been committed requiring questioning or investigation, there would be no question of charging or bail or bringing the person before a court. The only option would be unconditional release. No infringement notice could issue in such a case. That application of Div 4AA militates against any suggestion that it authorises an officer to keep a person in custody for four hours regardless of the circumstances. The basis upon which detention may be considered as punitive was considered by this Court in Chu Kheng Lim v Minister for Immigration49. That consideration was linked to the question whether involuntary detention of any person arriving in Australia without a valid entry permit was punitive and involved the impermissible exercise of the judicial power of the Commonwealth by executive officers of the Immigration Department. In holding that it was not, Brennan, Deane and Dawson JJ acknowledged the general proposition that involuntary detention of a person in custody by the State is penal or punitive in character and exists only as an incident of the exclusively judicial function of 49 (1992) 176 CLR 1; [1992] HCA 64. Bell adjudging and punishing criminal guilt50. Their Honours, however, identified as the most important exception to that general proposition, the arrest and detention in custody of a person accused of a crime to ensure that he or she would be available to be dealt with by the courts. Their Honours said51: "Such committal to custody awaiting trial is not seen by the law as punitive or as appertaining exclusively to judicial power." The Northern Territory's submission and characterisation should be accepted but with a caveat. If the maximum period for which a person could be held in detention in respect of an infringement notice offence were significantly greater than that specified under s 133AB, then a question might arise as to whether such an extended detention could be justified under any circumstances by reference to purposes of the kind relied upon by the Northern Territory and whether, beyond a certain point, it could still be characterised as administrative rather than punitive. A law authorising the punitive detention by police officers of persons arrested would raise for consideration the plaintiffs' contention that the doctrine of separation of powers, which limits Commonwealth legislative power, applies in the Territory. That question was the subject of submissions to this Court on the premise that Div 4AA authorises punitive detention and thereby purports to confer judicial power on officers of the Police Force. The premise not being established, the question does not arise for determination in this case. The Kable doctrine The plaintiffs submitted that Div 4AA impaired the institutional integrity of the Northern Territory courts contrary to principles laid down in this Court by Kable and cases flowing from it. Those decisions have established propositions including the following: A State legislature cannot confer upon a State court a function or power which substantially impairs its institutional integrity, and which is therefore incompatible with its role, under Ch III of the Constitution, as a repository of federal jurisdiction and as a part of the integrated Australian court system52. 50 (1992) 176 CLR 1 at 27. 51 (1992) 176 CLR 1 at 28. 52 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 96 per Toohey J, 103 per Gaudron J, 116‒119 per McHugh J, 127‒128 per Gummow J; Baker v The Queen (2004) 223 CLR 513 at 519 [5] per Gleeson CJ; [2004] (Footnote continues on next page) Bell The term "institutional integrity" applied to a court refers to its possession of the defining or essential characteristics of a court including the reality and appearance of its independence and its impartiality53. It is also a defining characteristic of courts that they apply procedural fairness54 and adhere as a general rule to the open court principle55 and give reasons for their decisions56. A State legislature cannot, consistently with Ch III, enact a law which purports to abolish the Supreme Court of the State57 or excludes any class HCA 45; Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 591 [15] per Gleeson CJ; [2004] HCA 46; Wainohu v New South Wales (2011) 243 CLR 181 at 208 [44] per French CJ and Kiefel J; [2011] HCA 24; Attorney-General (NT) v Emmerson (2014) 253 CLR 393 at 424 [40] per French CJ, Hayne, Crennan, Kiefel, Bell and Keane JJ; [2014] HCA 13; Kuczborski v Queensland (2014) 89 ALJR 59 at 87‒88 [139] per Crennan, Kiefel, Gageler and Keane JJ; 314 ALR 528 at 562‒563; [2014] HCA 46; Duncan v Independent Commission Against Corruption (2015) 89 ALJR 835 at 840 [16] per French CJ, Kiefel, Bell and Keane JJ; 324 ALR 1 at 6‒7; [2015] HCA 32. 53 Forge v Australian Securities and Investments Commission (2006) 228 CLR 45 at 76 [63]‒[64] per Gummow, Hayne and Crennan JJ; [2006] HCA 44; Wainohu v New South Wales (2011) 243 CLR 181 at 208 [44] per French CJ and Kiefel J. 54 Leeth v The Commonwealth (1992) 174 CLR 455 at 469‒470 per Mason CJ, Dawson and McHugh JJ; [1992] HCA 29; International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319 at 354‒355 [55] per French CJ, 379‒380 [141] per Heydon J; [2009] HCA 49; Wainohu v New South Wales (2011) 243 CLR 181 at 208 [44] per French CJ and Kiefel J; Condon v Pompano Pty Ltd (2013) 252 CLR 38 at 71 [67] per French CJ, 105 [177], 110 [194] per Gageler J; [2013] HCA 7. 55 Dickason v Dickason (1913) 17 CLR 50; [1913] HCA 77; Russell v Russell (1976) 134 CLR 495 at 520 per Gibbs J; [1976] HCA 23; Wainohu v New South Wales (2011) 243 CLR 181 at 208‒209 [44] per French CJ and Kiefel J. 56 Wainohu v New South Wales (2011) 243 CLR 181. 57 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 103 per Gaudron J, 111 per McHugh J, 139 per Gummow J; K-Generation Pty Ltd v Liquor Licensing Court (2009) 237 CLR 501 at 543‒544 [151]‒[153] per Gummow, Hayne, Heydon, Crennan and Kiefel JJ; Wainohu v New South Wales (2011) 243 CLR 181 at 210 [46] per French CJ and Kiefel J. Bell of official decision, made under a law of the State, from judicial review for jurisdictional error by the Supreme Court of the State58. Nor can a State legislature validly enact a law which would effect an impermissible executive intrusion into the processes or decisions of a court59. A State legislature cannot authorise the executive to enlist a court to implement decisions of the executive in a manner incompatible with the court's institutional integrity60 or which would confer on the court a function (judicial or otherwise) incompatible with the role of the court as a repository of federal jurisdiction61. A State legislature cannot enact a law conferring upon a judge of a State court a non-judicial function which is substantially incompatible with the functions of the court of which the judge is a member62. It has not been established, and the plaintiffs did not argue, that public confidence in the courts is a touchstone of invalidity. In Momcilovic v The Queen63, Gummow J said that attention to matters of perception and public confidence as distinct and separate sufficient considerations is apt to mislead. There are statements in Kable indicating that the jurisdiction conferred on State 58 Kirk v Industrial Court (NSW) (2010) 239 CLR 531; [2010] HCA 1; Wainohu v New South Wales (2011) 243 CLR 181 at 210 [46] per French CJ and Kiefel J. 59 International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319; Wainohu v New South Wales (2011) 243 CLR 181 at 210 [46] per French CJ and Kiefel J. 60 South Australia v Totani (2010) 242 CLR 1 at 52 [82] per French CJ, 67 [149] per Gummow J, 160 [436] per Crennan and Bell JJ, 173 [481] per Kiefel J; see also at 92‒93 [236] per Hayne J; [2010] HCA 39; Wainohu v New South Wales (2011) 243 CLR 181 at 210 [46] per French CJ and Kiefel J. 61 Wainohu v New South Wales (2011) 243 CLR 181 at 210 [46] per French CJ and 62 Wainohu v New South Wales (2011) 243 CLR 181 at 210 [47] per French CJ and 63 (2011) 245 CLR 1 at 93 [175]; [2011] HCA 34. Bell courts must not damage public confidence in them64, but it has been said on many occasions since Kable that public confidence is an indicator, but not the touchstone of invalidity; the touchstone of invalidity concerns institutional integrity65. That touchstone extends to maintaining the appearance as well as the realities of impartiality and independence of the courts from the executive. Those criteria may be seen as necessary to the maintenance of public confidence in the judicial system. That is not the same as saying that it is necessary or appropriate to use an imputed effect upon "public confidence" to infer that a law impairs the institutional integrity of a court. Courts of the Northern Territory may exercise the judicial power of the Commonwealth in the exercise of jurisdiction conferred upon them by laws made by the Commonwealth Parliament. It follows that Kable applies to the Supreme Court of the Territory and to Territory courts as Ch III courts66. However, the plaintiffs' contentions did not fall within any of the existing principles developed from that decision and its sequelae. The plaintiffs' complaint did not concern a function or power conferred upon courts of the Territory. Nor did it concern a function or power conferred upon judicial officers of the Territory. Rather they submitted that Div 4AA effects a kind of de facto preclusion of the traditional judicial supervisory function in relation to persons held in involuntary detention. The plaintiffs submitted: There is no real possibility of a person detained under Div 4AA approaching a court during the period of the detention. Even if a person detained under Div 4AA were able to make an application to a court, the court would be limited to reviewing the legislative criteria for the detention and thus could not take into account factors it would ordinarily consider when a person detained in custody and not convicted of any crime is brought before it. 64 See (1996) 189 CLR 51 at 108 per Gaudron J, 118–119 per McHugh J, 133 per 65 See, for example, Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 618 [102] per Gummow J; South Australia v Totani (2010) 242 CLR 1 at 82 [206] per 66 Attorney-General (NT) v Emmerson (2014) 253 CLR 393 at 425 [42] per French CJ, Hayne, Crennan, Kiefel, Bell and Keane JJ and authorities cited therein. Bell Division 4AA was said to "eviscerate" the court's supervisory power in relation to detention. The plaintiffs' submissions anticipated an argument that a person detained unlawfully pursuant to Div 4AA could bring an action for false imprisonment. That was characterised as a "frail reed" for vindicating the liberty interests of citizens detained under Div 4AA. The plaintiffs' submissions in relation to the application of the Kable doctrine were elusive. They seemed to proceed on the premise that Div 4AA did not impose any duty to bring a person arrested before a justice of the peace or a court as soon as practicable after arrest if the person was not earlier released unconditionally or on bail or with an infringement notice. But, for the reasons already given, the relationship between the custodial process and the judicial process under Div 4AA is not materially different from the relationship between the custodial process and the judicial process in relation to an arrest and taking into custody under s 123. It might be possible to envisage a scheme in which power was conferred on the executive in such a way as effectively to deprive the courts of supervision of its exercise. Such a scheme might on established principles, or some extension thereof, be impermissible. But that is not this case. The plaintiffs' argument based on the Kable doctrine must fail. It may be observed that in their submissions in support of the Northern Territory, the Solicitors-General for New South Wales and Queensland accepted the proposition that given their view of the Kable and Kirk67 principles there would be nothing to prevent a State parliament from investing a police officer with investigative, prosecutorial and punitive functions. Whether such a thing could be done by a State parliament does not fall for determination here. If such a law were enacted in the Northern Territory the question might arise as to whether the conferring on a police officer of a combination of prosecutorial and judicial powers would offend against fundamental common law principles to such an extent that the grant of legislative power to the Northern Territory should not, in the absence of clear words, be construed as extending that far. Given the non-punitive character of the custody which is authorised by s 133AB that question does not arise. Conclusion For the preceding reasons, the questions in the Special Case should be answered as follows: 67 Kirk v Industrial Court (NSW) (2010) 239 CLR 531. Bell Question 1: Division 4AA of Pt VII of the Police Administration Act (NT) does not confer on the executive of the Northern Territory a power to detain which is penal or punitive in character; it is otherwise unnecessary to answer this question. Question 2: The plaintiffs. Question 3: The proceeding should be remitted to a single Justice of this Court for further directions. Introduction This special case, in a proceeding in the original jurisdiction of the High Court, raises questions about the constitutional validity of Div 4AA of Pt VII of the Police Administration Act (NT), enacted by the Northern Territory Legislative Assembly in 201468. The Division was explained in the course of its enactment as implementing the "concept of paperless arrests", the underlying policy being "to permit police officers to detain individuals for up to four hours in relation to public order-type offences"69. Division 4AA authorises a member of the Police Force of the Northern Territory to detain a person whom the member has arrested without warrant on the basis that the member believed that the person had committed, was committing or was about to commit a prescribed offence for which the person might be issued with an infringement notice requiring payment of a specified amount in order to expiate the offence. The authority given to the member is to detain the person, for up to four hours, or for longer if the person is intoxicated. The first plaintiff, North Australian Aboriginal Justice Agency Ltd, provides legal services to Aboriginal and Torres Strait Islander people in the Northern Territory. The special case contains agreed facts which demonstrate that the vast majority of those detained under Div 4AA in the first quarter of 2015 were Aboriginal or Torres Strait Islander people. The second plaintiff, Ms Bowden, is an Aboriginal person who is resident in the Northern Territory. She was arrested without warrant by a member or members of the Police Force at Katherine, following which she was detained under Div 4AA at the Katherine Police Station from approximately 5.40pm on 19 March 2015 until she was released at 5.20am on 20 March 2015. On release, she was issued with an infringement notice requiring her to pay a total amount of $274.00 in order to expiate offences specified in the notice as using obscene language and indecent behaviour70 and bringing liquor into a restricted area71. 68 Police Administration Amendment Act 2014 (NT). 69 Northern Territory, Legislative Assembly, Parliamentary Debates (Hansard), 22 October 2014. 70 Section 53(1)(a) of the Summary Offences Act (NT). 71 Section 75(1) of the Liquor Act (NT). Both plaintiffs seek against the Northern Territory of Australia, as defendant, a declaration to the effect that Div 4AA is invalid. The second plaintiff also claims damages for wrongful imprisonment. The defendant takes no issue as to the standing of either plaintiff. The pleadings have closed, but the facts relevant to the wrongful imprisonment claim have not been found and are not fully agreed. The special case raises questions which are agreed by the parties to arise from the relief sought by the plaintiffs. The two substantive questions ask whether Div 4AA is invalid either because it infringes the doctrine of separation of powers enshrined in Ch III of the Constitution or because it impairs the institutional integrity of courts capable of being invested with the judicial power of the Commonwealth. Underlying both questions is an anterior question as to whether the detention authorised by Div 4AA is penal or punitive in character. Informing the answer to that question of characterisation is a threshold question of construction to which it will be necessary immediately to turn after setting out the critical provisions of Div 4AA and locating Div 4AA within its broader legislative context. Legislation Within Div 4AA of Pt VII of the Police Administration Act, the critical operative provision is s 133AB, the first sub-section of which provides: "(1) This section applies if: a member of the Police Force has arrested a person without a warrant under section 123; and the person was arrested because the member believed on reasonable grounds that the person had committed, was committing or was about to commit, an offence that is an infringement notice offence." There are thus two conditions for the application of the section. The first condition is that a member of the Police Force has arrested a person without a warrant under s 123. Section 123 provides: "A member of the Police Force may, without warrant, arrest and take into custody any person where he believes on reasonable grounds that the person has committed, is committing or is about to commit an offence." The second condition is that the person was arrested because the member believed on reasonable grounds that the person had committed, was committing or was about to commit an offence that is an "infringement notice offence". That expression is defined for the purpose of Div 4AA to mean an offence under another Northern Territory Act "for which an infringement notice may be served and which is prescribed for [Div 4AA] by regulation"72. The definition is framed to pick up provisions of other Northern Territory legislation allowing for the service of infringement notices. An infringement notice is a notice to the effect that the person to whom the notice is directed has committed a specified offence and that the person may expiate the offence by paying the penalty specified in the notice. The person served with the notice can elect to pay the penalty within a specified time, in which case the offence is automatically expiated by the payment. Alternatively, the person can elect to have the matter dealt with by a court, in which case proceedings may be taken against the person in respect of the alleged offence as if the infringement notice had not been issued73. Offences for which infringement notices may be served and which have been prescribed for Div 4AA by regulation, so as to fall within the definition of an "infringement notice offence", comprise specified offences for which a member of the Police Force is able to serve an infringement notice under the Summary Offences Act, the Liquor Act and the Misuse of Drugs Act (NT)74. The total number of prescribed offences is 35. They range in seriousness from playing a musical instrument so as to annoy75 or failing to keep a clean yard76, to cultivating a prohibited plant77 or possessing a dangerous drug78. The penalties for many of those infringement notice offences, if dealt with by a court, are limited to fines. The penalties for others, including the two offences specified in the notice issued to the second plaintiff, extend to imprisonment for a maximum of six months. For the two most serious infringement notice offences, both under the Misuse of Drugs Act, the penalty extends to imprisonment for a maximum of two years. 72 Section 133AA. 73 Division 4 of Pt 2 of the Fines and Penalties (Recovery) Act (NT). 74 Regulation 19A of the Police Administration Regulations (NT). 75 Section 76 of the Summary Offences Act. 76 Section 78 of the Summary Offences Act. 77 Section 7(1) of the Misuse of Drugs Act. 78 Section 9(1) of the Misuse of Drugs Act. Each infringement notice offence is within the jurisdiction of the Court of Summary Jurisdiction constituted, for the purpose of hearing and adjudication, by a magistrate or by two justices of the peace79. A proceeding for such an offence is commenced in the Court of Summary Jurisdiction by the making of a complaint to a justice of the peace or to a magistrate80, and a party to such a proceeding has a right to appeal from an adjudication of that Court to the Supreme Court of the Northern Territory81. The two conditions for the application of the section being satisfied whenever a member of the Police Force has arrested a person without a warrant under s 123 for an infringement notice offence, s 133AB goes on to provide: "(2) The member may take the person into custody and: hold the person for a period up to 4 hours; or if the person is intoxicated – hold the person for a period longer than 4 hours until the member believes on reasonable grounds that the person is no longer intoxicated. The member, or any other member, on the expiry of the period mentioned in subsection (2), may: release the person unconditionally; or release the person and issue the person with an infringement notice in relation to the infringement notice offence; or release the person on bail; or under section 137, bring the person before a justice or court for the infringement notice offence or another offence allegedly committed by the person. For deciding how to deal with the person under subsection (3), the member, or another member, may question the person about the infringement notice offence, or any other offence in relation to which the person is of interest to police." 79 Section 43 of the Justices Act (NT). 80 Section 49 of the Justices Act (NT). 81 Section 163 of the Justices Act (NT). The structure is plain enough. Section 133AB(2) authorises the member of the Police Force to detain the person arrested for an infringement notice offence for a period of up to four hours, or longer if the person is intoxicated. Section 133AB(3) gives that member, or another member, four options as to how to deal with that person at the end of the period of detention. Section 133AB(4) authorises that member or another member to question the person for the purpose of determining how to so deal with the person. The four options given to a member of the Police Force under s 133AB(3) need to be examined in turn. The first three involve releasing the person at the end of the period of detention. The first option – releasing the person unconditionally – requires no comment, other than to note that it is the only option which would result in the arrest that has occurred being "paperless". The second option – releasing the person and issuing the person with an infringement notice in relation to the infringement notice offence for which the person has been arrested – involves an exercise of a power conferred on a member of the Police Force by the other Northern Territory legislation which provides for the issuing of an infringement notice for the offence. The issuing of the notice permits the person to elect to pay the specified amount and expiate the offence, or to have the matter dealt with by a court. The third option – releasing the person on bail – involves an exercise of a power conferred on a member of the Police Force by the Bail Act (NT). Under the Bail Act, release of a person on bail by a member of the Police Force can occur as an alternative to bringing a person before a justice or a court of competent jurisdiction under s 137 of the Police Administration Act. It can occur only after the person has been charged82, and is ordinarily to occur within four hours of the person being charged83. Charging a person with an offence requires particulars of the charge to be entered in a Police Station charge book unless it is not practicable for that to occur84. Whatever the precise significance of charging a person85, it must be taken in this context to be a precursor to prosecution for the offence charged in a court. 82 Section 16 of the Bail Act. 83 Section 33(3)(b) of the Bail Act. 84 Cf s 116(9) of the Police Administration Act. 85 Cf Japaljarri v Cooke (1982) 19 NTR 19 at 23. The final option available to a member of the Police Force under s 133AB(3) is described in s 133AB(3)(d) in terms of the member acting under s 137 to bring the person before a justice or court for the infringement notice offence or another offence allegedly committed by the person. Section 137(1) provides: "Without limiting the operation of section 123, but subject to subsections (2) and (3) of this section, a person taken into lawful custody under this or any other Act shall … be brought before a justice or a court of competent jurisdiction as soon as is practicable after being taken into custody, unless he or she is sooner granted bail under the Bail Act or is released from custody." Sub-sections (2) and (3) allow for a person taken into lawful custody in some circumstances to continue to be held in custody for such period as is reasonable to enable the person to be questioned, or investigations to be carried out to obtain evidence of, or in relation to, an offence which involves the person. For a member of the Police Force to bring a person before a justice or court for an infringement notice offence, or for another offence allegedly committed by the person, is for the member to bring the person before the Court of Summary Jurisdiction and to make a complaint that the person has committed the offence in question. The making of that complaint constitutes the commencement of a proceeding by which the guilt of the person and any punishment for the offence will then be determined by the Court of Summary Jurisdiction, subject to an appeal to the Supreme Court. The evident law enforcement function served by Div 4AA is to be contrasted with the evident protective function served by Div 4. Division 4, which predated Div 4AA, authorises a member of the Police Force to apprehend without warrant a person who the member has reasonable grounds for believing is intoxicated and is either in a public place or trespassing on private land. The member must have reasonable grounds for believing that, because of his or her intoxication, the person: is unable adequately to care for himself or herself and cannot practicably at that time be cared for by someone else; may cause harm to himself or herself or someone else; may intimidate, alarm or cause substantial annoyance to people; or is likely to commit an offence86. The person so apprehended can be held in custody for no longer than it reasonably appears that 86 Section 128 of the Police Administration Act. the person remains intoxicated, and is then to be released87. The person is to be neither charged with an offence nor questioned in relation to an offence88. Construction The constitutional validity of Div 4AA turns on the character and consequences of the detention authorised by s 133AB(2)(a). The character and consequences of the detention authorised by s 133AB(2)(b) need not be separately considered. That is because no party or intervener argues that s 133AB(2)(b) has a severable operation. The threshold question of construction informing the answer to the question of characterisation concerns the measurement of the period of "up to 4 hours" for which s 133AB(2)(a) authorises the member of the Police Force who has arrested a person for an infringement notice offence to hold that person in custody. The plaintiffs argue that s 133AB(2)(a) authorises the member of the Police Force to hold the person in custody for any period up to a maximum of four hours. Just how long the person is held up to that four hour maximum is for the member to determine. The defendant argues that s 133AB(2)(a) authorises the member of the Police Force to hold the person in custody only for so long as is reasonable for that member or another member to make and to implement a decision to deal with a non-intoxicated person under s 133AB(3). Holding under s 133AB(2) is for the purpose only of dealing with under s 133AB(3). The four hour maximum is a legislative cap on the time that can be regarded as reasonable. The defendant also has an overlapping argument. It is that s 137(1) operates concurrently with s 133AB(2) so as to require that a person who has been arrested and taken into custody for an infringement notice offence be brought before a justice or a court of competent jurisdiction "as soon as is practicable" after having been taken into custody. Section 133AB(2)(a) sets four hours as the upper limit of what can be regarded to be "as soon as is practicable" for the purpose of bringing the person before a justice or a court in compliance with s 137(1). To exercise the last of the options given to a member of the Police Force by s 133AB(3) is to do nothing more than comply with the concurrent requirement of s 137(1). If one of the other options given to a member of the Police Force by s 133AB(3) is to be exercised, that option must likewise be 87 Section 129 of the Police Administration Act. 88 Section 130 of the Police Administration Act. exercised within the same time frame: as soon as practicable, but always within the four hour period. The arguments divide along battlelines not unfamiliar where questions about the constitutional validity of a law are abstracted from questions about the concrete application of that law to determine the rights and liabilities of the parties. The party seeking to challenge validity advances a literal and draconian construction, even though the construction would be detrimental to that party were the law to be held valid. The party seeking to support validity advances a strained but benign construction, even though the construction is less efficacious from the perspective of that party than the literal construction embraced by the challenger. The constructions advanced reflect forensic choices: one designed to maximise the prospect of constitutional invalidity; the other to sidestep, or at least minimise, the prospect of constitutional invalidity. A court should be wary. "If the choice is between reading a statutory provision in a way that will invalidate it and reading it in a way that will not, a court must always choose the latter course when it is reasonably open."89 The nature of that mandated choice must not be misunderstood. The choice, where binary, is between two constructions: both of which are reasonably open in the application of ordinary principles of statutory construction; one of which is in opposition to the Constitution, the other of which is in conformity with the Constitution90. Questions as to the severance or reading down of otherwise invalid provisions aside91, a court has no warrant for departing from ordinary principles of statutory construction in pursuit of constitutional validity. And a court has no warrant for preferring one construction of a statutory provision over another merely to avoid 89 Residual Assco Group Ltd v Spalvins (2000) 202 CLR 629 at 644 [28]; [2000] HCA 33. 90 Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 504 [71]; [2003] HCA 2. 91 Cf Australian National Airways Pty Ltd v The Commonwealth (1945) 71 CLR 29 at 92; [1945] HCA 41. See, relevantly, s 59 of the Interpretation Act (NT). 92 Australian Communications and Media Authority v Today FM (Sydney) Pty Ltd (2015) 89 ALJR 382 at 396-397 [65]-[66]; 317 ALR 279 at 295-296; [2015] HCA 7. The approach which a court should adopt was identified and explained in the following statement by French CJ in International Finance Trust Co Ltd v New South Wales Crime Commission93: "The court should not strain to give a meaning to statutes which is artificial or departs markedly from their ordinary meaning simply in order to preserve their constitutional validity. There are two reasons for this. The first is that if Parliament has used clear words to encroach upon the liberty or rights of the subject or to impose procedural or other constraints upon the courts its choice should be respected even if the consequence is constitutional invalidity. The second reason is that those who are required to apply or administer the law, those who are to be bound by it and those who advise upon it are generally entitled to rely upon the ordinary sense of the words that Parliament has chosen. To the extent that a statutory provision has to be read subject to a counterintuitive judicial gloss, the accessibility of the law to the public and the accountability of Parliament to the electorate are diminished. Moreover, there is a real risk that, notwithstanding a judicial gloss which renders less draconian or saves from invalidity a provision of a statute, the provision will be administered according to its ordinary, apparent and draconian meaning." There is a further reason why a court should resist being drawn into adopting a strained meaning of a statute when it is merely to sidestep or minimise the prospect of constitutional invalidity. That reason was well articulated in a recent critique of the practice of construing statutes to avoid constitutional doubt in the Supreme Court of the United States. The reason is that the facility merely to express constitutional doubt as the basis for making a constructional choice "allows judges to articulate constitutional principles in a context where the real impact of those principles – the invalidation of a law – will be unfelt" in a manner that "is anomalous in a case-or-controversy legal system that (ostensibly) abhors advisory opinions". To construe a statute to avoid not a judicial determination of invalidity but a judicially articulated doubt as to validity "is problematic because it unmoors adjudication from the traditional, structural source of judicial restraint"94. Only if each were reasonably open in the application of ordinary principles of statutory construction could the prospect of constitutional validity or invalidity legitimately bear on the choice between competing constructions; 93 (2009) 240 CLR 319 at 349 [42]; [2009] HCA 49 (footnote omitted). 94 Katyal and Schmidt, "Active Avoidance: The Modern Supreme Court and Legal Change", (2015) 128 Harvard Law Review 2109 at 2112, 2164. and only then if the court were satisfied that one construction would lead to validity and the other to invalidity. I am unable to accept that the defendant's construction of s 133AB(2)(a) is the application of ordinary principles of statutory reasonably open construction. The proper construction is to be found in the meaning of the statutory language, read in its statutory context and in light of its statutory purpose. The principle of construction known as the principle of legality is of little assistance given that the evident statutory object is to authorise a deprivation of liberty and that the statutory language in question is squarely addressed to the duration of that deprivation of liberty. The principle "exists to protect from inadvertent and collateral alteration rights, freedoms, immunities, principles and values that are important within our system of representative and responsible government under the rule of law", and "is fulfilled in accordance with its rationale where the objects or terms or context of legislation make plain that the legislature has directed its attention to the question of the abrogation or curtailment of the right, freedom or immunity in question and has made a legislative determination that the right, freedom or immunity is to be abrogated or curtailed"95. The principle provides no licence for a court to adjust the meaning of a legislative restriction on liberty which the court might think to be unwise or ill-considered. Focusing on the statutory language, the defendant's construction involves a distortion, not just of the words of s 133AB(2)(a) but of the opening words of s 133AB(3). The conferral of authority on a member of the Police Force to "hold the person for a period up to 4 hours" is not on its face purposively related to the power of that member or another member to deal with the person. The conferral of authority to deal with the person "on the expiry" of the period of detention rather indicates that the authority to deal with the person is separate from, and sequential to, the authority to detain. What it also indicates is that the expiration of the period of detention must be capable of being ascertained before the authority to deal with arises. The expiration of the period of detention triggers the exercise of the authority to deal with, not the other way round. Looking more broadly to the statutory context, there exists on any view a tension between: the specific authority conferred by s 133AB(2)(a) on a member of the Police Force to detain a person the member has taken into custody after arresting the person without warrant under s 123 for an infringement notice offence; and the general requirement of s 137(1) for any person who is taken into 95 Lee v New South Wales Crime Commission (2013) 251 CLR 196 at 310 [313]- [314]; [2013] HCA 39. See also Al-Kateb v Godwin (2004) 219 CLR 562 at 577 [19]; [2004] HCA 37. custody to be brought before a justice or a court of competent jurisdiction as soon as is practicable after being taken into custody. The resolution of that tension necessarily involves determining "which is the leading provision and which the subordinate provision, and which must give way to the other"96. The natural reconciliation of the two provisions lies in the identification of s 133AB(2)(a) as a specific provision which takes temporal precedence over the general requirement of s 137(1) in relation to a person arrested and taken into custody for an infringement notice offence. The general requirement of s 137(1) has application to such a person only after the period of detention for which s 133AB(2)(a) provides has expired, and only in the event of a member of the Police Force deciding to deal with the person in accordance with the option provided by s 133AB(3)(d). The whole of s 137 then operates in accordance with its terms, ordinarily to require compliance with that requirement by the soonest practicable time after a person is taken into custody, but to permit of extension for such period as is reasonable to enable the person to be questioned or for investigations to be carried out to obtain evidence of, or in relation to, an offence which involves the person. The reconciliation of the two provisions is more problematic on the defendant's construction. On that construction, s 137(1) would always operate in relation to a person arrested and taken into custody for an infringement notice offence so as immediately to require that person to be brought before a justice or a court as soon as practicable after being taken into custody under s 133AB(2). The authority granted by s 133AB(2)(a), to detain the person for up to four hours, would be recast so as to operate as nothing more than a qualification to that requirement of s 137(1). Given that s 137(1) would already have been engaged from the moment of the person having been taken into custody, s 137(1) would not need to be engaged in the event of a member of the Police Force deciding to deal with the person in accordance with the option provided by s 133AB(3)(d). Yet s 137(1) would somehow be disengaged in the event of a member of the Police Force deciding to deal with the person in accordance with any of the other three options provided by s 133AB(3). In interpreting a provision of a Northern Territory Act, including a part of a Northern Territory Act97, "a construction that promotes the purpose or object underlying the Act (whether the purpose or object is expressly stated in the Act or not) is to be preferred to a construction that does not promote the purpose or 96 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 382 [70]; [1998] HCA 28. 97 Section 17 of the Interpretation Act (NT). object"98. Moreover, in interpreting a provision of a Northern Territory Act, including again a part of such an Act, "if material not forming part of the Act is capable of assisting in ascertaining the meaning of the provision, the material may be considered … to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act"99. Extrinsic material "cannot be determinative; it is available as an aid to interpretation"100. Extrinsic material does not displace the text but can illuminate the meaning conveyed by the text. The defendant's construction relies on confining the statutory purpose of Div 4AA to the narrow purpose of resolving what is said to be pre-existing ambiguity as to the ability of a member of the Police Force, consistently with s 137, to release a person arrested without warrant under s 123 while issuing an infringement notice to that person. Were that the only purpose, it would be difficult to see why Div 4AA was enacted in such an elaborate form and why s 133AB(2) was enacted at all. The true and much broader purpose of Div 4AA was that spelt out by the Attorney-General for the Northern Territory at the time of the introduction in the Legislative Assembly of the Bill for its enactment. The Attorney-General then said101: "The purpose ... is to provide members of the Northern Territory Police Force with an alternative post-arrest option, where a person who has committed certain prescribed offences may be held by police for up to four hours and can then be released with an infringement notice, as opposed to requiring that the person be charged and have those charges be heard by a court. I will refer to the concept as 'paperless arrest'. ... The policy is to permit police officers to detain individuals for up to four hours in relation to public order-type offences, and where an infringement notice may be issued. ... This alternative post-arrest option will provide further flexibility and efficiency in policing work. The option will enable police officers to 98 Section 62A of the Interpretation Act (NT). 99 Section 62B(1)(a) of the Interpretation Act (NT). 100 Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 518; [1987] HCA 12. 101 Northern Territory, Legislative Assembly, Parliamentary Debates (Hansard), 22 October 2014. return to their patrol in a more timely fashion, as opposed to being detained for long periods preparing necessary paperwork for a court to consider the charges. An additional benefit to the community is intended by the use of such an option to de-escalate social disorder situations or potential situations of public disorder before they escalate into major incidents." The Attorney-General went on later during the debate on the Bill in the Legislative Assembly to describe Div 4AA as giving members of the Police Force "a vehicle by which to remove [summary offenders], contain them and then release them"102. He described it as "a form of catch and release"103. The Attorney-General said104: "This system simply restores a simple idea that when a police officer arrests a person for a street offence, they have taken that person out of commission. They bring them to the watch house, drop them off at the watch house, write out the summary infringement notice – so it is not entirely paperless – which goes into the property bag of the person who is then placed in the cells for the next four hours. In four hours' time, they come out, collect their property, collect their summary infringement notice, and if they wish to contest the allegations in the summary infringement notice, then there are processes for that to occur. Those processes are explained on the back of the summary infringement notice. This means the police will no longer become arrest averse. It will actually say to the police that if these clowns are playing up, arrest them, take them into custody, get them out of circulation." The plaintiffs' construction not only fits the statutory language of s 133AB, but fits that identified statutory purpose of Div 4AA. It gives to s 133AB and s 137 a natural sequential operation in relation to persons taken into custody following arrest without warrant for infringement notice offences. It does so by giving s 137 full operation where those persons are dealt with at the expiration of their detention in accordance with s 133AB(3)(d). It should be accepted. 102 Northern Territory, Legislative Assembly, Parliamentary Debates (Hansard), 26 November 2014. 103 Northern Territory, Legislative Assembly, Parliamentary Debates (Hansard), 26 November 2014. 104 Northern Territory, Legislative Assembly, Parliamentary Debates (Hansard), 26 November 2014. On its proper construction, s 133AB(2)(a) authorises a member of the Police Force to detain a person arrested and taken into custody for an infringement notice offence for any period up to a maximum of four hours. The period of detention, up to that maximum period of four hours, is left to the discretion of the member. That discretion as to the period of detention is not unconfined: undoubtedly, it is to be exercised in good faith and for a proper (that is to say, non-extraneous) purpose105, which might permissibly be as broad as the maintenance of social order106. The discretion is nevertheless undefined. It is not constrained to be exercised so as to ensure that the person is detained only for such time as is reasonable or practicable to enable the person to be brought before a justice or a court of competent jurisdiction or to enable the person to be dealt with in another way permitted by law. Nor is the discretion constrained to be exercised only in a manner which ensures that the detention is protective of the person or of other persons or preventive of harm. It is necessary now to face up to the constitutional consequences of that construction. Characterisation The starting point for constitutional analysis is the frequently repeated observation in the joint reasons for judgment in Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs that, "exceptional cases" aside, "the involuntary detention of a citizen in custody by the State is penal or punitive in character and, under our system of government, exists only as an incident of the exclusively judicial function of adjudging and punishing criminal guilt"107. The observation has its foundation in the concern for the protection of personal liberty lying at the core of our inherited constitutional tradition, which includes the inheritance of the common law. Liberty is "the most elementary and important"108 of those basic common law rights, which "traditionally, and 105 Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492 at 505; [1947] HCA 21. 106 See s 5(2)(a) of the Police Administration Act. 107 (1992) 176 CLR 1 at 27; [1992] HCA 64. 108 Williams v The Queen (1986) 161 CLR 278 at 292; [1986] HCA 88, quoting Trobridge v Hardy (1955) 94 CLR 147 at 152; [1955] HCA 68. therefore historically, are judged by that independent judiciary which is the bulwark of freedom"109. The centrality of personal liberty to the functioning of government within our 800 year old inherited tradition was captured in the still frequently cited110 eighteenth century prose of Sir William Blackstone111: "Of great importance to the public is the preservation of this personal liberty: for if once it were left in the power of any, the highest, magistrate to imprison arbitrarily whomever he or his officers thought proper ... there would soon be an end of all other rights and immunities. ... To bereave a man of life, or by violence to confiscate his estate, without accusation or trial, would be so gross and notorious an act of despotism, as must at once convey the alarm of tyranny throughout the whole kingdom. But confinement of the person, by secretly hurrying him to gaol, where his sufferings are unknown or forgotten; is a less public, a less striking, and therefore a more dangerous engine of arbitrary government." Explaining the protection of personal liberty which the common law provided, Blackstone continued112: "To make imprisonment lawful, it must either be, by process from the courts of judicature, or by warrant from some legal officer, having authority to commit to prison; which warrant must be in writing, under the hand and seal of the magistrate, and express the causes of the commitment, in order to be examined into (if necessary) upon a habeas corpus. If there be no cause expressed, the [gaoler] is not bound to detain the prisoner. For the law judges in this respect ... that it is unreasonable to send a prisoner, and not to signify withal the crimes alleged against him." The joint reasons in Lim specifically acknowledged, as the "most important" of the exceptional cases in which involuntary detention has been accepted not to be penal or punitive in character, "the arrest and detention in custody, pursuant to executive warrant, of a person accused of crime to ensure that he or she is available to be dealt with by the courts", noting that "the power to detain a person in custody pending trial is ordinarily subject to the supervisory 109 R v Quinn; Ex parte Consolidated Food Corporation (1977) 138 CLR 1 at 11; [1977] HCA 62. 110 Eg Williams v The Queen (1986) 161 CLR 278 at 292. 111 Blackstone, Commentaries on the Laws of England, (1765), Bk 1 at 131-132. 112 Blackstone, Commentaries on the Laws of England, (1765), Bk 1 at 132-133. jurisdiction of the courts"113. The common law facilitated the exercise of that supervisory jurisdiction by imposing a requirement, replicated in s 137(1), that a person arrested be brought before a justice or a court as soon as is practicable after being taken into lawful custody114. The joint reasons in Lim also acknowledged that the exceptional circumstances in which involuntary detention might not be penal or punitive would include cases of detention under mental health legislation and detention under quarantine legislation115. Other limited forms of protective or preventive detention might well be envisaged116. Cases subsequent to Lim have illustrated the difficulty of seeking to draw a bright-line distinction between penal or punitive detention and protective or preventive detention117. The difficulty of drawing any distinction between detention which is penal or punitive and detention which is not highlights the significance of default characterisation: any form of detention is penal or punitive unless justified as otherwise. The question is always one of characterisation of the detention, in respect of which the object sought to be achieved by the law authorising detention is a relevant consideration, but not the only consideration. More recent cases indicate that no form of executive detention in the exercise of a statutory power to detain can escape characterisation as punitive unless the duration of that detention meets at least two conditions118. The first is that the duration of the detention is reasonably necessary to effectuate a purpose which is identified in the statute conferring the power to detain and which is capable of fulfilment. The second is that the duration of the detention is capable of objective determination by a court at any time and from time to time. 113 (1992) 176 CLR 1 at 28. 114 Williams v The Queen (1986) 161 CLR 278 at 292-293. 115 (1992) 176 CLR 1 at 28. 116 Cf Bingham, The Rule of Law, (2010) at 71-72. 117 Eg Fardon v Attorney-General (Qld) (2004) 223 CLR 575; [2004] HCA 46; Re Woolley; Ex parte Applicants M276/2003 (2004) 225 CLR 1; [2004] HCA 49; Pollentine v Bleijie (2014) 253 CLR 629; [2014] HCA 30. 118 Plaintiff M76/2013 v Minister for Immigration, Multicultural Affairs and Citizenship (2013) 251 CLR 322 at 369-370 [138]-[140]; [2013] HCA 53; Plaintiff S4/2014 v Minister for Immigration and Border Protection (2014) 253 CLR 219 at 231-232 [25]-[29]; [2014] HCA 34; CPCF v Minister for Immigration and Border Protection (2015) 89 ALJR 207 at 272 [374]; 316 ALR 1 at 83; [2015] HCA 1. The detention that is authorised by Div 4, of a person who a member of the Police Force has reasonable grounds for believing is intoxicated, can readily be seen to satisfy both of those conditions. So too can the detention that is authorised by s 137(2) or (3), of a person who has been arrested and taken into custody, for such period as is reasonable to enable the person to be questioned, or investigations to be carried out to obtain evidence of, or in relation to, an offence which involves the person. The detention that is authorised by Div 4AA plainly satisfies neither of those conditions. The duration of the detention within the four hour maximum specified in s 133AB(2)(a) is not limited by reference to the time needed to effectuate any identified statutory purpose, and the duration of that detention within the four hour maximum is designedly left to the discretion of a member of the Police Force. The duration of the detention depends on the choice of the member as to how long to take a person out of circulation. Moreover, the detention that is authorised by Div 4AA is detention of a person whom the member of the Police Force has arrested on the basis that the member believed, albeit on reasonable grounds, that the person had committed, was committing or was about to commit an offence. It is a form of detention which results from the member acting not as an accuser but as a judge. This is not an occasion to mince words. The form of executive detention authorised by Div 4AA is punitive. Because it is punitive, the imposition of the detention involves the exercise of a function which our constitutional tradition treats as pertaining exclusively to the exercise of judicial power. Separation of powers The doctrine of separation of powers enshrined in Ch III of the Constitution has its principal textual anchor in the opening words of s 71. Those words are that "[t]he judicial power of the Commonwealth shall be vested in ... the High Court of Australia, and in such other federal courts as the Parliament creates, and in such other courts as it invests with federal jurisdiction". The doctrine ascribes to those words an allocation of the judicial power of the Commonwealth which is both exclusive and exhaustive. The Parliament of the Commonwealth can vest judicial power of the Commonwealth only in courts referred to in s 71119, and the Parliament can vest in those courts only judicial 119 Waterside Workers' Federation of Australia v J W Alexander Ltd (1918) 25 CLR 434; [1918] HCA 56. power of the Commonwealth or power incidental to judicial power of the Commonwealth120. the Parliament of Division 4AA has not been enacted by the Commonwealth. It has been enacted by the Legislative Assembly in the exercise of a distinct legislative power to make laws for the peace, order and good government of the Territory121. That distinct legislative power was conferred on the Legislative Assembly in the exercise by the Parliament of its power under s 122 of the Constitution to "make laws for the government of any territory". The exercise by the Legislative Assembly of that distinct legislative power, although derived from the Parliament, "is not an exercise of the Parliament's legislative power"122. When they argue that Div 4AA infringes the doctrine of separation of powers enshrined in Ch III of the Constitution, the plaintiffs necessarily argue that the judicial power which is conferred by a law enacted in the exercise of a distinct legislative power conferred by the Parliament under s 122 is judicial power of the Commonwealth. That premise of the plaintiffs' argument was considered and rejected in Kruger v The Commonwealth123. To a question asking whether a Territory law which authorised executive removal and confinement of persons was invalid on grounds (amongst others) that "it purported to confer judicial power of the Commonwealth ... on persons who were not appointed under or obliged or entitled to exercise the judicial power of the Commonwealth in accordance with Ch III of the Constitution", the formal answer of the Court was "No"124. Each of the four Justices constituting the majority who joined in that answer adopted reasoning which involved a rejection of the proposition that judicial power 120 R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254; [1956] HCA 10, affirmed in Attorney-General (Cth) v The Queen (1957) 95 CLR 529; 121 Section 6 of the Northern Territory (Self-Government) Act 1978 (Cth). 122 Svikart v Stewart (1994) 181 CLR 548 at 562; [1994] HCA 62, explaining Capital Duplicators Pty Ltd v Australian Capital Territory (1992) 177 CLR 248; [1992] HCA 51. 123 (1997) 190 CLR 1; [1997] HCA 27. 124 (1997) 190 CLR 1 at 38-39, 176. invested by a law enacted in the exercise of legislative power conferred under s 122 is judicial power of the Commonwealth125. The question as now reframed in this special case cannot be approached as if it had not been answered before. What needs to be addressed is not how the question might best be answered if the historical slate were to be wiped clean and the Constitution were to be read anew126, but whether there is sufficient justification for now reopening, and, if so, departing from the answer already How s 122 relates to Ch III is "a problem of interpretation ... which has vexed judges and commentators since the earliest days of Federation"128. "It would have been simple enough ... to hold that the courts and laws of a Territory were federal courts and laws made by the Parliament."129 Equally, it would have been simple enough to treat s 122 as wholly divorced from Ch III so as to be entirely "disparate and non-federal"130. The first of those simple approaches has it acquired early never commanded assent, and ascendancy131) can no longer be accepted in unqualified terms. It has been held, for example, that s 76(ii) operates in conjunction with s 77(i) to permit the Parliament to confer jurisdiction on federal courts in matters arising under laws made under s 122132. The jurisdiction conferred on a federal court by a law made by the Parliament can only be federal jurisdiction. And although a negative answer has now repeatedly been given to the question whether a Territory court is a federal court subject to s 72, it has been emphasised that the negative answer the second (although 125 (1997) 190 CLR 1 at 44, 62, 141-142, 170, 176. 126 Cf Capital TV and Appliances Pty Ltd v Falconer (1971) 125 CLR 591 at 598; [1971] HCA 10. 127 Allders International Pty Ltd v Commissioner of State Revenue (Vict) (1996) 186 CLR 630 at 635, 673; [1996] HCA 58. 128 Re Governor, Goulburn Correctional Centre; Ex parte Eastman (1999) 200 CLR 322 at 331 [6]; [1999] HCA 44. 129 R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 290. 130 Attorney-General (Cth) v The Queen (1957) 95 CLR 529 at 545; [1957] AC 288 at 131 R v Bernasconi (1915) 19 CLR 629; [1915] HCA 13. 132 Northern Territory v GPAO (1999) 196 CLR 553; [1999] HCA 8; Spinks v Prentice (1999) 198 CLR 511; [1999] HCA 27. which has so been given is "not to a wide question as to the relationship between Ch III and s 122"133. The answer given in Kruger to the wide question as now reframed in this special case cannot be said to have involved no difference between the reasoning of the justices who constituted the majority, or to have rested on a principle carefully worked out in a succession of cases134. On the other hand, there cannot be said to be anything in the cases decided before Kruger which lends support to the different answer that the plaintiffs now seek. The plaintiffs fairly acknowledge that two of them, Spratt v Hermes135 and Capital TV and Appliances Pty Ltd v Falconer136, stand against acceptance of that answer. The most significant development to have occurred since Kruger has been the recognition in North Australian Aboriginal Legal Aid Service Inc v Bradley137 that Territory courts, no less than State courts, answer the description in s 71 of courts which the Parliament can invest with federal jurisdiction and which are capable of exercising the judicial power of the Commonwealth by reason of that investiture. The result is that federal jurisdiction can be invested by the Parliament in a Territory court under s 122 as well as in a State court under s 77(iii). The plaintiffs seek to go further than Bradley. They seek to advance an argument to the effect that all jurisdiction exercised by a Territory court is federal jurisdiction, at least where the matter to be adjudicated concerns rights or liabilities which owe their existence to a law made by the Parliament under s 122. The strongest form of an argument to that effect was developed with conspicuous clarity in the academic writing of Professor Zines138. The argument as so developed builds on the settled understanding that the description in s 76(ii) of a matter arising under a law made by the Parliament extends to a matter in which a 133 Re Governor, Goulburn Correctional Centre; Ex parte Eastman (1999) 200 CLR 134 Cf John v Federal Commissioner of Taxation (1989) 166 CLR 417 at 438; [1989] HCA 5. 135 (1965) 114 CLR 226; [1965] HCA 66. 136 (1971) 125 CLR 591. 137 (2004) 218 CLR 146; [2004] HCA 31. 138 Zines, Cowen and Zines's Federal Jurisdiction in Australia, 3rd ed (2002) at 177- right or duty in issue owes its existence to a law made by the Parliament139. Such an argument would then go on, of necessity, to rely on a more contestable proposition: that a matter is sufficiently described as a matter in federal jurisdiction if the matter answers the description of one or more of the nine matters referred to in ss 75 and 76, irrespective of the source of authority to adjudicate that matter140. The argument has significant implications for the scope of the appellate jurisdiction of the High Court under s 73 and, in consequence, for whether it might be possible in Territories (although it is impossible in States) to "create islands of power immune from supervision and restraint"141. Acceptance of the argument would lead to rejection of the conclusion in Capital TV and Appliances Pty Ltd v Falconer that no appeal lies to the High Court from a Territory court under s 73 of the Constitution. Acceptance of the argument would also involve rejection of reasoning in Spratt v Hermes to the effect that a Territory court did not exercise federal jurisdiction when it heard a prosecution for an offence against a Commonwealth law at a time before the amendment in 1976142 of s 68(2) of the Judiciary Act 1903 (Cth) specifically to confer federal jurisdiction on Territory courts in the same way as it confers federal jurisdiction on State courts. The argument need not be considered now. The argument, if accepted, would not take the plaintiffs the whole of the distance they need to travel. Section 71, it is to be recalled, relevantly refers to the judicial power of the Commonwealth as being vested in such courts as the Parliament invests with federal jurisdiction. To accept that all jurisdiction exercised by a Territory court is federal jurisdiction would not be to accept that all federal jurisdiction exercised by a Territory court is federal jurisdiction vested in that court by the Parliament, so as to involve the exercise of judicial power of the Commonwealth within the meaning of s 71. It therefore would not follow, from acceptance that all jurisdiction exercised by a Territory court is federal jurisdiction, that any judicial power conferred by a Territory law is judicial power of the Commonwealth. 139 Federal Capital Commission v Laristan Building and Investment Co Pty Ltd (1929) 42 CLR 582 at 585-586; [1929] HCA 36; LNC Industries Ltd v BMW (Australia) Ltd (1983) 151 CLR 575; [1983] HCA 31; Ruhani v Director of Police (2005) 222 CLR 489; [2005] HCA 42. 140 Cf Northern Territory v GPAO (1999) 196 CLR 553 at 589-590 [87]. 141 Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 581 [99]; [2010] HCA 1. 142 By the Judiciary Amendment Act 1976 (Cth). The reasoning in Bradley is in truth opposed to the notion that judicial power conferred by a Territory law is judicial power of the Commonwealth. The first of the propositions accepted in Bradley was that "a court of the Territory may exercise the judicial power of the Commonwealth pursuant to investment by laws made by the Parliament"143. It was not that a court of the Territory might exercise the judicial power of the Commonwealth pursuant to investment by laws made by a legislature of a Territory. That first proposition then formed the foundation for the holding in Bradley that the doctrine associated with Kable v Director of Public Prosecutions (NSW)144 applies to Territory courts in the same way as it applies to State courts. That holding would be redundant if the doctrine of separation of powers were applicable. The actual result in Bradley has also removed much of the force of the apparent incongruity of Territory courts being distinct from federal courts, and of Territory judicial power being discrete from Commonwealth judicial power. By equating Territory courts with State courts for the purpose of s 71 of the Constitution, Bradley subjects the legislatures of self-governing Territories to the same strictures as Ch III of the Constitution applies to the Parliaments of the States. The result is to afford to citizens resident in Territories the derivative constitutional protection provided by Ch III in no lesser degree than is afforded to citizens resident in States. Bradley has stood for more than a decade, and Kruger has stood for nearly two decades. Their holdings are consistent. Given that the doctrine of separation of powers has implications for institutional design which extend well beyond considerations of personal liberty, it cannot be said that Kruger has achieved no useful result or has led to inconvenience145. Kruger has been acted on by Territory legislatures to establish institutional structures, blending judicial and non-judicial power, broadly equivalent to those which exist in most States146. Kruger should not be reopened. The legislative power of the Legislative Assembly is not constrained by the doctrine of separation of powers enshrined in Ch III of the Constitution. Division 4AA therefore cannot infringe that doctrine. But that is not the end of the analysis. 143 (2004) 218 CLR 146 at 163 [28]. 144 (1996) 189 CLR 51; [1996] HCA 24. 145 Cf John v Federal Commissioner of Taxation (1989) 166 CLR 417 at 438. 146 Eg ACT Civil and Administrative Tribunal Act 2008 (ACT), Northern Territory Civil and Administrative Tribunal Act (NT). Institutional integrity Bradley explained the doctrine associated with Kable, in its application to State courts and Territory courts alike, to rest on the proposition "that it is implicit in the terms of Ch III of the Constitution, and necessary for the preservation of that structure, that a court capable of exercising the judicial power of the Commonwealth be and appear to be an independent and impartial tribunal"147. Underlying that proposition is an understanding that "[a] State or Territory law that undermines the actuality or appearance of a State or Territory court as an independent and impartial tribunal is incompatible with Ch III because it undermines the constitutionally permissible investiture in that court of the separated judicial power of the Commonwealth"148. Bradley demonstrated independence and impartiality to be defining characteristics of a court capable of exercising the judicial power of the Commonwealth. Decisions before and after have emphasised that independence and impartiality do not exhaust those defining characteristics. In Fardon v Attorney-General (Qld)149, the essential concern of the doctrine, and the touchstone for its application, was identified as the protection from legislative impairment of the "institutional integrity" of courts: that is to say, the protection of the integrity of courts as institutions established for the administration of justice150. Thus, as was explained in Forge v Australian Securities and Investments Commission151, with reference to Kable, Fardon and Bradley: "[T]he relevant principle is one which hinges upon maintenance of the defining characteristics of a 'court' ... It is to those characteristics that the reference to 'institutional integrity' alludes. That is, if the institutional integrity of a court is distorted, it is because the body no longer exhibits in some relevant respect those defining characteristics which mark a court apart from other decision-making bodies." 147 (2004) 218 CLR 146 at 163 [29]. 148 Condon v Pompano Pty Ltd (2013) 252 CLR 38 at 106 [183]; [2013] HCA 7. 149 (2004) 223 CLR 575 at 591 [15], 593 [23], 598-599 [37], 617 [101], 648 [198], 655 150 Harris v Caladine (1991) 172 CLR 84 at 92; [1991] HCA 9, explaining The Commonwealth v Hospital Contribution Fund (1982) 150 CLR 49; [1982] HCA 151 (2006) 228 CLR 45 at 76 [63]; [2006] HCA 44. The explanation in Forge continued by emphasising that "[i]t is neither possible nor profitable to attempt to make some single all-embracing statement of the defining characteristics of a court"152. Institutional attributes can too readily be taken for granted until such time as they are seen to come under threat. The principle as explained in Forge operates to invalidate a State or Territory law which confers on a State or Territory court "a power or function which substantially impairs the court's institutional integrity, and which is therefore incompatible with that court's role as a repository of federal jurisdiction"153. Yet the operation of the principle is not confined to invalidating a law by reference to impairment of institutional integrity in the nature or manner of exercise of a power or function which the law confers on a court. Cases in which the principle has been applied to hold State laws invalid have included those in which impairment of the institutional integrity of a court has been seen to arise from the nature of the task which a court was required to perform154. They have also included cases in which impairment of the institutional integrity of a court has been seen to arise from the nature of the incidents of a function conferred on a person, rather than a court155, and by reference to the position in which a court is placed within an overall legislative scheme156. The cases show that a tendency to undermine public confidence in a court is indicative of a law which impairs the institutional integrity of that court157. They show that the character of a law as impairing the institutional integrity of a court can also be indicated by a legislative plan which builds on public confidence in that court to bolster what is essentially legislative or executive 152 (2006) 228 CLR 45 at 76 [64]. 153 Attorney-General (NT) v Emmerson (2014) 253 CLR 393 at 424 [40]; [2014] HCA 154 Forge v Australian Securities and Investments Commission (2006) 228 CLR 45 at 76 [63], explaining Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51; International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319 at 367 [98], 379 [140], 386 [159]. 155 Wainohu v New South Wales (2011) 243 CLR 181 at 208-210 [44]-[47]; [2011] HCA 24. 156 South Australia v Totani (2010) 242 CLR 1 at 52 [82], 67 [149], 92-93 [236], 173 [481]; [2010] HCA 39. 157 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 617-618 [102]. action, so as metaphorically "to cloak their work in the neutral colors of judicial action"158. In Kable itself, both of those tendencies combined in legislation seen to conscript a court in a legislative plan for the procurement of the continuing imprisonment of an identified individual after the expiration of the sentence which had earlier been imposed by a court for the crime of which he was convicted. The proposition that punitive detention ordinarily exists under our system of government only as a consequence of the judicial adjudication of criminal guilt, as expounded in Lim, was reflected in the reasoning of members of the majority in concluding that the institutional integrity of the court was impaired159. The reasoning in Kable was complex. So has been the reasoning in some of the cases which have applied it. Multiple factors have been in the mix. But a doctrine which has its foundation in the protection of the integrity of courts as institutions for the administration of justice need not always be difficult to apply. Not every case is one of complexity. And incompatibility with the institutional integrity of a court can arise quite irrespective of considerations of public confidence. A law which confers a power or function on a court which is "repugnant to the judicial process in a fundamental degree" is a law which is for that reason alone incompatible with the institutional integrity of that court160. A law which gives to a court a role in a legislative scheme designed to facilitate punitive executive detention must surely be within the same category. The role is antithetical to the existence of the court as an institution for the administration of justice; repugnant in a fundamental degree to the judicial status. Courts are defined as much by what they don't do as by what they do and how they do it. Implicit in a tradition which reserves punitive detention presumptively to the judicial power is an understanding that punitive detention imposed in the exercise of judicial power is in consequence of adjudication by a court acting in accordance with a judicial process. Part of what sets courts apart 158 South Australia v Totani (2010) 242 CLR 1 at 172 [479]. 159 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 106-107, 121-122, 131-132. See also Fardon v Attorney-General (Qld) (2004) 223 CLR 575 160 International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319 at 379 [140]. from other institutions within our system of government is that they do not participate in a punitive deprivation of liberty by another arm of government. The plaintiffs place understandable emphasis, in their argument that Div 4AA impairs the institutional integrity of courts of the Northern Territory, on the lack of any involvement on the part of those courts in the instigation or supervision of the detention for which s 133AB(2)(a) provides. Acknowledging that there is no ousting of the jurisdiction of the Supreme Court to ensure that any detention remains within the limits set by s 133AB(2)(a), they emphasise that the detention allowed to occur within those legislated limits is entirely in the exercise of executive discretion. That emphasis is well placed to the extent of highlighting the executive detention authorised by Div 4AA as punitive. For reasons I have already set out at some length, I have concluded that the detention is properly characterised as punitive. That being the character of the detention, the problem with Div 4AA from the perspective of the protection of the institutional integrity of courts of the Northern Territory arises not from those courts being kept out of the process of punitive detention for which s 133AB(2)(a) provides. The problem rather arises from those courts being brought into the further processes which Div 4AA contemplates will occur after that period of punitive detention is over. The constitutional flaw in the design of Div 4AA lies in the role which it gives to Territory courts in the options from which a member of the Police Force must choose under s 133AB(3) when deciding how to deal with the person detained at the end of the period of punitive detention which that member or another member of the Police Force has imposed under s 133AB(2)(a). It is only the first of those options – unconditionally releasing the person in accordance with s 133AB(3)(a) – which does not involve, or cannot give rise to, the commencement of proceedings for the prosecution of that person in the Court of Summary Jurisdiction, with a consequent right to appeal to the Supreme Court. The result of any prosecution which will occur if the person is dealt with under s 133AB(3)(b), (c) or (d) will be an adjudication which determines the criminal liability of the person. Whatever the outcome of that adjudication, the person will already have been punished through the executive detention that has occurred. No subsequent action by a court can change that historical fact. Courts of the Northern Territory are thereby made support players in a scheme the purpose of which is to facilitate punitive executive detention. They are made to stand in the wings during a period when arbitrary executive detention is being played out. They are then ushered onstage to act out the next scene. That role is antithetical to their status as institutions established for the administration of justice. Lest it be thought incongruous that the constitutional defect in a legislative scheme of punitive executive detention is to be found at the periphery of that detention, in the subsidiary role which the legislative scheme gives to courts, it is important to recognise that a constitutional doctrine which limits legislative design has flow-on effects for political accountability. Were the provisions which contemplate a role for courts to be removed, the legislative scheme of Div 4AA would appear to be quite different. The legislative scheme would be starkly one of catch and release. The scheme would be reduced so as to appear on the face of the legislation implementing it to be one which authorises police to detain, and then release, persons arrested without warrant on belief of having committed or having been about to commit an offence. The political choice for the Legislative Assembly would be whether or not to enact a scheme providing for deprivation of liberty in that stark form. Conclusion The questions asked in the special case should be formally answered as follows: Division 4AA of Pt VII of the Police Administration Act (NT) is invalid on the ground that it impairs the institutional integrity of courts of the Northern Territory contrary to Ch III of the Constitution. The defendant should pay the plaintiffs' costs of the special case. There should be a declaration that Div 4AA is invalid. The balance of the matter should be remitted to the Supreme Court of the Northern Territory. 137 KEANE J. The first plaintiff provides legal services to Aboriginal and Torres Strait Islander people in the Northern Territory. The second plaintiff, Ms Bowden, is an Aboriginal person resident in the Northern Territory. On 19 March 2015, she was arrested in Katherine and held in custody in reliance upon s 133AB(2)(b) of the Police Administration Act (NT) ("the Act"). Ms Bowden was held for nearly 12 hours, and was then issued with an infringement notice for two offences, which were stated on the notice as "use obscene/indecent behaviour" and "bring liquor into restricted area". The plaintiffs challenge the validity of Div 4AA of Pt VII of the Act, in which s 133AB is found. They argue that Div 4AA authorises detention by the executive government which is punitive in character and is therefore an exclusively judicial power161. On that footing, the plaintiffs advance two arguments against the validity of Div 4AA. The first is that the legislative competence of the Legislative Assembly of the Northern Territory is limited by the separation effected by Ch III of the Commonwealth Constitution between the judicial power of the Commonwealth on the one hand, and the executive and legislative powers of the Commonwealth on the other. The plaintiffs' second argument is that Div 4AA offends the principle in Kable v Director of Public Prosecutions (NSW)162. The legislation Section 123 of the Act, which predates the commencement of Div 4AA, provides that: "A member of the Police Force may, without warrant, arrest and take into custody any person where he believes on reasonable grounds that the person has committed, is committing or is about to commit an offence." Section 137(1) of the Act also predates the commencement of Div 4AA. It provides generally that a person taken into custody must, as soon as practicable, be brought before a justice or a court. Section 137(2) provides that, notwithstanding this general requirement, a police officer may hold a person in custody for a reasonable period to enable that person to be questioned, or to enable investigations to be carried out, in relation to an offence, whether or not it is the offence in respect of which the person was taken into custody. 161 Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 26-29; [1992] HCA 64; Re Woolley; Ex parte Applicants M276/2003 (2004) 225 CLR 1 at 12 [17]; [2004] HCA 49. 162 (1996) 189 CLR 51; [1996] HCA 24. Division 4AA was enacted by the Police Administration Amendment Act 2014 (NT) ("the amending Act"), which commenced on 17 December 2014. It provides relevantly as follows: Definition In this Division: infringement notice offence means an offence under another Act for which an infringement notice may be served and which is prescribed for this Division by regulation. Taking person into custody for infringement notice offence This section applies if: a member of the Police Force has arrested a person without a warrant under section 123; and the person was arrested because the member believed on reasonable grounds that the person had committed, was committing or was about to commit, an offence that is an infringement notice offence. The member may take the person into custody and: hold the person for a period up to 4 hours; or if the person is intoxicated – hold the person for a period longer than 4 hours until the member believes on reasonable grounds that the person is no longer intoxicated. The member, or any other member, on the expiry of the period mentioned in subsection (2), may: release the person unconditionally; or release the person and issue the person with an infringement notice in relation to the infringement notice offence; or release the person on bail; or under section 137, bring the person before a justice or court for the infringement notice offence or another offence allegedly committed by the person. For deciding how the person under to deal with subsection (3), the member, or another member, may question the person about the infringement notice offence, or any other offence in relation to which the person is of interest to police. When person taken into custody (1) A member of the Police Force who takes a person into custody under section 133AB, or another member, must establish the person's identity by taking and recording the person's name and further information relevant to the person's identification, including photographs, fingerprints and other biometric identifiers." Regulation 19A of the Police Administration Regulations (NT) was also enacted by the amending Act. It prescribes offences in the following categories as infringement notice offences: an offence for which an infringement notice may be served under regulation 3 of the Summary Offences Regulations; a police infringement offence as defined in regulation 7(1) of the Liquor Regulations; an offence as defined in section 20A of the Misuse of Drugs Act." A period of detention under s 133AB(2)(a) or (b) of the Act does not preclude the issuing of an infringement notice. There is no express requirement in s 133AB(2)(a) or (b) that the period of detention be used for the purpose of investigating the commission of an offence; whether its operation is impliedly conditional on that purpose poses a difficult question of construction as to the relationship between s 133AB(2) and (3) and s 137(2) of the Act. In particular, there is a question of some difficulty as to whether s 133AB(2) is concerned to fix the outer limits of the reasonable period of questioning and investigation referred to in s 137(2) so that if those activities are not being pursued the authority to detain conferred by s 133AB(2) expires. The special case The parties agreed to state a number of questions of law for the opinion of this Court in a special case. The questions for determination are as follows: "Is Division 4AA of Part VII of the [Act] (or any part thereof) invalid on the ground that: it purports to confer on the executive of the Northern Territory a power to detain which is penal or punitive in character: which, if it had been passed by the Commonwealth Parliament, would be beyond the powers of that Parliament under section 122 of the Constitution, which powers are limited by the separation of powers enshrined in the Constitution; and which is therefore beyond the powers of the Legislative Assembly of the Northern Territory under the Northern Territory (Self-Government) Act 1978 (Cth), which powers are subject to the same limits; and/or it purports to confer on the executive (rather than the courts) of the Northern Territory a power of detention which is penal or punitive in character, the institutional integrity of the courts of the Northern Territory in a manner contrary to the Constitution?" thereby undermining or interfering with The first step in each of the plaintiffs' arguments for the invalidity of the legislation is the proposition that the power conferred by Div 4AA is penal or punitive in character. For the reasons that follow, Div 4AA is not invalid irrespective of whether the power it confers is penal or punitive in character. As to the first of the plaintiffs' arguments, the legislative power of the Legislative Assembly of the Northern Territory is, like the legislative power of the States, unconstrained by the constitutional separation of powers which limits the legislative power of the Commonwealth Parliament in relation to the vesting of the judicial power of the Commonwealth. This conclusion is not altered by the circumstance that s 122 of the Constitution empowered the Commonwealth Parliament to create the Legislative Assembly of the Northern Territory by the enactment of the Northern Territory (Self-Government) Act 1978 (Cth) ("the Self-Government Act"). In addition, the courts of the Northern Territory are not creatures of the Commonwealth Parliament; they are creatures of the Legislative Assembly of the Northern Territory. The legislative power of the Legislative Assembly of the Northern Territory derives from Commonwealth legislation enacted pursuant to s 122, and the Commonwealth Parliament has vested some specific judicial functions in the courts of the Northern Territory; but in general, the adjudicative power of the courts and tribunals of the Northern Territory derives immediately and directly from the Legislative Assembly of the Northern Territory. And no vesting of the judicial power of the Commonwealth in the courts and tribunals of the Northern Territory was, or indeed could be, effected by the Legislative Assembly of the Northern Territory. As to the plaintiffs' second argument, Div 4AA does not affect the functioning or institutional integrity of any court of the Northern Territory, and so does not infringe the principle in Kable. The character of detention under Div 4AA As noted above, the plaintiffs' challenge to the validity of Div 4AA proceeds from characterising the detention which it authorises as punitive. The determination of the character of the detention for which Div 4AA provides depends upon the operation and effect of the law understood in light of its proper construction163. One would not ordinarily proceed to a determination of questions of constitutional validity where the case might be resolved on the basis that the impugned law, properly construed, does not have the operation and effect for which the challenger contends164. In this case, however, the resolution of the constitutional issues is, on any view, straightforward: it is clear that the plaintiffs' challenge to Div 4AA based on the separation of powers cannot succeed. Accordingly, the concern165 that legislation not be invalidated unnecessarily where it can be read down is not a reason to leave the constitutional questions until last. Further, because the constitutional issues are readily resolved in light of existing authority, practical considerations of judicial parsimony166 do not require that the constitutional questions be reached last. And the circumstances that the characterisation argument is not easily resolved and that the difficult issues of statutory construction involved may be better left to a case which is a better vehicle for their resolution provide reason to proceed directly to address the constitutional arguments rather than to seek a final determination of the characterisation issue. 163 Bank of New South Wales v The Commonwealth (1948) 76 CLR 1 at 186-187; [1948] HCA 7; The Commonwealth v Tasmania (1983) 158 CLR 1 at 152; [1983] HCA 21; Plaintiff S156/2013 v Minister for Immigration and Border Protection (2014) 88 ALJR 690 at 696 [23]; 309 ALR 29 at 35; [2014] HCA 22. 164 Bank of New South Wales v The Commonwealth (1948) 76 CLR 1 at 117, 186; Coleman v Power (2004) 220 CLR 1 at 21 [3], 68 [158]; [2004] HCA 39. 165 Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Ame (2005) 222 CLR 439 at 464-465 [56]; [2005] HCA 36. 166 Abraham, The Judicial Process, 7th ed (1998) at 403-405. In this regard, the circumstance that a person may have standing to mount a challenge to the validity of a law does not mean that the Court must ignore the possibility that its decision might pre-empt attempts by other persons, more immediately and directly affected by the law, to seek relief based upon a narrower interpretation of the operation and effect of the Act. The relatively liberal rules which prevail in Australia167 as to the standing necessary to challenge the validity of legislation may give rise to proceedings in which certain arguments are not advanced, notwithstanding that such arguments could conceivably be advanced by individuals with a more immediate or concrete interest in the operation of the legislation. A plaintiff who chooses to pursue a strategy of invalidation of a statute may be disposed to assert that the challenged statute has an expansive operation in order to optimise the prospect that it will be held to have overreached constitutional limits. That may mean that arguments available to other persons affected by the statute, whose interests would be advanced in a practical way by a narrower interpretation of the statute, are pre-empted, without being heard, in the single-minded pursuit by the plaintiff of the constitutional issue. It may well be that in a setting of greater "concrete adverseness which sharpens the presentation of issues"168 than obtains in the present case, a stronger focus would be brought to bear upon the true operation and effect of Div 4AA than the plaintiffs brought in this case. For example, a person detained under Div 4AA might wish, in a claim for damages for false imprisonment, to plead the absence of investigation by the police of the strength of the case against him or her while in detention as demonstrating that the detention was not for the purposes of investigating an offence. If the true operation of s 133AB is confined to detention for that purpose by its relationship with s 137(2) of the Act, that detention would be beyond the true purpose of the provision. In such a case, the detainee could be expected to urge the narrow view of the operation of Div 4AA, given that it would otherwise be said to interfere with basic common 167 Australian Conservation Foundation v The Commonwealth (1980) 146 CLR 493 at 530; [1980] HCA 53; Croome v Tasmania (1997) 191 CLR 119 at 127, 137; [1997] HCA 5. United States jurisprudence has been more restrictive in its approach to standing: United States v Students Challenging Regulatory Agency Procedures 412 US 669 at 686-687 (1973); Valley Forge Christian College v Americans United for Separation of Church and State Inc 454 US 464 at 472-473 (1982); Lujan v Defenders of Wildlife 504 US 555 at 560-561 (1992); Steel Co v Citizens for a Better Environment 523 US 83 (1998). See also Sunstein, "What's Standing after Lujan? Of Citizen Suits, 'Injuries', and Article III", (1992) 91 Michigan Law Review 163. 168 Baker v Carr 369 US 186 at 204 (1962) cited in Kuczborski v Queensland (2014) 89 ALJR 59 at 96 [207]; 314 ALR 528 at 574; [2014] HCA 46. law freedoms169. Such a case would be in salutary contrast to the circumstances of the present case, where the plaintiffs have no interest in urging a narrow, rather than an expansive, view of the operation of s 133AB170. In this regard, it may be noted that the second plaintiff claims damages for false imprisonment, but only on the basis that s 133AB of the Act is invalid, not on the basis that, on its true operation in the circumstances, it did not authorise her detention for the whole of the period for which she was in fact detained. The defendant advanced a narrow view of the operation of Div 4AA, upon which the detention for which it provides was said to be limited to detention for the purpose of investigating whether to pursue a charge by way of an infringement notice171. That the defendant took this stance is not surprising: a party in whose interest it is to defend the constitutional validity of the legislation will naturally be disposed to accept, or indeed to urge, a narrow view of the operation of the legislation in order to optimise the prospects that it will be held to be valid. In the course of later proceedings to enforce the statute, that same party might be disposed to urge a more expansive view. For these reasons, this case is not an ideal vehicle for the resolution of the difficulties of construction which attend the operation of Div 4AA. Those difficulties are compounded by the paucity of agreed facts which might illuminate the operation and effect of the impugned law172. On the other hand, as already noted, the constitutional arguments which the plaintiffs advanced do not involve any substantial difficulty. Accordingly, in my respectful opinion, the issue as to the characterisation of the power conferred by Div 4AA would be better left for consideration in a case where its proper construction falls to be resolved in circumstances of greater "concrete adverseness" than obtain here. I turn then, without further ado, to a consideration of the constitutional issues. 169 Kuczborski v Queensland (2014) 89 ALJR 59 at 96 [207]; 314 ALR 528 at 574. 170 Kuczborski v Queensland (2014) 89 ALJR 59 at 96 [207]; 314 ALR 528 at 574. 171 cf Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 28. 172 D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at 74-75 [226]-[230]; [2005] HCA 12 applying X (Minors) v Bedfordshire County Council [1995] 2 AC 633 at 694; Wurridjal v The Commonwealth (2009) 237 CLR 309 at 416 [279]; [2009] HCA 2. Section 122 and Ch III of the Constitution Section 122 of the Constitution empowers the Commonwealth Parliament to make laws for the government of Territories. It is relevantly in the following terms: "The Parliament may make laws for the government of any territory surrendered by any State to and accepted by the Commonwealth, or of any territory placed by the Queen under the authority of and accepted by the Commonwealth, or otherwise acquired by the Commonwealth". The power of the Legislative Assembly of the Northern Territory to make laws for the peace, order and good government of the Territory was conferred by s 6 of the Self-Government Act, which was, in turn, enacted by the Commonwealth Parliament pursuant to s 122 of the Constitution. The plaintiffs argued that the scope of the law-making power conferred on the Commonwealth Parliament by s 122 is limited by the separation of powers effected by Ch III of the Constitution. As a result, so it was said, the legislative power of the Legislative Assembly of the Northern Territory, created under s 122 by the Commonwealth Parliament in the Self-Government Act, is confined in the same way. The plaintiffs submitted that this is the case because the separation of powers at the Commonwealth level somehow percolates down to the Territories through the exercise of the power conferred by s 122. To explain how this occurred the plaintiffs invoked the metaphor that "the stream cannot rise above its source", the point conveyed being that the Commonwealth Parliament cannot grant legislative power greater than that which it possesses. The metaphor is of little assistance in resolving the issue before the Court. Metaphors may have considerable rhetorical impact; but they are no substitute for legal analysis. For example, as Ms Younan of counsel (who appeared for the Attorney-General of the Australian Capital Territory) pointed out, if the Northern Territory were admitted to Statehood by the Commonwealth under s 121 of the Constitution, it would then, like the existing States, be unaffected by the Commonwealth would undoubtedly grant a power "greater", as the plaintiffs' argument would have it, than it possesses itself. the separation of powers. In such circumstances, It would seem that the metaphor that "the stream cannot rise above its source" was first deployed in discussion of the Constitution by Griffith CJ in Heiner v Scott173 to illustrate the point that the incidental power in s 51(xxxix) of 173 (1914) 19 CLR 381 at 393; [1914] HCA 82. the Constitution ("the stream") cannot expand the scope of substantive legislative powers conferred by the other placita of s 51 ("the source"). The use of the stream and source metaphor does not assist in this case because it does not aid an understanding of the nature of power conferred by s 122 of the Constitution, much less explain why it is that s 122, rather than the Legislative Assembly of the Northern Territory, is the source of the power of adjudication exercised by the courts and tribunals of the Northern Territory. There is no good reason to think that the power of the Legislative Assembly to make laws for the peace, order and good government of the Northern Territory is a facsimile of the legislative power of the Commonwealth Parliament conferred by s 122 of the Constitution. Indeed, the plaintiffs' argument that the creation under s 122 of the Constitution of a legislative body carries with it the constraints on Commonwealth legislative power contained in Ch III is contrary to this Court's decision in Kruger v The Commonwealth174. The plaintiffs invited this Court to reconsider that decision. That invitation should not be accepted. While it is the paramount duty of a Justice of this Court to give effect to the Constitution rather than to earlier interpretations of it175, the essential constitutional values of certainty, continuity and stability require that, when questions as to the effect of the Constitution have been resolved by determination by this Court, and that determination has helped to shape the life of the nation176, those questions should not be reopened for no better reason than to allow the re-agitation of arguments which did not prevail in the earlier decision, and which have not, since their rejection, taken on new and compelling force from the experience of the nation and the insights generated by that experience177. 174 (1997) 190 CLR 1 esp at 41-44, 53-58, 62, 141-142, 176; [1997] HCA 27. 175 The Tramways Case [No 1] (1914) 18 CLR 54 at 70; [1914] HCA 15; Wurridjal v The Commonwealth (2009) 237 CLR 309 at 350-351 [66]. 176 See Victoria v The Commonwealth (1971) 122 CLR 353 at 396-397. See also Bryce, The American Commonwealth, (1888), vol 1 at 365-366. 177 Australian Agricultural Co v Federated Engine-Drivers and Firemen's Association of Australasia (1913) 17 CLR 261 at 278-279; [1913] HCA 41; Queensland v The Commonwealth (1977) 139 CLR 585 at 593, 599, 602, 621-630; [1977] HCA 60; Wurridjal v The Commonwealth (2009) 237 CLR 309 at 352-353 [70]-[71], 388 [189]. See also John v Federal Commissioner of Taxation (1989) 166 CLR 417 at 438-439; [1989] HCA 5; Williams v The Commonwealth (No 2) (2014) 88 ALJR 701 at 713 [58]-[60]; 309 ALR 41 at 54-55; [2014] HCA 23. In Kruger, the arguments for and against the plaintiffs' contention in this case were fully canvassed in the reasons of the members of the Court. It fell to the Court to resolve those arguments, and that resolution settled the issue. The plaintiffs' argument for the reopening of the issue settled in Kruger did not go beyond pointing to dicta in the reasons of the dissenting Justices in Kruger178; those dicta represent disparate lines of argument which have never, in the history of the federation, commanded the assent of a majority of the Court. With all respect to those who propounded those views, they are no more persuasive now than when they failed to carry the day on earlier occasions. Similarly, there was little point in relying, as the plaintiffs did, upon the considerations adverted to in Kruger by Gummow J which tended to favour a view of s 122 different from the settled view; Gummow J himself expressly accepted that "the present state of the authorities" precluded acceptance of a submission that179: "laws of the Commonwealth … supported by s 122, must comply with the doctrine of the separation of powers found in Ch III of the Constitution." In addition, the powerful considerations of constitutional text and structure which support the decision of the majority in Kruger had been summarised in the judgment of Kitto J in Spratt v Hermes180, which was referred to with approval by Brennan CJ in Kruger181. Kitto J had said: "[I]t has been the doctrine of this Court for fifty years, consistently maintained notwithstanding criticism, that Ch III is directed to a limited topic and accordingly has a limited application. The doctrine arises from a consideration of the framework of the Constitution and from many indications, to be found by working through the Constitution Act (63 and 64 Vict c 12) and the Constitution itself, that the first five Chapters of the Constitution belong to a special universe of discourse, namely that of the creation and the working of a federation of States, with all the safeguards, inducements, checks and balances that had to be negotiated and carefully expressed in order to secure the assent of the peoples of the several Colonies, with their divers interests, sentiments, prejudices, ambitions and apprehensions, to unite in the federation. When Ch VI is reached, and it is found that s 122 gives the Parliament a general power to make laws for the 178 (1997) 190 CLR 1 at 80-84, 118-121. 179 (1997) 190 CLR 1 at 176. 180 (1965) 114 CLR 226 at 250; [1965] HCA 66. 181 (1997) 190 CLR 1 at 44. government of any territory surrendered by any State to and accepted by the Commonwealth, or of any territory placed under the authority of the Commonwealth or otherwise acquired by it, a change to a fundamentally different topic is perceived. The change is from provisions for the self-government of the new federal polity to a provision for the government by that polity of any community which comes under its authority while not being 'a part of the Commonwealth'182." These considerations of constitutional text and structure securely undergird the Court's decision in Kruger. In contrast, the arguments of the plaintiffs appeal to a vague notion of symmetry as requiring that the power exercised by the courts of the Northern Territory be subject to the same limits as that exercised by the courts of the Commonwealth; but this line of argument fails to recognise that the governmental institutions of the Territories have never been thought to be miniature versions of their Commonwealth counterparts. The Territories are dependencies of the Commonwealth, not small-scale versions of it, or participants in the federal compact between the Commonwealth and the States183. A wide range of Territories may be administered by the Commonwealth under s 122. No distinction is made between Territories which are internal and those which are external. They may be remote and sparsely populated island communities, or regions of uncertain political stability. The notion that the arrangements for the government of each of such disparate dependencies must mirror those applicable to the Commonwealth has nothing to commend it. It is at odds with the long-accepted understanding that s 122 is a source of power to be exercised by the Commonwealth with all the flexibility necessary to deal with the particular needs of Territories with different political circumstances184. The plaintiffs' appeal to the notion of symmetry derives no support from authority; that is not surprising given that the idea derives no support from the text or structure of the Constitution. In addition, it is well settled that the separation of powers effected at the level of the Commonwealth by Ch III of the Constitution does not require the 182 cf Harrison Moore, The Constitution of the Commonwealth of Australia, 2nd ed 183 R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 290; [1956] HCA 10; Attorney-General (Cth) v The Queen (1957) 95 CLR 529 at 545; [1957] AC 288 at 320. 184 R v Bernasconi (1915) 19 CLR 629 at 637-638; [1915] HCA 13; Kruger v The Commonwealth (1997) 190 CLR 1 at 42-43. separation of powers at the level of the States185. The plaintiffs sought to appeal to the desirability of securing the rights of individuals against executive detention186, but their argument did not explain why residents of the Territories should be in a better position in relation to immunity against executive detention than residents of the States. The absence of such an explanation is a telling deficit in the plaintiffs' argument, especially given that greater flexibility would be expected in relation to the governmental arrangements thought to be expedient for Territories (which have not yet reached the political maturity recognised by, and reflected in, the grant of Statehood) than in relation to the States, which are, unlike the Territories187, participants in the federal compact established by the Constitution. Finally on this point, the disruption and instability which would be caused by reopening Kruger militates powerfully against acceptance of the plaintiffs' invitation to reopen it. The Legislative Assembly of the Northern Territory has created a number of courts and tribunals. Some of them exercise both judicial and non-judicial functions, and some of them do not conform to the requirements for appointment to judicial office found in s 72 of the Constitution188. To hold 185 Gilbertson v South Australia [1978] AC 772 at 783; Building Construction Employees and Builders' Labourers Federation of New South Wales v Minister for Industrial Relations (1986) 7 NSWLR 372 at 381, 401, 409-412; Mabo v Queensland (1988) 166 CLR 186 at 202; [1988] HCA 69; Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 96-98, 99-105, 111-119; H A Bachrach Pty Ltd v Queensland (1998) 195 CLR 547 at 561-562 [13]-[14]; [1998] HCA 54. 186 cf Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 27-29. 187 R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 290; Attorney-General (Cth) v The Queen (1957) 95 CLR 529 at 545; [1957] AC 288 at 188 Courts include the Local Court (see the Local Court Act (NT), the Small Claims Act (NT) and the Care and Protection of Children Act (NT)), the Court of Summary Jurisdiction (see the Justices Act (NT), Pt IV, Div 1), the Work Health Court (see the Work Health Administration Act (NT) and the Return to Work Act (NT)) and the Youth Justice Court (see the Youth Justice Act (NT)). Tribunals include the Alcohol Mandatory Treatment Tribunal (see the Alcohol Mandatory Treatment Act (NT)), the Northern Territory Civil and Administrative Tribunal (see the Northern Territory Civil and Administrative Tribunal Act (NT)), the Lands, Planning and Mining Tribunal (see the former Lands, Planning and Mining Tribunal Act (NT)), the Northern Territory Licensing Commission (see the former (Footnote continues on next page) that the legislative power of the Legislative Assembly of the Northern Territory is limited by Ch III of the Constitution would invalidate decisions of the Northern Territory courts and tribunals which exercise both judicial and executive functions and for which the terms of appointment do not conform to s 72 of the Constitution189. In any event, the Territory's courts and tribunals were created, not by the Commonwealth Parliament exercising the power conferred by s 122 of the Constitution, but by the direct exercise of the legislative power of the Legislative Assembly of the Northern Territory. In Capital Duplicators Pty Ltd v Australian Capital Territory190, it was held by majority that s 122 of the Constitution allowed the Commonwealth Parliament to create a legislature for a Territory empowered to make laws for the peace, order and good government of the Territory. As Barwick CJ had said in Spratt v Hermes191, the power conferred by s 122 is a legislative power "as large and universal … as can be granted." The cases upon which the majority in Capital Duplicators based their conclusion were cases which emphasised the plenary and independent character of the law-making power of self-governing colonies established by the Imperial Parliament at Westminster192. The enactment of the Self-Government Act did not effect a delegation of the law-making power of the Commonwealth to the Legislative Assembly of the Northern Territory. The law-making power conferred by the Self-Government Act is an independent and unqualified law-making power. The Northern Territory Legislative Assembly is not responsible to the Commonwealth or to the Commonwealth Parliament for the manner in which its legislative power is exercised. In this regard, in Capital Duplicators193, Brennan, Deane and Toohey JJ observed, with the concurrence of Gaudron J194, that the Legislative Assembly of the Australian Capital Territory "has been erected to exercise not Northern Territory Licensing Commission Act (NT) and the Liquor Act (NT)) and the Agents Licensing Board (see the Agents Licensing Act (NT)). 189 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 66-67. 190 (1992) 177 CLR 248 esp at 280-283, 284; [1992] HCA 51. 191 (1965) 114 CLR 226 at 242. 192 (1992) 177 CLR 248 at 280-283. 193 (1992) 177 CLR 248 at 282. 194 (1992) 177 CLR 248 at 284. the [Commonwealth] Parliament's powers but its own". And in Svikart v Stewart195, this Court confirmed that the Territory legislature: "must be regarded as a body separate from the Commonwealth Parliament, so that the exercise of its legislative power, although derived from the Commonwealth Parliament, is not an exercise of the Parliament's legislative power." The judicial power of the Commonwealth The plaintiffs put their argument in relation to the separation of powers in another way, arguing that the courts of the Northern Territory are "always and only" exercising federal jurisdiction, either directly when applying federal the legislation, or Self-Government Act and, ultimately, from s 122. This argument cannot be sustained. indirectly when applying that derive from laws The courts of the Northern Territory are not federal courts created by the Commonwealth Parliament within the meaning of s 71 of the Constitution196, and their enforcement of Div 4AA does not involve any exercise of federal jurisdiction invested pursuant to a law made by the Commonwealth Parliament under s 122 of the Constitution. Northern Territory courts can and do exercise the judicial power of the Commonwealth pursuant to laws made by the Commonwealth Parliament197, but that is not all they do. It is well settled that Territory courts are not "such … federal courts as the Parliament creates" within s 71 of the Constitution, nor courts "created by the Parliament" within s 72 of the Constitution. The courts of the Northern Territory exercise the judicial power of 195 (1994) 181 CLR 548 at 562; [1994] HCA 62. See also Re Governor, Goulburn Correctional Centre; Ex parte Eastman (1999) 200 CLR 322 at 352-353 [79]-[80]; [1999] HCA 44. 196 Spratt v Hermes (1965) 114 CLR 226; Capital TV and Appliances Pty Ltd v Falconer (1971) 125 CLR 591; [1971] HCA 10; Re Governor, Goulburn Correctional Centre; Ex parte Eastman (1999) 200 CLR 322 at 332-333 [9], 340-341 [35]-[37], 348 [63], 349 [67], 353 [81]; North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146 at 163-164 [31]; [2004] HCA 31. 197 Northern Territory v GPAO (1999) 196 CLR 553 at 590-591 [88]-[89], 605 [131]; [1999] HCA 8; Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 565 [82], 595-596 [175], 636 [312]; [1999] HCA 27; Re Governor, Goulburn Correctional Centre; Ex parte Eastman (1999) 200 CLR 322 at 339-340 [33], 347-348 [62]-[63], 348-349 [66]; Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at 363 [81]; [2000] HCA 63; North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146 at 163 [28]-[30]. the Commonwealth only to the extent that it is expressly vested in them by the Commonwealth Parliament pursuant to a law made under s 122 of the Constitution. The plaintiffs' argument that all judicial power exercised in the Northern Territory is necessarily the judicial power of the Commonwealth cannot stand with the decisions of this Court in Spratt v Hermes198 and Capital TV and Appliances Pty Ltd v Falconer199. In the former, it was held in relation to the Australian Capital Territory that the requirements of s 72 of the Constitution for the appointment of the federal judiciary do not limit the Commonwealth Parliament's power to make laws under s 122 for judicial appointments in the Territory. In the latter it was held that the Supreme Court of the Australian Capital Territory is not a "federal court" or a "court exercising federal jurisdiction". The plaintiffs sought leave to reopen these cases. That leave should not be granted. The authority of Spratt v Hermes and Capital TV and Appliances Pty Ltd v Falconer is of long standing, and the apparatus of government of the Northern Territory and the Australian Capital Territory have been established on the foundation for which those decisions stand as authority. Great instability would be occasioned if they were now to be set aside. A moment's reflection upon the ramifications of the plaintiffs' argument that the Legislative Assembly of the Northern Territory had purported the Commonwealth in the courts of the Northern Territory suffices to illustrate the extent of the disruption which would ensue from its acceptance. judicial power of to vest the Only the Commonwealth Parliament can invest the judicial power of the Commonwealth in a court. Section 71 of the Constitution provides that the judicial power of the Commonwealth shall be vested in this Court, and in such other federal courts as the Parliament creates, and in such other courts as it invests with federal jurisdiction. It denies all possibility that some other organ might effect the vesting of the judicial power of the Commonwealth, or that such power might be vested in a court other than those specified. In R v Kirby; Ex parte Boilermakers' Society of Australia200, Dixon CJ, McTiernan, Fullagar and "[T]o study Ch III is to see at once that it is an exhaustive statement of the manner in which the judicial power of the Commonwealth is or may be vested. It is true that it is expressed in the affirmative but its very nature 198 (1965) 114 CLR 226 esp at 242-243, 251, 260-261, 266, 278, 282. 199 (1971) 125 CLR 591. 200 (1956) 94 CLR 254 at 270. puts out of question the possibility that the legislature may be at liberty to turn away from Ch III to any other source of power when it makes a law giving judicial power exercisable within the Federal Commonwealth of Australia." This passage emphasises the powerful negative implication in Ch III of the Constitution. The exclusive provision made by s 71 of the Constitution, and the safeguards afforded by s 72, are essential appurtenances of the federal compact, in that they assure the States, as participants in that compact, that the adjudication by the federal judiciary of controversies affecting their interests will not be influenced by the political branches of the Commonwealth government201. The plaintiffs did not identify any statutory language used by the Legislative Assembly of the Northern Territory to create the Territory's courts and tribunals which might suggest that it was purporting to vest the judicial power of the Commonwealth in any of those courts or tribunals. Rather, the plaintiffs' contention was that such a vesting was unavoidable because the judicial power of the Northern Territory is an anabranch of the stream of judicial power flowing from the Constitution. And so, like Molière's Bourgeois Gentilhomme, who spoke prose without knowing it, the Northern Territory Legislative Assembly seems to have vested the judicial power of the Commonwealth in the Territory's courts without knowing that it was doing so. Once again, the dangers of reasoning by metaphor become apparent. If it were indeed the case that the Northern Territory Legislative Assembly had purported to vest the judicial power of the Commonwealth in the courts and tribunals of the Territory, the attempt would have been futile. No federal jurisdiction at all could have been validly vested in those courts and tribunals, and their judgments or orders would be void or susceptible to being avoided. the legislative power of In truth, of course, it was the legislative power of the Northern Territory Legislative Assembly, not the Commonwealth Parliament, which was exercised in enacting Div 4AA and the power which was conferred thereby, whatever its true character, was not the judicial power of the Commonwealth, but a power within the grant of the Legislative Assembly. As noted above, the Legislative Assembly was established by the Commonwealth Parliament to exercise not the legislative power of the Commonwealth Parliament, but its own202. 201 R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 202 Capital Duplicators Pty Ltd v Australian Capital Territory (1992) 177 CLR 248 at Finally, and for the sake of completeness, it may be said that the plaintiffs' argument to reopen Spratt v Hermes and Capital TV and Appliances Pty Ltd v Falconer gains no force by referring, as the plaintiffs did, to the observation by Dixon CJ, McTiernan, Fullagar and Kitto JJ in Boilermakers203 that: "It would have been simple enough to follow the words of s 122 and of ss 71, 73 and 76(ii) and to hold that the courts and laws of a Territory were federal courts and laws made by the Parliament." Before their Honours made this observation, they acknowledged204 that: "It has been decided that the courts of the Territories falling under s 122 are not governed by the judicature provisions" of Ch III. And after the observation on which the plaintiffs sought to rely, their Honours went on to explain205 that "an entirely different interpretation has been adopted", being an interpretation which "brings its own difficulties", but which "finds support in the course adopted in the United States in relation to the analogous" provisions of the United States Constitution. Read in its context, the passage on which the plaintiffs sought to rely was not opening up a path different from that which had been taken; rather, it was recording their Honours' acknowledgment that that path had been decisively closed206. Kable It is because the separation of powers arguments cannot avail the plaintiffs that they were driven to rely upon the principle in Kable, which has been applied to the Territories as well as the States207. As was said in Attorney-General (NT) v Emmerson208, Kable stands for the proposition that in relation to courts which may exercise federal jurisdiction: 203 (1956) 94 CLR 254 at 290. 204 (1956) 94 CLR 254 at 289. 205 (1956) 94 CLR 254 at 290. 206 cf Spratt v Hermes (1965) 114 CLR 226 at 250. 207 North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146 at 163 [28]-[30]; Wainohu v New South Wales (2011) 243 CLR 181 at 228-229 [105]; [2011] HCA 24. 208 (2014) 253 CLR 393 at 424 [40]; [2014] HCA 13. "State legislation which purports to confer upon such a court a power or function which substantially impairs the court's institutional integrity, and which is therefore incompatible with that court's role as a repository of federal jurisdiction, is constitutionally invalid." (footnote omitted) The plaintiffs recognised that the Kable principle is typically concerned with situations where a particular function that is apt to impair the court's institutional integrity has been conferred on a court. It was submitted, however, that the principle extends to situations where the legislative intrusion takes the form of a usurping or undermining of the courts. The plaintiffs relied, in this regard, upon the observation of French CJ in International Finance Trust Co Ltd v New South Wales Crime Commission209 that the institutional integrity of the courts may be impaired by depriving a court of "an important characteristic of judicial power." It must be said immediately that the plaintiffs' contention misconceives the effect of his Honour's statement. French CJ was speaking of laws which directly affect the actual functioning of the courts. Queensland210, Crennan, Kiefel, Gageler and Keane JJ observed that the principle for which Kable stands "depends on the effect of the law upon the functioning of the courts." The Kable principle is concerned to maintain the institutional integrity of institutions vested with federal judicial responsibility. It applies where the impugned legislation purports to enlist the court in the implementation of legislative or executive policies211; or where the impugned legislation purports to require the court, in the exercise of its functions, to depart significantly from the methods and standards which have historically characterised the exercise of judicial power212. Division 4AA invests a power in the executive government of the Northern Territory. It does not operate to "enlist" any court to do the work of the 209 (2009) 240 CLR 319 at 355 [55]; [2009] HCA 49. 210 (2014) 89 ALJR 59 at 99 [231]; 314 ALR 528 at 579. 211 South Australia v Totani (2010) 242 CLR 1 at 52 [82], 67 [149], 92-93 [236], 173 [481]; [2010] HCA 39; Kuczborski v Queensland (2014) 89 ALJR 59 at 88 [140]; 314 ALR 528 at 563. 212 Forge v Australian Securities and Investments Commission (2006) 228 CLR 45 at 76 [63]; [2006] HCA 44; Thomas v Mowbray (2007) 233 CLR 307 at 355 [111]; [2007] HCA 33; International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319 at 353-354 [52]; South Australia v Totani (2010) 242 CLR 1 at 63 [131], 157 [427]; Kuczborski v Queensland (2014) 89 ALJR 59 at 88 [140]; 314 ALR 528 at 563. executive government, much less require it, nor must a court depart from the processes which characterise the judicial process. Division 4AA is not directed at the courts: it does not add to or deprive any court of any function or characteristic of judicial power. It does not direct a court as to the exercise of its functions; in particular, it is not legislation which "prejudges an issue with respect to a particular individual and requires a court to exercise its function accordingly."213 To the extent that the plaintiffs argued that Div 4AA adversely affects the courts by effectively sidelining them in respect of the matters for which it provides, the plaintiffs' argument confuses the Kable principle with the requirements of the constitutional separation of powers at the level of the Commonwealth. Their argument on this point is, in truth, a complaint that functions which ought to be performed by the judiciary are being performed by the executive. That is a complaint about a failure to observe the requirements of the separation of powers. It is not a complaint which engages the Kable principle. The plaintiffs also argued that Div 4AA deprives the courts of the Northern Territory of their supervisory jurisdiction because it denies judicial oversight of the period of detention under s 133AB(2). But to the extent that the powers conferred on the executive government may be exercised unlawfully, judicial remedies for unlawful administrative action are available to those adversely affected by such unlawful action. The plaintiffs' argument here is no stronger than their argument that the powers conferred by Div 4AA cannot lawfully be conferred by the Legislative Assembly of the Northern Territory, and it should be rejected for the same reasons. Conclusion The questions posed by the special case should be answered as follows: Division 4AA of Pt VII of the Police Administration Act (NT) is not invalid, irrespective of whether it confers a power to detain which is penal or punitive in character: it is not beyond the powers of the Legislative Assembly of the Northern Territory under the Northern Territory (Self-Government) Act 1978 (Cth) by reason of the separation of powers enshrined in the Constitution; and 213 Leeth v The Commonwealth (1992) 174 CLR 455 at 469-470 (footnote omitted); [1992] HCA 29; Kuczborski v Queensland (2014) 89 ALJR 59 at 100 [233]-[235]; 314 ALR 528 at 579-580. it does not undermine or interfere with the institutional integrity of the courts of the Northern Territory in a manner contrary to the Constitution. The plaintiffs. The proceeding should be remitted for further directions by a single Justice of this Court. NettleJ 190 NETTLE AND GORDON JJ. This special case raises the question of whether any of the provisions of Div 4AA of Pt VII of the Police Administration Act (NT) are invalid. The Division deals with the powers of members of the Northern Territory Police Force ("police officers") to arrest and take into custody persons in relation to what are called "infringement notice offences". The plaintiffs contended that Div 4AA purports to confer on the executive of the Northern Territory a power to detain that is penal or punitive in nature, which is quintessentially a judicial power. It was submitted that, just as the doctrine of the separation of powers limits the Commonwealth's legislative powers under s 51 of the Constitution such that judicial power cannot be conferred on Commonwealth executive officers, it should be held that the Commonwealth lacks power under s 122 of the Constitution to empower Territory legislatures to confer judicial power on Territory executive officers. It follows, the plaintiffs said, that the Legislative Assembly of the Northern Territory lacked power to enact Div 4AA. In the alternative, the plaintiffs submitted that Div 4AA undermines the institutional integrity of the courts of the Northern Territory by removing or limiting judicial oversight during the period of detention, and thus that the Division is invalid in accordance with the doctrine established in Kable v Director of Public Prosecutions (NSW)214 and subsequent decisions of this Court, including Kirk v Industrial Court (NSW)215. The defendant argued to the contrary that, upon its proper construction, the powers conferred by Div 4AA are not penal or punitive and, therefore, that the question of whether the separation of judicial power mandated by Ch III of the Constitution applies in relation to s 122 does not arise. For the reasons which follow, it should be concluded that, upon the proper construction of Div 4AA, the powers which it confers on police officers are not penal or punitive and they do not detract from the institutional integrity of the Territory courts. Consequently, no question arises as to the scope of s 122 of the Constitution and its relationship with Ch III. The facts and the proceedings The first plaintiff is a company limited by guarantee which provides legal services to Aboriginal and Torres Strait Islander people in the Northern Territory. The second plaintiff is an Indigenous woman who lives in the Northern Territory. 214 (1996) 189 CLR 51; [1996] HCA 24. 215 (2010) 239 CLR 531; [2010] HCA 1. NettleJ On the evening of 19 March 2015, she was arrested by police officers in Katherine and taken into custody, purportedly pursuant to s 133AB(2)(b) of the Police Administration Act. She was held at the Katherine Police Station for approximately 12 hours and was released at 5:20am on 20 March 2015. A police officer issued the second plaintiff with an infringement notice which alleged, first, that she had used obscene or indecent behaviour and, secondly, that she had brought liquor into a restricted area. The notice stated that a fine of $274 was payable to expiate the offences. The plaintiffs commenced proceedings in the original jurisdiction of this Court. The first plaintiff claims, inter alia, a declaration that Div 4AA is invalid. The second plaintiff claims, inter alia, a declaration that, by reason of the invalidity of Div 4AA, her detention on 19 and 20 March 2015 constituted false imprisonment or, alternatively, that it otherwise had no lawful basis. She also claims damages for the imprisonment, which, it is contended, was unlawful. The parties agreed to state questions of law for the opinion of the Full Court in the form of a special case. In brief substance, question 1(a) asks whether Div 4AA is invalid on the ground that it purports to confer a power to detain which is penal or punitive in character and is thus beyond the powers of the Legislative Assembly of the Northern Territory by virtue of the limits imposed on the Commonwealth's legislative power under s 122 of the Constitution by Ch III. Question 1(b) asks whether Div 4AA is invalid because it undermines the institutional integrity of the courts of the Northern Territory. Question 2 deals with costs and question 3 concerns orders to dispose of the balance of the proceeding. The legislative provisions Division 3 of Pt VII of the Police Administration Act, which is comprised of ss 121-127, provides for the arrest of persons suspected of committing, having committed or being about to commit an offence. Sections 121 and 122 provide for the issue of arrest warrants. Section 123 provides for arrest without warrant of a person who a police officer believes on reasonable grounds has committed, is committing or is about to commit an offence. Sections 124 and 126 provide for arrest where a warrant has been issued. Section 125 provides for the arrest of interstate offenders. Section 127 provides for the information which a police officer must give to a person who is arrested. Division 6 of Pt VII, which is comprised of ss 136-138B, provides for a person who has been taken into custody under the Act or any other Act to be brought before a justice or a court. Principally among those provisions, s 137 provides as follows: NettleJ "(1) Without limiting the operation of section 123, but subject to subsections (2) and (3) of this section, a person taken into lawful custody under this or any other Act shall (subject to that Act where taken into custody under another Act) be brought before a justice or a court of competent jurisdiction as soon as is practicable after being taken into custody, unless he or she is sooner granted bail under the Bail Act [(NT)] or is released from custody. (2) Notwithstanding any other law in force in the Territory (including the common law), but subject to subsection (3) a member of the Police Force may, for a reasonable period, continue to hold a person he has taken into lawful custody in custody to enable: the person to be questioned; or investigations to be carried out, to obtain evidence of or in relation to an offence that the member believes on reasonable grounds involves the person, whether or not: it is the offence in respect of which the person was taken into custody; or the offence was committed in the Territory, and the person shall not be granted bail under Part III or section 33 of the Bail Act while so detained, whether or not he or she has been charged with an offence. (3) A member of the Police Force may continue to hold a person under subsection (2) for the purposes of enabling the person to be questioned or investigations to be carried out to obtain evidence of or in relation to: the offence in respect of which the person was taken into custody, only if it is an offence the maximum penalty for which, in the jurisdiction in which it is believed to have been committed, is imprisonment for any period; or an offence that is not the offence in respect of which the person was taken into custody, only if it is an offence the maximum penalty for which, in the jurisdiction in which it is believed to have been committed, is imprisonment for 5 years or more." NettleJ Section 138 directs that, in determining what is a reasonable period for the purposes of s 137(2), a specified range of considerations are to be taken into account and s 138A provides for that time to be extended where the person brought into custody is intoxicated. In 2014, the Act was amended by the Police Administration Amendment Act 2014 (NT). Among other things, it provided for the insertion216 of Div 4AA (ss 133AA-133AC), which is directed to a particular class of offence called an Section 133AA defines an into Pt VII. "infringement notice offence", infringement notice offence as "an offence under another Act for which an infringement notice may be served and which is prescribed for this Division by regulation". By and large, the offences prescribed217 as infringement notice offences are of a relatively minor nature218. Section 133AB provides for the taking into custody of a person whom a police officer has arrested in relation to an infringement notice offence: "(1) This section applies if: a member of the Police Force has arrested a person without a warrant under section 123; and the person was arrested because the member believed on reasonable grounds that the person had committed, was committing or was about to commit, an offence that is an infringement notice offence. The member may take the person into custody and: hold the person for a period up to 4 hours; or if the person is intoxicated – hold the person for a period longer than 4 hours until the member believes on reasonable grounds that the person is no longer intoxicated. The member, or any other member, on the expiry of the period mentioned in subsection (2), may: release the person unconditionally; or 216 Police Administration Amendment Act, s 7. 217 Police Administration Regulations (NT), reg 19A. 218 See, eg, Summary Offences Regulations (NT), regs 3 and 4A. NettleJ release the person and issue the person with an infringement notice in relation to the infringement notice offence; or release the person on bail; or under section 137, bring the person before a justice or court for the infringement notice offence or another offence allegedly committed by the person. For deciding how to deal with the person under subsection (3), the member, or another member, may question the person about the infringement notice offence, or any other offence in relation to which the person is of interest to police." Section 133AC provides, in summary, that a police officer who takes a person into custody under s 133AB must take certain personal identification details from the person and may search the person and take from him or her valuables for safekeeping or contraband for disposal. The issue of an infringement notice engages certain provisions of the Fines and Penalties (Recovery) Act (NT). A person who is issued an infringement notice becomes liable to pay a sum of money specified on the notice219. If the payment is made, the alleged offence is expiated and no further proceedings can be taken in relation to the offence220. Rather than expiating the offence, the person may elect to have the offence dealt with by a court221, and, if a person so elects, proceedings may be commenced in respect of the offence as if the infringement notice had not been issued222. Competing constructions of Div 4AA The plaintiffs argued that, by providing for a person arrested for an infringement notice offence to be detained for a period of up to four hours, s 133AB(2)(a) purports to authorise police officers to detain that person beyond the point where it first becomes practicable to take the person before a justice or court in accordance with s 137(1) and thus purports to confer judicial power on police officers. 219 Fines and Penalties (Recovery) Act, ss 9, 12. 220 Fines and Penalties (Recovery) Act, s 13. 221 Fines and Penalties (Recovery) Act, s 21. 222 Fines and Penalties (Recovery) Act, s 22. NettleJ The defendant contended that, upon its proper construction, Div 4AA is to be read as subject to Div 6 and, therefore, that the period of up to four hours specified in s 133AB(2)(a) is to be read as subject to the requirement under s 137(1) that a person arrested for an offence under s 123 be taken before a justice or court as soon as practicable after being taken into custody unless sooner released or granted bail. The operation of ss 133AB and 137 The starting point for the engagement of ss 133AB and 137 is an arrest under s 123 upon a belief on reasonable grounds that a person has committed, is committing or is about to commit "an offence". Upon arrest, s 123 empowers police officers to take the person into custody. The person is thus "taken into lawful custody under this ... Act" within the meaning of s 137(1). Section 137(1) imposes a duty on police officers in respect of a person taken into lawful custody under the Act: the person "shall ... be brought before a justice or a court of competent jurisdiction as soon as is practicable after being taken into custody, unless he or she is sooner granted bail ... or is released from custody". Section 133AB "applies if" the offence is an infringement notice offence223. Where it applies, the member "may take the person into custody and ... hold the person for a period up to 4 hours"224. Section 133AB(3) provides that, "on the expiry of [that] period", the person "may" be dealt with in accordance with one of the four options provided in pars (a)-(d)225. In that context, may in s 133AB(2)(a) is permissive, in the sense of conferring a power to hold the person in custody, as opposed to imposing an obligation to do so. In contrast, may in s 133AB(3) has the purpose of imposing an obligation on police officers to adopt one of the four options identified in s 133AB(3)(a)-(d) and so should be read as must226. 223 Police Administration Act, s 133AB(1)(b). 224 Police Administration Act, s 133AB(2)(a) (emphasis added). 225 See above at [201]. 226 Julius v Lord Bishop of Oxford (1880) 5 App Cas 214 at 222-223 per Earl Cairns LC; Finance Facilities Pty Ltd v Federal Commissioner of Taxation (1971) 127 CLR 106 at 134-135 per Windeyer J; [1971] HCA 12; cf Ward v Williams (1955) 92 CLR 496; [1955] HCA 4. NettleJ Consequently, the effect of s 133AB(2)-(3) is that, if a person is arrested under s 123 and taken into custody on suspicion of committing, having committed, or being about to commit an infringement notice offence, s 133AB "applies"; the person is in "lawful custody under this ... Act" within the meaning of s 137(1); and s 133AB(3) requires that, upon the expiry of the period of up to four hours, the person be released unconditionally or with an infringement notice, granted bail, or brought before a justice or court under s 137. The question is whether the duty under s 137(1) (to bring the person before a justice or court "as soon as is practicable after being taken into custody, unless he or she is sooner granted bail ... or is released from custody") is suspended or deferred by the exercise of the power to hold the person under s 133AB(2); or, conversely, whether the power to hold the person under s 133AB(2) is subject to the duty in s 137(1) to bring the person before a justice or court as soon as is practicable after being taken into custody unless he or she is sooner granted bail or released. Constructional choices There are two constructional choices. The first is to read the stipulation in s 133AB(2)(a) of "a period up to 4 hours" as in effect suspending or overriding, until the expiry of the period of up to four hours, the duty under s 137(1). So to construe the provision would mean that, despite s 137, a person arrested under s 123 for an infringement notice offence could be held for up to four hours irrespective of whether it were practicable to bring the person before a justice or court (or release the person) within that period before being dealt with in accordance with s 133AB(3). The second possible construction is to read the power to "hold the person" in s 133AB(2) as a power which arises simultaneously with the duty imposed under s 137(1). The emphasis is on the period of "up to 4 hours" as imposing a time limit of up to four hours on the exercise of the duty under s 137(1). On that construction, Div 4AA operates as a specific elaboration of the general powers and duties under s 137 for application to arrest for infringement notice offences with an outer limit on custody of up to four hours. Preferable construction There are a number of reasons to prefer the second construction. First, on the second construction, the four options provided for in s 133AB(3) for dealing with a person arrested in respect of an infringement notice offence are capable of operating harmoniously, and simultaneously, with s 137(1). As was earlier noted, s 137(1) provides that a person shall be taken before a justice or court "unless he or she is sooner granted bail under the Bail Act or is NettleJ released from custody". On the second construction, s 133AB(3)(d) operates as a direct reference to taking the person before a justice or court under s 137. The reference to bail in s 133AB(3)(c) is a reference to a grant of bail under the Bail Act. Paragraphs (a)-(b) of s 133AB(3) elaborate on "release from custody" by specifying that the release can be either unconditional or upon issue of an infringement notice. The words "on the expiry of the period mentioned in subsection (2)", namely "up to 4 hours", referred to in s 133AB(3) serve to emphasise that the four options provided for in s 133AB(3)(a)-(d) are enlivened at one of three possible points in time: the passing of four hours; any earlier moment as required to discharge the duty in pars (a)-(d); or, where the person is intoxicated, the time when the police officer believes on reasonable grounds that the person is no longer intoxicated227. Secondly, as a matter of syntax, the terms of the stipulation of a period of "up to" four hours in s 133AB(2)(a) are redolent of an outer limit of four hours. There would be little point in the Legislative Assembly providing that a person may be detained for "up to 4 hours", as opposed to for "four hours", unless the purpose of so providing were to ensure that action be taken within that period as opposed to waiting until the end of it. Thirdly, as already noted, s 133AB(3)(d) expressly provides that, if a person arrested under s 123 for an infringement notice offence is brought before a justice or court, the person is to be so brought "under section 137"; and s 137(1) requires that the person be so brought "as soon as is practicable" unless sooner granted bail or released. If the purpose of the stipulation of a period of "up to 4 hours" in s 133AB(2)(a) were to override the requirement in s 137 that the person be brought before a justice or court "as soon as is practicable", there would be no point in s 133AB(3)(d) expressly providing for the person to be brought before a justice or court "under section 137". Unless those words import the requirement in s 137(1) to act as soon as practicable, they add nothing to the remaining words of s 133AB(3)(d). Fourthly, an infringement notice offence is by definition such a relatively minor offence that it is considered capable of expiation by means of the infringement notice procedure provided for under the Fines and Penalties (Recovery) Act228. More precisely, it is the kind of offence which the Legislative Assembly has determined does not necessitate a custodial disposition. It is, therefore, logical to expect that, where a person is arrested for such an offence, he or she will not ordinarily be detained for any more than a relatively short 227 Police Administration Act, s 133AB(2)(b). 228 See above at [203]. NettleJ period of time. It makes sense, therefore, that the purpose of the stipulation of a period of up to four hours is to ensure that a person who is arrested for an infringement notice offence is released, granted bail or brought before a justice or court as soon as practicable, but in any event within four hours. Of course, if, while the person is in custody, the police form the belief on reasonable grounds that the person had been involved in a more serious offence of the kind provided for in s 137(3), the person may then be detained for a longer period in accordance with s 137(2). But that does not detract from the imperative that, otherwise, a person arrested under s 123 for an infringement notice offence must be released, bailed or brought before a justice or court as soon as practicable. Fifthly, if the purpose of the stipulation of a period of up to four hours were to override the duty in s 137(1), it would have the irrational and capricious consequence229 that a person arrested under s 123 on suspicion of committing, having committed or being about to commit a very serious offence – say, for example, homicide or rape – must be brought before a justice or court under s 137(1) as soon as practicable unless sooner granted bail or released, but a person arrested under s 123 for a relatively trivial infringement notice offence – say, for example, neglecting to keep the person's yard clean230 – could be detained for longer than the time when it becomes practicable to grant the person bail, release the person unconditionally or with an infringement notice, or bring the person before a justice or court. An intention to produce such an irrational and capricious dichotomy is not lightly to be attributed to a legislature, especially where it concerns the liberty of the subject231; and still less so where, according to the plain and ordinary meaning of the stipulation of the period of up to four hours, it is capable of operating as an outer limit in the manner already described232. As Wilson and Dawson JJ said in Williams v The Queen, questions of statutory construction regarding the powers of police to keep a person in custody233: 229 Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 321 per Mason and Wilson JJ; [1981] HCA 26. 230 Summary Offences Act (NT), s 78; Summary Offences Regulations, reg 3. 231 See Donaldson v Broomby (1982) 40 ALR 525 at 525-526 per Deane J. 232 See Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom (2006) 228 CLR 566 at 585 [48] per Gummow and Hayne JJ; [2006] HCA 50. 233 (1986) 161 CLR 278 at 304; [1986] HCA 88. NettleJ "must necessarily be considered against the background of the common law which provides in this instance the spirit if not the letter of the law. The presumption which requires clear words to override fundamental common law principles has an obvious application in a matter as basic as the liberty of the person". Here, s 137(1) reflects the basic common law tenet that a person must be taken before a court as soon as reasonably practicable following arrest. A statute that departs from that fundamental position would need to be expressed in unmistakably clear terms. Sixthly, s 16(2) of the Bail Act provides that, within the time for bringing a person before a justice or court under s 137(1), and so, in effect, as soon as practicable after arrest, the police may inform the arrested person of his or her right to apply for bail; and s 16(3) provides that, as soon as practicable after a person becomes entitled to apply for bail, and therefore, in effect, as soon as practicable after arrest, a police officer must determine whether bail should be granted. If the stipulation of a period of up to four hours in s 133AB(2)(a) meant that police could detain a person arrested under s 123 for an infringement notice offence beyond the point at which it became practicable to make a determination to either grant or refuse bail, it would be in direct conflict with s 16(2) of the Bail Act. It is not to be assumed that s 133AB(2)(a) was intended to contradict s 16(2) of the Bail Act or to amend it. Evidently, it was not considered that the two provisions would conflict. There is no suggestion of such a conflict in the Police Administration Amendment Act or in any of the extrinsic materials. To the contrary, in the course of the debates in the Legislative Assembly which preceded the enactment of s 133AB(2)(a)234, reference was made to the right of a person under s 33(3)(b) of the Bail Act to apply to a magistrate or justice after the expiration of four hours following charge for review of a police officer's failure or refusal to grant bail as soon as practicable. There was no suggestion of curtailing or restricting that right. The debate rather suggests that the period of up to four hours in s 133AB(2)(a) was chosen because it aligned with the period specified by s 33(3)(b) of the Bail Act. Seventhly, if s 133AB(2)(a) were taken as overriding s 16(2) of the Bail Act in its application to a person arrested under s 123 for an infringement notice offence, it would have the added irrational and capricious consequence that a person arrested for a serious offence – again say, for example, homicide or 234 Northern Territory, Legislative Assembly, Parliamentary Debates (Hansard), 26 November 2014. NettleJ rape – would have the right to make an application for bail and have it considered as soon as practicable after arrest, whereas a person arrested under s 123 for a relatively trivial infringement notice offence would have no right to apply for bail or to have his or her application considered until the expiration of four hours following arrest. As Fullagar J stated in Butler v Attorney-General (Vict)235, every attempt should be made to reconcile competing statutes and it is only where they are irreconcilable that they should be held to conflict. Here, s 133AB(2)(a) of the Police Administration Act and s 16(2) of the Bail Act can be reconciled in the manner already explained by reading the stipulation of a period of up to four hours in s 133AB(2)(a) as imposing an outer limit on the time for which a person arrested under s 123 for an infringement notice offence may be detained, and thus as being without prejudice to the requirement specified in s 137(1) that the person must be released, granted bail or taken before a justice or court as soon as practicable. The plaintiffs contended that so to construe Div 4AA would render the Division inutile. But plainly that is not so. On the second construction, Div 4AA serves the important function of clarifying that an infringement notice may be issued where a person is released following arrest, and it caps the period of detention in relation to an infringement notice offence at four hours. That statutory purpose of Div 4AA is found in its text236. It is not to be displaced by what was said by the Attorney-General for the Northern Territory when the Bill for its enactment was introduced into the Legislative Assembly of the Northern Territory237, or in the subsequent debates in the Legislative Assembly238. The words of the Minister cannot be substituted for the text of the 235 (1961) 106 CLR 268 at 276; [1961] HCA 32. See also Ferdinands v Commissioner for Public Employment (2006) 225 CLR 130 at 145-146 [47]-[49] per Gummow and Hayne JJ; [2006] HCA 5. 236 Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 518; [1987] HCA 12; Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252 at 263-271 [26]- [59]; [2010] HCA 23; Jemena Asset Management (3) Pty Ltd v Coinvest Ltd (2011) 244 CLR 508 at 527 [50]; [2011] HCA 33; Kline v Official Secretary to the Governor-General (2013) 249 CLR 645 at 659 [32]; [2013] HCA 52. 237 Northern Territory, Legislative Assembly, Parliamentary Debates (Hansard), 22 October 2014. 238 Northern Territory, Legislative Assembly, Parliamentary Debates (Hansard), 26 November 2014. NettleJ Act239. As Hayne J observed in Momcilovic v The Queen, the relevant "intention" of the legislature is revealed by construction of the law in question240: "Use of the metaphor of 'intention' or 'will' must not be understood as inviting attention to the wishes or hopes of those who promoted the legislation in question. What matters is the reach and operation of the law in question as that reach and operation are ascertained by the conventional processes of statutory construction. The metaphor of intention must not obscure the centrality of construing the laws in question." Primacy must be given to the statutory language over what has been said in the extrinsic materials241. Correct construction of s 133AB(2)(a) For those reasons, it should be concluded that, upon the proper construction of Div 4AA, s 133AB(2)(a) sets an outer limit of four hours on the time for which a person arrested under s 123 for an infringement notice offence may be held before being released unconditionally or with an infringement notice, granted bail, or taken before a justice or court; and that the outer limit of four hours set by s 133AB(2)(a) is without prejudice to the requirement, which applies under s 137(1) to a person arrested under s 123 for an infringement notice offence, that the person be taken before a justice or court as soon as practicable after arrest unless sooner released (either unconditionally, with an infringement notice, or on bail) under s 133AB(3). It follows that, when a person is arrested under s 123 for an infringement notice offence, then, as soon as practicable after the person is taken into custody, he or she must be either released unconditionally or with an infringement notice, granted bail, or taken before a justice or court under s 137(1). That means that any detention of the person for longer than required to render it practicable so to release the person or take the person before a justice or court would be unlawful (even if it were within the four hour period specified in s 133AB(2)(a)) and so would be actionable at the suit of the person for damages for false imprisonment242. 239 Re Bolton (1987) 162 CLR 514 at 518. 240 (2011) 245 CLR 1 at 133-134 [315]; see also at 74 [111]; [2011] HCA 34. 241 Saeed (2010) 241 CLR 252 at 263-271 [26]-[59]. 242 Watson v Marshall (1971) 124 CLR 621 at 626 per Walsh J; [1971] HCA 33. NettleJ It also follows that, where a person is arrested under s 123 for an infringement notice offence and it is not practicable at any point before the expiration of the four hour period referred to in s 133AB(2)(a) to release the person unconditionally or with an infringement notice, grant the person bail, or take the person before a justice or court under s 137(1), the person must nevertheless be dealt with in one of those four ways upon the expiration of the four hour period. In those circumstances, any detention for longer than that without releasing the person or taking the person before a justice or court under s 137(1) would be unlawful and actionable at the suit of the person for damages for false imprisonment. The foregoing requirements are, however, subject to s 133AB(2)(b), such that, if the person is intoxicated, the person may be held for a period longer than four hours until the person is believed on reasonable grounds no longer to be intoxicated. They are also subject to s 137(2), and so a police officer may continue to hold a person arrested under s 123 for an infringement notice offence for questioning or investigation in relation to another offence in accordance with s 137(3) for the period specified in s 137(2). The plaintiffs' constitutional arguments The plaintiffs advanced two constitutional arguments in the alternative. The first was that Div 4AA impermissibly confers judicial power on the executive government of the Northern Territory by permitting a "superadded" period of detention for up to four hours in addition to any time required to bring a person before a justice or court under s 137(1). The second was that Div 4AA undermines the institutional integrity of the Supreme Court of the Northern Territory, in contravention of the Kable doctrine. The first argument assumes that Div 4AA should be characterised as conferring a power on the executive which is "penal or punitive". In Chu Kheng Lim v Minister for Immigration, Brennan, Deane and Dawson JJ said that, subject to certain exceptions, "the involuntary detention of a citizen in custody by the State is penal or punitive in character and ... exists only as an incident of the exclusively judicial function of adjudging and punishing criminal guilt"243. The "most important" exception to that principle, however, is "the arrest and detention in custody ... of a person accused of crime to ensure that he or she is available to be dealt with by the courts"244. 243 (1992) 176 CLR 1 at 27; [1992] HCA 64. 244 (1992) 176 CLR 1 at 28. NettleJ For the reasons already given, Div 4AA should not be construed as permitting the detention of a person for a period longer than is reasonably necessary to bring the person before a justice or court. Upon its proper construction, Div 4AA falls squarely within the arrest and detention in custody exception to the principle adumbrated by Brennan, Deane and Dawson JJ in Chu Kheng Lim. That is so even though the Fines and Penalties (Recovery) Act contemplates that a person issued with an infringement notice will not be dealt with by a court in relation to that infringement notice offence if the offence is expiated. That statutory regime provides for a diversion from, rather than a substitute for, the bringing of an alleged offender before a court in relation to the offence. It is, therefore, unnecessary to consider whether the separation of powers doctrine limits the Commonwealth's legislative power under s 122 in the manner submitted by the plaintiffs. The plaintiffs' second constitutional argument was put on the basis that Div 4AA grants the police a power to detain a person in circumstances where, as a matter of practicality, the exercise of the power is immune from supervision by a court, contrary to the principles in Kable245 and Kirk246. That argument may also be disposed of briefly. On its proper construction, Div 4AA does not grant police a power to detain for a period longer than provided for by ss 123 and 137. For that reason, Div 4AA cannot be regarded as usurping or otherwise interfering with the exercise of judicial power by a court of the Territory once a person who has been arrested is brought before the court. Abuse of power Finally, it should be mentioned that, during the course of argument, counsel for the plaintiffs expressed concerns that Div 4AA appeared to contemplate the arrest and taking into custody of a person for an infringement notice offence for which the maximum penalty is non-custodial and therefore for which arrest and taking into custody may not be necessary. Those concerns are unwarranted. The powers of police to arrest a person and take him or her into custody are only to be exercised for the purposes for which the powers are granted and, therefore, only for a legitimate reason. Where, therefore, a police officer reasonably suspects that a person has committed, is committing or is about to commit an infringement notice offence of such a minor nature that it does not carry or is unlikely to be visited with a 245 (1996) 189 CLR 51. 246 (2010) 239 CLR 531. NettleJ penalty of imprisonment, then, unless the offence is continuing or there is an ongoing risk to public safety or order, it is difficult to conceive of a legitimate reason for the police officer to arrest the person rather than issue an infringement notice "on the spot". The exercise of police powers is also subject to well- established mechanisms of legal supervision. Actions in assault, trespass and false imprisonment lie in respect of unlawful arrest, and exemplary damages may be awarded247. And, in the Northern Territory, a deliberate delay in bringing a person who has been arrested before a court is a crime punishable by imprisonment248. Conclusion Division 4AA is not invalid on either basis advanced by the plaintiffs. The questions in the special case should be answered as follows: (1)(a) No. (1)(b) No. The plaintiffs. The proceeding should be remitted to a single Justice of this Court for further directions. 247 New South Wales v Ibbett (2006) 229 CLR 638; [2006] HCA 57. 248 Criminal Code (NT), s 106.

HIGH COURT OF AUSTRALIA STANFORD AND STANFORD APPELLANT RESPONDENT Stanford v Stanford [2012] HCA 52 15 November 2012 ORDER Appeal allowed with costs. Set aside paragraphs 1 and 2 of the orders of the Full Court of the Family Court of Australia made on 19 January 2012. Vary the orders of the Full Court of the Family Court of Australia made on 21 October 2011 by adding a paragraph dismissing the Form 1 Application for Final Orders filed on behalf of the respondent by her case guardian in the Family Court of Western Australia on 17 August 2009. On appeal from the Family Court of Australia Representation P M Dowding SC with P W Johnston and J R Brady for the appellant (instructed by Carr & Co) M R Berry with G Athanasiou for the respondent (instructed by Ferrier, Athanasiou & Kakulas) Interveners P J Hanks QC with R L Hooker and D M Forrester intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor) G R Donaldson SC, Solicitor-General for the State of Western Australia with F B Seaward intervening on behalf of the Attorney-General for the State of Western Australia (instructed by State Solicitor (WA)) J G Renwick SC with S Robertson intervening on behalf of the Attorney- General for the State of New South Wales (instructed by Crown Solicitor (NSW)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Stanford v Stanford Family law – Family Court – Jurisdiction – Proceedings to alter property interests – Husband and wife lived apart after wife admitted into full time residential care – Husband continued to live in matrimonial home and provide financially for wife's care – Husband and wife had separate wills in favour of their children from earlier marriages – Wife by case guardian applied for order altering interests in marital property between husband and wife – Wife died before Full Court of Family Court delivered judgment and daughters continued proceeding as wife's legal personal representatives – Whether "matrimonial cause" within definition of Family Law Act 1975 (Cth) – Whether there was power to make property settlement order. Family law – Proceedings to alter property interests – Property settlement order – Death of either party to pending proceedings – Whether it would have been just and equitable to make property settlement order had wife remained alive – Whether still appropriate despite wife's death to make property settlement order. Constitutional law (Cth) – Powers of Commonwealth Parliament – Whether provision for adjudication of claim for property settlement order continued by legal personal representative is law with respect to marriage under s 51(xxi) or matrimonial causes under s 51(xxii). Words and phrases – "intact marriage", "involuntary separation", "just and equitable", "moral obligations". Constitution, s 51(xxi), (xxii). Family Law Act 1975 (Cth), ss 4(1), 39(2), 43(1), 74-75, 79. FRENCH CJ, HAYNE, KIEFEL AND BELL JJ. Part VIII (ss 71-90) of the Family Law Act 1975 (Cth) ("the Act") deals with the property of parties to a marriage, spousal maintenance and maintenance agreements. This appeal concerns s 79, which provides for a court exercising jurisdiction under the Act to make an order altering the interests of parties to a marriage in property to which one or both of those parties is or are entitled1. The determinative issues in this appeal from two decisions of the Full Court of the Family Court of Australia2 (Bryant CJ, May and Moncrieff JJ) can be stated briefly. Under s 79(2) of the Act, a court shall not make a property settlement order unless satisfied that it is "just and equitable" to do so. The parties to a marriage lived apart only once the wife had fallen so ill that she required full time care. The husband continued to provide for his wife and put money aside for her use. The wife, by then disabled and acting by a case guardian, applied for orders dividing between husband and wife the property they owned. Before final orders were made, the wife died and the proceedings were continued3 by her legal personal representatives. Could a court be satisfied that if the wife had not died it would have been just and equitable4 and that it was still appropriate5 to make a property settlement order under s 79? These reasons will demonstrate that it was not shown that, had the wife not died, it would have been just and equitable to make an order with respect to property. It follows that, after her death, it could not be found to be "still appropriate to make an order with respect to property"6. To explain these conclusions it is convenient to begin with the facts and the course of proceedings that preceded the appeal to this Court. s 79(1)(a), read with the definition of "property" in s 4(1). 2 Stanford & Stanford (2011) FLC ¶93-483; Stanford & Stanford (2012) FLC 3 See s 79(8). s 79(2) and (8)(b)(i). s 79(2) and (8)(b)(ii). s 79(8)(b)(ii). Hayne Bell Facts and course of proceedings The husband and wife married in 1971. It was the second marriage for each. Each had children by his or her first marriage. For 37 years the parties made their matrimonial home in a suburb of Perth in a house registered in the husband's name. (The husband had bought the house with his first wife but, after the end of that marriage, the house was transferred to him.) The husband and wife retired in 1989. In 1995, the husband made a will in which he left the house, subject to a life tenancy in favour of his wife, to the children of his first marriage. In 2005, the wife made a will leaving her estate to the children of her first marriage. In December 2008, the wife suffered a stroke. She was admitted into full time residential care and thereafter could not, and did not, return to live with her husband. She developed dementia. Through all this, the husband continued to provide for her. He put about $40,000 into a bank account to provide for the wife's medical needs or requirements. In August 2009, the wife, by her daughter as case guardian, applied to the Family Court of Western Australia for orders that the matrimonial home be sold and the net proceeds be divided equally between the parties and that the husband's superannuation entitlements and the parties' combined savings be divided equally between them. The application was heard in the Magistrates Court of Western Australia. At first instance, the magistrate (Duncanson M) determined the available assets of the parties and the contributions which each had made and concluded7 "that the overall percentage based on contributions should be 57.5% to [the husband] and 42.5% to [the wife]". The magistrate ordered the husband to pay his wife $612,931 within 60 days. The magistrate said8 that: "As a result of the division arrived at based on my assessment of the contribution of the parties to this long marriage, the needs of both will 7 S by her Case Guardian R and S by his Case Guardian S [2010] FCWAM 26 at [2010] FCWAM 26 at [163]. Hayne Bell be catered for and I am satisfied therefore that the outcome is one which is just and equitable." The husband appealed to the Full Court of the Family Court of Australia. After the appeal had been heard, but before judgment, the wife died. On 21 October 2011, the Full Court9 allowed the appeal and set aside the magistrate's decision. The Full Court concluded that the magistrate had erred in a number of respects. For present purposes, it is sufficient to notice that the Full Court observed10 that the magistrate had not sufficiently considered the effect of her orders on the husband "and the fact that this was an intact marriage" in considering what was "just and equitable". In particular, the Full Court said11 that it was "difficult to ascertain the reason why the Magistrate came to her conclusion given the wife did not have a need for a property settlement as such and that her reasonable needs could be met in other ways particularly by maintenance" (emphasis added). The Full Court did not make final orders. It invited the parties to make submissions about whether the Full Court should itself decide what orders should be made in place of those made by the magistrate or whether it should remit the matter for further consideration at first instance. Both parties asked the Full Court to deal with the matter finally. The Full Court then ordered that, on the husband's death, the sum which had been fixed by the magistrate as representing the value of 42.5 per cent of the marital property be paid to the wife's legal personal representatives. The Full Court said12 that "the many years of marriage [of the parties] and the wife's contributions demand that those moral obligations be discharged by an order for property settlement". The Full Court did not otherwise expressly deal with why, if the wife had not died, it would have been just and equitable to make the orders it did when, as the Full Court had said13 in its first judgment, the wife "did not have a need for a property settlement as such and ... her reasonable needs could be met in other ways". (2011) FLC ¶93-483. 10 (2011) FLC ¶93-483 at 85,990 [112], 85,991 [119]. 11 (2011) FLC ¶93-483 at 85,990 [112]. 12 (2012) FLC ¶93-495 at 86,313 [52]. 13 (2011) FLC ¶93-483 at 85,990 [112]. Hayne Bell The husband's arguments The husband advanced two propositions in this Court. First, he submitted that in the circumstances of this case the magistrate and the Full Court did not have power to make the orders that each made. Secondly, he submitted that if they had power to make the orders, they should not have exercised that power. The magistrate and the Full Court were said not to have had power because of two circumstances. It was said that this was an "intact marriage" and that, upon the wife's death, the only persons to benefit if a property settlement order were made would be her children of a different marriage. These circumstances were said to require the conclusions that jurisdiction under the Act (given by s 39(2) read with the definition of "matrimonial cause" in s 4(1)) and the power to make a property settlement order (in s 79) were not engaged. This understanding of to be supported by constitutional considerations about the scope of legislative power with respect to "marriage" and "matrimonial causes" in s 51(xxi) and (xxii). the Act was said These reasons will demonstrate that the husband's proposition about power should be rejected. These reasons will further demonstrate, however, that it was not shown to be just and equitable to make any property settlement order in this case. The appeal must therefore be allowed. It is convenient to begin examination of these matters by saying something more about the relevant provisions of the Act. Before dealing with the property settlement provisions that ultimately are central to this case, it is necessary to refer first to the provisions relied on as founding the jurisdiction to make the impugned orders, and second to those provisions of Pt VIII of the Act which deal with spousal maintenance. Jurisdiction in matrimonial causes Section 39(2) of the Act provides that, subject to some qualifications that are not presently relevant14, a matrimonial cause may be instituted under the Act in a court of summary jurisdiction of a State or Territory. One form of matrimonial cause identified in the definition of that term in s 4(1) of the Act is15 14 Proceedings for a decree of nullity of marriage or proceedings for a declaration as to the validity of a marriage, a divorce or the annulment of a marriage, whether by decree or otherwise, are expressly excluded. 15 Paragraph (ca)(i) of the definition of "matrimonial cause". Hayne Bell "proceedings between the parties to a marriage with respect to the property of the parties to the marriage or either of them, being proceedings ... arising out of the marital relationship". As will later be explained, the husband's submission that the proceedings in this case did not meet that description because the marriage was "intact" should be rejected. The proceedings instituted on behalf of the wife and heard in the Magistrates Court were a matrimonial cause of the kind identified. Spousal maintenance provisions Part VIII of the Act provides for a court to make an order for the provision of maintenance by one party to a marriage to the other party where that other party is unable to support himself or herself adequately. In particular, a court has16 the power to make "such order as it considers proper for the provision of maintenance", taking into account only the matters set out in s 75(2). These provisions were mentioned only briefly in argument. Presumably, they were considered to be peripheral to the central area of dispute between the parties in this Court. Although, in the originating process, the wife (by her case guardian) had sought a "[p]roperty and/or maintenance" order, argument in this Court proceeded on the basis that the wife had not pressed a claim for a maintenance order. In any event, the husband had offered to provide whatever maintenance was required to meet the wife's needs, and the Full Court found17 (and it was not disputed in this Court) that, on the evidence before the magistrate, all of the wife's needs were being met adequately. On the facts of the present case the maintenance provisions can thus be put to one side. But as will later be explained, it is important to keep these maintenance provisions in mind when considering the property settlement provisions on which argument in this Court focused. Property settlement provisions Section 79 of the Act provides for the alteration of property interests of the parties to a marriage. That section must be read in the light of the definition of "property" set out in s 4(1) of the Act. So far as presently relevant, "property": 16 ss 74(1) and 75(1). 17 (2011) FLC ¶93-483 at 85,988-85,989 [103], 85,990 [112]. Hayne Bell in relation to the parties to a marriage or either of them—means property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion". For present purposes, not all the provisions of s 79 need be noticed. Section 79(1) provides (again so far as presently relevant): "In property settlement proceedings, the court may make such order as it considers appropriate: in the case of proceedings with respect to the property of the parties to the marriage or either of them—altering the interests of the parties to the marriage in the property; or including: an order for a settlement of property in substitution for any interest in the property". Section 79(2) is one of two provisions of central importance to the determination of the present appeal. It provides that: "The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order." Section 79(4) identifies seven matters that a court must take into account in "considering what order (if any) should be made under this section in property settlement proceedings". Paragraphs (a), (b) and (c) each refer to various forms of contribution made by parties to a marriage; par (d) refers to the effect of any order on either party's earning capacity; par (e) requires consideration of the matters to be taken into account under s 75(2) of the Act in relation to spousal maintenance "so far as they are relevant"; and pars (f) and (g) refer to orders already made under the Act and child support. Not all of these matters were said to be relevant in this case. Section 79(8) is the second provision of central importance to the determination of the present appeal. It applies where a party to the marriage dies before property settlement proceedings are completed. It provides that: the proceedings may be continued by or against, as the case may be, the legal personal representative of the deceased party and the applicable Rules of Court may make provision in relation to the Hayne Bell substitution of the legal personal representative as a party to the proceedings; if the court is of the opinion: that it would have made an order with respect to property if the deceased party had not died; and that it is still appropriate to make an order with respect to property; the court may make such order as it considers appropriate with respect to: (iii) any of the property of the parties to the marriage or either of them; or an order made by the court pursuant to paragraph (b) may be enforced on behalf of, or against, as the case may be, the estate of the deceased party." Section 79(8)(b) thus requires a court considering an application for a property settlement order which is continued by or against the legal personal representative of a deceased party to determine first, whether it would have made an order with respect to property if the deceased party had not died and second, whether, despite the death, it is still appropriate to make an order. Both of those inquiries require consideration of s 79(2) and its direction that the court not make an order unless "satisfied that, in all the circumstances, it is just and equitable" to do so. It follows that, in cases where s 79(8) applies, a court must consider whether, had the party not died, it would have been just and equitable to make an order and whether, the party having died, it is still just and equitable to make an order. Power to make a property settlement order Because it was the focus of the husband's submissions in this Court, it is convenient to deal first with the husband's proposition that the magistrate and the Full Court did not have power to make a property settlement order in this case. It will be recalled that the husband pointed to two circumstances in support of this proposition: that the marriage was "intact" before the wife's death, and that upon her death the only persons to benefit from a property settlement order were the wife's children from a previous marriage. For the reasons that follow, the Hayne Bell husband's arguments about the legal significance of these circumstances, and the proposition about lack of power that they were said to support, should be rejected. First, the husband submitted that s 79, when read with s 43(1), did not permit the making of a property settlement order when, as here, the marriage between the parties was "intact". Section 43(1) states the principles that a court exercising jurisdiction under the Act must apply in exercising that jurisdiction. Those principles include18 "the need to preserve and protect the institution of marriage as the union of a man and a woman to the exclusion of all others voluntarily entered into for life". This provision was said to reflect a long-standing assumption by the Parliament that a property settlement order should not be made in subsisting, or "intact", marriages. It followed, so the husband submitted, that s 79 should not be read "to extend beyond alteration of the interest in the property of one of the parties to the marriage in the context of the breakdown of the relationship" (emphasis in original). This submission must be rejected. Section 43(1) identifies a number of principles that a court shall "have regard to". The statement of one among several guiding principles for the exercise of jurisdiction is not apt to limit the conferral of jurisdiction in the way that the husband urged. Particularly is that so when the power in s 79 is understood in the way explained later in these reasons. So understood, s 79 has an operation that is entirely consistent with s 43(1). Secondly, the husband submitted that there was no "matrimonial cause" to found the magistrate's and the Full Court's jurisdiction in this case. Alternatively, if there was a "matrimonial cause" when the proceedings began, there was no longer a matrimonial cause after the wife's death and the wife's legal personal representatives were no longer continuing the proceedings that had been instituted. This argument (in both its primary and its alternative form) must also be rejected. Once proceedings were issued in the Family Court of Western Australia, there was in this case a dispute about marital property. Because the wife was disabled, she sued by her case guardian, who was one of her daughters from her earlier marriage. Under the wife's will, her daughters would inherit her estate. But neither the interposition of a case guardian nor the interposition of this particular case guardian denies that a property settlement order was sought and its making was opposed by the husband. There was thus a proceeding, 18 s 43(1)(a). Hayne Bell arising out of a marital relationship, between the parties to the marriage with respect to the marital property and so a "matrimonial cause" within the definition of that term in s 4(1) of the Act. And when the wife died, the claim that was continued by her legal personal representatives was the claim that had been instituted on behalf of the wife, not some new or different claim. It remained a claim arising out of the marital relationship of the parties. This last point is important. It denies the argument that the claim that was being continued was a claim by the beneficiaries of the wife's estate and not a "matrimonial cause" as defined in the Act. The point is made good by observing that, because the wife had died and her claim was being continued by her legal personal representatives, s 79(8)(b) required the court determining the claim to consider whether it would have made an order with respect to property if the wife had not died and whether it was still appropriate to make an order with respect to property. The combination of inquiries required by the Act demonstrates that the proceedings retained the character they had when instituted. This Court held in Fisher v Fisher19 that s 79(8) operates in just this way. It continues proceedings that would otherwise have abated upon the death of a party. Thirdly, it was said that because the wife had died and those who would gain from the making of an order in favour of the wife were not children of the marriage but children from the wife's earlier marriage, the application was "not a proceeding arising from the marital relationship, nor one involving divorce or a matrimonial cause, in their constitutional sense". Accordingly, so the submission went, to construe s 79 as permitting a property settlement order to be made in this case would be to imperil the section's validity. As already explained, the claim which was made by the wife, and continued by her legal personal representatives after her death, was a claim which arose out of the marital relationship between the husband and wife. This Court held in Fisher v Fisher20 that a law providing for the making and adjudication of a claim of that kind is a law with respect to marriage. The husband's argument is not consistent with that decision and he did not submit that the Court should depart from it. Because s 79, applied in accordance with its terms, did not permit the making of the orders which the husband challenged in 19 (1986) 161 CLR 438 at 449 per Gibbs CJ (Wilson J agreeing), 452 per Mason and Deane JJ, 457-458 per Brennan J, 461-462 per Dawson J; [1986] HCA 61. 20 (1986) 161 CLR 438. Hayne Bell this Court, it is neither necessary nor desirable to explore further any question about the limits of constitutional power. It is desirable, however, to say something more about the first factual circumstance fixed upon by the husband: that the parties' marriage was "intact". The expressions "intact marriage" and "breakdown" of the relationship or marriage were evidently used in the husband's submissions as expressions of opposing meaning. But beyond that opposition, the content of neither was spelled out. In particular, the marriage in this case was described as "intact" even though the husband and wife lived apart with no prospect of resuming cohabitation and even though the wife's dementia would inevitably affect the mutuality of the marital bonds between them. The expression "intact marriage" appeared to be used in a way that gave definitive significance to the fact that the separation of the parties was not voluntary, but the legal significance of this fact for the husband's proposition about lack of power was not identified. Nor was its legal significance explored for the husband's second argument about the exercise of power by the magistrate and by the Full Court (if, contrary to the husband's principal argument, they had power to make a property settlement order in this case). Yet it is in this second context that the involuntary nature of their separation is significant. To explain why that is so, it is necessary to examine the operation of s 79. The operation of s 79 It will be recalled that s 79(2) provides that "[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order". Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order. The expression "just and equitable" is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition21. It is not possible to chart its metes and bounds. And while the power given by s 79 is not "to be 21 See Mallet v Mallet (1984) 156 CLR 605 at 608 per Gibbs CJ; [1984] HCA 21. Hayne Bell exercised in accordance with fixed rules" 22, nevertheless, three fundamental propositions must not be obscured. First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. So much follows from the text of s 79(1)(a) itself, which refers to "altering the interests of the parties to the marriage in the property" (emphasis added). The question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order. Second, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion. In Wirth v Wirth, Dixon CJ observed23 that a power24 to make such order with respect to property and costs "as [the judge] thinks fit", in any question between husband and wife as to the title to or possession of property, is a power which "rests upon the law and not upon judicial discretion". And as four members of this Court observed about proceedings for maintenance and property settlement orders in R v Watson; Ex parte Armstrong25: "The judge called upon to decide proceedings of that kind is not entitled to do what has been described as 'palm tree justice'. No doubt he is given a wide discretion, but he must exercise it in accordance with legal principles, including the principles which the Act itself lays down". Because the power to make a property settlement order is not to be exercised in an unprincipled fashion, whether it is "just and equitable" to make the order is not to be answered by assuming that the parties' rights to or interests in marital property are or should be different from those that then exist. All the more is that so when it is recognised that s 79 of the Act must be applied keeping 22 Mallet v Mallet (1984) 156 CLR 605 at 608 per Gibbs CJ. 23 (1956) 98 CLR 228 at 231-232; [1956] HCA 71. 24 Given by The Married Women's Property Acts 1890-1952 (Q), s 21, a provision which corresponded with s 17 of the Married Women's Property Act 1882 (Imp). 25 (1976) 136 CLR 248 at 257 per Barwick CJ, Gibbs, Stephen and Mason JJ; [1976] HCA 39. Hayne Bell in mind that "[c]ommunity of ownership arising from marriage has no place in the common law"26. Questions between husband and wife about the ownership of property that may be then, or may have been in the past, enjoyed in common are to be "decided according to the same scheme of legal titles and equitable principles as govern the rights of any two persons who are not spouses"27. The question presented by s 79 is whether those rights and interests should be altered. Third, whether making a property settlement order is "just and equitable" is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised "in accordance with legal principles, including the principles which the Act itself lays down"28. To conclude that making an order is "just and equitable" only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act. Adherence to these fundamental propositions in exercising the power in s 79 gives due recognition to "the need to preserve and protect the institution of marriage" identified in s 43(1)(a) as a principle to be applied by courts in exercising jurisdiction under the Act. If the parties have made a financial agreement about the property of one or both of the parties that is binding under Pt VIIIA of the Act, then, subject to that Part, a court cannot29 make a property settlement order under s 79. But if the parties to a marriage have expressly considered, but not put in writing in a way that complies with Pt VIIIA, how their property interests should be arranged between them during the continuance of their marriage, the application of these principles accommodates that fact. And if the parties to a marriage have not expressly considered whether or to what extent there is or should be some different arrangement of their property interests in their individual or commonly held assets while the marriage continues, the 26 Hepworth v Hepworth (1963) 110 CLR 309 at 317 per Windeyer J; [1963] HCA 27 Hepworth v Hepworth (1963) 110 CLR 309 at 317 per Windeyer J. See also Wirth v Wirth (1956) 98 CLR 228 at 231-232 per Dixon CJ. 28 R v Watson; Ex parte Armstrong (1976) 136 CLR 248 at 257. 29 s 71A. Hayne Bell application of these principles again accommodates that fact. These principles do so by recognising the force of the stated and unstated assumptions between the parties to a marriage that the arrangement of property interests, whatever they are, is sufficient for the purposes of that husband and wife during the continuance of their marriage. The fundamental propositions that have been identified require that a court have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage and whatever may have been their stated or unstated assumptions and agreements about property interests during the continuance of the marriage. In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying By contrast, the bare fact of separation, when involuntary, does not show that it is just and equitable to make a property settlement order. It does not permit a court to disregard the rights and interests of the parties in their respective property and to make whatever order may seem to it to be fair and just30. When, as in this case, the separation of the parties is not voluntary, the bare fact of separation does not demonstrate that the husband and wife have any reason to alter the property interests that lie behind whatever common use they may have made of assets when they were able to and did live together. Common 30 Wirth v Wirth (1956) 98 CLR 228 at 231-232 per Dixon CJ; Hepworth v Hepworth (1963) 110 CLR 309 at 317-318 per Windeyer J. Hayne Bell use of some assets may very well continue, as it did here when the husband made provision for the wife's care and accommodation. Past arrangements that the parties have made about their property interests on the assumption, expressed or implicit, that those arrangements were sufficient and appropriate during the continuance of their marriage are not necessarily falsified. If both parties are competent, it can still be assumed that any necessary or desirable adjustment can be made to their property interests consensually. And if one of the parties has become incompetent it is not to be assumed that the other party lacks the will and ability to make those necessary or desirable adjustments. Contrary to the submissions of the husband in this Court, there may be circumstances other than a voluntary separation of the parties marking the breakdown of their marital relationship in which a court may be satisfied that it is just and equitable to make a property settlement order. For example, demonstration of one party's unmet needs that cannot be answered by a maintenance order may well warrant the conclusion that it is just and equitable to make a property settlement order. It may be that there are circumstances other than need. As has already been emphasised, nothing in these reasons should be understood as attempting to chart the metes and bounds of what is "just and equitable". Nor is anything that is said in these reasons intended to deny the importance of considering any countervailing factors which may bear upon what, in all the circumstances of the particular case, is just and equitable. In particular, as the Full Court pointed out31 in its first judgment in this matter, the magistrate erred in not taking account of the consequences that would follow for the husband if a property settlement order were to be made in the terms which were sought on behalf of the wife. The husband would be required to sell the matrimonial home, in which he was still living, despite the needs of his wife then being met by the provision of full time care, a further provision of money against future contingencies and the possibility, if needed, of making a maintenance order. Applying s 79 in this case The Full Court was right to conclude, in its first judgment, that the magistrate had erred in making the property settlement order that was made. The Full Court was right to find that the magistrate did not consider factors that bore on whether it was just and equitable to make a property settlement order. The 31 (2011) FLC ¶93-483 at 85,990 [112], 85,991 [119]. Hayne Bell magistrate did not consider32 the effect upon the husband of making an order for division of the parties' property that would require the husband to sell the matrimonial home, in which he was continuing to live. The magistrate did not consider33 whether a maintenance order would sufficiently meet the wife's needs. In its second judgment, the Full Court re-exercised the power given by s 79 of the Act and made a property settlement order. The Full Court said34 that the "many years of marriage and the wife's contributions demand that those moral obligations be discharged by an order for property settlement" (emphasis added). It described35 the outcome produced by its orders as "just and equitable". But otherwise the Full Court made no separate inquiry into whether, had the wife not died, it would have made a property settlement order36. That inquiry required it to consider whether, had the wife not died, it would have been just and equitable to make a property settlement order. And because the Full Court did not consider whether it would have made an order if the wife had not died, it did not make any express inquiry into whether it was still appropriate to make an order37. No basis was identified at first instance, on appeal to the Full Court, or in argument in this Court, for concluding that it was just and equitable to make any order dividing the parties' property between them. It was not shown that the wife's needs during her life were not being or would not be met. The legal personal representatives of the wife supported the Full Court's reasoning but pointed to no additional consideration as bearing upon this question. In argument in this Court, the legal personal representatives of the wife accepted that the application for a property settlement order had been commenced when the wife was no longer competent and without the wife having expressed any wish to seek the division of marital property. The legal personal representatives also accepted that the "very dominant consideration" in the Full 32 (2011) FLC ¶93-483 at 85,990 [112], 85,991 [119]. 33 (2011) FLC ¶93-483 at 85,986 [90], 85,990 [112], 85,991 [119]. 34 (2012) FLC ¶93-495 at 86,313 [52]. 35 (2012) FLC ¶93-495 at 86,314 [62]. 36 s 79(8)(b)(i). 37 s 79(8)(b)(ii). Hayne Bell Court's decision to make the orders it did was its conclusion that the wife's contributions during the marriage established the "moral" obligation to which reference has already been made. But they did not submit, and the Full Court did not find, that the contributions to which reference was made affected the existing legal or equitable interests of the parties in property. And they did not submit, and the Full Court did not find, that the magistrate had erred in the findings she made about the parties' existing interests in property. Section 79(4)(a)-(c) required that the contributions which the wife made to the marriage should be taken into account in "considering what order (if any) should be made" under s 79. It may readily be assumed that the length of the parties' marriage directly affected the extent of the contributions the wife had made. But, as already noted, the inquiries required by s 79(4) are separate from the "just and equitable" question presented by s 79(2). The two inquiries are not to be merged. And neither the inquiry whether it would have been just and equitable to make a property settlement order if the wife had not died, nor the separate inquiry whether it was still just and equitable to do so, was to be merged with or supplanted by an inquiry into what division of property should be made by applying the matters listed in s 79(4). Whether it was just and equitable to make a property settlement order in this case was not answered by pointing to moral obligations. Reference to "moral" claims or obligations is at the very least apt to mislead. First, such references appear to invite circular reasoning. On its face, the invocation of moral claims or obligations assumes rather than demonstrates the existence of a legal right to a property settlement order and further assumes that the extent of that claim or obligation can and should be measured by reference to the several matters identified in s 79(4). Second, the term "moral" might be used to refer to a claim or obligation that is based on the kind of contribution described in s 79(4)(b) – "the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage ... to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them". But nothing is gained by describing such a contribution as founding a "moral" claim or obligation. Moreover, if the word "moral" was being used in this context with some wider meaning or application, it is important to recognise that it is used in a way that finds no legal foundation in the Act or elsewhere. It is, therefore, a term that may, and in this case did, mislead. The rights of the parties were to be determined according to law, not by reference to other, non-legal considerations. The references by Brennan J in Hayne Bell Fisher v Fisher38 to moral claims should not be misunderstood as suggesting otherwise. Conclusions and orders It was not shown that, had the wife not died, it would have been just and equitable to make a property settlement order. It follows that it was not open to the Full Court to find that it was still appropriate to make an order with respect to property. The appeal to this Court should be allowed with costs. Paragraphs 1 and 2 of the orders of the Full Court of the Family Court of Australia made on 19 January 2012 should be set aside. Paragraph 3 of the Full Court's orders, by which the costs of the appeal to that Court were reserved for further consideration, should stand. The orders made by the Full Court on 21 October 2011 allowing the husband's appeal to that Court and setting aside the property settlement order made at first instance should be varied by adding an order dismissing the application for a property settlement order made on the wife's behalf and continued by her legal personal representatives. 38 (1986) 161 CLR 438 at 457-458. HEYDON J. A husband and wife married in 1971. The husband had children by an earlier marriage. So did the wife. The husband and wife had no children by their marriage. On 31 December 2008, the wife suffered a severe stroke and was later diagnosed with dementia. There were disputes between her daughters and the husband about which nursing care facility the wife should be placed in. The wife's daughters favoured a facility that required payment of a $300,000 bond or entrance fee. The husband did not. On 21 July 2009, the wife was placed in a high care facility which did not require payment of a bond. The facility's fees were paid out of the wife's veterans' pension from the Department of Veterans' Affairs. On 23 July 2009, the husband opened a trust account of which his wife was sole beneficiary and paid $42,186.36 into it. The purpose was to provide additional funds for the wife in relation to medical, accommodation and other expenses. On 17 August 2009, the wife filed an application in property settlement proceedings under s 79 of the Family Law Act 1975 (Cth) ("the Act"). Her application was made by a daughter of her first marriage as case guardian. The application was for orders dividing the property of herself and her husband in their matrimonial home, his superannuation entitlements and their combined savings. Section 79(2) of the Act provided: "The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order." The Magistrates Court of Western Australia ordered the husband to pay his wife $612,931. After the husband's appeal to the Full Court of the Family Court of Australia had been heard, but before it was decided, the wife died. In those circumstances s 79(8)(b) of the Act applied. It gave the Court power to make "such order as it considers appropriate with respect to [the] property" on two conditions. The conditions were created by s 79(8)(b)(i) and (ii) respectively. The condition created by s 79(8)(b)(i) was that the Court is of the opinion that it "would have made an order with respect to property if the deceased party had not died". In consequence of s 79(8)(b)(i), one question for the Full Court was whether under s 79(2) it would have been just and equitable to have made an order with respect to property if the wife had not died. The legal personal representatives of the wife bore the burden of proof on that question. There are two main reasons why it would not have been just and equitable to have made an order with respect to property if the wife had not died. It is sufficient to state those reasons largely in the language used by the Full Court (Bryant CJ, May and Moncrieff JJ) in its first judgment. The first reason is that the wife's needs were met. The background to the first reason is that at the time when the application was instituted it was thought that provision of a capital sum for the wife would be "necessary or … at least be useful in securing suitable accommodation for her in an aged care facility."39 At the time judgment was delivered this was no longer the case. By then, "the wife's condition [fell into] the category of 'high care' [and] she [was thus] entitled to be cared for in an aged care facility without the need for a bond."40 Hence the wife's "reasonable needs could be met in other ways particularly by maintenance."41 In short, the provision of care funded by her pension and by the trust fund that the husband had created was sufficient to meet the wife's needs. If her needs ceased to be met in those ways, maintenance orders against the husband could be applied for and made. The second reason is42: "Other than the forced separation of the parties by virtue of the wife being in a nursing home, the husband wished to remain in the home which had been the parties' home for in excess of 35 years, until such time as he could not reasonably remain there. … In our view there are many aspects of this application which do not require an immediate order finally altering the interests of the parties in their property and particularly so where it would require the husband to leave his home of 48 years in which he is still residing." The legal personal representatives of the wife argued that it was just and equitable for the Magistrate to have made her order. That was because the legal entitlements of the parties did not reflect their contributions to the marriage. That factor might be relevant, even decisive, in circumstances different from those of this case as they stood during the hearings while the wife was alive. But it was not sufficient to render it just and equitable to make the order at the time it was made. For those reasons the wife failed to demonstrate that the condition stated in s 79(8)(b)(i) was satisfied. 39 Stanford & Stanford (2011) FLC ¶93-483 at 85,986 [85]. 40 Stanford & Stanford (2011) FLC ¶93-483 at 85,986 [82]. 41 Stanford & Stanford (2011) FLC ¶93-483 at 85,990 [112]. 42 Stanford & Stanford (2011) FLC ¶93-483 at 85,990 [112]. Therefore the condition stated in s 79(8)(b)(ii) does not arise. It is not necessary to consider it or the husband's argument that there was no power to make any property settlement order in this case. The appeal should be allowed with costs. Orders 1 and 2 of the Full Court of the Family Court of Australia made on 19 January 2012 should be set aside. The Form 1 Application of the respondent filed on 17 August 2009 should be dismissed.

HIGH COURT OF AUSTRALIA FORTRESS CREDIT CORPORATION (AUSTRALIA) II PTY LIMITED & ANOR APPELLANTS AND WILLIAM JOHN FLETCHER AND KATHERINE BARNET AS LIQUIDATORS OF OCTAVIAR LIMITED (RECEIVER AND MANAGERS APPOINTED) (IN LIQUIDATION) AND OCTAVIAR ADMINISTRATION PTY LIMITED & ORS RESPONDENTS Fortress Credit Corporation (Australia) II Pty Limited v Fletcher [2015] HCA 10 11 March 2015 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of New South Wales Representation D F Jackson QC with R C A Higgins for the appellants (instructed by Baker B W Walker SC with B A J Coles QC, P J Dowdy and A K Flecknoe- Brown for the respondents (instructed by Henry Davis York) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Fortress Credit Corporation (Australia) II Pty Limited v Fletcher Corporations – Winding up – Voidable transactions – Section 588FF(3)(b) of Corporations Act 2001 (Cth) empowers courts to make orders extending time for liquidator to make application under s 588FF(1) with respect to voidable transactions – Order extending time for respondents to make s 588FF(1) application did not refer to identified transaction – Respondents made s 588FF(1) application within extended time period – Whether courts can make order under s 588FF(3)(b) extending time to make s 588FF(1) application without identifying particular transaction or transactions to which it would apply. Words and phrases – "extension of time", "re-enactment presumption", "shelf orders". Corporations Act 2001 (Cth), s 588FF. FRENCH CJ, HAYNE, KIEFEL, GAGELER AND KEANE JJ. Introduction This appeal concerns the power of courts under s 588FF(3)(b) of the Corporations Act 2001 (Cth) ("the Act") to extend the time within which a company's liquidator may apply for orders in relation to voidable transactions entered into by the company. The question for determination is whether an extension can only be ordered in relation to a transaction or transactions identified in the order, or may apply to transactions not able to be identified at the time of the order. The latter form of order has sometimes been called a "shelf order"1. Section 588FE of the Act sets out categories of voidable transactions. Such a transaction must answer the description of one or more of a number of defined designations in s 588FE. It must also have been entered into or taken effect within a specified period generally defined by reference to the "relation- back day"2. The periods vary according to the characteristics of the transaction3. If, on the application of a company's liquidator, a court is satisfied that a transaction of the company is voidable because of s 588FE then the court is empowered by s 588FF(1) to make one or more of a number of orders. They include orders directing or requiring persons to repay money or transfer property 1 A term apparently originating in Brown v DML Resources Pty Ltd (In Liq) [No 5] (2001) 166 FLR 1 at 8 [31] per Austin J; see also Re Harris Scarfe Ltd (in liq) (No 3) (2008) 216 FLR 242 at 246 [17] per Debelle J. 2 Defined in s 9 of the Act in relation to the winding up of a company or Pt 5.7 body if, because of Division 1A of Part 5.6, the winding up is taken to have begun on the day when an order that the company or body be wound up was made—the day on which the application for the order was filed; or otherwise—the day on which the winding up is taken because of Division 1A of Part 5.6 to have begun." 3 See Act, ss 588FE(2)(b), 588FE(2A)(c), 588FE(2B)(c), 588FE(3)(b), 588FE(4)(c), 588FE(5)(c), 588FE(6), 588FE(6A)(b). Hayne to the company if the company has paid the money or transferred the property under the voidable transaction. Section 588FF(3), as it stood at 19 September 2011, the date of the shelf order giving rise to this appeal, provided: "An application under subsection (1) may only be made: during the period beginning on the relation-back day and ending: 3 years after the relation-back day; or 12 months after the first appointment of a liquidator in relation to the winding up of the company; whichever is the later; or (b) within such longer period as the Court orders on an application under this paragraph made by the liquidator during the paragraph (a) period." The Court of Appeal of the Supreme Court of New South Wales, in the decision which is now appealed to this Court, held that s 588FF(3)(b) empowered a court to make an order extending time without specifying the particular transaction or transactions to which it would apply. In so doing, the Court of Appeal followed its earlier decision in BP Australia Ltd v Brown4, a decision which did not elicit any legislative response in the subsequent re-enactment of s 588FF(3). The Court of Appeal was correct. The appeal against its decision must be dismissed with costs. Factual background The first respondents are the joint and several liquidators of the second and third respondents, Octaviar Limited ("OL") and Octaviar Administration Pty Limited ("OA"), appointed by order of the Supreme Court of Queensland made on 9 September 20095. The relevant relation-back day for OA was 3 October (2003) 58 NSWLR 322. 5 Public Trustee (Qld) v Octaviar Ltd (ACN 107 863 436) (in prov liq) (recs and mgrs apptd) (2009) 74 ACSR 109. The first respondents replaced the former (Footnote continues on next page) Hayne 20086. The time limited for the commencement of proceedings under s 588FF(3)(a) was that prescribed by s 588FF(3)(a)(i)7. It expired on 3 October 2011. In September 2011, the first respondents applied for an order that the time for applications under s 588FF(1) in relation to OA be extended from 3 October 2011 to 3 April 20128. On 19 September 2011, Ward J in the Supreme Court of New South Wales made an order in relation to OA in the following terms: "Order under s 588FF(3)(b) of the Corporations Act 2001 (Cth) that the time for in respect of Octaviar the application Administration under s 588FF(1) be extended to 3 April 2012." the making of On 3 April 2012, acting pursuant to that extension, the first respondents, as liquidators of OA, commenced proceedings against the appellants in the Supreme Court of Queensland for orders under s 588FF(1). On 18 December 2012, Black J in the Supreme Court of New South Wales dismissed an application by the appellants to set aside the extension order made by Ward J. On 14 May 2014, the Court of Appeal of the Supreme Court of New South Wales granted the appellants leave to appeal against the decision of Black J but dismissed the appeal9. The appellants now appeal to this Court pursuant to special leave granted by Crennan and Gageler JJ on 17 October 201410. administrators of a deed of company arrangement, who had been appointed as liquidators when the deed was terminated on 31 July 2009. 6 The date on which OA was placed into voluntary administration: Act, ss 513A(d), 513C(b). See Public Trustee (Qld) v Octaviar Ltd (subject to a deed of company arrangement) (recs and mgrs apptd) (ACN 107 863 436) (2009) 73 ACSR 139 at 7 The alternative limit provided by s 588FF(3)(a)(ii) had expired on 31 July 2010. 8 There were antecedent and concurrent applications in relation to OL, which have given rise to cognate appeals in this Court, mentioned later in these reasons. 9 Fortress Credit Corporation (Australia) II Pty Ltd (ACN 114 624 958) v Fletcher (2014) 308 ALR 166 at 184 [112]–[113] per Bathurst CJ, 184 [114] per Beazley P, 185 [118] per Macfarlan JA, 186 [124] per Barrett JA, 188 [136] per Gleeson JA. 10 [2014] HCATrans 233. Hayne This appeal arises out of an extension order in relation to OA. Two cognate appeals to this Court by other parties arise out of another extension order by Ward J in relation to OL. That extension order, also made on 19 September 2011, purported to apply r 36.16(2)(b) of the Uniform Civil Procedure Rules 2005 (NSW) ("the UCPR") to vary, to 3 April 2012, an extension order made by another judge of the Court in relation to OL. The question in those appeals, judgment in which is given on the same day as this judgment, was whether s 79 of the Judiciary Act 1903 (Cth) picked up the UCPR to authorise that further extension of time pursuant to an application made outside the par (a) period. This Court's answer to that question was in the negative11. The decisions of the Supreme Court In 2001, Austin J in Brown v DML Resources Pty Ltd (In Liq)12 held that an application could be made under s 588FF(3)(b) for a shelf order. His Honour said13: "[Subsection (3)] sets the time limit for making an application under subs (1) as three years after the relation-back day, or such longer period as the Court orders on an application under subs (3) — that is a different application whose purpose is only to extend the time period. Consistently with the wording of subs (3), the application to extend the time limit can be an application to extend the time limit within which a particular subs (1) application can be made, or a broader application that applies to the particular subs (1) application under consideration and to other applications as well. I see no reason why the other applications cannot be described by category rather than in specific terms, provided that the description is clear." (emphasis in original) His Honour identified the purpose of s 588FF as preventing liquidators from relegating the recovery of voidable preferences to the end of their work programs. He accepted that the investigation of such transactions should generally be concurrent with other liquidation work. Nevertheless, he recognised that there would be some cases where, notwithstanding the most diligent of efforts, the liquidator was so far short of completing investigations towards the 11 Grant Samuel Corporate Finance Pty Ltd v Fletcher [2015] HCA 8. 12 (2001) 52 NSWLR 685. 13 (2001) 52 NSWLR 685 at 693 [33]. Hayne end of the time limit that it was impossible to identify particular transactions in respect of which orders for extension of time could be made14. On appeal, sub nom, BP Australia Ltd v Brown15, the Court of Appeal of the Supreme Court of New South Wales affirmed that aspect of the decision of Austin J. Spigelman CJ agreed with his Honour's reasoning and added16: "It is not difficult to envisage a circumstance in which a liquidator is still ascertaining the identity of the recipients of benefits under possible voidable transactions and cannot give the court an indication of the creditors to be targeted. The power should be broad enough to allow, in those circumstances, for an order granting an extension of time in general terms." That construction involved a balancing of the requirement of commercial certainty on the part of those who had had past dealings with the corporation against the conflicting interest of the creditors of the company17. Mason P18 and Handley JA19 agreed with the Chief Justice's reasons. Black J applied the decision of the Court of Appeal in Brown, as he was bound to do20. As Bathurst CJ pointed out in the Court of Appeal21, Brown has also been followed consistently by courts of first instance in New South Wales and by the Full Court of the Supreme Court of South Australia in Ansell Ltd v 14 (2001) 52 NSWLR 685 at 693–694 [34]. 15 (2003) 58 NSWLR 322. 16 (2003) 58 NSWLR 322 at 354 [170]. 17 (2003) 58 NSWLR 322 at 354 [171]. 18 (2003) 58 NSWLR 322 at 361 [215]. 19 (2003) 58 NSWLR 322 at 361 [216]. 20 Re Octaviar Ltd (2012) 271 FLR 413 at 418–419 [17]–[19]. 21 (2014) 308 ALR 166 at 175–176 [42]–[43]. Hayne Davies22. There were obiter observations in the Court of Appeal of the Supreme Court of Queensland in Greig v Stramit Corporation Pty Ltd23 by Williams JA and Jerrard JA to the effect that s 588FF(3)(b) did not authorise the making of shelf orders24. While acknowledging that the appellants' arguments in the Court of Appeal had "considerable force", Bathurst CJ could not conclude that Brown was "plainly wrong"25. Nor, in his Honour's opinion, was there a compelling reason for it to be overruled. It had been followed and applied since 2003. Although no information was supplied as to the number of shelf orders made, liquidators and their advisors presumably would have been acting on the Reversing Brown in those assumption that the decision was correct. circumstances could be productive of substantial injustice26. Beazley P, Macfarlan, Barrett and Gleeson JJA, in separate and shorter reasons, agreed with the orders that were proposed by the Chief Justice. Before considering the text of s 588FF, it is useful to have regard to its legislative history, which, in this case, informs its construction. Legislative history The first version of s 588FF and its associated provisions was enacted in 199227 by insertion in the Corporations Law. Before that enactment, provisions in companies legislation for the avoidance of antecedent transactions of a company in liquidation had incorporated by reference the provisions of bankruptcy legislation relating to undue preferences28. Section 588FF and related 22 (2008) 219 FLR 329. Special leave to appeal to this Court against the decision of the Full Court was granted but the appeal was not pursued: [2008] HCATrans 373. 23 [2004] 2 Qd R 17. 24 [2004] 2 Qd R 17 at 28 [44] per Williams JA, 42–43 [110]–[111] per Jerrard JA. 25 (2014) 308 ALR 166 at 183 [100]. 26 (2014) 308 ALR 166 at 183 [100]. 27 Corporate Law Reform Act 1992 (Cth), s 111. 28 Uniform Companies Acts 1961–1962, s 293; Companies Act 1981 (Cth), s 451 as applied to the Australian Capital Territory and adopted by each of the States and the Northern Territory ("Companies Code"); Corporations Law, s 565. Hayne provisions concerning voidable transactions were enacted on the basis of the recommendations made by the Law Reform Commission ("the LRC") in the Report of the General Insolvency Inquiry, published in 198829 ("the Harmer Report"). The LRC described the pre-existing policy of provisions for the avoidance of antecedent transactions30: "Insolvency law has long adopted the policy of avoiding transactions by which an insolvent individual or company disposed of property within a relevant period prior to the actual commencement of the formal insolvency in circumstances that are unfair to the general body of unsecured creditors." The continuance of that policy was recommended31. The LRC, however, proposed a new legislative framework providing for substantially uniform but separate provisions regulating antecedent transactions in both bankruptcy and companies legislation32. Its draft legislation incorporated a broad definition of "transaction" "so as to embrace a wide range of means by which property may be disposed of"33. As the Court observed in its cognate judgment, Grant Samuel Corporate Finance Pty Ltd v Fletcher34, under the law as it stood when the LRC published the Harmer Report, an action to avoid an antecedent transaction generally had to be commenced within six years of the date of commencement of the winding 29 Australia, The Law Reform Commission, General Insolvency Inquiry, Report 30 Harmer Report, vol 1 at 266 [629]. 31 Harmer Report, vol 1 at 267 [632]. 32 Harmer Report, vol 1 at 267–268 [633]. 33 Harmer Report, vol 1 at 269 [637]. 34 [2015] HCA 8 at [18]. Hayne Submissions complaining about inordinate delays in commencing proceedings in respect of voidable transactions led the LRC to conclude36: "It is therefore considered desirable to place liquidators under a more rigorous but, nonetheless, reasonable time limitation for taking action under these provisions." That conclusion was reflected in a draft provision that applications for the avoidance of preferential transactions, transactions at an undervalue, and transactions made with intent to defeat, delay or obstruct creditors, should not be made by the liquidator after the expiration of three years from the relevant day "unless the Court, by order, so allows"37. The Corporate Law Reform Act 1992 (Cth) inserted a new Pt 5.7B into the Corporations Law entitled "Recovering Property or Compensation for the Benefit of Creditors of Insolvent Company". The new Part included ss 588FE and 588FF. Section 588FF(3) as enacted provided: "An application under subsection (1) may only be made: (a) within 3 years after the relation-back day; or (b) within such longer period as the Court orders on an application under this paragraph made by the liquidator within those 3 years." The Explanatory Memorandum for the Bill that became the 1992 Act referred to the retrospective nature of the avoidance provisions, which had been noted in the Harmer Report, and added38: 35 Bankruptcy Act 1966 (Cth), ss 122, 127(5); Companies Act 1981 (Cth), s 451; Companies Code, s 451. This time limit was based on the assumed application of the time limit in s 127(5) of the Bankruptcy Act to the relevant provisions of the Companies Code: see BP Australia Ltd v Brown (2003) 58 NSWLR 322 at 344 [105] in the context of the equivalent provision in the Corporations Law. 36 Harmer Report, vol 1 at 283 [688]. 37 Harmer Report, vol 2 at 139, s AT8. 38 Australia, House of Representatives, Corporate Law Reform Bill 1992, Explanatory Memorandum at [1034]. Hayne "Because it operates in a retrospective fashion, it is necessary to balance the interests of unsecured creditors of the insolvent and persons who have engaged in fair transactions with the insolvent." Section 588FF(3) was reproduced in its original form in the Corporations Act 2001 (Cth). However, it was amended by the Corporations Amendment (Insolvency) Act 2007 (Cth) to introduce an alternative time limit of 12 months after the first appointment of a liquidator in relation to the winding up of the company. That amendment gave effect to a recommendation of the Corporations and Markets Advisory Committee, published in October 200439. Its purpose was stated in the Explanatory Memorandum as follows40: "To address situations where there is a long period between the relation- back day and the termination of a [deed of company arrangement], subsection 588FF(3) will be amended to allow a liquidator either three years from the relation-back day or one year from their appointment to challenge voidable transactions, whichever is later." The form of the 2007 amendment was the repeal and re-enactment of s 588FF(3)(a), the omission from s 588FF(3)(b) of the words "within those 3 years" and their substitution with the words "during the paragraph (a) period"41. The respondents relied, in support of their construction, upon what amounted to a re-enactment of the provision without any alteration affecting its interpretation in Brown. The appellants submitted that not a great deal of weight should be attributed to that legislative inaction. 39 Corporations and Markets Advisory Committee, Rehabilitating large and complex enterprises in financial difficulties, Report, October 2004, Recommendation 50. 40 Australia, House of Representatives, Corporations Amendment (Insolvency) Bill 2007, Explanatory Memorandum at [7.206]. 41 Corporations Amendment (Insolvency) Act 2007 (Cth), Sched 4, items 69–70. Hayne What has been called the "re-enactment presumption"42 was explained by this Court in Re Alcan Australia Ltd; Ex parte Federation of Industrial, "There is abundant authority for the proposition that where the Parliament repeats words which have been judicially construed, it is taken to have intended the words to bear the meaning already 'judicially attributed to [them]'". (footnote omitted) The Court noted that the validity of the proposition has been questioned but accepted it as a permissible approach to interpretation. Alcan was cited, and a similar approach applied, in Electrolux Home Products Pty Ltd v Australian Workers' Union44. As McHugh J observed45: "The principle that the re-enactment of a rule after judicial consideration is to be regarded as an endorsement of its judicial interpretation has been criticised, and the principle may not apply to provisions re-enacted in 'replacement' legislation. However, industrial relations is a specialised and politically sensitive field with a designated Minister and Department of State. It is no fiction to attribute to the Minister and his or her Department and, through them, the Parliament, knowledge of court decisions — or at all events decisions of this Court — dealing with that portfolio." (emphasis in original; footnote omitted) In this case a substantive amendment is involved46, an amendment which followed upon an expert review of the law and presumably the case law. 42 Pearce and Geddes, Statutory Interpretation in Australia, 8th ed (2014) at 136–145 43 (1994) 181 CLR 96 at 106; [1994] HCA 34. 44 (2004) 221 CLR 309; [2004] HCA 40. 45 (2004) 221 CLR 309 at 346–347 [81]; see also at 323–325 [7]–[8] per Gleeson CJ, 370–371 [161] per Gummow, Hayne and Heydon JJ, 398 [251] per Callinan J. 46 Cf consolidating statutes, for which the principle has been held weak or inapplicable: Pearce and Geddes, Statutory Interpretation in Australia, 8th ed (2014) at 141–143 [3.48]; Williams v Dunn's Assignee (1908) 6 CLR 425 at 441 per Griffith CJ; [1908] HCA 27; Melbourne Corporation v Barry (1922) 31 CLR (Footnote continues on next page) Hayne The Report of the Corporations and Markets Advisory Committee did not discuss shelf orders. Nevertheless, it is difficult to imagine that the judgments at first instance and on appeal in Brown were not known to those involved in the field as interpretive decisions of considerable significance and likely to be applied nationally. The legislative history is a factor which may support a construction of s 588FF(3) which authorises shelf orders, if such a construction is reasonably open from the text. Text, context and purpose Section 588FF(3)(b) is located in Pt 5.7B, which is its immediate statutory context. An important element of that context is the concept of a "voidable transaction" and, embedded in that, the concept of a "transaction". The term "transaction" is non-exhaustively defined in s 9 of the Act in relation to a body corporate as "a transaction to which the body is a party". There follows a list of examples, which includes conveyances, transfers, dispositions, charges, guarantees, payments, the incurring of obligations, releases or waivers, and loans. The definition includes a transaction that has been completed or given effect to, or that has been terminated. Being non-exhaustive, the definition extends to the ordinary meaning of "transaction", which includes having dealings or doing business with another47. The definition covers conduct of a company ranging from an uncomplicated transfer or payment to a complex arrangement which may require difficult, evaluative judgments as to its definition and characteristics, those who were party to it, and the time when it was done, or acts were done to give effect to it. The classes of "voidable transactions" are set out in s 588FE by reference to designations, each of which is defined in a separate provision of Pt 5.7B. They are unfair preferences48, uncommercial insolvent transactions49, 174 at 188 per Isaacs J; [1922] HCA 56. See also Kidd, "The Construction of Consolidating Statutes and the Barras Principle: The Significance of Farrell v Alexander", (1977) 51 Australian Law Journal 256. 47 The New Shorter Oxford English Dictionary, (1993), vol 2 at 3366, "transaction" and "transact". 48 Act, s 588FA. 49 Act, s 588FB. Hayne transactions50, unfair loans to a company51, and unreasonable director-related transactions52. They are "voidable transactions" if entered into within certain periods, or if acts were done for the purpose of giving effect to them during those periods. Section 588FF(1) empowers the court to make the orders for which it provides on the condition that: "on the application of a company's liquidator, [the] court is satisfied that a transaction of the company is voidable because of section 588FE". As the appellants submitted, an application under s 588FF(1) must seek orders for which that subsection provides, which concern a transaction alleged to be voidable under s 588FE between the company and one or more other parties. The transaction must be identified, in terms of conduct of the company. It must be arguably capable of inclusion in one of the designated classes of transaction mentioned in s 588FE. The specification of the time that it was done, or of an act done to give effect to it within a relevant period, would also be necessary to the contention that it was a voidable transaction. Parties to the transaction who would be affected by the orders sought would have to be identified and those parties named as respondents. The time limits prescribed by s 588FF(3) apply to "[a]n application under subsection (1)". That term refers to the class of applications which can be made by liquidators under s 588FF(1) in relation to a transaction alleged to be voidable. The time limit in par (a) applies to all such applications, save for those the subject of an order under par (b). The text of par (b), read with the opening words of s 588FF(3), leaves open the construction that the "longer period" may be ordered only for a prospective application relating to a particular transaction or transactions. The text also leaves open the construction that a "longer period" may be ordered for any application under subs (1). The appellants accepted that it was a possible view of the provision that an order under s 588FF(3)(b) could extend generally the period otherwise fixed under s 588FF(3)(a). That was not, they submitted, the better view. The parties relied upon textual and contextual 50 Act, s 588FC. 51 Act, s 588FD. 52 Act, s 588FDA. Hayne indicators and purposive and consequentialist arguments in support of their preferred constructions. The appellants submitted that an application under s 588FF(3)(b) is an application to create, by order, a new period within which an application possessing the characteristics required by s 588FF(1) can be brought. The premise underlying s 588FF(3)(b) was said to be that, at the time of making an application under that provision, there was no form of application under s 588FF(1) that the liquidator was then able, or at least willing, to make. The appellants submitted that under s 588FF(3)(b) the court makes an order that a stated longer period is the period within which an application may be made by a liquidator for orders under s 588FF(1), in relation to the transaction. The throughout the appellants observed that the definite article is repeated subsections of s 588FF(1). In the end, with respect, the submission was conclusionary in character. It identified the constructional choice, but did not assist in its resolution. The appellants relied upon the words "may only be made" in s 588FF(3) as indicating a limited scope for the power under par (b). As this Court observed in Grant Samuel, those words impose a requirement as to time as an essential condition of the right conferred by s 588FF(1) to bring proceedings for orders with respect to voidable transactions53. They do no more than that. The words "may only" give no guidance about the scope of the power to extend time. As the respondents pointed out, the only express essential condition upon the exercise of the power under s 588FF(3)(b) is that the application for an order under that paragraph be made within the par (a) period. In the event, there is no textual support for preferring one construction over the other. That conclusion directs attention to the purposive and consequentialist arguments which tended to dominate the debate about construction. The function of s 588FF(3)(b), which reflects its immediate purpose, is to confer a discretion on the court to mitigate, in an appropriate case, the rigours of the time limits imposed by par (a). That is a discretion to be exercised having regard to the scope and purposes of Pt 5.7B, characterised in the Harmer Report as the continuing "policy" which underpinned its recommendations. That policy included the avoidance of transactions by which an insolvent company has disposed of property in circumstances that are regarded by the legislature as unfair to the general body of unsecured creditors. It is, however, a policy 53 [2015] HCA 8 at [22]. Hayne qualified in its application by the requirement that liquidators be placed under a reasonable time limitation for taking action under the voidable transaction provisions. A purpose of that qualification, expressed in "clear and emphatic" terms, is to favour certainty for those who have entered into transactions with the company during the periods in respect of which designated transactions may be voidable54. There is, however, no independent basis for the assertion that any extension of time which does not identify a particular transaction or transactions must be an unreasonable prolongation of uncertainty militating against a construction which would allow such an order to be made. The section provides for the exercise of discretion by the court. Questions of what is a reasonable or an unreasonable prolongation of uncertainty and the scope of such uncertainty are more appropriately considered case-by-case in the exercise of judicial discretion than globally in judicial interpretation of the provision. The appellants set out a number of "policy factors" which they said militated against a broad construction. In summary these were: disadvantage to potential defendants not identified in a shelf order; the encouragement to liquidators not to identify potential defendants, thereby reducing the prospect of opposition at initial application; the risk of a multiplicity of litigation by successive defendants applying to reagitate extension applications of which they had not been given initial notice; the risk of inconsistent outcomes on applications to set aside extension orders by respective defendants; no finality, as claims by defendants that they were identifiable, but not identified, might cause ongoing challenges to any extension granted; want of certainty for liquidators and prospective defendants who might seek to have leave revoked after it had been granted and after proceedings had commenced; the potential for wasted costs to be incurred contrary to the interests of creditors; and 54 Grant Samuel Corporate Finance Pty Ltd v Fletcher [2015] HCA 8 at [21], citing Texel Pty Ltd v Commonwealth Bank of Australia [1994] 2 VR 298 at 300. Hayne the determination of applications by reference only to evidence that the liquidator elected to put before the court. All of those are considerations which may inform the approach to the exercise of discretion by the court in cases in which applications are made for shelf orders under s 588FF(3)(b). They are considerations which could have moved but did not move the legislature, when it amended s 588FF(3), to exclude the application of the power conferred by par (b) to shelf orders. In the end, as the appellants accepted, the availability of shelf orders is a construction open on the text of s 588FF(3)(b). It is a construction which is consistent with the evident purpose of that provision, to allow the court to mitigate the strictness of the time limits imposed by par (a) in an appropriate case. The effect of re-enactment of s 588FF(3), in light of the construction adopted by the Court of Appeal, is no barrier to that construction. Indeed it may be taken to support it. Conclusion For the preceding reasons the appeal will be dismissed with costs.

HIGH COURT OF AUSTRALIA THE DIRECTOR OF PUBLIC PROSECUTIONS APPELLANT AND RESPONDENT Director of Public Prosecutions v Dalgliesh (a pseudonym) [2017] HCA 41 11 October 2017 ORDER Appeal allowed. Set aside the order of the Court of Appeal of the Supreme Court of Victoria made on 18 March 2016. Remit the matter to the Court of Appeal of the Supreme Court of Victoria for determination of the appeal against sentence. On appeal from the Supreme Court of Victoria Representation G J C Silbert QC with B L Sonnet for the appellant (instructed by Solicitor for Public Prosecutions (Vic)) O P Holdenson QC with P S Tiwana for the respondent (instructed by Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Director of Public Prosecutions v Dalgliesh (a pseudonym) Criminal law – Sentencing – Current sentencing practices – Incest – Crown appeal on ground of manifest inadequacy – Where s 5(2) of Sentencing Act 1991 (Vic) provided that in sentencing an offender a court must have regard to current sentencing practices – Where Court of Appeal held that sentence not wholly outside permissible range reflected in current sentencing practices – Where Court of Appeal held that current sentencing so low as to reveal error in principle – Whether latter conclusion required appellate intervention to correct error reflected in sentence the subject of appeal. Words and phrases – "comparable cases", "current sentencing practices", "manifest inadequacy", "maximum penalty", "reasonable consistency". Sentencing Act 1991 (Vic), s 5(2). KIEFEL CJ, BELL AND KEANE JJ. Section 5(2)(b) of the Sentencing Act 1991 (Vic) ("the Sentencing Act") provides that in sentencing an offender a court must have regard to current sentencing practices. In the present case, the Court of Appeal of the Supreme Court of Victoria dismissed an appeal by the Director of Public Prosecutions ("the Director") against a sentence for the offence of incest. The relevant ground of appeal was that the sentence was manifestly inadequate1. The Court of Appeal held that the sentence was within the range indicated by current sentencing practices and, on that basis, dismissed the Director's appeal, even though the Court also concluded that this range is so low that it "reveals error in principle" in that it is not proportionate to the objective gravity of the offending or the moral culpability of the offender2. Given that conclusion, the Court of Appeal erred by treating the range established by current sentencing practices as decisive of the appeal before it. Accordingly, the appeal to this Court must be allowed. The Sentencing Act Section 5(2) of the Sentencing Act relevantly provides: "In sentencing an offender a court must have regard to – the maximum penalty prescribed for the offence; and current sentencing practices; and the nature and gravity of the offence; and the offender's culpability and degree of responsibility for the offence; and (daa) the impact of the offence on any victim of the offence; and 1 The Director appealed on two grounds. The second ground related to orders for cumulation, and was not the subject of appeal to this Court. 2 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at Bell the personal circumstances of any victim of the offence; and (db) any injury, loss or damage resulting directly from the offence; and (e) whether the offender pleaded guilty to the offence and, if so, the stage in the proceedings at which the offender did so or indicated an intention to do so; and the offender's previous character; and the presence of any aggravating or mitigating factor concerning the offender or of any other relevant circumstances." Instinctive synthesis The considerations to which a sentencing judge is obliged by s 5(2) to have regard cannot be applied mechanically. Such an application is not possible given that the factors that must be taken into account are incommensurable, and indeed, in many respects, inconsistent. In Elias v The Queen3, French CJ, Hayne, Kiefel, Bell and Keane JJ said: "As this Court has explained on more than one occasion, the factors bearing on the determination of sentence will frequently pull in different directions4. It is the duty of the judge to balance often incommensurable factors and to arrive at a sentence that is just in all of the circumstances." The balancing of the factors listed in s 5(2) of the Sentencing Act in order to arrive at a sentence that is just in all the circumstances is a matter of instinctive synthesis, as explained in Wong v The Queen5 by Gaudron, Gummow and Hayne JJ: (2013) 248 CLR 483 at 494 [27]; [2013] HCA 31. See also s 5(1)(a) of the Sentencing Act. 4 Veen v The Queen [No 2] (1988) 164 CLR 465 at 476; [1988] HCA 14; Pearce v The Queen (1998) 194 CLR 610 at 624 [46]; [1998] HCA 57; AB v The Queen (1999) 198 CLR 111 at 156 [115]; [1999] HCA 46; Ryan v The Queen (2001) 206 CLR 267 at 283-284 [49], 307 [136]; [2001] HCA 21. (2001) 207 CLR 584 at 611 [75]; [2001] HCA 64 (emphasis in original, footnote omitted). Bell "[T]he task of the sentencer is to take account of all of the relevant factors and to arrive at a single result which takes due account of them all. That is what is meant by saying that the task is to arrive at an 'instinctive synthesis'. This expression is used, not as might be supposed, to cloak the task of the sentencer in some mystery, but to make plain that the sentencer is called on to reach a single sentence which, in the case of an offence like the one now under discussion, balances many different and conflicting features." This statement was referred to, with evident approval, by Gleeson CJ, Gummow, Hayne and Callinan JJ in Markarian v The Queen6. While the instinctive synthesis must be informed by each of the factors listed in s 5(2), the extent to which each factor bears upon the case is inevitably a matter for judgment. The process of instinctive synthesis thus allows a measure of discretion to the sentencing judge. The discretionary nature of the judgment required means that there is no single sentence that is just in all the circumstances. Nevertheless, it is well understood that a sentence may be so clearly unjust, because it is either manifestly inadequate or manifestly excessive, that it may be inferred that the sentencing discretion has miscarried. The question raised for determination by the Court of Appeal in the present case was whether the sentence imposed on the respondent was manifestly inadequate. The appeal to this Court is concerned with the significance accorded by the Court of Appeal to the consideration referred to in s 5(2)(b) of the Sentencing Act in determining the question before it. In this regard, it may be said at the outset that the terms of s 5(2) are clear such that, while s 5(2)(b) states a factor that must be taken into account in sentencing an offender, that factor is only one factor, and it is not said to be the controlling factor. It is also important to note the consideration referred to in s 5(2)(a) – the "maximum penalty prescribed for the offence". In this regard, in Markarian7, the plurality said: "[C]areful attention to maximum penalties will almost always be required, first because the legislature has legislated for them; secondly, because they invite comparison between the worst possible case and the case (2005) 228 CLR 357 at 373-375 [37]; [2005] HCA 25. (2005) 228 CLR 357 at 372 [31]. Bell before the court at the time; and thirdly, because in that regard they do provide, taken and balanced with all of the other relevant factors, a yardstick." As will be seen, the range of sentences applied by the sentencing judge in the present case pays scant, if any, regard to the maximum penalty prescribed for the offence of incest. In particular, it is to be noted that the maximum penalty for incest from 1949 until 1997 was 20 years' imprisonment. From 1 September to 25 years' imprisonment8. In the second reading speech for the Bill which implemented the increase, the then Attorney-General said9: the maximum sentence incest was increased for "The government believes that sexual crimes against children are extremely serious and when they occur have the potential to ruin young lives. This view has been repeatedly expressed by members of the public, victims' groups and other specialist bodies, and is now being acted upon." The proceedings The respondent was convicted on his plea of guilty of one act of incest ("charge 1") and one act of sexual penetration of a child under 16 ("charge 4") upon complainant A. He also pleaded guilty to, and was convicted of, one act of incest ("charge 2") and one act of indecent assault ("charge 3") upon complainant B. A and B are sisters. At the time of the offending, A was aged between nine and 13 years and B was aged between 15 and 16 years. B has been diagnosed with a mild intellectual disability and attention deficit hyperactivity disorder. This appeal is concerned with the sentence imposed in respect of charge 1, which alleged that the respondent, contrary to s 44(2) of the Crimes Act 1958 (Vic), between 16 January 2013 and 13 March 2013, took part in an act of sexual penetration with A – whom he knew to be under the age of 18 years and whom he knew to be the child of his then de facto spouse. The respondent had commenced a relationship with A's mother in 2009. After some time, he moved in with the mother and the complainants, and their younger brother. 8 Sentencing and Other Acts (Amendment) Act 1997 (Vic), ss 2(2), 60(1), Sched 1 item 21(a). 9 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 24 April 1997 Bell Prior to the offence the subject of charge 1, and while not yet in a de facto relationship with A's mother, the respondent committed the offence of sexual penetration of a child under 16 on A (charge 4). The circumstances of that offence were that, when A was between the ages of nine and 13, she entered the bedroom that the respondent shared with her mother. The respondent was in the bedroom having recently had a shower. A climbed into the bed. The respondent approached her, took his towel off, inserted his penis into her mouth, grabbed her head, and moved it back and forth10. Subsequently, in early 2013, the offence the subject of charge 1 was committed. By this time, the respondent was in a de facto relationship with A's mother. The circumstances of this offence were that A got into the bed that the respondent shared with her mother, while the mother was in the shower. The respondent moved himself towards A and inserted his penis into her vagina. A was aged 13 at the time. The respondent ejaculated inside her. As a result, A fell pregnant. A later told her mother that the pregnancy was due to the fact that she had had sex with a male friend from school. The pregnancy was terminated. As a result of the mother's belief that A had been impregnated by a friend from school, the family moved to a new town in rural Victoria. The respondent knew of the pregnancy and A's lie to her mother as to its cause. The respondent knowingly acquiesced in the lie, thereby permitting himself to continue to live with the family at their new residence. The offences the subject of charges 2 and 3 were committed between 1 January 2014 and 28 November 2014 and 28 November 2014 and 30 November 2014 respectively. These were acts that involved the respondent placing his penis inside (charge 2) and near (charge 3) B's vagina. On 11 September 2015, the respondent pleaded guilty to each charge before the County Court of Victoria. He was sentenced on that day. 10 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at Bell The sentence In relation to charge 1, the sentencing judge said that the fact that the complainant fell pregnant as a result of the offending was an aggravating factor11. His Honour went on to say12: "Clearly your offending is serious, and the sentence that I impose must be calculated to deter you and others from offending in this manner. You must also be punished for what you have done". His Honour described the offending as having had a "profoundly traumatic effect" upon the complainants and their mother13. The sentencing judge noted that, according to a psychologist's report tendered by the defence, the respondent suffered from post-traumatic stress disorder and depression. He was also said to be on the lower end of the autism spectrum, which impaired his impulse control and judgment14. The sentencing judge took into account the respondent's early guilty plea15, and the fact that he had no prior convictions16. It was also noted that when being interviewed by investigating police, the respondent made a number of admissions against interest, and that he had demonstrated genuine remorse for his actions17. The 11 Director of Public Prosecutions v Dalgliesh unreported, County Court of Victoria, 11 September 2015 at [8]. 12 Director of Public Prosecutions v Dalgliesh unreported, County Court of Victoria, 11 September 2015 at [11]. 13 Director of Public Prosecutions v Dalgliesh unreported, County Court of Victoria, 11 September 2015 at [12]. 14 Director of Public Prosecutions v Dalgliesh unreported, County Court of Victoria, 11 September 2015 at [15]. 15 Director of Public Prosecutions v Dalgliesh unreported, County Court of Victoria, 11 September 2015 at [4]. 16 Director of Public Prosecutions v Dalgliesh unreported, County Court of Victoria, 11 September 2015 at [5]. 17 Director of Public Prosecutions v Dalgliesh unreported, County Court of Victoria, 11 September 2015 at [16]. Bell sentencing judge considered that the respondent's prospects of rehabilitation were good. In this regard, it was noted that he had the support of his family18. The respondent was sentenced three years and six months' imprisonment on charge 1, to three years' imprisonment on charge 2, to 18 months' imprisonment on charge 3, and to three years' imprisonment on charge 4. Nine months of the sentence on charge 2, six months of the sentence on charge 3 and nine months of the sentence on charge 4 were ordered to be served cumulatively upon the sentence on charge 1 and upon each other. In respect of the total term of imprisonment of five years and six months, a non-parole period of three years was imposed19. The respondent was declared to be a serious sex offender and placed on the Sex Offenders Register for life20. The Director's appeal to the Court of Appeal The Director lodged a notice of appeal on two grounds: that the sentence imposed on charge 1 was manifestly inadequate ("ground 1"); and that the orders for cumulation resulted in a total effective sentence which was manifestly inadequate ("ground 2")21. Subsequently, the Deputy Registrar of the Court of Appeal, at the request of the Court, wrote to the parties. That email, dated 21 January 2016, stated that "[t]he issue on the appeal is whether the sentences were within range. That issue is to be determined by reference to current sentencing practices." The email went on to state that the Court considered the present case to be an appropriate vehicle for consideration to be given to the adequacy of "current sentencing practices" for the offence of incest. The Court advised the parties that its "decision on the general question will not, of course, affect the outcome of the appeal." 18 Director of Public Prosecutions v Dalgliesh unreported, County Court of Victoria, 11 September 2015 at [16]. 19 Director of Public Prosecutions v Dalgliesh unreported, County Court of Victoria, 11 September 2015 at [18]-[24]. 20 Director of Public Prosecutions v Dalgliesh unreported, County Court of Victoria, 11 September 2015 at [27]. 21 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at [3]. Ground 2 is not the subject of appeal to this Court. Bell The Court of Appeal The Director argued that the sentence of three years and six months' imprisonment on charge 1 was manifestly inadequate, given that the respondent had engaged in unprotected penile-vaginal sexual intercourse with a 13-year-old complainant, and that this had caused her to fall pregnant22. In addition, the respondent had breached the trust he owed to his young and vulnerable stepdaughter. It was also said that the respondent's silence had lent support to her explanation that another person was responsible for her pregnancy, which increased his moral culpability23. The Director submitted that the offending fell within the mid-range category of seriousness, with pregnancy being an obvious aggravating factor24. The respondent argued that, while the sentence on charge 1 "could be characterised as lenient"25, it was nevertheless within the permissible range open to the sentencing judge, as demonstrated by current sentencing practices. The respondent submitted that comparable cases showed that the sentence was reasonably open to the sentencing judge, especially as there were significant The Court of Appeal (Maxwell ACJ, Redlich and Beach JJA) dismissed the appeal on the ground that the Director was "unable to establish that the sentences imposed were outside the range of sentences reasonably open to the sentencing judge based upon existing sentencing standards."27 22 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at 23 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at 24 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at 25 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at 26 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at 27 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at Bell As had been foreshadowed in its email of 21 January 2016, the Court of Appeal dealt separately with the determination of the Director's appeal and the general question of the adequacy of current sentencing practices for the offence of incest. The Court set out its reasons for dismissing the appeal in Pt A of its reasons. In Pt B of its reasons, the Court went on to determine that current sentencing practices for the offence of incest were inadequate. Part A of the reasons The Court of Appeal noted that s 5(2)(b) of the Sentencing Act requires judges to have regard to current sentencing practices, and observed that comparable cases within the same category of seriousness as the case at hand will generally "provide an important, though limited, guide to the range of sentences reasonably open to the sentencing judge."28 The Court considered 12 cases of incest involving pregnancy, in which the range of sentences extended from four to seven years' imprisonment29. The Court made particular reference to Director of Public Prosecutions (Vic) v BGJ30 and RSJ v The Queen31, both said to be examples of the "worst category" of this kind of offending32. In BGJ, the offender pleaded guilty to one charge of incest against his daughter, and one of indecent assault. The offences were committed while he was on parole for previous incest offences against all three of his daughters. As a result of the later offending, his daughter fell pregnant. She gave birth to a severely disabled daughter who, 20 years later, became the victim of the offender's indecent assault. The Court in that case allowed the Director's appeal and resentenced the offender to six years' imprisonment on the incest charge. In RSJ, the appellant had sexually abused his daughter over 28 years. Over the period of the abuse the complainant had borne four children to her 28 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at [49], citing Hasan v The Queen (2010) 31 VR 28 at 41 [55]. 29 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at 30 (2007) 171 A Crim R 74. 31 [2012] VSCA 148. 32 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at Bell father, one of whom died and two of whom were born with intellectual difficulties. He pleaded guilty to 10 charges of incest. On count 5, an offence of incest resulting in pregnancy, he received a sentence of four years. His appeal against the total effective sentence was dismissed. It may be noted, however, that individual sentences were not the subject of any separate consideration by the Court of Appeal and the total effective sentence of 22 years and five months' imprisonment was upheld. The decisions in BGJ and RSJ, in particular, persuaded the Court of Appeal that the sentence on charge 1, "though extremely lenient, was not wholly outside the permissible range."33 The Court went on to say34: "But for the constraints of current sentencing practice, the objective seriousness of the conduct constituting charge 1 demanded a considerably longer sentence than three years and six months, even allowing for the factors in mitigation. [The respondent's] conduct was opportunistic and abhorrent. His morally repugnant conduct has had lasting consequences for the victim and her family." Part B of the reasons In the second part of its reasons, the Court of Appeal, having reviewed the sentencing information provided to it, concluded that "current sentencing does not reflect the objective gravity of such offending or the moral culpability of the offender."35 Their Honours noted that the offence of incest carries with it a maximum penalty of 25 years' imprisonment, the "highest in the criminal calendar, short of life imprisonment", and observed that the fixing of such a high penalty reflects the community's abhorrence of sexual crimes against children36. 33 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at 34 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at 35 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at 36 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at Bell The Court held that current sentencing practices for incest are "demonstrably inadequate"37. In so holding, their Honours observed that "[t]he sentences imposed devalue the objective gravity of the offence, as informed by the egregious breach of trust and the appalling consequences for victims."38 The Court went on to say39: "[C]urrent sentencing for incest reveals error in principle. The sentencing practice which has developed is not a proportionate response to the objective gravity of the offence, nor does it sufficiently reflect the moral culpability of the offender. Sentences for incest offences of mid-range seriousness must be adjusted upwards. That is a task for sentencing judges and, on appeal, for this Court. The criminal justice system can be – and should be – self-correcting." Their Honours said that "[b]ut for the constraints of current sentencing which … reflect the requirements of consistency", they would have had "no hesitation" in concluding that the sentence imposed on the respondent was manifestly inadequate40. Their Honours concluded41: "On the basis of the principles we have set out, a sentence of the order of seven years' imprisonment was warranted for charge 2, with the aggravating circumstance of pregnancy requiring a significantly higher sentence again on charge 1." The appeal to this Court On appeal to this Court, pursuant to a grant of special leave in relation to the sentence imposed on charge 1 only, the Director argued that the Court of 37 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at 38 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at 39 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at [128] (footnote omitted). 40 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at 41 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at Bell Appeal erred by failing to conclude that the sentencing judge had erred by imposing a sentence for the offence of incest on charge 1 that was manifestly inadequate. In particular, it was said that the Court of Appeal erred in elevating the significance of current sentencing practices so that they were determinative of the issue. The Director's submissions The Director submitted that the issue raised by his appeal to the Court of Appeal was whether the sentence was "unreasonable or plainly unjust"42. It was submitted that nothing in s 5(2) of the Sentencing Act suggests that a sentencing judge should give greater emphasis to "current sentencing practices" than to any other of the factors in s 5(2) so as to fetter the exercise of the instinctive synthesis. The Director submitted that past sentences are not determinative of the upper and lower limits of the proper range of the sentencing discretion in respect of a particular offence43. In particular, the Director argued that the Court of Appeal erred in regarding BGJ and RSJ as fixing the range of sentences appropriate to the worst category of incest. In addition, it was said to be apparent from Pt B of the reasons of the Court of Appeal that the Court recognised that current sentencing practices were endemically inadequate for the offence of incest. The respondent's submissions The respondent submitted that the Court of Appeal was rightly mindful of the purpose of the statutory requirement to have regard to "current sentencing practices", that is, to promote a consistency of approach in the sentencing of offenders because like cases should be treated in a like manner44. The respondent submitted that the Court of Appeal, in dismissing the Director's appeal, did not support an approach to sentencing which was inconsistent with the instinctive synthesis. 42 House v The King (1936) 55 CLR 499 at 505; [1936] HCA 40. 43 R v Pham (2015) 256 CLR 550 at 558 [27]; [2015] HCA 39. 44 See Wong v The Queen (2001) 207 CLR 584 at 591 [6], 608 [65]; Hili v The Queen (2010) 242 CLR 520 at 535-536 [49]; [2010] HCA 45; R v Pham (2015) 256 CLR Bell The respondent also invoked the residual discretion of a court of appeal to dismiss a Crown appeal against sentence, arguing that the Court of Appeal determined ground 1 in conformity with the argument advanced by the Director on his appeal to that Court. It was submitted that the Director had invited the Court to determine the appeal as to the adequacy of the sentence imposed on charge 1 on the basis of a comparison between the individual sentence imposed and the sentences imposed by sentencing courts in "comparable cases". Having proceeded in this way, so it was said, the Director ought not now be heard to complain to this Court of the course adopted by the Court of Appeal. In addition, the respondent submitted that the Director should not now be allowed to resile from his acceptance in the Court of Appeal that the general uplift of sentences for the offence of incest should have no bearing on the disposition of the Crown appeal against sentence in this case45. The Court of Appeal calibrated the range of sentences available in this case by using the decisions in BGJ and RSJ as sentences appropriate to the worst category of incest involving pregnancy, and proceeding to a conclusion that the range of sentences available in this case – a case of mid-level seriousness – must be substantially lower than the sentences imposed in those cases. Quite apart from the issue as to the endemic inadequacy of the sentences imposed in those cases as demonstrated in Pt B of the Court of Appeal's reasons, this use of the decisions in BGJ and RSJ was unorthodox in two respects: first, the imposition of a just sentence is not to be approached as if it were a mechanical or arithmetical exercise46; and secondly, the Court of Appeal misunderstood what is involved in identifying an offence as falling within the worst category. In this latter regard, in R v Kilic47, this Court said: "What is meant by an offence falling within the 'worst category' of the offence is that it is an instance of the offence which is so grave that it 45 See, for example, Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at [67]-[69]. 46 Markarian v The Queen (2005) 228 CLR 357 at 372-375 [30]-[39]. 47 (2016) 91 ALJR 131 at 137 [18]-[19]; 339 ALR 229 at 234-235; [2016] HCA 48 (footnotes omitted). See also R v Tait (1979) 24 ALR 473 at 484; Veen v The Queen [No 2] (1988) 164 CLR 465 at 478; Nguyen v The Queen (2016) 256 CLR 656 at 668-669 [34]; [2016] HCA 17. Bell warrants the imposition of the maximum prescribed penalty for that offence. Both the nature of the crime and the circumstances of the criminal are considered in determining whether the case is of the worst type. Once it is recognised that an offence falls within the 'worst category', it is beside the point that it may be possible to conceive of an even worse instance of the offence … Where, however, an offence, although a grave instance of the offence, is not so grave as to warrant the imposition of the maximum prescribed penalty … a sentencing judge is bound to consider where the facts of the particular offence and offender lie on the 'spectrum' that extends from the least serious instances of the offence to the worst category, properly so called. It is potentially confusing, therefore, and likely to lead to error to describe an offence which does not warrant the maximum prescribed penalty as being 'within the worst category'. It is a practice which should be avoided." Accordingly, an offence of incest properly characterised as being within the worst category would warrant a sentence approaching the maximum prescribed by Parliament. It is the maximum sentence prescribed by law which invites comparison between the worst possible cases and the case before the court48. Neither BGJ nor RSJ fixed a sentence approaching 25 years' imprisonment for each particular instance of incest with which it was concerned. The adequacy of the sentence in the present case could not properly be gauged on the basis that, if the sentences imposed in BGJ and RSJ were appropriate to the worst category of offending, then a sentence of the order of three and a half years' imprisonment was appropriate for a case of middle range offending. Current sentencing practices as a controlling factor The respondent contended that the Director was wrong to submit that the Court of Appeal allowed a miscarriage of the sentencing judge's discretion to go treating current sentencing practices as a controlling uncorrected by consideration. Rather, so it was said, current sentencing practices were used merely as a "check"49 on the exercise of the sentencing discretion. That contention cannot be sustained having regard to the clear statements by the Court of Appeal that are set out above. The effect of the passages cited is clear: only a perceived need to adhere to current sentencing practices prevented 48 See also Markarian v The Queen (2005) 228 CLR 357 at 372 [31]. 49 AB v The Queen (1999) 198 CLR 111 at 122 [18]. Bell the Court from allowing the Director's appeal. The "constraints of current sentencing"50 were the determinative factor in the disposition of the appeal. In particular, it was the overriding importance attached to the need to adhere to the range suggested by the comparable cases in the actual determination of the Director's appeal that inspired the bifurcated approach to the determination of the appeal adopted by the Court. Individualised justice and consistency in sentencing In Elias v The Queen51, French CJ, Hayne, Kiefel, Bell and Keane JJ said: "[t]he administration of the criminal law involves individualised justice". The imposition of a just sentence on an offender in a particular case is an exercise of judicial discretion concerned to do justice in that case. It is also the case that, as Gleeson CJ said in Wong v The Queen52: "[t]he administration of criminal justice works as a system … It should be systematically fair, and that involves, amongst other things, reasonable consistency." As was explained by French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ in Hili v The Queen53: "[t]he consistency that is sought is consistency in the application of the relevant legal principles." Section 5(2)(b) of the Sentencing Act informs the process of instinctive synthesis as a statutory expression of the concern that a reasonable consistency in sentencing should be maintained as an aspect of the rule of law. Reasonable consistency in the application of the relevant legal principles does not, however, require adherence to a range of sentences that is demonstrably contrary to principle. In Director of Public Prosecutions (Vic) v OJA54, Nettle JA, with whom Ashley and Redlich JJA agreed, said: 50 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at 51 (2013) 248 CLR 483 at 494-495 [27]. 52 (2001) 207 CLR 584 at 591 [6]. See also Lacey v Attorney-General (Qld) (2011) 242 CLR 573 at 596 [55]; [2011] HCA 10; R v Pham (2015) 256 CLR 550 at 53 (2010) 242 CLR 520 at 535 [49]. 54 (2007) 172 A Crim R 181 at 196 [30]-[31]. Bell "[T]he need to have regard to current sentencing practices does not mean that the measures of manifest excessiveness and manifest inadequacy are capped and collared by the highest and lowest sentences for similar offences hitherto imposed. … [I]t should not be thought that the statutory requirement to have regard to current sentencing practices forecloses the possibility of an increase or decrease in the level of sentences for particular kinds of offences. Over time, views may change about the length of sentence which should be imposed in particular cases and, when that occurs, the notions of manifest excessiveness and manifest inadequacy will be affected. … One must allow for the possibility that sentences to this point have simply been too low." Similarly, albeit in a somewhat different context, in R v Pham55, French CJ, Keane and Nettle JJ said that comparable cases may also serve as "yardsticks" to: the possible range of sentences "illustrate (although not define) available56. A court must have regard to such a decision in this way unless there is a compelling reason not to do so, which might include where the objective circumstances of the crime or subjective circumstances of the offender are so distinguishable as to render the decision irrelevant, or where the court is persuaded that the outcome itself in the other court was manifestly excessive or inadequate." The Court of Appeal was correct to conclude that current sentencing practices did not reflect the objective gravity of the offending. The Court of Appeal's acceptance that the range so indicated must apply in the present case was not warranted by the need for reasonable consistency in the administration of criminal justice. That is because the range was seen to reflect a disregard of the gravity of the offending as indicated by the maximum sentence prescribed for the offence, and the moral culpability of the offender. The view of the Court of Appeal that this amounted to an error of principle was clearly correct. 55 (2015) 256 CLR 550 at 560 [29]. 56 Hili v The Queen (2010) 242 CLR 520 at 537 [54]; Barbaro v The Queen (2014) 253 CLR 58 at 74 [41]; [2014] HCA 2. Bell In the Court of Appeal's review of the comparable cases in Pt B of the reasons, their Honours referred first57 to the decision of Kaye58, in which the Court of Criminal Appeal allowed an offender's appeal against a sentence of six years' imprisonment (with a minimum of four years to be served before eligibility for parole) on one count of incest. The complainant was the offender's 14-year-old stepdaughter. The offender had forcibly penetrated the complainant, despite her screams and struggles. The Court of Criminal Appeal set that sentence aside and substituted a sentence of four and a half years' imprisonment, with a minimum of three years to be served before eligibility for parole. Young CJ, with whom Murphy and Fullagar JJ agreed, said59: "[T]he range of sentences generally imposed for crimes of incest is lower than the sentence which the learned judge passed on this applicant. Indeed, the average sentence is probably somewhere of the order of three years' imprisonment. The crime of incest is a very serious one and one that greatly disturbs the public. In these days, many members of the public would, I think, take the view that the crime ought to be punished more severely than has recently come to be the case. I am very reluctant indeed to interfere with a sentence passed by an experienced trial judge, and the observations I have made about the level of sentencing for incest should not be overlooked but, nevertheless, for the reasons I have endeavoured to express in this case, I think that the sentence of six years … does warrant the interference of this Court." The decision in Kaye was, it may respectfully be said, remarkable, even for its own time. The observations of Young CJ suggest an appreciation that the decision of the Court of Criminal Appeal might not accord with the general moral sense of the community60. That was hardly surprising, given that if the relevant offending had been committed by an offender who was not a member of 57 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at 58 (1986) 22 A Crim R 366. 59 Kaye (1986) 22 A Crim R 366 at 367-368. 60 See also Kaye (1986) 22 A Crim R 366 at 369 per Fullagar J. Bell the victim's family, the objective gravity of the offending and the moral culpability of the offending would have attracted a sentence appropriate for what was, in the circumstances of the case, the violent sexual penetration of a young teenage girl against her will by a mature adult male who occupied, as a matter of fact, a position of trust vis-à-vis his victim. It is difficult to imagine that a sentence of less than six years' imprisonment could have been regarded as a just sentence in those circumstances even at that time. It invites the observation that the circumstance that the victim was the stepdaughter of the offender seems to have been treated, anomalously, as a matter in mitigation, rather than aggravation, of the offending. In any event, Kaye was a decision of its own time. In R v Kilic61, this Court said of s 5(2) of the Sentencing Act: "The requirement of currency recognises that sentencing practices for a particular offence or type of offence may change over time reflecting changes in community attitudes to some forms of offending. For example, current sentencing practices with respect to sexual offences may be seen to depart from past practices by reason, inter alia, of changes in understanding of the long-term harm done to the victim." Those observations are distinctly apposite here. The decision in Kaye was delivered in 1986. In the three decades since, sexual abuse of children by those in authority over them has been revealed as a most serious blight on society. The courts have developed – as the Court of Appeal accepted in "emphatically" rejecting the respondent's submission that "there was no violence accompanying the offence" – an awareness of the violence necessarily involved in the sexual penetration of a child, and of the devastating consequences of this kind of crime for its victims62. And, importantly, the maximum penalty for the crime of incest when Kaye was handed down in 1986 was 20 years' imprisonment. In 1997, the maximum sentence was increased to 25 years' imprisonment. Nevertheless, the gravitational pull exerted by Kaye operated to hold sentences for the offence at an anomalously low level. It is evident that the Court of Appeal declined to correct the anomaly because of the controlling effect accorded to s 5(2)(b) of the Sentencing Act. 61 (2016) 91 ALJR 131 at 137 [21]; 339 ALR 229 at 235. 62 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at Bell The Director's appeal should have been allowed In R v Pham63, French CJ, Keane and Nettle JJ said: "Appellate intervention on the ground of manifest excessiveness or inadequacy is not warranted unless, having regard to all of the relevant sentencing factors, including the degree to which the impugned sentence differs from sentences that have been imposed in comparable cases, the appellate court is driven to conclude that there must have been some misapplication of principle." In the present case, the Court of Appeal's conclusion that there had been a misapplication of principle which affected the range of sentences applied by the sentencing judge was sufficient to warrant appellate intervention on the ground of manifest inadequacy. Accordingly, this case is not the occasion to reconsider the bases on which it has been said in the past that Crown appeals on sentence should be a "rarity"64. In particular, this case does not require this Court to come to a concluded view of the reservations expressed by Gleeson CJ in Wong v The Queen65 as to the ongoing validity of the reasons previously given for treating Crown appeals on sentence as exceptional. The Court of Appeal concluded that the range of sentencing established by comparable cases was affected by an error of legal principle which was reflected in the sentence the subject of the appeal. The Director's appeal to the Court of Appeal in this case thus afforded that Court the opportunity "to perform its proper function … namely, to lay down principles for the governance and guidance of courts having the duty of sentencing convicted persons"66 and to "maintain adequate standards of punishment for crime … and … to correct a sentence which is so disproportionate to the seriousness of the crime as to shock 63 (2015) 256 CLR 550 at 559 [28] (footnote omitted). 64 Griffiths v The Queen (1977) 137 CLR 293 at 310, 327, 329-330; [1977] HCA 44; Malvaso v The Queen (1989) 168 CLR 227 at 233-234; [1989] HCA 58; Everett v The Queen (1994) 181 CLR 295 at 299-300; [1994] HCA 49. 65 (2001) 207 CLR 584 at 592-593 [9]-[10]. See also R v Pham (2015) 256 CLR 550 66 Griffiths v The Queen (1977) 137 CLR 293 at 310; Malvaso v The Queen (1989) 168 CLR 227 at 234. Bell the public conscience."67 And yet because of the bifurcated approach adopted by the Court of Appeal, this error was not corrected. Having reached a conclusion that current sentences were so manifestly disproportionate to the gravity of the offending and the moral culpability of the offender as to bespeak an error of principle, there was no good reason for the Court of Appeal not to correct the effect of the error of principle which it recognised68. To the extent that the sentencing judge sentenced the respondent in conformity with the range of sentences descending from Kaye, and in doing so imposed a sentence that was manifestly too low, it was the proper function of the Court of Appeal to correct that injustice. The Court of Appeal, in failing to do so, proceeded as it did for a particular reason which may now be discussed. Current sentencing practices and the plea of guilty Rather than determine the Director's appeal in the ordinary way, the Court of Appeal adopted a bifurcated approach to the Director's appeal. It proceeded, it seems, on the basis that this course was necessary to avoid perceived unfairness to the respondent, while at the same time allowing the Court of Appeal to correct, for the future, the unjustifiably low level of sentences for offending of this kind. This approach was explained in Ashdown v The Queen69: it is founded on the assumption that the offender pleaded guilty in the expectation that he or she would be sentenced consistently with current sentencing practices70. The Court of Appeal's concern to avoid this perceived unfairness to the respondent did not warrant the adoption of the bifurcated approach taken by the Court. The only expectation that an offender can have at sentence is of the imposition of a just sentence according to law. The Court of Appeal's assumption as to the basis on which the plea of guilty was entered does not warrant a different view. 67 R v Osenkowski (1982) 30 SASR 212 at 213; Wong v The Queen (2001) 207 CLR 68 Everett v The Queen (1994) 181 CLR 295 at 300; R v Clarke [1996] 2 VR 520 at 69 (2011) 37 VR 341 at 345-346 [5], 410-411 [207]. 70 Cf Director of Public Prosecutions v CPD (2009) 22 VR 533 at 549 [69]; Director of Public Prosecutions v DDJ (2009) 22 VR 444 at 460 [65]; Hasan v The Queen (2010) 31 VR 28 at 38 [43]; Winch v The Queen (2010) 27 VR 658 at 663 [23]; Trowsdale v The Queen [2011] VSCA 81 at [22]. Bell It is well established that even an express plea bargaining agreement between the prosecution and the accused cannot affect the duty of either the sentencing judge or a court of criminal appeal to impose a sentence which appears to the court, acting solely in the public interest, to be just in all of the circumstances71. A manifestly inadequate sentence is a failure of the due administration of criminal justice. An offender can have no expectation of a manifestly inadequate sentence whether or not he or she has pleaded guilty. It must be accepted, of course, that, as s 5(2)(e) recognises, a plea of guilty may ameliorate the sentence otherwise appropriate to the gravity of the offence for reasons which may be utilitarian or because the plea reflects well on the offender's prospects of rehabilitation. It is another thing altogether to say that an offender who pleads guilty thereby becomes entitled to be sentenced by reference to an erroneous understanding of the principles bearing upon the fixing of a just sentence. In addition, where the application of current sentencing practices, unbalanced by the other considerations in s 5(2), would lead to the imposition of a sentence that is manifestly inadequate, any expectation of such an outcome on the part of the offender would be inconsistent with s 5(2)72. That is because s 5(2) contemplates that current sentencing practices must be taken into account, but only as one factor, and not the controlling factor, in the fixing of a just sentence. It may be noted that the Sentencing Act makes express provision in Pt 2AA for the Court of Appeal to give guideline judgments. These provisions were not invoked in this case. It might be said that Pt 2AA deals exhaustively with the circumstances in which, and the extent to which, a court may go beyond the characteristic judicial function of quelling the particular controversy before it in order to give quasi-legislative guidance for the resolution of future cases73. And even where the procedure for a guideline judgment is invoked, it is far from clear that the provisions of Pt 2AA contemplate that a judgment might be given 71 Malvaso v The Queen (1989) 168 CLR 227 at 233; Barbaro v The Queen (2014) 253 CLR 58 at 72-74 [34]-[39]. It is a different question whether such an agreement would warrant the refusal by this Court of special leave to appeal where it affected the course of proceedings. 72 Cf Green v The Queen (2011) 244 CLR 462 at 497 [106]; [2011] HCA 49. 73 Cf Wong v The Queen (2001) 207 CLR 584 at 601-602 [45], 613-615 [80]-[83], Bell as a guideline judgment without itself giving effect to the guidelines it propounds. On that basis, it might be said that, quite apart from the considerations of the limits of judicial power which would arise if a matter involved the exercise of federal jurisdiction (which this appeal did not), the giving of general judicial guidance for the future which plays no part in the actual determination of the matter before the court is inconsistent with the Sentencing Act. But it is not necessary in this case to reach a conclusion as to whether the bifurcated approach adopted in this case is in conformity with the Sentencing Act: that issue was not argued before this Court. It is sufficient to conclude that the perception of possible unfairness to the respondent arising from an expectation assumed to attend his plea of guilty was not a sound reason for the Court of Appeal to decline to give effect to its conclusion as to the inadequacy of the sentence which had been imposed by the sentencing judge. The residual discretion? The respondent sought to sustain the decision of the Court of Appeal by invoking the residual discretion available to a court of appeal on a Crown appeal against sentence not to interfere with the sentence imposed by a sentencing judge, even when satisfied that an error has occurred in the exercise of the sentencing function and that a different sentence should have been imposed at first instance74. In this regard, it was said that the Director acquiesced to the determination of the appeal by reference to the range fixed by current sentencing practices. The respondent's contention should be rejected. The Court of Appeal did not suggest that it was disposed to exercise its residual discretion against the Director. That is hardly surprising, because the Director did not at any stage of the proceedings suggest or accept that a conclusion by the Court of Appeal on its review of the comparable cases that the range of sentences was too low should not be reflected in the actual determination of the appeal. Nothing the Director did, or did not do, contributed to the bifurcation of the appeal so that the determination of the Director's appeal in Pt A of the Court's reasons occurred in isolation from the review of current sentencing practices in 74 See CMB v Attorney-General (NSW) (2015) 256 CLR 346 at 360-361 [38]-[39]; [2015] HCA 9. See also Director of Public Prosecutions v Karazisis (2010) 31 VR 634 at 657-658 [100], 658-660 [104]-[115]; Green v The Queen (2011) 244 CLR Bell Pt B. It could not be suggested that the Director was responsible for the position adopted by the Court of Appeal and communicated to the parties in its email of 21 January 2016, as the Court did not hear from either party before adopting that position. The grounds of appeal filed by the Director in the Court of Appeal did not assert that the manifest inadequacy of the sentence imposed on charge 1 was demonstrable exclusively by reference to current sentencing practices. Nor did the grounds of appeal particularise the contention of manifest inadequacy on the assumption that current sentencing practices were sound. Indeed, in Pt B of its reasons, the Court of Appeal acknowledged that it was the Director's submission that75: "if the Court concluded that the sentence of three years and six months on the charge of incest resulting in pregnancy was within the permissible range, that would be strongly indicative of the fact that existing sentencing standards were inadequate." While it is true that, in the Appellant's Written Case filed by the Director with its notice of appeal, it was contended, inter alia, that comparable appellate cases demonstrated the extraordinary leniency of the sentence on charge 1, this contention was but one aspect of the Director's argument that the sentence was manifestly inadequate. It may therefore be concluded that the failure by the Court of Appeal to determine the appeal on the basis that the other aspects of the Director's argument were compelling was not due to any failure on the part of the Director to do what was reasonably required to assist the Court to avoid error. Conclusion and orders Given the Court of Appeal's conclusion that a sentence significantly higher than seven years' imprisonment for charge 1 was plainly warranted having regard to the maximum penalty prescribed for the offence, the gravity of the offence, the respondent's culpability, and the impact of the offence on the the Director's appeal. should have allowed complainant, Section 5(2)(b) of the Sentencing Act did not require the Court to refrain from acting to remedy what it recognised to be a manifest injustice resulting from the perpetuation of an error of principle. the Court The appeal to this Court should be allowed; and the order of the Court of Appeal dismissing the Director's appeal should be set aside. The matter should 75 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 at Bell be remitted to the Court of Appeal for determination of the appeal against sentence. GagelerJ GAGELER AND GORDON JJ. Section 5(2) of the Sentencing Act 1991 (Vic) specifies matters that a court "must have regard to" when sentencing an offender. One of the specified matters, under s 5(2)(b), is "current sentencing practices". Others include the maximum penalty prescribed for the offence, the nature and gravity of the offence, the offender's culpability and degree of responsibility, the impact of the offence on any victim, the personal circumstances of any victim and the presence of aggravating or mitigating factors concerning the offender. The mandatory considerations in s 5(2) are diverse. No particular consideration is required to be assessed in a particular manner or accorded particular weight. That is consistent with the proposition that the sentencing exercise requires the sentencing judge to identify and balance all relevant factors – factors that may point in different, conflicting and contradictory directions – and to make a judgment as to the appropriate sentence in the circumstances of the case76. Sentencing an offender is not a mechanical or mathematical exercise. And it is a task done in accordance with applicable statutory provisions governing sentencing77. In this case, the Court of Appeal stated that current sentencing practices for the offence of incest had "resulted in an unworkably narrow band within which judges are able to sentence for offending of this nature"78 (emphasis added). In relation to the respondent, it concluded that "[b]ut for the constraints of current sentencing practice, the objective seriousness of the conduct constituting charge 1 demanded a considerably longer sentence"79 and stated that "[b]ut for the constraints of current sentencing which … reflect the requirements of consistency, we would have had no hesitation" in finding the sentence manifestly inadequate80. The apparent explanation for not imposing a longer sentence was that, although current sentencing practices did not reflect the gravity of the offending and sentences were too low, it was not permissible to 76 Wong v The Queen (2001) 207 CLR 584 at 611 [75]; [2001] HCA 64; Markarian v The Queen (2005) 228 CLR 357 at 373-375 [37], 378 [51]; [2005] HCA 25; Muldrock v The Queen (2011) 244 CLR 120 at 131-132 [26]; [2011] HCA 39. 77 Markarian (2005) 228 CLR 357 at 371 [26]; Elias v The Queen (2013) 248 CLR 483 at 493 [25]; [2013] HCA 31. 78 Director of Public Prosecutions v Dalgliesh (a pseudonym) [2016] VSCA 148 79 Dalgliesh [2016] VSCA 148 at [53]. 80 Dalgliesh [2016] VSCA 148 at [132]. GagelerJ sentence, or to determine questions of manifest inadequacy, other than in conformity with a range or "band" established by those practices. The approach to current sentencing practices described by the Court of Appeal appears to have originated in its decision in Director of Public Prosecutions v CPD81. The approach was adopted in the present case before the decision of this Court in R v Kilic82. It manifests the error identified in Kilic of treating current sentencing practices as fixing quantitative boundaries within which future sentences were required to be passed83. Section 5(2)(b) does not in terms provide that current sentencing practices set boundaries on what a court may reasonably impose as a sentence. The court must have regard to current sentencing practices, as well as every other matter listed in s 5(2). Current sentencing practices stand in the same position as every other matter listed in s 5(2). There is nothing to suggest that current sentencing practices should be treated in a conceptually different manner from any of the other listed matters. Of course, an express purpose of the Sentencing Act is to promote consistency of approach in the sentencing of offenders84, to which the requirement in s 5(2)(b) may contribute. But that purpose, which reflects the well-recognised importance of consistency in the application of sentencing principles85, provides no basis for treating s 5(2)(b) as though it were a statutory command to sentence within a "band" derived from current sentencing practices. Sentences are not binding precedents86, but are merely "historical statements of what has happened in the past"87. As was said in Hili v The Queen, "[t]hat history does not establish that the range is the correct range, or that the upper or lower limits to the range are the correct upper and lower limits"88 82 (2016) 91 ALJR 131; 339 ALR 229; [2016] HCA 48. 83 (2016) 91 ALJR 131 at 137-138 [22]; 339 ALR 229 at 235-236. 84 s 1(a) of the Sentencing Act. 85 See Hili v The Queen (2010) 242 CLR 520 at 535 [49]; [2010] HCA 45. 86 Wong (2001) 207 CLR 584 at 605 [57]. 87 Hili (2010) 242 CLR 520 at 537 [54] quoting Director of Public Prosecutions (Cth) v De La Rosa (2010) 79 NSWLR 1 at 71 [304]. 88 (2010) 242 CLR 520 at 537 [54]. See also Director of Public Prosecutions (Vic) v OJA (2007) 172 A Crim R 181 at 196 [31]. GagelerJ (emphasis added). Examination of sentences imposed in comparable cases may inform the task of sentencing but such examination goes beyond its rationale when it is used to fix boundaries that, as a matter of practical reality, bind the court. The Court of Appeal's treatment of current sentencing practices as fixing quantitative boundaries within which future sentences were required to be passed evidently infected its consideration of manifest inadequacy in the present case. Having accepted that a significantly higher sentence was warranted in the circumstances of the case "but for" current sentencing practices, the Court of Appeal was not correct to end its task by treating those current sentencing practices as a complete answer to the question whether the sentence imposed was manifestly inadequate. It was required to determine that question, and to sentence, according to law. The earlier decisions of the Court of Appeal to the contrary89 are wrong and are not to be followed or applied. A plea of guilty does not alter these principles. As the Director submitted, recourse to the notion of an expectation or entitlement to be sentenced in accordance with current sentencing practices in the event of a plea of guilty is unlikely to be helpful. A plea of guilty does not diminish or alter the duty of the sentencing judge or a court of criminal appeal to sentence according to law. The duty is to impose a sentence that is appropriate in all the circumstances of the case90. It is not consistent with that duty to permit a manifestly inadequate sentence to stand. Again, the earlier decisions of the Court of Appeal to the contrary91 are wrong and are not to be followed or applied. We agree with the orders proposed by Kiefel CJ, Bell and Keane JJ. 89 Hasan v The Queen (2010) 31 VR 28 at 38 [42]-[43]; Ashdown v The Queen (2011) 37 VR 341 at 345 [4], 358 [48], 359 [55]; Harrison v The Queen (2015) 49 VR 619 90 See, eg, Hoare v The Queen (1989) 167 CLR 348 at 354; [1989] HCA 33; Ryan v The Queen (2001) 206 CLR 267 at 283-284 [49]; [2001] HCA 21; Wong (2001) 207 CLR 584 at 599 [36]; Markarian (2005) 228 CLR 357 at 384 [66]; Barbaro v The Queen (2014) 253 CLR 58 at 77 [52]; [2014] HCA 2. 91 Director of Public Prosecutions v DDJ (2009) 22 VR 444 at 460 [65]; CPD (2009) 22 VR 533 at 549 [69]; Winch v The Queen (2010) 27 VR 658 at 663-664 [23]-[27]; Hasan (2010) 31 VR 28 at 38 [43]; Ashdown (2011) 37 VR 341 at 352 [32], 410-411 [207]-[208]; Harrison (2015) 49 VR 619 at 630 [49].

HIGH COURT OF AUSTRALIA Matter No P60/2011 APPELLANT AND THE QUEEN & ANOR RESPONDENTS Matter No P61/2011 AND APPELLANT THE QUEEN & ANOR RESPONDENTS Mansfield v The Queen Kizon v The Queen [2012] HCA 49 14 November 2012 P60/2011 & P61/2011 ORDER Matter No P60/2011 Appeal dismissed. Matter No P61/2011 Appeal dismissed. On appeal from the Supreme Court of Western Australia Representation M L Bennett with L Ristivojevic for the appellant in P60/2011 and for the second respondent in P61/2011 (instructed by Bennett + Co) S A Shirrefs SC with S P Gifford for the appellant in P61/2011 and the second respondent in P60/2011 (instructed by Holborn Lenhoff Massey) W B Zichy-Woinarski QC with R V C Fogliani for the first respondent in (instructed by Commonwealth Director of Public both matters Prosecutions) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Mansfield v The Queen Kizon v The Queen Corporations law – Insider trading – Appellants allegedly possessed inside information concerning listed public company – Appellants allegedly bought or procured purchase of shares in that company – Information was false – Corporations Act 2001 (Cth) prohibits certain conduct by person who possesses inside information about company – Whether person in possession of false information can contravene insider trading prohibitions. Words and phrases – "information". Corporations Act 2001 (Cth), Pt 7.10. HAYNE, CRENNAN, KIEFEL AND BELL JJ. The Corporations Act 2001 (Cth) prohibits trading in securities by persons who possess information that is not generally available and know, or ought reasonably to know, that, if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of the securities. It will later be necessary to make more particular reference to the relevant provisions of the Act (which were altered during the times relevant to these matters) but the general tenor of the provisions is sufficiently captured by the description just given. It was alleged in these matters that, in January 2002, Mr Malcolm Day, the managing director of a listed public company (AdultShop.com Limited – "AdultShop") told one of the appellants (Mr Mansfield) that AdultShop's expected profit for the then current year had risen from $3 million to $11 million and that its expected turnover had risen from between $30 million and $50 million to about $111 million. It was alleged that Mr Mansfield then told the other appellant (Mr Kizon) what Mr Day had said. It was alleged that Mr Day and Mr Mansfield later had other conversations in which Mr Day gave optimistic assessments of AdultShop's financial performance and that Mr Mansfield told Mr Kizon what Mr Day said in those conversations. It was alleged that there were other conversations between the men but what was said in all these other conversations need not be described. It is useful, however, to refer to a conversation alleged to have taken place in June 2002 between Mr Day and Mr Kizon. It was alleged that Mr Day told Mr Kizon that "Packer [a well-known businessman] had bought 4.9% of AdultShop" and that the projected revenue for AdultShop for the following month would exceed what had been forecast. It was alleged that Mr Kizon told Mr Mansfield what Mr Day had said in this conversation. It was alleged that, knowing the matters revealed in the conversations, Mr Mansfield and Mr Kizon bought or procured the purchase of AdultShop shares, and thus contravened the Corporations Act. Argument of the appeals in this Court proceeded on the footing that what Mr Day said to Mr Mansfield and to Mr Kizon was false. In particular, AdultShop's expected profit and turnover for the period of which Mr Day spoke in his conversation with Mr Mansfield had not risen, and neither Mr Packer nor any company associated with Mr Packer had bought 4.9 per cent of the issued capital of AdultShop. Interests associated with Mr Packer had for two days held a little under 1.5 per cent of the capital of AdultShop but, at the time of the alleged conversation between Mr Day and Mr Kizon which was described above, all of those shares had been sold. The issue The central question in these appeals was: did the appellants possess "information" that was not generally available? The appellants argued that, to establish contravention of the relevant provisions of the Corporations Act, the prosecution must prove that the "information" which the appellants possessed was "a factual reality". They alleged that Mr Day had told them lies about AdultShop and that "a lie cannot constitute information". The appellants' arguments should be rejected and each appeal dismissed. If the alleged conversations took place, each appellant possessed information about AdultShop that was information not generally available. Mr Day communicated knowledge about a subject (the expected profit and turnover of the company or a particular shareholding in the company) and what Mr Day communicated was not generally available. That the knowledge communicated was not true does not deny that it is "information". It will have to be decided at a new trial whether the information was material, in the sense that, had it been generally available, a reasonable person would have expected it to have a material effect on the price or value of AdultShop's shares. Indictment and trial The appellants were tried together in the District Court of Western Australia on an indictment alleging five counts of conspiracy1 to commit offences against insider trading provisions of the Corporations Act with respect to securities in AdultShop. The indictment further alleged (for the most part as counts alternative to the conspiracy counts) that Mr Mansfield or Mr Kizon had committed the substantive offences alleged to be the subject of the conspiracy counts. The indictment also charged the appellants with offences relating to trading in securities of another listed company but no issue arises in this Court about those counts and they need not be noticed further. The prosecution provided particulars of the "information" which it was alleged that the appellants had possessed. Those particulars followed a common form exemplified by the particulars given of count 1: "In relation to AdultShop, the information of which the two accused were possessed was to the effect that: 1 Contrary to s 11.5(1) of the Criminal Code (Cth). The expected profit for AdultShop for the 2002 financial year had risen from $3 million to $11 million; The expected turnover for AdultShop for the 2002 financial year had risen from between $30 million and $50 million, to about $111 million; The information at sub-paragraphs a. and b. above had been obtained on or about 4 January 2002 as a result of private conversation between Malcolm Day, the Managing Director of AdultShop, and a person or persons the said Malcolm Day apparently treated as a confidant." At trial the case was conducted by the prosecution on the basis that the first two sub-paragraphs of the particulars (which set out the substance of what Mr Day had said) identified the relevant "information" and that the third sub-paragraph of the particulars set out facts and circumstances relevant to the materiality of that information. No evidence was led by the prosecution to establish the truth of any of the statements allegedly made by Mr Day to either Mr Mansfield or Mr Kizon. Evidence was led which showed that any statement that "Packer had bought 4.9% of AdultShop" was false. At the close of the prosecution case, Mr Mansfield and Mr Kizon submitted that there was no case to answer in respect of any count and that the trial judge (Judge Wisbey) should find2 the appellants not guilty. Each appellant submitted that the prosecution had not established that he had possessed "information". The trial judge ruled that the relevant provisions of the Corporations Act were contravened only if the "information" alleged to be not generally available, and to have been acted upon by the accused, was "a factual reality". The trial judge entered judgments of acquittal on all of the counts of the indictment that related to trading in the securities of AdultShop. 2 Criminal Procedure Act 2004 (WA), s 108 as picked up and applied by Judiciary Act 1903 (Cth), s 68(1). Appeals The prosecution appealed3 to the Court of Appeal of the Supreme Court of Western Australia against the judgments of acquittal entered by the trial judge. That Court (Buss JA and Murray J, McLure P dissenting) allowed4 the appeal, set aside the judgments of acquittal and ordered that a new trial be had. By special leave the appellants appealed to this Court. Relevant provisions of the Corporations Act At the time of the earliest of the alleged offences, the Corporations Act dealt with certain prohibited conduct in relation to securities in Div 2 of Pt 7.11 (ss 995-1001D) and dealt separately with the subject of "insider trading" in Div 2A of Pt 7.11 (ss 1002-1002U). Division 2 of Pt 7.11 prohibited5 misleading or deceptive conduct in or in connection with any dealing in securities and created various offences, including stock market manipulation6, false trading and market rigging transactions7 as well as offences depending upon a fraudulent intent8, an offence of disseminating information about illegal transactions9 and offences in connection with continuous disclosure requirements10. For present purposes, the central provision of Div 2A of Pt 7.11 was s 1002G, which prohibited certain conduct by persons in possession of "inside information". The appellants were charged with conspiracy to commit a contravention of s 1002G (contrary to s 1311(1) of the Corporations Act) and 3 Criminal Appeals Act 2004 (WA), s 24(2)(e)(i). 4 R v Mansfield [2011] WASCA 132. ss 999 (False or misleading statements in relation to securities) and 1000 (Fraudulently inducing persons to deal in securities). 10 ss 1001A-1001D. Mr Mansfield was charged with committing the substantive offence. Sub-section (1) of s 1002G identified when the other provisions of the section were to apply. It provided: "Subject to this Division, where: a person (in this section called the insider) possesses information that is not generally available but, if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of securities of a body corporate; and the person knows, or ought reasonably to know, that: the information is not generally available; and if it were generally available, it might have a material effect on the price or value of those securities; the following subsections apply." Sub-section (2) of s 1002G relevantly provided that the insider must not (whether as principal or agent) buy or sell, or procure another to buy or sell, the securities. Sub-section (3) relevantly provided that the insider must not, directly or indirectly, communicate the information or cause it to be communicated to another, if the insider knows or ought reasonably to know that the other person would be likely to buy or sell or procure another to buy or sell the securities. Sections 1002A-1002D gave further content to four of the elements of s 1002G: "information" (s 1002A(1)); what is information that is "generally available" (s 1002B); when a reasonable person would be taken to expect information to have a "material effect on the price or value of securities" (s 1002C); and trading and procuring trading in securities (s 1002D). For present purposes, it is important to refer to only s 1002A(1) and its provision about "information", and s 1002C and its provision about material effect on price or value. Section 1002A(1) provided, so far as presently relevant, that: "In this Division and in section 1013: information includes: (a) matters of supposition and other matters that are insufficiently definite to warrant being made known to the public; and (b) matters relating to the intentions, or the likely intentions, of a person." Section 1002C provided: "For the purposes of this Division and section 1013, a reasonable person would be taken to expect information to have a material effect on the price or value of securities of a body corporate if the information would, or would be likely to, influence persons who commonly invest in securities in deciding whether or not to subscribe for, buy or sell the first-mentioned securities." Although the offence created by s 1002G may sometimes be referred to as an offence of "insider trading", it is more accurately described, in the words of the heading to the section, as "Prohibited conduct by [a] person in possession of inside information" (emphasis added). That is, s 1002G prohibited persons in possession of information of a certain character from trading in shares. The relevant character of the information was that it "is not generally available but, if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of securities" of the relevant body corporate. And by operation of s 1002C, "a reasonable person would be taken to expect information to have a material effect on the price or value of securities of a body corporate if the information would, or would be likely to, influence persons who commonly invest in securities in deciding whether or not" to trade in those securities. Noticeably absent from these provisions was any requirement that the information in question come from within the corporation the securities of which were the subject of the prohibition. The Financial Services Reform Act 2001 (Cth) ("the FSR Act") made numerous amendments to the Corporations Act. So far as now relevant, with effect from 11 March 2002, the FSR Act repealed11 Ch 7 of the Corporations Act and a wholly new Pt 7.10 (ss 1040A-1044A) dealing with "[m]arket misconduct and other prohibited conduct relating to financial products and financial services". Division 2 of the new Pt 7.10 (ss 1041A-1041K) dealt with prohibited conduct other than insider among other provisions, substituted12, 11 s 3, Sched 1, item 1. 12 s 3, Sched 1, item 1. trading prohibitions and Div 3 (ss 1042A-1043O) dealt with insider trading prohibitions. The general scheme of the new insider trading prohibitions did not differ in any presently relevant way from the provisions it replaced. The new s 1043A prohibits a person who possesses information that the person knows, or ought reasonably to know, is not generally available and that, if it were, a reasonable person would expect it to have a material effect on the price or value of particular securities (or certain other identified financial products) from trading in the securities or procuring another to do so. As in the earlier form of the prohibition, "information" is defined13 as including "matters of supposition", "other matters that are insufficiently definite to warrant being made known to the public" and "matters relating intentions, of a person". Section 1042D identifies when a reasonable person would take information to have a material effect on price or value. intentions, or likely the Because argument of the present matters proceeded on the basis that the appellants' arguments about what is "information" applied equally to the new Div 3 of Pt 7.10 and to the provisions which were repealed, it is not necessary to set out the text of the new provisions or to notice any of the textual differences between the new and the former provisions. The appellants' arguments The central proposition advanced by the appellants proceeded in three steps. First, they submitted that the word "information" in the relevant provisions of the Corporations Act takes its ordinary meaning. Second, they submitted that the word "information", its ordinary usage, means "[k]nowledge communicated concerning some particular fact, subject, or event"14 (emphasis added). Third, they submitted that it followed that, if what is communicated is not fact but fiction, the knowledge imparted is not properly described as "information". The appellants sought to support this central proposition in several ways. Both appellants submitted that construing "information" to exclude false information is consistent with other elements of the insider trading provisions and with other provisions of the Corporations Act generally. Both submitted that 13 s 1042A. 14 The Oxford English Dictionary, 2nd ed (1989), vol VII at 944, "information", meaning 3a. the interpretation they advanced was more consistent with the legislative purpose of prohibiting insider trading than an interpretation that encompassed false Mr Mansfield further submitted that the interpretation the information. in overseas appellants urged was consistent with equivalent provisions jurisdictions. For the reasons that follow, the appellants' central proposition, and each of their supporting submissions, must be rejected. For the purposes of the insider trading provisions that apply in these matters, "information" includes false information. Ordinary usage of "information" The word "information" in its ordinary usage is not to be understood as confined to knowledge communicated which constitutes or concerns objective truths. Knowledge can be conveyed about a subject-matter (whether "fact, subject, or event") and properly be described as "information" whether the knowledge conveyed is wholly accurate, wholly false or a mixture of the two. The person conveying that knowledge may know or believe that what is conveyed is accurate or false, whether in whole or in part, and yet, regardless of that person's state of mind, what is conveyed is properly described as "information". Both appellants relied heavily upon dictionary definitions of "information", but these definitions do not establish the appellants' central proposition about ordinary usage. It will be recalled that one definition of "information" is "[k]nowledge communicated concerning some particular fact, subject, or event". Both appellants fixed on the word "fact", which may indeed imply truthfulness. But no distinction between truth and falsity is implied by the other elements of the definition. In particular, no distinction of that kind is to be made in respect of "information" that is "[k]nowledge communicated concerning some particular ... subject". Other statutory provisions Contrary to the appellants' submissions, other elements of the insider they proffer – that the construction trading provisions do not support "information" does not include false information. First, the reach of the word "information" is of course increased by the Corporations Act providing15, for the purposes of the provisions now in issue, that "information" includes "matters of supposition", "other matters that are insufficiently definite to warrant being made known to the public" and "matters relating to the intentions, or the likely intentions, of a person". Contrary to the appellants' submissions, the inclusion of matters of these kinds within the reach of the term "information" emphasises that it is not to be read as confined to matters shown to be true. Secondly, the requirement that the information be "not generally available", found originally in s 1002G, and now in the definition of "inside information" in s 1042A, does not support the interpretation that "information" excludes false information. To understand why this is so, something more needs to be said about how this particular submission proceeded. In the Court of Appeal, McLure P, in her dissenting reasons, understood16 the reference to information "not generally available" to mean "confidential information" that could be said to "belong to" someone. The appellants in this Court submitted that information could only be said to be confidential information that belongs to someone where that information conveys a fact and not a fiction. The premise for this submission should be rejected. The provisions now under consideration do not refer to who provided the information or to what connection that person had with the corporation in question. And because the provisions now under consideration do not direct attention, let alone confine the application of the prohibition, to information coming from within the corporation the securities of which are traded, it is wrong to approach the construction of the relevant provisions from some assumption that they deal with "confidential information" of the corporation. That expression is not used in the provisions. Its introduction into the debate is apt to mislead. That the current provisions do not direct attention to confidential information belonging to someone (whether the particular corporation or anyone else) can be understood by reference to the legislative history of the provisions now under consideration. Insider trading prohibitions of the kind now in issue were introduced into the legislative predecessors of the Corporations Act 15 s 1002A(1) and later s 1042A. 16 [2011] WASCA 132 at [12]. following a report17 on insider trading in Australia by the Standing Committee on Legal and Constitutional Affairs of the House of Representatives. That report, known as the Griffiths Report, recommended substantial changes to the provisions that then regulated insider trading. Like the Securities Industry Act 1980 (Cth), which had formed a part of the earlier co-operative scheme, the Corporations Act 1989 (Cth) (and thus the Corporations Law of each State) prohibited persons who were or had been connected with a corporation from dealing in the securities of that corporation if, because of the connection, the person was in possession of information not generally available which, if it were, would be likely materially to affect the price of those securities18. The change proposed19 by the Griffiths Report, and subsequently implemented, was to alter the focus of the prohibition from the connection which a person had with a corporation to the use of certain information. The appellants further submitted that provisions found elsewhere in the Corporations Act support their central proposition that "information" excludes false information. They do not. that "information" should be understood First, the market misconduct provisions of the Corporations Act (at the times relevant to these matters Div 2 of Pt 7.11 and then Div 2 of Pt 7.10) amply demonstrate include false information. So, for example, s 999, and later s 1041E, prohibited the dissemination of information that is false in a material particular or materially misleading. Yet if the appellants were right, "information" in its ordinary meaning excludes falsehoods. Second, the existence of the market misconduct provisions does not require the interpretation that "information" excludes false information. Again, to understand why this is so, something more needs to be said about how the submission proceeded. The appellants observed that the prohibition of, for example, misleading or deceptive conduct penalises the maker of a misleading or deceptive statement and enables recovery by the person misled or deceived. They then submitted 17 Australia, House of Representatives, Standing Committee on Legal and Constitutional Affairs, Fair Shares for All: Insider Trading in Australia (1989) ("Griffiths Report"). 18 Griffiths Report at 8 [2.1.24]. 19 Griffiths Report at 22-23 [4.3.3]-[4.3.7]. that, in the words of Mr Kizon's written submissions, "[i]t would be anomalous if that same person should also be prosecuted because the false statements they were induced by also constituted inside information under the Act". The appellants' arguments proceeded from the premise that Mr Day had engaged in misleading or deceptive conduct, at least contrary to s 1041H and perhaps contrary to its predecessor, s 995. Their arguments may have gone so far as to assume that Mr Day had committed offences against provisions prohibiting market misconduct such as s 999 (concerning false or misleading statements in relation to securities), s 1000 (concerning fraudulently inducing persons to deal in securities), or their later equivalents (ss 1041E and 1041F). But whether the appellants' arguments made an assumption of that latter kind need not be examined. It is enough to acknowledge that there may be cases where a person conveys false information to another, knowing or intending that the recipient will trade in the relevant securities, and two offences are committed. The person supplying the information may contravene one or more provisions prohibiting market misconduct and the person receiving the information may contravene the provisions prohibiting conduct by persons in possession of inside information. Such a result is consistent with the purpose of prohibiting insider trading. As explained later, that purpose can be described as the maintenance of a free and fair market for securities. The appellants assumed that if Mr Day contravened s 1041H he would be liable to the appellants in a civil action under s 1041I for any loss or damage they suffered by that conduct. Whether loss suffered by them acting in contravention of the insider trading prohibitions of Div 3 of Pt 7.10 would be recoverable in an action under s 1041I may be open to question20 but need not be decided. Even if the loss were recoverable that does not entail that "information" when used in Div 3 of Pt 7.10 should be read as confined to information that, at the time it was made available, was not misleading or deceptive or likely to mislead or deceive. There is no textual or other basis for reading down the references to information in Div 3 of Pt 7.10 or in the earlier provisions of Div 2A of Pt 7.11 in this way. The other provisions of the Corporations Act to which the appellants pointed do not support their submissions that "information" excludes false information. 20 See Travel Compensation Fund v Tambree (2005) 224 CLR 627; [2005] HCA 69. Purpose of prohibiting insider trading Both appellants submitted that excluding false information from the meaning of the word "information" was more consistent with the purpose of prohibiting insider trading than including it. This submission should be rejected. It may readily be accepted that the provisions now under consideration have, as the Griffiths Report acknowledged21, the purpose identified22 in 1981 by the Committee of Inquiry into the Australian Financial System ("the Campbell Committee") of ensuring "that the securities market operates freely and fairly, with all participants having equal access to relevant information" (emphasis added). And as the Campbell Committee pointed out23, "[i]nvestor confidence ... depends importantly on the prevention of the improper use of confidential information". But contrary to the appellants' submissions, it does not follow that the only information to which the provisions now in issue apply is information that could be described as the corporation's confidential information or information that is wholly or even substantially true. The reference made by the Campbell Committee, and picked up by the Griffiths Report, to "the improper use of confidential information" does not require either of those conclusions. The facts of these cases show why that is so. If, as counsel for Mr Mansfield submitted, Mr Day's motive for saying what he did to Mr Mansfield and Mr Kizon was "pumping the stock of AdultShop", the market would not operate freely or fairly if the appellants acted upon what Mr Day said and invested in AdultShop shares. Prohibiting those who received false information from Mr Day that was material to the price or value of AdultShop shares from trading in those shares allows the market to operate freely and fairly. It matters not whether what Mr Day said was true or was information actually derived from the company. The operation of the market would be adversely affected by trading that was founded on information not generally 21 Griffiths Report at 17 [3.3.6]. 22 Australia, Committee of Inquiry into the Australian Financial System, Australian Financial System: Final Report of the Committee of Inquiry, (1981) at 23 Australia, Committee of Inquiry into the Australian Financial System, Australian Financial System: Final Report of the Committee of Inquiry, (1981) at available which, if generally available, would reasonably be expected materially to affect the price or value of the securities. International practice In this Court, Mr Mansfield sought to explain the "international regulatory situation". His written submissions elaborated on the insider trading prohibitions of the United Kingdom, Germany, France, Spain, the Netherlands, the European Union, New Zealand, Canada, South Africa and the United States as a step towards his conclusion that "the international regulatory approach to insider trading is consistent only with the appellant's primary submission that 'information' necessarily means a matter of fact or precise circumstances as opposed to a falsity". Mr Mansfield's written submissions did not explain why this Court should construe Australian legislation by reference to international practice – assuming that his summary of the laws of these foreign jurisdictions is correct – beyond the bald assertion that "[t]he construction of 'information' submitted by the appellant is consistent with this global regulatory framework". In oral argument, counsel for Mr Mansfield amplified the submission by explaining that "the Griffiths Report highlighted 13 years ago the importance of [the] Australian regulatory framework being viewed in the context of the international regulatory framework. What was apposite 13 years ago is even more apposite today in terms of the globalisation of securities markets worldwide". The practice of other jurisdictions is interesting, and may be of interest to the legislature. Indeed, as noted by counsel for Mr Mansfield, "the Griffiths Report urged the legislature to consider" the "full panoply of international regulation[s]" (emphasis added). But it was not shown that the legislation now under consideration was based on any particular legislative model. General reference of the kind made by Mr Mansfield to other statutory regimes does not assist in the resolution of the question of construction raised by these appeals for determination in this Court. Conclusion and orders The appellants have failed to establish their central proposition about the ordinary usage of the word "information" and each of their secondary submissions in support of that central proposition. The appeals to this Court should be dismissed. HEYDON J. Each appellant was charged with crimes arising out of, inter alia, their conduct on or about 4 January 2002. On that day, s 11.5(1) of the Criminal Code (Cth) provided that a person who conspired with another person to commit an offence punishable by imprisonment for more than 12 months, or by a fine of 200 penalty units or more, was guilty of conspiracy to commit that offence. At that time, s 1002G(2)(b) of the Corporations Act 2001 (Cth) created an offence of that kind. Commission of the offence depended on the accused being an "insider". "Insider" was defined as "a person [who] possesses information that is not generally available but, if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of securities of a body corporate." Section 1002G(2)(b) provided that an insider: "must not (whether as principal or agent): procure another person to subscribe for, purchase or sell, or to enter into an agreement to subscribe for, purchase or sell, any such securities." It is convenient to analyse the legal issues in these two appeals by reference to s 1002G(2)(b). Though it has now been repealed and replaced by similar legislation, it was the relevant provision in force at the time part of the conduct alleged against the appellants took place. The prosecution alleged that the appellants had two pieces of information. The first was that for the 2002 financial year the expected profit for a particular business had risen from $3 million to $11 million. The second was that the expected turnover of that business had risen from $30-50 million to about $111 million. In fact, neither the expected profit nor the expected turnover had risen. The question in this appeal is whether the propositions about profit and turnover were prevented from being "information" because they were false. The appellants submitted that to be "information" a proposition had to "correspond with the factual reality", or "be a factual reality", or exist as "a matter of fact or precise circumstances as opposed to a falsity." It was said that "one cannot be 'informed' by a falsity", that "a lie cannot constitute information", that one must not read the statutory language "to include lies", and that information "does not include lies and falsehoods". Sometimes the word false is used to mean incorrect. Sometimes it is used to mean knowingly incorrect. In a similar way, the phrases just quoted from the appellants' submissions waver between contending that "information" should not be construed to include that which the supplier knew to be false, and contending that "information" should not be construed to include that which was actually false, whether the supplier knew it or not. From the point of view of the recipient, and from the point of view of the effect of the recipient's use of the information on the market, the difference cannot matter. But the wavering is perhaps a sign of fallacy in the appellants' positions. Section 1002A(1) defined "information" as including: "(a) matters of supposition and other matters that are insufficiently definite to warrant being made known to the public; and (b) matters relating to the intentions, or the likely intentions, of a person." The appellants' arguments were advanced under three headings. The first related to the supposed ordinary meaning of "information". The second concerned the structure of the legislation. The third depended on legislation outside Australia. The ordinary meaning of "information" A general expression like "information" can certainly have different meanings in different contexts. But there are numerous authorities holding that "information" can include what is false. Thus in the Supreme Court of the Australian Capital Territory, Blackburn CJ said: "information can be true or untrue"24. In the Federal Court of Australia, Whitlam, Tamberlin and Sackville JJ said that in ss 424(1) and 424A(1) of the Migration Act 1958 (Cth) "information" included material that was not reliable or that lacked a sound factual basis25. Weinberg J held that the statutory duty of a bankrupt to provide written information to the bankrupt's trustee could be satisfied by the provision of incomplete or inaccurate information26. Hill J held that a reference to "information" in s 10 of the Crimes Act 1914 (Cth) included false information27. And Muirhead J held that for the purposes of the Freedom of Information Act 1982 (Cth) "deliberately false information, albeit malicious, coming into the 24 Hook v John Fairfax & Sons Ltd (1982) 42 ACTR 17 at 19. 25 Win v Minister for Immigration and Multicultural Affairs (2001) 105 FCR 212 at 217-218 [17]-[22]. See also VAF v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 206 ALR 471 at 476-477 [24]. 26 Wharton v Official Receiver in Bankruptcy (2001) 107 FCR 28 at 38-40 [57]-[68]. 27 Esso Australia Ltd v Curran (1989) 39 A Crim R 157 at 165. hands of a department, which does not at the time of receipt know whether it is true or false is nevertheless at that time fairly labelled 'information'."28 The tendency of these authorities, on which the prosecution relied in this Court, is adverse to the appellants' interests. Although to some extent the reasoning in those cases depended on arguments drawn from the language of legislation in which the word "information" appeared, it also depended on views as to the ordinary meaning of that word. The present submission of the appellants appealed to what they called the ordinary meaning of "information". The appellants pointed out that the definition of information was inclusive, and its meaning was not limited to pars (a) and (b) of the definition. It was submitted that the meaning of "information" other than that meaning set out in pars (a) and (b) was the ordinary meaning. And it was submitted that in its ordinary meaning "information" requires truth or factual reality. Reliance was placed on par a. of the third meaning given for "information" in The Oxford English Dictionary: "Knowledge communicated concerning some particular fact, subject or event; that of which one is apprised or told; intelligence, news."29 But "knowledge" concerning a subject is not necessarily factually correct; nor is "that of which one is apprised or told"; nor is "news". Reliance was also placed on the second meaning given for information in The Oxford English Dictionary: "The action of informing …; communication of the knowledge or 'news' of some fact or occurrence; the action of telling or fact of being told of something."30 However, The Oxford English Dictionary gave the following example: "This I have by credible informacion learned." That example implies that there is such a thing as non-credible information. The first definition in The Macquarie Dictionary for "information" is "knowledge communicated or received concerning some fact or circumstance; news."31 The first three meanings given for "knowledge" are32: acquaintance with facts, truths or principles, as from study or investigation; general erudition. 28 McKenzie v Secretary to Department of Social Security (1986) 65 ALR 645 at 648. 29 The Oxford English Dictionary, 2nd ed (1989), vol VII at 944. 30 The Oxford English Dictionary, 2nd ed (1989), vol VII at 944. 31 The Macquarie Dictionary, Federation ed (2001), vol 1 at 973. 32 The Macquarie Dictionary, Federation ed (2001), vol 1 at 1054. familiarity or conversance, as with a particular subject, branch of learning, etc. acquaintance; familiarity gained by sight, experience or report: a knowledge of human nature." The problem for the appellants is that one can study or investigate without learning the truth. One can be familiar with a subject but make mistakes about it. And it is notorious that a supposed knowledge of human nature leads to considerable controversy about what its traits are and what flows from them. If the appellants' submission were correct, in the expression "correct information" the word "correct" would be superfluous. It is not superfluous. To speak of "correct information" is not to speak tautologously. And the expression "incorrect information" is not oxymoronic. Nor is it self-contradictory. A party to a contract who is disappointed because of a pre-contractual misrepresentation may claim: "You gave me some information during the negotiations; I acted on that information, but it was false information." That purchaser is using "information" in one of its ordinary meanings. Hence the ordinary meaning of "information" does not assist the appellants. Indeed, the inclusion in the meaning of "information" of "matters of supposition", which may well be false, creates in this respect a consistency within the definition as a whole. The legislative scheme The second principal argument of their construction fitted the legislative scheme which deals with insider trading better than that of the prosecution. the appellants was that The appellants' principal contention was that parts of the legislation prohibited the making of statements or the dissemination of information that is either false in a material particular or materially misleading, and gave a civil right of recovery for any person who suffered loss or damage as a result. This submission, incidentally, reveals a statutory assumption contrary to the first main argument of the appellants, that "information" can be "false". In any event, Mr Mansfield went on to submit: "Accordingly, the Act reveals an intention in circumstances where a falsity is disseminated or a fact is distorted and rendered false by a material particular or a material omission to penalise the maker of the statement and provide a mechanism for compensation for the person who relies upon the statement. This is the obverse for the insider trading provisions which penalise a person who relies upon the information to trade or communicate that information to a person who would trade". And Mr Kizon submitted: "the legislature intended that a person who was misled or induced to deal, or is otherwise the victim of dishonest conduct, should be permitted to recover damages for their [sic] loss. It would be anomalous if that same person should also be prosecuted because the false statements [sic] they [sic] were induced by also constituted inside information under the Act." Mr Kizon also submitted: "If the central objective is to ensure investor confidence in the integrity of securities markets, that objective is met vis-á-vis lies and false statements, by the provisions … prohibiting false statements, misleading conduct, etc." These submissions assume that legislation which deals with a particular problem is to be read as attacking that problem in only one way, to the exclusion of all other concurrent possibilities. As the prosecution submitted, the two groups of provisions – Pt 7.11 Div 2 and Pt 7.11 Div 2A in their form up to 11 March 2002 – sat comfortably together. One dealt with conduct which distorted the market by misleading or deceptive conduct, stock market manipulation, false trading and market rigging, making false or misleading statements or disseminating false or misleading information, fraudulently inducing persons to deal in securities, disseminating information about illegal transactions, and not complying with continuous disclosure requirements. The other dealt with the effects on the market of insider trading. The first group of provisions operated much more widely than the second, because those provisions were not confined to the conduct of "insiders". But contrary to the appellants' contention, the two groups of provisions were not mutually exclusive. They addressed different types of market misconduct from different angles. Even if, as the appellants perhaps questionably submitted, a person could both have obtained remedies under the legislation against someone who disseminated false information to him or her and have been punished for contravening the legislation, that does not point to the conclusion that "information" as defined in s 1002A did not include false propositions. The appellants' construction produces a stranger result than the prosecution's. Had the appellants profited from the trading, they would have been entitled to keep the profits if Mr Day, who conveyed the material to them, had lied, but would have been guilty of insider trading if he had told the truth. This irrational result would arise even though the conduct of the appellants, and their states of mind, would have been the same whether the information was true or false. A further difficulty in the appellants' submission is that if it were sound, enforcement of the law would have depended on extensive inquiry in each case as to whether the alleged "inside information" was true, for unless it were true it could not be "information". This would have placed a burden of proof on the prosecution which might be very difficult to discharge. It would have involved an assessment of criminal guilt in hindsight that would have left accused persons unsure whether or not, at the time they traded in securities, their conduct was or was not lawful. Further, the appellants' submissions assume too stark a distinction between "true" information and "false" non-information. The propositions about profit and turnover in this case were, it seems, completely false. But what if they had been nearly true, for example, that expected profits had risen to nearly $11 million and expected turnover to nearly $111 million? What if they had been partly true and partly false in the sense that they had doubled? In these examples, the propositions would be of interest to investors. This is because they might have had a material effect on the price of securities. If the propositions were not generally available but could reasonably be expected to have a material effect if they were, it is not surprising or anomalous that the legislation would prevent insiders who were aware of the propositions from procuring others to subscribe for, purchase, or sell the relevant securities. The more "information" is to be construed as requiring close conformity to the truth, the more the legislation moves towards becoming a dead letter. That outcome suggests that conformity to the truth of "inside information" had, and has, nothing to do with the insider trading regime. Mr Mansfield relied on the following passage of the Campbell Report33, approved in the Griffiths Report34, as stating the reason for prohibiting insider trading: "The object of restrictions on insider trading is to ensure that the securities market operates freely and fairly, with all participants having equal access to relevant information. Investor confidence, and thus the ability of the market to mobilise savings, depends importantly on the prevention of the improper use of confidential information." The market does not operate freely and fairly if there is unequal access to the relevant propositions. If some participants know them but not others, investor confidence is damaged. 33 Australia, Committee of Inquiry into the Australian Financial System, Australian Financial System: Final Report of the Committee of Inquiry, (1981) at 382 34 Australia, House of Representatives, Standing Committee on Legal and Constitutional Affairs, Fair Shares for All: Insider Trading in Australia, (1989) at Valuable-seeming material may be true or false or partly true – which of these it is cannot be known until a time after it is acted on. But the legislation proceeds on the basis that "insiders" should not be allowed to use that material when it is not publicly available. A key element in the prohibition on insider trading is that which is indicated by the words in s 1002G(1)(a) – information which "a reasonable person would expect … to have a material effect on the price or value of securities". "Untrue" information can have that effect as well as "true" information. As Buss JA said in the Court of Appeal, "untrue" information may influence people who acquire securities in deciding whether or not to acquire or dispose of them if the untruthfulness is unknown to them. Or if the untruthfulness is known to them, those people can use this knowledge in deciding whether or not to acquire or dispose of the securities. The insider trading provisions, read as a whole, catch conduct by those who trade on the basis of untruths. Non-Australian legislation Mr Mansfield submitted that "the international regulatory approach to insider trading is consistent only with [his] primary submission that 'information' necessarily means a matter of fact or precise circumstances as opposed to a falsity". "Consistent" is an ambiguous word. On one meaning of the word as it is used in the sentence quoted, Mr Mansfield's submission is that the international regulatory approach proves that the construction advocated is sound. On another meaning of it as used in the sentence quoted, the submission is that the international regulatory approach does not contradict the construction advocated. The latter submission, however, does not assist Mr Mansfield: mere non- contradiction affords no positive support. The former submission does assist Mr Mansfield, but it is an invalid approach to the construction of Australian legislation. The construction given to non-Australian legislation may be interesting and thought-provoking in the analysis of Australian law. But it is not directly relevant to the interpretation of Australian legislation unless the latter is modelled on the former or vice versa, or they share a common original, for example, a treaty or a statute. In this instance, neither is modelled on the other and they have no common origin. As Mr Mansfield submitted, some of the non- Australian enactments use words like "precise" and "specific" in relation to "information". However, these adjectives do not imply that the "information" must be "true". Orders Each appeal should be dismissed.

HIGH COURT OF AUSTRALIA CLONE PTY LTD AND APPELLANT PLAYERS PTY LTD (IN LIQUIDATION) (RECEIVERS & MANAGERS APPOINTED) & ORS RESPONDENTS Clone Pty Ltd v Players Pty Ltd (In Liquidation) (Receivers & Managers Appointed) [2018] HCA 12 21 March 2018 A22/2017 & A23/2017 ORDER Matter No A22/2017 Appeal allowed. Set aside orders 3, 4 and 5 of the Full Court of the Supreme Court of South Australia dated 8 December 2016 and, in their place, order that: the appeal to the Full Court of the Supreme Court of South Australia be allowed; the orders of (Hargrave AJ) dated 9 November 2015 SCCIV-04-319 be set aside and, in their place, order that: the Supreme Court of South Australia in proceeding the application be refused; and the first, seventh, eighth and tenth defendants pay the plaintiff's costs; and the first to fourth respondents pay the appellant's costs. The first to fourth respondents pay the appellant's costs of the appeal to this Court. Matter No A23/2017 Appeal allowed. Set aside orders 3, 4 and 5 of the Full Court of the Supreme Court of South Australia dated 8 December 2016 and, in their place, order that: the appeal to the Full Court of the Supreme Court of South Australia be allowed; the orders of (Hargrave AJ) dated 9 November 2015 SCCIV-10-819 be set aside and, in their place, order that: the Supreme Court of South Australia in proceeding the action be dismissed; and the plaintiffs pay the defendant's costs; and the first to fourth respondents pay the appellant's costs. The first to fourth respondents pay the appellant's costs of the appeal to this Court. On appeal from the Supreme Court of South Australia Representation B C Roberts SC with R Bonig for the appellant (instructed by Finlaysons Lawyers) A S Bell SC with P Zappia QC for the first to fourth respondents (instructed by Griffins Lawyers) Submitting appearance for the fifth respondent C D Bleby SC, Solicitor-General for the State of South Australia with B L Garnaut for the sixth respondent (instructed by the Crown Solicitor Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Clone Pty Ltd v Players Pty Ltd (In Liquidation) (Receivers & Managers Appointed) Equity – Where judgment given by Supreme Court of South Australia, as varied by Full Court of Supreme Court of South Australia – Where successful party engaged in malpractice – Where malpractice later discovered – Where perfected judgment set aside – Where no pleading or proof of fraud – Nature of court's equitable power to set aside perfected judgment – Whether equitable power extends to malpractice not amounting to fraud – Whether power to set aside perfected judgment conditional upon unsuccessful party having exercised reasonable diligence to discover fraud or malpractice. Procedure – Perfected judgment – Rescission – Where two applications brought to set aside judgment – Where judgment set aside for malpractice – Whether proper course application in original proceeding or fresh action. Words and phrases – "actual fraud", "causation", "equitable jurisdiction", "equitable power", "equity", "finality", "fraud", "fresh action", "malpractice", "misconduct", "new trial", "not amounting to fraud", "perfected judgment", "perfected orders", "power", "proper application", "reasonable diligence", "setting aside". Supreme Court Act 1935 (SA), s 17(2)(a)(i). KIEFEL CJ, GAGELER, KEANE, GORDON AND EDELMAN JJ. These appeals concern the equitable power of a court to set aside its own perfected judgments, namely its "formal orders ... whether in the form of a judgment strictly so-called or a decree, order or sentence"1. The primary judge in the Supreme Court of South Australia set aside a perfected judgment of that Court based on misconduct not amounting to fraud. An appeal to the Full Court of the Supreme Court of South Australia was dismissed by majority. The essential questions in these appeals are whether the power of a court to set aside its perfected following circumstances: to each of (i) misconduct by the party who succeeded at trial which does not amount to fraud; and (ii) where the unsuccessful party failed to exercise reasonable diligence to discover the fraud or misconduct during the earlier proceedings. judgment extends the The answers to each of these questions are as follows. First, the general power of a court to set aside its perfected judgment requires actual fraud, although there are other discrete grounds to set aside a perfected judgment which were not in issue in these appeals. Secondly, it is not a precondition to the exercise of the power that the party seeking to set aside the judgment exercised reasonable diligence to attempt to discover the fraud during the earlier proceedings. In their applications to set aside the Supreme Court's perfected judgment, the first to fourth respondents did not allege or prove any fraud by the appellant. Therefore the appeals must be allowed. The dispute that gave rise to these proceedings The background to the first trial In 1994, the first respondent in these appeals, Players Pty Ltd, negotiated with the appellant, Clone Pty Ltd, an agreement to lease from Clone run-down premises in Pirie Street, Adelaide. The proposed agreement to lease was for a term of 10 years with the premises to be renovated by Players to be used as a licensed hotel and gaming premises called the Planet Hotel. In the course of negotiations, Clone's agent prepared a draft agreement to lease which was provided to Clone's solicitors. Clone's solicitors advised the agent that a clause should be inserted to address what was to happen to the hotel and gaming machine licences, to be obtained by Players, at the determination of 1 Moller v Roy (1975) 132 CLR 622 at 625; [1975] HCA 31. the lease. The solicitors subsequently drafted a clause, which became cl 11(i) in the agreement to lease, as follows: "The Lessee will upon expiration or earlier determination of the Lease transfer to the Lessor any Liquor Licences or gaming machine Licences held in respect of the premises for NIL consideration." Various changes were subsequently made to the draft agreement to lease. One alleged change, which was at the core of many years of litigation culminating in these appeals, concerned an allegation by Players that the word "NIL" in cl 11(i) had been struck through in blue pen, with the alleged result that consideration was payable under the agreement to lease. In August 1994, the agreement to lease was executed by three of the directors of Players, namely Messrs Griffin, McDermott, and May, on behalf of Players and personally as guarantors. The fourth director of Players, Mr Cahill, was overseas. Messrs Griffin, Cahill, and McDermott are the second, third, and fourth respondents in the appeals in this Court, whose submissions were made jointly with those of Players. Messrs Roche and England, on behalf of Clone, executed the agreement to lease, which bore a handwritten indorsement, inserted by Clone's solicitors, that it was subject to execution by Mr Cahill. Mr Cahill never executed the agreement to lease. In September 1994, the agreement to lease, or a copy of it, was sent to the Licensing Court of South Australia. In January and March 1995, respectively, the Licensing Court (i) granted Players' application for removal and transfer of a hotel licence from premises known as the Grenfell Tavern to the Planet Hotel and (ii) issued Players with a gaming machine licence for the Planet Hotel. On 30 August 1994, in accordance with its usual practice, Clone's agent sent a photocopy of the agreement to lease to the solicitors for the parties and retained the original in its files. It is unclear what happened to the original of the agreement to lease. The trial judge in the original proceedings – Vanstone J – said that it may have been lost when Players was unsuccessfully attempting to obtain the signature of the fourth director and guarantor, Mr Cahill2. The original, rather than a copy, might also have been sent to the Licensing Court when Players applied for its hotel and gaming machine licences. 2 Clone Pty Ltd v Players Pty Ltd [2005] SASC 281 at [24]. In March 1995, Players took possession of the premises and undertook a major refurbishment. Later that month, Clone's solicitors wrote to Mr Griffin, who represented Players in the negotiations and acted as the solicitor for Players. Clone's solicitors enclosed a draft memorandum of lease and a copy of the agreement to lease. In April 1995, Clone and Players executed the memorandum of lease with a 10-year term. The memorandum of lease contained provisions3 consistent with cl 11(i), set out above, as well as clauses preventing Players from transferring or removing the licences. During 2002, a dispute arose between Clone and Players concerning repairs to the premises. Players later alleged that during the course of this dispute, in a letter dated 30 October 2003, Clone had consented to the removal of the hotel licence and the gaming machine licence. In November 2003, Players agreed to sell the licences to Fairtown Holdings Pty Ltd for $750,000 for its use at Victoria Square, Adelaide. In December 2003, Players and Fairtown applied to the Licensing Court for the removal of the hotel licence to the Victoria Square premises. Fairtown also applied for the transfer of the hotel licence and a new gaming machine licence. In March 2004, Clone commenced its original action against Players and its directors, as guarantors, in the Supreme Court of South Australia. Fairtown and its two directors were also joined as defendants in order to obtain injunctive relief to prevent further steps being taken in relation to Fairtown's applications. Further defendants included the Liquor and Gambling Commissioner, and the Licensing Court of South Australia, both of which took no active part in the proceedings and agreed to abide by the orders of the Court. Those defendants were subject to an order made on 6 July 2004 dispensing with any obligation to give discovery "[o]n the understanding that [they] will make available to the other parties their files in relation to this matter". There were five main issues in the proceedings: (1) whether Clone had consented to the removal of the hotel licence and the surrender of the gaming machine licence; if Clone had consented, the conditions of that consent and whether they had been satisfied; 3 Clauses 7.3 and 8.8. if Clone had not consented, whether Clone was obliged to pay reasonable consideration licences upon determination of the lease; to Players for the (4) whether Clone had validly terminated the memorandum of lease before its expiry for breach by Players, including issues concerning four notices to remedy various alleged breaches and whether those breaches had been remedied within the time stipulated; and if any breach had been committed by Players which would have entitled Clone to terminate the memorandum of lease, whether Players should be granted relief against forfeiture. In relation to the third issue, Clone had three alternative submissions: (i) the agreement to lease was not binding because Mr Cahill had not signed it as a guarantor; (ii) upon execution, the memorandum of lease became the sole and exclusive embodiment of the agreement and superseded the agreement to lease; and (iii) the agreement to lease provided for "NIL" consideration. As to (iii), the issue concerned Players' claim that the memorandum of lease should be rectified to conform to an obligation in the agreement to lease to pay consideration. That obligation was said to arise because Players claimed that the word "NIL" in cl 11(i) of the agreement to lease had been struck through in blue pen. Clone's submission was that the faint line that ran through the words "for" and "NIL" had been made accidentally or mechanically, such as by a photocopying scratch or artefact on the photocopier glass or lens. The course of the first trial The trial commenced on 7 March 2005. The original agreement to lease was not discovered nor was it in evidence at the trial. Clone and Players each discovered a copy of the agreement to lease and both copies were tendered. Players did not contend that the two tendered copies had been made at a different time or by a different photocopier. Each copy showed the word "NIL" with a short, straight and precise, faint line that appeared to run through the top of the letters "NI". The same straight and precise, but faint, line ran through the top of the word "for", through the letter "f", and over the top of the letters "o" and "r". If the words "for" and "NIL" had been struck through at the time of execution, and were not part of the clause, then the clause would have read as follows: "The Lessee will upon expiration or earlier determination of the Lease transfer to the Lessor any Liquor Licences or gaming machine Licences held in respect of the premises [words struck out] consideration." The evidence during Clone's case about cl 11(i) of the agreement was, at best, equivocal. One witness could not recall whether the word "NIL" had been struck through. Another did not believe that it had been struck through and could not recall that it was. Clone called evidence that it could not locate an agreement to lease other than the copy it had discovered. Senior counsel for Clone also made various calls for Players to produce copies of the agreement. In response to one of those calls, senior counsel for Players said that he would check but that, as he understood it, the only copy of the agreement to lease in Players' possession was the copy that Players had discovered. At the close of Clone's case, in response to Clone's calls for copies of the agreement to lease, senior counsel for Players told the Court that a copy of the agreement to lease had been filed with the Licensing Court in September 1994. He said that enquiries were being made of the Licensing Court. He added that Players was making every endeavour to find any further copies of the agreement to lease and that it was as keen to find them as Clone. He said that Players would provide anything it found to Clone. On 6 April 2005, Players opened its case. Senior counsel for Players informed the Court that Players had asked the Commissioner whether there remained any files concerning Players' application for removal of the hotel licence from the Grenfell Tavern to the Planet Hotel. On the same day, Clone's instructing solicitor asked Ms Varricchio, a legal and policy officer employed by the Commissioner, to search the files of the Commissioner for any copies of the agreement to lease. Ms Varricchio replied, saying that she had located a copy of the agreement on the "Grenfell Tavern removal file" rather than the "Planet Hotel Premises File". After the Court adjourned on 7 April 2005, junior counsel for Clone inspected the Grenfell Tavern removal file at the Commissioner's premises. He saw a copy of the agreement to lease. This was described as the third copy. The junior counsel noticed that, like the two tendered copies, the third copy of the agreement to lease contained a line through the word "NIL", and that it was not blue. He did not photocopy it because he thought that any copy made would be discoverable. He asked Ms Varricchio to advise him if Players' solicitors came to inspect the Commissioner's files and, if so, which files they inspected. On 8 April 2005, a solicitor representing Players attended the offices of the Commissioner. The solicitor requested, and was shown, the files relating to the Planet Hotel. The solicitor did not request, and was not shown, the Grenfell Tavern removal file. Ms Varricchio reported upon the visit of Players' solicitor to the secretary of Clone's principal solicitor. This information was relayed to Clone's other solicitors and counsel. On 11 April 2005, the principal solicitor for Clone gave a notice to the Commissioner to produce to the Court "all the Planet files in your possession, including files from the inception of The Planet Hotel". Ms Varricchio was unsure whether this included the Grenfell Tavern removal file. Clone's principal solicitor, via her secretary, advised the solicitor for the Commissioner that the notice required production of the Planet Hotel premises file only, and not the Grenfell Tavern removal file, which contained the third copy of the agreement to lease. However, the files delivered to the Court included files from Players' gaming machine licence application. Those files contained a fourth copy of the agreement to lease. That copy also showed the same line through the words "for" and "NIL". Clone's legal representatives were allowed to inspect the files without the notice to produce being called upon in open court. A central witness who gave evidence for Players at trial was Mr Griffin, who, in addition to being one of Players' directors, was a solicitor and partner of a law firm. Mr Griffin's evidence was supported in key respects by Mr McDermott's evidence. Mr Griffin said that Clone's agent had provided him with drafts of the agreement to lease containing cl 11(i) with the words "for NIL consideration". Mr Griffin gave evidence that he did not read the draft carefully and did not notice those words. He wrote to two other directors of Players saying that "I believe [the agreement to lease] is in order". Clone's solicitors subsequently made three changes to the draft agreement, which were highlighted by Clone's agent for Mr Griffin's attention. Mr Griffin then considered the draft with the highlighted changes at the offices of Players' solicitors with Mr McDermott and Mr May. Mr Griffin said that he only then discovered the reference to "NIL consideration", which he thought had been introduced for the first time into the revised draft. His evidence was that he told the others that Clone had "tried to ... pull a swifty here, this is not the deal" and the three men agreed that Players should not agree to the change. Mr Griffin said that he struck through the word "NIL" using a pen with blue ink, the three men then initialled every page and each of the highlighted changes, and then signed as guarantors. None of the men initialled the striking through of the words "for" or "NIL". Mr Griffin also gave evidence that the Licensing Court had destroyed its relevant files, which must have been understood to include the Grenfell Tavern removal file. Senior counsel for Clone did not challenge that evidence. The decisions of the trial judge and the Full Court in the first trial After a 29-day trial, the trial judge upheld Clone's claims in relation to all of the issues set out above, except in relation to one of the breach issues. It was unnecessary to determine the fifth issue, namely whether Players was entitled to relief against forfeiture, because her Honour had found that one of the breaches of the memorandum of lease committed by Players was incapable of being remedied. Her Honour also dismissed all of Players' counterclaims. Players was ordered to deliver up the licences to Clone, declared to be liable to transfer the licences to Clone, and ordered to pay damages. In relation to whether Clone was obliged to pay reasonable consideration for the licences, the trial judge upheld each of Clone's three submissions and rejected Players' submission that the lease ought to be rectified. First, the agreement to lease had been superseded by the memorandum of lease, which was not intended to reflect and incorporate the provisions of the agreement to lease. Secondly, the handwritten indorsement to the agreement to lease, inserted by Clone's solicitors, had the effect that execution by Mr Cahill, which did not occur, was a condition precedent to the agreement to lease. Thirdly, the word "NIL" had not been struck through in the agreement to lease at the time when the agreement to lease was executed by Clone. Conscious of Mr Griffin's position as a practising solicitor, the trial judge nevertheless rejected key parts of his evidence, including his evidence that he struck through the word "NIL" before the agreement to lease was executed by Clone. Her Honour gave numerous reasons for the rejection of Mr Griffin's evidence. Her Honour also rejected Mr McDermott's evidence supporting Mr Griffin's evidence. The reasons why the trial judge rejected Mr Griffin's evidence included the following. First, none of the directors initialled alongside the alleged striking out of the word. This contrasted with the initialling by the directors alongside other changes to the agreement to lease and their initials at the foot of each page. Secondly, it was unlikely that a commercial solicitor, such as Mr Griffin, would have been satisfied with a provision that provided for the licences to be transferred "for consideration". There was a provision, with initialled changes, for resolving disputes about market value of plant and equipment (cl 11(j)) and another provision to resolve disputes about a rent review (cl 7) but no provision for resolving a dispute about the "consideration" for the licences. To this might be added the legal and grammatical nonsense of a clause which would have required transfer of the licences "held in respect of the premises [words struck out] consideration". Thirdly, as Mr Griffin acknowledged, the deletion would not have accorded with any prior agreement between the parties but Mr Griffin made no attempt to bring the alteration to the attention of any officer or agent of Clone. Mr Griffin also made no attempt to alter other clauses that were inconsistent with representations made to him by Clone. Fourthly, Mr Griffin's complaint, which asserted, incorrectly, that Clone had attempted to "pull a swifty" by inserting the word "NIL" into the agreement, had only been communicated to Clone 10 years later. Indeed, reference to the deletion of the word "NIL" was only made obliquely in a letter from Players before its original defence was filed and Players did not include such an allegation in its original defence. Fifthly, the memorandum of lease did not contain a clause requiring any consideration to be paid. Clauses 7.3 and 8.8 of the memorandum of lease provided for the delivery up of the hotel and gaming machine licences on determination of the lease without any requirement for payment of consideration. Sixthly, there was evidence from Clone's witnesses, which her Honour accepted, that they would have seen the blue line striking through "for NIL" if it were there. Players appealed to the Full Court of the Supreme Court of South Australia. The Full Court upheld the trial judge's conclusion that Clone had not consented to the removal of the hotel licence and the surrendering of the gaming machine licence. As to the third issue, concerning whether consideration was payable by Clone, the Full Court overturned the trial judge's conclusions that the agreement to lease had been superseded by the memorandum of lease and that Mr Cahill's signature as guarantor was a condition precedent. A fundamental question for Players' claim for rectification was therefore whether, at the time of execution of the agreement to lease, the word "NIL" had been struck through. The Full Court upheld the conclusion of the trial judge on that point. Doyle CJ (with whom Sulan and Layton JJ agreed) described the reasons why the trial judge rejected Mr Griffin's evidence as matters having "considerable force"4. Doyle CJ also observed that even if Mr Griffin's evidence had been accepted, and even if cl 11(i) were to be construed so as to require payment of consideration, there was another obstacle potentially in the path of Players' claim for rectification. This obstacle involved the possibility that rectification might still be refused if Players was aware that Clone was mistaken about cl 11(i) of the 4 Players Pty Ltd v Clone Pty Ltd [2006] SASC 118 at [189]. 5 Players Pty Ltd v Clone Pty Ltd [2006] SASC 118 at [191]-[197]. See also Taylor v Johnson (1983) 151 CLR 422 at 431-432; [1983] HCA 5; Kerr, A Treatise on the Law of Fraud and Mistake as Administered in Courts of Equity, (1868) at 345. Since the Full Court also overturned the trial judge's finding in relation to one of the breaches of the lease in the first notice to remedy, the Full Court remitted the matter to the trial judge to determine Players' claim for relief against forfeiture in relation to the other breaches. That claim was subsequently rejected by the trial judge on the remitter6. Events after the first trial and Full Court appeal After the proceedings had concluded, the Legal Practitioners Conduct Board investigated Mr Griffin's evidence at the trial. In the course of that investigation, the Board inspected the Commissioner's files and located the third and fourth copies of the agreement to lease. No action was taken against Mr Griffin. Mr Griffin was informed of the existence of the third and fourth copies of the agreement to lease. At the time when Mr Griffin was informed of the existence of these copies, Players and Clone were involved in a dispute about legal costs. Mr Griffin inspected documents on a file listed on Clone's bill of costs. His purpose was to determine whether Clone's solicitors had been aware of the existence of the third and fourth copies of the agreement to lease during the trial. Mr Griffin found documents that revealed that Clone knew about the third copy of the agreement, and that the fourth copy of the agreement was contained in the file produced to the Court, but not called upon by Clone. The proceedings to set aside the judgment from the first trial Players' applications In June 2010, Players brought two applications to set aside the judgment against it and to obtain an order for a new trial. The first application was brought in the same proceedings that had been the subject of the trial judge's perfected judgment, as amended by the Full Court. The second application was a new proceeding before a single judge of the Supreme Court to set aside the judgment. The second application was the appropriate way to proceed. Even where the separate procedure of a motion for a new trial might be concurrently available7, if fraud is alleged then a fresh action will generally be the appropriate application 6 Clone Pty Ltd v Players Pty Ltd (No 2) [2006] SASC 290. 7 McCann v Parsons (1954) 93 CLR 418 at 426; [1954] HCA 70. relying upon the power to set aside a perfected judgment of any court for fraud8. Independent proceedings, even where the application is to set aside an appellate court's decision9, can permit "the whole issue [to] be properly defined, fought out, and determined"10. In its applications to set aside the orders of the trial judge and Full Court, Players alleged that the judgment could be set aside on the basis of malpractice by Clone, relying upon the decision of this Court in Commonwealth Bank of Australia v Quade11. As Blue J observed in the Full Court, the misconduct which was attributed to Clone was based upon the conduct of its lawyers12. Players' case of malpractice was threefold. First, Players alleged that Clone had breached an obligation to discover the third copy of the agreement to lease. Secondly, Players alleged that Clone had misled the Court and had misled Players by failing to inform them of the existence of the third copy of the agreement to lease and by prosecuting a case on the false premise that the provenance of copies of the agreement to lease was unknown. Thirdly, Players alleged that Clone had breached an obligation to disclose to Players the Commissioner's production of the files to the Court under the April 2005 notice to produce. The decisions at first instance and on appeal Two of the allegations of Clone's misconduct were ultimately accepted. The allegation of failure to disclose was upheld by the primary judge, Hargrave AJ, on the basis that the third copy of the agreement to lease was 8 Flower v Lloyd (1877) 6 Ch D 297 at 302; Jonesco v Beard [1930] AC 298 at 300- 301; McDonald v McDonald (1965) 113 CLR 529 at 533, 535; [1965] HCA 45; Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 at 538; Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691 at 699-700. See also Sheridan, "Fraud and Surprise in Legal Proceedings", (1955) 18 Modern Law Review 441 at 444. 9 Seton, Forms of Judgments and Orders in the High Court of Justice and Court of Appeal, 6th ed (1901), vol 1 at 859. 10 Hip Foong Hong v H Neotia and Co [1918] AC 888 at 894. See also Daniell, The Practice of the High Court of Chancery, 5th ed (1871), vol 2 at 1428. 11 (1991) 178 CLR 134; [1991] HCA 61. 12 Clone Pty Ltd v Players Pty Ltd (In liquidation) (Receivers Appointed) (2016) 127 SASR 1 at 12 [15]. within Clone's power and the failure by Clone to disclose it constituted serious malpractice13. The Full Court, by majority, upheld this conclusion on the basis that the third copy was in Clone's custody14. The allegation of misconduct by Clone misleading the trial judge, although dismissed by Hargrave AJ15, was accepted by a majority of the Full Court16, with one judge in the majority, Stanley J, also concluding that Clone had misled the Full Court on appeal from the trial judge17. However, the allegation that Clone engaged in misconduct by failing to call on the notice to produce, although accepted by Hargrave AJ18, was found by a majority of the Full Court not to be malpractice19. Both Hargrave AJ and the majority of the Full Court (Blue and Stanley JJ, Debelle AJ dissenting) held that the misconduct was a sufficient basis to enliven a discretionary power of the Court to set aside the judgment of Vanstone J, as varied by the Full Court on appeal from her Honour's decision20. Hargrave AJ 13 Players Pty Ltd (In liquidation) (Receivers Appointed) v Clone Pty Ltd [2015] SASC 133 at [177], [204], [240]. 14 Clone Pty Ltd v Players Pty Ltd (In liquidation) (Receivers Appointed) (2016) 127 SASR 1 at 32 [148], 43 [197] per Blue J, Stanley J agreeing at 103 [423]-[424]. Cf at 147 [598] per Debelle AJ. 15 Players Pty Ltd (In liquidation) (Receivers Appointed) v Clone Pty Ltd [2015] SASC 133 at [238]. 16 Clone Pty Ltd v Players Pty Ltd (In liquidation) (Receivers Appointed) (2016) 127 SASR 1 at 59 [261] per Blue J, Stanley J agreeing at 106 [432]. Cf at 158-159 [640] per Debelle AJ. 17 Clone Pty Ltd v Players Pty Ltd (In liquidation) (Receivers Appointed) (2016) 127 SASR 1 at 107-108 [436]. 18 Players Pty Ltd (In liquidation) (Receivers Appointed) v Clone Pty Ltd [2015] SASC 133 at [241]. 19 Clone Pty Ltd v Players Pty Ltd (In liquidation) (Receivers Appointed) (2016) 127 SASR 1 at 154 [627] per Debelle AJ, Stanley J agreeing at 103 [422]. 20 Players Pty Ltd (In liquidation) (Receivers Appointed) v Clone Pty Ltd [2015] SASC 133 at [88]; Clone Pty Ltd v Players Pty Ltd (In liquidation) (Receivers Appointed) (2016) 127 SASR 1 at 43 [197], 59 [262], 72 [322] per Blue J, 112 [453]-[454], 117 [475]-[476] per Stanley J. held that the discretion should be exercised to order a new trial21. By majority, the Full Court dismissed the appeal. The primary judge and the Full Court considered that the principles concerning whether the Court should exercise its discretion to set aside its perfected judgment were those discussed by this Court in Commonwealth Bank of Australia v Quade22. It appears that, with some modifications in the Full Court23, this approach had generally been urged in submissions by both Clone and Players24. In contrast, before the primary judge and the Full Court, the Attorney-General for South Australia intervened to submit that where an application concerns the powers of the Court to set aside its own judgment, rather than the power of an appellate court, the power is limited to circumstances of fraud or conduct analogous to fraud25. Consistently with the approach taken in Commonwealth Bank of Australia v Quade, two of the factors considered by Hargrave AJ and by the Full Court in deciding whether to order a new trial were (i) whether Players had itself exercised reasonable diligence to find the third and fourth copies of the agreement to lease, and (ii) whether, absent the misconduct, the result might have been different. Hargrave AJ concluded that Players had not exercised reasonable diligence, although that lack of reasonable diligence was an error of judgment in the course of the trial which fell well short of the malpractice engaged in by 21 Players Pty Ltd (In liquidation) (Receivers Appointed) v Clone Pty Ltd [2015] SASC 133 at [304]-[305]. 22 (1991) 178 CLR 134. See Players Pty Ltd (In liquidation) (Receivers Appointed) v Clone Pty Ltd [2015] SASC 133 at [81]; Clone Pty Ltd v Players Pty Ltd (In liquidation) (Receivers Appointed) (2016) 127 SASR 1 at 20 [79], 59 [262] per 23 Clone Pty Ltd v Players Pty Ltd (In liquidation) (Receivers Appointed) (2016) 127 SASR 1 at 20 [79], 21 [88] per Blue J, 108 [437] per Stanley J. 24 Players Pty Ltd (In liquidation) (Receivers Appointed) v Clone Pty Ltd [2015] SASC 133 at [81]. 25 Players Pty Ltd (In liquidation) (Receivers Appointed) v Clone Pty Ltd [2015] SASC 133 at [81]; Clone Pty Ltd v Players Pty Ltd (In liquidation) (Receivers Appointed) (2016) 127 SASR 1 at 22 [97], 68 [310] per Blue J. Clone's legal team26. In the Full Court, a majority of the Court upheld Hargrave AJ's conclusion that Players had failed to exercise reasonable diligence in searching for a third copy of the agreement to lease27. As to whether the result might have been different if it were not for the misconduct, Clone submitted that the third copy had no real probative value. Clone submitted that the third copy might have been another copy made from the missing original at the same time as the first two. Or it might itself have been a copy of either the first copy or the second copy. In either case it would be expected that any mechanical or accidental photocopying mark would be reproduced on it. The relevance of the third copy of the agreement to lease depended upon whether an inference might be able to be drawn that the third copy was a copy of the original, made at a different time from the first and second copies, which were sent to the parties on 30 August 1994. However, identifying the genesis of the first, second, and third copies was not simple. Hargrave AJ concluded only that absent Clone's misconduct there was a real possibility that the evidence of the third copy of the agreement would have led to a different result28. A majority of the Full Court upheld this conclusion29, although each judge took a different view of the forensic significance of the third copy. In the majority, Blue J held that on the balance of probabilities the third copy of the agreement to lease was copied from the original30. Also in the majority, Stanley J held that this was only arguably the case31. The approach of 26 Players Pty Ltd (In liquidation) (Receivers Appointed) v Clone Pty Ltd [2015] SASC 133 at [291]. 27 Clone Pty Ltd v Players Pty Ltd (In liquidation) (Receivers Appointed) (2016) 127 SASR 1 at 61-62 [280]-[281], [285], 63 [288] per Blue J, 162-163 [649] per Debelle AJ. Cf at 111-112 [451] per Stanley J. 28 Players Pty Ltd (In liquidation) (Receivers Appointed) v Clone Pty Ltd [2015] SASC 133 at [242]. 29 Clone Pty Ltd v Players Pty Ltd (In liquidation) (Receivers Appointed) (2016) 127 SASR 1 at 68 [306] per Blue J, 115 [465] per Stanley J. 30 Clone Pty Ltd v Players Pty Ltd (In liquidation) (Receivers Appointed) (2016) 127 SASR 1 at 50 [223]-[224]. 31 Clone Pty Ltd v Players Pty Ltd (In liquidation) (Receivers Appointed) (2016) 127 SASR 1 at 114-115 [463]. Debelle AJ in dissent was that it was equally open to infer that the third copy of the agreement to lease was a photocopy from an earlier photocopy or a photocopy of the original and that any finding would be a matter of conjecture32. His Honour concluded that there was no real possibility that the result would have been different33. Debelle AJ also differed from the other members of the Full Court because his Honour considered that Players was required to prove that the result would probably have been different34. The grounds of appeal to this Court In each of the appeals in this Court, Clone had two grounds of appeal. Clone's first ground of appeal asserted that the Supreme Court's equitable power to set aside perfected orders, outside a statutory appeal, is limited to fraud and does not extend to forms of malpractice not amounting to fraud. Aside from categories of case that were not in issue in these appeals, that submission should be accepted. It would be inconsistent with both principle and a long historical foundation to extend the general power beyond actual fraud. The second ground of appeal asserted that the Supreme Court's power to set aside its perfected judgment on the ground of malpractice not amounting to fraud was conditional upon proof of various matters which essentially required that (i) but for the serious malpractice the irregularly obtained judgment would probably have been different, and (ii) the party applying to set aside the judgment had exercised reasonable diligence. The assumption underlying the second ground of appeal, reflecting Clone's submissions in the courts below, was that the approach in an original action to set aside a judgment should be similar to the approach on an appeal in a case like Commonwealth Bank of Australia v Quade35, although with the discretionary factors in Commonwealth Bank of 32 Clone Pty Ltd v Players Pty Ltd (In liquidation) (Receivers Appointed) (2016) 127 SASR 1 at 164 [655], 183 [714]. 33 Clone Pty Ltd v Players Pty Ltd (In liquidation) (Receivers Appointed) (2016) 127 SASR 1 at 177 [695]. 34 Clone Pty Ltd v Players Pty Ltd (In liquidation) (Receivers Appointed) (2016) 127 SASR 1 at 183 [714]. 35 (1991) 178 CLR 134. Australia v Quade treated as conditions. That approach is ahistorical and contrary to principle. The scope of the power to set aside perfected judgments Prior to the Judicature Reforms, in the Court of Chancery there were several different methods for setting aside or avoiding the effect of either enrolled decrees or perfected common law judgments. In relation to its own decrees, and apart from an appeal from the Lord Chancellor to the House of Lords36, the Court of Chancery recognised two ways in which decrees could be set aside even when enrolled. The first was a bill of review. On a bill of review, the reviewing court had very broad powers to reverse or alter a decree. The second was an original bill. The original bill could issue without leave, to rescind or "annul" the decree on the ground of "fraud and imposition"37. The distinction between each of the equitable bills is today broadly reflected in the distinction between (i) the power of an appellate court to set aside a lower court judgment and order a new trial, and (ii) the power of a court, by an original action, to set aside a judgment (often its own) based upon fraud. The distinction, and separate requirements in each action, is justified as a matter of principle and history. It is fundamental to these appeals. Each circumstance, and its historical antecedents, is considered separately below. The equitable and statutory powers to review a decision and order a new trial The first method mentioned above for reversing or altering an enrolled decree in Chancery prior to the Supreme Court of Judicature Act 1873 (36 & 37 Vict c 66) was a bill of review. A bill of review could be brought in the Court of Chancery in two different categories of case38. One category was concerned with substantial errors of law. The other category was based upon new matter 36 Charles Bright & Co Ltd v Sellar [1904] 1 KB 6 at 11; Holdsworth, A History of English Law, 7th ed (reprint) (1966), vol 1 at 372-373. 37 Barnesly v Powel (1748) 1 Ves Sen 119 at 120 [27 ER 930 at 930]. See also Cooper, A Treatise of Pleading on the Equity Side of the High Court of Chancery, 38 Mitford, A Treatise on the Pleadings in Suits in the Court of Chancery, by English Bill, 5th ed (1847) at 101-102. discovered since the decree. In both cases there was a 20-year time limit39, which probably arose from the circumstance that a bill of review was considered as being in the nature of a writ of error40, which writ had that time limit. The scope of the bill of review in relation to the first category – errors of law – was broad. Chancery did not circumscribe the nature of the error of law. It was necessary that the error appear on the face of the decree41 but the decree was required to recite the facts and evidence upon which it was based42. The scope of the second category – new matter discovered – was even broader. It applied to any new matter discovered since the decree. However, the bill could not be filed in this second category without the leave of the court43. And leave, which was in the discretion of the court44, would not be granted unless the applicant satisfied the court that (i) the failure by the applicant to discover the material prior to enrolment of the decree was not due to a lack of 39 Sherrington v Smith (1704) 2 Bro PC 62 at 63 [1 ER 793 at 794]; Smythe v Clay (1770) 1 Bro PC 453 [1 ER 684]; Mitford, A Treatise on the Pleadings in Suits in the Court of Chancery, by English Bill, 5th ed (1847) at 105-106. 40 Sherrington v Smith (1704) 2 Bro PC 62 at 63 [1 ER 793 at 794]. See also Cooper, A Treatise of Pleading on the Equity Side of the High Court of Chancery, (1809) at 41 Grice v Goodwin (1706) Prec Ch 260 [24 ER 126]; Mitford, A Treatise on the Pleadings in Suits in the Court of Chancery, by English Bill, 5th ed (1847) at 101. 42 Daniell, The Practice of the High Court of Chancery, 5th ed (1871), vol 1 at 862- 43 Mitford, A Treatise on the Pleadings in Suits in the Court of Chancery, by English Bill, 5th ed (1847) at 102. 44 Wilson v Webb (1788) 2 Cox 3 [30 ER 2]; Mitford, A Treatise on the Pleadings in Suits in the Court of Chancery, by English Bill, 5th ed (1847) at 102. reasonable diligence45, and (ii) the new matter is relevant46 in the sense that it would have led to a different result47. The rehearing on a bill of review has been repeatedly described as being in, or in the nature of, appellate jurisdiction48. This description has been used because, although the decision of the reviewing court might sometimes involve a hearing of evidence called for the first time49, the review would usually also involve consideration of the final decision for error based upon the materials before the original court50. However, the Supreme Court of Judicature Act completed51 the process of establishing a formal appeal structure. Relevantly to 45 Ludlow v Macartney (1719) 2 Bro PC 67 [1 ER 797]; Young v Keighly (1809) 16 Ves Jun 348 at 351 [33 ER 1015 at 1016]; Bingham v Dawson (1821) 3 Jacob 243 [37 ER 841]; Cooper, A Treatise of Pleading on the Equity Side of the High Court of Chancery, (1809) at 91; Story, Commentaries on Equity Pleadings, (1838) at 270, §414; Mitford, A Treatise on the Pleadings in Suits in the Court of Chancery, by English Bill, 5th ed (1847) at 102; Daniell, The Practice of the High Court of Chancery, 5th ed (1871), vol 2 at 1423. 46 Bennet v Lee (1742) 2 Atk 529 at 530 [26 ER 717 at 718]. 47 Willan v Willan (1810) 16 Ves Jun 72 at 89-90 [33 ER 911 at 917]; Mitford, A Treatise on the Pleadings in Suits in the Court of Chancery, by English Bill, 5th ed 48 In re St Nazaire Co (1879) 12 Ch D 88; Charles Bright & Co Ltd v Sellar [1904] 1 KB 6 at 11; Graziers Association of New South Wales v Australian Legion of Ex- Servicemen and Women (1949) 49 SR (NSW) 300 at 303; In re Barrell Enterprises [1973] 1 WLR 19 at 24; [1972] 3 All ER 631 at 637; Fleming v The Queen (1998) 197 CLR 250 at 259 [20]; [1998] HCA 68; DJL v Central Authority (2000) 201 CLR 226 at 244 [35]; [2000] HCA 17; Harrison v Schipp (2002) 54 NSWLR 612 at 619-620 [27], 639 [181]; cf at 659 [288]. 49 See CDJ v VAJ (1998) 197 CLR 172 at 201-202 [111]; [1998] HCA 67. 50 Federal Commissioner of Taxation v Munro (1926) 38 CLR 153 at 174; [1926] HCA 58; Eastman v The Queen (2000) 203 CLR 1 at 33 [104]; [2000] HCA 29, citing Attorney-General v Sillem (1864) 10 HLC 704 at 724 [11 ER 1200 at 1209]. See also Story, Commentaries on the Constitution of the United States, 5th ed (1891), vol 2 at 539, §1761. 51 Court of Chancery Act 1851 (14 & 15 Vict c 83). these appeals, the same process was completed in South Australia by 193552. That formal appeal structure left no room for the continued existence of a separate appellate procedure by a bill of review. Therefore, despite some early doubts or assumptions to the contrary53, and like the disappearance of the Chancery power to restrain the enforcement of a common law judgment54, the bill of review did not survive the Judicature Reforms55. As Lindley LJ remarked after the Judicature Reforms, the decline of a separate, broad Chancery power in a bill of review was "of the utmost importance"56. It was replaced by a defined appellate structure, including provisions for motions for new trials to be heard by an appellate court57, with associated restrictions including time limitations. The replacement of the bill of review with a power for an appeal court to order a new trial did not narrow the scope of the power that the reviewing or appellate court could exercise. The power could still broadly be divided into two categories, although in both categories the grounds were never "completely stereotyped" and they maintained flexibility "governed by the overriding purpose of reconciling the demands of justice with the policy in the public interest of bringing suits to a final end"58. As to the first category, involving errors of law, 52 Equity Act 1866 (30 Vict No 20); Supreme Court Amendment Act 1868 (32 Vict No 7); Supreme Court Act 1878 (41 & 42 Vict No 116); Supreme Court Act 1935 (SA), s 50. 53 Flower v Lloyd (1879) 10 Ch D 327 at 334; In re May (1883) 25 Ch D 231; (1885) 28 Ch D 516; Falcke v Scottish Imperial Insurance Co (1887) 57 LT 39 at 39-40. 54 Due to Supreme Court of Judicature Act 1873 (36 & 37 Vict c 66), s 24(5). 55 In re St Nazaire Co (1879) 12 Ch D 88 at 99-100, 100-101, 101; Ainsworth v Wilding [1896] 1 Ch 673 at 676-677; In re Barrell Enterprises [1973] 1 WLR 19 at 27; [1972] 3 All ER 631 at 639; DJL v Central Authority (2000) 201 CLR 226 at 244 [35]; Harrison v Schipp (2002) 54 NSWLR 612. Assumed in Boswell v Coaks (1894) 6 R 167 at 169. 56 Preston Banking Co v William Allsup & Sons [1895] 1 Ch 141 at 144. 57 In South Australia, Supreme Court Act 1878 (41 & 42 Vict No 116), s 15; Supreme Court Act 1935 (SA), s 48(1)(a). 58 McCann v Parsons (1954) 93 CLR 418 at 430-431. in Wollongong Corporation v Cowan59 Dixon CJ (with whom Williams, Webb, Kitto and Taylor JJ agreed) described the circumstances in which a new trial might be ordered as including errors of law such as misdirection, misreception of evidence, and wrongful rejection of evidence, as well as instances of "surprise, malpractice or fraud". Dixon CJ also reiterated the existence of the second category, where a new trial could be ordered by the appellate court where fresh evidence is discovered by the unsuccessful party, with the general, but not universal, requirements that (i) "reasonable diligence [was] exercised to procure the evidence which the defeated party failed to adduce at the first trial", and (ii) it is reasonably clear that the fresh evidence would have changed the result60. In Commonwealth Bank of Australia v Quade, this Court considered whether the general requirements that attached to the second category also applied to instances in the first category where the error of law arose from an allegation of malpractice. In that case the successful party had, by misconduct, failed to comply with an order for discovery before judgment. The Full Court of the Federal Court held that the result of the trial might have been different if discovery had been provided. The appeal was allowed and a new trial was ordered61. This Court dismissed the further appeal, explaining that in relation to errors of law as well as instances of surprise, malpractice, or fraud it was not necessary to conclude that the result would have been different62. The power to order a new trial in all these cases depended upon the appellate court's assessment, in all the circumstances, of the interests of justice63. Fundamentally, Commonwealth Bank of Australia v Quade concerned the circumstances in which "an appellate court is justified in setting aside a verdict merely on the grounds of fresh evidence"64 (emphasis added). The statutory power to receive the further evidence in that case derived from s 27 of the 59 (1955) 93 CLR 435 at 444; [1955] HCA 16. 60 Wollongong Corporation v Cowan (1955) 93 CLR 435 at 444. See also Commonwealth Bank of Australia v Quade (1991) 178 CLR 134 at 141. 61 Quade v Commonwealth Bank of Australia (1991) 27 FCR 569. 62 Commonwealth Bank of Australia v Quade (1991) 178 CLR 134 at 142-143. 63 Commonwealth Bank of Australia v Quade (1991) 178 CLR 134 at 142-143. 64 Commonwealth Bank of Australia v Quade (1991) 178 CLR 134 at 139. Federal Court of Australia Act 1976 (Cth). The historical antecedents of that power, and the development of the principles by reference to which it was exercised, derived from the approach of equity in relation to bills of review. The power of a court to set aside its own judgments Equity had a separate, and much narrower, power which, in contrast with the broad power contained in bills of review, was not subsumed into the post- Judicature powers of the appellate court. It remains part of the equitable powers of the Supreme Court of South Australia by operation of the common provision vesting in the Supreme Court the jurisdiction of the High Court of Chancery65. The separate, and narrower, equitable power was by an original bill to set aside a decree even when enrolled. Prior to the Supreme Court of Judicature Act, the Consolidated General Orders of the High Court of Chancery 1860 maintained the Chancery distinction between this original bill and the bill of review. As the Vice-Chancellor explained in Pearse v Dobinson (No 1)66, the former was a separate bill which sought to "impeach" or rescind a decree for fraud. It was distinct from the latter, which was described in the Consolidated General Orders as operating to reverse, alter or explain an enrolled decree67. The power by original bill to rescind the decree could be brought without leave68. Hence, the conditions for leave that attached to the bill of review based upon fresh evidence did not apply69. If those conditions were not to be undermined, it was necessary that the circumstances in which the original bill was available be significantly circumscribed. The original bill was commonly described as limited to fraud, although there were different species of fraud to 65 Supreme Court Act 1935 (SA), s 17(2)(a)(i). 66 (1865) 13 LT 518 at 519. 67 Consolidated General Orders of the High Court of Chancery 1860 (UK), O 31 rr 9- 11, esp r 9. 68 Daniell, The Practice of the High Court of Chancery, 5th ed (1871), vol 2 at 1428. Apart from the period 1860-1883: see Consolidated General Orders of the High Court of Chancery 1860 (UK), O 31 r 11; Gordon, "Fraud or New Evidence as Grounds for Actions to Set Aside Judgments", (1961) 77 Law Quarterly Review 69 Pearse v Dobinson (No 1) (1865) 13 LT 518. which the bill could apply. The fraud was not limited to a deceit or dishonesty by the opposing party. It extended, in the words of the Lord Chancellor of Ireland70, to a "fraud on the court" such as where parties who were not hostile nevertheless presented their case to the court as antagonists in order to obtain orders depriving third parties of their rights71. In exceptional circumstances it was possible that it could extend to fraud of a witness by perjury72. There were other categories of case in which the Court of Chancery recognised jurisdiction to set aside a perfected decree in the absence of fraud. One was where the decree affected rights of parties who had not been joined73. Another was where the enrolment of the decree occurred by "surprise"74, involving "[u]nderhanded dealings"75, such as where the enrolling party had led the other party to believe that the decree would not be enrolled76. It is unnecessary in these appeals to attempt to catalogue those other categories or to identify the principles which underlay their recognition. What is more important 70 Kennedy v Daly (1804) 1 Sch & Lef 355 at 375. See, generally, Mitford, A Treatise on the Pleadings in Suits in the Court of Chancery, by English Bill, 5th ed 71 Sheldon v Aland (1731) 3 P Wms 104 at 111 [24 ER 987 at 989]; Boswell v Coaks (1894) 6 R 167 at 168; Cabassi v Vila (1940) 64 CLR 130 at 147; [1940] HCA 41. 72 Baker v Wadsworth (1898) 67 LJQB 301; Cabassi v Vila (1940) 64 CLR 130 at 148; McDonald v McDonald (1965) 113 CLR 529 at 544; SZFDE v Minister for Immigration and Citizenship (2007) 232 CLR 189 at 196 [16]; [2007] HCA 35. 73 Earl of Carlisle v Goble (1659) 3 Chan Rep 94 [21 ER 739]; Cooper, A Treatise of Pleading on the Equity Side of the High Court of Chancery, (1809) at 97; Mitford, A Treatise on the Pleadings in Suits in the Court of Chancery, by English Bill, 5th ed (1847) at 113. See also Cameron v Cole (1944) 68 CLR 571 at 589, 590- 591; [1944] HCA 5; John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1 at 48 [137]; [2010] HCA 19. 74 Story, Commentaries on Equity Pleadings, (1838) at 281 fn 1. 75 Sheridan, "Fraud and Surprise in Legal Proceedings", (1955) 18 Modern Law Review 441 at 448. 76 Stevens v Guppy (1823) 1 Turn & R 178 [37 ER 1065]. See also Gutta v Ierino [2010] WASC 402 (S2) at [40]-[44]. to note is that they were never suggested to extend to malpractice not amounting to fraud in the course of proceedings. The general power to set aside a judgment on the ground of fraud required actual fraud. The "essence of the action [was] fraud"77. The general ground of fraud was not diluted to allow, for instance, the judgment to be set aside for misconduct, accident, surprise, or mistake. This point was made pellucidly in 1867 in Patch v Ward78. In that case, as Lord Cairns LJ observed79, the application was not brought on the basis of either category of the bill of review – either error of law or fresh evidence discovered since the decree. Rather, it was brought upon the basis that the decree was obtained by fraud. His Lordship explained that it was necessary that the fraud be "actual fraud ... the person chargeable with it ... acting in order to take an undue advantage of some other person for the purpose of actually and knowingly defrauding him"80. Similarly, Sir John Rolt LJ, after observing that a particular ground of review in cases of foreclosure was inapplicable, remarked of the claim to set aside the order for fraud81: "I think, for the reasons which have been given by my learned brother, that the fraud must be actual positive fraud, a meditated and intentional contrivance to keep the parties and the Court in ignorance of the real facts of the case, and obtaining that decree by that contrivance. Mere constructive fraud not originating in actual contrivance, but consisting of acts tending possibly to deceive or mislead without any such intention or contrivance, would probably not be sufficient – at all events I think could not, after such delay as has occurred in this case, be deemed sufficient – to set aside the order which has been made. What, therefore, the Appellant has to do is to satisfy the Court that the decree was obtained by the positive and actual fraud and contrivance of the party obtaining it." 77 Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 at 538. 78 (1867) LR 3 Ch App 203. 79 Patch v Ward (1867) LR 3 Ch App 203 at 206. 80 Patch v Ward (1867) LR 3 Ch App 203 at 207. 81 Patch v Ward (1867) LR 3 Ch App 203 at 212-213. The power of a court of equity to rescind its own decrees for fraud was unaffected by the provisions of the Supreme Court of Judicature Act. Indeed, the power expanded to apply also to perfected common law judgments82, the execution of which could no longer be restrained by a common injunction83. As an exception to finality, the power survived the statutory regime which defined the powers of appellate courts because it was, and remained, a "narrowly defined"84 exception and was therefore tolerable. In contrast, the broad equitable bill of review did not survive as a separate procedure alongside the appellate jurisdiction finally created by the Supreme Court of Judicature Act because it would have stultified the operation of the statutorily defined principles of finality, including the conditions to be met before an appellate court could exercise a power to order a new trial. For instance, as Jessel MR said in In re St Nazaire Co85, it would have been a "most remarkable thing" if a Chancery petition for rehearing could have been used to evade rules for appeals such as those involving time limitations. The narrow scope of the general power of a court to rescind a judgment for fraud was reiterated after the Supreme Court of Judicature Act in The Ampthill Peerage86. In the course of considering whether a declaration of legitimacy could be set aside, Lord Wilberforce compared an application to a court to set aside its own judgment and said that equitable fraud or "lack of frankness" would not suffice to set aside a judgment and that "only fraud in a strict legal sense will do"87. Similarly, Lord Simon of Glaisdale said that "lack of frankness or an ulterior or oblique or indirect motive is insufficient"88. 82 Cole v Langford [1898] 2 QB 36; Wyatt v Palmer [1899] 2 QB 106. 83 See also Monroe Schneider Associates (Inc) v No 1 Raberem Pty Ltd (1992) 37 FCR 234 at 239. 84 D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at 17 [34]; [2005] HCA 85 (1879) 12 Ch D 88 at 99. 86 [1977] AC 547. See also Commissioner of Inland Revenue v Redcliffe Forestry Venture Ltd [2013] 1 NZLR 804 at 820 [29]. 87 The Ampthill Peerage [1977] AC 547 at 571. 88 The Ampthill Peerage [1977] AC 547 at 591. In the instant appeals, one case upon which Players placed much reliance was the decision of the Privy Council in Hip Foong Hong v H Neotia and Co89. Players submitted that the decision established that the general power of a court to rescind its own judgments was not limited to fraud but extended also to surprise. But that case was an exercise of the power of an appellate court to order a new trial. It was in the nature of a bill of review. It was not concerned with the equitable power of a court to rescind its own judgment for fraud. The appeal in Hip Foong Hong v H Neotia and Co was to the Privy Council from a refusal by the Full Court of the British Supreme Court for China to set aside the judgment of the trial judge. The appellants relied upon conduct by the respondents about which, in a polite euphemism, Lord Buckmaster said "[t]heir Lordships regard with great disfavour the method of obtaining evidence"90. The conduct, about which their Lordships did not have sufficient evidence to reach a determination of dishonesty, included suppressing evidence, paying witnesses to give evidence, telling a witness what to say in his evidence, and calling evidence from a witness who subsequently swore an affidavit saying that his evidence was untrue91. Delivering the advice of the Privy Council, Lord Buckmaster referred to the ground upon which the new trial was sought as one of "[f]raud or surprise or both"92. It is unclear what was meant by his Lordship's reference to "surprise", which echoed the reference to "surprise, fraud, or conspiracy" in a decision of the House of Lords that he cited93. It is unlikely that the surprise to which he referred could have been much removed from fraud since the extraordinary conduct in that case did not amount to surprise. Although there might be doubt about what was meant by Lord Buckmaster's reference in Hip Foong Hong v H Neotia and Co to "surprise", there is a more fundamental reason why this case does not assist Players. As the House of Lords later observed in Jonesco v Beard94, the Privy Council in Hip 90 Hip Foong Hong v H Neotia and Co [1918] AC 888 at 893. 91 Hip Foong Hong v H Neotia & Co (1917) North-China Herald, 20 January at 160- 92 Hip Foong Hong v H Neotia and Co [1918] AC 888 at 894. 93 Brown v Dean [1910] AC 373 at 375. 94 [1930] AC 298 at 301. Foong Hong v H Neotia and Co had not been concerned with the power of a court to set aside its own decision. The application was to an appellate court for the grant of a new trial. The nature of the power applicable in this case The applications before Hargrave AJ sought to have the Supreme Court of South Australia rescind its own perfected judgment. The proper application by Players was a fresh action to rescind the perfected orders. If fraud had been alleged, as was necessary, then even if there had not already been an appeal from the orders of the Supreme Court the proper course was to bring such an application to the same court rather than to the Full Court of the Supreme Court The power to set aside the Supreme Court's own decision with which Hargrave AJ was concerned was the narrower power that was historically distinct from an appellate court's powers to set aside orders of a court below and order a new trial. Before that narrower power could be exercised in this case it required a pleading, and proof, of actual fraud. Players' alternative contention was that even if actual fraud was required, it could still succeed. That contention should be rejected. Fraud needs to be clearly pleaded and proved. It was not. Unsurprisingly, the factual findings of Hargrave AJ and the Full Court did not address, and were not adequate to establish, actual fraud. The appeals must be allowed on the first ground. Failure to exercise reasonable diligence to discover the fraud The second ground of appeal raised the issue of whether there is a further precondition requiring an applicant who seeks to set aside a judgment for fraud to establish that reasonable diligence was taken prior to the judgment to discover the fraud. Such a requirement is not present in other areas of the law concerned with fraud. As Brennan J said in Gould v Vaggelas96, "[a] knave does not escape liability because he is dealing with a fool". The effect of such a requirement would be that a judgment might be set aside for a less serious, but well 95 McCann v Parsons (1954) 93 CLR 418 at 425-426, citing Jonesco v Beard [1930] AC 298 at 300. 96 (1984) 157 CLR 215 at 252; [1984] HCA 68. See also Toubia v Schwenke (2002) 54 NSWLR 46 at 54 [37]. concealed, fraud but the judgment could never be set aside for an extremely serious but brazen fraud that could reasonably have been detected. The requirement is also inconsistent with the sharp historical distinction between an original bill to set a judgment aside for fraud and a bill of review. Reasonable diligence was never a requirement of an original action based upon fraud to set aside a judgment. It was only ever a condition for leave to be granted for a bill of review based on fresh evidence, where the fresh evidence could relate to any subject matter. But it was not a condition where the bill of review was based on some error of law. However, in Owens Bank Ltd v Bracco97, Lord Bridge of Harwich, delivering the leading speech in the House of Lords, described the English rule for setting aside a judgment on the ground of fraud as requiring that the party seeking to set aside the judgment "prove that fraud by fresh evidence which was not available to him and could not have been discovered with reasonable diligence before the judgment was delivered". This statement was obiter dicta, was not the subject of contrary argument, and was based only upon the submissions of counsel. Nevertheless, in the Full Federal Court in Monroe Schneider Associates (Inc) v No 1 Raberem Pty Ltd98 the parties did not dispute that this was also an accurate statement of Australian law. The requirement was reiterated by Lord Templeman in Owens Bank Ltd v Etoile Commerciale SA99. In Toubia v Schwenke100, Handley JA, with whom Heydon and Hodgson JJA agreed, explained that other earlier English decisions cited in those cases do not support the proposition in each of the Owens Bank appeals that reasonable diligence is a precondition to relief. In particular, in Boswell v Coaks, which was relied upon by Parker LJ in the Court of Appeal in Owens Bank Ltd v Bracco101 and by Lord Templeman in Owens Bank Ltd v Etoile Commerciale 97 [1992] 2 AC 443 at 483. 98 (1992) 37 FCR 234 at 241. See also Bourke v Beneficial Finance Corporation Ltd (1993) 47 FCR 264 at 271-272. 99 [1995] 1 WLR 44 at 48. 100 (2002) 54 NSWLR 46 at 52-54 [27]-[37]. 101 [1992] 2 AC 443 at 459-460. SA102, the Earl of Selborne spoke of the requirement of materiality of the new evidence, not a requirement of diligence103. It appears that the reason for the modern English position that reasonable diligence is required for the success of an original action to rescind a judgment for fraud has been based upon an assimilation of two historical sets of principles. The first relates to the principles concerning reversing, altering, or explaining a decree for fresh evidence on a bill of review, whether the underlying subject matter of the decree was fraud104 or anything else. In this set of principles reasonable diligence had historically been a precondition for relief. The second concerns the principles governing rescission of a decree on an original bill based upon fraud in obtaining the judgment. Perhaps the earliest suggestion that these principles might be assimilated, and treated "even with greater freedom than before", was by the Earl of Selborne in Boswell v Coaks105. In England, this suggestion was adopted in later cases to apply the condition of reasonable diligence to the two separate sets of principles106. That approach has not been adopted in the course of the Australian decisions. After the bill of review was superseded by the power of an appellate court to grant a new trial, in Australia the absence of the condition of due diligence was maintained for new trials based on claims of errors of law107. Further, the condition of due diligence became only a discretionary consideration in that limited class of case where a new trial was sought by application to an appellate court based upon misconduct or fraud108, although a case involving an 102 [1995] 1 WLR 44 at 48. 103 Boswell v Coaks (1894) 6 R 167 at 174. 104 Phosphate Sewage Co v Molleson (1879) 4 App Cas 801. 105 (1894) 6 R 167 at 169. 106 Takhar v Gracefield Developments Ltd [2018] Ch 1. See also Hunter v Chief Constable of the West Midlands Police [1982] AC 529 at 545. 107 Commonwealth Bank of Australia v Quade (1991) 178 CLR 134 at 140. 108 Wollongong Corporation v Cowan (1955) 93 CLR 435 at 444; Commonwealth Bank of Australia v Quade (1991) 178 CLR 134 at 140. allegation of fraud in procuring the judgment is more properly brought first as an original or fresh action109. Conclusion In the Full Court, Players submitted that a strict approach to the requirements for a court to set aside its own perfected judgment, which confined the general power to fraud, would have an absurd consequence. It would mean that misconduct that is discovered before an appeal might be sufficient for the appellate court to order a new trial but if discovered after the appeal then it would not be sufficient. There is nothing absurd about this consequence. As Debelle AJ correctly observed in the Full Court, the submission ignores the interest of finality in litigation110. As five members of this Court said in Burrell v The Queen111, the interest of finality means that "[l]ater correction of error is not always possible. If it is possible, it is often difficult and time-consuming, and it is almost always costly." Even then, if the misconduct amounts to fraud, equity supplies a narrowly defined exception to the principle of finality that permits rescission of a perfected judgment by the original court even after the appeal process has been concluded. This litigation is a good illustration of the need for a strict approach to finality. The trial judgment which was set aside on Players' application, and the new trial which was ordered, concerned events that occurred nearly 25 years ago. The original 29-day trial was held almost 13 years ago. Issues related to the trial have been the subject of three appeals to the Full Court of the Supreme Court of South Australia, three applications for special leave to appeal, and the present appeals to this Court. Even apart from the non-financial impact upon the parties of the prolonged dispute, the legal costs of these proceedings must be many multiples of the underlying value of the licences, which, at best, was $750,000. Players submitted that if the appeals were allowed then Clone should not be entitled to its costs in the courts below. Players said that, despite Clone's pleading to the contrary, Clone had accepted that if its conduct had misled the 109 McCann v Parsons (1954) 93 CLR 418 at 425-426, citing Jonesco v Beard [1930] AC 298 at 300. 110 Clone Pty Ltd v Players Pty Ltd (In liquidation) (Receivers Appointed) (2016) 127 SASR 1 at 183 [715]. 111 (2008) 238 CLR 218 at 223 [16]; [2008] HCA 34. courts then it was capable of amounting to malpractice sufficient to set aside the original judgment. Players said that Clone's position had only changed in this Court. There was a dispute about the extent to which Clone had accepted this proposition and whether this should affect an order as to costs. However, as Clone observed, the Attorney-General for South Australia, whose submissions were of considerable assistance in this Court, had submitted in the courts below that fraud or conduct analogous to fraud must be proved. The parties had joined issue on this point in the courts below. Whether or not Players' submissions are correct about the manner in which the case was run, Clone should be entitled to the usual order for its costs in the courts below and in this Court. The appeals must be allowed. Orders should be made as follows: In Matter No A22/2017: (1) Appeal allowed. Set aside orders 3, 4 and 5 of the Full Court of the Supreme Court of South Australia dated 8 December 2016 and, in their place, order that: the appeal to the Full Court of the Supreme Court of South Australia be allowed; the orders of the Supreme Court of South Australia (Hargrave AJ) dated 9 November 2015 in proceeding SCCIV-04-319 be set aside and, in their place, order that: the application be refused; and the first, seventh, eighth and tenth defendants pay the plaintiff's costs; and the first to fourth respondents pay the appellant's costs. The first to fourth respondents pay the appellant's costs of the appeal to this Court. In Matter No A23/2017: (1) Appeal allowed. Set aside orders 3, 4 and 5 of the Full Court of the Supreme Court of South Australia dated 8 December 2016 and, in their place, order that: the appeal to the Full Court of the Supreme Court of South Australia be allowed; the orders of the Supreme Court of South Australia (Hargrave AJ) dated 9 November 2015 in proceeding SCCIV-10-819 be set aside and, in their place, order that: the action be dismissed; and the plaintiffs pay the defendant's costs; and the first to fourth respondents pay the appellant's costs. The first to fourth respondents pay the appellant's costs of the appeal to this Court.

HIGH COURT OF AUSTRALIA SAS TRUSTEE CORPORATION APPELLANT AND RESPONDENT SAS Trustee Corporation v Miles [2018] HCA 55 14 November 2018 ORDER Appeal allowed. Set aside orders 1 and 2 of the order of the Court of Appeal of the Supreme Court of New South Wales made on 4 May 2017 and in their place order that the appeal to that Court be dismissed. The appellant pay the respondent's costs of this appeal. On appeal from the Supreme Court of New South Wales Representation N J Williams SC with T M Ower and S Palaniappan for the appellant (instructed by SAS Trustee Corporation) D F Jackson QC with J M Morris SC and M J Weightman for the respondent (instructed by Cardillo Gray Partners) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS SAS Trustee Corporation v Miles (Superannuation) Act 1906 Superannuation and pensions – Police pension – Disabled member of police force – Entitlement to additional allowance – Where respondent certified by appellant as incapable of personally exercising functions of police officer due to specified infirmities determined by Commissioner of Police to have been caused by being hurt on duty – Where respondent received annual superannuation allowance as disabled member of police force – Where s 10(1A)(b)(ii) of Police that annual Regulation superannuation allowance might increase by additional amount commensurate with member's incapacity for work outside police force – Where respondent sought additional amount by reason of supervening infirmity increasing respondent's incapacity for work outside police force – Where supervening infirmity increasing respondent's incapacity for work outside police force not subject of certification by appellant or determination by Commissioner of to additional amount of annual Police – Whether superannuation allowance. respondent entitled (NSW) provided Statutes – Interpretation – Principles – Context – Cognate terms – Choice between textually available constructions – Where cognate terms "incapable", "incapacity" and "totally incapacitated" appearing in Act – Where alternative textual constructions as to whether infirmity increasing incapacity for work outside police force required to be caused by being hurt on duty – Whether cognate terms to be construed as bearing same meaning. Words and phrases – "additional amount", "annual superannuation allowance", "certified", "commensurate", "disabled member of the police force", "hurt on duty", "incapable of personally exercising the functions of a police officer", "incapacity for work outside the police force", "infirmity of body or mind", "member of the police force", "specified infirmity", "supervening infirmity or incapacity". Police Regulation (Superannuation) Act 1906 (NSW), ss 1, 1A, 3, 4, 5, 5A, 7, 8, Superannuation Administration Act 1996 (NSW), s 57. KIEFEL CJ, BELL AND NETTLE JJ. This is an appeal from a judgment of the Court of Appeal of the Supreme Court of New South Wales (Payne JA and Sackville A-JA, Schmidt J dissenting)1 allowing an appeal from a judgment of Judge Neilson of the District Court of New South Wales2. The issue is the meaning of the expression "incapacity for work outside the police force" in s 10(1A)(b)(ii) of the Police Regulation (Superannuation) Act 1906 (NSW) ("the Act"). In effect, the expression presents a constructional choice between two possibilities. Either it means incapacity for work outside the police force from a specified infirmity of body or mind determined to have been caused by being hurt on duty when a member of the police force – which is the meaning determined by Judge Neilson and Schmidt J – or it means incapacity for work outside the police force howsoever caused – which is the meaning ascribed to it by the majority of the Court of Appeal. As will be explained, context and purpose favour the former and it appears consistent with relevant extrinsic materials. Relevant statutory provisions Section 3 of the Act establishes the Police Superannuation Fund ("the Fund"), which, subject to the Act, is under the control of the SAS Trustee Corporation ("STC"). It applies in respect of persons who became members of the police force before 1 April 19883. The Fund is comprised of deductions of six per cent made from members' salaries under s 5, other deductions and payments under ss 5A and 20A, amounts appropriated from the Consolidated Revenue Fund under s 4 and other fees and moneys received by STC pursuant to the Act. The Act provides for defined benefits and s 4 requires that if at any time the amount of the Fund is insufficient to meet the superannuation allowances and other amounts payable under the Act, the amount of the deficiency is a charge against the Consolidated Revenue Fund. Section 7 Section 7 of the Act provides for the "annual superannuation allowance" payable to a member of the police force who has served 20 years or more of equivalent full-time service and who retires on or after reaching 60 years of age, or before reaching that age if rendered incapable of exercising the functions of a 1 Miles v SAS Trustee Corporation [2017] NSWCA 86. 2 Miles v SAS Trustee Corporation (2016) 22 DCLR (NSW) 223; [2016] NSWDC 56. 3 Police Regulation (Superannuation) Act 1906 (NSW), s 1A. Bell Nettle police officer from an infirmity of body or mind caused otherwise than by being hurt on duty. The amount is a percentage of attributed salary proportionate to the member's number of years of service as a police officer (up to a maximum of 72.75 per cent for 30 or more years of full-time service): Superannuation allowance except where member hurt on duty The annual superannuation allowance for a member of the police force who has served 20 years or more of equivalent full-time service and retires on or after attaining the age of 60 years or, being under that age, is discharged after being certified under section 8(1) to be incapable, from infirmity of body or mind, of personally exercising the functions of a police officer referred to in section 14(1) of the Police Act 1990, is an amount calculated in accordance with the following formula: P = Y x ESR where: P represents the amount of the annual superannuation allowance payable. Y represents a percentage of the member's attributed salary of office at the date of the member's retirement or discharge equal to the sum of: the percentage specified in the Second Column of the Table to this subsection opposite the total number of years of both full-time and part-time service specified in the First Column of that Table that has been completed by the member, and in the case of a person who has completed less than 30 years of equivalent full-time service, one-twelfth of 2.425 per cent for each month of full-time or part-time service that has been completed by the member after the last completed year of service referred to in paragraph (a), ESR represents the equivalent service ratio of the member as at the date of the member's retirement or discharge. Bell Nettle First Column Second Column Completed years of both full- time and part-time service of member Amount per centum 30 or more (2) An annual superannuation allowance under subsection (1) shall not be payable to a member of the police force to whom an annual superannuation allowance is payable under section 10. It is to be noted that such a member is not entitled to any "additional amount" for incapacity for employment outside the police force. Section 8 provides that a superannuation allowance must not be granted or paid under s 7 to a member who is discharged under the age of 60 years unless STC, having regard to the medical advice of two members of the Police Medical Board or any one or more medical practitioners nominated by STC, has certified the member to be incapable from infirmity of body or mind (caused otherwise than by being hurt on duty) of exercising the functions of a police officer: Bell Nettle Determination of members medically unfit (1) A superannuation allowance or gratuity must not be granted or paid under section 7 or 14 to a member of the police force who: is discharged after the commencement of the Police Regulation (Superannuation and Appeals) Amendment Act 1973, and at the time of the member's discharge is under the age of 60 years, unless STC (having regard to medical advice on the condition and fitness for employment of the member) has certified the member to be incapable, from infirmity of body or mind, of personally exercising the functions of a police officer referred to in section 14(1) of the Police Act 1990. Note. Section 14(1) of the Police Act 1990 provides that a police officer has the functions conferred or imposed on a constable by or under any other law (including the common law) of the State. For the purposes of determining a member's incapacity: STC is not to have regard to the member's actual rank or position or functions (other than the functions referred to in subsection (1)), and the capacity to exercise a function by delegation is not taken to be a capacity to personally exercise the function. (2A) (Repealed) In this section: medical advice means the advice of: 2 members of the Police Medical Board, or any one or more medical practitioners nominated by the STC." Bell Nettle Section 10 Section 10 relevantly provides for the "annual superannuation allowance" payable to a member of the police force who is discharged after being certified incapable from a specified infirmity of body or mind of exercising the functions of a police officer caused by the member being hurt on duty when a member of the police force, or who has resigned or retired and who had such an infirmity at the time of his or her resignation or retirement: "10 Superannuation allowance where member hurt on duty In this section: attributed salary of office means: in relation to a member of the police force who is discharged – the member's attributed salary of office at the date of the member's discharge, or in relation to a former member of the police force who resigned or retired – the member's attributed salary of office at the date of the member's resignation or retirement. disabled member of the police force means: a member of the police force who is discharged after being certified, pursuant to section 10B(1), to be incapable, from a specified infirmity of body or mind, of personally exercising the functions of a police officer referred to in section 14(1) of the Police Act 1990, or a former member of the police force who resigned or retired and who, according to a certificate given pursuant to section 10B(2) at any time after the member's resignation or retirement, was incapable, from an infirmity of body or mind, of personally exercising the functions of a police officer referred to in section 14(1) of the Police Act 1990 at the time of the member's resignation or retirement, that infirmity being determined, pursuant to section 10B(3) or on appeal, to have been caused by the member being hurt on duty or the former member having been hurt on duty when he or she was a member of the police force, as the case may be. retired includes discharged as referred to in section 7 or 14. Bell Nettle (1A) Subject to this section, the annual superannuation allowance for a disabled member of the police force is: an amount that is equal to 72.75 per cent of the member's attributed salary of office, except where paragraph (c) applies, an additional amount that is: not more than 12.25 per cent of the member's attributed salary of office, and commensurate, in the opinion of STC, with the member's incapacity for work outside the police force, and if the disabled member is totally incapacitated for work outside the police force and, in the opinion of STC, the member was hurt on duty because the member was required to be exposed to risks to which members of the general workforce would normally not be required to be exposed in the course of their employment, an additional amount that is: not less than 12.25 per cent and not more than 27.25 per cent of the member's attributed salary of office, and commensurate, in the opinion of STC, with the risks to which the member was so required to be exposed, multiplied by the equivalent service ratio of the member as at the date of the member's discharge, resignation or retirement. (1B) An annual superannuation allowance may be granted under this section to a disabled member of the police force whatever the member's length of service. (1BA) A superannuation allowance referred to in subsection (1A) or an additional amount of a superannuation allowance referred to in subsection (1D) is not payable to a disabled member of the police force unless an application for payment of the allowance or additional amount concerned is made: Bell Nettle before the member reaches the age of 60 years, or not later than 5 years after the member resigns or retires, whichever is the later. (1D) STC may: (a) make a determination at any time of an additional amount of a superannuation allowance under this section, and vary any such determination at any time, and may direct that the determination or variation take effect from such date as STC considers appropriate. (4)-(7) (Repealed)" Relevantly, ss 10(1), 10(1A), 10(1B) and 10B were introduced by the Police Regulation (Superannuation and Appeals) Amendment Act 1979 (NSW)4. Prior to their commencement, members of the police force who were hurt on duty were entitled to a superannuation allowance not exceeding 72.75 per cent of the member's salary of office. As can be seen, s 10(1A)(a) is more generous than s 7 in that it provides in effect that, where a member is caused to resign, retire or be discharged from the police force by being rendered incapable of exercising the functions of a police officer from an infirmity of body or mind caused by the member being hurt on duty when a member of the police force, the superannuation allowance payable to the member is the full 72.75 per cent of attributed salary regardless of years of service. In substance, s 10(1A)(a) equates the superannuation allowance payable to such a member with the superannuation allowance which would have been payable to the member if, but for the infirmity suffered as a result of being hurt 4 Police Regulation (Superannuation and Appeals) Amendment Act 1979 (NSW), Sch 1 (8), (10). Bell Nettle on duty, the member had gone on to complete 30 years' full-time service and retired on or after reaching the age of 60. Further, in contrast to s 7 – which does not provide for any "additional amount" for incapacity for employment outside the police force – s 10(1A)(b) provides in substance that, except where s 10(1A)(c) applies, the annual superannuation allowance payable to a member who is caused to resign, retire or be discharged from the police force by being rendered incapable of exercising the functions of a police officer from an infirmity of body or mind caused by the member being hurt on duty when a member of the police force includes an "additional amount" of up to 12.25 per cent of attributed salary commensurate with the member's incapacity for work outside the police force. Section 10(1A)(c) applies where a member is rendered incapable of exercising the functions of a police officer by reason of an infirmity of body or mind caused by being hurt on duty when a member of the police force and is totally incapacitated for work outside the police force. It provides that the annual superannuation allowance payable to the member includes by way of an "additional amount" not less than 12.25 per cent of attributed salary, and, if the member is so hurt on duty because of being exposed to abnormal risks, up to 27.25 per cent of attributed salary commensurate with the risks to which the member was so exposed. Section 10B provides that an annual superannuation allowance must not be granted under s 10 to a member of the police force who is discharged or resigns or retires unless STC has certified the member incapable from a specified infirmity of body or mind of personally exercising the functions of a police officer, and, in the case of a member who resigns or retires, unless the member notifies the Commissioner of Police before resignation or retirement and within six months of receiving the injury which has caused the infirmity of that injury. It further requires the Commissioner of Police to make a determination of whether the certified infirmity was caused by the member being hurt on duty when a member of the police force: "10B Medical examination of disabled member and determination of whether hurt on duty (1) An annual superannuation allowance or gratuity must not be granted under section 10 to a member of the police force who is discharged unless STC (having regard to medical advice on the condition and fitness for employment of the member) has certified the member to be incapable, from a specified infirmity of body or mind, of personally exercising the functions of a police officer referred to in section 14(1) of the Police Act 1990. Bell Nettle (2) An annual superannuation allowance or gratuity must not be granted under section 10 to a former member of the police force who resigned or retired unless: the former member notified the Commissioner of Police before the member's resignation or retirement and within 6 months of receiving the injury which has caused the member's infirmity of body or mind, of that injury, and if the regulations so require, the notification was in the prescribed form, and STC (having regard to medical advice on the condition and fitness for employment of the member) has certified that the former member was incapable, from that infirmity of body or mind, of personally exercising the functions of a police officer referred to in section 14(1) of the Police Act 1990 at the time of the member's resignation or retirement. (2A) For the purposes of determining a member's or former member's incapacity under this section: STC is not to have regard to the member's or former member's actual rank or position or any functions (other than the functions referred to in subsection (2)(c)) of the member or former member at the time to which the certification relates, and the capacity to exercise a function by delegation is not taken to be a capacity to personally exercise the function. (2B), (2BA) (Repealed) In this section: medical advice means the advice of: 2 members of the Police Medical Board, or any one or more medical practitioners nominated by the STC. (3) Where a member or former member of the police force is duly certified under subsection (1) or (2), the Commissioner of Police shall: Bell Nettle Facts decide whether or not the infirmity to which the certificate relates was caused by the member being hurt on duty or the former member having been hurt on duty when he or she was a member of the police force, as the case may be, and the date or dates on which the member or former member was hurt on duty, and give the member or former member written notification of the decision." On 28 August 2003, Mr Miles, the respondent in these proceedings, was certified pursuant to s 10B(1) of the Act as being incapable, from four specified infirmities of an orthopaedic nature, of discharging the duties of his office as a police officer. The specified infirmities were: (a) cervical spine, symptomatic degenerative changes; (b) lumbar spine, symptomatic degenerative changes; (c) left shoulder, recurrent dislocation; and (d) right knee, symptomatic chondromalacia. On 4 September 2003, a delegate of the Commissioner of Police certified, pursuant to s 10B(3)(a) of the Act, that those infirmities were caused by Mr Miles being hurt on duty and he was medically discharged from the police force on 5 September 2003. In accordance with s 10(1A)(a) of the Act, Mr Miles was entitled to, and received, a superannuation allowance equal to 72.75 per cent of his attributed salary of office. In the course of the ensuing years, Mr Miles made several applications to increase his annual superannuation allowance. In 2004, Mr Miles applied pursuant to s 10(1A)(b) of the Act to increase his annual superannuation allowance to 85 per cent of his attributed salary. The allowance was ultimately determined to be 82.55 per cent by the District Court of New South Wales, following an appeal by Mr Miles from the determination made by STC, the appellant in these proceedings. In 2008 Mr Miles applied to STC to amend the original certificate issued by the Commissioner of Police to include an additional infirmity of post- traumatic stress disorder ("PTSD"). STC rejected that application on 29 October Mr Miles made a further application in 2009 to amend his s 10B(1) certificate to include PTSD, contending that at the time the original certificate was issued he was unaware that he had a psychiatric condition. STC also rejected that application and Mr Miles unsuccessfully appealed STC's decision to Bell Nettle the Industrial Court of New South Wales5 and then to the Full Bench of the Industrial Court6. On 12 November 2013, Mr Miles made a further application pursuant to s 10(1A)(b) of the Act for an increase in his superannuation allowance to 85 per cent. On 29 January 2015, STC rejected that application. Mr Miles commenced an application in the District Court of New South Wales as a person aggrieved by STC's decision7. On 11 April 2016, Judge Neilson confirmed8 STC's decision on the basis that, notwithstanding that the PTSD had increased Mr Miles' incapacity for work outside the police force, on the proper construction of s 10(1A)(b)(ii) Mr Miles' PTSD could not be taken into account as it was a supervening incapacity and not one arising from the four specified infirmities certified by STC. Constructional choice As was observed at the outset, s 10(1A)(b)(ii) permits of a constructional choice. On one view of its terms, it provides for an "additional amount" of annual superannuation allowance for a "disabled member of the police force" who is incapacitated for work outside the police force regardless of the cause of the member's incapacity for work outside the police force. The alternative view is that it provides for an "additional amount" of annual superannuation allowance for a "disabled member of the police force" who is incapacitated for work outside the police force only if the incapacity for work outside the police force results from a specified infirmity of body or mind determined, in accordance with s 10B, to have been caused by the member having been hurt on duty when a member of the police force. The appellant contended for the latter construction, arguing that the incapacity referred to in s 10(1A)(b)(ii) is, like the incapacity referred to in s 10B, an incapacity arising from a certified infirmity caused by being hurt on duty. It was acknowledged that ss 10(1A)(b) and 10(1D) recognise that incapacity from a "hurt on duty" infirmity may increase in extent, but the appellant submitted that those provisions do not permit new and unrelated infirmities to be taken into account in s 10(1A)(b)(ii). 5 Miles v SAS Trustee Corporation [2010] NSWIRComm 69. 6 Miles v SAS Trustee Corporation (2011) 206 IR 164. 7 See Police Regulation (Superannuation) Act 1906 (NSW), s 21(1). 8 Miles v SAS Trustee Corporation (2016) 22 DCLR (NSW) 223. Bell Nettle The respondent contended that s 10(1A) is merely a quantification provision. It followed, in the respondent's submission, that, once a member has satisfied the steps in s 10B and thereby met the definition of a "disabled member of the police force", the incapacity referred to in s 10(1A)(b)(ii) (and, too, the total incapacity referred to in s 10(1A)(c)) may arise at any time and from any source. So much is apparent, it was said, in the deliberate change of language between, on the one hand, the reference to "incapacity for work outside the police force" in s 10(1A)(b)(ii) and, on the other hand, the reference to "incapable … of personally exercising the functions of a police officer" in the s 10(1) definition of "disabled member of the police force" and in ss 10B(1) and 10B(2)(c). According to the respondent, that context rebuts any same-word presumption9 of the meaning of incapacity in s 10(1A) compared with ss 10(1) and 10B. The proper construction of s 10(1A)(b)(ii) The starting point for ascertainment of the meaning of a statutory provision is, of course, the text of the provision considered in light of its context and purpose10. Where the text read in context permits of more than one potential meaning, the choice between those meanings may ultimately turn on an evaluation of the relative coherence of each with the scheme of the statute and its identified objects or policies11. The majority of the Court of Appeal held that there was no reason to restrict s 10(1A)(b)(ii) to incapacity for work outside the police force caused by the member having been hurt on duty when a member of the police force. But, with respect, there are in fact a number of textual and contextual indications in ss 7, 10(1A)(b)(ii), 10(1A)(c) and 10B that the operation of s 10(1A)(b)(ii) is so limited. 9 See McGraw-Hinds (Aust) Pty Ltd v Smith (1979) 144 CLR 633 at 643 per Gibbs J; [1979] HCA 19; Murphy v Farmer (1988) 165 CLR 19 at 27 per Deane, Dawson and Gaudron JJ; [1988] HCA 31. 10 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408 per Brennan CJ, Dawson, Toohey and Gummow JJ; [1997] HCA 2; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69] per McHugh, Gummow, Kirby and Hayne JJ; [1998] HCA 28; Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503 at 519 [39]; [2012] HCA 55; SZTAL v Minister for Immigration and Border Protection (2017) 91 ALJR 936 at 940-941 [14] per Kiefel CJ, Nettle and Gordon JJ; 347 ALR 405 at 410; [2017] HCA 34. 11 Taylor v Owners – Strata Plan No 11564 (2014) 253 CLR 531 at 557 [66] per Gageler and Keane JJ; [2014] HCA 9; SZTAL (2017) 91 ALJR 936 at 944 [38] per Gageler J; 347 ALR 405 at 415. Bell Nettle Beginning with s 7, although a member of the police force who is rendered incapable of exercising the functions of a police officer from an infirmity of body or mind caused otherwise than by being hurt on duty is entitled to a superannuation allowance proportionate to the member's number of years of service, such a member is not entitled to any "additional amount" in respect of the member's incapacity for work outside the police force. That suggests, or at least is consistent with, a legislative intent that there should be no annual superannuation allowance paid in respect of incapacity for work outside the police force not caused by being hurt on duty. Admittedly, as the majority of the Court of Appeal reasoned12, s 7 is not in itself inconsistent with a legislative intent that a member who is rendered incapable of discharging the functions of a police officer by reason of an infirmity of body or mind caused by being hurt on duty should be paid an additional amount in respect of any incapacity for work outside the police force caused by something else. But it is significant that there are no explicit or implicit indications in s 7 that such a result was intended. Going next to s 10(1A)(b)(ii), as has been seen, "disabled member of the police force" is defined in s 10(1) as a member who has been certified incapable of personally exercising the functions of a police officer from a specified infirmity caused by being hurt on duty. In the absence of contrary legislative indication, the natural and ordinary linguistic implication of the use in s 10(1A)(b) of the cognate expression "incapacity for work outside the police force"13 is that it imports the same idea of incapacity: scil incapacity from a specified infirmity caused by the member being hurt on duty. Certainly, as the respondent submitted, the definition of "disabled member of the police force" refers to incapacity in respect of police work while the expression in s 10(1A)(b)(ii) is descriptive of incapacity in respect of work outside it. But given the use of cognate expressions within the one section, it is reasonable to suppose that, if a different meaning of incapacity had been intended in the latter context, it would have been specified. Taken with the matters mentioned in what follows, that points towards the construction of s 10(1A)(b)(ii) urged by the appellant. Turning next to s 10(1A)(c), the statutory exclusion of s 10(1A)(b) where s 10(1A)(c) applies, and vice versa, conveys that "incapacitated" in the expression "totally incapacitated for work outside the police force" in s 10(1A)(c) 12 Miles v SAS Trustee Corporation [2017] NSWCA 86 at [74] per Sackville A-JA (Payne JA agreeing at [1]). 13 Emphasis added. Bell Nettle has the same meaning as "incapacity" in the expression "incapacity for work outside the police force" in s 10(1A)(b)(ii). Contrary to the respondent's submissions, it is also apparent that "incapacitated for work outside the police force" in s 10(1A)(c) must mean incapacitated for work outside the police force from the specified infirmity of body or mind which rendered the member incapable of exercising the functions of a police officer and which was caused by being hurt on duty. That is implicit in the requirement in s 10(1A)(c)(ii) that the additional amount of between 12.25 and 27.25 per cent of attributed salary payable under s 10(1A)(c)(i) in respect of the disabled member's incapacity for work outside the police force be commensurate with the abnormality of the risks to which the member was exposed. As the chapeau to s 10(1A)(c) makes clear, the risks are those that cause the member to be hurt on duty. The provision thereby draws a clear link between the additional amount payable and the event of the member being hurt on duty. Moreover, despite the respondent's suggestion that the provision should perhaps be seen as the result of political compromise of which the aims are inscrutable, it is inherently unlikely that the legislative purpose of s 10(1A)(c) is to provide for additional amounts by reference to risks that played no role in rendering the member incapable of work outside the police force. The idea of a legislative intent to provide for an additional amount of up to 15 per cent of attributed salary for risks to which a member was exposed but which did not contribute to the member's incapacity for work outside the police force not only is arbitrary but significantly ill-accords with the absence of any "additional amount" benefits from the benefits for which s 7 provides where a member is hurt outside the course of duty. By contrast, the likelihood of a legislative intent to provide for an additional amount of up to 15 per cent of attributed salary for risks so grave as to result in an injury when on duty which renders a member both incapable of discharging the functions of a police officer and totally incapacitated for work outside the police force appears compelling. Given that "incapacity" in the expression "incapacity for work outside the police force" in s 10(1A)(b)(ii) appears to have the same meaning as "incapacitated" in the expression "totally incapacitated for work outside the police force" in s 10(1A)(c), s 10(1A)(c) thus provides strong support for the conclusion that "incapacity" in s 10(1A)(b)(ii) means, as it does in the cognate term in s 10(1A)(c), incapacitated for work outside the police force from the specified infirmity of body or mind which rendered the member incapable of exercising the functions of a police officer and which was caused by being hurt on duty. Bell Nettle The likelihood of that being so is in turn further fortified by the fact that, perforce of s 10B(2), no annual superannuation allowance is payable under s 10 to a member who resigns or retires by reason of being rendered incapable of exercising the functions of a police officer from a specified infirmity caused by being hurt on duty, unless the member notifies the Commissioner of Police of the injury before resigning or retiring and within six months of receiving the injury which caused that specified infirmity. The purpose of the notification is to allow the Commissioner of Police to investigate the injury for the purpose of making a "hurt on duty" determination under s 10B(3). If s 10 contemplated the payment of an additional amount for incapacity for work outside the police force arising from an infirmity other than the specified infirmity of body or mind caused by being hurt on duty, it is to be expected that the Act would have provided for similar temporal limits for notification of that other infirmity. Otherwise, s 10 would have the unlikely consequence that, although the Act sets strict time limits for the notification of the injury claimed to have rendered a member who resigns or retires incapable of exercising the functions of a police officer, and conditions the payment of annual superannuation allowances on compliance, a member could delay for an indefinite period of time before notifying the Commissioner of Police or STC of an injury not caused by being hurt on duty that is claimed to render the member who resigns or retires incapable of work outside the police force. The majority of the Court of Appeal observed14, and the respondent emphasised, that s 10(1BA) permits a disabled member to make an application for payment of the annual superannuation allowance or additional amount before the member reaches the age of 60 years or up to five years after the member resigns or retires, whichever is later, and s 10(1D) empowers STC to make and vary a determination of an additional amount "at any time". But contrary to the reasoning of the majority of the Court of Appeal, and the respondent's submissions, that does not imply that a member may notify STC at any time up to the age of 60 years or five years after resigning or retiring of an infirmity caused otherwise than by being hurt on duty that is claimed to render the member incapable of work outside the police force. Those sub-sections do not undercut the notification requirements in s 10B(2). Rather, it appears from the way in which s 10(1BA) groups the application time limits for superannuation allowance with the application time limits for additional amounts, and seemingly treats them as one, that the only class of injury contemplated by s 10(1BA) is injury sustained in the course of duty which results in an infirmity rendering the member incapable of exercising the functions of a police officer. Hence, as it 14 Miles v SAS Trustee Corporation [2017] NSWCA 86 at [4] per Payne JA, [67] per Sackville A-JA. Bell Nettle appears, s 10(1D) is limited to dealing with the possibility of that specified infirmity so developing over time as either to cause or to exacerbate the member's incapacity for work outside the police force. Taking those considerations together conveys that the preferable view of s 10(1A)(b)(ii) is that, like s 10(1A)(c), it contemplates only one kind of incapacity for work outside the police force, being incapacity the result of the specified infirmity of body or mind determined to have been caused by the member being hurt on duty when a member of the police force. Lembcke v SAS Trustee Corporation In Lembcke v SAS Trustee Corporation15, the Court of Appeal of the Supreme Court of New South Wales rejected an argument that the "additional amount" payable under s 10(1A)(b)(ii) was subject to an implicit limitation that a disabled member receiving a superannuation allowance under s 10(1A) as well as earnings outside of the police force should not be better off than he or she would have been on his or her pre-disablement salary. The argument was in effect that s 10(1A) should be conceived of as having a hybrid character comprised of a purely superannuate automatic entitlement to 72.75 per cent and a further compensatory element for incapacity for work outside the police force of up to 12.25 per cent16. Santow JA held17 that, regardless of its proper characterisation, s 10(1A) required no more than a consideration of what additional amount, in the opinion of STC, is commensurate, in the sense of proportionate, with the member's incapacity for work outside the police force. Meagher JA observed18 in a similar vein that the "section requires … one question, and one question only, what is the applicant's incapacity for work outside the police force?" Ipp JA held19 that s 10(1A) was plainly not compensatory and therefore the idea of an implied limitation fell away. 15 (2003) 56 NSWLR 736. 16 Lembcke (2003) 56 NSWLR 736 at 746 [29] per Santow JA. See also 17 Lembcke (2003) 56 NSWLR 736 at 750 [48] (Meagher JA and Ipp JA agreeing 18 Lembcke (2003) 56 NSWLR 736 at 738 [4]. 19 Lembcke (2003) 56 NSWLR 736 at 751-752 [56]-[57] (Meagher JA agreeing Bell Nettle In this case, Sackville A-JA invoked Lembcke as support for the idea that the construction of s 10(1A) for which the respondent contended should not be rejected simply because it produces what might be thought to be anomalous results20. Likewise, in submissions before this Court, the respondent invoked Lembcke in support of his submission that the construction of s 10(1A) for which he contended is consistent with the superannuate nature of a fund into which members pay contributions to ensure that if they are "hurt on duty" and in consequence lose their careers in the police force, they are thereafter provided for with superannuation benefits at a level commensurate with their ability to work outside the police force. Apart from making clear, however, that s 10(1A) is to be construed in accordance with its terms rather than according to preconceptions about underlying policy, Lembcke really takes the matter no further. Plainly enough, s 10(1A) provides for benefits commensurate with the extent to which a member is incapacitated for work outside the police force. But the question remains whether, upon its proper construction, s 10(1A) confines those benefits to incapacity for work outside the police force the result of an infirmity caused by injury sustained in the course of duty. And for the reasons given, it should be concluded that it does. Legislative history and extrinsic materials Finally, although it is not a strong point, that construction of s 10(1A) appears consistent with the legislative history of the Act and the extrinsic materials. As has been discussed, ss 10(1), 10(1A) and 10B of the Act were introduced by amendment in 1979 to replace provisions which allowed for a maximum pension of 72.75 per cent of salary in office. The purpose of the amendment was stated in the Second Reading Speech in the lower house thus21: "The main changes will be to bring benefits to Police in line with those under the Workers' Compensation Act which has been used to determine the level of lump sum benefits for the loss of a limb, the loss of an eye, etc, and also in the event of death. Pensions on discharge due to injury may be increased from 72.75 per cent of salary to 85 per cent provided such increase does not 20 Miles v SAS Trustee Corporation [2017] NSWCA 86 at [55]-[56]. 21 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 16 October 1979 at 1844. Bell Nettle exceed the amount that would have been paid as a weekly allowance had the Workers' Compensation Act applied. The Police Superannuation Board is to be increased to include the Registrar of the Workers' [C]ompensation Commission and this will be the body to determine the amount of pension to be paid and will take into consideration the nature of the wound or injury and the ability of the officer to earn on the open labour market, and any other relevant factors. The 85 per cent of salary will be paid where the injured officer is totally incapacitated for all work as distinct from Police duties. Cabinet also decided that in special circumstances more than 85 per cent, but never exceeding 100 per cent, of salary could be paid if in the opinion of the Commissioner the injury which resulted in total incapacity was received in circumstances which exposed the officer to exceptional risks." (emphasis added) It was further stated that22: "The bill would provide a statutory minimum superannuation allowance of 72.75 per cent of salary. A member of the police force whose disability also causes incapacity for work outside the police force would be paid an amount in addition to the disablement allowance. The additional amount would not exceed 12.25 per cent of the salary of office and be commensurate with the extent of incapacity. In such cases the maximum annual allowance would therefore be 85 per cent of salary. However, in cases of total incapacity associated with exposure to exceptional risk, than 12.25 per cent and no more than 27.25 per cent – the maximum allowance being therefore 100 per cent of salary. The result would be that hurt-on- duty pensions could reflect the degree of incapacity suffered and also any exceptional risk undertaken." (emphasis added) the additional amount would be no less It is to be observed that the latter emphasised observations were directed to s 10(1A)(c) rather than s 10(1A)(b), but the fact that s 10(1A)(c) was intended to have the effect there stated is consistent with s 10(1A)(b) operating as the appellant contended. 22 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 16 October 1979 at 1845. Bell Nettle In the Court of Appeal, Sackville A-JA pointed to23 the following part of the Second Reading Speech as supporting the contrary conclusion24: "Careful consideration has been given to the time from which the new hurt-on-duty benefits should operate. The conclusion reached is that the only way of ensuring equity in this matter is to provide that the new benefits apply only in respect of injuries received after the commencement of the hurt-on-duty provisions of the bill. However, the benefits would apply to a member of the police force who is hurt on duty after the commencement of these provisions but who does not suffer infirmity until he has left the police force." With respect, however, that statement is apt to refer to a situation where the infirmity is caused from being hurt on duty but does not manifest until a later point. It does not suggest that s 10(1A)(b)(ii) should be construed otherwise than as the appellant contended. Medical examinations Finally, counsel for the respondent drew attention to the fact that, although s 10B makes explicit provision for STC to have regard to medical advice before certifying a member incapable from a specified infirmity caused by being hurt on duty of exercising the functions of a police officer, the Act makes no explicit provision for STC to have regard to medical advice when determining whether a member is incapacitated or totally incapacitated for work outside the police force. In counsel's submission, that difference is unsurprising and not inconsistent with the construction of s 10(1A)(b) for which he contended. Once a member is certified incapable of exercising the functions of a police officer, the member is granted an annual superannuation allowance and, if the member thereafter applies for a variation of the allowance, STC would have power as part of its power to do "all things that are necessary or convenient to be done for, or in connection with, the exercise of STC's functions"25 to insist upon medical examination as a condition of its consideration of the application for variation, and to engage medical advisors as appropriate. 23 Miles v SAS Trustee Corporation [2017] NSWCA 86 at [92]. 24 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 16 October 1979 at 1846. 25 Superannuation Administration Act 1996 (NSW), s 57. Bell Nettle So much may be accepted. But none of that does anything to lessen the force of the considerations already identified that point in favour of the conclusion that the only incapacity with which s 10(1A)(b)(ii) is concerned is incapacity from a specified infirmity of body or mind caused by a member being hurt on duty when a member of the police force. Granted, once a member has been certified under s 10B as incapable of exercising the functions of a police officer, an annual superannuation allowance becomes payable and any application thereafter for a variation of amount will entail a separate consideration. But it remains that what is to be considered is the effect on the member of the infirmity which rendered the member incapable of exercising the functions of a police officer. Conclusion and orders In the result, it should be held that, upon the proper construction of s 10(1A)(b) of the Act, the expression "member's incapacity for work outside the police force" means the member's incapacity from a specified infirmity of body or mind determined pursuant to s 10B or on appeal to have been caused by the member being hurt on duty when he or she was a member of the police force. The appeal should be allowed. Orders 1 and 2 of the Court of Appeal of the Supreme Court of New South Wales made on 4 May 2017 should be set aside and in their place it should be ordered that the appeal to the Court of Appeal be dismissed. The appellant is to pay the respondent's costs of the appeal to this Court. GAGELER J. Statutory construction is the process by which meaning is attributed to statutory text26. In a doubtful case, it involves constructional choice27. The statutory text must be considered from the outset in context28 and attribution of meaning to the text in context must be guided so far as possible by statutory purpose29 on the understanding that a legislature ordinarily intends to pursue its purposes by coherent means30. Counsel for Mr Miles emphasised that s 10(1A)(b)(ii) of the Police Regulation (Superannuation) Act 1906 (NSW) ("the Act") is other than the product of industrial compromise. However, neither he nor counsel for the SAS Trustee Corporation ("STC") suggested that the industrial character of the sub-paragraph warrants departure from any of those principles of statutory construction. the naivety of thinking Construction of s 10(1A)(b)(ii) is informed by the context of that sub-paragraph within the second of two mutually exclusive streams of superannuation allowance for which the Act provides. Within that context, it is further informed by the extent to which textually available alternative constructions of the sub-paragraph contribute to the achievement by coherent means of the evident purpose for which that second stream of superannuation allowance is provided. The first stream of superannuation allowance, for which provision is made in s 7(1), applies where a member either retires or is discharged after being certified by STC under s 8(1) to be "incapable, from infirmity of body or mind, of personally exercising the functions of a police officer" referred to in s 14(1) of the Police Act 1990 (NSW). The annual allowance applicable under s 7(1) is calculated as a percentage of the member's attributed salary at the time of retirement or discharge irrespective of the extent (if any) of the member's incapacity for work outside the police force. The percentage varies solely by 26 Thiess v Collector of Customs (2014) 250 CLR 664 at 671 [22]; [2014] HCA 12. 27 SZTAL v Minister for Immigration and Border Protection (2017) 91 ALJR 936 at 944 [38]; 347 ALR 405 at 415; [2017] HCA 34. 28 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; [1997] HCA 2. 29 Thiess v Collector of Customs (2014) 250 CLR 664 at 672 [23]; SZTAL v Minister for Immigration and Border Protection (2017) 91 ALJR 936 at 940-941 [14], 944- 945 [39]-[41], [43]; 347 ALR 405 at 410, 415, 416. 30 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 [70]-[71]; [1998] HCA 28. reference to the member's length of service and is capped at 72.75 per cent for a member who has served 30 or more years. The allowance is payable irrespective of the extent (if any) to which the member might have an incapacity for work outside the police force and, in the case of a member discharged after being certified to be incapable of personally exercising the functions of a police officer, continues even though the member might subsequently make a full recovery. The second stream of superannuation allowance, for which provision is made in s 10(1A), applies only where a member or former member falls within the definition of a "disabled member of the police force" in s 10(1). Meeting that definition is the gateway through which a member or former member of the police force must pass in order to become entitled to superannuation allowance within that second stream. The gateway, however, is not unrelated to the path to which it leads. Importantly, the definition explains the purpose for which an entitlement to the second stream of superannuation allowance is bestowed on a member who passes through the gateway. More importantly for present purposes, the definition explains the content of and the relationship between the components of that allowance. For a member or former member to fall within the definition, two preconditions must be met. The first precondition is met, in the case of a member, if the member is discharged after being certified, by STC under s 10B(1), "to be incapable, from a specified infirmity of body or mind, of personally exercising the functions of a police officer" referred to in s 14(1) of the Police Act or, in the case of a former member, if the former member has been certified by STC under s 10B(2) to be "incapable, from an infirmity of body or mind, of personally exercising the functions of a police officer" referred to in s 14(1) of the Police Act. The second precondition, applicable equally to a member or former member, is that the same infirmity that has been the subject of certification by STC under s 10B(1) or s 10B(2), as the case may be, has been determined by the Commissioner of Police under s 10B(3), or by the District Court on appeal under s 21(4), to have been caused by the member or former member having been "hurt on duty" when a member of the police force. The expression "hurt on duty" is defined in s 1(2) of the Act to mean injured in circumstances which, if the member were a worker, would entitle the member to compensation under the Workers Compensation Act 1987 (NSW). A worker is entitled to compensation under that Act if the worker has received a personal injury arising out of or in the course of employment31. 31 Workers Compensation Act 1987 (NSW), s 9 when read with s 4 (definition of "injury"). The second stream of superannuation allowance is accordingly only available to a member or former member who has an infirmity of body or mind which has been determined by the Commissioner of Police under s 10B(3), or by the District Court on appeal under s 21(4), to have arisen out of or in the course of his or her employment as a police officer. Within the second stream of superannuation allowance, s 10(1A)(a) operates to provide a disabled member of the police force with an entitlement to a base level annual allowance of 72.75 per cent of the member's attributed salary at the time of retirement or discharge – equivalent to the highest level of allowance available under the first stream. The entitlement of a disabled member to that base level annual allowance exists irrespective of the extent (if any) to which the disabled member might be incapacitated for work outside the police force and continues even though the disabled member might make a full recovery after discharge or retirement. To that base level annual allowance an additional amount is then to be added under s 10(1A)(b) or (c) if and to the extent that the disabled member of the police force is incapacitated for work outside the police force. For a disabled member or former member who is "totally incapacitated for work outside the police force" and who, "in the opinion of STC, ... was hurt on duty because the member was required to be exposed to risks to which members of the general workforce would normally not be required to be exposed in the course of their employment", s 10(1A)(c)(i) provides for an additional amount which can take the annual allowance to a level between 85 per cent and 100 per cent of the member's attributed salary at the time of retirement or discharge. The precise additional amount is required by s 10(1A)(c)(ii) to be "commensurate, in the opinion of STC, with the risks to which the member was so required to be exposed". For a disabled member or former member to whom s 10(1A)(c) does not apply, s 10(1A)(b)(i) provides for an additional amount which can take the annual allowance to a level up to 85 per cent of the member's attributed salary at the time of retirement or discharge. The precise additional amount is required by s 10(1A)(b)(ii) to be "commensurate, in the opinion of STC, with the member's incapacity for work outside the police force". Section 10(1D) makes provision for STC to determine at any time an additional amount under s 10(1A)(b) or (c) and to vary at any time any such determination. This elaborate structure has a coherent operation if, but only if: (1) the incapacity for work outside the police force which is captured by each of s 10(1A)(b)(ii) and s 10(1A)(c) is the same incapacity; and (2) the incapacity is an incapacity attributable to the same specified infirmity of body or mind that has been determined by the Commissioner of Police under s 10B(3), or by the District Court on appeal under s 21(4), to have been caused by the member being hurt on duty. When the incapacity for work outside the police force which is captured by each of s 10(1A)(b)(ii) and s 10(1A)(c) is so construed, the structure of the additional amount provided for by s 10(1A)(b) and (c) is internally coherent. The focus throughout is on the specified infirmity of body or mind that has been determined by the Commissioner of Police under s 10B(3), or by the District Court on appeal under s 21(4), to have been caused by the disabled member being hurt on duty. The inquiry throughout is as to the extent to which, in the opinion of STC, that specified infirmity has rendered the disabled member incapacitated for work outside the police force. The additional amount which can take the annual allowance to a level up to 85 per cent of the disabled member's attributed salary becomes available by reference to STC's opinion under s 10(1A)(b) as to the extent to which the specified infirmity has resulted in the disabled member being incapacitated for work outside the police force – 85 per cent being commensurate with STC forming the opinion that the specified infirmity has resulted in the disabled member being totally incapacitated for work outside the police force. The greater additional amount which can take the annual allowance to a level between 85 per cent and 100 per cent of the disabled member's attributed salary becomes available under s 10(1A)(c) where STC forms the opinion that a disabled member who is totally incapacitated for work outside the police force suffered the specified infirmity by reason of being required to be exposed to risks to which members of the general workforce would normally not be required to be exposed in the course of their employment. The alternative construction of s 10(1A)(b)(ii), of which the majority in the Court of Appeal was persuaded, is that the sub-paragraph refers to incapacity for work outside the police force irrespective of the source of that incapacity. Although that construction is textually available, it results in a distortion of the complementary operation of s 10(1A)(b) and (c) in setting an additional amount which the disabled member is entitled to be paid. The relationship between s 10(1A)(b) and (c) appears not to have been the subject of detailed submissions before the Court of Appeal. Taking that relationship into account, the conclusion of Schmidt J must be preferred to that of the majority. The appeal must therefore be allowed. I agree with the orders proposed by Kiefel CJ, Bell and Nettle JJ. Edelman EDELMAN J. Section 10(1A) of the Police Regulation (Superannuation) Act 1906 (NSW), when read with the definitions that precede it32, relevantly provides for "the annual superannuation allowance for a [member of the police force who is discharged after being certified ... to be incapable, from a specified infirmity of body or mind, of personally exercising the functions of a police officer ... that infirmity being determined ... to have been caused by the member being hurt on duty]" (emphasis added). The annual superannuation allowance has two components. First, s 10(1A)(a) provides that the allowance contains a base amount of 72.75 per cent of the member's attributed salary of office. Secondly, s 10(1A)(b) provides, subject to an exception that does not apply in this case, for an "additional amount" that is not more than a further 12.25 per cent of the member's attributed salary of office and which is "commensurate, in the opinion of [the SAS Trustee Corporation], with the member's incapacity for work outside the police force". This appeal concerns the preconditions for an award of this additional amount. The essential issue on this appeal is the interpretation of the words of s 10(1A). The appellant submitted that a precondition for the award of the additional amount of the annual superannuation allowance, like the precondition for the base amount, is that the member's incapacity for work arises from the specified infirmity "caused by the member being hurt on duty". The respondent, following the approach of the majority of the Court of Appeal of the Supreme Court of New South Wales, submitted that the additional amount of the annual superannuation allowance includes an amount for incapacity for work outside the police force whether or not that incapacity (i) arises from the specified infirmity or (ii) was caused by the member being hurt on duty. There is a textual difficulty with the respondent's interpretation, although this difficulty was not a matter that was raised before the Court of Appeal. In the Court of Appeal, the parties' focus upon context and purpose led the Court to divide as to the meaning of s 10(1A). However, the textual difficulty for the respondent's interpretation, identified during oral submissions in this Court, can be seen when s 10(1A) is read with the definitions included as set out above. The difficulty is that the annual superannuation allowance, which includes the base amount and the additional amount, is "for" both a person and a purpose. The person must be a member of the police force. The purpose must be to provide for a member having a certified incapacity, arising from a specified infirmity 32 Allianz Australia Insurance Ltd v GSF Australia Pty Ltd (2005) 221 CLR 568 at 574-575 [12]; [2005] HCA 26; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 44 [40], 46 [45]; [2009] HCA 41. Edelman preventing the personal exercise of the functions of a police officer, where that infirmity was "caused by the member being hurt on duty". The text of s 10(1A), thus understood, naturally requires that the amount of the annual superannuation allowance be confined to its purpose, which includes the causal requirement that the allowance be awarded for the particular consequence of being hurt on duty. The concept of a member of the police force being "hurt on duty" is defined in s 1(2) as being "injured in such circumstances as would, if the member were a worker within the meaning of the Workers Compensation Act 1987, entitle the member to compensation under that Act". Section 9 of the Workers Compensation Act 1987 (NSW) entitles a worker to compensation for an "injury", which is defined in s 4 as "personal injury arising out of or in the course of employment". The task of statutory construction involves the legal application of the meaning of statutory words, as interpreted, to the facts of a case. In Federal Commissioner of Taxation v Consolidated Media Holdings Ltd33, this Court said that the task of statutory construction must begin and end with the text of the statute. That statement does not mean that the text of a statute must be interpreted only according to the range of semantic meanings of the individual words. It means only that the interpretation of a statute, like any other legal instrument, is an interpretation of its words. Those words are interpreted in their context and in light of their purpose although legal rules can sometimes exclude or restrict the use of some context. In ascertaining the reasonably intended meaning of Parliament context is, literally, those matters to be considered (simultaneously) together with the text. Context can give words an interpretation that is the opposite of their ordinary meaning and grammatical sense34. Context can also permit a construction of words that excludes their application to matters that would have fallen within the application of their literal meaning35. However, as with contractual interpretation, where "the clearer the natural meaning the more difficult it is to justify departing from it"36, so too in statutory interpretation 33 (2012) 250 CLR 503 at 519 [39]; [2012] HCA 55. 34 See, eg, Associated Newspapers Ltd v Wavish (1956) 96 CLR 526 at 528; [1956] HCA 69; Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850 at 880; Director of Public Prosecutions (Nauru) v Fowler (1984) 154 CLR 627 at 630; [1984] HCA 48; Burragubba v Queensland (2015) 236 FCR 160 at 164 35 Blackstone, Commentaries on the Laws of England (1765), Introduction, §2 at 60; Ex parte Walsh and Johnson; In re Yates (1925) 37 CLR 36 at 91, 93; [1925] HCA 36 Arnold v Britton [2015] AC 1619 at 1628 [18]. Edelman "questions of degree arise" and it will be more difficult to displace an interpretation that "has a powerful advantage in ordinary meaning and grammatical sense"37. The reasons of Kiefel CJ, Bell and Nettle JJ demonstrate that the context and purpose of s 10(1A) of the Police Regulation (Superannuation) Act supports the interpretation that an additional amount of the annual superannuation allowance under s 10(1A)(b) is only available if the member's incapacity for work outside the police force is from the specified infirmity of body or mind determined to have been "caused by the member being hurt on duty" when he or she was a member of the police force. That context and purpose aligns with, and reinforces, the natural and ordinary meaning of the words of s 10(1A) when read together with its defined terms. The appeal should be allowed. I agree with the orders proposed by Kiefel CJ, Bell and Nettle JJ. 37 Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 321; [1981] HCA 26; Hepples v Federal Commissioner of Taxation (1992) 173 CLR 492 at 535-536; [1992] HCA 3; Telstra Corporation Ltd v Australasian Performing Right Association Ltd (1997) 191 CLR 140 at 186; [1997] HCA 41.

HIGH COURT OF AUSTRALIA APPELLANT AND RESPONDENT Ridd v James Cook University [2021] HCA 32 Date of Hearing: 23 June 2021 Date of Judgment: 13 October 2021 ORDER Appeal dismissed. On appeal from the Federal Court of Australia Representation S J Wood QC with B W Jellis and C Mintz for the appellant (instructed by Mahoneys) B W Walker SC with Y Shariff SC and V Bulut for the respondent (instructed by Clayton Utz) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Ridd v James Cook University Industrial law (Cth) – Industrial agreement – Interpretation of Enterprise Agreement – Where Enterprise Agreement and Code of Conduct each applied to all employees of respondent – Where intellectual freedom protected by Enterprise Agreement – Where Enterprise Agreement imposed confidentiality requirements concerning disciplinary processes – Where disciplinary action taken and employment terminated for misconduct and serious misconduct including for breaches of Code of Conduct – Whether disciplinary action taken for breaches of Code of Conduct contravened Enterprise Agreement – Whether exercise of intellectual freedom subject to constraints in Code of Conduct – Whether exercise of intellectual freedom subject to confidentiality obligations in Enterprise Agreement. Words and phrases – "academic freedom", "censure", "Code of Conduct", "confidentiality", "critical and open debate and inquiry", "disciplinary processes", "Enterprise Agreement", "freedom of expression", "intellectual freedom", "lawful and reasonable direction", "obligations of confidentiality", "responsibility to respect the rights of others", "right to express unpopular or controversial views", "termination", "tone or manner of expression", "treat fellow staff members, students and members of the public with honesty, respect and courtesy". Fair Work Act 2009 (Cth), s 50. KIEFEL CJ, GAGELER, KEANE, GORDON AND EDELMAN JJ. Introduction Dr Ridd was employed by James Cook University ("JCU") for 27 years. For 15 years he managed the University's Marine Geophysics Laboratory. From 2009 until 2016 he was the head of physics at JCU. He had been ranked by ResearchGate within the top 5% of researchers globally. In 2015, Dr Ridd sent a lengthy email to a journalist, which concerned issues and ideas relating to his field of expertise. There was no suggestion that the remarks in his email were anything other than honestly held opinions. Nothing said in his email has ever been suggested to be unlawful or defamatory. It was not suggested that the remarks were wrong, or even unreasonable. But JCU concluded that these remarks had breached the JCU Code of Conduct for the failure by Dr Ridd to treat those who held different views with respect and courtesy. From 2016, JCU took various actions against Dr Ridd based upon this and subsequent conduct by Dr Ridd: 17 findings were made by JCU that Dr Ridd had breached the JCU Code of Conduct; Dr Ridd was issued with two directions about impermissible speech, five directions about confidentiality, and a direction not to subject JCU to satire or parody; Dr Ridd was issued with two censures ("the 2016 Censure" and "the Final Censure"); and, on 2 May 2018, Dr Ridd's employment was terminated for serious misconduct under JCU's (now superseded) enterprise agreement ("the Enterprise Agreement"). The basis for the first of these censures, and part of the basis for the second, was a finding that Dr Ridd had contravened the Code of Conduct by failing to treat others "with respect and courtesy" in his public discussion of his research. But by the time that the termination decision was made by the Vice-Chancellor, that decision focused upon conduct by Dr Ridd that did not concern any matter within his academic expertise. Dr Ridd commenced these proceedings claiming that each and every action taken by JCU was a contravention of s 50 of the Fair Work Act 2009 (Cth), which provides that a person must not contravene a term of an enterprise agreement. Dr Ridd submitted that the application of the intellectual freedom protected by cl 14 of the Enterprise Agreement: (i) precluded any finding that he had breached the Code of Conduct; (ii) invalidated every direction and censure issued to him by JCU; and (iii) meant that his termination was unlawful. In the Federal Circuit Court of Australia, the primary judge (Judge Vasta) accepted Dr Ridd's submissions and concluded that 13 actions taken by JCU were contrary to the Enterprise Agreement. The primary judge made a declaration of 13 contraventions of s 50 of the Fair Work Act and ordered that JCU pay to Dr Ridd compensation of $1,094,214.47 and pecuniary penalties of $125,000. On appeal to the Full Court of the Federal Court of Australia, a majority of the Court (Griffiths and S C Derrington JJ; Rangiah J dissenting) accepted none of Dr Ridd's submissions, concluding that none of JCU's actions was contrary to the Enterprise Agreement. If it had been necessary to determine, the majority would also have concluded that the primary judge had erred in overcalculating compensation and that pecuniary penalties would have been reduced to $15,000. Neither of these matters was in dispute in this Court. For the reasons below, neither the position of the primary judge nor the position of the majority of the Full Court can be entirely accepted. The legal position, in the circumstances of this case, is as follows. First, the intellectual freedom protected by cl 14 of the Enterprise Agreement is not a general freedom of speech: an expression of opinion about issues or ideas must be related to a field of competence and an expression of disagreement with JCU decisions or decision-making processes must be in accordance with applicable processes, giving reasonable opportunity for those processes to be followed. Secondly, the best interpretation of cl 14 is that it preserves intellectual freedom subject to some constraints contained in the Code of Conduct but, contrary to the conclusion of the majority of the Full Court, only those constraints that are adopted within cl 14 itself. Thirdly, the constraints contained in cl 14 do not require that the exercise of intellectual freedom be expressed respectfully or courteously but they do require that an expression of disagreement with JCU decisions follow the applicable processes, which includes adhering to obligations of confidentiality. The first three paragraphs of the declaration made by the primary judge, concerning Dr Ridd's censure for his 2015 email, were correct1. But, as the decisions of the primary judge and the Full Court illustrate, and as senior counsel for Dr Ridd frankly accepted in his oral reply, the cases for both of the parties were conducted on an all-or-nothing basis. From Dr Ridd's perspective, this forensic 1 Ridd v James Cook University (2019) 286 IR 389, and Ridd v James Cook University [No 2] [2019] FCCA 2489 where the primary judge declared that JCU contravened s 50 of the Fair Work Act 2009 (Cth) by doing each of the following in contravention of cl 14 of the Enterprise Agreement: (a) making the findings the subject of the formal censure dated 29 April 2016 against Dr Ridd ("the 2016 Censure"); (b) issuing the 2016 Censure to Dr Ridd; and (c) in the 2016 Censure, directing Dr Ridd that "[i]n future it is expected that in maintaining your right to make public comment in a professional, expert or individual capacity in an academic field in which you are recognised, it must be in a collegial manner that upholds the University and individual respect". choice reflected the reality that, unless he was able to show that all, or almost all, of the actions by JCU were contraventions of cl 14, then the termination of his employment would have been justified and would have occurred in any event, leaving him with little benefit had he sought to uphold only a few of the instances of declared contraventions. Given the manner in which his case was run, Dr Ridd did not make any submissions challenging the cogent conclusions of the majority of the Full Court that some of his conduct after the 2015 email, as to which the majority gave nine examples, could not be "characterised as an exercise of intellectual freedom in the sense described in cl 14, being no more than expressions of personal opinion and frustration (unrelated to issues or ideas related to his respective field of competence)"2. Nor did Dr Ridd make any submissions about how any of his actions that were the subject of numerous findings of serious misconduct relied upon by the Deputy Vice-Chancellor and the Vice-Chancellor as justifying termination were within the intellectual freedom. In light of the manner in which Dr Ridd ran his appeal, and the constraints upon the intellectual freedom protected by cl 14, his appeal must be dismissed. The issues and the decisions below The actions of Dr Ridd that formed the basis for JCU's findings, directions, and censures, and ultimately its termination of Dr Ridd's employment, are considered in detail later in these reasons. Those actions can be broadly divided into four categories. First, there were comments relating to matters in the area of Dr Ridd's area of academic competence which criticised JCU or various institutions or unnamed "scientists" or particular people. Secondly, there were comments, which were not related to matters in the area of Dr Ridd's academic competence, that were critical of either particular institutions or particular people. Thirdly, there were comments which were critical of decisions or decision-making processes of JCU but which did not follow applicable processes for raising those concerns. Fourthly, there were comments made or information disclosed by Dr Ridd that was said by JCU to concern confidential matters. Dr Ridd did not seek to distinguish between these categories. On his all-or-nothing submission, the intellectual freedom protected by cl 14 of the Enterprise Agreement covered all of the above categories. Dr Ridd did not dispute that each and every instance of his alleged actions had occurred. One curiosity about the manner in which his case has been presented James Cook University v Ridd (2020) 278 FCR 566 at 595 [135]. at first instance and on both appeals is that he also did not dispute that each and every instance of his actions was properly characterised by JCU as misconduct or as serious misconduct. It may be, for example, that some of the information revealed by Dr Ridd, and said to be confidential, was in the public domain and thus its disclosure by Dr Ridd could not have amounted to misconduct, still less serious misconduct. Nor was any issue raised about whether conduct of Dr Ridd was serious misconduct on the basis that, as the majority of the Full Court concluded, some instances "were undoubtedly trivial"3. The Full Court considered this stance of Dr Ridd to be "inexplicable"4. But Dr Ridd chose not to contest any of the findings of serious misconduct other than on the basis that he was protected by cl 14. The same stance was taken in this Court. It suffices to proceed on the same assumption, that each instance of alleged conduct by Dr Ridd would be misconduct or serious misconduct subject to Dr Ridd's submissions about the operation of cll 14 and 54.1.5 of the Enterprise Agreement. At all stages of these proceedings, Dr Ridd's submission was that all of his actions were exercises of the intellectual freedom provided by cl 14 of the Enterprise Agreement and hence they could not be a serious breach of the Code of Conduct, nor could they have been subject to a valid contrary direction by JCU. This submission was accepted by the primary judge. By contrast, JCU's submission was that the intellectual freedom in cl 14 did not constrain the Code of Conduct from operating on any member of JCU staff. JCU's position, held at all stages of these proceedings, was most clearly stated in this Court: "[i]t is evident that through the Code of Conduct, the University abided by its commitment to protect and promote intellectual freedom". This submission was accepted by the majority of the Full Court, who concluded that none of JCU's actions was contrary to the Enterprise Agreement. In dissent in the Full Court, Rangiah J held that "where there is conflict between a genuine exercise of intellectual freedom and a requirement of the Code of Conduct, the former prevails to the extent of the inconsistency"5. His Honour would have remitted the matter to the primary judge for further factual findings. James Cook University v Ridd (2020) 278 FCR 566 at 574 [23]. James Cook University v Ridd (2020) 278 FCR 566 at 573 [23], 609 [204]. James Cook University v Ridd (2020) 278 FCR 566 at 625-626 [289]. The Enterprise Agreement In 2013, JCU entered into the Enterprise Agreement under Pt 2-4 of the Fair Work Act with five staff unions. The Fair Work Act gave statutory force to the terms of the Enterprise Agreement and applied those terms (as varied from time to time) to JCU and all of its employees6. Although the Enterprise Agreement is now superseded, at the time of the events that are the subject of these proceedings it applied to JCU and to Dr Ridd, as a member of staff7. Clauses 54.3 to 54.6 of the Enterprise Agreement were concerned with the disciplinary procedure in cases of "Serious Misconduct", culminating in a "Final Determination" by the Vice-Chancellor of any penalty to be imposed under cl 54.5. The definitions clause of the Enterprise Agreement, cl 8, defined "Serious Misconduct" as having three alternative limbs: (i) "serious misconduct" as defined by the Fair Work Regulations 2009 (Cth); (ii) "[a]ny serious breach of the James Cook University Code of Conduct"; and (iii) "Official Misconduct" as defined by the Crime and Misconduct Act 2001 (Qld). It defined "Misconduct" as "conduct which is not Serious Misconduct but is nonetheless conduct which is improper or inconsistent with the staff member's duties or responsibilities". The definition also provided that "Misconduct may give rise to disciplinary action, but will not result in termination of the employment of the staff member". Clauses 13 and 14, which are central to the findings against Dr Ridd of serious misconduct, and central to the issues on this appeal, provided as follows: "13. CODE OF CONDUCT The parties to this Agreement support the Code of Conduct as it establishes the standard by which staff and volunteers conduct themselves towards others and perform their professional duties on behalf of JCU. 13.1. The parties agree that the Code of Conduct will only be changed following consultation with the [Joint Consultative Committee]. See Toyota Motor Corporation Australia Ltd v Marmara (2014) 222 FCR 152 at 7 Fair Work Act, s 52; Enterprise Agreement, cl 4.1. 13.2. JCU is committed to achieving and maintaining the highest standards of ethical conduct and through the Code of Conduct will ensure that staff: Seek excellence as a part of a learning community; Act with integrity; Behave with respect for others; and Embrace sustainability and social responsibility. 13.3. The parties note that the Code of Conduct is not intended to detract from Clause 14, Intellectual Freedom. 14. INTELLECTUAL FREEDOM 14.1. JCU is committed to act in a manner consistent with the protection and promotion of intellectual freedom within the University and in accordance with JCU's Code of Conduct. 14.2. Intellectual freedom includes the rights of staff to: Pursue critical and open inquiry; Participate in public debate and express opinions about issues and ideas related to their respective fields of competence; Express opinions about the operations of JCU and higher education policy more generally; Be eligible to participate in established decision making structures and processes within JCU, subject to established selection procedures and criteria; in professional and Participate including unions and other representative bodies. representative bodies, 14.3. All staff have the right to express unpopular or controversial views. However, this comes with a responsibility to respect the rights of others and they do not have the right to harass, vilify, bully or intimidate those who disagree with their views. These rights are linked to the responsibilities of staff to support JCU as a place of independent learning and thought where ideas may be put forward and opinion expressed freely. 14.4. JCU acknowledges the rights of staff to express disagreement with University decisions and with the processes used to make those decisions. Staff should seek to raise their concerns through applicable processes and give reasonable opportunity for such processes to be followed. 14.5. Staff, as leaders and role models to students and the wider community, must adhere to the highest standards of propriety and truthfulness in scholarship, research and professional practice. 14.6. Staff members commenting publicly in a professional or expert capacity may identify themselves using their University appointment or qualifications, but must not represent their opinions as those of JCU. The University expects that staff will maintain professional standards when they intentionally associate themselves with its name in public statements and/or forums. 14.7. Staff who contribute to public debate as individuals and not in a professional or expert capacity, must not intentionally identify themselves in association with their University appointment." The Code of Conduct The Public Sector Ethics Act 1994 (Qld)8 provides for codes of conduct to express standards of conduct for, relevantly, public sector entities. JCU is a public sector entity for the purposes of that Act9. The Code of Conduct adopted by JCU applied to all staff of JCU "while acting in their official capacity (including senior management, executive, visiting and adjunct staff)"10. 8 Public Sector Ethics Act 1994 (Qld), s 10. 9 By Public Sector Ethics Act, Schedule, Dictionary, definition (c) of "public sector entity", and James Cook University Act 1997 (Qld). 10 See Code of Conduct, Scope, read with Explanatory Statement to the Code of Conduct. JCU developed the Code of Conduct around four ethical principles, albeit principles which were not the same as the four principles described as fundamental to good public administration in the Public Sector Ethics Act11: (1) seek excellence as part of a learning community; (2) act with integrity; (3) behave with respect for others; and (4) embrace sustainability and social responsibility. Within those four principles were numerous overlapping undertakings, signalled by the language of "we will" in the chapeau to the list of undertakings, including to: value academic freedom, and enquire, examine, criticise and challenge in the collegial and academic spirit of the search for knowledge, understanding and truth; behave with intellectual honesty; have the right to freedom of expression, provided that our speech is lawful and respects the rights of others; maintain appropriate confidentiality regarding University business; behave in a way that upholds the integrity and good reputation of the University; take responsibility for our mistakes, work to rectify problems as soon as possible, and ensure that those who have admitted mistakes are treated with fairness and dignity; comply with any lawful and reasonable direction given by someone who has authority to give that direction; make well-considered decisions, and provide reasons for these decisions where required, especially where they may have an adverse effect on people; act within the limits of our authority; disclose wrongdoing and protect those who make a disclosure; 11 Public Sector Ethics Act, s 4: integrity and impartiality; promoting the public good; commitment to the system of government; accountability and transparency. treat fellow staff members, students and members of the public with honesty, respect and courtesy, and have regard for the dignity and needs of others; avoid and not accept behaviours which are unwelcome, discriminatory, intimidatory or abusive; refrain from, and not accept vilification, bullying, harassment or sexual harassment; and stand up for the rights of others. The Explanatory Statement to the Code of Conduct provided further detail about many of the listed undertakings. In explaining the undertaking about "respect and courtesy", the Explanatory Statement provided that "[e]very individual has the right to be treated in a respectful and polite manner". And, in relation to "freedom of expression", the Explanatory Statement provided: "All staff, regardless of involvement in academic duties, have the right to freedom of expression. However, this comes with a responsibility to respect the rights and reputations of others. Academic or constructive criticism is encouraged, but staff must not engage in hate speech as this conflicts directly with the universal value of respect for individuals." Interpretation of cl 14 of the Enterprise Agreement To the extent of any inconsistency, the Enterprise Agreement prevails over a law of a State or Territory12, which includes the provisions of the Public Sector Ethics Act applying the Code of Conduct. But neither party asserted any such inconsistency at any stage in these proceedings. Both parties sought to resolve any tension between the Enterprise Agreement and the Code of Conduct by interpretation of the Enterprise Agreement itself, particularly cl 14. In that process of interpretation, an important matter of context is the industrial nature of the instrument. Industrial instruments are not always drafted carefully by lawyers or professional drafters, and hence the literal words of a provision might more readily 12 Fair Work Act, s 29. be understood to have a meaning other than their ordinary meaning if the context Two issues of interpretation arose on this appeal. The first issue was the manner in which the Enterprise Agreement resolved conflicts between, on the one hand, the intellectual freedom of JCU staff members to debate, to criticise, and to express unpopular and controversial views protected by cl 14 and, on the other hand, the undertakings in the Code of Conduct, not replicated in cl 14, concerning treatment of others with respect and courtesy. The second issue was the manner in which the Enterprise Agreement resolved conflicts between, on the one hand, the intellectual freedom provided by cl 14 to express disagreement with decisions of JCU and to express disagreement with the processes used to make those decisions and, on the other hand, the confidentiality requirements concerning University disciplinary processes imposed by cl 54.1.5. (1) Clause 14 and the Code of Conduct undertakings of respect and courtesy On this appeal, the primary submission of senior counsel for Dr Ridd was that the only restrictions upon the intellectual freedom in cl 14 were the express limits in cl 14.3 not to harass, vilify, bully, or intimidate those who disagree, and the requirement of honesty in cl 14.5. As the majority of the Full Court observed, there was no suggestion in these proceedings that Dr Ridd had acted in a manner contrary to these restrictions14. Nor was there any suggestion that any of Dr Ridd's conduct was unlawful in any way, which includes the lack of any suggestion that Dr Ridd had committed any tort, such as defamation. Although Dr Ridd's primary submission was accepted by the primary judge15, it was rightly rejected by all members of the Full Court16. The problem with his submission is that it treats the intellectual freedom as though it were a 13 See City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 at 440 [57]. 14 James Cook University v Ridd (2020) 278 FCR 566 at 595 [133]. 15 Ridd v James Cook University (2019) 286 IR 389 at 407 [80], 431 [253]-[255], 432 16 James Cook University v Ridd (2020) 278 FCR 566 at 582 [72], 611-612 freedom of speech generally, and it ignores the constraint upon intellectual freedom in cl 14.3, which repeats an undertaking in the Code of Conduct, expressly requiring respect for the rights of others and implicitly requiring lawfulness. For instance, although defamatory speech or, for a more extreme example, hate speech17 is unlawful, Dr Ridd's primary submission would prevent such speech being the basis for any finding of serious misconduct under the second limb of that definition unless it were to harass, vilify, bully, or intimidate those holding a different view. It is hard to see why it could reasonably have been intended that the words of cl 14.3 should be read so narrowly to exclude unlawful conduct that does not respect the rights of others from the second limb of the definition of serious misconduct when conduct that was fraudulent or a criminal offence would fall, respectively, within the first and third limbs of the definition of serious misconduct in cl 8 of the Enterprise Agreement18. Dr Ridd's alternative submission was that the only restrictions upon the intellectual freedom protected by cl 14 were those contained in that clause itself, although recognising the restrictions of legality expressly or impliedly contained in cl 14. By contrast, JCU's submission was that the cl 14 intellectual freedom existed alongside the Code of Conduct but that cl 14 was not a substantive constraint upon any undertaking in the Code of Conduct. The effect of this submission is that cl 14 serves no substantive purpose. It would merely be a statement of that which already exists: a liberty to communicate particular intellectual content provided that the communication is consistent with the Code of Conduct. If JCU's submission were accepted, cl 14 would, at most, only have a limited purpose of being a factor to consider in the application of the Code of Conduct so that open-ended concepts like "respect" or "courtesy" might be applied by taking into account norms of intellectual freedom. Dr Ridd's alternative submission should be preferred for four reasons: (i) the terms of cl 14 reflect a textual choice to pick up, in identical or nearly identical terms, only those undertakings from the Code of Conduct to which the intellectual freedom was intended to be subject; (ii) it is the ordinary meaning of the provisions of the Enterprise Agreement that deal with both the cl 14 intellectual 17 See Anti-Discrimination Act 1991 (Qld), s 131A; Criminal Code (Cth), ss 80.2A, 18 See Fair Work Regulations 2009 (Cth), reg 1.07 definition of "serious misconduct"; Crime and Misconduct Act 2001 (Qld), s 15 definition of "official misconduct", which is now Crime and Corruption Act 2001 (Qld), s 15 definition of "corrupt conduct", read with s 400. freedom and the Code of Conduct; (iii) the meaning of the undefined term "intellectual freedom" in cl 14 is informed by its context and purpose, which strongly militate against an interpretation that would constrain the exercise of intellectual freedom to that which is respectful and courteous; and (iv) there are practical difficulties with JCU's interpretation, including the difficulty with drawing a clear line, or even a line at all, between the content of speech and the manner in which that content is delivered. Each of these four points is addressed below. (i) Textual choices Dr Ridd's alternative submission on the interpretation of cl 14 is supported by the textual choices made in the drafting of that clause. Many of the open-ended undertakings in the Code of Conduct will not conflict with the intellectual freedom embodied in cl 14 of the Enterprise Agreement. But in instances where conflict might arise, cl 14 was drafted specifically to preserve those undertakings to which the intellectual freedom was intended to be subject. Each of the qualifications upon the intellectual freedom in cl 14 is taken in identical or very similar terms from undertakings in the Code of Conduct to which the intellectual freedom was intended to be subject. Two notable omissions in the replication of various Code of Conduct undertakings reveal the policy adopted in the textual choices that were made. The first notable omission is the duty to respect the "reputations" of others, found in the qualification upon freedom of expression in the Explanatory Statement to the Code of Conduct. The omission of the reference to "reputations" reflects a choice made in cl 14 to pick up only some of that qualification from the Code of Conduct – namely, the qualification that the "right to freedom of expression" comes with a responsibility to "respect[] the rights of others". The exercise of intellectual freedom to "express unpopular or controversial views" might damage the reputation of another. But provided that the exercise is lawful and respects the legal rights of others, the reputation of others is not protected. In other words, although cl 14 does not permit defamatory speech, the reputations of others are not protected from the exercise of intellectual freedom in relation to matters that are, for example, the subject of fair comment, qualified privilege, or truth19. The second notable omission is that whilst the "right to express unpopular or controversial views" in cl 14.3 is expressly limited by the qualifications from 19 See, for example, Defamation Act 2005 (Qld), Pt 4, Div 2. the Code of Conduct not to engage in harassment, vilification, bullying, or intimidation, it is not limited by any qualification in terms of the broad undertakings in the Code of Conduct to treat others, including staff members and members of the public, with respect and courtesy. (ii) Provisions dealing with both cl 14 and the Code of Conduct Dr Ridd's alternative submission does not merely give cl 14 substantive operation in a manner consistent with the textual choices about the Code of Conduct undertakings to which it is to be subject. It is also supported by the ordinary meaning of the provisions which expressly deal with both the intellectual freedom in cl 14 and the Code of Conduct. The first of those provisions is cl 13.3. Although expressed as a "note" of the "parties", the ordinary meaning of cl 13.3 is that cl 14 is not to be detracted from by undertakings in the Code of Conduct. It would not detract from cl 14 to give effect to undertakings that cl 14 itself recognises as qualifying the intellectual freedom. But it would detract from cl 14 to give effect to other undertakings in the Code of Conduct to qualify the intellectual freedom. The second provision which deals with the intellectual freedom protected by cl 14 and also with the Code of Conduct is cl 14.1. The ordinary meaning of that clause is that it is a description of the remainder of cl 14 as embodying JCU's commitment to act in a manner which is consistent with both (i) protecting and promoting the intellectual freedom within JCU, and (ii) the Code of Conduct. The remainder of cl 14 reflects that commitment by qualifying the intellectual freedom20, as perceived to be appropriate, by some of the undertakings from the Code of Conduct which would otherwise be inoperative to the extent that they detracted from the intellectual freedom. (iii) Core meaning and the purpose of intellectual freedom Dr Ridd's alternative submission is also reinforced by the purpose of the clause, in particular its concern with intellectual freedom. If cl 14 were to have no substantive effect then the intellectual freedom protected by cl 14 would be deprived of much, if not all, of the content that the concept has generally been understood to have, particularly in the environment of universities. 20 See [23]-[25] above. Although the expression "intellectual freedom" is not defined in cl 14, it is a concept with a long history, the core content of which has crystallised over the last century. "Intellectual freedom" is often referred to interchangeably with "academic freedom" and "intellectual academic freedom"21. Sometimes, however, intellectual freedom is said to be wider than "academic freedom", with the latter being confined to academic staff within universities or confined to those employed by a university or other institution of higher education, as opposed to anyone engaged in scholarly work22. But for present purposes nothing turns upon any distinction. On any view "intellectual freedom" includes academic freedom and both apply to Dr Ridd as an academic member of University staff. In the independent review of freedom of speech in Australian higher education providers, which was relied upon by both parties to this appeal, the Hon Mr Robert French recognised that the "essential elements and history" of academic freedom "mark it as a defining characteristic of universities and like institutions"23. Two essential elements of the developed concept of intellectual freedom are reflected in the examples described in cl 14.2. Underlying those examples, recognised by some as the essential elements of the concept of intellectual freedom24, are two notions: (i) critical and open debate and inquiry including in public fora, namely the "spirit of free inquiry"25; and (ii) participation and 21 See Lamont, Freedom is as Freedom Does: Civil Liberties Today (1956) at 237-240; Polishook, "Academic Freedom and Academic Contexts" (1994) 15 Pace Law Review 141 at 142, 143 fn 12; Baldwin, "The Academies, 'Hate Speech' and the Concept of Academic Intellectual Freedom" (1995) 7 University of Florida Journal of Law and Public Policy 41. 22 See Barendt, Academic Freedom and the Law: A Comparative Study (2010) at 35. 23 French, Report of the Independent Review of Freedom of Speech in Australian Higher Education Providers (2019) at 114. 24 Post, "Discipline and Freedom in the Academy" (2012) 65 Arkansas Law Review 203 at 204-205; Evans and Stone, Open Minds: Academic Freedom and Freedom of Speech in Australia (2021) at 93-100. 25 Sweezy v New Hampshire (1957) 354 US 234 at 262, quoting T H Huxley's address at the opening of the Johns Hopkins University. discussion in university governance. As early as 1900, E E Brown said of the first that26: "It is a part of the mission of educational institutions to take their place and play their part in the conflicts which are necessary to the life of the peoples; and when their part assumes the form of a struggle for the right to teach the truth as they find it, the conflict itself may prove their best means of persuading men that truth is worth fighting for." One developed justification for intellectual freedom is instrumental. The instrumental justification is the search for truth in the contested marketplace of ideas, the social importance of which Frankfurter J spoke powerfully about in Sweezy v New Hampshire27. Another justification is ethical rather than instrumental. Intellectual freedom plays "an important ethical role not just in the lives of the few people it protects, but in the life of the community more generally" to ensure the primacy of individual conviction: "not to profess what one believes to be false" and "a duty to speak out for what one believes to be true"28. The developed concept of intellectual freedom, exemplified by the examples in cl 14.2, has "always been delimited" by excluding, for instance, libel or efforts to incite violence29. The intellectual freedom in cl 14 again reflects these recognised limits. For instance, the qualification in cl 14.3 recognises that "the right to express unpopular or controversial views" is subject to "a responsibility to respect the rights of others". Like the requirement in the Code of Conduct that speech is "lawful and respects the rights of others", the qualification in cl 14.3 includes the requirement that speech be lawful. Clause 14.3 also contains express qualifications upon the intellectual freedom, excluding speech that harasses, vilifies, bullies, or intimidates those who disagree with the view expressed. And 26 Brown, "Academic Freedom" (1900) 19 Educational Review 209 at 231. (1957) 354 US 234 at 261-264. 28 Dworkin, "We Need a New Interpretation of Academic Freedom" (1996) 82(3) Academe 10 at 11. 29 Polishook, "Academic Freedom and Academic Contexts" (1994) 15 Pace Law Review 141 at 148. cl 14.5 reflects the qualification of intellectual honesty, namely truthfulness in scholarship, research, and professional practice. Whilst different views might reasonably be taken about some additional restrictions upon intellectual freedom, the instrumental and ethical foundations for the developed concept of intellectual freedom are powerful reasons why it has rarely been restricted by any asserted "right" of others to respect or courtesy. It is not necessary to go as far as Said's assertion that "the whole point [of an intellectual] is to be embarrassing, contrary, even unpleasant"30 to conclude that, however desirable courtesy and respect might be, the purpose of intellectual freedom must permit of expression that departs from those civil norms. As Dworkin wrote in an essay invoking Rabelais, Voltaire, Rushdie, Galileo, Darwin, Wilde, and Mencken31: "The idea that people have that right [to protection from speech that might reasonably be thought to embarrass or lower others' esteem for them or their own self-respect] is absurd. Of course it would be good if everyone liked and respected everyone else who merited that response. But we cannot recognize a right to respect, or a right to be free from the effects of speech that makes respect less likely, without wholly subverting the central ideals of the culture of independence and denying the ethical individualism that that culture protects." (iv) Practical application Finally, JCU's submission that the Code of Conduct can operate consistently with cl 14 of the Enterprise Agreement encounters insurmountable obstacles in its practical operation. JCU's submission depends upon drawing a distinction between what is said and how it is said. But such a distinction may not exist. The content of what is said often depends upon how it is said. This is particularly so when the impugned speech concerns the expression of an opinion. The content of speech that expresses an opinion will often be inseparable from the strength of conviction with which the opinion is held, which is tied to the manner of expression. The message conveyed by a statement, expressed tentatively, "It may be that it was an error for Professor Jones to claim that the earth is flat" expresses a proposition only of possibility. It cannot be divorced from the tentative 30 Said, Representations of the Intellectual: The 1993 Reith Lectures (1994) at 10. 31 Dworkin, "We Need a New Interpretation of Academic Freedom" (1996) 82(3) Academe 10 at 14. manner in which it was expressed. By contrast, "No reasonable person could ever claim that the earth is flat" expresses a proposition of certainty, all the more so if it is expressed in an emphatic manner. For these reasons, Dr Ridd's alternative submission the better interpretation of cl 14. But, as explained above, the developed concept of intellectual freedom protected by cl 14 remains subject to important limits. These limits include requirements of confidentiality, such as the requirements in (2) The interpretation of cl 14 together with cl 54.1.5 Two of the undertakings in the Code of Conduct that Dr Ridd submitted could conflict with the intellectual freedom in cl 14 were the undertaking to "maintain appropriate confidentiality regarding University business" and, so far as it concerned confidentiality, the undertaking to "comply with any lawful and reasonable direction given by someone who has authority to give that direction". Dr Ridd submitted that these undertakings could not detract from the intellectual freedom, focusing particularly upon the example of the intellectual freedom in cl 14.2 to "[e]xpress opinions about the operations of JCU" and in cl 14.4 "to express disagreement with University decisions and with the processes used to make those decisions". The difficulty with Dr Ridd's submission is that there is no conflict between the two different subject matters of the intellectual freedom in cl 14 and the confidentiality of JCU's disciplinary processes. The intellectual freedom in cl 14.4 is qualified by a requirement which provides that, when staff express disagreement with University decisions, they "should seek to raise their concerns through applicable processes and give reasonable opportunity for such processes to be followed". The applicable process for handling allegations of misconduct or serious misconduct is set out in cl 54 of the Enterprise Agreement. As to confidentiality, cl 54.1.5 provides: "The confidentiality of all parties involved in the management of Misconduct and Serious Misconduct processes will be respected and all information gathered and recorded will remain confidential, subject to JCU's obligations: to discharge its responsibilities under an Act or University policy; for a proceeding in a court or tribunal; or unless the person to whom the confidential information relates, consents in writing to the disclosure of the information or record; or if no consent is obtainable and such disclosure is unlikely to harm the interests of the person affected; or unless the information is already in the public domain." As both the majority and minority of the Full Court observed, there are numerous difficulties with the drafting of cl 54.1.532. But only one aspect of the interpretation of cl 54.1.5 relevantly arises. Contrary to the approach of the primary judge33, but consistently with the majority of the Full Court34, the concern of cl 54.1.5 is not merely with the interests of the person subject to the disciplinary proceeding, here Dr Ridd. For instance, in para (c), the person to whom the confidential information relates might be a complainant. The University also has an interest in the maintenance of the confidentiality of its private procedures. Of course, as para (b) provides, the information would not be confidential for the purposes of a proceeding in a court or tribunal, which would include proceedings such as these under s 50 of the Fair Work Act. Nor, as para (d) provides, would the information remain confidential once it had been read or expressed in open court. At no point has Dr Ridd suggested that cl 54.1.5 did not apply to him because there had been a reasonable opportunity for JCU processes to be followed. Subject to these limitations, the confidentiality provisions serve the legitimate interests of all parties to JCU's dispute resolution processes, and of JCU itself in maintaining the integrity and efficacy of those processes. Those processes are not inconsistent with cll 13 and 14 of the Enterprise Agreement. Observance of the confidentiality provisions ensures that a member of staff with a just grievance against another member of staff is not intimidated or reduced to silent resignation by the willingness of a colleague to ignore or disrupt the dispute resolution processes of JCU. Conduct of that kind on the part of a staff member 32 James Cook University v Ridd (2020) 278 FCR 566 at 590-591 [106]-[112], 623 33 Ridd v James Cook University (2019) 286 IR 389 at 433 [269], [274], [276]. 34 James Cook University v Ridd (2020) 278 FCR 566 at 591 [115]. may, in some circumstances, be regarded as inconsistent with the maintenance of the relationship of employment under the Enterprise Agreement. In summary, contrary to Dr Ridd's submission, cl 14 cannot provide any protection against breaches of the Code of Conduct which involve disagreement with JCU decisions or JCU processes where the expression of disagreement involves a failure to respect the confidentiality of the parties involved, or the confidential information gathered, in breach of the obligation imposed by The decisions of JCU disciplining Dr Ridd Although the primary judge and the Full Court properly focused upon each of the actions of JCU that Dr Ridd alleged to have contravened the Enterprise Agreement, the focus of submissions on this appeal was at the higher level of principle concerning the matters of interpretation addressed above. When descending to the facts, Dr Ridd focused only upon the three decisions by which Dr Ridd was disciplined, namely, (i) the 2016 Censure, (ii) the Final Censure, and (iii) the termination decision. The 2016 Censure The first censure of Dr Ridd arose from an email that Dr Ridd sent to a journalist on 16 December 2015. Dr Ridd sent the email in his capacity as a Professor and head of physics at JCU and as a member of the Marine Geophysics Laboratory. Dr Ridd said to the journalist that work "we have done recently" indicates that the Great Barrier Reef Marine Park Authority ("the GBRMPA") "is grossly misusing some scientific 'data' to make the case that the Great [B]arrier Reef is greatly damaged". He attached documents showing photos of the Great Barrier Reef from around 1890 and from around 1994 which he said were "very famous" and "plastered across the internet". He then provided several pages of comment about those photographs of the Great Barrier Reef, saying that they are "actually a dramatic example of how scientific organisations are quite happy to spin a story for their own purposes, in this case to demonstrate that there is massive damage to the [Great Barrier Reef]". Towards the conclusion of his lengthy email, Dr Ridd said that "GBRMPA, and the [Australian Research Council Centre of Excellence for Coral Reef Studies ('the ARC Centre of Excellence')] should check their facts before they spin their story" and that "[m]y guess is that they will both wiggle and squirm because they actually know that these pictures are likely to be telling a misleading story – and they will smell a trap". These phrases were the basis for the first finding of misconduct against Dr Ridd and the 2016 Censure. On 29 April 2016, following a complaint by the head of the ARC Centre of Excellence and an investigation, JCU concluded that Dr Ridd had engaged in misconduct as defined in the Enterprise Agreement. JCU found that Dr Ridd had breached Principles 1 and 2 of the Code of Conduct respectively by: (i) not acting collegially, not respecting the rights of others, not upholding professional standards, and "not displaying responsibility in respecting the reputations of other colleagues"; and (ii) not "uphold[ing] the integrity and good reputation of the University". Dr Ridd was formally censured and directed that in making future public comments in his academic field he must do so "in a collegial manner that upholds the University and individuals['] respect". Nowhere in JCU's findings, and at no stage in these proceedings, did JCU deny that Dr Ridd's remarks about the GBRMPA and the ARC Centre of Excellence in his 16 December 2015 email were views that Dr Ridd honestly held. The primary judge held, in a finding that was not challenged on appeal, that Dr Ridd's honest expression of these views was an expression of opinion "about issues and ideas related to his field of competence"35. JCU did not submit that Dr Ridd's remarks were unlawful or contrary to the legal rights, including rights to reputation, of any person. The majority of the Full Court correctly reasoned that the opinions expressed by Dr Ridd in his 16 December 2015 email fell, prima facie, within the scope of cl 14.3 of the Enterprise Agreement. The majority reasoned that Dr Ridd would therefore have had a defence to any charges of misconduct or serious misconduct for the expression of his opinions. But the majority held that Dr Ridd had not been disciplined for the expression of his opinions but instead was disciplined having regard to the "correlative duty ... owed to his colleagues" under the Code of Conduct36. For the reasons explained above, the best interpretation of cl 14.3 of the Enterprise Agreement is that where the expression of opinion falls within the intellectual freedom protected by cl 14 then it cannot amount to misconduct or serious misconduct for violating the Code of Conduct. JCU's submission that Dr Ridd could violate the Code of Conduct by the tone or manner of his expression of honestly held views based on his academic 35 Ridd v James Cook University (2019) 286 IR 389 at 406 [67]. 36 James Cook University v Ridd (2020) 278 FCR 566 at 595 [133]. expertise irrespective of whether those views were expressed lawfully and consistently with the legal rights of others is not consistent with the proper interpretation of cll 13 and 14 of the Enterprise Agreement. Dr Ridd should not have been given the 2016 Censure. The Final Censure The "Final Censure" of Dr Ridd by JCU was the result of a number of comments by Dr Ridd in different fora. The first of these was made on 1 August 2017 in an interview with Mr Alan Jones and Ms Peta Credlin on the television show "Jones and Co", which was broadcast on Sky News ("the Sky Interview"). In the course of that interview, Dr Ridd affirmed remarks that he had made in a book chapter which argued that the Great Barrier Reef "[q]uietly grows and waits for the beginning of the next cycle of death and regrowth". Dr Ridd added that after the reef "crashes", the "scientists ... then do the same stories and push it all around the world again". He said that "this has been going on for close to 50 years, how many more years will it take for us to cotton-on to the fact that you can no longer trust this stuff, unfortunately". Earlier in the Sky Interview he had said that: "the basic problem is that we can no longer trust the scientific organisations like the Australian Institute of Marine Science even things like the ARC Centre of Excellence for Coral Reef Studies. A lot of this stuff is coming out, the science is coming not properly checked, tested or replicated and this is a great shame because we really need to be able to trust our scientific institutions. And the fact is, I do not think we can anymore. I think that most of the scientists who are pushing out this stuff, they genuinely believe that there are problems with the reef. I just don't think that they are very objective about the science they do. I think [they're] emotionally attached to their subject, and ... You know you can't blame them, the reef is a beautiful thing." On 21 November 2017, following a prima facie finding by JCU of serious misconduct in this interview and the exchange of considerable correspondence between Dr Ridd and JCU, the Senior Deputy Vice-Chancellor of JCU wrote to Dr Ridd setting out JCU's finding that Dr Ridd had engaged in serious misconduct by violation of the Code of Conduct in relation to this interview and other matters. Dr Ridd was disciplined with the Final Censure. One basis for the Final Censure, which relied upon the extracts above from the Sky Interview, was that Dr Ridd's intellectual freedom did not justify the "criticism of key stakeholders of the University" in a manner which was not "in the collegial and academic spirit of the search for knowledge, understanding and truth" or "respectful and courteous". Dr Ridd was also told that his conduct "had and has the capacity to damage the reputation of [the Australian Institute of Marine Science] and ARC Centre [of Excellence] and therefore the relationship of the University with these bodies and by association the reputation of the University". In the 21 November 2017 letter, the Senior Deputy Vice-Chancellor also directed Dr Ridd not to discuss or to disclose any matters relating to the disciplinary process to any person including the media or in any public forum but excluding his immediate family or solicitors. Dr Ridd was also told that it was JCU's "expectation[]" that he "will not make any comments or engage in any conduct that directly or indirectly trivialises, satirises or parodies the University taking disciplinary action against [him]". the reasoning of the Senior Deputy Vice-Chancellor For the same reasons expressed above in relation to the 2016 Censure, that part of the 21 November 2017 letter concerning the manner in which Dr Ridd had expressed his criticisms was inconsistent with the proper interpretation of cl 14.3 of the Enterprise Agreement. In the absence of any assertion that his remarks amounted to harassment, vilification, bullying, or intimidation, or that they were defamatory or not honestly held, the remarks were protected by the intellectual freedom in The Final Censure did not, however, rely exclusively upon the remarks made by Dr Ridd in the Sky Interview. Rather, it also relied upon six other findings, described in the courts below as the third to eighth findings, which together with the remarks made by Dr Ridd in the Sky Interview were found to be serious misconduct for the purposes of cl 54.3.6 of the Enterprise Agreement. Five of these six findings concerned remarks in emails sent by Dr Ridd from his JCU email account to external recipients expressing his views that he had offended "powerful organisations" and "some sensitive but powerful and ruthless egos", and that "our whole university system pretends to value free debate, but in fact it crushes it". These were not expressions of opinion within an area of Dr Ridd's academic competence. And Dr Ridd made no submissions that could have justified these remarks otherwise falling within the intellectual freedom protected by cl 14. The remaining finding of the six additional findings upon which the Final Censure rested was, however, the subject of submissions by Dr Ridd. That was the finding that he had repeatedly failed to comply with his obligations with respect to confidentiality. The failure to comply with confidentiality obligations arose despite letters from JCU to Dr Ridd on 24 and 27 August 2017 in which JCU notified Dr Ridd that it considered the Sky Interview to be a prima facie case of serious misconduct and repeatedly emphasised the confidentiality of the disciplinary process for all parties. Dr Ridd's attention was also directed by the 24 August 2017 letter to cl 54.1.5 of the Enterprise Agreement. On 28 August 2017, Dr Ridd replied to a group email, which had more than 30 group members, in which a member of the group had attached an article from The Australian newspaper that mentioned that Dr Ridd was facing disciplinary proceedings and the member had asked "Is there anything we can do to help Peter?". Dr Ridd responded, with comments that included, "Actually if anything a letter to my VC would be the most useful". One of the curiosities of the manner in which Dr Ridd's case was conducted was that he accepted that, subject to the intellectual freedom in cl 14, this comment involved serious misconduct, which must have been on the basis that the comment contravened Dr Ridd's obligations of confidentiality under the Code of Conduct. He made no submission that the exception in cl 54.1.5 was engaged because the information was "already in the public domain". Nor did he make any submission that his response suggesting that letters be sent to the Vice-Chancellor did not impair the confidentiality of any of the parties involved in the management of the disciplinary process or reveal any confidential information gathered or recorded. His sole submission – accepted by the primary judge, but rejected by the majority of the Full Court – was that confidentiality could not be infringed, and directions concerning confidentiality could not be given by JCU, if the confidential matters, or the directions, fell within the scope of the intellectual freedom. That submission should not be accepted for the reasons expressed in the section of these reasons concerned with the interpretation of cl 54.1.5. The consequence of this reasoning is that, given the manner in which Dr Ridd's case has been presented, one part only, not all, of the basis for the Final Censure was unjustified. Consistently with the all-or-nothing presentation of his case, it was not submitted by Dr Ridd that an irrelevant consideration as to only one part of the Final Censure would have the effect that the whole of the Final Censure was a contravention of the Enterprise Agreement. The termination decision At about the same time as, or subsequent to, the Final Censure, Dr Ridd engaged in further conduct which was the basis for findings made by the Deputy Vice-Chancellor of JCU. It was alleged that in 20 respects Dr Ridd had engaged in serious misconduct. Those 20 respects were divided into nine head allegations, many of which contained sub-allegations, including: deliberate disclosure by Dr Ridd of confidential information to The Australian newspaper in around November 2017, being correspondence contained in his affidavit filed in the proceeding in the Federal Circuit Court; publishing confidential documents relating to the 2016 and 2017 disciplinary processes, which had led to the 2016 Censure and the Final Censure; "deliberately and repeatedly" breaching confidentiality directions given to him by JCU, including disclosing information to journalists; damaging JCU's reputation by making comments without proper basis and in deliberate disregard of his obligations to JCU; communicating to a student in a manner that directly or indirectly trivialised, satirised, or parodied JCU's disciplinary action against him; publishing comments about the disciplinary process that were said to be untrue, misleading, or not full or frank; communicating with another staff member in a manner that was threatening, insubordinate, or disrespectful; and preferring his own interests and those of the Institute of Public Affairs above the interests of JCU in breach of his obligations to avoid conflicts of interest. Apart from Dr Ridd's submission about his confidentiality obligations being subject to the cl 14 intellectual freedom, which should not be accepted for the reasons already given, none of these findings of serious misconduct was challenged. It appears to have been assumed throughout these proceedings that all of the information subject to these breach of confidentiality allegations (i) concerned the parties involved or concerned information that had been gathered and recorded as part of the disciplinary process and (ii) was not already in the public domain, including not in any open court hearings in the proceedings commenced in the Federal Circuit Court on 20 November 2017. On 13 April 2018, the Deputy Vice-Chancellor of JCU made a preliminary determination under cl 54.3.6 of the Enterprise Agreement that Dr Ridd had engaged in serious misconduct as alleged in relation to 18 of the 20 respects. Only two sub-allegations were found to be unsubstantiated. That is, the Deputy Vice-Chancellor made 18 findings of serious misconduct against Dr Ridd. The Deputy Vice-Chancellor's conclusion was that the appropriate disciplinary penalty was termination of Dr Ridd's employment. The Deputy Vice-Chancellor concluded that Dr Ridd's "behaviour in regards to each allegation, individually and collectively, is serious and destructive of the necessary trust and confidence for the continuation of the employment relationship" and that "[i]ndividually, and collectively, the allegations demonstrate a pattern of deliberate Serious Misconduct". None of these findings was in respect of expressions of opinions or ideas within Dr Ridd's academic expertise. And Dr Ridd did not suggest that any of these findings were in respect of criticism of JCU's decisions or its processes "through applicable processes". Following the preliminary decision of the Deputy Vice-Chancellor, Dr Ridd, through his solicitors, made a final submission to the Vice-Chancellor under cl 54.4 of the Enterprise Agreement. On 2 May 2018, the Vice-Chancellor made a final determination under cl 54.5 of the Enterprise Agreement. The Vice-Chancellor was satisfied that it was open to the Deputy Vice-Chancellor to make her 18 findings of serious misconduct and that it was within the power of the Deputy Vice-Chancellor to do so. The Vice-Chancellor determined that Dr Ridd's employment should be terminated. Much of the Vice-Chancellor's reasoning was concerned with the 18 findings of serious misconduct by the Deputy Vice-Chancellor, individually and collectively, as being destructive of the necessary trust and confidence for the continuation of the employment relationship. conduct Unlike the decision of the Deputy Vice-Chancellor, the Vice-Chancellor also considered the 2016 Censure and the Final Censure. She did so in the course of reasoning to the conclusion that "alternative sanctions would not be appropriate". However, the reliance by the Vice-Chancellor upon the 2016 Censure and the Final Censure focused upon the extent to which those censures concerned the as or Deputy Vice-Chancellor had found to be serious misconduct. The Vice-Chancellor said that Dr Ridd had been "twice censured for similar conduct" to the instances of serious misconduct found by the Deputy Vice-Chancellor and that Dr Ridd had repeated "the same conduct for which [he had] previously been censured". And for the reasons already given, the actions of Dr Ridd which were the subject of the 18 findings of serious misconduct by the Deputy Vice-Chancellor were not protected by cl 14. that which similar same the Other than to submit generally that the findings by the Deputy Vice-Chancellor were contrary to Dr Ridd's intellectual freedom protected by cl 14, Dr Ridd did not dispute that the Vice-Chancellor's termination decision could be supported by the 18 findings made by the Deputy Vice-Chancellor. Indeed, the contest between the parties concerned only the validity of the conclusions of the Deputy Vice-Chancellor. Conclusion This appeal was conducted by both parties on an all-or-nothing basis. JCU's position was that all of the findings against Dr Ridd were justified. Dr Ridd's position was that none of the findings made against him was justified. Dr Ridd sought to reinstate all of the orders made by the Federal Circuit Court with adjustments for compensation and pecuniary penalties to reflect errors identified by the Full Court which he conceded had been made. No submissions were made by Dr Ridd to justify an alternative ground of relief that the matter be remitted to the Federal Circuit Court. At the high level of principle at which this appeal was argued, the essential question is whether, in the interpretation of cl 14 of the Enterprise Agreement, the intellectual freedom should be qualified (i) by a requirement to afford respect and courtesy to others in the expression of issues and ideas in one's field of competence and (ii) by obligations of confidentiality in relation to JCU's disciplinary processes. The best interpretation of cl 14, having regard to its text, context, and purpose, is that the intellectual freedom is not qualified by a requirement to afford respect and courtesy in the manner of its exercise. That interpretation aligns with the long-standing core meaning of intellectual freedom. Whilst a prohibition upon disrespectful and discourteous conduct in intellectual expression might be a "convenient plan for having peace in the intellectual world", the "price paid for this sort of intellectual pacification, is the sacrifice of the entire moral courage of the human mind"37. The 2016 Censure given to Dr Ridd was, therefore, not justified. That conclusion does not affect the outcome of this appeal. The only conduct that falls within the intellectual freedom in cl 14 is the expression of opinion within an area of academic expertise and the criticism of JCU decisions and processes through applicable processes which include obligations of confidentiality. This litigation concerned conduct by Dr Ridd far beyond that of the 2016 Censure, almost none of which was protected by the intellectual freedom in cl 14. That conduct culminated in the termination decision, a decision which itself was justified by 18 grounds of serious misconduct, none of which involved the exercise of intellectual freedom. Since this appeal was run on an all-or-nothing basis, the appeal should be dismissed. There should be no order as to costs. 37 Mill, On Liberty (1859) at 60.

HIGH COURT OF AUSTRALIA APPELLANT AND MYRIAD GENETICS INC & ANOR RESPONDENTS D'Arcy v Myriad Genetics Inc [2015] HCA 35 7 October 2015 ORDER Appeal allowed. Set aside paragraph 1 of the order of the Full Court of the Federal Court of Australia made on 5 September 2014 and, in its place, order that: the appeal be allowed; and paragraph 1 of the order of Nicholas J made on 15 February 2013 be set aside and, in its place, order that claims 1, 2 and 3 of Australian Patent No 686004 be revoked. On appeal from the Federal Court of Australia Representation D K Catterns QC with P K Cashman for the appellant (instructed by Maurice Blackburn Lawyers) D Shavin QC with C Dimitriadis SC for the first respondent (instructed by Jones Day) Submitting appearance for the second respondent Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS D'Arcy v Myriad Genetics Inc Intellectual property – Patents – Patents Act 1990 (Cth) – Patentable subject matter – Patent claimed isolated nucleic acid coding for BRCA1 protein with specified mutations or polymorphisms indicative of susceptibility to cancer – Whether invention claimed is a patentable invention under s 18(1)(a) of Patents Act 1990 (Cth) – Whether invention claimed is a "manner of manufacture" within meaning of s 6 of Statute of Monopolies – Whether sufficient that invention claimed is artificially created state of affairs of economic significance – Utility of "artificially created state of affairs" criterion – Factors relevant to whether new class of claim falls within concept of manner of manufacture. Words and phrases – "artificially created state of affairs", "isolated nucleic acid", "manner of manufacture", "naturally occurring", "patentable invention", "product of nature". Patents Act 1990 (Cth), ss 18(1)(a), 40(2)(b). Statute of Monopolies (21 Jac I c 3), s 6. FRENCH CJ, KIEFEL, BELL AND KEANE JJ. Introduction from A human gene which codes for the production of a protein called BRCA1 may bear variations the norm, characterised as mutations or polymorphisms, which are associated with susceptibility to breast and ovarian cancers1. Like all genes, it is a functional unit of the deoxyribonucleic acid ("DNA") molecule found in the nucleus of the human cell. By a biochemical process within the cell involving ribonucleic acid ("RNA"), a gene gives rise to the production of the protein molecule or "polypeptide", which is defined by, or is an "expression" of, the sequence of components of the gene known as nucleotides. That sequence comprises "the genetic code"2. The BRCA1 gene is one of approximately 25,000 genes in the human DNA molecule, which consists of about 3.2 billion linked nucleotides. The isolation of any of a class of molecules bearing a sequence of nucleotides coding for a BRCA1 polypeptide is said by the first respondent, Myriad Genetics Inc ("Myriad"), to give rise to a patentable invention if the sequence carries certain mutations or polymorphisms indicative of susceptibility to cancer. The mutations and polymorphisms are set out in tables attached to the patent based on information derived from the DNA of human subjects. The validity of the invention claimed in Myriad's patent was challenged by the appellant, Ms D'Arcy, in revocation proceedings, on the ground that it was not a patentable invention within the meaning of the Patents Act 1990 (Cth) ("the Act"). That challenge was dismissed by a Judge of the Federal Court3, as was an the Federal Court4. appeal from Ms D'Arcy appeals to this Court by special leave from the decision of the Full the Full Court of that decision 1 The primary judge described both mutations and polymorphisms as variations in a gene: Cancer Voices Australia v Myriad Genetics Inc (2013) 99 IPR 567 at 578 [63]. That understanding of the terms was not in issue for present purposes. For a description of the taxonomy of variations in DNA sequences for medical purposes and a discussion of the variations in the BRCA1 gene the subject of this appeal, see the reasons of Gordon J at [204]-[209]. 2 The parties' agreed Primer of scientific matters stated: "The genetic code consists of groups of three nucleotides, each of which represents one amino acid." (2013) 99 IPR 567. 4 D'Arcy v Myriad Genetics Inc (2014) 224 FCR 479. Bell Court5. The second respondent, Genetic Technologies Ltd, holds the exclusive licence in Australia for the patent from Myriad. The patent in suit contains 30 claims. The validity of the first three claims is in issue in this appeal6. They are for: "1. An isolated nucleic acid coding for a mutant or polymorphic BRCA1 polypeptide, said nucleic acid containing in comparison to the BRCA1 polypeptide encoding sequence set forth in SEQ.ID No:1 one or more mutations or polymorphisms selected from the the mutations set forth polymorphisms set forth in Tables 18 and 19[7]. in Tables 12, 12A and 14 and An isolated nucleic acid as claimed in claim 1 which is a DNA coding for a mutant BRCA1 polypeptide, said DNA containing in comparison to the BRCA1 polypeptide encoding sequence set forth in SEQ.ID No:1 one or more mutations set forth in Tables 12, 12A and 14. An isolated nucleic acid as claimed in claim 1 which is a DNA coding for a polymorphic BRCA1 polypeptide, said DNA containing in comparison to the BRCA1 polypeptide encoding sequence set forth in SEQ.ID No:1 one or more polymorphisms set forth in Tables 18 and 19[8]." Each of those claims relates to "an isolated nucleic acid". That term is defined in the complete specification as including DNA, RNA or a mixed polymer and as "one which is substantially separated from other cellular components which naturally accompany a native human sequence or protein, eg, ribosomes, polymerases, many other human genome sequences and proteins." It embraces a nucleic acid sequence or protein removed from its naturally occurring environment and includes recombinant or cloned DNA isolates and chemically [2015] HCATrans 012 (French CJ and Bell J). 6 For a summary of the other claims listed in the specification, see the reasons of It was not in dispute that the reference to Table 19 is an error. See also the reasons of Gordon J at fn 197. 8 See fn 7. Bell synthesised analogs or analogs biologically synthesised by heterologous systems9. It seems to have been assumed by all parties that a nucleotide sequence derived from a nucleic acid originating in a human cell may itself appropriately be designated as a "nucleic acid". That assumption can be treated as taxonomical, and accepted for the purposes of this appeal. This appeal is concerned with the application of the centuries old terminology, reflected in the requirement of the Act, that to be patentable an invention as claimed must be a "manner of manufacture" within the meaning of s 6 of the Statute of Monopolies10. The "archaic language"11 of the section declared all monopolies to be void save for: "Letters Patents and Grants of Privilege for ... the sole working or making of any manner of new Manufactures within this Realm, to the true and first Inventor and Inventors of such Manufactures, which others at the time of making such Letters Patents and Grants shall not use, so as also they be not contrary to the Law, nor mischievous to the State, by raising prices of Commodities at home, or hurt of Trade, or generally inconvenient ..." This Court in National Research Development Corporation v Commissioner of Patents12 ("NRDC") held that the terminology of "manner of manufacture" taken from s 6 of the Statute of Monopolies was to be treated as a concept for case-by-case development13. It thereby mandated a common law methodology for its application. It did not confine that methodology to the use of any verbal formula in lieu of "manner of manufacture". Nor, in the case of a new class of claim, did the decision of the Court in NRDC preclude consideration of policy factors informed by the purpose of the Act and considerations of coherence in the law. "Heterologous systems" appear to refer to biomolecular processes outside the naturally occurring environment of the nucleic acid from which the isolate is prepared. 10 21 Jac I c 3 (1624). 11 So characterised by Lord Diplock in Bristol-Myers Co v Beecham Group Ltd [1974] AC 646 at 677. 12 (1959) 102 CLR 252; [1959] HCA 67. 13 (1959) 102 CLR 252 at 269. Bell Claims 1 to 3 are formally expressed as product claims. The class of products claimed is derived from naturally occurring sequences of nucleotides in the bodies of individual human beings. An essential integer requires that the isolated nucleic acid must code for all or part of a mutant or polymorphic BRCA1 polypeptide. It must therefore reproduce a relevant sequence of nucleotides existing in the body of the human being from which it is derived. The sequence so reproduced is isolated from structural and discrete components which would enliven its functionality in the human cell. Despite the formulation of the claimed invention as a class of product, its substance is information embodied in arrangements of nucleotides. The information is not "made" by human action. It is discerned. That feature of the claims raises a question about how they fit within the concept of a "manner of manufacture". As appears from s 6 of the Statute of Monopolies, an invention is something which involves "making". It must reside in something. It may be a product. It may be a process. It may be an outcome which can be characterised, in the language of NRDC, as an "artificially created state of affairs". Whatever it is, it must be something brought about by human action14. The requirement, in each claim, that the sequence in the isolate bear specified mutations or polymorphisms raises the same problem in a particular way. Satisfaction of that integer depends upon a characteristic of the human being from whom the nucleic acid is isolated, a characteristic which is not shared by all human beings. It has nothing to do with the person who isolates the nucleic acid bearing the mutant sequence. The proposition that a broad statutory concept applies to a new class of case on the boundaries of existing judicial development of that concept requires consideration of the limits of judicial law-making inherent in common law methodology. Where an affirmative application of the concept is likely to result in the creation of important rights as against the world, to involve far-reaching questions of public policy and to affect the balance of important conflicting interests, the question must be asked whether that application is best left for legislative determination. The patentability of nucleotide sequences derived from human DNA is in that category. The inherent patentability of the invention as claimed would powerfully imply patentability of any claim for an isolated nucleic acid coding for a specified polypeptide. Claims 1 to 3 include the products of applying any process, known or unknown, to the cells of a human being which extracts or replicates from them nucleotides which code for mutant or polymorphic BRCA1 in the sequences specified in the Patent, whether or not the isolate contains other components and 14 (1959) 102 CLR 252 at 276–277. Bell sequences. The size of the class of the products as defined is large. No upper limit was suggested in argument. The boundaries of the class are not defined by a limiting range of chemical formulae. There is a real risk that the chilling effect of the claims, on the use of any isolation process in relation to the BRCA1 gene, would lead to the creation of an exorbitant and unwarranted de facto monopoly on all methods of isolating nucleic acids containing the sequences coding for the BRCA1 protein. The infringement of the formal monopoly would not be ascertainable until the mutations and polymorphisms were detected. Such a result would be at odds with the purposes of the patent system. As Cornish, Llewelyn and Aplin observed generally in the 8th edition of their well-known "A patent over a single gene may prove to set up a barrier against its use in a quite distinct genetic procedure for a different medical condition which is worked out only subsequently." They further observed, in the context of the Patents Act 1977 (UK) but relevantly to the present case16: "The question of what activity by an unauthorised person actually amounts to infringement of these claims is a problematic one, raising the issue when does that person 'make the patented product' in the sense of PA Those features of the invention as claimed in Claims 1 to 3, and its substance as an invention relating to sequence information, lead to the conclusion that its patentability would not serve the purposes of the concept of "manner of manufacture" in s 18(1)(a) of the Act or of the Act itself. It should not be brought, by analogy or otherwise, within that concept. The contested claims do not meet the requirement of s 18(1)(a). Essentially, for the preceding reasons, further explained in the following sequence of topics, the appeal should be allowed: The statutory framework. 15 Cornish, Llewelyn and Aplin, Intellectual Property: Patents, Copyright, Trade Marks and Allied Rights, 8th ed (2013) at 915 [21–21]. 16 Cornish, Llewelyn and Aplin, Intellectual Property: Patents, Copyright, Trade Marks and Allied Rights, 8th ed (2013) at 915 [21–21], fn 85. Bell (ii) A manner of manufacture — relevant principles. (iii) Legislative history. (iv) The primer — setting out the relevant science. (v) DNA and RNA in the human cell. (vi) Genes. (vii) Genes expressing proteins. (viii) Isolation of nucleic acids. Isolated nucleic acids. The uses of isolated nucleic acids. (xi) The patent specification. (xii) Isolated nucleic acid — composite or extract? (xiii) The primary judge's decision. (xiv) The decision of the Full Court. (xv) Conclusions. The statutory framework Section 18(1) sets out "the essential characteristics of a 'patentable invention' for the purposes of the Act."17 Section 18(1)(a) provides: "Subject to subsection (2), a patentable invention is an invention that, so far as claimed in any claim: is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies". 17 N V Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (1995) 183 CLR 655 at 659 per Brennan, Deane and Toohey JJ; [1995] HCA 15. Bell The other requirements of s 18(1) of novelty18, inventive step19, usefulness20 and no secret user before the priority date21 are not raised in this appeal. Nor is s 18(2), which precludes the patentability of "[h]uman beings, and the biological processes for their generation". The term "patentable invention" is defined in the Dictionary in Sched 1 to the Act as "an invention of the kind mentioned in section 18." The term "invention" is defined as22: "any manner of new manufacture the subject of letters patent and grant of privilege within section 6 of the Statute of Monopolies, and includes an alleged invention." It is not clear, and was not debated in this appeal, how the expression "manner of manufacture" differs from the expression "manner of new manufacture"23. The definition of "invention" has been used in Commonwealth patent statutes since federation24. It allows for exclusion from the class of "invention", and therefore from the class of "patentable invention", anything which is not, on the face of the specification, a proper subject of letters patent according to traditional principles25. That anterior exclusion may be based upon an admission, on the face of the specification, which makes clear that the invention claimed is not 18 Act, s 18(1)(b)(i). 19 Act, s 18(1)(b)(ii). 20 Act, s 18(1)(c). 21 Act, s 18(1)(d). 22 Act, Sched 1, definition of "invention". 23 Ricketson, Richardson and Davison, Intellectual Property: Cases, Materials and Commentary, 5th ed (2013) at 712 [12.3]. 24 Patents Act 1903 (Cth), s 4; Patents Act 1952 (Cth), s 6 — derived from s 46 of the Patents, Designs, and Trade Marks Act 1883 (UK), but first appearing in s 55 of the Patent Law Amendment Act 1852 (UK). 25 N V Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (1995) 183 CLR 655 at 665, 667 per Brennan, Deane and Toohey JJ. Bell novel or does not involve an inventive step26. This appeal, however, collapses the anterior and subsequent questions — "Is there an invention?" and "Is there a patentable invention?" — into one inquiry. That inquiry requires a definition of the allegedly patentable invention. That definition depends upon the construction of the impugned claims read in the light of the specification as a whole and the relevant prior art27. The prior art in this case was reflected in expert evidence at trial and set out in the scientific primer agreed between the parties and summarised later in these reasons. The conditions of patentability in s 18(1) must be satisfied by the invention "so far as claimed in any claim". That term directs attention to the formal requirement of s 40(2)(b) that a complete application for a standard patent must "end with a claim or claims defining the invention". The word "invention" in that context does not import the definition in the Dictionary, but means "the embodiment which is described, and around which the claims are drawn"28. Historically, the claim, as definer of the inventor's property, emerged in the late 19th century29. The statutory requirement to set out at the end of a complete specification a "distinct statement of the invention claimed" first appeared in s 5(5) of the Patents, Designs, and Trade Marks Act 1883 (UK). It was reflected in successive Commonwealth patent statutes from the time of federation30. The function of the claim was described by Lord Russell of Killowen in 1938 as "to define clearly and with precision the monopoly claimed, 26 (1995) 183 CLR 655 at 663–664 per Brennan, Deane and Toohey JJ. See also Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [No 2] (2007) 235 CLR 173 at 211 [106]; [2007] HCA 21. 27 Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1 at 12–13 [16], 16 [24]; [2001] HCA 8. 28 (2001) 207 CLR 1 at 14 [19], 15 [21] citing AMP Inc v Utilux Pty Ltd (1971) 45 ALJR 123 at 127 per McTiernan J. 29 See generally Brennan, "The Evolution of English Patent Claims as Property Definers", (2005) Intellectual Property Quarterly 361; Pila, "Inherent patentability in Anglo-Australian law: A history", (2003) 14 Australian Intellectual Property Journal 109; Seaborne Davies, "The Early History of the Patent Specification", (1934) 50 Law Quarterly Review 86 and 260. 30 Patents Act 1903 (Cth), s 36; Patents Act 1952 (Cth), s 40(1). Bell so that others may know the exact boundaries of the area within which they will be trespassers."31 Its limiting role was emphasised32: "It and it alone [defines] the monopoly; and the patentee is under a statutory obligation to state in the claims clearly and distinctly what is the invention which he desires to protect." Lord Russell's observations have stood the test of time in the United Kingdom as "[t]he best-known statement of the status of the claims in UK law"33. They also describe the function of the claim mandated by s 40(2)(b) of the Act. As succinctly, but accurately, stated in a recent Australian text that function is "to define what it is that the patentee has exclusive right to, during the term of the patent."34 The breadth of the class of invention claimed in this case, using the generic term "isolated nucleic acid", makes definition of the boundaries of the monopoly which is sought elusive. The rights of the patentee are conferred by s 13(1) of the Act, which provides: "Subject to this Act, a patent gives the patentee the exclusive rights, during the term of the patent, to exploit the invention and to authorise another person to exploit the invention." The term "exploit" in relation to an invention includes35: "(a) where the invention is a product—make, hire, sell or otherwise dispose of the product, offer to make, sell, hire or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things; or 31 Electric and Musical Industries Ltd v Lissen Ltd (1938) 56 RPC 23 at 39. 32 (1938) 56 RPC 23 at 41. 33 Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2005] RPC 9 at 182 [20] per Lord Hoffmann citing Electric and Musical Industries Ltd v Lissen Ltd (1938) 56 RPC 23 at 39. 34 Bodkin, Patent Law in Australia, 2nd ed (2014) at 367 [5960]. 35 Act, Sched 1, definition of "exploit". Bell (b) where the invention is a method or process—use the method or process or do any act mentioned in paragraph (a) in respect of a product resulting from such use." The definition of "exploit" distinguishes between an invention which is a product and an invention which is a method or process which may or may not yield a product. In Northern Territory v Collins36, Gummow ACJ and Kirby J linked that distinction to the way in which, over time, the expression "manner of manufacture" had been construed to include the practice and means of "making", as well as its product, which would include an economically useful outcome effected by an inventive method37. The idea of something which can be "made" by human intervention is central and long-standing38 — "'[m]anufacture' connotes ... the making of something."39 It is an important element of the exclusive right to exploit a patented product. The proceedings for the revocation of the Myriad patent Claims 1 to 3, which have led to this appeal, were instituted under s 138 of the Act. The relevant ground for revocation is that set out in s 138(3)(b): "that the invention is not a patentable invention". The answer to the question of patentability raised by that ground depends upon the principles governing the criterion prescribed by s 18(1)(a), considered in the next section of these reasons. 36 (2008) 235 CLR 619; [2008] HCA 49. 37 (2008) 235 CLR 619 at 624 [18]. 38 R v Wheeler (1819) 2 B & Ald 345 at 349–350 per Abbott CJ [106 ER 392 at 394– 395]; Lane Fox v Kensington and Knightsbridge Electric Lighting Company [1892] 3 Ch 424 at 428–429 per Lindley LJ; Reynolds v Herbert Smith & Co Ltd (1902) 20 RPC 123 at 126 per Buckley J. 39 Blanco White, Patents for Inventions, 2nd ed (1955) at 12. Bell A manner of manufacture — relevant principles The legislative history of the requirement for patentability imposed by s 18(1)(a) of the Act has been set out in previous decisions of this Court40. The question posed by the application of s 18(1)(a) may be framed as in NRDC41: "Is this a proper subject of letters patent according to the principles which have been developed for the application of s 6 of the Statute of Monopolies?" That question is to be answered according to a common law methodology under the rubric of "manner of manufacture" as developed through the cases, but consistently with "a widening conception of the notion [which] has been a characteristic of the growth of patent law."42 That widening conception is a necessary feature of the development of patent law in the 20th and 21st centuries as scientific discoveries inspire new technologies which may fall on or outside the boundaries of patentability set by the case law which predated their emergence. The Court in NRDC upheld the validity of a patent for the use of previously unknown properties of a known chemical to effect a new purpose. The Court generalised what had come to be treated, erroneously, as a "rule", that for a method or process to be a "manner of manufacture" it should result in the production, improvement, restoration or preservation of a "vendible product"43. By treating the word "product" as covering every end produced and the word "vendible" as pointing to the requirement of utility in practical affairs, the vendible product "rule" could be accepted as wide enough to convey the broad idea which a long line of authority on the subject had been shown to be 40 Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd (2013) 253 CLR 284 at 297–301 [10]–[16] per French CJ, 324–325 [71] per Hayne J, 356 [186]–[187] per Crennan and Kiefel JJ; [2013] HCA 50. 41 (1959) 102 CLR 252 at 269. 42 (1959) 102 CLR 252 at 270. 43 The "rule" was said to derive from non-exhaustive guidelines set out in the judgment of Morton J in Re GEC's Application (1942) 60 RPC 1 at 4 — see discussion in Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd (2013) 253 CLR 284 at 303 [21] per French CJ. Bell comprehended by the Statute44. The Court said of the method patent in suit before it45: "The effect produced by the appellant's method exhibits the two essential qualities upon which 'product' and 'vendible' seem designed to insist. It is a 'product' because it consists in an artificially created state of affairs, discernible by observing over a period the growth of weeds and crops respectively on sown land on which the method has been put into practice. And the significance of the product is economic ..." The terminology of an "artificially created state of affairs of economic significance" is to be understood in the context in which it was used in NRDC. It was not intended as a formula exhaustive of the concept of manner of manufacture. The Court made that point emphatically46: "To attempt to place upon the idea the fetters of an exact verbal formula could never have been sound." Hayne J made it in Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd47: "Nothing said in the Court's reasons for decision in that case can be taken as an exact verbal formula which alone captures the breadth of the ideas to which effect must be given." In similar vein, Crennan and Kiefel JJ, with whom Gageler J agreed, said that48: "In Australian law, the starting point is the recognition in the NRDC Case that any attempt to define the word 'manufacture' or the expression 'manner of manufacture', as they occur in s 6 of the Statute of Monopolies, is bound to fail." (footnote omitted) 44 (1959) 102 CLR 252 at 276 citing, inter alia, the approach of Lloyd-Jacob J in Re Elton and Leda Chemicals Ltd's Application [1957] RPC 267 at 268–269 which concerned a patent for a method of dispersing fog. 45 (1959) 102 CLR 252 at 277. 46 (1959) 102 CLR 252 at 271. 47 (2013) 253 CLR 284 at 328 [83]. 48 (2013) 253 CLR 284 at 366 [224]. Bell It is true that in Anaesthetic Supplies Pty Ltd v Rescare Ltd49 Lockhart J in the Full Federal Court, in a passage endorsed by Crennan and Kiefel JJ in Apotex50, said51: "If a process which does not produce a new substance but nevertheless results in 'a new and useful effect' so that the new result is 'an artificially created state of affairs' providing economic utility, it may be considered a 'manner of new manufacture' within s 6 of the Statute of Monopolies." (citations omitted) Importantly, however, his Honour used the word "may". Neither Lockhart J nor Crennan and Kiefel JJ should be read as holding that satisfaction of that formula would mandate a finding of inherent patentability. That is not to say that it will not suffice for a large class of cases in which there are no countervailing considerations. In CCOM Pty Ltd v Jiejing Pty Ltd52, the Full Court of the Federal Court said the NRDC case "requires a mode or manner of achieving an end result which is an artificially created state of affairs of utility in the field of economic endeavour."53 As Professor Monotti wrote in an article in the Federal Law Review in 2006, the passage from the judgment in NRDC characterising the process claimed before the Court as a product consisting in an "artificially created state of affairs" merely explained "the qualities of the invention before the court."54 The Court could hardly have intended the phrase to be seen as a definition of manner of manufacture because it had already denounced the idea of 49 (1994) 50 FCR 1. 50 (2013) 253 CLR 284 at 372 [241]. 51 (1994) 50 FCR 1 at 19. 52 (1994) 51 FCR 260. 53 (1994) 51 FCR 260 at 295. 54 Monotti, "The Scope of 'Manner of Manufacture' under the Patents Act 1990 (Cth) after Grant v Commissioner of Patents", (2006) 34 Federal Law Review 461 at 465. Bell an exact formula55. The formulation in CCOM, like the so-called vendible product "rule", should be taken as a guide rather than as a rigid formula56. Counsel for Myriad posited "the test" in NRDC for patentability of a product as — "is it an artificially created state of affairs of economic utility?". Myriad's approach was accepted by the primary judge who derived from NRDC the proposition that57: "a product that consists of an artificially created state of affairs which has economic significance will constitute a 'manner of manufacture'." (emphasis added) In similar vein, the Full Court said of NRDC that58: "The Court held that it is sufficient for a product to result in 'an artificially created state of affairs', leading to 'an economically useful result'." That proposition underpinned the conclusion by the Full Court in the second last paragraph of its judgment that59: "The isolated nucleic acid, including cDNA, has resulted in an artificially created state of affairs for economic benefit. The claimed product is properly the subject of letters patent. The claim is to an invention within the meaning of s 18(1) of the Act." Myriad's proposition and the approach of the primary judge and the Full Court, with respect, rested upon an unduly narrow characterisation of the effect of the decision in NRDC. It rested upon the premise that the claims were for a product well within existing conceptions of a "manner of manufacture". 55 Monotti, "The Scope of 'Manner of Manufacture' under the Patents Act 1990 (Cth) after Grant v Commissioner of Patents", (2006) 34 Federal Law Review 461 at 56 Monotti, "The Scope of 'Manner of Manufacture' under the Patents Act 1990 (Cth) after Grant v Commissioner of Patents", (2006) 34 Federal Law Review 461 at 465. 57 (2013) 99 IPR 567 at 585 [88]. 58 (2014) 224 FCR 479 at 516 [208]. 59 (2014) 224 FCR 479 at 518 [218]. Bell This Court in NRDC did not prescribe a well-defined pathway for the development of the concept of "manner of manufacture" in its application to unimagined technologies with unimagined characteristics and implications. Rather, it authorised a case-by-case methodology. Consistently with that approach, and without resort to the "generally inconvenient" proviso in s 6 of the Statute of Monopolies, there may be cases in which the court will decide that the implications of patentability of a new class of invention are such that the invention as claimed should not be treated as patentable by judicial decision. The Full Court disclaimed any consideration of "whether, for policy or moral or social reasons, patents for gene sequences should be excluded from patentability."60 The question for its determination, however, was not whether a claimed invention, prima facie patentable, should be denied patentability by judicial fiat. The question was whether the claimed invention lay within the established concept of a manner of manufacture and, if not, whether it should nevertheless be included in the class of patentable inventions as defined in s 18(1)(a) of the Act. Purposive and consequentialist considerations which, no doubt, could be classed as "policy" reasons may play a part in answering the second limb of that question. As Professor Monotti percipiently remarked in her article in the Federal Law Review, which, of course, predated Apotex61: "Although it was important to expand patentable subject matter and remove artificial fetters on patentable subject matter at the time of NRDC, there is no consensus that we should continue to expand the scope of patentable subject matter into all fields of endeavour so as to remove the remaining fetters on patentable subject matter. The continuing debates on whether methods of medical treatment, business systems and genes should be patentable subject matter demonstrate that there is no universal acceptance of an approach that would accept that anything under the sun invented by man is patentable." The proposition that patents should extend to "anything under the sun that is made by man" was a statement of legislative intention attributed to Congress by the Supreme Court of the United States in Diamond v Chakrabarty62 in relation to 35 USC §101 which provides: 60 (2014) 224 FCR 479 at 516 [205]. 61 Monotti, "The Scope of 'Manner of Manufacture' under the Patents Act 1990 (Cth) after Grant v Commissioner of Patents", (2006) 34 Federal Law Review 461 at 467. 62 447 US 303 at 309 (1980). Bell "Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title." NRDC was decided in 1959. The Act in 1990 re-enacted, in s 18(1)(a), the definition of "invention" in the Patents Act 1952 (Cth)63, to which NRDC was directed. That re-enactment bore with it the judicial methodology for its application and the constraints attaching to that methodology. The proper function of the judicial branch was considered in an analogous, but not identical, context in two successive decisions of the Supreme Court of the United States in 1978 and 1980. In Parker v Flook64, the Court said that the judiciary "must proceed cautiously when ... asked to extend patent rights into areas wholly unforeseen by Congress." In Chakrabarty, Burger CJ, writing for the majority, and finding for patentability of a manufactured micro-organism as "any new and useful ... manufacture, or composition of matter" under 35 USC §101, said65: "It is, of course, correct that Congress, not the courts, must define the limits of patentability; but it is equally true that once Congress has spoken it is 'the province and duty of the judicial department to say what the law is.'" The majority rejected the proposition that the claim before them was a matter of high policy for resolution within the legislative process, saying that the contentions to that effect should be pressed on the political branches of government and not on the courts66. Brennan J, who was joined in dissent by White, Marshall and Powell JJ, put the other side of the argument67: "It is the role of Congress, not this Court, to broaden or narrow the reach of the patent laws. This is especially true where, as here, the composition sought to be patented uniquely implicates matters of public concern." 63 Patents Act 1952 (Cth), s 6. 64 437 US 584 at 596 (1978). 65 447 US 303 at 315 (1980) citing Marbury v Madison 5 US 137 at 177 (1803). 66 447 US 303 at 317 (1980). 67 447 US 303 at 322 (1980). Bell The debate about institutional competency in Chakrabarty was resolved by the majority on the basis that the statutory authority conferred on the courts by Congress under 35 USC §101 to patentability unconstrained by policy considerations. In Australia, the Parliament has left it to the courts to carry out a case-by-case development of a broad statutory concept according to the common law method in a representative democracy. required an approach The term "manner of manufacture", and the concept it embodies, was and is no more pregnant with rules and applications awaiting discovery, than is the common law. Its statutory origin in 1624 is embedded in historically contingent concepts of patent and invention. It has been described as an act of economic policy the objectives of which were the "encouragement of industry, employment and growth, rather than justice to the 'inventor' for his intellectual percipience."68 It has also been characterised, persuasively, as a "political compromise"69. That characteristic and the relative inaccessibility, nearly four centuries after its enactment, of contemporary understandings of patent and invention no doubt played a part in its application as a general common law concept, rather than as a well-defined statutory category. The modest and constrained role of courts in the common law tradition was spoken of in Breen v Williams70 by Gaudron and McHugh JJ. Their Honours, nevertheless, acknowledged the necessity, from time to time, to reformulate existing legal rules and principles to take account of changing social conditions. Their Honours said71: "But such steps can be taken only when it can be seen that the 'new' rule or principle that has been created has been derived logically or analogically from other legal principles, rules and institutions." The question whether a propounded application of a general concept amounts to an extension of that concept is often debatable. In some cases, the distinction between a new application and an extension is likely to be a distinction without a practical difference. 68 Cornish, Llewelyn and Aplin, Intellectual Property: Patents, Copyright, Trade Marks and Allied Rights, 8th ed (2013) at 123 [3–05]. 69 Dent, "'Generally Inconvenient': The 1624 Statute of Monopolies as Political Compromise", (2009) 33 Melbourne University Law Review 415 at 451–453. 70 (1996) 186 CLR 71; [1996] HCA 57. 71 (1996) 186 CLR 71 at 115. Bell Myriad submitted that the Court ought to treat the impugned claims as claims for a chemical compound. It argued that there was "no jurisprudential basis or normative principle upon which claims to isolated nucleic acids should be treated differently from any other product claims." The Court should look to their subject matter and determine the question of patentability according to the principles in NRDC which had been affirmed in Apotex. That submission sought to locate the claims well within the established understanding of "manner of manufacture" in a way that would make normative considerations, which might inform the development of that concept, irrelevant. Properly construed, however, the claims are not within the established boundaries and wider considerations than Myriad's characterisation of them as an "artificially created state of affairs of economic utility" come into play. A number of factors may be relevant in determining whether the exclusive rights created by the grant of letters patent should be held by judicial decision, applying s 18(1)(a) of the Act, to be capable of extension to a particular class of claim. According to existing principle derived from the NRDC decision, the first two factors are necessary to characterisation of an invention claimed as a manner of manufacture: 1. Whether the invention as claimed is for a product made, or a process producing an outcome as a result of human action. 2. Whether the invention as claimed has economic utility. When the invention falls within the existing concept of manner of manufacture, as it has been developed through cases, they will also ordinarily be sufficient. When a new class of claim involves a significant new application or extension of the concept of "manner of manufacture", other factors including factors connected directly or indirectly to the purpose of the Act may assume importance. They include: 3. Whether patentability would be consistent with the purposes of the Act and, in particular: 3.1. whether the invention as claimed, if patentable under s 18(1)(a), could give rise to a large new field of monopoly protection with potentially negative effects on innovation; 3.2. whether the invention as claimed, if patentable under s 18(1)(a), could, because of the content of the claims, have a chilling effect on activities beyond those formally the subject of the exclusive rights granted to the patentee; Bell 3.3. whether to accord patentability to the invention as claimed would involve the court in assessing important and conflicting public and private interests and purposes. 4. Whether to accord patentability to the invention as claimed would enhance or detract from the coherence of the law relating to inherent patentability. Relevantly to Australia's place in the international community of nations: 5.1. Australia's obligations under international law; the patent laws of other countries. 6. Whether to accord patentability to the class of invention as claimed would involve law-making of a kind which should be done by the legislature. Factors 3, 4 and 6 are of primary importance. Those primary factors are not mutually exclusive. It may be that one or more of them would inform the "generally inconvenient" limitation in s 6 of the Statute of Monopolies. It is not necessary to consider that question given that no reliance was placed upon that proviso. They are nevertheless also relevant to the ongoing development of the concept of "manner of manufacture". Factors 1 and 2 have been discussed in the light of NRDC. The purpose of Australian patent legislation has been discussed in general terms in decisions of this Court. At a functional level, it can be defined narrowly by what the Act does — it confers upon a patentee, in return for disclosure of his or her invention, a limited monopoly at the expiration of which an invention is available to the public at large72. That function may be expressed as an objective but it serves the larger purpose of encouraging innovation by means which do not stifle it. The inventive step which emerged as an independent requirement from the general limiting criterion of want of subject matter73 "reflected the balance of policy considerations in patent law of encouraging and rewarding inventors without 72 Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 206 per Mason J; [1982] HCA 44. 73 Sunbeam Corporation v Morphy-Richards (Aust) Pty Ltd (1961) 180 CLR 98 at 111 per Windeyer J; [1961] HCA 39; see, eg, Gadd v The Mayor of Manchester (1892) 9 RPC 516 at 525–526 per Lindley LJ. See generally Terrell, The Law and Practice Relating to Letters Patent for Inventions, 7th ed (1927) at 57–58. Bell impeding advances and improvements by skilled, non-inventive persons."74 It follows that the purpose of the Act would not be served by according patentability to a class of claims which by their very nature lack well-defined boundaries or have negative or chilling effects on innovation. There may also be flow-on consequences for the balance that the Act seeks to strike and the coherence of the law as developed by judicial decision in giving effect to the purposes of the law. If there be a significant risk of such a consequence, the existence of that risk will weigh against inherent patentability. Coherence and the limits of the judicial function were both relevant in the determination in Apotex that methods of medical treatment can be inherently patentable. Having regard to the established patentability of pharmaceutical products, the exclusion of treatments using such products was anomalous and had no stable logical or normative basis75. Their inclusion was consistent with the existing application of the law and served to enhance its coherence. The decision to accord or refuse patentability to a particular class of claims may have implications for Australia's obligations under international law. The existence of such obligations can affect the construction of statutes where, as in the case of "manner of manufacture", constructional choices implicit in its development are available76. 74 Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [No 2] (2007) 235 CLR 173 at 194 [48] citing Société Technique de Pulverisation Step v Emson Europe Ltd [1993] RPC 513 at 519 per Hoffmann LJ; see also Aktiebolaget Hässle v Alphapharm Pty Ltd (2002) 212 CLR 411 at 427 [33] per Gleeson CJ, Gaudron, Gummow and Hayne JJ; [2002] HCA 59. 75 (2013) 253 CLR 284 at 316 [44] per French CJ, 382–383 [282] per Crennan and Kiefel JJ, 390–391 [314] per 76 Jumbunna Coal Mine NL v Victorian Coal Miners' Association (1908) 6 CLR 309 at 363 per O'Connor J; [1908] HCA 95; Polites v The Commonwealth (1945) 70 CLR 60 at 68–69 per Latham CJ, 77 per Dixon J, 80–81 per Williams J; [1945] HCA 3; Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 38 per Brennan, Deane and Dawson JJ; [1992] HCA 64; Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 287 per Mason CJ and Deane J; [1995] HCA 20; Kartinyeri v The Commonwealth (1998) 195 CLR 337 at 384 [97] per Gummow and Hayne JJ; [1998] HCA 22; Coleman v Power (2004) 220 CLR 1 at 27–28 [19] per Gleeson CJ; [2004] HCA 39; Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 244 CLR (Footnote continues on next page) Bell There was no submission that Australia would breach its international legal obligations by failing to accord patentability to inventions of the kind claimed in this case. Article 27(1) of the Agreement on Trade-Related Aspects of Intellectual Property Rights ("the TRIPS Agreement") requires, subject to pars (2) and (3), that patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application. There is provision for "ordre public or morality" exclusions in Art 27(2) and specific exclusions are authorised in Art 27(3). They relate to methods of treatment for humans or animals, and to plants and animals other than micro-organisms. It was not argued that the claims in this case fall within an "ordre public or morality" exclusion or otherwise under the express exclusions of Art 27(3). Article 27(1) requires that patents be available for any invention "in all fields of technology" and that patent protection not discriminate against specific areas of technology. There is, of course, an anterior question about the scope of the concept of "invention" under the TRIPS Agreement. The materials and submissions before the Court offered no basis for inferring that Australia has an international obligation to recognise as inventions the subject matter of the impugned claims. The relevant law of other countries may appropriately be taken into account where an application of the Act would enhance or detract from the harmonisation of Australia's patent law with other jurisdictions. There was no real debate about the implications for harmonisation arising out of a decision one way or another about the patentability of isolated nucleic acids. The legislative frameworks in the jurisdictions of regional trading partners — China, Japan, Korea, Singapore and India — establish criteria for the patentability of inventions which do not specifically address the patentability of isolated nucleic acids77. The reported practice of the Patent Offices in most of those jurisdictions 144 at 234 [247] per Kiefel J; [2011] HCA 32; CPCF v Minister for Immigration and Border Protection (2015) 89 ALJR 207 at 216 [8] per French CJ; 316 ALR 1 at 7–8; [2015] HCA 1. 77 Patent Law of the People's Republic of China (China), Art 2, definition of "invention", Arts 22 and 25 [English translation available at the website of the State Intellectual Property Office at http://english.sipo.gov.cn/laws]; Patent Act 1959 (Japan), Art 2, definition of "invention", Arts 29 and 32 [English translation available at the website of the Japan Patent Office at http://www.jpo.go.jp/]; Patent Act (Korea), Art 2, definition of "invention", Arts 29 and 32 [English translation the Korean Intellectual Property Office at available at (Footnote continues on next page) the website of Bell is to grant patents for isolated nucleic acids, particularly if the claim demonstrates that they are not mere discoveries78. In Europe, under Arts 52 and 57 of the European Patent Convention, an isolated nucleic acid is capable of being a patentable subject matter provided that its industrial application is disclosed79. The application of that requirement was recently discussed by the Supreme Court of the United Kingdom in Human Genome Sciences Inc v Eli Lilly & Co80 on the clear premise that such claims are patentable. The Supreme Court of the United States in Association for Molecular Pathology v Myriad Genetics Inc81, discussed later in these reasons, recently held that a claim for an isolated DNA coding for a BRCA1 polypeptide was not patentable as it fell within a "law of nature" exception. www.kipo.go.kr/en]; Patents Act 1994 [accessible at statutes.agc.gov.sg]; Patents Act 1970 (India), s 2, definition of "invention", s 3 [accessible at the website of the Controller General of Patents Designs and Trademarks at www.ipindia.nic.in]. (Singapore), s 13 78 China, State Intellectual Property Office of the People's Republic of China, Guidelines for Patent Examination, (2010), Pt 2, Ch 10 at [9.1.2.2] [English translation available at the website of the State Intellectual Property Office at http://english.sipo.gov.cn/examination]; Japan, Japan Patent Office, Examination Guidelines for Patent and Utility Model in Japan, (2009), Pt 2, Ch 1 at [1.1(2)] [English translation available at the website of the Japan Patent Office at Intellectual Property Office, Patent Examination Guidelines, (2013), Pt 3, Ch 1 at [4.1.2] [English translation available at the website of the Korean Intellectual Property Office at www.kipo.go.kr/en]; Singapore, Intellectual Property Office of Singapore, Examination Guidelines for Patent Applications at IPOS, (2015) at [8.11]–[8.12], [8.98] [accessible at www.ipos.gov.sg]. The Indian Controller General of Patents, Designs and Trademarks issued a public notice on 3 March 2015 inviting public comments for a "Draft Guidelines for Search and Examination of Patent Applications" by 25 March 2015. The Guidelines have not been finalised. This information is accessible at www.ipindia.nic.in. 79 Convention on the Grant of European Patents, opened for signature on 5 October 1973 (entered into force on 7 October 1977). 80 [2012] RPC 6. 81 186 L Ed 2d 124 (2013). Bell Lord Neuberger in Human Genome Sciences made an observation about harmonisation which recognised contemporary realities82: "There have been moves over the past fifty years (and more) to harmonise patent law across jurisdictions (the EPC and TRIPS ... being two important examples), and it is a laudable aim to seek to ensure that all aspects of the law of patents are identical throughout the world. However, the achievement of such an aim is plainly not currently practicable, and, although they have a great deal in common, there are significant and fairly fundamental differences (over and above the different words used in Arts 52 and 57 of the EPC and s 101 of 35 USC) between US patent law and the EPC (two notorious examples being the first to file rule in Europe, and file wrapper estoppel in the US)." His Lordship further observed83: "Accordingly, particularly when it comes to a nice question such as the precise delineation of boundaries between patentability and unpatentability on the ground of industrial application, it would be unsurprising if the law was not identical under the two jurisdictions." The latter observation may be applied to nice questions of patentability between jurisdictions generally and, a fortiori, where new questions of patentability are to be determined judicially on a case-by-case basis. Legislative history Myriad submitted that what it called "the legislative history" did not support any implied "exclusion" of isolated DNA or RNA sequences from patentability. It relied upon the following events: The rejection in the Senate of an amendment to the Patents Bill 1990, which would have excluded genes from patentability, whether derived from cells or chemically synthesised84. 82 [2012] RPC 6 at 116 [40]. 83 [2012] RPC 6 at 116 [41]. 84 Australia, Senate, Parliamentary Debates (Hansard), 17 September 1990 at 2478– Bell The rejection by the Legal and Constitutional Affairs Legislation Committee of the Senate of a Private Members' Bill, the Patent Amendment (Human Genes and Biological Materials) Bill 201085. Myriad also referred to the Report of the Australian Law Reform Commission on gene patenting, published in 2004 ("the ALRC Report"), and its conclusion that "the ALRC considers that a new approach to the patentability of genetic materials is not warranted at this stage in the development of the patent system"86. Myriad's submissions on legislative history rested upon the premise, derived from debates on the failed amendments and the recommendation in the ALRC Report, that this case is about exclusion from patentability of an otherwise patentable invention. In its written submissions, Myriad said that: "Parliament has expressly declined to enact any such exclusion on more than one occasion. This making of a conscious decision not to act sets this area apart from mere silence by the legislature, which might be characterised as the legislature leaving the field to the Courts for resolution." (emphasis in original) This Court is not concerned in this appeal with "gene patenting" generally, but with whether the invention as claimed in Claims 1 to 3 falls within established applications of the concept of manner of manufacture. If it does not, then the question is one of inclusion not exclusion. The legislative history cannot be read as impliedly mandating the patentability of claims for inventions relating to isolated nucleic acids coding for particular polypeptides. The legislative history does not assist the Court in answering the question posed in this appeal. Against that general background, the relevant science, the patent specification and the impugned claims can be considered. The primer — setting out the relevant science The parties agreed on a primer of scientific matters setting out aspects of the structure and functions of DNA, the nucleotides which make it up, and the gene sequences which they form that determine the production of the various 85 Australia, Senate, Legal and Constitutional Affairs Legislation Committee, Patent Amendment (Human Genes and Biological Materials) Bill 2010, (2011) at 86 Australian Law Reform Commission, Genes and Ingenuity: Gene Patenting and Human Health, Report No 99, (2004) at 130–131 [6.53]. Bell proteins which generate bodily tissues and fluids. The primer described how DNA replicates in the human cell and the way in which a sequence of nucleotides can be derived from a naturally occurring sequence and reproduced artificially as a distinct molecule outside the cell. Based upon the expert evidence at trial, the primer may be taken as embodying the scientific background, presumably comprising common general knowledge, or at least relevant prior art, against which the complete specification, including the claims, is to be read. DNA and RNA in the human cell The human body is a multi-cellular organism. Its cells reproduce by binary division. Their contents are the cytoplasm and the nucleus, which are all contained in an outside membrane. The bulk of the cytoplasm consists of water, salts and organic molecules. It also contains discrete functional components, including ribosomes, which are important to protein and energy production. The nucleus is confined within the cell by a nuclear envelope or membrane. The nuclear envelope is porous such that certain molecules may pass between it and the cytoplasm. The nucleus contains DNA and RNA. The DNA molecule comprises arrangements of hydrogen, oxygen, carbon, nitrogen and phosphorus atoms. Those arrangements, called "nucleotides", are linked end-to-end. The sequence of the nucleotides incorporates a "genetic code" that defines the growth, development, maintenance and reproduction of the human body. Each nucleotide comprises a group of atoms including nitrogen, called a nitrogenous base, coupled with a phosphate group and a sugar group. There are four kinds of nitrogenous bases in DNA: adenine, guanine, cytosine and thymine designated A, G, C and T respectively. Those letters may be regarded as the alphabet of the genetic code. The sugar and phosphate group components of each nucleotide make up the backbone of the DNA chain. Each nitrogenous base is covalently bonded to the sugar group. Covalent bonding is an electrostatic attraction which binds atoms together when they share unpaired electrons. Covalent bonds run from the fifth carbon atom of the sugar group of one nucleotide to the third carbon atom of the phosphate group of the adjacent nucleotide. One end of each DNA chain has a free fifth carbon on the sugar group. The other end has a free third carbon on the phosphate group. DNA chains are accorded, by convention, a directionality from the 5' end to the 3' end. DNA is almost always found in the cell nucleus as two polynucleotide chains intertwined to form a double helix. The two chains or strands are oriented Bell in opposite directions. One, which runs from 5' to 3', is known as the "sense" or "coding" strand. The other, running from 3' to 5', is known as the "anti-sense" or "non-coding" strand. The sugar and phosphate groups form the outside of the double helix, while the nitrogenous bases are arranged on the inside in pairs perpendicular to the axis of the double helix so that the base G bonds with the base C and the base A bonds with the base T. The bonds are hydrogen bonds87. DNA molecules within the cell nucleus are wrapped around spooling proteins called histones to form complexes known as nucleosomes. The nucleosomes are stacked on top of each other to form chromatin fibres organised into chromosomes. RNA mediates the transmission of the information contained in the genetic code for the purposes of the production of proteins. It has some similarity to DNA. It has the nitrogenous bases A, G and C, but its fourth base is uracil ("U") instead of thymine. It is single stranded and shorter than DNA. Its nitrogenous bases are exposed. Two important kinds of RNA are messenger RNA ("mRNA") and pre-messenger RNA ("pre-mRNA"). Genes A gene is a functional unit of the DNA molecule which provides a chemical blueprint or code used by other parts of the human cell to produce a particular protein. A gene is said to be "expressed" when it results in the synthesis of a protein within the cell. The sequences of the bases in DNA comprising genes are called "exons". They may include "non-coding" or "untranslated" regulatory regions. Those regulatory regions occur at the 5' and 3' ends of the gene. Other parts of the DNA chain which do not code for proteins and do not form part of the untranslated region of a gene are called "introns". Introns comprise about 25 per cent of the human genome. The term "genome" refers to the entirety of the DNA sequence within an organism. The human genome consists of about 25,000 genes arranged onto chromosomes and comprises approximately 3.2 billion nucleotides. Absent mutation all nuclear cells in an individual human body contain the same genomic sequences in their DNA. 87 A hydrogen bond is "a weak bond formed by the electrostatic attraction between a strongly electronegative atom and a hydrogen atom covalently linked to another electronegative atom": Shorter Oxford English Dictionary, 5th ed (2002), vol 1 at 1295, "hydrogen bond". Bell Proteins are sequences of amino acids linked together by what are called peptide bonds on a phosphate backbone. They are referred to as "polypeptides". Each protein has its own unique amino acid sequence. There are 20 different amino acids known in nature. Some proteins act as enzymes, others generate movement, others form structures and others regulate cell division. When the DNA which encodes those regulatory proteins is mutated or damaged, uncontrolled cell division, characteristic of cancer, can occur. The so-called "genetic code" consists of groups of three nucleotides, called "codons" or "triplets", each coding for an amino acid. There are a number of different DNA or RNA sequences that can code for the same protein. The sequences of codons that represent specific amino acid sequences ultimately will determine the particular protein to be synthesised in the cell. Genes expressing proteins Gene expression, by which a cell produces protein, begins within the nucleus of the cell with the "transcription" process. A portion of the DNA nucleotide sequence of a gene is copied onto an RNA nucleotide sequence. A single strand of the DNA double helix synthesises a complementary strand of nascent mRNA, known as pre-mRNA. Pre-mRNA contains both the exonic and intronic sequences of the genes transcribed from the DNA. The nucleotide sequence of the strand of pre-mRNA transcribed from the DNA template strand will correspond to the non-template (the "sense" or "coding") DNA strand. During transcription, the 5' end of the transcribed sequence in the pre-mRNA is modified by the addition of a "cap" to protect the molecule from enzymatic degradation and to assist in transport of the mature mRNA molecule from the nucleus to the cytoplasm. The 3' end of the sequence is also modified by addition of a string of adenosine bases, known as the "poly-A tail". The introns are then removed and the exons joined together by an enzyme complex called a "spliceosome". The result is an mRNA molecule comprising a complementary sequence of the exons found in the DNA strand from which they were transcribed. The mRNA molecule moves through the nuclear envelope into the cytoplasm. Its nucleotide sequence is used as a template in a process of "translation" resulting in the manufacture of the polypeptide chains comprising the relevant protein. That manufacture takes place in the ribosomes located in the cytoplasm. The RNA sequence is scanned in groups of codons which each define a specific amino acid. Depending upon which strand of DNA is read and the start site for its transcription and translation, different mRNAs and different proteins can result from the same stretch of DNA. It is also possible that a single Bell stretch of DNA may be transcribed in two different directions, resulting in two different proteins with different amino acid sequences. The notion of one gene per protein is now understood to be simplistic. The production of a protein or RNA from a gene is tightly regulated by other genes and DNA sequences and regulatory proteins, including histones. Together they are colloquially described as "the committee". The committee regulates whether a polypeptide is expressed in a cell, when, in what form and in what quantity. Those associated molecules are essential for the operation of DNA inside the cell. The BRCA1 gene in DNA, which is relevant to the patent in suit, can be transcribed and translated into a number of different mRNA sequences and proteins. Inside the cell, the genome beyond the BRCA1 gene controls the expression of proteins. Isolation of nucleic acids An isolated nucleic acid bearing a DNA sequence is a sequence of nucleotides derived from a DNA molecule that has been removed from its normal cellular environment. The means by which that can be done may be summarised as follows: DNA is obtained from cells removed from a sample of tissue or blood extracted from an individual. The tissue sample is broken into clumps of cells or individual cells using enzymes or chemicals suitable for that purpose. Contents of the nucleus, including DNA and RNA, can be released into a free-floating liquid suspension by bursting the cell membrane or nuclear membrane using ultrasonic pressure waves or simple grinding. Proteins associated with the DNA, including histones, can then be degraded by the addition of enzymes known as proteases. They destroy the nucleosomes but do not eliminate all of the protein associated with the DNA. The addition of a high salt solution precipitates the degraded proteins which are then separated from the DNA using a well-known chemical procedure that takes advantage of the fact that the proteins are soluble in phenol, while DNA and RNA are not. The remaining liquid suspension is subject to centrifugation which places DNA and RNA in the interface between phenol and chloroform. The RNA can then be broken down by enzymes, leaving only the purified DNA which can be precipitated into a solid state. Bell The isolation of the nucleic acid by extraction and purification from a cell involves: breaking the hydrogen bonds between nitrogen bases; and breaking some of the covalent bonds in the sugar phosphate backbone. There is also a way in which a "synthetic human DNA" can be created with the use of mRNA as a template. The product is called "complementary DNA" ("cDNA"). The technique is called "reverse transcription" as it involves the use of an enzyme, "reverse transcriptase", not naturally found in humans. The result of reverse transcription is the creation of an RNA-cDNA hybrid molecule which can be converted to a double stranded DNA molecule by more than one means. Although mRNA is less stable than DNA it can, like DNA, be isolated from the natural environment of the cell. The hybrid molecule, being more stable, is better suited than the mRNA molecule for use in molecular biology applications. Isolated nucleic acids An isolated nucleic acid, lacking histones and regulatory proteins, is not part of the complex three-dimensional structure of which DNA in the cell nucleus is part. That structure is an essential element in the transcription process. Without it the genome would not fit within the cell nucleus. The BRCA1 gene comprises about 100,000 bases within the 3.2 billion base pair genome. It is exposed to the actions of the whole of the genome controlling a complex and interdependent network of DNA sequences, proteins and mRNA. The isolated nucleic acid referred to in Claims 1 to 3 of the Patent is separated from those influences. It is not exposed to any of the regulatory mechanisms which affect the way in which nucleic acid within the cell produces protein. The isolated nucleic acid, removed from its cellular environment, cannot produce a polypeptide. It is inert, although capable of being artificially manipulated to produce a protein. In order to effect transcription of isolated DNA it is necessary to add primers, chemical buffers, RNA polymerases and nucleotides. Even so the isolated DNA can only be transcribed into a single mRNA transcript. In a nucleus as part of the genome, the BRCA1 gene can be transcribed into a number of different isoforms. Some intronic mutations in BRCA1 influence breast cancer by their effects on RNA splicing. Bell The uses of isolated nucleic acids Isolated nucleic acid has properties useful in experimental circumstances which are not possessed by nucleic acid in the native state. Once isolated and purified, the nucleic acid sequence can be determined using a number of different laboratory techniques. The sequence of nucleotides of DNA, or any part of it, cannot be determined in situ in the cell. The isolated nucleic acid can be used in a number of ways as a probe to determine whether particular genes are being expressed in tissues. It can be cloned into vectors such as plasmids, which can be used to infect bacterial host cells and to take advantage of their transcriptional and translational machinery to produce "recombinant protein". It can also be artificially mutated or otherwise manipulated to produce novel genetic sequences and potentially recombinant proteins. Isolated nucleic acid can also be used in gene therapy, typically by incorporating it into a viral vector and introducing it into the cells of a patient with a defective copy of the gene in the patient's nucleic acid sequence. Isolated nucleic acid has application in genetic testing, where the sequence of the isolated sample is compared to a normal reference sequence. The reference sequence may be one of many developed by professional bodies or government agencies in the United States or Europe. The purpose of genetic testing is to determine what variations, if any, are present in a specific region of DNA and their clinical significance. This points up the matter which is the subject of a concession by Myriad namely that the utility of what is here claimed lies in the sequence. In BRCA1 genetic testing, the patient's DNA is extracted and the relevant site sequence is determined88. That is compared with the sequence for normal BRCA1, thus enabling the identification of mutations or polymorphisms in the patient's DNA. Absent such a genetic test it would not be possible to know whether an individual or family carries normal or mutated BRCA1. DNA in the natural state cannot be used to identify sequence variations in defined genes for genetic testing purposes. The patent specification The "FIELD OF THE INVENTION" is defined, under that heading, as relating to "methods and materials used to isolate and detect a human breast and 88 For a description of the extraction and amplification process to locate the relevant site sequence, see the reasons of Gordon J at [210]–[213]. Bell ovarian cancer predisposing gene (BRCA1), some mutant alleles of which cause susceptibility to cancer, in particular, breast and ovarian cancer." The "BACKGROUND OF THE INVENTION" refers to "[i]ntense efforts to isolate the BRCA1 gene [which] have proceeded since it was first mapped in 1990". The problem to which the invention as claimed was at least in part directed is stated: "Identification of a breast cancer susceptibility locus would permit the early detection of susceptible individuals and greatly increase our ability to understand the initial steps which lead to cancer. As susceptibility loci are often altered during tumor progression, cloning these genes could also be important in the development of better diagnostic and prognostic products, as well as better cancer therapies." The "SUMMARY OF THE INVENTION" repeats in substance the first paragraph of the section headed "FIELD OF THE INVENTION". The first paragraph of the "DETAILED DESCRIPTION OF THE INVENTION" repeats in substance the first paragraph of the "FIELD OF THE INVENTION". Relevantly to the three impugned claims, the next paragraph states: "The present invention provides an isolated polynucleotide comprising all, or a portion of the BRCA1 locus or of a mutated BRCA1 locus, preferably at least eight bases and not more than about 100 kb in length. Such polynucleotides may be antisense polynucleotides. The present invention also provides a recombinant construct comprising such an isolated polynucleotide, for example, a recombinant construct suitable for expression in a transformed host cell." The range of lengths of the mutant BRCA1 locus does not define the range of lengths of the isolated nucleic acids claimed in the invention. That is made clear from the further statement in the specification that the DNA sequences usually comprise at least about five codons, with 15 nucleotides, more usually at least about 7-15 codons and, most preferably, at least about 35 codons. One or more introns may also be present. This number of nucleotides is said to be usually about the minimal length required for a successful probe that would hybridise specifically with a BRCA1-encoding sequence. There are a number of definitions. The definition of "isolated nucleic acid" has already been discussed. Others appearing in the specification include "encode" and "BRCA1 nucleic acids": Bell "'Encode'. A polynucleotide is said to 'encode' a polypeptide if, in its native state or when manipulated by methods well known to those skilled in the art, it can be transcribed and/or translated to produce the mRNA for and/or the polypeptide or a fragment thereof. The anti-sense strand is the complement of such a nucleic acid, and the encoding sequence can be deduced therefrom." "'BRCA1 Locus', 'BRCA1 Gene', 'BRCA1 Nucleic Acids' or 'BRCA1 Polynucleotide' each refer to polynucleotides, all of which are in the BRCA1 region, that are likely to be expressed in normal tissue, certain alleles of which predispose an individual to develop breast, ovarian, colorectal and prostate cancers ..." Those terms, applied to a nucleic acid, refer to a nucleic acid which encodes a BRCA1 polypeptide fragment, homolog or variant, including protein fusions or deletions. It is then said: from, or substantially similar "The nucleic acids of the present invention will possess a sequence which is either derived to a natural BRCA1-encoding gene or one having substantial homology with a natural BRCA1-encoding gene or a portion thereof. The coding sequence for a BRCA1 polypeptide is shown in SEQ ID NO:1, with the amino acid sequence shown in SEQ ID NO:2." The specification goes on: "The polynucleotide compositions of this invention include RNA, cDNA, genomic DNA, synthetic forms, and mixed polymers, both sense and antisense strands, and may be chemically or biochemically modified or may contain non-natural or derivatized nucleotide bases, as will be readily appreciated by those skilled in the art." There is no limitation, express or implied, in the claims or derived from the specification, upon the class of processes which may yield the claimed products. The claims, as counsel for Myriad accepted, cover "a very wide number" of chemical compounds. As described in the specification, the invention includes isolated polynucleotides ranging in length from 8 bases to 100,000 bases. Myriad's submission that Claims 1 to 3 relate to chemical compounds raises a question about their chemical formulae. The formula for any member of the class would depend upon the number of bases in the isolate and whether, in addition to the BRCA1 sequence, it contained introns or other non-coding regions. It would also depend upon which of the specified mutations or Bell polymorphisms appear in the isolate. No upper limit on the number of isolated nucleic acids in the classes covered by the impugned claims was identified. The specification explains that a combination of sequences obtained from cDNA clones, hybrid selection sequences and amplified PCR products allowed construction of a composite full length sequence for BRCA1 cDNA designated SEQ ID No:1. That sequence description, as shown in the specification, sets out nucleotides and codons which are numbered sequentially. The amino acid encoded by each codon is shown. The bases comprising the sequence are A, T, C and G, which are found in DNA. The corresponding RNA sequences can be inferred by substituting U for T where T appears in SEQ ID No:1. It contains only exons and the regulatory non-coding sequences mentioned earlier. the specification Tables also set out identify mutations and polymorphisms by reference to SEQ ID No:1. Predisposing mutations found in the BRCA1 genes of various patients are set out in Tables 12, 12A and 14, recorded as variations of the coding sequence in SEQ ID No:1. Table 18 identifies "Polymorphisms in BRCA1 Genomic DNA Exons". They are the relevant mutations and polymorphisms mentioned in the claims. The primary judge observed that the disputed claims do not say anything about the length of the polynucleotide chains with which they are concerned. His Honour said89: "In this regard, there is nothing to suggest either in the claims themselves or in the body of the specification that a complete molecule of DNA as originally found on chromosome 17 that has been isolated, and that includes one or more of the relevant mutations, would be outside the scope of the disputed claims." In upholding a notice of contention on the appeal, the Full Court interpreted that statement as suggesting that Claim 1 covered the gene comprising the nucleic acid sequence as it exists in nature90. Their Honours quoted Lourie J in the United States Court of Appeals for the Federal Circuit91 in a decision 89 (2013) 99 IPR 567 at 581 [72]. 90 (2014) 224 FCR 479 at 517 [213]. 91 (2014) 224 FCR 479 at 517 [212] quoting Association for Molecular Pathology v United States Patent and Trademark Office 689 F 3d 1303 (2012). Bell subsequently overturned by the Supreme Court of the United States92. Lourie J said93: "The ability to visualize a DNA molecule through a microscope, or by any other means, when it is bonded to other genetic material [and in a particular regulatory environment] is worlds apart from possessing an isolated DNA molecule that is in hand and usable." It is not at all clear that in saying what he did, the primary judge was disregarding the setting and functional differences between isolates and the DNA molecule in its cellular environment. In any event, his Honour went on to say, in a passage relied upon by Myriad, that94: "naturally occurring DNA and RNA as they exist in cells are not within the scope of any of the disputed claims and could never, at least not until they had been isolated, result in the infringement of any such claim." Nevertheless, the class of isolated nucleic acids covered by the claims is large and diverse. A number of sections of the specification relate to methods for the use of nucleic acids in various ways and the preparation of recombinant or chemically synthesised nucleic acids and vectors. The claims in the patent relating to those matters are not in issue. Nor is there any question about the utility of the applications of isolated nucleic acids reflected in those undisputed claims. Isolated nucleic acid — composite or extract? There is no claim in the patent for the process of isolation nor could there be as no new process is disclosed. However, in answer to questions from the Court, counsel for Myriad focussed upon an aspect of the evidence about isolation processes in order to deflect a suggestion that an isolated nucleic acid can be viewed as a "piece" of naturally occurring DNA or RNA. He contended that isolation involved alteration of the order of the relevant nucleotides and their reassembly in the order in which they had been placed in the cell. That 92 Association for Molecular Pathology v Myriad Genetics Inc 186 L Ed 2d 124 93 689 F 3d 1303 at 1331 (2012). 94 (2013) 99 IPR 567 at 582 [77]. Bell proposition was supported by reference to the evidence of the expert witness, Dr Suthers. Dr Suthers had agreed that a conventional way of extracting a gene sequence, as distinct from synthesising it, would involve breaking the hydrogen bonds between the bases and breaking some covalent bonds to release the extract. He also agreed that in the mid-1990s a 100,000 base sequence would be broken up into smaller pieces which could then be amplified and stitched together physically or "conceptually". The preceding argument has some similarity to Myriad's submission to the primary judge that Dr Suthers' evidence supported the proposition that there would be at least some breaking of the covalent cells in the sugar phosphate backbone as a result of the isolation process95. The primary judge said96: "It is not apparent to me that every isolated DNA sequence within the scope of the claims must have had at least some covalent bonds broken as a result of the isolation process. Nor would I imply any such requirement into the claims merely because, in Dr Suther's experience, this is what occurs. To interpret the disputed claims in this way would require me to impose an impermissible gloss upon the words of the claim." Nor, as previously noted, are the claims subject to any process-based limitation involving the breaking up and physical stitching together of the sequences comprising the isolated nucleic acids which are the products the subject of the claims. The "conceptual" stitching together, which may be regarded as the ordered compilation of information defining the relevant sequence, falls outside the claims entirely. The claims encompass molecules comprising isolated nucleic acids containing coding nucleotides arranged in the same sequence as appears in the DNA from which they were derived, whether or not introns and other non-coding sections have been removed from the relevant stretch of that DNA. 95 (2013) 99 IPR 567 at 581 [73]. 96 (2013) 99 IPR 567 at 581 [74]. Bell The primary judge's decision For the primary judge, the issue of patentability turned on97: "whether an isolated nucleic acid, which may be assumed to have precisely the same chemical composition and structure as that found in the cells of some human beings, constitutes an artificial state of affairs in the sense those words should be understood in the present context." That approach, as observed earlier, involves application of the verbal formula in NRDC and the apparent assumption, no doubt derived from the way the case was framed before his Honour, that it was a sufficient condition of inherent patentability. His Honour observed that isolated nucleic acids do not exist inside the cell98 and their isolation required "immense research and intellectual effort."99 Despite his Honour's reliance upon the "artificial state of affairs" formula, the influence of wider purposive considerations was apparent in his judgment, including the observation that100: "It would lead to very odd results if a person whose skill and effort culminated in the isolation of a micro-organism (a fortiori, an isolated DNA sequence) could not be independently rewarded by the grant of a patent because the isolated micro-organism, no matter how practically useful or economically significant, was held to be inherently non- patentable." His Honour cited the practice of the Australian Patent Office101, and the rejection by Parliament of proposed amendments precluding gene sequences from patentability102. Those matters led to no firm conclusion beyond a finding 97 (2013) 99 IPR 567 at 589 [106]. 98 (2013) 99 IPR 567 at 589 [108]. 99 (2013) 99 IPR 567 at 589 [109]. 100 (2013) 99 IPR 567 at 589–590 [109]. 101 (2013) 99 IPR 567 at 590–591 [113]–[114]. 102 (2013) 99 IPR 567 at 593 [118]–[122]. Bell that it was not the intention of Parliament to deal with the issue of gene patenting by way of express exclusion but to leave it to the courts to apply the law as settled in NRDC and other relevant authorities103. His Honour referred to patent laws104 of the European Union as permitting patentability of gene sequences105. It is difficult to discern how those matters could have been related to a simple categorical application of the "artificial state of affairs" criterion. Their relevance can only have been to wider considerations of the kind discussed earlier in these reasons although how they were used was not apparent from his Honour's reasons. In the event, his Honour concluded that each of the disputed claims was to "a manner of manufacture as that expression should now be understood."106 The decision of the Full Court The Full Court described the impugned claims as claims "for a product set within a context of invention described in the specification: a context of development, through research and work, of the knowledge of the mutations or polymorphisms in question, and of the finding of the gene in question."107 Their Honours emphasised the character of the claims as relating to "the nucleic acid as isolated from the cell" and differences between the claimed product and the "naturally occurring product"108. Their Honours referred at some length to the decision of the Supreme Court of the United States in Association for Molecular Pathology v Myriad 103 (2013) 99 IPR 567 at 594 [123]. 104 His Honour also referred to the decision of the United States Court of Appeals for the Federal Circuit in Association for Molecular Pathology v United States Patent and Trademark Office 689 F 3d 1303 (2012) which held that an analogous claim was patentable but derived no assistance from that decision which was reversed by the Supreme Court of the United States as discussed in the next section of these reasons: see (2013) 99 IPR 567 at 595–596 [129]–[135]. 105 (2013) 99 IPR 567 at 594 [125]–[128]. 106 (2013) 99 IPR 567 at 596 [137]. 107 (2014) 224 FCR 479 at 482 [7]. 108 (2014) 224 FCR 479 at 517 [212]. Bell Genetics Inc109. That decision was concerned with the application of 35 USC §101 to claims differently expressed from those impugned in this case110: An isolated DNA coding for a BRCA1 polypeptide, said polypeptide having the amino acid sequence set forth in SEQ ID No:2. The isolated DNA of claim 1 wherein said DNA has the nucleotide sequence set forth in SEQ ID No:1 ("the Myriad claims"). The Supreme Court had accepted that the creation of a cDNA sequence from mRNA resulted in an exon-only molecule that was not naturally occurring and was therefore patentable111. The Myriad claims, however, fell squarely within a "law of nature" exception. While Myriad had discovered the location of the BRCA1 gene that discovery did not lend to the BRCA1 gene the character of a new composition of matter within 35 USC §101112. The Full Court preferred the reasoning of the United States Court of Appeals for the Federal Circuit in Association for Molecular Pathology v United States Patent and Trademark Office113, which had been overturned by the Supreme Court. Their Honours characterised that reasoning as based on an analysis of the products as products and not of the information that they contained114. They held that, consistently with NRDC and Australian law, their analysis should focus on differences in structure and function effected by the intervention of man and not on the similarities115. Outside the logical framework which they had defined for their analysis, their Honours adverted to the primary judge's consideration of Australian Patent Office practice, the ALRC Report, and the legislative history. They also referred 109 186 L Ed 2d 124 (2013). 110 186 L Ed 2d 124 at 130 (2013). 111 186 L Ed 2d 124 at 137 (2013). 112 186 L Ed 2d 124 at 135 (2013). 113 689 F 3d 1303 (2012). 114 (2014) 224 FCR 479 at 508 [155]. 115 (2014) 224 FCR 479 at 508 [155]. Bell to the Executive Government's response to the ALRC Report, including its acceptance of the recommendation that the Act not be amended to exclude genetic materials and technologies from patentable subject matter116. They said117: "While these legislative matters do not affect what constitutes patentable subject matter under the rubric of 'manner of manufacture', Parliament has considered, and has specifically declined, to exclude purified and isolated gene sequences from the scope of patentable subject matter." Before the Full Court, Ms D'Arcy submitted that isolated nucleic acid was not materially different to cellular nucleic acid and that naturally occurring DNA and RNA, even in isolated form, are products of nature that could not form the basis of a valid patent. Myriad, on the other hand, contended that its claims were for a product consisting of an artificial state of affairs providing a new and useful effect of economic significance, and that isolated nucleic acid differed from the nucleic acid found in a human cell chemically, structurally and functionally118. As previously observed, in its concluding paragraphs, the Full Court eschewed the relevance of policy, moral or social reasons for the exclusion of patents for gene sequences119. Like the majority in Chakrabarty, their Honours said of those considerations120: "It is not a matter for the court, but for Parliament to decide. Parliament has considered the question of the patentability of gene sequences and has chosen not to exclude them but to make amendments to the Act to address, in part, the balance between the benefits of the patent system and the incentive thereby created, and the restriction on, for example, subsequent research." 116 (2014) 224 FCR 479 at 508–509 [156]–[160]. 117 (2014) 224 FCR 479 at 509 [161]. 118 (2014) 224 FCR 479 at 509 [162]–[163]. 119 (2014) 224 FCR 479 at 516 [205]. 120 (2014) 224 FCR 479 at 516 [205]. Bell They characterised the subject matter of the claims as121: a compound, not information; an isolated nucleic acid, which is taken out of the genome and removed from the cell and is unable to be the subject of cellular processes of transcription and translation; containing the code for a mutant or polymorphic protein; and containing a sequence identified by comparison with tables created following extensive research describing the location of the mutations or polymorphisms in DNA. It was common ground before the Full Court that the isolated nucleic acids had valuable economic uses122. In their reasons, their Honours said123: "The isolation of the nucleic acid also leads to an economically useful result — in this case, the treatment of breast and ovarian cancers. This is surely what was contemplated by a manner of new manufacture in the Statute of Monopolies." The Full Court concluded that the isolated nucleic acids, including cDNA, had resulted in an artificially created state of affairs for economic benefit and that the claimed product was properly the subject of letters patent124. The passage quoted in the preceding paragraph, which appears to refer to the process of "isolation", does not disclose a pathway to patentability of the invention as described in Claims 1 to 3. That is so even if they were to be characterised as product claims simpliciter, a characterisation which, as appears below, we do not accept. The economic significance necessary to the patentability of an "artificially created state of affairs" in the sense used in NRDC is not demonstrated by stating that the artificially created state of affairs is a step 121 (2014) 224 FCR 479 at 516–517 [210]. 122 (2014) 224 FCR 479 at 510 [170]. 123 (2014) 224 FCR 479 at 517 [214]. 124 (2014) 224 FCR 479 at 518 [218]. Bell along the way to a process or method itself claimed as an artificially created state of affairs of economic significance. Conclusions Myriad submitted, as the Full Court had held, that its claims are for a product. To assess patentability, it said, they must be construed in the same way as any other claim for an invention which is a product. The product was "a chemical compound [which] has no counterpart in nature." That characterisation of the claims superficially accords with their form. The approach taken by the Full Court and urged by Myriad involves an apparently straightforward characterisation based on the formal terms of the patent identifying the isolated nucleic acids as products which, notwithstanding their derivation from naturally occurring DNA, have been brought into existence by human artifice and, in that sense, "made". So characterised, and without further inquiry into the breadth of the claims or their substance, they could be seen to fall comfortably within principles attracting characterisation as a manner of manufacture. None of the purposive or policy factors mentioned earlier in these reasons need be considered on that approach. Identification of the subject matter of the claims as a class of chemical compounds is the premise upon which the Full Court's conclusion is based. It is a premise which, with respect, elevates form over substance to the detriment of the developmental function entrusted to the Court as explained in NRDC and reflected in the continuing use of the "manner of manufacture" formula in s 18(1)(a) of the Act. The code in the invention as claimed refers to the sequence of nucleotides which, in a cellular environment, can ultimately be translated into the BRCA1 polypeptide. That sequence can properly be described as "information", the ordinary meaning of which includes125: "Without necessary relation to a recipient: that which inheres in or is represented by a particular arrangement, sequence, or set, that may be stored in, transferred by, and responded to by inanimate things". Used in that sense, the information stored in the sequence of nucleotides coding for the mutated or polymorphic BRCA1 polypeptide is the same information as 125 Shorter Oxford English Dictionary, 5th ed (2002), vol 1 at 1371, "information", sense 3(c). Bell that contained in the DNA of the person from which the nucleic acid was isolated. It is the existence of that information which is an essential element of the invention as claimed. The product is the medium in which that information resides. That characteristic also attaches to cDNA, covered by the claims, which is synthesised but replicates a naturally occurring sequence of exons. Ms D'Arcy submitted that none of the chemical, structural or functional differences between isolated nucleic acids and nucleic acids in the cellular environment, relied upon by Myriad, plays any part in the definition of the invention as claimed in each of the claims. She invoked the observation of the plurality opinion of the Supreme Court of the United States in Myriad directed to a common feature of the claims in issue in that case and the claims in issue in this case126: "Myriad's claims are simply not expressed in terms of chemical composition, nor do they rely in any way on the chemical changes that result from the isolation of a particular section of DNA. Instead, the claims understandably focus on the genetic information encoded in the That characterisation, so far as it emphasises the focus of the claims on genetic information, is applicable to the claims in this case and, contrary to the view of the Full Court, should be accepted. Ms D'Arcy also engaged with the finding by the Full Court that the isolated nucleic acids were patentable as "an artificially created state of affairs". Engaging with that criterion in this case places the question of patentability in too narrow a frame. It invites debates about the application of categories such as "products of nature" versus "artificially created products" which may be distracting from the central issue, that is whether an essential integer of the claims, the genetic information, takes them outside the category of that which can be "made". But even if the criterion of an "artificially created state of affairs" were to define the area of discourse in this case, the fact of the existence of the requisite mutations or polymorphisms is a matter of chance. It is not something "made". It is not "artificially created". There are perhaps two ways of looking at the role of genetic information in characterising the subject matter of the claims. One way is to say that the chemical formula of any given isolated nucleic acid is defined, in part, by the 126 186 L Ed 2d 124 at 136 (2013). Bell sequence of nucleotides which it reproduces and, in that sense, is defined by the information embodied in that sequence. Another way is to say that the particular chemical compound embodies and conveys the information. The latter approach gives the priority to the informational aspect which its importance to the utility of the claimed invention warrants. When proper regard is paid to their emphasis on genetic information, the subject matter of the claims lies at the boundaries of the concept of "manner of manufacture". That it does lie at the boundaries is further evidenced by the odd consequence that if the claims are properly the subject of a patent, the patent could be infringed without the infringer being aware of that fact. That consequence coupled with the very large, indeed unquantified size of the relevant class of isolated nucleic acids, all of which bear the requisite information, raises the risk of a chilling effect upon legitimate innovative activity outside the formal boundaries of the monopoly and risks creating a penumbral de facto monopoly impeding the activities of legitimate improvers and inventors127. Although it may be said in a formal sense that the invention as claimed, referring to isolated nucleic acids, embodies a product created by human action, that is not sufficient to support its characterisation as a manner of manufacture. The substance of the invention as claimed and the considerations flowing from its substance militate against that characterisation. To include it within the scope of a "manner of manufacture" involves an extension of that concept, which is not appropriate for judicial determination. Further, to include this class of claim within that concept would not contribute to coherence in the law as was the case in Apotex. Nor do Australia's international obligations and the differently framed patent laws of other jurisdictions, which were referred to earlier in these reasons, support the conclusion that this class of claim should fall within the concept. The invention as claimed in Claims 1 to 3 does not meet the requirement of s 18(1)(a) and the appeal should be allowed. The following orders should be made: Appeal allowed. Set aside paragraph 1 of the order of the Full Court of the Federal Court of Australia made on 5 September 2014 and, in its place, order that: 127 See also the reasons of Gordon J at [259]–[264] where her Honour discusses the consequences of inhibiting researchers and medical practitioners isolating and testing the BRCA1 gene for other unrelated purposes if the claims are valid. Bell the appeal be allowed; and paragraph 1 of the order of Nicholas J made on 15 February 2013 be set aside and, in its place, order that claims 1, 2 and 3 of Australian Patent No 686004 be revoked. Nettle GAGELER AND NETTLE JJ. In this matter, the question for the judge at first instance (Nicholas J) and on appeal to the Full Court of the Federal Court of Australia (Allsop CJ, Dowsett, Kenny, Bennett and Middleton JJ) was whether "a valid patent may be granted for a claim that covers naturally occurring nucleic acid ... that has been 'isolated'"128. It was held that it may. For the reasons which follow, the appeal to this Court should be allowed and the claims should be held to be invalid. The patent The claims of the patent that were in suit were as follows129: "1. An isolated nucleic acid coding for a mutant or polymorphic BRCA1 polypeptide, said nucleic acid containing in comparison to the BRCA1 polypeptide encoding sequence set forth in SEQ.ID No:1 one or more mutations or polymorphisms selected from the the mutations set forth polymorphisms set forth in Tables 18 and 19[130]. in Tables 12, 12A and 14 and An isolated nucleic acid as claimed in claim 1 which is a DNA coding for a mutant BRCA1 polypeptide, said DNA containing in comparison to the BRCA1 polypeptide encoding sequence set forth in SEQ.ID No:1 one or more mutations set forth in Tables 12, 12A and 14. An isolated nucleic acid as claimed in claim 1 which is a DNA coding for a polymorphic BRCA1 polypeptide, said DNA containing in comparison to the BRCA1 polypeptide encoding sequence set forth in SEQ.ID No:1 one or more polymorphisms set forth in Tables 18 and 19." It is common ground that the validity of claims 2 and 3 depended on the validity of claim 1. 128 Cancer Voices Australia v Myriad Genetics Inc (2013) 99 IPR 567 at 568 [1]; [2013] FCA 65; see also D'Arcy v Myriad Genetics Inc (2014) 224 FCR 479 at 482 129 The remainder of the claims, which were not in suit, are summarised in the reasons for judgment of Gordon J at [191]. 130 As to the references to Table 19, see the reasons for judgment of Gordon J at Nettle refers "Nucleic acid" two kinds of chemical compound: deoxyribonucleic acid (DNA) and ribonucleic acid (RNA). DNA is the primary source of genetic information in a human cell. DNA is comprised of "nucleotides". Each nucleotide includes a nitrogenous base, of which there are four kinds (abbreviated as A, G, C and T). Nucleotides are linked end-to-end by covalent bonds to form a polynucleotide chain. The bases protrude from the chain at a perpendicular angle. In the nucleus of a cell, DNA almost always exists as a double helix formed by the intertwining of two polynucleotide chains with the bases lying on the inside of the helix, with each base forming a hydrogen bond with the base on the opposing chain. The sequence of nucleotides in DNA encodes information which is used by the cell to produce, and regulate the production of, proteins. "Polypeptides" are proteins – large, three-dimensional molecules comprised of sequences of amino acids linked by peptide bonds. The mechanism by which proteins are produced is complex, but for present purposes it is sufficient to state that various three-base sequences of nucleotides in DNA correspond with the production of different kinds of amino acids. The sequence of nucleotides dictates the kind and sequence of amino acids produced and thus the composition of the resulting protein. For example, the protein in humans known as "BRCA1" is encoded by a DNA sequence which consists of approximately 6,000 nucleotides in a highly specific sequence. In its natural state, the sequence coding for any particular polypeptide or protein is present as a series of "fragments" along the DNA molecular chain. Each fragment is called an "exon" and each exon is separated from its adjacent exons by sections of non-coding DNA called "introns". Although the introns do not encode a polypeptide or protein, they contain information which helps regulate and execute the cell's response to the information encoded in the exon. The 6,000 nucleotides which encode the BRCA1 polypeptide or protein are present as 24 exons separated by introns. The word "gene" is used in a number of senses. For present purposes, the meaning which is relevant is the unit of DNA that encodes a specific protein. Thus, the BRCA1 gene consists of the 6,000 nucleotides comprised in 24 exons which encode the BRCA1 polypeptide or protein. DNA is "packaged" within the nucleus of human cells as follows. DNA strands are wound around proteins called histones to form nucleosomes, which, in turn, are stacked on top of each other to form chromatin fibres. Chromatin fibres are organised into chromosomes. Production of proteins in a cell involves complex interactions between DNA and other factors together called the "committee", which includes the histones around which the DNA is wrapped; "regulatory proteins" present in the cell nucleus; other segments of DNA; and the three-dimensional structure of the DNA as packaged in the nucleus. The ultimate Nettle composition and structure of the proteins capable of being produced by a particular gene thus depend on several factors in addition to the sequence of nucleotides in the gene. At conception, every human being inherits a half set of his or her mother's genetic information, consisting of 23 chains of DNA with 20,000 genes, and also a half set of his or her father's genetic information, consisting of another 23 chains of DNA with 20,000 genes. During gestation, that information is conveyed into every cell in the human being's body and thus results in two instances of every gene. The failure of one instance of a gene to operate normally can place the human being at a high risk of disease. For example, an abnormality in one instance of a woman's BRCA1 gene places her at high genetic risk of developing breast and ovarian cancer, even though the other instance of the BRCA1 gene may be functioning perfectly normally. Medical genetic testing involves testing genetic material taken from a patient, inter alia, to identify abnormalities known to be indicative of disease. For example, genetic testing of a woman's DNA might identify an abnormal BRCA1 gene and thus reveal that she is at high genetic risk of developing breast and ovarian cancer. Treatment regimens are then structured accordingly. Ordinarily, a test report includes details of any identified mutations of known clinical significance and also details of any variations of thus far unknown clinical significance. The latter are recorded to ensure that when and if the variation is later categorised as a mutation of clinical significance the clinician can inform the patient of its consequences. The tools and techniques of genetic testing are long established and well understood by those who are skilled in the science. DNA is the most common target. A sample of DNA is removed from the patient's body and subjected to a range of processes to determine what if any variations there are between the sequence of nucleotides in the sample and what is known to be the normal sequence of nucleotides for the region of DNA the subject of examination. The variations, described as "mutations" or "polymorphisms", usually occur in exons and result in some abnormality in the protein derived from the gene. But they can also occur in introns. Some variations have been found to be present in a large number of patients and, as a result, have been classified as polymorphisms or mutations. There are also a number of other variations in the DNA sequence which have not yet been categorised as polymorphisms or mutations but which it may be expected will be so categorised as expert knowledge of a particular gene and familial genetic patterns continues to develop. The assignment of such variations is a major concern for all laboratories providing medical genetic testing services. Nettle In order to test a sample of naturally occurring DNA, it is necessary to break open human cells to expose the DNA. The goal is to remove the DNA from its normal cellular environment without corrupting the information contained in the DNA. The DNA thus derived from the extraction process contains all of the DNA molecules from many cells, but the specific region of the DNA which is to be tested may account for only a small fraction of the DNA present in the sample. For example, the entire BRCA1 gene (exons plus introns) represents only 0.003 per cent of the total DNA obtained by such processes and the coding sequence of the BRCA1 gene accounts for an even smaller proportion (0.0002 per cent) of the DNA thereby obtained. Because isolated DNA has been removed from its cellular environment, and in particular from adjacent histones which support it and assist in the execution of its instructions, isolated DNA cannot survive unaided or reproduce. Isolated DNA is incapable of producing proteins as it would within the cell unless certain in vitro processes are performed upon it. The isolation of the specific region of the DNA to be tested requires knowledge of the DNA sequences immediately flanking the target fragment. That information is available in medical databases and medical literature in the public domain. The isolation may be effected by a number of standard techniques but most often by making multiple copies of short fragments of the sequence of interest using a chemical process called PCR. Thus, for example, an exon of the BRCA1 gene may be amplified by the PCR process by ascertaining from the published literature the DNA sequence of a short segment (ordinarily between 50 and 100 nucleotides long) and the ends of the two introns which abut the exon. The amplification process is likely to result in millions of copies of the fragment and little other DNA. The DNA sequence of the amplified fragment is then examined by a variety of methods for variations of established clinical significance as recorded in laboratory-based databases and, increasingly, as recorded in international reference sequences developed under the auspices of professional bodies and governmental agencies in the United States and Europe. As was earlier noticed, the sequence is also checked for variations of unknown significance. Isolating DNA from a patient's cells using this process is useful for a number of purposes, including synthesis of recombinant protein, gene therapy, and as a "probe" to investigate whether particular genes are being expressed in a patient. None of these processes can be performed on DNA as it exists within a person's cells. But for the purpose of determining whether a patient possesses a mutation or polymorphism in one or both of her BRCA1 genes that could predispose her to a greater risk of breast or ovarian cancer, the utility of isolating the BRCA1 genes from her cells is that the nucleotide sequences in the isolated Nettle DNA represent the nucleotide sequences found in the BRCA1 genes in each cell of her body. For this purpose, it is essential that the nucleotide sequence in the isolated nucleic acid is identical to that found in the patient's cells; and the processes described above are designed to ensure that this is so. The scope of claim 1 "Isolated nucleic acid" is defined in the patent as nucleic acid "which is substantially separated from other cellular components which naturally accompany a native human sequence or protein". It is, therefore, the sort of isolated nucleic acid which is routinely produced by pathologists when subjecting DNA to genetic testing as previously described. And, as has already been noticed, it may be created by first stripping the DNA from the cell, ordinarily by means of the application of detergents to release the hydrogen bonds which bind the DNA to the cell, and then isolating and amplifying the fragment of interest using the PCR process or something comparable. The reference in claim 1 of the patent to "coding for a mutant or polymorphic BRCA1 polypeptide" is to an isolated nucleic acid molecule which, when compared to the standard reference sequence set forth in SEQ.ID No:1, exhibits one or more of the 54 mutations or polymorphisms delineated in Tables 12, 12A, 14 and 18. The sequence set forth in SEQ.ID No:1 represents the sequence of A, G, C and T nucleotides that is known to code for the BRCA1 polypeptide. It represents the concatenation of the exons of the BRCA1 gene, and thus is presented as an uninterrupted sequence of nucleotides without introns. The 54 mutations and polymorphisms delineated in Tables 12, 12A, 14 and 18 are claimed to be present in women with familial breast cancer and the claim is supported by evidence referred to in the patent that those mutations have been found to disrupt the function of the BRCA1 gene. As such, the 54 mutations and polymorphisms represent some three per cent of more than 1,600 mutations and polymorphisms of the BRCA1 gene which have now been identified as having clinical significance, and the catalogue continues to grow. The only way of determining whether a patient has a mutation or polymorphism of the BRCA1 gene that is of clinical significance is for a pathologist to take a sample of the patient's DNA, isolate it from the cell in the manner already described, isolate and amplify the BRCA1 sequence by use of the PCR process, or by means of another comparable process or an analogous synthetic process, and compare the isolated sequence with known comparators recorded in the laboratory and other databases earlier described. It follows that the only means of determining whether a patient is afflicted by any of the mutations or polymorphisms delineated in Tables 12, 12A, 14 and 18 of the Nettle patent is for a pathologist to take and analyse a sample of the patient's DNA and compare its sequence to the sequences delineated in Tables 12, 12A, 14 and 18. For convenience throughout the remainder of these reasons, the expression "BRCA1 gene" will be used to refer generally to isolated nucleic acid which codes for a BRCA1 polypeptide and the expression "mutated BRCA1 gene" will be used to refer to an isolated nucleic acid which codes for a BRCA1 polypeptide and which, in comparison to the BRCA1 sequence identified in SEQ.ID No:1, exhibits any of the mutations or polymorphisms identified in Tables 12, 12A, 14 and 18. What is the product over which a monopoly is claimed? As noted, claim 1 of the patent is a claim for an isolated nucleic acid which, compared to the known sequence of A, G, C and T nucleotides that codes for the BRCA1 gene, contains one or more of the mutations delineated in Tables 12, 12A and 14, or one or more of the polymorphisms set forth in Table 18 ("the specified mutations and polymorphisms"). Thus, as drafted, claim 1 presents as a claim by the first respondent that it has invented and thus is entitled to a monopoly over a manner of manufacture of isolated nucleic acid exhibiting any of the specified mutations and polymorphisms. For reasons which will appear, it is significant that the first respondent does not and could not claim a monopoly over the process or method of manufacture of isolated nucleic acid per se, or for the process or method of manufacture constituted of the separation and amplification of the BRCA1 gene. As was earlier explained, the concepts and methods of manufacturing isolated nucleic acid and isolating and amplifying particular sequences of nucleic acid are long-established standard testing and diagnostic techniques. Presumably, it is for that reason that claim 1 is limited to a claim for a monopoly over the right to "manufacture" what the first respondent calls the "product" which results from isolating the BRCA1 gene when and if the nucleic acid so isolated contains any of the specified mutations and polymorphisms. Patentable subject matter As at the priority date, a "patentable invention" was defined in s 18(1) of the Patents Act 1990 (Cth) as follows: "Subject to subsection (2), a patentable invention is an invention that, so far as claimed in any claim: is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies; and Nettle (b) when compared with the prior art base as it existed before the priority date of that claim: is novel; and involves an inventive step; and is useful; and (d) was not secretly used in the patent area before the priority date of that claim by, or on behalf of, or with the authority of, the patentee or nominated person or the patentee's or nominated person's predecessor in title to the invention." The essential question in this case is whether the subject matter of claim 1 is an invention that so far as claimed is a manner of manufacture within the meaning of s 6 of the Statute of Monopolies131 as described in s 18(1)(a). As was emphasised in National Research Development Corporation v Commissioner of Patents132 ("NRDC"), in relation to the Patents Act 1952 (Cth), the conception of a manner of manufacture is not limited to physical production but takes its meaning from the whole category under which all grants of patents which may be made in accordance with the developed principles of patent law are to be subsumed: "It is of the first importance to remember always that the Patents Act 1952-1955 (Cth), like its predecessor the Patents Act 1903 (Cth) and corresponding statutes of the United Kingdom (see the Patents, Designs and Trade Marks Act 1883, s 46; the Patents Act 1907, s 93; and the Patents Act 1949, s 101), defines the word 'invention', not by direct explication and in the language of its own day, nor yet by carrying forward the usage of the period in which the Statute of Monopolies was passed, but by reference to the established ambit of s 6 of that Statute. The inquiry which the definition demands is an inquiry into the scope of the permissible subject matter of letters patent and grants of privilege protected by the section. It is an inquiry not into the meaning of a word so much as into the breadth of the concept which the law has developed by its consideration of the text and purpose of the Statute of Monopolies. One may remark that although the Statute spoke of the inventor it nowhere spoke of the invention; all that is nowadays understood by the latter word 131 21 Jac I c 3. 132 (1959) 102 CLR 252 at 269; [1959] HCA 67. Nettle as used in patent law it comprehended in 'new manufactures'. The word 'manufacture' finds a place in the present Act, not as a word intended to reduce a question of patentability to a question of verbal interpretation, but simply as the general title found in the Statute of Monopolies for the whole category under which all grants of patents which may be made in accordance with the developed principles of patent law are to be subsumed. It is therefore a mistake, and a mistake likely to lead to an incorrect conclusion, to treat the question whether a given process or product is within the definition as if that question could be restated in the form: 'Is this a manner (or kind) of manufacture?' It is a mistake which tends to limit one's thinking by reference to the idea of making tangible goods by hand or by machine, because 'manufacture' as a word of everyday speech generally conveys that idea. The right question is: 'Is this a proper subject of letters patent according to the principles which have been developed for the application of s 6 of the Statute of Monopolies?'" Threshold quality of inventiveness In NRDC, it was also held that it was enough for a process to constitute a manner of manufacture that it resulted in an artificially created state of affairs of economic significance133: "Notwithstanding the tendency of these decisions, the view which we think is correct in the present case is that the method the subject of the relevant claims has as its end result an artificial effect falling squarely within the true concept of what must be produced by a process if it is to be held patentable. This view is, we think, required by a sound understanding of the lines along which patent law has developed and necessarily must develop in a modern society. The effect produced by the appellant's method exhibits the two essential qualities upon which 'product' and 'vendible' seem designed to insist. It is a 'product' because it consists in an artificially created state of affairs, discernible by observing over a period the growth of weeds and crops respectively on sown land on which the method has been put into practice. And the significance of the product is economic; for it provides a remarkable advantage, indeed to the lay mind a sensational advantage, for one of the most elemental activities by which man has served his material needs, the cultivation of the soil for the production of its fruits. Recognition that the relevance of the process is to this economic activity old as it is, need not be inhibited by any fear of inconsistency with the claim to novelty which the specification plainly 133 (1959) 102 CLR 252 at 277. Nettle makes. The method cannot be classed as a variant of ancient procedures. It is additional to the cultivation. It achieves a separate result, and the result possesses its own economic utility consisting in an important improvement in the conditions in which the crop is to grow, whereby it is afforded a better opportunity to flourish and yield a good harvest." That holding is, however, to be understood as importing the Court's earlier observations as to the meaning of an "invention" and the idea that all that had come to be understood by that word, as used in patent law, is comprehended in the phrase "new manufactures". It should not be taken to suggest that an "artificial state of affairs" and "economic utility" are the only considerations relevant to whether an invention is "a manner of manufacture" for the purposes of s 18(1)(a) of the Act. For a claimed invention to qualify as a manner of manufacture it must be something more than a mere discovery. The essence of invention inheres in its artificiality or distance from nature; and thus, whether a product amounts to an invention depends on the extent to which the product "individualise[s]" nature134. As Professors Sherman and Bently wrote135: "What then was required in order to move from the realm of discovery to that of invention? The simple answer was that it was necessary to show that abstract principles had been reduced to practice, that Nature had been individualised or activated. ... While philosophical or abstract principles could not on their own be patented, their embodiment in a material or practical form could. In these circumstances it was clear that in law it was the artificial or created nature of the final product, its distance from Nature, which ensured that an object became an invention rather than a mere discovery." The question then is whether the subject matter of the claim is sufficiently artificial, or in other words different from nature, to be regarded as patentable. Relevantly, the artificiality of a product may be perceived in a number of factors, including the labour required to create it and the physical differences between it and the raw natural material from which it is derived. Regardless, however, of the amount of labour involved or the differences between the 134 Sherman and Bently, The Making of Modern Intellectual Property Law, (1999) at 46; Sherman, "D'Arcy v Myriad Genetics Inc: Patenting Genes in Australia", (2015) 37 Sydney Law Review 135 at 138. 135 Sherman and Bently, The Making of Modern Intellectual Property Law, (1999) at 46 (footnotes omitted). Nettle product and the raw natural material from which it is derived, it is necessary that the inventive concept be seen to make a contribution to the essential difference between the product and nature136. Admittedly, it has occasionally been doubted that there is any longer a threshold requirement of inventiveness as opposed to the specific requirements of inventive step and novelty for which s 18(1)(b) provides. It has also been suggested that it would be desirable to collapse the subject matter requirement into the specific inquiries of inventive step and novelty. The Advisory Council on Intellectual Property concluded that it would make sense for "questions of newness to be dealt with under the specific provisions for novelty and inventive step, rather than under the general umbrella of manner of new manufacture"137. But for present purposes, the law on the point appears to be tolerably clear. In Commissioner of Patents v Microcell Ltd, the Full Court held that the subject matter of a claim as disclosed in the specification must possess a quality of inventiveness138 or, in other words, the use of ingenuity that adds to the sum of human knowledge. In N V Philips Gloeilampenfabrieken v Mirabella International Pty Ltd139, the majority recognised that the quality of inventiveness must appear on the face of the specification. In Advanced Building Systems Pty Ltd v Ramset Fasteners (Aust) Pty Ltd140 ("Ramset"), the majority held that whether claimed subject matter is an invention for the purposes of s 100(1)(d) of the Patents Act 1952 (Cth) is distinct from inquiries as to inventive step, obviousness and novelty under s 100(1)(e) and (g), and that the court below had erred in considering "inventive merit" in light of prior art for the purposes of s 100(1)(d)141. The majority distinguished Philips on the basis that it was decided under the Patents Act 1990 (Cth)142. But, at a later point in the judgment, the 136 Sherman, "D'Arcy v Myriad Genetics Inc: Patenting Genes in Australia", (2015) 37 Sydney Law Review 135 at 138-139. 137 Advisory Council on Intellectual Property, Patentable Subject Matter: Final Report, (2010) at 9. 138 (1959) 102 CLR 232; [1959] HCA 71. 139 (1995) 183 CLR 655 at 663-665 per Brennan, Deane and Toohey JJ; [1995] HCA 15. 140 (1998) 194 CLR 171; [1998] HCA 19. 141 (1998) 194 CLR 171 at 188-191 [27]-[35] per Brennan CJ, Gaudron, McHugh and 142 (1998) 194 CLR 171 at 191 [37]. Nettle majority also acknowledged that, where the subject matter of a claim as disclosed in the specification is plainly not an invention, the claim should be dismissed143. Notwithstanding that Microcell did not establish a discrete "threshold" test144, each of those decisions is consistent with the requirement, essential to the concept of a "manner of manufacture", that the subject matter of a claim have about it a quality of inventiveness which distinguishes it from a mere discovery or observation of a law of nature. That requirement is separate and distinct from the other requirements of inventive step and novelty. As Brennan, Deane and Toohey JJ stated in Philips, an alleged invention will145: "remain unsatisfied if it is apparent on the face of the relevant specification that the subject matter of the claim is, by reason of absence of the necessary quality of inventiveness, not a manner of new manufacture for the purposes of the Statute of Monopolies. That does not mean that the threshold requirement of 'an alleged invention' corresponds with or renders otiose the more specific requirements of novelty and inventive step (when compared with the prior art base) contained in s 18(1)(b). It simply means that, if it is apparent on the face of the specification that the quality of inventiveness necessary for there to be a proper subject of letters patent under the Statute of Monopolies is absent, one need go no further." Naturally occurring phenomena As counsel for the first respondent stressed repeatedly in the course of argument, the appellant's only basis of objection is lack of patentable subject matter; in particular that, because the mutated BRCA1 gene was a naturally occurring substance, it was incapable of being a patentable invention. It follows, as the first respondent contended, that other possible grounds of invalidity such as lack of inventive step, lack of novelty and lack of utility are irrelevant. But the fact that the appellant objected on the sole basis of lack of patentable subject matter does not exclude the threshold requirement of 143 (1998) 194 CLR 171 at 192 [39]-[40]. 144 Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [No 2] (2007) 235 CLR 173 at 211 [106] per Gummow, Hayne, Callinan, Heydon and Crennan JJ; [2007] HCA 21. 145 (1995) 183 CLR 655 at 663-664; see also Merck & Co Inc v Arrow Pharmaceuticals Ltd (2006) 154 FCR 31 at 54 [75] per Heerey, Kiefel and Nettle inventiveness. For the reasons already given, the threshold requirement of inventiveness is part of the inquiry into whether the subject matter of the claim is a patentable invention. Here, the essence of claim 1 is the correlation between the incidence of cancer and the presence of the specified mutations and polymorphisms in the mutated BRCA1 gene. Such ingenuity as that entails consists in the idea of examining an isolated fragment of a patient's naturally occurring DNA constituted of the BRCA1 gene for the presence or absence of the specified mutations and polymorphisms. The subject matter of the claim does not make any contribution to the inclusion of the specified mutations and polymorphisms in the mutated BRCA1 gene146. Their presence or absence in or from it is the result of the isolated BRCA1 gene being part of the naturally occurring DNA from which the sequence is isolated. To adopt and adapt the reasoning in NV Philips' Gloeilampenfabrieken Application, it is "the inevitable result of that which is inherent in the [DNA]"147. In this case, the courts below concluded that, despite the presence or absence of the specified mutations and polymorphisms being the result of naturally occurring phenomena, the subject matter of the claim was a patentable invention. The Full Court held so because, as their Honours put it148: "In Australia, there is no statutory or jurisprudential limitation of patentability to exclude 'products of nature'. To the contrary, the High Court has specifically rejected such an approach. A mere discovery is not patentable and an idea is not patentable, but a 'manner of manufacture', as that term has been developed, is. In our view the products the subject of claim 1 are different to the gene comprising the nucleic acid sequence as it exists in nature." But in fact, there are limits on the patentability of products of nature inasmuch as products of nature do not involve human intervention and therefore are lacking in the necessary quality of inventiveness to qualify as a manner of 146 Cf Research Affiliates LLC v Commissioner of Patents (2014) 227 FCR 378 at 402- 147 (1954) 71 RPC 192 at 194, quoted in NRDC (1959) 102 CLR 252 at 279. 148 D'Arcy v Myriad Genetics Inc (2014) 224 FCR 479 at 516-517 [207], [213]. Nettle manufacture149. As Professor Sherman observed in his recent article on the subject150: "The US product of nature doctrine and the Australian test of artificially created state of affairs are the same question asked from different perspectives. In both cases, they build on an (implicit) image of what it means to invent something; ... nature and artifice are flip sides of the same coin." Of course, as NRDC implies, the application of naturally occurring phenomena to a particular use may be a manner of manufacture if it amounts to a new process or method of bringing about an artificially created state of affairs of economic significance151. Even so, the inventor cannot claim to have invented the naturally occurring product as opposed to the process of application. In NRDC, the patentee could not claim to have invented, and therefore there was no suggestion of it laying claim to a monopoly over, the commonplace herbicides which were used in the course of the patentable process. Similarly, in Shell Oil Co v Commissioner of Patents152, the patentee could not claim to have invented, and therefore there was no suggestion of laying claim to a monopoly over, the known compounds which were applied as part of the patentable process to a new use of plant growth regulation. So too here, insofar as the invention consists in the application of a naturally occurring phenomenon to a particular use, the inventor cannot claim to have invented the naturally occurring phenomenon as opposed to the method of use and has no claim to a monopoly over the naturally occurring phenomenon as opposed to the method of use. The scope of the invention Certainly, as the Full Court recognised153, the substance of the claimed invention consists not only in the discovery of the BRCA1 gene but also in the development of a process or method of detecting the increased likelihood of certain kinds of malignancy by using known techniques to isolate the BRCA1 149 See NRDC (1959) 102 CLR 252 at 278. 150 Sherman, "D'Arcy v Myriad Genetics Inc: Patenting Genes in Australia", (2015) 37 Sydney Law Review 135 at 141. 151 See also Shell Oil Co v Commissioner of Patents [1982] 2 SCR 536 at 548-550 per Wilson J for Ritchie, Dickson, Beetz, McIntyre and Wilson JJ. 152 [1982] 2 SCR 536. 153 D'Arcy v Myriad Genetics Inc (2014) 224 FCR 479 at 492-495 [73]-[93]. Nettle gene and examining it by the use of known techniques for the presence of the specified mutations and polymorphisms. On that basis, it might fairly be said that a pathologist who isolated a fragment of a patient's DNA comprising the BRCA1 gene and examined it for the presence of the specified mutations and polymorphisms, with the object of identifying the likelihood of malignancy of which the specified mutations and polymorphisms are claimed to be indicia, would make use of the claimed invention. But, equally on that basis, the pathologist would only infringe claims 1 to 3 if the patient's DNA happened to possess one or more of the specified mutations and polymorphisms. that rejected the conclusion Moreover, what if a pathologist had no interest in looking for the specified mutations and polymorphisms – indeed let it be assumed that the pathologist the specified mutations and vehemently polymorphisms were clinically significant – and was concerned with isolating the fragment of a patient's DNA comprising the BRCA1 gene in order only to examine it for different mutations and polymorphisms which the pathologist's independent research had led him or her to conclude were of clinical significance? In those circumstances, the only aspect of the claimed invention of which the pathologist could be said to make any use would be the discovery of the BRCA1 gene; and as has been seen, the BRCA1 gene is not patentable as such because it is a naturally occurring phenomenon which lacks the quality of inventiveness necessary to qualify as a manner of new manufacture154. Of course, that does not mean that an intention to infringe a patent is an essential element of infringement. If an inventor patents a product and another inventor later reinvents it in ignorance of its earlier invention, the subsequent inventor's ignorance is clearly no defence to a claim of infringement155. Nor is it to deny that it is permissible in a proper case to define the physical characteristics of an article by reference to the result which the article may achieve or that, in cases where such a method of definition is appropriate, it is no objection to that method of definition that a person skilled in the art may need to experiment to ascertain whether an article made by that person infringes the patent156. But, in the former case, there is infringement because the subsequent inventor has employed the manner of manufacture which the earlier inventor invented and, in the latter case, the definition of an article by reference to what it is able to achieve is permissible because the article is patentable in itself. 154 See NRDC (1959) 102 CLR 252 at 278. 155 Wright v Hitchcock (1870) LR 5 Ex 37 at 47 per Kelly CB; Young v Rosenthal and Co (1884) 1 RPC 29 at 32 per Grove J; M'Lean v Kettle (1883) 9 VLR (E) 145. 156 Mullard Radio Valve Co Ltd v British Belmont Radio Ltd (1938) 56 RPC 1 at 10 per Sir Wilfrid Greene MR. Nettle By contrast, a pathologist who employs established technology to isolate a fragment of naturally occurring DNA comprising the BRCA1 gene does not employ any method invented by the first respondent and, as has been seen, because the BRCA1 gene is a naturally occurring phenomenon, it is not patentable in itself. Nor does it assist the first respondent to point to the inventiveness involved in the combination of its discovery of the BRCA1 gene with the first respondent's system for isolating and examining the gene for the presence of the specified mutations and polymorphisms; for as Sir Wilfrid Greene MR said in Mullard Radio Valve Co Ltd v British Belmont Radio Ltd157: "an article which is not in itself patentable cannot be made the subject of a good ... claim merely by pointing out that, if it is used in a particular way or in a particular collocation, it will produce novel and useful results." The substance and effect of claim 1 That invites the question of whether the wording of claim 1 properly reflects the substance of the claimed invention. The judge at first instance held it was enough to uphold claim 1 on the basis that isolated nucleic acid containing the specified mutations and polymorphisms "constitutes an artificial state of affairs in the sense those words should be understood in the present context"158. The Full Court emphasised that claim 1 is drafted as a claim for a compound – an isolated nucleic acid – as opposed to a claim to information, and that the product the subject of claim 1 is different from the gene comprising the nucleic acid sequence as it exists in nature159: "Claim 1 is not to the genetic code. What is claimed is an isolated nucleic acid, a chemical molecule characterised in a certain way, which is chemically, structurally and functionally different to what occurs in nature. There is a distinction between a claim to an isolated nucleic acid comprised in part of a sequence of nucleotide bases and a claim to a written sequence of nucleotides which may be the corresponding sequence in the natural cell. The claim is to be construed according to the normal principles of claim construction. To identify the identical 157 (1938) 56 RPC 1 at 10; see also Interlego AG v Toltoys Pty Ltd (1973) 130 CLR 461 at 480 per Barwick CJ and Mason J; [1973] HCA 1. 158 Cancer Voices Australia v Myriad Genetics Inc (2013) 99 IPR 567 at 589 [106]. 159 D'Arcy v Myriad Genetics Inc (2014) 224 FCR 479 at 514 [194]. Nettle invention as lying in the concept of information said to be embodied in a sequence of nucleotides ignores the language of the claim." The way in which a claim is drafted cannot, however, transcend the reality of what is in suit160. As Lord Loreburn LC observed in British Vacuum Cleaner Company Ltd v London and South Western Railway Company, albeit in dissent in the result, "[i]t is an abuse, which cannot be too sedulously watched and prevented by Courts of law, when a patentee, even if he is really an inventor, so shapes his claim that it may cover what he has not invented at all"161. Monopolies are granted for inventions, not for the inventiveness of the drafting with which applicants choose to describe them. Hence, as was observed in Eli Lilly & Co's Application162, where an alleged invention is based on the discovery of the particular properties of known compounds, care must always be taken to examine the form of claim actually made. Whatever words have been used, the matter must be looked at as one of substance and effect must be given to the true nature of the claim. No doubt the motive consideration in Eli Lilly was that methods of treatment of illness or disease of human beings were at that time not regarded as patentable. That is no longer the case in this country163. But the point remains that care must be taken to examine the form of claim actually made to see if it is in fact an attempt to establish a monopoly for the manufacture of a substance for a purpose for which a monopoly cannot be claimed. More generally, an "invention is to be understood as a matter of substance and not merely as a matter of form"164. If a claim drafted as a product claim is in truth a "'disguised' process claim"165, it will be treated as such. 160 See Microcell (1959) 102 CLR 232 at 236 per Menzies J. 161 (1912) 29 RPC 309 at 320. 162 [1975] RPC 438 at 445 per Graham and Whitford JJ. 163 Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd (2013) 253 CLR 284; [2013] HCA 50. 164 Research Affiliates LLC v Commissioner of Patents (2014) 227 FCR 378 at 401 [107] per Kenny, Bennett and Nicholas JJ. 165 Rescare Ltd v Anaesthetic Supplies Pty Ltd (1992) 111 ALR 205 at 214 per Gummow J; Anaesthetic Supplies Pty Ltd v Rescare Ltd (1994) 50 FCR 1 at 23-24 per Lockhart J; see also Mullard Radio Valve Co Ltd v Philco Radio and Television Corporation of Great Britain Ltd (1936) 53 RPC 323 at 352; Mullard Radio Valve Co Ltd v British Belmont Radio Ltd (1938) 56 RPC 1 at 10-11. Nettle As already noticed, the first respondent did not invent and cannot claim to have invented the process of isolating nucleic acid or the process of amplifying for genetic testing the fragment comprising the BRCA1 gene. The technologies for each are longstanding and well known to those who are skilled in the science. Nor did the first respondent invent a method for infusing any such fragment of isolated DNA with the specified mutations and polymorphisms166. Nor would there have been the slightest utility in doing so. The only relevant clinical significance of the presence of the specified mutations and polymorphisms in an isolated fragment is that the fragment has been extracted from the naturally occurring DNA in the cell and thus that the specified mutations and polymorphisms were present in the cell before being so extracted. It was not disputed that the first respondent might justly lay claim to the discovery that, if an isolated fragment comprising the BRCA1 gene is found upon examination to exhibit the specified mutations and polymorphisms, their presence is or may be indicative of particular kinds of malignancy in the cell. Nor was it disputed that a process or method of using known technology to isolate a sequence of nucleic acid comprising the BRCA1 gene and examining it for the presence of the specified mutations and polymorphisms for the purpose of detecting or predicting malignancy might be patentable. But, as has been observed, the discovery of a natural correlation is not patentable as such167 and its discovery does not entitle the first respondent to patent the BRCA1 gene as a product, whether or not afflicted by specified mutations and polymorphisms168. the The fair basis cases provide an analogy which assists in illuminating the point. As they show, a claim for a new use of an old product does not confer a monopoly over the old product (just the new use). Parity of reasoning dictates that application of a method of detecting the increased likelihood of certain kinds of cancer by isolating the BRCA1 gene and comparing it to the reference sequence does not confer a monopoly over the mutated BRCA1 gene. In Mullard Radio Valve Co Ltd v Philco Radio and Television Corporation of Great Britain Ltd, the claim in suit was for a "discharge tube 166 Cf Ranks Hovis McDougall Ltd's Application (1976) 46 AOJP 3915. 167 Reynolds v Herbert Smith & Co Ltd (1902) 20 RPC 123 at 126 per Buckley J. 168 See Lane Fox v Kensington and Knightsbridge Electric Lighting Company [1892] 3 Ch 424 at 429 per Lindley LJ; NRDC (1959) 102 CLR 252 at 264; Ramset (1998) 194 CLR 171 at 190 [34]; Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2005] RPC 9 at 195-196 [76]-[77] per Lord Hoffmann; Association for Molecular Pathology v Myriad Genetics Inc 186 L Ed 2d 124 at 131 (2013). Nettle having at least three auxiliary electrodes between the cathode and the anode, characterised in that the auxiliary electrode nearest to the anode is directly connected to the cathode so as to be maintained continuously at the cathode potential"169. It was, however, established by the evidence that the discharge tube was a triode of known construction in which the anode was connected to the cathode and could only achieve its avowed object of maintaining the anode at the cathode potential if the three electrodes were connected in a particular sequence. The patentee's inventive idea thus consisted only in the discovery that in that particular juxtaposition the tube achieved that object. Accordingly, the claim was not fairly based on the invention because it went beyond the ambit of the patentee's inventive step. As Lord Macmillan said170: "If an inventor claims an article as his invention but the article will only achieve his avowed object in a particular juxtaposition and his inventive idea consists in the discovery that in that particular juxtaposition it will give new and useful results, I do not think that he is entitled to claim the article at large apart from the juxtaposition which is essential to the achievement of those results." Similarly, in Adhesive Dry Mounting Company Ltd v Trapp & Co, "The first question which arises on this Claim is, whether it claims the pellicle therein described, or merely the use of this pellicle in the process claimed in the first Claiming Clause. If the former, the Letters Patent would entitle the Patentees to prevent the use of such a pellicle by others, whatever might be the purpose for which it was used. If the latter, the Letters Patent would only entitle the Patentees to restrain the use of such a pellicle in any process substantially the same as the process referred to in the first Claiming Clause. ... The idea of using an old material for an entirely new purpose, not being analogous to purposes for which it has theretofore been used, may be good subject-matter, but such idea, however ingenious, can hardly justify a claim for the material itself." So too, in Wellcome Foundation Ltd v Commissioner of Patents, where the claim in suit was for a known chemical substance together with a set of 169 (1936) 53 RPC 323 at 325 (emphasis removed). 170 Mullard Radio (1936) 53 RPC 323 at 347. 171 (1910) 27 RPC 341 at 352-353. Nettle instructions for its use for a previously unknown purpose of treating anaplasmosis in cattle, the Court said that172: "What the applicant seeks is a monopoly in an old substance limited to its use in the process which is the subject of claims 17 to 28. It is one thing to say that the inventor of a process is entitled to a monopoly, albeit limited, in the product of that process. It is quite another and different thing to say that the inventor of a process is entitled to a monopoly in a substance which is used merely as an ingredient in that process. In the latter case the invention claimed makes no contribution to the manufacture of the substance. At best, it takes advantage of properties in the substance hitherto unknown or unsuspected. A further answer to the appellant's submission is that there is no distinction between the claim to the process and the claim to the substance when the substance claim is limited to its use in the process. So much appears from the judgment of Parker J in Adhesive Dry Mounting Company Ltd v Trapp & Co". In the same way here, it is one thing to say that the first respondent has invented a process which consists in isolating and examining the fragment comprising the BRCA1 gene for the presence of the specified mutations and polymorphisms as an indicium of malignancy. It is quite another and different thing to say that the first respondent, as inventor of that process, is entitled to a monopoly over the mutated BRCA1 gene, which is used merely as an ingredient in that process. The invention claimed makes no contribution to the manufacture of the substance. At best, it takes advantage of properties in the substance hitherto unknown or unsuspected. Just as there was no difference between the process and the product in Wellcome Foundation, there is no distinction between a claim to the process of isolating the BRCA1 gene for the purpose of examining it for the presence of the specified mutations and polymorphisms and the claim to Claim not defined by chemical composition Counsel for the first respondent stressed more than once in argument that claim 1 was for a discrete chemical molecule achieved by the breaking of chemical covalent bonds in the course of the extraction and amplification processes employed in deriving isolated nucleic acid from the source DNA. According to the first respondent, that significantly distinguished claim 1 from the first respondent's claim for patent protection in respect of the BRCA1 gene 172 (1980) 145 CLR 520 at 529; [1980] HCA 21 (footnote omitted). Nettle simpliciter which the Supreme Court of the United States rejected in Association for Molecular Pathology v Myriad Genetics Inc173. As the plurality of the Supreme Court of the United States observed in that case174: "[The first respondent's] claims [are not] saved by the fact that isolating DNA from the human genome severs chemical bonds and thereby creates a nonnaturally occurring molecule. [The first respondent's] claims are simply not expressed in terms of chemical composition, nor do they rely in any way on the chemical changes that result from the isolation of a particular section of DNA." As counsel for the first respondent ultimately conceded, however, because of the variable length once isolated of the fragments which may comprise the BRCA1 gene, in truth the claim made in relation to the BRCA1 gene relates to a very large if not infinite number of isolated nucleic acids with different molecular structures according to, inter alia, the number of exons isolated, the degrees of purification achieved in the extraction and amplification processes, and the presence of mutations and polymorphisms in the consequent extraction. Nor is there any conceivable way in which the processes could be adjusted by reference to any disclosed chemical formula to avoid the presence of the specified mutations and polymorphisms and thereby infringement of the patent175. It follows that, in reality, the claim in suit is no more expressed in terms of a chemical formula than was the claim in respect of the BRCA1 gene simpliciter which was rejected in the United States. The reasoning of the courts below The judge at first instance considered that it followed from what was said in NRDC176 about a process being patentable when it results in an artificially created state of affairs of economic significance that the artificially created state of affairs of economic significance which results from isolating and amplifying the BRCA1 gene and discovering that it is afflicted by one or more of the specified mutations and polymorphisms is a patentable product. His Honour added that three considerations fortified him in that view. The first was that 173 186 L Ed 2d 124 (2013). 174 186 L Ed 2d 124 at 135-136 (2013). 175 Cf Blanco White, Patents for Inventions, 5th ed (1983) at 126-127 [4-413]; Anaesthetic Supplies Pty Ltd v Rescare Ltd (1994) 50 FCR 1 at 30-31 per 176 (1959) 102 CLR 252 at 277. Nettle NRDC was "deliberate in its use of very expansive language" and emphasised "the 'broad sweep' of the concept involved"177. The second was that "[e]xtraction of nucleic acid requires human intervention that necessarily results in the rupture of the cell membrane and the physical destruction of the cell itself"178. And the third was that179: "It would lead to very odd results if a person whose skill and effort culminated in the isolation of a [DNA sequence] could not be independently rewarded by the grant of a patent because the isolated [DNA sequence], no matter how practically useful or economically significant, was held to be inherently non-patentable." The Full Court adopted a generally similar approach but with greater emphasis on the artificiality of isolated nucleic acid. Their Honours said that180: "What is being claimed is not the nucleic acid as it exists in the human body, but the nucleic acid as isolated from the cell. The claimed product is not the same as the naturally occurring product. There are structural differences but, more importantly, there are functional differences because of isolation. As Lourie J explains, 'the ability to visualise a DNA molecule through a microscope, or by any other means, when it is bonded to other genetic material ... is worlds apart from processing an isolated DNA molecule that is in hand and usable'. The isolation of the nucleic acid also leads to an economically useful result – in this case, the treatment of breast and ovarian cancers. This is surely what was contemplated by a manner of new manufacture in the Statute of Monopolies." With respect, there are problems with the reasoning at both levels. First and foremost, claim 1 is not a claim for a monopoly over nucleic acid isolated from the cell. Nor could it be. The process of isolating nucleic acid from the cell for the purposes of genetic testing is a matter of longstanding practice and 177 Cancer Voices Australia v Myriad Genetics Inc (2013) 99 IPR 567 at 589 [107]. 178 Cancer Voices Australia v Myriad Genetics Inc (2013) 99 IPR 567 at 589 [108]. 179 Cancer Voices Australia v Myriad Genetics Inc (2013) 99 IPR 567 at 589-590 180 D'Arcy v Myriad Genetics Inc (2014) 224 FCR 479 at 517 [212]-[214]. Nettle diagnostic technique. Pathologists have long routinely isolated fragments of nucleic acid by the PCR process of amplification, and the DNA sequences of the BRCA1 exons by which pathologists are guided in that process are well described in medical literature181. Other things being equal, they are free (without fear of contravention of any patent to which the first respondent might lay claim) to "manufacture" isolated nucleic acid in order both to check it against known reference comparators and to check it for variations of unknown clinical significance. Secondly, and for the same reason, the fact that isolated nucleic acid is a product which is "chemically, structurally and functionally different"182 from the naturally occurring DNA from which it is isolated – essentially because the isolation process consists of chemically stripping away the histones which control and execute the function of the exons in the cell and separating the fragment intended for examination – is for all intents and purposes beside the point. It would be to the point if the first respondent had invented and was claiming a new method for isolating nucleic acid; but claim 1 does not disclose any such method. Thirdly, although claim 1 is restricted to isolated nucleic acid comprising the mutated BRCA1 gene, claim 1 does not disclose any method of infusing the isolated BRCA1 gene with the specified mutations and polymorphisms or otherwise facilitating their presence. As was earlier noticed, a pathologist has no way of knowing whether a patient's DNA, and therefore isolated nucleotides coding for the BRCA1 polypeptide, are afflicted by the specified mutations and polymorphisms until and unless the pathologist first isolates the patient's DNA, amplifies the fragment of it and examines it for the presence of the specified mutations and polymorphisms. Consequently, so far from being a claim for a manner of manufacture of isolated nucleic acid constituted of the mutated BRCA1 gene, claim 1 is in truth a claim for a monopoly over the right to apply long-established methods for the isolation and amplification of specific nucleotide fragments to the isolation and amplification of a patient's naturally occurring BRCA1 gene, where and if it is found upon subsequent examination that the patient's BRCA1 gene happened to be afflicted by any of the specified mutations and polymorphisms. That is not a valid claim of a manner of manufacture of a product. By definition, a manner of manufacture is an artificial thing or state of affairs which 181 Cf Association for Molecular Pathology v Myriad Genetics Inc 186 L Ed 2d 124 at 182 D'Arcy v Myriad Genetics Inc (2014) 224 FCR 479 at 514 [194]. Nettle involves an element of inventiveness. Although the isolation of nucleic acid comprising the BRCA1 gene is a man-made process, it does not involve any element of inventiveness. It is no more than the application of a recognised diagnostic technique to a known purpose of examining fragments of human DNA. The selection of the fragment which comprises the BRCA1 gene is novel, in the sense that it reflects the first respondent's discovery of the significance of the SEQ.ID No:1 sequence. But the first respondent does not and cannot claim to be entitled to a monopoly over the right to isolate the fragment which codes to the SEQ.ID No:1 sequence, or indeed to isolate any other fragment of the DNA polymer. The presence of the specified mutations and polymorphisms in the isolated nucleic acid is also of critical importance inasmuch as it reflects the first respondent's discovery of the correlation between their presence and the heightened probability of cancer. But nothing that is done in the course of isolating the BRCA1 gene has any effect on whether the specified mutations and polymorphisms will be present. Their presence or absence in or from the isolated nucleic acid is entirely dependent upon whether they were present in or absent from the DNA of the patient from whom the isolated nucleic acid was extracted, and in effect that is the antithesis of a man-made artificial state of affairs. Fourthly, whether or not the processing of an isolated molecule is "worlds apart"183 from the ability to visualise a DNA molecule through a microscope or by other means is also beside the point. Claim 1 is not a claim for a monopoly over the right to isolate and amplify the fragment of the BRCA1 gene. Fifthly, it is not the isolation of nucleic acid, or even the isolation and amplification of the fragment comprising the BRCA1 gene, which leads to the "economically useful result" of treating breast and ovarian cancers. It is rather the first respondent's discovery of a naturally occurring correlation between the presence of the specified mutations and polymorphisms in such a fragment (and thus in the DNA in the cell from which the fragment is derived) and an increased probability of actual or potential malignancy. Sixthly, the discovery of a naturally occurring correlation between the presence of the specified mutations and polymorphisms in an isolated fragment comprising the BRCA1 gene and an increased likelihood of actual or potential malignancy in the cell from which the fragment is derived is not what was contemplated by a "manner of new manufactures" in the Statute of Monopolies. As was observed in Ramset184, although discovery of a naturally occurring 183 D'Arcy v Myriad Genetics Inc (2014) 224 FCR 479 at 517 [212]. 184 (1998) 194 CLR 171 at 190 [34]. Nettle phenomenon or a correlation between naturally occurring phenomena adds to the sum of human knowledge, s 6 of the Statute of Monopolies was concerned with a manner of new manufacture; and neither naturally occurring phenomena, nor the correlation between naturally occurring phenomena, is a manner of new manufacture. A manner of new manufacture necessitates invention and, as Buckley J said in Reynolds v Herbert Smith & Co Ltd185: "Invention ... adds to human knowledge, but not merely by disclosing something [not previously known]. Invention necessarily involves also the suggestion of an act to be done, and it must be an act which results in a new product, or a new result, or a new process, or a new combination for producing an old product or an old result." Finally, much of the judgment at first instance and of the judgment of the Full Court appears to attribute misplaced significance to the conclusion reached in NRDC186 earlier set out that it was sufficient to render patentable the process or method of production there in suit that it had as its end result an artificially created state of affairs of economic significance. The judge at first instance concluded, and the Full Court appears to have taken a similar view, that: "It is apparent from this passage that a product that consists of an artificially created state of affairs which has economic significance will constitute a 'manner of manufacture'."187 With respect, that is not apparent and it is not the case. The passage of the judgment in NRDC in question was explicitly directed to whether a process or method of applying a known product to a new application qualified as a manner of manufacture within the meaning of s 6 of the Statute of Monopolies. It was sufficient, to conclude that it did, that the process resulted in "some product whereby the validity of [the process] can be tested"188. It was held that, by reason of the direction of development in patent law since the 17th century and the direction which it must take in modern society, the notion of a manner of manufacture comprised of the result of a method or process is not confined to a tangible product but extends to an artificially created state of affairs of economic 185 (1902) 20 RPC 123 at 126. 186 (1959) 102 CLR 252 at 277. 187 Cancer Voices Australia v Myriad Genetics Inc (2013) 99 IPR 567 at 585 [88]. 188 (1959) 102 CLR 252 at 276, quoting Elton and Leda Chemicals Ltd's Application for a Patent [1957] RPC 267 at 269. Nettle significance189. But it does not follow that it is enough to found a claim for a monopoly in relation to a product, as opposed to a process by which the product is created, to demonstrate that an artificially created state of affairs of economic significance results from the application of a process to the product for which product no claim for a monopoly has been or could be made. It is not disputed that a process or method of detecting the increased likelihood of certain kinds of malignancy by isolating the BRCA1 gene and examining it for the presence of any of the specified mutations and polymorphisms may be patentable subject matter as a process190 (subject to considerations of novelty and inventive step when compared to the prior art base). But, to repeat, claim 1 is not a claim for any such process. It is a claim for a monopoly over such isolated fragments of naturally occurring DNA as comprise the BRCA1 gene as are found upon examination to contain the (naturally occurring) specified mutations and polymorphisms. In the result, the claim extends too far. The difficulty for the first respondent is that, having discovered a presumably good and perhaps ground- breaking process for detecting the probability of certain kinds of malignancy by reference to the presence of particular mutations and polymorphisms in the BRCA1 gene, the first respondent has attempted to patent those sequences of the gene themselves notwithstanding that, even when isolated, they are naturally occurring and therefore not new191. Contemporary contextual considerations Both parties to the appeal sought to support their positions by reference to contemporary practice in the European Union. The course of argument highlighted a controversy between them as to whether claim 1 would meet the requirements for patentability prescribed by the applicable Directive192. That is 189 (1959) 102 CLR 252 at 276-277; see also Wellcome Foundation (1980) 145 CLR 520 at 528; Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd (2013) 253 CLR 284 at 370 [235] per Crennan and Kiefel JJ. 190 NRDC (1959) 102 CLR 252 at 262; Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd (2013) 253 CLR 284; Hickton's Patent Syndicate v Patents and Machine Improvements Company Ltd (1909) 26 RPC 339. 191 See also Association for Molecular Pathology v Myriad Genetics Inc 186 L Ed 2d 192 Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 on the Legal Protection of Biotechnological Inventions. Nettle not a controversy which needs to be resolved. The structure and prescriptive detail of European patent legislation in its application to biotechnology and genetic engineering are such that the resolution of the controversy could provide little assistance in determining whether the claim is a proper subject for letters patent according to the principles which have been developed for the application of s 6 of the Statute of Monopolies. The first respondent also sought to support its position by reference to the practice of the Australian Patent Office since 1995 of accepting the patentability of isolated nucleic acid sequences as well as to the history of executive consideration and legislative amendment of the Patents Act since 2002, both of which were explained in sufficient detail by the trial judge193. The legislative history does not go so far as to demonstrate a legislative endorsement of the Patent Office practice. Nor has the Patents Act been amended in a way which necessarily assumes the patentability of isolated nucleic acid sequences194. The most that can legitimately be drawn from the legislative history is a repeated legislative acceptance that, unlike the position in the European Union, issues of patentability in biotechnology and genetic engineering in Australia will continue to be resolved, consistently with NRDC, according to the principles which have developed for the application of s 6 of the Statute of Monopolies, except as otherwise specifically provided in s 18(2) and (3) of the Patents Act. That is to highlight the critical question, not to answer it. Conclusion and orders The appeal should be allowed. We agree with the orders proposed in the judgment of French CJ, Kiefel, Bell and Keane JJ. 193 Cancer Voices Australia v Myriad Genetics Inc (2013) 99 IPR 567 at 590-594 194 Cf Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd (2013) 253 CLR 284 at 391 Introduction Specific mutations or polymorphisms in the BRCA1 gene are indicative of a predisposition to breast cancer and ovarian cancer. That was a fact before the first respondent, "Myriad", worked it out. Myriad worked it out; it gained knowledge of it. How did it do this? Using conventional isolation techniques, Myriad located the BRCA1 gene and observed that specific mutations or polymorphisms in the BRCA1 gene occurred in patients with breast cancer or ovarian cancer. Myriad concluded that those specific mutations or polymorphisms in the BRCA1 gene are indicative of a predisposition to breast cancer and ovarian cancer. Myriad filed a patent which contains 30 claims ("the Patent"). Claims 4-30 are for applications arising from the fact that specific mutations or polymorphisms in the BRCA1 gene are indicative of a predisposition to breast cancer and ovarian cancer. Those claims are not the subject of challenge. Claims 1-3 are not claims to applications arising from the fact that specific mutations or polymorphisms indicative of a predisposition to breast cancer and ovarian cancer. But neither are claims 1-3 claims to the fact itself. Claims 1-3 do not claim the fact that specific mutations or polymorphisms in the BRCA1 gene are indicative of a predisposition to breast cancer and ovarian cancer. Claims 1-3 are claims to a product: an isolated nucleic acid which has one or more specific mutations or polymorphisms in the BRCA1 gene. The methods of isolating nucleic acid were not new and were not claimed. The methods of identifying the mutations and polymorphisms in the BRCA1 gene were not new and were not claimed. Claims 1-3 are to any and every isolated example of the BRCA1 gene, or a portion of the BRCA1 gene, which discloses the existence of one or more specific mutations or polymorphisms. Therefore, the question in this appeal is whether an isolated nucleic acid which has one or more specific mutations or polymorphisms in the BRCA1 gene is a proper subject for the grant of a patent under s 18(1)(a) of the Patents Act 1990 (Cth) ("the Act"). The answer is no. Structure These reasons will consider the legislation and the facts and then turn to consider the proper construction of the disputed claims and the patentability of those claims. Legislation As at the priority date, s 18 of the Act, entitled "[p]atentable inventions", relevantly provided: "(1) Subject to subsection (2), a patentable invention is an invention that, so far as claimed in any claim: is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies; and (b) when compared with the prior art base as it existed before the priority date of that claim: is novel; and involves an inventive step; and is useful; and (d) was not secretly used in the patent area before the priority date of that claim by, or on behalf of, or with the authority of, the patentee or nominated person or the patentee's or nominated person's predecessor in title to the invention. (2) Human beings, and the biological processes for their generation, are not patentable inventions." (emphasis added) "[I]nvention" was defined in Sched 1 to the Act to mean "any manner of new manufacture the subject of letters patent and grant of privilege within section 6 of the Statute of Monopolies, and includes an alleged invention". Section 6 of the Statute of Monopolies is not in the Act. It relevantly provides195: "That any Declaration before mentioned shall not extend to any Letters Patents and Grants of Privilege for the term of fourteen years or under, hereafter to be made of the sole working or making of any manner of new Manufactures within this Realm, to the true and first Inventor and Inventors of such Manufactures, which others at the time of making such Letters Patents and Grants shall not use, so as also they be not contrary to the Law nor mischievous to the State, by raising prices of Commodities at home, or hurt of Trade, or generally inconvenient". (emphasis added) 195 21 Jac I c 3 (1623). Finally, to understand what is specified and claimed in the Patent, reference should be made to s 40 of the Act, entitled "[s]pecifications", which relevantly provided: "(1) A provisional specification must describe the invention. (2) A complete specification must: describe the invention fully, including the best method known to the applicant of performing the invention; and (b) where it relates to an application for a standard patent – end with a claim or claims defining the invention; and The claim or claims must be clear and succinct and fairly based on the matter described in the specification. The claim or claims must relate to one invention only." It is in that statutory context that the disputed claims are to be considered. Facts The Patent The title of the "invention" is "[i]n vivo mutations and polymorphisms in the 17q-linked breast and ovarian cancer susceptibility gene". It has a priority date of 12 August 1994. The invention is described as follows196: "The present invention relates generally to the field of human genetics. Specifically, the present invention relates to methods and materials used to isolate and detect a human breast and ovarian cancer predisposing gene (BRCA1), some mutant alleles of which cause susceptibility to cancer, in particular, breast and ovarian cancer. More specifically, the invention relates to germline [heritable] mutations in the BRCA1 gene and their use in the diagnosis of predisposition to breast and ovarian cancer. 196 The sentences have been divided into paragraphs for ease of reference. The present invention further relates to somatic [non-heritable] mutations in the BRCA1 gene in human breast and ovarian cancer and their use in the diagnosis and prognosis of human breast and ovarian cancer. Additionally, the invention relates to somatic [non-heritable] mutations in the BRCA1 gene in other human cancers and their use in the diagnosis and prognosis of human cancers. The invention also relates to the therapy of human cancers which have a mutation in the BRCA1 gene, including gene therapy, protein replacement therapy and protein mimetics. The invention further relates to the screening of drugs for cancer therapy. Finally, the invention relates to the screening of the BRCA1 gene for mutations, which are useful for diagnosing the predisposition to breast and ovarian cancer." The invention is said to be "an isolated polynucleotide comprising all, or a portion of the BRCA1 locus or of a mutated BRCA1 locus, preferably at least eight bases and not more than about 100 kb in length". The locus of a gene refers to its location. The "[d]etailed description of the invention" further states: "It is a discovery of the present invention that the BRCA1 locus which predisposes individuals to breast cancer and ovarian cancer, is a gene encoding a BRCA1 protein, which has been found to have no significant homology with known protein or DNA sequences. This gene is termed BRCA1 herein. It is a discovery of the present invention that mutations in the BRCA1 locus in the germline [heritable] are indicative of a predisposition to breast cancer and ovarian cancer. Finally, it is a discovery of the present invention that somatic [non-heritable] mutations in the BRCA1 locus are also associated with breast cancer, ovarian cancer and other cancers, which represents an indicator of these cancers or of the prognosis of these cancers. The mutational events of the BRCA1 locus can involve deletions, insertions and point mutations within the coding sequence and the non-coding sequence. We have discovered that there are mutations in the coding sequence of the BRCA1 locus in kindreds which are responsible for the 17q-linked cancer susceptibility known as BRCA1. This gene was not known to be in this region." (emphasis added) The Patent contains 30 claims. Claims 1-3 are disputed. Each of those claims is to a product, not a process. Those claims are: "1. An isolated nucleic acid coding for a mutant or polymorphic BRCA1 polypeptide, said nucleic acid containing in comparison to the BRCA1 polypeptide encoding sequence set forth in SEQ.ID No:1 one or more mutations or polymorphisms selected from the mutations set forth the polymorphisms set forth in Tables 18 and 19[197]. in Tables 12, 12A and 14 and An isolated nucleic acid as claimed in claim 1 which is a DNA coding for a mutant BRCA1 polypeptide, said DNA containing in comparison to the BRCA1 polypeptide encoding sequence set forth in SEQ.ID No:1 one or more mutations set forth in Tables 12, 12A and 14. An isolated nucleic acid as claimed in claim 1 which is a DNA coding for a polymorphic BRCA1 polypeptide, said DNA containing in comparison to the BRCA1 polypeptide encoding sequence set forth in SEQ.ID No:1 one or more polymorphisms set forth in Tables 18 and 19." The terms "mutation" and "polymorphism" are not defined in the Patent. Claims 4-30 of the Patent are not in dispute. In general terms, those claims are to various applications arising from the fact that Myriad located the BRCA1 gene and concluded that specific mutations or polymorphisms in the BRCA1 gene are indicative of a predisposition to breast cancer and ovarian cancer. They are claims to a probe (claim 4), vectors (claims 5-7), methods of producing mutant or polymorphic BRCA1 polypeptides (claims 8-9), preparations and uses of polypeptides (claims 10-16) and various methods of diagnosis (claims 17-30). Questions of novelty and inventive step (s 18(1)(b)) and usefulness198 (s 18(1)(c)) were not in issue. In particular, it was accepted that the identification 197 In claims 1 and 3, the Patent refers to "polymorphisms set forth in Tables 18 and 19". The parties agreed that the reference to Table 19 is an error and should be disregarded: Cancer Voices Australia v Myriad Genetics Inc (2013) 99 IPR 567 at 580 [68]. These reasons will not subsequently refer to Table 19. 198 At least in the sense that it was not in dispute that the products in the disputed claims "[brought] about a useful effect, being a state of knowledge for the person upon which to contemplate, or assess, treatment": D'Arcy v Myriad Genetics Inc (2014) 224 FCR 479 at 483 [8]. of the BRCA1 gene, its nucleic acid sequence and the characteristics and sites of the mutations involved an inventive step resulting from data collated from over 13,000 patients. That inventive step is not the subject of any claim. This is not surprising. The inventive step could not have been patentable; it was no more than facts. The question in this appeal is whether what is claimed in claims 1-3 is the proper subject of letters patent. To answer that question, it is necessary to understand the relevant science and consider what in fact Myriad did. Cells Cells can be divided into three main parts – the cell membrane, the nucleus and the cytoplasm. The cell membrane defines the outer boundary of the cell and separates its contents from the cell's environment. The nucleus appears as a cell within a cell. It is demarcated within the cell by the nuclear membrane. The nucleus remains in constant communication with other sub-structures in the cytoplasm. The cytoplasm comprises everything between the cell membrane and the nuclear membrane. Nucleic acids – DNA and RNA Deoxyribonucleic acid (DNA) and ribonucleic acid (RNA) are found in the nucleus. DNA contains the genetic information that directs the growth, development, maintenance and reproduction of the human body. DNA is made up of repeating monomer units, connected by chemical bonds to form one larger molecule. DNA consists of a long chain of many copies of small molecules called nucleotides (referred to as a polynucleotide chain). The entirety of the DNA sequence in a human (the human genome) comprises approximately 3.2 billion individual nucleotides. The genetic information in DNA is copied by the cell into RNA, a chemically related form. DNA and RNA are collectively referred to as nucleic acids. It is possible to create synthetic DNA. For example, complementary DNA (cDNA) is an artificial form of DNA which is made using a form of RNA (mRNA) as a template to create DNA that is complementary, but not identical, to naturally occurring DNA. cDNA is used in research. Nucleotides, codons, proteins A nucleotide – the building block of DNA – is comprised of three separate chemical groups: a nitrogenous base, a phosphate group and a five-carbon sugar group. There are four types of nitrogenous bases found in DNA. These nitrogenous bases (usually referred to by their initial letter) are adenine (A), guanine (G), cytosine (C) and thymine (T). RNA has uracil (U) instead of thymine. The genetic code consists of groups of three nucleotides. These nucleotide groups are called triplets or codons. The grouping of four possible nucleotides in DNA (A, G, C, T) and RNA (A, G, C, U) into different codons permits 64 possible combinations of nucleotides. Most of these 64 codons code for or represent an amino acid. There are 20 different amino acids known in nature. The sequences of the codons, representing specific amino acid sequences, are used by the cell to produce or regulate the production of a particular protein. A number of codons code for the same amino acid. Indeed, most amino acids have multiple codons. This means that a number of DNA or RNA sequences can code for the same protein. A protein is a polypeptide (or in some cases, a number of polypeptides) comprised of a sequence of amino acids linked together. Each type of protein has its own unique amino acid sequence. Proteins come in an immense variety of different shapes and sizes, and perform many different and complex functions. Some proteins regulate cell division. Exons and introns In its natural state, the DNA sequence that encodes a specific protein is not present as a single continuous sequence. The sequence coding for a particular protein is present as a series of fragments along the DNA molecule, called exons. Each exon is separated from adjacent exons by a stretch of non- coding DNA, called introns. Introns do not encode a protein but they contain information that helps regulate the utilisation by the cell of the encoded information in the exons. So where are we? A DNA sequence comprises nucleotides grouped into threes, referred to as codons. The codons code for certain amino acids, which in turn are linked together to make a protein. It is now necessary to examine what happens when the sequence of codons that encodes a protein is mutated or damaged. When this occurs, abnormal or uncontrolled cell division may result. This abnormal or uncontrolled cell division is referred to as cancer. DNA variations, mutations and polymorphisms The sequence of DNA is highly variable between people. If the complete DNA sequences of any two unrelated people are compared, there will be millions of points in the sequences at which the two people's sequences differ. These differences account, in part, for differences in physical and mental attributes in people drawn from the general population, and for the different risks of disease identified in different families. For medical purposes, the variations in DNA sequence between people can be divided into three categories. First, a variation in a person's DNA sequence can interfere with gene function and place that person at high risk of developing disease. These variations (referred to as mutations) usually occur in an exon and result in some abnormality in the protein derived from that gene. The variations can also occur in an intron and interfere with the regulation of the production of a protein from that gene. In either case, the variations are of clinical consequence and are relevant to medical decision-making. Mutations may cause disease, or be benign. Mutations are private to an individual or that individual's immediate family. Where a variation is an insertion or deletion of one nucleotide in the coding sequence of the gene, the variation changes the information content of the gene and almost always causes the gene to malfunction. Such variations are deemed to cause disease unless there is clear evidence to the contrary. The coding sequence of a gene typically consists of a thousand or more nucleotides. The deletion or duplication of any one of these nucleotides is likely to cause the gene to malfunction. In other words, a gene could potentially have more than a thousand mutations. Second, other variations in a person's DNA sequence are referred to as polymorphisms. These may occur in an exon and result in a difference in the protein derived from that gene. The variations may alternatively reside in an intron and have no impact on the formation of the protein from that gene. A polymorphism is a genetic variant which has arisen in a distant common ancestor and is therefore not unique to an individual or that individual's immediate family. Forty per cent of women in the general female population have one or more polymorphisms in the BRCA1 gene that are not found in the remaining 60 per cent of the population. Third, there are many variations in a person's DNA sequence that have been identified but have not yet been categorised as mutations or polymorphisms. These variations may result in some difference in the protein derived from that gene, but are of unknown clinical consequence. These variations are irrelevant to medical decision-making unless new knowledge allows them to be categorised as mutations or polymorphisms in the future. Approximately one woman in 800 in the general female population has a mutation in the BRCA1 gene sequence that places her at high genetic risk of developing breast cancer and ovarian cancer. In any one year, a variation of unknown clinical significance is identified in approximately 15 per cent of women having tests for unknown variations in the BRCA1 gene. Extracting, isolating and sequencing DNA Myriad extracted, isolated and sequenced the DNA of the BRCA1 gene in what the appellant accepts was a "fine piece of science". However, in doing so, Myriad used well-established processes of DNA extraction, isolation and sequence comparison. DNA is typically obtained from cells removed from a sample of tissue or blood extracted from an individual. A sample will need to be processed before it is tested. It is necessary to break open the cells and expose the DNA. The goal of processing the sample is to remove the DNA from its normal cellular environment without corrupting the information content of the DNA. The DNA sequence of the processed DNA must accurately reflect the sequence of the DNA in the patient's cells for the pathology test to have any medical validity and be relevant for decision-making. These extraction processes are not new. The DNA derived by an extraction process will contain all of the DNA molecules from many cells. The specific region of DNA that is the target of the test may account for only a tiny fraction of the DNA present in the sample. The entire BRCA1 gene (exons plus introns) represents only 0.003 per cent of the total DNA obtained by extraction processes. The coding sequence of the BRCA1 gene accounts for an even smaller proportion (0.0002 per cent) of the DNA obtained by extraction processes. The DNA sample is then amplified by removing or diluting DNA that is not of interest. This is usually done by making multiple copies of short fragments of the sequence that is of interest by a chemical process called polymerase chain reaction (PCR). In an hour, a technician can make millions of copies of a fragment so that the concentration of the fragment is dramatically increased while the remaining DNA stays at its initial concentration. The DNA sequence of the amplified fragment can then be determined by a variety of methods, either as a test for unknown variations or a test for known variations. The DNA sequence identified in the sample is compared to a normal reference sequence. A reference sequence may be defined by the laboratory doing the test or by reference to international reference sequences developed under the auspices of professional bodies and government agencies in the United States of America and Europe. During cross-examination, Dr Suthers, who was called by the appellant to give expert evidence, explained amplification and sequencing in these terms: "The conventional way of doing it was that you would break it up into small pieces, you would amplify them and you would stitch them together. Talking colloquially? – You may stitch the information together. You may, in some situations, physically stitch the amplified DNA together, but usually it was a matter of taking discrete bits of information from each of the fragments and knitting those together conceptually into information such as sequence ID number 1. … When you talk about information, what you're doing is you're seeking to identify the nitrogenous bases? – Yes. So that what you're doing, is you take the gene, you break it up and amplify the bits so that you can identify the nitrogenous bases that are there found … and from that either physically or intellectually, you can put the sequence of bases – the bases that you believe are relevant for coding the polypeptide? – Correct." Differences between the sequence from the patient's sample and the reference sequence are then reported. The methods for identifying the differences are not new. In claims 1-3, the reference sequence is SEQ.ID No:1. SEQ.ID No:1 is a DNA sequence for the BRCA1 gene. It consists of 5,914 base pairs and represents the coding sequence of a nucleic acid (cDNA) which encodes the BRCA1 polypeptide. It is an artificial, constructed combination of sequences from cDNA clones, hybrid selection sequences and amplified PCR products. It is set out in the Patent. Approach to proper construction of a patent A patent grants a monopoly. A patent gives the patentee "the exclusive rights, during the term of the patent, to exploit the invention and to authorise another person to exploit the invention"199. What then is a patentable invention? The primary or threshold requirement of a "patentable invention" is that it be an "invention"200. The first step is to ask whether what is identified in the claim is an invention. Of course, establishing that there is an invention does not lead to the conclusion that a patent should be granted. Other requirements in the Act must be satisfied201. An invention is a necessary, but not sufficient, element of entitlement to a patent. 200 N V Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (1995) 183 CLR 655 at 663; [1995] HCA 15. 201 See, eg, ss 18 and 40. There is no exhaustive or positive definition of "invention". Relevantly, s 18(1)(a) of the Act provided that a patentable invention is an invention that is "a manner of manufacture within the meaning of section 6 of the Statute of Monopolies". "[I]nvention" was defined in Sched 1 to the Act to mean "any manner of new manufacture the subject of letters patent and grant of privilege within section 6 of the Statute of Monopolies". The question is therefore whether what is identified in the claim is "a proper subject of letters patent according to the principles which have been developed for the application of s 6 of the Statute of Monopolies"202. To determine whether what is claimed falls within this definition, it is necessary to look at the subject matter of each claim separately and independently from other claims in the patent203. And the enquiry is necessarily fact-specific204. It is approached on a case-by-case basis205. Discovery, invention, work of nature, laws of nature Whether there is an invention falls to be determined by reference to the specific terms of the claim and not by first seeking to characterise the claim (or elements of it) as a "discovery", rather than an "invention", or as "naturally occurring" or "a principle of nature" or by seeking to apply some other general label. There may be discovery without invention206. But the distinction between discovery and invention is not precise enough to be other than misleading207. 202 s 18(1)(a) and Sched 1; N V Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (1995) 183 CLR 655 at 667 citing National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252 at 269; [1959] HCA 67. 203 s 18; Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [No 2] (2007) 235 CLR 173 at 221 [148]; [2007] HCA 21. 204 See, eg, NRDC (1959) 102 CLR 252 at 265-268. 205 Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd (2013) 253 CLR 284 at 300-302 [16]-[19]; [2013] HCA 50. 206 NRDC (1959) 102 CLR 252 at 264. 207 NRDC (1959) 102 CLR 252 at 264. Terms such as "the work of nature" and "the laws of nature" are also vague, ambiguous and malleable208. As was said in National Research Development Corporation v Commissioner of Patents, "[e]verything that happens may be deemed 'the work of nature', and any patentable composite exemplifies in its properties 'the laws of nature'. Arguments drawn from such terms for ascertaining patentability could fairly be employed to challenge almost any patent"209. It follows that the appellant's contentions that naturally occurring things, or products or phenomena or principles of nature210, are excluded as a proper subject matter of a patent, and that a distinction can and should be drawn between the "discovery of one of nature's laws" and of its "application to some new and useful purpose"211, should not be accepted as providing a basis for allowing the appeal. The question to ask is whether what is identified in the claim is a proper subject of letters patent according to the principles which have been developed for the application of s 6 of the Statute of Monopolies. In this appeal, the answer to that question depends on the identification of the subject matter of the disputed claims. Subject matter of the claims What then is the subject matter of the claims? For present purposes it is sufficient to focus on claim 1, as claims 2 and 3 are derivative, or a subset, of claim 1. Claim 1 is: "An isolated nucleic acid coding for a mutant or polymorphic BRCA1 polypeptide, said nucleic acid containing in comparison to the BRCA1 polypeptide encoding sequence set forth in SEQ.ID No:1 one or more mutations or polymorphisms selected from the mutations set forth in Tables 12, 12A and 14 and the polymorphisms set forth in Tables 18 and 208 NRDC (1959) 102 CLR 252 at 263-264. 209 (1959) 102 CLR 252 at 264. 210 cf Diamond v Chakrabarty 447 US 303 at 309 (1980). 211 Advanced Building Systems Pty Ltd v Ramset Fasteners (Aust) Pty Ltd (1998) 194 CLR 171 at 190 [34]; [1998] HCA 19. The subject matter of the claim is not all isolated nucleic acids or isolated nucleic acid generally. It is not a claim to a process. The Patent does not describe how the nucleic acid is isolated. That is not surprising. There is no dispute that the methods involved in isolating and sequencing nucleic acid were well known. Indeed, nucleic acids have been isolated since at least the early 1990s and, in any case, prior to Myriad's isolation of the nucleic acids the subject of the claim. Claim 1 is a product claim. The claim is to a product comprised of isolated nucleic acid having a particular characteristic. The characteristic is the isolated nucleic acid coding for a mutant or polymorphic BRCA1 polypeptide, where the sequence of the isolated nucleic acid contains one or more of the mutations or polymorphisms set forth in particular tables. It is the combination of isolated nucleic acid and the existence of one or more of the mutations or polymorphisms that provides the subject matter of the claim. The isolation permits identification of the presence of the characteristic. And without the characteristic, the claimed product does not exist. It is this interrelationship between the isolation of the nucleic acid and the identification of the characteristic which demonstrates why claim 1 is not a claim to a patentable product. The balance of this section of the judgment explains why this is so. It is structured as follows: The claim is to multiple products, not a single product: [231]-[239]; (2) Although Myriad claims a class of chemical compounds as a product, it cannot delineate the bounds of its claim by reference to chemical composition: [240]-[243]; (3) Myriad did not create, make or alter the characteristic, the code: [244]- There is no idea, concept or principle embodied in a manner of new manufacture: [250]-[258]; and The claim is too broad: [259]-[264]. Claim to multiple products, not a single product First, the claim is not a claim to a single product. Each time a person's nucleic acid with the characteristic is isolated, the result is different. The sources of the variations are numerous. It is necessary to explain why that is so. Length of sequence varies The Patent specification states that the DNA sequences used in the least about five codons invention will usually comprise "at claimed (15 nucleotides), more usually at least about 7-15 codons, and most preferably, at least about 35 codons"212. That is, one can take a variable number of nucleotides for a sample. There is no uniformity in the size of the sample. The length of the sequence will likely vary for each sample. To fall within the claim, those sequences, whatever their length, are required to have a particular characteristic – the isolated nucleic acid coding for a mutant or polymorphic BRCA1 polypeptide, where the sequence of the isolated nucleic acid contains one or more of the mutations or polymorphisms set forth in particular tables. Composition of each sample varies There are two aspects to this variation – substance and method. First, as a matter of substance, the sequence of DNA is highly variable between people. As has been explained213, if the complete DNA sequences of any two unrelated people are compared, there will be millions of points at which the two people's sequences will differ. Many variations in a person's DNA sequence are of no clinical significance. But just because a genetic variation is of no clinical significance does not mean that it does not exist. The 54 mutations identified in the Patent account for about three per cent of the mutations in the BRCA1 gene that have been documented so far. The number, and extent, of mutations will differ between patients. So, for example, in South Australia, about 10 per cent of women tested have a mutation of some sort in the BRCA1 gene. As noted earlier, approximately one woman in 800 in the general female population has a mutation in the BRCA1 gene that places her at high genetic risk of developing breast cancer and ovarian cancer. Some evidence of the extent of these variations can be seen in the Patent specification and, in particular, in Tables 12, 12A and 14 (recording the mutations) and Table 18 (recording the polymorphisms), which together provide the characteristic for claim 1. More than 50 separate codons are identified as affected by an identified mutation or polymorphism. The location of the codons is not uniform. The codons are randomly located throughout the sequence. For example, in Tables 12, 12A and 18, for each identified codon, a specific nucleotide change and a specific amino acid change (or frameshift) is identified. For one particular codon, two different nucleotide changes giving rise to the same amino acid change are identified. One particular nucleotide change and resulting amino acid change (which acted as a stop) is identified as affecting 212 See D'Arcy v Myriad Genetics Inc (2014) 224 FCR 479 at 512 [180]. 213 See [203] above. two different codons. For two particular codons, two different mutations are identified. Second, there are at least two methods by which the composition of the patient's sample (in this case, the sequence of nucleotides in the BRCA1 gene) is identified. As has been explained214, the amplified DNA may be physically stitched together or information from fragments can be conceptually stitched together. A product where the amplified DNA has been physically stitched together appears differently from one where the DNA is conceptually, but not physically, stitched together. The products would appear differently, yet each could fall within claim 1. The claim is to multiple products, not a single product. Myriad cannot delineate bounds of claimed class of chemical compounds Myriad describes the claim as being to a class of chemical compounds. Isolated nucleic acid with one or more of the identified mutations or polymorphisms is a chemical compound. However, as a result of one or more of the variations identified above, it is not possible for Myriad to record all of the various chemical compounds (or products) that might be produced by isolating an individual's nucleic acid. For example, as Myriad accepted during argument, the claim is to an "extremely wide number" of chemical compounds where the compound formulae would vary according to the number of sequences extracted but the compound would nevertheless contain one or more of the specific mutations or polymorphisms. As has been seen, changes in chemical composition are not limited to variation in the number of nucleotides215. So, although the claimed product is a chemical compound, Myriad did not and cannot delineate the bounds of the class of compounds by reference to the chemical composition of the class of the claimed product. Instead, Myriad sought to delineate the boundaries of the claim by reference to what it described as the "characteristics identified within the claim" – the specific mutations and polymorphisms, represented by the code. It is then necessary to consider the identified code. 214 See [214] above. 215 See [203]-[209] above. Myriad did not create, make or alter the characteristic, the code Claim 1 is to "[a]n isolated nucleic acid coding for a mutant or polymorphic BRCA1 polypeptide, said nucleic acid containing in comparison to the BRCA1 polypeptide encoding sequence set forth in SEQ.ID No:1 one or more mutations or polymorphisms selected from the mutations set forth in Tables 12, 12A and 14 and the polymorphisms set forth in Tables 18 and 19" (emphasis added). "Coding" is not defined in the Patent. "Encode" is defined in the Patent in the following terms: "A polynucleotide is said to 'encode' a polypeptide if, in its native state or when manipulated by methods well known to those skilled in the art, it can be transcribed and/or translated to produce the mRNA for and/or the polypeptide or a fragment thereof. The anti-sense strand is the complement of such a nucleic acid, and the encoding sequence can be deduced therefrom." The Full Court identified a distinction between the terms "code for" and "encode"216. The distinction drawn was that "code for" was passive and was to be understood as "carrying the code" or "having the potential to produce the polypeptide", whereas "encode" was active and meant "actually to produce the polypeptide" (original emphasis). Before this Court, it was common ground that on the proper construction of claim 1 in the Patent, "coding for" refers to the possession of a relevant code. The relevant code is identified as one or more of the specific mutations or polymorphisms listed in specified tables in the Patent. Myriad identified the location of the BRCA1 gene. Myriad identified its nucleic acid sequence and the characteristics and sites of specific mutations and polymorphisms from data collated from over 13,000 patients. Myriad did not create, make or alter any of the nucleic acid sequence in the BRCA1 gene. Myriad did not create, make or alter any one of the mutations and polymorphisms listed in the tables specified in the claim. Each mutation and polymorphism identified in the tables has the same sequence in its native state in the cell and when isolated. Indeed, as addressed above217, each sample needs to contain the same sequence in the cell and when isolated if it is to be usefully assessed. 216 D'Arcy v Myriad Genetics Inc (2014) 224 FCR 479 at 511 [175]. 217 See [210] above. Specific tables identify and list specific mutations and polymorphisms represented by the code. That the specific mutations and polymorphisms are indicative of a predisposition to breast cancer and ovarian cancer is a fact. That fact existed before Myriad worked it out. It is unsurprising that Myriad does not seek to patent that fact. A fact is not a manner of new manufacture within the meaning of s 6 of the Statute of Monopolies. More is required. No idea, concept or principle embodied in a manner of new manufacture Another way of testing claim 1 is to identify what was Myriad's idea, concept or principle and what it did with that idea, concept or principle. In Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [No 2], this Court stated218: "Distinctions between the idea or concept or principle informing an invention and the means of carrying it out or embodying it in a manner of new manufacture have long been made despite certain expressions of caution from time to time. In Hickton's Patent Syndicate v Patents and Machine Improvements Co Ltd, Fletcher Moulton LJ stated that 'invention may lie in the idea, and it may lie in the way in which it is carried out, and it may lie in the combination of the two'. In a sense, an idea simpliciter cannot be patented, as no patent will be granted except to a manner of manufacture within s 6 of the Statute of Monopolies. An idea which is part, even the main part, of an inventive step 'has got to end in a new method of manufacture'." (original emphasis; footnotes omitted) In this passage, the reference to Fletcher Moulton LJ's statement in Hickton's Patent Syndicate v Patents and Machine Improvements Co Ltd219 was incomplete. The statement by Fletcher Moulton LJ read: "In my opinion, invention may lie in the idea, and it may lie in the way in which it is carried out, and it may lie in the combination of the two; but if there is invention in the idea plus the way of carrying it out, then it is good subject-matter for Letters Patent." (emphasis added) What was Myriad's idea, concept or principle, and what did Myriad do with that idea, concept or principle that can be recognised as carrying out that idea or embodying that idea in a manner of new manufacture? 218 (2007) 235 CLR 173 at 198-199 [59]-[60]. 219 (1909) 26 RPC 339 at 348. Here, having located the BRCA1 gene and identified its nucleic acid sequence, Myriad's idea, concept or principle is that specific mutations or polymorphisms in that sequence suggest a predisposition to breast cancer and ovarian cancer. How then is that idea carried out in claim 1? It is not. It is not and could not be carried out – as claim 1 suggests – by creating a product comprising isolated nucleic acid from a patient which contains the identified characteristic in any one of its many forms. As has been seen, Myriad does not claim the methods by which it isolates the nucleic acid or the methods by which it identifies the sequence of the patient's nucleic acid. Myriad does not claim the characteristic. Claim 1 is not a claim to the idea, concept or principle. What then did Myriad do? It took the idea, concept or principle that specific mutations or polymorphisms in that sequence suggest a predisposition to breast cancer and ovarian cancer and moved to carry out that idea, concept or principle, or embody it in a manner of new manufacture, in claims 4-30. The validity of those claims is not in issue. Claim 4 may be taken as an example. In simple terms, it comprises a nucleic acid probe in which the nucleotide sequence is a portion of an isolated nucleic acid with the characteristic identified in claim 1. In general terms, a probe is a fragment of isolated nucleic acid of variable length which is used to detect the presence of complementary nucleotide sequences and to investigate tissue samples to see whether particular genes are being expressed. A probe for BRCA1 alleles may be derived from sequences of the BRCA1 region or its cDNA. Probes are usually constructed artificially and have a radioactive label attached. The invention in claim 4 carried into effect the idea that specifically identified mutations or polymorphisms in a sequence of the BRCA1 gene suggest a predisposition to breast cancer and ovarian cancer by testing for the presence of one or more of the specifically identified mutations or polymorphisms. That is an invention. Breadth of claim in the Patent Myriad acknowledges that a sample taken from a patient will infringe claim 1 if one or more of the specific mutations and polymorphisms identified in the claim are present, even if the testing is not directed at the BRCA1 gene or the identified mutations and polymorphisms. That is a problem. It is a problem because it will not be evident whether the isolated nucleic acid contains one or more of the specific mutations and polymorphisms identified in the claim until the isolated nucleic acid has been tested. The consequence is that, if claim 1 is valid, when a researcher or medical practitioner isolates the BRCA1 gene in a woman who does not have one or more of the specific mutations or polymorphisms, there is no infringement of the Patent. But if the woman does have one or more of the specific mutations or polymorphisms, there is infringement of the Patent. In both cases, the conduct of the researcher or medical practitioner is the same. Put differently, if claim 1 is valid, it will in practice prevent isolation and testing of the BRCA1 gene even if a researcher or medical practitioner is diagnostically testing for a purpose unrelated to detection of predisposition to one of the identified cancers. Not only that, Myriad would have an exclusive right to isolate the nucleic acid without having claimed the process of isolation. Those consequences demonstrate that if claim 1 is valid it would extend the concept of what is patentable subject matter within s 6 of the Statute of Monopolies and therefore s 18(1)(a) of the Act, and the limits of the monopoly that would be granted, too far. As French CJ said in Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd220, there is a public interest in using the grant of a monopoly to encourage technical innovation. But French CJ also acknowledged a competing public interest "in ensuring unconstrained access by medical practitioners and their patients to new medical methods and processes"221. Here, a grant of a monopoly for claim 1 has the potential to inhibit other researchers and medical practitioners from diagnostically testing the BRCA1 gene for an entirely different purpose. Here, unlike in Apotex, the interests of inventors, investors and the public will not conflict if the patentability of claim 1 is rejected. Those interests will not conflict because other researchers and medical practitioners will be able to continue to isolate and test the BRCA1 gene, regardless of the purpose for which they are testing, and Myriad will have the benefit of the patentability of the applications specified in claims 4-30. In other words, Myriad cannot monopolise the many iterations of the claimed product but it can exploit the applications that have been constructed to take advantage of the knowledge it has about the location and identity of some of the mutations and polymorphisms in the BRCA1 gene that indicate a predisposition to breast cancer and ovarian cancer. 220 (2013) 253 CLR 284 at 317 [45]. 221 (2013) 253 CLR 284 at 317 [45]. Proper subject matter of a patent? The subject matter of each of claims 1-3 is not patentable according to the principles which have been developed for the application of s 6 of the Statute of Monopolies. No single product is identified. Although each iteration of the claimed product is a chemical compound, Myriad did not and cannot delineate the bounds of the class of chemical compounds by reference to the chemical composition of every possible product. Instead, Myriad sought to delineate the boundaries of each claim by reference to what it described as isolated nucleic acid having the "characteristics identified within the claim" – the specific mutations and polymorphisms, represented by the code. Myriad did not create, make or alter those specific mutations and polymorphisms. Myriad identified that specific mutations and polymorphisms in the BRCA1 gene indicated a predisposition to breast cancer and ovarian cancer. That fact existed before Myriad worked it out. Claims 1-3 are not claims to the fact that specific mutations and polymorphisms in the BRCA1 gene are indicative of a predisposition to breast cancer and ovarian cancer. Nor are claims 1-3 claims to applications of that fact. Instead, claims 1-3 are claims to a product: an isolated nucleic acid which has one or more specific mutations or polymorphisms in the BRCA1 gene. The methods of isolating the nucleic acid were not new and were not claimed. The methods of identifying the mutations and polymorphisms in the BRCA1 gene were not new and were not claimed. Claims 1-3 are to any isolated example of the BRCA1 gene which discloses the characteristic – one or more specific mutations and polymorphisms in the BRCA1 gene that are indicative of a predisposition to breast cancer and ovarian cancer. For those reasons, there is a lack of invention in claims 1-3. At this point, something more should be said about NRDC and about the reasons given in the Full Court below. NRDC and the Full Court below In NRDC, the Court concluded that, in order to be the proper subject of letters patent, a method must have "as its end result an artificial effect falling squarely within the true concept of what must be produced by a process if it is to be held patentable"222. The Court continued: 222 (1959) 102 CLR 252 at 277. "The effect produced by the appellant's method exhibits the two essential qualities upon which 'product' and 'vendible' seem designed to insist. It is a 'product' because it consists in an artificially created state of affairs, discernible by observing over a period the growth of weeds and crops respectively on sown land on which the method has been put into practice. And the significance of the product is economic; for it provides a remarkable advantage, indeed to the lay mind a sensational advantage … Recognition that the relevance of the process is to this economic activity old as it is, need not be inhibited by any fear of inconsistency with the claim to novelty which the specification plainly makes. … [The process] achieves a separate result, and the result possesses its own economic utility". (emphasis added) In CCOM Pty Ltd v Jiejing Pty Ltd223, the passage in NRDC was said to require "a mode or manner of achieving an end result which is an artificially created state of affairs of utility in the field of economic endeavour". The question which arises here is whether the passage extracted at [272] above should be applied to a product claim. Or to put the same question differently – is the existence of "an artificially created state of affairs of utility in [a] field of economic endeavour" sufficient to make a product a proper subject for the grant of a patent? A number of points should be made. First, these passages are not a statute. Like any statements in reasons for judgment they must be read and understood in their context. Second, the issue this Court was addressing in NRDC was a different issue – whether a claimed new process resulted in a product sufficient to attract patentability. As was observed in Grain Pool of Western Australia v The Commonwealth224, NRDC held that "the requirement of a 'vendible product' for a valid process claim meant no more than that the end produced be of utility in practical affairs" (emphasis added). It was not the "effect produced" by the application of the process that was considered patentable. It was the inventive process that was the subject of the patent, which was held valid on the basis that applying it resulted in a product consisting in an artificial state of affairs of economic significance. The passage in NRDC is appropriate when considering the patentability of a process. Third, it is necessary to approach the question of the patentability of a product claim separately and independently. Each claim is a product claim, not a 223 (1994) 51 FCR 260 at 295. 224 (2000) 202 CLR 479 at 502 [45]; [2000] HCA 14. process claim. Each claim is to isolated nucleic acid with a characteristic – the coding for a mutant or polymorphic BRCA1 polypeptide, being one or more of the mutations or polymorphisms selected from the mutations and polymorphisms set forth in particular tables. Fourth, in the present appeal, the application of the passage from NRDC to claims 1-3 is inapposite. It is inapposite because applying or asking what the Full Court below saw as the questions posed in NRDC led to an incorrect approach to the construction of claims 1-3. The approach was incorrect because those questions necessarily required identification of an artificial state of affairs of some economic significance, rather than directing attention to the more fundamental questions "what is the subject matter of the claim", "what is the invention" and "what are the facts and matters which are relied upon to justify a conclusion that the claim contains an invention?" The Full Court's finding that claim 1 was to "an isolated nucleic acid, a chemical molecule characterised in a certain way, which is chemically, structurally and functionally different to what occurs in nature"225 does not take account of the words of the claim. As a matter of substance, each of claims 1-3 focuses on the existence of one or more elements of an identified code: a code which is found in the nucleic acid isolated from a patient and which necessarily must be identical to the coding sequence in that patient. None of the asserted chemical, structural and functional differences identified by the Full Court play any part in the definition of the invention "so far as claimed"226 in each of claims 1-3 or in the description227 of the invention in the specification. To put it in terms of chemical composition, the Full Court's statement that chemical changes in the isolated nucleic acid are of "critical importance"228 is misplaced. The Full Court correctly identified that isolated nucleic acid, removed from the cellular environment, does not act chemically as a template for "dynamic processes that result in the production of the polypeptide"229. But that is not the claimed product. Myriad claims a chemical compound. And Myriad did not and cannot delineate the bounds of the class of compounds by reference to the chemical composition of every possible product. Instead, Myriad sought to delineate the boundaries of each claim by reference to what it described as the 225 D'Arcy v Myriad Genetics Inc (2014) 224 FCR 479 at 514 [194]. 226 ss 18(1)(a) and 40(2)(b). 227 s 40(2)(a). 228 D'Arcy v Myriad Genetics Inc (2014) 224 FCR 479 at 518 [215]. 229 D'Arcy v Myriad Genetics Inc (2014) 224 FCR 479 at 514 [194]. "characteristics identified within the claim" – the specific mutations and polymorphisms, represented by the code. The claimed product is isolated nucleic acid which might provide "a state of knowledge for the person upon which to contemplate, or assess, treatment"230. What enables that is the code. To put it in functional terms, the fact that the isolated DNA has one or more of the characteristics of the code is the function. The fact that isolated nucleic acids cannot produce the natural polypeptide is irrelevant. Production of natural polypeptide is not a characteristic of claims 1-3. To put it in structural terms, the relevant structural attribute is that the product (the isolated DNA from a patient) contains an identical coding sequence to the coding sequence in the patient. The fact that, as a consequence of isolation of the nucleic acid from the cell, other parts of the cell and the DNA are removed in that process is irrelevant. Consequences of invalidity A claim must be valid across its whole scope231. It was common ground that if claims 1-3 did not contain patentable subject matter, then those claims would not be saved where they extend to forms of nucleic acid that have been synthesised in the laboratory (cDNA). Myriad submitted that such a result would put Australia out of step with some of its trading partners including the European Union and the United States of America232. That issue, if it is to be addressed, is a matter for the legislature. It is no basis to extend s 18(1) of the Act to claims 1-3. Conclusion and orders The appeal should be allowed. I agree with the orders proposed in the judgment of French CJ, Kiefel, Bell and Keane JJ. 230 D'Arcy v Myriad Genetics Inc (2014) 224 FCR 479 at 483 [8]. 231 s 18(1)(a); AstraZeneca AB v Apotex Pty Ltd (2014) 226 FCR 324 at 369 [195]. 232 It is important to notice that the claims made in the patents in suit in the United States of America considered in Association for Molecular Pathology v Myriad Genetics Inc 186 L Ed 2d 124 (2013) were claims to the particular genetic sequences and therefore radically different from the disputed claims in this appeal.

HIGH COURT OF AUSTRALIA APPELLANT AND THE QUEEN RESPONDENT [2004] HCA 15 30 March 2004 ORDER 1. Appeal allowed. 2. Set aside the order made by the Court of Criminal Appeal of Western Australia on 1 May 2002 dismissing the appeal. 3. Remit the proceeding to the Court of Criminal Appeal for consideration and determination in accordance with the reasons of this Court. On appeal from Supreme Court of Western Australia Representation: D Grace QC with M L Tudori for the appellant (instructed by Michael Tudori & Associates) D J Bugg QC with D W L Renton for the respondent (instructed by Commonwealth Director of Public Prosecutions) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Criminal law – Sentencing – Federal offences – Appellant convicted of two counts of attempting to obtain possession of prohibited imports to which s 233B, Customs Act 1901 (Cth) applied – Whether sentencing judge applied peculiarly Western Australian sentencing principles – Whether express reference to relevant considerations in s 16A(2), Crimes Act 1914 (Cth) necessary. Criminal law – Sentencing – Federal offences – Appellant convicted of two counts of attempting to obtain possession of prohibited imports to which s 233B, Customs Act 1901 (Cth) applied – Totality principle where sentencing for commission of several offences – Whether sentencing judge must fix sentence for each offence and aggregate them before determining questions of totality or concurrence – Whether sentencing judge may in some circumstances lower each sentence before aggregation – Instinctive or intuitive synthesis approach to sentencing. Criminal law – Sentencing – Federal offences – Appellant convicted of two counts of attempting to obtain possession of prohibited imports to which s 233B, Customs Act 1901 (Cth) applied – One transaction rule – Where two offences contain common element – Effect of factual errors made by Court of Criminal Appeal – Whether factual errors made by Court of Criminal Appeal in dismissing appeal necessarily leads to conclusion that sentencing judge erred – Whether sentence properly reflects consideration of whether defendant was truly engaged upon one multi-faceted course of criminal conduct. Crimes Act 1914 (Cth), ss 16A, 16B, 19(2). Customs Act 1901 (Cth), s 233B. GLEESON CJ. For the reasons given by Gummow, Callinan and Heydon JJ, I agree that the appeal should be allowed and the matter remitted to the Court of Criminal Appeal for further consideration. I agree with Gummow, Callinan and Heydon JJ that the errors identified in the reasoning of the Court of Criminal Appeal do not necessarily require the conclusion that there was error on the part of the sentencing judge. I also agree that the appellant failed to make good a number of arguments suggesting that the Supreme Court of Western Australia has systematically adopted an erroneous approach to the sentencing of federal offenders for multiple offences, or to the application of what is sometimes called the principle of totality. In particular, the submission that there is inconsistency between the principles stated in Mill v The Queen1 and Pearce v The Queen2, and that Pearce effectively eliminated one of the two alternative courses said in Mill to be available to sentencing judges3, should be rejected. Despite an unsuccessful attempt by the appellant to construct various issues of sentencing principle, the ultimate question in the case is whether there was adequate consideration of the merits of the appellant's contention that the sentences imposed paid insufficient regard to the common aspects of the two offences of which he was convicted. In Attorney-General v Tichy4, Wells J said: "It is both impracticable and undesirable to attempt to lay down comprehensive principles according to which a sentencing judge may determine, in every case, whether sentences should be ordered to be served concurrently or consecutively. According to an inflexible Draconian logic, all sentences should be consecutive, because every offence, as a separate case of criminal liability, would justify the exaction of a separate penalty. But such a logic could never hold. When an accused is on trial it is part of the procedural privilege to which he is entitled that he should be made aware of precisely what charges he is to meet. But the practice and principles of sentencing owe little to such procedure; what is fitting is that a convicted prisoner should be sentenced, not simply and indiscriminately for every act that can be singled out and brought within the compass of a technically identifiable conviction, but for what, viewing the circumstances broadly and reasonably, can be characterised as his (1988) 166 CLR 59. (1998) 194 CLR 610. (1988) 166 CLR 59 at 63. (1982) 30 SASR 84 at 92-93. criminal conduct. Sometimes, a single act of criminal conduct will comprise two or more technically identified crimes. Sometimes, two or more technically identified crimes will comprise two or more courses of criminal conduct that, reasonably characterized, are really separate invasions of the community's right to peace and order, notwithstanding that they are historically interdependent; the courses of criminal conduct may coincide with the technical offences or they may not. Sometimes, the process of characterization rests upon an analysis of fact and degree leading to two possible answers, each of which, in the hands of the trial judge, could be made to work justice. The practice of imposing either concurrent or consecutive sentences cannot avoid creating anomalies, or apparent anomalies, from time to time. What must be done is to use the various tools of analysis to mould a just sentence for the conduct of which the prisoner has been guilty. Where there are truly two or more incursions into criminal conduct, consecutive sentences will generally be appropriate. Where, whatever identifiable offences committed, the prisoner was truly engaged upon one multi-faceted course of criminal conduct, the judge is likely to find concurrent sentences just and convenient." the number of technically It may be added that the Crimes Act 1914 (Cth), in s 19, allows for sentences that are partly cumulative, and partly concurrent. And, as was observed in Mill5, a sentencing judge, in a suitable case, may respond to considerations of the kind discussed by Wells J by lowering individual sentences rather than by making sentences wholly or partly concurrent. Ultimately, justice requires due consideration of whether, and to what extent, the appellant "was truly engaged upon one multi-faceted course of criminal conduct", and whether the sentences imposed properly reflected the outcome of that consideration. (1988) 166 CLR 59 at 63. Callinan GUMMOW, CALLINAN AND HEYDON JJ. This appeal raises questions as to the proper approach to sentencing by State Courts of offenders against Federal criminal law who have committed more than one offence. Facts than 5000 Schwarz was a "drug runner". He entered Australia on 2 November 2000, tablets containing a substantial quantity of carrying more 3,4 Methylenedioxymethamphetamine ("ecstasy"), a prohibited import to which s 233B of the Customs Act 1901 (Cth) applied. That quantity was not less than a commercial quantity within the meaning of s 233B(1)(c) of the Customs Act. He also had in his possession more than a trafficable quantity of cocaine, another prohibited import. He was apprehended and agreed to participate in a controlled delivery of inert substances in substitution for the drugs that had by then been confiscated. In accordance with instructions he had been given in Indonesia by the organiser of the importation, Schwarz checked into an hotel at Como in Perth. He telephoned the organiser to seek further instructions. He was asked to provide his room number and was informed that a person would call on him some time before midday to collect the drugs and to pay him for the importation. The person who was to collect the drugs, for which by then inert substances packaged in one parcel had been substituted, was the appellant. The appellant came to Schwarz's room. As he attempted to leave it he was arrested by Australian Federal Police officers. A second co-offender, Smart, who had been sitting in the appellant's sister's car outside the hotel, was also arrested. He was in possession of a substantial sum of cash. At first instance The appellant was charged with four offences, two of which were subsequently withdrawn. The remaining counts to which he pleaded guilty were: "1. On or about 2 November 2000 at Perth the [appellant] did without reasonable excuse, attempt to obtain possession of prohibited imports to which s 233B of the Customs Act 1901 (Cth) applied namely, narcotic goods consisting of a quantity of 3,4 Methylenedioxymethamphetamine (commonly called 'Ecstasy'), being not less than the commercial quantity applicable to that narcotic substance, contrary to s 233B(1)(c) of the Customs Act On or about 2 November 2000 at Perth the [appellant] did without reasonable excuse, attempt to obtain possession of prohibited Callinan imports to which s 233B of the Customs Act 1901 applied namely, narcotic goods consisting of a quantity of Cocaine, being not less than the trafficable quantity applicable to that narcotic substance, contrary to s 233B(1)(c) of the Customs Act 1901." The appellant's plea was heard by the Supreme Court of Western Australia (Scott J). His Honour's sentencing remarks included the following: "The pre-sentence report indicates that you are aged 22, single and unemployed. The report indicates that at the time of this offending conduct you were in debt on a bank loan arising out of your purchase of a motor vehicle which had been damaged in an accident. At a rave party you had been offered $2000 to collect a package and you agreed to do that because the money would assist you with the loan. The pre-sentence report also speaks of your family life and the difficulties that you encountered as a child. It is not insignificant that since the end of 1999 you had a problem with cocaine but always pay for the drugs which you use. That having been said, however, it is quite clear that your motive in being involved in this criminal enterprise was to obtain money for the purpose of meeting your liability under the loan. Your counsel has stressed that you did not know the quantity of drugs that you were to obtain, and I accept that as a fact, but nonetheless you were prepared to take whatever the quantity was and facilitate the release of that quantity into the community in exchange for $2000. Your counsel has also indicated that you made a further statement to the Federal Police which purports to exculpate Smart, the man who was downstairs in your sister's car. It is not necessary for me to make any determination as to whether that statement is the truth or not. It is sufficient for the purposes of sentencing to express the conclusion that a statement made by you for the purpose of exculpating an accomplice is not a matter that entitles you to any credit. You are, however, entitled to credit for pleading guilty on the fast- track and accepting responsibility for your criminal conduct. You are not, in my view, however, entitled to any credit for cooperation, having elected to conceal the identity of Craig6 and having sought to exculpate Smart from criminality. The other matter in your favour is your relative youth and I note that you are only 22 years of age. 6 The person who offered the appellant the money. Callinan I also take into account the many character references presented on your behalf that speak highly of you. It is frequently the case in matters of this sort that persons who are well regarded in the community are selected as couriers. The reason is that they attract no suspicion. For that reason references do not carry the same weight as they would in relation to other offences. Counsel for the Crown submitted that your involvement should be seen as equivalent to that of Schwarz. In my view, that is not so. Schwarz was responsible for bringing these illicit drugs into Australia while you had no direct involvement in that aspect of this illegal transaction. Your part was to collect the drugs from Schwarz and to facilitate the distribution of those drugs in this country by passing them on to Craig or disposing of them at his direction. I have taken into account the authorities referred to both by your counsel and by the prosecutor which relate to similar quantities of ecstasy and the matters contained in section 16A(2) of the Crimes Act 1914. In this case, however, not only were you involved in attempting to obtain the ecstasy but also the cocaine, which was part of the package which you were to take possession of. That, in my view, adds to the seriousness of your conduct." His Honour said that he considered the appropriate sentence on count 1 to be imprisonment for 10 years, and on count 2 imprisonment for 5 years to be served cumulatively. His Honour reduced the sentence imposed upon count 2 on account of the "totality principle". A deduction of 3½ years was made for the appellant's "fast-track" plea of guilty. Because of his acceptance of responsibility for his actions, the appellant's head sentence was therefore reduced to 11½ years. His Honour ordered that the term of imprisonment on count 1 be 8 years, and on count 2, 3½ years to be served cumulatively. A single minimum term of 5½ years was imposed in respect of the total of the head sentences. That sentence was deemed to have commenced on 6 March 2001, the date on which the plea was entered and the appellant was taken into custody. The Court of Criminal Appeal of Western Australia The appellant successfully applied for leave to appeal to the Western Australian Court of Criminal Appeal (Malcolm CJ, Wallwork J and White AUJ)7 but the appeal was unanimously dismissed. The Court rejected the appellant's first argument, that the sentencing judge should have, but did not, fix a separate Johnson v The Queen (2002) 26 WAR 336. Callinan sentence for each offence and then proceed to reduce the aggregate of the sentences by directing that one of them be served wholly or partially concurrently with the other. The appellant also argued that the sentencing judge erred by not applying the totality principle. The appellant further submitted that his Honour had disregarded that the actus reus was the same for both counts. Malcolm CJ, with whom the other members of the Court agreed, dealt with the submissions in this way8: "It was submitted that the practice of determining an appropriate aggregate sentence for all offences and then fixing specific sentences for each separate offence so as to arrive at the appropriate aggregate was in error. It was submitted that the approach that ought to have been adopted by the sentencing judge was to affix appropriate penalties for each of the offences and then, by orders effecting concurrency or cumulation, achieve the intended result of the total effective sentence. In my opinion, it is apparent from the approach adopted by the learned judge that his Honour considered that the appropriate sentence for possession of the ecstasy was imprisonment for 10 years, and for attempting to obtain possession of the cocaine was imprisonment for five years. It is clear that the latter sentence was reduced on account of the totality principle, but was made cumulative. While the learned judge did not indicate what the sentence would have been for the attempt in respect of the cocaine, but for the application of the totality principle, it is apparent that the sentence of five years represented a substantial reduction, having regard to the range of sentences commonly imposed in such circumstances for the possession of cocaine or the attempt to obtain possession of heroin. In Serrette v The Queen9 the offender pleaded guilty to the import into Australia of a trafficable quantity of cocaine and also to being in possession of the cocaine so imported. He had 1,431 g (equivalent to 925.4 g pure) of cocaine. Concurrent terms of imprisonment for 10 years were imposed with a non-parole period of six years, after taking into account co-operation with the authorities. This represented a reduction of one-third from 15 years, so far as the head sentence was concerned. Kennedy J noted10 that the credit given for assistance given or provided was now enshrined in legislation: ss 8(5) and 37A of the Sentencing Act 1995 (WA) and s 21E of the Crimes Act. Kennedy J, after referring to (2002) 26 WAR 336 at 343-344 [21]-[23]. (2000) 118 A Crim R 204. 10 (2000) 118 A Crim R 204 at 205. Callinan R v Gallagher11, noted that where an offender is entitled to have assistance to the authorities taken into account, that will usually be on a number of grounds, some of which may overlap with other subjective matters to be taken into account in his favour. Kennedy J also said12 that any intervention by the Court of Criminal Appeal would amount to a mere substitution of the opinion of the appeal court for that of the sentencing judge. In Pearce v The Queen13, McHugh, Hayne and Callinan JJ said that: 'To an offender, the only relevant question may be "how long", and that may suggest that the sentencing judge or appellate court should have regard only to the total effective sentence that is to be or has been imposed on the offender. Such an approach is likely to mask error. A judge sentencing an offender for more than one offence must fix an appropriate sentence for each offence and then consider questions of cumulation or concurrence, as well, of course, as questions of totality14. Sentencing is not a process that leads to a single correct answer arrived at by some process admitting of mathematical precision15. It is, then, all the more important that proper principle be applied throughout the process. Questions of cumulation and concurrence may well be affected by particular statutory rules (see Crimes Act, s 444(2) and (3) [now repealed]; Sentencing Act 1989 (NSW), s 9; see also Sentencing Act 1991 (Vic), s 16). If, in fixing the appropriate sentence for each offence, proper principle is not applied, orders made for cumulation or concurrence will be made on an imperfect foundation. 11 (1991) 23 NSWLR 220 at 227 per Gleeson CJ. 12 (2000) 118 A Crim R 204 at 206. 13 (1998) 194 CLR 610 at 623-624 [45]-[48]. 14 Mill v The Queen (1988) 166 CLR 59. 15 cf House v The King (1936) 55 CLR 499. Callinan Further, the need to ensure proper sentencing on each count is reinforced when it is recalled that a failure to do so may give rise to artificial claims of disparity between co-offenders or otherwise distort general sentencing practices in relation to particular offences16.' It may be accepted that the approach, which ought to have been adopted by the sentencing judge in the present case, was to fix appropriate penalties for both offences, then consider the application of the totality principle and, in particular, whether any adjustment needed to be made to either of the sentences imposed to achieve the total effective sentence which was consistent with the application of the principle. In my opinion, it is implicit that the learned judge determined what he considered to be an appropriate sentence for the possession of cocaine and then reduced that on account of the totality principle. To the extent there was an omission in the process, it was a failure to refer to the starting point or the sentence which would otherwise have been imposed, so that the reduction or discount on account of the totality principle was not articulated. While the approach adopted by the learned Judge was not exactly in accord with principle, it does not necessarily follow that there has been a miscarriage of justice: see Heryadi v The Queen17; Kilner v The Queen18. It was also submitted on behalf of the applicant, however, that, in this case, a different sentence ought to have been passed, as the learned judge had failed to give effect to the 'one transaction' rule, which applies where the one act gives rise to more than one criminal offence. Reliance was placed on a further passage in the judgment of McHugh, Hayne and Callinan JJ in Pearce19, namely: 'To the extent to which two offences of which an offender stands convicted contain common elements, it would be wrong to punish that offender twice for the commission of the elements that are common.' 16 R v Lomax [1998] 1 VR 551 at 564 per Ormiston JA. 17 (1998) 19 WAR 383. 18 [1999] WASCA 189. 19 (1998) 194 CLR 610 at 623 [40]. Callinan In my opinion, the application of that approach [reflected in the passage quoted above from Pearce] in the present case would obscure the fact that the [appellant] took possession of two separate parcels of two separate drugs. It was not a case where there were two offences where, for example, an act which was itself an offence was also an element of the second offence. There were two separate offences. There was no common element. The relevant circumstance was that two separate offences of possession and attempting to obtain possession of two different drugs occurred at the same time. In my opinion, this is not an example of the one act comprising two separate offences, but two separate acts, one of obtaining possession of ecstasy and one of attempting to obtain possession of cocaine." (emphasis added) The appeal to this Court As well as relying upon the arguments advanced in the Court of Criminal Appeal to which we have referred, the appellant contends in this Court that the sentencing judge applied sentencing principles applicable to offences under Western Australian law, and not those dictated by Pt 1B of the Crimes Act 1914 (Cth) ("the Act"). The appellant's grounds of appeal in this Court are stated in this way: "The Court of Criminal Appeal of the Supreme Court of Western Australia erred in law in failing to find that the Learned Sentencing Judge had erred in law in failing to apply the provisions of Part 1B of the Crimes Act 1914 (Cth) (specifically, sections 16A and 16B20), as supplemented by the common law of Australia, in the sentencing of the Appellant. 20 "16A Matters to which court to have regard when passing sentence etc In determining the sentence to be passed, or the order to be made, in respect of any person for a federal offence, a court must impose a sentence or make an order that is of a severity appropriate in all the circumstances of the offence. In addition to any other matters, the court must take into account such of the following matters as are relevant and known to the court: the nature and circumstances of the offence; (Footnote continues on next page) Callinan other offences (if any) that are required or permitted to be taken into account; if the offence forms part of a course of conduct consisting of a series of criminal acts of the same or a similar character – that course of conduct; the degree to which the person has shown contrition for the offence . . . if the person has pleaded guilty to the charge in respect of the offence – that fact; the degree to which the person has co-operated with law enforcement agencies in the investigation of the offence or of other offences; the deterrent effect that any sentence or order under consideration may have on the person; the need to ensure that the person is adequately punished for the offence; the prospect of rehabilitation of the person; 16B Court to have regard to other periods of imprisonment required to be served In sentencing a person convicted of a federal offence, a court must have regard any sentence already imposed on the person by the court or another court for any other federal offence or for any State or Territory offence, being a sentence that the person has not served; and any sentence that the person is liable to serve because of the revocation of a parole order made, or licence granted, under this Part or under a law of a State or Territory." Callinan Particulars Failing to apply the sentencing principles enunciated in Mill v The Queen (1988) 166 CLR 59, Postiglione v The Queen (1997) 189 CLR 295 and Pearce v The Queen (1998) 194 CLR 610. Failing to order total concurrence in circumstances where the same actus reus gave rise to separate offences, thus misconstruing and/or misapplying the 'one transaction' rule of sentencing. Imposing an overall effective sentence which infringed the totality principle of sentencing." The proposition contained in the first of the appellant's grounds is largely uncontroversial: that except to the extent stated in ss 16A and 16B of the Act, general common law and not peculiarly local or state statutory principles of sentencing are applicable. That common law principles may apply follows from the use of the words "of a severity appropriate in all the circumstances of the offence ..." in s 16A(1) and the introductory words "In addition to any other matters ..." to s 16A(2) of the Act. The appellant's submissions The appellant put his submission on this ground in various ways. He submitted that although the sentencing judge stated "I have taken into account the authorities referred to both by your counsel and by the prosecutor which relate to similar quantities of ecstasy and the matters contained in section 16A(2) of the Crimes Act 1914", no effort was in fact made by his Honour to particularise those matters and to correlate them with the facts of the case. No reference was made by the sentencing judge to two paragraphs of s 16A(2) of relevance to the circumstances of this case emphasizing the need to ensure that an offender be adequately punished for the offence, and his or her prospects of rehabilitation. The appellant argued that in making the deduction that he did for the "fast track" plea of guilty, the sentencing judge erroneously applied a peculiarly Western Australian sentencing practice, contrary to Pt 1B of the Act. The range of discounts for fast track pleas of guilty to Western Australian offences is between 20-35%21. He submitted that his Honour failed to sentence him by a process of 21 Little v The Queen [2001] WASCA 87 at [13], [17] per Malcolm CJ, Wallwork and Anderson JJ; Chua v The Queen [2001] WASCA 353 at [29] per Wallwork J; Cameron v The Queen (2002) 209 CLR 339 at 352 [42]-[43] per McHugh J, 357 Callinan instinctive synthesis22. Bearing in mind that the sentencing judge had concluded that the appellant's character references "d[id] not carry the same weight as they would in relation to ... offences [other than those involving narcotic goods]", and that there were no other significant mitigating factors, the approach taken by his Honour resembled a two-stage approach, as opposed to one of instinctive synthesis. The appellant urged that a sentence (for the second offence) of five years imprisonment, wholly cumulative, could not be considered to be a sentence of a severity appropriate to all the circumstances of the offence as required by sub-ss 16A(1), (2), and the relevant common law. Such a sentence appeared to be calculated and structured to accord with the Western Australian practice of determining an appropriate aggregate sentence for all offences and then fixing sentences for each separate offence, rather than with the Act. Furthermore, the appellant submitted, the sentencing judge overlooked s 19(2) of the Act which provides that: "Where: a person is convicted of 2 or more federal offences at the same sitting; and the person is sentenced to imprisonment for more than one of the offences; the court must, by order, direct when each sentence commences, but so that no sentence commences later than the end of the sentences the commencement of which has already been fixed or of the last to end of those sentences." His Honour was not empowered by Commonwealth law to order that the second sentence be served cumulatively upon the first23. The next ground argued was that the "totality principle", as part of the common law unaffected by the Act, could and should have been, but was not applied here. The appellant submitted that the principle has been expressed in different ways from time to time, and that there was an inconsistency between 22 AB v The Queen (1999) 198 CLR 111 at 121-122 [16]-[17] per McHugh J, 156 [115] per Hayne J (both in dissent); Wong v The Queen (2001) 207 CLR 584 at 611-612 [74]-[76] per Gaudron, Gummow and Hayne JJ. 23 O'Brien (1991) 57 A Crim R 80 at 87 per Crockett, McGarvie and Phillips JJ. Callinan Mill v The Queen24 and Pearce v The Queen25. In Mill26, Wilson, Deane, Dawson, Toohey and Gaudron JJ adopted a statement from Thomas, Principles of Sentencing27: "'The effect of the totality principle is to require a sentencer who has passed a series of sentences, each properly calculated in relation to the offence for which it is imposed and each properly made consecutive in accordance with the principles governing consecutive sentences, to review the aggregate sentence and consider whether the aggregate is "just and appropriate". The principle has been stated many times in various forms: "when a number of offences are being dealt with and specific punishments in respect of them are being totted up to make a total, it is always necessary for the court to take a last look at the total just to see whether it looks wrong["]; "when ... cases of multiplicity of offences come before the court, the court must not content itself by doing the arithmetic and passing the sentence which the arithmetic produces. It must look at the totality of the criminal behaviour and ask itself what is the appropriate sentence for all the offences".'" "Where the principle falls to be applied in relation to sentences of imprisonment imposed by a single sentencing court, an appropriate result may be achieved either by making sentences wholly or partially concurrent or by lowering the individual sentences below what would otherwise be appropriate in order to reflect the fact that a number of sentences are being imposed. Where practicable, the former is to be preferred." The inconsistency was said to arise between the possibility contemplated in the second last sentence of the passage quoted, of the lowering of each sentence and ordering then that an aggregation of the lowered sentence be served, 24 (1988) 166 CLR 59. 25 (1998) 194 CLR 610. 26 (1988) 166 CLR 59 at 63. 27 2nd ed (1979) at 56-57 (footnotes omitted). 28 (1988) 166 CLR 59 at 63. Callinan and the statement in the joint judgment in Pearce quoted by Malcolm CJ29, that a sentencing judge must fix an appropriate sentence for each offence before considering questions of cumulation and concurrence. Reference was made by the appellant to Postiglione v The Queen30. There McHugh J referred to a statement of King CJ in R v Rossi31, in which the latter sought to identify the sorts of circumstances in which the totality principle should be invoked: "'There is a principle of sentencing known as the principle of totality, which enables a court to mitigate what strict justice would otherwise indicate, where the total effect of the sentences merited by the individual crimes becomes so crushing as to call for the merciful intervention of the court by way of reducing the total effect.'" We would with respect doubt that it is only in a case of an otherwise crushing burden of an aggregation of sentences that the totality principle may be applied. We did not take the respondent here to be submitting that the appellant should serve the aggregate of the two sentences imposed upon him. The contention that the sentencing judge erroneously applied peculiarly Western Australian sentencing principles to the appellant's disadvantage has no merit. To give the appellant the benefit of the so-called "fast track plea", a benefit which was in recognition of his early plea of guilty, was a recognition which all criminal jurisdictions in this country afford to accused persons in various ways and in varying degrees according to the circumstances from time to time. The Court of Criminal Appeal did not err in refusing to intervene in relation to that matter. The submission that the Court of Criminal Appeal should have held that the sentencing judge must have overlooked ss 16A(2)(j) and (m) of the Act because his Honour made no express reference to them should be rejected. It is clear that his Honour was concerned to ensure that the appellant was adequately punished for each offence. That was his purpose in evaluating the nature and seriousness of the appellant's conduct. No express reference to s 16A(2)(j) was necessary to make that clear. The same may be said about the absence of a reference to rehabilitation. His Honour was plainly aware of the appellant's prior 29 Johnson v The Queen (2002) 26 WAR 336 at 344 [23]. 30 (1997) 189 CLR 295 at 308. 31 (1988) 142 LSJS 451 at 453. Callinan good character and the excuse which he offered for committing the crimes. He said so in terms, but in the exercise of his sentencing discretion regarded these, and accordingly the prospect of rehabilitation, as of less importance than the gravity of the offences. The appellant's submission that the Court of Criminal Appeal failed to appreciate that the sentencing judge, in structuring the sentences in the way in which he did, acted contrary to the principles stated in the joint judgment in Pearce, and again adopted a peculiarly Western Australian sentencing approach, requires further consideration of Mill and Pearce. The first matter to be noticed in this regard is that the joint judgment in Pearce recognizes the currency of Mill by referring to the principle of totality which it reiterates32. The joint judgment in Mill expresses a preference for what should be regarded as the orthodox, but not necessarily immutable, practice of fixing a sentence for each offence and aggregating them before taking the next step of determining concurrency. Pearce does not decree that a sentencing judge may never lower each sentence and then aggregate them for determining the time to be served. To do that, is not to do what the joint judgment in Pearce holds to be undesirable, that is, to have regard only to the total effective sentence to be imposed on an offender. The preferable course will usually be the one which both cases commend but neither absolutely commands. Judges of first instance should be allowed as much flexibility in sentencing as is consonant with consistency of approach and as accords with the statutory regime under which the sentencing is effected. The trial judge here did not offend any of the principles stated in Mill or Pearce. His only error may have been to fail to state starting and ending dates, but this was neither to apply a uniquely Western Australian principle, nor otherwise to make an appealable error. What his Honour intended was obvious enough and did not fail in substance to give effect to the Act. The appellant's better argument does not depend upon any actual or perceived difference in approach between Mill or Pearce, but is based upon this statement in the joint judgment in Pearce33: "To the extent to which two offences of which an offender stands convicted contain common elements, it would be wrong to punish that offender twice for the commission of the elements that are common. No doubt that general principle must yield to any contrary legislative 32 (1998) 194 CLR 610 at 624 [45] per McHugh, Hayne and Callinan JJ. 33 (1998) 194 CLR 610 at 623 [40] per McHugh, Hayne and Callinan JJ. Callinan intention, but the punishment to be exacted should reflect what an offender has done; it should not be affected by the way in which the boundaries of particular offences are drawn. Often those boundaries will be drawn in a way that means that offences overlap. To punish an offender twice if conduct falls in that area of overlap would be to punish offenders according to the accidents of legislative history, rather than according to their just deserts." Some additional reference to the facts is necessary in discussing this argument. The appellant claimed by his counsel at first instance that he had "a strong feeling" that the package contained ecstasy. The facts read during the sentencing proceedings and not disputed by the appellant included that: "he did not really want to think about what may be inside the package that he was to collect – he needed the money". It was put that notwithstanding these matters the Court of Criminal Appeal erred. Error, it was said, is manifest in this passage from the judgment of "In my opinion, the application of that approach [reflected in the passage quoted above from Pearce] in the present case would obscure the fact that the [appellant] took possession of two separate parcels of two separate drugs. It was not a case where there were two offences where, for example, an act which was itself an offence was also an element of the second offence. There were two separate offences. There was no common element. The relevant circumstance was that two separate offences of possession and attempting to obtain possession of two different drugs occurred at the same time. In my opinion, this is not an example of the one act comprising two separate offences, but two separate acts, one of obtaining possession of ecstasy and one of attempting to obtain possession of cocaine." One obvious error, the reference to two packages instead of one, may be more than an incidental or trivial one. His Honour certainly appears to have been influenced by the fact of two packages as a basis for treating the offences as entirely separate, and for holding that there was no common element. The appellant points to other factual errors in the judgment of Malcolm CJ: one, being the reference to "the range of sentences commonly 34 (2002) 26 WAR 336 at 344-345 [26]. Callinan imposed … for the possession of cocaine"35, an offence with which the appellant was not charged; and another, the erroneous attribution to the appellant's counsel of a failure to provide the court with calculations of the dates of the commencement and duration of the times of imprisonment which he contended were the appropriate ones36. It is unfortunate that these errors have been made. The appellant was entitled to have the relevant factual matters carefully and accurately considered by the appellate court. It is true that the appellant pleaded guilty to two offences, but they had much in common: one inducement, one payment for performance, one occasion, one package and one receipt of it by the appellant. This commonality did require that careful regard be had, in deciding the appellant's appeal, to the totality principle. The error in relation to the number of packages and the failure to refer to the numerous common elements strongly suggests that this did not occur. A further error has been demonstrated. It was not for the Court of Criminal Appeal (per Malcolm CJ) to reject a principle stated by this Court, that account must be taken of the commonality of elements of offences in the sentencing process, on the erroneous basis that the application of the principle would, or indeed possibly could, obscure a particular fact, "that the [appellant] took possession of two separate parcels of two separate drugs"37. Application of a principle cannot obscure a fact. Facts either lend themselves to the application of a particular principle or not. The error in this regard was compounded by the serious factual misconception in relation to the fact in question, that there were two parcels rather than one. Although the appellant has therefore shown error on the part of the Court of Criminal Appeal in not having proper regard to the commonality of elements of the offences, and in accordingly not applying the totality principle to relevant facts fully and correctly stated, it does not necessarily follow that there was any error on the part of the sentencing judge, either in his application of the principles stated in Pearce, or otherwise. That has given us reason to pause in allowing the appeal. In the event we have, however, formed the view that we must do so. This Court is not a sentencing court in any conventional sense. Although the 35 (2002) 26 WAR 336 at 343 [21]. 36 (2002) 26 WAR 336 at 340 [12]. 37 (2002) 26 WAR 336 at 344 [26]. Callinan appellant needed leave to appeal to the Court of Criminal Appeal, he was granted that leave and accordingly became entitled to a proper consideration of his appeal, something which he has been denied for the reasons we have given. We would allow the appeal. The orders of the Court of Criminal Appeal of Western Australia should be set aside. The proceeding should be remitted to the Court of Criminal Appeal for consideration and determination in accordance with these reasons. Kirby KIRBY J. This is another appeal concerned with the application of sentencing law and the principles applicable to the sentencing of a prisoner convicted of federal offences. Errors in the Court of Criminal Appeal I agree with the reasons of Gummow, Callinan and Heydon JJ that errors have been shown on the part of the Court of Criminal Appeal of Western Australia. These include errors in setting out accurately the facts relevant to the sentences proper to the appellant's pleas of guilty38; an error in omitting to correct the primary judge's sentence for failing to take into account the common factual elements in the two offences39; and an error in failing to observe and apply the principle governing common elements in offences, stated by this Court in Pearce v The Queen40. In these respects I agree with the joint reasons. I myself do not have the same reaction to the resulting sentence as is expressed at the conclusion of the joint reasons41. With respect, in my view that sentence was excessive and unsurprisingly so given the nature of the errors of principle and fact that occurred in arriving at it at first instance and confirming it on appeal. The appeal to this Court must be allowed for these reasons. The appellant must be resentenced by the Court of Criminal Appeal. Instinctive synthesis or transparent stages in sentencing This is not, therefore, a case in which it is necessary to revisit the controversy over the "instinctive synthesis"42 approach to the sentencing process favoured by some members of this Court or the approach of transparent structuring of the sentence that I favour43. This Court has not yet conclusively held, in a determination of a majority essential to the orders disposing of a 38 Reasons of Gummow, Callinan and Heydon JJ ("the joint reasons") at [29]-[32]. 39 Applying Pearce v The Queen (1998) 194 CLR 610 at 623 [40]. See the joint reasons at [27]. 40 (1998) 194 CLR 610 at 623 [40]. See also the joint reasons at [33]-[35]. 41 Joint reasons at [35]. 42 See Wong v The Queen (2001) 207 CLR 584 at 611-612 [75]-[76] referred to in the joint reasons at [16]. 43 Wong v The Queen (2001) 207 CLR 584 at 621-622 [101]-[103]; cf Director of Public Prosecutions (Cth) v Said Khodor El Karhani (1990) 21 NSWLR 370 at Kirby matter, which of these approaches is required by law. Upon each, there are merely obiter dicta. I remain of the view that proper procedure in judicial analysis – and in some cases statutory provisions – require the process of reasoning to be performed in stages. In my opinion, Pearce44 says as much. The issue is, therefore, whether that process of reasoning should be secret and undisclosed or as transparent as the court can make it for the prisoner, the community and the appellate court to view, criticise and where appropriate, to correct.45 A so-called "instinctive synthesis" can become a hiding place for legal error, prejudice and sloppy work in a matter touching liberty where correctness of approach, transparency of method and manifestly just outcomes are specially desirable46. Before the great advances in administrative law that were such an important development in legal doctrine in the twentieth century, there were similar controversies in that field47. Judges accept a higher duty of reasoned justice, as this Court has affirmed48. The Court should adhere to that approach. None of this denies that, in sentencing, as in many other judicial tasks there is a role for instinct. I have confessed to it myself49; but also referred to the need to keep it under tight control50. In sentencing there must ultimately be a decision expressed in quantitative terms that cannot be analysed or explained any further. But stages there certainly are. Disclosing them ensures that no 44 (1998) 194 CLR 610. 45 cf R v Place (2002) 81 SASR 395 at 424 [78]; Warner, "Sentencing Review 2001- 2002", (2002) 26 Criminal Law Journal 349 at 358. 46 cf Warner, "The role of guideline judgments in the law and order debate in Australia", (2003) 27 Criminal Law Journal 8 at 14-15; Bagaric and Edney, "What's instinct got to do with it? A blueprint for a coherent approach to punishing criminals", (2003) 27 Criminal Law Journal 119 at 125-131. 47 See eg Davis, Discretionary Justice: A Preliminary Inquiry (1971). 48 Public Service Board of NSW v Osmond (1986) 159 CLR 656 at 666 applying Pettitt v Dunkley [1971] 1 NSWLR 376 at 388. 49 See eg Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225 at 307-308; cf at 277; Dow Jones & Co Inc v Gutnick (2002) 210 CLR 575 at 50 See eg Purvis v New South Wales (Department of Education and Training) (2003) 78 ALJR 1 at 7 [19]; 202 ALR 133 at 140 (joint reasons with McHugh J). Kirby important stage is missed by the judicial traveller. As Gleeson CJ observed in Wong v The Queen51: "[t]he outcome of discretionary decision-making can never be uniform, but it ought to depend as little as possible upon the identity of the judge who happens to hear the case. Like cases should be treated in like manner." The dicta in Pearce52, mentioned in the Court of Criminal Appeal53 and extracted in the joint reasons54, imply that it is possible to tame the judicial mind in a way that takes the applicable stages of reasoning in a strictly logical order. In a sense, this analysis tends to support the structured approach that I favour. However, I must acknowledge that, in an appellate response to sentences at first instance, there is much to be said for the fact that an "instinctive" reaction to a sentence at the threshold, based on judicial experience when all the facts are known, plays a part in outcomes (as it may also do in appeals against other qualitative assessments committed to judges, such as the determination of monetary damages for personal injury55). Whether the instinctive reaction to all of the facts drives the ultimate result or whether it is based on relevant considerations weighed and evaluated in a strictly logical order, I do not stay to examine. Perhaps this merely demonstrates that logical analysis and instinctive synthesis each plays a part in the ultimate orders that judges make. However, I agree that, to the fullest extent possible, the stages described in Pearce should, where applicable, be followed by sentencing judges in arriving at their sentencing dispositions, so far as the issues of cumulation or concurrence or of totality are concerned. Conclusion: errors require resentencing Had the course described in Pearce been taken by the sentencing judge in the present case it would have demonstrated the common elements in the two offences to which the appellant had pleaded guilty. That fact would either have suggested (as I would have been inclined to favour) that the sentences should 51 (2001) 207 CLR 584 at 591 [6]. 52 (1998) 194 CLR 610 at 623-624 [45]-[48]. 53 Johnson v The Queen (2002) 26 WAR 336 at 343-345 [21]-[26]. 54 Joint reasons at [12]. 55 Planet Fisheries Pty Ltd v La Rosa (1968) 119 CLR 118 at 124; Wong v The Queen (2001) 207 CLR 584 at 622 [102]. Kirby have been structured to be served concurrently because parts of the criminal enterprise were common to the offences of which the appellant was convicted56. Or, at the very least, if cumulative sentences were ordered, it would have ensured that a proper, that is, substantial, allowance was made to reflect the common factual features of the two offences. Orders The sentencing judge erred. The sentence, in consequence, was excessive. The Court of Criminal Appeal erred, once it granted leave, in failing to correct the sentence. The orders proposed in the joint reasons should be made. 56 Fox and Freiberg, Sentencing: State and Federal Law in Victoria, 2nd ed (1999), par 9.601. See also R v Longford [1970] 3 NSWR 276 at 277-278; R v Mantini [1998] 3 VR 340 at 346-348; Miles v The Queen [2001] NTCA 9 at [35].

HIGH COURT OF AUSTRALIA APPELLANT AND HARGRAVES SECURED INVESTMENTS LIMITED RESPONDENT Waller v Hargraves Secured Investments Limited [2012] HCA 4 29 February 2012 1. Appeal allowed. ORDER Set aside the order of the Court of Appeal of the Supreme Court of New South Wales dated 11 November 2010 and in its place order that: the appeal to that Court be allowed with costs; and the orders of the Supreme Court of New South Wales dated 12 November 2009 be set aside and in their place order that: the proceedings be dismissed; and the respondent, Hargraves Secured Investments Limited, pay the costs of the appellant, Roslyn Edwina Waller, in that Court. The respondent pay the appellant's costs in this Court. On appeal from the Supreme Court of New South Wales Representation D J Higgs SC with J B King for the appellant (instructed by Jackson Lalic Lawyers) D M Loewenstein with A R A Kuklik for the respondent (instructed by Hargraves Solicitors) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Waller v Hargraves Secured Investments Limited Mortgages – Mortgagee's remedies – Farm Debt Mediation Act 1994 (NSW) ("Act") – Creditor must provide notice of intention to take "enforcement action" under "farm mortgage" ("Notice") – Notice must specify availability of mediation regarding farm debts – Creditor unable to take enforcement action until NSW Rural Assistance Authority ("Authority") issues certificate that Act does not apply because satisfactory mediation has occurred – Borrower mortgaged land to secure all monies owed under loan agreement – Borrower defaulted and lender provided Notice – Borrower requested mediation under Act – Following mediation parties executed second and third loan agreements, discharged previous debts and created new farm debts – Authority satisfied of successful mediation and issued certificate certifying that Act did not apply to farm mortgage – Borrower defaulted in making interest payments due under third loan agreement – Whether successive farm debts created new "farm mortgage" requiring satisfactory mediation before creditor could pursue enforcement action – Whether separate Notice required for enforcement action under subsequent loan agreements – Whether certificate issued by Authority void – Whether lender's entitlement to possession of secured land and outstanding monies barred. Words and phrases – "enforcement action", "farm debt", "farm mortgage", "in respect of the farm debt involved", "in respect of the farm mortgage concerned". Farm Debt Mediation Act 1994 (NSW), ss 3, 4(1), 5(1), 6, 8, 9, 10(1), 11(1), 14, Real Property Act 1900 (NSW), s 3(1). Interpretation Act 1987 (NSW), s 34. FRENCH CJ, CRENNAN AND KIEFEL JJ. Introduction The Farm Debt Mediation Act 1994 (NSW) ("the Act") has as its object "the efficient and equitable resolution of farm debt disputes."1 In aid of that object "[m]ediation is required before a creditor can take possession of property or other enforcement action under a farm mortgage."2 This appeal concerns the application of the Act to enforcement action under a farm mortgage securing advances made as part of a settlement which was reached following mediation of a farm debt dispute in accordance with the requirements of the Act. The Act provides mechanisms, explained in detail in the reasons of Heydon J, which condition the enforceability of a farm mortgage upon 21 days prior written notice by the creditor, under s 8(1), in response to which the farmer may request "mediation concerning the farm debt involved."3 The bar to enforcement is lifted if a certificate is in force under s 11 in respect of the farm mortgage concerned4. Section 11 provides for the issue by the New South Wales Rural Assistance Authority5 ("the Authority") of a certificate that the Act does not apply to a farm mortgage if the farmer is in default under the farm mortgage and, relevantly, if the Authority is satisfied that satisfactory mediation has taken place in respect of the farm debt involved6. The Act applies to creditors "only in so far as they are creditors under a farm debt."7 Enforcement action taken by a creditor to whom the Act applies otherwise than in compliance with the Act is void8. "[E]nforcement action, in relation to a farm mortgage" is defined in the Act to mean "taking possession of property under the mortgage or any other 1 Act, s 3. 2 Act, s 3. 3 Act, s 9(1). 4 Act, s 8(3). 5 Constituted by the Rural Assistance Act 1989 (NSW). 6 Act, s 11(1). 7 Act, s 5. 8 Act, s 6. Crennan action to enforce the mortgage"9. Three other definitions of importance in the Act are10: "creditor means a person to whom a farm debt is for the time being owed by a farmer. farm debt means a debt incurred by a farmer for the purposes of the conduct of a farming operation that is secured wholly or partly by a farm mortgage. farm mortgage includes any interest in, or power over, any farm property securing obligations of the farmer whether as a debtor or guarantor, including any interest in, or power arising from, a hire purchase agreement relating to farm machinery, but does not include … [the exclusions are not relevant for present purposes]." In this case a certificate was awarded to a creditor under s 11 of the Act following a mediated settlement of a dispute arising out of the breach of a loan agreement which had given rise to a farm debt. A second loan agreement was negotiated as part of the settlement and a third loan agreement negotiated when the second loan agreement was breached. Monies advanced under each loan agreement were secured by the same "all monies" mortgage. The appellant farmer, Roslyn Waller, was the borrower and mortgagor. The respondent, Hargraves Secured Investments Limited ("HSI") was the lender and mortgagee. The primary question on appeal is whether the certificate issued under s 11 lifted the bar on the enforceability of the mortgage as security for the advances made under the third loan agreement. The answer to that question is no. A second question is whether the bar on the enforceability of the mortgage precluded recovery of a money judgment framed on the basis of the covenants in the mortgage. The answer to that question is yes. For the reasons given by Heydon J and the reasons which follow, the appeal should be allowed. The factual and procedural history and the approaches taken by the primary judge in the Supreme Court of New South Wales and by the New South Wales Court of Appeal are described in Heydon J's reasons11. 9 Act, s 4(1) – immaterial inclusions and exclusions in the definition are omitted. 10 Act, s 4(1). 11 Reasons of Heydon J at [31]-[42]. Crennan The appeal and the contentions On 1 November 2007, HSI instituted proceedings in the Common Law Division of the Supreme Court of New South Wales for possession of Ms Waller's farm. It also sought judgment against her in the sum of $754,811.38. On 12 November 2009, Harrison J gave judgment for HSI including an order for possession and a money judgment for $906,667.93. Ms Waller was ordered to pay HSI's costs. Her appeal against the judgment of Harrison J was dismissed by the Court of Appeal (Tobias and Macfarlan JJA, Sackville AJA) on 11 November 201012. Special leave to appeal against the judgment of the Court of Appeal was granted on 10 June 2011 by Gummow and Hayne JJ. Ms Waller's primary argument rested upon the proposition that the proceedings instituted against her by HSI concerned a "farm mortgage" within the meaning of the Act that was not the farm mortgage in respect of which the s 11 certificate of 20 October 2006 had been issued. Underlying that argument was the proposition that the third loan agreement gave rise to a farm debt distinct from that arising under the first loan agreement which had been the subject of mediation. On the findings of the Court of Appeal the first loan agreement had been superseded by the second loan agreement which had, in turn, been superseded by the third loan agreement. The debt arising under the third loan agreement, it was submitted, gave rise to a new and distinct "interest in, or power over" Ms Waller's farm and thereby a new and distinct "farm mortgage" in favour of HSI. HSI sought leave to file, out of time, a notice of contention that Tobias and Macfarlan JJA, in the Court of Appeal, had erred in treating the second loan agreement as discharging the obligations under the first loan agreement and the third loan agreement as discharging the obligations under the second loan agreement. For the reasons give by Heydon J leave to file that notice of contention should be refused13. Construction of farm mortgage The term "farm mortgage" is defined in the Act broadly and non- exhaustively. It is sufficiently broadly defined to cover a mortgage at general 12 Waller v Hargraves Secured Investments Ltd (2010) 15 BPR 28,765. 13 Reasons of Heydon J at [43]. Crennan law which includes "a conveyance of land or an assignment of chattels as a security for the payment of a debt or the discharge of some other obligation for which it is given."14 It encompasses a "mortgage" within the meaning of the Conveyancing Act 1919 (NSW) which includes "a charge on any property for securing money or money's worth"15. It also covers a Torrens System mortgage defined in the Real Property Act 1900 (NSW) ("the Real Property Act") as "[a]ny charge on land (other than a covenant charge) created merely for securing the payment of a debt."16 The latter definition and the provisions of the Real Property Act attract to a mortgage registered under that Act the description in English Scottish and Australian Bank Ltd v Phillips17: "Under the system of registration … the statutory charge described as a mortgage is a distinct interest. It involves no ownership of the land the subject of the security." The definition of "farm mortgage", however, extends beyond the general law and statutory categories mentioned above. It extends to an "interest" or a "power" over farm property securing obligations of the farmer "as a debtor". It thereby includes an interest or a power securing an obligation to repay, or pay interest on, a "farm debt". If an "interest" or "power" is granted by a farmer as security for repayment of a farm debt and the debt is thereafter repaid or extinguished, the interest or power so granted no longer secures any obligations of the farmer as a debtor. The "interest" or "power" constituting the farm mortgage then ceases to exist. That is not to say that discharge of the farmer's personal obligations under a registered mortgage affects the state of the register and the legal effect of the mortgage. The personal obligations are not able to be treated in exactly the same way as the interest in land is treated by the registration system18. Under the Torrens System a situation can arise in which a registered mortgage does not 14 Santley v Wilde [1899] 2 Ch 474 at 474 per Lindley MR, adopted in Bevham Investments Pty Ltd v Belgot Pty Ltd (1982) 149 CLR 494 at 499 per Gibbs CJ, Mason, Murphy and Wilson JJ; [1982] HCA 45. 15 Conveyancing Act 1919 (NSW), s 7(1). 16 Real Property Act 1900 (NSW), s 3. 17 (1937) 57 CLR 302 at 321 per Dixon, Evatt and McTiernan JJ; [1937] HCA 6. 18 English Scottish and Australian Bank Ltd v Phillips (1937) 57 CLR 302 at 321. Crennan secure a debt. In Perpetual Trustees Victoria Ltd v English19, Sackville AJA, delivering the judgment of the Court of Appeal, said of such a case20: "But that is the situation where a mortgagor repays the mortgage debt, yet the mortgage remains undischarged" In the simple case of a mortgage securing a single past advance, where the advance and interest have been paid in accordance with the terms of the mortgage, the mortgagee can no longer sue for the sum secured under the mortgage even though the mortgage remains registered on the title21. Nor can the mortgagee exercise any of the general law or statutory rights or powers incident to the enforcement of the mortgage. In such a case there is no "interest" or "power" of the kind contemplated in the Act. HSI's mortgage did not in terms secure a single past advance. It was an "all monies" mortgage. Ms Waller was obliged by the common provisions of the mortgage instrument to "carry out on time all your obligations under every agreement covered by this mortgage including the obligation to pay any of the amount owing." The term "amount owing" was defined as: "at any time, all money which one or more of you owe us, or will or may owe us in the future, including under this mortgage or an agreement covered by this mortgage." (emphasis in original) The question in contention in this appeal was whether the extinguishment of the debts under the first and second loan agreements and the creation of new obligations under the second and third loan agreements respectively, gave rise in each case to a new "interest" or "power" over the farm property within the meaning of the definition of "farm mortgage". The answer to that question turns upon the particular language of the Act and the statutory purpose. Analogous cases demonstrate the determinative significance of the specific statutory text and purpose and the particular terms of the relevant securities. One class of analogous case arose in the 1980s under s 73 of the Property Law Act 1974 (Q) ("the Queensland Property Law Act") which 19 (2010) 14 BPR 27,339. 20 (2010) 14 BPR 27,339 at 27,356 [97]. 21 CN & NA Davies Ltd v Laughton [1997] 3 NZLR 705 at 714. See also Stoljar, "Mortgages, Indefeasibility and Personal Covenants to Pay", (2008) 82 Australian Law Journal 28 at 30. Crennan prohibited a vendor of land under an instalment contract from mortgaging the land without the consent of the purchaser. The term "mortgage" was defined as including a charge on any property for securing money. In Landers v Schmidt22 the Full Court of the Supreme Court of Queensland held that a vendor of land under an instalment contract who secured an advance of money under a pre- existing mortgage over the land had created a fresh "charge" and thereby mortgaged the land contrary to s 7323. The generality of the definition of mortgage extending to a "charge" underpinned that conclusion. The decision of the Full Court was approved by the Privy Council in Coast Securities No 9 Pty Ltd v Bondoukou Pty Ltd24 which involved the same statutory provisions and a similar fact situation. On the other hand, this Court in Sibbles v Highfern Pty Ltd25 held that the fluctuation, from credit to debit, of a current account, secured by mortgage, did not give rise to a fresh "charge" for the purposes of s 73 of the Queensland Property Law Act. This Court distinguished Landers and Coast Securities No 9 on the basis that they involved variations of existing mortgages which fell within the meaning of the term "mortgage" in the Queensland Property Law Act26. A similar distinction was drawn recently by this Court in Public Trustee of Queensland v Fortress Credit Corporation (Aus) 11 Pty Ltd27. The question in that case was whether a new loan agreement secured under the terms of a pre-existing charge over the assets of a corporation was a "variation in the terms of the charge" within the meaning of s 268(2) of the Corporations Act 2001 (Cth) ("the Corporations Act") and requiring registration under that Act. The Court answered that question in the negative. The Act here in question adopts a definition of "farm mortgage" which is considerably wider than the definition of "mortgage" in the analogous cases just mentioned. The terminology of "interest" and "power" is also wider than that of "charge" in the Corporations Act. It might be said that the mortgage instrument, by reason of its "all monies" provision, always secured the "prospective liability" which Ms Waller might 22 [1983] 1 Qd R 188. 23 [1983] 1 Qd R 188 at 194-196 per Connolly J, Lucas SPJ agreeing. 24 (1986) 61 ALJR 285 at 288; 69 ALR 385 at 389. 25 (1987) 164 CLR 214; [1987] HCA 66. 26 (1987) 164 CLR 214 at 224. 27 (2010) 241 CLR 286 at 294 [20] fn 28; [2010] HCA 29. Crennan incur under future advances. The registered charge in Fortress Credit was so characterised by this Court in determining whether or not the charge was varied by a further advance28. That characterisation, however, even if applicable to the instrument of mortgage in this case, does not answer the question whether by reason of the third loan agreement, read with the HSI mortgage, a new interest or power over Ms Waller's farm was created. The successive discharge of the debts secured by HSI's registered mortgage under the first and second loan agreements extinguished Ms Waller's obligations arising under that mortgage by reason of those agreements. No enforcement action could thereafter be taken under the mortgage by reference to obligations arising under those agreements. The answer to the question whether the third loan agreement, read with the HSI mortgage, created a new interest or power over Ms Waller's farm, is in the affirmative. The question of construction should be answered in favour of Ms Waller. That answer cannot be met in this case by a general appeal to absurdities that might arise in particular circumstances. Absurd or unintended consequences of this broadly drawn legislation can be conjured in opposition to the competing constructions. The policy of the statute is remedial. The construction advanced by Ms Waller is within the scope of its remedial purpose. The submission advanced by HSI that the Supreme Court proceedings were not barred by s 8(1) of the Act in so far as they related to recovery of a money judgment, should be rejected for the reasons give by Heydon J29. Conclusion The appeal should be allowed with costs. We agree with the orders 28 (2010) 241 CLR 286 at 294 [22]. 29 Reasons of Heydon J at [64]-[68]. Hayne HAYNE J. The appellant ("the borrower") borrowed $450,000 from the respondent ("the lender") secured by an "all moneys" registered first mortgage over her farm. In October 2004, the lender gave the borrower notice under the Farm Debt Mediation Act 1994 (NSW) ("the Act") that the borrower was in default and that the lender intended to take enforcement action. The Act permitted (s 9(1)) the borrower to ask (and she did ask) for mediation "concerning the farm debt involved". As a result of the mediation, the parties made a deed of settlement, in July 2005, by which the lender agreed to increase the amount of the loan to $640,000 and was directed to apply some of that extra amount lent to both past and future interest. The parties also made a new loan agreement recording and dealing in further detail with what had been agreed in the deed of settlement. The new principal of $640,000 was repayable in September 2006 along with any interest then outstanding. In August 2006, the parties made a further loan agreement under which (amongst other things) the time for repayment of the principal sum of $640,000 was fixed as September 2009. From October 2006, the borrower did not make interest payments when they were due and in November 2007 the lender brought proceedings against the borrower in the Common Law Division of the Supreme Court of New South Wales seeking possession of the land and judgment for the principal and interest. Section 6 of the Act provides: "Enforcement action taken by a creditor to whom this Act applies otherwise than in compliance with this Act is void." Section 10(1) provides: "Once a farmer has given a creditor a notification in accordance with section 9 requesting mediation, the creditor must not take enforcement action in respect of the farm mortgage concerned unless a certificate is in force under section 11 in respect of the farm mortgage." A certificate under s 11 was issued to the respondent in October 2006. It certified that the Authority (the New South Wales Rural Assistance Authority), which issued the certificate, was satisfied that the Act did not apply to a "farm mortgage" identified by reference to the borrower, her address, the registered number of the mortgage, the property over which the security was held, the "Facility" (described as "Hargraves – Account No 10294"), and the "Balance O/S as at date of issue of Section 8 notice" ("$488,250.00"). The certificate said that it "expires on 2nd Jun 2008". Was the proceeding commenced by the lender in November 2007 in any or all respects a proceeding to which s 6 of the Act applied: enforcement action taken by a creditor to whom the Act applied otherwise than in compliance with the Act? The answer to that question depends on whether the proceeding fell Hayne within the qualification to s 10(1) of the Act as "enforcement action in respect of the farm mortgage concerned [where] a certificate is in force under section 11 in respect of the farm mortgage". As Heydon J explains, the "farm mortgage concerned" to which reference is made in s 10 cannot be identified without identifying the particular "farm debt" that it secures. The mediation which is the necessary precursor to the Authority issuing a certificate under s 11 is a mediation "concerning the farm debt involved" (s 9(1)) or "in respect of the farm debt involved" (s 11(1)(c)(i)). In this case "the farm debt involved" that was the subject of the mediation was the debt owing under the first loan agreement (the mediation having occurred before the second and third loan agreements were made); it was not the debt due under the third loan agreement that the lender sought to recover by the proceedings brought in the Supreme Court of New South Wales. At the time of the commencement of the proceedings there was, therefore, no certificate in force "in respect of the farm mortgage" (that is, "in respect of the farm mortgage concerned"). As Heydon J further explains, the expression "enforcement action" (as it is defined in s 4(1) of the Act) extends to all of the relief that was claimed by the lender in its proceedings. The lender by its pleadings asserted its "entitle[ment] to repayment, including principal and the unpaid arrears of interest" only "under the terms of the Mortgage". The width of the definition of "enforcement action", extending to "any other action to enforce the mortgage" (emphasis added), and the express exclusion of "the enforcement of a judgment" obtained before the commencement of the Act from the definition (emphasis added), point strongly to this construction. And any other construction would frustrate the evident purpose of the Act: to require mediation in respect of the farm mortgage concerned (which is defined by reference to a particular farm debt) before a lender can enforce – that is, bring proceedings in respect of – the farm mortgage. Whether the Act would have prevented a claim for a money judgment, brought only by reference to the third loan agreement, need not be decided. I agree with the orders proposed by Heydon J. HEYDON J. This appeal concerns the Farm Debt Mediation Act 1994 (NSW) ("the Act"). It is difficult legislation. Its construction has engendered differences of judicial opinion. The difficulties may spring from the origins of the Act – in a Bill which was based on legislation in Iowa and Minnesota that had attracted criticism. The Bill was introduced by an Opposition Member of the New South Wales Legislative Assembly30. It was introduced at a time when the enactment of legislation depended on support from independents in the absence of agreement between the major parties. Before its enactment, the Bill was amended on the suggestions of independents31. The Act has been amended since enactment. The background to the Act lies in the notorious problems which face Australian farmers. They include harsh climatic conditions; the vulnerability of crops and animals to disease; unpredictable volatility in prices on world markets; the tendency of farmers to be asset-rich but cash-poor; their dependence on loans; the risk of speedy ejection from their land if there is entire freedom for creditors to enforce their general law rights, despite the possibility of remedying defaults if climatic and market conditions change; and the expense of and often delay in litigation as a method of keeping creditors within their rights. In contrast, some perceive in mediation a capacity to produce much cheaper and speedier outcomes. In outline the legislative scheme is that if a farmer incurs a "farm debt" that is secured by a "farm mortgage", the "creditor" is unable to take "enforcement action" under the farm mortgage until, inter alia, a certificate is issued that the Act does not apply because satisfactory mediation has taken place. The question which the appeal raises is how far that scheme works if a certificate is issued in respect of one farm debt but the creditor later wishes to take enforcement action in relation to another. The transactions to which the Act is to be applied in this appeal involve borrowings by the appellant, Roslyn Edwina Waller. The lender was the respondent, Hargraves Secured Investments Ltd. The borrowings were secured by mortgage over the appellant's farm ("the farm"). The respondent, as plaintiff in the Common Law Division of the Supreme Court of New South Wales, claimed possession of the farm and judgment for the outstanding borrowings. At 30 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 27 October 1994 at 4822. 31 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 30 November 1994 at 5943. See Varga v Commonwealth Bank of Australia (1996) 7 BPR 15,052 at 15,055; Waller v Hargraves Secured Investments Ltd (2010) 15 BPR 28,765 at 28,785 [103]-[107]. first instance Harrison J granted the relief sought32. By majority the Court of Appeal of the Supreme Court of New South Wales (Tobias JA and Sackville AJA, Macfarlan JA dissenting in part) dismissed the appellant's appeal33. The appellant's appeal to this Court should be allowed for the following reasons. The factual background The appellant, on retiring from her career as a high school teacher of science and mathematics, purchased the farm in March 2002. Initially the purchase was financed by a loan on mortgage. Then refinancing with another lender took place. The original mortgage was discharged. On 28 August 2003, the respondent advanced to the appellant $450,000 on loan under a loan agreement ("the First Loan Agreement"). Interest was payable on the fifth day of every month. The interest rate was 8.5% per annum, with a default rate of 12.5%. The repayment date was 5 September 2006. The loan was secured by a registered first mortgage made on 28 August 2003 in favour of the respondent ("the Registered First Mortgage"). The farm was affected by drought. The respondent alleged that the appellant defaulted in the payment of interest in every month but four from February 2004 to July 2005. Section 4(1) of the Act defines "farm debt" as meaning "a debt incurred by a farmer for the purposes of the conduct of a farming operation that is secured wholly or partly by a farm mortgage." It was not in dispute that the appellant was a farmer conducting a farming operation on a "farm property", namely the farm. Section 4(1) also defines "farm mortgage" as including "any interest in, or power over, any farm property securing obligations of the farmer whether as a debtor or guarantor". It followed that the Registered First Mortgage (read with the First Loan Agreement) created a "farm mortgage" as defined in s 4(1). Section 4(1) defines "creditor" as follows: "creditor means a person to whom a farm debt is for the time being owed by a farmer". Section 4(1) defines "enforcement action" as follows: "enforcement action, in relation to a farm mortgage, means taking possession of property under the mortgage or any other action to enforce the mortgage, including the giving of any statutory enforcement notice, or the continuation of any action to that end already commenced". 32 Hargraves Secured Investments Ltd v Waller [2009] NSWSC 1210. 33 Waller v Hargraves Secured Investments Ltd (2010) 15 BPR 28,765. The respondent wished to take enforcement action in consequence of the appellant's alleged defaults. On 7 October 2004 the respondent gave the appellant a notice ("the Notice"). The Notice stated that it was a notice under s 8 of the Act to inform the appellant that the respondent intended to take enforcement action in relation to her default in paying interest. It advised her of her rights under s 9 of the Act. Section 8 of the Act provides: "(1) A creditor to whom money under a farm mortgage is owed by a farmer must not take enforcement action against the farmer in respect of the farm mortgage until at least 21 days have elapsed after the creditor has given a notice to the farmer under this section. (2) Notice to the farmer is to be in writing in a form approved by the Authority (informing the farmer of the creditor's intention to take enforcement action in respect of the farm mortgage and of the availability of mediation under this Act in respect of farm debts). This section does not apply if a certificate is in force under section 11 in respect of the farm mortgage concerned." Section 9 of the Act provides for a farmer to whom a notice has been given under s 8 to request mediation. A mediation took place on or about 2 June 2005. As a result of the mediation the appellant and the respondent entered a Deed of Settlement on or about 26 July 2005 ("the Deed of Settlement"). The Deed of Settlement contained a recital that the appellant and the respondent had agreed that "all disputes between the parties be settled on the terms and conditions in this Deed." By the Deed of Settlement, the respondent agreed to increase the advance by $190,000 so as to arrive at a new principal amount of $640,000. Of that $190,000, the appellant was to receive $17,409.53: the balance was directed to various purposes such as payment of arrears of interest and future interest. Clauses 3 and 4 contained releases and discharges in relation to defaults in payments of penalty interest from April 2004 to August 2005. On 28 July 2005, pursuant to the Deed of Settlement, the appellant and the respondent entered a further loan agreement ("the Second Loan Agreement"). The appellant acknowledged indebtedness in the principal sum of $640,000 repayable on 5 September 2006. Interest was payable on the fifth day of every month. The interest rate was 9% per annum, with a default rate of 13% per annum. The provisions in the Deed of Settlement requiring prepayment of interest under the Second Loan Agreement meant that for a time no default could occur. But the appellant was suffering further difficulties from the drought, and eventually default did occur. The appellant requested "a further extension". On 29 August 2006 the appellant and the respondent executed a further loan agreement ("the Third Loan Agreement"). Under the Third Loan Agreement, the principal of $640,000 was repayable on 5 September 2009. Interest was repayable on the fifth day of every month. The interest rate was 9.25% with a default rate of 13.25%. Section 11(1) of the Act provides for the issue of a certificate by the New South Wales Rural Assistance Authority ("the Authority"). The relevant part of s 11(1) is as follows: "The Authority must, on the application of a creditor under a farm mortgage, issue a certificate that this Act does not apply to the farm mortgage if: the farmer is in default under the farm mortgage, and no exemption certificate is in force in relation to the farm mortgage, and the Authority is satisfied that: satisfactory mediation has taken place in respect of the farm debt involved". The provisions in relation to exemption certificates are immaterial, since no exemption certificate was ever issued. On 20 October 2006 the Authority issued to the respondent a certificate issued by the Authority under s 11 ("the Certificate"). The Certificate certified the Authority's satisfaction that the Act did not apply to a "farm mortgage", the balance outstanding being $488,250 and the facility being "Hargraves – Account No 10294". These details corresponded with those in the Notice. The Certificate was to expire on 2 June 2008, conformably with the mediation having taken place 2 June 2005: see s 11(5)(a) of the Act. It is common ground between the parties, and was assumed in the courts below, that the Certificate was issued under s 11(1)(c)(i) of the Act and that the Authority was satisfied that there had been a satisfactory mediation, namely that taking place in June 2005. The appellant fell into default in payment of interest under the Third Loan Agreement. As a result the respondent commenced the Supreme Court proceedings on 1 November 2007. The proceedings: Common Law Division The trial judge granted the respondent the relief sought. The appellant sought relief under the Contracts Review Act 1980 (NSW) ("the Contracts Review Act"). However, the trial judge denied that relief, and no challenge to this has been made since. The contention advanced by the appellant which continues to be pressed arises from the fact, as was common ground, that the claim to possession was "enforcement action" as defined in s 4(1). The appellant relied on s 6 of the Act, which provides: "Enforcement action taken by a creditor to whom this Act applies otherwise than in compliance with this Act is void." She also relied on s 10(1) which provides: "Once a farmer has given a creditor a notification in accordance with section 9 requesting mediation, the creditor must not take enforcement action in respect of the farm mortgage concerned unless a certificate is in force under section 11 in respect of the farm mortgage." She contended that the Act had not been complied with because the Certificate was not relevantly a "certificate" within s 10(1). She argued that the Certificate related only to the farm debt created by the First Loan Agreement, while the proceedings constituted an enforcement action in relation to the farm debt created by the Third Loan Agreement, in relation to which no mediation had taken place and no s 11(1) certificate had ever been issued. The appellant submitted that the proceedings were debarred by s 8(1), and s 8(3) could not prevent that outcome, for no s 11 certificate had been given in relation to a farm mortgage so far as it secured the money owed under the Third Loan Agreement. The trial judge rejected these contentions. He considered that they failed to distinguish between the "farm debts" which the appellant owed and the "farm mortgage" she had entered. He pointed out that the Certificate issued under s 11 was a certificate that the Act did not apply to the farm mortgage. He considered that s 8(3) permitted enforcement action against the respondent in respect of the farm mortgage to which a certificate related, irrespective of what farm debt was involved. The proceedings: the Court of Appeal Sackville AJA accepted submissions advocating lines of reasoning broadly consistent with that of the trial judge, and, with some regret, so did Tobias JA. Macfarlan JA, however, dissented in relation to the claim for possession. He and Tobias JA considered that the farm debt that arose under the First Loan Agreement was extinguished by the Second Loan Agreement, and the farm debt that arose under the Second Loan Agreement was extinguished by the Third Loan Agreement. The Certificate related to the debt arising under the First Loan Agreement, which was the subject of the respondent's Notice under s 8 of the Act and which was the focus of the farm debt mediation of June 2005. Macfarlan JA noted that s 9(1) conferred an entitlement on a farmer to whom notice had been given under s 8 to request mediation concerning "the farm debt involved". He decided that the expression "farm debt" referred to the farm debt or debts upon which the creditor relies to found the proposed enforcement action. Similarly, he said that the expression "the farm debt involved" in s 11(1)(c)(i) must refer to the farm debt or debts upon which the creditor relies to found the proposed enforcement action, and in respect of which mediation has taken place. Macfarlan JA construed "the farm mortgage concerned" in s 8(3), in context, as referring to the power over the farm property that secures the debt which has been the subject of the mediation certified pursuant to the s 11(1) certificate. He preferred that construction on the ground that it accorded better with the object of the Act, which was stated by s 3 as follows: "The object of this Act is to provide for the efficient and equitable resolution of farm debt disputes. Mediation is required before a creditor can take possession of property or other enforcement action under a farm mortgage." Hence he said: "'farm mortgage' [is] to be construed as a reference to the interest in, or power over, the farm property that secures the particular farm debt that is the subject of the creditor's intended enforcement action. … On this basis an instrument of mortgage such as that being considered here is to be regarded, for the purposes of the Act, as giving rise to as many security interests (that is, mortgages) as there are separate debts."34 Here the only debt secured was the debt created by the Third Loan Agreement. No s 11(1) certificate existed in relation to that debt. Hence the bar created by s 8(3) to the immunity conferred by s 8(1) did not exist. That approach caused Macfarlan JA to conclude that the respondent's claim to possession should be dismissed – but not its monetary claim. He considered that the monetary claim fell outside the definition of "enforcement action" in s 4(1). The proposed notice of contention The respondent sought leave to file out of time a notice of contention. The contention which it wished to advance was that Tobias and Macfarlan JJA had been wrong to treat the Second Loan Agreement as discharging the obligations under the First, and the Third as discharging the obligations under the Second. The appellant opposed the grant of leave on the ground that the appeal book did not contain all the materials necessary to resolve the point. Leave 34 Waller v Hargraves Secured Investments Ltd (2010) 15 BPR 28,765 at 28,778 [65]. should be refused for that reason, and for the following other reasons. No arguable error was demonstrated, by recourse to the evidence that was in the appeal book, in the detailed reasoning of Macfarlan JA that led him to the conclusion controverted by the respondent in the draft notice of contention. It is true that the different loan agreements arose out of the changing needs of the appellant for money in running her farm, and the indebtedness under the Third Loan Agreement involved no fresh advance and can be traced back to indebtedness under the Second and before that the First. But the quantum of principal to be repaid under the First Loan Agreement was different from that to be repaid under the Second and Third, the rates of interest were different, and as between the First and the Second on the one hand, and the Third on the other hand, the dates of repayment were different. Each Loan Agreement was comprehensive and exhaustive in its terms. The releases in the Deed of Settlement were also fatal to the notice of contention point. The respondent relied on what was said to be evidence of the intention of the parties outside the Loan Agreements, but it did not support the thesis that there was only one farm debt. The removal of the notice of contention from consideration casts a significant light on the respondent's argument. That argument is that once a satisfactory mediation has taken place between a farmer and a creditor of a dispute involving one debt obligation owed by the farmer to the creditor which is secured by a farm mortgage, there is no s 8(1) ban on enforcement action in relation to other debt obligations secured by that farm mortgage, even though the disputes arising from those other debt obligations might involve quite different issues from those involved in the mediation. A farmer would be entitled to one, but only one, mediation every three years. The respondent's textual arguments The arguments of the respondent in relation to the text of ss 4(1), 5, 8 and 11 fell into two groups. In the first group were arguments stressing the linguistic contrast between the words "farm mortgage" and "farm debt". They pointed out that if s 8(3) had meant to lift the s 8(1) ban on enforcement action only when the s 11 certificate related to the farm debt the subject of the enforcement action, it would have been easy to say so. In the second group were arguments criticising Macfarlan JA's view that the Act caused an instrument of mortgage to give rise to as many security interests as there were separate debts. The text of the Act Independently of the Real Property Act 1900 (NSW) ("the RP Act"), the "classic definition of a mortgage"35 is "a conveyance of land … as a security for the payment of a debt or the discharge of some other obligation for which it is given."36 Under the RP Act, a mortgage is not a conveyance of the mortgagor's estate or interest in the land, but "a charge on that estate or interest" created by statute37. That follows from the definition of "mortgage" in s 3(1)(a) of the RP Act as "[a]ny charge on land (other than a covenant charge) created merely for securing the payment of a debt." The charge thus created is an interest securing the payment of the debtor's obligations. The respondent's construction rests on the proposition that "there is nothing in the definition of 'farm mortgage' which refers to a particular farm debt being secured"38. That proposition is incomplete. The key provisions of the Act centre on farm debts, not farm mortgages. Part 2 of the Act deals with the duties and consequences of mediation. Mediation under Pt 2 can only take place in relation to a "farm debt". The operative provisions in Pt 2 (eg ss 9-10) do not apply to "mortgages", but creditors, and, as noted above, a "creditor" is a person "to whom a farm debt is for the time being owed by a farmer": s 4(1). Section 5(1) provides that the Act "applies in respect of creditors only in so far as they are creditors under a farm debt." Because of the definition of "farm debt", s 5(1) refers to creditors secured under a farm mortgage. As noted above, s 4(1) defines "farm mortgage" as including "any interest in, or power over, any farm property securing obligations of the farmer whether as a debtor or guarantor". Because, as also noted above, s 4(1) defines a "farm debt" as a "debt incurred by a farmer for the purposes of the conduct of a farming operation that is secured wholly or partly by a farm mortgage", "obligations of [a] farmer … as a debtor" are "farm debts". Thus a "creditor" to whom the Act applies will always be owed a "farm debt" secured by a "farm mortgage". Hence although a "farm mortgage" can secure debts other than a "farm debt", the key operative provisions require the creditor who is mortgagee 35 Handevel Pty Ltd v Comptroller of Stamps (Vict) (1985) 157 CLR 177 at 192 per Mason, Wilson, Deane and Dawson JJ; [1985] HCA 73. See also Bevham Investments Pty Ltd v Belgot Pty Ltd (1982) 149 CLR 494 at 499; [1982] HCA 45. 36 Santley v Wilde [1899] 2 Ch 474 at 474 per Sir Nathaniel Lindley MR. 37 Cambridge Credit Corporation Ltd v Lombard Australia Ltd (1977) 136 CLR 608 at 615 per Barwick CJ, Mason and Jacobs JJ. 38 Waller v Hargraves Secured Investments Ltd (2010) 15 BPR 28,765 at 28,786- 28,787 [116] per Sackville AJA; see also at 28,766 [5] and [7] per Tobias JA. under a farm mortgage to be owed a "farm debt" secured by a "farm mortgage". Although s 8(1) read by itself prevents a creditor to whom money under a farm mortgage is owed by a farmer (whether or not it is a farm debt) from taking enforcement action, s 5(1) ensures that s 8(1) only applies to creditors in so far as they are creditors under a farm debt. There is thus, for the purposes of the Act, a close connection between a farm mortgage in relation to which the creditor desires to take enforcement action and any farm debt which it secures. It is not possible to identify what a relevant "farm mortgage" is without identifying the particular "farm debt" which is secured wholly or partly by it. The respondent relied on the terms of s 8(3), which deprives the farmer of the immunity from enforcement action conferred by s 8(1) if a s 11 certificate is "in force … in respect of the farm mortgage concerned" (emphasis added). In that respect it echoes s 11(1). The respondent's reliance on s 8(3) was misplaced. To draw a dichotomy between, on the one hand, the "money under a farm mortgage … owed by a farmer" (s 8(1)), which is "the farm debt involved" (s 9(1)), and, on the other hand, the "farm mortgage" referred to in ss 8(3) and 11(1), is to draw a false distinction. Section 8(3) refers to the "certificate … in force under section 11 in respect of the farm mortgage concerned" (emphasis added). The reference to a "farm mortgage" is a reference to a farm mortgage under which money is owed by a farmer to a creditor – that is, a particular farm debt in respect of which the creditor intends to take enforcement action against the farmer. And the reference in s 8(3) to a "certificate" is a reference, relevantly, to a certificate that the Authority is satisfied that satisfactory mediation has taken place in respect of "the farm debt involved" – that is, again, the particular farm debt in respect of which the creditor intends to take enforcement action against the farmer. A s 11 certificate is "in respect of the farm mortgage concerned", but only because the "farm mortgage concerned" secures a particular "farm debt" and the Authority is satisfied that "satisfactory mediation has taken place in respect of the farm debt involved" (s 11(1)(c)(i)). Section 8(1) forbids enforcement action by a creditor against a farmer "in respect of" a farm mortgage. The expression "in respect of" can encompass several farm debts secured by the farm mortgage. Similarly, "enforcement action" can encompass remedies sought by the creditor in relation to several distinct disputes about distinct farm debts. Section 8(3) only operates to permit enforcement action under s 8(1) in relation to a dispute about a farm debt if a s 11 certificate is in force in respect of the farm mortgage. But in circumstances like the present, s 11(1)(c)(i) provides that the certificate cannot be issued unless the Authority is satisfied that satisfactory mediation has taken place in respect of "the farm debt involved" in the dispute which went to mediation. The issue of the certificate does not depend on the Authority being satisfied that satisfactory mediation has taken place in respect of any aspect of the farm mortgage at large. Thus the dispute about a farm debt – "the farm debt involved" – which was satisfactorily mediated under s 11(1)(c)(i) must be the same dispute as that which triggered the creditor's desire to take the enforcement action referred to in s 8(1). The legislative purpose stated in s 3 that mediation must take place before a creditor can take enforcement action under a farm mortgage is effected by the operative provisions. The function of mediation is to explore the means for settling a dispute. The type of dispute contemplated by the mediation referred to in ss 3, 9, 9A and 11 arises where a creditor wishes to take enforcement action under a farm mortgage on the ground that a person who owes a farm debt is in default, and the debtor disputes that. Thus ss 9(1), 9(1A), 9A(1), 9B(1), 9B(2)(b) and 11(1)(c)(i) refer to mediation concerning the "farm debt involved" (emphasis added). Section 11(2)(b) refers to "mediation in respect of the debt concerned" (emphasis added). Section 11(2)(c)(iii) refers to the farmer declining "to mediate in respect of the farm debt" (emphasis added). It is the dispute about the farm debt involved or concerned which calls for mediation. The respondent's construction would have the unlikely consequence that where a farmer has incurred several farm debts from a creditor and several distinct disputes arise in relation to those farm debts, there is a requirement for that first dispute to be mediated, but not any of the others, even though the nature of each dispute may be quite different. The expression "farm mortgage" in s 8(3) refers to the interests in, or powers over, farm property which have been conferred on a creditor to secure the particular farm debt of a farmer. The s 11 certificate cannot be issued unless the Authority is satisfied that satisfactory mediation has taken place in respect to the farm debt involved – that is, the farm debt secured by particular interests in or powers over farm property. There is a difference between the interests in or powers over farm land which secured the "farm debt involved" in the June 2005 mediation – a debt of $488,250 referred to in the Notice and in the Certificate – and the interests in or powers over the farm land which secure the "farm debt" which the respondent wished to enforce by starting these proceedings – a much larger debt of $754,811.38 arising under the Third Loan Agreement. The greater size of the debt meant that the respondent's interests in or powers over the appellant's farm land were greater and therefore different. The critical date in this case is 1 November 2007 – the day when the respondent took enforcement action against the appellant by instituting the Supreme Court proceedings. The failure of the notice of contention point means that on that day the farm mortgage did not secure any obligations of the appellant under either the First or the Second Loan Agreements, only the Third. The obligations under the Third Loan Agreement were obligations of the appellant as a debtor owing a farm debt secured by a farm mortgage. The textual considerations set out above invalidate the respondent's first group of arguments. The other group of the respondent's arguments were summarised by it thus: "The appellant's construction, which gives rise to a multiplicity of mortgages, does not explain by what power these further mortgages come into being. There is nothing pointed to in the dealings between the parties which suggests a contractual intention to create a multiplicity of mortgages. On the contrary, the memorandum of common provisions makes clear that there is one 'all monies' mortgage that remains in force even when the debt is paid down." There is one instrument of mortgage – the Registered First Mortgage. Searching for a contractual intention to create a multiplicity of mortgages is an incomplete and partially misleading activity. Each of the First, Second and Third Loan Agreements, read with the Registered First Mortgage, successively created distinct interests in, and powers over, the farm property owned by the appellant securing her obligations as debtor. The Act, by virtue of the broad definition of "farm mortgage" in s 4(1), treated those distinct interests and powers as giving rise to three successive "farm mortgages". The respondent endeavoured to controvert those conclusions by relying on the continuation in force of the Registered First Mortgage even if all debts had been paid. It continued in force because of cl 1.4 (which provided that even if the amount owing were repaid, the property would remain mortgaged to the respondent until it actually released the property from the Registered First Mortgage). It also continued in force because of s 65 of the RP Act (requiring the extinguishment of a registered RP Act mortgage to be effected by execution of a discharge in the approved form, and by its registration). But the continuation in force of the Registered First Mortgage does not alter the conclusion that if all debts had been paid there would have been no "farm mortgages". The respondent submitted that one consequence of the appellant's construction was so unsatisfactory as to suggest it was not correct. The consequence was that if a farmer and a creditor fall into disputation about a farm debt secured under a farm mortgage, participate in a successful mediation, agree on terms settling the dispute, and then fall into disputation about the farmer's alleged breach of the settlement terms, s 8(1) would prevent enforcement action in relation to the settlement terms even if a s 11 certificate had been issued. This submission assumes that a new farm debt would have been created. The respondent concedes that the consequence, unsatisfactory or not, could be brought about if the obligations under the settlement terms were secured by a fresh instrument of mortgage. But the unsatisfactory consequence would not follow if the settlement terms involved only adjustments to the farm debt such as extending the term to pay, reducing the principal or capitalising interest. These adjustments would leave the initial farm debt in place; to that initial farm debt the s 11 certificate could apply; and s 8(3) would affect the s 8(1) immunity from enforcement action. Sackville AJA said that this approach would cause "the rights of the parties [to] depend on nice and potentially difficult questions as to whether the farm debt in existence at the time of the mediation … is the same farm debt in existence at the time of the [post-mediation] enforcement action"39, particularly where, by reason of ss 12 and 17, lawyers might not be involved in the mediation or in the drafting of any agreement resulting from it, and where mediations are to be conducted with informality, without technicality and with expedition Macfarlan JA correctly said it would be easy for the parties to provide in the settlement terms that they did not discharge the farm debt about which the mediation took place. The respondent submitted that this is inconsistent with "the informality and lack of technicality with which the Act seeks to imbue the mediation process (ss 14 and 17)." It is true that the provisions referred to do not require that mediators be lawyers and do not give a right to legal representation during the mediation itself. But they do not prevent engaging the services of lawyers to draft the settlement terms. However, it would be unrealistic to deny that Sackville AJA was correct to suggest that in at least some circumstances difficult questions may arise. Whether the unattractiveness of those difficulties are determinative depends on a comparison with the unattractiveness of the respondent's construction. On the respondent's construction, the Act does not entitle a farmer to more than one mediation every three years. As Macfarlan JA pointed out, if a farm mortgage secures a large loan to buy a farm and a small loan to buy a tractor, on the respondent's construction any mediation by the farmer of a dispute about the small loan will debar mediation of a later unrelated dispute about the large loan. Sackville AJA suggested, in a manner which Tobias JA found "not altogether satisfactory"40, specific circumstances in which a farmer’s entitlement would not be limited to one mediation every three years. However, there are certainly some circumstances where that limitation would exist. Macfarlan JA was, with respect, correct to conclude that this result was "contrary to the manifestly remedial policy underlying the Act."41 39 Waller v Hargraves Secured Investments Ltd (2010) 15 BPR 28,765 at 28,788 [128] per Sackville AJA. 40 Waller v Hargraves Secured Investments Ltd (2010) 15 BPR 28,765 at 28,766- 41 Waller v Hargraves Secured Investments Ltd (2010) 15 BPR 28,765 at 28,777 [63]. The respondent also submitted that the appellant's construction was absurd, because it meant that "if a farmer and creditor enter into five distinct loan agreements, and secure them with a single 'all monies' farm mortgage, if the farmer fails to make his payments under the agreements, he is entitled to a mediation for each of the five debts." It might be absurd if the farmer in question was relying on the same point in the dispute which led to each mediation. It would not be absurd if the circumstances underlying each dispute were different. Travaux préparatoires The trial judge relied on a statement in the Second Reading Speech delivered in relation to the Farm Debt Mediation Amendment Bill 1996, which, when enacted, amended the Act, suggesting that once a creditor has obtained a s 11 certificate, there is no obligation to submit to any mediation in future42. Remarks by a Minister after legislation has been enacted, if receivable at all under s 34 of the Interpretation Act 1987 (NSW), must have very little weight compared with those made before the legislature enacted it. Even if they are receivable, in any event, as Macfarlan JA pointed out, there is an Explanatory Note to the Farm Debt Mediation Amendment Bill 1996 which points against the conclusion favoured by the trial judge and the majority of the Court of Appeal. The Note states43: "At present a certificate issued under section 11 of this Act is valid for an unlimited time. The certificate is issued following any instance of successful mediation between the parties or of bona fide attempted mediation by the creditor, and effectively excludes the debt concerned from the operation of the Act from that time onward. Schedule 1[7] amends section 11 so that the validity of the certificate is limited to the period of three years after its issue." (emphasis added) Macfarlan JA correctly stated that this passage implies that "a s 11 certificate was intended to apply only to a farm mortgage in respect of the farm debt that was the subject of a mediation."44 42 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 30 October 1996 at 5532. 43 New South Wales, Farm Debt Mediation Amendment Bill 1996, Explanatory Note 44 Waller v Hargraves Secured Investments Ltd (2010) 15 BPR 28,765 at 28,776 [58]. Other arguments by the appellant The appellant contended that the issue of the Certificate was void because by the time it was issued the "farm debt involved" in the mediation which had been certified had ceased to exist. In view of her success on other arguments, it is not necessary to decide this point. That is also so for another argument advanced by the appellant – that the Certificate related to only one farm mortgage, comprising the farm debt owed under the First Loan Agreement and the Registered First Mortgage, and did not relate to the distinct farm mortgage which the respondent wished to enforce, comprising the farm debt owed under the Third Loan Agreement and the Registered First Mortgage. The money judgment The respondent submitted that even if ss 6 and 8(1) barred its claim to possession, the dissenting reasons for judgment of Macfarlan JA in the Court of Appeal had been correct to hold that its claim to a money judgment was not barred. As Macfarlan JA pointed out, the judgment of the trial judge does not suggest that the point was argued before him. Macfarlan JA also said that before the Court of Appeal the point was dealt with only in a limited way in oral argument and not at all in writing. Because Tobias JA and Sackville AJA adopted different reasoning from that of Macfarlan JA, it was not relevant for them to consider the money judgment. The respondent's submission on the money judgment must be rejected. Clause 1.1 of the Registered First Mortgage provided: "By signing this mortgage you undertake certain obligations as mortgagor. You also give us rights concerning you and the property – for example, if you do not comply with your obligations, we may take possession of the property, sell it and sue you for any remaining money you owe us." Clause 1.3 provided: "You must ensure that you are not in default under this mortgage. You must also carry out on time all your obligations under every agreement covered by this mortgage including the obligation to pay any of the amount owing." (emphasis in original) The expression "agreement covered by this mortgage" was defined in cl 35 of the Registered First Mortgage thus: an agreement or other arrangement (including a deed) under which one or more of you incurs or owes obligations to us or under which we have rights against you, including any such agreement or arrangement which all of you acknowledge in writing to be an agreement covered by this mortgage; and each variation of it." The expression "amount owing" was defined in cl 35 of the Registered First Mortgage as meaning: "at any time, all money which one or more of you owe us, or will or may owe us in the future, including under this mortgage or an agreement covered by this mortgage." (emphasis in original) Clause 18(a) provided that the appellant would be in default if she did not pay the "amount owing" on time. After referring to a period of grace given by cl 19.1, cl 19.3 of the Registered First Mortgage provided: "If you do not correct that default within that period or if there is a default that cannot be corrected, then, to the extent it is not already due for payment, the amount owing becomes immediately due for payment at the end of the grace period without further notice. In addition, we may then do one or more of the following as well as anything else the law allows us to do as mortgagee: sue you for the amount owing". (emphasis in original) These provisions thus made a failure to pay interest on time an event of default entitling the respondent to sue for it and take possession. The expression "enforcement action" is defined in s 4(1) of the Act as meaning not only taking possession of the property, but "any other action to enforce the mortgage". In the Amended Statement of Claim the respondent pleaded that it was a term of the Registered First Mortgage that interest be paid monthly in accordance with, inter alia, the Third Loan Agreement. In the Amended Statement of Claim the respondent also pleaded that the appellant was obliged, under the Registered First Mortgage, to pay the principal sum ($640,000) with interest owing. The respondent contended that a claim for a debt is not "enforcement action" because it does not involve the enforcement of security over the farm property. The better view, with respect, is that the definition of "enforcement action" is wide enough to extend beyond enforcement of the security by taking possession to include reliance on any of the rights in the farm mortgage. And since the claim to the order for possession was solely based on the breach of the money obligations arising under the Registered First Mortgage and the Third Loan Agreement, it was inextricably interlinked with the claim for a money judgment. The definition of "enforcement order" in s 4(1) provides that it does not include "the enforcement of a judgment that was obtained before the commencement of this Act". The word "judgment" is not judgments) open limited to judgments other than money judgments. Had that type of enforcement action not been excluded, it would have fallen within the definition of "enforcement action". The exclusion leaves the enforcement of judgments (including money the commencement of the Act. It follows that action to obtain a money judgment after the commencement of the Act is "enforcement action" so long as it is action to enforce the mortgage. The structure of the Amended Statement of Claim, and the manner in which the proceedings were conducted, justify the characterisation of the respondent's conduct as action to enforce the mortgage, and hence as "enforcement action". they were obtained after Hence the attempt in the Supreme Court proceedings to obtain a money judgment was an action barred by s 8(1) as much as the seeking of possession. The contrary construction would have consequences pointing against its correctness. One of those consequences is that if the effect of the definition of "enforcement order" read with s 8(1) was to debar the claim for possession but not the money claim, the appellant's victory would be a hollow one. The respondent could simply obtain the money judgment, use it to bankrupt the appellant, and then take whatever its share of her bankrupt estate was. Depending on the extent of claims by other secured creditors and by unsecured creditors, this might be, for the respondent, an inferior result to that obtainable by enforcement of the respondent's security interest in priority to the general creditors. But it would be just as damaging to the appellant, for she would have lost her farm despite s 8(1). The parties' authorities Among the authorities to which the parties referred were various authorities on the Act45. These authorities were not directly on point on the issues debated. It is therefore not necessary to discuss them. Orders There is a potential question about the costs of the proceedings in the Common Law Division of the Supreme Court of New South Wales. The appellant contended in that Division that the proceedings should be dismissed on either of two bases – s 6 of the Act, or the Contracts Review Act. The trial judge rejected both bases. He erred in rejecting the former basis, and his rejection of the latter basis has not been challenged. In the Court of Appeal, Macfarlan JA, 45 Varga v Commonwealth Bank of Australia (1996) 7 BPR 15,052; Commonwealth Bank of Australia v Trellis Holdings Ltd (1996) 19 ACSR 319; Australian Cherry Exports Ltd v Commonwealth Bank of Australia (1996) 39 NSWLR 337. who considered that his rejection of the former basis was partly erroneous, would have invited written submissions on the question of costs before the trial judge. No application to this Court to make a special costs order in relation to the proceedings in the Common Law Division has been made, and hence the potential question does not arise. In those circumstances the following orders should be made. The appeal should be allowed with costs. The orders made by the Court of Appeal of the Supreme Court of New South Wales should be set aside. In their place, it should be ordered that the appeal to the Court of Appeal be allowed with costs, and that the orders made by Harrison J be set aside. In place of the latter orders, it should be ordered that the proceedings be dismissed, and that the respondent/plaintiff pay the costs of the appellant/defendant in the Common Law Division of the Supreme Court.

HIGH COURT OF AUSTRALIA PUBLIC TRUSTEE OF QUEENSLAND APPELLANT AND FORTRESS CREDIT CORPORATION (AUS) 11 PTY LTD & ORS RESPONDENTS Public Trustee of Queensland v Fortress Credit Corporation (Aus) 11 Pty Ltd [2010] HCA 29 1 September 2010 ORDER Appeal dismissed. Appellant to pay first respondent's costs. On appeal from the Supreme Court of Queensland Representation W Sofronoff QC, Solicitor-General of D B O'Sullivan for the appellant (instructed by Clayton Utz Lawyers) the State of Queensland with D F Jackson QC with M J Luchich for the first respondent (instructed by Baker & McKenzie Solicitors) Submitting appearance for the second, third and fourth respondents No appearance for the fifth respondent Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Public Trustee of Queensland v Fortress Credit Corporation (Aus) 11 Pty Ltd Corporations – Charge – Registration – First respondent ("Fortress") obtained fixed and floating charge over assets of second respondent ("Octaviar") – Charge secured all moneys payable under or in relation to certain documents, including such documents as Fortress and Octaviar agreed in writing – Fortress and Octaviar subsequently agreed by deed ("Deed") that charge secured liability of Octaviar to Fortress under guarantee – Whether charge void, to extent it secured Octaviar's guarantee, under s 266 of the Corporations Act 2001 (Cth) ("the Act") – Whether execution of Deed required notice to be lodged under s 268 of the Act – Whether Deed effected "variation in the terms of the charge" – Relevance of legislative policy expressed in Ch 2K of the Act – Whether Deed created new charge requiring registration under s 263 of the Act. Words and phrases – "charge", "terms of the charge", "variation in the terms". Corporations Act 2001 (Cth), ss 263, 266, 268. FRENCH CJ, GUMMOW, HAYNE, KIEFEL AND BELL JJ. This appeal from the Court of Appeal of the Supreme Court of Queensland (Holmes and Muir JJA and White J)1 concerns the construction and application of Ch 2K of the Corporations Act 2001 (Cth) ("the Act"). Chapter 2K (ss 261-282) is headed "Charges" and Pt 2K.2 (ss 262-277) deals with the registration of charges on company property. The Court of Appeal set aside a declaratory order made on 6 March 2009 by the primary judge (McMurdo J)2. His Honour held that a fixed and floating charge over the assets of the second respondent ("Octaviar") in favour of the first respondent ("Fortress Credit"), granted by instrument dated 1 June 2007 ("the Charge"), was void to the extent that it would secure the liability of Octaviar to Fortress upon the guarantee of the indebtedness of Young Village Estates Pty Ltd ("YVE"). Fortress contended that the Charge had, at least from 22 January 2008, secured the liability of Octaviar on the guarantee of the indebtedness of YVE ("the YVE Guarantee"). YVE had purchased assets with funds advanced to it by Fortress from a managed investment scheme then managed by a subsidiary of Octaviar. Initially the Charge had secured the liability of Octaviar to Fortress Credit upon Octaviar's guarantee of the obligations to Fortress Credit of a subsidiary, Octaviar Castle Pty Ltd ("Octaviar Castle"). The Charge was registered as required by ss 262 and 263 of the Act on 6 June 2007. However, the indebtedness of Octaviar Castle was paid in full on or about 29 February 2008. The terms of the Charge then would have entitled Octaviar to a discharge, and s 269 of the Act would have entitled Octaviar to seek from Fortress Credit, and lodge, a memorandum acknowledging the discharge of the liability. But Fortress Credit contended that the Charge remained on foot because since 22 January 2008 it also secured the still current liability of Octaviar to Fortress Credit on the YVE Guarantee and that, as at 17 December 2008, the amount secured by the Charge was in excess of $59 million. In September 2008 administrators were appointed to Octaviar and another subsidiary, the third respondent ("Octaviar Administration"). Each company subsequently executed a deed of company arrangement under Pt 5.3A of the Act (ss 435A-451D). The appellant ("the Public Trustee") is trustee for certain (2009) 74 ACSR 156. (2009) 69 ACSR 621. Bell noteholders. It applied to the Supreme Court on 19 February 2009 for orders under s 445D terminating each deed. The Public Trustee contended that each deed had been premised upon the validity in all respects of the Charge, whereas it did not validly secure the YVE Guarantee. McMurdo J then ordered the separate determination of the question of the validity of the Charge, before the trial of the s 445D applications. Section 266(3) of the Act states: "Where, after there has been a variation in the terms of a registrable charge on property of a company having the effect of increasing the amount of the debt or increasing the liabilities (whether present or prospective) secured by the charge: an order is made, or a resolution is passed, for the winding up of the company; or an administrator of a company is appointed under section 436A, 436B or 436C; or a company executes a deed of company arrangement; the registrable charge is void as a security on that property to the extent that it secures the amount of the increase in that debt or liability unless: a notice in respect of the variation was lodged under section 268: within the period of 45 days specified in subsection 268(2) or that period as extended by the Court under subsection (4) of this section; or not later than 6 months before the critical day; or the period of 45 days specified in subsection 268(2), or that period as extended by the Court under subsection (4) of this section, has not ended at the start of the critical day and the notice is lodged before the end of that period." (emphasis added) As will appear, the critical phrase in s 266(3) is "a variation in the terms of a registrable charge ... having the effect of ...". Bell By a deed dated 22 January 2008 ("the January 2008 Deed"), the parties to which were Fortress, Octaviar and Octaviar Castle, it was provided that "the YVE Guarantee is a Transaction Document for the purposes of the Facility Agreement". The Facility Agreement was dated 1 June 2007 and was made between Fortress Credit as lender, Octaviar Castle as borrower, and Octaviar and Octaviar Administration as guarantors3. The term "Transaction Document" was defined in the Facility Agreement in terms to include each document which Fortress Credit and Octaviar agreed in writing was a Transaction Document. The Charge bore the same date, 1 June 2007, as the Facility Agreement. By cl 2.1 Octaviar charged to Fortress Credit all of the "Secured Property" (being all of its present and future property) as security for payment of the "Secured Money" (defined to include all moneys that became payable by Octaviar to Fortress Credit "under or in relation to a Transaction Document"). Upon the appeal to this Court the only active disputants were the Public Trustee and Fortress Credit. Two questions arise. The first is whether the January 2008 Deed was a "variation in the terms" of the Charge to which s 268(2) of the Act applied. The second is whether the January 2008 Deed created a new charge to which the registration provisions of ss 262 and 263 applied. For the reasons which follow, both questions should be answered in the negative and the appeal by the Public Trustee should be dismissed with costs. Chapter 2K of the Act The provisions of Ch 2K relating to the giving of notice in relation to, and the registration and priorities of, charges apply to those kinds of charges identified in s 262(1). These include floating charges (whether legal or equitable) on the whole or part of the property, business or undertaking of a company (s 262(1)(a)). 3 Octaviar, Octaviar Castle and Octaviar Administration previously were differently named; the corporate styles in these reasons reflect the changes that had been made. Bell Section 266(3), set out above, refers to lodgment of a notice under s 268. Section 268(2) of the Act provides: "Where, after a registrable charge on property of a company has been created, there is a variation in the terms of the charge having the effect of: increasing the amount of the debt or increasing the liabilities (whether present or prospective) secured by the charge; or prohibiting or restricting the creation of subsequent charges on the property; the company must, within 45 days after the variation occurs, ensure that there is lodged a notice setting out particulars of the variation and accompanied by the instrument (if any) effecting the variation or a certified copy of that instrument." (emphasis added) A "charge" is defined to mean "a charge created in any way and includes a mortgage and an agreement to give or execute a charge or mortgage, whether on demand or otherwise" (emphasis added) (s 9). The phrase "in any way" indicates that the creation need not be by written instrument. Section 261(1) defines the concepts of "present" and "prospective" liabilities in relation to charges. A "present liability" means "a liability that has arisen, being a liability the extent or amount of which is fixed or capable of being ascertained, whether or not the liability is immediately due to be met", while a "prospective liability" means "any liability that may arise in the future, or any other liability, but does not include a present liability". The earlier companies legislation None of the provisions dealing with the registration of charges in Pt III of the Companies Act 1948 (UK), or the various Australian Uniform Companies Acts (passed in 1961 and 1962) and their predecessors4, required or enabled the lodging of documents consequent on a variation of a registrable charge. Likewise the provisions in Pt 25 of the Companies Act 2006 (UK) do not deal with charge variations. The provisions of the present Act dealing with variations 4 See Wallace and Young, Australian Company Law and Practice, (1965) Bell in the terms of a charge can be traced back to 1972 and the recommendations of the Eggleston Report5. The Committee stated in its report6: "It has also been suggested that provision should be made for the registration of variations of the terms of the charge. We think that [the Uniform Companies Acts] should require the filing of particulars of any variation in the terms of the charge, and that priority should be accorded to the increased security given by the variation as from the date on which the particulars are filed." However, the Committee did not further explain what was meant by the phrase "variation in the terms of the charge" or the words contained therein. Nor, as Holmes JA noted, does the draft provision recommended by the Committee assist in ascertaining the meaning to be given to that phrase7. The Committee's recommendation, while preferring to deal with the consequence of non-registration of variations as a matter of priorities rather than of invalidity, appears to have resulted in the enactment of ss 205 and 206 of the Companies Act 1981 (Cth) ("the 1981 Act"). The 1981 Act dealt with the Australian Capital Territory and was accompanied by the enactment of parallel State laws. Sections 205 and 206 of the 1981 Act were largely re-enacted as ss 266 and 268 of the Corporations Law. Section 206(2) of the 1981 Act was in substantially the same terms as s 268(2) of the Corporations Law which in turn was substantially the same as s 268(2) of the present Act. The January 2008 Deed The January 2008 Deed was entered into for the purpose of ensuring that the Charge secured the liability of Octaviar under the YVE Guarantee. As noted above, the Charge secured payment of the "Secured Money" which was defined as "all money, obligations and liabilities of any kind that are or may in the future become due, owing or payable … [by Octaviar to Fortress Credit] under or in relation to a Transaction Document". 5 Australia, Company Law Advisory Committee to the Standing Committee of Attorneys-General, Registration of Charges, Seventh Interim Report, July 1972. (2009) 74 ACSR 156 at 170 [49]. Bell The term "Transaction Document" was not defined in the Charge but in the Facility Agreement. The Charge provided that "[t]erms not otherwise defined in this Deed have the meaning given in the Facility Agreement" (cl 1.2). The definition of Transaction Document included "each other document which [Fortress Credit] and [Octaviar Castle] or [Octaviar] agree in writing is a Transaction Document for the purposes of [the Facility Agreement]". The primary judge held that the January 2008 Deed affected the terms of the Charge by adding a liability which was previously unsecured8. His Honour referred for support to Landers v Schmidt9 and Coast Securities No 9 Pty Ltd v Bondoukou Pty Ltd10. But both decisions turned upon the quite different provision in s 73 of the Property Law Act 1974 (Q) which made it an offence for a vendor to mortgage, without consent of the purchaser, land under an instalment contract. The reasons of the Court of Appeal Holmes JA (with whom White J agreed) and Muir JA each delivered separate though broadly similar reasons allowing the appeal to the Court of Appeal. Each held that in establishing whether s 268(2) applies, there must first be a term of the charge which can be shown to have been varied before the effect of that variation becomes relevant under pars (a) or (b) of s 268(2)11. Holmes JA concluded that s 268(2) is directed at variations in the terms of the charge and not changes imposed, in accordance with those terms, on the burden of liability under the charge12. The execution of the January 2008 Deed was no more than the application of the mechanism in the Charge to identify particular liabilities as falling within the category of liabilities which the Charge, in general terms, already secured13. Muir JA held that there was no alteration or modification of (2009) 69 ACSR 621 at 630-631 [33]-[35]. [1983] 1 Qd R 188. 10 (1986) 61 ALJR 285; 69 ALR 385 (PC). 11 (2009) 74 ACSR 156 at 170 [49], 181 [96]. 12 (2009) 74 ACSR 156 at 173 [61]. 13 (2009) 74 ACSR 156 at 172-173 [59]. Bell the written terms of the Charge; after execution of the January 2008 Deed those terms were the same in word and operation as before14. Both Holmes and Muir JJA agreed15 that the legislative policy expressed in Ch 2K was not defeated by acceptance of the interpretation of s 268(2) advanced by Fortress Credit, that the cases of Landers v Schmidt and Coast Securities were of little relevance16, and that the offence provision found in s 270(2) for default in complying with s 268(2) tended against the broad interpretation given by the primary judge17. The appellant's submissions In this Court, the Public Trustee submits that the January 2008 Deed had the effect of varying the terms of the Charge by adding a new liability to the class of liabilities already secured by the Charge, thereby altering the terms of the Charge by adding to the meaning of "Transaction Document". It submits that use of that definition merely foreshadowed the securing by the Charge of future liabilities, and did not amount to an agreement to so secure liabilities falling within that definition. There could be no charge in respect of the YVE Guarantee until the January 2008 Deed, there being no "identified liability" agreed to be secured by the Charge; the definition of Transaction Document meant there was merely an agreement to agree. Hence, a new charge was said to have been created securing the YVE Guarantee. A "variation in the terms of the charge" Given its ordinary meaning, the phrase "agree in writing" in the definition of Transaction Document must be ambulatory and comprehend both "have already agreed" and "hereafter agree". The Charge, from the time of its creation, always encompassed a liability that might be or become owing under a document that was or became a Transaction Document by the parties agreeing so in writing. 14 (2009) 74 ACSR 156 at 180-181 [90]. 15 (2009) 74 ACSR 156 at 170-171 [51], 173 [60], 177 [76]-[77], 179 [87], 183 [102]. 16 And, in any event, those cases could be distinguished and Sibbles v Highfern Pty Ltd (1987) 164 CLR 214; [1987] HCA 66 provided a closer analogy. 17 See Beckwith v The Queen (1976) 135 CLR 569 at 576; [1976] HCA 55; R v Adams (1935) 53 CLR 563 at 567-568; [1935] HCA 62. Bell The Charge always secured that "prospective liability". Thus, contrary to the Public Trustee's submission, the execution of the January 2008 Deed did not vary the terms of the Charge as those terms already encompassed the securing of a class of liabilities. No doubt, as a result of the January 2008 Deed, the YVE Guarantee was now, but had not before been, a Transaction Document. However that did not vary the meaning of "Transaction Document" in the Facility Agreement and consequently the meaning of "Secured Money" in the Charge. Section 268(2) makes clear that there must first be a variation in the terms of the charge before it is necessary to consider whether that variation has the prescribed effect. The YVE Guarantee, as subject matter denoted by the Transaction Document definition, now fell within the class of liabilities secured by the Charge. There was no variation made to the terms of the Charge, either in their text or in the rights and obligations to which those terms gave rise. To focus upon the effect of the January 2008 Deed, as opposed to whether its execution varied the terms of the Charge, is to misconceive the operation of s 268(2). Section 268(2) does not apply to any increase in the debt or liabilities secured. If the parties have chosen that a term of the charge will be variable or ambulatory in its factual operation, as is, for example, common with "all moneys" clauses and the imposition of variable rates of interest, there is no variation in the terms each time its operation is, as a matter of fact, altered or modified. Section 268(3) is consistent with the above reading of s 268(2). It provides that where a charge secures an unspecified amount, a payment or advance made by the chargee to the chargor in accordance with the terms is not taken to be a variation in the terms of the charge having the effect of increasing the amount or the liabilities secured. The chargor might, however, incur a liability to the chargee which would fall outside s 268(3) because it was not based upon a further advance. Would this liability therefore fall within s 268(2)? Counsel for Fortress Credit gave the examples of a charge providing for an early redemption fee or the automatic increase of interest rates upon the happening of a specified event. Both would have the effect of increasing the amount secured. Acceptance of the Public Trustee's construction of s 268(2) would require the giving of notice under s 268(2) in such circumstances. This, as Muir JA noted, would be an unlikely and unattractive result18. Section 268(2) requires notice 18 (2009) 74 ACSR 156 at 181-182 [96]. Bell only for variations in the terms of the charge, having the effect described in pars (a) and (b), and not to modifications in the way in which those terms apply to the circumstances from time to time during the currency of the charge. It follows that there was no variation, within the meaning of s 268(2), in the terms of the Charge upon execution of the YVE Guarantee. For the same reasons, no new charge was created requiring registration under s 263(1). The "terms of the charge" We agree with Muir JA that "terms of the charge" as used in s 268(2), where the charge is created or evidenced by writing, could only be a reference to the terms contained in the written instrument and any terms which may be implied in fact19. Regardless of the means by which a registrable charge is created, it must have terms which can be identified, whether by oral agreement, implication or otherwise. It is unnecessary to decide, as his Honour recognised, whether "terms of the charge" encompasses all of the terms of an instrument or only those relevant to its character as a charge. Holmes JA accepted that the "terms of the charge" are the rights and obligations which the charge creates, the latter encompassing the liabilities secured, which in the present case were to be found in the Charge itself20. Her Honour also said that the "terms of the charge" arguably included the terms of the Facility Agreement. This observation may reveal some unease that the awkward drafting employed had given rise to the present litigation. The drafting technique involved may be criticised in that the pivotal definition of Secured Money in turn refers to another defined term, and one not to be found in the Charge but in a separate document, the Facility Agreement. However, as counsel for the Public Trustee accepted, the fact that the definition was not to be found in the Charge but in another document makes no difference in answering the question of whether there has been a variation in the terms of the Charge having the necessary effect. In allowing the appeal, the Court of Appeal did not need to decide whether terms of the Facility Agreement were "terms of the charge" for the purposes of s 268(2), and these reasons should not be taken to endorse the proposition that they were. 19 (2009) 74 ACSR 156 at 181 [92]. 20 (2009) 74 ACSR 156 at 170 [48]. Bell The system of registration under Ch 2K The Public Trustee contends that the above result would be contrary to the scope and purpose of the registration system established by Ch 2K, if the parties to the Charge had not been required to lodge a notice of variation under s 268. That argument should also be rejected. Wilde v Australian Trade Equipment Co Pty Ltd21 concerned the registration provisions of one of the Uniform Companies Acts, the Companies Act 1961 (Q). In that case Gibbs J, after referring to a number of English cases, said22: "As has been pointed out in the authorities, the requirement that a charge shall be registered is intended to enable persons who are minded to deal with companies to be able, by searching the register, to find out whether the company has encumbered its property or not. In other words the provisions are intended to protect persons who may become unsecured creditors of the company." The majority, Stephen, Murphy and Wilson JJ, with whom Aickin J agreed, differed from Gibbs J as to the result in the particular appeal, but they noted that the authorities also established "that in order to discover the terms and effect of the charge one must look at the document creating the charge and not at the register"23. The registration provisions of the Act do not purport to create a perfect and complete register of all of the details of a registrable charge. Inherent in the types of charges that are registrable under the Act, and the nature of liabilities which may be secured, are uncertainties incapable of being made certain at the point of registration and at all times thereafter. Counsel for Fortress Credit correctly submitted that it is hardly surprising that the monetary obligations underlying the Charge and, given the Charge was both fixed and floating, the property comprising the security, might change from time to time. 21 (1981) 145 CLR 590; [1981] HCA 13. 22 (1981) 145 CLR 590 at 596-597. 23 (1981) 145 CLR 590 at 607. See also In re Mechanisations (Eaglescliffe) Ltd [1966] Ch 20 at 35-36 per Buckley J. Bell Section 263(1) of the Act states, in relevant part: "Where a company creates a charge, the company must ensure that there is lodged, within 45 days after the creation of the charge: a notice in the prescribed form setting out the following particulars: a short description of the liability (whether present or prospective) secured by the charge; …" All that is required by par (a)(iv) of s 263(1) is a "short description" of the liability. In the present case, that description was provided by inclusion of the definitions of Secured Money and Facility Agreement, and the Charge itself, both annexed to the prescribed form. Muir JA rightly said24 that upon registration of the Charge, there was no requirement that the particular amount of the liability secured be specified or that the nature of that liability be described in great detail25. The short description required will necessarily, given the charge may secure prospective liability, often be of a general and ambulatory nature. Paragraph (c) of s 263(1) requires that where a charge is created or evidenced by an instrument or instruments in writing, the originals or copies of such must also be lodged. So much was done in the present case by annexing a copy of the Charge to the prescribed form. Thus a person minded to search the register would be informed, by virtue of the definition of Secured Money and the existence of cl 1.2 of the Charge, of the need to look elsewhere to ascertain the precise nature and details of the liability or liabilities secured. That this would involve a step (locating the definition of Transaction Document in the Facility Agreement) preliminary to ascertaining whether there were any written agreements designating a document or documents as a Transaction Document was accepted by counsel for the Public Trustee to be immaterial in the resolution of this appeal. There is nothing objectionable to the policy of Ch 2K that notice of the January 2008 Deed was not required to be lodged where the particulars lodged for registration adverted to the possibility of its existence. 24 (2009) 74 ACSR 156 at 177 [76]. 25 Compare s 103(1)(b)(ii) of the Uniform Companies Acts which required particulars of "the amount secured by the charge" to be entered on the register. Bell Order The appeal should be dismissed with the appellant to pay the costs of the first respondent.

HIGH COURT OF AUSTRALIA MINISTER FOR IMMIGRATION, CITIZENSHIP, MIGRANT SERVICES AND MULTICULTURAL AFFAIRS APPELLANT AND RESPONDENT Minister for Immigration, Citizenship, Migrant Services and Multicultural [2021] HCA 41 Date of Hearing: 9 September 2021 Date of Judgment: 8 December 2021 ORDER Appeal allowed. Set aside orders 4 and 5 of the orders made by the Full Court of the Federal Court of Australia on 24 August 2020 and, in their place, order that: order 2 of the orders made by the Federal Court of Australia on 20 February 2020 be set aside and, in its place, order that the respondent pay the applicant's costs of the proceeding as agreed or taxed; and the appeal be otherwise dismissed. The appellant pay the reasonable costs of the respondent in this Court. On appeal from the Federal Court of Australia Representation G R Kennett SC with R S Francois for the appellant (instructed by Sparke Helmore Lawyers) C L Lenehan SC with J D Donnelly and K P Tang for the respondent (instructed by Scott Calnan Lawyer) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Minister for Immigration, Citizenship, Migrant Services and Multicultural Immigration – Visas – Cancellation of visa – Revocation of cancellation – Where respondent's temporary visa cancelled under s 501(3A) of Migration Act 1958 (Cth) – Where respondent made representations seeking revocation of cancellation decision under s 501CA(4) – Where representations included bare assertions about conditions in American Samoa – Where Minister decided there was not "another reason" to revoke cancellation decision under s 501CA(4)(b)(ii) – Where Minister made findings about conditions in American Samoa and Samoa – Where it was common ground no evidentiary material to support Minister's findings – Whether Minister always obliged to make findings of fact in response to representations received – Whether Minister's findings relating to hardship respondent's family would face if visa cancellation decision not revoked were open – Whether Minister entitled to rely on personal or specialised knowledge, or commonly accepted knowledge, in making findings about conditions in American Samoa and Samoa – Whether as matter of procedural fairness Minister required to disclose personal or specialised knowledge and invite submissions from applicant about that knowledge before making findings. Words and phrases – "another reason", "bare assertions", "commonly accepted knowledge", "conditions in American Samoa or Samoa", "hardship", "Minister's personal or specialised knowledge", "no evidence", "personal knowledge", "reasons for decision", "removal to American Samoa", "representations about revocation", "specialised knowledge", "visa cancellation". Migration Act 1958 (Cth), ss 501, 501CA. KEANE, GORDON, EDELMAN, STEWARD AND GLEESON JJ. The respondent was born in American Samoa, was largely raised in the Independent State of Samoa ("Samoa"), and is a citizen of New Zealand. At the age of 14 he arrived in Australia. In 2007, he was granted a Class TY Subclass 444 Special Category (Temporary) visa, which he held until 2016. Following his conviction for, amongst other crimes, seriously assaulting his partner, his visa was cancelled under s 501(3A) of the Migration Act 1958 (Cth) ("the Act"). Subsequently, the appellant ("the Minister") decided that there was not "another reason" to revoke that cancellation decision for the purposes of s 501CA(4)(b)(ii). The respondent sought judicial review of that decision in the Federal Court of Australia1. Initially, his application was dismissed, but on appeal2 the Minister's decision was set aside. A majority of the Full Court of the Federal Court decided that the Minister's decision was vitiated by the presence of jurisdictional error3. The Minister has appealed that decision to this Court. For the reasons which follow, the appeal should be allowed. The alleged errors of law For the purposes of making representations about whether there was "another reason" to revoke the visa cancellation decision4, the respondent asserted, amongst other contentions, that there was a "real prospect" that he and his partner and young child, unless the visa cancellation decision were to be revoked, would go to American Samoa, where they would face "substantial impediments". As an example of these "substantial impediments", the respondent submitted that his partner and child would be "unfamiliar with the culture and society in American Samoa", and that his child would "have limited understanding of her father's native language and as such any schooling and advancement in life will be materially affected by the language and cultural barrier that will be placed upon her". He also contended that as "a family unit" they would likely be "homeless, with no job, social ties, welfare or healthcare services in American Samoa". He subsequently diluted this claim and submitted that his partner and child's "prospects at life" 1 Viane v Minister for Home Affairs [2020] FCA 152. 2 Viane v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2020) 278 FCR 386. 3 Viane v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2020) 278 FCR 386 at 403 [61] per Kerr and Charlesworth JJ. 4 Migration Act 1958 (Cth), s 501CA(3)(b). Gordon Edelman Steward Gleeson would be "limited, with little prospects of employment, denial of a first-class education for [his] daughter, problematic healthcare and no social welfare" (emphasis added). None of these contentions were supported by any evidence. In his statement of reasons for decision under s 501CA of the Act, the Minister addressed these concerns, and decided that if the child were to relocate to American Samoa or Samoa she would be "significantly impacted". In reaching this conclusion, the Minister largely accepted the respondent's assertions, but made two qualifying observations which were the subject of successful challenge below. The first was as follows: "I find that the whole family, may, at least initially, experience problems relating to employment, income, housing and lack of family or social support and this would negatively impact on [the respondent's child]. English, however, is widely spoken in American Samoa and Samoa and healthcare, education and some welfare support are available in either location." Notably, no specific claim was made by the respondent about the extent to which English was spoken in either American Samoa or Samoa. The second was in these terms: "I accept that the services available in American Samoa and Samoa may not be of the same standard as those available in Australia, and/or may be more expensive to access, and there may be differences in services between American Samoa and Samoa." In relation to that observation, the Minister remarked that the respondent's family would have "equal access to welfare, healthcare and educational services as do American Samoans and Samoans in a similar position". The respondent contended that each observation, about the speaking of English and the availability of services in American Samoa and Samoa, was made without any evidentiary support. In that respect, it was common ground that there was no objective evidentiary material before the Minister capable of supporting either finding5. This led to the majority's finding that the Minister wrongly afforded 5 Other than the draft reasons for decision which the Minister's Department had prepared. Gordon Edelman Steward Gleeson less weight to the child's interests, and "so affected a critical aspect of the Minister's reasoning"6. It should be noted that the respondent has never suggested that the Minister's observations were in fact incorrect. Even though it was open to the respondent to show this, assuming each observation in fact to be mistaken, he has chosen not to do so. On appeal to this Court, senior counsel for the respondent strikingly submitted that even if the two impugned observations were true, the Minister had nonetheless erred because those findings were made without the support of "some probative material"7. Tellingly, the respondent did not attack equivalent findings made about conditions in New Zealand. For example, the Minister said in his reasons: "In relation to New Zealand, I find that [the respondent] and his family will have access to similar social services and healthcare support to those enjoyed by citizens of New Zealand. I find that these services are of a similar level to those available in Australia and that New Zealand is culturally and linguistically similar to Australia." In light of the foregoing, the respondent has nonetheless indicated that if he is to be deported, he would choose to move to American Samoa, even though, it would seem, he accepts that the standards of social services in New Zealand are much higher than those, as he contends, that are available in American Samoa. He then relies precisely on that lack of services as a reason for the revocation of the visa cancellation decision. Ultimately, each impugned finding, together with other findings that have not been challenged, led the Minister to determine that it was in the best interests of the respondent's child that the cancellation decision be revoked, and that the respondent's removal to American Samoa or Samoa would result in "significant adjustments and hardship" for him and his family. In other words, the Minister accepted the substance of the claims made. However, the Minister weighed these favourable factors against the risk of harm to the Australian community if the respondent were not removed. The Minister considered that this risk was 6 Viane v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2020) 278 FCR 386 at 403 [61] per Kerr and Charlesworth JJ. 7 Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 at 657 [145], [147] per Gummow J. Gordon Edelman Steward Gleeson "unacceptable" and that it "outweighed" the factors favouring revocation of the cancellation decision. No attack has been made on the manner in which the Minister weighed these various matters in not reaching a state of satisfaction that there was "another reason" for revocation of the cancellation decision. Fact finding for the purposes of s 501CA The legal capacity conferred on the Minister by s 501CA of the Act to revoke a decision to cancel a visa is premised upon the prior exercise of the power of cancellation conferred by s 501(3A). Importantly, once the conditions of s 501(3A) are fulfilled, the power of cancellation is mandatory; the Minister must cancel the visa8. In contrast, the power of revocation is broad9. Upon receiving representations about revocation in accordance with s 501CA(4), the Minister must determine whether to be satisfied that the person passes the character test (as defined by s 501(6)) or whether there is "another reason why the original decision should be revoked"10. The relevant statutory scheme mandated by s 501CA of the Act comprises: the giving of relevant information to a person whose visa has been cancelled; inviting that person to make representations about why that cancellation decision should be revoked; the receipt of representations by the Minister made in accordance with that invitation; and, thereafter, the formation of a state of satisfaction, or not, by the Minister that the cancellation decision should be revoked. That scheme necessarily requires the Minister to consider and understand the representations received. What is "another reason" is a matter for the Minister. Under this scheme, Parliament has not, in any way, mandated or prescribed the reasons which might justify revocation, or not, of a cancellation decision in a given case. It follows that there may be few mandatorily relevant matters that the Minister must consider in applying s 501CA(4)(b)(ii). Thus, the Minister is not obliged to take account of any non-refoulement obligations, as expressed in the Act or otherwise, when determining whether there is another reason to revoke a cancellation decision where the materials "do not include, or the circumstances do 8 Falzon v Minister for Immigration and Border Protection (2018) 262 CLR 333 at 347 [44] per Kiefel CJ, Bell, Keane and Edelman JJ. 9 Applicant S270/2019 v Minister for Immigration and Border Protection (2020) 94 ALJR 897 at 902 [36] per Nettle, Gordon and Edelman JJ; 383 ALR 194 at 201. 10 Migration Act 1958 (Cth), s 501CA(4)(b). Gordon Edelman Steward Gleeson not suggest, a non-refoulement claim"11. The power must otherwise be exercised reasonably and in good faith12. No part of the statutory power conferred by s 501CA of the Act obliges the Minister to make actual findings of fact as an adjudication of all material claims made by an applicant. Based upon the representations made by an applicant, the cancellation decision and the "relevant information" given to the applicant pursuant to s 501CA(3)(a), the Minister must, when the Minister is not satisfied that an applicant passes the character test, then determine relevantly whether to be satisfied that there is "another reason" why the cancellation decision should be revoked13. Deciding whether or not to be satisfied that "another reason" exists might be the product of necessary fact finding, or the product of making predictions about the future, or it might be about assessments or characterisation of an applicant's past offending. If the representations made lack any substance altogether, then this of itself might justify a decision not to be satisfied that "another reason" exists to revoke the cancellation decision, without any need to make any findings of fact about the various claims made. Moreover, some of the topics that might be traversed might not lend themselves to be addressed by way of evidence14. They may involve matters of judgment, especially when weighing factors for and against revocation. The breadth of the power conferred by s 501CA of the Act renders it impossible, 11 Applicant S270/2019 v Minister for Immigration and Border Protection (2020) 94 ALJR 897 at 902 [33] per Nettle, Gordon and Edelman JJ; 383 ALR 194 at 200. 12 R v Connell; Ex parte The Hetton Bellbird Collieries Ltd (1944) 69 CLR 407 at 430 per Latham CJ (Starke J agreeing). See also Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 205 CLR 507 at 532 [73] per Gleeson CJ and Gummow J; Wei v Minister for Immigration and Border Protection (2015) 257 CLR 22 at 35 [33] per Gageler and Keane JJ. In the case of a delegate of the Minister or the Administrative Appeals Tribunal, any written directions given by the Minister must also be complied with: s 499 of the Migration Act 1958 (Cth). 14 Muin v Refugee Review Tribunal (2002) 76 ALJR 966 at 1010 [262] per Hayne J; 190 ALR 601 at 661. Gordon Edelman Steward Gleeson nor is it desirable, to formulate absolute rules about how the Minister might or might not be satisfied about a reason for revocation. If the Minister is not satisfied that another reason for revocation exists, s 501G(1) of the Act obliges the Minister to give the applicant a written notice setting out, amongst other things, the decision, specifying the provision – and its effect – under which the decision was made, and the reasons for the decision15. In Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme, a majority of this Court said that the minimum obligation under s 501G was to express the "essential ground or grounds"16 for the conclusion reached by the Minister. Importantly, a failure to comply with s 501G does not invalidate the decision made under s 501CA17. For the purpose of giving "reasons", the Minister is also obliged, pursuant to s 25D of the Acts Interpretation Act 1901 (Cth), to set out the findings on material questions of fact and refer to the evidence or other material on which those findings were based. The respondent here did not suggest that s 25D had not been complied with. If the Minister exercises the power conferred by s 501CA(4) and in giving reasons makes a finding of fact, the Minister must do so based on some evidence or other supporting material, rather than no evidence or no material, unless the finding is made in accordance with the Minister's personal or specialised knowledge or by reference to that which is commonly known. By "no evidence" this has traditionally meant "not a skerrick of evidence"18. There is otherwise nothing in the statutory language of s 501CA(4) of the Act that prohibits the Minister from using personal or specialised knowledge, or commonly accepted knowledge, for the purpose of considering the representations made by an applicant, and in determining whether the Minister is satisfied that 15 Where the decision was made by the Minister's delegate, the notice must also set out the applicant's rights of review: s 501G(1)(f) of the Migration Act 1958 (Cth). (2003) 216 CLR 212 at 224 [40] per Gleeson CJ, Gummow and Heydon JJ. 17 Migration Act 1958 (Cth), s 501G(4). See also Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme (2003) 216 CLR 212 at 225 [45] per Gleeson CJ, Gummow and Heydon JJ. 18 Australian Retailers Association v Reserve Bank of Australia (2005) 148 FCR 446 at 587 [575] per Weinberg J, quoting Aronson, Dyer and Groves, Judicial Review of Administrative Action, 3rd ed (2004) at 239. Gordon Edelman Steward Gleeson there is "another reason" for revocation. Indeed, there are simply no limitations on the sources of information that may be considered by the Minister in determining whether to reach the state of satisfaction prescribed by s 501CA(4)(b)(ii). Nor is there any express requirement that the Minister disclose whether a material finding was made from personal knowledge. In the circumstances of the present case, where no evidence or other material has been identified in support of the Minister's findings about the speaking of English and the availability of services in American Samoa and Samoa, it can be assumed that the findings proceeded from the Minister's personal or specialised knowledge or were matters commonly known. In exercising the power conferred by s 501CA(4) of the Act, the Minister is free to adopt the accumulated knowledge of the Minister's Department ("the Department"). Indeed, it is now well established that the Minister may adopt as the Minister's own written reasons a draft prepared by a departmental officer, provided that such reasons actually reflect the reasons why the Minister had reached her or his decision19. There is no necessary dividing line, for the purposes of s 501CA of the Act, between the use of personal or specialised knowledge, or the use of that which is commonly known, as against the need for some evidence or other material to support a finding which the Minister may make. Where the Minister wishes to make a finding in support of a conclusion that she or he is not satisfied that there is "another reason" for revocation, and the Minister has personal or specialised knowledge which supports that finding, the Minister may use that knowledge. The Minister may also supplement or support such a finding with evidence or other material. Where the finding is not within such personal or specialised knowledge, and is not a matter commonly known, it will need to be supported by some evidence or other material. It cannot be asserted without any basis at all. Different 19 Minister for Immigration and Multicultural Affairs v W157/00A (2002) 125 FCR 433 at 446 [39] per Branson J (Goldberg and Allsop JJ agreeing); C Incorporated v Australian Crime Commission (2010) 113 ALD 226 at 241-242 [59] per Black CJ, Mansfield and Bennett JJ; Folau v Minister for Immigration and Border Protection (2017) 256 FCR 455 at 474 [78], 475 [84], 477 [90] per Murphy and Burley JJ. Gordon Edelman Steward Gleeson considerations might arise if the finding in question was material to the process of reasoning and was incorrect20. But that has not been suggested here. It would, one would hope, be a rare case where a fact is asserted in support of a reasoned outcome under s 501CA of the Act which has no basis for its existence. However, there have been exceptions in extreme and rare cases where the Minister has made particular or personal findings about an applicant, which could not have been the subject of any pre-existing personal or specialised knowledge (or common knowledge), and were not otherwise supported in any way. Examples of this have included findings made in the absence of any evidence or supporting material about the danger an applicant might pose in the future to the Australian community, and about the type of hardship an applicant might It finally remains to be observed, and emphasised, that an applicant's prospects of persuading the Minister to revoke a cancellation decision will doubtless be all the greater if the applicant adduces evidence, or other supporting material, to make good the claims that she or he makes. The production of such evidence or material in the applicant's representations would engage the need for the Minister to consider such evidence and, if necessary, to answer it with further or different evidence, or other material, if the claims are to be rejected. The decision of the Full Court Because it was common ground that there was no evidence before the Minister concerning the speaking of English or the availability of health and welfare support in American Samoa or Samoa, the basis upon which the Minister had reached his conclusions on those matters assumed importance below. The majority decided that the evidence did not support a finding that the Minister used his own personal knowledge. That was so for four expressed reasons22. First, the Minister's own reasons did not expressly state that he was relying on his personal 20 cf Duggan v Federal Commissioner of Taxation (1972) 129 CLR 365 at 368-369, 21 See, eg, Hands v Minister for Immigration and Border Protection (2018) 267 FCR 628; Assistant Minister for Immigration and Border Protection v Splendido (2019) 271 FCR 595. 22 Viane v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2020) 278 FCR 386 at 399-400 [42]-[46] per Kerr and Charlesworth JJ. Gordon Edelman Steward Gleeson knowledge. Secondly, the matters were said not to be commonly known, which supported an inference that the basis for the two findings could not have been drawn from personal knowledge. Thirdly, it could not be inferred that the Minister had the required personal knowledge on the basis that he was the Minister charged with the responsibility of administering the Act. Fourthly, there was no evidence that the author of the Department's draft reasons had "any appreciation" of the Minister's prior knowledge. As the majority concluded that it was an implied condition for the exercise of the power conferred by s 501CA(4) of the Act that the Minister's state of satisfaction "be formed on the basis of factual findings that are open to be made on the evidentiary materials"23, it was said that this condition had not been complied with. This principle was said by senior counsel for the respondent to be supported by the reasons of Gummow J in Minister for Immigration and Multicultural Affairs v Eshetu24. In the result, the majority determined that the impugned findings were "critical"25 to the Minister's reasoning process, and so it followed that the Minister had made a jurisdictional error. In contrast, Besanko J found that both matters were within the Minister's personal knowledge. His Honour also found that the respondent had made no relevant claim about the extent to which English is spoken in American Samoa and Samoa, and that this impugned finding had not, in any event, been shown to be "wrong"26. Moreover, and critically, both matters were said to support the ultimate finding, namely that "removal to Samoa or American Samoa [would] 'involve significant adjustments and hardship for the [respondent] and his family'"27, a matter which favoured the respondent. It followed that the Minister had not erred. 23 Viane v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2020) 278 FCR 386 at 400 [47] per Kerr and Charlesworth JJ. (1999) 197 CLR 611 at 657 [145], [147]. 25 Viane v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2020) 278 FCR 386 at 401 [48], [52], 403 [61] per Kerr and 26 Viane v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2020) 278 FCR 386 at 393 [13]. 27 Viane v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2020) 278 FCR 386 at 393-394 [14]. Gordon Edelman Steward Gleeson The Minister's personal knowledge With respect, Besanko J was correct. In the circumstances of this case, the obvious inference is that the two impugned findings were the product of the Minister's personal or specialised knowledge. Senior counsel for the respondent expressly disavowed any suggestion that the Minister had merely made things up. Again, with respect, the four reasons relied upon by the majority below for concluding that each observation was not made using the Minister's personal or specialised knowledge should not be accepted. Given the store of knowledge the Minister will have built up over many years, from dealing with individuals from so many countries and territories, the source of such specific observations about conditions in American Samoa and Samoa could only have been from the Minister's experience. In that respect, to reiterate, it had not been shown that either observation was incorrect. It follows that the majority's observation that the Minister's satisfaction or non-satisfaction for the purposes of s 501CA(4) of the Act must be formed on the basis of factual findings that are open to be made on the evidentiary materials is not, with great respect, entirely correct. First, and as already mentioned, the Minister is not prohibited from using the accumulated knowledge of the Department. Secondly, representations may be received which are no more than bare assertions about a course of future events. The Minister may simply not be persuaded that such assertions can constitute "another reason" for revocation. Such a conclusion does not require the Minister to make any factual findings. Finally, because of the applicable statutory regime, the respondent's particular deployment of Eshetu was, with respect, misconceived. It also follows that the Minister did not err in law when making the two impugned findings. It is, therefore, not necessary to address the reasoning of the majority, or the respondent's submissions, to the effect that the suggested errors were jurisdictional in nature. Notice of contention The respondent sought to support the majority's decision below on two additional and alternative bases: first, that it was not legally permissible for the Minister to have relied on his personal or accumulated specialised knowledge instead of evidence; and secondly, that if it was permissible to rely on such knowledge, the observations about the widespread use of English and the state of health and welfare services in American Samoa and Samoa, as a matter of Gordon Edelman Steward Gleeson procedural fairness, should have been disclosed to the respondent to permit him to make submissions about those matters. The first contention has no basis. As already mentioned, there is nothing in the language of s 501CA of the Act that limits the sources of information that may be used by the Minister in determining whether to be satisfied that there is "another reason" for revocation of an earlier visa cancellation decision. Nor did the respondent refer to any other provision of the Act which would qualify the power conferred in the way suggested. The respondent accepted that he needed leave to rely on the second contention, as it was new. It is not necessary to consider the issue of leave, as the second contention should, in any event, also be rejected. It was the respondent who made claims about how he and his family would be exposed to adverse conditions if his family were to follow him to American Samoa or Samoa. He was given the opportunity to make submissions about such issues and to support his claims with evidence. In the end, he relied only upon bare assertions. By his reasons, the Minister gave his response to that claim, which, in substance, was no more than to reject it. He was under no obligation to disclose his disagreement and give the respondent yet another opportunity to make claims about the likely conditions in American Samoa or Samoa28. This is not a case where the Minister relied upon information or matters that could not have been knowable by the respondent29. Nor is there any equivalent here to ss 424AA or 424A of the Act for the purposes of reaching a state of satisfaction under s 501CA(4). Even if such a provision existed, it would not oblige the Minister to give "advance written notice" of the reasons on this issue30. 28 Kioa v West (1985) 159 CLR 550 at 587 per Mason J (Deane J agreeing); Muin v Refugee Review Tribunal (2002) 76 ALJR 966 at 1010-1011 [265] per Hayne J; 190 ALR 601 at 661-662. 29 See, eg, Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576 at 591-592 per Northrop, Miles and French JJ; SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 152 at 164-165 [41]-[44] per Gleeson CJ, Kirby, Hayne, Callinan and Heydon JJ. 30 SZBYR v Minister for Immigration and Citizenship (2007) 81 ALJR 1190 at 1196 [18] per Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ; 235 ALR 609 at 616. See also SZBEL v Minister for Immigration and Multicultural and Indigenous Gordon Edelman Steward Gleeson The appeal should be allowed. The Minister should pay the reasonable costs of the respondent in this Court. Orders 4 and 5 of the orders made by the Full Court of the Federal Court of Australia on 24 August 2020 should be set aside and, in their place, it should be ordered that: order 2 of the orders made by the Federal Court of Australia on 20 February 2020 be set aside and, in its place, order that the respondent pay the applicant's costs of the proceeding as agreed or taxed; and the appeal be otherwise dismissed. Affairs (2006) 228 CLR 152 at 166 [48] per Gleeson CJ, Kirby, Hayne, Callinan and

HIGH COURT OF AUSTRALIA APPELLANT AND THE QUEEN RESPONDENT Magaming v The Queen [2013] HCA 40 11 October 2013 ORDER Appeal dismissed. On appeal from the Supreme Court of New South Wales Representation N J Williams SC with J B King and D W Robertson for the appellant (instructed by Legal Aid Commission of NSW) P W Neil SC with P M McEniery for the respondent (instructed by Commonwealth Director of Public Prosecutions) Interveners J T Gleeson SC, Solicitor-General of C P O'Donnell and G A Hill Commonwealth, Solicitor) intervening the Commonwealth with the (instructed by Australian Government the Attorney-General of for M G Sexton SC, Solicitor-General for the State of New South Wales with J E Davidson for the Attorney-General for the State of New South Wales, intervening (instructed by Crown Solicitor (NSW)) M G Hinton QC, Solicitor-General for the State of South Australia with C Jacobi for the Attorney-General for the State of South Australia, intervening (instructed by Crown Solicitor (SA)) G R Donaldson SC, Solicitor-General for the State of Western Australia with T C Russell for the Attorney-General for the State of Western Australia, intervening (instructed by State Solicitor (WA)) G J D del Villar for the Attorney-General of the State of Queensland, intervening (instructed by Crown Law Qld)) K L Eastman SC with H Younan for the Australian Human Rights Commission, as amicus curiae (instructed by Australian Human Rights Commission) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Magaming v The Queen Constitutional law – Judicial power of the Commonwealth – Constitution, Ch III – Appellant crew member of boat carrying passengers with no lawful right to come to Australia – Appellant convicted of aggravated offence of smuggling group of at least five non-citizens reckless as to whether they had lawful right to enter Australia under s 233C(1) of Migration Act 1958 ("Act") – Section 236B of Act prescribed mandatory minimum sentence for offence under s 233C(1) of five years' imprisonment with minimum non-parole period of three years – Whether ss 233A(1) and 233C(1) coextensive – Whether prescription of mandatory minimum sentence for offence under s 233C(1) conferred judicial power to determine punishment on prosecuting authorities – Whether s 236B incompatible with institutional integrity of courts – Whether s 236B required court to impose arbitrary and non-judicial sentence. Words and phrases – "aggravated offence", "institutional integrity", "judicial power", "mandatory minimum penalty", "prosecutorial discretion". Constitution, Ch III. Migration Act 1958 (Cth), ss 233A(1), 233C(1), 236B. FRENCH CJ, HAYNE, CRENNAN, KIEFEL AND BELL JJ. The issues The Migration Act 1958 (Cth) ("the Act") created two offences prohibiting a person organising or facilitating the bringing or coming to Australia of persons who are not citizens and have no lawful right to come to Australia. (Non-citizens with no lawful right to come to Australia were referred to in argument as "unlawful non-citizens" and it is convenient to adopt that usage.) One offence (called1 "people smuggling") was to organise or facilitate the bringing or coming to Australia of another person who was an unlawful non-citizen. The other (described2 as an "[a]ggravated offence of people smuggling (at least 5 people)") was to organise or facilitate the bringing or coming to Australia of a group of at least five persons, at least five of whom were unlawful non-citizens. The first, simple, form of offence (created by s 233A(1)) carried no mandatory minimum sentence; the second, aggravated, offence (created by s 233C(1)) carried3 a mandatory minimum term of imprisonment of five years with a minimum non-parole period of three years. A person who smuggled a group of five or more unlawful non-citizens could be charged with either offence. Were the provisions creating the offences, or was the provision fixing a mandatory minimum term of imprisonment for the aggravated offence, beyond legislative power? Did all or some of the provisions confer judicial power on prosecuting authorities by giving those authorities a choice of which offence to prosecute when the choice affected whether an offender must be sentenced to imprisonment? These reasons will demonstrate that none of the provisions was shown to be invalid. s 233A, inserted by s 3 and Sched 1, item 8 of the Anti-People Smuggling and Other Measures Act 2010 (Cth) ("the 2010 Act"). s 233C, also inserted by s 3 and Sched 1, item 8 of the 2010 Act. s 236B(3)(c) and (4)(b). Hayne Crennan Bell The facts and proceedings On 6 September 2010, HMAS Launceston intercepted a boat near Ashmore Reef. The boat was carrying 56 persons: four crew and 52 passengers. The appellant was one of the crew. The passengers were not Australian citizens and none had a lawful right to enter Australia. The appellant pleaded guilty in the District Court of New South Wales to one count of facilitating the bringing or coming to Australia of a group of five or more unlawful non-citizens contrary to s 233C of the Act. He was sentenced to the mandatory minimum term of five years' imprisonment. A non-parole period of three years was fixed. In sentencing the appellant, the Chief Judge of the District Court (Chief Judge Blanch) said that it was "perfectly clear that [the appellant] was a simple Indonesian fisherman who was recruited by the people organising the smuggling activity to help steer the boat towards Australian waters". Chief Judge Blanch said that the seriousness of the appellant's part in the offence fell "right at the bottom end of the scale" and that, in the ordinary course of events, "normal sentencing principles would not require a sentence to be imposed as heavy" as the mandatory minimum sentence. The appellant sought leave to appeal to the Court of Criminal Appeal, alleging that s 233C of the Act was invalid "insofar as it required ... the imposition of a mandatory minimum sentence of five years with a non-parole period of 3 years". (Because it was s 236B which provided for the mandatory minimum sentence, the reference to s 233C may have been inapt. Nothing was said to turn on this and argument in this Court proceeded without close attention to which of ss 233A, 233C and 236B was said to be invalid.) The appellant's application to the Court of Criminal Appeal was heard together with applications for leave to appeal against sentences imposed on four other applicants convicted of the same or substantially similar offences. The appellant and two of the other applicants in the Court of Criminal Appeal had been sentenced to the mandatory minimum term fixed by s 236B. The Court of Criminal Appeal (Bathurst CJ, Allsop P, McClellan CJ at CL, Hall and Bellew JJ) granted leave to appeal but dismissed4 the appeals, holding that the relevant provisions were not invalid. 4 Karim v The Queen (2013) 274 FLR 388. Hayne Crennan Bell leave By special The the appellant appealed Attorneys-General of the Commonwealth, New South Wales, South Australia, Queensland and Western Australia intervened in support of the respondent. The Australian Human Rights Commission was given leave to make written submissions as amicus curiae. this Court. The appellant's arguments In this Court, the appellant submitted that the elements of the offences created by ss 233A and 233C were "identical save for the number of unlawful non-citizens concerned". Thus, so the argument continued, where the number of unlawful non-citizens concerned was five or more, "ss 233A and 233C are coextensive". Upon this platform, the appellant sought to build three closely related arguments: first, that the relevant provisions were incompatible with the separation of judicial and prosecutorial functions; second, that those provisions were incompatible with the institutional integrity of the courts; and third, that the provisions required a court to impose sentences that are "arbitrary and non-judicial". In addition, the appellant sought to take the third proposition (about "arbitrary and non-judicial" sentences) and enlarge it into a distinct and more general submission that the mandatory minimum penalty imposed in this case was "incompatible with accepted notions of judicial power" because it distorted a judicial function affecting liberty in a manner "not reasonably proportionate to the end of general deterrence" which the law sought to serve. It is convenient to deal first with the proposition that, for relevant purposes, "ss 233A and 233C are coextensive". "Coextensive" offences? There was, and could be, no dispute that the offences created by ss 233A and 233C had different elements. Section 233A required proof that the accused organised or facilitated the bringing or coming to Australia of another person; s 233C required proof that the accused organised or facilitated the bringing or coming to Australia of a group of at least five persons. Proof of the latter offence would constitute proof of the former, but that would be because proof of the latter offence would prove more than was required to prove the former. In this respect, ss 233A and 233C followed a long-established and common pattern of legislating for criminal offences. There are now, and long have been, many statutory offences where one form of offence can be seen as an Hayne Crennan Bell aggravated form of another. The various statutory forms of the offence of assault5 are a familiar example of this pattern. Proof of the aggravated form of offence will usually constitute proof of the simple offence and, in that way, the two offences can be seen to overlap. Statutory provisions6 permitting a jury to return a verdict of guilt to the lesser offence, though the only offence expressly charged is the aggravated offence, reinforce this view of the two offences as overlapping. Likewise, statutory provisions and common law principles about double jeopardy7, as well as relevant common law principles of sentencing8, depend upon recognising the extent to which offences overlap. But in no relevant sense can it be said that simple and aggravated forms of offence are "coextensive". The most that can be said is that the two offences (one simple, the other aggravated) have some (often many) common elements; at least one further element must be proved to establish the more serious offence. In many cases of that kind, it would be possible to describe the simple offence as a "lesser included offence": "lesser" in the sense of less serious, and "included" inasmuch as proof of the aggravated offence would necessarily establish the elements of the simple offence9. But the particular form of description that may be applied does not matter for present purposes. What does matter is that the offences have different elements and are distinct. The offences created by ss 233A and 233C overlapped but they were not coextensive. Proof of an offence under s 233C required proof of an element different from, and additional to, the elements of the offence under s 233A. Proof of an offence under s 233C required proof that a group of five or more unlawful non-citizens was to be brought to Australia. Proof of an offence under s 233A required only proof that one unlawful non-citizen was to be brought to Australia. 5 See, for example, Crimes Act 1900 (NSW), ss 59 and 61. 6 See, for example, Criminal Procedure Act 1986 (NSW), ss 165-169. 7 See, for example, Crimes Act 1914 (Cth), s 4C(1) and (2); Pearce v The Queen (1998) 194 CLR 610; [1998] HCA 57; Island Maritime Ltd v Filipowski (2006) 226 CLR 328; [2006] HCA 30. 8 R v De Simoni (1981) 147 CLR 383; [1981] HCA 31. Island Maritime (2006) 226 CLR 328 at 349-350 [60]-[62]. Hayne Crennan Bell Contrary to the appellant's submission10, the text and structure of s 233A and the Act as a whole do not permit11 reading the relevant element of the offence created by s 233A as if it referred to one or more unlawful non-citizens. It may be accepted that proving that an accused had organised or facilitated the bringing or coming to Australia of several unlawful non-citizens would be sufficient to prove commission of an offence under s 233A. (It is not necessary to examine whether a charge framed in that way would be duplicitous or otherwise embarrassing.) But the proof in that case would go beyond what was necessary to establish contravention of s 233A. All that it was necessary to prove in order to establish the offence created by s 233A was that one unlawful non-citizen was the subject of the forbidden conduct. That was the relevant element of the offence created by s 233A. Before turning to consider the different ways in which the appellant alleged that ss 233A, 233C and 236B (or some of them) were invalid, it is desirable to say something about the decision to lay a charge where prosecuting authorities reasonably consider that the facts which it is expected will be proved at trial would establish the commission of more than one offence. Prosecutorial discretion It is well established12 that it is for the prosecuting authorities, not the courts, to decide who is to be prosecuted and for what offences. Since February 1986, the Office of the Commonwealth Director of Public Prosecutions has published the guidelines that will be followed in making decisions relating to the prosecution of Commonwealth offences. Those guidelines, set out in the "Prosecution Policy of the Commonwealth", have been amended from time to time but it is not necessary to describe those changes. In 10 Developed by reference to s 23(b) of the Acts Interpretation Act 1901 (Cth) and its provision, when read with what is now s 2(2), that, subject to contrary intention, words in any Act in the singular number include the plural. 11 cf Blue Metal Industries Ltd v Dilley (1969) 117 CLR 651 at 656; [1970] AC 827 at 846; Walsh v Tattersall (1996) 188 CLR 77 at 90-91; [1996] HCA 26. 12 Maxwell v The Queen (1996) 184 CLR 501; [1996] HCA 46. See also Likiardopoulos v The Queen (2012) 86 ALJR 1168 at 1171 [2]-[4]; 291 ALR 1 at 3; [2012] HCA 37; Elias v The Queen (2013) 87 ALJR 895 at 904 [34]-[35]; 298 ALR 637 at 647-648; [2013] HCA 31. Hayne Crennan Bell accordance with long-established prosecutorial practice throughout Australia, the guidelines have provided for many years that "[i]n the ordinary course the charge or charges laid or proceeded with will be the most serious disclosed by the evidence". The guidelines set out considerations that may bear upon the decision not to follow that "ordinary course", but it is not necessary to describe those considerations. Nearly twelve months after the appellant had pleaded guilty to, and been sentenced to the mandatory minimum term of imprisonment for, an offence against s 233C, the Attorney-General of the Commonwealth directed the Director of Public Prosecutions, in effect, to depart from the policy of charging the most serious offence disclosed by the evidence in respect of people smuggling offences. On 27 August 2012, the Attorney, acting under s 8(1) of the Director of Public Prosecutions Act 1983 (Cth), directed that the Director "not institute, carry on or continue to carry on a prosecution for an offence" under s 233C of the Act unless satisfied that the accused had committed a repeat offence, the accused's role in the people smuggling venture extended beyond that of a crew member, or a death had occurred in relation to the venture. The direction was expressed not to apply to proceedings, including appeals, in relation to an offence for which a person had been sentenced before the date of the direction. The direction, therefore, did not apply to the proceedings against the appellant. The asserted grounds of invalidity As has already been noted, the appellant submitted that the relevant provisions of the Act were invalid as "incompatible with the separation of judicial and prosecutorial functions", as "incompatible with the institutional integrity of the courts" or as requiring "the court to impose sentences that are arbitrary and non-judicial". It is convenient to take the first two of these points together and then deal with both the allegation of imposing sentences that are arbitrary and non-judicial and the related and larger proposition that the minimum sentence prescribed is incompatible with accepted notions of judicial power. Alleged incompatibility Central to the appellant's assertions about incompatibility was the argument that ss 233A and 233C gave prosecuting authorities a "choice" about what sentence an accused would suffer on conviction. The reference to "choice" about sentence conflated several distinct steps in the prosecution and punishment of crime and is apt to mislead. Hayne Crennan Bell Conduct of an accused may, if proved, establish the elements of more than one offence. Framing the charge or charges to be laid against an accused often requires a prosecutor to choose between available charges. The very notion of prosecutorial discretion about what charges will be laid depends upon the existence of a choice between charges. The relevant offences may carry different sentences. In such a case, choosing the charge to be laid against an accused may well affect the punishment which will be imposed if the accused is convicted. If one of the offences has a mandatory minimum penalty, and the other does not, charging the accused with the former offence necessarily exposes the accused to that mandatory minimum penalty on conviction. But although the prosecutor chooses which charge to lay, the prosecutor does not choose what punishment will be imposed. The court must determine the punishment to be imposed in respect of the offence of which the accused has been convicted and the court must determine that punishment according to law. It may be that, as Barwick CJ said13 in Palling v Corfield: "It is both unusual and in general ... undesirable that the court should not have a discretion in the imposition of penalties and sentences, for circumstances alter cases and it is a traditional function of a court of justice to endeavour to make the punishment appropriate to the circumstances as well as to the nature of the crime." Whether or not that is so, as Barwick CJ also said14, "[i]f Parliament chooses to deny the court such a discretion, and to impose ... a duty [to impose specific punishment] ... the court must obey the statute in this respect assuming its validity in other respects". The appellant did not go so far as to submit that the availability, or the exercise, of prosecutorial discretion about what charge would be laid against an accused, without more, entailed the conclusion that the provisions creating the relevant offences were beyond power as conferring judicial power on the prosecutor. That is, the appellant did not submit that the bare fact that a prosecutor had a choice between charges meant that the impugned provisions of 13 (1970) 123 CLR 52 at 58; [1970] HCA 53; cf Fraser Henleins Pty Ltd v Cody (1945) 70 CLR 100 at 122 per Starke J; [1945] HCA 49. 14 (1970) 123 CLR 52 at 58. Hayne Crennan Bell the Act were, or any of them was, invalid on that account alone. Rather, the appellant's argument depended upon giving determinative significance to the legislative provision for a mandatory minimum penalty for one offence but not the other. The appellant founded his argument on the dissenting reasons of Jordan CJ in Ex parte Coorey15. To explain that opinion, it is necessary to say something about the legislation considered in it: the Black Marketing Act 1942 (Cth) and regulations made under the National Security Act 1939 (Cth) ("the National Security Regulations"). Jordan CJ concluded16 that, subject to a few exceptional cases, the Black Marketing Act did not create new offences. Rather, his Honour considered17 that the Black Marketing Act "takes a large number of acts which are already offences because breaches of National Security Regulations or Orders made thereunder, [and] stigmatizes them as black marketing". The Black Marketing Act provided18 that a person was not to be prosecuted for the offence of black marketing without the consent of the Attorney-General given after the Attorney had received a report from the Minister administering the relevant regulations and advice from a committee of three departmental representatives appointed by the Attorney. The offence of black marketing was punishable by a minimum sentence of three months' imprisonment if prosecuted summarily and a minimum sentence of twelve months' imprisonment if prosecuted on indictment. Contraventions of the National Security Regulations could be punished under the National Security Act by fine or imprisonment or both. To the extent to which an offence created by the Black Marketing Act was identical with an offence created independently of that Act, Jordan CJ concluded19 that the Black Marketing Act purported "to invest a person who is 15 (1944) 45 SR (NSW) 287. 16 (1944) 45 SR (NSW) 287 at 299. 17 (1944) 45 SR (NSW) 287 at 299. 19 (1944) 45 SR (NSW) 287 at 300. Hayne Crennan Bell not a competent Court with part of the judicial power of the Commonwealth, in that it purports to enable him at his discretion to dictate the penalty in particular cases" (emphasis added). The Black Marketing Act was said20 to have this effect because "[i]t leaves the existing penalties [scil for breach of the National Security Regulations] generally operative, but [the Attorney-General], in particular cases chosen by him, to dictate to a Court of Justice that at least a certain penalty shall be imposed in the event of conviction, no such minimum being generally operative". to authorise it purports By contrast, Davidson J21 and Nicholas CJ in Eq22 held that the impugned provisions did not confer judicial power on the Attorney or the committee advising the Attorney and were therefore valid. As Davidson J said23, "the Legislature of the Commonwealth ... vested in the Attorney-General a power which is not judicial, and although it has the effect of limiting in some degree the discretion of the Court in imposing penalties, that limitation only operates in the future upon a contingency of a conviction by the Court". A few months after the decision in Ex parte Coorey, the reasons of, and conclusion reached by, Jordan CJ in that case were advanced in this Court, in Fraser Henleins Pty Ltd v Cody24, in support of an attack on the validity of the Black Marketing Act similar, if not identical, to that mounted in Ex parte Coorey. All five Justices rejected25 the reasoning of, and conclusion reached by, Jordan CJ in Ex parte Coorey. As in Ex parte Coorey, the premise on which this Court considered the validity of the relevant provisions of the Black Marketing Act in Fraser Henleins was that there were two identical offences carrying different penalties. Neither in Fraser Henleins nor in Ex parte Coorey was any consideration given to the 20 (1944) 45 SR (NSW) 287 at 300. 21 (1944) 45 SR (NSW) 287 at 313-315. 22 (1944) 45 SR (NSW) 287 at 319-320. 23 (1944) 45 SR (NSW) 287 at 314. 24 (1945) 70 CLR 100. 25 (1945) 70 CLR 100 at 118-120 per Latham CJ, 121-122 per Starke J, 124-125 per Dixon J, 131-132 per McTiernan J, 139-140 per Williams J. Hayne Crennan Bell validity of that premise, and its validity need not now be examined. For the purposes of this appeal, it is necessary to make only two points about the two decisions. First, the essential premise for the opinion expressed by Jordan CJ in Ex parte Coorey (that the offences carrying different penalties were identical) was not established in this case. As has already been explained, the offences created by ss 233A and 233C of the Act were not identical and were not, as the appellant submitted, "coextensive" in their operation. The elements of the two offences were different. Second, and more importantly, there is no reason to doubt the correctness of Fraser Henleins. The appellant's submission that Fraser Henleins was wrongly decided and should be reopened must be rejected. It is to be noted that Fraser Henleins was later considered and applied by this Court in Palling v Corfield26 and that no doubt was then cast upon what was said in the earlier decision. Nothing said or decided in Palling, or in subsequent cases, casts doubt upon the general proposition that it is for the prosecuting authorities (not the courts) to decide who will be prosecuted and for what offences. The decisions which a prosecutor makes about what offences to charge may well affect what punishment will be imposed if the accused is convicted. But that observation does not entail, as the appellant's argument necessarily assumed, that the prosecutor exercises judicial power in choosing to charge an aggravated form of offence rather than the simple form of that offence. If, as in this case, one available charge is of an offence for which a mandatory minimum penalty is provided and there is another available charge of a different offence for which no minimum penalty is prescribed, the prescription of a mandatory minimum penalty for one of the offences does not lead to any different conclusion. Prosecutorial choice between the two charges is not an exercise of judicial power. In this respect, it is no different from the choice which a prosecutor must often make between proceeding summarily against an accused and presenting an indictment (which commonly will expose the accused to a penalty heavier than could be imposed in summary proceedings). 26 (1970) 123 CLR 52. Hayne Crennan Bell Prosecutorial choice between proceeding summarily and proceeding on indictment is not an exercise of judicial power27. Whether other considerations would arise if a prosecutor were to be given some power to invoke the application of a different and higher penalty by some means other than the laying of a distinct and separate charge28 need not be examined. It is enough to conclude that the availability or exercise of a choice between charging an accused with the aggravated offence created by s 233C, rather than one or more counts of the simple offence created by s 233A, is neither incompatible with the separation of judicial and prosecutorial functions nor incompatible with the institutional integrity of the courts. Legislative prescription of a mandatory minimum penalty for the offence under s 233C neither permits nor requires any different answer. (It is, therefore, neither necessary nor profitable to consider whether, in the circumstances of this case, the appellant could have been charged with 52 counts of people smuggling contrary to s 233A.) The limitation of prosecutorial discretion worked by the Attorney's subsequent direction about charging people smuggling offences is not to the point. As it happens, the direction ameliorated the position of persons facing charges of people smuggling. But if, instead of ameliorating the position, the Attorney's direction had required the charging of the most serious offence disclosed by the evidence, it would have done no more than reflect long-established prosecutorial practice. In either case, if the direction was validly given (and the contrary was not suggested), neither giving the direction, nor implementing it by charging offenders in the manner required, would constitute any exercise of judicial power. Neither giving the direction, nor implementing it, would be incompatible with the separation of judicial and prosecutorial functions or incompatible with the institutional integrity of the courts. "Arbitrary and non-judicial" punishment? The appellant's argument that the mandatory minimum penalty prescribed by s 236B for offences against s 233C was "arbitrary and non-judicial" was developed in three steps. It was said, first, that there was "no legislative 27 Fraser Henleins (1945) 70 CLR 100 at 120. 28 cf Palling v Corfield (1970) 123 CLR 52 and National Service Act 1951 (Cth), s 49(2) as inserted by s 22 of the National Service Act 1968 (Cth). Hayne Crennan Bell conclusion as to the irreducible seriousness of an offence against ss 233A and 233C", and second, that there were "insufficient statutory criteria of general application to take the decision whether to invoke the minimum penalty provision outside the description of arbitrary or capricious". It followed, so the argument continued, that there was "no fixed relationship between the seriousness of an offence against ss 233A and 233C and the sentence imposed, causing sentences to be unpredictable and therefore arbitrary and incompatible with Ch III" of the Constitution. Two closely related propositions underpinned all of these aspects of the appellant's argument. First, the offences created by ss 233A and 233C were treated as identical for all relevant purposes. As has already been demonstrated, that is not right. The offences had different elements. And it is not right to say that there was "no legislative conclusion as to the irreducible seriousness" of the offence created by s 233C. The prescription of a mandatory minimum penalty for the offence created by that section was the Parliament's conclusion about what was the least penalty that should be imposed on any offender for a breach of that section. Second, each aspect of this part of the appellant's argument assumed that, because proof of the aggravated offence created by s 233C would necessarily prove the simple offence under s 233A, no different questions about punishment could or should arise according to whether the aggravated offence had been charged and proved or only the simple offence. And because the simple offence carried no mandatory minimum penalty, the argument sought to characterise imposition of the mandatory minimum penalty on a person convicted of the aggravated offence as "arbitrary" or "non-judicial". Shorn of the disapproving epithets, the appellant's submission amounted to the proposition that the Parliament cannot, consistent with Ch III of the Constitution, prescribe a mandatory minimum penalty for an aggravated offence if no mandatory minimum penalty is prescribed for the simple offence. How or why that should be so was not explained. The larger proposition which the appellant advanced was that the legislative prescription of a mandatory minimum penalty for an offence under s 233C distorted "the judicial sentencing function" and that the distortion was "not reasonably proportionate to the end of general deterrence" which the law sought to serve. The proposition came very close to, perhaps even entailed, the still larger proposition that legislative prescription of a mandatory minimum penalty is necessarily inconsistent with Ch III. Hayne Crennan Bell As the appellant rightly submitted, adjudging and punishing criminal guilt is an exclusively judicial function. In very many cases, sentencing an offender will require the exercise of a discretion about what form of punishment is to be imposed and how heavy a penalty should be imposed. But that discretion is not unbounded. Its exercise is always hedged about by both statutory requirements29 and applicable judge-made principles. Sentencing an offender must always be undertaken according to law. In Markarian v The Queen, the plurality observed30 that "[l]egislatures do not enact maximum available sentences as mere formalities. Judges need sentencing yardsticks." The prescription of a mandatory minimum penalty may now be uncommon31 but, if prescribed, a mandatory minimum penalty fixes one end of the relevant yardstick. The appellant may be right to have submitted, as he did, that, even at 1901, mandatory minimum custodial sentences were "rare and exceptional". But as the appellant's submission implicitly recognised, mandatory sentences (including, at 1901, sentence of death and, since, sentence of life imprisonment) were then, and are now, known forms of legislative prescription of penalty for crime. Legislative prescription of a mandatory minimum term of imprisonment for an offence was not, and is not, on that account alone inconsistent with Ch III. Presumably with this proposition in mind, the appellant sought to attack the validity of prescribing the particular minimum sentence fixed in respect of an offence under s 233C by submitting that, if the penalty was fixed as a general deterrent, it was "for an offender at the bottom end of the scale ... manifestly disproportionate to the offence committed" (emphasis added). This appeal to proportionality impermissibly mixed two radically different ideas. The appellant sought, by reference to statements made in Monis v The Queen32 about how the relationship between a law and a constitutionally guaranteed freedom which is not absolute may be tested, to allege that the 29 See, for example, Crimes Act 1914 (Cth), s 16A. 30 (2005) 228 CLR 357 at 372 [30]; [2005] HCA 25. 31 Wong v The Queen (2001) 207 CLR 584 at 599 [36]; [2001] HCA 64. 32 (2013) 87 ALJR 340 at 408 [345]-[347] per Crennan, Kiefel and Bell JJ; 295 ALR 259 at 345-346; [2013] HCA 4. Hayne Crennan Bell prescription of the particular mandatory minimum penalty was not proportionate to the end it sought to serve. The appellant identified that end as general thereby excluding from consideration any other purpose of deterrence, punishment. How or why that exclusionary step should be taken was not explained. And the appellant also sought, by his reference to "an offender at the bottom end of the scale", to engage the accepted sentencing principle which requires a judge exercising a discretion about sentence to impose a sentence which is proportionate. The sentence imposed must be proportionate in the sense that it properly reflects the personal circumstances of the particular offender and the particular conduct in which the offender engaged when those circumstances and that conduct are compared with other offenders and offending. The basic proposition which the appellant advanced was that the prescription of a mandatory minimum penalty for the offence created by s 233C of the Act contravened Ch III of the Constitution. No satisfactory reason was provided for applying proportionality reasoning of the kind described in Monis in determining whether Ch III was contravened. At what point of the analysis of that proposition proportionality reasoning would properly be deployed, or how it would be deployed, was not explained. All that was said, in effect, was that the sentence which had to be, and was, imposed on the appellant was too "harsh". But the standard of comparison implicitly invoked was not identified. The comparison sought to be made was not amplified beyond, or supported by more than, generalised assertions of what was "necessary" to work sufficient general deterrence of the proscribed conduct. How, or whether, this Court could decide what generally prescribed level of penalty is "necessary" or "not necessary" to deter certain conduct need not be considered in this appeal. It is enough to say that the appellant demonstrated no basis for applying proportionality reasoning or for forming the factual conclusions on which this aspect of his argument depended. If, as the appellant submitted, the sentence which the Act required the sentencing judge to impose on him was too "harsh" when measured against some standard found outside the relevantly applicable statutory provisions, that conclusion does not entail invalidity of any of the impugned provisions. Conclusion and orders For these reasons, the appellant's challenges to the validity of ss 233A, 233C and 236B of the Act should be rejected. The appeal should be dismissed. Introduction Mr Magaming, an Indonesian fisherman then aged 19, was recruited by organisers of a people smuggling activity to steer a boat which brought a group of 52 unlawful non-citizens to Australia. The Commonwealth Director of Public Prosecutions ("the CDPP") might have charged him with one or more counts of the offence of people smuggling created by s 233A of the Migration Act 1958 (Cth) ("the Act"). The CDPP instead charged him with the aggravated offence of people smuggling created by s 233C of the Act. The elements of the offence of people smuggling created by s 233A of the Act and the elements of the aggravated offence of people smuggling created by s 233C of the Act are identical save for the number of non-citizens whose bringing or coming to Australia, or whose entry or proposed entry into Australia, the offender must be proved to a court intentionally to have organised or facilitated, being reckless as to those non-citizens having no lawful right to come to Australia: one in the case of the offence of people smuggling; and a group of at least five in the case of the aggravated offence of people smuggling. The offence of people smuggling carries a maximum penalty of 10 years' imprisonment. The aggravated offence of people smuggling carries a maximum penalty of 20 years' imprisonment. The aggravated offence also attracts the application of s 236B(3)(c) and (4)(b) of the Act, which make mandatory the imposition on conviction of a penalty of imprisonment of at least five years with a non-parole period of at least three years. Mr Magaming pleaded guilty to the aggravated offence of people smuggling with which he was charged. He was sentenced to the mandatory minimum of five years' imprisonment with a three-year non-parole period. The sentencing judge made clear that the objective seriousness of Mr Magaming's conduct would have led to a lesser sentence absent the mandatory minimum. Counsel for Mr Magaming advance on his behalf the proposition that a purported conferral by the Commonwealth Parliament on an officer of the Commonwealth executive of a discretion to prosecute an individual within a class of offenders for an offence which carries a mandatory minimum penalty, instead of another offence which carries only a discretionary penalty, amounts in substance to a purported legislative conferral of discretion to determine the severity of punishment consequent on a finding of criminal guilt and is for that reason invalid by operation of Ch III of the Constitution. They acknowledge that the unanimous war-time decision of the High Court in Fraser Henleins Pty Ltd v Cody33 stands against that proposition. They ask that Fraser Henleins be reopened and overruled. I would reopen and overrule Fraser Henleins and accept the constitutional proposition they advance. Counsel for Mr Magaming then argue that s 236B(3)(c) and (4)(b) of the Act impart that constitutionally invalidating character to the CDPP's discretion to prosecute the aggravated offence of people smuggling created by s 233C, to which s 236B(3)(c) and (4)(b) attach, instead of prosecuting one or more counts of the offence of people smuggling created by s 233A. The prosecutorial discretion of the CDPP is an aspect of the general power of the CDPP to prosecute offences against laws of the Commonwealth conferred by s 9 of the Director of Public Prosecutions Act 1983 (Cth) ("the CDPP Act"). I would accept their argument and hold s 236B(3)(c) and (4)(b) of the Act to be invalid. Chapter III, criminal punishment and prosecutorial discretion The Commonwealth Parliament can choose to confer many functions on courts which are not exclusively judicial, in that Parliament might equally choose to confer the same functions on officers of the executive. The determination and punishment of criminal guilt is not one of those interchangeable functions. There has never been any doubt that "convictions for offences and the imposition of penalties and punishments are matters appertaining exclusively to [judicial power]"34. There has equally never been any doubt that the separation of the judicial power of the Commonwealth by Ch III of the Constitution renders those matters capable of resolution only by a court. It has been said in this respect35: "There are some functions which, by reason of their nature or because of historical considerations, have become established as essentially and exclusively judicial in character. The most important of them is the adjudgment and punishment of criminal guilt under a law of the Commonwealth. That function appertains exclusively to and 'could not be excluded from' the judicial power of the Commonwealth. That being so, Ch III of the Constitution precludes the enactment, in purported pursuance of any of the subsections of s 51 of the Constitution, of any law 33 (1945) 70 CLR 100; [1945] HCA 49. 34 Waterside Workers' Federation of Australia v J W Alexander Ltd (1918) 25 CLR 434 at 444; [1918] HCA 56. 35 Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 27; [1992] HCA 64 (footnotes omitted). purporting to vest any part of that function in the Commonwealth Executive." To that it has been added36: "In exclusively entrusting to the courts designated by Ch III the function of the adjudgment and punishment of criminal guilt under a law of the Commonwealth, the Constitution's concern is with substance and not mere form." Why that should be so is founded on deeply rooted notions of the relationship of the individual to the state going to the character of the national polity created and sustained by the Constitution. The separation of the judicial power of the Commonwealth by Ch III of the Constitution ensures that no individual can be deprived of life or liberty at the instance of an officer of the Commonwealth executive as punishment for an asserted breach by the individual of a Commonwealth criminal prohibition, except as a result of adjudication by a court of the controversy between the executive and the individual as to whether that breach has occurred and if so whether that deprivation of life or liberty is to occur. Whether guilt is to be found, and if so what, if any, punishment is to be imposed, are questions which arise sequentially in the resolution of that single justiciable controversy. That structural necessity for adjudication by a court has the effect of applying to the determination of the underlying controversy between the executive and the individual "the Constitution's only general guarantee of due process"37. Due process is constitutionally guaranteed at least to the extent that the court must always be independent of the executive and impartial38, that the procedure adopted by the court at the initiative of the executive must always be fair to the individual39, and that the processes of the court must (at least ordinarily) be open to the public40. 36 (1992) 176 CLR 1 at 27. See also Nicholas v The Queen (1998) 193 CLR 173 at 233 [148]; [1998] HCA 9. 37 Re Tracey; Ex parte Ryan (1989) 166 CLR 518 at 580; [1989] HCA 12. 38 Forge v Australian Securities and Investments Commission (2006) 228 CLR 45 at 81 [78]; [2006] HCA 44. 39 Assistant Commissioner Condon v Pompano Pty Ltd (2013) 87 ALJR 458 at 477 [67], 494 [156], 497 [177]; 295 ALR 638 at 659, 681-682, 686; [2013] HCA 7. 40 Assistant Commissioner Condon v Pompano Pty Ltd (2013) 87 ALJR 458 at 477 [67]; 295 ALR 638 at 659. "The unique and essential function of the judicial power is the quelling of … controversies [including those between the executive and the individual as to life or liberty] by ascertainment of the facts, by application of the law and by exercise, where appropriate, of judicial discretion."41 The exercise of the judicial power "involves the application of the relevant law to facts as found in proceedings conducted in accordance with the judicial process", which "requires that the parties be given an opportunity to present their evidence and [at least ordinarily] to challenge the evidence led against them"42. Those standard non-exhaustive descriptions of the nature of judicial power and the incidents of its exercise apply to the determination of criminal punishment no less than to the determination of criminal guilt. The facts relevant to each are limited to those facts permitted by law to be taken into account by a court. Subject to the requirement of s 80 of the Constitution that a trial on indictment must be by jury, the function of ascertaining those facts is exclusively judicial. That means, amongst other things, that in the ascertainment of the facts relevant to criminal punishment, no less than in the ascertainment of the facts relevant to criminal guilt, the parties must be given an opportunity to present, and at least ordinarily to challenge, evidence of facts in dispute43. Chapter III of the Constitution therefore reflects and protects a relationship between the individual and the state which treats the deprivation of the individual's life or liberty, consequent on a determination of criminal guilt, as capable of occurring only as a result of adjudication by a court. That adjudication quells a controversy, to which the individual and the state are parties, as to the legal consequences of the operation of the law on the past conduct of the individual. The adjudication quells that controversy by the application of the relevant law and, where appropriate, of judicial discretion to facts ascertained in accordance with the degree of fairness and transparency that is required by adherence to judicial process. That understanding of the nature and incidents of the determination and punishment of criminal guilt underlies the reasons which have generally been given in Australia for treating executive decisions made in the prosecutorial process as ordinarily insusceptible of judicial review, an insusceptibility recently 41 Fencott v Muller (1983) 152 CLR 570 at 608; [1983] HCA 12. 42 Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at 359 [56]; [1999] HCA 9. Cf Assistant Commissioner Condon v Pompano Pty Ltd (2013) 87 ALJR 458 at 500 [196]; 295 ALR 638 at 690-691. 43 Eg R v Olbrich (1999) 199 CLR 270 at 280-281 [24]-[27]; [1999] HCA 54; Cheung v The Queen (2001) 209 CLR 1 at 12-13 [14]; [2001] HCA 67. described as having "a constitutional dimension"44. Thus, "[i]t has generally been considered to be undesirable that the court, whose ultimate function it is to determine the accused's guilt or innocence, should become too closely involved in the question whether a prosecution should be commenced"45. The same general perception of undesirability of close curial involvement in prosecutorial processes has applied to a question about whether a particular charge is to be laid, as well as to a question about whether a particular charge, having been laid, is to be proceeded with46. The main reason generally given is that the court's review of such an exercise of prosecutorial discretion would compromise the impartiality of the judicial process by involving a court in an inquiry into a forensic choice made by a participant in a controversy actually or potentially before the court47. A complementary reason often given is that a court's control over its own hearing and determination of whatever charge might in fact be laid and proceeded with in the exercise of prosecutorial discretion means that "the court has other powers to ensure that a person charged with a crime is fairly dealt with"48. There is, as the Solicitor-General of the Commonwealth properly points out, nothing unusual about prosecutorial discretion, as to the choice of charge or as to the mode of trial, affecting the maximum penalty which a court might impose on an individual as a result of a determination of criminal guilt. He also properly points out that there is nothing unusual about criminal laws enacted by a single legislature laying down a "base level" offence, the elements of which are then wholly subsumed within the elements of another, "aggravated" offence in the sense that conduct constituting the aggravated offence is conduct which also constitutes the base level offence. But the problem encountered in the present case simply does not arise where, as is usual, the penalty for the aggravated offence remains within the discretion of the court. The punishment to be imposed as a result of a determination of criminal guilt remains in such a case for the determination of the court. The imposition of that punishment still involves in such a case only 44 Elias v The Queen (2013) 87 ALJR 895 at 904 [33]; 298 ALR 637 at 647; [2013] HCA 31. 45 Barton v The Queen (1980) 147 CLR 75 at 94-95; [1980] HCA 48. 46 Maxwell v The Queen (1996) 184 CLR 501 at 534; [1996] HCA 46. 47 Maxwell v The Queen (1996) 184 CLR 501 at 534; Likiardopoulos v The Queen (2012) 86 ALJR 1168 at 1171 [2], 1177 [37]; 291 ALR 1 at 3, 11; [2012] HCA 37. 48 Barton v The Queen (1980) 147 CLR 75 at 95. See also Elias v The Queen (2013) 87 ALJR 895 at 904 [35]; 298 ALR 637 at 647-648. the application of the applicable law, and judicial discretion, only to facts ascertained by the court in accordance with the judicial process. With the exception of the legislation upheld in Fraser Henleins, the Solicitor-General of the Commonwealth points to no Commonwealth legislation in which an aggravated offence, wholly subsuming a base level offence, has carried a mandatory minimum penalty. Consideration of the legislation in issue in that case highlights the potential for undermining the separation of the judicial power of the Commonwealth which unqualified acceptance of such a legislative model would entail. The legislation in issue in Fraser Henleins was the Black Marketing Act 1942 (Cth), the duration of which was limited to the then current war. The Black Marketing Act defined "black marketing" to mean, amongst other things, conduct proscribed by regulations made under the National Security Act 1939 (Cth). Contravention of those regulations was already a criminal offence under the National Security Act carrying a maximum but not a minimum penalty. The Black Marketing Act provided: that any person who engaged in conduct which constituted black marketing as so defined was guilty of the offence of black marketing; that the offence of black marketing was able to be prosecuted summarily or on indictment; that the punishment for black marketing was to carry maximum and minimum penalties; and that the offence of black marketing was not to be prosecuted without the written consent of the Attorney-General after both a report from the Minister administering the regulations, and advice from a Committee appointed by the Attorney-General consisting of a representative from each of three specified Commonwealth Departments. Fraser Henleins was constituted as an application in the original jurisdiction of the High Court to review and quash convictions for offences of black marketing which had resulted from prosecutions on indictment. The grounds of the application included invalidity of the power conferred on the Attorney-General to consent to the prosecution of an offence under the Black Marketing Act carrying the mandatory minimum penalty, in light of the identical offence under the National Security Act carrying only a maximum penalty. The validity of that power of the Attorney-General had some months earlier been upheld by majority in the Full Court of the Supreme Court of New South Wales in Ex parte Coorey49. The practical operation of the conferral of 49 (1944) 45 SR (NSW) 287. that power had there been described by Davidson J, with whom Nicholas CJ in Eq formed the majority. Davidson J said50: "The peculiarity of the Black Marketing Act is that it merely attaches another name and exceedingly high minimum penalties to offences already created under the National Security Act … Then under … the Black Marketing Act, the Attorney-General is vested with the power of deciding upon facts and advice, which cannot be checked by cross-examination or by hearing the accused person, that the latter shall be exposed to the risk of much more serious punishment than is provided by the regulations made under the other Act which creates the offence that has been committed. The result is that, if on the evidence before the Court it is found that only a technical breach of the regulations has been committed, or there is no real criminality or moral turpitude, the minimum penalty provided by the Act must be imposed, although considered by the Court to be entirely unsuitable." He explained51: "The gross injustice of such a procedure has already been exemplified in another proceeding which recently came before this Court ... There, possibly because other information was placed before the Committee and the Attorney-General than that which was submitted as evidence before the Court and which was, the punishment inflicted was outrageously disproportionate to the offence of which the accused was found guilty." therefore, presumably inaccurate, "No doubt the Legislature realized the extreme danger of persons being subjected to ignominious and serious punishment which the circumstances disclosed by the evidence might not warrant, and therefore endeavoured, by the advice of a preliminary secret investigation, to render the risk of such a result less likely. But in reality what has happened is that a member of the Executive has been furnished with the power to say with regard to offences, the punishment of which has already been provided for and vested in the Judiciary, that the latter shall no longer exercise their discretion in that respect, but in some instances, if there is a conviction, 50 (1944) 45 SR (NSW) 287 at 313-314. 51 (1944) 45 SR (NSW) 287 at 314, referring to Ex parte Gerard & Co Pty Ltd; Re Craig (1944) 44 SR (NSW) 370. 52 (1944) 45 SR (NSW) 287 at 314. shall award not less than the minimum penalty although that penalty may be considered, having regard to the facts, to be oppressive." Notwithstanding that "reality" of an executive officer having power to say, on "the advice of a preliminary secret investigation" and by reference to information other than that to be placed before a court, that a minimum penalty was to be imposed in the event of conviction in a particular case, Davidson J held that the Commonwealth Parliament had "vested in the Attorney-General a power which [was] not judicial" because "although it [had] the effect of limiting in some degree the discretion of the Court in imposing penalties, that limitation only [operated] in the future upon a contingency of a conviction by the Court"53. The reasoning of Nicholas CJ in Eq was to similar effect54. Jordan CJ dissented. He said55: "The [Black Marketing] Act does not delegate to the Attorney-General the power to alter, by a legislative act operating generally, the penalties attached to certain offences. It leaves the existing penalties generally operative, but it purports to authorise him, in particular cases chosen by him, to dictate to a Court of Justice that at least a certain penalty shall be imposed in the event of conviction, no such minimum being generally operative." After reiterating the bedrock constitutional principle that convictions for offences and the imposition of penalties and punishments pertain exclusively to the judicial power, Jordan CJ continued56: "In my opinion, as regards all acts which are offences independently of the Black Marketing Act, that Act purports to invest a person who is not a competent Court with part of the judicial power of the Commonwealth, in that it purports to enable him at his discretion to dictate the penalty in particular cases. If a Commonwealth statute provided that, if the Attorney-General when prosecuting a person for particular classes of offence inserted a specified word in the information or indictment, the Court in the event of a conviction should hold its hand, report the fact to him, and then impose such sentence as he might direct, the provision would be obviously bad. In my opinion, the fact that the penalty is 53 (1944) 45 SR (NSW) 287 at 314. 54 (1944) 45 SR (NSW) 287 at 319-320. 55 (1944) 45 SR (NSW) 287 at 300. 56 (1944) 45 SR (NSW) 287 at 300. dictated in advance of the trial does not make the encroachment on the judicial power of the Commonwealth any the less real." The argument for invalidity put to the High Court in Fraser Henleins relied on that dissenting judgment of Jordan CJ in Ex parte Coorey. It was put that "[r]egard must be had to the substance and not to the form" of the Black Marketing Act57. All five members of the High Court who sat in Fraser Henleins rejected the argument. Latham CJ noted that it had "never been suggested that the sphere of judicial power is invaded when Parliament provides for a maximum or minimum penalty for offences which are duly proved in courts of law"58. He could see no judicial power being exercised by the Attorney-General or the "[I]n all cases of public prosecutions, there must first be a decision by some public authority whether to prosecute or not to prosecute. The risk of infliction of a penalty depends upon the decision of a non-judicial authority or person as to whether any prosecution at all should be instituted. But such a decision is in no respect an exercise of judicial power." Latham CJ said of the decision of the Attorney-General to present the indictment "It is not a judicial decision because it makes no adjudication upon rights or duties or liabilities, or, indeed, upon anything. It imposes no penalties, though it does expose a person to the possibility of a particular penalty." Latham CJ went on specifically to adopt the reasoning of the majority in Ex parte Coorey61. Starke J similarly said that the requirement for the consent of the Attorney-General "confers no judicial power upon anyone; it neither declares nor enforces any rights or liabilities"62, and stated his agreement with the conclusion 57 (1945) 70 CLR 100 at 107. 58 (1945) 70 CLR 100 at 119. 59 (1945) 70 CLR 100 at 119-120. 60 (1945) 70 CLR 100 at 120. 61 (1945) 70 CLR 100 at 120. 62 (1945) 70 CLR 100 at 121. of the majority in Ex parte Coorey63. Dixon J considered it enough to adopt without elaboration the reasoning of the majority in Ex parte Coorey64. McTiernan J merely adopted the conclusion of the majority in Ex parte Coorey65. Williams J said that the determination whether the accused was to be charged under the Black Marketing Act or under the National Security Act was "a purely administrative function" and that the Commonwealth Parliament was "entitled to make the punishment of an offence upon conviction what it likes, and to make it differ according to the alternative sections of an Act or Acts under which the charge is laid"66. The argument now made on behalf of Mr Magaming that Fraser Henleins should be reopened is compelling. The Solicitor-General of the Commonwealth makes no submission that Fraser Henleins has been relied on in the framing of subsequent Commonwealth legislation. Although unanimous, Fraser Henleins did not rest on a principle worked out in a prior succession of cases67. With one exception, it has received at most passing reference in subsequent decisions of the High Court. The exception is Palling v Corfield68. There the reasoning of Latham CJ in Fraser Henleins was relied on in upholding a provision of the National Service Act 1951-1968 (Cth), which applied on conviction of an offence of failing to attend a medical examination upon being served with a notice under that Act. The provision enabled the prosecution to request that the court ask the offender to enter into a recognisance to attend and submit to a medical examination upon being served with any subsequent notice. The provision went on to require the court, if the offender refused, to sentence the offender to imprisonment in respect of the offence for a period of seven days whether or not any fine was imposed in respect of the offence. The offender was to be released from that imprisonment immediately if he chose to submit to an examination. Palling v Corfield did not involve a reconsideration of Fraser Henleins and itself stands for no wider principle than that "[i]f the satisfaction of a condition enlivening the court's statutory duty depends upon a decision made by a member of the Executive 63 (1945) 70 CLR 100 at 122. 64 (1945) 70 CLR 100 at 124-125. 65 (1945) 70 CLR 100 at 132. 66 (1945) 70 CLR 100 at 139. 67 Cf Wurridjal v The Commonwealth (2009) 237 CLR 309 at 351-352 [68]; [2009] HCA 2. 68 (1970) 123 CLR 52; [1970] HCA 53. branch of government, it does not necessarily follow that the Parliament has thereby authorised the Executive to infringe impermissibly upon the judicial power"69. The decision made by a member of the executive branch of government in Palling v Corfield was of a peculiar nature. It enlivened a statutory duty on the part of a court, in effect, to present the offender with a choice. It did not enliven a statutory duty on the part of the court to impose a mandatory minimum sentence of imprisonment. The reasoning in Fraser Henleins elevates form over substance. The reasoning is in that respect out of step with the modern purposive understanding of Ch III of the Constitution. More significantly, the outcome in Fraser Henleins undermines the protections afforded by Ch III's separation of judicial power to such an extent that maintenance of Fraser Henleins as an authority, in my opinion, "is injurious to the public interest"70. To accept Fraser Henleins is to accept, in the language of Davidson J already quoted, that the Commonwealth Parliament can enact a law which operates in practice to empower an executive officer to determine that a minimum penalty is to be imposed in the event of conviction in a particular case, and to do so on the advice of a preliminary secret investigation and by reference to information never to be placed before a court. It is to accept that the Commonwealth Parliament can use such a legislative model formally to invoke but substantially to by-pass the structural requirement of Ch III that punishment of crime occur only as a result of adjudication by a court. It is to accept that the length of deprivation of liberty to be imposed as a punishment for criminal conduct can in practice be the result of an executive determination made on information which can remain hidden not only from the individual and the public but from the court whose formal duty it is to impose the minimum penalty in the event of conviction. Reopening Fraser Henleins, I would overrule it and adopt the analysis in the dissenting judgment of Jordan CJ in Ex parte Coorey. Applicable principle Delivering judgment in the Privy Council in an appeal from Jamaica in 1975, Lord Diplock saw it as useful to consider "how the power to determine the length and character of a sentence which imposes restrictions on the personal 69 International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319 at 352 [49]; [2009] HCA 49. 70 Perpetual Executors and Trustees Association of Australia Ltd v Federal Commissioner of Taxation (1949) 77 CLR 493 at 496; [1949] HCA 4, quoting The Tramways Case [No 1] (1914) 18 CLR 54 at 69; [1914] HCA 15. liberty of the offender is distributed" in accordance with what he described as "the basis principle of separation of legislative, executive and judicial powers that is implicit in a constitution on the Westminster model"71. In relation to the exercise of legislative power, he explained72: "Parliament may, if it thinks fit, prescribe a fixed punishment to be inflicted upon all offenders found guilty of the defined offence – as, for example, capital punishment for the crime of murder. Or it may prescribe a range of punishments up to a maximum in severity, either with or, as is more common, without a minimum, leaving it to the court by which the individual is tried to determine what punishment falling within the range prescribed by Parliament is appropriate in the particular circumstances of his case." "What Parliament cannot do, consistently with the separation of powers, is to transfer from the judiciary to any executive body … a discretion to determine the severity of the punishment to be inflicted upon an individual member of a class of offenders." Lord Diplock went on to acknowledge that the principle so formulated accorded with that earlier articulated by O'Dalaigh CJ in the Supreme Court of Ireland when he said74: "There is a clear distinction between the prescription of a fixed penalty and the selection of a penalty for a particular case. The prescription of a fixed penalty is the statement of a general rule, which is one of the characteristics of legislation; this is wholly different from the selection of a penalty to be imposed in a particular case. … The Legislature does not prescribe the penalty to be imposed in an individual citizen's case; it states the general rule, and the application of that rule is for the Courts. … [T]he selection of punishment is an integral part of the administration of justice and, as such, cannot be committed to the hands of the Executive". 71 Hinds v The Queen [1977] AC 195 at 225. 72 [1977] AC 195 at 226. 73 [1977] AC 195 at 226. 74 Deaton v The Attorney General and the Revenue Commissioners [1963] IR 170 at The principle was applied by the Privy Council in an appeal from Mauritius in 1992 to hold invalid a sentencing law applicable to an offender convicted of an offence of importation of dangerous drugs as a drug trafficker in Ali v The Queen75. The law held to be invalid provided that the offender was liable to a maximum penalty of a fine and imprisonment if prosecuted in a lower court, but was required to be sentenced to death if prosecuted in the Supreme Court. In a judgment delivered by Lord Keith of Kinkel, the Privy Council noted that there was ordinarily no constitutional objection to a prosecutor having a choice to charge a person with a more serious offence rather than a less serious offence and that, similarly, there was ordinarily no constitutional objection to a prosecutor having a choice as to the court before which the person was to be tried76. Lord Keith explained77: "If in Mauritius importation of dangerous drugs by one found to be trafficking carried in all cases the mandatory death penalty and importation on its own a lesser penalty, the Director of Public Prosecution's discretion to charge importation either with or without an allegation of trafficking would be entirely valid. The vice of the present case is that the Director's discretion to prosecute importation with an allegation of trafficking either in a court which must impose the death penalty on conviction with the requisite finding or in a court which can only impose a fine and imprisonment enables him in substance to select the penalty to be imposed in a particular case." The limitation on legislative power as articulated by Lord Diplock and by O'Dalaigh CJ, and as illustrated by Ali, should equally be recognised as a limitation on the legislative power of the Commonwealth Parliament arising from the separation of the judicial power of the Commonwealth by Ch III of the Constitution. It is the very limitation which Jordan CJ sought to invoke in Ex parte Coorey. The limitation should not be thought to be capable of being transgressed only by legislative designs as egregious as those considered in Ali and Ex parte Coorey. The limitation will be transgressed by a Commonwealth law which purports to confer on an executive officer what is in substance a power to determine the punishment to be imposed by a court in the event of conviction of an offender in a particular case. Absent some ameliorating factor in the legislative scheme of which it might form part, a Commonwealth law will be likely to have that substantive effect if it allows an executive officer to prosecute 76 [1992] 2 AC 93 at 103-104. 77 [1992] 2 AC 93 at 104. some offenders within a class of offenders for an offence which carries a mandatory minimum penalty but to prosecute other offenders within that class for another offence which does not carry a mandatory minimum penalty or which carries a lesser mandatory minimum penalty. In the language of Jordan CJ in Ex parte Coorey, already quoted, the legislative conferral of such a power on an executive officer is an "encroachment on the judicial power". In the almost identical language which has more recently been used in the context of Ch III of the Constitution to connote "[l]egislation that removes from the courts their exclusive function 'of the ajudgment and punishment of criminal guilt under a law of the Commonwealth'", it is a "usurpation of judicial power"78. Invalidity of s 236B(3)(c) and (4)(b) of the Act Because the ultimate question of usurpation of judicial power is one of substance, it is unnecessary to resolve a question debated in argument as to the construction of s 233A of the Act. That question is whether the singular in s 233A is to be read as including the plural, with the result that the smuggling of a group of five or more non-citizens could be charged as a single offence against s 233A. For present purposes, it is sufficient to recognise that the elements of the aggravated offence of people smuggling created by s 233C wholly encompass the elements of the offence of people smuggling created by s 233A in that the only element of aggravation which s 233C adds to s 233A lies in the smuggling being of a group of five or more non-citizens. The class of persons who commit the aggravated offence created by s 233C is therefore a class of persons who also necessarily commit at least one count of the offence created by s 233A. The constitutional vice of s 236B(3)(c) and (4)(b) of the Act lies in their effect on the character of the discretion necessarily exercised by the CDPP in deciding to prosecute a person within that class for the aggravated offence created by s 233C instead of one or more counts of the offence created by s 233A. That effect is to empower the CDPP in effect to determine the minimum penalty to be imposed on the conviction of any individual within the class. If the CDPP decides to prosecute the individual for the aggravated offence created by s 233C, the individual must on conviction receive at least the minimum term of imprisonment required by s 236B(3)(c) and the minimum non-parole period required by s 236B(4)(b). If the CDPP decides instead to prosecute the individual for one or more counts of the offence created by s 233A, the minimum term and minimum non-parole period have no application. 78 Eg Nicholas v The Queen (1998) 193 CLR 173 at 220 [112]. Counsel for Mr Magaming illustrate that constitutional vice by calling attention to the practical consequences of a written direction given to the CDPP the Attorney-General on 27 August 2012 ("the Direction")79, after Mr Magaming had been convicted and sentenced. The Direction is not suggested by anyone to be beyond the power of the Attorney-General, conferred by s 8(1) of the CDPP Act, to give or furnish written directions or guidelines to the CDPP. The Direction recognises the reality that any member of the crew of a vessel bringing five or more unlawful non-citizens to Australia could fall within the class of persons who might be prosecuted for and convicted of the offences created by both s 233C and s 233A by reason of the conduct of his or her shipboard activities as a crew member. The Direction directs the CDPP not to prosecute the aggravated offence created by s 233C of the Act against a person who was a member of the crew on a vessel involved in the bringing or coming, or entry or proposed entry, of unlawful non-citizens to Australia unless the CDPP is "satisfied" of one or more specified circumstances. One such circumstance is that "the person's role in the people smuggling venture extended beyond that of a crew member". Another is that "a death occurred in relation to the people smuggling venture". The Direction goes on to direct that where it prevents the CDPP prosecuting a person for the aggravated offence created by s 233C of the Act, the CDPP must consider prosecuting the person for the offence created by s 233A of the Act in accordance with the "Prosecution Policy of the Commonwealth" ("the Prosecution Policy"). The relevant effect of the Prosecution Policy is that "[i]n the ordinary course the charge or charges laid or proceeded with" by the CDPP "will be the most serious disclosed by the evidence"80. Where the admissible evidence available to be placed before a court is sufficient to establish that an individual has engaged in smuggling a group of five or more non-citizens, the CDPP's decision to prosecute the individual for the aggravated offence created by s 233C is therefore ordinarily to turn on the CDPP's satisfaction of the existence of one or more of the circumstances specified in the Direction. Absent satisfaction of the existence of one or more specified circumstances, the CDPP is instead ordinarily to prosecute the individual for the offence created by s 233A. The circumstances specified in the Direction are not found in s 233C of the Act, or elsewhere in statute. Their consideration requires the CDPP to form 79 "Director of Public Prosecutions – Attorney-General's Direction 2012", Commonwealth of Australia Gazette, GN 35, 5 September 2012 at 2318-2319. 80 Prosecution Policy at 10 [2.20]. and act on his own assessment about the seriousness of the offender's conduct. Whether or not the CDPP's satisfaction might be susceptible of judicial review, the decision-making processes able to be adopted by the CDPP do not attract the constitutionally entrenched requirements of fairness and transparency applicable to decision-making by a court. The satisfaction of the CDPP need not be based on admissible evidence available to be placed before a court. Once satisfied of a specified circumstance, the CDPP need not prove that circumstance in the ensuing prosecution, either to obtain a conviction or to obtain the mandatory minimum penalty on conviction. The CDPP might, for example, decide to prosecute a crew member for the aggravated offence created by s 233C instead of the offence created by s 233A on being satisfied that his or her role in what the CDPP considered amounted to a "people smuggling venture" extended beyond that of a crew member. But conviction for the aggravated offence created by s 233C would result whether or not the CDPP proved to the court that the crew member had that extended role and imposition of the mandatory minimum penalty required by s 236B(3)(c) and (4)(b) would necessarily follow. Conclusion I would allow the appeal, set aside the decision of the Court of Criminal Appeal of the Supreme Court of New South Wales and make orders remitting the matter to that Court for Mr Magaming to be re-sentenced for the aggravated offence of people smuggling to which he pleaded guilty on the basis that no mandatory minimum penalty validly attaches to that offence. 100 KEANE J. I agree with French CJ, Hayne, Crennan, Kiefel and Bell JJ that the appeal should be dismissed. I agree with the reasons given by their Honours; and I would add only the following brief observations in relation to one aspect of the appellant's argument that s 236B(3)(c) of the Act, in its application to a person convicted of an offence against s 233C of the Act, is beyond the competence of the Commonwealth Parliament. The appellant submitted that the sentence enacted by s 236B(3)(c), in its application to a "minor" offender such as the appellant, is manifestly disproportionate to the circumstances of the offence committed by him and his personal moral culpability. On that footing, it was argued that the mandate in s 236B(3)(c) for the imposition of that sentence is inconsistent with the integrity of the judiciary required by Ch III of the Constitution. My concern is with the appellant's reliance on decisions of this Court which discuss proportionality in sentencing as authority to support that aspect of his argument. In this regard, the appellant cited Veen v The Queen [No 2] 81, Wong v The Queen82, Muldrock v The Queen83 and Markarian v The Queen84. the appellant's argument. The discussion of proportionality in sentencing in the decisions cited The discussion of affords no support for proportionality in sentencing in those cases proceeds by reference to legislated yardsticks. Each yardstick fixed by the legislature provides a necessary datum point from which the discussion of proportionality in sentencing may proceed. As was said in Markarian v The Queen85 by Gleeson CJ, Gummow, Hayne and Callinan JJ: "Judges need sentencing yardsticks." The provision of those yardsticks is the province of the Parliament. None of the decisions cited by the appellant offers any support for the notion that it is any part of the judicial function to ensure that the yardsticks legislated for various kinds of misconduct are "appropriately" calibrated to some assumed range of moral culpability in offenders. The work of the legislature in laying down norms of conduct and attaching sanctions to breaches of those 81 (1988) 164 CLR 465 at 472, 486, 490-491; [1988] HCA 14. 82 (2001) 207 CLR 584 at 609-610 [71], 612-613 [77]-[78]; [2001] HCA 64. 83 (2011) 244 CLR 120 at 140-141 [60]; [2011] HCA 39. 84 (2005) 228 CLR 357 at 372 [31], 379-380 [55]-[56], 383-384 [65], 385-386 [69]; [2005] HCA 25. 85 (2005) 228 CLR 357 at 372 [30]. norms is anterior to the function of the judiciary. As was said in the Supreme Court of Canada in R v McDonnell86: "[I]t is not for judges to create criminal offences, but rather for the legislature to enact such offences." The enactment of sentences by the legislature, whether as maxima or minima, involves the resolution of broad issues of policy by the exercise of legislative power. A sentence enacted by the legislature reflects policy-driven assessments of the desirability of the ends pursued by the legislation, and of the means by which those ends might be achieved. It is distinctly the province of the legislature to gauge the seriousness of what is seen as an undesirable activity affecting the peace, order and good government of the Commonwealth and the soundness of a view that condign punishment is called for to suppress that activity, and to determine whether a level of punishment should be enacted as a ceiling or a floor. In laying down the norms of conduct which give effect to those assessments, the legislature may decide that an offence is so serious that consideration of the particular circumstances of the offence and the personal circumstances of the offender should not mitigate the minimum punishment thought to be appropriate to achieve the legislature's objectives, whatever they may be. It is ironic that the appellant should invoke the separation of powers effected by Ch III of the Constitution87 because, in truth, the institutional integrity of the judiciary would be compromised by accepting the argument that the validity of s 236B(3)(c) of the Act is conditional upon acceptance by a sentencing judge that the sentence enacted by the legislature is no more than is appropriate to that judge's opinion of the culpability of the person convicted of the offence. In summary, to argue that s 236B(3)(c) was an unnecessarily harsh way to pursue the end of deterring those minded to engage in the activity proscribed by s 233C is to make a point about the political wisdom of the law. Whether there is merit in that point is a matter for political judgment; but it has nothing to do with whether, as a matter of constitutional law, s 236B(3)(c) is inconsistent with the institutional integrity of a court obliged to enforce that law. 86 [1997] 1 SCR 948 at 974 [33]. 87 R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254; [1956] HCA 10; Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 543 [13], 555 [52], 574-575 [110]-[111]; [1999] HCA 27.

HIGH COURT OF AUSTRALIA PLAINTIFF M47/2012 PLAINTIFF AND DIRECTOR GENERAL OF SECURITY & ORS DEFENDANTS Plaintiff M47/2012 v Director General of Security [2012] HCA 46 5 October 2012 ORDER Question 2A of the Further Amended Special Case dated 20 June 2012 should be amended and the questions stated in the Special Case (as so amended) should be answered as follows: Question 1 In furnishing the 2012 assessment, did the First Defendant fail to comply with the requirements of procedural fairness? Answer Question 2 Does s 198 of the Migration Act 1958 (Cth) authorise the removal of the Plaintiff, being a non-citizen: to whom Australia owes protection obligations under the Refugees Convention as amended by the Refugees Protocol; and 2.2 whom ASIO has assessed poses a direct or indirect risk to security; to a country where he does not have a well-founded fear of persecution for the purposes of Article 1A of the Refugees Convention as amended by the Refugees Protocol? Answer It is not necessary to answer this question. Question 2A If the plaintiff's application for a protection visa is refused by reason of the plaintiff's failure to satisfy public interest criterion 4002 within the meaning of clause 866.225 of Schedule 2 of the Migration Regulations 1994, is that clause to that extent ultra vires the power conferred by section 31(3) of the Migration Act 1958 (Cth) and invalid? Answer The prescription of public interest criterion 4002 as a criterion for the grant of a protection visa is beyond the power conferred by s 31(3) of the Act and is invalid. Question 3 Do ss 189 and 196 of the Migration Act 1958 (Cth) authorise the Plaintiff's detention? Answer The plaintiff is validly detained for the purposes of the determination of his application for a protection visa. Question 4 Who should pay the costs of the special case? Answer The defendants. Representation R M Niall SC with C L Lenehan, K L Walker and M P Costello for the plaintiff (instructed by Allens Lawyers) S P Donaghue SC with C J Horan, F I Gordon and N M Wood for the defendants (instructed by Australian Government Solicitor) Interveners J G Renwick SC with K M Richardson intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor (NSW)) J K Kirk SC with S J Free and A E Munro intervening on behalf of Plaintiff S138/2012 (instructed by King & Wood Mallesons) D S Mortimer SC with A D Pound and K E Foley intervening on behalf of the Australian Human Rights Commission (instructed by Australian Human Rights Commission) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Plaintiff M47/2012 v Director General of Security Citizenship and migration – Migration – Refugees – Protection visas – Inconsistency between Migration Act 1958 (Cth) and Migration Regulations 1994 (Cth) – Plaintiff found to be a refugee but refused protection visa due to adverse security assessment by Australian Security Intelligence Organisation – Clause 866.225(a) of Sched 2 to Regulations prescribes public interest criterion 4002 as criterion for grant of protection visa – Public interest criterion 4002 requires that applicant not be assessed by Australian Security Intelligence Organisation to be risk to security – Whether prescription of public interest criterion 4002 as criterion for grant of protection visa beyond power conferred by s 31(3) of Act. Administrative law – Procedural fairness – ASIO interviewed plaintiff – ASIO issued adverse security assessment in relation to plaintiff – Plaintiff therefore did not meet requirements for protection visa – Whether ASIO denied plaintiff procedural fairness. Citizenship and migration – Mandatory detention – Plaintiff held in detention as unlawful non-citizen – No third country currently available to receive plaintiff – Whether ss 189 and 196 of Act authorise plaintiff's detention. Words and phrases – "character test", "decision ... relying on one or more of the following Articles of the Refugees Convention, namely, Article 1F, 32 or 33(2)", "inconsistent", "protection obligations", "security". Australian Security Intelligence Organisation Act 1979 (Cth), ss 4, 37. Migration Act 1958 (Cth), ss 31(3), 36(2), 65, 189, 196, 500, 501, 504(1). Migration Regulations 1994 (Cth), Sched 2, cl 866.225(a), Sched 4, item 4002. Introduction This case concerns a regulation made under the Migration Act 1958 (Cth) ("the Migration Act"). The regulation requires that the Minister for Immigration and Citizenship ("the Minister") refuse to grant a refugee a protection visa if the Australian Security Intelligence Organisation ("ASIO") assesses the refugee to be directly or indirectly a risk to security. The merits of such an assessment cannot be challenged. The plaintiff, who applied for a protection visa, was refused a visa pursuant to the regulation. He challenges the validity of the regulation, the fairness of the assessment process, and the lawfulness of his continuing detention under the Migration Act. The Minister is given power under the Migration Act to refuse to grant a refugee a visa on grounds related to security which are recognised by the Convention relating to the Status of Refugees (1951) as amended by the Protocol relating to the Status of Refugees (1967) ("the Convention"). In such a case the Minister's decision can be reviewed on its merits unless, in the national interest, the Minister issues a certificate declaring the refugee to be an excluded person. In that event the Minister has to exercise the power personally and lay the certificate before the Houses of Parliament. Critical to the disposition of this case is the question whether the regulation, which effectively vests in ASIO the power to refuse a visa on security grounds, is consistent with the scheme of the Migration Act, including the responsibility it imposes on the Minister and the Minister's officers, the system of it establishes and the personal responsibility and merits review which accountability of the Minister for decisions precluding review. As appears from the following reasons, the answer to that question is no. The regulation is invalid. The plaintiff is entitled to have his application for a protection visa considered according to law. In the meantime he can lawfully be detained pursuant to s 196 of the Migration Act. Factual and procedural background At about 11.10pm on 29 December 2009 the plaintiff, a national of Sri Lanka, entered the Australian territory of Christmas Island on a special purpose visa. The visa expired at midnight. It has not been renewed nor has any other visa been granted. Since midnight on 29 December 2009, therefore, the plaintiff has been an unlawful non-citizen within the meaning of s 14 of the Migration Act and has been held in immigration detention pursuant to ss 189 and 196 of that Act. The plaintiff applied for a protection visa under s 36 of the Migration Act. A delegate of the Minister concluded that the plaintiff had a well-founded fear of persecution on the basis of his race and political opinion if he were to be returned to Sri Lanka. As a former member of the Liberation Tigers of Tamil Eelam ("LTTE") he was at risk of being targeted by the Sri Lankan Government and/or paramilitary groups in Sri Lanka. As a person who had refused to rejoin the LTTE he was at risk of persecution from Tamil separatist groups. The delegate also found, and it is common ground in these proceedings, that should the plaintiff be returned to Sri Lanka there is a real chance that he would be subject to abduction, torture or death. The plaintiff was therefore a refugee within the meaning of the Convention. On 18 February 2011, in spite of finding the plaintiff to be a refugee, the delegate refused the application for the grant of a protection visa. The reason for that refusal was that on 11 December 2009, ASIO had issued to the Department of Immigration and Citizenship ("the Department") an assessment of the plaintiff under s 37 of the Australian Security Intelligence Organisation Act 1979 (Cth) ("the ASIO Act"). The assessment stated that: "ASIO assesses [the plaintiff] ... from the Oceanic Viking caseload to be directly or indirectly a risk to security, within the meaning of section 4 of the Australian Security Intelligence Organisation Act 1979." Because of that assessment the plaintiff did not meet public interest criterion 4002 set out in the Migration Regulations 1994 ("the Regulations") for the grant of a protection visa. That criterion requires that an applicant for a protection visa is not assessed by ASIO to be directly or indirectly a risk to security. The Refugee Review Tribunal ("the RRT"), unable to look behind the security assessment1, affirmed the delegate's decision not to grant the plaintiff a protection visa. The plaintiff was interviewed by officers of ASIO on or about 4 November 2011 so that they could make a new security assessment. That interview was audio recorded and a transcript of it was before the Court. On or about 9 May 2012, ASIO furnished the Department with a new security assessment ("the 2012 assessment") that the plaintiff was directly or indirectly a risk to security within the meaning of s 4 of the ASIO Act. The 2012 assessment superseded the assessment made in 2009. As a result of the 2012 assessment the plaintiff continues to be unable to satisfy public interest criterion 4002. The Australian Government does not intend to remove the plaintiff to Sri Lanka. There is presently no other country to which he can be sent. Steps taken by the Minister and by the Federal Government to find a country to which the plaintiff can be removed pursuant to s 198 of the Migration Act have been 1 ASIO Act, s 36(b) read with definition of "prescribed administrative action" in unsuccessful. On the basis of what appears in the Special Case it is unlikely that a country will be found willing to accept the plaintiff within the foreseeable future. The plaintiff says that the public interest criterion which led to the refusal of his application for a protection visa is invalid. He contends that it is inconsistent with the provisions of the Act which in effect cover the refusal of protection visas on the basis of national security concerns and which provide for a process of review by the Administrative Appeals Tribunal ("the AAT"). The plaintiff says also that he was denied procedural fairness by ASIO in connection with the 2012 assessment. He argues that his detention under s 196 of the Migration Act is unlawful because, absent any prospect of his removal to another country, it does not serve any legitimate purpose under that Act. The plaintiff has filed an application in this Court seeking, among other relief, an order absolute for a writ of habeas corpus against the officer in charge of the Melbourne Immigration Transit Accommodation where he is presently held, and the Secretary of the Department. On 6 June 2012, Hayne J directed that a Special Case filed by the parties be set down for hearing by a Full Court on 18 June 2012 and reserved four questions for the Court. A fifth question was added, by leave, at the hearing. Questions reserved in the Special Case The questions reserved for the Full Court in the Special Case were: In furnishing the 2012 assessment, did the First Defendant fail to comply with the requirements of procedural fairness? Does s 198 of the Migration Act 1958 (Cth) authorise the removal of the Plaintiff, being a non-citizen: to whom Australia owes protection obligations under the Refugees Convention as amended by the Refugees Protocol; and 2.2 whom ASIO has assessed poses a direct or indirect risk to security; to a country where he does not have a well-founded fear of persecution for the purposes of Article 1A of the Refugees Convention as amended by the Refugees Protocol? If the answer to question 2 is 'Yes' by reason of the plaintiff's failure to satisfy public interest criterion 4002 within the meaning of clause 866.225 of Schedule 2 of the Migration Regulations 1994, is that clause to that extent ultra vires the power conferred by section 31(3) of the Migration Act 1958 (Cth) and invalid.[2] Do ss 189 and 196 of the Migration Act 1958 (Cth) authorise the Plaintiff's detention? 4. Who should pay the costs of the special case?" Australia's obligations under the Convention In any dispute about the application of an Australian law which gives effect to an international Convention, the first logical step is to ascertain the operation of the Australian law3. However, where, as in the case of the Migration Act, the Act uses terminology derived from or importing concepts which are derived from the international instrument, it is necessary to understand those concepts and their relationships to each other in order to determine the meaning and operation of the Act. The Migration Act contains what was described in the Offshore Processing Case4 as: "an elaborated and interconnected set of statutory provisions directed to the purpose of responding to the international obligations which Australia has undertaken in the Refugees Convention and the Refugees Protocol." The Act does not translate into Australian domestic law the obligations of the Contracting States under the Convention. It focusses upon the definition of "refugee" in the Convention as the criterion of operation of the protection visa system5. Nevertheless, the Convention informs the construction of the provisions 2 Question 2A was added by leave at the hearing of the proceeding. 3 NBGM v Minister for Immigration and Multicultural Affairs (2006) 231 CLR 52 at 71 [61] per Callinan, Heydon and Crennan JJ, Gummow ACJ generally agreeing at 55 [1]; [2006] HCA 54; Shi v Migration Agents Registration Authority (2008) 235 CLR 286 at 311-312 [92] per Hayne and Heydon JJ; [2008] HCA 31. 4 Plaintiff M61/2010E v The Commonwealth (2010) 243 CLR 319 at 339 [27]; [2010] HCA 41. 5 Minister for Immigration and Multicultural Affairs v Khawar (2002) 210 CLR 1 at 16 [45] per McHugh and Gummow JJ; [2002] HCA 14, quoted in Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004 (2006) 231 CLR 1 at 14-15 [34] per Gummow ACJ, Callinan, Heydon and Crennan JJ; [2006] HCA 53. of the Migration Act and the Regulations which respond to the international obligations which Australia has undertaken under it6. It is necessary in this case to refer to those obligations before turning to the Act and Regulations. Australia's obligations under the Convention are owed to the other State parties to the Convention. They are obligations which require Australia to afford a degree of protection to the persons to whom the Convention applies. The word "protection" appears in the preamble to the Convention which begins with a recitation of the principle affirmed by the Charter of the United Nations and the Universal Declaration of Human Rights that "human beings shall enjoy fundamental rights and freedoms without discrimination."7 Obligations accepted by the signatories to the Convention appear in a number of Articles which require Contracting States to treat refugees within their territories no less favourably than their nationals in relation to the enjoyment of various rights and freedoms and social benefits8. A number of observations about the nature of the Convention and the obligations it imposes on Contracting States were set out in NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs9. They included the following: the obligations created by the Convention are owed by the Contracting States to each other and not to refugees10; the Convention does not detract from the right of a Contracting State to determine who should be allowed to enter its territory11; 6 See ss 15AB(1) and 15AB(2)(d) of the Acts Interpretation Act 1901 (Cth), referred to in Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004 (2006) 231 CLR 1 at 15 [34]. 7 Charter of the United Nations, Preamble; Universal Declaration of Human Rights, GA Res 217A (III), UNGAOR, 3rd sess, 183rd plen mtg, UN Doc A/810 (10 December 1948), Art 7. 8 Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 244 CLR 144 at 196 [117] per Gummow, Hayne, Crennan and Bell JJ; [2011] HCA 32. (2005) 222 CLR 161; [2005] HCA 6. 10 (2005) 222 CLR 161 at 169 [16] per Gleeson CJ, McHugh, Gummow, Hayne, 11 (2005) 222 CLR 161 at 169-170 [16]. the determination of the status of refugee is a function left by the Convention to the competent authorities of the Contracting States which may select such procedures as they see fit for that purpose12; the Convention sets out the status and civil rights to be afforded within Contracting States to those accorded the status of refugee13. It is also well settled that the Convention does not impose an obligation upon Contracting States to grant asylum to refugees arriving at their borders or a right to reside in those States14. Nor may any individual assert a right under customary international law to enter or remain in the territory of a State of which that individual is not a national15. The protections for which the Convention provides are conferred on persons who answer the description "refugee". Article 1 is headed "Definition of the Term 'Refugee'". The well-known words of Art 1A(2)16 define a refugee as a person who: "owing to [a] well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country". 12 (2005) 222 CLR 161 at 170 [17]. 13 (2005) 222 CLR 161 at 170 [19]. 14 T v Home Secretary [1996] AC 742 at 754 per Lord Mustill; Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225 at 273 per Gummow J; [1997] HCA 4; Minister for Immigration and Multicultural Affairs v Haji Ibrahim (2000) 204 CLR 1 at 45 [137] per Gummow J, 72 [203] per Hayne J; [2000] HCA 55; Minister for Immigration and Multicultural Affairs v Khawar (2002) 210 CLR 1 at 15 [42] per McHugh and Gummow JJ; NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 169 [14] per Gleeson CJ, McHugh, Gummow, Hayne, Callinan and Heydon JJ. See also Zimmermann (ed), The 1951 Convention Relating to the Status of Refugees and its 1967 Protocol: A Commentary, (2011) at 1335. 15 (2005) 222 CLR 161 at 169 [14] and authorities there cited. See also SZ v Minister for Immigration and Multicultural Affairs (2000) 101 FCR 342 at 345-346 [14] per Branson J, Beaumont and Lehane JJ agreeing at 343 [1] and 351 [43]. 16 Article 1A(2) refers to s A of Art 1. Sections C to F of Art 1 are similarly designated in these reasons. The reach of that definition is qualified by Arts 1C to 1F inclusive, which provide that the Convention ceases to apply or does not apply to a person in the circumstances specified in those sections17. How a refugee is to be defined or accorded recognition as such, or to be entitled to continue to avail himself of protection, is expressly and exhaustively the subject of Art 118. It was not suggested that any of the disqualifying sections of Art 1 was capable of application to the plaintiff. Article 1F relates to persons who have committed crimes against peace, war crimes, crimes against humanity or serious non-political crimes outside the country of refuge, or who have been guilty of acts contrary to the purposes and principles of the United Nations. The Minister's delegate, in refusing the plaintiff's application for a protection visa, found she did not have serious reason to consider that the plaintiff should be excluded from the protection of the Convention under Art 1F. The defendants expressly conceded that Art 1F had no application to the plaintiff. Articles 32 and 33 deal with expulsion and refoulement of refugees and impose "significant obligations" on the Contracting States19. Under Art 32 the Contracting States agree that they shall not expel a refugee lawfully in their territory save on grounds of national security or public order20. Such expulsion shall only be in pursuance of a decision reached in accordance with due process of law21. Except where compelling reasons of national security otherwise require, the refugee shall be allowed to submit evidence to clear himself, and to appeal to and be represented for the purpose before a competent authority or a person or persons specially designated by the competent authority22. The defendants submitted that Art 32 had no application to the plaintiff who, being in Australia without a visa, was not a refugee "lawfully in [Australian] territory". That issue need not be resolved in this case which, in the 17 NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 176 [43]. 18 Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004 (2006) 231 CLR 1 at 19 [48] per Gummow ACJ, Callinan, Heydon and 19 NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 170 [20]. 20 Convention, Art 32(1). 21 Convention, Art 32(2). 22 Convention, Art 32(2). end, concerns the construction and interaction of provisions of the Migration Act and the Regulations. As appears later in these reasons, the Migration Act provides for the refusal or cancellation of a protection visa relying upon Art 3223. A visa holder whose visa is cancelled may be lawfully within Australia for the purposes of domestic law and of Art 32 of the Convention at least until his or her visa is cancelled. The mere designation of an applicant for a visa, who does not hold a visa, as an "unlawful non-citizen" under domestic law does not resolve the question whether that person is lawfully within Australia for the purposes of Art 32 of the Convention. Article 33 incorporates the "non-refoulement" obligation and provides: "1. No Contracting State shall expel or return ("refouler") a refugee in any manner whatsoever to the frontiers of territories where his life or freedom would be threatened on account of his race, religion, nationality, membership of a particular social group or political opinion. The benefit of the present provision may not, however, be claimed by a refugee whom there are reasonable grounds for regarding as a danger to the security of the country in which he is, or who, having been convicted by a final judgment of a particularly serious crime, constitutes a danger to the community of that country." The prohibition on refoulement in Art 33(1) is qualified by the condition in Art 33(2). By reason of that qualification, Art 33(1) would not prevent the return of a refugee, who is a security risk, to a country where his life or freedom could be threatened for a Convention reason. As submitted by the defendants, the condition in Art 33(2) differs in terms from and sets a higher standard than the "national security or public order" grounds which engage Art 3224. The defendants conceded that the facts before the Court do not support the conclusion that the condition in Art 33(2) has been satisfied so as to permit the removal of the plaintiff to Sri Lanka consistently with the Convention. Articles 32 and 33 have different functions. As Professor Shearer has written, Art 32 applies to a refugee who resides lawfully in a Contracting State. It precludes expulsion other than in accordance with due process of law. That 23 Migration Act, s 500(1). 24 Stenberg, Non-Expulsion and Non-Refoulement, (1989) at 219-221; Lauterpacht and Bethlehem, "The scope and content of the principle of non-refoulement: Opinion", in Feller, Türk and Nicholson (eds), Refugee Protection in International Law: UNHCR's Global Consultations on International Protection, (2003) 87 at 134; Goodwin-Gill and McAdam, The Refugee in International Law, (2007) at process may include extradition. Article 33 applies to refugees lawfully or unlawfully within a Contracting State but embraces all measures of return including extradition to a country where their lives or freedom would be threatened25. Consistently with the text of those Articles and their place in the Convention, they apply to persons who are refugees. They do not qualify the reach of Art 1. The protection they provide is premised upon a person first falling within the definition of a refugee under Art 126. The statutory framework - grant and refusal of protection visas The plaintiff was at all times, after midnight on 29 December 2009, an "unlawful non-citizen"27. That term is defined in the Migration Act as a person in the migration zone who is not a lawful non-citizen28. A lawful non-citizen is a "non-citizen in the migration zone who holds a visa"29. Some classes of visa are created by the Migration Act30. Other classes of visa are prescribed by the regulations31. The regulations may prescribe criteria for a visa or visas of a 25 Shearer, "Extradition and Asylum", in Ryan (ed), International Law in Australia, 2nd ed (1984) 179 at 205, quoted with approval in NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 171 [21]. 26 Zimmermann (ed), The 1951 Convention Relating to the Status of Refugees and its 1967 Protocol: A Commentary, (2011) at 1295, 1301, 1369; Hathaway, The Rights of Refugees Under International Law, (2005) at 304-305; Fitzpatrick and Bonoan, "Cessation of refugee protection", in Feller, Türk and Nicholson (eds), Refugee Protection in International Law: UNHCR's Global Consultations on International Protection, (2003) 491 at 530; M38/2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 131 FCR 146 at 158 [38] per Goldberg, Weinberg and Non-Refoulement, (1989) at 92, 174; R v Secretary of State for the Home Department, Ex parte Sivakumaran [1988] AC 958 at 1001 per Lord Goff of Chieveley. JJ; Stenberg, Non-Expulsion and Kenny 27 The word "unlawful" is a statutory designation not referable to any breach of the law. 28 Migration Act, s 14(1). 29 Migration Act, s 13(1). 30 Sections 32-38B (referred to in s 31(2)) provide for classes of visa in addition to the prescribed classes. 31 Migration Act, s 31(1) and definition of "prescribed" in s 5(1) as "prescribed by the regulations". specified class32. The protection visa for which the plaintiff applied is provided for in s 36(1). Section 36(2)(a) specifies as a criterion for a protection visa that the applicant is: "a non-citizen in Australia to whom the Minister is satisfied Australia has protection obligations under the Refugees Convention as amended by the Refugees Protocol". The term "protection obligations" is not defined in the Migration Act. Prior to amendments to the Migration Act in 199933, s 36 did no more than specify protection visas as a class of visa in s 36(1) and state the criterion in s 36(2). Sections 36(1) and 36(2)(a) are in relevantly the same terms as ss 36(1) and 36(2) when those provisions were considered in NAGV34. The Court has not been asked to depart from what was said in that decision. In a joint judgment, six Justices held that the phrase "to whom Australia has protection obligations": describes no more than a person who is a refugee within the meaning of Art 1 of the Convention35; removes any ambiguity that it is to Art 1A only that regard is to be had in determining whether a person is a refugee, without considering whether the Convention does not apply or ceases to apply by reason of one or more of the circumstances described in the other sections in Art 136. The Court rejected the proposition that a person who had a right to reside in and enjoy effective protection in a third country and who could be returned to that country consistently with Art 33, was not a person in respect of whom Australia had protection obligations. The 1999 amendment to s 36 was among a number of amendments to the Migration Act made to deal with non-citizen asylum seekers who have a right to enter and reside in another country. Section 65, which applies to visa applications generally, provides that after considering a valid application for a visa, the Minister, if satisfied that the health and other criteria for the grant of the visa have been satisfied and that the 32 Migration Act, s 31(3) read with s 504. 33 Border Protection Legislation Amendment Act 1999 (Cth). 34 (2005) 222 CLR 161 at 168 [11]. 35 (2005) 222 CLR 161 at 176 [42]. 36 (2005) 222 CLR 161 at 177 [47]. grant is not otherwise prevented by ss 40, 500A and 501 of the Migration Act (or any other provision of Commonwealth legislation), "is to grant the visa"37. If not so satisfied, the Minister is "to refuse to grant the visa."38 In respect of protection visas, the satisfaction required of the Minister under s 36(2)(a) has been described as "a component of the condition precedent to the discharge of [the] obligation" imposed by s 6539. A visa, once granted, may be cancelled under s 116(1) if, inter alia, the presence of its holder in Australia is, or would be, a risk to the health, safety or good order of the Australian community40. The Minister may also cancel a visa if "a prescribed ground for cancelling a visa applies to the holder." 41 Regulation 2.43(1)(b) of the Regulations prescribes as a ground for cancellation that: "the holder of the visa has been assessed by the Australian Security Intelligence Organisation to be directly or indirectly a risk to security, within the meaning of section 4 of the Australian Security Intelligence Organisation Act 1979." That ground reflects the terms of public interest criterion 4002. However, cancellation of a protection visa under s 116 is not mandatory on that ground42. That was not always the case. The Minister must cancel the visa if the Regulations prescribe circumstances in which a visa must be cancelled43. Prior to March 2006, reg 2.43(2) provided that the Minister was required to cancel a visa if the holder of a visa was subject to a security assessment in the terms described in reg 2.43(1)(b). However, following an amendment to the Regulations in March 200644 the only circumstance in which a Minister is 37 Migration Act, s 65(1)(a). 38 Migration Act, s 65(1)(b). 39 Minister for Immigration and Multicultural Affairs v Haji Ibrahim (2000) 204 CLR 1 at 34-35 [107] per Gummow J, citing Chen Shi Hai v Minister for Immigration and Multicultural Affairs (2000) 201 CLR 293 at 306 [41]; [2000] HCA 19. 40 Migration Act, s 116(1)(e). 41 Migration Act, s 116(1)(g). 42 Migration Act, s 116(3) read with reg 2.43(2) and the definition of "relevant visa" in reg 2.43(3) which includes a subclass 866 visa, ie a protection visa. 43 Migration Act, s 116(3). 44 Migration Amendment Regulations 2006 (No 1), Sched 1, Items [1]-[4]. required to cancel a protection visa under s 116 is where the Minister for Foreign Affairs has personally determined that the visa holder's presence in Australia may be directly or indirectly associated with the proliferation of weapons of mass destruction. The reason given for the amendment to the Regulations was that it was necessary to45: "[ensure] that Australia's international legal obligations in respect of holders of certain protection and humanitarian visas are not adversely affected." Section 501 provides that the Minister may refuse to grant or may cancel a visa if the applicant for the visa or the visa holder does not satisfy the Minister that he or she passes the character test46. Section 501(6) sets out the circumstances under which "a person does not pass the character test". Those circumstances include possession of a substantial criminal record47, association with persons or with a group or organisation whom the Minister reasonably suspects has been, or is, involved in criminal conduct48, and want of good character on account of the person's past and present criminal and/or general conduct49. A person also does not pass the character test if: in the event the person were allowed to enter or to remain in Australia, there is a significant risk that the person would: engage in criminal conduct in Australia; or harass, molest, intimidate or stalk another person in Australia; or (iii) vilify a segment of the Australian community; or incite discord in the Australian community or in a segment of that community; or 45 Explanatory Statement, Migration Amendment Regulations 2006 (No 1), Attachment B, Sched 1, Item [1]. 46 Migration Act, s 501(1) and (2). 47 Migration Act, s 501(6)(a). 48 Migration Act, s 501(6)(b). 49 Migration Act, s 501(6)(c). represent a danger to the Australian community or to a segment of that community, whether by way of being liable to become involved in activities that are disruptive to, or in violence threatening harm to, that community or segment, or in any other way." As has happened in this case, the refusal or cancellation of a visa, if no other visa is granted, renders the applicant or visa holder, as the case may be, an unlawful non-citizen and engages the application of the mandatory detention regime. Statutory framework – detention of unlawful non-citizens The mandatory detention regime applicable to unlawful non-citizens is to be found in Div 7 of Pt 2 of the Migration Act. The obligation to detain unlawful non-citizens is imposed by s 189(1) which provides: "If an officer knows or reasonably suspects that a person in the migration zone (other than an excised offshore place) is an unlawful non-citizen, the officer must detain the person." As soon as reasonably practicable after an officer detains a person under s 189 the officer must ensure that the person is made aware of the provisions of s 195 under which a detainee may apply for a visa and s 196 which provides for the duration of detention. The language of s 196(1) which is said to, in effect, support indefinite detention under some circumstances is as follows: "An unlawful non-citizen detained under section 189 must be kept in immigration detention until he or she is: removed from Australia under section 198 or 199; or deported under section 200; or granted a visa." That section, on its face, prevents the release of an unlawful non-citizen from detention (otherwise than for removal for deportation) unless the non-citizen has been granted a visa. Subsections (4) and (4A) mandate the continuance of the detention of persons detained as a result of the cancellation of their visas under s 501 or pending their deportation under s 200, unless a court finally determines that the detention is unlawful. Those provisions apply50: 50 Migration Act, s 196(5)(a). "whether or not there is a real likelihood of the person detained being removed from Australia under section 198 or 199, or deported under section 200, in the reasonably foreseeable future". Section 198 provides for the removal from Australia of unlawful non-citizens "as soon as reasonably practicable" when one or other of a number of events set out in s 198 have occurred. One of those events is that the non-citizen is a detainee who has made a valid application for a substantive visa which has been refused, the application has been finally determined and the non-citizen has not made another valid application for a substantive visa that can be granted while the applicant is in the migration zone51. As will be shown in these reasons, the plaintiff's application for a visa has not been finally determined because public interest criterion 4002, which was relied upon for its refusal, is invalid. Statutory framework - refusal or cancellation of protection visas relying on Articles 1F, 32 or 33(2) The plaintiff's current detention has resulted from the refusal of his application for a protection visa. That refusal was on the ground that he did not satisfy public interest criterion 4002. As appears from reserved question 2A, the validity of that criterion is challenged. That challenge rests upon its asserted inconsistency with provisions of the Migration Act providing for the refusal of protection visas on grounds, which include national security grounds, and which attract statutory review processes in the AAT. It is necessary to consider those provisions. The relevant provisions provide for review by the AAT of decisions made by the Minister to refuse to grant a protection visa or to cancel a protection visa "relying on one or more of the following Articles of the Refugees Convention, namely, Article 1F, 32 or 33(2)"52. The provisions may be summarised as follows: Section 500(1)(c) which provides for review by the AAT of such a decision, other than a decision to which s 502 applies. Section 500(3) which provides that a person is not entitled to make an application to the AAT for the review of such a decision unless the person would be entitled to seek review of the decision under Pt 7 (ie in the RRT) if the decision had been made on another ground. 51 Migration Act, s 198(6). 52 Migration Act, s 500(1)(c). Section 500(4)(c) which provides that such a decision is not reviewable under Pt 7 of the Act. Section 500(5)(c) which provides that the President of the AAT, giving a direction as to the persons who are to constitute the AAT for the purpose of a proceeding for review of such a decision, must have regard, inter alia, to "the degree to which the matters to which that proceeding relates concern the security, defence or international relations of Australia". The allocation of responsibility for such review to the AAT has been linked to the seriousness of the matters likely to be raised in such reviews53. Section 502 which provides that if the Minister, acting personally, intends to make such a decision and decides that "because of the seriousness of the circumstances giving rise to the making of that decision, it is in the national interest that the person be declared to be an excluded person", the Minister may, as part of the decision, issue a certificate declaring the person to be an excluded person. Such a decision has to be made personally and notice of it laid before each House of Parliament. Section 503 which provides that a person in relation to whom such a decision has been made is not entitled to enter Australia or to be in Australia at any time during a period determined under the Regulations. The plaintiff submitted that the power to refuse to grant a visa relying on one or more of Arts 32 or 33(2) was to be found in s 501. The submission did not refer to Art 1F54. The defendants accepted at the hearing that the criteria authorising expulsion or refoulement of a refugee under Arts 32 or 33(2) were subsumed within the criteria for the character test under s 501(6)(d)(v). In later written submissions however, the defendants argued that the Migration Act provides no power to make decisions refusing a protection visa relying on Arts 32 or 33(2) and that in that respect ss 500-503 were enacted upon a false premise. As appears below, that submission should not be accepted. It is necessary now to consider the significance of the references to Arts 1F, 32 and 33(2) in ss 500, 502 and 503. The plurality in NAGV suggested, but did not decide, that Arts 32 and 33(2) may have been included in ss 500, 502 and 503 "for more abundant caution or as epexegetical of Art 1F in its adoption by the Act, with operation both at the 53 Daher v Minister for Immigration and Ethnic Affairs (1997) 77 FCR 107 at 110. 54 As appears below, a decision refusing a protection visa under s 36(2) may rely upon Art 1F. A decision cancelling a protection visa in reliance upon Art 1F may be made under s 501. time of grant and later cancellation of protection visas."55 Their Honours did not discuss how Art 1F could be relied upon in relation to the cancellation of a protection visa, nor how Arts 32 and 33(2) could be invoked in relation to refusal or cancellation of a protection visa. Consideration of those matters requires reference to the legislative history of ss 500-503. The legislative history of ss 500-503 The precursor of s 500(1)(c) was introduced into the Migration Act as part of a new section 180(1) by the Migration (Offences and Undesirable Persons) Amendment Act 1992 (Cth). Sections 180A, 180B and 180C, which were enacted by the same legislation, were the precursors of ss 501, 502 and 503. The new section 180(1) was said, in the Explanatory Memorandum to the Bill, to "[allow] applications to be made to the AAT for review of criminal deportation decisions under s 5556 and decisions of the Minister under new section 180A."57 The new section 180(1) was said to provide the AAT with determinative jurisdiction to review decisions under the new section 180A to refuse or cancel a visa or entry permit on the grounds provided for in that section. That review is subject to the case in which the Minister has issued a certificate that the person affected by the decision be an excluded person58. The purpose of the new section 180(1)(c)59 was60: "to extend the jurisdiction of the AAT to review decisions to refuse or cancel protection visas relying on Articles 1F, 32 or 33(2) of the Refugees Convention." 55 (2005) 222 CLR 161 at 179 [57]. 56 Such decisions are now made under ss 201 and 203. 57 Australia, House of Representatives, Migration (Offences and Undesirable Persons) Amendment Bill 1992, Explanatory Memorandum at 2 [6]. 58 Australia, House of Representatives, Migration (Offences and Undesirable Persons) Amendment Bill 1992, Explanatory Memorandum at 2 [7]. 59 Now s 500(1)(c). 60 Australia, House of Representatives, Migration (Offences and Undesirable Persons) Amendment Bill 1992, Explanatory Memorandum at 3 [10]. Noting that protection visas would come into existence on the commencement of the Migration Reform Act 1992 (Cth), the Explanatory Memorandum "The Articles of the Refugees Convention referred to in new paragraph 180(1)(c) have the effect of removing the obligation to provide protection as a refugee to a person who has committed crimes against peace, war crimes, crimes against humanity, serious non-political criminal offences, or otherwise presents a threat to the security of Australia or to the Australian community." The purpose of the new section 180(1) was linked in the Explanatory Memorandum to criminal deportation decisions and decisions to refuse or cancel visas under s 180A62. The explanation of the new section 180(1)(c) is consistent with the proposition that the grant of a protection visa might be refused under s 36(2) or refused or cancelled pursuant to s 180A by application of criteria derived from Arts 1F, 32 or 33(2) of the Convention. The Second Reading Speech was to similar effect. The Minister said63: "Protection visas will be granted on the basis that the applicant is entitled to protection under the United Nations convention and protocol relating to the status of refugees. Decisions to refuse protection visas will be reviewable by the Administrative Appeals Tribunal where adverse determinations are made against persons such that character concerns are sufficiently serious to engage those articles of the convention which provide for the exclusion of an individual from the provisions of the convention, article 1F, or for the expulsion of a refugee, articles 32 and 33(2). Such decisions will only be reviewable by the Administrative Appeals Tribunal on and after 1 November 1993." (emphasis added) Against that background consideration may be given to the textual indications of the source of power under the Migration Act to make a decision refusing or cancelling a protection visa relying on one or more of Arts 1F, 32 and 33(2). 61 Australia, House of Representatives, Migration (Offences and Undesirable Persons) Amendment Bill 1992, Explanatory Memorandum at 3 [10]. 62 Australia, House of Representatives, Migration (Offences and Undesirable Persons) Amendment Bill 1992, Explanatory Memorandum at 2 [6]. 63 Australia, House of Representatives, Parliamentary Debates (Hansard), 17 December 1992 at 4122. The power to refuse or cancel a visa relying on Arts 1F, 32 and 33(2) Section 500(1)(c) and the cognate provisions of ss 502 and 503 raise the question - where does the Migration Act provide the power for decisions to be made to refuse or cancel a protection visa in such a way as to rely upon one or other of Arts 1F, 32 and 33(2)? One approach to determining that question is to consider the ways in which such decisions could be made under the Act. Taking the words "rely on" in their dictionary sense of "rest upon with assurance"64, a decision can be said to "rely on" one or more of the Articles in the following ways: the Article provides a statutory ground for the decision which is a ground adopted by the Migration Act and which is applied by the decision-maker; the Article embodies a criterion or standard which is congruent with a relevant (but not necessarily mandatory) factor in the exercise of the decision-making power and which the decision-maker applies in reaching the decision. To give effect to ss 500, 502 and 503, the power to make such decisions must be found within existing grants of power under the Act or by implication from the terms of ss 500, 502 and 503. In NAGV, in the joint judgment, reference was made to the "adoption by the Act" of Art 1F with operation both at the time of grant and later cancellation of protection visas65. That adoption is clear enough in relation to the grant of protection visas. Article 1F may be said to have been so "adopted" because it limits the reach of the definition of refugee in Art 1. It thereby gives content to the criterion in s 36(2)(a), which depends upon the subsistence of protection obligations owed by Australia under the Convention to the visa applicant. In a direct way therefore, a decision to refuse the grant of a protection visa by reason of the application of Art 1F can be described as a decision "to refuse to grant a visa relying on Art 1F". As further appears from NAGV, and the earlier discussion of Arts 32 and 33 in these reasons, those Articles do not qualify the reach of Art 1 and therefore do not play a part in the application of the criterion in s 36(2)(a). There is no provision of the Migration Act which gives direct effect to those Articles as providing grounds for the refusal or cancellation of a protection visa. It is necessary, therefore, to turn to s 501 and the application of the character test to determine whether, and if so in what ways, decisions to refuse or cancel a 64 The Oxford English Dictionary, 2nd ed (1989), vol XIII at 576, "rely" sense 5. 65 (2005) 222 CLR 161 at 179 [57]. protection visa made under that section may be said to rely on one or more of Arts 1F, 32 and 33(2). If the criterion under s 36(2)(a) of the Migration Act and all other prescribed criteria are satisfied, the Minister is nevertheless required to refuse the grant of a protection visa if the visa applicant does not pass the character test in s 50166. The applicant would be treated as a person to whom Australia has protection obligations under the Convention but, being refused a visa, would be an unlawful non-citizen67. The applicant would continue to be entitled to the benefit of the non-refoulement obligation under Art 33 unless the condition in Art 33(2) were satisfied. In that case there would be nothing in the Convention to prevent his return to the country from which he came. As noted earlier in these reasons, the defendants accepted that the disentitling criteria in Arts 32 and 33(2) which would lift Convention bars to the expulsion or refoulement of a refugee are subsumed within the character test. "National security or public order" is a ground for expulsion under Art 32. The existence of reasonable grounds for regarding the refugee as a danger to the security of the host country is a criterion for forfeiting the benefit of Art 33(1). Those criteria fall within the concept in s 501(6)(d)(v) of a person who would represent a danger to the Australian community or to a segment of that community. The defendants argued, in submissions filed after the hearing, that when ss 500, 502 and 503 were enacted the Parliament was under the misapprehension, only dispelled by the decision of this Court in NAGV, that a protection visa could be refused for failure to meet the criterion in s 36(2) by reason of the disentitling conditions in Arts 32 and 33(2). The defendants submitted that those Articles have no part to play in the application of s 36(2) and that there is no other provision of the Migration Act authorising refusal of a protection visa in reliance upon them. That is to say ss 500, 502 and 503 were enacted upon a false premise. That submission should be rejected. The false premise which is asserted does not emerge with any clarity from the Explanatory Memorandum or the Second Reading Speech. As noted earlier, there are indications to the contrary. In any event, the task of a court construing a statutory provision is to give meaning to every word in the provision. It is a long-established rule of interpretation that "such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other 66 Migration Act, s 65(1)(a)(iii) which, read with s 65(1)(b), out of abundant caution requires the Minister to refuse to grant a visa if not satisfied that the grant of the visa is not prevented by s 501. 67 Migration Act, s 14(1). construction they may all be made useful and pertinent"68. That task in this case directs attention to ss 36 and 501 of the Migration Act. In relation to s 501, it is sufficient for present purposes to proceed on the basis, conceded by the defendants, that there is an overlap between the criteria in Arts 32 and 33(2) and the criteria in s 501(6)(d)(v) of the Migration Act. A Minister refusing a visa or cancelling a visa in reliance upon s 501(6)(d)(v) may do so on a basis which also satisfies the disentitling criteria under one or other of Arts 32 or 33(2). A cancellation decision may also be made in reliance upon criteria which would satisfy Art 1F. A refusal or cancellation of a visa under s 501, based upon a finding that meets one or more of the disentitling criteria under Arts 1F, 32 or 33(2), will have consequences for Australia's obligations under the Convention and therefore for the application of other provisions of the Migration Act. This reflects the characterisation of the Migration Act in the Offshore Processing Case as containing provisions which are directed to the purpose of responding to Australia's international obligations under the Convention69. The consequences for Australia's Convention obligations of decisions relying upon one or more of Arts 1F, 32 or 33(2) include the following: a visa cancellation by reference to criteria in the character test which also satisfy Art 1F would have the result that the visa holder is no longer treated as within Art 1 and therefore no longer treated as a person to whom Australia owes protection obligations; the refusal to grant a visa by reference to the character test on grounds which also satisfy Art 33(2) would have the result that the visa applicant, although satisfying the requirements of Art 1, is no longer treated as a person who has the benefit of the non-refoulement obligation in Art 33(1); a cancellation of a visa by reference to criteria which also satisfy Arts 32 or 33(2) would have the result that the former visa holder, although satisfying the requirements of Art 1, may be treated as a person subject to expulsion pursuant to Art 32 or refoulement pursuant to Art 33(2) as the case may be. 68 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 382 [71] per McHugh, Gummow, Kirby and Hayne JJ; [1998] HCA 28, citing R v Berchet (1688) 1 Show KB 106 [89 ER 480], quoted in The Commonwealth v Baume (1905) 2 CLR 405 at 414 per Griffith CJ; [1905] HCA 11. 69 (2010) 243 CLR 319 at 339 [27]. Expulsion or refoulement following a decision to refuse or cancel a visa under s 501 can be effected by the mechanisms of the domestic law, which may include deportation under Div 9 of Pt 2 of the Migration Act or removal under Div 8 of Pt 2. Save for cases in which the Minister has issued a certificate under s 502, a decision to refuse or cancel a visa on national security grounds congruent with the disentitling criteria in Arts 32 or 33(2) is subject to review by the AAT on the application of the person affected70. A decision of the AAT on such an application is subject to statutory "appeal" to the Federal Court exercising original jurisdiction on a question of law71. The decision of the Federal Court on the statutory appeal is subject to appeal to the Full Court of the Federal Court. The defendants submitted that if the power to make decisions relying upon Arts 32 and 33 is to be located in s 501, s 500(1)(c), providing for review of such decisions, becomes largely redundant because s 500(1)(b) provides for review by the AAT of decisions of a delegate of the Minister made under s 501. Even if that were correct it would not be determinative. As Lord Macnaghten said in Commissioners for Special Purposes of Income Tax v Pemsel72: "Nor is surplusage or even tautology wholly unknown in the language of the Legislature." In any event, the two provisions have different applications. Section 500(1)(b) provides for review by the AAT of decisions made by a delegate of the Minister under s 501. Section 500(1)(c) allows for review of decisions made to refuse a visa under s 36 by reason of Art 1F. It also applies to decisions made by the Minister personally under s 501, acting in reliance upon one or more of Arts 1F, 32 or 33(2), where the Minister does not declare the person affected to be an "excluded person" under s 502. The plaintiff submitted, in the alternative, that the power to make decisions to refuse or cancel a visa relying on one or more of Arts 1F, 32 or 33(2) is to be implied from the terms of ss 500, 502 and 503. The plaintiff does not need to rely upon that alternative submission. Nevertheless, something should be said about it. 70 Migration Act, s 500(1)(c). 71 Administrative Appeals Tribunal Act 1975 (Cth), s 44(1). 72 [1891] AC 531 at 589. Where a statute expressly confers upon a person or a body a power or function or a duty, any unexpressed ancillary power necessary to the exercise of the primary power or function, or discharge of the duty, may be implied73. The present case is not one requiring the implication of ancillary powers. Sections 500, 502 and 503 create a scheme relating to the review of certain classes of decisions. The scheme thus created is ancillary to the exercise of the power, which it assumes, to make the decisions to which those provisions refer. An analogous situation, but one which differs in important respects from the present, was considered in Minister for Immigration and Ethnic Affairs v Mayer74. That was a decision made prior to the introduction of the visa system in 1992. It was a condition of the grant of an entry permit under the former s 6A of the Migration Act that the Minister had determined, by instrument in writing, that the applicant had the status of a refugee. This Court held, by majority, that the section impliedly conferred upon the Minister the function of making a determination. The making of the determination was thereby "a decision under an enactment" for the purposes of the obligation to provide reasons pursuant to s 13 of the Administrative Decisions (Judicial Review) Act 1977 (Cth). In drawing the implication which they did from s 6A of the Migration Act, Mason, Deane and Dawson JJ said that a legislative provision operating upon a specified determination of a Minister or other officer, could readily be construed as impliedly conferring upon the Minister or officer the statutory function of making the particular determination. Their Honours said75: "Such a construction is likely to be clearly warranted in a case where the determination upon which the legislative provision operates is a determination to be made for the purposes of the particular provision and at a time when and in the circumstances in which the provision is called upon to operate, where no other statutory source of obligation to consider whether the determination should be made or of authority to make it is apparent and where the legislative provision will be without effective content if no authority to make the requisite determination exists." 73 Fenton v Hampton [1858] 11 Moo 347 at 360 [14 ER 727 at 732], cited in The Trolly, Draymen and Carters Union of Sydney and Suburbs v The Master Carriers Association of New South Wales (1905) 2 CLR 509 at 523 per O'Connor J; [1905] HCA 20; Attorney-General v Great Eastern Railway Co [1880] 5 App Cas 473 at 478 per Lord Selborne LC, 481 per Lord Blackburn; Egan v Willis (1998) 195 CLR 424 at 468 [83] per McHugh J; [1998] HCA 71. 74 (1985) 157 CLR 290; [1985] HCA 70. 75 (1985) 157 CLR 290 at 303. The present case differs in two respects: There are identified statutory sources of power to make decisions to refuse or cancel visas relying on one or more of Arts 1F, 32 and 33. Section 6A, from which the implication in Mayer was drawn, conditioned the substantive power to grant a permit on the ministerial determination of refugee status. The condition embodied the power to make the determination. On the other hand ss 500, 502 and 503 are ancillary to, or consequential upon, the exercise of the power to make decisions of the class referred to in those provisions. The question whether the prescription of public interest criterion 4002 is a valid exercise of the regulation-making power under the Migration Act directs attention to the source and scope of that power. The regulation-making power The regulation-making power under s 504 of the Migration Act authorises the Governor-General to make regulations, "not inconsistent with this Act, prescribing all matters which by this Act are required or permitted to be prescribed or which are necessary or convenient to be prescribed for carrying out or giving effect to this Act." Section 504 does not in terms provide that the regulations may prescribe criteria for visas. Section 31(3) does that. Section 504 is nevertheless the source of the regulation-making power. Regulations made under s 504 must be "not inconsistent with" the Migration Act. Even without that expressed constraint delegated legislation cannot be repugnant to the Act which confers the power to make it76. Repugnancy or inconsistency may be manifested in various ways77. An important consideration in judging inconsistency for present purposes is "the degree to which the legislature has disclosed an intention of dealing with the subject with which the statute is concerned."78 A grant of power to make regulations in terms conferred by s 504 does not authorise regulations which will "extend the scope or general operation of the enactment but [are] strictly 76 Federal Capital Commission v Laristan Building and Investment Co Pty Ltd (1929) 42 CLR 582 at 588 per Dixon J; [1929] HCA 36. 77 For an historical account of the concept of repugnancy in a variety of contexts see Leeming, Resolving Conflicts of Laws, (2011) at 84-139. 78 Morton v Union Steamship Co of New Zealand Ltd (1951) 83 CLR 402 at 410; [1951] HCA 42. ancillary."79 In considering whether there has been a valid exercise of the regulation-making power "[t]he true nature and purpose of the power must be determined"80. The plaintiff relied upon those general propositions in support of his submission that public interest criterion 4002 is repugnant to the Migration Act and its scheme. Before considering the regulatory framework under which the criterion was prescribed it is necessary to say something about s 498 of the Migration Act. Section 498(1) of the Migration Act provides: "The powers conferred by or under this Act shall be exercised in accordance with any applicable regulations under this Act." That provision does not authorise the making of regulations which abrogate, modify or qualify the scope of the powers conferred by the Migration Act81. Nor does s 498 provide a gateway for construction of the Migration Act by reference to regulations made under it. Generally speaking an Act, which does not provide for its own modification by operation of regulations made under it, is not to be construed by reference to those regulations82. That would be a case of the tail wagging the dog. That general principle does not exclude the possibility that a regulatory scheme proposed and explained at the time that Parliament enacted the Act under which the scheme was to be made could constitute material relevant to 79 Shanahan v Scott (1957) 96 CLR 245 at 250 per Dixon CJ, Williams, Webb and Fullagar JJ; [1957] HCA 4. 80 Williams v City of Melbourne (1933) 49 CLR 142 at 155 per Dixon J; [1933] HCA 81 Some statutes provide for regulations of that character: eg Extradition Act 1988 (Cth), s 11 considered by this Court in Oates v Attorney-General (Cth) (2003) 214 CLR 496 at 508-509 [30]-[31]; [2003] HCA 21; Minister for Home Affairs (Cth) v Zentai (2012) 289 ALR 644 at 649-650 [15]-[17] per French CJ, 661 [59] per Gummow, Crennan, Kiefel and Bell JJ; [2012] HCA 28. See also O'Connell v Nixon (2007) 16 VR 440 at 448 [32] per Nettle JA, Chernov and Redlich JJA agreeing, that Parliament, requiring by s 8AA of the Police Regulation Act 1958 (Vic) that an appeal be subject to the regulations, elevated the regulation-making powers under the Act to enable modification and restriction of what was otherwise provided for in unrestricted terms in the Act itself. 82 Hunter Resources Ltd v Melville (1988) 164 CLR 234 at 244 per Mason CJ and Gaudron J; [1988] HCA 5. determination of the statutory purpose. No occasion for reference to the Regulations in that way arises in this case. Regulations - the public interest criteria The Regulations provide for classes of visa which are set out in Sched 1 to the Regulations and are in addition to the classes of visa created by the Migration Act itself83. The criteria prescribed by the Regulations, for each class of visa, are in addition to those prescribed by the Act. They are to be found in Sched 2 to the Regulations84. Criteria in Sched 2 may incorporate by numerical reference criteria bearing the relevant numbers and set out in Scheds 3, 4 and 585. Schedule 1 to the Regulations prescribes criteria, in Item 1401, for Protection (Class XA) visas and specifies as a subclass an "866 (Protection)" visa. The designation of that subclass identifies the part of Sched 2 that applies in relation to the Protection (Class XA) visa86. That is the part headed "Subclass 866 Protection". That part of Sched 2 sets out, in Div 866.2, primary criteria to be satisfied at the time of the application for a protection visa87 and other primary criteria to be satisfied at the time of the decision88. Secondary criteria are set out in Div 866.3. One of the primary criteria is in cl 866.225, which provides: "The applicant: satisfies public interest criteria 4001, 4002 and 4003A; and if the applicant had turned 18 at the time of application - satisfies public interest criterion 4019." Each number referred to in cl 866.225 refers to a criterion bearing that number in Sched 4. 83 Regulations, reg 2.01. 84 Regulations, reg 2.03(1). 85 Regulations, reg 2.03(2). 86 Regulations, reg 2.02(2). 87 Regulations, Sched 2, Subdiv 866.21. 88 Regulations, Sched 2, Subdiv 866.22. Schedule 4 to the Regulations is entitled "Public interest criteria and related provisions". Public interest criteria 4001 and 4002 are in the following terms: "4001 Either: the person satisfies the Minister that the person passes the character test; or the Minister is satisfied, after appropriate inquiries, that there is nothing to indicate that the person would fail to satisfy the Minister that the person passes the character test; the Minister has decided not to refuse to grant a visa to the person despite reasonably suspecting that the person does not pass the character test; or the Minister has decided not to refuse to grant a visa to the person despite not being satisfied that the person passes the character test. 4002 The applicant is not assessed by the Australian Security Intelligence Organisation to be directly or indirectly a risk to security, within the meaning of section 4 of the Australian Security Intelligence Organisation Act 1979." Public interest criterion 4003A is not material for present purposes. Public interest criterion 4002 does not create a mechanism, of the kind contemplated by s 505, for third party assessment informing the Minister's decision. It is itself a criterion. As a matter of construction, the term "is not assessed" in public interest criterion 4002 must be taken to refer to the absence of any current adverse assessment by ASIO that a person is directly or indirectly a risk to security. That is to say, if ASIO has made such an assessment at one time and thereafter made a fresh assessment that the applicant is not a risk to security, the applicant will, while that later assessment stands, satisfy the criterion in public interest criterion Criteria similar, but not identical, to public interest criteria 4001 and 4002 were prescribed when the Regulations were first made in 1994. Public interest criterion 4002 then read: "The applicant is not assessed by the competent Australian authorities to be directly or indirectly a risk to Australian national security." That criterion was replaced with the present criterion in 200589. The amendment substituted the words "competent Australian authorities" with "Australian Security Intelligence Organisation" in order to make it clear that ASIO was the only Australian authority able the Department90. The amendment also broadened the definition of "security" from "Australian national security" to security "within the meaning of section 4 of the Australian Security Intelligence Organisation Act 1979" such that91: to provide security assessments "to prevent the grant of a visa, an assessment as a risk to security need not necessarily be restricted to Australian national security, but may relate to the carrying out of Australia's responsibilities to foreign countries in security-related matters." An assessment made by ASIO for the purpose of public interest criterion 4002 is done in the exercise of a statutory function under the ASIO Act. It is necessary therefore, to look to the statutory framework within which such assessments are made. Statutory framework - adverse security assessments ASIO is continued in existence by the ASIO Act92. Its functions include furnishing Commonwealth agencies with "security assessments relevant to their functions and responsibilities."93 The word "security" is defined broadly in s 4. It relevantly includes: the protection of, and of the people of, the Commonwealth and the several states and territories from: (iii) politically motivated violence; promotion of communal violence; 89 Migration Amendment Regulations 2005 (No 10), Sched 3, Item [2]. 90 Explanatory Statement, Migration Amendment Regulations 2005 (No 10), Attachment B, Sched 3, Item [1]. 91 Explanatory Statement, Migration Amendment Regulations 2005 (No 10), Attachment B, Sched 3, Item [2]. 92 ASIO Act, s 6. 93 ASIO Act, s 17(1)(c) read with s 37(1). whether directed from, or committed within, Australia or not; and the carrying out of Australia's responsibilities to any foreign country in relation to a matter mentioned in any of the subparagraphs of paragraph (a)". The term "security assessment" is defined in s 35(1) and means: "a statement in writing furnished by the Organisation to a Commonwealth agency expressing any recommendation, opinion or advice on, or otherwise referring to, the question whether it would be consistent with the requirements of security for prescribed administrative action to be taken in respect of a person or the question whether the requirements of security make it necessary or desirable for prescribed administrative action to be taken in respect of a person, and includes any qualification or comment expressed in connection with any such recommendation, opinion or advice, being a qualification or comment that relates or that could relate to that question." (emphasis added) "Prescribed administrative action" is also defined in s 35(1) and includes: the exercise of any power, or the performance of any function, in relation to a person under the Migration Act 1958 or the regulations under that Act". The term "adverse security assessment" means94: "a security assessment in respect of a person that contains: any opinion or advice, or any qualification of any opinion or advice, or any information, that is or could be prejudicial to the interests of the person; and a recommendation that prescribed administrative action be taken or not be taken in respect of the person, being a recommendation the implementation of which would be prejudicial to the interests of the person." 94 ASIO Act, s 35(1). Part IV of the ASIO Act makes provision for persons to be notified of assessments and for merits review of assessments by the AAT. However, merits review is precluded in relation to a security assessment provided in connection with the exercise of any power or the performance of any function in relation to a person under the Migration Act or the Regulations under that Act95. There are certain exclusions from that non-application which are not relevant for present purposes. In the result, merits review is not available in relation to an adverse security assessment made for the purposes of public interest criterion 4002. Whether public interest criterion 4002 is invalid The Migration Act creates a statutory scheme, the purpose of which is to give effect to Australia's obligations under the Convention and to provide for cases in which those obligations are limited or qualified. It provides, in ss 36 and 65, for the grant of protection visas to persons to whom Australia owes protection obligations. It provides for the refusal or cancellation of such visas in respect of persons to whom Australia owes obligations where: the person may nevertheless be expelled from the country for "compelling reasons of national security" pursuant to Art 32; the person may be removed from the country where "there are reasonable grounds for regarding [the person] as a danger to the security of the country in which [the person] is" pursuant to Art 33(2). The Act provides procedural protection by way of merits review of decisions to refuse or cancel a visa relying on Arts 32 or 33(2). That protection is not available in those "national interest" cases in which the Minister makes a decision personally to refuse or cancel a visa pursuant to s 501 and issues a certificate under s 502. That is the statutory scheme by reference to which the validity of public interest criterion 4002 is to be judged. Since at least 2005, the scope of the security concerns which may attract an adverse security assessment for the purposes of public interest criterion 4002 have extended to those concerns which relate to Australia's responsibilities to foreign countries in security-related matters. The extent to which such concerns may enliven the disentitling conditions of Arts 32 and 33(2) was considered by the Supreme Court of Canada in Suresh v Canada (Minister of Citizenship and Immigration)96. The Supreme Court recognised that "the security of one country 95 ASIO Act, s 36 read with the definition of "prescribed administrative action" in 96 [2002] 1 SCR 3. is often dependent on the security of other nations."97 In so doing, the Court acknowledged that historically it had been argued that threats to the security of another State would not enliven the disentitling condition under Art 3398. The Court said, however99: "Whatever the historic validity of insisting on direct proof of specific danger to the deporting country, as matters have evolved, we believe courts may now conclude that the support of terrorism abroad raises a possibility of adverse repercussions on Canada's security". As to the level of threat sufficient to lift the prohibition against refoulement, the Court said that100: "The threat must be 'serious', in the sense that it must be grounded on objectively reasonable suspicion based on evidence and in the sense that the threatened harm must be substantial rather than negligible." A similar approach to the level of threat was adopted by the Supreme Court of New Zealand in Zaoui v Attorney-General (No 2)101. The word "security" as defined in the ASIO Act does not in terms set a threshold level of risk necessary interest to support an adverse assessment for criterion 4002. the purposes of public The relationship between Art 33(2), s 500 and public interest criterion 4002 was considered in two single judge decisions of the Full Court of the Federal Court. Both of those decisions were made before the decision of this Court in NAGV. In Director General Security v Sultan102, Sundberg J rejected a submission that public interest criterion 4002 should not be construed so as to detract from the jurisdiction conferred on the AAT by s 500 of the Migration Act. His Honour rejected that contention on the basis that s 500 and public interest criterion 4002 deal with different matters103. In Kaddari v Minister for 97 [2002] 1 SCR 3 at 52 [90]. 98 [2002] 1 SCR 3 at 49 [86]. 99 [2002] 1 SCR 3 at 50 [87] 100 [2002] 1 SCR 3 at 51 [90]. 101 [2006] 1 NZLR 289 at 310 [45]. 102 (1998) 90 FCR 334. 103 (1998) 90 FCR 334 at 339. Immigration and Multicultural Affairs104, Tamberlin J, in the context of a challenge to the validity of public interest criterion 4002, expressed his agreement with that view105. In concluding that public interest criterion 4002 is valid, his Honour said106: "It cannot be said that the criterion attempts to add new and different means of carrying out the provisions of the Act or to depart from or vary an exclusive plan which the legislature has adopted." In VWOK v Minister for Immigration and Multicultural and Indigenous Affairs107, a case concerning the validity of a public interest criterion relating to conviction for an offence punishable by at least 12 months imprisonment, similar reasoning was applied by the Full Court of the Federal Court to uphold the validity of that criterion. Despite the support for the validity of public interest criterion 4002 which might be derived from the decisions of the Federal Court in Sultan and Kaddari, and analogical argument which might be derived from VWOK, the relationship between public interest criterion 4002 and the provisions of ss 500-503 of the Migration Act spells invalidating inconsistency. That is primarily because the condition sufficient to support the assessment referred to in public interest criterion 4002 subsumes the disentitling national security criteria in Art 32 and Art 33(2). It is wider in scope than those criteria and sets no threshold level of threat necessary to enliven its application. The public interest criterion requires the Minister to act upon an assessment which leaves no scope for the Minister to apply the power conferred by the Act to refuse the grant of a visa relying upon those Articles. It has the result that the effective decision-making power with respect to the disentitling condition which reposes in the Minister under the Act is shifted by cl 866.225 of the Regulations into the hands of ASIO. Further, and inconsistently with the scheme for merits review provided in s 500, no merits review is available in respect of an adverse security assessment under the ASIO Act made for the purposes of public interest criterion 4002. Public interest criterion 4002 therefore negates important elements of the statutory scheme relating to decisions concerning protection visas and the application of criteria derived from Arts 32 and 33(2). It is inconsistent with that scheme. In my opinion cl 866.225 of the Regulations is invalid to the extent that it prescribes public interest criterion 4002. 104 (2000) 98 FCR 597. 105 (2000) 98 FCR 597 at 601 [27]. 106 (2000) 98 FCR 597 at 602 [31]. 107 (2005) 147 FCR 135. Because public interest criterion 4002 is invalid, the refusal of the plaintiff's application for a protection visa was affected by jurisdictional error. As a result there has, at this time, been no valid decision on the plaintiff's application for a protection visa. While that application is pending, the plaintiff can lawfully be detained pursuant to s 196 of the Migration Act. It is not necessary, for present purposes, to determine whether his detention can lawfully be continued if his application for a protection visa is refused and there is no other country to which he can be removed. The procedural fairness question It may be accepted that the requirements of procedural fairness are attracted to the making of a security assessment under the ASIO Act. The content of those requirements is not necessarily to be answered solely by reference to the terms of the ASIO Act and the potential effect of an assessment upon the interests of the person about whom it is made. A security assessment may be used for a variety of purposes involving the exercise of different statutory powers. Such an assessment may be relied upon for more than one purpose under the Migration Act. The content of procedural fairness will depend upon the part played by the assessment in the exercise of the power in which it is considered and the nature of that power. Whether or not procedural fairness was accorded in this case depends upon the way in which the assessment is used and upon the decision ultimately made. The question remains hypothetical unless, and until, the assessment is used to support a decision adverse to the plaintiff, other than a decision involving the application of public interest criterion 4002. Conclusion I would amend Question 2A and answer the reserved questions in the terms proposed by Hayne J108. 108 Reasons of Hayne J at [227]. GUMMOW J. In R (European Roma Rights Centre) v Immigration Officer at Prague Airport109 Lord Bingham of Cornhill described110 the tension in domestic statute law which governs the administration of immigration control between, on the one hand, the powers of the sovereign state to admit, exclude and repel aliens, and, on the other hand, the humane practice, reflected in treaty obligations, to admit aliens, or some of them, seeking refuge from persecution elsewhere. His Lordship spoke of this tension with reference to a range of materials, including what had been said in this Court in Applicant A v Minister for Immigration and Ethnic Affairs111 and Minister for Immigration and Multicultural Affairs v Ibrahim112. The plaintiff in this action in the original jurisdiction of the Court was born in 1976 and is a national of Sri Lanka. He entered Australia at the Territory of Christmas Island on 29 December 2009. Whilst detained as an unlawful non- citizen he applied for a protection visa. A delegate of the Minister found that the plaintiff had a well-founded fear of persecution in Sri Lanka on the basis of his race, or political opinion attributed to him as a former member of the LTTE (Liberation Tigers of Tamil Eelam). There is no dispute that the plaintiff satisfies that criterion for a protection visa which is stated in s 36(2)(a) of the Migration Act 1958 (Cth) ("the Act"), namely a non-citizen in Australia to whom the Minister is satisfied Australia has protection obligations under the Convention. It also is accepted that the plaintiff has no present right to enter and remain in any country other than Sri Lanka. The first defendant ("the Director-General") controls the Australian Security Intelligence Organisation ("ASIO") pursuant to s 8(1) of the Australian Security Intelligence Organisation Act 1979 (Cth) ("the ASIO Act"). The tension of which Lord Bingham spoke is reflected in the structure of those provisions of the Act and the Migration Regulations 1994 (Cth) ("the Regulations") upon which turn the issues in the present action. Those issues are presented by the circumstance that, while the plaintiff is a non-citizen who is classified as a refugee, he is the subject of an adverse security assessment by ASIO. The 110 [2005] 2 AC 1 at 27-32. Lord Hope of Craighead, Baroness Hale of Richmond and Lord Carswell agreed with the reasons of Lord Bingham on this issue. 111 (1997) 190 CLR 225 at 247-248, 273-274; [1997] HCA 4. 112 (2000) 204 CLR 1 at 45-46 [137]-[138]; [2000] HCA 55. See also Minister for Immigration and Multicultural Affairs v Khawar (2002) 210 CLR 1 at 15-17 [41]- [48]; [2002] HCA 14; NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 169-171 [13]-[21]; [2005] HCA 6. absence of such an adverse assessment is a condition imposed by the Regulations upon the grant of a protection visa. The plaintiff seeks an order quashing, for want of procedural fairness, the adverse security assessment. Further, and in any event, he seeks an order absolute for habeas corpus against the second defendant (the Officer in Charge, Melbourne Immigration Transit Accommodation) and the third defendant (the Secretary, Department of Immigration and Citizenship), supported by a declaration that the detention of the plaintiff at that Melbourne facility is unlawful113. The Minister is the fourth defendant and the Commonwealth is the fifth defendant. Leave to intervene in support of the plaintiff was given first to the Australian Human Rights Commission and secondly to the plaintiff in another action pending in this Court whose circumstances resemble those of the present plaintiff. General considerations The Act was most recently amended by the Migration Legislation Amendment (Regional Processing and Other Measures) Act 2012 (Cth) but no issues respecting "regional processing" arise in this litigation. The object of the Act is stated in s 4. This (as s 3A) was inserted by s 3 of the Migration Reform Act 1992 (Cth) and reflects the changes in the Act described in Re Patterson; Ex parte Taylor114 whereby in its terms the Act was based no longer upon the immigration power (s 51(xxvii)) but upon the aliens power (s 51(xix)). Section 4(1) specifies the object of the Act as the regulation, in the national interest, of the coming into and presence in Australia of non-citizens. The national interest thus extends to the regulation of the continuing presence in Australia of non-citizens. To advance the object stated in s 4(1), provision is made in the Act for the removal and deportation from Australia of non-citizens whose presence in the country is not permitted by the Act (s 4(4)). Several points are to be made here, of significance for the issues in this case. The first is that the evident legislative design to base the Act upon the aliens power does not deny the support the legislation may receive in whole or 113 The plaintiff also seeks injunctive relief in respect of the continuation of his alleged unauthorised detention, but this would be unnecessary if habeas corpus were to issue. 114 (2001) 207 CLR 391 at 443 [156]; [2001] HCA 51. part from other heads of power115. A law dealing with the movement of persons between Australia and places physically external to Australia may be supported by the external affairs power (s 51(xxix)); this will be so independently of the implementation by that law of any treaty imposing obligations upon Australia respecting movement of non-citizens, and the power under that law to make delegated legislation, in turn, will take this character. So much follows from the joint reasons in De L v Director-General, NSW Department of Community Services116. Further, the decision in Thomas v Mowbray117 shows that the defence power (s 51(vi)) extends to that aspect of the national interest which concerns matters relating to national security. The upshot is that to conclude that in a particular operation the Act is not supported by one head of legislative power does not foreclose the operation of the Act on the strength supplied by other applicable heads of power. The issue is not one of legislative "intention", here as elsewhere a term apt to mislead, but of the engagement of a supporting head of power. In the present case, some submissions by the plaintiff appeared to assume that it was the degree of support for the Act which is supplied by the engagement of that aspect of the external affairs power concerned with treaties which was essential to or alone critical for the operations of the Act and the Regulations with which the plaintiff is concerned. Section 498 of the Act stipulates that powers conferred by or under the Act are to be exercised in accordance with any of the Regulations which are applicable. Section 504(1) requires that the Regulations not be "inconsistent with this Act". It should be noted immediately that the Act includes the object identified in s 4(1), which refers to "the national interest". Further, it is the strong term "inconsistent" in s 504(1) which controls the relationship between the statute and delegated legislation, not the need, if possible, to give an harmonious operation to a statute as a whole118. The plaintiff is detained as an unlawful non-citizen, in reliance upon s 196 of the Act, but disputes the continued application to him of that provision. This circumstance brings into play another principle of domestic law. Without judicial warrant, an officer of the Commonwealth who detains another person 115 Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 443-444 [157]. 116 (1996) 187 CLR 640 at 649-650; [1996] HCA 5. 117 (2007) 233 CLR 307; [2007] HCA 33. 118 cf Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 [70]; [1998] HCA 28. may do so only to the extent that this conduct "is justified by clear statutory mandate"119. The issues which arise are not answered simply by a response to a rhetorical question asking how the plaintiff may claim release from detention in the absence of a "legal right" to be present in this country. Putting to one side the position of enemy aliens, the plaintiff, although an alien, has access to the Australian legal system. He is protected by the common law of tort against detention by or under the authority of officers of the Commonwealth, who must have statutory warrant for their actions. The plaintiff challenges the presence of that statutory authority. Protection visas Section 65(1)(a) of the Act obliges the Minister to grant to a non-citizen a protection visa (among other categories of visa for which the Act provides) if it has been sought by a valid application and if any health criteria, and other criteria prescribed by the Act or the Regulations, have been satisfied, and the grant is not prevented by, among other provisions, s 501 of the Act. This section empowers the Minister to refuse a visa if satisfied that the refusal "is in the national interest" and if the Minister reasonably suspects the applicant does not pass the "character test". A person does not pass the "character test" if, among other criteria, there is "a significant risk" that the person would engage in criminal conduct in Australia, or "represent a danger to the Australian community or to a segment of that community" (s 501(6)). There is a class of visas to be known as protection visas. Section 36(1) of the Act so states. "A criterion" – not, it should be emphasised, "the criterion" – for the grant of such a visa is that the applicant is a non-citizen in Australia "to whom the Minister is satisfied Australia has protection obligations under the Refugees Convention as amended by the Refugees Protocol" ("the Convention") (s 36(2)(a)). The text and structure of the Act were held in Plaintiff M61/2010E v The Commonwealth120 to: "proceed on the footing that the Act provides power to respond to Australia's international obligations by granting a protection visa in an appropriate case and by not returning that person, directly or indirectly, to 119 Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 528; see also at 523, 547; [1987] HCA 12. 120 (2010) 243 CLR 319 at 339 [27]; [2010] HCA 41. See also Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 244 CLR 144 at 174-175 [44]; [2011] HCA 32. a country where he or she has a well-founded fear of persecution for a Convention reason". Sections 91R-91T of the Act explain what, for the purposes of the Act and the Regulations, is to be taken to be the meaning of certain expressions in Art 1 of the Convention, including "persecution" and "particular social group". Further, and significantly for the present litigation, s 31(3) is an express provision for the making of regulations. It provides for the prescription by the Regulations of criteria for visas of various classes, including that of protection visa. This power, however, is qualified by the requirement in s 504(1) that the Regulations not be "inconsistent with [the] Act". Further provisions with respect to the grant of protection visas are made in Subclass 866 of Sched 2 to the Regulations. The criteria of which the Minister is to be satisfied at the time of decision include health requirements (cll 866.223, 866.224, 866.224A, 866.224B), satisfaction that the grant "is in the national interest" (cl 866.226) and satisfaction of "public interest criteria" identified by the numbers 4001, 4002 and 4003A (cl 866.225). These three criteria are set out in Sched 4 to the Regulations. Each is expressed in negative terms. Item 4001 is concerned with the "character test", defined in s 501(6) of the Act. Item 4003A stipulates that the applicant not be determined by the Foreign Minister to be a person whose presence in Australia "may be directly or indirectly associated with the proliferation of weapons of mass destruction". It is the prescription of item 4002 which has been critical for the plaintiff. It requires that he not be assessed by ASIO to be directly or indirectly a risk to "security" within the meaning of the definition in s 4 of the ASIO Act. This so defines "security" as to include both the protection of the Commonwealth and its people from "politically motivated violence" and the carrying out of the "responsibilities" of Australia to any foreign country in relation to such violence. The expression "politically motivated violence" is defined in s 4 of the ASIO Act so as to encompass terrorism offences against the Criminal Code (Cth), and acts or threats of violence intended to achieve a political objective in Australia or elsewhere. The Convention Something more should be said here respecting certain provisions of the Convention. Article 1 is headed "DEFINITION OF THE TERM 'REFUGEE'" and comprises Sections A-F. Article 1A(2) sets out what often is spoken of as the criteria for a person such as the plaintiff to answer the description "refugee". Article 1C states six circumstances in which the Convention shall cease to apply to a person falling under Art 1A. Articles 1D, 1E and 1F specify circumstances in which the Convention "shall not apply" to certain persons. It will be necessary to refer later in these reasons to Art 1F. Article 32 is headed "EXPULSION". Article 32(1) reads: "The Contracting States shall not expel a refugee lawfully in their territory save on grounds of national security or public order." It thus applies to a refugee "lawfully" in the territory of a Contracting State. In R (ST) v Secretary of State for the Home Department 121 the United Kingdom Supreme Court construed "lawfully" as it appears in Art 32 as meaning "lawful according to the domestic laws of the contracting state". This construction should be accepted. The plaintiff has the status under the Act of an unlawful non-citizen in the absence, as described below, of a protection visa. He is not "lawfully" in Australia within the meaning of Art 32 and thus no question arises of whether, notwithstanding that status, he may, consistently with Art 32, be expelled on grounds of national security or public order. It should be added that the plaintiff is not a refugee sur place, as a result of his own actions whilst lawfully in Australia, for example, on another category of visa122. In such a case, Art 32 of the Convention could have had an application to the plaintiff. Article 33(1) obliges a Contracting State not to expel or return a refugee to the frontiers of territories where his life or freedom would be threatened on account of his race, religion, nationality, membership of a particular social group or political opinion. The benefit of Art 33(1) is denied by force of Art 33(2), if there are reasonable grounds for regarding the refugee "as a danger to the security of the country in which he is", or if the refugee, having been convicted by final judgment of "a particularly serious crime", is "a danger to the community" of that country. Section 91U of the Act gives detailed content to the expression "particularly serious crime" in Art 33(2); this is done by s 91U "[f]or the purposes of the application of [the] Act and the [R]egulations to a particular person". The present situation of the plaintiff On 9 May 2012, the Director-General issued an adverse security assessment with respect to the plaintiff. He was assessed to be directly or indirectly a risk to security within the meaning of s 4 of the ASIO Act. This assessment engaged, against the plaintiff, public interest criterion 4002. The result is that as matters stand, the plaintiff cannot be granted a protection visa because he does not satisfy that public interest criterion. The plaintiff remains an unlawful non-citizen. As an unlawful non-citizen, and as 121 [2012] 2 WLR 735 at 750; [2012] 3 All ER 1037 at 1054. 122 See Minister for Immigration and Citizenship v SZJGV (2009) 238 CLR 642 at 661-663 [40]-[45]; [2009] HCA 40. required by s 189 of the Act, he was detained after he landed at Christmas Island in 2009. Without the grant of a visa, the plaintiff remains the object of the obligation imposed by s 198 of the Act upon "an officer"123 to remove him from Australia "as soon as reasonably practicable". What is immediately in dispute in this action is the operation of the distinct but concomitant provision in s 196 respecting the duration of the immigration detention of the plaintiff which began with his detention under s 189. Does this continue indefinitely until such time, if ever, that an officer removes the plaintiff from Australia in performance of the duty imposed by s 198? The duty of removal carries with it, subject to any express qualification in the Act or the Regulations, the power of selection of the destination to be reached upon removal. However, it follows from determination by the Minister that the plaintiff is one to whom Australia owes protection obligations that it would not be a proper exercise of that power to return the plaintiff to Sri Lanka or to remove him to any other territory where his life or freedom would be threatened on account of his race or political opinion, within the meaning of Art 33(1) of the Convention. The Convention has not been enacted as a whole or directly into Australian law. But s 36(2)(a) of the Act does so expressly to the extent described in these reasons. That circumstance removes the power of selection which is appended to the duty to remove under s 195 from the application of the ordinary rule124 that unenacted international obligations are not mandatory relevant considerations in the exercise of statutory powers. There is, in any event, no threat by the Australian authorities to act otherwise than in accordance with Art 33(1). Their difficulty has been in locating any other country which will receive the plaintiff. It was said by Brennan, Deane and Dawson JJ in Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs125 that the involuntary detention of a citizen in custody by the State "is penal or punitive in character" and that it "exists only as an incident of the exclusively judicial function of adjudging and punishing criminal guilt". Their Honours also 123 The term "officer" is so defined in s 5(1) of the Act as to include any persons in a class authorised by the Minister as officers for the purposes of the Act. 124 Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 at 33-34 [101]-[102]; [2003] HCA 6. 125 (1992) 176 CLR 1 at 27; [1992] HCA 64. affirmed, with reference to the writings of Dicey, that punishment is to be for breach of the law and for nothing else126. Mason CJ spoke to similar effect127. Deportation by the executive under legislative authority had earlier been held not to partake of the character of punishment128. But as explained later in these reasons, under the heading "Conclusions", there is no deportation in prospect here. In the joint reasons in Lim their Honours considered that the power of detention conferred by the legislation as it then stood was, by reference to two particular considerations, "reasonably capable of being seen as necessary for the purposes of deportation". First, there was a specific time limit (in terms of days) upon the period of detention, and, secondly, it lay within the power of the detainee to bring the detention to an end by requesting removal to another country129. Mason CJ was of like opinion130. Neither consideration applies to the position of the plaintiff. The Act prescribes no finite period such as that considered in Lim. There is no country except that from which the plaintiff is a refugee which is willing to receive him. The plaintiff entered Australia as an "unlawful non-citizen" and because or by reason of this infringement by him of the Act, in the absence of a protection visa he was detained and remains in detention. Consistently with what was said in Lim131 with respect to Ch III of the Constitution, may that detention continue solely by legislative fiat into a period in which the detention cannot reasonably be seen as necessary for the purposes of his deportation? Counsel for the second intervener, in particular, submitted that the answer to that question should be in the negative. Consistently with Ch III of the Constitution, may a different answer be given solely on the ground that the unlawful non-citizen in question has an adverse security assessment? No party submitted that detention in such circumstances may be warranted other than as an incident to judicial adjudication and punishment of criminal guilt. 126 (1992) 176 CLR 1 at 27-28. 127 (1992) 176 CLR 1 at 11-12. 128 Chu Shao Hung v The Queen (1953) 87 CLR 575 at 585, 589; [1953] HCA 33. 129 (1992) 176 CLR 1 at 33-34. 130 (1992) 176 CLR 1 at 11-12. 131 cf Al-Kateb v Godwin (2004) 219 CLR 562 at 585 [47], 658-659 [290]; [2004] HCA 37. But does s 196, upon its proper construction, present any such issues? In particular, for the reasons to be given under the heading "The issue of statutory construction" the question which the second intervener would answer in the negative does not arise in the present case. The questions reserved There are five questions reserved to the Full Court on a Further Amended Special Case dated 20 June 2012 ("the Special Case"). Question 2A asks whether the prescription of public interest criterion 4002 in its application to the plaintiff is ultra vires the regulation making power conferred by s 31(3) of the Act. Question 1 concerns the alleged failure by the Director-General to comply with the requirements of procedural fairness, question 2 the operation of s 198 of the Act, question 3 the authority for the detention of the plaintiff and question 4 the costs of the Special Case. Habeas corpus Three points may be made immediately respecting the remedy of habeas corpus sought by the plaintiff to secure his release from what is said to be unauthorised detention. The first is that, subject to any relevant statutory procedures, there is applicable in Australia the proposition, recently affirmed by the Supreme Court of the United States132, that habeas corpus is available to every individual detained in this country without legal justification133. Secondly, it has long been settled134 that in a matter in which the Court is seized of original jurisdiction, the powers of the Court include the power conferred by s 33(1)(f) of the Judiciary Act 1903 (Cth) to direct the issue of a writ of habeas corpus. Thirdly, there may be attached to the writ conditions to be observed upon release, analogous to those attending release upon the provision of bail. Indeed, it was explained by the South Australian Full Court in Tobin v Minister for Correctional Services135 and by the Supreme Court of New Zealand in Zaoui v Attorney-General136, in each case with reference to historical material137, that 132 Hamdi v Rumsfeld 542 US 507 at 525 (2004); cf Ruddock v Vadarlis (2001) 110 FCR 491 at 521. 133 Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 520-522. 134 Jerger v Pearce (1920) 28 CLR 588 at 590; [1920] HCA 42. Habeas corpus was sought by the plaintiff, an alien, who was in detention pending his deportation. See also Re Officer in Charge of Cells, ACT Supreme Court; Ex parte Eastman (1994) 68 ALJR 668; 123 ALR 478; [1994] HCA 36. 135 (1980) 24 SASR 389 at 391-392. 136 [2005] 1 NZLR 577 at 643-646. before the development of modern curial procedures for bail, habeas corpus was the principal method for the seeking of bail138. As Gleeson CJ indicated in Al-Kateb v Godwin139, with particular reference to United States authority, a discharge upon habeas corpus from immigration detention may be made upon terms and conditions. The issue of statutory construction Part 2 (ss 13-274) of the Act is headed "Control of arrival and presence of non-citizens". Something first should be said respecting Div 9 (ss 200-206). This is headed "Deportation". Section 202(1) empowers the Minister to order under s 200 the deportation of certain non-citizens upon security grounds where the Minister has been furnished by ASIO with an adverse security assessment made for the purposes of s 202(1). Where the Minister has made a deportation order under s 200, then s 206 requires that the person shall be deported accordingly. There is no threat of deportation of the plaintiff in reliance upon the powers in Div 9 of the Act. Of these deportation provisions in an earlier incarnation in the Act, this Court held in Znaty v Minister for Immigration140 that the legislation disclosed the intention "that the authorities may select a place to which the deportee is to go and may then take steps designed to produce the result that he goes to that place". However, it later was emphasised that these powers may not be used to effect a collateral purpose such as an irregular extradition 141. 137 See also Sayre v The Earl of Rochford (1777) 2 Black W 1165 at 1166 [96 ER 687 at 687]; the remarks of the New South Wales Full Court in Ex parte Nicholls (1845) Reserved and Equity Judgments of New South Wales 11 at 12; Clark, "Procedure vs Substance: Habeas Corpus Reform in New Zealand", (2009) 12 Otago Law Review 77 at 101-102; Sharpe, The Law of Habeas Corpus, 2nd ed (1989) at 134. In Ex parte Hill (1827) 3 C & P 225 [172 ER 397] Littledale J refused to attach a condition to the rule for habeas corpus that the prisoner be restrained from bringing any action for false imprisonment. 138 cf United Mexican States v Cabal (2001) 209 CLR 165 at 182-183 [44]; [2001] HCA 60. 139 (2004) 219 CLR 562 at 579-580 [27]. 140 (1972) 126 CLR 1 at 9 per Walsh J; [1972] HCA 14. 141 Barton v The Commonwealth (1974) 131 CLR 477 at 483-484, 503-504; [1974] HCA 20; Schlieske v Minister for Immigration and Ethnic Affairs (1988) 84 ALR 719 at 729-731. It is Pt 2 Div 7 (ss 188-197AG) which is material. Division 7 is headed "Detention of unlawful non-citizens" and subdiv A (ss 188-197) is headed "General provisions" while subdiv B (ss 197AA-197AG) deals with what are called "Residence determinations", whereby the Minister may determine that a detainee may reside at a specific place "as if" this were detention under s 189. These residence determination provisions were added by the Migration Amendment (Detention Arrangements) Act 2005 (Cth). The operation upon the plaintiff of the terms of ss 189, 196 and 198 of the Act may be succinctly restated. As an "unlawful non-citizen" he was required to be taken into immigration detention. He must be removed from Australia as soon as reasonably practicable and "until" that removal or deportation or grant of a visa he must be kept in "immigration detention". Among other places, this may be in a "detention centre" established under the Act or in a federal, State or Territory prison or remand centre (s 5(1)). If the Minister makes a "residence determination" under s 197AB the unlawful non-citizen with the benefit of this arrangement will be deemed still to be in immigration detention under s 189. No such determination has been made in respect of the plaintiff. The effect of the construction given to the Act, as it then stood, by the majority in Al-Kateb142 appears to have been to read the word "until" in s 196 as if it were "unless". The immigration detention required by the Act would continue indefinitely and for the term of the natural life of the detainee unless there occurred either the earlier removal of the detainee from Australia by way of deportation or the grant of a visa. It may be accepted that had the legislation been framed in these express terms then the result reached in Al-Kateb would have been the product of language which was "clear" and "unambiguous" and "intractable"143. Whether, if so, the legislation would survive an attack on its validity then would be another question, as indicated earlier in these reasons with reference to what was said in Lim144. But the Act does not provide in terms that an unlawful non-citizen is to be kept in immigration detention permanently or indefinitely. The Parliament has not squarely confronted what then becomes the primary issue of statutory construction in this case. Rather, the use in s 196 of the term "until" assumes the possibility of compliance with the requirement imposed by s 198 of removal as soon as reasonably practicable. The legislation then is susceptible of two 142 (2004) 219 CLR 562. 143 (2004) 219 CLR 562 at 581 [33], 643 [241], 661 [298]. 144 (1992) 176 CLR 1 at 11-12, 33-34. interpretations to meet the situation where there is no practical possibility of meeting that requirement of removal. These competing interpretations were identified by Gleeson CJ in his dissenting reasons in Al-Kateb145. The first interpretation is that, if it never becomes practicable to remove the detainee, the detainee must spend the remainder of his or her life in detention. The second is that if removal ceases to be a practical possibility, the detention must cease, at least for as long as that situation continues. That is to say, the duty of removal imposed upon an officer by s 198 may continue to subsist, although it is not at present practically available, without the continuing necessity of detention of the unlawful non- citizen. The first of the two constructions considered by Gleeson CJ does not appear with the "irresistible clearness" required by the authorities beginning with Potter v Minahan146 and continuing with Australian Crime Commission v Stoddart147. Care is required in resolving the issue of statutory construction that is presented here by the invocation of legislative "intention". It has become better understood than it was when McHugh J, in Al-Kateb148, used the term "intention" and cognate expressions, that they are indicative of the constitutional relationship between the arms of government respecting the making, interpretation and application of laws149. Further, two members of the majority in Al-Kateb, McHugh J and Callinan J, did not refer to what was then and has remained the doctrine of the Court which provides strongest guidance in resolving the issue of construction presented by the interaction between ss 189, 196 and 198 of the Act. This has been stated as follows in the joint reasons in Coco v The Queen150: 145 (2004) 219 CLR 562 at 575 [14]. 146 (1908) 7 CLR 277 at 304; [1908] HCA 63. 147 (2011) 244 CLR 554 at 622 [182]; [2011] HCA 47. 148 (2004) 219 CLR 562 at 581 [33]. 149 Zheng v Cai (2009) 239 CLR 446 at 455-456 [28]; [2009] HCA 52; Dickson v The Queen (2010) 241 CLR 491 at 506-507 [32]; [2010] HCA 30; Momcilovic v The Queen (2011) 85 ALJR 957 at 984-985 [38]-[42], 1009 [146]; 280 ALR 211 at 239-241, 274; [2011] HCA 34. 150 (1994) 179 CLR 427 at 437 per Mason CJ, Brennan, Gaudron and McHugh JJ; [1994] HCA 15. "The insistence on express authorization of an abrogation or curtailment of a fundamental right, freedom or immunity must be understood as a requirement for some manifestation or indication that the legislature has not only directed its attention to the question of the abrogation or curtailment of such basic rights, freedoms or immunities but has also determined upon abrogation or curtailment of them. The courts should not impute to the legislature an intention to interfere with fundamental rights. Such an intention must be clearly manifested by unmistakable and unambiguous language. General words will rarely be sufficient for that purpose if they do not specifically deal with the question because, in the context in which they appear, they will often be ambiguous on the aspect of interference with fundamental rights." (footnote omitted) Further authorities adopting that passage recently were collected in Lacey v Attorney-General (Qld)151. The justification for not following an earlier decision of the Court construing a statute, particularly a decision reached by a majority, is that the earlier decision appears to have erred in a significant respect in the applicable principles of statutory construction152. It is the second construction identified by Gleeson CJ in Al-Kateb which better accommodates the basic right of personal liberty. The contrary construction adopted by the majority in that case should not be regarded as a precedent which in the present case forecloses further consideration of the matter. Before returning to the construction of ss 189, 196 and 198 of the Act, attention should be given to two other issues, either of which, if decided favourably to the plaintiff, would be sufficient to obviate the necessity to deal with the larger issue of statutory construction. These concern the validity of the prescription of public interest criterion 4002 and the alleged denial of procedural fairness. On neither of these issues should the plaintiff succeed. The validity of the prescription of public interest criterion 4002 – inconsistency The first issue concerns the validity of the prescription of public interest criterion 4002 in its application to an applicant for a protection visa such as the plaintiff. In effect, the plaintiff submits that, first, additional criteria applicable to the grant of a protection visa, beyond satisfaction by the Minister of the existence 151 (2011) 242 CLR 573 at 582 [17]; [2011] HCA 10. To these authorities may be added Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 492 [30]; [2003] HCA 2. 152 See John v Federal Commissioner of Taxation (1989) 166 CLR 417 at 439-440; [1989] HCA 5. of protection obligations under the Convention as provided in s 36(2) of the Act, will be "inconsistent" with the Act within the meaning of s 504(1) and thus invalid, if those additional criteria "undermine or negate the terms or scheme of the Act, or constraints imposed on states by the Convention". Secondly, the plaintiff points to the definition of "security" in s 4 of the ASIO Act (adopted in public interest criterion 4002) and to the acceptance by the defendants in oral argument that this is more widely expressed than the terms of Arts 32 and 33(2) of the Convention. Thirdly, the plaintiff submits that these Articles along with Art 1F are "picked up" by the medium of provisions including s 500(1)(c) of the Act as grounds for refusal to grant, or for the cancellation of, a protection visa. Finally, it is submitted that because these grounds of refusal are narrower in application than public interest criterion 4002, this criterion is "inconsistent" with s 500(1)(c) and so its prescription is ultra vires to that extent. The result then is said to be that there is no bar to the grant to the plaintiff of a protection visa. For the reasons which follow these submissions should not be accepted. First, the plaintiff's submissions misconceive the extent to which the Convention is drawn by the Act into domestic law. The scheme of the Act does not provide for the enactment of the various obligations respecting domestic status and entitlement which are found in the Convention153. Rather, s 36(2) fixes upon the definition in Art 1A as a criterion for the operation of the visa protection system154. However, the phrase in s 36(2), "to whom Australia has protection obligations under [the Convention]", embraces and requires consideration of the whole of Art 1 of the Convention, not just the term "refugee" in Art 1A. It followed that the circumstance that Australia might not breach its international obligation under Art 33(1) by sending to Israel the appellants in NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs did not deny the existence of protection obligations owed to them under s 36(2)(a) of the Act155. Article 1F excludes from the application of the Convention any person with respect to whom there are "serious reasons" for considering that this person has committed a crime against peace or against humanity or a war crime (par (a)), or "a serious non-political crime outside the country of refuge prior to his admission to that country as a refugee" (par (b)), or "has been guilty of acts contrary to the purposes and principles of the United Nations" (par (c)). 153 Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 244 CLR 144 at 225-226 [217]-[218]. 154 Minister for Immigration and Multicultural Affairs v Khawar (2002) 210 CLR 1 155 (2005) 222 CLR 161 at 173 [29], 176-178 [42]-[53]. Section 91T of the Act specifies a particular meaning to be given for the purposes of the Act and the Regulations to the expression "non-political crime" in par (b) of Art 1F; it also should be noted that the acts, practices and methods of terrorism, and its planning, financing and preparation, repeatedly have been declared by the General Assembly and Security Council to be contrary to the purposes and principles of the United Nations156. However, it is not contended that Art 1F applies to the plaintiff, and, as noted above, the plaintiff has been found to be a person to whom Australia has protection obligations. It also should be accepted that notwithstanding the range of acts contrary to the purposes and principles of the United Nations, public interest criterion 4002 has a broader scope because of the wide definition of "security" in s 4 of the ASIO Act. To found his argument of inconsistency between the Act and public interest criterion 4002, the plaintiff contends that the provisions in Art 32(1) respecting expulsion on "grounds of national security or public order" and in Art 33(2) respecting danger to the security of the country of refuge have statutory force. This is said to be the effect of the provision in s 500(1)(c) that the Administrative Appeals Tribunal may review a decision "to refuse to grant a protection visa, or to cancel a protection visa, relying on one or more of ... Article 1F, 32 or 33(2) [of the Convention]", and of the provision in s 500(4)(c) to the effect that these decisions are not reviewable by the Migration Review Tribunal or the Refugee Review Tribunal. Further, s 503(1)(c) denies to persons the subject of such a refusal or cancellation any entitlement to enter Australia or be present at any time during the period determined by the Regulations. Finally, s 502 empowers the Minister, acting personally, and in deciding to refuse to grant or to cancel a protection visa by reliance on any one or more of Arts 1F, 32 or 33(2), to declare the person in question to be "an excluded person" and to include a certificate to that effect. It will be observed that refusal and cancellation are treated together in these provisions. Something more should be said of the power of cancellation. Section 116 of the Act confers upon the Minister power to cancel a visa if satisfied that "any circumstances which permitted the grant of the visa no longer exist" (sub-s (1)(a)), the presence in Australia of the visa holder is a risk to the health, safety or good order of Australia (sub-s (1)(e)), or a prescribed ground for cancellation applies (sub-s (1)(g)). One prescribed ground (reg 2.43(1)(b)) is an adverse security assessment by ASIO. 156 Symes and Jorro, Asylum Law and Practice, 2nd ed (2010) at [8.27]. Further, in the case of the cancellation of a protection visa, in exercise of the power conferred by s 116(1)(a), the "circumstances" which permitted the grant of the visa but "no longer exist" could include circumstances which engaged Art 1 of the Convention and so supplied the criterion in s 36(2) of the Act with respect to the existence of protection obligations under the Convention. The joint reasons in NAGV157, after referring to the references to Arts 32 and 33(2), in addition to Art 1F, in the sections of the Act referred to above in the statement of the plaintiff's submissions, continued: "The special provisions made in Arts 32 and 33(2) with respect to expulsion 'on grounds of national security or public order' (Art 32) and to those who are a danger to security (Art 33(2)) attract comparison with the terms used in Art 1F to identify those to whom the Convention 'shall not apply'. The reference to Arts 32 and 33(2) may have been included by the legislation identified above for more abundant caution or as epexegetical of Art 1F in its adoption by the Act, with operation both at the time of grant and later cancellation of protection visas." The construction of Art 1F may require attention to the text, scope and purpose of the Convention as a whole158. Further, Professor Gilbert writes that the relationship between Art 1F and Art 33(2) is confused in state practice, and that this is so although Art 1F excludes applicants from refugee status while Art 33(2) applies to those who would otherwise benefit from the non-refoulement protection of Art 33(1)159. It is unnecessary to pursue any further the place of Arts 32 and 33(2) in the scheme of the Act. This is because the point the plaintiff seeks to make good respecting "inconsistency" and thus invalidity is sufficiently founded in Art 1F. Article 1F has an immediate effect upon the existence of protection obligations engaging s 36(2) of the Act, and thus upon the grant (and cancellation) of protection visas. 157 (2005) 222 CLR 161 at 179 [56]-[57]. 158 Minister for Immigration and Multicultural Affairs v Khawar (2002) 210 CLR 1 159 Gilbert, "Current issues in the application of the exclusion clauses", in Feller, Türk and Nicholson (eds), Refugee Protection in International Law, (2003) 425 Of a provision160 relevantly indistinguishable from s 504(1) of the Act, in Morton v Union Steamship Co of New Zealand Ltd161 this Court said: "The ambit of [the regulation making] power must be ascertained by the character of the statute and the nature of the provisions it contains. An important consideration is the degree to which the legislature has disclosed an intention of dealing with the subject with which the statute is concerned." The character of the Act, as indicated by s 4, includes the regulation, in the national interest, of the presence in Australia of aliens. The pursuit of that object is supported by heads of power including, but not with mutual exclusion, the aliens power, the external affairs power and the defence power. The reference in Morton to "intention" is to be understood to pose the question whether upon its true construction the statute deals completely and thus exclusively with the subject matter of the regulation in question with the consequence that the regulation detracts from or impairs that operation of the statute162. The subject matter of public interest criterion 4002, by reference to the definition of "security" in s 4 of the ASIO Act163, includes the protection of the Commonwealth and its people from "politically motivated violence". It also includes the carrying out of the "responsibilities" of Australia to any foreign country in relation to such violence; these responsibilities of the executive branch may arise from customary international law, treaties or statute, such as the Diplomatic Privileges and Immunities Act 1967 (Cth)164. 160 Section 164 of the Excise Act 1901 (Cth). 161 (1951) 83 CLR 402 at 410; [1951] HCA 42. See also Harrington v Lowe (1996) 190 CLR 311 at 324-325; [1996] HCA 8; Minister for Foreign Affairs and Trade v Magno (1992) 37 FCR 298 at 328-329. 162 cf Momcilovic v The Queen (2011) 85 ALJR 957 at 1028-1029 [261]; 280 ALR 221 at 300. 163 See [93]. 164 See Minister for Foreign Affairs and Trade v Magno (1992) 37 FCR 298 It is plain from the terms of the section that s 36(2) of the Act does not purport to cover "completely and exclusively" 165 the criteria for the grant of a protection visa. Section 31(3) explicitly provides for the prescription by the Regulations of other criteria. It follows that an applicant to whom the Minister is satisfied Australia has protection obligations under the Convention yet may fail to qualify for a protection visa. An applicant to whom the disqualifying provisions of Art 1F do not apply nevertheless may have to meet criteria specified in the Regulations. The assessment of the plaintiff relevantly required by the Regulations is by Australia's specialised security intelligence agency. The role given to it by the Regulations is a manifestation of the national interest identified in s 4(1) of the Act, being the interest of a sovereign state to scrutinise those aliens seeking admission, even if they be persons to whom protection obligations are owed. The provisions in the Act dealing with the "character test", described above166, are another example of the balance the legislature has sought to strike between the two interests identified by Lord Bingham of Cornhill in the passage referred to in the opening paragraph of these reasons. Provisions in the Convention which are restrictive of the return and expulsion (Arts 32, 33) are qualified so as to deny protection from such return or expulsion upon security grounds of the state of refuge. But these provisions deal with a different subject matter. They do not deal with the criteria for the existence of refugee status. Article 1F does so. But it would be a large step to read the power of prescription of criteria conferred by s 31(3) of the Act as foreclosed by the place of Art 1F in the operation of the criterion for protection obligations which is found in s 36(2) of the Act. For the reasons given above, and for those stated by Bell J, that step should not be taken. There is no "inconsistency" within the meaning of s 504(1) of the Act. The prescription of public interest criterion 4002 is valid in its application to the plaintiff. Procedural fairness In Plaintiff S157/2002 v The Commonwealth167 Gleeson CJ remarked: "Decision-makers, judicial or administrative, may be found to have acted unfairly even though their good faith is not in question. People whose 165 Cullis v Ahern (1914) 18 CLR 540 at 543; [1914] HCA 59; Clyde Engineering Co Ltd v Cowburn (1926) 37 CLR 466 at 489-490; [1926] HCA 6; Leeming, Resolving Conflicts of Laws, (2011), §3.8. 167 (2003) 211 CLR 476 at 494 [37]. fundamental rights are at stake are ordinarily entitled to expect more than good faith. They are ordinarily entitled to expect fairness." The Director-General does not dispute that general proposition as applicable to the security assessment of the plaintiff issued 9 May 2012. But he relies upon the further point emphasised by Gleeson CJ in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam168: "Fairness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice." Further, the procedure for the security assessment was inquisitorial rather than adversarial as that term is understood in a court of law hearing a prosecution169. For the reasons which follow the plaintiff suffered no denial of procedural fairness in the conduct of the security assessment issued 9 May 2012. The Director-General provided to this Court evidence on affidavit. His security assessment was not based on any information about the plaintiff which had been received from other irregular maritime arrivals or detainees. Basing himself upon investigations which were made by ASIO the Director-General assessed that the plaintiff: "a. was a voluntary and active member of the Liberation Tigers of Tamil Eelam (LTTE) Intelligence Wing from 1996-1999, with responsibilities identifying Sri Lankan Army collaborators, which he was aware likely led to extrajudicial killings, and maintained further intelligence involvement activities on behalf of the LTTE from 1999-2006; including deliberately withheld information regarding his activities of security concern and provided mendacious information throughout the security assessment process in order to conceal such activities; and remains supportive of the LTTE and its use of violence to achieve its political objectives, and will likely continue to support LTTE activities of security concern in and from Australia." 168 (2003) 214 CLR 1 at 14 [37]. 169 See Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at 115 [76]; [2000] HCA 57. The security assessment process referred to in (b) included an interview of the plaintiff (in the company of his legal adviser and a translator) by three ASIO officers. This commenced at 9.30am and concluded at 2.35pm. The transcript of what was said at the interview is a confidential attachment to the Special Case. It comprises 50 pages. There were breaks noted at page 17, page 28 (between 12 noon and 12.15pm), and page 38 (between 1.15pm and 1.40pm), during which the plaintiff was free to consult privately his legal adviser. The transcript shows that the plaintiff was provided with the opportunity to provide information with respect to the matters which later fell within par (a) of the assessment by the Director-General. It also was put to the plaintiff on at least six occasions in the interview that he was changing his story, giving an incomplete account in important respects, and failing to explain discrepancies in various accounts he had given. The plaintiff was invited to respond to two specific inconsistencies in what he had said at the interview, was told that certain explanations could not be accepted, and shortly before the noon break was informed that at that stage his honesty in giving his answers was "not looking great". There was no denial of procedural fairness. Conclusions There remains the issue of construction outlined earlier in these reasons170. As foreshadowed there, in my view the construction of s 198 which was preferred by Gleeson CJ in Al-Kateb should be accepted. In the joint reasons in Plaintiff M70/2011 v Minister for Immigration and Citizenship171 their Honours observed that: "Australia's power to remove non-citizens from its territory is confined by the practical necessity to find a state that will receive the person who is to be removed." The difficulties which attend that practical necessity have caused the continued detention of the plaintiff. The Special Case details efforts by the third and fourth defendants between August 2011 and May 2012 to arrange resettlement in third countries of persons who had entered Australia and had been found to be refugees but who also were the subject of adverse security assessments. There were negative 171 (2011) 244 CLR 144 at 190 [92]. responses from four countries and responses from four more countries remained outstanding. An officer of the Department of Immigration and Citizenship intended to raise the resettlement of refugees in the position of the plaintiff with counterparts from some additional countries on the margins of a meeting at Geneva in July 2012 of the Annual Tripartite Consultations on Resettlement. This is a case where the requirement of removal as a matter of present practicability cannot be fulfilled for reasons unrelated to any shortcomings on the part of the detaining authority. For the reasons given by Gleeson CJ in Al-Kateb172, the invalidation of the assumption of the availability of removal under s 198 suspends but does not permanently displace the obligation of detention imposed by s 196. There then arises the nature of the relief which may be given a person in the position of the plaintiff. As indicated earlier in these reasons under the heading "Habeas corpus", it is consistent with the nature of that remedy that the order be made upon terms and conditions effecting the release of the plaintiff. The terms and conditions of that release would be a matter for the Justice disposing of the matter in this Court, or, if a remitter was made to another court, upon that remitter. Orders The questions in the Special Case should be answered as follows: In furnishing the 2012 assessment, did the First Defendant fail to comply with the requirements of procedural fairness? Does s 198 of the Migration Act 1958 (Cth) authorise the removal of the Plaintiff, being a non-citizen: to whom Australia owes protection obligations under the Refugees Convention as amended by the Refugees Protocol; and 2.2 whom ASIO has assessed poses a direct or indirect risk to security; to a country where he does not have a well-founded fear of persecution for the purposes of Article 1A of the Refugees Convention as amended by the Refugees Protocol? 172 (2004) 219 CLR 562 at 578 [22]. Yes. If the answer to question 2 is "Yes" by reason of the plaintiff's failure to satisfy public interest criterion 4002 within the meaning of clause 866.225 of Schedule 2 of the Migration Regulations 1994, is that clause to that extent ultra vires the power conferred by section 31(3) of the Migration Act 1958 (Cth) and invalid? Do ss 189 and 196 of the Migration Act 1958 (Cth) authorise the Plaintiff's detention? The continued detention of the plaintiff is not presently authorised. 4. Who should pay the costs of the special case? The defendants. Hayne 151 HAYNE J. The plaintiff is a Sri Lankan national. In October 2009, he, with others, started a journey by boat from Indonesia to Australia. An Australian Customs vessel intercepted the boat and the plaintiff and others were taken by it to Indonesia. In December 2009, the plaintiff was granted a special purpose visa that lasted long enough for him to be brought from Indonesia to the Territory of Christmas Island. Within an hour of the plaintiff landing in that Territory, the visa expired, and he was detained by an officer relying on s 189(3)173 of the Migration Act 1958 (Cth) ("the Act"). While in immigration detention the plaintiff applied for a protection visa. A delegate of the fourth defendant, the Minister for Immigration and Citizenship ("the Minister"), found, as the United Nations High Commissioner for Refugees had earlier found, that there is a real chance that the plaintiff would be persecuted on account of his race and political opinions if he were returned to Sri Lanka. The delegate said: "[The plaintiff] has a well-founded fear of persecution from the Sri Lankan Government and/or paramilitary groups in Sri Lanka and or Tamil separatist groups on the basis of his race and political opinion. This political opinion is attributed to him by the agents of persecution because he is a former member of the LTTE [the Liberation Tigers of Tamil Eelam]. The well-founded fear from Tamil separatist groups can be attributed to the [plaintiff's] refusal to rejoin the LTTE. Country information indicates that former LTTE supporters or members are targeted by the Sri Lankan Government and or paramilitary groups in Sri Lanka. The [plaintiff] may be identified because of his ethnicity and because of his profile as a former member of the LTTE. If identified the [plaintiff] risks persecution by way of abduction, torture or death." (emphasis added) The finding that the plaintiff is a refugee within the meaning of Art 1A of the Refugees Convention174 is not disputed in these proceedings. 173 Section 189(3) provides that: "If an officer knows or reasonably suspects that a person in an excised offshore place is an unlawful non-citizen, the officer may detain the person." The Territory of Christmas Island is an "excised offshore place" as defined in s 5(1). Because the plaintiff did not hold a visa that was in effect, he was an "unlawful non-citizen" as defined in s 14. 174 The Convention relating to the Status of Refugees done at Geneva on 28 July 1951, as amended by the Protocol relating to the Status of Refugees done at New York on 31 January 1967 (together "the Convention"). Hayne Notwithstanding this finding that the plaintiff is a refugee, the Minister's delegate refused175 to grant the plaintiff a protection visa. The delegate found that the plaintiff did not satisfy all of the criteria for the grant of a protection visa that are prescribed176 by the Act and the Migration Regulations 1994 (Cth) ("the Regulations"). In particular, the delegate found that the plaintiff did not satisfy public interest criterion 4002177 ("PIC 4002") because, in 2009, before the delegate made her decision, the Australian Security Intelligence Organisation ("ASIO") had provided to the Department of Immigration and Citizenship a security assessment which assessed the plaintiff to be directly or indirectly a risk to security within the meaning of s 4 of the Australian Security Intelligence Organisation Act 1979 (Cth) ("the ASIO Act"). The text of the relevant part of s 4 of the ASIO Act is set out later in these reasons. The plaintiff sought review of the delegate's decision by the Refugee Review Tribunal but the Tribunal also found that the plaintiff did not satisfy PIC 4002. The Tribunal therefore affirmed the delegate's decision to refuse to grant the plaintiff a protection visa. The plaintiff brought proceedings in the Federal Court of Australia challenging the validity of ASIO's assessment. He alleged that he had not been accorded procedural fairness because he had been given no opportunity to say anything about whether an adverse assessment should be made and because he had not been told why an adverse security assessment had been made. The proceedings were settled before they were heard. It was agreed that a new security assessment would be made. In November 2011, the plaintiff was interviewed by ASIO officers in the presence of his lawyer. In May 2012, ASIO provided a new security assessment to the Department of Immigration and Citizenship. The new assessment said again that ASIO assessed the plaintiff to be directly or indirectly a risk to security within the meaning of s 4 of the ASIO Act. 175 s 65(1)(b). 176 s 65(1)(a)(ii). 177 Sched 2, cl 866.225(a) of the Regulations provides, so far as presently relevant, that PIC 4002 is a criterion for the grant of a protection visa. PIC 4002 (set out in Sched 4, item 4002) provides: "The applicant is not assessed by the Australian Security Intelligence Organisation to be directly or indirectly a risk to security, within the meaning of section 4 of the Australian Security Intelligence Organisation Act 1979." The present proceedings Hayne Immigration and Citizenship, The plaintiff commenced proceedings in the original jurisdiction of this Court, naming as defendants the Director-General of Security ("the Director"), the Officer in Charge of the Melbourne Immigration Transit Accommodation (where the plaintiff is being held in immigration detention), the Secretary of the the Department of Commonwealth. The plaintiff and the defendants agreed in stating, in the form of a special case for the opinion of a Full Court, questions of law that were said to arise in the matter. The plaintiff in another proceeding pending in this Court, Plaintiff S138/2012, sought, and was granted, leave to intervene in the hearing of the special case on the basis that his proceedings raise generally similar issues to those that fall for consideration in these. The Australian Human Rights Commission sought, and was granted, leave to intervene178 in support of the plaintiff. The Attorney-General for the State of New South Wales intervened in support of the Commonwealth. the Minister and Initially, the plaintiff advanced two principal arguments. He challenged the validity of the 2012 security assessment on the basis that it was made without according him procedural fairness. If that challenge failed, he submitted that, having been found to be a refugee, he cannot lawfully be removed from Australia, and that his continued detention is therefore not lawful. In the course of oral argument, the plaintiff sought, and was granted, leave to amend his originating process to raise, for the first time, a challenge to the validity of prescribing PIC 4002 as a criterion for the grant of a protection visa. The plaintiff submitted that the power conferred by s 31(3) of the Act to prescribe criteria for a visa of the class provided by s 36 (protection visas) does not authorise the prescription of PIC 4002. The parties agreed upon a consequential amendment to the special case and the addition of a question of law asking about the validity of the prescription of PIC 4002 as a criterion for a protection visa. These reasons will show that the prescription of PIC 4002 as a criterion for the grant of a protection visa is not authorised by s 31(3) of the Act and is invalid. The decisions by the Minister's delegate to refuse to grant the plaintiff a protection visa and by the Refugee Review Tribunal to affirm that refusal depended upon application of this criterion and were therefore attended by jurisdictional error. The plaintiff accepted that it followed that his application for a protection visa had not been finally determined and that his detention for the purposes of the determination of the application was lawful. The questions about the validity of the security assessment provided by ASIO in 2012 and about the lawfulness of the plaintiff being detained for the purposes of his removal from Australia need not be examined. 178 Australian Human Rights Commission Act 1986 (Cth), s 11(1)(o). Hayne The questions of law that have been stated by the parties should be answered accordingly. What relief the plaintiff should have will be a matter to be determined by a single Justice. The validity of prescribing PIC 4002 – a question of statutory construction The plaintiff submitted that to prescribe PIC 4002 as a criterion for the grant of a protection visa, as the Regulations do179, goes beyond the power to prescribe visa criteria given by s 31(3) of the Act. Section 31(3) provides that: "The regulations may prescribe criteria for a visa or visas of a specified class (which, without limiting the generality of this subsection, may be a class provided for by section 32, 36, 37, 37A or 38B but not by section 33, 34, 35, 38 or 38A)." Section 31(3) contains no express limitation upon the power it gives to prescribe "criteria for a visa or visas of a specified class". But s 504(1) expressly provides that regulations "which by this Act are required or permitted to be prescribed" must not be "inconsistent" with the Act. This explicitly recognises the fundamental proposition that the meaning of any statutory provision (here the regulation making power given by s 31(3)), and thus its range of operation, must be determined "by reference to the language of the instrument viewed as a whole"180. The Act refers181 to, and provides182 for special rights of review in respect of, decisions to refuse to grant or to cancel a protection visa "relying on one or more of the following Articles of the Refugees Convention, namely, Article 1F, 32 or 33(2)". The plaintiff submitted that it follows that the Act, read as a whole, does not authorise the prescription of a criterion for a visa of the class provided for by s 36 (protection visas) which, on the one hand, would preclude the grant of a protection visa to a refugee on grounds of national security or public order but 179 Sched 2, cl 866.225(a). 180 Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 320; [1981] HCA 26; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69]; [1998] HCA 28. 181 ss 500(1)(c), 500(4)(c), 502(1)(a)(iii), 503(1)(c). Sections 500(1)(c) and 500(4)(c) have now been amended by the Migration Amendment (Complementary Protection) Act 2011 (Cth). Nothing was said to turn on these amendments and it is convenient to refer, as the parties did, to the Act as it stood before these amendments. 182 ss 500(1)(c) and 500(4)(c). Hayne which, on the other hand, would not be a decision of the kind identified in s 500(1)(c) of the Act: a decision to refuse to grant the protection visa "relying on one or more of the following Articles of the Refugees Convention, namely, Article 1F, 32 or 33(2)". That is, the plaintiff submitted that s 31(3), when construed in the context of the whole Act, must be read as not authorising the prescription of a criterion for the grant of a protection visa that is inconsistent with the Act's identification of, and provision of special rights of review for, a decision of the kind described in s 500(1)(c). This branch of the plaintiff's argument invoked a well-established183 principle of statutory construction which directs attention to the way in which the Act is framed. It was not an argument that depended in any respect upon suggesting that there is some relevant limit to the Commonwealth's legislative power to provide for the expulsion or exclusion from Australia of persons who are found to be risks to national security. And the construction urged does not, in the end, depend upon limiting the operation of s 31(3), or the Act more generally, by reference to the international obligations Australia has under the Convention. The defendants sought to meet the proposition that s 31(3) does not authorise the prescription of PIC 4002 by submitting that there is no tension between s 500(1)(c) and PIC 4002. They submitted that there is no tension between these provisions primarily because the Act does not provide for any decision to refuse to grant a protection visa relying on either Art 32 or Art 33(2). They accepted that it would follow from this submission that the Act's several references to a decision to refuse to grant a protection visa relying on those Articles have no work to do. The defendants accepted that the text of the relevant provisions must be read as assuming that there can be a decision to refuse to grant a protection visa relying on any of the identified Articles, but their argument was that the Act's repeated references to decisions to refuse to grant a protection visa relying on one or more of Arts 32 and 33(2) have no work to do in any circumstances. The defendants (correctly) did not submit that the text of s 500(1)(c) (and other provisions using the same language) could be given some distributive construction by which the reference to a decision to refuse to grant a protection visa connects only with Art 1F of the Convention and the reference to a decision to cancel a protection visa connects only with one or other of Arts 32 and 33(2). It is not possible to construe the relevant provisions as if they read "a decision to refuse to grant a protection visa relying on Article 1F of the Convention or a decision to cancel a protection visa relying on either Article 32 or Article 33(2) of the Convention". No such distributive construction of the relevant provisions 183 See, for example, Project Blue Sky (1998) 194 CLR 355 at 381-382 [69]-[71]. Hayne is open. It is foreclosed by the phrase "relying on one or more of" the identified Articles. The text of the relevant provisions The text of s 31(3) has been set out earlier in these reasons. It is necessary to set out the text of s 500(1) and then the text of the three Articles of the Convention that are mentioned in s 500(1)(c). Section 500(1) provides: "Applications may be made to the Administrative Appeals Tribunal for review of: decisions of circumstances specified in section 201; or the Minister under section 200 because of decisions of a delegate of the Minister under section 501; or a decision to refuse to grant a protection visa, or to cancel a protection visa, relying on one or more of the following Articles of the Refugees Convention, namely, Article 1F, 32 or 33(2); other than decisions to which a certificate under section 502 applies." Decisions to refuse to grant a protection visa or to cancel a protection visa relying on one or more of those Articles of the Convention are also referred to in s 500(4)(c) (as decisions not reviewable under Pts 5 or 7 of the Act), s 502(1)(a)(iii) (as decisions in respect of which the Minister, acting personally, may, as part of the decision, include a certificate declaring the person to be an excluded person) and s 503(1)(c) (to identify persons who may be excluded from Australia for a period determined under the Regulations). Article 1F excludes from the application of the Convention certain persons who have committed identified kinds of act. It provides: "The provisions of this Convention shall not apply to any person with respect to whom there are serious reasons for considering that: he has committed a crime against peace, a war crime, or a crime against humanity, as defined in the international instruments drawn up to make provision in respect of such crimes; he has committed a serious non-political crime outside the country of refuge prior to his admission to that country as a refugee; Hayne he has been guilty of acts contrary to the purposes and principles of the United Nations." The Minister's delegate found, and it has not since been disputed, that the plaintiff is not a person to whom Art 1F applies. Articles 32 and 33(2) qualify the obligation undertaken by parties to the Convention not to expel from their territory a person who meets the definition of refugee set out in Art 1. These Articles make special provision for refugees who present security risks to the country of refuge. Article 32 deals with the expulsion of refugees. It provides: "1. The Contracting States shall not expel a refugee lawfully in their territory save on grounds of national security or public order. The expulsion of such a refugee shall be only in pursuance of a decision reached in accordance with due process of law. Except where compelling reasons of national security otherwise require, the refugee shall be allowed to submit evidence to clear himself, and to appeal to and be represented for the purpose before competent authority or a person or persons specially designated by the competent authority. The Contracting States shall allow such a refugee a reasonable period within which to seek legal admission into another country. The Contracting States reserve the right to apply during that period such internal measures as they may deem necessary." (emphasis added) Article 33 contains one of the most important obligations in the Convention. It prohibits expulsion of a refugee to the frontiers of territories where the refugee fears persecution. It provides: "1. No Contracting State shall expel or return ('refouler') a refugee in any manner whatsoever to the frontiers of territories where his life or freedom would be threatened on account of his race, religion, nationality, membership of a particular social group or political opinion. The benefit of the present provision may not, however, be claimed by a refugee whom there are reasonable grounds for regarding as a danger to the security of the country in which he is, or who, having been convicted by a final judgment of a particularly serious crime, constitutes a danger to the community of that country." (emphasis added) How should the Act be construed when, on the one hand, s 31(3) is expressed as a textually unbounded power to prescribe criteria for the grant of a protection visa (limited only by the reference in s 504(1) to the regulation not being inconsistent with the Act) and, on the other, there is repeated reference elsewhere in the Act to decisions to refuse to grant a protection visa relying on Hayne one or more of the identified Articles of the Convention? It is necessary to begin by restating some relevant and long-standing principles of statutory construction. Relevant principles The Act must be construed in a way that gives due weight to two related considerations. First, as was said in Project Blue Sky Inc v Australian Broadcasting Authority184: "A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals185. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions186." Second, as was noted in Project Blue Sky187, it is "a known rule in the interpretation of Statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent"188 (emphasis added). This second point is of immediate relevance in this matter because the defendants urged a construction of the Act which they accepted189 gave some elements of s 500(1)(c) no work to do. The principles that have been identified begin from the premise, already noted, that the Act must be read as a whole. As in Project Blue Sky190, if s 31(3) 184 (1998) 194 CLR 355 at 381-382 [70]. 185 Ross v The Queen (1979) 141 CLR 432 at 440 per Gibbs J; [1979] HCA 29. 186 See Australian Alliance Assurance Co Ltd v Attorney-General of Queensland [1916] St R Qd 135 at 161 per Cooper CJ; Minister for Resources v Dover Fisheries Pty Ltd (1993) 43 FCR 565 at 574 per Gummow J. 187 (1998) 194 CLR 355 at 382 [71]. 188 The Commonwealth v Baume (1905) 2 CLR 405 at 414; [1905] HCA 11, citing R v Berchet (1688) 1 Show KB 106 [89 ER 480]. See also Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 12-13; [1992] HCA 64. 189 See, for example, [2012] HCATrans 149 at 5944-5953. 190 (1998) 194 CLR 355 at 385 [80]. Hayne were given its grammatical meaning, without regard to s 500(1)(c) and the other provisions which use the same language, it would authorise the prescription of a visa criterion that would give the Act's provisions for review of decisions to refuse to grant a protection visa relying on one or other of Arts 32 and 33(2) no work to do. But, as in Project Blue Sky, the express words of s 504(1) (that regulations be "not inconsistent with this Act") and consideration of the Act as a whole show that the grammatical meaning of s 31(3) is not its legal meaning. As was pointed out in Morton v Union Steamship Co of New Zealand Ltd191: "Regulations may be adopted for the more effective administration of the provisions actually contained in the Act, but not regulations which vary or depart from the positive provisions made by the Act or regulations which go outside the field of operation which the Act marks out for itself." (emphasis added) Thus the notion of inconsistency embraced by the common form of regulation making power — to make regulations "not inconsistent with this Act" — is not sufficiently described by reference only to the metaphor of "covering the field" which has in the past been used in connection with s 109 of the Constitution192. Rather, as was said in the passage quoted from Morton193, the question is whether the regulation in question varies or departs from (in other words alters, impairs or detracts from) the provisions of the Act. Because the Act must be construed as a whole, consideration of the validity of prescribing PIC 4002 as a criterion for the grant of a protection visa must begin from an understanding of the general scheme for which the Act provides. The Act – binary outcomes Subject to some qualifications that are not immediately important, the Act has a binary structure in that its central provisions posit a choice between two outcomes. Non-citizens are divided194 into "lawful non-citizens" and "unlawful 191 (1951) 83 CLR 402 at 410; [1951] HCA 42. 192 Momcilovic v The Queen (2011) 85 ALJR 957 at 1029-1030 [262]-[265]; 280 ALR 221 at 301-302; [2011] HCA 34. 193 See also Grech v Bird (1936) 56 CLR 228 at 239; [1936] HCA 59; Harrington v Lowe (1996) 190 CLR 311 at 324-325; [1996] HCA 8. 194 ss 13 and 14. Hayne non-citizens" according to whether the non-citizen in question holds a valid visa. The Minister must decide to grant195 or refuse to grant196 a valid application for a visa according to whether the Minister is satisfied certain requirements are met. The Act spells out the consequences that follow from being a lawful non-citizen or an unlawful non-citizen. Generally, an officer is bound197 to detain a person whom the officer knows or reasonably suspects to be an unlawful non-citizen. Subject to the possibility of the Minister making a "residence determination" under s 197AB, s 196(1) requires that an unlawful non-citizen detained under s 189 of the Act "be kept in immigration detention until he or she is" removed from Australia, deported or granted a visa. An officer is bound198 to remove "as soon as reasonably practicable" an unlawful non-citizen who has been detained, has not subsequently been immigration cleared, and has no valid application for a visa that has not yet been finally determined. The Act provides no middle ground between being a lawful non-citizen (entitled to remain in Australia in accordance with any applicable visa requirements) and being an unlawful non-citizen, who may, usually must, be detained and who (assuming there is no pending consideration of a valid visa application) must be removed from Australia as soon as reasonably practicable. These consequences – remaining in Australia on the one hand and detention followed by removal from Australia on the other – follow once the central question has been answered: is the person a lawful non-citizen or an unlawful non-citizen? That question depends upon whether the Minister grants or refuses to grant a visa or, if a visa has previously been granted, whether that visa has since been cancelled. The decision to grant or to refuse to grant a valid application Section 65 of the Act governs the decision to grant or to refuse to grant a visa and is the provision which gives practical effect to the prescription of criteria under s 31(3). Section 65(1) provides: "After considering a valid application for a visa, the Minister: if satisfied that: 195 s 65(1)(a). 196 s 65(1)(b). 197 s 189. An officer has a discretion whether to detain such a person who is in, or is seeking to enter, an "excised offshore place". Hayne the health criteria for it (if any) have been satisfied; and (iii) the other criteria for it prescribed by this Act or the regulations have been satisfied; and the grant of the visa is not prevented by section 40 (circumstances when granted), 500A (refusal or cancellation of temporary safe haven visas), 501 (special power to refuse or cancel) or any other provision of this Act or of any other law of the Commonwealth; and any amount of visa application charge payable in relation to the application has been paid; is to grant the visa; or if not so satisfied, is to refuse to grant the visa." All the requirements of s 65(1) are important. It may be possible to refer, as the parties' arguments sometimes suggested, to some of them as positive (satisfying the health criteria) and others as negative (the grant "is not prevented" by certain considerations). But a distinction between positive and negative requirements or criteria is not helpful for present purposes. What is presently important is that s 65(1) directs attention to different requirements. Those requirements cannot be contradictory or otherwise inconsistent. So, for example, criteria prescribed by the Regulations cannot be inconsistent with criteria prescribed by the Act. And, of immediate relevance, criteria prescribed by the Regulations cannot be inconsistent with the operation of the special powers to refuse a visa that are given by s 501. The apparently general words of s 31(3) must be read as not authorising the making of such a criterion. So much follows from the express words of s 504(1) ("make regulations, not inconsistent with this Act") and from fundamental principles of statutory construction. It is useful to note at once, and reject, one of the submissions the defendants made about inconsistency. The defendants observed that the Act has always contemplated that applicants for a protection visa must satisfy all prescribed criteria, not just the criterion in s 36(2) that the Minister be satisfied that Australia has protection obligations to the applicant, and that these criteria do not always engage the review provisions of s 500. Accordingly, the mere fact that an applicant is refused a protection visa relying on PIC 4002, where otherwise the applicant would have been granted a protection visa, reveals no inconsistency. So much may readily be assumed to be correct. Indeed it seems amply demonstrated by the text of s 65. But the submission is beside the point. Alleged inconsistency is not usefully identified (at least in this case) in terms of outcome – of what would occur but for the existence of PIC 4002 or any other criterion. The tension between PIC 4002 and the Act is found in the relationship Hayne between PIC 4002, in its application to protection visas, and the special scheme of review provided for by s 500. Examination of that relationship reveals that the problem with PIC 4002 is not that it creates an additional hurdle to the grant of a protection visa but that it erects a hurdle that circumvents the special review provisions made by the Act. It is necessary to examine more closely the operation of s 500(1)(c) and its intersection with other provisions of the Act. Section 500(1)(c) – the decisions identified Unlike PIC 4002, s 500(1)(c) does not, in its form, prescribe a criterion for the grant of a protection visa. As already noted, s 500(1)(c) provides for the review of certain kinds of decision. The decisions identified in s 500(1)(c) are described as decisions to refuse to grant a protection visa or to cancel a protection visa "relying on" one or more of Arts 1F, 32 and 33(2). By treating these decisions as a separate class, the Act not only assumes that a decision-maker considering a visa application can examine the questions presented by those Articles, it requires the decision-maker to do that. Any other construction of the provision would read its references to a decision "relying on" the relevant Articles out of the Act. In its terms, s 500(1)(c) neither provides for the making of a decision "relying on" one or more of the relevant Articles nor identifies some other provision of the Act as founding a decision of the kind described. It is therefore necessary to identify what provision or provisions of the Act would yield a decision "relying on" one or more of the specified Articles. Two candidates were identified in argument: s 36(2) and s 501. Section 36(2) intersects with s 65 because it prescribes a criterion199 for the grant of a protection visa. Section 501 intersects with s 65 because its operation may prevent200 the grant of a visa. It is convenient to consider the relationship between ss 500(1)(c) and 36(2), and then the relationship between ss 500(1)(c) and 501. Section 500(1)(c) and protection obligations The legislative predecessor of s 500(1)(c) was first introduced201 into the Act by the Migration (Offences and Undesirable Persons) Amendment Act 1992 199 s 65(1)(a)(ii). 200 s 65(1)(a)(iii). 201 s 4(2)(b). Hayne (Cth). The defendants submitted that extrinsic material202 relating to the amendment showed that it was assumed that a person who could be expelled from Australia without breach of Art 32 or Art 33(2) was not a person to whom Australia owed protection obligations. On this view, if a person could be expelled without breach of Art 32 or Art 33(2), the Minister was to refuse to grant a protection visa for want of satisfaction of s 36(2) and this would be a decision "relying on" Art 32 or Art 33(2). The accuracy of these propositions need not be examined; it is sufficient to assume that they are right. The defendants submitted that this understanding of s 36(2) has now been falsified by this Court's decision in NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs203. The Court held204 in NAGV that the reference to "protection obligations" in what is now s 36(2)(a) should be understood as identifying a person who is a refugee within the meaning of Art 1 of the Convention. It followed, so the defendants' argument continued, that the application of s 36(2) could yield no decision to refuse to grant a protection visa "relying on" either Art 32 or Art 33(2). The defendants recognised, however, that NAGV establishes205 that the application of s 36(2) can yield a decision to refuse to grant a protection visa "relying on" Art 1F. A person who meets the description given in Art 1F, they accepted, is a person to whom the Convention does not apply and thus a person to whom Australia does not owe protection obligations. The defendants' submissions about the operation of s 36(2) may be accepted but their acceptance does not lead to the conclusion the defendants asserted – that there can be no decision to refuse to grant a protection visa relying on one or both of Arts 32 and 33(2). Too narrow a focus upon s 36(2) and NAGV diverts attention from, and does not take sufficient account of, two important considerations: the relationship between s 500(1)(c) and what is called (in s 65(1)(a)(iii)) the "special power to refuse or cancel" given by s 501, and the relationship between ss 501 and 65. It is to those subjects that these reasons now turn. 202 Australia, Senate, Migration (Offences and Undesirable Persons) Amendment Bill 1992, Explanatory Memorandum at 3 [10]. 203 (2005) 222 CLR 161 at 178-180 [54]-[59]; [2005] HCA 6. 204 (2005) 222 CLR 161 at 176 [42]. 205 (2005) 222 CLR 161 at 176-180 [42]-[60]. Hayne Section 500(1)(c) and the character test It will be recalled that one of the requirements stated in s 65(1) as a condition for the grant of a valid application for a visa is that the Minister is satisfied that the grant of the visa is not prevented by some identified provisions of the Act, including s 501. Section 501(1) of the Act empowers the Minister to refuse to grant any kind of visa to a person if that person does not satisfy the Minister that the person passes "the character test" identified in s 501(6). It is necessary to notice that one of the public interest criteria that an applicant for a protection visa must satisfy (public interest criterion 4001 – "PIC 4001") expressly directs attention One circumstance206 in which PIC 4001 is met is if the applicant "satisfies the Minister that [he or she] passes the character test". No question about the validity or operation of PIC 4001 was considered in argument. It is therefore neither necessary nor desirable to examine that criterion. Instead, attention must be directed to the relationship between ss 500(1)(c) and 501. that character test. In considering the relationship between these provisions it is necessary to refer only to decisions to refuse to grant a protection visa relying on one or both of Arts 32 and 33(2). As has been explained, Art 1F is properly taken into account in considering the application of the criterion prescribed by s 36(2). Both Art 32 and Art 33(2) deal with threats to security. Article 32 refers to expelling a refugee on "grounds of national security or public order"; Art 33(2) refers to "a refugee whom there are reasonable grounds for regarding as a danger to the security of the country in which he is". There are several elements of the character test set out in s 501(6) that intersect with the references in Arts 32 and 33(2) to "national security" and "security of the country in which [the person] is". The provision of the character test of most obvious relevance to Arts 32 and 33(2) is s 501(6)(d)(v), which provides that a person does not pass the character test if: in the event the person were allowed to enter or to remain in Australia, there is a significant risk that the person would: represent a danger to the Australian community or to a segment of that community, whether by way of being liable to become involved in activities that are disruptive to, or in 206 The Regulations, Sched 4, item 4001(a). Paragraphs (b)-(d) of PIC 4001 state other circumstances in which the criterion is met. The operation of these provisions need not be examined. Hayne violence threatening harm to, that community or segment, or in any other way." This provision of the character test embraces considerations of the kind with which both Arts 32 and 33(2) deal by their references to "security". Other elements of the character test in s 501(6) direct attention to many other kinds of consideration. Some, perhaps many, may fall within the reference in Art 32 to "public order", but it is not necessary to attempt to identify the extent to which the two overlap. It is enough to observe that the character test directs attention to the issues with which Arts 32 and 33(2) deal. A decision to refuse to grant a protection visa because its grant is prevented by s 501 is thus capable of being a decision "relying on" Art 32 or Art 33(2) which would engage s 500(1)(c). That is, a decision to refuse to grant a protection visa relying on either Art 32 or Art 33(2) is a particular species of case in which the grant of a protection visa is prevented207 by s 501. This construction of the Act being open, there is no reason to construe s 500(1)(c) as if the reference there (and elsewhere in the Act) to a refusal to grant a visa relying on Art 32 or Art 33(2) were "superfluous, void, or insignificant"208. The reason for the Act marking off this class of decision for a special process of review is readily apparent. A decision of this kind will lead to the expulsion from Australia of a person who has been found to be a refugee within the meaning of Art 1 of the Convention. Marking off decisions of this kind for special review processes reflects a legislative recognition of important aspects of the international obligations Australia has undertaken. There is in these circumstances all the more reason to read s 500(1)(c) in a way that gives all of its elements work to do. Yet if, as the defendants submitted, a decision taken under s 65(1) to refuse a protection visa because its grant is prevented by s 501 cannot be a decision relying on Art 32 or Art 33(2), the reference to decisions of that kind in s 500(1)(c) is given no work at all. Before dealing with the validity of prescribing PIC 4002, it is necessary to consider, and reject, two further submissions the defendants made about the relationship between ss 500(1)(c) and 501. First, the defendants submitted that the reference in s 500(1)(c) to decisions to refuse to grant a protection visa relying on Art 32 or Art 33(2) has no more than a trivial operation if decisions of that kind are made on the basis of 207 s 65(1)(a)(iii). 208 Project Blue Sky (1998) 194 CLR 355 at 382 [71], citing The Commonwealth v Baume (1905) 2 CLR 405 at 414. Hayne the character test prescribed by s 501. This conclusion was said to follow from s 500(1)(b), which provides for the review, by the Administrative Appeals Tribunal, of decisions made by a delegate of the Minister under s 501. The only possible separate field of operation for s 500(1)(c), different from that covered by s 500(1)(b), would be decisions of the kinds identified in s 500(1)(c) when they are made by the Minister personally. The defendants submitted that it is likely that there would be very few decisions of this kind and that it follows that s 500(1)(c) would "have little or no work to do". The defendants' submission should be rejected. Whether or why decisions of the relevant kind would rarely be made by the Minister personally need not be examined. If the defendants are right, it is an observation that does not bear upon the proper construction of the Act. Section 500(1) deals with three kinds of decision: decisions of the Minister to deport non-citizens in Australia for less than 10 years who are convicted of crimes, decisions of a delegate of the Minister under s 501 (the character test) and decisions to refuse to grant, or to cancel, a protection visa relying on one or more of Arts 1F, 32 and 33(2). As the defendants accepted, the first two categories of decision are identified by reference to both the kind of decision and the decision-maker (the Minister or a delegate). The third category is identified by reference only to the kind of decision, not who made it. Given these differences, reading s 500(1)(c) as marking off decisions relying upon the specified Articles of the Convention, whoever makes them, as a separate class of decision taken under s 501 does not render s 500(1)(c) superfluous. The second of the submissions the defendants made about the relationship between ss 500(1)(c) and 501 was that the character test to be applied under s 501 requires proof to a lesser standard than would be necessary to engage Art 33(2). It followed, so they submitted, that a decision relying on Art 33(2) could not be made under s 501. This submission should be rejected. There are at least two reasons to do so. First, the submission proceeded from the premise that it is necessary to begin by asking whether s 501 (and s 501(6)(d)(v) in particular) "embodies Australia's interpretation and implementation of Australia's obligations under Arts 32 and 33 of the Convention". That is, the defendants sought first to construe the Convention and then read the Act as if it gives effect to that construction. This inverts the proper order of enquiry. The Act must be construed 209 in the light of 209 NAGV (2005) 222 CLR 161 at 178-180 [54]-[59]; Plaintiff M61/2010E v The Commonwealth (Offshore Processing Case) (2010) 243 CLR 319 at 339 [27]; [2010] HCA 41; Plaintiff M70/2011 v Minister for Immigration and Citizenship (Malaysian Declaration Case) (2011) 244 CLR 144 at 189 [90]; [2011] HCA 32. Hayne its recognition of and references to Australia's international obligations but it is the Act and its text which controls. The second reason to reject this submission is that it assumed, wrongly, that s 501 can be applied on the basis of unfounded suspicion or suggestion, without recognition of the consequences that flow from its application, whereas the application of Art 33(2) would require clear and cogent proof of a serious threat to national security. But a decision to refuse to grant a protection visa relying on either Art 32 or Art 33(2), as a species of s 501 decision, cannot be made unless, in a case where security is at issue, the decision-maker is satisfied that the person concerned is a risk to national security. It is elementary that, as Dixon J said in Briginshaw v Briginshaw210: "reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal." (emphasis added) These are reasons enough to reject the defendants' submission. It is, therefore, not necessary to examine how the submission, framed by reference only to Art 33(2), spoke at all to the Act's references to decisions relying on Art 32. Nor is it necessary to consider how or why different fields of operation for either or both of Arts 32 and 33(2) on the one hand, and s 501 on the other, could be marked off by reference to the application of differing standards of proof when the subject matter dealt with by s 501 includes the subject matter dealt with by the two Articles. Inconsistency between prescribing PIC 4002 and s 500(1)(c) PIC 4002 hinges upon the absence of an assessment by ASIO that the applicant for a protection visa is directly or indirectly a risk to security within the meaning of s 4 of the ASIO Act. Section 4 defines "security" as: the protection of, and of the people of, the Commonwealth and the several States and Territories from: espionage; sabotage; 210 (1938) 60 CLR 336 at 362; [1938] HCA 34. Hayne (iii) politically motivated violence; promotion of communal violence; attacks on Australia's defence system; or acts of foreign interference; whether directed from, or committed within, Australia or not; and the protection of Australia's territorial and border integrity from serious threats; and the carrying out of Australia's responsibilities to any foreign to a matter mentioned in any of the country in relation subparagraphs of paragraph (a) or the matter mentioned paragraph (aa)." Paragraphs (a) and (aa) of the definition focus upon threats to Australia; par (b) looks to Australia's performance of its responsibilities to foreign countries. It is clear that some of the matters to be considered in applying this definition of "security" would be considered in applying either Art 32 or Art 33(2) and the character test in s 501 (especially s 501(6)(d)(v)). But as the defendants correctly accepted, par (b) of the definition directs attention to matters that do not fall within the reference in Art 32 to "grounds of national security or public order" or the reference in Art 33(2) to "a refugee whom there are reasonable grounds for regarding as a danger to the security of the country in which he is". And the issues with which par (b) of the ASIO Act definition deals, namely, Australia's responsibilities to foreign countries, are not matters raised by the character test. It follows that an assessment made for the purposes of PIC 4002 may rely upon matters that are irrelevant to those that would be relevant if the decision-maker refused to grant a protection visa by applying s 501 and relying on either or both of Arts 32 and 33(2). Section 500(1)(c) provides for the review of a decision refusing to grant a protection visa under s 501 that is a decision relying on Art 32 or Art 33(2). Decisions of that kind are to be reviewed by the Administrative Appeals Tribunal, not by the Refugee Review Tribunal. By contrast, a decision to refuse to grant a protection visa relying on PIC 4002 is reviewed211 by the Refugee Review Tribunal. Not only is the identity of the reviewing body different, the issues that would arise in the two avenues for review are radically different. In the first case, the question would be whether grounds of the kind described in 211 s 411(1)(c). Hayne Art 32 or Art 33(2) were established. That would require consideration of the facts and circumstances that underpinned any conclusion about risks to Australia's security. No doubt it would permit reference to any view that was expressed by or on behalf of ASIO and it would ordinarily be expected that ASIO's views would be sought and be influential. But ASIO's expression of opinion would not, of itself, be conclusive of the enquiry. By contrast, in a review of a decision to refuse to grant a protection visa relying on PIC 4002, the only issue would be whether ASIO had made an adverse security assessment. There would be no issue about whether that assessment was well-founded. Because there are these differences between review of a decision relying on either or both of Arts 32 and 33(2) and a decision relying on PIC 4002 the outcome of an application for a protection visa may differ according to which of the provisions is relied on. More importantly, whenever ASIO concludes that a person is a risk to security (as defined in the ASIO Act) a decision to refuse to grant the person a protection visa may always be made relying on PIC 4002, and not relying on Art 32 or Art 33(2) and applying s 501. That follows because the matters that may be considered by ASIO in making a security assessment for the purposes of PIC 4002 include, but are not limited to, the matters that engage either or both of Arts 32 and 33(2). Thus, as the defendants accepted, if the prescription of PIC 4002 is valid, the Act can be administered in a way that gives s 500(1)(c) no work to do. Such a construction of the Act should not be adopted "if by any other construction [all of the elements of s 500(1)(c)] may ... be made useful and pertinent"212. The preferable construction of the Act reveals the inconsistency of prescribing PIC 4002 as a criterion for the grant of a protection visa with a statutory scheme in which all of the elements of s 500(1)(c) are given work to do. As pointed out earlier in these reasons, in considering the operation of s 65, it is not to be doubted that the Act may provide for a series of criteria for the grant of a visa in such a way that failure to satisfy any one of those criteria would permit or require refusal of an application for the grant of a visa of that type. That is, it may readily be accepted that the Act may provide a decision-maker with alternative paths to the one result. But this observation is beside the point. The question in this case is whether the Regulations may validly prescribe satisfaction of PIC 4002 as a criterion for the grant of a protection visa when the Act itself deals with the same subject matter and provides for a different and special mechanism for review of decisions of the kind identified by the Act. Observing that an application for a protection visa could be refused relying on 212 Project Blue Sky (1998) 194 CLR 355 at 382 [71], citing The Commonwealth v Baume (1905) 2 CLR 405 at 414. Hayne Art 32 or Art 33(2) and that, if the prescription of PIC 4002 is valid, it could also be refused for want of satisfaction of the latter criterion presents the relevant question. It does not answer it. The defendants' construction As noted earlier in these reasons, the defendants sought to meet the proposition that s 31(3) does not authorise the prescription of PIC 4002 by placing the chief weight of their submissions on the proposition that there can be no decision to refuse to grant a protection visa "relying on" either Art 32 or Art 33(2). They sought to support this central proposition in several ways. But before considering those arguments it is necessary to deal with a further and apparently more fundamental submission that the defendants made. They submitted that any tension or apparent incongruity between s 31(3) and PIC 4002 on the one hand, and the Act's references to decisions to refuse to grant a protection visa relying on Art 32 or Art 33(2) on the other, should be resolved by treating s 31(3) as the leading provision of the Act and the provisions referring to decisions relying on the identified Articles as subsidiary provisions. It followed, so the defendants submitted, that any inconsistency between the two should be resolved by giving effect to s 31(3) and thus the prescription of PIC 4002. This submission should be rejected. In Project Blue Sky it was said213 that reconciling competing provisions of a statute often requires the court to determine which is the leading provision and which the subordinate, and which must give way to the other. So much may readily be accepted. But in this case, the competition to be resolved is between a visa criterion specified by regulation and express provisions of the Act itself. The proposition that is engaged in this case is that the power given by s 31(3) to prescribe visa criteria cannot be exercised to prescribe a criterion that is inconsistent with or repugnant to the Act. This is not a proposition that depends upon attaching the terms "leading" or "subordinate" to any provision of the Act. It is no more than a reflection of the express words of s 504(1) and the basic proposition that any provision of any Act must always be construed in the context of the whole Act. And, contrary to the defendants' submissions, pointing to how often the power conferred by s 31(3) has been exercised, or even how it was intended to be exercised, does not establish it to be in any relevant sense the leading provision of the Act. It is necessary now to deal with the several different ways in which the defendants sought to support their central proposition – that because there can be 213 (1998) 194 CLR 355 at 382 [70], citing Institute of Patent Agents v Lockwood [1894] AC 347 at 360 per Lord Herschell LC. Hayne no decision to refuse to grant a protection visa relying on either Art 32 or Art 33(2), there is no tension between the prescription of PIC 4002 and the provisions of the Act which refer to decisions of that kind. First, the defendants submitted that s 500(1)(c) provides for rights of review and does not prescribe any criterion for the grant of a protection visa. This is correct as a matter of form but it is beside the point. Section 500(1)(c) assumes that there can be decisions of the kind described. Those decisions can be identified as a species of decision made under the s 501 character test. It is from this starting point – that there is a class of decision under the Act to which s 500(1)(c) refers – that inconsistency between prescribing PIC 4002 and the Act as a whole is to be considered. Second, the defendants submitted that, although the contrary view may have been available at the time of the first enactment of what became s 500(1)(c), the reference in s 36(2)(a) to "a non-citizen in Australia to whom ... Australia has protection obligations under the Refugees Convention as amended by the Refugees Protocol" turns on Art 1 of the Convention and not on Arts 32 and 33(2). Again, so much may be accepted. But once the relationship between ss 500(1)(c) and 501 is identified as it has been in these reasons, the observation the defendants make is again beside the point. Third, the defendants submitted that there can be no decision to refuse to grant a protection visa relying on Art 32 because that Article does not apply unless the refugee is "lawfully in" the territory of the relevant State and the plaintiff, they submitted, is not. This submission requires separate consideration. Article 32 and "lawfully in" the territory In the course of their arguments directed to the lawfulness of the plaintiff's detention (if, as they submitted, PIC 4002 is validly prescribed) the defendants submitted that Art 32 could never found a decision to refuse to grant a protection visa because Art 32 applies only to refugees lawfully in the territory of the State in question and an applicant for a protection visa is not lawfully in Australia. Although not expressly deployed in connection with the argument about the validity of prescribing PIC 4002, it is as well to consider the point, if only because, on its face, it was another and more particular aspect of the defendants' central argument that there can be no decision to refuse to grant a protection visa relying on Art 32 or Art 33(2). Hayne The defendants pointed to decisions of the Supreme Court of the United Kingdom214 and United States courts215 which, they said, demonstrate that, when used in Art 32, the expression "lawfully in [the] territory" of a State should be read as meaning that "the refugee has been granted the right to live in that State under the domestic law of that State". It may be assumed, for the purposes of this case, that this is the better construction of the expression. The defendants' submissions fastened upon this construction of the expression as denying the possibility of a decision to refuse to grant a protection visa relying on Art 32. On that approach, there could never be a decision to refuse to grant a protection visa relying on Art 32 because, by hypothesis, the visa applicant has no right to live in Australia. That must be the hypothesis because, if a person has a right to live in Australia, there is no occasion for that person to seek a protection visa. And it is not to be supposed that the Act, in its references to decisions relying on Art 32, deals separately and only with protection visa applicants who hold some other visa, like a bridging, student or tourist visa, permitting the person to remain in Australia for a limited time or purpose. To read the Act's references to decisions relying on Art 32 as applying only to persons of that class would have the Act's operation depend upon the capricious happenstance of whether the decision to refuse a protection visa was made during the currency of the relevant temporary visa. But contrary to the defendants' submissions, it by no means follows that the Act's references to a decision to refuse to grant a protection visa relying on Art 32 can be ignored or treated as a mistaken reference having no useful work to It is important to recognise that Art 32 has two relevant elements. First, it refers to a refugee lawfully in the territory, but second, it specifies criteria that must be satisfied before such a person may be expelled. The Act's references to decisions "relying on" Art 32 must be read as directing attention to the criteria that are to be satisfied before a refugee may be expelled. And those criteria may then be engaged to yield a decision to refuse to grant a protection visa by the combined operation of ss 65 and 501 of the Act in the manner described earlier in these reasons. Only this construction avoids the circular and capricious application of the Act that would follow from fastening, as the defendants did, upon the first element of Art 32. These are reasons enough to reject the defendants' submission. It is to be noted, however, that the context in which the Act refers to Art 32 also points 214 R (ST) v Secretary of State for the Home Department [2012] 2 WLR 735 at 748 [33]; [2012] 3 All ER 1037 at 1052. See also R v Secretary of State for the Home Department; Ex parte Bugdaycay [1987] AC 514 at 526. 215 Kan Kam Lin v Rinaldi 361 F Supp 177 at 185-186 (1973); Chim Ming v Marks 505 F 2d 1170 at 1172 (1974). Hayne firmly in the direction of understanding the Act to be referring to the second, and not the first, element of Art 32. The Act refers to Art 32 as a ground for refusing to grant a protection visa. It thus assumes that Art 32 can found a decision to refuse to grant a protection visa. It also refers to the Article in identifying which decisions are to be subject to review by the Administrative Appeals Tribunal. There is an evident connection between that reference and the provision in Art 32(2) that a refugee be "allowed to submit evidence to clear himself, and to appeal to and be represented for the purpose before competent authority". The reference in Art 32 to a refugee being "lawfully in" the territory of a State has no bearing upon the present matter or upon the construction of the relevant provisions of the Act. An applicant for a protection visa can have his or her application for a protection visa refused relying on Art 32. It is irrelevant to the application of the Act whether, for the purposes of the Convention, the applicant is or is not "lawfully in" Australia. Conclusion and answers The defendants' submissions that there can be no decision to refuse to grant a protection visa relying on either Art 32 or Art 33(2) should be rejected. Section 500(1)(c) can and should be construed as having useful work to do. It follows that the prescription by cl 866.225(a) of Sched 2 to the Regulations of PIC 4002 as a criterion for the grant of a protection visa is not valid. Its making is inconsistent with the express provisions of the Act and s 31(3) does not authorise the specification of a criterion inconsistent with the Act. No party suggested that PIC 4002 could be read down. This Court has pointed out, more than once216, that the text and structure of the Act proceed on the basis that the Act enables Australia to respond to the international obligations that Australia undertook when it acceded to the Convention. The construction of the Act that has been identified is consistent with those obligations. But it will be observed that the reasons given for adopting that construction stem almost entirely from consideration of the text and structure of the Act and do not direct particular attention to the content of the international obligations Australia has under the Convention. Something more should be said, however, about two aspects of the parties' arguments about the operation of the Act and the Convention. The plaintiff placed the notion of "protection obligations" and s 36 at the forefront of his argument. Though expressed in a number of different ways, a 216 NAGV (2005) 222 CLR 161 at 178-180 [54]-[59]; Offshore Processing Case (2010) 243 CLR 319 at 339 [27]; Malaysian Declaration Case (2011) 244 CLR Hayne constant thread in many of the submissions advanced on behalf of the plaintiff was that, having been found to be a refugee, he is a person to whom Australia owes protection obligations and he cannot be removed from Australia otherwise than in accordance with Arts 32 and 33(2) of the Convention. Expressed in this way, not only is the argument too broad, it does not engage, as it must, with the text of the Act. The defendants, on the other hand, sought to treat the Court's decisions in Plaintiff M61/2010E v The Commonwealth (Offshore Processing Case)217 and Plaintiff M70/2011 v Minister for Immigration and Citizenship (Malaysian Declaration Case)218 as establishing that the Act permits and requires expulsion from Australia of a person found to be a refugee whenever the expulsion would not breach Australia's international obligations. This argument appeared to proceed from the premise that the Act should be construed by first construing the Convention and then reading the Act as if it gives effect to that construction. As noted earlier in these reasons, this inverts the proper order of enquiry. The Act should be construed in the light of its recognition of and references to Australia's international obligations but it is the Act and its text which controls. The decisions that have been made to refuse to grant the plaintiff a protection visa have applied a criterion that was not validly made and it follows that the plaintiff's application for a protection visa has not validly been determined. Because that is so, he may lawfully be detained for the purposes of the determination of his application for a protection visa. If that application were to be refused relying on either Art 32 or Art 33(2), because the Minister or the Minister's delegate decided that the plaintiff is a risk to Australia's security, the plaintiff would be entitled (unless s 502(1) were to apply) to seek review of that decision by the Administrative Appeals Tribunal. Other questions that were canvassed in the course of argument are not reached. Whether ASIO failed to accord the plaintiff procedural fairness in making its security assessment need not be considered. The prescription of PIC 4002 as a criterion for the grant of a protection visa being invalid, the assessment that was made does not affect the plaintiff's rights or interests. No question now arises about whether the plaintiff may lawfully be detained for the purposes of his removal. It follows that the arguments advanced by the parties about overruling or distinguishing the decision in Al-Kateb v Godwin219 and about the constitutional limits of the power to detain unlawful non-citizens need not be examined. 217 (2010) 243 CLR 319. 218 (2011) 244 CLR 144. 219 (2004) 219 CLR 562; [2004] HCA 37. Hayne The questions asked by the parties and referred for consideration by the Full Court should be answered as follows: Question 1 In furnishing the 2012 assessment, did the First Defendant fail to comply with the requirements of procedural fairness? Answer It is not necessary to answer this question. Question 2 Does s 198 of the Migration Act 1958 (Cth) authorise the removal of the Plaintiff, being a non-citizen: to whom Australia owes protection obligations under the Refugees Convention as amended by the Refugees Protocol; and 2.2 whom ASIO has assessed poses a direct or indirect risk to security; to a country where he does not have a well-founded fear of persecution for the purposes of Article 1A of the Refugees Convention as amended by the Refugees Protocol? Answer It is not necessary to answer this question. Question 2A should be amended to read: If the plaintiff's application for a protection visa is refused by reason of the plaintiff's failure to satisfy public interest criterion 4002 within the meaning of clause 866.225 of Schedule 2 of the Migration Regulations 1994, is that clause to that extent ultra vires the power conferred by section 31(3) of the Migration Act 1958 (Cth) and invalid? and answered The prescription of public interest criterion 4002 as a criterion for the grant of a protection visa is beyond the power conferred by s 31(3) of the Act and is invalid. Question 3 Hayne Do ss 189 and 196 of the Migration Act 1958 (Cth) authorise the Plaintiff's detention? Answer The plaintiff is validly detained for the purposes of the determination of his application for a protection visa. Question 4 Who should pay the costs of the special case? Answer The defendants. 228 HEYDON J. During oral argument in Al-Kateb v Godwin, McHugh J asked counsel for the appellant220: "How can you claim a right of release into the country when you have no legal right to be here?" Most of the plaintiff's arguments in this case were directed to that penetrating question. The plaintiff denied its premise, and denied the answer which the question expected. The factual background The plaintiff is a national of Sri Lanka. He began a journey by boat from Indonesia with other persons wishing to claim asylum in Australia. The boat was intercepted. The plaintiff was transferred to a detention centre in Indonesia. In December 2009, he entered Australia at Christmas Island pursuant to a special purpose visa. That visa expired 50 minutes after his arrival. The plaintiff has not since possessed a visa. He has not been "immigration cleared". When his visa expired he was detained pursuant to s 189(3) of the Migration Act 1958 (Cth) ("the Act")221. That was because he was known or reasonably suspected to be an unlawful non-citizen in an excised offshore place, namely Christmas Island222. The plaintiff has since been transferred to a detention centre on the Australian mainland. There he is detained pursuant to ss 189(1) and 196(1) of the Act223. That is because he is known or reasonably suspected to be an unlawful non- citizen in the migration zone (that is, in a part of Australia other than an excised offshore place)224. In 2009, the Australian Security Intelligence Organisation ("ASIO") made an adverse security assessment of the plaintiff ("the 2009 assessment"). The 2009 assessment was that the plaintiff was directly or indirectly a risk to Australia's security within the meaning of s 4 of the Australian Security Intelligence Organisation Act 1979 (Cth) ("the ASIO Act")225. ASIO forwarded this adverse security assessment to the Department of Immigration and Citizenship. 220 (2004) 219 CLR 562 at 565; [2004] HCA 37. 221 See above at [152] n 173. 222 Migration Act 1958 (Cth), ss 5(1) (definition of "excised offshore place") and 14 (definition of "unlawful non-citizen"). 223 See above at [177]. 224 Migration Act 1958 (Cth), s 5(1) (definition of "migration zone"). 225 See above at [203]. A delegate of the Minister for Immigration and Citizenship then refused to grant the plaintiff a protection visa. That refusal was based on public interest criterion 4002 in Sched 4 of the Migration Regulations 1994 (Cth) ("the Regulations"). Public interest criterion 4002 is: "The applicant is not assessed by [ASIO] to be directly or indirectly a risk to security, within the meaning of section 4 of the [ASIO Act]." As the plaintiff did not satisfy this criterion, the delegate found that the plaintiff did not meet the requirements of cl 866.225(a) of Sched 2 of the Regulations. Under that clause, an applicant cannot be granted a protection visa unless the applicant satisfies public interest criteria 4001, 4002 and 4003A. However, the delegate found that the plaintiff had a well-founded fear of persecution in Sri Lanka by reason of his race and the political opinions imputed to him. The delegate also found that were the plaintiff to return to Sri Lanka there was a real chance that he would be persecuted by being abducted, tortured or killed. The Refugee Review Tribunal affirmed the delegate's decision. The plaintiff has no right to enter and remain in any country (other than Sri Lanka). He thus has no right to enter and remain in any safe third country within the meaning of s 91D of the Act. The plaintiff was dissatisfied with the interview that led to the 2009 assessment. In 2011, ASIO officers interviewed the plaintiff for the purpose of making a new security assessment. The plaintiff's lawyer was present. On 9 May 2012, the Director-General of Security issued another adverse security assessment ("the 2012 assessment"). On the same day, ASIO furnished the Department of Immigration and Citizenship with it. The 2012 assessment concluded that the plaintiff was directly or indirectly a risk to security within the meaning of s 4 of the ASIO Act. In consequence, the plaintiff remained unable to satisfy public interest criterion 4002 and cl 866.225(a) of Sched 2 of the Regulations. The plaintiff concedes that he is being detained for the purpose of removal from Australia. The Department of Immigration and Citizenship does not intend to remove the plaintiff to Sri Lanka. The Commonwealth Executive has made efforts to find a safe third country to which the plaintiff can be removed. Some efforts have not succeeded. The success of others remains in suspense. The Executive plans to continue those efforts. The controversy in outline The defendants – the Director-General of Security; the Officer in Charge, Melbourne Immigration Transit Accommodation; the Secretary, Department of Immigration and Citizenship; the Minister for Immigration and Citizenship; and the Commonwealth of Australia – will be referred to collectively as "the Commonwealth". The Commonwealth advanced two key arguments. The first was that s 198(2) of the Act creates a duty to "remove" the plaintiff "as soon as reasonably practicable" because he is an "unlawful non-citizen" of the kind described in s 198(2)226. Although Australia owes him protection obligations, he is an unlawful non-citizen because he has been refused a visa for failure to satisfy public interest criterion 4002. The second was that s 196(1) makes it lawful to keep the plaintiff in immigration detention until removal can be effected under s Under the refining pressure of oral debate, the plaintiff's attack on the Commonwealth's position came to rest on four arguments. The first argument was that ASIO's decision to issue a second adverse security assessment had been vitiated by a failure to accord the plaintiff procedural fairness. He submitted that the critical issues on which the decision turned had not been put to him during his interview with the ASIO officers. The second argument was that s 198(2) does not apply to the plaintiff. The Minister's delegate and the Refugee Review Tribunal concluded that the plaintiff had a well-founded fear of persecution for a Convention reason. Hence Australia owes him protection obligations under the Convention Relating to the Status of Refugees and the Protocol Relating to the Status of Refugees ("the Convention"), as embodied in the Act. The plaintiff submitted that s 198(2) should be read down to "facilitate and reflect" Australia's Convention obligations as embodied in the Act. If s 198(2) is read down in that way, he argued, it does not apply to him. The plaintiff submitted that because he is owed protection obligations he cannot be removed from Australia pursuant to s 198(2). Accordingly, the Commonwealth cannot expel him for non-compliance with public interest criterion 4002 unless it complies with the procedure established by s 500(1)(c) of the Act. The third argument was put in the alternative to the second. If the second submission were wrong, the plaintiff submitted that he could not be removed from Australia for non-satisfaction of public interest criterion 4002 because that criterion is ultra vires the Act. If either the second or the third arguments succeeded, the plaintiff submitted that his continued detention is unlawful. The plaintiff is detained under s 196(1) so as to enable his removal pursuant to 226 See above at [177]. 227 See above at [177]. s 198(2). In the plaintiff's submission, if the Act confers no power to remove him, his detention has no statutory basis. In the event that the first three arguments failed, the plaintiff put a fourth argument. It was that it could be inferred from the failed efforts of the Department of Immigration and Citizenship to remove him that it was not reasonably practicable to do so. His continued detention would therefore be detention for an unlimited period. The plaintiff submitted that this is unlawful. This argument depended on distinguishing or overruling Al-Kateb v Godwin228. It is convenient to deal with these issues in that order. Each should be resolved in favour of the Commonwealth. Question 1 in the Further Amended Special Case: procedural fairness Question 1 in the Further Amended Special Case is: "In furnishing the 2012 assessment, did the First Defendant fail to comply with the requirements of procedural fairness?" The first defendant, the Director-General of Security, swore an affidavit in these proceedings. In that affidavit he said: "Based on ASIO's investigations, I assessed that the plaintiff: was a voluntary and active member of the Liberation Tigers of Tamil Eelam (LTTE) Intelligence Wing from 1996-1999, with responsibilities identifying Sri Lankan Army collaborators, which he was aware likely led to extrajudicial killings, and maintained further intelligence involvement activities on behalf of the LTTE from 1999-2006; including deliberately withheld information regarding his activities of security concern and provided mendacious information throughout the security assessment process in order to conceal such activities; and remains supportive of the LTTE and its use of violence to achieve its political objectives, and will likely continue to support LTTE activities of security concern in and from Australia." The affidavit continues: "I assessed the plaintiff to be directly or indirectly a risk to Australia's security, within the meaning of section 4 of the ASIO Act." 228 (2004) 219 CLR 562. Like the 2009 assessment, the 2012 assessment caused the plaintiff not to satisfy public interest criterion 4002. It thus had a dramatic effect on the plaintiff's liberty. For that reason, the Commonwealth conceded that ASIO owed the plaintiff an obligation of procedural fairness in the making of the 2012 assessment. The question in these proceedings is whether that obligation was breached. The plaintiff's written submissions centred on a contention that the obligation was breached because the ASIO officers failed to disclose the following allegations: that the plaintiff maintained further involvement with LTTE Intelligence activities from 1999-2006; that the plaintiff remains supportive of the LTTE's use of violence to achieve political objectives; and that the plaintiff is likely to continue to support the LTTE activities of security concern in and from Australia." The plaintiff submitted that the ASIO officers mistakenly assumed that he bore the "evidentiary onus" of satisfying them that he was not a threat to national security. This, according to the plaintiff, caused the ASIO officers not to put the three allegations to him. In oral argument, the plaintiff did not press his claim that procedural fairness was denied in relation to pars (a) and (b) of the Director-General's affidavit. There was in truth copious questioning on those subjects. The plaintiff was asked whether he was a voluntary and active member of the LTTE Intelligence Wing from 1996 to 1999. He was asked whether his responsibilities included identifying Sri Lankan Army collaborators. He was asked whether he was aware that his identifications of Sri Lankan Army collaborators had probably led to extrajudicial killings. He was asked whether he maintained further involvement in intelligence activities on behalf of the LTTE from 1999 to 2006. He was asked whether he had deliberately withheld information regarding his activities of security concern during the interview. He was asked whether he had provided mendacious information during the interview. He was asked whether his purpose in withholding information and providing mendacious information was to conceal his activities with the LTTE. In oral argument, counsel for the plaintiff accepted that the only important matter which the ASIO officers had not raised with the plaintiff was the material in par (c) of the quotation from the Director-General's affidavit set out above. Paragraph (c) related to the extent to which the plaintiff remained supportive of LTTE violence. The plaintiff accepted that national security considerations might legitimately result in ASIO officers not fully raising matters with a person in his position229. But he submitted that there was no evidence that national security considerations had been applied to this effect in his case. There is a concrete difficulty in the plaintiff's position. Counsel for the plaintiff submitted that if the allegation in par (c) had been put to him, he might have disputed its truth. He might have said that "he was not [sic] and would not continue to support the activities in Australia, that things had fundamentally changed in Sri Lanka, that the context was fundamentally different in the context of the civil war which had now finished and that in a different environment things were completely different, including the disbandment of the LTTE." There was no evidence before the Court to this effect. No agreed fact supported the submission. The debate thus took on an abstract air. The interview was largely directed to the plaintiff's dealings with the LTTE. The plaintiff was accompanied by his lawyer. The interview ran from 9.30am to 2.35pm. There were three breaks in the interview – from 10.35- 10.45am, 12.00-12.15pm and 1.15-1.40pm. The plaintiff could have consulted her during those breaks. The plaintiff was offered a break at any time he desired. The plaintiff was given a number of opportunities to explain obscurities, or inconsistencies between what he was saying and what he had said on earlier occasions or earlier in the interview. One interviewer told the plaintiff: "I would like to understand your activities and your involvement with the LTTE, this is your opportunity to talk, to tell us about that and to tell us what you think we should know about that." A full answer to that request would have dealt not only with the plaintiff's past activities, but also with his present relationship with the LTTE. The interviewers repeatedly made it plain that it was incumbent on the plaintiff to answer their questions fully and honestly. They also made it plain that they did not believe the plaintiff's assertions that he had been pressed into service with the LTTE and that he had not supported it. The interviewers identified reasons for their disbelief – for example, inconsistencies and belated explanations. The plaintiff was thus on notice that his account of involuntary service with the LTTE was not being accepted. The contrary of involuntary service is voluntary service. In the circumstances, the interviewers' statements of disbelief in the plaintiff's claim of involuntary service were not to be understood as assertions that their minds were in a state of sceptical equipoise. They were to be understood as assertions that the interviewers were inferring voluntary service. 229 The ASIO Act owes its origins to the Reports of a Royal Commission presided over by Mr Justice Hope. Section 36(b) of the ASIO Act reflects the observation of the Commission's Second Report at [134]: "The understandable desire of individuals to have all the rules of natural justice applied to security appeals must be denied to some extent, unfortunate though this may be." It is highly unlikely that the plaintiff's position would be different if the interviewers had stated the par (c) allegation and said: "We may reach that conclusion. What do you say to that?" That question would have rested on the premise that the plaintiff had once supported the LTTE. The plaintiff had persistently denied that premise. There was no obligation on the interviewers to ask the plaintiff: "We know you deny ever having supported the LTTE. But in case we disbelieve you on that and believe that you did support the LTTE in the past, do you remain supportive?" The Commonwealth correctly submitted that questioning of that kind would have been "futile", "utterly pointless" and "farcical". It follows that the interviewers did not in substance deny the plaintiff procedural fairness in the manner alleged. Question 2 in the Further Amended Special Case: does s 198 authorise the plaintiff's removal? Question 2 is: "Does s 198 of the [Act] authorise the removal of the Plaintiff, being a non-citizen: to whom Australia owes protection obligations under [Convention]; and the 2.2 whom ASIO has assessed poses a direct or indirect risk to security; to a country where he does not have a well-founded fear of persecution for the purposes of Article 1A of the [Convention]?" This question assumes that public interest criterion 4002 is valid. If question 2 were answered "Yes", question 2A arises. It concerns the validity of public interest criterion 4002. The relevant Articles of the Convention. It is useful at the outset to set out the three Articles of the Convention which are relevant to this question. Article 1F provides: "The provisions of this Convention shall not apply to any person with respect to whom there are serious reasons for considering that: he has committed a crime against peace, a war crime, or a crime against humanity, as defined in the international instruments drawn up to make provision in respect of such crimes; he has committed a serious non-political crime outside the country of refuge prior to his admission to that country as a refugee; he has been guilty of acts contrary to the purposes and principles of the United Nations." Article 32 provides: The Contracting States shall not expel a refugee lawfully in their territory save on grounds of national security or public order. The expulsion of such a refugee shall be only in pursuance of a decision reached in accordance with due process of law. Except where compelling reasons of national security otherwise require, the refugee shall be allowed to submit evidence to clear himself, and to appeal to and be represented for the purpose before competent authority or a person or persons specially designated by the competent authority. The Contracting States shall allow such a refugee a reasonable period within which to seek legal admission into another country. The Contracting States reserve the right to apply during that period such internal measures as they may deem necessary." And Art 33 provides: "1. No Contracting State shall expel or return ('refouler') a refugee in any manner whatsoever to the frontiers of territories where his life or freedom would be threatened on account of his race, religion, nationality, membership of a particular social group or political opinion. The benefit of the present provision may not, however, be claimed by a refugee whom there are reasonable grounds for regarding as a danger to the security of the country in which he is, or who, having been convicted by a final judgment of a particularly serious crime, constitutes a danger to the community of that country." The plaintiff's case. The plaintiff's case relied on the finding of the delegate and of the Refugee Review Tribunal that he was a "refugee" within Art 1A(2) of the Convention. That is, their finding was that he was a person who: "owing to well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country". Because of that finding, the plaintiff satisfied the criterion for a protection visa stated in s 36(2)(a) of the Act230, namely that the Minister be satisfied that Australia has "protection obligations" under the Convention in respect of him. The plaintiff pointed out that s 500(1) of the Act makes special provision for review of certain decisions by the Administrative Appeals Tribunal ("the AAT"): "(1) Applications may be made to the [AAT] for review of: decisions of a delegate of the Minister under section 501; or a decision to refuse to grant a protection visa, or to cancel a protection visa, relying on one or more of the following Articles of the ... Convention, namely, Article 1F, 32 or The plaintiff argued that s 198 is directed only to "unlawful non-citizens". An "unlawful non-citizen" is a non-citizen in the migration zone who does not hold a visa: s 14 of the Act. He argued that a person cannot be both a person to whom Australia owes protection obligations under s 36(2)(a) and an unlawful non-citizen within the meaning of s 14 unless a decision under the Act to refuse to grant or to cancel a protection visa has been made. He contended that the only Articles in the Convention permitting expulsion of persons to whom Australia owes protection obligations are Arts 32 and 33(2). He argued that s 500(1)(c) creates a special regime that applies to decisions to refuse or cancel protection visas in reliance on those Articles. In the plaintiff's submission, if the route that s 500(1)(c) provides for is employed, a person to whom Australia owes protection obligations can validly be removed under s 198. But if it is not employed, there is no power to remove the person. In short, the plaintiff submitted that the general power of removal under s 198(2) is not triggered by a decision to refuse a protection visa to an unlawful non-citizen to whom Australia owes protection obligations without going through the special kind of process and review that s 500(1)(c) contemplates. He argued that the decision refusing to grant him a protection visa on the ground of non- compliance with public interest criterion 4002 was not a decision "relying on" Arts 32 or 33(2). The Minister's delegate made two relevant findings. The first was that Art 1F had no application. The second was that the 2009 assessment was not of itself sufficient to bring Art 33(2) into play. The Refugee Review Tribunal accepted both these findings as correct. The Commonwealth expressly 230 See below at [264]. accepted that the second finding was correct. The plaintiff argued that in the absence of a decision "relying on" Arts 32 or 33(2), s 198 does not apply. The distinction between refugee status and the entitlement to a visa. The Commonwealth correctly submitted that the plaintiff's argument was afflicted by a fatal flaw. The argument did not deal with a crucial distinction between two states of affairs. The first state of affairs is a person's well-founded fear of persecution within the meaning of Art 1A(2). The second state of affairs is the entitlement of that person to a visa permitting residence in Australia. The first state of affairs gives the person refugee status, and from it there flow various obligations which Australia owes to other parties to the Convention. Two of these are the obligations that Arts 32 and 33 of the Convention create. But it does not follow from the first state of affairs, or from Australia's international obligations to the other parties to the Convention, that the relevant person has any entitlement to a visa. That person's entitlement to a visa depends on the Act alone. In the absence of legislation, the Convention has no effect on the rights and duties of individuals or of the Commonwealth under Australian municipal law. The plaintiff relied on statements in this Court that the Act proceeds on the assumption that Australia has protection obligations to individuals. He also relied on statements in this Court that the Act contains an elaborate and interconnected set of provisions directed to meeting those obligations, in particular, by not returning those individuals to countries in relation to which they have a well-founded fear of persecution for a Convention reason231. The plaintiff submitted that the Act should be construed in a way that facilitates Australia's compliance with its Convention obligations, to the extent that the text and context of the relevant provisions permit232. Those submissions may be accepted for the purpose of the proceedings. However, the legislature may well decide not to adopt the whole of a treaty that the Executive has entered. "[T]he purposes of international instruments are not necessarily to be pursued at all costs."233 "The purpose of an instrument may instead be pursued in a limited way, reflecting the accommodation of differing viewpoints, the desire for limited achievement of objectives, or the constraints 231 The plaintiff relied on Plaintiff M61/2010E v The Commonwealth (2010) 243 CLR 319 at 339 [27]; [2010] HCA 41; Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 244 CLR 144 at 174 [44] and 189 [90]; [2011] HCA 32. 232 The plaintiff relied on Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 244 CLR 144 at 192 [98]. 233 Western Australia v Ward (2002) 213 CLR 1 at 283 n 833 per Callinan J; [2002] HCA 28. imposed by limited resources."234 The authorities which the plaintiff relied on did not state that the Act gives effect to the whole of the Convention. It is notorious that it does not. The relevant question is what the Act provides, not the Convention. The visa regime under the Act. What regime, then, does the Act create in relation to visas? Section 4(1) of the Act provides: "The object of this Act is to regulate, in the national interest, the coming into, and presence in, Australia of non-citizens." Section 4(2) provides: "To advance its object, this Act provides for visas permitting non-citizens to enter or remain in Australia and the Parliament intends that this Act be the only source of the right of non-citizens to so enter [sic] or remain." The visa category that is relevant to the plaintiff is protection visas. Section 36(2) relevantly provides: "A criterion for a protection visa is that the applicant for the visa is: a non-citizen in Australia to whom the Minister is satisfied Australia has protection obligations under the ... Convention". (emphasis added) Hence the existence of protection obligations on the part of Australia is a necessary but not a sufficient condition for the grant of a protection visa. Section 31(3) provides: "The regulations may prescribe criteria for a visa or visas of a specified class (which, without limiting the generality of this subsection, may be a class provided for by section ... 36 ...)." Section 65(1) provides: "After considering a valid application for a visa, the Minister: if satisfied that: the health criteria for it (if any) have been satisfied; and 234 Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225 at 248 per Dawson J; [1997] HCA 4. (iii) the other criteria for it prescribed by this Act or the regulations have been satisfied; and the grant of the visa is not prevented by section 40 ..., 500A ..., 501 ... or any other provision of this Act or of any other law of the Commonwealth; and any amount of visa application charge payable in relation to the application has been paid; is to grant the visa; or if not so satisfied, is to refuse to grant the visa." The criteria the Regulations prescribe will be likely to extend beyond the criterion of being a person to whom Australia has protection obligations. Otherwise the grant by s 31(3) of regulation-making power in relation to protection visas would be pointless. The s 31(3) regulation-making power was used to introduce regulations at the same time as the Migration Reform Act 1992 (Cth) came into force in 1994. Those regulations listed various criteria of which the Minister had to be satisfied when making the decision to grant a visa. The form of those criteria has often changed, but their substance survives. One criterion was that the applicant was a person to whom Australia owed protection obligations under the Convention: Migration Regulations 1994, Sched 2, cl 866.221. Another was that a Commonwealth medical officer had examined the applicant: cl 866.223. Another was that the applicant had undergone a chest x-ray examination: cl 866.224. Another was that the grant of the visa be in the national interest: cl 866.226. And another was that the applicant satisfied public interest criteria Public interest criterion 4001 required satisfaction that nothing in s 501 of the Act (the character test) justified a decision to refuse to grant a visa. Public interest criterion 4002 was not then identical to its present form235 but it also related to security. Public interest criterion 4003 related to persons whose presence in Australia would prejudice foreign relations. And public interest criterion 4004 related to indebtedness to the Commonwealth. None of these public interest criteria related or relate to whether the applicant was or is owed protection obligations. And none relate in terms to whether the applicant falls 235 For its present form, see above at [231]. Its original form was: "The applicant is not assessed by the competent Australian authorities to be directly or indirectly a risk to Australian national security." within Arts 1F, 32 or 33 of the Convention, save that there is an overlap between those Articles and parts of the character test236. The regulations just described go to the question of whether the applicant is to receive a visa. They do not go to the question of Australia's compliance with its international obligations. Whatever international obligations Australia owed to other parties to the Convention in respect of the plaintiff, the plaintiff had no entitlement to remain in Australia without a visa. The Commonwealth correctly contended that one criterion referred to in s 65(1)(a)(ii) was the Minister's satisfaction that cl 866.225(a) of Sched 2 of the Regulations, read with public interest criterion 4002 of Sched 4 of the Regulations, was met. The plaintiff did not meet that criterion. The Minister refused to grant him a visa. Since the plaintiff had no visa, the Act imposes a duty under s 189(1) to detain him. It imposes a duty under s 196 to keep him in detention until he is removed, deported or granted a visa. And it imposes a duty under s 198 to remove him as soon as reasonably practicable. Sections 31(3), 36(2) and 65(1) of the Act all had counterparts in the Migration Reform Act 1992 (Cth). So did the other provisions central to this case – ss 189, 196 and 198 of the Act. The scheme these provisions create is exhaustive in that it leaves no room for an unlawful non-citizen – a non-citizen without a visa – to be entitled to remain. The exhaustive character of the scheme is supported by many parts of the Explanatory Memorandum to the Migration Reform Bill 1992. Those parts can be summarised in the following two passages. The first states that the "general principle" of the legislation was "that the visa should be the basis of a non-citizen's right to remain in Australia lawfully."237 The second passage states that the aim of the legislation was "to simplify the removal process so that all persons unlawfully in Australia will be subject to removal from the country."238 In Al-Kateb v Godwin, the scheme so 236 The extent of the overlap depends on the nature of the applicant's criminal record and on s 501(6)(d)(v) of the Act. See below at [301]. In some respects, s 501(6)(d)(v) may be wider than Arts 32 and 33, because it refers not only to a danger to the Australian community, but to danger to a "segment" of it. This may contrast with "national security or public order" (Art 32(1)) or "a danger to the security of the country ... or ... a danger to the community of that country" (Art 33(2)). 237 Australia, House of Representatives, Migration Reform Bill 1992, Migration (Delayed Visa Applications) Tax Bill 1992, Explanatory Memorandum at 18 [27]. 238 Australia, House of Representatives, Migration Reform Bill 1992, Migration (Delayed Visa Applications) Tax Bill 1992, Explanatory Memorandum at 10 [55]. (Footnote continues on next page) created was described as effecting "a radical change"239 in Australia's approach to asylum seekers. That change was summarised thus240: "These provisions for the mandatory detention of unlawful non- citizens applied regardless of whether the person concerned was seeking permission to remain in Australia (whether as a refugee or otherwise). They applied even if the person concerned had entered Australia with permission but that permission had later terminated. All who did not have a valid permission to enter and remain in Australia were 'unlawful non-citizens' and were to be detained." (emphasis added) The plaintiff's argument that some unlawful non-citizens cannot lawfully be detained or removed would leave a hole in the statutory scheme. Yet the Explanatory Memorandum explained that the scheme precluded that possibility. One problem for the plaintiff is that he could not point to a specified statutory exception creating a hole of that kind in his favour. Another problem for the plaintiff is that the Act requires him to have a visa. That in turn calls on him to satisfy all necessary criteria for the grant of a visa. Satisfaction of one of them, the s 36(2) criterion, is not enough. A third problem lies in dicta that even if a non-citizen is found to be a refugee, removal of that person under s 198(2) is possible provided, as the Commonwealth conceded, Arts 32 and 33(2) are complied with241. The High Court authorities. The Commonwealth submitted that it is one thing to meet the definition of "refugee" in Art 1A(2) of the Convention, but it is another thing to be received as a refugee by a party to the Convention. There is ample authority in this Court and in the Federal Court of Australia to support that submission. See also at 2 [8], 3 [12], 4 [15]-[18], 9 [48], 10 [54] and 18 [25]. Two other parts are quoted in NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 175-176 [40]; [2005] HCA 6. That case traces the history of how refugee status was determined, from the pre-1980 position to the present position which came into effect in 1994: see at 239 (2004) 219 CLR 562 at 633 [204] per Hayne J. 240 (2004) 219 CLR 562 at 633-634 [207]. 241 Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 244 CLR 144 at 178 [54], 189 [89], 190 [91] and 190-191 [94]. This Court has described the position before the Convention was made as follows. In Minister for Immigration and Multicultural Affairs v Ibrahim, Gummow J (with whom Gleeson CJ and Hayne J agreed) said242: "[I]t has long been recognised that, according to customary international law, the right of asylum is a right of States, not of the individual; no individual, including those seeking asylum, may assert a right to enter the territory of a State of which that individual is not a national. The proposition that every State has competence to regulate the admission of aliens at will was applied in Australian municipal law from the earliest days of this Court."243 Gummow J described the position in relation to the Convention in Applicant A v Minister for Immigration and Ethnic Affairs. That oft-cited analysis has never been doubted in this Court. He said244: "[D]ecisions to admit persons as refugees to the territory of member states are left to those states." Gummow J then pointed out that this state of affairs was accepted in recommendation D of the Final Act of the United Nations Conference at Geneva in 1951. That Conference agreed on the Convention. Recommendation D stated: "Governments continue to receive refugees in their territories and that they act in concert in a true spirit of international cooperation in order that these refugees may find asylum and the possibility of resettlement." This was not a recommendation that refugees necessarily find asylum and resettlement in the territories in which they are received. Gummow J approved the following statement of Lord Mustill in T v Home Secretary245: "[A]lthough it is easy to assume that the appellant invokes a 'right of asylum', no such right exists. Neither under international nor English municipal law does a fugitive have any direct right to insist on being received by a country of refuge. Subject only to qualifications created by statute this country is entirely free to decide, as a matter of executive discretion, what foreigners it allows to remain within its boundaries." 242 (2000) 204 CLR 1 at 45 [137]; [2000] HCA 55. See, to the same effect, NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 169 [14]. 243 Robtelmes v Brenan (1906) 4 CLR 395; [1906] HCA 58. 244 (1997) 190 CLR 225 at 273 citing Sale v Haitian Centers Council 509 US 155 (1993) and T v Home Secretary [1996] AC 742. 245 [1996] AC 742 at 754: see (1997) 190 CLR 225 at 273-274. The last sentence demonstrates the need to inquire what restraint on executive discretion the Act creates. Gummow J continued246: "The Convention resolves in a limited fashion the tension between humanitarian concerns for the individual and that aspect of state sovereignty which is concerned with exclusion of entry by non-citizens, '[e]very society [possessing] the undoubted right to determine who shall compose its members'247." Gummow J then quoted with approval the following observation of Lord Goff of Chieveley and Lord Hoffmann248: "Refugee status is thus far from being an international passport which entitles the bearer to demand entry without let or hindrance into the territory of any contracting state. It is always a status relative to a particular country or countries." And Gummow J quoted the following remarks of a commentator with approval249: "[The] framers [of the Convention] sought to guard the sovereign right to determine who should be allowed to enter a State's territory and the instrument was designed to deal with refugees already in third States' territories as a result of World War II and its aftermath. The Convention only obliges State parties to guarantee non-refoulement or non return to the place of persecution. It does not guarantee asylum in the sense of permanent residence or full membership of the community, nor does it guarantee admission to potential countries of asylum. Rather, the Convention establishes a regime of temporary or interim protection." Thus the Convention does not detract "from the right of a Contracting State to determine who should be allowed to enter its territory."250 In Australian 246 (1997) 190 CLR 225 at 274. 247 Robtelmes v Brenan (1906) 4 CLR 395 at 413. 248 Nguyen Tuan Cuong v Director of Immigration [1997] 1 WLR 68 at 79: see (1997) 190 CLR 225 at 274. 249 Mathew, "Sovereignty and the Right to Seek Asylum: The Case of Cambodian Asylum-Seekers in Australia", (1994) 15 Australian Year Book of International Law 35 at 54-55: see (1997) 190 CLR 225 at 274. law, "absent some authority conferred by statute, aliens have no right to enter or reside in Australia"251. The relevant statute is the Act. It controls entry by a visa regime. Section 65 regulates the grant of visas. Section 65 creates requirements additional to refugee status before a person can be granted a protection visa. Recognition by a delegate of the Minister and by the Refugee Review Tribunal of a person as a refugee does not in Australia confer a right to asylum in the sense that that person is permitted to live and work in Australia. It confers a right of refuge. That right of refuge may be temporary. McHugh and Gummow JJ confirmed what was said in Applicant A v Minister for Immigration and Ethnic Affairs in Minister for Immigration and Multicultural Affairs v Khawar. Their Honours said252: "The term 'asylum' does not appear in the main body of the text of the Convention; the Convention does not impose an obligation upon Contracting States to grant asylum or a right to settle in those States to refugees arriving at their borders." (footnote omitted) Their Honours approved the following statement of a commentator253: "States the world over consistently have exhibited great reluctance to give up their sovereign right to decide which persons will, and which will not, be admitted to their territory, and given a right to settle there. They have refused to agree to international instruments which would impose on them duties to make grants of asylum. Today, the generally accepted position would appear to be as follows: States consistently refuse to accept binding obligations to grant to persons, not their nationals, any rights to asylum in the sense of a permanent right to settle. Apart from any limitations which might be imposed by specific treaties, States have been adamant in maintaining that 250 NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 170 [16] per Gleeson CJ, McHugh, Gummow, Hayne, Callinan and Heydon JJ. 251 Al-Kateb v Godwin (2004) 219 CLR 562 at 613 [139] per Gummow J, citing Ex parte Walsh and Johnson; In re Yates (1925) 37 CLR 36 at 81-82; [1925] HCA 252 (2002) 210 CLR 1 at 15 [42]; [2002] HCA 14. 253 Hyndman, "Refugees Under International Law with a Reference to the Concept of Asylum", (1986) 60 Australian Law Journal 148 at 153: see (2002) 210 CLR 1 at the question of whether or not a right of entry should be afforded to an individual, or to a group of individuals, is something which falls to each nation to resolve for itself." (footnotes omitted) And their Honours said254: "the Act is not concerned to enact in Australian municipal law the various protection obligations of Contracting States found in Chs II, III and IV of the Convention. The scope of the Act is much narrower." The passage lastly quoted Immigration and Multicultural Affairs v Khawar was also quoted by the majority in Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004255. The majority added256: from Minister for "Section 36, like the Convention itself, is not concerned with permanent residence in Australia or any other asylum country, or indeed entitlements to residence for any particular period at all." This rests on a distinction between a person who has refugee status and a person who has a right to residence in Australia by virtue of a visa. The majority then rejected an argument which is very similar to the plaintiff's argument in this case257: "The first respondent argued ... that once he has been accepted as a refugee he must be taken to be a refugee for all times and purposes, stressing that Chs II, III and IV which are concerned with juridical status, employment and welfare in the country of asylum, and which confer upon a refugee many of the other conventional benefits of citizenship, including rights to hold property (albeit as an alien) (Art 13), of association (Art 15), access to the courts (Art 16), to work for remuneration [Art 17], and to welfare (Arts 20-24), imply that a person, once recognised as being entitled to protection, effectively ceases to be a refugee, acquires a 'status' as an ordinary citizen, and may not be treated otherwise, or removed from Australia, or at least not removed unless and until the [Minister] establish relevantly changed circumstances in the first respondent's own or former country of residence." (footnote omitted) 254 (2002) 210 CLR 1 at 16 [45]. 255 (2006) 231 CLR 1 at 14-15 [34]; [2006] HCA 53. 256 (2006) 231 CLR 1 at 16 [36] per Gummow ACJ, Callinan, Heydon and Crennan JJ. 257 (2006) 231 CLR 1 at 19 [47]. The argument was rejected for the following reasons258: "The argument would fail even if the Act left open unqualified recourse to the articles upon which the first respondent seeks to rely for the implication. Those articles do not purport to define a refugee either for all times or purposes or at all. Nor do they touch upon how a refugee is to be defined or accorded recognition as such, or to be entitled to continue to avail himself of protection. These matters are expressly and exhaustively the subject of Art 1 of Ch I. Such consequential rights as flow from recognition as a refugee and give effect to the extent that they do to the Convention, are the subject, in part at least, of the Act under which conditions of residence can be imposed, and of other legislation, including social security and industrial legislation enacted from time to time." The Act did not incorporate into Australian municipal law the protection obligations contained in Chs II, III and IV of the Convention. It is therefore not open to the plaintiff to claim through that route, as a matter of personal rights in Australian law, rights of "free access to the courts of law" (Art 16), rights of gainful employment (Ch III) and rights to welfare (Ch IV). There are other statutory provisions which give the plaintiff rights of "free access to the courts". Even if Australian legislation had incorporated the rights in Chs III and IV, they would be available to the plaintiff only to a limited extent. The rights in Ch III extend only to refugees "lawfully" in Australia. The same is true of the rights in Arts 21, 23 and 24. The plaintiff is not "lawfully" in Australia259. It is not Convention rights which create lawful status. It is lawful status – the possession of a visa – which creates rights. And the rights it creates are only those rights which are recognised in municipal law. The Federal Court authorities. The state of authority in the Federal Court of Australia is consistent with that established by this Court. In SZ v Minister for Immigration and Multicultural Affairs260, the Full Court of the Federal Court of Australia took the same view as Gummow J in Applicant A v Minister for Immigration and Ethnic Affairs. Branson J, with whom Beaumont and Lehane JJ agreed, said261: 258 (2006) 231 CLR 1 at 19 [48]. 259 See below at [284]-[293]. 260 (2000) 101 FCR 342. 261 (2000) 101 FCR 342 at 345 [14]. "The contentions of the applicant were unequivocally based on the assumption that if he is a person to whom Australia has protection obligations under the ... Convention he has a right of asylum in Australia. This assumption is not well founded. The ... Convention provides a definition of the term 'refugee' in Art 1, but does not create any general right in a refugee to enter and remain in the territory of a Contracting State." Her Honour then quoted the passage from Lord Mustill's speech in T v Immigration Officer which was quoted above262. Branson J continued263: "The position is the same in Australia under both international law and municipal law. The position under the ... Convention is mentioned above. As is explained below, the Act does not give to a person who falls within the definition of 'refugee' in the ... Convention any right to enter or remain in Australia." Later, her Honour said264: "As I have already mentioned, the assumption made by the applicant that s 36 of the Act gives an unqualified right to remain in Australia to every person to whom Australia has protection obligations under the ... Convention is unsustainable. The assumption would be unsustainable even were it the case that such a right exists under international law." Branson J then referred to a submission that the Convention had been incorporated into Australian municipal law by s 36 of the Act. Her Honour noted265: "For the purpose of considering the validity of these contentions I will assume, contrary to the fact, that the ... Convention creates a general right in a refugee to enter and remain in the territory of a Contracting State." She continued266: 262 See above at [273]. 263 (2000) 101 FCR 342 at 346 [15]. 264 (2000) 101 FCR 342 at 347 [23]. 265 (2000) 101 FCR 342 at 347 [25]. 266 (2000) 101 FCR 342 at 348 [28]-[29]. "What s 36 of the Act does do is to make it clear that protection visas are intended to be available only to persons to whom Australia has, as a matter of Convention. That is, s 36 refers to the ... Convention for the purpose of defining by reference to its terms a criterion for the grant of a protection visa under the Act. law, protection obligations under international the However, reference in s 36(2) to '[a] criterion' implicitly recognises the possibility of additional criteria being prescribed for protection visas (see s 31(3)). Nothing in the Act limits the criteria which may be prescribed pursuant [to] s 31(3) to criteria which are consistent with Australia's international obligations under the ... Convention." Of s 65(1), Branson J said267: "it specifies matters additional to the prescribed criteria concerning which the Minister must be satisfied before he or she grants any visa. Not surprisingly, as the subsection is of general application, these matters are not derived from the ... Convention." Her Honour went on268: "Section 36 of the Act does not give an entitlement to a protection visa to every 'non-citizen in Australia to whom Australia has protection obligations under the [Convention]'. ... [A]ll entitlements to visas under the Act are dependent upon Ministerial satisfaction (s 65(1)). ... Section 189 of the Act places an obligation on every officer ... who knows or reasonably suspects that a person in the migration zone is an unlawful non-citizen to detain that person. A person detained under s 189 must be kept in immigration detention until he or she is removed from Australia, deported or granted a visa (s 196(1)). That is, as the grant of a visa is the grant of an authority to enter and remain lawfully in Australia, in the absence of a grant of a visa, a non-citizen cannot lawfully enter or remain in Australia." This reasoning has been consistently applied in the Federal Court of Australia. Thus in Patto v Minister for Immigration and Multicultural Affairs, 267 (2000) 101 FCR 342 at 348 [30]. 268 (2000) 101 FCR 342 at 349 [32]. 269 (2000) 106 FCR 119 at 127-128 [27]. "There is no right of asylum conferred by the ... Convention ... Whatever the true position at international law generally, the relevant municipal law of Australia gives effect only to protection obligations assumed by Australia as a contracting party to the ... Convention. The primary obligation arises out of the prohibition against refoulement in Art 33." In Ruddock v Vadarlis270 French J said: "Australia's status as a sovereign nation is reflected in its power to determine who may come into its territory and who may not and who shall be admitted into the Australian community and who shall not." And in M38/2002 v Minister for Immigration and Multicultural and Indigenous Affairs, Goldberg, Weinberg and Kenny JJ said271: "The ... Convention does not purport to confer a right of asylum on a refugee in a contracting state ... A refugee within the meaning of Art 1 of the ... Convention has no right under international law to insist on being received by a country of refuge". "Surrogate protection" under the Act. The following argument illustrates the confusion underlying the plaintiff's submission: "The 'protection obligations' in s 36(2) are best understood as a general expression of the precept to which the Convention gives effect – that is, that States parties are to offer surrogate protection in place of the protection of the country of nationality of which the applicant is unwilling to avail herself or himself. Quite apart from article 33, it encapsulates a range of other obligations imposed by the Convention, including articles 3, 4, 16(1), 17(1), 26 and 32 (each of which may also fairly be characterised as 'protection obligations'). 272" The examples of protection obligations given in the first of the cases the plaintiff cited, the NAGV case, were Art 4 (religious freedom), Art 11 (temporary admission to refugee seamen) and Art 16(1) (free access to courts of law). The examples of protection obligations given in the second of the cases the plaintiff cited, the Plaintiff M70 case, were Arts 3 (to apply the Convention to refugees without discrimination as to race, religion or country of origin), 4, 16(1), 17(1) 270 (2001) 110 FCR 491 at 542 [192]. 271 (2003) 131 FCR 146 at 157 [34]. 272 NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 173 [31] and Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 244 CLR 144 at 195-197 [117]- (right to engage in employment), 22(1) (right to elementary education) and 26 (right to choose residence and right of free movement). The plaintiff gave the additional example of Art 32. Many of these obligations would find support in Australian municipal law (for example, Arts 3, 4 and 16(1)). But some, such as Art 17(1), would not. Article 17(1) creates an obligation owed to other parties to the Convention in relation to refugees "lawfully" in Australia. It does not create any obligation which Australia owes to refugees in municipal law. The submission that the expression "protection obligations" in s 36(2) requires Australia to give "surrogate protection" to refugee claimants is inconsistent with the authorities examined above273. A fortiori, the Act does not so require. The essential flaw in the plaintiff's construction. The flaw in the plaintiff's construction of the Act is that it assumes that ss 500(1)(c) and 501 are the only lawful bases on which a person who satisfies the criterion in s 36(2)(a) may be removed from Australia. Sections 500(1)(c) and 501 do not so provide. And s 65(1)(a)(ii) contemplates that regulations may be made creating criteria additional to the applicant having refugee status. Section 65(1)(a)(ii) provides that the Minister, if not satisfied that the applicant meets the regulations prescribed, is obliged to refuse the visa. The plaintiff submitted that public interest criterion 4002: "is no different from any other criterion that the Executive, via Regulation, may impose, non satisfaction of which disentitles a visa applicant to be granted the visa but without intersecting with the protection obligations that the Act jealously guards." (footnote omitted) The argument raises a question. How does the criterion that Australia owes an applicant "protection obligations", which is among the s 65(1)(a)(ii) criteria, prevail over the other criteria? The correspondence or non-correspondence of Arts 32 and 33 with public interest criterion 4002 is a question which may have consequences for the validity of public interest criterion 4002. But it has no significance in respect of question 2 in the Further Amended Special Case. It is incorrect to say that the Act employs "protection obligations" to do anything more than specify one of the several criteria which must be satisfied before the Minister is obliged to grant a protection visa under s 65. Section 36(2)(a) creates "a" criterion for the grant of a protection visa. The provisions of s 65(1)(a)(ii) and (iii) assume or provide that there are others. And s 31(3) gives power to create still others by regulation. The Act contemplates that it is possible to satisfy the s 36(2)(a) criterion while not satisfying one of the other criteria. The s 36(2)(a) criterion does not trump, or negate the need to satisfy, the other criteria. In the same way, the criteria which 273 See above at [273]-[280]. prevent the grant of a protection visa other than those specified in ss 500(1)(c) and 501 are neither subordinate to nor subject to satisfaction of the criteria in ss 500(1)(c) and 501. Is the plaintiff "lawfully" in Australia for the purposes of Art 32? The plaintiff submitted that he was "lawfully" in Australia within the meaning of the Convention. There is authority that in the Convention "lawful" refers to what is "lawful according to the domestic laws of the contracting state"274. It is immaterial that some of this authority was decided in jurisdictions with refugee law structured differently from the Act. The issue is what Art 32 means as a matter of international law. If a construction of the Convention is available that conforms to any generally accepted construction in the courts of parties to the Convention, this Court will seek to adopt it275. The authorities in question are correct for the following reasons. The words "lawfully in" mean more than "in". They require more than mere presence, or tolerated presence. They require presence which is lawful according to the municipal law of the State in which the refugee is present276. Article 31(1) provides: 274 R (ST) v Home Secretary [2012] 2 WLR 735 at 750 [40]; [2012] 3 All ER 1037 at 1054 per Lord Hope of Craighead DPSC (Baroness Hale of Richmond and Lords Brown of Eaton-under-Heywood, Mance, Kerr of Tonaghmore and Clarke of Stone-cum-Ebony JJSC concurring) (affirming the unanimous decision of the Court of Appeal (R (ST) v Home Secretary [2010] 1 WLR 2858; [2010] 4 All ER 314 and the decision of the House of Lords in R v Home Secretary; Ex parte Bugdaycay [1987] AC 514 at 526). See also Simsek v Macphee (1982) 148 CLR 636 at 644-645; [1982] HCA 7; NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 171 [21]; Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004 (2006) 231 CLR 1 at 19 [49]; Minister for Immigration and Multicultural Affairs v Thiyagarajah (1997) 80 FCR 543 at 557 (this point was not disturbed on appeal in Minister for Immigration and Multicultural Affairs v Thiyagarajah (2000) 199 CLR 343; [2000] HCA 9); Rajendran v Minister for Immigration and Multicultural Affairs (1998) 86 FCR 526 at 530-531; Kan Kam Lin v Rinaldi 361 F Supp 177 (1973, USDCDNJ), affirmed 493 F 2d 1229 (1974, 3rd Cir CA); Chim Ming v Marks 367 F Supp 673 (1973, USDCSDNY), affirmed 505 F 2d 1170 (1974, 2nd Cir CA). 275 Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004 (2006) 231 CLR 1 at 15 [34]. 276 R (ST) v Home Secretary [2012] 2 WLR 735 at 747-748 [31]-[32]; [2012] 3 All ER "The Contracting States shall not impose penalties, on account of their illegal entry or presence, on refugees who, coming directly from a territory where their life or freedom was threatened in the sense of article 1, enter or are present in their territory without authorization, provided they present themselves without delay to the authorities and show good cause for their illegal entry or presence." In that Article, "illegal" and "without authorization" refer to illegality in domestic law. That suggests that "lawfully" in Art 32(1) refers to legality in domestic law as well277. Further, Art 32 of the Convention uses the same language as Art 31 of the Stateless Persons Convention. The latter obliges parties not to "expel a stateless person lawfully in their territory save on grounds of national security or public order." In Al-Kateb v Godwin278, Gummow J held that Art 31 was of no assistance to the appellant in that case. He had arrived in Australia without a visa and had never received a visa. The meaning of "lawfully" is likely to be the same in both Art 31 of the Stateless Persons Convention and Art 32 of the Convention. A State party is only obligated to afford refugees various Convention rights if those refugees are "lawfully in" its territory. That suggests that the test is lawfulness by that State's municipal law. Thus, for example, Art 26 compels a Contracting State to accord to refugees "lawfully in" its territory the right to choose their place of residence and the right to move freely. As Lord Hope of Craighead DPSC has observed (Baroness Hale of Richmond and Lords Brown of Eaton-under-Heywood, Mance, Kerr of Tonaghmore and Clarke of Stone-cum- Ebony JJSC concurring)279: "It seems unlikely that the contracting states would have agreed to grant to refugees the freedom to choose their place of residence and to move freely within their territory before they themselves had decided, according to their own domestic laws, whether or not to admit them to the territory in the first place." The Ad Hoc Committee on Statelessness and Related Problems, which drafted Art 32, twice stated that the words "lawfully within their territory" exclude persons who were lawfully admitted but who had overstayed the period 277 Chim Ming v Marks 505 F 2d 1170 (1974, 2nd Cir CA). 278 (2004) 219 CLR 562 at 603 [106]. 279 R (ST) v Home Secretary [2012] 2 WLR 735 at 750 [37]; [2012] 3 All ER 1037 at they were permitted to remain280. There was a dispute as to whether the lawful presence necessary to attract Art 32 could be brief or should be longer. It was contended, as the plaintiff submitted, that lawful presence should bear a wide meaning. But in the result it was common ground that though Art 32 "was meant to be broad", some presence which was lawful in municipal law was necessary281. The Supreme Court of the United Kingdom concluded that nothing in the travaux préparatoires indicated that the States framing the Convention wished to surrender control over those seeking to enter their territories to the extent that the plaintiff's interpretation of Art 32 requires282. To construe Art 32 as applying only in favour of those who are present in accordance with the requirements of municipal law is not to leave the Convention a nullity. Article 32(2) gives the persons referred to in Art 32(1) rights despite their illegal presence. Article 33 protects those illegally present as well as those legally present283. The Commonwealth relied on the opinion of the United Nations Human Rights Commissioner to the effect that the lawfulness of a refugee's stay in a Contracting State is to be judged by reference to that State's municipal law284. However, the United Nations Human Rights Committee later said285: "The question whether an alien is 'lawfully' within the territory of a State is a matter governed by domestic law, which may subject the entry of an alien to the territory of a State to restrictions, provided they are in compliance with the State's international obligations." 280 See Chim Ming v Marks 367 F Supp 673 at 677 (1973, USDCSDNY); Kan Kam Lin v Rinaldi 361 F Supp 177 at 185-186 (1973, USDCDNJ). 281 Davy, "Article 32: Expulsion", in Zimmermann (ed), The 1951 Convention Relating to the Status of Refugees and its 1967 Protocol, (2011) 1277 at 1285-1287 and 1301-1302. 282 R (ST) v Home Secretary [2012] 2 WLR 735 at 748 [33]; [2012] 3 All ER 1037 at 283 Chim Ming v Marks 505 F 2d 1170 at 1172 (1974, 2nd Cir CA). 284 United Nations High Commissioner for Refugees, "'Lawfully Staying' – A Note on Interpretation", (1988), cited in R (ST) v Home Secretary [2012] 2 WLR 735 at 748 [33]; [2012] 3 All ER 1037 at 1053. 285 "General Comment No 27: Freedom of Movement", (1999) UN Doc HRI/GEN/1/Rev 7, 12 May 2004, at 174 [4], quoted by Hathaway, The Rights of Refugees Under International Law, (2005) at 177 n 116. These last words lead the analysis back to Art 32, and to the question of what international obligations that Article creates. The plaintiff adopted various arguments that Professor James Hathaway has propounded to support the view that his presence in Australia was lawful. First, he submitted that Art 32 has what he called "an autonomous, international meaning". According to the plaintiff, it has this meaning so as to overcome a problem Hathaway has described thus286: "the logic of deference to national legal understandings of lawful presence is clearly sensible. ... Yet there is no indication that this deference was intended [by the drafters] to be absolute, a proposition which – if carried to its logical conclusion – could result in refugees never being in a position to secure [Art 32] rights ... That is, a state's general right to define lawful presence is constrained by the impermissibility of deeming presence to be unlawful in circumstances when the ... Convention – and by logical extension, other binding norms of international law – deem presence to be lawful. While this is in most cases a minimalist constraint on the scope of domestic discretion, it is nonetheless one that is important to ensuring the workability of a treaty intended to set a common international standard." (footnotes omitted) The answer to these arguments is that a State party to the Convention which behaved in the manner described in the penultimate sentence would be in peril of contravening its Convention obligations. In any event, the opinions of commentators are divided287. Lord Hope of Craighead put the matter courteously when he drew attention to the problem of velleity. It is a problem common among commentators in all legal fields. But it is very common among commentators on international law. His Lordship said288: "[o]ne should bear in mind ... that there may be a profound gap between what commentators, however respected, would like the article to mean, and what it has actually been taken to mean in practice". Secondly, the plaintiff submitted: 286 Hathaway, The Rights of Refugees Under International Law, (2005) at 177. 287 Dissent from Hathaway's views may be found in, for example, Goodwin-Gill and McAdam, The Refugee in International Law, 3rd ed (2007) at 524-525. 288 R (ST) v Home Secretary [2012] 2 WLR 735 at 751 [41]; see also at 758 [63] per Lord Dyson JSC; [2012] 3 All ER 1037 at 1055 and 1062. "The plaintiff entered Australia lawfully, with a special purpose visa ... He has remained in Australia while waiting for determination of his protection visa application and while seeking review in respect of the decision on that application ... He remains a person 'lawfully present in [Australia's] territory' for the purposes of article 32(1) in those circumstances. As Hathaway observed289: ... the stage between 'irregular' presence and the recognition or denial of refugee status, including the time required for exhaustion of any appeals or reviews is also a form of 'lawful presence' ... A fortiori here, where the plaintiff's presence was 'regular' at the time of entry and the plaintiff has been found to be a person to whom Australia owes protection obligations." In a footnote to the passage the plaintiff relied on, Hathaway quoted the following words from von Doussa, O'Loughlin and Finn JJ's judgment in Rajendran v Minister for Immigration and Multicultural Affairs290: "In the present case Mr Rajendran entered the country on a visitor's visa. He now holds a bridging visa. If his application for a [refugee status- based] protection visa is ultimately unsuccessful ... that visa will cease to have effect at the time stipulated in the [Regulations] ... whereupon he will cease both to be lawfully in Australia and to be able to invoke, Art 32." Mr Rajendran's position was radically different from that of the plaintiff. The plaintiff was lawfully in Australia for 50 minutes only. He arrived at 11.10pm on a special purpose visa. It expired at midnight. He has never held any other visa. He has not been lawfully present in Australia since the special purpose visa expired. If he had arrived without a visa, he would not have been "lawfully" in Australia. The fact that he arrived with a visa which quickly expired does not alter the fact that since then he has not been "lawfully" in Australia. Conclusion. If public interest criterion 4002 is valid, the answer to question 2 of the Further Amended Special Case is "Yes". Because of the terms In any event, the of the question, no problem arises under Art 33. Commonwealth does not intend to contravene Art 33. It concedes that s 198 does not authorise removals in breach of Art 33291. Even if s 198 were construed 289 Hathaway, The Rights of Refugees Under International Law, (2005) at 175. 290 (1998) 86 FCR 526 at 530-531. 291 The concession was based on Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 244 CLR 144 at 189 [90], 190 [91] and 190-191 [94]-[95]. as not authorising removals in breach of Art 32, Art 32 does not apply: the plaintiff is not "lawfully" in Australian territory. Question 2A in the Further Amended Special Case: the validity of public interest criterion 4002 The answer to question 2 is "Yes". It thus becomes necessary to deal with question 2A. Question 2A is: "If the answer to question 2 is 'Yes' by reason of the plaintiff's failure to satisfy public interest criterion 4002 within the meaning of clause 866.225 of Schedule 2 of the Migration Regulations 1994, is that clause to that extent ultra vires the power conferred by section 31(3) of the [Act] and The plaintiff's argument. One reason why the answer to question 2 was unfavourable to the plaintiff is that the Act provides that if an application for a visa is refused because of public interest criterion 4002, the applicant can be deported and be detained pending that deportation. That is because, if the applicant does not fall within a limited category of exceptions, ss 189, 196 and 198 make deportation mandatory. The plaintiff argued that in that eventuality public interest criterion 4002 is void because it is beyond the regulation-making power conferred by s 31(3). The plaintiff's submissions were seeking to invalidate a regulation which has been in force, in its present form or a similar form, for 18 years, and has no doubt been acted on repeatedly. The submissions are none the worse for this. The plaintiff's submissions depended on viewing the Act as creating a particular scheme. One particular aspect of the scheme lay in s 36. Section 36(1) creates a class of visas to be known as protection visas. As discussed above292, s 36(2) provides that one criterion for a protection visa is that the applicant be a non- citizen to whom the Minister is satisfied Australia owes protection obligations under the Convention. Section 36(2) thus adopts Art 1A(2) of the Convention. Section 65 requires the Minister to grant a visa if satisfied of various conditions. One is that criteria prescribed by the Act or the Regulations had been satisfied. Another is that s 501 did not prevent the grant of the visa. 292 See above at [264]. Section 501 provides that the Minister may refuse to grant a visa to a person, or may cancel a visa granted to a person, if the person does not satisfy the Minister that he or she passes the character test. Section 501(6) sets out the circumstances in which a person does not pass the character test. One circumstance is that the person has a particular type of criminal record. Another is that the person has associated with persons reasonably suspected to have been or to be involved in criminal conduct. Another is that the person is not of good character. Another is that there is a significant risk that the person would engage in particular misconduct. Section 501(6)(d)(v) describes one of those types of misconduct as being to: "represent a danger to the Australian community or to a segment of that community, whether by way of being liable to become involved in activities that are disruptive to, or in violence threatening harm to, that community or segment, or in any other way." The plaintiff contended that s 501 empowered the Minister to refuse to grant, or cancel, a visa "relying on" Arts 32 or 33(2). He submitted that that was so because although s 501 does not refer in terms to Arts 32 or 33(2), conduct within Arts 32 or 33(2) will always fall within the terms of s 501(6)(d)(v). The plaintiff then observed that s 500(4)(c) provided that decisions "relying on" Arts 32 or 33(2) were not reviewable under Pt 5 (which deals with the Migration Review Tribunal) or Pt 7 (which deals with the Refugee Review Tribunal). But the AAT could review those decisions under s 500(1), read with s 25(1) and (4) of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act"). The plaintiff pointed out that the AAT has been described by the Full Court of the Federal Court of Australia, eschewing false modesty, as a "high ranking review tribunal, the President of which is a judge of this Court."293 In undertaking the review the AAT may exercise all the powers and discretions of the decision-maker: s 43(1) of the AAT Act. In addition, s 35(2) of the AAT Act confers power on the Tribunal to conduct hearings in private, to prohibit the publication of witnesses' names and addresses, to prohibit the publication of evidence, and prohibit disclosure of evidence to some or all of the parties. Sections 36, 36A and 36D of the AAT Act also contain provisions directed to protecting disclosure of material contrary to the public interest because it would (among other things) prejudice Australia's security, defence or international relations. The Federal Court of Australia has original jurisdiction in relation to decisions of the AAT under s 500: s 476A(1)(b) of the Act. 293 Daher v Minister for Immigration and Ethnic Affairs (1997) 77 FCR 107 at 110 per Davies, Hill and Heerey JJ. The plaintiff submitted that a s 501 decision to deny a protection visa on grounds of national security is a decision "relying on" Arts 32 and 33(2). The procedural constraints Arts 32(1) and 33(2) impose are satisfied by s 501. The plaintiff submitted that s 501(6)(d)(v) deals specifically with whether an applicant represents a danger to the Australian community in any way. He submitted that cl 866.225(a) of Sched 2 of the Regulations and public interest criterion 4002 deal with that question in a different way. And he submitted: "Section 500(1)(c) is the lead or dominant provision; and the regulation-making power in s 504 (read with s 31(3)) is the subordinate provision." (footnote omitted) The plaintiff accepted that criteria for the grant of protection visas additional to those found in the Act could be imposed by regulation. But he submitted that those additional criteria could not be imposed if they undermined or negated the terms or scheme of the Act. The plaintiff submitted that public interest criterion 4002 deals with the topic of whether a person represents a danger to the Australian community in a manner different from the approach in ss 501(6)(d)(v) and 500(1)(c) in four respects. The first was that public interest criterion 4002 permits the refusal or cancellation of a protection visa in a wider set of circumstances than ss 501(6)(d)(v) and 500(1)(c). "[S]ecurity" in s 4 of the ASIO Act is an expression "wider than that employed in articles 32 and 33(2), as picked up by s 500(1)(c) ... Thus [public interest criterion] 4002 erects a barrier to entry on the same topic as s 501(6)(d)(v) (and articles 32 and 33(2) ...) but is broader in reach. It imposes a different test in relation to the same subject matter. Indeed, in pointing to 'the risk [such] a person may pose to an ally' ... the Defendants appear to contemplate that one might, in the current case, have regard under [public interest criterion] 4002 to such a 'risk' [vis-à-vis] Sri Lanka. That is self evidently foreign to the whole rationale of the Convention." Secondly, the plaintiff submitted that public interest criterion 4002 "interposes a different decision maker (namely, ASIO) from the repository of power contemplated by the Act (namely, the Minister or her or his delegate). The possibility of disconformity of views between different arms of the Executive on the same subject matter arises in those circumstances." The third difference that the plaintiff relied on is that public interest criterion "4002, although expressed as requiring the satisfaction of the decision- maker, does not require that the decision-maker be satisfied as to the substantive content of the security assessment. In contrast, s 501 requires the decision-maker to be satisfied that the person in question as a matter of substance passes the character test (which reflects, in part, articles 32 and 33(1) of the Convention)." Finally, the plaintiff accepted that "s 500 provides for a special process of review of decisions based on articles 32 or 33(2) ...; whereas [public interest criterion] 4002 permits the circumvention or negation of that special process, potentially rendering it nugatory. Indeed, it relocates the security issue such that it comes to fall for consideration in a scheme without merits review, and with the most limited of judicial review." (footnote omitted) That fourth difference is closely related to another submission of the plaintiff. That submission was that criteria additional to those found in the Act cannot be imposed if they undermine or negate "constraints imposed on states by the Convention – unless and until parliament expressly and clearly evinces an intention to disavow the obligations Australia has under the Convention and to reduce the protections the Convention (and the Act in its present form) offers a refugee by not permitting expulsion [except] in very specific circumstances." This is a complaint that public interest criterion 4002 negates the procedural constraints Arts 32 and 33 impose. Some preliminary questions. Before dealing with the plaintiff's arguments that public interest criterion 4002 is ultra vires, it is desirable to examine some preliminary questions. The plaintiff wavered about the source of the power being used against him. At times he identified it as s 501, in particular s 501(6)(d)(v). At other times he identified it as the Articles referred to in s 500(1)(c). Sometimes the plaintiff treated them as different. Sometimes the plaintiff treated them as identical, as when counsel for the plaintiff submitted that the decision to deny a protection visa on grounds of national security was a decision under s 501 "relying on" Arts 32 and 33(2). The plaintiff seemed to have been attracted to s 501 because of s 501(6)(d)(v) and its overlap with the considerations described in Arts 32 and 33(2). And the plaintiff seemed to have been attracted to s 500(1)(c) because it enabled him to appeal to a conception of the Act as carrying out the totality of Australia's Convention obligations. The Act itself draws a distinction between s 501 and the Articles referred to in s 500(1)(c). Section 500(1) provides that applications can be made to the AAT to review certain decisions. One class comprises decisions of a delegate of the Minister under s 501: s 500(1)(b). Another class comprises decisions to refuse to grant or cancel a protection visa "relying on" Arts 32 or 33(2): s 500(1)(c). Section 500(1)(c) does not say: "decisions of the Minister (as opposed to the Minister's delegate) under s 501". The Act thus speaks of decisions under s 501 as though they were distinct from decisions "relying on" Arts 32 and 33(2). This points against viewing s 501 decisions as being decisions "relying on" Arts 32 and 33(2) exclusively. The same distinction between "decisions of a delegate of the Minister under section 501" and decisions to refuse to grant, or cancel, a protection visa "relying on" Arts 32 and 33(2) is drawn in ss 500(4)(b) and (c) and 503(1)(b) and (c). It would therefore seem to follow that s 501 is one source of power to refuse a visa. The plaintiff submitted that a distinct power to refuse or cancel a visa on Arts 32 or 33(2) grounds can be implied from s 500(1)(c) itself294. It is possible that that submission is correct. It will henceforth be assumed that it is correct. On that assumption, the criteria in Arts 32 and 33(2), which are stated in the Convention as conditions to be satisfied before expulsion, are given an additional role – the role of criteria for refusal of a protection visa before the consequential process of expulsion is undertaken. A decision to refuse to grant a protection visa because its grant is prevented by s 501 differs from a decision to refuse to grant it because its grant is prevented by the power implied from s 500(1)(c). A s 501 decision may be based on the same or similar matters of fact as those described in Arts 32 and 33(2). Those matters of fact would be relevant to a decision based on the power implied from s 500(1)(c). But a s 501 decision is not strictly speaking a decision "relying on" Arts 32 or 33(2). A s 501 decision is based on s 501(6) criteria. A decision based on the power implied from s 500(1)(c) rests on criteria which have a different source and different modes of expression. On the other hand, the process of expelling a refugee by reason of a decision to refuse to grant a protection visa because s 501 prevents its grant (or indeed by reason of the fact that the power implied from s 500(1)(c) prevents its grant) could not be carried out unless the matters of fact described in Arts 32 or 33(2) exist. It may not matter, in assessing the validity of public interest criterion 4002, whether it is compared with the power in s 501 or the power implied from s 500(1)(c). The plaintiff's other submissions remain equally good or bad. The Commonwealth submitted that the legislature erred in assuming that a protection visa could be refused "relying on" Arts 32 or 33(2). It is not necessary to decide whether that submission is correct. It has some force because Art 32 strictly speaking does not purport to give a power to expel. Article 32(1) forbids expulsion except on two grounds. Article 32(2) assumes that there will be some power in municipal law to expel which must comply with the requirements of Art 32(2). On this reasoning, Art 33(2) does not itself give a power to expel either. Article 33(1) creates a limitation on expulsion or return (in the sense of refoulement), and assumes a power to expel or return subject to that limitation. Article 33(2) denies the limitation in the case of refugees of the kind described in that Article. On the other hand, the Commonwealth submission faces a major obstacle in that its construction gives s 500(1)(c) no potential field of operation. the Commonwealth's submission is wrong. to proceed by assuming, without deciding, is convenient that The plaintiff's submissions rejected. The plaintiff's submissions on public interest criterion 4002 must be rejected for the following reasons. 294 Minister for Immigration and Ethnic Affairs v Mayer (1985) 157 CLR 290 at 302- 303; [1985] HCA 70. The regulation-making power conferred by s 31(3) is to be contrasted with the more general regulation-making power conferred by s 504. If s 31(3) did not exist there would be force in the view that public interest criterion 4002 was beyond the power conferred by s 504. Section 504 is characteristic of regulation- making powers conferred at the end of long and complex legislation. It deals with many matters which, though no doubt of day-to-day importance, are mechanical in character. That is not the character of the regulations that s 31(3) contemplates. Section 31(3) appears in the middle of a provision dealing with visas, a topic central to the entire scheme of the Act. The balance of s 31 provides: "(1) There are to be prescribed classes of visas. (2) As well as the prescribed classes, there are the classes provided for by sections 32, 33, 34, 35, 36, 37, 37A, 38, 38A and 38B. The regulations may prescribe whether visas of a class are visas to travel to and enter Australia, or to remain in Australia, or both. (5) A visa is a visa of a particular class if this Act or the regulations specify that it is a visa of that class." Section 31 is the third substantive provision in Pt 2 Div 3 subdiv A. That subdivision contains the first major set of substantive provisions in the Act. The position of s 31(3) in the Act suggests that the power it grants to make regulations about visa criteria is of equal significance to provisions that prescribe visa criteria in the Act itself. It does not suggest that s 501 and the power to be implied from s 500(1)(c) are the "leading" provisions and s 31(3) only a "subordinate"295 provision. Rather, they set up equally important criteria for the grant of protection visas. As Crennan J said in VWOK v Minister for Immigration and Multicultural and Indigenous Affairs296: "[t]here is nothing clearly inconsistent or clearly lacking in harmony in the coexistence of a power to refuse a particular class of visa for failure to satisfy certain criteria set out in subordinate legislation and a power to refuse to grant a visa on character grounds under the Act." 295 The terminology derives from Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 382 [70]; [1998] HCA 28. 296 [2005] FCA 336 at [33]. On appeal, Heerey, Finkelstein and Allsop JJ endorsed that conclusion, and said297: "The structure of the [Act] is such as to give a central role to the prescription by the Executive [pursuant to regulations] of criteria necessary to be satisfied for the grant of a visa. Sections 31 and 65 reflect that." Public interest criterion 4002 is not expressly repugnant to either the power conferred by s 501, or the power implied from s 500(1)(c), in the sense that the provisions contain "conflicting commands which cannot both be obeyed, or produce irreconcilable legal rights or obligations."298 They create different "sources of power, by which a person in the position of the respondent may be exposed, by different processes, and in different circumstances, to similar practical consequences."299 There would be repugnancy if "by reason of the apparent exhaustiveness with which one provision, or group of provisions, dealt with the position of a person such as the respondent, there were an incompatibility of a kind that required a conclusion that only one provision or group of provisions was intended to apply"300. And there would be repugnancy "if one provision, or group of provisions, were directed with particularity to the case of a person such as the respondent, and the other were merely of general application"301. But neither of these types of repugnancy exist in this case. Public interest criterion 4002 does not contradict the power in s 501 or the power implied from s 500(1)(c). It does not cut down either of those powers. It does stipulate grounds for refusing to grant a protection visa of the kind referred to in s 501(6)(d)(v), the "national security or public order" grounds in Art 32(1) and the grounds referred to in Art 33(2). But the public interest criterion 4002 grounds go beyond them to some extent. First, Art 33(2) is limited to "national security". But public interest criterion 4002 goes further in encompassing 297 VWOK v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 147 FCR 135 at 141 [20]. 298 Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom (2006) 228 CLR 566 at 571 [2] per Gleeson CJ; [2006] HCA 50. 299 Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom (2006) 228 CLR 566 at 571 [2] per Gleeson CJ. 300 Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom (2006) 228 CLR 566 at 571 [2] per Gleeson CJ. 301 Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom (2006) 228 CLR 566 at 571-572 [2] per Gleeson CJ. security in relation to foreign countries. That is because of par (b) of the definition of "security" in s 4 of the ASIO Act. As the relevant Explanatory Statement stated, for public interest criterion 4002 "to prevent the grant of a visa, an assessment as a risk to security need not necessarily be restricted to Australian national security, but may relate to the carrying out of Australia's responsibilities to foreign countries in security-related matters."302 Secondly, for the same reasons, public interest criterion 4002 is also wider than Art 32. Article 32 relates to "national security" – ie, Australia's national security. Thirdly, the grounds stipulated by public interest criterion 4002 also go beyond Art 33(2). That is because, in light of the serious consequences of returning a refugee to a place in relation to which he or she has a well-founded fear of persecution for a Convention reason, it would be incumbent on the decision-maker to reach a higher level of satisfaction about the matters listed in Art 33(2) than about the matters in an adverse security assessment, where the outcome is not refoulement. In other jurisdictions, that circumstance has led courts to construe Art 33(2) as requiring a belief on objectively reasonable grounds that the refugee poses "a serious substantial303. The standard of satisfaction that operates in relation to the fact described in public interest criterion 4002 – "directly or indirectly a risk to security, within the meaning of section 4 of the [ASIO Act]" – is no doubt high, because of the seriousness of the finding and of its consequences. But the consequences of an Art 33(2) finding are much more serious, and the standard is correspondingly higher. to [national] security", and that the threatened harm threat In one respect, however, public interest criterion 4002 has a narrower scope of application. It applies only to some visa classes, whereas s 501(6)(d)(v) applies to all visa classes. It is generally wrong to construe legislation in such a way that some of its language has no potential operation. However, that rule of statutory interpretation does not apply where legislation gives the Executive a number of paths through which to effect the same outcome, and where though any of those paths could be used, some of those paths are likelier to be used more often than not. Contrary to one of the plaintiff's submissions, the fact that the relevant officials might choose to deal with a particular class of visa applicant by relying on public interest criterion 4002, rather than s 501 or the power to be implied from s 500(1)(c), does not demonstrate that public interest criterion 4002 is 302 Explanatory Statement, Select Legislative Instrument 2005 No 275, Attachment B 303 Zaoui v Attorney-General (No 2) [2006] 1 NZLR 289 at 310 [45] and 312 [52], discussing Suresh v Canada (Minister of Citizenship and Immigration) [2002] 1 SCR 3 at 51 [90]. invalid. Very widespread reliance on public interest criterion 4002 would still leave s 501 and the power to be implied from s 500(1)(c) with a potential field of operation. At any time, the relevant officials could choose to employ them. There is no repugnancy between the Art 32 and Art 33(2) criteria employed when exercising the power implied from s 500(1)(c) and a criterion like public interest criterion 4002 that has different limits and deals with broader risks to security. The Act deals with the exclusion of non-citizens. States have a sovereign right to control the entry of non-citizens. That right extends particularly to preventing their entry on security grounds. It would be a large step to read s 31(3) as conferring a regulation-making power so narrow that regulations to prevent a person's entry on security grounds cannot be made, merely because other provisions in the Act deal with related and partly overlapping grounds. It would be a particularly large step where the Commonwealth has conceded that the Act is to be read as permitting removal of unlawful non-citizens only in accordance with Australia's obligations under Arts 32 and 33 of the Convention. The plaintiff's arguments on AAT review and procedural protection are not persuasive. Article 33 creates no procedural protections. Sub-Articles (2) and (3) of Art 32 create procedural protections, but the procedures that apply when public interest criterion 4002 is relied on do not negate them. Even if, in a decision to refuse a protection visa because of public interest criterion 4002, the only relevant question is whether ASIO has made an adverse security assessment, as distinct from whether the decision-maker agrees with the assessment, it is not the case that the accuracy of the assessment is immaterial. An adverse security assessment is open to judicial review in the Federal Court of Australia pursuant to s 39B of the Judiciary Act 1903 (Cth). It is wrong to describe that, as the plaintiff did, as the most limited judicial review. Further, an adverse decision by the Minister or the Minister's delegate may be based on failure to satisfy other criteria. A visa claimant adversely affected by a criterion other than public interest criterion 4002 can obtain merits review in the Refugee Review Tribunal and judicial review through the Federal Magistrates Court, with an appeal to the Federal Court of Australia. Given that these procedures are available, a refugee expelled under Art 32 can, within the meaning of Art 32(2), be said to have had "due process of law", an opportunity "to submit evidence to clear himself", and an opportunity "to appeal to and be represented" before a competent authority. Finally, public interest criterion 4002 is not repugnant to the Act because it was introduced as part of the Regulations when the amendments to the Act that introduced protection visas entered into force in 1994. If possible, the Act is to be construed harmoniously with these contemporaneous regulations304. Contrary to the plaintiff's submissions, these differences between the grounds applicable in relation to public interest criterion 4002 and the grounds applicable under Arts 32 and 33 do not reveal repugnancy. The plaintiff contends that, if public interest criterion 4002 permits ASIO to take into account the risk which the visa claimant may pose to the country in relation to which he or she fears persecution, that would be foreign to the whole rationale of the Convention. The submission does not follow. It would be foreign to it if the consequence was refoulement. But that is not the consequence. Repugnancy cannot be inferred from the fact that when public interest criterion 4002 is relied on, the operative decision-maker is an ASIO officer, not the Minister or the Minister's delegate. Potential "disconformity of views" about the facts is nothing more than the price that must be paid for employing a more specialised officer of the Executive to deal with a specialised problem. As explained earlier305, public interest criterion 4002, a regulation made under s 31(3) of the Act, on the one hand, and the express power in s 501 and the power implied from s 500(1)(c), on the other, are of equal significance. Hence, public interest criterion 4002 and cl 866.225(a) of Sched 2 of the Regulations are not ultra vires s 31(3) on grounds of repugnancy with the power implied from s 500(1)(c)306. They are not ultra vires on grounds of repugnancy with s 501 either. The answer to question 2A in the Further Amended Special Case is: "No". Question 3 in the Further Amended Special Case: the application and correctness of Al-Kateb v Godwin Question 3 is: "Do ss 189 and 196 of the [Act] authorise the Plaintiff's detention?" The plaintiff submitted that in view of the fact that the Commonwealth Executive had so far, despite considerable effort, failed to find a country other 304 Hanlon v The Law Society [1981] AC 124 at 194; Australian Steel Company (Operations) Pty Ltd v Lewis (2000) 109 FCR 33 at 45 [41]; Migration Agents Registration Authority v Goldsmith (2001) 113 FCR 18 at 29 [54]. 305 See above at [316]. 306 See Kaddari v Minister for Immigration and Multicultural Affairs (2000) 98 FCR than Sri Lanka to which he could be removed, there was no reasonable prospect of removing him in the future. The majority in Al-Kateb v Godwin307 held that ss 196 and 198 authorised the detention of an unlawful non-citizen until removal to another country became reasonably practicable, even if there was no real likelihood or prospect of effecting removal in the reasonably foreseeable future. Is Al-Kateb v Godwin distinguishable? The plaintiff relied on the fact that the appellant in Al-Kateb v Godwin had not been held to fall within s 36(2), while the plaintiff had. Counsel for the plaintiff took the Court to passages in that case referring to persons who could not establish their entitlement to refugee status308. He suggested that accordingly the reasoning in Al-Kateb v Godwin could not apply to the plaintiff. This is a distinction without a difference. Like the plaintiff, the appellant in Al-Kateb v Godwin was in detention with no immediate prospect of being removed to another country. As the Commonwealth submitted, because Art 33 prevents the plaintiff being removed to his country of citizenship, Sri Lanka, he is "in functionally the same position as a stateless person" like the appellant in Al-Kateb v Godwin: he has no home country to which he can be removed. In Al-Kateb v Godwin and in the present case, the non-compellable power of the Minister to grant a visa under s 417 existed, but had not been exercised. It is true that since Al-Kateb v Godwin the Minister has been given a power to make a residence determination under Pt 2 Div 7 subdiv B of the Act309. But the Minister has no duty to consider whether to exercise it: s 197AE. Hence, the plaintiff's position does not differ from that of the appellant in Should Al-Kateb v Godwin be overruled? General. The plaintiff submitted (as did Plaintiff S138 more briefly) that Al-Kateb v Godwin was wrongly decided and should be overruled. He submitted that the language of the Act was not sufficiently clear to justify curtailing the plaintiff's fundamental right to liberty under the general law. The Act should be construed so as not to interfere with that right unless no alternative construction is available. The plaintiff's preferred construction was that the period of detention provided for under s 196 was limited to the period during which removal under s 198 was reasonably practicable. If removal was not reasonably practicable, the detention was unauthorised, and the statutory power to detain was "suspended". In support of this submission, the plaintiff relied on the dissentients' arguments in Al-Kateb v Godwin. 307 (2004) 219 CLR 562 at 581 [33], 640 [231] and 658-659 [290]. 308 For example, Al-Kateb v Godwin (2004) 219 CLR 562 at 658 [289] and 662 [301]. 309 See below at [333]. Should Al-Kateb v Godwin be overruled? Aspects of the detention regime. The plaintiff also relied on what he called "the changes to detention regime since Al-Kateb." Al-Kateb v Godwin turned on s 196(1). It provided and provides that an unlawful non-citizen detained under s 189 must be kept in immigration detention until he or she is removed under s 198 or s 199, deported under s 200, or granted a visa. The plaintiff relied on three provisions which he submitted revealed that the events identified in s 196 "are not the universe of the circumstances in which immigration detention can come to an end."310 One provision was s 198A, which gives power to release an offshore entry person from detention in Australia for the purpose of offshore processing in a declared country. Secondly, the plaintiff referred to s 189(3), which provides that an officer may detain an unlawful non-citizen in an excised offshore place. The plaintiff submitted that "there is a discretionary detention in the Act now at [s] 189(3) which enables an officer to exercise a discretion in relation to the detention [in] an excised offshore place." Thirdly, the plaintiff referred to the availability of residence determinations. Part 2 Div 7 subdiv B provides that the Minister may make a determination permitting residence at a specified place instead of detention, if he or she thinks it is in the public interest to do so. The plaintiff submitted that it was no longer true to say that the Act evinces the "imperative"311 that an unlawful non-citizen be detained until removed, deported or granted a visa. In consequence, the Act no longer treated detention as a "hermetically sealed system", terminable only on the occurrence of one of the three events specified in s 196. These submissions gave the impression, no doubt without intending to do so, that all three of these aspects of the detention regime were enacted after 2004, when Al-Kateb v Godwin was decided. That impression is misleading. Both ss 189(3) and 198A entered the Act in 2001. Only the amendment introducing Pt 2 Div 7 subdiv B was made after 2004 – in 2005. In evaluating the significance for the plaintiff's arguments of that amendment, the following factors are relevant. The Act is often amended, usually without significant parliamentary opposition. Al-Kateb v Godwin is a decision on key provisions of the Act. From the day it was handed down, it became a very well-known decision. It also became a widely criticised decision because of its impact on liberty. These considerations point against Pt 2 Div 7 subdiv B as having the function of overturning Al-Kateb v Godwin. Part 2 Div 7 subdiv B appears just after s 196 and just before s 198. Legislative reversal of Al-Kateb v Godwin would have dealt with those two provisions directly. It would have taken a much more explicit, direct and blunt form. 310 For s 196, see above at [177]. 311 Al-Kateb v Godwin (2004) 219 CLR 562 at 576 [17] per Gleeson CJ. The other provisions on which the plaintiff relied – ss 189(3) and 198A, with which may be coupled another provision he referred to in oral argument, s 417 (giving the Minister discretionary power to grant visas) – existed before 2004. They were not referred to in Al-Kateb v Godwin. It is legitimate to contend that a case should be overruled because it was decided per incuriam. If the plaintiff's criticism is that the majority in Al-Kateb v Godwin were in a relevant sense ignorant of ss 189(3), 198A and 417, it is a charge which must be levelled at the minority too. The minority's reasoning did not depend on those provisions. And those provisions did not bulk large, if at all, in the submissions of the appellant in that case. The truth is that ss 189(3), 198A and 417, like the provisions relating to residence determinations, would not have assisted the appellant in Al-Kateb v Godwin and do not assist the plaintiff in this case. Failure to take them into account was not to act per incuriam. That is because they are immaterial. They are exceptions to the scheme that ss 189(1)-(2), 196 and 198 establish. They are limited to their own specific fields of operation. It is not inconsistent with the generality of the statutory scheme on which the Commonwealth relied that there should be particular statutory exceptions of these kinds. These exceptions are available to be invoked by detainees. But they do not destroy the majority reasoning in Al-Kateb v Godwin nor assist the minority reasoning. Both sets of reasoning represent different constructional responses to ss 189(1), 196 and 198. Should Al-Kateb v Godwin be overruled? A "constitutional argument". The plaintiff also supported his preferred construction of ss 196 and 198 with a "constitutional argument". The argument focused on the fact that the legislature's power to enact ss 196 and 198 is subject to Ch III of the Constitution. The separation of powers effected by Ch III provides a guarantee of liberty. Subject to limited exceptions, the State may only detain a person involuntarily as a consequential step in a process by which the judiciary determines that person's criminal guilt for past acts – arrest and detention pending trial or punishment after trial. The limited exceptions referred to relate to detaining those who are mentally ill, or who suffer from an infectious disease, or who need protection for their own welfare312. The plaintiff submitted that in choosing between his construction and that advocated by the Commonwealth, his was to be preferred because it avoided the risk of constitutional invalidity. The process of reasoning the plaintiff invoked does not, however, rest on the need to avoid the risk of constitutional invalidity. It rests on the need to avoid the reality of constitutional invalidity. In the Work Choices case, the 312 Al-Kateb v Godwin (2004) 219 CLR 562 at 657 [287]. majority said313: "[S]o far as different constructions ... are available, a construction is to be selected which, so far as the language ... permits, would avoid, rather than result in, a conclusion that the [provision] is invalid". That passage uses the word "conclusion", not "risk". The plaintiff contended, however, that it was enough to reject one construction and favour another if "serious questions respecting validity" arise. He cited the following words of Gummow J in Re Woolley; Ex parte Applicants M276/2003314: "Were a contrary view to that above to be taken on the matter of construction, then serious questions respecting validity could have arisen." But Gummow J – one of the majority in the Work Choices case – was not applying the test the plaintiff advocated. His Honour did not prefer one construction to another on the ground that the latter raised "serious questions respecting validity". His Honour arrived at the construction he preferred because that was how he read the relevant language. His Honour had reached that construction before he made the observation quoted above. Gummow J was not using the existence of "serious questions" as a factor favouring his Honour's preferred construction. The plaintiff also relied on the fact that after the passage quoted above from the Work Choices case, the majority spoke of the meaning they did not favour as one which "would put [the provision] in peril of being invalid". Read in context, those words mean "would render [the provision] invalid". That is the approach adopted in the authorities the majority cited in the Work Choices case. Thus in Attorney-General (Vict) v The Commonwealth, Dixon J said315: "In discharging our duty of passing upon the validity of an enactment, we should make every reasonable intendment in its favour. We should give to the powers conferred upon the Parliament as ample an application as the the expressed Constitution will allow. We should interpret the enactment, so far as its language permits, so as to bring it within the application of those powers and we should not, unless the intention is clear, read it as exceeding them." implications of the recognized intention and In Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs, Mason CJ said316: "The interpretation which I would give ... is supported by the presumption in favour of validity." His Honour quoted the passage just 313 New South Wales v The Commonwealth (2006) 229 CLR 1 at 161 [355] per Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ; [2006] HCA 52. 314 (2004) 225 CLR 1 at 52 [135]; [2004] HCA 49. 315 (1945) 71 CLR 237 at 267; [1945] HCA 30. 316 (1992) 176 CLR 1 at 14; [1992] HCA 64. quoted from Dixon J in Attorney-General (Vict) v The Commonwealth. His Honour also quoted in Federal Commissioner of Taxation v Munro; British Imperial Oil Co Ltd v Federal Commissioner of Taxation317: the following words of Isaacs J "There is always an initial presumption that Parliament did not intend to pass beyond constitutional bounds. If the language of a statute is not so intractable as to be incapable of being consistent with this presumption, the presumption should prevail." And in Plaintiff S157/2002 v The Commonwealth318, Gaudron, McHugh, Gummow, Kirby and Hayne JJ said, quoting Dixon J in R v Hickman; Ex parte Fox and Clinton319 and citing many other authorities, that a basic rule of construction Commonwealth legislation "is that 'if there is an opposition between the Constitution and any such provision, it should be resolved by adopting [an] interpretation [consistent with the Constitution if] that is fairly open'." interpretation of privative clauses that applies the Since the Work Choices case, the words "would put [the provision] in peril of being invalid" have been read as meaning "would render [the provision] invalid". Thus in Gypsy Jokers Motorcycle Club Inc v Commissioner of Police, in a passage the plaintiff relied on, the plurality cited the passage from the Work Choices case320 and said: "So far as different constructions appear to be available, a construction is to be selected which would avoid rather than lead to a conclusion of constitutional invalidity." (emphasis added; footnote omitted) And in a passage the plaintiff relied on from K-Generation Pty Ltd v Liquor Licensing Court321, French CJ cited four of the five authorities just quoted and said: "Interpretation is ... to be informed by the principle that the Parliament, whether of the State or the Commonwealth, did not intend its statute to exceed constitutional limits" (footnote omitted). 317 (1926) 38 CLR 153 at 180; [1926] HCA 58. 318 (2003) 211 CLR 476 at 504 [71]; [2003] HCA 2. 319 (1945) 70 CLR 598 at 616; [1945] HCA 53. 320 (2008) 234 CLR 532 at 553 [11]; [2008] HCA 4. 321 (2009) 237 CLR 501 at 519 [46]; [2009] HCA 4. See also Public Service Association of South Australia Inc v Industrial Relations Commission of South Australia (2012) 86 ALJR 862 at 868 [16], 876 [64] and 881 [87]; 289 ALR 1 at 6, 18 and 24; [2012] HCA 25. There is a final consideration suggesting that the construction of legislation is not affected by considerations of the risk of constitutional invalidity as distinct from the reality of it. Questions of statutory construction should obviously be resolved, as far as possible, uniformly. Grave uncertainty will otherwise flow. Some aspects of constitutional law are uncertain, at least in their application; but the chance that minds will differ widely about the risk of constitutional invalidity is much greater than that minds will differ widely about the reality of constitutional invalidity. There is also a prospect of interminable disputes about the extent of the relevant risk. The principle, then, is that a court will favour a construction resulting in constitutional validity over one which results in constitutional invalidity. The plaintiff cannot take advantage of that principle in this case. He did not demonstrate that the construction that the majority gave ss 196 and 198 in Al-Kateb v Godwin resulted in constitutional invalidity. The appellant in that case put that submission. It was not accepted as a ground for decision by any member of the minority. Rather, the paths to decision that each member of the minority selected rested on construing the statutory language without the aid of the reasoning employed in the Work Choices case. It is true, however, that there are dicta of Gummow J supporting the appellant's submission322. On the other hand, three members of the majority disagreed with the appellant's submission323, and a fourth said "[i]t may be the case" that the appellant's submission was wrong, though his Honour did not decide the point324. Should Al-Kateb v Godwin be overruled? Non-judicial power to detain. The plaintiff advanced various arguments against the soundness of the opinions rejecting the appellant's submission in Al-Kateb v Godwin. One was that those opinions rested on McHugh J's acceptance in Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs325 of United States authority which, the plaintiff submitted, was artificial, extensively criticised and inapposite in the context of Ch III. Another was that those opinions rested on a doctrine of "exclusion" of aliens, which meant "expulsion" only and did not extend to "segregation". A third was that even if a power of "exclusion" extended to "segregation", that would not answer the question of whether Ch III was 322 (2004) 219 CLR 562 at 609-614 [126]-[140]. 323 (2004) 219 CLR 562 at 584 [45], 586 [49], 648-650 [255]-[263], 651 [267] and 662-663 [303]. See also Re Woolley; Ex parte Applicants M276/2003 (2004) 225 CLR 1 at 31 [72], 46-47 [115], 75-76 [222]-[223] and 87 [270]. 324 (2004) 219 CLR 562 at 658 [289]. 325 (1992) 176 CLR 1 at 71 n 56. infringed. A fourth was that "exclusion from the Australian community" was too vague a concept to play a part in determining the limits of the aliens power in s 51(xix) of the Constitution or the constraints Ch III applies to it. The difficulty with these submissions is that they do not squarely face the problem which the plaintiff's position throws up. That problem concerns the constitutionality of legislation permitting detention of an alien who, unlike the appellant in Al-Kateb v Godwin, has been assessed by ASIO as posing a risk to Australia's security. The Commonwealth submitted that the plaintiff's argument rested on a premise stated thus by Brennan, Deane and Dawson JJ in Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs326: "putting to one side ... exceptional cases ..., the involuntary detention of a citizen in custody by the State is penal or punitive in character and, under our system of government, exists only as an incident of the exclusively judicial function of adjudging and punishing criminal guilt." In Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs, Gaudron J doubted that premise327. In Kruger v The Commonwealth, she challenged it328: "it cannot be said that the power to authorise detention in custody is exclusively judicial except for clear exceptions. I say clear exceptions because it is difficult to assert exclusivity except within a defined area and, if the area is to be defined by reference to exceptions, the exceptions should be clear or should fall within precise and confined categories. The exceptions recognised in Lim are neither clear nor within precise and confined categories. For example, the exceptions with respect to mental illness and infectious disease point in favour of broader exceptions relating, respectively, to the detention of people in custody for their own welfare and for the safety or welfare of the community. Similarly, it would seem that, if there is an exception in war time, it, too, is an exception which relates to the safety or welfare of the community. Once exceptions are expressed in terms involving the welfare of the individual or that of the community, it is not possible to say that they are clear or fall within precise and confined categories. More to the point, it is not possible to say that, subject to clear exceptions, the power to authorise 326 (1992) 176 CLR 1 at 27. 327 (1992) 176 CLR 1 at 55. 328 (1997) 190 CLR 1 at 110; [1997] HCA 27. detention in custody is necessarily and exclusively judicial power. Accordingly, I adhere to the view that I tentatively expressed in Lim, namely, that a law authorising detention in custody is not, of itself, offensive to Ch III." (emphasis added; footnote omitted) Her Honour's reasoning has been cited with approval in other cases329, and expressed in similar terms elsewhere330. The Commonwealth submitted that Gaudron J's approach should be preferred to that of Brennan, Deane and It is not necessary to decide that question. It is sufficient to decide that, since the exceptions to the principle Brennan, Deane and Dawson JJ stated are not closed, another should be added: the detention of unlawful non-citizens who threaten the safety or welfare of the community because of the risks they pose to Australia's security. If it is possible to detain a diseased person because that person is a threat to the public health, why is it not possible to detain a person assessed to be a risk to Australia's security because that person is a threat to public health in a different way? The plaintiff did not advance any argument suggesting that that exception did not exist. Should Al-Kateb v Godwin be overruled? Proportionality. The plaintiff and the Australian Human Rights Commission instead argued that whether any exception should be recognised depends on assessing whether there is a "proportionate" relationship between the legitimate end to be served and the means by which the Act serves that end. That submission was not directed to the specific exception just identified. The plaintiff relied on an assertion by Brennan, Deane and Dawson JJ in Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs. Their Honours said that the precursors to ss 189 and 196 were "valid laws if the detention which they require[d] and authorize[d] [was] limited to what [was] reasonably capable of being seen as necessary for the purposes of deportation or necessary to enable an application for an entry permit to be made and considered."331 Assuming that that assertion is correct332, the test is met. A 329 Al-Kateb v Godwin (2004) 219 CLR 562 at 648 [258] and 662-663 [303]; Re Woolley; Ex parte Applicants M276/2003 (2004) 225 CLR 1 at 24-27 [57]-[62]; South Australia v Totani (2010) 242 CLR 1 at 146-147 [382]-[383]; [2010] HCA 330 Kruger v The Commonwealth (1997) 190 CLR 1 at 84. 331 (1992) 176 CLR 1 at 33. 332 Cf Al-Kateb v Godwin (2004) 219 CLR 562 at 583-584 [40]-[46] and 647-649 sovereign government may prevent the entry of aliens, subject to its international obligations and the obligations that its municipal law imposes. If aliens enter, they may be deported. In O'Keefe v Calwell, Latham CJ said333: "Deportation is not necessarily punishment for an offence. The Government of a country may prevent aliens entering, or may deport aliens ... Exclusion in such a case is not a punishment for any offence. Neither is deportation ... The deportation of an unwanted immigrant (who could have been excluded altogether without any infringement of right) is an act of the same character: it is a measure of protection of the community from undesired infiltration and is not punishment for any offence." If the plaintiff had applied for entry to Australia while in Indonesia, he could have been excluded without any infringement of right. Australia is not obliged to accept persons who pose a risk to its security. Equally, the plaintiff can now be deported. As the Commonwealth conceded, deportation must be consistent with Art 33(1). That is one of many factors making deporting the plaintiff difficult for the Commonwealth. Deportation may be impossible to achieve quickly. But the end is deportation. The means – detention until deportation is reasonably practicable – is reasonably proportionate to that end. However, with respect to those who hold a contrary view, there is no proportionality test to be applied. Section 51(xix) of the Constitution grants the Commonwealth legislative power with respect to "naturalization and aliens". Pursuant to s 51(xix), Parliament may enact legislation empowering the Executive to detain aliens in custody with a view to either admitting or deporting them. Legislation granting that power to detain is not punitive in nature. The power is properly conferred on the Executive. It is not part of the judicial power of the Commonwealth334. A law conferring a power to detain pending deportation is not a law that is merely incidental to the aliens power. It is a law which deals "with the very subject of aliens. [It is] at the centre of the power, not at its circumference or outside the power but directly operating on the subject matter of the power."335 Accordingly, the plaintiff has not demonstrated that the construction of ss 196 and 198 that the Commonwealth advocated, as applied to the circumstances of this case, should be rejected because of Ch III of the Constitution. 333 (1949) 77 CLR 261 at 278; [1949] HCA 6, quoted with approval by McHugh J in Al-Kateb v Godwin (2004) 219 CLR 562 at 584 [45]. 334 Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 32; Al-Kateb v Godwin (2004) 219 CLR 562 at 582 [36]. 335 Al-Kateb v Godwin (2004) 219 CLR 562 at 582-583 [39]. Should Al-Kateb v Godwin be overruled? Relevant factors. This Court has in the past been divided on the question whether a party who wishes to contend that one of its earlier decisions be overruled must obtain leave before embarking on that course. In this case it is convenient to pass by that division and refer to the factors which the Court takes into account in deciding whether to overrule an earlier decision. It is not enough that members of the later Court believe that the earlier decision is wrong. What more is needed? Four factors were specified in John v Federal Commissioner of Taxation336: "The first [is] that the earlier decisions did not rest upon a principle carefully worked out in a significant succession of cases. The second [is] a difference between the reasons of the justices constituting the majority in one of the earlier decisions. The third [is] that the earlier decisions had achieved no useful result but on the contrary had led to considerable inconvenience. The fourth [is] that the earlier decisions had not been independently acted on in a manner which militated against reconsideration". Satisfaction of one of these criteria will not necessarily lead to overruling. There are other criteria that matter. One group of them concerns the adequacy or thoroughness with which the impugned authority was argued and considered. The question of overruling a decision thought to be wrong is one of judgment. However, it is reasonable to bear in mind what Kirby J said in K-Generation Pty Ltd v Liquor Licensing Court337: "care should be taken to avoid (especially within a very short interval) the re-opening and re-examination of issues that have substantially been decided by earlier decisions in closely analogous circumstances." In any event, the factors relevant to the question of overruling only arise if the decision is thought to be wrong. The question whether Al-Kateb v Godwin is wrong is a question of construction. It is notorious that reasonable minds can differ on issues of construction. The plaintiff supported the minority's construction in Al-Kateb v Godwin, the Commonwealth supported the majority's construction – in each case without significant divergence from the arguments put in Al-Kateb v Godwin, save as indicated above. Those respective arguments are stated in Al-Kateb v Godwin. They speak for themselves. While, with respect, the dissentients' arguments have obvious force, the plaintiff's submission that they represent the better view must fail for the reasons Hayne J gave in Al-Kateb v Godwin. It is 336 (1989) 166 CLR 417 at 438-439 per Mason CJ, Wilson, Dawson, Toohey and Gaudron JJ; [1989] HCA 5, referring to The Commonwealth v Hospital Contribution Fund (1982) 150 CLR 49 at 56-58; [1982] HCA 13. 337 (2009) 237 CLR 501 at 569 [246]. unnecessary for present purposes to analyse either those arguments or those which appealed to the majority. Al-Kateb v Godwin should not be overruled. Should Al-Kateb v Godwin be overruled? A missing factual premise. There is another reason for not overruling Al-Kateb v Godwin. The Court "should not embark upon the reconsideration of an earlier decision where, for the resolution of the instant case, it is not necessary to do so."338 This case could only afford an occasion for overruling Al-Kateb v Godwin if the crucial factual premise of that case existed in this. That factual premise was von Doussa J's finding that removal from Australia "[was] not reasonably practicable ... as there [was] no real likelihood or prospect of removal in the reasonably foreseeable future."339 That factual premise does not exist here. That is so for the following reasons. The Commonwealth Executive has made active efforts to remove the plaintiff from Australia. Some of those efforts have failed. At the time of the hearing, the success of others remained unclear while certain foreign governments considered requests by Australia for assistance in resettling persons who include the plaintiff. At the time of the hearing, it was also the intention of an officer of the Executive to travel to the Annual Tripartite Consultations on Resettlement in Geneva with a view to resettling the plaintiff and others in his position. The evidentiary underpinning of von Doussa J's factual finding was that the Executive was "unable to identify another country to which the appellant might be removed."340 There is no equivalent evidentiary underpinning here. Von Doussa J distinguished between a "possibility" of removal, which existed, and a "real likelihood or prospect of removal", which did not exist. His Honour made that finding after a trial involving contested evidence341. Hence the approach of the minority in Al-Kateb v Godwin was that "the prospects of removal to another country are so remote that continued detention cannot be for the purpose of removal."342 The plaintiff's arguments assume that at one point ss 189 and 196 validly authorised his detention. By this assumption, the plaintiff accepts, correctly, that he bears a burden of persuasion that a real likelihood or prospect of removal does not exist. There is no agreed fact to that 338 Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 473 [249] per Gummow and Hayne JJ; [2001] HCA 51. 339 Al-Kateb v Godwin (2004) 219 CLR 562 at 603 [105]. 340 Al-Kateb v Godwin (2004) 219 CLR 562 at 603 [104] per Gummow J. 341 SHFB v Goodwin [2003] FCA 294 at [17]-[19]. 342 (2004) 219 CLR 562 at 601 [98] per Gummow J. effect, and no trial has taken place at which the plaintiff has successfully borne that burden. Nor, contrary to the plaintiff's submission, is it possible to draw an inference that there is no real likelihood of removal from the facts agreed in the Further Amended Special Case. In Al-Kateb v Godwin, Callinan J said343: "Who knows, as Kennedy J in Zadvydas [v Davis] points out344, what the outcome of sensitive negotiations between governments taking place from time to time may be. So too, conditions and attitudes may change rapidly or unexpectedly in those countries which an alien has left or which may formerly have rejected him or her." Kennedy J's judgment in Zadvydas v Davis, to which Callinan J referred, is a judgment that Rehnquist CJ joined. The passage referred to is one that Scalia and Thomas JJ endorsed. Callinan J also said that "accurate predictions as to the period of immigration detention are simply not possible" because of "the difficulties necessarily attendant upon unlawful entry, changing attitudes in other countries, and international negotiations"345. His Honour went on346: "The fact that deportation may not be imminent, or even that no current prediction as to a date and place of it can be made, does not mean that the purpose of the detention, deportation, has been or should be regarded as abandoned. The sensitivity of international relations, the unsettled political situation in many countries, and the role and capacity of the United Nations, all contribute to the inevitable uncertainties attaching to the identification of national refuges for people who have come to this country unlawfully and who have been shown to be people to whom protection obligations are not owed." It is true that the plaintiff here satisfies s 36(2). However, his adverse security assessment creates the same difficulties for him as those which Callinan J described. As the Commonwealth submitted, the "nature of international negotiations is such that judicial assessment of their prospects is problematic, but there is nothing to suggest that those negotiations are so unlikely to succeed that 343 (2004) 219 CLR 562 at 658-659 [290]. 344 533 US 678 at 708-709 (2001). 345 Al-Kateb v Godwin (2004) 219 CLR 562 at 660 [292]. 346 Al-Kateb v Godwin (2004) 219 CLR 562 at 660 [295]. the Plaintiff's prospects of removal could be found to be 'so remote that continued detention cannot be for the purposes of removal'347." Should Al-Kateb v Godwin be overruled? The Communist Party case. There is one final question to be answered in this case. It is: does the "doctrine in the Australian Communist Party case" require Al-Kateb v Godwin to be overruled? The plaintiff contended that on the Commonwealth's construction of the Act the Executive's power to detain depends solely on its own perception of when it would be reasonably practicable for removal to occur (unless the Minister's view of the public interest results in exercise of the discretion conferred by ss 195A or 417). The plaintiff submitted that this was offensive to Ch III of the Constitution. Invalidity was said to flow from the fact that the operation of the legislation depended on a fact which could not be falsified in proceedings under Ch III. The plaintiff relied on the following passage in Gummow J's judgment in Al-Kateb v Godwin348 to support his submission: "The continued viability of the purpose of deportation or expulsion cannot be treated by the legislature as a matter purely for the opinion of the executive government. The reason is that it cannot be for the executive government to determine the placing from time to time of that boundary line which marks off a category of deprivation of liberty from the reach of Ch III. The location of that boundary line itself is a question arising under the Constitution or involving its interpretation, hence the present significance of the Communist Party Case. Nor can there be sustained laws for the segregation by incarceration of aliens without their commission of any offence requiring adjudication, and for a purpose unconnected with the entry, investigation, admission or deportation of aliens." (footnote omitted) His Honour's reference to Australian Communist Party v The Commonwealth349 takes up an earlier passage in his reasons for judgment350: "That case is authority for the basic proposition that the validity of a law or of an act of the executive branch done under a law cannot depend upon the view of the legislature or executive officer that the conditions requisite for validity have been satisfied." 347 Cf Al-Kateb v Godwin (2004) 219 CLR 562 at 601 [98] per Gummow J. 348 (2004) 219 CLR 562 at 613 [140]. 349 (1951) 83 CLR 1; [1951] HCA 5. 350 (2004) 219 CLR 562 at 599 [88]. One of the interveners, Plaintiff S138, who is in the same position as the plaintiff, advanced a further argument to the same effect. It concentrated not on whether removal was foreseeable, but on the adverse security assessment. The argument began with the assumption that the plaintiff had not received procedural fairness in that he had not been informed of the substance of the allegations against him or of ASIO's grounds of concern. Plaintiff S138 submitted that the exception to the general principle that the power to detain is part of the judicial power of the Commonwealth that enables detention for immigration purposes is subject to a limitation. The limitation is that the exception "does not extend to [permit] indefinite detention where a condition precedent to detention is, in substance, unreviewable, including where the person has not been provided [with] a substantial and meaningful opportunity to be heard." Here, the condition precedent to detention is the adverse security assessment. If the person assessed is not made aware of the basis for the decision, that person cannot gauge whether ASIO has fallen into jurisdictional error. Accordingly, the person has no meaningful opportunity to seek judicial review. It was submitted that to deny the existence of the limitation was to contravene the principle identified in the Communist Party case. Whether the security assessment is correct is what Plaintiff S138 called a "constitutional fact". The validity of the plaintiff's detention, Plaintiff S138 argued, depends on the view of the executive officers responsible for his detention that the condition requisite for its validity, namely that the 2012 assessment was correct, was satisfied. Plaintiff S138 submitted that for the provisions authorising detention to be constitutionally valid there must be a high degree of judicial oversight and control. This was because of the interference with human liberty which immigration detention involves. There are four problems with Plaintiff S138's submission. The first problem relates to procedural fairness. The submission assumes that the plaintiff did not receive procedural fairness at the hands of the ASIO That assumption was rejected above351. officers who interviewed him. Plaintiff S138 did submit: "The constitutional difficulties ... arise even if procedural fairness has been provided in the particular case of [the plaintiff]." However, it is undesirable to debate constitutional difficulties said to arise if procedural fairness is not given in a case in which procedural fairness was given. fairness. The second problem with Plaintiff S138's submission also relates to that national security procedural considerations will have reduced the content of procedural fairness so much that an unlawful non-citizen would not know enough to challenge an adverse security assessment by way of judicial review. But the plaintiff did not submit that his The submission assumes 351 See above at [244]-[253]. adverse security assessment was flawed because national security considerations prevented its being reviewed. The plaintiff suggested that that might be Plaintiff S138's difficulty, although Plaintiff S138 did not himself claim that he was affected by it. The plaintiff's submission was that the ASIO officers who interviewed him had failed to make clear what the security concern which eventually led to the adverse security assessment was. The third problem is that the Communist Party case is concerned with instances where the personal opinion of an officer of the Executive that a state of affairs exists is the condition for validity of an executive act. The present case is not among those instances. The duty to detain under ss 189(1) and 196(1) depends on an officer knowing or reasonably suspecting that a person is an unlawful non-citizen. The duty to detain under s 196 does not continue until an officer thinks fit to end the detention. It continues only until the unlawful non- citizen is removed, deported or granted a visa. The knowledge, or reasonable suspicion, that a person is an unlawful non-citizen possessed by an officer of the Executive is not conclusive. It can be challenged. A person's status as an unlawful non-citizen depends on that person's lack of a visa. A decision not to grant a visa can be challenged on the merits and thereafter by judicial review352. It is true that in proceedings under s 39B of the Judiciary Act 1903 (Cth) in the Federal Court of Australia, an application for preliminary discovery to establish the basis on which the assessment was made may sometimes be met by a successful claim for public interest immunity restricting the applicant from inspecting the documents which are the subject of that successful claim353. That will be so if the Court considers that the public interest in national security outweighs the public interest in the disclosure of information to the applicant. But those restraints are "self-imposed restraints which courts have adopted when undertaking the judicial review of security decisions" and are not "incompatible with the rule of law."354 As Mason J said in Church of Scientology Inc v Woodward355: "The fact that a successful claim for [public interest immunity] handicaps one of the parties to litigation is not a reason for saying that the Court cannot or will not exercise its ordinary jurisdiction; it merely means that the Court will arrive at a decision on something less than the entirety of the relevant materials." 352 See above at [323]. 353 O'Sullivan v Parkin (2008) 169 FCR 283. 354 Sagar v O'Sullivan (2011) 193 FCR 311 at 325 [82] per Tracey J. 355 (1982) 154 CLR 25 at 61; [1982] HCA 78, quoted with approval in Gypsy Jokers Motorcycle Club Inc v Commissioner of Police (2008) 234 CLR 532 at 556 [24]. So far as these circumstances hamper review by the courts, they are not generated by the Act. The process is not left in the hands of the Executive, but in the hands of the courts. The Executive is not in a position to dictate to the courts356. There is no collision with Ch III of the Constitution of the kind which the Communist Party case doctrine contemplates. That case was directed to instances where bodies other than courts are empowered to make conclusive judgments as to the validity of executive action. This case concerns the powers of the courts. Among those powers is the power to determine validity. The final problem with Plaintiff S138's argument is seen in his submission that the Communist Party principle would not be: "infringed if ss 189 and 196 ... are read down so as not to permit detention in circumstances where an application for a visa or release has been denied and avenues for challenge practically exhausted, the person is detained, there is no reasonably foreseeable prospect of removal, and the decision to deny the visa was made upon secret information where the person was not informed of the substance of the allegations and grounds which founded the decision." That is not "reading down". It is radical reconstruction. This Court is not empowered to do it. The answer to question 3 in the Further Amended Special Case is: "Yes". Question 4 in the Further Amended Special Case: costs Question 4 in the Further Amended Special Case is: "Who should pay the costs of the special case?" In view of the fact that questions 1, 2, 2A and 3 have been answered adversely to the plaintiff, the answer must be: "The plaintiff". 356 Gypsy Jokers Motorcycle Club Inc v Commissioner of Police (2008) 234 CLR 532 at 559 [36], 596 [183] and 597 [189]; K-Generation Pty Ltd v Liquor Licensing Court (2009) 237 CLR 501 at 542-543 [144]-[149]. Crennan CRENNAN J. The plaintiff is a national of Sri Lanka. He is also a refugee. As a Tamil, and a former member of the Liberation Tigers of Tamil Eelam ("the LTTE"), the plaintiff has a well-founded fear of persecution in Sri Lanka for reasons of his race and imputed political opinion. If returned to Sri Lanka, there is a real chance the plaintiff would face abduction, torture or death. On 18 October 2009, the plaintiff was one of approximately 80 asylum seekers on board a boat intercepted by the Australian Customs Vessel Oceanic Viking. The asylum seekers – including the plaintiff – were taken to Indonesia, where the plaintiff remained until December 2009. On 11 December 2009, the Australian Security Intelligence Organisation ("ASIO") provided the Department of Immigration and Citizenship ("DIAC") with a security assessment in relation to the plaintiff ("the 2009 assessment"). The 2009 assessment stated that the plaintiff was directly or indirectly a risk to security within the meaning of s 4 of the Australian Security Intelligence Organisation Act 1979 (Cth) ("the ASIO Act"). The first defendant, the Director-General of Security, controls ASIO pursuant to s 8(1) of the ASIO Act. The second defendant, the officer in charge of the Melbourne Immigration Transit Accommodation ("the MITA"), is an officer of DIAC. The third defendant is the Secretary of DIAC, and the fourth defendant is the Minister for Immigration and Citizenship. Relevant facts The plaintiff entered Australia at Christmas Island on 29 December 2009 as the holder of a special purpose visa357. As a result of the expiration of that visa at midnight on that day, the plaintiff was not immigration cleared on his arrival in Australia, and was detained by an officer of DIAC under s 189 of the Migration Act in the Christmas Island Detention Centre358. On 25 June 2010, the plaintiff made a valid application for a Protection (Class XA) (Subclass 866) visa. On 18 February 2011, a delegate of the fourth defendant refused to grant a protection visa to the plaintiff. 357 The import of the special purpose visa is that, on his arrival in Australia, the plaintiff was a "lawful non-citizen": Migration Act 1958 (Cth) ("Migration Act"), 358 Following the expiration of the special purpose visa, the plaintiff was subject to mandatory detention as an "unlawful non-citizen": Migration Act, ss 14(1) and Crennan The delegate found that the plaintiff is a person to whom Australia has protection obligations under the Convention relating to the Status of Refugees (1951) as amended by the Protocol relating to the Status of Refugees (1967) (together, "the Convention"), within the meaning of s 36(2)(a) of the Migration Act. The delegate noted that the plaintiff had been a member of the LTTE, but stated that she did not have serious reasons for considering that the plaintiff should be excluded from protection under Art 1F of the Convention. However, because of the 2009 assessment, the delegate found that the plaintiff did not meet the requirements of cl 866.225 of Sched 2 to the Migration Regulations 1994 (Cth) ("the Migration Regulations") as he did not satisfy public interest criterion 4002 ("PIC 4002"). On 25 May 2011, the Refugee Review Tribunal affirmed the delegate's decision to refuse to grant a protection visa to the plaintiff. On 4 November 2011, following a challenge by the plaintiff to the validity of the 2009 assessment, officers of ASIO interviewed the plaintiff, in the presence of his lawyer, for the purpose of making a new security assessment. On 9 May 2012, ASIO provided DIAC with a new adverse security assessment in relation to the plaintiff ("the 2012 assessment"). The 2012 assessment superseded the 2009 assessment, so that the 2009 assessment was no longer operative. The plaintiff has been held in immigration detention in Australia continuously since December 2009: first in the Christmas Island Detention Centre and, since September 2011, in the MITA. The plaintiff has no present right to enter and remain in any country other than Sri Lanka. The defendants do not propose or intend to remove the plaintiff to Sri Lanka. The third and fourth defendants have taken, and continue to take, steps for the purpose of identifying a country to which to remove the plaintiff pursuant to s 198 of the Migration Act359. At the time of the hearing, responses from four countries to requests from DIAC to consider resettling the plaintiff were outstanding. Issues By proceedings commenced in the original jurisdiction of this Court pursuant to s 75(v) of the Constitution, the plaintiff sought, among other things, an order absolute for a writ of certiorari setting aside or quashing, for want of procedural fairness, the decision of the first defendant to issue the 2012 359 Migration Act, s 198(2) provides for the removal "as soon as reasonably practicable" of an "unlawful non-citizen" whose application for a visa "has been finally determined". Crennan assessment, and an order absolute for a writ of habeas corpus directed to the second and third defendants. On 6 June 2012, Hayne J referred the following questions of law reserved on a Special Case for the opinion of the Full Court: In furnishing the 2012 assessment, did the First Defendant fail to comply with the requirements of procedural fairness? Does s 198 of [the Migration Act] authorise the removal of the Plaintiff, being a non-citizen: to whom Australia owes protection obligations under [the Convention]; and 2.2 whom ASIO has assessed poses a direct or indirect risk to security; to a country where he does not have a well-founded fear of persecution for the purposes of Article 1A of [the Convention]? Do ss 189 and 196 of [the Migration Act] authorise the Plaintiff's detention? 4. Who should pay the costs of the special case?" During the course of oral argument, the plaintiff sought, and was granted, leave to amend the Special Case to include the following question concerning the validity of PIC 4002: "2A. If the answer to question 2 is 'Yes' by reason of the plaintiff's failure to satisfy [PIC 4002] within the meaning of clause 866.225 of Schedule 2 of [the Migration Regulations], is that clause to that extent ultra vires the power conferred by section 31(3) of [the Migration Act] and invalid[?]" The parties agreed facts for the purposes of the Special Case. Question 1 – was procedural fairness afforded? The plaintiff submitted that, given the effect of the 2012 assessment on his liberty, the exercise of ASIO's power to issue the 2012 assessment was conditioned on a requirement to afford procedural fairness. The plaintiff contended that this requirement was not discharged because the specific allegations and material upon which the 2012 assessment was based were not fully disclosed to him. The defendants agreed that the exercise of power to issue an assessment under the ASIO Act was conditioned on a requirement to afford procedural Crennan fairness, the content of which was to be discerned by reference to that Act. The defendants contended that the plaintiff had been afforded procedural fairness because, in a lengthy interview at which he was legally represented, the plaintiff was informed that he was being assessed for security purposes and that ASIO was concerned with his association with the LTTE, and the plaintiff was given ample opportunity to respond to that issue of concern. For the reasons given by Kiefel J, I agree that there was no denial of procedural fairness in the interview of the plaintiff conducted by officers of ASIO. Question 2A – is cl 866.225 invalid? The relevant provisions of the ASIO Act, the Migration Act, the Migration Regulations and the Convention are described in the reasons of others. They will only be repeated as necessary to make these reasons clear. Read as a whole, the Migration Act contains a complex and interconnected set of provisions "directed to the purpose of responding to the international obligations which Australia has undertaken" in the Convention360. The relationship between the Convention and the Migration Act, and the legislative history of ss 500-503, are discussed in the reasons of the Chief Justice361. For the reasons set out below, cl 866.225 of Sched 2 to the Migration Regulations is invalid to the extent that it prescribes PIC 4002 as a criterion for the grant of a protection visa, as it is beyond the power conferred by s 31(3) of the Migration Act. Decisions relying on PIC 4002 Section 504(1) of the Migration Act authorises the Governor-General to "make regulations, not inconsistent with this Act, prescribing all matters which by this Act are required or permitted to be prescribed". It is settled that a provision in such terms precludes the making of regulations which vary or depart from positive provisions made by the relevant Act362. Section 31(3) of the 360 Plaintiff M61/2010E v The Commonwealth (2010) 243 CLR 319 at 339 [27]; [2010] HCA 41. 361 Reasons of the Chief Justice at [12]-[14], [33]-[35]. 362 Morton v Union Steamship Co of New Zealand Ltd (1951) 83 CLR 402 at 410; [1951] HCA 42; R v Commissioner of Patents; Ex parte Martin (1953) 89 CLR 381 at 406-407 per Fullagar J; [1953] HCA 67; Shanahan v Scott (1957) 96 CLR 245 at 250 per Dixon CJ, Williams, Webb and Fullagar JJ; [1957] HCA 4; Peppers Self Service Stores Pty Ltd v Scott (1958) 98 CLR 606 at 610 per Dixon CJ and Taylor J; [1958] HCA 39; Utah Construction & Engineering Pty Ltd v Pataky [1966] AC 629 at 640; Willocks v Anderson (1971) 124 CLR 293 at 298-299 per Barwick CJ, Menzies, Windeyer, Owen, Walsh and Gibbs JJ; [1971] HCA 28; (Footnote continues on next page) Crennan Migration Act provides that "[t]he regulations may prescribe criteria for a visa or visas of a specified class", including protection visas. It is also well established that any conflict between the language of particular provisions may be resolved "by reference to the language of the instrument viewed as a whole"363. Applying relevant principles, the power in s 31(3), which is expressed generally, is a power to prescribe criteria which are not inconsistent with the Migration Act. Clause 866.225(a) of Sched 2 to the Migration Regulations prescribes as a criterion for the grant of a protection visa that the applicant "satisfies public interest criteria 4001, 4002 and 4003A". PIC 4002 provides as follows: "The applicant is not assessed by [ASIO] to be directly or indirectly a risk to security, within the meaning of section 4 of [the ASIO Act]." If, after considering a valid application for a visa, the Minister is not satisfied that the criteria prescribed for it by the Migration Act or the Migration Regulations have been satisfied, s 65(1) of the Migration Act requires the Minister to refuse to grant the visa. Part IV of the ASIO Act governs ASIO's role in relation to the provision of security assessments. Subject to certain exceptions which are not presently relevant364, a security assessment provided by ASIO in relation to the exercise of any power, or the performance of any function, in relation to a person under the Migration Act is not subject to a requirement to state the grounds upon which such an assessment has been made, or to review by the Administrative Appeals Tribunal ("the AAT") on an application under s 54 of the ASIO Act365. Harrington v Lowe (1996) 190 CLR 311 at 324-325 per Brennan CJ, Dawson, Toohey, Gaudron, McHugh and Gummow JJ; [1996] HCA 8. See also Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 380 [61] per McHugh, Gummow, Kirby and Hayne JJ; [1998] HCA 28. See also Minister for Resources v Dover Fisheries Pty Ltd (1993) 43 FCR 565 at 577-578 per 363 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69] per McHugh, Gummow, Kirby and Hayne JJ, citing Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 320 per Mason and Wilson JJ; [1981] HCA 26. See also Commissioner for Railways (NSW) v Agalianos (1955) 92 CLR 390 at 397 per Dixon CJ; [1955] HCA 27. 364 See ASIO Act, s 36(b); Migration Act, s 202. 365 ASIO Act, ss 36 and 37, and par (b) of the definition of "prescribed administrative action" in s 35(1). Crennan A decision to refuse to grant a protection visa relying on PIC 4002 may be subject to review by the Refugee Review Tribunal ("the RRT") under Pt 7 of the Migration Act366. The decision of the delegate of the Minister to refuse to grant the plaintiff a protection visa was reviewed in this way. However, the only relevant matter for the RRT to consider on such a review is whether the applicant for review has or has not been "assessed by [ASIO] to be directly or indirectly a risk to security". As the RRT correctly observed in its reasons for affirming the delegate's decision to refuse to grant the plaintiff a protection visa, the RRT "does not have the power to go behind or examine the validity of the ASIO assessment" in the course of such a review. Decisions relying on Art 1F, 32 or 33(2) of the Convention The power to refuse to grant a protection visa to a refugee who constitutes a threat to national security is part of a wider legislative "scheme to exclude persons whose presence in Australia is undesirable"367; ss 500-503 of the Migration Act deal specifically and in detail with that subject matter. Section 500(1) of the Migration Act provides that applications may be made to the AAT for review of specified categories of decisions under the Migration Act368. Read together, ss 500(1)(c) and 500(4)(c) give the AAT jurisdiction to review any decision under the Migration Act "to refuse to grant a protection visa, or to cancel a protection visa, relying on one or more of the following Articles of [the Convention], namely, Article 1F, 32 or 33(2)", other than a decision to which a certificate under s 502 applies. As explained by the Chief Justice and Hayne J369, a decision under s 501 of the Migration Act to refuse to grant a protection visa invoking the aspect of the character test set out in s 501(6)(d)(v) could be a decision which meets this description370. Other types of decision under the Migration Act might also meet 366 See Migration Act, ss 411, 412. 367 Australia, Senate, Migration (Offences and Undesirable Persons) Amendment Bill 1992 (Cth), Explanatory Memorandum at 1. 368 The AAT does not have general review powers. Instead, the AAT's power to review a decision depends upon an application being made to it under an enactment: Administrative Appeals Tribunal Act 1975 (Cth) ("AAT Act"), ss 25(1) and (4). 369 Reasons of the Chief Justice at [36]-[45]; reasons of Hayne J at [188]-[194]. 370 The Explanatory Memorandum to the Bill which introduced the character test provisions states that the phrase "represent a danger" (which occurs in s 501(6)(d)(v)) includes "an assessment that a person is a risk to Australia's (Footnote continues on next page) Crennan this description371. For example, a decision under s 501(3) to refuse to grant, or to cancel, a protection visa in the "national interest" invoking the aspect of the character test set out in s 501(6)(c)(ii) (that is, that "having regard to ... the person's past and present general conduct ... the person is not of good character") might qualify as a decision covered by s 500(1)(c)372. It can also be noted that a decision to cancel a visa relying on Arts 32 and 33(2) might conceivably be made otherwise than under s 501. For example, a decision under s 116(1)(e) to cancel a protection visa on the basis that "the presence of its holder in Australia is, or would be, a risk to the ... safety or good order of the Australian community" might also qualify as a decision covered by s 500(1)(c)373. Whether a particular decision under the Migration Act is a decision "to refuse to grant a protection visa, or to cancel a protection visa, relying on one or more of the following Articles of [the Convention], namely, Article 1F, 32 or 33(2)" will be a matter which the AAT will have jurisdiction to decide as an essential preliminary to the exercise of its substantive jurisdiction on an application for review under s 500(1)(c)374. One question which might arise in this context is whether Arts 32 and 33(2) of the Convention can apply to a decision to refuse to grant a protection visa. Article 32(1) of the Convention prohibits the expulsion of a refugee national security": Australia, Senate, Migration (Offences and Undesirable Persons) Amendment Bill 1992 (Cth), Explanatory Memorandum at 4 [16]. 371 No party sought to challenge NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 176 [42] per Gleeson CJ, McHugh, Gummow, Hayne, Callinan and Heydon JJ; [2005] HCA 6, and all proceeded on the basis that the Minister cannot rely on Arts 32 and 33(2) of the Convention to find under s 36(2) of the Migration Act that a person is not a person to whom Australia has protection obligations under the Convention. 372 A decision to refuse to grant a visa relying on the "national interest" is one to which the rules of natural justice are said not to apply: Migration Act, s 501(5). It can be noted that Art 32(2) of the Convention requires a decision as to expulsion to be made "in accordance with due process of law" but that requirement may be modified for "compelling reasons of national security". 373 See Convention, Art 32(1), which allows a state to expel a refugee on grounds of "public order". 374 See AAT Act, ss 25(1) and (4). See also Public Service Association of South Australia Inc v Industrial Relations Commission (SA) (2012) 86 ALJR 862 at 871 [31] per French CJ, 874-875 [55]-[57] per Gummow, Hayne, Crennan, Kiefel and Bell JJ, 882 [91] per Heydon J; 289 ALR 1 at 10, 15-16, 25; [2012] HCA 25. Crennan "lawfully in" a state's territory. As an "unlawful non-citizen"375 the plaintiff is not an "outlaw"376, and he has access to the Australian legal system. However, in any event, for the reasons given by Kiefel J377, a literal application of the text of Arts 32 and 33(2) is neither necessary nor appropriate in construing s 500(1)(c). The form and conduct of the review undertaken by the AAT on an application under s 500(1)(c) will be determined by the provisions of the AAT Act, as modified by sub-ss (5A)-(8) of s 500 of the Migration Act. Section 500(5) of the Migration Act contains directions to the President of the AAT as to the constitution of the AAT for the purposes of a review on an application under s 500(1), including a direction that the President must have regard to the degree to which matters to which the proceeding relates concern the security of Australia378. Review by the AAT on an application under s 500(1) is a form of merits review379. A decision of the AAT on such a review may be appealed to the Federal Court of Australia on a question of law380. Under s 502 of the Migration Act, if the Minister intends to make a decision to refuse to grant, or to cancel, a protection visa relying on Arts 1F, 32 or 33(2) of the Convention in relation to a person, and the Minister decides that it is in the "national interest" that the person be declared to be an excluded person, the Minister may, as part of the decision, issue a certificate to that effect. The Minister must make such a decision personally, and must cause notice of the making of the decision to be laid before both Houses of Parliament within 15 sitting days of making the decision. A decision to which a certificate under s 502 applies cannot be reviewed by the AAT. The provisions of s 502 are consonant with Art 32(2) of the Convention to the extent that "compelling reasons of national security" may have the result that no appeal is available from a decision relying on that Article. 375 Migration Act, s 14(1). 376 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 611-612 [78] per Gummow J; [2004] HCA 46. See also Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs ("Chu Kheng Lim") (1992) 176 CLR 1 at 19 per Brennan, Deane and Dawson JJ; [1992] HCA 64. 377 Reasons of Kiefel J at [449]-[452]. Cf R (ST) v Secretary of State for the Home Department [2012] 2 WLR 735; [2012] 3 All ER 1037. 378 Migration Act, s 500(5)(c). 379 AAT Act, s 43(1). 380 AAT Act, s 44(1). Crennan Submissions In relation to Question 2A, the plaintiff submitted that PIC 4002 is inconsistent with, or repugnant to, the scheme of the Migration Act concerning the right of a state to expel or return a refugee who constitutes a threat to national security, a subject covered by Arts 32 and 33(2) of the Convention. The inconsistency was said to arise because the criterion imposed by PIC 4002 undermined or negated the scheme of the Migration Act to be found in ss 500- 503. The plaintiff contrasted the circumstance that a decision-maker who invoked PIC 4002 to refuse to grant a protection visa was only required to be satisfied of the existence of an adverse security assessment with the requirement for substantive consideration under ss 501 and 502, and the availability of substantive review under s 500(1)(c). The defendants responded by contending that s 31(3) of the Migration Act, which provides that "[t]he regulations may prescribe criteria for a visa or visas of a specified class", was the "leading" provision381 in respect of any conflict between s 31(3) and s 500(1)(c). The defendants further argued that, even if s 501 of the Migration Act could be said to encompass a power to make a decision relying on Arts 32 and 33(2) of the Convention, differences in scope between PIC 4002 and Arts 32 and 33(2) of the Convention meant that there was no inconsistency between PIC 4002 and the scheme of the Migration Act set out in ss 500-503. Inconsistency A decision to refuse to grant a protection visa relying on PIC 4002 effectively reposes the power of determining the application for a protection visa in the hands of an officer of ASIO. The scheme under the Migration Act for refusing such an application relying on Arts 32 and 33(2) reposes the power of determining the application in the Minister personally or in the Minister's delegate. With some exceptions which are not presently relevant, an officer of ASIO is not required to state the grounds for issuing a security assessment for the purposes of the Migration Act. A decision by the Minister personally under s 502 of the Migration Act is subject to parliamentary scrutiny. A decision under s 501 of the Migration Act requires the Minister (or, in the case of a decision under s 501(1), a delegate of the Minister) to reach specific states of satisfaction as to whether the applicant for a visa "passes the character test", or whether the refusal of a visa is "in the national interest". 381 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 [70] per McHugh, Gummow, Kirby and Hayne JJ. Crennan A decision to refuse an application for a protection visa relying on PIC 4002 is subject to review under Pt 7 of the Migration Act. However, as explained above, neither the substance nor the making of the security assessment is relevantly subject to merits review. By comparison, a decision by the Minister, or the Minister's delegate, relying on Arts 32 and 33(2) (other than a decision to which a certificate under s 502 applies) is reviewable on the merits by the AAT. These differences support the plaintiff's essential contention that the prescription of PIC 4002 as a criterion for the grant of a protection visa departs from and undermines the specific provisions of the Migration Act which apply to a decision to refuse, or to cancel, a protection visa relying on Arts 32 and 33(2) of the Convention. The differences in scope between PIC 4002, s 4 of the ASIO Act and Arts 32 and 33(2) of the Convention, which were noted in submissions, do not ameliorate that inconsistency. This leads to the conclusion, which answers Question 2A, that cl 866.225 of Sched 2 to the Migration Regulations is, to the extent that it prescribes PIC 4002 as a criterion for the grant of a protection visa, beyond the power conferred by s 31(3) of the Migration Act. It should be noted that a decision to refuse to grant a protection visa to a refugee relying on Arts 32 and 33(2) of the Convention which is finally determined (and therefore engages s 198 of the Migration Act) might raise issues relating to: the right of a sovereign state to expel a refugee on grounds of national security382; the obligation not to expel or return such a refugee to a country where his life or freedom would be threatened on Convention grounds ("the non- refoulement obligation")383 unless there are reasonable grounds for regarding the refugee as "a danger to the security of the country in which he is"384; 382 See Convention, Arts 32(1) and (2); Attorney-General (Canada) v Cain [1906] AC 542 at 546; Chu Kheng Lim (1992) 176 CLR 1 at 29 per Brennan, Deane and Dawson JJ; T v Immigration Officer [1996] AC 742 at 754 per Lord Mustill; Re Woolley; Ex parte Applicants M276/2003 (2004) 225 CLR 1 at 12-13 [18] per Gleeson CJ; [2004] HCA 49; R (ST) v Secretary of State for the Home Department [2012] 2 WLR 735 at 748 [32]-[33] per Lord Hope of Craighead; [2012] 3 All ER 383 Convention, Art 33(1). 384 Convention, Art 33(2). Crennan the authority to detain under the Migration Act, which is limited by reference to the purposes of detention, which can include removal385; the possible length and efficacy of the removal process in respect of a refugee with an adverse security assessment if a sovereign state wishes to expel the refugee, but not to a country where his life or freedom would be threatened on Convention grounds386; and the authorities which provide that there must be "express authorization of an abrogation or curtailment of a fundamental right [or] freedom" such as the right to personal liberty387. There is potential for serious conflict between the right to expel and the non-refoulement obligation. In the light of the relevant authorities, there is also the possibility that the lawfulness of detention will be affected by the length of the removal process. Removal under s 198 of the Migration Act must occur "as soon as reasonably practicable". However, what is reasonably practicable in respect of an unlawful non-citizen who is a refugee with an adverse security assessment may differ from what is reasonably practicable in respect of an unlawful non-citizen without such an assessment. This highlights the importance of the specific provisions of the Migration Act which apply to the expulsion of a refugee who poses a risk to national security. It also shows the seriousness of departing from those specific provisions, or undermining their operation, as is occasioned by the prescription of PIC 4002 as a criterion for the grant of a protection visa. 385 Chu Kheng Lim (1992) 176 CLR 1 at 33 per Brennan, Deane and Dawson JJ. See also at 11-12 per Mason CJ, 57 per Gaudron J, 65-66 and 71 per McHugh J. See further Re Woolley; Ex parte Applicants M276/2003 (2004) 225 CLR 1 at 13-14 [20]-[21] per Gleeson CJ, 19-20 [44]-[45] per McHugh J, 51-52 [133]-[134] per 386 See, for example, Zaoui v Attorney-General [2005] 1 NZLR 577, particularly at 599-602 [88]-[97] per McGrath J. 387 Coco v The Queen (1994) 179 CLR 427 at 437 per Mason CJ, Brennan, Gaudron and McHugh JJ; [1994] HCA 15. See Annetts v McCann (1990) 170 CLR 596 at 598 per Mason CJ, Deane and McHugh JJ; [1990] HCA 57; R v Home Secretary; Ex parte Simms [2000] 2 AC 115 at 131 per Lord Hoffmann; Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 492 [30]; [2003] HCA 2; Al-Kateb v Godwin (2004) 219 CLR 562 at 577 [19] per Gleeson CJ; [2004] HCA 37; CTM v The Queen (2008) 236 CLR 440 at 497-498 [201] per Heydon J; [2008] HCA 25. See also South Australia v Totani (2010) 242 CLR 1 at 155-156 [423] per Crennan and Bell JJ; [2010] HCA 39. Crennan Questions 2 and 3 – detention and removal The legislation which introduced mandatory detention under the Migration Act in 1992388 was considered in Chu Kheng Lim389. In a joint judgment of Brennan, Deane and Dawson JJ, with which Mason CJ relevantly agreed390, it was recognised that aliens (now referred to as "unlawful non-citizens") are subject to a power to expel or exclude which is recognised in international law as an incident of sovereignty over territory391. Their Honours also said that the limited authority under the Migration Act to detain an alien did not infringe Ch III of the Constitution because "authority to detain in custody [under the Migration Act] is neither punitive in nature nor part of the judicial power of the Commonwealth."392 Applying those principles, their Honours upheld as constitutional sections of the Migration Act dealing with powers to detain and deport on the basis that the power to detain required and authorised by those sections was "reasonably capable of being seen as necessary for the purposes of deportation or necessary to enable an application for an entry permit to be made and considered."393 The principle established in Chu Kheng Lim, that the Executive's authority to detain under the Migration Act is limited by reference to the purposes of the detention (which then included expulsion and deportation), applies with equal force in respect of current provisions394 concerning detention of unlawful non- 388 The Migration Amendment Act 1992 (Cth) inserted a new Div 4B into Pt 2 of the Migration Act (later renumbered Div 6 of Pt 2 of the Migration Act), providing for the detention of certain non-citizens. 389 (1992) 176 CLR 1. 390 (1992) 176 CLR 1 at 10. 391 (1992) 176 CLR 1 at 29. See also Attorney-General (Canada) v Cain [1906] AC 542 at 546; T v Immigration Officer [1996] AC 742 at 754 per Lord Mustill; Re Woolley; Ex parte Applicants M276/2003 (2004) 225 CLR 1 at 12-13 [18] per Gleeson CJ; R (ST) v Secretary of State for the Home Department [2012] 2 WLR 735 at 748 [32]-[33] per Lord Hope; [2012] 3 All ER 1037 at 1052. 392 (1992) 176 CLR 1 at 32 (citation omitted). 393 (1992) 176 CLR 1 at 33. 394 The Migration Reform Act 1992 (Cth) introduced a new Div 4C into Pt 2 of the Migration Act (later renumbered Div 7 of Pt 2 of the Migration Act), providing for the detention of unlawful non-citizens. Crennan citizens for purposes which include enabling an application for a visa to be made and considered, and expulsion or removal395. The conclusion that cl 866.225 is invalid to the extent that it prescribes PIC 4002 as a criterion for the grant of a protection visa has the effect that the plaintiff's application for a protection visa is yet to be considered, and the plaintiff remains in lawful detention for that purpose, pursuant to ss 189 and 196 of the Migration Act. This answers Question 3. The conclusion described above renders it unnecessary to consider the plaintiff's continuing detention in the context of powers to remove under s 198, or to answer Question 2. It is worth noting that it follows from the provisions of the ASIO Act, particularly s 17(1)(c)396, that the conclusion of invalidity in respect of cl 866.225 has no necessary impact on the 2012 assessment. Further, the conclusion that the requirements of procedural fairness were afforded in the interview of the plaintiff by officers of ASIO in November 2011 may be relevant to the continuing use of the 2012 assessment for the purposes of functions and responsibilities under the Migration Act. In that regard, the provisions of the ASIO Act do not preclude the regular review of assessments made pursuant to that Act. Answers I would answer the questions in the Special Case, including Question 2A as amended, as proposed by Kiefel J. 395 See, for example, Re Woolley; Ex parte Applicants M276/2003 (2004) 225 CLR 1 at 13-14 [20]-[21] per Gleeson CJ, 19-20 [44]-[45] per McHugh J, 51-52 [133]- 396 ASIO Act, s 17(1)(c) provides that one of the functions of ASIO is "to advise Ministers and authorities of the Commonwealth in respect of matters relating to security, in so far as those matters are relevant to their functions and responsibilities". ASIO Act, s 37(1) provides that "[t]he functions of [ASIO] referred to in [s 17(1)(c)] include the furnishing to Commonwealth agencies of security assessments relevant to their functions and responsibilities." 407 KIEFEL J. The plaintiff is a national of Sri Lanka and entered the Australian migration zone at Christmas Island on 29 December 2009 as the holder of a special purpose visa which expired that day. He has not since held a visa and is therefore an unlawful non-citizen397 and liable to removal from Australia under the Migration Act 1958 (Cth)398 on that account, subject to consideration of his application for a protection visa. On 18 February 2011, a delegate of the fourth defendant, the Minister for Immigration and Citizenship, found that the plaintiff was a refugee within the meaning of the Convention relating to the Status of Refugees (1951) as amended by the Protocol relating to the Status of Refugees (1967) (together referred to as "the Refugees Convention") because he had a well-founded fear of persecution in Sri Lanka for reasons of his race and imputed political opinion and is unable, or, owing to such fear, is unwilling, to return to that country. The plaintiff had been a member of the Liberation Tigers of Tamil Eelam ("the LTTE"). The delegate found, and the defendants accept, that should the plaintiff be returned to Sri Lanka, there is a real risk that he will be persecuted by way of abduction, torture or death. Despite these findings, the delegate did not grant the plaintiff a protection visa. The sole reason for the delegate's refusal to do so was that the plaintiff did not meet the requirements of public interest criterion ("PIC") 4002, which is referred to in cl 866.225(a) of Sched 2 to the Migration Regulations 1994 (Cth). PIC 4002 requires399 that an applicant for a protection visa not be assessed by the Australian Security Intelligence Organisation ("ASIO") as "directly or indirectly a risk to security, within the meaning of section 4 of the Australian Security Intelligence Organisation Act 1979." The plaintiff was unable to meet the requirements of PIC 4002 because, in December 2009, ASIO had made such an assessment. The Refugee Review Tribunal affirmed the delegate's decision on 25 May 2011. The Tribunal recorded that it had no alternative but to do so, since the plaintiff could not satisfy PIC 4002 and was therefore not entitled to be granted a protection visa. The Tribunal regarded the existence of a valid adverse security assessment by ASIO as sufficient for the purposes of PIC 4002. Neither the delegate nor the Tribunal had the assessment before it. In this regard, it may be observed that ASIO is not required to provide a statement of the grounds of an adverse security assessment where the assessment is conducted in connection with the exercise of a power or performance of a function under the 397 Migration Act 1958 (Cth), ss 13-14. 398 Migration Act 1958, s 198. 399 Migration Regulations 1994 (Cth), Sched 4. Migration Act400. It would appear from an affidavit filed in these proceedings by the Director-General of Security, the first defendant, that an opinion was formed by ASIO that the plaintiff: "remains supportive of the LTTE and its use of violence to achieve its political objectives, and will likely continue to support LTTE activities of security concern in and from Australia." In the hearing before the Refugee Review Tribunal, the plaintiff claimed that he had not been interviewed by ASIO prior to the issue of the 2009 assessment and had therefore been denied procedural fairness. An interview was subsequently conducted by officers of ASIO on or around 4 November 2011 in the presence of the plaintiff's lawyer. The interview was recorded and transcribed. On 9 May 2012, a further security assessment, to the same effect as the earlier assessment and following the terms of PIC 4002, issued. The parties have treated the earlier assessment as superseded. The plaintiff is presently detained in Melbourne by the second defendant, the Officer in Charge of the Melbourne Immigration Transit Accommodation, who relies on s 189(1) of the Migration Act for that purpose. The plaintiff has no present right to enter and remain in any country, other than Sri Lanka, including a country which is a safe third country within the meaning of s 91D of the Migration Act. This is despite enquiries and requests of other countries having been made by the Australian authorities. Procedural fairness? In these proceedings, the plaintiff contends that he was denied procedural fairness because the officers of ASIO who conducted the interview did not put to him specific allegations concerning his involvement with and support for the LTTE and the likelihood that he would continue to support that organisation. However, these matters were largely in the nature of opinions formed by the officers and as such were not required to be put before the plaintiff for comment401. 400 Australian Security Intelligence Organisation Act 1979 (Cth), s 36(b) read with ss 35(1) (par (b) of the definition of "prescribed administrative action") and 37(2). An exception exists in respect of assessments made for the purposes of s 202(1) of the Migration Act. 401 Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme (2003) 216 CLR 212 at 219 [21]-[22]; [2003] HCA 56, citing Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576; SZBYR v Minister for Immigration and Citizenship (2007) 81 ALJR 1190 at 1196 (Footnote continues on next page) The defendants accept that the ASIO officers were required to afford the plaintiff procedural fairness and that that obligation extended to directing the plaintiff's attention to the issue of concern to ASIO – in this case, his role in the LTTE – and to giving him an opportunity to address that issue and to advance any evidence or material relevant to it. The defendants contend that obligation was fulfilled. The defendants point out that: the plaintiff was legally represented at the interview; the interview was lengthy; the plaintiff's attention was directed to the issue of concern to ASIO, namely his association with and support for the LTTE; and he was given ample opportunity to respond to that issue. A reading of the transcript of the interview confirms the correctness of these submissions. There was no denial of procedural fairness. The Migration Act and Arts 1F, 32 and 33 of the Refugees Convention In Plaintiff M61/2010E v The Commonwealth402, and again in Plaintiff M70/2011 v Minister for Immigration and Citizenship403, this Court said that the text and structure of the Migration Act proceed from an assumption that Australia may have protection obligations to individuals. In that expression, the Migration Act may not accurately reflect the nature of Australia's obligations under the Refugees Convention. As was pointed out in NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs404, those obligations are owed to other "Contracting States" rather than to individuals. This observation does not affect the means provided by the Migration Act to deal with a non-citizen's claim to protection. In Plaintiff M61, the Court went on to say that the Migration Act provides power to respond to Australia's international obligations by granting a protection visa in an appropriate case and by not returning a person to a country where he or she has a well-founded fear of persecution for a reason stipulated in Art 1A405. It is necessary to understand how that response is framed and the importance that certain articles of the Convention have to the Minister's power to grant or refuse a protection visa. [18]; 235 ALR 609 at 616; [2007] HCA 26; Minister for Immigration and Citizenship v SZGUR (2011) 241 CLR 594 at 598-599 [9]; [2011] HCA 1. 402 (2010) 243 CLR 319 at 339 [27]; [2010] HCA 41. 403 (2011) 244 CLR 144 at 174-175 [44], 189 [90]; [2011] HCA 32. 404 (2005) 222 CLR 161 at 169 [16]; [2005] HCA 6. 405 Plaintiff M61/2010E v The Commonwealth (2010) 243 CLR 319 at 339 [27]. Article 1A of the Refugees Convention contains a definition of the term "refugee" for the purposes of the Convention. It is not necessary to set it out. The plaintiff has a finding in his favour which follows the terms of that definition. Article 1F provides that the Refugees Convention shall not apply to any person for whom there are serious reasons for considering that the person has committed certain crimes – a crime against peace, a war crime, or a crime against humanity, or a serious non-political crime prior to the person's admission to the country of refuge – or has been guilty of acts contrary to the purposes and principles of the United Nations. Article 32 provides that "Contracting States shall not expel a refugee lawfully in their territory save on grounds of national security or public order." Article 33(1) prohibits the expulsion or return (refoulement) of a refugee to the frontiers of territories "where his life or freedom would be threatened". Article 33(2) states that "[t]he benefit of the present provision may not, however, be claimed by a refugee whom there are reasonable grounds for regarding as a danger to the security of the country in which he is". Attention is necessarily directed, in these proceedings, to the references in Arts 32 and 33 to the national security of a Contracting State, to s 500(1)(c) of the Migration Act, which refers to these Articles, and to Art 1F, as bases for refusing the grant of a protection visa. It will be necessary, in due course, to consider the scheme of the Migration Act as a whole406. The starting point of analysis, however, is s 500(1)(c), which, on the view I have taken, is critical to the plaintiff's argument concerning PIC 4002. Section 500 is entitled "Review of decision" and sub-s (1) provides for a review by the Administrative Appeals Tribunal ("the AAT") of three kinds of decisions: decisions under s 200 to deport a non-citizen convicted of certain crimes; decisions concerning the application of the character test in s 501; and, relevantly: a decision to refuse to grant a protection visa, or to cancel a protection visa, relying on one or more of the following Articles of the Refugees Convention, namely, Article 1F, 32 or 33(2)"407. 406 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69]; [1998] HCA 28. 407 References in these reasons to s 500 refer to that provision as it stood prior to amendment by the Migration Amendment (Complementary Protection) Act 2011 (Cth). Section 500(1)(c) therefore recognises that the Minister has the power to refuse a protection visa, inter alia, on the ground that the applicant poses a danger to national security. Section 501(1) provides that the Minister may refuse to grant a visa to a person if the person does not satisfy the Minister that he or she passes the character test. It is not restricted in its application to protection visas. A person does not pass the character test, which is set out in s 501(6), if, inter alia, there is a significant risk that he or she would represent a danger to the Australian community if he or she were allowed to enter or remain in Australia. It may be observed that this is not inconsistent with the terms of Art 33(2). The Migration Act contains further references to a decision to refuse to grant a protection visa based upon Arts 1F, 32 or 33(2). Section 502(1) provides that when the Minister intends to refuse to grant or to cancel a protection visa, relying on one or more of the Articles, and the Minister decides it is in the national interest that the person be declared an excluded person, the Minister may personally so certify. Section 503(1)(c) provides that a person who has been refused a protection visa, or whose protection visa has been cancelled, based on a decision relying on one or more of the Articles is not entitled to enter Australia or to be in Australia at any time during the period determined under the regulations. Mention may also be made of s 91T, which clarifies the meaning of the term "non-political crime" appearing in Art 1F, for the purposes of the Migration Act. Section 91U likewise clarifies the meaning of a "particularly serious crime", which appears in Art 33(2). Sections 500 to 503 may be seen as something of a scheme which provides the Minister with a power to refuse a visa to a person, to cancel a person's visa, or to directly exclude a person from Australia, where that person is seen to pose risks of certain kinds to the Australian community. Decisions made under s 501(1) or in exercise of the power recognised by s 500(1)(c) are, however, expressed to be subject to review by the AAT408. The Minister's personal decision under s 502 to exclude a person in the national interest is not409, but it is subject to the scrutiny of Parliament410. It is clearly possible that the application of s 501 may involve an assessment of the risk posed by a person to the security of Australia in 408 Migration Act 1958, ss 500(1)(b), 500(1)(c). 409 Migration Act 1958, s 500(1) expressly excepts from such review decisions to which a certificate under s 502 applies. 410 Migration Act 1958, s 502(3). considering whether the person represents a danger to the Australian community. That is not, however, the principal focus of the section. It involves wider considerations as to a person's character and is not limited to decisions concerning protection visas. Section 501 does not refer to refugees or the Refugees Convention. Questions as to national security, in the context of a refusal of a person's application for a protection visa, are more squarely raised by s 500(1)(c). The power of refusal recognised by s 500(1)(c) is clearly one that is additional to, and separate from, the power given by s 501(1) and should be applied in its field of operation. The source of the power so recognised is a matter dealt with later in these reasons411. For present purposes it may further be observed that the power is said by s 500(1)(c) to draw upon what is contained in the three Articles of the Refugees Convention, two of which, Arts 32 and 33(2), identify, as grounds for expulsion of a person from a country, the risks posed by the person to national security. Attention should therefore be directed, at least in the first instance, to the source of the power recognised by s 500(1)(c) and, if possible, effect given to that power. The issue concerning PIC 4002 Section 504(1) of the Migration Act provides that regulations may be made "not inconsistent with this Act, prescribing all matters which … are necessary or convenient to be prescribed for carrying out or giving effect to this Act". Section 31(3) provides that the regulations may prescribe criteria for a visa of a specified class, including for the class provided for by s 36. Section 36(1) provides that there is a class of visas to be known as protection visas. A primary criterion specified by s 36(2)(a) for a protection visa is that the applicant for the visa is "a non-citizen in Australia to whom the Minister is satisfied Australia has protection obligations under the [Refugees Convention]". Under the Migration Regulations, protection visas are subclass 866 visas. The criterion in s 36(2)(a) is restated in the Regulations412. Clause 866.225 requires that an applicant satisfy particular public interest criteria. PIC 4001 concerns the application of the character test. To satisfy PIC 4001, either an applicant must pass the character test, the Minister must be satisfied that the applicant would pass if the test was applied, or the Minister must have decided not to refuse a visa regardless of the test not being passed. PIC 4001(a) expresses no more than the requirements of s 501(1) of the Migration Act. 412 Migration Regulations, cll 866.211, 866.221. PIC 4002 is referred to above413. It refers to a security assessment made under the Australian Security Intelligence Organisation Act 1979 (Cth) ("the ASIO Act"). The term "security" is defined in s 4 as: the protection of, and of the people of, the Commonwealth and the several States and Territories from: espionage; sabotage; (iii) politically motivated violence; promotion of communal violence; attacks on Australia's defence system; or acts of foreign interference; whether directed from, or committed within, Australia or not; and the protection of Australia's territorial and border integrity from serious threats; and the carrying out of Australia's responsibilities to any foreign country in relation to a matter mentioned in any of the subparagraphs of paragraph (a) or the matter mentioned in paragraph (aa)." Paragraph (b) may extend the notion of security beyond what is contemplated by Arts 32 and 33(2). Those Articles are concerned with the risk that an individual may present for the security of the country in which he or she is residing. Paragraph (b) appears to comprehend obligations undertaken by Australia to other countries in connection with security. Conceivably, those obligations may be directed not to the security of Australia but to the security of another country. It may be accepted that the security of one country may be dependent upon the security of other countries414, but par (b) does not limit an assessment to such a consideration. An assessment based on par (b) would presumably link the applicant for a protection visa with Australia's obligation to another country, but in order to find that the applicant presented a threat to 414 Suresh v Canada (Minister of Citizenship and Immigration) [2002] 1 SCR 3 at 50 security, it would not be necessary to show that the applicant, directly or indirectly, presented a threat to the security of Australia. Regulations must not conflict with or override the provisions of their enabling Act, unless the enabling Act so provides415. Section 504 of the Migration Act requires that any regulations made under that provision carry out and give effect to the Act and not be inconsistent with it. In Harrington v Lowe416 it was held that rules of court could not vary or depart from the positive provisions of their enabling Act by imposing a regime inconsistent with the Act. A similar issue arises here concerning PIC 4002, which necessitates a consideration of the scheme of the Migration Act concerning the refusal of protection visas on grounds relating to national security. As will be observed, there is more involved than a difference in notions of security. The statutory scheme and s 500(1)(c) It was said in Minister for Immigration and Ethnic Affairs v Mayer417, and repeated by me in Plaintiff M70418, that the Migration Act may be seen to give effect to an obligation to determine whether an asylum seeker is a refugee, for the purposes of the Refugees Convention. The power of removal in s 198 cannot be engaged until such a determination is made. The plaintiff submits that his removal can occur only if there has been a decision to refuse to grant a protection visa relying on Arts 32 or 33(2). The course contemplated by the Migration Act is for the Minister, or the Minister's delegate, to consider whether to grant the visa. Section 65(1)(a) provides that if the Minister, after considering a valid application for a visa, is satisfied that: the health criteria for it (if any) have been satisfied; and the other criteria for it prescribed by this Act or the regulations have been satisfied; and 415 Ex parte Davis; In re Davis (1872) LR 7 Ch App 526 at 529; Bennion, Bennion on Statutory Interpretation, 5th ed (2008) at 244. 416 (1996) 190 CLR 311 at 324-325; [1996] HCA 8. 417 (1985) 157 CLR 290 at 300, 305-306; [1985] HCA 70. 418 Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 244 CLR (iii) the grant of the visa is not prevented by section 40 (circumstances when granted), 500A (refusal or cancellation of temporary safe haven visas), 501 (special power to refuse or cancel) or any other provision of this Act or of any other law of the Commonwealth; and any amount of visa application charge payable in relation to the application has been paid", a visa is to be granted. The health criteria419 require visa applicants to undergo medical and chest x-ray examinations. They may result in an applicant being placed under medical supervision if he or she presents a threat to public health in Australia. A criterion prescribed by the Migration Act is that in s 36(2), which has been referred to above. It follows from NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs420, and the finding that the plaintiff is a refugee within the meaning of the Refugees Convention, that that criterion is satisfied. Attention is focused by the defendants upon PIC 4002 as "other criteria … prescribed by … the regulations" within the meaning of s 65(1)(a)(ii). The defendants contend that one need go no further than to treat PIC 4002 as an essential criterion which is not met, and from which it follows that a protection visa must be refused. This was the approach taken by the delegate and the Refugee Review Tribunal. On this view it is not necessary for the Minister to consider the matters to which s 500(1)(c) directs attention. However, the submission overlooks the need to construe the Migration Act and Migration Regulations together. It assumes the validity of the prescription of PIC 4002 as a criterion for the grant of a protection visa, which is the matter in issue. On the material before the delegate and the Tribunal, the grant of a protection visa to the plaintiff was not prevented by any of the matters referred to in s 65(1)(a)(iii). The ASIO Act does not operate as a Commonwealth law upon the Migration Act, so that an assessment made under it could prevent the grant of a protection visa. The ASIO Act provides for the functions of ASIO, which include the furnishing of security assessments to Commonwealth agencies as relevant to their functions and responsibilities421. It is the Migration Regulations, 419 Migration Regulations, cll 866.223-866.224B of Sched 2. 420 (2005) 222 CLR 161 at 174 [33], 176 [42], 179-180 [57]. 421 Australian Security Intelligence Organisation Act 1979, s 37(1). through PIC 4002, which purport to give an ASIO security assessment the effect of preventing the grant of a visa. Section 501 of the Migration Act, which contains the character test, is specified as a provision which may prevent the grant of a protection visa. Section 500(1)(c) is an "other provision of this Act" for the purposes of s 65(1)(a)(iii), which may also prevent a grant, because it provides grounds for refusal. The defendants accept that s 500(1)(c) appears to contemplate a decision made by reference to the abovementioned Articles. For the reasons earlier given422, it is preferable to first consider the source of the power recognised by s 500(1)(c) to refuse a visa on grounds of, inter alia, security by reference to the Articles. The assumption made in s 500(1)(c), that there is a power to refuse the grant of a protection visa relying on the three Articles, suggests that there is another provision in the Migration Act which confers the power. But for the decision in NAGV, the obvious candidate would be s 36(2) and its requirement that a visa applicant be a person to whom the Minister is satisfied Australia has "protection obligations" under the Refugees Convention. On one view, the qualification of a person as a refugee under Art 1A is not sufficient to answer that question. Articles 1F, 32 and 33(2) are expressed in terms which prevent the operation of the Refugees Convention in certain circumstances, or prevent a particular person claiming the benefit of its provisions. Where those Articles operate such that the Refugees Convention does not apply or a refugee is disentitled from claiming the benefit of the prohibition on refoulement, it might be thought possible to conclude that Australia does not owe protection obligations to that person. However, NAGV holds that the reference to these Articles in the Migration Act does not derogate from a construction of s 36(2) by which the criterion there expressed is answered by reference to the definition of a refugee in Art 1A of the Refugees Convention423. The plaintiff's submissions do not seek to cast doubt upon the decision in NAGV. The defendants refer to the Explanatory Memorandum dealing with what became s 500(1)(c)424, where it was said that the provision has the effect of "removing the obligation to provide protection as a refugee to a person who has 423 NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 174 [33], 176 [42], 177 [47], 179-180 424 Section 180(1)(c), discussed in Australia, House of Representatives, Migration (Offences and Undesirable Persons) Amendment Bill 1992, Explanatory Memorandum at 3 [10]. committed crimes against peace, war crimes, crimes against humanity, serious non-political criminal offences, or otherwise presents a threat to the security of Australia or to the Australian community." A threat to the "security of Australia" may be taken to refer to Arts 32 and 33(2) and a "threat to the … Australian community" may reflect the danger to the community referred to in Art 33(2). The defendants point out that the assumption there expressed, that the effect of a person coming within Arts 1F, 32 or 33(2) was to remove protection obligations, was shown to be wrong in NAGV. But an acceptance of the defendants' proposition does not mean that the power referred to in s 500(1)(c), and the other sections referred to above, does not exist and cannot be used to refuse a protection visa on the grounds provided by these Articles. Section 500 and the other sections necessarily imply the existence of the power. Minister for Immigration and Ethnic Affairs v Mayer425, which has been referred to above, concerned s 6A(1)(c) of the Migration Act. That section provided that a permanent entry permit was not to be granted to a non-citizen after his entry into Australia unless, inter alia, the Minister had determined that he had the status of refugee within the meaning of the Refugees Convention. There was no other provision in the Migration Act providing a power of determination. This Court held that s 6A(1)(c) should be construed so as to imply that authority. It was said426 that a legislative provision which operates upon a specified determination of a Minister can readily be construed as impliedly conferring the statutory function to make the determination. Such a construction is clearly warranted where there is no other source apparent and the legislative provision would otherwise be without content if no authority to make the determination existed. The approach taken in Mayer was applied in Chan v Minister for Immigration and Ethnic Affairs427 and cited with approval in Minister for Immigration and Ethnic Affairs v Wu Shan Liang428. So far as concerns s 500(1)(c), the provision of a power to review a decision made relying upon the Articles confirms the correctness of the approach by which the power is implied. 425 (1985) 157 CLR 290. 426 Minister for Immigration and Ethnic Affairs v Mayer (1985) 157 CLR 290 at 302- 303 per Mason, Deane and Dawson JJ. 427 (1989) 169 CLR 379; [1989] HCA 62. 428 (1996) 185 CLR 259 at 273-274; [1996] HCA 6. See also Kruger v The Commonwealth (1997) 190 CLR 1 at 157; [1997] HCA 27; Attorney-General (Cth) v Oates (1999) 198 CLR 162 at 172 [16]; [1999] HCA 35; NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 175 [36]. The refusal of a protection visa on the grounds provided by those Articles, which include the safety of the community and national security, is not inconsistent with a conclusion that a person is a refugee to whom protection obligations are owed. Elsewhere in their submissions, the defendants rely upon the fact that s 36 itself recognises that some refugees may not be eligible to obtain protection visas. Section 36(3), which was introduced as part of the Border Protection Legislation Amendment Act 1999 (Cth) and was in place at the time NAGV was decided429, provides that Australia is taken not to have protection obligations to a non-citizen who has not taken all possible steps to avail himself or herself of a right to enter and reside in a country apart from Australia. NAGV was concerned with the construction of s 36(2) of the Migration Act and what constituted satisfaction of the criterion therein expressed. In the process of construing the provision, this Court excluded the operation of the Articles, in particular, the terms in which the obligation of non-refoulement is expressed in Art 33(1)430. But it did not suggest that satisfaction of that criterion meant that a refugee was entitled to a protection visa, or that the power referred to in s 500(1)(c) of the Migration Act could not be utilised to refuse the grant of a visa on the grounds provided by the Articles. Indeed the Court recognised the operation the Articles might have in relation to the grant or cancellation of a protection visa431. It is of no small importance to the statutory scheme, and its comparison with PIC 4002, that s 500(1)(c) provides a right of review from a decision refusing the grant of a protection visa which relies upon one or more of the Articles. The AAT has been selected to undertake the review of these decisions. Section 500(4) provides, in effect, that such a decision, along with the other types of decisions referred to in s 500(1) – to deport non-citizens who have been in Australia for less than 10 years and have been convicted of certain offences; and to refuse to grant or to cancel a visa based on application of the character test 429 Although s 36(3) of the Migration Act 1958 had been enacted by the time NAGV was decided, the visa application concerned in that case predated s 36(3). Thus, the relevant form of the Migration Act 1958 considered in NAGV was that prior to changes being made to s 36 by Pt 6 of Sched 1 to the Border Protection Legislation Amendment Act 1999 (Cth): see NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 168 430 NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 173-174 [28]-[33], 186 [81]. 431 NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 179-180 [57]. under s 501 – is not reviewable by other tribunals having review functions under the Migration Act, including the Refugee Review Tribunal. The reason for the choice of the AAT as the reviewing body may be that it is a "high ranking review tribunal", the President of which is required to be a judge of the Federal Court432. Section 500(5) of the Migration Act makes special provision for the President of the AAT to consider the persons who are to constitute the AAT in a proceeding to review decisions of the kind in question. Amongst the factors to which the President must have regard are the degree of public importance and the complexity of the matters to which the proceeding relates, and the degree to which the matters concern the security, defence or international relations of Australia. Can Arts 32 and 33(2) apply to a refusal? The defendants point to the terms of Art 32, which are expressed to deal only with the expulsion of a refugee who is lawfully in the territory of a Contracting State. Decisions in the United Kingdom and elsewhere, such as R (ST) v Secretary of State for the Home Department433, hold that whether a person is "lawfully" in a Contracting State falls to be determined by reference to whether the refugee has been granted the right to live in that State under its domestic law. The plaintiff in this case has not been granted that right. It follows, the defendants say, that there can never be a decision to refuse relying on Art 32. The "refusal to grant" referred to in s 500(1)(c) therefore miscarries. A literal application of the Articles is neither necessary nor appropriate in construing s 500(1)(c) to determine its intended operation in the statutory scheme. Rather it is necessary to approach the provision on the basis that no word, sentence or clause is superfluous, void or insignificant434. The decision to refuse a visa to which s 500(1)(c) refers is one made "relying on" the Articles. It cannot sensibly be suggested that the terms of the Articles are to be applied literally in this process. Section 500(1)(c) directs attention to the matters which form the basis for the non-operation of the Refugees Convention or the disentitlement of a person to the benefit of its provisions. 432 Daher v Minister for Immigration and Ethnic Affairs (1997) 77 FCR 107 at 110. 433 [2012] 2 WLR 735 at 748 [33]; [2012] 3 All ER 1037 at 1052. 434 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 382 [71], referring to The Commonwealth v Baume (1905) 2 CLR 405 at 414 per Griffith CJ; [1905] HCA 11. It is therefore not to the point, for the purpose of s 500(1)(c), that a person be lawfully resident in Australia. It is not to the point that the refoulement of the plaintiff is not contemplated, which is the premise for Art 33. Rather, those Articles should be taken to provide grounds for refusal by reference to the conduct, or potential future conduct, of a refugee and the effect of such conduct upon Australia's interests so far as they concern national security and the protection of the community. If there are reasonable grounds for regarding a refugee as "a danger to the security of [Australia]" (Art 33(2)) or there are "compelling reasons of national security" (Art 32(2)), the grant of a visa is prevented by a provision of the Migration Act within the meaning of s 65(1)(a)(iii). The AAT and review of security assessments The defendants point to special provisions in the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act") with respect to review of security assessments made by ASIO. These provisions include the creation of a Security Appeals Division435. Certain powers, such as the power to review adverse security assessments by ASIO436, may be exercised by the AAT only in this Division. Special procedures are involved in certain hearings in the Security Appeals Division, such as provisions for a private hearing437, and for the consideration by the presidential member as to whether information be disclosed where it is subject to certification by the Attorney-General that disclosure would be contrary to the public interest438. Section 500(1) is not the only provision in the Migration Act concerned with review by the AAT of security assessments or decisions based on such assessments. Section 202, which concerns deportation upon security grounds, refers to the availability of review and does so without reference to the additional procedures provided for in the AAT Act. It is not entirely clear what is sought to be drawn by the defendants from reference to the different procedures which apply to a review by the AAT of an adverse security assessment, so far as concerns the operation of s 500(1)(c). What the defendants' submission points out is that an assessment made for the purposes of PIC 4002 may be subject to a different review process. This tends to 435 Administrative Appeals Tribunal Act 1975 (Cth), Pt III, Div 1, s 19(2)(baa). 436 Administrative Appeals Tribunal Act 1975, s 19(6). 437 Administrative Appeals Tribunal Act 1975, s 39A(5). 438 Administrative Appeals Tribunal Act 1975, s 39B(5). highlight the fact that the Migration Regulations, by PIC 4002, establish a regime different from that applying under the Migration Act. Conclusions The Migration Act contemplates that the Minister, or the Minister's delegate, may consider whether a person poses a risk to the security of Australia in determining whether to grant or to refuse a protection visa. If the Minister considers that the risk to security is unacceptable, a visa may be refused notwithstanding that a person comes within the Refugees Convention's definition of a refugee. The Minister could be informed by an assessment by ASIO. It may be noted that such an assessment is required under the Migration Act where a person is to be deported on security grounds439. The Migration Act, by s 500(1)(c), provides for a review to be conducted by the AAT of a decision of this kind. This strongly implies that the grounds provided by the three Articles of the Refugees Convention, which may be relied upon by the Minister in refusing to grant a protection visa, are not criteria respecting the grant of a visa under s 65(1)(a)(ii); rather, what is contemplated is that the procedure concerning refusal on these grounds is subject to review by a tribunal chosen for that purpose. PIC 4002, if applied, would deny the Minister that consideration and it would deny the review process specified in s 500(1). It has the effect of bringing the consideration by the Minister, or the Minister's delegate, to a premature end and rendering the decision to that effect non-reviewable. The process created by PIC 4002 requires a refusal of a protection visa based entirely upon an opinion formed by officers of ASIO. But it is nowhere contemplated by the Migration Act that officers of ASIO are to have a determinative role regarding applications for visas. The ASIO Act provides for a review of an adverse security assessment by the AAT440, but that review would be of an assessment of security as defined by s 4 of the ASIO Act, which, as has been noted, contemplates wider notions of security. PIC 4002 could, on one view, be read down to limit the assessment of Australia's security conformably with Arts 1F, 32 and 33(2), but this would not overcome the clear intention of the Migration Act that the Minister, or the Minister's delegate, consider for him- or herself whether a protection visa should be refused on grounds of national security. PIC 4002's statement that the non- existence of an adverse security assessment is a criterion impermissibly cuts across the process intended by the Migration Act. 439 Migration Act 1958, s 202(1)(b). 440 Australian Security Intelligence Organisation Act 1979, s 54(1). On the view I have taken of this matter, it is neither necessary nor appropriate at this point to consider the arguments directed at the decision in Al-Kateb v Godwin441. The plaintiff may lawfully be detained until his application has been considered in accordance with the Migration Act. Until the outcome of the plaintiff's application is known, the determination of which may include the review provided by s 500(1)(c), consideration of the constitutional limits to the power to detain unlawful non-citizens is premature. I am in agreement with Hayne J as to the answers which should be given to questions 2, 3 and 4 of the Special Case, and to question 2A as amended. I have dealt with the question of procedural fairness. I would answer Question 1 as follows. Question 1: In furnishing the 2012 assessment, did the First Defendant fail to comply with the requirements of procedural fairness? Answer: 441 (2004) 219 CLR 562; [2004] HCA 37. Bell BELL J. The plaintiff is a Tamil national of Sri Lanka. He has been assessed by the United Nations High Commissioner for Refugees ("the UNHCR") and by Australia to be a refugee with a well-founded fear of persecution should he be returned to Sri Lanka. The plaintiff was registered by the UNHCR in Indonesia in July 2009. In November 2009, he was interviewed by an officer of the Commonwealth Department of Immigration and Citizenship ("DIAC"). At the time, the plaintiff was being held in an Indonesian immigration detention facility. Following the interview, the plaintiff was issued with a special purpose visa. The possession of the visa permitted the plaintiff to lawfully enter Australia. He entered Australia at Christmas Island on 29 December 2009. Within an hour of his arrival, the plaintiff's special purpose visa expired and he has not since held a visa under the Migration Act 1958 (Cth) ("the Act"). The plaintiff has been held in immigration detention since 30 December The plaintiff made a valid application for the grant of a protection visa, which would enable him to reside in the Australian community. Section 36(2)(a) of the Act provides as a criterion for the grant of a protection visa that the Minister for Immigration and Citizenship ("the Minister") is satisfied that the applicant is a non-citizen in Australia to whom Australia has protection obligations under the Refugees Convention as amended by the Refugees Protocol442 ("the Convention"). Additional criteria for the grant of protection visas are specified ("the Regulations")443. These include that at the time a decision to grant or refuse to grant the visa is made, the applicant must satisfy certain public interest criteria444. Public interest criterion 4002 ("PIC 4002") requires that the applicant is not assessed by the Australian Security Intelligence Organisation ("ASIO") to be directly or indirectly a risk to security445. the Migration Regulations 1994 (Cth) The question of whether Australia has protection obligations to a person is answered by determining whether the person is a refugee to whom the 442 Section 5 of the Act provides that the "Refugees Convention" means the Convention relating to the Status of Refugees done at Geneva on 28 July 1951 and the "Refugees Protocol" means the Protocol relating to the Status of Refugees done at New York on 31 January 1967. 443 The Regulations, Sched 2, Subclass 866. 444 The Regulations, Sched 2, cl 866.225(a). 445 PIC 4002 is set out in Sched 4, Pt 1, cl 4002 of the Regulations. Bell Convention applies by reference to Art 1446. A person with a well-founded fear of persecution for a Convention reason within the meaning of Art 1A(2) is a refugee. However, Art 1F states that the provisions of the Convention do not apply to a person if there are serious reasons for considering that the person has committed a crime against peace, a war crime, a crime against humanity, a serious non-political crime outside the country of refuge or other acts contrary to the purposes and principles of the United Nations. The plaintiff was assessed by the Minister's delegate to have a well- founded fear of persecution in Sri Lanka from the Sri Lankan Government, paramilitary groups and Tamil separatist groups on the basis of his race and his imputed political opinion. The latter was attributed to him by putative persecutors because he is a former member of the Liberation Tigers of Tamil Eelam ("the LTTE"). The delegate was satisfied that the plaintiff is at risk of being abducted, tortured or killed in Sri Lanka by the agents of persecution. She assessed the plaintiff to be a refugee. She was satisfied that he is not excluded under Art 1F from the benefit of that status. Notwithstanding that Australia owes protection obligations to the plaintiff, he was refused a protection visa. The refusal was the consequence of the plaintiff's inability to satisfy PIC 4002: ASIO has assessed that the plaintiff is directly or indirectly a risk to security. the The central obligation assumed by Contracting States under Convention is stated in Art 33(1): a State shall not expel or return ("refouler") a refugee to the frontiers of territories where the refugee's life or freedom would be threatened for a Convention reason. Article 33(2) provides that the benefit of this guarantee does not prevent the expulsion or return of a refugee where there are reasonable grounds for believing that the refugee is a danger to the security of the Contracting State. Australia does not claim to be relieved of its protection obligations to the plaintiff. It is not said that there are reasonable grounds for regarding the plaintiff as a danger to Australia's security such that he might be expelled or returned relying on Art 33(2). The plaintiff is being held in the Melbourne Immigration Transit Accommodation ("MITA"). The authority relied upon by the Officer in Charge of MITA is s 189(1) of the Act. That provision requires an officer to detain an unlawful non-citizen who is in the migration zone. A person who is detained under s 189 must be kept in immigration detention until removed from Australia under ss 198 or 199, deported, or granted a visa447. An officer must remove an 446 NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 176 [42] per Gleeson CJ, McHugh, Gummow, Hayne, Callinan and Heydon JJ; [2005] HCA 6 ("NAGV"). 447 The Act, s 196(1). Bell unlawful non-citizen detainee from Australia as soon as reasonably practicable after the final determination of the detainee's application for a substantive visa448. The scheme is detailed in Al-Kateb v Godwin449. The defendants submit that the power of removal from Australia under s 198 is to be construed as not authorising or requiring the removal of a refugee in breach of Australia's obligations under the Convention. That submission should be accepted. Sri Lanka is the only country which the plaintiff has a right to enter. The plaintiff remains in immigration detention because he cannot be returned to Sri Lanka and no other country is willing to receive him. These are the circumstances in which the plaintiff commenced proceedings in the original jurisdiction of the Court pursuant to ss 75(iii) and 75(v) of the Constitution, claiming relief including an order absolute for a writ of habeas corpus against the Officer in Charge of MITA and the Secretary of DIAC. The amended Special Case raised three substantive questions for determination. The first question asks whether, in furnishing to DIAC the adverse security assessment, the Director General of Security ("the Director General") failed to comply with the requirements of procedural fairness. The second question asks whether s 198 of the Act authorises the plaintiff's removal to a country in which he does not have a well-founded fear of persecution in circumstances in which he is a person to whom Australia has protection obligations and who has an adverse security assessment. The third question asks whether ss 189 and 196 authorise the plaintiff's detention. The answer to this question for which the plaintiff contends requires the Court to re-open the In the course of the hearing, the plaintiff was given leave to claim additional relief on a further ground. In the event that the answer to the second question is "yes", the plaintiff seeks a declaration that cl 866.225 of Sched 2 of the Regulations is ultra vires the power conferred by s 31(3) of the Act and invalid to the extent that it requires an applicant for a protection visa to satisfy PIC 4002. Success on this ground would mean that the plaintiff's application for a protection visa has not been lawfully determined. Since, in my opinion, the answer to the second question is "yes", it is convenient to address the challenge to the Regulations first. If the stipulation of PIC 4002 is ultra vires the regulation-making power under the Act, the remaining questions do not arise for determination. In such an event, the plaintiff acknowledges that his continued detention while his application is redetermined would be authorised under the Act. 448 The Act, ss 198(2) and 198(6). 449 (2004) 219 CLR 562; [2004] HCA 37 ("Al-Kateb"). Bell The challenge to PIC 4002 Before 1 November 1993, persons seeking to engage Australia's protection obligations were required to apply for recognition as a refugee and thereafter to seek permission to remain in Australia450. The Migration Reform Act 1992 (Cth) ("the Reform Act") combined these two processes into the single process of applying for a protection visa. From its inception, the scheme required an applicant for a protection visa to satisfy criteria in addition to the statutory criterion of being a person to whom Australia has protection obligations. Express provision was made for additional criteria to be specified in the regulations451. The regulations which accompanied the amendments introduced by the Reform Act included the requirement that an applicant satisfy public interest criteria, of which PIC 4002 was one. At the time, PIC 4002 stipulated that "the applicant is not assessed by the competent Australian authorities to be directly or indirectly a risk to Australian national security"452. Another public interest criterion stipulated by the regulations at the inception of the scheme required that the applicant not be a person whose presence in Australia was prejudicial to Australia's foreign relations453. PIC 4002 was amended in 2005 by the omission of the words "competent Australian authorities" and the substitution of the words "Australian Security Intelligence Organisation"454. The words "Australian national" before the word "security" were omitted and the words "within the meaning of section 4 of the Australian Security Intelligence Organisation Act 1979" were inserted after it. The changes confined the assessment to one carried out by ASIO. The assessment was not restricted to Australia's national security but it included 450 The scheme is described in Minister for Immigration and Ethnic Affairs v Mayer (1985) 157 CLR 290; [1985] HCA 70. 451 Migration Act, s 26(3) as at 1 November 1993 (now s 31(3)). 452 Migration (1993) Regulations 1992 (Cth), Sched 4, cl 4002. The Reform Act received assent on 17 December 1992. The bulk of the Reform Act, including the amendment to PIC 4002, commenced on 1 November 1993. The Migration (1993) Regulations 1992 (Cth), which introduced PIC 4002, commenced on 1 February 1993. PIC 4002 was amended to include the reference to "competent Australian authorities" and "Australian national security" by reg 36.2 of the Migration (1993) Regulations (Amendment) 1993 No 88 on 31 May 1993. 453 Migration (1993) Regulations 1992 (Cth), Sched 4, cl 4003. 454 Migration Amendment Regulations 2005 (Cth) (No 10). Bell consideration of security matters in the conduct of Australia's responsibilities to foreign countries455. Other amendments to the Act which were intended to commence with those introduced by the Reform Act inserted provisions relating to the refusal or cancellation of a protection visa "relying on one or more of ... Article 1F, 32 or 33(2) [of the Convention]"456. Jurisdiction was conferred on the Administrative Appeals Tribunal ("the AAT") to review a decision to refuse to grant a protection visa, or to cancel a protection visa, "relying on" one of more of Arts 1F, 32 or 33(2) (now s 500(1)(c)). The right to seek AAT review of decisions to refuse to grant or to cancel a protection visa relying on Arts 1F, 32 or 33(2) was not to apply to certain decisions taken personally by the Minister (now s 502(1)(a)(iii)). A person in relation to whom a decision has been made to refuse to grant, or to cancel a protection visa, relying on one or more of Arts 1F, 32 or 33(2) was not entitled to enter Australia or to be in Australia at any time during the period determined under the regulations (now s 503(1)(c)). Reference to Art 1F has been made earlier in these reasons. It deals with a person's past serious criminal activity and past acts that are contrary to the purposes and principles of the United Nations. A person to whom Art 1F applies is outside the provisions of the Convention. Articles 32 and 33(2) deal with the expulsion or return of refugees. Article 32 is concerned with a refugee who is lawfully in the territory of the expelling State. A refugee who answers this description is not to be expelled "save on grounds of national security or public order". In such an event, Art 32 dictates (except where compelling reasons of national security otherwise require) that the refugee be permitted to submit evidence to clear himself, and to appeal to and be represented before a competent authority, and to be allowed a reasonable period in which to seek legal admission into another country. The obligation of non-refoulement imposed by Art 33(1) applies whether the refugee is lawfully present within the territory of the State or otherwise. The obligation is subject to the exception stated in Art 33(2), which allows a Contracting State to return a refugee in circumstances in which there exist 455 Australian Security Intelligence Organisation Act 1979 (Cth) ("ASIO Act"), s 4, par (b) of definition of "security". 456 The Migration (Offences and Undesirable Persons) Amendment Act 1992 (Cth), ss 4(2)(b), 6, 7. Bell reasonable grounds for regarding the refugee as being a danger to the security of the country in which he is457. No express power to refuse to grant or to cancel a protection visa "relying on" Arts 1F, 32 or 33(2) is provided in the Act. As noted, s 36(2) incorporates as a criterion for the grant of a protection visa that the applicant is a person to whom Australia has protection obligations under the Convention. A decision to refuse to grant a protection visa because the person is not a person to whom the provisions of the Convention apply under Art 1F, and for that reason not within the criterion stated in s 36(2), is a decision "relying on" Art 1F to which the right of review before the AAT applies. The plaintiff's challenge to the validity of the stipulation of PIC 4002 is on the ground of repugnancy to the provisions of the Act respecting decisions to refuse to grant or to cancel a protection visa "relying on" Arts 32 and 33(2). Each deals, inter alia, with security in a manner that is said to be inconsistent with the stipulation of PIC 4002. The Explanatory Memorandum to the Bill introducing the provisions relating to decisions "relying on one or more of Arts 1F, 32 and 33(2)" stated458: "Subclause 4(2)(b) inserts new paragraph (c) into section 180 [now s 500(1)(c)] to extend the jurisdiction of the AAT to review decisions to refuse or cancel protection visas relying on Articles 1F, 32 or 33(2) of the Refugees Convention. Protection visas will come into existence on the commencement of the Migration Reform Act 1992 on 1 November 1993. The Articles of the Refugees Convention referred to in new paragraph 180(1)(c) have the effect of removing the obligation to provide protection as a refugee to a person who has committed crimes against peace, war crimes, crimes against humanity, serious non- political criminal offences, or otherwise presents a threat to the security of Australia or to the Australian community." (emphasis added) In NAGV459, it was explained that the adjectival phrase in s 36(2) (as it then stood) "to whom Australia has protection obligations under [the Convention]" describes a person who is a refugee within the meaning of Art 1 of 457 Under Art 33(2), a Contracting State may also refouler a refugee who has been convicted by a final judgment of a particularly serious crime and who constitutes a danger to the community of that country. 458 Australia, House of Representatives, Migration (Offences and Undesirable Persons) Amendment Bill 1992, Explanatory Memorandum at 3 [10]. 459 (2005) 222 CLR 161. Bell the Convention460. The assumption in the concluding sentence of the Explanatory Memorandum that each of Arts 1F, 32 and 33(2) have the effect of "removing the obligation to provide protection as a refugee" was wrong. A decision to refuse to grant a protection visa because an applicant is not a person to whom Australia has protection obligations is not one made relying on Arts 32 or 33(2). The introduction of the provisions relating to the refusal to grant or the cancellation of protection visas "relying on" the Convention Articles was noted in NAGV461. Their Honours suggested that the reference to Arts 32 and 33(2) may have been included "for more abundant caution or as epexegetical of Art 1F in its adoption by the Act, with operation both at the time of grant and later cancellation of protection visas."462 The plaintiff submits that ss 500(1)(c), 500(4)(c)463, 502(1)(a)(iii) and 503(1)(c) must be taken to reflect an express legislative intention that the Minister be permitted to refuse to grant or to cancel a protection visa "relying on" Arts 32 or 33(2). He contends that the power resides in s 501(1) and 501(6)(d)(v) or, perhaps, as an implication from the grant of jurisdiction under s 500(1)(c). Section 65(1) requires the Minister to grant the visa if he or she is satisfied that the criteria for the visa prescribed by the Act or the Regulations have been satisfied, and that the grant is not prevented by ss 40, 500A or 501 of the Act or by any other provision of the Act or any Commonwealth law, and that any applicable charge has been paid. If the Minister is not so satisfied, he or she is required to refuse to grant the visa464. Section 501 provides that the Minister may refuse to grant a visa to a person who does not pass the "character test". The "character test" is defined in s 501(6). Of present relevance is s 501(6)(d)(v), which states that a person does 460 (2005) 222 CLR 161 at 176 [42] per Gleeson CJ, McHugh, Gummow, Hayne, 461 (2005) 222 CLR 161 at 179 [55] per Gleeson CJ, McHugh, Gummow, Hayne, 462 (2005) 222 CLR 161 at 179 [57] per Gleeson CJ, McHugh, Gummow, Hayne, 463 Section 500(4)(c) provides that decisions to refuse to grant or to cancel a protection visa relying on one or more of Arts 1F, 32 or 33(2) are not reviewable by the Refugee Review Tribunal or the Migration Review Tribunal. 464 The Act, s 65(1)(b). Bell not pass the character test if, in the event the person were allowed to enter or to remain in Australia, there is a significant risk that the person would: "represent a danger to the Australian community or to a segment of that community, whether by way of being liable to become involved in activities that are disruptive to, or in violence threatening harm to, that community or segment, or in any other way." The plaintiff submits that the refusal to grant a protection visa because the applicant does not pass the character test under s 501(6)(d)(v) is a decision that "relies on" one or both of Arts 32 or 33(2) and is subject to review before the AAT. The stipulation under the Regulations465 of PIC 4002 is challenged as inconsistent with the Act in several ways. First, satisfaction of PIC 4002 involves a broader inquiry than satisfaction of the security aspect of the character test466. PIC 4002 thus erects a barrier to entry of a more extensive kind than under the Act. Secondly, PIC 4002 interposes a different decision-maker to the repository of the power under the Act, giving rise to the possibility of "disconformity of views between different arms of the Executive on the same subject matter". Thirdly, PIC 4002 does not require the Minister or the Minister's delegate to be satisfied of the content of the assessment, whereas the Minister or the Minister's delegate is required to be satisfied as a matter of substance that an applicant passes the character test. Fourthly, PIC 4002 circumvents the special process of review provided for in the Act for decisions to refuse or cancel protection visas relying on Arts 32 or 33(2). The plaintiff disavows any contention that criteria additional to those in the Act cannot be imposed by regulation under the express power conferred by ss 31(3) and 504(1). His argument is that PIC 4002 deals with a topic that is dealt with in the Act by reference to the Convention, and which he identifies as "whether the person represents a danger to the Australian community in any way". That characterisation of the subject matter of PIC 4002 and Arts 32 and 33(2) is too broad. As the first of the plaintiff's submissions on inconsistency 465 The Act, s 504(1) relevantly provides: "The Governor-General may make regulations, not inconsistent with this Act, prescribing all matters which by this Act are required or permitted to be prescribed or which are necessary or convenient to be prescribed for carrying out or giving effect to this Act". 466 Morton v United Steamship Co of New Zealand Ltd (1951) 83 CLR 402 at 412; [1951] HCA 42; R v Commissioner of Patents; Ex parte Martin (1953) 89 CLR 381 at 407 per Fullagar J; [1953] HCA 67; Shanahan v Scott (1957) 96 CLR 245 at 250 per Dixon CJ, Williams, Webb and Fullagar JJ; [1957] HCA 4. Bell recognises, PIC 4002 and Arts 32 and 33(2) in certain respects address different topics. In Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004, the joint reasons state467: "The [Migration] Act is to be read against the consistent refusal of nation states to accept, apart from any limitations imposed by treaties to which they are parties, any abridgment of their authority to determine for themselves whether or not a right of entry and of permanent settlement should be afforded to any individual or group of individuals." The obligations that Australia has assumed under the Convention and which are reflected in the Act do not require that a refugee be granted asylum468. Australia has a sovereign right to determine which persons, including which refugees, will be permitted to enter and reside within its territory. The stipulation that an applicant for a protection visa, in common with applicants for other classes of visa, is not a risk to "security" in the way that term is defined in the ASIO Act, is not on its face inconsistent with the treatment in the Act of a decision to refuse to grant a protection visa that may be characterised as "relying on" Arts 32 or 33(2). A decision to refuse to grant or to cancel a protection visa because an applicant fails to satisfy s 501(6)(d)(v) of the character test may involve consideration of matters that answer the description of "national security" or "danger to security" but it is strained to characterise such a decision as one "relying on" Arts 32 or 33(2). The Act states the test in terms which do not draw 467 (2006) 231 CLR 1 at 5 [2] per Gummow ACJ, Callinan, Heydon and Crennan JJ; [2006] HCA 53. See Minister for Immigration and Multicultural Affairs v Khawar (2002) 210 CLR 1 at 16 [44] per McHugh and Gummow JJ; [2002] HCA 14. See also NAGV (2005) 222 CLR 161 at 169-170 [16] per Gleeson CJ, McHugh, Gummow, Hayne, Callinan and Heydon JJ, citing T v Home Secretary (UK) [1996] AC 742 at 753-754 and Sale v Haitian Centers Council 509 US 155 at 179-183 468 NAGV (2005) 222 CLR 161 at 169-171 [13]-[21] per Gleeson CJ, McHugh, Gummow, Hayne, Callinan and Heydon JJ; Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225 at 274 per Gummow J; [1997] HCA 4, citing Nguyen Tuan Cuong v Director of Immigration [1997] 1 WLR 68 at 79 per Lord Goff of Chieveley and Lord Hoffmann; and Mathew, "Sovereignty and the Right to Seek Asylum: The Case of Cambodian Asylum-Seekers in Australia", (1994) 15 Australian Year Book of International Law 35 at 54-55; SZ v Minister for Immigration and Multicultural Affairs (2000) 101 FCR 342 at 346 [15], 348-349 Bell on either Article of the Convention. While there is much to be said for the view stated in the joint reasons in NAGV quoted above469, it was unnecessary for their Honours to determine whether, as the defendants here submit, the reference to Arts 32 and 33(2) in s 500(1)(c) and the linked provisions was enacted in error. An interpretation that gives no work to provisions of an Act should be avoided. Whether the power is sourced in s 501(6)(d)(v) or is to be implied from the grant of jurisdiction to review in s 500(1)(c), it is a power to refuse to grant or to cancel a protection visa relying on grounds that would support the expulsion or refoulement of a refugee under the Convention. An adverse security assessment by ASIO may be based on considerations that would not support a decision to refuse a protection visa on the ground that there is a significant risk that the person is a danger to the Australian community or a segment of it (s 501(6)(d)(v)) or more directly relying on Arts 32 or 33(2). However, there is no inconsistency in subjecting applicants for protection visas to the same barrier to entry that is applied to applicants for other classes of visa which entitle the holder to enter and reside in Australia470. The issue of an adverse security assessment requires the Minister to refuse to grant a visa in all the classes of visa for which satisfaction of PIC 4002 is a criterion471. This is not to interpose ASIO as the decision-maker. Contrary to the tenor of certain of the plaintiff's submissions, the issue of an adverse security assessment does not involve the exercise of an unexaminable power. Nor is there any disconformity arising from the circumstance that ASIO may assess a person as a risk to security and the Minister's delegate may find that the person satisfies the character test. ASIO is a specialist intelligence organisation that carries out an assessment of risk including indirect risk to security as defined in its Act472. That assessment involves a different and lesser threshold than the determination of whether there is a significant risk that a person presents a danger to the Australian community or a segment of it. Clause 866.225 of the Regulations, to the extent that it stipulates PIC 4002 as a criterion for the grant of a protection visa, is not ultra vires the power conferred by s 31(3) of the Act. 469 (2005) 222 CLR 161 at 179 [57] per Gleeson CJ, McHugh, Gummow, Hayne, 470 PIC 4002 is stipulated by the Regulations as a criterion for the grant of a large number of classes of visa. 471 The Act, s 65(1)(a)(ii). 472 ASIO Act, s 4, definition of "security", and s 17(1)(c) read with s 37(1). Bell The security assessment and the content of procedural fairness include advising Ministers and Commonwealth authorities respecting matters relating to security473. Particular provision is made under the ASIO Act for ASIO to furnish Commonwealth agencies with security assessments474. Relevantly, a security assessment is475: "a statement in writing furnished by [ASIO] to a Commonwealth agency expressing any recommendation, opinion or advice on, or otherwise referring to, the question whether it would be consistent with the requirements of security for prescribed administrative action to be taken in respect of a person or the question whether the requirements of security make it necessary or desirable for prescribed administrative action to be taken in respect of a person". The reference to "prescribed administrative action" includes "the exercise of any power, or the performance of any function, in relation to a person" under the Act or the Regulations476. On 11 December 2009, ASIO furnished DIAC with an assessment that the plaintiff was directly or indirectly a risk to security within the meaning of s 4 of the ASIO Act. Subsequently, ASIO undertook a further security assessment of the plaintiff. On 4 November 2011, the plaintiff was interviewed by ASIO officers in the presence of his lawyer. The interview was recorded and a transcript of it forms part of the materials in the Special Case. On 9 May 2012, ASIO furnished DIAC with a further adverse security assessment of the plaintiff ("the 2012 assessment"). The parties have treated the earlier assessment as superseded by the 2012 assessment. ASIO assessed the plaintiff to be directly or indirectly a risk to security taking into account the following findings based on its investigations. First, the plaintiff was a voluntary and active member of the LTTE intelligence wing from 1996 to 1999, with responsibilities including identifying Sri Lankan Army collaborators, which he was aware likely led to extrajudicial killings. He had maintained further involvement in intelligence activities on behalf of the LTTE from 1999 to 2006. Secondly, the plaintiff deliberately withheld information about his activities of security concern and provided mendacious information in 473 ASIO Act, s 17(1)(c). 474 ASIO Act, s 37(1). 475 ASIO Act, s 35(1), definition of "security assessment". 476 ASIO Act, s 35(1), par (b) of definition of "prescribed administrative action". Bell the assessment process in order to conceal those activities. Thirdly, the plaintiff remains supportive of the LTTE and its use of violence to achieve its political objectives and he will likely continue to support LTTE activities of security concern in and from Australia. The 2012 assessment was an adverse security assessment in that it contained an opinion or advice that could be prejudicial to the interests of the plaintiff477. Generally, the ASIO Act requires that an adverse security assessment be accompanied by a statement of the grounds for the assessment, setting out the information that has been relied on in making the assessment, other than information that would be contrary to the requirements of security478. The agency or authority furnished with an adverse security assessment is ordinarily required to give the subject of it notice of the fact of the assessment and a copy of the statement containing the grounds for it479. These requirements do not apply if the Attorney-General certifies that withholding notice of the making of a security assessment is essential to the security of the nation, or that disclosure of the statement of grounds, or a particular part of the statement, would be prejudicial to the interests of security, as the case may be480. The provisions governing the giving of notice of the making of the assessment and the statement of the grounds for it do not apply to adverse security assessments of non-citizens who do not hold a permanent or special purpose visa and which are issued in connection with the exercise of any power under the Act or Regulations481. ASIO is required to accord procedural fairness to non-citizens in the conduct of security assessments under the Act or Regulations. An adverse security assessment issued in terms reflecting PIC 4002 in relation to an applicant for a protection visa will lead to the refusal of the visa and the likelihood that the subject of the assessment will remain in detention for some period. This is a consideration which, as the defendants acknowledge, tends to increase the content of the obligation of procedural fairness in the conduct of the assessment. The defendants submit that there are countervailing considerations. They rely on the scheme of the ASIO Act, in particular on the exclusion of the requirement to give a statement of the grounds for an assessment to non-citizens 477 ASIO Act, s 35(1), par (a) of definition of "adverse security assessment". 478 ASIO Act, s 37(2)(a). 479 ASIO Act, s 38(1). 480 ASIO Act, s 38(2) and (4). 481 ASIO Act, s 36(b). Bell in the position of the plaintiff, notwithstanding that provision of that information may not be prejudicial to the requirements of security, and on the secrecy that is said to be essential to the collection and maintenance of intelligence concerning security matters. These factors are said to militate against any requirement that "issues" be identified to the subject of an adverse security assessment other than at a high level of generality. The statutory framework within which an administrative decision is made is of course critical to the assessment of the content of procedural fairness482. So, too, is consideration of the particular circumstances of the case483. That consideration in this case reveals that the plaintiff's challenge is without substance. This conclusion makes the Special Case an inappropriate proceeding in which to consider the extent of any curtailment of the obligation of procedural fairness in the conduct of DIAC security assessments by reason of ASIO's statute and the nature of its intelligence work. It is the plaintiff's case that, in the conduct of the 2012 assessment, procedural fairness required that ASIO's interviewing officers put the following allegations to him so that he might have the opportunity to deal with each: that the plaintiff maintained further involvement with LTTE Intelligence activities from 1999-2006; that the plaintiff remains supportive of the LTTE's use of violence to achieve political objectives; and that the plaintiff is likely to continue to support the LTTE activities of security concern in and from Australia." The plaintiff complains that in the absence of the allegations (a), (b) and (c) being put to him, the interview which resulted in the 2012 assessment was no more than a "general and unfocused invitation to make submissions". This was a reference to the statement of Gummow J in Minister for Immigration and Ethnic Affairs v Kurtovic484. In issue in that case was the failure to make known to the 482 SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 152 at 160 [26] per Gleeson CJ, Kirby, Hayne, Callinan and Heydon JJ; [2006] HCA 63. 483 Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 at 14 [38] per Gleeson CJ, 16 [48] per McHugh and Gummow JJ; [2003] HCA 6; Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 225 CLR 88 at 99 [25] per Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ; [2005] HCA 72. 484 (1990) 21 FCR 193 at 223. Bell respondent material supplied by the New South Wales prison authorities that was critical to the decision-maker's determination. It is far removed from the facts of the present case. The focus of the interview was on the circumstances in which the plaintiff joined the LTTE and the nature and extent of his activities within it. The interviewing officers made abundantly plain to the plaintiff that his claim to have been an unwilling recruit to the LTTE was in issue, as was his claim to have been dilatory in the discharge of his intelligence duties and to have ceased any role with the LTTE in 1999. The interviewing officer squarely raised with the plaintiff the charge that he had deliberately withheld information concerning his association with the LTTE. Claimed inconsistencies in the plaintiff's account of the circumstances in which he joined the LTTE and in which he left employment with a garage owned by the LTTE in 2004 were drawn to his attention and he was invited to comment on them. The plaintiff invoked Lord Diplock's statement in Mahon v Air New Zealand Ltd485, that procedural fairness required that he "not be left in the dark as to the risk of the finding being made and thus deprived of any opportunity to adduce additional material of probative value". The plaintiff cannot be said to have been "left in the dark" as to an allegation that he had maintained involvement with LTTE intelligence activities. The transcript of the interview is eloquent of the interviewing officers' scepticism of the plaintiff's account that he had been a reluctant LTTE operative. Notably absent from the plaintiff's case was any indication of what additional material he might have adduced had the interviewing officers put the allegations to him in terms. At the hearing, the plaintiff's principal complaint was directed to the failure to put allegation (c). In circumstances in which the plaintiff was insisting that he was an unwilling LTTE recruit, the defendants rightly submit that it would have been pointless to put to him that his past voluntary association made it likely that he remained supportive of the LTTE and that he would continue that support. The conclusion that the plaintiff had voluntarily joined the LTTE appears to have been based on the contents of a Refugee Referral Form supplied by the UNHCR to DIAC. In that document, the plaintiff is recorded as giving an account that he had joined the LTTE voluntarily. The delegate had raised this matter with the plaintiff in the course of her interview with him. The delegate was satisfied with the plaintiff's explanation that the statement in the form was an error. The delegate had regard to the existence of independent country information that confirmed the forcible recruitment by the LTTE of Tamils from 485 [1984] AC 808 at 821. Bell the north of Sri Lanka. ASIO came to a different conclusion. Relevantly for the plaintiff's challenge, and contrary to one of his submissions, there is no material in the Special Case that would support a conclusion that the 2012 assessment was based on material that was not disclosed to him. The plaintiff was not denied procedural fairness in the conduct of the 2012 assessment. Section 198 – removal from Australia The plaintiff contends that the removal power under s 198 is not engaged in the case of an unlawful non-citizen who is a refugee. The argument builds on the constraint on the obligation of removal respecting non-refoulement486. It draws on the structured schemes for the removal to safe third countries of persons who would otherwise be eligible to apply for protection visas487. It is suggested that the scheme in each case evinces an intention to avoid the possibility of refoulement, including indirect refoulement, of potential refugees. By contrast, the provisions of s 198 are silent as to how the officer subject to the duty of removal is to determine the claims of a refugee to have a well-founded fear of persecution on a Convention ground in the receiving country. The better view, in the plaintiff's submission, is that the removal of a refugee under the Act is only authorised as the result of a decision relying on Arts 32 or 33(2) of the Convention. The plaintiff acknowledges that his construction would result in a person in his position being entitled to reside in Australia notwithstanding that the person had not been granted a visa. It is a construction that does not sit with the objects and scheme of the Act488. The plaintiff submits that a material change to the Act since the decision in Al-Kateb is the insertion of subdiv B in Div 7 of Pt 2, which provides for the making of "residence determinations"489. The introduction of the residence determination scheme, it is argued, removes any "imperative" that an unlawful non-citizen be detained until removed, deported or granted a visa490. 486 Plaintiff M70 v Minister for Immigration and Citizenship (2011) 244 CLR 144 at 178 [54] per French CJ, 190 [91] per Gummow, Hayne, Crennan and Bell JJ; [2011] HCA 32. 487 The Act, subdivs AI and AK of Div 3 of Pt 2 and s 198(7). 488 The Act, ss 4, 13-14, 189. 489 Inserted by the Migration Amendment (Detention Arrangements) Act 2005 (Cth). 490 Al-Kateb (2004) 219 CLR 562 at 576 [17] per Gleeson CJ, 638 [226] per Hayne J. Bell Subdivision B in Div 7 of Pt 2 confers power on the Minister to determine that one or more persons are to reside at a specified place instead of being detained at a place covered by the definition of "immigration detention" in s 5(1)491. The Minister is not subject to a duty to consider whether to exercise the power to make a residence determination492. The Minister may at any time vary or revoke a residence determination493. A person residing at a specified place subject to a residence determination is deemed to be in immigration detention. Section 197AC(4) provides that if a residence determination is in force in relation to a person and a provision of the Act requires the person to be released from immigration detention, or no longer requires or permits the person to be detained, "the residence determination ... is revoked ... and the person is, by that revocation, released from immigration detention". The plaintiff is an unlawful non-citizen whose circumstances bring him within the provisions of ss 198(2) and 198(6). He has made an application for a protection visa which has been finally determined. The Act does not preclude his removal from Australia to a country in which he does not have a well-founded fear of persecution. At a practical level, it is to be expected that an officer effecting the removal of the plaintiff would act on the advice of officers within DIAC, who are equipped to assess whether removal would be consistent with Australia's international obligations. In the event that an officer purported to remove the plaintiff from Australia to a country in which the plaintiff is at risk of persecution, the determination to do so would be subject to judicial review. Before turning to the authority for the plaintiff's continued detention, reference should be made to his submission that his removal from Australia to any third country would place Australia in breach of the obligations that it owes to Contracting States under the Convention unless the conditions of Art 32 were met. Contrary to the plaintiff's submission, he is not a person to whom Art 32 applies. His submission that he is "lawfully in" Australia is advanced in the face of a deal of authority to the contrary. The plaintiff's argument accepts that "lawfully" as it appears in Art 32 "fundamentally refers to domestic law", but goes on to contend that "lawfully" has "an autonomous, international meaning". In the plaintiff's submission, treating "lawfully" in Art 32 as coterminous with domestic laws risks "unreasonable outcomes". He instances the outcome in R (ST) v Home Secretary494 in this respect. In that case, the claimant, an Eritrean 491 The Act, s 197AB. 492 The Act, s 197AE. 493 The Act, s 197AD. 494 [2012] 2 WLR 735; [2012] 3 All ER 1037. Bell refugee, had been present in the United Kingdom under temporary permissions for 13 and a half years while her application for asylum was determined and her rights of appeal and review were pursued. The Supreme Court held that she was not lawfully within the United Kingdom for the purposes of Art 32. The plaintiff invites the Court not to adopt the reasoning in R (ST) v Home Secretary. His argument depends upon a more generous construction of the obligation under Art 32 in Professor Hathaway's commentary495 and to a lesser degree in Professor Davy's work496. Professor Hathaway's analysis is discussed in R (ST) v Home Secretary, and the absence of consensus among the commentators on the point is noted497. Lord Hope of Craighead considered that Art 32 contemplates that the refugee "is not merely present in the territory of the contracting state, but that he is there lawfully."498 The implication from the use of the word "lawfully" being that the refugee's presence in the territory of the Contracting State is "not just being tolerated"499. His Lordship considered that the use of the same phrase in Arts 18 and 26, which deal with self-employment and freedom of movement respectively, supports construing Art 32 as requiring presence to be lawful according to the domestic law of the Contracting State. In this connection, his Lordship said500: "It seems unlikely that the contracting states would have agreed to grant to refugees the freedom to choose their place of residence and to move freely within their territory before they themselves had decided, according to 495 Hathaway, The Rights of Refugees Under International Law, (2005) at 175-179. 496 Davy, "Article 32: Expulsion", in Zimmermann (ed), The 1951 Convention Relating to the Status of Refugees and its 1967 Protocol: A Commentary (2011) 497 [2012] 2 WLR 735 at 748-749 [34]; [2012] 3 All ER 1037 at 1052-1053. See Goodwin-Gill and McAdam, The Refugee in International Law, 3rd ed (2007) at 524-525 and Davy, "Article 32: Expulsion", in Zimmermann (ed), The 1951 Convention Relating to the Status of Refugees and its 1967 Protocol: A Commentary (2011) 1277 at 1299, 1304. 498 R (ST) v Home Secretary [2012] 2 WLR 735 at 747 [32]; [2012] 3 All ER 1037 at 499 R (ST) v Home Secretary [2012] 2 WLR 735 at 747 [32]; [2012] 3 All ER 1037 at 500 R (ST) v Home Secretary [2012] 2 WLR 735 at 750 [37]; [2012] 3 All ER 1037 at Bell their own domestic laws, whether or not to admit them to the territory in the first place." Their Lordships' analysis in R (ST) v Home Secretary501 is consistent with the decision of the House of Lords in R v Home Secretary; Ex parte Bugdaycay502. It accords with the decisions of courts in the United States503. It is consistent with the apparent approval in NAGV of Professor Shearer's analysis of the distinctly different character of Arts 32 and 33(2), the former assuming the "prior admission of the refugee to a status of lawful residence"504. It accords with Stephen J's analysis in Simsek v Macphee505 and the decision of the Full Federal Court in Rajendran v Minister for Immigration and Multicultural Affairs506. The analysis in R (ST) v Home Secretary should be accepted. The obligation which Contracting States undertake by Art 32 is with respect to refugees whose presence in their territory is lawful under domestic law. A non-citizen is lawfully present in Australia if he or she holds a visa that is in effect507. A non-citizen who does not hold a visa that is in effect is an unlawful non-citizen508. The plaintiff is not "lawfully in" Australia within the meaning of Art 32. Australia would not be in breach of the obligations that it owes to Contracting States by removing the plaintiff to a country in which he is not at risk of persecution. The lawfulness of the plaintiff's continued detention The challenge to the lawfulness of the plaintiff's detention centres on the construction of ss 189, 196(1)(a) and 198. These provisions are in Pt 2 of the 501 R (ST) v Home Secretary [2012] 2 WLR 735; [2012] 3 All ER 1037. 503 Chim Ming v Marks 505 F 2d 1170 at 1172 (1974); Kan Kam Lin v Rinaldi 361 F Supp 177 at 185-186 (1973). 504 NAGV (2005) 222 CLR 161 at 171 [21] per Gleeson CJ, McHugh, Gummow, Hayne, Callinan and Heydon JJ, citing Shearer, "Extradition and Asylum", in Ryan (ed), International Law in Australia, 2nd ed (1984) 179 at 205. 505 (1982) 148 CLR 636 at 644-645 per Stephen J; [1982] HCA 7. 506 (1998) 86 FCR 526 at 530-531. 507 The Act, s 13(1). 508 The Act, ss 13 and 14. Bell Act, which deals with "Control of arrival and presence of non-citizens". Sections 189 and 196 are in Div 7 of Pt 2, which deals with the "Detention of unlawful non-citizens". Section 198 is in Div 8 of Pt 2, which deals with "Removal of unlawful non-citizens". Subsections 198(2) and (6) each require that an officer509 remove an unlawful non-citizen from Australia as soon as reasonably practicable in the circumstances stated. The plaintiff's circumstances fall within each provision and it follows that he is subject to the obligation of removal. The authority relied upon for his detention pending that removal is s 196(1), which provides that an unlawful non-citizen detained under s 189 must be kept in immigration detention until he or she is removed from Australia under ss 198 or 199510, deported under s 200, or granted a visa. In Al-Kateb, the provisions of ss 189(1), 196(1) and 198(2) were found to authorise and require the detention of an unlawful non-citizen notwithstanding that removal from Australia was not reasonably practicable in the foreseeable future511. The plaintiff accepts that if an affirmative answer is given to the second question in the Special Case, his circumstances are governed by the decision in Al-Kateb. The plaintiff contends that Al-Kateb was wrongly decided and should not be followed. The obligation to remove Mr Al-Kateb arose under s 198(1), as Mr Al-Kateb had requested that he be removed from Australia. The difficulty was that Mr Al-Kateb did not have a right of entry to any country and no country was willing to receive him. The plaintiff's circumstances are relevantly similar to those of Mr Al-Kateb in that the only country to which the plaintiff has a right of entry is the country in which he risks persecution and no other country is willing to receive him. A preliminary question is whether, as the defendants submit, the factual basis for any reconsideration of the issue that divided the Court in Al-Kateb is not presented by the Special Case. The following facts are agreed in the Special Case. The defendants do not propose or intend to remove the plaintiff to Sri Lanka and at present there is no other country to which the plaintiff can be sent. The Secretary of DIAC and the 509 "Officer" is defined in s 5(1) of the Act as any person included in the class of persons authorised in writing by the Minister to be officers for the purposes of the Act. 510 Section 199 is concerned with the removal upon request of the spouse and dependent children of an unlawful non-citizen who is about to be removed. 511 (2004) 219 CLR 562 at 595 [74] per McHugh J, 640 [232] per Hayne J, 658-659 [290], 661 [298] per Callinan J, 662-663 [303] per Heydon J. Bell Minister have taken steps to locate a country that would be willing to receive the plaintiff. On 10 February 2010, DIAC sought the UNHCR's assistance in connection with the resettlement of seven refugees, including the plaintiff. The UNHCR declined to provide the assistance sought on the ground that it was contrary to its policy to refer refugees for resettlement to a third country in circumstances in which the refugees had been brought to Australia by the Australian government. Moreover, the cases were unlikely to meet any of the referral criteria in the UNHCR's Resettlement Handbook. In May 2010, the Foreign Minister approached the governments of three countries requesting resettlement assistance in relation to persons, including the plaintiff. One country indicated it could not assist and the other two countries said that the request would be considered. In March 2011, the Department of Foreign Affairs and Trade advised that positive responses would not be forthcoming from either of those two countries. DIAC made inquiries to ascertain if the plaintiff has any relatives living in third countries. He does not. An annual consultation dealing with questions of the resettlement of persons is held in Geneva ("the ATCR"). At the July 2011 ATCR, the Assistant Secretary, Humanitarian Branch of DIAC ("the Assistant Secretary"), held discussions with the representatives of three further countries concerning the resettlement of persons, a majority of whom were refugees under Australian law Following those and who had received adverse security assessments. discussions, the Assistant Secretary wrote to the representatives of eight countries asking that their respective governments consider the resettlement of persons, a majority of whom were refugees under Australian law and who were subject to adverse security assessments. The Assistant Secretary conveyed Australia's willingness to make the substance of the adverse security assessments available to the security agencies of the receiving countries. On 7 June 2012, when the amended Special Case was settled, four countries had declined the request and responses had not been received from the remaining four. As at 7 June 2012, it was the Assistant Secretary's intention to raise the resettlement of persons in the position of the plaintiff with the representatives of additional countries at the July 2012 ATCR. The Special Case should be determined upon the understanding that no country from which a response was awaited at 7 June 2012 has to-date agreed to receive the plaintiff. Conscientious endeavours to find a third country that is willing to receive the plaintiff have been pursued by DIAC for not less than two years and eight months to no avail. It is open to the Court to draw from the facts stated and the documents identified in the Special Case any inference of fact Bell which might have been drawn from them if proved at trial512. The inference to be drawn from the facts of the Special Case is that removal of the plaintiff from Australia is not likely to be practicable in the foreseeable future. The defendants submit that leave should not be given to re-open the correctness of the decision in Al-Kateb. They submit that the power to disturb settled authority is to be exercised with restraint513 and they make the following submissions by reference to the considerations identified in John v Federal Commissioner of Taxation514. First, the construction of ss 189, 196 and 198 had been ventilated and analysed in a series of decisions in the Federal Court culminating in the decision of the Full Court in Minister for Immigration and Multicultural and Indigenous Affairs v Al-Masri515, prior to the decision in Al-Kateb. Secondly, there was no material difference in the reasoning of the Justices constituting the majority. Thirdly, no inconvenience had been occasioned by the decision. Fourthly, the Act has been administered on the basis of the decision since 2004. Differing interpretations of the detention power under s 196(1)(a) had been adopted by judges at first instance in the Federal Court. Those differing approaches were ventilated and analysed in Al-Masri. The Full Court of the Federal Court concluded that the power to detain under s 196(1)(a) was subject to implied limitation in circumstances in which there is no real likelihood of removal in the reasonably foreseeable future. This Court, by a slim majority, rejected that interpretation in Al-Kateb. It is therefore not correct for the purposes of the first of the John considerations to characterise Al-Kateb as a decision "rest[ing] upon a principle carefully worked out in a significant succession of cases."516 Neither are the third or fourth John considerations apt to the circumstances of this case. To say that the decision has not produced inconvenience is glib. To observe that the decision has been acted upon is not to 512 High Court Rules 2004 (Cth), r 27.08.5. 513 Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49 at 71 [55] per Gleeson CJ, Gaudron and Gummow JJ; [1999] HCA 67. 514 (1989) 166 CLR 417 at 438-439 per Mason CJ, Wilson, Dawson, Toohey and Gaudron JJ; [1989] HCA 5. 515 (2003) 126 FCR 54. 516 John v Federal Commissioner of Taxation (1989) 166 CLR 417 at 438 per Mason CJ, Wilson, Dawson, Toohey and Gaudron JJ. Bell identify reconsideration517. some aspect of those circumstances that militates against Al-Kateb is a recent decision on a question of statutory interpretation. The composition of the Court has changed since it was decided and it is necessary to be mindful of Gibbs J's statement in the Queensland v The Commonwealth (the "Second Territory Senators Case") that a Justice is not entitled to ignore the decisions and reasoning of the Court "as though the authority of a decision did not survive beyond the rising of the Court"518. Barwick CJ in that case favoured a less emphatic approach, but these were observations made in the context of a constitutional case in which the doctrine of stare decisis may be less rigidly applied519. In Wurridjal v The Commonwealth, French CJ considered that the evaluation of the factors for and against re-opening previous decisions should be "informed by a strongly conservative cautionary principle"520. His Honour's remarks were not in this respect confined to cases concerning the interpretation of the Constitution. The plaintiff's primary challenge to the reasoning of the majority in Al-Kateb is upon the application of the principle of legality. That longstanding principle of interpretation521 was explained by Gleeson CJ, in dissent, in Al-Kateb in this way522: "Where what is involved is the interpretation of legislation said to confer upon the Executive a power of administrative detention that is 517 John v Federal Commissioner of Taxation (1989) 166 CLR 417 at 438-439 per Mason CJ, Wilson, Dawson, Toohey and Gaudron JJ. 518 (1977) 139 CLR 585 at 599; [1977] HCA 60. 519 (1977) 139 CLR 585 at 593. 520 Wurridjal v The Commonwealth (2009) 237 CLR 309 at 352 [70]; [2009] HCA 2. 521 See Potter v Minahan (1908) 7 CLR 277 at 304 per O'Connor J; [1908] HCA 63; Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476 at 492 [30] per Gleeson CJ; [2003] HCA 2; Lacey v Attorney-General (Qld) (2011) 242 CLR 573 at 582 [17], 583 [20] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ; [2011] HCA 10; R v Home Secretary; Ex parte Simms [2000] 2 AC 115 at 131 per Lord Hoffmann. See also J Spigelman, "Principle of legality and the clear statement principle", (2005) 79 Australian Law Journal 769; and Lord Steyn, "The Intractable Problem of The Interpretation of Legal Texts", (2003) 25 Sydney Law Review 5 at 17-19. 522 Al-Kateb (2004) 219 CLR 562 at 577 [19]. Bell indefinite in duration, and that may be permanent, there comes into play a principle of legality, which governs both Parliament and the courts. In exercising their judicial function, courts seek to give effect to the will of Parliament by declaring the meaning of what Parliament has enacted. Courts do not impute to the legislature an intention to abrogate or curtail certain human rights or freedoms (of which personal liberty is the most basic) unless such an intention is clearly manifested by unambiguous language, which indicates that the legislature has directed its attention to the rights or freedoms in question, and has consciously decided upon abrogation or curtailment." The statement of the principle in Coco v The Queen523 is set out in Gummow J's reasons. In Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission, in their joint reasons, Gleeson CJ, Gaudron, Gummow and Hayne JJ stated that the principle had been "strictly applied" by this Court since Re Bolton; Ex parte Beane524. Their Honours suggested that this statement was subject to one possible exception. This was a reference to Corporate Affairs Commission (NSW) v Yuill525, a case concerned with the abrogation of legal professional privilege under the Companies (New South Wales) Code. The statutory scheme here under consideration is one said to admit of mandatory administrative detention for an indefinite period that may extend to the balance of the detainee's life. Putting to one side the constitutional validity of such a scheme, the application of the principle of legality requires that the legislature make plain that it has addressed that consequence and that it is the intended consequence. In Al-Kateb, Gleeson CJ observed that the Act makes no express provision for the suspension and possible revival of the obligation imposed by s 196 by reference to the practicability of effecting removal under s 198. Nor does the Act make express provision for indefinite, or permanent, detention where the assumption of the reasonable practicability of removal is falsified526. Applying 523 (1994) 179 CLR 427 at 437; [1994] HCA 15. 524 Daniels Corporation International Pty Limited v Australian Competition and Consumer Commission (2002) 213 CLR 543 at 553 [11]; [2002] HCA 49, citing Re Bolton; Ex parte Beane (1987) 162 CLR 514; [1987] HCA 12; Bropho v Western Australia (1990) 171 CLR 1; [1990] HCA 24; Coco v The Queen (1994) 179 CLR 427; and Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501; [1997] HCA 3. 525 Daniels Corporation International Pty Limited v Australian Competition and Consumer Commission (2002) 213 CLR 543 at 553 [11], citing Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319; [1991] HCA 28. 526 Al-Kateb (2004) 219 CLR 562 at 576 [18]. Bell the principle of legality, his Honour held that indefinite, perhaps permanent, administrative detention was not to be dealt with by implication527. Gummow J identified temporal elements in the language of ss 196(1) and 198. His Honour considered that "practicable" connotes that which can be put into practice and which can be effected or accomplished. The qualification "reasonably" introduces an assessment or judgment of a period suitable to the purpose of the legislative scheme, that purpose being to facilitate the person's removal from Australia but not with such delay as to have the appearance of detention for an unlimited time528. In Koon Wing Lau v Calwell529, provisions of the War-time Refugees Removal Act 1949 (Cth)530 which, if read literally, permitted a deportee to be held in custody for the balance of his or her life, were interpreted as subject to temporal limitation. Dixon J considered that, read together, the provisions authorised custody for the purposes of fulfilling the obligation to deport. In the event that the deportee was not placed on board a vessel "within a reasonable time", the deportee "would be entitled to his discharge on habeas"531. The majority in Al-Kateb considered that the words "as soon as reasonably practicable" were "too clear" or "intractable" to admit of an implied temporal limit or qualification. It must be accepted that minds may reasonably differ on matters of statutory construction. However, in my view, the reasoning of two 527 Al-Kateb (2004) 219 CLR 562 at 577-578 [21]. 528 Al-Kateb (2004) 219 CLR 562 at 608 [121]. 529 (1949) 80 CLR 533; [1949] HCA 65. 530 The War-time Refugees Removal Act 1949 (Cth) provided in s 5 that: "The Minister may, at any time within twelve months after the commencement of this Act, make an order for the deportation of a person to whom this Act applies and that person shall be deported in accordance with this Act." Section 7(1) provided that: "A deportee may - (a) pending his deportation and until he is placed on board a vessel for deportation from Australia; (b) on board the vessel until its departure from its last port of call in Australia; and (c) at any port in Australia at which the vessel calls after he has been placed on board, be kept in such custody as the Minister or an officer directs." 531 Koon Wing Lau v Calwell (1949) 80 CLR 533 at 581. Bell members of the majority is weakened by the absence of discussion of the principle of legality in the context of a conclusion that the scheme abrogates fundamental rights in this degree. Those fundamental rights are not confined to Australian citizens.532 As Heydon J observes, the question of whether leave is required to overrule this Court's previous decisions may be an open one533. It is sufficient to say that if leave is required, I would grant it. In my opinion, the decision in Al-Kateb should not be followed. I would adopt Gleeson CJ's construction of the scheme of ss 189, 196(1) and 198. This conclusion makes it unnecessary, and for that reason inappropriate, to deal with the submissions as to the constitutional validity of a scheme providing for mandatory administrative detention for an indefinite period534. Important to Gleeson CJ's analysis is that while removal from Australia remains impractical the obligation imposed by s 196 is suspended but not displaced. A detainee in such a circumstance is able to obtain an order in the nature of habeas corpus to secure release. I agree with his Honour that there is nothing antithetical to the nature of habeas corpus for the order to be made upon terms which relate to the applicant's circumstances and "reflect temporal or other qualifications" upon the right to release535. One matter to which Gleeson CJ adverted in Al-Kateb concerned the power of a court to impose conditions or restraints in the case of a person shown to be a danger to the community or likely to abscond536. The question was not presented by the facts in Al-Kateb. It is not 532 Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 19 per Brennan, Deane and Dawson JJ; [1992] HCA 64; Abebe v The Commonwealth (1999) 197 CLR 510 at 560 [137] per Gummow and Hayne JJ; [1999] HCA 14. 533 See Evda Nominees Pty Ltd v Victoria (1984) 154 CLR 311 at 313, 316; [1984] HCA 18; British American Tobacco Australia v Western Australia (2003) 217 CLR 30 at 63 [74]; [2003] HCA 47. See also Northern Territory v Mengel (1995) 185 CLR 307 at 338; [1995] HCA 65; Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 554; [1997] HCA 25; Re The Governor, Goulburn Correctional Centre; Ex parte Eastman (1999) 200 CLR 322 at 369-370; [1999] HCA 44. 534 Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1. 535 Al-Kateb (2004) 219 CLR 562 at 579-580 [27]. See also Zaoui v Attorney-General [2005] 1 NZLR 577. 536 Al-Kateb (2004) 219 CLR 562 at 580 [29]. Bell apparent that such a question is presented by the facts of this Special Case. The plaintiff entered Australia as the holder of a temporary visa. The evident purpose of the issue of the visa was to permit the plaintiff to enter Australia and to make a valid application for a protection visa. As has been remarked, the delegate did not find that the plaintiff is a person to whom Art 1F of the Convention applies. The Special Case has been conducted upon acceptance that the plaintiff is not a person about whom there are reasonable grounds for regarding as a danger to the security of Australia. Nor is he a person who having been convicted of a particularly serious crime constitutes a danger to the Australian community. Consideration of the terms and conditions of the plaintiff's release, as Gummow J observes, would be for the Justice disposing of the proceeding in this Court or upon remitter to another court. The answers to the questions asked in the amended Special Case should be as stated by Gummow J.

HIGH COURT OF AUSTRALIA APPELLANT AND THE STATE OF WESTERN AUSTRALIA RESPONDENT Smith v Western Australia [2014] HCA 3 12 February 2014 ORDER Appeal allowed. Set aside the orders of the Court of Appeal of the Supreme Court of Western Australia made on 17 January 2013. Remit the appellant's appeal and application to the Court of Appeal to be heard and determined in accordance with the reasons of this Court. On appeal from the Supreme Court of Western Australia Representation C P Shanahan SC with A L Troy for the appellant (instructed by Legal Aid J McGrath SC with L M Fox for the respondent (instructed by Director of Public Prosecutions (WA)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Smith v Western Australia Criminal law – Evidence – Exclusionary rule – Where appellant convicted upon verdict of jury – Where note suggesting juror physically coerced into changing verdict found in jury room after jury discharged – Whether evidence of unlawful coercion of juror by fellow juror admissible – Whether Sheriff should be ordered to conduct inquiry. Words and phrases – "exclusionary rule", "free and frank deliberation", "physical coercion". Criminal Appeals Act 2004 (WA), s 30(3)(c). Criminal Code (WA), s 123. Juries Act 1957 (WA), ss 56A, 56B. FRENCH CJ, CRENNAN, KIEFEL, GAGELER AND KEANE JJ. It is a general rule of the administration of criminal justice under the common law that once a trial has been determined by an acquittal or conviction upon the verdict of a jury, and the jury discharged, evidence of a juror or jurors as to the deliberations of the jury is not admissible to impugn the verdict1. The question which arises in this case is whether that rule precludes a court of appeal from receiving and acting upon evidence from a juror that he or she was subject to physical coercion by another juror in relation to his or her verdict. The proceedings The appellant was convicted in the District Court of Western Australia (Curthoys DCJ) upon the verdict of a jury of two counts of indecently dealing with a child under the age of 13 years. The jury's verdict was delivered on 17 January 2012. Verdicts of guilty on each count were announced by the foreman of the jury in the presence and hearing of the other members of the jury. After the verdict on each count was announced, the jury was asked, in accordance with the usual practice, whether the verdict was the verdict of them all, to which the foreman replied in the affirmative. The trial judge recorded verdicts of guilty on each charge and the jury was discharged. On 18 January 2012, the matter came before the trial judge again to deal with a question in relation to bail pending sentence. On that occasion, the trial judge informed counsel that a note in an envelope addressed to the judge had been found on the table in the jury room after the jury had been discharged. The note, which did not identify its author, was in the following terms: "I have been physically coerced by a fellow juror to change my plea to be aligned with the majority vote. This has made my ability to perform my duty as a juror on this panel [sic]." 1 Nanan v The State [1986] AC 860 at 872; R v Mirza [2004] 1 AC 1118; Re Matthews and Ford [1973] VR 199 at 209; Minarowska (1995) 83 A Crim R 78 at 84-85; Medici (1995) 79 A Crim R 582 at 591-592; Millward [1999] 1 Cr App R Crennan The trial judge stated that, because the verdict had already been entered, there was nothing he could do about it. The trial judge remarked that his curiosity had been aroused when the verdict was delivered. He said: "One of the jurors, it was probably obvious to you who it was, was somewhat upset afterwards". His Honour was of the view that the juror who was upset may have been the one who left the note2. His Honour also remarked to counsel that the foreman "was a little slow" to confirm that the verdict was the verdict of all jurors. Further, Curthoys DCJ observed that the jury's departure was "unusually noisy". On 2 March 2012, the appellant was sentenced to a period of imprisonment of 12 months for each of the two counts, to be served concurrently. The decision of the Court of Appeal The appeal The appellant appealed against his conviction on the ground that the "trial miscarried due to a juror being physically coerced into changing his verdict to one of guilty." This ground of appeal engaged s 30(3)(c) of the Criminal Appeals Act 2004 (WA), which requires the Court of Appeal to allow the appeal if, in its opinion, "there was a miscarriage of justice." The Court of Appeal (Martin CJ, McLure P and Mazza JA) unanimously dismissed the appeal. Martin CJ (with whom Mazza JA agreedP3) began4 with the formulation of the exclusionary rule by Atkin LJ in Ellis v Deheer5: "[T]he Court does not admit evidence of a juryman as to what took place in the jury room, either by way of explanation of the grounds upon which the verdict was given, or by way of statement as to what he believed its effect to be." 2 His Honour referred to this juror as a male person. 3 Smith v The State of Western Australia [2013] WASCA 7 at [54]. [2013] WASCA 7 at [10]. [1922] 2 KB 113 at 121. Crennan Martin CJ observed6 that "the rationale behind the rule has been expressed as the need to protect the finality of decisions and to protect jurors from coercion or pressure in the jury room." Martin CJ accepted that the exclusionary rule may not apply in relation to evidence disclosing extrinsic influences upon jury deliberations7, but cautioned that the line between that which is extrinsic and that which is intrinsic is not easily drawn8. Martin CJ was sceptical of the probative value of the note as evidence of misconduct on the part of a juror. His Honour said that the content of the note and the evidence of its discovery were "so replete with uncertainty and ambiguity that any conclusions of fact drawn from it must necessarily be speculative"9; "[i]t is not known who wrote the note … [or] whether it was written before or after the verdict was delivered"10. His Honour also raised the possibility that "the author of the note was referring to a form of pressure or intimidation" less serious or sinister than might be thought to be suggested by the note, observing that it is common for jurors to experience inter-personal pressure in the course of their deliberations, and the possibility that some jurors might be disposed to describe that pressure as coercion11. Martin CJ concluded that "[f]or these various reasons, it is impossible for the note to sustain a conclusion of fact to the effect that the processes of the jury were so irregular as to give rise to a miscarriage of justice"12. Martin CJ had earlier said that "to the extent that the note is capable of sustaining any [2013] WASCA 7 at [10]. [2013] WASCA 7 at [16]. [2013] WASCA 7 at [20]. [2013] WASCA 7 at [34]. 10 [2013] WASCA 7 at [35]. 11 [2013] WASCA 7 at [37]. 12 [2013] WASCA 7 at [39]. Crennan conclusion to the effect that the deliberations of a juror were subjected to improper interference, the note falls squarely within the exclusionary rule."13 McLure P agreed14 with the reasons of the Chief Justice, save that her Honour favoured a broader view of the rationale for the exclusionary rule which included the promotion of free and frank deliberation among jurors, the protection of jurors from harassment and the invasion of their privacy, and the maintenance of public confidence in the jury system15. The application for an inquiry Before the hearing by the Court of Appeal, the appellant had also filed an application for an order that a copy of the juror's note be provided to the parties and to the Court on a provisional basis with the admissibility of the note to be determined at the hearing of the appeal. The application also sought an order that the Sheriff should make inquiries of, and take an affidavit or statement from, the juror who wrote the note – assuming that the identity of that juror could be established – and for that evidence to be provided to the Court of Appeal. The Court of Appeal dismissed this application16. In dismissing the application, Martin CJ again noted "the speculative nature of any inferences of fact drawn from the note and the circumstances of its discovery"17. His Honour said that: "the note provides an entirely insecure foundation for the authorisation of what would necessarily be wide-ranging and intrusive inquiries into the deliberations of the jury, which would involve the interrogation of all twelve members of the jury well after delivery of their verdict and perhaps their cross-examination." 13 [2013] WASCA 7 at [38]. 14 [2013] WASCA 7 at [50]-[53]. 15 Shrivastava v The State of Western Australia [No 2] [2011] WASCA 8 at [63]. 16 [2013] WASCA 7 at [48]-[49]. 17 [2013] WASCA 7 at [48]. Crennan In this passage, one may note that his Honour's scepticism as to the evidentiary value of the note and his view of the scope of the exclusionary rule are mutually reinforcing rather than separate and distinct grounds for dismissing the application. The parties' submissions The appellant submitted that the Court of Appeal erred in failing to appreciate that the exclusionary rule does not operate to preserve the secrecy of criminal conduct, even if it occurs in the jury room. Section 123 of the Criminal Code (WA) ("the Code") provides: "Any person who – (1) Attempts by threats or intimidation of any kind … to influence any person, whether a particular person or not, in his conduct as a juror in any judicial proceeding, whether he has been sworn as a juror or not; or Threatens to do any injury … to any person on account of anything done by him as a juror in any judicial proceeding; … is guilty of a crime, and is liable to imprisonment for 5 years." The appellant argued that this limit on the scope of the exclusionary rule is reflected in the provisions of the Juries Act 1957 (WA) ("the Juries Act")18. Section 56B of the Juries Act relevantly provides: "(1) A person who discloses protected information commits an offence if the person is aware that, in consequence of the disclosure, the information will, or is likely to, be published. Subsection (1) does not prohibit disclosing protected information – 18 cf Minarowska (1995) 83 A Crim R 78 at 86. Crennan to a prosecuting officer or a police officer for the purpose of an investigation concerning an ... alleged offence relating to jury deliberations or a juror's identity". Section 56A(1) of the Juries Act provides that "protected information" includes "statements made, opinions expressed, arguments advanced or votes cast by members of a jury in the course of their deliberations". The respondent argued in support of the reasoning of Martin CJ, noting that s 123 of the Code makes no reference to "coercion" as distinct from "intimidation", and urging that a juror who is a party to robust deliberations may subjectively, but mistakenly, perceive that he or she has been subjected to coercion. The respondent accepted that, if there was evidence of physical violence between jurors (described with sufficient particularity), then that violence may be regarded as an extrinsic event outside the scope of the exclusionary rule. In this case, however, the note was not sufficient evidence of such an event. The respondent emphasised the importance of the value of finality in the administration of justice, submitting that, although the trial judge observed some unusual behaviour by the jury during and immediately after the delivery of the verdict, there was no evidence of actual dissent by any of the jurors when the verdict was taken. The respondent also supported the view of Martin CJ that there are substantial practical impediments to an inquiry, arguing that, by the time the note was discovered, the jury had been discharged; and secondly, that the note provided an insecure foundation for the instigation of an intrusive inquiry into the jury's deliberations. The limits of the exclusionary rule The exclusionary rule does not deny the admissibility of evidence "extrinsic" to the jury's deliberations. What is "extrinsic" for this purpose is somewhat unsettled in that the description has been used to refer, both to a source of evidence other than the jurors themselves, and to events extraneous to the deliberative process. Evidence of irregularity has been said to be admissible where the evidence comes from a source other than the members of the jury19. 19 Vaise v Delaval (1785) 1 TR 11 [99 ER 944]. Crennan Evidence has also been said to be extrinsic where it concerns events which occurred outside the jury room or the jury box20. In this latter regard, in R v Mirza21, Lord Hobhouse of Woodborough noted that statements in the cases which refer to the confidentiality of the "jury box" were coloured by the experience that the jury was traditionally enclosed and segregated so that it was natural to regard the deliberations of the jurors as contained within the jury room. What is "extrinsic", and therefore outside the exclusionary rule, is not a question which can always be answered by a mechanical application of rules about the source of evidence or the location of an event. In R v Young22, for example, the Court of Appeal of England and Wales admitted evidence from a juror as to irresponsible behaviour in relation to the consideration of the guilt of the accused (the use of a ouija board to consult the deceased alleged victim of the accused) which occurred in the jurors' overnight accommodation. As Martin CJ rightly appreciated23, to seek an understanding of the limits of the exclusionary rule in an understanding of its rationale, rather than to focus upon the place where an irregular incident occurred (which may be quite fortuitous), or upon the fact that the source of evidence of the incident is a juror, given that in cases of the most egregious misconduct the only source of the evidence will often be the jurors themselves. is preferable As to the rationale for the exclusionary rule, in Minarowska, Gleeson CJ said24: "[T]he underlying policy [of the exclusionary rule] aims to preserve the secrecy of jury deliberations, and to maintain the integrity and finality of a formally expressed verdict". This description of the purpose of the exclusionary rule is consistent with that to be gleaned from the modern cases in Australia, Canada and the United 20 Phipson on Evidence, 15th ed (2000) at [24-32]. 21 [2004] 1 AC 1118 at 1173. 23 [2013] WASCA 7 at [10]. 24 (1995) 83 A Crim R 78 at 87. Crennan Kingdom25. There is some variety in the way the rationale for the rule is expressed in the cases, but it is sufficient for the purposes of the discussion which follows to proceed on the basis that the rationale for the rule lies in the preservation of the secrecy of a jury's deliberations to ensure that those deliberations are free and frank so that its verdict is a true one and to ensure the finality of that verdict. It is convenient now to consider how the rationale for the exclusionary rule informs the limits of its operation in the circumstances of the present case. Free and frank deliberations In R v Mirza26, Lord Slynn of Hadley, a member of the majority of their Lordships who upheld the application of the exclusionary rule in that case (which concerned allegations by one juror of racial prejudice on the part of the others), accepted that "[i]t is of particular importance, as the courts have accepted, that evidence of bribery or influence outside the trial procedure may be admitted in the Court of Appeal so as to justify that court interfering with the jury's decision." It is difficult to see why his Lordship's observation should not apply with equal force to the case of a bribe offered to a juror by a fellow juror in the course of the trial. Unlawful influence upon a juror is no less inconsistent with free and frank deliberation by that juror, and the integrity of his or her verdict, because it emanates from another juror. Similarly, free and frank deliberation by jurors would not be encouraged or protected by applying the exclusionary rule to a case where the very conduct which a juror seeks to bring to the attention of the court is unlawful harassment by a fellow juror calculated to prevent the conscientious discharge of the juror's duty. 25 Re Matthews and Ford [1973] VR 199 at 209-211; Medici (1995) 79 A Crim R 582 at 591-593; Nanan v The State [1986] AC 860 at 871; R v Pan [2001] 2 SCR 344 at 373-375 [49]-[53]; R v Mirza [2004] 1 AC 1118 at 1133-1134 [13], 1144 [47], 26 [2004] 1 AC 1118 at 1145 [51]. Crennan Indeed, to insist on the application of the exclusionary rule in such a case would tend to defeat, rather than to advance, the purpose of the rule. In R v Myles27, Pincus JA said: "If one of the jurors were credibly alleged to have conveyed to the others, in the jury room, threats of physical retaliation if they acquitted an accused, it is inconceivable that that could not be gone into by way of inquiry. It seems evident, also, that if the inquiry disclosed that the verdict had been arrived at as a result of such intimidation the Court would have the right to upset it." Unlawful physical coercion exerted by one juror upon another cannot properly be regarded as a part of the course of free and frank deliberation by the jury. It does not unduly strain language to characterise the intimidatory influence of a rogue juror as extrinsic to the deliberations of the jury, because such misconduct is calculated to prevent free deliberation by the jury. In addition, jurors cannot sensibly be said to have an expectation that they may, with impunity, commit a crime in the jury room, secure in the knowledge that the authorities will turn a deaf ear to any complaint. In this regard, it is telling, and hardly surprising, that there is no case in which the exclusionary rule has been applied to prevent the reception by a court of evidence of a criminal offence committed by a juror against a fellow juror. It is instructive to reflect that the considerations which favour the preservation of confidentiality of communications by legal professional privilege do not prevent the giving of evidence of the commission of an offence by a legal professional against his or her client. Relevantly, Gleeson CJ, Gaudron, Gummow and Hayne JJ said in Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission28 that: "The notion that privilege attaches to communications made between client and lawyer for the purpose of engaging in contraventions of the Act should not be accepted. A communication the purpose of which is to 'seek help to evade the law by illegal conduct' is not privileged." (footnotes omitted) 27 [1997] 1 Qd R 199 at 208. 28 (2002) 213 CLR 543 at 557 [24]; [2002] HCA 49. Crennan It may be acknowledged that legal professional privilege and the exclusionary rule serve different ends of public policy. The point is that, in the case of each rule, the strong considerations of public policy which justify preserving the secrecy of communications associated with the administration of justice may not be invoked to throw a protective cloak of secrecy over criminal conduct. Finality Lord Devlin, writing extra-judicially in 195629, said: "All the jury must be in court when the foreman is asked to stand up and give their verdict so that it may be given in the presence of them all. And when he has given it the clerk of the court says: 'And that is the verdict of you all?'; and thereafter if no juryman dissents the jury is discharged and it is finis rerum [the end of things]. The court will not listen to any juryman who has second thoughts or allow any of them to assert thereafter that he was not a consenting party to the verdict. How otherwise could there be finality?" Lord Devlin's question has considerable rhetorical force; but the facts of the present case prompt another question: what if a member of the jury seeks to assert not only that he did not consent to the verdict, but that his apparent consent was procured by physical coercion by another member of the jury? Dorne Boniface, writing in 2008, recognised the threat posed to the integrity of the system of the administration of justice by an absolute refusal on the part of the court to entertain such an allegation30: "A blanket rule justified on the basis of finality of the jury's verdict is … unsustainable. By refusing outright to inquire into genuine and serious allegations of misconduct, not only is the integrity of the jury dishonoured, so is the integrity of the criminal justice system." In Ras Behari Lal v The King-Emperor31, Lord Atkin, delivering the advice of the Judicial Committee of the Privy Council, said that evidence from a 29 Trial By Jury, (1956) at 48. 30 "Juror misconduct, secret jury business and the exclusionary rule", (2008) 32 Criminal Law Journal 18 at 37. 31 (1933) LR 60 Ind App 354 at 359. Crennan juror that he did not have a sufficient understanding of the English language to be able to understand the proceedings was not excluded by the rule and afforded a ground for setting aside the verdict. Lord Atkin said: "The question whether a juror is competent for physical or other reasons to understand the proceedings is not a question which invades the privacy of the discussions in the jury box or in the retiring room. It does not seek to inquire into the reasons for a verdict." His Lordship went on to conclude: "Finality is a good thing, but justice is a better."32 This decision, which was referred to with evident approval by the Judicial Committee in 1986 in Nanan v The State33, supports the view that the need to protect and preserve the finality of trial by jury as a justification for the exclusionary rule loses its force where the evidence in question does not go to the substance of the jury's deliberations, but, rather, to demonstrate the disruption of the deliberative process. R v Emmett34 supports Boniface's view unsustainable". In that case, after the verdict had been taken, two jurors had sworn affidavits to the effect that "a sheriff's officer wrongly intruded into the jury's deliberations, took part therein and put pressure upon the jury to come to a verdict and even expressed an opinion that the accused were guilty."35 As Lee J said: "[f]or the court not to inquire into the matter would be for the court to condone the exposure of the jury to influence in arriving at its verdict". that a "blanket rule If public confidence in the system of criminal justice is to be deserved, criminal misconduct calculated to prevent free and frank deliberation by a jury must not be kept secret lest it become endemic. In such cases, the application by the courts of the exclusionary rule to preserve finality would be contrary to the first duty of the courts to preserve the integrity of the system of criminal justice which they administer. 32 (1933) LR 60 Ind App 354 at 361. 33 [1986] AC 860 at 872. 34 (1988) 14 NSWLR 327. 35 (1988) 14 NSWLR 327 at 335. Crennan The conduct described in the note in the present case tends to cast a shadow over the administration of justice in this case in a way that lawful but irresponsible behaviour by a juror, careless of his or her oath, does not. The risk that a juror may not be true to his or her oath because of his or her personal eccentricities36 is a risk which is inherent in a system of trial by jury, whereas the risk of the intimidation of jurors by unlawful threats of violence from other jurors is not. It is also necessary to acknowledge the practical reality that the opportunity for jurors to speak out if their verdict is misrepresented by the foreperson at the time of delivery cannot be relied upon as a fail-safe mechanism which obviates the need to address a real question as to subornation if it arises after the verdict has been taken. It would hardly be surprising if a juror, whose will has been so far overborne by illicit pressure or influence as to vote for a verdict contrary to his or her oath, were to sit mute when the verdict is taken as a result of the continuing effects of that pressure or influence. Conclusion as to the scope of the exclusionary rule It is consistent with the rationale for the exclusionary rule to conclude that evidence by a juror that unlawful pressure or influence has been applied to him or her by another juror in relation to his or her verdict falls outside the scope of the rule. It is necessary now to turn to consider whether the conclusion of the Court of Appeal to the contrary has led to a miscarriage of justice in this case. Miscarriage of justice A court should be careful not to jump to the conclusion that the line has been crossed between robust debate and unlawful coercion; but where there is an allegation by a juror capable of belief that an incident has occurred which could be regarded as unlawful intimidation, a court of appeal is warranted in entertaining that allegation as part of its consideration of whether a miscarriage of justice has occurred. The Court of Appeal erred in proceeding on the footing that it was prevented by the exclusionary rule from considering whether a miscarriage of justice had occurred at trial. To dismiss the appeal on the basis that the note was 36 R v Mirza [2004] 1 AC 1118 at 1174-1175 [151]-[152]. Crennan not sufficient "to sustain a conclusion of fact to the effect that the processes of the jury were so irregular as to give rise to a miscarriage of justice"37 was to proceed on an erroneous basis. The proper approach The first point to be made here is that the question with which this case is concerned does not stand on the same plane as an issue raised by the parties for decision at trial; it is a question which, though it may affect the way in which the controversy between the parties should be resolved, is a question as to the integrity of the trial process. The institutional integrity of the system of justice is at stake in a way that is not the case where the issue is solely one between the parties. The appellant did not seek to contend that the verdict upon which he was convicted was not reasonably open to the jury on the evidence. But as was explained in Weiss v The Queen38, even if a court of appeal is persuaded that the evidence properly admitted at trial proved, beyond reasonable doubt, the accused's guilt, "there may be cases where it would be proper to allow the appeal and order a new trial" where in the course of the trial there has been a "serious breach of the presuppositions of the trial". If there is evidence capable of belief which gives rise to reasonable ground for suspicion that one juror has exercised unlawful intimidation over another, then, on the face of things, there has been a serious breach of the presuppositions of the trial. That breach casts a shadow of injustice over the verdict. In Webb v The Queen39, Mason CJ and McHugh J said that: "the test to be applied in this country for determining whether an irregular incident involving a juror warrants or warranted the discharge of the juror or, in some cases, the jury is whether the incident is such that, 37 [2013] WASCA 7 at [39]. 38 (2005) 224 CLR 300 at 317-318 [43]-[46]; [2005] HCA 81. See also AK v Western Australia (2008) 232 CLR 438 at 457 [59]; [2008] HCA 8; Cesan v The Queen (2008) 236 CLR 358 at 386 [89], 393-395 [123]-[129]; [2008] HCA 52; Handlen v The Queen (2011) 245 CLR 282 at 298 [47]; [2011] HCA 51; Baiada Poultry Pty Ltd v The Queen (2012) 246 CLR 92 at 104 [29]; [2012] HCA 14. 39 (1994) 181 CLR 41 at 53; [1994] HCA 30. Crennan notwithstanding the proposed or actual warning of the trial judge, it gives rise to a reasonable apprehension or suspicion on the part of a fair-minded and informed member of the public that the juror or jury has not discharged or will not discharge its task impartially." The other members of the Court agreed with the test so formulated40, although Brennan and Deane JJ differed from the majority in their view of the result of the application of the test in that case. This test should have been applied to determine whether a miscarriage of justice occurred in this case41. If the note was capable of giving rise to a reasonable apprehension or suspicion on the part of a fair-minded and informed member of the public that a juror has not discharged his task because of unlawful coercion, the appeal should have been allowed unless other evidence put the integrity of the verdict beyond question. If the shadow of injustice over the verdict could not be dispelled, the proper course for the Court of Appeal would have been to allow the appeal, quash the conviction and order a new trial. We now turn to consider whether the note was capable of giving rise to such an apprehension or suspicion. The evidentiary value of the juror's note The note did not become part of the record in consequence of being tendered by either party; but neither party objected to receipt of the note as part of the record. In the proceedings in the Court of Appeal and in this Court, no objection was taken to the note on the ground that it was hearsay. Given these circumstances, the question is not whether it is inadmissible as hearsay, but whether it has any probative value42. Having regard to the undisputed provenance of the note, the inference is fairly open that it was written by a juror before the verdict was taken. On that 40 (1994) 181 CLR 41 at 57 per Brennan J, 71 per Deane J, 87-88 per Toohey J. 41 Chaouk v The Queen [1986] VR 707; R v Emmett (1988) 14 NSWLR 327 at 334- 335, 339; Medici (1995) 79 A Crim R 582 at 593. 42 Walker v Walker (1937) 57 CLR 630 at 636, 638; [1937] HCA 44. Crennan basis it is probative of the state of mind of the juror who wrote it43, and of the reason for that state of mind44. It may be acknowledged that, as Martin CJ thought45, it is possible that the author of the note did not accurately describe the pressure to which he claimed to have been subjected; but it is not possible to exclude a reasonable suspicion that the note described conduct which was an offence under s 123 of the Code. As has been said earlier, if a court of appeal is unable to exclude a real suspicion that a juror has been improperly influenced, then the conviction cannot be allowed to stand. Earlier in the course of these reasons, it was said that a court should be careful not to jump to the conclusion that the line has been crossed between robust debate between jurors and the unlawful coercion of a juror. It is appropriate to emphasise that cautionary observation by repeating it here. Having said that, the juror's note was capable of creating a reasonable suspicion that criminal conduct influenced the verdict of a juror contrary to s 123 of the Code. In this regard, it is important that the note and the circumstances in which it was produced to the court did engage the serious attention of the trial judge, to whom the note was addressed. His Honour readily made the connection between the note and the unusual behaviour of the jury which he had observed. It would appear that his Honour was sufficiently concerned by the note, and by the circumstances which he observed, that he would have been disposed to take action if he had not been of the view that his hands were tied because the trial had been concluded. An inquiry might be conducted by the Sheriff under the supervision of the Court of Appeal in the exercise of its appellate jurisdiction. It may be noted that, under s 156(1) of the Supreme Court Act 1935 (WA), the Sheriff is charged "with the … execution of all … commands of the Court which are directed to him, and shall make such return of the same to the Court together with the manner of the execution thereof as he is thereby required". 43 Lloyd v Powell Duffryn Steam Coal Co Ltd [1914] AC 733 at 751-752; Bull v The Queen (2000) 201 CLR 443 at 478-479 [121]; [2000] HCA 24. 44 Hughes v National Trustees, Executors and Agency Co of Australasia Ltd (1979) 143 CLR 134; [1979] HCA 2; Bull v The Queen (2000) 201 CLR 443 at 479 [122]. 45 [2013] WASCA 7 at [34]-[38]. Crennan Inquiry The shadow of injustice cast on the verdict by the note cannot be dismissed on the basis that the note itself and the paucity of evidence of its provenance are insufficient to create a suspicion that, as a matter of fact, the author of the note was overborne in the performance of his duties as a juror. The question is whether it is possible to dispel the shadow of that suspicion. In this regard, the difficulties involved in fairly resolving this question should not be exaggerated. As to the identity of the author of the note and when it was written, the remarks of the trial judge on 18 January 2012 referred to above suggest that there might be no practical difficulty at all in establishing these matters. Further, since the jury was discharged after delivering its verdict, it is unlikely the jurors returned to the jury room where the note was found and, therefore, it seems likely that it was written before the verdict was taken. But it is neither necessary nor desirable to speculate on the facts where they are able to be known 46. Any doubt or ambiguity as to the true meaning of the note might be resolved relatively easily by inquiry of the juror who made the note. An inquiry may reveal, either that the "physical coercion" referred to in the note was no more than robust debate, or that whatever pressure was described, it had, in truth, no real effect upon the decision of the juror who wrote the note. It may be, for example, that the juror who wrote the note changed his mind about the verdict – and about sending the note to the judge – after he had written it. Next, it cannot be assumed that the inquiry would be "wide-ranging and intrusive … into the deliberations of the jury, [involving] the interrogation of all twelve members of the jury"47. In Webb v The Queen48, Brennan J explained that a "possibility" that a juror may have been exposed to a "prejudicial communication" which "could not be excluded" was an irregularity in procedure which was "sufficient by itself to warrant the setting aside of a conviction, although there was no other ground shown for apprehending that the jury had not 46 Willis v The Commonwealth (1946) 73 CLR 105 at 109; [1946] HCA 22; Johnson v Perez (1988) 166 CLR 351 at 368-369; [1988] HCA 64. 47 cf [2013] WASCA 7 at [48]. 48 (1994) 181 CLR 41 at 58. Crennan reached its verdict impartially." Similarly, in R v Mirza49, Lord Rodger of Earlsferry said: "Since proof of the improper extrinsic influence will be sufficient by itself to make the jury's verdict unsafe, no question of admitting evidence as to actual deliberations of the jurors need arise." Finally, it is to be noted that the respondent did not suggest that the passage of time means that it would now be futile to order such an inquiry; but the practicability of an inquiry, given the lapse of time since the verdict, is a matter for determination by the Court of Appeal. Orders The appeal to this Court should be allowed and the orders of the Court of Appeal of the Supreme Court of Western Australia made on 17 January 2013 should be set aside. The appellant's appeal and application to the Court of Appeal should be heard and determined in accordance with these reasons. 49 [2004] 1 AC 1118 at 1178 [161]-[162].

HIGH COURT OF AUSTRALIA KIEU THI BUI AND APPELLANT DIRECTOR OF PUBLIC PROSECUTIONS FOR THE COMMONWEALTH OF AUSTRALIA RESPONDENT Bui v Director of Public Prosecutions (Cth) [2012] HCA 1 9 February 2012 Appeal dismissed. ORDER On appeal from the Supreme Court of Victoria Representation P F Tehan QC with G F Meredith for the appellant (instructed by Greg Thomas, Barrister & Solicitor) W J Abraham QC with D D Gurvich for the respondent (instructed by Commonwealth Director of Public Prosecutions) S G E McLeish SC, Solicitor-General for the State of Victoria with R J Orr intervening on behalf of the Attorney-General for the State of Victoria (instructed by Victorian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Bui v Director of Public Prosecutions (Cth) Criminal law – Appeal – Appeal against sentence – Prosecution appeal – Double jeopardy – Appellant pleaded guilty to importation of a marketable quantity of a border controlled drug contrary to s 307.2(1) of Criminal Code (Cth) – Appellant sentenced to three years' imprisonment to be released forthwith upon giving security to comply with a condition that appellant be of good behaviour for three years – Respondent appealed against sentence – Sections 289(2) and 290(3) of Criminal Procedure Act 2009 (Vic) ("Victorian provisions") provided that double jeopardy not to be taken into account in allowing appeal against sentence or imposing sentence – Whether ss 68(1) or 79(1) of Judiciary Act 1903 (Cth) ("Judiciary Act") rendered Victorian provisions applicable to prosecution appeal against sentence instituted by respondent – Whether a "common law principle against double jeopardy" picked up by s 80 of Judiciary Act – Whether ss 16A(1)-(2) of Crimes Act 1914 (Cth) required or permitted court determining sentence for federal offence to take into account double jeopardy. Words and phrases – "double jeopardy". Crimes Act 1914 (Cth), ss 16A(1)-(2). Judiciary Act 1903 (Cth), ss 68(1)-(2), 79(1), 80. Criminal Procedure Act 2009 (Vic), ss 289(2), 290(3). FRENCH CJ, GUMMOW, HAYNE, KIEFEL AND BELL JJ. The appellant is an Australian citizen who was born in Vietnam. She agreed to carry drugs into Australia from Vietnam at the suggestion of one Quang Vo, also called Ho, a person from whom she had borrowed money. She was apprehended at Melbourne airport on 11 February 2009 and taken to a hospital where a computed tomography (or so-called "CT") scan identified four foreign objects concealed within her body. The objects were pellets containing heroin. The calculated total pure weight of heroin, found upon analysis, was 197.3 grams. After the discovery of the drugs the appellant co-operated with the police. She gave a detailed account of her involvement, made a statement naming the person who provided her with two of the pellets and provided information as to the coded language used by that person and Ho. An undertaking by the appellant to co-operate with law enforcement agencies in future proceedings, made pursuant to s 21E of the Crimes Act 1914 (Cth) ("the Crimes Act"), was tendered at the hearing on sentence after the appellant's plea of guilty to one count of the importation of a marketable quantity of a border controlled drug, namely heroin, contrary to s 307.2(1) of the Criminal Code (Cth). On 30 April 2010, the sentencing judge in the County Court of Victoria, Wilmoth J, decided not to impose an immediate term of imprisonment upon the appellant. Her Honour gave as reasons for that decision the assistance the appellant had already given to the authorities and her undertaking to assist the authorities in the future; the danger which attended that course of action; and the risk that hardship would be caused to the appellant's infant twins, born prematurely in December 2009, following her arrest. Her Honour sentenced the appellant to three years' imprisonment but ordered that she be released forthwith upon giving security by recognisance of $5,000 to comply with a condition that she be of good behaviour for three years. The Commonwealth Director of Public Prosecutions ("the respondent") appealed against the sentence imposed on the ground that it was manifestly inadequate. Neither the appellant nor the Attorney-General for Victoria, who intervened in the appeal to this Court, disputed that the respondent was entitled to appeal against sentence. That entitlement was explained by this Court in Rohde v Director of Public Prosecutions1 applying the reasoning of Gibbs J in Peel v The (1986) 161 CLR 119 at 123-125 per Gibbs CJ, Mason and Wilson JJ, 127-128 per Brennan J, 130 per Deane J; [1986] HCA 50. Bell Queen2. Section 287 of the Criminal Procedure Act 2009 (Vic), like its predecessor s 567A of the Crimes Act 1958 (Vic) which was considered in Rohde, gave a right of appeal against a sentence imposed by an originating court, to the Director of Public Prosecutions of Victoria. Section 68(2) of the Judiciary Act 1903 (Cth), when applied to s 287, has the effect of conferring a right of appeal on the Attorney-General of the Commonwealth. By way of analogy with the Director of Public Prosecutions of Victoria, the Attorney-General is the proper officer to represent the Commonwealth. The stage is then set for s 9(7) of the Director of Public Prosecutions Act 1983 (Cth) to operate so as to vest the right of appeal in the respondent. The reasons for judgment of the Court of Appeal of the Supreme Court of Victoria (Nettle, Hansen JJA and Ross AJA) identified two errors in the sentencing judge's approach and did so by reference to s 16A of the Crimes Act, which appears in Div 2 of Pt 1B of that Act. Part 1B relevantly governs the sentencing of offenders against Commonwealth laws. Section 16A(1) provides: "In determining the sentence to be passed, or the order to be made, in respect of any person for a federal offence, a court must impose a sentence or make an order that is of a severity appropriate in all the circumstances of the offence." Sub-section (2) of s 16A provides a list of matters which "[i]n addition to any other matters, the court must take into account" if they are "relevant and known to the court". Ross AJA, with whom the other members of the Court of Appeal agreed, identified as relevant to the circumstances of the appellant's case, the matter referred to in s 16A(2)(p), namely "the probable effect that any sentence or order under consideration would have on any of the person's family or dependants." His Honour observed that this provision has been construed as being subject to a requirement that the family hardship be adjudged to constitute exceptional circumstances3. The first error identified by the Court of Appeal in the reasoning of the sentencing judge was her Honour's conflation of the consideration of family hardship, which might be caused by the appellant's imprisonment, with the (1971) 125 CLR 447; [1971] HCA 59. 3 Director of Public Prosecutions for the Commonwealth of Australia v Bui [2011] VSCA 61 at [20]. Bell in determining whether circumstance that the appellant had co-operated with the authorities. It was held that to exceptional circumstances, the effect of hardship must be assessed on its own4. The second error related to the sentencing judge's finding that the evidence disclosed a risk of hardship, whereas s 16A(2)(p) requires that hardship be shown to be a probable effect5. family hardship amounts The Court of Appeal agreed with the submission of the respondent that, taking into consideration all relevant matters, the sentence imposed upon the appellant was inadequate. The factors to be taken into account included general deterrence, the nature of the offence, the significance of the appellant's role in drug trafficking, the significant quantity of heroin imported and her motivation, namely financial reward6. After also taking into account the assistance which the appellant undertook to provide law enforcement agencies, the Court re-sentenced the appellant to four years' imprisonment and fixed a non-parole period of two years7. In reasoning to this conclusion the Court of Appeal had regard to ss 289 and 290 of the Criminal Procedure Act which came into effect in Victoria on 1 January 20108. Section 289 provides: 4 Director of Public Prosecutions for the Commonwealth of Australia v Bui [2011] VSCA 61 at [27]. 5 Director of Public Prosecutions for the Commonwealth of Australia v Bui [2011] VSCA 61 at [28]. 6 Director of Public Prosecutions for the Commonwealth of Australia v Bui [2011] VSCA 61 at [31]-[46]. 7 Director of Public Prosecutions for the Commonwealth of Australia v Bui [2011] VSCA 61 at [97]. 8 These provisions are similar to those adopted in other States: see Crimes (Appeal and Review) Act 2001 (NSW), s 68A; Criminal Law Consolidation Act 1935 (SA), s 340; Criminal Appeals Act 2004 (WA), s 41; Criminal Code (Tas), s 402(4A); Criminal Code (NT), s 414(1A). The impetus for the introduction of these provisions was a meeting of the Council of Australian Governments (COAG), which agreed to implement the recommendations of the Double Jeopardy Law Reform COAG Working Group: see Director of Public Prosecutions (Vic) v Karazisis (2010) 206 A Crim R 14 at 36 [83]. Bell "(1) On an appeal under section 287, the Court of Appeal must allow the appeal if the DPP[9] satisfies the court that– there is an error in the sentence first imposed; and a different sentence should be imposed. In considering whether an appeal should be allowed, the Court of Appeal must not take into account any element of double jeopardy involved in the respondent being sentenced again, if the appeal is allowed. In any other case, the Court of Appeal must dismiss an appeal under section 287." And s 290 provides: If the Court of Appeal allows an appeal under section 287, it must set aside the sentence imposed by the originating court and impose the sentence, whether more or less severe, that it considers appropriate. If the Court of Appeal imposes a sentence under subsection (1), it may make any other order that it considers ought to be made. In imposing a sentence under subsection (1), the Court of Appeal must not take into account the element of double jeopardy involved in the respondent being sentenced again, in order to impose a less severe sentence the court would otherwise consider appropriate." than The Court of Appeal correctly observed that Victorian legislative provisions concerning considerations relevant to sentencing cannot of their own force have anything to say about sentencing with respect to a federal offence10. 9 This term is defined by s 3 of the Criminal Procedure Act 2009 (Vic) to mean "the Director of Public Prosecutions for Victoria", but see the discussion at [4] regarding the position of the respondent. 10 Director of Public Prosecutions for the Commonwealth of Australia v Bui [2011] VSCA 61 at [66], referring to R v LK (2010) 241 CLR 177 at 193; [2010] HCA 17. Bell However, s 80 of the Judiciary Act11 provides for the application, by courts exercising federal jurisdiction, of the common law of Australia as modified "by the statute law in force in the State … in which the Court in which the jurisdiction is exercised is held". The Court of Appeal held that ss 289(2) and 290(3) of the Criminal Procedure Act ("the Victorian provisions") relevantly modify the judge-made rule of double jeopardy and are effective to exclude the rule on Commonwealth appeals relating to sentencing of federal offences12. The weight of authority of intermediate appellate courts was said to support that This appeal is limited, by the terms of the grant of special leave to appeal given by Gummow, Hayne and Bell JJ, to the question whether the Victorian provisions apply to a Crown appeal against sentence instituted by the respondent. The appellant contends that the Court of Appeal was wrong to hold that those provisions, which in effect forbid the Court of Appeal taking into account the element of double jeopardy involved in the prisoner being sentenced again, apply in the exercise of federal jurisdiction by a State court of appeal when it determines appeals against sentences for federal offences. The appellant argues that, in deciding the respondent's appeal, the Court of Appeal should (but did not) have had regard to what the appellant described as "the principle" of "double jeopardy", a "principle" which required the Court of Appeal to take account of 11 Section 80 provides in full: "So far as the laws of the Commonwealth are not applicable or so far as their provisions are insufficient to carry them into effect, or to provide adequate remedies or punishment, the common law in Australia as modified by the Constitution and by the statute law in force in the State or Territory in which the Court in which the jurisdiction is exercised is held shall, so far as it is applicable and not inconsistent with the Constitution and the laws of the Commonwealth, govern all Courts exercising federal jurisdiction in the exercise of their jurisdiction in civil and criminal matters." 12 Director of Public Prosecutions for the Commonwealth of Australia v Bui [2011] VSCA 61 at [69]. 13 Director of Public Prosecutions for the Commonwealth of Australia v Bui [2011] VSCA 61 at [71], referring to R v Baldock (2010) 269 ALR 674 (Court of Appeal of the Supreme Court of Western Australia); Director of Public Prosecutions (Cth) v De La Rosa (2010) 273 ALR 324 (Court of Criminal Appeal of the Supreme Court of New South Wales); contra R v Talbot [2009] TASSC 107 (Court of Criminal Appeal of the Supreme Court of Tasmania). Bell the presumed distress and anxiety of the appellant occasioned by having to stand for sentence again. The appellant's argument concerning the relevance of double jeopardy to the determination of a prosecution appeal against inadequacy of sentence necessarily recognised the need to begin examination of the issue by consideration of s 16A of the Crimes Act. The argument depended upon the concept of double jeopardy being one of the matters to be taken into account under that section. And on that footing, the question would be whether s 16A would prevent the Victorian provisions being picked up by ss 68, 79 or 80 of the Judiciary Act. If s 16A does incorporate considerations of double jeopardy, it may be that the Victorian provisions are not "applicable" so that s 68(1)14 cannot apply15; or that s 16A may be said to provide "otherwise" than the Victorian provisions so that s 79(1)16 cannot apply; or that the Victorian provisions are 14 Section 68(1) provides: "The laws of a State or Territory respecting the arrest and custody of offenders or persons charged with offences, and the procedure for: (a) their summary conviction; and (b) their examination and commitment for trial on indictment; and (c) their trial and conviction on indictment; and (d) the hearing and determination of appeals arising out of any such trial or conviction or out of any proceedings connected therewith; and for holding accused persons to bail, shall, subject to this section, apply and be applied so far as they are applicable to persons who are charged with offences against the laws of the Commonwealth in respect of whom jurisdiction is conferred on the several courts of that State or Territory by this section." 15 Putland v The Queen (2004) 218 CLR 174 at 179-180 [7] per Gleeson CJ, 189 [41] per Gummow and Heydon JJ, 215 [121] per Callinan J; [2004] HCA 8. 16 Section 79(1) provides: "The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable." Bell "inconsistent" with s 16A within the meaning of s 8017. Because the Victorian provisions are expressed to modify the common law, it may be considered appropriate to direct attention, in the first place, to s 80. Before doing so it is necessary to consider the appellant's contention concerning s 16A. The appellant submitted that double jeopardy is a principle of judge-made law which informs the content that is to be given to several elements of the statutory provisions governing the sentencing of federal offenders set out in Pt 1B of the Crimes Act. In particular it was said that the words of s 16A(1) "a severity appropriate in all the circumstances of the offence" and the words of s 16A(2) "[i]n addition to any other matters" are sufficiently broad to encompass "double jeopardy". The appellant further submits that the "mental condition" of the person to be sentenced, which condition s 16A(2)(m) requires to be taken into account, is broad enough to refer to the anxiety and distress to which it may be presumed that person will suffer on re-sentencing. It has been explained that what is referred to as the rule against double jeopardy is a manifestation of the principles expressed in the maxim nemo debet bis vexari pro una et eadem causa (a person shall not be twice vexed for one and the same cause), which is the foundation of the pleas of autrefois acquit and autrefois convict18. In Pearce v The Queen19, reference was made to the rationale which had been offered for the rule by Black J in Green v United States20, that "[t]he underlying idea" is that the State should not be allowed to make repeated attempts to convict an individual "thereby subjecting him to embarrassment, expense and ordeal and compelling him to live in a continuing state of anxiety and insecurity as well as enhancing the possibility that even though innocent he may be found guilty." The rule is properly understood as a value which underpins the criminal law21. 17 Set out above at fn 11. 18 Davern v Messel (1984) 155 CLR 21 at 29-30; [1984] HCA 34; see also Pearce v The Queen (1998) 194 CLR 610 at 614 [9]-[10], 625 [53]-[54]; [1998] HCA 57. 19 (1998) 194 CLR 610 at 614 [9]-[10]. 20 355 US 184 at 187-188 (1957). 21 Pearce v The Queen (1998) 194 CLR 610 at 614 [10], 626 [56]; see also R v Carroll (2002) 213 CLR 635 at 660-661 [84]; [2002] HCA 55. Bell It was also explained in Pearce v The Queen22 that the term "double jeopardy" is not always used with a single meaning and is employed in relation to different stages of the criminal justice process, including that of punishment23. In this context, and taking up what was said in Green v United States, the term has been used to describe the distress and anxiety that a convicted person may feel when faced with the prospect of re-sentencing by an appeal court24. The first mention of double jeopardy in connection with a Crown appeal against sentence by an Australian court would appear to be by a Full Court of the Federal Court of Australia (Brennan, Deane and Gallop JJ) in 1979 in R v Tait and Bartley25. The Court was sitting in that case on a Crown appeal against a sentence imposed by the Supreme Court of the Northern Territory, jurisdiction to hear which was conferred by ss 24(1)(b) and 28(5) of the Federal Court of Australia Act 1976 (Cth). The Full Court confirmed that settled principles relating to the review of a discretionary act of sentencing required that some reason must be shown for regarding the discretion confided in the Court as having been improperly exercised. An error affecting the sentence must appear before an appellate court will intervene, whether the appeal be brought by a person convicted of a crime or by the Crown26. However, the Court considered that a Crown appeal raises considerations which are not present in an appeal by a convicted person27. In Peel v The Queen28 Barwick CJ had said that Crown appeals cut across "time- honoured concepts of criminal administration". Isaacs J said in Whittaker v The 22 Pearce v The Queen (1998) 194 CLR 610 at 614 [9]. 23 See also Rohde v Director of Public Prosecutions (1986) 161 CLR 119 at 129. 24 R v JW (2010) 77 NSWLR 7 at 19 [54]; see also Director of Public Prosecutions (Vic) v Karazisis (2010) 206 A Crim R 14; Director of Public Prosecutions (Cth) v De La Rosa (2010) 273 ALR 324. 25 (1979) 24 ALR 473. 26 R v Tait and Bartley (1979) 24 ALR 473 at 476. 27 R v Tait and Bartley (1979) 24 ALR 473 at 476. 28 (1971) 125 CLR 447 at 452. Bell King29 that a Crown appeal puts in jeopardy "the vested interest that a man has to the freedom which is his, subject to the sentence of the primary tribunal." The Full Court observed in R v Tait and Bartley that the freedom of the person was first in jeopardy when the person was before the sentencing court and it was put in jeopardy again on a Crown appeal against sentence30. What was said in R v Tait and Bartley concerning the application of the principle of double jeopardy in connection with sentencing was said by reference to a very different statutory context from that which is here relevant, namely Pt 1B of the Crimes Act. The provisions in question in R v Tait and Bartley were those which provided the Federal Court with a general appellate jurisdiction. The appeals in R v Tait and Bartley were the first instituted by the Crown under the Federal Court of Australia Act. The Full Court was therefore concerned to state the principles to be observed by the Federal Court in the exercise of that jurisdiction31 but it did so in the absence of any statutory provision dealing with sentencing principles, such as Pt 1B. Section 16A applies of its own force to the sentencing of persons convicted of offences against Commonwealth laws. In Johnson v The Queen32 and in Hili v The Queen33 it was observed that, on its proper construction, s 16A accommodates the application of some common law principles of sentencing. The section has been held to accommodate principles of general deterrence34, proportionality35, and totality36. It is able to accommodate some judicially- 29 (1928) 41 CLR 230 at 248; [1928] HCA 28. 30 R v Tait and Bartley (1979) 24 ALR 473 at 476. 31 R v Tait and Bartley (1979) 24 ALR 473 at 475. 32 (2004) 78 ALJR 616 at 622 [15]; 205 ALR 346 at 353; [2004] HCA 15. 33 (2010) 242 CLR 520 at 528 [25]; [2010] HCA 45. 34 Director of Public Prosecutions (Cth) v Said Khodor El Karhani (1990) 21 NSWLR 370 at 378. 35 Wong v The Queen (2001) 207 CLR 584 at 597 [31], 609-610 [71]; [2001] HCA 36 Johnson v The Queen (2004) 78 ALJR 616 at 624-625 [25]-[34]; 205 ALR 346 at Bell developed sentencing principles where such principles give relevant content to the statutory expression in s 16A(1) "of a severity appropriate in all the circumstances of the offence"37, as well as expressions such as "the need to ensure that the person is adequately punished for the offence", which appears in s 16A(2)(k). Section 16A does not accommodate the "principle" which the appellant seeks to introduce. The appellant submitted that this principle was one of the "other matters" which "the court must take into account" in determining sentence38 and that it was a matter that operated as an automatic "discount" on the sentence that would otherwise be imposed. Application of an automatic discount would not be consistent with the requirement of s 16A(1) that a sentence be appropriate in its severity in all the circumstances of the case. And to read s 16A in the manner submitted by the appellant would be to gloss the text impermissibly by introducing a notion for which there is no textual foundation. It would go well beyond giving relevant content to any of the expressions found in the section. Moreover, the terms of s 16A, in particular those of sub-s (2), are addressed to matters affecting sentencing which are to be applied by all courts exercising federal jurisdiction upon sentencing. Those terms draw no distinction between the matters to be taken into account by a sentencing court at first instance or by a court on appeal. It has nothing to say about particular matters which an appeal court alone may take into account when considering re- sentencing. No warrant is therefore provided for interpreting s 16A as encompassing concepts addressed only to an appellate court, such as notions derived from the rule against double jeopardy. In Director of Public Prosecutions (Cth) v De La Rosa39 three out of five members of the New South Wales Court of Appeal were agreed that the reference in s 16A(2)(m) to the "mental condition" of the person to be sentenced 37 Hili v The Queen (2010) 242 CLR 520 at 528 [25]; Johnson v The Queen (2004) 78 ALJR 616 at 622 [15]; 205 ALR 346 at 353. 38 Crimes Act 1914 (Cth), s 16A(2). 39 (2010) 273 ALR 324. Bell is apt to refer to a state of distress or anxiety40. However, a difference in approach is evident as to the question whether s 16A(2)(m) refers to a mental condition which is to be presumed, as the "principle" drawn from the rule against double jeopardy does, or a condition which is proved by evidence. Allsop P and Basten JA did not consider that s 16A(2)(m) was limited to a condition of distress and anxiety which was the subject of proof. Allsop P referred to the presumption as reflecting the reality of what a person facing re- sentencing would experience41. Basten JA was of a similar view, that the presumption was of a fact to be inferred from common experience and that it was not to be expected that s 16A(2) would require proof of such a fact42. Simpson J, however, considered that par (m) referred to the actual mental condition of a person, not his or her presumed condition and that a condition of distress or anxiety must be demonstrated before the provision applies. In her Honour's view the weight to be accorded to such evidence would vary from case to case43. Allsop P and Basten JA were influenced in their assessment by their understanding of the width of the intended operation of s 16A(2). Nevertheless, the opening words of that sub-section bear out the view expressed by Simpson J. There it is said that the court must take into account "such of the following matters as are relevant and known to the court" (emphasis added). In this case there was evidence of actual anxiety and distress which the appellant suffered as a result of the institution of the appeal by the respondent. That evidence was unchallenged and it was considered by the Court of Appeal in determining whether to intervene and in re-sentencing, although Ross AJA was 40 Director of Public Prosecutions (Cth) v De La Rosa (2010) 273 ALR 324 at 335 [52] per Allsop P, 345 [104] per Basten JA agreeing, 385 [280] per Simpson J. 41 Director of Public Prosecutions (Cth) v De La Rosa (2010) 273 ALR 324 at 335 42 Director of Public Prosecutions (Cth) v De La Rosa (2010) 273 ALR 324 at 345 43 Director of Public Prosecutions (Cth) v De La Rosa (2010) 273 ALR 324 at 385 Bell unpersuaded that the hardship to the appellant was sufficient to warrant a reduction in the appellant's sentence44. Whilst s 16A, on its proper construction, is able to accommodate some judge-made sentencing principles, for the reasons outlined above it leaves no room to accommodate the "principle" for which the appellant contends. It was pointed out in R v Gee45, by reference to Deputy Commissioner of Taxation v Moorebank Pty Ltd46 and other cases47, that "[p]rovisions such as ss 64, 68(2) and 79 of the Judiciary Act do not operate to insert a provision of State law into a Commonwealth legislative scheme which is 'complete upon its face' where, on their proper construction, those federal provisions can 'be seen to have left no room' for the picking up of State law" (footnote omitted). The "principle" relied upon by the appellant is judge-made law. If it were to be picked up it would be via s 80 of the Judiciary Act, which allows the common law of Australia to apply in a case in certain circumstances. Even then the terms of s 80 refer to the common law "as modified … by the statute law in force in the State … in which the Court in which the jurisdiction is exercised is held". Submissions on this appeal concerning s 80 focused upon whether there was any disconformity between the Victorian provisions and s 16A, being a "law of the Commonwealth". However, the opening words of s 80 provide that the common law (as modified) applies if the laws of the Commonwealth "are not applicable or so far as their provisions are insufficient to carry them into effect, or to provide adequate remedies or punishment". The words are apt to speak of a gap in Commonwealth statute laws. Thus in Blunden v The Commonwealth48 the plurality held that the exercise of the necessary federal jurisdiction was by s 80 44 Director of Public Prosecutions for the Commonwealth of Australia v Bui [2011] VSCA 61 at [81], [87]-[90]. 45 (2003) 212 CLR 230 at 254 [62] per McHugh and Gummow JJ; [2003] HCA 12. 46 (1988) 165 CLR 55 at 64; [1988] HCA 29. 47 Northern Territory v GPAO (1999) 196 CLR 553 at 576 [38]; [1999] HCA 8; Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at 351 [30]; [1999] HCA 9. 48 (2003) 218 CLR 330 at 343-344 [35] per Gleeson CJ, Gummow, Hayne and Heydon JJ; [2003] HCA 73. Bell directed to be the common law in Australia, as modified by the statute law in force in the relevant Territory. The plurality held that the provisions of the federal statute law, apart from s 80 would be insufficient to provide the appellant with any adequate remedy. Kirby J, in expressing agreement with the view of the plurality, said that the common law, modified by the statute law of the Territory, "applies to fill the gaps in the written law."49 The punishment of which s 16A(1) speaks is a sentence "of a severity appropriate in all the circumstances of the offence." Presumed anxiety and distress on re-sentencing is not one of the matters to which the Court is to have regard under sub-s (2), for the reasons earlier given50. That does not mean that there is a gap or omission in Commonwealth statute law such as to bring s 80 into play. Re-sentencing is able to occur and will occur according to s 16A without reference to that presumed state of affairs. Conclusion and orders The "principle" of double jeopardy relied upon by the appellant is not accommodated by the sentencing provisions of s 16A. No question of picking up the Victorian provisions arises. There is no need to resort to the Victorian provisions because the judge-made rule does not apply in the context of s 16A. The appeal should be dismissed. 49 Blunden v The Commonwealth (2003) 218 CLR 330 at 360 [91].

HIGH COURT OF AUSTRALIA APPELLANT AND THE QUEEN RESPONDENT Moti v The Queen [2011] HCA 50 7 December 2011 ORDER 1. Appeal allowed. 2. Set aside the order of the Court of Appeal of the Supreme Court of Queensland made on 16 July 2010 and in its place order that the appeal to that Court is dismissed. On appeal from the Supreme Court of Queensland Representation I M Barker QC with P J Doyle for the appellant (instructed by Herdlaw Solicitors) J V Agius SC with M C Chowdhury for the respondent (instructed by Commonwealth Director of Public Prosecutions) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Abuse of process – Criminal proceedings – Appellant was citizen of Australia suspected of child sex offences against Australian law committed overseas – Appellant deported from Solomon Islands to Australia by Solomon Islands Government contrary to Solomon Islands law – Australian Government representatives in Solomon Islands aware, and informed superiors in Canberra, of illegality – Australian Government issued travel document for appellant and visas to Solomon Islands officials, which facilitated deportation – Appellant charged and prosecuted on arrival in Australia – Whether circumstances of appellant's removal from Solomon Islands required permanent stay of his prosecution. Abuse of process – Criminal proceedings – Complainant and certain family members made statements about appellant's conduct to Australian Federal Police ("AFP") – Complainant and family later refused to participate in prosecution as witnesses unless given "financial protection" – AFP made significant payments to complainant and family – Payments exceeded AFP guidelines but not unlawful – Whether payments to witnesses required permanent stay of appellant's prosecution. Private international law – Act of State – Act of foreign State – Appellant prosecuted in Australia for offences against Australian law committed overseas – Appellant asserted illegality of Solomon Islands Government's actions under Solomon Islands law in application for permanent stay of prosecution – Whether Australian court can examine, as preliminary to ultimate decision under Australian law, legality of foreign government's actions under foreign law. Words and phrases – "abuse of process", "act of foreign State", "act of State", "deportation", "disguised extradition", "foreign law", "payment to witness", "preliminary". Australian Passports Act 2005 (Cth), s 9. Financial Management and Accountability Act 1997 (Cth), s 44. Deportation Act (Solomon Islands) (c 58), ss 5(3), 7. FRENCH CJ, GUMMOW, HAYNE, CRENNAN, KIEFEL AND BELL JJ. On 3 November 2008, the Commonwealth Director of Public Prosecutions presented an indictment in the Supreme Court of Queensland charging the appellant with seven counts of offences contrary to s 50BA of the Crimes Act 1914 (Cth). At the times relevant to this matter, s 50BA, read with s 50AD, provided that an Australian citizen who, whilst outside Australia, engages in sexual intercourse with a person who is under the age of 16 years commits an offence punishable by imprisonment for 17 years. Four of the counts charged in the indictment alleged conduct in the Republic of Vanuatu; the other three counts alleged conduct in New Caledonia. All counts related to the one complainant and were alleged to have occurred in 1997. The central question in this appeal is whether further prosecution of the charges laid in the indictment should be stayed as an abuse of process. That question should be answered "yes". The appellant was brought to Australia from Solomon Islands without his consent. Officials of the Solomon Islands Government deported the appellant from Solomon Islands by putting him on an aircraft bound for Brisbane without power to do so. Having regard to the role that Australian officials played in connection with the appellant being brought to this country, the further prosecution of the charges would be an abuse of process. The appellant's alternative argument, that the proceedings should be stayed because payments made by Australian authorities to the complainant and her family brought the administration of justice into disrepute, should be rejected. It is necessary to begin consideration of the issues in this matter by describing what was decided at first instance in the Supreme Court of Queensland and on appeal to the Court of Appeal. Proceedings in the Supreme Court of Queensland At first instance, the appellant alleged1 that prosecution of the charges laid in the indictment was an abuse of process because his deportation from Solomon Islands was a "disguised extradition". He submitted2 that the Australian Government had connived or colluded with the Solomon Islands Government in 1 R v Moti (2009) 235 FLR 320 at 322 [3]. (2009) 235 FLR 320 at 332-333 [40]. Crennan Bell that unlawful deportation. The appellant further alleged3 that payments that had been made by Australian authorities to the complainant and her family "undermine confidence in the administration of justice". The primary judge (Mullins J) rejected4 the appellant's arguments about disguised extradition but stayed5 further prosecution of the indictment on the ground that the payments made to the complainant and members of her family were "an affront to the public conscience" and that the court should not "countenance the means used to achieve the end of keeping the prosecution of the charges against the [appellant] on foot". The primary judge took two steps of particular importance in dealing with the questions presented by the circumstances in which the appellant had been deported from Solomon Islands and flown to Australia. First, her Honour concluded6 that the decisions of the Solomon Islands Government to deport the appellant and to do so in the way in which it did were decisions which that Government made and that "[i]t is not for this court to express an opinion on these decisions made by the Solomon Islands Government". The second step concerned her Honour's treatment of the appellant's argument that Australian officials had connived or colluded with the Solomon Islands Government. The appellant had submitted that several matters showed that connivance or collusion. Particular reference was made7 to the provision of Australian visas to relevant Solomon Islands officers who were to accompany the appellant on his flight from Solomon Islands to Brisbane and an Australian document of identity for the appellant for use in connection with his entry to Australia. The primary judge concluded8 that neither of these steps could "be characterised as connivance or collusion". This conclusion appears to have proceeded from her Honour's (2009) 235 FLR 320 at 322 [3]. (2009) 235 FLR 320 at 334 [45]. (2009) 235 FLR 320 at 345 [87]; see also at 346 [90]. (2009) 235 FLR 320 at 333 [43]. (2009) 235 FLR 320 at 326 [17], 329 [31]. (2009) 235 FLR 320 at 334 [45]. Crennan Bell rejection9 of the appellant's argument that "connivance or collusion" of the Australian Government could be shown by applying "the approach of the criminal law to establishing the liability of parties for an offence committed by a principal offender" and, in particular, by seeking "to characterise the Australian Government as an aider and abetter [of the decisions of the Solomon Islands Government] on the basis that wilful blindness is equivalent to knowledge"10. The Court of Appeal (Holmes, Muir and Fraser JJA) set aside11 the stay ordered by the primary judge. In reasons agreed12 in by the other members of the Court, Holmes JA held13 that the primary judge had erred in deciding that the payments made to the complainant and her family were such as to bring the administration of justice into disrepute. Two errors were identified14 as having been made by the primary judge in connection with that question: "the failure to recognise that the questioned payments were not designed to, and did not, procure evidence from the prosecution witnesses; and the failure to pay sufficient regard to the fact that the payments made, while beyond existing guidelines, were not illegal". In respect of the allegation of "disguised extradition", Holmes JA (again with the concurrence of other members of the Court) rejected15 the proposition that "mere knowledge on the part of the Australian Government that the [appellant's] deportation might be illegal equates to the active involvement in procuring deportation, in preference to the proper course of extradition", necessary to ground a stay. Her Honour concluded16 that the Australian (2009) 235 FLR 320 at 334 [44]. 10 Reference was made in this regard to Giorgianni v The Queen (1985) 156 CLR 473 at 482; [1985] HCA 29. 11 R v Moti (2010) 240 FLR 218. 12 (2010) 240 FLR 218 at 234 [56] per Muir JA, 234 [57] per Fraser JA. 13 (2010) 240 FLR 218 at 229 [38]. 14 (2010) 240 FLR 218 at 229 [38]. 15 (2010) 240 FLR 218 at 232 [50]. 16 (2010) 240 FLR 218 at 232 [50]. Crennan Bell Government had "rigorously abstained from expressing any view on what the Solomon Islands Government proposed". In her Honour's view17 the issuing of a travel document for the appellant "could hardly have been refused in circumstances where he was an Australian citizen". Accordingly, Holmes JA found18 that the primary judge had been right to conclude that "there was no collusion by the Australian Government in anything amounting to a disguised extradition". The appellant's arguments in this Court The appellant placed the chief weight of his submissions in this Court on the argument that the proceedings against him should be stayed because of what Australian officials did in connection with his deportation from Solomon Islands. He also submitted, however, that the Court of Appeal was wrong to disturb the primary judge's conclusion that the payments made to the complainant and her family brought the administration of justice into such disrepute that the proceedings should be stayed. Both submissions were advanced under the rubric of "abuse of process" and sought to engage the well-established rule that in both civil and criminal proceedings "Australian superior courts have inherent jurisdiction to stay proceedings which are an abuse of process"19. As four members of this Court said in Batistatos v Roads and Traffic Authority (NSW)20, "[w]hat amounts to abuse of court process is insusceptible of a formulation comprising closed categories". In Ridgeway v The Queen, Gaudron J stated21 that the power extended to proceedings that are "instituted for an improper purpose", "seriously 17 (2010) 240 FLR 218 at 233 [50]. 18 (2010) 240 FLR 218 at 233 [50]. 19 Williams v Spautz (1992) 174 CLR 509 at 518 (footnote omitted); see also at 531-532, 542-543, 552-553; [1992] HCA 34. 20 (2006) 226 CLR 256 at 265 [9] per Gleeson CJ, Gummow, Hayne and Crennan JJ; [2006] HCA 27. 21 (1995) 184 CLR 19 at 74-75; [1995] HCA 66. Crennan Bell and unfairly burdensome, prejudicial or damaging"22 and "productive of serious and unjustified trouble and harassment"23. In Williams v Spautz24, the plurality distinguished between "abuse of process in the sense of proceedings instituted and maintained for an improper purpose" and "abuse of process [that] precluded a fair trial". In Rogers v The Queen, McHugh J concluded25 that, although the categories of abuse of process are not closed, many such cases can be identified as falling into one of three categories: "(1) the court's procedures are invoked for an illegitimate purpose; (2) the use of the court's procedures is unjustifiably oppressive to one of the parties; or (3) the use of the court's procedures would bring the administration of justice into disrepute". Of particular relevance to the present case is the observation of the plurality in Batistatos26, to which reference was made in Dupas v The Queen27, which emphasised that the power to stay proceedings for abuse of process applies to civil and criminal proceedings "with somewhat different emphases attending its exercise". In Dupas28, this Court reiterated that the power "exist[s] to enable the courts to protect themselves and thereby safeguard the administration of justice". But the Court emphasised29 that, in considering whether to grant a stay, there is a "need to take into account the substantial public interest of the community in having those who are charged with criminal offences brought to trial … as a permanent stay is tantamount to a continuing immunity from prosecution". 22 Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 at 247; [1988] HCA 32. 23 Hamilton v Oades (1989) 166 CLR 486 at 502; [1989] HCA 21. 24 (1992) 174 CLR 509 at 521. 25 (1994) 181 CLR 251 at 286; [1994] HCA 42. 26 (2006) 226 CLR 256 at 264 [8]. 27 (2010) 241 CLR 237 at 244 [16]; [2010] HCA 20. 28 (2010) 241 CLR 237 at 243 [14]. 29 Dupas v The Queen (2010) 241 CLR 237 at 251 [37] (footnotes omitted). Crennan Bell The appellant's first argument was directed, in its terms, to whether the prosecution should be permitted to proceed and was founded on the proposition that conduct of the Executive in connection with the appellant's involuntary return to Australia was such that he should not be prosecuted. That is, the appellant submitted that to permit the prosecution to proceed, when the Executive had acted as it had in connection with him being amenable to criminal process in Australia, would bring the administration of justice into disrepute. The second argument, though expressed as directed to whether the prosecution should be permitted to proceed, appeared to be founded, at least in part, upon the proposition that the payments made to witnesses would result in an unfair trial30. It is convenient to deal at once with the second argument about payments to witnesses. Payments to witnesses Because the point about payments to witnesses is not dispositive of the appeal it may be dealt with shortly. Between February 2008 and November 2009 the Australian Federal Police ("the AFP") made substantial payments to the complainant and to members of her family. Those payments were made following repeated statements by the complainant and her father in December 2007 and January 2008 to the effect that the complainant would not participate any further in the prosecution of the appellant unless she and her family were brought to Australia and given "financial protection". Between February 2008 and November 2009 the complainant was paid more than $67,500 and her family was paid more than $81,600. The payments were said to be made to provide for the "minimal daily needs" of the complainant, her brother, father and mother and, for part of the time, to provide accommodation in Vanuatu. The family were said to be unable to support themselves because the publicity given to the charges against the appellant adversely affected their ability to earn income. Before any of the requests for payments were made, the complainant and those members of her family who might be called to give evidence as prosecution witnesses had given statements to police. The Commonwealth Director of Public Prosecutions had advised police that there were reasonable prospects of conviction and Australian authorities had taken several steps towards securing the return of the appellant to Australia. In particular, in October 2006 the 30 cf Dupas v The Queen (2010) 241 CLR 237. Crennan Bell Australian Government made a request to the government of the Solomon Islands for the appellant's provisional arrest pending a formal request for extradition. In these circumstances, the Court of Appeal was right to conclude31 that the payments "were not designed to, and did not, procure evidence from the prosecution witnesses". Further, contrary to the appellant's submissions in this Court, the payments were not shown to be unlawful. It was not demonstrated that any of the payments were made in breach of any provision of the Financial Management and Accountability Act 1997 (Cth) or the Financial Management and Accountability Regulations (Cth). More particularly, it was not shown that the payments (whether considered separately or together) could not have been seen as an "efficient, effective and ethical" use of Commonwealth funds32. Nor was it demonstrated that the payments could not be seen as "not inconsistent with the policies of the Commonwealth"33. Describing the payments (as the appellant did) as payments made in response to "demands" or "threats" by the complainant does not lead to any different conclusion. It was not open to the primary judge to conclude that the payments were "an affront to the public conscience"34 justifying a stay of the appellant's prosecution. And to the extent that the appellant argued he could not have a fair trial due to the payments, that argument should be rejected. As Mason CJ and Toohey J said in R v Glennon35, in what this Court in Dupas36 called "an authoritative statement of principle": 31 (2010) 240 FLR 218 at 229 [38]. 32 Financial Management and Accountability Act 1997 (Cth), s 44(1), (3); Financial Management and Accountability Regulations (Cth), reg 9. 33 Financial Management and Accountability Act 1997 (Cth), s 44(1), (3), as amended by item 49 of Sched 1 of the Financial Framework Legislation Amendment Act 2008 (Cth), with effect from 20 March 2009; Financial Management and Accountability Regulations (Cth), reg 9. 34 (2009) 235 FLR 320 at 345 [87]. 35 (1992) 173 CLR 592 at 605; [1992] HCA 16. 36 (2010) 241 CLR 237 at 245 [18]; see also at 250 [35]. Crennan Bell "a permanent stay will only be ordered in an extreme case37 and there must be a fundamental defect 'of such a nature that nothing that a trial judge can its unfair consequences'38." trial can relieve against the conduct of the If the payments were said to bear upon the evidence witnesses gave at trial, that issue could be explored fully in evidence and could be the subject of suitable instructions to the jury that would prevent unfairness to the appellant39. The appellant's deportation from Solomon Islands The events that surrounded the deportation of the appellant from Solomon Islands took place against a background provided by what was known as the Regional Assistance Mission to Solomon Islands. In July 2003, Solomon Islands, Australia and a number of other Pacific nations had agreed40 that Australia and other assisting countries would deploy a visiting contingent of police forces, armed forces and other personnel to Solomon Islands. The purposes of the deployment were described41 as being to assist in the provision of security and safety, to maintain supplies and services essential to the life of the Solomon Islands community, to prevent and suppress violence, to support and develop Solomon Islands institutions, and generally to assist in the maintenance of law and order. The most senior Australian police officer of the participating 37 Jago v District Court (NSW) (1989) 168 CLR 23 at 34 per Mason CJ; [1989] HCA 38 Barton v The Queen (1980) 147 CLR 75 at 111 per Wilson J; [1980] HCA 48. 39 cf R v Oliver (1984) 57 ALR 543 at 547-548. 40 Agreement between Solomon Islands, Australia, New Zealand, Fiji, Papua New Guinea, Samoa and Tonga concerning the operations and status of the police and armed forces and other personnel deployed to Solomon Islands to assist in the restoration of law and order and security ("the Solomon Islands Agreement") [2003] ATS 17, Art 2. 41 Solomon Islands Agreement, Art 2. Crennan Bell police force was head of that force42. He was appointed a Deputy Commissioner of the Solomon Islands Police Force43. In September 2006, the appellant was appointed Attorney-General of Solomon Islands. His appointment was suspended in October 2006, but he was reappointed in July 2007. As already noticed, in October 2006 the Australian Government requested the government of Solomon Islands to arrest the appellant provisionally for extradition to Australia. In December 2006, the Australian Government made a formal extradition request to Solomon Islands. That request was refused in September 2007. On 11 December 2007, a cable from the Department of Foreign Affairs and Trade in Canberra to Australia's High Commission in Honiara, Solomon Islands, noted that there were reports that, if there were to be a change of government in Solomon Islands, the new government would "deport [the appellant] to Australia … given its view that deportation would be a faster process than extradition". The cable said that: "In order to minimise the potential for [the appellant] to raise claims of abuse of process by reason of perceived Australian government involvement in any deportation plans, or discussions about the Moti issue more broadly, posts should maintain their current practice of not volunteering information, or engaging in discussion, when the issue is raised by Opposition MPs or any other person in Solomon Islands." (emphasis added) An internal AFP minute prepared subsequently and sent on 17 December 2007 recorded that the Senior Police Liaison Officer attached to the Australian High Commission in Honiara (Federal Agent Peter Bond) was "cognisant of the DFAT cable in relation to not discussing this issue with MPs and this has been complied with throughout the last 14 months". As the minute also recorded, both Mr Bond and the Australian High Commissioner to Solomon Islands were aware of information that "[d]eportation was the preferred option of removing [the appellant] from the country as a [p]rohibited [i]mmigrant". 42 Solomon Islands Agreement, Art 5(1). 43 Solomon Islands Agreement, Art 5(2). Crennan Bell On 20 December 2007, a new Prime Minister took office in Solomon Islands. The fact that the head of government changed did not, of itself, terminate the appellant's appointment as Attorney-General. On the day after the new Prime Minister took office in Solomon Islands (21 December 2007) a warrant was issued in Brisbane for the appellant's arrest. On the same day the Australian High Commissioner recorded, in an email to Canberra, that a Solomon Islands official had sought "guidance" from him about "the handling of the Moti issue". The High Commissioner told Canberra that he had responded that there were "two avenues open" to the Solomon Islands Government – "extradition and deportation". He reported telling the official that "[d]eportation was entirely their affair" and that Australia would be "lodging a request for the provisional arrest of [the appellant], prior to a request for his extradition, as soon as the new Minister of Justice was sworn in". On 22 December 2007, the Australian High Commissioner to Solomon Islands was on leave. The Deputy High Commissioner (Ms Heidi Bootle) became Acting High Commissioner. On the morning of 22 December 2007, Ms Bootle and Mr Bond presented a request for the provisional arrest of the appellant dated 21 December 2007 to the Permanent Secretary of the Solomon Islands Department of Foreign Affairs. Later that morning the appellant applied to the High Court of Solomon Islands for an injunction directed, in effect, to the Minister for Commerce, Industry, Labour and Immigration, restraining the Minister from "threatening, continuing or proceeding with the deportation and or expulsion and or removal of the [appellant] from the Solomon Islands". The Chief Justice of Solomon Islands (Palmer CJ) refused the application, noting that the appellant's rights to remain in Solomon Islands were directly connected to his appointment as Attorney-General and that the decision whether to retain the appellant in that office rested with the new government. Palmer CJ further noted that there were "proper procedures" for initiating the processes of extradition or deportation to which, once activated, the appellant would "have opportunity to respond" and that "[a]ny rights [the appellant] has are governed by legislation covering those processes". During the afternoon of 22 December 2007, the Acting High Commissioner and the Senior Police Liaison Officer (Mr Bond) were told that the Solomon Islands cabinet "had determined a two step process in the removal" of the appellant: termination of his employment as Attorney-General by the Judicial and Legal Services Commission of Solomon Islands followed by his Crennan Bell "removal from [d]eportation". the country either by the [e]xtradition process or by On 24 December 2007, the Judicial and Legal Services Commission terminated the appellant's employment as Attorney-General. On the same day a Deportation Order made by the Minister for Commerce, Industry, Labour and Immigration was published in a supplement to the Solomon Islands Gazette. The order recited that the appellant's exemption under the Immigration Act of Solomon Islands had been cancelled, that his continuing presence in the country was contrary to a specified provision of that Act ("and is therefore unlawful") and that he had been declared by the government "as an undesirable person who has conducted himself in a manner prejudicial to the peace, public order, public morality, security and good government of Solomon Islands". The order concluded in the following terms: "AND pursuant to section 7(2)(a) and (b) of the said Deportation (Amendment) Act 1999, I hereby authorise and direct any Immigration Officer or Police Officer any time this order is served on the said JULIAN RONALD MOTI, QC to place him on board any ship or aircraft leaving Solomon Islands. AND I further authorise and direct the officer-in-charge of the Central Prison Rove or any Police Station in Solomon Islands to detain the said JULIAN RONALD MOTI, QC until arrangements are completed for so placing him on board the ship or aircraft." On 24 December 2007, the appellant sought urgent interim orders from Palmer CJ (in his capacity as a single Justice of the Court of Appeal of Solomon Islands) in effect restraining the Minister for Commerce, Industry, Labour and Immigration (and the Minister of Justice and Legal Affairs) from "continuing or proceeding with" the appellant's deportation, expulsion or removal pending the hearing of his appeal against the earlier refusal by Palmer CJ to grant the appellant relief. Palmer CJ dismissed the application. On the same day the Acting High Commissioner met with the head of the Justice Ministry (who told her that the Solomon Islands Government had decided to "pursue [the appellant's] deportation") and then with the permanent secretary responsible for the Immigration portfolio (Mr Jeffrey Wickham) to deliver copies of the request for provisional arrest. The Acting High Commissioner sent a cable to Canberra recording her conversation with Mr Wickham. Crennan Bell This cable of 24 December 2007 recorded four matters of importance to the determination of this case. First, the Acting High Commissioner recorded that Mr Wickham had said that the Solomon Islands Government intended to put the appellant "on a flight from Solomon Islands tomorrow at 4 pm". He proposed that the appellant be accompanied by a Solomon Islands immigration officer and by Mr Bond. Mr Wickham said that after the appellant was detained he would "instruct Solomon Airlines … to free up three seats on the flight to Brisbane". Later that day, the Australian Attorney-General's Department advised the AFP that Mr Bond should not accompany the appellant on the plane by which he left Solomon Islands and the Acting High Commissioner instructed Mr Bond accordingly. Second, the cable of 24 December 2007 recorded that "[a]ccording to Wickham" the deportation was "in accordance with s 7(2) of the amended Solomon Islands Deportation Act". (It will be recalled that "section 7(2) … of the … Deportation (Amendment) Act 1999" had been referred to in the Deportation Order published in the Solomon Islands Gazette as providing the requisite powers to detain and remove the appellant44. It will be convenient to refer to the relevant Solomon Islands deportation legislation as amended as "the Deportation Act".) Third, the cable attached a copy of the Deportation Act and recorded the following comment by the Acting High Commissioner about the operation of that Act: "on our reading of the Deportation Act, [the appellant] has seven days in which to appeal to the High Court before being deported in this manner". As will later be demonstrated, the Acting High Commissioner's opinion about the operation of the Deportation Act was plainly right. Fourth, the cable concluded with a request by the Acting High Commissioner for advice. It said: "Grateful advice on travel documentation for [the appellant]." 44 This appears to have been a reference to s 7(2) of the Solomon Islands Deportation Act (c 58) as inserted by s 3 of the Solomon Islands Deportation (Amendment) Act Crennan Bell Later on 24 December 2007, a cable was sent from Canberra to the High Commission in Honiara advising that the "Post is authorised to issue a Document of Identity to [the appellant] to enable deportation to Australia". On 27 December 2007, without any application by or on behalf of the appellant45, the High Commission issued a document of identity46 in respect of the appellant, valid for the period from 27 December 2007 to 10 January 2008. (The document was not issued until 27 December 2007 because, as Ms Bootle was later to depose, the instruction from Canberra to issue the document was received on 24 December "too late to be dealt with on that day".) This was not the only travel document relevant to this matter that the High Commission in Honiara issued. On 24 December 2007, a Solomon Islands police officer and a Solomon Islands immigration officer attended at the High Commission. There they met Mr Bond, who filled out on behalf of each of them an application for a Business (Short Stay) visa permitting each to visit Australia between 25 December 2007 and 30 December 2007. The appellant pointed out that many of the questions in the forms were left unanswered but attached no consequence to that fact beyond an implicit suggestion that Australian authorities were willing to smooth the path for deportation. In her evidence, however, Ms Bootle said that it would have been "quite extraordinary" for the High Commission not to issue a visa to a Solomon Islands official upon request without good reason to do so. Visas of the kind sought were issued. As events turned out, the Solomon Airlines' flight to Brisbane for 25 December 2007 was cancelled. The Deportation Order was not served on that day. On 25 December 2007, solicitors acting for the appellant applied to the Central Magistrates Court of Solomon Islands for interim orders directed to the "Director of Immigration" and the "Commissioner of Police" preventing execution of the deportation order. Magistrate Lelapitu ordered that execution of the deportation order be stayed pending the hearing and determination by the Court of Appeal of the appellant's appeal against the orders made by Palmer CJ on 22 December 2007. The magistrate further ordered that the defendants to that 45 cf Australian Passports Act 2005 (Cth), s 9. 46 Australian Passports Determination (Cth), s 6.3 Crennan Bell proceeding not enter the appellant's home for the purposes of serving documents on him or of removing or evicting him from that home and that they not approach the appellant or his home for those purposes. On 27 December 2007 a cable was sent from the Australian High Commission in Honiara to Canberra recording that Mr Wickham had "advised that the Deportation Order will be executed shortly before the next Brisbane flight scheduled for 3.10 pm today". The cable further recorded that the appellant had not been detained under the Deportation Act or arrested but that he remained "under surveillance by police". It is convenient, at this point in the narrative, to identify why the Acting High Commissioner was right to conclude (as she had said in her cable of 24 December 2007) that the appellant had "seven days in which to appeal to the High Court before being deported in this manner". On the hearing of the appeal to this Court, the parties treated the text of the Deportation Act as having been proved in evidence47 and proceeded on the footing that the text should be construed according to its plain meaning. Section 5(3) of the Deportation Act provided that a person on whom a deportation order was served could apply to the High Court, within seven days of the service of the order, for a review of the order. Most importantly, s 7 of the Deportation Act gave power to place a person against whom a deportation order was in force "on a ship or aircraft about to leave Solomon Islands" only if that person had not made an application for review within the time prescribed or, if an application for review had been made, the person had "failed to have the order set aside". Section 7 provided: "(1) Where an application has been made against a deportation order under subsection (3) of section 5 the operation of the order shall be suspended until the application is finally disposed of or abandoned. (2) Where a person against whom a deportation order is in force – 47 See Neilson v Overseas Projects Corporation of Victoria Ltd (2005) 223 CLR 331 at 370-373 [115]-[127]; [2005] HCA 54. Crennan Bell has either not made application for review of the order to the High Court within the time prescribed in subsection (3) of section 5; or has made application for review of the order to the High Court within the time prescribed in subsection (3) of section 5, but has failed to have the order set aside, the Minister may, if such person is not detained by an order made under section 6, order that the person against whom the deportation order is in force be detained in such manner as may be directed by the Minister and be placed on a ship or aircraft about to leave Solomon Islands and shall be deemed to be in lawful custody whilst so detained and until the ship or aircraft leaves Solomon Islands. (3) Where any person against whom a deportation order is in force has been placed on any ship or aircraft, the master of the ship or the commander of the aircraft shall, if so required by the Minister or by any person authorised by the Minister, take such steps as may be necessary for preventing such person from landing from the ship or aircraft before it leaves Solomon Islands and may for that purpose detain such person in custody on board the ship or aircraft." It follows that s 7 of the Deportation Act (the provision relied on for the appellant's deportation from Solomon Islands) did not give power to place the appellant on a ship or aircraft about to leave the country until either the time for making application for review had elapsed or, if an application was made, the application was dismissed. Yet despite the Acting High Commissioner believing this to be the case, and despite her telling her superiors in Canberra that this was her belief and sending to Canberra a copy of the legislation which revealed unequivocally that she was right, Canberra told the High Commission in Honiara to issue a travel document relating to the appellant for use in his deportation. And the High Commission, having issued visas to those Solomon Islands officials who would effect the appellant being placed, against his will, on an aircraft bound for Australia, issued a travel document for the appellant knowing that this was to be done within hours of his being served with the Deportation Order. The appellant was placed on the Solomon Airlines flight bound for Brisbane that was due to depart from Honiara at 3.10 pm on 27 December 2007. He was accompanied by the two Solomon Islands officials to whom the High Commission had issued Business (Short Stay) visas. At some point before the Crennan Bell appellant left Solomon Islands, the document of identity which the High Commission had issued was given to those who were to accompany the appellant. (A cable the Acting High Commissioner sent to Canberra on that day said that the "AFP SLO" (Mr Bond) would "pass the document to the Director of Immigration". A cable sent the next day recorded that Deputy Commissioner Marshall of the Royal Solomon Islands Police Force had handed the document to "Immigration officials" at the airport before the aircraft took off for Brisbane.) At first instance and on appeal in this Court, the appellant submitted that it should be found that the Senior Police Liaison Officer (Mr Bond) had actively encouraged Solomon Islands officials who were going to the appellant's house on 27 December 2007 to execute the Deportation Order to "do it quickly because the plane will be waiting". In his affidavit and oral evidence Mr Bond accepted that he had spoken to Solomon Islands officials who were going to serve and execute the Deportation Order respecting the appellant. He said that he could not recall saying the particular words attributed to him. The primary judge made no finding about what was said in the conversation. Rather, her Honour said48 only that there had been "a casual conversation to which I attribute no significance in the circumstances in which it occurred". The Court of Appeal did not refer to the issue. It is not necessary to consider whether, as the appellant urged, this Court should make any finding about what was said in, or what significance should be given to, the conversation between Mr Bond and the Solomon Islands officials. Nor is it necessary to examine whether, as the appellant submitted, Mr Bond had passed on to Deputy Commissioner Marshall "'legal advice' to the effect that the planned deportation was lawful, when he knew full well that it was not". To embark on this latter question would likely require examination of whether relevant Solomon Islands officials, or Mr Bond, believed that the order that Magistrate Lelapitu had made was made without jurisdiction and, if they did, whether that belief was well founded. It would also require examination of Mr Bond's understanding of the Deportation Act. Rather, the focus of attention may be confined to the steps that the High Commission in Honiara took (on instructions from Canberra) to provide travel documentation in respect of the appellant on 27 December 2007 when the Acting High Commissioner believed, rightly, that Solomon Islands officials intended to 48 (2009) 235 FLR 320 at 328 [27]. Crennan Bell use that document in deporting the appellant on that day and further was of the opinion, again rightly, that deporting the appellant on that day was not authorised by Solomon Islands law, the Acting High Commissioner having told her superiors in Canberra of those matters. The respondent did not contest the proposition that the removal of the appellant to Australia without resort to extradition procedures could enliven the power of the Australian court before which the appellant was prosecuted to stay the proceedings as an abuse of process. That position is to be readily understood, given that the existence of such a power has been accepted in decisions over the last 30 years by appellate courts in Australia and the United Kingdom49. What the respondent did contest was the appellant's case that the facts and circumstances here were such as to attract the exercise of that power. In particular, the respondent invoked what has been called "the act of state" doctrine and also emphasised the finding by Holmes JA that the Australian Government had "rigorously abstained" from expressing any view on the proposals by the Solomon Islands Government for deporting the appellant to Australia. It is convenient to deal with those two matters, the first under the heading "Act of State?" and the second under the heading "Abuse of Process?". Act of State? At first instance, on appeal to the Court of Appeal and in this Court considerable reliance was placed by the respondent on two propositions: first, that the decision to deport the appellant in the manner adopted was made by officials of the Solomon Islands Government and, second, that Australian officials stayed silent about that decision, conveying neither approval nor disapproval of it. As noted earlier in these reasons, the primary judge said that it was not for an Australian court "to express an opinion on … decisions made by the Solomon 49 See, for example, Levinge v Director of Custodial Services (1987) 9 NSWLR 546; R v Bow Street Magistrates; Ex parte Mackeson (1981) 75 Cr App R 24; R v Horseferry Road Magistrates' Court; Ex parte Bennett [1994] 1 AC 42; R v Latif [1996] 1 WLR 104; [1996] 1 All ER 353; R v Mullen [2000] QB 520. See also Re Ditfort; Ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347. Crennan Bell Islands Government"50. Her Honour referred in this regard to Attorney-General (United Kingdom) v Heinemann Publishers Australia Pty Ltd ("the Spycatcher Case")51. In the Spycatcher Case this Court adverted to the principle that domestic courts will not enforce a foreign penal or public law, which it identified as the rule with which it was presently concerned. However, their Honours also referred52 to an "associated rule" or principle. This they identified by reference to the well-known dictum of Fuller CJ in Underhill v Hernandez53 that "the Courts of one country will not sit in judgment on the acts of the government of another done within its own territory" and by citation of that dictum by the House of Lords in Buttes Gas & Oil Co v Hammer54 and the Supreme Court of the United States in Banco Nacional de Cuba v Sabbatino55. The proposition stated by Fuller CJ was identified by the plurality in the Spycatcher Case56 as resting "partly on international comity and expediency"57 and by Lord Wilberforce in Buttes Gas58 as being a principle of "judicial restraint or abstention", "inherent in the very nature of the judicial process". In Potter v Broken Hill Proprietary Co Ltd59, this Court referred at some length to the decision in Underhill and to what was seen as the associated rule 50 (2009) 235 FLR 320 at 333 [43]. 51 (1988) 165 CLR 30 at 40-41 per Mason CJ, Wilson, Deane, Dawson, Toohey and Gaudron JJ; [1988] HCA 25. 52 (1988) 165 CLR 30 at 41. 53 168 US 250 at 252 (1897). 54 [1982] AC 888 at 933. 55 376 US 398 at 416 (1964). 56 (1988) 165 CLR 30 at 41. 57 Reference was also made to Oetjen v Central Leather Co 246 US 297 at 304 58 [1982] AC 888 at 931-932. 59 (1906) 3 CLR 479; [1906] HCA 88. Crennan Bell established in British South Africa Company v Companhia de Moçambique60 which would preclude a court determining a disputed question of title to foreign land. As has recently been pointed out61, consideration of questions of "act of state" was important to the decision in Potter. Two points must be made about Potter and its status as authority. First, Potter does not stand unaffected by subsequent decisions. The majority in Regie Nationale des Usines Renault SA v Zhang62 reserved for further consideration not only the Moçambique rule but also the standing of Potter. Second, the decision in Potter concerned an action brought in the Supreme Court of Victoria in respect of the infringement, in New South Wales, of a New South Wales patent. The case was argued on a basis which, though conceded, can now be seen to be false, namely63, "that, for the purposes of the question … under consideration, the several States of Australia stand towards each other in the position of foreign States". No consideration appears to have been given in argument or in the judgments to relevant constitutional questions including, but not limited to, the application of the full faith and credit provisions of s 118 of the Constitution. In these circumstances consideration of questions of act of State and the decision of Fuller CJ in Underhill is better conducted by reference to more recent examination of those questions. And, as will be explained, neither what was said in the Spycatcher Case nor the decision of Fuller CJ in Underhill should be understood as establishing as a general and universally applicable rule that Australian courts may not be required (or do not have or may not exercise jurisdiction) to form a view about the lawfulness of conduct that occurred outside Australia by reference to foreign law. 60 [1893] AC 602. See also Companhia de Moçambique v British South Africa Company [1892] 2 QB 358 at 395. 61 Lucasfilm Ltd v Ainsworth [2011] 3 WLR 487 at 507-509 [60]-[68], 512 [85] per Lord Walker of Gestingthorpe JSC and Lord Collins of Mapesbury (with whom Lord Phillips of Worth Matravers PSC and Baroness Hale of Richmond JSC agreed); [2011] 4 All ER 817 at 837-839, 842-843. 62 (2002) 210 CLR 491 at 520 [76]; [2002] HCA 10. 63 (1906) 3 CLR 479 at 510; see also at 489, 491, 495, 502-503, 505-507. Crennan Bell It should be emphasised that it follows that there will be occasions when to decide the issues that must be determined in a matter an Australian court must state its conclusions about the legality of the conduct of a foreign government or persons through whom such a government has acted. The present case is an example of an occasion of that kind. The dictum of Fuller CJ was stated in absolute and universal terms. It is a dictum often associated with the expression "act of State". But both the dictum, and the phrase "act of State", must not be permitted to distract attention from the need to identify the issues that arise in each case at a more particular level than is achieved by applying a single, all-embracing formula. Thus, as has now been pointed out in successive editions of Dicey and Morris64, the result to which the dictum of Fuller CJ would point is often a result dictated by the application of ordinary rules governing the choice of law. So, for example, there could be no recovery by an action brought in this country in tort for the governmental seizure of property in a foreign country if the law of the place where the alleged tort was committed permitted that seizure65. Whether the acts of which complaint was made in such a case were tortious would be determined by reference to the law of the place where the alleged tort was committed66. And other circumstances in which the dictum might be thought to be engaged will more appropriately require the application of well-established rules about foreign states immunity67. As F A Mann has cogently argued68, issues like those considered in Buttes Gas and in Sabbatino are better approached at a more particular level of inquiry than the 64 Dicey and Morris on the Conflict of Laws, 11th ed (1987), vol 1 at 110-112; 12th ed (1993), vol 1 at 109-111; 13th ed (2000), vol 1 at 101-103 [5-039]-[5-041]; 14th ed (2006), vol 1 at 114-118 [5-043]-[5-050]. 65 cf Banco Nacional de Cuba v Sabbatino 376 US 398 (1964). See also Re Ditfort; Ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347 at 371-372. 66 Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491. 67 See Foreign States Immunities Act 1985 (Cth). 68 "Conflict of Laws and Public Law", [1971] I Recueil des Cours 107 at 148-149, 151-156; "The Sacrosanctity of the Foreign Act of State", in Studies in International Law, (1973) 420 at 421, 435; Foreign Affairs in English Courts, (1986) at 27-29, 164, 176-182. See also Holdsworth, "The History of Acts of State in English Law", (1941) 41 Columbia Law Review 1313. Crennan Bell level of generality reflected in the dictum of Fuller CJ and in references to international comity and the conduct by the executive branch of foreign relations. Rather, as Mann has correctly said69, "the Courts are free to consider and pronounce an opinion upon the exercises of sovereign power by a foreign Government, if the consideration of those acts of a foreign Government only constitutes a preliminary to the decision of a question … which in itself is subject to the competency of the Court of law". The fact that the decision of a foreign official is called into question does not of itself prevent the courts from considering the issue70. Here, the question of the lawfulness of the appellant's removal from Solomon Islands, although effected by the Solomon Islands Government, was "a preliminary" to the decision whether a stay should be granted. The primary judge was not right to conclude71 that "[i]t is not for this court to express an opinion on these decisions made by the Solomon Islands government". Abuse of process? In considering whether prosecution of the charges laid in the indictment preferred against the appellant would be an abuse of process of the Supreme Court of Queensland, the focus of the inquiry must fall upon what Australian officials had done or not done in connection with the appellant's deportation from Solomon Islands. To conclude that the deportation was not effected lawfully was a necessary but not a sufficient step towards a decision about abuse of process. In deciding whether there is an abuse of process, three basic propositions must be borne at the forefront of consideration. 69 "The Sacrosanctity of the Foreign Act of State", Studies in International Law, (1973) 420 at 433-434, quoting von Bar, Das Internationale Privat- und Strafrecht, (1889), vol 2 at 685, translated by Gillespie as Private International Law, (1892) at 1121. See also Re Ditfort; Ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347 at 372-373; Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 at 33 [100] per McHugh and Gummow JJ, 38-39 [122] per Hayne J; [2003] HCA 6. 70 Lucasfilm Ltd v Ainsworth [2011] 3 WLR 487 at 512-513 [86]; [2011] 4 All ER 71 (2009) 235 FLR 320 at 333 [43]. Crennan Bell First, as was pointed out by the plurality in Lipohar v The Queen72, the trial of an indictable offence must generally be conducted in the presence of the accused, "there being no trial in absentia at common law in the ordinary course73". If the appellant was to be tried in the Supreme Court of Queensland for the offences charged in the indictment he had to be brought before that Court. The appellant came to Australia, and was available in Queensland to be charged with and tried for the offences the subject of the indictment, only because he was deported from the territory of Solomon Islands by officers of the executive government of that country detaining him and putting him on an aircraft bound for Brisbane. As has been pointed out, the appellant's removal from Solomon Islands was not authorised by the Solomon Islands legislation relied on by the officials of that country's government who detained him and put him on the aircraft. The second basic proposition to notice is that, if Australia seeks the extradition of a person from another country for that person to stand trial in Australia for some offence against Australian law, principles of double criminality74 and speciality75 would ordinarily be applied. Application of those principles would determine whether the person whose extradition was sought would be surrendered and, if surrendered, what charges might be preferred. By 72 (1999) 200 CLR 485 at 514 [69]; [1999] HCA 65. 73 See Lawrence v The King [1933] AC 699 at 708; Athanassiadis v Government of Greece [1971] AC 282 at 294-296 (n); R v Jones (Robert) (No 2) [1972] 1 WLR 887 at 890-891; [1972] 2 All ER 731 at 734-736; Tassell v Hayes (1987) 163 CLR 34 at 43-44; [1987] HCA 21; Wiest v Director of Public Prosecutions (1988) 86 ALR 464 at 494; R v Hallocoglu (1992) 29 NSWLR 67 at 71-72; Kunnath v The State [1993] 1 WLR 1315 at 1319-1320; [1993] 4 All ER 30 at 35-36; R v Jones (1998) 72 SASR 281 at 292-295; Ebatarinja v Deland (1998) 194 CLR 444 at 454; [1998] HCA 62. 74 See, for example, Truong v The Queen (2004) 223 CLR 122 at 149 [52], 151 [58] per Gummow and Callinan JJ; [2004] HCA 10; Riley v The Commonwealth (1985) 159 CLR 1 at 15-19 per Deane J; [1985] HCA 82. 75 See, for example, Truong (2004) 223 CLR 122 at 139-141 [21]-[24] per Gleeson CJ, McHugh and Heydon JJ, 155 [75] per Gummow and Callinan JJ, 184-185 [185]-[189] per Hayne J. Crennan Bell contrast, if an alleged offender arrives in Australia because he or she was deported from another country, the principles that apply in determining whether the person could be extradited from that other country, and in limiting what charges he or she might face, may not apply. In the present case, where the offences with which the appellant was charged were offences that it was alleged he had committed outside Australia, the question of double criminality may have been controversial. It is neither necessary nor appropriate to consider how such a question might have been resolved. The third basic proposition is that, as pointed out in the joint reasons of four members of this Court in Williams v Spautz76, two fundamental policy considerations affect abuse of process in criminal proceedings. First, "the public interest in the administration of justice requires that the court protect its ability to function as a court of law by ensuring that its processes are used fairly by State and citizen alike"77. Second, "unless the court protects its ability so to function in that way, its failure will lead to an erosion of public confidence by reason of concern that the court's processes may lend themselves to oppression and injustice"78. Public confidence in this context refers to the trust reposed constitutionally in the courts to protect the integrity and fairness of their processes. The concept of abuse of process extends to a use of the courts' processes in a way that is inconsistent with those fundamental requirements. In the present case, the appellant alleged that his deportation from Solomon Islands was illegal. He alleged that Australian authorities so acted in connection with his deportation that it would be an abuse of process to prosecute the charges preferred against him. Whether there would be an abuse of process cannot be decided without deciding whether the appellant's deportation was illegal. In the particular circumstances of this case, only if the appellant's deportation was illegal would any action of Australian authorities in connection with that deportation bear upon the allegation of abuse of process. And the significance that is to be given to what Australian authorities did or did not do in 76 (1992) 174 CLR 509 at 520 per Mason CJ, Dawson, Toohey and McHugh JJ. See also Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256 at 264-265 [6]-[9] per Gleeson CJ, Gummow, Hayne and Crennan JJ. 77 (1992) 174 CLR 509 at 520. 78 (1992) 174 CLR 509 at 520. Crennan Bell connection with the appellant's deportation cannot be assessed without first deciding not only whether the deportation was illegal but, if so, why it was illegal. In deciding whether subsequent criminal proceedings in the country to which the accused has been moved without resort to extradition procedures should be stayed, particular facts and circumstances have led courts to express the issue in different ways. So, for example, in this Court, in Truong v The Queen79, Gummow and Callinan JJ spoke of whether there had been "a deliberate disregard by the Australian authorities and by the respondent prosecutor of the statutory requirements of s 42 [of the Extradition Act 1988 (Cth)] or a knowing circumvention thereof" (emphasis added). And in the Court of Appeal of the Supreme Court of New South Wales in Levinge v Director of Custodial Services80 reference was made to whether there had been the wrongful or unlawful in bypassing extradition procedures or participating in unauthorised or unlawful removal81 and to Australian authorities being party to or conniving at unlawful conduct82. involvement by Australian authorities But the forms of expression adopted in the decided cases must be understood in the context of the particular facts of each case. None should be read as attempting to chart the boundaries of abuse of process. None should be read as attempting to define exhaustively the circumstances of removal of an accused to this country that warrant exercise of the power to stay criminal proceedings against that person or as giving some exhaustive dictionary of words by one or more of which executive action must be described before proceedings should be stayed. None should be read as confining attention to whether any act of an Australian Government official constituted participation in criminal wrongdoing, whether as an aider and abettor or as someone knowingly concerned in the wrongdoing. And the use of words like "connivance", "collusion" and "participation" should not be permitted to confine attention in that way. All should be understood as proceeding from recognition of the basic proposition that the end of criminal prosecution does not justify the adoption of any and 79 (2004) 223 CLR 122 at 161 [96]. 80 (1987) 9 NSWLR 546. 81 (1987) 9 NSWLR 546 at 556 per Kirby P. 82 (1987) 9 NSWLR 546 at 565 per McHugh JA. Crennan Bell every means for securing the presence of the accused. And in this case, as in others, the focus of attention must fall upon what Australian officials did or did not do. It may readily be accepted, as the primary judge decided83, that the Solomon Islands Government was determined to deport the appellant and that it was officials of that Government who decided to execute that intention in the way in which it was done. It is clear that Australian officials had more than once told officials of the Solomon Islands Government that Australia sought the appellant's extradition. It may be accepted that, as Holmes JA said84, the Australian Government "rigorously abstained from expressing any view on what the Solomon Islands Government proposed". It is not necessary to decide whether the silence of Australian officials in the face of detailed descriptions by Solomon Islands officials of what was intended might have been understood by Solomon Islands officials as tacit assent to what they proposed. It is also not necessary to decide whether the silence of Australian officials in the face of the expression by Solomon Islands officials of confidence in the legality of what was proposed might have affirmed that confidence. Nor is it necessary to decide whether steps taken by Australian officials (issuing travel documents) or presence in the vicinity of the place where the appellant was served with the Deportation Order (as Mr Bond was) might have encouraged Solomon Islands officials to believe that what was being done was done with the assent (if not positive approval) of Australian officials. It is enough to observe three matters. First, Australian officials (both in Honiara and in Canberra) knew that the senior representative of Australia in Honiara at the time (the Acting High Commissioner) was of opinion that the appellant's deportation was not lawful. Second, the Acting High Commissioner's opinion was obviously right. Third, despite the expression of this opinion, and its obviously being right, Australian officials facilitated the unlawful deportation of the appellant by supplying a travel document relating to him (and travel documents for those who would accompany him) at a time when it was known that the documents would be used to effect the unlawful deportation. That is, Australian officials supplied the relevant documents in time to be used, with 83 (2009) 235 FLR 320 at 333 [43]. 84 (2010) 240 FLR 218 at 232 [50]. Crennan Bell knowledge that they would be used, to deport the appellant before the time for deporting him had arrived. These three matters present a sharp contrast with the circumstances considered in the decision upon which the respondent in this appeal placed weight: R v Staines Magistrates' Court; Ex parte Westfallen85. Two of the applicants in that matter had been deported from Norway and were arrested on their arrival at Heathrow airport. They alleged that their presence within the jurisdiction had been improperly procured by means other than formal extradition procedures and that further proceedings against them should be stayed. The respondents in Ex parte Westfallen submitted86 that what had taken place "was not disguised extradition, but undisguised deportation" and further submitted that "there is no taint of impropriety against the British authorities". And by contrast with the circumstances in this case, Lord Bingham of Cornhill CJ accepted these submissions, finding87 that the British authorities had not "acted illegally or procured or connived at unlawful procedures or violated international law or the domestic law of foreign states or abused their powers in a way that should lead this court to stay the proceedings against the applicants". It is no answer to the three matters that have been identified in relation to the present case to say that the High Commission could not deny an issue of a document of identity to the appellant. That may or may not be right if the appellant had sought the issue of such a document88, but he had not. Nor is it an answer to these matters to say that the High Commission would not deny the issue of visas to Solomon Islands officials. The critical observation is that what was done by Australian officials not only facilitated the appellant's deportation, it facilitated his deportation by removal on 27 December 2007 when Australian officials in Honiara believed that this was not lawful and had told Australian officials in Canberra so. It follows that the maintenance of proceedings against the appellant on the indictment preferred against him on 3 November 2008 was an abuse of process of the court and should have been permanently stayed by the primary judge. 85 [1998] 1 WLR 652; [1998] 4 All ER 210. 86 [1998] 1 WLR 652 at 656; [1998] 4 All ER 210 at 213. 87 [1998] 1 WLR 652 at 665; [1998] 4 All ER 210 at 222. 88 See Australian Passports Act 2005 (Cth), s 9(1), (3). Crennan Bell Conclusion and order For the reasons that have been given, further prosecution of the charges laid in the indictment preferred against the appellant on 3 November 2008 should be stayed as an abuse of process. The appeal to this Court should be allowed. The order of the Court of Appeal of the Supreme Court of Queensland made on 16 July 2010 should be set aside and in its place it should be ordered that the appeal to that Court is dismissed. HEYDON J. One of the appellant's arguments for a permanent stay of the criminal proceedings against him is that there will be unfairness in his trial in the Queensland courts by reason of potentially unreliable evidence. The other argument centres on illegality in the method by which he was removed from the Solomon Islands and brought before the Queensland courts, but does not contend that that illegality would generate an unfairness in the trial. Paying witnesses The payment of money to the complainant and her family does not justify a permanent stay because it does not create incurable unfairness in the forthcoming trial. The payments did not bring the appellant before the Queensland courts. They were not unlawful. They were not offered in order to induce the complainant to provide information to detectives with a view to considering whether to prosecute. Instead they were requested by the complainant and her father in the summer of 2007-2008, after the Australian Federal Police had obtained affidavits from the complainant and her family, after the Commonwealth Director of Public Prosecutions had advised on 9 August 2006 that there were reasonable prospects of conviction, and after the Australian Government had in October 2006 taken steps with the Solomon Islands Government to procure the appellant's return to Australia. It is one thing to pay a person's living expenses as the price for the provision of a statement of the evidence which that person could give if called as a witness. Different considerations arise where payment of the living expenses of a person is requested after that person has provided a witness statement and the payment is made with a view to ensuring that that person is in a position to attend to give evidence. That is particularly so in cases where, as here, the prosecution was not in a position to compel the attendance at the trial of the witnesses who were paid. Finally, any bearing which the payments had on the witnesses' credit could have been explored in cross-examination at the trial, debated in address, and, if appropriate, referred to in the summing up. Deportation of the appellant The submissions of the respondent assumed that the appellant's case would have been made good had the Australian authorities "[connived] in [or colluded] with the Solomon Islands authorities to execute an unlawful deportation." The appellant's submissions depended on a test requiring "knowledge and connivance or involvement of the Australian executive". These submissions of the parties assumed the correctness of statements made by the Court of Appeal of the Supreme Court of New South Wales in Levinge v Director of Custodial Services89 and by the House of Lords in R v Horseferry 89 (1987) 9 NSWLR 546 at 565. Road Magistrates' Court; Ex parte Bennett90. Those statements were to the effect that where an accused person is removed from one country and brought into another country in which a criminal prosecution is to take place, even though the removal does not create any risk of an unfair trial, and even though the court retains jurisdiction to try the accused person, the court has a discretionary power, or perhaps a duty, to order a permanent stay of the prosecution in certain circumstances. Below this will be called "the assumed rule". The statements in Levinge's case, being dicta, did not bind the courts below. And the statements in Bennett's case, being statements of the House of Lords, did not bind the courts below either91. They certainly do not bind this Court. It was in the respondent's interest to attack the correctness of these statements in the courts below and in this Court. But no attack was made. Thus the question whether the assumed rule exists was not debated in argument. However, in order to reach a view about whether the facts of this case fit within any test for abuse of process justifying a stay, it is necessary to ascertain what that test is. To that end, its precise formulation was discussed from time to time in argument. An examination of the authorities for the purpose of discovering the formulation of the test and then applying it suggests that the assumed rule does not exist. It would have been necessary to re-list the matter for further argument about that conclusion if it stood as a barrier to the allowing of the appeal. But since the majority of the Court accepts the existence of the assumed rule, there is no point in exposing the parties to the expense and delay of that course, and no point in taking much space in exploring the reasons for denying the existence of the assumed rule. Bennett's case resolved a conflict in the English authorities. There was a substantial line of decisions by distinguished judges which were inconsistent with the assumed rule92. And there were also authorities supporting the assumed 91 Cook v Cook (1986) 162 CLR 376 at 390; [1986] HCA 73. 92 Ex parte Scott (1829) 9 B & C 446 [109 ER 166] (Lord Tenterden CJ); Sinclair v Her Majesty's Advocate (1890) 17 R 38 (Lords Macdonald (Lord Justice-Clerk), Adam and McLaren); R v OC Depot Battalion, RASC [1949] 1 All ER 373 (Lord Goddard CJ, Humphreys and Finnemore JJ); Moevao v Department of Labour [1980] 1 NZLR 464 at 470 (Richmond P, discussing the correctness of R v Hartley [1978] 2 NZLR 199 as an authority on abuse of process); R v Plymouth Justices; Ex parte Driver [1986] QB 95 (Stephen Brown LJ, Stuart-Smith and Otton JJ, as they then were) and the Divisional Court (Woolf LJ and Pill J, as they (Footnote continues on next page) rule93. Bennett's case upheld the latter line of cases, and it has been said that at least in England it "broke new ground."94 What was that new ground? What is the test? The authorities favouring the assumed rule reveal considerable difficulties in stating what it is. One case supporting the assumed rule, though it does not appear to have been cited in Bennett's case, is Levinge's case95. The appellant's arguments contended or perhaps assumed that a trial in Australia could be permanently stayed on the ground that Australian authorities had known of, or connived in, the appellant's unlawful removal from Mexico to the United States of America, whence he was brought to Australia. The crucial question for decision was whether the authorities had in fact had that knowledge or engaged in that connivance96. The Court of Appeal held that the authorities had not known of or connived in the unlawful removal. It followed that those things which were said about the assumed rule were obiter dicta. McLelland A-JA, indeed, declined to say anything about the assumed rule. He said it was unnecessary to decide whether "improper activities on the part of the prosecuting authorities in procuring an alleged offender to be brought within the jurisdiction to answer criminal charges could be the basis of a finding that continuation of the prosecution is an abuse of process."97 Kirby P surveyed the competing authorities as they stood in 1987. He favoured the law as stated in R v Hartley98 and R v Bow Street Magistrates; Ex parte Mackeson99. What the law stated in then were) against whose decision the appeal in Bennett's case was brought: R v Horseferry Road Magistrates' Court; Ex parte Bennett [1993] 2 All ER 474. 93 R v Hartley [1978] 2 NZLR 199 at 216-217; Moevao v Department of Labour [1980] 1 NZLR 464; R v Bow Street Magistrates; Ex parte Mackeson (1981) 75 94 R v Martin [1998] AC 917 at 926 per Lord Lloyd of Berwick (Lords Browne-Wilkinson and Slynn of Hadley concurring). 95 (1987) 9 NSWLR 546. 96 See Kirby P's summary of the arguments: (1987) 9 NSWLR 546 at 549. 97 (1987) 9 NSWLR 546 at 567. 98 [1978] 2 NZLR 199. 99 (1981) 75 Cr App R 24. those cases was is not clear, but Kirby P said that his inclination was to prefer the view that the conceptual basis of the law was "to assert the entitlement of the courts to protect the integrity of their own process and to uphold that integrity and the perception of it in the eyes of the parties, of the community and of the judges themselves."100 But the passages he quoted or summarised did not state precisely what the test reflecting that conceptual basis was. McHugh JA treated the law as applying "where there is in existence an extradition treaty which is knowingly circumvented by the prosecuting authorities"101. He said that "before a stay can be granted the prosecution must have been either a party to the unlawful conduct or connived at it."102 He also said103: "it is necessary to balance the public interest in preventing the unlawful conduct against the public interest in having the charge or complaint determined. … [C]onduct which might be regarded as constituting an abuse of process in respect of a comparatively minor charge may not have the same character in respect of a serious matter." In Bennett's case Lord Griffiths treated the matter as discretionary – as turning on "the question whether assuming the court has jurisdiction, it has a discretion to refuse to try the accused"104. He said105: "where process of law is available to return an accused to this country through extradition procedures our courts will refuse to try him if he has been forcibly brought within our jurisdiction in disregard of those procedures by a process to which our own police, prosecuting or other executive authorities have been a knowing party." 100 (1987) 9 NSWLR 546 at 557. 101 (1987) 9 NSWLR 546 at 564. See also Re Ditfort; Ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347 at 367, which summarised what was said in Levinge's case as turning on "knowing circumvention of provisions of an extradition treaty otherwise applicable to the accused." 102 (1987) 9 NSWLR 546 at 565. 103 (1987) 9 NSWLR 546 at 565. 104 [1994] 1 AC 42 at 59. 105 [1994] 1 AC 42 at 62. Lord Bridge of Harwich said106: "When it is shown that the law enforcement agency responsible for bringing a prosecution has only been enabled to do so by participating in violations of international law and of the laws of another state in order to secure the presence of the accused within the territorial jurisdiction of the court, I think that respect for the rule of law demands that the court take cognisance of that circumstance." Lord Lowry said that the Court was not concerned with irregularities committed abroad with which the executive was not involved107. His test turned on participation in or encouragement of the irregularities108. Lord Slynn of Hadley considered109 that there was power to grant a permanent stay if the following allegation was made out110: "the English police took a deliberate decision not to pursue extradition procedures but to persuade the South African police to arrest and forcibly return the appellant to this country, under the pretext of deporting him to New Zealand via Heathrow so that he could be arrested at Heathrow and tried for the offences of dishonesty he is alleged to have committed in Lord Oliver of Aylmerton dissented. Aspects of his reasoning will be considered below111. In R v Martin112 Lord Lloyd of Berwick (Lords Browne-Wilkinson and Slynn of Hadley concurring) said that in Bennett's case the reasoning of the House of Lords had turned on "a deliberate abuse of extradition procedures." 106 [1994] 1 AC 42 at 67. 107 [1994] 1 AC 42 at 77. 108 [1994] 1 AC 42 at 76. 109 [1994] 1 AC 42 at 84. 110 [1994] 1 AC 42 at 52 per Lord Griffiths. 111 See at [91], [94] and [95]. 112 [1998] AC 917 at 927. In this Court, the assumed rule has only been considered in Truong v The Queen113. The appellant contended that his appeal against conviction should be allowed on the ground that the prosecution had contravened s 42 of the Extradition Act 1988 (Cth). It had done so, on the appellant's case, because while the appellant had been extradited from the United Kingdom in respect of offences of conspiracy to kidnap and conspiracy to murder, he had been tried and convicted instead of the offences of kidnapping and murder. The assumed rule was thus not directly in point. In that case the Commonwealth accepted its correctness and did not challenge it114; so did Victoria115. Gummow and Callinan JJ treated the cases stating the assumed rule as authority for the proposition that an allegation by the appellant of abuse of process could not succeed unless the appellant made out a case "that there was a deliberate disregard by the Australian authorities and by the respondent prosecutor of the statutory requirements of s 42 or a knowing circumvention thereof"116. Kirby J considered that a stay could be granted, not only in "cases of deliberate and knowing misconduct", but also in "serious cases where, whatever the initial motivation or purpose of the offending party, and whether deliberate, reckless or seriously negligent, the result is one which the courts, exercising the judicial power, cannot tolerate or be part of."117 He also said that a stay was "not available to cure some 'venial irregularity'"118 and that a stay had rightly been refused in R v Raby, where only a "technical" breach of extradition law had taken place119. In R v Raby, Byrne J said120: "It is not sufficient for a stay … merely that there has been some departure from the proper procedures from bringing the accused from outside the jurisdiction; the Court must undertake some assessment of the seriousness of the departure and of the guilty mind of those involved, for it is only where there is a deliberate and serious departure from the required legal 113 (2004) 223 CLR 122; [2004] HCA 10. 114 (2004) 223 CLR 122 at 129. 115 (2004) 223 CLR 122 at 131-132. 116 (2004) 223 CLR 122 at 161 [96]. 117 (2004) 223 CLR 122 at 171-172 [135]. 118 (2004) 223 CLR 122 at 172 [136], quoting Bennett's case [1994] 1 AC 42 at 77 per Lord Lowry. 119 (2004) 223 CLR 122 at 172 [136]. 120 [2003] VSC 213 at [37]. procedures that the Court will register its disapproval by denying to the prosecuting authority the right to proceed against an accused person. In the present case, the departure was minimal and inadvertent and there is no evidence of the required guilty mind." In Bou-Simon v Attorney-General (Cth) the Full Court of the Federal Court of Australia (Black CJ, Tamberlin and Katz JJ) treated the assumed rule as law: there was no contrary argument. The problem discussed by the Full Court concerned the effect of providing an allegedly misleading affidavit to a French court hearing proceedings for the appellant's extradition. That problem was different from the present problem. The Full Federal Court said121: "Bennett's case is concerned with serious misconduct and … it provides no support for a conclusion that there was an abuse of process in the present case. The formulations all differ somewhat, but in the absence of bad faith, it cannot possibly be said, for example, that something occurred here that was so gravely wrong as to make it unconscionable that a trial … should go ahead, or to make it unconscionable that the extradition proceed to enable a trial to take place. … To make out a case of abuse of process on the basis of Bennett's case, the appellant would be required, at the very least, to prove that [the deponent] deliberately set out to mislead the French Court and acted fraudulently or in bad faith". In Mokbel v Director of Public Prosecutions (Vic)122 Kaye J held that save in a very rare or exceptional case an abuse of process relating to extradition to Australia would not be made out unless there had been unlawful conduct by Australian authorities, or unlawful conduct by officers of the extraditing jurisdiction in which the Australian authorities had been complicit. Hence he held that there was no abuse of process in prosecuting a person whom the Government of Greece had decided to extradite but who, to the knowledge of the Government of Australia, had made a challenge to that decision in the European Court of Human Rights which had not yet been determined. In Director of Public Prosecutions v Mokbel123, Whelan J rejected a contention that the Australian authorities had acted unlawfully. If all that mattered was authority, it might be said that the reasoning of the House of Lords in Bennett's case is somewhat marred in the following respects. It relies124 on dissenting United States opinions rather than majority ones. It 121 (2000) 96 FCR 325 at 337-338 [34]. 122 (2008) 26 VR 1 at 17-18 [53]-[55]. 123 [2010] VSC 331 at [43]-[51]. 124 [1994] 1 AC 42 at 65-66. relies125 on the decision in S v Ebrahim, which was based on Roman-Dutch law126; and which proceeded on a different foundation from the Bennett line of authorities in denying that there was any jurisdiction to try the accused. It relies on a New Zealand decision, R v Hartley127, which one participant in that decision, Richmond P, later disavowed128. But the correctness of the assumed rule is not a question of authority; it is a question of principle. This survey reveals the following difficulties in defining the assumed rule. The first is provoked by a question linked to the circumstances of this case. What was the vice in the conduct of the Solomon Islands Government in which Australian officials were implicated? Was the vice merely the appellant's removal by an unlawful deportation? If so, there would have been no problem had the Solomon Islands Government waited for the appeal period to expire, and, if no appeal had been brought or any appeal that was brought failed, thereafter deported the appellant. Or does the vice lie in the denial to the appellant of the opportunity to enjoy the rights conferred on him by extradition procedures? If so, the consequence is that any right the Solomon Islands Government would otherwise have had to carry out its desire to deport the appellant, which could have been done lawfully, was overcome by a duty to comply with the requirements of a procedure it did not choose to employ, namely extradition. That conclusion would render wrong Lord Bingham of Cornhill CJ's acceptance in R v Staines Magistrates' Court; Ex parte Westfallen129 that there was no abuse of process when a lawful deportation took place even if extradition proceedings had not been availed of. He saw no vice where what took place "was not disguised extradition, but undisguised deportation"130. A conclusion that a decision of Lord Bingham that there had been no abuse of process – particularly since if there had been it would have been a violation of human rights – is wrong 125 [1994] 1 AC 42 at 60-61 and 65. 126 1991 (2) SA 553. The reasons for judgment of the Appellate Division are in Afrikaans, but the predominant influence of Roman-Dutch law can be seen from the headnote (at 555), the argument of the successful appellant (at 557-559), the argument of the respondent (at 561) and the Appellate Division's copious references to writings on Roman law (at 569-570) and Roman-Dutch law (at 127 [1978] 2 NZLR 199 at 216-217: see [1994] 1 AC 42 at 54-55, 66-67 and 75. 128 Moevao v Department of Labour [1980] 1 NZLR 464 at 470. 129 [1998] 1 WLR 652 at 665; [1998] 4 All ER 210 at 222-223. Hooper J agreed. 130 [1998] 1 WLR 652 at 656; [1998] 4 All ER 210 at 213. is one only to be reached after the gravest consideration. Lord Bingham's view is not consistent with some of the language in Bennett's case131. There is not available very different Lord Griffiths said considerations will arise". But why? if "extradition that Secondly, as the Full Court of the Federal Court of Australia said in Bou-Simon v Attorney-General (Cth)132, the formulations of the test "all differ somewhat". They range from the need for "deliberate abuse"133 to the need for "something so gravely wrong as to make it unconscionable that a trial should go forward, such as some fundamental disregard for basic human rights or some gross neglect of the elementary principles of fairness"134 to something as minor as well-motivated but "seriously negligent" conduct135. Thirdly, the difficulties in perceiving the relevant test are increased by the very indeterminate language employed by the authorities. Thus there are references to the "principles of the rule of law" without explanation as to how a stay order which ensures that there will be a failure to enforce the law against the accused vindicates the rule of law136. There are references to "international law", "the limits of territorial jurisdiction" and the need for "the sovereignty of states to be respected", even though the substantive laws of international law are increasingly difficult to discern137, and even though the assumed rule appears to apply as much to conduct in which the foreign jurisdiction acquiesces (as here) as it does to conduct against its wishes (as when Israeli agents seized Eichmann in violation of Argentinean sovereignty). There are references to "the comity of nations"138. How these were reconcilable with the international rule of comity 131 [1994] 1 AC 42 at 62, quoted above at [75]; see also at 68. 132 (2000) 96 FCR 325 at 337 [34]. 133 R v Martin [1998] AC 917 at 927 per Lord Lloyd of Berwick (Lords Browne-Wilkinson and Slynn of Hadley concurring). 134 R v Martin [1998] AC 917 at 946-947 per Lord Clyde. 135 Truong v The Queen (2004) 223 CLR 122 at 172 [135] per Kirby J. 136 For example, R v Hartley [1978] 2 NZLR 199 at 217 per Richmond P, Woodhouse and Cooke JJ; Bennett's case [1994] 1 AC 42 at 55, 59, 62 and 64 per Lord Griffiths, 67 per Lord Bridge of Harwich, and 76-77 per Lord Lowry. 137 For example, Bennett's case [1994] 1 AC 42 at 60 per Lord Griffiths, 64-65 per Lord Bridge of Harwich and 76 per Lord Lowry. 138 For example, Bennett's case [1994] 1 AC 42 at 76 per Lord Lowry. that the courts of one country will not sit in judgment on the acts of the government of another done within its own territory was not explained. There are references to "acts which offend the court's conscience"139, to an act which is "an affront to the public conscience"140, to what "offends the court's sense of justice and propriety"141, and to acts which "by providing a morally unacceptable foundation for the exercise of jurisdiction over the suspect taint the proposed trial"142. There are references to "basic human rights"143. There are references to "unworthy conduct"144. It has been said that the "issues … are basic to the whole concept of freedom in society."145 There are references to "the dignity and integrity of the judicial system" and to the need for the prosecution to "come to court with clean hands"146. There are references to "the public interest in the integrity of the criminal justice system"147. These exercises in rhetoric do not assist in defining the relevant test. Indeed they cast doubt on whether there is any relevant test. Conceptual problems Whatever the test is, it appears to be anomalous. In standard instances of the problem to which the test is to be applied, the officials of a foreign government will be in breach of the laws in force in the territory ruled by that government. The test turns on the secondary participation in that breach by the officials of the Australian Government. It is usually sufficient, in relation to liability for secondary participation, that the secondary participant has knowledge of the facts which make the conduct unlawful. But the test under debate appears 139 For example, Bennett's case [1994] 1 AC 42 at 76 per Lord Lowry. 140 R v Latif [1996] 1 WLR 104 at 112; [1996] 1 All ER 353 at 361. 141 For example, Bennett's case [1994] 1 AC 42 at 74 per Lord Lowry. 142 For example, Bennett's case [1994] 1 AC 42 at 76 per Lord Lowry. 143 For example, Bennett's case [1994] 1 AC 42 at 62 per Lord Griffiths. 144 For example, Bennett's case [1994] 1 AC 42 at 77 per Lord Lowry. 145 R v Hartley [1978] 2 NZLR 199 at 217 per Richmond P, Woodhouse and Cooke JJ quoted in Bennett's case [1994] 1 AC 42 at 54 per Lord Griffiths and 66 per Lord Bridge of Harwich. 146 Bennett's case [1994] 1 AC 42 at 60 per Lord Griffiths and 65 per Lord Bridge of Harwich, quoting the headnote to S v Ebrahim 1991 (2) SA 553 at 555. 147 R v Latif [1996] 1 WLR 104 at 113; [1996] 1 All ER 353 at 361. to involve "a deliberate disregard of statutory requirements"148, which implies knowledge of what the statutory requirements are and what conduct, in the particular circumstances, they compel or forbid. Then there are difficulties concerning the relationship between the conduct on which the application of the assumed rule depends and the prosecution. Are the acts in the foreign country part of the prosecution process? In Bennett's case149 Lord Bridge of Harwich said: "If a resident in another country is properly extradited here, the time when the prosecution commences is the time when the authorities here set the extradition process in motion. By parity of reasoning, if the authorities, instead of proceeding by way of extradition, have resorted to abduction, that is the effective commencement of the prosecution process and is the illegal foundation on which it rests." On the other hand, Lord Lowry thought the acts in the foreign country were not part of the prosecution process, but "the indispensable foundation for the holding of the trial."150 If an act is not part of the prosecution process, how can it be an abuse of it? There is a further doubt about the character of the assumed rule. Is it an absolute rule? Does it rest on a discretionary test151? Does it rest on a balancing test152? If it is an absolute rule, it is either a wide rule which is attracted by any illegality, however trivial, or a narrower one. If it is wide, it is undesirable because of its extreme quality. That is no doubt why many formulations of the assumed rule seek to downplay its width153. If it is less wide, it is undesirable because its indeterminacy leads to uncertainty. If it is not an absolute rule but rests on a "discretionary" test or a "balancing" test, the difficulty of predicting its application also creates uncertainty. 148 Levinge's case (1987) 9 NSWLR 546 at 564 per McHugh JA. 149 [1994] 1 AC 42 at 68. 150 [1994] 1 AC 42 at 76. 151 See Levinge's case (1987) 9 NSWLR 546 at 556. 152 See Levinge's case (1987) 9 NSWLR 546 at 565 (quoted above at [74]). 153 For example, R v Raby [2003] VSC 213 at [37] and Truong v The Queen (2004) 223 CLR 122 at 172 [136], quoted above at [79]. Drawbacks to the rule At the outset it must be remembered that the assumed rule operates even though the conduct complained of has no impact on the fairness in fact of the trial. The assumed rule prevents the trial proceeding even though it is a trial which would be fair. The proposition that in some ill-defined circumstances an indeterminate duty may apply, or a discretion may be exercised or a balancing exercise performed, in an unpredictable way, to stay a prosecution which will operate fairly is one which requires weighty justifications. That is particularly so in that while sometimes a permanent stay is a necessary remedy, it can have unsatisfactory consequences. As Brennan J said in Jago v District Court (NSW)154: "interests other than those of the litigants are involved in litigation, especially criminal litigation. The community has an immediate interest in the administration of criminal justice to guarantee peace and order in society. The victims of crime, who are not ordinarily parties to prosecutions on indictment and whose interests have generally gone unacknowledged until recent times, must be able to see that justice is done if they are not to be driven to self-help to rectify their grievances. … Refusal by a court to try a criminal case does not undo the anxiety and disability which the pendency of a criminal charge produces, but it leaves the accused with an irremovable cloud of suspicion over his head. And it is likely to engender a festering sense of injustice on the part of the community and the victim." The primary drawback of the assumed rule is that it defeats the "strong public interest" in the prosecution of criminal allegations, and the proof and punishment of crimes155. A contravention of the laws of a foreign state which results in the bringing of an accused person before the courts of another state is an evil thing. To stay the trial, however, does not right that evil. It creates a second evil – a failure to examine an allegation thought by the authorities to be sufficiently serious for examination with a view to determining whether the accused should be acquitted, or convicted and perhaps punished. The criminal is to go free because the official has blundered156. The problem for Australian courts of which this case is an illustration concerns Australian officials who seek to secure the attendance in court of persons alleged to have committed crimes – some of them extremely serious – by 154 (1989) 168 CLR 23 at 49-50; [1989] HCA 46. 155 Bennett's case [1994] 1 AC 42 at 68 per Lord Oliver of Aylmerton (dissenting). 156 See People v Defore 150 NE 585 at 587 (NYCA, 1926). becoming involved in the illegalities committed by the officials of foreign states. The defaults of Australian officials in that regard could be dealt with by the more direct means of disciplining those who do not comply with the prescribed systems and if necessary setting up better systems. It is irrational to seek to "solve" the problem by the indirect means of immunising the accused. Immunising the accused defeats justice if the charges are sound. In part justice is defeated because the accused remains free from punishment and able to commit other crimes. And in part justice is defeated because a complaint that the order of society has been disrupted is to be abandoned without resolution, so that the members of society will remain ignorant about whether the complaint had justification or not. Society has been wounded. But the wound can never be healed by the conventional processes having that function. Another drawback to the assumed rule is its possible impact on Australia's relations with friendly foreign states. In Bennett's case Lord Bridge of Harwich said157: "To hold that the court may turn a blind eye to executive lawlessness beyond the frontiers of its own jurisdiction is … an insular and unacceptable view." But the examination and condemnation of executive lawlessness in which officials of a foreign state participate would tend to create considerable diplomatic difficulties for the Executive in dealing with that foreign state. The conduct of diplomacy and foreign policy is a field which traditional thinking sees as committed to the Executive, not the judiciary. One cannot conclude that an official of the prosecuting jurisdiction was involved in an illegality in the foreign jurisdiction from which the accused is brought without examining the question whether there was an illegality in the foreign jurisdiction. If investigation of that question is offensive to the foreign state, it is offensive whether or not an official of the prosecuting state was also involved. And the examination and condemnation of executive lawlessness in which officials of a foreign state participate in circumstances where neither the officials nor their state are represented is contrary to natural justice. A further drawback to the assumed rule is that it draws an anomalous distinction. It is a distinction between misconduct abroad and misconduct within the jurisdiction. Lord Oliver of Aylmerton asked, in his dissenting speech in Bennett's case, whether there is "some special quality attaching to the unlawful and abusive activity abroad which confers or ought to confer on the criminal court a discretion which it would not otherwise possess"158. He went on159: 157 [1994] 1 AC 42 at 67. 158 [1994] 1 AC 42 at 71. 159 [1994] 1 AC 42 at 72. "The matter can, perhaps, best be illustrated by a hypothetical example of two terrorists, A and B, who, having detonated a bomb in London, make their way to Dover with a view to escaping abroad. A, as a result of a quarrel with a ticket inspector, is wrongfully detained by the railway police and whilst still in wrongful custody is duly arrested for the terrorist offence and subsequently charged. B, having successfully boarded a Channel ferry, is recognised as he steps ashore in Calais by two off-duty constables returning from holiday who seize him on the quayside and take him back on board keeping him under restraint until the ferry returns to Dover where he is arrested and charged. Now nobody would, I think, suggest for a moment that the trial of A should not proceed, simply because, as a result of a wrongful arrest and detention, he has been prevented from making good his escape, although he has in fact been put in the position of being charged and brought to trial only by reason of an unlawful abuse of executive power. What, then, distinguishes the case of B and confers on the criminal court in his case a discretion to stay his trial and discharge him which the court … does not possess in the case [of] Lord Lowry dealt with the problem of A by saying160: "A person wrongfully arrested here can seek release by applying for a writ of habeas corpus but, once released, can be lawfully arrested, charged and brought to trial. His earlier wrongful arrest is not essentially connected with his proposed trial and the proceedings against him will not be stayed as an abuse of process." This is both artificial and unrealistic. There are some types of wrongful arrest without which there could never be a later prosecution. Depending on the strength of the case and other relevant factors, it is not likely that a person accused of a terrorism offence, even if the initial arrest had been unlawful, would be released, with all the risk of absconding that that course would bring. If that release were likely, it would be scandalous. Lord Oliver denied that the distinction he criticised could be explained on the basis that to engage in unlawful activity abroad which brings a suspected offender before an English court infringes a "right" in English law possessed by the suspected offender. He said161: 160 [1994] 1 AC 42 at 77. 161 [1994] 1 AC 42 at 73. "It is not suggested for a moment that if, as a result of perhaps unlawful police action abroad – for instance, in securing the deportation of the accused without proper authority – in which officers of the United Kingdom authorities are in no way involved, an accused person is found here and duly charged, the illegality of what may have occurred abroad entitles the criminal court here to discontinue the prosecution and discharge the accused. Yet in such a case the advantage which the accused might have derived from the extradition process is likewise destroyed. No 'right' of his in English law has been infringed, though he may well have some remedy in the foreign court against those responsible for his wrongful deportation. What is said to make the critical difference is the prior involvement of officers of the executive authorities of the United Kingdom. But the arrest and detention of the accused are not part of the trial process upon which the criminal court has the duty to embark. Of course, executive officers are subject to the jurisdiction of the courts. If they act unlawfully, they may and should be civilly liable. If they act criminally, they may and should be prosecuted. But I can see no reason why the antecedent activities, whatever the degree of outrage or affront they may occasion, should be thought to justify the assumption by a criminal court of a jurisdiction to terminate a properly instituted criminal process which it is its duty to try." With respect, this reasoning is sound. The assumed rule is also defective in drawing another anomalous distinction. It is the distinction between misconduct in which officials of the prosecuting state are involved and misconduct in which they are not involved but of which circumstances permit them to take advantage. Lord Lowry said that the court in which the prosecution takes place "is not concerned with irregularities abroad in which our executive … was not involved"162. But if the court is concerned with the "irregularities" abroad of its own officials, why is the court not concerned with "irregularities" in which its own officials were not involved? Why is it necessary that the Executive of the prosecuting state be involved in "irregularities"163? What is the relevant difference between a deportation or extradition which entails an illegality for which the prosecuting state had no responsibility and of which it did not know before the accused arrived in the place of trial, and one which involves an illegality for which it did have responsibility and of which it had knowledge? Either way the prosecuting state is taking advantage of an illegality. Either way, there is an infringement of the 162 [1994] 1 AC 42 at 77. 163 [1994] 1 AC 42 at 77 per Lord Lowry. "rule of law", a failure to "maintain the purity of the stream of justice"164, an act offensive to "conscience" and to "the court's sense of justice and propriety", "unworthy conduct"165, and so forth. In short, the assumed rule goes either too far or not far enough. Its logic suggests that it applies to any illegality in a foreign jurisdiction, whether officials in the prosecuting jurisdiction were involved in it or not. If it went as far as its logic suggests, it would create such serious diplomatic difficulties in relation to foreign jurisdictions that had acquiesced in or procured what had been done as to point against its existence in any form. "Public confidence" and "disrepute" The assumed rule is sometimes expressed in terms of whether a particular use of the court's procedures would bring the administration of justice into "disrepute"166. Sometimes the assumed rule is expressed as being based on the need to avoid an erosion of public confidence or community confidence. Thus in Levinge's case Kirby P inclined "towards a preference" for the view that the conceptual basis of the assumed rule included an entitlement in the courts "to uphold [the] integrity of [the court's process] and the perception of it in the eyes … of the community"167. Allegations that particular rules promote or damage "public confidence" in the courts are common. The question whether there is diminution in public confidence in the integrity of the judiciary as an institution has been relied on in various fields. One is whether the conferment on a judge of non-judicial power as persona designata is incompatible with the proper discharge of judicial responsibilities168. Another field is legislation providing for preventive 164 [1994] 1 AC 42 at 77 per Lord Lowry. 165 See the expressions collected at [86] above. 166 See Rogers v The Queen (1994) 181 CLR 251 at 286 per McHugh J; [1994] HCA 167 (1987) 9 NSWLR 546 at 557. 168 Grollo v Palmer (1995) 184 CLR 348 at 365-368, 376-378, 380 and 395; [1995] HCA 26. See further Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1 at 12, 14-16, 21-22, 24-26, 28, 46 and 49; [1996] HCA 18; Wainohu v New South Wales (2011) 243 CLR 181 at 201 [29], 205-206 [38], 225-226 [94]; [2011] HCA 24. detention169. Another field is the giving by courts of fair hearings170. Another field is the doctrine in Kable v Director of Public Prosecutions (NSW)171. There are other areas in which public confidence in the administration of justice is said to be relevant. One is the validity of legislation relating to federal courts and tribunals172. Another is the binding quality of judgments and orders made without jurisdiction173. Another is the rule that courts generally sit in public174. Another relates to public confidence as a hallmark of judicial power175. Another is the re-litigation in criminal proceedings of issues decided in earlier criminal proceedings176. Another is the immunity of barristers from actions for in-court negligence177. Another field is the abuse of process which arises when legal processes are used for purposes alien to their proper purposes178. Public confidence is a factor relevant to whether there should be a permanent stay of 169 Thomas v Mowbray (2007) 233 CLR 307 at 432 [357] and 478 [512]; [2007] HCA 170 Cesan v The Queen (2008) 236 CLR 358 at 380-382 [71]-[76] and 386 [88]; [2008] HCA 52. 171 (1996) 189 CLR 51 at 98, 107-108, 116-118, 124 and 133; [1996] HCA 24. See Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 593 [23] and 638 [166]; [2004] HCA 46; Baker v The Queen (2004) 223 CLR 513 at 519 [6] and 541 [75]; [2004] HCA 45. 172 Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 52, 91, 102 and 104; [1992] HCA 46. 173 Residual Assco Group Ltd v Spalvins (2000) 202 CLR 629 at 661 [79]; [2000] HCA 33. 174 Hogan v Hinch (2011) 85 ALJR 398 at 406 [20]; 275 ALR 408 at 414; [2011] HCA 4. 175 Westport Insurance Corporation v Gordian Runoff Ltd (2011) 85 ALJR 1188 at 1194 [20]; 281 ALR 593 at 599; [2011] HCA 37. 176 Rogers v The Queen (1994) 181 CLR 251 at 257 and 280. 177 D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at 34-35 [97], 39 [105], 42 [113], 49-50 [144] and 56 [166]; [2005] HCA 12. 178 Jago v District Court (NSW) (1989) 168 CLR 23 at 30; Williams v Spautz (1992) 174 CLR 509 at 520; [1992] HCA 34. criminal proceedings on the ground of delay by the prosecution179 or a professional disciplinary body180. Another field is the unsatisfactoriness of granting too readily orders permanently staying criminal proceedings181. Another field concerns the question whether legislation demeans the integrity of court processes182. Another is the exclusion of evidence of crimes incited by police officers, and the permanent staying of the prosecutions for those crimes183. Another field relates to State legislation validating ineffective judgments184. Another field is the rule that courts must act impartially and be seen to do so185. There are many more. "Public confidence", considered as a criterion of statutory validity in relation to the Kable doctrine, is in retreat186. There are various other difficulties with appeals to "public confidence"187. The expression is tending to become an automatic reflex, to be used in almost any context in which an attempt is made to stimulate a vague feeling of goodwill, just as restaurant owners cannot answer any question about their restaurants without referring to "fresh ingredients". The expression is beginning to lack meaning. It usually postpones or evades problems. It does not face them or solve them. At least that is so in this particular field. What does "public confidence" mean? What does "disrepute" 179 Jago v District Court (NSW) (1989) 168 CLR 23 at 30; Ridgeway v The Queen (1995) 184 CLR 19 at 76; [1995] HCA 66. 180 Walton v Gardiner (1993) 177 CLR 378 at 396; [1993] HCA 77. 181 Jago v District Court (NSW) (1989) 168 CLR 23 at 50. 182 Nicholas v The Queen (1998) 193 CLR 173 at 224 [120], 256 [201] and 265 [213]; [1998] HCA 9. 183 Ridgeway v The Queen (1995) 184 CLR 19 at 77, 83, 85 and 88. 184 Re Macks; Ex parte Saint (2000) 204 CLR 158 at 193 [80]-[81]; [2000] HCA 62. 185 R v Watson; Ex parte Armstrong (1976) 136 CLR 248 at 263; [1976] HCA 39; Johnson v Johnson (2000) 201 CLR 488 at 492-493 [12]; [2000] HCA 48; Ebner v Official Trustee (2000) 205 CLR 337 at 359 [65] and 363 [81]; [2000] HCA 63. 186 Baker v The Queen (2004) 223 CLR 513 at 542-543 [79]-[80]; Forge v Australian Securities and Investments Commission (2006) 228 CLR 45 at 122 [194] and 149 [274]; [2006] HCA 44; South Australia v Totani (2010) 242 CLR 1 at 49-50 [73], 82 [206], 96 [245]; [2010] HCA 39. 187 South Australia v Totani (2010) 242 CLR 1 at 96 [245] n 391; Wainohu v New South Wales (2011) 243 CLR 181 at 248-249 [174]-[176]. mean? Among which members of the public is disrepute, or a rise or fall in confidence, to be searched for or avoided? Might it not be better for courts not to keep looking over their shoulders by worrying about their reputation or any perceived level of confidence in them? Should they not rather simply concentrate on doing their job diligently, carefully, honestly and independently, whatever the public or the community think? To answer the first question "the trust reposed constitutionally in the courts to protect the integrity and fairness of their processes" is novel. It tends to contradict the hypothesis on which the assumed rule rests, namely that there will be no unfairness in the process of trial before the Queensland courts. It does not explain how the integrity of those courts could credibly be challenged. Even if public confidence analysis is relevant, it does not follow that it supports the existence of the assumed rule. While the assumed rule is said to be supported by the need to maintain public confidence in the administration of justice, it could actually diminish that confidence. As Brennan J said in Jago v District Court (NSW)188: "If permanent stay orders were to become commonplace, it would not be long before courts would forfeit public confidence. The granting of orders for permanent stays would inspire cynicism, if not suspicion, in the public mind." If "public confidence" refers to the opinions of members of the public, taken individual by individual, no doubt many people would support the assumed rule. But many others – perhaps a majority – would reject it because of the considerations referred to by Brennan J. Justifications for the rule The explanations and justifications given for the assumed rule are unconvincing. Examples can be found in the vagueness of the rhetorical expressions quoted above189. Another justification sometimes given is deterrence. Thus the English Court of Appeal said190: 188 (1989) 168 CLR 23 at 50. 189 See above at [86]. 190 R v Mullen [2000] QB 520 at 535-536. "The need to discourage such conduct on the part of those who are responsible for criminal prosecutions is a matter of public policy to which … very considerable weight must be attached." In the same vein, in Bennett's case Lord Lowry said that a stay "will not only be a sign of judicial disapproval but will discourage similar conduct in future"191. But which is more likely to deter: the grant of a stay, which has no direct impact on the officials responsible for the impugned conduct, or vigorous disciplinary action against them – financial penalties, demotion, dismissal, even criminal sanctions? It is sometimes said that the grant of a stay expresses the court's disapproval of the impugned conduct192. But Lord Lowry said: "The discretion to stay is not a disciplinary jurisdiction and ought not to be exercised in order to express the court's disapproval of official conduct."193 What, then, is the point of the assumed rule? Another point was raised by the New Zealand Court of Appeal. Richmond P, Woodhouse and Cooke JJ said194: "this must never become an area where it will be sufficient to consider that the end has justified the means." That statement has particular significance, having been quoted by Kirby P in Levinge's case195 and Lord Griffiths in Bennett's case196. The statement would have its greatest force if the officers responsible for launching and continuing the prosecution of the appellant, for example, were the officers involved in a breach of Solomon Islands law. But the lucid exposition of the factual circumstances in this appeal by the majority does not show that that was the case here. The circumstances do not suggest either that those in charge of the prosecution knew what was happening in the Solomon Islands in the last days of December 2007, or, that if they did, they appreciated that the behaviour of the Solomon Islands Government was in contravention of a local statute, and, worse, of Magistrate Lelapitu's order staying the execution of the deportation order, and in particular her order that the defendants before her not enter the appellant's house or 191 [1994] 1 AC 42 at 77. 192 For example, R v Raby [2003] VSC 213 at [37]: see above at [79]. See also Bennett's case [1994] 1 AC 42 at 62. 193 [1994] 1 AC 42 at 74. 194 R v Hartley [1978] 2 NZLR 199 at 217. 195 (1987) 9 NSWLR 546 at 555-556. 196 [1994] 1 AC 42 at 54. approach the appellant. More fundamentally, however, the need not to let the end justify the means cannot support the assumed rule. That is because the means are incapable of justification. The question is what should be done given that unjustifiable means have been employed. One branch of government – the legislature – has enacted a command that a norm of conduct be complied with, backed that command with a sanction, imposed a duty on another branch of government – the executive – to investigate and prosecute alleged breaches of that command, and imposed on a third branch of government – the judiciary – the duty to decide whether the command has been disobeyed and whether the sanction should be imposed. Certain members of the second branch of government, the executive – state officials carrying out the duties of investigative and prosecuting authorities – have decided that a sufficient case exists to put a person accused of disobeying the command on trial. The third branch of government – the judiciary – is invited to frustrate the enforcement of the legislative command, to nullify the prosecuting authorities' decision, and to refuse to carry out its duty to try the case. The invitation is advanced not because the case against the accused is weak. It is not advanced because there would be any unfairness at the trial. Instead the invitation is advanced because certain officials who may be quite unconnected with the state officials responsible for the decision to investigate and prosecute have behaved in a particular way. A rule of law which holds that the judiciary should decline the invitation does not treat the end as justifying the means. It merely ensures that the accident of evil means should not disrupt the fulfilment of a just end. It ensures that a second evil will not be added to the first. It ensures that the judiciary will carry out its duty. Order The appeal should be dismissed. The respondent did not seek a costs order, and none should be made.

HIGH COURT OF AUSTRALIA THE COMMONWEALTH OF AUSTRALIA PLAINTIFF AND THE AUSTRALIAN CAPITAL TERRITORY DEFENDANT The Commonwealth v Australian Capital Territory [2013] HCA 55 12 December 2013 ORDER The questions reserved for determination by the Full Court on 4 November 2013 be answered as follows: Is the Marriage Equality (Same Sex) Act 2013 (ACT), in part or in its entirety: inconsistent with the Marriage Act 1961 (Cth) within the meaning of s 28(1) of the Australian Capital Territory (Self- Government) Act 1988 (Cth); and/or repugnant to the Marriage Act 1961 (Cth)? Answer: The whole of the Marriage Equality (Same Sex) Act 2013 (ACT) is inconsistent with the Marriage Act 1961 (Cth). If the answer to question 1(a) is "yes", to what extent, if any, is the Marriage Equality (Same Sex) Act 2013 (ACT) of no effect? Answer: The whole of the Marriage Equality (Same Sex) Act 2013 (ACT) is of no effect. If the answer to question 1(b) is "yes", to what extent, if any, is the Marriage Equality (Same Sex) Act 2013 (ACT) void? Answer: This question need not be answered. Is the Marriage Equality (Same Sex) Act 2013 (ACT), in part or in its entirety: inconsistent with the Family Law Act 1975 (Cth) within the meaning of s 28(1) of the Australian Capital Territory (Self- Government) Act 1988 (Cth); and/or repugnant to the Family Law Act 1975 (Cth)? Answer: This question need not be answered. If the answer to question 4(a) is "yes", to what extent, if any, is the Marriage Equality (Same Sex) Act 2013 (ACT) of no effect? Answer: This question need not be answered. If the answer to question 4(b) is "yes", to what extent, if any, is the Marriage Equality (Same Sex) Act 2013 (ACT) void? Answer: This question need not be answered. In light of the answers to the preceding questions what, if any, orders should be made for the final disposition of these proceedings? Answer: There should be judgment for the plaintiff for a declaration that the whole of the Marriage Equality (Same Sex) Act 2013 (ACT) is inconsistent with the Marriage Act 1961 (Cth) and of no effect. What orders should be made in relation to costs of the questions reserved and of the proceedings generally? Answer: The defendant should pay the plaintiff's costs of the questions reserved and of the proceedings generally. Representation J T Gleeson SC, Solicitor-General of the Commonwealth with M P Kearney SC, G A Hill and C L Lenehan for the plaintiff (instructed by Australian Government Solicitor) P J F Garrisson SC, Solicitor-General for the Australian Capital Territory and K L Eastman SC with H Younan for the defendant (instructed by ACT Government Solicitor) J K Kirk SC for Australian Marriage Equality Inc, as amicus curiae (instructed by Human Rights Law Centre) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS The Commonwealth v Australian Capital Territory Constitutional law (Cth) – Powers of federal Parliament – Section 51(xxi) – Marriage – Whether s 51(xxi) confers power with respect to same sex marriage. Territories (ACT) – Inconsistency of Commonwealth and Territory laws – Marriage Act 1961 (Cth) defined "marriage" as "the union of a man and a woman" – Marriage Equality (Same Sex) Act 2013 (ACT) provided for "marriage" between "2 people of the same sex" – Whether ACT Act capable of operating concurrently with Commonwealth Act under s 28(1) of Australian Capital Territory (Self-Government) Act 1988 (Cth). Words and phrases – "consistent ... to the extent that it is capable of operating concurrently", "marriage". Constitution, ss 51(xxi), 51(xxii). Australian Capital Territory (Self-Government) Act 1988 (Cth), s 28(1). Marriage Act 1961 (Cth), ss 5(1), 88EA. Marriage Amendment Act 2004 (Cth). Marriage Equality (Same Sex) Act 2013 (ACT), s 3, dictionary. FRENCH CJ, HAYNE, CRENNAN, KIEFEL, BELL AND KEANE JJ. The only issue which this Court can decide is a legal issue. Is the Marriage Equality (Same Sex) Act 2013, enacted by the Legislative Assembly for the Australian Capital Territory, inconsistent with either or both of two Acts of the federal Parliament: the Marriage Act 1961 and the Family Law Act 1975? That question must be answered "Yes". Under the Constitution and federal law as it now stands, whether same sex marriage should be provided for by law (as a majority of the Territory Legislative Assembly decided) is a matter for the federal Parliament. The Commonwealth, the Territory and Australian Marriage Equality Inc (as amicus curiae) all submitted that the federal Parliament has legislative power to provide for marriage between persons of the same sex. That submission is right and should be accepted. As the title of the ACT Act indicates, its object is to provide for marriage equality for same sex couples, not for some form of legally recognised relationship which is relevantly different from the relationship of marriage which the federal laws provide for and recognise. The Marriage Act does not now provide for the formation or recognition of marriage between same sex couples. The Marriage Act provides that a marriage can be solemnised1 in Australia only between a man and a woman and that a union solemnised in a foreign country between a same sex couple must not be recognised2 as a marriage in Australia. Those provisions of the ACT Act which provide for marriage under that Act are not capable of operating concurrently with the Marriage Act. Because the ACT Act does not validly provide for the formation of same sex marriages, its provisions about the rights of parties to such marriages and the dissolution of such marriages cannot have separate operation and are also of no effect. Questions of inconsistency between the property and dissolution provisions of the ACT Act and the Family Law Act are not reached. The whole of the ACT Act is of no effect. 1 Pt IV (ss 25-59) read with the definition of "marriage" in s 5(1) as "the union of a man and a woman to the exclusion of all others, voluntarily entered into for life". s 88EA. Hayne Crennan Bell To explain this conclusion it is necessary first to consider s 51(xxi) of the Constitution and the ambit of the federal legislative power with respect to marriage, second to identify what the ACT Act provides and finally to consider whether the ACT Act can operate concurrently with the two federal Acts. Federal legislative power with respect to same sex marriage Section 51(xxi) of the Constitution gives the federal Parliament power to make laws with respect to "marriage". Section 51(xxii) gives the Parliament legislative power with respect to "divorce and matrimonial causes; and in relation thereto, parental rights, and the custody and guardianship of infants". Both powers were included in the Constitution to avoid what the framers saw3 as a great defect in the United States Constitution. The object of the powers was to enable the federal Parliament to provide uniform laws governing marriage and divorce. That this object was not fully realised for more than half a century, by the enactment of first the Matrimonial Causes Act 1959 (Cth)4 and then the Marriage Act, should not obscure the national purpose for granting the powers to the federal Parliament. For the purposes of this case, chief attention must be directed to the marriage power in s 51(xxi). Although the Commonwealth and the Territory both submitted that s 51(xxi) gives the federal Parliament power to make a law providing for same sex marriage, their submissions do not determine that question. Parties cannot determine the proper construction of the Constitution by agreement or concession. This Court must decide whether s 51(xxi) permits the federal Parliament to make a law with respect to same sex marriage because the ACT Act would probably operate concurrently with the Marriage Act if the federal Parliament 3 Official Record of the Debates of the Australasian Federal Convention, (Sydney), 22 September 1897 at 1080. 4 None of the earlier federal matrimonial causes legislation (Matrimonial Causes (Expeditionary Forces) Act 1919 (Cth), Matrimonial Causes Act 1945 (Cth), Matrimonial Causes Act 1955 (Cth) or Marriage (Overseas) Act 1955 (Cth)) superseded the relevant laws of the States and Territories dealing with divorce and matrimonial causes. Hayne Crennan Bell had no power to make a national law5 providing for same sex marriage. If the federal Parliament did not have power to make a national law with respect to same sex marriage, the ACT Act would provide for a kind of union which the federal Parliament could not legislate to establish. By contrast, if the federal Parliament can make a national law providing for same sex marriage, and has provided that the only form of marriage shall be between a man and a woman, the two laws cannot operate concurrently. These reasons will show that the Commonwealth and the Territory were right to submit that s 51(xxi) gives the federal Parliament power to pass a law providing for same sex marriage. All arguments to the contrary of the conclusion that s 51(xxi) would support a law providing for same sex marriage begin by referring to what is asserted to have been the settled understanding of the meaning of "marriage" at the time of federation. It is said that, at federation, "marriage" was well understood to have the meaning given to it by several nineteenth century English cases and that the reference to "marriage" in s 51(xxi) must be read accordingly. That is, reference is made to the nineteenth century judicial definitions of marriage on the footing that s 51(xxi) uses a legal term of art, the particular content of which is fixed according to its usage at the time of federation. This understanding of s 51(xxi) is reflected in Quick and Garran's treatment6 of the power and, in particular, their reference to In re Bethell; Bethell v Hildyard7. Quick and Garran said8 that this case showed that "[a]ccording to the law of England a marriage is a union between a man and a woman on the throughout same basis as Christendom, and its essence is that it is (1) a voluntary union, (2) for life, (3) of that on which is recognized institution the In the sense of a law "of general application throughout the whole of the Commonwealth and its territories": Spratt v Hermes (1965) 114 CLR 226 at 278 per Windeyer J; [1965] HCA 66. See also Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 221-222 per Gaudron J; [1992] HCA 45. 6 The Annotated Constitution of the Australian Commonwealth, (1901) at 608-609. (1888) 38 Ch D 220. 8 The Annotated Constitution of the Australian Commonwealth, (1901) at 608. Hayne Crennan Bell one man and one woman, (4) to the exclusion of all others." Reference might also have been made (and now commonly is made) to the earlier decision of Lord Penzance in Hyde v Hyde and Woodmansee and the statement9 that "marriage, as understood in Christendom, may for this purpose be defined as the voluntary union for life of one man and one woman, to the exclusion of all others". Two series of points must be made about this use of such definitions of marriage: the first about constitutional interpretation, the second about the cases which are relied on as providing the relevant definition. Interpreting s 51(xxi) (the marriage power) The utility of adopting or applying a single all-embracing theory of constitutional interpretation has been denied10. This case does not require examination of those theories or the resolution of any conflict, real or supposed, between them. The determinative question in this case is whether s 51(xxi) is to be construed as referring only to the particular legal status of "marriage" which could be formed at the time of federation (having the legal content which it had according to English law at that time) or as using the word "marriage" in the sense of a "topic of juristic classification"11. For the reasons that follow, the latter construction should be adopted. Debates cast in terms like "originalism" or "original intent" (evidently intended to stand in opposition to "contemporary meaning"12) with their echoes of very different debates in other jurisdictions are not to the point and serve only to obscure much more than they illuminate. In Attorney-General (Vict) v The Commonwealth ("the Marriage Act Case"), Windeyer J rightly emphasised13 that the scope of the powers which the (1866) LR 1 P & D 130 at 133. See also Warrender v Warrender (1835) 2 Cl & F 10 SGH Ltd v Federal Commissioner of Taxation (2002) 210 CLR 51 at 75 [41]-[42] per Gummow J; [2002] HCA 18. 11 Attorney-General (Vict) v The Commonwealth (1962) 107 CLR 529 at 578 per Windeyer J; [1962] HCA 37. 12 cf Grain Pool of Western Australia v The Commonwealth (2000) 202 CLR 479 at 522-525 [110]-[118] per Kirby J; [2000] HCA 14. 13 (1962) 107 CLR 529 at 576. Hayne Crennan Bell Constitution gives is "not to be ascertained by merely analytical and a priori reasoning from the abstract meaning of words". (Although Windeyer J dissented from some of the conclusions reached by the Court in the Marriage Act Case, this approach to constitutional construction is wholly orthodox14.) No doubt, as Windeyer J observed15, the Constitution was "written in language expressive of the concepts of [English] law" and "[c]onstitutional interpretation is affected by established usages of legal language." But when s 51(xxi) gives the Parliament legislative power with respect to "marriage", it gives legislative power with respect to a status, reflective of a social institution, to which legal consequences attach and from which legal consequences follow. In the Marriage Act Case, Dixon CJ said16 of s 51(xxi) that it covers "the status of the married parties", that is, "the particular legal position they hold by reason of their married state". His Honour continued17, "'marriage' is considered as the source of the mutual rights and of the legal consequences which flow from it but requiring the definition, the support and the enforcement of the federal law". The status of marriage, the social institution which that status reflects, and the rights and obligations which attach to that status never have been, and are not now, immutable. Section 51(xxi) is not to be construed as conferring legislative power on the federal Parliament with respect only to the status of marriage, the institution reflected in that status, or the rights and obligations attached to it, as they stood at federation. One obvious change in the social institution of marriage which had occurred before federation is revealed by reference to the elements which Quick and Garran described as being of the "essence" of marriage, namely that the union be "the voluntary union for life of one man and one woman to the exclusion of all others"18 (emphasis added). By the time of federation, marriage 14 See, for example, Attorney-General for NSW v Brewery Employés Union of NSW (1908) 6 CLR 469 at 610-612 per Higgins J; [1908] HCA 94; Grain Pool (2000) 202 CLR 479 at 492-495 [16]-[22] per Gleeson CJ, Gaudron, McHugh, Gummow, 15 (1962) 107 CLR 529 at 576. 16 (1962) 107 CLR 529 at 543. 17 (1962) 107 CLR 529 at 543. 18 Bethell v Hildyard (1888) 38 Ch D 220 at 234. Hayne Crennan Bell could be dissolved by judicial decree of the civil courts. With the enactment of the Matrimonial Causes Act 1857 (UK)19, and equivalent legislation in the Australian colonies20, marriage became a voluntary union entered into for life. It was no longer a union for life. These legislative changes altered the social institution of marriage in ways which have continued to play out, not only before federation but ever since. The legal rights and obligations attaching to the status of marriage, once indissoluble, could be dissolved. Upon judicial separation, the wife had21 rights different from her rights during marriage. Upon dissolution, new rights and obligations could be created22 by order or undertaken by remarriage. The particular detail of these changes is not important. What is important is the observation that neither the social institution of marriage nor the rights and obligations attaching to the status of marriage (or condition of being married) were immutable. More generally, it is essential to recognise that the law relating to marriage, as it stood at federation, was the result of a long and tangled development. Whether that development is usefully traced to canon law before the Council of Trent (as Windeyer J did23 in the Marriage Act Case) or to Roman law (as the Commonwealth's submissions sought to do) need not be decided. It is enough to notice that, in the Marriage Act Case, Windeyer J referred24 to some of the more important legislative changes made between 1540 and 1857. And the consequence of those changes was that, by the time of federation, the law relating to marriage was largely statutory. As Windeyer J said25: 19 20 & 21 Vict c 85. 20 Matrimonial Causes Act 1873 (NSW); Divorce and Matrimonial Causes Act 1861 (Vic); Matrimonial Causes Act 1858 (SA); Matrimonial Causes Jurisdiction Act 1864 (Q); Matrimonial Causes Ordinance 1863 (WA); Matrimonial Causes Act 1860 (Tas). 21 Matrimonial Causes Act 1857, ss 25 and 26. 22 Matrimonial Causes Act 1857, s 32. 23 (1962) 107 CLR 529 at 578. 24 (1962) 107 CLR 529 at 578-580. 25 (1962) 107 CLR 529 at 579. Hayne Crennan Bell "The statute law of marriage may seem to be in a small compass. But it embodies the results of a long process of social history, it codifies much complicated learning, it sets at rest some famous controversies." (emphasis added) Because the status, the rights and obligations which attach to the status and the social institution reflected in the status are not, and never have been, immutable, there is no warrant for reading the legislative power given by s 51(xxi) as tied to the state of the law with respect to marriage at federation. Tying the ambit of the head of power to the then state of the law would fail to recognise that, as Higgins J said26 in Attorney-General for NSW v Brewery Employés Union of NSW ("the Union Label Case"), it is necessary to construe the Constitution remembering that "it is a Constitution, a mechanism under which laws are to be made, and not a mere Act which declares what the law is to be". Not only that, it would fail to recognise that, as Windeyer J demonstrated27 in the Marriage Act Case, "[m]arriage can have a wider meaning for law" than the meaning given in Hyde v Hyde. The definition in Hyde v Hyde was proffered28 as a statement of "essential elements and invariable features" in answer to the question "What, then, is the nature of this institution as understood in Christendom?" The answer to that question cannot be the answer to the question "What is the nature of the subject matter of the marriage power in the Australian Constitution?" It may readily be accepted that what Windeyer J described29 as "the monogamous marriage of Christianity" would have provided, at federation, the central type of "marriage" with respect to which s 51(xxi) conferred legislative power. But, as Higgins J said30 in relation to the trade marks power, usage of the term in 1900 may give the centre of the power but "it does not give us the 26 (1908) 6 CLR 469 at 612. See also Australian National Airways Pty Ltd v The Commonwealth (1945) 71 CLR 29 at 81; [1945] HCA 41; Grain Pool (2000) 202 CLR 479 at 493-495 [19]-[20]; cf McCulloch v Maryland 17 US 316 at 407 (1819). 27 (1962) 107 CLR 529 at 577. 28 (1866) LR 1 P & D 130 at 133. 29 (1962) 107 CLR 529 at 577. 30 Union Label Case (1908) 6 CLR 469 at 610. Hayne Crennan Bell circumference of the power" (emphasis added). Hence, as Windeyer J rightly said31 in the Marriage Act Case, "[m]arriage law is not a matter of precise demarcation". It is, instead, "a recognized topic of juristic classification". One of the several examples which Higgins J gave32 in amplification of the proposition that the boundaries of the class of trade marks and other subjects referred to in s 51(xviii)33 were not fixed according to the state of the law in 1900 was the marriage power. Higgins J said34 that under the marriage power "the Parliament could prescribe what unions are to be regarded as marriages". The reasons given by Higgins J for rejecting the argument that the boundaries of the power to make laws with respect to trade marks were fixed according to the state of the law in 1900 apply equally to the marriage power. To adopt and adapt what Higgins J said35 in respect of the trade marks power, if s 51(xxi) uses "marriage" in a sense tied to the state of the law in 1900: "In place of Australia having by its Constitution acquired for the Australian Parliament the power of dealing with the whole subject [of marriage], it turns out that the Federal Parliament can deal only with [marriage having the characteristics and consequences it had] in 1900, and that each of the States separately must deal with the other parts of the subject." (emphasis added) Also apposite to the marriage power, at least by way of analogy, is the observation36 by Higgins J, quoted37 by six Justices of this Court in Grain Pool of Western Australia v The Commonwealth: 31 (1962) 107 CLR 529 at 578. 32 (1908) 6 CLR 469 at 610. 33 "Copyrights, patents of inventions and designs, and trade marks". 34 (1908) 6 CLR 469 at 610. 35 (1908) 6 CLR 469 at 603. 36 (1908) 6 CLR 469 at 611. 37 (2000) 202 CLR 479 at 494 [20]. Hayne Crennan Bell "Power to make laws as to any class of rights involves a power to alter those rights, to define those rights, to limit those rights, to extend those rights, and to extend the class of those who may enjoy those rights." What then is the relevant "topic of juristic classification"? Accepting that it "is not a matter of precise demarcation", it is sufficient, for the purposes of this case, to adopt the description of the topic given38 by Windeyer J in the Marriage Act Case: laws of a kind "generally considered, for comparative law and private international law, as being the subjects of a country's marriage laws". This description does not confine the topic to marriage as it was understood in nineteenth century England or Australia. It recognises that the law of marriage relates to personal status and that marriage is a status of differing content in different systems of law. It also gives due weight to the observation that marriage is a status which Anglo-Australian choice of law rules have always treated as being created and governed (in at least some cases) by foreign law, whether the law of the place of celebration of the marriage or the law of the domicile of the parties. The description given by Windeyer J identifies the content of the relevant topic of juristic classification in a way which does not fix either the concept of marriage or the content and application of choice of law rules according to the state of the law at federation. Something more should be said about the nineteenth century cases "defining" marriage. The nineteenth century cases The cases commonly referred to as providing a definition of "marriage" in s 51(xxi) of the Constitution must be read in the light of the issues decided in those cases. Each case dealt with a particular question about either succession to property or the jurisdiction of the English courts to grant a decree of dissolution in cases concerning a marriage contracted in, and governed by the law of, a foreign country. Bethell v Hildyard39 concerned succession to property by the child of a marriage contracted by an English man in Bechuanaland with a Baralong woman 38 (1962) 107 CLR 529 at 578. 39 (1888) 38 Ch D 220. Hayne Crennan Bell according to the customs of the Baralong people. The marriage was held not to be a valid marriage according to the law of England because the customs of the Baralong people permitted polygamy. The child was held not entitled to succeed to her father's property. What was said in Hyde v Hyde40 was directed to the construction of the statute which conferred41 jurisdiction on the Court for Divorce and Matrimonial Causes to grant a decree of dissolution of marriage. The marriage which the petitioner sought to dissolve had been formed in what was then the Territory of Utah. The law which governed the marriage permitted the husband to take a second wife. The Hyde v Hyde definition was proffered in the course of identifying the difficulties that would have been encountered in seeking to apply the statute (including, as it then did42, the matrimonial offence of adultery) to a potentially polygamous marriage. Observing that, at federation, English law would recognise as a marriage only a union having the characteristics described in Hyde v Hyde, and would not provide matrimonial remedies in respect of any other kind of union, accurately describes the then state of the law. But the definitions of marriage given in Hyde v Hyde and similar nineteenth century cases governed what kinds of marriage contracted in a foreign jurisdiction would be treated as yielding the same or similar rights and consequences as a marriage contracted in England in accordance with English law. They were cases which necessarily accepted that there could be other kinds of relationship which could properly be described as "marriage" and the cases sought to deal with that observation by confining the kinds of marriage which would be recognised in English law to those which closely approximated a marriage contracted in England under English law. The great conflict of laws writer, A V Dicey, described43 the rule which was adopted in the cases as an "instance of the principle that the rules of (so-called) private international law apply only amongst Christian states". The 40 (1866) LR 1 P & D 130. 41 Matrimonial Causes Act 1857, ss 6 and 31. 42 Matrimonial Causes Act 1857, ss 16 and 27. 43 A Digest of the Law of England with Reference to the Conflict of Laws, (1896) at Hayne Crennan Bell rule treated some, but not all, forms of marriage contracted according to other laws as either not worthy of recognition or not able to be recognised because their incidents were not compatible with English law. But the rule necessarily accepted that there were other systems of law providing for forms of marriage other than marriage of the kind for which English law provided. The rule depended upon classifying the legal systems which provided for such other forms of marriage as not being the legal system of a "Christian state". These being the bases for the nineteenth century decisions, those decisions did not then, and do not now, define the limit of the marriage power (or the divorce and matrimonial causes power) in the Constitution. Decisions like Hyde v Hyde reflect no more than the then state of development of judge-made law on the subjects of marriage and divorce and matrimonial causes. Subsequent development of both judge-made law and statute law shows this to be so. First, it was established in 1890 by Brinkley v Attorney-General44 that, despite the frequent reference found in earlier decisions to "Christian marriage" and "marriage in Christendom" as distinct from "infidel" marriages45, a monogamous marriage validly solemnised according to the law of Japan between "a natural born subject of the Queen ... having his domicil in Ireland" and "a subject of the empire of Japan", though not a Christian marriage, would be declared to be valid in English law. References made in earlier cases to a religious basis for the adoption of a particular definition of marriage must be seen in this light. Second, statements made in cases like Hyde v Hyde, suggesting that a potentially polygamous marriage could never be recognised in English law, were later qualified by both judge-made law and statute to the point where in both England and Australia the law now recognises polygamous marriages for many purposes46. 44 (1890) 15 PD 76 at 76. 45 Warrender v Warrender (1835) 2 Cl & F 488 at 532 [6 ER 1239 at 1255]; Hyde v Hyde (1866) LR 1 P & D 130 at 133-136. 46 See, for example, Family Law Act 1975, s 6. As to judge-made law generally and some English statute law, see Dicey and Morris on the Conflict of Laws, 10th ed (1980), vol 1 at 308-328 and the discussion by Lord Maugham LC of the (Footnote continues on next page) Hayne Crennan Bell Once it is accepted that "marriage" can include polygamous marriages, it becomes evident that the juristic concept of "marriage" cannot be confined to a union having the characteristics described in Hyde v Hyde and other nineteenth century cases. Rather, "marriage" is to be understood in s 51(xxi) of the Constitution as referring to a consensual union formed between natural persons in accordance with legally prescribed requirements which is not only a union the law recognises as intended to endure and be terminable only in accordance with law but also a union to which the law accords a status affecting and defining mutual rights and obligations. The formal requirements to establish the union, and thus the legally recognised status of marriage, may be very simple (for example, no more than the exchange of certain promises before witnesses). The rights and obligations which stem from that status will commonly include rights and obligations about maintenance and support, succession to and ownership of property (both as between the parties to the marriage and between the parties and others) and, if there are children of the union, rights and obligations in relation to them. The social institution of marriage differs from country to country. It is not now possible (if it ever was) to confine attention to jurisdictions whose law of marriage provides only for unions between a man and a woman to the exclusion of all others, voluntarily entered into for life. Marriage law is and must be recognised now to be more complex. Some jurisdictions outside Australia permit polygamy. Some jurisdictions outside Australia, in a variety of constitutional settings, now permit marriage between same sex couples. These facts cannot be ignored or hidden. It is not now possible (if it ever was) to decide what the juristic concept of marriage includes by confining attention to the marriage law of only those countries which provide for forms of marriage which accord with a preconceived notion of what marriage "should" be. More particularly, the nineteenth century use of terms of approval, like "marriages throughout Christendom"47 or marriages according to the law of nineteenth century cases in The Sinha Peerage Claim [1946] 1 All ER 348n at 47 Bethell v Hildyard (1888) 38 Ch D 220 at 234. Hayne Crennan Bell "Christian states"48, or terms of disapproval, like "marriages among infidel nations"49, served only to obscure circularity of reasoning. Each was a term which sought to mask the adoption of a premise which begged the question of what "marriage" means. The marriage law of many nations has always encompassed (and now encompasses) relations other than marriage as understood Other legal systems now provide50 for marriage between persons of the same sex. This may properly be described as being a recent development of the law of marriage in those jurisdictions. It is not useful or relevant for this Court to examine how or why this has happened. What matters is that the juristic concept of marriage (the concept to which s 51(xxi) refers) embraces such unions. They are consensual unions of the kind which has been described. The legal status of marriage, like any legal status, applies to only some persons within a jurisdiction51. The boundaries of the class of persons who have that legal status are set by law and those boundaries are not immutable52. When used in s 51(xxi), "marriage" is a term which includes a marriage between persons of the same sex. 48 Dicey, A Digest of the Law of England with Reference to the Conflict of Laws, (1896) at 639 fn 2. 49 Bethell v Hildyard (1888) 38 Ch D 220 at 234. 50 It is enough to refer to Canada (Civil Marriage Act SC 2005, c 33, ss 2 and 4), New Zealand (Marriage Act 1955 (NZ), s 2(1), as amended by Marriage (Definition of Marriage) Amendment Act 2013 (NZ), s 5) and England and Wales (Marriage (Same Sex Couples) Act 2013 (UK), s 1(1)). The examples could be multiplied. 51 cf Ford v Ford (1947) 73 CLR 524 at 529; [1947] HCA 7. 52 cf Union Label Case (1908) 6 CLR 469 at 610 per Higgins J. Hayne Crennan Bell The ACT Act The ACT Act defines53 "marriage" under that Act as: the union of 2 people of the same sex to the exclusion of all others, voluntarily entered into for life; but does not include a marriage within the meaning of the Marriage Act 1961 (Cwlth)." It defines54 "legally married" to include "married under a law of another jurisdiction that substantially corresponds" to the Act. The ACT Act provides for who is eligible for marriage under the Act55, how marriage under the Act is solemnised56, what marriages are void under the Act57, how marriages under the Act may be ended58, who is or may be authorised to solemnise marriage under the Act59, and which marriages solemnised in other jurisdictions are to be recognised as "a marriage under this Act for territory law"60. Most of the provisions of the ACT Act are very similar to provisions of either the Marriage Act or the Family Law Act. For present purposes, it is enough to notice only the chief similarities. 53 s 3 and the dictionary to the Act. 54 s 3 and the dictionary to the Act. 55 Pt 2, Div 2.2 (s 7). 56 Pt 2, Div 2.3 (ss 8-20). 57 Pt 3 (s 21). 58 Pt 4 (ss 22-33). 59 Pt 5 (ss 34-39). 60 Pt 6 (s 40). Hayne Crennan Bell First and foremost is the definition of marriage for which the ACT Act provides. Whereas the Marriage Act defines61 marriage as "the union of a man and a woman to the exclusion of all others, voluntarily entered into for life", the ACT Act provides62 for "the union of 2 people ... to the exclusion of all others, voluntarily entered into for life" (excluding a marriage within the meaning of the Marriage Act). Both Acts are thus directed to the creation of a legal status deriving from the agreement of natural persons to form an enduring personal union which can be dissolved only in accordance with law and which entails legal consequences for mutual support. Eligibility to marry is fixed by the two Acts with only one difference. Under the Marriage Act, a person aged between 16 and 18 years may marry63 if certain consents are given or judicial authorisation is obtained. Under the ACT Act, an adult person may marry64. Both Acts prohibit65 marriage between persons within the same prescribed degrees of affinity or consanguinity. The forms of marriage are not relevantly different. Each person to be married calls66 on those present to witness that he or she takes the other party "to be my lawful wedded" spouse. Each form of marriage requires67 the celebrant to remind the persons being married "of the solemn and binding nature of the relationship into which [they] are about to enter". Subject to one important exception, the grounds on which a marriage is to be held to be void are substantially identical in the two Acts. The exception is that the ACT Act provides68 that a marriage under that Act is void if the parties 62 s 3 and the dictionary to the Act. 63 ss 12-21, Schedule. 64 s 7(1)(a). 65 Marriage Act, s 23B(1)(b) and (2); ACT Act, s 7(1)(d). 66 Marriage Act, s 45(2); ACT Act, s 13(2). 67 Marriage Act, s 46(1); ACT Act, s 14. 68 s 21(1)(a). Hayne Crennan Bell were ineligible to marry. To be eligible to marry under the ACT Act, the persons must be unable69 to marry under the Marriage Act because the marriage is not a marriage within the meaning of that Act. The effect of these provisions, therefore, is that, if the Marriage Act definition of marriage were to be amended to permit same sex marriage under the federal law, a marriage subsequently solemnised under the ACT Act would be void. The ACT Act provides for dissolution of marriages under that Act in either of two cases. The first is cast in terms not relevantly different from the provisions of s 48 of the Family Law Act: a court (under the ACT Act, the Supreme Court of the Territory) being satisfied70 that the parties have separated and thereafter "have lived separately and apart for a continuous period of at least 12 months immediately before the application [for dissolution] is made". The second case for which the ACT Act provides71 is for the automatic dissolution of the marriage if a party marries another under a law of the Commonwealth, or under a law of another jurisdiction that substantially corresponds to the ACT Act. Other similarities between the ACT Act and the two federal Acts were referred to in argument but it is not necessary to describe them. The fundamental observation to make is that the ACT Act provides for the creation of a legal status, defined as the union of two natural persons to the exclusion of all others, voluntarily entered into for life. That legal status is created by the exchange of promises, before witnesses and in the presence of an authorised celebrant. If the parties separate and live apart for more than 12 months the status may be terminated by court order. The status given by the ACT Act will come to an end if a party acquires the status of marriage under the Marriage Act. If the Marriage Act permits marriage between same sex couples, a same sex couple may not validly acquire the status of marriage under the ACT Act. Inconsistency Section 28 of the Australian Capital Territory (Self-Government) Act 1988 (Cth) ("the Self-Government Act") provides that: 69 s 7(1)(c). Hayne Crennan Bell "(1) A provision of an enactment has no effect to the extent that it is inconsistent with a law defined by subsection (2), but such a provision shall be taken to be consistent with such a law to the extent that it is capable of operating concurrently with that law. In this section: law means: a law in force in the Territory (other than an enactment or a subordinate law); or an order or determination, or any other instrument of a legislative character, made under a law falling within paragraph (a)." The ACT Act is an "enactment"72 for the purposes of s 28 of the Self-Government Act. Both the Marriage Act and the Family Law Act are laws in force in the Territory. Is the ACT Act inconsistent with the Marriage Act, the Family Law Act or both? Can the ACT Act operate to any extent concurrently with the Marriage Act and the Family Law Act? Some argument was directed in this matter to whether, and to what extent, the effect of s 28 of the Self-Government Act differs from the operation of s 109 of the Constitution. In that regard, reference was made to the statement73 by Gleeson CJ and Gummow J, in Northern Territory v GPAO, that "the criterion for inconsistency – incapacity of concurrent operation – is narrower than that which applies under s 109, where the federal law evinces an intention to make exhaustive or exclusive provision upon a topic within the legislative power of the Commonwealth". It is not necessary, however, to trace the whole of the course of the argument. The Territory submitted that "[i]n circumstances where the Parliament appears to have intended that the Commonwealth law shall be a complete statement of the law governing a particular relation or thing", s 28 requires that "the Territory law would not be inconsistent with the Commonwealth law to the 72 Self-Government Act, s 3. 73 (1999) 196 CLR 553 at 583 [60]; [1999] HCA 8. Hayne Crennan Bell extent that the former was capable of operating concurrently with the latter". How a Territory enactment could operate concurrently with a federal law which is a complete statement of the law governing the relevant relation or thing was not explained. The Territory accepted, correctly, that s 28 operates "not as a denial of power otherwise conferred by the Self-Government Act upon the Assembly but as a denial to a law so made of effect 'to the extent' of its inconsistency"74 (emphasis added). These reasons will show that it follows that, if a Commonwealth law is a complete statement of the law governing a particular relation or thing75, a Territory law which seeks to govern some aspect of that relation or thing cannot operate concurrently with the federal law to any extent. Section 28(1) is directed to "[a] provision of an enactment". The opening words of the sub-section provide that a provision of an enactment has no effect to the extent that it is inconsistent with (among other things) a law of the federal Parliament. The concluding words of s 28(1) provide that "such a provision [of an enactment by the Territory Assembly] shall be taken to be consistent with such a law [of the federal Parliament]" to the extent described. The text of s 28 thus makes plain that the section is directed to the effect which is to be given to an enactment of the Assembly; it is not directed to the effect which is to be given to a federal law. That is, s 28 is a constraint upon the operation of the enactment of the Territory Assembly. It does not say, and it is not to be understood as providing, that laws of the federal Parliament are to be read down or construed in a way which would permit concurrent operation of Territory enactments. To the extent, if any, to which the Territory's submissions depended upon construing s 28 as requiring the reading down of the relevant federal law, the text of the section requires rejection of the submission. And as Re Governor, Goulburn Correctional Centre; Ex parte Eastman76 makes plain, what was said 74 Re Governor, Goulburn Correctional Centre; Ex parte Eastman (1999) 200 CLR 322 at 351 [75]; [1999] HCA 44. 75 cf Stock Motor Ploughs Ltd v Forsyth (1932) 48 CLR 128 at 136-137 per Dixon J; [1932] HCA 40; Victoria v The Commonwealth ("The Kakariki") (1937) 58 CLR 618 at 630 per Dixon J, 638 per Evatt J; [1937] HCA 82. 76 (1999) 200 CLR 322 at 351 [75]. Hayne Crennan Bell in GPAO77 does not support such a construction of s 28. Rather, the starting point for any consideration of the operation of s 28 must be the determination of the legal meaning78 of the relevant federal Act (in this case the Marriage Act). Only then is it possible to consider whether and to what extent the enactment of the Territory Assembly can be given concurrent operation. The argument in favour of concurrent operation of the ACT Act and the Marriage Act depended ultimately upon the proposition that, because the Marriage Act defines marriage as between persons of the opposite sex, the ACT Act can operate concurrently with respect to marriage between persons of the same sex. This proposition is flawed and must be rejected. The ACT Act is not capable of operating concurrently with the Marriage Act to any extent. It is necessary to bear steadily in mind that the federal Parliament has power under s 51(xxi) to make a national law with respect to same sex marriage. (The Parliament's power under s 122 of the Constitution to make laws for the government of any Territory need not be considered.) The federal Parliament has not made a law permitting same sex marriage. But the absence of a provision permitting same sex marriage does not mean that the Territory legislature may make such a provision. It does not mean that a Territory law permitting same sex marriage can operate concurrently with the federal law. The question of concurrent operation depends79 upon the proper construction of the relevant laws. In particular, there cannot be concurrent operation of the federal and Territory laws if, on its true construction, the Marriage Act is to be read as providing that the only form of marriage permitted shall be a marriage formed or recognised in accordance with that Act. The Marriage Act regulates the creation and recognition of the legal status of marriage throughout Australia. The Act's definition of marriage sets the bounds of that legal status within the topic of juristic classification with which the Act deals. Read as a whole, the Marriage Act, at least in the form in which it now stands, makes the provisions which it does about marriage as a 77 (1999) 196 CLR 553. 78 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 384 [78]; [1998] HCA 28; Momcilovic v The Queen (2011) 245 CLR 1 at 112 [245], 115-116 [258]-[261]; [2011] HCA 34. 79 Momcilovic (2011) 245 CLR 1 at 112 [245], 115-116 [258]-[261]. Hayne Crennan Bell comprehensive and exhaustive statement of the law with respect to the creation and recognition of the legal status of marriage. Why otherwise was the Marriage Act amended, as it was in 200480, by introducing a definition of marriage in the form which now appears, except for the purpose of demonstrating that the federal law on marriage was to be complete and exhaustive? The 2004 amendments to the Marriage Act made plain (if it was not already plain) that the federal marriage law is a comprehensive and exhaustive statement of the law of marriage. Those amendments applied the newly introduced definition of marriage to the provisions governing solemnisation of marriage and gave effect81 to that definition in the provisions governing the recognition of marriages solemnised outside Australia. Section 88EA of the Marriage Act (inserted82 by the 2004 amendments) provides expressly that a union solemnised in a foreign country between persons of the same sex must not be recognised as a marriage in Australia. These particular provisions of the Marriage Act, read in the context of the whole Act, necessarily contain83 the implicit negative proposition that the kind of marriage provided for by the Act is the only kind of marriage that may be formed or recognised in Australia. It follows that the provisions of the ACT Act which provide for marriage under that Act cannot operate concurrently with the Marriage Act and accordingly are inoperative84. Giving effect to those provisions of the ACT Act would alter, impair or detract from the Marriage Act. Within the Commonwealth, the Marriage Act determines the capacity of a person to enter the union that creates the status of marriage with its attendant rights and obligations of mutual support and advancement. Under the Marriage Act, a person has no legal capacity to attain that status, with the rights and obligations attendant on it, by entry into a union with a person of the same sex. 80 Marriage Amendment Act 2004 (Cth), s 3, Sched 1, item 1. 81 s 88B, as amended by the Marriage Amendment Act 2004, s 3, Sched 1, item 2. 82 Marriage Amendment Act 2004, s 3, Sched 1, item 3. 83 See, for example, Momcilovic (2011) 245 CLR 1 at 111 [244]. 84 cf Butler v Attorney-General (Vict) (1961) 106 CLR 268 at 274 per Fullagar J, 278 per Kitto J, 282-283 per Taylor J, 286 per Menzies J, 286 per Windeyer J; [1961] HCA 32; Ex parte Eastman (1999) 200 CLR 322 at 351 [75]. Hayne Crennan Bell The Territory submitted that the Marriage Act and the ACT Act "do not regulate the same status of 'marriage'". Certainly, the conditions for the attainment of the status for which each Act provides differ. But the ACT Act provides for a status of marriage. And as both the short title85 and the long title86 to the ACT Act show, the Act is intended to provide for marriage equality. The status for which the ACT Act provides falls within the one topic of juristic classification identified by Windeyer J. And contrary to the submissions of the Territory, the topic within which the status falls must be identified by reference to the legal content and consequences of the status, not merely the description given to it. By providing for marriage equality, the ACT Act seeks to operate within the same domain of juristic classification as the Marriage Act. And while the Marriage Act carves out a part of that domain for regulation of the creation and recognition of marriage, the Marriage Act also contains a negative proposition which governs the whole of that domain. The negative proposition governs the whole of the domain by providing that the only form of marriage which may be created or recognised is that form which meets the definition provided by the Marriage Act. So long as the Marriage Act continues to define "marriage" as it now does and to provide, in effect, that only a marriage conforming to that definition may be formed or recognised in Australia, the provisions of the ACT Act providing for marriage under that Act remain inoperative. Because those provisions are inoperative, the provisions of the ACT Act which deal with the rights of parties to marriages formed under that Act and with the dissolution of such marriages can have no valid operation. Whether any of those provisions could have operated concurrently with the provisions of the Family Law Act is a question which is not reached. The whole of the ACT Act is inconsistent with the Marriage Act. It is, therefore, not necessary to consider whether the ACT Act is, in some separate sense87, "repugnant" to the Marriage Act. The questions reserved by the Chief Justice for determination by the Full Court should be answered as follows: 85 Marriage Equality (Same Sex) Act 2013. 86 "An Act to provide for marriage equality by allowing for marriage between 2 adults of the same sex, and for other purposes". 87 cf Leeming, Resolving Conflicts of Laws, (2011) at 84-139. Hayne Crennan Bell Is the Marriage Equality (Same Sex) Act 2013 (ACT), in part or in its entirety: inconsistent with the Marriage Act 1961 (Cth) within the meaning of s 28(1) of the Australian Capital Territory (Self-Government) Act 1988 (Cth); and/or repugnant to the Marriage Act 1961 (Cth)? Answer: The whole of the Marriage Equality (Same Sex) Act 2013 (ACT) is inconsistent with the Marriage Act 1961 (Cth). If the answer to question 1(a) is "yes", to what extent, if any, is the Marriage Equality (Same Sex) Act 2013 (ACT) of no effect? Answer: The whole of the Marriage Equality (Same Sex) Act 2013 (ACT) is of no effect. If the answer to question 1(b) is "yes", to what extent, if any, is the Marriage Equality (Same Sex) Act 2013 (ACT) void? Answer: This question need not be answered. Is the Marriage Equality (Same Sex) Act 2013 (ACT), in part or in its entirety: inconsistent with the Family Law Act 1975 (Cth) within the meaning of the Australian Capital Territory s 28(1) of (Self-Government) Act 1988 (Cth); and/or repugnant to the Family Law Act 1975 (Cth)? Answer: This question need not be answered. If the answer to question 4(a) is "yes", to what extent, if any, is the Marriage Equality (Same Sex) Act 2013 (ACT) of no effect? Answer: This question need not be answered. Hayne Crennan Bell If the answer to question 4(b) is "yes", to what extent, if any, is the Marriage Equality (Same Sex) Act 2013 (ACT) void? Answer: This question need not be answered. In light of the answers to the preceding questions what, if any, orders should be made for the final disposition of these proceedings? Answer: There should be judgment for the plaintiff for a declaration that the whole of the Marriage Equality (Same Sex) Act 2013 (ACT) is inconsistent with the Marriage Act 1961 (Cth) and of no effect. 8. What orders should be made in relation to costs of the questions reserved and of the proceedings generally? Answer: The defendant should pay the plaintiff's costs of the questions reserved and of the proceedings generally.

HIGH COURT OF AUSTRALIA PGA AND THE QUEEN APPELLANT RESPONDENT PGA v The Queen [2012] HCA 21 30 May 2012 ORDER Appeal dismissed. On appeal from the Supreme Court of South Australia Representation D M J Bennett QC with P F Muscat SC and A L Tokley for the appellant (instructed by Legal Services Commission (SA)) M G Hinton QC, Solicitor-General for the State of South Australia with K G Lesses for the respondent and intervening on behalf of the Attorney-General for the State of South Australia (instructed by Director of Public Prosecutions S J Gageler SC, Solicitor-General of the Commonwealth with G A Hill intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor) J D McKenna SC with G J D del Villar intervening on behalf of the Attorney- General of the State of Queensland (instructed by Crown Law (Qld)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS PGA v The Queen Criminal law – Rape – Husband's immunity from prosecution for rape of wife – Presumption of consent to intercourse by wife in marriage – Appellant charged in 2010 with two counts of rape contrary to s 48 of Criminal Law Consolidation Act 1935 (SA) – Alleged rapes committed in 1963 against then spouse – Legislative amendments enabled institution of proceedings despite lapse of time – Elements of offence of rape in 1963 supplied by common law – Whether in 1963 common law of Australia presumed consent by wife in marriage. Precedent – Judicial method – Development of common law – Whether presumption of consent by wife in marriage was part of common law of Australia – Whether statement of common law in R v L (1991) 174 CLR 379 applied to events alleged to have occurred in 1963. Words and phrases – "common law", "marital exemption", "marital immunity", "presumption of consent", "rape", "retrospective application". Criminal Law Consolidation Act 1935 (SA), s 48. Matrimonial Causes Act 1857 (UK) (20 & 21 Vict c 85). FRENCH CJ, GUMMOW, HAYNE, CRENNAN AND KIEFEL JJ. The appellant and his wife, the complainant, were lawfully married in South Australia on 1 September 1962. At the relevant times in 1963 they remained lawfully married and were cohabiting in South Australia as husband and wife at the house of her parents; there were in force no legal orders or undertakings of any kind which affected their matrimonial relationship. The charges On 5 July 2010, by information of the Director of Public Prosecutions of South Australia, the appellant was charged for trial in the District Court of South Australia with two counts of carnal knowledge, with four counts of assault occasioning actual bodily harm and, what is immediately relevant for this appeal, with two counts of rape (counts 3 and 5) contrary to s 48 of the Criminal Law Consolidation Act 1935 (SA) ("the CLC Act"). The particulars of count 3 were that between 22 March 1963 and 25 March 1963, at Largs Bay in South Australia, the appellant had vaginal sexual intercourse with his wife without her consent. The particulars of count 5 were that on or about 14 April 1963, also at Largs Bay, the appellant had vaginal sexual intercourse with his wife without her consent. The issue before the Court is whether the appellant is correct in his contention that, as a matter of the common law, upon their marriage in 1962 his wife had given her consent to sexual intercourse and thereafter could not retract her consent, at least while they remained lawfully married, with the result that he could not be guilty of raping her as charged by counts 3 and 5. The proposition of law upon which the appellant relies has its source in a statement in extra-judicial writings of Sir Matthew Hale, Chief Justice of the Court of King's Bench (1671-1676), which were first published in 1736 as The History of the Pleas of the Crown. The statement by Hale is more fully set out later in these reasons1, but is encapsulated in the bald proposition that a husband cannot be guilty of a rape he commits upon his wife. It was repeated in East's work A Treatise of the Pleas of the Crown, published in 18032; by Chitty in his A Practical Treatise on the Criminal Law, published in 18163; and by Russell in A 2 Volume 1, Ch 10, §8. 3 Volume 3 at 811. Crennan Treatise on Crimes and Misdemeanors, the first edition of which was published in 18194. In each case the proposition was further repeated in later 19th century editions. What, however, was lacking in all these standard texts was any statement and analysis of reasoning which might have supported the statement by Hale and its continued acceptance. Given this state of affairs, it is perhaps not surprising that the Canadian Criminal Code of 1892 (s 266) and the Criminal Code of Queensland of 1899 (s 347), in defining the crime of rape, included the phrase "not his wife"5. The provisions in the Queensland Code, and those of Western Australia and Tasmania, were to be amended in 1989, 1985 and 1987 respectively6. The attempted abstraction and statement of doctrine in provisions of a code by means of propositions which do not represent generalised deductions from particular instances in the case law occasions difficulty when the common law later is shown to be to different effect7. Justice Holmes, in his essay "Codes, and the Arrangement of the Law"8, wrote: "New cases will arise which will elude the most carefully constructed formula. The common law, proceeding, as we have pointed out, by a series of successive approximations – by a continual reconciliation of cases – is prepared for this, and simply modifies the form of its rule. But what will the court do with a code? If the code is truly law, the court is confined to a verbal construction of the rule as expressed, and must decide the case wrong. If the court, on the other hand, is at liberty to decide ex 4 Volume 1, Bk 2, Ch 6, §1. 5 By 1984 over 40 of the United States retained statute laws conferring some form of marital exemption for rape: People v Liberta 474 NE 2d 567 at 572-573 (1984). However, in that case the New York provision was held invalid as denying the the United States equal protection required by Constitution. the 14th Amendment 6 See R v L (1991) 174 CLR 379 at 402; [1991] HCA 48. 7 See Murray v The Queen (2002) 211 CLR 193 at 206-207 [40]; [2002] HCA 26; Director of Public Prosecutions (NT) v WJI (2004) 219 CLR 43 at 53-54 [30]-[31]; [2004] HCA 47. (1870) 5 American Law Review 1, reprinted in Novick (ed), The Collected Works of Justice Holmes, (1995), vol 1, 212 at 213. Crennan ratione legis, – that is, if it may take into account that the code is only intended to declare the judicial rule, and has done so defectively, and may then go on and supply the defect, – the code is not law, but a mere text-book recommended by the government as containing all at present known on the subject." Indeed, in 1888, among the 13 judges sitting in the Court for Crown Cases Reserved, on the case stated in R v Clarence9 with respect to charges of "unlawfully and maliciously inflicting grievous bodily harm" and "assault occasioning actual bodily harm", contrary to s 20 and s 47 respectively of the Offences against the Person Act 1861 (UK)10 ("the 1861 UK Act"), differing views had been expressed as to whether the consent of the wife to intercourse with her husband had been vitiated by his failure to disclose to her that he was suffering from a contagious venereal disease. Thereafter, in the annotation to s 48 of the 1861 UK Act which appeared in Halsbury's Statutes of England, published in 192911, it was said: "It is said that a husband cannot be guilty of rape upon his wife as a principal in the first degree". (emphasis added) The 28th edition of Archbold's Pleading, Evidence & Practice in Criminal Cases, published in 1931, four years before the enactment of the CLC Act, cited Hale for the proposition expressed as: "It is a general proposition that a husband cannot be guilty of a rape upon his wife ... but it would seem that the proposition does not necessarily extend to every possible case"12. In the intervening period there appears to have been no reported case in England in which a husband had been prosecuted for the rape of his wife during their (1888) 22 QBD 23. 10 24 & 25 Vict c 100. 11 Volume 4 at 615. 13 See R v R [1992] 1 AC 599 at 614. Crennan As it stood in 1963, s 48 of the CLC Act stated: "Any person convicted of rape shall be guilty of felony, and liable to be imprisoned for life, and may be whipped." It is accepted that the elements of the offence of rape identified in s 48 were supplied by the common law. Section 4 of the CLC Act had wholly repealed The Criminal Law Consolidation Act 1876 (SA). As amended by s 13 and the Schedule to the Criminal Law Amendment Act 1925 (SA), s 60 of the 1876 statute had read: "Whosoever shall be convicted of the crime of rape shall be guilty of felony, and, being convicted thereof, shall be liable to be imprisoned for life, with hard labor, and may be whipped."14 The scheme of the legislation in South Australia, in its various forms, was to classify the offence of rape as a felony and to specify the range of punishments upon conviction. This followed the pattern in s 48 of the 1861 UK Act. The legislative emphasis upon the classification of the crime and the punishments which might be inflicted, leaving the elements of the crime itself to the common law, reflected past fluctuations in the statute law. Shortly after the enactment of the 1861 UK Act, there appeared in the 5th edition (1877) of Russell's work, A Treatise on Crimes and Misdemeanors15, the following: "This offence formerly was, for many years, justly visited with capital punishment; but it does not appear to have been regarded as equally heinous at all periods of our Constitution. Anciently, indeed, it appears to have been treated as a felony, and, consequently, punishable with death; but this was afterwards thought too hard; and, in its stead, another severe but not capital punishment was inflicted by William the Conqueror, namely, castration and loss of eyes, which continued till after Bracton wrote, in the reign of Henry III. The punishment for rape was still further mitigated, in the reign of Edward I, by the statute of Westm 1, c 13, which reduced the offence to a trespass, and subjected the party to 14 The Criminal Law Amendment Act 1925 (SA) omitted the words "or any term not less than four years". 15 Volume 1 at 858 (footnote omitted). Crennan two years' imprisonment, and a fine at the King's will. This lenity, however, is said to have been productive of terrible consequences; and it was, therefore, found necessary, in about ten years afterwards, and in the same reign, again to make the offence of forcible rape a felony, by the statute of Westm 2, c 34. The punishment was still further enhanced by the 18 Eliz c 7, s 1." The lapse of time Something should be said respecting the legal significance of the length of time between the alleged conduct in 1963 and the institution of proceedings in 2010. As the CLC Act stood in 1963, it included s 76a16. The effect of s 76a was that in respect of offences, including an offence against s 48, no information was to be laid more than three years after the commission of the offence. Section 76a was repealed by the Criminal Law Consolidation Act Amendment Act 1985 (SA). However, in R v Pinder17 it was held that the repeal of s 76a did not authorise the laying of an information which would deprive a person of immunity already acquired before the repeal of s 76a. The response of the legislature was to reverse the effect of this decision by the enactment of s 72A of the CLC Act by the Criminal Law Consolidation (Abolition of Time Limit for Prosecution of Certain Sexual Offences) Amendment Act 2003 (SA). The result was that a person, such as the appellant, who had acquired immunity by reason of the operation of the repealed s 76a had lost that immunity and could now be prosecuted. Changes have been made to the elements of the offence of rape, beginning with the Criminal Law Consolidation Act Amendment Act 1976 (SA), but it has not been submitted that these changes to the elements of the offence apply retrospectively. The permanent stay application On 6 July 2010 Herriman DCJ gave reasons for dismissing an application by the appellant for a permanent stay of proceedings. His Honour's reasons included the following passage: 16 This had been added by the Criminal Law Consolidation Act Amendment Act 1952 17 (1989) 155 LSJS 65. Crennan "The complainant's evidence is that in 1960 and 1961, when she was 15 or 16, the accused was in a relationship with her and she says that at that time they were living in her parents' house, albeit that he slept in a separate room. They were ultimately married in September 1962, when she was 17, but she says that before that age she had sexual intercourse with him on two occasions. Those two occasions represent counts 1 and 2 on the information. The parties then lived as husband and wife in her parents' house until mid-1963, when they went to their own premises. They separated in The complainant says that on two occasions, in March and April 1963, which she relates to times immediately before and soon after the birth of their first child, the accused had forcible sexual intercourse with her against her will. She says that she did not, at any time during the marriage, complain of carnal knowledge or, indeed, of that forced sexual intercourse. The time for laying of any such charges was then within three years of the act, so that the time for laying a complaint with respect to the carnal knowledge counts expired in about 1964 and, with respect to rape, in about 1966. Those time limits were not abolished until the year 2003. More importantly, there was, and, indeed, there remains, a real question as to whether in 1963 an offence of rape in marriage, as it is commonly called, was then part of the common law of this State." His Honour went on to stay the trial pending the statement for the Full Court of the Supreme Court of South Australia of a case under s 350(2)(b) of the CLC Act. This dealt with the argument of the appellant that at the time of the alleged offences in 1963, he could not, as a matter of law, have committed the crime of rape upon his wife. What was said in 1991 by four of the five members of this Court in R v L18 has been treated by the parties in the present litigation at least as having the result that by 1991 it was no longer the common law in Australia that by 18 (1991) 174 CLR 379 at 390 per Mason CJ, Deane and Toohey JJ, 405 per Crennan marriage a wife gave irrevocable consent to sexual intercourse with her husband. Herriman DCJ saw the outstanding issue for determination as being "was the offence of rape by one lawful spouse of another ... an offence known to the law of South Australia as at 1963?". A question to this effect was stated for consideration by the Full Court19. The Court (Doyle CJ and White J; Gray J dissenting) ordered that the question be answered as follows: "The defendant is liable at law to be found guilty of the offences of rape charged in count 3 and count 5 of the Information, notwithstanding that at the time of the alleged offence he was married to the alleged victim and was cohabiting with her, the marriage giving rise to no presumption of consent on her part to intercourse with her husband, and giving rise to no irrebuttable presumption to that effect." Gray J was of the contrary opinion and would have answered the question in the negative and applied the presumption of irrevocable consent. The appeal to this Court By special leave the appellant appeals to this Court seeking an order setting aside the answer given by Doyle CJ and White J. By Notice of Contention the respondent submits that, regardless of what follows from the decision in R v L20, the answer by Doyle CJ and White J, the majority in the Full Court, is to be supported on the basis that: (a) "the supposed marital exemption to the offence of rape ... was never part of the common law of Australia"; or (b) "if it ever was part of the common law of Australia, it ceased to be so as at the date of the commission of the offences in this matter". For the reasons which follow, if the "marital exemption" ever was part of the common law of Australia, it had ceased to be so by the time of the enactment in 1935 of s 48 of the CLC Act and thus before the date of the commission of the alleged offences charged as count 3 and count 5. It follows that the appeal must be dismissed. That conclusion does not involve any retrospective variation or modification by this Court of a settled rule of the common law. At the time of 19 (2010) 109 SASR 1. The Full Court sat as the Court of Criminal Appeal: see Lipohar v The Queen (1999) 200 CLR 485 at 504 [41]; [1999] HCA 65. 20 (1991) 174 CLR 379. Crennan the commission of the alleged offence the common law rule for which the appellant contends did not exist. The term "the common law" The references above to "the common law" and "the common law of Australia" require further analysis before consideration of the immediate issue concerning the crime of rape upon which this appeal turns. In his contribution under the heading "common law" in The New Oxford Companion to Law21, Professor A W B Simpson distinguishes five senses in which that term is used. The primary sense is that body of non-statutory law which was common throughout the realm and so applicable to all, rather than local or personal in its application. An example of such local or personal laws is the customary mining laws which had applied in various localities in England22. The second sense of the term is institutional, to identify the body of law administered in England by the three royal courts of justice, the King's Bench, Common Pleas and Exchequer, until the third quarter of the 19th century. The third sense is a corollary of the second, the expression "the common law" differentiating the law administered by those courts from the principles of equity administered in the Court of Chancery (and, one should add, from the law applied in the ecclesiastical courts until 1857 and the law applied in courts of admiralty). In that regard, Sir George Jessel MR emphasised in In re Hallett's Estate23 that, while the rules of the common law were "supposed to have been established from time immemorial", those of equity had been invented, altered, improved, and refined by the Chancellors from time to time, and he instanced "the separate use of [ie trust for] a married woman". With the development since the second half of the 19th century of appellate structures governing all species of primary decisions, judicial reasoning has tended not to invoke time immemorial and rather to follow the course which had been taken by the Chancellors in expounding legal principle. 21 Cane and Conaghan (eds), The New Oxford Companion to Law, (2008) at 164-166. 22 See TEC Desert Pty Ltd v Commissioner of State Revenue (WA) (2010) 241 CLR 576 at 587 [30]-[31]; [2010] HCA 49. 23 (1879) 13 Ch D 696 at 710. Crennan The fourth and fifth senses of "common law" identified by Professor Simpson are as follows: "The term 'common law' came, in a fourth sense, to have the connotation of law based on cases, or law evolved through adjudication in particular cases, as opposed to law derived from the analysis and exposition of authoritative texts. Indeed sometimes 'common law' is more or less synonymous with the expression 'case law'. Since the common law was developed by the judges, interacting with barristers engaged in litigation, the expression 'common law' came, in a related fifth sense, to mean law made by judges." This draws attention to a difficulty in the appellant's reliance in this case upon a principle of the common law based upon a statement in a text published in 1736, many years after the death of the author, without citation of prior authority and lacking subsequent exposition in cases where it has been repeated. In that regard, observations by six members of the Court in the Native Title Act Case24 are significant. Their Honours noted that the term "common law" might be understood not only as a body of law created and defined by the courts in the past, but also as a body of law the content of which, having been declared by the courts at a particular time, might be developed thereafter and be declared to be different. Writing at the time of the establishment of this Court, and when he was Professor of Law at the University of Adelaide, Sir John Salmond said25: "The statement that a precedent gains in authority with age must be read subject to an important qualification. Up to a certain point a human being grows in strength as he grows in age; but this is true only within narrow limits. So with the authority of judicial decisions. A moderate 24 Western Australia v The Commonwealth (1995) 183 CLR 373 at 484-486; [1995] HCA 47. 25 Salmond, "The Theory of Judicial Precedents", (1900) 16 Law Quarterly Review 376 at 383. See also Holmes, "Codes, and the Arrangement of the Law", (1870) 5 American Law Review 1, reprinted in Novick (ed), The Collected Works of Justice Holmes, (1995), vol 1, 212 at 212-213. Crennan lapse of time will give added vigour to a precedent, but after a still longer time the opposite effect may be produced, not indeed directly, but indirectly through the accidental conflict of the ancient and perhaps partially forgotten principle with later decisions. Without having been expressly overruled or intentionally departed from, it may become in course of time no longer really consistent with the course of judicial decision. In this way the tooth of time will eat away an ancient precedent, and gradually deprive it of all authority and validity. The law becomes animated by a different spirit and assumes a different course, and the older decisions become obsolete and inoperative." The term "the common law of Australia" Finally, in his treatment of "common law", Professor Simpson refers to the expansion of British imperial power and the creation of "a common law world". The common law was received in the Province of South Australia with effect 19 February 1836, but despite the differing dates of the reception of the common law in the Australian colonies, the common law was not disintegrated into six separate bodies of law; further, what was received included the method of the common law, which in Australia involved judicial determination of particular parts of the English common law which were inapplicable to local conditions26. The "common law" which was received did not include the jurisdiction with respect to matrimonial causes (including suits for declarations of nullity of marriage, judicial separation (a mensa et thoro) and restitution of conjugal rights) which in England was exercised by the ecclesiastical courts. This exclusion appears to have been a deliberate decision by the Imperial authorities27. Further, unlike the situation in England, in the Australian colonies there was to be no 26 Commissioner of Stamps (SA) v Telegraph Investment Co Pty Ltd (1995) 184 CLR 453 at 466-467; [1995] HCA 44; Lipohar v The Queen (1999) 200 CLR 485 at 508-509 [54]-[55]; Brodie v Singleton Shire Council (2001) 206 CLR 512 at 557-558 [99]-[101], 559-560 [104], 588-589 [193]-[196]; [2001] HCA 29; R v Gardener and Yeurs (1829) NSW Sel Cas (Dowling) 108; Ex parte The Rev George King (1861) 2 Legge 1307; Campbell v Kerr (1886) 12 VLR 384. 27 Castles, An Australian Legal History, (1982) at 140-142; Bennett, "The Establishment of Divorce Laws in New South Wales", (1963) 4 Sydney Law Review 241 at 242. Crennan established religion28. The Anglican church was expressly enjoined from exercising any authority or jurisdiction in matrimonial causes29. The result was that the jurisdiction with respect to matrimonial causes, as well as divorce, which has been exercised by the colonial and State courts always has been derived from local statute law, not received "common law". Further, in Skelton v Collins30, Windeyer J said of the reception in the Australian colonies of the doctrines and principles of the common law: "To suppose that this was a body of rules waiting always to be declared and applied may be for some people satisfying as an abstract theory. But it is simply not true in fact. It overlooks the creative element in the work of courts. It would mean for example, that the principle of Donoghue v Stevenson31, decided in the House of Lords in 1932 by a majority of three to two, became law in Sydney Cove on 26th January 1788 or was in 1828 made part of the law of New South Wales by 9 Geo IV c 83, s 25. In a system based, as ours is, on case law and precedent there is both an inductive and a deductive element in judicial reasoning, especially in a court of final appeal for a particular realm or territory." Inductive and deductive reasoning This creative element of both inductive and deductive reasoning in the work of the courts in Australia includes the taking of such steps as those identified by Sir Owen Dixon in his address "Concerning Judicial Method"32. In his words, these are: (i) extending "the application of accepted principles to new 28 Wylde v Attorney-General (NSW) (at the Relation of Ashelford) (1948) 78 CLR 224 at 257, 275-276, 285-286, 298; [1948] HCA 39; Scandrett v Dowling (1992) 27 NSWLR 483 at 534-541; Shaw, The Story of Australia, (1955) at 98-100. 29 Wylde v Attorney-General (NSW) (at the Relation of Ashelford) (1948) 78 CLR 224 at 284-285; Bennett, "The Establishment of Divorce Laws in New South Wales", (1963) 4 Sydney Law Review 241 at 242. 30 (1966) 115 CLR 94 at 134; [1966] HCA 14. 32 (1956) 29 Australian Law Journal 468 at 472. Crennan cases"; (ii) reasoning "from the more fundamental of settled legal principles to new conclusions"; and (iii) deciding "that a category is not closed against unforseen instances which in reason might be subsumed thereunder". To these steps may be added one which is determinative of the present appeal. It is that where the reason or "foundation"33 of a rule of the common law depends upon another rule which, by reason of statutory intervention or a shift in the case law, is no longer maintained, the first rule has become no more than a legal fiction and is not to be maintained. An example is provided by a division of opinion in Brown v Holloway34 and Edwards v Porter35 respectively between this Court and the House of Lords, as to the consequences of the Married Women's Property Act 1882 (UK) ("the 1882 UK Act") and its Queensland counterpart36. Of those cases, it was said in Thompson v Australian Capital Television Pty Ltd37: "The issue [in Edwards v Porter] concerned the effect of the provision in [the 1882 UK Act] that married women were to be capable of suing or being sued as if each were a feme sole, the immediate issue being whether a husband remained liable at common law with his wife for a tort committed by her during joint coverture. In this Court it had previously been decided by Griffith CJ, O'Connor and Isaacs JJ that the liability of the husband was gone38. At common law the wife had been liable for her own torts but there was no way in which that liability could be enforced save by an action against her in which her spouse was joined as a party. The joinder of the husband was necessary only because the liability of the wife could not be made effective without his joinder as a party. The 33 See the statement by Lord Penzance in Holmes v Simmons (1868) LR 1 P & D 523 34 (1909) 10 CLR 89; [1909] HCA 79. 36 Married Women's Property Act 1890 (Q). 37 (1996) 186 CLR 574 at 614-615; [1996] HCA 38. See also at 584-585, 591. 38 Brown v Holloway (1909) 10 CLR 89. Crennan legislation39 removed that procedural disability and therefore the reason which had rendered the husband a necessary party. In Edwards v Porter, without consideration of the reasoning of this Court in Brown v Holloway, their Lordships divided 3:2 in favour of a decision that, notwithstanding the legislation, the husband remained liable to suit with his wife for her torts40. One of the minority, Viscount Cave 'The whole reason and justification for joining a husband in an action against his wife for her post-nuptial tort has therefore disappeared; and it would seem to follow, upon the principle "cessante ratione cessat lex," that he is no longer a necessary or proper party to such an action.'" It is with this reasoning in mind that there is to be understood the earlier statement by Dawson J in R v L42 that: "whatever may have been the position in the past, the institution of marriage in its present form provides no foundation for a presumption which has the effect of denying that consent to intercourse in marriage can, expressly or impliedly, be withdrawn. There being no longer any foundation for the presumption, it becomes nothing more than a fiction which forms no part of the common law." 39 In Brown v Holloway, the Married Women's Property Act 1890 (Q). [See also Married Women's Property Act 1883 (Tas), Married Women's Property Act 1883-4 (SA), Married Women's Property Act 1884 (Vic), Married Women's Property Act 1892 (WA), Married Women's Property Act 1893 (NSW).] 40 Later, in Ford v Ford (1947) 73 CLR 524 at 528; [1947] HCA 7, Latham CJ expressed the opinion that, in accordance with the then prevailing doctrine in Piro v W Foster & Co Ltd (1943) 68 CLR 313; [1943] HCA 32, this Court would follow the House of Lords at the expense of its own earlier decision. In any event, legislation in all States and Territories ensured that married status has no effect on the rights and liabilities of a woman in tort: Balkin and Davis, Law of Torts, 2nd ed (1996) at 836. 41 Edwards v Porter [1925] AC 1 at 10. 42 (1991) 174 CLR 379 at 405. Crennan That statement points the way to the resolution of this appeal. The common law crime of rape The point should first be made that, the issue of irrevocable consent by a wife apart, the common law with respect to the crime of rape did not remain static. Sir Edward Coke in The First Part of the Institutes of the Laws of England early in the 17th century wrote43: "'Rape.' Raptus is, when a man hath carnall knowledge of a woman by force and against her will." In 1957 in their joint reasons in Papadimitropoulos v The Queen44, Dixon CJ, McTiernan, Webb, Kitto and Taylor JJ referred to Australian decisions given in 1915, 1919 and 1947 when stating: "The modern history of the crime of rape shows a tendency to extend the application of the constituent elements of the offence. The 'violenter et felonice rapuit' of the old Latin indictment is now satisfied although there be no use of force: R v Bourke45. The 'contra voluntatem suam' requires only a negative absence of consent; (as to the need of the man's being aware of the absence of consent, see R v Lambert 46). The 'violenter et felonice carnaliter cognovit' is established if there has been some degree of penetration although slight, and no more force has been used than is required to effect it: R v Bourke47; R v Burles48." 43 (1628), Section 190. 44 (1957) 98 CLR 249 at 255; [1957] HCA 74. 45 [1915] VLR 289. 46 [1919] VLR 205 at 213. 47 [1915] VLR 289. 48 [1947] VLR 392. Crennan Their Honours added49: "To return to the central point; rape is carnal knowledge of a woman without her consent: carnal knowledge is the physical fact of penetration; it is the consent to that which is in question; such a consent demands a perception as to what is about to take place, as to the identity of the man and the character of what he is doing. But once the consent is comprehending and actual the inducing causes cannot destroy its reality and leave the man guilty of rape." The reference in Papadimitropoulos to "[t]he modern history of the crime of rape" may be seen as foreshadowing two points with respect to the development of the common law made by Dixon CJ shortly thereafter. In Commissioner for Railways (NSW) v Scott50 Dixon CJ spoke of the gradual growth of the legal system by proceeding by reasoning from accepted notions about remedies and rights to the evolution of rules "to govern new or changed situations to which an ever developing social order gives rise"; he went on to observe that "[t]he resources of the law for superseding or avoiding the obsolescent have for the most part proved sufficient". It is upon that sufficiency that the respondent relies in this appeal. The statement by Hale What now follows in these reasons emphasises that some care is required when visiting what Professor Glanville Williams described as "the museum of the English criminal law"51. The relevant passage in The History of the Pleas of the Crown appears in Ch 58, headed "Concerning felonies by act of parliament, and first concerning rape". The importance of statutory intervention in this respect may be seen from the passage from Russell's treatise set out earlier in these reasons52. 49 (1957) 98 CLR 249 at 261. 50 (1959) 102 CLR 392 at 399-400; [1959] HCA 29. 51 Williams, "The Legal Unity of Husband and Wife", (1947) 10 Modern Law Review Crennan Hale referred to the statement by Bracton that it was a good exception to an appeal (ie formal accusation) of rape that the parties were living in amicable concubinage, adding "and the reason was, because that unlawful cohabitation carried a presumption in law, that it was not against her will". Hale went on to say: "But this is no exception at this day[. I]t may be an evidence of an assent, but it is not necessary that it should be so, for the woman may forsake that unlawful course of life." (emphasis added) This is followed by the critical statement: "But the husband cannot be guilty of a rape committed by himself upon his lawful wife, for by their mutual matrimonial consent and contract the wife hath given up herself in this kind unto her husband, which she cannot retract." (emphasis added) Several points may be made immediately. First, it is apparent from Hale's treatment of Bracton's view in the 13th century of concubinage that he did not regard what had been said in past times as necessarily expressing the common law "at this day" four centuries later. Secondly, Hale gave, as the reason for the proposition that a husband cannot be guilty of a rape upon his wife, the nature in law of the matrimonial relationship. But, in that regard, it was well settled that marriage was constituted by the present consent of the parties expressed under such circumstances as the law required, but without the requirement for consummation to complete the marriage53. Further, as explained later in these reasons54, the ecclesiastical courts did not enforce any duty of sexual intercourse between husband and wife. Thirdly, Hale did not explain the character in law of the proposition respecting rape in marriage, whether it stated an element of the offence, a defence, or an immunity. Nor did Hale refer to any prior cases which might be 53 Dalrymple v Dalrymple (1811) 2 Hag Con 54 at 62-63 [161 ER 665 at 668-669]; R v Millis (1844) 10 Cl & F 534 at 719 [8 ER 844 at 913]. Crennan said to illustrate and support the proposition. From the immediately preceding treatment by Hale of Bracton it is apparent that the proposition is more than a bar to the reception of evidence by the wife or a statement of her absolute testimonial incompetence in this respect. This is further apparent from what immediately follows in Hale's text. This is a treatment of what had been decided at the trial of Lord Audley before the House of Lords in 163155 as follows: "A the husband of B intends to prostitute her to a rape by C against her will, and C accordingly doth ravish her, A being present, and assisting to this rape: in this case these points were resolved, 1. That this was a rape in C notwithstanding the husband assisted in it, for tho in marriage she hath given up her body to her husband, she is not to be by him prostituted to another. 2. That the husband being present, aiding and assisting, is also guilty as a principal in rape, and therefore, altho the wife cannot have an appeal of rape against her husband, yet he is indictable for it at the king's suit as a principal. 3. That in this case the wife may be a witness against her husband, and accordingly she was admitted, and A and C were both executed." It should be added that in the 19th century, it was held in the Supreme Judicial Court of Massachusetts56 that there should be no arrest of judgment on the ground that the indictment had not alleged that the complainant was not the wife of any of those charged with raping her. The relevant passage from Hale had been cited, but Bigelow J responded57: "Such an averment has never been deemed essential in indictments for rape, either in this country or in England. The precedents contain no such allegation. See authorities before cited. A husband may be guilty at common law as principal in the second degree of a rape on his wife by assisting another man to commit a rape upon her; Lord Audley's case, 3 Howell's State Trials, 401; and under our statutes he would be liable to be punished in the same manner as the principal felon. Rev Sts c 133, §1. An indictment charging him as principal would therefore be valid. 55 The Trial of Lord Audley (1631) 3 St Tr 401. 56 Commonwealth v Fogerty 74 Mass 489 (1857). 57 74 Mass 489 at 491 (1857). Crennan Of course, it would always be competent for a party indicted to show, in defence of a charge of rape alleged to be actually committed by himself, that the woman on whom it was charged to have been committed was his wife. But it is not necessary to negative the fact in the indictment." Thus it will be seen that whatever its character in law, Hale's proposition was not framed in absolute terms, given his treatment of Lord Audley's Case. But what is important for the present appeal is further consideration of the reason given by Hale, which was based in an understanding of the law of matrimonial status in the second half of the 17th century when he wrote. Matrimonial status and its incidents in England In the period in which Hale wrote, and until the significant legislative changes in the course of the 19th century, each of the three jurisdictions in England represented by the courts of common law, the courts of equity and the ecclesiastical courts, had distinct roles in matters affecting matrimonial status58. The law applied in the common law courts had absorbed much canon law learning and it defined basic concepts such as legitimacy, procedural rights at law between spouses, and the duties and responsibilities of husbands, including their rights and duties in respect of the contracts and torts of their wives. Marriage had important consequences in property law, for establishing and securing inheritance of legal estates in land. In such contexts a court of common law would determine whether there had been a marriage. The common law also provided forms of action such as breach of promise to marry, criminal conversation by adulterers and seduction of daughters. As already observed59 by reference to the statement of Sir George Jessel MR in In re Hallett's Estate60, equity intervened in a notable fashion by means of the trust to reserve separate property for a wife after her marriage. In his lecture entitled "Of Husband and Wife", Chancellor Kent, after referring to the incompetency at common law of a married woman to deal with her property 58 See the discussion by Professor Cornish in The Oxford History of the Laws of England, (2010), vol 13 at 724-726. 60 (1879) 13 Ch D 696 at 710. Crennan as a feme sole61, went on to contrast the position in equity and described the procedural consequences as follows62: "The wife being enabled in equity to act upon property in the hands of her trustees, she is treated in that court as having interests and obligations distinct from those of her husband. She may institute a suit, by her next friend, against him, and she may obtain an order to defend separately suits against her; and when compelled to sue her husband in equity, the court may order him to make her a reasonable allowance in money to carry on the suit." The provision in the 1882 UK Act and in the corresponding colonial married women's property legislation63 that a married woman was capable of acquiring, holding and disposing of any real or personal property as her separate property, as if she were a feme sole, "without the intervention of any trustee", represented a triumph in statutory form of the principles of equity64. However, it was not until 1862, with the decision of Lord Westbury LC in Hunt v Hunt65, that the Court of Chancery enforced a negative covenant in a deed of separation not to sue in the ecclesiastical courts (or after 1857 in the Divorce Court) for restitution of conjugal rights. Ecclesiastical courts in England had limited powers to order separation of spouses but could not order the dissolution of marriage. This required a statute. Hale wrote in a period in which Parliamentary intervention was beginning. In 1669 a private Act was granted to Lord de Roos, and in 1692 to the Duke of Norfolk; only five such divorces were granted before 1714, but between 1800 and 1850 there were 9066. (Divorce by private Act of the legislature was to be 61 Kent, Commentaries on American Law, (1827), vol 2, 109 at 136. 62 Kent, Commentaries on American Law, (1827), vol 2, 109 at 137. 63 See fn 39. 64 Yerkey v Jones (1939) 63 CLR 649 at 675-676; [1939] HCA 3. 65 (1862) 4 De G F & J 221 [45 ER 1168]; see also Fielding v Fielding [1921] NZLR 66 Sir Francis Jeune, "Divorce", Encyclopaedia Britannica, 10th ed (1902), vol 27, Crennan attempted in 1853 in New South Wales, but the Instructions issued to colonial governors required that any Bill dealing with divorce be reserved for the Queen's pleasure67 and the Royal Assent was only given to the Bill after some delay68.) However, it should be noted that in Scotland since the 16th century, provision had been made for judicial grant of divorce on grounds of adultery of either spouse or malicious desertion for at least four years69. Given the significant settlement of Scots immigrants in the Australian colonies, this element of their inheritance should not be overlooked in understanding the development of Australian institutions70. In 1891, the English Court of Appeal held that habeas corpus would issue to free a wife confined by her husband in his house in order to enforce restitution of conjugal rights71. In R v L72 Brennan J said: "The ecclesiastical courts made decrees for the restitution of conjugal rights but the decree commanded a general resumption of cohabitation and did not purport to compel a spouse to do or abstain from doing particular acts in performance of a connubial obligation73. The legal significance of connubial obligations was to be found in the making of decrees based on breaches of those obligations. Breaches were established only by proof of conduct that was a gross infringement of a connubial right or by proof of a 67 Quick and Garran, The Annotated Constitution of the Australian Commonwealth, 68 Bennett, A History of the Supreme Court of New South Wales, (1974) at 144-145. 69 Walker, A Legal History of Scotland, (2001), vol 6 at 658, 661. 70 See generally, McPherson, "Scots Law in the Colonies", [1995] Juridical Review 191. 71 R v Jackson [1891] 1 QB 671. 72 (1991) 174 CLR 379 at 393. 73 Hunt v Hunt (1943) 62 WN (NSW) 129. Crennan continuous failure to perform a connubial obligation in satisfaction of the corresponding connubial right of the other spouse. The courts exercising jurisdiction in matrimonial causes recognized the mutual rights of husband and wife relating to sexual intercourse and, in granting or withholding their decrees, ascertained whether either party had wilfully and persistently refused to accord the right of sexual intercourse to the other party. From the days of the ecclesiastical courts, however, it was accepted that no mandatory order to compel sexual intercourse would be made." In 1933, when describing the nature and incidents of a decree for restitution of conjugal rights under the jurisdiction conferred by Pt III (ss 6-11) of the Matrimonial Causes Act 1899 (NSW), Dixon J observed in Bartlett v Bartlett74 that, so long as this remedy was retained, it must be treated as a process imposing an obligation, the performance or non-performance of which is ascertainable, and he added75: "On the one hand, it is clear that the obligation requires cohabitation, a physical dwelling together. On the other hand, it is clear that it does not require the resumption of sexual intercourse. It cannot, in fact, and in principle ought not to be understood as attempting to, control motives, feelings, emotions, sentiment or states of mind. Its operation must be limited to overt acts and conduct. ... Perhaps, all that can be said is that the decree of restitution requires the spouse against whom it is directed again to dwell with the other spouse in outward acceptance of the relationship, to act as if they were husband and wife maintaining a matrimonial home and to commence no course of conduct intended to cause a separation." Evatt J set out76 a passage from the reasons of Salmond J in Fielding v Fielding77 in which, with reference to the jurisdiction conferred by s 7 of the Divorce and Matrimonial Causes Act 1908 (NZ) for the issue of decrees for restitution of conjugal rights, Salmond J had said: 74 (1933) 50 CLR 3 at 15-16; [1933] HCA 53. 75 (1933) 50 CLR 3 at 16. 76 (1933) 50 CLR 3 at 18. 77 [1921] NZLR 1069 at 1071. Crennan "The Ecclesiastical Courts [in England] never professed or attempted by means of decrees for restitution of conjugal rights, and imprisonment for disobedience to such decrees, to enforce any duty of sexual intercourse between husband and wife. The basis of such a decree was the wrongful refusal of matrimonial cohabitation. The duty enforced was merely the duty of husband and wife to live together under the same roof in the normal relationship of husband and wife, but without reference to the question of intercourse." The divorce legislation The passage of the Matrimonial Causes Act 1857 (UK)78 ("the 1857 UK Act") later was described by Dicey as "a triumph of individualistic liberalism and of common justice"79. But it was the culmination of many years of agitation. Of the delay, Professor Cornish writes80: "It is less easy to explain why, given the long availability of judicial divorce in Scotland and its spread to other Protestant countries, the step did not come earlier. Jeremy Bentham, for instance, had been an advocate of fully consensual divorce, but subject to time delays for reflection and a bar on the re-marriage of a guilty party." (footnote omitted) The 1857 UK Act terminated the jurisdiction of the ecclesiastical courts in matrimonial matters (s 2) and vested that jurisdiction in the new Court for Divorce and Matrimonial Causes (s 6), but the Court was to act on the principles and rules which had been applied by the ecclesiastical courts (s 22). A decree dissolving marriage might be pronounced on a petition by the husband alleging adultery by the wife, and on a wife's petition, alleging adultery coupled with desertion for at least two years and without reasonable excuse, or alleging adultery with aggravated circumstances including "such Cruelty as without Adultery would have entitled her to a Divorce à Mensâ et Thoro" (ss 27 and 31). 78 20 & 21 Vict c 85. 79 Lectures on the Relation between Law and Public Opinion in England during the Nineteenth Century, 2nd ed (1914) at 347. 80 The Oxford History of the Laws of England, (2010), vol 13 at 781. Crennan In 1858 the Secretary of State for the Colonies conveyed to all colonial governors and legislatures the wish of the Imperial Government that steps be taken to introduce, "as nearly as the circumstances of the Colony will admit", the provisions of the 1857 UK Act81. The colonies acted accordingly, but at different paces: Matrimonial Causes Act 1858 (SA), Matrimonial Causes Act 1860 (Tas), Matrimonial Causes Act 1861 (Vic), Matrimonial Causes Act 1863 (WA), Matrimonial Causes Act 1865 (Q), Matrimonial Causes Act 1873 (NSW). This legislation did not need to abolish in the colonies the non-existent jurisdiction of ecclesiastical courts. Rather, it conferred jurisdiction in matrimonial causes on the Supreme Courts. The differential treatment in the 1857 UK Act between the grounds of divorce available to husbands and wives was carried into the initial colonial legislation. But there followed attempts by New South Wales and Victoria to assimilate and expand the grounds for divorce; the Governor's Instructions required these Bills to be reserved for the Royal Assent on advice of the Imperial Government and, initially, in circumstances of considerable controversy in the colonies, the Royal Pressure for reform of legislation respecting divorce was, however, maintained, particularly in the more populous colonies of New South Wales and Victoria83, and eventually succeeded. In Victoria The Divorce Act 1889 provided extended grounds for divorce84. Advocates of the women's movement in New South Wales were able to press for further liberalisation of the laws, despite the opposition of the churches85. The Divorce Amendment and Extension Act 1892 81 The Despatch by Lord Stanley to the Governor of New South Wales for presentation to both Houses of the Parliament is reproduced in Votes and Proceedings of the Parliament of New South Wales 1859-1860, vol 4 at 1169. 82 Quick and Garran, The Annotated Constitution of the Australian Commonwealth, 83 See the account given by Finlay, To Have But Not to Hold, (2005), Ch 3. 84 Which included adultery, desertion for a period of three years and upwards, habitual drunkenness, habitual cruelty to a wife, conviction for attempt to murder a wife, conviction for having assaulted a wife with intent to cause grievous bodily harm, or repeated assaults on a wife: The Divorce Act 1889 (Vic), s 11. 85 Grimshaw et al, Creating a Nation, (1994) at 172. Crennan (NSW) was expressed in terms similar to those of the Victorian Act. The extended grounds gave colonial women greater access to divorce than their contemporaries in the United Kingdom. Conclusions What was the immediate significance of these 19th century legislative measures for the continued vitality of the reasoning upon which Hale in the 17th century had based his proposition respecting "rape in marriage"? In answering that question it is convenient first to repeat what was said by the Supreme Court of New Jersey in State v Smith86 as follows: "We believe that Hale's statements concerning the common law of spousal rape derived from the nature of marriage at a particular time in history. Hale stated the rule in terms of an implied matrimonial consent to intercourse which the wife could not retract. This reasoning may have been persuasive during Hale's time, when marriages were effectively permanent, ending only by death or an act of Parliament87. Since the matrimonial vow itself was not retractable, Hale may have believed that neither was the implied consent to conjugal rights. Consequently, he stated the rule in absolute terms, as if it were applicable without exception to all marriage relationships. In the years since Hale's formulation of the rule, attitudes towards the permanency of marriage have changed and divorce has become far easier to obtain. The rule, formulated under vastly different conditions, need not prevail when those conditions have changed." To that may be added the statement in that case88: "If a wife can exercise a legal right to separate from her husband and eventually terminate the marriage 'contract', may she not also revoke a 'term' of that contract, namely, consent to intercourse?" 86 426 A 2d 38 at 42 (1981). 87 Clark, The Law of Domestic Relations in the United States, (1968) at 280-282. 88 426 A 2d 38 at 44 (1981). Crennan In similar vein is the statement made from the New South Wales Supreme Court bench by Sir William Windeyer in 1886, in which he regretted that while the State regarded marriage as a civil contract and in this case the contract had been destroyed by the husband "having done his best to degrade you", by reason of the then limited grounds of divorce then available to her in New South Wales, she had no redress89. Insofar as Hale's proposition respecting the nature of the matrimonial contract was derived from an understanding of the principles applied by the ecclesiastical courts, the following may be said. First, as Lord Brougham observed in R v Millis90: "[Marriage] was always deemed to be a contract executed without any part performance; so that the maxim was undisputed, and it was peremptory, 'Consensus, non concubitus, facit nuptias vel matrimonium.'" Secondly, with respect to the exercise of their jurisdiction in suits for restitution of conjugal rights, the ecclesiastical courts did not accept that the exercise of the mutual rights of spouses was to be an occasion of abuse and degradation. The following further remarks of Brennan J in R v L91 are in point: "To acknowledge a connubial obligation not to refuse sexual intercourse wilfully and persistently is to acknowledge that the giving of consent to acts of sexual intercourse is necessary to perform the obligation. It would have been inconsistent with such an obligation to hold that, on marriage, a wife's general consent to acts of sexual intercourse has been given once and for all. If no further consent was required on the part of a wife, how could there be a wilful and persistent refusal of sexual intercourse by her? The ecclesiastical courts never embraced the notion of a general consent to sexual intercourse given once and for all on marriage by either spouse." Thirdly, and in any event, in the Australian colonies jurisdiction with respect to matrimonial causes was not part of the general inheritance of the Supreme 89 Bennett, "The Establishment of Divorce Laws in New South Wales", (1963) 4 Sydney Law Review 241 at 248. 90 (1844) 10 Cl & F 534 at 719 [8 ER 844 at 913]. 91 (1991) 174 CLR 379 at 396. Crennan Courts. They received such jurisdiction only by local statute in the second half of the 19th century. That legislation, as interpreted in the period before the enactment of the CLC Act in 1935, did not require, for compliance with a decree for restitution of conjugal rights, more than matrimonial cohabitation; in particular the duty of matrimonial intercourse was one of imperfect legal obligation because it could not be compelled by curial decree92. Finally, although Hale did not expressly rely upon it, his proposition respecting irrevocable consent could not have retained support from any common law concept that the wife had no legal personality distinct from that of her husband. This was never wholly accepted by the Court of Chancery, given the development there of the trust. The references earlier in these reasons to the significance of the married women's property legislation93 indicate that, by statute, the attitudes of the equity jurisdiction were given effect in the latter part of the 19th century to a significant degree throughout the legal system in England and the Australian colonies. To that may be added the significance of the conferral by the Commonwealth Franchise Act 1902 (Cth) of the universal adult franchise94. It has been said that the gaining of suffrage for women in South Australia in 1894 was critical to the national suffrage movement95. At the turn of the 20th century, suffragists in England were looking to what had been achieved in Australia96. An English suffragist, Dame Millicent Garrett Fawcett, writing in 1911 when women in England had not yet been granted suffrage, observed that97: 92 Bartlett v Bartlett (1933) 50 CLR 3 at 12, 15, 18. 94 See Roach v Electoral Commissioner (2007) 233 CLR 162 at 195-196 [70]-[71]; [2007] HCA 43. 95 Oldfield, Woman Suffrage in Australia, (1992) at 213 (Western Australia followed in 1899 through the passage of the Constitution Acts Amendment Act 1899 (WA)). 96 See for example Zimmern, Women's Suffrage in Many Lands, (1909) at 160; Fawcett, Women's Suffrage: A Short History of a Great Movement, (1911) at 59. 97 Fawcett, Women's Suffrage: A Short History of a Great Movement, (1911) at 59. Crennan "In the Commonwealth of Australia almost the first Act of the first Parliament was the enfranchisement of women. The national feeling of Australia had been stimulated and the sense of national responsibility deepened by the events which led to the Federation of the Independent States of the Australian Continent." By 1930 Isaacs J was able to say that98: "women are admitted to the capacity of commercial and professional life in most of its branches, that they are received on equal terms with men as voters and legislators, that they act judicially, can hold property, may sue and be sued alone". By the time of the enactment in 1935 of the CLC Act, if not earlier (a matter which it is unnecessary to decide here), in Australia local statute law had removed any basis for continued acceptance of Hale's proposition as part of the English common law received in the Australian colonies. Thus, at all times relevant to this appeal, and contrary to Hale's proposition, at common law a husband could be guilty of a rape committed by him upon his lawful wife. Lawful marriage to a complainant provided neither a defence to, nor an immunity from, a prosecution for rape. To reach that conclusion it is unnecessary to rely in general terms upon judicial perceptions today of changes in social circumstances and attitudes which had occurred in this country by 1935, even if it were an appropriate exercise of legal technique to do so. The conclusion follows from the changes made by the statute law, as then interpreted by the courts, including this Court, before the enactment of the CLC Act. Order The appeal should be dismissed. 98 Wright v Cedzich (1930) 43 CLR 493 at 505; [1930] HCA 4. HEYDON J. The events giving rise to this appeal allegedly took place in 1963. At that time it was universally thought in Australia that a husband could not be convicted of having sexual intercourse with his wife without her consent save where a court order operated or where there were other exceptional circumstances. This immunity from conviction was thought to exist because Sir Matthew Hale, who died in 1676, had asserted its existence in The History of the Pleas of the Crown, published in 1736. The reason he assigned was that on marriage wives irrevocably consented to sexual intercourse with their husbands99. Below the immunity will be called "the immunity" or "Hale's proposition". By what warrant did the State of South Australia seek in 2010 to prosecute the appellant for allegedly having sexual intercourse with his wife without her consent more than 47 years earlier? A sufficient answer to that question would be: "It had none, for the reasons that Bell J powerfully states." However, in deference to the arguments put by South Australia, a fuller answer should be given. One matter must be put aside, though the appellant may wish to rely on it at a later stage in these proceedings. This appeal is not directly concerned with any oppressiveness that results from the delay in prosecution. But that tardiness does support the appellant's submission that in 1963 there was no crime of rape for which he could be charged. One primary explanation which South Australia gave to the District Court for its delay was that the immunity created considerable doubt as to whether the appellant was liable for rape. Yet prosecutors have to demonstrate with clarity that the crimes they charge exist. South Australia tells the District Court that the appellant's liability was thought doubtful. It tells this Court that it is certain. South Australia's stance in the District Court is inconsistent with its dogmatic and absolute submissions in this Court. The first of its submissions in this Court was that the immunity never existed100. The second, alternative, submission was that even if the immunity had existed at one time, it had ceased to exist at some indeterminate time before South Australia put only those two submissions. It did not put a third submission – that even if the immunity existed and even if it had not ceased to exist up to now, it should be abolished now. That was a course which the 99 See below at [172]. 100 The first submission is discussed below at [71]-[113]. 101 The second submission is discussed below at [114]-[161]. English courts took in 1991102. It is a course which would raise issues different in some respects from those discussed below. South Australia's first submission: the detailed contentions South Australia's first submission was that it had never been the law, in England or in Australia, that a husband was immune from prosecution for having sexual intercourse with his wife without her consent. The Commonwealth supported that submission. It was based on a number of contentions. The first group of contentions centred on the following points. Hale's work was published 60 years after he died. The relevant part had not been revised before his death. Hale had not supported his statement with any reference to authority. Standing alone his proposition would not constitute the common law. At best it reflected "his view of a custom in 17th century England." As Blackstone asserted, "judicial decisions are the principal and most authoritative evidence, that can be given, of the existence of such a custom as shall form a part of the common law."103 A second group of contentions concerned ecclesiastical law. In the ecclesiastical courts there was no support for Hale's proposition. In ecclesiastical law each spouse had a right to sexual intercourse, but it was only to be exercised reasonably and by consent. This undermined the foundation of Hale's proposition. It revealed him to be mistaken in thinking that the wife's consent was irrevocable. It caused his proposition to be affected by "frailty". South Australia then turned to the history of Hale's proposition after he had enunciated it. It relied on Lord Lowry's very extreme statement that "Hale's doctrine had not been given the stamp of legislative, judicial, governmental and academic recognition."104 So far as "academic recognition" was concerned, South Australia submitted that the only statement of support for the immunity in absolute terms was that of Hale, and that there was no support for it in Blackstone. So far as "judicial … recognition" was concerned, South Australia submitted that Hale's proposition "was never authoritatively declared as part of the common law in Australia." It also submitted that no case had Hale's 102 R v R [1992] 1 AC 599. 103 Commentaries on the Laws of England, (1765), bk 1 at 69. 104 C (A Minor) v Director of Public Prosecutions [1996] AC 1 at 38. proposition as its ratio decidendi. There were only dicta and assumptions that the proposition existed. In some of the cases stating the dicta or resting on the assumptions Hale's proposition was cut down. There were also dicta to the contrary. Hale's proposition was further said to be inconsistent with some authorities. South Australia did not advance detailed submissions about any lack of "legislative" and "governmental" recognition. Perhaps it is hard to say much in support of negative propositions. However, there is a lot to be said against those two. Finally, South Australia submitted that the immunity was completely outdated and offensive to human dignity. It is convenient to deal with South Australia's first submission under the following headings. Defects in Hale's statement of the immunity It is immaterial that Hale's work was published 60 years after his death, that the reference to the immunity appears in a part of it which Hale had not revised, and that he stated no elaborate reasons justifying the immunity. Hale's work is capable of being an accurate account of the law of his day despite these things. There is no reason to suppose that, had he revised the relevant part of his work, he would have considered it desirable to change it. South Australia is not alone in complaining about Hale's failure to cite authorities105. But it is anachronistic to do so. The modern approach to precedent was only struggling to be born in Hale's day106. Hale himself said107: "the decision of courts of justice, though by virtue of the laws of this realm they do bind, as a law between the parties thereto, as to the particular case in question, till reversed by error or attaint; yet they do not 105 Brooks, "Marital Consent in Rape", [1989] Criminal Law Review 877 at 878-883. The first maker of this criticism appears to have been Field J in R v Clarence (1888) 22 QBD 23 at 57. 106 Williams, "Early-modern judges and the practice of precedent", in Brand and Getzler (eds), Judges and Judging in the History of the Common Law and Civil Law: From Antiquity to Modern Times, (2012) 51. 107 The History of the Common Law of England, 6th ed (1820) at 89-90 (emphasis in original). make a law, properly so called; – for that only the king and parliament can do; yet they have a great weight and authority in expounding, declaring, and publishing what the law of this kingdom is; especially when such decisions hold a consonancy and congruity with resolutions and decisions of former times. And though such decisions are less than a law, yet they are a greater evidence thereof than the opinion of any private persons, AS SUCH, whatsoever". Hale's work often does not contain the dense citation of authorities characteristic of modern books. Indeed, many parts of it refer to only a few authorities. That is so of the passages in which he discusses the crime of rape. Hale did not cite direct authority for the immunity, or for his justification of the immunity. Whether there were in fact "authorities" of any kind to be cited on the present point is a matter which a 21st century court cannot easily deal with. It would need the assistance of close research into the question by modern legal historians with high expertise108. Subject to that matter, Hale did point out that there was authority for other propositions that he asserted. Those propositions were not inconsistent with the immunity. To some extent they supported it109. In view of Hale's high reputation for research into the criminal litigation of his day110, it seems likely that in practice husbands were not prosecuted for raping their wives, so that there were no authorities to cite. Even nowadays, a proposition can be correct though no precedent supports it. Ethical and tactical considerations prevent counsel from arguing what they perceive to be the unarguable. There are some propositions which seem too clear to the profession to be contradicted by argument. Propositions of that kind are widely accepted as good law. Subject to the research difficulties referred to in the previous paragraph, a lack of support from earlier authors such as Coke is, as Bell J explains, not significant and does not reveal Hale to be wrong111. Windeyer J once said: "an accepted rule of law is not to be overthrown by showing that history would not support it"112. None of the defects which 108 Australian Crime Commission v Stoddart (2011) 86 ALJR 66 at 81 [70]; 282 ALR 620 at 637; [2011] HCA 47. 109 Lanham, "Hale, Misogyny and Rape", (1983) 7 Criminal Law Journal 148 at 153-156. See also below at [208]. 110 See below at [209]. 111 See below at [200]. 112 Commissioner for Railways (NSW) v Scott (1959) 102 CLR 392 at 447; [1959] HCA 29. supposedly existed in Hale's statement of the immunity prevented it from being an accepted rule of law. Hale and ecclesiastical law South Australia's appeal to ecclesiastical law encounters two difficulties. The first is that while the civil law of marriage was a matter for the ecclesiastical courts, the criminal law was a matter for the common law courts. Thinking in the ecclesiastical courts does not necessarily vitiate an account of the criminal law as administered in the common law courts. The second difficulty is that ecclesiastical law in the 17th century is another field not to be entered without expert assistance. In R v L113 Brennan J wrote at some length about ecclesiastical law. But the sources to which he referred were largely modern. None were contemporary with or earlier than Hale. Lord Lane CJ in R v R114 and Mason CJ, Deane and Toohey JJ in R v L115 pointed out that in Popkin v Popkin116 Sir William Scott (later Lord Stowell) stated: "The husband has a right to the person of his wife, but not if her health is endangered." Mason CJ, Deane and Toohey JJ commented that this showed that "even in the ecclesiastical courts, the obligation to consent to intercourse was not asserted in unqualified terms." If so, it also shows that Hale's proposition was not completely wrong. On the other hand, Brennan J did not think that Sir William Scott's statement showed that a husband had "a right to the person of his wife" without consent117. The submissions of the parties in this appeal did not take the matter further than Brennan J's researches took it. The parties did not cite any expert material throwing light on ecclesiastical law in or before Hale's time. For that reason, it is imprudent to examine it. 113 (1991) 174 CLR 379 at 391-402; [1991] HCA 48. 114 [1992] 1 AC 599 at 604. 115 (1991) 174 CLR 379 at 389. 116 (1794) 1 Hagg Ecc 765n [162 ER 745 at 747]. 117 R v L (1991) 174 CLR 379 at 398. Post-Hale writers South Australia submits that there is no statement of support for Hale's proposition except Hale himself, and that Hale's proposition has received no "academic recognition". That submission is extremely ambitious. It is also utterly incorrect. It is true that Hale's proposition is neither confirmed nor denied by Blackstone or Hawkins. Blackstone was writing at a considerable level of generality about much wider issues than those Hale wrote about. Whether or not it is right to describe Hawkins as "a somewhat second-rate institutional writer"118, it was not open to him to take up Hale's proposition in the first edition of his treatise. It appeared in 1716. Hale's work was not published until 1736. South Australia echoes the Crown's complaint to the House of Lords in R v R119 that the first writer to refer to the immunity after Hale was East in 1803. That is, however, less than 70 years after History of the Pleas of the Crown was published in 1736. In truth, Hale has enjoyed a great reputation. Lord Denning called him "the great Chief Justice Sir Matthew Hale"120. Hale's proposition garnered massive support from professional writers after 1803, and, as academic like too. lawyers emerged, Glanville Williams121, Smith and Hogan122 and Cross and Jones123 acknowledged the correctness of Hale's proposition. Like others who have attacked courts that relied on Hale's proposition124, South Australia failed to grapple with this uncomfortable point. Leading modern writers them from 118 Seaborne Davies, "The House of Lords and the Criminal Law", (1961) 6 Journal of the Society of Public Teachers of Law 104 at 110. 119 [1992] 1 AC 599 at 614. 120 Sykes v Director of Public Prosecutions [1962] AC 528 at 558. 121 Textbook of Criminal Law, 2nd ed (1983) at 236; "The problem of domestic rape", (1991) 141 New Law Journal 205 and 246. 122 Criminal Law, 6th ed (1988) at 430-432 (and all earlier editions). 123 Card (ed), Cross and Jones: Introduction to Criminal Law, 9th ed (1980) at 177 [9.2] (and all earlier editions). 124 For example, Brooks, "Marital Consent in Rape", [1989] Criminal Law Review 877 One source of law is "informed professional opinion"125. Where there is little authority on a question of law, the opinions of specialist writers, particularly their concurrent opinions, are very important in revealing, and indeed in establishing, the law. That is particularly true of books written by practitioners. But it has force in relation to well-respected academic writers as well126. As Lord Reid said: "Communis error facit jus may seem a paradox but it is a fact."127 Owen J put the matter with trenchant simplicity in relation to the first edition of Archbold in 1822. It said128: "A husband … cannot be guilty of a rape upon his wife." Owen J said129: "It seems to me that the consequences of that statement is this: if he was right, then practitioners would follow what he said. Equally, however, if he was wrong, practitioners would follow what he said." Hale's proposition in the courts South Australia relied on Lord Lowry's statement that Hale's proposition had not been "given the stamp of … judicial … recognition."130 South Australia greatly exaggerated the extent to which the authorities cast doubt on the immunity before 1991, when the House of Lords decided it should be abolished131, and four members of this Court said that it had ceased to represent the law132. An illustration is provided by South Australia's submission in relation to R v Clarence: 125 Jones v Secretary of State for Social Services [1972] AC 944 at 1026 per Lord Simon of Glaisdale. 126 Australian Crime Commission v Stoddart (2011) 86 ALJR 66 at 84-98 [90]-[138]; 282 ALR 620 at 641-660. 127 "The Judge as Law Maker", (1972) 12 Journal of the Society of Public Teachers of Law 22 at 25. 128 Archbold, A Summary of the Law Relative to Pleading and Evidence in Criminal Cases, (1822) at 259. 129 R v R – (rape: marital exemption) [1991] 1 All ER 747 at 748. 130 C (A Minor) v Director of Public Prosecutions [1996] AC 1 at 38. 131 R v R [1992] 1 AC 599. 132 R v L (1991) 174 CLR 379 at 390 and 405. "The exemption was first the subject of judicial comment in R v Clarence.133 In R v Clarence, seven of the thirteen judges declined to comment on the issue;134 of the six judges who did, two of them reiterated and confirmed the marital rape proposition,135 three of them questioned or qualified it,136 and another briefly adverted to it without engaging in it.137 The comments of the judges in R v Clarence were obiter dicta, however, taken as a whole they indicate that even as at 1888 there existed no settled view." It is true that the few things said about Hale's proposition in R v Clarence were dicta. The submission is otherwise very misleading. It suggests that only A L Smith J and Pollock B favoured Hale's proposition. In fact the position is as follows. Stephen J supported Hale's proposition138. The following seven judges concurred: A L Smith J139, Mathew J140, Grantham J141, Manisty J142, Wills J146, Huddleston B143, Pollock B144 and Lord Coleridge CJ145. 133 (1888) 22 QBD 23. 134 Lord Coleridge CJ, Huddleston B, Grantham, Manisty and Mathew JJ (quashing the conviction); Charles and Day JJ (dissenting because upholding the conviction). 135 A L Smith J and Pollock B (quashing the conviction). 136 Wills J (quashing the conviction) and Hawkins and Field JJ (dissenting because upholding the conviction). 137 Stephen J (quashing the conviction). 138 R v Clarence (1888) 22 QBD 23 at 46. 139 R v Clarence (1888) 22 QBD 23 at 37. 140 R v Clarence (1888) 22 QBD 23 at 38. 141 R v Clarence (1888) 22 QBD 23 at 46. 142 R v Clarence (1888) 22 QBD 23 at 55. 143 R v Clarence (1888) 22 QBD 23 at 56. 144 R v Clarence (1888) 22 QBD 23 at 61-62 and 63-64. 145 R v Clarence (1888) 22 QBD 23 at 66. 146 R v Clarence (1888) 22 QBD 23 at 33. Hawkins J147 and Field J148 each stated or left open the possibility that in some circumstances a husband could be convicted of raping his wife. But at least the latter two judges plainly thought that Hale's proposition was correct in some circumstances. Day J concurred with Hawkins J149. Charles J concurred with Field J150. its operation South Australia correctly submitted that English trial judges assumed that Hale's proposition was correct, but qualified in special circumstances. Examples of special circumstances included where there was a court non-cohabitation order151, or a decree nisi of divorce had effectively terminated the marriage152, or the husband had given an undertaking to the court not to molest the wife153, or there was an injunction restraining the husband from molesting or having sexual intercourse with the wife154, or there was an injunction and a deed of separation (even though the injunction had expired)155. The outer limit of these exceptions was unilateral withdrawal from cohabitation coupled with a clear indication that the wife's consent to sexual intercourse was On one view, each of the courts that reached these decisions was attempting to achieve justice by tailoring the absolute nature of Hale's proposition to the circumstances before it. Even if the wife could be said to have 147 R v Clarence (1888) 22 QBD 23 at 51. 148 R v Clarence (1888) 22 QBD 23 at 57-58. 149 R v Clarence (1888) 22 QBD 23 at 55. 150 R v Clarence (1888) 22 QBD 23 at 61. 151 R v Clarke [1949] 2 All ER 448. The judge was Byrne J, of whom Owen J said in R v R – (rape: marital exemption) [1991] 1 All ER 747 at 749: "Those who appeared before him will know that he was a judge of the highest repute. As a criminal lawyer, there were not many to excel him in his day." In R v Miller [1954] 2 QB 282 at 289 Lynskey J concurred with R v Clarke. 152 R v O'Brien [1974] 3 All ER 663. 153 R v Steele (1976) 65 Cr App R 22. 154 R v Steele (1976) 65 Cr App R 22 at 25; R v McMinn [1982] VR 53. 155 R v Roberts [1986] Crim LR 188. 156 R v R – (rape: marital exemption) [1991] 1 All ER 747 at 754. given consent by marriage, in those cases it had been withdrawn as a matter of practical reality either because the wife had successfully invoked court process or because the spouses had reached a formal agreement negating consent. Another view is that these cases travel down a road "potholed with ever greater illogicalities"; produce "a gaggle of technical and anomalous distinctions" and "absurdity"; and lack any "relationship to the real world."157 But even if this latter view is correct, it is adverse to South Australia's position. The cases show the enduring toughness of Hale's proposition in legal thought. To destroy Hale's proposition might eliminate formal anomalies and technicalities. But it was a course which many judges found unattractive. Instead they turned their minds to devising narrow exceptions. In two of the cases just referred to, the correctness of Hale's proposition, in the absence of special circumstances, was specifically acknowledged by quotation158. In another, Hale's proposition was thought to be correct at common law though not necessarily satisfactory159. And in R v Miller160, where the prosecution failed to prove any special circumstance and could point to no more than the wife having petitioned for divorce, Hale's proposition was applied. R v Miller renders false South Australia's submission that "no binding precedent can be found where [Hale's] principle represented the ratio decidendi." Contrary to that submission, R v Miller was an "authoritative declaration of the common law on the matter." R v Miller also demonstrates that McGarvie J was wrong to say in R v McMinn161: "There does not seem to have been any recent case in which it was considered whether [Hale's proposition] remains part of the common law." R v Miller was a binding precedent in England until 1991. A second case which applied Hale's proposition is R v J – (rape: marital exemption)162. There are numerous cases, including Australian cases, in which courts have assumed Hale's proposition to be correct at common law163. One is R v 157 Brooks, "Marital Consent in Rape", [1989] Criminal Law Review 877 at 880-882. 158 R v Clarke [1949] 2 All ER 448 at 448; R v Steele (1976) 65 Cr App R 22 at 24. 159 R v McMinn [1982] VR 53 at 55, 57-59 and 61. 160 [1954] 2 QB 282, criticised by Brooks, "Marital Consent in Rape", [1989] Criminal Law Review 877 at 882-883. 161 [1982] VR 53 at 61. 162 [1991] 1 All ER 759. 163 R v Brown (1975) 10 SASR 139 at 141 and 153; R v Cogan [1976] QB 217 at 223; R v Wozniak (1977) 16 SASR 67 at 71; R v Sherrin (No 2) (1979) 21 SASR 250 at 252; R v C (1981) 3 A Crim R 146 at 148-150; R v Caswell [1984] Crim LR 111; (Footnote continues on next page) Kowalski164, in which the English Court of Appeal described Hale's proposition as "clear, well-settled and ancient law". Another is R v Bellchambers165, in which Neasey and Everett JJ said that Hale's proposition "still expresses the common it as "archaic, unjust and they criticised discriminatory"166. A third is Brennan J's statement in R v L167: law", even though "Irrespective of the validity of Hale's reason for declaring that a husband could not be guilty as a principal in the first degree of rape of his wife, it appears that a substantive rule of the common law was established by his declaration." That statement followed more than 10 pages denouncing Hale's reasoning. Thus these last two cases, too, reveal the enduring toughness of Hale's proposition in legal thought. South Australia proffered three authorities that, in its submission, reveal that contrary to Hale's proposition, there was no irrebuttable presumption that on marriage the wife irrevocably consented to sexual intercourse with her husband. In R v Lister168, it was held that while it was lawful for a husband to restrain his wife's liberty where she was making "an undue use" of it, either by "squandering away the husband's estate, or going into lewd company", he could not do so where he had entered into a deed of separation with his wife. In R v Jackson169, the English Court of Appeal held that where a wife refused to live with her husband, he was not entitled to deprive her of liberty by kidnapping her and confining her to his house, even though he had obtained a decree for restitution R v Henry unreported, 14 March 1990 per Auld J: see R v J – (rape: marital exemption) [1991] 1 All ER 759 at 762-763 and Law Commission, Rape within Marriage, Working Paper No 116, (1990) at 97-108; R v Shaw [1991] Crim LR 301; Question of Law Reserved on Acquittal (No 1 of 1993) (1993) 59 SASR 214 at 164 (1987) 86 Cr App R 339 at 341. 165 (1982) 7 A Crim R 463 at 465. 166 (1982) 7 A Crim R 463 at 466. 167 (1991) 174 CLR 379 at 402. 168 (1721) 1 Strange 478 [93 ER 645 at 646]. of conjugal rights. In R v Reid170, that Court held that matrimonial status conferred no immunity on a husband who kidnapped his wife. These cases do not support South Australia's submission. They do not proceed on the basis that on marriage there was a presumption that the wife consented to having her liberty restrained and that she could rebut that presumption by withdrawing her consent. Indeed, in R v Reid171 the Court said of the doctrine in R v Miller that it was "impossible to stretch that doctrine to the extent of saying that on marriage a wife impliedly consents to being taken away by her husband using force or threats of force from the place where she is living." Accordingly, these cases are not inconsistent with Hale's proposition. In 1991, the English Court of Appeal and the House of Lords overturned Hale's proposition172. But it is notable that they did not accept the Crown's submission that "Hale's statement was never the law"173. The rulings of those Courts had retrospective consequences. But they did not hold that Hale's proposition had never been the law. They did not hold that the judgments which had decided, said or assumed that it was correct were wrong at the time they were handed down. Lord Lane CJ said in the Court of Appeal that Hale's proposition had been "accepted as an enduring principle of the common law."174 And the House of Lords altered the law because social conditions had changed quite recently. Hale's proposition was seen as reflecting the society of his day, and its rejection was seen as reflecting the different form which modern society had recently taken175. On that reasoning, Hale's proposition was good law in South Australia in 1963 – a matter relevant to rejection of South Australia's second submission176. 171 [1973] QB 299 at 302. 172 R v R [1992] 1 AC 599. 173 R v R [1992] 1 AC 599 at 602. 174 R v R [1992] 1 AC 599 at 604. 175 R v R [1992] 1 AC 599 at 616. 176 See below at [121]-[161]. Governmental recognition South Australia also relied on Lord Lowry's statement that Hale's proposition "had not been given the stamp of … governmental … recognition."177 That submission too must be rejected. Hale's proposition has received indirect governmental recognition – by the Executive – in two ways. One form of governmental recognition took place in a report of the Criminal Law and Penal Methods Reform Committee of South Australia published in 1976. That report acknowledged that Hale's proposition represented the common law178. It recommended that the immunity be abolished where the event charged took place while the parties were living separately179. There are several other reports before and after the South Australian report also resting on the view that Hale's proposition represented the common law180. Another form of governmental recognition has taken place. Not only in South Australia but in many other places, the authorities did not prosecute charges against husbands accused of raping their wives. This Court was not told of any prosecutions having been brought in England between Hale's time and 1949. In the second half of the 20th century, as exceptions developed to Hale's proposition, there were attempts to prosecute husbands, not for non-consensual 177 C (A Minor) v Director of Public Prosecutions [1996] AC 1 at 38. 178 Criminal Law and Penal Methods Reform Committee of South Australia, Special Report: Rape and Other Sexual Offences, (1976) at 13 [6.2]: see below at [174]. 179 Criminal Law and Penal Methods Reform Committee of South Australia, Special Report: Rape and Other Sexual Offences, (1976) at 15 [6.2.1]. 180 For example, Criminal Law Revision Committee, Sexual Offences, Report No 15, (1984) Cmnd 9213 at 17-18 [2.56]-[2.57]; Law Commission, Rape within Marriage, Working Paper No 116, (1990) at 9-12 [2.8]-[2.10]; American Law Institute, Model Penal Code and Commentaries (Official Draft and Revised Comments), (1980), Pt 2, Art 213 at 271-275, 341-346 and American Law Institute, Model Penal Code: Official Draft and Explanatory Notes, (1985), §213.1(1). The greatest example of this kind, which is not modern but does come from a time when, according to South Australia, legislative changes were being made which would mean that Hale's proposition "crumbled to dust", is the Royal Commission commenting on Stephen's Draft Code: see below at [219]. Sir Rupert Cross thought that Stephen had "one of the highest places" among the makers of English criminal law: "The Making of English Criminal Law: (6) Sir James Fitzjames Stephen", [1978] Criminal Law Review 652 at 661. sexual intercourse with their wives, but for crimes committed in connection with that conduct, such as assault or false imprisonment. So far as these crimes were distinct from sexual intercourse without consent, the prosecutions rested on sound legal thinking, though they were at peril of failing if there were difficulties in establishing that the husband's conduct had gone beyond sexual intercourse without consent181. What the prosecution assumes about the law is not decisive as to what the law is. But it is some guide to the thinking of experienced criminal lawyers. That thinking can be highly persuasive as to what the law is. Legislative recognition Finally, South Australia relied on Lord Lowry's statement that Hale's proposition "had not been given the stamp of legislative … recognition."182 That submission must also be rejected. Some forms of "legislative recognition" are of limited materiality. A statute expressly adopting Hale's proposition in South Australia would have superseded the common law. A statute expressly adopting it outside South Australia would have had slight relevance only to what the common law was in South Australia. Statutes rejecting it would have had little relevance to the position at common law unless they reflected a consistent legislative view of what the public interest demanded183. But there is South Australian legislation recognising Hale's proposition in the sense that it did not interfere with it when there was an occasion to do so. The South Australian Parliament did not adopt the recommendation of the Criminal Law and Penal Methods Reform Committee of South Australia to abolish the immunity when husband and wife were living separately. Instead two provisions relevant to the common law were enacted. First, s 73(3) of the Criminal Law Consolidation Act 1935 (SA) was introduced, removing any presumption that consent to sexual intercourse flowed from marriage. Secondly, s 73(5) was introduced: it prevented a spouse from being convicted not only of rape but also of indecent assault, attempted rape or indecent assault, and assault with intent to commit rape or indecent assault, unless the alleged offence was accompanied by various forms of aggravated conduct184. In substance it 181 See, for example, R v Henry unreported, 14 March 1990 per Auld J, set out in Law Commission, Rape within Marriage, Working Paper No 116, (1990) at 97-108. 182 C (A Minor) v Director of Public Prosecutions [1996] AC 1 at 38. 183 Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49 at 61-63 [23]-[28]; [1999] HCA 67. 184 See below at [175]. overlapped with the common law position precluding convictions of husbands for the conduct of sexual intercourse with their wives without consent. Thus the South Australian Parliament assumed that the immunity existed at common law, and left it in existence. It appears to have gone further in creating an immunity without any common law counterpart for non-aggravated forms of the crimes other than rape to which s 73(5) referred. That state of affairs continued until "Legislative recognition" in places other than South Australia assuming that the immunity existed at common law is relevant to the content of South Australian law – particularly Australian legislation, since there is a single common law in Australia. There are three points to be made. First, in the Code States (Queensland, Tasmania and Western Australia), the definition of rape excluded sexual intercourse by a husband with his wife. The relevant statutes assumed the correctness of Hale's proposition186. Secondly, the numerous changes in State and Territory legislation in the 1970s and 1980s indicated an assumption by each legislature (and by each Executive, which had a large measure of control over what draft legislation was introduced) that Hale's proposition was sound at common law. If not, it would not have been necessary to abolish or qualify it187. Thirdly, Canadian188 and New Zealand189 legislation assumed the correctness of Hale's proposition. An anachronistic and offensive proposition? There are no doubt many criticisms to be made of Hale's proposition if it is to be applied in the circumstances of 2012. But these criticisms do not show that his proposition was necessarily anachronistic or offensive in 17th century circumstances. That would depend on historical analysis which the parties' submissions did not perform. The criticisms therefore do not demonstrate that Hale's proposition was wrong from the outset. They are, however, appropriate arguments to consider when deciding whether Hale's proposition ought to be abandoned. It is a question which legislatures answered affirmatively from the 1980s on. It is not a question which South Australia places before this Court. Whether they are appropriate arguments to consider when deciding whether 185 See below at [176]. 186 See below at [176] n 298. 187 See below at [176]. See also Halabi v Westpac Banking Corporation (1989) 17 NSWLR 26 at 35. 188 See below at [221]. 189 See below at [233]. Hale's proposition dropped out of the law at some point before 1963 is a question which relates to South Australia's second submission. South Australia's first submission rejected It was inherent in South Australia's first submission that all the writers, all the judges, all the government officials, all the law reformers, all the public servants advising Ministers, all the prosecution authorities and all the legislatures who wrote or acted on the assumption that Hale's proposition was the law were wrong. South Australia explicitly adopted a statement to this effect in the Full Court of the Supreme Court of South Australia190. I flatly disagree. South Australia's second submission On the assumption that Hale's proposition was correct for some time after he stated it, South Australia put various contentions denying its applicability in South Australia contended that before 1963 the law had changed so as to nullify Hale's proposition, even though no case had stated this before 1991. This is an unusual invocation of the judicial process. South Australia's contention is different from a contention that this Court should now declare Hale's proposition to be wrong, and do so with effect retrospective to 1963. This latter course presents in an overt form the considerable difficulties which cluster around the making of retrospective changes to the criminal law. South Australia did not choose to tackle these difficulties head on. It did not suggest that this Court should now change the law. Rather, it submitted that the dicta of four Justices in R v L191 recognised that Hale's proposition had ceased to be the law at some time before 1991. South Australia submitted that this time was a time before 1963. In fact, nothing in R v L suggests that the demise of Hale's proposition took place at any specific time before 1991, such as 1963. South Australia's thesis that R v L bound the Full Court of the Supreme Court of South Australia to reach this conclusion must be rejected. South Australia relied on the following arguments as indications that Hale's proposition had ceased to be the law before 1963. South Australia submitted that in R v Jackson192 the denial of the husband's right to use physical coercion on his wife suggested that the immunity 190 R v P, GA (2010) 109 SASR 1 at 9 [43]. 191 (1991) 174 CLR 379 at 390 and 405. 192 [1891] 1 QB 671: see above at [101]. had disappeared from the law. But it does not follow that a husband lost the immunity where he had not employed physical coercion against his wife. South Australia also submitted that Hale's proposition was based on the doctrine of coverture – that the legal status of a wife is assimilated with that of her husband. And it submitted that by the turn of the 20th century the law had come to acknowledge the rights of married women as independent of their husbands' rights. In effect, it submitted that so many inroads had been made on the doctrine of coverture that it could no longer support Hale's proposition. This submission has the drawback that Hale did not base his proposition on the doctrine of coverture. However, the developments on which South Australia relied could be used, and to a degree were used, to support an argument that by the mid-20th century the rights and privileges of married women in Australia were inconsistent with any theory that on marriage wives gave their husbands irrevocable consent to sexual intercourse. South Australia advanced detailed submissions on the capacity of wives, gained by statute, to own property, to sue and be sued, to vote, to have custody of children, and to compel payment of and be compelled to pay child maintenance. It also relied on the termination by statute of discrimination between husbands and wives in relation to the grounds of divorce. In that way South Australia advances an argument for permitting the appellant to be prosecuted now for conduct which allegedly occurred in 1963. Whether it should be accepted depends on four matters. One is whether in fact the changes in the rights and privileges of wives by 1963 were, to use the words of South Australia's written submissions, "entirely inconsistent with the principle that a wife gave irrevocable consent to sexual intercourse with her husband upon marriage." A second concerns the need for certainty in the criminal law. A third concerns whether South Australia's argument could, in a practical sense, work a retrospective change in criminal law. A fourth is whether the task being undertaken is appropriate for the courts as distinct from the legislature. It is convenient to deal with these points in order. Is there inconsistency between the modern rights and privileges of wives and the immunity of husbands for rape? Bell J gives convincing reasons for answering this question in the negative193. Some ideas which tend to render Hale's proposition anachronistic can be discerned in 19th and early 20th century legislation. But the crucial triggers that would push Hale's proposition into disfavour arose in the 1970s. Before that decade there had been some questioning by lawyers of the stated 193 See below at [224]-[248]. justification for Hale's proposition. In that decade questioning began to grow about whether the proposition should be abolished by the legislature. The questioning grew as public concern about the law of rape in general and marital rape in particular began to rise. Law reform agencies began to examine numerous problems in detail. Legislative changes of different kinds were introduced. One trigger was the controversial decision in R v Morgan194 that a mistaken but honest belief that the victim had consented to intercourse was a defence to a rape charge, whether or not that belief was reasonable. R v Morgan was decided on 30 April 1975, seven months before the then Attorney-General for the State of South Australia requested the Criminal Law and Penal Methods Reform Committee of South Australia to report on the law relating to rape and other sexual offences. It was the very first topic the Committee dealt with195. Another trigger concerned whether warnings about the desirability of finding corroboration for the evidence of those complaining that they had been raped rested on unsatisfactory stereotyping. Another trigger was discontent about the rules relating to the cross-examination of complainants about their sexual histories. There were many other issues about which debates began to widen and intensify in those years. The immunity was only one of them. Further, the reasons underlying the legislation which has altered the status of wives over the last 150 years are not necessarily inconsistent with the immunity. To describe Hale's proposition as creating a presumption which no longer has any foundation, and as a fiction not forming part of the common law196, overlooks the fact that a common law rule can rest on a fiction, particularly when the rule in question develops a new and non-fictitious basis. As Lord Sumner observed197: "an established rule does not become questionable merely because different conjectural justifications of it have been offered, or because none is forthcoming that is not fanciful." A fortiori, an established rule does not become questionable merely because a justification which appealed to the minds of lawyers more than 300 years ago has ceased to have appeal now. In Australia, the controversy has been resolved. The resolution lies in abolition of the immunity. Abolition came by degrees. It also came from legislatures. In England, on the other hand, the first decision to abolish the immunity was made by a judge – Simon Brown J, in 1990198. Rougier J, sitting alone, at once refused 195 Criminal Law and Penal Methods Reform Committee of South Australia, Special Report: Rape and Other Sexual Offences, (1976) at 2-8 [2]. 196 R v L (1991) 174 CLR 379 at 405. 197 Admiralty Commissioners v SS Amerika [1917] AC 38 at 56. 198 R v C – (rape: marital exemption) [1991] 1 All ER 755. This was a controversial decision. to follow it199. Then the immunity was abolished by the Court of Appeal and the House of Lords in R v R in 1991. The House of Lords decision has been supported on the ground that Hale's proposition was one which "nobody defended on the merits."200 That, however, is not true201. It is true to say, though, that R v R was based, as Lord Lowry later said, "on a very widely accepted modern view of marital rape"202. But the fact that an idea is very widely accepted does not mean that an inference from it automatically becomes a rule of law. The fact that a rule of law is disliked does not mean that it has ceased to be the law. The fact that a rule of law favourable to the accused is disliked does not mean that the courts rather than the legislature should abolish it. Indeed, after the English courts abolished the immunity, Parliament did as well203, once the matter had been considered by the Law Commission204. And the fact that very many people have disliked a rule of law favourable to the accused for a long time does not mean that it has ceased to be the law at some time in the past. The Permanent Court of International Justice said, in a somewhat different context, in Consistency of Certain Danzig 199 R v J – (rape: marital exemption) [1991] 1 All ER 759. 200 Spencer, "Criminal Law", in Blom-Cooper, Dickson and Drewry (eds), The Judicial House of Lords 1876-2009, (2009) 594 at 604. 201 See Morris and Turner, "Two Problems in the Law of Rape", (1954) 2 University of Queensland Law Journal 247 at 258-259; Howard, Australian Criminal Law, (1965) at 146; Criminal Law and Penal Methods Reform Committee of South Australia, Special Report: Rape and Other Sexual Offences, (1976) at 14 [6.2]; American Law Institute, Model Penal Code and Commentaries (Official Draft and Revised Comments), (1980), Pt 2, Art 213 at 345; Criminal Law Revision Committee, Sexual Offences, Report No 15, (1984) Cmnd 9213 at 21 [2.69]. As late as 15 February 1991, just before the Court of Appeal decision of 14 March 1991 and the House of Lords decision of 23 October 1991 abolishing the immunity, Glanville Williams contended in "The problem of domestic rape", (1991) 141 New Law Journal 205 and 246, that husbands who had non-consensual intercourse with their wives should not be guilty of rape, but should be liable to prosecution for a new statutory crime. 202 C (A Minor) v Director of Public Prosecutions [1996] AC 1 at 38. 203 Criminal Justice and Public Order Act 1994 (UK), s 142, inserting a new s 1 of the Sexual Offences Act 1956 (UK). 204 Law Commission, Criminal Law: Rape within Marriage, Law Com No 205, Legislative Decrees with the Constitution of the Free City205, "[s]ound popular feeling is a very elusive standard." And mere popular feeling, however widespread, is a very unsafe standard to apply in relation to claims that common law rules have fallen into desuetude. Professor Robertson has contrasted R v R with C (A Minor) v Director of Public Prosecutions, in which the House of Lords declined to alter the common law rule that there is a rebuttable presumption that a child aged between 10 and 14 is doli incapax206. He correctly noted that the speeches in R v R contained "almost no argument", only "a bald statement"207. He argued that R v R rested on "the assumption, though it is an untested one, that there is wide consensus in the general public on the question of marital rape."208 He also argued that Lord Lowry's attempt to reconcile a change in the criminal law in R v R with a decision not to change it in C (A Minor) v Director of Public Prosecutions was "specious"209. He said210: "The abolition of the rule on rape, though occasioned by a rape where the man and wife were separated, would in fact apply inside an ongoing marriage. It is sociologically extremely unlikely that this view would command anything like as much support amongst the mass public as would a rule that allowed the conviction of thirteen-year-old auto-thieves. The fact that there had been several cases where judges had attempted to convict husbands for rape is on par with the attempt by the Divisional Court to change the doli incapax rule, where there was extensive quotation from judges who had wanted to but were dutiful to precedent. What is true is that liberal elite opinion was uniform in the rape context, and largely missing in the criminal capacity case. Asked how to square the two results, one Law Lord who had been a member of the bench in C but not in R v R threw his hands in the air and admitted he could not imagine how they squared it. Another though, who had heard C, indicated that his 205 Advisory Opinion, (1935) PCIJ (Ser A/B) No 65 at 53 per Sir Cecil Hurst (President), Judge Guerrero (Vice-President) and Judges Rolin-Jaequemyns, Fromageot, de Bustamante, Altamira, Urrutia, van Eysinga and Wang. 207 Judicial Discretion in the House of Lords, (1998) at 119. 208 Judicial Discretion in the House of Lords, (1998) at 120. 209 Judicial Discretion in the House of Lords, (1998) at 121. 210 Judicial Discretion in the House of Lords, (1998) at 121. decision was prompted by a desire to force the Government's hand and make it legislate." (emphasis in original) The task of assessing public opinion, or even the full range of legal opinion, whether now or in the past, is not an enterprise that is easy for courts to carry out. "The court does not, and cannot, carry out investigations or enquiries with a view to ascertaining whether particular common law rules … command popular assent."211 The question is not whether the view which the House of Lords stated in R v R about the general public's opinion is correct. The point is that if the general public's opinion is a relevant criterion, it is a criterion for the legislature to consider, not the courts212. Certainty in the criminal law Those who seek to foster the rule of law prize certainty. Ordinarily, certainty in the common law is assisted by the doctrine of precedent. Normally, a common law rule is supported by authorities. If an intermediate or ultimate appellate court decides to change the rule, it overrules the authorities and its decision creates a new binding authority. South Australia's submission is not that Hale's proposition be rejected, so that this Court's decision would be a new binding authority with retrospective effect. Instead South Australia submits that at some time which is not clearly specified, Hale's proposition ceased to be the law. At some time in the past that which had a solid existence is said to have dissolved into nothingness. In State Government Insurance Commission v Trigwell213, Gibbs J said: "Although the rules of the common law develop as conditions change, a settled rule is not abrogated because the conditions in which it was formulated no longer exist. It is now fashionable to criticize the rule in Searle v Wallbank[214] as anachronistic, inconsistent with principle and unsuitable to modern conditions, but it is by no means obvious that it would be a reasonable and just course simply to abolish the rule. The 211 State Government Insurance Commission v Trigwell (1979) 142 CLR 617 at 633 per Mason J; [1979] HCA 40. 212 See below at [128]-[129] and [146]-[150] for other arguments favouring legislative change in the criminal law over judicial change. 213 (1979) 142 CLR 617 at 627. See also Mason J at 633 (otherwise than in "a simple or clear case"). question whether the rule should be altered, and if so how, is clearly one for the legislatures concerned rather than for the courts." A fortiori, it does not follow from anachronism that a rule simply dissolves without any court ruling at the time it dissolved, leaving its dissolution to be detected by a court many years or decades later. To the extent that they may be changed retrospectively, uncertainty is inherent in common law rules. But the standard technique is to make the change in a particular case. It is announced as having happened at the time of that case. Even though it operates retrospectively, that retrospective operation tends to affect only quite recent conduct. That was so in R v R and other cases following it: the conduct charged took place only a short time before the law changed. At least in non-criminal fields, if the change is the result of altering "the law's direction of travel by a few degrees" as distinct from setting "it off in a different direction"215, no great harm may follow. Assuming it is permissible for the courts to change the substantive criminal law, R v R is an example of the standard technique. It relied on quite recent changes in the status of married women. It did not purport to announce that a change had taken place many years ago, by reason of changes in status even earlier. South Australia's urging of the latter course engenders much more uncertainty. It invites Bentham's reproach216: "Nebuchadnezzar put men to death for not finding a meaning for his dreams: but the dreams were at least dreamt first, and duly notified. English judges put men to death very coolly for not having been able to interpret their dreams, and that before they were so much as dreamt." Retrospective change in the criminal law and the appropriate institutions to effectuate it South Australia's arguments involve a retrospective change in the criminal law. Indeed, they willingly embrace it. They involve the proposition that conduct no-one saw as attracting criminal liability in 1963 in fact attracted that liability because an historical investigation in 2010-2012 is said to reveal that changes in legal and social conditions at some unspecified time before 1963 caused the conduct to become criminal. And this proposition involves a very serious crime. Rape in 1963 was punishable by life imprisonment and whipping217. 215 Bingham, "The Rule of Law", (2007) 66 Cambridge Law Journal 67 at 71. 216 Bowring (ed), The Works of Jeremy Bentham, (1843), vol IV at 315. 217 See below at [170]. The law's aversion to the judicial creation of crimes. In those circumstances, though it may be trite to do so, it is desirable to recall the law's aversion to the judicial creation or extension of crimes. In the early 17th century Bacon put the central difficulty in a retroactive criminal law thus in Aphorism 8 of his treatise De Augmentis218: "Certainty is so essential to law, that law cannot even be just without it. 'For if the trumpet give an uncertain sound, who shall prepare himself to the battle?'219 So if the law give an uncertain sound, who shall prepare to obey it? It ought therefore to warn before it strikes." And Aphorism 39 read in part220: "Let there be no authority to shed blood; nor let sentence be pronounced in any court upon capital cases, except according to a known and certain law. … Nor should a man be deprived of his life, who did not first know that he was risking it." Hobbes stated in 1651221: "harm inflicted for a fact done before there was a law that forbade it, is not punishment, but an act of hostility: for before the law, there is no transgression of the law". Hence, said Hobbes in 1681222: "A Law is the Command of him, or them that have the Soveraign Power, given to those that be his or their Subjects, declaring Publickly, and plainly what every of them may do, and what they must forbear to do." "The citizen must be able to ascertain beforehand how he stands with regard to the criminal law; otherwise to punish him for breach of that law is purposeless cruelty. Punishment in all its forms is a loss of rights or advantages consequent on a breach of law. When it loses this quality it 218 Spedding, Ellis and Heath (eds), The Works of Francis Bacon, (1877), vol V at 90. 219 1 Corinth. xiv. 8. 220 Spedding, Ellis and Heath (eds), The Works of Francis Bacon, (1877), vol V at 95. 221 Leviathan, reprinted by George Routledge and Sons, 2nd ed (1886) at 143. 222 A Dialogue Between a Philosopher and a Student of the Common Laws of England, Cropsey (ed) (1971) at 71. 223 Criminal Law: The General Part, 2nd ed (1961) at 575. degenerates into an arbitrary act of violence that can produce nothing but bad social effects." Stephen J stated in R v Price224: "the great leading rule of criminal law is that nothing is a crime unless it is plainly forbidden by law." Hence Hayek saw it as crucial to the rule of law that "the coercive power of the state … be used only in cases defined in advance by the law and in such a way that it can be foreseen how it will be used."225 Finally, as Harris said, retroactivity in criminal law is "pointless … because of the brutal absurdity of today commanding someone to do something yesterday."226 South Australia submitted, however, that the change it favoured "does not create a new offence, it merely removes a protection, arguably, formerly held by husbands." It submitted that there was no inhibition against judicial legislation which fell short of creating a new offence. South Australia relied on the following statement by the English Court of Appeal in R v R about the judicial abolition of the immunity227: "The remaining and no less difficult question is whether … this is an area where the court should step aside to leave the matter to the Parliamentary process. This is not the creation of a new offence, it is the removal of a common law fiction which has become anachronistic and offensive and we consider that it is our duty having reached that conclusion to act upon it." With respect to both South Australia and the English Court of Appeal, this is captious. The substantive effect of South Australia's argument is to expose persons to a risk of criminal prosecution for conduct which was not believed to be criminal at the time it was carried out. That is true even though South Australia sees this reasoning as doing nothing more pernicious than removing an anachronistic and offensive fiction. Sir John Smith said, correctly, "it is not clear that there is a difference in principle" between the judicial creation of a new 224 (1884) 12 QBD 247 at 256. 225 The Road to Serfdom, (1944) at 62. See generally Juratowitch, Retroactivity and the Common Law, (2008) at 43-65, 127-138 and 183-197. 226 Harris, Legal Philosophies, 2nd ed (1997) at 146. 227 R v R [1992] 1 AC 599 at 611 per Lord Lane CJ, Sir Stephen Brown P, Watkins, offence in Shaw v Director of Public Prosecutions228 and the judicial abolition of the immunity229. Zecevic v Director of Public Prosecutions (Vict). South Australia also relied on the following statement of Deane J (dissenting) in Zecevic v Director of Public Prosecutions (Vict)230: "There may be circumstances in which an ultimate appellate court is justified in overruling a previous decision of its own with the consequence that what had previously been accepted as a defence to a charge of murder is no longer, and never was, such a defence". This was a somewhat selective quotation. There are three reasons why it does not support South Australia's case. First, Deane J gave as an illustration the case of R v Shivpuri. In that case the House of Lords departed from earlier authority in order to state the true construction of a statute231. That is a very different matter from changing the common law. There are more difficulties in courts continuing to apply an erroneous construction of a statute than continuing to apply the received common law. The courts are masters of the common law, but servants of statutes. Further, the case in question was a special one. The change in construction did not cut down any "liberty" the accused had enjoyed. On the earlier and rejected construction, the accused was free to attempt to commit a crime if circumstances unknown to him made it impossible to do so. On the later and favoured construction, an attempt to commit the crime in those circumstances was criminal. The freedom arising under the earlier construction was a strange type of freedom. It was not a freedom which persons in the accused's position could be said to have been able to rely on: the relevant circumstances were unknown to them. Thus, as Juratowitch says232: "The absence of sensible reliance or liberty considerations in the case meant that the prohibition on criminal retroactivity was, without 228 [1962] AC 220: see below at [144]-[152]. 229 Commentary on R v C [1991] Crim LR 60 at 63. See also Sir John Smith's commentary on R v R [1991] Crim LR 475 at 478. 230 (1987) 162 CLR 645 at 677; [1987] HCA 26. 232 Retroactivity and the Common Law, (2008) at 195. diminishing the strength of that prohibition in general, eminently susceptible to being justifiably overcome in Shivpuri." Secondly, Deane J gave very detailed reasons for not applying his tentative observation to the case before him in Zecevic v Director of Public Prosecutions (Vict). They do not support South Australia's argument. Thirdly, Deane J made it plain that the undesirability of retroactive changes in criminal law adverse to the accused applies as much to abolishing defences as it does to creating new offences. Thus he said233: "It is simply wrong that an accused may be adjudged not guilty or guilty of murder according to the chance of whether his trial is completed before or after this Court has abolished a defence which, under the law which the Court itself had definitively settled at the time the offence was committed, reduced the offence from murder to manslaughter." He called this "a macabre lottery". The macabre character of the lottery is heightened in this case. Those who have caused the prosecution to be brought have allowed 47 years to pass before charging the appellant. Another problem with South Australia's argument is that it invites retrospective judicial legislation which collides with legal structures created by parliamentary legislation. Thus Brennan J, the only Justice in R v L not to state that Hale's proposition had ceased to exist, succinctly and correctly said234: "a mere judicial repeal of the [exception] would extend the liability for conviction of the crime of rape to cases which would be excluded from liability for conviction by s 73(5) of the Criminal Law Consolidation Act."235 Brennan J's point was that s 73(5) permitted convictions for rape in the aggravated circumstances stated in the sub-section, but otherwise preserved the common law "exception" from liability. To "repeal" the common law "exception" would expose husbands to a greater risk of prosecution for acts carried out before s 73(5) was enacted in 1976 than after it. Section 73(5) did not apply retrospectively. The greater exposure of husbands to risk of prosecution would depart significantly from the legislative scheme. It would mean that in 233 (1987) 162 CLR 645 at 677-678 (citation omitted). 234 R v L (1991) 174 CLR 379 at 402. The text has "section" instead of "exception", but this is an error. 235 See below at [175]. 1976 Parliament narrowed the scope of a husband's liability for sexual offences committed against his wife, rather than expanded it. And yet the seeming function of the legislation was to expand liability, not narrow it. Professional attitudes in 1963-1965. The retrospectivity involved in South Australia's arguments is highlighted by considering the following question. What would actually have happened if, instead of the appellant being charged with rape in 2010, he had been charged immediately after the second of the alleged offences had occurred in April 1963? the law "the is what judge says Lord Reid said: Mr Justice Holmes, as is well known, remarked that the bad man "does want to know what the Massachusetts or English courts are likely to do in fact. I am much of his mind. The prophecies of what the courts will do in fact, and nothing more pretentious, are what I mean by the law."237 No doubt it is often unrealistic to assume that people take account of the criminal law in deciding what conduct to engage in238. It is probably particularly unrealistic in relation to violent sexual crimes. However, people should be able to know, by recourse to a competent lawyer, what the legal consequences of a proposed course of action are before embarking on it239. What would a bad man in South Australia have learned if he had asked for a prophecy as to what the South Australian courts, and this Court, would be likely to say in the years 1963 to 1965, for example, if he had been charged in April 1963 with raping his wife in March and April and he had challenged the validity of the indictment or appealed against a conviction? There were at that time seven judges in the Supreme Court of South Australia. The Chief Justice was Sir Mellis Napier, in his 40th year of service on that Court. The senior puisne judge was Sir Herbert Mayo, in his 22nd year of service. Next in seniority came Sir Reginald Roderic St Clair Chamberlain: universally known as "Joe", he did not share the impulsiveness or the radicalism 236 "The Judge as Law Maker", (1972) 12 Journal of the Society of Public Teachers of Law 22 at 22. 237 Holmes, "The Path of the Law", (1897) 10 Harvard Law Review 457 at 461. 238 Rodger, "A Time for Everything under the Law: Some Reflections on Retrospectivity", (2005) 121 Law Quarterly Review 57 at 68. Cf Williams, Criminal Law: The General Part, 2nd ed (1961) at 601-603. 239 See Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG [1975] AC 591 at 638; Fothergill v Monarch Airlines Ltd [1981] AC 251 at 279; and R v Rimmington [2006] 1 AC 459 at 480-482 [33]. of his namesake. The other judges were Justices Millhouse, Travers, Hogarth and Bright. This Court comprised Chief Justice Dixon and Justices McTiernan, Kitto, Taylor, Menzies, Windeyer and Owen. It is hard to see where a majority of two was to be found in the Supreme Court of South Australia in favour of the view that Hale's proposition never was, or had ceased to be, the law in South Australia. It is equally hard to see where a majority of three or four in favour of that view was to be found in this Court. Indeed, it is hard to find even one vote for that proposition. This is not simply a crass piece of legal "realism". It does not rest on the personal idiosyncrasies of the individual judges. The probabilities were strongly against either majority because of the particular ideas of the time. They were universal ideas among the Australian judiciary. To overturn Hale's proposition, or to deny that it ever had been the law, or to hold that it had earlier dissolved into nothingness, was to widen the criminal law. It was a legal commonplace in the middle of the 20th century that it was wrong for judges "to declare new offences": that "should be the business of the legislature." So spoke Lord Goddard CJ, Sellers and Havers JJ in 1953, in R v Newland240. They also stated that it was wrong for241: "the judges to declare new crimes and enable them to hold anything which they considered prejudicial to the community to be a misdemeanor. However beneficial that might have been in days when Parliament met seldom or at least only at long intervals it surely is now the province of the legislature and not of the judiciary to create new criminal offences." And in Director of Public Prosecutions v Withers, in 1974, Lord Simon of Glaisdale said242 that it was an "undoubted [principle] of law" that "it is not open to the courts nowadays either to create new offences or so to widen existing offences as to make punishable conduct of a type hitherto not subject to punishment". The same view would prevent any judicial widening of so extremely serious a crime as rape. That view was well-entrenched among judges, practising lawyers and academic lawyers. Contemporary reaction to two surprising decisions of the House of Lords in 1960 and 1961 demonstrates how well-entrenched it was. Director of Public Prosecutions v Smith. The first was a murder case, Director of Public Prosecutions v Smith. The trial judge (Donovan J) directed a 240 [1954] 1 QB 158 at 165. 241 [1954] 1 QB 158 at 167. 242 [1975] AC 842 at 863. jury that if the accused, in doing what he did, must as a reasonable man have contemplated that serious harm was likely to occur to the victim, he was guilty of murder – whether or not the accused actually had that contemplation. The Court of Criminal Appeal (Byrne, Sachs and Winn JJ) allowed Smith's appeal and substituted for the verdict of capital murder a verdict of manslaughter. On 28 July 1960, the House of Lords (Viscount Kilmuir LC, Lords Goddard, Tucker, Denning and Parker of Waddington) allowed a prosecution appeal and restored the conviction for capital murder. Viscount Kilmuir LC said that an accused person who was accountable for his actions and who carried out an unlawful and voluntary act was guilty of murder if the ordinary reasonable man would, in all the circumstances of the case, have contemplated grievous bodily harm as the natural and probable result of that act243. Shaw v Director of Public Prosecutions. The second case was decided on 4 May 1961. The House of Lords (Viscount Simonds, Lords Tucker, Morris of Borth-y-Gest and Hodson; Lord Reid dissenting) held in Shaw v Director of Public Prosecutions that the courts could create new crimes. Viscount Simonds said that the courts had: "a residual power, where no statute has yet intervened to supersede the common law, to superintend those offences which are prejudicial to the public welfare. Such occasions will be rare, for Parliament has not been slow to legislate when attention has been sufficiently aroused. But gaps remain and will always remain since no one can foresee every way in which the wickedness of man may disrupt the order of society."244 Lord Reid, whose reputation, still high, was extremely high in the early 1960s, dissented. He quoted with approval the second passage from R v Newland set out above245. He said246: "the courts cannot now create a new offence". Contemporary reactions to Shaw v Director of Public Prosecutions. Shaw v Director of Public Prosecutions attracted heavy criticism247. Probably for that 243 [1961] AC 290 at 327. 244 [1962] AC 220 at 268. 245 [1962] AC 220 at 274-275. 246 [1962] AC 220 at 276. 247 For example, Hall Williams, "The Ladies' Directory and Criminal Conspiracy: The Judge as Custos Morum", (1961) 24 Modern Law Review 626; Smith, "Commentary", [1961] Criminal Law Review 470; Seaborne Davies, "The House of Lords and the Criminal Law", (1961) 6 Journal of the Society of Public Teachers (Footnote continues on next page) reason, the principle it enunciated has since been narrowed 248. The modern English view corresponds with Lord Reid's. Thus Lord Bingham of Cornhill said249: "there now exists no power in the courts to create new criminal offences". An example of the contemporary reaction to Shaw v Director of Public Prosecutions is what P J Fitzgerald, a prominent Anglo-Irish criminal lawyer, wrote in 1962250: "Few cases in recent years have been quite so disturbing as this. The resuscitation of the judicial power to create crimes runs counter to two cardinal principles of free and democratic government." Fitzgerald put the first as follows251: "[T]he idea of the rule of law … is based on the demand that the citizen should be ruled by laws and not by the whims of men. In the sphere of criminal law this idea has become crystallized as … a principle according to which only breaches of existing criminal law should be punishable. The justification of this principle, which has been adopted as an actual rule in some legal systems, though not in the English legal system, is that the citizen should be able to know beforehand what conduct is permitted and what forbidden; for only in this way can he order his affairs with certainty and avoid coming into conflict with the law. It is this demand for certainty with regard to the provisions of the criminal law that militates against retrospective criminal legislation. When Parliament creates a new crime, it almost invariably legislates for the future only. This, however, is just what the courts cannot do. Our legal system is such that a court can of Law 104; Turpin, "Criminal Law – Conspiracy to Corrupt Public Morals", [1961] Cambridge Law Journal 144. 248 Director of Public Prosecutions v Bhagwan [1972] AC 60 at 80; Knuller (Publishing, Printing and Promotions) Ltd v Director of Public Prosecutions [1973] AC 435; Director of Public Prosecutions v Withers [1975] AC 842. 249 R v Jones (Margaret) [2007] 1 AC 136 at 161-162 [28]; see also at 171 [61] per Lord Hoffmann and 179-180 [102] per Lord Mance. 250 Criminal Law and Punishment, (1962) at 9. 251 Criminal Law and Punishment, (1962) at 9-10. The passage from Bentham to which Fitzgerald refers is from "Truth versus Ashhurst", in Bowring (ed), The Works of Jeremy Bentham, (1843), vol V at 235. It is conveniently set out in R v Rimmington [2006] 1 AC 459 at 480 [33]. only decide a point of law which arises in some actual case before the court, and consequently the court's decision always relates back to the facts of this case, facts which of course precede the decision. If, therefore, a court manufactures a new crime, it thereby determines after the event that the defendant's conduct, which at the time of commission was not prohibited by law, is a criminal offence. To countenance this type of retrospective criminal legislation means that certainty and consequently freedom are at an end. Bentham long ago pointed out that when the judges make law like this, they are treating the citizen as a man treats his dog, hitting him every time he does something to which the master takes exception. Animals and young children can only be trained in this way. Sane and adult members of a free society, however, are entitled to demand first to be told what conduct is forbidden so that they may choose whether or not to keep within the law." Fitzgerald put the second objection to "the creation of new offences by the courts" thus252: "Even suppose that a court could decide that the kind of act which the defendant had done would in future, though not in the instant case, constitute a crime, there is still the objection that this type of proceeding is not consonant with democratic government. If Parliament creates a new crime, the citizens whose liberty is thereby restricted have the consolation that this was done by their elected representatives whom they chose to perform this sort of activity, and whom in due course they may re-elect or reject. The judges, on the other hand, are appointed by the Crown, virtually irremovable and in practice accountable to no one. That such a body should have the power to decree that certain acts shall constitute crimes is totally incompatible with the notion of democracy." In similar vein, Lord Reid said that judicial legislation should be avoided when "public opinion is sharply divided on any question"253. The development of the criminal law raises questions which often sharply divide public opinion. Lord Reid employed arguments similar to those of Fitzgerald in Shaw v Director of Public Prosecutions254. And twice in R v Newland255, the Court of 252 Criminal Law and Punishment, (1962) at 10. 253 "The Judge as Law Maker", (1972) 12 Journal of the Society of Public Teachers of Law 22 at 23. See also Knuller (Publishing, Printing and Promotions) Ltd v Director of Public Prosecutions [1973] AC 435 at 489. 254 [1962] AC 220 at 275. 255 [1954] 1 QB 158 at 165 and 167. Criminal Appeal referred to Sir James Fitzjames Stephen's statement of related arguments 70 years earlier256: "it is hardly probable that any attempt would be made to exercise [a power of declaring new offences] at the present day; and any such attempt would be received with great opposition, and would place the bench in an invidious position. … In times when legislation was scanty, [that power was] necessary. That the law in its earlier stages should be developed by judicial decisions from a few vague generalities was natural and inevitable. But a new state of things has come into existence. On the one hand, the courts have done their work; they have developed the law. On the other hand, parliament is regular in its sittings and active in its labours; and if the protection of society requires the enactment of additional penal laws, parliament will soon supply them. If parliament is not disposed to provide punishments for acts which are upon any ground objectionable or dangerous, the presumption is that they belong to that class of misconduct which it is not desirable to punish. Besides, there is every reason to believe that the criminal law is, and for a considerable time has been, sufficiently developed to provide all the protection for the public peace and for the property and persons of individuals which they are likely to require under almost any circumstances which can be imagined; and this is an additional reason why its further development ought to be left in the hands of parliament." Lord Diplock used similar reasoning in Knuller (Publishing, Printing and Promotions) Ltd v Director of Public Prosecutions257 to advocate a retreat from Shaw v Director of Public Prosecutions. The views of a scholar who received his legal education in Adelaide shortly before the appellant allegedly committed the conduct charged are representative of how lawyers thought at that time and in that place258: "the administration, or working-out, of the criminal law's prohibitions is permeated by rules and principles of procedural fairness ('due process of law') and substantive fairness (desert, proportionality), which very substantially modify the pursuit of the goal of eliminating or diminishing the undesired forms of conduct: such principles as nulla poena sine lege 256 A History of the Criminal Law of England, (1883), vol III at 359-360. 257 [1973] AC 435 at 473-474. See also Lord Simon of Glaisdale at 489. 258 Finnis, Natural Law and Natural Rights, (1980) at 261-262. (and rather precise leges, at that), and the principles which outlaw retroactive proscription of conduct (at the known cost of letting some dubious characters slip through the net), and restrain the process of investigation, interrogation, and trial (even at the expense of that terror which a Lenin knows is necessary for attaining definite social goals)." (emphasis in original) Ideas of this kind, though perhaps less congenial to the mentalities of recent decades, were very familiar to Australian judges in the early 1960s. They universally assented to those ideas. Contemporary reactions to Director of Public Prosecutions v Smith. Director of Public Prosecutions v Smith, too, attracted immediate criticism. In Australia it was rightly seen as an extension of the law of murder. Shortly before his death, Sir Wilfred Fullagar, then a Justice of this Court, entered Sir Owen Dixon's chambers and observed: "Well, Dixon, they're hanging men for manslaughter in England now."259 The doctrine stated in Director of Public Prosecutions v Smith was soon abolished by statute in England260. Glanville Williams called it "the most criticised judgment ever to be delivered by an English court."261 Lord Reid called it a "disaster"262. Dixon CJ, in his 35th year on the High Court and nearing the end of his eighth decade, levelled the most damaging criticism of all at it in Parker v The Queen. Judgment was delivered on 24 May 1963. That was at or shortly before the time the present appellant could have had the question of his immunity from prosecution for allegedly raping his wife in March and April 1963 considered by the courts, had the complainant, the police, the prosecuting authorities, and the courts moved expeditiously. Dixon CJ delivered a dissenting judgment. But it concluded with a passage263 with which all other members of the Court (Taylor, Menzies, Windeyer and Owen JJ) agreed264. In reading that passage, it must be remembered that up to 1963 it had been the High Court's 259 Ayres, Owen Dixon, (2003) at 276. 260 Criminal Justice Act 1967, s 8. 261 Textbook of Criminal Law, 2nd ed (1983) at 81. See also Williams, "Constructive Malice Revived", (1960) 23 Modern Law Review 605. 262 "The Judge as Law Maker", (1972) 12 Journal of the Society of Public Teachers of Law 22 at 29. 263 (1963) 111 CLR 610 at 632; [1963] HCA 14. 264 (1963) 111 CLR 610 at 633. practice to follow decisions of the House of Lords265. It had also been the Court's practice to pay great respect to the decisions of the English Court of Appeal266, and decisions of English High Court judges. That was so even though no appeal lay from any Australian court to those Courts. "In Stapleton v The Queen267 we said: 'The introduction of the maxim or statement that a man is presumed to intend the reasonable consequences of his act is seldom helpful and always dangerous'268. That was some years before the decision in Director of Public Prosecutions v Smith269, which seems only too unfortunately to confirm the observation. I say too unfortunately for I think it forces a critical situation in our (Dominion) relation to the judicial authority as precedents of decisions in England. Hitherto I have thought that we ought to follow decisions of the House of Lords, at the expense of our own opinions and cases decided here, but having carefully studied Smith's Case270 I think that we cannot adhere to that view or policy. There are propositions laid down in the judgment which I believe to be misconceived and wrong. They are fundamental and they are propositions which I could never bring myself to accept." Dixon CJ then said that Smith's case "should not be used as authority in Australia at all." Those were terrible words. They were brooding, sombre and unusually passionate. In them the aged Chief Justice revealed that at the end of his career he had plumbed the depths of an intolerable nightmare. His reaction shows the Court being provoked by a retrospective judicial expansion of criminal liability in England into a determination to preserve crucial common law principles in Australia, not applaud or foster their destruction. This Court had changed its own rules of stare decisis in order to preserve Australian law. Those rules are 265 Piro v W Foster & Co Ltd (1943) 68 CLR 313 at 320; [1943] HCA 32. See also Wright v Wright (1948) 77 CLR 191 at 210; [1948] HCA 33. There Dixon J said that diversity was "an evil", and that the "avoidance [of diversity] is more desirable than a preservation here of what we regard as sounder principle." 266 Waghorn v Waghorn (1942) 65 CLR 289 at 292; [1942] HCA 1. 267 (1952) 86 CLR 358; [1952] HCA 56. 268 (1952) 86 CLR 358 at 365. fundamental to the judicial method. The change was very substantial. Though the High Court continued to be bound by Privy Council decisions, on most points of law there was much more authority from the House of Lords and the English Court of Appeal than the Privy Council. For those reasons Parker v The Queen astonished the Australian legal profession. But its repudiation of the thinking underlying Director of Public Prosecutions v Smith accorded with the ideas of the Australian legal profession. What would the courts have done in 1963-1965? Had the appellant been charged with rape in April 1963, the immediate background to any claim by him of immunity from prosecution would have included the following elements. There was a continuing furore in which Lord Reid's dissent in Shaw v Director of Public Prosecutions was receiving overwhelming favour. There had been an explicit repudiation of English authority for the first time in Australian history271 in part because of its retrospective expansion of criminal liability. There was universal acceptance in the Australian judiciary of conceptions of the kind stated by Stephen, Lord Reid and Fitzgerald. They were conceptions ultimately rooted in the common understanding of the rule of law272. Recourse to the principal English works on criminal law which were available in 1963273 or soon to be published274 would have revealed that Hale's proposition as reflected in recent authorities was stated as the law. The same was true of Australian works 271 However, there had been a premonitory sign in Commissioner for Railways (NSW) v Cardy (1960) 104 CLR 274 at 285; [1960] HCA 45. 272 See Finnis, Natural Law and Natural Rights, (1980) at 270 (proposition (i)). 273 Fitzwalter Butler and Garsia (eds), Archbold: Pleading, Evidence & Practice in Criminal Cases, 35th ed (1962) at 1150 [2880]; Halsbury's Laws of England, 3rd ed (1955), vol 10 at 746 [1437]; Sturge (ed), Stephen's Digest of the Criminal Law (Indictable Offences), 9th ed (1950) at 263 (which includes the footnote Stephen had amended in the 4th ed (1887), the last he published in his lifetime): see below at [218]; Turner (ed), Russell on Crime, 11th ed (1958), vol 1 at 791; Turner (ed), Kenny's Outlines of Criminal Law, 18th ed (1962) at 192; Cross and Jones, An Introduction to Criminal Law, 4th ed (1959) at 76 and 160; Palmer and Palmer (eds), Harris's Criminal Law, 20th ed (1960) at 244. 274 Cross and Jones, An Introduction to Criminal Law, 5th ed (1964) at 79; Smith and Hogan, Criminal Law, (1965) at 290-292. available in 1963275 or shortly thereafter276. This Court was not taken to any works stating that Hale's proposition was not the law. The leading English and Australian academic lawyers specialising in criminal law – Professor Glanville Williams, Sir Rupert Cross, Sir John Smith, Professor Hogan, Professor Howard, Professor Brett, Professor Waller and Professor Morris – were agreed that the immunity existed. No Australian case denied Hale's proposition. A handful of English cases had qualified it, but only to a small degree277. Against that background, four questions arise. What prospect was there that the South Australian courts or the High Court would accede to an attempt by South Australia to effect a judicial extension, retrospectively, of criminal liability? What prospect was there that they would rule that the immunity had never existed? What prospect was there that they would accede to a submission that though the immunity had existed for a long time, it had disappeared some decades earlier? What prospect was there that they would accede to a submission that though the immunity had existed up to 1963, it should be abolished (necessarily with retrospective effect)? To each of those four questions the answer must be: "None". That answer is supported by the fact that once they came to consider the problem, neither the Australian nor the English courts wavered, until 1991, from the view asserted and assumed until then that Hale's proposition was substantially correct278. is necessary, with respect, emphatically to reject the statement that "in 1963, a respectable challenge to Sir Matthew Hale's opinion could have been mounted."279 To believe that is to believe that history can be rewritten in complete defiance of all contemporary evidence. It contradicts the reasoning of the House of Lords in R v R280. Foreseeability. South Australia did not rely on an argument which appealed to the European Court of Human Rights. But it is convenient to mention it. That Court held that the United Kingdom was not in contravention of 275 Weigall and McKay (eds), Hamilton and Addison: Criminal Law and Procedure, 6th ed (1956) at 88; Bourke, Sonenberg and Blomme, Criminal Law, (1959) at 43. See also Morris and Turner, "Two Problems in the Law of Rape", (1954) 2 University of Queensland Law Journal 247. 276 Brett and Waller, Cases and Materials in Criminal Law, 2nd ed (1965) at 300; Howard, Australian Criminal Law, (1965) at 145-147. 277 See above at [97]-[98]. 278 See above at [94]-[100]. 279 R v P, GA (2010) 109 SASR 1 at 13 [66] per Doyle CJ. 280 [1992] 1 AC 599: see above at [103]. Art 7 of the European Convention on Human Rights by reason of the decision in R v R because the abolition of the immunity was reasonably foreseeable281. This is a highly questionable justification for retrospective judicial change in the criminal law. But even if it is an arguable justification, it cannot apply here. It may be one thing to hold that it was reasonably foreseeable in 1990 that the immunity might be abolished in 1991. But in 1963 it was not reasonably foreseeable that if the matter came to court there would be an immediate abolition of the immunity by judicial means282. The significance of R v L. South Australia submitted that statements in R v L supported its second submission283. But it accepted that they were unnecessary to the decision in that case, and hence were dicta only. They were dicta about an aspect of the common law – a presumed incapacity to withdraw consent – which had been abolished by statute in every Australian jurisdiction. Further, they were dicta which said only that Hale's proposition was not in 1991 part of the common law of Australia. They said nothing in terms about what the position was in 1963. For the Court in this appeal the question is whether, as a matter of ratio decidendi, not obiter dicta, South Australia's second submission should be recognised as correct. An annihilatingly powerful reason for not recognising it is that it criminalises conduct which, if it took place, was lawful at the time it took place. Conclusion on South Australia's second submission. A decision by the legislature of South Australia after 1963 to enact a law retrospectively providing that the immunity was abolished with effect from a date before 1963 would have been subject to criticism from many quarters. That would have been significant, not because the critics would have been numerous, but because their criticisms would have been most trenchant284. South Australia's submission that the same result is to be achieved by a judicial decision to that effect is open to even greater criticism. The position of the judiciary in this respect is not superior to that of the legislature. For those reasons South Australia's second submission must be rejected. 281 SW v United Kingdom (1995) 21 EHRR 363 at 402 [43/41]. 282 Cf R v C [2004] 1 WLR 2098; [2004] 3 All ER 1, dealing with conduct in 1970 – a case exemplifying to a very marked degree the fallacy known to personal injury lawyers of finding foreseeability solely on the basis of hindsight. 283 (1991) 174 CLR 379 at 390 per Mason CJ, Deane and Toohey JJ and 405 per 284 See Walker, The Rule of Law, (1988) at 315-324. Issues which need not be resolved The appellant contended that a common law rule should be created by this Court to the effect that when there is a judicial change to the common law it only operates prospectively, not retrospectively. This would involve overruling prior authority285. That contention would only become a live issue if the common law as stated by Hale were held to have changed in the past (as South Australia submitted) or were to be changed now (as South Australia did not submit). It is not correct to arrive at either holding. Hence the need to consider the contention does not arise. Orders The appeal should be allowed. For the answer to the question of law given by the majority in the Full Court of the Supreme Court of South Australia there should be substituted the answer: "No". 285 Ha v New South Wales (1997) 189 CLR 465 at 503-504; [1997] HCA 34. Bell BELL J. In 2010, an Information was filed in the District Court of South Australia, charging the appellant with offences including two counts of rape. The complainant in each count was his then wife, GP, with whom he was living at the time. The offences of rape are alleged to have occurred in March and April 1963. It cannot be sensibly suggested that the appellant would have been prosecuted for those offences, had the allegations come to the attention of the authorities in 1963. This is because at that time it was understood that the crime of rape could not be committed by a husband against his wife with whom he was living ("the immunity"). A husband was amenable under the criminal law for any other offence of violence committed against his wife. The imposition of criminal liability on a person for an act or omission to which criminal liability did not attach at the date the act was done or omitted to be done is contrary to fundamental principle286. It is said that the prosecution of the appellant today for his conduct in 1963 does not offend that principle because the immunity has never formed part of the common law of Australia or, if it did, it had ceased to do so sometime before 1963. The first of these alternatives rests on demonstrating either the absence of an authoritative source for the immunity or that in R v L287 this Court declared the common law in terms that denied its existence. For the reasons that follow, neither of those propositions should be accepted. Nor should this Court now hold that, on some date before 1963, a settled rule of the common law affecting liability for a serious criminal offence ceased to exist. Procedural history The appellant was due to stand trial in the District Court of South Australia (Herriman DCJ) on 5 July 2010. On 29 June 2010, he applied to quash the counts in the Information charging him with rape contrary to s 48 of the Criminal Law Consolidation Act 1935 (SA) ("the CLC Act"). Herriman DCJ stated a case reserving a question of law for the determination of the Full Court of the Supreme Court of South Australia288. His Honour set out the following facts: each count charged an act of non-consensual penile-vaginal sexual intercourse with GP; GP and the appellant were married and cohabiting as husband and wife at the date of each alleged offence; and no legal orders or undertakings of any kind affected the marital relationship on those dates. The question of law that his Honour reserved is: 286 Nullum crimen sine lege; nulla poena sine lege (no crime or punishment without law). See Dicey, Introduction to the Study of the Law of the Constitution, 10th ed 287 (1991) 174 CLR 379; [1991] HCA 48. 288 CLC Act, s 350(2)(b). Bell "Was the offence of rape by one lawful spouse of another, in the circumstances as outlined above, an offence known to the law of South Australia as at 1963?" The Full Court, by majority (Doyle CJ and White J, Gray J dissenting), answered the question289 in this way290: "The defendant is liable at law to be found guilty of the offences of rape charged in count 3 and count 5 of the information, notwithstanding that at the time of the alleged offence he was married to the alleged victim and was cohabiting with her, the marriage giving rise to no presumption of consent on her part to intercourse with her husband, and giving rise to no irrebuttable presumption to that effect." By special leave, the appellant appeals to this Court against the answer given by the majority in the Full Court. The law of rape in South Australia Before turning to the Full Court's reasons, some reference should be made to the history of the law governing liability for rape in South Australia and to the decision in R v L. In 1963, the punishment for the offence of rape was provided by s 48 of the CLC Act: "Any person convicted of rape shall be guilty of felony, and liable to be imprisoned for life, and may be whipped." The elements of the offence of rape were supplied by the common law. The understanding that a husband could not be guilty as a principal in the first degree of the rape of his wife is traced to the statement of Sir Matthew Hale in The History of the Pleas of the Crown291: 289 Doyle CJ (White J concurring) restated the question as "whether Mr P can, as a matter of law, properly be convicted of count 3 and count 5 in the circumstances outlined": R v P, GA (2010) 109 SASR 1 at 4 [6]. 290 R v P, GA (2010) 109 SASR 1 at 19 [93] per Doyle CJ, 45 [174] per White J. 291 (1736), vol 1, c 58 at 629. Bell "But the husband cannot be guilty of a rape committed by himself upon his lawful wife, for by their mutual matrimonial consent and contract the wife hath given up herself in this kind unto her husband, which she cannot retract." There does not appear to have been a single case in which a husband had been prosecuted for the rape of his wife with whom he was living in any common law jurisdiction at the date of the conduct with which the appellant is charged. By that date, as will appear, the justification for the immunity may have come to rest more upon the notion that the criminal law ought not to intrude into the marital bedroom, than upon the fiction of the wife's irrevocable consent. By the 1970s, the idea that there could be any justification for conferring immunity on a husband for the rape of his wife was the subject of critical academic attention and pressure for reform of the law292. South Australia was the first of the Australian jurisdictions to respond to the call for reform of the law of rape. In December 1975, the Attorney-General appointed a Committee of persons distinguished for their knowledge of the criminal law to report on the law relating to sexual offences293. The Committee was chaired by Justice Roma Mitchell of the Supreme Court of South Australia. The Committee submitted its Report to the Attorney-General in March 1976294. The Report contained a summary of the law stating that a husband could not be 292 The Women's Electoral Lobby was formed in 1972. See s 2 of its "Draft Bill and Other Recommendations on Sexual Offences (Superseding Draft Bill of August 1977; plus addenda of July 1978)", in Scutt (ed), Rape Law Reform, (1980) 265 at 268. See also Scutt, "Consent in Rape: The Problem of the Marriage Contract", (1977) 3 Monash University Law Review 255; Buddin, "Revision of Sexual Offences Legislation: A Code for New South Wales?", (1977) 2 University of New South Wales Law Journal 117 at 128-130; Sallmann and Chappell, Rape Law Reform in South Australia: A Study of the Background to the Reforms of 1975 and 1976 and of their Subsequent Impact, Adelaide Law Review Research Paper No 3, (1982) at v, 1-4, 10, 19-23. See, further, LeGrand, "Rape and Rape Laws: Sexism in Society and Law", (1973) 61 California Law Review 919; Brownmiller, Against Our Will: Men, Women and Rape, (1975); Geis, "Lord Hale, Witches, and Rape", (1978) 5 British Journal of Law and Society 26. 293 The other members of the Committee were Professor Howard, Hearn Professor of Law at Melbourne University and the author of the leading text on the criminal law in Australia, and Mr David Biles, the Assistant Director (Research) at the Australian Institute of Criminology. Mr Warren Brent Fisse, then Reader in Law at the University of Adelaide, was engaged as a consultant to the Committee. 294 Criminal Law and Penal Methods Reform Committee of South Australia, Special Report: Rape and Other Sexual Offences, (1976). Bell guilty as a principal in the first degree of the rape of his wife. The Committee noted judicial development of the law in England allowing an exception to the immunity in the case of a wife who had obtained an order for separation relieving her from the obligation to cohabit with her husband295. It recommended that the immunity should be confined such that a husband should be liable to conviction for the rape of his wife whenever the act constituting the rape was committed while the two were living apart and not under the same roof296. Following receipt of the Committee's Report, the South Australian Parliament amended the CLC Act297 by introducing s 48(1), which stated the elements of the offence of rape, and s 73, which relevantly provided: "(3) No person shall, by reason only of the fact that he is married to some other person, be presumed to have consented to sexual intercourse with that other person. (5) Notwithstanding the foregoing provisions of this section, a person shall not be convicted of rape or indecent assault upon his spouse, or an attempt to commit, or assault with intent to commit, rape or indecent assault upon his spouse (except as an accessory) unless the alleged offence consisted of, was preceded or accompanied by, or was associated with – assault occasioning actual bodily harm, or threat of such an assault, upon the spouse; an act of gross indecency, or threat of such an act, against the spouse; 295 In R v Clarke [1949] 2 All ER 448, Byrne J held that, although as a general proposition of law a husband could not be guilty of rape of his wife, there was an exception where the wife was living separately and with the protection of a court order. The exception was recognised but did not apply in the circumstances in R v Miller [1954] 2 QB 282 (see fn 339 below) and it was extended in R v O'Brien [1974] 3 All ER 663. See Criminal Law and Penal Methods Reform Committee of South Australia, Special Report: Rape and Other Sexual Offences, (1976) at 296 Criminal Law and Penal Methods Reform Committee of South Australia, Special Report: Rape and Other Sexual Offences, (1976) at 15 [6.2.1]. 297 Criminal Law Consolidation Act Amendment Act 1976 (SA). Bell an act calculated seriously and substantially to humiliate the spouse, or threat of such an act; or threat of the commission of a criminal act against any person." In the period following the South Australian reforms, the parliaments of each of the States and Territories enacted legislation with the evident intention of modifying or abolishing the immunity. This process of reform was completed by December 1991, when R v L was decided. In the Code States, this was achieved by removing the words "not his wife" from the definition of the offence298. In the Northern Territory, it was achieved by enacting the Criminal Code (NT) in terms that did not limit rape to an offence outside marriage299. In the Australian Capital Territory and New South Wales, it was done by enacting that the fact of marriage was no bar to conviction for the offence300. In Victoria and South Australia, any presumption of spousal consent to sexual intercourse on marriage was, in terms, abolished301. South Australia was alone in providing a limited immunity for 298 The Acts Amendment (Sexual Assaults) Act 1985 (WA) repealed s 325 of the Criminal Code (WA) and introduced s 324D, which provided that "[a]ny person who sexually penetrates another person without the consent of that person is guilty of a crime". The Criminal Code Amendment (Sexual Offences) Act 1987 (Tas) substituted a new s 185(1) of the Criminal Code (Tas), providing that "[a]ny person who has sexual intercourse with another person without that person's consent is guilty of a crime". The Criminal Code, Evidence Act and other Acts Amendment Act 1989 (Q) repealed s 347 of the Criminal Code (Q) and substituted a provision defining rape as "carnal knowledge of a female without her consent". 299 Criminal Code Act 1983 (NT), incorporating the Criminal Code (NT), s 192(1). 300 The Crimes (Sexual Assault) Amendment Act 1981 (NSW) inserted s 61A(4) into the Crimes Act 1900 (NSW), which provided that the fact that a person is married to a person on whom an offence of sexual assault is alleged to have been committed is no bar to conviction for that offence. The Crimes (Amendment) Ordinance (No 5) 1985 (ACT) inserted s 92R into the Crimes Act 1900 (NSW), as it applied to the ACT, which provided that the fact that a person is married to a person upon whom an offence of sexual intercourse without consent contrary to s 92D is alleged to have been committed shall be no bar to the conviction of the first-mentioned person for the offence. 301 In Victoria, the Crimes (Amendment) Act 1985 (Vic) substituted for s 62(2) of the Crimes Act 1958 (Vic) a new sub-section providing that the existence of a marriage does not constitute, or raise any presumption of, consent by a person to a sexual penetration or indecent assault by another person. Bell husbands in the case of non-aggravated offences. Further amendments introduced into the CLC Act in 1992 removed this partial immunity302. In R v L, the validity of s 73(3) of the CLC Act was challenged on the ground of inconsistency with Commonwealth law. The claimed inconsistency was with s 114(2) of the Family Law Act 1975 (Cth), which conferred power on the Family Court of Australia to make an order relieving a party to a marriage from any obligation to perform marital services or to render conjugal rights. The Court held that there was no direct or indirect inconsistency between the State and Commonwealth laws303. Resolution of the issue presented in R v L did not require consideration of proof of the offence of rape under the common law. Among the submissions advanced on L's behalf was that s 114(2) of the Commonwealth statute preserved the common law inability of a wife to withhold her consent to sexual intercourse with her husband. In their joint reasons, Mason CJ, Deane and Toohey JJ said that, "if it was ever the common law that by marriage a wife gave irrevocable consent to sexual intercourse by her husband, it is no longer the common law"304. This statement was prominent in the respondent's submissions before the Full Court and on this appeal. The Full Court Doyle CJ, writing for the majority in the Full Court, answered the reserved question on the footing that it was likely that Hale's statement of the immunity would have been accepted as a correct statement of the common law of Australia in 1963305. Nonetheless, his Honour said the Full Court should apply the considered statement of this Court that any presumption of irrevocable consent to sexual intercourse no longer formed part of the common law306. His Honour encapsulated the operation of the declaratory theory of the common law in the following statement307: 302 Criminal Law Consolidation (Rape) Amendment Act 1992 (SA). 303 R v L (1991) 174 CLR 379 at 385. 304 R v L (1991) 174 CLR 379 at 390. 305 R v P, GA (2010) 109 SASR 1 at 13 [66]. 306 R v P, GA (2010) 109 SASR 1 at 4 [8], 17 [82]. 307 R v P, GA (2010) 109 SASR 1 at 4 [9]. Bell "Mr P is charged with offences against the then s 48 of the [CLC Act]. In 1963 the elements of that offence were determined by the common law. Today, those elements are determined by the common law as stated by the majority in R v L." Gray J dissented. His Honour considered that the majority in R v L had not declared the common law with respect to liability for rape308. He reviewed the history and concluded that the appellant could not have been convicted of the rape of GP in 1963309. His Honour would have answered the reserved question in the negative310. Developments in Scotland and England Before returning to the decision in R v L, reference should be made to judicial development of the law relating to the immunity in Scotland and England. In S v HM Advocate311, an accused was indicted in the High Court of Justiciary in Scotland for the rape of his wife, with whom he was cohabiting. He challenged the count, contending that no crime known to the law of Scotland had been committed. The motion was dismissed and the dismissal upheld on appeal. Lord Justice-General Emslie, giving the judgment of the Court, noted that there was no authority holding that a cohabiting husband could be convicted of the rape of his wife312. His Lordship considered the state of English law to be sufficiently summarised in Glanville Williams' Textbook of Criminal Law313: 308 R v P, GA (2010) 109 SASR 1 at 36 [146], 37 [148]. The reference to the majority in the context is to the joint reasons of Mason CJ, Deane and Toohey JJ and the 309 R v P, GA (2010) 109 SASR 1 at 29 [132]. 310 R v P, GA (2010) 109 SASR 1 at 45 [173]. 311 1989 SLT 469. 312 S v HM Advocate 1989 SLT 469 at 471. There had been cases in Scotland following Clarke (see fn 295 above) that allowed the conviction of a man for the rape of his wife where they were separated: HM Advocate v Duffy 1983 SLT 7; HM Advocate v Paxton 1985 SLT 96. 313 S v HM Advocate 1989 SLT 469 at 472, citing Williams, Textbook of Criminal Law, 2nd ed (1983) at 236. Bell "A husband is legally incapable of perpetrating rape upon his wife unless the parties are judicially separated, or (probably) separated by consent, or unless the court has issued an injunction forbidding the husband to interfere with his wife, or the husband has given an undertaking to the court in order to avoid the issue of the injunction." Lord Emslie referred with approval to Glanville Williams' views on the justification for the immunity314: "The reason traditionally given for the general rule is the totally unconvincing one that the wife's consent is given on marriage, and she cannot revoke it. It would be an understatement to say that this authentic example of male chauvinism fails to accord with current opinion as to the rights of husbands." The immunity in the law of Scotland was traced to the unequivocal statement of it by Baron Hume315, which, in turn, drew on Hale. The Court accepted that Hume's statement of the law may have been correct in the 18th and early 19th centuries. However, the application of the rule in the late 20th century depended on the reasons justifying it and it was said that irrevocable consent, "if it ever was a good reason, no longer applies today"316. In 1985, in R v Roberts, the Criminal Division of the Court of Appeal of England and Wales said317: "In our judgment the law is now quite plain on this topic [marital rape]. The status of marriage involves that the woman has given her consent to her husband having intercourse with her during the subsistence of the marriage. She cannot unilaterally withdraw it." 314 S v HM Advocate 1989 SLT 469 at 473-474, citing Williams, Textbook of Criminal Law, 2nd ed (1983) at 237. 315 S v HM Advocate 1989 SLT 469 at 472, citing Hume, Commentaries on the Law of Scotland Respecting Crimes, (1797), vol 1, and subsequent editions published in 1819 and 1829, and the fourth edition edited by Bell in 1844. Also cited were Burnett, Criminal Law of Scotland, (1811) and Macdonald, A Practical Treatise on the Criminal Law of Scotland, 5th ed (1948) at 119. 316 S v HM Advocate 1989 SLT 469 at 473. 317 [1986] Crim LR 188, (Transcript: Marten Walsh Cherer). Bell The decision in Roberts followed Steele318 and allowed that a husband might be convicted of the rape of his wife in circumstances in which he and she had, by mutual agreement or court order, effectively put an end to the wife's fictional consent. The enactment of s 1(1)(a) of the Sexual Offences (Amendment) Act 1976 (UK), which defined rape in terms incorporating the expression "unlawful sexual intercourse", led to conflicting decisions at the trial court level319 as to the ability to judicially develop further exceptions to the immunity. The perceived difficulty was occasioned by the recognition that the word "unlawful" in this context had always been understood to refer to sexual intercourse outside marriage320. The Court of Appeal addressed this controversy in R v R321. The accused had been convicted of the attempted rape of his wife committed on an occasion in 1989 when the two were living separately. The wife had informed the accused of her intention to petition for divorce but had not commenced proceedings before the date of the offence. Lord Lane CJ, giving the judgment of the Court, said322: "It seems to us that where the common law rule no longer even remotely represents what is the true position of a wife in present day society, the duty of the court is to take steps to alter the rule if it can legitimately do so in the light of any relevant Parliamentary enactment." It was held that the word "unlawful" in the definition was surplusage. "We take the view that the time has now arrived when the law should declare that a rapist remains a rapist subject to the criminal law, irrespective of his relationship with his victim." 318 (1976) 65 Cr App R 22. 319 R v R [1991] 1 All ER 747; R v C [1991] 1 All ER 755; R v J [1991] 1 All ER 759. 320 R v Chapman [1959] 1 QB 100 at 105. 321 R v R [1992] 1 AC 599. 322 R v R [1992] 1 AC 599 at 610. 323 R v R [1992] 1 AC 599 at 611. Bell The House of Lords affirmed the decision. Lord Keith of Kinkel (with whom the other members of the House agreed) observed324: "It may be taken that [Hale's dictum] was generally regarded as an accurate statement of the common law of England. The common law is, however, capable of evolving in the light of changing social, economic and cultural developments. Hale's proposition reflected the state of affairs in these respects at the time it was enunciated. Since then the status of women, and particularly of married women, has changed out of all recognition in various ways which are very familiar and upon which it is unnecessary to go into detail." The European Court of Human Rights dismissed an application in respect of the decision in R v R325, holding that the accused's conviction did not violate Art 7(1) of the European Convention on Human Rights326. The decision had continued a perceptible line of authority dismantling the immunity327 and the development of the law "had reached a stage where judicial recognition of the absence of immunity had become a reasonably foreseeable development of the law"328. The courts in S v HM Advocate and R v R declared the common law of Scotland, England and Wales, taking into account changes in the conditions of 324 R v R [1992] 1 AC 599 at 616. 325 SW v United Kingdom (1995) 21 EHRR 363. 326 Article 7 of the Convention for the Protection of Human Rights and Fundamental Freedoms (1950) provides: "1. No one shall be held guilty of any criminal offence on account of any act or omission which did not constitute a criminal offence under national or international law at the time when it was committed. Nor shall a heavier penalty be imposed than the one that was applicable at the time the criminal offence was committed. 2. This article shall not prejudice the trial and punishment of any person for any act or omission which, at the time when it was committed, was criminal according to the general principles of law recognised by civilised nations." 327 SW v United Kingdom (1995) 21 EHRR 363 at 402. 328 SW v United Kingdom (1995) 21 EHRR 363 at 402. Bell society. In this respect, Lord Keith adopted the following statement from S v HM Advocate329: "By the second half of the 20th century, however, the status of women, and the status of a married woman, in our law have changed quite dramatically." The decisions in S v HM Advocate and R v R necessarily operated with retrospective effect. In each case, the conduct giving rise to the charge was alleged to have occurred not long before the date of the decision. That was important to the reasoning of the European Court of Human Rights in dismissing the application in R v R. One issue raised by this appeal that was not present in S v HM Advocate or R v R concerns the imposition of criminal liability in consequence of developing the law to take account of changed social conditions, for conduct that may have occurred before those changes took place. Prospective overruling and R v L the The Attorneys-General for South Australia, Queensland and Commonwealth intervened to address a constitutional issue raised by the appellant's third ground of appeal. This ground asserts that, if the common law was capable of further development following the 1976 amendments to the CLC Act, it should only be developed on a prospective basis. The submission was argued by reference to the decision of the House of Lords in In re Spectrum Plus Ltd (in liquidation)330. It was said in that case that the flexibility inherent in the English legal system permits the prospective overruling of a previous decision in a case in which it would otherwise produce gravely unfair and disruptive consequences for past transactions or events331. However, it has been held that a constitutional limitation on the exercise of judicial power does not permit this Court flexibility of that kind332. In their joint reasons in R v L, Mason CJ, Deane and Toohey JJ discussed the content of conjugal rights in the law of marriage, rejecting the submission that the doctrine imposes a continuing obligation on the part of a spouse to 329 R v R [1992] 1 AC 599 at 617, citing S v HM Advocate 1989 SLT 469 at 473. 331 In re Spectrum Plus Ltd (in liquidation) [2005] 2 AC 680 at 699 [40] per Lord Nicholls of Birkenhead. 332 Ha v New South Wales (1997) 189 CLR 465 at 504 per Brennan CJ, McHugh, Gummow and Kirby JJ; [1997] HCA 34. Bell to sexual intercourse as a legal consequence of marriage333. consent Their Honours noted Lord Lane CJ's statement in R v R that "there can be little doubt that what [Hale] wrote was an accurate expression of the common law as it then stood"334. They went on to say335: "Without endeavouring to resolve the development of the common law in this regard, it is appropriate for this Court to reject the existence of such a rule as now part of the common law of Australia. … The notion is out of keeping also with recent changes in the criminal law of this country made by statute, which draw no distinction between a wife and other women in defining the offence of rape. It is unnecessary for the Court to do more than to say that, if it was ever the common law that by marriage a wife gave irrevocable consent to sexual intercourse by her husband, it is no longer the common law." (emphasis added; citations omitted) It was unnecessary for the Court to "resolve the development of the common law" because, as their Honours observed, the law had been changed by statute. There was no jurisdiction in Australia in which a presumption of spousal consent to sexual intercourse had any bearing on a person's liability for rape336. The answer to the question of law reserved by Herriman DCJ requires consideration of an issue that was not addressed by the joint reasons or the reasons of Dawson J in R v L, which is the liability under the common law of a cohabiting husband for the rape of his wife. Did the immunity form part of the received common law? The laws and statutes of England applicable to the Province of South Australia were received on 19 February 1836. The relevant history and principles are explained by Mason J in State Government Insurance Commission v Trigwell337. It is not in question that, if Hale's statement of the immunity was a 333 R v L (1991) 174 CLR 379 at 387. 334 R v L (1991) 174 CLR 379 at 389, citing R v R [1992] 1 AC 599 at 603-604. 335 R v L (1991) 174 CLR 379 at 389-390. 336 See above at [176]. 337 (1979) 142 CLR 617 at 634-635; [1979] HCA 40. As explained, s 3 of Act No 9 of 1872 (SA) re-enacted s 1 of Ordinance No 2 of 1843 (SA). Section 3 of the 1872 Act declared that: "In all questions as to the applicability of any laws or statutes of England to the Province of South Australia, the said Province shall be deemed to (Footnote continues on next page) Bell rule of the common law in 1836, it was part of the laws of England received in South Australia338. In light of the history leading to the enactment of s 73(3) and (5) of the CLC Act, there can be little doubt that the common law of Australia was understood as embodying a rule that a husband was not amenable to conviction for the rape of his wife. It is also evident that, by 1976, the justification for that immunity was not perceived to depend upon the concept of irrevocable consent that presumption while maintaining the immunity save for offences committed in circumstances of aggravation. the Parliament of South Australia abolished intercourse, since As will appear, the Parliament of South Australia was not alone in acting upon acceptance that a husband was immune under the common law for the rape of his wife. Nonetheless, it is said that, correctly understood, the common law has never conferred the immunity. This is because Hale did not cite any authority for it and there is no binding judicial decision confirming its existence339. These criticisms will be addressed in turn. have been established on the twenty-eighth day of December, one thousand eight hundred and thirty-six." A modified version of this declaration was enacted in s 48 of the Acts Interpretation Act 1915 (SA). That section was repealed by s 26 of the Acts Interpretation Act Amendment Act 1983 (SA), with the effect that the date of settlement of the Province of South Australia is now taken to be 19 February 1836, on which date letters patent were issued defining its borders. See Lipohar v The Queen (1999) 200 CLR 485 at 508 [54]; [1999] HCA 65, citing South Australia v Victoria (1911) 12 CLR 667 at 676-677; [1911] HCA 17. 338 See R v Brown (1975) 10 SASR 139 at 153; R v Wozniak and Pendry (1977) 16 SASR 67 at 71; Question of Law (No 1 of 1993) (1993) 59 SASR 214 at 230; Criminal Law and Penal Methods Reform Committee of South Australia, Special Report: Rape and Other Sexual Offences, (1976) at 13 [6.2]. 339 The only decision turning directly on the immunity appears to be R v Miller [1954] 2 QB 282. In that case, the accused was tried for the rape of his wife. The prosecution was brought after the decision in Clarke (see fn 295 above). The Crown relied on the evidence that the wife had been living separately at the time of the incident and had petitioned for divorce. Lynskey J held that the presentation of the petition for dissolution of the marriage did not have any effect in law upon the existing marriage and, accordingly, that the accused had no case to answer on the count charging rape: at 290. Bell An authoritative statement of the law of rape before Hale? It would be foolish to attempt to state the elements of liability for the offence of rape in the period before Hale. Holdsworth gives an account of the development of the offence in general terms, observing that Bracton would have confined the offence to violent intercourse with a virgin340. At the time of the writings attributed to Glanvill, rape was a plea of the Crown, which could be prosecuted by private appeal or on the presentation of the jury341. It appears that, in the early period, most prosecutions were by private appeal and that an appeal could be compromised by the marriage of the victim to her assailant342. There is evidence that, before the time of Hale, it was a good defence to an appeal of rape to say that the woman was one's concubine343. Holdsworth saw the essentials of the offence of rape as having been defined sometime after the Statute of Westminster II c 34, which made all rapes punishable as felonies344. The statute was passed in 1285 in the reign of Edward I. The only authority cited in Holdsworth for the statement of the essentials of the offence is Hale345. The explanation for this gap of some 400 340 Holdsworth, A History of English Law, 3rd ed (1923), vol 3 at 316, citing Bracton f 148. The most severe punishment, it seems, was reserved for the rape of a virgin, but elsewhere Bracton refers to punishment for the forcible ravishment of various categories of women: Thorne (ed), Bracton on the Laws and Customs of England, (1968), vol 2 at 414-415. 341 Hall (ed), The treatise on the laws and customs of the realm of England commonly called Glanvill, (1965) at 3, 175-176; Holdsworth, A History of English Law, 3rd ed (1923), vol 3 at 316. 342 Hall (ed), The treatise on the laws and customs of the realm of England commonly called Glanvill, (1965) at 176; Thorne (ed), Bracton on the Laws and Customs of England, (1968), vol 2 at 417-418; Blackstone, Commentaries on the Laws of England, (1769), bk 4, c 15 at 212; Holdsworth, A History of English Law, 3rd ed (1923), vol 3 at 316. 343 Thorne (ed), Bracton on the Laws and Customs of England, (1968), vol 2 at 416; Dalton, The Country Justice, (1690), c 160 at 392; Hawkins, A Treatise of the Pleas of the Crown, (1716), bk 1, c 41 at 108. 344 Holdsworth, A History of English Law, 3rd ed (1923), vol 3 at 316. The Statute of Westminster II c 34 and its predecessor, the Statute of Westminster I c 13, also dealing with the punishment for rape, were both repealed by the Offences against the Person Act 1828 (UK) (9 Geo 4 c 31). 345 Holdsworth, A History of English Law, 3rd ed (1923), vol 3 at 316. Bell years may lie in Professor Baker's account of the development of the criminal law. In the period up to the mid-16th century, the common law comprised the "common learning" found, not only in the yearbooks, but in the oral tradition of the Inns of Court346. It was the latter that shaped the criminal law. Few criminal cases were decided in the courts at Westminster and only a small number of criminal cases "trickled into the year books"347. Much of the record of the criminal law is found in the notes made by readers348 and these, it would seem, contain little discussion of rape349. Professor Baker says that the most visible result of the body of experience of the courts disposing of criminal cases is to be found in the treatises of Crompton, Dalton and Hale, all of whom drew heavily on rulings made at gaol deliveries350. It was their selection, rather than the rulings at large, which he suggests influenced the future development of the law351. The authority of the Pleas of the Crown Hale's statement was of a negative condition of liability for rape. This circumstance tends to explain the absence of prosecutions of husbands for the offence. Consideration of whether Hale's statement of the immunity came to acquire the status of a rule of law (if it was not one in 1736) requires some account of the standing of the Pleas of the Crown among common lawyers. Sir Matthew Hale held office as Chief Baron of the Exchequer and Chief Justice of the King's Bench successively in the years 1660 to 1676. He died in 1676, leaving instructions in his will prohibiting the publication of any work 346 Baker, The Oxford History of the Laws of England, (2003), vol 6 at 486. See also at 469: "[I]t was the settled learning of the inns of court, referred to in the 1490s as the 'old learning of the court', or the 'common learning in moots'. Common learning, by its nature, did not require chapter and verse to support it. It was what the whole system of exercises was implicitly calculated to transmit, to test, and to teach" (citations omitted). 347 Baker, The Oxford History of the Laws of England, (2003), vol 6 at 471. 348 Baker, The Oxford History of the Laws of England, (2003), vol 6 at 529. 349 Baker, The Oxford History of the Laws of England, (2003), vol 6 at 562. In fn 92, Baker notes that the Statute of Westminster II c 34 was glossed "very briefly". 350 Baker, "The Refinement of English Criminal Jurisprudence, 1500-1848", in The Legal Profession and the Common Law: Historical Essays, (1986) 303 at 313. 351 Baker, "The Refinement of English Criminal Jurisprudence, 1500-1848", in The Legal Profession and the Common Law: Historical Essays, (1986) 303 at 313. Bell other than that which he had permitted to be published in his lifetime. At the time of his death, he was writing the Pleas of the Crown, which he had planned as a work in three volumes352. Only the first volume was completed. Four years after his death, the House of Commons ordered that it be printed. However, it was not until 1736 that the first edition appeared under the editorship of Sollom Emlyn, barrister of Lincoln's Inn. Sir William Blackstone acknowledged his debt to Hale353 and drew on the Pleas of the Crown in his account of felonies in the Commentaries. Sir James Fitzjames Stephen accorded the composition of the Pleas of the Crown an important place in the evolution of the criminal law in the 17th century354. It was, in his estimate, a work "of the highest authority", demonstrating both "a depth of thought and a comprehensiveness of design" that put it in "quite a different category" from Coke's Institutes355. Important principles of criminal responsibility were hardly noticed before Hale356. Stephen saw the definition of many crimes as settled in the period that separates Coke from Blackstone, and Hale and Foster as having contributed more than any other writers to that development357. Maitland said of Hale that "none had a wider or deeper knowledge of the materials; he was perhaps the last great English lawyer who habitually studied records; he studied them pen in hand and to good purpose". He was, in Maitland's estimate, "the most eminent lawyer and judge of his time"358. Holdsworth accounted Hale "the greatest historian of English law before 352 Yale, Hale as a Legal Historian, (1976) at 8; Holdsworth, "Sir Matthew Hale", (1923) 39 Law Quarterly Review 402 at 419. The second volume was intended to deal with non-capital crimes and the third with franchises and liberties. 353 Blackstone, An Analysis of the Laws of England, 3rd ed (1758) at vii. 354 Stephen, A History of the Criminal Law of England, (1883), vol 2 at 211. 355 Stephen, A History of the Criminal Law of England, (1883), vol 2 at 211. Stephen was not uncritical in his treatment of the Pleas of the Crown. He described the weight of technical detail in the chapters dealing with procedure as almost unreadable except by a very determined student: at 212. 356 Stephen, A History of the Criminal Law of England, (1883), vol 2 at 212. 357 Stephen, A History of the Criminal Law of England, (1883), vol 2 at 219. 358 Maitland, "The Materials for English Legal History", in Fisher (ed), The Collected Papers of Frederic William Maitland, (1911), vol 2, 1 at 5. Bell Maitland"359. He considered the Pleas of the Crown to have been left in the best state of any of Hale's works that had not been published at the date of his death360. Holdsworth, like Stephen, regarded the treatise highly361: "It was a branch of the law which could not then be adequately described without a very complete knowledge of the history of the law; and, partly because it contained very ancient ideas and rules, partly because it had been added to and in many details modified by a variety of statutes, it greatly needed systematic Coke and Crompton had summarized it, in a somewhat unsystematic form. Hale, because he was both a competent historian, a competent jurist, and a competent lawyer did the work which they endeavoured to do infinitely better. Ever since its first publication it has been a book of the highest authority." (citations omitted) treatment. Holdsworth saw Coke as standing midway between the medieval and the modern law, and Hale as "the first of our great modern common lawyers"362. The analysis of the offence in the Pleas of the Crown Hale described the offence of rape as "the carnal knowledge of any woman above the age of ten years against her will, and of a woman-child under the age of ten years with or against her will"363. Hale acknowledged Coke for this statement364, but proceeded to a much more detailed analysis of proof of the offence. He discussed additional elements (any degree of penetration was sufficient and it was not necessary to prove emission of semen); accessorial liability for the offence; liability in the case of infants under 14 years; liability in the case of consenting females under 12 years; and consent obtained by threat of 359 Holdsworth, "Sir Matthew Hale", (1923) 39 Law Quarterly Review 402 at 402. 360 (1923) 39 Law Quarterly Review 402 at 419-420. 361 (1923) 39 Law Quarterly Review 402 at 420. 362 (1923) 39 Law Quarterly Review 402 at 425. 363 Hale, The History of the Pleas of the Crown, (1736), vol 1, c 58 at 628. 364 Hale, The History of the Pleas of the Crown, (1736), vol 1, c 58 at 628. The fourth edition of the Third Part of Coke's Institutes, published in 1669, in fact described the offence of rape as "the unlawfull and carnal knowledge and abuse of any woman above the age of ten years against her will, or of a woman-child under the age of ten years with her will, or against her will" (emphasis added): The Third Part of the Institutes of the Laws of England, 4th ed (1669), c 11 at 60. Bell violence, among other matters. He also gave a deal of attention to the older law concerning appeals of rape, including the concubinage exception365. The account of the husband's immunity follows discussion of the latter. The relevant passage is set out below366: "It appears by Bracton ubi supra, that in an appeal of rape it was a good exception, quod ante diem & annum contentas in appello habuit eam ut concubinam & amicam, & inde ponit se super patriam, and the reason was, because that unlawful cohabitation carried a presumption in law, that it was not against her will. But this is no exception at this day, it may be an evidence of an assent, but it is not necessary that it should be so, for the woman may forsake that unlawful course of life. But the husband cannot be guilty of a rape committed by himself upon his lawful wife, for by their mutual matrimonial consent and contract the wife hath given up herself in this kind unto her husband, which she cannot retract." Writing of the criticism that Hale had conjured up the immunity without authority, one commentator has observed that it might be thought incongruous that the law allowed an exception in the case of de facto relationships (for which there is clear evidence before Hale's time) but not de jure relationships367. The writer suggests that Hale lacked authority, not for the existence of the immunity, but for confining it to marriage368. It should be noticed that Hale said the concubinage exception was no longer good law because of the recognition that a 365 Hale, The History of the Pleas of the Crown, (1736), vol 1, c 58 at 628. 366 Hale, The History of the Pleas of the Crown, (1736), vol 1, c 58 at 628-629. 367 Lanham, "Hale, Misogyny and Rape", (1983) 7 Criminal Law Journal 148 at 154, citing Dalton, Countrey Justice, (1619) at 256; R v Lord Audley (1631) 3 St Tr 401 368 Lanham, "Hale, Misogyny and Rape", (1983) 7 Criminal Law Journal 148 at 155. Professor Lanham identifies two extra-judicial supports for the existence of the immunity in Hale's time. Hale referred to Isabel Butler v William Pull, introducing the case by explaining that if A forces B to marry him and then has carnal knowledge of her against her will, he cannot be found guilty of rape during the subsistence of the voidable marriage; and Statute 6 R 2 stat 1 c 6, giving a husband a right of appeal where his wife had consented to a rape by a third party after the fact. Bell woman may forsake her unlawful way of life. This was stated by way of contrast to sexual intercourse within marriage, which was seen as lawful369. Hale had a commanding knowledge of the work of the courts administering criminal justice370. It may safely be taken that husbands were not prosecuted for rape of their wives in the period before the publication of his treatise. Given the subordinate status of married women under the law, this may not surprise371. Among the few benefits that the law conferred on the married woman was to immunise her from prosecution for a crime committed by her in her husband's presence372. The presumption of the law was that she was bound to obey her husband's command. This is not an idea that readily accommodates the prosecution of the husband for an act of non-consensual sexual intercourse with his wife. Hale is the source for locating the immunity in contract. It is a rationale that is consistent with Blackstone's treatment of the relations between husband and wife at law. The latter's celebrated account of the nature and effect of 369 See extract from Coke at fn 364 above. Similarly, Hawkins, A Treatise of the Pleas of the Crown, (1716), bk 1, c 41 at 108 described rape, relevantly, as an offence "in having unlawful and carnal Knowledge of a Woman" (emphasis added). 370 See Yale, Hale as a Legal Historian, (1976) for an account of Hale's record-searching and collecting from 1630, and his extensive knowledge of King's 371 Williams, "The Legal Unity of Husband and Wife", (1947) 10 Modern Law Review 16 at 29; Easteal, "Rape in marriage: Has the licence lapsed?", in Easteal (ed), Balancing the Scales: Rape, Law Reform and Australian Culture, (1998) 107 at 372 Hawkins, A Treatise of the Pleas of the Crown, (1716), bk 1, c 1 at 2; Hale, The History of the Pleas of the Crown, (1736), vol 1, c 7 at 44-48; Blackstone, Commentaries on the Laws of England, (1769), bk 4, c 2 at 29; J W C Turner, Russell on Crime, 12th ed (1964), vol 1 at 94-95. The presumption did not extend to treason or murder: Hale, The History of the Pleas of the Crown, (1736), vol 1, c 7 at 45. It has been abolished in all Australian jurisdictions: Crimes Act 1900 (NSW), Sched 3, cl 4(1) (originally s 407A(1)); Criminal Code (Q), s 32 (omitted in 1997); CLC Act, s 328A; Criminal Code (Tas), s 20(2); Crimes Act 1958 (Vic), s 336(1); Criminal Code (WA), s 32 (omitted in 2003); Crimes Act 1900 (ACT), s 289. It is not included in the defence of duress in the Criminal Code (NT), s 40. However, an affirmative defence of marital coercion has been retained in South Australia and Victoria: CLC Act, s 328A; Crimes Act 1958 (Vic), s 336. Bell coverture373 was prefaced by the statement: "[o]ur law considers marriage in no other light than as a civil contract"374. While "[t]he holiness of the matrimonial state" (emphasis in original) was a matter for the ecclesiastical courts, Blackstone emphasised that the temporal courts treated marriage like all other contracts, asking whether the parties were willing and able to contract375. It is an analysis which has been seen as a civilised advance on the medieval concept of the husband's natural and God-given power over his wife376. Professor Stretton suggests that, for Blackstone, the fundamental point was that married women consented to their modified legal status by their agreement to marriage377: "It was therefore the logic of contract that justified married women's particular treatment at law. However, it was a narrow concept of consent that ended abruptly at the church door, with no room for renegotiation during marriage and virtually no effective ability to escape the legal effects of marriage through separation or divorce." Blackstone's treatment of rape was largely taken from Hale378. He did not refer to the immunity, but it is evident that Hale's statement of it was not controversial. Blackstone drew attention to those occasions on which Hale's account of the law departed from the views of other writers. In Blackstone's analysis of the offence of rape, there was one such occasion. He noted that Hale considered that carnal knowledge of a girl aged under 12 years was rape regardless of consent, but that the law had in general been held only to extend to the carnal knowledge of a girl aged under 10 years379. 373 "By marriage, the husband and wife are one person in law: that is, the very being or legal existence of the woman is suspended during the marriage, or at least is incorporated and consolidated into that of the husband: under whose wing, protection, and cover, she performs every thing": Commentaries on the Laws of England, (1765), bk 1, c 15 at 430 (emphasis in original). 374 Blackstone, Commentaries on the Laws of England, (1765), bk 1, c 15 at 421. 375 Blackstone, Commentaries on the Laws of England, (1765), bk 1, c 15 at 421. 376 Stretton, "Coverture and Unity of Person in Blackstone's Commentaries", in Prest (ed), Blackstone and his Commentaries, (2009) 111 at 120-121. 377 Stretton, "Coverture and Unity of Person in Blackstone's Commentaries", in Prest (ed), Blackstone and his Commentaries, (2009) 111 at 123, citing Commentaries on the Laws of England, (1765), bk 1, c 15 at 421. 378 Blackstone, Commentaries on the Laws of England, (1769), bk 4, c 15 at 211-215. 379 Blackstone, Commentaries on the Laws of England, (1769), bk 4, c 15 at 212. Bell The operation of the immunity Hale's statement of the law may be analysed in either of two ways. First, that the offence comprises two elements: (i) carnal knowledge of a female (involving some degree of penetration); (ii) without her consent. On this analysis the immunity arises by the operation of an irrebuttable presumption of law. The alternative analysis is that the first element of the offence requires proof of the "unlawful" carnal knowledge of a female and that "unlawful" in this context means outside marriage380. The latter view accords with the treatment of the offence by text-writers, including Coke and Hawkins writing before the publication of Hale's treatise381. It is the analysis adopted by the Supreme Court of South Australia in those cases in which consideration has been given to the question. Bray CJ, discussing the elements of the offence in R v Brown382, considered that they were as stated in the 37th edition of Archbold: "Rape consists in having unlawful sexual intercourse with a woman without her consent by force, fear or fraud"383. The word "unlawful" was thought by Bray CJ to exclude intercourse between spouses384. Wells J appears to have been of the same view385. King CJ in R v Sherrin (No 2) also considered proof of the unlawfulness of the act of intercourse to have undoubtedly been an element of the offence at common law386. The resolution of the reserved question does not turn on whether the rule of law traced to Hale requires proof of the unlawfulness of the intercourse as an element, or is an irrebuttable presumption of consent. The latter, while "disguised in the language of adjective rules"387, is in truth a substantive rule of 380 R v Chapman [1959] 1 QB 100. 381 See fnn 364 and 369 above. 382 (1975) 10 SASR 139. 383 Butler and Garsia, Archbold: Pleading, Evidence & Practice in Criminal Cases, 37th ed (1969) at [2872], citing East, A Treatise of the Pleas of the Crown, (1803), vol 1 at 434 and Hale, The History of the Pleas of the Crown, (1736), vol 1 at 627 et seq (emphasis added). 384 R v Brown (1975) 10 SASR 139 at 141. 385 R v Brown (1975) 10 SASR 139 at 153. 386 (1979) 21 SASR 250 at 252. 387 J W C Turner, Kenny's Outlines of Criminal Law, 19th ed (1966) at 455 [490]. Bell law. A husband could not be convicted as principal in the first degree for the rape of his wife on either analysis. At issue is the existence of the immunity, not whether the reason given for it is flawed or has, over time, ceased to provide a principled basis for it. A number of common law rules of liability for criminal offences have their origins in discredited ideas. The definition of the offence of murder stated by Coke388, and thereafter accepted as an authoritative statement of the elements of the offence389, required that the death of the deceased take place within a year and a day of the act causing death. The reason for the rule is suggested to be the limitations of medieval medical knowledge390. If that is the reason, it must be said that the rule survived long after its justification ceased. The rule has since been abolished by statute391. In the same category is the presumption that a boy under 14 years of age is physically incapable of sexual intercourse. This, too, is traced to the statement of the law in the Pleas of the Crown392. The presumption is patently absurd. Nonetheless, it was accepted as a rule of law precluding the 388 Coke, The Third Part of the Institutes of the Laws of England, 4th ed (1669), c 7 at 389 Hawkins, A Treatise of the Pleas of the Crown, (1716), bk 1, c 31 at 79; Hale, The History of the Pleas of the Crown, (1736), vol 1, c 33 at 426; Blackstone, Commentaries on the Laws of England, (1769), bk 4, c 14 at 197-198; East, A Treatise of the Pleas of the Crown, (1803), vol 1 at 214, 343; Halsbury's Laws of England, 2nd ed, vol 9 at 428. See also R v Dyson [1908] 2 KB 454; R v Evans & Gardiner (No 2) [1976] VR 523. 390 Coke, The Third Part of the Institutes of the Laws of England, 4th ed (1669), c 7 at 53. See also Rogers v Tennessee 532 US 451 at 463 (2001); Fisse (ed), Howard's Criminal Law, 5th ed (1990) at 31; Waller and Williams, Criminal Law, 11th ed 391 Crimes Act 1900 (NSW), s 17A; CLC Act, s 18; Crimes Act 1958 (Vic), s 9AA; Crimes Act 1900 (ACT), s 11. The rule has been removed in the Code States: Penalties and Sentences Act 1992 (Q) (as enacted), s 207, Schedule, item 7 under the heading "Criminal Code"; Criminal Code Amendment (Year and a Day Rule Repeal) Act 1993 (Tas); Criminal Law Amendment Act 1991 (WA), s 6. It never formed part of the Criminal Code (NT). 392 Hale, The History of the Pleas of the Crown, (1736), vol 1, c 58 at 630 (mispaginated in the original as 730): "An infant under the age of fourteen years is presumed by law unable to commit a rape, and therefore it seems cannot be guilty of it, and tho in other felonies malitia supplet aetatem in some cases as hath been shewn, yet it seems as to this fact the law presumes him impotent, as well as wanting discretion." Bell conviction of boys for rape393 until it was abolished by statute394. It was sufficient for Lord Coleridge CJ in R v Waite to observe that the rule had been "clearly laid down by Lord Hale" and, on that authority, judges had "refused to receive evidence to shew that a particular prisoner was in fact capable of committing the offence"395. Hale's statement of the immunity was taken as an authoritative statement of the law by all the leading text-writers396. 393 See, eg, R v Eldershaw (1828) 3 Car & P 396 [172 ER 472]; R v Waite [1892] 2 QB 600; R v Williams [1893] 1 QB 320. See also Blackstone, Commentaries on the Laws of England, (1769), bk 4, c 15 at 212; Roscoe, A Digest of the Law of Evidence in Criminal Cases, 2nd ed (1840) at 797; Williams, Criminal Law: The General Part, 2nd ed (1961) at 821. 394 Crimes Act 1900 (NSW), s 61S (originally s 61A(2)); CLC Act, s 73(2); Crimes Act 1958 (Vic), s 62(1); Crimes Act 1900 (ACT), s 68; Sexual Offences Act 1993 (UK), s 1. The presumption has been removed in the Code States: Criminal Code, Evidence Act and other Acts Amendment Act 1989 (Q), s 9; Criminal Code Amendment (Sexual Offences) Act 1987 (Tas), s 5; Acts Amendment (Sexual Assaults) Act 1985 (WA), s 4. It never formed part of the Criminal Code (NT). 395 R v Waite [1892] 2 QB 600 at 601. See also R v Young [1923] SASR 35; R v Packer [1932] VLR 225. 396 East, A Treatise of the Pleas of the Crown, (1803), vol 1 at 446; Burnett, A Treatise on Various Branches of the Criminal Law of Scotland, (1811) at 102; Chitty, A Practical Treatise on the Criminal Law, (1816), vol 3 at 811; Russell, A Treatise on Crimes and Misdemeanors, (1819), vol 1, bk 3, c 6 at 802; Archbold, A Summary of the Law Relative to Pleading and Evidence in Criminal Cases, (1822) at 259; Alison, Principles of the Criminal Law of Scotland, (1832) at 215; Roscoe, A Digest of the Law of Evidence in Criminal Cases, (1835) at 708; Hume, Commentaries on the Law of Scotland, Respecting Crimes, (1844), vol 1, c 7 at 306; Macdonald, A Practical Treatise on the Criminal Law of Scotland, (1867) at 194; Stephen, A Digest of the Criminal Law (Crimes and Punishments), 4th ed (1887), c 29 at 194; Halsbury, The Laws of England, 1st ed, vol 9, par 1236; Sturge, Stephen's Digest of the Criminal Law (Indictable Offences), 9th ed (1950) at 263; Halsbury's Laws of England, 3rd ed, vol 10, par 1437; Butler and Garsia, Archbold: Pleading, Evidence & Practice in Criminal Cases, 35th ed (1962) at 1150; J W C Turner, Russell on Crime, 12th ed (1964), vol 1 at 708; Howard, Australian Criminal Law, (1965) at 135, 145-147. Bell R v Clarence The first judicial consideration of the immunity was in R v Clarence397. A bench of 13 judges was constituted to consider the question of whether the transmission of gonorrhoea by husband to wife in an act of consensual sexual intercourse could amount to the malicious infliction of grievous bodily harm. Wills, Field and Hawkins JJ each left open that circumstances may exist in which a husband could be liable for the rape of his wife. Wills J doubted that "between married persons rape is impossible"398. Field J thought that there may be cases in which a husband could be convicted of a crime arising out of forcibly imposing sexual intercourse on his wife; he did not say whether for rape or some other offence399. Hawkins J accepted that, by the marriage contract, a wife confers on her husband "an irrevocable privilege to have sexual intercourse with her during such time as the ordinary relations created by such contract subsist between them" and that a husband could not be convicted of a rape committed by him upon the person of his wife400. However, a husband was not at liberty to endanger his wife's health and cause her grievous bodily harm by the exercise of "the marital privilege" at a time when he was suffering from venereal disease and when the natural consequence of sexual intercourse would be the communication of that disease to her401. He explained the principles in this way402: "Rape consists in a man having sexual intercourse with a woman without her consent, and the marital privilege being equivalent to consent given once for all at the time of marriage, it follows that the mere act of sexual communion is lawful; but there is a wide difference between a simple act of communion which is lawful, and an act of communion combined with infectious contagion endangering health and causing harm, which is unlawful. … The wife submits to her husband's embraces because at the time of marriage she gave him an irrevocable right to her person. The intercourse which takes place between husband and wife after marriage is not by virtue of any special consent on her part, but is mere submission to an 397 (1888) 22 QBD 23. 398 R v Clarence (1888) 22 QBD 23 at 33. 399 R v Clarence (1888) 22 QBD 23 at 57. 400 R v Clarence (1888) 22 QBD 23 at 51. 401 R v Clarence (1888) 22 QBD 23 at 51. 402 R v Clarence (1888) 22 QBD 23 at 51, 54. Bell obligation imposed upon her by law. Consent is immaterial." (emphasis in original) Pollock B said403: "The husband's connection with his wife is not only lawful, but it is in accordance with the ordinary condition of married life. It is done in pursuance of the marital contract and of the status which was created by marriage, and the wife as to the connection itself is in a different position from any other woman, for she has no right or power to refuse her consent." Consideration of the immunity in Clarence appears to have been prompted by a submission based on a footnote in Stephen's Digest of the Criminal Law. The law in the first edition of the Digest was stated, relevantly, in this way404: "Rape is the act of having carnal knowledge of a woman without her conscious permission ... Provided that: – (1) A husband [it is said] cannot commit rape upon his wife by carnally knowing her himself, but he may do so if he aids another person to have carnal knowledge of her." The footnote relevantly said405: "Hale's reason is that the wife's consent at marriage is irrevocable. Surely, however, the consent is confined to the decent and proper use of marital rights. If a man used violence to his wife under circumstances in which decency or her own health or safety required or justified her in refusing her consent, I think he might be convicted of rape, notwithstanding Lord Hale's dictum. He gives no authority for it, but makes the remark only by way of introduction to the qualification contained in the latter part of clause (1), for which Lord Castlehaven's Case (3 St Tr 402) is an authority." 403 R v Clarence (1888) 22 QBD 23 at 63-64. 404 Stephen, A Digest of the Criminal Law (Crimes and Punishments), (1877), c 29 at 405 Stephen, A Digest of the Criminal Law (Crimes and Punishments), (1877), c 29 at Bell Stephen J gave the leading judgment in Clarence406. He used the occasion to draw attention to the alteration of the footnote, removing the suggestion that a man might in certain circumstances be indicted for the rape of his wife, in the most recent edition of his text407. Stephen was a great master of the criminal law408. An account of his draft criminal code and the subsequent Commission appointed to report upon it is contained in the joint reasons in Darkan v The Queen409. To the extent that the Draft Code appended to the Report of the Commissioners differed from Stephen's original draft, the differences were noted in the Report. The provisions dealing with offences against the person were said to correspond (as did the provisions in Stephen's original draft) with the Offences against the Person Act 1861 (UK)410, "supplemented by a reduction to writing of the common law doctrines and definitions"411. The Offences against the Person Act 1861 (UK) prescribed the punishment for rape but left the definition of the offence to the common law. It is apparent that the definition of rape in the Draft Code was understood by its authors412 to be a statement of the common law. Relevantly, the offence was defined as "the act of a man having carnal knowledge without her consent of a female who is not his wife"413. The Criminal Code Indictable Offences Bill 1878 (UK), on which the Commissioners' draft was based, and which defined rape in the same terms, had been circulated to the Judges, Chairmen and Deputy Chairmen of Quarter Sessions, Recorders and "many members of the bar and 406 A L Smith, Mathew and Grantham JJ, Huddleston B and Lord Coleridge CJ concurred. 407 R v Clarence (1888) 22 QBD 23 at 46. See Stephen, A Digest of the Criminal Law (Crimes and Punishments), 4th ed (1887), c 29 at 194 fn 4. 408 Radzinowicz, Sir James Fitzjames Stephen, 1829-1894, Selden Society Lecture, 409 (2006) 227 CLR 373 at 385-386 [33]-[36]; [2006] HCA 34. 410 24 & 25 Vict c 100, s 48. 411 Criminal Code Bill Commission, Report of the Royal Commission Appointed to Consider The Law Relating to Indictable Offences, (1879) [C 2345] at 22. 412 Lord Blackburn, Mr Justice Barry, Lord-Justice Lush and Sir James Fitzjames Stephen. 413 Section 207 of the Draft Code, Appendix to the Criminal Code Bill Commission, Report of the Royal Commission Appointed to Consider The Law Relating to Indictable Offences, (1879) [C 2345] at 107. Bell other gentlemen having practical experience in the administration of the criminal law"414 in England and Ireland with the invitation to comment on it. The absence of any suggestion in the Commissioners' Report that the offence of rape was to be modified under the Code is eloquent of the acceptance by those engaged in the administration of the criminal law in England and Ireland at the time that the offence could not be committed by a husband against his wife415. Sir Samuel Griffith drew on the English Draft Code in preparing his draft criminal code for Queensland416. In the latter, the offence of rape was defined, relevantly, as the "carnal knowledge of a woman, not his wife"417. The marginal notes reveal that Sir Samuel Griffith considered this definition to be a statement of the common law. In Canada, before the enactment of the Criminal Code in 1892, the offence of rape, while punishable as a felony under legislation modelled on the Offences against the Person Act 1861 (UK), depended upon the common law for its elements of proof. It is apparent that the understanding in that jurisdiction was that the offence could not be committed by a husband against his wife418. The Criminal Code defined rape as involving the "carnal knowledge of a woman who is not his wife"419. It does not appear that this was thought to involve any departure from the existing law. The absence of binding decision The absence of a binding decision does not mean that a rule stated in authoritative texts and accepted and acted upon by the legal profession over many years may not acquire status as law. The point is made by Sir John Smith 414 Criminal Code Bill Commission, Report of the Royal Commission Appointed to Consider The Law Relating to Indictable Offences, (1879) [C 2345] at 5. 415 See Criminal Code Bill Commission, Report of the Royal Commission Appointed to Consider The Law Relating to Indictable Offences, (1879) [C 2345] at 25. 416 Griffith, Draft of a Code of Criminal Law, (1897) at iv. 417 Griffith, Draft of a Code of Criminal Law, (1897), s 353 at 135. 418 Taschereau, The Criminal Statute Law of the Dominion of Canada, 2nd ed (1888) 419 Criminal Code 1892 (Can), s 266. Bell in his commentary on R v C420, by reference to Foakes v Beer421. In the latter case, the House of Lords held itself bound to follow a rule stated by Coke to have been laid down in Pinnel's Case422 in 1602, although their Lordships disliked it and there was no decision in which it had been applied. As the Earl of Selborne LC put it423: "The doctrine itself, as laid down by Sir Edward Coke, may have been criticised, as questionable in principle, by some persons whose opinions are entitled to respect, but it has never been judicially overruled; on the contrary I think it has always, since the sixteenth century, been accepted as law. If so, I cannot think that your Lordships would do right, if you were now to reverse, as erroneous, a judgment of the Court of Appeal, proceeding upon a doctrine which has been accepted as part of the law of England for 280 years." Brennan J, the only Justice in R v L to consider proof of the offence of rape under the common law, considered the elements to have been fixed by Hale's statement of them424. The evidence in favour of that conclusion is compelling. Has the immunity ceased to exist? It was submitted that legal and social changes to the status of married women had produced the result that the immunity had ceased to be a rule of law on a date before the subject events. There were differing views about when that change to the law occurred, a circumstance which tends to highlight a difficulty with accepting the underlying premise. The respondent and the Attorney- General for South Australia contended that the foundation for the immunity had "crumbled to dust" as at the "early to mid twentieth century". The Attorney- General of circumstances had occurred "by the end of the 19th century". Reference was made to the enactment of the Married Women's Property Acts; the amendment of matrimonial causes statutes removing the "double-standard" relating to adultery as a ground for dissolution of marriage; and, more generally, the extension of the the Commonwealth contended the relevant change that 420 [1991] Crim LR 62. 421 (1884) 9 App Cas 605. 422 (1602) 5 Co Rep 117a [77 ER 237]. 423 Foakes v Beer (1884) 9 App Cas 605 at 612. See also at 622-623 per Lord Blackburn, 623-624 per Lord Watson, 629-630 per Lord FitzGerald. 424 R v L (1991) 174 CLR 379 at 399. Bell franchise to women, as combining to produce a state of affairs that was inconsistent with the continued existence of the immunity. These submissions were maintained in the face of a good deal of evidence to the contrary. The one case relied on to support the submissions was R v Jackson425. In that case, Lord Halsbury LC rejected the proposition that the relation of husband and wife gave the husband "complete dominion over the wife's person"426. The holding that an order for restitution of conjugal rights did not confer on the husband a right to imprison his wife is a tenuous basis for concluding that the husband was now amenable to prosecution for having sexual intercourse with his wife without her consent. In the first edition of Halsbury, published in 1909, almost 20 years after the decision in Jackson, the law was stated as being that "[a] man cannot be guilty as a principal in the first degree of a rape upon his wife, for the wife is unable to retract the consent to cohabitation which is a part of the contract of In Tasmania, the Married Women's Property Act was enacted in 1882. Women had been granted the franchise for both federal and State parliamentary elections by 1904428. The Matrimonial Causes Act 1860 (Tas) was amended in 1919 to remove the double-standard with respect to adultery429. Nonetheless, when the Parliament enacted the Criminal Code for Tasmania in 1924, a quarter of a century after the enactment of the Queensland Criminal Code, the crime of 426 [1891] 1 QB 671 at 679. 427 Halsbury, The Laws of England, 1st ed, vol 9, par 1236. The second edition, under the editorship of Viscount Hailsham, published in 1933, stated the law in the same terms: vol 9, par 815. It was not until after Clarke (see fn 295 above), which provided a limited exception to the immunity in the case of a wife living separately under the protection of a court order, that the third edition, under the editorship of Viscount Simons, published in 1955, stated the rule in qualified terms: "[a] man cannot, as a general rule, be guilty as a principal in the first degree of a rape upon his wife" (vol 10, par 1437). 428 Commonwealth Franchise Act 1902 (Cth); Constitution Amendment Act 1903 (Tas). 429 Matrimonial Causes Amendment Act 1919 (Tas) (Royal Assent proclaimed on 17 May 1920). Bell rape was defined in the same way as under the latter430. The significant changes in the legal status of married women which had occurred by 1924 do not appear to have been viewed at the time as inconsistent with the immunity. In the same year, the House of Lords delivered judgment in G v G431. That was an appeal from the dismissal of an application for a decree of nullity of marriage brought by a husband on the ground of his wife's impotency. The appellant and his wife were married in 1913 and the evidence of their relations spanned the period from that date to 1921. The wife had evinced an hysterical reluctance to engage in sexual intercourse. The question for the court was whether this psychological obstacle to consummation amounted to incapacity, as distinct from the mere wilful refusal of conjugal rights. The court below had doubted that the husband's repeated attempts at intercourse had exhibited "a sufficient virility"432. It was in this context that Lord Dunedin observed433: "It is indeed permissible to wish that some gentle violence had been employed; if there had been it would either have resulted in success or would have precipitated a crisis so decided as to have made our task a comparatively easy one." His Lordship considered the husband's account "as to why he did not use a little more force than he did" to have been an acceptable explanation434 and the appeal was allowed. The speeches in G v G speak to another age. The decision in that case is closer to the date of the acts charged against the appellant than was the hearing of this appeal. More than a decade after the events giving rise to this appeal, in 1975, Lawton LJ, giving the judgment of the English Court of Appeal in R v Cogan, proceeded upon acceptance that it was a legal impossibility for a man to rape his wife during cohabitation435. The accused bore accessorial liability for the rape of his wife by another. In the following year, Geoffrey Lane LJ extended the exception to the immunity to allow the conviction of a husband for the rape of his 430 Criminal Code (Tas), s 185 (as enacted). Relevantly, rape was defined as involving "carnal knowledge of a female not his wife". 432 G v G [1924] AC 349 at 357. 433 G v G [1924] AC 349 at 357. 434 G v G [1924] AC 349 at 358. 435 R v Cogan [1976] QB 217 at 223. Bell wife where he had given an undertaking not to molest her436. Of present significance is his Lordship's view that, "[a]s a general principle, there is no doubt that a husband cannot be guilty of rape upon his wife"437. The undertaking given in lieu of an injunction operated in that case to eliminate the wife's matrimonial consent to intercourse. A convenient account of the law in England as it was understood in December 1983 is contained in the Report of the Criminal Law Revision Committee, which had been asked to review the law relating to, and penalties for, sexual offences438: "In defining rape the Sexual Offences (Amendment) Act 1976 uses the term 'unlawful sexual intercourse'. What is 'unlawful' is left to the common law. The general rule is that sexual intercourse is 'unlawful' if it occurs outside marriage. Sexual intercourse between husband and wife is not 'unlawful' except in a fairly narrow class of cases, which can be broadly described as cases where the parties have separated and their separation has been acknowledged by a court." The existence of the immunity was also accepted in decisions of Australian courts delivered after 1963. Reference has been made earlier in these reasons to decisions of the South Australian Supreme Court439. In New South Wales, Victoria and Tasmania, the English line of authority allowing an exception to the immunity in the case of a wife living separately and under the protection of a court order was adopted440. In R v McMinn, Starke ACJ observed441: "There can be no doubt that for centuries the law in England (and in Australia) has been that a man cannot rape his wife. That this principle of law is out of tune with modern thinking has been recognized in Victoria 436 Steele (1976) 65 Cr App R 22. 437 Steele (1976) 65 Cr App R 22 at 24. 438 Criminal Law Revision Committee, Sexual Offences, Report No 15, (1984) Cmnd 9213 at 17-18 [2.57]. 439 See above at [212]. 440 C (1981) 3 A Crim R 146; R v McMinn [1982] VR 53; Bellchambers (1982) 7 A Crim R 463. 441 [1982] VR 53 at 55. Bell by the Crimes (Sexual Offences) Act 1980 and there are similar Acts in other States." In New Zealand, a statute enacted in 1961 provided that no man could be convicted of rape of his wife unless, at the time of the intercourse, there was in force a decree nisi of divorce or nullity and the parties had not resumed cohabitation, or there was in force a decree of judicial separation or a separation order442. An amendment to the statute in 1981 maintained the immunity, save in cases where the husband and wife were living separately443. This restricted immunity was not removed until 1986444. The Model Penal Code, first published by the American Law Institute in 1962, relevantly provided that "[a] male who has sexual intercourse with a female not his wife is guilty of rape"445. In the revised commentary, published in 1980, this "traditional limitation" of the offence was maintained446. The proposition that by the mid-20th century or earlier the immunity had fallen into desuetude as the result of changes in the conditions of society is without support. In this country, as in other common law countries, the continued existence of the immunity does not appear to have been seen as inconsistent with the recognition of the equal status of married women. There is the curious spectacle in this appeal of the respondent and the Attorney-General for South Australia contending that the maintenance of the immunity by the mid- 20th century was inconsistent with the rights and privileges of married women, notwithstanding that as late as 1976 the Parliament of South Australia chose to preserve it447. 442 Crimes Act 1961 (NZ), s 128(3). 443 Family Proceedings Act 1980 (NZ), First Schedule. 444 Crimes Amendment Act (No 3) 1985 (NZ), s 2. 445 American Law Institute, Model Penal Code: Official Draft and Explanatory Notes, 446 American Law Institute, Model Penal Code and Commentaries (Official Draft and Revised Comments), (1980), Pt 2, Art 213 at 271-275, 341-346. The Comment notes that the rule existed at common law, prevailed at the time the Model Penal Code was drafted and "has been continued in most revised penal laws": at 341. 447 The original Bill introduced into Parliament, which purported to abolish the immunity completely, was rejected by the House of Assembly: Sallmann and Chappell, Rape Law Reform in South Australia: A Study of the Background to the Reforms of 1975 and 1976 and of their Subsequent Impact, Adelaide Law Review Research Paper No 3, (1982) at 20-21, 30-31. Bell By the mid-20th century, the notion that the immunity depended on the wife's irrevocable consent to intercourse may no longer have been seen as the justification for it. However, this is not to accept that the immunity had "crumbled to dust". The contemporary evidence suggests that the immunity was a recognised and accepted feature of the law of rape, albeit that the rationale supporting it may have changed. In 1954, Norval Morris and A L Turner, both then senior lecturers in law at the University of Melbourne, writing of the law respecting marital rape, were critical of irrevocable consent as the justification for the immunity448. They went on to discuss the "special position" of a married couple in law and in fact and to say449: "Intercourse then is a privilege at least and perhaps a right and a duty inherent in the matrimonial state, accepted as such by husband and wife. In the vast majority of cases the enjoyment of this privilege will simply represent the fulfilment of the natural desires of the parties and in these cases there will be no problem of refusal. There will however be some cases where, the adjustment of the parties not being so happy, the wife may consistently repel her husband's advances. If the wife is adamant in her refusal the husband must choose between letting his wife's will prevail, thus wrecking the marriage, and acting without her consent. It would be intolerable if he were to be conditioned in his course of action by the threat of criminal proceedings for rape." The leading Australian text on the criminal law published in 1965 praised the decision in R v Clarke450, which allowed an exception to the immunity; however, the author went on to observe451: "[A] husband should not walk in the shadow of the law of rape in trying to regulate his sexual relationships with his wife. If a marriage runs into difficulty, the criminal law should not give to either party to the marriage 448 Morris and Turner, "Two Problems in the Law of Rape", (1954) 2 University of Queensland Law Journal 247 at 258. 449 Morris and Turner, "Two Problems in the Law of Rape", (1954) 2 University of Queensland Law Journal 247 at 259. 450 [1949] 2 All ER 448. See fn 295 above. 451 Howard, Australian Criminal Law, (1965) at 146. Bell the power to visit more misery upon the other than is unavoidable in the nature of things." The Mitchell Committee explained its reasons for proposing to confine the immunity in this way452: "The view that the consent to sexual intercourse given upon marriage cannot be revoked during the subsistence of the marriage is not in accord with modern thinking. In this community today it is anachronistic to suggest that a wife is bound to submit to intercourse with her husband whenever he wishes it irrespective of her own wishes. Nevertheless it is only in exceptional circumstances that the criminal law should invade the bedroom. To allow a prosecution for rape by a husband upon his wife with whom he is cohabiting might put a dangerous weapon into the hands of the vindictive wife and an additional strain upon the matrimonial relationship. The wife who is subjected to force in the husband's pursuit of sexual intercourse needs, in the first instance, the protection of the family law to enable her to leave her husband and live in peace apart from him, and not the protection of the criminal law. If she has already left him and is living apart from him and not under the same roof when he forces her to have sexual intercourse with him without her consent, then we can see no reason why he should not be liable to prosecution for rape." (emphasis added) The views expressed by the Mitchell Committee were in line with those expressed by the authors of the revised commentaries to the US Model Penal Code in 1980453 and by the English Criminal Law Revision Committee in 452 Criminal Law and Penal Methods Reform Committee of South Australia, Special Report: Rape and Other Sexual Offences, (1976) at 14 [6.2]. 453 American Law Institute, Model Penal Code and Commentaries (Official Draft and Revised Comments), (1980), Pt 2, Art 213 at 345: "The problem with abandoning the immunity ... is that the law of rape, if applied to spouses, would thrust the prospect of criminal sanctions into the ongoing process of adjustment in the marital relationship." 454 Criminal Law Revision Committee, Sexual Offences, Report No 15, (1984) Cmnd 9213 at 21 [2.69]. Explaining the majority view, which was not to remove the immunity, the Committee said: "Some of us consider that the criminal law should keep out of marital relationships between cohabiting partners – especially the marriage bed – except where injury arises, when there are other offences which can be charged." Bell In R v C, the English Court of Appeal set out the advice that an imagined solicitor might have given a husband who inquired as to the legality of marital rape in 1970455. This was in the context of a submission respecting the foreseeability of further development of the law in light of decisions which had allowed exceptions to the immunity. The Commonwealth Attorney-General submitted that the hypothesised advice applied with equal force in this case. The determination of the issue raised by this appeal does not depend upon consideration of foreseeability of change to the law. Nonetheless, the opinions of the academic lawyers and the members of law reform committees set out above may suggest that the solicitor in R v C was a man in advance of his times. There is a more fundamental difficulty with the submission that the Court should hold that a substantive rule of law affecting liability for a serious criminal offence has simply disappeared because of a perception that changed conditions of society no longer provided a justification for it. The powerful reasons against an ultimate court of appeal varying or modifying a settled rule or principle of the common law456 apply with particular force to a variation or modification which has the effect of extending criminal liability. It is for the parliament to determine that a rule of exemption from criminal liability is no longer suited to the needs of the community. The respondent and the Attorney-General for South Australia submitted that it is the responsibility of this Court to modify the law to avoid the "unjust" operation of a rule of immunity respecting criminal liability457. The submission is singular, given that there is no jurisdiction in Australia in which the common law governs a husband's liability for the rape of his wife. No occasion arises to modify the law to make it "an effective instrument of doing justice according to contemporary standards in contemporary conditions"458. The law of marital rape in each Australian jurisdiction has been brought into line with contemporary 455 R v C [2004] 1 WLR 2098 at 2103-2104 [19]; [2004] 3 All ER 1 at 6-7. 456 State Government Insurance Commission v Trigwell (1979) 142 CLR 617 at 633 per Mason J (Stephen and Aickin JJ agreeing); Zecevic v Director of Public Prosecutions (Vict) (1987) 162 CLR 645 at 664 per Wilson, Dawson and Toohey JJ, 677-678 per Deane J; [1987] HCA 26; Lamb v Cotogno (1987) 164 CLR 1 at 11 per Mason CJ, Brennan, Deane, Dawson and Gaudron JJ; [1987] HCA 457 The respondent's Notice of Contention asserts that, "if [the immunity] ever was part of the common law of Australia, it ceased to be so as at the date of the commission of the offences in this matter". 458 O'Toole v Charles David Pty Ltd (1991) 171 CLR 232 at 267 per Brennan J; [1991] HCA 14. Bell standards. Any statement of the common law respecting the liability of a husband for the rape of his wife with whom he was living could only apply to offences alleged to have been committed before the enactment of the statutory reforms. The declaration of the law for which the respondent contends carries with it that the parliaments of the States and Territories legislated over the course of the last century459 upon a wrong understanding of the law. That understanding was reflected in the Code States in the way in which the offence of rape was defined. In those States, the position remains that a husband is not liable to be convicted for the rape of his wife before the date on which the words "not his wife" were removed from the Criminal Code. In the jurisdictions which preserved the common law, the declaration would make it possible to reach back beyond the date on which statutory reforms were effected and attach liability to conduct occurring not less than a quarter of a century ago. In South Australia, it would be possible to successfully prosecute a man for the rape of his wife in the years up to 1976. In the more recent past, the same man would enjoy an immunity for the same conduct460. That is because the 1976 amendments enacted by the South Australian Parliament with the evident intention of limiting the immunity would now be seen to have conferred it. The fact that the parliaments of every Australian jurisdiction enacted legislation upon the understanding that the immunity was a rule of the common law provides some evidence that it was; and is a good reason for this Court not to now declare it to be otherwise. The rule of law holds that a person may be punished for a breach of the law and for nothing else461. It is abhorrent to impose criminal liability on a person for an act or omission which, at the time it was done or omitted to be done, did not subject the person to criminal punishment. Underlying the principle is the idea that the law should be known and accessible, so that those who are subject to it may conduct themselves with a view to avoiding criminal punishment if they choose462. However, its application does not turn on consideration of whether a person might be expected to have acted differently had he or she known that the proposed conduct was prohibited. Deane J's 459 In the case of Queensland, since 1899. 460 The immunity conferred by s 73(5) of the CLC Act was in force between 9 December 1976 and 16 April 1992. 461 See fn 286 above. See also Polyukhovich v The Commonwealth (1991) 172 CLR 501 at 609-611 per Deane J, 687-688 per Toohey J; [1991] HCA 32; Williams, Criminal Law: The General Part, 2nd ed (1961) at 575-576. 462 Blackstone, Commentaries on the Laws of England, (1765), bk 1 at 45-46. Bell dissenting reasons in Zecevic v Director of Public Prosecutions (Vict) explain why that is so463: "The vice of such a retrospective abolition of a defence to a charge of murder lies not in the prospect of injustice to some imaginary killer who has killed on the basis that his crime will be reduced from murder to manslaughter in the event that he was found to have been acting excessively in self-defence. It lies in the fundamental injustice of inequality under the law which is unavoidable when the administration of the criminal law is reduced to a macabre lottery by what the late Professor Stone described as flagrant violation of the 'well-established judicial policies of the criminal law in favorem libertatis, and against ex post facto punishment'464." The departure from the statement of the elements of self-defence in Viro v The Queen465, sanctioned by the majority in Zecevic, was undertaken in circumstances in which it was considered unlikely to occasion injustice and in which it was acknowledged that the endeavour to state the "defence" by reference to the onus had proved unworkable466. Nothing in the judgments in Zecevic affords support for the acceptance of the respondent's contention that this Court should restate the common law with the effect of extending criminal liability to a class of persons previously exempt from that liability. The common law was demeaning to women in its provision of the immunity. It is no answer to that recognition to permit the conviction of the appellant for an act for which he was not liable to criminal punishment at the date of its commission. For these reasons I would allow the appeal, set aside the answer to the question of law given by the majority in the Full Court and, in lieu thereof, answer that question "no". 463 (1987) 162 CLR 645 at 677-678. 464 Precedent and Law, (1985) at 190. 465 (1978) 141 CLR 88 at 146-147; [1978] HCA 9. 466 Zecevic v Director of Public Prosecutions (Vict) (1987) 162 CLR 645 at 664 per Wilson, Dawson and Toohey JJ. Bell

HIGH COURT OF AUSTRALIA REGIONAL EXPRESS HOLDINGS LIMITED APPELLANT AND AUSTRALIAN FEDERATION OF AIR PILOTS RESPONDENT Regional Express Holdings Limited v Australian Federation of Air Pilots [2017] HCA 55 13 December 2017 ORDER Appeal dismissed. On appeal from the Federal Court of Australia Representation M J Follett with L R Howard for the appellant (instructed by Clayton Utz Lawyers) J M Firkin with J F Swanwick for the respondent (instructed by Australian Federation of Air Pilots) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Regional Express Holdings Limited v Australian Federation of Air Pilots Industrial relations – Fair Work Act 2009 (Cth) – Entitlement of industrial association to represent industrial interests of persons – Where industrial association registered organisation of employees under Fair Work (Registered Organisations) Act 2009 (Cth) – Where industrial association applied for orders in relation to alleged contraventions of civil remedy provisions in relation to persons – Where persons not members of industrial association but eligible for membership in accordance with eligibility rules of industrial association – Whether industrial association had standing to apply for orders on basis it was entitled interests of persons within meaning of s 540(6)(b)(ii) of Fair Work Act – Whether eligibility of persons for membership of industrial association sufficient to make industrial association entitled to represent industrial interests of persons within meaning of s 540(6)(b)(ii) of Fair Work Act. to represent industrial Words and phrases – "Dunlop Rubber principle", "eligibility rules", "eligible for membership", "entitled to represent the industrial interests of", "industrial association", "registered organisation of employees". Fair Work Act 2009 (Cth), ss 539(2), 540(6)(b)(ii), 546. KIEFEL CJ, KEANE, NETTLE, GORDON AND EDELMAN JJ. The question for determination in this appeal is whether the fact that a person is eligible for membership of an industrial association in accordance with its eligibility rules is sufficient to make the industrial association "entitled to represent the industrial interests of" that person within the meaning of s 540(6)(b)(ii) of the Fair Work Act 2009 (Cth). For the reasons which follow, the question should be answered that, in the case of an industrial association which is registered as an organisation under the Fair Work (Registered Organisations) Act 2009 (Cth) ("the FWRO Act"), it is sufficient. Relevant statutory provisions An "industrial association" is defined by s 12 of the Fair Work Act as an association of employees or independent contractors, or both, or an association of employers, that is registered or recognised as such an association (however described) under a workplace law; an association of employees or independent contractors, or both, a purpose of which is the protection and promotion of their interests in matters concerning their employment or their interests as independent contractors; or an association of employers a principal purpose of which is the protection and promotion of their interests in matters concerning employment and/or independent contractors. An "industrial law" is defined by s 12 of the Fair Work Act as the Act itself, the FWRO Act, a law of the Commonwealth that regulates the relationships between employers and employees, or a State or Territory industrial law. The FWRO Act enables an industrial association that meets the standards set out in that Act to register as an organisation under that Act ("registered organisation"). Chapter 3 of the Fair Work Act is concerned with rights and responsibilities of employees, employers and organisations. Section 336 provides that the objects of Pt 3-1 of Ch 3 include protecting workplace rights; protecting freedom of association by ensuring that persons are, among other things, free to be represented, or not represented, by industrial associations; and providing effective relief for persons who have been adversely affected as a result of contraventions of Pt 3-1. Section 340(1) provides, relevantly, that a person must not take adverse action against another person because the other person has a workplace right or has exercised or proposes to exercise a workplace right, or in order to prevent the exercise of a workplace right. A "workplace right" is defined by s 341 as including an entitlement to the benefit of a workplace law, workplace instrument Nettle Gordon Edelman or order made by an industrial body. Section 12 defines an "industrial body" as the Fair Work Commission, or a court or commission performing or exercising functions and powers under an industrial law corresponding to the functions and powers conferred on the Fair Work Commission. Section 343(1) provides that a person must not organise or take, or threaten to organise or take, any action against another person with intent to coerce the other person to exercise or not exercise, or propose to exercise or not exercise, a workplace right, or to do or not do so in a particular way. Section 345(1) provides that a person must not knowingly or recklessly make a false or misleading representation about the workplace rights of another person or the exercise, or effect of the exercise, of a workplace right by another person. Chapter 4 of the Fair Work Act provides for compliance and enforcement. Section 539, which is within Ch 4, stipulates the civil remedy provisions of the Act and provides separately for each civil remedy provision the persons who may apply to specified courts for orders in relation to a contravention or proposed contravention of that civil remedy provision. As is set out in item 11 of the table in s 539(2), ss 340(1), 343(1) and 345(1) are civil remedy provisions and the persons who may apply to the Federal Court or the Federal Circuit Court for orders in relation to a contravention or proposed contravention of any of those provisions are a person affected by the contravention, an industrial association and an inspector. Section 546 relevantly provides that the Federal Court or the Federal Circuit Court may, on application, order a person to pay a pecuniary penalty if the Court is satisfied that the person has contravened a civil remedy provision. Section 540 limits the persons who may apply for orders in relation to remedy provisions. contraventions or proposed contraventions of civil Relevantly, sub-ss (5) and (6) provide that: "Employer organisations (5) An employer organisation may apply for an order under this Division, in relation to a contravention or proposed contravention of a civil remedy provision, only if the organisation has a member who is affected by the contravention, or who will be affected by the proposed contravention. Nettle Gordon Edelman Industrial associations (6) An industrial association may apply for an order under this Division, in relation to a contravention or proposed contravention of a civil remedy provision, only if: the industrial association is affected by the contravention, or will be affected by the proposed contravention; or if the contravention is in relation to a person: the person is affected by the contravention, or will be affected by the proposed contravention; and the industrial association is entitled to represent the industrial interests of the person." The facts The appellant ("Rex") is in the business of providing commercial aviation services. On 5 September 2014, it sent a letter to a number of persons to the effect that any Rex cadet who insisted on his or her workplace right to appropriate accommodation during layovers under cl 58.1 of the Regional Express Pilots' Enterprise Agreement 2011 would not be given a position of command1. The respondent ("the Federation") is an industrial association which is a registered organisation of employees under the FWRO Act. The Federation alleges that the letter contravened various civil remedy provisions of the Fair Work Act (being ss 340(1), 343(1) and 345(1)) in relation to two separate groups of persons. It is not in issue that, if the sending of the letters contravened s 340(1), s 343(1) or s 345(1), the contraventions were in relation to the persons to whom Rex sent the letters. The question is whether the Federation is entitled to represent the industrial interests of those persons. It has not been alleged that any of those persons is a member of the Federation. It is common ground that they are entitled to be members of the Federation pursuant to its eligibility rules. 1 Australian Federation of Air Pilots v Regional Express Holdings [2016] FCCA 316 Nettle Gordon Edelman Proceedings at first instance On 15 April 2015, the Federation applied to the Federal Circuit Court of Australia for, inter alia, the imposition of pecuniary penalty orders for the alleged contraventions, pursuant to item 11 of the table in s 539(2) of the Fair Work Act. Rex applied to have the claim summarily dismissed on the ground that the Federation lacked standing. The primary judge (Judge Riethmuller) rejected2 Rex's application on the basis that, because the persons to whom the letter had been sent – and who were therefore affected by the alleged contraventions – were eligible for membership of the Federation, the Federation was entitled to represent their industrial interests within the meaning of s 540(6)(b)(ii) of the Fair Work Act. The appeal to the Full Court of the Federal Court Rex's appeal to the Full Court of the Federal Court of Australia (Jessup J, with whom North and White JJ agreed) was dismissed3. The Full Court based their decision on an historical survey of legislative development of the expression "entitled to represent the industrial interests of". As Jessup J observed4, the expression owes its origins to the line of cases, culminating in R v Dunlop Rubber Australia Ltd; Ex parte Federated Miscellaneous Workers' Union of Australia5, which established the entitlement of a trade union to represent the industrial interests of employees eligible for membership of the union ("the Dunlop Rubber principle"). From there, it may be traced through provisions of the Conciliation and Arbitration Act 1904 (Cth), the Industrial Relations Act 1988 (Cth) and the Workplace Relations Act 1996 (Cth) to the current legislative framework of the Fair Work Act. Over the years, it has been legislatively deployed, and understood, as meaning that an industrial organisation is entitled to represent the industrial interests of employees who are eligible for membership 2 See Federation v Rex [2016] FCCA 316 at [29]-[30], [43]. 3 Regional Express Holdings Ltd v Australian Federation of Air Pilots (2016) 244 FCR 344. 4 Rex v Federation (2016) 244 FCR 344 at 350 [16] (North J and White J agreeing at (1957) 97 CLR 71; [1957] HCA 19. Nettle Gordon Edelman of the organisation6. Jessup J concluded7 that it is used in s 540(6)(b)(ii) in the same sense. The parties' contentions Rex contended that the Full Court erred by allowing themselves to be diverted from the text of the legislation by judicial and legislative history. In Rex's submission, it is also apparent that the Full Court misstated or misunderstood the Dunlop Rubber principle as establishing that a registered trade union in an industrial dispute represented the industrial interests of non-members. According to Rex, this Court's decision in Re Finance Sector Union of Australia; Ex parte Financial Clinic (Vic) Pty Ltd8 established that, when a trade union made demands on an employer in relation to the terms and conditions of non- member employees, the union was not representing the interests of the non- members but rather only the interests of the union's members. Alternatively, Rex contended, the Full Court erred by basing their analysis on a meaning of the expression "entitled to represent the industrial interests of the person" which, even if it were applicable to a registered trade union, was incapable of application to some forms of industrial association that do not have eligibility rules. In Rex's submission, although the expression "entitled to represent the industrial interests of the person" may present a constructional choice, it is a choice that should be made in favour of a narrow conception of entitlement equating to a "title, right or claim" such as would arise from membership. To do otherwise, it was contended, would be opposed to the limitations on the rights of representation stipulated in s 540(6) and (7) of the Fair Work Act and the legislative policy of freedom of association disclosed within the attendant objects of Pt 3-1 of the Act. The Federation contended that the Full Court's construction should be upheld, essentially for the reasons given by the Full Court. 6 Rex v Federation (2016) 244 FCR 344 at 363 [56] (North J and White J agreeing at 7 Rex v Federation (2016) 244 FCR 344 at 364 [60] (North J and White J agreeing at (1993) 178 CLR 352; [1993] HCA 34. Nettle Gordon Edelman The text of the legislation The Full Court were not diverted from the text of the legislation. The expression "entitled to represent the industrial interests of the person" does not have a plain and ordinary meaning which in and of itself reveals the criterion of entitlement. Accordingly, in order to discern the statutory purpose of the expression, and thence the criterion of entitlement, the Full Court adopted an entirely conventional approach to statutory construction of looking to the context of the provision both within the Fair Work Act9 and against the background of its (i) Context within the Fair Work Act Looking first to the context of the provision within the Fair Work Act, it may be observed that the expression "entitled to represent the industrial interests of" appears in multiple provisions throughout the Act. For example, under s 176(1) it is provided that an employee organisation may act as the bargaining representative of an employee for a proposed enterprise agreement that is not a "greenfields agreement" if the employee is a member of the organisation11 or the employee appoints the organisation in writing as his or her bargaining representative12 and the organisation "is entitled to represent the industrial interests of the employee in relation to work that will be performed under the 9 See CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408 per Brennan CJ, Dawson, Toohey and Gummow JJ; [1997] HCA 2; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 31 [4] per French CJ, 46-47 [47] per Hayne, Heydon, Crennan and Kiefel JJ; [2009] HCA 41; Certain Lloyd's Underwriters v Cross (2012) 248 CLR 378 at 389 [24], 391-392 [30]-[31] per French CJ and Hayne J, 411-412 [88]-[89] per Kiefel J; [2012] HCA 56. 10 See Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503 at 519 [39]; [2012] HCA 55; Alphapharm Pty Ltd v H Lundbeck A/S (2014) 254 CLR 247 at 265-266 [42] per Crennan, Bell and Gageler JJ; [2014] HCA 42. See also Tabcorp Holdings Ltd v Victoria (2016) 90 ALJR 376 at 379 [8], 389 [77], 390 [86]-[87]; 328 ALR 375 at 378, 391, 393; [2016] HCA 4. 11 Fair Work Act 2009 (Cth), s 176(1)(b)(i). 12 Fair Work Act, s 176(1)(c). Nettle Gordon Edelman agreement"13. Under s 481, a permit holder may enter premises for the purpose of investigating a suspected contravention of the Act or a term of a fair work instrument that relates to or affects a member of the permit holder's organisation if the member is one "whose industrial interests the organisation is entitled to represent"14 and the member performs work on the premises15. Under s 483A(1), a permit holder may enter premises for the purpose of investigating a suspected contravention of the Act or a term of a fair work instrument that relates to a TCF award worker "whose industrial interests the permit holder's organisation is entitled to represent"16 and who performs work on the premises17. Under s 484, a permit holder may enter premises for the purposes of holding discussions with one or more employees or TCF award workers who perform work on the premises18 whose "industrial interests the permit holder's organisation is entitled to represent"19 if the employee or TCF award worker wishes to participate in the discussions20. Significantly, s 480(a) provides that a purpose of the power to enter premises is to enable the industrial organisation to hold discussions with "potential members". Under s 533, the Fair Work Commission may make an order in relation to an employer's failure to notify or consult registered employee associations in relation to the dismissal of 15 or more employees for reasons of an economic, technological, structural or similar nature in breach of s 531(1), inter alia, upon the application of a "registered employee association that is entitled to represent the industrial interests of one of the employees"21. 13 Fair Work Act, s 176(3). 14 Fair Work Act, s 481(1)(a). 15 Fair Work Act, s 481(1)(b). 16 Fair Work Act, s 483A(1)(a)(i). 17 Fair Work Act, s 483A(1)(a)(ii). 18 Fair Work Act, s 484(a). 19 Fair Work Act, s 484(b). 20 Fair Work Act, s 484(c). 21 Fair Work Act, s 533(c). Nettle Gordon Edelman Subject to contrary indication, it is to be presumed that the expression "entitled to represent the industrial interests of" has the same meaning wherever it appears in the Fair Work Act22; and, given that in each case where the expression appears it is directed to the capacity or standing of an industrial association to take some action or to intervene in relation to persons whose industrial interests the organisation represents, it logically presents as intended to have the same meaning wherever it so appears. Contrary to Rex's submissions, that is so notwithstanding that the expression sometimes appears in the Act in contexts that do not involve the exercise of judicial power or the assertion of accrued rights. Next, it is to be observed that the majority of provisions in which the expression appears prescribe the standing of an industrial association to take action in relation to a person who is a member of the organisation. In each such case, the presence of the expression "entitled to represent the industrial interests of" adds to the requirement that the person be a member of the organisation a second or further condition that the organisation be entitled to represent the industrial interests of the person. Consequently, in each such case, the condition "entitled to represent the industrial interests of" is logically to be understood as something which may arise otherwise than from a person's membership of the organisation. Thirdly, as will be recalled, s 540(5) provides that an employer organisation may apply for an order in relation to a contravention or proposed contravention of a civil remedy provision: "only if the organisation has a member who is affected by the contravention, or who will be affected by the proposed contravention." (emphasis added) 22 See Registrar of Titles (WA) v Franzon (1975) 132 CLR 611 at 618 per Mason J (Barwick CJ and Jacobs J agreeing at 616, 621); [1975] HCA 41; McGraw-Hinds (Aust) Pty Ltd v Smith (1979) 144 CLR 633 at 643 per Gibbs J; [1979] HCA 19; Kline v Official Secretary to the Governor-General (2013) 249 CLR 645 at 660 [32] per French CJ, Crennan, Kiefel and Bell JJ; [2013] HCA 52; Tabcorp Holdings (2016) 90 ALJR 376 at 387 [65]; 328 ALR 375 at 388-389. See generally Pearce and Geddes, Statutory Interpretation in Australia, 8th ed (2014) at 150-151 [4.6]. Cf Thirteenth Beach Coast Watch Inc v Environment Protection Authority (2009) 29 VR 1 at 6 [10]. Nettle Gordon Edelman By contrast, s 540(6)(b) provides that an industrial association may apply for an order in relation to a contravention or proposed contravention of a civil remedy provision in relation to a person if: the person is affected by the contravention, or will be affected by the proposed contravention; and the industrial association is entitled to represent the industrial interests of the person." (emphasis added) Thus it can be seen, even within s 540 itself in the contrast between s 540(5), which is expressly conditioned on membership, and s 540(6), which is not, that an organisation's entitlement to represent the industrial interests of a person may arise otherwise than from the person's membership of the organisation. And to repeat, given the absence of any identified signification that "entitled to represent the industrial interests of" is used otherwise than consistently throughout the Fair Work Act, it is to be concluded that it has the same meaning where it appears in provisions like ss 484, 533 and 540(6), which are not conditioned on membership, as it does in provisions like ss 176(1) and 481, which are. Of course, as counsel for Rex contended, the fact that a person is a member of an organisation may have the result that, by reason of the terms of membership, the organisation is entitled to represent the industrial interests of the person. But, contrary to Rex's submissions, given the way that the Fair Work Act draws a distinction between a person's membership of an organisation and the organisation's entitlement to represent the industrial interests of the person, it cannot be that membership is the only entitlement to represent the industrial interests of a person recognised by the Act. The Act's conception of entitlement to represent the industrial interests of a person is necessarily broader than that; and, as will be explained, reflects the Dunlop Rubber principle sense of an entitlement to represent the industrial interests of a person who satisfies an organisation's eligibility rules. Contrary also to Rex's submissions, the fact that, in some sections of the Fair Work Act, there are requirements both that a person be a member of an organisation and that the organisation be entitled to represent the industrial interests of the person does not suggest that the latter must mean something other than an entitlement to represent the industrial interests of the person arising by reason of the organisation's eligibility rules. The Act recognises that some Nettle Gordon Edelman members of organisations may not meet the organisation's eligibility rules23. The requirement that the organisation be entitled to represent the industrial interests of the person is used, consistently with the Dunlop Rubber principle, to ensure that the organisation has industrial coverage in relation to the matter in issue. Counsel for Rex contended in the alternative that the concept of entitlement should be seen as limited to an entitlement which arises either by reason of membership or because of specific authorisation or, perhaps, consent. But the form of the Fair Work Act excludes that possibility. As has been explained, if the Act's conception of an organisation's entitlement to represent the industrial interests of a person were one of entitlement that arises by reason of the person's membership of the organisation, there would be no point in the provisions of the Act which provide that it is a condition of an industrial association's entitlement to take action in relation to a person who is a member of the organisation that the organisation be entitled to represent the industrial interests of the person. And if the Act's conception of an organisation's entitlement to represent the industrial interests of a person were one of entitlement that arises by reason of a specific authorisation or consent, it is to be expected that the requirement for authorisation or consent would be expressed, as it is in s 176(1)(c), in terms of the person appointing the organisation in writing to take that action. As it is, the fact that s 176(1)(c) coupled with s 176(3) draws a clear distinction between providing for a person appointing an organisation in writing to be that person's bargaining representative, and the necessity for such a bargaining representative to be entitled to represent the industrial interests of the person, operates as a further, powerful indication that the latter is not limited to entitlement which arises by reason of authorisation or consent. (ii) Historical context The Full Court were correct in their understanding and estimation of the significance of the Dunlop Rubber principle cases. As Jessup J in effect observed24, they were the starting point of the concept of an organisation's interests of persons eligible for entitlement to represent industrial the 23 See for example Fair Work (Registered Organisations) Act 2009 (Cth), s 166(3). 24 Rex v Federation (2016) 244 FCR 344 at 350 [18] (North J and White J agreeing at Nettle Gordon Edelman membership of the organisation. And as his Honour concluded25, the history of legislative application of that concept, culminating in its appearance in the Fair Work Act, logically implies that the entitlement of an organisation to represent the industrial interests of a person that is referred to in s 540(6)(b)(ii) equates with that concept. The Dunlop Rubber principle cases began with Burwood Cinema Ltd v Australian Theatrical and Amusement Employees' Association26. Until then, it was considered that the Commonwealth Court of Conciliation and Arbitration had no jurisdiction to make an award against employers in respect of employees who had abandoned or withdrawn from a dispute27. At that stage of the law's development, the organisation was viewed as the contractual agent of its members and its participation in the dispute was conceived of as participation as agent on behalf of its members. Burwood Cinema represented a fundamental change in approach. It established that an organisation's role in relation to an industrial dispute was as a principal standing in the place of its members as representative of the class associated together in the organisation. Thus, as was held in Burwood Cinema28, where a registered organisation of employees in a particular industry made a demand regarding wages and conditions upon a number of employers in that industry, neither the fact that some of the employers did not employ members of the organisation, nor the fact that all of the employees were satisfied with their wages and conditions, prevented the dispute arising from the employers' non-compliance with the demand from constituting an "industrial dispute" within the meaning of s 51(xxxv) of the Constitution. Starke J expressed the point succinctly29: "An industrial relationship, and not a contractual relationship, is all that is necessary to constitute an industrial dispute. The nexus is to be found in 25 Rex v Federation (2016) 244 FCR 344 at 363-364 [56]-[57] (North J and White J agreeing at 345 [1], 365 [65]). 26 (1925) 35 CLR 528; [1925] HCA 7. 27 See Holyman's Case (1914) 18 CLR 273; [1914] HCA 36. 28 (1925) 35 CLR 528 at 538-539, 541 per Isaacs J, 543-545 per Powers J, 547-548 per Rich J, 548-549, 551 per Starke J. 29 Burwood Cinema Ltd v Australian Theatrical and Amusement Employees' Association (1925) 35 CLR 528 at 549. Nettle Gordon Edelman the industry or in the calling or avocation in which the participators are engaged." The next step was the decision in Metal Trades Employers Association v Amalgamated Engineering Union30. It established31 that, where a union of employees in an industry served a log of demands as to terms and conditions of employment of all employees in the industry, whether members of the union or not, there was an industrial dispute for the settlement of which an award could be made binding on all employers as to the terms and conditions of all employees, including non-union member employees. Dunlop Rubber32 then added to what had been established in Burwood Cinema and Metal Trades the critical insight that an association acts in an industrial dispute in an independent capacity because the association represents "not definite or then ascertainable individuals but a group or class the actual membership of which is subject to constant change". Thus, as it was held33, a trade union had the capacity "to formulate industrial claims in the interests of that group or class ascertainable by reference to the 'conditions of eligibility' prescribed by its rules" (emphasis added). It was no obstacle to the existence of an industrial dispute initiated by the trade union serving a log of claims on an employer that none of the employer's employees was a union member. It was sufficient if the employer's employees were eligible for membership of the union34. 30 (1935) 54 CLR 387; [1935] HCA 79. 31 Metal Trades Employers Association v Amalgamated Engineering Union (1935) 54 CLR 387 at 404, 410-411 per Latham CJ, 419-421 per Rich and Evatt JJ, 442-443 32 (1957) 97 CLR 71 at 81. 33 R v Dunlop Rubber Australia Ltd; Ex parte Federated Miscellaneous Workers' Union of Australia (1957) 97 CLR 71 at 87. 34 Dunlop Rubber (1957) 97 CLR 71 at 87. See also R v Cohen; Ex parte Motor Accidents Insurance Board (1979) 141 CLR 577 at 584-585 per Mason J (Stephen J and Aickin J agreeing at 582, 592); [1979] HCA 46. Nettle Gordon Edelman Next, as Jessup J noticed35, although the expression "entitled to represent the industrial interests of" was not used as such in Dunlop Rubber, or for that matter for some time in any of the subsequent authorities, as a result of Dunlop Rubber it came to be understood that an organisation or a union was entitled to protect the industrial interests of those groups of employees who were within its conditions of eligibility. That understanding, later reflected in recommendations in the Report of the Committee of Inquiry on Co-ordinated Industrial Organisations36, informed the terms of s 142A of the Conciliation and Arbitration Act. It empowered the Conciliation and Arbitration Commission to make demarcation orders giving one organisation of employees the right to the exclusion of others to represent, in respect of all or some industrial interests under the Act, a "class or group of employees who are eligible for membership of the organization, either generally or subject to such limitations as it may specify". Counsel for Rex contended that the subsequent decision of the majority in Re Finance Sector Union of Australia threw doubt on, or limited, the Dunlop Rubber principle, by holding that an industrial dispute as to the superannuation scheme to which employers should contribute on behalf of employees will not normally arise at the instance of some employees or an organisation of employees with respect to the contributions to be made on behalf of employees who are not members of the organisation concerned. That contention should be rejected. It misconceives the rationale of the decision. So far from casting doubt on the Dunlop Rubber principle, the majority in Re Finance Sector Union of Australia37 expressly recognised that a union may make a claim in respect of the employment of non-members with respect to their position as employees relative to the position of those employees who are members of the union. Their Honours also recognised that such a union has an industrial interest in ensuring that non-members receive the same level of employment benefits as employees who are members, and therefore has legitimate, wide-ranging interests with respect to superannuation. Certainly, it was held that its interests did not extend to specifying the identity of the 35 Rex v Federation (2016) 244 FCR 344 at 350 [18] (North J and White J agreeing at 36 See generally Sweeney, Report of the Committee of Inquiry on Co-ordinated Industrial Organisations, Parliamentary Paper No 220/1974. 37 Re Finance Sector Union of Australia; Ex parte Financial Clinic (Vic) Pty Ltd (1993) 178 CLR 352 at 364 per Mason CJ, Deane, Toohey and Gaudron JJ. Nettle Gordon Edelman superannuation fund to which contributions would be paid in respect of employees who were not and never became members "where the specification emanates from nothing more than a desire to bring about a situation in which there is a single industry superannuation scheme". But that was so, it was said, not because the union could not make a claim in respect of the employment of non-members with respect to their position as employees relative to the position of those employees who are members of the union, but because the identity of the fund to which superannuation contributions were to be made on behalf of non- members, standing alone, was not a matter that bore in any way on their employment position relative to the employment position of union members. There is nothing in that which casts any doubt on the idea that a union's entitlement to represent the industrial interests of non-members in relation to matters which could potentially bear upon the conditions of employment and remuneration of members rests upon the non-members being eligible for membership under the union's eligibility rules. Section 142A of the Conciliation and Arbitration Act was several times amended and expanded, for some time appearing as s 118(3) of the Industrial Relations Act. In that form, it conferred power on the Industrial Relations Commission, inter alia, to make: "an order that an organisation of employees shall have the right, to the exclusion of another organisation or organisations, to represent under this Act the industrial interests of a particular class or group of employees who are eligible for membership of the organisation". Later, it was repealed and replaced by s 118A(1), which then became s 118A(1) of the Workplace Relations Act, and then ultimately by s 133(1) of the FWRO Act in relevantly similar terms. As Jessup J observed38, the first appearance in legislation of the exact expression "entitled to represent the industrial interests of" was in the Industrial Relations Act in provisions which allowed an organisation to adopt rules enabling it to enter into an agreement with a State registered union, to the effect that members of the State registered union who were ineligible State members were 38 Rex v Federation (2016) 244 FCR 344 at 351-352 [22] (North J and White J agreeing at 345 [1], 365 [65]). Nettle Gordon Edelman eligible to become members of the organisation. Relevantly, s 202(3) and (4) of the Industrial Relations Act provided that: "(3) An organisation is not entitled to represent the industrial interests of persons who are only eligible for membership of the organisation under an agreement entered into under rules made under subsection (1). ... the organisation is not entitled to represent the industrial interests of the person until a record of the person's eligibility is entered in the register kept under paragraph 268(1)(a)." The Explanatory Memorandum recorded39 that the purpose of s 202 was to enable members of certain State registered unions to become members for limited purposes of the counterpart organisation registered under the Industrial Relations Act, and, consistently with the Dunlop Rubber principle, that: "Such persons will not be able to have their industrial interests represented by the organisation unless and until they become eligible to be members under the organisation's eligibility rules." the Workplace Relations Act provided A grammatical variant of the expression "entitled to represent the industrial interests of" appeared in provisions of Pts VIA and VIB of the Industrial Relations Act40 and later the Workplace Relations Act, some provisions of which were enacted in reliance upon the corporations power41. Section 170FB the Industrial Relations Commission must not make an order under s 170FA unless the Commission had first received an application for the making of the order from an employee "or a trade union whose rules entitle it to represent the industrial interests of employees, to be covered by the order". Section 170GA(1)(a) provided for an employer informing "each trade union of which any of the employees was a member, and which represented the industrial interests of such of those that 39 Australia, House of Representatives, Industrial Relations Bill 1988, Explanatory Memorandum at 70. 40 See Industrial Relations Reform Act 1993 (Cth). 41 See Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416 at 539 per Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ; [1996] HCA 56. Nettle Gordon Edelman employees as were members". Section 170LJ(1) provided for an employer making an agreement with an employee organisation which has at least one member whose employment will be subject to the agreement, if the organisation "is entitled to represent the industrial interests of the member in relation to work that will be subject to the agreement". A form of words similar to that quoted appeared in ss 170LK(4)(b) and 170M(3)(d)(ii); and, in Pt VIII of that Act, which, like ss 539 and 540 of the Fair Work Act, was directed to compliance, s 178(5A) provided that: "A penalty for a breach of a term of a certified agreement may be sued for and recovered by: an organisation: that has at least one member whose employment is subject to the agreement; and that is entitled to represent the industrial interests of the member in relation to work carried on by the member that is subject to the agreement ..." Consistently with the Dunlop Rubber principle, those provisions were understood as operating on the basis that an organisation's entitlement to represent the industrial interests of a member in relation to work covered by the agreement derived from eligibility rules giving the organisation coverage in relation to the work of the member covered by the agreement. Section 405(3) of the Workplace Relations Act provided for an employee organisation to apply on behalf of an employee for a remedy for contravention of a civil remedy provision if: the employee has requested the organisation to apply on the employee's behalf; and a member of the organisation is employed by the employee's employer; and the organisation is entitled, under its eligibility rules, to represent the industrial interests of the employee." Nettle Gordon Edelman In that context, too, the organisation's entitlement to represent the industrial interests of the employee was considered to be the Dunlop Rubber principle sense of eligibility rules giving the organisation coverage in relation to the work of the member covered by the agreement. The same was also true of s 495(7)(b)(iii), which provided for application by an employee organisation on behalf of an employee if the organisation was entitled under its eligibility rules to represent the industrial interests of that employee in relation to work carried on by that employee for the employer; s 605(4)(b), relating to civil penalties sought by an organisation on behalf of a transferring employee; and s 616(4)(c)(iii) in relation to applications by an organisation for a pecuniary penalty on behalf of an employee. There remains to be considered the Fair Work Act and its introduction of the concept of enterprise agreements and bargaining representatives for proposed enterprise agreements. Section 176(1) provides that, among other "bargaining representatives" for a proposed agreement that is not a "greenfields agreement": "(b) an employee organisation is a bargaining representative of an employee who will be covered by the agreement if: the employee is a member of the organisation; and in the case where the agreement is a multi-enterprise agreement in relation to which a low-paid authorisation is in operation – the organisation applied for the authorisation; unless the employee has appointed another person under paragraph (c) as his or her bargaining representative for the agreement, or has revoked the status of the organisation as his or her bargaining agreement under subsection 178A(2) ..." representative the for Section 176(3) adds that: "Despite subsections (1) and (2): an employee organisation; or an official of an employee organisation (whether acting in that capacity or otherwise); Nettle Gordon Edelman cannot be a bargaining representative of an employee unless the organisation is entitled to represent the industrial interests of the employee in relation to work that will be performed under the agreement." Standing alone, there might be some doubt about the meaning of that provision. Read, however, against the background of s 178(5A) of the Workplace Relations Act, and its legislative antecedents outlined above, there really is no room for any doubt that the entitlement to represent the industrial interests of an employee referred to in s 176(3) of the Fair Work Act is the same Dunlop Rubber principle sense of an organisation's entitlement to represent the industrial interests of persons eligible for membership of the organisation. It is the same with s 484 of the Fair Work Act, read with s 480 (which it will be recalled provides the objects of Pt 3-4), which provides for a permit holder to enter premises to hold discussions with potential members of the permit holder in the following terms: "A permit holder may enter premises for the purposes of holding discussions with one or more employees or TCF award workers: (a) who perform work on the premises; and (b) whose industrial interests the permit holder's organisation is entitled to represent; and (c) who wish to participate in those discussions." Despite the absence from s 484 of any requirement of the kind imposed by s 176(1)(b)(i) that the employee be a member of the permit holder, there is no reason to doubt that the entitlement to represent the employee that is referred to in s 484(b) is the Dunlop Rubber principle sense of entitlement to represent the industrial interests of an employee who, though not a member, is eligible for membership of the permit holder. And logically the same also applies to s 540(6), which, as will be recalled, provides for an industrial association to apply for an order in relation to a contravention or proposed contravention of a civil remedy provision in relation to a person if: the person is affected by the contravention, or will be affected by the proposed contravention; and Nettle Gordon Edelman the industrial association is entitled to represent the industrial interests of the person." Admittedly, as Jessup J observed42, that conclusion means that there is a significant difference between the conditions of the previous entitlement of an organisation to take action for breach of a certified agreement under s 178(5A) of the Workplace Relations Act and the conditions of the present entitlement of an industrial association to take action under s 540(6) of the Fair Work Act for contravention of a civil remedy provision: the former was conditioned on there being at least one member of the organisation whose employment was subject to the agreement whose interests the organisation was entitled under its rules to represent; under the latter, the entitlement applies regardless of whether any of the employees affected is a member of the industrial association. There is also the difference that the words "under its eligibility rules", which appeared in s 405(3) of the Workplace Relations Act, do not appear in s 540(6) of the Fair Work Act. And it is notable, as Jessup J said43, that those changes went unremarked in the Explanatory Memorandum and Second Reading Speech. But, as his Honour reasoned, the effect of s 539 of the Fair Work Act was to consolidate in one provision a miscellany of standing provisions, and thus to employ the expression "entitled to represent the industrial interests of" in s 540(6) in a novel setting. Given the prior well-established meaning of the expression, the indications remain that it is used in its established sense in its new setting. Rex criticised that idea as in effect ignoring the possibility that not all industrial associations referred to in s 540(6) would necessarily have rules of eligibility for membership. But Jessup J was alive to that possibility. As the Full Court in effect concluded44, the fact that the Dunlop Rubber principle sense of entitlement to represent the industrial interests of a person may not fit precisely with industrial associations that do not have eligibility rules is not a sufficient reason to doubt that the established sense of the expression is applicable to an industrial association which, like the Federation, is a registered organisation and 42 Rex v Federation (2016) 244 FCR 344 at 364 [59] (North J and White J agreeing at 43 Rex v Federation (2016) 244 FCR 344 at 364 [59] (North J and White J agreeing at 44 Rex v Federation (2016) 244 FCR 344 at 364-365 [61]-[62] (North J and White J agreeing at 345 [1], 365 [65]). Nettle Gordon Edelman therefore does have eligibility rules. It makes sense that the Dunlop Rubber principle conception of entitlement to represent should apply to registered organisations in the same way that it applied to registered trade unions, and, contrary to Rex's submission, s 540(7), by emphasising the requirement in s 540(6) that an organisation be entitled to apply for an order, reinforces that conclusion. That is not to say that s 540(6) is necessarily limited to registered organisations. It may be that the Dunlop Rubber principle sense of entitlement to represent the industrial interests of persons applies, mutatis mutandis, to other forms of industrial organisation having a real interest in ensuring compliance with civil remedy provisions in relation to a particular class of persons. Contrary to Rex's submission, so to conclude would not be inconsistent with the objects of freedom of choice for which Pt 3-1 of the Fair Work Act provides. They are directed to the rights of an employee to choose his or her representative in relation to a matter affecting the employee. By contrast, as was emphasised in the Explanatory Memorandum45, s 540(6) is concerned with the standing of an organisation to bring in its own right civil remedy proceedings for contraventions of the Act affecting a designated class of persons in relation to whom the organisation has industrial coverage. In the end, however, it is enough for the disposition of this matter that s 540(6) applies to registered organisations. As the Full Court concluded, whether it otherwise applies is a question better left until it arises. Conclusion The appeal should be dismissed. 45 See Australia, House of Representatives, Fair Work Bill 2008, Explanatory Memorandum at 325-326 [2132]-[2133].

HIGH COURT OF AUSTRALIA APPELLANT AND COMPTROLLER-GENERAL OF CUSTOMS RESPONDENT Parker v Comptroller-General of Customs [2009] HCA 7 12 February 2009 Appeal dismissed with costs. ORDER On appeal from the Supreme Court of New South Wales Representation J T Gleeson SC with M J Darke and D A Lloyd for the appellant (instructed by D J Fagan SC with G M Elliott for the respondent (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Parker v Comptroller-General of Customs Practice and procedure – Appeals – Procedural fairness – Respondent issued a warrant under s 214 of Customs Act 1901 (Cth) authorising seizure of documents relating to single bottle of brandy – Officers of respondent seized documents relating to "other goods" imported within previous five years – District Court decided in In the matter of the appeal of Lawrence Charles O'Neill (unreported, District Court of New South Wales, 18 August 1988) that warrants issued under s 214 did not permit seizure of five year documents – Court of Appeal decided O'Neill "mistaken" without affording appellant opportunity to make submissions – Whether appellant denied procedural fairness in Court of Appeal – Scope of principles respecting procedural fairness in curial proceedings – Whether appellate court required to afford parties opportunity to be heard on non-binding decision. Practice and procedure – Appeals – Procedural fairness – Court of Appeal went on to decide appeal on footing O'Neill correct – Whether lack of opportunity to make submissions with respect to O'Neill caused prejudice to appellant and affected outcome in Court of Appeal. Evidence – Illegally or improperly obtained evidence – Evidence Act 1995 (NSW) ("Evidence Act"), s 138 – Respondent admitted condition precedent to execution of warrant not satisfied – Whether wilful disregard of Act in execution of warrant – Whether additional fact of seizure of five year documents relevant to exercise of discretion under s 138. Practice and procedure – Appeals – Procedural fairness – Function of appellate court upon review of exercise by trial judge of discretion under s 138 of Evidence Act. Words and phrases – "procedural fairness", "relating to the goods", "the goods". Customs Act 1901 (Cth), s 214, Sched V. Evidence Act 1995 (NSW), s 138. Introduction On 30 July 1992 the Comptroller-General of Customs commenced proceedings in the Supreme Court of New South Wales against the appellant, Stephen Edward Parker, two companies, Lawpark Pty Ltd ("Lawpark") and Breven Pty Ltd ("Breven") and another individual, Gary Thomas Lawler. The proceedings arose, inter alia, out of alleged offences against the Customs Act 1901 (Cth) ("the Customs Act") involving unauthorised movement of goods from a bond warehouse and the evasion of duty payable under the Customs Act. The offences were said to have been committed between 1 August 1987 and 31 May The background to the charges against Mr Parker was an inquiry undertaken between 1987 and 1989 by officers of the Australian Customs Service ("Customs") into suspected contraventions of the Spirits Act 1906 (Cth) ("the Spirits Act") and the Customs Act. The investigators formed the opinion that some importers of brandy had, before bottling and selling the imported product, been mixing it with a grain-based alcohol, produced in Australia, on which duty had not been paid. The primary targets of the inquiry were Lawpark, which imported and distributed spirits, Kingswood Distillery Pty Ltd ("Kingswood Distillery"), which manufactured and processed spirits in Australia, and Breven, which owned a bond store where imported spirits were warehoused without incurring any liability to pay duty. Mr Parker was a director and shareholder of Lawpark and Breven. On 6 March 1990, Customs officers went to a number of premises and, relying upon notices to produce issued under s 214 of the Customs Act and reg 171 of the Customs Regulations, required the production of books and documents. They took the view that the requirements were not met. They then undertook compulsory searches and seizures relying upon warrants issued under s 214. Following examination of the documents obtained from their searches a number of charges were laid under the Customs Act including those against Mr Parker. Those against Mr Parker related to the unauthorised removal of imported Scotch whisky from the Breven warehouse and the evasion of duty payable in relation to the whisky. The proceedings against Mr Parker came on for hearing in the Supreme Court of New South Wales in April 2005. By then he was the only remaining defendant. The extraordinary delay was in part the result of a stay of proceedings ordered on 10 June 1994. By the time of the trial the Spirits Act and the provisions of the Customs Act under which the documents had been seized had been repealed. Proceedings against each of the other defendants had been concluded. The Comptroller-General1 sought orders that Mr Parker be convicted of offences contrary to s 33(1) and s 234(1)(a) of the Customs Act. He also sought orders for the recovery of penalties and for the payment of unpaid duty2. He made an averment of all pleaded facts under s 255 of the Customs Act. Mr Parker did not give evidence himself and did not adduce evidence in his defence. The Comptroller-General tendered a body of documentary evidence at the trial. The documents had been seized from Lawpark's premises at Wetherill Park in New South Wales. Their admissibility was challenged under s 138 of the Evidence Act 1995 (NSW) ("the Evidence Act") on the basis that they had been obtained improperly and/or in contravention of an Australian law. It was said, inter alia, that the statutory power to search for and seize the relevant documents had not been enlivened because a condition precedent to the exercise of the power, namely the existence of a valid notice to produce issued under s 214 of the Customs Act, had not been satisfied. A deficiency in the notice to produce was conceded by the Comptroller- General in his defence. The concession was that the notice was so imprecisely worded that the person required to produce documents pursuant to it would not be able to know the extent of the documents to which it applied. The trial judge, Simpson J, also found, in a separate ruling, that the range of documents seized went well beyond what would have been authorised by s 214 of the Customs Act even if the notice had been valid. That construction was based upon O'Neill, a judgment of the District Court of New South Wales given in 19883. 1 By virtue of s 7 of the Customs Act as it stood at the relevant date, the Comptroller-General is the person who has general administration of the Act. The "Collector" is any principal officer of Customs or any officer "doing duty in the matter in relation to which the expression is used" (s 8(1)(a)). A Collector of Customs for a State or Territory is the principal officer of Customs for all or part of that State or Territory (s 8(1)(b)). After the Customs, Excise and Bounty Legislation Amendment Act 1995 (Cth) the term "Comptroller-General" refers to the Chief Executive Officer of Customs (s 18). The "Collector" refers to the Chief Executive Officer, the Regional Director for a State or Territory, or any officer doing duty in the relevant matter. These reasons use the terms "Comptroller- General" and "Collector" as they applied before the 1995 amendments. 2 For the history and nature of customs prosecutions and the standard of proof where penalties are claimed see Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 216 CLR 161 at 192-198 [101]-[113] per Hayne J; [2003] HCA 49. In the matter of Lawrence Charles O'Neill unreported, District Court of New South Wales, 18 August 1988. Although the seizure was therefore accepted as unlawful, Simpson J admitted the evidence. Section 138 allows the admission of evidence obtained improperly or in contravention of an Australian law if "the desirability of admitting the evidence outweighs the undesirability of admitting evidence that has been obtained in the way in which the evidence was obtained". Her Honour published her reasons for that ruling on 8 May 2006, on the same day in which she delivered her judgment in the case. Her Honour made 14 orders of conviction, the first of which related to the offence of moving goods subject to the control of Customs without authorisation under the Customs Act. The other 13 related to evading duty payable on various quantities of alcohol. Her Honour stood the matter over for further consideration as to the consequences of those orders. Subsequently she ordered that Mr Parker pay a penalty of 3.25 times the amount of the duty evaded. This was a figure in excess of $10 million. She imposed a penalty of $12,000 in relation to the offence of unauthorised movement of goods. Mr Parker was required to pay the costs of the proceedings4. Mr Parker filed a notice of appeal in the Court of Appeal of the Supreme Court of New South Wales on 5 June 2006. An amended notice was filed on 19 March 2007. He sought to appeal from both the interlocutory ruling and the final judgment. The notice of appeal in the Court of Appeal raised a large number of grounds. Those ultimately pressed focussed on the admission of the documents seized from Lawpark's premises on 6 March 1990. The appeal was heard on 16 and 17 October 2007 and dismissed on 6 December 2007. Basten JA, with whom Mason P and Tobias JA agreed, delivered the judgment of the Court of Appeal5. In the course of the judgment, the Court held that O'Neill had been wrongly decided and that s 214 did not bear the construction, favourable to Mr Parker, that had been adopted by the trial judge. On 13 June 2008, Mr Parker was granted special leave to appeal to this Court limited to the ground that the Court of Appeal had denied him procedural fairness by finding against him without notice of its intention to depart from O'Neill. The Comptroller-General by notice of contention sought to maintain the correctness of the Court of Appeal's construction of s 214. The Court of Appeal was correct in its construction of s 214. It should, however, have given notice to Mr Parker of its intention to consider that 4 Comptroller-General of Customs v Parker [No 3] [2006] NSWSC 1269. 5 Parker v Comptroller-General of Customs (2007) 243 ALR 574. question. In the event, Mr Parker was not deprived of the possibility of a successful outcome. There was no practical unfairness: "Fairness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice."6 The appeal should be dismissed with costs. The statutory framework – the Customs Act As at 6 March 1990 s 214 of the Customs Act provided: "(1) Whenever information in writing has been given on oath to the Collector that goods have been unlawfully imported exported undervalued or entered or illegally dealt with, or that it is intended to unlawfully import export undervalue enter or illegally deal with any goods, or whenever any goods have been seized or detained, the owner shall immediately upon being required so to do by the Collector produce and hand over to him all books and documents relating to the goods so imported exported entered seized or detained undervalued or illegally dealt with, or intended to be unlawfully imported exported undervalued entered or illegally dealt with, and of all other goods imported or exported by him at any time within the period of 5 years immediately preceding such request seizure or detention, and shall also produce for the inspection of the Collector or such other officer as he may authorize for that purpose and allow such Collector or officer to make copies of or extracts from all books or documents of any kind whatsoever wherein any entry or memorandum appears in any way relating to any such goods. Penalty: $1,000. For the purposes of this section, the Comptroller or the Collector of Customs for a State or Territory may issue to any officer of Customs or officer of police a Customs Warrant, in accordance with the form in Schedule V, marked with a Customs stamp. 6 Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 at 14 [37] per Gleeson CJ; [2003] HCA 6. If any person fails to comply with a requirement by the Collector under this section, an officer of Customs or officer of police, having with him a Customs Warrant in the form of Schedule V hereto, may, at any time of the day or night, break open and enter into any house, premises or place in which any books or documents relating to the goods are or are supposed to be, and search – the house, premises or place; any person therein or thereon; and any chests, trunks or packages therein or thereon, and take possession of, remove and impound any of those books and documents which are found." Schedule V to the Customs Act was in the following terms: "SCHEDULE V THE COMMONWEALTH OF AUSTRALIA Customs Warrant WHEREAS information in writing has been given on oath to me that goods have been unlawfully imported, exported, undervalued or entered or illegally dealt with or that it is intended to unlawfully import, export, undervalue or enter or illegally deal with goods, (or Whereas goods have been seized or detained) You are hereby authorized, in the event of failing to comply immediately with any requirement made in pursuance of section two hundred and fourteen of the Customs Act 1901-1923, to enter into, at any time of the day or night, and search, any house premises or place in which any books or documents relating to the goods are or are supposed to be; and to break open any such house premises or place and search any person therein or thereon and any chests trunks or packages therein or thereon; and to take possession of, remove and impound any of those books and documents which are found: And for so doing this shall be your sufficient warrant. This warrant has force throughout This warrant shall remain in force for a period of one month from the date thereof unless revoked before the expiration of that period. Dated this day of 19 . (CUSTOMS STAMP) (Signature)" The term "produce documents" was defined in s 4 of the Customs Act thus: "'Produce documents' means that the person on whom the obligation to produce documents is cast shall to the best of his power produce to the Collector all documents relating to the subject matter mentioned." Section 214 conditioned the obligation to produce documents on the making of a requirement by the Collector. It did not prescribe that such requirements should be effected or accompanied by the tender of a notice to produce. Nevertheless, reg 171 of the Customs Regulations provided that a notice to produce documents under s 214 should be in accordance with Form 61, contained in Sched 1 to the Regulations. Nothing turns on the content of the form. Regulation 171 may be seen as mandating a written notice to produce as the means of making the requirement contemplated by s 214(1). The Customs Act was largely drafted by the first Comptroller-General of Customs, Sir Harry Wollaston, and was modelled on the Customs Act 1890 (Vic)7 and the Customs Consolidation Act 1853 (UK)8, later incorporated into the Customs Consolidation Act 1876 (UK)9. The Customs Consolidation Act 1876 made provision for search and seizure of goods pursuant to writs of assistance issued by the Court of Exchequer10 or warrants issued by Justices of the Peace11. There appears to have been no general provision for requiring production or authorising seizure of documents relating to suspect goods. A precursor of s 214 was enacted as s 22 of the Customs Act 1896 (Vic) by way of amendment to the 1890 Act. It conferred power on the Collector of Customs and officers of Customs to require production of, and to seize, documents relating to unlawfully imported or entered articles and goods seized or detained under any Customs Act. The power was conditioned by an information on oath sworn before the Collector. There was no provision in that section for 7 Cooper, Customs and Excise Law, (1984) at 8 [115]. 8 16 & 17 Vict c 107. 9 39 & 40 Vict c 36. 10 39 & 40 Vict c 36, s 204. 11 39 & 40 Vict c 36, s 205. notice of a requirement to produce documents. The power to seize documents was not conditioned upon non-compliance with the request to produce nor upon the existence of a warrant. The power extended to documents relating to articles and goods imported or seized and detained within six years immediately preceding the requirement for production. Section 214 of the Customs Act, as enacted in 1901, imposed an obligation to produce documents on the requirement of the Collector. It did not include a power of search and seizure. The Collector was, however, given power under s 215 to impound or retain documents presented in connection with any entry or required to be produced under the Customs Act. There was also separate provision for the issue of writs of assistance and customs warrants modelled on the UK legislation12. In 1923, s 214 was amended by adding s 214(2) and (3)13. The new sub- sections remained in substantially the same form up to the time relating to these proceedings. In the Second Reading Speech the Minister for Trade and Customs described the amending legislation as "purely a formal measure" involving no "principle"14. Section 255 was enacted at the same time and was the focus of the parliamentary debate. In 1975 the Law Reform Commission recommended repeal of s 214 and its replacement with a less draconian alternative15. The recommendation was not implemented. In 1992 the Commission again considered s 214 describing it as "very unsatisfactory"16. Nobody, including Customs, supported its retention. The Commission recommended its repeal and substitution with a power of search and seizure upon a warrant issued by a judicial officer17. 12 Customs Act, ss 198, 199 and Scheds III, IV. 13 Customs Act 1923 (Cth). 14 Australia, House of Representatives, Parliamentary Debates (Hansard), 13 July 15 Australia, Law Reform Commission, Criminal Investigation, Report No 2, (1975) at 211 (Appendix C). 16 Australia, Law Reform Commission, Customs and Excise, Report No 60, (1992), vol II at 70-71 [7.4]. 17 Australia, Law Reform Commission, Customs and Excise, Report No 60, (1992), vol II at 22 [3.4], 70-71 [7.4]. Section 214 and Sched V were repealed with effect from 1 July 1995 by the Customs, Excise and Bounty Legislation Amendment Act 1995 (Cth) ss 2(5) and 6 and Sched 4, Items 44 and 67. Section 255 of the Customs Act, as at 6 March 1990, provided in sub- "In any Customs prosecution the averment of the prosecutor or plaintiff contained in the information, complaint, declaration or claim shall be prima facie evidence of the matter or matters averred."18 The section was confined in its application to matters of fact19 and did not operate to increase or diminish the probative value of any evidence given by witnesses20. It did not apply to an averment of the intent of the defendant21. The statutory framework – the Evidence Act, s 138 As at 12 April 2005, the date of the trial, and subsequently, s 138 was in the following terms: "(1) Evidence that was obtained: improperly or in contravention of an Australian law; or in consequence of an impropriety or of a contravention of an Australian law; is not to be admitted unless the desirability of admitting the evidence outweighs the undesirability of admitting evidence that has been obtained in the way in which the evidence was obtained. 18 A similar provision, s 144 of the Excise Act 1901 (Cth), was discussed in Chief Executive Officer of Customs v El Hajje (2005) 224 CLR 159 at 172-174 [34]-[39]; [2005] HCA 35. 19 Section 255(2)(b). 20 Section 255(3). 21 Section 255(4)(a). (3) Without limiting the matters that the court may take into account under subsection (1), it is to take into account: the probative value of the evidence; and the importance of the evidence in the proceeding; and the nature of the relevant offence, cause of action or defence and the nature of the subject-matter of the proceeding; and the gravity of the impropriety or contravention; and (e) whether the impropriety or contravention was deliberate or reckless; and whether the impropriety or contravention was contrary to or inconsistent with a right of a person recognised by the International Covenant on Civil and Political Rights; and (g) whether any other proceeding (whether or not in a court) has been or is likely to be taken in relation to the impropriety or contravention; and the difficulty (if any) of obtaining the evidence without impropriety or contravention of an Australian law." The term "Australian law" is defined in the Dictionary to the Evidence Act as a "law of the Commonwealth, a State or a Territory". The word "law" is defined in cl 9 of Pt 2 of the Dictionary: "(1) A reference in this Act to a law of the Commonwealth, a State, a Territory or a foreign country is a reference to a law (whether written or unwritten) of or in force in that place. (2) A reference in this Act to an Australian law is a reference to an Australian law (whether written or unwritten) of or in force in Australia." There is no definition of "impropriety" or "contravention" in the Act. Section 138 was one of the provisions of what became the Evidence Act 1995 (Cth) and the New South Wales Evidence Act recommended by the Law Reform Commission in its Report No 38, published in 1987. The proposed cl 119, as it was numbered in the draft Act, was explained by the Commission22: 22 Australia, Law Reform Commission, Evidence, Report No 38, (1987) at 243. "This clause provides a discretionary exclusion for evidence obtained improperly, unlawfully or in consequence of an impropriety or breach of the law. It applies in both civil and criminal trials. It reflects, with some modifications, the present exclusionary discretion known as the rule in Bunning v Cross. The main difference is the placing of the onus of proof on the party seeking to have the illegally or improperly obtained evidence admitted." The party seeking to exclude the evidence has the burden of showing that the conditions for its exclusion are satisfied, namely that it was obtained improperly or in contravention of an Australian law. The burden then falls upon the party seeking the admission of the evidence to persuade the court that it should be admitted. There is thus a two stage process23. The party seeking admission of the evidence has the burden of proof of facts relevant to matters weighing in favour of admission. It also has the burden of persuading the court that the desirability of admitting the evidence outweighs the undesirability of admitting evidence obtained in the way in which it was obtained. The meanings to be accorded to the terms "improperly", "impropriety" and "contravention" in s 138 were not illuminated by the Law Reform Commission report. The relevant ordinary meanings of "improper" include "not in accordance with truth, fact, reason or rule; abnormal, irregular; incorrect, inaccurate, erroneous, wrong"24. "Contravention" refers to "[t]he action of contravening or going counter to; violation, infringement, transgression"25. Without essaying an exhaustive definition, the core meaning of "contravention" involves disobedience of a command expressed in a rule of law which may be statutory or non-statutory. It involves doing that which is forbidden by law or failing to do that which is required by law to be done. Mere failure to satisfy a condition necessary for the exercise of a statutory power is not a contravention. Nor would such a failure readily be characterised as "impropriety" although that word does cover a wider range of conduct than the word "contravention". 23 Employment Advocate v Williamson (2001) 111 FCR 20 at 43-44 [78] per 24 The Oxford English Dictionary, 2nd ed (1989), vol VII at 747. 25 The Oxford English Dictionary, 2nd ed (1989), vol III at 847. The pleadings The proceedings brought by the Comptroller-General were conducted on pleadings. The final form of the statement of claim was one re-amended pursuant to leave granted on 16 May 2003. It alleged, inter alia, that 92,632.3 litres of alcohol liquid ("LALs") of Scotch whisky imported into Australia by Lawpark and stored at the Breven warehouse was removed without authority under the Customs Act and delivered for home consumption. Mr Parker was said to have been an owner of the whisky within the meaning of s 4 of the Customs Act. He, or someone else on behalf of Breven and acting with his knowledge, was said to have removed the whisky, falsely recorded repack dockets and created false continuing permissions. Customs duty of $3,113,371.60 was said to have been payable by Mr Parker in respect of the whisky. The Comptroller-General alleged that Mr Parker had committed some 13 breaches of s 234(1)(a) of the Customs Act by the evasion of duty in respect of various quantities of the Scotch whisky in issue. One breach of s 33(1) was alleged in respect of the removal of the whisky without authority. The breaches were alleged to have occurred over different periods between 1 August 1987 and 31 May 1990. The statement of claim then pleaded: "AND THE PLAINTIFF pursuant to and to the extent provided by s 255 of the Customs Act avers that all matters and facts specified herein are true and correct." In his defence to the re-amended statement of claim Mr Parker denied the central allegations against him including the unauthorised removal of the Scotch whisky from the warehouse and the evasion of duty. He also pleaded an estoppel based upon an alleged payment accepted in full satisfaction of the duty claimed and associated representations by the Comptroller-General. The defence went on to plead the inadmissibility of documentary evidence to be relied upon by the Comptroller-General. It alleged that documents, including bond input records, bond output records and the Bond Register relating to Breven's premises were taken by the Comptroller-General on or about 6 March 1990. It alleged that the notice to produce under s 214 was not valid, that the Sched V warrant was not issued or executed according to law, that the documents taken were unlawfully obtained and that they should not be received in evidence. The Comptroller-General filed a reply dated 8 December 2003 admitting that "the section 214 notice it served on … Lawpark Pty Ltd was invalid" but asserting that "the notice was not intentionally invalid". He also admitted that because of the invalidity of the notice "the warrants that were executed on the basis of a failure to comply with that notice were not properly executed according to law". The basis of the invalidity alleged by Mr Parker in his defence was not spelt out in that pleading. Nor was the basis of the admission in the Comptroller- General's reply. The admissibility of the documents had been agitated in an extended voir dire hearing in cognate proceedings in the Supreme Court of New South Wales in March 1996 involving Kingswood Distillery26. Sully J had admitted the documents under s 138 albeit it had been admitted that the notice to produce was impermissibly vague. It seems that the pleading of matters going to admissibility in the defence and reply was designed to narrow the debate on that question by putting on record the Comptroller-General's concession as to the invalidity of the notice. The Comptroller-General submitted in this Court that the concession which he made at first instance was that the s 214 notice "gave insufficient description of the goods in respect of which documents were to be produced". The correctness of O'Neill was not conceded and it was disputed that the execution of the warrant involved a "second 'contravention of an Australian law'" insofar as the documents seized went beyond those relating to goods specified in the notice to produce. As appears later in these reasons, the implied proposition that "a second contravention" could be identified on the basis that the seizure was beyond power even if the notice had been sufficient, is not to be accepted. The Comptroller-General pleaded reliance upon s 138 of the Evidence Act in support of the unlawfulness of their seizure. He referred to the decision given by Sully J in the proceedings against Kingswood Distillery on 15 March 199627. In that case the court had admitted the documents and information into evidence. the documents notwithstanding the admissibility of The information – 16 January 1990 The information which grounded the notice to produce and the Sched V warrant was sworn on 16 January 1990 by an officer of Customs. He said that on 4 May 1989 a Customs officer in Brisbane had purchased two bottles labelled as French Brandy, the contents of one of which was found to have been adulterated. The labels also stated that the brandy had been imported by Lawpark. According to the information the false description of the content of the bottles was "contrary 26 Comptroller-General of Customs v Kingswood Distillery Pty Ltd unreported, Supreme Court of New South Wales, 15 March 1996. 27 Comptroller-General of Customs v Kingswood Distillery Pty Ltd unreported, Supreme Court of New South Wales, 15 March 1996. to subsection 9(1)(b) of the Spirits Act 1906". Therefore, it was alleged "Lawpark Pty Ltd have illegally dealt with goods, being the contents of the bottle". As is apparent, the false labelling of the brandy was not connected in any way with the offences ultimately alleged against Mr Parker. The notice to produce – 1 March 1990 On the strength of the information a notice was signed on 1 March 1990 by the Collector of Customs for New South Wales. It was in the following terms: "TO: LAWPARK PTY LTD 4 BLACKSTONE STREET WETHERILL PARK NSW Whereas information in writing has been given on oath that goods, to wit one bottle of spirits labelled as 'Cheval Napoleon Old French Brandy', have by you been illegally dealt with on or before the thirty-first day of October 1988. Now, therefore, I, the Collector of Customs for the State of New South Wales, by virtue of the powers conferred upon me by the Customs Act 1901, do hereby require you to produce and hand over to JAMES MICHAEL MUTTON an officer of Customs duly authorized by me on my behalf to receive the same, all books and documents relating to such goods and relating to all other goods imported by you at any time within the period of five years immediately preceding this request, and I further require you to produce for the inspection of the said JAMES MICHAEL MUTTON an officer of Customs duly authorized by me for that purpose or such other Officer as I may authorize for the purpose, and allow such Officer to make copies of or extracts from all books or documents of any kind whatsoever wherein any entry or memorandum appears in any way relating to any such goods." The Sched V warrant – 1 March 1990 Contemporaneously with the issue of the notice to produce, the Collector signed a Sched V warrant in the following terms: Officer of Customs. WHEREAS: information in writing has been given on oath to me that goods had been illegally dealt with. You are hereby authorized in the event of LAWPARK PTY LTD failing to comply immediately with any requirement made in pursuance of section two hundred and fourteen of the Customs Act 1901, to enter into, at any time of the day or night, and search, any house premises or place in which any books or documents relating to the goods are or are supposed to be; and to break open any such house premises or place and search any person therein or thereon and any chests trunks or packages therein or thereon; and to take possession of, remove and impound any of those books and documents which are found: And for so doing this shall be your sufficient warrant. This warrant has force throughout the state of New South Wales. This warrant shall remain in force for a period of one month from the date thereof unless revoked before the expiration of that period. Dated this 1st day of March 1990." The O'Neill judgment Before turning to the judgment of the primary judge dealing with the admissibility of the documents seized under the Sched V warrant, it is necessary to refer briefly to the O'Neill judgment given by Dunford DCJ in the District Court of New South Wales on 18 August 1988. In that case the admissibility of documents seized under s 214 of the Customs Act was in issue. Dunford DCJ held that upon its proper construction s 214(3), authorising search and seizure of documents upon failure to comply with a s 214(1) requirement, only extended to documents relating to the goods on which that requirement was based. That is to say only the goods which were the subject of the information could be seized or detained. The authority under s 214(3) did not extend to documents relating to the wider class of goods imported within five years prior to the date of requirement to produce. A similar view of the operation of s 214(3) was taken by two judges of the Federal Court in 1991 and 199328. There was evidence before the primary judge of advice sought and received by the Collector of Customs which had touched upon the O'Neill decision. On 31 July 1989 an officer of the Australian Government Solicitor ("AGS") provided a written advice to the Collector that the interpretation of s 214 by Dunford DCJ was correct. On 11 August 1989 another officer of AGS 28 Ace Custom Services Pty Ltd v Collector of Customs (NSW) (1991) 31 FCR 576 at 584-585 per Davies J; Challenge Plastics Pty Ltd v Collector of Customs (1993) 42 FCR 397 at 400-401 per Heerey J. advised the Collector, in writing, that the interpretation was incorrect and that s 214(3) authorised seizure of documents including five year documents. On 7 September 1989 a Regional Manager (NSW) of Customs wrote to AGS seeking advice about the use of s 214 powers in relation, inter alia, to Kingswood Distillery and Breven. AGS sought advice from Mr Rowling of counsel. On 27 October 1989 Mr Rowling produced a written advice raising doubts about whether s 214 would authorise the requirement for production of five year documents where the illegal dealing with goods relied upon was an illegal dealing under the Spirits Act. He did not in terms address the construction of s 214(3). Although he referred to O'Neill, he did so on another point. Challenge to admissibility before the trial judge Counsel for Mr Parker identified in writing before the primary judge seven heads of illegality in relation to the challenged evidence. In the fifth head he alleged that documents had been seized which did not relate to the bottle of brandy identified in each of the notices to produce. Counsel for the Comptroller-General made clear at the hearing that the Comptroller-General conceded that the notice to produce "did not specify particular goods with sufficient particularity to enable the recipient reasonably to identify documents which would relate thereto." He also made clear that he did not concede the correctness of O'Neill. In written submissions dated 18 April 2005 on the voir dire, counsel for Mr Parker relied upon the judgment of Heerey J in Challenge Plastics Pty Ltd v Collector of Customs29. He referred also to the judgment of Davies J in Ace Custom Services Pty Ltd v Collector of Customs (NSW)30 and to O'Neill. This was in support of his contention that the only seizure authorised was of documents relating to the specified bottle of French brandy. He also submitted that Customs had failed to properly educate its officers about s 214. Although they had copies of O'Neill they did not understand its principle. No evidence had been offered to explain why the officers were not made aware of the principle in the case. 29 (1993) 42 FCR 397. 30 (1991) 31 FCR 576. The decision of the primary judge on admissibility of the documents On 8 May 2006 the primary judge published her judgment convicting Mr Parker of the offences the subject of this appeal31. On the same day she published her reasons for ruling on the admissibility of the documentary material which had been seized by the Customs officers. The challenge had been heard over five days of a voir dire hearing. Her Honour had ruled at the time that the Her Honour observed that the Comptroller-General had conceded "that there was an irregularity in the manner in which the evidence under consideration was obtained" and that to make sense of the concession, the "irregularity" had to be taken to amount to at least an impropriety for the purposes of s 13833. The concession was "not as extensive as the irregularities contended for on behalf of the defendant"34. The impropriety conceded was "the lack of proper identification of 'the goods' said to have been illegally dealt with"35. Her Honour adopted the construction placed on s 214(3) by Dunford DCJ in O'Neill and held that the documents seized "went well beyond those relating to any single bottle of brandy mentioned in the Notice to Produce"36. Their seizure was "at the very least an impropriety"37. She added that it could properly be called "a contravention of an Australian law"38 although she did not say of what law. All of this, according to her Honour, was "within the concession made on behalf of the plaintiff"39. This was not correct. The concession clearly did not extend to the narrow construction of s 214(3) reflected in the O'Neill decision. 31 Comptroller-General of Customs v Parker (2006) 200 FLR 44. 32 Comptroller-General of Customs v Parker [2006] NSWSC 387. 33 Comptroller-General of Customs v Parker [2006] NSWSC 387 at [3], [22]. 34 Comptroller-General of Customs v Parker [2006] NSWSC 387 at [3]. 35 Comptroller-General of Customs v Parker [2006] NSWSC 387 at [22]. 36 Comptroller-General of Customs v Parker [2006] NSWSC 387 at [26]. 37 Comptroller-General of Customs v Parker [2006] NSWSC 387 at [26]. 38 Comptroller-General of Customs v Parker [2006] NSWSC 387 at [26]. 39 Comptroller-General of Customs v Parker [2006] NSWSC 387 at [27]. Her Honour acknowledged that at the relevant time there was a degree of controversy in Customs about what was authorised by s 214. However, that controversy centred on the words "illegally dealt with" in s 214(1) and whether they covered illegal dealing under statutes (such as the Spirits Act) other than the Customs Act. Her Honour formed the view that such illegality was covered by s 214 but did not regard it as necessary to resolve the constructional question. She referred to Mr Rowling's advice which focussed on the illegal dealing question. She said that it should have been disclosed to the then Collector before he issued the notice to produce and the warrant. Non-disclosure, however, was not brought about by any dishonourable or dishonest motives on the part of the relevant officers. Her Honour referred specifically to the allegation that documents unconnected with French brandy had been seized. This, she said, was covered by her earlier acceptance of O'Neill's case. The fact that documents "extraneous to those authorised to be taken by the warrant were in fact taken" came about because of a "lack of understanding of the complexities, and, indeed, anomalies, of s 214, and not by reason of any ill will, collateral purpose or mala fides on the part of any Customs officer"40. Turning to s 138 of the Evidence Act, her Honour said that she was satisfied that the impropriety in the collection of the evidence was not such as should result in the exclusion of the evidence. She said41: "The offences alleged against the defendant are serious, and the evidence is important. I am not in a position to judge at this stage its probative value, except to repeat that, as I understand it, the evidence so obtained amounts virtually to the whole of the prosecution case." The decision of the primary judge as to liability Two defences raised at trial were that the prosecution was statute barred and that the Comptroller-General was estopped from pursuing the claim. After rejecting those defences in her substantive judgment her Honour turned to other issues. She said that it was common ground that the applicable standard of proof was the criminal standard and that it was necessary for the Comptroller-General to prove each of the offences beyond reasonable doubt42. Without reference to the averment, she undertook a consideration of the evidence and, in particular, an 40 Comptroller-General of Customs v Parker [2006] NSWSC 387 at [39]. 41 Comptroller-General of Customs v Parker [2006] NSWSC 387 at [42]. 42 In accordance with Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 216 CLR 161. expert report by a chartered accountant, Ms Tamara Lindsay, which was based upon an examination and analysis of the documents which had been seized. At pars 120 to 123 of her reasons for judgment, her Honour identified "two short routes" to the conclusion that the Comptroller-General had established the facts pleaded in respect of each offence. The first was to be found in the averment. Referring to s 255(3) her Honour said that the prosecution evidence would not gain any strength from an averment where rebuttal evidence was called. She then said43: "But in this case no evidence was given in rebuttal of any of the essential features of the Comptroller's case. In saying this I have not overlooked the extensive cross-examination of a number of witnesses, most particularly Ms Lindsay [the chartered accountant]. But scrutiny of that cross-examination reveals that no evidence was elicited that had the effect of rebutting any of her conclusions. I will deal shortly with the nature of the cross-examination of Ms Lindsay. I have concluded that the averment alone is sufficient to found a conclusion that all factual matters pleaded in the Re-amended Statement of Claim have been proved. (There remains, of course, a further step: it is necessary to consider whether those facts are sufficient to (and if so, do in fact) establish to the requisite standard, the commission of the offences charged.)" Her Honour considered Ms Lindsay's evidence and accepted her conclusions. They supported convictions for all the alleged offences against s 234(1)(a). Her Honour was also satisfied, beyond reasonable doubt, that an incorrect record of movement purportedly done pursuant to a continuing permission was done deliberately and with dishonest intent and was done by The case presented to the Court of Appeal There were numerous grounds of appeal against her Honour's decision to admit the challenged documents in evidence. Most are not relevant for present purposes save for the contention that she should have found that the Customs officers were not properly trained in their powers under s 214 (grounds 22-23). That failure was advanced as a matter going to the balancing exercise under s 138. Her Honour, it was said, should have found that Customs knew of and had a copy of the O'Neill decision and was aware of its significance. She should have found that Customs knew and believed that if its officers "did not comply with 43 Comptroller-General of Customs v Parker (2006) 200 FLR 44 at 65-66 [123]. the matters raised in the decision in In the Matter of O'Neill" then submissions in future litigation that a failure to follow correct procedure under s 214 was an honest mistake or done in ignorance of the legislative provisions, would not persuade a court to refrain from excluding evidence obtained illegally. Her Honour, it was said, should have found that Customs failed to properly educate its officers in respect of s 214 notwithstanding that Customs expressly believed that a failure to follow correct procedure would probably result in the exclusion of illegally obtained evidence. The alleged failure of Customs to educate its officers in respect of s 214 was relevant in the appeal only on the assumption that the construction of s 214(3) adopted in O'Neill was correct. The written submissions filed on behalf of Mr Parker in the Court of Appeal referred to the concession made by the Comptroller-General as to the inadequacy of the notices to produce. O'Neill was raised in the context of the failure to train and educate officers about that decision. Her Honour, it was said, had failed to give consideration to the seriousness of the illegal conduct for the purposes of s 138(3)(d), to the failure of Customs to ensure proper training and education of its officers relevant to s 138(3)(e) and to other matters which spoke against the exercise of the discretion to admit the documents. The Comptroller-General conceded that her Honour had made no finding on the training and education question. He agreed, however, that her findings concerning lack of awareness of the O'Neill decision adequately exposed why it was not highlighted in training. As appears from the preceding the correctness of the O'Neill decision was not in issue. Counsel for Mr Parker in the Court of Appeal made it clear that he regarded the conceded inadequacy of the notice as a basis for vitiating the entire production requirement. That is to say, although he did not say it in terms, he did not need the O'Neill point to invalidate the seizure. He did endeavour to invoke the O'Neill construction as a basis for treating the impropriety associated with the seizure of the documents as somehow aggravated. But that was related to the training and education point. Counsel for the Comptroller-General made clear to the Court of Appeal that the Comptroller-General had not conceded the correctness of O'Neill before Simpson J and had maintained it was wrong. He said in oral argument in the Court of Appeal, however, that the Comptroller- General was content to support her Honour's judgment on the grounds on which it was based. The judgment of the Court of Appeal Basten JA first considered the proper construction of s 214 of the Customs Act. His Honour disagreed with the conclusion reached by Dunford DCJ in O'Neill. He said44: "The purpose of subs (3) is to ensure that, absent voluntary compliance, the warrant will permit a search by officers to obtain books or documents falling within the requirement which have not been supplied. To construe the category of books and documents in subs (3) as more limited than the books and documents referred to in subs (1) would be to defeat the purpose of subs (3) in circumstances where only a handful of the documents the subject of the requirement had been provided, but subs (3) was found to be restricted to that very handful." He held that Simpson J had been mistaken in accepting the construction adopted in O'Neill. Basten JA then considered the operation of s 138 and turned to the circumstances in which it was contended that the section was engaged. He rejected contentions advanced on behalf of Mr Parker that: The choice of s 214 as the preferred method of obtaining documents rather than proceeding under s 10 of the Crimes Act 1914 (Cth) and obtaining a search warrant for particular documents or things was improper. The s 214 notice was issued for an improper purpose, namely to trigger the entitlement to execute a Sched V warrant, rather than to obtain the production of the documents. A third basis for the alleged inadmissibility of the documents was that the notice was "hopelessly imprecise as to the goods in question"45. His Honour observed that this element of invalidity was accepted by the Comptroller-General for the purposes of the proceedings and was sufficient to attract the application of s 138 of the Evidence Act. His Honour rejected the argument that even assuming the notice had been valid Mr Parker had not failed to comply with its requirement. Also rejected was the complaint that the primary judge had not addressed the alleged failure to train and educate Customs officers about the scope of a search and seizure under 44 (2007) 243 ALR 574 at 587 [49]. 45 (2007) 243 ALR 574 at 597 [90]. s 214. This was a contention made on the assumption that O'Neill was correctly decided. As to that, Basten JA said46: "As noted above, a proper consideration of s 214 does not support the view expressed in O'Neill's case that the search permitted in execution of the warrant did not entitle customs officers to locate and seize documents in relation to goods imported or exported during the previous 5 years. However, the comptroller did not dispute the correctness of O'Neill's case but rather relied upon the fact that Mr Swinton, who was the solicitor primarily responsible for legal advice in relation to the operation had failed to grasp the significance of the reference to O'Neill's case in counsel's advice. Accordingly, the complaint that the trial judge failed to address the issue must be addressed on that basis." (emphasis added) His Honour found the complaint that this challenge was not addressed in the trial judge's reasons was factually correct. However, given the way in which it was presented in submissions, this was understandable. In the event, his Honour rejected the complaint on its merits on the basis that the Customs officers had "plausible legal advice" supportive of their position47. His Honour then considered the factors identified in s 138(3). On the facts of the case he held that the evidence was correctly admitted. Grounds of appeal The single ground of appeal in this case is that: "The Court of Appeal erred in denying procedural fairness to the Appellant by overturning a finding made by the trial Judge in the Appellant's favour, based on the correctness of the judgment in the matter of the appeal of Lawrence Charles O'Neill (unreported, NSWDC 18 August 1988), without the Respondent seeking such an outcome or the Court of Appeal giving notice it was considering it, and therefore without the Appellant having a proper opportunity to make submissions in support of the finding." Notice of contention A notice of contention filed on behalf of the Comptroller-General asserted: 46 (2007) 243 ALR 574 at 601 [109]. 47 (2007) 243 ALR 574 at 603 [118]. "In the event that this Court finds that the Court of Appeal erred in law by failing to afford the appellant procedural fairness when it found that the judge deciding In the matter of O'Neill (unrep, NSWDC, 18 August 1988) was 'mistaken' in his interpretation of s 214 of the Customs Act 1901, then the respondent gives notice that it will contend that the Court of Appeal's construction of s 214 as set out in [49]-[53] and [109] of its reasons for judgment is correct." The construction of s 214 Although the proper construction of s 214 is no longer a matter of general importance, as the section has been repealed, it was raised in the notice of contention and is relevant to the disposition of this case. Section 214(1) imposed obligations on the owner of goods referred to in an information given under the section. It imposed a like obligation in respect of goods which have been seized or detained. The relevant element of the obligation, ungrammatically framed, was to produce and hand over to the Collector "all books and documents relating to the goods … and of all other goods imported or exported by him at any time within the period of 5 years immediately preceding such request". Section 214(3) conferred a power of search and seizure in respect of books and documents upon an officer of Customs where two necessary conditions had been met. Those conditions were: A person had failed to comply with a requirement by the Collector under the section; ie under s 214(1). An officer of Customs or an officer of police had with him a customs warrant in the form of Sched V. Where both of these conditions were fulfilled the officer was empowered to break open and enter "any house, premises or place in which any books or documents relating to the goods are or are supposed to be" (emphasis added) and remove "any of those books and documents which are found". The question is whether "the goods" were those referred to in the information or whether they extended to goods imported within five years immediately preceding the requirement made under s 214(1). In considering that question, it is necessary to have regard to the form of the warrant set out in Sched V to the Act. Schedule V was part of the Act and not a species of delegated legislation. It was, however, ancillary to the substantive provisions of s 214. Schedule V provided for a warrant issued under s 214(2) to state that it authorises its holder to take possession of, remove and impound books and documents relating to the goods the subject of the information. There was no ambiguity in its wording which would extend its coverage to books and documents relating to other goods imported within five years immediately preceding the making of a requirement under s 214(1). There was therefore a limitation on the range of documents covered by a Sched V warrant which did not apply to the range of documents the subject of the obligation imposed by How then was s 214(3) to be read? It was that sub-section, not the warrant, which was the source of the power to break open and enter into premises and to take possession of and remove books and documents found therein. The officer exercising that power was required, as a condition of the power, to have the warrant with him or her. There was no express obligation to show the warrant to any person. Although there was reference in the proceedings to "executing" the warrant, it is not clear what that means in this context. In my opinion, s 214(3) could be read widely as extending to books and documents relating to the full range of goods referred to in s 214(1). It could also be read narrowly as confined to books and documents relating to the goods referred to in the information. Each reading gives rise to an anomaly. On a wide reading there was an inconsistency between the scope of s 214(1) and the terms of the Sched V warrant, the existence of which was a condition of the seizure power. On a narrow reading there would have been an apparently inexplicable inconsistency between s 214(1) and s 214(3). The legislative history is of limited assistance. The Customs Act was partly modelled upon the Customs Act 1890 (Vic) as amended by the Customs Act 1896 (Vic). The latter Act incorporated a comprehensive power under s 22 to require production and to seize documents relating to suspect goods and goods imported up to six years before the production request. No equivalent seizure power was included in the 1901 Act, presumably on the basis that writs of assistance and customs warrants, otherwise provided for, could be used where seizure was necessary. The question is whether s 214(3) brought into the Customs Act, in 1923, a power of seizure narrower than the power of production conferred by s 214(1). In this respect the Second Reading Speech is of no assistance. The constructional choice invites consideration of the following matters: The legislative antecedents of the Customs Act, reflected in the Customs Act 1890 (Vic) as amended by the Customs Act 1896 (Vic), made the seizure power and the production obligation congruent. There was no apparent policy reason for making the seizure power under s 214(3) significantly narrower than the production obligation under The terms of s 214(3) were consistent with a seizure power that was congruent with the production obligation. Schedule V, which would support a narrower reading, did not of itself confer any power or obligation. It was an ancillary provision giving content to the condition upon which the seizure power under s 214(3) could be exercised by specifying the form of the necessary warrant. Section 214(3) authorised the doing of that which would otherwise be unlawful or tortious. That consideration favours a narrower reading to the extent that such a reading is open. Notwithstanding the significance of the last-mentioned consideration, which was referred to by Heerey J in Challenge Plastics48, the better approach is that which maintains consistency between the substantive provisions, ss 214(1) and 214(3). Their construction cannot be governed by the terms of what is essentially a form of warrant in Sched V. Section 214(3) provided the coercive support immediately available in the event of non-compliance with a requirement made under s 214(1). To give effect to it requires the wider reading of s 214(3). On that basis the construction adopted by the District Court of New South Wales in O'Neill was incorrect and that adopted by the Court of Appeal in the present case was correct. Absent such a reading, there was no mechanism within the section to give effect to the objective, reflected in s 214(1), of obtaining access to documents including the five year documents. Contentions and conclusions The Comptroller-General conceded the invalidity of the notice to produce on the basis that it did no more than identify the relevant goods as a bottle of spirits labelled "Cheval Napoleon Old French Brandy", a description which, it was accepted, was so vague as to make it impossible to identify books and documents relating to those goods. Basten JA accepted the concession as a basis for invalidity. His Honour said49: "Such a notice was incapable of being complied with; Mr Parker could not reasonably have been expected to locate the relevant documents, because the notice was hopelessly imprecise as to the goods in question. The notice was therefore invalid. That element of invalidity was accepted by the comptroller for the purposes of the proceedings and was sufficient in 48 (1993) 42 FCR 397 at 401. 49 (2007) 243 ALR 574 at 597 [90]. itself to invoke the operation of s 138 of the Evidence Act, as recognised by her Honour at [22]." The conceded deficiency meant that there was never any relevant obligation on Lawpark to produce documents of any kind under s 214(1). There could not therefore be a failure to comply with the requirement by Customs officers under the section. A necessary condition for the exercise of the power under s 214(3) was therefore not met. It followed that there was no power conferred on the Customs officers by s 214(3) to take possession of and remove any books or documents from Lawpark's premises. Simpson J at first instance accepted the concession that the notice did not properly identify the goods. By following O'Neill she also effectively found a second basis for concluding that the seizure of the five year documents was beyond power. It was submitted for Mr Parker that the correctness of the trial judge's adoption of O'Neill was not put in issue before the Court of Appeal. There was no notice of contention. That submission may be accepted. Indeed in the course of argument in the Court of Appeal, counsel for the Comptroller-General, Mr Fagan SC, told the Court that his client was "content to support her Honour's judgment on the grounds upon which it was expressed". And further: "Customs has been content to proceed on the basis that if her Honour was right and accepting that her Honour was right about O'Neill's case then this was another point of illegality but for the reasons that her Honour gave the proper exercise of discretion under s 138 the evidence would nevertheless be received [sic]." To the extent that the Court of Appeal rested its decision upon the view that O'Neill was wrongly decided, it did so without prior warning to Mr Parker. This was a matter going to the proper construction of s 214(3) which had not been in issue before the Court of Appeal. On the other hand, I agree with the point made by Gummow, Hayne and Kiefel JJ50. A court is not necessarily obliged to identify to the parties or their legal representatives, from among prior non- authoritative decisions, those which it may decide not to follow. What is essential is that the parties to proceedings be given an opportunity to be heard on all the issues in the case. Where a proposition of law is not in contest, the court should not decide the case on the basis of a departure from that proposition without notice to the parties. In this case, the Court of Appeal should have given the parties notice of its intention to consider O'Neill and an opportunity to make submissions about it. It was submitted for Mr Parker, in effect, that the inadequacy of the notice to produce, conceded by the Comptroller-General, simply meant that the seizure of the books and documents was improper. It was further submitted that the asserted want of statutory power based on O'Neill to seize books and documents other than those relating to goods specified in the notice would have rendered the seizure a "contravention of an Australian law" for the purposes of s 138. That submission cannot be accepted. On the view taken by Simpson J the seizure of the books and documents was not authorised by s 214(3). The same result followed from the narrower basis upon which the Court of Appeal found a want of power to seize the documents. Whether O'Neill was right or wrong about s 214, there was no relevant impropriety or contravention of Australian law antecedent to the obtaining of the documents. There was an absence of statutory power to make the seizure. The character of the seizure of the five year documents was the same regardless of the circumstance that led to the conclusion that there was no power to do it. The seizure was no doubt tortious. It may well have contravened some other statute. The documents were obtained "improperly" for the purposes of s 138(1) and their seizure was probably in contravention of an Australian law or laws. But even accepting the hypothesis that there were two bases for saying the officers lacked the power to do what they did, there was thereby no additional antecedent or concurrent impropriety or contravention. Whether there was a denial of procedural fairness Basten JA noted in his judgment that the Comptroller-General did not dispute the correctness of O'Neill. He also observed that the Comptroller- General proceeded upon the basis that the solicitor responsible for legal advice in relation to the Customs operation had failed to grasp the significance of a reference to O'Neill's case in counsel's advice. His Honour spent some time in his reasons for judgment on the correctness of O'Neill and the proper construction of s 214(3). There were however critical parts of his reasoning which appeared to rely solely upon the conceded deficiency in the notice and therefore did not turn upon the correctness of O'Neill and the construction of s 214(3). He said51: "In the result, the unlawfulness of the conduct of customs officers turned on the failure adequately to identify the bottle of brandy said to have been illegally dealt with pursuant to the Spirits Act. There was no evidence to indicate that it would not have been relatively easy to comply with that 51 (2007) 243 ALR 574 at 604 [124]. obligation of specificity. However, the fact that it was not done was not due to deliberate cutting of corners or disregard of the legal requirements. On one view, the error arose from a failure to reproduce in the notice requiring production of documents the detailed information supplied on oath for the purposes of s 214(1)." On the other hand, his Honour did refer to the breadth of the power under s 214 in a way which was consistent with his construction of it. He said, inter alia52: "The seriousness of the intrusion on the rights of Lawpark and apparently Breven, through the seizure of their documents, flowed from the extraordinary breadth of the power conferred by s 214. The seriousness of the consequence for the affected businesses of an unlawful exercise of the power warranted careful scrutiny of the conduct of customs: however, it did not turn genuine attempts at compliance into deliberate disregard or reckless indifference." Assuming, without deciding, that the Court of Appeal acted upon the construction of s 214(3) adopted by Basten JA, there is a question whether Mr Parker was lulled into a false sense of security because of the want of any challenge to the O'Neill construction. Could he have approached the case any differently if he had been put on notice of such a challenge? The answer to that question depends upon whether there was an argument that he could have put against admission of the evidence pursuant to s 138, on the basis of the deficiency in the notice to produce, which he did not put because of the assumption that the narrow construction of s 214(3) was not in dispute. Counsel for Mr Parker contended, in the course of argument in this Court, that, had the correctness of O'Neill been agitated in the Court of Appeal, Mr Parker could have argued that even if O'Neill were wrong the Sched V warrant was far too narrow to justify the search that took place. That proposition treated the warrant as a source of the seizure power. On the correct construction of s 214 the existence of the warrant was a necessary condition of that power. It did not define its extent. The hypothetical argument would not have succeeded. No other alternative argument that could have been put is apparent. In the circumstances there was no relevant unfairness. The course taken by the Court of Appeal did not deny the appellant an opportunity to put argument that could have made a difference to the outcome53. He has, of course, been heard in this Court on the question of the correctness of the O'Neill decision and the proper construction of s 214. 52 (2007) 243 ALR 574 at 604 [122]. 53 Stead v State Government Insurance Commission (1986) 161 CLR 141 at 145; [1986] HCA 54. Conclusion For the preceding reasons, the appeal should be dismissed with costs. The respondent, GUMMOW, HAYNE AND KIEFEL Comptroller-General of Customs, formerly had the general administration of the Customs Act 1901 (Cth) ("the Act")54. The term "Collector", which will appear in these reasons, is used to identify any of the principal officers previously described in s 8. This litigation comes before this Court on appeal from the Court of Appeal of the Supreme Court of New South Wales55 (Mason P, Tobias and Basten JJA), which dismissed an appeal from the decision of a judge of the Supreme Court56 (Simpson J). The critical events began some 20 years ago. In that interval there have been various changes to the Act and to other relevant legislation. The nature of the proceedings The Supreme Court exercised federal jurisdiction. The applicable statutory law of evidence, however, was not to be found in the Evidence Act 1995 (Cth). The effect of ss 4 and 8 of that statute was that in the Supreme Court s 79 of the Judiciary Act 1903 (Cth) fully operated and "picked up" New South Wales law, including the Evidence Act 1995 (NSW) ("the Evidence Act"). The proceedings in the Supreme Court were "Customs prosecutions" for the purposes of Pt XIV of the Act and were instituted in the Supreme Court by the respondent as provided by par (a) of s 245(1) of the Act. The nature of proceedings under Pt XIV was considered by this Court in Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd57. In the present case, Basten JA (with whose reasons Mason P and Tobias JA agreed) held that the Act required that the proceedings be commenced and conducted by a process which, for the purposes of the organisation of the business of the Supreme Court, gave rise to an appeal to the Court of Appeal rather than the Court of Criminal Appeal58. In this Court no challenge was made to that conclusion. 54 Section 7. This was amended in 1995 to provide for responsibility to rest with the Chief Executive Officer of Customs. 55 Parker v Comptroller-General of Customs (2007) 243 ALR 574. 56 Comptroller-General of Customs v Parker [2006] NSWSC 387. 57 (2003) 216 CLR 161; [2003] HCA 49. 58 (2007) 243 ALR 574 at 583-584. The investigation by ACS Officers of Customs ("the ACS") had investigated over several years, beginning in 1987, suspected contraventions of the Act and of the Spirits Act 1906 (Cth) ("the Spirits Act")59. Section 4 of the Spirits Act incorporated various provisions of the Act, including those of Pt XII with respect to the powers of the ACS and of Pt XIII providing for penalties. The appellant was a director and shareholder of Lawpark Pty Ltd ("Lawpark") and Breven Pty Ltd ("Breven"). Lawpark imported and distributed alcoholic spirits for human consumption and Breven held a warehouse licence issued under Pt V of the Act and conducted a bond store where imported spirits might be warehoused without incurring a liability to pay duty under the Act. The warehouse licence contained a condition requiring Breven to retain for five years records relating to goods lawfully removed from the warehouse. A third company, Kingswood Distillery Pty Limited ("Kingswood"), made and processed spirits in Australia. By March 1990 officers of the ACS had formed the view that the three companies were participants in a scheme whereby, prior to bottling and sale in Australia, imported spirits had been adulterated or "extended" by the addition of locally produced grain-based alcohol. The ACS then considered the use of legislative authority to obtain by compulsion documents in the possession of relevant parties. In that regard, provision was apparently made both by s 10 of the Crimes Act 1914 (Cth) and by s 214 of the Act. It was decided to rely upon s 21460. The focus of the appeal to the Court of Appeal was upon the admission into evidence at the trial of documents seized by officers of the ACS on 6 March 1990 in the purported execution of a warrant issued under s 214. The appellant unsuccessfully submitted that Simpson J had erred in exercising the power conferred by s 138 of the Evidence Act in favour of admission of the evidence. 59 Repealed by the Excise Laws Amendment (Fuel Tax Reform and Other Measures) Act 2006 (Cth), Sched 2. 60 Section 214 since has been repealed by the Customs, Excise and Bounty Legislation Amendment Act 1995 (Cth), Sched 4, Item 44. The appropriate form of the Act for the purposes of this appeal is in Reprint No 7 of 31 July 1990. The section 214 instruments The provenance of s 214 is traced by the Chief Justice in his reasons. As enacted in 1901, what later became sub-s (1) of s 214 had been the whole of s 214. Section 214(1) created an offence. The commission of the offence was conditioned upon failure to comply with a requirement of the Collector to "produce and hand over" certain books and documents, and to produce certain books and documents for inspection and permit the making of copies or extracts from them. The Collector was authorised to impose the requirement just described: "[w]henever information in writing has been given on oath to the Collector that goods have been ... illegally dealt with, or that it is intended to ... illegally deal with any goods, or whenever any goods have been seized or detained". On 16 January 1990 an officer of the ACS swore what was identified as "Section 214 Information" ("the Information"). This was to the effect that, upon analysis, a bottle of "Cheval Napoleon Old French Brandy" purchased from an identified retailer in Queensland and labelled "Imported by Lawpark Pty Ltd ... Product of France. 37.0% A/V", had been shown to contain spirit which was the product of either or both grain and molasses rather than spirit wholly produced from grapes. Section 9(b) of the Spirits Act made it an offence to describe as brandy any spirit not wholly distilled from wine produced from grapes or grape products. The Information concluded that, within the meaning of s 214(1) of the Act, Lawpark had "illegally dealt with" goods being the contents of the bottle. Acting upon that Information, on 1 March 1990 the Collector for New South Wales issued two instruments. The first, addressed to Lawpark, was headed "Notice to Produce Documents" ("the Notice to Produce") and required Lawpark to produce and hand over: "all books and documents relating to [one bottle of spirits labelled as 'Cheval Napoleon Old French Brandy'] and relating to all other goods imported by you at any time within the period of five years immediately preceding this request". (emphasis added) It is important to note immediately that in the Court of Appeal, Basten JA referred to this limited identification of the one bottle, and went on61: 61 (2007) 243 ALR 574 at 597. "Such a notice was incapable of being complied with; Mr Parker could not reasonably have been expected to locate the relevant documents, because the notice was hopelessly imprecise as to the goods in question. The notice was therefore invalid. That element of invalidity was accepted by the [respondent] for the purposes of the proceedings and was sufficient in itself to invoke the operation of s 138 of the Evidence Act, as recognised by her Honour ... The fact that the request for production of documents was invalid, meant that there could be no valid trigger engaging the power to execute the warrant. To that extent, the search and seizure which followed were also invalid. However, the appellant separately asserted that there had been no failure to comply with the request, even assuming it were valid, so as to engage the power to execute the warrant, thereby constituting a separate complaint of improper or unlawful conduct." This second complaint was concerned with the seizure of what in these reasons will be identified as the "five year documents". The second instrument issued on 1 March 1990 to Lawpark was to be used if there was an inadequate response to the Notice to Produce. It was headed: "SCHEDULE V THE COMMONWEALTH OF AUSTRALIA Customs Warrant" (italics in original) and addressed to a named officer of the ACS ("the Warrant"). The immediate source of the power of the Collector to issue the Warrant was s 214(2). This stated: "For the purposes of this section, the Comptroller or the Collector of Customs for a State or Territory may issue to any officer of Customs or officer of police a Customs Warrant, in accordance with the form in Schedule V, marked with a Customs stamp." Provision to this effect had been introduced by the Customs Act 1923 (Cth) ("the 1923 Act")62. That statute also introduced s 214(3) and Sched V, and amended the averment provision of s 255, to which reference will be made63. Section 214(3) conferred authority for the commission of acts which at common law might be tortious, and actionable in trespass, detinue and conversion64. It provided: "If any person fails to comply with a requirement by the Collector under this section, an officer of Customs or officer of police, having with him a Customs Warrant in the form of Schedule V hereto, may, at any time of the day or night, break open and enter into any house, premises or place in which any books or documents relating to the goods are or are supposed to be, and search: the house, premises or place; any person therein or thereon; and any chests, trunks or packages therein or thereon; and take possession of, remove and impound any of those books and documents which are found." Schedule V stated, so far as material: "WHEREAS information in writing has been given on oath to me that goods have been unlawfully imported, exported, undervalued or entered or illegally dealt with or that it is intended to unlawfully import, export, undervalue or enter or illegally deal with goods, (or Whereas goods have been seized or detained) You are hereby authorized, in the event of ......... failing to comply immediately with any requirement made in pursuance of section two hundred and fourteen of [the Act], to enter into, at any time of the day or 62 Section 31. 63 By ss 31, 41 and 35 respectively. 64 Also, s 215 empowered the Collector to impound or retain any document required to be produced under the Act. night, and search, any house premises or place in which any books or documents relating to the goods are or are supposed to be; and to break open any such house premises or place and search any person therein or thereon and any chests trunks or packages therein or thereon; and to take possession of, remove and impound any of those books and documents which are found: And for so doing this shall be your sufficient warrant." (emphasis added) The Warrant issued in respect of Lawpark followed the form of Sched V. It did not follow the terms of the Notice to Produce, which included the words "and relating to all other goods imported by you at any time within the period of five years". However, in the events that happened, officers of the ACS acted as if the Warrant had expressly so provided. The Notice to Produce was served on the appellant on 6 March 1990 at the premises of Lawpark (and, it would appear, of Breven) at Wetherill Park in New South Wales65. The principal officer of the ACS in attendance formed the view that there had been no proper compliance and the Warrant was then "executed". On its face the Warrant did not authorise the seizure of "five year documents" and was thus in terms much narrower than those of the Notice to Produce. Nevertheless, a large number of documents was taken from the Wetherill Park premises and elsewhere, placed in boxes and sealed. The course of proceedings in the Supreme Court By statement of claim filed in the Common Law Division of the Supreme Court on 30 July 1992 and amended on four occasions, the respondent sought convictions of the appellant (who was one of four defendants) of one offence against s 33(1) of the Act, and 13 offences against s 234(1)(a) of the Act, an order for recovery of penalties and an order for payment of unpaid duty. Section 33(1) made it an offence for a person, except as authorised by the Act, to move, alter or interfere with goods subject to the control of the Customs. Section 234(1)(a) made it an offence to evade payment of any duty which was payable. The appellant was alleged to have committed the offences on various dates between 1 August 1987 and 31 May 1990. The statement of claim as amended included an averment that, to the extent provided by s 255 of the Act, all matters and facts specified in the 65 A second "Notice to Produce Documents" was served at premises occupied by Kingswood, but the appellant made no challenge with respect to what occurred at the Kingswood premises. statement of claim were true and correct. Section 144 of the Excise Act 1901 (Cth) is in similar terms to s 255. In Chief Executive Officer of Customs v El Hajje66, this Court held that the averment provisions of s 144 did not distinguish between the ultimate fact or facts in issue and other facts. However, the respondent accepted that an offence contrary to par (a) of s 234(1) carried a mental element of "blameworthy act or omission"67. The provisions of s 255 do not apply to an averment of the intent of the defendant (s 255(4)). Hence the importance of the seized documents in establishing the case against the appellant. In circumstances which were not explored in the present appeal, a stay of the Supreme Court proceeding was ordered on 10 June 1994. Thereafter, the stay was lifted and the proceedings against the other three defendants were brought to a conclusion. The proceeding against the appellant came on for trial before Simpson J, sitting without a jury. In the reply the respondent had admitted that the Notice to Produce was invalid and that documents including bond input and output records and the Bond Register relating to the premises at Wetherill Park were not lawfully obtained pursuant to s 214 of the Act. However, the invalidity was said not to be "intentional" and the admission was confined at trial to the lack of proper identification of the one bottle in the Notice to Produce. The admission did not extend to the appellant's complaint respecting the "five year documents". The appellant objected to virtually all of the evidence upon which (with the benefit of the averment provision in s 255 of the Act) the respondent proposed to prove the offences against the appellant. The appellant contended that the evidence had been obtained either or both "improperly" and "in contravention of an Australian law" and relied upon s 138 of the Evidence Act. The phrase "an Australian law" is so defined in the Evidence Act as to include both the common law and a law of the Commonwealth. In determining whether, in the terms of s 138(1), the desirability of admitting the evidence in question outweighs the undesirability of doing so, the court is to take into account the various matters in pars (a)-(h) of s 138(3)68. 66 (2005) 224 CLR 159; [2005] HCA 35. 67 cf Denver Chemical Manufacturing Co v Commissioner of Taxation (NSW) (1949) 79 CLR 296 at 313; [1949] HCA 25. 68 Paragraphs (a)-(h) read: the probative value of the evidence, and the importance of the evidence in the proceeding, and (Footnote continues on next page) After a lengthy voir dire hearing Simpson J ruled that the evidence in question would be admitted and then proceeded with the trial. On 8 May 2006, her Honour delivered two sets of reasons. The first contained her reasons for the ruling on evidence69 and the other comprised the reasons for judgment that the 14 offences alleged against the appellant had been proved70. There was then a further hearing on the question of penalty and on 30 November 2006 Simpson J delivered reasons for judgment on that subject71. Her Honour noted that the duty evaded had been in excess of $3 million and described the evasion offences under s 234 of the Act as of a systematic and calculated nature, leading to the conclusion that the penalty in respect of each offence was to be 3.25 times the amount of the duty evaded72. In the concluding paragraphs of her reasons for the ruling on evidence, the nature of the relevant offence, cause of action or defence and the nature of the subject-matter of the proceeding, and the gravity of the impropriety or contravention, and whether the impropriety or contravention was deliberate or reckless, and whether the impropriety or contravention was contrary to or inconsistent with a right of a person recognised by the International Covenant on Civil and Political Rights ['the ICCPR'], and (g) whether any other proceeding (whether or not in a court) has been or is likely to be taken in relation to the impropriety or contravention, and the difficulty (if any) of obtaining the evidence without impropriety or contravention of an Australian law." 69 Comptroller-General of Customs v Parker [2006] NSWSC 387. 70 Comptroller-General of Customs v Parker (2006) 200 FLR 44. 71 Comptroller-General of Customs v Parker [No 3] [2006] NSWSC 1269. 72 [2006] NSWSC 1269 at [37]. "[Section] 138 of the Evidence Act requires, in effect, a balancing of a number of matters. One of these is the nature of the offences and subject matter of the proceedings in which the evidence is sought to be tendered; against that has to be weighed, inter alia, the gravity of the impropriety or contravention, whether it was deliberate or reckless, and the extent (if any) of the intrusion into the rights of individuals. As I have made clear, I am satisfied that the impropriety in the collection of the evidence was not such as should be met with exclusion of the evidence so obtained. The offences alleged against the [appellant] are serious, and the evidence is important. I am not in a position to judge at this stage its probative value, except to repeat that, as I understand it, the evidence so obtained amounts virtually to the whole of the prosecution case." What her Honour said in the last sentence with respect to the probative value of the evidence must be read with her conclusions in her trial judgment. There, Simpson J (i) noted that no evidence had been given in rebuttal "of any of the essential features of the Comptroller's case", (ii) concluded that the s 255 averment alone was sufficient to found a conclusion that "all factual matters" pleaded by the Comptroller were proved, and (iii) turned to consider whether the requisite standard of proof beyond reasonable doubt had been met73. Her Honour was assisted by the report and analysis of the seized documentation which had been prepared by a chartered accountant, Ms Tamara Lindsay. She had been extensively cross-examined by counsel for the appellant, but, in the result, Simpson J relied upon the conclusions stated in the report, saying that the methodology employed in the report had not been undermined in any way. The Court of Appeal The appellant appealed to the Court of Appeal seeking orders setting aside the convictions recorded on 8 May 2006 of the offences against ss 33 and 234 of the Act, and the penalties, fines and orders imposed and made on 30 November 2006. Each of the grounds of appeal pressed at the hearing related to the first decision of Simpson J74. The Court of Appeal dismissed the appeal with costs on 6 December 2007. 73 (2006) 200 FLR 44 at 65-66. 74 [2006] NSWSC 387. Much of the argument in this Court has turned upon the significance of the alleged defect in process with respect to the seizure of "five year documents" and upon the construction of s 214 and Sched V of the Act. In that regard, on 18 August 1988, Dunford DCJ had delivered his judgment in In the matter of the appeal of Lawrence Charles O'Neill75, and in the course of his reasons had said: "Schedule [V] authorises the seizure of documents relating to 'the goods', and the only goods referred to in the warrant are the goods which are the subject of an information on oath or the goods that have been seized or detained. I note that sub-ss (2) and (3) [of s 214] and Schedule [V] were all inserted in the Act at the same time, namely by [the 1923 Act], and there is no direct reference in any of them to what might be called the five year documents, although the provision relating to the five year documents [has] been in sub-s (1) since the original enactment of the statute in 1901. It seems to me that sub-ss (2) and (3) should be construed so as to be compatible and consistent particularly as a search warrant constitutes a grave interference with a citizen's right to privacy. Moreover, in the usual course of events, once a warrant had issued, it is the terms of the warrant which (subject to the relevant statute) defines what might be seized. I am satisfied that on the proper construction of Schedule [V] only the goods the subject of the information on oath or the goods seized or detained are authorised to be taken, and accordingly I hold that if the execution of the warrant was valid, the only documents authorised to be seized were those relating to the goods detained, that is relating to shipment 1 and not those relating to any other importation within the previous five years." In the Court of Appeal, Basten JA considered in detail the questions of construction of the Act and concluded that, whilst Simpson J had accepted the decision in O'Neill, in his view the construction adopted in O'Neill "was mistaken"76. However, Basten JA went on to conclude that the challenges by the appellant to the judgment of Simpson J should be rejected and the appeal dismissed77. 75 Unreported, District Court of New South Wales, 18 August 1988 at 12-13. 76 (2007) 243 ALR 574 at 588. 77 (2007) 243 ALR 574 at 605. The appeal to this Court It is important to note that the grant of special leave to appeal to this Court is limited to the following ground: "The Court of Appeal erred in denying procedural fairness to the [a]ppellant by overturning a finding made by the trial [j]udge in the [a]ppellant's favour, based on the correctness of the judgment [in O'Neill], without the [r]espondent seeking such an outcome or the Court of Appeal giving notice it was considering it, and therefore without the [a]ppellant having a proper opportunity to make submissions in support of the finding." The appellant complains in this Court that without hearing the parties the Court of Appeal rejected the authority of O'Neill and thereby allegedly undermined his submissions respecting the unlawful or improper seizure of the "five year documents". Reserved reasons were delivered and orders pronounced without counsel having had the opportunity to question what was said respecting O'Neill in those reasons. The appellant further submits that this denial of procedural fairness deprived him of the possibility of a successful outcome in the Court of Appeal. The appellant refers in that regard to the well known statement of principle in Stead v State Government Insurance Commission78, since applied in Re Refugee Review Tribunal; Ex parte Aala79. The appellant seeks remitter to the Court of Appeal to rehear those of its grounds of appeal to that Court which assert error by the primary judge in her ruling under s 138 of the Evidence Act. The respondent submits that the Court of Appeal correctly differed from the interpretation given to s 214 of the Act in O'Neill. In the alternative, the respondent submits that the Court of Appeal nevertheless decided the appeal on the footing that O'Neill was correctly decided and that the result is that there was no prejudice to the appellant on that account. That alternative submission should be accepted and for this and other reasons the appeal should be dismissed. 78 (1986) 161 CLR 141 at 147; [1986] HCA 54. 79 (2000) 204 CLR 82 at 88-89 [4], 116-117 [80], 128 [122], 130-131 [131], 153-155 [211]; [2000] HCA 57. Conclusions When considering whether O'Neill had been correctly decided, the Court of Appeal did not refer to the further decision in Challenge Plastics Pty Ltd v Collector of Customs80. There, in 1993, Heerey J had held that s 214(3) of the Act authorised only the seizure of documents relating to the goods the subject of the information given to the Collector under s 214(1), and did not authorise the seizure of documents relating to goods imported or exported within the previous five years. The relevant provisions have since been repealed. At this distance, the Court of Appeal should have been slow to depart from what was decided by the Federal Court, even if it had entertained doubts on the subject. However, without reaching any conclusion, we approach this appeal on the footing, favourable to the appellant, that the Court of Appeal should not have cast any doubt upon O'Neill. Nevertheless, O'Neill does not supply the proper commencement point for the resolution of the appeal to this Court. The seizure of the five year documents was unlawful because it was not authorised. It was not authorised because, as the respondent had formally admitted in the pleadings, a necessary condition precedent to the execution of the Warrant (failure to comply with the Notice to Produce) was not satisfied. And that condition precedent could never have been met because of the deficiency in the Notice to Produce at the initial stage of the procedures under s 214. What then is the significance of the seizure of the five year documents under colour of that Warrant? This is not an appeal where the alleged error is said to appear in the decision of the primary judge, sitting without a jury, and the intermediate appellate court allegedly erred in the exercise of its appellate function in failing to recognise and correct that error. The appellant's complaint in this Court fixes upon the manner of disposition of the intermediate appeal and upon what is said to have been a denial of procedural fairness at that stage. The task entrusted to the Court of Appeal by s 75A of the Supreme Court Act 1970 (NSW) included the making of the orders which ought to have been made by Simpson J, after the Court of Appeal had conducted a "real review" of the reasons of her Honour81. If, upon such a review, the Court of Appeal had 80 (1993) 42 FCR 397 at 400-401. See also the comment by Davies J in Ace Custom Services Pty Ltd v Collector of Customs (NSW) (1991) 31 FCR 576 at 584-585. 81 Fox v Percy (2003) 214 CLR 118 at 126-127 [25]; [2003] HCA 22. been obliged to decide that there had been no appealable error in the conclusion of the primary judge respecting the application of s 138 of the Evidence Act, then there can be no occasion for this Court to make an order returning the matter to the Court of Appeal for a further hearing on that subject. Such an outcome would illustrate the proposition that not every departure from the rules of procedural fairness at a trial or an intermediate appeal will entitle the aggrieved party to an appellate remedy82. Basten JA considered the operation of the factors in s 138(3) in that portion of his reasons headed "Application of discretion to admit evidence"83. His Honour (i) with respect to the phrase "the gravity of the impropriety or contravention" in par (d) of s 138(3), emphasised the major invasion of rights by the seizure of a large volume of documents without consent and without the authority of a valid warrant, (ii) said that the case for rejection of the evidence "would be strong, if not overwhelming" if there also had been "wilful disregard" of the requirements of the Act by the relevant officers of the ACS, but (iii) upheld the conclusion of Simpson J that there had been no such "wilful disregard" and that genuine attempts at compliance with the law were not deliberate disregard of it or reckless indifference to it84. Basten JA also noted that the trial judge had correctly considered the evidence in the five year documents to be both critical to establishing the case against the appellant and compelling. (This may undervalue the importance of the s 255 averment.) His Honour also stressed both that the unlawfulness involved in the seizure did not diminish the probative value of the evidence and, with reference to the phrase "the nature of the relevant offence" in par (c) of s 138(3), that the serious nature of the offences involved "a deliberate flouting of the revenue laws for commercial benefit over a considerable period"85. Hence, in the view of Basten JA, the forensic background to the (unsuccessful) exertions of the appellant at trial to establish not only illegality but wilful disregard or at least indifference to the requirements of s 214. 82 cf Stead v State Government Insurance Commission (1986) 161 CLR 141 at 145. 83 (2007) 243 ALR 574 at 603-605. 84 (2007) 243 ALR 574 at 603-604. 85 (2007) 243 ALR 574 at 604. "The appellant also criticised her Honour's reasons in that they failed explicitly to weigh the mandatory factors set out in s 138(3). On a reading of her Honour's reasons, the criticism appeared to have force. However, once the real issues in the case were identified, it is clear that these issues were addressed. Some of the mandatory considerations (such as breach of the ICCPR and the possibility or absence of disciplinary action) simply did not arise on the case as presented at trial. Even if there were deficiencies in the reasons with respect to the balancing exercise required by s 138(3), once the relevant factual basis was accepted, the balancing exercise could as well be undertaken by this court on a rehearing as by the trial judge. That exercise has now been completed. A challenge to the inadequacy of her Honour's reasons in that respect was beside the point." In this chain of reasoning no part was played by the earlier expression of opinion by Basten JA respecting the correctness of the interpretation of the Act in O'Neill. Under the heading "Failure to train and educate officers", his Honour said87: "As noted above, a proper consideration of s 214 does not support the view expressed in O'Neill's case that the search permitted in execution of the [W]arrant did not entitle [ACS] officers to locate and seize documents in relation to goods imported or exported during the previous 5 years. However, the [respondent] did not dispute the correctness of O'Neill's case but rather relied upon the fact that Mr Swinton, who was the solicitor primarily responsible for legal advice in relation to the operation had failed to grasp the significance of the reference to O'Neill's case in counsel's advice. Accordingly, the complaint that the trial judge failed to address the issue must be addressed on that basis." After detailed consideration of the evidence, Basten JA concluded88: "[I]t is clear that [the ACS] did not ignore the decision in O'Neill but obtained their own advice in relation to it. As Dunford DCJ himself explained in his reasons, there were cogent arguments for both the broader 86 (2007) 243 ALR 574 at 605. 87 (2007) 243 ALR 574 at 601. 88 (2007) 243 ALR 574 at 603. and the narrower view of the power. [The ACS] obtained advice from the [Australian Government Solicitor] favouring the broader view, which advice was neither clearly mistaken, nor based on any misunderstanding of the statutory provision in question, nor of the principles of statutory construction. In any case where the scope of a statutory power is doubtful, [a body] which adopts a broader rather than a narrower view may later be found to have exceeded its authority. However, at least in the present circumstances, there was no deliberate or reckless disregard of an established constraint on power, nor can [the ACS] fairly be criticised for not adhering to the narrower view and directing its officers accordingly. It had plausible legal advice supportive of its position. It did not act improperly, for the purposes of s 138, in failing to instruct its officers to operate otherwise." The significance of that statement for the appeal to this Court is as follows. The respondent is correct in the submission that the Court of Appeal decided the appeal before it on the footing, accepted by the respondent, that O'Neill was correct. The respondent had admitted, and there was therefore no issue at trial, that the documents that had been seized were not lawfully obtained pursuant to s 214 of the Act. The central issue had been whether there had been culpable failure by the ACS to adapt its procedures to give effect to O'Neill. On that issue the appellant failed in the Court of Appeal. Once this is appreciated, the respondent has a good answer to the limited ground on which special leave to appeal was granted by this Court. However, before parting with the appeal several further points should be made or repeated. The first concerns the emphasis sought by the appellant to be given in this Court to the further or additional "illegality" respecting the seizure of the five year documents, contrary to the reasoning in O'Neill. The gravity of the conduct of the officers of the ACS was in the commission of the tortious acts without the answer provided by a valid warrant. But this was not in deliberate or reckless disregard of the requirements of the Act. Further, the "illegality" was "complete" without any separate and distinct complaint respecting the five year documents and the significance of O'Neill. The second matter concerns the scope of the principles respecting procedural fairness in curial proceedings. The content of the requirement of procedural fairness at appellate level, as elsewhere, cannot be surveyed in metes and bounds. But this litigation illustrates a point of general importance, habitually assumed without elaboration. It is that consideration by a court of the weight to be given to decisions that are not authoritative (because made by courts lower in the hierarchy) does not necessarily attract an obligation to invite submissions by the legal representatives of the parties directed specifically to those decisions. To extend that invitation on occasion may be prudent, but it is not always mandated by the requirements of procedural fairness and, as the decision of this Court in Australian Securities Commission v Marlborough Gold Mines Ltd89 illustrates, it may be necessary to consider more than the dictates of procedural fairness. But what is required is that the parties are given a sufficient opportunity to be heard on the issues in the case and those issues will not often be defined in a way that requires specific identification of particular, but non-binding, previous decisions. In this case there was no issue about whether the Warrant permitted search for, or seizure of, the five year documents. It was admitted that it did not. The issue that was litigated about O'Neill was not whether it was correctly decided, it was what the ACS had done in response to O'Neill. The decision by the Court of Appeal to examine the correctness of O'Neill without inviting the parties to make submissions about the point was not a denial of procedural fairness. Order The appeal should be dismissed with costs. 89 (1993) 177 CLR 485; [1993] HCA 15. 140 HEYDON J. The background is set out above90. Simpson J's voir dire judgment referred to the notice to produce dated 1 March 1990 as "the Notice to Produce" and to the warrant dated 1 March 1990 as "the Customs Warrant". The same abbreviations will be employed below. Simpson J's approach to admissibility The information referred to in the Notice to Produce alleged that Lawpark Pty Ltd had illegally dealt with goods, namely the brandy in a particular bottle. The Notice to Produce required Lawpark Pty Ltd to produce all books and documents relating to (a) that bottle of brandy and (b) all other goods imported within the previous five years. The Customs Warrant purportedly authorised search for and seizure of all books and documents within categories (a) and (b). Many documents within category (b) were seized and tendered. Simpson J held that those documents were admissible under s 138 of the Evidence Act. But she did hold that they had been obtained "improperly" in two respects. The first impropriety. Simpson J considered that the Notice to Produce failed to satisfy the requirement of s 214(1)91 of the Customs Act that the notice to produce "all books and documents relating to" the bottle of brandy referred to in the information must identify it with sufficient clarity to enable the recipient to comply. She held that that was an impropriety within the meaning of s 13892. This holding has, correctly, not been challenged93. The second impropriety. Further, the seizure of documents in category (b) was, in Simpson J's opinion, at least an impropriety94. She took that view because that seizure was not permitted by the Customs Warrant: the Customs Warrant was a warrant in the same form as Sched V to the Customs Act, and she considered the range of documents capable of being obtained under the s 214(3) power and the Sched V warrant referred to in it to be narrower than the range of documents which a notice to produce under s 214(1) created an obligation to produce. 90 [1]-[72] and [94]-[120]. 91 Section 214 as it stood at the relevant time is set out at [13] above; see also [100]. 92 Section 138 is set out at [25] above; see also [112]. 93 It was also arguably a contravention of an Australian law rendering the Notice to Produce invalid, but it is desirable not to determine this point since the parties did not advance submissions on it and it is not necessary to decide it. However, the respondent admitted on the pleadings that the Notice to Produce was not "valid". 94 She also said that it was "a contravention of an Australian law." That possibility may be noted without adopting any position one way or the other on its correctness. It may be that Simpson J viewed the decisive question in relation to the second impropriety in some places as being the construction of Sched V and in others as being the construction of s 214(3). If she did, it was understandable. Section 214(3) read by itself suggested that it was the source of power to enter, search and seize. But it did make possession of a Sched V warrant mandatory, and the language of the Sched V warrant suggested that it was the source of power to enter, search and seize ("You are hereby authorized … And … this shall be your sufficient warrant"). However, nothing turns on whether or not Simpson J took this view. Whatever the true construction of s 214(3) and Sched V, the selected construction of one in turn affected the other, and had to be congruent with it. Simpson J's conclusion that the second impropriety had taken place would only hold good if the reasoning in Re O'Neill95, with which Simpson J agreed, was correct. For in Re O'Neill Dunford DCJ held that while s 214(1) permitted the Collector to require the production of books and documents relating to two categories of goods (the goods which the information in writing alleged had been dealt with, and other goods imported or exported in the previous five years), s 214(3), and the Customs Warrant in the form of Sched V, permitted seizure only of the first category of documents, not the second. The appellant's criticism of the Court of Appeal's reasoning The appellant's submissions depend on the interrelationship between three parts of the Court of Appeal's judgment. In the first, the "Re O'Neill section", it held that decision to be wrong. In the second, the "failure to train section", it said that for the purpose of concluding whether there had been an impropriety arising from the respondent's failure properly to train and educate customs officers about Re O'Neill it would assume the correctness of that case. In the third, the "s 138(3) section", it applied the factors listed in s 138(3) to the first impropriety, but, according to the appellant, not the second. Counsel for the appellant told the Court of Appeal that he relied on the excessive width of the search as "a further impropriety", ie a second impropriety. Counsel for the respondent correctly told the Court of Appeal that there was no notice of contention that Re O'Neill was wrong, and said: "accepting that her Honour was right about [Re O'Neill] then this was another point of illegality". The Court of Appeal noted that the respondent did not dispute the correctness of Re O'Neill, and said in the "failure to train section" that Simpson J's reasoning on 95 Unreported, District Court of New South Wales, 18 August 1988. that subject "must be addressed on that basis."96 "That basis" involved assuming that Re O'Neill was correct, and that Simpson J was correct to find the second impropriety. But, said the appellant in this Court, when the Court of Appeal in the "s 138(3) section" dealt with a different topic – Simpson J's application of s 138(3) – it failed to do so "on that basis", ie on the basis that there were two improprieties, not one. It did so because in the "Re O'Neill section" it held that case to be wrong without having been invited by the respondent to do so and without notice to the parties97. If it were wrong, there was no second impropriety. Hence the appellant contended that he had been denied procedural fairness. Did the Court of Appeal deny the appellant procedural fairness? The wisdom of uttering dicta on a point not argued where those dicta do not affect the outcome as, by definition, they cannot if they are only dicta, may sometimes be questioned. That is partly because the absence of contested argument significantly weakens the future value of the dicta, and there can be other objections. But it is not necessarily a denial of procedural fairness for a court to utter dicta on a point not argued. That was so in relation to the "Re O'Neill section". Procedural fairness was only denied when in the "s 138(3) section" the Court of Appeal applied its opinion stated in the "Re O'Neill section" that the case was wrong – if it did. Did it? The respondent's first contention. The respondent submitted that the remarks of the Court of Appeal about Re O'Neill were a "digression" and "not necessary because Customs had accepted through counsel that [the respondent was] prepared to conduct the case on the basis that [Re] O'Neill was right." The respondent's first contention was that the only significance of Re O'Neill lay in an argument by the appellant that there had been a failure by Customs to train its officers about the effect of Re O'Neill. While Simpson J found that the relevant officers had little understanding or awareness of what was disclosed by Re O'Neill, she did not find that this was the result of inadequate education and training, and found that the officers had not acted with ill-will, for a collateral purpose or in bad faith. The respondent submitted that the "failure to train" case run at trial was run again in the Court of Appeal, but only on the basis that it revealed a "disturbing" but non-reckless state of affairs. The respondent submitted that the key passage in the Court of Appeal's reasons was in the 96 Parker v Comptroller-General of Customs (2007) 243 ALR 574 at 601 [109], quoted above at [68] and [133], and below at [154]. 97 Parker v Comptroller-General of Customs (2007) 243 ALR 574 at 587-588 [50]- "failure to train section"98, and that the balance of the Court of Appeal's reasoning in that section, which concluded that there was no impropriety in that regard, rested on an assumption that Re O'Neill was correct. Crucial to the respondent's first contention is the proposition that the appellant only relied on Re O'Neill in the Court of Appeal to support the "failure to train" case. That proposition is not correct. The matter was put more broadly before Simpson J99. Further, Simpson J approached the matter more broadly. She saw the search as being illegal because the power to search under s 214(3) was narrow. And in the Court of Appeal counsel for the appellant supported Simpson J's approach100. In the absence of any specific challenge to her approach by the respondent in the Court of Appeal, and of any specific indication by the Court of Appeal that that approach was not accepted, the appellant was entitled to assume that Simpson J's view of the matter would stand, and would be taken into account by the Court of Appeal in the "s 138(3) section". The respondent's second contention. The second contention of the respondent was that having stated in the "failure to train section" that the correctness of Re O'Neill was assumed, the Court of Appeal continued to make that assumption in the "s 138(3) section". That contention is crucial because, if it is correct, there was no want of procedural fairness. It is not correct. The question is a question of construction of the reasons for judgment. Properly construed, they falsify the respondent's contention. They are appropriately lengthy, detailed, thoughtful and complex. Although the Court of Appeal did note that the parties conducted the appeal on the assumption that Re O'Neill was right, it appears, with respect, in the course of preparing its reasons over time, inadvertently to have overlooked the fact that no hearing had been given on the question whether Re O'Neill was wrong, and to have taken into account its view, expressed in the "Re O'Neill section", that that case was wrong in deciding the 98 See [68], [133] and [154]: Parker v Comptroller-General of Customs (2007) 243 ALR 574 at 601 [109]. 99 In oral argument it was submitted: "It is clear, on all of the authorities, including the decision of Dunford J … that subsection 214(3) only permitted a seizure of documents relating to those documents identified in the summons. In this case, it is quite clear that they did not seize documents in relation to the respective bottles of brandy referred [to], but seized an enormous quantity of material in relation to all activities that had been going on for some time … As a consequence, the action in seizing all of these documents … is illegal." A similar point was made in written submissions. 100 See [147] above. appeal in defiance of the parties' assumption. That is so for reasons correctly stated by the appellant as follows. First, the Court of Appeal said in the "s 138(3) section"101: "In the result, the unlawfulness of the conduct of customs officers turned on the failure adequately to identify the bottle of brandy said to have been illegally dealt with pursuant to the Spirits Act. There was no evidence to indicate that it would not have been relatively easy to comply with that obligation of specificity. However, the fact that it was not done was not due to deliberate cutting of corners or disregard of the legal requirements. On one view, the error arose from a failure to reproduce in the notice requiring production of documents the detailed information supplied on oath for the purposes of s 214(1)." (emphasis added) The conduct of the customs officers was unlawful because it involved trespasses to land and goods. To say that "unlawfulness … turned on" the failure of identification – the first impropriety – is to say that the failure of identification was a necessary condition of unlawfulness. The same conclusion flows from the reference to only one "obligation", one breach and one "error". Yet on Simpson J's approach, based on the correctness of Re O'Neill, "unlawfulness" also flowed independently from the second impropriety – the seizure of documents other than those relating to the bottle of brandy alleged to have been illegally dealt with. The correctness of Simpson J's conclusion that there were two improprieties was conceded by the respondent in the Court of Appeal. There were two reasons for the conclusion of "unlawfulness". Either reason was a sufficient condition for that conclusion. To say, as the Court of Appeal did, that "the unlawfulness" turned on only the first reason is to deny the existence of the second. Hence the Court of Appeal's language indicates that it was not relying on Simpson J's second impropriety and was assuming not that Re O'Neill was correct, but that it was wrong. Secondly, this is confirmed by another passage in the "s 138(3) section"102: "The seriousness of the intrusion on the rights of Lawpark … through the seizure of [its] documents, flowed from the extraordinary breadth of the power conferred by s 214." This assertion that s 214(3) confers an extraordinarily broad power to search and seize is inconsistent with Re O'Neill. It recognised only a narrow power. 101 Parker v Comptroller-General of Customs (2007) 243 ALR 574 at 604 [124]. 102 Parker v Comptroller-General of Customs (2007) 243 ALR 574 at 604 [122]. Thirdly, before the "s 138(3) section" the Court of Appeal had concluded in the "Re O'Neill section" that only the first impropriety had taken place103. It had not adopted Simpson J's conclusion that there had been a second impropriety. It had not referred to it at all. It had not noted that no second impropriety could be found unless Re O'Neill were correct. It had not said at the end of the "Re O'Neill section" that that opinion would be put aside in view of the contrary assumption on which the parties had conducted the case in the Court of Appeal. At one point in the "failure to train section" it did say: "the complaint that the trial judge failed to address the issue must be addressed on that basis."104 By "basis" it meant "the assumption that Re O'Neill is correct". By "issue" it meant the issue whether there had been a "failure to train and educate customs officers". In other words, the assumption being made by the Court of Appeal that Re O'Neill was correct was being made only for the purpose of deciding the issue of a "failure to train and educate officers". It was not being made in relation to the issues examined in the "s 138(3) section" after the failure to train issue had been dealt with. The respondent contended that the adoption of a "basis" that Re O'Neill was correct, contrary to the reasoned views of the Court of Appeal developed at some length in the "Re O'Neill section"105, applied not only in the "failure to train section" but also in the "s 138(3) section". The better reading is that propounded by the appellant. The respondent's third contention. The respondent relied on a passage in the "s 138(3) section" quoted above106 which speaks of "the seizure of a large volume of documents without consent and without the authority of a valid warrant". But it does not identify why the Customs Warrant lacked validity. It is silent on whether the Court of Appeal had in mind the second of the improprieties identified by Simpson J as well as the first. The passage is thus neutral on the question of whether the Court of Appeal was there assuming that Re O'Neill was correct. It follows that the appellant was denied procedural fairness. For this appeal to succeed, all the appellant needs to show is that that denial deprived him of the possibility of a successful outcome. Conversely, the respondent must show that to remit the matter to the Court of Appeal would be futile because this 103 Parker v Comptroller-General of Customs (2007) 243 ALR 574 at 597 [90]. 104 At [68] and [133]: Parker v Comptroller-General of Customs (2007) 243 ALR 574 105 Parker v Comptroller-General of Customs (2007) 243 ALR 574 at 584-588 [43]- 106 Parker v Comptroller-General of Customs (2007) 243 ALR 574 at 603 [120]. course would inevitably result in its making the same orders. To that end the respondent raised three points. Was it inevitable that the Court of Appeal would have overruled Re O'Neill even if the appellant had been heard on the question? The respondent submitted that the appellant's loss of an opportunity to argue that Re O'Neill was correct was immaterial, because Re O'Neill was plainly wrong. The primary events took place nearly 20 years ago. The legislative language considered in Re O'Neill was repealed more than 13 years ago. The correctness of Re O'Neill is thus, for all purposes other than the justice of the way the appellant was treated, a subject of no more than purely antiquarian interest. In all these circumstances it is desirable in this dissenting judgment merely to record the opinion that it is strongly arguable that Dunford DCJ decided Re O'Neill correctly, that Simpson J was correct to agree with his decision, and that Davies J and Heerey J were also correct to reach the same conclusion. It would be surprising, and not creditable to the state of our judicature, if a view stated in 1988 by a future Supreme Court judge107 after due consideration, arrived at independently in 1991, albeit without argument from counsel, by one Federal Court judge (Davies J)108, followed in 1993 by another (Heerey J)109 after taking into account the prior authorities, and shared by another Supreme Court judge in 2006 after those three authorities were cited to her, was not sufficiently arguable to escape the censure of being plainly wrong. Heerey J's primary point about s 214 has considerable force110: "It is one thing to impute to Parliament an intention that such a power can be exercised when the documents relate to particular goods which have been identified by information on oath as being the subject of dealings or possible dealings in breach of the Act. It is a very different thing to contemplate forceful removal of documents relating to any goods imported or exported over a period of five years. While the statute clearly gives the Collector the power to require the handing over of documents in 107 Dunford DCJ served on the Supreme Court of New South Wales from 1993 until 108 Ace Custom Services Pty Ltd v Collector of Customs (New South Wales) (1991) 31 FCR 576 at 584-585. 109 Challenge Plastics Pty Ltd v Collector of Customs (1993) 42 FCR 397 at 400-401. 110 Challenge Plastics Pty Ltd v Collector of Customs (1993) 42 FCR 397 at 401. the latter category, it does not … authorise the further and serious step of seizure and removal." Three further points may be made. First, to require occupiers of premises to respond to notices to produce by conducting their own searches, not only for documents relating to goods referred to in an information but also for documents relating to other goods imported or exported in the previous five years, is less onerous than permitting officers of the government to conduct searches for the latter category of documents. Searches conducted by occupiers, informed by knowledge of their own record-keeping systems, are likely not to be unduly disruptive. But searches for the same wide classes of documents conducted by government officers may be very deleterious to the preservation of any order in the arrangements for keeping records in the premises searched and therefore damaging to the future conduct of the occupiers' businesses. Secondly, exercise of the right to search and seize conferred by s 214(3) may affect persons other than the person who has failed to comply with s 214(1). And, thirdly, contrary to what the Court of Appeal said111, since the person on whom the notice to produce is served under s 214(1) will not necessarily be the same person as the person present when the search takes place under s 214(3), it does not follow that the latter person will be aware of the scope of the requirement in the notice to produce. Thus a construction which would permit searches under s 214(3) as extensive as the reach of the notice to produce under s 214(1) is a construction which would call, it is strongly arguable, for clearer words than those in s 214(3). The common law right to be free of searches and seizures not supported by a valid warrant or other lawful justification is a fundamental one. Since it is strongly arguable that Re O'Neill was correctly decided, and it is at least clear that it is not plainly wrong, it cannot be said that remitter of the matter to the Court of Appeal for rehearing would be futile on the ground that the same outcome in that Court would be inevitable. To say that would be to deprive the appellant, and indeed the respondent as well, of the normal entitlement of litigants in intermediate appellate courts in this country to have their appeals considered by way of genuine rehearing. When an ultimate appellate court is asked to overturn a previously settled line of authority in lower courts, it usually regards itself as assisted in deciding whether to do so by the opinions, enunciated after contested argument, of the intermediate appellate court from which the appeal to the ultimate appellate court is brought. There are no such opinions available to this Court in this appeal. 111 Parker v Comptroller-General of Customs (2007) 243 ALR 574 at 588 [51]. Was any non-compliance with the warrant immaterial? The respondent submitted that the Court of Appeal had unquestionably considered the appellant's claim to have the evidence excluded on the basis that the entire seizure was the result of trespasses committed because the first impropriety, in rendering the Notice to Produce invalid, negated a precondition to the legality of the search. The respondent submitted that the effect of the second impropriety in tainting the legality of the search could not improve that claim. The search "does not get any more unlawful by being unlawful for two reasons." The second impropriety might make the "character of the illegality" wider "and more colourful", but the second impropriety was directed only to the issue concerning the failure to train and educate officers, which was "fully agitated and fully considered". So far as these submissions rest on the proposition that the appellant's submissions to the Court of Appeal about the undue width of the search went only to the "failure to train and educate" issue, they repeat an identical submission rejected above112. So far as these submissions discount the significance of any second impropriety, they must be rejected. The appellant drew attention to an allusion to s 138(3)(h) by the Court of Appeal in relation to the s 214(1) requirement that the goods be properly specified in the Notice to Produce113: "There was no evidence to indicate that it would not have been relatively easy to comply with that obligation of specificity."114 The next sentence referred to s 138(3)(e)115: "However, the fact that it was not done was not due to deliberate cutting of corners or disregard of the legal requirements." The appellant then submitted: "[H]ad [the Court of Appeal] accepted that the Customs Warrant only authorised the seizure of documents relating to the bottle of brandy said to have been unlawfully dealt with in the Information, then the discretion under section 138 would have had to be exercised in circumstances where: (i) Customs generally, including the Chief Inspector to whom a relevant Customs officer reported and from whom that officer took instructions, knew there was a decision of a Court exercising federal jurisdiction 112 Above at [150]. 113 Parker v Comptroller-General of Customs (2007) 243 ALR 574 at 604 [124]. 114 The question whether this was not an impermissible reversal of the burden of demonstration established by s 138(1) was not raised by either party and may be put aside. 115 Parker v Comptroller-General of Customs (2007) 243 ALR 574 at 604 [124]. (namely [Re O'Neill]) that the Customs Warrant was so limited;116 (ii) that decision, which was the only decision directly on the point, was correct; (iii) there was no decision to contrary effect and Customs had no reason to doubt the correctness of the decision other than the latter advice from the Australian Government Solicitor;117 and (iv) accordingly, it was open to infer that Customs had decided to flout the Court's decision and to prefer the advice from the Australian Government Solicitor, well knowing that in doing so its conduct might (indeed, in all likelihood would) be found to have been unlawful … [T]hose circumstances amount to compelling reasons for concluding that the seizure of the documents … was a contravention of an Australian law which was at least reckless,118 if not deliberate, within the meaning of section 138(3)(e)." (emphasis in original; one footnote omitted) The respondent did not deal with these points about s 138(3)(e) directly. While strictly speaking s 138 does not create a discretion, the passage affords grounds for concluding that the failure of the Court of Appeal to inform the appellant of its attitude to Re O'Neill was not an immaterial error. The prospects of persuading the Court of Appeal to exclude the evidence are not contemptible. If Re O'Neill were correct, there were two improprieties, not one. The second was independent of the first. The quality of the second impropriety may have made it more vulnerable to an adverse s 138(3)(e) analysis than the first. In addition, the second impropriety may also have been more vulnerable to adverse analysis under s 138(3)(d) and (h). It does not matter whether the present proceedings are analysed as only involving impropriety at the moment when the documents were obtained by the searches and seizures which took place, or whether there was impropriety earlier. What does matter is that even if the only impropriety was to be found in the searches and seizures themselves, there were, consistently with the approach of Simpson J and the parties in the Court of Appeal, two distinct reasons for concluding that the searches and seizures were improper or in contravention of law. Once that conclusion had been reached, and the Court of Appeal moved on to apply s 138(3), the factors there set out had to be evaluated in relation to each reason. It was possible that had evaluation been conducted in relation to the second reason, it might have turned out differently from the way the evaluation in relation to the first alone did. 116 Parker v Comptroller-General of Customs (2007) 243 ALR 574 at 602-603 [114]- 117 Parker v Comptroller-General of Customs (2007) 243 ALR 574 at 603 [118]. 118 Director of Public Prosecutions v Leonard (2001) 53 NSWLR 227 at 248-249 The need to consider the operation of s 138(3) in relation to every reason why there is an impropriety or a contravention of Australian law may be illustrated by a search for documents purportedly pursuant to s 214(3) involving the following events before and during the search: an occupier of premises failed to comply with a notice to produce which did not sufficiently identify the documents to which the goods relate (because the relevant identification was omitted from the document as typed by reason of a mechanical failure not noticed by the Collector, who was under pressure to issue it urgently in order to ensure preservation of the documents); the customs warrant required by s 214(3) was issued, but was stolen by a third party without the knowledge of the officer of Customs who was in charge of the search just before that officer entered the premises; and a person assisting the officer to carry out the search, after becoming frustrated by an inability to find any documents, obtained knowledge of their location after inflicting physical violence for that purpose on the occupiers of the premises. The seizure of the documents in this example is illegal. There are three reasons for the illegality. It is insufficient simply to say that once there is an illegality the reasons for it do not matter. It is necessary to examine the illegality in the light of each of the reasons for its being an illegality. It is likely that scrutiny of the first and second reasons would not result in inadmissibility: the conduct of the Collector was venial and the conduct of the officer in charge of the search was innocent. But scrutiny of the third reason may point much more strongly to exclusion in view of the factors listed in s 138(3)(d)-(f). In the present proceedings, the Court of Appeal evaluated the first impropriety in the light of the factors listed in s 138(3). But the appellant has been deprived of the opportunity of having the Court of Appeal evaluate the second impropriety in the light of those factors. If the matter is remitted to the Court of Appeal with a view to reconsideration of whether the evidence is admissible and if that Court finds, after argument, that the second impropriety existed, it will not inevitably follow that the evidence will be held admissible. Hence it is not futile to permit an evaluation of it which has not yet taken place in that Court to take place. Could the convictions be upheld on the averments alone? The respondent submitted that it would be futile to allow the appeal, because the evidence objected to was not a necessary step in concluding that the appellant was guilty. The respondent referred to Simpson J's statement that s 255 of the Customs Act made the respondent's averment in the Re-amended Statement of Claim of all the allegations prima facie evidence of the matters averred. She said also that the appellant elicited no evidence in rebuttal, either directly or in cross-examination of the respondent's witnesses. She described this as one of "two short routes to the conclusion that the Comptroller has established the facts pleaded in respect of each offence."119 The respondent did acknowledge that "the process by which the primary facts pleaded in the statement of claim and found proved by averment culminate in proof of the charges" was not "expressly exposed". But the respondent said that that step "hardly needed to be exposed", because if everything alleged in the Re-amended Statement of Claim was accepted, Simpson J's conclusion of guilt beyond reasonable doubt must follow. The proposition should not prevent the appeal from being allowed for the following reasons. First, the trial was never conducted on the basis that the seized evidence was unnecessary for the establishment of guilt, or on the basis that the facts averred would suffice to prove guilt. The respondent relied on the averment merely as a supplementary mode of proof, not as the sole mode. Secondly, in moving from a conclusion that the factual matters pleaded had been "established" or "proved" – ie on the balance of probabilities – to a conclusion that guilt was established beyond reasonable doubt, Simpson J took into account evidence based to some extent on the materials illegally seized. Hence, as a matter of construction of her reasons, she did not reach a conclusion of guilt beyond reasonable doubt merely on the basis of the averments. Thirdly, the respondent's submission is inconsistent with the Court of Appeal's view that if the seized evidence were inadmissible the convictions would have to be set aside120. Orders The appeal should be allowed, the Court of Appeal's orders should be set aside, the matter should be remitted to the Court of Appeal for a rehearing of grounds 25 and 26 of the appellant's Amended Notice of Grounds of Appeal to that Court, and the respondent should pay the appellant's costs of the appeal to this Court. The costs of the first hearing in the Court of Appeal should abide the outcome of the second. 119 Comptroller-General of Customs v Parker (2006) 200 FLR 44 at 120 [65]. 120 Parker v Comptroller-General of Customs (2007) 243 ALR 574 at 584 [40].

HIGH COURT OF AUSTRALIA QUEENSLAND PREMIER MINES PTY LTD & ORS APPELLANTS AND RESPONDENT Queensland Premier Mines Pty Ltd v French [2007] HCA 53 15 November 2007 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of Victoria Representation C L Pannam QC with M S Goldblatt for the appellant (instructed by Oakley Thompson & Co) B W Walker SC for the respondent with P J Bick QC for the respondent (instructed by Norton Gledhill) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Queensland Premier Mines Pty Ltd v French Real property – Torrens title – Transfer of mortgage – Separate mortgage and loan agreements – Debts or obligations secured by mortgage – Whether s 62 of the Land Title Act 1994 (Q) ("the Act") operated to vest in transferee of the mortgage the right to recover monies under the loan agreement – Relevance of the historical and legislative purpose of s 62 of the Act – Relevance of connection of the loan to the mortgage – Whether a right to recover monies under the loan agreement was a right "to recover a debt or enforce a liability under the mortgage" within the meaning of s 62(4) of the Act. Statutes – Interpretation – Meaning of "under the mortgage" in s 62 of the Act – Whether a right to recover a debt or enforce a liability under the mortgage includes a right to recover a debt or enforce a liability secured by the mortgage. Words and phrases – "under the mortgage". Land Title Act 1994 (Q), s 62. GLEESON CJ. I have had the advantage of reading in draft form the reasons for judgment of Kiefel J. I agree with the order proposed by her Honour, and with her reasons for that order. GUMMOW J. The appeal should be dismissed with costs. I agree with the Kirby KIRBY J. The problem presented by this appeal is not without difficulty. It arises in an appeal from a judgment of the Court of Appeal of the Supreme Court of Victoria1. That judgment reversed the orders made by the primary judge in the Commercial and Equity Division of the Supreme Court (Dodds-Streeton J)2. The point in issue derives from what the primary judge described as "fundamentally different constructions"3 of s 62 of the Land Title Act 1994 (Q) ("the Act"). That section appears in substantially the same form in the Torrens title legislation in force in all of the States and Territories of Australia4. It was common ground between the parties that no decision of this Court, or of any other Australian appellate court, authoritatively decides the question presented by the appeal5. Given the provenance of the disputed provision, its long history and the multitude of cases on so many other aspects of the Torrens title legislation, the absence of governing authority is curious. Especially so because of the many cases that must arise each year involving the registration of an instrument of transfer affecting rights in relation to a mortgage of Torrens title land, executed against the background of collateral loan agreements. Two arguable views of s 62 of the Act There are arguments both ways concerning the meaning and operation of s 62 of the Act. So much will appear from a reading of the careful reasons of the primary judge. She held6: "In my opinion, the terms of s 62, according to their plain or ordinary meaning, do not indicate that only rights to recover debts or liabilities primarily created by the terms of the instrument of mortgage will vest in the transferee. The terms of s 62(4) indicate that the second limb includes subject-matter which is additional to the subject-matter of the first limb, 1 French v Queensland Premier Mines Pty Ltd [2006] VSCA 287. 2 French v Queensland Premier Mines Pty Ltd [2004] VSC 294. [2004] VSC 294 at [73]. 4 Real Property Act 1900 (NSW), s 52(1); Transfer of Land Act 1958 (Vic), s 46(1); Real Property Act 1886 (SA), s 151; Transfer of Land Act 1893 (WA), s 83; Land Titles Act 1980 (Tas), s 60(2); Land Title Act (NT), s 62; and Land Titles Act 1925 (ACT), s 78. [2006] VSCA 287 at [34]. [2004] VSC 294 at [157]-[158]. Kirby rather than constituting a mere illustration or sub-category of it. Section 62(4) indicates that a transferee will acquire the right to recover a debt or to enforce a liability under the mortgage … irrespective of whether the debt could be recovered, or the liability could be enforced, by suing on the terms of the mortgage. If the reference to 'under the mortgage' in the second limb of s 62(4) were held to mean, 'originally or primarily created by terms included in the mortgage', the second limb would, as [the appellants] contended, have no effective independent operation." In disposing of associated proceedings brought before the Court of Appeal of Queensland (and in refusing an application to vary that Court's earlier orders by having the words "and the debts secured thereby" inserted in those orders) Williams JA, for that Court, remarked7: "Once registered section 62 of the Land Title Act 1994, which supplants sections 65 and 66 of the 1861 Real Property Act and which is mirrored in legislation in other States, would have effect. Consequent upon section 62 there is an assignment of the right to sue to recover the debt." Given that the Queensland Court of Appeal made these remarks at the same time as it refused to become involved in the issue in the present case which, by then, was before the Victorian courts, the last-stated observation is scarcely conclusive. However, especially when read with the earlier decision of the Queensland Court of Appeal in Julong Pty Ltd v Fenn8, it suggests that different intuitive understandings may arise as to the operation of s 62 of the Act. By the time problems of statutory construction reach this Court, it is rare to find a case in which there is nothing to say for the losing interpretation9. Nevertheless, in the end, like other members of this Court, I have come to the conclusion expressed by Kiefel J in her reasons. An interpretation conforming to the statutory text The interpretation of s 62 of the Act, favoured by Kiefel J, is the one preferred by Professor Peter Butt and his colleagues in their respected text on the 7 Marminta Pty Ltd v French [2004] QCA 8 at 3 per Williams JA (Jerrard JA and (2003) Q ConvR ¶54-586; cf reasons of Kiefel J at [36]. cf News Ltd v South Sydney District Rugby League Football Club Ltd (2003) 215 CLR 563 at 580 [42] per McHugh J. Kirby Torrens system10. The authors there conclude that registration of a transfer of mortgage will not automatically vest in the transferee the right to sue on a separate agreement that underlies the mortgage, if the obligations are not comprised in the mortgage document itself. They instance a separate loan agreement or a facility agreement. They note that the Queensland Court of Appeal had held that the right to sue on such a separate agreement automatically "runs" on registration of a transfer of the mortgage, referring to the decision in Julong11. But they noticed the subsequent decision of the Victorian Court of Appeal, now before this Court. They expressed preference for the reasoning in the latter. The reasons offered for this preference are persuasive12: "[The Victorian Court of Appeal] takes as its starting point that where the borrower signs a mortgage and a separate loan agreement, there are two covenants to pay, one under each document. Under the Victorian equivalent to [s 62 of the Act] on the transfer of a mortgage there is also transferred the right to recover any money payable 'thereunder' (that is, 'under the mortgage') … [R]egistration of a transfer of mortgage does not automatically vest in the transferee the right to sue under a (separate) loan agreement or facility agreement. Rights under those agreements would need to be separately assigned." The foundation of the preferred view identified by Professor Butt and his co-authors is the text of provisions in the Queensland and New South Wales legislation. The interpretation is consistent with the definition of "rights" provided by s 62(4) of the Act. That word is expressly defined by reference to the "terms of the mortgage" and to enforcement of a liability "under the mortgage". As such, the interpretation now preferred by this Court has a strong textual foundation in the language of the Act. Adhering to such a foundation generally represents a sensible approach, particularly in this area of the law. Conveyancers, once instructed on what s 62, and its equivalents, require, where the object is to transfer rights and obligations arising under a separate loan agreement, will proceed (where such is the intention of the parties) to provide expressly for that result. The fact that (as here) the parties to the loan agreement may not necessarily coincide exactly with the 10 Butt, Ticehurst and Hughes, Woodman & Nettle: The Torrens System in NSW, 2nd ed at 12104-12105 [52.60]. 11 (2003) Q ConvR ¶54-586. 12 Butt, Ticehurst and Hughes, Woodman & Nettle: The Torrens System in NSW, 2nd ed at 12105 [52.60]. Kirby parties to the mortgage is a practical reason for adopting the interpretation favoured by the Victorian Court of Appeal13. An interpretation consistent with the Torrens system This Court should also keep in mind the necessity, so far as possible, to resolve the present question of statutory construction bearing in mind the fundamental purposes of Torrens title legislation, such as the Act. Loan agreements inter partes neither purport to be, nor of their nature are, dealings in an estate or interest in land. One of the fundamental purposes of the Torrens system (and of provisions such as s 62 of the Act, read in its context) is to give effect to an important public policy. That policy is that the land title register should be sufficient of itself to inform those concerned about the nature and extent of any outstanding interest in relation to the land. The Torrens system deals with matters of underlying title. It is not concerned about side contractual agreements14. In English Scottish and Australian Bank Ltd v Phillips15, Dixon, Evatt and McTiernan JJ remarked16: "Under the system of registration governing the present case, the statutory charge described as a mortgage is a distinct interest. It involves no ownership of the land the subject of the security. Like a lease, it is a separate interest in land which may be dealt with apart altogether from the fee simple or other estate or interest mortgaged. But, like a lease, it involves, or usually includes, personal obligations. It is impossible to treat the personal obligations in the same way entirely as the interest in land is treated by the registration system. The register cannot be made the source of information as to the fulfilment or performance of such obligations, and the question what rights they continue to confer may depend upon such matters. Thus, although a proposing transferee of a mortgage may rely upon the register for the existence and validity of the mortgage, he may be unable to depend upon anything but inquiries from the parties to ascertain how much of the principal sum secured remains unpaid". It follows that s 62 of the Act reflects the important public policy that lies at the heart of the Torrens system of title by registration. There is to be a register 13 [2006] VSCA 287 at [85] per Callaway JA. 14 cf Westfield Management Ltd v Perpetual Trustee Company Ltd [2007] HCA 45 at 15 (1937) 57 CLR 302. 16 (1937) 57 CLR 302 at 321-322. Kirby open to the public which will record, with the detail required by such sections as ss 73 and 74 of the Act, the nature of a specified interest which, in this case, is the mortgage. An inspection of the register should reveal all about the title. What parties thought or did "on the side" should not be relevant. Fulfilling that public purpose suggests that, without very clear statutory language, courts should resist importing into the Act consequences that are interstitial or implied from the description of the rights that are subject to registration. Because the personal obligations that derive from the loan agreement are legally separate and distinct from the obligations arising, as such, "under the mortgage", they are not automatically transferred with the mortgage that is registrable. Unless included in the mortgage instrument itself, to be transferred they require separate and specific agreement by those who are parties to the loan agreement. An interpretation compatible with commercial sense Contrary to the submission for the appellants, it has not been demonstrated that this interpretation of the Act lacks commercial sense. I have not overlooked the argument that it might sometimes be convenient, from a commercial point of view, to have all "collateral" agreements run with the mortgage. The transferee could then say, in effect: "When I take a transfer of a mortgage I will get all of the benefits that the transferor/mortgagee had under the mortgage. If the mortgage is registered, then, on registration of the transfer, I get the whole package." This was essentially the policy argument for the appellants. Undoubtedly it could sometimes have advantages for commercial investors. However, as Callaway JA pointed out in the Court of Appeal, in the instant case, the transfer of the mortgage without more served the useful commercial purpose of effectively disencumbering the land17. No attempt was made at trial or in the Court of Appeal to demonstrate that the interpretation now preferred would in some way cut across a settled practice of conveyancers, the common practice of mortgagees or their ordinary expectations. The fact that Professor Butt and his co-authors have preferred the approach of the Victorian Court of Appeal suggests that there are no such practical difficulties. A clear rule is preferable and will be observed by conveyancers. The text and central purpose of the Torrens title legislation favour the respondent. So do the expert commentators on the legislation. So should this Court. With these additional comments, I therefore agree in the reasons of 17 [2006] VSCA 287 at [86] per Callaway JA. Kirby Order It follows that I agree in the order that Kiefel J has proposed. HAYNE J. I agree with Kiefel J. Hayne HEYDON J. I agree with Kiefel J. Crennan CRENNAN J. I have had the advantage of reading in draft the reasons for judgment of Kiefel J. I agree that the appeal should be dismissed with costs, for the reasons given by her Honour. KIEFEL J. This appeal raises the question whether the registration of a transfer of a Torrens title mortgage effects an assignment of the right to recover the moneys owed under a separate agreement for loan, that obligation being secured by the bill of mortgage. The appellants' contention is that that result is achieved upon registration of the transfer by reason of s 62 of the Land Title Act 1994 (Q) which provides: "Effect of registration of transfer (1) On registration of an instrument of transfer for a lot or an interest in a lot, all the rights, powers, privileges and liabilities of the transferor in relation to the lot vest in the transferee. (2) Without limiting subsection (1), the registered transferee of a registered mortgage is bound by and liable under the mortgage to the same extent as the original mortgagee. In this section— rights, in relation to a mortgage or lease, includes the right to sue on the terms of the mortgage or lease and to recover a debt or enforce a liability under the mortgage or lease." In 1989 Seventeenth Febtor Pty Ltd loaned the sums of $410,000 to Queensland Premier Mines Pty Ltd ("QPM") and Mr and Mrs Beckinsale and $560,000 to QPM under two loan agreements. The purpose of the loans was to enable QPM to acquire and develop land at Yeppoon in Queensland as a shopping centre. The agreements are in similar terms. Pursuant to the first loan agreement, payment of the principal sum by QPM and Mr and Mrs Beckinsale was due on 21 January 1990, and under the second agreement the due date for payment by QPM was 21 February 1990. In each case interest was to be paid at the rate of 24 per cent. The loans were to be collaterally secured by mortgages over specified land. The mortgages were granted by QPM in favour of Seventeenth Febtor in November 1989 and September 1990 and registered. The Beckinsales were not a party to them. Each of the schedules to the bills of mortgage contained a covenant by QPM, as mortgagor, to "pay each amount included in the Secured Moneys to the Mortgagee … on the date fixed for payment of that amount under any Facility Agreement" and charged the lands with repayment of those sums. The "Mortgagee" was defined as Seventeenth Febtor, its successors and assigns; "Secured Moneys" as all moneys owing or which will become payable on any account; and "Facility Agreement" to include the provision of finance on any agreement pursuant to which moneys are lent by the mortgagee to the mortgagor. It was provided that nothing contained in the mortgage would merge, lessen or otherwise prejudice any facility agreement with respect to the moneys secured under the mortgage. By a deed dated 18 December 1992 Seventeenth Febtor assigned its rights and interests in the mortgages and the loan agreements to Mr Rusty French. No moneys were repaid by QPM and the Beckinsales. In December 1999 Mr French wrote to Mr Beckinsale concerning his proposal to sell the land the subject of the mortgages. The outstanding principal and interest due under the loan agreements as at January 2000 were in the order of $4 million. On 5 January 2000, following some further correspondence, Mr French accepted Mr Beckinsale's offer, on behalf of Marminta Pty Ltd, to pay $950,000 to "buy back" the mortgages. A dispute subsequently arose between Marminta and Mr French concerning the agreement. In 2002 QPM agreed to sell the development site, which included the land the subject of the mortgages, to Unison Properties Pty Ltd for $2.44 million. Marminta brought an action in the Supreme Court of Queensland for specific performance of the agreement for the sale and purchase of the mortgages. Mr French brought the proceeding the subject of this appeal in the Supreme Court of Victoria in January 2002, in order to recover the balances due under the loan agreements from QPM and the Beckinsales. Marminta was initially unsuccessful in its claim for specific performance, but on 5 December 2003 the Queensland Court of Appeal ordered that "the agreement by which Marminta Pty Ltd agreed to purchase from Rusty French the mortgages …" be specifically performed and that Mr French do all things necessary to enable Marminta to become registered as proprietor of the mortgages18. On 14 January 2004 a transfer of the mortgages by Mr French to Marminta, Marminta's release of mortgage and a transfer of the estate in the lands to Unison Properties Pty Ltd were registered. The instrument of release of mortgage stated that Marminta released the mortgages in question as a charge on the land. No written assignment of Mr French's rights under the loan agreements to Marminta is in existence. Marminta initially claimed that it was part of the agreement for the sale of the mortgages, but abandoned that contention at trial. On 5 February 2004 the Queensland Court of Appeal heard an application by Marminta and QPM for a variation of its earlier orders by adding, after the reference to the mortgages the subject of the agreement for sale and transfer, the words "and the debts secured thereby". In the course of the hearing the effect of s 62 was raised but the Court declined to adjudicate upon its operation as the issue had been raised in the Victorian proceedings. 18 Marminta Pty Ltd v French [2003] QCA 541. In those proceedings Mr French had defensively alleged that it was Marminta's contention that the right to sue upon the terms of the mortgages, and to recover any debt under them, vested in it upon registration of the transfer of the mortgages to it, as a consequence of s 62. It became, and Mr French ceased to be, the creditor of QPM and the Beckinsales of any sums due and owing pursuant to the loan agreements. He sought negative declarations. Marminta repeated the first contention in its counterclaim and sought a declaration to that effect. On 18 August 2004 Dodds-Streeton J of the Supreme Court of Victoria dismissed Mr French's claims under the loan agreements and made declarations in the terms sought by Marminta19. The Victorian Court of Appeal (Maxwell P, Callaway and Redlich JJA) allowed an appeal from that decision and gave judgment for Mr French for the balance owing by QPM and the Beckinsales under the loan agreements, and for the amounts claimed with respect to rates and taxes on the land which he had been obliged to pay20. Three decisions of this Court were analysed by her Honour the trial judge: Consolidated Trust Co Ltd v Naylor21; Measures v McFadyen22; and English Scottish and Australian Bank Ltd v Phillips ("ES&A Bank v Phillips")23. Although the cases were not directly in point, her Honour considered that statements of general principle in Consolidated Trust v Naylor and Measures v McFadyen provided guidance as to the construction of s 62. Her Honour reasoned that the "consistent decisive factor" in the approach of the cases, as to whether the benefit of covenants was transferred upon registration, was whether the relevant covenant "affected, touched and concerned, defined or was intimately connected with, the estate or interest in land constituted by the mortgage"24. In her Honour's view all covenants to pay which are secured by a mortgage satisfy this description25. The cases did not draw any distinction between rights created by the mortgage itself and those created by external 19 French v Queensland Premier Mines Pty Ltd [2004] VSC 294 at [246]. 20 French v Queensland Premier Mines Pty Ltd [2006] VSCA 287. 21 (1936) 55 CLR 423. 22 (1910) 11 CLR 723. 23 (1937) 57 CLR 302. 24 [2004] VSC 294 at [150]. 25 [2004] VSC 294 at [151]. transactions26. In Measures v McFadyen Isaacs J appeared to contemplate that the person whose obligations were transferred could be any party who owed a debt secured by the mortgage27. The decision in ES&A Bank v Phillips contained observations that the plan of legislation such as the Land Title Act is to enable transfer, not only of the interest in the land, but of all the accompanying personal obligations incident thereto28. Her Honour held that, in their plain and ordinary meaning, the words of s 62 do not indicate that only rights to recover debts and liabilities primarily created by the terms of the mortgage will vest in the transferee. The "second limb" of s 62(4) includes subject-matter in addition to that of the "first limb". Section 62(4) indicates that a transferee will acquire the right to recover a debt, or to enforce a liability under a mortgage or a lease, irrespective of whether the debt could be recovered, or the liability could be enforced, by suing on the terms of the mortgage29. Her Honour concluded that s 62 will ordinarily apply to vest in the transferee the underlying debts and liabilities secured under it. The section therefore extended to debts and liabilities owed by third parties30. The starting point in the reasoning of Maxwell P, with whom the other members of the Victorian Court of Appeal agreed, was the independence, conceptually and contractually, of the mortgage security and the obligation to pay contained within it31. In the present case there were two separate and distinct covenants to pay: that contained in the loan agreement, which is freestanding and enforceable in its terms, and that under the mortgage. The covenant under the mortgage merely contained a further promise to pay in accordance with the terms of the loan agreement32. In his Honour's view, the fact that the mortgage covenant imposed an obligation to pay amounts due under the loan agreement was not to the point. The relevant right was to sue for and recover moneys under the loan agreement and did not arise under the mortgage, as s 62(4) required33. 26 [2004] VSC 294 at [150]. 27 [2004] VSC 294 at [153]. 28 [2004] VSC 294 at [156]. 29 [2004] VSC 294 at [157]. 30 [2004] VSC 294 at [165]. 31 [2006] VSCA 287 at [13]. 32 [2006] VSCA 287 at [20]. 33 [2006] VSCA 287 at [26]. The section transferred only rights arising pursuant to the mortgage itself. The three cases considered by the trial judge were distinguishable since they concerned covenants within the instrument the subject of transfer. The mortgage covenant, whilst valid and enforceable by Marminta, was empty. QPM was at no time indebted to Marminta. Following the assignment the mortgage secured nothing and was liable to be discharged, which is what occurred34. Maxwell P observed that his view of s 62 did not appear to accord with that of the Queensland Court of Appeal in Julong Pty Ltd v Fenn35. In that case Atkinson J stated that s 62 applied to vest the debts of individual mortgagors who were jointly liable with a corporate debtor under a facility agreement secured by a mortgage over their property, as well as transferring the mortgage security for that debt and cited Consolidated Trust v Naylor as support for that conclusion36. Maxwell P was unable to agree37. Measures v McFadyen38 was concerned with a transfer of a lease governed by s 52 of the Real Property Act 1900 (NSW) which has a like purpose to s 6239. The statute remains in force. The lease contained a covenant to effect improvements which had been breached by the lessee. Griffith CJ held that the section was not intended to transfer choses in action with respect to past and completed breaches of covenant40. Isaacs J referred to those rights existing independently of the continuance of the obligation under which they arose and of the land under which they were originally secured41. It will be observed that the case is not directly relevant to the question which arises here. Nevertheless the respondent relies upon it in the event that this Court holds that s 62 applies to the covenants in the loan agreements. The respondent points out that the borrowers had been in default of both agreements since 1989 and the principal sums and 34 [2006] VSCA 287 at [63]. 35 (2003) Q ConvR ¶54-586 per McMurdo P, Williams JA and Atkinson J. 36 (2003) Q ConvR ¶54-586 at 60,921 [40]. 37 Duncan and Dixon, The Law of Real Property Mortgages, (2007) at 158-159 prefer the view of the Victorian Court of Appeal. 38 (1910) 11 CLR 723. 39 Also see Transfer of Land Act 1958 (Vic), s 46; Real Property Act 1886 (SA), s 151; Transfer of Land Act 1893 (WA), s 83; Land Titles Act 1980 (Tas), s 60; Land Title Act (NT), s 62; Land Titles Act 1925 (ACT), s 78. 40 (1910) 11 CLR 723 at 731. 41 (1910) 11 CLR 723 at 737-738. interest were immediately payable at the option of the lender without notice, under the terms of the agreements. Consolidated Trust v Naylor holds that a transfer of a mortgage does not give the transferee the right to sue a surety on a guarantee contained within the mortgage. At issue in ES&A Bank v Phillips was whether the personal covenant to pay contained within a mortgage is extinguished when the same person is both mortgagor and registered proprietor of the mortgage at a point in time. None of these cases were concerned with the question whether a covenant to repay in an agreement separate from the mortgage, but secured by it, is transferred upon registration by operation of the statute. Measures v McFadyen and Consolidated Trust v Naylor do contain discussion about the purpose of s 52 of the Real Property Act 1900 (NSW) and the general concern of legislation such as the Land Title Act. Section 52 is in terms similar to s 66 of the Queensland Real Property Act of 1861, the predecessor to s 62. The Act of 1861 introduced the Torrens system of land registration into Queensland42. Section 52 provides: "(1) By virtue of every such transfer, the right to sue upon any mortgage or other instrument and to recover any debt, sum of money, annuity, or damages thereunder (notwithstanding the same may be deemed or held to constitute a chose in action), and all interest in any such debt, sum of money, annuity, or damages shall be transferred so as to vest the same at law as well as in equity in the transferee thereof. (2) Nothing herein contained shall prevent a Court from giving effect to any trusts affecting the said debt, sum of money, annuity, or damages, in case the transferee shall hold the same as a trustee for any other person." Isaacs J in Measures v McFadyen said that the words "(notwithstanding the same may be deemed or held to constitute a chose in action)" were the real key to the section43. The common law had refused to recognise the assignment of a chose in action and the transfer of a debt often required the assent of the debtor, in effect a novation. As Windeyer J later observed in Norman v Federal 42 As to earlier provisions in the other States see Real Property Act 1862 (NSW); Real Property Act 1862 (Vic); Real Property Act 1858 (SA); Transfer of Land Act 1874 (WA); Real Property Act 1862 (Tas). 43 (1910) 11 CLR 723 at 737. Commissioner of Taxation44, the coming into effect of the Judicature Act 1873 rendered unnecessary previous strategies, and simplified assignments, but it did not simplify the law surrounding them. In Measures v McFadyen Isaacs J went on to say45: "Sec 52 was intended to put an end to all this, and to perfect, even in regard to legal procedure, the simplicity and directness which otherwise characterise the Statute." A similar object to that to which s 52 is directed is achieved with respect to old system land by statutes such as the Conveyancing Act 1919 (NSW). It provides that a memorandum of transfer indorsed upon a mortgage operates as a deed of assignment of the mortgage debt and as a deed of conveyance of the estate and interest of the mortgagee46. Isaacs J explained in Measures v McFadyen that the object of the section is "only to perfect the transaction effected by the statutory transfer" and said47: "With respect to personal obligations the Act primarily concerns itself with their security upon land for their fulfilment, and having provided a statutory transfer of the benefits of the obligation as between the transferor and the transferee, proceeds in this section to completely effectuate the transfer by affecting the third person, the obligor also. To this end it transfers the right to sue and recover whatever debt, sum of money, annuity or damages (that is, right to damages) has been thereunder transferred." These aspects of his Honour's reasons, to which the trial judge had regard, serve to explain the historical background to provisions such as s 62. The legal problem to which they were directed identifies what was necessary to be effected by them. That effect remains the same despite the removal of the words "notwithstanding the same may be deemed or held to constitute a chose in action" in later statutes such as the Land Title Act. Section 62 effects an assignment of both the mortgagee's interest in the land and the mortgagee's right of action with respect to moneys which become due under the mortgage. To that end it was necessary to extend the operation of the statute to the person whose obligation it was to pay the moneys, as the law would otherwise require their 44 (1963) 109 CLR 9 at 28-29. 45 (1910) 11 CLR 723 at 737. 46 Conveyancing Act 1919 (NSW), s 91(4). 47 (1910) 11 CLR 723 at 737. express agreement to pay the transferee. Isaacs J did not say that the statute extended to any person whose obligation to pay is secured by the mortgage the subject of the transfer. His Honour's reasons assume that the debt transferred is that owed to the transferor. That is to say, the "obligor" is the mortgagor. His Honour's emphasis of the word "thereunder", which appears in s 52, identifies the mortgage as the source of the debt. It may be inferred that his Honour drew attention to the mortgage in that case, because it had been argued that the transfer was effective to pass rights to damages which were complete and independent of it. This does not detract from what his Honour said about the intended operation of the section. The discussion in Consolidated Trust v Naylor confirms such an approach. Speaking of s 52, and by analogy of s 91 of the Conveyancing Act, Dixon and Evatt JJ identified as the concern of the statute dealings in land48. Their Honours explained that it is only because the mortgage involves such a dealing that the statute concerns itself with the transaction in its entirety. It extends to the personal liability of the mortgagor for the mortgage debt "because that liability is intimately connected with the rights of property arising out of the mortgage transaction". In ES&A Bank v Phillips Dixon, Evatt and McTiernan JJ49 pointed out that a statutory charge described in a mortgage, under the equivalent South Australian legislation50, is a distinct interest, which may itself be dealt with, but which usually includes personal obligations. Latham CJ observed that a mortgage as a security could exist without a covenant to pay51. The majority said that, whilst it was not possible to treat the personal obligations in the same way as the interest in land is treated by the registration system, "nevertheless, the plan of the legislation is to enable the proprietor to transfer by registration not only the interest in the land, but all the accompanying personal obligations normally incident thereto"52, referring to Consolidated Trust v Naylor. In Consolidated Trust v Naylor Dixon and Evatt JJ concluded on the topic53: 48 (1936) 55 CLR 423 at 434. 49 (1937) 57 CLR 302 at 321-322. 50 Real Property Act 1886 (SA), s 151. 51 (1937) 57 CLR 302 at 308. 52 (1937) 57 CLR 302 at 322. 53 (1936) 55 CLR 423 at 435. "In relation to transfers of mortgage secs 51 and 52 should be understood as dealing only with rights, powers, privileges, debts and sums of money affecting the mortgage transaction as between mortgagor and mortgagee." A surety's obligation, albeit one arising from a covenant contained within the mortgage, was regarded by their Honours as merely collateral to the mortgage transaction, not directly or indirectly affecting the land, and not part of the dealing contemplated by the legislation. Neither Consolidated Trust v Naylor nor ES&A Bank v Phillips provides support for the view of the trial judge that any liability secured by the land is the subject of the statutory transfer. To the contrary of the inference her Honour drew from statements in those cases, the only liability which would qualify as intimately connected to the property interest created by the mortgage transaction is that of the mortgagor. Whilst the question in this case is different from those dealt with in those cases, in each case the reasons identify the dealing with which the statute is concerned as the mortgage transaction. The liability to pay which arises under it is part of that dealing. So understood, the statutory provision for the transfer of a mortgage has no application to rights arising under an agreement independent of it, as is here the case. The effect of the operation given to s 62 by the trial judge would be to give to Marminta benefits under an agreement to which it was not a party, benefits which had not been the subject of an assignment to it, and, even more remarkably, the right to debts owed by third parties to the mortgage. This is so regardless of the fact that it is unlikely that Marminta was ever concerned with the recovery of the debts owed by the Beckinsales or QPM. Its purpose in those proceedings was to prevent Mr French doing so. Groongal Pastoral Co Ltd (in Liquidation) v Falkiner54 makes plain that legislation such as the Real Property Act 1900 (NSW) is not intended to interfere with the ordinary operation of contractual relations or with the effect of instruments at law55. The purpose of the Act is to simplify and facilitate dealings with land, including mortgages. The Court referred to statements by Isaacs J in "They have long, and in every State, been regarded as in the main conveyancing enactments, and as giving greater certainty to titles of 54 (1924) 35 CLR 157. 55 (1924) 35 CLR 157 at 163. 56 (1914) 19 CLR 197 at 213 and 216. registered proprietors, but not in any way destroying the fundamental doctrines by which Courts of Equity have enforced, as against registered proprietors, conscientious obligations entered into by them. … The Land Transfer Act does not touch the form of contracts. A proprietor may contract as he pleases, and his obligation to fulfil the contract will depend on ordinary principles and rules of law and equity, except as expressly or by necessary implication modified by the Act." No other decision referred to in argument has a bearing on this case. The respondent sought to distinguish Julong v Fenn on the basis that the mortgage in that case did not contain a "no-merger" provision, as do the mortgages here in question. A possible result is that the simple contract debt arising under the Facility Agreement in that case may have merged when the security was created for that debt between the same parties57. In that regard an instrument of mortgage under the Land Title Act operates as a deed upon registration58. If that were so, the obligation under the Facility Agreement may have gone. It is not, however, apparent that these matters informed the statement in Julong v Fenn about the operation of s 62. The full contextual setting for it is not apparent from the reasons and it is not otherwise explained. The decision in PT Ltd v Maradona Pty Ltd59 says no more than that the benefit of the personal covenant within a mortgage passes to the assignee upon registration of the transfer of the mortgage. Insofar as Gilmour v Pyramid Building Society (in liq)60 holds that the statutory assignment includes the covenants in a guarantee, because it forms part of the mortgage document, it would appear to be contrary to Consolidated Trust v Naylor. The decisions in Measures v McFadyen and Consolidated Trust v Naylor contain useful discussion of the historical need for, and intended operation of, statutory provisions such as s 62, in the context of land registration statutes. The extent of the operation of s 62 is, however, to be derived by a process of construction, by reference to the words of the section61. 57 Coote's Treatise on the Law of Mortgages, 8th ed (1912), vol II at 1470; Fisher and Lightwood's Law of Mortgage, 2nd Aust ed (2005) at [36.13]. 58 Land Title Act 1994 (Q), s 176; see also Real Property Act 1900 (NSW), s 36(11). 59 (1992) 25 NSWLR 643 at 681. 60 (1995) 6 BPR 13,979; (1995) NSW ConvR ¶55-747. 61 Weiss v The Queen (2005) 224 CLR 300 at 305 [9]. A reading of the section provides no support for Marminta's contentions. The primary concern of the Act, as reflected in s 62(1), is to convey the rights of the transferor in relation to their interest in "the lot", which is defined to mean land. In the case of a mortgage that interest arises from the instrument of mortgage. Sub-section (4) should be read with sub-s (1), since it is intended to further define the "rights" there referred to. It may then be inferred that it is concerned with rights arising from the instrument which creates the interest in land the subject of statutory transfer. The instrument of mortgage is the source of that interest and of the rights to sue for and recover moneys owing under it. The latter is confirmed by the words "under the mortgage" in sub-s (4). The word "under", with respect to an obligation "under this lease", has been held to refer to an obligation created by, in accordance with, pursuant to, or under the authority of the lease62. Likewise the words "under a contract" in a statute may direct attention to the source of the obligation in question63; and a decision "under an enactment" to the statute to which the decision sought to be reviewed owes, in an immediate sense, its existence64. The two rights, to sue for and to recover a debt, arise from the same source. The words of the section provide no warrant for a construction which extends it to the right to recovery of a debt merely collaterally secured by the mortgage. The words of the section are plain. Neither the historical reason for the provision nor its purpose, of effectuating a transfer of both the security interest and the right to moneys arising from the mortgage transaction, supports a construction which extends the section to obligations arising otherwise than under the terms of the mortgage. It is no part of the purpose and function of a statute such as the Land Title Act to rewrite the bargain between transferor and transferee. The circumstances of this case are not usual. More commonly, when a mortgage is transferred, the debt arising from a separate loan agreement will be transferred with it. As Callaway JA observed65, that is a consequence of the agreement, express or implied, between the parties, not of the operation of s 62. In the present case the concern of Marminta, and the Beckinsales, was to acquire the mortgages, for what a purchaser would otherwise pay Mr French, and then to effect their release in order to sell the land, along with the balance of the development site, for commercial advantage. 62 Chan v Cresdon Pty Ltd (1989) 168 CLR 242 at 249. 63 Federal Commissioner of Taxation v Sara Lee Household & Body Care (Australia) Pty Ltd (2000) 201 CLR 520 at 537 [42]. 64 Griffith University v Tang (2005) 221 CLR 99 at 128 [80]. 65 [2006] VSCA 287 at [85]. During the course of argument on the appeal the question as to whether Marminta had any interest in the loan agreements, following its release of the mortgages, was raised. The question assumed Marminta was correct in its contention that it acquired that interest upon the transfer of the mortgages to it. Section 81(3) of the Land Title Act provides that a mortgage is discharged and the lot is released to the extent shown in the instrument of release, upon its registration. Some difficulty may sometimes attend the question whether the personal covenant to pay was discharged upon release. Much depends upon the terms of the release66. The parties appear to have conducted the proceedings upon the basis that the instrument operated only as a release of the security. The terms of Marminta's release are equivocal with respect to the mortgagors' obligations. On the view I have taken as to the outcome of the appeal it is not necessary to further consider this question. For present purposes it may be observed that Marminta's lack of expression of its intention, as to whether any obligation to pay was discharged, may be explained by its lack of any interest in that subject. The terms of the claim and cross-claim in these proceedings have tended to distract attention from the fundamental point that there was no agreement to assign the benefit of the loan agreements to Marminta. It is for that reason that it sought, impermissibly, to resort to s 62. It was not necessary for Mr French to raise the appellants' contention, that upon registration of the transfer of mortgage he ceased to be a creditor of QPM and the Beckinsales. Their counterclaim, for a declaration that all the rights of a mortgagee including those to recover moneys pursuant to the two loan agreements vested in Marminta, implies but does not expressly allege, that Mr French no longer had any rights under the loan agreements. Had there been such an allegation, attention would have focussed upon how it was said they came to be lost, given that there had been no assignment and no merger was alleged. The simple facts are that the debt sought to be recovered by Mr French arose under the loan agreements, not under the mortgages. Mr French was the assignee of the right to recover the moneys owing under the loan agreements; Marminta was not an assignee from him. He retained the right to sue for and recover those moneys from QPM and the Beckinsales. Section 62 of the Land Title Act did not operate to vest those rights in Marminta. During argument on the appeal the appellants sought to resile from a concession made that if s 62 was held not to apply, Mr French would also succeed to his claim under the loan agreements for moneys paid by way of rates 66 See for example Groongal Pastoral Co Ltd (in Liquidation) v Falkiner (1924) 35 CLR 157. and taxes. He may have a claim to them in any event, but it is not necessary to consider that question. The trial was conducted on the basis of the concession. The concession was given effect to in the judgment appealed from and the appellants should not now be permitted to withdraw it. The appeal should be dismissed with costs.

HIGH COURT OF AUSTRALIA ASSETINSURE PTY LIMITED (FORMERLY GERLING GLOBAL REINSURANCE COMPANY OF AUSTRALIA PTY LIMITED) APPELLANT AND NEW CAP REINSURANCE CORPORATION LIMITED (IN LIQUIDATION) & ORS RESPONDENTS AssetInsure Pty Limited v New Cap Reinsurance Corporation Limited (in liquidation) [2006] HCA 13 7 April 2006 ORDER Appeal allowed in part. Set aside order 3 of the Court of Appeal of the Supreme Court of New South Wales dated 6 October 2004 and, in its place, order that the second cross-appeal to that Court be dismissed. The parties have 21 days in which to file and serve written submissions regarding the appropriate orders for costs. On appeal from the Supreme Court of New South Wales Representation: R B S Macfarlan QC with S A Goodman for the appellant (instructed by Clayton Utz) B A J Coles QC with D A C Robertson for the first and second respondents (instructed by Henry Davis York) PricewaterhouseCoopers Legal) for the third respondent (instructed S D Epstein SC with N Manousaridis for the fourth respondent (instructed by Deacons) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS AssetInsure Pty Limited v New Cap Reinsurance Corporation Limited (in liquidation) Insurance – Statutory construction – Reinsurer entered into a voluntary winding up – Reinsurer underwrote part of a reinsurance contract in respect of risks occurring outside Australia – Reinsurance contract accepted in Australia and issued in Australia – Whether liabilities incurred by reinsurer are "liabilities in Australia" under s 116(3), Insurance Act 1973 (Cth) – Whether "liabilities in Australia" limited to liabilities under contracts of insurance that meet the criteria specified in s 31(4), Insurance Act 1973 (Cth) – Whether "liabilities in Australia" extended to liabilities under contracts of insurance where, according to common law principles of the conflict of laws, the situs of the liability is Australia. Corporations Law – Winding up – Whether s 562A, Corporations Act 2001 (Cth) applies to contracts of reinsurance made by reinsurer to reinsure against liabilities that it would have under contracts of reinsurance – Whether a contract of reinsurance is a "relevant contract of insurance" for the purposes of this section. Words and phrases – "liabilities in Australia", "relevant contract of insurance". Corporations Act 2001 (Cth), s 562A. Insurance Act 1973 (Cth), ss 31, 116. GLEESON CJ, HEYDON AND CRENNAN JJ. This Court is asked to decide two issues arising in the winding up of New Cap Reinsurance Corporation Limited ("NCRC"). Those issues, and the facts and legislation relevant to their determination, are set out in the joint reasons of Kirby and Hayne JJ. We will repeat them only to the extent necessary to explain our own reasons. The issues before this Court are narrower than the issues that arose before Windeyer J at first instance1 or before the Court of Appeal of New South Wales2. It is convenient to describe them as the Insurance Act issue and the Corporations Act issue. The Insurance Act issue When the winding up of NCRC commenced, s 116 of the Insurance Act 1973 (Cth) relevantly provided: In the winding up of a body corporate authorized under this Act to carry on insurance business, or in the winding up of a supervised body corporate, the assets in Australia of the body corporate shall not be applied in the discharge of its liabilities other than its liabilities in Australia unless it has no liabilities in Australia. Section 31 has effect for the purposes of this section." The provision referred to liabilities generally. It did not refer only to liabilities arising under a contract of insurance. Even a company that carries on no business other than a business of insurance will incur liabilities other than liabilities under contracts of insurance. It will incur liabilities for taxation, including federal income tax and various State taxes, it may owe debts to its bankers or other lenders, and almost certainly, in the ordinary course of its business, it will enter into a multiplicity of contracts in addition to contracts of insurance. The occupation of business premises and the employment of staff, which are typically the most basic requirements for the conduct of insurance business, will involve obligations that are not obligations under a contract of insurance. It appears to be common ground that the purpose and effect of s 116(3) was that the assets in Australia of a body corporate of the kind referred to were to be applied, in a winding up, first towards the discharge of what the provision 1 New Cap Reinsurance v Faraday Underwriting (2003) 177 FLR 52. 2 AssetInsure Pty Ltd (formerly Gerling Global Reinsurance Co of Australia Pty Ltd ) v New Cap Reinsurance Corpn Ltd (In Liq) (2004) 61 NSWLR 451. Crennan described as liabilities in Australia, and only if and when those liabilities were paid in full were such assets to be available to meet other liabilities3. If "liabilities in Australia", in s 116(3), referred only to liabilities under contracts of insurance, the result would be that, in the case of an Australian company carrying on insurance business in Australia, whether exclusively or as well as some other kind of business, in a winding up creditors other than creditors to whom the company had liabilities under a contract of insurance would receive nothing out of the Australian assets unless and until creditors under insurance contracts were paid in full. Creditors owed money under contracts entered into as a necessary incident of carrying on insurance business (such as landlords, employees, providers of goods and services, and bankers) would be postponed to creditors owed money under contracts of insurance. Such a conclusion extends beyond the contention of any party to this litigation, but it would be the necessary consequence of a construction of s 116(3) that limits "liabilities in Australia" to "liabilities in Australia arising under contracts of insurance". Far from being a conclusion in aid of equality of distribution of assets among creditors, in the ordinary case of an Australian company carrying on insurance business in Australia it appears to produce inexplicable inequality. If such a company, for the purpose of its insurance business, had a bank overdraft, why would the legislature intend to give policy holders priority over the bank (or the company's landlord, or its employees, or its providers of stationery)? If such a company, in addition to entering into contracts of insurance, accepted liabilities under bonds, or bills of exchange, or guarantees, why would not creditors under such arrangements rank equally with creditors under insurance contracts? involves APRA's scrutiny of assets and The reference in sub-s (4) to s 31 directs attention to Pt III of the Insurance Act, dealing with authority to carry on insurance business, and Pt IV, dealing with accounts. Authorization to carry on insurance business in Australia is controlled by the Australian Prudential Regulation Authority ("APRA"). The regulatory scheme liabilities. Corporations seeking to be given, or to retain, authorization to carry on insurance business in Australia may be foreign corporations or local corporations. They may carry on insurance business (defined in s 3 to mean the business of undertaking liability by way of insurance, including reinsurance) wholly in Australia, or in Australia and elsewhere. They may or may not carry on other kinds of business. As has already been noted, even if they only carry on insurance business they will undertake many forms of liability in addition to cf In re Federal Building Assurance Co Ltd (in liquidation) [1932] VLR 301 at Crennan liability by way of insurance, unless they operate entirely without staff, premises, or capital. In an electronic age, it is perhaps possible to imagine a foreign insurer carrying on business in Australia without incurring in Australia any liabilities other than liabilities under contracts of insurance, but Pt III (enacted in 1973) was intended to deal with the ordinary case as well as the extraordinary, and the most obvious case to which it applied was the case of an Australian company carrying on insurance business in Australia. NCRC was such a company. Sections 23, 24, 29 and 31, in Pt III, also dealt with liabilities generally, as well as liabilities under contracts of insurance. If it were otherwise, the prudential supervision exercised by APRA would have been severely restricted. If APRA were only concerned with an insurer's liabilities under contracts of insurance, then matters such as liabilities to taxation authorities, or to banks or other financiers, or noteholders, or persons indemnified under contracts other than contracts of insurance, would be beyond its purview. All such liabilities affect an insurer's solvency; an insurer is required to maintain solvency margins in respect of its assets and liabilities. In its submissions to Windeyer J, APRA said: "Section 116(3) applies to all liabilities ... [S]ection 31 of the Insurance Act, incorporated into section 116(3) by virtue of section 116(4), did not purport to be an exhaustive definition of liabilities. On its face, section 31 referred to all liabilities, or, at least, all liabilities in the accounts of the insurer. These would not normally be limited to insurance liabilities. Under the Insurance Act prior to the amendments effected by [the General Insurance Reform Act 2001 (Cth)], APRA had the right under section 31 to direct an insurer to include, in its account, a specified liability: see section 31(3). The crucial issue for APRA in making such a direction was whether or not the insurer's assets exceeded the value of its liabilities under section 29 of the Act with a view to ensuring that the insurer had the ability to meet its liabilities. APRA has power under section 52 of the Insurance Act if it appears to APRA that an insurer 'is, or is about to become, unable to meet its liabilities' and it may apply to the court under section 462 of the Corporations Act for an order that an insurer be wound up, if, inter alia, the insurer's liabilities exceed [its] assets: section 462(3)(b). The most common type of direction that APRA would have made under section 31 would have been in respect of the amount that should be included in the accounts of the insurer by way of provision for future Crennan claims. But the role of that section was not so limited. An insurer's liabilities to its general creditors, which could be associated companies, could directly affect the ability of an insurer to pay its claims. Those liabilities, of course, should be accurately reflected in the accounts." There is no reason to read "liabilities in Australia" anywhere in the Insurance Act as limited to liabilities undertaken under contracts of insurance, except where the text or context makes it clear that this was what was intended. The issue in this appeal arises because, in one sub-section of s 31, the Insurance Act dealt specifically with liabilities undertaken under contracts of insurance, and provided that in certain circumstances such liabilities were liabilities in Australia. The sub-section provided: "(4) For the purposes of this Part, where a liability is undertaken by a body corporate under: a contract of insurance (including reinsurance) made in Australia or in respect of which a proposal was accepted or a policy issued in Australia, not being a contract: that relates only to a liability contingent upon an event that can happen only outside Australia, not the body corporate has being a undertaken to satisfy in Australia; or liability that (ii) where the body corporate carries on insurance business both in and outside Australia, that relates only to a liability that the body corporate has undertaken to satisfy outside Australia; or a contract of insurance (including reinsurance) made outside Australia or in respect of which a proposal was accepted or a policy issued outside Australia where any part of the negotiations or arrangements leading to the making of the contract, to the acceptance of the proposal or to the issue of the policy took place or were made in Australia, being a contract: that relates to a liability contingent upon an event that can happen only in Australia; or (ii) where the body corporate carries on insurance business both in and outside Australia, that relates to a liability that the body corporate has undertaken to satisfy in Australia; Crennan that liability is a liability in Australia." The question with which we are concerned arises in the winding up of NCRC, a company incorporated in Australia, resident only in Australia, and carrying on business in Australia, and only in Australia, in the form of undertaking, in Australia, liability under contracts of reinsurance. Relevantly, NCRC agreed to underwrite part of a reinsurance contract which reinsured the third respondent, Faraday Underwriting Limited ("Faraday"), in respect of a risk involving events which could only have occurred at certain defined locations outside Australia. The proposal for the reinsurance was accepted by NCRC in Australia, and the policy was issued by NCRC in Australia. The issue was whether NCRC's liability to Faraday was a liability in Australia within s 116(3). Windeyer J, accepting the submissions of Faraday and APRA, said: "Are 'liabilities in Australia' under s 116(3) of the [Insurance Act] limited to insurance liabilities? The answer to this question is 'No'. First, s 116(4) refers to s 31 as having effect not s 31(4). Second, s 31 as it appears in Part III of the [Insurance Act] was relevant to the question of authority to carry on insurance business and to ensure that an authorised insurer was solvent. For that purpose all liabilities are taken into account. In the case of [NCRC] it seems that all creditors, whether insurance or not will therefore be treated equally as all liabilities will be situated in Australia. That of course would not have been the position had [NCRC] been a company with places of business other than in Australia." He went on to make directions in relation to s 116(3) which included the following: (b) Any provable claim of [Faraday] against [NCRC] under Facultative Reinsurance Contract in respect of AK Steel Corporation ('FC3A') for the 1997 and 1998 Underwriting Years is a 'liability in Australia' of [NCRC] for the purposes of section 116(3) of the Insurance Act 1973 (Cth)." Windeyer J's reasoning in support of the conclusion he expressed may be summarised as follows. Liability in respect of a chose in action is normally situated where the debtor resides. NCRC resides in Australia, and only in Crennan Australia. Referring to Haque v Haque [No 2]4 and Ex parte Coote5, he noted that if, in the present case, NCRC had carried on business outside Australia as well as in Australia, or if the contract of reinsurance had provided for the debt to be paid at some specified place outside Australia, the position at common law as to the location of the liability under the reinsurance contract might have required closer consideration. However, no such complications arose. Consequently, unless s 31(4) was an exclusive definition, for the purpose of s 116(3), of when a liability, or at least a liability under a contract of insurance, was a liability in Australia, a claim under contract FC3A, being a liability in Australia under general law, would be a liability in Australia for the purposes of s 116(3). He then said: "The next question is whether s 31(4) is an exclusive definition of liabilities in Australia. In the long run, it was not argued ... that it was, although [the] argument was advanced ... [that] it was exclusive for insurance liabilities. The sub-section is not a definition section. Its effect is to extend the range of liabilities in Australia beyond those which would exist under the rules of Private International Law." He then went on to formulate and answer the question in the manner set out above. The ground of appeal to the Court of Appeal was that Windeyer J erred in not holding that, for the purposes of s 116 of the Insurance Act, liabilities in Australia are exhaustively and exclusively defined by s 31(4) in so far as such liabilities arise under contracts of insurance. A majority of the Court of Appeal (Hodgson JA and Bryson JA) rejected the appellant's argument. Ipp JA agreed with it. The relevant ground of appeal to this Court is the same as the ground of appeal in the Court of Appeal. In the written and oral submissions of the appellant in this Court, the appellant's argument was in conformity with the ground of appeal. It was not contended, either before Windeyer J, or in the Court of Appeal, or in this Court, that in s 116(3) "liabilities in Australia" are confined to liabilities arising under contracts of insurance. The argument was that, in relation to liabilities under contracts of insurance (only), s 31(4) is an exhaustive and exclusive statement of (1965) 114 CLR 98 at 136. (1948) 49 SR (NSW) 179 at 184. Crennan the circumstances in which such liabilities are to be regarded as liabilities in Australia. That was the argument accepted by Ipp JA. therefore involves, at The appellant's argument the outset, an acknowledgment that s 31(4) is not an exhaustive and exclusive statement of the circumstances in which liabilities generally are liabilities in Australia. In that respect it acknowledges that, at least in relation to liabilities other than liabilities under contracts of insurance, the general law applies to determine the location of such liabilities. For all liabilities, it is necessary for the purposes of s 116(3) to decide whether they are liabilities in Australia. For liabilities other than liabilities under contracts of insurance the answer to the question requires consideration and application of the general law. The question becomes whether the purpose of s 31(4), and s 116(4), is to exclude the general law in relation to contracts of insurance, or to supplement it. The appellant advanced an alternative argument on the assumption that Windeyer J was otherwise correct, and that the general law may decide the location in Australia of an insurance liability for the purposes of s 116(3). This argument was put on a narrow basis. It was said that the evidence about contract FC3A was insufficient to support any finding as to the location of the liability because, for example, there may have been a number of conditions imported by the placing slip, and it is not known what they were. This argument must be rejected. The concurrent findings of Windeyer J and the majority of the Court of Appeal that, at general law, and apart from any operation of s 31(4), the liability under contract FC3A was a liability in Australia should not be disturbed. It becomes necessary, then, to consider the appellant's principal argument. Part III of the Insurance Act in s 29(1)(c) provided in effect that where a body corporate is authorized to carry on insurance business in Australia, whether or not it is incorporated in Australia, the authority is subject to a condition that the value of its assets in Australia should exceed the value of its liabilities in Australia by a certain margin. As APRA pointed out in its submissions to Windeyer J, and as has already been explained, those liabilities arise from obligations of many kinds, not limited to contracts of insurance. The margin is measured by integers that include provisions for insurance liabilities, but the company's solvency, that is to say, its capacity to meet its insurance liabilities, is affected by the extent of all its liabilities, which might include, for example, debts to related companies, or a debt to the Federal Commissioner of Taxation. It may be accepted that when s 29(1)(c)(iii) refers to "outstanding claims provision in respect of liabilities in Australia" it is referring to insurance liabilities; but the same does not follow for the overall comparison, required by s 29(1)(c), between assets in Australia and liabilities in Australia. A company's assets in Australia might exceed its insurance liabilities, including any necessary Crennan provision for outstanding claims, in Australia but its other liabilities in Australia might be such that it is facing insolvency. Because Pt III dealt with companies incorporated in Australia and companies incorporated elsewhere, and companies which enter into contracts of insurance in or out of Australia, it was evidently thought desirable to specify that in certain circumstances, and subject to certain qualifications, a liability under a contract of insurance would be a liability in Australia for the purposes of Pt III. What the legislation did not say was that in no other circumstances would a liability under a contract of insurance be a liability in Australia. It did not provide that it was only when an insurance liability satisfied the requirements of sub-s (4) that it would be a liability in Australia. In the present case, we are concerned with a liability undertaken in Australia, by an Australian company which carried on insurance business in Australia and carried on such business nowhere else. It entered into a contract of insurance (reinsurance) in Australia, which did not provide for satisfaction of any liability in a particular place. Apart from s 31(4), there would be nothing to cast any doubt upon a conclusion that the liability was a liability in Australia for the purposes of Pt III, and for the purposes of s 116(3). The circumstance that the risk against which reinsurance was being provided related to an event that would necessarily occur, if it occurred at all, outside Australia would not alter that conclusion. NCRC resided (only) in Australia; it was part of NCRC's (Australian) business to assume such a liability; it assumed the liability in Australia; and there is nothing in the evidence to suggest that it would be contemplated that NCRC would discharge the liability otherwise than by making a payment from its ordinary place of business in Australia. There having been no undertaking, or at least no express undertaking, by NCRC to satisfy the liability in Australia, then if Faraday had to rely upon s 31(4)(a)(i) to establish that the liability was a liability in Australia it would be unable to do so. Faraday argues, and argued successfully before Windeyer J and the Court of Appeal, that it does not need to rely on s 31(4)(a)(i). The liability, at general law, was clearly a liability in Australia. As has already been observed, s 31(4) provides that if certain qualified conditions are satisfied, a liability under a contract of insurance is a liability in Australia. It does not provide, or at least it does not expressly provide, that in no other circumstances will an insurance liability be a liability in Australia. This, it must be remembered, is in a context where, by hypothesis, a decision as to whether other liabilities are liabilities in Australia is to be made by applying the general law as to the location of a chose in action. Section 116(4) provides that s 31 (including s 31(4)) "has effect" for the purposes of s 116. That, however, simply raises the question of the effect that is to be given to s 31(4). Unless, by Crennan implication, it has the effect that no liability under a contract of insurance other than a liability satisfying the conditions of s 31(4) is to be treated as a liability in Australia then the appellant's argument fails. The appellant points to the elaborate scheme of s 31(4), imposing, and then qualifying, layers of conditions. This is the argument that appealed to Ipp JA. Yet the appellant can point to no express provision that makes s 31(4) an exhaustive and exclusive prescription of location to be applied to some types of liability (but not others), and relies upon implication. The circumstances of the present case illustrate the difficulty with the implication. The present is a relatively straightforward case of an Australian insurer undertaking, in Australia, a liability of a kind that, at general law, would be identified readily as a liability in Australia. Why would there be a legislative purpose to exclude such a liability from the class of liabilities in Australia either for the regulatory purposes of Pt III or the priority purposes of s 116? There are cases where a positive statement carries a negative implication6. This is not one of them. It may be noted that insurers authorized under the General Insurance Reform Act 2001 (Cth) (commencing 1 July 2002) are subject to a revised s 116 and a new s 116A which replaces and repeats the terms of s 31(4)(a) but not (b)7. As Windeyer J correctly concluded, the purpose of s 31(4) was to provide affirmatively, as it does, that certain insurance liabilities will be liabilities in Australia in certain cases where, at general law, there may be a different conclusion or at least uncertainty. This was done in a statutory context that contemplates authorization of foreign insurers or of Australian insurers that have foreign as well as local businesses. The utility of such a provision is evident. The argument for the appellant, however, seeks to press the provision beyond its language and its purpose. The decision of Windeyer J on this issue was correct. This part of the appeal should fail. In re Judiciary and Navigation Acts (1921) 29 CLR 257; Re Wakim; Ex parte McNally (1999) 198 CLR 511. 7 See Australia, House of Representatives, General Insurance Reform Bill 2001, Explanatory Memorandum at 34 [5.170] which states that s 116A was not intended to exclude liabilities "if, under common law, they would be an Australian ... liability". Crennan The Corporations Act issue The decision of Windeyer J on this issue, which was reversed by the Court of Appeal, was also correct. In this respect, we agree with the reasons of Kirby Orders The appeal should be allowed in part. Order 3 of the orders of the Court of Appeal of the Supreme Court of New South Wales should be set aside and in its place it should be ordered that the second cross-appeal be dismissed. This will restore the declarations and directions made by Windeyer J in relation to both of the issues before this Court. The parties should have 21 days in which (in the absence of agreement as to the appropriate order for costs) to file written submissions as to the appropriate orders for costs to be made in the light of the decision of this Court. Kirby Hayne KIRBY AND HAYNE JJ. New Cap Reinsurance Corporation Limited ("NCRC") was incorporated in Australia in October 1996. As its name suggests, it carried on business as a reinsurer. In April 1999, NCRC went into voluntary administration when it appointed an administrator pursuant to s 436A of the Corporations Law of New South Wales. It was, or was about to become, insolvent. In September 1999, the creditors of NCRC resolved, pursuant to s 439C of the Corporations Law, that the company be wound up. The effect of this resolution was that the company was deemed to have entered a creditors' voluntary winding up. A number of issues arose in the winding up of NCRC. Two are now relevant. The first concerns provisions of the Insurance Act 1973 (Cth), as that Act stood at the time the winding up of NCRC commenced; the second concerns the operation of s 562A of the Corporations Act 2001 (Cth), a provision engaged in the present matter through the operation of s 1401 of the Corporations Act creating new rights and liabilities equivalent to those that were created under the relevant (and identical) provisions of the Corporations Law. The first issue concerns a provision of the Insurance Act that, in the winding up of a body corporate authorised under that Act to carry on insurance business, "the assets in Australia of the body corporate shall not be applied in the discharge of its liabilities other than its liabilities in Australia unless it has no The second issue concerns provisions of the liabilities in Australia". Corporations Act regulating the proof and ranking of claims in a winding up and, in particular, the provision which deals with the application of proceeds of contracts of reinsurance, s 562A. In this Court, both issues were argued by reference to one contract of reinsurance referred to as "contract FC3A". By that contract, NCRC agreed to underwrite part of a reinsurance contract reinsuring "various Lloyd's and/or London Companies" (including the third respondent, Faraday Underwriting Limited – "Faraday") in respect of the risk of direct physical loss or damage, including boiler explosion and machinery breakdown, and in which the insured was AK Steel Corporation (and its affiliated, subsidiary, and associated companies). The situation of the risk was described as: "Various Locations – United States of America, The District of Columbia, Canada, Puerto Rico and The Virgin Islands and/or as original". NCRC accepted the proposal for the contract in Australia. The events insured against could happen only outside Australia. In the courts below, the issues were also argued by reference to another contract of reinsurance, referred to as contract TY165A. That contract was not in issue in the appeal to this Court and need not be considered further. Proceedings were brought in the Supreme Court of New South Wales to resolve the two issues that arise in this Court, as well as other issues that had arisen in the winding up of NCRC. Those proceedings were brought by the Kirby Hayne liquidator of NCRC to seek not only directions about the questions that had arisen in the winding up8 but also declaratory relief. The declarations that were sought included declarations concerning the entitlement of the third respondent (Faraday) to have its claim in respect of contract FC3A dealt with as a "liability in Australia" under s 116 of the Insurance Act and declarations concerning the application of s 562A of the Corporations Act to receipts by the liquidator of NCRC from contracts of reinsurance or retrocession9 effected by NCRC in respect of contracts of reinsurance between NCRC and, among others, the appellant and Faraday. Because declarations were made at first instance, no question arises in these proceedings about the availability of processes of appeal when a liquidator seeks and obtains directions of a court. At first instance, Windeyer J held10 that "liabilities in Australia" were not confined to liabilities of the kinds specified in s 31(4) of the Insurance Act. On appeal to the Court of Appeal of New South Wales, that Court also held (Hodgson and Bryson JJA, Ipp JA dissenting)11 that s 31(4) was not an exhaustive statement of what is a body corporate's liabilities in Australia. At first instance Windeyer J held12 that in s 562A of the Corporations Act a contract of reinsurance extends to reinsurance of a contract of reinsurance. On appeal to the Court of Appeal, all members of the Court13 held to the contrary. Ipp JA, with whose reasons in this respect the other members of the Court agreed, held14 that "the legislature intended by s 562A to benefit only ordinary insureds, that is insureds other than reinsured insurance companies". By special leave, AssetInsure Pty Limited ("AssetInsure") appeals to this Court. AssetInsure had been insured by NCRC under a policy of reinsurance 8 Corporations Act 2001 (Cth), ss 477(6) and 506(1)(b). 9 A term commonly used for contracts of insurance or reinsurance of reinsurance. 10 New Cap Reinsurance v Faraday Underwriting (2003) 177 FLR 52 at 69 [33]. 11 AssetInsure Pty Ltd v New Cap Reinsurance Corpn Ltd (In Liq) (2004) 61 NSWLR 451 at 460 [16] per Hodgson JA, 479 [141] per Ipp JA, 497 [236] per Bryson JA. 12 (2003) 177 FLR 52 at 74 [47]. 13 (2004) 61 NSWLR 451 at 462 [36] per Hodgson JA, 495 [229]-[230] per Ipp JA, 497 [235] per Bryson JA. 14 (2004) 61 NSWLR 451 at 495 [230]. Kirby Hayne which, it was accepted15, created a liability in Australia. It was in its interests that a narrow construction be given to the class of creditors whose claims are held to be liabilities of NCRC in Australia. Because AssetInsure had made contracts of reinsurance with NCRC which NCRC had reinsured, it was in AssetInsure's interests to contend that s 562A of the Corporations Act applied to require the liquidator to hold sums paid under retrocession arrangements (arrangements for the reinsurance of reinsurance contracts) for the party insured by NCRC under its agreement to reinsure that party. Because the two principal issues that arise in the appeal to this Court are discrete, it will be convenient to deal first with the questions that arise under the Insurance Act and to begin by examining the relevant provisions. The Insurance Act Since NCRC went into liquidation, substantial amendments have been made to the Insurance Act, in particular by the General Insurance Reform Act 2001 (Cth). The General Insurance Reform Act made great changes to the law governing the prudential supervision of general insurers and made some changes to s 116 of the Insurance Act. In the courts below there was a lively issue about whether these new provisions applied in this case. In this Court it was not submitted that the new provisions applied to NCRC or affected the resolution of the particular questions that are to be decided. The approach of the parties should be accepted. At the time NCRC went into liquidation, s 116 of the Insurance Act provided: If a body corporate that is authorised under this Act to carry on insurance business is begun to be wound up: the body must not carry on insurance business after the date of commencement of the winding up; and (b) APRA[16] must cause to be published in the Gazette a notice stating that, because of the commencement of the winding up, the body is no longer permitted to carry on insurance business. 15 (2003) 177 FLR 52 at 56 [12]. 16 The Australian Prudential Regulation Authority established by s 7 of the Australian Prudential Regulation Authority Act 1998 (Cth). Kirby Hayne (2) A body corporate is not guilty of a contravention of subsection (1) by reason only that it is carrying on business for the purpose of discharging the date of commencement of the winding up. liabilities assumed by it before In the winding up of a body corporate authorized under this Act to carry on insurance business, or in the winding up of a supervised body corporate, the assets in Australia of the body corporate shall not be applied in the discharge of its liabilities other than its liabilities in Australia unless it has no liabilities in Australia. Section 31 has effect for the purposes of this section. (5) Nothing in this section affects the validity of a contract entered into by a body corporate after it is commenced to be wound up. This section has effect and shall be complied with notwithstanding anything in any law of a State or Territory." The central question about the operation of this provision, and s 116(3) in particular, is what are "its [NCRC's] liabilities in Australia"? Was NCRC's liability under contract FC3A one of its "liabilities in Australia"? Because s 31 of the Insurance Act "has effect for the purposes" of s 116, the provisions of s 31 concerning liabilities of a body corporate authorised under the Act to carry on insurance business are of critical importance in resolving those questions. It will be necessary to pay close attention to s 31 of the Insurance Act and what it said about the liabilities of a body corporate. But before doing that, it is important to place both that section and s 116 in their full statutory context. Consideration of that context will reveal that the focus of the Insurance Act was the regulation of the Australian insurance activities of bodies corporate (wherever incorporated) that were authorised under the Act to conduct insurance businesses. As is implicit from the reference in s 116 to "a body corporate authorized under this Act to carry on insurance business" and "a supervised body corporate", the Insurance Act regulated who may carry on insurance business in Australia. For present purposes, the reference to "supervised body corporate" may be put to one side. (At the risk of undue abbreviation, supervised bodies corporate may be understood as referring to certain bodies corporate that were connected with bodies corporate authorised under the Act to carry on insurance business17.) 17 Insurance Act 1973 (Cth), Pt IVA (ss 49A-49P). Kirby Hayne A body corporate was forbidden to carry on insurance business without being authorised under the Act to do so18. It is not necessary to examine what was meant by "insurance business"19 or to explore what, if any, territorial limitation was to be given to the general prohibition. Part III of the Act (ss 21-38) regulated the grant of authority to carry on insurance business. An authority to commence carrying on insurance business might not be granted unless the relevant regulatory body – the Australian Prudential Regulation Authority, "APRA" – was satisfied that the body corporate met certain conditions. Those conditions included conditions that, where the body corporate was incorporated in Australia, the value of the assets of the body corporate exceeded the amount of its liabilities by not less than a stated amount20 and, no matter where the body corporate was incorporated, "the value of the assets in Australia of the body corporate exceed[ed] the amount of its liabilities in Australia by not less than" the same money sum21. The separate treatment of bodies corporate authorised to carry on insurance business in Australia, according to whether the body was incorporated in Australia or not, is important. If the body corporate was not incorporated in Australia, its application for authority to carry on insurance business had to specify22 whether it carried on any business of insurance in a place outside Australia and, if so, whether it was complying in all respects with "the law of that place relating to the carrying on of that business" and had so complied during the preceding five years. Section 114 required a body corporate authorised to carry on insurance business in Australia, that carried on any business of insurance elsewhere, to inform APRA forthwith if its right to carry on that business ceased, or was limited or affected. The evident assumption of the Act was that the regulation of the activities outside Australia of non-Australian bodies corporate (whether insurance or other activities) was a matter for other regulatory regimes. What the Insurance Act focused upon in the case of non-Australian incorporated bodies was their conduct of Australian insurance business. For Australian incorporated bodies the focus was wider and extended to the whole of the business activities of such bodies. 19 A term then defined in s 3 of the Insurance Act. 20 s 23(b). 21 s 23(c). 22 s 22(2)(k)(i). Kirby Hayne An authority granted to a body corporate to carry on insurance business in Australia was subject to certain conditions specified in the Act. In the case of a body corporate incorporated in Australia, the value of its assets was at all times to exceed the amount of its liabilities by not less than the greatest of three measures specified in the Act23: a fixed money sum ($2 million), a proportion (20 per cent) of its premium income, and a proportion (15 per cent) of "its outstanding claims provision as at the end of its last preceding financial year". All authorised bodies corporate (wherever incorporated) had to meet a further condition that the value of the assets in Australia of the body corporate exceeded the amount of its liabilities in Australia by not less than the greatest of three measures24. The first of those measures was again $2 million. The second and third measures differed from the measures fixed as applying only to Australian incorporated bodies. Those two other measures were, first, that the value of the assets in Australia exceeded the amount of its liabilities in Australia by not less than 20 per cent of its premium income in Australia for its last preceding financial year and, second, that the value of its assets in Australia exceeded the amount of its liabilities in Australia by not less than 15 per cent of its outstanding claims provision in respect of liabilities in Australia at the end of that last preceding financial year. Thus, an Australian incorporated body corporate, carrying on insurance business in Australia, had to meet two conditions: one requiring comparison between the value of all of its assets and the amount of all of its liabilities, and one requiring comparison between the value of its assets in Australia and the amount of its liabilities in Australia. Sections 30 and 31 of the Act dealt with what was meant by "assets" and "liabilities" in Pt III of the Insurance Act and thus with what was meant by that have been described. the conditions "assets" and "liabilities" Section 31(4) provided that, for the purposes of Pt III of the Insurance Act, where a liability is undertaken by a body corporate under certain contracts of insurance "that liability is a liability in Australia". Are liabilities undertaken under contracts of the kind specified in that provision the only kinds of liability to which s 116(3) refers, when it provides that the assets in Australia of a body corporate shall not be applied in the winding up of that body corporate in the discharge of its liabilities "other than its liabilities in Australia" unless it has no liabilities in Australia? The question which most immediately arises in this aspect of the matter is what meaning is to be given to the expression "its liabilities in Australia" in s 116. That section provided for priority of access to the assets in Australia of 23 s 29(1)(b). 24 s 29(1)(c). Kirby Hayne the body corporate that is being wound up for liabilities that meet the description "its liabilities in Australia". It is, nonetheless, important to begin consideration of the meaning of that expression by examining the way in which it was used in the provisions of Pt III of the Insurance Act regulating authority to carry on insurance business. In particular, it is necessary to look at its meaning when it was used in specifying the conditions upon which an authority to carry on insurance business in Australia is granted. During the course of oral argument of the appeal to this Court it was convenient to refer to the conditions identified in s 29(1)(a), (b) and (c) of the Insurance Act as "capital adequacy" conditions. That description is accurate, as far as it goes. It would be wrong, however, to argue from that general description of the purpose for which those conditions were prescribed to any understanding of the meaning of "liabilities in Australia", without paying close attention to the way in which that expression was used in s 29. In that respect, it is necessary to bear steadily in mind that the condition identified in s 29(1)(c), and in particular the third of the financial criteria that must be considered, is not a condition that hinged about the amount of the relevant body corporate's liabilities in Australia. The criterion specified in s 29(1)(c)(iii) was a proportion of the body corporate's "outstanding claims provision" in respect of liabilities in Australia. It was the outstanding claims provision that was the hinge about which the condition turned. Of course the amount derived as a proportion of the outstanding claims provision was then to be compared with the amount of the difference between the value of the assets in Australia of the body corporate and the amount of its liabilities in Australia. But what was to be compared with that difference was a proportion of the amount of a provision – an outstanding claims provision in respect of liabilities in Australia. What is meant by the expression "outstanding claims provision" is to be understood by reference to the provisions of Pt IV of the Act (ss 39-49) concerning accounts. A body corporate authorised under the Act to carry on insurance business was bound to keep such accounting records "as correctly record and explain the transactions and financial position of the body corporate" with respect to its insurance business and other business carried on by it in Australia and, where the body corporate was incorporated in Australia, any business of insurance and all other business carried on by it outside Australia25. Any body corporate authorised under the Act (no matter where it was incorporated) that carried on insurance business in Australia and also carried on any business of insurance outside Australia, any life insurance business, any other business in Australia other than life insurance business, or any other business outside Australia, was required to apportion its receipts and its 25 s 40(1)(a). Kirby Hayne payments between, on the one hand, insurance business carried on in Australia and, on the other, the other business or businesses it conducted26. And if a body corporate carried on more than one class of insurance business and amounts were received or paid in respect of more than one class of insurance business it was required to apportion or allocate those receipts and payments between the classes of insurance business27. Thus all bodies corporate authorised to carry on insurance business in Australia which in fact carried on that business were bound to maintain accounts separating receipts and payments between those relating to insurance business and those that did not, and apportioning receipts and payments from insurance business between the separate classes of insurance business that it conducted. What emerges from these accounting provisions, when coupled with the references in s 29(1)(b) and (c) to outstanding claims provisions, is that the provisions to be taken into account under s 29(1)(c) are the provisions made in the body corporate's accounts with respect to its Australian insurance business. The Act's emphasis on insurance business, and on Australian insurance business in particular, is reinforced by several other aspects of the legislation. Section 32 of the Insurance Act identified what was meant by a reference to the premium income of a body corporate and by a reference to the premium income in Australia of a body corporate. Sub-section (2) of that section provided that the latter expression ("premium income in Australia") "is a reference to the amount that is the amount of premiums for insurance business received by or due to the body corporate … in respect of the undertaking by the body corporate of liabilities that are liabilities in Australia" less the sum of amounts specified in s 32(2)(a) to (f). In that context the reference to liabilities and to liabilities in Australia was plainly a reference only to insurance liabilities as distinct from liabilities on other accounts. Section 31(1) of the Insurance Act provided that in Pt III of the Act, unless the contrary intention appeared, a reference to liabilities of a body corporate included a reference to provision for liabilities made in its accounts. Two forms of liability were specifically excluded – first, a liability in respect of share capital and, secondly, where the body corporate was registered under the Life Insurance Act 1995 (Cth), liabilities referable to a class of life insurance business carried on by the body corporate in respect of which it had established a statutory fund under that Act or that were charged on any of the assets of such a statutory fund. Section 31(2) obliged a body corporate carrying on insurance Kirby Hayne business to make in its accounts provision in respect of liabilities. The liabilities for which provision was to be made were not specified otherwise than by the particular exclusions made in s 31(1) of liability in respect of share capital and the particular kinds of life insurance liability there mentioned. Section 31(4) is the provision to which closest attention was directed in argument both on appeal to this Court and in the courts below. It provided: "For the purposes of this Part, where a liability is undertaken by a body corporate under: a contract of insurance (including reinsurance) made in Australia or in respect of which a proposal was accepted or a policy issued in Australia, not being a contract: that relates only to a liability contingent upon an event that can happen only outside Australia, not being a liability that the body corporate has undertaken to satisfy in Australia; or (ii) where the body corporate carries on insurance business both in and outside Australia, that relates only to a liability that the body corporate has undertaken to satisfy outside Australia; or a contract of insurance (including reinsurance) made outside Australia or in respect of which a proposal was accepted or a policy issued outside Australia where any part of the negotiations or arrangements leading to the making of the contract, to the acceptance of the proposal or to the issue of the policy took place or were made in Australia, being a contract: that relates to a liability contingent upon an event that can happen only in Australia; or (ii) where the body corporate carries on insurance business both in and outside Australia, that relates to a liability that the body corporate has undertaken to satisfy in Australia; that liability is a liability in Australia." It is important to notice the structure of the provision. It provided that "where a liability is undertaken by a body corporate under [certain contracts of insurance] that liability is a liability in Australia". The kinds of contract that are specified might be shortly, if not completely, described as contracts made in conducting insurance business in Australia. The kinds of contract specified in s 31(4)(a) were contracts of insurance made in Australia and contracts in respect Kirby Hayne of which a proposal was accepted or a policy issued in Australia. Some exceptions were then grafted onto that general provision by the provisions made in sub-pars (i) and (ii) of s 34(1)(a). The kinds of contract with which par (b) dealt were contracts of insurance made outside Australia or in respect of which a proposal was accepted or a policy issued outside Australia, where any part of the negotiations or arrangements leading to the making of the contract, to the acceptance of the proposal or to the issue of the policy took place or were made in Australia, so long as the contract had one or other of the characteristics identified in sub-pars (i) and (ii), namely, that the contract related to a liability contingent upon an event that could happen only in Australia or, where the body corporate carried on insurance business both in and outside Australia, that related to a liability that the body corporate had undertaken to satisfy in Australia. The central focus of argument in the courts below and in the appeal to this Court was whether a liability undertaken by NCRC under a contract of insurance which does not meet the criteria specified in either par (a) or (b) of s 31(4) is nonetheless a liability of NCRC in Australia. As with any question of statutory construction, it is first necessary to consider the relevant text. No party submitted that the relevant text was unambiguously clear. The central field for debate was seen to be whether "liabilities in Australia" extended to liabilities undertaken by a body corporate under a contract of insurance where, according to common law principles of conflict of laws, the situs of the liability is Australia. For present purposes, the common law principles of conflict of laws locating a liability can be assumed to be sufficiently summarised as follows. A debt is generally situated where the debtor resides28. If a debtor has two or more places of residence and the creditor stipulates for payment at one of those places, the debt will be situated there29. If a debtor has more than one place of residence, but there is no express or implied promise to pay at one of them, the debt will be situated where it would be paid in the ordinary course of business30. Some aspects of these rules may be open to debate but it is not necessary to resolve any question of that kind. The central and determinative reason to reject the contention that liabilities in Australia include any liability the situs of which, according to common law principles of conflict of laws, is Australia, is the disconformity between those rules and the express provisions of s 31(4). That disconformity is 28 Dicey and Morris, The Conflict of Laws, 13th ed (2000), vol 2 at 925. 29 Dicey and Morris, The Conflict of Laws, 13th ed (2000), vol 2 at 926. 30 Dicey and Morris, The Conflict of Laws, 13th ed (2000), vol 2 at 926-927. Kirby Hayne well illustrated by considering contract FC3A. Contract FC3A was made in Australia. NCRC was incorporated in Australia and resident only in Australia. The contract made no express provision about where payments were to be made. If any stipulation about place of payment were to be implied, the place of payment would be Australia. Common law conflict of law principles would locate the liability undertaken by NCRC in Australia31. But s 31(4)(a)(i) would exclude contract FC3A from what "is" a liability in Australia. The contract related to a liability contingent upon an event that could happen only outside Australia. thus bringing Faraday sought to meet this difficulty by submitting that the contract was to be understood as creating "a liability that [NCRC had] undertaken to satisfy in the concluding words of the contract within Australia", s 31(4)(a)(i). Faraday sought, in this respect, to contend that there was a settled practice in the industry that required NCRC to satisfy the liability in Australia. It is not necessary to explore whether the evidence at first instance established an industry practice that was uniform, notorious, reasonable and certain32. No finding to that effect was made at first instance or in the Court of Appeal33. Be this as it may, for present purposes the critical point is that, reading s 31(4) as a whole, it is apparent that the references in pars (a)(i) and (ii) and (b)(ii) to a liability that the body corporate "has undertaken to satisfy" in or outside Australia are to be read as referring to express undertakings stipulating the place of payment. The word "undertaken" in this context does not include what might be implied in the contract about the place at which payment is to be made. What then follows is that if the common law principles to determine the situs of debts are to be applied in deciding what are liabilities in Australia, some liabilities expressly excluded by s 34(1) in its statement of what "is" a liability in Australia would be classified as liabilities in Australia. That construction of the Act should not be adopted. Three further sets of considerations reinforce the conclusion that "liability in Australia" should be understood as confined to liabilities under contracts of insurance that meet the criteria specified in s 31(4). Those considerations stem 31 Haque v Haque [No 2] (1965) 114 CLR 98 at 137; F & K Jabbour v Custodian of Israeli Absentee Property [1954] 1 WLR 139 at 145-146; [1954] 1 All ER 145 at 151-152; Dicey and Morris, The Conflict of Laws, 13th ed (2000), vol 2 at 926-927. 32 Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226 at 236. 33 (2004) 61 NSWLR 451 at 485 [185] per Ipp JA. Kirby Hayne from the text of the Act, from the place that the concept of "liability in Australia" has in Pt III of the Act, and from the place that that expression has in the winding up provisions made by s 116. The use of the expression "where a liability is undertaken by a body corporate under [certain contracts] that liability is a liability in Australia" may be contrasted with s 31(1) where a reference to liabilities "includes" a reference to provision for liabilities. That contrast, between what is a liability in Australia and what a reference to liabilities includes, suggests that s 31(4) is to be understood as exhausting the description or definition of what is a liability in Australia. That view of the matter is reinforced by the reference in s 30(5AA)(b) to "claims in respect of liabilities to which subsection 31(4) applies". The several textual matters mentioned earlier in these reasons point in the same direction. The way in which the expression "liabilities in Australia" is used in s 32, in connection with identifying premium income in Australia, the requirements in the accounting provisions of Pt IV to treat transactions relating to insurance activities in Australia separate from other transactions, the Act's focus upon the Australian activities of bodies incorporated outside Australia, all suggest that the expression "liabilities in Australia" is to be understood (a) as confined to insurance liabilities and (b) as confined to those liabilities identified in s 31(4). Taking the first of these steps is confirmed when regard is had to the use that is made of the expression "liabilities in Australia" in s 29(1)(c)(iii). Treating liabilities in Australia as the relevant subject for an "outstanding claims provision" is consistent only with the liabilities in question being liabilities under insurance contracts. And once that step is taken (of recognising that "liabilities in Australia" does not refer to any and every kind of liability that a body corporate may have but, rather, refers only to liabilities arising under contracts of insurance) the second step of reading "liabilities in Australia" as confined to those liabilities that are identified in s 31(4) is a step that is required by the use of the expression in the winding up provisions of the Act for the purpose of conferring a priority in respect of such liabilities. That second step is required for two reasons: one negative, one positive. The negative reason is that nothing in Pt III of the Insurance Act requires a more expansive reading of the expression "liabilities in Australia". The positive reason is that a provision conferring priority on one class of creditors in a winding up over other classes of creditors should not be read broadly. Only if a priori assumptions are made about what would be desirable measures of capital adequacy for foreign insurance companies carrying on business in Australia other than insurance business is there any reason to read "liabilities in Australia", when used in the provisions of Pt III of the Act and s 29(1)(c) in particular, as extending beyond insurance liabilities. And if it were to be assumed that it would be desirable for the Act to be read as requiring the Kirby Hayne testing of the financial health of a foreign incorporated body authorised to carry on business in Australia by reference to all of its assets and liabilities, no matter what the business to which they relate, there would be no point served by the Act providing, as it did in s 29(1)(b), for such a measure to be applied to Australian incorporated bodies but not to foreign incorporated bodies. Once it is accepted, as it must be, that the Act made separate provision for foreign incorporated bodies from those made for Australian incorporated bodies it is necessary to understand incorporated bodies by considering the effect of the alternative constructions that are urged. the provision applicable to foreign If "liabilities in Australia" include all liabilities on any account whatever, so long as, according to common law principles of the conflict of laws, the liability is located in Australia, the specific exclusion of some contracts made in s 31(4) was inapposite and to at least a considerable extent the provision made by s 31(4) was unnecessary. Two examples suffice to make good those points. It is to be recalled that s 29(1)(c) applied to all bodies corporate having authority to conduct insurance business in Australia, no matter where the body was incorporated. In the case of an Australian incorporated body carrying on insurance business in Australia, it would be regarded as resident in Australia for the purposes of the common law conflict of law rules34. It would follow that, by those rules, at least those liabilities where no express stipulation was made for satisfaction of the liability elsewhere than Australia, and perhaps every liability undertaken by an Australian incorporated body, would be a liability in Australia. In particular, liabilities expressly excluded from the reach of s 31(4), such as a liability under a contract made in Australia but contingent upon an event that could happen only outside Australia and where the place of payment was not stipulated to be Australia, would, despite the provisions of s 31(4)(a)(i), be a liability in Australia. And in the case of a body corporate not incorporated in Australia but carrying on business and thus resident here, a contract wholly negotiated in Australia and stipulating for payment here would be a liability in Australia regardless of whether s 31(4) appeared in the Act. When, then, it is seen that s 116(3) gives liabilities in Australia prior access to the assets in Australia in the winding up of a body corporate authorised under the Insurance Act to carry on insurance business, the case for reading "liabilities in Australia" as confined to those specified in s 31(4) is irresistible. The winding up of bodies corporate (whether authorised under the Insurance Act 34 Haque v Haque [No 2] (1965) 114 CLR 98 at 137; F & K Jabbour v Custodian of Israeli Absentee Property [1954] 1 WLR 139 at 145-146; [1954] 1 All ER 145 at Kirby Hayne to carry on insurance business or not) was, and is, primarily regulated otherwise than under the Insurance Act. When NCRC went into liquidation, the relevant provisions were found in the Corporations Law of New South Wales35. Since 2001 the relevant provisions are to be found in federal legislation – the Corporations Act. Section 116(3) departs from the principle of equality of treatment of creditors of equal degree which is found not only in the Corporations Act but also in all of its statutory predecessors. Moreover, because the winding up provisions in the Corporations Act are not (and were not in its statutory predecessors) confined to the winding up of corporations incorporated according to the laws of the enacting legislature, s 116(3) applied not only to the winding up of Australian incorporated bodies but also to the Australian winding up of foreign incorporated bodies. Cross-border insolvency has been the subject of much debate in recent years. It has generated international agreement on a model law36 and more local consideration of national implementation of international agreements37. Neither international agreements nor proposals for national implementation bear directly upon the questions that arise in this litigation. But the problems that lie behind the making of the agreements and the making of the proposal for national implementation do. What seems to have been the ultimate legislative progenitor of s 116(3) of the Insurance Act (s 11 of the Life Assurance Companies Act 1873 (Vic)38) was 35 As to the operation of the State corporations legislation at that time see Re Wakim; Ex parte McNally (1999) 198 CLR 511; Byrnes v The Queen (1999) 199 CLR 1; Residual Assco Group Ltd v Spalvins (2000) 202 CLR 629 and Re Macks; Ex parte Saint (2000) 204 CLR 158. 36 UNCITRAL Model Law on Cross-Border Insolvency, (1997). 37 "Cross-Border and coordination", Australia, Corporate Law Economic Reform Program; Proposals for Reform: Paper No 8, (2002). Insolvency – Promoting international cooperation 38 "Every company whose head office or principal place of business is not in Victoria shall keep a separate account of all the business transacted in Victoria and of the entire assets of the company in Victoria, whether registered as secured assets or not, and in the event of the company becoming bankrupt or insolvent or being ordered to be wound up the entire assets of the company in Victoria shall be applied so far as the same will extend in or towards satisfaction of the liabilities of the company in Victoria, and no part of such assets shall be applied in payment of any liabilities of the company incurred elsewhere than in Victoria until the whole of the liabilities incurred in Victoria shall be paid in full. If any such company be adjudged bankrupt or insolvent or be ordered to be wound up elsewhere than in (Footnote continues on next page) Kirby Hayne enacted to meet the case of the liquidator of a foreign incorporated company that transacted business locally repatriating the local assets of the company to meet liabilities incurred elsewhere. Although, even then, the winding up elsewhere of a foreign company carrying on business locally was a ground to wind up the company under the local corporations laws39, a liquidator appointed under the laws of the place of the company's incorporation would be regarded, under Australian conflict of laws rules, as entitled to speak for the company and thus demand the transfer of its local assets into the custody or control of that liquidator40. And if a local winding up was commenced, and a local liquidator was appointed, absent a provision like s 116(3) of the Insurance Act, there was no statutory provision, and little or no decided case law, that would resolve any competition between the local liquidator and a foreign liquidator about either custody of assets or their application. Against this background there is every reason to read s 116(3) as providing a rule for prior treatment of certain creditors that is both clear and not overly broad. Reading "liabilities in Australia" as confined to liabilities under those insurance contracts specified in s 31(4), rather than a wider, less definite class of creditors determined by the application of common law rules as to situs of liabilities, conduces to both certainty and narrowing of the preferred class. We accept that the contrary conclusion is arguable, as indeed are most disputed questions of statutory interpretation by the time they reach this Court41. The strongest argument to the contrary derives from the fact that s 31(4) of the Insurance Act is not expressed in terms that show an unmistakable purpose to provide a universal and exclusive definition of "liability in Australia". However, the preferable conclusion is that now stated. It is consistent with the emphatic language of the sub-section. The contrary interpretation is difficult to reconcile Victoria then the same company so far only as regards its assets and liabilities in Victoria may upon the application of one or more policy holders or shareholders be ordered to be wound up in Victoria in like manner as if such company were registered under 'The Companies Statute 1864,' and proof of such company having been so adjudged bankrupt or insolvent or ordered to be wound up shall be conclusive evidence that it is unable to pay its debts." 39 Life Assurance Companies Act 1873 (Vic), s 11. 40 Hoffmann, "Cross-Border Insolvency: A British Perspective", (1996) 64 Fordham Law Review 2507 at 2510; Dicey and Morris, The Conflict of Laws, 13th ed (2000), vol 2 at 1141. 41 News Ltd v South Sydney District Rugby League Football Club Ltd (2003) 215 CLR 563 at 580 [42]. Kirby Hayne with the surrounding statutory provisions and the apparent policy of the sub-section, viewed in context. Moreover, the preferred interpretation is more consistent with the general policy of the Act, and of the law, to confine the class of preferred creditors to cases clearly spelt out by the Parliament. If a broader class of "liability in Australia" is intended than that expressly stated in s 31(4) of the Insurance Act, it would be open to the Parliament, in the foreshadowed review of the provisions, to enlarge the class by clear enactment. Given the international implications, such an enlargement is disputable. It merits express enactment rather than judicial expansion of an ambiguous provision. For all these reasons contract FC3A is not one of NCRC's liabilities in Australia. Corporations Act, s 562A The second issue raised in the appeal concerns the operation of s 562A of the Corporations Act. As noted at the outset of these reasons, that provision is engaged in this matter, rather than any provision of the (now repealed) Corporations Law of New South Wales, because s 1401 of the Corporations Act creates equivalent rights and liabilities to those that existed before the commencement of the 2001 federal Act under provisions of the Corporations Law that were repealed upon the 2001 federal Act coming into force. The question that arises in this appeal is whether s 562A applies to contracts of reinsurance made by NCRC to reinsure against liabilities that NCRC would have under contracts of reinsurance that it had made. Section 562A(1) provides that: "This section applies where: a company is insured, under a contract of reinsurance entered into before the relevant date, against liability to pay amounts in respect of a relevant contract of insurance or relevant contracts of insurance; and an amount in respect of that liability has been or is received by the company or the liquidator under the contract of reinsurance." Is a contract of reinsurance a "relevant contract of insurance"? Section 562A(8) provides that "relevant contract of insurance" means "a contract of insurance entered into by the company, as insurer, before the relevant date". The "relevant date" (an expression used in both s 562A(1) and s 562A(8)) is defined42 as "the Kirby Hayne day on which the winding up is taken because of Division 1A of Part 5.6 to have begun". Section 562A, and the other provision to which close attention must be paid in understanding the meaning and effect of s 562A, namely, s 562, are both found in subdiv D of Div 6 of Pt 5.6 of the Corporations Act. Subdivision D deals with priorities in the proof and ranking of claims in a winding up. The first provision in subdiv D of Div 6 of Pt 5.6, s 555, provides that: "[e]xcept as otherwise provided by this Act, all debts and claims proved in a winding up rank equally and, if the property of the company is insufficient to meet them in full, they must be paid proportionately". Sections 562 and 562A make other provisions. In order to answer the question that is presented about the operation of s 562A it is necessary to place that provision in its legislative and historical context. Absent statutory provision to the contrary, a third party having a claim against a company, where the company was insured against the risk of such claims, would not be entitled on the winding up of the company to the benefit of sums paid by the insurer under the insurance policy indemnifying the company against the claim made by the third party. The sums paid by the insurer would form part of the assets of the company available for distribution among its general creditors, of whom the third party whose claim led to the insurer making the payment to the company would be but one, ranking equally with other unsecured creditors. When this problem was first revealed, by the decision in In re Harrington Motor Co Ltd; Ex parte Chaplin43, legislation was enacted to produce a different result. The Third Parties (Rights against Insurers) Act 1930 (UK) provided that the insolvent company's rights against the insurer under the contract in respect of the liability were transferred to and vested in the third party to whom the liability was incurred. Reinsurance arrangements were explicitly excluded from the operation of this provision. Section 1(5) of the Third Parties (Rights against Insurers) Act provided that: "For the purposes of this Act, the expression 'liabilities to third parties,' in relation to a person insured under any contract of insurance, shall not include any liability of that person in the capacity of insurer under some other contract of insurance." Australian companies legislation took a different path from that taken by the Third Parties (Rights against Insurers) Act. Rather than proceed by vesting Kirby Hayne the insolvent company's rights against the insurer in the third party to whom the liability was incurred, provision was made in the companies legislation for preferential treatment of such a liability. Thus, s 297(5) of the Companies Act 1936 (NSW)44 provided that: "(a) Where the company is, under a contract of insurance, insured against liabilities to third parties, then in the event of any such liability being incurred by the insured (either before or after the commencement of the winding up) the amount of the liability so incurred shall upon being received by the liquidator be held by him in trust and be paid by him to the third party to whom such liability was incurred to the extent necessary to discharge any liability remaining undischarged. If the liability of the insurer to the insured is less than the liability of the insured to the third party, nothing in this subsection shall limit the rights of the third party in respect of the balance. The provisions of this subsection shall take effect notwithstanding any agreement to the contrary entered into after the commencement of this Act." Provisions of this kind were to be found in Australian companies legislation45 until 1992. In 1992, the Corporate Law Reform Act 1992 (Cth)46 made two changes to the Corporations Law that are immediately relevant. First, it amended s 562 of the Corporations Law by excluding contracts of reinsurance from the reach of that provision. Secondly, it inserted s 562A. That section, in its terms, deals with contracts of reinsurance. Before these amendments were made it had been held at first instance47 that the then legislative equivalents of what now is s 562 were engaged in the 44 cf Companies Act 1938 (Vic), s 264(7). 45 See, for example, Companies Act 1961 (NSW), s 292(5), (6) and (7); Companies (New South Wales) Code, s 447; Corporations Law of New South Wales, s 562. 46 Taken up in the Corporations Laws of the several States by the mechanisms examined in cases such as Re Wakim; Ex parte McNally (1999) 198 CLR 511; Byrnes v The Queen (1999) 199 CLR 1; Residual Assco Group Ltd v Spalvins (2000) 202 CLR 629 and Re Macks; Ex parte Saint (2000) 204 CLR 158. 47 Re Dominion Insurance Co of Australia Ltd and the Companies Act [1980] 1 NSWLR 271; Saltergate Insurance Co Ltd and the Companies Act (No 2) [1984] 3 NSWLR 389; Re Palmdale Insurance Ltd (In liquidation) (No 3) [1986] VR 439. Kirby Hayne winding up of an insolvent insurance company that had reinsured its liabilities. No distinction was drawn, in those cases, between the several forms of reinsurance that fell for consideration: described in the cases as liability quota share policies48, quota share reinsurance treaties, surplus reinsurance treaties, combined quota share and surplus reinsurance treaties or excess of loss reinsurance treaties49. In 1988, the Australian Law Reform Commission, in its General Insolvency Inquiry50 (generally known as the Harmer Report), concluded51 that "[i]t appears unfair to allow an insured a special priority [in the winding up] if the particular insurance policy is backed in some way by reinsurance whereas an insured with a policy not backed by reinsurance ranks with other unsecured creditors". For that reason, the Commission expressed the view52 that the provision equivalent to what is now s 562 should not apply to contracts of reinsurance unless the court orders otherwise. The Corporate Law Reform Act did not give effect this recommendation. Rather, specific provision was made for contracts of reinsurance by s 562A. That is, contrary to the recommendation made by the Harmer Report, s 562A(2) established "the general rule that the proceeds of contracts of reinsurance are to be applied to all relevant insurance contracts"53. Section 562A(4) provided for the court, on application by a person to whom an amount was payable under a relevant contract of insurance, to make an order altering the proportion of reinsurance receipts received by the liquidator and otherwise applicable in satisfaction of that person's claim. But subject to that power (the ambit of which need not be explored) the general rule enacted by s 562A was that a like rule to that applied by s 562 to insurance receipts should 48 Re Dominion Insurance Co of Australia Ltd and the Companies Act [1980] 1 NSWLR 271. See also Saltergate Insurance Co Ltd and the Companies Act (No 2) [1984] 3 NSWLR 389. 49 Re Palmdale Insurance Ltd (In liquidation) (No 3) [1986] VR 439. 50 Australian Law Reform Commission, General Insolvency Inquiry, Report No 45, 51 Australian Law Reform Commission, General Insolvency Inquiry, Report No 45, (1988), vol 1 at 311, par 763. 52 Australian Law Reform Commission, General Insolvency Inquiry, Report No 45, (1988), vol 1 at 311, par 764. 53 Corporate Law Reform Bill 1992 (Cth), Explanatory Memorandum at 187, par 952. Kirby Hayne be applied to reinsurance receipts: such receipts were to be applied in satisfaction of the insolvent insurer's liabilities under the contracts of insurance that were reinsured. In the courts below, and on appeal to this Court, it was contended that s 562A had no application to the reinsurance of reinsurance obligations (ie so-called retrocession). The liquidator submitted that s 562A distinguished between contracts of insurance and contracts of reinsurance and that "a relevant contract of insurance" did not include a contract of reinsurance. In the Court of Appeal, the question was resolved54 by reference to three considerations: (a) the decision of the House of Lords in Agnew v Länsförsäkringsbolagens AB55; (b) consideration of the text of the section; and (c) reference to what was said in the Harmer Report and the Explanatory Memorandum of the Corporate Law Reform Bill 1992. Reference to the decision of the House of Lords in Agnew is inapposite. That decision concerned a question of jurisdiction which fell to be determined by reference to the Lugano Convention adopted by the Civil Jurisdiction and Judgments Act 1982 (UK). The Lugano Convention was said56 to "have the primary objective of protecting the weaker party" in consumer contracts. No such consideration, requiring comparison of the respective strength of parties, is relevant to the construction of s 562A. There is no reference to such matters in the section. Section 562A deals with the disposition of sums received under reinsurance contracts made by an insurance company that is now in liquidation. The decision in Agnew thus offers no guidance to the resolution of the questions that arise in this appeal. Rather, the question is to be resolved having regard to the text of the provisions and the extrinsic material to which reference has been made. The textual footing for the liquidator's contention that a relevant contract of insurance does not include a contract of reinsurance is evident. The language of s 562A(1)(a) of the Corporations Act refers successively to contracts of insurance and contracts of reinsurance. This, it may be suggested, draws a distinction between two expressions that are not otherwise defined for this purpose, such as by providing that the broader expression "insurance" includes the narrower expression "reinsurance", as has been done in the Insurance Act57. 54 (2004) 61 NSWLR 451 at 493-495 [217]-[224] per Ipp JA. 56 [2001] 1 AC 223 at 237 per Lord Woolf MR. 57 See, for example, s 31(4). Kirby Hayne Once it is recognised, however, that the enactment of s 562A constituted a rejection of the applicable recommendations made by the Harmer Report, there is no basis for confining the operation of s 562A in the winding up of an insolvent insurance company to only some of the contracts of insurance which that company undertook. It is well established that "by a contract of reinsurance the reinsuring party insures the original insuring party against the original loss"58. Having regard to the legislative history of s 562A, the distinction drawn in the section between contracts of insurance and contracts of reinsurance should be seen as no more than a drafting device equivalent to describing one contract (the "contract of insurance") as the "first contract", and the other (the "contract of reinsurance") as the "second contract". The use of the expression "contract of insurance" should not be read as intended to exclude from its reach a contract by which a reinsurance company, now insolvent, had reinsured its risks under reinsurance contracts. Once again, we can accept that the contrary argument is tenable, at least on a narrow reading of the language of s 562A that would place emphasis on the successive use of the different terms "insurance" and "reinsurance". However, that approach is not the way this Court has repeatedly said that the task of statutory construction should be undertaken59. That task must start with the language of the legislative text. However, it is necessary as well to consider other relevant sources that assist in deriving the purpose of the legislation. Such sources include the statutory context, the legislative history, admissible parliamentary materials and background documents, such as law reform reports. When these available sources are taken into account in the present case they lead to the conclusion that we have expressed. Conclusions and orders For these reasons the conclusion reached in the courts below about whether policy FC3A was one of NCRC's "liabilities in Australia" for the purposes of s 116(3) should not be accepted. The liability under that contract is not one of NCRC's liabilities in Australia and a declaration to that effect should 58 Forsikringsaktieselskabet National (of Copenhagen) v Attorney-General [1925] AC 639 at 642 per Viscount Cave LC. See also Tariff Reinsurances Ltd v Commissioner of Taxes (Vict) (1938) 59 CLR 194 at 215 per Dixon J, rejecting a contention that a reinsurer was engaged in a joint adventure with the reinsured. 59 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; Newcastle City Council v GIO General Ltd (1997) 191 CLR 85 at 112-113; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69], Kirby Hayne have been made at first instance. Further, the primary judge was right to hold that the contracts of reinsurance made by NCRC in favour of the appellant and Faraday were relevant contracts of insurance within the definition of that term in sub-s (8) of s 562A. Effect should be given to these conclusions by making the following orders: Appeal allowed. Set aside par 3 of the orders of the Court of Appeal of the Supreme Court of New South Wales made on 6 October 2004 and in its place order: the second cross-appeal is allowed in part; the declaration made by Windeyer J by order made on 17 September 2003 and numbered 1(b) is set aside and in its place it is ordered that there be a declaration that: "1(b) Any provable claim of the first defendant against the first plaintiff under facultative reinsurance contract in respect of AK Steel Corporation ('FC3A') for the 1997 and 1998 underwriting years is not a 'liability in Australia' of the first plaintiff for the purposes of s 116(3) of the Insurance Act 1973 (Cth)." The effect of those orders would be to restore the declarations and directions given at first instance in connection with the operation of s 562A of the Corporations Act. No order for costs was made at first instance. This Court was informed that the costs of those proceedings were disposed of by agreement of the parties. On appeal to the Court of Appeal of New South Wales, costs were treated as following the event. On appeal to this Court it was contended that because the appeal arose in test litigation intended to resolve issues arising in the winding up of NCRC that extended beyond the particular parties to the litigation, a special order for costs would have been appropriate if the appeal had not succeeded. In this Court, no party submitted that the costs of the litigation, including the costs of the appeals to the Court of Appeal and to this Court, should be borne by the liquidator and treated as a cost and expense of the winding up. Ordinarily, such an order would have been appropriate at first instance. The liquidator, as he was entitled to do, sought the directions of the Supreme Court about the way in which the winding up should be conducted. The costs of those proceedings are then properly to be regarded as a cost and expense of the winding up. But having obtained those directions the liquidator then chose to appeal to the Court of Appeal of New South Wales. The questions that fall for decision in this Court Kirby Hayne are questions that arose out of cross-appeals brought by parties other than the liquidator. And, of course, the present appeal to this Court was brought by AssetInsure, not as a representative party but, so far as the record reveals, in pursuit of its own rights and interests. In all the circumstances the liquidator should pay the appellant's costs of the appeal to this Court. (Subject to any contrary direction of a court having the supervision of the winding up of NCRC, those costs would then be a cost and expense of the liquidator in the winding up.) There should be no order as to the costs of other parties to the appeal to this Court. In the second cross-appeal to the Court of Appeal there should have been orders making a different declaration from that made at first instance in relation to the operation of s 116(3) of the Insurance Act. There should be no order for the costs of that cross-appeal.

HIGH COURT OF AUSTRALIA APPELLANT AND THE QUEEN RESPONDENT Swan v The Queen [2020] HCA 11 Date of Hearing: 13 February 2020 Date of Judgment: 18 March 2020 ORDER Appeal dismissed. On appeal from the Supreme Court of New South Wales Representation B J Rigg SC with T Quilter for the appellant (instructed by O'Brien Hudson Solicitors) L A Babb SC with T L Smith SC and B K Baker for the respondent (instructed by Solicitor for Public Prosecutions (NSW)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Swan v The Queen Criminal law – Murder – Causation – Where appellant's assault caused serious injury to victim – Where victim suffered severe deterioration in quality of life as a consequence of assault – Where victim later suffered fractured femur requiring surgery – Where decision made not to undergo possible life-saving surgery – Whether sufficient evidence for it to be open to jury to convict on basis that low quality of life resulting from assault caused decision not to undergo surgery – Whether appellant's conduct a "substantial or significant cause of death" – Whether appellant legally responsible for death. Words and phrases – "but for", "causation", "legal responsibility", "murder", "substantial or significant", "sufficiently substantial". Crimes Act 1900 (NSW), s 18(1)(a). BELL, KEANE, NETTLE, GORDON AND EDELMAN JJ. Introduction Mr Kormilets was a 78-year-old man living alone in a Department of Housing apartment in Redfern, New South Wales. He was an active man, in apparently good health, with a caring family. In the early hours of 15 April 2013, he was severely assaulted and robbed in his home by the appellant, a 31-year-old man, and the appellant's accomplice. Armed with a machete, the appellant entered through the balcony of Mr Kormilets' apartment, opened the front door for his accomplice, and then savagely attacked Mr Kormilets, intending to cause him grievous bodily harm. Mr Kormilets suffered immediate and severe injuries including to his brain, his face, his kidneys and his chest. Mr Kormilets spent almost four months in hospital before being transferred to a high-level care facility in August 2013. His mental and physical condition was so poor that he was unable to undertake, or even to comprehend, any daily living activities. On 5 December 2013, he was discovered on the floor next to his bed facing downwards and moaning. Later that day he was transferred back to hospital, where x-rays showed that the neck of his left femur was fractured. His fractured femur was not operated on and he died in hospital from the consequences of the fracture on 10 December 2013. The appellant and his accomplice were charged upon indictment for murder, as defined in s 18(1)(a) of the Crimes Act 1900 (NSW). They were tried before a judge (N Adams J) and jury in the Supreme Court of New South Wales. The jury returned verdicts of guilty. Appeals to the Court of Criminal Appeal of the Supreme Court of New South Wales (Bathurst CJ, Hoeben CJ at CL and R A Hulme J) and, by special leave, to this Court were brought only by the appellant. The central issue on appeal to the Court of Criminal Appeal was whether it was open to the jury to convict the appellant based upon one of the Crown's pathways to proving that the appellant caused the death of Mr Kormilets. In particular, the question was whether it was open to the jury to reason that the low quality of life caused by the assault was the reason that when Mr Kormilets presented to hospital with a fractured hip a decision was made not to undertake surgery that would reasonably have been expected to save his life, which, in turn, resulted in death. The Court of Criminal Appeal concluded that there was sufficient evidence for it to be open to the jury to reach a conclusion of causation by that route. On appeal to this Court, by grant of special leave, the appellant Bell challenges that conclusion. The conclusion of the Court of Criminal Appeal was correct. The appeal should be dismissed. The evidence at trial and the Crown's three causation pathways Mr Kormilets' general practitioner of over 20 years gave evidence that prior to the assault on 15 April 2013, Mr Kormilets lived a comfortable, healthy life. Although Mr Kormilets had a condition called polycythemia which gave rise to an increased risk of blood clots, this was managed with medication and posed no imminent danger to his health. In his autopsy it was also discovered that Mr Kormilets had severe coronary artery disease, with 75 per cent stenosis or blockage to the artery, and a tumour on his left kidney. But there was no evidence or suggestion that these had noticeably affected his lifestyle. His general practitioner described him as a "very fit man" and said that his medical problems were "pretty well managed". He had cared for his wife very well until her death in 2012. He cooked and cleaned for himself, managed his own financial affairs, and had a normal social life. Mr Kormilets was "quite clear in his mind" and "fairly intelligent" and enjoyed walking in the park and driving to Bondi, Coogee or Maroubra. He had a good relationship with his son, Mr Dmitri Zitserman1, and with his grandchildren. He spoke little English but conversed in his native Russian language with those around him including Dmitri, his general practitioner, and his rabbi. "severe suffering traumatic life-threatening multi-system On 15 April 2013, after the assault, Mr Kormilets was admitted to the intensive care unit at St Vincent's Hospital. The attending doctor described him injuries". The injuries included multiple fractures of his ribs on both sides of the rib cage, lacerations of his spleen and right kidney, and fractures of his face. His severe chest injuries created difficulty for him to breathe so he underwent a tracheotomy of his throat and a "chest drain", which was a large tube that was inserted into his chest cavity to drain it of blood and other fluids to allow his lungs to reinflate. His general practitioner was "shocked" at Mr Kormilets' condition after his discharge from hospital and he observed how Mr Kormilets had almost completely lost the ability to swallow and was being fed food and medication through a tube. 1 The materials before this Court spelled Mr Zitserman's first name in different ways. The Court of Criminal Appeal and the respondent spelled his name "Dmitri". Bell Dmitri visited Mr Kormilets almost every day. He said that Mr Kormilets was "put ... in a sleep" for the first month after the assault and that after Mr Kormilets was conscious, he would sometimes appear not to know Dmitri and there were relatives whom Mr Kormilets did not recognise. After a couple of months, Mr Kormilets' tracheotomy tube was removed but he was not able to eat successfully so, for the remainder of his life, he was "PEG fed" through a tube inserted into his stomach. He was doubly incontinent and needed to wear a nappy or continence pads. He was in bed most of the time and could only move around in a wheelchair or "gutter frame" with the assistance of two carers. In July 2013, Mr Kormilets suffered an episode of aspiration pneumonia for which he was intubated and ventilated (a tube being placed down his windpipe and used to mechanically force air into his lungs). A note from St Vincent's Hospital, which bears the printed date of 2 September 2013, recorded the following: "Following discussion with Mr Kormilets' son, Dimitri it has been decided that if another similar episode were to occur that [Mr Kormilets] would be (not for resuscitation and not for ICU/intubation). The NFR order has been signed and is official and can be found in the notes." On 1 August 2013, Mr Kormilets was discharged to a high-level care nursing home for patients requiring extensive physical and clinical support in all aspects of daily living. The nursing home notes referred to his acquired brain injury and observed that he was still fed through PEG feeding. He still had some ability to communicate, including in his native Russian with his son or his rabbi acting as a translator. But the overwhelming evidence was of severe cognitive decline and inability. Mr Kormilets' general practitioner said that Mr Kormilets had lost the ability to communicate properly, to express himself, and to relate to people. On 28 August 2013, his cognitive and verbal skills were assessed as being in the worst category. Care staff required special instructions to speak to him including "[s]tand directly in front of resident, [r]epeat messages until heard, [u]se hand gestures as required". Eventually his cognitive ability became so poor that he could no longer understand how to brush his teeth. Reports from the nursing home that were produced between September and December 2013 showed that Mr Kormilets was "[u]nable to physically undertake any daily living activities" and "[u]nable to mentally comprehend and undertake daily living activities". He needed supervision while he was seated and required the assistance of two staff members to move between his bed and a chair or to go to the toilet. He was described in the following terms: "[c]onstantly physically agitated" at numerous times every day; having incontinence of both Bell urine and faeces; having "[u]nsteady hands or fingers", an "[u]nsteady gait", and "[p]oor coordination"; and "lack[ing] understanding for [his] personal safety", "forget[ting] to use [his] mobility aid", and "attempt[ing] to get up from bed ... and walk to another area unaided". A verbal behaviour assessment recorded "[p]ain", "[w]anting to get out of bed", "[c]ommunication issues", and "[v]erbal refusal of care". Mr Kormilets was also recorded as "refusing any oral intake orassessment [sic]". While in the nursing home he was described by a social worker as a "[h]igh falls risk" because he "tries to mobilise on his own". On 30 November 2013, Mr Kormilets fell in the lounge area of the nursing home and was found on the floor. Prior to being discharged to the nursing home, Mr Kormilets had also suffered a series of falls from his hospital bed when he tried to get out of bed or to get up from a chair. On 5 December 2013, at around 1.40 pm, Mr Kormilets was found next to his bed facing downward and moaning. Three staff moved him back to his bed, but by 4.00 pm he was unwell and appeared to acknowledge that he was dizzy. His condition declined and he was transferred to the Prince of Wales Hospital. A note on the transfer form said that he had "rolled out of a Lo Lo bed". On 6 December 2013, handwritten clinical notes from the Prince of Wales Hospital, which were Exhibit AG at trial, recorded as follows: "Thanks for consult. 78 yo [male] pw 2/7 of L hip pain following fall @ NH admitted c. aspiration pneumonia XRAY displaced subcapital NOF # Will require surgical intervention once stabilised medically D/Q Dr (??) (?) close to review. Not for OT this weekend." The clinical notes also contained the following additional handwritten notes, apparently also made on 6 December 2013: "(5) Decision re palliative v operative – wife's number disconnected → actually deceased – got a hold of son, Dimitry. Feels pt deteriorated significantly since Aug. Bell Agrees c. previous discussions documented by St Vincent's that pt is not for invasive Rx but for a trial of poabs. I updated him on the # NOF, possible IC blood / stroke + rapid AF + possible aspiration sepsis. Furthermore he may very well have an underlying malignancy c. bone metastases (+/- this NOF being a pathological #). Dimitry agreed pt should be for comfort care. Would still like poabs via PEG. Agreed not for IV fluids. Agreed for prn morphine, midaz + hyoscine. Agreed for non-surgical Rx. Plan, - Cease non essential meds - poabs via PEG - Cease IVF - Oral + PAC. - Happy to speak to son when he comes in. In the event of expiration, death cert should read: a – Aspiration sepsis Part (1) b – Fractured neck of femur (days) (days) Part (2) Traumatic brain injury, frailty, atrial fibrillation, recurrent aspiration pneumonia." Consistently with a palliative decision referred to in the clinical notes, no operation was conducted upon Mr Kormilets. In her closing address to the jury, the Crown prosecutor said that "it had been decided that there wouldn't be such intervention ... not because of the tumour on the kidney, but because of his terrible state in every other way". Mr Kormilets died on 10 December 2013. The intern at the Prince of Wales Hospital who completed the death certificate reported on it that the cause of death was aspiration sepsis (to which the clinical notes on 6 December 2013 had also referred) and a fractured neck of the femur. She described other conditions contributing to the death as traumatic brain injury, frailty, atrial fibrillation and recurrent aspiration pneumonia. Professor Cordner, a professor of forensic pathology, said that each of these "debilities", as defence counsel described them, contributed to death to an unknown extent. Bell The evidence from the death certificate about cause of death was contradicted by evidence from Dr Bailey, the specialist forensic pathologist who conducted the post mortem. Dr Bailey said that there was no evidence of aspiration pneumonia or aspiration sepsis in the sections of the lungs that she tested. She explained that the death was caused by respiratory failure. The respiratory failure was the result of fat emboli being released into the blood stream from the high fat content of bone marrow after the fracture of the left femur. Those fat emboli moved to the lungs and compounded Mr Kormilets' pre- existing respiratory failure due to "blunt force injury of the chest". She described as "relatively certain" findings from a microscopic examination of lung tissue of "widespread fat emboli in the lungs". There was considerable medical evidence given at trial concerning the cause of the fracture to Mr Kormilets' left femur. The Crown case relied, as one alternative, upon the fracture being caused by Mr Kormilets falling down. The Crown pointed to Mr Kormilets' agitation, his inability to communicate, the high risk of him falling, and his previous falls. In contrast with the position of the Crown, counsel for each of the accused men raised the possibility that the fracture had not been caused by a fall. Their position was that the fracture might have been pathological, arising independently of the injuries from the assault or any external force, but caused by the metastasis of a 60 mm tumour that Dr Bailey had discovered on Mr Kormilets' left kidney during the autopsy. There was some evidence that supported the position of the accused men that pathological fracture was a possibility. Dr Bailey said that she could not exclude this possibility although she did not see any evidence of metastasis. Dr Watson, a histopathologist, gave evidence that metastasis would likely occur first in the lungs before the bones. However, Dr Watson also said that it was not possible to exclude fully the possibility of metastasis in the left femur even without evidence of metastasis in the renal vein or lungs. Professor Fox, an oncologist, said that metastasis to the bone commonly presents in x-rays as a discrete hole or as a thinning of the bone. However, although Mr Kormilets' left femur had no visible hole or thinning, Professor Fox also could not exclude the possibility that the fracture was pathological, caused by metastasis. The strongest taken by position on Professor Cordner, who described it as a "reasonable possibility" and said that it was one "that I can easily conceive of and I think should be taken into account". the possibility of a pathological fracture was Evidence was also given concerning the need for surgery and the possible success of surgery. As to the need for surgery, Dr Bailey accepted that fractures such as the one that Mr Kormilets suffered required surgical intervention in every Bell case and Professor Cordner said that the failure to treat surgically a fractured femur in a 78-year-old man would "probably be fatal". As to the possible success of surgery, Dr Bailey's evidence was that surgical treatment would usually produce a positive outcome for a patient of Mr Kormilets' age. Professor Fox described treatment of hip fractures in elderly people as generally successful. Professor Cordner went further. He was asked whether a hip replacement for a broken femur would be undertaken on a 78-year- old man with an undiagnosed carcinoma of the kidney, polycythemia and "a bit of" coronary atherosclerosis. In other words, he was asked whether Mr Kormilets' medical conditions that existed independently of the assault could have prevented successful surgery. Professor Cordner's answer was that in the ordinary course of events Mr Kormilets would get surgery and his hip replaced, although he noted that Mr Kormilets had more than a "bit" of coronary atherosclerosis; he had a 75 per cent occlusion of one of the coronary vessels. Professor Cordner later clarified that this 75 per cent occlusion would not lead to refusal of surgery. In any event, this occlusion was only discovered during the autopsy so whilst it may have been a relevant factor to consider in assessing the success of any hypothetical surgery it could not have contributed to the reasons for deciding against surgery. In an admirably clear and succinct submission, senior counsel for the appellant described the three causation pathways relied upon by the Crown in closing submissions to support a conclusion that the appellant had caused the death of Mr Kormilets. They were as follows: The assault by the appellant caused injuries to Mr Kormilets' lungs and respiratory system. After Mr Kormilets fractured his hip, his respiratory failure was caused by the fat emboli that travelled to his lungs compounded with the pre-existing lung injury. This causation pathway relied upon the evidence of Dr Bailey. The assault by the appellant caused injuries to Mr Kormilets that reduced his cognitive ability and created a propensity for him to fall. If the fracture to the hip resulted from a fall, and was not pathological, then the jury could conclude that the assault caused the fall and, thus, caused the fracture. The assault was therefore a substantial cause of Mr Kormilets' death when the fat emboli travelled to his lungs as a result of the fracture. The assault by the appellant caused injuries to Mr Kormilets that resulted in a low quality of life for him. This low quality of life was the reason that when Mr Kormilets presented to hospital with a fractured hip a decision Bell was made not to undertake surgery. Mr Kormilets died as a result of that decision because the lack of surgery permitted the fat emboli to travel to his lungs. The first two pathways were not controversial in this Court. The focus was upon the third. Causation of death and the trial judge's directions Section 18(1)(a) of the Crimes Act 1900 (NSW) provides for the circumstances in which murder shall be taken to have been committed. Those circumstances relevantly include "where the act of the accused, ... causing the death charged, was done ... with intent to ... inflict grievous bodily harm upon some person". There was no dispute on this appeal that the requirement that the act of the accused cause the death charged required the jury to be satisfied that the act of the accused was "a substantial or significant cause of death" or a "sufficiently substantial" cause. That formulation, derived from Royall v The Queen2, recognises that boundaries must be drawn for legal responsibility; not every act that is necessary for death to occur is sufficient for the imposition of legal responsibility for the death3. It was also recognised in Royall v The Queen4 that there are some cases where an accused will be legally responsible for a death even if the act of the accused was not, by itself, necessary for the victim's death but was instead "one of the conditions which were jointly necessary to produce the event". An exceptional example where an accused might be held legally responsible for the death of another even if the act of the accused was not by itself necessary for (1991) 172 CLR 378 at 411-412, see also at 398, 423, 442. See also Osland v The Queen (1998) 197 CLR 316 at 325 [16]; Patel v The Queen (2012) 247 CLR 531 at 553 [75]; Gillard v The Queen (2014) 88 ALJR 606 at 612 [24]; 308 ALR 190 Timbu Kolian v The Queen (1968) 119 CLR 47 at 68-69, quoting Pollock, The Law of Torts, 6th ed (1901) at 36; Royall v The Queen (1991) 172 CLR 378 at 411, (1991) 172 CLR 378 at 441. Bell the victim's death is where a victim "dies from the combined effects of ... two wounds", either of which would have been sufficient for death but only one of which was inflicted by the accused5. The directions of the trial judge concerning causation were not controversial in the courts below and this Court refused leave to amend the notice of appeal to introduce a ground of appeal impugning the trial judge's directions on causation. The trial judge addressed causation in a simple and clear direction to the jury that causation could be satisfied by acts of the appellant that "substantially contributed" or "significantly contributed" to the death of Mr Kormilets. No issue was taken with this direction when the matter was raised with counsel by the trial judge. There was no dispute about it on appeal to the Court of Criminal Appeal, nor is there any issue concerning that direction in the extant grounds of appeal before this Court. The trial judge told the jury that causation was a "live issue" in the trial. Her Honour directed the jury that an essential element of the Crown case for murder was to prove beyond reasonable doubt that a voluntary act of the appellant caused the death of Mr Kormilets. The trial judge said that causation, by substantial or significant contribution to the death of Mr Kormilets, did not require that the acts of the appellant were the only cause of death, the most important cause of death or even the only important cause of death. She directed the jury to consider all the facts including the evidence of the injuries, the evidence of Mr Kormilets' condition before and after the assault, and all the evidence from the experts, which she described in detail including the significant body of evidence concerning whether the fracture might have been pathological, "when deciding whether to attribute legal responsibility" to the appellant. The Court of Criminal Appeal decision and the central issue in this Court The appellant relied upon two grounds of appeal in this Court and sought leave to amend to raise a third which had not been the subject of the grant of special leave to appeal to this Court. The first ground of appeal raises the same issue as the sole ground of appeal to the Court of Criminal Appeal. That issue is whether a miscarriage of justice occurred because the Crown case on cause of death, as articulated in the 5 Burrage v United States (2014) 571 US 204 at 215. Bell prosecutor's closing address, left open the third path of causation reasoning, a path which the appellant submits was not open to the jury on the evidence. The appellant's second ground of appeal in this Court asserts that the Court of Criminal Appeal failed to consider the appellant's sole ground of appeal. In this Court, the appellant relied upon two paragraphs in the reasons of the Court of Criminal Appeal to submit that the Court of Criminal Appeal had addressed the wrong question, namely whether it was open to the jury to find that the surgery "could not" happen. The appellant submitted that the correct question raised by the ground of appeal was whether, on the Crown's third causation pathway, it was open to the jury to find that surgery could have prevented death but was not undertaken due to the appellant's low quality of life as a consequence of his injuries from the assault on 15 April 2013. In oral submissions in this Court, senior counsel for the appellant accepted that the first ground of appeal was the determinative issue and that success on the appeal would depend on the first ground. The second ground of appeal can be dismissed briefly. In the passages relied upon by the appellant, Bathurst CJ said that the jury was entitled to conclude that "but for the earlier injuries, [Mr Kormilets] could have been treated" and that "a significant reason for the inability to surgically treat the fracture was the consequence of the injuries suffered from the assault"6. The comments by Bathurst CJ were responding to the appellant's submissions to the Court of Criminal Appeal that "the focus of the Crown case on causation ... was the decision to not operate" and that the third pathway to causation was not open to the jury because there was "no evidence about why the decision was made not to operate". Prior to the two comments in his reasons, Bathurst CJ had referred to the Crown submission that an inference was available that a decision not to proceed with surgery had been made due to the low quality of life of Mr Kormilets resulting from his injuries from the assault7. After the second comment, the Chief Justice said that the conclusion that the hospital was unable to operate was supported by evidence including the "not for resuscitation" decision made while Mr Kormilets was at St Vincent's Hospital and "the ultimate decision not to operate at Prince of Wales Hospital, which referred back to the Swan v The Queen [2018] NSWCCA 260 at [93], [99]. Swan v The Queen [2018] NSWCCA 260 at [83]. Bell earlier decision made at St Vincent's Hospital"8. In that context, it is clear that the Chief Justice was not describing a surgical inability to operate but was instead referring to an inability to operate due to the refusal of consent to an operation. He held that the jury was entitled to conclude that the refusal of consent was caused by Mr Kormilets' injuries from the assault. He did not fail to address the appellant's ground of appeal. In written and oral submissions before this Court, the appellant sought leave to amend his grounds of appeal to include a third ground alleging that the trial judge failed adequately to identify the issues relevant to causation and to relate the law and evidence with respect to causation to those issues. However, no further directions on causation had been sought from the trial judge. As Bell J said during the hearing, there was a forensic reason for the appellant not to seek further directions on causation. This forensic reason is that the defence is likely to have thought it unattractive to have the trial judge focus more closely on the third pathway. The attention of the jury had been directed in some detail to the capacity of the prosecution to exclude pathological fracture as a reasonable possibility. As explained above, there was a body of evidence upon which the appellant relied to suggest a reasonable possibility of pathological fracture. Further directions on causation might have distracted the jury from this defence case. The likelihood of that being the reason is fortified by the fact that the ground was not raised before the Court of Criminal Appeal. Leave to amend was therefore refused by this Court. The only issue remaining before this Court is whether it was open to the jury to convict the appellant based upon the Crown's third pathway to causation. Was the Crown's third pathway to causation open to the jury? For the appellant to succeed in establishing that the third causation pathway was not open to the jury, being the "constitutional tribunal for deciding issues of fact"9, it is necessary that there was no evidence sufficient to support a conclusion of causation by that pathway. The ground of appeal must be dismissed "if there is evidence (even if tenuous or inherently weak or vague) Swan v The Queen [2018] NSWCCA 260 at [100]. 9 R v Baden-Clay (2016) 258 CLR 308 at 329 [65], quoting Hocking v Bell (1945) 71 CLR 430 at 440. Bell which can be taken into account by the jury in its deliberations and that evidence is capable of supporting a verdict of guilty"10. The appellant submitted, without dispute, that the third causation pathway required three conclusions to be open to the jury on the evidence: (1) surgery upon Mr Kormilets was available and would reasonably have been expected to be able to save his life; (2) Mr Kormilets or Dmitri made a decision that such available surgery should not be undertaken; and (3) the decision was motivated by Mr Kormilets' low quality of life due to the assault rather than due to other, unrelated considerations. Each of these steps can be considered in turn. (1) Surgery would reasonably have been expected to save Mr Kormilets' life Neither at trial, nor before the Court of Criminal Appeal, nor before this Court was it suggested that the Crown needed to prove that it was certain or nearly certain that surgery would have been successful in order to satisfy the third causation pathway. The appellant's submission was instead premised upon the Crown being required to prove that surgery would reasonably be expected to have saved Mr Kormilets' life. For two reasons, it was open to the jury to draw this inference from the evidence. First, although, curiously, none of the treating physicians or surgeons from the Prince of Wales Hospital was called by the Crown to give evidence about the prospects or expectations of successful surgery, the handwritten clinical notes from the Prince of Wales Hospital, made on 6 December 2013, support an inference that there was an expectation of success by the unqualified statement that Mr Kormilets "Will require surgical intervention once stabilised" (emphasis added). Secondly, there is the evidence of Dr Bailey, Professor Fox, and Professor Cordner that surgical treatment would usually be successful for a person of Mr Kormilets' age. Professor Fox gave evidence that a patient of 78 years of age who had a renal carcinoma but was otherwise healthy would ordinarily undergo a "pretty quick surgical procedure" and recover to the degree of being mobile, "which is a palliative mobilisation", and that if he was in a position to refer them for surgery, he would do so. And, as explained above, in cross-examination Professor Cordner went further still, saying that a person in 10 Doney v The Queen (1990) 171 CLR 207 at 214-215. Bell Mr Kormilets' condition "would get, in the ordinary course of events, surgery and his hip replaced". The context of the question, which was apparent from previous questions, was the exploration of reasons why surgery was not undertaken. It invited qualification by Professor Cordner if there were real prospects that surgery might not be successful. No qualifications of that kind were made by Professor Cordner. The natural inference from his evidence was that surgery upon Mr Kormilets would reasonably have been expected to be successful. (2) Mr Kormilets or Dmitri made a decision not to undertake such available surgery The appellant submitted that there was a paucity of evidence from which the jury could have inferred that a decision was made by Mr Kormilets, or by his son, that surgery not be undertaken because of the disabilities Mr Kormilets suffered due to the assault. Although Dmitri was called by the Crown and gave evidence he was not asked about the decision not to operate either in examination in chief or in cross-examination. However, in circumstances in which the jury could have concluded that there was a reasonable expectation that surgery would be successful, there was evidence which, in combination, was sufficient for the jury to have concluded that a decision not to operate was made by either Mr Kormilets or Dmitri. First, the likelihood of such a decision being made by either Mr Kormilets or Dmitri, despite the reasonable expectation that surgery would be successful, is supported by the evidence of the extraordinarily poor quality of life for Mr Kormilets, his agitation and frustration, the pain that he was experiencing, and the records of his communicated refusal of care and refusal of assessment. Underlying these matters was his inability to undertake, or to mentally comprehend, any daily living activities; his inability to communicate properly, to express himself, and to relate to people; his inability to eat without a PEG tube; his double incontinence; and his confinement to a bed for most of the time. Secondly, there was evidence to support an inference that a decision had been made by Dmitri and that this decision was considered, and given weight, by the attending doctors at the Prince of Wales Hospital. Neither at trial nor on appeal to the Court of Criminal Appeal or this Court was it suggested by the appellant that Dmitri might have lacked formal legal authority to make this decision and that the absence of such formal authority prevented the appellant being responsible for the death of Mr Kormilets. As explained above, the notes comprising Exhibit AG record that a decision whether to undergo "palliative v operative" care was made by or with Bell Dmitri. Further, the note from St Vincent's Hospital, with the printed date of 2 September 2013, had described the instructions from Dmitri after the episode of aspiration pneumonia that if another, similar episode were to occur then his father should not be resuscitated. The note had described the "not for resuscitation" order as "signed and ... official and can be found in the notes". In this context, the natural inference to be drawn from the clinical note on 6 December 2013 recording the "[d]ecision re palliative v operative", saying that the writer "got a hold of son, Dimitry. Feels pt [Mr Kormilets] deteriorated significantly since Aug" and also saying that Dmitri "agreed pt should be for comfort care" and "[a]greed for non-surgical Rx", is that a positive decision was made by Dmitri in consultation with doctors for palliative care rather than to operate. (3) The decision was motivated by Mr Kormilets' low quality of life due to the assault The appellant submitted that a decision might have been made due to any or all of the following matters, which were not excluded by the Crown beyond reasonable doubt: (i) a mistaken belief that Mr Kormilets was suffering from aspiration sepsis, the treatment for which, by intubation and ventilation, would be distressing for him; (ii) the prospect of ongoing pathological fractures from the cancer; (iii) the potential for Mr Kormilets not to be sufficiently stabilised for surgery, and the distress that stabilisation might involve; (iv) the effect of his multiple health conditions meaning that there was a poor prospect of him living for any length of time after surgery; or (v) the "not for resuscitation" note being made contrary to the wishes of Mr Kormilets or misunderstood or misrepresented by the doctor at the Prince of Wales Hospital. As explained earlier in these reasons, there was no dispute at trial, on appeal to the Court of Criminal Appeal, or on appeal to this Court that the appellant would be legally responsible for the death of Mr Kormilets if his assault upon Mr Kormilets substantially or significantly contributed Mr Kormilets' death. It was never suggested that the jury should, or could, have filleted the factors within the decision-making process to attempt to isolate the relative contribution of some or all of the five matters above upon which the appellant relied. Instead, on the undisputed direction given by the trial judge, it was sufficient that the effects of the assault substantially or significantly contributed to the decision which, in turn, on the third causation pathway, prevented the surgery that was reasonably expected to save Mr Kormilets' life. Bell The inference is irresistible that the decision was taken to treat palliatively rather than surgically based substantially or significantly upon the persistent, long-term, and catastrophic effects of the assault. Even putting to one side the persistent physical effects of the assault, the cognitive decline suffered by Mr Kormilets, leading to his inability to communicate properly, to express himself, and to relate to people, was described by his general practitioner as the "most important thing". As Professor Cordner said in examination in chief, Mr Kormilets' "severe cognitive decline" as a result of the assault was operative at the time of his death. Conclusion The appeal should be dismissed.

HIGH COURT OF AUSTRALIA REPRESENTATIVE OF THE ESTATE OF JAN EMIL TALACKO) APPELLANT AND ALEXANDRA BENNETT & ORS RESPONDENTS Talacko v Bennett [2017] HCA 15 3 May 2017 ORDER Appeal allowed. Set aside orders 2 to 6 of the Court of Appeal of the Supreme Court of Victoria made in proceeding S APCI 2016 0024 on 28 July 2016 and, in their place, order that: the appeal to the Court of Appeal of the Supreme Court of Victoria be dismissed; and the applicants pay the first respondent's costs in proceeding S APCI 2016 0024. The first to third respondents pay the appellant's costs of the appeal to this Court. On appeal from the Supreme Court of Victoria Representation B W Walker SC with J B Masters for the appellant (instructed by Strongman & Crouch) P H Solomon QC with O M Ciolek for the first to third respondents (instructed by Brand Partners) Submitting appearance for the fourth respondent Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Talacko v Bennett Procedure – Enforcement of Australian judgment debt in foreign jurisdiction – Where respondents obtained certificate under s 15(1) of Foreign Judgments Act 1991 (Cth) certifying finality of Australian judgment – Where application for such certificate may not be made until expiration of any stay of enforcement of judgment in question – Where judgment debtor bankrupt – Whether certificate valid – Whether s 58(3) of Bankruptcy Act 1966 (Cth) operated to impose a stay of enforcement for purposes of Foreign Judgments Act 1991 (Cth). Words and phrases – "enforcement by execution", "stay of enforcement of the judgment". Bankruptcy Act 1966 (Cth), ss 58(3), 60(1)(b), 60(2). Foreign Judgments Act 1991 (Cth), ss 3(1), 15. KIEFEL CJ, BELL, KEANE, GORDON AND EDELMAN JJ. At issue in this appeal is whether s 15(2) of the Foreign Judgments Act 1991 (Cth) ("the Foreign Judgments Act") prevents a judgment creditor of a bankrupt from obtaining a certificate under that Act to facilitate the enforcement of the judgment in a foreign jurisdiction. In particular, the issue is whether a "stay of enforcement" of a judgment within the meaning of s 15(2) of the Foreign Judgments Act is brought about by s 58(3) of the Bankruptcy Act 1966 (Cth) ("the Bankruptcy Act"). The Court of Appeal of the Supreme Court of Victoria held, by majority, that s 15(2) of the Foreign Judgments Act did not prevent the issue of a certificate even though the judgment in question could not be enforced by execution by reason of s 58(3) of the Bankruptcy Act1. In so holding, the Court of Appeal erred in its understanding of the operation of s 15(2) of the Foreign Judgments Act. Accordingly, the appeal must be allowed. While the issue on which the appeal turns is within short compass, a summary of the circumstances which gave rise to the issue is, unavoidably, as lengthy as it is sad. Background The parties and the properties Before World War II, Anna and Alois Talacko ("Anna and Alois") resided in what was then Czechoslovakia. They owned several properties, including five properties in the centre of Prague, 0.8 hectares of land in suburban Kbely, 17.44 hectares of land on the outskirts of Prague at Řepy, a 368 hectare private forest plantation at Sucha, Slovakia, and an apartment building and adjacent vacant land in Dresden, Germany2. After World War II, the properties were seized by and vested in the state, both in Czechoslovakia and in East Germany. Anna and Alois left Europe and settled in Australia3. 1 Bennett v Talacko [2016] VSCA 179. 2 Bennett v Talacko [2016] VSCA 179 at [121]. 3 Bennett v Talacko [2016] VSCA 179 at [122]. Bell Gordon Edelman Anna and Alois had three children: Jan Emil Talacko ("Jan Emil"), Peter Talacko ("Peter") and Helena Talacko ("Helena")4. Jan Emil was married to Judith Talacko ("Judith"), and they had four children, including two sons: David Talacko ("David") and Paul Talacko ("Paul")5. Peter was married to Margaret Talacko ("Margaret"), and they had three children: Alexandra Bennett ("Alexandra"), Martin Talacko ("Martin") and Rowena Talacko ("Rowena")6. Helena had two children: Anna Talacko and Jan Talacko ("Jan")7. Alois and Anna died in Melbourne, in 1964 and 1984 respectively8. After the end of Communist rule in Czechoslovakia in 1989, Jan Emil, Peter and Helena became interested in reclaiming their deceased parents' properties9. In September 1991, Jan Emil applied for restitution of five properties in central Prague. At that time, only a resident and citizen of what had become the Czech Republic could make such a claim. Jan Emil satisfied these requirements, while Peter and Helena did not. In March 1992, the five Prague properties were restored to Jan Emil, either wholly or in part10. Helena and the wife and children of Peter (who died in 1995) subsequently alleged that the three siblings had reached an agreement to pursue 4 Bennett v Talacko [2016] VSCA 179 at [123]. 5 Bennett v Talacko [2016] VSCA 179 at [124]. 6 Bennett v Talacko [2016] VSCA 179 at [125]. 7 Bennett v Talacko [2016] VSCA 179 at [63]. 8 Bennett v Talacko [2016] VSCA 179 at [126]. 9 Bennett v Talacko [2016] VSCA 179 at [128]. 10 Bennett v Talacko [2016] VSCA 179 at [130]. Bell Gordon Edelman the restitution of the properties together, and to share the proceeds equally. Jan Emil denied making such an agreement11. The 1998 Proceeding On 2 October 1998, Peter's three children and his sister, Helena, commenced proceedings in the Supreme Court of Victoria ("the 1998 Proceeding") against Jan Emil, with Peter's widow and executrix, Margaret, subsequently added as a fifth plaintiff12. They sought equitable relief against Jan Emil on the basis that it had been agreed in March 1991 that the three children of Anna and Alois would share equally in the benefit of the properties13. On 23 February 2001, the parties compromised the 1998 Proceeding by written terms of settlement which required the transfer by Jan Emil of all rights, title and interest in certain properties to a person nominated by the plaintiffs. The terms also required that Jan Emil not deal with those properties otherwise than in accordance with the settlement14. In July 2005, the plaintiffs reactivated the 1998 Proceeding, alleging that Jan Emil had failed to transfer the relevant properties in accordance with the terms of settlement15. On 24 April 2008, Osborn J of the Supreme Court of Victoria held that Jan Emil had breached the terms of settlement of the 1998 Proceeding, but left the extent of relief to be determined upon a further hearing16. On 12 May 2009, Jan Emil executed three donation agreements with his sons, David and Paul, by which he agreed to transfer to them certain properties in the Czech Republic17. 11 Bennett v Talacko [2016] VSCA 179 at [127], [129]. 12 Bennett v Talacko [2016] VSCA 179 at [132]. 13 Bennett v Talacko [2016] VSCA 179 at [132]. 14 Bennett v Talacko [2016] VSCA 179 at [133]. 15 Bennett v Talacko [2016] VSCA 179 at [134]. 16 Talacko v Talacko [2008] VSC 128 at [218]-[221]. 17 Bennett v Talacko [2016] VSCA 179 at [136]. Bell Gordon Edelman On 28 October 2009, Wood AsJ of the Supreme Court of Victoria made a costs order in the 1998 Proceeding requiring Jan Emil to pay the plaintiffs in that proceeding an interim sum of $81,914.4018. On 24 November 2009, Kyrou J delivered judgment in the 1998 Proceeding. His Honour held that the plaintiffs were entitled to equitable compensation, pursuant to the terms of settlement19. On 11 December 2009, his Honour made final orders requiring Jan Emil to pay the plaintiffs the total sum of €10,073,818 by way of equitable compensation20. On 18 March 2011, an appeal by Jan Emil from that decision to the Court of Appeal of Victoria was dismissed21, as was a subsequent application for special leave to appeal to this Court22. On 4 November 2011, Alexandra, Martin and Rowena, who are the first to third respondents to this appeal ("the respondents"), commenced two proceedings in the courts of the Czech Republic: one seeking to enforce the orders of Kyrou J for the payment of equitable compensation ("the Execution Proceeding"), and the other seeking to contest the effectiveness of donations made by Jan Emil in favour of David and Paul23. On 7 November 2011, Jan Emil was made bankrupt by order of North J of the Federal Court of Australia, upon the petition of the same five members of the Talacko family who were the plaintiffs in the 1998 Proceeding24. 18 Bennett v Talacko [2016] VSCA 179 at [137]. 19 Talacko v Talacko [2009] VSC 533 at [372], [215]. 20 Talacko v Talacko [2009] VSC 579 at [72]; Bennett v Talacko [2016] VSCA 179 at 21 Talacko v Talacko (2011) 31 VR 340. 22 Talacko v Talacko [2011] HCATrans 301. 23 Bennett v Talacko [2016] VSCA 179 at [141]. 24 Bennett v Talacko [2016] VSCA 179 at [142]. Bell Gordon Edelman The Certificates On 4 July 2012, upon the request of the respondents, the Prothonotary of the Supreme Court of Victoria issued a document entitled "Certificate of Finality of Judgments and Orders", evidently in reliance on s 15 of the Foreign Judgments Act25 ("the First Certificate"). The First Certificate stated that the various judgments and orders that had been made in favour of the plaintiffs in the 1998 Proceeding were "FINAL, BINDING AND ENFORCEABLE according to law"26. That certificate was subsequently filed in the Execution Proceeding27. On 10 December 2012, in the bankruptcy of Jan Emil, North J granted leave nunc pro tunc to the respondents, pursuant to s 58(3) of the Bankruptcy Act, to commence an application in the Supreme Court of Victoria Costs Court for the assessment and taxation of their costs in the foregoing proceedings, and to continue to take further steps towards judgment. This included defending or pursuing any appeal, provided that no step be taken to enforce any judgment against Jan Emil without the prior leave of the Court28. By this time Helena had died, and so an order was made giving leave to her son, Jan, to appear on behalf of her estate (which he continues to do as fourth respondent to this appeal). On 16 September 2013, Kyrou J made a final costs order in the 1998 Proceeding requiring Jan Emil to pay the plaintiffs in that proceeding a total sum When Jan Emil became aware of the existence of the First Certificate, he began to take steps to have it set aside, and on 30 October 2014, his solicitor issued a summons in the 1998 Proceeding seeking orders to that effect29. However, on 3 November 2014, Jan Emil died intestate30. 25 Bennett v Talacko [2016] VSCA 179 at [143]. 26 Bennett v Talacko [2016] VSCA 179 at [145]. 27 Talacko v Talacko (2015) 305 FLR 353 at 362 [21]. 28 Bennett v Talacko [2016] VSCA 179 at [147]. 29 Bennett v Talacko [2016] VSCA 179 at [152]. 30 Bennett v Talacko [2016] VSCA 179 at [153]. Bell Gordon Edelman On 16 December 2014, Jan Emil's widow, Judith, issued a summons in the 1998 Proceeding by which she applied for orders that she be appointed to represent the estate of Jan Emil for the purpose of conducting an application. Judith also sought declarations that the Prothonotary of the Supreme Court of Victoria had exceeded his authority in issuing the First Certificate and that the First Certificate was invalid, and orders that the First Certificate be set aside, or amended if the Court deemed appropriate31. On 4 February 2015, Daly AsJ of the Supreme Court of Victoria dismissed Judith's summons32. On 18 February 2015, Judith filed a notice of On 23 February 2015, upon the request of the respondents, the Prothonotary of the Supreme Court of Victoria issued a further document ("the Second Certificate") in evident reliance on s 15 of the Foreign Judgments Act, which stated that "[t]his certificate is an amendment and replaces in its entirety [the First Certificate]". There were some differences between the two certificates, but it is not necessary for the purposes of this appeal to consider these differences: nothing now turns on them. It is sufficient to observe that the effect of the issuing of the Second Certificate was to render futile Judith's notice of appeal of 18 February 201534. And so, on 8 May 2015, Judith issued a fresh summons by which she sought to have both the First Certificate and the Second Certificate revoked, declared invalid or set aside, and to have the Court appoint her as Jan Emil's representative for the purpose of conducting that application35. This summons raised the issue as to the effect of s 58(3) of the Bankruptcy Act upon the respondents' application for a certificate under s 15 of the Foreign Judgments Act. 31 Bennett v Talacko [2016] VSCA 179 at [156]. 32 Bennett v Talacko [2016] VSCA 179 at [158]. 33 Bennett v Talacko [2016] VSCA 179 at [160]. 34 Talacko v Talacko (2015) 305 FLR 353 at 373-374 [55]-[57]; Bennett v Talacko [2016] VSCA 179 at [164]. 35 Bennett v Talacko [2016] VSCA 179 at [166]. Bell Gordon Edelman Before proceeding to a consideration of the determination of this issue by the courts below, it is convenient to set out the material provisions of the legislation which bear upon it. Foreign Judgments Act The Foreign Judgments Act enables a judgment creditor to obtain a certificate from the Australian court which has rendered the judgment, in order to facilitate the enforcement of the judgment by the courts of a foreign legal system. Section 15 of the Foreign Judgments Act relevantly provides: "(1) Subject to this section, where an application is duly made by a judgment creditor who wishes to enforce in a country a judgment that has been given in an Australian court, the Registrar of the court must issue to the judgment creditor: a certified copy of the judgment; and a certificate with respect to the judgment containing such particulars, including: the causes of action to which the judgment relates; and the rate of interest (if any) payable on any amount payable under the judgment; as are prescribed by the regulations or by Rules of Court. (2) An application may not be made until the expiration of any stay of enforcement of the judgment in question." Importantly, s 3(1) of the Foreign Judgments Act provides that, unless the contrary intention appears, "enforcement" means "where there is an amount of money payable under the judgment, enforcement by execution". Insofar as the enforcement of the judgment for payment of an amount of money by way of equitable compensation is concerned, enforcement means "enforcement by execution" of the rights conferred by the judgment. Part 2 of the Foreign Judgments Act – entitled "Reciprocal enforcement of judgments" – "establishes a regime for the registration and enforcement of Bell Gordon Edelman judgments of foreign courts" in Australia36. Its operation is premised on there being "substantial reciprocity of treatment" in relation to the enforcement in a particular foreign country of "money judgments given in all Australian superior courts"37. If the Governor-General is satisfied that such treatment will be assured in the event that Pt 2 is applied to money judgments given in the superior courts of the foreign country, then regulations may be made extending the operation of Pt 2 to that foreign country38. Section 15 is contained in Pt 3 – "Miscellaneous". Section 15(1) facilitates the reciprocal treatment upon which Pt 2 hinges by enabling a judgment creditor who "wishes to enforce", in a foreign jurisdiction, a judgment given in an Australian court to obtain a certified copy of the judgment and a certificate with respect to that judgment. As is plain from the requirement that only a judgment creditor who wishes to enforce an Australian judgment in a foreign country can make an application under s 15(1), the purpose of those documents being issued is to enable a judgment creditor to rely on them in a foreign court to enforce the Australian judgment in a foreign country. It is against that legislative background that the question of statutory construction in this case is to be considered: the proper construction of the phrase "any stay of enforcement of the judgment" in s 15(2) of the Foreign Judgments Act and, in particular, whether that phrase extends to include the operation of s 58(3) of the Bankruptcy Act. Bankruptcy Act "An essential feature of any modern system of bankruptcy law is that provision is made for the appropriation of the assets of the debtor and their equitable distribution amongst his creditors"39. The Bankruptcy Act implements such a system. The Bankruptcy Act includes provisions "to stop individual 36 PT Bayan Resources TBK v BCBC Singapore Pte Ltd (2015) 89 ALJR 975 at 980 [20]; 325 ALR 168 at 174; [2015] HCA 36. 37 Section 5(1) of the Foreign Judgments Act. See PT Bayan (2015) 89 ALJR 975 at 980 [21]; 325 ALR 168 at 174. See also s 5(3) of the Foreign Judgments Act. 38 Section 5(1) of the Foreign Judgments Act. 39 Storey v Lane (1981) 147 CLR 549 at 556; [1981] HCA 47. See also Re McMaster; Ex parte McMaster (1991) 33 FCR 70 at 72-73. Bell Gordon Edelman action by creditors for the purpose of obtaining payment of the debts due to them when the aim of the law is to secure administration of the debtor's assets in the interest of the creditors generally"40. Such provisions are necessary "to prevent one creditor obtaining an undue advantage over the others, and to prevent the scheme of the [Bankruptcy Act] from being defeated"41. Section 58(3) is one of those provisions42. Section 58 of the Bankruptcy Act provides relevantly as follows: "(1) Subject to this Act, where a debtor becomes a bankrupt: the property of the bankrupt … vests forthwith in the Official Trustee … Except as provided by this Act, after a debtor has become a bankrupt, it is not competent for a creditor: to enforce any remedy against the person or the property of the bankrupt in respect of a provable debt; or except with the leave of the Court and on such terms as the Court thinks fit, to commence any legal proceeding in respect of a provable debt or take any fresh step in such a proceeding." Section 58(3) operates in aid of s 58(1) to ensure that the property of the bankrupt which has vested in the Official Trustee, so as to be available for distribution to creditors in accordance with the other provisions of the Bankruptcy Act, is not depleted to the advantage of individual creditors and the disadvantage of creditors generally. That purpose is also aided by s 60 of the Bankruptcy Act, which relevantly provides: 40 Storey (1981) 147 CLR 549 at 557. 41 Storey (1981) 147 CLR 549 at 557. 42 See Piccone v Suncorp Metway Insurance Ltd (2005) 148 FCR 437 at 440 [11]. Bell Gordon Edelman "(1) The Court may, at any time after the presentation of a petition … stay any legal process … against the person or property of the debtor: in respect of the non-payment of a provable debt … (2) An action commenced by a person who subsequently becomes a bankrupt is, upon his or her becoming a bankrupt, stayed until the trustee makes election, in writing, to prosecute or discontinue the action." It may be noted that the power conferred on the Court by s 60(1)(b) may be exercised at any time, from the presentation of a petition, throughout the consequent bankruptcy, and even after the bankrupt has been discharged from bankruptcy43. Section 60 complements s 58. In Storey v Lane44, Gibbs CJ explained that the object of s 60 is: "to ensure that if a sequestration order is (or has been) made against the estate of the debtor his assets will be available for administration in the interest of his creditors generally, to prevent one creditor, who has the right to enforce payment of his debt under some other law, from exercising that right so as to gain an advantage over other creditors". It may be noted that s 60(1)(b)(i), which forms part of the context in which s 58(3)(a) appears, expressly refers to a "stay" as an order of a court. In contrast, s 58(3)(a) does not use that language. This difference in language might be said to assist an argument that the state of affairs wrought by s 58(3)(a), rather than by an order of a court, is not "a stay" for the purposes of the Bankruptcy Act. On the other hand, s 60(2) expressly refers to a stay that occurs by operation of the statute. That might be said to detract from the respondents' argument that a "stay" is necessarily a court-ordered stay. It might also be said that the express use of the word "stay" in s 60(2) suggests that what is brought about by s 58(3)(a) is not a stay within the meaning of the Bankruptcy Act. In the end, however, these straws in the wind are of little assistance because the issue for determination turns on the meaning of "stay" in s 15(2) of the Foreign 43 Re Malins; Ex parte The Bankrupt; Robinson (1936) 9 ABC 140; Re Rooney; Ex parte Rooney (1986) 13 FCR 175. 44 (1981) 147 CLR 549 at 556. Bell Gordon Edelman Judgments Act having regard to the effect of s 58(3) of the Bankruptcy Act on the enforcement of the rights of a judgment creditor. The primary judge On 12 November 2015, Sloss J determined that Judith should be appointed as the representative of the estate of Jan Emil for the purposes of conducting the application for the orders set out in the summons of 8 May 201545. Her Honour also gave reasons presaging the making of a declaration that the First Certificate and the Second Certificate were invalid46. Her Honour concluded that the certificates were invalid for two reasons. The first was that s 58(3) of the Bankruptcy Act operates so as to impose a "stay of enforcement of the judgment" within the meaning of s 15(2) of the Foreign Judgments Act47. Secondly, the Prothonotary's power to issue a certificate is enlivened only when "an application is duly made by a judgment creditor who wishes to enforce in a country a judgment that has been given in an Australian court"; in her Honour's view, the respondents did not wish to enforce the judgment in the Czech Republic, as they had contended that they sought only to have the judgment "recognised", but not enforced, in the Czech proceedings48. On 4 February 2016, Sloss J made orders to the effect foreshadowed in her reasons, declaring the First Certificate and the Second Certificate to be invalid. At this point, it is necessary to say something about the limited basis on which the respondents put their case before Sloss J. The argument advanced on their behalf did not seek to dispute that s 58 operated without regard to any personal equities which they might have sought to enforce against Jan Emil. Further, neither before the primary judge, nor, for that matter, before the Court of Appeal or this Court, did the respondents seek to argue that their rights against Jan Emil were not merely those that subsist between creditor and debtor within 45 Talacko v Talacko (2015) 305 FLR 353 at 406 [170], 407 [174]. 46 Talacko v Talacko (2015) 305 FLR 353 at 375-393 [63]-[114]. 47 Talacko v Talacko (2015) 305 FLR 353 at 385 [89]. 48 Talacko v Talacko (2015) 305 FLR 353 at 392 [113]. Bell Gordon Edelman The respondents did not argue that, because the vesting of property effected by s 58(1) operates subject to equities which affect it in the hands of the bankrupt49, Jan Emil was accountable to them as a fiduciary. They did not argue that their entitlement to equitable compensation for the loss of their equitable interest in the properties meant that their claims, albeit for the payment of money, were to enforce obligations to them in respect of properties that were, in the eye of equity, held by Jan Emil for their benefit. Nor did the respondents argue that, insofar as their claim against Jan Emil was for the payment of money by way of equitable compensation, it was immaterial that the land to which Jan Emil's fiduciary obligations to them attached was in another country50. Attention is drawn to the narrow basis of the respondents' argument, not by way of criticism of the manner in which the case for the respondents has been conducted – there may have been good reason for the course which has been taken – but to make the point that the case advanced by them turns solely on whether the state of affairs wrought by s 58(3) of the Bankruptcy Act amounts to a stay of enforcement by execution within the meaning of s 15(2) of the Foreign Judgments Act. The Court of Appeal On 2 March 2016, the respondents filed an application for leave to appeal in the Court of Appeal of Victoria, contending that Sloss J erred in holding the First Certificate and the Second Certificate to be invalid. In opposing the respondents' application, Judith sought to have the judgment of Sloss J affirmed, not because, as Sloss J had held, the respondents did not, in fact, wish to enforce 49 Ex parte James; In re Condon (1874) LR 9 Ch App 609; In re Clark (A Bankrupt); Ex parte The Trustee v Texaco Ltd [1975] 1 WLR 559; [1975] 1 All ER 453; Re M and J De Wit; Ex parte Custom Credit Corporation Ltd; Official Receiver (1961) 19 ABC 63. 50 Cf Deschamps v Miller [1908] 1 Ch 856 at 863. See also Cranstown (Lord) v Johnston (1796) 3 Ves 170 at 182 [30 ER 952 at 958-959]; Carron Iron Co v Maclaren (1855) 5 HL Cas 416 at 439 [10 ER 961 at 971]; Companhia de Mocambique v British South Africa Co [1892] 2 QB 358 at 364; In re The Anchor Line (Henderson Brothers) Ltd [1937] Ch 483 at 488; Razelos v Razelos (No 2) [1970] 1 WLR 392; [1969] 3 All ER 929. Bell Gordon Edelman the judgment, but rather because the application itself was the enforcement of a remedy contrary to s 58(3)(a) of the Bankruptcy Act51. Jan (as executor of the estate of his mother, Helena) was made the second respondent to the proceedings before the Court of Appeal to ensure that all necessary parties were before the Court; however, by notice dated 6 April 2016, he informed the Court that his mother's estate did not intend to respond to the application for leave to appeal52. Similarly, he filed a submitting appearance as fourth respondent in the appeal before this Court. It also appears that Margaret had, by this stage, ceased to be involved in the litigation. On 28 July 2016, the Court of Appeal of Victoria by majority (Ashley and Priest JJA; Santamaria JA dissenting) allowed the appeal53. While each of the judges wrote separately, the majority were in agreement on two key points: first, that the expression "stay of enforcement" in s 15(2) of the Foreign Judgments Act refers only to a judicially ordered stay (or similar) and accordingly does not extend to include any statutory bar imposed by s 58(3) of the Bankruptcy Act54; and second, that the application made under s 15(1) of the Foreign Judgments Act did not amount to the enforcement of a remedy contrary to s 58(3)(a) of the Bankruptcy Act so as to prevent the application being "duly made" pursuant to s 15(1) – rather, the application was merely a step towards having the judgment "recognised" in the Czech proceedings, that being a step antecedent to enforcement within the meaning of s 58(3)55. Both Ashley JA and Priest JA went on to hold, in addition, that Sloss J erred in concluding that the respondents did not "wish to enforce" the judgment in a foreign court56. Because the appeal to this Court must be allowed on the basis that their Honours erred in their view of the operation of s 15(2), it is 51 Bennett v Talacko [2016] VSCA 179 at [80]. 52 Bennett v Talacko [2016] VSCA 179 at [174]. 53 Bennett v Talacko [2016] VSCA 179. 54 Bennett v Talacko [2016] VSCA 179 at [7], [108]. 55 Bennett v Talacko [2016] VSCA 179 at [25], [90], [93]. 56 Bennett v Talacko [2016] VSCA 179 at [21]-[22], [109]. Bell Gordon Edelman unnecessary to consider further this aspect of the case before the Court of Appeal. As to s 15(2) of the Foreign Judgments Act, Ashley JA held that the expression "'the expiration of any stay', is … redolent of a judicially ordered stay on execution"57. His Honour also held that, even if "stay of enforcement" were construed to encompass statutory stays, it would not follow that s 58(3) imposes such a stay58 because neither the application for, nor the issue of, the certificate under s 15(1) of the Foreign Judgments Act was itself the enforcement of a remedy. Rather, his Honour said an enforcement action in reliance on a certificate is a step that might be taken at a later stage, at which point s 58(3)(a) would then deny the respondents competence to proceed59. Nor, his Honour held, did s 58(3)(b) impede the making of an application, for once the judgment of Kyrou J was upheld, the only step in a legal proceeding that remained to be taken would be the execution of the judgment, which is the exclusive province of s 58(3)(a)60. that r 11.11(c)(i) of the Supreme Court (Miscellaneous Civil Proceedings) Rules 2008 (Vic) ("the Victorian Rules") requires that certificates under s 15(1) of the Foreign Judgments Act state "that the proceeding is at an end except for enforcement of the judgment", which was said to support the construction that "stay of enforcement" means a judicially ordered stay61. As to this last point, it may be said immediately that, as a general proposition, State rules for practice and procedure of State courts cannot determine the meaning of a Commonwealth statute, and that the Victorian Rules, in particular, do not purport to do so. Priest JA also held that "stay of enforcement" in s 15(2) comprehends only a judicially imposed stay (or similar)62. His Honour also held that the purpose of 57 Bennett v Talacko [2016] VSCA 179 at [9]. 58 Bennett v Talacko [2016] VSCA 179 at [11]. 59 Bennett v Talacko [2016] VSCA 179 at [26]. 60 Bennett v Talacko [2016] VSCA 179 at [31]. 61 Bennett v Talacko [2016] VSCA 179 at [12]. 62 Bennett v Talacko [2016] VSCA 179 at [108]. Bell Gordon Edelman the application for the certificate under s 15(1) of the Foreign Judgments Act was not to "enforce" the judgment in the sense of seeking "to compel observance of" it63: rather, the application was a step precursory to enforcement64. Santamaria JA, in dissent, held that the incompetence of a judgment creditor to enforce remedies brought about by s 58(3)(a) is general, and includes the making of an application under s 1565. Santamaria JA reasoned66 that, just as a judgment creditor of a bankrupt could not invoke the provisions of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) or the Federal Court Rules 2011 (Cth) that relate to enforcement, so too is he or she disabled from invoking s 15 of the Foreign Judgments Act. This reading of s 15 was said to be consistent with the design of the Bankruptcy Act, which, once a sequestration order is made, converts a creditor's right of action into a right to prove in the Santamaria JA reasoned that, although the word "stay" may properly be said to have a particular reference to legal proceedings, the phrase "any stay of enforcement of the judgment in question" in s 15(2) is unqualified by any indication that it refers exclusively to a stay which has been imposed by judicial order68. In addition, Santamaria JA did not consider that the phrase "the expiration of" in s 15(2) tilted the balance in favour of the construction advanced by the respondents. His Honour reasoned that, while a judicial stay may expire, it may also terminate in other ways – for instance, by being lifted, amended or revoked – while a stay imposed by statute may also expire69. 63 Bennett v Talacko [2016] VSCA 179 at [92], citing Fraser v Commissioner of Taxation (1996) 69 FCR 99 at 111. 64 Bennett v Talacko [2016] VSCA 179 at [93]. 65 Bennett v Talacko [2016] VSCA 179 at [207]. 66 Bennett v Talacko [2016] VSCA 179 at [207]. 67 Bennett v Talacko [2016] VSCA 179 at [210]. 68 Bennett v Talacko [2016] VSCA 179 at [195]. 69 Bennett v Talacko [2016] VSCA 179 at [196]. Bell Gordon Edelman By special leave, Judith (as representative of Jan Emil's estate) brought an appeal to this Court against the decision of the Court of Appeal. The submissions of the parties The appellant's arguments The appellant argued that the view of s 15(2) taken by the majority in the Court of Appeal would circumvent the purposes of the Bankruptcy Act, because its consequence would be that, upon the making of a sequestration order, a judgment creditor of the bankrupt would be prohibited from enforcing the judgment in Australia, but could nevertheless apply to enforce the judgment overseas. Echoing Santamaria JA, the appellant emphasised that nothing in the text of s 15(2) qualifies the words "any stay of enforcement of the judgment in question" so as to limit the provision exclusively to judicially ordered stays. Further, it was said that the words "the expiration of" do not confine the meaning of "stay" to a judicial stay, as stays imposed by statute may also expire. In this regard, the appellant submitted that Ashley JA's observation that "'the expiration of any stay', is … redolent of a judicially ordered stay" collapses under the weight of his Honour's acknowledgement that a statute might prescribe something which could be described as a stay and which might also expire in certain prescribed circumstances. The appellant submitted that Priest JA attached too much significance to the circumstance that s 58(3)(a) provides that "it is not competent for a creditor … to enforce any remedy", rather than stating simply that enforcement of such a remedy is "stayed". It was said that Priest JA paid insufficient regard to the purpose and function of s 58(3), which is to deny to individual creditors the right to enforce any remedy against the person or the property of the bankrupt in respect of a provable debt. It was submitted that, so long as the substantive effect of s 58(3) is to prevent enforcement by execution, the absence of the word "stay" from s 58(3) cannot be determinative of the operation of s 15(2). There is force in this submission. The Bankruptcy Act does not control the operation of the Foreign Judgments Act: s 15(2) may be engaged by a range of circumstances other than the operation of the Bankruptcy Act. It is to the purpose of s 15(2) of the Foreign Judgments Act that one must look to discern its true meaning. That purpose may be considered after the respondents' submissions have been addressed. Bell Gordon Edelman The respondents' arguments The respondents argued that a "stay of enforcement of a judgment" has a settled, technical legal meaning, being a stay ordered by a court that operates directly on an order or judgment and not, in contrast, on the party who might otherwise seek enforcement of that judgment. It was said that where, in framing a statutory provision, the Parliament chooses to use a technical legal term, the term should be presumed to bear that meaning unless its context indicates a different meaning. In support of their favoured meaning of "stay of enforcement of a judgment", the respondents called in aid the observations of this Court in Whan v McConaghy70, where it was said that a "stay of execution, as its name implies, operates directly on the judgment or order the subject of the stay" and in doing so, "interfere[s] with the operation of the order". So much may be accepted for the sake of argument, although one may note that s 60(2) of the Bankruptcy Act furnishes an example of a departure from the technical legal meaning of "stay" urged by the respondents. The respondents went on, however, to argue that s 58(3)(a) of the Bankruptcy Act operates, not on the judgment, but on the judgment creditor, by denying that person competence to execute the judgment. Accordingly, so it was said, s 58(3)(a) lacks a characteristic feature of a stay of enforcement of a judgment. That contention may be dealt with immediately. Given that the only person who could seek to enforce a judgment pursuant to s 15 of the Foreign Judgments Act is a judgment creditor (or perhaps a person standing in his or her shoes), the distinction sought to be drawn by the respondents is a distinction with no bearing on the meaning or operation of s 15(2) of the Foreign Judgments Act. The respondents also argued, echoing Ashley and Priest JJA, for the drawing of a distinction between a stay of execution of a judgment and a stay on the operation of the judgment71. It was said that even if s 58(3) prevents execution upon a judgment, the judgment still exists for other purposes and may usefully be invoked by the judgment creditor, for example, by way of set-off72. This contention should also be rejected, for reasons which may be stated briefly. 70 (1984) 153 CLR 631 at 638; [1984] HCA 22. 71 Cf Re Hughes; Ex parte Westpac Banking Corporation unreported, Federal Court of Australia, 28 November 1997 per Merkel J. 72 Pollack v Commissioner of Taxation (1991) 32 FCR 40 at 51. Bell Gordon Edelman Section 58(3)(a) is concerned with the execution of a judgment, as distinct from steps in a proceeding toward obtaining the judgment in question73. Indeed, in Clyne v Deputy Commissioner of Taxation74, Gibbs CJ, Murphy, Brennan and Dawson JJ doubted that the word "remedy" in s 58(3)(a) of the Bankruptcy Act includes a remedy by way of an action or suit because of the express reference in s 58(3)(b) to a legal proceeding. The circumstance that s 58(3)(b) expressly contemplates the possibility that a fresh legal proceeding may be commenced or an existing proceeding further pursued (albeit with the leave of the Court) in respect of a provable debt tends to confirm that s 58(3)(a) refers, not to a case where the entitlement to the remedy has yet to be established by judgment, but to a case where it is sought to execute upon an entitlement which has been so established. All that having been said, the crucial point remains that s 15(2) of the Foreign Judgments Act prohibits the making of an application for a certificate until the expiration of any stay on the enforcement by execution of the judgment in question. The issue is not whether there might be some utility in having the judgment recognised in the Czech Republic, for example as a basis for a set-off against a claim by the appellant against the respondents. The issue is whether s 15(2) of the Foreign Judgments Act prohibited the making of an application while the judgment could not, by Australian law, be enforced by execution. The meaning of s 15(2) of the Foreign Judgments Act One must focus upon s 15(2) of the Foreign Judgments Act to determine whether the prevention of the execution of a judgment brought about by s 58(3) of the Bankruptcy Act is a stay of enforcement within the meaning of s 15(2). The meaning of s 15(2) is to be determined by reference to considerations of text, context and purpose75. 73 Fraser v Commissioner of Taxation (1996) 69 FCR 99 at 111-112, citing R v Bates [1982] 2 NSWLR 894 at 895; Piccone v Suncorp Metway Insurance Ltd (2005) 148 FCR 437 at 443 [21], 444 [25]. See also Clyne v Deputy Commissioner of Taxation (1984) 154 CLR 589 at 594-595; [1984] HCA 44. 74 (1984) 154 CLR 589 at 595. 75 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 [69]-[70]; [1998] HCA 28; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 45-46 [44]; [2009] HCA 41. Bell Gordon Edelman In Commonwealth legislation, the use of the word "stay" is not confined to stays imposed by courts. It appears that, in addition to s 60(2) of the Bankruptcy Act, as Santamaria JA noted76, s 91 of the Insurance Act 1973 (Cth), s 161 of the Life Insurance Act 1995 (Cth), s 189AAA of the Bankruptcy Act itself, s 16 of the Cross-Border Insolvency Act 2008 (Cth) and s 58DD of the Federal Court of Australia Act 1976 (Cth) are examples of stays which operate without judicial process. Finally, so far as the text of s 15(2) is concerned, the use of the word "any" in relation to "stay" is some, though perhaps not a decisive, indication of a legislative intention to comprehend any legal impediment to execution upon the judgment. As to the significance of s 60(1)(b) and (2) of the Bankruptcy Act, there is no reason to regard these provisions as part of the context in which s 15(2) of the Foreign Judgments Act is to be understood. As noted above, there may be sources of a legal impediment to the execution of a judgment other than the Bankruptcy Act; the Foreign Judgments Act is not to be understood as if it were one element of a single legislative measure to which the Bankruptcy Act made exclusive provision for the other element. The issue is not whether the expression "stay of enforcement of the judgment in question" in s 15(2) of the Foreign Judgments Act has the same meaning as the expressions "stay [of] legal process" in s 60(1)(b) or "stay" of an action in s 60(2) of the Bankruptcy Act. The issue is whether s 58(3)(a) of the Bankruptcy Act, by preventing the execution of the judgment in the 1998 Proceeding, has the effect of preventing the execution of the judgment for the purpose of s 15(2) of the Foreign Judgments Act. The evident purpose of s 15(2) is to prevent an application for a certificate which, if granted, would facilitate the enforcement by execution by a foreign legal system of a judgment which is not enforceable by execution under the law in Australia. In this regard, the Explanatory Memorandum for the Foreign Judgments Bill 1991 explained in cl 2 that the Bill was largely modelled on the Foreign Judgments (Reciprocal Enforcement) Ordinance 1954 (ACT), which was the Foreign Judgments (Reciprocal Enforcement) Act 1933 (UK). The UK Act was the product of the work of the ("the Greer Foreign Committee"). In the Report of the Greer Committee in relation to a measure that was the precursor to s 15(2) of the Foreign Judgments Act, it was said that the (Reciprocal Enforcement) Committee turn substantially modelled on Judgments 76 Bennett v Talacko [2016] VSCA 179 at [197]. Bell Gordon Edelman certified copy of the British judgment was "not to be issued if execution has been stayed"77 (emphasis added). The "mischief" of concern to the Committee was that a foreign court might be presented with a certified copy of a British judgment to be carried into execution by that foreign court in circumstances where the judgment could not be executed by a British court. The Committee's Report did not suggest any reason to differentiate between a stay of execution effected by an order of a court and a stay imposed by statute in relation to the concern at which the measure was directed. And no such reason suggests itself. It is impossible to conceive of any good reason why a judgment that cannot lawfully be executed under Australian law should be allowed to be executed in another country at the behest of an Australian court. Given that the purpose of s 15(2) is to prevent the possibility of a foreign court acting upon a certificate to allow the execution of a judgment the execution of which would not be permitted under Australian law, there is no reason to distinguish between the case of a stay ordered by a court and a stay imposed by statute. It is not possible to attribute to s 15(2) an intention that a foreign court should enforce a judgment by execution which would not be permitted in Australia simply because the impediment to execution is brought about by statute rather than by an order of a court. Effect of s 58(3)(a) of the Bankruptcy Act The effect of s 58(3)(a) is to preclude a creditor from enforcing any remedy against "the person or the property of the bankrupt in respect of a provable debt". One would naturally speak of the effect of s 58(3)(a) as a "stay" of enforcement by execution upon the judgment78. To adopt the words of Denning J in describing the effect of a "stay of execution", it prevents a creditor "from putting into operation the machinery of [the] law"79. To remove s 58(3) from the reach of s 15(2) of the Foreign Judgments Act because it does not 77 Foreign Judgments Cmd 4213 at 65. (Reciprocal Enforcement) Committee, Report, 78 Foots v Southern Cross Mine Management Pty Ltd (2007) 234 CLR 52 at 59 [14], [15]; [2007] HCA 56. See also Re John Perkin Seers (1955) 17 ABC 11 at 12-13; Re Johnson; Ex parte Johnson v Tonkin (1994) 53 FCR 70 at 76-77. 79 Clifton Securities Ltd v Huntley [1948] 2 All ER 283 at 284. Bell Gordon Edelman expressly refer to a "stay" would be to elevate form over substance without any justification. The reason a judgment creditor seeks to obtain certification under s 15(1) of the Foreign Judgments Act is so that steps can be taken to enforce the judgment in a foreign country. And once documents are issued under s 15(1), there is nothing in Australian law to prevent the certification being relied upon to take steps to enforce the Australian judgment in a foreign country. To exclude the operation of s 58(3) from the reach of s 15(2) of the Foreign Judgments Act would be to undermine "an essential feature" of the Bankruptcy Act – it would enable a judgment creditor to take individual action for the purpose of obtaining payment of a debt due to them, thus obtaining an unfair advantage over other creditors80. The respondents' contention that s 58(3)(a) of the Bankruptcy Act is to be excluded from the reach of s 15(2) of the Foreign Judgments Act because s 58(3)(a) of the Bankruptcy Act would, itself, prevent action being taken by a judgment creditor in a foreign jurisdiction is also rejected. Section 15(2) of the Foreign Judgments Act is expressed to operate, and does operate, as an absolute bar to an application for a certificate. It neither requires nor permits the Registrar of an Australian court to undertake some assessment about the use to which the documents might be put in a foreign country by the judgment creditor or, as occurred here, by the authorities in that country. In the present case, the evidence before the primary judge disclosed that after the Municipal Court in Prague confirmed the enforcement of the orders of the Supreme Court of Victoria, a bailiff in the Czech Republic had taken enforcement action against assets in the Czech Republic, including ordering the forced sale of property and confiscating funds in a bank account. It is the risk of such events occurring once documents have been issued under s 15(1) of the Foreign Judgments Act that explains why Parliament chose to impose the absolute bar in s 15(2). Orders For these reasons, the appeal should be allowed, and orders 2 to 6 of the Court of Appeal of the Supreme Court of Victoria made in proceeding S APCI 2016 0024 on 28 July 2016 should be set aside. 80 Storey (1981) 147 CLR 549 at 556. Bell Gordon Edelman In place of those orders, the appeal to the Court of Appeal of the Supreme Court of Victoria should be dismissed, and the first to third respondents should pay the appellant's costs in proceeding S APCI 2016 0024. The first to third respondents should pay the appellant's costs of the appeal to this Court. Agreeing with the reasons of Kiefel CJ, Bell, Keane, Gordon and Edelman JJ, and the observations of Nettle J, I join in allowing the appeal and making the consequential orders proposed. Nettle NETTLE J. I agree with the plurality that the appeal should be allowed but wish to add the following observations. Conventionally, the expression "stay of execution" is taken to refer to an order of a court that prevents a judgment being executed81. It may equally be conceived of, as Santamaria JA recognised in the Court of Appeal82, as referring to the effect of a statutory provision83 that prevents a judgment being executed. But, as the first to third respondents submitted, there is a distinction between a court order or statutory provision which prevents a judgment being executed and a court order or statutory provision which prohibits a party taking steps to enforce a judgment by execution. The former operates on the judgment itself by depriving the judgment of enforceability for the period of the stay. The latter operates in personam, against the party to whom it is directed, as a restraint on that party taking steps that would otherwise be available to enforce the judgment by execution. Section 58(3) of the Bankruptcy Act 1966 (Cth) is a mechanism of the latter kind. As Sackville AJA stated in Wardle v Agricultural & Rural Finance Pty Ltd (No 3)84, it does not operate automatically as a stay of proceedings, but rather imposes restrictions on the steps available to a creditor. It does not follow, however, that s 15(2) of the Foreign Judgments Act 1991 (Cth) is to be read as referring only to stays of execution of the kind which operate directly on judgments to deprive them of enforceability for the period of the stay. Section 15(2) refers to a "stay of enforcement", presumably by execution, of a judgment, as opposed to a "stay of execution". The words of s 15(2) of the Foreign Judgments Act thus yield a constructional choice between, on the one hand, a narrow understanding of "stay of enforcement [by execution]" 81 See Ballentine's Law Dictionary, 3rd ed (1969) at 1215, "stay of execution"; Butterworths Australian Legal Dictionary, (1997) at 1117, "stay of execution"; Black's Law Dictionary, 10th ed (2014) at 1639, "stay", sense 2; Jowitt's Dictionary of English Law, 4th ed (2015), vol 2 at 2306, "stay". See also Whan v McConaghy (1984) 153 CLR 631 at 638 per Mason, Murphy, Wilson and Deane JJ; [1984] HCA 22; P Aker Flowerbulbs Pty Ltd v Coulter (2004) 140 FCR 410 at 418 [40]. 82 Bennett v Talacko [2016] VSCA 179 at [195], [197]-[198], [201]; see also at [6] per Ashley JA. See also Black's Law Dictionary, 10th ed (2014) at 1639, "stay", sense 1. 83 See, for example, Bankruptcy Act 1966 (Cth), ss 60(2), 189AAA; Insurance Act 1973 (Cth), ss 62P, 91; Federal Court of Australia Act 1976 (Cth), s 58DD(1); Life Insurance Act 1995 (Cth), s 161; Corporations Act 2001 (Cth), ss 440D, 471B; Cross-Border Insolvency Act 2008 (Cth), s 16. 84 (2013) 303 ALR 298 at 312 [64] (McColl JA and Barrett JA agreeing at 300 [1], Nettle as equivalent to "stay of execution" strictly so-called, and, on the other hand, a more expansive interpretation of the words "stay of enforcement [by execution]" that embraces in personam anti-enforcement mechanisms which, although operating in personam, achieve an essentially identical result to a stay of execution strictly so-called. Consistently with the established approach of this Court to statutory construction85, the meaning of s 15(2) of the Foreign Judgments Act is to be derived from its text, context and purpose. As has been observed, the text is equivocal. The context is, however, more instructive. Although Pt 3 of the Foreign Judgments Act, in which s 15 appears, is entitled "Miscellaneous", and although s 15 deals with the enforcement in foreign jurisdictions of judgments of Australian courts, the provisions of Pt 3 are principally concerned with conditions that a foreign judgment must satisfy in order to be enforceable in Australia by registration under Pt 2 or by action at common law86. Importantly for present purposes, the application of Pt 2 is also restricted by the requirement, the result of s 6(6), that the foreign judgment be enforceable in the country of the original court. Correspondingly, s 15 provides for the conditions that must be satisfied in relation to a judgment given in this country before a certificate to facilitate enforcement of that judgment in a foreign country will be issued. And importantly, those conditions include the requirement, the result of s 15(2), that the judgment not be the subject of a stay of enforcement. Viewed in context, the purpose of s 15(2) appears thus to be one of achieving the kind of reciprocity that, by reason of s 5, applies to the enforcement of foreign judgments by registration under Pt 2, and, by operation of s 13, is sought to be achieved in relation to the enforcement of foreign judgments at common law under Pt 3. That is to say, a foreign judgment should not be enforceable in this country unless it is enforceable according to the laws of the country of the original court, and, reciprocally, a certificate should not issue under s 15 to facilitate enforcement of a judgment of an Australian court in a foreign jurisdiction unless the judgment is enforceable according to the laws of this country. 85 See Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 [69]-[70] per McHugh, Gummow, Kirby and Hayne JJ; [1998] HCA 28; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 31 [4] per French CJ, 46-47 [47] per Hayne, Heydon, Crennan and Kiefel JJ; [2009] HCA 41; Certain Lloyd's Underwriters v Cross (2012) 248 CLR 378 at 388-392 [23]-[32] per French CJ and Hayne J, 404-405 [68]-[70] per Crennan and Bell JJ, 411-412 [88]-[89] per Kiefel J; [2012] HCA 56. 86 Foreign Judgments Act, ss 11, 12, 13, 14. Nettle As Santamaria JA observed87, if a foreign country had enacted a law like s 58(3) of the Bankruptcy Act, a judgment of a court of that country would not be enforceable in that country and, perforce of s 6(6) of the Foreign Judgments Act, could not be enforced in this country by registration under Pt 2. Likewise, it would not be a "final and conclusive judgment" according to the common law of this country, and consequently it could not be sued upon in this country88. In the result, the purpose of reciprocity that informs the Foreign Judgments Act strengthens the conclusion that the constructional choice open on the text of s 15(2) is to be made by construing s 15(2) as extending to in personam mechanisms, like s 58(3) of the Bankruptcy Act, which have the effect of rendering a judgment unenforceable. 87 Bennett v Talacko [2016] VSCA 179 at [199]-[200]. 88 See and compare Colt Industries Inc v Sarlie (No 2) [1966] 1 WLR 1287 at 1293 per Russell LJ; [1966] 3 All ER 85 at 88; Berliner Industriebank Aktiengesellschaft v Jost [1971] 2 QB 463 at 470-471 per Salmon and Phillimore LJJ, 473-476 per Lyell J. See also Ainslie v Ainslie (1927) 39 CLR 381 at 388 per Knox CJ, 410 per Starke J; [1927] HCA 23; Schnabel v Lui [2002] NSWSC 15 at [76]-[155], and the authorities cited therein; Bank Polska Kasa Opieki Spolka Akcyjna v Opara (2010) 238 FLR 309 at 326 [61].

HIGH COURT OF AUSTRALIA SOUTHERN HAN BREAKFAST POINT PTY LTD (IN LIQUIDATION) APPELLANT AND LEWENCE CONSTRUCTION PTY LTD & ORS RESPONDENTS Southern Han Breakfast Point Pty Ltd (in Liquidation) v Lewence Construction Pty Ltd [2016] HCA 52 21 December 2016 ORDER Appeal allowed. Set aside the orders made by the Court of Appeal of the Supreme Court of New South Wales on 25 September 2015 and in their place order that the appeal to that Court be dismissed. The first respondent pay the appellant's costs of the appeal to this Court and of the appeal to the Court of Appeal. The first respondent repay to the appellant the sum of $1,276,000 paid to the first respondent on 7 October 2015 together with interest since that date. On appeal from the Supreme Court of New South Wales Representation M Christie SC with D P Hume for the appellant (instructed by CCS Legal Pty Ltd) S Robertson with P F Santucci for the first respondent (instructed by Maddocks Lawyers) Submitting appearance for the second and third respondents Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Southern Han Breakfast Point Pty Ltd (in Liquidation) v Lewence Construction Pty Ltd Statutory Construction – Building and Construction Industry Security of Payment Act 1999 (NSW), s 13(1) – Whether existence of reference date under construction contract precondition to making of valid payment claim. Contract – Construction of terms – Where construction contract made provision for contractor to "claim payment progressively" by making a "progress claim" – Whether it was the parties' intention that the contractor's right to make a progress claim under construction contract was to survive termination. Words and phrases – "payment claim", "progress claim", "progress payment", "reference date". Building and Construction Industry Security of Payment Act 1999 (NSW), KIEFEL, BELL, GAGELER, KEANE AND GORDON JJ. This appeal raises an important question as to whether the existence of a reference date under a construction contract is a precondition to the making of a valid payment claim under the Building and Construction Industry Security of Payment Act 1999 (NSW) ("the Act"). Contrary to the conclusion of the Court of Appeal of the Supreme Court of New South Wales1, and consistently with the conclusion of the primary judge2, the existence of a reference date under a construction contract is a precondition to the making of a valid payment claim and no such reference date existed in the present case. The Act Enacted by the Parliament of New South Wales "to reform payment behaviour in the construction industry"3, the Act mandated that it be subjected to review after the first three years of its operation4. As a consequence of the review then conducted, the Act was extensively amended by the Building and Construction Industry Security of Payment Amendment Act 2002 (NSW) ("the Amendment Act"). The Minister responsible for introducing the Bill for the original Act, for conducting the review and for introducing the Bill for the Amendment Act was the Hon Morris Iemma MLA. In the course of introducing the Bill for the Amendment Act, Mr Iemma explained that when introducing the Bill for the original Act the Government of New South Wales had wanted to "stamp out the practice of developers and contractors delaying payment to subcontractors and 1 Lewence Construction Pty Ltd v Southern Han Breakfast Point Pty Ltd [2015] NSWCA 288. 2 Southern Han Breakfast Point Pty Ltd v Lewence Construction Pty Ltd [2015] NSWSC 502. 3 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 8 September 1999 at 104. 4 Section 38. Bell suppliers"5. He went on to explain the original design of the Act which the Amendment Act was intended to enhance. He said6: "The Act was designed to ensure prompt payment and, for that purpose, the Act set up a unique form of adjudication of disputes over the amount due for payment. Parliament intended that a progress payment, on account, should be made promptly and that any disputes over the amount finally due should be decided separately. The final determination could be by a court or by an agreed alternative dispute resolution procedure. But meanwhile the claimant's entitlement, if in dispute, would be decided on an interim basis by an adjudicator, and that interim entitlement would be paid." Mr Iemma continued by emphasising that "[c]ash flow is the lifeblood of the construction industry" and that the Government was "determined that, pending final determination of all disputes, contractors and subcontractors should be able to obtain a prompt interim payment on account, as always intended under the Act"7. The Act in the form relevant to the circumstances giving rise to this appeal is as subsequently amended to 20 April 2014. There have been further amendments since then, but they are not material and it is convenient to refer to the Act in that relevant form in the present tense. Section 3 of the Act gives statutory expression to the object of the Act, summarises the means by which the Act pursues that object, and emphasises that the Act is not intended to affect other entitlements and remedies. It states: "(1) The object of this Act is to ensure that any person who undertakes to carry out construction work (or who undertakes to supply related goods and services) under a construction contract is entitled to receive, and is able to recover, progress payments in relation to the 5 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 12 November 2002 at 6542. 6 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 12 November 2002 at 6542. 7 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 12 November 2002 at 6542. Bell carrying out of that work and the supplying of those goods and services. The means by which this Act ensures that a person is entitled to receive a progress payment is by granting a statutory entitlement to such a payment regardless of whether the relevant construction contract makes provision for progress payments. The means by which this Act ensures that a person is able to recover a progress payment is by establishing a procedure that involves: the making of a payment claim by the person claiming payment, and the provision of a payment schedule by the person by whom the payment is payable, and the referral of any disputed claim to an adjudicator for determination, and the payment of the progress payment so determined. It is intended that this Act does not limit: any other entitlement that a claimant may have under a construction contract, or any other remedy that a claimant may have for recovering any such other entitlement." The Act contains expansive definitions of "construction work"8 and of "related goods and services"9, and defines "construction contract" broadly to encompass any "contract or other arrangement under which one party undertakes 8 Section 5. 9 Section 6. Bell to carry out construction work, or to supply related goods and services, for another party"10. The Act also contains a definition of "progress payment". That definition is as follows11: "progress payment means a payment to which a person is entitled under section 8, and includes (without affecting any such entitlement): the final payment for construction work carried out (or for related goods and services supplied) under a construction contract, or a single or one-off payment for carrying out construction work (or for supplying related goods and services) under a construction contract, or a payment that is based on an event or date (known in the building and construction industry as a 'milestone payment')." Part 2 of the Act is headed "Rights to progress payments". The central provisions of Pt 2 are ss 8 and 9. Section 8 provides: "(1) On and from each reference date under a construction contract, a person: (a) who has undertaken to carry out construction work under the contract, or (b) who has undertaken to supply related goods and services under the contract, is entitled to a progress payment. In this section, reference date, in relation to a construction contract, means: 10 Section 4, "construction contract". 11 Section 4, "progress payment". Bell a date determined by or in accordance with the terms of the contract as the date on which a claim for a progress payment may be made in relation to work carried out or undertaken to be carried out (or related goods and services supplied or undertaken to be supplied) under the contract, or if the contract makes no express provision with respect to the matter—the last day of the named month in which the construction work was first carried out (or the related goods and services were first supplied) under the contract and the last day of each subsequent named month." The reference in s 8(2)(b) to a "named month" is to a calendar month, according to the Gregorian calendar12. Section 9 provides: "The amount of a progress payment to which a person is entitled in respect of a construction contract is to be: the amount calculated in accordance with the terms of the contract, if the contract makes no express provision with respect to the matter, the amount calculated on the basis of the value of construction work carried out or undertaken to be carried out by the person (or of related goods and services supplied or undertaken to be supplied by the person) under the contract." Part 3 of the Act is headed "Procedure for recovering progress payments". Part 3 begins with s 13, which relevantly provides: "(1) A person referred to in section 8(1) who is or who claims to be entitled to a progress payment (the claimant) may serve a payment claim on the person who, under the construction contract concerned, is or may be liable to make the payment. 12 Section 21(1) of the Interpretation Act 1987 (NSW), "month" and "named month". Bell (2) A payment claim: (a) must identify the construction work (or related goods and services) to which the progress payment relates, and (b) must indicate the amount of the progress payment that the claimant claims to be due (the claimed amount), and (c) must state that it is made under this Act. (5) A claimant cannot serve more than one payment claim in respect of each reference date under the construction contract. (6) However, subsection (5) does not prevent the claimant from including in a payment claim an amount that has been the subject of a previous claim." Within the meaning of the Act: a claim referred to in s 13 is a "payment claim"; the person by whom a payment claim is served is the "claimant"; the amount of the progress payment claimed to be due for construction work carried out, or for related goods and services supplied, is the "claimed amount"; and the person on whom the payment claim is served is the "respondent"13. Service by a claimant on a respondent of a payment claim for a claimed amount is the trigger for the procedure set out in Pt 3. That procedure is essentially in two stages. The timing of the steps to be taken at each stage is closely circumscribed. First, the respondent has an opportunity to reply to the payment claim by providing to the claimant a "payment schedule". The payment schedule is to indicate the "scheduled amount", being the amount of the payment (if any) that the respondent proposes to make. The payment schedule is also to indicate the reasons for withholding payment if the scheduled amount is less than the claimed amount. If the respondent does not provide a payment schedule within time, the respondent becomes liable to pay the claimed amount to the claimant14. If the 13 Section 4, "claimant", "claimed amount", "payment claim", "respondent". 14 Section 14. Bell respondent does not pay the whole or any part of the claimed amount (in circumstances where the respondent has not provided a payment schedule) or the whole or any part of the scheduled amount (in circumstances where the respondent has provided a payment schedule), the claimant can recover the unpaid portion from the respondent as a debt in a court of competent jurisdiction15. In recovery proceedings for that unpaid portion, the respondent is not entitled to cross-claim against the claimant or to raise any defence in relation to matters arising under the construction contract16. Next, if the scheduled amount is less than the claimed amount, or as an alternative to commencing recovery proceedings for an unpaid portion in a court of competent jurisdiction, the claimant can make an application for adjudication of the payment claim17. That "adjudication application" is made to an authorised nominating authority, which must refer the application to a person eligible to be an adjudicator18. The adjudication application can contain such relevant submissions as the claimant chooses to include19. An adjudicator accepts the adjudication application by causing notice of the acceptance to be served on the claimant and respondent20. Once that occurs, the respondent has an opportunity to lodge with the adjudicator an "adjudication response" containing such relevant submissions as the respondent chooses to include, following which the adjudicator is obliged to determine the adjudication application as expeditiously as possible21. 15 Sections 15(1) and (2) and 16(1) and (2). 16 Sections 15(4) and 16(4). 17 Section 17(1). 18 Section 17(3)(b) and (6). 19 Section 17(3)(h). 20 Section 19(1). 21 Sections 20 and 21. Bell The jurisdiction of an adjudicator is set out in s 22, which provides in part: "(1) An adjudicator is to determine: the amount of the progress payment (if any) to be paid by the respondent to the claimant (the adjudicated amount), and the date on which any such amount became or becomes payable, and the rate of interest payable on any such amount. In determining an adjudication application, the adjudicator is to consider the following matters only: the provisions of this Act, the provisions of the construction contract from which the application arose, the payment claim to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the claimant in support of the claim, the payment schedule (if any) to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the respondent in support of the schedule, the results of any inspection carried out by the adjudicator of any matter to which the claim relates. The adjudicator's determination must: be in writing, and include the reasons for the determination (unless the claimant and the respondent have both requested the adjudicator not the determination)." reasons include those Bell An amount of a progress payment determined to be payable under s 22 is referred to in the Act as an "adjudicated amount"22. A respondent must pay an adjudicated amount to a claimant on or before the date determined pursuant to s 23, which must be at least five days after service of the adjudicator's determination23. If the respondent fails to pay, the claimant can request the authorised nominating authority to provide an "adjudication certificate"24. An adjudication certificate can be filed as a judgment for a debt in a court of competent jurisdiction and is enforceable accordingly25. If the respondent commences proceedings to have that judgment set aside, not only is the respondent not entitled to cross-claim against the claimant or to raise any defence in relation to matters arising under the construction contract but the respondent is not entitled to challenge the adjudicator's determination and is required to pay the unpaid portion of the adjudicated amount into court as security pending the final The provisions of the Act have effect despite any provision to the contrary in any contract27. Subject to that qualification, nothing in Pt 3 affects any right that a party to a construction contract may have under the contract, under Pt 2 in respect of the contract, or apart from the Act in respect of anything done or omitted to be done under the contract28. Part 3 also has no effect on civil proceedings arising under a construction contract, save that a court or tribunal is required to allow for any amount paid to a party under or for the purposes of Pt 3 in any order or award it makes and may make such order as it considers appropriate for the restitution of any amount so paid having regard to its decision in those proceedings29. 22 Section 4, "adjudicated amount". 23 Section 23. 24 Section 24. 25 Section 25(1). 26 Section 25(4). 27 Section 34. 28 Section 32(1). 29 Section 32(2) and (3). Bell The facts Southern Han Breakfast Point Pty Ltd ("Southern Han") and Lewence Construction Pty Ltd ("Lewence") were parties to a contract for the construction by Lewence of an apartment block at Breakfast Point in New South Wales ("the Contract"). Clause 37 of the Contract dealt with payment. Clause 37.1, read with Item 28 of Annexure Part A to the Contract, made provision for Lewence to "claim payment progressively" from Southern Han by making a "progress claim" on the 8th day of each calendar month for work under the Contract done to the 7th day of that month. Clause 37.2 then made provision for a progress certificate evidencing the Superintendent's opinion of the moneys due from Southern Han to Lewence pursuant to the progress claim and for Southern Han to pay the amount certified. Clause 39 of the Contract dealt with default. Clause 39.2 entitled Southern Han, in the event of Lewence committing a "substantial breach of the Contract", to give Lewence a "notice to show cause". Clause 39.4 provided: "If [Lewence] fails to show reasonable cause by the stated date and time, [Southern Han] may by written notice to [Lewence]: take out of [Lewence's] hands the whole or part of the work remaining to be completed and suspend payment until it becomes due and payable pursuant to subclause 39.6; or terminate the Contract." Clause 39.5 obliged Southern Han to complete work taken out of Lewence's hands. Clause 39.6 provided: "When work taken out of [Lewence's] hands has been completed, the Superintendent shall assess the cost thereby incurred and shall certify as moneys due and payable accordingly the difference between that cost (showing the calculations therefor) and the amount which would otherwise have been paid to [Lewence] if the work had been completed by [Lewence]." Clause 39.7 entitled Lewence, in the event of Southern Han committing a "substantial breach of the Contract", to give Southern Han a "notice to show cause" following which, if Southern Han failed to show cause, cl 39.9 permitted Lewence to suspend the whole or any part of the work under the Contract and Bell then to terminate the Contract if Southern Han failed to remedy the breach, or if the breach was irremediable and Southern Han did not make other arrangements to Lewence's reasonable satisfaction. Clause 39.10 provided: "If the Contract is terminated pursuant to subclause 39.4(b) or 39.9, the parties' remedies, rights and liabilities shall be the same as they would have been under the law governing the Contract had the defaulting party repudiated the Contract and the other party elected to treat the Contract as at an end and recover damages." On 10 October 2014, Southern Han gave Lewence a notice to show cause under cl 39.2 of the Contract. Then, on 27 October 2014, Lewence having responded to the notice to show cause, Southern Han gave Lewence a further notice purporting to exercise its right under cl 39.4 to take out of Lewence's hands the whole of the work remaining to be completed under the Contract. Lewence treated the giving of that further notice as repudiation of the Contract by Southern Han and, on 28 October 2014, purported to accept the repudiation and terminate the Contract. On 4 December 2014, Lewence served on Southern Han a document which purported to be a payment claim for work carried out under the Contract. The document complied with the formal requirements of s 13(2) of the Act but it did not nominate a reference date. There is no dispute, however, that it claimed payment for work carried out by Lewence under the Contract up to 27 October 2014, including for work carried out to 7 October 2014 which had been the subject of a prior payment claim which Lewence had served on Southern Han on or after 8 October 2014. Southern Han replied by providing a payment schedule to Lewence indicating that the scheduled amount Southern Han proposed to pay was nil. Lewence subsequently purported to make an adjudication application to Australian Solutions Centre, an authorised nominating authority. Australian Solutions Centre referred the application to Mr Ian Hillman, an eligible adjudicator, who purported to accept it by giving notice to Lewence and Southern Han. Southern Han lodged a response which contained a submission arguing that Mr Hillman lacked jurisdiction to determine the application. Rejecting Southern Han's argument that he lacked jurisdiction, Mr Hillman purported to determine the application. Bell The proceeding in the Supreme Court By originating summons filed in the Equity Division of the Supreme Court, Southern Han sought a declaration that Mr Hillman's purported determination was void, or alternatively an order in the nature of certiorari under s 69 of the Supreme Court Act 1970 (NSW) quashing the purported determination so as to remove its purported legal effect. One basis on which Southern Han sought that relief was that the document Lewence served on Southern Han on 4 December 2014 was not a payment claim under the Act for want of a reference date. Southern Han contended that the document could not be a payment claim under the Act as the events of 27 and 28 October 2014 meant that no date for making a progress payment could have arisen under the Contract after 8 October 2014. The primary judge (Ball J) made the declaration sought. His Honour construed the Act as requiring a reference date to have arisen under the Contract as a precondition to the making of a valid payment claim, and in turn as a precondition the making of a valid adjudication application and determination30. The primary judge went on to find that there was no reference date to support the purported payment claim of 4 December 2014. That finding of the absence of a reference date was made on alternative hypotheses, it being common ground between the parties that Southern Han could only succeed by establishing that there was no reference date on both hypotheses. On the hypothesis that Southern Han had on 27 October 2014 exercised its right under cl 39.4 to take out of Lewence's hands the whole of the work remaining to be completed under the Contract, his Honour found that Lewence's right to make a progress claim under cl 37.1 was suspended by cll 39.4 and 39.631. On the hypothesis that Lewence had on 28 October 2014 accepted Southern Han's repudiation and terminated the Contract, his Honour found that 30 Southern Han Breakfast Point Pty Ltd v Lewence Construction Pty Ltd [2015] NSWSC 502 at [40]. 31 Southern Han Breakfast Point Pty Ltd v Lewence Construction Pty Ltd [2015] NSWSC 502 at [44]-[46]. Bell Lewence's only right to make a progress claim was the right which had accrued on 8 October 2014 and which had already been exercised32. Lewence appealed to the Court of Appeal. That Court (Ward and Emmett JJA and Sackville AJA) allowed the appeal, set aside the declaration and dismissed the originating summons. The Court was unanimous in holding that the existence of a reference date is not a precondition to the making of a valid payment claim under the Act33. The Court was also unanimous in rejecting an argument, raised by Southern Han by way of notice of contention, to the effect that the purported payment claim was in respect of the reference date of 8 October 2014 with the result that its service was precluded by s 13(5) of the Act34. Having held that the existence of a reference date is not a precondition to the making of a valid payment claim, Ward JA (with whom Sackville AJA relevantly agreed35) went on to consider further grounds of Lewence's appeal which challenged the primary judge's finding that there was no reference date to support the purported payment claim of 4 December 2014. On the hypothesis that Southern Han had exercised its contractual right to take out of Lewence's hands the whole of the work remaining to be completed under the Contract, Ward JA agreed with the primary judge that Lewence's right to make a progress claim under cl 37.1 of the Contract was suspended36. On the hypothesis that Lewence had accepted Southern Han's repudiation and terminated the Contract, her Honour disagreed with the primary judge. Her Honour accepted that termination of the Contract terminated Lewence's contractual right 32 Southern Han Breakfast Point Pty Ltd v Lewence Construction Pty Ltd [2015] NSWSC 502 at [47]-[50]. 33 Lewence Construction Pty Ltd v Southern Han Breakfast Point Pty Ltd [2015] NSWCA 288 at [46]-[62], [118]-[120], [127]-[142]. 34 Lewence Construction Pty Ltd v Southern Han Breakfast Point Pty Ltd [2015] NSWCA 288 at [63]-[72], [121], [143]-[151]. 35 Lewence Construction Pty Ltd v Southern Han Breakfast Point Pty Ltd [2015] NSWCA 288 at [124]. 36 Lewence Construction Pty Ltd v Southern Han Breakfast Point Pty Ltd [2015] NSWCA 288 at [83]-[92]. Bell to make further progress claims under cl 37, but considered that termination of the Contract did not prevent continuing reference to the Contract for the purpose of determining Lewence's statutory right to make a further progress claim. Termination did not alter the fact that cl 37.1 provided for the making of a progress claim on the 8th day of each calendar month for work under the Contract done to the 7th day of that month, and 8 November 2014 was therefore an available reference date37. The appeal to this Court Southern Han's appeal to this Court from the decision of the Court of Appeal is on three grounds. The first is that the Court of Appeal was wrong to conclude that the existence of a reference date is not a precondition to the making of a valid payment claim. The second is that the majority in that Court was wrong to consider that 8 November 2014 was an available reference date on the hypothesis that Lewence had accepted Southern Han's repudiation and terminated the Contract. The third is a repetition of Southern Han's contention in the Court of Appeal that the purported payment claim was in respect of the reference date of 8 October 2014 and that its service was for that reason precluded by s 13(5) of the Act. For its part, Lewence supports the reasoning of the Court of Appeal. In addition, and on the assumption that the existence of a reference date is a precondition to the making of a valid payment claim, Lewence advances by notice of contention other reasons as to why a reference date existed in the present case. On the hypothesis that Southern Han had exercised its contractual right to take the remaining work out of Lewence's hands, Lewence contends that the suspension of payment under cl 39.4(a) of the Contract did not operate to prevent the subsequent accrual of a date for making a progress claim under cl 37.1 of the Contract. On the hypothesis that Lewence had accepted Southern Han's repudiation and terminated the Contract, Lewence contends that its right to make a progress claim under cl 37.1 of the Contract survived termination. For those reasons Lewence contends that, on either hypothesis, the Court of Appeal's conclusion that 8 November 2014 was an available reference date was correct. 37 Lewence Construction Pty Ltd v Southern Han Breakfast Point Pty Ltd [2015] NSWCA 288 at [74]-[82]. Bell Lewence contends in the alternative that the absence of a contractual reference date capable of being picked up by s 8(2)(a) of the Act results only in the application of s 8(2)(b). On the hypothesis that Lewence had accepted Southern Han's repudiation and terminated the Contract, Lewence goes on to contend that if s 8(2)(a) did not operate to make 8 November 2014 an available reference date for the making of a payment claim for work carried out up to 27 October 2014, then s 8(2)(b) operated to make 31 October 2014 an available reference date for the making of that claim. The issue raised by the last of Southern Han's grounds of appeal can be disposed of immediately. Against the statutory background of s 13(6) making plain that a claimant can include in a payment claim an amount that has been the subject of a previous claim, the mere fact that the purported payment claim served on 4 December 2014 claimed payment for work carried out before 7 October 2014 cannot be treated as indicating that it was in respect of the reference date of 8 October 2014. Rather, the fact that it also claimed payment for work carried out up to 27 October 2014 indicates that it is to be characterised as made in respect of some reference date after 27 October 2014. The purported payment claim was not in respect of the reference date of 8 October 2014 and s 13(5) was therefore not engaged. To address the remaining issues in the appeal, it is convenient to commence by isolating the two principal issues of statutory construction. The first issue is as to whether the existence of a reference date is a precondition to the making of a payment claim. The second issue, which arises if the first issue is determined in the affirmative, is as to how a reference date is to be determined. Once those issues of statutory construction are resolved, the remaining contractual issues can conveniently be addressed in the context of applying the Act, properly construed, to the circumstances postulated in the alternative hypotheses. The need for a reference date There is no dispute between the parties that service of a payment claim under s 13(1) of the Act is an essential precondition to taking subsequent steps in the procedure set out in Pt 3 of the Act. There is accordingly no dispute that, unless a payment claim answering that description is served, there can be no adjudication application and hence no adjudication within the jurisdiction conferred by s 22 of the Act. That shared understanding of the relationship between s 13(1) and s 22 is undoubtedly correct. Bell Against the background of that understanding, the contest between the parties about whether or not a reference date is needed to support a payment claim is, on one view, quite narrow. Their contest is focussed on the opening words of s 13(1). The difference between them is as to what is connoted by the reference to "[a] person referred to in section 8(1)". Lewence argues, consistently with the view of the Court of Appeal, that the reference is to a person who meets the description in s 8(1)(a) or s 8(1)(b): a person who has undertaken to carry out construction work or supply related goods and services under a construction contract. Southern Han argues, consistently with the view of the primary judge, that the reference is to a person who, by operation of s 8(1), is entitled to a progress payment: a person who has undertaken to carry out construction work or supply related goods and services under a construction contract in respect of which a reference date has arisen. Stressing that the entitlement to a progress payment conferred by s 8(1) arises "[o]n and from each reference date under a construction contract", Southern Han couches its argument in terms that the existence of a reference date to support a payment claim is a "jurisdictional fact". Treating "jurisdictional fact" as a label for a "criterion, satisfaction of which enlivens the power of [a] decision-maker"38, Southern Han's invocation of that terminology, in the context of a challenge to the validity of a purported determination by an adjudicator of a purported adjudication application based on a purported payment claim, is not inappropriate. The terminology serves to emphasise that, if Southern Han's construction of s 13(1) is correct, the existence or non-existence of a reference date is not within the jurisdiction of the adjudicator to determine under s 22 of the Act. But that is the limit of its utility. Southern Han recognises that the terminology of "jurisdictional fact" is no more than a label for the conclusion for which it contends and that appending that label to the conclusion adds nothing to the requisite antecedent statutory analysis. The statutory analysis required to resolve the competing constructions of s 13(1) ultimately involves forming a view as to the place of that provision within the structure of the Act read in light of its legislative history. It is as well to begin with that legislative history. 38 Enfield City Corporation v Development Assessment Commission (2000) 199 CLR 135 at 148 [28]; [2000] HCA 5; see also Gedeon v Commissioner of New South Wales Crime Commission (2008) 236 CLR 120 at 139 [43]; [2008] HCA 43. Bell As originally enacted, s 3(1) of the Act stated: "The object of this Act is to ensure that any person who carries out construction work (or who supplies related goods and services) under a construction contract is entitled to receive, and is able to recover, specified progress payments in relation to the carrying out of such work and the supplying of such goods and services." Section 13(1) correspondingly provided: "A person who is entitled to a progress payment under a construction contract (the claimant) may serve a payment claim on the person who under the contract is liable to make the payment." Notwithstanding the design of the Act to ensure that a person who has carried out construction work under a construction contract can recover progress payments on an interim basis in circumstances of a protracted contractual dispute, the language of s 13(1) as originally enacted left open an argument that such a person needed to establish a contractual right to payment before the right to make a statutory claim arose. That argument was put to the Supreme Court in 2002. The argument was rejected at first instance39, but its correctness appears to have been assumed on appeal to the Court of Appeal40. Prior to the argument's rejection at first instance, the argument was addressed in a discussion paper published in the course of the review of the Act that was conducted in 2002. The discussion paper noted that the argument raised questions an example of which was: "if, because work is defective, there is no amount due to the claimant, can the claimant make a valid payment claim?"41 In response to the argument, the discussion paper was unequivocal in expressing the policy position that "a claimant should be able to make a valid payment claim under the Act even though it may ultimately be proved that no 39 Beckhaus v Brewarrina Council [2002] NSWSC 960. 40 Brewarrina Shire Council v Beckhaus Civil Pty Ltd (2003) 56 NSWLR 576. 41 New South Wales, Department of Public Works and Services, Review Discussion Paper: Options for Enhancing the Building and Construction Industry Security of Payment Act 1999, (2002) at 19. Bell payment is due"42. The discussion paper went on to formulate "proposed action" "Clarify under s 13 that a payment claim may be made by a person referred to in s 8 (ie a person who has undertaken to carry out construction work or who has supplied related goods or services) claiming to be entitled to a progress payment under the construction contract or the Act." Sections 3(1) and 13(1) were substituted to take their present form by the Amendment Act44. The explanatory note to the Bill for the Amendment Act identified the purpose of those substitutions. Against the background of an acceptance that the Act was "meant to ensure that a person who carries out construction work under a construction contract is entitled to receive and recover specified progress payments", the explanatory note identified the purpose of the substitution of s 3(1) as being to clarify that "the object of the Act is to ensure that the entitlement to progress payments relates to work that is undertaken to be carried out under a construction contract"45. It identified the purpose of the substitution of s 13(1) as being to clarify that "a payment claim may be made by a person who claims to be entitled to a progress payment"46. Lewence relies on the parenthetic explanation in the language in which the proposed action in the discussion paper was formulated to support its argument that the reference in s 13(1), as substituted by the Amendment Act, to "[a] person referred to in section 8(1)" is simply to a person who has undertaken to carry out 42 New South Wales, Department of Public Works and Services, Review Discussion Paper: Options for Enhancing the Building and Construction Industry Security of Payment Act 1999, (2002) at 19. 43 New South Wales, Department of Public Works and Services, Review Discussion Paper: Options for Enhancing the Building and Construction Industry Security of Payment Act 1999, (2002) at 19. 44 Building and Construction Industry Security of Payment Amendment Act 2002 (NSW), Sched 1 [1], [22]. 45 New South Wales, Legislative Assembly, Building and Construction Industry Security of Payment Amendment Bill 2002, Explanatory Note at 2-3. 46 New South Wales, Legislative Assembly, Building and Construction Industry Security of Payment Amendment Bill 2002, Explanatory Note at 3. Bell construction work or supply related goods and services under a construction contract. Lewence argues that that reading is confirmed by the further reference in s 13(1) to the person being a person "who is or who claims to be entitled to a progress payment". Those additional words, Lewence argues, show that a reference date need not have arisen and that the person need do no more than claim that a reference date has arisen. Lewence also places reliance on the object of the Act stated in s 3(1), as also substituted by the Amendment Act, as being "to ensure that any person who undertakes to carry out construction work (or who undertakes to supply related goods and services) under a construction contract is entitled to receive, and is able to recover, progress payments". The absence of any mention of a reference date in that statement of statutory object, Lewence argues, is indicative of the irrelevance of a reference date both to the entitlement to receive a progress payment and to the ability to recover a progress payment. The considerations on which Lewence relies are not compelling. The statement of the object of the Act in s 3(1) cannot be read as excluding qualifications to the entitlement to receive a progress payment or to the ability to recover a progress payment that are embedded in the detail of the substantive provisions of the Act. And the significance of the discussion paper published in the course of the review of the Act which preceded the Amendment Act lies less in the precise language it used to formulate the clarification it proposed to s 13 than in the precise reason it gave for proposing that clarification. The reason was limited to ensuring that a person on whom the Act conferred an entitlement to a progress payment was to be able to make a valid payment claim even though it may ultimately be proved that no payment was due under the construction contract. Close attention to the structure of the Act puts the language of s 13(1) in perspective. The Act gives effect to the object stated in s 3(1) by the cumulative means sketched out in ss 3(2) and 3(3). As foreshadowed in s 3(2), Pt 2 confers a statutory entitlement to a progress payment. As foreshadowed in s 3(3), Pt 3 builds on Pt 2 by establishing a procedure for recovery of a progress payment to which an entitlement exists. The two parts, however, are not hermetically sealed. Within Pt 2 an important distinction is drawn between a progress payment to which a person is entitled and the amount of the progress payment to which that person is entitled. Cast in the present tense, s 8(1) makes clear that a person who meets the description of a person who has undertaken to carry out construction work or supply related goods and services under a construction contract is immediately by force of that provision "entitled to a progress Bell payment" on and from each reference date under the construction contract. Cast in the future tense, in contrast, s 9 makes clear that the amount of a progress payment to which the person is so entitled is not fixed by force of that section but "is to be" ascertained in the manner prescribed by that section, and quantifies the amount of the progress payment to which a person is entitled by force of s 8(1). Section 9 in that way anticipates the procedure for recovery of a progress payment set out in Pt 3. Under that procedure, in the event of a dispute between a claimant and a respondent, the ascertainment of the amount, if any, of the progress payment to be recovered is committed to the jurisdiction of an adjudicator to determine under s 22. That distinction drawn in Pt 2, between a present entitlement to a progress payment and the future ascertainment of the amount of the progress payment to which that present entitlement relates, explains the two-part description in s 13(1) of a person who is able to make a payment claim so as to trigger the procedure for recovery set out in Pt 3. The first part of the description – "[a] person referred to in section 8(1)" – refers to a person whom s 8(1) makes "entitled to a progress payment". The second part of the description – "who is or who claims to be entitled to a progress payment" – neither contradicts nor qualifies the first part of the description. The second part of the description rather recognises, consistently with s 9, that the amount of the progress payment to which that person is entitled might ultimately be ascertained, according to the procedure set out in Pt 3, to be less than the amount that the person claims to be due and might even be ascertained according to that procedure to be nothing. The construction of s 13(1) consonant with the structure of the Act is accordingly that advanced by Southern Han. The description in s 13(1) of a person referred to in s 8(1) is of a person whom s 8(1) makes entitled to a progress payment. Section 8(1) makes a person who has undertaken to carry out construction work or supply related goods and services under a construction contract entitled to a progress payment only on and from each reference date under the construction contract. In that way, the existence of a reference date under a construction contract within the meaning of s 8(1) is a precondition to the making of a valid payment claim under s 13(1). That construction of s 13(1) affords to s 13(1) an operation that is harmonious with s 13(5). Section 13(1) operates to require that each payment claim be supported by a reference date and s 13(5) operates to require that each reference date support no more than one payment claim. Section 13(5) has been held to produce the result that "a document purporting to be a payment claim that Bell is in respect of the same reference date as a previous claim is not a payment claim under the [Act]"47. Section 13(1) correspondingly produces the result that a document purporting to be a payment claim that is not in respect of a reference date is not a payment claim under the Act. The document is ineffective in either case to trigger the procedure established by Pt 3. The determination of a reference date Having concluded that the existence of a reference date under a construction contract within the meaning of s 8(1) is a precondition to the making of a valid payment claim under s 13(1), the issue is then as to how any such reference date is to be determined. That issue needs to be addressed in light of the definition of "progress payment", which applies to the construction of the Act "except in so far as the context or subject-matter otherwise indicates or requires"48. The definition picks up the statutory entitlement created by s 8(1) by providing that a progress payment means a payment to which a person is entitled under s 8. That was all that the definition did when it was originally enacted. The definition was amended by the Amendment Act, however, in order "to make it clear that the Act creates an entitlement not only to payments that are in the nature of instalments, but also to final payments and to single or one-off payments"49. The amendment of the definition was responsive to an earlier judicial interpretation which had limited references to progress payments in s 8 and elsewhere in the Act to payments designated by construction contracts to be progress payments50. 47 Dualcorp Pty Ltd v Remo Constructions Pty Ltd (2009) 74 NSWLR 190 at 194 48 Section 6 of the Interpretation Act 1987 (NSW). 49 Building and Construction Industry Security of Payment Amendment Act 2002 (NSW), Sched 1 [7]; New South Wales, Legislative Assembly, Building and Construction Industry Security of Payment Amendment Bill 2002, Explanatory Note at 3. 50 Jemzone Pty Ltd v Trytan Pty Ltd (2002) 42 ACSR 42 at 49 [37]. Bell Through its adoption of the drafting device "means … and includes …"51, the amended definition serves to indicate that the categories of payment to which s 8(1) is capable of applying extend to include a payment meeting any of the descriptions in the three paragraphs of the definition. That is to say, s 8(1) is to be read in light of the definition as capable of creating a statutory entitlement not only to a payment in the nature of an instalment but also to a final payment under a construction contract, to a single or one-off payment under a construction contract and to a payment of a type known in the construction industry as a milestone payment. This makes clear that the Act is not concerned only with providing a statutory mechanism for securing payments that are to occur during the currency of an existing construction contract. The statutory contemplation is that a claim for a progress payment might be made after the contract has expired. The repeated references in s 8, and in the extended definition of progress payment, to payment "for" work carried out or to be carried out (or goods and services supplied or to be supplied) "under" a construction contract nevertheless point to an important limitation that is implicit in the overall design of the Act, and that has been so from the time of its original enactment. That limitation is that the Act is concerned to provide a statutory mechanism for securing payment of an amount claimed to be payable in partial or total discharge of an obligation to pay for work (or for goods and services supplied) imposed by the contractual force of a construction contract. The Act is not concerned to provide security for payment of an amount claimed by way of damages for breach of a construction contract. Nor is the Act concerned to provide security for payment of an amount which, according to prevailing authority52, might be claimed as an alternative to damages by way of restitution for work carried out (or goods and services supplied) in the event of the construction contract terminating on acceptance of repudiation. Explaining that limitation, Barrett J said in Quasar Constructions NSW Pty Ltd v Demtech Pty Ltd53: "The clear message throughout the Act is … that any 'progress payment', including one within para (a), (b) or (c) of the definition of 51 BHP Billiton Iron Ore Pty Ltd v National Competition Council (2008) 236 CLR 145 at 159 [32]; [2008] HCA 45. 52 Sopov v Kane Constructions Pty Ltd (No 2) (2009) 24 VR 510 at 514-515 [9]-[12]. 53 (2004) 20 BCL 276 at 285 [34]. Bell 'progress payment', can only have that character if it is 'for' work done or, where some element of advance payment has been agreed, 'for' work undertaken to be done. The relevant concepts do not extend to damages for breach of contract, including damages for the loss of an opportunity to receive in full a contracted lump sum price. Compensation of that kind does not bear to actual work the relationship upon which the 'progress payment' concept is founded." Consistently with that explanation, while emphasising the characterisation of a contractual payment always to be one of substance as to which a mere contractual label cannot be conclusive, Hodgson JA referred in Coordinated Construction Co Pty Ltd v J M Hargreaves (NSW) Pty Ltd54 to a progress payment as an "amount that a construction contract requires to be paid as part of the total price of construction work". That limitation implicit in the design of the Act explains the express temporal limitation in the opening words of s 8(1), by which a statutory entitlement to a progress payment exists only on and from each reference date. The reference date, defined for the purpose of s 8(1) in s 8(2), is the date for making a claim for payment of the whole or part of the amount contracted to be paid for work carried out or undertaken to be carried out, or for related goods and services supplied or undertaken to be supplied. The reference date for which s 8(2)(a) provides is a date set by contractual force as a date for making a contractual claim to be paid the whole or part of the contracted amount. The mention in s 8(2)(a) of "a date determined by or in accordance with the terms of the contract" is of a date fixed by operation of one or more express provisions of the construction contract. The mention is not of a date that is determined independently of the operation of the contract merely having regard to the contractual terms. The reference date for which s 8(2)(b) provides is applicable only where a construction contract contains no express provision for determining a date for making a contractual claim to be paid the whole or a relevant part of the contracted amount. Absent an express contractual provision for determining a reference date, s 8(2)(b) operates of its own force to provide a reference date for the purpose of s 8(1). In so applying, s 8(2)(b) fulfils the statutory promise in s 3(2) of granting a statutory entitlement to a progress payment regardless of 54 (2005) 63 NSWLR 385 at 397 [41]. Bell whether the relevant construction contract makes provision for progress payments. The provision does not, however, alter the nature of a progress payment in respect of which a claim can be made. The absence of a reference date From the preceding analysis of the Act, it follows that: the question whether the document served by Lewence on Southern Han on 4 December 2014 answered the description of a payment claim in s 13(1) turns on whether Lewence was on that date entitled under s 8(1) to a progress payment in relation to work carried out to 27 October 2014; and the question whether Lewence on that date had that entitlement under s 8(1) turns on whether a reference date under the Contract had then come to exist in relation to that work under s 8(2). The Contract having made express provision in cl 37.1 fixing the date for the claiming of progress payments under the Contract, s 8(2)(b) could have no application. The requisite reference date was potentially capable of having arisen only in the application of s 8(2)(a). Examination of the potential application of s 8(2)(a) leads finally to the contractual question of whether cl 37 of the Contract continued to operate so as to fix 8 November 2014 as a reference date notwithstanding the events of 27 and 28 October 2014. That question falls to be addressed on the alternative hypotheses considered by the primary judge and the Court of Appeal. On neither hypothesis is there reason to doubt the negative answer to that contractual question given explicitly by the primary judge and explicitly (on one hypothesis) or implicitly (on the other hypothesis) by Ward JA in the Court of Appeal. On the hypothesis that Southern Han exercised its right under cl 39.4 to take out of Lewence's hands the whole of the work remaining to be completed under the Contract on 27 October 2014, cl 39.4 operated expressly to suspend payment until completion of the process for which cl 39.6 provided. The commercial purpose of the suspension in the event of such a breach, as the primary judge explained55, was to provide a form of security to Southern Han in the event that the costs of completion of the work taken out of Lewence's hands were greater than the amount Southern Han would have had to pay if Lewence 55 Southern Han Breakfast Point Pty Ltd v Lewence Construction Pty Ltd [2015] NSWSC 502 at [46]. Bell had completed the work itself. That commercial purpose would be undermined were cl 39.4 to be interpreted as suspending payment only for the work taken out of Lewence's hands. True it is that cl 39.4 would have permitted Southern Han to take only some of the work out of Lewence's hands, in which case to interpret that clause as suspending payment for the work other than that taken out of Lewence's hands would mean that Lewence would have been obliged to continue with other work for which it would not be paid until completion of the cl 39.6 process. But, given that Southern Han's right to take work out of Lewence's hands was capable of being exercised, and that the suspension was correspondingly capable of occurring only following what cl 39.2 referred to as a substantial breach of the Contract, such a result is hardly surprising. The suspension of payment was a suspension of the totality of the rights conferred and obligations imposed in relation to payment by cl 37. The rights so suspended included Lewence's right to make a progress claim under cl 37 for work carried out up to the time of the work being taken out of its hands. On the hypothesis that Lewence accepted Southern Han's repudiation and terminated the Contract on 28 October 2014, the effect of termination was that Lewence and Southern Han were both discharged from further performance of the Contract and that Lewence's rights under the Contract were limited to those which had then already accrued under the Contract except in so far as the Contract is properly to be interpreted as stipulating to the contrary56. The right to make a progress claim under cl 37.1 of the Contract in relation to work carried out to 27 October 2014 had not accrued as at 28 October 2014. Had the Contract not then been terminated, the right would have accrued only on 8 November Nothing in the Contract was indicative of a contractual intention that cl 37 was to survive termination. Rather, as the primary judge observed57, to the extent that the Contract adverts to its termination at all, its assimilation by cl 39.10 of the rights of the parties following termination under the Contract to their rights 56 McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 at 476-477; [1933] HCA 25; Westralian Farmers Ltd v Commonwealth Agricultural Service Engineers Ltd (1936) 54 CLR 361 at 379; [1936] HCA 6. 57 Southern Han Breakfast Point Pty Ltd v Lewence Construction Pty Ltd [2015] NSWSC 502 at [50]. Bell following termination of the Contract on acceptance of repudiation suggests that the parties were content to abide by the default position at common law in the event that the Contract were to be terminated on acceptance of repudiation. Application of those principles to prevent a future reference date arising on the hypothesis that Lewence accepted Southern Han's repudiation does not have the effect, as Lewence argues, of permitting Southern Han to take advantage of its own wrong. The effect is rather to substitute for Lewence's future right to obtain payment under the Contract an immediate right to damages for breach of the Contract or restitution outside the Contract. The Act would have operated to secure payment under the Contract on and from the future date on which a contractual right to claim payment arose, but it is beyond the scope of the Act to secure the payment of damages or amounts by way of restitution. Orders The orders to be made are as follows: (1) Appeal allowed. Set aside the orders made by the Court of Appeal of the Supreme Court of New South Wales on 25 September 2015 and in their place order that the appeal to that Court be dismissed. The first respondent pay the appellant's costs of the appeal to this Court and of the appeal to the Court of Appeal. The first respondent repay to the appellant the sum of $1,276,000 paid to the first respondent on 7 October 2015 together with interest since that date.

HIGH COURT OF AUSTRALIA AON RISK SERVICES AUSTRALIA LIMITED APPELLANT AND AUSTRALIAN NATIONAL UNIVERSITY RESPONDENT Aon Risk Services Australia Limited v Australian National University [2009] HCA 27 5 August 2009 1. Appeal allowed with costs. ORDER 2. Set aside orders 2 and 3 of the orders of the Court of Appeal of the Supreme Court of the Australian Capital Territory dated 25 August 2008 and, in lieu thereof, order that: a) The appeal be allowed. b) The orders of Gray J made on 12 October 2007 be set aside, and in lieu thereof there be an order that the plaintiff’s application for leave to amend the further amended statement of claim be dismissed with costs. On appeal from the Supreme Court of the Australian Capital Territory Representation J T Gleeson SC with N J Owens for the appellant (instructed by Corrs Chambers Westgarth) B W Walker SC with J Oakley for the respondent (instructed by Sparke Helmore) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Aon Risk Services Australia Limited v Australian National University Practice and procedure – Pleadings – Amendment – Where application for leave to amend statement of claim made on third day of four week trial – Whether application should have been granted. Practice and procedure – Pleadings – Amendment – Where Court Procedures Rules 2006 (ACT) ("Rules"), r 502 provided that court may give leave to amend pleadings "in the way it considers appropriate" – Where r 21 provided objectives of Rules to facilitate just resolution of real issues in proceedings and timely disposal of proceedings at affordable cost – Relevance of case management principles to application to amend – Capacity of costs to overcome prejudice to opposing party – Whether party should be permitted to amend to raise arguable issue subject to payment of costs – Whether Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146; [1997] HCA 1 should be overruled – Relevance of stage of proceedings at which amendment sought – Relevance of explanation for delay in seeking amendment – Relevance of extent of proposed amendment. Practice and procedure – Pleadings – Amendment – Where r 501(a) of Rules provided that all necessary amendments must be made for purpose of deciding "real issues in the proceeding" – Whether court retains discretion to grant amendment in these circumstances – Whether amendment necessary to raise arguable issues. Practice and procedure – Pleadings – Amendment – Where r 501(c) of Rules provided that all necessary amendments must be made for purpose of "avoiding multiple proceedings" – Whether amendment necessary where potential further proceedings – Relevance of possibility that further proceedings would be barred on abuse of process or estoppel grounds. Evidence – Legal professional privilege – Whether inference may be drawn from absence of explanation for delay where explanation rested on legal advice. Words and phrases – "all necessary amendments", "avoiding multiple proceedings", "just resolution", "real issues in the proceeding". Court Procedures Rules 2006 (ACT), rr 21, 501, 502. Introduction In November 2006, at the commencement of a four week trial of an action against its insurers and its insurance broker Aon Risk Services Australia Ltd ("Aon"), the Australian National University ("ANU") settled with the insurers and consent orders were made to give effect to the settlements. ANU then applied for an adjournment of the trial to make substantial amendments to its statement of claim against Aon. The circumstances are set out in detail in the joint judgment1. The adjournment was granted, the application for amendment was heard two weeks later, and for reasons which do not appear from the record, the primary judge did not give judgment until 12 October 20072. The reasons for judgment of the primary judge involved the following steps: The decision of this Court in Queensland v J L Holdings3 ("J L Holdings") stood as authority for the proposition that "justice is the paramount consideration" in determining the application to amend4. ANU's new case was not totally inconsistent with the case as pleaded originally. The original pleading was widely expressed and not confined to a claim that Aon had failed to act in accordance with its instructions5. Although the explanations for delay given by counsel and the solicitor for ANU were not entirely satisfactory, it was important that the allegations raised real triable issues between ANU and Aon6. On an overall consideration of the matters put by ANU and by Aon, leave 1 Reasons of Gummow, Hayne, Crennan, Kiefel and Bell JJ at [38]-[54]. 2 The Australian National University v Chubb Insurance Company of Australia Ltd [2007] ACTSC 82. (1997) 189 CLR 146; [1997] HCA 1. [2007] ACTSC 82 at [37]. [2007] ACTSC 82 at [38]-[40]. [2007] ACTSC 82 at [43]. [2007] ACTSC 82 at [44]. His Honour rejected a contention by Aon that ANU was seeking a judgment against it inconsistent with the consent orders made in respect of the insurers8. He held that there was no abuse of process9. His Honour ordered ANU to pay Aon's costs, but refused to make an order for indemnity costs. The primary judge's decision was appealed to the Court of Appeal of the Supreme Court of the Australian Capital Territory. On 25 August 2008, that Court allowed the appeal only in so far as it agreed unanimously that the costs of and thrown away by the amendments should have been awarded on an indemnity basis10. By majority (Higgins CJ and Penfold J), the Court dismissed the challenge to the order granting leave to amend. Lander J dissented. The reasoning of the majority, delivered in separate judgments, some aspects of which were consistent with the dissenting judgment of Lander J, may be summarised as follows: The Supreme Court of the Australian Capital Territory was bound to follow the majority opinion in J L Holdings, decided in relation to Rules of Court similar to the Court Procedures Rules 2006 (ACT) (the "ACT Rules")11. Case management considerations, including the availability of court resources, were not irrelevant, but the paramount consideration was "justice as between the parties"12. The decision to amend was unreasonably delayed and the delay lacked a satisfactory explanation. But it was not thereby to be inferred that ANU believed a more frank explanation would have led to a refusal of the application to amend13. [2007] ACTSC 82 at [53]. [2007] ACTSC 82 at [54]. 10 AON Risk Services Australia Ltd v Australian National University [2008] ACTCA 13 at [19] per Higgins CJ, [22] per Penfold J and [238] per Lander J. 11 [2008] ACTCA 13 at [8]-[9] per Higgins CJ, [24]-[26] and [53] per Penfold J, and 12 [2008] ACTCA 13 at [10] per Higgins CJ, [54] per Penfold J and [196] per 13 [2008] ACTCA 13 at [13] per Higgins CJ and [61] per Penfold J and see [230] per There were no case management considerations that would require leave to be refused, and any additional work required of Aon could be compensated adequately by an appropriate order for costs14. Special leave to appeal to this Court against the decision of the Court of Appeal was granted on 13 February 200915. Save for the dissenting judgment of Lander J in the Court of Appeal, the history of these proceedings reveals an unduly permissive approach at both trial and appellate level to an application which was made late in the day, was inadequately explained, necessitated the vacation or adjournment of the dates set down for trial, and raised new claims not previously agitated apparently because of a deliberate tactical decision not to do so. In such circumstances, the party making the application bears a heavy burden to show why, under a proper reading of the applicable Rules of Court, leave should be granted. In the proper exercise of the primary judge's discretion, the applications for adjournment and amendment were not to be considered solely by reference to whether any prejudice to Aon could be compensated by costs. Both the primary judge and the Court of Appeal should have taken into account that, whatever costs are ordered, there is an irreparable element of unfair prejudice in unnecessarily delaying proceedings. Moreover, the time of the court is a publicly funded resource. Inefficiencies in the use of that resource, arising from the vacation or adjournment of trials, are to be taken into account. So too is the need to maintain public confidence in the judicial system. Given its nature, the circumstances in which it was sought, and the lack of a satisfactory explanation for seeking it, the amendment to ANU's statement of claim should not have been allowed. The discretion of the primary judge miscarried. It appears that a factor in the decision of the primary judge and of the Court of Appeal was the decision of this Court in J L Holdings. That case arose out of an entirely different factual setting. However, to the extent that statements about the exercise of the discretion to amend pleadings in that case suggest that case management considerations and questions of proper use of court resources are to be discounted or given little weight, it should not be regarded as authoritative. For the reasons set out more fully below, I would allow the appeal. I agree with the orders proposed in the joint judgment16. 14 [2008] ACTCA 13 at [16] per Higgins CJ and [67] per Penfold J, and see [233]- [236] per Lander J in dissent. 15 [2009] HCATrans 026. 16 Reasons of Gummow, Hayne, Crennan, Kiefel and Bell JJ at [117]. The applicable rules The relevant provisions of the ACT Rules are rr 21, 501 and 502. These are all to be found in Ch 2, entitled "Civil proceedings generally". Part 2.1 of Ch 2 contains introductory provisions. It includes r 21, entitled "Purpose of Ch 2 etc", which provides: "(1) The purpose of this chapter, and the other provisions of these rules in their application to civil proceedings, is to facilitate the just resolution of the real issues in civil proceedings with minimum delay and expense. (2) Accordingly, these rules are to be applied by the courts in civil proceedings with the objective of achieving – the just resolution of the real issues in the proceedings; and the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties. The parties to a civil proceeding must help the court to achieve the objectives. The court may impose appropriate sanctions if a party does not comply with these rules or an order of the court." A note under the title indicates that the rule was based upon17 s 1.1 of the Civil Procedure Rules 1998 (UK), r 5 of the Uniform Civil Procedure Rules 1999 (Q) and s 60 of the Civil Procedure Act 2005 (NSW). Part 2.7 of Ch 2 is entitled "Amendment". It applies in relation to documents (other than affidavits) that have been filed in a proceeding18. Rules 501 and 502 in Pt 2.7 relevantly provide: "501 Amendment – when must be made (1) All necessary amendments of a document must be made for the purpose of – 17 The Explanatory Statement indicates that the reference under each rule heading is to the "source of the provisions of the rule": Australian Capital Territory, Rule- making Committee, Court Procedures Rules 2006, Explanatory Statement at 2. 18 ACT Rules, r 500. deciding the real issues in the proceeding; or correcting any defect or error in the proceeding; or avoiding multiple proceedings. 502 Amendment – of documents (1) At any stage of a proceeding, the court may give leave for a party to amend, or direct a party to amend, an originating process, anything written on an originating process, a pleading, an application or any other document filed in the court in a proceeding in the way it considers appropriate. The court may give leave, or give a direction, on application by the party or on its own initiative. The court may give leave to make an amendment even if the effect of the amendment would be to include a cause of action arising after the proceeding was started." History and construction of the Rules Rules 501 and 502 have their origins in 19th century reforms of civil procedure in the United Kingdom. Rule 21 draws its inspiration from the Civil Proceedings Rules introduced into the United Kingdom in 1998 following the The impetus for civil procedure reform in the 19th century was provided by critics of the system in place at the beginning of that century, which was described by Jeremy Bentham as one of "exquisitely contrived chicanery which maximises delay and denial of justice"20. In 1828 Henry Brougham, later to become Lord Chancellor, made a celebrated speech in the House of Commons which led to the appointment of commissions of inquiry and ultimately to the enactment of the Common Law Procedure Act 1852 (UK) and subsequent statutes reforming Common Law and Chancery procedure21. The Common Law 19 Lord Woolf, Access to Justice: Final Report, July 1996 ("the Woolf Report"). 20 Quoted in "Civil Procedure Since 1800" in Jacob, The Reform of Civil Procedural Law and Other Essays in Civil Procedure, (1982) 193 at 207. 21 As to Common Law: Common Law Procedure Act 1852 (UK) 15 & 16 Vict c 76, Common Law Procedure Act 1854 (UK) 17 & 18 Vict c 125, Common Law Procedure Act 1860 (UK) 23 & 24 Vict c 126; as to Chancery: Court of Chancery Act 1852 (UK) 15 & 16 Vict c 80, Chancery Amendment Act 1852 (UK) 15 & 16 (Footnote continues on next page) Procedure Act 1852 provided, relevantly, for amendment of pleadings at any stage of the proceedings to overcome problems caused by non-joinder or mis- joinder of parties22. A number of technical pleading rules were also abolished by that Act23. The Reports, in 1868 and 1869, of the Judicature Commission established under the chairmanship of Lord Cairns led to the enactment of the Supreme Court of Judicature Act 1873 (UK)24 amended by the Supreme Court of Judicature Act 1875 (UK)25. The Judicature Acts caused the Common Law Courts, the Courts of Chancery and other specialist courts26 to be combined into the High Court of Justice which, together with the Court of Appeal, comprised the Supreme Court of Judicature27. Section 24(7) of the Act of 1873 empowered the Court to grant all remedies to which any of the parties appeared to be entitled: "so that, as far as possible, all matters so in controversy between the said parties respectively may be completely and finally determined, and all multiplicity of legal proceedings concerning any of such matters avoided." This legislative formula was promptly and substantially reproduced in most of the Australian colonies28, and continues to be in force in the various Vict c 86, Chancery Amendment Act 1858 (UK) 21 & 22 Vict c 27. See commentary in Jenks, A Short History of English Law, (1912) at 365-372. 22 Common Law Procedure Act 1852 (UK) 15 &16 Vict c 76, s 36. 23 Jenks, A Short History of English Law, (1912) at 367. 24 36 & 37 Vict c 66. 25 38 & 39 Vict c 77. 26 Including the Court of Probate, the Court of Divorce and the High Court of Admiralty. 27 "Civil Procedure Since 1800" in Jacob, The Reform of Civil Procedural Law and Other Essays in Civil Procedure, (1982) 193 at 209. 28 Judicature Act 1876 (Q) 40 Vict No 6, s 4(8); Supreme Court Act 1878 (SA) 41 & 42 Vict No 116, s 5(8); Supreme Court Act 1880 (WA) 44 Vict No 10, s 7(7); Judicature Act 1883 (Vict) 47 Vict No 761, s 8(7). The notable exception was New South Wales, which did not enact a statute modelled on the Judicature Acts until 1970; though see discussion in Meagher, Heydon and Leeming (eds), Meagher, Gummow and Lehane's Equity: Doctrines and Remedies, 4th ed (2002) at 50 [2-075]. Although Tasmania did enact such a statute in the Legal Procedure (Footnote continues on next page) States29. It was also reproduced in s 32 of the Judiciary Act 1903 (Cth) and s 22 of the Federal Court of Australia Act 1976 (Cth). The corresponding provision of the Supreme Court Act 1933 (ACT) is s 32. The Act of 1875 set out in its first Schedule, Rules of Court which were to regulate proceedings in the High Court of Justice and the Court of Appeal30. Order XXVII r 1 of the 1875 Rules authorised a court or a judge "at any stage of the proceedings" to allow either party to amend a statement of claim or defence or reply, and provided that: "all such amendments shall be made as may be necessary for the purpose of determining the real questions or question in controversy between the parties." The language of O XXVII r 1, so far as it related to amendments, was substantially replicated in O XXVIII r 1 of the Rules of the Supreme Court 1883 (UK). The verbal formula was replicated in r 501(a) of the ACT Rules. Rules 501(a) and 501(c) also give effect, in relation to amendments, to the statutory purposes effected by s 32 of the Supreme Court Act 1933 (ACT). There is a distinction between the discretion of a court to allow a party to amend its pleading on that party's motion and the requirement to make all such amendments as may be necessary to determine the real questions in controversy. That requirement engages with the authority conferred on the court to make amendments of its own motion31. The point was made in 1887 by the Full Court of the Supreme Court of Victoria in Dwyer v O'Mullen32 in relation to O XXVIII r 1 of the 1875 Rules. Higinbotham CJ said of the last clause of the rule that it33: Act 1903 (Tas) 3 Ed VII No 19, that Act contained no provision equivalent to s 24(7) of the Judicature Act 1873 (UK). 29 Supreme Court Civil Procedure Act 1932 (Tas), s 10(7); Supreme Court Act 1935 (SA), s 27; Supreme Court Act 1935 (WA), s 24(7); Supreme Court Act 1970 (NSW), s 63; Supreme Court Act 1986 (Vict), s 29; Supreme Court Act 1995 (Q), 30 See Supreme Court of Judicature Act 1875 (UK), s 16. 31 An example of this kind of case is Nottage v Jackson [1883] 11 QBD 627 at 638. 32 (1887) 13 VLR 933. 33 (1887) 13 VLR 933 at 939, and 940 per Williams J and Kerferd J. "makes an amendment mandatory. The judge is under the obligation of making an amendment, but only for a certain purpose and in certain cases – for the purpose of determining the real question in controversy between the parties – that being expressed in many cases to be the question which the parties had agitated between themselves, and had come to trial upon." The position is different where a party seeks to set up, by amendment, a new case at trial34. The Judicature Act Rules introduced "fact pleading". That change was effected by O XIX r 4 of the 1875 Rules which required that: "Every pleading shall contain as concisely as may be a statement of the material facts on which the party pleading relies, but not the evidence by which they are to be proved". Professor Jolowicz described the system thus introduced as one that35: "confers almost total freedom on the parties to fix 'the facts' to which the law is to be applied, leaving it to the court only to resolve, on the evidence produced by the parties, those issues which are in controversy between them." The new system of fact pleading was allied with an approach to the amendment of pleadings which was relatively liberal when compared with the system it replaced36. The coupling of fact pleading and a liberal approach to amendment of pleadings was noted by Barwick CJ in Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd37. In the same case Gibbs J made reference to s 22 of the 34 Hipgrave v Case (1885) 28 Ch D 356 at 361 per Earl Selborne LC. 35 Jolowicz, On Civil Procedure, (2000) at 364. 36 Under that system, the perceived "evils" attending amendments to pleadings, especially at hearing and to make a new case, meant that they were very difficult to obtain: see Watts v Hyde (1847) 2 Ph 406 at 409-410 per Cottenham LC [41 ER 1000 at 1001]. Plaintiffs were at liberty to amend to the extent that they were merely adding parties, but if the Bill was sought to be amended further then they would need to institute new proceedings or recommence existing proceedings in amended form: Palk v Lord Clinton (1805) 12 Ves Jun 48 at 65-66 per Grant MR [33 ER 19 at 25-26]; Roe v Davies [1876] 2 Ch D 729 at 734 per Bacon V-C. 37 (1981) 148 CLR 457 at 472-473; [1981] HCA 7. Federal Court Act which he characterised as giving effect to a "fundamental principle of the Judicature Act procedure", namely "the avoidance of a multiplicity of proceedings"38. He quoted, with evident approval, the observation of Sir George Jessel MR that the section meant39: "that whenever a subject of controversy arises in an action which can conveniently be determined between the parties to the action, the court should, if possible, determine it so as to prevent further and needless litigation". To that observation, Gibbs J added40: "It has been said, and no doubt rightly, that having regard to the nature and purposes of the provision, it should be construed liberally." Section 24(7) of the Act of 1873 was originally enacted as part of a reform process designed to avoid a multiplicity of proceedings in different courts. That imperative, imported into its statutory offspring in Australia, also applies to the avoidance of a multiplicity of proceedings in the same court. Nevertheless, as indicated in the passage quoted by Gibbs J in Philip Morris, practical considerations of convenience are relevant to its application. The same is true for Rules of Court which, in relation to amendment of pleadings, give effect to the original objective of the section. They confer a flexibility which was not intended to provide parties with a tactical instrument, and their deployment as such should not be permitted where it wastes the time and resources of the court and other parties. A liberal approach to amendment applications in the late 19th century is evidenced by the observation of Bramwell LJ in Tildesley v Harper41 that he would always give leave to amend unless satisfied that the party applying was acting malâ fide or that he had, by his blunder, "done some injury to his opponent which could not be compensated for by costs or otherwise". The dissenting 38 (1981) 148 CLR 457 at 489. 39 (1981) 148 CLR 457 at 489, citing In the Goods of Tharp (1878) 3 PD 76 at 81. 40 (1981) 148 CLR 457 at 489, citing Roberts v Gippsland Agricultural and Earth Moving Contracting Co Pty Ltd [1956] VLR 555 at 564-565 and McLeish v Faure (1979) 25 ALR 403 at 413-414. 41 [1878] 10 Ch D 393 at 397 and at 397 per Thesiger LJ. See also the observations of Bacon V-C in both King v Corke [1875] 1 Ch D 57 at 59-60 and Roe v Davies [1876] 2 Ch D 729 at 733-734. judgment of Bowen LJ in Cropper v Smith42 is often quoted as the leading statement of that liberal approach. He said43: "I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party." He later added44: "I have found in my experience that there is one panacea which heals every sore in litigation, and that is costs." It is necessary to recall the context of the statements made by Bowen LJ. An action for infringement of a patent had been defended by two partners, one objecting to the validity of the patent, the other not doing so. The objection as to validity was upheld in the Court of Appeal but only in favour of the partner who had raised it. This led to radically inconsistent orders in respect of the two men. Bowen LJ would have allowed the unsuccessful defendant to amend his case to raise invalidity on the basis that the case had already been fought "exactly in the same way as it would have been fought" had both partners objected to validity45. The other judges in the Court of Appeal would not have allowed the amendment. The House of Lords reversed the decision of the Court of Appeal, but on the basis of inconsistency in the orders and because of its practical consequences for the successful partner46. While the Earl of Selborne LC saw "very excellent sense" in the general tenor of Bowen LJ's observations on the subject of amendment, nevertheless he would not have reversed the orders of the Court of Appeal in order to allow an amendment to be made47. Bowen LJ's belief in costs as a cureall for the inconveniences of amendment may have underpinned the high degree of satisfaction which he 42 [1884] 26 Ch D 700. 43 [1884] 26 Ch D 700 at 710. 44 [1884] 26 Ch D 700 at 711. 45 [1884] 26 Ch D 700 at 711. 46 Smith v Cropper (1885) 10 App Cas 249. The successful partner would have been adversely affected by the award of injunctive relief against his unsuccessful partner who had not raised validity. 47 (1885) 10 App Cas 249 at 259. expressed with the state of civil procedure when, as Lord Bowen, he asserted "without fear of contradiction" in 1887 that48: "it is not possible in the year 1887 for an honest litigant in her Majesty's Supreme Court to be defeated by any mere technicality, any slip, any mistaken step in his litigation. The expenses of the law are still too heavy, and have not diminished pari passu with other abuses. But law has ceased to be a scientific game that may be won or lost by playing some particular move." (emphasis in original) This claim has not been vindicated by history and has been characterised charitably as "premature, if not overexaggerated"49. The approach reflected in the judgments of Bramwell LJ and Bowen LJ was approved by this Court in 1912 in relation to the Rules of the Supreme Court of New South Wales. In his judgment in Shannon v Chun50, Barton J set out at length passages from those judgments. O'Connor J referred to the "principles always acted on in granting amendments" as "principles laid down with great clearness by Bramwell LJ and Bowen LJ"51. Isaacs J said of the relevant rule52: "There is not only a power, but even an imperative duty cast by the legislature on the Court, to let no formality stand in the way of solid justice. The Court is directed to make every amendment, and at all times, so as to enable it to do what is right between the parties, and in the fairest and fullest manner possible to arrive at a determination of the substantial matter in dispute." 48 Bowen, "Progress in the Administration of Justice during the Victorian Period", in Select Essays in Anglo-American Legal History, (1907) vol 1, 516 at 541, discussed in Jolowicz, On Civil Procedure, (2000) at 356. 49 Jacob, "The Judicature Acts 1873-1875 Vision and Reality", in Jacob (ed), The Reform of Civil Procedural Law and Other Essays in Civil Procedure, (1982) 301 50 (1912) 15 CLR 257 at 260-262; [1912] HCA 52. 51 (1912) 15 CLR 257 at 263. 52 (1912) 15 CLR 257 at 265. More than half a century later the principles enunciated by Bowen LJ were again held by this Court to be applicable, in a case considering the amendment provisions of the Rules of the Supreme Court of the Northern Territory53. The Judicature Act Rules and their Australian offspring did not in terms make reference to the public interest in the expeditious dispatch of the business of the courts. The way in which proceedings progress has been left to the parties. This may be seen as an aspect of the adversarial system which is a dominant part of the common law inheritance of Judicature Act procedure54. In this respect, however, the adversarial system has been qualified by changing practices in the courts directed to the reduction of costs and delay and the realisation that the courts are concerned not only with justice between the parties, which remains their priority, but also with the public interest in the proper and efficient use of public resources. The Judicature Acts and associated Rules of Court are reflected in rr 501 and 502 of the ACT Rules. The ACT Rules, like their precursors, confer the discretion to give leave to amend and impose the duty to make amendments for the purpose of deciding the real issues in, and avoiding multiplicity of, proceedings. The discretion is exercised in the context of the common law adversarial system as qualified by changing practice. But that is not a system which today permits disregard of undue delay. Undue delay can undermine confidence in the rule of law. To that extent its avoidance, based upon a proper regard for the interests of the parties, transcends those interests. Another factor which relates to the interests of the parties but transcends them is the waste of public resources and the inefficiency occasioned by the need to revisit interlocutory processes, vacate trial dates, or adjourn trials either because of non- compliance with court timetables or, as in this case, because of a late and deliberate tactical change by one party in the direction of its conduct of the litigation. These are matters which, even under the Australian versions of the Judicature Act system, unaffected by the sequelae of the civil procedure reforms of 1998 in the United Kingdom, are to be regarded as both relevant and mandatory considerations in the exercise of the discretion conferred by rules such as r 502. Recognition of the public interest in the administration of civil justice procedures in Australia and the United Kingdom pre-dates the Woolf Report and its attendant reforms. In Dawson v Deputy Commissioner of Taxation55, King CJ 53 Clough and Rogers v Frog (1974) 48 ALJR 481 at 482 per McTiernan ACJ, Menzies, Gibbs and Mason JJ; 4 ALR 615 at 618. 54 Jolowicz, On Civil Procedure, (2000) at 27-28. 55 (1984) 71 FLR 364 at 366. acknowledged the responsibility of judges to ensure, "so far as possible and subject to overriding considerations of justice", that the limited resources which the State commits to the administration of justice are not wasted by the failure of parties to adhere to trial dates of which they have had proper notice. In a late amendment case considered by the House of Lords in 198756, there was a marked departure from the approach of Bowen LJ in Cropper v Smith. Lord Griffiths required that judges considering amendments weigh in the balance57: "the pressure on the courts caused by the great increase in litigation and the consequent necessity that, in the interests of the whole community, legal business should be conducted efficiently". The same indulgence could not be shown towards the negligent conduct of litigation as might have been possible in a "more leisured age"58. That approach was followed by Sheppard J in a revenue case heard in the Federal Court59. And in the New South Wales Court of Appeal in GSA Industries, Samuels JA said that60: "the emollient effect of an order for costs as a panacea may now be consigned to the Aladdin's cave which Lord Reid rejected as one of the fairy tales in which we no longer believe." The approach reflected in these authorities was applied by a majority of the Full Court of the Federal Court in Bomanite Pty Ltd v Slatex Corp Aust Pty Ltd61. Sali v SPC Ltd62 was concerned with a refusal by the Full Court of the Supreme Court of Victoria to grant an application for an adjournment of an appeal. By majority, this Court held that in the exercise of a discretion to refuse or grant an adjournment, the judge of a busy court was entitled to consider "the 56 Ketteman v Hansel Properties Ltd [1987] AC 189. 57 [1987] AC 189 at 220. 58 See GSA Industries Pty Ltd v NT Gas Ltd (1990) 24 NSWLR 710 at 716 per Samuels JA. 59 Commissioner of Taxation v Brambles Holdings Ltd (1991) 28 FCR 451 at 455- 60 (1990) 24 NSWLR 710 at 716. 61 (1991) 32 FCR 379 at 387 per Gummow J, 391-393 per French J. 62 (1993) 67 ALJR 841; 116 ALR 625; [1993] HCA 47. effect of an adjournment on court resources and the competing claims by litigants in other cases awaiting hearing in the court as well as the interests of the parties"63. Brennan, Deane and McHugh JJ went on to say64: "What might be perceived as an injustice to a party when considered only in the context of an action between parties may not be so when considered in a context which includes the claims of other litigants and the public interest in achieving the most efficient use of court resources." Toohey and Gaudron JJ dissented in the result but acknowledged by reference to GSA Industries, that65: "The contemporary approach to court administration has introduced another element into the equation or, more accurately, has put another consideration onto the scales. The view that the conduct of litigation is not merely a matter for the parties but is also one for the court and the need to avoid disruptions in the court's lists with consequent inconvenience to the court and prejudice to the interests of other litigants waiting to be heard are pressing concerns to which a court may have regard." (footnote omitted) The observations made in the two joint judgments in Sali were linked to the particular knowledge that a judge or court, called upon to exercise a discretion to adjourn, would have of the state of that court's lists. However, the mischief engendered by unwarranted adjournments and consequent delays in the resolution of civil proceedings goes beyond their particular effects on the court in which those delays occur. In that connection, there have been a number of cases after Sali in which it has been accepted, in the context of Judicature Act Rules, that the public interest in the efficient use of court resources is a relevant consideration in the exercise of discretions to amend or adjourn66. 63 (1993) 67 ALJR 841 at 843-844 per Brennan, Deane and McHugh JJ; 116 ALR 64 (1993) 67 ALJR 841 at 844; 116 ALR 625 at 629. 65 (1993) 67 ALJR 841 at 849; 116 ALR 625 at 636. See also [2007] ACTSC 82 at 66 See for example, State Pollution Control Commission v Australian Iron & Steel Pty Ltd (1992) 29 NSWLR 487 at 494-495 per Gleeson CJ; Byron v Southern Star Group Pty Ltd t/a KGC Magnetic Tapes (1995) 13 ACLC 301 at 302 per Kirby J; Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd (1996) 40 NSWLR 543 at 553-554 per Clarke JA and 601-605 per Powell JA. Both the primary judge and the Court of Appeal in the present case regarded the decision of this Court in J L Holdings as determinative of the approach they should take to the amendment application. But that case was factually very different. As counsel for Aon pointed out in written submissions: The applicant had explained, and the Court had accepted, that the application was made late because a material fact had only recently been discovered67. The application was made before a hearing date was fixed and, once it had been fixed, the period of six months intervening between the application and the commencement of trial meant that the hearing dates would not be imperilled68. The point sought to be raised could not be avoided at trial, as it was apparent on the face of certain documents69. In reversing the decision of the Full Federal Court, which upheld the primary judge's refusal to grant leave to amend the defence, this Court held case management principles to be relevant, but said that they could not be used to prevent a party from litigating a fairly arguable case70. In their joint judgment, Dawson, Gaudron and McHugh JJ reaffirmed the "principles established in Cropper v Smith and accepted in Clough and Rogers v Frog…"71. They held that nothing said in Sali suggested that proper principles of case management might be employed, except perhaps in extreme circumstances, to shut a party out from litigating a case which was fairly arguable. Their 67 (1997) 189 CLR 146 at 152. 68 (1997) 189 CLR 146 at 154. 69 (1997) 189 CLR 146 at 154. 70 (1997) 189 CLR 146 at 154-155. 71 (1997) 189 CLR 146 at 154. 72 (1997) 189 CLR 146 at 154. "Case management is not an end in itself. It is an important and useful aid for ensuring the prompt and efficient disposal of litigation. But it ought always to be borne in mind, even in changing times, that the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that aim." And further73: "Justice is the paramount consideration in determining an application such as the one in question. Save in so far as costs may be awarded against the party seeking the amendment, such an application is not the occasion for the punishment of a party for its mistake or for its delay in making the application. Case management, involving as it does the efficiency of the procedures of the court, was in this case a relevant consideration. But it should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties." Kirby J wrote a concurring judgment. It might be thought a truism that "case management principles" should not supplant the objective of doing justice between the parties according to law. Accepting that proposition, J L Holdings cannot be taken as authority for the view that waste of public resources and undue delay, with the concomitant strain and uncertainty imposed on litigants, should not be taken into account in the exercise of interlocutory discretions of the kind conferred by r 502. Also to be considered is the potential for loss of public confidence in the legal system which arises where a court is seen to accede to applications made without adequate explanation or justification, whether they be for adjournment, for amendments giving rise to adjournment, or for vacation of fixed trial dates resulting in the resetting of interlocutory processes. Application of the Rules to ANU amendment The amendment allowed in the present case could only be supported as an exercise of the discretion under r 502. On no view was it required by r 501(a). The requirement to make amendments for the purpose of deciding "the real issues in the proceeding" does not impose some unqualified duty to permit the late addition of any new claim. The real issues in the proceeding were to be determined in this case by reference to the limited way in which ANU had 73 (1997) 189 CLR 146 at 155. deliberately chosen to frame its original claim against Aon, and its persistence in that limited approach up to the trial date itself. The requirement under r 501(c) to avoid a multiplicity of proceedings is to be understood as operating within the framework of an ordered progression to a fixed trial date. It does not oblige the court to accept the addition of new claims at the last moment before trial, on the basis that if they are not allowed there might be subsequent proceedings in which those claims are raised. The steps which r 501(c) requires to be taken to avoid multiple proceedings are "all necessary amendments". The Court had no basis for inferring that, absent the amendments, there would be further proceedings. In any event the institution by ANU of fresh proceedings, raising claims which could have been raised against Aon much earlier in the existing proceedings, would face the potential barrier of an abuse of process objection and, possibly, that kind of estoppel74 discussed in Henderson v Henderson75 and by this Court in Port of Melbourne Authority v Anshun Pty Ltd76. Abuse of process principles may be invoked to prevent attempts to litigate that which should have been litigated in earlier proceedings as well as attempts to re-litigate that which has already been determined. Reichel v Magrath77 is a long standing example of a re-litigation case decided on abuse of process grounds, rather than on the basis of res judicata or issue estoppel78. It was relied upon in Walton v 74 Probably better described as an extended application of res judicata; see Heydon, Cross on Evidence, 6th Aust ed (2000) vol 1 at 179 [5170]; and Johnson v Gore Wood & Co [2002] 2 AC 1 at 31 per Lord Bingham. As to classificatory issues, see Effem Foods Pty Ltd v Trawl Industries (Aust) Pty Ltd (1993) 43 FCR 510 at 512-514 per Northrop and Lee JJ. 75 (1843) 3 Hare 100 [67 ER 313]. 76 (1981) 147 CLR 589; [1981] HCA 45. 77 (1889) 14 App Cas 665. 78 Although it has been said that the case could have been dealt with on grounds of res judicata: see Handley, Spencer Bower, Turner and Handley on the Doctrine of Res Judicata, 3rd ed (1996) at 121 [231] and 252 [445], and Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198 at 202 per Handley J. Gardiner79 and Rogers v The Queen80. In the former case, Mason CJ, Deane and "proceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings." (footnote omitted) The majority also endorsed the observation in Hunter v Chief Constable of West Midland Police82 that courts have an inherent power to prevent misuse of their procedures in a way which, although not inconsistent with the literal application of the Rules, would nevertheless be unfair to a party to the litigation "or would otherwise bring the administration of justice into disrepute among right-thinking people"83. In Rogers v The Queen84, the majority characterised as an abuse the tender of records of interview at a criminal trial in circumstances where the records had been rejected as involuntary at another trial on other charges. "The circumstances in which abuse of process may arise are extremely varied and it would be unwise to limit those circumstances to fixed categories. Likewise, it would be a mistake to treat the discussion in judgments of particular circumstances as necessarily confining the concept of abuse of process." (footnote omitted) The House of Lords in Johnson v Gore Wood & Co86 acknowledged the distinction between "Henderson v Henderson abuse of process" on the one hand, 79 (1993) 177 CLR 378; [1993] HCA 77. 80 (1994) 181 CLR 251; [1994] HCA 42. 81 (1993) 177 CLR 378 at 393. 82 [1982] AC 529 at 536. 83 (1993) 177 CLR 378 at 393; see also Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256 at 264 [6] per Gleeson CJ, Gummow, Hayne and Crennan JJ; [2006] HCA 27. 84 (1994) 181 CLR 251. 85 (1994) 181 CLR 251 at 255. and cause of action estoppel and issue estoppel on the other. Referring to public interest considerations of these reasons, Lord Bingham of Cornhill said87: the kind discussed earlier "The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all." A broad merits-based judgment was required, taking account of public and private interests affected and focussing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it an issue which could and should have been raised earlier. As Lord Bingham said88: "As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not." A court faced with a late amendment seeking to raise new claims and the in terrorem prediction that a multiplicity of proceedings may follow if the amendment is not allowed, is entitled to have regard to the barriers to the implementation of suggestions of that kind. It might be said that the adjournment effected by the primary judge's decision to entertain the amendment application and to allow written submissions to be filed and evidence to be put on, and the subsequent delay in his decision, rendered academic any concern about further waste of court resources or inefficiencies flowing from the amendment ultimately being allowed. It might be said that, in those circumstances, to refuse the amendment would be punitive. It is true that a punitive response to the substance of a late amendment application is not appropriate. But neither is a party to be rewarded by weighing in its favour the disruptive consequences of its own application. In any event the granting of the amendment in this case, at the time it was granted, meant that there would still be further delay while interlocutory processes flowing from the new claims were put in place. Aon had to prepare a new defence. The further delay, in the 87 [2002] 2 AC 1 at 31. 88 [2002] 2 AC 1 at 31. circumstances of this case, would be such as to undermine confidence in the administration of civil justice. This factor was not taken into account by the primary judge, nor by the Court of Appeal. The discretion of the primary judge miscarried and the Court of Appeal was in error in not allowing the appeal. In the circumstances, giving proper weight to the factors to which I have referred, the application for the amendment should have been refused. The above conclusion is able to be reached on the facts of this case without having regard to r 21. But r 21 strengthens the conclusion. It mandates consideration of the effect of the proposed amendment on the just resolution of the real issues in the proceeding "with minimum delay and expense". It informs both the requirements set out and the discretions conferred in rr 501 and 502. Conclusion For the preceding reasons the appeal should be allowed. I agree with the orders proposed in the joint judgment. Crennan Bell GUMMOW, HAYNE, CRENNAN, KIEFEL AND BELL JJ. These proceedings were commenced in December 2004 by the Australian National University ("ANU") against three insurers. It claimed an indemnity for losses it had suffered by reason of the destruction of, and damage to, buildings and their contents at its Mount Stromlo Complex by fire in January 2003. ANU's insurance broker Aon Risk Services Australia Limited ("Aon") was joined to the proceedings in June 2005. The claim against it was limited to its failure to arrange the renewal of insurance over some of the property which the insurers claimed was not the subject of insurance. Two of the insurers also claimed, in their defences filed in April 2005, to be entitled to reduce their liability to indemnify ANU with respect to the property which was insured, because the value of the property had been substantially understated by ANU. On 15 November 2006, which was the third day of a four-week period which had been allocated for the trial of the action in the Supreme Court of the Australian Capital Territory, ANU reached a settlement with the insurers. It may be inferred that the sums secured by way of settlement did not reflect the full replacement value of the property. ANU sought an adjournment of the trial of its claim against Aon and foreshadowed an application for leave to amend that claim to allege a substantially different case. It now sought to allege that, under a different contract for services, Aon had been obliged to ascertain and declare correct values to the insurers and provide certain advices to ANU regarding insurance. Gray J granted leave to amend89. Influential to his Honour's decision was that ANU sought to raise real triable issues. His Honour placed a lesser importance upon the objectives stated in the Court Procedures Rules 2006 (ACT) ("the Court Procedures Rules"), of the minimisation of delay and cost of proceedings. His Honour considered the matter to be governed by the decision in Queensland v J L Holdings Pty Ltd90. His Honour's decision was upheld by a majority of the Court of Appeal (Higgins CJ and Penfold J, Lander J dissenting) subject to a further order that ANU pay Aon's costs occasioned by the amendment on an indemnity basis91. 89 The Australian National University v Chubb Insurance Company of Australia Ltd [2007] ACTSC 82. 90 (1997) 189 CLR 146; [1997] HCA 1. 91 AON Risk Services Australia Ltd v Australian National University [2008] ACTCA Crennan Bell The background to the amendments The proceedings were initially brought against Chubb Insurance Company of Australia Limited ("Chubb"), CGU Insurance Limited ("CGU") and ACE Insurance Limited ("ACE"), the insurers under a policy of insurance for the period 31 December 2002 to 31 December 2003 in the proportions, respectively, of 50 per cent, 20 per cent and 30 per cent of any loss. The property in question was listed in two Schedules – Schedule C and the Property Not Insured Schedule ("the PNI Schedule") – which had been provided to Chubb by Aon in October 2002. The Schedules were alleged to form part of the contract of insurance. At the time the proceedings were brought the insurers had each made some payments to ANU with respect to the property referred to in Schedule C. However, in their defences, filed in April 2005, Chubb and CGU alleged that ANU had declared the value of the property in Schedule C to be much less than its true value and that had they known its true value, they would have taken steps to reduce their risk. They claimed to be entitled to reduce their liability to indemnify ANU pursuant to s 28(3) of the Insurance Contracts Act 1984 (Cth) which provides that, in the event of a misrepresentation being made to the insurer prior to the contract of insurance being entered into, but where the insurer was not entitled to avoid the contract, the insurer's liability is reduced to the amount that would place the insurer in the position the insurer would have been in if the misrepresentation had not been made. ACE claimed to be entitled to an additional premium as a consequence of the misrepresentation. The insurers further disputed that the property listed in the PNI Schedule was the subject of the policy at all. ANU alleged that the balance due to it with respect to the property in the two Schedules was in the order of $75 million. The original claim brought by ANU against Aon was based upon a contract dated 28 June 1999, the term of which was said to have been extended until 30 June 2004. ANU alleged that the agreement required Aon to arrange for the renewal of insurance cover for the period in question for all buildings and their contents which were then the subject of insurance which was due to expire. It was alleged to be an implied term of that agreement that Aon would exercise reasonable care, skill and diligence in arranging for the renewal of the expiring cover. The claim against Aon was expressed to be in the alternative to the claims brought against the insurers and to arise in the event that the buildings and contents referred to in the two Schedules were not the subject of a contract of Crennan Bell insurance. Understood in light of the insurers' defences, the claim was limited to the property in the PNI Schedule, which was alleged not to have been insured. ANU alleged that if insurance had not been effected, Aon had breached its retainer and breached its duty of care to it by failing to arrange insurance or to advise ANU that it had not been arranged. On the first day appointed for trial ANU, Chubb and CGU commenced a mediation and a settlement was reached two days later. A settlement was reached with ACE without mediation. The settlements provided for further payments by the insurers in satisfaction of ANU's claims with respect to the Schedule C property. It is not necessary to detail the amounts paid. It was later alleged that the amounts paid left a substantial shortfall remaining in the claim with respect to the Schedule C property in consequence of the insurers' claim to reduction of liability and no payment at all for the claim with respect to the property in the PNI Schedule. After dealing with orders which were made by consent with respect to the insurers, counsel for ANU advised the court that ANU would apply for leave to amend its claim against Aon and sought an adjournment of the trial. In the events which followed the adjournment was effectively granted. The trial did not proceed. The applications were not heard until 27 November 2006. The decision to grant leave was not made until 12 October 2007. This delay is regrettable given the nature of the applications, the time at which they were brought and their importance for the future of the litigation. The amendments The amendments permitted to be made to ANU's claim as a result of the grant of leave were substantial. The contract between ANU and Aon was now said to be one for insurance broking and advisory services and to have come into effect from 1 July 1999. It is not apparent from the documents particularised whether it was referable, in part, to the agreement earlier pleaded. Pursuant to this agreement Aon was to review ANU's policies of insurance; meet with ANU on a regular basis in the process of review; prepare submissions to insurers which would ensure all material facts were disclosed and enable the insurers to determine their criteria for indemnity; and place insurance upon instructions from ANU. It was to provide an annual stewardship report. Central to the new claim was the allegation that Aon knew or ought to have known that the true replacement value of both building and contents were material to the insurers' consideration of indemnity, including the decision to reinsure. ANU alleged breaches of the services agreement, and of Aon's duty of Crennan Bell care to it, by its failure to arrange insurance on declared values which were the true replacement values of the property; that it failed altogether to obtain valuations of the contents of the property; and that it was negligent in failing to obtain accurate valuations. The claims with respect to Aon's failure to effect insurance of the PNI Schedule property were maintained, but in the context of the new agreement for services. It was now alleged that Aon knew that ANU required renewal of insurance cover in 2003 over all the property which had been listed in three Schedules, which included the PNI and Schedule C lists, and which had been the subject of its express instruction to insure in the preceding year. It was alleged that Aon failed to obtain ANU's instructions before placing the insurance in question and that it had failed to advise of the effect of the provision for a "deductible", which is to say an "excess", on the amount ANU was not entitled to recover. The contract of insurance was alleged to have applied a deductible of $1 million to "each and every loss" with the effect that ANU might not be able to recover where buildings had a value less than the deductible. It was further alleged that Aon had breached provisions of the Australian Securities and Investments Commission Act 2001 (Cth) in the provision of its services; it had made representations as to future matters without reasonable grounds for doing so92; and had been guilty of misleading and deceptive conduct93. The "explanation" The proposed amended pleading had not been drawn when ANU sought an adjournment of the trial. Senior Counsel for ANU outlined three matters as necessitating the foreshadowed application for amendment: the settlements which had just taken place with the insurers; the recent receipt by ANU of affidavits of evidence from Chubb and CGU and of discovery from Chubb of documents relating to its underwriting processes; and conversations with the insurers during mediation. It was said that it was now apparent that the declared value of the property had critical significance to the insurers, beyond the calculation of premium, and that Aon was directly responsible for the valuations. 92 See Australian Securities and Investments Commission Act 2001 (Cth), s 12BB. 93 See Australian Securities and Investments Commission Act 2001, s 12DA. Crennan Bell On the hearing of the application ANU filed an affidavit by its solicitor. It assumes some importance. The solicitor referred to the fact and date of the receipt of Chubb's and CGU's affidavit evidence and discovery. He referred to the undertaking of mediation and said that settlement was reached with Chubb and CGU. He said that the contents of the papers exchanged at the mediation and the discussions had been agreed to be kept confidential by the parties to it. He concluded by stating that, at the conclusion of mediation, Senior Counsel for ANU advised that it was necessary to seek leave to amend. It was pointed out to the solicitor, in cross-examination, that his affidavit did not offer any explanation for the need to amend. The solicitor agreed with the suggestion that a decision had been made not to give a reason. He was asked questions concerning his understanding of the pleadings prior to the application for amendment. He said that he understood Chubb and CGU to have alleged that the declared values of the property had been understated. He said that he appreciated that no claim was originally made against Aon with respect to the Schedule C property. When he reviewed the pleadings he did not consider raising such a claim. He agreed that the decision to do so was made on the basis of information received during the mediation. Letters from Chubb to ANU dated 2 April 2003 and 24 October 2003 were produced to the solicitor. They contained the insurer's explanations of the significance of the provision of accurate declared values to its decision to insure. It appeared that Chubb had also discovered its underwriting manuals, containing a similar reference, in November 2005. Statements in J L Holdings The starting point in this appeal is the provisions of the Court Procedures Rules which govern the application to amend and to which reference will shortly be made. However, it is convenient to refer at this point to statements made in J L Holdings which pre-date those Rules. Those statements were considered by the primary judge and members of the Court of Appeal as authoritative in limiting the application of the case management principles to which those Rules give expression. It is not necessary to recite the facts of J L Holdings. It is sufficient to observe that the defendant, the State of Queensland, sought leave to amend its defence to raise a clearly arguable matter, which depended upon the terms of a statute but which had been overlooked in the course of the litigation towards a trial. The primary judge refused leave to amend, on the basis that it would jeopardise the dates allocated for hearing. The plurality (Dawson, Gaudron and Crennan Bell McHugh JJ) did not accept that J L Holdings would necessarily be prejudiced by the amendments, given the nature of the issue raised, the fact that the hearing was some months ahead and the likelihood that the length of the trial would be such as to accommodate it94. More important, for present purposes, is what their Honours said concerning the requirements of case management, which had been referred to by the Full Court of the Federal Court in dismissing the appeal from the primary judge's orders. Referring to the previous decision of this Court in Sali v SPC Ltd95, the plurality said of case management principles96: "… nothing in that case suggests that those principles might be employed, except perhaps in extreme circumstances, to shut a party out from litigating an issue which is fairly arguable. Case management is not an end in itself. It is an important and useful aid for ensuring the prompt and efficient disposal of litigation. But it ought always to be borne in mind, even in changing times, that the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that aim." In their conclusion, their Honours said97: "In our view, the matters referred to by the primary judge were insufficient to justify her Honour's refusal of the application by the applicants to amend their defence and nothing has been made to appear before us which would otherwise support that refusal. Justice is the paramount consideration in determining an application such as the one in question. Save in so far as costs may be awarded against the party seeking the amendment, such an application is not the occasion for the punishment of a party for its mistake or for its delay in making the application. Case management, involving as it does the efficiency of the procedures of the court, was in this case a relevant consideration. But it should not have been allowed to prevail over the injustice of shutting the applicants out 94 Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 at 154. 95 (1993) 67 ALJR 841; 116 ALR 625; [1993] HCA 47. 96 Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 at 154. 97 Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 at 155. Crennan Bell from raising an arguable defence, thus precluding the determination of an issue between the parties. In taking an opposite view, the primary judge was, in our view, in error in the exercise of her discretion." The Court Procedures Rules As earlier stated, the starting point for any application to amend must be the rules governing such applications in the relevant jurisdiction. In this case rr 501 and 502 appear in Ch 2 of the Court Procedures Rules, which is concerned with civil proceedings in courts in the Territory. Rule 501 provides: "All necessary amendments of a document98 must be made for the purpose of – deciding the real issues in the proceeding; or correcting any defect or error in the proceeding; or avoiding multiple proceedings." Rule 502 provides: "(1) At any stage of a proceeding, the court may give leave for a party to amend, or direct a party to amend, an originating process, anything written on an originating process, a pleading, an application or any other document filed in the court in a proceeding in the way it considers appropriate. The court may give leave, or give a direction, on application by the party or on its own initiative. The court may give leave to make an amendment even if the effect of the amendment would be to include a cause of action arising after the proceeding was started. If there is a mistake in the name or identity of a party, the court must give leave for, or direct the making of, amendments necessary 98 Refers to any document filed in a proceeding, other than affidavits: r 500. Crennan Bell to correct the mistake, even if the effect of the amendments is to substitute another person as a party. This rule does not apply in relation to an amendment of an order. Rule 21 states the purposes of the Rules in Ch 2 and requires that they be applied to those ends. The Rule is in these terms: "(1) The purpose of this chapter, and the other provisions of these rules in their application to civil proceedings, is to facilitate the just resolution of the real issues in civil proceedings with minimum delay and expense. (2) Accordingly, these rules are to be applied by the courts in civil proceedings with the objective of achieving – the just resolution of the real issues in the proceedings; and the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties. The parties to a civil proceeding must help the court to achieve the objectives. The court may impose appropriate sanctions if a party does not comply with these rules or an order of the court." The decision of the primary judge and of the Court of Appeal Gray J acknowledged that r 21(2)(b) encompassed case management principles99 but did not consider that the Rules required an approach different from that taken in J L Holdings, namely that justice is the paramount 99 The Australian National University v Chubb Insurance Company of Australia Ltd [2007] ACTSC 82 at [24]. Crennan Bell consideration100. His Honour said that "appropriate consideration" should be given to the matters embraced in the Court Procedures Rules, such as the timely disposal of all proceedings and costs101. It is not apparent that these objectives were given much weight by his Honour. Gray J did not accept that the case now sought to be brought by ANU with respect to Aon's retainer was new, but accepted that the issue with respect to the declared values of the Schedule C property was102. His Honour did not consider the explanations for the delay in seeking amendment entirely satisfactory103. He accepted however that ANU's lawyers had not appreciated Aon's involvement with respect to the declared values until the receipt of the evidence from Chubb and CGU, discovery relating to the underwriting process and discussions in mediation. He accepted that this had caused the lawyers to reassess the matters which had previously been pleaded by those insurers104. The factor identified by his Honour as of fundamental importance, to the grant of leave, was that the allegations raised real triable issues between ANU and Aon105. In the Court of Appeal Penfold J held that the application fell squarely within principles to be drawn from J L Holdings, because the amendments raised a claim which was arguable, there were no case management considerations that required refusal of leave to amend and Aon could be compensated for any 100 The Australian National University v Chubb Insurance Company of Australia Ltd [2007] ACTSC 82 at [36]-[37]. 101 The Australian National University v Chubb Insurance Company of Australia Ltd [2007] ACTSC 82 at [37]. 102 The Australian National University v Chubb Insurance Company of Australia Ltd [2007] ACTSC 82 at [38], [41]-[42]. 103 The Australian National University v Chubb Insurance Company of Australia Ltd [2007] ACTSC 82 at [43]. 104 The Australian National University v Chubb Insurance Company of Australia Ltd [2007] ACTSC 82 at [42]-[43]. 105 The Australian National University v Chubb Insurance Company of Australia Ltd [2007] ACTSC 82 at [43]. Crennan Bell prejudice by an order for costs106. Higgins CJ likewise considered it sufficient, to justify the grant of leave, that the amendment would not cause substantial injustice and that any injustice was capable of remedy by an order for costs107. His Honour appears to have accepted as correct the weight placed by the primary judge upon the fact that "real triable issues" were raised108. Both Higgins CJ and Penfold J considered it significant that it had not been suggested that evidence was lost as a result of the delay in raising the claims109 and that the additional work which Aon's solicitor had said would be rendered necessary by the amendments could be compensated by an appropriate order for costs110. Their Honours considered indemnity costs should be ordered. Lander J, in his dissent, listed a number of matters concerning which the primary judge had given insufficient weight. He considered the primary judge to have been wrong to conclude that ANU's lawyers had not appreciated that the declared value of the Schedule C buildings had consequences for the insurers111. His Honour said that it could be inferred that ANU deliberately adopted the course that it did and maintained it until it settled with the insurers. In his Honour's view, in the circumstances, ANU should have been required to conduct its case "in accordance with the decision it made some years before"112. 106 AON Risk Services Australia Ltd v Australian National University [2008] ACTCA 107 AON Risk Services Australia Ltd v Australian National University [2008] ACTCA 108 AON Risk Services Australia Ltd v Australian National University [2008] ACTCA 109 AON Risk Services Australia Ltd v Australian National University [2008] ACTCA 13 at [16] per Higgins CJ, [66] per Penfold J. 110 AON Risk Services Australia Ltd v Australian National University [2008] ACTCA 13 at [16] per Higgins CJ, [66] per Penfold J. 111 AON Risk Services Australia Ltd v Australian National University [2008] ACTCA 112 AON Risk Services Australia Ltd v Australian National University [2008] ACTCA Crennan Bell Penfold J agreed that an inference that ANU deliberately conducted its case in this way could be drawn113. However it did not follow, in her Honour's view, that the application should be refused; that would amount to punishment114. ANU's failure to provide an explanation for its "tactics" did not provide a basis for such a course, her Honour said115. Aon had further objected to that part of the amendments which related to its failure to insure the PNI Schedule buildings, as an abuse of process. This was on the basis that the claim, as amended, would be inconsistent with the judgment entered against CGU and the matters thereby determined in respect of the insurance coverage of the PNI Schedule. The primary judge rejected that contention116. Lander J pointed out that it was not possible to conclude that the judgment represented any determination in respect of that part of ANU's claim against CGU117. In any event, his Honour observed, the issue raised was more relevant to an application to strike out the claim, which had not been before the primary judge118. Rule 501(a) The judgments below dealt with the question of amendment by reference to discretionary considerations, despite their reference to r 501. The general discretion is given by r 502(1). On this appeal ANU relied upon the importance placed by the Court Procedures Rules on the need for the courts to decide the 113 AON Risk Services Australia Ltd v Australian National University [2008] ACTCA 114 AON Risk Services Australia Ltd v Australian National University [2008] ACTCA 115 AON Risk Services Australia Ltd v Australian National University [2008] ACTCA 116 The Australian National University v Chubb Insurance Company of Australia Ltd [2007] ACTSC 82 at [53]. 117 AON Risk Services Australia Ltd v Australian National University [2008] ACTCA 118 AON Risk Services Australia Ltd v Australian National University [2008] ACTCA Crennan Bell "real issues in the proceedings"119, and more particularly upon the terms of r 501(a), which obliges amendments that are necessary for deciding the real issues in the proceeding. ANU did not dispute that the substance of its contention was that the "real issues in the proceeding" extended to any issues which a party sought in good faith to advance and which were arguable. For the reasons which follow, that contention cannot be accepted. Rules 501 and 502 are more recent adaptations of Rules of the Supreme Court 1883 (UK), which dealt with amendment of pleadings after the passage of the Judicature Acts120. Those earlier Rules121 provided the pattern for rules adopted by many courts in this country122. They included power to correct errors, occasioned by way of "slip" or omission and mistakes in the identities of parties. The Rule which gave power to amend defects or errors in any proceedings contained the statement, in imperative terms123: "and all necessary amendments shall be made for the purpose of determining the real question or issue raised by or depending on the proceedings". The Rule containing the general discretionary power to amend pleadings or indorsements124 contained a similar command, except that the purpose of the amendments considered to be necessary was the determination of "the real questions in controversy between the parties". There is no relevant distinction between questions or issues raised and controversies125. 119 Court Procedures Rules, r 21(2)(a). 120 Supreme Court of Judicature Act 1873 (UK); Supreme Court of Judicature Act 121 Rules of the Supreme Court 1883 (UK), O XXVIII. 122 See for example High Court Rules 1952 (Cth), O 29. 123 Rules of the Supreme Court 1883, O XXVIII r 12; and see High Court Rules 1952, O 29 r 12. 124 Rules of the Supreme Court 1883, O XXVIII r 1; and see High Court Rules 1952, O 29 r 1. 125 The Supreme Court Annual Practice considered the principal differences in the rules to be that the general discretion was confined in its terms to pleadings, (Footnote continues on next page) Crennan Bell The purpose of these earlier Rules, to permit a determination of the real issue or controversy in the proceedings, which informed those powers to amend, is now stated as a separate and distinct obligation in r 501(a). The question which arises from the terms of r 501(a) is whether it is necessary to make an amendment for the purpose of deciding the real issues in the proceeding. Some general observations concerning rr 501(a), 502(1) and 21 are necessary at this point. The words "the real issues in the proceeding" in r 501(a) obviously refer to issues raised, perhaps unclearly, in the pleadings at the time of the application for leave to amend. The "real" issues may also extend beyond the pleadings, as cases concerned with the purpose stated in the original Rules show. But, as is explained in these reasons, to be regarded as a real issue, and for amendment therefore to be necessary, the relevant dispute or controversy must exist at the time of the application. Amendments raising entirely new issues fall to be considered under the general discretion given by r 502(1), read with the objectives of r 21. The purposes of r 21, to minimise the delay and expense of proceedings, are plainly intended to guide the exercise of discretion in r 502. There may be questions as to the extent to which the objectives there stated apply where a matter is identified as a "real issue" in the proceedings and one therefore within the terms of r 501(a). The Rule would appear to oblige amendment without more. The amendments necessary for the purpose of r 501 may be less likely to be productive of delay and cost and therefore not cut across the objectives to a substantial degree. And it may be that the "real" issues in civil proceedings, referred to in r 21 and read with that Rule's objectives, are intended to refer to issues which are not peripheral. In referring to the "just resolution of the real issues" in the proceedings, r 21 may be intending to refer to those issues which are determinative of the matter in dispute. It is not necessary to further consider these questions. Even if r 21 and the objectives there stated have no real significance for the application of r 501(a), r 501(a) did not apply to the amendments proposed by ANU. whereas defects or errors could be corrected in legal documents of any kind: White et al (eds), The Annual Practice 1922 at 461. Crennan Bell In a passage from Cropper v Smith126, which was cited with approval in J L Holdings127, Bowen LJ said, with respect to the object of the courts to determine matters in controversy128: "Now, I think it is a well established principle that the object of Courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights. Speaking for myself, and in conformity with what I have heard laid down by the other division of the Court of Appeal and by myself as a member of it, I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or of grace." Much of what Bowen LJ said to this point was relevant to the discretionary aspect of the Rule under which the application was brought. As earlier explained, that Rule also required consideration of whether amendment was necessary to determine the "real questions in controversy between the parties". Bowen LJ went on129: "It seems to me that as soon as it appears that the way in which a party has framed his case will not lead to a decision of the real matter in controversy, it is as much a matter of right on his part to have it corrected, if it can be done without injustice, as anything else in the case is a matter of right." The statements made by Bowen LJ in Cropper v Smith are best understood by reference to the circumstances of that case, and the course of the litigation. 126 (1884) 26 Ch D 700. A fuller report appears in (1884) 1 RPC 81. 127 Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 at 154; and see also Clough and Rogers v Frog (1974) 48 ALJR 481 at 482 per the Court (McTiernan ACJ, Menzies, Gibbs and Mason JJ); 4 ALR 615 at 618. 128 Cropper v Smith (1884) 26 Ch D 700 at 710; and see Clough and Rogers v Frog (1974) 48 ALJR 481 at 482; 4 ALR 615 at 618. 129 Cropper v Smith (1884) 26 Ch D 700 at 711. Crennan Bell This is true of many statements made in cases concerning amendment of pleadings, even if they are stated in terms of general application. In Cropper v Smith, Smith and his business partner Hancock were co-defendants in an action brought to restrain them from infringing a patent for improvements in lace machines. Hancock had been the patentee prior to the patent being sold by his trustee in bankruptcy to the plaintiffs. Each of the defendants denied infringement, but only Smith gave notice of objection to the validity of the patent, on the grounds of lack of novelty and insufficiency of the specification. The patent was held valid by Pearson J130, but invalid by the Court of Appeal on the construction of the claims in the specification. In the Court of Appeal the question was whether Hancock could rely upon invalidity, not himself having delivered objections and defended upon that basis. Much of the reasons deal with the question of whether he was estopped from doing so because he had been the patentee. This was not established, but the majority in the Court of Appeal, Cotton and Fry LJJ, held that he could not have the benefit of the decision respecting invalidity, having regard to the issues on the pleadings and refused his application to amend his defence to enable him to do so. Bowen LJ was in dissent on the lastmentioned issue, but this does not detract from his reasoning as to whether there was a question in controversy which necessitated the grant of leave to amend. His Lordship observed that Hancock had left it to his partner to fight the case on invalidity131 and surmised either that he did not wish to make allegations concerning his own patent or that his advisers might have thought he was estopped from having the benefit of an order based upon invalidity132. Bowen LJ identified them as mistakes of judgment and turned to consider the position of the other party and whether an order for costs was necessary. It is at this point that the special feature of this case is brought out. His Lordship said133: "Here I fail even to see that the Respondents want costs to remedy any grievance, because they have been put to none. The case has been fought exactly in the same way as it would have been fought if Mr Hancock had 130 See (1884) 1 RPC 81 at 84-86. 131 Cropper v Smith (1884) 26 Ch D 700 at 709. 132 Cropper v Smith (1884) 26 Ch D 700 at 710. 133 Cropper v Smith (1884) 26 Ch D 700 at 711. Crennan Bell delivered particulars of objection, and therefore it seems to me that he ought to be allowed to amend." The issue of invalidity, which Hancock sought to raise by way of amendment had not only been raised, albeit by his co-defendant, it had also been litigated and it affected Hancock in exactly the same way as his partner. An appeal by Smith and Hancock to the House of Lords succeeded134. The Earl of Selborne LC pointed out that it would have been an odd result if a patent was declared invalid as against one defendant and the rest of the world, but valid as against the other defendant135. Bowen LJ's conclusion turned upon the identification of the issue of invalidity, already litigated, as a matter in controversy concerning Hancock. Amendment was necessary in order to permit a determination with respect to Hancock. The Rule's requirement to amend in these circumstances may be seen as engaged. Tildesley v Harper136 is often referred to in connection with amendment to raise a matter in issue between the parties, but not expressed in the pleadings. It was there alleged that the donee of a power who had granted a lease had received a bribe and the circumstances surrounding the payment were stated. The lessee's defence denied the payments and those facts, but did not specifically deny a bribe having been given. Fry J gave judgment for the plaintiff, in the absence of a sufficient denial, despite the defendant having filed an affidavit in which he denied the bribe137. The Court of Appeal held that leave to amend ought to have been given to permit the denial to be made. Thesiger LJ said that the object of the rules "is to obtain a correct issue between the parties, and when an error has been made it is not intended that the party making the mistake should be mulcted in the loss of the trial"138. It may be inferred that the plaintiff well understood the matter of the bribe to be in issue. During argument it was pointed out that, were it otherwise, he might have moved for judgment on admissions prior to trial139. 134 (1885) 10 App Cas 249. 135 Smith v Cropper (1885) 10 App Cas 249 at 253. 136 (1878) 10 Ch D 393. 137 Tildesley v Harper (1878) 10 Ch D 393 at 395. 138 Tildesley v Harper (1878) 10 Ch D 393 at 397. 139 Tildesley v Harper (1878) 10 Ch D 393 at 395. Crennan Bell Amendment was held to have been wrongly refused in O'Keefe v Williams140 where it was sought to allege that the Crown had derogated from its grant of licences to O'Keefe. Isaacs J identified the real question in controversy as whether a wrong had been done to O'Keefe by the Crown in issuing licences to a third party notwithstanding that O'Keefe was the Crown's licensee141. The facts relating to the bargain concerning the licences were not in dispute nor was it in doubt that the terms of the bargain were to be ascertained by implication from those facts. His Honour held that the lawyer's description of the bargain was not the real question in controversy; "[i]t was the mere husk, not the kernel"142. Mention should also be made of Dwyer v O'Mullen143, not because it was correctly decided, but because the case is often referred to in connection with amendment of pleading. The error which attended the question, whether the matters the subject of the application for leave to amend were part of the controversy between the parties, is instructive for present purposes. The case concerned the execution of a deed by an illiterate person. Although it bore her mark, she denied that she had executed it and said that she had put her mark to a document which she believed related only to some potatoes and flour. The primary judge's decision, to refuse her application to amend to plead that she had been induced to execute by mistake and fraud was upheld, on the ground that these questions "had not been previously in controversy"144. This was not a correct approach. The issue as pleaded comprehended the state of mind which formed the basis for the pleas sought to be raised. Moreover the primary judge had found on the evidence that she had not understood what she had executed and was not aware that she was parting with her interest in the land145. The need for amendment will often arise because of some error or mistake having been made in the drafting of the existing pleading or in a judgment about 140 (1910) 11 CLR 171; [1910] HCA 40. 141 O'Keefe v Williams (1910) 11 CLR 171 at 205. 142 O'Keefe v Williams (1910) 11 CLR 171 at 205. 143 (1887) 13 VLR 933. 144 Dwyer v O'Mullen (1887) 13 VLR 933 at 939 per Higinbotham CJ. 145 Dwyer v O'Mullen (1887) 13 VLR 933 at 934. Crennan Bell what is to be pleaded in it. But it is not the existence of such a mistake that founds the grant of leave under rules such as r 501(a), although it may be relevant to show that the application is bona fide146. What needs to be shown for leave to amend to be given, as the cases referred to above illustrate, is that the controversy or issue was in existence prior to the application for amendment being made. It is only then that it is necessary for the court to allow it properly to be raised to enable a determination upon it. The existence of a controversy may be seen in the way in which the matter had already been pleaded, albeit inferentially, in Tildesley v Harper and Dwyer v O'Mullen; or where the issue is raised by another party in the same proceedings but in respect of which the party applying was inextricably involved, as in Cropper v Smith. It may be present in the nature of the bargain struck, as in O'Keefe v Williams. A consideration of these cases does not suggest that an unduly narrow approach should be taken to what are the real issues in controversy, although they are not, or are not sufficiently, expressed in the pleading. These observations do not avail ANU. True it was that the insurers had pleaded that the values declared for the purposes of insurance had been substantially understated, but this had no relevance to Aon, having regard to the extent of the contractual obligations ANU had identified as in issue. The insurers' defences should have alerted ANU to the need to reconsider its claim against Aon, if its contractual relationship was other than it had alleged. Prior to the application to amend there was no issue about Aon's involvement with respect to the declared values. Indeed there was no issue concerning any aspect of the insurance effected with respect to the Schedule C property. There was no dispute about deductibles and none about Aon having made misrepresentations or engaging in misleading conduct. The dispute was only as to whether Aon had been obliged to effect cover over the PNI Schedule property but had not done so. Rule 501(a) did not require the allowance of the amendment sought by ANU. A multiplicity of proceedings: r 501(c) In the course of argument ANU submitted that the order for amendment could be seen as supported by r 501(c) because it overcame the need for ANU to 146 See Tildesley v Harper (1878) 10 Ch D 393 at 396-397 per Bramwell LJ. Crennan Bell bring further proceedings. ANU submitted that, at the time the application for leave to amend was heard, the time for the bringing of the claims which were the subject of the amendment had not expired. Nonetheless, in the event that leave to amend was refused, the possibility of ANU bringing further proceedings depended upon a number of matters. It required that ANU be able to abandon its case against Aon in such a way as would not preclude a later claim. Discontinuance of the existing proceeding required leave147. The case having been fixed for trial and leave to amend having been refused, Aon might have led evidence to answer the claim originally framed against it and moved for judgment. It cannot be assumed that ANU could have avoided a judgment being entered. That raises the question of whether further proceedings would be met by an application for a stay based upon Port of Melbourne Authority v Anshun Pty Ltd148. The issue would then be whether an exercise of reasonable diligence on the part of ANU would have led to the bringing of the claim in these, the earlier proceedings. It is not immediately obvious how ANU could have dealt with an Anshun point in the further proceedings to which it refers. Further consideration of these matters is not required. It is sufficient for present purposes that ANU did not seek to show this Court how it might have done so. It is therefore not demonstrated that the amendment proposed was necessary to avoid multiple proceedings. Rule 501(c) did not apply. The application fell to be determined solely by exercise of the power conferred by r 502(1), read in conjunction with the purposes in r 21. Rules 502(1) and 21(1) – the power to allow amendment and the objectives A power is given to the court by r 502(1) to permit the amendment of pleadings "in the way it considers appropriate". Rule 21(2) specifies, in pars (a) and (b), the objectives to be sought by the exercise of the power conferred by r 502(1). In this setting, some care is called for in describing the grant or refusal of an application to amend in such a way as to suggest a very wide discretion in the decision whether to permit amendment. The observations by Gleeson CJ, 147 Court Procedures Rules, r 1160(2). 148 (1981) 147 CLR 589 at 602 per Gibbs CJ, Mason and Aickin JJ; [1981] HCA 45 referring to Henderson v Henderson (1843) 3 Hare 100 at 115 [67 ER 313 at 319]. Crennan Bell Gaudron and Hayne JJ in Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission149 are apposite: "'Discretion' is a notion that 'signifies a number of different legal concepts'150. In general terms, it refers to a decision-making process in which 'no one [consideration] and no combination of [considerations] is necessarily determinative of the result'151. Rather, the decision-maker is allowed some latitude as to the choice of the decision to be made152." Their Honours went on to point out that the latitude as to choice may be considerable or it may be narrow. Given the terms of r 21, it could not be said that the latitude as to the choice of decision, as to whether to grant or refuse leave to amend, was at large. The objectives in r 21(2) are to be sought in the exercise of the power given by r 502(1). The overriding purpose of r 21, to facilitate the just resolution of the real issues in civil proceedings with minimum delay and expense, is stated in the rules of other courts in Australia153, although those purposes and the obligations cast upon the court and the parties may be stated in somewhat different terms. 149 (2000) 203 CLR 194 at 204-205 [19]; [2000] HCA 47. 150 Norbis v Norbis (1986) 161 CLR 513 at 518 per Mason and Deane JJ; [1986] HCA 151 Jago v District Court (NSW) (1989) 168 CLR 23 at 76 per Gaudron J; [1989] HCA 152 See Jago v District Court (NSW) (1989) 168 CLR 23 at 75-76 per Gaudron J; Russo v Russo [1953] VLR 57 at 62 per Sholl J. See also Pattenden, Judicial Discretion and Criminal Litigation, 2nd ed (1990), at 5-6. 153 See Civil Procedure Act 2005 (NSW), ss 56-58; Uniform Civil Procedure Rules 1999 (Q), r 5; Supreme Court (General Civil Procedure) Rules 2005 (Vic), r 1.14; Supreme Court Civil Rules 2006 (SA), r 3; Supreme Court Rules (NT), r 1.10; Rules of the Supreme Court 1971 (WA), O 1, rr 4A, 4B. The Supreme Court Rules 2000 (Tas) and the Federal Court Rules (Cth) appear to be the only rules now absent such a provision. Crennan Bell In submissions before Gray J, Aon relied upon a decision of the New South Wales Court of Appeal154 which distinguished J L Holdings on the basis of later provisions of the Civil Procedure Act 2005 (NSW). His Honour did not consider those provisions to be comparable with the Court Procedures Rules and the Act under which they were made, the Court Procedures Act 2004 (ACT). No issue is taken concerning that aspect of his Honour's decision. The importance of r 21 to an application for leave to amend is to be determined by reference to its own terms. The purposes stated in r 21 reflect principles of case management by the courts. Such management is now an accepted aspect of the system of civil justice administered by courts in Australia. It was recognised some time ago, by courts here and elsewhere in the common law world, that a different approach was required to tackle the problems of delay and cost in the litigation process155. In its report in 2000, Managing Justice: A review of the federal civil justice system156, the Australian Law Reform Commission noted that: "Over the last ten years Australian courts have become more active in monitoring and managing the conduct and progress of cases before them, from the time a matter is lodged Rule 21(2)(b) indicates that the rules concerning civil litigation no longer are to be considered as directed only to the resolution of the dispute between the parties to a proceeding. The achievement of a just but timely and cost-effective resolution of a dispute has an effect upon the court and upon other litigants. In 154 State of New South Wales v Mulcahy [2006] NSWCA 303. 155 See for example Department of Transport v Chris Smaller (Transport) Ltd [1989] AC 1197 at 1207 per Lord Griffiths; and see Galea v Galea (1990) 19 NSWLR 263 at 281-282 per Kirby ACJ; State Pollution Control Commission v Australian Iron & Steel Pty Ltd (1992) 29 NSWLR 487 at 493-494 per Gleeson CJ; and Lenijamar Pty Ltd v AGC (Advances) Limited (1990) 27 FCR 388 at 395 per Wilcox and 156 Australian Law Reform Commission, Report No 89. 157 Australian Law Reform Commission, Managing Justice: A review of the federal civil justice system, Report No 89, (2000) at [6.3]. Crennan Bell Sali v SPC Ltd Toohey and Gaudron JJ explained that case management reflected158: "[t]he view that the conduct of litigation is not merely a matter for the parties but is also one for the court and the need to avoid disruptions in the court's lists with consequent inconvenience to the court and prejudice to the interests of other litigants waiting to be heard …". It will be recalled that in J L Holdings the plurality said that nothing in Sali v SPC suggested that principles of case management might be employed "except perhaps in extreme circumstances, to shut a party out from litigating an issue which is fairly arguable"159. Their Honours said that case management was not to be seen as an end to itself and that the ultimate aim of the court remained the attainment of justice, even in changing times160. In Gale v Superdrug Stores Plc161 Millett LJ expressed a similar concern, regarding the need to ensure that justice is not sacrificed. Waller LJ, delivering the judgment of the Court of Appeal in Worldwide Corporation Ltd v GPT Ltd162, said that such a concern did not pay sufficient regard to the fact that the courts are concerned to do justice to all litigants. Where a party had had a sufficient opportunity to plead his or her case, it may be necessary for the court to make a decision which may produce a sense of injustice in that party, for the sake of doing justice to the opponent and to other litigants163. The statement of Waller LJ identifies a fundamental premise of case management. What may be just, when amendment is sought, requires account to be taken of other litigants, not just the parties to the proceedings in question. The statement is consistent with what was said in Sali v SPC, which reflected a proper understanding of case management. The statements in J L Holdings do not 158 Sali v SPC Ltd (1993) 67 ALJR 841 at 849; and see also at 843-844 per Brennan, Deane and McHugh JJ; 116 ALR 625 at 636, 629. 159 Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 at 154. 160 Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 at 154. 161 [1996] 1 WLR 1089 at 1098; [1996] 3 All ER 468 at 477. 162 [1998] EWCA Civ 1894. 163 Worldwide Corporation Ltd v GPT Ltd [1998] EWCA Civ 1894. Crennan Bell reflect such an understanding and are not consistent with what was said in Sali v SPC. To say that case management principles should only be applied "in extreme circumstances" to refuse an amendment implies that considerations such as delay and costs can never be as important as the raising of an arguable case; and it denies the wider effects of delay upon others. An important aspect of the approach taken by the plurality in J L Holdings was that it proceeded upon an assumption that a party should be permitted to amend to raise an arguable issue subject to the payment of costs occasioned by the amendment164. So stated it suggests that a party has something approaching a right to an amendment. That is not the case. The "right" spoken of in Cropper v Smith needs to be understood in the context of that case and the Rule, which required amendment to permit the determination of a matter already in issue. It is more accurate to say that parties have the right to invoke the jurisdiction and the powers of the court in order to seek a resolution of their dispute165. Subject to any rights to amend without leave given to the parties by the rules of court, the question of further amendment of a party's claim is dependent upon the exercise of the court's discretionary power. The objectives of case management are now expressly stated in r 21 of the Court Procedures Rules. It cannot be overlooked that later rules, such as r 21, are likely to have been written with the decision in J L Holdings in mind166. The purposes stated in r 21 cannot be ignored. The Court Procedures Rules make plain that the Rules are to be applied having regard to the stated objectives of the timely disposal of the proceedings at an affordable cost. There can be no doubt about the importance of those matters in litigation in the courts of the Australian Capital Territory. 164 Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 at 154: "If it is arguable, the applicants should be permitted to argue it, provided that any prejudice to [J L Holdings] might be compensated by costs"; and at 155: "[Case management] … should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence". 165 As observed by Jolowicz, On Civil Procedure, (2000) at 62. 166 See for example the Second Reading Speech to the Civil Procedure Bill 2005 and Uniform Civil Procedure Rules 2005 (NSW), New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 6 April 2005 at 15115. Crennan Bell Of course, a just resolution of proceedings remains the paramount purpose of r 21; but what is a "just resolution" is to be understood in light of the purposes and objectives stated. Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to a just resolution of proceedings. This should not detract from a proper opportunity being given to the parties to plead their case, but it suggests that limits may be placed upon re-pleading, when delay and cost are taken into account. The Rule's reference to the need to minimise costs implies that an order for costs may not always provide sufficient compensation and therefore achieve a just resolution. It cannot therefore be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs. In the past it has more readily been assumed that an order for the costs occasioned by the amendment would overcome injustice to the amending party's opponent. In Cropper v Smith Bowen LJ described an order for costs as a panacea that heals all167. Such a view may largely explain the decision of this Court in Shannon v Lee Chun168, which upheld a decision allowing the plaintiff to raise a new case at the second trial, but which imposed a condition as to costs. The modern view is that even an order for indemnity costs may not always undo the prejudice a party suffers by late amendment169. In the present case it is difficult to see that such an order could be sufficient compensation, given that Aon would be required to again defend litigation which was, effectively, to be commenced afresh. The views expressed by Lord Griffiths in Ketteman v Hansel Properties Ltd170, that justice cannot always be measured in money and that a judge is entitled to weigh in the balance the strain the litigation imposes upon litigants, 167 Cropper v Smith (1884) 26 Ch D 700 at 711. 168 (1912) 15 CLR 257; [1912] HCA 52. See the reasons of Barton J at 262-263, O'Connor J at 264 and Isaacs J at 266. 169 See The Commonwealth v Verwayen (1990) 170 CLR 394 at 464-465 per Toohey J; [1990] HCA 39. 170 [1987] AC 189 at 220, referred to in The Commonwealth v Verwayen (1990) 170 CLR 394 at 464-465 per Toohey J, 482 per Gaudron J. Crennan Bell are also now generally accepted171. In Bomanite Pty Ltd v Slatex Corp Aust172 French J said of Bowen LJ's statements in Cropper v Smith: "… That may well have been so at one time, but it is no longer true today … Non-compensable inconvenience and stress on individuals are significant elements of modern litigation. Costs recoverable even on an indemnity basis will not compensate for time lost and duplication incurred where litigation is delayed or corrective orders necessary." the plurality In Ketteman Lord Griffiths recognised, as did J L Holdings, that personal litigants are likely to feel the strain more than business corporations or commercial persons173. So much may be accepted. But it should not be thought that corporations are not subject to pressures imposed by litigation. A corporation in the position of a defendant may be required to carry a contingent liability in its books of account for some years, with consequent effects upon its ability to plan financially, depending upon the magnitude of the claim. Its resources may be diverted to deal with the litigation. And, whilst corporations have no feelings, their employees and officers who may be crucial witnesses, have to bear the strain of impending litigation and the disappointment when it is not brought to an end. The stated object in the Court Procedures Rules, of minimising delay, may be taken to recognise the ill-effects of delay upon the parties to proceedings and that such effects will extend to other litigants who are also seeking a resolution in their proceedings. The objectives stated in r 21 do not require that every application for amendment should be refused because it involves the waste of some costs and some degree of delay, as it inevitably will. Factors such as the nature and importance of the amendment to the party applying cannot be overlooked. Whilst r 21 assumes some ill-effects will flow from the fact of a delay, that will not prevent the parties dealing with its particular effects in their case in more detail. It is the extent of the delay and the costs associated with it, together with 171 Berowra Holdings Pty Ltd v Gordon (2006) 225 CLR 364 at 376-377 [37] per Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ; [2006] HCA 32; GSA Industries Pty Ltd v NT Gas Ltd (1990) 24 NSWLR 710 at 715-716 per Samuels JA; Worldwide Corporation Ltd v GPT Ltd [1998] EWCA Civ 1894. 172 (1991) 32 FCR 379 at 392. 173 Ketteman v Hansel Properties Ltd [1987] AC 189 at 220; Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 at 155. Crennan Bell the prejudice which might reasonably be assumed to follow and that which is shown, which are to be weighed against the grant of permission to a party to alter its case. Much may depend upon the point the litigation has reached relative to a trial when the application to amend is made. There may be cases where it may properly be concluded that a party has had sufficient opportunity to plead their case and that it is too late for a further amendment, having regard to the other party and other litigants awaiting trial dates. Rule 21 makes it plain that the extent and the effect of delay and costs are to be regarded as important considerations in the exercise of the court's discretion. Invariably the exercise of that discretion will require an explanation to be given where there is delay in applying for amendment. The fact that an explanation had been offered for the delay in raising the defence was regarded as a relevant consideration in J L Holdings174. Generally speaking, where a discretion is sought to be exercised in favour of one party, and to the disadvantage of another, an explanation will be called for. The importance attached by r 21 to the factor of delay will require that, in most cases where it is present, a party should explain it. Not only will they need to show that their application is brought in good faith, but they will also need to bring the circumstances giving rise to the amendment to the court's attention, so that they may be weighed against the effects of any delay and the objectives of the Rules. There can be no doubt that an explanation was required in this case. Application of r 502(1) and r 21 to this case The salient features of the application for leave to amend in this case were, as Lander J pointed out in his dissent, that the amendments sought to introduce new and substantial claims; they were so substantial as to require Aon, in effect, to defend again, as from the beginning; the application was brought during the time set for the trial of the action and would result in the abandonment of the trial if granted; and there was a question whether costs, even indemnity costs, would overcome the prejudicial effects on Aon if the litigation to this point was not productive of an outcome. The primary judge was in error in failing to recognise the extent of the new claims and the effect that amendment would have upon Aon. His Honour was in error in failing to recognise the extent to which the objectives of r 21 would not be met if the amendments were allowed. The known ill-effects of a 174 Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 at 152. Crennan Bell delayed determination, which informed the purposes and objectives of the Rule, were present. Rule 502(1) read with r 21 did not provide an unfettered discretion to grant leave to amend. The objectives of r 21 were to be pursued in the exercise of the power conferred by r 502(1). The fact that ANU's new claims were arguable was not itself sufficient to permit amendment and could not prevail over the objectives of r 21. A "just" resolution of the proceedings between ANU and Aon required those objectives to be taken into account. Given the requirements of the Rule and the effects associated with delay, it was incumbent upon ANU to tender an explanation as to why the matter had been allowed to proceed to trial in its existing form. It needed to explain why it was seeking leave to amend at the time of the trial, when the two insurer's defences had identified the issue central to the claim it sought to bring against Aon more than 12 months earlier. None was given. His Honour was in error in accepting that ANU had provided a satisfactory explanation. The statements made by counsel foreshadowing leave to amend were not evidence. The ANU's solicitor's later affidavit did not support them. In addition to the defences, the letters written by Chubb in 2003 showed that ANU was told of the importance of the valuation of the property to the insurers long before the receipt of more recent documentation. ANU's solicitor did not suggest that the defences, raising the same matter in connection with the misrepresentations, were misunderstood in their potential relevance to Aon. He did not say that ANU was first alerted to Aon's possible involvement as a result of what was said in mediation. The possibility that ANU was not in a position to explain itself was adverted to in argument on the appeal but that possibility could not be taken very far. ANU's solicitor could have said that ANU only realised the potential for claim as a result of confidential communications, but he made no such claim. In a carefully worded affidavit he merely said (i) that the discussions were agreed to be kept confidential; and (ii) at the conclusion of mediation Senior Counsel advised of the need to amend. In cross-examination he agreed that the decision to amend was made on the basis of information received during mediation. At no point did he suggest that this was the first time that ANU appreciated that it had a claim against Aon of the kind it sought to raise by amendment. This evidence was no basis for a finding that there had been an oversight and that ANU's lawyers had not appreciated Aon's possible involvement until the mediation talks. It invited speculation as to whether ANU first realised the potential for a claim against Aon during mediation, assuming there to be a basis for such a claim. One possibility is that ANU only decided to proceed against Aon when it realised the insurers would not settle for a higher sum. If so, that was the basis upon which it had determined to proceed to trial. The absence of Crennan Bell explanation suggests the possibility that none which favoured ANU could be offered. Whatever was the reason for the delay in applying for the amendment, none was provided. There was no mistake of judgment, such as that to which Bowen LJ referred, which might be weighed against the effects of the delay, effects which r 21 required to be taken seriously into account. The primary judge was mistaken as to the extent of the new claims and what would be required of Aon if they were permitted and the matter effectively re-litigated. His Honour incorrectly elevated the fact that the claim was arguable to a level of importance it did not have. His Honour failed to recognise the importance of the objective stated in r 21, of the timely disposal of the proceedings. The exercise of the power conferred by r 502(1) miscarried175. The application should have been refused. Conclusion and orders An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend. Statements in J L Holdings which suggest only a limited application for case management do not rest upon a principle which has been carefully worked out in a significant succession of cases176. On the contrary, the statements are not consonant with this Court's earlier recognition of the effects of delay, not only upon the parties to the proceedings in question, but upon the court and other litigants. Such statements should not be applied in the future. A party has the right to bring proceedings. Parties have choices as to what claims are to be made and how they are to be framed. But limits will be placed 175 House v The King (1936) 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ; [1936] HCA 40. 176 See John v Federal Commissioner of Taxation (1989) 166 CLR 417; [1989] HCA 5; Imbree v McNeilly (2008) 82 ALJR 1374 at 1385-1386 [45] per Gummow, Hayne and Kiefel JJ; 248 ALR 647 at 659; [2008] HCA 40. Crennan Bell upon their ability to effect changes to their pleadings, particularly if litigation is advanced. That is why, in seeking the just resolution of the dispute, reference is made to parties having a sufficient opportunity to identify the issues they seek to agitate. In the past it has been left largely to the parties to prepare for trial and to seek the court's assistance as required. Those times are long gone. The allocation of power, between litigants and the courts arises from tradition and from principle and policy177. It is recognised by the courts that the resolution of disputes serves the public as a whole, not merely the parties to the proceedings. Rule 21 of the Court Procedures Rules recognises the purposes of case management by the courts. It recognises that delay and costs are undesirable and that delay has deleterious effects, not only upon the party to the proceedings in question, but to other litigants. The Rule's objectives, as to the timely disposal of cases and the limitation of cost, were to be applied in considering ANU's application for amendment. It was significant that the effect of its delay in applying would be that a trial was lost and litigation substantially recommenced. It would impact upon other litigants seeking a resolution of their cases. What was a "just resolution" of ANU's claim required serious consideration of these matters, and not merely whether it had an arguable claim to put forward. A just resolution of its claim necessarily had to have regard to the position of Aon in defending it. An assumption that costs will always be a sufficient compensation for the prejudice caused by amendment is not reflected in r 21. Critically, the matters relevant to a just resolution of ANU's claim required ANU to provide some explanation for its delay in seeking the amendment if the discretion under r 502(1) was to be exercised in its favour and to the disadvantage of Aon. None was provided. In view of the conclusion reached concerning the amendments, it is not necessary to further consider Aon's contentions based upon abuse of process. Since the drafting of these reasons we have had the opportunity to read the reasons, in draft, of the Chief Justice. There may be some point of distinction in our views as to what J L Holdings holds. We do not understand there to be any difference between us as to the principles which should now be applied in relation to applications for amendment. 177 Jolowicz, On Civil Procedure, (2000) at 79. Crennan Bell The appeal should be allowed with costs, the orders of the Court of Appeal and of the primary judge set aside, except for the orders that Aon have leave to appeal and that ANU pay Aon's costs of that appeal. In lieu it should be ordered that the appeal to that Court be allowed, the application by ANU for leave to amend be dismissed and that it pay Aon's costs of that application. The parties will need to list the matter in the Supreme Court of the Australian Capital Territory for further directions their final determination. the proceedings towards 118 HEYDON J. The circumstances are set out in the joint reasons. The interrelationship between rr 21, 501 and 502 The only satisfactory method of reconciling rr 21, 501 and 502 of the Court Procedures Rules 2006 (ACT)178 ("the Rules") is to accept the following conclusions arrived at in the joint judgment: That r 501 creates a duty, which operates in relation to the "real issues" in the proceeding between the parties as it exists at the time when the court is considering whether it is necessary to make an amendment179. That r 502 creates a discretion, which operates in relation to an application for leave to make amendments raising new issues – issues which were not in controversy between the parties before the time when the application for leave was made; and that among the factors relevant to the exercise of that discretion are those referred to in r 21180. That result is to be supported, not by reference to authorities decided on other rules of court, but as a matter of construction of those particular rules of court. Application of r 501 The following conclusions of the joint judgment must also be accepted: that r 501(a) did not apply in the present circumstances181; and that ANU did not succeed in demonstrating that r 501(c) could assist its position182. Obviously r 501(b) could not apply. It follows that r 501 had no application to ANU's desire to amend. What rule did ANU rely on before the primary judge? According to the operative part of the primary judge's reasons, ANU's application for leave to amend the statement of claim was made in reliance only 178 They are set out at [58]-[60] above. 179 At [69] and [82] above. 180 At [71] above. 181 At [85] above. 182 At [86]-[88] above. on r 501183. If that were so, the consequence of r 501 being inapplicable is that the primary judge erred in law in failing to dismiss the application for leave to amend. Was it so? In his second address presented at the adjourned application for leave to amend on 27 November 2006, after the first address had been delivered and the evidence had closed, senior counsel for ANU read r 501, and submitted that r 501(a) and (c) applied184. He then read in part or referred to r 502(1), (2) and (3), rr 503-504, 506-507, 509 and 511-513. These rules had come into force on 1 July 2006, about five months earlier; and the primary judge disavowed familiarity with the rules "in their new form". Counsel's reading of r 502(1) was part of a general survey of the Rules. He made no specific point about r 502(1). He then said: "[T]he overriding purpose of amendments is to ensure that the real questions in the proceedings are determined". This was to use the language of r 501(a), not r 502(1). He reiterated the submission at the conclusion of his address. In the course of that half hour address, he made no further reference to the Rules. In particular, he did not refer to r 21. Counsel for Aon at one point referred to r 21, to which the primary judge replied that he understood that r 21 stated the purpose of the Rules, but that r 501 was a specific provision requiring that "all necessary amendments of a document … be made for the purpose of deciding the real issues in the proceedings". Counsel for Aon then submitted that r 501 had to be read in the light of the objectives set out in r 21(2)(a) and (b), and that Queensland v J L Holdings Pty Ltd185 was not decided on enactments of the type that now control the power of amendment granted to the Supreme Court of the Australian Capital Territory. Apart from a reference to r 513 in relation to costs, there was no further reference to the Rules. Counsel for ANU did not say that his application was based on r 502 as well as r 501 or that the trial judge should not limit his attention to r 501. Neither the written submissions prepared by Aon and handed up to the primary judge on 27 November 2006, nor the later written submissions which the primary judge gave leave to file after that day, are in the appeal books or the file of this Court. 183 The Australian National University v Chubb Insurance Company of Australia Ltd [2007] ACTSC 82 at [16]-[17]. There is a reference to r 507 at [1], but the topic is not returned to. 184 The senior counsel who appeared for ANU in this Court did not appear before the primary judge or the Court of Appeal. 185 (1997) 189 CLR 146; [1997] HCA 1. It follows that, so far as the materials before this Court indicate, the primary judge was correct to treat the application as being based only on r 501. Since r 501 could not apply, and since he himself did not identify any other possibly relevant source of power, he erred in not dismissing the application. What rule was relied on before the Court of Appeal? In the reasons for judgment of the Court of Appeal, the question whether leave to amend was correctly granted was approached only by reference to rr 21 and 501, not r 502. Rule 502 was not quoted or even mentioned. Assuming that this silence corresponded with a silence in the parties' argument, it follows that the Court of Appeal erred in failing simply to allow the appeal to it on the ground that the basis for the primary judge's grant of leave, r 501, did not apply. What rule was relied on in this Court? The same position initially prevailed in this Court. Although ANU's written submissions did make reference to r 502 and its possible interrelation with r 501, they posed the primary question as turning on r 501. Early in ANU's oral submissions in this Court it said: "As has been remarked in the reasons of the courts below, as has been remarked already in [argument] today, the terms of rules 501 [and] 502 may tolerably be regarded as 21st century equivalents with very little difference from the 19th century precursors which have been discussed." In actuality, r 502 had not been mentioned in oral argument, had not been mentioned in the judgments of either the Court of Appeal judges or the primary judge, and had been referred to only on one occasion in passing before the primary judge. ANU then attributed to the Court of Appeal, as it had in its written submissions, an attention to r 502 which did not exist. A little later ANU said: "it is possible that [r] 502 has nothing to do with a case of this kind". Certainly, in the courts below ANU does not appear to have submitted that it had anything to do with it. It would follow that, in view of its failure under r 501, the reliance which ANU now places on r 502 would require it to file a notice of contention. This it did not do. Exercise of r 502 discretion in this Court If the absence of a notice of contention were the only obstacle to ANU's success in this Court, it would be a very slight one. That is because eventually adequate attention was given in argument to the construction of r 502 and its interrelationship with r 501, and the notice of contention could have been filed late. The conclusion arrived at in the joint judgment means that this Court must exercise the discretion conferred by r 502 for itself – for the first time in these proceedings. It is not a question of setting aside an erroneous exercise of discretion under r 502 by the courts below, for they did not embark on that enterprise and were not invited to do so. The discretion conferred by r 502 should be exercised against ANU because of certain considerations pointed out in the joint judgment186. However, there is one matter to be added to those considerations. It will be remembered that among the reasons given by counsel for ANU for the amendment and the adjournment were: "the receipt by [ANU] of a number of affidavits from Chubb and CGU, in the period between 8 and 10 November, that is to say, late last week, and the receipt of two sets of further discovery documents from Chubb, late last week, relating to their underwriting processes". The affidavit sworn by ANU's solicitor in support of the adjournment application referred to two affidavits filed by Chubb and served on 8 and 10 November 2006, and also to further discovery of documents on Chubb on 7 and 10 November 2006. But nothing in these affidavits or documents was identified as pointing for the first time to any possible amendment, or as justifying any adjournment. There was nothing to indicate that whatever was seen as relevant had not been available earlier if diligence had been employed. That consideration, and some of those pointed out in the joint judgment, are subject to one qualification. It concerns the following paragraph of the affidavit sworn by ANU's solicitor: "At the conclusion of the mediation, Senior Counsel for ANU advised me that it would be necessary, and appropriate, in order to fully articulate the claims to be made against Aon, that leave of the Court be sought to file a second further amended statement of claim. ANU instructed me on 14 November 2006 to accept Senior Counsel's advice." It may be inferred that senior counsel for ANU had offered detailed justification for the advice to which the solicitor referred. It may also be inferred that the solicitor, in seeking instructions from ANU, had given detailed explanations as well. To the extent that the affidavit, by non-disclosure of that detail, was claiming privilege for it, it would not have been open at common law to draw 186 At [104]-[110] above. any inference from the claim187. The Evidence Act 1995 (Cth), which applies in the Australian Capital Territory, does not make it clear whether the common law position in that respect continues188. If for some reason the common law position does continue, it would not be open to infer from the absence of an explanation, so far as a possible explanation may have rested on legal advice, that no explanation which favoured ANU could be offered. In view of the fact that there was no argument about the possibility in law of doing so, it is undesirable to draw any inference from the failure to reveal the legal advice. Queensland v J L Holdings Pty Ltd In relation to Queensland v J L Holdings Pty Ltd189, it is sufficient to hold that, at least in jurisdictions having rules similar to rr 21 and 502, that case has ceased to be of authority. It is necessary to apply the Rules without any preconceptions derived from what was said in that case. There is a common opinion – it is far from universal, but it is common – within the judiciary and the legal profession that Queensland v J L Holdings Pty Ltd, whether it has been correctly understood or not, has had a damaging influence on the conduct of litigation. One judge who held that opinion was Bryson J. In a passage which merits preservation from the oblivion of unreported judgments, he pointed out one undesirable consequence of the way Queensland v J L Holdings Pty Ltd has been understood190: "In view of the state of the law governing allowance of amendments, amendment applications brought forward before the trial began were treated with uncomplaining supine liberality, notwithstanding that they sometimes showed that problems had been addressed years after they should have been. I do not think that the law requires the discretion to allow amendments to be exercised in entire innocence of understanding the obvious impact of forbearance and liberality on the behaviour of litigants, who have diminished incentive to do their thinking in due time and to tell the court and their opponents their full and true positions. When forbearance and liberality are extended to a delinquent the burden of inconvenience and lost opportunities for preparation tends to fall heavily and without adequate repair on parties who have not been delinquent. A relative disadvantage is imposed on those who proceed 187 Wentworth v Lloyd (1864) 10 HLC 589 at 590-592 [11 ER 1154 at 1154-1155]. 188 See Evidence Act 1995 (Cth), ss 117-126, and cf ss 20 and 89. 189 (1997) 189 CLR 146. 190 Maronis Holdings Ltd v Nippon Credit Australia Pty Ltd [2000] NSWSC 753 at methodically and in due time; their interest in procedural justice should claim at least as much consideration as the interests of the applicant for a late amendment who does not have to look far for the creator of his difficulty. It is even conceivable that a litigant might deliberately pursue a course which will impose disadvantage on an opponent who has to reconsider his ground and change course in the midst of a contest." Below the approach of ANU to the conduct of this litigation and the approach of the Supreme Court to its resolution will be described. Those approaches reflect a certain culture and mentality. If Queensland v J L Holdings Pty Ltd is a cause of that culture and mentality, the common opinion just referred to receives considerable support. Though Aon made some limited complaint in the course of argument about the approaches in question, there was no complaint about them in the grounds of appeal. But, lest silence be taken as approval of what happened, it is necessary to say the following. A place in the precedent books At times in its address to this Court, ANU seemed to suggest that the presentation and adjudication of the case in the courts below merited it securing a place in the precedent books. Did it? Events before the proceedings began. The fire damage to ANU's property took place on 18 January 2003. That damage was extensive. The interruption to ANU's normal activities must have been profound. Proceedings did not begin against the three insurers until 10 December 2004. Although some insured persons, and their advisers, consider that the best way to deal with recalcitrant insurers is to serve initiating process first and negotiate afterwards, this delay is not in itself enough to raise any criticism. On 2 April 2003, 24 October 2003 and 20 January 2004, Chubb informed ANU that it declined to meet ANU's claim against it in full. It may be assumed that the balance of the delay was accounted for by attempts to resolve the dispute without litigation. The character of the litigation commenced. The litigation thus commenced was commercial litigation. While in general it is now seen as desirable that most types of litigation be dealt with expeditiously, it is commonly seen as especially desirable for commercial litigation. Its claims to expedition may be less than those of proceedings involving, for example, extraordinary prejudice to children; or the abduction of children; or a risk that a party will lose livelihood, business or home, or otherwise suffer irreparable loss or extraordinary hardship, unless there is a speedy trial191. But commercial litigation does have 191 See the discussion of expedited appeals by Sir Thomas Bingham MR, Mann and Saville LJJ in Unilever plc v Chefaro Proprietaries Ltd [1995] 1 WLR 243 at 246-247; [1995] 1 All ER 587 at 591. significant claims to expedition. Those claims rest on the idea that a failure to resolve commercial disputes speedily is injurious to commerce, and hence injurious to the public interest. As Rogers J stated in Collins v Mead192: "For example, if banks are unable to collect overdue loans from borrowers speedily, if small traders can not recover monies owed to them speedily the commercial life of the [c]ommunity is detrimentally [a]ffected. The consequences of delay in the hearing of a commercial dispute … will impact not just on the two or three persons or companies who are the immediate parties, but may have an effect on the creditors of the business, on employees, and perhaps on other traders unrelated to the immediate dispute." Commercial life depends on the timely and just payment of money. Prosperity depends on the velocity of its circulation. Those who claim to be entitled to money should know, as soon as possible, whether they will be paid. Those against whom the entitlement is asserted should know, as soon as possible, whether they will have to pay. In each case that is because it is important that both the claimants and those resisting claims are able to order their affairs. How they order their affairs affects how their creditors, their debtors, their suppliers, their customers, their employees, and, in the case of companies, their actual and potential shareholders, order their affairs. The courts are thus an important aspect of the institutional framework of commerce. The efficiency or inefficiency of the courts has a bearing on the health or sickness of commerce. In the present proceedings, it was vital for ANU to know how much of its loss would be recovered. It was vital for ANU to know how soon it would be recovered. It was vital because the question of how fully its pre-fire activities could be resumed turned on those points. It was vital for the insurers to know how much of their net worth would have to be paid to ANU. It was vital because the question would have affected the setting of premiums, the making of investment decisions, the reputation of the insurers for credit worthiness, and, at least potentially, their survival. Similar but not identical considerations doubtless arose for Aon once it was joined as fourth defendant. Events before the trial date was fixed. On 6 June 2005, ANU joined Aon as fourth defendant to an amended statement of claim. That document alleged that Aon had failed to procure insurance for the buildings in the PNI Schedule. On 19 September 2005, ANU filed a further amended statement of claim. However, it made no new claim against Aon. On 12 April 2006, the Supreme 192 Unreported, Supreme Court of New South Wales, 7 March 1990. Court of the Australian Capital Territory fixed the trial of the proceedings for four weeks commencing on 13 November 2006. ANU's concern about delay. On 17 July 2006, ANU filed written submissions opposing a motion by Chubb and CGU seeking a separate determination of liability and quantum. In those written submissions, ANU rightly complained about the lateness of the application given the lengthy period during which the proceedings had already been on foot. The events of 15 November 2006. It was against the background of those circumstances that ANU announced on 15 November 2006, the third day of the period of four weeks set down for the trial, that it wished to apply for an adjournment in order to amend its further amended statement of claim against Aon. It might be thought that that was a surprising announcement. The sum of money which ANU had obtained or was to obtain from the proceedings was quite large – the total of what it had been paid earlier, and what it was to be paid under the settlements. But its outstanding claim against Aon was much larger – approximately $75 million. It had secured from a busy court a lengthy period in which to have its claims tried. Leaving aside any objections which Aon might have had to the amendments, it would seem to have been in ANU's interest to draft whatever amendments it wanted to make as quickly as possible and use the time set aside for claims against the four defendants to have tried its claims against the remaining one193. However, it is not possible to arrive at an assessment of the thinking underlying ANU's announcement. Indeed, it is irrelevant to do so. The tactics of barristers and their clients are influenced by the goals they are trying to achieve, and are moulded by pressures to which they are subject. Courts often have no more than an incomplete understanding of those goals and pressures. 193 On 15 November 2006 counsel for Aon contended that ANU had not complied with the court's orders to prepare and file an agreed bundle of documents, a chronology and an opening. He continued: "Now, that leads, critically, to the assessment that this plaintiff was never intending to run this case against us if it couldn't settle with us, and we made it clear at the mediation what our position was. Now, your Honour, it's transparent, in our submission, that the plaintiff is now seeking to avoid starting the case against us, seeking to avoid having to run a case on the basis that it pleaded, and on the basis that it was prepared to go to trial." The primary judge did not deal with this question in his reasons for his decision to allow the amendment. But if barristers propose, it is courts which must dispose. Whether or not ANU's announcement was surprising, the primary judge's reaction to ANU's application certainly was. Applications to adjourn trials and related applications for amendments to pleadings are usually decided with extreme speed. At the time when those applications are made, the parties are very familiar with the proceedings in their unamended form; the judge often is; and at least the moving party is familiar with the amended case it wishes to advance. It is not usual to permit a month of court time set aside for a trial to be taken up with interlocutory steps conducted in a leisurely fashion. Yet, by degrees, this is what happened. ANU did not complain that the recently served affidavits, the recently provided discovery, the information it had learned during the mediation or the fact and terms of the settlements made it necessary that there be an adjournment with a view to assessing the significance of what had been learned and formulating a new theory of the case before attention could be given to drafting amended pleadings. ANU's statements to the primary judge on 15 November 2006 indicate that although it had taken counsel "some days and weeks to come to understand it", it had a good understanding of its new theory of the case. All that was lacking was its expression in the form of pleadings194. ANU informed the judge that it had not been able to prepare the amendments between the end of the mediation on 14 November 2006 and the start of the hearing on 15 November 2006. It also said that it did not "want to rush it". And it appealed to the adage "More haste less speed", though neither the parties nor the primary judge professed to understand its meaning. In response, the primary judge gave ANU seven days within which to file and serve the amended pleading and the evidence relied on (ie by 22 November 2006), gave Aon two further days to file evidence in reply, and listed the amendment application for hearing on 27 November 2006. The position as at 15 November 2006 reviewed. Pausing at this point, it is convenient to identify a school of thought hostile to the assumptions underlying ANU's tactics and the primary judge's response to them. Adherents to that school of thought would think that a party in the position of ANU was under an obligation to burn the midnight oil, to move with a degree of haste, and even to "rush it". After all, ANU was represented by senior counsel who had delivered a well prepared, lucid and detailed address in order to secure the adjournment from 194 Reference was made to the need to obtain, file and serve further evidence, and to the need for a change of senior counsel in view of the fact that existing senior counsel had advised ANU on the reasonableness of the settlements. Those factors played no significant role in the arguments in this Court criticising or defending the courts below, and may be put to one side. The needs in question would not have arisen if the amendments were disallowed, and might not have arisen if the amendments were allowed and Aon's amended defence made relevant admissions. 15 November to 27 November 2006. It was represented also by two junior counsel and a substantial firm of solicitors. It employed at least one solicitor of its own in-house. It was seeking to recover $75 million in a commercial cause which it had chosen to institute in a busy court which had 18 days left of the time fixed for the trial. The amendments should have been ready by the morning of 15 November 2006, or at least it should have been possible to provide them within a few hours thereafter. The course adopted by the primary judge had the effect of giving a party seeking to adjourn a four week hearing half of what it wanted before any opportunity to investigate the merits of that course had been afforded. Correspondingly, it took away from the other party, which resisted the adjournment and the amendment, any opportunity to oppose granting the first half of the adjournment which ANU desired. At the time when the primary judge adopted the course he did, it remained an open question whether the amendments would be allowed. If they were allowed, perhaps a vacation of all the hearing dates would be called for. If a speedy decision were made not to allow them, there was no impediment to the trial proceeding on the existing pleadings within the four weeks fixed. The course adopted by the primary judge – granting the first half of the adjournment which ANU desired – did create a potential impediment. The other half of what ANU wanted was also granted before an opportunity to assess its desirability had been fully afforded. This came to pass by reason of the following events. The events of 27 November 2006. On 27 November 2006 ANU made its application. It was styled as an application for amendment of the pleadings. But ANU did not resile from the assertions made on 15 November 2006 that adjournment of the proceedings, too, was necessary on the grounds then assigned. Aon so treated the application. By lunchtime both the evidence and ANU's two addresses had been completed. Aon's counsel then addressed in the course of the afternoon, partly by reference to written submissions which were handed up shortly before the luncheon adjournment. When that address ended, counsel for ANU informed the court that he would not be able to finish his reply before the normal time for adjournment. He said that Aon's written submissions contained 18 authorities, that he had not read them, and that he needed time to do so if he were to be in a position to assist the court. Counsel for ANU asked for leave to file written submissions in reply to Aon's by 30 November 2006. In response the primary judge gave leave to do so by 1 December 2006. He then gave leave to Aon to file further written submissions by 8 December 2006. In that fashion, the whole of the four weeks set aside for the trial vanished. The events of 27 November 2006 reviewed. Pausing again, it is necessary to notice that adherents to the school of thought identified earlier would be fundamentally hostile to the assumptions underlying the primary judge's directions. Adherents to that school of thought would maintain that in circumstances where the primary judge had not, before 27 November 2006, made any order vacating the trial dates for the four week trial, there was no reason why ANU should not have presented its reply the following day. Neither the transcript for 27 November 2006 nor any evidence before this Court suggests that either the primary judge or the legal representatives of the parties were unable to be present on 28 November 2006 to complete the argument. Nor is there any material explaining why the primary judge was not in a position to deliver judgment immediately on the termination of the argument, particularly since, if argument had proceeded, as it should have, on 28 November 2006, he would have had the advantage of the overnight adjournment to consider the matter. Decisions about amendments and adjournments are pre-eminently interlocutory decisions on matters of practice and procedure. Particularly in relatively urgent matters like commercial cases involving claims for large sums of money, where an expeditious resolution of the issues is desirable for the reasons already noted195, decisions about amendments and adjournments must be made speedily. As counsel for Aon pointed out just after the primary judge completed the making of directions which terminated on the last day of the four week trial period, if ANU's application failed, the trial should proceed. He said: "we would really like to know where we stand". The primary judge said the matter "is now to be determined ultimately after 8 December". Indeed it was – more than ten months after 8 December, namely on 12 October 2007. The primary judge's delay in giving judgment. There may be some good explanation for the primary judge's delay in giving judgment. However, the materials before this Court do not indicate, and the parties did not suggest, any good explanation. Unless there is some good explanation for that delay which has not been revealed to this Court, it is deplorable. Authority both in England and in intermediate appellate courts in this country would correctly regard ten months as an excessive period of reservation, even for the most complex of trials or appeals196. In relation to a fairly routine procedural application, even assuming a short period of reservation were justifiable, the delay in giving judgment in this case is alien to every axiom of modern litigation. It is particularly inappropriate in commercial litigation. For what is the point of expediting interlocutory steps and fixing early trial hearings if judgments, 195 See above [137]. 196 See Friend v Brooker (2009) 83 ALJR 724 at 746 [113], n 110; 255 ALR 601 at 628; [2009] HCA 21. particularly interlocutory judgments, are not "relatively speedy"197? In 1954, in a joint judgment, Jenkins LJ, Hodson LJ and Vaisey J said: "[f]ew judgments are reserved"198. That is no longer true. It is understandable why the position has changed. But the reasons why courts reserve more often are not considerations justifying lengthy periods of reservation. Aon rightly submitted that the judgment was "infected by heavy delay". Aon also rightly suggested that the delay led to some of its deficiencies – failure to refer to the affidavit evidence or the cross-examination of ANU's solicitor, failure to appreciate the gulf between what counsel for ANU said were the reasons for the amendment and what the evidence on the point was, and failure to identify what factors, if any, there were which explained ANU's failure to appreciate and raise the new claims earlier. It is also true to say that all the procedural directions made on 15 November 2006 and 27 November 2006 were alien to the axioms underlying modern litigation. Contrary to the precepts of r 21, those directions did not "facilitate the just resolution of the real issues in civil proceedings with minimum delay and expense". Nor did they achieve "the timely disposal of the proceedings". And they did not achieve "the timely disposal of … all other proceedings in the court". That is because the failure of the primary judge to resolve the applications described on 15 November 2006 speedily meant that the dates for trial of the ANU-Aon proceedings were lost, that those proceedings would have to be heard at a future date, and that any future hearing would prevent some other set or sets of proceedings in the court being heard at the time at which they should have been heard. Further, it cannot be said that ANU complied with its obligation under r 21(3) to "help the court to achieve the objectives" set out in r 21(2). The Court of Appeal's delay in giving judgment. Although the hearing of the appeal took place on 27 and 28 February 2008, judgment was not delivered until 25 August 2008. That is a delay of nearly six months. No explanation for that delay, either, appears in the papers or was offered by the parties. Conclusion. The presentation and adjudication of the case in the courts below do cause it to merit a place in the precedent books. The reasons for placing it there turn on the numerous examples it affords of how litigation should not be conducted or dealt with. The proceedings reveal a strange alliance. A party which has a duty to assist the court in achieving certain objectives fails to 197 Rexam Australia Pty Ltd v Optimum Metallising Pty Ltd [2002] NSWSC 916 at 198 In re Harrison's Share under a Settlement [1955] 1 Ch 260 at 276. do so. A court which has a duty to achieve those objectives does not achieve them. The torpid languor of one hand washes the drowsy procrastination of the other. Are these phenomena indications of something chronic in the modern state of litigation? Or are they merely acute and atypical breakdowns in an otherwise functional system? Are they signs of a trend, or do they reveal only an anomaly? One hopes for one set of answers. One fears that, in reality, there must be another. Orders The orders set out in the joint judgment should be made.

HIGH COURT OF AUSTRALIA UNIONS NSW & ORS PLAINTIFFS AND STATE OF NEW SOUTH WALES DEFENDANT Unions NSW v New South Wales [2013] HCA 58 18 December 2013 ORDER The questions asked by the parties in the Special Case dated 12 August 2013, as amended, be answered as follows: Question 1 Is s 96D of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid because it impermissibly burdens the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution? Answer Yes. Question 2 Is s 95G(6) of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid because it impermissibly burdens the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution? Answer Yes. Question 3 Do ss 7A and 7B of the Constitution Act 1902 (NSW) give rise to an entrenched protection of freedom of communication on New South Wales State government and political matters? Answer Unnecessary to answer. Question 4 If so, is s 96D of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid because it impermissibly burdens that freedom, contrary to the New South Wales Constitution? Answer Unnecessary to answer. Question 5 Further, if the answer to question 3 is "yes", is s 95G(6) of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid because it impermissibly burdens that freedom, contrary to the New South Wales Constitution? Answer Unnecessary to answer. Question 6 Is s 96D of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid under s 109 of the Commonwealth Constitution by reason of it being inconsistent with s 327 of the Commonwealth Electoral Act 1918 (Cth)? Answer Unnecessary to answer. Question 7 Is s 96D of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid under s 109 of the Commonwealth Constitution by reason of it being inconsistent with Pt XX of the Commonwealth Electoral Act 1918 (Cth)? Answer Unnecessary to answer. Question 8 Is s 96D of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid because it impermissibly burdens a freedom of association provided for in the Commonwealth Constitution? Answer Unnecessary to answer. Question 9 Who should pay the costs of the special case? Answer The defendant should pay the plaintiffs' costs. Representation B W Walker SC with N J Owens for the plaintiffs (instructed by Holding Redlich Lawyers) M G Sexton SC, Solicitor-General for the State of New South Wales and J K Kirk SC with A M Mitchelmore for the defendant (instructed by Crown Solicitor (NSW)) Interveners N J Williams SC with C L Lenehan for the Attorney-General of the Commonwealth, (instructed by Australian Government Solicitor) intervening W Sofronoff QC, Solicitor-General of the State of Queensland with G J D del Villar for the Attorney-General of the State of Queensland, intervening (instructed by Crown Law Qld) S G E McLeish SC, Solicitor-General for the State of Victoria with A D Pound for the Attorney-General for the State of Victoria, intervening (instructed by Victorian Government Solicitor) G R Donaldson SC, Solicitor-General for the State of Western Australia with C S Bydder for the Attorney-General for the State of Western Australia, intervening (instructed by State Solicitor (WA)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Unions NSW v New South Wales Constitutional law – Implied freedom of communication on governmental and political matters – Section 96D of Election Funding, Expenditure and Disclosures Act 1981 (NSW) ("EFED Act") prohibits political donations unless made by individual enrolled on roll of electors – Section 95G(6) of EFED Act aggregates expenditure by political party and affiliated organisations for purposes of cap on electoral communication expenditure – Whether political communication at State level can effectively burden federal implied freedom of communication – Whether ss 96D and 95G(6) effectively burden implied freedom of communication – Whether ss 96D and 95G(6) connected to legitimate end. Words and phrases – "implied freedom of communication on governmental and political matters", "legitimate end". Constitution, ss 7, 24, 96, 128. Election Funding, Expenditure and Disclosures Act 1981 (NSW), Pt 5, Div 2, Pt 6, ss 83, 95G(6), 96D. Election Funding, Expenditure and Disclosures Regulation 2009 (NSW), cl 34A. FRENCH CJ, HAYNE, CRENNAN, KIEFEL AND BELL JJ. Division 2 of Pt 6 of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) ("the EFED Act") requires the annual disclosure to the Election Funding Authority of New South Wales ("the Authority") of all political donations received and all electoral expenditure incurred by or on behalf of a party, an elected member, a group or a candidate1. A "party" is defined as a body or organisation having as one of its objects or activities the promotion of the election to State Parliament or a local council of a candidate endorsed by it2. A third-party campaigner3 is required to disclose political donations received and certain expenditure4. Political donations of $1,000 or more must be disclosed if made by a major political donor5. A "political donation" is essentially any gift made to or for the benefit of a party, elected member, candidate or group or to a third-party campaigner6. "Gift" is defined widely and includes annual or other subscriptions made to a party by a member, or by a person or entity (including an industrial organisation) for affiliation with the party, and amounts paid by way of fund raising7. Political donations are subject to general caps provided for in Div 2A of Pt 6. The cap for political donations to a registered party or a group in a financial year is $5,000 and to an unregistered party, an elected member, a candidate or a third-party campaigner is $2,0008. It is subject to indexation9. There is a general 1 Election Funding, Expenditure and Disclosures Act 1981 (NSW), s 88(1). 2 Election Funding, Expenditure and Disclosures Act 1981, s 4(1). 3 Defined to mean persons – other than parties, elected members, groups or candidates – who incur electoral communication expenditure exceeding $2,000: Election Funding, Expenditure and Disclosures Act 1981, s 4(1). 4 Election Funding, Expenditure and Disclosures Act 1981, s 88(1A). 5 Election Funding, Expenditure and Disclosures Act 1981, s 88(2); "major political donor" is defined in s 84(1). 6 Election Funding, Expenditure and Disclosures Act 1981, s 85. 7 Election Funding, Expenditure and Disclosures Act 1981, ss 84(1), 85(2), 85(3). 8 Election Funding, Expenditure and Disclosures Act 1981, s 95A(1). 9 Election Funding, Expenditure and Disclosures Act 1981, s 95A(5). Hayne Crennan Bell prohibition on the acceptance of political donations that exceed the applicable cap10. and distribution of Division 2B of Pt 6 provides for caps on electoral communication expenditure for State election campaigns. "Electoral expenditure" is expenditure for or in connection with promoting or opposing a party or candidate or for the purpose of influencing voting at an election11. "Electoral communication expenditure" more specifically includes expenditure on advertisements, the production and telecommunications12. It is not necessary to detail how caps are applied to electoral communication expenditure. An example will suffice. The applicable cap for a party that endorses candidates in a general election to the Legislative Assembly of New South Wales is $111,200 multiplied by the number of electoral districts in which a candidate is endorsed13. It is unlawful for a party, group, candidate or incur electoral communication expenditure for a State election campaign during a capped expenditure period14 if it exceeds the applicable cap15. third-party campaigner election material, internet the The EFED Act makes provision in Pt 5 for public funding of State election campaigns from an Election Campaigns Fund. It provides for funding of specified percentages of the total actual electoral communication expenditure incurred by a party or candidate within ranges of the applicable expenditure cap. Again, it is not necessary to detail these provisions. 10 Election Funding, Expenditure and Disclosures Act 1981, s 95B(1). 11 Election Funding, Expenditure and Disclosures Act 1981, s 87(1). 12 Election Funding, Expenditure and Disclosures Act 1981, s 87(2). 13 Election Funding, Expenditure and Disclosures Act 1981, s 95F(2); Election Funding, Expenditure and Disclosures (Adjustable Amounts) Notice (NSW), Sched 1, cl 2(1). 14 Defined to mean, for Legislative Assembly elections, the period from and including 1 October in the year before which the election is to be held (and in any other case the period from and including the day the writs for the election are issued) to the end of polling day for the election: Election Funding, Expenditure and Disclosures Act 1981, s 95H. 15 Election Funding, Expenditure and Disclosures Act 1981, s 95I(1). Hayne Crennan Bell The Authority is required16 to publish, on a website maintained by it, disclosures of reportable political donations17 and electoral expenditure together with any other information it considers relevant. Copies of disclosures are to be maintained for a period of years and are to be available for public inspection18. The general scheme of Pt 6, clearly enough, is to regulate the making of political donations to parties, candidates, elected members and others in New South Wales by limiting the amount or value of what may be given to them by any one person, organisation or other entity. It does not permit large individual donations. There is an obvious connection between the need to fund advertising and other methods of communication in connection with election campaigns, and political donations. Part 6 therefore also seeks to limit the amount which may be spent on such communication in the period leading up to an election. To offset, to an extent, the limit on funds available to parties and others, Pt 5 provides some public funding for the purposes of election campaigns. Additionally, the EFED Act enables the public as well as the Authority to scrutinise the donations and their sources and the electoral communication expenditure that is made. The general purpose of these provisions is not in dispute. In its defence, the defendant describes that purpose as being to secure and promote the actual and perceived integrity of the Parliament of New South Wales, the government of New South Wales and local government bodies within New South Wales. More specifically, it identifies the potential risk to integrity as arising from the exercise of undue, corrupt or hidden influences over those institutions, their members or their processes. Donations are identified as a method of exercising such influence. The risks to integrity are significantly increased, the defendant further explains, where there is a need to raise large amounts of money in order effectively to compete with rivals in connection with election campaigns. 16 Election Funding, Expenditure and Disclosures Act 1981, s 95(1). 17 Defined as a political donation of $1,000 or more: Election Funding, Expenditure and Disclosures Act 1981, s 86(1). 18 Election Funding, Expenditure and Disclosures Act 1981, s 95(4). Hayne Crennan Bell The provisions in question – the issues Provisions of these kinds are not limited to New South Wales. They have counterparts in legislation of the other States and Territories19. The plaintiffs accept that the EFED Act seeks to address the problems identified and that its general objects are legitimate. The plaintiffs do not, however, accept that those purposes are furthered by the two provisions in issue in these proceedings. These two provisions were inserted by the Election Funding, Expenditure and Disclosures Amendment Act 2012 (NSW) and commenced in March 2012. The first is s 96D, which appears in Div 4 of Pt 6. Sub-section (1) of s 96D provides: "It is unlawful for a political donation to a party, elected member, group, candidate or third-party campaigner to be accepted unless the donor is an individual who is enrolled on the roll of electors for State elections, the roll of electors for federal elections or the roll of electors for local government elections." It will be recalled that the only restriction placed upon the making of political donations by the other provisions of the EFED Act is the cap on the amount that can be paid by any person, organisation or other entity in a financial year. Section 96D effectively denies the making of a political donation by anyone other than an elector by prohibiting acceptance of a donation from any source other than an elector. It therefore prohibits a donation being made by any individual who is not qualified to vote or who is qualified but not enrolled to vote, and any corporation, organisation or other entity. The following three sub-sections in s 96D create offences where an individual, corporation or other entity seeks to evade the effects of s 96D(1). The other provision which the plaintiffs seek to impugn is s 95G(6), which effectively aggregates the amount spent by way of electoral communication expenditure by a party and its affiliates for the purposes of the capping provisions: "Electoral communication expenditure incurred by a party that is of or less than the amount specified … for the party … is to be treated as 19 See, for example, Electoral Act 2002 (Vic), Pt 12; Electoral Act 1992 (Q), Pt 11; Electoral Act 1907 (WA), Pt VI; Electoral Act (NT), Pt 10; Electoral Act 1992 (ACT), Pt 14. Hayne Crennan Bell expenditure that exceeds the applicable cap if that expenditure and any other electoral communication expenditure by an affiliated organisation of that party exceed the applicable cap so specified for the party." An "affiliated organisation" of a party is defined, by s 95G(7), to mean a body or other organisation: "that is authorised under the rules of that party to appoint delegates to the governing body of that party or to participate in pre-selection of candidates for that party (or both)." Each of the second, third and sixth plaintiffs is authorised to appoint delegates to the annual conference of the Australian Labor Party (NSW Branch) and to participate in the preselection of that party's candidates for State elections. Each of the plaintiffs intends to make donations to the Australian Labor Party, the Australian Labor Party (NSW Branch), other political parties or the first plaintiff and to incur electoral communication expenditure within the meaning of the EFED Act to the extent permitted by law. Section 83 of the EFED Act, which appears at the commencement of Pt 6, provides that the Part applies only in relation to State and local government elections and elected members of Parliament or councils. Other provisions more directly seek to address the potential effect of the EFED Act with respect to federal election campaigns. Section 95B(2) provides for an exception to the general prohibition, in s 95B(1), on a person accepting a political donation which exceeds the applicable cap on political donations. The exception arises where the political donation is to be paid into, or held as an asset of, an account kept exclusively for the purpose of a federal or local government election campaign. Clause 34A of the Election Funding, Expenditure and Disclosures Regulation 2009 (NSW) ("the Regulations"), which was introduced by an amendment shortly prior to the hearing of this matter20, extends the exemption to all political donations which are paid or made for the purpose of a federal election campaign. These exceptions draw attention to the essential premise of the plaintiffs' case. It is that ss 96D and 95G(6) impermissibly burden the freedom of communication on political or governmental matters (referred to as "political communication" in these reasons) which is implied in the Commonwealth 20 Election Funding, Expenditure and Disclosures Amendment (Political Donations) Regulation 2013 (NSW). Hayne Crennan Bell Constitution. Further questions are stated for the opinion of this Court and concern whether a similar freedom can be found in the Constitution Act 1902 (NSW) and whether s 96D is inconsistent with Commonwealth legislation respecting election funding. These questions may be put to one side for present purposes. The freedom of communication – applicable in a State context? In Australian Capital Television Pty Ltd v The Commonwealth21 ("ACTV"), it was said that the concept of representative government in a democracy signifies government by the people through their representatives: in constitutional terms, a sovereign power residing in the people, exercised by the representatives. Lange v Australian Broadcasting Corporation22 confirmed that the implied freedom of political communication is an indispensable incident of that system of representative government for which the Constitution provides. The Constitution does so by directing that the members of the two Houses of Parliament shall be directly chosen by the people of the Commonwealth and States. Sections 7 and 24 and related sections of the Constitution are therefore to be seen as protecting the freedom of political communication in order that people are able to exercise a free and informed choice as electors 23. In Lange, it was also said24 that the freedom of political communication is limited to what is necessary for the effective operation of the system of representative and responsible government provided for by the Constitution. The defendant seized upon this statement as indicating that the freedom might not apply to restrictions on political communication arising in the course of a State election. The defendant submitted that communication on matters of this kind occurring in that context might not illuminate or affect the choice to be made by electors at federal elections or the opinions they may form as to governance at the federal level. The statement drawn from the reasons in Lange must also be understood in context. The Court was there explaining that the freedom is not absolute, a 21 (1992) 177 CLR 106 at 137-138; [1992] HCA 45. 22 (1997) 189 CLR 520; [1997] HCA 25. 23 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 560. 24 (1997) 189 CLR 520 at 561. Hayne Crennan Bell point which had been made in other judgments upon which the defendant relies. In APLA Ltd v Legal Services Commissioner (NSW)25, Gleeson CJ and Heydon J observed that the freedom was not a general freedom of communication of the kind protected by the United States Constitution. The point sought to be made in Lange and in APLA26 was that legislation which restricts the freedom is not invalid on that account alone. It will be invalid where it so burdens the freedom that it may be taken to affect the system of government for which the Constitution provides and which depends for its existence upon the freedom. Lange confirmed that if certain conditions concerning the operation and effect of the legislation or the freedom are met, legislation which restricts the freedom may nevertheless be valid. That contextual correction having been made, it remains necessary to consider the defendant's contention. The defendant concedes, as well it might, that there may be an overlap in the discussion of political and governmental matters at a State and federal level and that it may be difficult to separate those kinds of issues. In Hogan v Hinch27, it was also argued that the freedom of political communication is limited to communication at the Commonwealth level. French CJ noted28 that this may appear, logically, to be a consequence of the source of the freedom, the Commonwealth Constitution, but that it is not of great practical assistance. The reality is that there is significant interaction between the different levels of government in Australia and this is reflected in communication between the people about them. That political communication at a State level may have a federal dimension may be seen from provisions of the Commonwealth Constitution itself. Section 96, which provides for funding by the Commonwealth to the States, is perhaps the most obvious example29. Issues about whether the federal 25 (2005) 224 CLR 322 at 350 [27]; [2005] HCA 44. 26 See also Mulholland v Australian Electoral Commission (2004) 220 CLR 181 at 244-245 [179] per Gummow and Hayne JJ; [2004] HCA 41; Monis v The Queen (2013) 87 ALJR 340 at 367 [103], 394 [267]; 295 ALR 259 at 289, 327; [2013] HCA 4. 27 (2011) 243 CLR 506; [2011] HCA 4. 28 Hogan v Hinch (2011) 243 CLR 506 at 543 [48]. 29 Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 75; [1992] HCA 46; Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 (Footnote continues on next page) Hayne Crennan Bell government should fund areas of State responsibility such as education and health abound and are often agitated at both State and federal levels. The use of co-operative executive30 and legislative arrangements, including through the Council of Australian Governments and Ministerial Councils, makes it difficult to identify subjects not capable of discussion as matters which do or could potentially concern a federal governmental or political matter31. Social, economic and political matters in Australia are increasingly integrated32. In Coleman v Power33, it was recognised that the conduct of State police officers might have national repercussions. McHugh J observed34 that because of the integration of federal and State criminal law, the manner in which State police officers enforce those laws may influence the evaluation by the public of the performance of federal Ministers. Gummow and Hayne JJ35 said that because of the necessarily close co-operation between federal and State forces, "there is evident strength in the proposition that an allegation that a State police officer is corrupt might concern a government or political matter that affects the people of Australia"36. In Australia, there are also national political parties which operate across the federal divide and at federal, State, Territory and local government levels. at 216-217; Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 30 Coleman v Power (2004) 220 CLR 1 at 78 [197]; [2004] HCA 39; Wotton v Queensland (2012) 246 CLR 1 at 15 [27]; [2012] HCA 2. 31 Hogan v Hinch (2011) 243 CLR 506 at 543 [48]. 32 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 571-572; Wotton v Queensland (2012) 246 CLR 1 at 15 [26]. 33 (2004) 220 CLR 1. 34 Coleman v Power (2004) 220 CLR 1 at 45 [80]. 35 Coleman v Power (2004) 220 CLR 1 at 78 [197]. 36 See also Coleman v Power (2004) 220 CLR 1 at 88-89 [229] per Kirby J. Hayne Crennan Bell They must deal with issues at various levels and, where necessary, co-ordinate responses. The presentation of policy or governmental action to the public at one level may be influenced by the ramifications for its acceptance at another. And, as the plaintiffs point out, support for a party at State level may influence a person's support for it more widely and at the federal level37. The complex interrelationship between levels of government, issues common to State and federal government and the levels at which political parties operate necessitate that a wide view be taken of the operation of the freedom of political communication. As was observed in Lange38, these factors render inevitable the conclusion that the discussion of matters at a State, Territory or local level might bear upon the choice that the people have to make in federal elections and in voting to amend the Constitution, and upon their evaluation of the performance of federal Ministers and departments39. In Roberts v Bass40, it was recognised that "statements made by electors or candidates or those working for a candidate, during an election, to electors in a State electorate, concerning the record and suitability of a candidate for election to a State Parliament … are at the heart of the freedom of communication protected by the Constitution."41 These matters explain the broad concluding statement in Lange42: "This Court should now declare that each member of the Australian community has an interest in disseminating and receiving information, opinions and arguments concerning government and political matters that affect the people of Australia." 37 See also Twomey, "The Application of the Implied Freedom of Political Communication to State Electoral Funding Laws", (2012) 35 University of New South Wales Law Journal 625 at 629. 38 (1997) 189 CLR 520 at 571-572. 39 See also Levy v Victoria (1997) 189 CLR 579 at 643-644; [1997] HCA 31. 40 (2002) 212 CLR 1 at 29 [73] per Gaudron, McHugh and Gummow JJ; [2002] HCA 41 See also Roberts v Bass (2002) 212 CLR 1 at 58 [159] per Kirby J. 42 (1997) 189 CLR 520 at 571. Hayne Crennan Bell The freedom – sources of communication The statement in Lange set out above not only recognises that, generally speaking, political communication cannot be compartmentalised to either that respecting State or that respecting federal issues. It also implies that a free flow of communication between all interested persons is necessary to the maintenance of representative government. In ACTV, Brennan J43 spoke of the need for there to be a free flow of political communication in order that electors can form judgments. Mason CJ observed44 that freedom of communication could not be understood as confined to communications between electors and elected representatives, candidates or parties. It cannot be so confined because the efficacy of representative government depends upon free communication between all persons and groups in the community. An elector's judgment on many issues will turn upon free public discussion, often in the media, of the views of all those interested. In a passage from Archibald Cox's text45, to which Mason CJ referred in ACTV46, it was said that: "Only by uninhibited publication can the flow of information be secured and the people informed … Only by freedom of speech … and of association can people build and assert political power". Likewise, in Buckley v Valeo47 the United States Supreme Court spoke of the need to ensure the "unfettered interchange of ideas for the bringing about of political and social changes desired by the people." 43 Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 44 Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 45 The Court and the Constitution, (1987) at 212. 46 (1992) 177 CLR 106 at 138. 47 424 US 1 at 14, 49 (1976), citing Roth v United States 354 US 476 at 484 (1957). Hayne Crennan Bell Political communication may be undertaken legitimately to influence others to a political viewpoint. It is not simply a two-way affair between electors and government or candidates. There are many in the community who are not electors but who are governed and are affected by decisions of government. Whilst not suggesting that the freedom of political communication is a personal right or freedom, which it is not48, it may be acknowledged that such persons and entities have a legitimate interest in governmental action and the direction of policy. The point to be made is that they, as well as electors, may seek to influence the ultimate choice of the people as to who should govern. They may do so directly or indirectly through the support of a party or a candidate who they consider best represents or expresses their viewpoint. In turn, political parties and candidates may seek to influence such persons or entities because it is understood that they will in turn contribute to the discourse about matters of politics and government. The freedom and State electoral laws the Australian constitutional context, the freedom of political communication operates as a restraint upon the exercise of legislative power by the Commonwealth and the States. The defendant submits that the constitutional context in which the freedom arises includes the constitutional premise, emerging from ss 106 and 107 and recognised by the principle in the Melbourne Corporation case49, that the States are to continue as independent polities with their own constitutions and their own legislative functions. It follows, the defendant submits, that the freedom should not impair a State's capacity to exercise its constitutional functions: the process for elections dictated by State legislation should be regarded as unaffected by the freedom. That is to say, the defendant submits that the freedom does not operate in respect of the EFED Act. The Solicitor-General for Victoria, intervening in support of the defendant, saw the matter somewhat differently – as involving a tension or "clash" between the freedom implied from the Constitution and the Melbourne Corporation principle, which is also drawn from it. In his submission, the 48 See below at [36]. 49 Melbourne Corporation v The Commonwealth (1947) 74 CLR 31 at 82; [1947] HCA 26: "The foundation of the Constitution is the conception of a central government and a number of State governments separately organized. The Constitution predicates their continued existence as independent entities." Hayne Crennan Bell Melbourne Corporation principle operates to protect the ability of the States to make their own laws regarding the functioning of political parties in the State, including laws bearing upon the discussion of political matters relevant to electors. It is necessary, in order to resolve the clash between the freedom and the principle, that a test different from that stated in Lange be applied to the EFED Act. Each of the defendant and Victoria relied for support for their arguments on what was said by Gaudron J in Muldowney v South Australia50. Her Honour proposed that: "the freedom which inheres in the Australian Constitution and which extends to matters within the province of the States does not operate to strike down a law which curtails freedom of communication in those limited circumstances where that curtailment is reasonably capable of being viewed as appropriate and adapted to furthering or enhancing the democratic processes of the States." (footnote omitted) In Victoria's submission, the test that a State law be "reasonably capable of being viewed as appropriate and adapted" allows a greater latitude to the State in the enactment of its electoral laws. Pressed, Victoria suggested that this might entail the recognition by the Court of some discretion in the State legislature. Neither the approach suggested by Gaudron J to the characterisation of a State law51 nor the allowance of what is sometimes called the grant to the legislature of a margin of appreciation52 has been accepted by a majority of this Court53. The latter is a large question and has not been seriously debated since the decision in Lange. In any event, there is a more fundamental difficulty with the argument which draws upon the Melbourne Corporation principle in an 50 (1996) 186 CLR 352 at 376; [1996] HCA 52. 51 See also Cunliffe v The Commonwealth (1994) 182 CLR 272 at 339, 388; [1994] HCA 44; Langer v The Commonwealth (1996) 186 CLR 302 at 318, 334; [1996] HCA 43. 52 Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 158-159; Cunliffe v The Commonwealth (1994) 182 CLR 272 at 325. 53 Levy v Victoria (1997) 189 CLR 579 at 598; Coleman v Power (2004) 220 CLR 1 Hayne Crennan Bell endeavour to quarantine State legislation from the operation of the freedom. There is no constitutional principle which accepts that the States can legislate to affect the Commonwealth Constitution, including its implications. What was proposed by Gaudron J in the passage in Muldowney referred to above was immediately qualified by the words, "[a]t least that is so if it does not interfere with the democratic processes of the Commonwealth." And, as Victoria accepted, if the provisions of the EFED Act in question are considered to have a wider effect upon political discussion generally, then the Melbourne Corporation principle may not be relevant. That concession is properly made. The EFED Act does affect the freedom. This is so despite the attempt of s 83 and cl 34A of the Regulations to quarantine the effect of the EFED Act. Section 96D – a burden on the freedom? The first question posed by Lange54 is whether s 96D effectively burdens the freedom of political communication either in its terms, operation or effect. It requires consideration as to how the section affects the freedom generally55. In addressing this question, it is important to bear in mind that what the Constitution protects is not a personal right56. A legislative prohibition or restriction on the freedom is not to be understood as affecting a person's right or freedom to engage in political communication, but as affecting communication on those subjects more generally. The freedom is to be understood as addressed to legislative power, not rights, and as effecting a restriction on that power. Thus the question is not whether a person is limited in the way that he or she can 54 (1997) 189 CLR 520 at 567. 55 Wotton v Queensland (2012) 246 CLR 1 at 31 [80]. 56 Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 150; Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104 at 125, 149, 162, 166-167; [1994] HCA 46; Cunliffe v The Commonwealth (1994) 182 CLR 272 at 326; Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 560; Hogan v Hinch (2011) 243 CLR 506 at 554 [92]; Wotton v Queensland (2012) 246 CLR 1 at 31 [80]; Attorney-General (SA) v Corporation of the City of Adelaide (2013) 87 ALJR 289 at 329 [166]; 295 ALR 197 at 245; [2013] HCA 3; Monis v The Queen (2013) 87 ALJR 340 at 393-394 [266]; 295 ALR 259 at 326. Hayne Crennan Bell express himself or herself57, although identification of that limiting effect may be necessary to an understanding of the operation of a statutory provision upon the freedom more generally. The central question is: how does the impugned law affect the freedom? The plaintiffs submit that the making of a political donation is a form of political communication which the legislation denies. If the submission is to be understood as referring to a restriction effected by the EFED Act upon the right of particular persons and entities to make communications, it may blur the distinction referred to above concerning the freedom. In any event, the question whether s 96D limits the freedom is simply resolved. That section effects a restriction upon the funds available to political parties and candidates to meet the costs of political communication by restricting the source of those funds. The public funding provided by the EFED Act is not equivalent to the amount which may be paid by way of electoral communication expenditure under the Act. It is not suggested that a party or candidate is likely to spend less than the maximum allowed. The party or the candidate will therefore need to fund the gap. It follows that the freedom is effectively burdened. The concession made by the defendant, that there is an indirect burden which is more than inconsequential, is inevitable. The same conclusion as to the first limb of Lange was reached in ACTV regarding the restrictions placed upon political advertising. Regardless of the legitimacy of its purpose (which may have been to effect a level playing field), the legislative restriction in ACTV was, critically, held to impair the freedom58, thus requiring further consideration as to whether the restriction was justified. The identification of the extent of the burden imposed on the freedom is not relevant to this first enquiry. The defendant's submissions that s 96D places "no material burden" on the freedom, that it is "not substantial" and that its significance is "greatly reduced" by reason of the availability of public funding 57 As observed by Professor Twomey in "The Application of the Implied Freedom of Political Communication to State Electoral Funding Laws", (2012) 35 University of New South Wales Law Journal 625 at 628, citing APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322 at 451 [381] and Wotton v Queensland (2012) 246 CLR 1 at 31 [80]. 58 Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 Hayne Crennan Bell and the existence of expenditure caps are beside the point59. Questions as to the extent of the burden and whether it is proportionate to the legitimate purpose of a statutory provision arise later in connection with the second limb enquiries60. The question at this point is simply whether the freedom is in fact burdened. It must be acknowledged that the general scheme of the EFED Act also effects burdens on the freedom because it places a ceiling on the amount of political donations which may be made and on the amount which may be expended on electoral communications. But the provisions having these effects, and their connection to the general anti-corruption purposes of the EFED Act, are not in issue. Conversely, the connection of ss 96D and 95G(6) to those purposes is. Indeed, as will be seen, that is the critical issue concerning the validity of those provisions. The existence of s 83 in the EFED Act and the enactment of cl 34A in the Regulations61 in an attempt to quarantine political donations made for federal election campaign purposes acknowledge that s 96D in its operation and effects will burden the freedom. Given the many contexts in and levels at which political communication occurs, as previously discussed62, these provisions cannot effectively prevent that burden. That they may ameliorate it to some extent is not an answer. The defendant concedes that the provisions effect a burden because it must. Its principal argument is that s 96D meets the conditions for validity stated in the second limb of the Lange test. Section 96D – its purpose Where a statutory provision effectively burdens the freedom, the second limb of the Lange test, upon which the validity of s 96D may be seen to depend, 59 Monis v The Queen (2013) 87 ALJR 340 at 370 [124], 396 [277]-[278]; 295 ALR 60 Monis v The Queen (2013) 87 ALJR 340 at 407 [343]; 295 ALR 259 at 344-345. 61 See above at [15]. Hayne Crennan Bell asks63 whether the provision is reasonably appropriate and adapted, or proportionate, to serve a legitimate end in a manner which is compatible with the maintenance of the prescribed system of representative government. The enquiry whether a statutory provision is proportionate in the means it employs to achieve its object may involve consideration of whether there are alternative, reasonably practicable and less restrictive means of doing so64. It is the defendant's contention that s 96D meets the condition of proportionality. It submits that the test of proportionality is to be understood as giving legislatures within the federation "a margin of choice as to how a legitimate end may be achieved". It has already been observed in these reasons65 that this view has not garnered the support of a majority of this Court and that the question has not been the subject of substantial argument. Nor was it in this case. In any event, the point where the question might arise for consideration is not here reached. Before consideration can be given to the defendant's argument, it is necessary to address the first enquiry which arises on the second limb of the Lange test. It concerns the identification of a legitimate statutory purpose for the provision in question. It is not possible to consider whether the prohibitions effected by s 96D are a proportionate response until the object which it seeks to achieve is identified. The identification of the true purpose of a statutory provision which restricts a constitutionally guaranteed freedom is not often a matter of difficulty. More commonly, the ultimate question as to the validity of the provision turns upon whether the provision unreasonably burdens the freedom in the pursuit of that purpose. The statutory purpose to which the measures are directed is usually evident. The resolution of the question whether the provision unreasonably burdens the freedom then falls to be resolved by the enquiries which follow. In the context of the freedom of trade and commerce, to which s 92 of the Constitution refers, the purposes of the legislative measures in question in 63 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 567; Coleman v Power (2004) 220 CLR 1 at 50 [93], 51 [95]-[96], 78 [196], 82 [211]. 64 Monis v The Queen (2013) 87 ALJR 340 at 408 [347]-[348]; 295 ALR 259 at 345- 65 At [34] above. Hayne Crennan Bell Castlemaine Tooheys Ltd v South Australia66 were found to be the conservation of energy resources and the amelioration of litter problems. In Betfair Pty Ltd v Western Australia67, it was not doubted that the provisions addressed perceived problems relating to the integrity of the racing industry in Western Australia. The legislation failed in that case because a complete prohibition was not necessary to achieve its objects. In ACTV, which concerned the freedom here in question, members of the Court were prepared to assume that the purpose of the provisions was to safeguard the integrity of the political process by reducing pressure on political parties and candidates to raise substantial sums of money, thus lessening the risk of corruption and undue influence68. Likewise, the similar anti-corruption purposes of the EFED Act are not doubted. In Monis v The Queen69, the approaches to the identification of the purpose and scope of the statutory provision there in question, which made the use of postal services for the purpose of offensive communications an offence, differed somewhat. Nevertheless, the discussion in the reasons in Monis as to the provision's purpose serves to confirm the importance that the identification of statutory purpose has to the resolution of the second limb of the Lange test. And as Hayne J observed70, the identification of the statutory purpose in connection with the application of that test is arrived at by the ordinary processes of statutory construction. Where, as here, the general purposes of the EFED Act are relied upon to justify the restrictive measures of s 96D, that section must be understood, by a process of construction, to be connected to those purposes and to further them in some way. The plaintiffs accept that it is the legitimate aim of the EFED Act to regulate the acceptance and use of political donations in order to address the 66 (1990) 169 CLR 436 at 472, 479; [1990] HCA 1. 67 (2008) 234 CLR 418; [2008] HCA 11. 68 Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 144 per Mason CJ, 154-155 per Brennan J, 188-189 per Dawson J. 69 (2013) 87 ALJR 340; 295 ALR 259. 70 Monis v The Queen (2013) 87 ALJR 340 at 370 [125]; see also at 403 [317] per Crennan, Kiefel and Bell JJ; 295 ALR 259 at 294, 338-339. Hayne Crennan Bell possibility of undue or corrupt influence being exerted. However, it is the plaintiffs' submission that s 96D does nothing calculated to promote the achievement of those legitimate purposes. There is no purpose to the prohibition, other than its achievement. It is therefore simply a burden on the freedom without a justifying purpose. These submissions should be accepted. The terms of s 96D do not reveal any purpose other than that political donations may not be accepted from persons who are not enrolled as electors, or from corporations or other entities. The context of the other provisions of Pt 6 does not illuminate the purpose of s 96D, rather they point up its absence of evident purpose and lack of connection to the scheme of Pt 6. In contrast to the general, practical provisions for capping of political donations and electoral communication expenditure, s 96D is selective in its prohibition. Yet the basis for the selection was not identified and is not apparent. By contrast, the connection of the other provisions of Pt 6 to the general purposes of the EFED Act is evident. They seek to remove the need for, and the ability to make, large-scale donations to a party or candidate. It is large-scale donations which are most likely to effect influence, or be used to bring pressure to bear, upon a recipient. These provisions, together with the requirements of public scrutiny71, are obviously directed to the mischief of possible corruption. The same cannot be said of s 96D, in its wide-ranging prohibition on the sources of donations. In argument, the identification by the defendant of a relevant purpose for the nature and scope of s 96D's prohibition proved elusive. The defendant pointed to the general purposes of the EFED Act, but was not able to explain how the prohibitions effected by s 96D were connected to them, let alone how the prohibitions could be said to further them. The defendant could point only to corporations as a justifiable target of s 96D. In its defence it pleads that, by reason of their character and size, corporations are more likely to represent a threat to integrity. It alleges that corporations are more likely to pursue self- interest and that their boards are obliged to act in that way. Further, a corporation may do so in a manner inconsistent with the views of its members. If the latter is a concern of the EFED Act, it in no way expresses or addresses it. It does not, for example, seek to regulate the making of donations by requiring the concurrence of shareholders. If corporations were in truth the 71 See above at [6]. Hayne Crennan Bell sole target of s 96D, questions might arise as to whether a complete prohibition respecting donations of any amount from any corporation was justified. But clearly the purpose of s 96D cannot lie in regulating corporate activities. The terms of s 96D are not directed to corporations alone. They extend to any person not enrolled as an elector, and to any organisation, association or other entity. General concerns about corporate activities, as distinct from specific concerns about the activities of any entity (or individual) who is prepared to exert influence corruptly in pursuit of self-interest, cannot explain the purpose of s 96D. It is not evident, even by a process approaching speculation, what s 96D seeks to achieve by effectively preventing all persons not enrolled as electors, and all corporations and other entities, from making political donations. It might be assumed that many of them will have a legitimate interest in political matters, as discussed earlier in these reasons72. Why then was it considered necessary to prohibit donations from these sources, but not from electors? More importantly, how does it further the anti-corruption purposes of the EFED Act? Section 96D is not the only prohibition on the persons or entities from whom donations may be accepted. Division 4A of Pt 6 contains provisions which make it unlawful for a "prohibited donor" to make a political donation and for a person to accept a donation from such a person. A prohibited donor is a property developer, or a tobacco, liquor or gambling industry business entity73. Division 4A was inserted in 200974. The prohibition on donations from property developers which it contained was extended with effect from 1 January 201175 to the other prohibited donors listed above, at the same time as provision was made for caps on electoral communication expenditure. But the EFED Act does not identify corporations, industrial organisations and other entities and persons not enrolled as electors as having interests of a kind which requires them to be the subject of an express prohibition. And there is nothing in the EFED Act which permits an assumption of that kind to be made. 73 Election Funding, Expenditure and Disclosures Act 1981, s 96GAA. 74 Election Funding and Disclosures Amendment (Property Developers Prohibition) Act 2009 (NSW). 75 Election Funding and Disclosures Amendment Act 2010 (NSW). Hayne Crennan Bell The history which may explain or support the targeting of the "prohibited donors" in Div 4A was not addressed in any detail in argument. It was not necessary to do so because the validity of the provisions of Div 4A is not in issue. Save for its submissions concerning corporations, the defendant did not seek to explain s 96D by analogy to the provisions of Div 4A. In particular, it did not seek to liken the interests of industrial organisations, such as the plaintiffs, to those of the prohibited donors. Section 96D stops just short of a complete prohibition upon political donations. A complete prohibition might be understood to further, and therefore to share, the anti-corruption purposes of the EFED Act. On the other hand, if challenged, it would be necessary for the defendant to defend a prohibition of all donations as a proportionate response to the fact that there have been or may be some instances of corruption, regardless of source. In any event, a complete prohibition is not the course taken in s 96D. The result is that the purpose of its wide, but incomplete, prohibition is inexplicable. In the result, further consideration of the application of the second limb of the Lange test to s 96D is forestalled. It cannot be undertaken because it is not possible to attribute a purpose to s 96D that is connected to, and in furtherance of, the anti-corruption purposes of the EFED Act. The second limb of the Lange test cannot be satisfied. The burden imposed by s 96D on the freedom cannot be justified. Section 96D is invalid. Section 95G(6) – its burden and purpose Section 95G(6) also effects a burden on freedom of political communication in restricting the amount that a political party may incur by way of electoral communication expenditure in a relevant period. It does this by deeming the amount of electoral communication expenditure made by industrial organisations (and other organisations) with which it is affiliated as having been made by that party for the purposes of the applicable cap. The party affected by the provision is the Australian Labor Party (NSW Branch), with which industrial organisations, including the second, third and sixth plaintiffs, are affiliated. The defendant does not contest the effects that s 95G(6) has; rather it seeks to justify them as reasonable. However, before consideration can be given to that question, it is again necessary to identify the purpose of s 95G(6) and its connection to the anti-corruption purposes of the EFED Act. In its defence the defendant identifies the purpose of s 95G(6) as being to render efficacious the cap on expenditure. It claims that it is legitimate to ensure that the effectiveness and fairness of the generally applicable caps are not Hayne Crennan Bell circumvented. Implicit in the notion of circumvention is that s 95G(6) is concerned with expenditure derived in fact by a single source, notwithstanding that it may be made by two legally distinct entities. The criterion chosen to identify the single source is affiliation in the way defined: namely, that an organisation is authorised under the rules of the party to appoint delegates to the governing body of the party or to participate in the preselection of candidates for It may be wondered how, logically, it could be said that affiliation of this kind is effective to identify an industrial organisation as the same source of funds for the making of electoral communication expenditure. Moreover, it would appear to assume that the objectives of all expenditure made by the party on the one hand and the organisation on the other are coincident. The criterion applied for the operation of s 95G(6) may be useful to identify industrial organisations as affiliates of political parties, but it does not reveal why or how they are to be treated as the same organisation for the purposes of expenditure on electoral communications. These observations may, however, be put to one side. It may be inferred that it is the purpose of s 95G(6) to reduce the amount which a political party affiliated with industrial organisations may incur by way of electoral communication expenditure and likewise to limit the amount which may be spent by an affiliated industrial organisation. What cannot be deduced is how this purpose is connected to the wider anti-corruption purposes of the EFED Act, or how those legitimate purposes are furthered by the operation and effect of s 95G(6). Industrial organisations are identified in the EFED Act as potential donors to political parties or candidates, and as likely to themselves expend monies on political communication. They are not identified as prohibited donors and the defendant did not seek to justify s 95G(6) and the targeting of industrial organisations and the parties with whom they are affiliated by analogy with the provisions of Div 4A. There is therefore nothing in the provision to connect it to the general anti-corruption purposes of the EFED Act. Absent a legislative purpose for s 95G(6) which is conformable with those of the EFED Act, no further consideration can be given as to whether the provision is justified. The provision is invalid. 76 Election Funding, Expenditure and Disclosures Act 1981, s 95G(7). Hayne Crennan Bell Answers to questions stated Given the conclusions reached with respect to the first two stated questions, it is unnecessary to answer the questions which follow. The questions stated for the opinion of the Court, as amended, should be answered as follows. Question 1: Is s 96D of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid because it impermissibly burdens the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution? Answer: Yes. Question 2: Is s 95G(6) of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid because it impermissibly burdens the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution? Answer: Yes. Question 3: Do ss 7A and 7B of the Constitution Act 1902 (NSW) give rise to an entrenched protection of freedom of communication on New South Wales State government and political matters? Answer: Unnecessary to answer. Question 4: If so, is s 96D of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid because it impermissibly burdens the New South Wales Constitution? that freedom, contrary Answer: Unnecessary to answer. Question 5: Further, if the answer to question 3 is "yes", is s 95G(6) of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid because it impermissibly burdens that freedom, contrary to the New South Wales Constitution? Answer: Unnecessary to answer. Question 6: Is s 96D of the Election Funding, Expenditure and Disclosures Act the Commonwealth invalid under s 109 of 1981 (NSW) Hayne Crennan Bell Constitution by reason of it being inconsistent with s 327 of the Commonwealth Electoral Act 1918 (Cth)? Answer: Unnecessary to answer. Question 7: Is s 96D of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) the Commonwealth Constitution by reason of it being inconsistent with Pt XX of the Commonwealth Electoral Act 1918 (Cth)? invalid under s 109 of Answer: Unnecessary to answer. Question 8: Is s 96D of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid because it impermissibly burdens a freedom of association provided for in the Commonwealth Constitution? Answer: Unnecessary to answer. Question 9: Who should pay the costs of the special case? Answer: The defendant should pay the plaintiffs' costs. KEANE J. In 2012 amendments were made to the Election Funding, Expenditure and Disclosures Act 1981 (NSW) ("the EFED Act") to impose restrictions on political donations, and limits upon expenditure, in relation to elections to the New South Wales Parliament. In these proceedings, the plaintiffs challenge the validity of: s 96D, which proscribes political donations to political parties by corporations, industrial associations and individuals who are not on the roll of electors for State, federal or local government elections; and s 95G(6), which aggregates a political party's expenditure on electoral campaign funding with the expenditure incurred by that party's affiliates for the purposes of determining whether a political party has exceeded the applicable cap on electoral campaign expenditure. Pursuant to s 18 of the Judiciary Act 1903 (Cth), questions as to the validity of these provisions were reserved by order of the Chief Justice for the determination of the Full Court. The material facts are set out in the Special Case agreed by the parties. The plaintiffs submitted that s 96D and s 95G(6) impermissibly burden political communication contrary to the Constitution. For the reasons that follow, that submission should be accepted, and the questions reserved for determination by the Court should be answered accordingly. The plaintiffs also argued that the impugned provisions of the EFED Act infringe a limitation on freedom of political communication implied by the Constitution Act 1902 (NSW), and that they are invalid under s 109 of the Constitution by reason of their inconsistency with electoral laws of the Commonwealth. Because the plaintiffs' principal submission should be accepted, it is unnecessary to deal with these additional arguments. The impugned provisions Sections 96D and 95G(6) are contained in Pt 6 of the EFED Act. Section 83 states that Pt 6 "applies in relation to: (a) State elections and elected members of Parliament, and (b) local government elections and elected members of councils". The provisions of Pt 6 deal with four related topics: the disclosure of political donations and electoral expenditure; the capping of political donations; the proscription of political donations by certain persons; and the capping of expenditure on election campaigns. Some brief reference to the provisions of the EFED Act relating to each of these topics, as well as to the provisions of Pt 5 relating to public funding of State election campaigns, is necessary for an appreciation of the arguments agitated by the parties. Disclosure In Div 2 of Pt 6, s 88(1)(a) provides for disclosure of "political donations received or made, and electoral expenditure incurred, by or on behalf of … a party (whether or not a registered party)". Section 88(1A) provides that disclosure is also required of "electoral communication expenditure incurred by a third-party campaigner" during the "capped expenditure period" of the electoral cycle (defined by s 95H of the EFED Act), and "political donations received by [a] third-party campaigner during the relevant disclosure period". The expression "political donation" is defined by s 85 to include "a gift made to or for the benefit of" a party, an elected member, a candidate or a group of candidates; and "[a]n amount paid by a person as a contribution, entry fee or other payment to entitle that or any other person to participate in or otherwise obtain any benefit from a fund-raising venture or function". Section 85(1)(d) includes within the definition of "political donation": "a gift made to or for the benefit of an entity or other person (not being a party, elected member, group or candidate), the whole or part of which was used or is intended to be used by the entity or person: to enable the entity or person to make, directly or indirectly, a political donation or to incur electoral expenditure, or to reimburse the entity or person for making, directly or indirectly, a political donation or incurring electoral expenditure." Section 85(3) provides that the term "political donation" includes an "annual or other subscription paid to a party", either by a "member of the party", or by "a person or entity (including an industrial organisation) for affiliation with the party". Section 85(3A)(a) provides that "a disposition of property to a NSW branch of a party from the federal branch of the party" is taken to be a gift for the purposes of s 85. The term "party" is defined by s 4(1) of the EFED Act to mean: "a body or organisation, incorporated or unincorporated, having as one of its objects or activities the promotion of the election to Parliament or a local council of a candidate or candidates endorsed by it or by a body or organisation of which it forms a part." The term "third-party campaigner" is defined by s 4(1) of the EFED Act to mean: "an entity or other person (not being a registered party, elected member, group or candidate) who incurs electoral communication expenditure during a capped expenditure period … that exceeds $2,000 in total." The term "registered party" is defined by s 4(1) to mean a "party registered ... for the purposes of" the EFED Act. Donations Section 95B(1) provides that it is "unlawful ... for a person to accept a political donation to a party, elected member, group, candidate or third-party campaigner if the donation exceeds the applicable cap on political donations." The proscription in s 95B(1) is directed at the receipt of money for the purposes of electoral campaigns for State Parliament. Section 95B(2) provides that the capping of donations does not apply to political donations "to be paid into (or held as an asset of) an account kept exclusively for the purposes of federal or local government election campaigns." This point is reinforced by s 95AA(2), which provides that a reference in Div 2A "to an election is a reference that relates to a State election"; and a reference "to an elected member, or to a candidate or other person is a reference that relates to a member of [the New South Wales] Parliament or to a candidate or other person in connection with a State election." Section 95A prescribes the applicable caps on political donations. It is sufficient to note that s 95A(1) provides that: "The applicable cap on political donations is as follows: $5,000 for political donations to or for the benefit of a registered party, $2,000 for political donations to or for the benefit of a party that is not a registered party, $2,000 for political donations to or for the benefit of an elected member, $5,000 for political donations to or for the benefit of a group, $2,000 for political donations to or for the benefit of a candidate, $2,000 for political donations to or for the benefit of a third-party campaigner." Section 95A(4) provides that "a candidate's contribution to finance his or her own election campaign is not a political donation and is not included in the applicable cap on political donations to the candidate." Proscribed political donations Section 96D provides as follows: It is unlawful for a political donation to a party, elected member, group, candidate or third-party campaigner to be accepted unless the donor is an individual who is enrolled on the roll of electors for State elections, the roll of electors for federal elections or the roll of electors for local government elections. It is unlawful for an individual to make a political donation to a party, elected member, group, candidate or third-party campaigner on behalf of a corporation or other entity. It is unlawful for a corporation or other entity to make a gift to an individual for the purpose of the individual making a political donation to a party, elected member, group, candidate or third-party campaigner. (4) Annual or other subscriptions paid to a party by a person or entity (including an industrial organisation) for affiliation with the party that are, by the operation of section 85(3), taken to be gifts (and political donations to the party) are subject to this section. Accordingly, payment of any such subscription by an industrial organisation or other entity is unlawful under this section. (5) Dispositions of property between branches of parties or between associated parties that are, by the operation of section 85(3A), taken to be gifts (and political donations to the parties) are not subject to this section." It may be noted that, notwithstanding ss 85, 96D(5) and 95AA(2), the proscriptions in sub-ss (1) to (4) of s 96D apply to donations to political parties which have federal branches. It should also be noted that Div 4A of Pt 6 makes it unlawful for a "prohibited donor"77 – namely "a property developer", "a tobacco industry business entity", or "a liquor or gambling industry business entity" – to make a 77 Election Funding, Expenditure and Disclosures Act 1981 (NSW), s 96GAA. 78 Election Funding, Expenditure and Disclosures Act 1981 (NSW), s 96GA. Expenditure Section 95I(1) provides that: "It is unlawful for a party, group, candidate or third-party campaigner to incur electoral communication expenditure for a State election campaign during the capped expenditure period for the election if it exceeds the applicable cap on electoral communication expenditure." Section 87(1) of the EFED Act defines "electoral expenditure" as "expenditure for or in connection with promoting or opposing, directly or indirectly, a party or the election of a candidate or candidates or for the purpose of influencing, directly or indirectly, the voting at an election." Section 87(2) defines "electoral communication expenditure" as "electoral expenditure" of the following kinds: expenditure on advertisements in radio, television, the Internet, cinemas, newspapers, billboards, posters, brochures, how-to-vote cards and other election material, expenditure on the production and distribution of election material, expenditure on the Internet, telecommunications, stationery and postage, expenditure incurred in employing staff engaged in election campaigns, expenditure incurred for office accommodation for any such staff and candidates (other than for the campaign headquarters of a party or for the electorate office of an elected member), such other expenditure as may be prescribed by the regulations as electoral communication expenditure". It is to be noted that, by virtue of the definitions of "electoral expenditure" and "electoral communication expenditure", the proscription of electoral communication expenditure in excess of the cap is a proscription of expenditure which is directly connected with political communication. Section 95F, together with s 95G, states the applicable caps on electoral communication expenditure for State election campaigns. It is not necessary to set out s 95F in full. It is sufficient to note that: "(2) Parties with Assembly candidates in a general election For a State general election, the applicable cap for a party that endorses candidates for election to the Assembly is $100,000 multiplied by the number of electoral districts in which a candidate is so endorsed. Party candidates in Assembly general election For a State general election, the applicable cap for a candidate endorsed by a party for election to the Assembly is $100,000. (10) Third-party campaigners For a State general election, the applicable cap for a third-party campaigner is: $1,050,000 if the third-party campaigner was registered under this Act before the commencement of the capped expenditure period for the election, or $525,000 in any other case. (12) Additional cap for individual Assembly seats The applicable cap for parties and third-party campaigners is subject to an additional cap (within the overall applicable cap) in relation to State general elections, or by-elections in more than one electorate, for electoral communication expenditure incurred substantially for the purposes of the election in a particular electorate, being: in the case of a party – $50,000 in respect of each such electorate, or in the case of a third-party campaigner – $20,000 in respect of each such electorate. (13) For the purposes of subsection (12), electoral communication expenditure is only incurred for the purposes of the election in a particular electorate if the expenditure is for advertising or other material that: explicitly mentions the name of a candidate in the election in that electorate or the name of the electorate, and is communicated to electors in that electorate, and is not mainly communicated to electors outside that electorate." Sub-sections (1) and (2) of s 95G provide for the aggregation of electoral communication expenditure by associated political parties, that is to say, parties which79: endorse candidates included in the same group in a periodic Council election, or endorse the same candidate for a State election, or form a recognised coalition. Section 95G(6) provides that electoral communication expenditure of political parties and organisations affiliated with them is to be aggregated, thereby limiting the amount of electoral communication expenditure able to be incurred in total by the party and the affiliated organisation. Sub-sections (6) and (7) of s 95G provide: "(6) Aggregation of expenditure of parties and affiliated organisations Electoral communication expenditure incurred by a party that is of or less than the amount specified in section 95F for the party … is to be treated as expenditure that exceeds the applicable cap if that expenditure and any other electoral communication expenditure by an affiliated organisation of that party exceed the applicable cap so specified for the party. other In subsection (6), an affiliated organisation of a party means a body organisation, whether unincorporated, that is authorised under the rules of that party to appoint delegates to the governing body of that party or to participate in pre-selection of candidates for that party (or both)." incorporated 79 Election Funding, Expenditure and Disclosures Act 1981 (NSW), s 95G(1). Public funding Part 5 of the EFED Act establishes an "Election Campaigns Fund" ("the Fund") to be kept by the Election Funding Authority of New South Wales in respect of State elections80. The evident purpose of Pt 5 is to reduce the dependence of political parties on funding from private sources. Section 57 provides for the circumstances in which a party will be eligible to receive a payment in respect of State or local government elections out of the Fund. Eligible parties and candidates are entitled to receive public funding proportionate to their "actual expenditure", which is defined81 as "the total actual electoral communication expenditure incurred" by a party or candidate. The amounts are as follows: For an "eligible Assembly party", up communication expenditure cap82. its electoral to 75% of For party candidates for the Assembly, up to 30% of their electoral communication expenditure cap83. For Assembly independent candidates, up to 45% of their electoral communication expenditure cap84. The validity of s 96D The plaintiffs' challenge to the validity of s 96D was advanced on two bases: first, that a political donation is itself a form of political communication which may not be prohibited; and secondly, that the prohibition on political donations by individuals who are not on the electoral roll as well as corporations and other entities such as industrial organisations is an impermissible burden upon the freedom of political communication within the federation. 80 Election Funding, Expenditure and Disclosures Act 1981 (NSW), s 56. 81 Election Funding, Expenditure and Disclosures Act 1981 (NSW), ss 58(1), 61. 82 Election Funding, Expenditure and Disclosures Act 1981 (NSW), s 58. 83 Election Funding, Expenditure and Disclosures Act 1981 (NSW), s 60. 84 Election Funding, Expenditure and Disclosures Act 1981 (NSW), s 60. Donation as communication The plaintiffs submitted that making a political donation constitutes a political communication on the basis that "actions as well as words can communicate ideas."85 Decisions of the United States Supreme Court were cited by the plaintiffs to support the propositions that, from the perspective of the donor, a political donation "serves as a general expression of support for the candidate and his views"86, and from the point of view of the donee, the acceptance of a donation is an expression of the willingness of a candidate to be associated with, and to accept the support of, the donor. Thus, in Colorado Republican Federal Campaign Committee v Federal Election Commission87, Thomas J observed: "Whether an individual donates money to a candidate or group who will use it to promote the candidate or whether the individual spends the money to promote the candidate himself, the individual seeks to engage in political expression and to associate with like-minded persons." In relation to sub-ss (1), (3) and (4) of s 96D, the plaintiffs relied upon Citizens United v Federal Election Commission88 to argue that political communications by corporations and industrial organisations should not be treated differently from those of enrolled voters simply because such organisations are not natural persons entitled to vote. This ground of the plaintiffs' challenge to the validity of s 96D should be rejected for reasons which reflect a substantial difference in the constitutional arrangements of the Commonwealth and the United States. The First Amendment to the United States Constitution provides that "Congress shall make no law … abridging the freedom of speech". The First Amendment guarantees a right of free speech89. It is a personal right to express one's views on any topic, whether that be to participate in the market place of 85 Levy v Victoria (1997) 189 CLR 579 at 594; [1997] HCA 31. 86 Buckley v Valeo 424 US 1 at 21 (1976). 87 518 US 604 at 638 (1996). 88 175 L Ed 2d 753 (2010). 89 New York Times Co v Sullivan 376 US 254 (1964); Citizens United v Federal Election Commission 175 L Ed 2d 753 at 782, 815, 867 (2010). ideas90 or to pursue the self-realisation involved in the free expression of one's views91. In light of the decision in Citizens United, it seems that this personal right extends to corporations as well as natural persons. The United States decisions shed little direct light on the path to the resolution of the issues of concern here. That is hardly surprising, given that, as Heydon J noted in Monis v The Queen92, "the framers of [the Constitution], after carefully examining the United States Constitution, deliberately decided not to transpose its First Amendment, either in whole or in part." In Australia, the limitation upon governmental power arises from ss 7, 24, 64 and 128 of the Constitution as a matter of necessity to ensure their effective operation93. In Lange v Australian Broadcasting Corporation94, this Court explained that: "ss 7 and 24 and the related sections of the Constitution necessarily protect that freedom of communication between the people concerning political or government matters which enables the people to exercise a free and informed choice as electors." The text of the relevant sections of the Constitution should be noted to make the point that political communication within the federation is free in order to ensure the political sovereignty of the people of the Commonwealth, who are required to make the political choices necessary for the government of the federation and the alteration of the Constitution itself. Section 7 of the Constitution provides relevantly in relation to the composition of the upper house of the Commonwealth Parliament that: "The Senate shall be composed of senators for each State, directly chosen by the people of the State, voting, until the Parliament otherwise provides, as one electorate." 90 Abrams v United States 250 US 616 at 630 (1919); New York State Board of Elections v Lopez Torres 552 US 196 at 208 (2008). 91 Citizens United v Federal Election Commission 175 L Ed 2d 753 at 868 (2010). 92 (2013) 87 ALJR 340 at 390 [248]; 295 ALR 259 at 322; [2013] HCA 4. 93 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 560-561; [1997] HCA 25. 94 (1997) 189 CLR 520 at 560. Section 24 provides relevantly in relation to the composition of the lower house that: "The House of Representatives shall be composed of members directly chosen by the people of the Commonwealth". Section 64 provides for the appointment of Ministers of State for the Commonwealth, and relevantly that: "no Minister of State shall hold office for a longer period than three months unless he is or becomes a senator or a member of the House of Representatives." Section 128 provides the sole means of altering the Constitution, and relevantly that: "The proposed law for the alteration [of the Constitution] … shall be submitted in each State and Territory to the electors qualified to vote for the election of members of the House of Representatives." The limitation on governmental power which is indispensable95 to the effective operation of these provisions of the Constitution does not create a personal right akin to that created by the First Amendment to communicate in any particular way one might choose96. In Monis97, Crennan, Kiefel and Bell JJ explained: "Sections 7 and 24 of the Constitution do not … confer personal rights on individuals; rather they preclude the curtailment of the protected freedom by the exercise of legislative or executive power." (footnote omitted) The Constitution does not guarantee that those who wish to express their support for a candidate by making a donation may express themselves in that 95 Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 146, 174, 236; [1992] HCA 45; Levy v Victoria (1997) 189 CLR 579 at 623; Monis v The Queen (2013) 87 ALJR 340 at 373 [143]; 295 ALR 259 at 298. 96 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 560; APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322 at 451 [381]; [2005] HCA 44. 97 (2013) 87 ALJR 340 at 395 [273]; 295 ALR 259 at 328. particular way. As Hayne J observed in APLA Ltd v Legal Services Commissioner (NSW)98: "in deciding whether the freedom has been infringed, the central question is what the impugned law does, not how an individual might want to construct a particular communication". Accordingly, one may say that, if s 96D is not an effective burden on political communication within the federation, the circumstance that it prevents a supporter of a candidate or party from expressing that support by making a political donation will not render it invalid. As Brennan J said in Australian Capital Television Pty Ltd v The Commonwealth ("ACTV")99: "[T]he extent of any relevant limitation of legislative power is the scope of the relevant freedom. But, unlike freedoms conferred by a Bill of Rights in the American model, the freedom cannot be understood as a personal right the scope of which must be ascertained in order to discover what is left for legislative regulation". Section 96D leaves open many (and more explicit) ways for support for a candidate or party to be expressed by those minded to do so other than by the making of a donation. Section 96D proscribes the making of donations, not publicising the support which the making of donations might be taken to imply. Viewed from the perspective of the donor, the proscription hardly seems a significant restriction upon the donor's ability to express support for a candidate or political party. But that is not the relevant perspective from which to consider the issue. The constitutionally protected interest is that of the people of the Commonwealth in the free and informed exercise of the political choices required of them by ss 7, 24 and 128 of the Constitution; and the relevant question is whether the flow of pertinent information to and from them might be diminished by a restriction upon the making of political donations. How that question is to be answered does not depend on the proposition that a political donation is a form of political expression by the donor. Disfavoured donations The plaintiffs' challenge to the validity of s 96D on the ground that it proscribes political donations by certain classes of donor requires consideration of two broad and related issues: first, as already noted, whether s 96D impermissibly burdens the freedom of political communication within the federation; and, secondly, whether the provisions of the EFED Act which purport 98 (2005) 224 CLR 322 at 451 [381]. 99 (1992) 177 CLR 106 at 150. to confine its operation to State and local government elections preserve its proscriptive effect, notwithstanding the freedom of political communication within the federation. This second issue will be referred to as the "quarantine question". As to the first of these issues, the decision of this Court in Lange100 established the framework for analysis of whether a law of the Commonwealth, a State or a Territory is invalid as impermissibly trenching upon the freedom of communication derived from ss 7, 24, 64 and 128 of the Constitution. This framework was modified in Coleman v Power101; but it remains convenient to refer to it as "the Lange test". It was most recently accepted as authoritative in the decisions of this Court in Hogan v Hinch102, Wotton v Queensland103 and Monis104. In the present case, no party or intervener sought to call into question the authority of the Lange test. A law will be invalid under the Lange test if: the law effectively burdens freedom of communication about government or political matters either in its terms, operation or effect, and it is not reasonably appropriate and adapted to serve a legitimate end the fulfilment of which the constitutionally prescribed system of representative and responsible government and the procedure prescribed by s 128 for submitting a proposed amendment of the Constitution to the informed decision of the people. the maintenance of is compatible with The arguments of the parties in relation to each limb may conveniently be summarised and considered in turn. An effective burden? The plaintiffs submitted that s 96D effectively burdens political communication by limiting the sources of funds otherwise available to political 100 (1997) 189 CLR 520 at 567-568. 101 (2004) 220 CLR 1 at 51 [95]-[96], 78 [196], 82 [211]; [2004] HCA 39. 102 (2011) 243 CLR 506 at 542-543 [47], 554 [92]; [2011] HCA 4. 103 (2012) 246 CLR 1 at 15 [25]; [2012] HCA 2. 104 (2013) 87 ALJR 340 at 360 [61], 366-367 [102]-[106], 387-388 [236], 396 [276]; 295 ALR 259 at 279, 288-289, 318, 329. to engage parties, candidates and in political third-party campaigners communication and by discriminating between those sources. The plaintiffs noted that the facts agreed in the Special Case establish that the greater part of the donations to the major political parties in the period from 1 July 2008 to 30 June 2011 were not from individuals. The plaintiffs also noted that the provisions for public funding pursuant to Pt 5 of the EFED Act were enacted prior to the introduction of the prohibition in s 96D and so cannot be seen as in some way "offsetting" the reduction in donations in consequence of s 96D. In any event, Pt 5 of the Act provides for only partial reimbursement of electoral communication expenditure. The defendant submitted that s 96D imposes no effective burden on political communication, in that s 96D does not restrict any communication by the entities or persons that it prohibits from making political donations voicing support for, or opposition to, any party or candidate or any of their policies. Ironically, the defendant's submission, echoing the plaintiffs' reliance on the First Amendment, replicates the confusion of a personal right of individual expression with the free flow of political communication within the federation. The question whether political communication is effectively burdened is not answered in the negative by the circumstance that an individual is permitted to "construct a particular communication"105. The issue is as to the effect of the proscriptions upon the free flow of political communication within the federation. And whether the proscriptions burden that flow is not a complicated question. As to the first limb of the Lange test, in Monis106 Hayne J said that: "[t]he expression 'effectively burden' means nothing more complicated than that the effect of the law is to prohibit, or put some limitation on, the making or the content of political communications." Given that the evident purpose of s 96D is to limit the funds available to political campaigns, there is an air of unreality about the defendant's contention that s 96D does not burden political communication or that its effect is not substantial107. Section 96D proscribes political donations by corporations, entities including industrial associations, and individuals other than enrolled electors. The facts agreed in the Special Case establish the importance of funding from corporations and industrial associations to campaigning. 105 APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322 at 451 106 (2013) 87 ALJR 340 at 367 [108]; 295 ALR 259 at 290. 107 Mulholland v Australian Electoral Commission (2004) 220 CLR 181 at 200 [40]; [2004] HCA 41; Hogan v Hinch (2011) 243 CLR 506 at 555-556 [95]. Campaigning is an essential aspect of political communication. Further, the provisions of Pt 5 of the EFED Act in relation to the Fund do not provide for the full reimbursement of the funds devoted to campaigning. No doubt some political communication occurs without the need for payment; but, equally, there can be no doubt that a restriction on the availability of donations will substantially diminish the extent of political communication. That being so, it is necessary, under the Lange framework, to turn to consider whether the burden is "reasonably appropriate and adapted to serve a legitimate end in a manner that is compatible with the maintenance of the constitutionally prescribed system of government and the freedom of political communication which is its indispensable incident."108 Appropriate means adapted to a legitimate end compatible with the freedom of political communication The defendant submitted that s 96D is part of a regulatory scheme directed to protecting the integrity of the State electoral and governmental system. That end was said to be not only compatible with, but supportive of, representative democracy. In the course of oral argument, counsel for the defendant elaborated upon this submission, arguing that, for the purposes of the second limb of the Lange test, the ends pursued by s 96D were: first, a step towards the absolute prohibition of donations to political parties; and, secondly, the alleviation of concerns as to secret or undue influence by donors over candidates and parties, in that some bodies, by virtue of their character and size, are more likely to present a threat to the integrity of the electoral process than individuals. Further, there is the possibility of the pursuit by corporations and industrial associations of political agenda different from those of their shareholders or members. In this latter regard, the defendant argued that such bodies may make political donations which are inconsistent with the views of significant portions of their membership. It is not to the point, the defendant argued, to question whether the impugned provisions have established "the most desirable or least burdensome regime to carry out the legitimate ends"109 because, in respect of political judgments of this kind, the legislature enjoys a margin of choice as to how a legitimate end may be achieved. The plaintiffs submitted in relation to sub-ss (1) and (2) of s 96D that concerns as to secret or undue influence upon candidates and parties afford no rational basis to differentiate between permitted donations and those which are 108 Monis v The Queen (2013) 87 ALJR 340 at 378 [175]; 295 ALR 259 at 304. 109 Mulholland v Australian Electoral Commission (2004) 220 CLR 181 at 305 [360]. proscribed. In this regard, it was said that there is no reason to think that concerns as to the purchase of secret or undue influence by donations vary depending on whether the donor is an enrolled voter or not. As to sub-ss (3) and (4) of s 96D, the plaintiffs submitted there are no facts agreed in the Special Case which establish that political donations from corporations or industrial organisations are more likely to represent a threat to the integrity of representative government than donations from other classes of donor. And there is no basis on which judicial notice could be taken of such a fact. The defendant countered that, while the existence of threats to public integrity can be difficult to prove by particular facts, the existence of such threats cannot be doubted110. The defendant's contention that s 96D is justified as a step towards a comprehensive prohibition on all political donations must be rejected for reasons which may be stated briefly. One must deal with the law as it is, not as it might be. Either s 96D is justifiable in its own terms or it is not: today's law cannot be justified by the future possibility of proscriptions as yet unwritten. The defendant's second contention must also be rejected, but for reasons which require a more elaborate explanation. It may be said at the outset of this explanation that the application of the second limb of the Lange test is not without its difficulties. These difficulties arise, in part, by reason of the indefinite and highly abstract language in which it is expressed, as is illustrated by the division of opinion on the application of the second limb of the Lange test in Monis. Further, to the extent that the second limb of the Lange test might be seen to contemplate the striking down of one legislative measure because a different, less burdensome, measure might have been available, it would seem to countenance a form of decision-making having more in common with legislative than judicial power. The language in which the second limb of the Lange test is cast draws upon the language of Marshall CJ in McCulloch v Maryland111. There, speaking of the relationship of means to ends required to sustain a legislative choice of means to achieve a given end, Marshall CJ wrote: "Let the end be legitimate, let it be within the scope of the constitution, and all means which are appropriate, which are plainly adapted to that 110 Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 111 17 US 316 at 421 (1819). end, which are not prohibited, but consist with the letter and spirit of the constitution, are constitutional." The talismanic language of Marshall CJ must be understood in its context, and particularly in light of the statement which followed four paragraphs later in his Honour's reasons112: "[W]here the law is not prohibited, and is really calculated to effect any of the objects entrusted to the government, to undertake here [scil, in this Court] to inquire into the degree of its necessity, would be to pass the line which circumscribes the judicial department, and to tread on legislative ground. This court disclaims all pretensions to such a power." This statement prompts the observation that the second limb of the Lange test is, in contrast to the case with which Marshall CJ was dealing, concerned to determine whether a law is "prohibited": the constitutional guarantee operates as an implied prohibition on the exercise of the law-making power otherwise available to the State. In addition, it is apparent that Marshall CJ did not countenance a judicial judgment as to the extent to which one measure, rather than another, less drastic measure, may be necessary to pursue the legitimate (and possibly competing) ends of government113. A similar perspective is evident in the remarks of Dixon J in Australian Communist Party v The Commonwealth114, where his Honour said that, while questions as to the extent and operation of a power to legislate "must be decided by the Court, the reasons why it is exercised, the opinions, the view of facts and the policy upon which its exercise proceeds and the possibility of achieving the same ends by other measures are no concern of the Court." Further, Marshall CJ was addressing the relationship of means to ends in the context of the scope of legislative power conferred on Congress; he was not concerned with the impact of the United States Constitution on the exercise of State legislative power. It might be said that where a State law is impugned, the question for the Court can only be whether the impugned law can reasonably be said to be 112 17 US 316 at 423 (1819). 113 See also Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 159-160; Campbell and Crilly, "The Implied Freedom of Political Communication, Twenty Years On", (2011) 30 University of Queensland Law Journal 59 at 74. 114 (1951) 83 CLR 1 at 198; [1951] HCA 5. compatible with the free flow of political communication within the federation. In Coleman v Power115, McHugh J, speaking of a State law, said: "Ordinarily … serious interference with … political communication would itself point to the inconsistency of the objective of the law with the system of representative government." It must be acknowledged, however, that no party or intervener advanced an argument to that effect in this case; and so it is the formulation in the second limb of the Lange test which must be applied. In any event, the difficulties which might sometimes attend the application of the second limb of the Lange test do not loom large here. Whether one applies the second limb of the Lange test, or asks whether it can reasonably be said that the impugned law is compatible with the free flow of political communication indispensable to the free and informed choices required of the people of the Commonwealth by the Constitution116, the answer would be the same: subject to the quarantine question, the prohibitions in s 96D cannot be sustained. In assessing the strength of the arguments agitated by the parties, the primary consideration must be that the flow of political communication within the federation is required to be kept free in order to preserve the political sovereignty of the people of the Commonwealth. This must be so, both for legislatures which enact measures which affect the flow of political communication within the federation, and for the courts called upon to rule upon the compatibility of those measures with the requirements of the Constitution. In ACTV117, Mason CJ said that ultimately: "it is for the Court to determine whether the constitutional guarantee has been infringed in a given case. And the Court must scrutinize with scrupulous care restrictions affecting free communication in the conduct of elections for political office for it is in that area that the guarantee fulfils its primary purpose." (footnote omitted) The caps imposed by ss 95A and 95I are apt to effect a reduction in the quantity of political communication, but it was not suggested that they fell foul of the second limb of the Lange test. In that regard, ss 95A and 95I operate across the board, and while they may limit the influence of donations on candidates and parties, they may reasonably be seen to enhance the prospects of a 115 (2004) 220 CLR 1 at 52 [98]. 116 Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 117 (1992) 177 CLR 106 at 144. level electoral playing field. No party or intervener was disposed to deny that these provisions are compatible with the freedom of political communication. They can be seen to be appropriate and adapted to ensure that wealthy donors are not permitted to distort the flow of political communication to and from the people of the Commonwealth118. In contrast, s 96D proscribes donations from certain sources but not others. In proscribing some sources of funding for political communication, it thereby favours other sources in terms of the flow of political communication. This discrimination is apt to distort the flow of political communication within the federation. The legislation in question in ACTV was held to be invalid on the basis of the discriminatory character of its proscription of some sources of political communication relating to electoral campaigning119. No party or intervener sought to call into question the decision in ACTV. It cannot be doubted that the protection of the integrity of the electoral process from secret or undue influence is a legitimate end the pursuit of which is compatible with the freedom of political communication. In ACTV, Mason CJ said120: "the need to raise substantial funds in order to conduct a campaign for election to political office does generate a risk of corruption and undue influence, that in such a campaign the rich have an advantage over the poor and that brief political advertisements may 'trivialize' political debate. The enhancement of the political process and the integrity of that process are by no means opposing or conflicting interests". More recently, Campbell and Crilly have written of the difficulty of coming121: 118 Harper v Canada (Attorney General) [2004] 1 SCR 827 at 868 [62]. 119 (1992) 177 CLR 106 at 131-132, 145-146, 171-173, 218, 236. 120 (1992) 177 CLR 106 at 144-145. See also at 154-156 per Brennan J; Monis v The Queen (2013) 87 ALJR 340 at 373 [143]; 295 ALR 259 at 298. 121 "The Implied Freedom of Political Communication, Twenty Years On", (2011) 30 University of Queensland Law Journal 59 at 78. "to grips with the inequities and distortions of campaign finances, a realm in which there are vast political expenditures provided by individuals, corporations, unions and taxpayers, on a scale which, proportionate to the population's size, is amongst the highest in the world. This not only disregards the ideal of political equality central to democratic values, but also encourages methods of campaigning and propagandising which are rightly seen by their subjects as insultingly uninformative and non- argumentative, a type of political communication which is neither free nor inviting." Section 96D does not aid in the work done by ss 95A and 95I. Rather, it is itself apt to distort the flow of political communication within the federation by disfavouring some sources of political communication and thus necessarily favouring others. In addition, the proscriptions in s 96D do not reflect a calibrated balancing of legitimate ends as contemplated by the second limb of the Lange test. In this latter regard, the proscriptions in s 96D are very broad; they are not calibrated to give effect to the rationale identified by the defendant by criteria adapted to target the vices said to attend the disfavoured sources of political communication. The sources of political communication which are favoured by their omission from the scope of s 96D may well be attended by the same vices as the defendant identified as justifying s 96D. Corporations are familiar and accepted sources and conduits of political information. Their familiarity, variety and ubiquity serve to highlight the unqualified impact of the sweeping proscription in s 96D. In The Constitutional Rethinking Corporate Governance122, Professor Stephen Corporation: Bottomley noted that: "The significance of corporations in modern society is not confined to the private business sector. Corporate forms of organisation are now commonplace in the non-business and non-profit sectors, including social groups and religious organisations, sports and recreational clubs, educational institutions, professional firms, and welfare organisations. … [C]orporations now feature in all aspects of social, political and economic life – private and public, business and non-business, large and small enterprise. … [T]he connection between citizens and their national and global communities is increasingly mediated … through the activities of corporations." (footnote omitted) In addition, many corporations are small and closely held and so are not distinguishable from the individuals who stand behind them in terms of their potential for exercising secret or undue influence upon candidates or political parties through donations. There is also no evident basis, in terms of the rationale suggested by the defendant, to differentiate between individuals who are enrolled to vote and those who are not as sources of political communication. To disfavour political communication sourced in funds provided by individuals on the sole ground that they are not on the roll of electors is to fail to appreciate two matters. First, unenrolled individuals may be among the governed whose interests are affected by governmental decisions. Secondly, and more importantly, the freedom of political communication within the federation is not an adjunct of an individual's right to vote, but an assurance that the people of the Commonwealth are to be denied no information which might bear on the political choices required of them. Thus, in ACTV123, Mason CJ made the point that the electors, who must make the political choices required by the Constitution, may be assisted by the views of those within the community who are not entitled to vote: "Freedom of communication in relation to public affairs and political discussion cannot be confined to communications between elected representatives and candidates for election on the one hand and the electorate on the other. The efficacy of representative government depends also upon free communication on such matters between all persons, groups and other bodies in the community. That is because individual judgment, whether that of the elector, the representative or the candidate, on so many issues turns upon free public discussion in the media of the views of all interested persons, groups and bodies and on public participation in, and access to, that discussion124." This point is relevant to the prohibitions upon political donations by unenrolled individuals, corporations and industrial organisations. The legitimacy of the suppression, complete or partial, of political communication generated from funds provided by such sources must be determined, not by reference to the 123 (1992) 177 CLR 106 at 139. 124 Lord Simon of Glaisdale made the point in Attorney-General v Times Newspapers Ltd [1974] AC 273 at 315, when he said: "People cannot adequately influence the decisions which affect their lives unless they can be adequately informed on facts and arguments relevant to the decisions. Much of such fact-finding and argumentation necessarily has to be conducted vicariously, the public press being a principal instrument." political agenda of individuals or corporations or the individuals behind the corporate veil or industrial association, but by reference to the indispensable entitlement of the people of the Commonwealth to free access to information which might be pertinent to the exercise of their political sovereignty. In ACTV125, Mason CJ described the legislation there held to be invalid as "discriminatory in the respects already mentioned." In that regard, the "respects already mentioned" by his Honour were prohibitions which126: "directly exclude potential participants in the electoral process from access to an extremely important mode of communication with the electorate. Actual and potential participants include not only the candidates and established political parties but also the electors, individuals, groups and bodies who wish to present their views to the community." To appreciate the compelling force of that view one need only reflect on the relevance of advocacy by individuals or corporations on behalf of "undocumented immigrants" to the political choices to be made by the electors of the Commonwealth. One need reflect only a little further to appreciate, as well, that advocacy as to the appropriate location of centres for the detention of such immigrants might well be of concern in State or local government elections. This last reflection is relevant as well to the issue whether the provisions of the EFED Act which seek to confine its operation to State or local government elections are effective to preserve s 96D. The quarantine question The defendant argued that ss 83 and 95AA(2) of the EFED Act ensure that s 96D does not restrict political communication protected under the Constitution. that restrictions on The plaintiffs argued funding political the communications in New South Wales elections will affect the flow of information which is indispensable to the making of the free and informed choices required by the Constitution of the people of the Commonwealth. It was observed that, in Australia, the major political parties operate at federal, State, Territory and local government levels, each seeking to further their objects through the election of members to both State and Commonwealth legislatures and local governments. 125 (1992) 177 CLR 106 at 146. 126 (1992) 177 CLR 106 at 145. See also at 131-132. There is ample authority for the plaintiffs' submission. In Stephens v West Australian Newspapers Ltd127, Mason CJ, Toohey and Gaudron JJ said that "the freedom of communication implied in the … Constitution extends to public discussion of the performance, conduct and fitness for office of members of a State legislature." In Lange, the Court said128: "[T]he discussion of matters at State, Territory or local level might bear on the choice that the people have to make in federal elections or in voting to amend the Constitution, and on their evaluation of the performance of federal Ministers and their departments. The existence of national political parties operating at federal, State, Territory and local government levels, the financial dependence of State, Territory and local governments on federal funding and policies, and the increasing integration of social, economic and political matters in Australia make this conclusion inevitable." And, in Hogan v Hinch129, French CJ said: "significant interaction between the different levels of government in Australia … makes it difficult to identify subjects not capable or potentially capable of discussion as matters which are or should be or could be of concern to the national government." The defendant's argument casts ss 83 and 95AA(2) of the EFED Act in the legendary role of King Cnut, who, for all his sovereign power within his realm, could not prevent the flow of the tide into it. Sections 83 and 95AA(2) of the EFED Act confine the operation of s 96D to conduct which occurs in relation to elections to the New South Wales Parliament or local council elections in New South Wales; but they cannot ensure that political communications are of exclusively local significance. Just because a communication occurs in the course of a State or local government election, it does not follow that it might not also be pertinent to the choices required by the Constitution of the people of the Commonwealth. It may be said that it would be difficult, as a matter of drafting, to proscribe only such donations as fund those communications which are not 127 (1994) 182 CLR 211 at 232; [1994] HCA 45. 128 (1997) 189 CLR 520 at 571-572. See also Roberts v Bass (2002) 212 CLR 1 at 29 [73], 58 [159]; [2002] HCA 57. 129 (2011) 243 CLR 506 at 543 [48]. pertinent to those choices; but to say that is merely to acknowledge the unreality of the suggestion that s 96D, even confined by ss 83 and 95AA(2), is not apt to have an adverse effect upon the free flow of political communication within the federation. The famous aphorism of Mr Thomas P (Tip) O'Neill, the Speaker of the United States House of Representatives, that "all politics is local" was a statement of practical politics, not constitutional principle. It may be accepted that not all political communications, however parochial their content may be, are inevitably linked to the political choices to be made by the people of the Commonwealth. As a matter of fact, some political communications will be of exclusively local concern without federal ramifications. A candidate for election to a local council may focus his or her campaign exclusively on local issues. But the proscriptions in s 96D are not targeted at particular communications within a campaign; they are targeted at donations which fund campaigning which is directed at electors who happen to be among the people of the Commonwealth who are required to make the choices contemplated by ss 7, 24 and 128 of the Constitution130. When a question arises as to whether legislation trenches upon the freedom of political communication, it is necessary to bear in mind that what is at stake is the political sovereignty of the people of the Commonwealth. It may be said that whether information is pertinent to the exercise of the political choices required of the people of the Commonwealth is a question which only the people of the Commonwealth can answer. But, as a practical legal matter, that question must be answered by this Court131. While the Court must accept that "[c]ommunications on political and governmental matters [as] part of the system of representative and responsible government … may be regulated in ways that enhance or protect the communication of those matters"132, the Court must also ensure that the regulation is compatible with the maintenance of the federation's system of representative and responsible government. Where political and governmental information which flows to and from the electorate in State and local government campaigns (that electorate being part of the people of the Commonwealth) might be pertinent to the political choices required of the people of the Commonwealth, the sources and conduits of that information must be kept 130 cf Commonwealth Electoral Act 1918 (Cth), s 93 and Parliamentary Electorates and Elections Act 1912 (NSW), ss 22, 23. 131 Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 132 Coleman v Power (2004) 220 CLR 1 at 52 [97]. open and undistorted. Thus, in Lange133, the Court said, speaking particularly of s 128 of the Constitution, that: "by directly involving electors in the States and in certain Territories in the process for amendment of the Constitution, [s 128] necessarily implies a limitation on legislative and executive power to deny the electors access to information that might be relevant to the vote they cast in a referendum to amend the Constitution." (emphasis added) It is telling that neither in the Special Case, nor in the course of argument, was a practical example given of a political communication which might relate exclusively to the election of a candidate to the New South Wales Parliament or to a local government in New South Wales with no bearing upon the political choices required of the people of the Commonwealth by the Constitution. While it is possible to conceive of a campaign for election to a local council where the entire campaign is exclusively focused on matters of parochial interest, s 96D is not confined by ss 83 and 95AA(2) to such campaigns. Rather, it is targeted at the funding of campaigns which might be pertinent to the political choices of the people of the Commonwealth. The validity of s 95G(6) As has been noted, the plaintiffs did not challenge the validity of the caps on political expenditure imposed by s 95I(1); rather they attacked the validity of the aggregating provision in s 95G(6). Once again, it was accepted on all sides that the validity of this provision is to be determined by reference to the application of the Lange test. An effective burden? The plaintiffs submitted that s 95G(6) impermissibly burdens the freedom of political communication (in terms of the first limb of the Lange test) in three ways. First, it limits the amount that a political party and any affiliated organisation may spend on electoral communication expenditure, thereby diminishing the type or amount of political communication in which either may engage. Secondly, the amount an affiliated organisation is permitted to incur on electoral communication expenditure is dependent on the amount spent by the party. If one affiliated organisation wishes to incur electoral communication expenditure, then it will need to limit its own spending to ensure that the spending does not cause the aggregate to exceed the party's cap. Thirdly, s 95G(6) has a chilling effect on incurring electoral communication expenditure because the party's cap and the spending limit of affiliated organisations can only be known at the end of the capped expenditure period. 133 (1997) 189 CLR 520 at 561. The defendant contended that s 95G(6) does not impose a burden on the freedom of political communication but identifies a particular relationship in respect of which the legislature has determined that the electoral communication expenditure of more than one participant in the electoral process should be aggregated. In terms of the first limb of the Lange test, the defendant's last-mentioned contention makes the point that the extent of political communication is to be restricted on the ground that it is funded by political allies with a given level of formal association. Section 87 of the EFED Act expressly defines electoral communication expenditure in terms of political campaigning. Accordingly, sub-ss (6) and (7) of s 95G will have the practical effect of reducing the total flow of political communication which would otherwise emanate from a party and its affiliates. It may be accepted that, as the defendant submitted, the aggregation provision amplifies the effect of the caps on electoral expenditure. But to say that is necessarily to recognise a burdening of political communication so far as the first limb of the Lange test is concerned, and to fail to recognise the discriminatory nature of that burden so far as the second limb of the Lange test is concerned. Appropriate means adapted to a legitimate end compatible with the freedom of political communication In relation to whether the aggregation provision is justified under the second limb of the Lange test, the defendant sought to justify s 95G(6) as being appropriate and adapted to preventing the operation of s 95I(1), the validity of which is not contested, being circumvented. The criteria established by s 95G(7) the for "affiliated organisations" require formal arrangements between organisation and the political party with respect to fundamental party processes: the composition of its governing body and the pre-selection of candidates. Affiliated organisations are, in the defendant's submission, a meaningful and significant part of the political party. It was said to be irrelevant that affiliated organisations may not always agree on all issues with the party leadership. The plaintiffs countered that the ability of an affiliated organisation to appoint delegates to the governing body of a political party, or to participate in the pre-selection of candidates, is neither the legal nor practical equivalent of control of the political communications emanating from that political party. Further, the ability of an organisation to appoint delegates to the governing body of a political party, or to participate in the pre-selection of candidates, does not mean there is an identity of opinions or objectives between the party and the affiliate. In addition, the defendant argued that individuals who are members of affiliated organisations are left at liberty to act individually or in concert to make expenditure to communicate politically. That may be so, but to say that is, once again, to view the issue as if it were concerned with the vindication of a personal right of free expression in the individual members of affiliated organisations. In truth, the issue is whether the provision which restricts the free flow of political communication is justifiable in terms of the indispensable need to maintain the free flow of political communication within the federation. Further, to seek to justify the aggregation provision by reference to the possibility that political communication emanating from a political party may not accurately reflect the views of the members of the affiliate once again confuses notions of personal rights of expression of the membership with the interest of the people of the Commonwealth which is protected by the implied freedom. The effect of sub-ss (6) and (7) of s 95G is that certain sources of political communication are treated differently from others. For example, third-party campaigners are not subject to the aggregation provisions. The effect of this differential treatment is to distort the free flow of political communication by favouring entities, such as third-party campaigners, who may support a political party, but whose ties are not such as to make them affiliates under the rules of that party even though they may promulgate precisely the same political messages. Political communication generated by electoral communication expenditure by organisations affiliated with a party is disfavoured relative to political communication by entities which, though actively supportive of, and indeed entirely ad idem with, a given party, are not affiliated with it. To discriminate between sources of political communication in this way, in the sense of the term used by Mason CJ in ACTV134 and discussed above in relation to s 96D, is to distort the flow of political communication. This distortion of political communication cannot be regarded as appropriate and adapted to enhance or protect the free flow of political communication within the federation. In this regard, s 95G(6) is not calibrated, even in the most general terms, so as to target only sources of political communication affected by factors inimical to the free flow of political communication throughout the Commonwealth. The quarantine question For the reasons set out in relation to s 96D, s 83 does not quarantine the operation of s 95G(6) so as to preserve its effectiveness notwithstanding the implied freedom. 134 (1992) 177 CLR 106 at 145-146. Conclusions and orders The questions reserved for determination should be answered as follows: Is section 96D of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid because it impermissibly burdens the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution? Answer: Yes. Is section 95G(6) of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid because it impermissibly burdens the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution? Answer: Yes. Do sections 7A and 7B of the Constitution Act 1902 (NSW) give rise to an entrenched protection of freedom of communication on New South Wales State government and political matters? Answer: Unnecessary to answer. If so, is section 96D of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid because it impermissibly burdens that freedom, contrary to the New South Wales Constitution? Answer: Unnecessary to answer. Further, if the answer to question 3 is "yes", is section 95G(6) of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid because it impermissibly burdens that freedom, contrary to the New South Wales Constitution? Answer: Unnecessary to answer. Is section 96D of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid under section 109 of the Commonwealth Constitution by reason of it being inconsistent with section 327 of the Commonwealth Electoral Act 1918 (Cth)? Answer: Unnecessary to answer. Is section 96D of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid under section 109 of the Commonwealth Constitution by reason of it being inconsistent with Part XX of the Commonwealth Electoral Act 1918 (Cth)? Answer: Unnecessary to answer. Is section 96D of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid because it impermissibly burdens a freedom of association provided for in the Commonwealth Constitution? Answer: Unnecessary to answer. 9. Who should pay the costs of the Special Case? Answer: The defendant.

HIGH COURT OF AUSTRALIA AUSTRALIAN COMPETITION AND CONSUMER COMMISSION APPELLANT AND CG BERBATIS HOLDINGS PTY LTD & ORS RESPONDENTS Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd [2003] HCA 18 9 April 2003 ORDER Appeal dismissed with costs. On appeal from the Federal Court of Australia Representation: N W McKerracher QC with E C Gordon for the appellant (instructed by Australian Government Solicitor) D F Jackson QC with P G Clifford for the first to sixth respondents (instructed by Haydn Robinson) N C Hutley SC with N Perram for the seventh and eighth respondents (instructed Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd Trade practices – Unconscionable conduct – Trade Practices Act 1974 (Cth), s 51AA(1) – Where conduct was in a commercial context – Condition for renewal of lease – Required by lessor – Lessees to abandon legal claims against lessor – Whether conduct of lessor unconscionable. Equity – Unconscionable conduct – Where conduct was in a commercial context – Condition for renewal of lease – Required by lessor – Lessees to abandon legal claims against lessor – Whether unconscientious exploitation of special disadvantage of another – Relevance of inequality of bargaining power to finding of special disadvantage. Words and phrases – "unconscionable within the meaning of the unwritten law", "special disadvantage". Trade Practices Act 1974 (Cth), s 51AA(1). GLEESON CJ. The facts are set out in the reasons for judgment of Gummow and Hayne JJ. The case concerns the application of s 51AA of the Trade Practices Act 1974 (Cth) ("the Act") to those facts. The specific question is whether the lessors of premises in a shopping centre engaged in conduct that was "unconscionable within the meaning of the unwritten law" in stipulating, as a condition of their consent to a proposed renewal or extension of a lease, in contemplation of its assignment, a requirement that the lessees would abandon certain claims against them. The lessees were in a difficult bargaining position. They had no option to renew their lease. Their prospects of making an advantageous sale of their business depended upon the co-operation of the lessors, which they were not obliged to give. Considered objectively, and with the benefit of hindsight, the claims that the lessees agreed to abandon were of little value (less than $3,000). They regarded them as more valuable, but considered that in the circumstances, they had no choice but to give them up. The principal reason why they had no such choice was that they had no option to renew their lease. They could not offer a purchaser of their business a worthwhile tenure unless the lessors agreed to an extension or renewal of the lease and an assignment. The lessors were willing to give such agreement only on the condition already mentioned. It may be noted that, although the appellant, the Australian Competition and Consumer Commission, claims that the lessors' conduct was unconscionable, the lessees never sought to have the deed they entered into with the lessors set aside. That would have been the last thing they wanted. Whether they might have had cl 14 of the deed set aside, assuming there had been unconscionable conduct on the part of the lessors, is a question that does not arise1. The issue is whether the conduct of the lessors was unconscionable. French J held that it was2. The Full Court of the Federal Court (Hill, Tamberlin and Emmett JJ) reversed that decision3. For the reasons that follow, I consider that the Full Court was correct. It was not contended that the proper course for the lessors to follow, consistently with their obligations under the Act, was simply to have no dealings at all with the lessees, but to allow their lease to expire and to find a new tenant. That would have been an unwelcome (and costly) outcome for the lessees. It cf Bridgewater v Leahy (1998) 194 CLR 457 at 472-474 [50]-[56]. 2 Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (2000) ATPR ¶41-778. 3 C G Berbatis Holdings Pty Ltd v Australian Competition and Consumer Commission (2001) 185 ALR 555. would be surprising if it were the policy of the Act to require the lessors to take that course, to the minor disadvantage of the lessors and the major disadvantage of the lessees. The practical consequence of the argument for the appellant is that the lessors, having been requested to agree to something they were entitled to refuse, were acting in contravention of the Act by imposing a condition upon their agreement. Yet if that be correct, it seems to mean that the lessors, if well advised, should simply have refused to discuss the matter of a renewal or extension of the lease. Although he was concerned to make the point that ss 51AB and 51AC of the Act have a wider operation than s 51AA, senior counsel for the appellant argued the case on the basis that the relevant form of unconscionable conduct in question was "the knowing exploitation by one party of the special disadvantage of another." He said that, by special disadvantage, he meant "a disabling circumstance seriously affecting the ability of the innocent party to make a judgment in [that party's] own best interests." Applied to a case such as the present, that approach is consistent with what the Act calls the unwritten law concerning unconscionable conduct, bearing in mind that the Act also allows for development of the law from time to time. It is also consistent with the legislative history of s 51AA. In the Second Reading speech when the legislation was introduced, it was said4: "Unconscionability is a well understood equitable doctrine, the meaning of which has been discussed by the High Court in recent times. It involves a party who suffers from some special disability or is placed in some special situation of disadvantage and an 'unconscionable' taking advantage of that disability or disadvantage by another. The doctrine does not apply simply because one party has made a poor bargain. In the vast majority of commercial transactions neither party would be likely to be in a position of special disability or special disadvantage, and no question of unconscionable conduct would arise. Nevertheless, unconscionable conduct can occur in commercial transactions and there is no reason why the Trade Practices Act should not recognise this." The Explanatory Memorandum referred to the decisions of this Court in Blomley v Ryan5 and Commercial Bank of Australia Ltd v Amadio6. Those decisions were considered more recently in Bridgewater v Leahy7. 4 Australia, House of Representatives, Parliamentary Debates (Hansard), 3 November 1992 at 2408. (1956) 99 CLR 362. (1983) 151 CLR 447. (1998) 194 CLR 457. These decisions mark out the area of discourse involved, and explain the approach of the appellant, which was accepted by the respondent. It was also the approach taken by French J, and by the Full Court. In the context of s 51AA, with its reference to the unwritten law, which is the law expounded in such cases as those mentioned above, unconscionability is a legal term, not a colloquial expression. In everyday speech, "unconscionable" may be merely an emphatic method of expressing disapproval of someone's behaviour, but its legal meaning is considerably more precise. In Blomley v Ryan8, Fullagar J, after pointing out that the circumstances of disability or disadvantage that can be involved in unconscionable conduct are of great variety and are difficult to classify, gave, as examples, "poverty or need of any kind, sickness, age, sex, infirmity of body or mind, drunkenness, illiteracy or lack of education, lack of assistance or explanation where assistance or explanation is necessary." The common characteristic of such circumstances is that they place one party at a serious disadvantage in dealing with the other. In the present case, French J said that the lessees suffered from a "situational" as distinct from a "constitutional" disadvantage, in that it did not stem from any inherent infirmity or weakness or deficiency. That idea was developed somewhat in a joint judgment, to which French J was a party, in Australian Competition and Consumer Commission v Samton Holdings Pty Ltd9, where it was said that, under the rubric of unconscionable conduct, equity will set aside a contract or disposition resulting from the knowing exploitation by one party of the special disadvantage of another, and then it was said: "The special disadvantage may be constitutional, deriving from age, illness, poverty, inexperience or lack of education: Commercial Bank of Australia Ltd v Amadio. Or it may be situational, deriving from particular features of a relationship between actors in the transaction such as the emotional dependence of one on the other: Louth v Diprose; Bridgewater v Leahy". While, with respect to those who think otherwise, I would not assign the facts of Bridgewater v Leahy to such a category, the reference to emotional dependence of the kind illustrated by Louth v Diprose10 as a form of special disadvantage described as "situational" understandable and acceptable, provided that such descriptions do not take on a than "constitutional" rather (1956) 99 CLR 362 at 405. (2002) 117 FCR 301 at 318. 10 (1992) 175 CLR 621. life of their own, in substitution for the language of the statute, and the content of the law to which it refers. There is a risk that categories, adopted as a convenient method of exposition of an underlying principle, might be misunderstood, and come to supplant the principle. The stream of judicial exposition of principle cannot rise above the source; and there is nothing to suggest that French J intended that it should. A problem is that the words "situation" and "disadvantage" have ordinary meanings which, in combination, extend far beyond the bounds of the law referred to in s 51AA; and, it may be added, far beyond the bounds of what was explained to Parliament as the purpose of the section. One thing is clear, and is illustrated by the decision in Samton Holdings itself. A person is not in a position of relevant disadvantage, constitutional, situational, or otherwise, simply because of inequality of bargaining power. Many, perhaps even most, contracts are made between parties of unequal bargaining power, and good conscience does not require parties to contractual negotiations to forfeit their advantages, or neglect their own interests. In Amadio, Mason J11 said that the point of using the qualifying word "special" before "disadvantage" in this context is "to disavow any suggestion that the principle applies whenever there is some difference in the bargaining power of the parties and in order to emphasize that the disabling condition or circumstance is one which seriously affects the ability of the innocent party to make a judgment as to his own best interests". It was the inability of a party to judge his or her own best interests that was said by McTiernan J in Blomley v Ryan12, and again by Deane J in Amadio13, to be the essence of the relevant weakness. The adjective "special" was also used by Kitto J in Blomley v Ryan14 when he referred to the "well-known head of equity" invoked in that case. He said: "It applies whenever one party to a transaction is at a special disadvantage in dealing with the other party because illness, ignorance, inexperience, impaired faculties, financial need or other circumstances affect his ability to conserve his own interests, and the other party unconscientiously takes advantage of the opportunity thus placed in his hands." (1983) 151 CLR 447 at 462. 12 (1956) 99 CLR 362 at 392. 13 (1983) 151 CLR 447 at 476-477. 14 (1956) 99 CLR 362 at 415. Unconscientious exploitation of another's inability, or diminished ability, to conserve his or her own interests is not to be confused with taking advantage of a superior bargaining position. There may be cases where both elements are involved, but, in such cases, it is the first, not the second, element that is of legal consequence. It is neither the purpose nor the effect of s 51AA to treat people generally, when they deal with others in a stronger position, as though they were all expectant heirs in the nineteenth century, dealing with a usurer15. In the present case, there was neither a special disadvantage on the part of the lessees, nor unconscientious conduct on the part of the lessors. All the people involved in the transaction were business people, concerned to advance or protect their own financial interests. The critical disadvantage from which the lessees suffered was that they had no legal entitlement to a renewal or extension of their lease; and they depended upon the lessors' willingness to grant such an extension or renewal for their capacity to sell the goodwill of their business for a substantial price. They were thus compelled to approach the lessors, seeking their agreement to such an extension or renewal, against a background of current claims and litigation in which they were involved. They were at a distinct disadvantage, but there was nothing "special" about it. They had two forms of financial interest at stake: their claims, and the sale of their business. The second was large; as things turned out, the first was shown to be relatively small. They had the benefit of legal advice. They made a rational decision, and took the course of preferring the second interest. They suffered from no lack of ability to judge or protect their financial interests. What they lacked was the commercial ability to pursue them both at the same time. Good conscience did not require the lessors to permit the lessees to isolate the issue of the lease from the issue of the claims. It is an everyday occurrence in negotiations for settlement of legal disputes that, as a term of a settlement, one party will be required to abandon claims which may or may not be related to the principal matter in issue. French J spoke of the lessors using "[their] bargaining power to extract a concession [that was] commercially irrelevant to the terms and conditions of any proposed new lease." A number of observations may be made about that. Parties to commercial negotiations frequently use their bargaining power to "extract" concessions from other parties. That is the stuff of ordinary commercial dealing. What is relevant to a commercial negotiation is whatever one party to the negotiation chooses to make relevant. And it is far from self- evident that when a landlord is considering a tenant's request to renew a lease, the existence of disputes between the parties about the current lease is commercially irrelevant to a decision as to whether, and on what terms, the landlord will agree to the request. The reasoning of French J appears to involve a judgment that it was wrong for the lessors to relate the matter of the lessees' claims to the matter 15 cf Snell's Equity, 30th ed (2000) at 621-622. of their request for a renewal of the lease. Why this is so was not explained. It formed a crucial part of the reasoning of French J and, in my view, cannot be sustained. Reference was earlier made to counsel's submission that there was here a disabling circumstance affecting the ability of the lessees to make a judgment in their own best interests. In truth, there was no lack of ability on their part to make a judgment about anything. Rather, there was a lack of ability to get their own way. That is a disability that affects people in many circumstances in commerce, and in life. It is not one against which the law ordinarily provides relief. In the course of their reasoning on the contentions advanced by the in distinguishing between driving a hard bargain and appellant, and unconscionable conduct, the members of the Full Court, in a single sentence, remarked that it could not be said that the will of the lessees was overborne, or that they did not act independently and voluntarily. In the context, I would not understand that to indicate that their Honours thought that unconscionability required duress. It was simply an observation of fact as to part of the context in which the issue of unconscionability arose. The conclusion of the Full Court of the Federal Court was correct. The appeal should be dismissed with costs. GUMMOW AND HAYNE JJ. This appeal from the Full Court of the Federal Court (Hill, Tamberlin and Emmett JJ)16 turns upon the application of Pt IVA of the Trade Practices Act 1974 (Cth) ("the Act") to a dispute concerning the renewal of a lease of premises in a shopping centre on terms that required the tenants to withdraw pending legal proceedings against the landlords. The Full Court reversed the decision of the primary judge (French J)17 and found against the tenants. The facts The shopping centre is known as "Farrington Fayre" and is located at Farrington Road, Leeming in Western Australia ("the Centre"). The first to fourth respondents ("Berbatis Holdings", "GPA", "P & G Investments" and Mr Atzemis) ("the owners") are the registered proprietors as tenants in common of the land on which the Centre stands. The business of the Centre is conducted by the owners as partners. The fifth respondent (Mr Berbatis) is a director of Berbatis Holdings and the sixth respondent (Ms Heijne) is a director of P & G Investments. The seventh and eighth respondents ("Sullivan Property" and Mr Sullivan), who were separately represented, were respectively a company engaged to provide services as asset manager and a director thereof. At all relevant the owners respecting negotiations concerning leases with the tenants at the Centre. The Centre comprises some 26 leased premises. Mr and Mrs Roberts in their capacity as trustees of the Roberts Family Trust leased shop 14 at which they conducted a business styled "Leeming Fish Supply". Mr and Mrs Roberts had purchased the fish and chip shop business with effect from 1 October 1989. The previous owner had conducted the business for approximately two and a half years and Mr and Mrs Roberts took an assignment of the remainder of the lease. Thereafter, in June 1992, they exercised a five year option, with the result that the term of the lease was extended until 14 February 1997. For approximately five years, Mrs Roberts had been the proprietor of small businesses in the United Kingdom, including a florist and a fruit and vegetable shop. She also had managed a number of other businesses over some 15 years. After moving to Australia, she had been involved in management roles 16 C G Berbatis Holdings Pty Ltd v Australian Competition and Consumer Commission (2001) 185 ALR 555. 17 Australian Competition & Consumer Commission v C G Berbatis Holdings Pty Ltd (2000) ATPR ¶41-778. in a number of companies. She gave evidence of her belief that she had "very good business management experience". In 1990, a number of tenants at the Centre, including Mr and Mrs Roberts, became concerned at some of the charges levied under the terms of their leases. Legal advice was sought and a "fighting fund" was established. In January 1996, proceedings were instituted by Ms Donna Clark, who operated at the Centre a business styled "Gifts R Us", and other tenants against the owners in the Commercial Tribunal of Western Australia ("the Tribunal"), a body established under the Commercial Tribunal Act 1984 (WA). The Tribunal has jurisdiction conferred by s 24 of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) ("the Commercial Tenancy Act") to hear and determine various disputes under that statute. The Roberts (and other tenants) held a "retail shop lease" to which the Commercial Tenancy Act applied. On 13 December 1996, the Tribunal delivered a decision in a "test case" in which one of the tenants, John Hender Real Estate Pty Ltd ("Hender"), was partially successful. The owners and the tenant both filed appeals in the District Court of Western Australia. Thereafter, by consent, an order was made in the District Court quashing the Tribunal decision and remitting the matter for rehearing. On 1 April 1997 (whilst the Roberts were in negotiations with the owners respecting renewal of their lease), Hender commenced proceedings in the Supreme Court of Western Australia claiming declarations and damages against the owners in relation to matters similar to those the subject of the proceedings which had been brought in the Tribunal. The Supreme Court proceedings were settled in November 1998 on terms which involved repayments to tenants up to a maximum of $3,898 for any one tenant. Had the Roberts participated in the settlement, they would have been entitled to $2,429.50 by way of refund of management fees and $356.93 in respect of variable outgoings. Section 10(1) of the Commercial Tenancy Act stated: "Notwithstanding any other written law, a retail shop lease shall be taken to grant to the tenant a right to assign the lease, subject only to a right of the landlord to withhold consent to an assignment on reasonable grounds." The retail shop lease held by Mr and Mrs Roberts for the fish shop was for a term to expire on 14 February 1997. The Roberts had made it known to the manager of the Centre that they were anxious to sell their business and that if they could negotiate a new lease term, which they could then assign to the purchaser, that would assist them. A purchaser, Mr Holland, on 28 October 1996, signed an offer to purchase the business for $65,500, subject to a lease of the premises being assigned to his satisfaction. estimated approximately $50,000 alleged overpayments which she and her husband were interested in recovering from the owners. The owners required the inclusion in a proposed deed of assignment of cl 14 whereby the Roberts and Mr Holland would discharge the owners from all claims arising from any act or omission by the owners prior to the proposed assignment date and Mr and Mrs Roberts would consent to the dismissal of any current legal proceedings against the owners. Mrs Roberts' solicitor advised her on 2 December 1996 not to sign a document including cl 14. French J made a finding18: the "In the event, after consideration, Mrs Roberts decided that she had little option but to sign the documents. Her lease was due to expire on 14 February 1997. There was no prospect of renewal and without that she would have no business to sell. She believed she had no choice but to sign the deed as it was. She then decided to sign the deed and did so. She felt extremely upset and angry that [the managing agent] and the owners had, in her view, put her in a situation where she had no choice but to give up her legal rights." The settlement of the sale took place on 2 December 1996. Mr Holland took possession of the business and subsequently traded in a "viable position". Notwithstanding the provisions of cl 14, the Roberts did not withdraw from the then current litigation against the owners and continued to contribute to the costs involved. The ACCC litigation In subsequent litigation instituted in the Federal Court on 3 April 1998, the Australian Competition and Consumer Commission ("the ACCC") alleged that the imposition by the owners of conditions requiring withdrawal by Mr and Mrs Roberts of their participation in the pending legal proceedings as a condition of the grant of a new lease contravened Pt IVA of the Act. A case also was presented under Pt V of the Act, in particular s 52, of misleading or deceptive conduct. This related to alleged representations made in the course of negotiations with the Roberts that the owners would not require them, as a condition of obtaining a new lease, to withdraw from the legal action against the owners. In particular, disputed evidence was given respecting a conversation with Mrs Roberts in October 1996. French J was not prepared to find that the representations had been made so the claim of contravention of s 52 failed. The ACCC's case also included allegations respecting the treatment of other tenants but French J held that no case of contravention of s 51AA or s 52 was made 18 (2000) ATPR ¶41-778 at 41,184. out19. The Full Court and this Court have been concerned only with the position of the Roberts. With respect to the Roberts, French J granted declaratory relief that the various respondents, either directly or as parties knowingly concerned, had contravened s 51AA of the Act; the conduct declared to be unconscionable within the meaning of the section was the requirement as a condition of the grant of a new lease to Mr and Mrs Roberts that they release the owners of the Centre from various claims arising under their existing lease. His Honour also ordered that the individual, as distinct from the corporate, respondents attend a trade practices compliance seminar conducted by a specialist in trade practices law where the unconscionable conduct provisions of the Act, and in particular s 51AA, were addressed. His Honour declined to order the injunctive relief sought by the ACCC. An appeal to the Full Court succeeded and in place of the relief granted by the primary judge the Full Court ordered that the application be dismissed with costs. Part IVA of the Act Before considering the issues which arise on the appeal, it is convenient to return to Pt IVA of the Act. Part IVA was added by s 9 of the Trade Practices Legislation Amendment Act 1992 (Cth) ("the 1992 Act"). Part IVA since has been amended, by the Trade Practices Amendment (Fair Trading) Act 1998 (Cth), in particular by the insertion of s 51AC (headed "Unconscionable conduct Section 51AC(3) lists in pars (a)-(k) various in business transactions"). circumstances to which regard may be had in determining whether there has been a contravention of that section and does not rely simply upon "the unwritten law". At the relevant time for this litigation, Pt IVA comprised ss 51AA-51AB. Section 51AA stated: "(1) A corporation must not, in trade or commerce, engage in conduct that is unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories. section 51AB." This section does not apply to conduct that is prohibited by The latter provision forbade corporations, in trade or commerce, from engaging in conduct in connection with the supply or possible supply of goods or services 19 (2000) ATPR ¶41-778 at 41,199-41,200. to a person which, in all the circumstances, was unconscionable. It is accepted that the conduct complained of in this litigation, whilst in trade or commerce, was not conduct prohibited by s 51AB. The result was that the dispute turned entirely upon s 51AA(1). The remedies for contravention of Pt IVA were found in Pt VI of the Act. Injunctive relief might be granted under s 80 and other orders made under s 87. Section 82 did not allow recovery of damages in respect of contravention of Pt IVA but some pecuniary remedies would appear to have been available under par (d) of s 87(2). The powers to prohibit payment or transfer of money or other property by order under s 87A applied to Pt IVA proceedings. The provisions in s 76 for the recovery of pecuniary penalties did not apply. Standing to institute and maintain proceedings was conferred upon the ACCC by various provisions, in particular by ss 80 and 87. The validity of s 51AA was called into question before the primary judge20. Full argument was heard by his Honour on the matter and the validity of the provision was upheld21. In this Court, no question arises respecting the validity of s 51AA. Rather, the issues concern the construction of the provision and its application to the facts concerning the Roberts. The construction of s 51AA The Full Court drew a distinction between parties adopting "an those who act to strike a hard bargain" and opportunistic approach unconscionably within the meaning of the section22. Their Honours added23: "It cannot be said that the Roberts' wills were so overborne that they did not act independently and voluntarily. Unfortunately for the Roberts, the owners were under no obligation to renew or extend their lease. The Roberts had the choice of either maintaining their legal claims against the owners and losing the opportunity to sell their business or abandoning their claims and gaining the opportunity to sell their business. They made 20 Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (1999) 95 FCR 292. 21 Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (No 2) (2000) 96 FCR 491. 22 (2001) 185 ALR 555 at 571. 23 (2001) 185 ALR 555 at 571. that choice of abandoning their claims. That may have been a hard bargain, but it was not an unconscionable one." (emphasis added) The ACCC submits that the Full Court was in error to construe s 51AA as requiring that the will of the individual in question be so overborne as to deny to what was done the nature of an independent and voluntary act. That submission should be accepted. What was said by the Full Court reflects notions associated with common law duress and the defence of non est factum rather than unconscionable conduct24. Counsel for the owners did not seek to uphold this approach to the construction of the section. Counsel for all respondents submitted, and counsel for the ACCC did not really demur, that the litigation had been pleaded and conducted on the footing that the expression "engage in conduct that is unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories" was to be understood with reference to the equitable doctrine expounded, in particular, by this Court in Commercial Bank of Australia Ltd v Amadio25. The respondents submitted that the result in the Full Court should be upheld and that the application should have been dismissed by the primary judge because the facts found fell short of circumstances which would attract the operation of the principles expounded in Amadio. The ACCC submitted to the contrary but the submissions for the respondents should be accepted. The parties, correctly, accept that the term "unconscionable" is not used in s 51AA in any sense which is at large or reflects an ordinary or natural meaning in general usage. That is plain from the identification in s 51AA of "the meaning" given by "the unwritten law, from time to time". The identification thus made is the principles of law and equity expounded from time to time in decisions respecting the common law of Australia. It is now settled that there is but one Australian common law and the reference in the section to "the unwritten law ... of the States and Territories" must be read in that way26. French J held that the phrase in question "can only be taken as a reference to the common law 24 Barton v Armstrong [1976] AC 104 at 118-119; Bridgewater v Leahy (1998) 194 CLR 457 at 475-476 [65], 477-478 [73], 491-492 [118]-[119]; "R" v Her Majesty's Attorney-General for England and Wales [2003] UKPC 22 at [15]-[16]. 25 (1983) 151 CLR 447. 26 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520; Lipohar v The Queen (1999) 200 CLR 485; John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR of Australia, a single body of judge-made law"27, and the contrary has not been suggested in submissions to this Court. "The concept of unconscionability is arguably to be found at two levels in the unwritten law. There is a generic level which informs the fundamental principle according to which equity acts. There is the specific level at which the usage of 'unconscionability' is limited to particular categories of case. The Explanatory Memorandum [to the Bill for the 1992 Act] suggests that it is the latter sense that was intended – defined by reference to Blomley v Ryan[29] and Commercial Bank of Australia [Ltd] v Amadio[30]." The relevant passage in the Explanatory Memorandum said of s 51AA that it embodied "the equitable concept of unconscionable conduct as recognised by the High Court" in those two cases31. The reference by his Honour to the use in s 51AA of the term "conduct that is unconscionable within the meaning of the unwritten law" as identifying particular categories of case should be accepted as indicating the proper construction of s 51AA. The argument on the present appeal of all parties appeared to proceed on that footing. However, there then arises the question as to which particular manifestations of equity's concern with unconscientious or unconscionable conduct are reached by s 51AA. The issue is an important one because s 51AA does more than re-enact for application in trade and commerce the general law principles concerned. Contravention of s 51AA attracts particular remedies under the Act which may not otherwise be available and provides, as this case illustrates, for litigation to be instituted and conducted by a public body, the ACCC. In The Commonwealth v Verwayen32, Deane J referred to the use of the terms "unconscientious" and "unconscionable" in "areas where equity has 27 (2000) 96 FCR 491 at 502. 28 (2000) 96 FCR 491 at 502. 29 (1956) 99 CLR 362. 30 (1983) 151 CLR 447. 31 (2000) 96 FCR 491 at 495. 32 (1990) 170 CLR 394 at 446. traditionally intervened to vindicate the requirements of good conscience". Later, in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd33, Gleeson CJ observed that, whilst it may be appropriate to identify as "unconscientious" engagement in conduct enjoined by injunction: "that leaves for decision the question of the principles according to which equity will reach that conclusion. The conscience of the [defendant], which equity will seek to relieve, is a properly formed and instructed conscience." His Honour added that the real task was to decide what a properly formed and instructed conscience would have to say about the conduct sought to be enjoined. The term "unconscionable" The term "unconscionable" is used as a description of various grounds of equitable intervention to refuse enforcement of or to set aside transactions which offend equity and good conscience. The term is used across a broad range of the equity jurisdiction. Thus, a trustee of a settlement who misapplies the trust fund and the fiduciary agent who makes and withholds an unauthorised profit may properly be said to engage in unconscionable conduct. The relief given by equity against the imposition of monetary penalties and the forfeiture of proprietary interests has been said to reflect the attitude of equity to overreaching and unconscionable dealing34, as well as to accident, mistake and surprise35. The remedy of rescission may reflect the characterisation as unconscionable of the conduct of the party seeking to hold the plaintiff to a contract entered into under the influence of innocent misrepresentation36 or unilateral mistake37. Again, the various doctrines and remedies in the field of estoppel, at a general level, may be said to overcome the unconscionable conduct involved in resiling from the representation or expectation induced by the party estopped. 33 (2001) 208 CLR 199 at 227 [45]. 34 Stern v McArthur (1988) 165 CLR 489 at 526-527; Ashburner's Principles of Equity, 2nd ed (1933) at 262; Pomeroy's Equity Jurisprudence, 5th ed (1941), 35 Shiloh Spinners Ltd v Harding [1973] AC 691 at 722. 36 Redgrave v Hurd (1881) 20 Ch D 1 at 12-13; Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 at 535-536 [117]. 37 Taylor v Johnson (1983) 151 CLR 422 at 430-433. It will be unconscientious for a party to refuse to accept the position which is required by the doctrines of equity. But those doctrines may represent, as the above examples indicate, the outcome of an interplay between various themes and values of concern to equity. The present editor of Snell has noted the use of the terms "unconscionable" and "unconscientious" "in areas as diverse as the nature of trusteeship and the doctrine of laches"; he rightly observed that "this may have masked rather than illuminated the underlying principles at stake"38. In GPG (Australia Trading) Pty Ltd v GIO Australia Holdings Ltd39, Gyles J expressed the view that unconscionable or unconscientious conduct is only one element of the doctrine of equitable estoppel. His Honour rejected the submission that s 51AA of the Act was concerned with a general doctrine of is recognised by equity and encompasses all unconscionability which circumstances where behaviour which can be described as unconscionable plays a part in the entitlement to relief. On the other hand, in his judgment dealing with the challenge to the validity of s 51AA, French J concluded40: "[T]he concept of unconscionable conduct 'within the meaning of the unwritten law' is presently confined in its operation by reference to specific doctrines. Nevertheless the cases indicate that its use is a matter of taxonomy which may be subject to substantial change. As Hardingham has suggested41: '... the boundaries between traditional heads of intervention against unconscionable behaviour – specifically between common law duress and actual undue influence or pressure, between presumed undue influence and unconscionable dealing as such – are shifting. Lines of demarcation are not now as clearly defined as they may have been in the past. As a consequence, the traditional heads themselves may be ready for some redefinition or [rationalisation].' In considering the contention that 'unconscionable conduct within the meaning of the unwritten law' in s 51AA refers to some kind of legal dictionary, it is important to observe that it has no settled technical meaning. It is, as Mahoney JA[42] said, 'better described than defined'. It 38 McGhee (ed), Snell's Equity, 30th ed (2000), Preface. 39 (2001) 117 FCR 23 at 77. 40 (2000) 96 FCR 491 at 501-502. 41 "Unconscionable Dealing", in Finn (ed), Essays in Equity, (1985) 1 at 2. 42 Antonovic v Volker (1986) 7 NSWLR 151 at 165. offers a standard determined by judicial decision-making rather than a rule, albeit it may for the present be subject to limitation in its factual field of operation by the existence of specific doctrines." This appeal may be decided without choosing between the differing emphases in the views expressed by Gyles J and French J respecting the present state of equitable doctrine and thus the reach of s 51AA. Nor need this Court now determine whether the section is limited to matters of equitable doctrine so as, for example, to exclude developments in the common law respecting principles of duress. For example, in Crescendo Management Pty Ltd v Westpac Banking Corporation43, McHugh JA considered, with reference to English authority, what has come to be called "economic duress". His Honour said44 that pressure will be illegitimate "if it consists of unlawful threats or amounts to unconscionable conduct". Again, it will be recalled that, in Muschinski v Dodds45, Deane J referred to the "general equitable notions" respecting unconscionable conduct which have found "expression in the common law count for money had and received". It is unnecessary to resolve these questions concerning the reach of s 51AA because, as remarked earlier in these reasons, and consistently with what had been said in the Explanatory Memorandum, the litigation was conducted on the footing that the facts fell within that well-established area of equitable principle concerned with the setting aside of transactions where unconscientious advantage has been taken by one party of the disabling condition or circumstances of the other. In such situations, and as will be further discussed below, equity intervenes not necessarily because the complainant has been deprived of an independent judgment and voluntary will, but because that party has been unable to make a worthwhile judgment as to what was in the best interests of that party. The reasoning of the primary judge The reasoning of the primary judge which led his Honour to find in favour of the ACCC in respect of the complaints respecting the Roberts was introduced in the following passage46: 43 (1988) 19 NSWLR 40. 44 (1988) 19 NSWLR 40 at 46. 45 (1985) 160 CLR 583 at 619-620. See also Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516 at 525-526 [16], 554-555 [100]. 46 (2000) ATPR ¶41-778 at 41,196-41,197. "The Roberts as lessees of Shop 14 operated a small business, the Leeming Fish Supply, the value of which to any prospective purchaser was critically dependent upon the length and security of the tenure of the premises which the Roberts could convey to that purchaser at settlement. At the time that they first negotiated with Mr Holland between March and May 1996, they had less than twelve months of their lease to run. A mere assignment of the balance of the term, to which they were entitled by virtue of the provisions of the Commercial Tenancy Act, could not secure for Mr Holland a tenancy of the length necessary to make his investment worthwhile. So the sale of the business was dependent upon the owners' willingness to grant a new lease. They were under no obligation to do so. Neither the Roberts nor Mr Holland were actually or potentially large tenants. They were actual and prospective small business operators. The Roberts, in particular, had little bargaining power when it came to dealing with the owners. There was a marked inequality of bargaining power between them. The Roberts suffered what might be called a 'situational' as distinct from a 'constitutional' disadvantage. That is to say it did not stem from any inherent infirmity or weakness or deficiency. It arose out of the intersection of the legal and commercial circumstances in which they found themselves. That disadvantage, not being constitutional in character, was not able to be mitigated by the fact of legal representation which they had available to them at all material times." The distinction drawn by French J between "situational" and "constitutional" disadvantages was important for his reasoning. In particular, it was because the disadvantage identified by his Honour was of the former rather than the latter character that no particular significance attached to the availability to Mrs Roberts of independent legal advice, which she received but chose not to follow. French J continued by saying that47: "the circumstances in which a business operator on a lease may effectively lose the value of that business upon expiry of the lease does place the tenant at a special disadvantage in dealing with the owner". Whilst this did not import any obligation of renewal, a question arose whether the owner unfairly exploited the disadvantage of the tenant in a fashion regarded by equity as unconscionable. His Honour continued48: 47 (2000) ATPR ¶41-778 at 41,197. 48 (2000) ATPR ¶41-778 at 41,197. "Unfair exploitation of disadvantage amounting to unconscionable conduct may occur when an owner uses its bargaining power to extract a concession from the tenant that is commercially irrelevant to the terms and conditions of any proposed new lease." The respondents criticise the use in this context of the phrase "commercially irrelevant". The evidence was that it was important to the owners and their advisers that cl 14 be included, so much so that without it they were not prepared to renew the lease. In that setting, for a court to suggest that concern was a commercial irrelevance falsely suggests the availability to the court of some objective criterion of relevance which may override the attitude taken by the owners. The critical passage in which French J formulated his conclusions was as follows49: "In my opinion for the owners to insist, as they did through Mr Sullivan in this case, upon the Roberts abandoning their rights to proceed with bona fide litigation in relation to their rights under their existing lease was to engage in unconscionable conduct. The claims that they, in common with other tenants, were raising against the owners were bona fide and serious. They were taken seriously by both the tenants and by the owners." His Honour added that it was of no consequence that the detriment suffered by the Roberts may have been small in monetary terms; there had been an exploitation of the vulnerability of the Roberts in relation to the sale of their business which was "grossly unfair". French J also referred to the personal circumstances of the Roberts, saying50: "Whether or not [the owners] had personal knowledge of the circumstances of the Roberts, they were fixed with such knowledge through that of Brian Sullivan and his company. The corporate respondents were therefore in contravention of s 51AA and the natural respondents knowingly involved in that contravention." The reference to the personal circumstances of the Roberts was primarily to a discussion in or about March 1995 between Mrs Roberts and Ms Glenda 49 (2000) ATPR ¶41-778 at 41,197. 50 (2000) ATPR ¶41-778 at 41,197. Clapp, the Centre Manager at Farrington Fayre, who was employed by the managing agent. Mrs Roberts had told Ms Clapp that she and her husband were thinking of selling the business, that their daughter was ill and required considerable attention and that both she and her husband thought it was time to get out, having been in the business long enough. Conclusions In Commercial Bank of Australia Ltd v Amadio51, Mason J referred to passages in the judgments of Fullagar J and Kitto J in Blomley v Ryan52. Mason J said53: "It is made plain enough, especially by Fullagar J, that the situations mentioned are no more than particular exemplifications of an underlying general principle which may be invoked whenever one party by reason of some condition [or] circumstance is placed at a special disadvantage vis-à-vis another and unfair or unconscientious advantage is then taken of the opportunity thereby created. I qualify the word 'disadvantage' by the adjective 'special' in order to disavow any suggestion that the principle applies whenever there is some difference in the bargaining power of the parties and in order to emphasize that the disabling condition or circumstance is one which seriously affects the ability of the innocent party to make a judgment as to his own best interests, when the other party knows or ought to know of the existence of that condition or circumstance and of its effect on the innocent party." His Honour went on to emphasise54 the need for the plaintiff seeking relief to establish the taking of unconscientious advantage of the plaintiff's disabling condition or circumstance. It will be apparent that the special disadvantage of which Mason J spoke in this passage was one seriously affecting the ability of the innocent party to make a judgment as to that party's own best interests. In the present case, the respondents emphasise that point and stress that a person in a greatly inferior bargaining position nevertheless may not lack capacity to make a judgment about that person's own best interests. The respondents submit that the facts in the present case show that Mr and 51 (1983) 151 CLR 447 at 461-463. 52 (1956) 99 CLR 362 at 405, 415. 53 (1983) 151 CLR 447 at 462. 54 (1983) 151 CLR 447 at 462-463. Mrs Roberts were under no disabling condition which affected their ability to make a judgment as to their own best interests in agreeing to the stipulation imposed by the owners for the renewal of the lease, so as to facilitate the sale by Mr and Mrs Roberts of their business. Those submissions should be accepted. In dealing with the owners for a new lease, the Roberts were in a difficult bargaining position because they had no legal right to a renewal, there having been no option bargained for and included in the subsisting lease. Nor was their situation like that of the hotel lessee considered by Waddell CJ in Eq in Bond Brewing (NSW) Pty Ltd v Reffell Party Ice Supplies Pty Ltd55. In the circumstances of that case, the lessor was estopped from terminating the defendant's lease without making a payment for the goodwill built up by the tenant and an order for possession was made in favour of the lessor only upon the lessor giving security for an amount of compensation for goodwill to be determined thereafter by the Court. However, the situation in which the Roberts were placed did not necessarily support the conclusion that they lacked the capacity to make a judgment about their best interests by agreeing to cl 14 as the price of obtaining the renewal which then would support the sale of the business to Mr Holland. The second requirement to which Mason J pointed in Amadio is the taking advantage of the alleged disadvantage. The present case was conducted on the footing that it was the imposition by the owners of cl 14 which constituted the unconscionable conduct. Much of the argument for the ACCC falls away after an understanding of what is required to constitute the necessary special disadvantage and of the conduct impugned as that requiring the inclusion of A little more should be said respecting the situations in which the owners and the Roberts were placed when the negotiations for the renewal of the lease reached their final stage. The lease held by the Roberts was not the only lease of premises at the Centre whose term was set to expire in February 1997. There was a significant number of leases which would expire at that time. Moreover, there were seven or eight vacant shops. Mr Sullivan had regarded these matters as weakening the bargaining position of the owners. The Roberts valued their rights of recovery of overpayments at $50,000. That was a significantly over- optimistic estimate. The best indication that this was so is provided by the estimated entitlement to a sum of less than $3,000 had the Roberts participated in the later settlement. On the other hand, the renewal of the lease was essential for the consummation of the sale of the business to Mr Holland for some $65,500. 55 Unreported, Supreme Court of New South Wales, 17 August 1987. There were three apparent resolutions to the impasse between the parties. First, the lease might be renewed without the inclusion of cl 14. This was unacceptable to the owners; they were not obliged to grant any renewal at all and so were at liberty to prevent that outcome and thereby deprive the Roberts of their sale proceeds. The second and third possibilities were both acceptable to the owners but, given the evidence of Mr Sullivan referred to above, the second probably was preferable. The second was renewal of the lease and inclusion of cl 14; the third was no renewal and no release of the owners by cl 14. To the Roberts, the renewal of the lease (albeit giving up the other claim later shown to be worth apparently only some $3,000) was vital to the sale of the business, making the second outcome preferable to the third. Against that background, it may not be surprising that the bargain struck reflected the second outcome. It was never the case of the ACCC that the owners were obliged to deal with the Roberts by producing the first outcome, so that the owners, consistently with s 51AA, might deal with the Roberts only to the disadvantage of the owners. To conclude that the owners "extract[ed]" the agreement by the Roberts to include cl 14, as did the primary judge, mistakes the significance of the available outcomes. The owners would not agree to renew the lease without cl 14 and were at liberty to achieve that result, as his Honour accepted. To stigmatise the second (and actual) outcome appears to favour as the preferable result the third outcome whereby the owners would have had no further dealing with the Roberts, the lease would have expired and the sale lost, but the Roberts would have later received some $3,000 at the settlement. Reference has been made to the evidence concerning the family circumstances of the Roberts. It was submitted to this Court that there was no clear basis for a finding that the knowledge of Ms Clapp, an employee of the managing agent of the Centre, respecting the illness of the daughter of the Roberts, was to be attributed to the owners. Section 84(1) of the Act would apply56. It would direct attention to the scope of the actual or apparent authority of Ms Clapp. 56 Section 84(1) stated: "Where, in a proceeding under this Part in respect of conduct engaged in by a body corporate, being conduct in relation to which section 46 or 46A or Part IVA or V applies, it is necessary to establish the state of mind of the body corporate, it is sufficient to show that a director, servant or agent of the body corporate, being a director, servant or agent by whom the conduct was engaged in within the scope of the person's actual or apparent authority, had that state of mind." It is unnecessary to embark upon that inquiry. First, the primary judge made no clear finding, saying57: "The personal circumstances of the Roberts are also relevant in so far as they were known to the owners or their agents", and that the case disclosed unconscionable conduct "[q]uite apart from that circumstance". Secondly, on the facts of this case, so far as they were found, the particular family situation, which with other matters led the Roberts to wish to sell the business rather than to seek a renewal purely for their benefit, fell short of a disabling condition or circumstance seriously affecting their ability to make a judgment as to their own best interests. Orders The appeal should be dismissed with costs. 57 (2000) ATPR ¶41-778 at 41,197. Kirby KIRBY J. Yet again the Court has before it an appeal concerning the application of the Trade Practices Act 1974 (Cth) ("the Act"). On this occasion the issue involves s 51AA of the Act which incorporates a statutory prohibition of unconscionable conduct, as such conduct is understood in the unwritten law of Australia. Yet again this Court has a choice between affording a broad and beneficial application of the relevant provision of the Act, as opposed to a narrow and restrictive one. In the proceedings at trial in the Federal Court of Australia, French J (the primary judge) found that the respondents had engaged in unconscionable conduct. As other members of this Court have found, the Full Court of the Federal Court, in allowing the appeal from his Honour's judgment, applied an excessively narrow legal criterion. Given that the relevant factual findings are undisturbed and that the primary judge did not make any error of legal principle, this Court should affirm his Honour's judgment. The facts, legislation and common ground Facts and legislation: The facts are stated in the reasons of Gummow and Hayne JJ ("the joint reasons") and of Callinan J. Also set out in other reasons are the terms of the applicable provisions of the Act and passages from the reasons of the primary judge and of the Full Court of the Federal Court, explaining the contrasting conclusions to which they respectively came. I will avoid unnecessary repetition. Common ground: There was a great deal of common ground in the appeal. I will state the main points in summary form, in order to make it clear that I have put all such matters to one side. Thus, the parties agreed that: (1) Section 51AA of the Act, whose meaning was chiefly in question in the proceedings, is a valid law of the Commonwealth. This was so despite the arguments advanced at trial that the section involved an impermissible delegation of law-making power by the Parliament to the judiciary, or an invalid attempt by a law of the Parliament to intrude into the functions of the courts responsible for making the "unwritten law"; and was unacceptably uncertain or otherwise void58. The validity issue was the subject of a separate decision on the part of the primary judge59. It was not a matter upon which special leave was granted by this Court. I will 58 cf Western Australia v The Commonwealth (Native Title Act Case) (1995) 183 CLR 373 at 484-488, concerning the Native Title Act 1993 (Cth), s 12. 59 Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (No 2) (2000) 96 FCR 491 at 504-510 [29]-[44]. Kirby assume that the decision upholding the validity of s 51AA was correct and that the section bound the respondents in the terms enacted by the Parliament. (2) The reference in s 51AA to "the unwritten law" includes a reference to the principles of equity as developed by Australian courts exercising equitable jurisdiction concerned with "unconscionable" conduct and in particular (but not limited to) the principles stated in such decisions as Blomley v Ryan60 and Commercial Bank of Australia Ltd v Amadio61. In accordance with such decisions, whatever else the section covers, it includes the case of a party to a contract who was in such a debilitated condition that there was not "a reasonable degree of equality between the contracting parties"62; where "the [party's] condition was sufficiently evident to those who were acting for the [other party] at the time to make it prima facie unfair for them to take his assent to the [impugned transaction]"63. As was said in Evans v Llewellin64, "though there was no actual fraud, it is something like fraud, for an undue advantage was taken of [the] situation". Further, "the principle applied is not one which extends sympathetic benevolence to a victim of undeserved misfortune; it is one which denies to those who act unconscientiously the fruits of their wrongdoing"65. (3) The factors relevant to determining whether the conduct of a party was unconscionable in the circumstances of a given case cannot be comprehensively catalogued. They may include the wealth or poverty of the party seeking relief, that party's means and access to independent assistance and advice, as well as the party's age, state of health, infirmity of body and mind66, and also financial and other circumstantial 60 (1956) 99 CLR 362 ("Blomley"). 61 (1983) 151 CLR 447 ("Amadio"). See the reasons of the primary judge, Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (No 2) (2000) 96 FCR 491 at 502 [23]. 62 Longmate v Ledger (1860) 2 Giff 157 at 163 [66 ER 67 at 69]. 63 Blomley (1956) 99 CLR 362 at 428 per Kitto J. 64 (1787) 1 Cox 333 at 340 [29 ER 1191 at 1194]. 65 Blomley (1956) 99 CLR 362 at 429. 66 Blomley (1956) 99 CLR 362 at 405, 415. See also Amadio (1983) 151 CLR 447 at Kirby pressures67. It is not enough that the weaker party has suffered a hard bargain. There needs to be some special disadvantage that renders the consequences of enforcing the parties' legal rights unfair to the point of offending conscience when all the circumstances are considered. (4) The advantages introduced by s 51AA of the Act include the provision, in a case in which the complaining party could have sought relief in a court exercising equitable jurisdiction, of the wide-ranging remedies available under the Act; the support of, and sometimes representation by, the Australian Competition and Consumer Commission ("the ACCC") to pursue that party's cause as a matter of principle and example; and the facility of federal jurisdiction such as the ACCC invoked in the Federal Court in these proceedings on behalf of the tenants. (5) None of the tenants in the shopping centre represented by the ACCC in the proceedings before French J, other than Mr and Mrs Roberts ("the Roberts"), was entitled to relief under the Act. The meaning and scope of unconscionable conduct in s 51AA The history of the section: A starting point for deriving the meaning and scope of the section is contextual. It is important to remember the history of the introduction of s 51AA in order to understand the legislative purpose for adding that section and a number of other provisions in a new Pt IVA of the Act dealing with "Unconscionable Conduct"68. The history of the insertion of s 51AA into the Act was recounted by the primary judge. His Honour took account of this indication of the statutory purpose69. This Court, in deciding the application of s 51AA to the facts and circumstances of this case, should likewise start from a clear appreciation of the novelty of the objects sought to be accomplished by the inclusion of the section in the Act. In interpreting the scope of a provision such as s 51AA, this Court 67 Blomley (1956) 99 CLR 362 at 415. 68 By the Trade Practices Legislation Amendment Act 1992 (Cth), s 9. Part IVA has been subsequently amended, however those amendments have no bearing on the provision invoked in the present proceedings. 69 See Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (No 2) (2000) 96 FCR 491 at 494-496 [5]-[8]. Kirby should assist so far as it properly can in furthering the attainment of those purposes70. The enactment of s 51AA of the Act followed a review of the Act by the Swanson Committee71. That Committee rejected suggestions that a general prohibition of "unfair" conduct on the part of corporations engaging in trade and commerce should be enacted. However, it accepted that a prohibition upon unconscionable conduct in such activities should be included in the Act "as a civil matter only". According to its conclusions, such facilities should be added to ensure that it was possible to deal with the problem of the general disparity of bargaining power between buyers and sellers72. The Committee recognised that unconscionable conduct involved a standard "quite apart from, and usually not encompassed by, the standards of misleading or deceptive conduct"73. The equitable doctrine of unconscionable dealing itself seeks to uphold a broader principle of ethical behaviour, whereby conduct on the part of contracting parties which falls short of fraud could still enliven equity's intervention74. It took some time for the Government and the Parliament to accept the Swanson Committee's recommendation. Initially, in 1986, s 52A was introduced into the Act prohibiting unconscionable conduct in consumer dealings. As the primary judge pointed out, before the enactment of s 51AA, a number of additional reports examined the issue of whether a similar statutory prohibition of to purely commercial dealings75. unconscionable conduct should extend Eventually, the Parliament acted. The objects of the Act and of the section: The object of the Act, as stipulated in s 2, is "to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection". The 70 Bropho v Western Australia (1990) 171 CLR 1 at 20; CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408. 71 Report of the Trade Practices Review Committee to the Minister for Business and Consumer Affairs, (1976) ("Swanson Committee Report"). 72 Swanson Committee Report, par 9.59. 73 Swanson Committee Report, par 9.60. 74 Blomley (1956) 99 CLR 362 at 429. 75 Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (No 2) (2000) 96 FCR 491 at 494-495 [7]. See also O'Brien, "The ACCC v Berbatis Litigation and Section 51AA of the Trade Practices Act 1974 (Cth)", (2002) 10 Trade Practices Law Journal 201 at 202. Kirby introduction of statutory notions of unconscionable conduct into the Act was a recognition of the advantages of the "unwritten law" doctrines in promoting fair trading. Such equitable categories developed in order to protect the integrity of the contracting process where a party is induced to act or enter a transaction due to weakness or illegitimate pressure, and does so without full information or appreciation of the extent or nature of the transaction or the way it affects that party's interests and choices. By enacting s 51AA, the Parliament adopted from the unwritten law the characterisation of conduct as unconscionable, and prohibited such conduct by corporations engaged in trade or commerce. The design of s 51AA was intended not to expand the notions of unconscionable conduct in the unwritten law but to allow the application in such circumstances of the flexible remedies available under the Act76. Yet the very fact that such a provision would facilitate more cases coming before the courts than might otherwise be the case inevitably results in a closer elaboration of the concept of unconscionable conduct in new and different factual circumstances. The present is such a case. A particular purpose of the inclusion of s 51AA in the Act was to afford more effective remedies to small operators in the marketplace, such as the Roberts. They already had access to remedies of an equitable character. However, in practice, where the stakes were comparatively low (as here) a corporation dealing with such a small player would normally be entitled to assume that it could take advantage of the comparative weakness of that player without any real fear that it would be rendered accountable in a court of law or equity. The proper approach to the section: In outlining his approach to the construction and application of s 51AA, the primary judge said, correctly in my view77: "Section 51AA prohibits corporations from engaging in conduct which is unconscionable within the meaning of the common law of Australia. The meaning of the term is found in the dictionary. Its meaning is not altered by the unwritten law. What the unwritten law does presently is to confine its operation to certain classes of case. The reference in s 51AA to the 'meaning of the unwritten law' is a reference to the classes of case in which the unwritten law will award remedies for 76 Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (No 2) (2000) 96 FCR 491 at 495 [8]; cf at 503 [25] in relation to ss 51AB and 51AC of the Act. 77 Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (No 2) (2000) 96 FCR 491 at 503-504 [26]. Kirby unconscionable conduct ... There is no distinct rule which defines such conduct. The description embodied in the word 'unconscionable' ultimately refers to the normative characterisation of conduct by a judge having jurisdiction in the relevant class of case. … [T]he rules governing the relevant application of the term 'unconscionable conduct' and therefore the application of s 51AA are judge-made rules that can change from time to time. The development of doctrine which may alter that application may occur in the judgments of the courts of the States and Territories and of the High Court and of the Federal Court in the exercise of its accrued jurisdiction. This may also occur through the exercise of jurisdiction under s 51AA which itself if valid, will become a significant source of the unwritten law." The primary judge also observed that s 51AA "uses the unwritten law to the extent that it provides for the characterisation of conduct as unconscionable and then prohibits such conduct"78. In terms of the type of conduct that would fit the description "unconscionable within the meaning of the unwritten law", the primary judge made three pertinent observations: first, that as a general proposition the object of equity's intervention is to prevent behaviour contrary to conscience, however, this does not mean that the prohibition in s 51AA encompasses all conduct that would attract the intervention of equity79; secondly, that within the meaning of the "unwritten law" the notion of unconscionable conduct has no "technical meaning" and provides "a standard determined by judicial decision-making rather than a rule"80; and thirdly that while the Explanatory Memorandum prepared in support of the clause in the Bill that became s 51AA of the Act specifically referred to the concept of unconscionable conduct explained in Blomley and Amadio, that "may turn out to have been an unduly narrow selection of case law"81. While the present appeal was substantially argued by reference to the principles of unconscionable dealing as elaborated in cases such as Blomley and 78 Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (No 2) (2000) 96 FCR 491 at 504 [28]. 79 Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (No 2) (2000) 96 FCR 491 at 498 [14]. See also Australian Consolidated Investments Ltd v England (1995) 183 LSJS 408 at 439 per Doyle CJ. 80 Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (No 2) (2000) 96 FCR 491 at 502 [21]. 81 Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (No 2) (2000) 96 FCR 491 at 495 [8]. Kirby Amadio, the reach of the section, in my view, goes further. Its full scope remains to be elaborated in this and future cases. The Full Court erred In allowing the respondents' appeal against the judgment of the primary judge, and in distinguishing the characteristics of an unconscionable bargain, the Full Court held that, in the circumstances, it could not be said that "the Roberts' wills were so overborne that they did not act independently and voluntarily"82. I agree with the joint reasons, in their criticism of this crucial part of the reasoning of the Full Court83. To the extent that the judges in the Full Court decided the appeal by reference to the foregoing criterion, they erred in law. As the joint reasons point out, the question of whether the will of the party was overborne, so that it cannot be said that that party acted voluntarily, is a consideration relevant to the doctrine of common law duress84. Nascent in the case law is the development of principles of economic duress85, upon which the parties did not seek to rely in this case. The quality of the consent (or assent) of the weaker party and the extent to which it acted independently and voluntarily is also relevant to the equitable principles of undue influence86. While circumstances involving those "unwritten law" doctrines may fall within the scope of s 51AA, the criterion of the section is not so narrowly confined. Before this Court, the respondents did not submit otherwise. In cases where unconscionable dealing is relied upon, equity will provide relief where, even if the act of the weaker party is independent and voluntary, it "is the result of the disadvantageous position in which he is placed and of the other party unconscientiously taking advantage of that position"87. The 82 C G Berbatis Holdings Pty Ltd v Australian Competition and Consumer Commission (2001) 185 ALR 555 at 571 [81]. 83 The joint reasons at [35]-[36]. 84 The joint reasons at [36]. 85 Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40 at 46 per McHugh JA; cf Equiticorp Finance Ltd (In Liq) v Bank of New Zealand (1993) 32 NSWLR 50 at 107. See also Parras Holdings Pty Ltd v Commonwealth Bank of Australia unreported, Federal Court of Australia, 24 October 1997 at 99, 127-129 per Davies J; Clough, "Trends in the Law of Unconscionability", (1999) 18 Australian Bar Review 34 at 46-49. 86 Amadio (1983) 151 CLR 447 at 461 per Mason J, 474 per Deane J. 87 Amadio (1983) 151 CLR 447 at 461 per Mason J; see also at 474 per Deane J. Kirby demonstrated error of the Full Court therefore requires that the appeal of the ACCC to this Court must be upheld unless this Court concludes, on its own review of the facts and of the applicable law, that the same result follows as favoured by the Full Court. In my opinion, the conclusion of the primary judge should be restored. Reasons for restoring the decision at trial Advantages of the primary judge and appellate restraint: Many serious mistakes and injustices arise in factual determinations at trial. Depending upon the applicable legislation, an appellate court normally has power to correct such errors88. The Full Court had such power89. However, such correction is subject to well-established constraints. These include the restrictions that arise from credibility findings90. They also include those that derive from the advantages that the trial judge has in considering all the facts disclosed by the evidence91. Appellate courts normally only perceive the evidence through the "telescoped" procedures that are available to, or feasible for, them. The decision of the primary judge in the present case was not strictly a discretionary one, so far at least as it concerned whether the conduct of the respondents was "unconscionable"92. Yet it undoubtedly involved elements of evaluation and assessment, as the primary judge himself recognised93. It involved the application to a mass of evidence of a legal standard expressed in broad statutory language and of decisional law calling forth a judicial response that is partly analytical and partly intuitive. In the nature of things, it is difficult for appellate courts to replicate exactly the advantages of the primary judge in making such decisions. These are not reasons for neglecting the appellate function. However, they are reasons for exercising a degree of restraint when asked, on the basis of the written record, to review a conclusion about unconscionable dealing reached at trial. 88 I agree in this respect with the observations of Callinan J at [167]. 89 Federal Court of Australia Act 1976 (Cth), s 27. 90 Abalos v Australian Postal Commission (1990) 171 CLR 167 at 179; Devries v Australian National Railways Commission (1993) 177 CLR 472 at 479, 483. 91 State Rail Authority (NSW) v Earthline Constructions Pty Ltd (In Liq) (1999) 73 ALJR 306 at 330 [89]-[90]; 160 ALR 588 at 619. See also Housen v Nikolaisen (2002) 211 DLR (4th) 577 at 586 [14]. 92 Issues of discretion arose in the provision of relief under the Act. 93 Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (2000) ATPR ¶41-778 ("Berbatis") at 41,197 [124]. Kirby The primary judge's reasons represent the best expression in words of the overall conclusion that the judge has reached, based on a consideration of all the evidence and the consequent findings and inferences of fact94. Considerable caution should be observed in disturbing such an opinion given the significant advantages enjoyed by the primary judge in the evaluation and characterisation of the facts. One reason for disturbing such conclusions would be if it were shown that the primary judge had applied an incorrect legal criterion95, as the Full Court did in the present appeal. However, no such error of legal principle has been demonstrated on the part of the primary judge to authorise the reversal of his ultimate conclusions on that ground. Special considerations of the Roberts: Essential to equitable relief under the principles of unconscionable dealing (as explained by this Court's decisions in cases such as Blomley and Amadio) is a demonstration that the weaker party was subject to a disadvantage which was in some way "special". In this Court, as in the Full Court, the finding of the primary judge that the Roberts were suffering from such a special disadvantage has been criticised. In my view, his Honour's conclusion was open on the basis of the evidence that he accepted. The primary judge specifically addressed his attention to the rejection of the notion that the presence of an inequality in bargaining power between the parties, or the striking of a hard bargain from the perspective of the weaker party, would, in itself, justify the conclusion of unconscionable conduct on the part of the stronger party96. That rejection was correct. The reasons for it are clear. Many transactions involve a disparity in bargaining power. Further, courts are not always well placed to determine whether, in all the circumstances, a bargain that was struck was fair or hard as between the transacting parties. To do this would involve the re-examination of many transactions and a risk that courts would usurp the economic freedom of individuals normally to decide for themselves the transactions that they would, and would not, agree to. Conscious of such considerations, the primary judge recognised that "circumstances of inequality do not of themselves necessarily call for the intervention of equity"97. His Honour also pointed out that "the requisite 94 cf Aktiebolaget Hässle v Alphapharm Pty Ltd (2002) 77 ALJR 398 at 417 [97]; 194 ALR 485 at 510 referring to Biogen Inc v Medeva plc [1997] RPC 1 at 45 per Lord Hoffmann. 95 Housen v Nikolaisen (2002) 211 DLR (4th) 577 at 594 [33]. 96 Amadio (1983) 151 CLR 447 at 462 per Mason J. 97 Berbatis (2000) ATPR ¶41-778 at 41,195 [117]. Kirby disadvantage will not necessarily be found in the normal run of bargaining inequality between large landlords and small tenants"98. In addition, his Honour had earlier observed, correctly in my view99: "The elements of inequality, disadvantage or disability on the one hand and the unfair conduct of the stronger party taking advantage of them on the other are not … to be weighed up as though independent. It is conduct in context which has to be judged. A party may take advantage of the disadvantage of another without necessarily acting unfairly or so unfairly, having regard to the nature of the disadvantage, that equity would intervene. Where the disadvantage or inequality is great it may take less to discern unconscientious exploitation of it than in a situation involving less disadvantage or inequality." The primary judge held that the special disadvantage of the Roberts was of a "situational" rather than "constitutional" nature. It arose out of the "legal and commercial circumstances in which they found themselves", rather than from some inherent weakness or infirmity on their part100. That disadvantage, and the resulting effect on their ability properly to assess and evaluate their options and interests, "was not able to be mitigated by the fact of legal representation which they had available to them at all material times"101. It was in light of the Roberts' need to maintain the value of their business (in order to proceed with an imminent sale of that business) that the conduct of the owners and their insistence on the inclusion of a release clause was judged to be unconscionable. It is true that the respondent owners of the shopping centre were not obliged to extend the Roberts' lease in such a way as to protect their goodwill and thus afford the Roberts a sellable business. However, this fact masks the realities of the economic and litigious positions in which the Roberts and the owners respectively found themselves. I agree with the primary judge that, for the purposes of the section, generalisations about the relationship of landlord and tenant are not helpful102. It is the particular circumstances of the relationship and conduct in question that need to be examined. In the present case the owners were already faced with a shopping centre that had a number of empty shops. They knew that the Roberts were good tenants and that their proposed assignee 98 Berbatis (2000) ATPR ¶41-778 at 41,197 [123]. 99 Berbatis (2000) ATPR ¶41-778 at 41,196 [118]. 100 Berbatis (2000) ATPR ¶41-778 at 41,197 [122]. 101 Berbatis (2000) ATPR ¶41-778 at 41,197 [122]. 102 Berbatis (2000) ATPR ¶41-778 at 41,196 [119]. Kirby was an objectively acceptable, indeed desirable, tenant. Thus, it was in the interests of the owners and agents to extend the lease and facilitate the sale of the Roberts' business. The original litigation between the tenants and the owners was brought on behalf of a number of the tenants in the shopping centre due to their concern about alleged overcharging by the owners and their agents. That litigation would not disappear because of any dealings the owners had with the Roberts. The owners and their agents were also concerned about possible commercial damage to their business because of media attention to the subject matter of the dispute between the shopping centre and the tenants, including the Roberts. In such circumstances, apart from the Roberts' need to terminate their position as tenants and to sell their business immediately as a going concern, it would seem very unlikely that any difficulty would have been placed in the way of the extension of the lease and its assignment to the proposed new tenants. It is in this context that the imposition of the requirement to agree to a release of their legal rights must be evaluated by the standards of the Act. It was open to the primary judge to view the insistence on that requirement as an opportunistic attempt to take advantage of the special position in which the Roberts found themselves. Others have accepted that it involved striking a hard bargain103. The point of difference is therefore whether, by enforcing such a bargain in the circumstances, the conduct of the owners was unconscionable as the primary judge concluded. The starting point of the analysis must be the appreciation of the fact that, without the Roberts' need to renew the lease quickly, in order for them to proceed with the agreed sale, any proposal they made to that end would have been viewed as advantageous to the owners and likely to be accepted by them. Two further points in the conclusions of the primary judge need to be noticed. First, the initial proceedings of the ACCC were brought not only on behalf of the Roberts but also for two other small business owners in the shopping centre (the Ternents and the Raitts). In the end, the primary judge restricted relief pursuant to s 51AA to the Roberts. He rejected the claims made in relation to the other tenants who were also subject to some disadvantage. The Ternents had a hardware business that was struggling. They were in arrears in their rent and were contemplating abandonment of the business altogether. They had no prospective purchaser. The owners, through their agents, attempted to persuade them to stay on at a reduced rent and indicated a preparedness to drop the release clause104. The primary judge was not satisfied that the owners would 103 C G Berbatis Holdings Pty Ltd v Australian Competition and Consumer Commission (2001) 185 ALR 555 at 571 [81]. 104 Berbatis (2000) ATPR ¶41-778 at 41,188 [83]. Kirby have insisted on the inclusion of such a clause in any new lease to the Ternents105. The other tenants were the Raitts. Like the Roberts, they had a viable business. They too needed a renewal of the lease in order to maintain its goodwill and value106. However, they were not in the peculiar position of the Roberts, and had no plan, or immediate need, to sell their business. The primary judge found that the Raitts lost their lease because they were outbid by another bidder, and not because they were unprepared to execute a release clause107. While the Raitts may have been in an inferior bargaining position and suffered loss and inconvenience as a result of the need to relocate because their lease was not renewed, they were not "labouring under a serious disadvantage". Therefore, their loss was held not to result from any unconscionable conduct on the part of the owners108. Secondly, the condition of the Roberts' daughter is clearly a relevant factor in explaining the primary judge's conclusions in respect of their claim under the Act. The owners, through their agents109, knew that the Roberts' daughter had been ill and had contracted encephalitis. They knew that her condition was difficult and expensive to treat. They knew that her illness added great personal stress and emotional strain to the Roberts' lives110. The primary judge specifically referred to the condition of the Roberts' daughter and said that their "personal circumstances" were "also" relevant. I do not agree that he made "no clear finding" about their situation111. The full passage is set out in the reasons of Callinan J112. Read fairly and in the context of 105 Berbatis (2000) ATPR ¶41-778 at 41,198 [125]-[126]. 106 Berbatis (2000) ATPR ¶41-778 at 41,193-41,194 [107]-[108]. 107 Berbatis (2000) ATPR ¶41-778 at 41,198 [128]. In fact, the primary judge found that during the course of the negotiations with the owners, Mr Raitt was not fully aware of the meaning of the "mutual release" clause: see at 41,198 [127]. 108 Berbatis (2000) ATPR ¶41-778 at 41,198 [128]. 109 See the Act, s 84(1). Ms Clapp's primary duties included liaising between the owners and their tenants: Berbatis (2000) ATPR ¶41-778 at 41,169 [12]. 110 Berbatis (2000) ATPR ¶41-778 at 41,176 [37], 41,180 [51], 41,197 [124]. 111 The joint reasons at [63]. 112 Reasons of Callinan J at [150]. Kirby the wider factual setting, it indicates that the primary judge treated the Roberts' family predicament as a factor contributing to the special features of their case. In particular, the need for the Roberts to proceed at that point with the sale of their business was explained by their desire to have more time and also the money to devote to their daughter, given her medical condition113. Although the illness concerned was not that of the tenants themselves, it was an illness that was bound to play a part in the Roberts' decisions. It was part of the circumstances that placed them in a serious "situational" disadvantage and inequality vis-a-vis the owners. The differentiation of the case of the Roberts from the other tenants, is thus explained, in large measure, by reference to the Roberts' vulnerability caused by their need to sell their business because of their personal circumstances114. It may be that, in the view of the primary judge, the Roberts would have been entitled to relief even in the absence of their personal situation including the condition of their daughter. However, it was unnecessary to go that far for the purpose of the present case. The course of the negotiations: The reliance on unconscionable conduct in seeking relief, either in equity or under the Act, is not just an incantation115. To seek to answer the question whether the bargain was unconscionable first, and only then to reflect upon the conduct of the stronger party in procuring the assent of the weaker one, is to invert the proper approach to analysis in such cases116. The quality of the bargain (or the adequacy of the consideration) has never been either a necessary or a sufficient element for establishing unconscionable dealing. Similarly, focusing only on the outcomes available in the negotiations over the lease between the Roberts and the owners does pose a question that can be more easily answered. But it strips the problem of all of its complexity. It may well be that adopting a particular negotiating stance, including a requirement of a release clause by the owners as part of the discussions for extending or renewing the lease, would not, on its own, constitute a contravention of s 51AA of the Act. 113 C G Berbatis Holdings Pty Ltd v Australian Competition and Consumer Commission (2001) 185 ALR 555 at 560 [23]; Berbatis (2000) ATPR ¶41-778 at 114 Berbatis (2000) ATPR ¶41-778 at 41,197 [124]. 115 cf Ellinghaus, "In Defense of Unconscionability", (1969) 78 Yale Law Journal 757 116 cf C G Berbatis Holdings Pty Ltd v Australian Competition and Consumer Commission (2001) 185 ALR 555 at 571 [83]. Kirby Yet a closer investigation of the detail of the contracting process may give that insistence quite a different complexion117. The reference to the extension of the lease on the owners' terms as a "lifeline"118 to the Roberts also tends to obfuscate, rather than clarify, the process of reasoning. Many cases in which equity would traditionally intervene under this head of relief involve situations where "unusual pressures" are exerted upon a party not only as a result of some inherent weakness or infirmity, but as a result of "the contingencies of the moment"119. These would include the so-called "catching bargains" of expectant heirs or others vulnerable due to need or distress and similar instances of usurious conduct, where it can often be said that the party seeking relief was thrown a "lifeline"120. Looking upon the development of the doctrine of unconscionable dealing from a contemporary perspective, it can fairly be said that the touchstone of the intervention of equity under this head of relief (and, in my view, the reason that the "unconscionable conduct" standard was picked up in the Act121), is the protection of the assumptions and conditions necessary to make effective the freedom to contract of the parties. As Professor Finn noted122: "[U]nconscionable conduct can be said to be synonymous with the use of a manipulative power to induce or produce a course of conduct, in a way which offends the fundamental assumptions on which the making of a binding contract are premised, be this by contriving the information on which a judgment is made or by contriving choice itself." 117 Ellinghaus, "In Defense of Unconscionability", (1969) 78 Yale Law Journal 757 at 118 C G Berbatis Holdings Pty Ltd v Australian Competition and Consumer Commission (2001) 185 ALR 555 at 571 [80]. 119 Ellinghaus, "In Defense of Unconscionability", (1969) 78 Yale Law Journal 757 at 120 Earl of Aylesford v Morris (1873) LR 8 Ch 484 at 492-493; Rees v De Bernardy [1896] 2 Ch 437 at 444-446. See also James v Kerr (1889) 40 Ch D 449 at 460 where Kay J observed that the fact the lenders may have been doing the plaintiff a service would not prevent equity's intervention. 121 cf Ellinghaus, "In Defense of Unconscionability", (1969) 78 Yale Law Journal 757 122 Finn, "Unconscionable Conduct", (1994) 8 Journal of Contract Law 37 at 49. Kirby The elements of a party's disadvantage and its ability to assess its interests and options before entering into a transaction are not purely abstract notions. The foregoing characterisation provides a proper reference point by which the question of the weaker party's ability to make an appropriate judgment about its choices and the conservation of its own interests can be determined. It also explains three aspects of the equitable doctrine. First, the fact that the categories of "special disadvantage" could never be stated exhaustively. Secondly, that the mere presence of disadvantage is not sufficient to obtain relief. And thirdly, following from these, that in characterising the conduct of the stronger party, the circumstances in which the contract was made are relevant to determine whether the assent to any aspect of the bargain was obtained somehow "in the dark"123. As Deane J observed in Amadio124: "Unconscionable dealing looks to the conduct of the stronger party in attempting to enforce, or retain the benefit of, a dealing with a person under a special disability in circumstances where it is not consistent with equity or good conscience that he should do so." It follows that the ultimate issue for decision in this case on the question of unconscionability was whether procuring the Roberts' assent to the impugned term involved an abuse, in the circumstances, of their disproportionately weak and vulnerable position, commercial, financial and personal. In answering that question, it was proper for the primary judge to have regard not only to the release clause, but also to the entire course that the negotiations had taken. The issue of the release clause was originally raised by the owners' agents (Mr Sullivan and Ms Clapp), in relation to the negotiations for a new lease with Mr Holland as the prospective purchaser of the Roberts' business125. The initial sale of the Roberts' business failed because Mr Holland was not prepared to buy the business without an extension of the lease. Further, he was not interested in obtaining a lease if the Roberts were forced to abandon their legal rights126. The owners then apparently dropped the clause from the negotiations. No reference was made to the release provision in two subsequent offers which the 123 Filmer v Gott (1774) 4 Brown 230 at 241 [2 ER 156 at 164]. 124 (1983) 151 CLR 447 at 474. 125 Berbatis (2000) ATPR ¶41-778 at 41,178 [44]. In these negotiations, Mr Sullivan insisted that Mr Holland (as a prospective tenant) have no legal representation: see 126 Berbatis (2000) ATPR ¶41-778 at 41,179 [47]. Kirby owners' agents made to the Roberts127. The second of those offers was signed by the Roberts, and an acceptance was also signed by or on behalf of the owners128. Unsurprisingly, in such circumstances, the Roberts were left under the impression that a new seven year lease had been concluded based on that offer without reference to the release of their legal rights. Mr Holland made a second offer to purchase the business from the Roberts. They accepted. The contract for sale was made subject to a condition of the lease being assigned to Mr Holland129. It follows that, in their negotiations with Mr Holland, the Roberts were proceeding on the assumption that a new lease had been concluded130. It was at that point that Mrs Roberts became aware that, for some unexplained reason, no lease documents had been completed pursuant to the previous offer131. In her discussions with the agents, Mrs Roberts received some assurance that a release of their legal rights would not be required132. It was only at the very end of Mrs Roberts' dealing with the owners' agents, that a release clause was inserted in the documents for the extension of the lease. Initially, Mrs Roberts was not made aware of this. However, her attention was drawn to the clause when a regular customer of the Roberts' shop, who was a lawyer, looked over the lease documents at her request133. Mrs Roberts then sought further advice from her solicitor. He counselled her against signing the documents. However, in the circumstances, the Roberts, as explained by Mrs Roberts, felt that they had "little option" but to sign the proposed deed. This was because they "could not afford to have the sale of the business fail again"134. She expressed her concern "because she had to decide that day without the 127 Berbatis (2000) ATPR ¶41-778 at 41,181 [54]-[55]. 128 Berbatis (2000) ATPR ¶41-778 at 41,181 [55]. 129 Berbatis (2000) ATPR ¶41-778 at 41,181 [56]. 130 cf The Commonwealth v Verwayen (1990) 170 CLR 394 at 446. 131 Berbatis (2000) ATPR ¶41-778 at 41,181 [56]-[57]. 132 Berbatis (2000) ATPR ¶41-778 at 41,181-41,182 [57]-[59]. 133 Berbatis (2000) ATPR ¶41-778 at 41,183-41,184 [63]. 134 Berbatis (2000) ATPR ¶41-778 at 41,184 [65]-[66]. Kirby opportunity to give the matter proper consideration"135. By that time, the Roberts had not only concluded the agreement for the sale of their business to Mr Holland. Mr Holland had already started to move into the premises136. The change of stance of the owners and the belated revival of their insistence upon the clause had all the hallmarks of a well-tuned demand, imposed by those with proportionately greater economic power to take advantage of the vulnerable position that the Roberts found themselves in, given the course of dealings and their commercial, financial and personal circumstances at the time. Had it been otherwise, in their negotiations towards extending the lease or for the sale of the business, the Roberts might have sought an adjustment of the rent, and/or the price at which they would sell the business. Further, as Mrs Roberts herself acknowledged, they might not have proceeded with the sale of the business in such circumstances at all137. They were taken by surprise and without sufficient opportunity or "time to act with caution"138. This was the way in which the information upon which the Roberts were proceeding was contrived, as was their ultimate assent to the transaction. This is why it can be said that there was no real bargaining over the term and, in the circumstances, the Roberts were unable to assess properly their options and interests139. The purpose and nature of the provision and remedies: It is true that the amount that the Roberts hoped, and expected, to recover from their litigation with the owners was more than they would, in fact, have recovered under the settlement, had they been parties to it. It was also considerably less than the sum they recovered as a consequence of the sale of their business to Mr Holland. In the big picture of national and world economies, these issues and sums are indeed trivial. However, with the primary judge, I regard the size of the damage or loss sustained as less important than the issue of principle that was at stake. The original litigation brought by the tenants jointly was about alleged overpayments of charges to the owners and their agents. It involved what were found to have been genuine claims; not frivolous or vexatious ones140. In the end, a degree of acknowledgment by the owners of such overcharging may appear from the settlement by which all shopkeepers who remained in the proceedings recovered a recoupment from the owners. The Roberts would have 135 Berbatis (2000) ATPR ¶41-778 at 41,184 [64]. 136 Berbatis (2000) ATPR ¶41-778 at 41,184 [67]. 137 Berbatis (2000) ATPR ¶41-778 at 41,181 [57]. 138 Evans v Llewellin (1787) 1 Cox 333 at 340 [29 ER 1191 at 1194]. 139 cf Harrison v Guest (1860) 8 HLC 481 at 491-492 [11 ER 517 at 521]. 140 Berbatis (2000) ATPR ¶41-778 at 41,197 [124]. Kirby done so if they had not been obliged, in their circumstances, to execute the release term that was effectively imposed upon them. The Act does not contain an exemption for cases where the loss suffered by the weaker party, as a result of the unconscionable conduct, is small. Although small in the present case, the enforcement of a remedy on behalf of the Roberts, for the action of the owners in depriving the Roberts of what otherwise would have been their legal entitlement, stands as a warning against like conduct by similar parties in the future. Specifically, it constitutes a warning to others against the use of their economic power to obtain from a comparatively weak and vulnerable market player a concession not extractable from other participants in the market and only extracted from the Roberts because of their imperative need to secure an extension of their lease that, in other circumstances, would have been granted without relevant countervailing conditions. A prime purpose for bringing the notions of unconscionability into the Act, and expressing them as relevant to business standards for Australian corporations engaged in trade and commerce, was to render those standards more effective by creating real sanctions and by affording novel remedies that might on occasion be invoked by the ACCC on behalf of small players. The ACCC is entitled under the Act to bring proceedings (as it did here) in its own name to enforce the rights of others141. In this way, it was envisaged by the Parliament that test cases, such as that brought by the ACCC for the Roberts, would help to promote the object of fair trading and translate the principles of the legislation into corporate behaviour, thereby incorporating equitable notions into practical day-to-day application. This point is reinforced by an examination of the kinds of remedies available for a contravention of s 51AA. In particular, recovery of damages under s 82 or pecuniary penalties under s 76 of the Act was not available142. In a passage cited earlier in these reasons143, the primary judge commented on the relationship between the emerging case law interpreting and applying s 51AA of the Act, and the existing doctrines of the unwritten law. This is an issue that will warrant further examination. It may be that the different policies and concerns that motivate the provision of relief in equity and under the Act, would also translate into subtle differences in the characterisation of conduct as unconscionable. The concern of equity is limited to justice in the individual case given the potential for inadequate results by reason of some of the rules of the 141 The Act, ss 80, 87. 142 See the joint reasons at [33]. Kirby common law144. Therefore, even if conduct otherwise exhibits the elements of unconscionable dealing as understood in equity, it may still not receive that characterisation if the traditional equitable remedies (such as setting aside the transaction for instance) are not appropriate in the circumstances of the case. The Act on the other hand provides a wider set of procedures and remedies (as this appeal illustrates) designed to enhance the "educative and deterrent effect of [the] legislative prohibition"145. Given that such purposes would ordinarily be outside equity's contemplation, a contravention of the Act might yet be found although equitable relief would not lie. It follows that this Court should approach a case such as the present, brought under the Act, recognising that its importance extends beyond the humble case of the Roberts. By upholding the rights of the Roberts – on the face of things small and objectively of limited significance – a message is delivered that the Act is not to be trifled with. Unconscionable conduct, in the sense referred to in s 51AA of the Act, is to be avoided by corporations lest they find themselves on the receiving end of proceedings such as the ACCC brought on behalf of the Roberts. Uninstructed by the history and purpose of the Act, and remembering only the cases in equity from which the "unwritten law" on unconscionable conduct is derived, a court might well view the present proceedings differently. But when the place of s 51AA in the Act, its history and its educative and deterrent purposes are remembered, the outcome reached by the primary judge can be better understood. Unconscionable conduct in a commercial setting: In Austotel Pty Ltd v Franklins Selfserve Pty Ltd146, I said, by reference to the circumstances of that case: "[C]ourts should be careful to conserve relief so that they do not, in commercial matters, substitute lawyerly conscience for the hard-headed decisions of business people". 144 Loughlan, "The Historical Role of the Equitable Jurisdiction", in Parkinson (ed), The Principles of Equity, 2nd ed (2003) 3 at 6-7. See also Duggan, "Is Equity Efficient?", (1997) 113 Law Quarterly Review 601 at 602. 145 Trade Practices Legislation Amendment Bill 1992 (Cth), Explanatory Memorandum at [44]. 146 (1989) 16 NSWLR 582 at 585. More recently, see Hayne, "Address to Commercial Law Conference", (2002) 23 Australian Bar Review 24; cf Mason, "The Impact of Equitable Doctrine on the Law of Contract", (1998) 27 Anglo- American Law Review 1 at 11-13. Kirby The circumstances there referred to were "the relationships of substantial, well-advised corporations in commercial transactions"147. I still hold that view148. In enacting a prohibition against unconscionable conduct in s 51AA, the Parliament invoked the principle of unconscionability and applied it in the context of "trade and commerce" without apparent differentiation. However, what is "unconscionable" conduct of a corporation in its dealings with another corporation of roughly equal size – and especially a large trading corporation well able to be advised and look after its own interests – will be quite a different matter when compared to a context in which the complaining party is an individual trader of modest means and known circumstances of vulnerability, with restricted economic power and limited facilities to receive effective legal advice, dealing with an economically superior well-advised market player. It is the serious or "gross inequality of bargaining power"149 in the relationship between parties that refines and sharpens issues of conscience and the need to provide remedies, whether in equity or under provisions such as s 51AA of the Act. The special position of the Roberts enlivens the need to consider the complaint of unconscionability in the conduct of the respondents. Their position as small traders involved precisely the kinds of circumstances that the legislature had in mind when enacting s 51AA, given that consumers already had access to a broader prohibition of unconscionable conduct on the part of corporations150. The owners and their agents were concerned about the enforceability of the release clause. They sought the advice of two different solicitors151. Correctly and prudently, the respondents' legal advisers drew to their notice the risk they ran that the release clause with respect to the litigation may not be enforceable because it comprised "key-money"152, or because the tenants could argue that the release was made under duress153. Such advice does not, of itself, establish that the respondents' conduct was unconscionable. However, the fact 147 Austotel Pty Ltd v Franklins Selfserve Pty Ltd (1989) 16 NSWLR 582 at 586. 148 cf Pilmer v Duke Group Ltd (In Liq) (2001) 207 CLR 165 at 221 [138]. 149 Amadio (1983) 151 CLR 447 at 464 per Mason J. 150 The Act, s 51AB (formerly s 52A). 151 Berbatis (2000) ATPR ¶41-778 at 41,174-41,175 [31]-[33]. 152 See ss 9(1) and 3 of the Commercial Tenacy (Retail Shops) Agreements Act 1985 153 Berbatis (2000) ATPR ¶41-778 at 41,175 [32]. Kirby that advice was sought, and given in such terms, suggests the existence of a sense of disquiet on the part of the owners and their agents about depriving the tenants of access to their legal rights. Understandably, that disquiet could arise from the recognition that, ordinarily, in a society such as ours, people are entitled to pursue their legal rights and have them decided by an independent court or tribunal and not surrendered in circumstances when they are specially vulnerable to overbearing conduct or adventitious pressure. Perhaps the state of the respondents' conscience in relation to these events is reflected in the comment by Mr Atzemis, as one of the proprietors, to Mr Raitt (long after the Roberts were out of the picture) that Mr Sullivan "was getting people to sign documents that he shouldn't have"154. Conclusion: restore primary judge's evaluation: The primary judge concluded that of the tenants the Roberts, and they alone, fell within the category of persons who answered the description of suffering a "special" disadvantage about which the cases on unconscionable conduct speak155. This was not, therefore, an instance where the judge mistook a hard bargain for one resulting from an unconscionable misuse of economic superiority. It was not one in which he approached s 51AA in a way that exceeded its proper place in a legal system that normally holds people to their concluded bargains. The primary judge refined the several suggestions of unconscionable conduct – all in the context of relationships of unequal bargaining power. He reduced them, in the end, to the case of the Roberts. He regarded their case as relevantly "special". Cases of this kind depend (as the primary judge and others who have dealt with like problems have pointed out) upon their own facts and circumstances judged against a criterion that is easier to describe than to define156. The statutory standard is flexible. It must be so because of the wide variety of circumstances to which s 51AA of the Act applies. Having regard to the history and purposes of that provision, and the language of its expression, I could not accept the proposition that s 51AA has a limited operation. It is as large as the statutory text and the incorporated unwritten law permit. It has a capacity to expand and apply to new circumstances as the unwritten law evolves "from time to time". 154 Berbatis (2000) ATPR ¶41-778 at 41,194 [109]. 155 Berbatis (2000) ATPR ¶41-778 at 41,197 [124]. See Amadio (1983) 151 CLR 447 156 eg Antonovic v Volker (1986) 7 NSWLR 151 at 165 per Mahoney JA noted by the primary judge: Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (No 2) (2000) 96 FCR 491 at 501-502 [20]-[21]. Kirby It was therefore open to the primary judge to conclude as he did on the basis of the facts as he accepted them. No error of legal principle has been shown in his Honour's approach in reaching his conclusions. This Court has no warrant to substitute a different conclusion. We should therefore affirm the primary judge's judgment. Orders Because there is no ground of cross-appeal or notice of contention before this Court challenging the validity and appropriateness of the remedial declarations and orders fashioned by the primary judge157 and because this Court has heard no argument addressed to such points, I will resist the temptation to enter into a consideration of the terms of the orders made at trial158. The very form of those orders – involving no punishment and no pecuniary impositions but simply remedies designed to ensure compliance with the Act – confirms my view that the proceedings were treated as a test case concerned with upholding the Act and achieving its objects rather than extracting money from the owners or enriching the Roberts as such. The appeal should therefore be allowed. The judgment of the Full Court of the Federal Court should be set aside. In place of the Full Court's judgment, it should be ordered that the appeal to that Court be dismissed. In accordance with the condition imposed by this Court on the grant of special leave as enlarged by the acknowledgment of the ACCC in its notice of appeal, the appellant should pay the respondents' costs of the appeal to the Full Court and the respondents' costs of the appeal to this Court. 157 Berbatis (2000) ATPR ¶41-778 at 41,199-41,200; Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd [2000] FCA 1893. 158 cf reasons of Callinan J at [187]-[190]. Callinan CALLINAN J. The question which this appeal raises is whether the insistence by a landlord upon the discontinuation of litigation by a tenant as the condition of a grant of a fresh lease constituted unconscionable conduct within the meaning of s 51AA of the Trade Practices Act 1974 (Cth) ("the Act"). Facts The first to fourth respondents were the owners and operators of the Farrington Fayre Shopping Centre at Leeming in Western Australia ("the Centre") which comprised 26 small retail shops, including a supermarket. The fifth and sixth respondents were directors of the corporate owners. The eighth respondent was a director of the seventh respondent which effectively acted as a manager of the Centre on behalf of the respondent owners. The respondent owners had also engaged Raine and Horne International (WA) Pty Ltd ("Raine and Horne") as the managing agents of the Centre. Raine and Horne performed that role until August or September 1996 when Davpac Holdings Pty Ltd, trading as First Pacific Davies ("FPD"), were engaged. Mr Craig Wilson and Ms Glenda Clapp were employees of Raine and Horne and, subsequently, FPD. Mr Wilson was responsible for the management, leasing and marketing of shopping centres managed by Raine and Horne and FPD. Ms Clapp was responsible, amongst other things, for collecting rents and dealing with tenants at the Centre. From 1990, a number of the tenants at the Centre, including Margaret and James Roberts who traded as Leeming Fish Supply ("the business"), complained to the respondent owners about various charges purportedly imposed on them under their leases. Mr and Mrs Roberts had conducted the business from late 1989. Mrs Roberts was also experienced in various other business activities. Their lease was not due to expire until 14 February 1997 as a result of the exercise of the one option contained in it. A daughter of Mr and Mrs Roberts suffered a serious and distressing illness which was expensive to treat, and in respect of which her parents spent much of the income they derived from conducting the business. Ms Clapp was aware of these matters. In or about March 1995 the respondent owners were advised that Mr and Mrs Roberts were contemplating the sale of the business because their daughter required "considerable attention" and they thought that it was "time to get out", as they had been in the business "long enough". Mrs Roberts said that the grant of a new lease was desirable to enable them to make a satisfactory sale. On 16 March 1995, Ms Clapp pointed out to the respondent owners that Mr and Mrs Roberts were "good operators". Callinan On 10 April 1995, a letter of offer was sent by Ms Clapp to Mr and Mrs Roberts proposing a lease with terms of either seven years two months, eight years two months or ten years two months effective from 15 February 1997. No period for acceptance was stipulated by the letter. Mrs Roberts treated it as an open offer and did not take it up at that time. In January 1996, some tenants of the Centre instituted proceedings against the respondent owners in the Commercial Tribunal of Western Australia ("the Tribunal"). On 24 April 1996, Mr and Mrs Roberts also instituted proceedings. In May 1996, the respondent owners and the tenants agreed to treat one tenant's case as a test case. The respondent owners were anxious about the pending litigation and its effect upon their reputation and standing in the community. They took steps to engage a "talkback" radio presenter to "turn the media discussions around". The eighth respondent, a director of the seventh respondent, advised the respondent owners in relation to negotiations with the tenants of the Centre. In late June 1996, the respondent owners agreed that the eighth respondent be provided with "greater autonomy" as property consultant, and, on 1 July 1996, he proposed that the issue of "extension and renewal of various leases and a leasing strategy" become "part of the asset management brief" effective from that day. In March 1996, Ms Clapp advised the eighth respondent that a number of leases at the Centre would be expiring in early 1997 and that although it was to be hoped that most lessees would seek new leases, some would not. The eighth respondent provided this information to the respondent owners in a letter dated 23 April 1996. In April or May 1996, the respondent owners accepted, and subsequently acted upon advice from the eighth respondent that no current tenant should be given a new lease at the Centre unless that tenant agreed to discontinue any litigation it had commenced against the respondent owners ("the mutual release"). At about the same time, the eighth respondent advised the respondent owners that he expected limited rental growth at the Centre, but that the negotiation of new leases would present an opportunity to resolve disputes with existing tenants; that it was essential that negotiations be on a "one to one basis" to achieve the "best possible deal" for the respondent owners; and, that as part of this policy, he had instructed Raine and Horne to prepare a "tenant by tenant plan of attack". On or about 26 March 1996, Mr and Mrs Roberts entered into a conditional agreement with Mr Holland for the sale of the business for $68,000. The condition was that a new five year lease with an option of five years, "as per letter of 10 April 1995", be available. Callinan Ms Clapp informed the eighth respondent that the "purchaser" would be a "suitable tenant" and "potentially a successful operator of the business". In or about May 1996, Mr Holland withdrew from the agreement to purchase the business because he was not prepared to enter into a lease for ten years: and further, that he was not interested in obtaining a lease if it meant that Mr and Mrs Roberts were obliged to withdraw their claim in the Tribunal. Mr Holland told Mrs Roberts that he remained interested in buying the business, and suggested that when things "cooled down" they might negotiate again. Mrs Roberts agreed to inform him of any other offers she and her husband might receive to purchase the business. Mrs Roberts said that she and her husband were under "considerable stress". She advised Ms Clapp of it and her husband's illness as a result of that stress. Mrs Roberts was forced to cancel various plans, including for trips overseas and interstate to visit members of her family, and to investigate possible employment elsewhere. The staffing of the business had to be "reorganised" as numerous staff had left when the sale had been announced, and new staff had to be trained. There was "considerable disruption" to Mrs Roberts and her family as a result of the loss of the sale to Mr Holland. On 6 June 1996, Mr and Mrs Roberts finally purported to accept the respondent owners' offer of a lease made on 10 April 1995. Ms Clapp advised them that the offer had lapsed, and submitted to them a draft lease with new terms. Neither the letter nor the enclosed documents (including the draft lease) referred to the mutual release. Mr and Mrs Roberts were not comfortable with some other conditions, and some mistakes in the documents. Mrs Roberts raised those concerns with Ms Clapp whose response was that it would consider any inaccuracies in the disclosure statement, but that "the lease was what the owners were willing to offer" and that they "could take it or leave it". Mr and Mrs Roberts decided to "leave it" at that time. On 14 August 1996 Mr and Mrs Roberts were made a further offer, this time of a lease for seven years to commence on 1 October 1996. No reference was made at that time to the mutual release. Mr and Mrs Roberts signed the offer and an acceptance of it was signed by or on behalf of the respondent owners. Nevertheless Mr and Mrs Roberts held the mistaken belief that a lease had been concluded. In October 1996, Mr and Mrs Roberts received an offer from another potential purchaser of the business. Mrs Roberts told Mr Holland of it. On 28 October 1996, Mr and Mrs Roberts entered into an agreement with Mr Holland for the sale of the business. Settlement was to be effected on 25 November 1996. The sale was subject to an assignment to Mr Holland of a lease for seven years (commencement date 1 October 1996). Callinan On 29 October 1996, Mrs Roberts met Mr Wilson to ask whether the respondent owners would insist on the mutual release as a condition of the assignment of the lease, as she did not wish to undertake the selling of the business again if the requirement to withdraw the claim in the Tribunal remained. Mrs Roberts left the meeting believing that the respondent owners would not insist upon the inclusion of the mutual release. Between 29 October and mid- November 1996, numerous communications passed between Mr and Mrs Roberts, Ms Clapp and Mr Holland with respect to the preparation of a new lease and its assignment, on the basis that time was of the essence. On 13 November 1996, Ms Clapp sought instructions from the eighth respondent as to the preparation of documents to extend or vary the lease and to assign it to Mr Holland. At about this time, the eighth respondent said that he had met the respondent owners and that they had affirmed that Mr and Mrs Roberts should only be offered a new lease if they agreed to the mutual release. Following that meeting, he said that he instructed FPD to prepare the relevant documents which were to make provision for the mutual release. The operative clause for mutual release was as follows: "14.1 The Assignor and the Assignee do hereby jointly and severally release and discharge the Lessor from all actions, claims, demands, suits, proceedings and other liabilities arising directly or indirectly from any act or omission by the Lessor or its servants, agents or contractors which occurred prior to the assignment date which the Assignor or the Assignee may be otherwise able to make or bring pursuant to any rule of law or in equity or any statute, absolutely. 14.2 Without limiting the generality of Clause 14.1 the Assignor shall immediately file consent orders to dismiss any action, claim, demand, suit or proceeding made against the Lessor or its servants, agents or contractors with no order for costs. 14.3 The Assignor and the Assignee acknowledge and agree the releases and discharges express or implied in this Clause 14 shall be construed as widely as possible and that the Lessor may plead the releases and discharges as a complete and effectual defence. 14.4 The parties covenant and agree with each other to execute all documents that may be required to give full effect to the provisions of this Clause 14." Mrs Roberts became aware of the inclusion of the mutual release in the documents relating to an assignment of the lease when it was brought to her attention by a lawyer who was incidentally one of her customers and who had looked over the documents for her. "Mrs Roberts could not believe" that the Callinan mutual release clause had been included because "[she] had [been] assured ... it would not be something they insisted on". Mrs Roberts' solicitor contacted the respondent owners' solicitor regarding the inclusion of the mutual release on 2 December 1996, but was advised that the respondent owners believed they had given Mrs Roberts "due consideration" by allowing the sale of the business to proceed. Mrs Roberts was "very upset by this" and "very concerned" because she had to make a decision that day without the opportunity to give the matter proper consideration. Mrs Roberts felt that she had "little option" but to sign the deed because her lease was shortly due to expire, there was "no prospect of renewal", and "without [a new lease] she would have no business to sell". She therefore believed that she had no choice but to sign the deed as it was, and was "extremely upset and angry" that the agents and respondent owners had, in her view, "put her in a situation where she had no choice but to give up her legal rights". She raised her concerns with Mr Wilson and Ms Clapp who offered to bring the matter to the respondent owners' attention again, but this would have meant that settlement would not be able to be effected on the due date. Mrs Roberts said that she wanted the settlement to proceed because "she could not afford to have the sale of the business fail again". She signed a deed (which contained the mutual release) on Monday 2 December 1996 and the settlement of the sale took place on the same day. Less than a fortnight later the Tribunal decided in part in one tenant's favour, against the respondent owners. Both parties appealed to the District Court. On 22 January 1997, senior counsel's advice was obtained by the tenants' solicitor. It was that the respondent owners' appeal on the test case was likely to succeed to a considerable extent, but that there was a prospect that at least part of the tenants' original claims would succeed. On the basis of that advice, the tenants agreed that the respondent owners' appeal be allowed. The tenants commenced fresh proceedings however in the Supreme Court. In breach of their obligations under the mutual release Mr and Mrs Roberts took no steps to discontinue their claims. The Supreme Court proceedings were resolved in November 1998 by a compromise, which, had Mr and Mrs Roberts participated in it, would have yielded them a refund of about $2,800. The application to the Federal Court On 3 April 1998 the appellant in exercise of the powers conferred on it, by for example ss 80 and 87 of the Act, instituted proceedings in the Federal Court for (inter alia) contravention of ss 51AA and 52 of the Act in respect of the Callinan respondents' dealings with several of the tenants including Mr and Mrs Roberts. The contraventions of s 51AA were said to be the conduct of the respondent owners in relation to the renewal or assignment of the leases of premises at the Centre in imposing the mutual release upon the tenants. The matter came on for hearing before French J. His Honour found for the appellant and made these declarations on 26 September 2000159: in conduct "1. It is hereby declared that in May 1996 and October 1996 the First, that was Second and Third Respondents, engaged unconscionable within the meaning of the unwritten law from time to time of the States and Territories, in contravention of s 51AA of the Trade Practices Act 1974, in that the said Respondents required, as a condition of the grant of a new lease to Margaret Joan Roberts and James Arthur Roberts, as Trustees of the Roberts Family Trust, trading as Leeming Fish Supply at Shop 14, Farrington Fayre Shopping Centre, that the Roberts do release the First to Fourth Respondents from various claims arising under their existing lease. 2. It is hereby declared that in May 1996 and October 1996 the Fourth, Fifth and Sixth Respondents were directly or indirectly knowingly concerned in or party to conduct in trade or commerce that was unconscionable within the meaning of the unwritten law from time to time of the States and Territories, in contravention of s 51AA of the Trade Practices Act 1974, in that the said Respondents required, as a condition of the grant of a new lease to Margaret Joan Roberts and James Arthur Roberts, as Trustees of the Roberts Family Trust, trading as Leeming Fish Supply at Shop 14, Farrington Fayre Shopping Centre, that the Roberts do release the First to Fourth Respondents from various claims arising under their existing lease. 3. It is hereby declared that the Seventh Respondent, in October 1996 and the Eighth Respondent in May 1996 and October 1996, acting as agent for or on behalf of the owners of Farrington Fayre, were directly or indirectly knowingly concerned in or party to conduct in trade or commerce that was unconscionable with[in] the meaning of the unwritten law, from time to time of the States and Territories, in contravention of s 51AA of the Trade Practices Act 1974, in requiring, as a condition of the grant of a new lease to Margaret Joan Roberts and James Arthur Roberts, as Trustees of the Roberts Family Trust, trading as Leeming Fish Supply at Shop 14, Farrington Fayre Shopping Centre, that the Roberts do release the First to 159 (2000) ATPR ¶41-778 at 41,199-41,200. Callinan Fourth Respondents from various claims arising under their existing lease." His Honour made these findings in favour of Mr and Mrs Roberts160: "In order to address the question whether the owners contravened s 51AA in their dealings with the Roberts it is convenient first to consider whether there was a relationship of disadvantage, disability or inequality between the two parties. The Roberts as lessees of Shop 14 operated a small business, the Leeming Fish Supply, the value of which to any prospective purchaser was critically dependent upon the length and security of the tenure of the premises which the Roberts could convey to that purchaser at settlement. At the time that they first negotiated with Mr Holland between March and May 1996, they had less than twelve months of their lease to run. A mere assignment of the balance of the term, to which they were entitled by virtue of the provisions of the Commercial Tenancy Act, could not secure for Mr Holland a tenancy of the length necessary to make his investment worthwhile. So the sale of the business was dependent upon the owners' willingness to grant a new lease. They were under no obligation to do so. Neither the Roberts nor Mr Holland were actually or potentially large tenants. They were actual and prospective small business operators. The Roberts, in particular, had little bargaining power when it came to dealing with the owners. There was a marked inequality of bargaining power between them. The Roberts suffered what might be called a 'situational' as distinct from a 'constitutional' disadvantage. That is to say it did not stem from any inherent infirmity or weakness or deficiency. It arose out of the intersection of the legal and commercial circumstances in which they found themselves. That disadvantage, not being constitutional in character, was not able to be mitigated by the fact of legal representation which they had available to them at all material times. The use of the word 'special' to describe the class of disadvantage or disability which will attract the application of the doctrines of equity is not to be treated as one would treat the word in a statute. It indicates that the requisite disadvantage will not necessarily be found in the normal run of bargaining inequality between large landlords and small tenants. In my opinion, however, the circumstances in which a business operator on a lease may effectively lose the value of that business upon expiry of the lease does place the tenant at a special disadvantage in dealing with the owner. This does not import any obligation on an owner to renew a lease which has expired. The question is whether the owner has unfairly 160 (2000) ATPR ¶41-778 at 41,196-41,197 [121]-[124]. Callinan exploited the tenant's disadvantage in a way that equity would regard as unconscionable. Unfair exploitation of disadvantage amounting to unconscionable conduct may occur when an owner uses its bargaining power to extract a concession from the tenant that is commercially irrelevant to the terms and conditions of any proposed new lease. This is an area of evaluation and assessment where there are few hard and fast guides. In my opinion for the owners to insist, as they did through Mr Sullivan in this case, upon the Roberts abandoning their rights to proceed with bona fide litigation in relation to their rights under their existing lease was to engage in unconscionable conduct. The claims that they, in common with other tenants, were raising against the owners were bona fide and serious. They were taken seriously by both the tenants and by the owners. This conclusion would not prevent an owner from insisting as a condition of the renewal of a lease that a tenant not engage in frivolous or vexatious litigation against the owner. Nor would it prevent an owner from simply refusing to renew a lease in favour of a tenant with whom that owner was engaged in litigation. Each case must be considered according to its own circumstances. The personal circumstances of the Roberts are also relevant in so far as they were known to the owners or their agents. In particular, Mrs Roberts had spoken to Ms Clapp on numerous occasions over the years about her daughter's condition and the consequent emotional strain placed on herself and her husband. Quite apart from that circumstance, in my opinion, the present case insofar as it involves the Roberts, discloses unconscionable conduct on the part of the owners on the two occasions in May 1996 and November 1996 in which they insisted upon the execution of a release clause by the Roberts as a condition of the grant of a new lease and assignment thereof to Mr Holland. It is of no consequence, in my opinion, that the detriment suffered by the Roberts may have been small in money terms. The way in which the owners acted, through their agent Mr Sullivan and his company, was a grossly unfair exploitation of the particular vulnerability of the Roberts in relation to the sale of their business. Whether or not they all had personal knowledge of the circumstances of the Roberts, they were fixed with such knowledge through that of Brian Sullivan and his company. The corporate respondents were therefore in contravention of s 51AA and the natural respondents knowingly involved in that contravention." Subsequently, on 20 December 2000 his Honour made orders on the application of the appellant for the "re-education" of the respondent natural persons (the fourth, fifth, sixth and eighth respondents) as follows, that they: "(a) within four months from the date of this order, at their own cost, arrange and/or attend a Trade Practices Compliance Seminar ('the Seminar'); Callinan conducted by a trade practices law specialist in the terms of the Seminar outline annexed; and (ii) which addresses the unconscionable conduct provisions of the Act and, in particular, section 51AA; and (b) within one week of attending the Seminar, notify the [appellant] of that attendance." The outline to which his Honour referred in the orders is as follows: Introduction Overview of principles of unconscionable conduct. The Trade Practices Act Unconscionable conduct and the Trade Practices Act Overview of Part IVA Section 51AA special disability or situation of disadvantage - unfair advantage of superior bargaining position Business principles (a) High risk situations: where weaker party did not fully understand transaction; (ii) where there is no real opportunity for the weaker party to bargain; (iii) where a contract is one-sided; excessive terms and prices; using a position of power to impose unreasonable conditions (b) Dispute avoidance and resolution". The primary judge dismissed the appellant's claim that the respondents had engaged in deceptive conduct contrary to s 52 of the Act and also the appellant's claims in respect of tenants other than Mr and Mrs Roberts. Callinan The appeal to the Full Court of the Federal Court The respondents appealed to the Full Court of the Federal Court161 (Hill, Tamberlin and Emmett JJ). A cross-appeal (with which this Court is not concerned) was also filed and argued by the appellant. There was no dispute between the parties in the Full Court as to the relevant principles. All accepted that it was necessary to demonstrate that Mr and Mrs Roberts were under a "special" disadvantage in their dealings with the respondents in connexion with proposals for the renewal or extension of their lease in accordance with the reasoning of this Court in Commercial Bank of Australia Ltd v Amadio162. The dispute on appeal was whether the circumstances of the parties and Mr and Mrs Roberts were such that the conclusion should be drawn that the latter truly were at a relevant special disadvantage so as to attract the protection of s 51AA of the Act. In a unanimous judgment the Full Court pointed out that this was not a case in which there was any expectation engendered in Mr and Mrs Roberts that they would be granted an unconditional fresh lease: even though Mrs Roberts had given evidence that she had been given an assurance to that effect, the primary judge had made an express finding that he could not be satisfied that such an unequivocal and groundless statement had been made. Their Honours in allowing the respondents' appeal said163: "By offering terms upon which a renewal or extension of the lease could be granted, the Roberts were, in effect, thrown a lifeline. Whether they were better off by foregoing their claims and accepting that lifeline than if the lifeline had not been offered to them may be a matter of judgment for them to make. Clearly, their judgment was that they were better off by accepting the lifeline. It would be curious, therefore, to characterise the conduct that led to that result as unconscionable. A distinction can be drawn between parties who adopt an opportunistic approach to strike a hard bargain and parties who act unconscionably164. It cannot be said that the Roberts' wills were so 161 (2001) 185 ALR 555. 162 (1983) 151 CLR 447. 163 (2001) 185 ALR 555 at 571 [80]-[83]. 164 See Australian Competition and Consumer Commission v Samton Holdings Pty Ltd (2000) ATPR ¶41-791 at 41,403 [99]. Callinan that they did not act overborne independently and voluntarily. Unfortunately for the Roberts, the owners were under no obligation to renew or extend their lease. The Roberts had the choice of either maintaining their legal claims against the owners and losing the opportunity to sell their business or abandoning their claims and gaining the opportunity to sell their business. They made that choice of abandoning their claims. That may have been a hard bargain, but it was not an unconscionable one. It is inappropriate to characterise the detriment that a tenant has by reason of the imminent expiration of a lease as a special disadvantage. His Honour appears to have accepted that proposition. His Honour erred, however, in concluding that the Roberts were under a special disadvantage such that the arrangements that they entered into in December 1996, with proper legal advice, were unconscionable. It follows that there was no contravention of s 51AA in relation to the conduct of the owners from October to December 1996. Since the bargain that was struck between the Roberts and the owners in December 1996 was not unconscionable, it follows, a fortiori, that nothing that was done in May by the owners could be characterised as unconscionable. Equity is concerned with a remedy where a transaction has been entered unconscientious. No transaction was entered into in May. There could be no conduct that could be characterised as unconscionable under the unwritten law." into against good conscience or which The appeal to this Court It is convenient first to set out s 51AA(1) of the Act: Unconscionable conduct within the meaning of the unwritten law of the States and Territories (1) A corporation must not, in trade or commerce, engage in conduct that is unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories." Section 51AA, together with ss 51AB and 51AC, is contained in Pt IVA of the Act. Part IVA was inserted in 1992 and s 51AC was added in 1998. The explanatory memorandum that was promulgated with the Bill for the Act to insert Pt IVA said this of s 51AA: Callinan "The provision embodies the equitable concept of unconscionable conduct as recognised by the High Court in Blomley v Ryan165 and Commercial Bank of Australia v Amadio166. ... The advantages of providing a statutory prohibition for conduct which is already dealt with by equity lie in the availability of remedies under the Principal Act, the potential involvement of the Commission including the possibility of representative actions, and the educative and deterrent effect of a legislative prohibition in the Principal Act. ... Because of the position of the High Court of Australia as the ultimate appellate court for all States and Territories, the 'unwritten law' of the States and Territories is the same. If a court in a State or Territory were thought to deviate from the principles recognised by the High Court, another court exercising its jurisdiction in relation to section 51AA would not be bound to follow that deviation, unless it was satisfied that to do so was consistent (or at least not inconsistent) with the law as recognised by the High Court from time to time." The appellant submitted that unconscionable conduct for the purposes of s 51AA of the Act might arguably fall into any one of four categories: the discrete doctrine of unconscionable dealing resulting from the knowing exploitation by one party of the special disadvantage of another; all specific equitable doctrines, including estoppel, unilateral mistake, relief against forfeiture and undue influence, which are united by the underlying notion of 'unconscionability'; the doctrine of unjust enrichment in addition to all the specific equitable doctrines referred to in (b) above; and any conduct which is contrary to 'conscience' in its ordinary meaning." As will appear, no wide-ranging consideration of what conduct may constitute unconscionable conduct within the "unwritten law", or of the correctness or otherwise of the appellant's attempted categorisation of it in those four last paragraphs is necessary in this case. 165 (1956) 99 CLR 362. 166 (1983) 151 CLR 447. Callinan The appellant's principal submissions This case, the appellant submitted, was concerned with unconscionable conduct involving the unconscionable exploitation by one person of the serious disadvantage of another to secure the disposition of property, or the assumption of contractual or other obligations by the weaker party. At the outset however the appellant sought to characterize the primary judge's decision as an exercise of a discretion, and accordingly not open to interference except upon narrow grounds167 of a kind which were not available here. The primary judge, the appellant claimed, made detailed findings in respect of all facets of the case, including the litigation undertaken by the tenants against the respondent owners, the general strategy adopted by the respondent owners of tying new leases to the abandonment by the tenants of existing litigation, and the circumstances of Mr and Mrs Roberts' sale of the business. Only after considering those matters did the primary judge exercise such discretion as he identified as being available to him on the basis of a disciplined application of existing equitable principles. The careful exercise of discretion, the appellant submitted, is apparent in the primary judge's conclusion that the respondent owners had engaged in unconscionable conduct in respect of Mr and Mrs Roberts, but had not engaged in unconscionable conduct in respect of the other two tenants whose cases were before him. In so exercising his discretion, the primary judge enjoyed the advantages that are inevitably associated with his position as the first instance judge including the benefit of exposure to the nuances of the evidence and the atmosphere at trial. The Full Court should therefore not have substituted its own discretionary analysis for that of the primary judge. The consequences of its doing so were particularly significant in view of the nature of the law under consideration of equitable principles of conscience. The submission continued, that by enacting s 51AA, which expressly locates the notion of conscience in the arena of trade and commerce, the legislature on behalf of the Australian community has clearly signalled its view as to the appropriateness of applying equitable concepts in the commercial world: the courts have a clear obligation to apply s 51AA so as to give proper effect to the section in trade and commerce. 167 House v The King (1936) 55 CLR 499 at 504-505 per Dixon, Evatt and McTiernan JJ; Lovell v Lovell (1950) 81 CLR 513 at 533 per Kitto J; Singer v Berghouse (1994) 181 CLR 201 at 212 per Mason CJ, Deane and McHugh JJ; Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 549 per Toohey and Gummow JJ, 569 per Kirby J. Callinan Equitable jurisdiction, the appellant accepted, however, is to be exercised according to recognised principles. Courts are not armed with a general power to set aside bargains simply because in the eye of a particular judge, they might appear to be unfair, harsh or unconscionable. The primary judge's careful evaluation of the facts and application of relevant principles to those facts show that he was aware of, and appreciated this proposition. Nonetheless the appellant did not seek the intervention of this Court on any different basis from the one upon which it relied in the Federal Court at both levels, that Mr and Mrs Roberts were at a special disadvantage, as the trial judge found, and of a kind to which Amadio168 applied. The appellant's submissions should be rejected The appellant's submission that the primary judge's decision was wholly or substantially a discretionary one should be rejected. The language of s 51AA does not support it. Nor does the concept of unconscionability under the unwritten law support such a proposition. The manner in which the test of unconscionability in relevant aspects is generally stated169 or as discussed in Amadio does not presuppose the exercise of a discretion. Practically, indeed perhaps every judgment of a trial judge requires an evaluation of facts, but the evaluation is a different and subsequent process from the finding of the facts. An evaluation of facts found is precisely one of the exercises which an appellate court is obliged, when an unrestricted right of appeal is available, to undertake. In this case, the evaluation of the facts by the Full Court is to be preferred to that of the primary judge. The respondent owners were under no obligation to grant Mr and Mrs Roberts a new lease although they were under a statutory obligation (which they acknowledged at all material times) to consent to an assignment to a responsible new tenant170. Furthermore, Mr and Mrs Roberts had their opportunities, either to take up a new lease or to seek to enforce what they contended to be a concluded agreement to grant a new lease171. 168 (1983) 151 CLR 447. 169 Blomley v Ryan (1956) 99 CLR 362 at 405 per Fullagar J, 415 per Kitto J; Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 461 per Mason J; Louth v Diprose (1992) 175 CLR 621 at 637 per Deane J. 170 Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), s 10. 171 cf Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR Callinan The facts of this case may be contrasted with those of Bond Brewing (NSW) Pty Ltd v Reffell Party Ice Supplies Pty Ltd172 in which there was no appeal. That was one of a very large number of cases in which there had been a consistent course of dealings by a brewer landlord with respect to extensions and assignments of unwritten tenancy agreements of hotels, and payments by way of goodwill from time to time. It was also a case in which the Court was prepared to hold that the evidence went so far as to establish an estoppel against the owner173. The Full Court did not err in taking the view that the only matters which the evidence established as giving rise to any operative "special disadvantage" were those common to any tenant in similar circumstances. A person obligated under one contract, containing, as with most contracts, temporal limitations as to its operation, is under no obligation to extend or renew the operation of that contract. This is particularly so in the case of leases in respect of which the most naïve of tenants is likely to understand the need for, and accordingly the necessity to obtain at the outset, an option to renew, or, in this case a further option to renew. Such are the utility and flexibility, and therefore the value of options, they are something to be bargained for, and accordingly their presence or absence from the instrument of lease may well be reflected in the quantum of the rent payable during the term. The appellant submitted that the Full Court erred at law in concluding that unconscionable conduct will generally only be found in equity and for the purposes of the section, where the weaker party's will is so overborne as to prevent that party from acting independently and voluntarily. I do not myself read the reasons of the Full Court as conveying that view. What the Court was saying was that whether a person's will had in fact been overborne was a relevant, but not necessarily an essential element in many cases of unconscionability, a proposition which the respondents do not contest. Here, the Full Court held that the evidence showed that Mr and Mrs Roberts were not overborne. They may have been at a commercial disadvantage. That disadvantage resulted from a number of factors, some, if not all of them of their own making, for example: their taking of a lease without a [further] option; their delay in seeking a fresh lease; their failure to seek to enforce what they contended to be a concluded agreement, or to accept in a timely way an unqualified offer of a fresh term; and, their desire to negotiate a different rent from the rent proposed by the respondent owners. 172 Unreported, Supreme Court of New South Wales, 17 August 1987. 173 Unreported, Supreme Court of New South Wales, 17 August 1987 at 35, 43-45. Callinan The appellant seeks to maintain the primary judge's holding that unfair exploitation of disadvantage amounting to unconscionable conduct may occur when an owner uses its bargaining power to "extract a concession" from the tenant that is commercially irrelevant to the terms and conditions of any proposed new lease. The appellant when challenged was unable to point to any authority for such an expansive principle. It is far too broad and imprecise to be accepted in this Court. But in any event the facts of this case do not fall within a principle expressed even in those wide terms. To describe the promise to withdraw from the litigation in the Tribunal as a "concession" is to misdescribe it. Mr and Mrs Roberts had a choice. It was a commercial choice with respect to which they had to make, and did make a judgment. Which was worth more, either in money or certainty: the pursuit of litigation which might or might not involve an appeal, and the quantum of which could be (and did turn out to be) a few thousand dollars only; or a new lease which the respondent owners could not be obliged to grant, but which, if granted, would enable a prompt sale for tens of thousands of dollars to be effected? The word "extract" as used by the primary judge has overtones of coercion. For the respondent owners to seek the best commercial outcome for themselves when they were under no legal obligation to act otherwise, is hardly "to extract a concession". The evidence shows in fact that the respondent owners too had a choice to make between competing commercial considerations of, for example, keeping Mr and Mrs Roberts as tenants, or obtaining another responsible tenant such as Mr Holland, preserving their public image as non-oppressive landlords, fostering the goodwill of their tenants generally, and ridding themselves of irritating and no doubt expensive litigation when the opportunity to do so arose. The choice they too made was a commercial one. They used an entirely unexceptional and unexceptionable right that they had to grant or withhold a new lease upon a condition that enabled them to rid themselves of troublesome litigation. Nor can it be said in my opinion that the "mutual release" was commercially irrelevant to the new lease. The primary judge spoke of commercial irrelevance as if it were a readily identifiable touchstone. With respect I very much doubt this. Perhaps anything arising between parties in negotiation that has a monetary significance, whether direct or indirect, is of commercial relevance, even assuming, which I am not at this stage prepared to do, that the seeming or actual commercial irrelevance of a condition or requirement by one arms length party of another, will render the former's conduct unconscionable. The appellant submitted that either uncontradicted evidence concerning, or findings with respect to four matters had such significance that a finding of unconscionability was justified, and should not have been disturbed by the Full Court. The four significant matters were said to be the respondents' anxiety to renew the tenancies, the concern that the respondent owners held about their Callinan relationship with the tenants generally, their concerns about the litigation against them in the Tribunal, and the use of their leverage of the potential to grant a fresh lease to obtain what was asserted to be an unrelated and undeserved gain. This submission is in substance met by what I have so far said. But, in addition, the expression "unrelated and undeserved gain" is inaccurate. It immediately raises the question of what might be a deserved gain. Nowhere does the appellant in its submissions even attempt to define the nature of such a gain. It seems to me that it is perfectly open however to describe the withdrawal from litigation as part of the price of the grant of a new lease which an owner was in no way obliged to grant, as a not unreasonable quid pro quo. Whenever parties are in a business relationship with each other and they fall out over an aspect of that relationship, it will generally not be unreasonable or indeed unconscionable for them to seek to insist upon their legal rights, or to require that one party give up some right in exchange for the conferral of a new right upon that party. I cannot help observing before leaving this submission that insufficient regard seems to have been given at first instance to the respective rights involved. I earlier described Mr and Mrs Roberts' claim at the Tribunal as uncertain as to both outcome and quantum. It certainly appears that the claim as formulated was overly ambitious and also raised the spectre of litigation which, including appeals, might in the end not necessarily have been to the nett financial benefit of Mr and Mrs Roberts. Whilst the claim of Mr and Mrs Roberts was on foot it provided them with a "bargaining chip" in their negotiations for a fresh lease, and little more than that. I do not think that it could even be fairly said that Mr and Mrs Roberts were exposed to the "rough edge"174 of their contract with the respondent owners. The appellant sought to describe the litigation in which Mr and Mrs Roberts were participating as "bona fide and serious litigation" as opposed to trivial or vexatious litigation. Experience tells that the outcome of much litigation is unpredictable. It was for these reasons no doubt that the respondent owners were advised by their lawyers of the possibility that their conduct might conceivably offend s 51AA of the Act, a matter incidentally relied upon by the appellant but which in my opinion has nothing relevant to say about the quality of their conduct in this case. Prudent business people will always seek legal advice, and the best lawyers will give it conservatively with a careful eye to the uncertainties, and desirability of the avoidance of litigation. The appellant contended that the Full Court had misconstrued s 51AA of the Act. In doing so it inaccurately attributed to the Court a holding that in no circumstances of dealings between an owner and a lessee upon the expiry of the 174 See Bridge v Campbell Discount Co Ltd [1962] AC 600 at 626 per Lord Radcliffe. Callinan lease, could there be unconscionable conduct on the part of the landlord. What the Full Court held, and correctly so, is that there is nothing special about a situation in which a tenant without an option is anxious to obtain a fresh lease, and the landlord, conscious of that anxiety, utilizes it to obtain a business advantage, whether by way of a higher rent or otherwise. The Full Court did not rule out the application of s 51AA to the granting of leases in trade and commerce. Their Honours were applying themselves to the facts before them, and on those facts differed, as I think they were bound to do, from the conclusion of the trial judge. It is possible to dispose of this case on its own facts. The appeal does not provide the occasion, as indeed the appellant ultimately conceded, for a complete exposition of the meaning and operation of s 51AA of the Act or the current law of unconscionability. The case and the appeal in the Federal Court were conducted upon the complete basis that Mr and Mrs Roberts' situation, and the respondent owners' conduct were governed by the statements of Mason J in Amadio175. There his Honour first referred to statements by Fullagar J and Kitto J in Blomley v Ryan176 respectively. In that case the former had said: "The circumstances adversely affecting a party, which may induce a court of equity either to refuse its aid or to set a transaction aside, are of great variety and can hardly be satisfactorily classified. Among them are poverty or need of any kind, sickness, age, sex, infirmity of body or mind, drunkenness, illiteracy or lack of education, lack of assistance or explanation where assistance or explanation is necessary. The common characteristic seems to be that they have the effect of placing one party at a serious disadvantage vis-à-vis the other." Kitto J also referred to illness, but added ignorance and financial need or other circumstances affecting a person's ability to conserve his own interests as relevant. It is important to note that although their Honours expressed themselves very broadly in the passages to which I have referred, I do not understand that the presence of one or more of the factors which they mentioned necessarily dictated that in every such case unconscionability should be found. Take for example Kitto J's reference to "circumstances affect[ing a person's] ability to conserve his 175 (1983) 151 CLR 447 at 462. 176 (1956) 99 CLR 362 at 405 per Fullagar J, 415 per Kitto J. Callinan own interests". Use of the word "conserve" suggests the maintenance of a pre- existing or current right or interest. Two circumstances which almost always will have the capacity to affect a person's ability to protect or further his or her own interests, are the financial capacity of that person, and its relativity to the financial capacity of a person with a competing interest. Mason J was conscious of this in Amadio, and accordingly qualified the word "disadvantage" by the adjective "special" in order to disavow any suggestion that the principle applies whenever, and because there is some difference, even substantial, in the bargaining power of the parties. His Honour also obviously thought it necessary to emphasize that the relevant conditions or circumstances calling for the application of the doctrine be ones which seriously affect the ability of an innocent party to make the judgment as to his or her own best interests, when the other party knows, or ought to know of that condition or circumstance, and its effect on the innocent party. The appellant's attempt to bring Mr and Mrs Roberts and the relevant circumstances within the principle stated by Mason J, fails. There was no circumstance seriously affecting the ability of Mr and Mrs Roberts to make a judgment as to where their best interests lay. They recognised and understood what was in their best interests, and acted accordingly by undertaking to withdraw from the proceedings in the Tribunal and by taking up the opportunity of obtaining a fresh lease. It is difficult to see how any prudent choice could be otherwise, even assuming that their daughter's illness, and their concern about it, were personal circumstances which were relevant and capable of giving rise to a special disadvantage, here, again a proposition which I seriously doubt. What I have said is sufficient to dispose of the appeal. There are only two other matters to which I should however refer. The first is that the Act does make separate and explicit provision for the unlawful taking of advantage of a substantial degree of power in a market, by, for example s 46. There is no necessity to explore the ambit of that section in this case or its relationship with s 51AA. It is sufficient to point out that its presence may serve to indicate the, or some circumstances in which the use of a superior bargaining position may be relevant. Nor is it necessary in this case to seek to resolve the difficulties bound to arise in applying s 51AA of the Act, and therefore principles relating to unconscionability, to trade and commerce generally, in which the bargaining position, because of superior resources, skill, judgment, timing or indeed simply luck on one side, of the parties is rarely likely to be equal. The second matter is the nature of the orders which were made by the primary judge after his Honour made the declarations that the respondents had infringed s 51AA of the Act. The orders which I have earlier set out were that the fourth, fifth, sixth and eighth respondents be, in effect, "re-educated". There was no argument in this Court that the orders which were made were not an exercise of federal judicial power. Nor was any attention given to Callinan the legality or practicality of their enforcement by proceedings for contempt. I will accordingly confine myself to a consideration of their appropriateness and availability on the assumption that they might properly constitutionally be made pursuant to s 87 or a combination of ss 80, 82 and 87 of the Act177. The conduct in question was conduct found to have occurred in relation to one tenancy only. The effect of the conduct even on his Honour's view of it was long spent. There was no suggestion of any repetition of it178. The seventh and eighth respondents no longer had any interest in the Centre, and the eighth respondent was not even currently employed in the relevant industry. The orders assumed, either that trade practices law specialists regularly conducted trade practices compliance seminars, or that it was appropriate for a trial judge to order and design a particular trade practices seminar, or to approve the appellant's proposal for one. The fact that the appellant may have issued in 1998 "A guide to unconscionable conduct in business transactions" and that in so doing it may have been acting within s 28 of the Act, could provide no basis for orders of the kind made by the primary judge here. It is unnecessary, because of the other errors identified, to give consideration to the effect (if any) that the making of those unjustified orders might have on the declarations and reasoning to support them made and given earlier by the trial judge. The appeal should be dismissed. I agree with the orders proposed by 177 See eg ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 at 264-266 per Gummow J. 178 Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd [2000] FCA 1893 at [8].

HIGH COURT OF AUSTRALIA Matter No M155/2011 THE PILBARA INFRASTRUCTURE PTY LTD & ANOR APPELLANTS AND AUSTRALIAN COMPETITION TRIBUNAL & ORS RESPONDENTS Matter Nos M156/2011 & M157/2011 THE PILBARA INFRASTRUCTURE PTY LTD & ANOR APPELLANTS AND AUSTRALIAN COMPETITION TRIBUNAL & ORS RESPONDENTS Matter No M45/2011 THE NATIONAL COMPETITION COUNCIL APPLICANT AND HAMERSLEY IRON PTY LTD & ORS RESPONDENTS Matter No M46/2011 THE NATIONAL COMPETITION COUNCIL APPLICANT AND ROBE RIVER MINING CO PTY LTD & ORS RESPONDENTS The Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal The Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal The Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal The National Competition Council v Hamersley Iron Pty Ltd The National Competition Council v Robe River Mining Co Pty Ltd [2012] HCA 36 14 September 2012 M155/2011, M156/2011, M157/2011, M45/2011 & M46/2011 ORDER In matters M155/2011, M156/2011 and M157/2011: Appeal allowed. Set aside the orders of the Full Court of the Federal Court of Australia made on 4 May 2011 and 16 May 2011 and, in their place, order that a writ of certiorari, directed to the Australian Competition Tribunal, issue to quash the Australian Competition Tribunal's determination the subject of the proceeding. Remit the matter to the Australian Competition Tribunal for determination according to law. Each party and the intervener bear its own costs in this Court and in the Full Court of the Federal Court of Australia. In matters M45/2011 and M46/2011: Application for special leave to appeal dismissed. No order as to costs. On appeal from the Federal Court of Australia Representation J T Gleeson SC and C A Moore SC with M I Borsky for the appellants in M155/2011, M156/2011 and M157/2011, for the twelfth and thirteenth respondents in M45/2011 and for the tenth and eleventh respondents in M46/2011 (instructed by DLA Piper Australia) S J Gageler SC, Solicitor-General of the Commonwealth with P J Hanks QC and J P Slattery for the applicant in M45/2011 and M46/2011 and intervening on behalf of the National Competition Council in M155/2011, M156/2011 and M157/2011 (instructed by Clayton Utz Lawyers) N J Young QC with P W Collinson SC and S H Parmenter for the second to tenth respondents in M155/2011, for the second to eighth respondents in M156/2011 and M157/2011, for the first to ninth respondents in M45/2011 and for the first to seventh respondents in M46/2011 (instructed by Allens A C Archibald QC with M H O'Bryan SC for the eleventh and twelfth respondents in M155/2011, for the ninth and tenth respondents in M156/2011 and M157/2011, for the tenth and eleventh respondents in M45/2011 and for the eighth and ninth respondents in M46/2011 (instructed by Ashurst Australia) Submitting appearance for the first respondent in M155/2011, M156/2011 and M157/2011, for the fourteenth respondent in M45/2011 and for the twelfth respondent in M46/2011 Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS The Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal The Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal The Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal The National Competition Council v Hamersley Iron Pty Ltd The National Competition Council v Robe River Mining Co Pty Ltd Trade practices – Access to services – Minister's decision whether to declare services relating to railway lines in Pilbara pursuant to s 44F of Trade Practices Act 1974 (Cth) – Section 44H(4) required Minister to be satisfied of certain matters – Whether criterion for declaration of service in s 44H(4)(b) imposes test of private profitability – Whether public interest criterion in s 44H(4)(f) requires or permits inquiry into likely net balance of social costs and benefits – Whether any residual discretion. law – Application Administrative to Australian Competition Tribunal ("Tribunal") under s 44K for review of Minister's decision to declare pursuant to s 44F – Review by Tribunal is re-consideration of the matter – Nature of review to be undertaken by Tribunal – Whether Tribunal could consider any material parties considered relevant. Words and phrases – "public interest", "re-consideration of the matter", "re-hearing of the matter", "uneconomical for anyone to develop another facility to provide the service". Trade Practices Act 1974 (Cth), Pt IIIA, ss 44B, 44F, 44H, 44K, 163A. FRENCH CJ, GUMMOW, HAYNE, CRENNAN, KIEFEL AND BELL JJ. Iron ore mined in the Pilbara region of Western Australia is transported by train to ports at Dampier, Cape Lambert and Port Hedland. There it is loaded on to ships and exported from Australia. BHP Billiton Ltd ("BHPB") and Rio Tinto Ltd ("Rio Tinto"), two of the world's largest iron ore producers, conduct mining operations in the Pilbara. The details of the corporate structures through which BHPB and Rio Tinto conduct these operations need not be noticed. It is enough, for present purposes, to refer compendiously to BHPB and Rio Tinto. BHPB operates two railway lines which carry the ore mined by BHPB to port: the Goldsworthy line and the Mt Newman line which each terminate at Port Hedland. Rio Tinto operates two other railway lines which carry the ore mined by Rio Tinto to port: the Hamersley line which terminates at Dampier and the Robe line which terminates at Cape Lambert. Fortescue Metals Group Ltd ("FMG") also conducts mining operations in the Pilbara. It wants access to the railway lines and associated infrastructure that BHPB and Rio Tinto own and use. Whether it would take up that access and on what terms access would be made available are questions that do not now arise. Part IIIA of the Trade Practices Act 1974 (Cth) (now called the Competition and Consumer Act 20101) ("the Act") provides for the processes by which third parties may obtain access to infrastructure owned by others. The Act provides for a process by which a particular "service" may be "declared". A "service" is defined2 as: "a service provided by means of a facility and includes: the use of an infrastructure facility such as a road or railway line; handling or transporting things such as goods or people; 1 Trade Practices Amendment (Australian Consumer Law) Act (No 2) 2010 (Cth), Sched 5, item 2. s 44B. Crennan Bell a communications service or similar service; but does not include: the supply of goods; or the use of intellectual property; or the use of a production process; except to the extent that it is an integral but subsidiary part of the service." Part IIIA of the Act also provides (chiefly in Div 3 (ss 44R-44ZUA), Div 4 (ss 44ZV-44ZY) and Div 6 (ss 44ZZA-44ZZC)) for a second, distinct stage, following the declaration stage, in the processes for obtaining access to infrastructure: the making of agreements or arbitrated determinations regulating the terms on which a third party may have access to a declared service. Because there are still disputes about whether the relevant services should be declared, no step has yet been taken under this second stage of the processes for obtaining access to any of the four railway lines owned and operated by BHPB and Rio Tinto. The appeals to this Court concern only the first stage of the processes for which Pt IIIA provides: should any of the services be declared? The process for declaration of a service The process for declaration of a service proceeds by at least two steps: first, a recommendation made3 by the National Competition Council ("the NCC") that a particular service be declared and second, a decision4 by the "designated Minister" to declare the service. The NCC is established by s 29A of the Act. Its functions include5: carrying out research into matters referred to the Council by the Minister; and s 44F(2)(b). s 44H(1). s 29B(1). Crennan Bell providing advice on matters referred to the Council by the Minister." A person may not be appointed to the NCC unless the Governor-General is satisfied6 (among other things) that "the person qualifies for the appointment because of the person's knowledge of, or experience in, industry, commerce, economics, law, consumer protection or public administration". At each of the two steps for declaration of a service (recommendation by the NCC and decision by the Minister to declare) the Act provides7, and provided at the times relevant to these matters, that the decision maker must be satisfied of all of six specified matters: that access (or increased access) to the service would promote a material increase in competition in at least one market (whether or not in Australia), other than the market for the service; that it would be uneconomical for anyone to develop another facility to provide the service; that the facility is of national significance, having regard to: the size of the facility; or the importance of the facility to constitutional trade or commerce; or (iii) the importance of the facility to the national economy; that access to the service can be provided without undue risk to human health or safety; that access to the service is not already the subject of an effective access regime; s 29C(3)(a). ss 44G(2) and 44H(4). Crennan Bell that access (or increased access) to the service would not be contrary to the public interest." In this Court attention focused principally on criteria (b) and (f). What does criterion (b) mean when it speaks of it being "uneconomical for anyone to develop another facility to provide the service"? What matters can be taken into account under criterion (f) when it requires the decision maker to be satisfied that access to the service "would not be contrary to the public interest"? And attention was also directed to a further question: if a decision maker is satisfied of each of the six matters stated in the Act, is there nonetheless a discretion to be exercised? If so, what are the criteria that inform the exercise of that discretion? The Act provides for a further step in the process for declaration of a service, beyond the making of a recommendation by the NCC and a decision by the Minister. If the Minister decides (or is deemed to decide8) not to declare a service, the person who applied for the declaration recommendation may apply9 for review of the Minister's decision by the Australian Competition Tribunal ("the Tribunal"). And if the Minister declares a service, the provider of the service may apply10 for review of the declaration by the Tribunal. Decisions made by the Tribunal on a review of a ministerial decision to declare or not to declare a service are amenable to judicial review in the Federal Court of Australia on application under the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the ADJR Act") or s 39B of the Judiciary Act 1903 (Cth) or on application for declarations and orders (including orders by way of, or in the nature of, prohibition, certiorari or mandamus) under s 163A of the Act. The present appeals to this Court and the associated applications for special leave to appeal by the NCC concern orders made by the Full Court of the Federal Court of Australia on applications of these kinds. Before identifying the issues that are raised by the appeals (and the NCC applications for special leave) a little more should be said about the history of the proceedings. s 44H(9). s 44K(2). 10 s 44K(1). Crennan Bell The history of the proceedings In 2004, FMG applied to the NCC for its recommendation that part of the Goldsworthy railway line and part of the Mt Newman railway line be declared. In 2007, a wholly owned subsidiary of FMG, The Pilbara Infrastructure Pty Ltd ("TPI"), applied to the NCC for its recommendation that the whole of the Goldsworthy railway line be declared. TPI made a similar application to the NCC in respect of the Hamersley railway line and two of its spur lines. In January 2008, TPI made a similar application to the NCC in respect of the Robe railway line. It is convenient to refer to FMG and TPI compendiously as "Fortescue", and to refer only to the railway lines which were the subject of the to certain associated those applications extended applications, although infrastructure. In March 2006, the NCC recommended that the Mt Newman line be declared. In August 2008, it recommended that the Goldsworthy, Hamersley and Robe lines be declared. The designated Minister11, the Treasurer of the Commonwealth, did not make any declaration about the Mt Newman line within the period fixed by Pt IIIA of the Act and was therefore deemed12 to have decided not to declare that service. The Minister declared each of the Goldsworthy, Hamersley and Robe railway lines for a period of 20 years. Rio Tinto applied for review by the Tribunal of the declarations made in respect of the Hamersley and Robe lines; BHPB applied for review of the declaration made in respect of the Goldsworthy line; Fortescue applied for review of the refusal to declare the Mt Newman line. The Tribunal set aside the decision to declare the Hamersley line and decided that the service provided by the Hamersley line should not be declared. The Tribunal varied the Minister's decision to declare the Robe line for a period 11 Section 44D provided, in effect, that in declaring a service the Commonwealth Minister administering the Act was the designated Minister unless the service provider was by a State or Territory party to the Competition Principles Agreement, in which case the responsible Minister of that State or Territory was the designated Minister. 12 s 44H(9). Crennan Bell of 20 years so that it would expire after 10 years. The Tribunal affirmed the decision to declare the Goldsworthy line for 20 years and the (deemed) decision not to declare the Mt Newman line. Fortescue brought proceedings in the Federal Court of Australia challenging the Tribunal's decision to set aside the Minister's decision to declare the Hamersley line. Fortescue alleged (among other things) that the Tribunal had misconstrued and misapplied s 44H(4)(a) and (f) and that the Tribunal had acted in breach of the requirements of procedural fairness because it received and acted on material provided by Rio Tinto after the conclusion of the proceedings before the Tribunal. By notice of contention, Rio Tinto alleged that the Tribunal had misconstrued and misapplied s 44H(4)(b) in its application to the Hamersley line but that, properly applied, s 44H(4)(b) required the Tribunal to refuse to declare the Hamersley line. In a separate proceeding, Fortescue also challenged the Tribunal's decision to vary the period for which the Robe line was to be declared. Fortescue alleged that the Tribunal's decision was unreasonable in light of the findings that it had made in relation to the application of s 44H(4)(f). By another separate proceeding, Rio Tinto challenged the decision of the Tribunal not to set aside the Minister's declaration of the Robe line. Rio Tinto advanced its argument on the basis of the same construction of s 44H(4)(b) that underpinned its notice of contention in Fortescue's proceeding about the Hamersley line. All of the proceedings were heard by a Full Court of the Federal Court (Keane CJ, Mansfield and Middleton JJ). The Full Court concluded13 that the Tribunal had misconstrued and misapplied s 44H(4)(b). The Court also concluded14 that the Tribunal had not accorded Fortescue procedural fairness. But the Court held15 that, on the construction of s 44H(4)(b) which it favoured, 13 Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal (2011) 193 FCR 14 (2011) 193 FCR 57 at 109-110 [132]-[135]. 15 (2011) 193 FCR 57 at 110 [136]-[138]. Crennan Bell Fortescue was bound on the facts found by the Tribunal to fail in its application to the Tribunal in relation to the Hamersley line. The Court further held16 that, because the Tribunal had misconstrued s 44H(4)(b), Rio Tinto's appeal in relation to the Robe line should be allowed and the Tribunal's decision set aside. The Court ordered that the Minister's decision to declare the Robe line should be set aside. Appeals and applications for special leave to appeal to this Court By special leave, Fortescue appeals to this Court against the orders dismissing Fortescue's application to the Federal Court in relation to the Hamersley line and against both the orders allowing Rio Tinto's application in relation to the Robe line and the orders dismissing Fortescue's application in relation to the period for which that line should be declared. The NCC was granted leave to intervene in the proceedings in the Federal Court. The NCC applied for special leave to appeal against the orders made by the Full Court and was heard on the argument of the appeals by Fortescue. The issues which the NCC seeks to agitate in this Court are all raised by the appeals by Fortescue. That being so, there is nothing to be gained by granting the NCC special leave to appeal against the orders made by the Full Court. The NCC's arguments in this Court should be received and treated as made pursuant to leave to intervene in the appeals brought by Fortescue. In these circumstances, it is not necessary to consider any question that would otherwise arise about the standing of the NCC to appeal against orders made by the Full Court in proceedings in which the NCC had intervened. The applications by the NCC for special leave to appeal should be dismissed. There should be no order as to the costs of those applications. As has been noted, attention in this Court focused, for the most part, on three questions. What does criterion (b) mean? What matters may be taken into account under criterion (f)? Is there a residual discretion? But before considering those questions it is necessary to consider the nature of the Tribunal's task and to begin that consideration by explaining how that issue arose in these proceedings. 16 (2011) 193 FCR 57 at 110 [136]-[137], [140]. Crennan Bell An issue emerges late Late in the argument of the appeals to this Court, there emerged an issue which had not previously been raised by any party or by the NCC, whether in the Tribunal, the Federal Court or this Court. What was the nature of the task which the Tribunal was required to perform when asked to review the Minister's decision? Was it, as the Tribunal and those who were represented before the Tribunal took it to be, a fresh hearing on new evidence of whether a service should be declared? Or was the task more limited? As the Tribunal recorded17, the applicant for declarations (Fortescue) and the service providers (BHPB and Rio Tinto) "took the opportunity to present [to the Tribunal] material far in excess of that which had been placed before the minister. In all, the parties filed 130 affidavits from 73 witnesses, together with a large number of documents. This material took up approximately 70 large lever arch files. The transcript of the hearing runs for over 3300 pages. Of the witnesses, 15 were expert economists and 29 were, in alphabetical order, bankers, computer simulation experts, engineers, environmental scientists, geologists, metallurgists, quantity surveyors, rail modellers and train schedulers, among others." (emphasis added) The hearing before the Tribunal occupied 42 sitting days. The Tribunal's reasons run to 1,351 paragraphs. Should Fortescue now be permitted to allege that the Tribunal undertook a task which the Act did not give it? Leave to amend? In the course of submissions in reply in this Court, Fortescue sought leave to amend its notices of appeal to allege in each matter that the Tribunal's task neither required nor permitted it to conduct (as it had) a wholly fresh hearing on new evidence. The respondents to the appeals and the NCC opposed the grant of leave to amend. 17 Re Fortescue Metals Group Ltd (2010) 271 ALR 256 at 268 [26]. Crennan Bell Fortescue should have the leave that it seeks. These are not cases in which the principle applied in Suttor v Gundowda Pty Ltd18 is engaged. The point that now arises could not have been met by any evidence led at any earlier stage of the matter. Had the point been taken earlier, less not more evidence would have been called. The importance of the general principle stated in Coulton v Holcombe19, that "[i]t is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial", is evident. That is why, as was said in University of Wollongong v Metwally [No 2] 20: "It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so." But in this case, the question that Fortescue now seeks to raise goes to the root of the judicial review applications that were mounted in the Federal Court. It is not to the point that the parties acquiesced in the Tribunal taking, and even encouraged it to take, the course it did. The respondents and the NCC all pointed out in their submissions in answer to the application for leave to amend that s 44K of the Act has been substantially amended21 since the Tribunal made its decisions in these matters. They submitted that leave to amend should therefore be refused on the ground that the point which Fortescue sought to raise was not one which would bear upon the Tribunal's conduct of future reviews. As will later be explained, the amendments that have been made to s 44K will not apply to these matters when they are remitted to the Tribunal. Resolution of the issue is thus necessary for the proper future disposition by the Tribunal of the present matters. But apart 18 (1950) 81 CLR 418; [1950] HCA 35. 19 (1986) 162 CLR 1 at 7; [1986] HCA 33. 20 (1985) 59 ALJR 481 at 483; 60 ALR 68 at 71; [1985] HCA 28. 21 Trade Practices Amendment (Infrastructure Access) Act 2010 (Cth), s 3, Sched 1, items 11-13. Crennan Bell from this consideration, the point that has already been made – that the question which Fortescue raises is one that goes to the root of the applications for judicial review – compels the grant of the leave which Fortescue seeks. The applications for judicial review that were made to the Federal Court could not be decided without first deciding what was the task which the Act committed to the Tribunal. That requires identification of the tasks committed to the NCC and the Minister. Only when the Tribunal's task has been properly identified can this Court decide what orders the Full Court should have made on the applications for relief under the ADJR Act, s 39B of the Judiciary Act or s 163A of the Act. The Tribunal's task The task given to the Tribunal was identified in s 44K of the Act which, at the times relevant to these matters, provided: If the designated Minister declares a service, the provider may apply in writing to the Tribunal for review of the declaration. If the designated Minister decides not to declare a service, an application in writing for review of the designated Minister's decision may be made by the person who applied for the declaration recommendation. (3) An application for review must be made within 21 days after publication of the designated Minister's decision. The review by the Tribunal is a re-consideration of the matter. Note: There are target time limits that apply to the Tribunal's decision on the review: see section 44ZZOA. For the purposes of the review, the Tribunal has the same powers as the designated Minister. The member of the Tribunal presiding at the review may require the Council to give information and other assistance and to make reports, as specified by the member for the purposes of the review. If the designated Minister declared the service, the Tribunal may affirm, vary or set aside the declaration. Crennan Bell If the designated Minister decided not to declare the service, the Tribunal may either: affirm the designated Minister's decision; or set aside the designated Minister's decision and declare the service in question. (9) A declaration, or varied declaration, made by the Tribunal is to be taken to be a declaration by the designated Minister for all purposes of this Part (except this section)." Obviously, a centrally important question is what is meant by saying that "[t]he review by the Tribunal is a re-consideration of the matter". First, what is "the matter"? The "matter" referred to in s 44K(4) was identified in s 44K(1) and (2). In a case where the Minister has declared a service, the "matter" is "the declaration" made by the Minister. In a case where the Minister decided not to declare a service, the matter is "the designated Minister's decision" not to make a declaration. In both cases, the hinge about which the identification of the "matter" turns is what the Minister has done, not what the NCC did when it made its declaration recommendation. The requirement of s 44K(4) – that the Tribunal review the matter and that the review be "a re-consideration of the matter" – necessitates identification of the Minister's task. It is that task, and the result of its performance, which is to be subject to "re-consideration" by the Tribunal. It will be necessary to consider the Minister's task in more detail. Immediately, however, it is enough to notice that the Minister's task was identified by s 44H(1) as being, "[o]n receiving a declaration recommendation" by the NCC, to "either declare the service or decide not to declare it". This task began when the Minister was given "a declaration recommendation" by the NCC. What was the NCC's task? The NCC's task As the Act stood at the times relevant to these matters, when the NCC received an application for a declaration recommendation, it was obliged22 22 s 44F(2)(a). Crennan Bell (unless the provider was the applicant) to tell the provider of the service that the application had been received. The Act required23 the NCC to use its best endeavours to make a recommendation on an application under s 44F within four months of receiving the application (or such further period as the NCC fixed). If the NCC did extend the time for making its recommendation it was bound24 to notify the applicant and the provider of the service of the day to which it had extended the period and to give public notice of its decision. The NCC was given power to invite25 public submissions on an application for a declaration recommendation. But the Act was silent about what steps the NCC should take to allow the provider of the service to answer any submissions or other material advanced either by the applicant or in public submissions in support of the application for a declaration recommendation. And although the NCC was bound to publish26 both its recommendation and its reasons for the recommendation and to give a copy of that publication to both the applicant and the provider of the service, s 44GC(3) required the NCC to take these steps "on the day the designated Minister publishes his or her decision on the recommendation or as soon as practicable after that day". The significance of the six mandatory criteria It is next necessary to consider whether the content of the criteria of which both the NCC and the Minister had to be satisfied before recommending declaration of a service and deciding to declare a service sheds any light on the tasks that the Act required the NCC, the Minister and the Tribunal to perform. Those criteria have been set out earlier in these reasons. Criterion (f) was "that access (or increased access) to the service would not be contrary to the public interest". It is well established27 that, when used in 23 s 44GA. 24 s 44GA(3) and (5). 25 s 44GB. 26 s 44GC. 27 See, for example, O'Sullivan v Farrer (1989) 168 CLR 210 at 216; [1989] HCA 61; McKinnon v Secretary, Department of Treasury (2006) 228 CLR 423 at 443-444 [55]; [2006] HCA 45; Osland v Secretary to Department of Justice (2008) 234 (Footnote continues on next page) Crennan Bell a statute, the expression "public interest" imports a discretionary value judgment to be made by reference to undefined factual matters. As Dixon J pointed out in Water Conservation and Irrigation Commission (NSW) v Browning28, when a discretionary power of this kind is given, the power is "neither arbitrary nor completely unlimited" but is "unconfined except in so far as the subject matter and the scope and purpose of the statutory enactments may enable the Court to pronounce given reasons to be definitely extraneous to any objects the legislature could have had in view". It follows that the range of matters to which the NCC and, more particularly, the Minister may have regard when considering whether to be satisfied that access (or increased access) would not be contrary to the public interest is very wide indeed. And conferring the power to decide on the Minister (as distinct from giving to the NCC a power to recommend) is consistent with legislative recognition of the great breadth of matters that can be encompassed by an inquiry into what is or is not in the public interest and with legislative recognition that the inquiries are best suited to resolution by the holder of a political office. Another criterion of which the NCC and the Minister must be satisfied (criterion (c)) may also direct attention to matters of broad judgment of a generally political kind. It required the NCC and the Minister to be satisfied that the facility in question is of national significance having regard to its size, or the importance of the facility to constitutional trade or commerce, or the importance of the facility to the national economy. The other criteria that were to be considered (like criterion (a) about competition and criterion (b) about development of another facility) were of a more technical kind. The legislative scheme is consistent with it being expected that the conclusions reached, and reasoning adopted, by the NCC in relation to these more technical issues would likely be influential on the Minister. CLR 275 at 300 [57], 323 [137]; [2008] HCA 37; Osland v Secretary to Department of Justice [No 2] (2010) 241 CLR 320 at 329 [13]; [2010] HCA 24. See also Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492 at 505; [1947] HCA 21. 28 (1947) 74 CLR 492 at 505. Crennan Bell The Minister's task The Minister had only a short time to decide how to respond to a declaration recommendation. While the NCC could extend29 the time for making its recommendation about an application for a declaration, the Minister was given 60 days after receiving the NCC's declaration recommendation to decide whether to declare the service. Section 44H(9) provided that, if the Minister did not publish his or her decision on the declaration recommendation within 60 days after receiving it, the Minister was taken, at the end of that period, to have decided not to declare the service and to have published that decision. In such a case, the Minister would publish no reasons for decision but the NCC's reasons for recommending a declaration would be published pursuant to s 44GC. If the Minister made a decision, the Act obliged30 the Minister to publish that decision and the reasons for it. There is one other aspect of the Act's treatment of the Minister's task to which attention should be drawn. The Minister, unlike the Tribunal31, was given no express power to request any further information, assistance or report from the NCC. The statutory supposition appears to have been that the Minister could and would make a decision on the NCC's recommendation without any need for further information from the NCC. The content of those provisions of Pt IIIA to which reference has been made suggests that it was expected that, armed with a recommendation from an expert and non-partisan body (the NCC), the Minister would make a decision quickly and would do so according to not only the Minister's view of the public interest but also the expert advice given by the NCC about the more technical criteria of which the Minister had to be satisfied before a declaration could be made. And it is the Minister's decision, not the NCC's recommendation, that was the matter that was to be reviewed by the Tribunal. 29 s 44GA. 30 s 44HA(1). 31 s 44K(6). Crennan Bell Section 44K(4) – a "review" which is a "re-consideration" Section 44K(4) is the central provision defining the Tribunal's task. The text of s 44K is set out earlier in these reasons and it will be recalled that it provided that "[t]he review by the Tribunal is a re-consideration of the matter". The requirement that the Tribunal review the Minister's decision neither permits nor requires a quasi-curial trial between the access seeker and the facility provider as adversarial parties, on new and different material, to determine whether a service should be declared. That would not be a "review" of the Minister's decision which was "a re-consideration of the matter". To explain why that is so, it is desirable to begin by noticing some aspects of relevant legislative history. As originally enacted, the Act gave two kinds of task to the Tribunal (then known as the Trade Practices Tribunal): first, the Tribunal was given power to conduct a review under Pt IX (ss 101-110) of a determination by what was then the Trade Practices Commission (now the Australian Competition and Consumer Commission) made in relation to an application for, or the revocation of, certain authorisations under Pt VII (ss 88-95) in respect of restrictive trade practices; and second, the Tribunal was given power, on reference by the Minister, to inquire and report into any matter relevant to the exercise of certain powers by the Governor-General under Pt X (ss 111-146) in relation to overseas cargo shipping32. The first kind of task was described by s 101(2) as "[a] review by the Tribunal" of the determination by the Commission and as "a re-hearing of the matter". Given that the Commission, in determining an application for authorisation, was bound33 to "take into account any submissions in relation to the application made to it by the applicant or any other person" and was given34 power, "where it considers it appropriate to do so, [to] hold a public hearing in relation to the application", the reference to the review by the Tribunal being "a re-hearing" was evidently apt. 32 The provisions of Pt X were repealed and new provisions substituted by Trade Practices (International Liner Cargo Shipping) Amendment Act 1989 (Cth), s 4. The detail of those changes need not be noticed. Crennan Bell Division 2 of Pt IX (ss 103-110) made more particular provision for the procedure of and evidence before the Tribunal in reviews by the Tribunal of determinations of the Commission. Section 103 made general provision for the procedure of the Tribunal including a provision35 that the Tribunal was not bound by the rules of evidence. Section 105(1) gave the Tribunal power to take evidence on oath or affirmation and for that purpose permitted a member of the Tribunal to administer an oath or affirmation. Both by their location as a division of Pt IX, and in their terms, the provisions of Div 2 of Pt IX regulating the procedure of and evidence before the Tribunal were apt to apply only to the particular kind of proceeding for which Div 1 of Pt IX provided – an application under s 101(1) for a review of a determination by the Commission regarding authorisation. The second kind of task which, as originally enacted, the Act gave to the Tribunal was initiated by the Minister referring36 to the Tribunal "for inquiry and report any matter relevant to the exercise of the power of the Governor-General" to make certain orders under Pt X (a part of the Act dealing with overseas cargo shipping). A Tribunal inquiry of that kind was regulated by Div 5 of Pt X (ss 132-143). Those provisions regulating an inquiry by the Tribunal were evidently intended to operate separately from the provisions of Div 2 of Pt IX. That is why s 132(2)(b) of the Act provided, as it did, that s 43 (concerning composition of the Tribunal) applied "as if ... the inquiry ... were the hearing and determination of proceedings" (emphasis added). The provisions of Div 2 of Pt IX (regulating proceedings before the Tribunal on a review of a determination of the Commission as a re-hearing) did not apply to the performance of this second kind of task. The Trade Practices Amendment Act 1977 (Cth) made some amendments to Pt IX of the Act, including37 repealing the existing s 102 and substituting a new s 102 to provide for the functions and powers of the Tribunal. The essential framework of the provisions of Pt IX was, however, unaltered. In particular, the provisions of Div 2 of Pt IX applied to reviews by the Tribunal of identified 35 s 103(1)(c). Crennan Bell kinds of decision by the Commission and s 101(2) as substituted38 continued to provide that a review by the Tribunal "is a re-hearing of the matter". In 2006 further substantial amendments were made to the Act. The Trade Practices Legislation Amendment Act (No 1) 2006 (Cth) ("the 2006 Amendment Act") added39 a new division to Pt VII of the Act (Div 3) dealing with merger clearances and authorisations. the new Div 3 of Pt VII provided to give merger clearances and subdiv C provided for the Tribunal to give merger authorisations. A new division was added40 to Pt IX (Div 3) to provide for the review by the Tribunal of the Commission's determination on merger clearances. Subdivision B of the Commission for Of greatest significance for present purposes, the 2006 Amendment Act inserted41 a new s 102A in Div 1 of Pt IX. The new section defined "proceedings" and provided: "In this Part: proceedings includes: applications made to the Tribunal under Subdivision C of Division 3 of Part VII; and applications made to the Tribunal under section 111 (about review of Commission's decisions on merger clearances)." Although the new s 102A was expressed as an inclusive definition, it is notable that no reference was made to applications to the Tribunal of the kind for which Pt IIIA of the Act then provided and had provided since Pt IIIA was inserted42 in the Act in 1995. 38 Trade Practices Amendment Act 1977 (Cth), s 64(b). 39 s 3, Sched 1, item 27. 40 s 3, Sched 1, item 36. 41 s 3, Sched 1, item 33. 42 Competition Policy Reform Act 1995 (Cth), s 59. Crennan Bell Two points of present relevance are to be made. First, there was and is no textual link between s 44K and its specification of the functions of the Tribunal on review of a declaration or decision not to make a declaration and the provisions of Div 2 of Pt IX dealing with the procedure of and evidence before the Tribunal in "proceedings" as that term is defined in s 102A. BHPB submitted that "proceedings" should be understood in s 102A as embracing any and every "formal process by which a matter is determined by the Tribunal" and as thus including reviews undertaken pursuant to s 44K. Rio Tinto and the NCC made submissions to the same general effect. Reference was made to other provisions of the Act (notably ss 37, 41 and 42(1) and (2)) which it was said contemplated the Tribunal conducting a proceeding in the general sense identified. But if "proceedings" is used in the all-embracing sense put forward by BHPB, it was unnecessary to specify two identified kinds of applications as included in the word. That construction of the Act should not be adopted. There is then no textual link between s 44K and Div 2 of Pt IX. Second, there is an evident contrast to be drawn between the provision made in Div 1 of Pt IX (by s 101(2)) – that the Tribunal's review of decisions of the kind with which that Division deals "is a re-hearing" – and the provision made by s 44K(4) that "[t]he review by the Tribunal is a re-consideration of the matter". Contrary to the submissions of Rio Tinto and BHPB, that contrast is not sufficiently explained by noticing that the Tribunal's review of decisions of the kind with which Div 1 of Pt IX deals is a review of a decision made after a hearing, whereas a review of the kind now under consideration is a review of a decision by the designated Minister that ordinarily, even invariably, would be made without any hearing. Rather, as BHPB correctly pointed out by reference to several decisions of this Court43, the nature of the review must be determined by reference to the terms of the statute. And a review that "is a re-hearing of the matter"44 must be understood as being different from a review that "is a re-consideration of the matter"45. If, as Rio Tinto and BHPB submit, it is 43 See, for example, Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245 at 261; [1995] HCA 10; Shi v Migration Agents Registration Authority (2008) 235 CLR 286 at 295 [25], 311-312 [92], 324 [132]; [2008] HCA 31; Tasty Chicks Pty Ltd v Chief Commissioner of State Revenue (2011) 85 ALJR 1183 at 1184 [5]; 281 ALR 687 at 688-689; [2011] HCA 41. 45 s 44K(4). Crennan Bell important to notice that decisions which are reviewed as a rehearing are decisions made only after a hearing, and decisions of the kind now in question will ordinarily be made without a hearing, the observation serves only to reinforce the conclusion that would otherwise follow from the different language used in the relevant provisions that the Act provides for different kinds of review of the two kinds of decisions. To observe, as Rio Tinto did, that the procedures which have been followed in these matters have taken a very long time does not shed any light on that question of construction. The matters have taken a very long time because of the assumptions that were made about the Tribunal's task. That conditions in the iron ore industry may have changed over that time in ways that could be relevant to whether the particular services should be declared does not affect the proper construction of the relevant provisions. In particular, in construing the relevant provisions, it is not useful to ask whether the Tribunal, on remitter, could or should now seek under s 44K(6) some further information or assistance from the NCC, or to ask whether obligations of procedural fairness would permit or require the Tribunal to allow either the applicant for a declaration or the incumbent service provider to say how the industry has or has not changed since the Minister made the decision under review. Both of those inquiries that have been identified arise only because of the prolonged course which these particular matters have taken. Neither inquiry would arise had the matters taken the more timely course that should have been followed. Neither inquiry bears at all upon what s 44K(4) means. There have been many judicial decisions about the meaning to be given to the word "rehearing" when used in connection with appeals. In Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd, Mason J rightly described46 the expression "the appeal is by way of rehearing" as a "Delphic utterance" which did not greatly illuminate the determination in that case of the nature of the task given to a court in reviewing by way of "appeal" a decision by an administrative body. And it has long been recognised47 that different meanings can be given to the word "rehearing" even when used in connection with an appeal from one court to another. 46 (1976) 135 CLR 616 at 622; [1976] HCA 62. 47 Powell v Streatham Manor Nursing Home [1935] AC 243 at 249. Crennan Bell When s 101(2) of the Act used "re-hearing" to describe the task of the Tribunal reviewing a determination of the Commission, it was using "re-hearing" in a context wholly divorced from the exercise of judicial power. And when s 44K(4) referred to "re-consideration", it too used that word in a context divorced from the exercise of judicial power. Nonetheless, some different meaning must presumably be intended by the use of the different words in identifying the review to be undertaken by the Tribunal. The contrast is best understood as being between a "re-hearing" which requires deciding an issue afresh on whatever material is placed before the new decision maker and a "re-consideration" which requires reviewing what the original decision maker decided and doing that by reference to the material that was placed before the original decision maker (supplemented, in this kind of case, only by whatever material the NCC provides in answer to requests made by the Tribunal pursuant to s 44K(6)). Contrary to the submissions of the respondents, the amendments that were made to s 44K in 2010 by the Trade Practices Amendment (Infrastructure Access) Act 2010 (Cth)48 ("the 2010 Act") shed no light on the proper construction of that section as it stood before those amendments were made. It may be accepted that, as was submitted, the amendments proceeded on the assumption that, when conducting a review under s 44K, the Tribunal would otherwise proceed in the manner in which it did in these matters. But that assumption was based upon what the Tribunal had done in the past. It was not based upon any authoritative consideration of the question of construction that now arises. Both Rio Tinto and BHPB drew attention to the power in s 44ZZP to make regulations "in relation to the functions of the Tribunal under [Pt IIIA]". In particular, s 44ZZP(e) provides for the making of regulations about "procedure and evidence". It by no means follows, however, that the particular function which the Tribunal is given by s 44K is one which is to be performed by the taking of evidence. Part IIIA does give functions of that kind to the Tribunal. For example, s 44ZP provides for the review of certain determinations as "a re- arbitration of the access dispute" and that is a function that would require the taking of evidence. The engagement of s 44ZZP depends upon first identifying the relevant function of the Tribunal. And in this case that depends upon 48 s 3, Sched 1, items 11-13. Crennan Bell construing s 44K. Neither the power given by s 44ZZP, nor any of the regulations made under it, sheds any light on the construction of s 44K. Rio Tinto and the NCC also drew attention to s 44K(5), which provides that "[f]or the purposes of the review, the Tribunal has the same powers as the designated Minister". It was said that the Minister, in deciding whether to declare a service, has "incidental" or "implied" power to request additional information beyond the NCC's recommendation. And, the argument continued, it followed by reason of s 44K(5) that the Tribunal also had extensive incidental or implied power to obtain information. Whether, or to what extent, the Minister has an incidental or implied power to obtain additional information need not be decided. Any such power that is given to the Tribunal by s 44K(5) must be "[f]or the purposes of the review". The scope of any such incidental or implied power depends upon first identifying the nature of the Tribunal's review, which in turn depends upon construing s 44K. Fortescue submitted that its construction of the relevant provisions was supported by constitutional considerations. Fortescue argued that if the Tribunal was required to consider afresh, on new material, what was in the public interest, the task given to the Tribunal was one which could not be given to a Ch III judge acting as President of the Tribunal persona designata. Because the relevant provisions should be construed in the manner described for the reasons that have already been given, it is not necessary to consider the constitutional point raised by Fortescue. The Tribunal did not perform its statutory task As has already been noted, the Tribunal treated its task as being to decide afresh on the new body of evidence and material placed before it whether the services should be declared. That was not its task. Its task was to review the Minister's decisions by reconsidering those decisions on the material before the Minister supplemented, if necessary, by any information, assistance or report given to the Tribunal by the NCC in response to a request made under s 44K(6). The Tribunal not having performed the task required by the Act, the Federal Court should have granted Fortescue's applications for certiorari to quash the Tribunal's decision. Rio Tinto submitted that the Court should none the less dismiss Fortescue's appeals. It submitted that, on the construction of criterion (b) which it advanced, the material which was before the Minister (and before the NCC) could not satisfy that criterion. The appeal books prepared for use in this Court Crennan Bell do not include the material that was made available to the Minister or the NCC. Neither written nor oral argument was directed in this Court to what that material might show. This Court should make the orders which the Full Court of the Federal Court should have made. Fortescue submitted that in addition to granting certiorari, the Full Court of the Federal Court should have gone on to "reinstate the Minister's decisions" because, so it was submitted, "on its own consideration of the Minister's decisions in [par 1347 of the Tribunal's reasons49], the Tribunal would have upheld the Minister's decisions had it approached its task correctly". How, on applications for judicial review, the Federal Court could have "reinstate[d] the Minister's decisions" was not explained. And the factual premise for the submission – that the Tribunal would have upheld the Minister's decisions – was not established. In the passage of the Tribunal's reasons to which Fortescue referred, the "while we set aside two ministerial decisions, it does not follow that we disagree with those decisions. ... The nature of the industry that was before the minister when the decisions were first taken is significantly different from the industry that we have here." This statement may very well not amount to a positive adoption by the Tribunal of the Minister's decisions when made. But even if it were, it would be an endorsement by the Tribunal arrived at otherwise than on the basis of reviews of the kind which it was bound to undertake and to which the applicants for review were entitled. The matters should be remitted to the Tribunal for further consideration according to law. Because that is so, it is not necessary to consider the arguments which Fortescue advanced about denial of procedural fairness. It is, however, both necessary and desirable to consider the three questions that have been raised about the construction and application of the disputed criteria for those are questions that will arise when the reviews are remitted to the Tribunal. 49 (2010) 271 ALR 256 at 474 [1347]. 50 (2010) 271 ALR 256 at 474 [1347]. Crennan Bell The six criteria – three questions As noted earlier in these reasons, these appeals were said to present three questions about the construction of the six criteria of which the Minister had to be satisfied51 before declaring a service. What does criterion (b) mean when it says that "it would be uneconomical for anyone to develop another facility to provide the service"? What matters can be taken into account under criterion (f) which requires the Minister to be satisfied "that access (or increased access) to the service would not be contrary to the public interest"? If satisfied of all six criteria, does the Minister nonetheless have a discretion to refuse to declare the service in question? Extrinsic material Extensive reference was made in the course of argument to the very large body of extrinsic material associated with the introduction of, and consideration of subsequent amendments to, the provisions of Pt IIIA. Reference was made to the report of the National Competition Policy Review ("the Hilmer Report")52 and in particular to Ch 11 of that report entitled "Access to 'Essential Facilities'". Reference was made to the draft legislative package prepared for the Council of Australian Governments53 which incorporated draft provisions not materially different from those provisions of Pt IIIA of immediate relevance to these appeals. Reference was also made to the Second Reading Speech54 and Explanatory Memoranda for the Competition Policy Reform Bill 1995 by which Pt IIIA was introduced into the Act. And reference was also made to the terms of the Competition Principles Agreement originally made on 11 April 1995 between the Commonwealth, the States and the Territories to record the agreement of the Council of Australian Governments to the principles of competition policy articulated in the Hilmer Report. Particular reference was made to cl 6 of the Competition Principles Agreement as that agreement stood at 13 April 2007. 51 s 44H(4). 52 Australia, National Competition Policy Review, National Competition Policy, 53 Australia, Council of Australian Governments, National Competition Policy: Draft Legislative Package, (1994). 54 Australia, Senate, Parliamentary Debates (Hansard), 29 March 1995 at 2434. Crennan Bell In 2001, the Productivity Commission published a report entitled Review of the National Access Regime55. In that report, the Productivity Commission proposed what it described56 as "a range of modifications to the architecture of Part IIIA to ensure that access regulation is better targeted and more workable". Reference was made in argument to what was said in that report and what was said in a written response by the Federal Government to the recommendations made in the report57. Following the Productivity Commission report and the Government response, the Trade Practices Amendment (National Access Regime) Bill 2005 was introduced into the Federal Parliament to make a number of amendments to the provisions of Pt IIIA. Reference was made in argument to the Second Reading Speech58 and the Explanatory Memoranda for that Bill. The Court was also provided with the Explanatory Memorandum for the Trade Practices Amendment (Infrastructure Access) Bill 2009. Enacted as the 2010 Act, a number of amendments were made to the administrative processes associated with the application of the National Access Regime. The alterations made to Pt IIIA did not apply59 to any of the steps taken with respect to the applications by Fortescue for access to any of the four railway lines mentioned at the outset of these reasons. And the provisions of the 2010 Act will not apply to the reviews of the declaration recommendations the subject of the proceedings in the Federal Court of Australia when they are remitted to the Tribunal for further consideration. It may be noted, however, that one important element of the amendments made by the 2010 Act was to limit60 expressly the material to which the Tribunal could have regard in conducting a review of the declaration of a 55 Australia, Productivity Commission, Review of the National Access Regime, Report 56 Australia, Productivity Commission, Review of the National Access Regime, Report No 17, (2001) at XII. 57 Australia, Government Response to Productivity Commission Report on the Review of the National Access Regime, (2004). 58 Australia, House of Representatives, Parliamentary Debates (Hansard), 2 June 60 s 3, Sched 1, items 11-13, 70. Crennan Bell service or the Minister's decision not to declare a service. Subject to some qualifications whose detail need not be noticed, the Tribunal is to be limited61 in reviewing such a matter to the material that was before the Minister. With this volume of extrinsic material available, it is unsurprising that those advocating competing constructions of the disputed provisions emphasised different parts of the extrinsic material and suggested that the use of particular expressions or phrases found in the material supported the particular construction being urged. Subject to one possible qualification concerning the relevance of the assumptions that underpinned the 2006 amendments, little is to be gained by trawling through the extrinsic material with a fine gauge net. The resolution of the contested question of construction of criterion (b) is not to be found by noticing no more than that the Hilmer Report referred more than once to "essential facilities" and "natural monopoly". Neither is a phrase that appears anywhere in the text of Pt IIIA. Nor can the contested question of construction be resolved by selecting particular quotations from the Hilmer Report and then attempting to construe the different and particular words of criterion (b) on the assumption that they give effect to those isolated passages. It is necessary to give meaning to the relevant statutory text and demonstrate why that meaning is to be adopted. It was suggested by the NCC that the extrinsic material shows that the 2006 amendments were enacted on an assumption that criterion (b) was to be understood as requiring the application of a net social benefit test. As was pointed out in argument, the Productivity Commission noted62 in its report that such consideration as had by then been given by the Tribunal to criterion (b) favoured reading it as requiring the application of a net social benefit test. But the report went on to say63 that the Productivity Commission was "not as sanguine as some participants [in the Commission's inquiry] that judicial interpretation of the declaration criteria is fully settled". Accordingly, the 61 s 44ZZOAA. 62 Australia, Productivity Commission, Review of the National Access Regime, Report No 17, (2001) at 165, 170-173, 180-182, 191. 63 Australia, Productivity Commission, Review of the National Access Regime, Report No 17, (2001) at 192. Crennan Bell Productivity Commission said64 that "[g]iven that case law in this area is still in the developmental phase, the Commission considers that it would be prudent to monitor developments regarding declaration/coverage/revocation activities". In these circumstances, contrary to the submissions of the NCC, it cannot be concluded that the 2006 amendments were enacted against a background of an accepted or settled understanding of the meaning or operation to be given to criterion (b). Criterion (b) – three construction questions At least three questions are presented by the text of criterion (b): "that it would be uneconomical for anyone to develop another facility to provide the service". First, what is meant by "uneconomical"? Does it use the word as an economist would use it, to refer to an "inefficient" use of society's resources? Or does it mean "unprofitable"? Second, when it is said that "it would be uneconomical for anyone to develop another facility" does the criterion require the postulation of a hypothetical circumstance (if someone – anyone – were to develop another facility) and the determination of whether that hypothesised circumstance "would be uneconomical"? Or does the phrase "it would be uneconomical for anyone" direct attention to whether it is demonstrated to the decision maker's satisfaction that no one will develop another facility because there is not "anyone" for whom it would be "economical" (profitable) to do so? And third, how is the reference to "anyone" to be understood? Is it to be understood as anyone other than (say) the incumbent supplier of the service? Is it, as Fortescue submitted, used to make the relevant inquiry wholly general or "anonymous"? The better view of criterion (b) is that it uses the word "uneconomical" to mean "unprofitable". It does not use that word in some specialist sense that would be used by an economist. Further, criterion (b) is to be read as requiring the decision maker to be satisfied that there is not anyone for whom it would be profitable to develop another facility. It is not to be read as requiring the testing of an abstract hypothesis: if someone, anyone, were to develop another facility. When used in criterion (b) "anyone" should be read as a wholly general reference that requires the decision maker to be satisfied that there is no one, whether in the market or able to enter the market for supplying the relevant service, who would 64 Australia, Productivity Commission, Review of the National Access Regime, Report No 17, (2001) at 192. Crennan Bell find it economical (in the sense of profitable) to develop another facility to provide that service. It is convenient to explain and justify these conclusions by beginning with consideration of the three different constructions that have been proffered for criterion (b). Criterion (b) – three possible constructions Two constructions of criterion (b) give the word "uneconomical" a meaning drawn from the study of economics. Although distinct, the two meanings are closely related. The first of these "economic" constructions of criterion (b) directs attention to whether the facility in question can provide society's reasonably foreseeable demand for the relevant service at a lower total cost than if it were to be met by providing two or more facilities65. This construction directs attention to the costs of producing the service. The Tribunal adopted this test in these cases and described66 it as a "natural monopoly approach". A second, and different, understanding of criterion (b) drawing from the study of economics would adopt what was described67 as a "net social benefit approach". That test, adopted68 in earlier Tribunal decisions, would seek to decide what is "uneconomical" by taking account not only of productive costs and benefits but also considerations of allocative efficiency and dynamic efficiency. Allocative efficiency was described in the Hilmer Report69 as being "where resources used to produce a set of goods or services are allocated to their highest valued uses (ie, those that provide the greatest benefit relative to costs)". 65 Re Fortescue Metals Group Ltd (2010) 271 ALR 256 at 394 [850]. 66 (2010) 271 ALR 256 at 391 [838]; see also at 386 [815]. 67 (2010) 271 ALR 256 at 391 [838]. 68 Re Sydney Airports Corporation Ltd (2000) 156 FLR 10; Re Duke Eastern Gas Pipeline Pty Ltd (2001) 162 FLR 1. 69 Australia, National Competition Policy Review, National Competition Policy, Crennan Bell Dynamic efficiency was described70 as reflecting "the need for industries to make timely changes to technology and products in response to changes in consumer tastes and in productive opportunities". The central question, if a net social benefit approach were to be adopted, was described by the Tribunal in Re Duke Eastern Gas Pipeline Pty Ltd71 as being "whether for a likely range of reasonably foreseeable demand for the services provided by means of the [facility], it would be more efficient, in terms of costs and benefits to the community as a whole, for one [facility] to provide those services rather than more than one". The third and preferable construction that has been proffered for criterion (b) (described72 by the Tribunal in the present matters as a "privately profitable test") directs attention to whether any person (including the incumbent operator of the facility to which access is sought) would find it profitable to establish a second or competing facility. The first two constructions of criterion (b) treat the words "for anyone to develop another facility" as identifying an abstract hypothesis. That is, the first two constructions read criterion (b) as requiring the application of the standard embodied in the word "uneconomical" to a hypothetical case: if someone (who need not be identified – "anyone") were to develop another facility to provide the service. The standard to be applied then requires assessment of the resulting costs and benefits (either the productive costs and benefits, or the productive, allocative and dynamic costs and benefits) of that hypothesis. If the balance of costs and benefits is negative, the hypothesised development is classed as "uneconomical" and criterion (b) would be met; if the balance is positive, the criterion would not be met. So understood, criterion (b) requires no prediction of likely market behaviour. In particular, on neither of these readings of criterion (b) is it relevant to ask whether there is "anyone" – existing market participant or new entrant – who would likely "develop another facility to provide the service" under consideration. The expression "for anyone to develop another facility" is thereby stripped of much, if not all, of its natural meaning. The sole focus of inquiry is upon the circumstance of development of another 70 Australia, National Competition Policy Review, National Competition Policy, 71 (2001) 162 FLR 1 at 32 [137]. 72 (2010) 271 ALR 256 at 390 [835]. Crennan Bell facility to the exclusion of consideration of the agent who brings about that circumstance. By contrast, the "privately profitable test" (or to adopt a phrase used73 by the Full Court, the "economically feasible" test) focuses only upon whether it is shown to be likely that anyone could profitably, and therefore would be likely to, develop another facility to provide the service. That is, the central assumption informing and underpinning this construction of criterion (b) is that no one will develop an alternative service unless there is sufficient prospect of a sufficient return on funds employed to warrant the investment. And criterion (b) is read as directing attention to whether there is "anyone" for whom it would be economical (in the sense of profitable, or economically feasible) to develop another facility to provide the service. Criterion (b) – three Tribunal decisions It is convenient to refer to three Tribunal decisions to identify what the Tribunal has seen as being the competing merits of each of the three constructions that have been identified. Those decisions are Re Sydney Airports Corporation Ltd 74, Duke Eastern75 and the Tribunal's decision in the present matter. Duke Eastern concerned the National Third Party Access Code for Natural Gas Pipeline Systems and not Pt IIIA of the Act. Because the processes for accessing pipelines that the Code established are not materially different from those established by Pt IIIA, the Tribunal's treatment of the Code is, and has been treated by the Tribunal and the Federal Court as, pertinent to the construction of Pt IIIA. In both Sydney Airports and Duke Eastern the Tribunal expressed76 a preference for the view that: 73 (2011) 193 FCR 57 at 98 [100]. 74 (2000) 156 FLR 10. 75 (2001) 162 FLR 1. 76 Duke Eastern (2001) 162 FLR 1 at 13 [59]; see also Sydney Airports (2000) 156 FLR 10 at 67-68 [204]. Crennan Bell "in deciding whether it is 'uneconomic' for a person other than the provider of the existing [facility] to develop another [facility] the inquiry is not limited to a narrow accounting view of 'uneconomic', or simply issues of profitability. Rather, 'uneconomic' is to be construed in a broader social cost benefit sense, in which the total costs and benefits of developing another facility are brought to account." to describe a [facility] which exhibits Adopting this view of "uneconomic" was said77 in Duke Eastern to follow from the Hilmer Report which the Tribunal said78 "suggests that criterion (b) was intended 'natural monopoly characteristics'". The Tribunal referred79 to the view expressed by the NCC that a single facility does exhibit those characteristics where that facility can meet market demand at less cost than two or more facilities. And that was a view that accepted80 that, "to an economist, 'efficiency' has three dimensions ... productive efficiency, allocative efficiency and dynamic efficiency". But it is important to notice that in no decision of the Tribunal has it been necessary to attempt to identify or measure the allocative or dynamic costs or benefits associated with the building of another facility to provide the service in question. How those costs or benefits could be identified or measured was not explored in either Sydney Airports or Duke Eastern. In Duke Eastern, the Tribunal made two further observations of present relevance. First, the Tribunal referred81 to, and appears to have embraced, expert evidence given in that case to the effect that: "On the basis of many studies and long experience, economists have concluded that the main virtue of competition is that it provides a very powerful means of securing important gains in allocative and especially dynamic efficiency." 77 (2001) 162 FLR 1 at 13-14 [58]-[62]. 78 (2001) 162 FLR 1 at 13 [60]. 79 (2001) 162 FLR 1 at 13 [60]. 80 (2001) 162 FLR 1 at 14 [63]; see also at 14 [64]. 81 (2001) 162 FLR 1 at 14 [63]. Crennan Bell Second, in terms equally applicable to Pt IIIA, the Tribunal referred82 to the absence of any mechanism in the National Third Party Access Code for Natural Gas Pipeline Systems for deterring an economically "inefficient" duplication of facilities. As the Tribunal rightly observed83, owners of facilities will generally "act on private cost, rather than social cost considerations". If there is a profit to be made by duplicating a facility, those who would invest in such a duplication can be expected to consult only their own private financial interests, not any wider social consideration. Construing criterion (b) as providing for a net social benefit test would permit access to infrastructure facilities where provision of an alternative facility would be "inefficient" according to that test, but the Act would neither deter nor prevent "inefficient" duplication of facilities. In the present matters, the Tribunal rejected84 the construction of criterion (b) that would require application of a net social benefit test and rejected85 a construction of criterion (b) that would require application of a privately profitable test. Instead, the Tribunal concluded86 that "a natural monopoly approach is preferable to a net social benefit approach adopted in previous tribunal decisions". The Tribunal explained87 that "[n]atural monopoly rests upon a production cost function which does not take into account social benefits or net social benefits" and that "natural monopoly characteristics are concerned with the costs of production based on the available technology". In the Tribunal's view88, "a net social benefit test gives criterion (b) a role which overlaps substantially, and perhaps usurps, the role of criterion (f)". 82 (2001) 162 FLR 1 at 14 [64]. 83 (2001) 162 FLR 1 at 14 [64]. 84 (2010) 271 ALR 256 at 391 [838]. 85 (2010) 271 ALR 256 at 390 [835]. 86 (2010) 271 ALR 256 at 391 [838]. 87 (2010) 271 ALR 256 at 391 [838]. 88 (2010) 271 ALR 256 at 391 [838]. Crennan Bell To determine whether a facility is a natural monopoly, the Tribunal said89: "it is necessary, first, to determine the reasonably foreseeable potential demand for the facility (strictly the service proved by the facility), and then compare the capital and operating costs of a shared facility to the sum of the capital and operating costs of an existing facility (or an expanded existing facility) and a new facility". The Tribunal acknowledged90 that "[t]esting for a natural monopoly is notoriously difficult". Among the difficulties that the Tribunal noted91 was that, although a facility must have the characteristics of a natural monopoly at the time of declaration, it is appropriate to consider what the future holds. And, as the Tribunal went on to point out92, "[t]he problem with that approach is that as cost structures change with ever-changing demand and, as technology changes, what is a natural monopoly today may not be one tomorrow". The solution proffered93 by the Tribunal to this conundrum was to take account of the future only to the extent to which "the future is predictable with some measure of confidence". What could not be predicted was to be ignored. Chief among the reasons given by the Tribunal for adopting a "natural monopoly" test were its rejection of a privately profitable test and its identification of the difficulties in applying a net social benefit test. The Tribunal's reasoning about a privately profitable test will be considered separately. In relation to a net social benefit test, the Tribunal said94 that it is important to bear in mind: "that many social costs and benefits are necessarily difficult, and sometimes impossible, to quantify. Accordingly, it may be difficult to 89 (2010) 271 ALR 256 at 395 [855]. 90 (2010) 271 ALR 256 at 394 [849]. 91 (2010) 271 ALR 256 at 394 [852]. 92 (2010) 271 ALR 256 at 394 [852]. 93 (2010) 271 ALR 256 at 394 [852]. 94 (2010) 271 ALR 256 at 391 [838]. Crennan Bell conclude, at least in quantifiable terms, that there is or is not a 'net social benefit'. A requirement to be positively satisfied of such a matter – which would be a requirement if criterion (b) were a net social benefit test – would create a threshold which may, in practical terms alone, be difficult to satisfy." And the Tribunal contemplated95 that if a net social benefit test were to be applied under criterion (b), the same or at least similar considerations would likely be engaged under criterion (f) and yet, when considered in connection with criterion (f), yield a different result from that obtained when considered under criterion (b). In its reasons96, the Tribunal examined whether the privately profitable test "ignores efficiency considerations, in particular, the allocative efficiency associated with the use of a natural monopoly facility"97. The examples given98 by the Tribunal considered only productive costs of the kind with which it dealt later in its reasons when considering the "natural monopoly" test. Those examples shed no light on the allocative or dynamic costs or benefits of establishing another and profitable facility to provide the service. And the examples that were given by the Tribunal assumed rather than demonstrated that the productive costs of meeting existing and future demand for the service through the existing facility, together with a second profitable facility, would be greater than the costs of meeting that demand through sharing the existing facility. Necessarily underpinning that analysis were unstated assumptions about how the profitability of the new facility was to be assessed. In particular, the analysis appears not to have taken into account how or why it would be that the new facility would be expected to generate an appropriate return on funds employed if the same demand could be met from the use of an existing facility. The existing facility must itself already be generating a sufficient return on funds employed to justify its continued operation. A new facility would be profitable only if it too would generate an appropriate return. Why is the deployment of 95 (2010) 271 ALR 256 at 391-392 [839]. 96 (2010) 271 ALR 256 at 387-388 [820]-[824]. 97 (2010) 271 ALR 256 at 387 [820]. 98 (2010) 271 ALR 256 at 388 [823]-[824]. Crennan Bell capital in building and operating a new facility inefficient if it, like the existing facility, provides a reasonable return on investment? The reasons given by the Tribunal in this matter drew attention to the essential difficulties that follow from adopting an economist's understanding of "uneconomical". No reason is shown for doubting the correctness of the Tribunal's conclusion99 that dynamic and allocative costs cannot be measured satisfactorily if a net social benefit test is applied. Nor is any reason shown to doubt the correctness of the observation made100 in Duke Eastern that dynamic and allocative costs are best minimised, and dynamic and allocative benefits are best enhanced, by competition. And it would follow that development of another facility to provide the service (if competing with the existing facility) would best minimise those costs and enhance those benefits. Although the Tribunal concluded that criterion (b) should be read as requiring a natural monopoly test, it expressly acknowledged101 that "[t]esting for a natural monopoly is notoriously difficult ... because of the difficulty in obtaining relevant cost information". Yet the Tribunal said that the test should be applied because, in the words of an expert witness adopted102 by the Tribunal, the test "tries to answer the right question" (emphasis added). Why the Act should be construed as requiring the application of a test that is "notoriously difficult" to apply and why the question posed by the natural monopoly test was "the right question" was not elucidated by reference to any consideration beyond the frequency of reference in the Hilmer Report to "natural monopoly". And as the Tribunal rightly pointed out103, the legislation and the Competition Principles Agreement that followed the Hilmer Report "adopted a more elaborate series of criteria for declaring access than those which were originally recommended". Further, as the Tribunal also recognised104, a facility may be a natural monopoly at the time of declaration but it may not be one tomorrow. Why the Act should 99 (2010) 271 ALR 256 at 391 [838]. 100 (2001) 162 FLR 1 at 14 [63]. 101 (2010) 271 ALR 256 at 394 [849]. 102 (2010) 271 ALR 256 at 394 [849]. 103 (2010) 271 ALR 256 at 389 [826]. 104 (2010) 271 ALR 256 at 394 [852]. Crennan Bell be construed as requiring the application of a test that now can be applied only with difficulty, and cannot be applied at all in respect of the long period for which a service may be declared, was not explained. Criterion (b) – the test to be applied As has already been pointed out, the extrinsic material to which reference may be made in connection with the construction of Pt IIIA (what the Tribunal referred105 to as the "enacting history") is very large. As has also already been observed, the Hilmer Report in particular referred more than once to the notion of a "natural monopoly". But the statutory expression of the criteria is much more elaborate than the discussion of the issues in the Hilmer Report. And those criteria do not include any that use the expression "natural monopoly". Despite the frequency with which reference may be found in the extrinsic material to "natural monopoly" and the absence of any reference to a "privately profitable" test by that name, no conclusion can safely be drawn about the proper construction of the relevant provisions of Pt IIIA from those observations alone. Attention must focus upon the language of the relevant provisions. Nor can the relevant question of construction be answered by attaching more or less pejorative epithets to one of the competing views. That is, the question of construction is not to be resolved by describing106 a privately profitable test as a "narrow accounting view"; it is not to be resolved by using the word "profitable" as a term of disapproval. Textual considerations point away from the construction adopted by the Tribunal and point towards adopting a privately profitable construction of criterion (b). First, the Full Court was right to conclude, as it did107, that criterion (b) is framed in a way that directs attention, "not to whether the NCC or the Minister or the Tribunal judged that it would be 'economically efficient' from the perspective of society as a whole for another facility to be developed to provide the service, but [to] whether 'it would be uneconomical for anyone' to do the Tribunal109 both noted, the Full Court108 and Second, as 105 (2010) 271 ALR 256 at 390 [835]. 106 Sydney Airports (2000) 156 FLR 10 at 68 [204]. 107 (2011) 193 FCR 57 at 92 [76]. 108 (2011) 193 FCR 57 at 93 [78]. Crennan Bell s 44H(5) requires the Minister, when deciding whether a State or Territory access regime is an effective access regime, to apply the principles set out in the Competition Principles Agreement and, so far as presently relevant, those principles direct110 attention to whether it is "economically feasible to duplicate the facility". And as the Full Court decided111, correctly, that expression points away from reading criterion (b) as requiring an evaluation of efficiency from the perspective of society as a whole rather than an evaluation of what would be feasible or practical for an actual or potential participant in the market place. In considering how criterion (b) should be construed, due weight must be given, as this Court has previously emphasised112, to "the attainment of the large national and economic objectives of Pt IIIA, as revealed in the legislative text enacted by the Parliament, the report that preceded its enactment, and the Minister's Second Reading Speech". More particularly, it may be accepted that the Tribunal was right to emphasise113 that criterion (b), like all other provisions of Pt IIIA, is to be construed in the light of the objects of the Part as they have been stated, since 2006, by s 44AA. The extrinsic material (especially the Hilmer Report) and the stated objects of Pt IIIA show that the Part is intended to operate in a way that will contribute to national economic efficiency. Duplication of a "natural monopoly" may be one form of economic inefficiency. That is, if the entire output of a relevant market can be supplied by a single firm at lower cost than by any combination of two or more firms, it would be inefficient to have more than one firm supplying the relevant market. And in such a case the incumbent firm, or the industry, can be described as a "natural monopoly". But several further points must be made about these propositions. 109 (2010) 271 ALR 256 at 390 [830]-[831]. 110 Competition Principles Agreement, 11 April 1995 (as amended to 13 April 2007), cl 6.1(a). 111 (2011) 193 FCR 57 at 93 [78]-[79]. 112 BHP Billiton Iron Ore Pty Ltd v National Competition Council (2008) 236 CLR 145 at 161 [42]; [2008] HCA 45. 113 (2010) 271 ALR 256 at 386-387 [818]-[819]. Crennan Bell First, duplication of a facility provided by a firm of the kind described would be "inefficient" or "wasteful" only if the duplication is not necessary and the duplication leads to increased cost. That is, the attribution of terms like "inefficient" and "wasteful" depends upon the accuracy of the conclusion that the entire output of the market not only could be supplied by the incumbent but also could be supplied at lower cost than by two or more firms. Asking about an incumbent's ability to meet demand at a lower overall cost than supply by two or more firms focuses upon existing conditions. As the Tribunal rightly observed114 in the present matters, it is difficult to predict future demand and changes in technology cannot be predicted. The inquiries required by Pt IIIA necessarily look to an extended period into the future. Deciding that there is now a "natural monopoly" considers only a snapshot of economic efficiency. Yet the decision to declare a service under Pt IIIA must hold good for the whole of the period of the declaration. Although the Minister can decide to revoke a declaration upon receiving a revocation recommendation from the NCC, the existence of this power does not justify the adoption of an inappropriate test for making a declaration in the first place. Second, and no less importantly, it must be recognised that efficiency of the kind considered by reference to "natural monopoly" is not the only relevant economic consequence. A single supplier may be able to exploit users of the supplier's service by using its market power to raise prices, at least if not restrained by regulation or the threat of competitive entry into the market. And if the single supplier does face a credible threat of new entry, it is probable that the natural monopoly is not sustainable. But more importantly, the existence of a credible threat of entry will contribute to the efficiency of the relevant market by inducing the monopolist to produce and price its services efficiently. To say this is simply to restate basal competition principles which underpin the whole of the Act. These considerations of competition principles, the considerations of national economic efficiency that have been already noted, do not point away from adopting a privately profitable test. In order to show why that is so, it is useful to consider what different outcomes would follow from applying a private profitability test and from applying a natural monopoly test, if the facility being considered for declaration under Pt IIIA is or is not in fact a together with 114 (2010) 271 ALR 256 at 394 [852]. Crennan Bell natural monopoly and the only criterion that remains for consideration before declaring the service is criterion (b). If criterion (b) is read as a privately profitable test, there may be cases where there would be a duplication of a natural monopoly. But duplication would occur only if it were profitable for another to develop an alternative facility to provide the service (despite the fact that total market output could be supplied at lowest cost by one facility). It would be profitable for another to develop an alternative facility if the new facility is more efficient than the existing facility, for example, because of some form of cost or technological advantage. And if the new facility is not more efficient than the existing facility, it is to be doubted that development of the new facility in competition with a natural monopoly would be profitable. Especially would that be so where, as here, the capital costs of establishing the new facility would necessarily be very large. By contrast, if criterion (b) is read as a natural monopoly test, a facility that is not a natural monopoly cannot be declared even if there is no (profit) incentive to duplicate it. In that case, the sole supplier would be left in control of the field with the attendant risks of abuse of market power and, no less importantly, with no incentive to price and produce efficiently. An outcome of that kind does not sit easily with the requirement that criterion (b) be understood in a way that will "promote the economically efficient operation of, use of and investment in the infrastructure by which services are provided, thereby promoting effective competition in upstream and downstream markets"115. The Tribunal was wrong to conclude, as it did116, that adoption of a privately profitable test of the kind being considered by the Tribunal would not adequately meet those objectives. A privately profitable test serves those objectives better than a natural monopoly test. Applying a "privately profitable" test It would not be economical, in the sense of profitable, for someone to develop another facility to provide the service in respect of which the making of a declaration is being considered unless that person could reasonably expect to obtain a sufficient return on the capital that would be employed in developing 115 s 44AA(a). 116 (2010) 271 ALR 256 at 390 [835]. Crennan Bell that facility. Deciding the level of that expected return will require close consideration of the market under examination. What is a sufficient rate of return will necessarily vary according to the nature of the facility and the industry concerned. And if there is a person who could develop the alternative facility as part of a larger project it would be necessary to consider the whole project in deciding whether the development of the alternative facility, as part of that larger project, would provide a sufficient rate of return. But the inquiry required by criterion (b) should be whether there is anyone who could profitably develop an alternative facility. The Full Court said117 that the reference in criterion (b) to "anyone" should be read as not including the incumbent owner of the facility to which access is sought. The Full Court relied, in this respect, on what was said by the Tribunal in Sydney Airports118 in the course of its rejection of a privately profitable test. The Tribunal concluded119 in that case that if uneconomical was interpreted "in a private sense then the practical effect would often be to frustrate the underlying intent of the Act". But that conclusion, said120 to be "closely connected to the question of whether 'anyone' should include the owner of the facility providing the service to which access is sought", was a conclusion that proceeded from the premise that the net social benefit test was consistent with the "underlying intent of the Act". That is, the conclusion proceeded from an incorrect construction of criterion (b). No reason is shown to read "anyone" in criterion (b) as limited in its application. In criterion (b), "anyone" includes existing and possible future market participants. Contrary to Fortescue's submissions asking whether it would be uneconomical in the sense of unprofitable for anyone to develop an alternative facility does not ask a question to which no answer can be given with any sufficient certainty. Of course it is a question that would require the making of forecasts and the application of judgment. But the converse question – whether it would be economically feasible to develop an alternative facility – is a question that bankers and investors must ask and answer in relation to any investment in 117 (2011) 193 FCR 57 at 94 [83]. 118 (2000) 156 FLR 10 at 67-68 [204]-[205]. 119 (2000) 156 FLR 10 at 68 [205]. 120 (2000) 156 FLR 10 at 68 [205]; see also at 68 [204]. Crennan Bell infrastructure. Indeed, it may properly be described as the question that lies at the heart of every decision to invest in infrastructure, whether that decision is to be made by the entrepreneur or a financier of the venture. If the Minister is satisfied that it would be uneconomical (in the sense of not profitable) for anyone to develop an alternative facility, criterion (b) is met. Criterion (f) Criterion (f) requires the Minister (and the NCC) to be satisfied "that access (or increased access) to the service would not be contrary to the public interest". The great breadth of matters that can be encompassed by that criterion has already been described121. The Tribunal's reasons in these matters show122 that it considered that criterion (f) (and what it identified123 as a residual discretion to be exercised before a service was declared) required the examination of all costs and benefits of access to each service and the striking of a balance between all of those costs and all of those benefits. The Tribunal said124 that: "criterion (f) and the discretion do not require a precise quantifiable cost/benefit analysis. None the less, in what follows [in the Tribunal's reasons] we have attempted to compare the benefits and costs of access, where possible giving them some order of magnitude value." (emphasis added) The Full Court noted125 that "[t]he Tribunal brought into account under criterion (f) considerations of costs and benefits which had in previous decisions of the Tribunal been considered under the rubric of criterion (b)". And in the 121 See above at [42]. 122 (2010) 271 ALR 256 at 444-468 [1160]-[1305]. 123 (2010) 271 ALR 256 at 445 [1163]. 124 (2010) 271 ALR 256 at 468 [1305]. 125 (2011) 193 FCR 57 at 101 [104]. Crennan Bell proceedings in the Full Court, Fortescue submitted126 that the Tribunal had erred in adopting this approach. The Full Court rejected127 Fortescue's submissions. The Full Court said128: "It is apparent from the Tribunal's reasons that the costs which it took into account under criterion (f) would have been taken into account under criterion (b) if the net social benefit approach to criterion (b) had been applied by the Tribunal. Whether or not these costs fall for consideration in relation to criterion (b) or criterion (f), it cannot be right to say that these costs should be ignored altogether. To say that is to assert the irrelevance of the legitimate interests of the incumbent provider and the public interest in productive and allocative efficiency. That assertion does not conform to the legislation's intention." The conclusion reached by the Tribunal and by the Full Court about criterion (f) depended upon the assumption that the Tribunal was bound to make its own assessment, on the new body of evidence and material placed before it, of whether access or increased access would be contrary to the public interest. But, as has been explained, that was not the Tribunal's task. Its task was to reconsider what the Minister had decided. And performance of that task directed attention immediately to the bases on which the Minister was satisfied that access would not be contrary to the public interest. Because so many different kinds of consideration may be relevant to an assessment of what is "contrary to the public interest", many if not all of those matters which can be described as "social costs" could be relevant to that assessment. And the significance to be attached to such social costs would, no doubt, be affected by the existence of any countervailing social benefits. But it is important to keep at the forefront of consideration that, when the Tribunal is required to review a ministerial decision to make a declaration, the Minister has been satisfied that access or increased access would not be contrary to public interest. And when the Tribunal is required to review a ministerial refusal to make a declaration the Minister will have said, in any reasons for decision required by s 44HA(1), whether or not he or she was satisfied of criterion (f). 126 (2011) 193 FCR 57 at 102 [106]. 127 (2011) 193 FCR 57 at 102 [108]. 128 (2011) 193 FCR 57 at 102 [108]. Crennan Bell In neither case is it to be expected that the Tribunal, reconsidering the Minister's decision, would lightly depart from a ministerial conclusion about whether access or increased access would not be in the public interest. In particular, if the Minister has not found that access would not be in the public interest, the Tribunal should ordinarily be slow to find to the contrary. And it is to be doubted that such a finding would be made, except in the clearest of cases, by reference to some overall balancing of costs and benefits. No question arises in these matters about the Tribunal's decision to affirm the Minister's deemed decision to refuse to declare the Mt Newman line. The Minister's deemed decision will not be the subject of further consideration by the Tribunal. It is therefore neither necessary nor appropriate to examine the difficulties that may be presented by the circumstance that the Tribunal's re-consideration of a deemed decision to refuse to declare a service cannot begin from any statement of the Minister's reasons. There remains for consideration whether there is some residual discretion. Is there a residual discretion? Section 44H(1) provides that: "On receiving a declaration recommendation, the designated Minister must either declare the service or decide not to declare it." Section 44H(4) provides that: "The designated Minister cannot declare a service unless he or she is satisfied of all of the following matters ..." Section 44H(1) obliges the Minister to decide whether or not to declare the service. Although expressed negatively – "[t]he designated Minister cannot declare a service unless ..." – the six criteria specified in s 44H(4) should be understood as stating an exhaustive list of the considerations that may bear upon the decision to declare a service. Read as a whole, s 44H should be understood as conferring a power on the Minister which must be exercised by declaring the service if the Minister is satisfied of all of the six criteria specified in s 44H(4). If the Minister is satisfied of all of the six criteria, including in particular that access (or increased access) to the service would not be contrary to the public interest, no satisfactory criterion or criteria could be devised which would guide the exercise of some residual discretion. Though drafted very differently, the provisions of s 44H are not different in effect from provisions of the kind Crennan Bell considered in Finance Facilities Pty Ltd v Federal Commissioner of Taxation129. That is, if the Minister, having considered the matter, is satisfied of all of the six criteria, the Minister must declare the relevant service. BHPB submitted in this Court that there is a residual discretion. In aid of that submission, BHPB relied upon the decision of the Full Court of the Federal Court in Sydney Airport Corporation Ltd v Australian Competition Tribunal130 and the Explanatory Memorandum for the Competition Policy Reform Bill 1995, which introduced Pt IIIA into the Act. Those submissions drew attention to s 44H(2), which provides: "In deciding whether to declare the service or not, the designated Minister must consider whether it would be economical for anyone to develop another facility that could provide part of the service. This subsection does not limit the grounds on which the designated Minister may make a decision whether to declare the service or not." The second sentence of s 44H(2) is, by its terms, limited to that sub-section and so has no relevance to the existence or otherwise of a residual discretion. And in so far as the Explanatory Memorandum referred131 to a discretion whether or not to declare a service, those references simply emphasised that the Minister has to consider whether it would be economical for anyone to develop another facility to provide part of that service. There is no residual discretion and it follows that, on review, the Tribunal has no residual discretion to exercise. The Tribunal, and the Full Court, were wrong to proceed on the footing that there was a residual discretion to be exercised. 129 (1971) 127 CLR 106; [1971] HCA 12. 130 (2006) 155 FCR 124. 131 Australia, House of Representatives, Competition Policy Reform Bill 1995, Explanatory Memorandum at 26-27 [180], 28 [188]. Crennan Bell Conclusion and orders The Full Court concluded that Fortescue's application for judicial review should be dismissed because the Tribunal found132 that it could not be satisfied that it was not profitable to build rail lines that would duplicate the services to which Fortescue had sought access. But again, the conclusions reached by the Tribunal in this respect were reached on evidence and material far beyond the evidence and material to which it should have had regard in conducting a review of the kind required by the Act. There having been no review by the Tribunal of the kind for which the Act provided, the orders made by the Full Court of the Federal Court in these matters should be set aside. In their place there should be orders in each matter that a writ of certiorari, directed to the Tribunal, issue to quash the Tribunal's determination the subject of that proceeding. The matters should be remitted to the Tribunal for determination according to law. Having regard to the stage at which and circumstances in which the determinative issue in these matters arose, there should be no order for the costs of the proceedings in this Court or in the Full Court of the Federal Court. Each party and the NCC as intervener should bear its own costs. 132 (2010) 271 ALR 256 at 410 [960]. 122 HEYDON J. The appeals concern Pt IIIA of the Trade Practices Act 1974 (Cth) ("the Act"). Part IIIA created a process by which persons could gain access to infrastructure owned by others. In connection with this process, Pt IIIA imposed a duty on the National Competition Council ("the Council"). That duty was to recommend either that a particular "service" be "declared" by the "designated Minister", or that it not be declared. Whether the Council would recommend that a particular "service" be "declared" depended on whether it was satisfied that the criteria described in s 44G(2) were met. The Minister's decision to make the declaration depended on satisfaction of the same criteria, which were set out again in s 44H(4). The appellants are The Pilbara Infrastructure Pty Ltd and Fortescue Metals Group Ltd. They enjoyed success before the Council. They enjoyed less success before the Minister. That success was reduced even further on review of the Minister's decision by the Australian Competition Tribunal ("the Tribunal"). And it was reduced further still after an appeal to the Full Court of the Federal Court of Australia ("the Full Court"). This procedural history and other material background circumstances are set out in the plurality reasons133. Below, the expression "respondents" will be used to refer to the active respondents as well as the Council, an intervener. The active respondents are certain companies in the BHP Billiton Group and certain companies in the Rio Tinto Group. The Council advanced submissions generally supporting the active respondents on the first two questions in these appeals. After oral argument concluded, there were three main questions in these appeals. The first question was: did the appellants' tardiness in raising the question whether the Tribunal correctly conceived its task under s 44K(4) preclude this Court from considering it? The second question was: did the Tribunal correctly conceive its task under s 44K(4)? And the third question was: did the Full Court adopt the correct interpretation of s 44H(4) of the Act? The answer to each question is "No". Is this Court barred from considering the role of the Tribunal? The appellants raised a point about the role of the Tribunal under s 44K(4) only at a late stage in oral argument in this Court. They then sought leave to amend their notices of appeal. The respondents opposed that leave. Does the appellants' tardiness prevent the point now being raised? No. The appellants did protest about the over-elaborate course that the Tribunal was taking earlier, albeit briefly, and in a somewhat different context 133 See above at [1]-[4], [14]-[23]. from the present. That course involved massive testimonial and documentary tenders. In Suttor v Gundowda Pty Ltd, Latham CJ, Williams and Fullagar JJ said134: "The circumstances in which an appellate court will entertain a point not raised in the court below are well established. Where a point is not taken in the court below and evidence could have been given there which by any possibility could have prevented the point from succeeding, it cannot be taken afterwards." Strictly speaking, this principle cannot apply to these appeals. Contrary to the impression its lengthy determination in these proceedings may convey, the Tribunal is not a court. However, analogous considerations apply. On that approach, there is no procedural bar to considering the appellants' point. Assuming, contrary to the conclusion reached below135, that it was open to the Tribunal to receive evidence which had not been before the Minister, no evidence could have been given in the Tribunal which, by any possibility, could have prevented the point which the appellants now take from succeeding there. The respondents also contended that amendments to the Act in 2010 made the grant of leave futile. They submitted that those amendments meant that any decision by this Court construing the pre-2010 form of s 44K would have no general significance. Even if that is so, the question vitally affects the interests of the parties in these proceedings, and those of the nation. Those interests are of such considerable practical significance that it is appropriate to grant the appellants leave to amend their notices of appeal. The role of the Tribunal under s 44K Was it open to the Tribunal in its review of the Minister's decision to conduct a wholly fresh inquiry involving a mass of evidence which was, in large measure, not before the Minister when he made his decision? The answer depends on the proper construction of s 44K in its pre-2010 form. The appellants submitted that the question should be answered in the negative. According to the Council, that negative answer had never been given before. Section 44K enabled a service provider or access-seeker aggrieved by the Minister's decision to apply to the Tribunal for review of it. Sub-section (4) imposed on the Tribunal a duty to conduct that review by way of a 134 (1950) 81 CLR 418 at 438; [1950] HCA 35. 135 See below at [154]. "re-consideration of the matter". When those words are taken in isolation, their meaning is not clear. But examined in their statutory context, they mean that the Tribunal is not entitled to consider material other than that which was before the Minister, apart from any information, assistance and reports obtained from the Council pursuant to s 44K(6). On the respondents' construction of s 44K(4), participants in the review could raise issues and tender material whether those issues or that material had been before the Minister or not. On that construction, "re-consideration" in the Tribunal could have permitted a completely fresh start. That construction must be rejected. That is so for the following six reasons. Reasons why the Tribunal's role is narrow The significance of s 44K(6). First, the very existence of s 44K(6) is significant. Section 44K(6) empowered the presiding member of the Tribunal at the review to "require the Council to give information and other assistance and to make reports … for the purposes of the review." Very commonly what the Council might have supplied under s 44K(6) would not have been in the Council's reasons for its recommendation and would not have been otherwise before the Minister. Section 44K(6) tells against an untrammelled liberty in those appearing before the Tribunal to tender, and in the Tribunal itself to consider, material which had not been before the Minister. If those appearing before the Tribunal and the Tribunal itself had untrammelled liberties of these kinds, s 44K(6) would have been unnecessary. Parties appearing before the Tribunal would have been in a position to provide the material. Indeed, the Rio Tinto respondents fixed upon this point to argue that the appellants' amendment of their notices of appeal to raise this "re-consideration" ground should not be allowed as a matter of discretion. They submitted that leave to amend should not be given because the material the Tribunal was said to have received wrongly could have been received under s 44K(6) after the Rio Tinto respondents had given it to the Council for that purpose. The provision of a specific and demarcated power to obtain material that the Minister did not have when making the decision points against enlarging that power by implication. Some of the respondents argued that: the Minister had an incidental or implied power to request relevant and up-to-date information additional to that which underlay the Council's recommendation; s 44K(5) conferred on the Tribunal "the same powers as the … Minister"; therefore the Tribunal could obtain evidence which went beyond what it could request under s 44K(6). Step (a) may be assumed136. Step (b) is correct. But the reasoning leading to step (c) begs the question: what was the scope of the Tribunal's power to review under s 44K(4)? The powers conferred on the Tribunal by s 44K(5) were conferred "[f]or the purposes of the review". The scope of the review necessarily limited the powers which s 44K(5) conferred. Time factors. Secondly, s 44GA(1) of the Act required the Council to use its best endeavours to make a recommendation on an application made to it under s 44F within four months. Section 44H(9) provided that the Minister had only 60 days after receiving a declaration recommendation from the Council to decide whether to declare the service and to publish reasons for that decision. If he failed to do so, he was taken to have decided not to declare the service. Section 44ZZOA(1) required the Tribunal to use its best endeavours to make a review decision within four months. Section 44ZZOA(2) required it to extend this standard period if it was unable to make a decision within that time. These provisions compelled a certain briskness in the procedures leading up to and including review in the Tribunal. This is not surprising in view of their importance. It was important that third parties with a good case for obtaining access to infrastructure have that case considered promptly at the declaration stage. It was also important that infrastructure owners achieve some commercial certainty by ensuring that an unsoundly based application be rejected promptly at the declaration stage. Even when the Minister declared a service, and all procedures by way of review and appeal in relation to that declaration were exhausted, the process of obtaining access was not complete. An agreement about the detailed aspects of access to the declared service would then be negotiated. Failing agreement, arbitration could then ensue. Section 44AA(a) provided that an object of Pt IIIA was to: "promote the economically efficient operation of, use of and investment in the infrastructure by which services are provided, thereby promoting effective competition in upstream and downstream markets". In view of the dynamism, instability and fluidity of commercial life, that object could not have been fulfilled if there were substantial delays at either stage of the process by which access was either gained or successfully resisted. Delays – very substantial delays – could occur if the Tribunal hearing was wider in scope than the Minister's consideration of the Council's declaration recommendation. The risk of delays was particularly acute where excessive zeal on the part of the participants in the hearing rendered the materials to be considered bulkier. The Tribunal could not complete its review speedily if those materials assumed the enormous proportions they did in relation to these appeals. If the respondents' 136 The Council's submissions referred to Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 45; [1986] HCA 40. construction of s 44K(4) were accepted, the Tribunal's control over what it had to examine in a review would be weakened. If the appellants' construction of s 44K(4) is accepted, then the Tribunal would retain control. The Tribunal would have had to examine only what the Minister examined, and additional material procured only by means of s 44K(6). Inter partes proceedings? Thirdly, there were no "parties" in a s 44K review. This is another factor that points against the respondent's construction of s 44K(4). It was not necessary that the person seeking access to services apply to the Council for a declaration recommendation. Under s 44F(1), the application could be made by the "designated Minister, or any other person". Section 44GB conferred power on the Council to invite submissions from the public. But the Act made no more specific provision for an access-seeker or a service provider to make submissions to the Council. And neither the access-seeker nor the service provider enjoyed a more privileged role before the Minister in any substantive respect. The Council submitted that the proceedings before the Tribunal were inter partes proceedings. The "proceedings" before the Minister were not. The Tribunal had the same powers as the Minister pursuant to s 44K(5). The Council did not explain how review of a decision that was not inter partes by a Tribunal having the same powers as the decision-maker became inter partes. Nor did the Council explain how the inter partes character of the review gave those participating a right to adduce evidence in an unconstrained way. If the respondents' interpretation of s 44K(4) were correct, both the access-seeker and the service provider would have the capacity to tender fresh material and raise new issues before the Tribunal. That capacity would stand in sharp contrast with their inability, other than as members of the public, to widen the material that the Council considered. It would also stand in sharp contrast with their inability to expand the material that the Minister considered. To widen the roles of the access-seeker and the service provider in the Tribunal beyond their roles in relation to the recommendations of the Council and the decisions of the Minister would have called for statutory language to support that expanded role. The legislation did widen their roles a little, but not enough to support the respondents' construction. Section 44K(1) provided for a disappointed service provider to apply to the Tribunal for review. And s 44K(2) empowered the declaration recommendation to apply to the Tribunal for review. Regulation 22B(1) of the Trade Practices Regulations 1974 (Cth) ("the Regulations") provided for the original applicant to "participate in the review" triggered under s 44K(1). Regulation 22B(2) provided for the service provider to "participate in the review" triggered under s 44K(2). But these references to participation did not suggest a right of participation so extensive as to permit the Tribunal to enlarge the field of material that the Minister considered. the person who applied unsuccessfully for Connection between the declaration recommendation and the declaration decision. The fourth point against the respondents' interpretation of s 44K(4) concerns the connection between the declaration recommendation and the declaration decision. The Council had power to invite public submissions, and it was obliged to have regard to them in deciding what recommendations to make. The Act contained no express grant of power to the Minister to seek submissions from interested persons, the public or anyone else. It is true that there was no express prohibition on the Minister adopting this course. However, the Act contemplated that it was to be primarily the Council, a body composed of experts, which engaged in expert analysis of the issues an application raised. And the Act contemplated that the Minister, who would not necessarily possess the same expertise, but who would be experienced in resolving broader political questions, would decide in the light of that experience whether to follow the expert recommendation. Like the Council, the Minister was not cast in the role of an inter partes decision-maker. And like the Council, the Minister was cast more in the role of a guardian of the public interest. Section 44H(1) imposed on the Minister a duty either to declare or not declare the service. Section 44HA(1) imposed on the Minister a duty to publish "his or her decision on a declaration recommendation and his or her reasons for the decision." It was implicit in these duties that the Minister had a duty to consider the Council's declaration recommendation. importance of There was plainly a close connection between the Council's declaration recommendation and the Minister's declaration decision. The respondents denied this close connection. Their argument compelled this denial. If they had not denied it, the foundation for their contention that the Tribunal could act entirely independently of events before the Council and the Minister would vanish. The respondents' argument did not accommodate the language of s 44H(9). Section 44H(9) spoke of the Minister making a "decision on the declaration recommendation". Its words did not admit of that decision being based on some new issue unconnected with the recommendation. Further, the respondents' argument did not accommodate the declaration the recommendation in the case of a deemed refusal. In that case, there are no reasons from the Minister. The Council's reasons only are published. The respondents' argument set at naught the considered process the Act created. Under that process, the Council, which was both expert and independent, consulted the public and then gave a reasoned recommendation to an elected official. Whether a declaration was made or refused, that official was responsible to the legislature for the course taken. And the respondents' argument ignored s 44K(7). That section gave the Tribunal powers to "affirm, vary or set aside the declaration". This language concentrated the Tribunal's attention on whether the Minister's "decision on the declaration recommendation" was correct, rather than on what decision it should make of its own volition, after a fresh inquiry unconnected with the past. The Council's recommendation and the Minister's decision to declare or not to declare a service are not mere formal steps to be accomplished before the Tribunal may commence "re-consideration". They are integrally connected with that "re-consideration". The generality of criteria (a)-(f). Fifthly, criteria (a)-(f) in ss 44G(2) and 44H(4) were all somewhat general137. The most general were criterion (a) ("material increase in competition"), criterion (b) ("uneconomical"), criterion (c) ("national significance") and criterion (f) ("public interest"). Some of the criteria depended on questions of economic expertise – for example, criterion (a) and criterion (e) ("effective access regime"). Others depended on different types of expertise – for example, criterion (d) ("health or safety"). Taken together, the criteria raised issues apt for consideration by an official responsible to the legislature acting with the benefit of an expert recommendation from the Council. Introducing further issues and fresh material after the Minister had reached a decision on such a recommendation was not consistent with the statutory scheme. That is particularly so if the Tribunal hearing became excessively forensic. The process that led to the Minister's decision lacked both publicity and forensic formality. It is true that under s 44GC the Council's recommendation had to be made public on or soon after the day the Minister's decision was published. And, so long as the decision was not a deemed refusal, under s 44HA(1), publication of the Minister's reasons for decision was also obligatory. However, the Act imposed no obligations on the Council to conduct hearings or to respond to submissions. It did not impose those obligations on the Minister either. That fact is hardly congruent with the Tribunal undertaking a process that considerably widened the approach taken by the Minister. The improbability of wide review. Sixthly, in our system of responsible government, legislation is generally initiated by the Ministers of State who superintend other executive officers – the Cabinet. Legislation is generally enacted because the initiating Ministers come from, or are supported by, parties having majorities in the houses of the legislature. It was notorious in 1995, when s 44K was introduced, that commercial litigation was becoming cumbersome, bloated and therefore slow. It was notorious that these trends could be observed in some Trade Practices Tribunal hearings which permitted the reception of material that had not been before the original decision-maker. It was also notorious in 1995 that while administrative decisions were often subject to judicial review, and some were subject to merits appeal, the personal decisions of Ministers were not commonly subject to merits appeal to non-judicial tribunals on issues and using materials wider than those that had been before the Minister. The meaning which "re-consideration" in s 44K(4) would have had to contemporaries aware of these states of affairs is highly unlikely to have been a wide one. It was "re-consideration" of a decision which had to be made within a 60 day non-extendable period by the Minister with no duty to elicit materials beyond That recommendation was usually made within four months. Neither the Council nor the Minister was under any duty to permit any forensic process. It is improbable the Council's recommendation and the reasons for 137 See above at [9]. that contemporary observers would have construed "re-consideration" as permitting an examination of wider issues in the light of ampler materials than It is improbable that those looked at in the original "consideration". contemporary observers would have seen "re-consideration" as permitting anything akin to contemporary commercial litigation. It is improbable that contemporary observers would have read s 44K(4) as permitting personal decisions of the Minister under s 44H, unlike those of most other Ministers, to be subjected to so intense and lengthy a scrutiny on the merits as happened before the Tribunal in this case. The respondents' arguments in favour of the Tribunal's approach It is necessary now to deal with eight arguments put by the respondents against the construction advocated by the appellants and accepted above. The irrelevance of ss 103-110. First, some attention was paid in argument to what could be drawn from the contrast between "a re-consideration of the matter", as used in s 44K(4), and a "re-hearing", as used in s 101(2) in Pt IX. The word "re-hearing" was used to describe reviews by the Tribunal of certain determinations of the body formerly known as the Trade Practices Commission and now known as the Australian Competition and Consumer Commission ("the Commission"). Those determinations involved the grant or refusal by the Commission of authorisations under Pt VII Div 1. In considering applications for authorisations, s 90(2) obliged the Commission to take into account submissions by the applicant, the Commonwealth, a State, or any other person. Section 90A obliged the Commission to prepare draft determinations in relation to authorisation applications (other than applications under s 88(9)) and to invite interested persons to an oral conference. In these two senses, there had been a hearing before the Commission. It was therefore appropriate for the Act to provide that the review of the Commission's determination be undertaken as a "re-hearing" in s 101(2). The Minister's decision under s 44H, on the other hand, did not involve a hearing which was in any sense like those the Commission conducted under Pt VII Div 1. That is not of fundamental significance. What is of fundamental significance is that nothing in the provisions in Pt IX Div 2 (ss 102A-110) suggested that they applied to s 44K reviews. Those provisions referred to various matters of evidence and procedure in "proceedings" before the Tribunal. Part IX concerned, as its heading said, "[r]eview by [the] Tribunal of [d]eterminations of Commission". Section 44K, on the other hand, concerned reviews by the Tribunal of determinations of the Minister. Nothing in Pt IX extended review of Commission it contained beyond determinations to s 44K reviews. The respondents argued that Pt IX did apply to s 44K reviews. They argued that ss 103-110 in Pt IX Div 2 dealt with the Tribunal's powers in "proceedings" before it. They submitted that s 44K fell the provisions within the definition of "proceedings" in s 102A. That definition provided that in Pt IX: "proceedings includes: applications made to the Tribunal under Subdivision C of Division 3 of Part VII [which deals with merger authorisations by the Tribunal]; and applications made to the Tribunal under section 111 (about review of Commission's decisions on merger clearances)." The respondents contended that a proceeding before the Tribunal is a "formal process by which a matter is determined by the Tribunal". They submitted that a s 44K review was a proceeding. Accordingly they said that a s 44K review fell within the word "includes" in the s 102A definition. If the respondents' argument were sound, it would not have been necessary to include pars (a) and (b) in the definition of "proceedings" in s 102A. The respondents attributed their inclusion to an abundance of caution. However, their argument is at odds with the statutory context. It cannot be reconciled with the heading to Pt IX (Review by Tribunal of Determinations of Commission). It cannot be reconciled with the terms of ss 101 (review of Commission determinations), 101A (review of exclusive dealing and collective bargaining notices given by the Commission), and 102 (review of Commission authorisation determinations). It cannot be reconciled with the terms of pars (a) and (b) of the s 102A definition (which dealt with the Tribunal's role in relation to mergers, not with Pt IIIA). And it cannot be reconciled with ss 111-119 (review of Commission's determinations on merger clearances). Section 109(1) dealt with review only. Section 109(1A) dealt with review of exclusive dealing and collective bargaining notices given by the Commission only. It is true that ss 103-108 and 110 were cast in quite general terms. But there was simply no statutory link between s 44K and the regime provided for by Pt IX Div 2 (particularly ss 103-108 and 110). And the context in which ss 103-108 and 110 appeared strongly suggested that they were limited to the topics specifically referred to in Pt IX; namely, various forms of Tribunal review of Commission determinations, and applications to the Tribunal about mergers under Pt VII Div 3 subdiv C. Hence the respondents' lengthy submissions about the powers ss 103-110 conferred did not demonstrate that the appellants' construction of s 44K(4) was inconsistent with Pt IX. of Commission determinations authorisations about The respondents relied on Tribunal determinations supportive of their general approach. But for the most part those determinations rested on assumptions138 or concessions139. One did not. In Re Fortescue Metals Group Ltd, the Tribunal decided the point after argument140. With respect, for the reasons just given, the determination is not correct in that respect. The rules of procedural fairness. Secondly, the respondents contended that the rules of procedural fairness compelled the Tribunal to afford persons likely to be adversely affected by its decision the right to bring forward evidence. Therefore, they submitted, their construction of s 44K should be preferred. Even if the rules of procedural fairness confer that right, they may be abrogated or qualified by statute. For the reasons stated above141, s 44K did qualify them. And claims for a fair hearing at the Tribunal stage can be met by a request from the Tribunal to the Council under s 44K(6). To some extent the Tribunal's reasoning in this case rested on that argument by the respondents. So far as it did, the Tribunal's reasoning must be rejected. The Tribunal observed that one consequence of the rules of procedural fairness was that it was required: "to afford a party which may be adversely affected by its decision, the right to be heard, to be legally represented at a hearing before the tribunal and to lead evidence and cross-examine witnesses. Speaking very generally, the tribunal is master of its own forms and procedures. But the rules of procedural fairness act as a strong brake on the tribunal's ability to control the parties' conduct in a proceeding. One consequence is that proceedings before the tribunal have every appearance of a court-style hearing."142 The Tribunal's tendency in some of its activities to adopt the "appearance of a court-style hearing" probably influenced the wide view it took of its powers under s 44K. To some extent, the Tribunal operates procedurally like a court when conducting reviews or hearing applications governed by ss 103-110. But, as just noted, those "proceedings" take place pursuant to powers unconnected with Pt IIIA. The opinion as to the conduct of s 44K reviews that the Tribunal 138 For example, Re Freight Victoria Ltd (2002) ATPR ¶41-884 at 45,127 [17]; Re Asia Pacific Transport Pty Ltd (2003) ATPR ¶41-920 at 46,836 [7]. 139 Re Lakes R Us Pty Ltd (2006) 200 FLR 233 at 238-239 [26]-[28]. 140 Re Fortescue Metals Group Ltd (2006) 203 FLR 28 at 32-33 [15]-[20]. 141 See above at [129]-[142]. 142 Re Fortescue Metals Group Ltd (2010) 271 ALR 256 at 267-268 [24]. expressed in this and other instances143 appears to have been influenced by the powers it had for purposes other than conducting s 44K reviews. An analogy with the Administrative Appeals Tribunal. Thirdly, the respondents submitted that the Tribunal was in the same position as the Administrative Appeals Tribunal under the Administrative Appeals Tribunal Act 1975 (Cth). They submitted that it was thus able to take into account evidence that had not been before the primary decision-maker. This submission does not support the respondents' construction of s 44K(4). Section 40(1) of that Act gives the Administrative Appeals Tribunal express powers to receive evidence. Section 40(1A) of that Act gives it express powers to make orders in the nature of subpoenas. Section 44K did not give the Tribunal these powers. Each of the two statutes must be considered in its own terms. They cannot be treated as identical or as generating relevant analogies. The assumptions behind the 2010 amendments. Fourthly, the respondents relied on amendments relating to s 44K made in 2010, and on statements in Explanatory Memoranda about those amendments. They submitted that the amendments rest on a legislative assumption that the respondents' construction of the unamended s 44K – the provision at issue in these appeals – is correct. It is true that the function of the 2010 amendments was to overturn assumptions made by the Tribunal about its powers in certain earlier determinations. The impetus for the 2010 amendments came from a Competition and Infrastructure Reform Agreement the Council of Australian Governments on 10 February 2006. That was less than two months after the Tribunal made two of those determinations. reached by However, subject to one exception noted above144, no argument was advanced to the Tribunal challenging or analysing the correctness of those assumptions145. Hitherto, no judicial decision has analysed the correctness of those assumptions. On analysis, the assumptions are incorrect. In amending s 44K, the legislature may have been mistaken as to what the meaning of the unamended s 44K was. In Cape Brandy Syndicate v Inland Revenue 143 See below at [146]-[147]. 144 See above at [143]. 145 For example, Re Sydney International Airport (2000) ATPR ¶41-754 at 40,755 [8]; Re Freight Victoria Ltd (2002) ATPR ¶41-884 at 45,128 [22]; Re Virgin Blue Airlines Pty Ltd (2005) 195 FLR 242 at 248-249 at [13]; Re Services Sydney Pty Ltd (2005) 227 ALR 140 at 144 [9]. In Re Application by Fortescue Metals Group Ltd (2006) 203 FLR 28 at 35 [29], in contrast, the matter was argued: the Tribunal saw itself as able to control the materials relied on by the parties, and denied that it was "bound to consider any submissions or material placed before the Minister." Commissioners, Lord Sterndale MR said146: "subsequent legislation, if it proceed upon an erroneous construction of previous legislation, cannot alter that previous legislation". In Ormond Investment Co Ltd v Betts, Lord Buckmaster quoted that statement with approval147. So did Dixon, Evatt and McTiernan JJ in Deputy Federal Commissioner of Taxes (SA) v Elder's Trustee and Executor Co Ltd148. Implications from other parts of the Act. Fifthly, the respondents relied on implications to be drawn from other parts of the Act. One proposed implication concerned s 44ZQ. That section gave the Tribunal power to review final determinations by the Commission of access disputes. Section 44ZQ specifically provided that ss 103-110 did not apply to reviews undertaken pursuant to it. This, the respondents submitted, raised a strong implication that ss 103-110 were intended to apply to reviews under s 44K. The same point was made about ss 10.82B and 10.82C in Pt X of the Act. This submission must fail. Sections 44ZQ, 10.82B and 10.82C concern review by the Tribunal of a decision made by the Commission, not by the Minister. It was therefore not inappropriate for a specific exclusion of ss 103-110 to be made. The respondents' argument rests on an express exclusion of ss 103-110 in provisions to which they would otherwise apply – provisions enabling review of Commission decisions by the Tribunal. The respondents sought to draw from that exclusion an implication that ss 103-110 apply to a review by the Tribunal of a decision not made by the Commission. The reasoning does not follow. The respondents also relied on a note to s 10.82E, and on s 10.82G of Pt X. These provisions concern review by the Tribunal of certain decisions of the Minister relating to overseas cargo shipping under s 10.82D. The note to s 10.82E is to the effect that Pt IX Div 2 applies to proceedings before the Tribunal pursuant to that section. Section 10.82G provides that Pt IX Div 1 does not apply to a review by the Tribunal of a decision of a Minister under s 10.82D. These straws are too slender to support an argument that Pt IX Div 2 applies to s 44K. Part X of the Act is in many ways sui generis. It is a separate and self- contained code. It has its own distinctive numbering. Its special goals lie outside and to some degree contradict the goals of the rest of the Act. Review by the Tribunal of a s 10.82D decision by the Minister is not said to be a "re-consideration" of the matter. And at the time relevant to these proceedings s 13(3) of the Acts Interpretation Act 1901 (Cth) provided that the note to s 10.82E was not even part of the Act. 146 [1921] 2 KB 403 at 414. 147 [1928] AC 143 at 156. 148 (1937) 57 CLR 610 at 626; [1936] HCA 64. The Regulations. Sixthly, some respondents submitted that ss 44ZZP(1) and 172 of the Act supported the respondents' construction of s 44K. Section 44ZZP(1)(e) granted power to make regulations relating to procedure and evidence. Section 172 granted power to make regulations relating to procedure in the Tribunal. It is debatable whether these powers permitted the making of regulations inconsistent with s 44K. In any event, neither power has been exercised to make a regulation concerning procedure or evidence before the Tribunal in relation to s 44K. Further, it may be that the regulation-making power in s 44ZZP(1) related only to s 44ZP (re-arbitration of access disputes). It was also submitted that reg 22 supported the respondents' construction. That regulation conferred power on the Tribunal to give directions about preliminary statements of facts and contentions; the production of documents; and evidence. This power was said to demonstrate that the Tribunal could have regard to documents and other evidence which had not been before the Minister. However, reg 28Q(2) provided that reg 22 did not apply to a review. Further, reg 22 applied to "proceedings before the Tribunal". Regulation 22 was probably made under s 104, not s 44ZZP(1). This is because s 104 applies to regulations "with respect to evidence in proceedings before the Tribunal". For the reasons given above149, the definition of "proceedings" in s 102A does not refer to s 44K reviews. Practical disadvantages? Seventhly, some respondents claimed that the appellants' construction of s 44K would prevent the Tribunal from having regard to current information concerning the criteria raised by s 44H(4), particularly those requiring consideration of future circumstances. To this there are two answers. First, on the appellants' construction, the Tribunal's task was a confined one, capable of being accomplished quite soon after the Minister's decision was made. Secondly, any information which the Tribunal considered it needed in order to update the information that was before the Minister could be obtained from the Council under s 44K(6). Transmission of the "record". Finally, some respondents submitted that if the Tribunal could consider only the material that had been before the Minister, one would expect s 44K to contain provisions "providing for the transmission of the record considered by the Minister to the Tribunal". They submitted that there are no such provisions. They also submitted that it might be difficult for the Tribunal to ensure that it was confining itself to the material before the Minister. This reveals the danger of over-curialising the Tribunal. In practice, it would be easy for the Tribunal to ascertain what had been and what had not been before the Minister. If the Minister made a decision under s 44HA(1) and (2), that decision, together with the reasons for it, had to be given to the applicant and the 149 See above at [140]-[143]. service provider. If there was a deemed refusal because the Minister's decision on the declaration recommendation was not published within 60 days, the Council recommendation and the reasons for it would reveal the issues. That recommendation had to be published and given to the applicant under s 44F and to the service provider under s 44GC(1) and (4). If the Tribunal remained in doubt about whether it was confining itself to the material that had been before the Minister, it could make a s 44K(6) request for the Council's assistance. Conclusion. The Tribunal exceeded the powers s 44K(4) conferred on it in its review of the Minister's decisions. It did not analyse either the Council's recommendation on which the Minister's decision was based, or the reasons for the Minister's decision. The Tribunal went a long way outside the issues and material referred to in those documents. It misapprehended its jurisdiction as being to deal with a fresh application, rather than being to reconsider the Minister's decision in a confined way. It said that s 44K(4)-(5) meant that it "must reconsider each application afresh. This allows the parties to put before the tribunal for its consideration any material that may be relevant to the issues raised, whether or not that material was before the minister."150 That was a significant error in approach. the third question, concerning Thus the first two questions must be answered "No". One remedy contemplated by the parties was remitter to the Tribunal. That possibility enlivens the construction of s 44H(4). Section 44H(4)(a)-(f) set out six criteria. The Minister needed to be satisfied that these criteria were met before declaring a service151. These appeals raised three discrete questions of construction in relation to them. First, when would it be "uneconomical for anyone to develop another facility" within the meaning of criterion (b)? Secondly, what matters might the Minister have taken into account in deciding whether access would be "contrary to the public interest" under criterion (f)? And, thirdly, did the Minister have a residual discretion to refuse to declare a service even if satisfied that the criteria in s 44H(4)(a)-(f) were met? Criterion (b) Criterion (b) was: "it would be uneconomical for anyone to develop another facility to provide the service." The appellants "uneconomical" did not mean that "unprofitable". Rather, they submitted that "uneconomical" meant "wasteful of society's resources". They submitted that it is "uneconomical" for society's resources to be wasted by duplicating an existing facility if the existing facility submitted 150 Re Fortescue Metals Group Ltd (2010) 271 ALR 256 at 267 [24]. 151 See above at [9]. could meet reasonably foreseeable demand for the service it provided at a lower total cost than if the service was provided by two or more facilities. The Tribunal accepted the appellants' construction of criterion (b). On that approach, it found that if the existing Hamersley railway line was used by third parties and not duplicated, there would be capital savings of up to $2.75 billion. It also found that if the existing Robe railway line were used by third parties and not duplicated, there would be capital savings of $455- 651 million if the service provided by the Hamersley railway line were not declared and large capital savings if it were. Those findings demonstrate that economic waste would occur if the appellants did not gain access to the facilities. Capacity in excess of what was needed would be created, and the money used to create and operate that excess capacity would therefore be wasted. The result is an inefficient one. The Full Court, on the other hand, considered that "uneconomical" meant "unprofitable". The appellants' construction of criterion (b) should be accepted for the following reasons. The appellants' construction accepted. The first reason concerns some facts that were widely known when Pt IIIA was enacted. They involved infrastructure capable of delivering pay television services. One intended supplier of pay television services had equipment capable of transmitting its own signals and those of its rival. The former would not grant the latter access to its equipment. The latter then set about building its own equipment. This cost billions of dollars. It damaged the visual environment. It disturbed ordinary life across the whole of Australia during the processes of construction. Criterion (b) must be read as informed readers would have read it at the time of its enactment. Informed readers knowing those notorious and deplorable background facts would have read criterion (b) in the manner the appellants advocated. Secondly, the appellants' construction is more consistent with s 44AA(a), which stated the first object of Pt IIIA152. The construction of a duplicate facility, where the existing facility was capable of meeting reasonably foreseeable demand for the services it provided, necessarily results in those services being provided at greater cost than they could have been if the existing facility alone were employed. This does not promote the "economically efficient operation of, use of, and investment in the infrastructure by which services are provided". And it probably fails to "[promote] effective competition in upstream and downstream markets". As the Tribunal said153: 152 See above at [132]. 153 Re Fortescue Metals Group Ltd (2010) 271 ALR 256 at 387 [818]. "It is not hard to conceive of circumstances in which a market is less than effectively competitive because third parties, relying on marginally profitable alternative facilities, cannot truly compete with an incumbent using (a much more profitable) facility with natural monopoly characteristics." Thirdly, the word "unprofitable" directs attention to the particular position of a particular trader. It involves subtracting that trader's costs from that trader's gross revenue. "Uneconomical" is a less than apt description of that idea. "Uneconomical" is more apt to refer to other matters. One lay meaning of "economical" is avoiding waste; "uneconomical" in that sense means not avoiding waste. Another lay meaning of "economical" is harmony with the principles of economics. In that sense, "uneconomical" means antithetical to the principles of economics – the study of the production, consumption, transfer and distribution of wealth. One principle of economics is the idea that social welfare is increased when resources are allocated so as to diminish excess capacity. Another is the idea that if there is excess capacity, resources have been misallocated. And another is the idea that productive efficiency is enhanced when goods and services are produced at the lowest possible cost. Thus in ordinary usage it is "uneconomical for anyone to develop another facility" if it would be wasteful to do so or would increase excess capacity or would result in an inefficient use of scarce resources. These are appropriate meanings to attribute to a key provision of a statutory scheme the object of which is to promote the economically efficient operation of, use of, and investment in infrastructure. Further, the word "economically" in the statement of the first object of Pt IIIA in s 44AA(a) does not refer to questions of private profitability. There is no reason why "uneconomical" in s 44H(4)(b) should do so either, since s 44H(4)(b) is to be construed conformably with s 44AA(a) and with a view to effectuating the purpose that latter provision states. The appellants' submission finds support in Re Duke Eastern Gas Pipeline Pty Ltd154. That determination was decided by a panel of the Australian Competition Tribunal presided over by Hely J. Speaking of legislation in similar form to s 44H(4)(b), Hely J said that the "test is whether for a likely range of reasonably foreseeable demand for the services provided by means of the [facility], it would be more efficient, in terms of costs and benefits to the community as a whole, for one [facility] to provide those services rather than more than one"155. Hely J saw efficiency as involving productive, allocative and 154 (2001) 162 FLR 1. 155 Re Duke Eastern Gas Pipeline Pty Ltd (2001) 162 FLR 1 at 32 [137]. dynamic efficiency. Hely J used these expressions in the following senses: "Productive efficiency is production at least cost. Allocative efficiency occurs when services are provided to those who value them most highly. Dynamic efficiency involves preserving incentives for innovation and investment."156 Hely J added: "if a single [facility] can meet market demand at less cost (after taking into account productive allocative and dynamic effects) than two or more [facilities], it would be 'uneconomic', in terms of criterion (b), to develop another [facility] to provide the same services."157 This construction is intrinsically meritorious. But it has a further significance. In 2006, Pt IIIA was extensively amended. The amendments followed a report of the Productivity Commission on 28 September 2001. The report analysed the Tribunal's approach to criterion (b) in Re Duke Eastern Gas Pipeline Pty Ltd. The report concluded158: "In sum, the Commission considers that having criterion (b) operate as a technologies (at least for screening device for natural monopoly point-to-point transmission services like gas pipelines) is not necessarily inappropriate, provided that criterion (a) is strengthened … Finally, the Commission considers that it is essential that criterion (a) only be met where the facility in question can exercise substantial and enduring market power. It is therefore of the view that criterion (a) must be strengthened ..." (emphasis in original) Like gas pipelines, railways are point-to-point transmission services. In 2006, s 44H(4)(a) was amended in response to that report. The amended criterion (a) required that access to a particular market would promote a material increase in competition in at least one market other than the market for the service in relation to which access was sought. But s 44H(4)(b) was left untouched. The report of the Productivity Commission did not suggest that criterion (b) created a private profitability test, or that the Duke test was wrong. Fourthly, the Full Court's "private profitability" approach produces unsatisfactory results. The respondents' construction of criterion (b) creates a risk of two facilities being built in circumstances where building the second facility would waste resources and defy sound economic principles. That is because their construction compels the building of a duplicate facility whenever 156 Re Duke Eastern Gas Pipeline Pty Ltd (2001) 162 FLR 1 at 14 [63]. 157 Re Duke Eastern Gas Pipeline Pty Ltd (2001) 162 FLR 1 at 14 [64]. 158 Australia, Productivity Commission, Review of the National Access Regime, Report No 17, (2001) at 182. it is financially justifiable for a particular market participant, in view of its peculiar characteristics, to build a second facility. The appellants' construction of criterion (b) avoids this problem. On its construction, a duplicate facility will not be built if the existing facility is capable of satisfying reasonably foreseeable demand for the services it provides. The appellants' construction therefore better effects one of the purposes of Pt IIIA – the pursuit of economic efficiency. It is more efficient to have only one facility, provided it has capacity surplus to its owner's requirements, and for that owner to be allowed to charge others to use that capacity in return for being compelled to provide access. The Full Court itself acknowledged that to interpret criterion (b) as imposing a "private profitability" test rather than adopting the appellants' interpretation "might occasion some wastage of society's resources in some cases"159. The appellants gave a powerful example: "the private profitability test focuses on a particular firm. Its satisfaction may depend upon the idiosyncratic position of that firm – for example, whether that firm has an integrated business that produces a valuable commodity. It considers whether the profit from the firm's activities, including related activities in upstream or downstream markets, may justify the construction of an alternative facility. The impact of this approach is exemplified by the circumstances of this case. Because there is significant profit to be made in iron ore (at least in the current circumstances), the Tribunal concluded that other companies could profitably duplicate the existing railway line, even though doing so would incur vastly greater costs than using the existing facility, because the profit from iron ore to be transported could more than cover the cost of the wasteful second facility. For example, if there are 10 independently-owned mining tenements for mining a valuable commodity some 50 km from a port, then it might be privately profitable for each tenement owner to build a separate railway line to the port that carries one train per day, in circumstances where a single existing line could carry 10 trains per day. On the Full Court's approach, there would be no declaration and 9 unnecessary lines would be built." Why, then, did the Full Court conclude that criterion (b) rested on a "private profitability" test? 159 Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal (2011) 193 FCR 57 at 98 [100] per Keane CJ, Mansfield and Middleton JJ. Problems in the Full Court's reasoning. One aspect of the Full Court's reasoning appears in the following passage, which criticised the Tribunal's adoption of the appellants' construction of criterion (b)160: "The Tribunal was influenced by the consideration reflected in the evidence of some economists that to give the phrase 'uneconomical for anyone' its natural meaning of 'any individual who can be identified' would be to countenance the possibility that an individual might be willing to subsidise the cost of developing another facility by subsidising the cost of that development from the profits of the sales of iron ore rather than sole reliance on the profits of providing the service … That argument may commend itself to some (though not all) economists; but nothing in the language of s 44H(4) or the extraneous materials … suggests that the legislature regarded that possibility as one which was not to be countenanced." This passage illustrates the intentionalist fallacy in statutory construction. It is not the only passage that does so161. The question is not what possibilities the legislature regarded as those which were "not to be countenanced". The question is: what do the words in criterion (b) mean? If a particular consequence of one possible construction of criterion (b) is absurd or unreasonable, that is a factor legitimately to be taken into account in deciding whether another construction should be preferred. What the Full Court criticised is an instance of it. So is the appellants' example of the 10 mining tenements162. The Full Court referred to "the competing considerations at play in the compromise embodied" in criterion (b)163. It viewed one of those considerations as being a "philosophy" which it detected in Pt IIIA in general and in s 44H in particular. According to the Full Court, the philosophy in question164: 160 Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal (2011) 193 FCR 161 See Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal (2011) 193 FCR 57 at 95 [85], 97 [97] and 98 [99] and [100]. 162 See above at [167]. 163 Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal (2011) 193 FCR 164 Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal (2011) 193 FCR "makes the granting of access to override the otherwise legitimate interests of incumbent owners a distinctly exceptional occurrence which is simply not justified by an evaluation by a regulator that economic efficiency from the point of view of society as a whole would be served by a declaration of access. If the intention of the legislature had been to establish such a regime, it could have been expected to express its intentions in very different terms." One matter should be cleared aside at the outset. The Tribunal spoke pejoratively of regulators in that passage (and elsewhere165). It made those remarks in the course of rejecting the appellants' construction of criterion (b). That construction gives no peculiarly enhanced role to this apparently despised class. Is it correct to describe an administrative decision made by a Minister on the recommendation of an expert, independent body like the Council as an evaluation by a regulator? If so, whatever construction is arrived at, criterion (b) will have to be applied by a regulator. That circumstance does not make any one test preferable to others. In fact, the Minister is probably not a "regulator" in any relevant sense. In his oral argument in these very appeals, counsel for the Rio Tinto respondents said: "It was important in the eyes of the Hilmer Committee … that the decision about the grant of access rights should be a high level governmental decision rather than a decision by a regulator." He referred to the following passage in the Hilmer Report166: "As the decision to provide a right of access rests on an evaluation of important public interest considerations, the ultimate decision on this issue should be one for Government, rather than a court, tribunal or other unelected body. A legislated right of access should be created by Ministerial declaration under legislation." There is a common law rule of statutory interpretation that only clear words will suffice to remove property rights or to extinguish valuable rights relating to their exercise167. That common law rule reflects the "philosophy" of 165 Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal (2011) 193 FCR 57 at 93 [79] ("a regulator's evaluation of efficiency from the perspective of society as a whole"), 95 [85] ("the evaluation of a regulator") and 98 [99] ("a regulator's evaluation of productive efficiency"). 166 Australia, National Competition Policy Review, National Competition Policy, 167 The Commonwealth v Hazeldell Ltd (1918) 25 CLR 552 at 563; [1918] HCA 75; Mabo v Queensland [No 2] (1992) 175 CLR 1 at 111; [1992] HCA 23; ICM Agriculture Pty Ltd v The Commonwealth (2009) 240 CLR 140 at 207 [175]; [2009] HCA 51. which the Full Court spoke. Whether any further manifestation of the "philosophy" can be found in the Act itself depends on its terms. The terms of s 44H(4) certainly created significant hurdles to be jumped before a declaration could be made. However, it is not correct to treat the appellants' construction of the criteria in s 44H(4), and in particular their construction of criterion (b), as justifying the making of a declaration merely because of "an evaluation by a regulator that economic efficiency from the point of view of society as a whole would be served by a declaration of access." Criteria (a)-(f) were, as already noted, to some degree general168. But they were not open-ended. And the Minister had no capacity to take into consideration any other matter thought to be relevant169. Section 44H did not justify an open-ended inquiry into every possible aspect of social welfare. Obviously, the access regime created by Pt IIIA was capable of having an impact on the exercise of private proprietary rights. The language of the Act did not suggest that interference with those rights would be lightly done, but it did not treat it as "distinctly exceptional". Indeed, the concerns of the "philosophy" were vindicated in later provisions of Pt IIIA. Those provisions provided safeguards for the service provider against whom access was granted. One safeguard lay in the fact that a successful applicant for a declaration did not achieve access immediately. The making of a declaration gave only a right to negotiate for access, and, if negotiation failed, a right to submit to arbitration about access. If contractual agreement was achieved, the contract could be enforced by contractual remedies under the general law. If it was registered under s 44ZW of the Act, s 44ZY provided that it could be enforced instead by way of s 44ZZD relief. If contractual agreement was not achieved, access could be obtained only once the Commission had settled the terms and conditions of access after a process of arbitration under s 44V. Those terms and conditions might have been onerous to the service provider. Section 44V(2)(d) and (da) provided that the Commission could require the service provider to extend the facility or to permit interconnection to the facility by the access-seeker. But s 44W(1) forbade the making of a determination which would have any of the following effects: preventing an existing user obtaining a sufficient amount of the service to be able to meet the user's reasonably anticipated requirements …; 168 See above at [137]. 169 See below at [192]-[193]. preventing a person from obtaining, by the exercise of a pre-notification right, a sufficient amount of the service to be able to meet the person's actual requirements; depriving any person of a protected contractual right; resulting in the third party becoming the owner (or one of the owners) of any part of the facility, or of extensions of the facility, without the consent of the provider; requiring the provider to bear some or all of the costs of extending the facility or maintaining extensions of the facility; requiring the provider to bear some or all of the costs of interconnections to the facility or maintaining interconnections to the facility." Further, s 44X(1) required the Commission to take the following matters into account in making a determination: the objects of this Part; the legitimate business interests of the provider, and the provider's investment in the facility; the public interest, including the public interest in having competition in markets (whether or not in Australia); the interests of all persons who have rights to use the service; the direct costs of providing access to the service; the value to the provider of extensions whose cost is borne by someone else; the value to the provider of interconnections to the facility whose cost is borne by someone else; the operational and technical requirements necessary for the safe and reliable operation of the facility; the economically efficient operation of the facility; the pricing principles specified in section 44ZZCA." The pricing principles specified in s 44ZZCA were: that regulated access prices should: be set so as to generate expected revenue for a regulated service or services that is at least sufficient to meet the efficient costs of providing access to the regulated service or services; and include a return on investment commensurate with the regulatory and commercial risks involved; and that the access price structures should: allow multi-part pricing and price discrimination when it aids efficiency; and not allow a vertically integrated access provider to set terms and conditions that discriminate in favour of its downstream operations, except to the extent that the cost of providing access to other operators is higher; and that access pricing regimes should provide incentives to reduce costs or otherwise improve productivity." Another safeguard was s 44ZZN of the Act. It conferred an entitlement to reasonable compensation where an access determination by the Commission resulted in an acquisition of property. The amount of compensation was to be agreed between the access-seeker and the service provider, or to be determined by a court. It follows that it was misconceived to construe s 44H(4)(b) as if it alone vindicated the philosophy which the Full Court identified in Pt IIIA. Many other provisions vindicated that philosophy before access could be granted under the Act. The Full Court said the travaux préparatoires supported its construction of criterion (b) as referring to whether "it would be unprofitable for anyone" to provide the relevant service. The Full Court took the view that the Hilmer Report (the 1993 report of a Committee of Inquiry into National Competition Policy), the Competition Principles Agreement (an agreement made on 11 April 1995 between the Commonwealth, State and Territory Governments), and a 2001 report of the Productivity Commission, suggested that Pt IIIA was "intended to minimise regulatory intervention in the market place"170. To some 170 Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal (2011) 193 FCR extent, the Full Court quoted from these documents selectively. It quoted a passage from the Hilmer Report demonstrating that as "a general rule, the law imposes no duty on one firm to do business with another", and stating this to be "an important and fundamental principle based on notions of private property and freedom to contract". However, the Full Court did not quote the immediately succeeding passage171: "The law has long recognised that this freedom may require qualification on public interest grounds in some circumstances, particularly where a form of monopoly is involved. Thus, for example, the natural monopoly character of certain transport functions gave rise to the common law notion of 'common carriers', where such carriers have an obligation to carry certain goods." The Full Court also quoted a statement in the Hilmer Report that accepted the need carefully to limit the circumstances in which one business is required by law to make its facilities available to another. But it did not quote the passage which came straight after it172: "Nevertheless, there are some industries where there is a strong public interest in ensuring that effective competition can take place, without the need to establish any anti-competitive intent on the part of the owner for the purposes of the general conduct rules. The telecommunications sector provides a clear example, as do electricity, rail and other key infrastructure industries. Where such a clear public interest exists, but not otherwise, the Committee supports the establishment of a legislated right of access". Indeed, giving the rail industry as an example, the Hilmer Report said173: "In some markets the introduction of effective competition requires competitors to have access to facilities which exhibit natural monopoly characteristics, and hence cannot be duplicated economically." In fact, the Hilmer Report did not suggest that compulsory provision of Nor did the other travaux access should be "distinctly exceptional". 171 Australia, National Competition Policy Review, National Competition Policy, 172 Australia, National Competition Policy Review, National Competition Policy, 173 Australia, National Competition Policy Review, National Competition Policy, préparatoires. The travaux préparatoires do not support the Full Court's construction. But they are not decisive in favour of the appellants' construction either. The recommendations of the Hilmer Report, for example, are pitched at a very high level of generality. It recommended four criteria to be satisfied before a service was declared. The first Hilmer criterion was174: "Access to the facility in question is essential to permit effective competition in a downstream or upstream activity". This foreshadowed s 44AA(a). The second Hilmer criterion was 175: "The making of the declaration is in the public interest, having regard to: the significance of the industry to the national economy; and the expected impact of effective competition in that industry on national competitiveness." This foreshadowed criterion (c). The third Hilmer criterion concerned the imposition of fair terms of access. This criterion was the forerunner of Pt IIIA Div 3. The fourth Hilmer criterion was that the creation of a right to access had been recommended by what is now the Council. Though its criteria prefigured some of the essential elements of Pt IIIA, the Hilmer Report did not recommend criteria (a)-(f) in terms. Hence it casts no useful light on the competing constructions of criterion (b) at issue in these appeals. Studying the evolution of criterion (b) through the 1994 draft legislation, the draft intergovernmental agreement on "competition principles" released by the Council of Australian Governments in 1994, the Competition Policy Reform Bill 1995, and the Competition Principles Agreement of 1995 into its form as enacted does not offer any real assistance either. In the Explanatory Memoranda to the relevant Bills the statutory words are repeated, but no detailed explanation is given of their meaning. In short, the Full Court appears to have misunderstood the appellants' submission on the construction of criterion (b); exaggerated the extent to which the "philosophy" it assigned to Pt IIIA was manifested in s 44H; overlooked later provisions in Pt IIIA that operated to safeguard service provider interests against 174 Australia, National Competition Policy Review, National Competition Policy, 175 Australia, National Competition Policy Review, National Competition Policy, the concerns underlying that "philosophy"; placed too much weight on the travaux préparatoires; and interpreted them too favourably to the respondents. The principal textual point made by the Full Court – and this is the strongest point in favour of the construction it preferred – was that the words "uneconomical for anyone" required a search for a particular market participant for whom it might or might not be "uneconomical" to build a duplicate facility. The Full Court said of the phrase "it would be uneconomical for anyone"176: "The perspective of this phrase is that of a participant in the market place who might be expected to choose to develop another facility in that person's own economic interests. … It is tolerably clear that the phrase 'uneconomical for anyone' is a criterion based on the facts of the market place as to what is economically feasible for a participant in the market place to achieve, rather than a criterion based on evaluation by a regulator of what is economically efficient from the perspective of the community as a whole." That conclusion is not in fact clear. The question criterion (b) posed was: would the development of another facility be uneconomical for anyone? It is the development of the other facility which must be uneconomical. The words "for anyone" do not refer to the particular circumstances of each possible developer. They focus on what would be true for anyone. They identify the activity of anyone developing another facility to provide the service. They sharpen that focus by inquiring whether the development of another facility by anyone would be uneconomical in the sense of being wasteful of resources. If the development is uneconomical as that word is used in ordinary English – wasteful and inefficient – no matter whom one contemplates as a developer, criterion (b) is satisfied. In relation to the phrase "uneconomical for anyone" the Full Court also said177: "It is … significant … that s 44X(1)(g) requires that the [Commission] must take into account 'the economically efficient operation of the facility'. This provision shows that when the Parliament sought to speak of economic efficiency, it did so in terms of individual facility owners in the market. Thus, when s 44H(4)(b) speaks of 'uneconomical 176 Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal (2011) 193 FCR 177 Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal (2011) 193 FCR for anyone', it is concerned, not with the economic efficiency from the point of view of the community as a whole, but with the ability of someone economically to duplicate the facility." There are concrete difficulties in this reasoning. Criterion (b) concerns whether the Minister should make a decision to declare a service. It deals with whether it is "uneconomical for anyone" to build a new facility that duplicates an existing one. Section 44X(1)(g), on the other hand, concerns one of several matters relevant to the Commission's decision as to whether to make an access determination after the Minister has declared a service. And it deals with a completely different question from that dealt with by criterion (b). It deals with whether the existing facility, not the new one, is economically efficient in its operation. Section 44X(1)(g) thus casts no light on the meaning of the phrase "uneconomical for anyone" to develop another facility. Another argument the Full Court employed related to criterion (e) – "access to the service is not already the subject of an effective access regime". In that regard, s 44H(5) provided: "In deciding whether an access regime established by a State or Territory that is a party to the Competition Principles Agreement is an effective access regime, the designated Minister: (a) must, subject to sub-section (6A), apply the relevant principles set out in that Agreement; and (aa) must have regard to the objects of this Part; and (b) must, subject to section 44DA, not consider any other matters." One of the relevant principles in the Competition Principles Agreement for "third party access to services provided by means of significant infrastructure facilities" is: "it would not be economically feasible to duplicate the facility". The Full Court said178: "In seeking to discern the intent of the Parliament, it is important to note that s 44H(4)(e) and (5) … contemplate that an access regime established by a State will be an 'effective access regime' for the purposes of s 44H(4)(e) if it applies the principles set out in the Competition Principles Agreement. Insofar as those principles include the principle that one of the criteria for the granting of access to a service provided by a facility is that 'it would not be economically feasible to duplicate the 178 Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal (2011) 193 FCR facility', it is difficult to attribute to the Commonwealth Parliament the intention that a State-based 'effective access regime', the existence of which would preclude the making of a declaration under Pt IIIA … should stand on a different basis in relation to criterion (b) from that on which Pt IIIA … stands." There are two flaws in this reasoning. First, it assumes that in relation to a State-based "effective access regime" the Minister must apply the same criteria as he applies to services declared under s 44H(1). This is not so. In deciding whether there is an effective access regime, the Minister must apply the principles in the Competition Principles Agreement and must have regard to the objects of Pt IIIA. The principles in the Competition Principles Agreement are not the same as criteria (a)-(f). There is no equivalent in the Competition Principles Agreement to criterion (f). In addition, criterion (a) is less onerously expressed in the agreement. The second flaw in the Full Court's reasoning is that it assumes that both "economically feasible" and "uneconomical for anyone" refer to "private profitability" rather than to "economic efficiency". That is, the reasoning is circular. It assumes the conclusion it is directed to establishing. In a similar vein, the Full Court said of the Competition Principles Agreement that it indicated "that in the thinking which informed the introduction of Pt IIIA of the Act, the phrase 'uneconomical for anyone' in s 44H(4)(b) meant 'not economically feasible for anyone' in the market place."179 That claim is also flawed. The Competition Principles Agreement did not say "not economically feasible for anyone". It said only "not … economically feasible". Further, "economically feasible" means "feasible or practicable taking into account the principles of economics". To develop a duplicate facility where an existing facility can already meet reasonably foreseeable demand, and thereby to increase excess capacity, is neither feasible nor practicable when the principles of economics are taken into account. Finally, the Full Court considered that the "private profitability" test had "the attraction of being easier to apply than" the "economically wasteful" test. It said180: "The difficulties in identifying an individual who might profitably build the line are of a different order of concern from the evaluation of relative productive efficiency. Whether 'anyone' can be identified for whom the development of an alternative facility is economically feasible is a matter 179 Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal (2011) 193 FCR 180 Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal (2011) 193 FCR of looking at the facts of the market place. If an examination of the facts shows that there is such a person, whoever that might be, and whatever that person's circumstances, then regulatory interference in the interplay of market forces is not warranted, even if the regulator might make an evaluation that access would be a convenient course by which to achieve effective competition in another market." This reasoning does not demonstrate that the "economically wasteful" test is harder to apply. In this case, the Tribunal did not appear to have difficulty calculating the net capital savings that would follow the declaration of the service provided by the Hamersley line. The Tribunal simply determined the difference between the estimated cost of building a second facility and the estimated cost of the minimum expansions which would have to be made to the Hamersley line. Criterion (f) Criterion (f) was: "access (or increased access) to the service would not be contrary to the public interest." The appellants submitted that criterion (f) authorised a narrow inquiry only. They submitted that it was directed only to whether there could be concrete harm to an identified aspect of the public interest which was not otherwise caught by criteria (a)-(e). They pointed out that the earlier criteria largely relate to competition, efficiency and safety. And the appellants gave examples of the residual matters criterion (f) might capture – matters of national security, national sovereignty and environmental harm. The appellants correctly submitted that the Tribunal had engaged in a detailed factual and counterfactual analysis of the likely net balance of all the social costs and benefits of access. This analysis was based on assumptions about what the extent and conditions of access would be, when and if it was eventually granted. The appellants noted that the Full Court approved the Tribunal's analysis. The Tribunal seemed to slide from correct statements to erroneous ones. For example, it correctly stated that criterion (f) should not be used to call into question the results obtained by application of criteria (a)-(e). But it wrongly stated that assumptions about the terms of access needed to be considered under criterion (f). It wrongly stated that not only cross-benefit issues, but "broader issues concerning social welfare and equity, and the interests of consumers"181, fell for consideration under criterion (f). It also wrongly stated that the benefits found under criteria (a) and (b), "and other benefits not considered under earlier criteria, as well as the costs of access", had to be taken into account under criterion (f)182. The appellants were correct in contending that this approach was 181 Re Fortescue Metals Group Ltd (2010) 271 ALR 256 at 446 [1168]. 182 Re Fortescue Metals Group Ltd (2010) 271 ALR 256 at 445 [1162]. erroneous. The appellants' construction of criterion (f) should be accepted for three reasons. First, the Tribunal's approach to criterion (f) is so wide in scope that criterion (f) must inevitably overlap with criteria (a)-(e). It thus tends either to make them redundant or to generate double-counting. These results are to be avoided, if an alternative construction is available. Secondly, the Tribunal's construction asks whether declaration of the service would be better for the public than non-declaration. The Tribunal's construction assumes that to declare a service was ipso facto to grant access to it. But that is not so. A declaration gave an access-seeker an opportunity to negotiate with the service provider, and, if negotiation failed, to obtain an access determination after Commission arbitration. The access-seeker may never have achieved agreement. And the Commission may not have made a favourable access determination. Thirdly, criterion (f) posed the question whether any access is contrary to the public interest. It did not call for an assessment of what type of access was likely to be granted either by contract or by an access determination. If that assessment had been called for, the Minister would have needed to predict the future within the relatively short period of time allowed for decision. The Minister would necessarily have been operating on inadequate information in making that prediction. The Tribunal's analysis, on the wide approach it adopted, was conducted after a very long hearing at which massive quantities of evidence had been received. Its analysis was extraordinarily sophisticated and lengthy183. The provisions of Pt IIIA called for significant expedition in the disposition of applications for declarations. The approach the Tribunal and the Full Court favoured is inconsistent with those provisions. Discretion The appellants submitted that if criteria (a)-(f) were satisfied, the Minister had no residual discretion to decide not to declare the service. The Tribunal, on the other hand, appeared to consider that a similar approach to that which it took in relation to criterion (f) could be undertaken as part of a residual discretion under s 44H(4). The Rio Tinto and BHP Billiton respondents relied on Sydney Airport Corporation Ltd v Australian Competition Tribunal184. But that case stated no argument of principle. 183 Re Fortescue Metals Group Ltd (2010) 271 ALR 256 at 444-468 [1160]-[1305]. 184 (2006) 155 FCR 124 at 137 [39]. There is no language in s 44H that suggests that a discretion exists. Section 44H(4) did not resemble, for example, s 44X in obligating decision-makers to have regard to a large range of factors, permitting the decision-makers to take any other relevant factor into account and then letting the decision-makers weigh those factors in whatever manner they saw fit. The breadth of criteria (a)-(f) pointed strongly against the existence of a discretion. It would be very difficult to divine from s 44H what principles would have governed any discretion. The concluding sentence of s 44H(2) provided that s 44H(2) did not limit the grounds on which the Minister might decide whether or not to declare a service; but s 44H(4) did limit them. For those reasons, s 44H conferred no residual discretion on the Minister. Section 44H(2) and (4) together obliged a Minister who had been satisfied of criteria (a)-(f) to declare the relevant service. Sydney Airport Corporation v Australian Competition Tribunal is incorrect on this point. Orders There was no dispute that if the appellants' submissions on criterion (b) were accepted, it was satisfied. The reasoning of the Full Court having been rejected, the Tribunal decision stands, but for its erroneous approach to the scope of the hearing, to criterion (f) and to the discretion question. Since the discretion does not exist, there is no factual matter still to be investigated in relation to it. The Tribunal's approach under criterion (f) has been rejected. Since neither it nor the Full Court pointed to any factual material relevant to criterion (f) which calls for future investigation, there is no need to return the matter to the Tribunal for that reason. And any further Tribunal hearing of a narrower kind than that which took place earlier will generate less factual material, not more. Hence there is no need to return the matter to the Tribunal. The appellants' application for the following orders should therefore be acceded to. The appeals should be allowed with costs. The respondents should pay the costs of the appellants in this Court and in the Full Court of the Federal Court of Australia. The orders of the Full Court should be set aside. In lieu thereof orders should be made quashing the determinations of the Tribunal concerning the services in relation to the Hamersley railway line and the Robe railway line. That will leave in place the decision of the Treasurer of the Commonwealth of Australia to declare the relevant services in relation to Hamersley and Robe lines. It will also bring an end to these extraordinarily protracted proceedings.

HIGH COURT OF AUSTRALIA ABT17 AND APPELLANT MINISTER FOR IMMIGRATION AND BORDER PROTECTION & ANOR RESPONDENTS ABT17 v Minister for Immigration and Border Protection [2020] HCA 34 Date of Hearing: 6 August 2020 Date of Judgment: 14 October 2020 ORDER Appeal allowed. Set aside the orders of the Federal Court of Australia made on 16 April 2019 and, in their place, order that: the appeal to that Court be allowed; the orders of the Federal Circuit Court of Australia made on 23 March 2018 be set aside and, in their place, it be ordered that: (i) writs of certiorari and mandamus be issued to the second respondent quashing the decision made on 16 December 2016 and remitting the matter to be determined according to law; and the first respondent pay the applicant's costs of the application for judicial review to the Federal Circuit Court of Australia; and the first respondent pay the appellant's costs of the appeal to that Court. The first respondent pay the appellant's costs of the appeal to this Court. On appeal from the Federal Court of Australia Representation M A Schilling with A N P McBeth for the appellant (instructed by Clothier G A Hill for the first respondent (instructed by Sparke Helmore) Submitting appearance for the second respondent Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS ABT17 v Minister for Immigration and Border Protection Immigration – Refugees – Application for protection visa – Immigration Assessment Authority ("IAA") – Review by IAA under Pt 7AA of Migration Act 1958 (Cth) – Where delegate of Minister for Immigration and Border Protection ("Minister") refused to grant appellant temporary protection visa – Where delegate accepted appellant's account as plausible, but found appellant did not hold well-founded fear of persecution based on country information – Where delegate's decision referred to IAA for review – Where IAA affirmed delegate's decision – Where IAA departed from delegate's assessment of appellant's credibility – Where under s 473DB IAA generally required to review fast track reviewable decision by considering review material, and without accepting new information or interviewing applicant – Where under s 473DC IAA may get new information not before Minister and that IAA considers may be relevant, including by inviting applicant to interview – Where under s 473DD IAA must not consider new information unless satisfied there are exceptional circumstances, and that new information was not and could not have been before Minister or is credible personal information – Whether legally unreasonable for IAA to depart from delegate's assessment of appellant's credibility without inviting appellant to interview – Whether appellant's demeanour "new information" within meaning of s 473DC – Whether failure to invite appellant to interview was material to IAA's decision. Words and phrases – "credibility", "de novo review", "demeanour", "fast track reviewable decision", "Immigration Assessment Authority", "informational gap", "new "interview", information", "review material", "temporary protection visa". "legal unreasonableness", "materiality", "material", Migration Act 1958 (Cth), Pt 7AA, ss 473DB, 473DC, 473DD. KIEFEL CJ, BELL, GAGELER AND KEANE JJ. Part 7AA of the Migration Act 1958 (Cth) confers jurisdiction on the Immigration Assessment Authority to review a "fast track reviewable decision", referred to it by the Minister for Immigration and Border Protection, by which a delegate of the Minister has refused to grant a protection visa to the "referred applicant". The Part has been examined in detail on several occasions1. The scheme of the Part is to impose a duty on the Authority to review the fast track reviewable decision referred to it by the Minister2 by "considering" the "review material" provided to it by the Secretary of the Department of Immigration and Border Protection at the time of referral3, without accepting or requesting "new information" and without interviewing the referred applicant4, subject to the Authority having specific powers to "get"5 and, in specified circumstances6 and on specified conditions7, to "consider" new information. One way the Authority is empowered to get new information is by inviting a person, who can be the referred applicant, to give new information at an interview which the Authority can conduct in person or by telephone or in any other way8. The duty of the Authority to review a referred decision is imposed on the implied condition that the duty must be performed within the bounds of 1 Plaintiff M174/2016 v Minister for Immigration and Border Protection (2018) 264 CLR 217 at 225-232 [13]-[38]; BVD17 v Minister for Immigration and Border Protection (2019) 93 ALJR 1091 at 1094-1096 [3]-[17]; 373 ALR 196 at 198-201; CNY17 v Minister for Immigration and Border Protection (2019) 94 ALJR 140 at 144-145 [2]-[8]; 375 ALR 47 at 48-50; Minister for Immigration and Border Protection v CED16 (2020) 94 ALJR 706; 380 ALR 216. Section 473CC of the Migration Act. Section 473CB of the Migration Act. Section 473DB of the Migration Act. Section 473DC of the Migration Act. Section 473DD of the Migration Act. Sections 473DE and 473DF of the Migration Act. Section 473DC(3)(b) of the Migration Act. reasonableness, and the powers of the Authority to get and consider new information are likewise conferred on the implied condition that those powers must be considered and where appropriate exercised within the bounds of The question of principle in this appeal is whether compliance with the reasonableness condition can compel the Authority to exercise its powers to get and consider new information by inviting a referred applicant to an interview in order to assess and consider his or her demeanour in the conduct of a review. The answer is that it can, and that in this case it did. The applicable principles The nature of the jurisdiction exercised by the Authority when conducting a review of a fast track reviewable decision is settled10: "[T]he Authority when conducting a review of a fast track reviewable decision is not concerned with the correction of error on the part of the Minister or delegate but is engaged in a de novo consideration of the merits of the decision that has been referred to it. The task of the Authority ... is to consider the application for a protection visa afresh and to determine for itself whether or not it is satisfied that the criteria for the grant of the visa have been met." "Review material", which the Secretary is obliged in every case to provide to the Authority and which the Authority is obliged in every case to consider in exercising that jurisdiction, comprises material within three categories. The first is a statement concerning the referred decision setting out the findings of fact made by the delegate, referring to the evidence on which those findings were based and giving reasons for the decision11. The second is material provided by the referred 9 Plaintiff M174/2016 v Minister for Immigration and Border Protection (2018) 264 CLR 217 at 227 [21]; BVD17 v Minister for Immigration and Border Protection (2019) 93 ALJR 1091 at 1096 [15]; 373 ALR 196 at 200; CNY17 v Minister for Immigration and Border Protection (2019) 94 ALJR 140 at 145 [6]-[7]; 375 ALR 10 Plaintiff M174/2016 v Minister for Immigration and Border Protection (2018) 264 CLR 217 at 226 [17]. 11 Section 473CB(1)(a) of the Migration Act. applicant to the Minister before the delegate made the referred decision12. The third is other material in the Secretary's possession or control considered by the Secretary to be "relevant" to the review13 in the sense that it is "capable directly or indirectly of rationally affecting assessment of the probability of the existence of some fact about which the Authority might be required to make a finding"14. Conformably with the nature of the jurisdiction to be exercised by the Authority in the conduct of the review, the obligation of the Authority to "consider" the review material provided to it by the Secretary is to "examine the review material ... to form and act on its own assessment of the relevance of that material to the review of the referred decision"15. The purpose of obliging the Secretary to provide the review material to the Authority and of obliging the Authority to consider the review material provided to it by the Secretary is evidently to ensure that the Authority, in conducting its de novo consideration of the merits of the referred decision, has and examines for itself the same information that was before the Minister and that was therefore available to be taken into account by the delegate when making the referred decision. "New information", which the Authority can only get and consider in the exercise of its specific powers, comprises any communication of "knowledge of facts or circumstances relating to material or documentation of an evidentiary nature"16 which was not before the Minister when the delegate made the referred 12 Section 473CB(1)(b) of the Migration Act. 13 Section 473CB(1)(c) of the Migration Act. 14 See CNY17 v Minister for Immigration and Border Protection (2019) 94 ALJR 140 at 145 [6]; 375 ALR 47 at 50. 15 CNY17 v Minister for Immigration and Border Protection (2019) 94 ALJR 140 at 145 [7]; 375 ALR 47 at 50. 16 Minister for Immigration and Border Protection v CED16 (2020) 94 ALJR 706 at 710-711 [21]; 380 ALR 216 at 222, quoting Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421 at 440 [28]. decision17 that the Authority itself considers might be relevant to the review18 in the sense that it might be capable directly or indirectly of rationally affecting assessment by the Authority of the probability of the existence of some fact about which the Authority might be required to make a finding in determining afresh whether or not to be satisfied that the criteria for the grant of a protection visa have been met19. Though review by the Authority is described in the "simplified outline" to Pt 7AA as "on the papers"20, the information contained in the review material which the Secretary provides to the Authority will have been shaped by the Code of Procedure in Subdiv AB of Div 3 of Pt 2. The Code of Procedure has the effect of preventing a visa applicant or interested person from communicating with the Minister in relation to an application for a protection visa other than in writing21. But that does not mean that other material in the Secretary's possession or control which might be considered by the Secretary to be relevant to the review will necessarily be in documentary form. The Code of Procedure empowers the Minister or a delegate, "if he or she wants to", to "get any information that he or she considers relevant" on the condition that, if he or she "gets such information", he or she "must have regard to that information in making the decision whether to grant or refuse the visa"22. The Minister or delegate is specifically empowered to invite the applicant to give additional information in any of three ways: "in writing", "at an interview between the applicant and an officer" or "by telephone"23. If the applicant is invited to give additional information at an interview, there is no need for the officer who conducts the interview to be the delegate who is going to decide whether to grant or refuse the visa. Nor is there any need for the interview to be conducted in person. 17 Section 473DC(1)(a) of the Migration Act. 18 Section 473DC(1)(b) of the Migration Act. 19 Minister for Immigration and Border Protection v CED16 (2020) 94 ALJR 706 at 711 [23]; 380 ALR 216 at 222. 20 Section 473BA of the Migration Act. 21 Section 52 of the Migration Act; reg 2.13 of the Migration Regulations 1994 (Cth). 22 Section 56(1) of the Migration Act. 23 Sections 56(2) and 58(1) of the Migration Act. Nor does any statutory provision govern the form in which the interview might be recorded or transcribed. Whatever the form in which any interview with a referred applicant conducted in accordance with the Code of Procedure might come to be recorded or transcribed, the record of the interview is material in the Secretary's possession or control which the Secretary could not but consider relevant to the review. The record can therefore be expected to form part of the review material which the Secretary will be obliged to give to the Authority and which the Authority will be obliged to examine for itself. However, the potential for a record of an interview conducted in accordance with the Code of Procedure to take a variety of forms creates potential for an informational gap to arise in the review material where an interview with the referred applicant has been conducted by the delegate in person and has been audio recorded but not video recorded. Provision of the audio recording as part of the review material will then not put the Authority in the position of having and being able to examine for itself the totality of the information available to the delegate and required by the Code of Procedure to be considered by the delegate when making the referred decision. Missing from the review material will be a visual impression of how the referred applicant appeared during the interview − his or her demeanour. An informational gap of that nature has potential to impact on the Authority's assessment of the credibility of the account given by the referred applicant during the audio recorded interview and in turn has potential to impact on the Authority's assessment of the referred applicant's overall credibility. "Impressions formed by a decision-maker from the demeanour of an interviewee may be an important aspect of the information available to the decision-maker."24 That has "long been recognised"25 and continues to be appreciated despite awareness on the part of sophisticated decision-makers that "an ounce of intrinsic 24 Minister for Immigration and Border Protection v WZARH (2015) 256 CLR 326 at 25 See Minister for Immigration and Border Protection v WZARH (2015) 256 CLR 326 at 338 [40], and the cases there cited. merit or demerit" measured by reference to objectively established facts and the apparent logic of events "is worth pounds of demeanour"26. The potential significance of demeanour is illustrated by the present case. Here, as will be seen, the Authority was troubled by a concern that the appellant's evidence in his audio recorded interview with the delegate was generally lacking detail and at times vague and hesitant. An interview was the obvious means by which the Authority might seek to resolve these matters of concern, given that the Authority was evidently not convinced by the country information alone to uphold the delegate's ultimate decision, however "plausible" the appellant's account of his personal circumstances might be. At an interview the Authority could seek answers in relation to those aspects of the appellant's evidence that troubled the Authority by raising questions which had not previously been raised with the appellant. The Authority could thus develop an informed impression of the credibility of the appellant based on his responses to such questions and an observation of his demeanour. The appellant's responses and the demeanour of the appellant inextricably associated with them would be new information relevant to his personal circumstances. There can be no doubt that the powers of the Authority to get and consider new information enable the Authority to bridge such an informational gap by inviting the referred applicant to a further interview to be conducted in person or by video link in order to assess and consider his or her demeanour for itself. The Authority's own visual impression of the referred applicant's appearance during such an interview would necessarily constitute new information within the power of the Authority to get because it would communicate knowledge of an evidentiary nature which would be open to be considered by the Authority to have the potential to bear on the Authority's assessment of the referred applicant's credibility27 and which was not before the Minister when the delegate made the referred decision28. The new information so got by the Authority would then meet the preconditions to its consideration by the Authority on the basis that it was not and could not have been before the Minister when the delegate made the referred 26 Fox v Percy (2003) 214 CLR 118 at 129 [30]-[31], quoting Société d'Avances Commerciales (Société Anonyme Egyptienne) v Merchants' Marine Insurance Co (The "Palitana") (1924) 20 Ll L Rep 140 at 152. 27 Section 473DC(1)(b) of the Migration Act. 28 Section 473DC(1)(a) of the Migration Act. decision29 and on the basis of the Authority's satisfaction that the existence of any informational gap is sufficiently aberrant within the scheme of de novo review for which Pt 7AA provides to make existence of the informational gap in the particular review alone enough to constitute "exceptional circumstances" justifying its consideration irrespective of how frequently such an informational gap might arise in practice30. Were some aspect of the referred applicant's appearance during the interview to end up being so glaringly undermining of the referred applicant's credibility as to lead the Authority to consider in advance of reasoning on the facts that the appearance of itself "would", as distinct from "might", be the reason or part of the reason for affirming the decision of the delegate31, the Authority would come under an obligation to explain that to the referred applicant and to invite the referred applicant to comment32. The Authority would be able to discharge that obligation by inviting the applicant to comment orally in the interview itself or subsequently in writing. But occasions when the need to take such a course might arise would be rare, as the circumstances of the present case again illustrate. The Authority was evidently inclined to reject the appellant's account of his experience of persecution because the Authority found the appellant's account vague and lacking in detail and to have been given in a hesitant fashion. An interview by the Authority would have enabled the Authority to get new information from the appellant by raising these issues with him. If the effect of this new information was that it simply failed to allay the tentative concerns that the Authority already entertained about the appellant's credibility, the obligation to invite further comment would not be engaged. The new information would not be the reason, or part of the reason, for affirming the fast track reviewable decision. The reason would remain the unallayed concerns of the Authority in relation to the appellant's account of his personal circumstances. The Authority being able to exercise its powers to get and consider new information to bridge an informational gap in the review material by inviting a 29 Section 473DD(b)(i) of the Migration Act. 30 Section 473DD(a) of the Migration Act. See Plaintiff M174/2016 v Minister for Immigration and Border Protection (2018) 264 CLR 217 at 229 [30]. 31 See Plaintiff M174/2016 v Minister for Immigration and Border Protection (2018) 264 CLR 217 at 223 [9], and the cases there cited. 32 Section 473DE of the Migration Act. referred applicant to an interview in order to gauge and consider his or her demeanour for itself, the question becomes as to when if at all compliance with the implied condition of reasonableness in the conduct of the review or in the consideration and exercise of those powers might compel the Authority to adopt that course. Contrary to the urging of the appellant, answering that question is not assisted by seeking to infuse the implied condition of reasonableness with notions of procedural fairness, separate implication of which is expressly excluded from the scheme of Pt 7AA33. The answer is to be found in recognising that "[t]he implied condition of reasonableness is not confined to why a statutory decision is made; it extends to how a statutory decision is made"34 such that "[j]ust as a power is exercised in an improper manner if it is, upon the material before the decision-maker, a decision to which no reasonable person could come, so it is exercised in an improper manner if the decision-maker makes his or her decision in a manner so devoid of plausible justification that no reasonable person could have taken that course"35. the Compliance with implied condition of reasonableness in the performance by the Authority of its duty to review the decision of the delegate necessitates not only that the decision to which the Authority comes on the review has an "intelligible justification"36 but also that the Authority comes to that decision through an intelligible decision-making process37. Thus, as has been recognised, there can be circumstances in which the Authority can transgress the bounds of reasonableness by treating particular information as the reason or part of the reason for the decision to which it comes without first exercising its powers 33 Section 473DA(1) of the Migration Act. See BVD17 v Minister for Immigration and Border Protection (2019) 93 ALJR 1091 at 1099 [34]; 373 ALR 196 at 204-205. 34 Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at 371 [91]. 35 Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 290, citing Prasad v Minister for Immigration and Ethnic Affairs (1985) 6 FCR 155 at 169-170. cf Minister for Immigration and Citizenship v SZIAI (2009) 83 ALJR 1123 at 1128-1129 [20]-[25]; 259 ALR 429 at 434-436. 36 Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at 367 [76]. 37 Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at 375 [105], quoting Dunsmuir v New Brunswick [2008] 1 SCR 190 at 220-221 [47]. to get and if appropriate to consider, as new information, further information capable of being provided by the referred applicant38. Answering the question therefore requires an examination of the decision-making pathways reasonably open to the Authority in reviewing the decision of a delegate to determine for itself whether the criteria for the grant of a protection visa have been met where the review material that it is obliged to consider in making that determination leaves out information that was available to and required to be considered by the delegate. The mere existence of an informational gap will not necessarily result in the Authority being "disadvantaged in comparison with the delegate"39. That is because, having regard to country information and other information contained in the review material, the credibility of the referred applicant will not necessarily have a significant bearing on the Authority's determination of whether the criteria for the grant of a protection visa have been met. That is also because, having regard to country information and other information contained in the review material, how the referred applicant may have presented in the interview with the delegate will not necessarily have a significant bearing on such assessment of his or her credibility as the Authority might reasonably undertake. To the extent that the credibility of the referred applicant might bear on whether the Authority is to be satisfied that the criteria for the grant of a protection visa have been met and to the extent that his or her appearance in an interview with the delegate might bear on his or her credibility, it would ordinarily be open to the Authority to form its own assessment of credibility taking into account such second-hand description or impression of his or her appearance as might be conveyed expressly or by implication in the statement forming part of the review material which sets out the delegate's findings of fact and refers to the evidence on which those findings were based. Taking into account any such description or impression of the referred applicant's appearance, it would ordinarily then be open to the Authority to reach an assessment of the referred applicant's credibility 38 Plaintiff M174/2016 v Minister for Immigration and Border Protection (2018) 264 CLR 217 at 236 [49], 249 [97]. 39 FND17 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2019] FCA 1369 at [39]. without any need for the Authority's assessment of credibility to coincide with the delegate's assessment of credibility. The Minister is therefore correct to say that the Authority is not required to interview a referred applicant merely because credibility is in issue or merely because the Authority comes to a different view as to credibility than did the delegate40. However, the Authority will act unreasonably if, without good reason, it does not invite a referred applicant to an interview in order to gauge his or her demeanour for itself before it decides to reject an account given by the referred applicant in an audio recorded interview which the delegate accepted in making the referred decision wholly or substantially on the basis of its own assessment of the manner in which that account was given. That is what happened in this case. The principles applied The procedural history is comprehensively recounted in the reasons for judgment of Nettle J and need not be repeated. The gist of what happened is that the Authority listened to an audio recording of an interview which the delegate who made the referred decision conducted in person with the appellant. Finding the appellant's evidence in the interview "to be generally lacking in detail", the appellant "appear[ing] unable to expand in any detail on a number of his written claims and at times sound[ing] vague and hesitant", the Authority rejected a central part of the account given by the appellant in the interview which the delegate had accepted as plausible and generally consistent with country information. In particular, the Authority rejected the appellant's account of having been detained and beaten and sexually tortured by the Sri Lankan Army on suspicion of having been an LTTE supporter to find that there was "no credible information" before it indicating that he was of any interest to Sri Lankan authorities and that it was not satisfied that he had a "profile" that would be of interest to those authorities at the time of its decision or in the foreseeable future. The Authority did not suggest that anything else in the review material rendered the appellant's account of having been detained and beaten and sexually tortured inherently improbable. To the contrary, the Authority noted that there was "ample country information" confirming "sexual based torture of Tamils who are 40 cf DGZ16 v Minister for Immigration and Border Protection (2018) 258 FCR 551 suspected of LTTE or pro-separatist sympathies". The Authority was rather led to reject the appellant's account of the incident, "despite sympathetic questioning by the delegate" and despite its acknowledgement of cultural barriers to the appellant (as a young Tamil male) discussing sexual matters, having regard to the appellant's statement to the delegate (who was female) in the presence of his representative (who was also female) that he was "unable to talk about it", having regard to him being "unable to provide any details of what happened to him other than saying there were 2 or 3 [Sri Lankan Army] men and that he was unconscious for a lot of the time", and having regard to the reasons he gave in the interview for not seeking medical treatment being "unconvincing". Had the Authority acted reasonably in performing its duty to review the decision of the delegate cognisant of its informational disadvantage in assessing the credibility of the appellant when compared with the delegate, the Authority would not have rejected the appellant's account of having been detained and beaten and sexually tortured on the basis of how he sounded on the audio recording without inviting him to a further interview so as to see him as well as hear him. By failing to invite the appellant to a further interview, the Authority transgressed the reasonableness condition implied into both the imposition of its duty to conduct a review and the conferral of its powers to get and consider new information in conducting a review. To be clear, the breach of the reasonableness condition by the Authority lay not in evaluating the review material for itself to arrive at a different assessment of credibility than did the delegate, but in failing in the circumstances to use the powers at its disposal to get and consider new information in order to supplement the review material so as to place itself in as good a position to assess credibility as had been the delegate. And notwithstanding the repetition, it seems necessary in light of alternative views now expressed in this Court to spell out that the failure of the review material to place the Authority in as good a position to assess credibility as had been the delegate arose not from some latent defect in the legislative scheme of Pt 7AA rendering it incapable of fulfilling its legislative purpose and resulting in a cataclysmic breakdown in the capacity of the Authority to rise to the legislative exhortation of "providing a mechanism of limited review that is efficient [and] quick"41. The failure arose from an administrative practice within the Department. In particular, the failure arose from the circumstance that the delegate rather than some other officer interviewed the appellant combined with the circumstance that the interview was audio recorded but not video recorded. To the extent that the 41 Sections 473BA and 473FA of the Migration Act. circumstances of this case throw up a systemic problem, the problem has arisen administratively and can readily be remedied administratively. The judgment under appeal mistook the process of reasoning adopted by the Authority in concluding that country information provided an alternative basis for its lack of satisfaction that the appellant would face a serious risk of harm if he returned to Sri Lanka. The Authority's statement of reasons for its decision made clear that its conclusion was not solely dependent on country information. The conclusion was expressed to be based in part on the appellant's "personal circumstances", which included the Authority's lack of satisfaction that he had a profile that would be of interest to Sri Lankan authorities. Disposition Performance by the Authority of its duty to review the decision of the delegate miscarried by reason of noncompliance with the implied condition of reasonableness. Performance of that duty is therefore appropriate to be compelled by mandamus directed to the Authority. As ancillary to mandamus, the purported legal effect of the decision in fact made by the Authority to affirm the decision of the delegate is appropriate to be quashed by certiorari. The appeal is therefore to be allowed. The judgment under appeal is to be set aside. In its place, the appeal from the judgment of the primary judge is to be allowed, the orders made by the primary judge are to be set aside, writs of certiorari and mandamus are to be issued to the Authority, and the Minister is to be ordered to pay the costs of the application for judicial review. The Minister is to pay the appellant's costs of the appeals to the Federal Court and this Court. Nettle NETTLE J. This is an appeal from a judgment of the Federal Court of Australia (Bromberg J)42 dismissing an appeal from a judgment of the Federal Circuit Court of Australia (Judge Smith)43, in turn dismissing the appellant's application for judicial review of the decision of the Immigration Assessment Authority ("the IAA") to affirm a decision of the delegate of the respondent Minister not to grant the appellant a protection visa. The issue presented by the appeal is whether the IAA acted with legal unreasonableness by departing from the delegate's assessment of the appellant's credibility, and thus the delegate's assessment of the plausibility of the appellant's claims. For the reasons which follow, it was legally unreasonable for the IAA to depart from the delegate's assessment of the plausibility of the appellant's claims, and the appeal should be allowed. The facts The appellant is a citizen of Sri Lanka of Tamil ethnicity who, on 27 August 2012, arrived in Australia by boat at an excised offshore place without a visa, and consequently as an "unauthorised maritime arrival" within the meaning of s 5AA of the Migration Act 1958 (Cth) ("the Act"). On 5 August 2013, the appellant lodged an application for a temporary protection visa, which was invalid, but, on 23 October 2015, he lodged a further, valid application for a temporary protection visa in which he made the following claims: In May 2009, whilst travelling to an internally displaced persons camp, members of the Sri Lankan Army ("SLA") detained the appellant's brother on suspicion of being a member of the Liberation Tigers of Tamil Eelam ("LTTE"). Shortly after the family's release from the displaced persons camp, SLA officers attended the appellant's home to question him about his travel history and involvement with the LTTE. A day later, the appellant received a letter requesting his attendance at an army camp where, upon his attendance, SLA officers interrogated him and severely beat him when he denied involvement with the LTTE. He was released later that day. 42 ABT17 v Minister for Immigration and Border Protection [2019] FCA 613. 43 ABT17 v Minister for Immigration and Border Protection [2018] FCCA 658. Nettle Subsequently, and over a period of a number of years, SLA officers repeatedly detained the appellant and accused him of being an LTTE member. They also beat him on these occasions. In around May 2011, an SLA officer attended the appellant's home to request the appellant's attendance at the army camp. The appellant was asleep. His sister indicated to the officer that the appellant was not at home. The officer assaulted his sister and the appellant was woken by the noise and physically defended her. The following morning, a group of men detained the appellant for six days, during which time he was again beaten. The group of men indicated to the appellant that this was revenge for his defence of his sister. The appellant's brother achieved the appellant's release by paying a bribe. In April 2012, the appellant was called again to attend at the army camp. He tried to escape but was recaptured and beaten severely. Shortly after the appellant's arrival in Australia, SLA officers attended the appellant's home in Sri Lanka to inquire of his family as to the appellant's whereabouts. The delegate's decision On 21 September 2016, the Minister's delegate decided to refuse to grant the appellant a temporary protection visa. During the appellant's interview with the delegate ("the TPV interview"), the appellant, at the delegate's request, removed his shirt and showed the delegate scarring on his back which he said was inflicted by SLA officers. The appellant also disclosed to the delegate that he had been sexually tortured during the incident in which he was detained by the SLA for six days in May 2011, in addition to being locked up, deprived of food and beaten. The delegate found that the appellant's evidence during the TPV interview, including that the appellant had been subjected to sexual torture during the 2011 incident, was plausible and broadly consistent with country information pertaining to the events which the appellant described. But based on country information pertaining to the improvement in circumstances relating to Tamils in Sri Lanka since the appellant's departure from that country, the delegate was not satisfied that there was any longer a real chance that the appellant would face serious or significant harm upon his return there, and, on that basis, found that the appellant could not be said to have a well-founded fear of being persecuted by the Sri Lankan authorities by reason of his Tamil ethnicity, his membership of particular social groups (broadly defined as "Tamils from the North" and "young Tamil males from Northern Sri Lanka"), or his status as a failed asylum seeker and a person who had illegally departed Sri Lanka. Nettle The IAA's decision The delegate's decision was referred to the IAA for review as a "fast track reviewable decision", pursuant to s 473CA of the Act. The IAA accepted some of the appellant's claims but found that others were exaggerated and embellished in order to enhance the appellant's "profile" as someone who would be of interest to the SLA or the Sri Lankan authorities. The IAA accepted that the appellant had "experienced regular, low-level harassment from members of the SLA on a day- to-day basis", and that, as a young male returnee from a displaced persons camp, he may have been viewed with a certain amount of suspicion by the SLA. But the IAA did not accept that the appellant was questioned and beaten in late 2009, or that he was targeted and beaten every three to four months by the SLA with a view to making him confess that he was in the LTTE. The IAA accepted that the appellant's brother had been detained for over two years on suspicion of being with the LTTE, but the IAA found it implausible that the appellant was not questioned about his brother during the time that the appellant was detained. The IAA was also not satisfied that the appellant was detained and sexually tortured in May 2011: first, because the appellant's family had not taken immediate steps to have the appellant released (as it was said they had done on other occasions); and secondly, because of the manner in which the appellant gave evidence at the TPV interview about his claim of sexual torture. In particular, from listening to an oral recording of the TPV interview, the IAA found that the appellant's evidence before the delegate was lacking in detail, the appellant appeared unable to expand in any detail on a number of his claims, and, at times, the appellant sounded vague and hesitant. The IAA also rejected the appellant's claim that he was detained and beaten in April 2012 and asked to sign a document admitting his LTTE involvement, because, the IAA said, the appellant's evidence about that claim had varied between his written claims and the evidence he gave in the TPV interview. It followed from those findings, the IAA stated, that: "As I have not accepted that [the April 2012 incident] occurred and there is no credible information before me that indicates that the [appellant] is of any interest to the authorities, I do not find it plausible that members of the SLA would go to his family home and ask after his whereabouts after he arrived in Australia or that his family was told to report to the authorities when he returned. In summary, I am not satisfied that the [appellant] has a profile that would be of interest to the SLA or the Sri Lankan authorities or that he is at risk of harm on the basis of his ethnicity or imputed support for the LTTE now or in the reasonably foreseeable future." (emphasis added) Nettle The IAA then turned to country information that the IAA found demonstrated a considerable improvement in circumstances in Sri Lanka since the appellant's departure. The IAA reasoned that: "The 2012 Guidelines issued by the United Nations High Commissioner for Refugees (UNHCR) state that certain real or perceived links with the LTTE continue to expose individuals to treatment which may give rise to a need for protection. However, there is nothing to support a finding that all Tamils are imputed with LTTE affiliation or membership. The Guidelines also indicate that even those Tamils who lived within LTTE-controlled areas and had contact with that organisation and its civilian administration in their daily lives are not, without more, in need of protection. The [appellant's] evidence is that neither he nor any member of his family was a member of the LTTE or supported the LTTE. While his brother L was detained for two years at the end of the war on suspicion of LTTE involvement, the [appellant] was not questioned in any detail about L or his suspected LTTE affiliations or involvement. While I accept that the [appellant] has experienced some incidents of monitoring and harassment and that LTTE support may have been imputed to him on the basis of ethnicity, I am not satisfied on the evidence before me that the [appellant] has a profile which would bring him to the attention of the Sri Lankan authorities either because he would be perceived as an LTTE supporter on the basis of his ethnicity, the fact that he originates from the north of Sri Lanka or his brother's detention on suspicion of LTTE involvement. Taking into consideration the number of years that have elapsed since he left, his personal circumstances and the country information referred to, I am not satisfied that the [appellant] would face a real chance of serious harm on return to Sri Lanka, now or in the reasonably foreseeable future on the basis of his Tamil ethnicity or imputed political opinion." (emphasis added; footnotes omitted) The IAA affirmed the delegate's decision. The Federal Circuit Court proceedings Before the Federal Circuit Court, the appellant's counsel put the appellant's claim for judicial review of the IAA's decision on several grounds, all of which were rejected. For present purposes, however, it is necessary to mention only one ground that the appellant sought but was refused leave to rely upon. It was that, given the delegate had found the appellant's evidence to be plausible, the IAA could not reasonably have concluded that the appellant's evidence was lacking in Nettle detail or that the appellant appeared unable to expand in any detail on a number of his claims and at times sounded vague and hesitant. Judge Smith refused the appellant leave to advance that ground because the appellant's counsel accepted that he would need to adduce evidence of the TPV interview in order to sustain it, and Judge Smith did not consider it appropriate to grant the appellant an adjournment in order to obtain that evidence. In refusing the application for adjournment, Judge Smith stated44: "The ground has little prospect of success because the [appellant] is unable to establish that there was no basis upon which the [IAA] could reasonably have made its findings about the manner in which the [appellant] gave evidence at the interview before the delegate and upon which it based, to some extent, its conclusions about the extent of the truthfulness of his claims." Proceedings before the Federal Court Before the Federal Court, the appellant appeared unrepresented and argued that Judge Smith had erred in rejecting the appellant's contention that the IAA acted unreasonably in finding that the appellant's evidence was lacking in detail and that the appellant appeared unable to expand in any detail on a number of his claims and at times sounded vague and hesitant. The appellant contended that Judge Smith's conclusions were the result of an incorrect application of the principles of reasonableness. Bromberg J found no error in Judge Smith's rejection of the appellant's contention in the form in which it was advanced in the Federal Circuit Court. But at the suggestion of the Minister (acting as a model litigant), his Honour treated the contention as one that the fact of the IAA reaching different credibility findings from those reached by the delegate without first considering whether to exercise the IAA's power to obtain further information under s 473DC of the Act established legal unreasonableness. As his Honour observed45, that form of contention derived support from the then recent decision of the Full Court of the Federal Court in DPI17 v Minister for Home Affairs46 (which the Minister, acting once again as a model litigant, had drawn to his Honour's attention). 44 ABT17 v Minister for Immigration and Border Protection [2018] FCCA 658 at [35]. 45 ABT17 v Minister for Immigration and Border Protection [2019] FCA 613 at [17]. (2019) 269 FCR 134. Nettle Bromberg J accepted47 that "the IAA must have been aware that ... the delegate had the opportunity [in interview] to observe the appellant's demeanour", as opposed merely to "listen[ing] to a tape of the interview (as it appears the IAA did)", and thus "to see and evaluate the physical manifestations which must have accompanied the evidence given by the appellant". His Honour reasoned48 that: "In those circumstances, it may well be thought that a reasonable decision- maker would not have made credibility findings contrary to those made by the delegate without considering whether or not the powers given to the IAA under s 473DC should be exercised, including for the purpose of inviting the appellant to attend for an interview so that the IAA could conduct its own assessment of the appellant's demeanour." Ultimately, however, Bromberg J took the view49 that he need not arrive at a conclusion "as to whether or not there [was] a sufficient parallel between the facts of this case and the facts of DPI17". His Honour posited50 that "in order for jurisdictional error to be established, [he] would need to be satisfied that the IAA failed to consider exercising the s 473DC discretion" and that "any such failure was material to the IAA's decision". And as it appeared to his Honour, any such failure was not material because "[b]oth the delegate and the IAA relied on country information dealing with ... changed circumstances since the appellant left Sri Lanka relating to the treatment of Tamils and persons suspected of having had a prior involvement with the LTTE"51 as "an alternative basis for the decision made which was not reliant on whether the appellant's claims to have been beaten and sexually tortured were or were not accepted"52. As his Honour expressed his conclusion53: "Even if the IAA had exercised affirmatively the s 473DC discretion and had arrived at the same view as that arrived at by the delegate in relation to the claims of sexual torture and other physical abuse, in the face of the 47 ABT17 v Minister for Immigration and Border Protection [2019] FCA 613 at [24]. 48 ABT17 v Minister for Immigration and Border Protection [2019] FCA 613 at [24]. 49 ABT17 v Minister for Immigration and Border Protection [2019] FCA 613 at [25]. 50 ABT17 v Minister for Immigration and Border Protection [2019] FCA 613 at [25]. 51 ABT17 v Minister for Immigration and Border Protection [2019] FCA 613 at [26]. 52 ABT17 v Minister for Immigration and Border Protection [2019] FCA 613 at [27]. 53 ABT17 v Minister for Immigration and Border Protection [2019] FCA 613 at [27]. Nettle alternative basis for the application's rejection, the appellant has failed to demonstrate that there was a realistic possibility of the outcome being different." Accordingly, the appeal was dismissed. The appellant's contentions Before this Court, counsel for the appellant contended that a review authority such as the IAA, "acting with due appreciation of its responsibilities"54 and with knowledge that it had power under s 473DC(3) to interview the appellant and thereby observe his demeanour and the scarring the appellant had shown to the delegate, could not reasonably have concluded that the review was able fairly to be completed "on the papers". It followed, it was submitted, that the IAA's failure to exercise its power under s 473DC to interview the appellant was legally unreasonable. Further, it was contended, it was not incumbent on the appellant to demonstrate that the legal unreasonableness of the IAA's failure to interview the appellant was "material". For contrary to Bromberg J's reasoning, it was submitted, although materiality might be regarded as a free-standing consideration in a case of jurisdictional error comprised of a lack of procedural fairness (either as an essential element of the existence of jurisdictional error55 or as a basis to refuse relief in the exercise of discretion where it is apparent that a jurisdictional error could not have made any difference to the outcome56), in the case of jurisdictional error constituted of legal unreasonableness "materiality is bound up in the characterisation of an exercise of power as legally unreasonable" and requires no 54 Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541 at 570 [69] per Gageler J, citing Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at 365 [71] per Hayne, Kiefel and Bell JJ, in turn quoting Secretary of State for Education and Science v Tameside Metropolitan Borough Council [1977] AC 1014 at 1064 per Lord Diplock. 55 See, eg, Hossain v Minister for Immigration and Border Protection (2018) 264 CLR 123 at 134-135 [30]-[31] per Kiefel CJ, Gageler and Keane JJ; Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421 at 445 [45] per Bell, Gageler and Keane JJ. 56 See, eg, Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at 89 [5] per Gleeson CJ, 106-107 [51]-[53] per Gaudron and Gummow JJ; Hossain v Minister for Immigration and Border Protection (2018) 264 CLR 123 at 137 [40] per Nettle J; Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421 at 457-458 [85]-[89], 459-460 [93]-[94] per Nettle and Gordon JJ. Nettle separate consideration57. Further and in any event, it was contended, in this matter the legal unreasonableness of the IAA's failure to exercise its power of interview under s 473DC was material because it is apparent that the IAA's analysis of the effect of country information relating to the change in circumstances in Sri Lanka since the appellant's departure was not an independent, alternative basis for the decision but rather was dependent on, or at least to a significant extent informed by, the IAA's earlier rejection of the appellant's claim to have been detained, beaten and sexually tortured, and the IAA's consequent finding that the appellant did not have "a profile which would bring him to the attention of the Sri Lankan authorities either because he would be perceived as an LTTE supporter on the basis of his ethnicity, [or because of] the fact that he originates from the north of Sri Lanka or his brother's detention on suspicion of LTTE involvement". The Minister's contentions The Minister contended to the contrary that nothing in the delegate's reasons supported an inference that the delegate's acceptance of the appellant's claims as "plausible" depended "to any significant extent" on the appellant's demeanour. In particular, it was submitted, although it is apparent from the delegate's reasons that the delegate accepted that the appellant's evidence at interview was "plausible" and was "also broadly consistent with country information", the delegate did not make any specific finding as to the claimed sexual torture in 2011 let alone find that she accepted that claim because of the appellant's demeanour. The Minister emphasised that the IAA gave multiple reasons for rejecting the appellant's claims in relation to the alleged May 2011 detention. They were, first, on the appellant's evidence, although he had lived in an LTTE-controlled area, he had had no direct dealing with the LTTE, he had not supported the LTTE and no other member of his family, his friends or his neighbours had supported the LTTE. According to the IAA, it followed that it was improbable that the SLA would have targeted the appellant or that he would have been beaten every three to four months as he claimed. Secondly, even if there were an incident in May 2011, it was improbable that the appellant was then subjected to sexual torture, because, given the appellant's family's willingness to take action to secure the release of the appellant's brother, it was implausible that the family would not have taken action (such as instituting court proceedings or complaining to police) to secure the appellant's release from sexual torture. Thirdly, although the IAA accepted that it might be difficult for the appellant to talk about traumatic events, in the IAA's assessment it was notable that the appellant was unable to provide any details of his supposed sexual torture other than to say that there were two or three 57 Relying on the reasoning of Mortimer J in dissent in DPI17 v Minister for Home Affairs (2019) 269 FCR 134 at 163 [107], citing Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541 at 564-566 [53]-[56] per Gageler J, 572-573 [80] per Nettle and Gordon JJ, 583 [131] per Edelman J. Nettle men and that he was unconscious for a lot of the time. Fourthly, according to the IAA it was significant that the claim of sexual torture was not made until late in the TPV interview, after the appellant had first claimed in the TPV interview that he had been tortured without mentioning anything about sexual torture. It followed, the Minister contended, that it was not unreasonable for the IAA to make credibility findings that differed from those made by the delegate. And in the Minister's submission, that conclusion was supported by several features of the statutory scheme of Pt 7AA of the Act, including the "primary obligation"58 of the IAA to conduct its review on the papers except in limited circumstances; the fact that the IAA conducts a "de novo" review59, which was said to indicate that the prospect of the IAA taking a different view from that taken by the delegate concerning the credibility of particular claims "is an obvious and ordinary aspect of the scheme, it being inherent in de novo review"; that, perforce of s 473DD, the IAA may only consider new information in "exceptional circumstances"; and the fact that, because the express provisions in Div 3 of Pt 7AA, read together with ss 473GA and 473GB, are an "exhaustive statement" of the natural justice hearing rule60, procedural fairness is not the "lens" through which the content of procedural obligations imposed on the IAA is to be determined61. In any event, the Minister contended, the IAA had no power under s 473DC to invite the appellant to interview for the purpose of assessing the appellant's demeanour, because an interview under s 473DC may be undertaken only for the the "exceptional information" purpose of obtaining "new circumstances" threshold of s 473DD, and, in the Minister's submission, a witness's demeanour is not "new information", because it is not "information" in that meets 58 Referring to BVD17 v Minister for Immigration and Border Protection (2019) 93 ALJR 1091 at 1096 [14] per Kiefel CJ, Bell, Gageler, Keane, Nettle and Gordon JJ; 373 ALR 196 at 200. 59 Referring to Plaintiff M174/2016 v Minister for Immigration and Border Protection (2018) 264 CLR 217 at 226 [17] per Gageler, Keane and Nettle JJ. 60 Migration Act 1958 (Cth), s 473DA. 61 Referring to BVD17 v Minister for Immigration and Border Protection (2019) 93 ALJR 1091 at 1099 [34] per Kiefel CJ, Bell, Gageler, Keane, Nettle and Gordon JJ; 373 ALR 196 at 204-205. Nettle the sense of "knowledge about some particular fact, subject or event"62; or, if it is that, because the "information" (the appellant's demeanour) was before and considered by the delegate; or, in any event, because there were not "exceptional circumstances" sufficient to engage the power. Alternatively, the Minister contended that Bromberg J was correct in holding that any failure on the part of the IAA to exercise such power as it may have had to interview the appellant was immaterial, and therefore not legally unreasonable, because the IAA decided the matter on the separate and independent basis of the country information regarding the change in circumstances from which it concluded that the appellant is no longer at risk. The standard of review under Pt 7AA In some circumstances, it is convenient to distinguish between standards of review by reference to classes or categories of appeal, such as "appeal by way of rehearing" or "hearing de novo"63. Thus, as the plurality observed64 in Plaintiff M174/2016 v Minister for Immigration and Border Protection, although, under the scheme provided by Pt 7AA of the Act, the IAA lacks the ability to substitute its own decision for the decision of the Minister or the Minister's delegate65, the IAA is "not concerned with the correction of error on the part of the Minister or delegate but is engaged in a de novo consideration of the merits of the decision that has been referred to it". That was an accurate description of the process in that context inasmuch as the IAA is not constrained by a need to find demonstrable error in the decision the subject of review. But classifications such as "hearing de novo" are sometimes better understood as descriptive phrases than as categories defined by "immutable characteristics or inflexible boundaries"66. Invariably, the true 62 Referring to Plaintiff M174/2016 v Minister for Immigration and Border Protection (2018) 264 CLR 217 at 228 [24] per Gageler, Keane and Nettle JJ, as to the meaning of "information" in this context. 63 See, eg, CDJ v VAJ (1998) 197 CLR 172 at 201-202 [111] per McHugh, Gummow and Callinan JJ; Allesch v Maunz (2000) 203 CLR 172 at 180-181 [23] per Gaudron, McHugh, Gummow and Hayne JJ; Fox v Percy (2003) 214 CLR 118 at 124-125 [20] per Gleeson CJ, Gummow and Kirby JJ; Lacey v Attorney-General (Qld) (2011) 242 CLR 573 at 596-597 [57] per French CJ, Gummow, Hayne, Crennan, (2018) 264 CLR 217 at 226 [17] per Gageler, Keane and Nettle JJ. 65 Migration Act 1958 (Cth), s 473CC(2). 66 Traut v Faustmann Bros Pty Ltd (1983) 48 ALR 313 at 322 per Lockhart J. Nettle character of any administrative review, like the true character of an appeal from a judicial decision, is a question of statutory intent67 to be determined by reference to the jurisdiction, powers, composition and functions of the body from whose decision the review lies, as well as the powers and functions of the body in which the power of review is reposed. Hence, as will be explained, for the purposes of assessing whether it was legally unreasonable for the IAA to depart from credibility findings made by the Minister's delegate pursuant to Subdivs AB and AC of Div 3 of Pt 2 of the Act, the task of the IAA is more closely analogous to an appeal by way of rehearing. The nature of the delegate's task Although the delegate is not a judge, the process of delegate decision- making provided for under Subdivs AB and AC of Div 3 of Pt 2 of the Act is, in relevant respects, analogous to the process of judicial decision-making undertaken by a judge sitting alone. In particular, under s 54 of the Act, the delegate must have regard to all of the information submitted by an applicant in his or her application; under s 56, the delegate may invite the applicant to provide further information orally; under s 57, the delegate must disclose all relevant information to the applicant, explain why it is relevant and invite comment; and, under s 66, the delegate must provide written reasons for decision which, in the case of a fast track reviewable decision, must set out the delegate's findings of fact, refer to the evidence on which the findings are based and give reasons for decision68. Evidently, it is the legislative intent of the scheme that an applicant have the fullest opportunity to put his or her case in support of an application for a visa and that the delegate thoroughly consider the case as put, with the opportunity to interview the applicant, if the delegate considers it to be desirable to do so, and so derive the advantage of seeing and hearing the applicant explain the applicant's claims. 67 See, eg, Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (1976) 135 CLR 616 at 621-622 per Mason J (Barwick CJ and Stephen J agreeing), 630 per Murphy J; Re Coldham; Ex parte Brideson [No 2] (1990) 170 CLR 267 at 273-274 per Deane, Gaudron and McHugh JJ; Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at 202-203 [11] per Gleeson CJ, Gaudron and Hayne JJ; Lacey v Attorney-General (Qld) (2011) 242 CLR 573 at 596-597 [57] per French CJ, Gummow, Hayne, Crennan, Kiefel and 68 Such reasons for decision must, in turn, be provided to the IAA in respect of each fast track reviewable decision referred under Pt 7AA: see Migration Act 1958 (Cth), s 473CB(1)(a)(iii). Nettle The nature of the IAA's task Likewise, although the IAA is not a court of appeal, the process of fast track review under Pt 7AA of the Act is, in relevant respects, analogous to a process of appeal by way of rehearing from the judgment of a judge sitting alone69. Upon referral of a fast track reviewable decision to the IAA, s 473CB requires the Secretary of the Department of Immigration and Border Protection to give to the IAA "review material" comprised of any material in the Secretary's possession or control considered by the Secretary to be relevant to the review. That includes all the material that was before the delegate and a statement that sets out the findings of fact made by the delegate, refers to the evidence on which those findings were based, and gives reasons for the decision70. The primary obligation of the IAA under s 473CA is to review the fast track reviewable decision by considering the review material "without accepting or requesting new information" and thus, ordinarily, without interviewing the applicant71, and to make its own decision as to whether to affirm the decision on review or to remit the matter for reconsideration in accordance with such directions as the IAA is permitted to issue72. That procedure is, however, subject to other provisions of Pt 7AA, which are to be exercised within the bounds of reasonableness73, such as s 473DC(1), which confers a discretion on the IAA to get "new information" (being documents or information that were not before the delegate that the IAA considers may be relevant), and s 473DC(3), which confers a discretion on the IAA to invite any person to provide new information in writing or in an interview. 69 As to the scheme of Pt 7AA see BVD17 v Minister for Immigration and Border Protection (2019) 93 ALJR 1091 at 1094-1096 [3]-[17] per Kiefel CJ, Bell, Gageler, Keane, Nettle and Gordon JJ; 373 ALR 196 at 198-201. See also Lacey v Attorney-General (Qld) (2011) 242 CLR 573 at 597 [57] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ. 70 Plaintiff M174/2016 v Minister for Immigration and Border Protection (2018) 264 CLR 217 at 225-226 [15] per Gageler, Keane and Nettle JJ. 71 Migration Act 1958 (Cth), s 473DB(1); Plaintiff M174/2016 v Minister for Immigration and Border Protection (2018) 264 CLR 217 at 245 [88] per Gordon J. 72 Migration Act 1958 (Cth), s 473CC(2). 73 As that concept is explained in Minister for Immigration and Citizenship v Li (2013) 249 CLR 332: see Plaintiff M174/2016 v Minister for Immigration and Border Protection (2018) 264 CLR 217 at 227 [21] per Gageler, Keane and Nettle JJ, 245 Nettle The significance of a delegate's assessment of demeanour Ordinarily, in an appeal by way of rehearing from the judgment of a judge alone, a court of appeal has before it, in the form of the record, all the material that was before the judge and the judge's reasons for judgment and determines the appeal on that basis without receiving further evidence. The court of appeal does not, however, have the opportunity of seeing and hearing witnesses give their evidence, or thus the opportunity of making a fully informed assessment of the witnesses' demeanour. Accordingly, the established74 position in relation to an appeal by way of rehearing from the judgment of a judge alone is that, where the judge's decision is affected by his or her impression of the credibility of a witness whom the judge has seen and heard give evidence, the court of appeal must respect the attendant advantages of the judge in assessing the witness's credibility. Of course, if, making proper allowance for those advantages, the court of appeal concludes that error is shown, it is incumbent on the court of appeal to proceed accordingly75. That may be so where the judge's findings, despite being based or said to be based upon an assessment of credibility, are contrary to "incontrovertible facts or uncontested testimony"76, "glaringly improbable"77, or "contrary to compelling inferences"78. But where no such error is apparent, it is not a justification for the court of appeal to depart from the judge's assessment of the 74 See, eg, Edwards v Noble (1971) 125 CLR 296 at 308-309 per Menzies J; Jones v Hyde (1989) 63 ALJR 349 at 351-352 per McHugh J (Brennan, Deane, Dawson and Toohey JJ agreeing); 85 ALR 23 at 27-28; Abalos v Australian Postal Commission (1990) 171 CLR 167 at 179 per McHugh J (Mason CJ, Deane, Dawson and Gaudron JJ agreeing); Devries v Australian National Railways Commission (1993) 177 CLR 472 at 479 per Brennan, Gaudron and McHugh JJ, 482-483 per Deane and Dawson JJ; Fox v Percy (2003) 214 CLR 118 at 127 [26], 128 [29] per Gleeson CJ, Gummow and Kirby JJ, 138-147 [65]-[93] per McHugh J; Robinson Helicopter Co Inc v McDermott (2016) 90 ALJR 679 at 686-687 [43] per French CJ, Bell, Keane, Nettle and Gordon JJ; 331 ALR 550 at 558-559; Lee v Lee (2019) 266 CLR 129 at 148-149 [55]-[56] per Bell, Gageler, Nettle and Edelman JJ; Queensland v Masson (2020) 94 ALJR 785 at 812 [119] per Nettle and Gordon JJ; 381 ALR 560 at 594. 75 Warren v Coombes (1979) 142 CLR 531 at 551 per Gibbs A-CJ, Jacobs and 76 Fox v Percy (2003) 214 CLR 118 at 128 [28] per Gleeson CJ, Gummow and 77 Brunskill v Sovereign Marine & General Insurance Co Ltd (1985) 59 ALJR 842 at 844 per Gibbs CJ, Wilson, Brennan, Deane and Dawson JJ; 62 ALR 53 at 57. 78 Chambers v Jobling (1986) 7 NSWLR 1 at 10 per Kirby P, 20 per Samuels JA. Nettle credibility of the witness that the court of appeal may consider that the judge did not give sufficient weight to matters that the court of appeal is of opinion bear upon the assessment79. In those circumstances, it would be impermissible for the court of appeal to depart from the judge's assessment. Parity of reasoning mandates that similar considerations apply to the IAA's conduct of a fast track review. As has been seen, the evident intent of Pt 7AA is that the IAA should be provided with all the material that was before the delegate and the delegate's reasons for decision, and that the IAA should review the delegate's decision on the basis of that material without interviewing the applicant, and so without the opportunity of making a fully informed assessment of the applicant's demeanour. Accordingly, where a delegate's reasons for decision show that the delegate's assessment of an applicant's credibility is informed by the delegate's assessment of the applicant's demeanour in the course of interview, the IAA should respect the attendant advantages of the delegate. If, making proper allowance for those advantages, the IAA concludes that the delegate's findings are contrary to incontrovertible facts or uncontested testimony, or glaringly improbable, or contrary to compelling inferences, or otherwise erroneous, the IAA should proceed accordingly. But the IAA should not regard it as demonstrative of error, or, therefore, sufficient justification to depart from the delegate's assessment of an applicant's credibility, that the IAA may be of opinion that the delegate did not give sufficient weight to matters that the IAA regards as bearing upon the assessment. In those circumstances, it would be legally unreasonable for the IAA to depart from the delegate's assessment. Moreover, contrary to the reasoning of Bromberg J80, and of the decision on which his Honour relied81, in such a case it is not a question of whether the IAA may have considered exercising its discretion under s 473DC to interview an applicant, or whether an applicant is able to prove that the IAA failed to consider exercising its discretion to interview the applicant. The legal unreasonableness consists in the IAA failing sufficiently to respect the advantage of the delegate in seeing and hearing an applicant give evidence and thus in the IAA departing from the delegate's assessment of an applicant's credibility despite the absence of demonstrated error in the sense that has been explained. Whether or not the discretion under s 473DC extends to inviting an applicant to interview in order to assess the applicant's demeanour is another 79 See, eg, Queensland v Masson (2020) 94 ALJR 785 at 799-800 [74]-[78] per Kiefel CJ, Bell and Keane JJ, 812 [119], 814 [127] per Nettle and Gordon JJ; 381 ALR 560 at 577-578, 594, 596-597. 80 ABT17 v Minister for Immigration and Border Protection [2019] FCA 613 at [24]. 81 DPI17 v Minister for Home Affairs (2019) 269 FCR 134. Nettle question which, for present purposes, need not be decided. It may be observed, however, that there are some considerations that potentially stand in the way of a conclusion that it extends that far. As has been seen, s 473DB provides that, subject to exceptions, the IAA's review of a fast track reviewable decision is to be made without interview. The only relevant exception is an interview under s 473DC to obtain "new information". Possibly, an applicant's further and better explanation of events given in interview with the IAA would amount to new information within the meaning of s 473DC(1); for, axiomatically, any such further and better explanation would not have been before the delegate, and the IAA might consider it to be relevant. Possibly, too, the demeanour of an applicant when providing such a further and better explanation in interview with the IAA could be regarded as comprising part of that new information. But s 473DD(b)(i) precludes the IAA considering new information that could have been provided to the delegate, and, in one sense, such a further and better explanation of events, including an applicant's demeanour when providing it, could have been provided to the delegate. This is not to overlook that, because demeanour is dependent on time, place and circumstances, the demeanour demonstrated by an applicant when providing a further and better explanation of events in interview with the IAA could not have been provided to the delegate (because the time, place and circumstances of interview before the delegate were different from those of the interview with the IAA). But even so, it would remain that the IAA would be precluded from taking the further and better explanation of events into account (because it could have been provided to the delegate), and so at least arguably precluded from taking into account an applicant's demeanour when providing that further and better explanation. On that view of the matter, the further and better explanation and the demeanour of an applicant when providing it are inseparable. The IAA's rejection of the delegate's assessment of the appellant's credibility As was earlier set out82, the delegate found that the appellant's evidence during the TPV interview was plausible and broadly consistent with country information pertaining to the events which the appellant described. And, as will be explained83, it is apparent that the delegate's assessment of the plausibility of the appellant's claims was based to a significant extent on the delegate's perception of the appellant's demeanour during the TPV interview. By contrast, the IAA treated the appellant's claims as to the severity and duration of the SLA's attacks as implausible because of what the IAA perceived to be the significance of inconsistencies in the appellant's telling of events and, to some extent, on what the IAA perceived as hesitation in the way in which the appellant responded to the delegate's questions during the TPV interview. It has not been suggested, however, that the delegate's assessment of the appellant's credibility, or thus of the 82 See [40] above. 83 See [74]-[76] below. Nettle plausibility of his claims, was contrary to, or even considered to be contrary to, incontrovertible facts or uncontested evidence or otherwise glaringly improbable. Essentially, the IAA departed from the delegate's assessment of the appellant's plausibility for no more reason than that, in the view of the IAA, the delegate did not give sufficient weight to inconsistencies and hesitation that the IAA regarded as pertinent to the assessment. As the IAA observed, during the TPV interview the appellant stated that a single SLA officer came to his home in 2009 about a month after the appellant returned from the displaced persons camp and showed the appellant a letter requesting him to come to the army camp, and the appellant went there. There, he was kept for two or three days in a dark room, made to lie down on the floor without a shirt and beaten on his back. At the delegate's request, the appellant took off his shirt and showed her some scars on his back and stated that, although he did not know what had been used to beat him, he thought it was needles that were poked into his back. The appellant had previously stated in his written statement that the most serious incident was in 2011 when he was detained for six days as punishment for having pushed an SLA officer who had come to the appellant's family home in plain clothes looking for the appellant. According to the IAA's perception of the oral recording of the TPV interview, when the appellant was asked by the delegate how he was tortured, "the [appellant] sounded hesitant before stating he was locked up in a room, not given food, beaten and they would ask him to clean their toilet" (emphasis added). Then, after a break in the TPV interview, the appellant disclosed that he had been sexually tortured during the six days that he was detained. When asked by the delegate why he had not said so before, "[h]e stated he was only giving the information now because it was his last opportunity but he hadn't spoke about it before because it was very degrading". Nor had the appellant gone to a doctor for medical attention after the attack. As recorded in the IAA's reasons, the appellant stated in the TPV interview that the last incident occurred in April 2012, during which he was mocked for having sustained the SLA's harm for so long, beaten so severely that he lost consciousness, and later dropped outside the SLA camp. The IAA emphasised that the appellant had previously said that he was in hiding when he was taken in in 2012. Later, he stated that he had not tried to avoid being detained in the first place but had tried to escape from the SLA camp. As recorded by the IAA, when the delegate asked the appellant to expand on this, "he stated that during the day the SLA officers would have the door to the room he was in open ... and he pretended to go out but they caught him. When the delegate put to him that it sounded unusual that the SLA officers would leave the door open, he said they would still be outside and he couldn't bear what they were doing to him even though he knew it probably wouldn't work." The IAA further emphasised that the delegate put to the appellant inconsistencies as between his arrival interview, in which he had stated that he had been taken in by the SLA in 2011 and 2012 but had not said that anything occurred in the three to four years before that, and his evidence at the TPV interview, that he was beaten on several occasions between 2008 and 2012. The appellant Nettle responded that "he had originally said the problem was happening from 2009" (which he had). No doubt, there were inconsistencies between what the appellant said in his initial interview and what he said in the TPV interview. Equally, however, as is apparent from the IAA's recitation of the TPV interview, in one way or another the delegate put each of the substantive inconsistencies to the appellant for response and, as is implicit in the delegate's reasons, the delegate was sufficiently impressed by the way in which the appellant responded to conclude that, despite the inconsistencies, the appellant's evidence at the TPV interview was plausible. Thus, as appears implicit in the delegate's reasons, despite the inconsistencies which the IAA identified in respect of the 2009 incident, and which must have been apparent to the delegate, the delegate with the benefit of seeing the appellant give evidence was sufficiently impressed by the appellant's demeanour in giving evidence regarding the incident, including his manner of demonstration of the scarring inflicted on him during that incident, to regard the appellant's description of the 2009 incident as plausible. Despite the inconsistencies that the IAA identified in respect of the 2011 incident, and which must have been apparent to the delegate, and despite the hesitation which the IAA detected in the way in which the appellant described the 2011 incident, the delegate with the benefit of seeing the appellant give evidence was sufficiently impressed by the way in which the appellant responded when the inconsistencies were put to him, including no doubt the manifestations of his embarrassment and hesitation about disclosing the sexual nature of the attack, to accept that the appellant's description of the incident was plausible. And critically, despite such inconsistencies as the IAA identified as pertaining to the 2012 incident, the delegate with the benefit of seeing the appellant give evidence was sufficiently impressed by the way in which the appellant explained the inconsistencies to accept that his description of the 2012 incident, and of the subsequent visit of the authorities to his family's home after he had left Sri Lanka, was plausible. Given that the delegate's acceptance of the appellant's claims was thus to a significant extent informed by the delegate's assessment of the appellant's demeanour as derived from the benefit of seeing and hearing the appellant give evidence at the TPV interview, and that the delegate's assessment was not glaringly improbable, contrary to compelling inferences or otherwise shown to be infected by error, it should be concluded that it was legally unreasonable for the IAA to depart from the delegate's assessment of the plausibility of the appellant's claims. This is not to overlook that the IAA had an oral recording of the TPV interview and so was able to hear the appellant giving evidence before the delegate. But the delegate's advantage in seeing and hearing the appellant give evidence was not replicated or substantially diminished by the IAA's ability to listen to the oral recording. Arguably, it might have been different if the delegate had conducted the TPV interview by telephone and had made an oral recording of the conversation. In such circumstances, it may be that the IAA, by listening to the recording, would Nettle be able to place itself in as good a position as the delegate to assess the appellant's demeanour. And certainly, it would have been different if the delegate had not interviewed the appellant at all. For in those circumstances, the IAA would have been in the same position as the delegate in deciding the matter on the papers. But however that may be, where, as here, a delegate has had the advantage of seeing and hearing an applicant give evidence in interview, it is incumbent on the IAA to respect the delegate's advantage and proceed accordingly. To fail to do so is legally unreasonable. Materiality It remains to deal with the Minister's alternative contention that the IAA's failure to respect the delegate's advantage in seeing and hearing the appellant give evidence in interview was immaterial, and therefore not legally unreasonable, because, as well as finding the appellant's claims to be implausible, the IAA decided the matter on the separate and independent basis that the change in circumstances since the appellant's departure from Sri Lanka meant that he no longer faces a risk of persecution. In turn, that draws attention back to the appellant's contention that, in the case of jurisdictional error constituted of legal unreasonableness, materiality is "bound up"84 in the characterisation of an exercise of power as legally unreasonable, such that it requires no separate consideration. I remain of the view, which Gordon J and I expressed in Minister for Immigration and Border Protection v SZMTA85, that a finding of jurisdictional error in the exercise of a statutory decision-making power is a conclusion that the decision maker has failed to comply with an essential pre-condition to, or limit on, the valid exercise of the power and reflects the distinction between acts unauthorised by law and acts that are authorised. Once jurisdictional error has been identified, a further question arises as to whether relief should be refused in the exercise of discretion on the basis that the error could not possibly have made any difference. For the reasons given by Gordon J, the executive, not the individual affected by the exercise of the statutory power, bears the onus of establishing that it would be futile to grant the relief sought86. But the notion of materiality involved in that latter exercise remains separate from the identification of jurisdictional error which precedes it, and of which materiality is not a criterion; and the idea of making materiality a criterion of jurisdictional error should be resisted to prevent the identification of judicial error descending into a form of merits review. Failure 84 See DPI17 v Minister for Home Affairs (2019) 269 FCR 134 at 163 [107] per (2019) 264 CLR 421 at 456-457 [83]-[85], 459-460 [92]-[95]. 86 Reasons of Gordon J at [107]-[110]. Nettle to exercise a statutory decision-making power reasonably is of course a jurisdictional error, and failure to exercise a statutory decision-making power reasonably may occur where the decision falls beyond the "range of possible, acceptable outcomes which are defensible in respect of the facts and law"87. In that sense, it is correct to say that materiality is bound up in the concept of legal unreasonableness88. But it does not follow that the IAA's failure to respect the delegate's advantage and proceed accordingly would cease to be legally unreasonable if the IAA had in fact also decided the matter on a basis independent of the IAA's assessment of the appellant's profile. It would mean only that relief might be refused in the exercise of discretion. In any event, the Minister's contention fails in limine for the reason that the IAA's assessment of the effect of the country information regarding changed circumstances since the appellant's departure from Sri Lanka was not independent of the IAA's assessment of the appellant's profile. As was earlier noticed89, the IAA reasoned that, because it found that the appellant's claims as to the nature and severity of the 2009 and 2011 incidents were implausible, and did not accept that the 2012 incident occurred, there was no "credible information" that indicated that the appellant was of any interest to the Sri Lankan authorities. It followed, the IAA reasoned, that it was implausible that members of the SLA would have gone to the appellant's family home and asked after his whereabouts after he had arrived in Australia, or that his family were told to report to the authorities when he returned. It followed in turn, the IAA said, that it was not satisfied that the appellant "has a profile that would be of interest to the SLA or the Sri Lankan authorities or that he is at risk of harm on the basis of his ethnicity or imputed support for the LTTE now or in the reasonably foreseeable future". 87 Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at 375 [105] per Gageler J, quoting Dunsmuir v New Brunswick [2008] 1 SCR 190 at 220-221 [47] per Bastarache and LeBel JJ. See also Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541 at 573 [83] per Nettle and Gordon JJ. 88 See, eg, DPI17 v Minister for Home Affairs (2019) 269 FCR 134 at 163 [107] per Mortimer J, referring to Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541 at 564-566 [53]-[56] per Gageler J, 572-573 [80] per Nettle and Gordon JJ, 583 [131] per Edelman J. See also, eg, Minister for Immigration and Border Protection v Stretton (2016) 237 FCR 1 at 6 [12] per Allsop CJ (Wigney J agreeing). 89 See [42]-[45] above. Nettle And as will be recalled90, that conclusion was critical to the IAA's final assessment of the significance of the country information regarding the change of circumstances since the appellant's departure. For having recognised that the 2012 Guidelines issued by the United Nations High Commissioner for Refugees indicated that certain real or perceived links with the LTTE continued to expose certain individuals to treatment which may give rise to a need for protection, the IAA sloughed that off as being of no significance in the appellant's case because, according to the IAA, there was nothing to support a finding that "all Tamils are imputed with LTTE affiliation or membership", and, moreover, "even those Tamils who lived within LTTE-controlled areas and had contact with that organisation and its civilian administration in their daily lives are not, without more, in need of protection" (emphasis added). If, however, the IAA had respected the delegate's advantage in seeing and hearing the appellant give evidence at the TPV interview, and so had not departed from the delegate's assessment of the plausibility of the 2009, 2011 and 2012 incidents and the SLA's visit to the appellant's family home after the appellant arrived in Australia, the IAA could not have reasoned as it did to the conclusion that the appellant lacked a "profile" that would be of interest to the SLA or Sri Lankan authorities, or, therefore, that this was a case "without more". The IAA would have been constrained to recognise that, according to the delegate's findings, there was something more – the nature and duration of the SLA's abuse of the appellant as claimed and the SLA officers' visit to the appellant's family home after his arrival in Australia – and bound to appreciate that the occurrence of those events bespoke the possibility of a "profile" that was of interest to the SLA or Sri Lankan authorities. So to conclude does not mean that recognition of such a profile would necessarily have precluded the IAA reasoning aliunde to a conclusion that the appellant no longer faces an appreciable risk of harm. But that is not the way in which the IAA approached its task. In the way in which the IAA reasoned, the IAA's departure from the delegate's assessment of the plausibility of the appellant's claims was critical to the IAA's decision. Conclusion It follows that the appeal should be allowed. The orders of the Federal Court should be set aside and in their place it should be ordered that the appeal to the Federal Court be allowed, the orders of the Federal Circuit Court be set aside, and, in their place, it be ordered that the decision of the IAA be set aside and the matter be remitted to the IAA for redetermination in accordance with Pt 7AA. The 90 See [45] above. Nettle Minister is to pay the appellant's costs of the application to the Federal Circuit Court and the appeals to the Federal Court and this Court. GORDON J. Part 7AA of the Migration Act 1958 (Cth), and the scheme created by that Part, impose a requirement for automatic merits review by the Immigration Assessment Authority of a "fast track reviewable decision" referred to it by the Minister for Immigration and Border Protection. Fast track reviewable decisions include certain decisions to refuse a protection visa on the basis that the Minister is not satisfied that the "referred applicant" meets the statutory criteria for the grant The Authority's powers, in Div 3 of Pt 7AA, must be exercised within the bounds of legal reasonableness92, the content of which is derived from the terms, scope, purpose and object of the Part93. Division 3 of Pt 7AA provides for de novo review94, on the papers95, of certain decisions to refuse a protection visa referred to the Authority under s 473CA, with the objective of "providing a mechanism of limited review that is efficient, quick, free of bias and consistent with Division 3 (conduct of review)"96. Underpinning review on the papers by the Authority is an assumption that "[a] fast track review applicant has had ample opportunities to present their claims and supporting evidence" to the Minister97. The Authority is obliged to affirm the decision or remit it to the Minister98. In this case, a delegate of the Minister interviewed the appellant in person and accepted the appellant's evidence at that interview as plausible and broadly 91 Migration Act, s 473BB definition of "fast track reviewable decision"; see also s 5(1) definition of "fast track decision". 92 Plaintiff M174/2016 v Minister for Immigration and Border Protection (2018) 264 CLR 217 at 227 [21], 245 [86]. 93 Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541 at 94 Plaintiff M174/2016 (2018) 264 CLR 217 at 226 [17], 245 [85], 246 [92]. 95 Migration Act, s 473DB(1). 96 Migration Act, s 473FA(1). 97 Australia, House of Representatives, Migration and Maritime Powers Legislation Amendment (Resolving the Asylum Legacy Caseload) Bill 2014, Explanatory Memorandum at 131 [893]; see also at 135 [920]. 98 Migration Act, s 473CC; Plaintiff M174/2016 (2018) 264 CLR 217 at 226 [16]. consistent with country information. The Authority reviewed the audio recording of the appellant's interview with the delegate, without the benefit of having observed the appellant giving evidence, and then departed from the delegate's findings about the credibility of the appellant's evidence, without providing a sufficient reason. That was legally unreasonable. The facts and procedural history are set out in the reasons of Nettle J99. The scheme of Pt 7AA has been addressed by this Court on previous occasions100. For present purposes, it is sufficient to record that the Part imposes automatic review by the Authority of a fast track reviewable decision "through the imposition of three cumulative and consecutive statutory duties"101: "[1] The Minister has a duty to refer a fast track reviewable decision to the Authority as soon as reasonably practicable after the decision is made [s 473CA]. [2] The Secretary of the Department of Immigration and Border Protection then has a duty to give specified 'review material' to the Authority at the same time as, or as soon as reasonably practicable after, the decision is referred to the Authority [s 473CB]. [3] The Authority then has a duty to 'review' the referred decision [s 473CC(1)] and to do so 'by considering the review material' provided to it by the Secretary without accepting or requesting new information and without interviewing the referred applicant [s 473DB(1)]. That requirement for the Authority to conduct the review by considering the review material provided to it by the Secretary is expressly made subject to other provisions within the Part which confer power on the Authority to get [s 473DC] and to consider [s 473DD] 'new information', being information which was not before the Minister in specified circumstances 99 Reasons of Nettle J at [37]-[52]. 100 Plaintiff M174/2016 (2018) 264 CLR 217 at 225-232 [13]-[38]; BVD17 v Minister for Immigration and Border Protection (2019) 93 ALJR 1091 at 1094-1096 [3]-[17]; 373 ALR 196 at 198-201; CNY17 v Minister for Immigration and Border Protection (2019) 94 ALJR 140 at 144-145 [2]-[8]; 375 ALR 47 at 48-50. See also Minister for Immigration and Border Protection v CED16 (2020) 94 ALJR 706; 380 ALR 216. 101 CNY17 (2019) 94 ALJR 140 at 144 [4]; 375 ALR 47 at 49. when making the referred decision and which the Authority considers may be relevant." This appeal is concerned with the second and third of those duties. Consistent with the objective of providing a mechanism of limited review that is efficient and quick102, the primary or default position is that the Authority has a duty to "review" the referred decision103 "by considering the review material" provided to it by the Secretary, without accepting or requesting new information and without the scheme, the Authority is to treat the review material provided to it by the Secretary as if it were complete105. the referred applicant104. Under interviewing Consistent with that scheme, s 473CB(1)(a) expressly provides that the review material must include a statement that sets out the findings of fact made by the decision-maker, refers to the evidence on which those findings were based and gives the reasons for the decision. It recognises that the review material will record findings made on the evidence and, of course, where the referred applicant is interviewed by the decision-maker, will include any findings based on what occurred at that interview. Thus, the review material will, to the extent necessary for the findings made by the delegate, address demeanour. And that is what the delegate did in this matter. After setting out the evidence, the delegate set out one of her findings – that the appellant's claims were plausible and generally consistent with country information. As Pt 7AA and, in particular, s 473CB(1) requires, the Authority therefore had before it the material to enable it to undertake a de novo merits review of the delegate's decision. There was no informational gap. The difficulty arose after the decision of the delegate was referred to the Authority. As explained, the Authority listened to the audio recording of the 102 Migration Act, ss 473FA(1) and 473DA(1). 103 Migration Act, s 473CC(1). 104 Migration Act, s 473DB(1). See also Plaintiff M174/2016 (2018) 264 CLR 217 at 105 See, eg, Migration Act, s 5AAA; Plaintiff M174/2016 (2018) 264 CLR 217 at 248 [95]; CNY17 (2019) 94 ALJR 140 at 145 [7], 146 [15], 166 [140]; 375 ALR 47 at 50, 51-52, 78; Australia, House of Representatives, Migration and Maritime Powers Legislation Amendment (Resolving the Asylum Legacy Caseload) Bill 2014, Explanatory Memorandum at 130 [891], 135 [919]-[920]; Australia, Senate, Migration and Maritime Powers Legislation Amendment (Resolving the Asylum Legacy Caseload) Bill 2014, Supplementary Explanatory Memorandum (Sheet interview conducted in person between the appellant and the delegate who made the referred decision. Contrary to the findings of the delegate that the appellant's claims were plausible, the Authority made findings, among others, that the appellant's evidence in that interview was "generally lacking in detail", the appellant "appear[ing] unable to expand in any detail on a number of his written claims and at times sound[ing] vague and hesitant". The Authority's conclusion that it was not satisfied that the appellant would face a real chance of serious harm if he were returned to Sri Lanka was based, in part, on the appellant's "personal circumstances", which, of course, included the Authority's assessment of the appellant in the interview. In affirming a fast track reviewable decision106, the Authority is entitled to reject one or more of the delegate's findings based on demeanour if they are glaringly improbable, or for some other sufficient and identified reason107. However, the Authority will act unreasonably if, without sufficient reason, it rejects an account given by the referred applicant in an interview conducted in person between the referred applicant and the delegate, and which the delegate accepts in making the referred decision. And that is what the Authority did in this matter. It rejected the delegate's finding that the appellant's claims were plausible (which was based, at least in part, on the appellant's demeanour), not on the basis of the review material but on its own assessment of the appellant's demeanour from an audio recording of that interview and without providing any sufficient reason to depart from, or to reject, that review material. Absent such an analysis and an explication of the reasons for reaching a different conclusion, the Authority was bound to accept those findings of the delegate. Put in different terms, contrary to s 473DB(1), the Authority reviewed the decision by rejecting, or putting to one side, a central part of the review material that had been provided to it and substituting its own findings without any basis for doing so. The decision of the Authority was unreasonable. It is then necessary to address the contention that the appellant's demeanour was "new information" within the meaning of s 473DC. In Plaintiff M174/2016 v Minister for Immigration and Border Protection, Gageler, Keane and Nettle JJ explained the approach to new information as one of a "primary rule" (of review on the papers) with "exceptions"108. To be new information, among other things, the referred applicant's demeanour must have not been "before the Minister when 106 Migration Act, s 473CC(2)(a). 107 cf Fox v Percy (2003) 214 CLR 118 at 127-128 [27]-[28]; Robinson Helicopter Co Inc v McDermott (2016) 90 ALJR 679 at 686-687 [43]; 331 ALR 550 at 558-559. 108 (2018) 264 CLR 217 at 227 [22]; see also 245 [88]. the Minister made the decision under section 65"109. Here, the appellant's demeanour was before the delegate and formed the basis, at least in part, of the delegate's findings. Indeed, that is the nature of the appellant's complaint. The appellant's demeanour was not and could not be "new information". Next, the contention that if the appellant was asked to attend an interview with the Authority, the appellant's demeanour before the Authority would be "new information" because that demeanour was not and could not have been provided to the Minister, should not be accepted. It is contrary to the legislative scheme. As explained, subject to the exceptions in Pt 7AA, the Authority must review a fast track reviewable decision referred to it by considering the review material provided to it under s 473CB without accepting or requesting new information and without interviewing the referred applicant110. In conducting the review, the Authority faced a choice – accept the delegate's findings based on demeanour or, if those findings were glaringly improbable or some other sufficient reason could be identified, set them aside. That conclusion is consistent with what underpins Pt 7AA, namely a review on the papers where a referred applicant has had ample opportunity to present their claims and supporting evidence to the Minister. The Authority's obligation is to "consider" the review material provided to it by the Secretary and to "examine the review material ... in order ... to form and act on its own assessment of the relevance of that material to the review of the referred decision"111. In order to form and act on its own assessment of the relevance of the review material to its review, the Authority may not, without sufficient reason, reject that part or those parts of the review material based on demeanour. The Authority may consider any new information where it is satisfied there are exceptional circumstances, and the information was not and could not have been provided to the Minister before the Minister made their decision or was credible personal information which was not previously known and, had it been known, may have affected the consideration of the referred applicant's claims112. Not only was the appellant's demeanour before the delegate but it was credible personal information which, at that time, was known and affected the Minister's consideration of his claims. The scheme does not permit rejection of those findings 109 Migration Act, s 473DC(1); see also s 473DD(b)(i). 110 Migration Act, ss 473DB(1), 473DC, 473DD. 111 CNY17 (2019) 94 ALJR 140 at 145 [7]; 375 ALR 47 at 50. 112 Migration Act, s 473DD. based, at least in part, on demeanour absent a sufficient reason. None was identified. It was suggested that the Authority could and should have interviewed the appellant and made an assessment of his credibility and demeanour. That step is neither permitted nor required by s 473DC. The proposition is that because the review material given to the Authority did not provide a sufficient reason to set aside the delegate's conclusion about credibility, the Authority not only could have but should have sought to obtain "new information" on which to do so. That is not what Pt 7AA provides. Section 473DC(1) relevantly identifies what is new information as information not before the delegate. The appellant's account of what had happened to him was before the delegate. Section 473DC(3) permits the Authority to get new information by conducting a new interview. But having the appellant repeat his account of what had happened to him in an interview with the Authority is not to get new information. And it does not become new information by observing that only new questions might be asked of the appellant about his account. includes The review by the Authority prescribed by Pt 7AA is an important mechanism for ensuring that decisions by delegates to refuse protection visas are made on proper bases. As explained, in its review, on the papers, the Authority "examine[s] the review material ... in order ... to form and act on its own assessment of the relevance of that material to the review of the referred decision"113. That assessment its review of findings based on demeanour. Those findings may favour an applicant; they may not favour an applicant. But the Authority reviews all findings based on demeanour and makes its own assessment of the relevance of that material. And when, as part of that assessment, the Authority forms a view that a finding based on demeanour must be set aside because it is glaringly improbable, or for some other sufficient reason, then the Authority must identify that finding and provide the reason or reasons for setting it aside. If no sufficient reason can be identified by the Authority, then the Authority is bound to accept that finding of the delegate. The alternative of video-recording the interview by a delegate or another person defeats the stated statutory purpose of Pt 7AA114. Not only that, but video-recording the interview (itself an additional cost in both recording and then producing a copy of the recording for it to be provided to the Authority as part of the review material and within the time limits prescribed by Pt 7AA) brings with it further and no doubt novel questions about the use of the recording when the 113 CNY17 (2019) 94 ALJR 140 at 145 [7]; 375 ALR 47 at 50. 114 See [79]-[81] above. Authority conducts its review and, of course separately, then by the courts in any application for judicial review115. That leaves one final matter – the Minister's alternative contention that the Authority's error was immaterial, and therefore not a jurisdictional error. In Minister for Immigration and Border Protection v SZMTA116, Nettle J and I explained why "materiality of error" should not be a criterion of jurisdictional error. One particular difficulty presented by materiality of error as a criterion of jurisdictional error is if the person challenging the decision has the burden of proving that the error could realistically have resulted in a different decision. To describe an error as "harmless", or to ask whether that error was "material", is to admit that there has, in fact, been an error. This reflects the fact that, generally speaking, the law is concerned first to find whether a defendant has breached his or her duty before going on to consider the consequences of that default. This is no less true when the defendant is the executive, and is alleged to have breached some duty, statutory or otherwise. It reflects the orthodox approach to jurisdictional error, according to which the question of error is determined before one turns to the question of whether relief should be withheld in the discretion of the court. Once error has been established, the question is what is the judicial response to that error. This in turn raises questions as to the proper role of the courts in reviewing executive action. These questions relate to the authority of courts in our system of government and the judicial techniques by which those courts undertake their work. In undertaking their work in this area of law, courts are concerned with the legal limits of executive power. The answers given by courts must therefore take account of a number of cardinal principles of constitutional law. These include the nature of judicial power (including its focus on deciding controversies between persons117 or between persons and government), the separation of that power from legislative and executive powers, and the rule of law. When considering jurisdictional error, all of these principles must be addressed in the context of a particular statute. It is therefore also important to remember that the words of the statute are supreme. No court has the power to change those words. 115 cf Pell v The Queen (2020) 94 ALJR 394 at 401 [36], 402 [38]; 376 ALR 478 at 116 (2019) 264 CLR 421 at 458-460 [89]-[95]. 117 Be they private persons, corporations, polities, or the community as personified in the Crown or a Director of Public Prosecutions: D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at 16 [32]. The statute sets the playing field and the rules. Those rules apply to everybody: they apply to all people within Australia, including administrative decision-makers and the judiciary. The statute is prospective. That is, it sets those rules in advance. Those rules tell decision-makers, for example, that they must act reasonably and accord procedural fairness. "The legal standard of reasonableness must be the standard indicated by the true construction of the statute"118. The statute ensures that decision-makers know what is required of them when carrying out their tasks. If those rules – such as reasonableness and procedural fairness – are to be qualified or denied, the legislature must express that intention in clear language. If a decision-maker breaches the rules set down by the legislature, the decision-maker commits an error. A decision-maker has breached the rules and committed an error, or the decision-maker has not breached the rules and has not committed an error. The situation is a "binary" one119. Thus, as McHugh J said in SAAP v Minister for Immigration and Multicultural and Indigenous Affairs120: "If the requirement to give written particulars is mandatory, then failure to comply means that the [decision-maker] has not discharged its statutory function. There can be no 'partial compliance' with a statutory obligation to accord procedural fairness. Either there has been compliance or there has not." This emphasises the importance of the point made earlier: the statute sets the rules and those rules are known in advance. Their content is fixed. That content is not "ambulatory"121. If that was not the case, a decision-maker would be unable to know what rules to abide by. Similarly, a person who is subject to the exercise of power by that decision-maker could not know whether they had been treated in accordance with the law. It is, of course, true that the circumstances of individuals vary. But this does not mean that rules shift with individuals' circumstances. 118 Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at 364 [67]; see also 351 [29], 362 [63], 363 [65], 370-371 [90], 376 [109]; SZVFW (2018) 264 CLR 541 at 575 [88]-[89]. 119 Crawford, "Immaterial Errors, Jurisdictional Errors and the Presumptive Limits of Executive Power" (2019) 30 Public Law Review 281 at 284. 120 (2005) 228 CLR 294 at 321 [77]. 121 Crawford, "Immaterial Errors, Jurisdictional Errors and the Presumptive Limits of Executive Power" (2019) 30 Public Law Review 281 at 282. Judicial power is concerned with whether the rules set down by the statute were met. Generally, this manifests as a concern with the manner in which power conferred by the statute was exercised. That inquiry is, logically, concerned with the time at which the power was exercised122 and, in cases of legal unreasonableness, also the result. The inquiry therefore has a temporal element. These two principles – that statutes fix rules in advance and that error is determined at the time of the exercise of power by a decision-maker – have an important consequence. Together with the constitutional principles discussed earlier, they have the consequence that judicial power does not permit a court to inquire, in hindsight, whether an error was "material", thereby modifying the statute. To make a finding that no error was committed because that error was not material is to change the statutory obligation. Consider a statutory obligation to accord procedural fairness. If a decision-maker does not accord procedural fairness in the exercise of the relevant power, they have breached that obligation. To then inquire whether that breach was "material" is to say (contrary to the previous sentence) that the obligation may or may not have been breached, depending on whether compliance with the obligation could have resulted in a different outcome. Two things may immediately be example. First, the obligation to accord procedural fairness has been changed. It is no longer an obligation to accord procedural fairness in exercise of the statutory power. Rather, the new obligation on the decision-maker is to accord procedural fairness if (and only if) to do so would make a difference to the ultimate decision. The guarantee of procedural fairness is removed. from seen this Second, the new obligation is inherently uncertain. The obligation on a decision-maker is not set in advance by the statute. Rather, its content now depends upon the particular circumstances of the decision at issue. It is difficult (if not impossible) for a decision-maker to know in advance what level of procedural fairness might have made a difference. The decision-maker needs to know in advance how to act in accordance with the law, but a materiality analysis is necessarily backwards-looking. Nor is the criterion of materiality any easier for the judiciary to apply: the criterion is akin to, or feels like, a form of merits review. A qualification of materiality is also contrary to the principle expressed earlier: if obligations of procedural fairness are to be limited or qualified, that limit 122 In cases of apprehended bias, this may be before active steps are taken by a decision-maker: see CNY17 (2019) 94 ALJR 140 at 155-156 [71]-[72]; 375 ALR 47 or qualification must be expressed in clear words by the legislature. Limits or qualifications cannot be imposed by way of "qualitative judgments"123 made by courts. If there is jurisdictional error, it is for the executive, not the individual affected by the exercise of the power, to establish that, notwithstanding the error, relief should be denied in a given case because that relief would be futile. The presumption that relief will go reflects the primacy of the statutory rules and the separation of powers by which courts respect those rules. It also reflects the fact that judicial power is, and must be, exercised in a way which seeks to ensure that the values that underpin our democracy will be upheld. Those values include the idea that power will not be exercised against an individual in a way that is contrary to law. At a more human level, such exercises of power must respect the integrity and the dignity of individuals who are subject to that power. These principles are consistent with the proper understanding of judicial power in this context. As Allsop CJ has said, judicial power seeks to ensure that executive power which extends beyond the authority conferred on the executive is controlled. There are, as his Honour described, "deep Constitutional relationships between Parliament through statute, the Executive through statutory and inhering executive authority and Courts through the exercise of judicial power and the common law"124. Those relationships are, as has been said, concerned in this context with ensuring that executive power remains within the bounds set by the legislature. To require an individual to show that executive power – public power – would have been exercised differently if preconditions on the exercise of that power had been met is to fail to understand these relationships and the role of judicial power. It places the onus on an individual to show why public power should be re-exercised, rather than protecting that individual from exercises of public power which are contrary to the law. And, it must be observed, at least in some cases it places the onus on an individual to show why public power should be re-exercised, without the necessary facts, or the ability to obtain the necessary facts. This is not to say that every instance of jurisdictional error results in relief. As Allsop CJ has also said, it is necessary to "provide a realistic and appropriate 123 cf Hossain v Minister for Immigration and Border Protection (2018) 264 CLR 123 124 Allsop, "The Foundations of Administrative Law", speech delivered at the 12th Annual Whitmore Lecture, 4 April 2019 at 14. answer" to questions about the legality of exercises of executive power125. Consistent with the principles stated above, that answer must start by recognising that the executive has transgressed its legal limits. That is, it is necessary first to recognise that an error has been made. Subsequent to that finding, relief may be denied in those cases where the executive can show that the relief would be futile, in the sense that the error could not possibly have made a difference. A court will not award relief when it is futile to do so. That is as true in cases of jurisdictional error, including on the ground of legal unreasonableness, as in any other case. And in public law, the onus is on the executive to show that this is an appropriate step in a given case. That onus cannot rest with an individual who is challenging a decision of the executive. For those reasons, the appeal should be allowed. I agree with the orders 125 Allsop, "The Foundations of Administrative Law", speech delivered at the 12th Annual Whitmore Lecture, 4 April 2019 at 25. Edelman Introduction and agreement with other reasons I have had the considerable benefit of reading in draft the reasons of Nettle J and Gordon J. Like Gordon J, I adopt the facts and the procedural history set out in the reasons of Nettle J. I agree with Nettle J and Gordon J that the Immigration Assessment Authority acted unreasonably by departing in its reasoning from the delegate's finding that the appellant's claims were plausible. As Nettle J explains, it was a legal error for the Authority, which did not have the opportunity to assess the demeanour of the appellant including the demonstration of his scarring, to depart from the delegate's assessment of the appellant's credibility126. There was no legal basis to depart from the findings of the delegate, which were not contrary to incontrovertible facts or uncontested testimony, or glaringly improbable, or contrary to compelling inferences, or otherwise erroneous127. I also agree with Nettle J that care sometimes needs to be taken with expressions like "hearing de novo"128, a hearing "from the beginning", which is not an expression that appears in the Migration Act 1958 (Cth). As his Honour explains, the nature of the review conducted by the Authority is a matter of statutory interpretation. Effect must be given to the intention of Parliament rather than superimposing upon the statute a conception of what a hearing de novo might require. The description of the review as "de novo" is only a loose description which should not distract from what is required by the scheme of Pt 7AA of the Migration Act. That Part contemplates only a "limited review"129. Relevantly to this appeal, central features that establish the limited nature of the review include: (i) the proscription upon considering "new information" unless various conditions are satisfied including that there are "exceptional circumstances"130; (ii) the express statutory assumption that the Authority's review will generally be conducted "on the papers" without interviewing the referred applicant131 and 126 At [63], [67]. See also reasons of Gordon J at [87]. 127 At [63]. See also reasons of Gordon J at [87]. 129 Migration Act 1958 (Cth), s 473FA(1). 130 Migration Act, s 473DD. 131 Migration Act, s 473DB(1)(b). Edelman without a hearing132; and (iii) the inclusion in the review material of the delegate's reasons for decision133 so that the Authority must not undertake its consideration without taking into account the views of the delegate. Since this is one of the final decisions of Nettle J, I wish also to express my gratitude for his customary comprehensive consideration, his lucid expression, and, as always, his intellectual rigour. I seek to add observations to his Honour's reasons and the reasons of Gordon J on only two points. A referred applicant's re-presentation of old evidence is not "new information" The context in which the issue on this appeal arises is a situation that is likely to be common. Upon reviewing the papers, the Authority has doubts about the correctness of a step in the reasoning process of the delegate, which depended in part upon the delegate's usual assessment of the applicant in an interview. The review material before it is not so plain that the Authority can reach a different conclusion on that step without having had the same benefit of assessing the referred applicant's demeanour. One submission of the appellant was that, in such circumstances, the Authority's failure to exercise its power under s 473DC to invite legally unreasonable. the referred applicant The submission was that the Authority would be required to invite the referred applicant to "give"134 evidence concerning the same "facts, subjects or events" that were the subject of the delegate's questions because the evidence given by the referred applicant would be given with a demeanour which would, by definition, be "new". This submission is contrary to both the terms and the purpose of Pt 7AA. interview would be to an As to the terms of Pt 7AA, the appellant's submission that a referred applicant can "give"135 new information simply by re-presenting old evidence is, at the very least, a strain of the English language. The natural and ordinary meaning of a referred applicant "giving" information is that the referred applicant provides facts or refers to circumstances "relating to material or documentation of an evidentiary nature"136. A referred applicant does not "give" their demeanour. 132 Migration Act, s 473BA. 133 Migration Act, ss 473BB (definition of "review material"), 473CB(1)(a). 134 Migration Act, s 473DC(3). 135 Migration Act, ss 473DC(3), 473DD(b). 136 Minister for Immigration and Border Protection v CED16 (2020) 94 ALJR 706 at 711 [21]; 380 ALR 216 at 222, quoting Minister for Immigration and Border Edelman Rather, the demeanour of, or manner in which the evidence is given by, a referred applicant is a matter "on which the value of [the] evidence depends"137. Another major obstacle for the appellant's submission which derives from the terms of Pt 7AA is that the Authority can only consider the "new information" of the referred applicant's demeanour if the circumstances are "exceptional"138. Yet common circumstances, as the circumstances of this appeal might reasonably be thought to be, are usually the antithesis of exceptional circumstances: a joint judgment of this Court recently said of s 473DD that to be exceptional a circumstance "cannot be one that is regularly, or routinely, or normally encountered"139. Hence, if the appellant's submission were accepted then it would be legally unreasonable for the Authority not to interview a referred applicant in order to consider demeanour but any "new information" obtained from assessing the demeanour could not be considered by the Authority. An acceptance of this submission by the appellant would also undermine the scheme of Pt 7AA. When that Part was introduced, the then Minister, Mr Morrison, described one of its purposes as resolving "around 30,000" outstanding claims to asylum140. On the appellant's submission, the Authority might often be required to ask itself whether its doubts about any conclusion of the delegate based on demeanour require it to give the referred applicant an interview. There might be many instances in which an interview is required. Further, if this submission were correct, the terms of s 473DE could require the Authority to consider giving a second interview to the referred applicant. Without more, the effect of s 473DE would be that if, in the course of deliberating, the Authority considered that the referred applicant's demeanour would be the reason, or part of the reason, for affirming the Minister's or delegate's decision then the Authority could also be required, amongst other things, to invite the referred applicant to give Protection v SZMTA (2019) 264 CLR 421 at 440 [28]. See also (2020) 94 ALJR 706 at 712 [30]; 380 ALR 216 at 224. 137 Wigmore, A Treatise on the System of Evidence in Trials at Common Law (1904), vol 2 at 1751 §1395, quoting State v McO'Blenis (1857) 24 Mo 402 at 421. See also Starkie, A Practical Treatise of the Law of Evidence, and Digest of Proofs in Civil and Criminal Proceedings, 7th Am ed (1842), vol 1 at 582. 138 Migration Act, s 473DD(a). 139 Plaintiff M174/2016 v Minister for Immigration and Border Protection (2018) 264 CLR 217 at 229 [30], quoting R v Kelly [2000] QB 198 at 208. 140 Australia, House of Representatives, Parliamentary Debates (Hansard), 25 September 2014 at 10545. Edelman comments on its assessment of the referred applicant's demeanour in writing or at yet another interview. It is highly unlikely that Parliament, which expressly stated that the Authority "does not hold hearings"141, could have intended that, in circumstances likely to be common, one or two interviews might be required to be held. In the Explanatory Memorandum to the Bill which introduced Pt 7AA it was said142: "A fast track review applicant has had ample opportunities to present their claims and supporting evidence to justify their request to international protection throughout the decision-making process and before a primary decision is made on their application." The appellant's submission, if accepted, would conflict with the express statutory assumption that the Authority's limited review will generally be on the papers without interviewing the referred applicant143. It would negate Parliament's description of the Authority as a body that "does not hold hearings"144. It would subvert the express goal that the Authority "is required to pursue the objective of providing a mechanism of limited review that is efficient, quick, free of bias and consistent with Division 3 (conduct of review)"145. Many reviews would not be limited. They would not be efficient. And they would not be quick. Parliament should not be taken to have contemplated the possibility that such stultification of its statutory goals might be avoided by the introduction of new, innovative administrative techniques such as video-recording interviews between an applicant and an "officer"146 other than the delegate who makes the decision on behalf of the Minister. Such a new practice for fast track applicants might be expected to increase the work of the Department substantially since it would require both a video-recorded interview by an officer and a viewing of that 141 Migration Act, s 473BA. 142 Australia, House of Representatives, Migration and Maritime Powers Legislation Amendment (Resolving the Asylum Legacy Caseload) Bill 2014, Explanatory Memorandum at 131 [893]. 143 Migration Act, s 473DB(1). 144 Migration Act, s 473BA. 145 Migration Act, s 473BA. 146 As defined in Migration Act, s 5(1). Edelman interview by the delegate, who is required to have regard to that information147. And if, contrary to the view expressed above, a "limited review" required the Authority to be in the same position to assess credibility as the delegate, the video- recording of interviews before an officer would impose a new burden upon the Authority to scrutinise the demeanour of a referred applicant in most or all of the video-recorded interviews where the Authority has doubts about findings dependent upon the demeanour of the referred applicant. Although this scrutiny of a video-recording would be less time-consuming for the Authority than a fresh interview, it could still imperil the statutory goals of efficiency and speed, potentially without additional benefit148, when compared with a process of the Authority making its independent assessment upon the basis of acceptance of demeanour findings by the delegate from which there is no legal basis to depart149. For these reasons, if the expression "de novo" were to be understood in literal terms as meaning a hearing entirely from the beginning then, as Nettle J explains, the review is not "de novo". It is a "limited" review. One way in which it is limited is that evidence that has already been presented before a delegate does not become "new information" simply by being re-presented to the Authority. Evidence which the delegate has heard cannot be reheard by the Authority in circumstances including the mere possibility that the referred applicant might give the evidence with a different expression. Just as the Authority cannot get, as "new information", a fresh presentation of documents, such as country information, obtained by the delegate and relied upon in making the decision under s 65150, so too the Authority cannot get, as "new information", a fresh presentation of oral evidence that was before the delegate and relied upon in making the decision under s 65. In each case, the Authority is required to consider the findings made by the delegate by a review that is based upon, and which will usually refer to, that evidence151. Those findings can be rejected by the Authority unless, in the process of doing so on the papers, such reasoning would be legally unreasonable. 147 Migration Act, s 56(1). 148 Compare Fennell v The Queen (2019) 93 ALJR 1219 at 1233 [81]; 373 ALR 433 at 451-452 on the limits to credibility assessments. 149 Compare Pell v The Queen (2020) 94 ALJR 394 at 401 [36], 402 [39]; 376 ALR 478 at 485-486 concerning the process of an appellate court proceeding upon the assumption that evidence is found to be "credible and reliable" in the course of making "its independent assessment of the evidence". 150 Migration Act, s 473DC(1)(a). 151 Migration Act, s 473CB(1)(a). Edelman Unreasonableness in the process of decision-making There was no suggestion on this appeal that the ultimate outcome reached by the Authority, that the decision of the delegate should be affirmed, was legally unreasonable in the sense that it was not an outcome that was reasonably open within "an area of decisional freedom"152. The issue was instead whether the process of reasoning deployed by the Authority, which unlike that of the delegate did not involve alternative paths of reasoning to the outcome, could be characterised as legally unreasonable. To adopt the distinction made by the Full Court of the Federal Court of Australia in Minister for Immigration and Border Protection v Singh153, the legal unreasonableness in issue on this appeal was process focused rather than "outcome focused". During the oral hearing of this appeal the Minister accepted that "the ultimate decision can contain jurisdictional error by reason of a legally unreasonable exercise of a step along the way". The Minister then conceded that, subject to the issue of materiality (which, depending upon the location of the onus, might better be expressed as immateriality154), if "a delegate makes a decision that is substantially based on demeanour then the Authority will need to have an independent evidentiary basis to depart from that decision" and that it would be legally unreasonable to reach a different view "without forming its own view about demeanour". The concession of the Minister concerning jurisdictional error based on unreasonableness in the process of decision-making could not be accepted if it were to be understood as based upon a ground of legal unreasonableness which encompassed the process of decision-making generally, unmoored from the particular statutory duties, functions, and powers that govern that process. The recognition of such a new ground of review based upon legal unreasonableness in the abstract process of decision-making would be a very large step. At worst, such a step could be destructive of a distinction between the legality of the exercise of administrative power and the "merits" of that exercise. The "merits" of an exercise of administrative power include the lawful exercise of 152 Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at 351 [28]. 153 (2014) 231 FCR 437 at 445 [44]. 154 OKS v Western Australia (2019) 265 CLR 268 at 280-282 [34]-[38]; BVD17 v Minister for Immigration and Border Protection (2019) 93 ALJR 1091 at 1104-1105 [66]-[67]; 373 ALR 196 at 212-213. Compare Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421 at 445 [46] with 459-460 [93]-[95]. Edelman power which involves "administrative injustice" or mere "error"155. At best, such a step would go beyond the usual, often unacknowledged, "ebb and flow" by which the judiciary has eroded this distinction156. A more orthodox conception of judicial review for legal unreasonableness in the process of decision-making recognises an implication of a duty of legal reasonableness only in the performance or exercise of a statutory duty, function, or power. Hence, decisions of this Court have recognised an implication of a requirement for legal reasonableness in the performance or exercise of specific statutory duties, functions, or powers such as the power to adjourn a review hearing157 or a power for the Authority to invite a person to give new information in writing or at an interview158. And in Minister for Immigration and Citizenship v SZMDS159, in taking an approach that was described as focusing upon legal unreasonableness in "the process of reasoning from facts and inferences" rather than in the outcome160, a particular duty upon which Gummow A-CJ and Kiefel J focused was the obligation of the Refugee Review Tribunal under s 430(1) of the Migration Act161 to set out findings on material questions of fact162. 155 Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 35-36. 156 Aronson, Groves and Weeks, Judicial Review of Administrative Action and Government Liability, 6th ed (2017) at 263 [4.690]. 157 Minister for Immigration and Citizenship v Li (2013) 249 CLR 332, especially at 362 [63] considering Migration Act, s 363(1)(b) (as it then stood). 158 Plaintiff M174/2016 v Minister for Immigration and Border Protection (2018) 264 CLR 217 at 227 [21], 245 [86], 249 [97], considering Migration Act, s 473DC(3). 159 (2010) 240 CLR 611. 160 Aronson, Groves and Weeks, Judicial Review of Administrative Action and Government Liability, 6th ed (2017) at 266 [4.720], comparing Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611 at 625 [40]-[42] (Gummow A-CJ and Kiefel J) with 647-648 [130] (Crennan and Bell JJ). 161 As it then stood. 162 Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611 at 623 Edelman A passage in the decision of the Supreme Court of Canada in Dunsmuir v New Brunswick163, to which reference is made in the reasons of Kiefel CJ, Bell, Gageler and Keane JJ164, might, on one view, call into doubt whether a duty to give reasons can be the subject of a requirement of legal reasonableness independently of whether the outcome is legally reasonable. That passage was later considered by the Supreme Court in Newfoundland and Labrador Nurses' Union v Newfoundland and Labrador (Treasury Board)165, which explained that "the reasons must be read together with the outcome and serve the purpose of showing whether the result falls within a range of possible outcomes". Such a conception could not justify the Minister's concession of legal unreasonableness by the Authority in reaching its own decision about demeanour because it was not suggested that the ultimate outcome reached by the Authority fell outside the "range of possible, acceptable outcomes"166. More recently, however, the Supreme Court of Canada has taken a broader view of the decision in Dunsmuir and the role that reasons can play in judicial review for legal unreasonableness. In Canada (Minister of Citizenship and Immigration) v Vavilov167 seven judges of that Court held that it was "mistaken" to understand the Newfoundland and Labrador Nurses' Union decision as confining review for legal unreasonableness only to the outcome. Hence, a decision with "formal reasons that fail to justify [it]" is invalid "[e]ven if the outcome of the decision could be reasonable under different circumstances" because "it is not open to a reviewing court to disregard the flawed basis for a decision and substitute its own justification for the outcome". Of course, where there is no specific duty, function, or power which is said to have been unreasonably omitted or exercised, including where there is no duty to give reasons and none are given, then the focus of reasonableness can only be upon the ultimate outcome168. The Minister's concession on this appeal can be justified in light of the duty upon the Authority to set out its reasons for its decision, contained in 163 [2008] 1 SCR 190 at 220-221 [47]. 165 [2011] 3 SCR 708 at 715 [14]. 166 Dunsmuir v New Brunswick [2008] 1 SCR 190 at 220-221 [47]. 167 (2019) 441 DLR (4th) 1 at 70-71 [95]-[96]. 168 Canada (Minister of Citizenship and Immigration) v Vavilov (2019) 441 DLR (4th) 1 at 86 [138]. See also Minister for Immigration and Border Protection v Singh (2014) 231 FCR 437 at 446 [45]. Edelman s 473EA(1)(b) of the Migration Act. For the reasons above, that duty can be understood as attracting the implied duty of reasonableness in its exercise. As Nettle J explains, the step in the Authority's reasoning process involving the rejection of the demeanour assessment by the delegate was a step that was essential in the single reasoning process leading to the Authority's conclusion. Although this was not a case where an essential step in the reasoning process was unexpressed169, the essential step that was expressed involved substantial error. For these reasons, the Minister's concession should be accepted. It is necessary to emphasise that there was no submission on this appeal that the Authority's error in its reasoning process, whilst significant, was insufficient to justify a conclusion of legal unreasonableness in the performance of the duty contained in s 473EA(1)(b). It suffices to say that factors which might point to the threshold for legal unreasonableness in the performance of this duty to give reasons being high, despite the importance of the issue being decided, include: the historical background against which Parliament legislated170, the statutory context emphasising the limited nature of the review and the need for efficiency and speed, and authorities which, using strong adjectives, had described reasons as leading to jurisdictional error where to provide an "intelligible the reasons fail justification"171 for the decision or are "irrational or illogical irrespective of whether the same conclusion could be reached by a process of reasoning which did not suffer from the same defect"172. Conclusion The appeal should be allowed and orders made as proposed by Nettle J. 169 cf Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme (2003) 216 CLR 212 at 224 [40] in the context of s 501G(1) of the Migration Act (as it then stood). 170 Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 at 230. See Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541 at 586 [135]. 171 Minister for Immigration and Border Protection v Singh (2014) 231 FCR 437 at 446-447 [47]. See also Tsvetnenko v United States of America (2019) 269 FCR 225 172 Duncan v Independent Commission Against Corruption [2016] NSWCA 143 at [287]. See also Minister for Immigration and Border Protection v Haq (2019) 267 FCR 513 at 534 [89].

HIGH COURT OF AUSTRALIA GUMMOW ACJ, HIH CLAIMS SUPPORT LIMITED APPELLANT AND INSURANCE AUSTRALIA LIMITED RESPONDENT HIH Claims Support Limited v Insurance Australia Limited [2011] HCA 31 22 August 2011 Appeal dismissed with costs. ORDER On appeal from the Supreme Court of Victoria Representation B W Walker SC with P Kulevski for the appellant (instructed by TressCox Lawyers) D F Jackson QC with M W Thompson SC and C M Harris for the respondent (instructed by Norris Coates) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS HIH Claims Support Limited v Insurance Australia Limited Equity – Doctrine of contribution – Requirement of co-ordinate liabilities – Sub- contractor insured under insurance policy ("HIH policy") issued by member of HIH corporate group ("HIH") and under insurance policy issued by respondent's predecessor in title – Sub-contractor held liable for damage caused to third party by collapse of scaffold – HIH accepted sub-contractor's claim for indemnity under HIH policy and paid portion of sub-contractor's legal costs – After collapse of HIH corporate group, sub-contractor assigned rights against HIH to appellant as trustee under government assistance scheme and appellant paid 90 per cent of amount HIH would have paid under HIH policy in satisfaction of sub-contractor's liability and defence costs, excluding amounts already paid by HIH – Whether appellant could claim equitable contribution from respondent – Whether liabilities of appellant and respondent co-ordinate. Words and phrases – "co-ordinate liabilities", "common burden", "common interest", "of the same nature and to the same extent". Appropriation (HIH Assistance) Act 2001 (Cth), ss 3, 4. GUMMOW ACJ, HAYNE, CRENNAN AND KIEFEL JJ. This appeal from a unanimous decision of the Court of Appeal of the Supreme Court of Victoria (Warren CJ, Mandie JA and Beach AJA) concerns a claim for equitable contribution. The appellant's obligation to indemnify the insured arose under the HIH Claims Support Scheme ("the Scheme") which was created by the Commonwealth Government to assist insureds affected by the collapse of the HIH group of insurance companies ("the HIH Group"). The appellant is the trustee of the HIH Claims Support Trust ("the Trust") and administrator and manager of the Scheme. The issue is whether, in the circumstances described below, the appellant is entitled to claim contribution from the respondent in respect of amounts which the appellant paid in satisfaction of liabilities incurred by the insured. The facts Ronald Steele, who conducted a scaffolding business, was sub-contracted to erect a scaffold at Albert Park, Melbourne for the purposes of the 1998 Australian Grand Prix. At all material times, Steele was insured under a general liability insurance policy ("the HIH policy") issued by a company in the HIH Group ("HIH"). At the same time, the Australian Grand Prix Corporation and its contractors and sub-contractors, one of which was Steele, were insured under an insurance policy ("the SGIC policy") issued by SGIC General Insurance Limited ("SGIC"), whose rights and liabilities had vested in the respondent by the time of the commencement of the proceedings below. At the Australian Grand Prix held at Albert Park in Victoria, on 3 March 1998, a supporting scaffold erected by Steele collapsed, causing damage to a large and valuable video screen known as a "jumbotron" screen, which was operated by Screenco Pty Limited ("Screenco"). That incident has given rise to three separate legal proceedings. The New South Wales proceeding In a proceeding commenced by Screenco in the Supreme Court of New South Wales ("the New South Wales proceeding"), the Supreme Court found Steele liable for the damage to the screen and entered judgment against him. The position of the parties before this Court was that both the HIH policy and the SGIC policy responded to the claim made against Steele. Before the collapse of the HIH Group in 2001, Steele made a claim under the HIH policy for indemnity in respect of the damage to the screen and any liability established in Steele in the New South Wales proceeding. HIH accepted this claim and, prior to the winding up of the company, had paid approximately $80,000 in legal costs incurred in defence of the New South Wales proceeding on Steele's behalf. Prior to the trial of the New South Wales proceeding, the HIH Gummow ACJ Hayne Crennan Group collapsed. HIH was placed in provisional liquidation on 15 March 2001, and winding up orders were made by the Supreme Court of New South Wales in August 2001. Before completing an account of the New South Wales proceeding, it is necessary to consider the Commonwealth Government's response to the collapse of the HIH Group. On 21 May 2001, the Minister for Financial Services and Regulation issued a media release entitled "Criteria for HIH Hardship Relief", announcing a relief package for "policyholders suffering financial hardship as a result of the HIH [Group] collapse." What followed was the institution of the Scheme, in which public funds were made available for the purpose of alleviating financial hardship of certain policyholders affected by the HIH Group's collapse. The Scheme In July 2001, before winding up orders were made, the appellant was appointed as trustee, administrator and manager of the Scheme, which was established by the Commonwealth Government following the Appropriation (HIH Assistance) Act 2001 (Cth) ("Appropriation Act"). That statute appropriated $640 million to provide financial assistance to "HIH eligible persons", defined as policyholders, insureds or beneficiaries under policies of insurance issued by companies in the HIH Group1, who "suffered financial loss as a result of the insolvency" of those companies2. The machinery under which the Scheme was established involved a trust deed ("the Deed") and a Commonwealth Management Agreement between the Commonwealth and the appellant, and a relevant Claims Management Agreement, described hereafter. The Deed states that the objects of the Trust are to provide for "assistance [that] will be paid by [the appellant]" to "certain qualifying individuals and small businesses affected as a direct result of the appointment on 15 March 2001 of the 1 CIC Insurance Limited, FAI General Insurance Company Limited, FAI Reinsurances Pty Limited, FAI Traders Insurance Company Pty Limited, HIH Casualty and General Insurance Limited, HIH Underwriting and Insurance (Australia) Pty Limited, and World Marine & General Insurances Pty Limited (each an "HIH company" and together "the HIH companies"). 2 Appropriation Act, ss 3-4. Gummow ACJ Hayne Crennan Provisional Liquidators to the HIH [c]ompanies"3. The appellant has duties and responsibilities under the Deed, which are limited, "[t]o the extent permissible by law and equity", to those expressly provided in the Deed and other constituent documents of the Scheme4. These include administering and using the trust fund, and establishing accounts both for Scheme payments and management expenses5. The trust fund established under the Deed includes sums recovered by the appellant as a result of the assignment of rights under an HIH company policy by an insured, reflecting sums recovered as a result of proving in the liquidation of an HIH company6. Under the Commonwealth Management Agreement7, pursuant to which the appellant is appointed as administrator and manager of the Scheme8, the appellant has numerous specific obligations including to receive, review and determine applications for assistance under the Scheme in accordance with certain eligibility criteria9; to admit, decline or undertake investigations into applications for assistance10; and to collect and check Offers to Assign submitted by applicants11, which are described below. The appellant is also empowered to authorise Claims Managers12 (subject to being funded by the Commonwealth) to 3 Deed, cl 2. 4 Deed, cl 6.1. 5 Deed, cl 9. 6 See the definitions of "Recoveries" and "Trust Fund": Deed, cl 1.1. 7 Entered into by the appellant as trustee of the Trust: Commonwealth Management Agreement, cl 4.1(a). 8 Commonwealth Management Agreement, cl 5.1. 9 Commonwealth Management Agreement, cl 5.3(a). 10 Commonwealth Management Agreement, cl 5.3(b). 11 Commonwealth Management Agreement, cl 5.3(d). 12 Claims Managers are appointed by the appellant and the Provisional Liquidators, or subsequent liquidators of any of the HIH companies, on the terms of a Claims Management Agreement: Commonwealth Management Agreement, cl 1.1. Gummow ACJ Hayne Crennan effect Scheme payments13, and to pursue "Recoveries"14, being those sums recovered in the liquidation of an HIH company15. The definition of "Eligibility Criteria"16 refers back to the abovementioned media release dated 21 May 2001. That document expressly excludes certain categories of claims from the Scheme. For example, claims in respect of which the insured is not an Australian citizen or permanent resident are excluded. The numerous exclusions make it plain that only certain classes of persons will be assisted to a nominated extent. Under the Scheme, the appellant does not assume obligations in respect of all of the HIH companies' insurance policies. The focus of the Scheme is upon "hardship relief" for certain policyholders and beneficiaries, in the context of the HIH Group's collapse. The Scheme is not directed to co-insurers in respect of the HIH companies' insurance policies. To meet the possibility that the appellant may recover sums in the liquidation of HIH, the appellant asks that any order for equitable contribution be made subject to a requirement that the appellant pay to the respondent one half of any sums so recovered. There is also a Claims Management Agreement to which the HIH companies, the appellant and QBE Management Services Pty Ltd ("QBE") are parties, pursuant to which QBE is appointed by the appellant to provide payment management and recovery services in relation to claims made under the Scheme17. The Claims Management Agreement contemplates that the appellant or one of the HIH companies could claim contribution from a co-insurer of that company in respect of monies already paid by an HIH company under an HIH company insurance policy18. There are three documents relevant to applicants for assistance under the Scheme, such as Steele. An eligible person could apply for assistance by filling 13 Commonwealth Management Agreement, cl 5.3(i). 14 Commonwealth Management Agreement, cl 5.3(k). 15 Commonwealth Management Agreement, cl 1.1. 16 Commonwealth Management Agreement, cl 1.1. 17 Claims Management Agreement, Background, cl 2.1. 18 See the definition of "Recoveries": Claims Management Agreement, cl 1.1. Gummow ACJ Hayne Crennan out an "Application for assistance" ("Application") and by making an "Offer to assign your policyholder rights" ("Offer to Assign"). In the information section of the Offer to Assign, entitled "Conditions and Obligations", it is stated that an insured with a valid claim under an HIH company policy is an unsecured creditor of the HIH Group. It is also stated that the liquidators have announced that the payment to unsecured creditors is "likely to be less than 50 cents in the dollar" and that the first payment will not be made "until at least March 2003." Then it is said that the Scheme operates to "provide [the applicant] the benefit that would have been provided by [the relevant HIH company] under an insurance policy." In a third document, entitled "Notes for applicants" ("Notes"), the Scheme is described as applying to claims in relation to events which have occurred before 11 June 2001 or claims made against an insured or notified to the insurer prior to that date (as applicable), and it is stated that a means test will be applied in respect of certain identified individual claims "to restrict the Scheme to cases of genuine hardship." The significance of the date of 11 June 2001 is that it was about two months before the commencement of the liquidation of the HIH companies. The Notes also contain the following statement: "The Scheme does not provide you with a replacement insurance policy. You should seek alternative cover immediately if your insurance cover is still with an HIH company."19 By completing and signing the Offer to Assign, an insured offered to assign to the appellant: all rights to receive or to demand the receipt of any benefit arising from any claim which [the insured has] made or make[s] under [the insured's] HIH [company] policy, where the claim is the subject of the payment of a benefit under the Scheme [which included any right to recover funds from the HIH Group upon its liquidation]; and any rights, however arising, which [the insured] may have or obtain against any person or organisation other than the HIH [company] insurer, in connection with the matters which have given rise to [the insured's] need to make a claim under the policy." 19 This was consonant with a statement in the abovementioned media release dated 21 May 2001: "Anyone who has not taken out a new policy and is currently insured with [an HIH company] should seek a new policy". Gummow ACJ Hayne Crennan In return, the appellant promised to pay to each insured whose offer was accepted "at least 90% of the amount that would have been provided by the original HIH [company] insurer" under the relevant insurance policy. The Offer to Assign expressly provides that the only method which the appellant may use to accept the offer of the applicant for assistance under the Scheme is "payment of a benefit under the Scheme." Where the benefit consists of a series of payments, "the first payment of the series constitutes acceptance by [the appellant] of this offer." The appellant reserved a discretion to withdraw assistance after acceptance of an offer in specified circumstances, none of which is relevant to the facts here. It was not a requirement for acceptance into the Scheme that an applicant should first exhaust any rights under other insurance policies held by the applicant. Assistance in the New South Wales proceeding On 10 July 2001, Steele made an Application to the appellant for assistance under the Scheme in relation to HIH's inability to honour Steele's entitlement to indemnity, and payment of defence costs, in the New South Wales proceeding. He amended his Offer to Assign on 31 October 2001 to identify correctly his policy number and HIH as his insurer. The appellant informed Steele that he was eligible for assistance. It subsequently accepted his offer by paying solicitors instructed on Steele's behalf up to 90% of their costs in conducting his defence in the New South Wales proceeding (excluding costs already paid by HIH). The appellant then paid 90% of the judgment sum awarded to Screenco in November 2002 at the conclusion of the New South Wales proceeding, and 90% of the costs of all other parties which Steele had been ordered to pay. Such is the background to two subsequent proceedings in Victoria, the second of which is the concern of the present appeal. The first Victorian proceeding In January 2000, HIH had sought from SGIC an admission that Steele was insured under the SGIC policy. After failing to secure that admission, HIH and Steele instituted a proceeding in the Supreme Court of Victoria against SGIC (later replaced by the respondent). HIH claimed equitable contribution from the respondent in respect of HIH's indemnification of Steele in the New South Wales proceeding. By an amended pleading dated 28 July 2005, Steele claimed an indemnity from the respondent in respect of the damages and costs he had been ordered to pay in the New South Wales proceeding and his defence costs, including sums paid by the appellant. The respondent's defence was that its obligation to indemnify Steele had been discharged by the payments made by the Gummow ACJ Hayne Crennan appellant in satisfaction of the liabilities incurred by Steele. The appellant declined to participate in this proceeding. HIH and Steele were successful at first instance20. The Court of Appeal upheld the order for payment of contribution by the respondent in respect of the costs which HIH had paid, but otherwise the appeal was allowed in favour of the respondent, on the ground that the respondent's obligation to indemnify Steele had been discharged by the appellant's payments in respect of Steele under the contract between them21. Steele's application to this Court for special leave to appeal that decision was refused22. The second Victorian proceeding On 18 August 2008, the appellant brought proceedings against the respondent in the Supreme Court of Victoria, seeking equitable contribution in the sum of one half of all of the benefits it had paid in respect of Steele. The appellant failed both before the primary judge and on appeal to the Court of Appeal. Reasoning of the primary judge On 1 October 2009, Hollingworth J dismissed the appellant's claim, on the ground that the parties' respective liabilities were not co-ordinate23. Her Honour stated that it was inappropriate to construe the appellant's obligation to indemnify Steele as "founded in", or substantially equivalent to, HIH's obligation as insurer under the HIH policy24. Steele's assignment to the appellant of his rights under the HIH policy did not constitute an assignment by HIH of its legal obligations 20 HIH Casualty & General Insurance v Insurance Australia Ltd (2006) 14 ANZ Insurance Cases ¶61-685. 21 Insurance Australia Ltd v HIH Casualty & General Insurance Ltd (In liq) (2007) 18 VR 528 at 531 [9], 558-559 [172]-[178], 561 [191]. 22 Steele v Insurance Australia Ltd [2008] HCATrans 210. 23 HIH Claims Support Ltd v Insurance Australia Ltd (2009) 15 ANZ Insurance Cases ¶61-824 at 77,842 [138]. 24 HIH Claims Support Ltd v Insurance Australia Ltd (2009) 15 ANZ Insurance Cases ¶61-824 at 77,839-77,840 [107]-[114]. Gummow ACJ Hayne Crennan under that policy, and HIH remained liable to indemnify Steele25. Further, Steele's obligations under his contract with the appellant to provide all reasonable assistance with legal action, and to continue to comply with the HIH policy, merely allowed the appellant to benefit from Steele's equitable assignment rather than putting the appellant in HIH's position26. Finally, her Honour noted, the appellant was not liable to pay Steele the same benefit he would have been entitled to under the HIH policy: given that Steele had assigned to the appellant his right to recover in the liquidation of the HIH Group, the appellant might ultimately be reimbursed for some part of its payout in respect of Steele27. Therefore, Hollingworth J found that the appellant's liability to indemnify Steele arose solely from the independent contract it formed with Steele upon paying benefits in respect of him, and not from HIH's liability to Steele under the HIH policy28. Based on this analysis, the primary judge found that the respective liabilities of the appellant and the respondent were not co-ordinate, as they did not co-exist at the "relevant date"29. Consistently with the parties' agreement at the hearing, her Honour identified the relevant date as the date of the "insuring clause event"30, being 3 March 1998 (the date the scaffolding collapsed and damaged Screenco's screen). In her Honour's view, the appellant had no 25 HIH Claims Support Ltd v Insurance Australia Ltd (2009) 15 ANZ Insurance Cases ¶61-824 at 77,839 [110]-[111]. 26 HIH Claims Support Ltd v Insurance Australia Ltd (2009) 15 ANZ Insurance Cases ¶61-824 at 77,840 [122]. 27 HIH Claims Support Ltd v Insurance Australia Ltd (2009) 15 ANZ Insurance Cases ¶61-824 at 77,840-77,841 [124]. 28 HIH Claims Support Ltd v Insurance Australia Ltd (2009) 15 ANZ Insurance Cases ¶61-824 at 77,841 [126]. 29 HIH Claims Support Ltd v Insurance Australia Ltd (2009) 15 ANZ Insurance Cases ¶61-824 at 77,841 [127]-[128]. 30 Citing QBE Insurance (Australia) Ltd v Lumley General Insurance Ltd (2009) 24 VR 326 at 339-340 [65]-[69] and AMP Workers' Compensation Services (NSW) Ltd v QBE Insurance Ltd (2001) 53 NSWLR 35 at 39 [17]: HIH Claims Support Ltd v Insurance Australia Ltd (2009) 15 ANZ Insurance Cases ¶61-824 at Gummow ACJ Hayne Crennan indemnity obligation towards Steele on this date; the appellant did not even exist until 2001, and its indemnity contract with Steele only came into existence upon its payment of the first benefit in respect of him under the Scheme31. Accordingly, her Honour held, "there was simply no entitlement to contribution at the relevant date."32 In an obiter dictum, Hollingworth J also found that the appellant's liability to indemnify Steele was "primary in nature", whereas the respondent's obligation as insurer was "secondary in nature."33 Applying the reasoning of the Court of Appeal of the Supreme Court of Western Australia in Speno Rail Maintenance Australia Pty Ltd v Hamersley Iron Pty Ltd ("Speno")34, and of the House of Lords in Caledonia North Sea Ltd v British Telecommunications plc ("Caledonia")35, Hollingworth J stated that an obligation to indemnify under a contract of indemnity was ordinarily not co-ordinate with an obligation to indemnify under a contract of insurance36. If it had been necessary to decide, her Honour would have held that there was no evidence in this case displacing the general principle from Speno and Caledonia that the appellant's indemnity obligation was primary, the respondent's insurance liability was secondary and, therefore, the parties' liabilities were not co-ordinate37. 31 HIH Claims Support Ltd v Insurance Australia Ltd (2009) 15 ANZ Insurance Cases ¶61-824 at 77,841 [128]. 32 HIH Claims Support Ltd v Insurance Australia Ltd (2009) 15 ANZ Insurance Cases ¶61-824 at 77,841 [130]. 33 HIH Claims Support Ltd v Insurance Australia Ltd (2009) 15 ANZ Insurance Cases ¶61-824 at 77,842 [138]. 34 (2000) 23 WAR 291. 35 [2002] 1 Lloyd's Rep 553. 36 HIH Claims Support Ltd v Insurance Australia Ltd (2009) 15 ANZ Insurance Cases ¶61-824 at 77,841 [131]. 37 HIH Claims Support Ltd v Insurance Australia Ltd (2009) 15 ANZ Insurance Cases ¶61-824 at 77,842 [137]. Gummow ACJ Hayne Crennan Reasoning of the Court of Appeal On appeal, the central submission which the appellant made was that it "effectively stood in the shoes of HIH"38, thus replicating the circumstances where two insurance policies responded to a shared liability and orthodox principles of equity imposed a duty of contribution between the two insurers39. In dismissing the appeal, the Court of Appeal held that it was not necessary to decide whether the parties' liabilities were not co-ordinate on the basis that the appellant's liability was primary and the respondent's was secondary, because the appellant was not entitled to contribution for several other reasons40. First, their Honours stated, the liabilities for which the parties indemnified Steele were different41. Whilst both parties were obliged to indemnify Steele "in respect of his liability for the loss that occurred as a result of the screen being damaged in March 1998", the appellant's obligation was subject to the condition that Steele assign to the appellant his right to prove in the liquidation of HIH42. As postulated in the Offer to Assign, the appellant could ultimately receive an additional payment of "50 cents in the dollar" upon the winding up43. Secondly, the Court drew attention to the foundations of the doctrine of contribution in "notions of fairness, equity … and natural justice", implying that those principles did not require the intervention of equity on the facts of this case44. 38 A phrase familiar from use in the context of subrogation. 39 HIH Claims Support Ltd v Insurance Australia Ltd (2010) 16 ANZ Insurance Cases ¶61-863 at 78,500 [11]. 40 HIH Claims Support Ltd v Insurance Australia Ltd (2010) 16 ANZ Insurance Cases ¶61-863 at 78,501 [19]. 41 HIH Claims Support Ltd v Insurance Australia Ltd (2010) 16 ANZ Insurance Cases ¶61-863 at 78,501 [20]. 42 HIH Claims Support Ltd v Insurance Australia Ltd (2010) 16 ANZ Insurance Cases ¶61-863 at 78,501 [20]. 43 HIH Claims Support Ltd v Insurance Australia Ltd (2010) 16 ANZ Insurance Cases ¶61-863 at 78,501 [20]-[21]. 44 HIH Claims Support Ltd v Insurance Australia Ltd (2010) 16 ANZ Insurance Cases ¶61-863 at 78,501 [22]. Gummow ACJ Hayne Crennan Thirdly, Steele would not, in their Honours' view, have had "equal or substantially equal recourse" to both the appellant and the respondent, as required by the doctrine of contribution45. If Steele had been paid under the SGIC policy, no contract of indemnity would or could have come into existence between him and the appellant as "there would have been no occasion for him to make a claim on the [S]cheme"46. Accordingly, their Honours concluded that there was no "common interest", "common burden" or "common risk" in respect of the liabilities of the appellant and the respondent47. On 11 March 2011, a panel constituted by Heydon, Crennan and Bell JJ granted the appellant special leave to appeal to this Court. As the reasons which follow will show, the appeal should be dismissed. Submissions in this Court In this Court, the appellant essentially contended that the Court of Appeal erred in concluding that the relevant liabilities as between the appellant and Steele and between the respondent and Steele were not co-ordinate. The appellant characterised the facts as giving rise to double insurance in the sense described in Albion Insurance Co Ltd v Government Insurance Office (NSW) ("Albion")48. This was said to arise because it was uncontested that the HIH policy and the SGIC policy involved co-ordinate liability. Whilst that may be accepted, equity would only recognise and enforce a duty to contribute if a co-insurer, against whom such relief was sought, were solvent49. It was 45 HIH Claims Support Ltd v Insurance Australia Ltd (2010) 16 ANZ Insurance Cases ¶61-863 at 78,501-78,502 [23]. 46 HIH Claims Support Ltd v Insurance Australia Ltd (2010) 16 ANZ Insurance Cases ¶61-863 at 78,501-78,502 [23]. 47 HIH Claims Support Ltd v Insurance Australia Ltd (2010) 16 ANZ Insurance Cases ¶61-863 at 78,502 [24]. 48 (1969) 121 CLR 342; [1969] HCA 55. 49 Mahoney v McManus (1981) 180 CLR 370 at 376; [1981] HCA 54; Street v Retravision (NSW) Pty Ltd (1995) 56 FCR 588 at 597. Gummow ACJ Hayne Crennan submitted that the appellant was not an "officious intermeddler"50, making a payment which financially benefited the respondent; rather, the appellant had discharged a burden which was "in substance" the same burden shared by the respondent. It was further submitted by the appellant that it would be inequitable for the respondent to escape liability to contribute (to which it would have been exposed if HIH had not collapsed) just because the appellant had assumed responsibility for the insolvent insurer, not through novation or assignment from that insurer, but by way of assignment from the insured. The relationship between the appellant and the respondent was described as "a shared community of interest." The respondent supported the Court of Appeal's conclusion that the liabilities were not co-ordinate on the basis that it never shared a common burden with the appellant. In this context, the respondent relied on the fact that it could not have brought a claim against the appellant for contribution. It was contended that, if Steele had been paid under the SGIC policy, he would have had no claim against the appellant and no contract would have come into existence between Steele and the appellant. This was because of the way in which the Scheme was structured so that no enforceable obligation arose until a payment was actually made. It was said that the "mutuality" necessary for equitable contribution to arise did not exist between the appellant and the respondent. The respondent also filed a notice of contention, seeking to uphold the Court of Appeal's orders on the basis of submissions accepted by Hollingworth J; namely, that the parties did not have a common burden or obligation at the time of the "insuring clause event", and that the appellant's indemnity obligation was primary whereas the respondent's was secondary. That latter distinction has been referred to in the authorities51 as inimical to claims for equitable contribution on the basis that the requirement of a common burden or common obligation cannot be satisfied in such circumstances. The notice of contention was amended during oral hearing to add a third ground alleging that the constituent documents of the Scheme did not evince any intention that the appellant, as distinct from the HIH companies, should have rights of contribution in respect of payments made under the Scheme. 50 cf Falcke v Scottish Imperial Insurance Company (1886) 34 Ch D 234. 51 Street v Retravision (NSW) Pty Ltd (1995) 56 FCR 588 at 599-600; Speno (2000) 23 WAR 291 at 327 [167]-[168]; Caledonia [2002] 1 Lloyd's Rep 553 Gummow ACJ Hayne Crennan The principles of equitable contribution In Albion, Kitto J said the basic concept of contribution was longstanding52 and was "accepted by both law and equity as one of natural justice"53, expressed by ensuring equality between persons obliged in respect of a common obligation; although his Honour recognised that "the doctrine of equality operated more effectually in a court of equity"54. He described the basic principle thus: "persons who are under co-ordinate liabilities to make good the one loss … must share the burden pro rata."55 The rationale for equitable contribution was explained by Eyre LCB in Dering v Earl of Winchelsea56. Obligors (such as co-sureties) severally bound by different instruments in respect of the same liability, who may not even know of each other, have "a common interest, and a common burthen". It is because the charging of one surety in respect of the common obligation discharges the other that "each therefore ought to contribute to the onus."57 The equity of contribution does not apply between obligors where one of them is, in fact, a surety for a surety rather than a co-surety58. The nature or quality of the obligations is critical although the quantum of liability between co-obligors may vary59. 52 For example, the doctrine of average has been "repeatedly held to be a rule derived from the maritime law of Rhodes": Ruabon Steamship Company v London Assurance [1900] AC 6 at 10; see also Albion (1969) 121 CLR 342 at 350. 53 Albion (1969) 121 CLR 342 at 350. 54 Albion (1969) 121 CLR 342 at 351. 55 Albion (1969) 121 CLR 342 at 350. 56 (1787) 1 Cox 318 at 322-323 [29 ER 1184 at 1186]. 57 Reflecting the maxim "qui sentit commodum sentire debet et onus" – he who derives the advantage ought to sustain the burden – which merges in equity's more comprehensive rule "equity is equality", as to which see Broom, A Selection of Legal Maxims, 10th ed (1939) at 482-485. 58 Craythorne v Swinburne (1807) 14 Ves Jun 160 at 171 [33 ER 482 at 486]. 59 Albion (1969) 121 CLR 342 at 345-346; Government Insurance Office of New South Wales v Crowley [1975] 2 NSWLR 78 at 83. Gummow ACJ Hayne Crennan Co-ordinate liabilities are not involving co-sureties, or to double insurance where two insurers each have a secondary liability in respect of the same risk60; in the latter case "the two policies of insurance are treated as one insurance"61. to circumstances limited Given that natural justice, exemplified by equality, underpins the duty to contribute in respect of co-ordinate liabilities, the search for a common obligation "should not be defeated by too technical an approach"62. It is possible to have a common obligation where the obligation of each of two obligors has a different source, such as statute and contract, as occurred in BP Petroleum Development Ltd v Esso Petroleum Co Ltd ("BP Petroleum")63, provided the obligations can be characterised as "of the same nature and to the same extent"64. By way of contrast, the obligation of an indemnifier under a contract of services, and the obligation of an insurer which may cover the same event, have been held not to be obligations "of the same nature and to the same extent" because, as explained in Caledonia, liabilities incurred in tort, delict or contract are generally primary whereas the liability of an indemnity insurer to an injured In the Inner House decision upheld by the House of Lords in Caledonia, Lord Sutherland explained the rationale66: 60 As was the situation in Albion (1969) 121 CLR 342. 61 Commercial and General Insurance Co Ltd v Government Insurance Office (NSW) ("Commercial and General Insurance") (1973) 129 CLR 374 at 379; [1973] HCA 62 Mahoney v McManus (1981) 180 CLR 370 at 378. 63 1987 SLT 345. 64 1987 SLT 345 at 348 per Lord Ross, employing the expression of Lord Chelmsford in Caledonian Railway Company v Colt (1860) 3 Macq 833 at 844. 65 Caledonia [2002] 1 Lloyd's Rep 553 at 559 [13]-[14] and 560 [16] per Lord Bingham, 567 [62] per Lord Mackay, 572 [97] per Lord Hoffmann. 66 Caledonia North Sea Ltd v London Bridge Engineering Ltd 2000 SLT 1123 Gummow ACJ Hayne Crennan "Contribution …. is a two way exercise. You cannot have contribution from one without contribution from the other." As the requirement of co-ordinate liabilities is essential for the operation of the doctrine of equitable contribution between obligors, the duty to contribute is not based on "some general principle of justice, that a man ought not to get an advantage unless he pays for it."67 In Burke v LFOT Pty Ltd68, a purchaser of retail premises suffered loss arising out of misrepresentations made by the vendor which were actionable under the Trade Practices Act 1974 (Cth), and also loss arising from the negligence of one of the directors of the purchaser who acted as the solicitor in relation to the purchase. The vendor and one of its directors failed to obtain contribution from the solicitor because the liabilities were not, as in BP Petroleum, "of the same nature and to the same extent". Accordingly, they were not co-ordinate liabilities in respect of a common obligation69. The repayment to the purchaser by the vendor and its director of the difference between the price received and the true value of the premises did not command equity's intervention. The equitable doctrine that a duty to contribute applies where obligors are under a common burden or common obligation was restated by this Court in the plurality judgment in Friend v Brooker70: "With a claim to contribution, as is the position generally with the intervention of equity to apply its doctrines or to afford its remedies, the plaintiff must show the presence of 'an equity' founding the case for that intervention. The 'natural justice' in the provision of a remedy for 67 Ruabon Steamship Company v London Assurance [1900] AC 6 at 12 per Earl of Halsbury LC. For a more recent application of the same principle, see Cockburn v GIO Finance Ltd (No 2) (2001) 51 NSWLR 624 at 634 [42]-[43]. 68 (2002) 209 CLR 282; [2002] HCA 17. 69 Burke v LFOT Pty Ltd (2002) 209 CLR 282 at 292-293 [15] and 294 [19]-[22] per Gaudron ACJ and Hayne J, 303 [49]-[50] and 304 [52] per McHugh J, 336 [142]-[143] per Callinan J. 70 (2009) 239 CLR 129 at 148 [38]-[39] per French CJ, Gummow, Hayne and Bell JJ; [2009] HCA 21. Gummow ACJ Hayne Crennan contribution is the concern that the common exposure of the obligors (or 'debtors') to the obligee (or 'creditor') and the equality of burden should not be disturbed or be defeated by the accident or chance that the creditor has selected or may select one or some rather than all for recovery. … The equity to seek contribution arises because the exercise of the rights of the obligee or creditor ought not to disadvantage some of those bearing a common burden; the equity does not arise merely because all the obligors derive a benefit from a payment by one or more of them. As explained in United States authority, contribution is an attempt by equity to distribute equally, among those having a common obligation, the burden of performing it, so that without that common obligation there can be no claim for contribution." (footnotes omitted) The plurality went on to prefer the wider term "co-ordinate liabilities" said to subsume the expression "common obligation"71, and confirmed that "the doctrine is not enlivened merely because the claimant's payment operates to the financial benefit or relief of the other party."72 In that case, the first respondent, a director of a company, had claimed equitable contribution from a co-director in respect of loans he had made to the company, on the basis that the directors were parties to a common design to achieve a common end. The appellant successfully resisted the claim on the basis that the doctrine of equitable contribution should not be extended to "a common design" which would have the effect of "outflank[ing] the consequences of the selection by the parties of the corporate structure" for their business, which "brought with it the attendant legal doctrines of corporate personality and limited personal liability."73 The result confirms that equity will not intervene in the absence of a common legal burden or co-ordinate liabilities. The authorities show that no court has departed from the requirement that the equity to contribute depends on obligors bearing a common burden, the basis for co-ordinate liabilities in respect of the one loss. A proposition upon which the appellant wishes to rely – namely, that equity looks to substance rather than 71 Friend v Brooker (2009) 239 CLR 129 at 149 [41]. 72 Friend v Brooker (2009) 239 CLR 129 at 151 [48]; also cross-refer to note 67 above. 73 Friend v Brooker (2009) 239 CLR 129 at 161 [88] per French CJ, Gummow, Hayne and Bell JJ; see also at 154 [62] per the plurality, 161 [92] per Heydon J. Gummow ACJ Hayne Crennan form74 – has never been invoked successfully to achieve a departure from, or modification of, that requirement. In terms of the abovementioned authorities, it was argued for the appellant that the facts of this case justified a "controlled departure" from Lord Sutherland's conception that contribution "is a two way exercise", since the plurality in Friend v Brooker concentrated upon equity addressing the "disadvantage" an obligee might cause to an obligor75. However, as the passages quoted above show, the reference to "disadvantage" in Friend v Brooker is predicated on obligors bearing a common burden. Should equity intervene? The constituent documents of the Scheme show that the appellant was appointed by the Commonwealth as trustee, administrator and manager of a voluntary scheme, funded by public monies, and brought into existence for the relief of hardship of certain eligible holders of and beneficiaries under insurance policies with companies in the HIH Group. The voluntary nature of the Scheme does not necessarily preclude an equity of contribution, as a voluntary government assistance scheme which allowed double indemnification could give rise to equities76. However, a government assistance scheme designed to avoid double indemnification (as here) may have the opposite effect. In Burnand v Rodocanachi77, an underwriter, who had paid an insured on a valued policy of marine insurance, failed in a claim for compensation against the insured, who had also received payment from a compensation fund created by an Act of Congress of the United States. The scheme expressly excluded double indemnification by limiting payments from the compensation fund to the difference between the actual loss suffered by a cargo owner and any sum paid by an underwriter less than the actual loss. 74 Friend v Brooker (2009) 239 CLR 129 at 150 [47]. 75 Friend v Brooker (2009) 239 CLR 129 at 148 [39]. 76 Randal v Cockran (1748) 1 Ves Sen 98 [27 ER 916]; Blaauwpot v Da Costa (1758) 1 Eden 130 [28 ER 633]. See also Burnand v Rodocanachi (1882) 7 App Cas 333 at 337-338, 339-340, 342-343; Transport Accident Commission v CMT Construction of Metropolitan Tunnels (1988) 165 CLR 436 at 442; [1988] HCA 77 (1882) 7 App Cas 333. Gummow ACJ Hayne Crennan The assignment of the insured's rights, central to the Scheme, and made by Steele in this case, did not place the appellant in the same position as HIH either effectively or "in substance" as contended on behalf of the appellant. Under the Scheme, the appellant did not step into the shoes of HIH and become exposed to all the claims under policies issued by HIH and to contribution claims from co-insurers of HIH. Rather, the appellant stepped into the shoes of Steele, who had assigned his rights to the appellant, thereby entitling the appellant as assignee creditor to lodge a proof of debt in HIH's liquidation. That aspect of the Scheme, which applied to all eligible insureds, appeared to be fundamental to maximising recovery of public funds utilised for the purposes of the Scheme78. The obligations of the appellant to the insured Steele under the Scheme are not "of the same nature and to the same extent" as the obligation of the respondent in its capacity as co-insurer of HIH in respect of the insured's liability. First, there is no common interest or common burden between the appellant and the respondent because, if the respondent had paid Steele under its insurance policy before the appellant formed the contract between it and Steele by making payment under the Scheme, Steele would not have been an eligible person, as defined in the Appropriation Act79, and could not have satisfied the eligibility criteria80 for assistance under the Scheme. Steele and the appellant would never have entered into contractual obligations with each other and the possibility of double indemnification in respect of Steele's loss would not have arisen. Secondly, since the appellant undertook no enforceable obligations under the Scheme until a payment or the first in a series of payments was made, the 78 See the Minister's Second Reading Speech for the Appropriation (HIH Assistance) Bill 2001, Australia, House of Representatives, Parliamentary Debates (Hansard), 7 June 2001 at 27512: "In return for payment under the [S]cheme, claimants will have to assign all rights in connection with the claim to the Commonwealth government. The ultimate effect of this is that the Commonwealth government will become the largest single creditor of [the HIH companies]." 79 Section 3. 80 See the Commonwealth Management Agreement, cl 1.1, definition of "Eligibility Criteria"; media release dated 21 May 2001. Gummow ACJ Hayne Crennan respondent would never have had an opportunity to bring a claim for contribution against the appellant81. Thirdly, whilst it is true that the HIH policy of Steele is the factum upon which payment was made in respect of him under the Scheme, that the offer of assistance was conditional upon Steele's assignments of his rights under the HIH policy, covering events which had already occurred, means that the risk undertaken by the appellant could not be described as the same risk undertaken by the respondent. It could not be said that the appellant's contract to indemnify Steele, made after the HIH Group's insolvency, and coming into existence upon payment in respect of Steele, and the respondent's contract of insurance covering Steele were, to use this Court's expression in Commercial and General The respondent's ability to claim the benefit of satisfaction based on the appellant's payments in respect of Steele, when sued by Steele in the first Victorian proceeding, is not sufficient to substantiate a common burden on the appellant and the respondent. A "community of interest" between obligors is not a sufficient condition for the operation of an equity to contribute in circumstances where the obligations in question are qualitatively different, as they are here. Conclusions That the obligations of the appellant and the respondent are not "of the same nature and to the same extent" is reason enough to find that those obligations are not co-ordinate liabilities. The circumstances in which 90% of the liabilities incurred by Steele were paid by the appellant do not call for the intervention of equity. These conclusions make it unnecessary to deal with the respondent's amended notice of contention. 81 Theoretically, had the respondent made a payment to Steele, after the appellant assumed enforceable obligations to Steele also by making a payment, different considerations and equities might have arisen. 82 (1973) 129 CLR 374 at 379. Gummow ACJ Hayne Crennan Orders The appeal should be dismissed with costs. HEYDON J. The respondent's predecessor, SGIC General Insurance Limited ("SGIC"), insured Mr Steele against his liability to pay for the damage caused by his negligent construction of scaffolding. So did a company in the HIH group of insurance companies83. After HIH collapsed, the Federal Government, in order to indemnify people in the position of Mr Steele, set up the HIH Claims Support Scheme ("the Scheme"). The Scheme is administered by the appellant. In large measure, though not completely, Mr Steele was indemnified under the Scheme. One striking feature of the litigation is the determination with which the respondent has resisted indemnifying Mr Steele on its policy. The litigation exemplifies the teachings of ordinary litigious experience that insurers who are able to meet the liabilities which they have agreed to meet are often unwilling to do so, while those who are willing to meet them are often not able to do so. Here HIH found itself, after a time, unable to pay, though willing to do so. On the other hand, the respondent, though able to meet its liability to indemnify Mr Steele's obligation to pay for the damage caused by his negligence, has at all stages been unwilling to do so. In 2000 the respondent was asked to admit that Mr Steele was insured under the SGIC policy but evidently did not do so. It then denied the proposition that the policy responded by contending that three exclusions applied. It did this in different related proceedings ("the first Victorian proceedings"). On appeal in those proceedings it unsuccessfully attacked that Court's decision that those exclusions did not apply84. A second striking feature of the litigation is that normally where a person is insured by two insurers, the liquidation of the first operates adversely to the interests of the second by rendering it liable to indemnify the insured person completely, without having any effective recourse to contribution against the first insurer. Here a first insurer (HIH) went into liquidation, but on the reasoning of the Victorian Court of Appeal in the first Victorian proceedings, this did not result in a second insurer (the respondent) being liable to indemnify Mr Steele, because Mr Steele was substantially indemnified by the appellant. The respondent does not now dispute the proposition that if HIH had not gone into liquidation but had indemnified Mr Steele, it would have been liable to make contribution to HIH. The decision of the Federal Government to save insured persons in the position of Mr Steele from the risk of completely losing indemnity has absolved the respondent from fulfilling what would otherwise have been a just obligation to share the burden with HIH. The liquidation of HIH, instead of 83 It is convenient to refer to the company as "HIH" and to both the respondent and its predecessor as "the respondent". 84 Insurance Australia Ltd v HIH Casualty & General Insurance Ltd (In liq) (2007) leaving the respondent to bear the whole burden, has relieved it of the whole burden. A third striking feature of this litigation is the determination with which the respondent has, despite its stroke of good fortune to be found in the Federal Government's intervention, resisted paying anything towards alleviation of the appellant's burden of indemnifying Mr Steele, which, but for that intervention, it would have had to bear. One example85 is that in this Court, the respondent, by amending its notice of contention after the luncheon adjournment during the oral hearing, raised a contention it had not raised before either with the trial judge or the Court of Appeal, namely that the documents underpinning the Scheme did not "evince an intention that the appellant, as distinct from the HIH Companies, should have rights of contribution in respect of payments made by it under the the respondent's amendment may be Scheme". suspicious-minded to reveal a consciousness that the other points it relied on in defence of the happy position in which the Federal Government's generosity has adventitiously placed it are not valid. thought by The However that may be, in the end the respondent must prevail. The circumstances which throw up the present problem are certainly novel, for little can be found in the authorities that is analogous to a comparison of the rights of a trustee of a publicly funded trust dealing with the consequences of collapsed insurers, which has indemnified an insured person, and the rights of an insurer. Indeed, counsel for the appellant conceded that the appellant's position had "novelty", and that the law had to be developed if that position were to be accommodated. He submitted that the discharge by the appellant of HIH's obligation to Mr Steele constituted a benefit to the respondent which, in fairness, the law could not countenance the respondent keeping86. Novel though it is, the position advocated by counsel for the appellant is not at first sight without attraction. It prevents the respondent from making a gain it would not have made but for the Federal Government's intervention, and would not have made if the respondent had not resisted fulfilment of its duty to indemnify Mr Steele up to and well beyond the time when HIH became insolvent. Thus counsel for the appellant observed that the appellant had not 85 Another is narrated by the trial judge in the second Victorian proceedings, which have led to this appeal: HIH Claims Support Ltd v Insurance Australia Ltd (2009) 15 ANZ Insurance Cases ¶61-824 at 77,831-77,836 [39]-[82]. 86 He referred to Burke v LFOT Pty Ltd (2002) 209 CLR 282 at 300 [41] per McHugh J; [2002] HCA 17. merely discharged the respondent's burden, but had done so by reason of and according to the measure established by the HIH policy. On the other hand, the appellant's position is unattractive in one respect – particularly when presented by "counsel appearing for a trustee for the Commonwealth", as counsel for the appellant at one point described himself. Contribution is a remedy which rests on a type of mutuality. It prevents the position as between two persons under a liability to a third being different depending on which of the two the third proceeds against. If the first pays, it gets contribution from the second. If the second pays, it gets contribution from the first. In Friend v Brooker87 the plurality explained that if the doctrine of equitable contribution did not exist, "it would remain within the power of the creditor so to act as to cause one debtor to be relieved of a responsibility shared with another." That implies indifference to which debtor is relieved; it implies that the doctrine cannot apply unless each disadvantaged debtor has the same right against the advantaged debtor as the advantaged debtor would have had if it had not been advantaged, but disadvantaged. Counsel for the appellant submitted that this type of "mutuality" had never been held to be necessary for the operation of contribution, and that its absence did not bar the remedy. The principle, however, is something inherent in the notion of contribution. A rule of law that was inconsistent with the principle might be a rule, but it would not be a rule resting on contribution. The appellant accepted that if Mr Steele had claimed against the respondent first, and had been indemnified by the respondent, it would not have been open to the respondent to call on Mr Steele to pursue his other rights with a view to reducing the burden on it, and among those other rights was the right to make a claim against the appellant. It accepted that that was so if the Scheme did not contemplate payments for the benefit of co-insurers of HIH, but rather only contemplated payments to policyholders suffering financial hardship. On its true construction, the Scheme was of that character. The respondent would have been subrogated to any relevant right of Mr Steele, but Mr Steele would have ceased to have rights against the Scheme once he had been indemnified, and the right of the respondent, as party seeking to be subrogated, could not rise higher than the right to which it was seeking to be subrogated. The function of the Scheme appears to have been to permit recovery by insured persons in financial need. The function did not allow an insured person to be employed as a claimant in whose shoes an insurer could stand once the insurer had indemnified the insured person. And just as the respondent could have no right of subrogation, it could have no right of contribution either. The appellant submitted that there might be a narrow instance, where the claim of an insured person had been accepted but 87 (2009) 239 CLR 129 at 148 [38] per French CJ, Gummow, Hayne and Bell JJ; [2009] HCA 21 (footnote omitted). not paid by the appellant, and where the respondent then paid, in which the respondent might have a claim to compel the appellant to pay contribution: but that was not the present case. In short, if Mr Steele had proceeded against the respondent, the respondent could not have had contribution rights against the appellant, because the appellant was not an insurer of Mr Steele, and the respondent was not eligible to claim under the Scheme. Because Mr Steele made a successful claim on the appellant first, the appellant seeks contribution from the respondent. But the appellant could not point to any way in which, if Mr Steele had proceeded against the respondent could equivalently obtain contribution from it. If the respondent had satisfied Mr Steele's claim, it would have been left bearing the whole loss. the respondent first, The appellant ought not to succeed unless this mutuality difficulty can be overcome. Although the difficulty was debated in argument frequently and at length, the appellant could not resolve it. It contended that if it lost this appeal, there would be a windfall to the respondent. But if the respondent had paid under its policy with Mr Steele first, this would have led to a "windfall" in relation to the Scheme because it was beyond the appellant's power to make contribution to the respondent. That it was the appellant who, having satisfied Mr Steele's claim in large measure, is left to bear the loss to that extent may point to a feature which is either an anomalous feature in the Scheme or a feature of it having the function of minimising litigation. It does not point to any reason for developing the doctrine of contribution to overcome the appellant's difficulty. In those circumstances the law should not be developed so as to benefit the appellant in the circumstances in which it finds itself. To do so would not be to develop the law relating to contribution, but to revolutionise it. It would be a revolution having the tendency to produce idiosyncratic and uncertain results. This appeal must be dismissed with costs.

HIGH COURT OF AUSTRALIA (AN INFANT BY HER NEXT FRIEND AND COMMONWEALTH OF AUSTRALIA & ANOR RESPONDENTS Koroitamana v Commonwealth of Australia [2006] HCA 28 14 June 2006 ORDER Special leave to appeal granted. Appeal treated as instituted and heard instanter but dismissed with costs. On appeal from the Federal Court of Australia Representation R C Kenzie QC with S E J Prince for the applicants (instructed by Michaela Byers) D M J Bennett QC, Solicitor-General of the Commonwealth of Australia with M A Perry QC and K C Morgan for the respondents (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Koroitamana v Commonwealth of Australia Constitutional Law – Naturalization and aliens – Meaning of "aliens" – Children born in Australia to parents who were neither Australian citizens nor permanent residents – Children entitled to acquire foreign citizenship by registration – Whether children are "aliens" within the meaning of s 51(xix) of the Constitution – Whether children are nationals of Australia for constitutional purposes. Constitutional Law – Construction and interpretation – Meaning of "aliens" – Relevance of possible statelessness to status of child – Whether Convention on the Reduction of Statelessness and other provisions of international law relevant. Citizenship, immigration and emigration – Detention and removal of unlawful non- citizens from Australia – Meaning of "aliens" – Children born in Australia to parents who were neither Australian citizens nor permanent residents – Children entitled to acquire foreign citizenship by registration – Provisions of Australian Citizenship Act 1948 (Cth) relating to stateless persons not alleged to be engaged – Status of children. Words and phrases – "aliens". Constitution, s 51(xix). Australian Citizenship Act 1948 (Cth), ss 10(2), 23D. Migration Act 1958 (Cth), ss 189, 198. GLEESON CJ AND HEYDON J. The applicants were born in Australia in 1998 and 2000. Their parents are citizens of Fiji. Under the Constitution of Fiji, the applicants may become citizens of Fiji by registration, but no application for registration has been made by them or on their behalf. Neither applicant is an Australian citizen. They have not resided in Australia for the period of 10 years required by s 10(2)(b) of the Australian Citizenship Act 1948 (Cth) ("the Citizenship Act"). The applicants both hold bridging visas. Such visas are subject to monthly reporting requirements and requirements of renewal. The applicants commenced these proceedings to challenge the validity of s 198 of the Migration Act 1958 (Cth) ("the Migration Act") (which provides for the removal of unlawful non-citizens, that is, non-citizens who do not have permission to be or remain in Australia), and s 189 of the same Act (which provides for detention of unlawful non-citizens) in their application to the applicants. Being non-citizens, the applicants would become unlawful non- citizens if their bridging visas were not renewed. The argument has been conducted on the basis that the validity of ss 189 and 198 of the Migration Act, in their application to the applicants, depends upon whether it is within the power of the Parliament to enact legislation which treats the applicants as aliens within the meaning of s 51(xix) of the Constitution. The applicants claim that the power to make laws with respect to "naturalization and aliens" does not extend to a power to treat them as aliens. The proceedings came before Emmett J in the Federal Court of Australia. He stated a case for the consideration of a Full Court, reserving the following questions: (1) Are the applicants "aliens" within the meaning of s 51(xix) of the Constitution? If the answer to (1) is "No", is s 198 of the Migration Act 1958 (Cth) capable of valid application to the applicants? If the answer to (1) is "No", are ss 189 and 198 of the Migration Act 1958 (Cth) capable of valid application to the applicants? The Full Court (Black CJ, Conti and Allsop JJ) answered the first question in the affirmative and held that the second and third questions did not arise1. The Full Court considered that, although the facts were not identical, the outcome of 1 Koroitamana v Commonwealth (2005) 142 FCR 391. the case was dictated by the reasoning of the majority of this Court in Singh v The case stated by Emmett J included the following paragraphs: Pursuant to s 12(1) of the Constitution of the Fiji Islands ('Fiji'), as amended on 25 July 1997, a child born outside Fiji on or after the date of commencement of the Constitution may become a citizen by registration if, at the date of the child's birth, either parent was a citizen of Fiji. The mother of both applicants is Sereana Naikelekele. The applicants' mother was a citizen of Fiji at the time of the birth of each applicant, and continues to have that status. The applicants' mother was neither an Australian citizen nor a permanent resident at any time. The father of both applicants is Maika Koroitamana. The applicants' father was also a citizen of Fiji at the time of the birth of each applicant, and continues to have that status. The applicants' father was neither an Australian citizen nor a permanent resident at any time. Neither applicant is a citizen of Fiji as neither applicant has been registered with the Fijian authorities for the purposes of s 12(1) of the Constitution of Fiji. The applicants' parents do not wish or intend to register the applicants, or either one of them, with the Fijian authorities. Neither applicant is a citizen of any other country." Annexed to the case stated was s 12 of the Fijian Constitution. It provides that a child born outside Fiji may become a citizen by registration if, at the child's birth, either parent was a citizen. An application for registration may be made at any time during the child's lifetime and, if he or she is under 21 at the date of the application, may be made on his or her behalf by a parent or guardian. The state of Fijian law for purposes of the decision in this case is a matter of fact. The factual information before the Full Court was as set out above. There is no reason why it should not be accepted at face value. In particular, there is no reason to doubt that, if it be relevant, the applicants have a right to become citizens of Fiji by registration upon application made on their behalf while they are under 21, or upon application made by them at any time thereafter. The relevance of that information is a subject to which it will be necessary to return. (2004) 78 ALJR 1383; 209 ALR 355. The applicants have sought special leave to appeal from the decision of the Full Court. That application has been referred to a Full Court of this Court, and has been argued fully as on an appeal. The present case and Singh are not factually identical, and there was argument about the extent to which the decision in Singh left open issues of significance for this case. Two things, however, are clear. First, Singh decided that birth in Australia does not of itself mean that a person is beyond the reach of the power conferred on the Parliament by s 51(xix). The applicants cannot claim, and do not claim, that, solely because they were born in Australia, it is beyond the power of Parliament to treat them as aliens. Such a suggestion was expressly disclaimed in argument. This was no more than an acknowledgment of the effect of the decision in Singh. In that case the Court held that birth within Australia does not necessarily mean that a person is not, and cannot be treated by Parliament as, an alien3. Secondly, all the Justices who were in the majority in Singh rejected the proposition that, at the time of federation, the concept of alienage had an established and immutable legal meaning that deprived Parliament of any substantial room for legislative choice in the matter4. On the contrary, "questions of nationality, allegiance and alienage were matters on which there were changing and developing policies, and which were seen as appropriate for parliamentary resolution"5. Internationally, two theories, one of which attached controlling importance to descent, and one of which attached controlling importance to place of birth, competed for acceptance. The Constitution did not commit Australia to uncompromising adherence to either theory. The applicants' parents are foreign nationals, being citizens of Fiji. The applicants were born in Australia, but are not Australian citizens. Counsel for the applicants and the respondents joined in submitting (although for different reasons) that those are the only relevant facts. Counsel for the applicants says that the right of the applicants to obtain Fijian citizenship by registration is irrelevant, because they have not (or at least, not yet) exercised that right. Counsel for the respondents says that it would make no difference to the outcome of the case if they had no such right. If in that circumstance they would (2004) 78 ALJR 1383 at 1384-1386 [3]-[11], 1416 [146], 1427 [204]-[205], 1427 [207], 1438 [272]; 209 ALR 355 at 357-360, 400, 416, 432. (2004) 78 ALJR 1383 at 1391-1392 [30], 1424 [190], 1435 [252]; 209 ALR 355 at (2004) 78 ALJR 1383 at 1391-1392 [30]; 209 ALR 355 at 366. otherwise be stateless, then there may be consequences under s 23D of the Citizenship Act, but that is not presently in question. On the approach that was adopted by the parties, the difference between the present case and Singh is that in Singh it was common ground in argument that the plaintiff was a citizen of India by descent from her parents whereas the applicants in this case are not citizens of Fiji6. The similarity, of course, is that the parents of the applicants, like the parents of the plaintiff in Singh, are citizens of a foreign country. The power conferred by s 51(xix) is a wide power, under which the Parliament has the capacity to decide who will be admitted to formal membership of the Australian community, which now means citizenship7. Within the limits of the concept of "alien" in s 51(xix), it is for Parliament to decide who will be treated as having the status of alienage, who will be treated as citizens, and what the status of alienage, or non-citizenship, will entail8. The concept of "alien" does not exclude persons born in Australia, where they are children of parents who are foreign nationals. In Pochi v Macphee9 Gibbs CJ said: "Clearly the Parliament cannot, simply by giving its own definition of 'alien', expand the power under s 51(xix) to include persons who could not possibly answer the description of 'aliens' in the ordinary understanding of the word." The argument for the applicants was that, in the ordinary understanding of the word "alien", a person born within Australia could not possibly answer the description unless a further characteristic, of which foreign allegiance was the clearest example, could be shown to exist. Hence the significance sought to be attached to the difference from the facts in Singh. As the facts of the present case show, this produces a curious consequence. If the argument be correct, the capacity of Parliament to decide whether the applicants may be admitted to Australian citizenship, and the conditions under which that will occur, depends upon the choice of the parents of the applicants as to whether to register them as Fijian citizens. It appears to involve "a considerable fetter on the power of the (2004) 78 ALJR 1383 at 1416 [142]; 209 ALR 355 at 400. 7 Re The Minister for Immigration and Multicultural Affairs; Ex parte Te (2002) 212 CLR 162 at 171 [24]. 8 Singh v Commonwealth (2004) 78 ALJR 1383 at 1384-1385 [4]; 209 ALR 355 at (1982) 151 CLR 101 at 109. federal Parliament to identify those who are to be treated, whether for domestic or international purposes, as nationals of Australia"10. Regard may be had to the variety of circumstances in which a child of foreign nationals may be born in Australia. The parents may be in Australia unlawfully, or for a brief visit, or even unintentionally. They may be in transit to another destination. They may be here for temporary purposes of a business or personal nature. Once one rejects the notion that birth in Australia (except in the case of children of foreign diplomats and members of armed forces) necessarily results in membership of the Australian community, then it is a short step to the conclusion that it is open to Parliament to decide that a child born in Australia of parents who are foreign nationals is not automatically entitled to such membership. It cannot be said of such a person that he or she could not possibly answer the description of alien. It may be added that if, as the applicants assert, their right to obtain Fijian citizenship by registration is irrelevant to their legal status for present purposes, and since the mere fact of birth in Australia does not entitle them to membership of the Australian community, the consequence may be that they are stateless. Reference has already been made to s 23D of the Citizenship Act. It was not argued that Australia is in any presently relevant respect in default in its international obligations towards stateless persons. Subject to the impact of any such obligations, it is open to Parliament to treat a stateless person as an alien11. The applicants appear to accept that, but say they are not stateless because they were born in Australia and, since they owe no allegiance to Fiji, they cannot be treated in Australia as aliens. The argument becomes circular. The decision of the Full Court of the Federal Court was correct. Special leave to appeal should be granted and the appeal should be dismissed with costs. 10 Singh v Commonwealth (2004) 78 ALJR 1383 at 1425 [193]; 209 ALR 355 at 413. 11 Al-Kateb v Godwin (2004) 219 CLR 562 at 571 [1]. Crennan GUMMOW, HAYNE AND CRENNAN JJ. The applicants are infants who sue by their next friend. The first applicant was born in Australia on 26 August 2000 and has remained in this country continuously since her birth. The second applicant also was born in Australia. Since her birth on 3 September 1998, she has remained continuously in Australia. The applicants are siblings. They have three siblings, each of whom is an Australian citizen. The parents of the applicants were citizens of the Republic of the Fiji Islands ("Fiji") at the time of the birth of each applicant. The parents continue to have that status. Neither is or has been an Australian citizen or a permanent resident. The Migration Act 1958 (Cth) ("the Migration Act") has been administered on the footing that the applicants are not Australian citizens and that this is by reason of their failure to satisfy the criteria in s 10 of the Australian Citizenship Act 1948 (Cth) ("the Citizenship Act") for the acquisition of Australian citizenship by birth. The applicants were placed in immigration detention after they were detained in reliance upon s 189 of the Migration Act. They apprehended their removal from Australia under s 198 of the Migration Act, each as "an unlawful non-citizen". The provisions in ss 13 and 14 of the Migration Act defining respectively "lawful non-citizens" and "unlawful non-citizens" turn upon the status of a person who is not an Australian citizen. The applicants commenced against the respondents proceedings in the Federal Court under s 39B of the Judiciary Act 1903 (Cth). A case was stated for the consideration of a Full Court under s 25(6) of the Federal Court of Australia Act 1976 (Cth). The questions reserved were answered by Black CJ, Conti and Allsop JJ adversely to the applicants' interests12. From that decision, special leave is sought to appeal to this Court. The application has been fully argued as on an appeal. For the reasons which follow, special leave should be granted but the appeal should be dismissed. Paragraphs 3 and 6 of the case stated to the Full Court of the Federal Court are in the following terms: Pursuant to s 12(1) of the Constitution of the Fiji Islands ('Fiji'), as amended on 25 July 1997, a child born outside Fiji on or after the date of commencement of the Constitution may become a citizen by registration if, at the date of the child's birth, either parent was a citizen of Fiji. 12 Koroitamana v Commonwealth (2005) 142 FCR 391. Crennan Neither applicant is a citizen of Fiji as neither applicant has been registered with the Fijian authorities for the purposes of s 12(1) of the Constitution of Fiji. The applicants' parents do not wish or intend to register the applicants, or either one of them, with the Fijian authorities. Neither applicant is a citizen of any other country." Neither applicant satisfies the criteria found in s 10 of the Citizenship Act for the acquisition of Australian citizenship by birth. Section 10 is found in Div 1 of Pt III of the Citizenship Act. Section 10A confers citizenship upon certain persons who are adopted by at least one Australian citizen. Section 10B is a general provision for the acquisition upon registration of citizenship by descent of certain persons born outside Australia. Part III is headed "Australian citizenship", and deals with "Citizenship by birth, adoption or descent" (Div 1, ss 10-11), "Grant of Australian citizenship" (Div 2, ss 12-15), and "Loss of citizenship" (Div 4, ss 18-23B). Division 5 includes in s 23D special provisions to prevent certain persons being stateless. Further reference will be made to s 23D. It should be emphasised that this litigation raises no issue respecting the grant of certificates of citizenship to those who become citizens by processes of naturalisation (Div 2). Nor does any issue arise under Div 4. This deals with various matters including the loss of citizenship by renunciation and deprivation of citizenship acquired by naturalisation, and also with the resumption of citizenship in some circumstances. Section 10, which is the critical provision for these applications, states: "(1) Subject to this section, a person born in Australia after the commencement of this Act shall be an Australian citizen. Subject to subsection (3), a person born in Australia after the commencement of the Australian Citizenship Amendment Act 1986 [(Cth)] shall be an Australian citizen by virtue of that birth if and only if: a parent of the person was, at the time of the person's birth, an Australian citizen or a permanent resident; or the person has, the period of 10 years commencing on the day on which the person was born, been ordinarily resident in Australia. throughout Crennan Subject to subsection (5), a person shall not be an Australian citizen by virtue of this section if, at the time of the person's birth, a parent of the person was an enemy alien and the birth occurred in a place then under occupation by the enemy. Subsection (3) does not apply in relation to a person if, at the time of the person's birth, a parent of the person: (a) was an Australian citizen or a permanent resident; and (b) was not an enemy alien. (6) A reference in this section to a permanent resident does not include a reference to a person who is, for the purposes of the Migration Act 1958 [(Cth)], an exempt non-citizen." The reference in par (a) of s 10(2) to a parent who is "a permanent resident" is to be read with s 5A. This requires certain persons who are not Australian citizens to be taken to be permanent residents for the purposes of the Citizenship Act. It is common ground that s 5A does not advance the position of either parent of the present applicants with respect to the operation of par (a) of s 10(2). Nor does par (b) of s 10(2) apply to the circumstances of the applicants. The focus of oral submissions in this Court was upon par (a) of s 10(2). In fixing upon criteria both of place of birth and of descent, this provision represents a particular combination of the doctrines of the ius soli and ius sanguinis. The significance attached to these two theoretical bases of nationality law during the nineteenth century and at the time of the adoption of the Constitution was considered in Singh v The Commonwealth13. Singh is authority at least for the propositions that (i) the common law of England respecting alienage as understood in 1900 does not mark the boundaries of the power conferred by s 51(xix)14; (ii) it is not an essential characteristic of the "aliens" referred to in s 51(xix) of the Constitution that they be born outside Australia; and (iii) the Parliament might treat as an "alien" a person born in 13 (2004) 78 ALJR 1383 at 1391-1392 [30], 1422-1423 [178]-[184], 1435-1436 [253]; 209 ALR 355 at 366-367, 409-410, 428. 14 Singh v The Commonwealth (2004) 78 ALJR 1383 at 1391-1392 [30], 1419 [162], 1426 [200], 1437-1438 [266]; 209 ALR 355 at 366-367, 404, 414, 431. Crennan Australia with a foreign citizenship derived from that of the parents of that However, the applicants denied that they were within the reach of the legislative power conferred by s 51(xix) of the Constitution for the Parliament to make laws with respect to "Naturalization and aliens". The applicants submitted that (i) a person born in Australia and having then no other "relevant characteristic" cannot be treated by the Parliament as an alien; and (ii) they had no such relevant characteristic. The applicants accepted that the possession of a foreign nationality or allegiance would be such a relevant characteristic and that this was established by Singh. But, the submission continued, the applicants, notwithstanding the terms of pars 3 and 6 of the stated case, could not be classified for this purpose as Fijian nationals; it was not to the point that upon registration they would become citizens of Fiji. The applicants also accepted that, if "stateless", they would have a relevant characteristic rendering them objects of the exercise of the aliens power. However, they denied they were stateless. The critical submission for their case was that they were not stateless because they were born in Australia and members of the Australian community in the sense described by McHugh J in his dissenting in Singh, where he also spoke of "constitutional citizenship"16. judgment The applicants continued that the circumstance that they were born to parents of Fijian nationality was not a relevant characteristic. The aliens power would not support a law that defined aliens purely by descent, at least where there was no allegiance to the state of that descent. Further, where, as here, the individuals in question had not yet done anything to dissociate themselves from the Australian community, the status otherwise conferred by the ius soli could not be denied by reference to the nationality of their parents. The effect of the submissions was that the provision in s 10(2) of the Citizenship Act, adding as a criterion for Australian citizenship by birth in 15 Singh v The Commonwealth (2004) 78 ALJR 1383 at 1386 [11], 1392 [32], 1427 [203]-[205], 1438 [272]; 209 ALR 355 at 359-360, 367, 415-416, 432. 16 (2004) 78 ALJR 1383 at 1406-1407 [99]-[100], 1415 [139]; 209 ALR 355 at 387-388, 399. See also (2004) 78 ALJR 1383 at 1446-1447 [317] per Callinan J; 209 ALR 355 at 443-444. Crennan Australia that at least one parent was at that time an Australian citizen, was invalid in its application to the circumstances of the applicants. The result was that they were not "unlawful non-citizens" for the purposes of s 189 and s 198 of the Migration Act and the Full Court had erred in deciding to the contrary. The applicants had been born in Australia and at birth owed no allegiance to a foreign power and had not dissociated themselves from the Australian community. That sufficed to deny the application to them of the power conferred by s 51(xix) of the Constitution and rendered beyond power the superadded legislative requirement respecting the parental status. In their submissions, the applicants were anxious to avoid classification as stateless persons. This was because of indications in Al-Kateb v Godwin17 and Singh that such persons, as aliens, may be the subject of the legislative power conferred by s 51(xix). On the other hand, the respondents eschewed any reliance upon what was disclosed by the case stated to the Full Court as denying statelessness by reason of an entitlement of the applicants to acquire Fijian citizenship by registration. This was because, on the respondents' submissions, it was enough to support a law made in reliance upon s 51(xix) that it provided as criteria for the acquisition of citizenship at birth the combination of elements of place of birth and descent found in s 10(2)(a) of the Citizenship Act. In particular, and more broadly, the respondents submitted that the applicants were within the class of persons whom the Parliament was entitled to consider aliens because, semble, they were not born in Australia to Australian parents. It will be necessary to return to these submissions by the respondents. But first something more should be said respecting the concept of statelessness and the position of the applicants. The aftermath of World War the passage of mass "denationalisation" laws, particularly by the Soviet Union18. Even before that saw 17 (2004) 219 CLR 562 at 571 [1]. 18 See Williams, "Denationalization", (1927) 8 The British Year Book of International Law 45 at 46, where it is said that some two million people were deprived of their nationality by these laws. See as to the laws of Nazi Germany, Oppenheimer v Cattermole [1976] AC 249; Abel, "Denationalization", (1942) 6 Modern Law Review 57 at 59-61. Crennan turn of events, it had been apparent that persons even at birth might be stateless19 and thus lack the principal link by which they could derive benefits under international law from State protection. This could be a consequence of differing systems for nationality, based on the ius soli and the ius sanguinis. It is said in Oppenheim's International Law20: individual may be without nationality knowingly or unknowingly, intentionally or through no fault of his own. Even by birth a person may be stateless, as where an illegitimate child is born in a state which does not apply ius soli to an alien mother under whose national law the child does not acquire her nationality, or where a legitimate child is born in such a state to parents who have no nationality themselves." The English common law was slow to recognise the significance of statelessness and its treatment for the purposes of alienage21. However, in 1921, "The dearth of direct authority in English law upon this point is not to be wondered at. In truth the question of statelessness can have seldom arisen as an important or practical question. The division into subjects and aliens is clear and sufficient for the ordinary purposes of the common law; and the stateless person would be one of the aliens. But the present case has raised the question, and, upon consideration of the arguments addressed to me and the statutory enactments before referred to, I hold that the condition of a stateless person is not a condition unrecognized by the municipal law of this country." The objects of the power conferred by s 51(xix) of the Constitution thus may properly be seen to include as aliens those who are stateless persons of no nationality or who are, at least, ineligible to acquire a nationality. The Citizenship Act makes special provision to prevent persons being stateless where they have been born in Australia but are not Australian citizens. 19 Loewenfeld, "Status of Stateless Persons", (1941) 27 Transactions of the Grotius Society 59 at 60. 20 9th ed (1992), vol 1, §396. 21 Al-Kateb v Godwin (2004) 219 CLR 562 at 596 [80]; Parry (ed), A British Digest of International Law, (1965), vol 6 at 3. 22 Stoeck v Public Trustee [1921] 2 Ch 67 at 81-82. Crennan The side note to s 23D of the Citizenship Act reads "Special provisions to prevent persons being stateless". Section 23D(1) states: "The Minister shall, upon application made in accordance with the approved form for the grant of Australian citizenship to a person under this subsection and if the Minister is satisfied that the person: (a) was born in Australia; is not, and has never been, a citizen of any country; and is not, and has never been, entitled to acquire the citizenship of a foreign country; register that person as prescribed as an Australian citizen, and the person is an Australian citizen as from the date upon which the registration is effected." The criterion in par (c) of s 23D(1) respecting entitlement to acquire the citizenship of a foreign country is further explained in s 23D(1A). This states: "Where the Minister is satisfied that a person has or had reasonable prospects, at a particular time, of acquiring the citizenship of a foreign country if the person were to apply, or to have applied, at that time for the grant of such citizenship, the person shall be taken, for the purposes of subsection (1), to be or to have been entitled to acquire the citizenship of that country at that time." Section 23D assumed its form as presently relevant after the enactment of the Australian Citizenship Amendment Act 1986 (Cth). On the Second Reading Speech in the House of Representatives on the Bill for that Act, the responsible Minister referred to amendments to s 10 of the Citizenship Act designed to produce the result, as it now stands, that automatic citizenship is restricted to a child born in Australia who has one parent who is either an Australian citizen or a permanent resident at the time of the child's birth23. The Minister continued24: 23 Australia, House of Representatives, Parliamentary Debates (Hansard), 19 February 1986 at 868. 24 Australia, House of Representatives, Parliamentary Debates (Hansard), 19 February 1986 at 868. Crennan "Clause 8 of the Bill [which amended s 23D of the Citizenship Act] will ensure that a child born in Australia, who is not eligible to acquire Australian citizenship by birth, is an Australian citizen provided the child is not and never had been eligible to acquire the nationality or citizenship of another country. This will fulfil Australia's international obligations to prevent statelessness." It will be apparent that, the external affairs power conferred by s 51(xxix) apart, such a law also, in so far as it alters what otherwise would be their status, is a law with respect to aliens. The reference by the Minister to international obligations appears to have been to Art 1 of the Convention on the Reduction of Statelessness ("the Convention")25, which was done at New York on 30 August 1961 and entered into force for Australia on 13 December 1975. Article 1(1) of the Convention reads: "A Contracting State shall grant its nationality to a person born in its territory who would otherwise be stateless. Such nationality shall be granted: at birth, by operation of law, or upon an application being lodged with the appropriate authority, by or on behalf of the person concerned, in the manner prescribed by the national law. Subject to the provisions of paragraph 2 of this Article, no such application may be rejected[26]. 25 Australian Treaty Series, (1975), No 46. 26 Paragraph (2) of Art 1 states: "A Contracting State may make the grant of its nationality in accordance with sub-paragraph (b) of paragraph 1 of this Article subject to one or more of the following conditions: (a) that the application is lodged during a period, fixed by the Contracting State, beginning not later than at the age of eighteen years and ending not earlier than at the age of twenty-one years, so, however, that the person concerned shall be allowed at least one year during which he may himself make the application without having to obtain legal authorization to do so; (Footnote continues on next page) Crennan A Contracting State which provides for the grant of its nationality in accordance with sub-paragraph (b) of this paragraph may also provide for the grant of its nationality by operation of law at such age and subject to such conditions as may be prescribed by the national law." If the applicants fail in their submission that they are not stateless because of what they assert is the constitutional consequence of their birth in Australia, they would, on their submission, be considered stateless. That, they concede, would be sufficient to attract to them the exercise of the power conferred by s 51(xix) and to support s 10(2)(a) of the Citizenship Act. The question would then arise as to the applicability of s 23D. That in turn would require attention to the position of the applicants with respect to the law of Fiji. The issue would arise as to whether, given the terms of the case stated, the applicants fall outside s 23D because, in the terms of par (c) of s 23D(1), the Minister could not be satisfied that they are not entitled to acquire the citizenship of a foreign country. In any event, no application has been made under s 23D and it will be unnecessary for this appeal further to consider s 23D. It is convenient now to return to the critical submission made by the applicants concerning Australian "constitutional citizenship". There is support in the decisions of this Court neither for the "constitutional citizenship" of those born in Australia, nor for the retention of that character until supervening dissociation with the Australian community by the constitutional citizen. The applicants could point to no authority for those propositions. That absence of authority is not surprising because to accept the applicants' argument would cut across the now settled position that it is for the (b) that the person concerned has habitually resided in the territory of the Contracting State for such period as may be fixed by that State, not exceeding five years immediately preceding the lodging of the application nor ten years in all; (c) that the person concerned has neither been convicted of an offence against national security nor has been sentenced to imprisonment for a term of five years or more on a criminal charge; (d) that the person concerned has always been stateless." Crennan Parliament, relying upon par (xix) of s 51 of the Constitution, to create and define the concept of Australian citizenship27. The consequence is that, on the terms of their own case, the applicants were born stateless and this was a relevant characteristic then rendering them aliens. That is a sufficient basis to dismiss the appeal. However, another submission by the applicants also should be expressly rejected. This was that, in the circumstances of this case, the Fijian nationality of their parents could not be a "relevant characteristic", at least where the applicants as yet owed no allegiance to Fiji. The combination of criteria of place of birth and of descent found in par (a) of s 10(2) of the Citizenship Act is an instance of the subsequent legislative working out of the cross-currents between the approaches to concepts of alienage and citizenship understood in 1900. We return to the respondents' submissions. It is unnecessary to express any view upon the respondents' submissions in their broadest form. This was that it was sufficient to attract the aliens power that a person was not born in Australia to Australian parents. No issue arises here respecting the status conferred by naturalisation nor respecting loss of citizenship with or without "denationalisation" as mentioned earlier in these reasons. Nor, given the presence of s 23D of the Citizenship Act, and the form of the case stated, is it necessary to consider any operation of the respondents' submissions to render persons born in Australia stateless. Special leave should be granted, but the appeal should be dismissed with costs. 27 Re Minister for Immigration and Multicultural Affairs; Ex parte Te (2002) 212 CLR 162 at 173 [31], 180 [58], 188-189 [90], 192 [108]-[109], 215-216 [193]- Kirby KIRBY J. This is the latest in a series of cases in which this Court has been asked to clarify the meaning of the constitutional notion of alienage28 and its antonym, the constitutional notion of Australian nationality. Citizenship, alienage and nationality In Australia, nationality is not expressed in the Constitution in terms of citizenship. Although the notion of citizenship is referred to in the Constitution for limited purposes, nationality, for historical reasons prevailing at the time the Constitution was adopted, connoted a different idea. Originally, that idea involved the status of being a "British subject". That was the nationality status generally operating throughout the British Empire in 1900, including in Australia29. When the Constitution was adopted, citizenship was commonly regarded as a notion apt for republics and not for membership of the community of a constitutional monarchy, such as Australia. Citizenship is thus a later statutory notion in Australia. It was first introduced by the Nationality and Citizenship Act 1948 (Cth)30. For a time, the status of being a "British subject" and an "Australian citizen" continued side by side31. Now citizenship stands alone in the federal statute book. Because of the evolution of the statutory expression of citizenship, and the gradual emergence of ideas of national independence and a distinctive national identity in Australia, it is easy to confuse the statutory status of citizenship with the constitutional status of nationality. In the Constitution, nationality is reflected expressly in provisions governing the qualification necessary to be elected to the Federal Parliament32; disqualification from holding such an office33 28 Constitution, s 51(xix) (Naturalization and aliens). 29 Rubenstein, Australian Citizenship Law in Context, (2002) at 8, 10, 35. See Singh v The Commonwealth (2004) 78 ALJR 1383 at 1428 [214]; 209 ALR 355 at 30 Renamed the Australian Citizenship Act 1948 (Cth) by the Australian Citizenship Act 1973 (Cth), s 1(3). 31 The status of "British subject" was removed by the Australian Citizenship Amendment Act 1984 (Cth), ss 7, 33 and 34. These provisions entered into force on 1 May 1987: s 2(2) and Commonwealth of Australia Gazette, S68, 24 April 1987. See Re Paterson; Ex parte Taylor (2001) 207 CLR 391 at 442 [153]. 32 Constitution, s 34(ii) (House of Representatives); cf s 8 (Senate). 33 Constitution, s 44(i). See Sue v Hill (1999) 199 CLR 462 at 473 [5], 504 [100]. Kirby and a provision guaranteeing to a "subject of the Queen", resident in any Australian State, freedom from any disability or discrimination that would not be applicable if that person were a "subject of the Queen" resident in another State34. As well, in the covering clauses to the Constitution and in other provisions supplementary notions appear concerning the "people" of the Commonwealth and the "electors" of the Commonwealth, the latter alone enjoying the power to approve formal amendments to the Constitution by referendum35. The applicants' claim to Australian nationality The applicants contest the right of the Commonwealth, acting through the Minister for Immigration and Multicultural and Indigenous Affairs (together "the respondents"), to remove them from Australia. The scheme of the federal legislation, purporting to permit that course is found in the combined operation of the Australian Citizenship Act 1948 (Cth), s 10(2) and the Migration Act 1958 (Cth), s 189. Such provisions are expressed by reference to the statutory expressions "citizens", "lawful non-citizens" and "unlawful non-citizens". The applicants contest their removal on the basis that the respondents lack constitutional power to remove them. They deny that they are "aliens", within the meaning of that expression in the Constitution36. Certainly, they are not and never have been "immigrants"37. They were born in Australia. They assert that they are Australian nationals. They thus appeal to a higher law than the statutory provisions governing citizenship. They contend that they are protected by their Australian constitutional nationality so that, whatever the Federal Parliament has enacted in respect of "citizens", "lawful non-citizens" and "unlawful non-citizens", such enactments cannot adversely affect them. The facts of the applicants' case38 and the terms of the federal legislation invoked by the respondents39 are set out in other reasons. There is no need for me to repeat this material. On the face of things, the applicants' case bears a 34 Constitution, s 117. 35 Constitution, s 128. 36 Constitution, s 51(xix). 37 Constitution, s 51(xxvii). 38 Reasons of Gleeson CJ and Heydon J at [1]-[8]; reasons of Gummow, Hayne and 39 Reasons of Gummow, Hayne and Crennan JJ at [19], [25]. Kirby strong resemblance to the arguments considered and decided in Singh v The Commonwealth40. This case is not complicated by reason of the applicants, through their parents or otherwise, being born British subjects or owing allegiance to the Queen in some other right41. The applicants' parents are nationals of the Republic of the Fiji Islands ("Fiji"). Fiji was formerly a dominion of the Crown. However, it severed that allegiance long before the applicants were born. Nor is this a case where the applicants could invoke, through their parents or otherwise, any other form of statutory Australian citizenship such as was granted in the Territory of Papua before its independence, impermanent though such citizenship proved to be42. The plaintiff in Singh, like the present applicants, was born in Australia. She also lived continuously in this country for six years before the determination of her case. This notwithstanding, this Court, by majority43 held that she had no constitutional right to remain in Australia. The provisions of the Australian Citizenship Act and the Migration Act providing for her removal as an unlawful "non-citizen" were valid. They were sustained, in her case, by the "aliens" power in the Constitution, s 51(xix). That power was not confined to notions of alienage as it was understood in the United Kingdom and other common law countries at the time the Australian Constitution was adopted. At such time, that notion had substantially been confined to the acquisition of nationality by virtue of the person's place of birth within the Crown's dominions (jus soli) rather than as a right of blood, acquired by lineage through the child's parents, usually its father (jus sanguinis)44. It is inherent in the outcome of Singh that the majority of this Court rejected a constitutional notion of Australian nationality defined by reference to a place of birth in Australia. Had that notion been adopted, Ms Singh could not have been removed as an "alien". Legislation providing for her removal, expressed in terms of her status as a statutory non-citizen, could not then have prevailed over her constitutional rights of nationality. The fact that this Court's 40 (2004) 78 ALJR 1383; 209 ALR 355. 41 Considered in Nolan v Minister for Immigration and Ethnic Affairs (1988) 165 CLR 178; Re Patterson; Ex parte Taylor (2001) 207 CLR 391; Shaw v Minister for Immigration and Multicultural Affairs (2003) 218 CLR 28. 42 See Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Ame (2005) 79 ALJR 1309; 218 ALR 483. 43 Gleeson CJ, Gummow, Hayne and Heydon JJ and myself; McHugh and Callinan JJ dissenting. 44 But see Singh (2004) 78 ALJR 1383 at 1403 [81]-[82]; 209 ALR 355 at 382-383. Kirby decision was adverse to Ms Singh indicates that such a view of constitutional nationality (and its antonym, alienage) was rejected. The reasons for the rejection of the constitutional idea of nationality as a birthright were differently expressed in the several reasons in Singh. However, basically, they reflected the recognition by all members of the majority, that, at the time the Constitution was written and thereafter, two criteria for nationality by birth existed in the world – jus soli and jus sanguinis. In that circumstance, consistent with the accepted norms for the construction of the Australian Constitution, notions of alienage and of nationality could adapt, as Parliament provided, by reference to one, both or a mixture of these competing approaches, so long as the persons designated as "aliens" truly answered that description in accordance with the judgment of this Court45. Given the apparent similarity in the essential facts of this case and those of Singh, how, then, do the applicants seek to distinguish their entitlements to be free from removal from Australia from those found adversely to Ms Singh? The applicants relied on the point of distinction that, when Ms Singh was born, by the law of the nationality of both of her parents (India), she was automatically entitled to Indian citizenship by descent46. The applicants therefore submitted that, at birth, Ms Singh owed allegiance to a foreign nation, India. She could not (without enabling Australian legislation applicable to her case) concurrently owe allegiance to Australia as well as India. No enabling legislation so provided in her case. In these proceedings, the applicants argued that, at the moment of their birth and to the present time, they owed no competing allegiance to (nor were they citizens of) any other foreign state. If they were not nationals of Australia, they would be stateless persons. And because international law reflects an towards statelessness47, international abhorrence the recognition of Australian nationality (and the denial of alienage) present in Singh should cause no obstacle in the applicants' cases. In their cases, as they put it, they owed allegiance to, and only to, Australia. Constitutionally speaking, they impediment the 45 Pochi v Macphee (1982) 151 CLR 101 at 109. 46 Singh (2004) 78 ALJR 1383 at 1428 [209]; 209 ALR 355 at 416-417, citing Citizenship Act 1955 (India), s 4 (as in 1998). 47 Now given effect by the Convention on the Reduction of Statelessness, done at New York on 30 August 1961 in accordance with General Assembly Resolution 896(IX), 4 December 1954 and entered into force with respect to Australia on 13 December 1975: see [1975] ATS 46. Kirby were thus Australian nationals. They were not aliens. They were not, therefore, subject to removal from Australia on the grounds of their lack of statutory status as "citizens". The Parliament's attempt to so provide lacked support in the Constitution and was inconsistent with the Constitution's terms. Background of international law on nationality In the present age, I accept that the Australian constitutional notions of alienage and nationality are to be understood in the context of any universal principles of fundamental human rights applicable to and accepted by, the community of civilised nations48. Thus, the Supreme Court of the United States, in elucidating the Eighth Amendment to the United States Constitution, has taken into account the virtually unanimous opposition of "the civilized nations of the world" to punishments that inflict statelessness on the offender49. In deriving the meaning of the Australian Constitution, and an understanding of the constitutional notion of nationality, this Court may have regard to applicable principles of international law. They are not binding as a rule of law is. However, they provide an often useful context for the exposition of what Australian law requires. The relevant principles of international law include the terms of Art 15 of the Universal Declaration of Human Rights50. This provides: the word "aliens" "(1) Everyone has the right to a nationality. (2) No one shall be arbitrarily deprived of his nationality nor denied the right to change his nationality." Similarly, Art 24.3 of the International Covenant on Civil and Political Rights ("the ICCPR")51, to which Australia is a party, provides: "Every child has the right to acquire a nationality." 48 Al-Kateb v Godwin (2004) 219 CLR 562 at 624 [174]-[175] referring to Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513 at 658. 49 Trop v Dulles 356 US 86 at 102-103 (1958); cf Roper v Simmons 543 US 551 at 50 Adopted by the United Nations General Assembly, Resolution 217(III)(A), 10 December 1948. 51 Adopted and opened for signature by the United Nations General Assembly, Resolution 2200(XXI), 16 December 1966; entered into force on 23 March 1976 in accordance with Art 49. Entered into force with respect to Australia on 13 November 1980: see [1980] ATS 23. Kirby To like effect are Arts 7 and 8 of the Convention on the Rights of the Child ("the CRC")52, to which Australia is a party. Relevantly, these provide: The child shall be registered immediately after birth and shall have the right from birth to a name [and] the right to acquire a nationality … States Parties shall ensure the implementation of these rights in accordance with their national law and their obligations under the relevant international instruments in this field, in particular where the child would otherwise be stateless. States Parties undertake to respect the right of the child to preserve his or her identity, including nationality … as recognized by law without unlawful interference. Where a child is illegally deprived of some or all of the elements of his or her identity, States Parties shall provide appropriate assistance and protection, with a view to re- establishing speedily his or her identity." The foregoing provisions of international law afford the background against which the particular provisions of the Convention on the Reduction of Statelessness ("the CRS") were adopted53. I will not repeat the provisions of the applicable articles of that Convention. They too are set out in other reasons. Clearly, the Convention was designed as one of several treaty provisions adopted by the international community, including Australia, to carry into effect the principles stated in the Universal Declaration of Human Rights. In the absence of clear textual obstacles, this Court should, so far as possible, adopt a meaning of the Australian constitutional concepts of alienage and nationality which is compatible with these basic statements of international law54. We should do so because, today, our Constitution operates in a world that 52 Adopted and opened for signature by the United Nations General Assembly, Resolution 44/25, 20 November 1989; entered into force on 2 September 1990 in accordance with Art 49. Entered into force with respect to Australia 16 January 1991: see [1991] ATS 4. 53 See reasons of Gummow, Hayne and Crennan JJ at [44]. 54 Bropho v Western Australia (1990) 171 CLR 1 at 20; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 [69]-[71]; Al- Kateb (2004) 219 CLR 562 at 622-624 [167]-[176]. Kirby is shaped and informed by international law, especially by the international law of human rights as it expresses universal human values. The binding force of the decision in Singh A possible factual difference: Nevertheless, there are two impediments to the acceptance of the applicants' arguments concerning the ambit of the two Australian constitutional concepts in issue in this case. The first is a factual impediment. It concerns the specific principle for which this Court's decision in Singh stands. It has been assumed that Singh was a case of competing allegiance on the basis that Ms Singh was, from birth, a citizen of another country, India, and for that reason was not capable, without legislative facilitation, of becoming and being a national of Australia. I do not pause to question how, in the context of Australian constitutional notions, a statutory provision in the law of India, concerning the status of Ms Singh, could necessarily exclude the application to her, in an Australian court, of Australian constitutional notions of nationality. That problem was not addressed in Singh. Presumably this was because of concentration by the Court on the ambit of the power to make laws with respect to "aliens" instead of addressing the positive attributes of Australian nationality which Ms Singh, by inference, was claiming. Most members of the majority in Singh55 accepted that Ms Singh was a citizen of India by descent from her parents. However, in my reasons in Singh56, I noted amendments to the Citizenship Act 1955 (India) effected in 200357. Those amendments provided that a person, such as Ms Singh, who was "born outside India", where either parent was a citizen of India, would become a citizen of India only if their "birth is registered at an Indian consulate"58. If such a provision applied to Ms Singh, it would have placed her in a legal position very similar to (if not identical with) that of the present applicants. Indeed, the acquisition of nationality ("citizenship") in the case of children born overseas, by a procedure of registration at a designated foreign mission of, or authorised by, the country of the parents' nationality is not at all unusual. It is a matter of common international practice. Thus, s 10B of the Australian Citizenship Act provides for the acquisition of Australian citizenship by descent where 55 (2004) 78 ALJR 1383 at 1384 [2] per Gleeson CJ, 1416 [142] per Gummow, Hayne and Heydon JJ; 209 ALR 355 at 356, 400. 56 (2004) 78 ALJR 1383 at 1428 [210]; 209 ALR 355 at 417. 57 Citizenship (Amendment) Act 2003 (India) noted in Gazette of India [2004] AIR (Acts) 7. 58 Citizenship (Amendment) Act 2003 (India), s 4(1). Kirby designated persons register the birth of a child born outside Australia to an Australian parent. Whatever might have been the facts concerning the Indian citizenship status of Ms Singh when she was born in Australia, whether she was assumed to be a citizen of India at her birth and whether, in default of registration, she lost or had lawfully disclaimed that citizenship at the time of the hearing in this Court, it is appropriate to treat the authority of Singh as confined to a case where, as was accepted by the majority, the child born in Australia owed a foreign allegiance because of the acquisition at birth, by descent under the jus sanguinis from a parent, of the nationality of another country. On this footing, as a matter of legal analysis, the decision in Singh does not require the same decision in the applicants' case. It is distinguishable. It does not govern the disposition of this application. Not a case of statelessness: This conclusion leaves a remaining obstacle in the way of the applicants. As the provisions of the Constitution of Fiji make clear, the primary rule59 for nationality of a child born to Fijian parents (apart from a child of diplomats or of parents neither of whom is a citizen) is stated thus: "Every child born in Fiji … becomes a citizen at the date of birth". The secondary rule is citizenship by registration. Section 12 of the Constitution of Fiji provides: "(1) A child born outside Fiji … may become a citizen by registration if, at the date of the child's birth, either parent was a citizen. (4) An application for registration under subsection (1) … may be made at any time during the child's lifetime and, if he or she is under the age of 21 at the date of the application, may be made on his or her behalf by a parent or guardian." The parents of the applicants have taken no steps to register the applicants as citizens of Fiji. They assert that they have no intention of doing so. However, under the Constitution of Fiji, the child itself may at any time during its lifetime apply for registration. Any such child is thus entitled to citizenship save in certain limited circumstances60. In the agreed facts, on the face of the Constitution of Fiji, a person, such as either of the applicants (or a parent or guardian on their behalf) who sought 59 Fiji Constitution, s 10. 60 Fiji Constitution, s 12(5), (6), (7) and (8). Kirby registration of the applicants, or either of them, as citizens of Fiji, would have an enforceable legal entitlement to secure that registration and thus to obtain Fijian citizenship for them. At least, this would be so at the applicants' present respective ages and during their state of immaturity. There would be no impediment. The nationality status of the parents would meet the specified constitutional preconditions. The contrary was not suggested. These circumstances therefore demonstrate that, as a legal and practical matter, there is no risk that an interpretation of the Australian Constitution which denied the applicants Australian nationality and treated them as "aliens" for Australian constitutional purposes, would condemn them to an international status of statelessness. In the applicants' cases, such status could readily be cured by the parents, acting in the applicants' best interests, performing the simple act of registration which is an entitlement belonging to both of the applicants by reason of the citizenship of their parents. It follows that this is not a true case of statelessness, such as was presented to this Court in Al-Kateb v Godwin61. In this case, the consideration of potential statelessness can therefore be ignored. The ordinary understanding of the word "aliens" These conclusions bring me to the last issue. This is whether it is constitutionally impermissible for Australia to insist, in effect, that the applicants should acquire Fijian nationality, contrary to the wishes and intentions of their parents pursuing what they presumably conceive to be in the applicants' best interests. The only way this question could be answered in the affirmative is if it were shown that, by their birth in Australia without any other present nationality, the applicants acquired the constitutional status of Australian nationality and thus necessarily fell outside the constitutional status of "aliens". However, that proposition cannot stand with the holding of this Court in Singh. If, as was decided there, the content of the "aliens" power (its "denotation") could, after federation, expand in some limited circumstances to include certain persons born in Australia, the constitutionally protected notion of nationality would contract to the identical extent. Legislative expressions of nationality, articulated in terms of citizenship would, to that extent, be valid. The interlocking provisions of s 10(2) of the Australian Citizenship Act and s 189 of the Migration Act would, under the constitutional powers so explained, be sufficient to authorise the respondents' asserted power to remove the applicants from Australia as "unlawful non- citizens". 61 (2004) 219 CLR 562 at 596 [79]-[80]. Kirby It only remains to say, once again, as Gibbs CJ did in Pochi v Macphee62, that the Federal Parliament cannot "simply by giving its own definition of 'alien', expand the power under s 51(xix) to include persons who could not possibly answer the description of 'aliens' in the ordinary understanding of the word". This Court stands as a guardian against any parliamentary attempt to impose on the words artificial or extreme meanings of the kind postulated in Pochi63. However, as in Singh, so in this case. The effect of the operation of s 10(2) of the Australian Citizenship Act on the applicants is not extreme, whether viewed from the standpoint of developments of the notions of alienage and nationality in Australian constitutional law or in the law of other nations, as recognised by international law. In particular, it is not extreme because it denies the applicant children a right to acquire a nationality to which they are entitled or because it subjects them to a condition of statelessness in international law. They are not stateless. They are entitled, immediately on registration, to acquire the nationality of their parents – the citizenship of Fiji. It will be noticed that the statements of international law subsequent to the Universal Declaration of Human Rights are not expressed in terms of a "right to nationality" as such but of a "right to acquire a nationality"64 or to be granted nationality65. The applicants undoubtedly now enjoy the right to acquire Fijian nationality. They are not stateless. Conclusion and orders The Full Court of the Federal Court of Australia was therefore correct in its conclusion that the applicants are "aliens" within the meaning of s 51(xix) of the Constitution. They are not constitutionally protected nationals of Australia. This conclusion is not necessarily determinative of any other entitlements which the applicants may enjoy. Special leave to appeal should be granted; but the appeal should be dismissed with costs. 62 (1982) 151 CLR 101 at 109. 63 See Singh (2004) 78 ALJR 1383 at 1438 [267]-[269]; 209 ALR 355 at 431. 64 Art 24.3 of the ICCPR and Art 7.1 of the CRC set out above in these reasons at 65 Art 1 of the CRS set out in the reasons of Gummow, Hayne and Crennan JJ at [44]. Callinan CALLINAN J. The recent decision of this Court is Singh v The Commonwealth66 and its application to other cases can produce unhappy results. This is one. Both of the applicants are infants who were born in Australia and have always lived here. They are siblings. Their three siblings are Australian citizens. Their parents are Fijian nationals. They can become Fijian citizens by registration67. They are effectively stateless persons, absent registration or success in these proceedings. As the joint judgment of Gummow, Hayne and Crennan JJ points out they do not however satisfy the criteria prescribed by s 10 of the Australian Citizenship Act 1948 (Cth) ("the Act"). If I were free to do so I would find in favour of the applicants for the reasons given by McHugh J and myself in Singh. I must accept however that Singh is a very recent decision of the Court and is authority for the propositions stated in the joint judgment of Gummow, Hayne and Crennan JJ68. This case is, I must also accept, relevantly indistinguishable from Singh in the application of the Act to it. Accordingly I am bound to and would join in the orders proposed by their Honours. 66 (2004) 78 ALJR 1383; 209 ALR 355. 67 Constitution of the Republic of the Fiji Islands, s 12(1).

HIGH COURT OF AUSTRALIA AND THE QUEEN RESPONDENT Buckley v The Queen [2006] HCA 7 8 March 2006 ORDER 1. Appeal allowed. Set aside the orders of the Court of Appeal of the Supreme Court of Queensland made on 7 May 2004. 3. Remit the matter to the Court of Appeal of the Supreme Court of Queensland for further consideration in accordance with the reasons of this Court. On appeal from the Supreme Court of Queensland Representation: P E Smith for the appellant (instructed by Terry Fisher & Company) L J Clare for the respondent (instructed by Director of Public Prosecutions (Queensland)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Buckley v The Queen Criminal Law – Sentencing – Indefinite sentence – Appellant pleaded guilty to serious violent and sexual offences – Whether the sentencing judge observed the correct principles in exercising the power to impose an indefinite sentence. Criminal Law – Sentencing – Whether the sentencing judge made material errors of fact requiring reconsideration of the sentencing discretion. Penalties and Sentencing Act 1992 (Q), Pt 10. GLEESON CJ, GUMMOW, KIRBY, HEYDON AND CRENNAN JJ. The appellant, having entered pleas of guilty to serious charges arising out of three violent attacks on women, was sentenced in the District Court of Queensland. An indefinite sentence was imposed, pursuant to s 163 of the Penalties and Sentences Act 1992 (Q) ("the Act"). The principal issue in this appeal is whether, in imposing that sentence, the sentencing judge observed the principles to be applied in the exercise of the power conferred by such legislation. Those principles have been stated in a number of decisions, including decisions of this Court. A subsidiary issue is whether the sentencing judge made material errors of fact requiring reconsideration by the Court of Appeal of Queensland of the sentencing discretion. Indefinite sentences In R v Moffatt1, Hayne JA pointed out that legislative provisions providing for the preventive detention of habitual or dangerous offenders have a long history in jurisdictions which derive their legal systems from England. That case was concerned with Victorian legislation enacted in 1991. Victoria had an Indeterminate Sentences Act in 1907, and similar provisions were contained in later Victorian legislation. Reference was made to legislation providing for indefinite or preventive detention in several other States and the Northern Territory. The corresponding Western Australian legislation was considered by this Court in Chester v The Queen2 and McGarry v The Queen3. The history of similar New Zealand legislation was examined in R v Leitch4. In Fardon v Attorney-General (Qld)5, this Court, in upholding the validity of the Dangerous Prisoners (Sexual Offenders) Act 2003 (Q), discussed some of the issues involved in preventive detention. New South Wales legislation relating to sentencing of habitual criminals was considered in Strong v The Queen6. [1998] 2 VR 229 at 251-252. (1988) 165 CLR 611. (2001) 207 CLR 121. [1998] 1 NZLR 420. (2004) 78 ALJR 1519; 210 ALR 50. (2005) 79 ALJR 1171 at 1177 [28], 1182-1183 [57]-[62]; 216 ALR 219 at 226, Kirby Crennan Part 10 of the Act is headed "Indefinite sentences". Section 163 provides that a court may, instead of imposing a fixed term of imprisonment, impose an indefinite sentence on an offender convicted of a violent offence. Rape, by definition, is a violent offence (s 162). Such a sentence may be imposed by the court of its own initiative, or on an application made by counsel for the prosecution (s 163(1)). An application by counsel for the prosecution requires the written consent of the Attorney-General (s 165). In imposing an indefinite sentence, the court must state the term of imprisonment (the nominal sentence) that it would have imposed had it not imposed an indefinite sentence (s 163(2)). The indefinite sentence must be reviewed within six months after an offender has served 50 per cent of the nominal sentence, and subsequently (while it subsists) at intervals of not more than two years (s 171(1)). An offender may make an application for review at any time after the first review (s 172). There are provisions relating to the conduct of such reviews (ss 172C, 176), and for appeals (s 177). Upon a review, unless it is satisfied that the offender is still a serious danger to the community, the court must order that the indefinite sentence be discharged, and sentence the offender for the violent offence for which the indefinite sentence was imposed (s 173(1)). Such a sentence is taken to have started on the day the indefinite sentence was originally imposed, and must be not less than the nominal sentence (s 173(3)). A prisoner so sentenced may apply to be released to a re-integration program (s 174). Before imposing an indefinite sentence, a court must be satisfied that the offender is a serious danger to the community. In making that determination, the court must have regard to whether the nature of the offence is exceptional, and also to the offender's antecedents, age and character, any relevant psychiatric or other report, the risk of serious physical harm to members of the community if an indefinite sentence were not imposed, and the need to protect members of the community from such risk (s 163(3) and (4)). A court imposing an indefinite sentence must give detailed reasons for doing so (s 168). We are not presently concerned with a case, such as Chester v The Queen7, or McGarry v The Queen8, where the offending would have attracted a (1988) 165 CLR 611. (2001) 207 CLR 121. Kirby Crennan finite or nominal sentence in the order of about three or four years. Nor are we concerned with a case where the available maximum penalty was plainly inadequate to serve a necessary protective purpose. On any view of the matter the appellant was facing a long sentence. Even so, it is important to bear in mind what was said in Chester and McGarry about the imposition of an indefinite sentence. Such a sentence involves a departure from the fundamental principle of proportionality. The statute assumes that there may be cases in which such a departure is justified by the need to protect society against serious physical harm; but a judge who takes that step must act upon cogent evidence, with a clear appreciation of the exceptional nature of the course that is being taken. Furthermore, as was pointed out in McGarry9, the assessment of risk required by the statute may involve temporal issues requiring careful examination. In R v Leitch10, the New Zealand Court of Appeal said that, when considering the exercise of its discretion, a sentencing court "will ordinarily consider whether the protective purpose of preventive detention could reasonably be met by an available finite sentence of imprisonment". Similarly, in the recent Victorian case of R v Davies11, Charles and Nettle JJA said that, before answering the critical question whether the case was of such exceptional rarity that an indefinite sentence should be imposed, it was necessary first to consider what fixed term of imprisonment would have been appropriate. The Queensland legislation applied in the present case requires a judge to specify a nominal sentence, which becomes relevant for purposes of review and for the consequences of decisions made on review. The significance of the nominal sentence, however, goes beyond that. In the first place, where a judge, sentencing a dangerous offender, is deciding whether the protection of society requires an indefinite sentence, the protective effect of a finite sentence, fixed according to ordinary sentencing principles, including the need to protect the public12, is a matter to be weighed carefully. An indefinite sentence is not merely another sentencing option. Much less is it a default option. It is exceptional, and the necessity for its application is to be considered in the light of the protective effect of a finite sentence. Secondly, the available finite sentence sets the time frame by reference to which the temporal issues earlier mentioned are to be (2001) 207 CLR 121 at 129-130 [22]-[23]. 10 [1998] 1 NZLR 420 at 429. 11 (2005) 153 A Crim R 217 at 238. 12 Veen v The Queen [No 2] (1988) 164 CLR 465. Kirby Crennan examined. As will appear, in this case the sentencing judge set a nominal sentence of 22 years, having rejected a prosecution submission that it should be life. Since it was clear that, even if an indefinite sentence were not imposed, the appellant would be in custody for many years, estimations of future risk were being undertaken in a temporal context that necessarily gave rise to substantial uncertainty. The offences In the Court of Appeal, Holmes J set out in her reasons for judgment the following succinct account of the three episodes leading to the charges against the appellant: "The [appellant] committed the offences for which he was sentenced between 6 March 1999 and 21 January 2000. The first two rapes were committed on a 20 year old woman who was walking alone to her home in Dalby at about 4am. The [appellant] grabbed her from behind and forced her to the ground. He then used the strap of her shoulder bag around her neck to choke her and force her to an area where he anally and vaginally raped her, causing what was described in a medical report as 'major anal trauma' and other less serious genital injuries. At the end of the assault he threatened to kill the complainant if she moved as he left. The second series of assaults was committed on a 67 year old woman. At about 5am one morning, the [appellant] broke a window to get into the bedroom where the victim was sleeping. He tried to sodomise her inside the bedroom and then dragged her out of the house into the backyard, where he attempted to put his penis into her mouth. He then sodomised her while placing his fingers in her vagina. Those events gave rise to rape and indecent assault charges. The third set of offences was committed on a 15 year old girl whom the [appellant] attacked as she walked alone in a Toowoomba city street at about 1am. He chased her, and then knocked her to the ground from behind, causing her in the fall to suffer a fractured femur. Notwithstanding her plea that she thought her leg was broken, he raped her vaginally and anally. At one stage when he thought she had looked at him he slapped her on the face and head." The appellant was arrested on 27 April 2000, and taken into custody, where he has remained. A DNA sample implicated him in the three attacks. A question arose as to his fitness to plead. On 1 March 2001, the Mental Health Kirby Crennan Tribunal found that the appellant was fit to plead. After some further delays for reasons that are not presently relevant, the appellant, in June 2003, entered pleas of guilty to the following charges: five counts of rape, each of which carried a maximum penalty of imprisonment for life; one count of burglary with violence, which also carried a maximum penalty of imprisonment for life; one count of indecent assault, which carried a maximum penalty of imprisonment for 10 years; and one count of inflicting grievous bodily harm, which carried a maximum penalty of imprisonment for 14 years. In September 2003, the appellant came for sentence before Judge Howell. The appellant's background The appellant was born at Cunnamulla in September 1971. He left school at the age of 13. He worked in various occupations in rural Queensland, including kangaroo shooting and professional boxing. At the time of his arrest he had been working for three years as a leading hand on an oil rig. Prior to his conviction for the offences the subject of this appeal, he had a relatively minor criminal history, involving a number of summary offences such as wilful damage, assault of police, and occasioning bodily harm. More significantly, there were offences involving voyeurism. In August 2000, Dr Moyle, a psychiatrist engaged by the appellant's solicitors, wrote a report that included information received from the appellant and the appellant's mother. The appellant complained of a background of victimisation and physical abuse at school. He received many head injuries from fights which were said to be "associated with rage". His mother attributed a change for the worse in his behaviour to injuries he received in a fight when he was 19. However, there was a history of violent outbursts before then. Such violence was sometimes associated with alcohol abuse. The psychiatric evidence At the time of Dr Moyle's first report, there were unresolved questions as to whether there would be a plea of insanity, whether the appellant was fit to plead, and whether, in the event of a guilty plea, there were considerations that could be urged in mitigation of penalty. The appellant was found fit to plead, and he entered pleas of guilty. The psychiatric evidence was ultimately regarded, not as a matter of mitigation, but as a reason for imposing an indefinite sentence. The appellant had been under police surveillance before his arrest. The record does not show why this was so, or why his sanity was questioned. However, much of what concerned the sentencing judge emerged, over time, in information given by the appellant to a number of psychiatrists. The reliability of that Kirby Crennan information was not in contest during the sentencing proceedings, and the judge took it at face value. In argument in this Court, we were not invited to do otherwise. In his August 2000 report, Dr Moyle, under the heading "Sex and the appellant about his sexual Marriage", recorded conversations with experiences. The appellant displayed "body language ... associated with quite intense feelings". The appellant recounted a long history of voyeuristic behaviour. Then he described "another paraphilia". This involved a sexual encounter with a dog during the appellant's childhood. Dr Moyle said: "He has experienced fantasies of sexual sadism. This never reached the extent where killing women was sexually exciting behaviour. However he can recall dreams involving violence to women as well as degradation. He proudly states that he has never mistreated any females nor has he demonstrated any violence towards females. He does acknowledge however a growing thought of torturing women in later years." This is a curious passage. The appellant's statement to Dr Moyle that he had never mistreated any females and never demonstrated any violence towards females was recorded by Dr Moyle after the three attacks on women which had resulted in his being in custody. Whether it was obvious to Dr Moyle at the time is not clear, but it is now obvious that, at least in that respect, what the appellant was telling Dr Moyle was false, if it was intended to include all of the appellant's past conduct. Perhaps, in the context, it was only intended to refer to his conduct before the present offences. It will be necessary to return to Dr Moyle's opinion, but it is convenient for the present to trace the development of the information given by the appellant to other psychiatrists. In October and November 2000, the appellant was examined, at the request of the Mental Health Tribunal, by Dr Fama, who had read Dr Moyle's report. Dr Fama recorded "a family history of mental disorder of an uncertain kind". Dr Fama concluded that the appellant was not suffering from paranoia or affective psychosis, and that he was fit to plead. He could not exclude the long- term possibility that the appellant might come to display a florid mental illness, but considered that he did not need to be in hospital. In October and December 2000, Professor Yellowlees examined the appellant at the request of the Mental Health Tribunal. He had read the reports of Dr Moyle and Dr Fama. The appellant described to Professor Yellowlees "a very much more extensive history of severe paraphiliac and violent behaviour than Kirby Crennan to either Dr Moyle or Dr Fama". that given told Professor Yellowlees that, between the ages of 15 and 26, he conducted "regular sexual relationships with animals, mainly horses, but also cattle and goats". He would sometimes shoot the horses before having sexual connection with them. He "used to think horses were better than some of the women". The feelings of excitement and power when he raped women were "like the animals". This led Professor Yellowlees to conclude that the appellant exhibited zoophilia and sexual sadism. The appellant In June 2003, Dr Kingswell was asked by the Director of Public Prosecutions to review the appellant's criminal history and the reports of Dr Moyle, Dr Fama and Professor Yellowlees. Dr Kingswell noted that the history given to Dr Moyle was materially different from that given to Professor Yellowlees. He accepted that the history given to Professor Yellowlees was true and, by implication, that the history given to Dr Moyle was at least incomplete. Professor Yellowlees, in June 2003, reviewed the earlier reports and provided a supplementary report. In July 2003, Dr Moyle interviewed the appellant, and provided a further report. Dr Moyle said that it was not surprising that the history of bestiality given to Professor Yellowlees went beyond what had been told to him. He said it was normal for details of paraphilia to increase with time. He saw no reason to doubt the accuracy of the history given to Professor Yellowlees. He disagreed with a diagnosis of anti-social personality disorder, but found the diagnosis of sexual sadism the most relevant and worrying. At the sentencing proceedings before Judge Howell, there was oral evidence from Professor Yellowlees, Dr Kingswell and Dr Moyle. Evidence and argument proceeded on the basis that everything the appellant told the psychiatrists was true, and that, to the extent to which the history he gave to Professor Yellowlees went beyond the history he gave to Dr Moyle, then the history given to Dr Moyle was incomplete. Presumably, that reflected the appellant's instructions to his legal representatives. The appellant himself did not give evidence. The reports of the psychiatrists were tendered without objection. Professor Yellowlees, with whom Dr Kingswell substantially agreed, was of the opinion that the appellant "falls into the category of the most high risk offender". He has "an anti-social personality disorder". The issues of sexual sadism and zoophilia were regarded as of special concern. In his June 2003 report, he said: Kirby Crennan "From the clinical perspective I believe, that were [the appellant] ever to be released from corrective custody it would be essential that he be very carefully monitored, and most probably treated in a mandatory [manner] with a drug such as cyproterone acetate, or whatever is the best mode of treatment in a number of years time. The only alternative to this is, of course, an indefinite sentence." All of the psychiatrists found it difficult to predict the level of danger to the community if the appellant were imprisoned for a lengthy period, such as 20 or 25 years, and then released into the community. Professor Yellowlees referred to the possibility of drug treatment which, of course, would have to be examined in the light of what was then available. He said he would expect the risk of offending to decline over the next 15 to 20 years. Dr Moyle pointed out that the appellant's response to programmes of treatment and counselling while in prison would provide a useful indication of the prospects of re-offending upon release. The other psychiatrists did not disagree with that. the evidence, and The transcript of the sentencing proceedings reveals that, in one respect, Judge Howell misunderstood a portion of that his misunderstanding was reinforced by the prosecutor. In the course of the prosecutor's address, the judge referred to the "particularly chilling connotation" of evidence that the appellant had sex with animals and later killed them. That caused him to wonder whether a human victim might suffer a similar fate. The prosecutor said that was a concern. This was a topic to which the judge returned in his reasons. It was taken up in the Court of Appeal. The misunderstanding related to the sequence of events as described by the appellant to Professor Yellowlees. The reasons of the sentencing judge In his reasons, the sentencing judge made no specific reference to any of the authorities dealing with the imposition of indefinite sentences, or to the principles established by those authorities. The judge began by setting out the facts relating to the offences. Then he referred to the evidence of the psychiatrists. All, he said, agreed that the risk of the accused re-offending is moderate to high and that there are real difficulties in being able to predict with any confidence whether a particular individual will or might re-offend. He said, inaccurately, that it was a matter of concern to Professor Yellowlees that, on occasions after sexual acts with animals the appellant would kill the animals. (According to what the appellant told Professor Yellowlees, any killing occurred before the sexual acts.) The judge Kirby Crennan then said: "One cannot speculate on whether, if the accused had not been arrested and there were further incidents, ... the life of a complainant might have been at risk". The judge also referred, accurately, to Professor Yellowlees' concerns about sexual sadism. The judge made a passing reference to an issue which he himself had raised in the course of evidence, concerning a "somewhat simplistic" possibility that the appellant might have attempted to blame alcohol for his misconduct. There was some confusion in the judge's reference to the evidence on the point, but he went on to say: "To state the obvious the problem is much more deep-seated than that. If that were a view to be held or to be persisted in it shows a worrying lack of insight. It is also relevant arguably to the matter of remorse and that might arguably not bode well for successful treatment." Matters raised in mitigation were then considered. A suggestion that there was evidence of substantial remorse was not accepted. However, the pleas of guilty, involving co-operation with the administration of justice, and the sparing of the complainants of the need to give evidence, were treated as "not insignificant" matters for "allowances". Queensland cases dealing with a guilty plea as a mitigating factor were discussed. The judge recorded a submission by the prosecutor that, if an indefinite sentence were not to be imposed, a life sentence would be appropriate. He then recorded, with approval, an alternative submission that, allowing for the pleas of guilty, if there were to be a finite sentence less than life imprisonment, it should be in a range between 20 and 25 years. Under Queensland statute law, as a serious violent offender, the appellant, on that basis, would have to serve at least 80 per cent of such a term in custody. The judge, in considering whether he should impose an indefinite sentence said: "One looks at the matters that one has to take into account. I have already referred to the bases of the opinions of Professor Yellowlees and Dr Kingswell, which are supported on certain matters by Dr Moyle, but, as I have made clear, if there is a difference in opinion I prefer the opinion and evidence of Professor Yellowlees and Dr Kingswell. When one looks at the very offences themselves, the background of the accused, including his abnormal, deviant sexual behaviour over quite a period of time, most importantly the evidence of the psychiatrists, I come Kirby Crennan to the firm view that there would be very real risk of serious physical harm to members of the community if an indefinite sentence were not imposed, and the need to protect members of the community from the said risk would require an indefinite sentence. All of the psychiatrists stated if the accused were to undergo successfully such programs as the sexual offenders unit provides, and other such courses whilst in custody, that would be a helpful indicator and would lessen the risk of recidivism. Dr Kingswell said bad pointers would be if the accused were to offend in custody, or if he failed to complete the sexual offenders program. Dr Moyle referred, in relation to the programs, the most worrying of all is the person who commences a program and does not complete it, a person who drops out. Of the three categories that person would be in the highest risk category. That the second highest is the one who did not undergo or enter a course at all and the best would be the one who successfully completed the courses. Dr Kingswell's relevant opinion thereon inter alia is that the accused had no moral awareness of his wrongdoing. I have not referred to certain of the statistics when Dr Kingswell was referring to, say, research showing a 40 per cent rate of recidivism. The ultimate conclusion I firmly come to is that within the very tests set down by the legislation, the Crown has met the test here. The legislation provides pursuant the prosecution has the onus of proving that an offender is a serious danger to the community and, in section 170, 'The Court may make such finding if it is satisfied by acceptable cogent evidence', and then referring to the standard of proof, 'and to a high degree of probability.' As I said, I firmly come to that view at least to a high degree of probability. to section 169 that I therefore, on each charge, impose an indefinite sentence. I am required to state the finite sentence I would impose if there were not an indefinite sentence. Kirby Crennan In relation to the finite sentence for each of the charges, in relation to counts 1, 2, 4, 7 and 8, the sentence is imprisonment for 22 years; in relation to count 3, the sentence is 10 years' imprisonment; in relation to count 6, the sentence is seven years' imprisonment; in relation to count 5, the sentence is four years' imprisonment. I declare that presentence custody of 1,233 days – namely, from the 27th of April 2000 to today, the 11th of September 2003 – be imprisonment already served under the sentence." The nominal sentences were obviously intended to be concurrent, having regard to the context of the whole of the reasons for judgment, and s 155 of the Act. The Court of Appeal The appellant sought leave to appeal to the Court of Appeal. By majority (de Jersey CJ and Davies JA), leave was refused. The third member of the Court, Holmes J, would have granted leave to appeal but would have dismissed the appeal. It is convenient to begin with the reasons of Holmes J, because the other members of the Court gave only brief reasons explaining why they differed from her as to the order to be made. The principal ground of the application, which was considered and rejected by Holmes J, was that the sentencing judge, in his reasons, had failed to refer to, or take sufficient account of, the exceptional nature of the power he was exercising. The argument was the reasons "did not demonstrate consideration of whether this was one of the 'very exceptional cases where the exercise of the power is demonstrably necessary to protect society from physical harm'". The words quoted by Holmes J were taken from the Western Australian case of Narrier13. Holmes J said, with respect to this argument: "If the judgment on appeal in Narrier was intended to mandate pronunciation of a formula in every case as to its exceptional nature, however obvious that might be, I would not agree with it; but I do not think it was. In any event, it does not seem to me that it was incumbent on the learned judge here expressly to state that this was an exceptional case, 13 (2000) 111 A Crim R 405 at 411. Kirby Crennan when there was no requirement for him to do so, and the facts and the expert opinion he accepted spoke for themselves." The Chief Justice and Davies JA agreed with this. However, Holmes J considered that the sentencing judge had made three material errors of fact. The first concerned the confusion about the sequence of events involving sexual acts with and killing of animals. The second concerned a statement that the appellant had been boastful about his crimes. Holmes J said this was not supported by the evidence. The third concerned an apparent finding by the sentencing judge that the appellant had attempted to blame alcohol for his conduct. Her Honour saw nothing in the evidence to suggest any such attempt. Having found these errors of fact, Holmes J concluded that leave to appeal should be granted and that the Court of Appeal should decide the matter afresh. She then said: "Inevitably, having regard to what is known about the [appellant's] background, the gravity of the offences and the expert evidence, one comes to the conclusion that the [appellant] does present a serious danger to the community, both in terms of the likelihood of re-offending and the seriousness of any offence to be committed should he do so. I do not think one can draw much comfort from the proposition that the [appellant] will undergo treatment while in custody: neither Professor Yellowlees nor Dr Kingswell thought that that prospect offered any reassurance. There is plainly a need to protect members of the community from the serious risk posed by the [appellant] now, and, as far as can presently be determined, on his release. In light of all the evidence, particularly the psychiatric evidence, one cannot avoid the conclusion that an indefinite sentence was warranted." The Chief Justice and Davies JA found it unnecessary to consider the matter afresh. In their view, the trial judge had not made the factual errors attributed to him by Holmes J. As to the sequential aspect of the sexual acts with and the killing of animals, de Jersey CJ, with whom Davies JA agreed, pointed out that the sentencing judge had said that one could not speculate on whether the life of a human victim might be at risk. As to the suggested boastfulness, he pointed to material in the psychiatric reports which he said was capable of being described in that way. As to the attribution of blame to alcohol, de Jersey CJ noted that the sentencing judge had expressed himself in a tentative and speculative manner. de Jersey CJ and Davies JA found no material error of fact in the reasons of the sentencing judge. Kirby Crennan In the result, one member of the Court of Appeal (Holmes J) considered the question of sentencing discretion afresh, and came to the same conclusion as the primary judge. The majority, however, found it unnecessary to undertake that exercise. Leave to appeal was refused. The need for appellate reconsideration of the exercise of discretion If Holmes J were correct in finding that the sentencing judge made material errors in his appreciation of the facts relevant to the exercise of his sentencing discretion, then leave to appeal should have been granted, and all three members of the Court of Appeal should have considered afresh the sentence to be imposed on the appellant. The position is reinforced if the Court of Appeal should have held that all of the issues relevant to a decision to impose an indefinite sentence were not considered by the sentencing judge. A problem in resolving the disagreement between Holmes J and the majority in the Court of Appeal is that, in relation to the first and third matters of fact to which Holmes J referred, it is difficult to know what finding, if any, the learned judge intended to make, and what significance it had for his ultimate conclusion. It is clear that his Honour was under a misapprehension about the sequence of events involved in the sexual acts with and killing of animals, and that he was concerned about what he understood to have been the appellant's practice of killing animals after abusing them. This concern had no foundation in the evidence of the psychiatrists, who did not share the judge's confusion about the sequence. Whether the judge's reference, in his reasons, to his inability to speculate meant that he was dismissing the matter from his final consideration is not completely clear. Nevertheless, as Holmes J said, the misunderstanding appeared to have influenced the exercise of sentencing discretion. Similarly, the issue about an attempt by the appellant to blame alcohol for his conduct was one that was raised by the judge himself, and appears also to have been regarded as significant. As to the second matter, concerning the appellant's supposed boastfulness, when regard is had to the circumstances in which the appellant was speaking to the psychiatrists, to characterise his account of his activities as boasting seems harsh. Kirby Crennan Holmes J was right to conclude that the sentencing judge's treatment of these factual issues required appellate reconsideration of the discretion14. There is, however, a more fundamental concern about the approach of the sentencing judge. In the authorities earlier mentioned, courts, including this Court, have stressed, and the legislation to be applied in the present case recognises, the exceptional nature of the power to impose an indefinite sentence. A proper exercise of the power involves an understanding of why it is exceptional, and careful attention to the considerations that call for its exercise. The nominal sentence required by s 163(2) of the Act is significant not merely for purposes related to the review provisions of Pt 10. It has an important role in the decision to be made under sub-ss (3) and (4) of s 163. In particular, in considering the risk of serious harm to members of the community if an indefinite sentence were not imposed, a sentencing judge is required to consider the protective effect of the finite sentence that would otherwise be imposed. In this case, the prosecution argued, at first instance, for a life sentence. An examination of the sentencing judge's reasons indicates that he rejected that proposal mainly because of the pleas of guilty. On appeal, it was not argued that he erred in considering a nominal sentence of 22 years to be appropriate. Having identified 22 years as an appropriate nominal sentence, the learned judge was then required to consider, and explain in detail (s 168(1)), why a proper exercise of sentencing discretion called for the imposition of an indefinite sentence rather than such a lengthy finite term. Serious violent offenders will commonly present a danger to the community. Protecting the community may be one of the purposes of the imposition of a lengthy custodial sentence. Such custodial sentences remain the norm for the punishment of offenders convicted of serious offences of violence. Indefinite sentences are not the norm. Part 10 of the Act proceeds upon the basis that there may be certain cases where the extraordinary step of imposing an indefinite sentence may be justified as a response to the risk of serious danger to the community. The risk to be weighed is the risk "if an indefinite sentence were not imposed" (s 163(4)(d)). Where the appropriate finite term, according to ordinary sentencing principles, is 22 years, then it is necessary to consider whether the protective purpose in contemplation could reasonably be met by such 14 cf Strong v The Queen (2005) 79 ALJR 1171 at 1173-1174 [11], 1175-1176 [21]- [25], 1185 [72]; 216 ALR 219 at 222, 224-226, 238. Kirby Crennan a term. If it were otherwise, the consequence would be the banalisation of indefinite imprisonment. This is a case in which, on the available evidence, a sentencing court could properly have reached a conclusion that Pt 10 of the Act should be applied. On the other hand, there were important considerations of proportionality militating against such a conclusion. These included (1) the absence of any major criminal convictions, notably for any acts of violence, prior to the subject offences; (2) the appellant's pleas of guilty; (3) the fact that the subject charges, although extremely serious, all related to events that occurred within an interval of nine months and involved three happenings. The details of the sexual activities with animals were unproved. They had never been the subject of any criminal charges under the Code15. The appellant was not to be punished additionally in respect of those events16. Any feelings of distaste or revulsion concerning such activities should not enter into the sentencing process. The reasoning of the sentencing judge did not deal with the issues, including issues of predictability, involved in deciding why a sentence of 22 years should not have been imposed, having regard to relevant sentencing considerations, including the need to protect the community. One of the matters of particular difficulty in a case such as the present is the uncertainty that is necessarily involved in estimating the danger to the community of a person who, on any view, will be incarcerated for such a long time. The operation of the parole system, and the possibility of treatment while in prison, are matters that call for close attention. In a particular case, it may be that the system of review under Pt 10 provides the only appropriate method of relating the interests of the community to the requirements of justice to an individual offender. Nevertheless, the protective potential of the ordinary sentencing regime needs to be examined first and most closely before deciding to depart from it. Another difficulty raised by the present case, addressed in some detail by the psychiatrists, but referred to only briefly and without analysis in the reasons for sentence, is the relationship between the appellant's paraphilia and the level of risk that he would be likely to present in, say, 20 years time. The Court of Appeal should have given leave to appeal, and reconsidered the exercise of sentencing discretion involved in the decision to apply Pt 10 of the Act. In doing so in accordance with the statute and accepted sentencing 15 cf Criminal Code (Q), s 211. 16 The Queen v De Simoni (1981) 147 CLR 383. Kirby Crennan principles, it could have upheld the sentencing judge's order of indefinite detention. However such an outcome was by no means inevitable. It is important to say once again, as Hayne JA said in Moffatt17, that the power to impose an indefinite sentence is one "to be sparingly exercised, and then only in clear cases". This Court has repeatedly endorsed those remarks. From the reasons of the sentencing court it must be evident that they have been given their full weight whenever a sentence of indefinite detention is imposed. Orders The appeal should be allowed. The orders of the Court of Appeal should be set aside. The matter should be remitted to the Court of Appeal for further consideration in accordance with these reasons. 17 [1998] 2 VR 229 at 255.

HIGH COURT OF AUSTRALIA MINISTER FOR IMMIGRATION AND BORDER PROTECTION APPELLANT AND LIKUMBO MAKASA RESPONDENT Minister for Immigration and Border Protection v Makasa [2021] HCA 1 Date of Hearing: 12 November 2020 Date of Order: 12 November 2020 Date of Publication of Reasons: 3 February 2021 ORDER Appeal dismissed with costs. On appeal from the Federal Court of Australia Representation G T Johnson SC with N D J Swan for the appellant (instructed by Sparke Helmore Lawyers) A Ahmad with J D Donnelly for the respondent (instructed by Morning Star Legal & Migration Pty Ltd) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Minister for Immigration and Border Protection v Makasa Immigration – Visas – Visa cancellation – Character test – Substantial criminal record – Where delegate of Minister for Immigration and Border Protection ("Minister") cancelled respondent's visa on character grounds under s 501(2) of Migration Act 1958 (Cth) – Where Administrative Appeals Tribunal ("AAT") made decision under s 43(1)(c)(i) of Administrative Appeals Tribunal Act 1975 (Cth) to set aside delegate's decision and substitute a decision not to cancel visa – Where Minister purported to re-exercise discretion to cancel visa – Whether Minister can re-exercise discretion on same factual basis in circumstances where AAT earlier decided not to cancel visa. Words and phrases – "Administrative Appeals Tribunal", "character test", "different factual basis", "finality to the administrative decision-making process", "from time to time as occasion requires", "general power", "ministerial override", "nature of merits review", "powers of AAT", "reasonable suspicion", "re-exercise of a power", "special power", "substantial criminal record", "visa cancellation". Acts Interpretation Act 1901 (Cth), ss 2, 33(1). Administrative Appeals Tribunal Act 1975 (Cth), s 43. Migration Act 1958 (Cth), ss 501, 501A. KIEFEL CJ, GAGELER, KEANE, GORDON AND EDELMAN JJ. The question in this appeal is whether the Minister for Immigration and Border Protection ("the Minister") can re-exercise the power conferred by s 501(2) of the Migration Act 1958 (Cth) ("the Act") to cancel a visa after the Administrative Appeals Tribunal ("the AAT") has made a decision under s 43(1)(c)(i) of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act") setting aside a prior decision of a delegate of the Minister to cancel the visa and substituting a decision that the visa should not be cancelled. The answer turns on the construction of s 501(2) of the Act read in the context of the Act and the AAT Act and in light of the prescriptions of ss 2 and 33(1) of the Acts Interpretation Act 1901 (Cth) ("the AI Act") that, "subject to a contrary intention", "[w]here an Act confers a power ... then the power may be exercised ... from time to time as occasion requires". The Full Court of the Federal Court, by majority, answered the question in the negative in the decision under appeal1 for reasons given contemporaneously in Minister for Home Affairs v Brown2. The negative answer is correct, although not precisely for the reasons given in Brown. Convinced of that result, we made orders at the conclusion of the hearing, dismissing the appeal with costs. These are our reasons. The Act and the AAT Act Section 501(1) of the Act provides that "[t]he Minister may refuse to grant a visa to a person if the person does not satisfy the Minister that the person passes the character test". Section 501(2) provides: "The Minister may cancel a visa that has been granted to a person if: the Minister reasonably suspects that the person does not pass the character test; and the person does not satisfy the Minister that the person passes the character test." 1 Makasa v Minister for Immigration and Border Protection (2020) 376 ALR 191. (2020) 275 FCR 188. The "character test" is elaborated in s 501(6). To the extent relevant, that sub-section provides: "For the purposes of this section, a person does not pass the character test the person has a substantial criminal record (as defined by subsection having regard to either or both of the following: the person's past and present criminal conduct; the person's past and present general conduct; the person is not of good character; ... Otherwise, the person passes the character test." The definition of "substantial criminal record" in s 501(7), to the extent relevant, is as follows: "For the purposes of the character test, a person has a substantial criminal record if: the person has been sentenced to a term of imprisonment of 12 months or more; or the person has been sentenced to 2 or more terms of imprisonment, where the total of those terms is 12 months or more; ..." Each of the powers conferred by s 501(1) and by s 501(2) can be delegated by the Minister under s 496 of the Act. Where a delegate of the Minister exercises the power conferred by s 501(1) to refuse to grant a visa to a person, or exercises the power conferred by s 501(2) to cancel a visa that has been granted to a person, s 500(1)(b) of the Act allows the person to apply to the AAT for review of the decision of the delegate. Subject to the need for the AAT, no less than the delegate, to comply with directions about the exercise of the powers conferred by s 501(1) and s 501(2) given by the Minister under s 499, and subject to procedural modifications effected by s 500(6A)-(6L) of the Act, the powers of the AAT in the conduct of the ensuing review are those authorised to be exercised by the AAT Act. Section 43(1) of the AAT Act provides: "For the purpose of reviewing a decision, the Tribunal may exercise all the powers and discretions that are conferred by any relevant enactment on the person who made the decision and shall make a decision in writing: affirming the decision under review; varying the decision under review; or setting aside the decision under review and: making a decision in substitution for the decision so set aside; remitting the matter for reconsideration in accordance with any directions or recommendations of the Tribunal." Section 43(6) provides: "A decision of a person as varied by the Tribunal, or a decision made by the Tribunal in substitution for the decision of a person, shall, for all purposes ... be deemed to be a decision of that person and, upon the coming into operation of the decision of the Tribunal, unless the Tribunal otherwise orders, has effect, or shall be deemed to have had effect, on and from the day on which the decision under review has or had effect." Section 501A of the Act then confers powers by which the Minister is permitted to override a decision made by a delegate or by the AAT on review. The Minister can override a decision not to exercise the power conferred by s 501(1) to refuse to grant a visa and instead decide to refuse to grant the visa. Equally, the Minister can override a decision not to exercise the power conferred by s 501(2) to cancel a visa and instead decide to cancel the visa. Section 501A(1) is the gateway to s 501A. Section 501A(1) states: "This section applies if: a delegate of the Minister; or the Administrative Appeals Tribunal; makes a decision (the original decision): not to exercise the power conferred by subsection 501(1) to refuse to grant a visa to the person; or not to exercise the power conferred by subsection 501(2) to cancel a visa that has been granted to a person; whether or not the person satisfies the delegate or Tribunal that the person passes the character test and whether or not the delegate or Tribunal reasonably suspects that the person does not pass the character test." Application of s 501A through the operation of s 501A(1) triggers the potential for the Minister to exercise one or other of two specific powers. Each can be described as a "non-compellable and non-delegable power"3 in that each is permitted by s 501A(5) to be exercised only by the Minister personally and in that s 501A(6) makes clear that the Minister need not consider exercising either of them. However, the incidents of each are slightly different. The first of the two powers is that conferred by s 501A(2). Section 501A(2) is expressed to enable the Minister to set aside the original decision and refuse to grant a visa or cancel a visa if "the Minister reasonably suspects that the person does not pass the character test" and "the person does not satisfy the Minister that the person passes the character test" and "the Minister is satisfied that the refusal or cancellation is in the national interest". The second of the two powers is that conferred by s 501A(3). Section 501A(3) is expressed to enable the Minister to set aside the original decision and refuse to grant a visa or cancel a visa if "the Minister reasonably suspects that the person does not pass the character test" and "the Minister is satisfied that the refusal or cancellation is in the national interest". Exercise by the Minister of the power conferred by s 501A(3) is excused by s 501A(4) from compliance with procedural fairness, but triggers application of s 501C through the operation of s 501C(1). Section 501C(3) obliges the Minister to notify the person whose visa has been refused or cancelled under s 501A(3) and 3 Plaintiff S10/2011 v Minister for Immigration and Citizenship (2012) 246 CLR 636 to invite the person to make representations. Section 501C(4) then empowers the Minister, following receipt of any such representations, to revoke the decision to refuse or to cancel if, but only if, "the person satisfies the Minister that the person passes the character test". Section 501C(5) requires the power conferred by s 501C(4) to be exercised only by the Minister personally. Section 501C(8) compels the Minister to cause notice of a decision to revoke or not to revoke to be laid before each House of the Parliament. Facts Mr Makasa is a citizen of Zambia. He entered Australia on a student visa in 2001. He was granted a permanent residence visa in 2004. In 2009, Mr Makasa was convicted in the District Court of New South Wales of four offences all of which related to events concerning a single complainant occurring over a period of two days in 2006. One was an offence of aggravated sexual assault, which was later set aside on appeal to the Court of Criminal Appeal. The other three were offences of sexual intercourse with a person aged between 14 and 16 years of age, for which he was sentenced to three concurrent terms of imprisonment each of two years with a non-parole period of 12 months. Suspecting that Mr Makasa failed to pass the character test by reason of the sentences imposed in respect of the 2009 convictions, a delegate of the Minister in 2011 exercised the discretion conferred by s 501(2) of the Act to cancel his permanent residence visa. Mr Makasa appealed to the AAT. Eventually, in 2013, the AAT re-exercised the power conferred by s 501(2) of the Act to make a decision under s 43(1)(c)(i) of the AAT Act setting aside the decision of the delegate and substituting a decision that his visa should not be cancelled. In 2017, Mr Makasa was convicted in the Local Court of New South Wales of two further offences. One was of failing to comply with a reporting obligation, by failing to advise police in a timely way that he had downloaded a social media application which he used to communicate with his daughter, for which he was fined $300. The other was of driving under the influence of alcohol, for which he was disqualified from driving for 12 months and fined $1,200. The 2017 convictions again brought Mr Makasa to the attention of the Minister. Being satisfied that Mr Makasa failed to pass the character test solely by reason of the sentences imposed in respect of the 2009 convictions, but taking the 2017 convictions into account in the exercise of discretion, the Minister personally purported to again exercise the power conferred by s 501(2) of the Act to cancel his permanent residence visa. Mr Makasa applied to the Federal Court for judicial review of the Minister's decision. Burley J dismissed the application at first instance. The Full Court, by majority (Allsop CJ, Kenny and Banks-Smith JJ and Besanko J, Bromwich J dissenting), allowed Mr Makasa's appeal, set aside the dismissal, and substituted an order that the decision be quashed. From that decision the Minister, by special leave, appealed. The Full Court decision The reasoning of the Full Court can only be understood against the background of the reasoning in Brown, which was heard and decided contemporaneously by a Full Court constituted by the same five members. There too, a delegate of the Minister had exercised the power conferred by s 501(2) of the Act to cancel a visa on the basis of the visa holder having been sentenced to a term of imprisonment which amounted to a substantial criminal record and which therefore amounted, without more, to a failure to pass the character test. There too, the AAT on appeal had re-exercised the discretion conferred by s 501(2) of the Act resulting in a decision under s 43(1)(c)(i) of the AAT Act which set aside the decision of the delegate and substituted a decision that the visa should not be cancelled. Taking account of subsequent events not suggested to amount or contribute to a further failure to pass the character test, there too the Minister had purported to re-exercise the discretion conferred by s 501(2) of the Act to again cancel the visa. At first instance in Brown4, Colvin J took the view that, once exercised in respect of facts constituting a failure to pass the character test to decide not to cancel a visa, the power conferred by s 501(2) of the Act cannot be re-exercised in respect of the same failure to pass the character test to decide to cancel the visa. On appeal in Brown, Allsop CJ, Kenny and Banks-Smith JJ took a more limited view. Their view was that the power conferred by s 501(2) of the Act becomes incapable of being re-exercised to cancel a visa in respect of a failure to pass the character test only upon the making by the AAT of a decision under s 43(1)(c)(i) of the AAT Act setting aside a decision made by a delegate and substituting a decision that the visa should not be cancelled. 4 Brown v Minister for Home Affairs [2018] FCA 1722. Thus, Colvin J and Allsop CJ, Kenny and Banks-Smith JJ all took the view in Brown that the statutory scheme evinced an intention contrary to the unconstrained application to s 501(2) of the Act of s 33(1) of the AI Act. The main difference between them was as to the point at which the power conferred by s 501(2) of the Act becomes incapable of being re-exercised. Unlike Colvin J5, Allsop CJ, Kenny and Banks-Smith JJ6 interpreted the earlier decision of the Full Court in Parker v Minister for Immigration and Border Protection7 as having decided that the Minister can re-exercise the discretion conferred by s 501(2) of the Act to cancel a visa based on the same failure to pass the character test as had founded an earlier exercise of discretion by a delegate not to cancel the visa. Applying the standard for overruling prior decisions of the Full Court that has been adopted as a matter of policy in the Federal Court8, their Honours were not prepared to hold that Parker was "plainly wrong"9. The remaining members of the Full Court in Brown, Besanko J and Bromwich J, each took the view that a decision not to cancel a visa, whether made by a delegate or made by the AAT on review of a decision of a delegate, does not amount to an exercise of the power conferred by s 501(2) of the Act at all. Having not previously been exercised by the making of a decision not to cancel a visa, the power conferred by s 501(2) of the Act remains available to be exercised by the Minister or a delegate to cancel the visa based on the same failure to pass the character test quite independently of any application of s 33(1) of the AI Act. In the decision under appeal, each member of the Full Court adopted and applied the reasoning that member had set out in Brown. On the hearing of the appeal to this Court, the Minister urged adoption of the approach of Besanko and As will become apparent, the approach of Besanko and Bromwich JJ must be rejected. The approach of Colvin J is to be preferred to the approach of [2018] FCA 1722 at [61]-[77]. (2020) 275 FCR 188 at 193 [16], 209-211 [68]-[77]. (2016) 247 FCR 500. eg Transurban City Link Ltd v Allan (1999) 95 FCR 553 at 560-561 [26]-[31]. (2020) 275 FCR 188 at 193 [16]. Allsop CJ, Kenny and Banks-Smith JJ. To the extent that Parker contains reasoning to the contrary, that reasoning is not to be followed. Legislative history Together relevantly with ss 499, 501A and 501C, s 501 was inserted into the Act in substantially its current form by the Migration Legislation Amendment (Strengthening of Provisions relating to Character and Conduct) Act 1998 (Cth) ("the Amending Act"). Before the Amending Act, s 501 had made compendious provision to the effect that "[t]he Minister may refuse to grant a visa to a person, or may cancel a visa that has been granted to a person" if the Minister "having regard to ... the person's past criminal conduct ... or ... the person's general conduct ... is satisfied that the person is not of good character". Section 500 had allowed a person who had been refused a visa or whose visa had been cancelled by a decision under s 501 to apply to the AAT for review of the decision. The second reading speech for the Bill for the Amending Act10 referred to one of the purposes of the Amending Act as being to improve decision-making in routine cases by, amongst other things, introducing a new "character test", placing the onus on visa applicants and visa holders to satisfy decision-makers that they pass the character test, "establish[ing] clear benchmarks for criminal behaviour that would automatically lead to a non-citizen failing the character test", and allowing the Minister to give binding directions to decision-makers. The Explanatory Memorandum for the Bill for the Amending Act explained11: "Section 501 currently provides for a two stage process for refusal to grant or cancellation of a visa. The first stage involves a decision-maker making a finding of fact as to whether a person is 'not of good character'. The second stage is a discretion to grant or not to cancel a visa, despite a finding that a person is not of good character." 10 Australia, Senate, Parliamentary Debates (Hansard), 11 November 1998 at 59-60. 11 Australia, Senate, Migration Legislation Amendment (Strengthening of Provisions relating to Character and Conduct) Bill 1998, Explanatory Memorandum at 12. The Explanatory Memorandum went on to explain that s 501 in the form to be substituted would retain "a staged decision-making process", albeit that s 501(1) and s 501(2) would "place the burden of proof as to whether the character test is passed, on the visa applicant and visa holder, respectively". The Explanatory Memorandum explained the difference between the structure of s 501(1) and the structure of s 501(2) in relation to the placement of the burden of proof at the first of the two stages of the decision-making process as follows12: "The exercise of the discretion that the Minister may cancel a visa in new subsection 501(2), would remove a benefit that has been given to a person (that is, they are already a visa holder), hence the requirement that there be a reasonable suspicion that the person does not meet the character test before that person is then obliged to satisfy the Minister that he or she satisfies the character test. New subsection 501(1) relates to the power to refuse an application by a person seeking a benefit, that is, the grant of a visa. As a result, there is an absence of any preliminary requirement that there be a reasonable suspicion that the visa applicant does not satisfy the character test before that person is obliged to satisfy the Minister that they do satisfy the character test." The second reading speech for the Bill for the Amending Act referred to another of the purposes of the Amending Act as being to enable the Minister "in exceptional or emergency circumstances" to act "personally" and "decisively" on matters of visa cancellation and refusal13. Specifically addressing the justification for the powers to be conferred on the Minister under s 501A to override decisions of the AAT, the second reading speech referred to the AAT having made "a number of character decisions that are clearly at odds with community standards and expectations". The second reading speech stated that "[i]t is essential that the Minister, acting personally, have the power to intervene or set aside such decisions in the national interest"14. 12 Australia, Senate, Migration Legislation Amendment (Strengthening of Provisions relating to Character and Conduct) Bill 1998, Explanatory Memorandum at 12. 13 Australia, Senate, Parliamentary Debates (Hansard), 11 November 1998 at 59. 14 Australia, Senate, Parliamentary Debates (Hansard), 11 November 1998 at 60-61. Construction of s 501(2) of the Act Bearing centrally on the construction of s 501(2) of the Act is recognition that s 501(2) confers a single power that is exercised by the Minister or a delegate in the first instance, and that is re-exercised by the AAT under s 43(1) of the AAT Act on review, according to a two-stage decision-making process. The first stage of the decision-making process begins with the decision-maker forming a reasonable suspicion that the visa holder in question does not pass the character test. By operation of s 501(6), a person either passes the character test or does not. The person does not pass the character test in any one or more of the circumstances exhaustively enumerated in s 501(6). Otherwise, the person passes the character test. Reasonable suspicion is a state of mind − "a state of conjecture or surmise" − that is based on "sufficient grounds reasonably to induce that state of mind"15. The necessary precondition to the decision-maker forming a reasonable suspicion that the visa holder does not pass the character test is therefore the existence of facts sufficient to induce a reasonable person to surmise that one or more of the circumstances exhaustively enumerated in s 501(6) has occurred. The decision-maker having formed a reasonable suspicion that the visa holder does not pass the character test, the first stage of the decision-making process is completed by the decision-maker making a binary decision either to be satisfied by the visa holder that he or she passes the character test or not to be so satisfied and in consequence to maintain the reasonable suspicion. Satisfaction too is a state of mind − an "actual persuasion of [the] occurrence or existence"16 of the thing in issue. Implicit in the statutory placing of the onus on the visa holder to satisfy the decision-maker that he or she passes the character test is a requirement of procedural fairness that the visa holder be given notice and an opportunity to make representations before the first stage of the decision-making process can be completed. Implicit in the statutory need for satisfaction or 15 George v Rockett (1990) 170 CLR 104 at 113, 115. 16 Briginshaw v Briginshaw (1938) 60 CLR 336 at 361. non-satisfaction is that the satisfaction or non-satisfaction is to be reasonably based on the totality of the facts then known to the decision-maker17. If the outcome of the first stage of the decision-making process is that the decision-maker is satisfied by the visa holder that he or she passes the character test, the only decision open to the decision-maker is not to cancel the visa. The decision-making process necessarily ends with the making of that decision. The second stage of the decision-making process is reached only if the outcome of the first stage is that the decision-maker, not being satisfied that the visa holder passes the character test, maintains a reasonable suspicion that the visa holder does not pass the character test by reason of the occurrence of one or more of the circumstances set out in s 501(6). The second stage then involves the decision-maker, reasonably18 and in compliance with applicable directions given under s 499, exercising a discretion the outcome of which is the making by the decision-maker of a further binary decision either to cancel the visa in the exercise of discretion or not to cancel the visa in the exercise of discretion. Accordingly, exercise of the power in every case begins with the decision-maker forming a reasonable suspicion that a visa holder does not pass the character test and exercise of the power in every case ends with a decision either to cancel the visa or not to cancel the visa. The decision that constitutes the end point of the exercise of the power, if it be to cancel the visa, can only have come about because the decision-maker has not been satisfied by the visa holder that he or she passes the character test and has gone on to exercise discretion to cancel the visa. If the decision be not to cancel the visa, the decision can have come about either because the decision-maker has been satisfied by the visa holder that he or she passes the character test or because the decision-maker has gone on to exercise discretion not to cancel the visa. Whether the decision is to cancel the visa or not to cancel the visa, the decision is therefore the end point of an exercise of the power conferred by s 501(2) of the Act. That is so of a decision to cancel or not to cancel reached by the Minister or a delegate in an initial exercise of the power. And it is so of a decision to cancel 17 Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 205 CLR 507 at 532 [73]; Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 447 [167]. 18 Minister for Immigration and Border Protection v Stretton (2016) 237 FCR 1. or not to cancel reached by the AAT on review in a re-exercise of the power under s 43(1)(c)(i) of the AAT Act. The consequence is that, if the Minister or a delegate is to make a subsequent decision to cancel a visa under s 501(2) of the Act, superseding a decision of the Minister or a delegate in the first instance or of the AAT on review not to cancel the visa, that subsequent decision can only occur through a re-exercise of the power conferred by s 501(2) of the Act. The determinative question therefore becomes whether, and if so when, the power conferred by s 501(2) of the Act, having once been exercised by the Minister or a delegate in the first instance or re-exercised by the AAT on review not to cancel a visa, can be re-exercised by the Minister or a delegate to cancel the visa. The answer turns on an examination of whether, and if so to what extent, there appears sufficiently for the purposes of s 2 of the AI Act an intention contrary to the application of the general prescription in s 33(1) of the AI Act that a statutory power "may be exercised ... from time to time as occasion requires". Before turning to examine the extent to which the scheme of the Act and the AAT Act manifest an intention contrary to the application of s 33(1) of the AI Act, some aspects of the operation of s 33(1) of the AI Act ought to be noted. The section is enacted against the background of "an inconvenient common law doctrine of somewhat uncertain extent to the effect that a power conferred by statute was exhausted by its first exercise"19. The section counters that doctrine not by itself conferring any power but by requiring that a provision conferring a power be interpreted as authorising the power it confers to be exercised and re-exercised from time to time. The section does not alter the incidents of the power spelt out in the terms of the provision conferring the power. The words "as occasion requires" acknowledge the need for the repository of the power to comply with the incidents of the power spelt out in the terms of the provision. They are not words of additional limitation. That s 33(1) of the AI Act does not alter the incidents of the statutory power to which it applies significantly limits the potential scope of its application to s 501(2) of the Act. To the extent applicable, s 33(1) requires s 501(2) to be interpreted as authorising re-exercise of both stages of two-stage decision-making process which s 501(2) entails. Merely to re-exercise the the 19 Minister for Immigration and Ethnic Affairs v Kurtovic (1990) 21 FCR 193 at 211, quoting Halsbury's Laws of England, 1st ed, vol 27 at 131. discretion that arises at the second stage of that decision-making process would be inimical to s 33(1). The final aspect of s 33(1) of the AI Act that ought to be noted is a matter of controversy. Controversy has arisen and remains unresolved in the Federal Court as to whether the re-exercise of a statutory power contemplated by s 33(1) extends to revocation of an exercise of the statutory power that has resulted in an alteration of legal rights20. The controversy about revocation would, on one view, arise to be addressed were the question whether the power conferred by s 501(2) of the Act, having once been exercised to cancel a visa, can be re-exercised so as not to cancel the visa21. Given that the question is whether that power, having once been exercised not to cancel a visa, can be re-exercised to cancel the visa, the controversy about revocation can be put to one side. Turning then to the scheme of the Act and the AAT Act, it is important at the outset to recognise that nothing in the legislative scheme indicates an intention to displace the application of s 33(1) of the AI Act to the power conferred by s 501(2) of the Act to the extent that subsequent events or further information not previously before the Minister or a delegate provide a different factual basis upon which to form a reasonable suspicion that a visa holder does not pass the character test. A new sentence of imprisonment amounting by operation of s 501(7)(c), or contributing by operation of s 501(7)(d), to the coming into existence of a new substantial criminal record within the meaning of s 501(6)(a) is an example. A new conviction providing a reasonable basis for making a revised assessment of the visa holder's "character" − his or her "enduring moral qualities"22 − under s 501(6)(c) is another example. Section 501(6)(c) was not argued to be engaged in this appeal. To the extent that the scheme of the Act and the AAT Act exhibit an intention contrary to the application of s 33(1) of the AI Act to the power conferred by s 501(2) of the Act, absent subsequent events or further information providing a different factual basis for the formation of a reasonable suspicion that a visa 20 See Minister for Indigenous Affairs v MJD Foundation Ltd (2017) 250 FCR 31. 21 cf Minister for Immigration and Multicultural and Indigenous Affairs v Watson (2005) 145 FCR 542 at 546-547 [18]-[24]. 22 Minister for Immigration and Multicultural Affairs v Gunner (1998) 84 FCR 400 at 408; Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 205 CLR 507 at 529 [65]. holder does not pass the character test, such an intention emerges by reference to two principal considerations. One is narrower in its ambit and arises from the generic operation of the AAT Act; the other is broader in its ambit and specific to the relationship between s 501(2) and s 501A of the Act. Looking to the generic operation of the AAT Act, an intention not to allow further re-exercise of a power by a primary decision-maker after re-exercise of that power by the AAT under s 43(1)(b) or (c)(i) of the AAT Act on review of an earlier exercise of power by the primary decision-maker is inherent in the nature of the merits review function for which it is the design of s 43 of the AAT Act to make provision. The merits review function of the AAT is "to stand in the shoes of the decision-maker whose decision is under review so as to determine for itself on the material before it the decision which can, and which it considers should, be made in the exercise of the power or powers conferred on the primary decision-maker for the purpose of making the decision under review"23. The function of the AAT, in other words, is "to do over again" that which was done by the primary decision-maker24. The function would be reduced to a mockery were the subject-matter of the decision made by the AAT on review able to be revisited by the primary decision-maker in the unqualified re-exercise of the same statutory power already re-exercised by the AAT in the conduct of the review. The object of s 43(6) of the AAT Act, in deeming a decision made by the AAT under s 43(1)(b) or (c)(i) in variation of or substitution for the decision under review to be a decision of the primary decision-maker, is to bring finality to the administrative decision-making process. Like any other legal fiction, the deeming effected by s 43(6) of the AAT Act cannot be taken to have a legal operation beyond that required to achieve the object of its enactment25. Section 43(6) cannot be taken so far as to be read as requiring an exercise of power by the AAT to be treated as no more than an exercise of power by the primary decision-maker which 23 Frugtniet v Australian Securities and Investments Commission (2019) 266 CLR 250 24 Shi v Migration Agents Registration Authority (2008) 235 CLR 286 at 315 [100], quoting Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation (1963) 113 CLR 475 at 502. 25 Queensland v Congoo (2015) 256 CLR 239 at 302 [165], citing Wellington Capital Ltd v Australian Securities and Investments Commission (2014) 254 CLR 288 at the primary decision-maker is able by operation of s 33(1) of the AI Act simply to re-exercise. Looking next to s 501A of the Act, however, there emerges a somewhat broader intention limiting the scope of the application of s 33(1) of the AI Act to the power conferred by s 501(2). Part of the purpose of s 501A is to confer specific powers on the Minister to revisit and reverse a decision not to cancel a visa in the exercise of the power conferred by s 501(2). That is so whether the decision not to cancel is made by a delegate or by the AAT. And it is so whether the reason for the decision not to cancel a visa is satisfaction by the delegate or the AAT that the visa holder passes the character test or an exercise of discretion by the delegate or the AAT not to cancel the visa. So much is spelt out in s 501A(1). As powers of ministerial override, each of the specific powers conferred on the Minister by s 501A(2) and s 501A(3) can be exercised by the Minister without need for any change to the factual basis on which the delegate or the AAT formed a reasonable suspicion that the visa holder did not pass the character test in making the decision not to cancel a visa. However, the circumstance that each of the specific powers conferred on the Minister by s 501A(2) and s 501A(3) can only be exercised by the Minister personally and can only be exercised if the Minister is satisfied that cancellation is in the national interest is sufficient to invoke the well-settled principle of construction that "when a statute confers both a general power, not subject to limitations and qualifications, and a special power, subject to limitations and qualifications, the general power cannot be exercised to do that which is the subject of the special power"26. The further qualifications imposed by s 501C on an exercise of power under s 501A(3) reinforce the application of that interpretative principle. Hence, s 501A of the Act must be read as manifesting a legislative intention to exclude re-exercise by the Minister or a delegate of the more general power conferred by s 501(2) of the Act, read in light of s 33(1) of the AI Act, to revisit and reverse a previous decision of a delegate not to cancel a visa made in the exercise of the power conferred by s 501(2) where there has been no change to the factual basis on which the previous decision-maker, be it the Minister or a delegate 26 Leon Fink Holdings Pty Ltd v Australian Film Commission (1979) 141 CLR 672 at 678, referring to Anthony Hordern and Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1 at 7. or the AAT, formed a reasonable suspicion that the visa holder did not pass the character test in making the previous decision not to cancel a visa. Result The result, in short, is that a decision of a delegate or the AAT not to cancel a visa made in the exercise of the power conferred by s 501(2) of the Act on the basis of facts giving rise to a reasonable suspicion that a visa holder does not pass the character test is final, subject only to ministerial override in the exercise of the specific power conferred by s 501A. The Minister or a delegate can re-exercise the power conferred by s 501(2) to cancel the visa if subsequent events or further information provide a different factual basis for the Minister or a delegate to form a reasonable suspicion that a visa holder does not pass the character test at the first stage of the requisite two-stage decision-making process. But neither the Minister nor the delegate can rely on subsequent events or further information simply to re-exercise the discretion to cancel the visa at the second stage of the decision-making process. That result is in harmony with the holding of the Full Court of the Federal Court in Minister for Immigration and Multicultural and Indigenous Affairs v Watson27 that s 33(1) of the AI Act does not operate on the power conferred by s 501(2) of the Act to extend to permit the Minister to respond to representations urging re-exercise of the power to revoke the cancellation of a visa by reference to considerations going to the exercise of discretion. To the extent that the decision of the Full Court in Parker can be read to suggest that s 33(1) of the AI Act authorises re-exercise of the power conferred by s 501(2) of the Act to cancel a visa by reference to events subsequent to an earlier exercise of the power not to cancel the visa which bear only on the exercise of discretion, Parker must be taken to have been wrongly decided. (2005) 145 FCR 542.

HIGH COURT OF AUSTRALIA BRF038 AND APPELLANT THE REPUBLIC OF NAURU RESPONDENT BRF038 v The Republic of Nauru [2017] HCA 44 18 October 2017 ORDER Appeal allowed with costs. Set aside the order made by the Supreme Court of Nauru on 22 February 2017, and in its place order that: the decision of the Refugee Status Review Tribunal made on 15 March 2015 be quashed; the matter be remitted to the Refugee Status Review Tribunal for reconsideration according to law; and the respondent pay the appellant's costs of the appeal. On appeal from the Supreme Court of Nauru Representation G A Costello and A N P McBeth for the appellant (instructed by Allens) C J Horan QC with N M Wood for the respondent (instructed by Republic of Nauru) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS BRF038 v The Republic of Nauru Appeal – Supreme Court of Nauru – Where Refugees Convention Act 2012 (Nr), s 43(1) confers right to "appeal" to Supreme Court against a decision by Refugee Status Review Tribunal not to recognise person as a refugee – Whether Supreme Court was exercising original jurisdiction when determining "appeal" from Tribunal – Whether appeal from Supreme Court to High Court lay as of right. Migration – Refugees – Where Refugees Convention Act 2012 (Nr), s 3 adopts definition of "refugee" under Refugees Convention as modified by Refugees Protocol – Where Refugees Convention requires "well-founded fear of being persecuted" – Where Tribunal found harm appellant and family faced constituted discrimination, but not persecution – Whether Supreme Court erred in failing to hold that Tribunal applied wrong test in determining whether appellant suffered persecution – Whether Tribunal required total deprivation of appellant's human rights to find persecution. Migration – Refugees – Where Refugees Convention Act 2012 (Nr), s 22(b) provides that Tribunal "must act according to the principles of natural justice and the substantial merits of the case" – Where appellant stated that Somalian authorities were unwilling to assist him and his family due to ethnicity – Where Tribunal relied on country information indicating that there are police from every tribe in Somaliland to conclude appellant would have "some redress from the acts of others" – Whether failure by Tribunal to put substance of information to appellant constituted breach of requirements of procedural fairness. Words and phrases – "appeal", "country information", "credible, relevant and significant", "original fairness", "well-founded fear of persecution". jurisdiction", "persecution", "procedural Appeals Act 1972 (Nr), s 44. Nauru (High Court Appeals) Act 1976 (Cth), ss 5, 8. Refugees Convention Act 2012 (Nr), ss 3, 5(1), 6(1), 22(b), 31(1), 37, 43(1), 44. Refugees Convention (Derivative Status & Other Measures) (Amendment) Act 2016 (Nr), ss 5, 6, 24. Refugees Convention (Amendment) Act 2017 (Nr), ss 4, 5, 6, 7. Agreement between the Government of Australia and the Government of the Republic of Nauru Relating to Appeals to the High Court of Australia from the Supreme Court of Nauru (1976), Art 1. Convention relating to the Status of Refugees (1951) as amended by the Protocol relating to the Status of Refugees (1967), Art 1A(2). KEANE, NETTLE AND EDELMAN JJ. The appellant is from the Awdal Province in Somaliland, an autonomous region in Somalia. He is a Sunni Muslim and a member of the Gabooye tribe1. His mother and four brothers live in Somaliland; another brother lives in Ethiopia. His father died in 19992. In September 2013, the appellant arrived by boat at Christmas Island. He was subsequently transferred to the Republic of Nauru3. There he applied to the Secretary of the Department of Justice and Border Control of Nauru ("the Secretary") for refugee status. The appellant told the authorities at the Nauru Regional Processing Centre that he left Somalia in 2006 and travelled to Yemen after his father passed away, because of "war, trouble and [the fact that] we didn't have anybody to provide for us", and due to hunger and starvation. He said that he left Yemen due to racism and a lack of security. He travelled from Yemen to Indonesia, via Malaysia, in August 2013. The following month, he boarded a boat to Christmas Island4. The appellant's application for refugee status was refused by the Secretary. His application to the Refugee Status Review Tribunal ("the Tribunal") for review of the Secretary's determination failed, as did his subsequent appeal to the Supreme Court of Nauru. The appellant now appeals to this Court, contending that the Supreme Court erred in applying the wrong test to determine whether the appellant was a refugee within the Refugees Convention Act 2012 (Nr) ("the Refugees Act"), and in failing to hold that the Tribunal did not accord him procedural fairness in making that determination. The appeal to this Court should be allowed, the decision of the Tribunal the Secretary's the appellant's application for review of quashed and determination remitted to the Tribunal, on the basis that the Tribunal failed to accord the appellant procedural fairness in its review of the determination of the Secretary. 1 BRF038 v The Republic [2017] NRSC 14 at [3]. 2 BRF038 v The Republic [2017] NRSC 14 at [4]. 3 BRF038 v The Republic [2017] NRSC 14 at [9]. 4 BRF038 v The Republic [2017] NRSC 14 at [9]. Nettle Edelman The application to the Secretary The legislation The long title of the Refugees Act is "An Act to give effect to the Refugees Convention; and for other purposes". Section 3 defines "refugee" as "a person who is a refugee under the Refugees Convention as modified by the Refugees Protocol". Read together, those treaties5 establish that a refugee is someone who: "owing to well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country; or who, not having a nationality and being outside the country of his former habitual residence, is unable or, owing to such fear, is unwilling to return to it". Section 5(1) entitles a person to apply to the Secretary to be recognised as a refugee. At the time of the appellant's application to the Secretary, s 6(1) relevantly stated that "[s]ubject to this Part, the Secretary must determine whether an asylum seeker is recognised as a refugee". The appellant's case for refugee status The appellant's application to the Secretary was made on 26 February 2014. It alleged a fear of persecution arising from membership of the Gabooye tribe. The application referred, among other things, to an incident that took place in 2004 during which the appellant, while playing soccer, got into a fight with a boy from another tribe. The boy threatened the appellant with a gun, stating that the appellant should not have fought him as he (the appellant) was from a lower caste tribe. The appellant went into hiding in order to avoid being confronted by the other boy6. This incident was said to exemplify the manner in which the members of the appellant's tribe were treated. The treatment was said by the appellant to have caused him "significant mental stress". 5 Convention relating to the Status of Refugees (1951) as amended by the Protocol relating to the Status of Refugees (1967). 6 BRF038 v The Republic [2017] NRSC 14 at [5]. Nettle Edelman As mentioned, the appellant said that he left Somalia for Yemen in 2006. While in Yemen, the appellant worked washing dishes and in other menial jobs7. He also registered with the United Nations High Commissioner for Refugees, but he was not interviewed by the High Commissioner. In Yemen, he had no right to work or to access education8. The appellant stated that, in 2007, his family's farm was taken by members of another tribe. When the appellant's mother confronted the men who took the farm from her, they refused to leave, saying that they had a right to the farm as they were from a higher caste tribe. The appellant said that they told his mother to leave the farm or she would die. The appellant said that, in 2009, the appellant's mother's shop was robbed by men from another tribe. She was threatened at gunpoint. She confronted a family member of one of the thieves the next day, but was told that she had no rights as a member of a minority tribe. She complained to government authorities, but was told that they could not assist9. The appellant stated that the Somalian authorities were unwilling to assist him and his family due to their ethnicity. He said that there was nowhere in Somalia where he would be safe, as racism, discrimination and militant groups existed across the country. He had only ever lived in Awdal Province and had no networks outside that province that could support or protect him. He feared that he would be unable to relocate without exposing himself to an increased risk of harm. In addition, the appellant alleged that he was an opponent of the group Al-Shabaab, which terrorised members of his tribe, perpetrated violence throughout Somalia and forcefully recruited members from tribes that it considered weaker than them, including the Gabooye tribe. He asserted that he feared abduction by Al-Shabaab should he return to Somalia and persecution on the basis of his prolonged absence from Somalia – a circumstance that, he said, would lead groups such as Al-Shabaab to think that he was no longer religiously observant – and because he would be regarded as opposed to groups such as Al-Shabaab due to the violence that such groups had perpetrated against the Gabooye tribe. 7 BRF038 v The Republic [2017] NRSC 14 at [8]. 8 BRF038 v The Republic [2017] NRSC 14 at [6]. 9 BRF038 v The Republic [2017] NRSC 14 at [7]. Nettle Edelman The decision On 21 September 2014, the Secretary refused the appellant's application for refugee status. The decision record stated that the Secretary was sceptical as to aspects of the appellant's account. The Secretary found that there was a reasonable possibility that the appellant would suffer low levels of discrimination based on his membership of the Gabooye tribe, but that all other aspects of his claimed fear of persecution were not well-founded. That the discrimination that the appellant might face did not rise to the level of persecution was said to be demonstrated by the appellant's brothers' ability to receive an education and his mother's ability to earn an income despite any discrimination and stigma that they suffered by reason of their membership of the Gabooye tribe. Review by the Tribunal The legislation Section 11 of the Refugees Act establishes the Tribunal. Section 31(1) provides that a person may apply to the Tribunal for merits review of a determination that they not be recognised as a refugee. Section 22(b) provides that the Tribunal "must act according to the principles of natural justice and the substantial merits of the case". Section 36 entitles the Tribunal, in conducting a review, to invite a person to provide information, orally or in writing, and to obtain information that it considers relevant by any other means. At the time of the review by the Tribunal, s 37 imposed further obligations on the Tribunal in conducting a review. It provided as follows: "The Tribunal must: give to the applicant, in the way that the Tribunal considers appropriate in the circumstances, clear particulars of information that the Tribunal considers would be the reason, or a part of the reason, for affirming the determination or decision that is under review; and ensure, as far as is reasonably practicable, that the applicant understands why it is relevant to the review, and the consequences of it being relied on in affirming the determination or decision that is under review; and invite the applicant to comment on or respond to the information." Nettle Edelman Section 40(1) of the Refugees Act requires the Tribunal to invite an applicant to appear before it to give evidence and present arguments relating to the issues arising in relation to the determination or decision under review. The decision The Tribunal's decision was delivered on 15 March 2015. The Tribunal found that the harm that the appellant and his family faced constituted discrimination, but did not rise to the level of persecution. The Tribunal accepted that the appellant was a member of the Gabooye tribe10, and that the Gabooye were a minority group who faced discrimination, which included relegation to undesirable and low-paying professions, difficulty in accessing education, prevention of inter-marriage with other tribes and difficulty in accessing justice11. The Tribunal accepted that the appellant's family were forced off their land due to their perceived low caste status. However, it noted that the land did not belong to the appellant's family, but rather was vacant land that his family were farming. The Tribunal went on to accept that the land probably did not belong to those who forced the appellant's family off it. The Tribunal found that "[a]fter this occurred the [appellant's] mother then earned a living – or rather, a subsistance [sic] – by selling items."12 The Tribunal found that the appellant had received up to 10 years of education13. It noted that two of his brothers were working and his mother was able to earn a "bare living" and that, based on his family's experience, members of the Gabooye tribe were able to obtain employment and earn an income, albeit at a subsistence level14. It found that the appellant left Somalia in search of a better life and better employment prospects15. 10 BRF038 unreported, Refugee Status Review Tribunal, 15 March 2015 at [26]. 11 BRF038 unreported, Refugee Status Review Tribunal, 15 March 2015 at [36]. 12 BRF038 unreported, Refugee Status Review Tribunal, 15 March 2015 at [28]. 13 BRF038 unreported, Refugee Status Review Tribunal, 15 March 2015 at [30]. 14 BRF038 unreported, Refugee Status Review Tribunal, 15 March 2015 at [31]. 15 BRF038 unreported, Refugee Status Review Tribunal, 15 March 2015 at [32]. Nettle Edelman The Tribunal also referred to country information that it said established that Somaliland was "the safest region within Somalia with a functioning government, judiciary and security forces"16. The Tribunal found that the appellant and his family had not suffered any "serious violation of their human rights" and had not been persecuted by reason of their membership of the Gabooye tribe17. In the course of directly addressing the question whether the appellant had a well-founded fear of persecution as a result of his membership of the Gabooye tribe18, in a passage that is sufficiently important to be set out at length, the Tribunal concluded that the harm faced by the appellant and his family in the past involved discrimination, but that it19: "was not of sufficient seriousness to amount to persecution and [the appellant's family's] living conditions were not intolerable. It did not amount to a breach of [the appellant's] non derogable human rights. He was able to obtain an education and the family was able to earn a bare living. The Tribunal does not accept, based on his and his family's past experiences and the country information, that there is a reasonable possibility that the [appellant] would be subjected to a threat to his life or physical freedom as a member of the Gabooye tribe in Somaliland. Although the [appellant] has been subjected to discrimination in the past, the Tribunal does not accept that he would suffer torture or cruel, inhuman or degrading treatment or punishment in Somaliland. The country information indicates that there are police from every tribe in Somaliland so he would have some redress from the acts of others. The [appellant] may be only able to work in lowly paid employment but would be able to subsist as he did in the past and as his family members currently do. He was able to obtain a limited education in the past and although the Tribunal accepts that he would not be able to study agriculture, the Tribunal does not find that this can be called a serious breach of his human rights and it is therefore not persecution. The [appellant's] family has somewhere to live, albeit a basic dwelling. The Tribunal find[s] that the discriminatory conduct that the [appellant] may be subjected to on return to Somalia, even when considered cumulatively, does not amount to 16 BRF038 unreported, Refugee Status Review Tribunal, 15 March 2015 at [33]. 17 BRF038 unreported, Refugee Status Review Tribunal, 15 March 2015 at [38]. 18 BRF038 unreported, Refugee Status Review Tribunal, 15 March 2015 at [20]. 19 BRF038 unreported, Refugee Status Review Tribunal, 15 March 2015 at [47]-[48]. Nettle Edelman persecution within the meaning of the Convention. Consequently the Tribunal finds that the [appellant] does not have a well-founded fear of persecution for reason of his membership of the Gabooye tribe and that he is not a refugee on this basis." (footnote omitted) The Tribunal went on to reject the appellant's claims of feared persecution arising from his perceived opposition to Al-Shabaab and other militant groups20 and his having lived overseas for a significant period21. The appeal to the Supreme Court The appellant appealed to the Supreme Court on the grounds, relevantly, that the Tribunal erred in finding that the discrimination faced by the appellant did not amount to persecution and that the Tribunal had denied the appellant procedural fairness22. The legislation Section 43(1) of the Refugees Act provides that a person may "appeal" to the Supreme Court of Nauru against a decision by the Tribunal that they not be recognised as a refugee. The Supreme Court may either make an order affirming the decision of the Tribunal or make an order remitting the matter to the Tribunal23. It is to be noted that, if an order is made remitting the matter, the Supreme Court is also empowered to "quash" the decision of the Tribunal24. The decision The Supreme Court (Crulci J) rejected the grounds advanced by the appellant, and made an order affirming the decision of the Tribunal. Her Honour held that the Tribunal's finding that the discrimination that the appellant's family experienced did not rise to the level of persecution was open to the Tribunal on the evidence. The judge pointed particularly to the circumstance 20 BRF038 unreported, Refugee Status Review Tribunal, 15 March 2015 at [49]-[56]. 21 BRF038 unreported, Refugee Status Review Tribunal, 15 March 2015 at [57]-[60]. 22 BRF038 v The Republic [2017] NRSC 14 at [23]. 23 Refugees Act, s 44(1). 24 Refugees Act, s 44(2)(b). Nettle Edelman that the appellant's family had been able to sustain themselves and earn a living in Somaliland25. The appellant's contention that he was not accorded procedural fairness by the Tribunal was based on the Tribunal's reliance upon country information that the Somaliland police comprised members of every tribe26. This was said to be information that the Tribunal ought to have put to him so that he would have been allowed to respond. The Supreme Court accepted that the country information regarding the tribal composition of the Somaliland police, upon which the Tribunal acted, had not been put to the appellant, but held that the information was not "critical to the decision", and therefore that this failure was not a breach of the rules of procedural fairness27. Before proceeding to a discussion of the grounds of appeal against the Supreme Court's decision, it is necessary to deal with a point of procedure which is not now in contention between the parties. An appeal as of right Initially, an issue was raised in the appeal to this Court as to whether leave to appeal is required from this Court on the basis that the order of the Supreme Court of Nauru was made in the exercise of its appellate, rather than original, jurisdiction. It is now common ground between the parties that the appellant's appeal to this Court lies as of right because the Supreme Court of Nauru was exercising its original jurisdiction when it determined the "appeal" from the Tribunal. That view is correct. It is desirable to explain why that is so. Appeals to this Court from the Supreme Court of Nauru are governed by the Appeals Act 1972 (Nr) and the Nauru (High Court Appeals) Act 1976 (Cth). Section 44 of the Appeals Act relevantly provides: "Subject to the provisions of section 45, an appeal shall lie to the High Court: against any final judgment, decree or order of the Supreme Court in any cause or matter, not being a criminal proceeding or an appeal from any other Court or tribunal; 25 BRF038 v The Republic [2017] NRSC 14 at [30]-[31]. 26 See BRF038 unreported, Refugee Status Review Tribunal, 15 March 2015 at [48]. 27 BRF038 v The Republic [2017] NRSC 14 at [42]. Nettle Edelman (c) with the leave of the High Court, against any judgment, decree or order of the Supreme Court in the exercise of its appellate jurisdiction under Part III of this Act or under any other written law, except Part II of this Act; and the High Court has jurisdiction to hear and determine the appeal." Section 5 of the Nauru (High Court Appeals) Act provides: "(1) Appeals lie to the High Court of Australia from the Supreme Court of Nauru in cases where the Agreement provides that such appeals are to lie. The High Court has jurisdiction to hear and determine appeals mentioned in subsection (1). (3) Where the Agreement provides that an appeal is to lie to the High Court of Australia from the Supreme Court of Nauru with the leave of the High Court, the High Court has jurisdiction to hear and determine an application for such leave." The "Agreement" to which s 5 refers is the Agreement between the Government of Australia and the Government of the Republic of Nauru Relating to Appeals to the High Court of Australia from the Supreme Court of Nauru ("the Agreement"). Article 1 of the Agreement provides: "Subject to Article 2 of this Agreement, appeals are to lie to the High Court of Australia from the Supreme Court of Nauru in the following cases: In respect of the exercise by the Supreme Court of Nauru of its original jurisdiction – In criminal cases – as of right, by a convicted person, against conviction or sentence. In civil cases – as of right, against any final judgment, decree or order; and Nettle Edelman (ii) with the leave of the trial judge or the High Court of Australia, against any other judgment, decree or order. In respect of the exercise by the Supreme Court of Nauru of its appellate jurisdiction – In both criminal and civil cases, with the leave of the High Court." Under s 8 of the Nauru (High Court Appeals) Act, this Court may affirm, reverse or modify the judgment of the Supreme Court of Nauru, and make such order as ought to have been made by that Court. The appeal to this Court comes pursuant to s 44(a) of the Appeals Act, rather than s 44(c). Notwithstanding the use of the word "appeal" in s 43(1) of the Refugees Act, it is apparent that the Supreme Court was exercising its original jurisdiction in conducting judicial review of the decision of the Tribunal. In this regard, the Tribunal did not exercise judicial power, much less the jurisdiction of the Supreme Court, in conducting its review of the decision of the Secretary28. Rather, the Tribunal conducted an administrative review of the merits of the case. The decision of the Supreme Court, on "appeal" from the Tribunal, was therefore an exercise by the Court of its original jurisdiction. Accordingly, the appeal to this Court lies under s 44(a) of the Appeals Act; and in accordance with s 5 of the Nauru (High Court Appeals) Act and Art 1(A)(b)(i) of the Agreement, the appeal to this Court lies as of right. The test for persecution In this Court, the appellant argued that the Supreme Court erred in failing to hold that the Tribunal applied the wrong test in determining whether the appellant suffered "persecution" within the meaning of the Refugees Convention by requiring the total deprivation of the appellant's human rights in order to find that he faced persecution. It was said that, when regard is had to the factual findings of the Tribunal, it is apparent that its conclusions necessarily bespeak an erroneous understanding of what is involved in "persecution" within the meaning of the Refugees Convention. The appellant's argument cannot be accepted. It overstates the stringency of the approach adopted by the Tribunal. The Tribunal did not purport to 28 Cf Ruhani v Director of Police (2005) 222 CLR 489 at 510-511 [49]-[50] per McHugh J; [2005] HCA 42. Nettle Edelman articulate, or apply, any exhaustive "test" for persecution which could be satisfied only by the total deprivation of a person's human rights. On the contrary, the Tribunal observed, correctly, that attempts to formulate a definition of "persecution" have "met with little success"29. In Minister for Immigration and Border Protection v WZAPN30, the plurality accepted that, as suggested by Professor Goodwin-Gill31, "persecution is … very much a question of degree and proportion". Whether a person has a well-founded fear of persecution is a fact-dependent question on which reasonable minds may differ32. In WZAPN33, the plurality referred, with evident approval, to the observation of Lord Millett in Islam v Secretary of State for the Home Department34 that "[t]he denial of human rights … is not the same as persecution, which involves the infliction of serious harm." The findings of the Tribunal were not such as to compel the conclusion that the appellant faced such serious, sustained and systematic harm that he has a well-founded fear of persecution in Somalia by reason of his membership of the Gabooye tribe35. On the contrary, it was open to the Tribunal to conclude that the appellant was not faced with a well-founded fear of "persecution" within the meaning of the Refugees Convention. 29 BRF038 unreported, Refugee Status Review Tribunal, 15 March 2015 at [43], quoting United Nations High Commissioner for Refugees, Handbook and Guidelines on Procedures and Criteria for Determining Refugee Status, (2011) at 30 (2015) 254 CLR 610 at 633 [65]; [2015] HCA 22. 31 Goodwin-Gill, "Entry and Exclusion of Refugees: The Obligations of States and the Protection Function of the Office of the United Nations High Commissioner for Refugees", (1982) 3 Michigan Yearbook of International Legal Studies 291 at 298. 32 See SZTEQ v Minister for Immigration and Border Protection (2015) 229 FCR 497 33 (2015) 254 CLR 610 at 632 [62]. 34 [1999] 2 AC 629 at 660. 35 Cf Canada (Attorney General) v Ward [1993] 2 SCR 689 at 734. See also Minister for Immigration and Multicultural Affairs v Haji Ibrahim (2000) 204 CLR 1 at 8-9 [24], 41 [124], 78-79 [220]-[223]; [2000] HCA 55. Nettle Edelman For the sake of completeness, it may also be said that it is not the case that an unreasonable view of the facts of a case would necessarily bespeak an incorrect construction of the statutory provisions in question. It is possible that a decision-maker may reach an unreasonable decision on the facts of a particular case while applying the correct construction of the legislation. In this regard, it is to be noted that the appellant did not seek to argue in the Supreme Court that the decision of the Tribunal was unreasonable in the sense that it was so lacking an evident and intelligible justification that it amounted to a failure on the part of the Tribunal to exercise its jurisdiction to review the decision of the Secretary36. To the extent that the appellant sought to advance such an argument in oral argument in this Court, it was not open to him to do so having regard to his grounds of appeal. In any event, however, for the reasons already given, that argument could not be accepted. Section 37 of the Refugees Act Initially in his appeal to this Court, the appellant sought to argue that the Tribunal, by failing to put to him the country information regarding the tribal composition of the Somaliland police force, failed to comply with s 37 of the Refugees Act. As noted above, s 37 required the Tribunal to give the appellant "clear particulars of information" that might form part of the reason for affirming the decision under review. The appellant argued that whether he is able to avail himself of the protection of the state to counteract discriminatory mistreatment is material to whether he is a refugee; and the information regarding the composition of the Somaliland police force was said to bear directly on that issue. It was said that, by failing to put that information to him, the Tribunal breached s 37. By reason of events subsequent to the decision of the Supreme Court, this argument is no longer available to the appellant. On 23 December 2016, the Refugees Convention (Derivative Status & Other Measures) (Amendment) Act 2016 (Nr) ("the 2016 Act") commenced in operation37. Section 24 of the 2016 Act repealed s 37 of the Refugees Act. Section 5 of the 2016 Act addresses the potential invalidity of a decision of the Tribunal arising from a failure to comply with s 37. It provides: "For the avoidance of doubt, any decision or purported decision of the Tribunal made with respect to an application to the Tribunal under 36 Cf Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at 351-352 [30]-[31], 369 [84]-[86], 379-380 [120]-[124]; [2013] HCA 18. 37 2016 Act, s 2(3). Nettle Edelman section 31 of the [Refugees Act] for merits review of a decision or determination of the Secretary, between 10 October 2012 and the commencement day, which would have been validly made if at the time of the application, section 37 of the [Refugees Act] had not been enacted, is taken to have been validly made on the day it was in fact made." Section 6 of the 2016 Act confirms the requirement that the Tribunal observe the requirements of procedural fairness. It provides: "For the avoidance of doubt, nothing in this Act displaces any obligation imposed on the Tribunal under the common law of Nauru to act according to the principles of natural justice and to afford procedural fairness with respect to an application to the Tribunal under section 31 of the [Refugees Act] for merits review of a decision or determination of the Secretary." On 5 May 2017, the Refugees Convention (Amendment) Act 2017 (Nr) ("the 2017 Act") was certified. Section 4 provides: "The repeal of section 37 of the [Refugees Act], effected by section 24 of the [2016 Act], is taken to have commenced on 10 October 2012." Sections 5 and 6 of the 2017 Act make elaborate provision to confirm the validity of decisions made in disregard of the repealed s 37. Section 5 provides: "(1) For the avoidance of doubt, the rights, liabilities, obligations and status of all persons are, by force of this Act, declared to be the same as if section 37 of the [Refugees Act] had not been enacted. For the avoidance of doubt, the rights, liabilities, obligations and status of all persons are, by force of this Act, declared always to have been the same as if section 37 of the [Refugees Act] had not been enacted." Section 6 of the 2017 Act provides: "(1) For the avoidance of doubt, all proceedings, matters, decrees, acts and things taken, made or done, or purporting to have been taken, made or done, under the [Refugees Act] in relation to an application to the Tribunal under section 31 of the [Refugees Act] for merits review of a decision or determination of the Secretary are, by force of this Act, declared to have the same force and effect after the commencement of this Act, as they would have if section 37 of the [Refugees Act] had not been enacted. Nettle Edelman For the avoidance of doubt, all proceedings, matters, decrees, acts and things taken, made or done, or purporting to have been taken, made or done, under the [Refugees Act] in relation to an application to the Tribunal under section 31 of the [Refugees Act] for merits review of a decision or determination by the Secretary are, by force of this Act, declared to have had the same force and effect before the commencement of this Act, as they would have had if section 37 of the [Refugees Act] had not been enacted." Section 7 of the 2017 Act reaffirms the ongoing requirements of procedural fairness. It provides: "For the avoidance of doubt, nothing in this Act displaces any obligation imposed on the Tribunal under the common law of Nauru to act according to the principles of natural justice and to afford procedural fairness with respect to an application to the Tribunal under section 31 of the [Refugees Act] for merits review of a decision or determination of the Secretary." The combined effect of the 2016 Act and the 2017 Act is that the Tribunal could not have "breached" s 37, as that provision must be taken to have been repealed prior to the Tribunal making its decision in this case. In addition, any "breach" of s 37 was deprived of legal consequences by the 2017 Act. While the appellant did not dispute the effect of the 2016 Act and the 2017 Act, he argued that those Acts did not diminish the Tribunal's procedural fairness obligations under s 22 of the Refugees Act. In that respect, the appellant was plainly correct. As has been seen, s 6 of the 2016 Act and s 7 of the 2017 Act expressly preserved the application of the common law of procedural fairness to the Tribunal. Accordingly, the question remains whether the Tribunal denied the appellant procedural fairness by failing to put to him for his response the country information relating to the tribal composition of the Somaliland police before making an adverse finding based on that information, and whether the Supreme Court therefore erred in not so holding. To that question one may now turn. A denial of procedural fairness The appellant argued that the hearing before the Tribunal was conducted without reference to the appellant's capacity to avail himself of effective police protection against mistreatment by reason of the fact that the Somaliland police force included members of his tribe. The appellant argued that the country information relating to the tribal composition of the Somaliland police was Nettle Edelman credible, relevant and significant to the decision the Tribunal would make. It followed that fairness required that the Tribunal ought to have put the substance of that information to him. Its failure to do so, the appellant argued, constituted a breach of the requirements of procedural fairness contemplated by s 22 of the Refugees Act. In Minister for Immigration and Border Protection v SZSSJ, this Court held that procedural fairness requires that a person whose interest is apt to be affected by a decision be put on notice of "the nature and content of information that the repository of power undertaking the inquiry might take into account as a reason for coming to a conclusion adverse to the person"38. In SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs39, Gleeson CJ, Kirby, Hayne, Callinan and Heydon JJ referred with evident approval to the following statement by the Full Court of the Federal Court in Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd40: "Where the exercise of a statutory power attracts the requirement for procedural fairness, a person likely to be affected by the decision is entitled to put information and submissions to the decision-maker in support of an outcome that supports his or her interests. That entitlement extends to the right to rebut or qualify by further information, and comment by way of submission, upon adverse material from other sources which is put before the decision-maker." The respondent accepted, correctly, that procedural fairness requires a person to be given the opportunity to deal with all information that was "credible, relevant and significant" to the decision41. The respondent sought to argue that disclosure of such information was required only in relation to "the critical issue or factor on which the administrative decision is likely to turn"42, and that the 38 (2016) 90 ALJR 901 at 915 [83]; 333 ALR 653 at 670; [2016] HCA 29. 39 (2006) 228 CLR 152 at 161-162 [29]; [2006] HCA 63. 40 (1994) 49 FCR 576 at 591-592. 41 Kioa v West (1985) 159 CLR 550 at 629; [1985] HCA 81. See also SZBEL (2006) 228 CLR 152 at 162 [32]; Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252 at 256 [2], 261 [19]; [2010] HCA 23. 42 Kioa v West (1985) 159 CLR 550 at 587. See also Alphaone (1994) 49 FCR 576 at Nettle Edelman information as to the tribal composition of the Somaliland police was not a factor on which the Tribunal's decision was likely to turn. It was said to be apparent from the Tribunal's reasons that the Tribunal had already made findings sufficient to dispose of the appellant's claim, namely, that he had no well-founded fear of persecution43, before its reference to the tribal composition of the Somaliland police. The respondent's reading of the Tribunal's reasons in this respect is unsustainable. It cannot be said that the Tribunal's observation as to the composition of the Somaliland police force did not significantly affect its assessment of whether the appellant was likely to face persecution in Somaliland. On the contrary, that consideration was integral to the Tribunal's reasons for its conclusion44. The circumstance that the Tribunal expressly referred to this information in the course of reaching its conclusion, while not necessarily determinative, goes some way to demonstrating that the information was integral to the Tribunal's conclusion. It is evident from the lengthy passage excerpted above that the conclusions there stated were directly dispositive of the issue whether the appellant has a well-founded fear of persecution as a result of his membership of the Gabooye tribe. It is also apparent from the excerpt that the country information to which the Tribunal referred in the first paragraph of that excerpt (which was a basis for its conclusion adverse to the appellant) included the information as to the tribal composition of the Somaliland police force. In addition, as noted above, whether a person suffers a well-founded fear of persecution is a question of degree and proportion. That the country information concerning the composition of the Somaliland police was indeed integral to the Tribunal's conclusion is supported by the consideration that the presence of Gabooye tribal members in the Somaliland police force might be apt to counter, or limit, the harsh effects of discriminatory treatment of the Gabooye by higher caste groups. When that consideration is not available, it is easier to conclude that the harm from the discriminatory mistreatment faced by the appellant is likely to be so sustained and systematic that it can properly be characterised as persecution45. 43 BRF038 unreported, Refugee Status Review Tribunal, 15 March 2015 at [47]-[48]. 44 Cf WZAPN (2015) 254 CLR 610 at 637-638 [78]. 45 Cf Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225 at 233; [1997] HCA 4; Minister for Immigration and Multicultural Affairs v Haji Ibrahim (2000) 204 CLR 1 at 54 [154], 78-79 [220]-[223]. Nettle Edelman Finally, it is to be noted that the respondent did not suggest, either in the Supreme Court or in this Court, that compliance by the Tribunal with this aspect of the requirements of procedural fairness could not possibly have made any difference to the outcome of the review by the Tribunal46. That is understandable: it cannot be said that the appellant could not have rebutted such a suggestion had it been made, in that the appellant might well have pointed to evidence that the appellant's family had been unable to access effective police protection in relation to the incidents when his mother was robbed and when his family were forced off their land47. Further, because the Tribunal had not raised the suggestion, the appellant did not seek to make any submission about other, contrary, general country information that might exist. Conclusion The failure on the part of the Tribunal to put the appellant on notice that the country information as to the tribal composition of the police in Somaliland might be taken into account as a reason for coming to a conclusion adverse to him was a failure to accord him procedural fairness. The Supreme Court of Nauru should have concluded that this breach of s 22 of the Refugees Act vitiated the decision of the Tribunal. Under s 44 of the Refugees Act, the Supreme Court of Nauru was empowered to quash the decision of the Tribunal and remit the matter to the Tribunal for decision according to law. These were the orders that should have been made by the Supreme Court, and which, by virtue of s 8 of the Nauru (High Court Appeals) Act, may be made by this Court. Orders The appeal to this Court should be allowed. The order of the Supreme Court of Nauru should be set aside; and in its place it should be ordered that the decision of the Tribunal be quashed and the matter be remitted to the Tribunal for reconsideration according to law. The respondent should pay the costs of the appellant in this Court and in the Supreme Court of Nauru. 46 Cf Stead v State Government Insurance Commission (1986) 161 CLR 141 at 145-146; [1986] HCA 54. 47 See BRF038 unreported, Refugee Status Review Tribunal, 15 March 2015 at

HIGH COURT OF AUSTRALIA APPELLANT AND THE QUEEN RESPONDENT [2019] HCA 5 13 February 2019 ORDER Appeal allowed. Set aside the order made by the Court of Criminal Appeal of the Supreme Court of New South Wales on 8 December 2017 and, in its place, order that: the appellant's appeal to that Court be allowed; the appellant's conviction be quashed; and a new trial be had. On appeal from the Supreme Court of New South Wales Representation D Jordan SC with A L Bonnor for the appellant (instructed by Elie Rahme & Associates Pty Ltd) W J Abraham QC with L K Crowley QC for the respondent (instructed by Director of Public Prosecutions (Cth)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Criminal practice – Trial – Summing-up – Where appellant convicted of drug-related offences – Where trial judge made comments on evidence that went beyond arguments advanced by prosecution – Whether comments apt to create danger or substantial risk that jury might be persuaded of appellant's guilt – Whether comments so lacking in balance as to be exercise in persuading jury of appellant's guilt – Whether comments unfair to appellant – Whether comments resulted in miscarriage of justice. Criminal practice – Trial – Summing-up – Whether trial judge may make comments which convey his or her opinion as to proper determination of disputed issue of fact to be determined by jury. Words and phrases – "comment on the facts", "discretion to comment", "disputed issue of fact", "duty to give fair and accurate instructions", "fair trial", "fairness", "fundamental task of a trial judge", "lacking in balance", "miscarriage of justice", "overawing the jury", "right to comment", "strong Crown case", "summing-up". BELL, KEANE, GORDON AND EDELMAN JJ. In RPS v The Queen1, Gaudron A-CJ, Gummow, Kirby and Hayne JJ, while discussing "the difficult task trial judges have in giving juries proper instructions", adverted to the view that "has long been held that a trial judge may comment (and comment strongly) on factual issues"2. Their Honours went on to say that3: "although a trial judge may comment on the facts, the judge is not bound to do so except to the extent that the judge's other functions require it. Often, perhaps much more often than not, the safer course for a trial judge will be to make no comment on the facts beyond reminding the jury, in the course of identifying the issues before them, of the arguments of counsel." (emphasis in original) This statement in favour of judicial circumspection was made after their Honours had acknowledged that "[t]he fundamental task of a trial judge is ... to ensure a fair trial of the accused"4. This fundamental task falls to be performed within a framework in which it is "for the jury, and the jury alone, to decide the facts"5. A trial judge's "broad discretion"6 to comment on the facts of the case in a criminal trial is an aspect of the power by which a trial judge discharges the fundamental task of ensuring a fair trial of the accused. The discretion is to be exercised judicially as part of ensuring that the facts of the case are put "accurately and fairly" to the jury7. It is not exercisable, at large, independently of the fundamental task described above. A fortiori, the trial judge's summing-up (2000) 199 CLR 620 at 637 [41]-[42]; [2000] HCA 3. 2 Their Honours cited, by way of example, Tsigos v The Queen (1965) 39 ALJR (2000) 199 CLR 620 at 637 [42]. (2000) 199 CLR 620 at 637 [41]. See also Pemble v The Queen (1971) 124 CLR 107 at 117; [1971] HCA 20. (2000) 199 CLR 620 at 637 [42]. 6 B v The Queen (1992) 175 CLR 599 at 605; [1992] HCA 68. 7 Domican v The Queen (1992) 173 CLR 555 at 561; [1992] HCA 13. See also Broadhurst v The Queen [1964] AC 441 at 464. Bell is not an occasion to address the jury in terms apt to add to the force of the case for the prosecution or the accused so as to sway the jury to either view. For that reason, as the plurality in RPS stated, judicial circumspection is required in the exercise of the discretion to comment. In the present case, statements by the trial judge during the course of his summing-up were so lacking in balance as to be seen as an exercise in persuading the jury of the appellant's guilt. The statements were unfair to the appellant and gave rise to a miscarriage of justice. As a result, the appeal must be allowed and the appellant's conviction quashed. In addition, it should be clearly understood that the risk of such unfairness is such that a trial judge should refrain from comments which convey his or her opinion as to the proper determination of a disputed issue of fact to be determined by the jury. The trial The appellant was tried with a co-accused, Mr McGlone, in the District Court of New South Wales on an indictment charging him with: importing a commercial quantity of a border-controlled precursor intended or believed to be for manufacture of a border-controlled drug contrary to s 307.11(1) of the Criminal Code (Cth); conspiring to import a commercial quantity of a border-controlled drug contrary to ss 307.1(1) and 11.5(1) of the Criminal Code; and dealing with proceeds of crime contrary to s 400.4(1) of the Criminal Code8. The appellant was convicted upon the verdict of the jury and was subsequently sentenced to imprisonment for 18 years and nine months, with a non-parole period of 11 years and nine months9. The appellant appealed against his conviction to the Court of Criminal Appeal of the Supreme Court of New South Wales ("the CCA"). The sole ground of appeal was that "[t]he Judge's summing up to the jury caused a miscarriage of The CCA (Payne JA, Fagan J agreeing and Beech-Jones J dissenting) dismissed his appeal. 8 McKell v The Queen [2017] NSWCCA 291 at [1]. 9 McKell v The Queen [2017] NSWCCA 291 at [1]-[2]. 10 McKell v The Queen [2017] NSWCCA 291 at [3]. Bell The appellant now appeals to this Court, pursuant to a grant of special leave to appeal by Bell and Keane JJ, on the ground that "[t]he CCA erred in finding that the summing up to the jury by the trial judge did not give rise to a miscarriage of justice". In order to appreciate the arguments agitated in this Court it is necessary to understand the evidence adduced by the parties at trial and the trial judge's summing-up to the jury in relation to important aspects of that evidence. The evidence at trial The appellant was the movements manager of Wymap Group Pty Ltd ("Wymap"), a company that transported freight under bond from cargo terminal operators at the airport to freight-forwarding agencies. On 16 May 2013, a consignment of five cardboard boxes labelled "pijamas" arrived in Sydney, from Chile, on an Emirates flight ("the first consignment"). The ultimate consignee was "Reach Limited", an entity which did not exist. The appellant instructed a Wymap truck driver to collect the consignment and keep it with him, and not to put it in an electronic run sheet. The appellant collected the boxes from him, then drove to meet Mr McGlone at a car park beneath the appellant's residence. The appellant returned with the boxes and told the driver there had been a mistake. The driver noticed that the shrink-wrap on the boxes had been opened and packing tape placed over their labels11. On 20 May 2013, a consignment of 22 boxes arrived in Sydney ("the second consignment"). Fifteen boxes, each containing five pails labelled "printing transfer adhesive", contained crystalline pseudoephedrine weighing 77,708.7 g in total. The ultimate consignee was "T-Shirt Printing Australia", an entity which had not ordered the consignment. Shortly after its arrival, the appellant and Mr McGlone met at a cafe to discuss the second consignment12. Mr McGlone left and purchased flat pack boxes and tape. The appellant then sent a text message to Mr McGlone saying, "Don't forget to tape trial" ("the tape trial text message"). Mr McGlone was observed taping the bases of boxes and loading them into a vehicle. After transferring them to a different vehicle, Mr McGlone drove to a car park beneath a shopping centre complex. He then 11 McKell v The Queen [2017] NSWCCA 291 at [6], [9]-[13]. 12 McKell v The Queen [2017] NSWCCA 291 at [14]-[16]. Bell sent a text message to the appellant saying that he had spoken with a friend who said the "other one" was "close or here"13. The appellant phoned the Wymap truck driver and told him that the "one last week" was wrong, but that he now had the "real one". He told him to collect a consignment of 22 boxes and not to put it in his electronic run sheet. The appellant then met the driver and they transferred the boxes to the appellant's vehicle. A short time later police arrested the appellant14. On 21 May 2013, a third consignment, of two boxes of shampoo bottles, arrived in Sydney. The ultimate consignee was "Reach Limited". The bottles were found to contain 9,962.7 g of crystalline methylamphetamine15. Subsequently, in the course of a search of the appellant's home, police found $400,150 in cash in a tin box in the appellant's bedroom16. The appellant's case was that he was an "innocent dupe" in the importation of the prohibited substances by others. He gave evidence denying all knowledge of the contents of the consignments in question. The appellant said he knew Mr McGlone as a former Wymap employee whom he had encountered from time to time at the races. He said that in March 2013, Mr McGlone had suggested to the appellant that Wymap collect clothing freight for Mr McGlone's business. The appellant said that he had previously delivered consignments for other clients on an ad hoc basis, and that his involvement with Mr McGlone was no different. The appellant was cross-examined in relation to the tape trial text message. The appellant's evidence was that he had no idea why he sent that text message. He said that he was "talking horses". The appellant gave evidence that the cash located in the tin box in his bedroom was the product of his success as a gambler. He also gave evidence that he won large amounts gambling in cash. Those winnings were said to be the 13 McKell v The Queen [2017] NSWCCA 291 at [17]-[19]. 14 McKell v The Queen [2017] NSWCCA 291 at [20]-[21]. 15 McKell v The Queen [2017] NSWCCA 291 at [23]-[24]. 16 McKell v The Queen [2017] NSWCCA 291 at [25]. Bell cash in the tin box. The appellant also held a number of online betting accounts which recorded substantial wins and losses. His counsel, in addressing the jury, relied upon the online betting accounts as evidence of the appellant's success as a gambler. In this his counsel was plainly in error, in that the net effect of the wins and losses was that the appellant lost money in the course of his online gambling activities. The summing-up The trial judge commenced his summing-up with the conventional direction that "[i]f I happen to express any views upon questions of fact you must ignore those views". His Honour referred to his "entitle[ment] to express a view" but noted that he did not propose to try to persuade the jury one way or the other. The trial judge went on to make a number of statements that the appellant contends were distinctly apt to do just that. The first controversial observation by the trial judge concerned the first consignment: "There is no evidence that any drug was contained in consignment 1 ... you do not know, in fact, whether anything was taken out of it unless you accept what Mr McKell said ... You really have, depending on what you make of the evidence, the possibility that there was something in it which was taken out but, of course, never discovered because the police authorities at that stage were still playing catch-up ... What you have is the possibility in respect of that consignment that there was something in it that was removed. You would think there would be little point in arranging for this to happen unless there was something in it, but, as I say, there is actually no evidence that there was anything in it. Nonetheless, what you have is an organisation of great sophistication ... So you might think that a sophisticated organisation capable of doing that would want to ensure before it arranged to purchase the drugs overseas, presuming no one gives them away for free, to arrange a system whereby it may be able to get them into Australia without them being detected. So that requires forethought and you would think you would at least want to know it was all in place before you sourced the drugs". (emphasis added) These comments suggested to the jury that the first consignment may well have contained drugs, the importation of which was the responsibility of the appellant as part of "an organisation of great sophistication". No such suggestion Bell had been made by the prosecution in its address, or, indeed, at any other point in the trial. The prosecution's reticence in this regard was consistent with a pre-trial ruling by a different judge that while the prosecution could use the evidence of the first consignment to establish context and relationship, to prove the fact of the appellant's agreement with Mr McGlone, and to rebut innocent explanations, the prosecution could not rely on this evidence as evidence of criminal disposition. Further to the trial judge's reference to "an organisation of great sophistication", his Honour went on to say: "You would need to ensure that Mr McKell, since he was the man who took the consignments off the Wymap truck, you would need to know he was not going to be on holiday, he was not going to be in hospital, and that if he was available he would do it. You need to know in advance how you might do it: that is, you might think you would need to know from someone this might be accomplished. The object, obviously, you might think, was to intercept the cargo before it got to the in-bond warehouse ... so that when it got to the DHL warehouse, if it was checked, everything would be – to use Mr McKell's phrase – kosher: that is, nothing would be detected. industry how intimately involved the Of course, that does not necessarily mean that Mr McKell was the person who came up with the scheme for how it could be gotten in, but certainly, the system needed to have someone like Mr McKell to actually intercept the cargo and do what did happen ... You need to be fairly certain about how it is going to be done and who is going to do it. You need certainty, because there is too much at risk ... As I have said, this was a sophisticated operation; it had to have some certainty about it, otherwise, you waste all the money you spend overseas, you do not make the profits here, and it fails." (emphasis added) In relation to the tape trial text message, the trial judge said: "You have, of course, on Monday 20 May 2013 ... a message from Mr McKell using the 655 phone in the false name to Mr McGlone, using the 687 line in the false name, a message you might think which is very revealing in relation to what Mr McKell expected to happen. He says to him, 'Don't forget to tape trial'. What was that in relation to, ladies and gentlemen? Mr McKell, when he was asked about this when he gave his evidence, said he had no idea; he did not know why ... Is not that, I suggest to you, Bell a very revealing text, 'Don't forget to tape trial'? What is it that Mr McGlone did that day at Kennards? He bought cardboard boxes and, as you can see in the CCTV, he bought tape, clear tape this time, not brown tape that might show up or, perhaps, be more obvious, but clear tapes. What was the tape for? Why did he say, 'Don't forget to tape trial'? He is obviously not talking about horses, you might think, despite the fact that that is what he said. Why did he say he had no idea; he did not know why he had said that? Because it is so obvious, ladies and gentlemen, you might think that it is a reference to making sure that Mr McGlone gets tape for the repackaging so that the substitution can be made and the cargo delivered back to the Wymap truck and onto [sic] the DHL warehouse under bond and so that no one will realise, in fact, the drugs have been removed." (emphasis added) In relation to the large amounts of cash found in the appellant's possession, and the appellant's suggestion that they were the product of his success as a gambler, the trial judge said: "In respect of the William Hill gambling account, you were referred to the fact that he had deposited $131,280 odd for total wins of $539,939, apparently another indication that he was a successful gambler. The difficulty with that, you might find, is that he had in fact lost and had to put into the account in order to do that gambling $136,177.73. So between [that and the other account he] ... had lost that money, the total being $254,112.61, a quarter of a million dollars. If that is an indication, as put to you by [the appellant's counsel] that he was a successful gambler, having lost over a quarter of a million dollars, then, you certainly would not want to be an unsuccessful gambler, would you?" (emphasis added) Counsel for both the appellant and Mr McGlone applied (in the absence of the jury) for the discharge of the jury. In making his application, counsel for the appellant stressed that the prosecution case was a strong one, counsel's point being that, in such a case, fairness requires moderation on the part of the trial judge in summing-up to the jury. The trial judge refused the applications for the discharge of the jury. His Honour did, however, remind the jury of their role as the deciders of fact, and instructed them to disregard any particular view the judge had expressed with respect to the facts. Bell The Court of Criminal Appeal In the CCA the appellant relied upon the cumulative effect of the trial judge's observations concerning the first consignment, the existence of a "sophisticated organisation", the tape trial text message and the evidence of the online gambling accounts in support of his argument that the summing-up had been so unbalanced as to deny the appellant a fair trial. The majority in the CCA (Payne JA, with whom Fagan J agreed) held that the trial judge's observations did not occasion a miscarriage of justice. Beech-Jones J, dissenting, held that the summing-up did not exhibit "judicial balance", and that the instructions to the jury did not remedy the prejudice occasioned to the appellant. The parties' submissions It was common ground in this Court, as it was in the CCA, that, "in order to determine whether a summing up is unfairly balanced, it is necessary for it to be considered in its entirety and in the context of the issues and the evidence led in the trial"17. The appellant argued, in a number of ways, that the trial judge's summing-up was so unfair to the appellant in its lack of balance that it resulted in a miscarriage of justice. In addition, the appellant invited the Court to state that, as a general rule, a trial judge should not indicate to the jury his or her opinion on the determination of a question of fact that is in dispute between the parties at trial. It was said that, in terms of the judicial function, an expression of the trial judge's opinion on the determination of a disputed question of fact is irrelevant, the determination of a dispute as to the facts being a matter exclusively for the jury. Further, it was said that the expression of a judicial opinion on a disputed question of fact is apt to create a risk that the jury's independent function as the tribunal of fact may be compromised. The respondent argued that the decision of the CCA should be upheld because there is no reason to conclude that the jury were overawed by the trial judge's observations, having regard to the consideration that they may be taken to have acted in conformity with the trial judge's directions that it was their duty to come to their own independent view of the facts. 17 Majok v The Queen [2015] NSWCCA 160 at [31]. See also Green v The Queen (1971) 126 CLR 28 at 34; [1971] HCA 55. Bell In addition, the respondent argued that a summing-up is not unbalanced or unfair simply because it reflects the relative strengths and weaknesses of the parties' respective cases. As to the appellant's invitation to this Court to state that the scope for comment on the facts of a case by a trial judge does not include the expression of the judge's opinion on the determination of a disputed question of fact, the respondent argued that a justifiable confidence in the integrity of juries and in their ability to make their own independent assessment of the value of any such judicial comment means that there is no reason to qualify or limit the long-standing entitlement of a trial judge to comment on matters of fact. Was the summing-up unfair? A trial judge must sum up for the jury the case presented by each of the prosecution and the accused after each side has addressed the jury. In Domican v The Queen, Mason CJ, Deane, Dawson, Toohey, Gaudron and McHugh JJ observed that "the requirement of fairness means that ordinarily the respective cases for the prosecution and the accused must be accurately and fairly put to the jury"18. In carrying out this task, it is no part of the trial judge's role to "don[] the mantle of prosecution or defence counsel"19. As Gibbs CJ said in Cleland v The Queen, "[i]t is clear in principle that a trial judge, when directing a jury in a criminal trial, must hold an even balance between the cases of the prosecution and the accused"20. Payne JA concluded that "[i]t would have been far preferable if the trial judge did not make the remarks" suggesting the possible presence of illicit substances in the first consignment21, and that it would "have been far preferable if the trial judge had not engaged in the rhetorical flourish about the [appellant's] gambling losses" given that it "could have been understood by the jury as belittling defence counsel's submissions"22. Although Payne JA did not articulate why it would have been "far preferable" for the trial judge to have maintained a 18 (1992) 173 CLR 555 at 561. 19 Whitehorn v The Queen (1983) 152 CLR 657 at 682; [1983] HCA 42. 20 (1982) 151 CLR 1 at 10; [1982] HCA 67. 21 McKell v The Queen [2017] NSWCCA 291 at [76]. 22 McKell v The Queen [2017] NSWCCA 291 at [92]. Bell neutral reticence in relation to these matters, reticence would have been the better course because the remarks in question were quite unnecessary for a fair and accurate summary of the case presented by each of the parties. In addition, the remarks were distinctly apt to persuade the jury of the appellant's guilt. The trial judge's comments with respect to the first consignment encouraged the use by the jury of impermissible reasoning in respect of the first consignment. This was at odds with the pre-trial ruling that evidence of the first consignment could not be used as evidence of tendency. While this error was corrected, the circumstance that it did occur cannot be ignored in gauging the persuasive thrust of the summing-up as a whole. In relation to the trial judge's comments concerning the appellant's online gambling losses, Payne JA concluded that "[f]airness dictated that the trial judge correct" the impression left by the appellant's counsel in his address that the online accounts were evidence of successful gambling, and that this evidence had been presented to the jury in a way that was misleading23. If the trial judge had contented himself with an endorsement of the point made by the prosecutor that the online accounts did not show that the appellant was a successful gambler, there could have been no basis for the complaint by the appellant. But the trial judge's observations went beyond necessary correction and were such as gratuitously to belittle the appellant's counsel and, incidentally, to distract from the point that the appellant's evidence was that the cash in the tin box represented proceeds from gambling that did not take place online. Payne JA also observed that "[o]ne unfortunate remark, in a [long and detailed] summing up such as this, did not give rise to a miscarriage of justice"24. There might have been some force in that observation had the summing-up not exhibited the other features of concern. But the summing-up must be read as a whole25, and this was not one "unfortunate" remark. Payne JA characterised the trial judge's comments in relation to the tape trial text message as a "typical and permissible comment by the trial judge about a finding of fact that he carefully explained was a matter for the jury"26. It is 23 McKell v The Queen [2017] NSWCCA 291 at [86]. 24 McKell v The Queen [2017] NSWCCA 291 at [98]. 25 Green v The Queen (1971) 126 CLR 28 at 34; B v The Queen (1992) 175 CLR 599 26 McKell v The Queen [2017] NSWCCA 291 at [99]. Bell difficult to accept that characterisation. It would not be a cause for satisfaction if these remarks were "typical" of the daily work of trial judges. The content and tone of the trial judge's remarks in relation to the tape trial text message would not have been out of place in a powerful address by counsel for the prosecution. The circumstance that the trial judge had directed the jury that they were the "sole arbiters of the facts"27 affords no answer to that concern. The vice of these remarks is not so much that the jury may have been confused as to their role as the sole arbiters of the facts, but that the prosecution was being given the advantage of a second address. As Beech-Jones J correctly observed28: "[A] recognition that the jury were the trier of facts does not address a complaint about an unbalanced summing up, specifically one that seeks to persuade a jury as to what facts they should find". It may also be noted that Payne JA did not consider the trial judge's comments in the sequence in which they were made. By contrast, Beech-Jones J, who considered the three identified aspects of the summing-up sequentially, appreciated the cumulative rhetorical effect of the trial judge's remarks. The sequence of the summing-up rolled persuasively towards the remarks about the tape trial text message. It was submitted for the respondent that there is nothing in the record on which to base a conclusion that the jury were overawed by the trial judge's comments to the extent that they must necessarily have disregarded their duty independently to consider the evidence and decide the facts. To put the issue in this way is to misstate it. The issue is not whether the appellant is able to demonstrate that the jury were, in fact, overawed by the trial judge's comments. Speculation as to how the jury reacted in fact to the trial judge's comments is idle. That cannot be known one way or the other. The issue is whether the trial judge's comments were apt to create a "danger" or a substantial risk that the jury might actually be persuaded of the appellant's guilt by comments in favour of the prosecution case made with the authority of the judge29. In B v The Queen30, Brennan J, with whom Deane J agreed, confirmed the "broad discretion" of a trial judge to comment on the facts and to choose the 27 McKell v The Queen [2017] NSWCCA 291 at [93]. 28 McKell v The Queen [2017] NSWCCA 291 at [136]. 29 B v The Queen (1992) 175 CLR 599 at 605-606. 30 (1992) 175 CLR 599 at 605. Bell language in which to do so, while emphasising that the "comment must stop short of overawing the jury"31. The risk identified by Brennan J is the risk that the jury might be overawed notwithstanding that they are told that the decision on the facts is for them because "the language of the judge is so forceful that they may be under the impression that there is really nothing for them to decide or that they would be fatuous or disrespectful if they disagreed with the judge's views"32. But there is a further risk, which is of particular concern in the present case, that the jury might be persuaded to convict by what was, functionally, a second address by the prosecution. In concluding that the trial judge's summing-up did not give rise to a miscarriage of justice, Payne JA observed that "[t]his was a very strong Crown case"33. It may be accepted that the prosecution case here was indeed a strong one, but the lack of balance in the comments by the trial judge cannot be justified as no more than a reflection of the relative strengths of the arguments made by each side. In some cases where the prosecution case is strong even a neutral summary of that case by the trial judge may sound adverse to the accused, but there is a real and well-recognised difference between the statement of a case and the advocacy of that case34. The observations of which the appellant complains were couched in the forceful language of persuasion. Further, the circumstance that a case against an accused person appears a strong one in no way diminishes the obligation of those conducting the trial to ensure that it is a fair one35. What has sometimes been described as the "right" of the trial judge to comment on the facts of a case is not some form of entitlement standing free of constraints imposed by the judge's duty to give the jury accurate and fair instruction to enable them to arrive at a just determination of the matters of which they are the sole arbiters. Where a trial judge's summing-up so favours the 31 Citing Broadhurst v The Queen [1964] AC 441 at 464. 32 Broadhurst v The Queen [1964] AC 441 at 464. 33 McKell v The Queen [2017] NSWCCA 291 at [101]. 34 See R v O'Neill (1988) 48 SASR 51 at 62; R v Machin (1996) 68 SASR 526 at 541; R v Webb (1997) 68 SASR 545 at 552-553. 35 Ali v The Queen (2005) 79 ALJR 662 at 678 [100]; 214 ALR 1 at 22; [2005] HCA 8. See also TKWJ v The Queen (2002) 212 CLR 124 at 148 [76]; [2002] HCA 46; Nudd v The Queen (2006) 80 ALJR 614 at 645 [162]; 225 ALR 161 at 200; [2006] HCA 9. See also R v Meher [2004] NSWCCA 355 at [84]. Bell prosecution as to deny the accused a fair trial, the miscarriage of justice that results cannot be justified or excused by invoking the judge's "right" to comment on the facts. Accordingly, in the present case, Beech-Jones J was right to conclude that the trial judge's summing-up was so unfair in its lack of balance that a miscarriage of justice occurred. In consequence, the appeal must be allowed, the conviction quashed and a new trial had. The scope for comment What has been said thus far is sufficient to dispose of the appeal. It is desirable, however, to deal with the appellant's further submission because the issue raised in that submission was fully argued, and it is timely to clarify the position. It should be made clear that the risk of unfairness, to either side, involved in the exercise by a trial judge of a "right" to comment that goes so far as to suggest how a disputed question of fact should be resolved is such that that risk should not be courted by trial judges. Further, there may be cases where a trial judge's comments suggest that questions of disputed fact should be resolved by the jury in favour of the defence. Because there is, generally speaking, no appeal from a verdict of acquittal by the jury, the unfairness to the prosecution in such a case could not be remedied. It is desirable to clarify the position with a view to ensuring that injustice of this kind does not occur. The appellant's submission in this respect should be accepted. It is well settled that a trial judge's discretion to comment on the facts should be exercised with circumspection. The need for circumspection is not merely a matter of prudence or politeness36. Recently, in Castle v The Queen37, Kiefel, Bell, Keane and Nettle JJ, with whom Gageler J relevantly agreed38, said, referring to the passages from RPS with which these reasons commenced: "[U]nless there is a need for comment – as, for example, in dealing with an extravagant submission by counsel – the wise course will often be not to do so. Where the judge chooses to comment, the following statement of Brennan J in B v The Queen is to be kept in mind: '[The comment] must exhibit a judicial balance so that the jury is not deprived "of an adequate opportunity of understanding 36 cf R v D (1997) 68 SASR 571 at 581. 37 (2016) 259 CLR 449 at 470-471 [61]; [2016] HCA 46. 38 (2016) 259 CLR 449 at 477 [82]. Bell and giving effect to the defence and the matters relied upon in support of the defence."'" (footnotes omitted) In RPS and Castle, the discretion of the trial judge to comment on the facts was located squarely within the duty of a trial judge to assist the jury with a fair and accurate statement of the case presented by each party. That being so, little would be gained by a review of the practice of trial judges in earlier times, when the trial judge occupied a more dominant position in the conduct of criminal trials39. The point made in the observations of the plurality in each of RPS and Castle is that there is a risk that comments that are unnecessary for the performance of the duty to give fair and accurate instructions to the jury may occasion a miscarriage of justice, and so a trial judge should be astute to avoid that risk by refraining from comment that is not so required. These points are most compelling in relation to expressions of opinion by a trial judge as to the determination of disputed issues of fact. In the first place, given that the jury is the "constitutional tribunal for deciding issues of fact"40, expressions of opinion by a trial judge as to the determination of a disputed issue of fact are hardly consistent with the function of the trial judge as it is now understood. It is difficult to conceive of a situation in which the performance of the trial judge's fundamental task of instructing the jury would be advanced, consistently with the role of the jury, by suggesting the determination of a disputed question of fact, the resolution of such questions being the exclusive province of the jury41. Once, perhaps because of disparities in educational opportunities and attainment within the community, it might have been thought that juries would welcome judicial guidance as to the performance of their function that included indications of the judge's view of disputed facts, but it cannot be assumed that today's juries welcome such gratuitous solicitude on the part of the judiciary42. Certainly, insofar as today's judiciary is concerned, 39 See, eg, Langbein, "The Criminal Trial before the Lawyers" (1978) 45 University of Chicago Law Review 263 at 284, 295; Mears v The Queen [1993] 1 WLR 818. 40 Hocking v Bell (1945) 71 CLR 430 at 440; [1945] HCA 16; MFA v The Queen (2002) 213 CLR 606 at 621 [48]; [2002] HCA 53; R v Baden-Clay (2016) 258 CLR 308 at 329 [65]; [2016] HCA 35. 41 The position is different where there is no real issue raised on the evidence for determination by the jury. See, for example, Tsigos v The Queen (1965) 39 ALJR 76 (n). 42 Kemp [1995] 1 Cr App R 151 at 155; R v Collins [2007] EWCA Crim 854 at [49]. Bell the respect due to juries as the constitutional tribunal of fact strongly supports judicial reticence as to the determination of questions of fact43. Secondly, there is no little tension between suggesting to the jury what they "might think" about an aspect of the facts of a case and then directing them that they should feel free to ignore the suggestion if they think differently. There is a risk that the jury may actually be swayed by the trial judge's suggested determination. It would be to maintain an altogether hollow and unconvincing distinction to say that, while a trial judge may not go so far in his or her comments as to create a risk that the jury may be "overawed", it is nevertheless permissible for a judge to use language that "makes him [or her] appear a decided partisan"44. In any event, the jury are likely to be bemused by the tension between the suggestion and the direction. It is difficult to see what good purpose is served by confronting citizens doing jury service with this complication in the due performance of their duty. In R v Pavlukoff45, in the British Columbia Court of Appeal, it was said that: "It seems an absurdity for a Judge after telling the jury the facts are for them and not for him, then to volunteer his opinions of facts followed then or later by another caution to the jury that his own opinion cannot govern them and ought not to influence them. If his opinion ought not to govern or influence the jury then why give his opinion to the jury. To a person who is not a lawyer, but has some training in the science of correct thinking and some knowledge of the workings of the human mind, a Judge who expresses his own opinions to the jury is in effect unconsciously perhaps but nevertheless subtly and positively undermining the plain instruction he has given the jury that 'the facts are for them and not for him'; in reality he is in true effect attempting to persuade the jury not to exercise their own minds freely (as in law he has told them they must do) but instead to be guided by the factual conclusions he volunteers to them." 43 Director of Public Prosecutions v Rattigan [2017] IESC 72 at [92]. 44 R v D (1997) 68 SASR 571 at 581. 45 (1953) 106 CCC 249 at 266-267. Bell There is much force in these observations. They were referred to with approval by Olsson J, with whom Millhouse and Williams JJ relevantly agreed, in R v Machin46, and by Simpson J in Taleb v The Queen47. To accept the appellant's submission on this point is to say nothing that detracts from the duty of a trial judge to direct the jury as to the issues which arise on the evidence for their determination. Further, to accept the appellant's submission on this point is not to deny that there remains scope for comment by a trial judge. It is not difficult to imagine cases where judicial comment, but not an expression of opinion on the determination of a matter of disputed fact, may be necessary to maintain the balance of fairness between the parties. In Green v The Queen48, Barwick CJ, McTiernan and Owen JJ gave, as an example of a case where it would be "proper and indeed necessary" for a trial judge to "restore, but to do no more than restore, the balance", a case where: "during the course of a trial, particularly in his address to the jury, counsel for the accused has laboured the emphasis on the onus of proof to such a degree as to suggest to the minds of the jury that possibilities which are in truth fantastic or completely unreal ought by them to be regarded as affording a reason for doubt". The present case affords another example of an appropriate occasion for judicial comment, in that fairness required that the trial judge correct the impression mistakenly left by the plainly untenable suggestion by the appellant's counsel to the jury that the appellant's online accounts were evidence that the appellant was a successful gambler. A correction of this kind, to correct errors of expression or errors that might otherwise adversely affect the jury's ability to decide the case fairly on the merits, is plainly not objectionable. In the course of argument, it was said for the respondent that to accept the appellant's submission would tend to blur the "bright line" around the "right" of the trial judge to comment, and so introduce undesirable uncertainty in the conduct of criminal trials. In particular, it was said that there may be difficulties in identifying the point at which permissible comment crosses the line into impermissible expression of an opinion on the determination of a disputed question of fact. But there should be little difficulty in a trial judge refraining 46 (1996) 68 SASR 526 at 540-541; but cf R v D (1997) 68 SASR 571 at 578-585. 47 [2006] NSWCCA 119 at [76]. 48 (1971) 126 CLR 28 at 33. Bell from expressions of opinion on the determination of disputed issues of fact. Once it is accepted that the trial judge's "right" to comment is best understood as a judicial power or discretion to be exercised judicially for the purpose of ensuring that the jury have a fair and accurate understanding of what they need to know to do justice in deciding the issues of fact that arise for their determination, any concern about the blurring of what is said to have been previously a "bright line" can be seen to be illusory. The provision by a trial judge of fair and accurate instruction to a jury is not always a matter of "bright lines". It is, however, always concerned with practical fairness to both sides, as has been recognised in statements of high authority such as the passages from RPS with which these reasons commenced. Orders The appeal should be allowed. The order of the CCA should be set aside. The conviction should be quashed. There should be an order for a new trial. GAGELER J. I agree with Bell, Keane, Gordon and Edelman JJ that the tone and content of the trial judge's comments on summing up so much favoured the prosecution as to have given rise to a substantial risk of those comments having persuaded the jury of the appellant's guilt. That conclusion is sufficient to require that the appellant's conviction be set aside on the ground that there has been a miscarriage of justice49. It being unnecessary to do so in order to dispose of the appeal, I refrain from addressing the general question of when a trial judge may or may not express an opinion on a disputed question of fact consistently with the due administration of justice. 49 Section 6(1) of the Criminal Appeal Act 1912 (NSW).

HIGH COURT OF AUSTRALIA SPRINGFIELD LAND CORPORATION (NO 2) PTY LTD & ANOR APPELLANTS AND STATE OF QUEENSLAND & ANOR RESPONDENTS Springfield Land Corporation (No 2) Pty Ltd v Queensland [2011] HCA 15 11 May 2011 Appeal dismissed with costs. ORDER On appeal from the Supreme Court of Queensland Representation D F Jackson QC with M D Hinson SC for the appellants (instructed by Russell and Company Solicitors) D R Gore QC with J M Horton for the respondents (instructed by Clayton Utz Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Springfield Land Corporation (No 2) Pty Ltd v Queensland Real property – Compulsory acquisition – Compensation – Assessment – Section 25(2) of Transport Planning and Coordination Act 1994 (Q) empowered Chief Executive of Department of Main Roads ("Department") to acquire property "for the purposes of transport" – Section 20(3) of Acquisition of Land Act 1967 (Q) ("Acquisition Act") required that, in assessing compensation for acquisition, there be considered any enhancement of value of land adjoining acquired land "by the carrying out of the works or purpose for which the land is taken" – Appellants entered agreement to transfer certain land ("Transfer Land") to respondents for amalgamation with land held by Department in return for payment of compensation set in accordance with Acquisition Act – Nature of purpose for which land is acquired – Whether purpose for which Transfer Land was acquired would enhance value of appellants' adjoining land. Words and phrases – "purpose for which the land is taken". Acquisition of Land Act 1967 (Q), s 20(3). FRENCH CJ, GUMMOW, HAYNE AND CRENNAN JJ. This is an appeal from the decision of the Court of Appeal of the Supreme Court of Queensland (Keane and Fraser JJA and Atkinson J)1, which affirmed that of the primary judge (McMurdo J)2. The appeal turns upon the construction of Queensland legislation respecting resumption of land by the State for statutory purposes and the assessment of compensation. The litigation was instituted in the Supreme Court after an award made under an arbitration agreement between the relevant parties in which they had agreed that the issues between them should be determined by the arbitrator as if the ordinary statutory processes had applied. Section 38 of the Commercial Arbitration Act 1990 (Q) ("the Arbitration Act") provides for an "appeal" to the Supreme Court "on any question of law" which arises out of an award, with the consent of all parties to the arbitration agreement, or with the leave of the Supreme Court where it considers there is "a manifest error of law on the face of the award". McMurdo J granted leave and varied an award made on 9 October 2008 by the arbitrator (the Hon WJ Carter QC) by substituting "nil" in place of the award of $1,468,806 in favour of the present appellants ("the Springfield companies")3. The award had been made against the State of Queensland "acting through" the Chief Executive of the Department of Main Roads. The reasons for this description of the State party will be explained below. The appeal by the Springfield companies to the Court of Appeal having been dismissed, in this Court the Springfield companies seek, in effect, the reinstatement of the award by the arbitrator. For the reasons which follow, the appeal to this Court should be dismissed. McMurdo J referred4 to the development since about 1992 by the Springfield companies from a greenfield site of a large residential development 24 kilometres to the southwest of the Central Business District of Brisbane and in the local government area of Ipswich City Council. The site contains 2,851 hectares and the development is expected to house at least 60,000 people. 1 State of Queensland v Springfield Land Corporation (No 2) Pty Ltd (2009) 171 LGERA 38. 2 Queensland v Springfield Land Corporation (No 2) Pty Ltd 169 LGERA 284. (2009) 169 LGERA 284. (2009) 169 LGERA 284 at 288-289. Crennan "Almost from the outset [the Springfield companies] proposed that the development would include the construction of a major road running from the Centenary Highway (where it then ended at the Ipswich Motorway) through the Springfield land, and in particular through or close to the proposed Springfield Town Centre, and continuing west beyond the Springfield land. In 1994 a draft Springfield Development Control Plan was prepared which identified such a 'Regional Transport Corridor'. In 1998, [the Springfield companies] and the Ipswich City Council entered into what was called the Springfield Infrastructure Agreement, whereby certain land within the development site was to be dedicated for road purposes, and in particular for this transport corridor. In 1999, the Council approved a subdivision application by [the Springfield companies], on terms which included the transfer to the Council, free of compensation, of certain land to be held in trust in favour of [the Springfield companies] for future road purposes. That included the area described as Trust Lot 7, which was identified as the land upon which there would be constructed that part of the transport corridor from what is called the Western Interchange to the western boundary of the Springfield land." His Honour continued: "By the end of 1998 the Centenary Highway had been extended to the Springfield land and by June 2000 it had been further extended to the Springfield Town Centre. This road construction was described by the arbitrator as 'very much a joint venture type arrangement' between the Queensland government, [the Springfield companies], a contractor and a the financier, under which [the Springfield companies] paid for construction. The arbitrator also found, at least from 1994, that it had been intended that this road would continue beyond the Springfield Town Centre and in turn from the western boundary of the Springfield land to the area of Ripley and ultimately to the Cunningham Highway. In January 2004, the government announced that the section of the transport corridor from Springfield to Ripley would be built and later that year, it announced the preferred route for this corridor. In early 2005, it announced that it (2009) 169 LGERA 284 at 288-289. Crennan was committed also to the extension of the corridor from Ripley to the Cunningham Highway." Two points should be made here. The first is that in the various planning proposals and documents implementing them the term "South West Transport Corridor" was used to identify the preferred route for the corridor from Springfield to Ripley and to the Cunningham Highway. Secondly, for the previous development of the Centenary Highway there had been no compulsory acquisition of Springfield land. Hence the importance of the passage in which McMurdo J went on6: "In the course of planning of this extension of the corridor from the Springfield Town Centre, it was found that some of the land within Trust Lot 7 would not be required, but that some land owned by the first [appellant] adjacent to Trust Lot 7 was required instead. The land not required became known as 'the returned land'. By this time, the Department [of Main Roads] had become the owner of Trust Lot 7 in place of the Council and it transferred this land back to the first [appellant]. The newly required land [of a little less than seven hectares] was the so called Transfer Land." The litigation concerns the award of compensation made by the arbitrator with respect to the Transfer Land. The events leading up to the award began with the taking of steps under s 7 of the Acquisition of Land Act 1967 (Q) ("the Acquisition Act") in conjunction with s 25 of the Transport Planning and Coordination Act 1994 (Q) ("the Planning Act"). Section 25 empowered the Chief Executive of the Department of Main Roads, acting "for the State", to acquire or otherwise deal with property "for the purposes of transport", including "the facilitation of transport infrastructure" (s 25(3)(a)), and classified the Chief Executive as a "constructing authority" within the meaning of the Acquisition Act (s 25(8)). In this Court, the State of Queensland and the Chief Executive are joined as separate parties, the first and second respondents. Section 7 of the Acquisition Act, when read as so required by the Planning Act, provided for the Chief Executive to serve notices of intention to resume the Transfer Land and required that the notices "specify the particular purpose" for which the Transfer Land was required. By notices dated 13 October 2005 and 12 January 2006 ("the s 7 Notices"), the Chief Executive stated the intention to (2009) 169 LGERA 284 at 289. Crennan take the Transfer Land "for future transport purposes including the facilitation of transport infrastructure (namely road and busway, rail or light rail) for the South-West Transport Corridor" (emphasis added). The terms of the s 7 Notices as to purpose thus reflected the terms of the power of acquisition conferred by s 25 of the Planning Act. The statutory processes under the Acquisition Act following the giving of the s 7 Notices would have included the consideration by the Chief Executive of any objections to the taking of the land (s 8), the declaration by the Governor in Council (by gazette notice) that the Transfer Land was taken "for the purpose mentioned in the [s 7 Notices]" (s 9(7)), and the vesting of the Transfer Land in the Chief Executive (s 12). The publication of the gazette resumption notice, in the absence of rebuttal, would be conclusive evidence that the notice requirements of s 7 had been complied with (s 12(6)(b)). In any event, no attack has been made upon the validity of the s 7 Notices. There is no suggestion that there was any abuse of power in the issue of the s 7 Notices. However, events took a different course. By written agreement made 21 April 2006 between the State "acting through the Chief Executive of the Department of Main Roads" and the Springfield companies and styled "Springfield Acquisition Agreement" ("the Agreement"), the parties agreed (cll 3.6, 3.7) that processes under the legislation for the resumption of the Transfer Land would be discontinued. This discontinuance was permitted by Pt 3 (ss 16-17) of the Acquisition Act. The agreed discontinuance of procedures under the statute for resumption was in exchange for (i) the transfer of the Transfer Land for amalgamation with land already held by the Department of Main Roads (cl 3.4), and (ii) payment of compensation for the Transfer Land, in accordance with the requirements of Pt 4 (ss 18-35) of the Acquisition Act, "as if" the Transfer Land had been taken under that statute on 26 September 2006 (cl 6.2(b)). In the absence of agreement, the issue of the compensation payable was to be submitted to arbitration (cll 6.2(c), 6.3). Had the statutory procedures remained in play, s 24 of the Acquisition Act would have provided for the hearing and determination by the Land Court of Queensland of the matter of the amount of compensation. The Springfield companies emphasised in submissions to this Court that by the time of the Agreement large parts of the Springfield land had been developed and sold. However, the South West Transport Corridor identified the preferred route of proposed construction from Springfield to Ripley and the Cunningham Highway. The arbitrator accepted expert evidence that the Springfield Town Centre, together with other land for proposed commercial development and undeveloped residential areas still held by the Springfield companies, would derive, from the acquisition of the Transfer Land for the Crennan purpose of development of the South West Transport Corridor, enhancement in value clearly exceeding the value of the Transfer Land. However, the arbitrator went on to accept the submission by the Springfield companies that, on its proper construction, s 20 of the Acquisition Act confined the relevant enhancement so as to exclude consideration of the enhanced value of these other Springfield lands. Section 20 of the Acquisition Act thus is the provision of central importance. The heading states "Assessment of compensation", and the section at the relevant time read: In assessing the compensation to be paid, regard shall in every case be had not only to the value of land taken but also to the damage (if any) caused by either or both of the following, namely – the severing of the land taken from other land of the claimant; the exercise of any statutory powers by the constructing authority otherwise injuriously affecting such other land. Compensation shall be assessed according to the value of the estate or interest of the claimant in the land taken on the date when it was taken. In assessing the compensation to be paid, there shall be taken into consideration, by way of set-off or abatement, any enhancement of the value of the interest of the claimant in any land adjoining the land taken or severed therefrom by the carrying out of the works or purpose for which the land is taken. But in no case shall subjection (3) operate so as to require any payment to be made by the claimant in consideration of such enhancement of value." (emphasis added) "The issues for the arbitrator concerned the valuation of the Transfer Land, whether there was any enhancement for the purposes of s 20(3) and whether the value of the returned land was to be set-off against the compensation. There is no challenge to the arbitrator's finding that the (2009) 169 LGERA 284 at 289. Crennan value of the Transfer Land was, in aggregate, the sum of $1,468,806 (which became the assessed compensation). Nor is there any challenge to the arbitrator's conclusion that the value of the returned land should not be brought into account8. The challenge concerns the enhancement issue." "As appears to be common ground, the onus was upon the [State of Queensland] to establish that there was some relevant enhancement and its amount. Ultimately the [State of Queensland's] case was that the value of the [Springfield companies'] land would be enhanced by the carrying out of the works which were the extension of the transport corridor west from the Springfield Town Centre. The Transfer Land was being taken for the carrying out of that work or for that purpose, although it would constitute only a very small part of the land required. The [Springfield companies'] case was that the purpose for which the Transfer Land was being taken was merely to effect a realignment of the designated transport corridor, which of itself would cause no enhancement in the value of their land. That argument was upheld by the arbitrator." McMurdo J, and the Court of Appeal, upheld the State of Queensland's case. For the reasons which follow this was the correct result and the appeal to this Court should be dismissed. Something first should be said respecting the "Pointe Gourde principle". The arbitrator referred to the "possible overuse" of the expression "the scheme underlying the acquisition". This is associated with what was said by the Privy Council in Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands10. But, while acknowledging the absence of the expression from s 20 of the Acquisition Act, the arbitrator said that its relevance and meaning in a particular case "will depend essentially upon the facts of the particular case". Nevertheless, the arbitrator later concluded: 8 The arbitrator held that once the returned land was not required for the transport corridor, it was held on a resulting trust for the first [appellant] which was thereby entitled to a transfer. (2009) 169 LGERA 284 at 290. Crennan "It is relevant to refer again briefly to the Pointe Gourde Case if only for the purpose of putting it aside as having no relevance to the question of enhancement to the other lands of the claimant as a consequence of the resumption. Pointe Gourde establishes authoritatively the principle that in valuing the resumed lands, one excludes as irrelevant for that purpose any appreciation or depreciation in the value of the resumed land brought about by the scheme underlying the resumption. In the context of considering enhancement to other lands for the purposes of Section 20(3), the Pointe Gourde principle has no place." (emphasis in original) It is thus unnecessary to consider further in any detail the "Pointe Gourde principle", despite a certain allurement which it appears to have exercised in some of the submissions to this Court by the State of Queensland and the Chief Executive. However, it should be noted that recently the House of Lords has affirmed, consistently with what had been said by this Court in Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority11, that there is no "common law" principle derived from Pointe Gourde; the term "scheme" was used there to explain and amplify the term "value" as understood in particular statutory compensation systems commencing with the Land Clauses Consolidation Act 1845 (UK)12. These points were made by Lord Walker of Gestingthorpe and Lord Collins of Mapesbury in Transport for London v Spirerose Ltd13. The present case turns upon the requirement in s 20(3) of the Acquisition Act that in assessing compensation account be taken, by way of set-off or abatement, of any enhancement of the value of the interest of the Springfield companies in any land adjoining the Transfer Land by the carrying out of the purpose for which the Transfer Land was taken. 11 (2008) 233 CLR 259 at 273-275 [41]-[47]; [2008] HCA 5. 12 8 & 9 Vict c 18. 13 [2009] 1 WLR 1797 at 1803-1806, 1830-1832, respectively; [2009] 4 All ER 810 Crennan Of the reasoning by the arbitrator, McMurdo J correctly observed14: "In considering s 20(3), the arbitrator was required to identify the works or purpose for which the land was taken. He identified the purpose as 'the very narrow purpose ... to realign in minor respects an existing proposed road corridor'. In one sense at least, that was undoubtedly true. But the question is whether that could be regarded as the purpose which is relevant in the operation of s 20(3). As already noted, the purpose within s 20(3) would appear to correspond with the purpose for which there is a power of compulsory acquisition. That indicates that the purpose was to be understood as the public benefit or end to be achieved, rather than some means to that end, and that the arbitrator's identification of the purpose was incorrect." It also should be noted that the arbitrator looked to "the reason why [the s 7 Notices] were given" and found that what had led the Chief Executive to give the s 7 Notices was the decision to realign the proposed road corridor "in minor respects". The relevant "purpose" is that for which the Transfer Land would have been taken had the statutory processes set in train by the s 7 Notices not been supplanted by the Agreement. These were future transport purposes including the facilitation of transport infrastructure, being road and busway, rail or light rail for the South West Transport Corridor. This was the statutory purpose and the determinative purpose. Contrary to the construction given to s 20(3) by the arbitrator, which the Springfield companies support, the "purpose" was not identified by some factual inquiry, beyond the terms of the s 7 Notices, into the reason why the s 7 Notices were given in the then current state of planning for the road corridor. In written submissions filed, by leave, after the conclusion of oral argument, the respondents emphasised the importance of other terms of the Agreement in addition to the requirement imposed by cl 6.2(a) that compensation be assessed "as if" the Transfer Land had been compulsorily acquired. Recital B of the Agreement stated that the Transfer Land was required for the South West Transport Corridor and that "Main Roads intends to construct an extension to the Centenary Highway within the South West Transport Corridor". 14 (2009) 169 LGERA 284 at 294. Crennan Reference has been made to the arrangements for certain land to be held on trust in favour of the Springfield companies for future road purposes. This included Trust Lot 7. Clause 11.1 required the parties to take all steps necessary to amend these trust instruments to reflect "the Purpose", defined in cl 1.1 in familiar terms as meaning "future transport purposes, including the facilitation of transport infrastructure (namely road and busway, rail or light rail) for the South West Transport Corridor". That term in turn was defined in cl 1.1 as meaning "the preferred route for a road and public transport corridor linking the Centenary Highway to Ripley and the Cunningham Highway at Yamanto, as shown [in the plan] at Annexure D". The further terms of the Agreement thus emphasise the incorporation of the statutory description of "purpose" which is picked up by cl 6.2(b) for the assessment of compensation in respect of the Transfer Land. The appeal should be dismissed with costs. HEYDON J. Section 20(3) of the Acquisition of Land Act 1967 (Q) ("the Act") provided: In assessing the compensation to be paid, there shall be taken into consideration, by way of set-off or abatement, any enhancement of the value of the interest of the claimant in any land adjoining the land taken or severed therefrom by the carrying out of the works or purpose for which the land is taken." The appellants own land in the south-eastern part of Queensland. In the 1990s it was contemplated that a "South-West Transport Corridor" adjoining the appellants' land would be created. Many steps were taken pursuant to that contemplation. The appellants' land was 2851 hectares in area and was to be the site of a master planned community being developed by the appellants. The question is whether the resumption of small areas of the appellants' land in 2005-2006 created any enhancement of the value of the rest of its land which should be taken into account by way of set off against or abatement of the compensation to be paid for the land resumed in 2005-2006. Underlying the question is a further question whether any enhancement in value as a matter of fact happened much earlier than 2005-2006 and had nothing to do with the small resumptions in 2005-2006. The primary question was seen by the parties as being the ascertainment of the "purpose for which the land [was] taken" within the meaning of s 20(3). The respondent State of Queensland in its further amended points of defence enunciated the position which it maintains in this appeal, namely that the land resumed in 2005-2006 "was acquired for future transport purposes, including the facilitation of transport infrastructure (namely road and busway, rail or light rail) for the South-West Transport Corridor". The arbitrator disagreed. He found that the notices of intention to resume given on 13 October 2005 and 12 January 2006 "were given solely for the purpose of [the Department of Main Roads] advising an intention to realign part of the existing Corridor". He said that the notices of intention to resume evidenced only an "intention to acquire smaller parcels to achieve the desired realignment and as a further consequence to return to [the appellants] any land which had in 1998 been given to Ipswich City Council on trust and later transferred to [the Department of Main Roads], but which was no longer required." He also said that "it was the very narrow purpose of the resumption to realign in minor respects an existing proposed road corridor" and that the reason why the notices of intention to resume were given was to "provide for" or "accommodate" what the respondents' witness described as "a slightly different corridor". Section 5(1) of the Act gave power to acquire land "for any purpose set out in the schedule". Paragraph (a) of the schedule listed the following purpose: "for the construction or erection of any public or other works which the constructing authority is authorised by any Act or resolution of Parliament to construct or erect or for the purposes of any Act". At the material time, s 25(1) of the Transport Planning and Coordination Act 1994 (Q) provided: "(1) The chief executive may, for the State, acquire … property for the purposes of transport or for an incidental purpose." Section 25(3)(a) provided: In particular, the chief executive may, for the State, acquire property for any of the following purposes – the facilitation of transport infrastructure". And s 25(8) provided: "(8) The chief executive is a constructing authority within the meaning of the [Act]." Section 7(3)(a) of the Act provided: "(3) A notice of intention to resume shall be in writing and shall – specify the particular purpose for which the land to be taken is required". The notices of intention to resume stated that the purpose for which the land taken in 2005-2006 was required was "future transport purposes including the facilitation of transport infrastructure (namely road and busway, rail or light rail) for the South-West Transport Corridor". Section 12(6)(b) of the Act provided: "(6) Subject to section 11, publication of the gazette resumption notice shall be evidence, and in the absence of evidence in rebuttal, conclusive evidence that – in any other case – the provisions of sections 7, 8 and 9 or, as the case may be, 7, 8 and 10 have been complied with." That made publication conclusive evidence, in the absence of evidence in rebuttal, that the notice of intention to resume had complied with the need to specify a particular purpose for which the land to be taken was acquired. It prevented challenge to the validity of the resumption in that respect. But it did not make publication conclusive evidence of the truth of that which was stated to be the particular purpose so as to foreclose demonstration that the actual particular purpose was different from or additional to the specified purpose. And it did not control the application of s 20(3). If, alternatively, it is correct to hold that s 12(6) made a statement of purpose in the notice of intention to resume conclusive as to its truth, in the absence of evidence in rebuttal, s 12(6) made it permissible to receive and examine evidence in rebuttal, and here there was evidence in rebuttal: the materials to which the arbitrator referred and on which he relied. The arbitrator criticised the approach now supported by the respondents and rejected the corresponding valuation approach in expert evidence called by them on the following basis: the scheme to develop the South-West Transport Corridor since 1999 had enhanced the value of the appellants' land nearby; the slight alteration of the boundaries of the Corridor realignment made in 2005-2006 involved resumption of a small part of the appellants' land; s 20(3) did not require that the effect on the value of the appellants' land of the entire project since 1999 be set off against the value of the small area resumed. The Court of Appeal criticised the arbitrator's approach as "narrow"15. It is hard to see how the arbitrator's approach can be so described, given that it takes into account the context of, and background to, the notices of intention to resume. The arbitrator's approach was also said by the Court of Appeal not to reflect a "purposive approach to statutory construction"16. The appellants correctly submitted that the arbitrator's approach was not erroneous because it analysed the word "purpose" in s 20(3) bearing in mind the function of s 20(3) as a whole in its application to the present facts: to assess the significance of an enhancement in value of the adjoining land, which was adjacent to land that had been made available for the purposes of the South-West Transport Corridor years earlier. Contrary to what the arbitrator found, it can be assumed that there were 15 State of Queensland v Springfield Land Corporation (No 2) Pty Ltd (2009) 171 LGERA 38 at 50 [38] and [40], 53 [50]-[51] and 54 [52]. 16 State of Queensland v Springfield Land Corporation (No 2) Pty Ltd (2009) 171 LGERA 38 at 50 [39]. two "purposes". On that assumption, while in one sense the purpose of the resumptions was to facilitate transport infrastructure in the form of a road, in another it was simply to realign a short stretch of road. The predominant purpose in the particular circumstances was the second. The Court of Appeal did not identify precisely how the arbitrator's approach was erroneous. The Court of Appeal did not assert, for example, and could not have asserted, that s 20(3), in express terms or by necessary implication, provided that whatever the resuming authority stated in a notice of intention to resume to be the particular purpose for which the land to be taken is required is, without more, the actual and sole purpose. Indeed to some degree the Court of Appeal accepted the correctness of the arbitrator's approach when their Honours said: "there may be cases where the purpose of an acquisition of a small parcel of land is solely for realigning a short stretch of road", and that the matter turned "on the facts of the particular case"17. They went on18: "It would, for example, be easier sensibly to conclude that a realignment is a purpose in itself if the road of which it was an adjunct had been constructed many years earlier or if the realignment was a response to the exigencies of transport functions in the immediate vicinity of the stretch of road being realigned. To say this, however, is to recognise that the arbitrator … acted upon a view of s 20(3) … which was apt to make such differences in the facts of the case immaterial because of the narrow focus of his approach." The first sentence is correct, but not the second. It is true that in the present case the road to pass through the South-West Transport Corridor had not been constructed by 2005-2006, and it is true that the desire for realignment which triggered the 2005-2006 resumptions was not a response to the exigencies of transport functions arising from experience of the road in operation. But in terms of assessing the enhancement of the value of the appellants' adjoining land it was material for the arbitrator to consider that the road route being realigned for a short stretch in minor respects had been planned for years and that land had been acquired and set aside for it. The mere existence of the planning for that road is what increased the value of adjoining land, not a minor alignment to it. Further, s 20 is a provision that affected the rights of individual property owners. Provisions of that kind providing compensation for compulsory 17 State of Queensland v Springfield Land Corporation (No 2) Pty Ltd (2009) 171 LGERA 38 at 53 [49]. 18 State of Queensland v Springfield Land Corporation (No 2) Pty Ltd (2009) 171 LGERA 38 at 53 [50]. acquisitions of property are customarily construed amply. Sub-sections (1) and (2) gave rights to compensation; sub-s (3) cut them back. Section 20(3) is to be construed as preserving rather than destroying the right to compensation by directing attention to specificity of purpose in particular circumstances. The respondents submitted that any enhancement in the value of the adjoining land in the period leading up to the resumptions in 2005-2006 had to be taken into consideration by way of set-off against or abatement of the compensation to be paid for those resumptions. That is unsound, because the enhancement described in s 20(3) must be the result of the acquisitions for which compensation is being considered and cannot have preceded it. That proposition follows from the words "any enhancement … by the carrying out of the … purpose for which the land is taken", particularly the word "by". There was evidence before the arbitrator that the increase in value of the appellants' lands by reason of the South-West Transport Corridor was substantial, but no evidence accepted by the arbitrator that that increase in value was derived from the resumptions in 2005-2006. The onus of showing enhancement from the resumption in 2005-2006 was on the respondents. They did not discharge it, and thus they failed to exclude the possibility that any enhancement of the value of the appellants' land which adjoined the land resumed in 2005-2006 is likely to have resulted from the scheme dating from the 1990s rather than from the resumption in 2005-2006. Indeed the arbitrator positively found that value had been enhanced from at least 1999. Hence success does not flow for the respondents even if they are correct in submitting that the "purpose" of the 2005-2006 resumptions was the facilitation of transport infrastructure. The respondents did not negate the proposition that while before 2005-2006 there was an enhancement in the value of the appellants' land (as the arbitrator positively found) since no land owned by the appellants relevant to these proceedings was resumed in that period, they have no entitlement to compensation in that respect and the enhanced value is irrelevant. And the respondents did not negate the proposition that while in 2005-2006 there were resumptions, there was no enhancement "by" the carrying out of the purpose for which the land was taken, since the enhancement had occurred earlier. It is wrong to treat the "purpose", which applied over quite a number of years and which was carried out in different ways at different times over those years, as being a single thing which in an instant of time both underlay the 2005-2006 resumptions and the much earlier value-enhancing activity. There are questions not posed by the respondents which call for examination because an adverse answer would favour them. Accepting that if the land resumed in 2005-2006 had in fact been resumed in the 1990s, s 20(3) would have applied, why does s 20(3) not apply when instead the land is resumed in 2005-2006? Why does a difference in the timing caused perhaps by an erroneous estimation of the appropriate alignment, not corrected until 2005-2006, matter? The answer lies in considerations touched on in the previous paragraph. If the land resumed in 2005-2006 had been resumed six years earlier, that particular aspect of "the carrying out of the … purpose" would be related to the enhancement in value of the appellants' interests in adjoining land. But, as it happened, the land was only resumed in 2005-2006, and the respondents failed to establish that that later aspect of "the carrying out of the … purpose" was related to the enhancement in value of the appellants' interest in adjoining land. The respondents relied on various authorities. None of them related to s 20(3), and it is undesirable to take up further space in a dissenting judgment analysing what the respondents said about them. The appeal should be allowed and consequential orders made.

HIGH COURT OF AUSTRALIA AUSTRALIAN COMPETITION AND CONSUMER COMMISSION APPELLANT AND BAXTER HEALTHCARE PTY LIMITED & ORS RESPONDENTS Australian Competition and Consumer Commission v Baxter Healthcare Pty Limited [2007] HCA 38 29 August 2007 1. Appeal allowed. ORDER Set aside the orders of the Full Court of the Federal Court of Australia made on 24 August 2006. 3. Remit the matter to the Full Court of the Federal Court of Australia for further consideration in accordance with the reasons of this Court. 4. Respondents to pay the appellant's costs of the appeal to this Court. The costs of the proceedings to date otherwise to be in the discretion of the Full Court of the Federal Court of Australia. On appeal from the Federal Court of Australia Representation L G Foster SC with A I Tonking and J S Gleeson for the appellant (instructed by Australian Government Solicitor) D M Yates SC with I S Wylie for the first respondent (instructed by Blake R J Meadows QC, Solicitor-General for the State of Western Australia with J C Pritchard for the second respondent (instructed by State Solicitor's Office C J Kourakis QC, Solicitor-General for the State of South Australia with G F Cox and S A McDonald for the third respondent (instructed by Crown Solicitor's Office (SA)) M G Sexton SC, Solicitor-General for the State of New South Wales with S J Gageler SC and N L Sharp for the fourth respondent (instructed by Crown Solicitor for New South Wales) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Australian Competition and Consumer Commission v Baxter Healthcare Pty Limited Statutes – Interpretation – Trade Practices Act 1974 (Cth) ("the Act") – First respondent negotiated with and formed contracts with State and Territory governments for the supply of medical products in circumstances where State and Territory governments were not carrying on a business – Trial judge found that, but for the application of derivative Crown immunity, the first respondent had contravened ss 46 and 47 of the Act in relation to pre-contractual conduct – Whether the provisions of ss 46 and 47 applied to the conduct of the first respondent – Nature and extent of available relief. Statutes – Operation and effect of statutes – Crown immunity – Derivative immunity – Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd (1979) 145 CLR 107 – Whether the presumption of Crown immunity creates a presumption against legislation having an incidence in legal effect upon the Crown – Whether the presumption of Crown immunity creates a presumption against legislation affecting Crown "freedoms" or governmental, commercial or political "interests" – Whether the Commonwealth, States and Territories are manifestations of the Crown – Whether Crown immunities apply as such to the Commonwealth, States and Territories – Whether different notions of governmental immunity are suggested or required by the Australian Constitution. Constitutional law (Cth) – Crown immunity – Whether Crown immunity is applicable without modification to the Commonwealth, States and Territories provided for in the Constitution. Words and phrases – "bind", "derivative Crown immunity", "incidence in legal effect". Constitution, ss 1, 61, 71, 73, 74, 75, 78, 79, 114. Trade Practices Act 1974 (Cth), ss 2, 2A, 2B, 4L, 6, 46, 47, 51, 87, 87A. GLEESON CJ, GUMMOW, HAYNE, HEYDON AND CRENNAN JJ. The issues in this appeal are whether, upon the true construction of the Trade Practices Act 1974 (Cth) ("the Act"), ss 46 and 47 of the Act apply to conduct of a trading corporation in, or in connection with, negotiations for, entry into, or performance of, a contract with a State or Territory government where the government's conduct is not in the course of carrying on a business, and, if so, what remedies are available in a case of contravention. Sections 46 and 47 bind the Crown in right of a State or Territory so far as the Crown carries on a business, either directly or by a government authority (s 2B). Yet it is argued that when a corporation, in the course of carrying on its business, negotiates for, enters into, or performs a contract with a State or Territory government which is not itself carrying on a business, ss 46 and 47 do not apply to the corporation. That is said to be a form of derivative immunity, recognised and applied by this Court in 1979 in Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd1. This argument was accepted by Allsop J at first instance in the Federal Court of Australia2, and by the Full Court of the Federal Court3 (Mansfield, Dowsett and Gyles JJ) on appeal. The appellant appeals against the decision of the Full Court. The Act has changed in significant respects since 1979. All parties accept that, ultimately, the question is one of construction of the Act. That is the way in which the case was conducted and decided at first instance, and in the Full Court, and it is the basis upon which the case was argued in this Court. The Act contains certain provisions concerning its application to what the Act describes as the Crown in right of the Commonwealth, the Crown in right of a State, and the Crown in right of a Territory. As is often the case, the terms in which Parliament expressed its legislative intention reflected legal doctrine expounded in earlier judicial decisions, including decisions of this Court. There was no argument that the legislation, or a relevant part of it, is constitutionally invalid, or that the Constitution, for reasons outside the provisions of the Act, dictates an outcome in favour of one side or the other. Such an argument would have required notification under s 78B of the Judiciary Act 1903 (Cth), in order to give interested Attorneys-General the opportunity to appear and make (1979) 145 CLR 107. 2 Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd (2005) ATPR ¶42-066. 3 Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd (2006) 153 FCR 574. Crennan submissions. The issue being one of statutory construction, the Court must give meaning and effect to the language of the Act. Allsop J found that, but for the derivative immunity enjoyed by the first respondent, the conduct of the first respondent would have contravened s 46 in one respect and s 47 in a number of respects. He concluded, however, that the Act did not apply to, or operate in respect of, the conduct complained of and dismissed the application brought under the Act by the appellant. There was an appeal to the Full Court against the dismissal of the application. The appeal covered both the derivative immunity conclusion and Allsop J's refusal to find further contraventions. There was also a notice of contention by which the first respondent challenged the findings that its conduct fell within the terms of the prohibitions in ss 46 and 47. The Full Court did not find it necessary to deal with the notice of contention. Hence, if the appeal to this Court is allowed, it will be necessary to remit the matter to the Full Court to resolve that issue and to permit determination of the remainder of the appellant's appeal to that Court. The conduct of the first respondent The first respondent, Baxter Healthcare Pty Limited ("Baxter"), is the Australian operating subsidiary of Baxter International Inc, a global medical products and services company incorporated in the United States of America. Baxter and its parent company specialise in critical therapies for life-threatening conditions. Baxter manufactures the majority of the products it supplies within Australia at a plant in Toongabbie, New South Wales. It manufactures and supplies several different types of sterile fluid commonly used in hospitals. These relevantly include: (1) large volume parenteral ("LVP") fluids, used for re-hydration, the administration of drugs, resuscitation, and fluid and electrolyte replacement; (2) irrigating solutions ("IS"), used for a number of purposes, including the washing or cleaning of wounds in surgery; and (3) parenteral nutrition ("PN") fluids, used for the provision of nutrition to patients. Baxter also manufactures peritoneal dialysis ("PD") products. PD is a form of treatment for chronic renal failure. Most PD treatments are self-administered by patients at home. The expression "PD products" refers to both PD fluids and apparatus used to perform PD, such as automated PD machines and lines for fluid connection. In the judgments of the primary judge and the Full Court of the Federal Court, the term "sterile fluids" was defined to exclude PD fluids, although it was acknowledged that PD fluids are required to be sterile. This usage provides a Crennan convenient shorthand for contrasting LVP fluids, IS and PN fluids, as a class, with PD fluids and PD products generally. Between 1998 and 2001 Baxter had the only manufacturing plant for LVP and PN fluids in Australia. Most LVP and PN fluids are bulky, water-based items. In general, transportation costs are relatively high, giving domestic producers a significant competitive advantage. Since early 1997, Baxter has supplied almost 100 per cent of LVP fluids at the wholesale level. Baxter was also the wholesale supplier of about 95 per cent of IS acquired in Australia between 1998 and 2001 inclusive. PD became available to home-based patients in the early 1980s. Until 1990, Baxter was the only supplier of PD fluids in Australia. In 1990, Gambro Pty Ltd ("Gambro") commenced supplying PD products in Australia. Another supplier, Fresenius Medical Care ("Fresenius"), sought to enter the PD market in Australia in about 1995. Between 1998 and 2001 inclusive, Baxter sold about 90 per cent of PD products in Australia, with Gambro and Fresenius each enjoying a small market share. As PD products are more valuable for their size and weight than sterile fluids, the competitive advantage enjoyed by domestic manufacturers over importers is less significant. Between 1998 and 2001, Baxter entered into five long-term contracts for the supply of sterile fluids and PD products to public hospitals. The contracts were entered into with the relevant purchasing authorities of the second to fourth respondents (the States of Western Australia, South Australia, and New South Wales, respectively), the State of Queensland, and the Australian Capital Territory. The purchasing authorities have been described generically in the proceedings as State Purchasing Authorities ("SPAs"). Each SPA is part of the executive arm of government of its corresponding State or Territory. Each of the contracts was entered into after a process involving formal requests for tenders by the SPAs and a period of negotiation. (In the Australian Capital Territory there was no tender, but the SPA agreed with Baxter to adopt the terms on which Baxter had contracted to supply to New South Wales.) Each tender invitation included sterile fluids and PD fluids and products, and each permitted alternative tenders. Each tender also specifically allowed for the submission of bundled offers, that is, offers of several items together at a discount rate. Baxter's response to each tender invitation followed a consistent pattern. It made an offer to supply the tender items, on an item-by-item basis, at particular prices, and an offer to supply the same items, for substantially lower prices, on a sole supply basis. Crennan The contracts with New South Wales, South Australia and Western Australia provided for the supply of the entire requirements of each State for certain sterile fluids and the supply of 90 per cent of the requirements of each State for PD fluids, for periods of five years or just under five years. The Australian Capital Territory contract was in similar terms, but the supply was for a period of just over four years. The contract with Queensland provided for Baxter to supply the State's entire requirements for certain sterile fluids (excluding PN fluids) and 92.5 per cent of its requirements for PD fluids, for a period of three years. None of the contracts is currently on foot. There was background evidence as to previous contracts for the supply to State and Territory authorities of sterile fluids and PD products. In the 1980s there were four manufacturers of intravenous ("IV") solutions in Australia, but by 1993, Baxter was the only Australian manufacturer. In the mid-1980s there were exclusive supply agreements with certain SPAs for some IV products. From 1990, when Commonwealth/State funding arrangements changed, significant quantities of PD products were sold directly to the States. The Full Court summarised Allsop J's findings about this part of the evidence as follows: "Baxter had previously made bids to Queensland for tenders to supply IV, IS and PD solutions, including bids which were on the basis of item-by-item prices and bids which were at significantly lower prices for guaranteed sole supply for all items covered by the tender, both in 1987 (when the States had limited purchases of PD products), and in 1990 and 1993. It made bids on similar bases to South Australia and to Western Australia in 1991, and to New South Wales in 1992 and 1993. In March 1992, a consortium including Abbott [Australasia Pty Ltd, a competitor with Baxter in the supply of LVP fluids between 1985 and 1992] and Gambro and another company expressed concern to New South Wales about the way the tender processes were constructed. Their concern was that those processes were constructed to favour the supplier with the broadest range of product, and which encouraged bundling and 'a sole supplier situation'. [Allsop J] observed: 'To this point this [the construction of the tender process] had not been dictated by Baxter but decided by the States. That remained the position up to and during the relevant period.' Crennan In fact, New South Wales, in the period after the consortium's concern, made it clear that it wanted a long term contract and one in which there was an exclusive supply arrangement covering sterile fluids and PD products, and that Baxter was one of its potential suppliers, but in the longer term not the only one. Baxter secured exclusive supply contracts with Queensland in 1990 (for three years) and again in 1993, excluding PN fluids at the insistence of Queensland (for three years), and in 1997 (again for three years); with South Australia in 1991 (for two years) and in 1995 (for three years); with Western Australia in 1991 (for two years, extended by one year) and again in 1995 (for five years); and with New South Wales in 1993 (for five years). His Honour found that each of those contracts was negotiated by the relevant SPAs which had a capacity to choose, to a degree, the terms on which they would deal with Baxter and for the costs savings the contracts produced as well as the range of products supplied." The Full Court then set out the history of the negotiation of the contracts: "The Request for Tenders for the 1998 NSW contract was released on 8 October 1997. It referred to LVP, PD and PN fluids and products and to IS. At the time, as his Honour found, Baxter was, of course, aware of B. Braun [Melsungen AG and its subsidiary, B. Braun Australia Pty Ltd] as a major worldwide sterile fluid producer and believed it was a competitive threat to Baxter winning the New South Wales tender, although it anticipated winning the sterile fluids contract. Apart from B Braun, tenders for the New South Wales contract were also received from Fresenius and Gambro, although not for the full range of products. Baxter understood also that, if its item-by-item prices were taken seriously, the financial pressure on New South Wales to take Baxter's PD fluids and products was very strong unless an importer such as B. Braun was to take the bulk of the sterile fluids market. New South Wales then further negotiated with Baxter, as a result of which Baxter made further concessions or revised offers. Ultimately, one of its revised offers was accepted. The evidence was that the acceptance of that offer was heavily influenced by the desire to avoid additional cost to the public health system in New South Wales. On 30 April 1998, the existing contract between South Australia and Baxter was due to expire. There were direct negotiations with Baxter during 1998 for a new contract, during which Baxter made two bundled offers. They were not taken up. The existing contract therefore continued Crennan to roll over until the 2001 SA contract. South Australia invited tenders for pharmaceutical products including LVP, PD and PN fluids and IS. Tenders were invited for two year contracts, with one or two year optional extensions. Tenders were received from Baxter, Gambro and Fresenius. On 5 December 2000, South Australia requested a revised offer for a five year term (called Offer 1A), for sole and exclusive supply of sterile fluids, but excluding PD fluids and products. Baxter responded on 11 December 2000 with its Offer 1A. It offered no discount on the item-by-item prices in its Offer 1, although clearly the invitation to make Offer 1A was to seek a volume discount in exchange for sole and exclusive supply of sterile fluids. Baxter's Offer 1A indicated that it was not prepared to give a discount for exclusivity for sterile fluids if no exclusivity for PD fluids was given. Baxter's initial bundled offer for sterile fluids and PD fluids was cheaper than its item-by-item offer for sterile fluids alone, and that remained the position after Offer 1A. After further negotiation, however, its Offer 1 was accepted but allowing for 10 per cent of PD products to be purchased from other suppliers. The 1999 ACT contract was, as the Australian Capital Territory understood it, based on the 1998 NSW contract, although the relevant officer in the Australian Capital Territory did not think the arrangement precluded the Australian Capital Territory from dealing with other suppliers. In fact in May 2001, Fresenius contracted with the Australian Capital Territory to supply dialysis products so that Baxter was no longer the exclusive supplier of PD fluids and products to Canberra Hospital. Baxter then claimed to be entitled to a higher price, but the Australian Capital Territory has continued to adhere to the prices in the 1998 NSW contract. At the time of the judgment, there was an ongoing dispute about that. The 2001 QLD contract followed a tender request of 3 May 2000 for IV fluids and dialysis fluids, excluding PN fluids. Baxter, Fresenius and Gambro tendered. Both the Baxter and Gambro tenders included bundled bids. The unbundled bid of Baxter was that which was assessed, and Baxter was recommended. The impugned bundling, as his Honour found, had no effect on the awarding of the tender to Baxter. However, obviously for price reasons, its bundled bid was then accepted. His Honour also accepted the evidence that Queensland perceived its position as one embodying 'real bargaining power, deployed in its own interests'. The 2001 WA contract followed a tender request of 26 May 2000. Tenders were received from Baxter, Gambro and Fresenius. The cost or Crennan 'price' of not taking a Baxter sole supply arrangement for all products, including PD products, was described by the primary judge as 'huge, unless sterile fluids could be sourced elsewhere'. Its bundled sole supply offer was accepted, after negotiation to allow 10 per cent of PD products to be acquired from other sources. The learned primary judge also noted that the later agreement made jointly by New South Wales and Victoria and Baxter in 2003, after extensive negotiation, did not give Baxter any guaranteed exclusive supply agreement, although Baxter has provided more favourable pricing based upon volume discounts for total usage of sterile fluids and a minimum of 80 per cent of the PD fluids acquired. That agreement does not contain the 'cherry pick' item-by-item prices." The Act Section 2 of the Act declares that the object of the Act, relevantly, is to enhance the welfare of Australians through the promotion of competition and fair trading. It was inserted in 1995, but it is plain from the detailed language of the key provisions that the object of the Act was the same before 1995, and would have been the same after 1995 even if s 2 had not been inserted. Sections 2A and 2B deal with the application of the Act to the Commonwealth, the States and the Territories. Section 2A, which was originally inserted in 1977, provides that the Act binds the Crown in right of the Commonwealth in so far as the Crown in right of the Commonwealth carries on a business, either directly or by an authority of the Commonwealth. However, the Crown in right of the Commonwealth is not liable to prosecution or to a pecuniary penalty (s 2A(3)). Section 2B, which was inserted in 1995, makes corresponding provision as to the Crown in right of a State or the Crown in right of a Territory in relation to certain parts of the Act, including those that are presently relevant. Section 2C, also inserted in 1995, provides that certain specified forms of government activity, or exercises of government powers, do not amount to carrying on a business for the purposes of ss 2A and 2B. That list is not exhaustive (s 2C(2)). In the present case, it was conceded by the appellant that the acquisition of the products in question by the SPAs was not in the course of carrying on a business. Section 4L, inserted in 1977, provides that if the making of a contract contravenes the Act by reason of the inclusion of a particular provision in the contract, then, subject to any order made under s 87 or s 87A, nothing in the Act affects the validity or enforceability of the contract otherwise than in relation to Crennan that provision in so far as the provision is severable. That section was recently construed by this Court in SST Consulting Services Pty Ltd v Rieson4 to mean, not that a contract is enforceable only if the common law rules about severance permit severance, but that s 4L requires rather than permits the severance of offending provisions and that the phrase "in so far as" marks the limit of invalidity of the offending provision. In that connection, it was pointed out that the Act contains its own detailed scheme dealing with the consequences of contravention. As appears from the pleadings in Bradken, the relevant events occurred in early 1978. At that time, ss 2, 2B and 2C were not in the Act. Section 4L was there, but it was not referred to in argument or in the reasons for judgment. The changes to the Act made in 1995 were part of a national programme of competition policy reform adopted by the Commonwealth, State and Territory legislatures. The Commonwealth Parliament enacted the Competition Policy Reform Act 1995 (Cth), which amended the Act in a number of ways, including the insertion of s 2 and s 2B, the New South Wales Parliament enacted the Competition Policy Reform (New South Wales) Act 1995 (NSW), and other States and Territories enacted similar legislation. Part IV of the Act includes ss 46 and 47. Section 46 deals with misuse of market power. So far as presently material, it provides that a corporation that has a substantial degree of power in a market shall not take advantage of that power for the purpose of eliminating or substantially damaging a competitor in that or any other market or for the purpose of deterring or preventing a person from engaging in competitive conduct in that or any other market. Section 47 provides that a corporation shall not, in trade or commerce, engage in the practice of exclusive dealing, and then defines that concept. Exclusive dealing includes supplying goods on the condition that the customer will not, or will not except to a limited extent, acquire goods, or goods of a particular kind, from a competitor of the corporation. It also includes refusing to supply goods to a person for the reason that the person has not agreed not to acquire goods from a competitor of the supplier. The prohibition on exclusive dealing only applies where the engaging by the corporation in the conduct described has the purpose or effect of substantially lessening competition in a market (s 47(10)). Furthermore, the prohibition does not operate while there is a notification of exclusive dealing under s 93 in force (s 47(10A)). Section 46, in its terms, operates independently of any contract. Taking advantage of market power for the purpose of (2006) 225 CLR 516 at 533 [52]-[53]. Crennan eliminating or damaging a competitor, or of deterring or preventing competitive conduct, may, or may not, manifest itself in the provisions of a contract made by the corporation but, if a contravention occurs, it is the purposeful conduct of the contravening corporation that attracts the operation of the Act. A contravention of s 47 may or may not involve making or giving effect to a contract. A supply on certain terms may involve a contract. A refusal to supply will not. An offer to supply on certain terms may not. In any such case an anti-competitive purpose or effect is a necessary element of a contravention. As will appear, in the present case the conduct found by Allsop J to have fallen within s 46 and s 47 was not making or giving effect to a contract. It occurred, and was complete, before any contract was entered into. Although ss 46 and 47 apply only to conduct by corporations (a term defined in s 4 in such a way as to invoke the legislative power conferred by s 51(xx) and s 122 of the Constitution), s 6 of the Act gives Pt IV (and other provisions) an extended application designed to invoke other areas of Commonwealth legislative power. There was no argument in the present case as to the extent to which it may be necessary to rely on s 6 in order to give effect to s 2B in cases where it otherwise applies. Since no party contended that s 2B covered the present case, its operation where the relevant agency of an executive government is not a corporation as defined did not arise for consideration. Part IV also includes s 51(1), which requires that, in deciding whether there has been a contravention of the Act, it is necessary to disregard anything done in a State or Territory if the thing is specified in, and specifically authorised by, an Act of the Parliament of the State or an enactment or Ordinance of the Territory, or by regulation. A form of s 51(1) was in force in 1978, but the emphatic double reference to specificity was introduced in 1995, as part of the competition policy reform legislation. In 1978, the exception related to an act or thing specifically authorised or approved. Now it relates to an act or thing that is specified in, and specifically authorised by, State or Territory legislation or delegated legislation. Part VI of the Act deals with enforcement and remedies. It provides, among other things, for pecuniary penalties (s 76) and injunctions (s 80). If the court is satisfied that a person has engaged, or is proposing to engage, in a contravention of Pt IV, the court may grant an injunction in such terms as the court determines to be appropriate. Section 87, which qualifies s 4L, gives the court power to make other orders, as it thinks appropriate, against a person engaging in or involved in a contravention for the purpose of compensating a person who has suffered loss or damage by contravening conduct. The section also gives the court power to declare contracts void in certain circumstances or to Crennan vary contractual provisions or covenants that would be otherwise unenforceable. Section 87A, which also qualifies s 4L, empowers the court to prohibit payment or transfer of moneys or other property in certain circumstances. In SST Consulting Services Pty Ltd v Rieson5, the majority said: "The Act does much more than proscribe ... certain forms of conduct. It contains detailed provisions, in Pt VI, dealing with the enforcement of the Act and providing remedies for past or proposed contraventions of the Act ... [There is] a framework of legislation that makes elaborate provision not only for the creation of norms of conduct but also for the consequences that are to follow from the contravention of those norms." Section 87, in an earlier form, but not s 87A, was in the Act in 1978, but its provisions have become much more extensive since then. The application to the Federal Court The appellant's proceedings were originally brought against the first respondent only. The States of Western Australia, South Australia and New South Wales applied to be joined as parties on the basis that the relief claimed against the first respondent affected the States' contractual rights. At the time the proceedings were commenced, the impugned contracts, or at least some of them, were still on foot. The application before Allsop J was an Amended Application said to be made under ss 46, 47, 76, 80 and 83 of the Act and s 21 of the Federal Court of Australia Act 1976 (Cth) (which empowers the making of declarations). It was alleged that the conduct of the first respondent, in negotiating and entering into certain agreements of the kind described earlier in these reasons, contravened s 46 of the Act. There were eight separate claims for declarations of contraventions by the first respondent of s 46, the differences between them largely relating to questions of market definition. It was further alleged that the first respondent, by its conduct in negotiating, entering into and supplying pursuant to each of the agreements, contravened s 47. There were 12 separate claims for declarations of such contraventions, again the differences being related (2006) 225 CLR 516 at 526-527 [29]-[30] (references omitted). Crennan to matters of market definition. The anti-competitive purpose alleged was that of substantially preventing, hindering, or lessening competition in an identified market. A pecuniary penalty against the first respondent was sought in respect of each instance of contravening conduct. Injunctions were sought against the first respondent. The claims for injunctive relief were as follows: "21. An injunction restraining the First Respondent, by itself its servants or agents, for a period of five (5) years, or for such lesser period as the First Respondent continues to have a substantial degree of power in any of the LVP Fluids Market, PN Fluids Market or the Irrigating Solutions Market from: making any offer to enter into; entering into; or giving effect to any contract, agreement, arrangement or understanding with a State or Territory, containing provisions to the effect that: require the State or Territory to purchase PD products, as part of a bundle together with one or more of the following products, LVP fluids, PN fluids and Irrigating Solutions; and/or require the State or Territory to purchase one or more of the following products PD products, LVP fluids, PN fluids and Irrigating Solutions, exclusively from the [First] Respondent; and/or require the State or Territory to purchase one or more of the following products, PD products, LVP fluids, PN fluids and Irrigating Solutions, exclusively from the [First] Respondent, in order to obtain a special price or discount in respect of those products when compared with the price at which the [First] Respondent is prepared to supply those products in the absence of the requirement. In the alternative to the injunction set out in paragraph 21, an injunction restraining the First Respondent, by itself its servants or agents, for a period of five (5) years, or for such lesser period as the First Respondent continues to have a substantial degree of power in the Sterile Fluids Market; from: Crennan making any offer to enter into; entering into; or giving effect to any contract, agreement, arrangement or understanding with a State or Territory, containing provisions to the effect that: require the State or Territory to purchase PD products, as part of a bundle together with one or more of the following products, LVP fluids, PN fluids and Irrigating Solutions; and/or require the State or Territory to purchase one or more of the following products PD products, LVP fluids, PN fluids and Irrigating Solutions, [First] exclusively Respondent; and/or from the require the State or Territory to purchase one or more of the following products, PD products, LVP fluids, PN fluids and Irrigating Solutions, [First] exclusively Respondent, in order to obtain a special price or discount in respect of those products when compared with the price at which the [First] Respondent is prepared to supply those products in the absence of the requirement. from the 22A. Where an order has been made in terms of paragraph 21 or 22 ('the paragraph 21 or 22 order'), having the effect of restraining the First Respondent from, inter alia, giving effect to one or more of the following agreements:– 2001 SA Supply agreement between Baxter and the State of South Australia for the period 1 April 2001 to 30 March 2006; 2001 WA Supply agreement between Baxter and the State of Western Australia for the period 1 March 2001 to 28 February 2006; and 2001 Queensland Supply agreement between Baxter and the State of Queensland for the period 1 June 2001 to 31 May 2004, Crennan or, if the term of any State Agreement has then expired or been terminated and the First Respondent is supplying (or continuing to supply) the relevant State Purchasing Authority pursuant to: the expired agreement; or another agreement to which the paragraph 21 or 22 order applies ('Substitute Agreement'), [a] further order requiring the First Respondent to supply each of LVP fluids, PN fluids (except in the case of Queensland), Irrigating Solutions and PD products: on terms as to price and payment no less favourable to the State Purchasing Authority than the terms as to price and payment specified in the relevant State Agreement or Substitute Agreement or any continuation or extension thereof including any volume discount, but without any condition restricting the relevant State Purchasing Authority from acquiring any proportion of its requirements for those goods from a person other than the First Respondent; alternatively to sub-paragraph 1), on such terms as to price and payment as the Court considers to be appropriate in all the circumstances, and otherwise in accordance with the terms of the relevant State Agreement or Substitute Agreement, for the remainder of the term of the relevant State Agreement or Substitute Agreement or any continuation or extension thereof." No injunctive relief having been granted, the occasion to consider in detail how orders in that form would have affected any vested legal rights of the second, third and fourth respondents under the impugned contracts or otherwise did not arise. The findings of the primary judge on contravention Although Allsop J accepted that ss 46 and 47 of the Act did not apply, or did not relevantly apply, to the conduct of the first respondent because such conduct related to dealings with State or Territory governments which were not themselves carrying on a business, he went on to deal with the arguments of the Crennan parties on the assumption that the first respondent's primary contention (of derivative immunity) was wrong. On that basis, Allsop J concluded that there was one contravention of s 46. There were, he decided, two relevant markets: an Australia-wide sterile fluids market, and an Australia-wide PD fluids market. He found that the first respondent had a substantial degree of market power in the sterile fluids market. Save in one instance, however, he was not satisfied that the first respondent had taken advantage of its market power or that it had been shown to have a purpose proscribed by s 46(1)(a) or s 46(1)(c). The single instance concerned the first respondent's conduct in relation to what was referred to as Offer 1A in South Australia. In relation to the rest of the first respondent's conduct, Allsop J said: "When one examines the history of the market, from the 1980s through to the exit of Abbott and the tendering processes, with the exception of Offer 1A to SA in 2000, one does not see any of the relevant offers being made over the opposition of the SPAs or the exclusive contracts somehow forcibly extracted from them. The relevant offers were not made in circumstances in which it can be seen that advantage was being extracted from the position of power by obtaining something from the SPAs which was resisted. Other than SA in Offer 1A, no SPA asked for a volume discount for sterile fluids on an exclusive basis, detached from PD." The facts in relation to Offer 1A may be summarised as follows. (While this summary is adequate for the purposes of the present appeal, it is not intended to foreclose any issue that would arise if the case were remitted to the Full Court.) In July 2000, the Department of Human Services of South Australia issued a public request for tenders in relation to various pharmaceutical products, including LVP, PD and PN fluids and IS. The Department was advised by the Strategic Procurement Unit. Tenders were received from the first respondent, and from Gambro and Fresenius. Fresenius tendered for PD products, as did Gambro. Gambro made offers on a bundled and unbundled basis in relation to haemodialysis and haemofiltration products. The first respondent tendered for all products. Its Offer 1 was an item-by-item bid to supply all items for two years (with options for extensions). Its Offer 2 was a combined bid for all items on an exclusive basis for five years with volume discounts. The Department requested a revised offer (to be called Offer 1A), being for a five-year term for the products in the tender but excluding those renal products the subject of a supplementary tender. The request was for an offer for a sole and exclusive supply of sterile fluids, not including PD fluids. A volume discount was sought in exchange for sole and exclusive supply of sterile fluids. This was the first time any SPA had asked for a tender on an exclusive and long-term basis which excluded PD fluids. Crennan The first respondent, in Offer 1A, offered no discount from the item-by-item prices. Furthermore, Offers 1 and 1A (when PD fluids were added) would both cost $5,914,291, whereas the bundled Offer 2 would cost $4,501,053. The first respondent's bundled offer (Offer 2) for IV fluids and PD fluids was cheaper than its item-by-item offer for IV fluids alone. The Department protested, and raised concerns that the first respondent's conduct might be in breach of s 46 of the Act. Offer 1A was not accepted. Subsequently a different offer from the first respondent was accepted. Allsop J found that the conduct of the first respondent in relation to Offer 1A was a taking advantage by the first respondent of its substantial degree of power in the sterile fluids market for the purpose of preventing competition in the PD market. He said: "The purpose of the bid and its structure was to foreclose the likelihood or restrict the possibility of a competitor's bid having any realistic prospect of success. The stubbornness of [the first respondent's] attitude to the request for Offer 1A in SA in 2001 reflects the reality of the purpose of the structure of the bids. To give a genuine discount for volume would be to make Fresenius' and Gambro's PD bids ones that had realistic prospects of success. It was that that was to be prevented, thereby protecting the PD revenue stream." The conduct which would have contravened s 46 but for the derivative immunity was conduct that was unilateral. South Australia was not a party to it. Indeed, South Australia protested that it was unlawful (although South Australia now supports the stand taken by the first respondent). Offer 1A was not accepted, and did not find ultimate expression in a contract between the first respondent and the State. As to s 47, there was no dispute that, subject to the question of immunity, the first respondent's conduct fell within s 47(2) of the Act, "because of the bundling of its tenders". The question was whether s 47(10) was enlivened, and that depended upon whether the conduct had the purpose of substantially lessening competition. Allsop J regarded the tender system used by the States as the critical aspect of the process. He held that it was the first respondent's purpose to ensure so far as possible that the process of tendering would not bring about realistically competitive bids for PD products. He said: "Each of the SPAs and the State governments which put in place a tender process intended that the operation of that process would produce real competition for the products the subject of the tender process. The Crennan purpose of Baxter was ... to structure the bids made by it in a way to prevent rival bidders for PD products from being able to put forward bids that were realistically competitive, by the existence of credible alternative high item-by-item pricing. The purpose was to ensure, as far as possible, that the competitive process of the tender process would not bring about realistically competitive bids for PD products by tying or bundling PD products to sterile fluids, and by providing a credible alternative which would make a choice of any likely rival PD product financially damaging to the State. Is that a purpose of 'lessening competition'? In my view it is. The competitive process here was the tender system used by the States. Suppliers in the relevant field were asked to bid on an hypothesis that each would be competing in a process that would be conducted in such a way as would enable each, subject to price and quality considerations, to have a realistic prospect of success ... Here ... one may conclude that the rivals' bids are not competitive by reason of the realistic consequences that will occur to the buyer if the condition imposed by one rival on its offer to supply is not complied with. In those circumstances, it is the perceived consequences of not accepting the offer of bundled supply, that is, of not accepting the offer amounting to exclusive dealing within s 47(2), which hinders the effective operation of the tender process in relation to PD products. That plainly was the purpose of the bundled bids. That purpose, in my view, is one directed to hindering the competitive process of the tender bids and so hindering competition." Here again, the finding of the primary judge related only to pre-contract conduct. There was no similar finding in relation to entering into the contracts, or to the supply of goods under them. Allsop J did not consider that the contracts themselves had any substantial effect on competition. Events in the Full Court In the Full Court, both the appellant and the first respondent challenged these conclusions: the appellant on the ground that there were other contraventions of ss 46 and 47 in addition to those found by Allsop J; the first respondent on the ground that (apart from the question of immunity) there was no contravening conduct. The Full Court did not deal with those issues. Consequently, the specific focus of the argument in this Court concerning the decisions of Allsop J, and the Full Court, concerned those aspects of the first respondent's conduct that Allsop J found would have contravened the Act but for the derivative immunity. That conduct was all pre-contract and, in the sense Crennan earlier explained, unilateral. Nevertheless, it is to be remembered that the appellant's claims of contravention covered the making and performance of the now-expired contracts. The legal position of the second, third and fourth respondents Sections 46 and 47 of the Act did not apply to the conduct of the second, third and fourth respondents, or any other State or Territory government involved in procuring sterile fluids or PD products from the first respondent. That is because it was conceded that the procurement did not take place in the course of carrying on a business by what the Act describes as the Crown in right of a State or Territory. The appellant's application did not allege any contravention of the Act by any State or Territory or seek any order or relief against any State or Territory. Indeed, the application in its original form did not join any State or Territory as a party. The injunctive relief sought was expressed so as to preserve the contractual rights of the States. The reasons why ss 46 and 47 did not apply to any conduct of the second, third and fourth respondents may be stated briefly. It was held by this Court in Bradken6 that the Act, as it stood in 1978, did not bind the Crown in right of a State. The principle applied in Bradken was expressed by Gibbs ACJ as follows7: "It is an established rule of construction that no statute binds the Crown unless the Crown is expressly named therein or unless there is a necessary implication that it was intended to be bound; there will be such a necessary implication if it is manifest from the very terms of the statute that it was the intention of the legislature that the Crown should be bound." That principle of construction was reconsidered, and modified, by this Court in 1990 in Bropho v Western Australia8. After pointing out that, in this context, "the Crown" signifies not only the Sovereign but also the executive (1979) 145 CLR 107. (1979) 145 CLR 107 at 116 (references omitted). (1990) 171 CLR 1. Crennan government, its employees and agents, Mason CJ, Deane, Dawson, Toohey, Gaudron and McHugh JJ said9: "For so long as 'the Crown' encompassed little more than the Sovereign, his or her direct representatives and the basic organs of government, there may well have been convincing reasons for an assumption that a legislative intent that general statutory provisions should bind the Crown and those who represent it would be either stated in express terms or made 'manifest from the very terms of the statute'. The basis of an assumption to that effect lay in a mixture of considerations: regard for the dignity and majesty of the Crown; concern to ensure that any proposed statutory derogation from the authority of the Crown was made plain in the legislative provisions submitted for the royal assent; and, the general proposition that, since laws are made by rulers for subjects, a general description of those bound by a statute is not to be read as including the Crown ... Whatever force such considerations may continue to have in relation to legislative provisions which would deprive the Crown 'of any part of [the] ancient prerogative, or of those rights which are ... essential to [the] regal capacity' ... they would seem to have little relevance, at least in this country, to the question whether a legislative provision worded in general terms should be read down so that it is inapplicable to the activities of any of the employees of the myriad of governmental commercial and industrial instrumentalities covered by the shield of the Crown." Their Honours emphasised that what was involved was a general principle of statutory construction, not some prerogative power of the Crown to override a statute, or dispense with compliance10. This is of some present importance, because some of the arguments for the respondents about derivative immunity had about them a flavour of assertion of executive prerogative. The Court in Bropho concluded that the inflexible rule as formulated, for example, in Bradken, should give way to a more flexible approach to construction that took account of the nature of the statutory provisions in question and the activities of government to which they might apply. Making the (1990) 171 CLR 1 at 18-19. 10 (1990) 171 CLR 1 at 15. Crennan Commonwealth or a State liable to prosecution might be one thing. Subjecting the employees of a governmental corporation to general requirements enacted for the public benefit might be another. The joint reasons said11: "Implicit in that is acceptance of the propositions that, notwithstanding the absence of express words, an Act may, when construed in context, disclose a legislative intent that one of its provisions will bind the Crown while others do not and that a disclosed legislative intent to bind the Crown may be qualified in that it may, for example, not apply directly to the Sovereign herself or to a Crown instrumentality itself as distinct from employees or agents. Always, the ultimate questions must be whether the presumption against the Crown being bound has, in all the circumstances, been rebutted, and, if it has, the extent to which it was the legislative intent that the particular Act should bind the Crown and/or those covered by the prima facie immunity of the Crown." (emphasis added) Brennan J agreed with the joint judgment, saying12: "[T]he presumption cannot be put any higher than this: that the Crown is not bound by statute unless a contrary intention can be discerned from all the relevant circumstances. As the Court must determine whether the legislature intended (or would have intended had the question been addressed) that the statute should affect the activities of the Executive Government, the circumstances which properly relate to that question must be considered. Those circumstances include the terms of the statute, its subject matter, the nature of the mischief to be redressed, the general purpose and effect of the statute, and the nature of the activities of the Executive Government which would be affected if the Crown is bound." At the time of Bradken, the Act contained s 2A. The express provision that the Act bound the Crown in right of the Commonwealth in so far as it was carrying on a business was treated by some members of the Court as a strong indication that it did not bind the Crown in right of a State13. When, in 1995, s 2B was added, providing that certain provisions of the Act bound the Crown in right of a State or Territory when carrying on a business, the conclusion reached 11 (1990) 171 CLR 1 at 23-24. 12 (1990) 171 CLR 1 at 28. 13 (1979) 145 CLR 107 at 116, 136. Crennan in Bradken was reversed in so far as the Crown was carrying on a business, but reinforced in so far as the Crown was not carrying on a business14. Although the conduct in the present case found to fall within the terms of ss 46 and 47 was unilateral conduct of the first respondent, the terms of the Act cover (although they are not limited to) conduct that includes making or giving effect to contracts. Indeed, some of the contraventions alleged but not found against the first respondent were of that kind. There is nothing unusual about a circumstance in which making or giving effect to a contract involves an offence by one party to the contract but not by the other. The consequences of such illegality for the rights of the respective parties will not necessarily be the same15. Furthermore, there is nothing unusual about the Act applying to one party to a transaction, or proposed transaction, but not to the other. Leaving aside the extended application given by s 6, ss 46 and 47 according to their terms apply to conduct by corporations, not sole traders or partnerships. In a transaction between a corporation and an individual, the provisions may apply to the corporation but not to the individual. Differential application of legislation to parties to a contract is commonplace, although working out the legal consequences may be complex. In Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd16, Mason J said: "The principle that a contract the making of which is expressly or impliedly prohibited by statute is illegal and void is one of long standing but it has always been recognized that the principle is necessarily subject to any contrary intention manifested by the statute. It is perhaps more accurate to say that the question whether a contract prohibited by statute is void is, like the associated question whether the statute prohibits the contract, a question of statutory construction and that the principle to 14 See Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at 348-349 [22]. 15 Treitel, The Law of Contract, 11th ed (2003) at 480-490; Phoenix General Insurance Co of Greece SA v Halvanon Insurance Co Ltd [1988] QB 216 at 273; Australian Broadcasting Corporation v Redmore Pty Ltd (1989) 166 CLR 454 at 16 (1978) 139 CLR 410 at 423. Crennan which I have referred does no more than enunciate the ordinary rule which will be applied when the statute itself is silent upon the question." That passage was cited by Kerr LJ in Phoenix General Insurance Co of Greece SA v Halvanon Insurance Co Ltd17, where his Lordship said that when a statute contains a unilateral prohibition on entry into a contract, it does not follow that the contract is void18. Whether or not the statute has this effect depends upon the mischief which the statute is designed to prevent, its language, scope and purpose, the consequences for the innocent party, and any other relevant considerations. Ultimately, the question is one of statutory construction. As was pointed out in SST Consulting Services Pty Ltd v Rieson19, the Act is far from being silent upon the question of the consequences of illegality, but, rather, contains elaborate provisions. That is not to say that the express provisions of the Act answer all questions that may arise, but they answer many of them, and set the context in which others are to be resolved. It should also be remembered that, as Gibbs J said in McGraw-Hinds (Aust) Pty Ltd v Smith20, the fact that an offence is one that may not be committed by the Crown is no reason for concluding that it may not be committed against the Crown. That was a case in which a Queensland statute, which did not bind the Crown, prohibited conduct involving an assertion of a right to payment for a directory entry. Such an assertion was made to the Queensland Government Tourist Bureau. The conduct in making the assertion was held to be covered by the prohibition. On its true construction, the Crown was intended to be protected by the prohibition, which therefore applied to conduct in relation to government agencies although it did not apply to conduct by government agencies. Section 2 of the Act states the object as enhancing the welfare of Australians through the promotion of competition and fair trading. Identifying the operation of the Act as a benefit or a burden for government agencies, even in a particular instance, may not be straightforward. Plainly, in the case of procurement of supplies through the tender process, the anti-competitive practice of collusive tendering often would harm directly the interests of the procuring 17 [1988] QB 216 at 270. 18 [1988] QB 216 at 273. 19 (2006) 225 CLR 516 at 527 [30]. 20 (1979) 144 CLR 633 at 643-644. Crennan agency. That would be a form of conduct in relation to the Crown in right of a State, but it seems improbable in the extreme, at least since 1995, that the Act was not intended to apply to such conduct. It would appear to fall squarely within the authority of McGraw-Hinds (Aust) Pty Ltd v Smith. What, then, of the conduct found by Allsop J to have fallen within the scope of s 46 – that is, the conduct in relation to Offer 1A? Assuming Allsop J otherwise to have been correct, the direct harm caused by such conduct was to the first respondent's competitors in the market for PD products, but it is difficult to understand why anti-competitive behaviour in relation to that market would not have affected, at least indirectly, the interests of the procuring agency. It was not conduct which South Australia encouraged. It was conduct about which South Australia complained, at least then, although it does not do so now. Similarly, as to s 47, Allsop J found that the purpose of the conduct of the first respondent was to defeat the States' desire for a competitive tender process. Moving away from the particular facts of the present case, promotion of competition and fair trading is at least as likely to be for the benefit of government purchasing authorities as it is to be a potential invasion of government interests. To describe the conclusion for which the appellant contends as one that adversely affects State interests is at least an over-simplification. It may be added that, if State Parliaments see State interests to be threatened by competition law, they have the power of exemption given by s 51(1) of the Act, provided, of course, they are willing to accept the political responsibility of exercising that power with the necessary specificity. There was no pleading, and no finding by Allsop J, as to whether any of the SPAs were corporations or as to any fact relevant to s 6 of the Act. In any event, once it was accepted that they were not in any relevant respect carrying on a business, the plain inference from s 2B is that ss 46 and 47 did not apply to the SPAs. It is necessary now to consider what, if anything, flows from that as to the application of ss 46 and 47 to the conduct of the first respondent in relation to its dealings or proposed dealings with them, and, in particular, to the conduct found by Allsop J to fall within the terms of those provisions. In the case of the conduct found to fall within s 47, it was entirely pre-contractual. In the case of the conduct found to fall within s 46, it did not result in any contract. However, the appellant also argues that the conduct of making and performing contracts involved, or could involve, contraventions of ss 46 and 47 by the first respondent, and that possibility means that there is a wider question to be considered. The legal position of the first respondent The starting point for this enquiry is the decision in Bradken. The headnote in the authorised report of that case simply states that it decided that the Crennan Act did not bind the Crown in right of a State. Section 2B later reversed that position so far as the Crown in right of a State (or Territory) carries on a business, but it is still the position otherwise. What matters for this appeal is the consequence. That question arose in Bradken against a somewhat confusing procedural background. During the course of argument in the present case, reference was made to the court record in Bradken. The case involved a claim for injunctive relief by manufacturers of rolling stock. The applicants were competitors of the first, third, fourth and fifth respondents. The second respondent, the Queensland Commissioner for Railways, a corporation, was a Queensland government authority which was a purchaser of rolling stock. In early 1978, the second respondent agreed to acquire rolling stock from the other respondents, not by the usual process of competitive tender, but in circumstances that allegedly contravened s 45 or s 47 of the Act. It was part of the agreement that the first and fifth respondents would provide finance to the second respondent for the construction of the railway on which the rolling stock was to be used. This was the result of negotiations that had extended over many years, since before the commencement of the Act. The merits of the claim that the conduct of the respondents, or any of them, fell within s 45 or s 47 are presently irrelevant and, indeed, were never decided. After the applicants commenced proceedings against all respondents, the case was removed into this Court to decide a defence raised by the second respondent. The defence was that the Act did not apply to him because he was not a trading corporation and was an instrumentality or agent of the Crown in right of the State of Queensland which was not bound by the Act. Another presently irrelevant defence also was raised. This Court, by majority, upheld the defence that the Commissioner was an instrumentality or agent of the Crown in right of the State of Queensland and was not bound by the Act. Furthermore, the Court held that the defence raised was a bar to the granting of the relief sought in the applicants' points of claim pars 34(1) and 34(2). Those paragraphs sought injunctions restraining the first, second and fifth respondents from giving effect to the contract arrangement or understanding complained of. It was also held to be a bar to the granting of the relief sought in pars 34(3) and 34(4), which sought general restraints against exclusive dealing, "in so far as that relief is sought upon the basis of the allegations presently made in the points of claim."21 The matter was remitted to the Federal Court. As appears from the report of the argument22, the primary stance of counsel for the applicants when the case reached this Court was to 21 (1979) 145 CLR 107 at 141. 22 (1979) 145 CLR 107 at 110-111. Crennan concede that no relief could be obtained against the Commissioner, but to seek to discontinue and proceed only against the other respondents. In that connection, he indicated that he would wish to amend, and base a claim for relief on pre- contract conduct. Gibbs ACJ said23: "The applicants indicated that they wished to amend their points of claim in the Federal Court, to raise a new case that the respondent companies had, contrary to the Trade Practices Act, engaged in conduct (pre- contractual conduct it was called) in which the Commissioner played no part. Nothing that I have said is intended to indicate that the Commissioner would be a necessary party to the proceedings if that were the only case presented against the respondent companies – that question is not before us and I express no views upon it." Thus, the decision in Bradken left unresolved any issue as to alleged contraventions of the Act in the pre-contractual conduct of the respondents, other than the Commissioner. What the Court decided, however, was that the relief sought in the existing points of claim, under s 80 of the Act, was barred by the defence that the Crown in right of the State of Queensland was not bound by the Act. That relief was an injunction restraining the relevant respondents, including the Commissioner, from giving effect to the provisions of the contract, arrangement or understanding contrary to s 45 or s 47 of the Act. Central to those provisions were the financing arrangements for the railway. The Court decided that ss 45, 47 and 80 did not empower a court to make orders restraining the parties from giving effect to those contracts. The reasons given in Bradken for the conclusion that ss 45 and 47 of the Act did not apply to the conduct of the Queensland Commissioner for Railways must now be regarded, in the light of this Court's decision in Bropho, as too widely expressed. The appellant submits, correctly, that the same is true of the reasons given for the conclusion that ss 45, 47 and 80 did not empower a court to grant the relief sought in the points of claim, in their existing form. It is also important to note what was left undecided by Bradken. Bradken did not decide that the Act had no application to any conduct of the respondents other than the Commissioner in relation to their dealings with the Commissioner. It did not decide that a corporation dealing with the Crown in right of a State is unaffected by the Act. It did not decide, for example, that corporations are free to engage in collusive tendering when bidding for government contracts, even though it noted 23 (1979) 145 CLR 107 at 113. Crennan with approval the United Kingdom decision, concerning a different legislative scheme, in In re Telephone Apparatus Manufacturers' Application24. Having concluded that ss 45 and 47 of the Act did not apply to the Queensland Commissioner for Railways, as an emanation of the Crown in right of the State of Queensland, Gibbs ACJ went on25: "It of course follows that the applicants cannot obtain the relief which they seek against the Commissioner, but can they obtain the relief sought against the respondent companies? I have already pointed out that such relief, if granted, would invalidate transactions to which the Commissioner is a party. The first two claims are for injunctions to restrain the respondent companies concerned from giving effect to the provisions of contracts, arrangements or understandings to which the Commissioner was a party. An injunction restraining one of the parties to a contract from completing it affects not only the party against whom it is made; it equally affects the other party to the contract. The third and fourth claims are for injunctions restraining certain of the respondent companies from engaging in the practice of exclusive dealing, which, according to the points of claim, consists in providing, or agreeing to provide, finance and/or financial assistance to the Commissioner on certain conditions. Those injunctions, if granted, will affect the Commissioner as much as the respondent companies. In other words, if the remedies sought are granted against the respondent companies, the Commissioner will be prejudiced by the operation of the Trade Practices Act just as much as if its provisions had been directly enforced against him." (emphasis added) The Acting Chief Justice then referred to a corollary of the proposition that the Act did not bind the Crown. He quoted Romer LJ who said, in Clark v Downes26: "The Acts not binding the Crown, it is the duty of the courts so to construe the Acts that the Crown and its property are in no way prejudicially affected by the Acts." After referring to other authorities Gibbs ACJ dealt with the corollary thus27: "It is not necessary to explore the limits of this principle." 24 [1963] 1 WLR 463; [1963] 2 All ER 302; (1963) LR 3 RP 462. 25 (1979) 145 CLR 107 at 123. 26 (1931) 145 LT 20 at 22. 27 (1979) 145 CLR 107 at 124. Crennan One reason it was unnecessary to explore the limits of the principle was that the case was to be remitted to the Federal Court to enable the applicants to re-frame their case against the respondents other than the Commissioner. Stephen J, having held that the Act did not bind the Crown, said28: "Once this be concluded it follows that the Act will not only not apply directly to the Commissioner but will also not apply so as to prejudice its interests when in contractual relationship with parties to whom the Act clearly applies or when otherwise interested in transactions affecting those parties (In re Telephone Apparatus Manufacturers' Application29)." This, it is to be observed, treated the respondents other than the Commissioner as parties "to whom the Act clearly [applied]". Mason and Jacobs JJ said of the corollary that "the absence of [a legislative] intention to bind the Crown in right of Queensland will not only exonerate it from the direct application of the statutory provisions but will also exonerate from the application of those provisions the contracts arrangements or understandings made by that Crown and the other parties thereto as well."30 The other member of the Court, Murphy J, dissented. Both Stephen J and Murphy J said that the Court had not had the benefit of full argument on all issues31. However that may be, the Court, beyond making it plain (by remitting the issue of pre-contractual conduct to the Federal Court) that it was not finding that the Act did not apply to the other respondents, and that it was unnecessary to explore the limits of the principle involved, left unresolved a number of questions of present relevance. Two things are clear. First, the proposition applied in Bradken was regarded as a corollary of the principle about Crown immunity. Secondly, both the proposition about Crown immunity and its corollary are principles of statutory construction. The Court's statement in Bradken of the principle about Crown immunity no longer accurately represents the law. It has been overtaken by the decision in Bropho. Despite the statement in the joint judgment that the 28 (1979) 145 CLR 107 at 129. 29 [1963] 1 WLR 463; [1963] 2 All ER 302; (1963) LR 3 RP 462. 30 (1979) 145 CLR 107 at 138. 31 (1979) 145 CLR 107 at 128, 141. Crennan effect of its reasoning was not to overturn the settled construction of particular existing legislation, the fact that that reasoning was enunciated alone requires reconsideration of its statement of the corollary. Furthermore, in the application of the principle, it being one of statutory construction, it is necessary to consider changes to the Act since Bradken. It should also be noted that Bradken contained no discussion of a related and wider question of statutory construction: how does the Act operate in the (not uncommon) case of a contract between a corporation and a party who is not bound by the Act? To begin with, for the purposes of this case it is necessary to be more precise about the proposition of construction that is the corollary of the principle that is now to be found in Bropho. In Wynyard Investments Pty Ltd v Commissioner for Railways (NSW)32, Kitto J said (references omitted): "The cases in which a statutory provision not binding on the Crown must be denied an incidence upon a subject of the Crown because that incidence would be in legal effect upon the Crown fall into a few broad classes. There is first the class of cases where a provision, if applied to a particular individual or corporation, would adversely affect the exercise of an authority which he or it possesses as a servant or agent of the Crown to perform some function so that in law it is performed by the Crown itself. Next there is the class of cases in which a provision, if applied to a particular individual or corporation, would adversely affect some proprietary right or interest of the Crown, legal equitable or statutory. And finally there is an anomalous class of cases where a provision creating a liability by reference to the ownership or occupation of property would, in its application in respect of certain kinds of property, impose a burden upon the performance of functions which, though not performed by servants or agents of the Crown, are looked upon by the law as performed for the Crown." We are concerned with the second of these classes, bearing in mind that what is involved is the "incidence ... in legal effect" upon the Crown. General references to unspecified forms of prejudice to interests of the Crown in a context such as this are unhelpful. There were references in the argument for the respondents to the "right" of States to enter into contracts, where what was in contemplation would be described more accurately as a freedom. There is also a risk of confusing governmental, commercial, or even political interests with 32 (1955) 93 CLR 376 at 393-394. Crennan legal, equitable or statutory rights and interests. From one point of view, it may be in the interests of a government for it, and anyone who deals with it, to have complete freedom to contract, but in reality no one has such freedom. There are many laws, some of which apply to governments and some of which do not, that constrain freedom of contract. Some of those laws that do not apply to governments have an indirect effect upon governments, in their application to people dealing with governments. Some of those laws operate for the protection of governments. A law to promote competition and fair trading may, in some of its aspects, operate in that way. For reasons already given, whether and to what extent it is to the advantage of executive governments, Commonwealth or State, for corporations dealing with them to be unfettered by laws which promote competition, is a question to which there is no simple answer. Because of its power to make laws with respect to trading corporations, it is a question on which the language of the federal Parliament's legislation is decisive, subject to In Wynyard Investments33, Kitto J said: "The object in view is to ascertain whether the Crown has such an interest in that which would be interfered with if the provision in question were held to bind the corporation that the interference would be, for a legal reason, an interference with some right, interest, power, authority, privilege, immunity or purpose belonging or appertaining to the Crown." The need for concentration on legal consequences in this context has been stressed in recent times by this Court in NT Power Generation Pty Ltd v Power and Water Authority34. The principle of construction to be applied is that, since the Act does not bind the Crown in right of a State or Territory when it is not carrying on a business, then, save to the extent to which a contrary intention appears, the Act will not be read so as to divest the Crown of proprietary, contractual or other legal rights or interests. Consistently with Bropho, such a contrary intention may appear from the language of the Act, and its objects and subject matter as emerging from that language. 33 (1955) 93 CLR 376 at 396. 34 (2004) 219 CLR 90 at 152 [170]. Crennan The construction of the Act For the reasons already given, and particularly because of the terms of s 2B, ss 46 and 47 of the Act, even when the Crown is acting through a corporation as defined, or in any extended application of the Act under s 6, do not apply to conduct of the Crown in right of a State or Territory so far as the Crown does not carry on a business. Sections 46 and 47 did not apply to any conduct of the second, third and fourth respondents in this case. At the same time, it would be wrong to conclude that ss 46 and 47 had no application to any conduct of the first respondent in relation to its dealings with the second, third and fourth respondents. The first respondent was a trading corporation. A conclusion that, in carrying on dealings with a government in the course of its own business, it enjoyed a general immunity not available to the government when the government was carrying on business itself would be remarkable. Such a conclusion would be impossible to reconcile with the object of the Act as now declared in s 2. Furthermore, such a conclusion would go far beyond what is necessary to protect the legal rights of governments, or to prevent a divesting of proprietary, contractual and other legal rights and interests. As a result of changes to the Act since Bradken, State and Territory governments no longer enjoy any general immunity from the Act. Acting under s 51(1), State and Territory Parliaments may legislate to protect governmental interests, but the legislative emphasis on the specificity with which they must do that (increased since Bradken) draws attention to the importance attached to the pursuit of the object declared in s 2. One example is sufficient to demonstrate the unacceptable consequences of a general proposition that s 47 of the Act did not apply to the first respondent in its dealings with the SPAs. Section 47(3) covers refusals to deal. Suppose the first respondent, over the protests of a SPA, had refused to supply sterile fluids unless the SPA agreed not to acquire PD products from anyone else. It is difficult to take seriously a suggestion that the Act was not intended to cover such conduct. The real question is the extent to which the reach of ss 46 and 47 of the Act, and the provisions relating to remedies, in their potential application to the conduct of the first respondent, is modified by the operation of the principle of construction discussed above. The argument for the respondents, accepted by Allsop J and the Full Court, was expressed by Allsop J as follows: Crennan "The respondents submitted that all [the] relief [claimed] impermissibly applied the Act to the Crown by denying it the right, power and capacity that it had and has to enter a contract of such kind as it wishes. This was said to be an interference directly with its rights and not a mere adjectival interference with its commercial interests." Underlying this argument is the idea that the Act operated so as not to enact any law that would circumscribe the freedom of the Crown in right of a State or Territory to make any kind of contract it wished, and, furthermore, that the Act preserved the Crown's freedom in that respect, by providing that corporations dealing or negotiating with the Crown should be free to propose and make any kind of contract, unfettered by any constraint under the Act. These ideas cannot be supported by reference to any established principle of statutory construction, and they are impossible to reconcile with the purpose and subject matter of the Act. It is one thing to read the Act so as not to divest the Crown of legal rights. It is another thing altogether to read the Act as giving an executive government (as distinct from a Parliament acting under s 51(1)), including all its servants and agents, a freedom not enjoyed when the government itself is carrying on business, from any impact of laws enacted for the promotion of competition and fair trading in the public interest. And it is even more unlikely that that freedom extends to all persons dealing with that executive government. Allsop J accepted the following proposition: "If a State or Territory has a contract with a non-government party, the Act is to be construed as not applying to that contract such that the State or Territory and non-government party [are] not bound by the terms of the Act in relation to the entry into and performance of that contract." If the expression "is to be construed" suggests some inflexible rule of construction, the proposition is inconsistent with Bropho. Even if the expression is understood only as a prima facie approach to construction, it is too wide. In order to protect legal rights of the Crown, it is not necessary to deny that entering into or performing a contract could involve a contravention of s 46 or s 47 by a non-government party. As was pointed out earlier, many statutes, and the Act in particular, may produce the consequence that making or performing a contract is illegal for one party but not for the other. When that occurs, the result is not necessarily general unenforceability of the contract. In the case of the Act, that is reinforced by s 4L as explained in SST Consulting Services Pty Ltd v Rieson35. 35 (2006) 225 CLR 516. Crennan The outcome is determined by the application of the detailed legislative scheme concerning remedies. It is not dictated by a general conclusion that, in order to preserve the Crown's immunity, it is necessary also to extend a general immunity to any non-government party negotiating or contracting with the Crown. Finally, Allsop J dealt with the problem that, on his findings, the only conduct of the first respondent that otherwise fell within s 46 or s 47 was pre- contract conduct and, in the case of s 46, was conduct that never led to a contract. He said: "This leaves the issue of whether the principle [of derivative immunity] only prevents the application or operation of the Act to the entry into or giving effect to the impugned contracts once formed, as crystallised legal rights, or whether it extends to prevent the application or operation of the Act to the commercial negotiations leading up to the formation of the impugned contracts. If the former, then Baxter will have contravened s 46 of the Act by making Offer 1A in SA and s 47 of the Act by negotiating, and making the offers it made leading up to the formation of, the impugned agreements. Not only will this have the consequences that declarations to that effect will be made and that Baxter will be liable to the imposition of penalties, but also, Baxter can be restrained from the repetition of such conduct in the future. This would thereby prevent or foreclose the State or the ACT from making a contract with Baxter by preventing its negotiation, notwithstanding that if such a contract were to be formed the Act would not extend to either Baxter or the State or the ACT as to its formation and performance." The premise that the Act would not apply to the first respondent in relation to the formation or performance of the contract is unwarranted. Even if it were correct, it would not follow that pre-contract conduct, or conduct that never resulted in a contract, would be beyond the reach of the Act. Allsop J dealt with that question by reference to the States' and Territories' freedom of contract, which he described as an aspect of the prerogative, or at least of the relevant polity's "legal situation". He referred to the initiation by governments of a tender process and said: "Does, then, the Act operate to make it unlawful for non- government parties to respond to such tenders or invitations or to participate in negotiation if a specified norm of conduct is contravened? If the answer to that were yes, it would follow (at least insofar as the response was such as to be within the contemplation of the request or Crennan invitation) that the legal rights, interests or prerogatives of the polity in question were qualified or impaired. Thus, the answer must be, no." This reasoning, also, seems to seek to apply some inflexible rule, but even as an expression of an approach to construction it goes beyond the established principle. The concept of responding to an invitation to tender is pregnant with uncertainty. Obviously the learned judge regarded Offer 1A as a response. This then was qualified by references to conduct "within the contemplation of the request or invitation". What is meant by that is unclear. The reaction of South Australia to Offer 1A hardly suggests that the conduct of the first respondent was within its contemplation. Even if it had been, the purpose of the Act is to promote competition, which is a process which operates for the public benefit, not to satisfy the expectations of parties. Whether it was open to the first respondent to argue, as it did, successfully, that the conduct of the SPAs was of factual relevance in considering whether its conduct had the necessary anti- competitive purpose or effect can be left to one side for present purposes. As a matter of construction of the Act, however, it is wrong to conclude that it operates to preserve unfettered the contractual capacities of the Crown, to the extent of withholding the application of the Act from conduct by non- government parties in response to an invitation to tender. To return to an example given earlier, suppose a response to an invitation to tender is a refusal to supply except on certain exclusive terms, and that refusal is made with the purpose of lessening competition. It is unsatisfactory to make the application of the Act depend on whether this is a response that was within the contemplation of the procuring authority. It is also at odds with the restrictions imposed by s 51(1) on the capacity of a Parliament to exempt anti-competitive behaviour from the Act. It seems to give the public officials of States and Territories a wider power to give dispensations from the operation of Commonwealth law than State or Territory legislatures. The construction urged by the respondents imposes a very extensive qualification upon the Act's object of promoting competition and fair trading in the public interest, in the name of the protecting of the capacities of the Crown, a qualification strikingly at odds with the way the Act deals with governments when they themselves carry on a business. As the Full Court (which felt bound by Bradken to uphold the decision of the primary judge) rightly said: "The amount involved in the combined purchases of goods and services by the executive governments of the States and State instrumentalities is massive and, as this case illustrates, in many fields would dominate demand. It is one thing to exempt the executive government from legislative prohibition as to conduct, particularly where the dominant Crennan position of the executive government in many markets would complicate procurement. It is another to have a substantial area of commerce in which restrictive practices can be carried on by all those dealing with a government, perhaps to the disadvantage of the public purchasing authority, but also to the detriment of other suppliers and consumers." The Act has changed materially since Bradken, as has the law governing the relevant principles of construction. Even Bradken itself did not decide issues as to pre-contract conduct. It is necessary for this Court to approach the construction of the Act, as it stands at present, in the light of the current context of competition law. Conclusion It should be concluded that, in its dealings with the SPAs, the first respondent was bound by ss 46 and 47. As to those aspects of that conduct found by Allsop J to have fallen within the prohibitions in ss 46 and 47, there is no sufficient reason to deny the availability of the remedies, including pecuniary penalties, sought by the appellant. The proposition that the Act does not bind SPAs does not require, as a corollary, that it does not bind corporations dealing with SPAs. It follows that the matter must be remitted to the Full Court for determination of those parts of the appellant's notice of appeal which have not been dealt with, and of the notice of contention. It is not desirable to say anything about the question whether, if the Full Court concludes, contrary to Allsop J, that the conduct of the first respondent in making and giving effect to the impugned contracts fell within the prohibitions in s 46 or s 47, those contracts were enforceable. Whether, and to what extent, the question would arise at all, having regard to the expiry of the contracts, is another matter. The nature and form of any injunctive or declaratory relief that might be appropriate would be a matter for consideration. These issues were either not fully argued in the present appeal or not argued at all. The appeal should be allowed. The orders of the Full Court of the Federal Court of Australia made on 24 August 2006 should be set aside. The matter should be remitted to the Full Court for further consideration consistently with the reasons of this Court. The respondents should pay the appellant's costs of the appeal. The costs of the proceedings to date should otherwise be in the discretion of the Full Court. Kirby KIRBY J. This appeal was propounded as an opportunity for this Court to reconsider, and re-express, its holding in Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd36. In Bass v Permanent Trustee Co Ltd37, I suggested that Bradken might be in need of reconsideration. In the Federal Court of Australia, the judges who decided these proceedings, both at trial38 and on appeal to the Full Court39, held that they were bound by the reasoning of this Court in Bradken to dismiss the claim brought by the appellant, the Australian Competition and Consumer Commission ("the Commission"), against the first respondent, Baxter Healthcare Pty Limited ("Baxter"). They held that this was necessary because Baxter was relevantly protected from liability for any alleged contraventions of ss 46 and 47 of the Trade Practices Act 1974 (Cth) ("the Act") by a "derivative immunity"40. That "derivative immunity", relevantly, arose (so it was held) because, to decide otherwise, would be to extend the application of the Act in a way that would undermine the legal immunity enjoyed under the general law (and referred to in the Act) by "the Crown in right of [the relevant] States … and of the Australian Capital Territory"41. Sections 46 and 47 of the Act, which Baxter was alleged to have contravened, relate to the misuse of market power by defined corporations having a substantial degree of power in the market. By s 2B of the Act, the Federal Parliament provided, relevantly, that Pt IV of the Act (in which ss 46 and 47 appear) bound "the Crown in right of each of the States, of the Northern Territory and of the Australian Capital Territory, so far as the Crown carries on a business, either directly or by an authority of the State or Territory". 36 (1979) 145 CLR 107. 37 (1999) 198 CLR 334 at 373 [95]. See Steinwall, "Revisiting State Crown immunity under the Trade Practices Act 1974: The High Court's decision in Bass v Permanent Trustee Company Limited", (1999) 27 Australian Business Law Review 38 Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd (2005) ATPR ¶42-066 (Allsop J). 39 Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd (2006) 153 FCR 574. 40 (2005) ATPR ¶42-066 at 43,066-43,067 [692]-[700]; (2006) 153 FCR 574 at 599 41 The language of the Act, s 2B(1). Kirby In approaching the issues now presented, I share misgivings expressed in Bradken by Murphy J42. His Honour "[found] the resolution of [that] case extremely difficult because of the way it was presented by the applicants". The Commission made concessions, and conducted its case against Baxter, on the footing that the relevant State and Territory governmental interests were to be treated as those of a manifestation of the Crown "in right of" the State or Territory concerned. For reasons ultimately derived from the constitutional character of the polities established by, or envisaged in, the Australian Constitution, this approach is erroneous. The error in the parties' approach illustrates an inclination of the legal mind, when a new legal text intervenes, to go on reasoning as if the text did not exist; to fail to adjust past legal notions to the language of the text; and to apply preceding common law principles without regard to the fundamental impact on them of the intervening provisions of the new written law which enjoys higher legal authority. For a number of years, this Court, with substantial unanimity, has been drawing attention to this serious weakness of approach as it has manifested itself in many cases, large and small43. The present is a case where the supervening text is the Constitution itself. The erroneous approach is just as clear (but has more serious consequences) where the text is the Constitution as where it comprises an intervening statutory provision or some humbler subordinate law or rule. For some time, in circumstances analogous to the present case, I44, and others45, have been calling this error to notice. So far, in this country, the admonitions have fallen on deaf ears. Yet they cannot be ignored, because they concern a characteristic of the Commonwealth. the constitutional arrangements of 42 (1979) 145 CLR 107 at 139-141. 43 The cases are collected in Central Bayside General Practice Association Ltd v Commissioner of State Revenue (2006) 80 ALJR 1509 at 1528 [84], fn 64; 229 ALR 1 at 22-23. See also General Motors Acceptance Corporation Australia v Southbank Traders Pty Ltd (2007) 227 CLR 305 at 317 [35]. 44 See eg Bass (1999) 198 CLR 334 at 374-375 [99]; British American Tobacco Australia Ltd v Western Australia (2003) 217 CLR 30 at 82-86 [138]-[153]. 45 Byrne v Ireland [1972] IR 241 at 272-275 per Walsh J (with the concurrence of Ó Dálaigh CJ at 261). See also at 302-303 per Budd J (with the concurrence of Ó Dálaigh CJ at 261 and O'Keeffe P at 261); The Commonwealth v Mewett (1997) 191 CLR 471 at 542-545 per Gummow and Kirby JJ. Kirby Understanding the approach of the parties How the issue arises: As appears from the reasons of Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ ("the joint reasons")46, the parties to this appeal did not rely on, or argue, an implied constitutional immunity or rule to confer protection from the operation of a federal law, such as the Act, on a State or Territory of the Commonwealth as such (or, by derivation, to render a corporation such as Baxter dealing by contract with such a polity equally immune)47. Had any party raised such an argument, either in this Court or in the Federal Court, it would have to have complied with procedural requirements for notice of a constitutional question to the nation's law officers48. The argument of the appeal, and of the proceedings below, would have taken a different course. Instead, the arguments of the parties were addressed, almost exclusively, to questions of "Crown immunity" that were said to arise from the language of the Act. This took the appeal into a consideration of the "established rule of construction that no statute binds the Crown unless the Crown is expressly named therein or unless there is a necessary implication that it was intended to be bound"49. The arguments for the derivative immunity claimed by Baxter appear also to rely on legal notions traced ultimately to the prerogatives of the Crown50. Absent very clear legislation to which the Crown itself has given its royal assent, those prerogatives traditionally limit the amenability of the Crown, in its various manifestations, to answerability at law to an action prosecuted before one of the Crown's own courts. These premises make it clear that the assumption of treating the States and Territories of the Commonwealth as "manifestations of the Crown" was crucial for the arguments of Baxter, and of the States supporting it. This was so whether 46 Joint reasons at [2]. 47 cf British American Tobacco (2003) 217 CLR 30 at 80-81 [134]-[137]. 48 Judiciary Act 1903 (Cth), s 78B. 49 Bradken (1979) 145 CLR 107 at 116 per Gibbs ACJ (emphasis added). 50 Joint reasons at [40]. The same use of the language of Crown immunity and reference to old and new English cases in relation to that concept are apparent in other legal writing. See eg Wright, "The future of derivative crown immunity – with a competition law perspective", (2007) 14 Competition & Consumer Law Journal 240. The article traces the principles back to the seventeenth century at least, eg Magdalen College Case (1615) 11 Co Rep 66b at 72a [77 ER 1235 at 1243]; Attorney-General v Allgood (1743) Parker 1 at 3-5 [145 ER 696 at 696-697] and Sydney Harbour Trust Commissioners v Ryan (1911) 13 CLR 358 at 365-366. Kirby those arguments were founded on the foregoing rule of statutory construction at common law, or on expanded notions of the Crown's modern prerogatives. At the heart of the arguments, as finally expressed, was the assumption that a State or Territory of the Commonwealth is, as such, a manifestation of the Crown and, for that reason, entitled to a relevant immunity from the operation of insufficiently specific provisions of a federal law, such as the Act. This is why, throughout the joint reasons, there are repeated references to the affected States and the Australian Capital Territory as manifestations of the Crown "in right" of the polity concerned. In Australia, however blind we were to this perception in earlier times, the assumption inherent in the foregoing submission can now be seen as inconsistent with the text, purpose and character of the Australian Constitution and of its constituent polities. If that conclusion is correct, it knocks away (or at least undermines) the importation into the present discourse of notions of Crown immunity or Crown prerogatives as such. To attract any immunity or prerogative, so as to afford a foundation for the type of immunity claimed by Baxter, a different (perhaps analogous) legal theory of immunity would need to be propounded. Necessarily, any such new immunity would have to be expressed in different, non-Crown terms. It would have to be explained in language compatible with the text, structure and character of the Australian Constitution51. No party to the proceedings before this Court (or in the Federal Court) ventured upon such an endeavour. Excusing the parties: I do not criticise the parties too much for failing to approach the problem now presented in the way that I consider to be constitutionally mandated: This Court, in Bradken, and later in Bropho v Western Australia52, expressed the governing rule in terms of the immunities of the Crown53. This Court has persisted with the assumption in cases of this kind that the political units of the Commonwealth of Australia are, for present purposes, to be characterised as manifestations of different aspects of the Crown54; 51 cf Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 562-567; Roberts v Bass (2002) 212 CLR 1 at 54-58 [143]-[158]. 52 (1990) 171 CLR 1. 53 See especially at (1990) 171 CLR 1 at 23-25. 54 See eg joint reasons at [39]-[42] where Bropho is cited. Kirby None of the polities concerned (including the States that, along with Baxter, are the respondents to this appeal), even as an alternative or fall- back to a preferred persistence with notions of Crown immunity, endeavoured to re-express a type of governmental immunity of a different character, more apt to the text, purpose and character of the Australian Constitution. Because, primarily, it is the States (and now the self- governing Territories) of the Commonwealth that have an interest to uphold a governmental immunity of some kind, the omission on their part to propound a new and different immunity, founded on new, different and indigenous legal sources, leaves the polities concerned with all their legal eggs in the basket of Crown immunity. If, for reasons of Australian constitutional law, that source of the immunity is inapplicable, neither the polities concerned, nor Baxter seeking derivative immunity based on Crown immunity, offered any other argument; So far as Bradken was concerned, even Murphy J (who dissented55) accepted, and applied, the language of Crown immunity used by the majority in that appeal. He considered whether the Commissioner for Railways of Queensland was a manifestation "of the Crown in right of a State"56. For Murphy J, the question of significance was whether the Crown's immunity under the Act extended to the Crown in right of a State or was confined to "the Crown in right of the Commonwealth"57. He did not pause to consider the antecedent question concerning the fundamental equivalence (or description) of the Commonwealth and State concerned with the Crown, so as to attract for that reason all of the traditional immunities of the Crown against being bound by insufficiently specific legislation to which the Crown had given its royal assent; Although in Bradken Stephen J remarked that the doctrine of Crown immunity evinced "artificiality"58 and it seemed inappropriate to modern circumstances where the Crown had often been replaced by independent and even republican polities so that "it may be that the doctrine is no longer capable of providing any reasoned basis upon which to determine the precise operation, in a federal setting, of the common law rule"59, he too ultimately fell back on the traditional indicated that 55 (1979) 145 CLR 107 at 141. 56 (1979) 145 CLR 107 at 139. 57 (1979) 145 CLR 107 at 140. 58 (1979) 145 CLR 107 at 128. 59 (1979) 145 CLR 107 at 128-129. Kirby explanation. Thus, his Honour concluded that "since the Act is devoid either of express reference binding the Crown in right of the States or of necessary implication to that effect, it should, I think, be interpreted as not binding the Commissioner for Railways of the State of Queensland"60; Repeated expressions of concern by me about this matter have not, so far, produced any new approach nor even an attempt at one61. In the manner that elsewhere has become so familiar, the Australian legal culture prefers to stick with a common law rule and to ignore any discordancy of that rule with the supervening adoption of a disharmonious written law, in this case nothing less than the Australian Constitution; and Finally, the Act itself appears to assume, for some relevant purposes, that the States and Territories of the Commonwealth are manifestations of the Crown. Thus, s 2A of the Act contains several provisions that assume that the Commonwealth, States and Territories are respectively, in their several identities, manifestations of the Crown "in right of" such polities. This phraseology appears in no fewer than eight of the provisions of ss 2A, 2B and 2C of the Act. Thus, even if the better view of the law of Australia were that the Commonwealth, States and Territories are not manifestations of the Crown in those several "rights", but distinct constitutional entities so described, the express statutory assumption manifested, relevantly, in s 2B(1) of the Act might arguably justify treating as harmless any misdescription of a State or Territory as the Crown. It might justify reading the provision in the Act concerning "the Crown in right of" a given State as nothing more than a reference to the constitutional State itself. Is this the way the present appeal should be approached? In particular, is it the way that the appeal should be approached given the unwillingness of the parties to proffer, even as an alternative or fall-back, some other and different proposition to sustain a relevant Australian governmental immunity otherwise than on the footing of Crown immunities or Crown prerogatives? The Crown and the Australian polities The constitutional text: As I attempted to make clear during argument of the appeal62, there is a fundamental difficulty involved in an analysis of the issues 60 (1979) 145 CLR 107 at 129. 61 See eg Bass (1999) 198 CLR 334 at 373 [95]; British American Tobacco (2003) 217 CLR 30 at 82-85 [138]-[147]. 62 [2007] HCATrans 202 at 11, 31-85, 285, 765, 1145, 1290 and 1325. Kirby in this appeal in treating the Australian Commonwealth, States and Territories as manifestations of the Crown for the purpose of attracting to them, unrevised and unadjusted to local circumstances, all of the immunities, privileges and prerogatives of the Crown, as traditionally enjoyed in ancient times and as expressed in previous common law doctrine. Such an approach is, in my view, incompatible with the text, structure and character of the Australian Constitution. The Australian constitutional text makes it clear that certain new constitutional entities are thereby created. They are "the Commonwealth" which is thereby "established"63; the "States" (being the former named "colonies" of the Crown such as are admitted into or established by the Commonwealth as States64) and the Territories of the Commonwealth65. It is plain from the constitutional text, purpose and history that the new polities are not merely a continuation of pre-existing colonies under a different appellation. This would be an impossible notion in the case of the Commonwealth and the Territories of the Commonwealth, which had no earlier existence, as such. But it is equally impossible in the case of the States for, after federation, they existed as new governmental entities deriving their legal character and status from the Constitution itself, not from the pre-federation colonies which were thereby terminated. Under the Constitution, the polities created were related to each other as integral parts of a new Commonwealth, a distinct and "indissoluble" federal entity66. Moreover, they constituted a new nation in the community of nations. This new nation was brought into existence by the will of the people in the several colonies named and those of any other identified Australasian colonies that might thereafter be admitted into the Commonwealth67. Although in colonial times in Australia, it was understandable that the colonial governments should have been legal purposes as "manifestations of the Crown", with governmental "powers and functions … treated for 63 Commonwealth of Australia Constitution Act 1900 (Imp) (63 & 64 Vict c 12), s 4. See also s 3. 64 Commonwealth of Australia Constitution Act 1900 (Imp), s 6. See also Constitution, Chs V and VI. 65 Constitution, ss 122, 125. 66 Commonwealth of Australia Constitution Act 1900 (Imp), Preamble, par 1. 67 As happened in the case of Western Australia before proclamation of the Constitution. Kirby vested in the Governor of a Colony" representing the Crown, or in "the Governor of a Colony with the advice of his Executive Council, or in any authority of a Colony"68, once the Commonwealth was established the new political entities then created were not properly so described or characterised. They derived their existence from the Constitution itself. They were thus constitutional entities and not a manifestation of anything else. In effect, the Commonwealth, the States and the Territories therefore stand apart from the pre-existing governments in Australia, although they relate to each other. They are not, as such, manifestations of the Crown. It is a misdescription to so designate them or to equate them as such. In the early years of Australian federation, as the notion of the indivisibility of the Crown throughout the British Empire persisted for some time, it was understandable that the Commonwealth, States and Territories should continue to be described as manifestations of the Crown. However, in terms of the constitutional text and basic legal principle, this description was erroneous. Persisting with it into the twenty-first century is unacceptable. It is past time that it should be replaced with a new governmental characterisation of the Australian governmental polities – one appropriate to the Constitution and the independent nation and component polities that the Constitution brought into existence. Specific textual references: The fact that the Commonwealth and the Territories, at least, are plainly not subsumed in the Crown may be demonstrated by the distinction drawn in the Constitution between those polities, as such, and the various specific ways in which the Crown and the Queen are involved in Australia's post-federation constitutional arrangements. Thus, the Queen is part of the Federal Parliament created by the Constitution as the Parliament of the Commonwealth69. The executive power of the Commonwealth is vested in the Queen70. Yet neither the Parliament nor the Executive of the Commonwealth is the Commonwealth itself. The constitutional polity is distinct and separate from the constituent parts that the Queen and the Crown play in its affairs. 68 Constitution, s 70. 69 Constitution, s 1. 70 Constitution, s 61. Kirby This is even more clear in the case of the Judicature created by Ch III71. In The Commonwealth v Mewett72, Gummow J and I endorsed the observation of Murphy J in Johnstone v The Commonwealth73: "In Australia, the federal courts are not the Sovereign's courts in the sense used in the United Kingdom. Under the Commonwealth Constitution, the legislative power of the Commonwealth is expressed to be vested in the Queen, the Senate and the House of Representatives (s 1); and the executive power is vested in the Queen (s 61). However, the judicial power is not vested in the Queen, but in 'a Federal Supreme Court, to be called the High Court of Australia, and in such other federal courts as the Parliament creates, and in such other courts as it invests with federal jurisdiction' (s 71)." In these circumstances, as Gummow J and I went on to explain in Mewett74, the acceptance in Australia of the principle in Marbury v Madison75 as "axiomatic"76: "placed a fundamental limitation upon any general acceptance in the exercise of federal jurisdiction of the maxim that the Sovereign could do no wrong. To the contrary, it was for the judicial branch of government to determine controversies as to whether the legislative or executive branches had exceeded their constitutional mandates. The authority given by s 75(iii) in respect of matters in which the Commonwealth is a party was supplemented by s 75(v) which provides for writs of mandamus and prohibition, and for injunctions, against officers of the Commonwealth." Thus, the specificities and juxtapositions in the Australian Constitution concerning the part played in its governmental institutions by the Queen and the Crown, and particularly the provisions made (necessary to a federation) for the integrated Judicature, rendered it inapposite to import into our constitutional institutions, without significant adjustment, notions of governmental immunities and prerogatives that earlier existed in the United Kingdom. It is a basic legal 71 Constitution, ss 71, 73, 74, 75, 78, 79. 72 (1997) 191 CLR 471 at 546. 73 (1979) 143 CLR 398 at 406. 74 (1997) 191 CLR 471 at 547. 76 Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 262. Kirby mistake to consider that common law Crown immunities and prerogatives can be picked up holus-bolus and transferred to our antipodean constitutional setting without serious reconsideration, and adjustment, appropriate to the Australian constitutional text. The democratic element: A particular consideration reinforces this conclusion. It is one to which reference has been made, and the point reserved, in more recent decisions of this Court77. It provides a reason of basic constitutional principle for abandoning descriptions of the Commonwealth, the States and the Territories of Australia as manifestations of the Crown or of the Crown in a particular "right". The point was made earlier in the Supreme Court of Ireland in Byrne v Ireland78 by Walsh J and his colleagues. Writing in Byrne of the Constitution of the Irish Free State 1922, in respect of a time before the republican constitution and when Ireland was still a constitutional monarchy under the Crown, Walsh J indicated the error of treating the new Irish polity as a manifestation of the Crown, entitled for that reason to all of the immunities and prerogative limitations that the Crown in the United Kingdom had previously enjoyed in Ireland under the common law and by reason of its royal prerogatives. By reference to history, Walsh J explained that such immunities and prerogatives had traditionally derived from "the fact that the basis of the Crown prerogatives in English law was that the King was the personification of the state"79. With the establishment of a new and distinct State in Ireland, under a written constitution securing its authority ultimately from the people of Ireland whose will gave it birth, it was a basic error of legal principle to treat as applicable to the new State all of the pre-existing Crown immunities and prerogatives. Views similar to those of Walsh J were expressed in Byrne by Budd J80. The trial judge A contrary opinion was expressed by FitzGerald J81. 77 Mewett (1997) 191 CLR 471 at 542-545; Bass (1999) 198 CLR 334 at 374-375 [99]; British American Tobacco (2003) 217 CLR 30 at 84-85 [145]-[147]; New South Wales v Ibbett (2006) 81 ALJR 427 at 430 [6] and fn 6; 231 ALR 485 at 488. 78 [1972] IR 241 at 272-273. 79 [1972] IR 241 at 272. 80 [1972] IR 241 at 302-303. 81 [1972] IR 241 at 310-311. Kirby (Murnaghan J82) had found the arguments for a new legal perception of the character of the new constitutional State "unconvincing"83 and difficult to take seriously. However, the perception of Walsh J and his colleagues in the majority has long since prevailed in Ireland84. In my opinion it is manifestly correct. The same conclusion is applicable to the Australian Constitution, and essentially for the same reasons. Our Constitution, like that of Ireland after 1922, was a new, written instrument of government, approved at referendums by a vote of the Australian people then entitled to vote. Its ultimate foundation lies in its grant, and continued acceptance, by the Australian people. They alone may approve formal changes to the text85. The point of this discourse is not a merely formal one. It is a basic mistake of constitutional doctrine in Australia to treat the Commonwealth, the States and the Territories as manifestations of the Crown. It follows that it is an equal mistake to derive uncritically the applicable law of the governmental immunities of those polities from notions of the English common law or the royal prerogatives. This is because the new polities take their character from their creation and acceptance by the Australian people. Without argument, analysis and modification, it should not be assumed that this change in the source, origin, and character of the Australian constituent polities did not affect the ambit and content of such immunities. It was thus an error to import into the new constitutional arrangements for Australia, without modification, all of the law on Crown immunities and Crown prerogatives apt to a different country, in different times, reflecting different constitutional purposes and values. A relevant stream of authority: In addition to the cases in this Court where the possible need to reconsider governmental immunity in Australia apart from notions of Crown immunity has been raised, there is a stream of authority 82 Reproduced at [1972] IR 241 at 245-257. 83 [1972] IR 241 at 254. 84 See eg Webb v Ireland [1988] IR 353 at 382 per Finlay CJ (Henchy and Griffin JJ concurring), 387 per Walsh J, 397-398 per McCarthy J. See also In re Irish Employers Mutual Insurance Association Ltd [1955] IR 176, which foreshadowed the decision in Byrne, and see generally Forde, Constitutional Law, 2nd ed (2004) 85 Constitution, s 128. See Kirmani v Captain Cook Cruises Pty Ltd [No 1] (1985) 159 CLR 351 at 441-442; Breavington v Godleman (1988) 169 CLR 41 at 123; Leeth v The Commonwealth (1992) 174 CLR 455 at 485-486; Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 138; McGinty v Western Australia (1996) 186 CLR 140 at 230. Kirby that lends support to that notion. In Bank of NSW v The Commonwealth ("the Banking Case")86, Dixon J specifically addressed the character of the Australian polities, viewed from the Australian constitutional perspective. He said87: "The Constitution sweeps aside the difficulties which might be thought to arise in a federation from the traditional distinction between, on the one hand the position of the Sovereign as the representative of the State in a monarchy, and the other hand the State as a legal person in other forms of government … and goes directly to the conceptions of ordinary life. From beginning to end [the Constitution] treats the Commonwealth and the States as organizations or institutions of government possessing distinct individualities. Formally they may not be juristic persons, but they are conceived as politically organized bodies having mutual legal relations and amenable to the jurisdiction of courts upon which the responsibility of enforcing the Constitution rests." Dixon J's comments in that case were noted with approval in this Court in Crouch v Commissioner for Railways (Q)88, both by Gibbs CJ89 and in the joint reasons of Mason, Wilson, Brennan, Deane and Dawson JJ90. The latter reasons, in particular, endorsed Dixon J's idea that reconsideration of the identity of governmental polities with the Sovereign (the Crown or the Queen) was made essential by a federal system of constitutional government. Later still, in Deputy Commissioner of Taxation v State Bank (NSW)91, the entire Court92 drew attention, in the context of s 114 of the Constitution, to the explicit immunity from federal taxation there provided to property of any kind belonging to a State, so described. The Court said that, although Dixon J's comments in the Banking Case had been made in the context of elucidating s 75(iii) and (iv) of the Constitution, they applied with equal force to s 114. This conclusion was then deployed to reject the argument of the State Bank that it was "the Crown 'in right of' the State" and so entitled to the constitutional immunity 86 (1948) 76 CLR 1. 87 (1948) 76 CLR 1 at 363. 88 (1985) 159 CLR 22. 89 (1985) 159 CLR 22 at 28-29. 90 (1985) 159 CLR 22 at 39. 91 (1992) 174 CLR 219 at 229. 92 Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ. Kirby as such. That notion was held to be incompatible with "the constitutional conception of 'a State'"93. So far as the State Bank's alternative submission that it was entitled to "the privileges and immunities of the Crown"94 was concerned, this proposition too was rejected95, by reference to "the meaning and operation of an unalterable constitutional provision which the intention of the legislature cannot affect"96. Given the centrality of that constitutional notion, recognised in the foregoing cases, it seems scarcely persuasive, or legally coherent, to apply it to cases arising under provisions of the Constitution that explicitly describe the Australian governmental polities but to ignore it in other cases of legislation made under (and subject to) the constitutional grant of legislative powers. This area of the law in Australia has been characterised as complex97. Doubtless this is so because it is dealing with bedrock notions of the "politically organized bodies" created in, or envisaged by, the Australian Constitution. It is further complicated by the historical evolution of the Commonwealth and its constituent parts and indeed of the Crown itself, originally in the British Empire and later in the Commonwealth of Nations and the world more generally. Because of the terms in which Ch III of the Constitution is expressed, the States and the Commonwealth, and also the Territories, are commonly parties to proceedings in this and other courts, by their own constitutional names. So indeed they are in these proceedings. They were not named, and did not appear as, the Crown or the Queen. It would have been erroneous for them to do so. The States and Territories might not be "juristic persons" or corporations in the normal sense of they are constitutionally created But governmental organisations or institutions "possessing distinct individualities". And those "individualities" are derived from the Constitution, not from historically pre-existing notions of the Crown or its manifestations. those notions. 93 (1992) 174 CLR 219 at 229-230. 94 In accordance with Townsville Hospitals Board v Townsville City Council (1982) 149 CLR 282 at 288 per Gibbs CJ. 95 (1992) 174 CLR 219 at 230. 96 Banking Case (1948) 76 CLR 1 at 359 per Dixon J. 97 White v South Australia (2007) 96 SASR 581 at 589 [26] per Doyle CJ. See also Note, "Role of Crown as a nominal defendant in proceedings", (2007) 18 Public Law Review 140 at 142. Kirby Questioning the assumptions: Yet what of the suggestion that, because the Parliament, in the Act, has specifically used the expression "the Crown in right of each of the States … and of the Australian Capital Territory", this Court should treat that formulation as a parliamentary endorsement or ratification of the traditional language (or, at least, as an indication that such language is no more than a harmless formula to be taken as equivalent to a reference to the State or Territory concerned)? Should the reference to a State or Territory as a manifestation of the Crown be treated as a kind of legislative fiction or historical surplusage? There are difficulties in this approach. Any such fiction would not necessarily justify importing to the State or Territory concerned, without adjustment, all of the earlier notions of Crown immunity and royal prerogatives. The English prerogative principle, so far as it limits the answerability of the Crown and its manifestations before the Crown's own courts, without clear and express provisions, could have no direct application the Australian constitutional context. That is so for the reasons explained by Gummow J and myself in Mewett98. Moreover, if ultimately (as seems to be the case) the reason why the Commonwealth, the States and the Territories cannot be conceived of as manifestations of the Crown derives from the Constitution itself, no fiction, however it is expressed by the Parliament, could override the requirements deriving from the constitutional text. On this footing, the references in ss 2A, 2B and 2C of the Act to the various polities of the Commonwealth as manifestations of the Crown in various "rights" would be disclosed for what they are: an unthinking endorsement of old judicial reasoning that has been erroneously applied to the new context created in Australia by the Constitution. To this extent, I agree with one observation made by Callinan J in this appeal. Although the parties did not argue any question of constitutional invalidity or raise any constitutional questions99, the Court may not "disregard the constitutional setting and the respective constitutional roles of the appellant and the States, in giving sense and effect to the Act"100. Whilst I ultimately draw a conclusion different from that derived by Callinan J, I agree with his Honour's approach in this respect. Neither the way that parties frame their arguments nor any procedural rule, enacted or adopted, 98 See above these reasons at [101]. 99 Reasons of Callinan J at [154]. 100 Reasons of Callinan J at [154]. Kirby can authorise this Court, when it is essential to the resolution of the matter before it, to ignore a requirement derived from the Constitution from which the Court itself secures its authority. At least, it cannot do so where the point has been adequately raised by a party or signalled by the Court during argument. In many questions addressed to the present parties I made plain my challenge to their congenial assumption that the present appeal could be decided on the footing that the States in question were manifestations of the Crown, entitled as such to the traditional immunities (and prerogatives) of the Crown. I contested their assumption that the constitutional equivalence of the States and the Crown yielded a principle dictated by that assumption for the supposed derivative immunity of Baxter, stated in terms of the traditional rules governing the subjection of the Crown to general or insufficiently specific legislation affecting itself or its instrumentalities101. Alternative approaches: It follows that, in default of any valid and explicit legislation concerning governmental immunities in Australia, the proper approach to the present appeal involves the derivation of a new and different rule for governmental immunity in this country. As one aspect of such a rule, it might also be necessary to evolve a subordinate principle, protective of any governmental immunity, extending the immunity in particular cases to private individuals and corporations with which government has contractual or other dealings. Such a subordinate rule might be required because, otherwise, by imposing burdens on such individuals or corporations, a legislature could undermine, or destroy, the governmental immunity so established. In deriving such principles for contemporary Australia, the starting point would necessarily be the terms and assumptions of the Constitution itself. Doubtless past learning on governmental immunity, expressed in the language of "Crown immunity", would be relevant. But it would not exclude examination of the development of governmental immunity in other common law jurisdictions which have severed, or modified, their relationship with the Crown and established their constitutional order upon the basis of the will of the people, as Australia has. In the United Kingdom, the doctrine of Crown immunity was formerly applied to the enacted competition law based on the decision in In re Telephone Apparatus Manufacturers' Application102. However, this position was altered by the Competition Act 1998 (UK). By s 73 of that Act, the provisions of the Act 101 The point was repeatedly raised during argument. See above these reasons at [91], 102 [1963] 1 WLR 463 at 482-483 per Upjohn LJ; [1963] 2 All ER 302 at 313 (CA). Kirby bind the Crown, save that it is not criminally liable or liable for a penalty, nor is the Queen liable in her private capacity. Thus, in the land of its origins, the analogous immunity is now governed by statute rather than by the common law of Crown immunities or by the royal prerogative. The application of Crown immunity to the Combines Investigation Act 1970 (Can) was upheld in R v Eldorado Nuclear Ltd103. However, this approach was criticised strenuously by two of the judges, in language relevant to the understanding of modern Australian governmental immunity. Thus, Dickson J observed104: "Why that presumption [of Crown immunity] should be made is not clear. It seems to conflict with basic notions of equality before the law. The more active government becomes in activities that had once been considered the preserve of private persons, the less easy it is to understand why the Crown need be, or ought to be, in a position different from the subject." Wilson J, who dissented in part from the majority, added105: "We might ask in this case whether Parliament ever contemplated that the respondents would go about the implementation of their statutory purposes by means of an illegal conspiracy with others, counting on the protection of their Crown immunity and leaving their co-conspirators to the full rigours of the law." In the United States of America, a rule of statutory construction is observed whereby "statutes which in general terms divest pre-existing rights or privileges will not be applied to the sovereign without express words to that effect"106. A judicially declared "state action" doctrine immunises conduct by private parties dealing with States only if it passes a two-part test laid down in California Retail Liquor Dealers Assn v Midcal Aluminum Inc107: 103 [1983] 2 SCR 551. 104 [1983] 2 SCR 551 at 558. 105 [1983] 2 SCR 551 at 592. 106 United States v United Mine Workers of America 330 US 258 at 272 (1947). 107 445 US 97 at 105 (1980). Kirby The challenged restraint must be "one clearly articulated and affirmatively expressed as state policy"; and "the policy must be 'actively supervised' by the State itself". The equivalent to the principle of derivative governmental immunity has been explained in the United States by express reference to constitutional concepts. Thus, in Columbia v Omni Outdoor Advertising Inc108, Scalia J observed: "[I]n light of our national commitment to federalism, the general language of the Sherman Act should not be interpreted to prohibit anticompetitive actions by the States in their governmental capacities as sovereign regulators … [but] this immunity does not necessarily obtain where the State acts not in a regulatory capacity but as a commercial participant in a given market." Examinations of such questions have frequently arisen, as a matter of legal principle, in United States courts. Unsurprisingly, the expression of the immunities found by the courts has not simply picked up and applied legal notions borrowed from ideas of the traditional Crown immunities and royal prerogatives in England. An early instance was the opinion of Story J in United States v Hoar109, later cited in this Court in Roberts v Ahern110. That explanation of American governmental immunity was quoted by Gibbs ACJ in Bradken as a the possible rationale for a measure of governmental requirements of general legislation, which did not depend, as such, on the Crown's traditional immunities or upon prerogatives of the Crown111. Thus, immunity from "Where the government is not expressly or by necessary implication included, it ought to be clear from the nature of the mischiefs to be redressed, or the language used, that the government itself was in contemplation of the legislature, before a court of law would be authorized to put such an interpretation upon any statute. In general, acts of the legislature are meant to regulate and direct the acts and rights of citizens; 108 499 US 365 at 374-375 (1991). 109 26 F Cas 329 (1821) (Case No 15,373). 110 (1904) 1 CLR 406 at 418. 111 (1979) 145 CLR 107 at 122. 112 26 F Cas 329 at 330 (1821). Kirby and in most cases the reasoning applicable to them applies with very different, and often contrary force to the government itself. It appears to me, therefore, to be a safe rule founded in the principles of the common law, that the general words of a statute ought not to include the government, or affect its rights, unless that construction be clear and indisputable upon the text of the act." Whether such a rule, expressed and applied in this way, at a time long before the growth of the modern regulatory state113, remains apposite as a rule of legislation affecting for contemporary Australian statutory construction government and its agencies is a very large question which was not debated in this appeal. In the approach which the parties took, this was a simple case, although the outcome was contested. I have said enough, I hope, to indicate why I do not share this common assumption as to the applicability in Australia of the rule of statutory construction stated in the uncritical and unadapted terms of Crown immunity, which the courts below, and now the majority in this Court, have embraced. In NT Power Generation Pty Ltd v Power and Water Authority114, the majority reasons in this Court expressed a preference for substituting "the Executive Government of the State" or more simply "the Government" for the previous language of "Crown" immunity. Such a change in nomenclature is less important than a basic reconsideration of the content of the immunity. However, the joint reasons in this appeal revert to the old language of "Crown immunity", with all of the consequences that that notion, with its long legal history, necessarily imports. They apply to the Australian polities, undiscerningly, the legal notions derived from the privileges and prerogatives of the Crown. This is a step that, respectfully, I would not willingly take. Resolving the appeal Imposition of artificiality: I have now explained why I cannot concur in the joint reasons. I do not agree to equating the States and Territories of Australia and the Commonwealth itself, as such, with manifestations of the Crown. It follows that I do not agree with the assumption of the parties to this appeal that the Constitution is irrelevant to the resolution of the matter that the parties bring to this Court. I question (as Murphy J did in the facts of Bradken115) 113 White v Director of Military Prosecutions (2007) 235 ALR 455 at 468-469 [48], 114 (2004) 219 CLR 90 at 149-150 [163] per McHugh ACJ, Gummow, Callinan and 115 (1979) 145 CLR 107 at 139. Kirby concessions made in the course of the proceedings. Most especially, I question the concession of the Commission that the States involved, and the State Purchasing Authorities (SPAs), acquired the products in question in this appeal otherwise than in the course of carrying on a business116. As Murphy J said of a concession made in Bradken117: "I have the gravest doubts that this concession is correct." Nevertheless, it was made. The litigation was conducted on that footing. There is no alternative in this Court but to accept the concession. To do otherwise would risk inflicting a serious procedural injustice on the parties. This conclusion requires me to "consider this case artificially", as Murphy J was also required to do in Bradken118. I may protest at that necessity. However, there is no way that I can avoid it. One day the error of the current approach of this Court to these questions will be understood. The starting point for the enlightenment will be a reading of the reasons of Walsh J in Byrne v Ireland119. Construction and constitutionalism: I accept, as the joint reasons suggest120, that it is difficult for this Court to address a new foundation for governmental immunities in the Australian constitutional context where the parties fail to do so and persist with past reasoning. However, unless this important topic is forever to pass under the radar, it is ultimately necessary for this Court to raise the subject itself. Otherwise, we become complicit in erroneous or imperfect reasoning. We give no corrective stimulus to questioning the assumptions of the parties and of the courts below. In this appeal, the issue was fully addressed in questions asked of the parties. Many of the constituent governments were before the Court. The defect in past reasoning offends the Constitution itself. It is beyond time that the defect should be recognised and addressed by this Court. No rule of statutory construction can exist in Australia which is disharmonious with the provisions of the Constitution. 116 Joint reasons at [17]. 117 (1979) 145 CLR 107 at 139; cf [2007] HCATrans 202 at 1760. 118 (1979) 145 CLR 107 at 141. 119 [1972] IR 241 at 272-273. Kirby Pending Upholding the Act's purposes: the enlightenment, and approaching this appeal within the constraints, assumptions and concessions accepted by the parties, I am brought ultimately to the same conclusions as are stated in the joint reasons. Those conclusions accord more closely with my own approach, in many cases, to questions (uncomplicated by issues of governmental immunity) concerning the ambit and application of the Act, so as to fulfil the large national objects declared in s 2121. The conclusions also conform more closely with the course of statutory amendments designed to strengthen the operation of the Act. Specifically, they are more consonant with my view of how any properly expressed rule of governmental immunity in Australia would operate in respect of those corporations which, in the course of their business, engage in dealings with an Australian State or Territory government122. In this appeal (unlike others in which I have disagreed with earlier majorities) there is in the joint reasons what I regard as appropriate attention to the large national, economic and protective purposes of the Act. As this purposive approach to the application of the Act has been a repeated theme of my minority reasons in earlier cases on the Act123, I will encourage the new dawn. Now that it has at last emerged, I endorse it and hope that it will survive to future cases involving the Act. By reference to the object of the Act, as inserted in 1995 to reflect inter- governmental agreements in Australia concerning competition policy and its importance for the whole nation124, I accept the observations of Mr Wright125: 121 Joint reasons at [64]. 122 Joint reasons at [60]. 123 See SST Consulting Services Pty Ltd v Rieson (2006) 225 CLR 516 at 534-536 [57]-[64] citing Melway Publishing Pty Ltd v Robert Hicks Pty Ltd (2001) 205 CLR 1 at 35-36 [90]; Boral Besser Masonry Ltd v Australian Competition and Consumer Commission (2003) 215 CLR 374 at 481-482 [323]; News Ltd v South Sydney District Rugby League Football Club Ltd (2003) 215 CLR 563 at 602-603 [120] and Visy Paper Pty Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 1 at 19-20 [56]. 124 See eg Competition Policy Reform Act 1995 (Cth); Australia, House of Representatives, Parliamentary Debates (Hansard), 30 June 1995 at 2798. 125 Wright, "The future of derivative crown immunity – with a competition law perspective", (2007) 14 Competition & Consumer Law Journal 240 at 278. I would re-express and redefine the supposed "Crown" immunity as "governmental immunity". Kirby "The parliaments of the Commonwealth, states and territories have determined that promoting competition is in the interests of all Australians because it enhances their welfare. It is difficult, therefore, to conclude that the legislatures intended that non-government parties should be able to reach anti-competitive arrangements with the Crown (when not carrying on a business) or engage in anti-competitive conduct involving the Crown (when not carrying on a business) with impunity or that arrangements of this type should be enforceable. Such an approach could potentially frustrate the achievement of the object of the Act in all markets in which the government (when not carrying on a business) is a significant participant." Ultimate constitutional limits: Whilst I understand the dissenting opinion of Callinan J in this appeal, I cannot embrace it. Certainly, there would, in my view, be a point beyond which federal legislation, including the Act, could not apply to activities of the States. This would follow from the text, purpose and character of the Constitution. However, to identify that point it would be necessary for a State to mount an explicit constitutional challenge to the ambit of the federal law, based on an alleged interference with its essential governmental functions126. In this appeal, the States before the Court disclaimed any such argument127. As well, such an argument would face difficulties in a case such as the present given the incontestable constitutional power of the Federal Parliament to make laws governing the trading conduct of Baxter, a constitutional corporation128. Moreover, difficulties for a constitutional challenge by the States would appear to arise in any attempt to stretch the constitutional immunities of the States themselves to apply derivatively to a private corporation such as Baxter. As these questions were not in issue, or argued, in this appeal, I will say no more about them. 126 Melbourne Corporation v The Commonwealth (1947) 74 CLR 31 at 50, 60-62, 78- 79; Queensland Electricity Commission v The Commonwealth (1985) 159 CLR 192 at 260; Austin v The Commonwealth (2003) 215 CLR 185 at 213 [19], 245 [111]. 127 See [2007] HCATrans 202 at 2835, 3230, 3243. 128 Constitution, s 51(xx), particularly following the interpretation given to that paragraph in New South Wales v The Commonwealth ("the Workchoices Case") (2006) 81 ALJR 34; 231 ALR 1. Kirby Conclusion and orders The Federal Court erred in concluding that Bradken governed this case. Reluctantly confining myself to the unreformed doctrine129, Bradken must now be viewed as qualified by later decisions of this Court. For a more satisfactory exposition of the applicable law of governmental (and derived governmental) immunity in Australia, fresh attention needs to be given to the text, purpose and character of the Constitution and of the governmental polities it creates, by the will of the Australian people. It is on these grounds that I agree in the orders proposed in the joint reasons. 129 cf Favell v Queensland Newspapers Pty Ltd (2005) 79 ALJR 1716 at 1723 [26]; 221 ALR 186 at 194-195. See also joint reasons at [1]-[2]. Callinan CALLINAN J. It is unnecessary to restate the facts. I am however of a different opinion from the majority. It is not to be supposed that the promotion of competition, either within a State or the whole Commonwealth, is a higher end than the provision by a State of medical services and medications for the people of that State. A supposition either way cannot be decisive of this appeal, but the facts, that in seeing to the health of its residents, a State is undertaking one of its essential constitutional functions, and one incidentally which historically is regarded as charitable130, that the Commonwealth's role in regard to health is entirely voluntary, and that the State is a democratic constitutional polity, at least suggest that a State should in no way be impeded in acquiring medical supplies and services for its residents. To the extent that its right to do so on its own terms might be affected by federal legislation, the legislation, assuming its constitutional validity, which was not in issue here, should, in case of any doubt, be construed as intending no, or the least intrusion reasonably open on its language. Health services are State services Nowhere in the Constitution is it suggested that the provision of hospitals and related health services is other than the responsibility of and an essential role of the States. This has always been the position. From the earliest colonial times, administrations interested themselves in health and established public hospitals131. I have used the language of "essentiality" as that was the language used by Stephen J in Murphyores Incorporated Pty Ltd v The Commonwealth132. The role of the Commonwealth Section 51 of the Constitution nowhere suggests that the Commonwealth has any particular role in the provision of hospitals or medical or health services. That the Commonwealth has chosen to do so, indeed has in recent times done so extensively133, does not diminish the importance and essentiality of the States' role and primary function in this field. 130 See Central Bayside General Practice Association Ltd v Commissioner of State Revenue (2006) 80 ALJR 1509; 229 ALR 1. 131 For example, the Colonial Hospital at Parramatta, which was commissioned by Governor Macquarie and completed in 1818. 132 (1976) 136 CLR 1 at 9. 133 For example, the scheme considered in Central Bayside General Practice Association Ltd v Commissioner of State Revenue (2006) 80 ALJR 1509; 229 ALR 1. Callinan The appellant's arguments One of the principal submissions of the appellant in this Court is that this Court's preference in NT Power Generation Pty Ltd v Power and Water Authority134 for the dissenting judgment of Kitto J in Wynyard Investments Pty Ltd v Commissioner for Railways (NSW)135 to that of the majority (Williams, Webb and Taylor JJ) was determinative of this case in its favour, and that Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd136, to the extent that it stated, or should currently be regarded as stating the relevant law, did not exclude pre-contractual offers and negotiations from the operation of Pt IV of the Trade Practices Act 1974 (Cth) ("the Act"), whatever the position might, or might not be in relation to concluded contracts giving rise to rights and obligations. As a matter of ordinary statutory construction, the former was contravening conduct proscribed by, and not immunized from operation or application by any other provisions of the Act. On any view, the respondent supplier was subject to it. Emphasis was placed by the appellant on a passage from the dissenting judgment of Kitto J in Wynyard137: "The cases in which a statutory provision not binding on the Crown must be denied an incidence upon a subject of the Crown because that incidence would be in legal effect upon the Crown fall into a few broad classes. There is first the class of cases where a provision, if applied to a particular individual or corporation, would adversely affect the exercise of an authority which he or it possesses as a servant or agent of the Crown to perform some function so that in law it is performed by the Crown itself138. Next there is the class of cases in which a provision, if applied to a particular individual or corporation, would adversely affect some proprietary right or interest of the Crown, legal equitable or statutory139. 134 (2004) 219 CLR 90. 135 (1955) 93 CLR 376. 136 (1979) 145 CLR 107. 137 (1955) 93 CLR 376 at 393-394. 138 See for example Cooper v Hawkins [1904] 2 KB 164; R v McCann (1868) LR 3 QB 677; Public Works Commissioners v Pontypridd Masonic Hall Co [1920] 2 KB 139 See Wirral Estates Ltd v Shaw [1932] 2 KB 247. Callinan And finally there is an anomalous class of cases where a provision creating a liability by reference to the ownership or occupation of property would, in its application in respect of certain kinds of property, impose a burden upon the performance of functions which, though not performed by servants or agents of the Crown, are looked upon by the law as performed for the Crown. These are cases in which the property concerned is used exclusively for 'the purposes of the administration of the government of the country' (to use Lord Westbury's expression in Greig v University of Edinburgh140); the rationale of the doctrine being that such purposes are 'to be deemed part of the use and service of the Crown' because they are 'public purposes of that kind which, by the constitution of this country, fall within the province of government and are committed to the Sovereign'141." The appellant seeks to read that passage as if it were a conclusive exposition of State Crown immunity. The respondents must fail, the appellant submitted, if they were unable to bring the State's relevant conduct within one or other of the categories of immunity stated by his Honour. Even if this proposition were an accurate and complete statement of the law on the topic, for reasons which will appear, the purpose, conduct and rights of the States in question do fall within it. Disposition of the appeal I participated in the joint judgment in NT Power142. On further reflection, in McNamara v Consumer Trader and Tenancy Tribunal143 which was directly concerned with a question of statutory construction, I expressed some reservations about the breadth of the language of Kitto J in Wynyard, and its application, as a dissenting judgment, to other cases. In particular, I referred144 to the ambiguities in his Honour's expression "some right, interest, power, authority, privilege, immunity or purpose belonging or appertaining to the Crown"145. 140 (1868) LR 1 Sc & Div 348 at 354. 141 Mersey Docks v Cameron (1865) 11 HLC 443 at 505, 465 [11 ER 1405 at 1429, 142 (2004) 219 CLR 90. 143 (2005) 221 CLR 646 at 676-677 [90]-[92]. 144 (2005) 221 CLR 646 at 671 [76], 677 [92]. 145 (1955) 93 CLR 376 at 396. Callinan This case, as with McNamara, is not governed by NT Power. Neither provides a basis for the universal application of the language of Kitto J in Wynyard to cases of Crown, or a like immunity. I refer to a "like immunity" because others have taken issue with the equation of State immunity with Crown immunity146. Nothing turns in this case upon the resolution of that issue. Before federation the colonies were largely self-governing polities, and after it, polities recognized and protected by the Constitution and having their own vice-regal appointees. Self-evidently, the States, for the government of them, need to be possessed of rights, powers, purposes, authorities and immunities not always apt for natural and other legal personalities. How such an immunity should be definitively described is not a relevant question for the resolution of this case. So too, it is unnecessary to debate any question whether there is, or is not a division or duality of the Crown in this country, as to which I agree with the pragmatic approach of Gibbs ACJ in Bradken147: "I would not wish to decide whether the wider rule of construction should be adopted in preference to the narrower rule by debating the merits of the doctrine of the indivisibility of the Crown, which seems more remote from practical realities than when the Engineers' Case148 was decided, and which is of little practical assistance in many cases". There can be no doubt, in any event, that a right arising under a contract, that is a chose in action, such as the States acquired here under their contracts with the respondent supplier, is "property" of the States, within the language of Kitto J in Wynyard. It is also something acquired, just as the negotiations and contracts were, for a purpose, medical, of the States. 146 Those who dispute the equation of State immunity with Crown immunities and prerogatives often refer to Blackstone, Commentaries on the Laws of England, (1765), Bk 1 at 232. In particular, the following is cited: "It signifies, in it's etymology, (from prae and rogo) something that is required or demanded before, or in preference to, all others. And hence it follows, that it must be in it's nature singular and eccentrical; that it can only be applied to those rights and capacities which the king enjoys alone, in contradistinction to others, and not to those which he enjoys in common with any of his subjects: for if once any one prerogative of the crown could be held in common with the subject, it would cease to be prerogative any longer. And therefore Finch lays it down as a maxim, that the prerogative is that law in case of the king, which is law in no case of the subject." (footnote omitted) 147 (1979) 145 CLR 107 at 122. 148 (1920) 28 CLR 129. Callinan The Trade Practices Act 1974 (Cth) No party in this case raised a constitutional question. It was accepted that if the Crown in right of a State or Territory was carrying on a business, either directly, or by one of its agencies then to that extent it would be amenable to the Act. It was also accepted that in dealing with the respondent supplier, the States were not carrying on a business. None of this means however that the Court may disregard the constitutional setting and the respective constitutional roles of the appellant and the States, in giving sense and effect to the Act. All of the matters to which I have referred, the respective constitutional roles of the Commonwealth and the States, the absence of any express conferral of power in relation to health upon the Commonwealth, and the charitable nature of the States' activities in providing medical services, strongly suggest that if there were ambiguity about the exemption of the States from the relevant operation of the Act here, a construction which gave the States a real and ample exemption is preferable. There are other factors relevant to, and tending in favour of such a construction. The appellant is an executive creature of the Commonwealth, although it has special powers and a degree of independence from the Executive. On the other hand, the State purchasing authorities are the States themselves under different In these circumstances it is an unlikely proposition that the names. Commonwealth Parliament would have wished to, and intended to subject the States to the operation of the Act when the States were doing what they did here. My reference to these matters as aids to construction should not be misunderstood. They are, I would reiterate, aids only. They reinforce, to the extent that any reinforcement might be necessary, the effect of the language of the Act itself. What is decisive, however, is that, on its ordinary construction, s 2B plainly exempts the States from the operation of the Act unless they are carrying on business, which, by common consent here they are not. The appellant is not assisted by s 2 of the Act which declares, relevantly, that its object is to enhance the welfare of Australians by the promotion of competition and fair trading. Although not clearly articulated, there could be detected in the arguments of the appellant a contention that it knew better than the States where their best interests lay: that in a competition between the promotion of competition itself and fair trading on the one hand, and the provision of medical supplies and services and the acquisition of the means of providing them on the other, the former should prevail: that it was really in the States' own enlightened self-interest, to have their procurement activities policed by the appellant, even if the States in consequence ended up paying more for, or suffered some uncertainty in respect of, the acquisition of necessary supplies and services. I would reject such a contention. It is entirely a matter for the States how they might choose to go about performing their functions, and there is no Callinan reason to believe, even if it were relevant, that the States misapprehended where their best interests lay. Nothing turns upon the timing of the amendments made to the Act in 1995. Indeed the States were, in a broad sense, parties to their introduction, as participants in a national programme for the reform of competition policy, themselves enacting similar legislation for intra-State operation. It is hardly likely that they would have done so with a view to hobbling themselves in carrying out any of their essential non-business functions. The fact that the amendments gave exactly the same exemption to the States in respect of their non-business activities as the Commonwealth had previously enjoyed, emphasizes, rather than detracts from the importance of State immunity in the carrying out of ordinary State non-business activities. The making of the amendments in no way weakens the force of Bradken as a binding authority in a situation of the kind which is under consideration here. Derivative immunity The joint judgment draws a distinction between concluded contracts and everything that occurs up to the point of their conclusion. It discusses in some detail the negotiations and the like which took place with the respondent supplier before the States agreed to buy supplies from it. Little could be more important for polities than the prudent and economical expenditure of public money in the acquisition of goods and services by them for the carrying out of their ordinary functions. The price of a lessening of competition, or, of an insult to fair trading generally, may not be too high a price for a State, even South Australia on reflection149, to pay in acquiring its medical necessities. It is inescapable that any impediment placed in the way of the respondent supplier in dealing with the States is equally an impediment imposed upon the latter. This is so, even if it be accepted that "illegality" may not have the same consequences for all of the parties to a contract, or that ss 80, 87 and 87A of the Act confer very wide powers upon the courts to fashion remedies to suit the particular circumstances of the case and the parties before them. The notion that the Act might have a differential application to the respondent supplier and the States here could offer no comfort to the States. The questionability of suppliers' conduct would inevitably deter the States from dealing with them. There may in some circumstances be some room for differential treatment under the Act, for example, with respect to a refusal to supply. But that is not this case. In such a situation a State itself would probably be able to invoke the Act and have it applied to suppliers. But that would be a matter for a State. In doing it they would in no way be prejudiced: rather the contrary. Indeed, insistence by the 149 South Australia originally baulked at the supplier's proposed terms of trade. Callinan appellant or the States upon the application of the Act in those circumstances would enhance, rather than prejudice the autonomy of the States in carrying out their functions. I cannot therefore accept, as a matter of reality and practicality, that to intercept and proscribe all, or any offers, invitations to tender, discussions and negotiations up to the point of the conclusion of a contract, would be to leave unimpaired, the immunity that s 2B of the Act says the States should have. To do so would not merely impair State immunity, it would effectively destroy it, and allow s 2B little or no useful operation. In my opinion, Bradken remains as authority covering this case, despite the subsequent decision of this Court in Bropho v Western Australia150. The force of what Gibbs ACJ said in the former is largely unaffected by the latter151: "It is an established rule of construction that no statute binds the Crown unless the Crown is expressly named therein or unless there is a necessary implication that it was intended to be bound; there will be such a necessary implication if it is manifest from the very terms of the statute that it was the intention of the legislature that the Crown should be bound". In Bropho the Court was considering the question whether an Act should be read so as to exclude the Crown from its operation152. That is not to the point here. In terms, this Act directly and expressly immunizes the conduct of the States when they are not carrying on business. There is no ambiguity about the reasoning of the Court in Bradken, nor about the conclusion reached by it. I am unable to accept that their Honours there would not have been alive to the reality that a construction of the Act which invalidated pre-contractual dealings would necessarily defeat the immunity which the Act gave the States. Nothing said in Bropho could justify that. As Gibbs ACJ said in Bradken153: "An injunction restraining one of the parties to a contract from completing it affects not only the party against whom it is made; it equally affects the other party to the contract … [I]f the remedies sought are granted against [for Railways of the respondent companies, the Commissioner 150 (1990) 171 CLR 1. 151 (1979) 145 CLR 107 at 116. 152 (1990) 171 CLR 1 at 18-19 per Mason CJ, Deane, Dawson, Toohey, Gaudron and 153 (1979) 145 CLR 107 at 123. Callinan Queensland] will be prejudiced by the operation of the Trade Practices Act just as much as if its provisions had been directly enforced against him." Later, his Honour referred with apparent approval to a statement by Romer LJ in Clark v Downes154 that it was a positive duty of the courts to construe an Act so as to ensure that the Crown and its property are in no way prejudicially affected155. It is no answer here to say that the prejudice to the States flowing from the proscription of pre-contractual negotiations with them by the respondent supplier would, or might be offset, or in some way diminished or rendered irrelevant because competition and fair trading as defined by the Act are more important and loftier objects than the non-business activities of the States. It is the federal Parliament which has chosen to exclude from the operation of the Act, State non- business activities. Whether, which I would doubt, that involves any, or a very extensive qualification upon the objects of the Act is not to the point. Nor is it to the point that the Act seeks to deal differently with the States when they are carrying on business. The exclusion is as obviously deliberate as it is clear. For the reasons that I have given, and the reasons of the primary judge and the Full Court of the Federal Court, I would dismiss the appeal with costs. 154 (1931) 145 LT 20 at 22. 155 (1979) 145 CLR 107 at 123-124.

HIGH COURT OF AUSTRALIA Matter No S43/2019 THE QUEEN AND Matter No S44/2019 THE QUEEN AND APPELLANT RESPONDENT APPELLANT RESPONDENT Matter No S45/2019 THE QUEEN AND APPELLANT RESPONDENT The Queen v A2 The Queen v Magennis The Queen v Vaziri [2019] HCA 35 16 October 2019 S43/2019, S44/2019 & S45/2019 ORDER Matter No S43/2019 Appeal allowed. Set aside the orders of the New South Wales Court of Criminal Appeal made on 10 August 2018. Remit the matter to the New South Wales Court of Criminal Appeal for determination of Ground 2 of the respondent's appeal to that Court according to law. Matter No S44/2019 Appeal allowed. Set aside the orders of the New South Wales Court of Criminal Appeal made on 10 August 2018. Remit the matter to the New South Wales Court of Criminal Appeal for determination of Ground 2 of the respondent's appeal to that Court according to law. Matter No S45/2019 Appeal allowed. Set aside the orders of the New South Wales Court of Criminal Appeal made on 10 August 2018. Remit the matter to the New South Wales Court of Criminal Appeal for determination of Ground 2 of the respondent's appeal to that Court according to law. On appeal from the Supreme Court of New South Wales Representation D T Kell SC with E S Jones for the appellant in each matter (instructed by Solicitor for Public Prosecutions (NSW)) H K Dhanji SC with D R Randle for the respondents in S43/2019 and S45/2019 (instructed by Armstrong Legal) T A Game SC with G E L Huxley for the respondent in S44/2019 (instructed by Armstrong Legal) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS The Queen v A2 The Queen v Magennis The Queen v Vaziri Statutes – Construction – Where s 45(1)(a) of Crimes Act 1900 (NSW) provides that a person who "excises, infibulates or otherwise mutilates the whole or any part of the labia majora or labia minora or clitoris of another person" is liable to imprisonment – Where two respondents charged with having "mutilated the clitoris" of each of complainants – Where other respondent charged with assisting those respondents following commission of those offences – Where defence case that procedure performed on complainants merely ritualistic – Where trial judge directed jury that word "mutilate" in context of female genital mutilation means "to injure to any extent" – Where trial judge directed jury that "clitoris" includes "clitoral hood or prepuce" – Whether "otherwise mutilates" should be given ordinary meaning or take account of context of female genital mutilation – Whether "clitoris" includes clitoral hood or prepuce – Whether trial judge misdirected jury as to meaning of "mutilate" and "clitoris". Appeals – Where s 6(2) of Criminal Appeal Act 1912 (NSW) provides that if appeal against conviction allowed, subject to special provisions of Act, Court of Criminal Appeal "shall ... quash the conviction and direct a judgment and verdict of acquittal to be entered" – Where s 8(1) provides that on appeal against conviction, Court of Criminal Appeal may order new trial if it considers that miscarriage of justice has occurred and it can be more adequately remedied by order for new trial than any other order – Where Court of Criminal Appeal allowed appeals against convictions based on construction of s 45(1)(a) of Crimes Act and on other grounds including that verdicts unreasonable or unsupported by evidence – Whether open to Court to quash conviction and decline to make further order – Whether sufficient evidence to warrant order for new trial – Whether matter should be remitted to Court of Criminal Appeal for redetermination of ground alleging that verdicts unreasonable or unsupported by evidence. Words and phrases – "child abuse", "clitoris", "context", "de minimis injury", "female genital mutilation", "injury", "khatna", "mischief", "misdirected the jury", "mutilation", "offence provisions", "otherwise mutilates", "purposive construction", "ritualised circumcision", "sufficient evidence", "tissue damage", "umbrella term". Crimes Act 1900 (NSW), s 45. Crimes (Female Genital Mutilation) Amendment Act 1994 (NSW). Criminal Appeal Act 1912 (NSW), ss 6(2), 8(1). KIEFEL CJ AND KEANE J. Section 45 of the Crimes Act 1900 (NSW) came into effect on 1 May 1995. It was introduced by the Crimes (Female Genital Mutilation) Amendment Act 1994 (NSW). The section is headed "Prohibition of female genital mutilation". At the relevant time, s 45(1) was in these terms: "A person who: (a) excises, infibulates or otherwise mutilates the whole or any part of the labia majora or labia minora or clitoris of another person, or (b) aids, abets, counsels or procures a person to perform any of those acts on another person, is liable to imprisonment for 7 years." The respondents A2 and Ms Kubra Magennis were charged upon indictment with having "mutilated the clitoris" of each of C1 and C2 on separate occasions. They were also charged with an alternative count of assault occasioning actual bodily harm1. The respondent Mr Shabbir Mohammedbhai Vaziri was charged with assisting A2 and Ms Magennis following the commission of those offences2. A2 and her husband, A1, are members of the Dawoodi Bohra community. The members of this community adhere to Shia Islam. Mr Vaziri is the head cleric and spiritual leader of the community in Sydney. Ms Magennis is a member of the community, and a trained nurse and midwife. The Crown alleged at trial that she performed the practice in question for members of the community. The Crown case was that A2 (the mother of C1 and C2) and Ms Magennis were parties to a joint criminal enterprise to perform a ceremony called "khatna", which involves causing injury to a young girl's clitoris by cutting or nicking it. The procedure was said to be intended to suppress the development of a girl's sexuality as she attains puberty. The Crown did not suggest that the procedure has a basis in religion but rather suggested that it is cultural in nature. This procedure was allegedly conducted on each of C1 and C2 in the presence of A2 and other family members. With respect to C1, the procedure was allegedly conducted at the home of A1's aunt when C1 was aged between six 1 Crimes Act 1900 (NSW), s 59(2). 2 Crimes Act 1900 (NSW), s 347. and eight years of age. C2, the younger of the sisters, was six years old when she was later allegedly subjected to the same treatment. The respondents did not dispute that there had been a procedure performed by Ms Magennis on C1 and C2. The defence case was that it was merely ritualistic and did not involve any nick or cut to the clitoris of either complainant. To rebut this aspect of the defence case, the Crown relied on: the accounts given by C1 and C2, in their recorded interviews with police, of feeling pain; expert evidence tendered in relation to the practice of khatna within the community; and conversations between A2, A1 and others, which were intercepted or recorded via listening devices, as to what was involved in the practice. The respondents also argued that even if there was a cut or a nick (the latter presumably being a lesser version of the former) to the clitoris of either complainant, that would not amount to "mutilation" within the meaning of s 45(1)(a). The trial judge in the Supreme Court, Johnson J, made a pre-trial ruling concerning the words "otherwise mutilates" in s 45(1)(a). His Honour subsequently directed the jury in accordance with that ruling in terms that: "The word 'mutilate' in the context of female genital mutilation means to injure to any extent." His Honour then went on regarding the Crown case to direct that: "[i]t is not necessary for the Crown to establish that serious injury resulted. In the context of this trial, a nick or cut is capable of constituting mutilation for the purpose of this alleged offence." A written direction in the same terms was provided to the jury. A2 and Ms Magennis were each found guilty by the jury of two counts of female genital mutilation contrary to s 45(1)(a) and Mr Vaziri was found guilty of two counts of being an accessory to those offences. Johnson J sentenced each of the respondents to an aggregate of 15 months' imprisonment with a non-parole period of 11 months and ordered that the sentences imposed upon A2 and Ms Magennis be served by way of home detention. Mr Vaziri was required to serve his non-parole period by way of full-time imprisonment. On appeal, the Court of Criminal Appeal (Hoeben CJ at CL, Ward JA and Adams J) quashed the respondents' convictions and ordered verdicts of acquittal on all counts3. Their Honours concluded that the trial judge had misdirected the 3 A2 v The Queen [2018] NSWCCA 174. jury as to the meaning of "mutilates"4 and that there had been a miscarriage of justice due to fresh evidence5. In their Honours' view, the word "mutilates" should be given its ordinary meaning for the purposes of s 45(1)(a). That meaning "connotes injury or damage that is more than superficial and which renders the body part in question imperfect or irreparably damaged in some fashion"6. Special leave to appeal was granted by Bell, Gageler and Edelman JJ on two grounds. The first is a matter of general importance respecting the operation of s 45(1)(a). It is that the Court of Criminal Appeal erred in construing "otherwise mutilates" as it did. The second relates to the meaning the Court gave to the term "clitoris", namely that it did not include the clitoral hood or prepuce. "Otherwise mutilates" The reasoning of the courts below The essential difference in approach to the meaning of the term "otherwise mutilates" in s 45(1)(a) as between the trial judge and the Court of Criminal Appeal is that, whilst the Court of Criminal Appeal applied the grammatical or literal meaning of the word "mutilates", the trial judge considered that the meaning to be given to that word should take account of the context in which the word is used. In his Honour's view, the word should be understood as part of the broader umbrella term, "female genital mutilation" (or "FGM")7. This broader construction, advanced by the Crown, would best promote the purpose or object of prohibiting such procedures generally. This purpose is evident from extrinsic materials and in particular the report published in June 1994 by the Family Law Council with respect to the practice of female genital mutilation in Australia ("the FLC Report")8. 4 A2 v The Queen [2018] NSWCCA 174 at [521]. 5 A2 v The Queen [2018] NSWCCA 174 at [589]. See Criminal Appeal Act 1912 (NSW), s 6(1). 6 A2 v The Queen [2018] NSWCCA 174 at [521]. 7 R v A2 [No 2] (2015) 253 A Crim R 534 at 568 [242]-[244]. 8 R v A2 [No 2] (2015) 253 A Crim R 534 at 569 [249]; Family Law Council, Female Genital Mutilation: A Report to the Attorney-General prepared by the Family Law Council (June 1994). The Court of Criminal Appeal regarded it as important that the Crimes Act does not use the term "female genital mutilation" in describing the elements of the offence in s 45. It uses only the word "mutilates". Although apparently accepting that the term "female genital mutilation" has come to be accepted as a collective name, which is to say a term encompassing all forms of cultural ritual practices of the kind in question, the Court of Criminal Appeal did not consider this to be relevant given the words used in s 45(1)9. The Court of Criminal Appeal accepted that, regardless of whether there was ambiguity in the text of s 45(1)(a), it was permissible to have recourse to extrinsic materials to determine the context for the offence provision, including its purpose and the mischief it sought to address10. The Court accepted that the word "mutilates" should be construed in the context of the FLC Report and that the recommendations contained in it informed the legislature's purpose in enacting s 45. However, their Honours considered that that general purpose cannot extend the scope of the conduct prohibited by the actual words used. The umbrella term "female genital mutilation" was not used in s 45(1), and the phrase cannot supplant the meaning of the words actually used11. The FLC Report, to which reference will be made shortly in these reasons, refers to four categories of female genital mutilation. The least severe of these practices was referred to as "ritualised circumcision". Both the FLC Report and the World Health Organization ("the WHO") had recommended its inclusion in the forms of female genital mutilation to be prohibited by law, the Court of That category is relevant to the Crown case because "ritualised circumcision" involves nicking or cutting the clitoris. The Court of Criminal Appeal, however, observed that while the Second Reading Speech of the Bill which became the Act that introduced s 45 contained no disagreement with the recommendation of the Family Law Council that all forms of female genital mutilation be prohibited, it was notable that the speech referred expressly only to the three more severe forms of it13. The Court of Criminal Appeal considered this to support the view that s 45(1)(a) requires some more severe form of injury 9 A2 v The Queen [2018] NSWCCA 174 at [494]. 10 A2 v The Queen [2018] NSWCCA 174 at [474]-[477]. 11 A2 v The Queen [2018] NSWCCA 174 at [513]. 12 A2 v The Queen [2018] NSWCCA 174 at [523]. 13 A2 v The Queen [2018] NSWCCA 174 at [514]. than a nick or a cut that leaves no visible scarring and which cannot be seen on medical examination to have caused any damage (let alone irreparable damage) to the skin or nerve tissue14. The Court of Criminal Appeal concluded that the term "mutilates" controls the scope of s 45(1)(a). It requires some imperfection or irreparable damage to have been caused. Their Honours accepted that "a cut or nick could, in a particular case, amount to mutilation of the clitoris"15. The error that their Honours saw in the direction given by the trial judge was that it included the words "to any extent", because they suggested that a de minimis injury would suffice16. Their Honours added17 that if the legislature intended to encompass all forms of female genital mutilation, legislative amendment would be necessary to expressly incorporate the least severe category of female genital mutilation. Female genital mutilation and the WHO Early studies and discussion from the late nineteenth century and until the 1980s referred to the customary ritual of some of the practices in question as "female circumcision"18. From the late 1970s, support grew for the alternative expression "female genital mutilation" to be used. The WHO has explained that the term "mutilation" was chosen to distinguish the practice from male circumcision, to emphasise the gravity and harm of the act and to reinforce the fact that the practice is a violation of girls' and women's rights and thereby to promote advocacy for its abandonment19. In 1982, the WHO made a formal statement of its position to the United Nations Commission on Human Rights, that governments should adopt clear national policies to abolish the practice of female genital mutilation and to educate the public about its harmfulness20. By this time, four different types of 14 A2 v The Queen [2018] NSWCCA 174 at [515]. 15 A2 v The Queen [2018] NSWCCA 174 at [522]. 16 A2 v The Queen [2018] NSWCCA 174 at [522]. 17 A2 v The Queen [2018] NSWCCA 174 at [524]. 18 World Health Organization, Female Genital Mutilation: An overview (1998) at 2. 19 World Health Organization, Eliminating Female genital mutilation: interagency statement (2008) at 22 (Annex 1: Note on terminology). 20 World Health Organization, Female Genital Mutilation: An overview (1998) at 59- the practice had been identified21. In January 1994, the Executive Board of the WHO passed a resolution which urged Member States to "establish national policies and programmes that will effectively, and with legal instruments, abolish female genital mutilation … and other harmful practices affecting the health of women and children"22. This resolution was later adopted by the Forty-seventh World Health Assembly23. The FLC Report The functions of the Family Law Council include advising and making recommendations to the Commonwealth Attorney-General at the request of the Attorney-General24. In September 1993, the Attorney-General asked the Family Law Council to examine the adequacy of existing Australian laws to deal with the issue of female genital mutilation25. The Family Law Council issued a discussion paper on 31 January 1994. Its final report to the Attorney-General, the FLC Report, is dated June 1994. It described female genital mutilation as "the collective name" given to several different traditional practices that involve the cutting of female genitals26. It said that those who oppose the practice call it "genital mutilation". It advised that the term "female genital mutilation" is used in the report to include all types of the practice where tissue damage results27. 21 World Health Organization (Regional Office for the Eastern Mediterranean), Seminar on Traditional Practices Affecting the Health of Women and Children: Khartoum, 10-15 February 1979 (March 1979) at 14. 22 Executive Board of the World Health Organization (Ninety-third Session), Maternal and child health and family planning: Current needs and future orientation: Traditional practices harmful to the health of women and children (25 January 1994). 23 World Health Assembly (Forty-seventh World Health Assembly), Maternal and child health and family planning: traditional practices harmful to the health of women and children (10 May 1994). 24 Family Law Act 1975 (Cth), s 115(3). 25 Family Law Council, Female Genital Mutilation: Discussion Paper (31 January 26 Family Law Council, Female Genital Mutilation: A Report to the Attorney- General prepared by the Family Law Council (June 1994) at 6 [2.01]. 27 Family Law Council, Female Genital Mutilation: A Report to the Attorney- General prepared by the Family Law Council (June 1994) at 6 [2.02]. The first form of female genital mutilation to which the FLC Report referred is the least severe form, namely "ritualised circumcision", which was referred to by the Court of Criminal Appeal as the fourth category. The FLC Report explained that "ritualised circumcision" ranges from a wholly ritualised procedure to the clitoris being "nicked" or scraped. This causes bleeding but may result in "little mutilation or long term damage"28. The second form is "clitoral circumcision" or "sunna". It involves the removal of the clitoral prepuce – the outer layer of skin over the clitoris, which is sometimes called the "hood"29. The third form is "excision" or "clitoridectomy", which usually involves the removal of the entire clitoris and often parts of the labia minora as well30. The fourth and most severe form is "infibulation", which involves removal of virtually all of the external female genitalia and the sewing together of the edges of the labia majora31. The FLC Report advised that female genital mutilation mostly occurs when a female child is between three and eight years of age32. It is not, the report stressed, a religious practice33. The practice undoubtedly constitutes child abuse34. The report identified a number of international instruments as relevant to the practice of female genital mutilation, including the Convention on the Rights of the Child35. Article 24(3) of the Convention requires State parties to 28 Family Law Council, Female Genital Mutilation: A Report to the Attorney- General prepared by the Family Law Council (June 1994) at 6 [2.03]. 29 Family Law Council, Female Genital Mutilation: A Report to the Attorney- General prepared by the Family Law Council (June 1994) at 7 [2.04]. 30 Family Law Council, Female Genital Mutilation: A Report to the Attorney- General prepared by the Family Law Council (June 1994) at 7 [2.05]. 31 Family Law Council, Female Genital Mutilation: A Report to the Attorney- General prepared by the Family Law Council (June 1994) at 7 [2.06]. 32 Family Law Council, Female Genital Mutilation: A Report to the Attorney- General prepared by the Family Law Council (June 1994) at 9 [2.13]. 33 Family Law Council, Female Genital Mutilation: A Report to the Attorney- General prepared by the Family Law Council (June 1994) at 9 [2.15]. 34 Family Law Council, Female Genital Mutilation: A Report to the Attorney- General prepared by the Family Law Council (June 1994) at 50 [6.37]. 35 And also the Universal Declaration of Human Rights, the Convention on the Elimination of All Forms of Discrimination Against Women, the Declaration on (Footnote continues on next page) take all effective and appropriate measures with a view to abolishing traditional practices prejudicial to the health of children. Australia is a party to the Convention, the FLC Report observed36. Although it was not possible to ascertain with accuracy the incidence of the practice of female genital mutilation in Australia, the FLC Report concluded that even a low incidence could not be disregarded and it might be expected that, with the increase of migrants to Australia, it would increase37. The Family Law Council considered there to be a need for special legislation to clarify the legal position relating to female genital mutilation in Australia. This was for reasons including that "[t]here should be no doubt in any person's mind that all forms of female genital mutilation are offences under Australian law"38. It concluded that there should be special legislation which makes it clear that the practice is an offence in Australia39 and recommended40 that, to be fully effective, legislation should put beyond doubt "that female genital mutilation, in all of its forms, is a criminal offence" and that it constitutes child abuse under Australian child protection legislation41. the Elimination of Violence Against Women, and the 1951 Convention and 1967 Protocol relating to the Status of Refugees: Family Law Council, Female Genital Mutilation: A Report to the Attorney-General prepared by the Family Law Council (June 1994). 36 Family Law Council, Female Genital Mutilation: A Report to the Attorney- General prepared by the Family Law Council (June 1994) at 29 [4.07]. 37 Family Law Council, Female Genital Mutilation: A Report to the Attorney- General prepared by the Family Law Council (June 1994) at 18 [2.52]. 38 Family Law Council, Female Genital Mutilation: A Report to the Attorney- General prepared by the Family Law Council (June 1994) at 50 [6.37]. 39 Family Law Council, Female Genital Mutilation: A Report to the Attorney- General prepared by the Family Law Council (June 1994) at 52 [6.41]. 40 Family Law Council, Female Genital Mutilation: A Report to the Attorney- General prepared by the Family Law Council (June 1994) at 63 [6.80]. 41 Family Law Council, Female Genital Mutilation: A Report to the Attorney- General prepared by the Family Law Council (June 1994) at 63 [6.80]. The Explanatory Note and the Second Reading Speech The Explanatory Note which accompanied the Crimes (Female Genital Mutilation) Amendment Bill 1994 (NSW) referred to "[p]rocedures involving the incision, and usually removal, of part or all of the external genitalia of young females" as being practised as a matter of custom or ritual42. The object of the Bill was to make it an offence to mutilate external female genitalia or to aid, abet, counsel or procure such mutilation. The Second Reading Speech of the Bill was given in the Legislative Council of the New South Wales Parliament on 4 May 1994. It refers to the "detailed report" of the Family Law Council and its recommendations with respect to the practice of female genital mutilation. It does not refer to the earlier discussion paper. Although the published FLC Report bears the date June 1994, it may be taken as likely that advance copies were available to those responsible for drafting the Bill and the Second Reading Speech. The Minister giving the Second Reading Speech said at the outset that "[f]emale genital mutilation, or FGM, is the term used to describe a number of practices involving the mutilation of female genitals for traditional or ritual reasons"43. He said that "[t]his bill will make the practice of female genital mutilation a criminal offence in this State". The Minister used the term "the practice" throughout the speech to refer to female genital mutilation. The practice, he said, had been condemned at an international level and the WHO had recommended that governments adopt clear national policies to abolish it. Some countries had already moved to prohibit it specifically, he observed. The Family Law Council in its "recently released ... detailed report ... strongly recommended the introduction of legislation to make clear that FGM constitutes a criminal act and a form of child abuse"44. The Bill, the Minister went on to say, "has its roots in the protection of children"45. 42 New South Wales, Legislative Council, Crimes (Female Genital Mutilation) Amendment Bill 1994, Explanatory Note at 1. 43 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 4 May 44 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 4 May 45 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 4 May It is the following description of the provisions of the Bill by the Minister which was influential to the Court of Criminal Appeal's reasoning. The Minister said that "[i]t will be an offence for anyone to perform FGM in this State"46. He went on to say that "[t]he three forms of FGM in order of severity are infibulation, clitoridectomy and sunna"47. The Bill, he said, "seeks to prohibit all of these various methods of FGM"48. The point made by the respondents, and by the Court of Criminal Appeal, is that the Minister did not expressly refer to ritualised circumcision as the FLC Report had done. The question is whether the words "or otherwise mutilates" can be taken to refer to ritualised circumcision. In the concluding remarks of the speech, the Minister stressed that in passing a law against female genital mutilation, the Government was not seeking to attack the values of any particular group in the community49. However, the practice could not be tolerated, not least because it involved the rights of young children. The Minister said that "[a]s responsible members of the community, we should place our condemnation of FGM beyond doubt". Construction – method At issue in these appeals is the scope and operation of s 45(1) and in particular whether the words "otherwise mutilates" may be taken as intended to encompass the procedure upon which the Crown case was based. The method to be applied in construing a statute to ascertain the intended meaning of the words used is well settled. It commences with a consideration of the words of the provision itself, but it does not end there. A literal approach to construction, which requires the courts to obey the ordinary meaning or usage of the words of a provision, even if the result is improbable50, has long been eschewed by this Court. It is now accepted that even words having an apparently 46 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 4 May 47 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 4 May 48 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 4 May 49 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 4 May 50 See, eg, Amalgamated Society of Engineers v Adelaide Steamship Co Ltd ("the Engineers' Case") (1920) 28 CLR 129 at 162 per Higgins J; [1920] HCA 54. clear ordinary or grammatical meaning may be ascribed a different legal meaning after the process of construction is complete51. This is because consideration of the context for the provision may point to factors that tend against the ordinary usage of the words of the provision52. Consideration of the context for the provision is undertaken at the first stage of the process of construction53. Context is to be understood in its widest sense. It includes surrounding statutory provisions, what may be drawn from other aspects of the statute and the statute as a whole. It extends to the mischief which it may be seen that the statute is intended to remedy54. "Mischief" is an old expression55. It may be understood to refer to a state of affairs which to date the law has not addressed. It is in that sense a defect in the law which is now sought to be remedied56. The mischief may point most clearly to what it is that the statute seeks to achieve. This is not to suggest that a very general purpose of a statute will necessarily provide much context for a particular provision or that the words of the provision should be lost sight of in the process of construction. These considerations were emphasised in the decisions of this Court upon which the Court of Criminal Appeal placed some weight. The joint judgment in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue57 rejected an approach which paid no regard to the words of 51 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; [1997] HCA 2; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69]; [1998] HCA 28. 52 Bennion, Statutory Interpretation, 3rd ed (1997) at 343-344, referred to in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 384 [78]. 53 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 54 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408. 55 Heydon's Case (1584) 3 Co Rep 7a at 7b [76 ER 637 at 638]. 56 Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg [1975] AC 591 at 614; Wacal Developments Pty Ltd v Realty Developments Pty Ltd (1978) 140 CLR 503 at 509; [1978] HCA 30; Wacando v The Commonwealth (1981) 148 CLR 1 at 17; [1981] HCA 60. 57 (2009) 239 CLR 27 at 46-47 [47]; [2009] HCA 41. the provision and sought to apply the general purpose of the statute, to raise revenue, to derive a very different meaning from that which could be drawn from the terms of the provision. The general purpose said nothing meaningful about the provision, the text of which clearly enough conveyed its intended operation58. Similarly, in Saeed v Minister for Immigration and Citizenship59 the court below was held to have failed to consider the actual terms of the section. A general purpose of the statute, to address shortcomings identified in an earlier decision of this Court, was not as useful as the intention revealed by the terms of the statute itself. In Baini v The Queen60, it was necessary to reiterate that the question of whether there had been a "substantial miscarriage of justice" within the meaning of the relevant provision required consideration of the text of the provision, not resort to paraphrases of the statutory language in extrinsic materials, other cases and different legislation. These cases serve to remind that the text of a statute is important, for it contains the words being construed, and that a very general purpose may not detract from the meaning of those words. As always with statutory construction, much depends upon the terms of the particular statute and what may be drawn from the context for and purpose of the provision. None of these cases suggest a return to a literal approach to construction. They do not suggest that the text should not be read in context and by reference to the mischief to which the provision is directed61. They do not deny the possibility, adverted to in CIC Insurance Ltd v Bankstown Football Club Ltd62, that in a particular case, "if the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance". When a literal meaning of words in a statute does not conform to the evident purpose or policy of the particular provision, it is entirely appropriate for the courts to depart 58 Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 59 (2010) 241 CLR 252 at 265 [32]-[34]; [2010] HCA 23. 60 (2012) 246 CLR 469 at 476 [14]; [2012] HCA 59. 61 See Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 46-47 [47]. 62 (1997) 187 CLR 384 at 408. from the literal meaning63. A construction which promotes the purpose of a statute is to be preferred64. The mischief and the purpose of s 45 Section 45 was the first provision of its kind enacted in Australia65. Its terms reflect those of ss 1 and 2 of the Prohibition of Female Circumcision Act 1985 (UK)66 ("the UK Act"). The side note (the use of which preceded that of section headings) of s 1 was "Prohibition of female circumcision". At the time that s 45 was passed there was no case law regarding the scope of those provisions67. Whilst s 45 picked up the words of ss 1 and 2 of the UK Act, neither the title of the Act which introduced it nor the heading to s 45 refers to the older terminology, "female circumcision". The heading to s 45, and the immediate context for the words "otherwise mutilates", is "[p]rohibition of female genital mutilation". A modern approach to statutory construction may take account of headings68. Whilst headings of a provision are not always reliable and do not form part of a statute69, and so may not govern what follows in the provision, headings may be used in a similar way to extrinsic materials70. They may point 63 Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 321; [1981] HCA 26. 64 Interpretation Act 1987 (NSW), s 33. 65 See Crimes (Amendment) Act (No 3) 1995 (ACT), s 5; Criminal Code Amendment Act (No 2) 1995 (NT), s 3; Statutes Amendment (Female Genital Mutilation and Child Protection) Act 1995 (SA), s 4; Criminal Code Amendment Act 1995 (Tas), s 5; Crimes (Female Genital Mutilation) Act 1996 (Vic), s 4; Criminal Law Amendment Act 2000 (Qld), s 19; Criminal Code Amendment Act 2004 (WA), s 22. 66 Which was later replaced by the Female Genital Mutilation Act 2003 (UK). 67 Re B and G (Children) [No 2] [2015] 1 FLR 905 was decided later, contains no detailed reasons and is inconclusive on the matter. 68 Bennion, Bennion on Statutory Interpretation, 5th ed (2008) at 745-747; R v Montila [2004] 1 WLR 3141; [2005] 1 All ER 113. 69 Interpretation Act 1987 (NSW), s 35(2). 70 Interpretation Act 1987 (NSW), ss 34(1), 35(5). the way towards and be used to identify the mischief to which the provision is directed and its purpose. The heading of s 45 does just that. The possible gap or defect in the law which the Attorney-General had asked the Family Law Council to consider was that relating to female genital mutilation. The term, it may be observed, by this time had acquired a broad and purposive meaning in many of the reports and discussions concerning the various practices accounted for as female genital mutilation. But it is not necessary to go further than the meaning which the FLC Report gave to the term. It is that meaning which identifies the mischief which needed to be addressed by legislation. The mischief is the practice of female genital mutilation in its various forms. The FLC Report used the term "female genital mutilation" as a collective name to refer to all ritual practices carried out on female children which had no medical benefit and involved tissue damage. It advised the Attorney-General that there was a need for special legislation to make it plain that female genital mutilation, in all its forms, should be an offence. Consistently with its use of the term "female genital mutilation", the FLC Report referred to its various forms collectively as "the practice". The Second Reading Speech adopted the terminology of the FLC Report. In the speech it was said that the practice should be condemned and the practice should not be tolerated. The Second Reading Speech as a whole conveys acceptance of the FLC Report and an intention to implement it. So understood, the mischief to which s 45 is directed is a gap in the law concerning the practice of female genital mutilation in all its forms which are productive of injury. Its immediate purpose is to criminalise the carrying out of that practice on female children. Its wider purpose may be taken to be its cessation. A narrower scope? The Court of Criminal Appeal71 rejected an argument that "otherwise mutilates" should be read in the context of the words preceding it ("excises" and "infibulates"), so as to import a common requirement of severe damage and injury of a high order. There is no notice of contention which takes issue with that approach. Nevertheless the Court of Criminal Appeal considered that the 71 A2 v The Queen [2018] NSWCCA 174 at [517]-[519]. words "otherwise mutilates" import a requirement that permanent disfigurement or obvious damage result from what is done72. The Court of Criminal Appeal was of the opinion that the Minister's speech bears this out: that the Minister can be understood to say that it was intended to prohibit the three most severe forms, but not the fourth, which involves a lesser form of injury. The problem with that approach is that it is inexplicable and improbable. It is inexplicable given the obvious acceptance of the recommendation of the FLC Report to prohibit all four forms of female genital mutilation there expressly identified. It is improbable because there is nothing to suggest that a lesser form of injury to a child was considered to be acceptable or, at the least, not warranting condemnation. The Bill which became the Act that introduced s 45, after all, was said by the Minister to address what amounts to child abuse and the FLC Report had said that female genital mutilation in all its injurious forms was child abuse as understood in child protection laws. The Court of Criminal Appeal did not explain why the term "otherwise mutilates" may have been intended to have a narrower, more literal meaning, one which denies its application to the cutting or nicking of a female child's clitoris. Although the Court accepted that cutting or nicking could in a particular case amount to mutilation, on its construction of "mutilates" in s 45(1) as bearing its ordinary meaning that could only be where some lasting damage had been inflicted. Difficulties would also attend this construction in practice. The medical evidence at trial was that a superficial cut, or incision, of the clitoris would heal well, sometimes bearing little or no evidence of what had occurred. On the Court of Criminal Appeal's construction, it may be taken as intended that even if a child might suffer a painful and distressing experience, no offence is committed unless some defect or damage is apparent. This in turn might require the prosecution to have been brought immediately. The respondents also contended that if "otherwise mutilates" has the extended meaning provided by the term "female genital mutilation", s 45(1) would make it an offence to carry out a cosmetic procedure undertaken by some adult women, such as that which involves the piercing of the genitals. The answer to the argument is that no such problem would arise if "otherwise mutilates" is taken to refer to practices to which female genital mutilation refers. 72 A2 v The Queen [2018] NSWCCA 174 at [521]. Section 45(3) The respondents also pointed to s 45(3) in aid of the construction for which they contended. Sub-section (3) provides, in relevant part, that it is not an offence against s 45(1) to perform a surgical operation if it is necessary for the health of the person and it is performed by a medical practitioner. It is most clearly protective of beneficial medical procedures such as may be necessary during or following childbirth or to correct or repair some of the effects of forms of female genital mutilation such as infibulation. The point made by the respondents respecting s 45(3) is that it would be redundant if the section proscribed the practice of female genital mutilation, which is necessarily for non-medical purposes. However, s 45(3), commencing with the words "It is not an offence against this section ...", is properly read as a clarification inserted for the avoidance of doubt, and not as an exception to Offence provisions A statutory offence provision is to be construed by reference to the ordinary rules of construction. The old rule, that statutes creating offences should be strictly construed, has lost much of its importance73. It is nevertheless accepted that offence provisions may have serious consequences. This suggests the need for caution in accepting any "loose" construction of an offence provision74. The language of a penal provision should not be unduly stretched75 or extended76. Any real ambiguity as to meaning is to be resolved in favour of an accused. An ambiguity which calls for such resolution is, however, one which persists after the application of the ordinary rules of construction77. 73 Beckwith v The Queen (1976) 135 CLR 569 at 576; [1976] HCA 55. See also Deming No 456 Pty Ltd v Brisbane Unit Development Corporation Pty Ltd (1983) 155 CLR 129 at 145; [1983] HCA 44; Waugh v Kippen (1986) 160 CLR 156 at 164; [1986] HCA 12. 74 Stevens v Kabushiki Kaisha Sony Computer Entertainment (2005) 224 CLR 193 at 211 [45]; [2005] HCA 58. 75 Allan v Quinlan; Ex parte Allan [1987] 1 Qd R 213 at 215, referred to in Milne v The Queen (2014) 252 CLR 149 at 164 [38]; [2014] HCA 4. 76 Beckwith v The Queen (1976) 135 CLR 569 at 576. 77 Barker v The Queen (1983) 153 CLR 338 at 355; [1983] HCA 18; Chew v The Queen (1992) 173 CLR 626 at 632; [1992] HCA 18. The meaning to be given to "otherwise mutilates", as referable to practices falling within the umbrella term "female genital mutilation", does not involve any artificial or unexplained extension. There is no ambiguity as to its meaning after it is considered in its context and by reference to the mischief to which it is directed and its purposes. The word "mutilates" in its ordinary usage is simply displaced in order to give effect to the purpose of s 45, to prohibit the practice of female genital mutilation on female children in order to achieve its cessation. So understood, "otherwise mutilates" is to be taken to refer to female genital mutilation in all its injurious forms. Cases such as Milne v The Queen78 do not avail the respondents. There, the construction for which the respondent contended was not borne out by the text of the provision, and its purpose, evident from extrinsic materials, did not require it. In SAS Trustee Corporation v Miles79, it was said that a court should construe a statute according to its terms rather than preconceptions about policy80, but here there is no question of any preconception. The policy of s 45 is stark. The joint judgment in Grajewski v Director of Public Prosecutions (NSW)81 adopted the ordinary meaning of the word "damage", but that was in large part because there was no support for any other meaning and the legislative history did not support an extended meaning82. A broad construction of an offence provision may be warranted in a particular case. This may be when its purpose is protective. In R v Sharpe83, McLachlin CJ of the Supreme Court of Canada construed offence provisions relating to child pornography broadly in a number of respects. Her Honour interpreted the provisions in accordance with Parliament's main purpose in creating those offences: to prevent harm to children through sexual abuse. A similar purposive approach was taken by the Court of Appeal of the Supreme Court of Victoria in Clarkson v The Queen84 in rejecting an argument that 78 (2014) 252 CLR 149. 79 (2018) 92 ALJR 1064; 361 ALR 206; [2018] HCA 55. 80 SAS Trustee Corporation v Miles (2018) 92 ALJR 1064 at 1074 [32]; 361 ALR 206 81 (2019) 93 ALJR 405; 364 ALR 383; [2019] HCA 8. 82 Grajewski v Director of Public Prosecutions (NSW) (2019) 93 ALJR 405 at 408 [13]; 364 ALR 383 at 386. 83 [2001] 1 SCR 45 at 77 [38], 79 [43]. "apparent or ostensible consent" could be a mitigating factor in sexual offences relating to underage sex. A construction which gives a broader scope to s 45 is consistent with its wider purpose, to prohibit completely female genital mutilation practices injurious to female children. That purpose is consistent with Australia's obligations under the Convention on the Rights of the Child, to which the FLC Report drew attention. In R v Wei Tang85, which concerned the offence of slavery in s 270.3 of the Criminal Code (Cth), it was argued that the term "slavery" was confined in its meaning to the exercise of powers consistent with rights of ownership, or "chattel slavery". Gleeson CJ observed that although the definition of slavery in s 270.1 was not identical to that in the International Convention to Suppress the Slave Trade and Slavery of 1926, the s 270.1 definition was clearly enough derived from the Convention86. The purpose, context and text of the Convention did not limit slavery to its de jure status. The Convention was directed to "the complete abolition of slavery in all its forms", and reflected a purpose of bringing about the abolition of the de facto condition of slavery87. Accordingly, his Honour held that it would be inconsistent with the considerations of purpose, context and text to read "slavery" in ss 270.1 and 270.3 as limited to "chattel slavery". A purposive approach of this kind does not suggest that the language of a statutory provision is to be ignored. It is rather that a broader meaning of the language is to be preferred over its ordinary or grammatical meaning. It is necessary to do so to give effect to the provision's purpose. That purpose is evident from the use of the term "female genital mutilation" in the heading and extrinsic materials. The word "mutilates" is to be understood as a term of condemnation of any of the practices referred to in the FLC Report injurious to a female child. It follows that an injury such as cutting or nicking the clitoris of a female child cannot be said to be de minimis. Injury – to any extent? It also follows that the trial judge did not misdirect the jury in summing up that the word "'mutilate' in the context of female genital mutilation means to injure to any extent". The Court of Criminal Appeal, it will be recalled, considered that those words would convey to a jury that a de minimis injury 85 (2008) 237 CLR 1; [2008] HCA 39. 86 R v Wei Tang (2008) 237 CLR 1 at 16 [21]. 87 R v Wei Tang (2008) 237 CLR 1 at 17-18 [25]-[27]. would be sufficient for the offence. But the trial judge's direction was legally correct as consistent with the FLC Report and it provided the necessary explanation of the issue before the jury. The function of a summing up is to provide information to a jury to assist it to carry out its task having regard to the particular circumstances of the case88. The particular issue here in question was whether what occurred involved no injury at all. It was the defence case that the khatna ceremony was partly symbolic and involved merely the placing of a surgical instrument on the vulva of the complainants. It was described as "skin sniffing the steel", and as involving no nicking or cutting and therefore no damage or injury to the complainants. The Crown submitted that this concept was bizarre and implausible. Against this background and in light of the defence submissions concerning the meaning of "mutilates", it is apparent that the purpose of the trial judge's direction that injury "to any extent" was sufficient was to emphasise that some injury was necessary but that a threshold of serious injury was not required. His Honour, correctly, was concerned to disabuse the jury of the notion that "mutilates" bears its ordinary meaning. Meaning of "clitoris" The indictment charged the respondents with the mutilation of the clitoris of each of C1 and C2. The trial judge directed the jury that "what the Crown has to prove, for you to convict Kubra Magennis on this count, is that she performed an act which mutilated the clitoris. The clitoris … includes the clitoral hood or prepuce. So this charge is one that requires identification of a particular part of the anatomy."89 The defence had pointed to a number of dictionary definitions, including medical dictionary definitions, which suggested that the prepuce is part of the labia minora90. The trial judge considered that the issue was capable of being moot to an extent, given that the definitions and medical evidence demonstrate 88 Alford v Magee (1952) 85 CLR 437 at 466; [1952] HCA 3; Darkan v The Queen (2006) 227 CLR 373 at 394 [67]; [2006] HCA 34. 89 A2 v The Queen [2018] NSWCCA 174 at [456]. 90 R v A2 [No 2] (2015) 253 A Crim R 534 at 571-572 [263]. that if the prepuce is not part of the clitoris, it is part of the labia minora. But if that were the case it might have been necessary to amend the indictment91. His Honour construed "clitoris" broadly, having regard to the context and purpose of s 45(1). He observed that female genital mutilation procedures are not carried out by surgeons92. Although the legislature had identified three particular areas and had not used a broader term such as "genital area", his Honour was satisfied that, as a matter of construction, "the clitoris and the prepuce of the clitoris are so closely interrelated that the prepuce may be regarded as part of the clitoris although, for technical purposes, it may also be regarded as part of the labia minora"93. It does not appear to have been contended by the parties that the word "clitoris" has a technical meaning which invites recourse to expert evidence94. Nevertheless, the Crown adduced evidence from medical experts as to its meaning. Dr Susan Marks, a specialist at the Westmead Children's Hospital, gave evidence that the clitoral anatomy includes its hood, because they are closely physically related to each other, although the clitoris and its hood are different tissue. Professor Gregory Jenkins, a specialist gynaecologist, gave evidence that he would see the clitoris and prepuce as separate structures, but observed that they are very close together. Professor Sonia Grover, the director of the Department of Paediatric and Adolescent Gynaecology at the Royal Children's Hospital, described the word "clitoris" as a global term which included structures such as the clitoral ridge, the clitoral hood, the shaft of the clitoris, the clitoral glans and the prepuce. Reviewing the medical evidence, the Court of Criminal Appeal observed that the fact that Professor Jenkins considered the clitoris and prepuce to be separate structures "would not detract from the proposition that together they might be viewed as forming part of the clitoris as a whole"95. Nevertheless the Court found that the medical dictionary definitions differentiated between the clitoris and prepuce. It said that where the legislature has identified separate anatomical parts of the genital area with some precision it must be taken to be 91 R v A2 [No 2] (2015) 253 A Crim R 534 at 572 [267]. 92 R v A2 [No 2] (2015) 253 A Crim R 534 at 572 [268]. 93 R v A2 [No 2] (2015) 253 A Crim R 534 at 573 [270]. 94 The Australian Gas Light Co v The Valuer-General (1940) 40 SR (NSW) 126 at 95 A2 v The Queen [2018] NSWCCA 174 at [525]. distinguishing between them. It held that "[g]iven that this is a penal statute, precision in identifying the relevant body part is important"96. The Court of Criminal Appeal concluded that the trial judge had been in error in this aspect of his summing up97. The approach of the trial judge to the construction of s 45(1)(a) is to be preferred as one which promotes the purpose of s 45(1)98. As explained above, that purpose was to prohibit all forms of injurious female genital mutilation, procedures which, the FLC Report had observed99, are not generally carried out by surgeons or with any precision. This context and purpose does not suggest an intention that any narrow or technical meaning be applied so as to exclude anatomical structures that are closely interrelated with the labia majora, labia minora or clitoris. Relief It follows, in our view, that the appeals should be allowed. It remains to determine the nature of the relief that is appropriate in the circumstances. Section 37 of the Judiciary Act 1903 (Cth) provides that this Court, in its appellate jurisdiction, may give such judgment as ought to have been given in the first instance and, if the cause is not pending in this Court, may remit the cause to the court from which the appeal was brought. This directs attention to the powers of the Court of Criminal Appeal on the appeals to that Court, in light of the judgment of this Court in these appeals. Subject to the proviso, s 6(1) of the Criminal Appeal Act 1912 (NSW) ("the CA Act") relevantly provides that the Court of Criminal Appeal shall allow an appeal from a conviction on indictment100 where it is of the opinion that the verdict of the jury is "unreasonable, or cannot be supported, having regard to the evidence, or ... that on any other ground whatsoever there was a miscarriage of justice". Section 6(2) of the CA Act governs the consequential orders. 96 A2 v The Queen [2018] NSWCCA 174 at [526]. 97 A2 v The Queen [2018] NSWCCA 174 at [527]. 98 Interpretation Act 1987 (NSW), s 33. 99 Family Law Council, Female Genital Mutilation: A Report to the Attorney- General prepared by the Family Law Council (June 1994) at 6 [2.01]-[2.02], 100 Brought pursuant to s 5(1) of the CA Act. The Court of Criminal Appeal allowed the respondents' appeals against their convictions on various grounds. The determination of two of those grounds depended upon the Court of Criminal Appeal's erroneous construction of s 45(1)(a) of the Crimes Act. Other successful grounds were, however, independent of the substantive issues on these appeals. Those grounds turned instead upon conclusions that evidence had improperly been admitted at the respondents' trials101; that the trial judge had erred in ruling that C2 was competent to give sworn evidence102; and that there had been a miscarriage of justice on account of the absence from the trial of medical evidence which, by the time of the appeals, had become available103. The first such error concerned the evidence of Dr X. The Crown tendered evidence at trial through Dr X as to the practice of khatna in the Dawoodi Bohra community in India in a period up to 1991. Dr X's knowledge was based on her personal experience of having a procedure undertaken on her genital area in 1950 or 1951, and on sociological studies based largely on anecdotal accounts from persons whom she interviewed. Her evidence was to the effect that the practice of khatna is static and non-ritualistic. The Court of Criminal Appeal held that the evidence adduced from Dr X was partly speculative and was not derived from any area of specialised knowledge. It was not admissible under s 79(1) of the Evidence Act 1995 (NSW), which relates to expert evidence, and should not have been admitted104. The appellant does not now challenge that conclusion. The third error concerned new medical evidence which was adduced before the Court of Criminal Appeal. It is not necessary to detail it. It had the effect of excluding the possibility that the tip of the clitoral head or glans had in fact been removed from C1 and C2. That possibility had been left before the jury, in light of the evidence of one of the expert medical witnesses that she could not see the clitoral glans of either C1 or C2 during her examinations of them. Again, the appellant does not challenge the conclusion of the Court of Criminal Appeal that a potential miscarriage of justice thereby occurred. In light of those concessions the appellant also concedes that, if its appeals to this Court are successful, this Court should leave undisturbed the Court of 101 A2 v The Queen [2018] NSWCCA 174 at [1090]. 102 A2 v The Queen [2018] NSWCCA 174 at [850]. 103 A2 v The Queen [2018] NSWCCA 174 at [358]. 104 A2 v The Queen [2018] NSWCCA 174 at [713]-[714]. Criminal Appeal's orders allowing the respondents' appeals to that Court and quashing their convictions. But what the appellant did ask this Court to do if its appeals were allowed was to set aside the Court of Criminal Appeal's consequential orders entering verdicts of acquittal and, in their place, order that new trials be had. The respondents argued that, if the appeals were allowed, this Court should set aside the orders entering the verdicts of acquittal and make no orders for new trials. In the alternative, it was said to be open to this Court to allow each appeal but leave undisturbed the Court of Criminal Appeal's orders entering verdicts of acquittal. Sections 6(2) and 8(1) of CA Act Section 6(2) of the CA Act provides that if an appeal against conviction is allowed, the Court of Criminal Appeal "shall ... quash the conviction and direct a judgment and verdict of acquittal to be entered". The sub-section is subject to other provisions of the CA Act and, in particular, s 8(1), which provides that on an appeal the Court may order a new trial if it considers that a miscarriage of justice has occurred and that, having regard to all the circumstances, the miscarriage can be more adequately remedied by an order for a new trial than by any other order which the Court is empowered to make. The orders sought by the respondents seem contrary to the terms of s 6(2). Here context provides little assistance in the construction of s 6(2) except that, taken with s 8(1), it appears to provide only a binary choice. The terms of s 6(2) appear to require an order for entry of acquittal unless the Court's other powers, such as that to order a retrial, are exercised. The premise of s 6(2), in a case such as this, is that, if a retrial is not ordered, the person whose conviction has been set aside is entitled to an acquittal. It may be observed that in Jiminez v The Queen105, where it was not considered appropriate to order a retrial, this Court ordered the entry of a verdict of acquittal. The reasons in Jiminez did not discuss the option here suggested and no other decision of this Court appears to have discussed the question in any detail. In these circumstances the parties provided further written submissions at the request of the Court. In their joint submissions the respondents argued that it is open to the Court to quash the conviction and decline to make a further order. They pointed to a number of cases where this has occurred. None of these cases explains how this choice was seen to be open as a matter of the construction of ss 6(2) and 105 (1992) 173 CLR 572; [1992] HCA 14. Some cases to which the respondents referred are explicable on another basis. Cases such as Maher v The Queen106 stand for the proposition that there is no need to enter a verdict of acquittal where it has been held that the trial itself is a nullity, or where the indictment is invalid. In R v Swansson107, Simpson J pointed out that the inevitable consequence of allowing an appeal is the quashing of the conviction. The dilemma, her Honour noted, was how the Court could then declare the trials to be a nullity – never to have taken place – and yet order new trials to be had. In that circumstance, her Honour opined, the Court should merely quash the conviction. Whatever be the correct approach in cases of this kind, these cases do not support the proposition that it is open to the Court to quash a conviction but not order a retrial or enter a verdict of acquittal. It is true that there are some cases where this Court has simply made an order quashing a conviction108, but, as they do not contain any discussion of whether a verdict of acquittal ought to be entered in circumstances where the Court determined not to order a retrial, the omission of an order entering a verdict of acquittal may have been the product of oversight. In Gerakiteys v The Queen109, upon which the respondents relied, it was held that the applicant's conviction on a broad conspiracy charge could not be supported by the evidence and therefore should be quashed. For the same reason, it was not considered to be appropriate to order a retrial. Gibbs CJ discussed whether it was appropriate to order a retrial and concluded110 that the appropriate course was simply to quash the conviction and leave it to the Crown to decide whether to prosecute in respect of one or other of the more limited conspiracies which could be supported by the evidence. His Honour did not discuss the entry of a verdict of acquittal. None was sought. Each of Murphy J111 and Deane J112 106 (1987) 163 CLR 221; [1987] HCA 31. See also R v Brown (2004) 148 A Crim R 268; R v Halmi (2005) 62 NSWLR 263; R v Swansson (2007) 69 NSWLR 406. 107 (2007) 69 NSWLR 406 at 435 [179]-[180]. 108 Callaghan v The Queen (1952) 87 CLR 115; [1952] HCA 55; Croton v The Queen (1967) 117 CLR 326; [1967] HCA 48; Timbu Kolian v The Queen (1968) 119 CLR 47; [1968] HCA 66; Whitehorn v The Queen (1983) 152 CLR 657; [1983] HCA 42. 109 (1984) 153 CLR 317; [1984] HCA 8. 110 Gerakiteys v The Queen (1984) 153 CLR 317 at 321-322. 111 Gerakiteys v The Queen (1984) 153 CLR 317 at 322. 112 Gerakiteys v The Queen (1984) 153 CLR 317 at 336-337. expressed the view that the applicant was in the circumstances entitled to an acquittal. In Pedrana113, Ipp A-JA, referring to ss 6(2) and 8(1), said that these provisions "do not empower the court to order that no new trial should be held. Nor do they empower the court to quash the conviction and make no other order." The view that these provisions present the only alternatives where an appeal against conviction on indictment is allowed is consistent with statements by members of this Court in R v Taufahema114 that "[t]he question is whether an order for a new trial is a more adequate remedy for the flaws in that trial than an order for an acquittal" and in Spies v The Queen115 that "[i]f this Court were now to refuse to order a new trial of that charge, the appellant would be acquitted of all charges". It follows in our view that it is not open to construe ss 6(2) and 8(1) of the CA Act as permitting the Court of Criminal Appeal in a case such as the present to quash the respondents' convictions but neither order a new trial nor enter verdicts of acquittal. That is sufficient to dispose of the respondents' primary contention. A new trial? As to the respondents' alternative contention, unless the interests of justice require the entry of a verdict of acquittal, an appellate court would ordinarily order a new trial where there is sufficient evidence to support a conviction116. It is well settled that provisions such as s 8(1) confer a discretion to order a new trial117. There may be factors which suggest that such an order is not appropriate118. In the present case there are some such factors. C1 and C2 were children when they were interviewed by police and when they gave evidence at a 113 (2001) 123 A Crim R 1 at 11 [71]. 114 (2007) 228 CLR 232 at 255 [51]; [2007] HCA 11. 115 (2000) 201 CLR 603 at 638 [103]; [2000] HCA 43. 116 Spies v The Queen (2000) 201 CLR 603 at 638 [103]-[104]. 117 Peacock v The King (1911) 13 CLR 619; [1911] HCA 66; Director of Public Prosecutions (Nauru) v Fowler (1984) 154 CLR 627 at 630; [1984] HCA 48. 118 Jiminez v The Queen (1992) 173 CLR 572 at 584-585, 590-591; R v Taufahema (2007) 228 CLR 232 at 256-257 [55]. trial which took place in 2015. The trial judge, in considering whether C1 and C2 were compellable to give evidence against their mother, accepted that there was a likelihood that psychological harm might be caused to them. There could be little doubt that a second trial would compound that distress. Unlike cases involving sexual offences, C1 and C2 would be required to give evidence at a new trial. The provision of the Criminal Procedure Act 1986 (NSW) that protects vulnerable witnesses119 does not permit the tender of a complainant's original evidence at a retrial of offences contrary to s 45 or s 59 of the Crimes Act. Additionally, A2 and Ms Magennis have served the sentences imposed on them, and Mr Vaziri served three months of his sentence in full-time imprisonment and was then subject to strict bail conditions for a period of more than 13 months. These factors might be thought to point against an order for new trials. The dilemma which it might create for a court is that a verdict of acquittal does not seem appropriate either. It was, in part, to this difficulty that the parties' arguments concerning ss 6(2) and 8(1) were addressed. It seems to us that, in the special circumstances of this case, there may be another course open. It is to order a new trial and leave the question whether one be had to the discretion of the Crown. There is, however, a question which is necessarily antecedent to considerations of this kind. It is that mentioned earlier, whether there is sufficient evidence to warrant an order for a new trial. The test of sufficiency The question of whether there is sufficient evidence to support a conviction is ordinarily to be determined in accordance with the test adopted120 in "[I]f there is evidence (even if tenuous or inherently weak or vague) which can be taken into account by the jury in its deliberations and that evidence is capable of supporting a verdict of guilty, the matter must be left to the jury for its decision. Or, to put the matter in more usual terms, a verdict of not guilty may be directed only if there is a defect in the evidence such that, taken at its highest, it will not sustain a verdict of guilty." 119 Section 306B(1). 120 (1990) 171 CLR 207 at 214-215; [1990] HCA 51; see also at 212-213, approving R v Prasad (1979) 23 SASR 161 at 162, Attorney-General's Reference (No 1 of 1983) [1983] 2 VR 410 and R v R (1989) 18 NSWLR 74 at 77. See and compare R v Galbraith [1981] 1 WLR 1039 at 1042; [1981] 2 All ER 1060 at 1062. The test in Doney stands in contrast to the test in M v The Queen121 that is applied in the determination of whether a verdict is unreasonable or unsafe and unsatisfactory: "Where, notwithstanding that as a matter of law there is evidence to sustain a verdict, a court of criminal appeal is asked to conclude that the verdict is unsafe or unsatisfactory, the question which the court must ask itself is whether it thinks that upon the whole of the evidence it was open to the jury to be satisfied beyond reasonable doubt that the accused was guilty. But in answering that question the court must not disregard or discount either the consideration that the jury is the body entrusted with the primary responsibility of determining guilt or innocence, or the consideration that the jury has had the benefit of having seen and heard the witnesses. On the contrary, the court must pay full regard to those considerations."122 Although consideration of the "interests of justice" may accommodate or require the application of this more stringent standard of review123, at the first stage of the analysis consideration of the sufficiency of the evidence invokes the lesser standard identified in Doney. Thus, in Peacock v The King124, Barton J described125 the question as being whether the evidence is "capable of the inference of guilt, albeit some other inference or theory be possible [and, if so] it is for the jury ... to say ... whether the inference ... overcomes all other inferences or hypotheses, as to leave no reasonable doubt of guilt in their minds". In Director of Public Prosecutions (Nauru) v Fowler126, Gibbs CJ, Murphy, Wilson, Dawson and Deane JJ posed the question in terms of whether "the admissible evidence given at the original trial was sufficiently cogent to justify a conviction". In Spies v The Queen127, Gaudron, McHugh, Gummow and Hayne JJ stated the test in terms of whether "there is evidence to support the charge". 121 (1994) 181 CLR 487; [1994] HCA 63. 122 M v The Queen (1994) 181 CLR 487 at 493 (footnotes omitted). 123 See JB v The Queen [No 2] [2016] NSWCCA 67 at [135]. 124 (1911) 13 CLR 619. 125 Peacock v The King (1911) 13 CLR 619 at 651-652; see also at 675. 126 (1984) 154 CLR 627 at 630. 127 (2000) 201 CLR 603 at 638 [104]. Application of the Doney test requires assessment of the sufficiency of the evidence taking the prosecution evidence (including the answers of prosecution witnesses to cross-examination) at its highest and drawing all inferences favourable to the prosecution case that are reasonably open128. If the case is circumstantial, it is not to the point that the court may consider an hypothesis consistent with innocence to be reasonably open on the evidence129. The question is whether a jury, taking the evidence at its highest and drawing all reasonably open inferences that are most favourable to the Crown, could rationally exclude that hypothesis130. Subject to contrary statutory provision, the court does not need to consider evidence that contradicts, qualifies or explains the prosecution's case or that supports the accused's case131. That requires consideration of the evidence. The evidence Admissions and matters not in dispute At trial, the respondents defended the charges on a narrow basis. They did not dispute (and, in the case of A2 and Ms Magennis, formally admitted in their Notices of Defence Response) that A2 was present in a room with the complainants on the relevant occasions while Ms Magennis examined and made contact with the complainants' genitalia during a "symbolic ceremony" that involved the placing of forceps on the vulva (not the clitoris) of the complainants without cutting them. This procedure was described as "skin sniffing the steel". Though Mr Vaziri was not present during the procedures, his defence was, in effect, common to that of A2 and Ms Magennis, because he did not dispute that he had assisted in covering up their actions. 128 Doney v The Queen (1990) 171 CLR 207 at 213-214; Attorney-General's Reference (No 1 of 1983) [1983] 2 VR 410 at 415 and R v R (1989) 18 NSWLR 74 at 81, both citing Haw Tua Tau v Public Prosecutor [1982] AC 136 at 151. 129 Attorney-General's Reference (No 1 of 1983) [1983] 2 VR 410 at 415-416. 130 Director of Public Prosecutions v Iliopoulos (Ruling No 3) [2016] VSC 132 at [8]- 131 Doney v The Queen (1990) 171 CLR 207 at 214-215; R v R (1989) 18 NSWLR 74 at 81, 82; see also Glass, "The Insufficiency of Evidence to Raise a Case to Answer" (1981) 55 Australian Law Journal 842 at 845-846. C1's evidence C1's evidence was adduced in the form of a recorded interview conducted by two members of the Joint Investigation Response Team ("the JIRT") on 29 August 2012 and supplemented by her oral testimony at trial. During the interview, C1 was asked about "khatana [sic]". When asked what the procedure involved, she stated that "[w]ell, they give um, a little cut there", by which she meant "[i]n your private part". It is, as the Court of Criminal Appeal noted132, to be observed that the concept of "cutting" was first introduced by the interviewer, as was the concept of "cutting to the private part". Nevertheless, C1 explained that she knew what "khatana" was "[b]ecause it's happened to me". She said that when she was seven years old she had had her private part cut by an unknown female at her grandmother's sister's house. She told investigators that "my mum tells me not to go around telling everyone that much". At trial, C1 said that during the procedure she had seen a "silver toolish thing" and that it looked a bit like scissors: "it had sort of a point, a roundish stick sort of thing and two finger-holes I think. I'm not sure." C1 drew the implement and the drawing was tendered on the trial as Exhibit B. Thereafter, C1 was told to close her eyes. Consequently, she did not see the procedure occur. But she knew something had happened because she felt "a bit of pain and then a weird sort of feeling" in her private parts. She was unsure of the nature of the pain, describing it as like "a pinching or a cutting, I'm not sure", and, in re-examination, she said that "I don't really think it was a pinching, it just felt a bit like it. ... I'm not completely sure if it was cut, although it is most likely it was cut". There was no lasting pain. She saw no blood at that, or any other, time. C1 also stated that while the procedure was being performed there were a number of women, including A2 (her mother), A5 (her paternal grandmother), A3 (her paternal grandaunt) and another unknown female (on the Crown case, Ms Magennis) surrounding her to "calm [her] down". iii) C2's evidence Like C1, C2's evidence was adduced in the form of a recorded interview conducted by the same two members of the JIRT on 29 August 2012 and supplemented by her oral testimony at trial. C2 had an intellectual disability and, as we have observed, on that and other bases the Court of Criminal Appeal 132 A2 v The Queen [2018] NSWCCA 174 at [25]. allowed a ground of appeal alleging that she was not competent to give sworn evidence133. Nevertheless, in her JIRT interview C2 was asked the (admittedly leading) question, "[w]e heard that you had had a cut on your private parts. Is that true?" C2 answered, "[y]es". When further questioned, C2 told the JIRT members that she remembered an occasion when she had been lying down on cushions in her parents' home and felt "[h]urting". When asked where it hurt, she said "[i]n my bottom". C2 was unable to identify "the private part" on a "body sketch", tendered as Exhibit C. The Court of Criminal Appeal described the sketch as showing that the words "tummy" and "knee" were written with an arrow pointing to those parts of the body. This Court has not been provided with a copy of that exhibit. When asked whether she knew what khatna was, C2 indicated that she did not know. When asked who else was home during the procedure, C2 said, "I don't want to tell you". C1 also provided some limited evidence regarding the alleged offence against C2. She said that the last time she saw the woman who had performed the procedure on her was "when she had to do that thing to my sister". Evidence of conversations recorded by listening device and telephone intercepts There was a large body of covertly recorded evidence of conversations between A2, Ms Magennis, Mr Vaziri and other, uncharged persons such as A2's husband (A1), A1's aunt (A3), and a religious authority. In brief, it consisted of evidence that was said to demonstrate that the respondents had an awareness of the practice of khatna and that they understood it to involve cutting134; and evidence said to demonstrate a consciousness of guilt (most notably concerning the "Africa checking story"135 and A2's admonishment of the complainants, 133 A2 v The Queen [2018] NSWCCA 174 at [881]. 134 The Court of Criminal Appeal described the "high point" of this evidence to be a conversation between A1 and A2 during the course of which A1 asked "[i]n us do they cut skin … or do they cut the whole clitoris?" and A2 responded, "[n]o they just do a little bit … just little". There was debate as to whether this was a reference to what had happened to C1 or C2, or what happened in the wider Dawoodi Bohra community: A2 v The Queen [2018] NSWCCA 174 at [72], [630]. 135 One recorded telephone conversation tended to prove that Mr Vaziri had encouraged A1 to falsely tell police that he and A2 had arranged for Ms Magennis (Footnote continues on next page) following their interviews, for revealing "a big secret"). It will be necessary to say something more of that evidence later in these reasons. v) Medical evidence As noted earlier, expert medical evidence was given by Dr Marks, who clinically examined C1 and C2 in 2012, and Professors Jenkins and Grover, who interpreted Dr Marks' clinical findings and made other relevant observations. In substance, their evidence fell into three broad categories: evidence interpreting Dr Marks' inability to visualise the clitoral glans (the possibility of excision of the glans versus innocent possibilities, such as difficulty visualising the glans for ordinary developmental reasons)136; evidence regarding the degree of pain, bleeding and scarring one would anticipate if the clitoris or prepuce had been cut; and evidence regarding the anatomy of the clitoris and, specifically, whether the prepuce forms a part of the clitoris. The evidence of Dr X Dr X was a retired professor who had taught in Mumbai for 36 years in the areas of psychology and women's studies. Her evidence regarding the practice of female genital mutilation within the Dawoodi Bohra community was based on a combination of academic research, interviews with participants in female genital mutilation procedures, and personal knowledge derived from her membership of the Dawoodi Bohra community and the experience of having been the victim of female genital mutilation as a child. She gave evidence to the effect that the practice of khatna within the Dawoodi Bohra community in India involved the excision of a part of the clitoris or prepuce and that the practice within that community was "static", in the sense that it neither changed over time nor varied depending on the location of the community. As has been seen, the Court of Criminal Appeal partially upheld a ground concerning the admissibility of Dr X's evidence, and the appellant did not seek to impugn that holding in this Court. That eliminates the capacity of Dr X's evidence to prove what procedure was conducted. to attend and examine the children out of a concern to ensure that they had not been circumcised on a recent African holiday. 136 This evidence falls away in view of the fresh evidence, admitted by the Court of Criminal Appeal, which demonstrated that upon subsequent examination the clitorises were capable of being seen. vii) Miscellaneous exculpatory evidence The Court of Criminal Appeal noted the existence of numerous items of, at least arguably, exculpatory evidence. They included representations recorded in the surveillance material which were consistent with discussion by the respondents of a symbolic ceremony; evidence of A3, that on the day of C1's procedure A2 had told her she wanted to conduct a "symbolic khatna" and that A3 had heard Ms Magennis tell C1 words to the effect of, "it won't hurt you. I'm just going to touch you"; and evidence of Ms Magennis, who positively asserted the defence hypothesis. In answer to C1's evidence of experiencing some transient pain during the ceremony, Ms Magennis gave evidence that she, Ms Magennis, was an insulin-dependent diabetic, that she had performed the that she was, therefore, probably procedure when she had not eaten, hypoglycaemic, and that her hands had been shaking, so as to suggest in effect that she, Ms Magennis, might have pinched or pressed against C1's genital area, thereby causing pain accidentally. Evidence sufficient to convict Taking the prosecution cases in relation to C1 and C2 at their highest, and drawing all inferences most favourable to the Crown, the evidence supports inferences that C1 and C2 were both subjected to a procedure that involved a cut or nick to their clitoris or closely interrelated tissue. A jury would be entitled to accept C1's evidence that she felt pain and that the pain felt most like a cut and did not feel like pinching. So, too, would the jury be entitled to accept C2's evidence that she had experienced pain and, despite her statement that the pain was in her "bottom", to conclude that C2 was describing pain in her genitals. That arises as a rational inference from the combination of A2's and Ms Magennis' admissions that an implement had been placed on that location and the evidence which demonstrated that C2's descriptions of her body parts were imprecise. It would further be reasonably open to a jury to infer, on balance, that C1 recalled seeing a pair of scissors. Such an inference would rationally be supported by the description C1 gave of the implement in her interview ("a silver toolish thing"); C1's subsequent statement to A1 that "yes, once [the interviewers] asked for scissors ... I saw scissor ... [t]hey do something with scissors?"; and the fact that during the interview no reference had been made to scissors. Those considerations permitted the inference that C1's description was unprompted by anything said by the investigators. If a jury inferred from these or other matters that C1 recalled seeing scissors, it would be rationally open to the jury to accept that C1's recollection was correct. Furthermore, even if a jury were to take into account evidence which was exculpatory (and for the purposes of this exercise that possibility can be excluded), a rational jury could discount the significance of the medical evidence that there was no visible damage to the relevant body parts on the basis of the medical evidence that "the genital region heals rapidly and very well, typically without leaving a scar", and, therefore, that any injury caused by a cut or a nick might be "not obvious at all". Similarly, a jury could rationally conclude that it was immaterial that neither complainant reported seeing blood: the blood might have been overlooked. It would also be reasonably open to a jury, on balance, to infer from the body of covertly recorded evidence, including, particularly, the conversations between A1 and A2, and between A1 and A2 and A1's mother and aunt (A5 and A3, respectively), on 29 August 2012, that A2 and A1 had an awareness of the practice of khatna and that they understood that practice to involve circumcision. It would be open to a jury to infer from A2's response to A1's questions on that day ("[i]n us do they cut skin? ... or do they cut the whole clitoris?") that "[n]o they just do a little bit ... just little" that A2 understood circumcision in this context to involve the cutting of the skin of, or tissue closely related to, the clitoris. It would be open to infer from the use of the word "us" that this question and answer concerned, at least, the practice in the local Dawoodi Bohra community, of which A2 and her family were members, if not the practice within A1 and A2's immediate family. In a similar fashion, the covertly recorded telephone call between A2 and Ms Magennis on 30 August 2012 would be rationally capable of supporting the inference that some minor injury was caused to the complainants' genitals. In substance, that conversation was that when told that the children were going to be examined at Westmead Hospital, Ms Magennis said, "[n]o ... No... Because the way I do no one knows even little bit." She later said, "[i]f they asked. You can say kids are playing on swings, they play in the garden. Graze can happen if they fall". On balance, it is open to infer from the expression "the way I do" (compared to, say, "I didn't do anything"), as well as the reference to a "graze", that Ms Magennis was describing a procedure that involved some minor or transient injury to the genitals which should not be apparent to the examining professionals but, if it were, could be explained on the basis of a playtime injury. Similarly, a jury might rationally conclude that Ms Magennis' reference to there being "no scar or anything there" was more probably premised on an understanding that there had been some injury but that, because of the "way" Ms Magennis had performed the procedure, the injury would not have been long- lasting. More generally, the jury would be entitled to regard this body of evidence as tending to prove, on balance, that the respondents had lied to the police, encouraged others to do so, or admonished one or other of the complainants for speaking about the procedure, and, in particular, might infer on balance from the evidence that it tended to prove that the respondents had lied regarding their understanding of khatna as a practice that involves cutting, and that the respondents were conscious that they were guilty because the procedures had involved cutting or nicking. Taken as a whole, these intermediate findings, including, specifically, the fact that C1 and C2 had experienced pain in their genital areas; the fact that A2 had requested that Ms Magennis perform the procedure and had been present during the procedure; the fact that A2 understood khatna "in us" to involve a "little" cut to the clitoris; the evidence of lies, general and specific; and the fact that the recorded statements, which demonstrated A2's understanding of the nature of the practice, occurred in the immediate context of conversations regarding the ongoing police investigation into procedures at that time suspected to have been performed on C1 and C2, would be capable of supporting the rational conclusion beyond reasonable doubt that the procedure performed on C1 and C2 involved a cut or nick. The matter should be remitted to the Court of Criminal Appeal In the Court of Criminal Appeal, each of the respondents pressed grounds alleging that the verdicts were unreasonable. Those grounds were allowed but only on the basis that the expression "otherwise mutilates" necessitates that the relevant body part be rendered "imperfect or irreparably damaged in some fashion"137 and that the word "clitoris" does not include the prepuce. The Court of Criminal Appeal concluded138 that, upon that construction of the legislation, the verdicts on the s 45(1) counts were unreasonable or unsupported by the evidence. Given the view which this Court takes of the meaning of "otherwise mutilates" and "clitoris", it now remains to determine whether the jury's verdict was, even so, unreasonable according to the test in M v The Queen. That necessitates a full review of the evidence led at trial, and, allowing for the advantages enjoyed by the jury, the determination of whether there is no reasonable possibility that the complainants' clitorises (or any closely interrelated tissue) were not injured "to any extent". The judgment of the Court of Criminal Appeal implies that their Honours had doubts about the sufficiency of the evidence to prove the alternative counts. Read in context, those doubts appear as directed to the physical element that an assault charged under s 59 of the Crimes Act occasioned "actual bodily harm"139. 137 A2 v The Queen [2018] NSWCCA 174 at [521]. 138 A2 v The Queen [2018] NSWCCA 174 at [521]. 139 A2 v The Queen [2018] NSWCCA 174 at [632]-[634]. On the question of whether the alleged conduct had occurred, the Court of Criminal Appeal concluded140 that "it would be open to a jury to reject the defence case that a 'skin sniffing the steel' ritual was performed in this matter, given the covertly recorded conversations and the admitted lies told regarding the Africa checking story"141. To so conclude, however, did not require application of the standard of review identified in M v The Queen. It is neither practical nor appropriate for this Court to undertake a full review of the evidence. It is not practical because this Court does not have access to the whole of the record. The only record of the evidence at trial is that which is contained, in summary form, in the judgments below; and, as has consistently been held in this Court, it is not appropriate for this Court to consider the sufficiency of the evidence when that task has not been undertaken by the court below142. In those circumstances, the appropriate order is that each matter be remitted to the Court of Criminal Appeal for determination of Ground 2 of each respondent's appeal to that Court in light of the proper construction of s 45(1)(a). Orders These appeals should be allowed and the orders of the Court of Criminal Appeal be set aside. Each matter should be remitted to the Court of Criminal Appeal for determination of Ground 2 of each respondent's appeal to that Court according to law. 140 A2 v The Queen [2018] NSWCCA 174 at [632]. 141 Given their Honours' indication of the particulars of the alleged conduct against which they were to judge the sufficiency of the evidence, that conclusion appears to amount to an acceptance that the evidence was sufficiently cogent as to enable a rational jury to infer that there "had been a cut or nick to the clitoris". 142 Miller v The Queen (2016) 259 CLR 380 at 411 [82]; [2016] HCA 30, citing Cornwell v The Queen (2007) 231 CLR 260 at 300 [102]; [2007] HCA 12; see also R v Hillier (2007) 228 CLR 618 at 640 [54]; [2007] HCA 13. Bell BELL AND GAGELER JJ. The facts and procedural history are set out in the joint reasons of Kiefel CJ and Keane J and need not be repeated save to the extent that is necessary to explain these reasons. The principal issue in the appeals is the legal meaning of the words "otherwise mutilates" in s 45(1)(a) of the Crimes Act 1900 (NSW) ("the Act"). The s 45(1)(a) offences with which the respondents were charged were alleged to have been committed between 18 October 2009 and 9 October 2012. At all material times, s 45(1)(a) provided that "[a] person who ... excises, infibulates or otherwise mutilates the whole or any part of the labia majora or labia minora or clitoris of another person" is liable to imprisonment for seven years143. It was the prosecution case that Kubra Magennis was the principal in the first degree and A2 the principal in the second degree in relation to each offence and that Shabbir Vaziri was an accessory after the fact to each offence. The indictment contained alternative counts alleging the aggravated assault occasioning actual bodily harm of C1 and C2144. The counts charging the s 45(1)(a) offences averred that A2 and Kubra Magennis "mutilated the clitoris" of C1 and C2 respectively. On the trial of each respondent for the s 45(1)(a) offences, it was incumbent on the prosecution to prove that Kubra Magennis' act resulted in the mutilation of the clitoris of C1 and C2, as the case may be. The jury was directed that: "The word 'mutilate' in the context of female genital mutilation means to injure to any extent. It is not necessary for the Crown to establish that serious injury resulted. In the context of this trial, a nick or cut is capable of constituting mutilation for the purpose of this alleged offence." In upholding the respondents' challenge to this direction, the Court of Criminal Appeal of the Supreme Court of New South Wales said that the superficial shedding of skin cells as the result of a nick or cut that leaves no visible scarring, and that on medical examination is not found to have occasioned damage to the skin or nerve tissue, does not amount to mutilation of the clitoris within the meaning of s 45(1)(a)145. Their Honours held that, while a cut or nick 143 The maximum penalty for the offence was increased to 21 years by the Crimes Amendment (Female Genital Mutilation) Act 2014 (NSW), Sch 1 [2]. 144 Crimes Act 1900 (NSW), s 59(2). 145 A2 v The Queen [2018] NSWCCA 174 at [515]. Bell might result in the mutilation of the clitoris, the words "to any extent" wrongly conveyed that a de minimis injury would suffice to establish the offence146. The evidence before the Court of Criminal Appeal established that C1's external genitalia were normal and there was no evidence of any scarring or previous trauma to the clitoral glans or clitoral hood. The evidence with respect to C2 was to the same effect. The Court of Criminal Appeal allowed the respondents' appeals, quashed their convictions and entered verdicts of acquittal. For the reasons to be given, we consider that the Court of Criminal Appeal's interpretation of the words "otherwise mutilates" in s 45(1)(a) is correct and, in light of the evidence, including the fresh evidence received on the appeals, that the Court of Criminal Appeal was right to enter verdicts of acquittal on the s 45(1)(a) counts. (The appellant does not challenge the Court of Criminal Appeal's orders entering verdicts of acquittal on the alternative counts). It follows that we would dismiss the appeals. Section 45(1)(a) of the Act is modelled on s 1(1)(a) of the Prohibition of Female Circumcision Act 1985 (UK), which made it an offence for any person to "excise, infibulate or otherwise mutilate the whole or any part of the labia majora or labia minora or clitoris of another person". Section 45 was inserted into the Act by the Crimes (Female Genital Mutilation) Amendment Act 1994 (NSW) ("the Amending Act"), the long title of which is "An Act to amend the Crimes Act 1900 to prohibit female genital mutilation". The heading of s 45 is "Prohibition of female genital mutilation". The appellant accepts that, as a matter of ordinary English, the word "mutilates" connotes "a higher level of injury" than an injury "to any extent". The appellant contends that the Court of Criminal Appeal erred in construing the offence created by s 45(1)(a) by giving the verb "mutilates" its ordinary meaning147. In this statutory context, so the argument goes, the verb "mutilates" takes its meaning from the collective phrase "female genital mutilation" and, so understood, extends to ritualised practices that occasion any transient damage to the tissue of the clitoris, labia majora or labia minora (collectively, "labia"). The principles of interpretation were not in issue on the hearing of the appeals. In assigning legal meaning to the words of a provision, the court starts with consideration of the ordinary and grammatical meaning of the words taking into account both context and legislative purpose148. Consideration of context in 146 A2 v The Queen [2018] NSWCCA 174 at [522]. 147 A2 v The Queen [2018] NSWCCA 174 at [521]. 148 Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 46-47 [47] per Hayne, Heydon, Crennan and Kiefel JJ; [2009] HCA 41; (Footnote continues on next page) Bell its widest sense and the purpose of the statute informs the interpretative task throughout149. That consideration, and the consequences of giving a provision its literal, grammatical meaning, may lead the court to adopt a construction that departs from the ordinary meaning of the words150. Purposive construction, however, does not extend to expanding the scope of a provision imposing criminal liability beyond its textual limits151. This is not a case in which the words of the provision accommodate a range of meanings including the meaning for which the appellant contends152. This Court is asked to depart from the ordinary meaning of the language of the offence-creating provision and to extend its reach by recourse to a collective phrase used in the heading, which does not form part of the provision153. The appellant maintains that, when regard is had to the extrinsic material, it is clear that the object of enacting s 45 was to prohibit the practice of female genital mutilation in all its forms, including ritualised practices in which the clitoris is nicked leaving no scar or other detectable damage ("ritualised practices"). To give the words "otherwise mutilates" their ordinary meaning on this analysis is to produce a result that is manifestly absurd or unreasonable154. The appellant's argument invokes s 33 of the Interpretation Act 1987 (NSW), which requires the court to prefer a construction which promotes the purpose or object of the Act. Australian Education Union v Department of Education and Children's Services (2012) 248 CLR 1; [2012] HCA 3; Roadshow Films Pty Ltd v iiNet Ltd [No 2] (2012) 248 CLR 42; [2012] HCA 16. 149 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408 per Brennan CJ, Dawson, Toohey and Gummow JJ; [1997] HCA 2. 150 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 384 [78] per McHugh, Gummow, Kirby and Hayne JJ; [1998] HCA 28. 151 Milne v The Queen (2014) 252 CLR 149 at 164 [38] per French CJ, Hayne, Bell, Gageler and Keane JJ; [2014] HCA 4. 152 Taylor v Owners – Strata Plan No 11564 (2014) 253 CLR 531 at 557 [66] per Gageler and Keane JJ; [2014] HCA 9; SAS Trustee Corporation v Miles (2018) 92 ALJR 1064 at 1071-1072 [20] per Kiefel CJ, Bell and Nettle JJ; 361 ALR 206 at 215; [2018] HCA 55. 153 Interpretation Act 1987 (NSW), s 35(2)(a). See also Bennion, Bennion on Statutory Interpretation, 5th ed (2008) at 745-747. 154 Interpretation Act 1987 (NSW), s 34(1)(b)(ii). Bell Recognition that the object of enacting s 45 was the prohibition of "female genital mutilation" says nothing as to the conduct that the legislature is to be taken to have intended to fall within the scope of the prohibition. At least that is so unless that collective phrase can be said to have had a settled meaning at the date the Amending Act was enacted. Critical to acceptance of the appellant's submission is the contention that, at that date, there could be no doubt that the expression "female genital mutilation" had a meaning which included ritualised practices. The submission instances Black's Law Dictionary ("Black"): "[F]rom 1979, Black's Law Dictionary contained a definition of 'female genital mutilation' as follows: '1. Female circumcision. 2. The act of cutting, or cutting off, one or more female sexual organs.'" The reliance on Black is misconceived. The 5th edition of Black, published in 1979, did not contain a definition of the collective phrase "female genital mutilation". In the 9th edition, published in 2009, the editors introduced a convention of recording in parentheses the date of the first known use of defined terms. The 9th edition contained a definition of "female genital mutilation" and recorded in parentheses the first known use of the expression as having been in 1979. It is likely that the reference is to a seminar held in association with the World Health Organization ("the WHO") in 1979 in Khartoum ("the Khartoum seminar") in which a session was devoted to the topic of female circumcision. The trial judge's analysis suffered from a similar misconception. His Honour said that the word "mutilates" was to be understood as taking its meaning from the expression "female genital mutilation", which had "become a type of term of art or catch-all term, describing a range of conduct extending from ... cutting (including a nick) to ... infibulation and clitoridectomy". His Honour referred in this connection to the online version of the Macquarie Dictionary, which defines "female genital mutilation" in terms that include a "ritualistic nick". In the Court of Criminal Appeal, the appellant acknowledged "that there is some difficulty in relying on a dictionary definition that may not have been in existence" at the date of the enactment of s 45. The concession was well made. It appears that a definition of the collective phrase "female genital mutilation" first appeared in the 2013 edition of the Macquarie Dictionary. In this Court, the appellant's principal reliance is on references in the Minister's second reading speech on the Bill for the Amending Act ("the Minister's speech") to the recommendations of the WHO and the Family Law Council of Australia with respect to the prohibition of the practice of female genital mutilation155. In particular, the appellant relies on the definition of 155 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 4 May Bell "female genital mutilation" adopted by the Family Law Council as supporting its contention that, at the date of the enactment of the Amending Act, the collective phrase had the settled meaning for which it contends. As will appear, the contemporary materials to which this Court was taken do not establish that this is In January 1994, the Family Law Council issued a Discussion Paper on the topic of female genital mutilation ("the Discussion Paper")156. The expression "female genital mutilation" was used in the Discussion Paper to "embrace all types of circumcision, other than mere ritual, where an incision is made in the girl's genital area"157. The practice of female genital mutilation was described as involving any one of four procedures, in order from least to most severe, as follows: (i) ritualised circumcision, involving cleaning and/or application of substances around the clitoris and, in some instances, the scraping or nicking of the clitoris causing bleeding but resulting in little mutilation or long-term damage158; (ii) sunna, involving the removal of the clitoral prepuce159; (iii) clitoridectomy, involving the removal of the glans of the clitoris and, usually, the entire clitoris and often parts of the labia minora160; and (iv) infibulation, involving the removal of virtually all of the external female genitalia161. It will be observed that categories (ii), (iii) and (iv) involve injury to the clitoris, or the labia, which, as a matter of ordinary English, may be described as mutilating the whole or part of those structures. By contrast, conduct within category (i), involving cleaning of, or the application of substances to, the clitoris, or scraping or nicking the clitoris in circumstances in which the scrape or 156 Family Law Council, Female Genital Mutilation: Discussion Paper (31 January 157 Family Law Council, Female Genital Mutilation: Discussion Paper (31 January 158 Family Law Council, Female Genital Mutilation: Discussion Paper (31 January 159 Family Law Council, Female Genital Mutilation: Discussion Paper (31 January 160 Family Law Council, Female Genital Mutilation: Discussion Paper (31 January 161 Family Law Council, Female Genital Mutilation: Discussion Paper (31 January Bell nick does not result in any scarring or detectable damage, does not, as a matter of ordinary English, amount to mutilating the clitoris. In June 1994, the Family Law Council published its Report to the Attorney-General on Female Genital Mutilation ("the Report")162. In the Report, the Family Law Council recommended that the Commonwealth Parliament enact legislation to make clear that female genital mutilation is a criminal offence and that it constitutes child abuse under Australian child protection laws. The Report adopted the Discussion Paper's classification of the four categories of female genital mutilation163. The Report treated as within category (i) any practice that occasions tissue damage to the female genitalia including bruising, contusion or incision. The Minister's speech was made on 4 May 1994. Relevantly, the Minister stated164: "This bill will make the practice of female genital mutilation a criminal offence in this State. … The practice involves the excision or removal of parts or all of the external female genitalia. The procedure is usually performed on girls of tender age. … The World Health Organisation has recommended that governments adopt clear national policies to abolish the practice. … The Family Law Council of Australia recently released a detailed report on FGM. The council strongly recommended the introduction of legislation to make clear that FGM constitutes a criminal act and a form of child abuse. … I turn to the provisions of the bill. It will be an offence for anyone to perform FGM in this State. The three forms of FGM in order of severity are infibulation, clitoridectomy and sunna. The bill seeks to prohibit all of these various methods of FGM. … The bill follows legislation in place in the United Kingdom and the United States which are careful not to interfere with legitimate forms of surgery." (emphasis added) 162 Family Law Council, Female Genital Mutilation: A Report to the Attorney- General prepared by the Family Law Council (June 1994). 163 Family Law Council, Female Genital Mutilation: A Report to the Attorney- General prepared by the Family Law Council (June 1994) at 6-8 [2.01]-[2.06]. 164 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 4 May Bell As the reasons of Kiefel CJ and Keane J note, the Minister's reference to the Family Law Council's recommendation suggests that advance copies of the Report were available to the Parliament. Notably, despite the Family Law Council's adoption of the classification of four categories of female genital mutilation including category (i), the Minister described "the practice" as involving the excision or removal of parts of or all of the external genitalia, a description that is confined to categories (ii), (iii) and (iv). And the Minister identified the object of the Bill as the prohibition of three forms of female genital mutilation, namely, infibulation, clitoridectomy and sunna. The stated intention to implement the recommendation of the Family Law Council does not support an inference that the mischief to which the Amending Act was directed was the prohibition of conduct falling within category (i). The Minister did not identify the source of the WHO recommendation that "governments adopt clear national policies to abolish the practice [of female genital mutilation]". On the hearing of the appeals, the parties were given leave to file supplementary submissions outlining relevant recommendations of the WHO as at May 1994. The appellant's submission set out "[a]ctions of [the WHO] in relation to female genital mutilation". These commenced with the Khartoum seminar in 1979, which had as its subject "traditional practices affecting the health of women and children". As earlier noted, one session was concerned with "female circumcision". Two papers were presented on this topic. The first paper addressed female circumcision in Egypt, which was described as involving three forms: (a) sunna type, in which the clitoris is snipped; (b) second type, in which the labia minora and part of the clitoris are removed; and (c) total removal of the clitoris and labia165. The second paper addressed female circumcision in Somalia, which was described as involving four forms: (a) mild sunna; (b) modified sunna; (c) partial or total clitoridectomy; and (d) infibulation (Pharaonic female circumcision)166. The Khartoum seminar resulted in a recommendation for the adoption of clear national policies to abolish female circumcision. 165 Dr Afaf Attia Salem, Director, General Directorate Maternity and Child Health, Ministry of Health, Cairo, "The Practice of Circumcision in Egypt", in World Health Organization, Seminar on Traditional Practices Affecting the Health of Women and Children, Khartoum, 10-15 February 1979 (1979) at 10. 166 Mrs Edna Ismail, WHO Temporary Advisor and Director, Department of Training, Ministry of Health, Somalia, "Female Circumcision – Physical and Mental Complications", in World Health Organization, Seminar on Traditional Practices Affecting the Health of Women and Children, Khartoum, 10-15 February 1979 Bell It may be accepted, as the appellant submits, that during the 1980s the WHO endorsed the recommendation of the Khartoum seminar with respect to female circumcision. This acceptance does not shed light on the scope of the conduct that was sought to be prohibited. The appellant points to the resolution passed at the 47th WHO Assembly, adopting a resolution recommended by the Executive Board on 10 May 1994, urging member States to establish national policies and programs to effectively abolish female genital mutilation. Again, acknowledgment of the WHO resolution does not assist in resolving the question of the scope of the conduct that member States were being urged to proscribe. In 1986, an article published under the auspices of the WHO made reference to "three main types of female circumcision" of which "[c]ircumcision proper, known in Muslim countries as sunna ... is the mildest … form", involving "the removal only of the clitoral prepuce"167. The following year, the Inter- African Committee on Traditional Practices Affecting the Health of Women and Children, in cooperation with the WHO, offered a definition of female circumcision as "the partial or complete removal of the female external genitalia"168. In 1992, a further article authored by a Joint Task Force between the WHO and the International Federation of Gynecology and Obstetrics (FIGO) was published in two journals169. The article described "female circumcision" as having three forms170: "In its mildest form, female circumcision involves only the removal of the foreskin of the clitoris. But in the majority of cases the clitoris itself is removed, together with all or part of the labia minora and in the most severe form the labia majora." 167 World Health Organization, "A traditional practice that threatens health – female circumcision" (1986) 40(1) WHO Chronicle 31 at 32. 168 World Health Organization, Report on the Regional Seminar on Traditional Practices Affecting the Health of Women and Children in Africa, 6-10 April 1987, Addis Ababa, Ethiopia (1987) at 12. 169 Joint Task Force of the World Health Organization and the International Federation of Gynecology and Obstetrics (FIGO), "Female circumcision" (1992) 45 European Journal of Obstetrics & Gynecology and Reproductive Biology 153; Joint Task Force of the World Health Organization and the International Federation of Gynecology and Obstetrics International Journal of Gynecology & Obstetrics 149. (FIGO), "Female Circumcision" 170 Joint Task Force of the World Health Organization and the International Federation of Gynecology and Obstetrics (FIGO), "Female circumcision" (1992) 45 European Journal of Obstetrics & Gynecology and Reproductive Biology 153 at 153. Bell At the date of the Minister's speech, the WHO had not adopted a uniform definition or classification of female genital mutilation. In January 1994, the Director-General of the WHO stated171: "Female genital mutilation is a collective name given to a series of traditional surgical operations performed on female genitals in several countries in the world. ... Its physical and psychological effects on girls and women, particularly on normal sexual function, affect their reproductive health in a way which lasts all their lives, since none of the procedures are reversible. In all types of female circumcision part or the whole of the clitoris is removed." More than a year after the enactment of the Amending Act, a WHO Technical Working Group met in Geneva with the object of recommending the adoption of standard definitions and a classification for the different types of female genital mutilation. In its report, the Technical Working Group noted that the classification of female genital mutilation then in current use generally distinguished three main types: excision of the prepuce and clitoris; excision of the prepuce, clitoris and labia minora; and infibulation. The Technical Working Group recommended that "other practices involving the stretching, pricking, piercing, cauterization, scraping or cutting of any part of the external genitalia or the insertion of herbs or any other substances ... should also be included in the classification"172. The extrinsic material does not support the appellant's contention that the collective phrase "female genital mutilation" had acquired a meaning encompassing ritualised practices at the date of the enactment of the Amending Act. The Court of Criminal Appeal was correct to hold that it is unclear that it was the legislative intention that ritualised practices were to fall within the proscription of s 45(1)(a). The construction for which the appellant contends was squarely based on demonstrating that "female genital mutilation" was understood in each of the four ways described in the Family Law Council's Report at the date the Amending Act was enacted. Correctly, in our view, the appellant did not invoke the principle that a statute is "always speaking" in support of its argument. It is one thing to recognise that the application of a statutory word or phrase may change over 171 World Health Organization, Maternal and Child Health and Family Planning: Current Needs and Future Orientation – Report by the Director-General (12 January 1994) at 8 [21]. 172 World Health Organization, Female Genital Mutilation: Report of a WHO Technical Working Group, Geneva, 17-19 July 1995 (1996) at 5. Bell time, particularly in light in advances in science and technology. It is another thing to contemplate that the meaning of statutory language creating an offence can expand etymologically such that conduct that is not proscribed at the date of the enactment of the offence may come to fall within the proscription at some undefined time thereafter. That is because, accepting that the fixity or variability through time of the content of any statutory language is a question of interpretation, statutory language which creates a criminal offence is to be interpreted in light of the fundamental principle that a criminal norm should be certain and its reach ascertainable by those who are subject to it173. We do not read the joint reasons in Aubrey v The Queen174 to suggest the contrary. The question in Aubrey was whether grievous bodily harm may be inflicted upon another person by the reckless transmission of a sexual disease contrary to s 35(1)(b) of the Act. The provision can be traced to s 20 of the Offences against the Person Act 1861 (UK) ("the 1861 Act"). In R v Clarence, the Court for Crown Cases Reserved, by majority, held that the infliction of grievous bodily harm for the purposes of s 20 of the 1861 Act required proof of an assault or battery productive of immediate physical injury175. The joint reasons held that R v Clarence should no longer be followed176. Consideration of the legislative history led their Honours to reject the submission that "inflicts" in this statutory context has a narrower meaning than "causes"177. The rejection of each of these planks of Mr Aubrey's argument removed the obstacle to finding that the reckless transmission of the human immunodeficiency virus to his sexual partner amounted to the infliction of grievous bodily harm within the ordinary meaning of the statutory language. In R v Ireland, Lord Steyn described the 1861 Act as a statute of the "always speaking" type178. The joint reasons in Aubrey commented that, if 173 Director of Public Prosecutions (Cth) v Poniatowska (2011) 244 CLR 408 at 424 [44] per French CJ, Gummow, Kiefel and Bell JJ; [2011] HCA 43; Director of Public Prosecutions (Cth) v Keating (2013) 248 CLR 459 at 479 [48] per French CJ, Hayne, Crennan, Kiefel, Bell and Keane JJ; [2013] HCA 20. 174 (2017) 260 CLR 305; [2017] HCA 18. 175 (1888) 22 QBD 23 at 41 per Stephen J. 176 Aubrey v The Queen (2017) 260 CLR 305 at 319 [18] per Kiefel CJ, Keane, Nettle 177 Aubrey v The Queen (2017) 260 CLR 305 at 322-323 [31]-[32]. 178 R v Ireland [1998] AC 147 at 158. Bell his Lordship meant by this statement that the language of the 1861 Act was adaptable to new circumstances, it was an approach that accorded with the approach adopted in this country179. Their Honours observed that there may be differing views as to his Lordship's intended meaning180, noting that Mr Aubrey had not developed his argument on the "always speaking" approach to statutory construction181. In R v G182, a case in which the meaning of the word "reckless" in s 1(1) and (2) of the Criminal Damage Act 1971 (UK) was the issue, Lord Bingham of Cornhill explained the approach to construction in this way: "[s]ince a statute is always speaking, the context or application of a statutory expression may change over time, but the meaning of the expression itself cannot change"183. The starting point, his Lordship said, was what the Parliament meant by "reckless" in 1971184. So, too, here the starting point is what the Parliament meant by its use of the words "otherwise mutilates" in enacting s 45 in 1994. Section 45 of the Act creates a serious, indictable criminal offence. The choice to use the words "otherwise mutilates", and not a formulation such as "otherwise injures", tells against finding that the objective legislative intention was to include within the reach of the prohibition conduct occasioning no more than transient injury. Giving the words "otherwise mutilates" their ordinary meaning cannot be said to produce a result that is manifestly absurd or unreasonable; these words serve to extend the prohibition to conduct resulting in the mutilation of the clitoris or labia in ways that may not involve the removal of the whole or a part of either structure (excision) or the stitching together of the labia (infibulation). The command of s 33 of the Interpretation Act is to prefer a 179 Aubrey v The Queen (2017) 260 CLR 305 at 322 [30] per Kiefel CJ, Keane, Nettle and Edelman JJ, citing R v Ireland [1998] AC 147 at 158-159. 180 Aubrey v The Queen (2017) 260 CLR 305 at 322 [30], noting, in fn 82, Yemshaw v Hounslow London Borough Council [2011] 1 WLR 433 at 442-443 [26]-[27] per Baroness Hale of Richmond JSC, with whom Lords Hope of Craighead DPSC and Walker of Gestingthorpe JSC agreed (Lord Rodger of Earlsferry JSC agreeing at 446 [38]); [2011] 1 All ER 912 at 922-923, 926. 181 Aubrey v The Queen (2017) 260 CLR 305 at 322 [30] per Kiefel CJ, Keane, Nettle 183 R v G [2004] 1 AC 1034 at 1054 [29]. 184 R v G [2004] 1 AC 1034 at 1054 [29]. Bell construction that promotes the purpose or object underlying the statute over a construction that would not promote that purpose or object. A construction that gives the words "otherwise mutilates" their ordinary meaning cannot be said to be one that does not promote the purpose or object of the Act185. The Court of Criminal Appeal did not err in finding that the words "otherwise mutilates" in this statutory context bear their ordinary meaning. It is a conclusion that accords with the object of proscribing the three forms of female genital mutilation that were identified in the Minister's speech. As the respondents rightly submit, the prohibition in s 45(1)(a) is on conduct that results in mutilation as distinct from the means by which any injury is inflicted. It was for the jury, giving the word "mutilates" its ordinary meaning, to determine whether Kubra Magennis' act resulted in the mutilation of C1's or C2's clitoris. The Court of Criminal Appeal was right to hold that superficial tissue damage which leaves no visible scarring and which on medical examination is not shown to have caused any damage to the skin or nerve tissue is not in law capable of amounting to mutilation for the purposes of the provision186. It follows that the evidence, including the fresh evidence adduced in the Court of Criminal Appeal, was not capable of supporting the respondents' convictions for offences contrary to s 45(1)(a) of the Act. This conclusion makes it unnecessary to address the appellant's second ground of challenge. For these reasons we would dismiss the appeals. 185 Chugg v Pacific Dunlop Ltd (1990) 170 CLR 249 at 262 per Dawson, Toohey and Gaudron JJ; [1990] HCA 41. 186 A2 v The Queen [2018] NSWCCA 174 at [515]. NettleJ 148 NETTLE AND GORDON JJ. We agree with the orders proposed by Kiefel CJ and Keane J and agree generally with their reasons. We wish to say something more, however, about the construction of s 45(1)(a) of the Crimes Act 1900 (NSW). Section 45 was enacted in 1994 by the Crimes (Female Genital Mutilation) Amendment Act 1994 (NSW) ("the 1994 FGM Act"). The long title of that Act was "[a]n Act to amend the Crimes Act 1900 to prohibit female genital mutilation". Section 45 itself is headed "[p]rohibition of female genital mutilation" and, at the relevant time, was in these terms: "(1) A person who: excises, infibulates or otherwise mutilates the whole or any part of the labia majora or labia minora or clitoris of another person, or aids, abets, counsels or procures a person to perform any of those acts on another person, is liable to imprisonment for 7 years. (2) An offence is committed against this section even if one or more of the acts constituting the offence occurred outside New South Wales if the person mutilated by or because of the acts is ordinarily resident in the State. It is not an offence against this section to perform a surgical operation if that operation: is necessary for the health of the person on whom it is performed and is performed by a medical practitioner ... In determining whether an operation is necessary for the health of a person only matters relevant to the medical welfare of the person are to be taken into account. It is not a defence to a charge under this section that the person mutilated by or because of the acts alleged to have been committed consented to the acts. This section applies only to acts occurring after the commencement of the section. ..." (emphasis added) NettleJ An issue in the Court of Criminal Appeal of the Supreme Court of New South Wales was the meaning of the phrase "otherwise mutilates" in s 45(1)(a). The Court of Criminal Appeal interpreted the phrase as requiring the imposition of some permanent impairment, injury or imperfection, in the sense of irreparable damage of the labia majora, labia minora or clitoris. Consistent with that view, the Court held that a superficial nick or a cut (which necessarily leads to the destruction of those skin cells which are cut) could be a "mutilation" of the relevant body part, but only if some injury or imperfection is proved and that injury or imperfection has some permanent quality. As these reasons will demonstrate, the phrase "otherwise mutilates" in s 45(1)(a) means any physical injury to the whole or any part of the labia majora, labia minora or clitoris, which is done for non-medical reasons. It is not necessary to demonstrate that the physical injury lasted beyond the time it took for that immediate injury to heal or that there was any permanent disfigurement, alteration or loss of function, of the whole or any part of the labia majora, labia minora or clitoris. The starting point is the words of the offence created by s 45(1)(a): that a person who "excises, infibulates or otherwise mutilates the whole or any part of the labia majora or labia minora or clitoris of another person" is guilty of an offence (emphasis added). It is not: "excises, infibulates or otherwise mutilates by irreparably impairing or rendering imperfect the whole or any part of the labia majora or labia minora or clitoris of another person". Second, it is significant that, relevantly, the offence is "otherwise mutilates ... any part of the ... clitoris" (emphasis added). It directs attention to the clitoris, a sensitive organ – the mutilation of any part of which is forbidden. It is a vanishingly subtle distinction between the removal of a "lentil" sized amount from the clitoris, which the Court of Criminal Appeal would categorise as an "excision", and a "cut" or a "nick" to the clitoris. There is no meaningful textual basis to conclude that while the former kind of conduct would be caught by the word "excises" in s 45(1)(a), a cut or nick, absent permanent damage, would not be caught by the phrase "otherwise mutilates". Third, the phrase "otherwise mutilates ... any part of" indicates that the legislature intended to protect against any kind of invasive contact to the labia majora, labia minora or clitoris. That is reflected in the fact that the provision gives examples of invasive conduct – excision and infibulation – and then uses the catch-all phrase "otherwise mutilates" to capture other kinds of female genital mutilation involving invasive physical contact. Excluding conduct which constitutes a nick or cut from the operation of the provision would deprive the words "otherwise mutilates" and "any part" of any meaningful work to do. NettleJ This construction of the provision is reinforced by the four categories of female genital mutilation mentioned in the Family Law Council Discussion Paper187, and in the subsequent Family Law Council Report188, both of which Parliament had available to it at the time of the introduction of the 1994 FGM Act189. Three categories, namely, sunna or circumcision, involving removal of the clitoral hood; clitoridectomy; and infibulation190, may be seen as covered by the words "excision" or "infibulation". The remaining category mentioned in the Discussion Paper and the Report was the least serious form of female genital mutilation, "ritualised circumcision"191. The Discussion Paper came to the preliminary conclusion that "all types of circumcision, other than mere ritual, where an incision is made in the girl's genital area" should be considered criminal acts192. The Report recommended prohibiting "all types of the practice where tissue damage results"193. That left that remaining category – ritualised circumcision where it entails physical injury – to be captured by the phrase "otherwise mutilates". Thus, an intention not to prohibit that least severe form of female genital mutilation should not be extrapolated from the second reading speech which accompanied the introduction of s 45194. That the legislature 187 Family Law Council, Female Genital Mutilation: Discussion Paper (31 January 188 Family Law Council, Female Genital Mutilation: A Report the Attorney-General prepared by the Family Law Council (June 1994). 189 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 4 May 1994 at 1859-1860; New South Wales, Legislative Council, Parliamentary Debates (Hansard), 10 May 1994 at 2145-2146, 2149. 190 Family Law Council, Female Genital Mutilation: Discussion Paper (31 January 1994) at 7 [2.04]-[2.06]; Family Law Council, Female Genital Mutilation: A Report to the Attorney-General prepared by the Family Law Council (June 1994) at 6-8 [2.04]-[2.06]. See reasons of Kiefel CJ and Keane J at [21]-[24]. 191 Family Law Council, Female Genital Mutilation: Discussion Paper (31 January 1994) at 6 [2.03]; Family Law Council, Female Genital Mutilation: A Report to the Attorney-General prepared by the Family Law Council (June 1994) at 6 [2.03]. 192 Family Law Council, Female Genital Mutilation: Discussion Paper (31 January 193 Family Law Council, Female Genital Mutilation: the Attorney-General prepared by the Family Law Council (June 1994) at 6 [2.02], A Report 194 See reasons of Kiefel CJ and Keane J at [45]-[46]. NettleJ intended to prohibit any kind of physical injury to the labia majora, labia minora or clitoris is further reinforced by the heading195 of s 45 as well as the long title to the 1994 FGM Act, which inserted the provision in the Crimes Act. By importing a requirement of permanent impairment, injury or imperfection, the Court of Criminal Appeal created an additional hurdle which not only is not sourced in the text of s 45 but also fails to have regard to the nature and function of the labia majora, the labia minora and the clitoris. The evidence was that the genital region heals rapidly and very well, typically without scarring. For example, Dr Marks gave evidence that it "is very common for the genital examination findings to be normal following past injury to the genital region". Similarly, Dr Jenkins gave evidence that in his experience of adult women who had undergone female genital mutilation procedures, any overt change in their anatomy was "broadly speaking, not obvious at all". Dr Marks also gave evidence that a cut to the clitoral head could affect future sexual function. If the cuts are inflicted upon children, the effects on sexual function may not emerge until they start being sexually active, years later. Furthermore, the requirement that there be permanent impairment, injury or imperfection would give rise to the odd result that whether or not a procedure gives rise to criminal liability under the "otherwise mutilates" limb of s 45(1)(a) would depend on the extent to which the body part repaired itself and, therefore, in some cases, the period of time that elapsed before the person subjected to the procedure, or someone else, reported the fact of the procedure. The longer the period, the less likely that liability would be established. These are strong indicators that the phrase "otherwise mutilates" does not require permanent impairment, injury or imperfection. What s 45(1)(a) does require is some form of female genital mutilation procedure performed for non-medical reasons196 which inflicts physical injury to the whole or any part of the labia majora, labia minora or clitoris. The nature of that physical injury will, of course, vary from case to case. And, given the passage of time, there may, on occasion, be no direct physical evidence of the physical injury sustained at the time of the procedure. Nonetheless, there may be evidence capable of satisfying a jury beyond reasonable doubt that, at the relevant time, a procedure was carried out on a person and that the procedure caused physical injury to the whole or any part of the labia majora or labia minora or clitoris of that person. 195 Interpretation Act 1987 (NSW), ss 34(1), 35(2), 35(5). 196 Crimes Act, s 45(3). NettleJ It follows that the trial judge did not misdirect the jury about the proper construction of "otherwise mutilates" in s 45(1)(a). Edelman The essential statutory meaning and application of s 45(1)(a) "Otherwise mutilates" means all other types of the practice of female genital mutilation The offence in s 45 of the Crimes Act 1900 (NSW) carries the heading197: "Prohibition of female genital mutilation". The offence is committed when any person "excises, infibulates or otherwise mutilates the whole or any part of the labia majora or labia minora or clitoris of another person"198. Sections 45(2) and 45(5), which clarify aspects of the operation of the offence, speak of "the person mutilated". The Court of Criminal Appeal of New South Wales correctly noted that the breadth of the dictionary definitions of "mutilate" meant that dictionaries were of "limited assistance"199. The Court of Criminal Appeal also observed that the verb "mutilates" "suggests that more than the causing of an injury is required"200. In contexts other than female genital mutilation this is often the case. But, with respect, the context and purpose of s 45 of the Crimes Act require that "mutilates" be given the meaning of the practice of female genital mutilation rather than the connotation of "mutilates" in other contexts. The respondents correctly point out that s 45(1)(a) says "otherwise mutilates" and does not refer expressly to the practice of female genital mutilation. But in light of the context and purpose of s 45 the words must reasonably be understood to refer to that practice, thus having the meaning "otherwise engages in the practice of female genital mutilation". The most immediate matters of context are the heading to the section, "Prohibition of female genital mutilation", and the long title of the Act which inserted s 45201, "An Act to amend the Crimes Act 1900 to prohibit female genital mutilation". Other matters of context referred to in the other judgments are the Explanatory Note, the Second Reading Speech and the inutility of the words "otherwise mutilates" unless the compound expression "excises, infibulates or otherwise 197 See Interpretation Act 1987 (NSW), ss 34(1), 35(2), 35(5). 198 Crimes Act 1900 (NSW), s 45(1)(a). 199 A2 v The Queen [2018] NSWCCA 174 at [489]. 200 A2 v The Queen [2018] NSWCCA 174 at [495]. 201 Crimes (Female Genital Mutilation) Amendment Act 1994 (NSW). Edelman mutilates" is understood as a reference to the practice of female genital mutilation. To allow the context and purpose of a purely criminal provision to give a word a meaning that it would not bear in other contexts is no different from the role that context and purpose play in the interpretation of statutes that concern civil law, or both civil and criminal law. In Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation202, Mason and Wilson JJ observed that "[i]n earlier times" an anxiety about judicial intrusion into the legislative sphere sometimes led courts to adopt literal constructions of provisions that diverged from the meaning that any reasonable person would have understood Parliament to have intended. But it is well established that courts no longer interpret civil statutes that way203. Nor do courts employ a different regime of interpretation or construction of statutory words merely because conduct is proscribed as an offence204. In any instance of interpretation of intended meaning, the process "must begin with a consideration of the text itself"205 but, since the intended meaning of words can never be acontextual, the process must also "begin by examining the context"206. When this Court said in Milne v The Queen207 that "[p]urposive construction does not justify expanding the scope of a criminal offence beyond its textual limits" it was not suggesting the existence of a separate principle of interpretation for criminal statutes that circumscribed the role of purpose or context to operate only within the covers of the dictionaries of the time. 202 (1981) 147 CLR 297 at 319; [1981] HCA 26. 203 Bropho v Western Australia (1990) 171 CLR 1 at 20; [1990] HCA 24; CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; [1997] HCA 2. 204 Aubrey v The Queen (2017) 260 CLR 305 at 325-326 [39]; [2017] HCA 18. See also R v Adams (1935) 53 CLR 563 at 567-568; [1935] HCA 62; Beckwith v The Queen (1976) 135 CLR 569 at 576; [1976] HCA 55; R v Lavender (2005) 222 CLR 67 at 96-97 [93]-[94]; [2005] HCA 37. 205 Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 46 [47]; [2009] HCA 41. 206 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69]; [1998] HCA 28. See also CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408. 207 (2014) 252 CLR 149 at 164 [38]; [2014] HCA 4. See also Krakouer v The Queen (1998) 194 CLR 202 at 223 [62]-[63]; [1998] HCA 43. Edelman The point being made by this Court was that once courts have interpreted the meaning of the words of a provision they cannot expand that meaning in an attempt to give the words a wider effect. It is not open to courts, independently of their interpretation of the statutory words, to "suppose the law-maker present, and that you have asked him this question: Did you intend to comprehend this case?"208. As McHugh J said in Krakouer v The Queen209, a decision cited with approval in Milne210: "If conduct of a particular kind stands outside the [meaning of the] language of a penal section, the fact that a Court takes the view that it is through inadvertence of the Legislature that it has not been included does not authorise it to assume to remedy the omission by giving the penal provision a wider scope than [the meaning of] its language admits." intended There might sometimes be a fine line between asking: "In light of its legislative purpose, what would Parliament have these circumstances?" and asking: "Does the intended meaning of the words used by Parliament extend to these circumstances?" But the proper question to ask in statutory interpretation is always the latter. Where the relevant meaning of the words of a statute concerns a criminal offence it is particularly important to respect the difference between the two questions, lest the judiciary create, and apply retroactively, a new criminal offence. However, for the reasons above, an interpretation of "otherwise mutilates" to mean "otherwise engages in the practice of female genital mutilation" is an interpretation of the meaning of the words of s 45(1)(a) rather than an application of Parliament's purpose beyond the meaning of the words used. The essential meaning and the application of the practice of female genital mutilation Since the context and purpose of s 45(1)(a) reveal the intended meaning of its words as a proscription of the practice of female genital mutilation, there remain the questions of what is the essential meaning, and what is encompassed within female genital mutilation. the practice of The respondents' submission was to interpret the meaning of the statutory expression at a level of particularity that was designed to freeze its application only to those practices said to exist in 1994. The respondents relied upon what they submitted were the only three practices contemplated by Parliament when the application, of 208 Compare Riggs v Palmer (1889) 22 NE 188 at 189. 209 (1998) 194 CLR 202 at 223 [62], quoting Ex parte Fitzgerald; Re Gordon (1945) 45 SR (NSW) 182 at 186. 210 (2014) 252 CLR 149 at 164 [38], fn 39. Edelman the offence was enacted in 1994211, and derived a meaning from those practices requiring female genital mutilation to involve "serious or significant damage to the external female genitalia". The respondents submitted that "[w]hat is being referred to throughout is the practice in the invasive, destructive sense that the Second Reading Speech began with". The Second Reading Speech began as "This bill will make the practice of female genital mutilation a criminal offence in this State. Female genital mutilation, or FGM, is the term used to describe a number of practices involving the mutilation of female genitals for traditional or ritual reasons. The practice involves the excision or removal of parts or all of the external female genitalia. The procedure is usually performed on girls of tender age. It has been estimated that FGM occurs in more than forty countries, and tradition is the major factor which contributes to its continuation. While the practice is often linked to certain religious communities, this view is in fact mistaken. The origins of the practice pre-date most major religions." In the Second Reading Speech, the Minister also referred to three forms of female genital mutilation, "in order of severity", as "infibulation, clitoridectomy and sunna" and then said that the "bill seeks to prohibit all of these various methods of FGM"213. Additionally, earlier articles published by the World Health Organization214 in 1986 and 1992 referred to these three forms of "female circumcision". These three forms did not, and do not, encapsulate all practices, "as a matter of custom or ritual"215, involving tissue damage to the external genitalia of young females. Relevantly to these appeals, these three forms did 211 Crimes (Female Genital Mutilation) Amendment Act 1994 (NSW). 212 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 4 May 213 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 4 May 214 World Health Organization, "A traditional practice that threatens health – female circumcision" (1986) 40(1) WHO Chronicle 31 at 32; Joint Task Force of the World Health Organization and the International Federation of Gynecology and Obstetrics (FIGO), "Female circumcision" (1992) 45 European Journal of Obstetrics & Gynecology and Reproductive Biology 153; republished as Joint Task Force of the World Health Organization and the International Federation of Gynecology 37 International Journal of Gynecology & Obstetrics 149. "Female Circumcision" and Obstetrics (FIGO), 215 New South Wales, Legislative Council, Crimes (Female Genital Mutilation) Amendment Bill 1994, Explanatory Note at 1. Edelman not include a "nick or a cut", which might be argued, at the time of any trial, to involve no long-term physical injury. It might be doubted whether the Minister's comments in the Second Reading Speech should be best understood to have been suggesting that the practice of female genital mutilation in 1994 was limited only to these three forms. But even if that were the Minister's understanding, and even if it were also the earlier understanding of the World Health Organization, those understandings of the forms of the practice should not conclusively define the scope of s 45(1)(a), which is not expressly confined to any particular forms of female genital mutilation but appears, instead, by the catch-all "or otherwise mutilates" to be intended to encompass any type of the practice. Where legislation does not expressly delimit the scope of its application then its scope is usually to be determined by the contemporary application of its essential meaning that will best give effect to the legislative purpose. This is what is meant by statutes "always speaking". In Aubrey v The Queen216, this Court considered the meaning of the phrase "[w]hosoever maliciously by any means ... inflicts grievous bodily harm" in s 35(1)(b) of the Crimes Act, as it was then. One submission in that case was that the reckless transmission of sexual diseases did not, at the time that the provision was enacted, fall within the ordinary understanding of "inflicting" harm. In a joint judgment, a majority of this Court said that even if this were correct (which it was not)217: in knowledge of the aetiology and "subsequent developments symptomology of infection have been such that it now accords with ordinary understanding to conceive of the reckless transmission of sexual disease by sexual intercourse without disclosure of the risk of infection as the infliction of grievous bodily injury". In Aubrey, the generality of the language of s 35(1)(b) of the Crimes Act218, applied consistently with the legislative purpose that was particularly evident in the use of the words "by any means"219, required the word "inflicts" to be interpreted with an essential meaning cast at a high level of generality. So even if the submission about the ordinary understanding of "inflicts" in 1900 were correct, the Court would not have been constrained by that limited understanding. Instead, the essential meaning of the provision was to be applied 216 (2017) 260 CLR 305. 217 (2017) 260 CLR 305 at 320 [24]. 218 (2017) 260 CLR 305 at 326 [40]. 219 (2017) 260 CLR 305 at 323-324 [34]. Edelman to give best effect to the purpose of the provision consistently with contemporary knowledge and understanding. The essential meaning would not, and does not, change220. But its application can change. As Lord Bingham of Cornhill colourfully expressed this point221: "There is, I think, no inconsistency between the rule that statutory language retains the meaning it had when Parliament used it and the rule that a statute is always speaking. If Parliament, however long ago, passed an Act applicable to dogs, it could not properly be interpreted to apply to cats; but it could properly be held to apply to animals which were not regarded as dogs when the Act was passed but are so regarded now." It is, therefore, vital to express the essential meaning at the proper level of generality, having regard to statutory purpose. Properly characterised, the essential meaning of the practice of female genital mutilation captured by the words "otherwise mutilates" in s 45(1)(a) is all actions involving a practice of causing tissue damage to the genitals of female children. The purpose of s 45(1)(a) was to proscribe any forms of that practice. It was not to proscribe only some forms of the practice. Nor was it only to proscribe the particular forms of the practice that were best known in 1994. Indeed, since 1982, the World Health Organization had been advocating for governments to "adopt clear national policies to abolish the practice of female genital mutilation"222 and was "committed to the abolition of all forms of female genital mutilation"223. The World Health Organization in 1998 adopted a classification that covered all those forms including a type that it described as "[u]nclassified: includes pricking, piercing ... stretching ... cauterization by burning ... scraping of tissue"224. The Family Law Council Report, a draft of which was before Parliament at the time the Crimes (Female Genital Mutilation) Amendment Bill 1994 (NSW) was debated, had also recommended prohibition of all female genital mutilation, describing it as involving "all types of the practice where tissue damage 220 Compare Yemshaw v Hounslow London Borough Council [2011] 1 WLR 433 at 443 [27]; [2011] 1 All ER 912 at 923. 221 R (Quintavalle) v Secretary of State for Health [2003] 2 AC 687 at 695 [9]. 222 See World Health Organization, Female genital mutilation: An overview (1998) 223 World Health Organization, Female genital mutilation: An overview (1998) at 5. 224 World Health Organization, Female genital mutilation: An overview (1998) at 6. Edelman results"225. The Family Law Council had quoted from a report published in New Scientist which said that226: "[i]n reality the distinction between the types of circumcision is often irrelevant since it depends on the sharpness of the instrument used, the struggling of the child, and the skill and eyesight of the operator". Against this background, the Minister's remarks in the Second Reading Speech concerning proscribing the practice, which "has no physical benefits and is associated with a number of health hazards"227, are remarks that reveal a purpose extending beyond any particular or common forms of the practice to any example of the practice that involves tissue damage to the genitals of female children. Whatever the understanding of the Minister or others about the particular existing forms of the practice of female genital mutilation, and whether or not any new or unforeseen forms of the practice arise, the purpose of s 45(1)(a) was likewise intended to extend to every form of the practice of female genital mutilation, namely any actions which result in tissue damage to the genitals of female children. The approach of the Court of Criminal Appeal implicitly, and correctly, recognised that the practice of female genital mutilation, described in s 45(1)(a) by the verbs "excises", "infibulates", and "otherwise mutilates", was not confined to the three categories described by the Minister in the Second Reading Speech. The Court of Criminal Appeal applied the meaning of female genital mutilation as encompassing any "injury or damage that is more than superficial and which renders the body part in question imperfect or irreparably damaged in some fashion"228. With respect, however, this does not sufficiently apply the legislative purpose. Instead, it confines the proscribed practices by references to criteria that might be difficult to apply, including thresholds of "superficial" and "irreparable damage" or "imperfection". To conform with the legislative 225 Family Law Council, Female Genital Mutilation: A Report to the Attorney- General prepared by the Family Law Council (1994) at 6 [2.02]. See also Family Law Council, Female Genital Mutilation: Discussion Paper (1994) at 28 [5.22], 226 Family Law Council, Female Genital Mutilation: A Report to the Attorney- General prepared by the Family Law Council (1994) at 6 [2.01], quoting Armstrong, "Female circumcision: fighting a cruel tradition" (2 February 1991) New Scientist 22 at 22. 227 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 4 May 228 A2 v The Queen [2018] NSWCCA 174 at [521]. Edelman purpose, the prohibition on all forms of the practice of female genital mutilation must extend to all actions involving tissue damage to the genitals of female children. The trial judge therefore did not err when directing the jury that "mutilate" in s 45(1)(a) means "to injure to any extent". Can a conviction be quashed with no further order made? I agree with Kiefel CJ and Keane J, for the reasons that their Honours give229, that the appropriate order on these appeals is that each matter be remitted to the Court of Criminal Appeal for determination of Ground 2 of each respondent's appeal to that Court according to law. Strictly, it is therefore not necessary for this Court to resolve the dispute between the parties about the orders that can be made in the Court of Criminal Appeal in light of the success of other grounds of appeal in the Court of Criminal Appeal that were not in issue in this Court. That dispute arose in this Court because the Crown submitted that the Court of Criminal Appeal was confined to making either of two sets of orders: (i) orders quashing the conviction and directing a judgment and verdict of acquittal to be entered, or (ii) orders quashing the conviction and directing that a new trial be had. In contrast, the respondents submitted that another alternative was (iii) to quash the conviction but to make no further order. Although it is not strictly necessary to determine this point, it is a point that is a matter of considerable importance. It could affect the orders of the Court of Criminal Appeal on remitter. This Court has also previously made orders quashing a conviction without any further order on numerous occasions without apparently considering whether it had power to do so230. It is therefore appropriate to explain in detail why I have concluded that there is no power for the Court of Criminal Appeal to quash the conviction without either directing a judgment and verdict of acquittal or ordering a new trial. The Crown's submission is based in the text of ss 6(2) and 8(1) of the Criminal Appeal Act 1912 (NSW). Each of those sub-sections is enlivened where the Court of Criminal Appeal allows an appeal under s 6(1). Section 6(2) is a default provision because it is subject to "the special provisions of this Act". If the appeal is allowed, the default provision in s 6(2) requires the Court to quash the conviction and to direct a judgment and verdict of acquittal. However, 230 Callaghan v The Queen (1952) 87 CLR 115; [1952] HCA 55; Croton v The Queen (1967) 117 CLR 326; [1967] HCA 48; Timbu Kolian v The Queen (1968) 119 CLR 47; [1968] HCA 66; Calabria v The Queen (1983) 151 CLR 670; [1983] HCA 33; Whitehorn v The Queen (1983) 152 CLR 657; [1983] HCA 42; Gerakiteys v The Queen (1984) 153 CLR 317; [1984] HCA 8; Maher v The Queen (1987) 163 CLR 221; [1987] HCA 31. Edelman one of the special provisions to which s 6(2) is subject is s 8(1), which permits the Court to: "... order a new trial in such manner as it thinks fit, if the court considers that a miscarriage of justice has occurred, and, that having regard to all the circumstances, such miscarriage of justice can be more adequately remedied by an order for a new trial than by any other order which the court is empowered to make." (emphasis added) The question raised by the Crown's submission is therefore whether an order that the conviction be quashed, without any further order, is an order "which the court is empowered to make". There is no express power to make only that order. Such a power, if it exists, must be an implied power, an inherent power in the sense of part of "the well of undefined powers" beyond its constitution231 or a power "inherited"232 by the Supreme Court of New South Wales and which s 3(1) of the Criminal Appeal Act preserves when the Supreme Court is constituted as the Court of Criminal Appeal. No implied power to quash a conviction without further order Of necessity233, there is an implied power, upon which s 8(1) relies, for an appellate court to make an order quashing a conviction. An order quashing a conviction is logically anterior to the power in s 8(1) to order a retrial. But there is no necessity to imply a power to make an order quashing the conviction without either ordering a retrial or ordering an acquittal. There are no gaps in the remedial scheme of the Crimes Act that would reasonably require such a power. First, if a retrial is not appropriate then an order for acquittal can be made even if the appellate court considers that the appellant is probably guilty. Secondly, a retrial can be ordered or an acquittal entered even if the conviction arose from a trial that might attract the description of a "nullity". As to the first point, s 6(2) of the Criminal Appeal Act was modelled on the relevantly identical s 4(2) of the Criminal Appeal Act 1907 ("the 1907 231 Grassby v The Queen (1989) 168 CLR 1 at 16; [1989] HCA 45. 232 Dockray, "The Inherent Jurisdiction to Regulate Civil Proceedings" (1997) 113 Law Quarterly Review 120 at 122. See also R v Forbes; Ex parte Bevan (1972) 127 CLR 1 at 7, "the power which a court has simply because it is a court of a particular description"; [1972] HCA 34. 233 Byrnes v The Queen (1999) 199 CLR 1 at 20 [32]; [1999] HCA 38; Pelechowski v Registrar, Court of Appeal (NSW) (1999) 198 CLR 435 at 452 [51]; [1999] HCA Edelman English Act")234. As Professor Kenny observed of the direction to enter a judgment and verdict of acquittal in s 4(2) of the 1907 English Act, "a New Trial, unfortunately, cannot be ordered; even though the prisoner be obviously guilty"235. Despite the contradiction involved in declaring a person who is believed to be obviously guilty to be not guilty when the person's conviction is quashed, the purpose of the power was to vindicate the principle against multiple exposure to jeopardy236. Subject to statutory provisions to the contrary, this principle was vindicated in a court of record by an order for acquittal, which would permit a plea of autrefois acquit in a subsequent prosecution of the accused for the same offence237. In a number of judgments of the Court of Criminal Appeal of England and Wales, English judges lamented that after a miscarriage of justice the acquittal of those who might be guilty could mean that "crimes go unpunished"238. The Lord Chief Justice said that a power to order a new trial was needed as a matter of "absolute necessity"239, although he remarked in another case that such a power "would naturally be rarely exercised"240, perhaps reflecting a view held at that time that punishment of the guilty was generally a lesser concern than successive exposures of a person to the prospect of conviction241. The gap that was perceived by the Court of Criminal Appeal of England and Wales after the enactment of the 1907 English Act was the lack of a power to order a new trial. It was not the lack of a power to quash a conviction with no order for acquittal. In 1912, in New South Wales, the Criminal Appeal Act filled that gap by including the power in s 8(1) to order a new trial, paying heed to the lamentations 234 7 Edw VII c 23. 235 Kenny, Outlines of Criminal Law, 4th ed (1909) at 493, fn 1. 236 Gerakiteys v The Queen (1984) 153 CLR 317 at 322. 237 Pearce v The Queen (1998) 194 CLR 610 at 627-628 [61]; [1998] HCA 57; see also at 617 [22]. See also Island Maritime Ltd v Filipowski (2006) 226 CLR 328 at 336 [15]; [2006] HCA 30. 238 Joyce (1908) 1 Cr App R 142 at 143. See also Hampshire (1908) 1 Cr App R 212 239 Stoddart (1909) 2 Cr App R 217 at 245. 240 Joyce (1908) 1 Cr App R 142 at 143. 241 See Pearce v The Queen (1998) 194 CLR 610 at 614 [10], quoting Green v United States (1957) 355 US 184 at 187-188. Compare R v Taufahema (2007) 228 CLR 232 at 254-255 [49]-[51]; [2007] HCA 11. Edelman of the Court of Criminal Appeal of England and Wales and also to the position in Canada242. As to the second point, an implication of power to quash a conviction without further order was considered necessary by the Supreme Court of Canada in the limited circumstance where the trial is found to have been a mistrial, so that the trial was a "nullity". Speaking of the provision applicable in Canada in 1923 empowering orders of acquittal or the grant of a new trial243, Fateux J, with whom the rest of the Supreme Court of Canada agreed on this point, said244: "That there will be cases where the Court of Appeal will not order one or other of the alternatives is certain. Thus a conviction on an indictment signed by an unauthorized person cannot be sustained and must be quashed. And in such a case, an order, either directing a verdict of acquittal to be entered or a new trial, would be meaningless and senseless. It cannot, therefore, be stated that this further authority is given with respect to trials affected with such complete and fatal nullity." With respect, the direction of a verdict of acquittal when a trial is found to be a mistrial and a "nullity" is not necessarily meaningless or senseless. Whatever might be meant in this context by the concept of a "nullity", an issue considered later in these reasons, the trial was a real event and prior to the quashing of the conviction there was nevertheless a conviction recorded. The recorded conviction was a fact which provided a sufficient basis for an appeal to be brought245. Equally, a recorded acquittal could be a meaningful fact, not least as vindication to the appellant. Subject to statutory exceptions, one reason that a recorded acquittal is meaningful even in cases of "nullity" is that a defence of autrefois acquit should apply to preclude a subsequent trial where an acquittal is entered by an appellate court. Historically, this defence was not available when the acquittal was entered by the court at which the trial was a "nullity". This was said to be based upon a 242 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 5 December 1911 at 2307-2308. 243 An Act to amend the Criminal Code, 13-14 Geo V, c 41, s 9. 244 Welch v The King [1950] SCR 412 at 425. 245 Russell v Bates (1927) 40 CLR 209 at 213-214; [1927] HCA 56; Calvin v Carr [1979] 1 NSWLR 1 at 8-9. See also Crane v Director of Public Prosecutions [1921] 2 AC 299 at 319. Edelman supposition that in hindsight the accused had "never been in actual jeopardy"246. Yet, as Coleridge J recognised, notwithstanding any defect in the trial the accused remained liable to a conviction, which, unless reversed, would put him "in so much jeopardy literally that punishment may be lawfully inflicted on him". The other rationale was that "[t]he judgment reversed is the same as no judgment"247: reasoning that should apply to any conviction that is set aside, whether the trial is characterised as a "nullity" or not248. Just as a conviction is sufficient to enable an appeal to be brought whether or not the trial was a mistrial, an acquittal entered by the appellate court after setting aside the conviction should be sufficient for the purpose of raising a defence of autrefois acquit upon a subsequent prosecution whether or not the trial was a mistrial249. It is also neither meaningless nor senseless for an order for a new trial to be made even if the first trial might be described as a "nullity". The power in s 8(1) for the Court of Criminal Appeal to order a new trial "in such manner as it thinks fit" might require particular orders to be made such as that the trial be on a new indictment or before a different judge. No inherent or inherited power to quash a conviction without further order In Crane v Director of Public Prosecutions250, the majority of the House of Lords held that a pre-existing power of the Court of Crown Cases Reserved, preserved when the Court of Criminal Appeal of England and Wales was created, empowered the Court of Criminal Appeal to make orders for a new trial where the first trial was a mistrial or "nullity". This power to order a venire de novo (a new hearing)251 had been a power possessed by the Court of Crown Cases 246 Coke, The Third Part of the Institutes of the Laws of England (1644) at 214; Chitty, A Practical Treatise on the Criminal Law (1816), vol 1 at 756. See also Conway v The Queen (2002) 209 CLR 203 at 209-210 [9]; [2002] HCA 2. 247 R v Drury (1849) 3 Car & K 190 at 199 [175 ER 516 at 520]. 248 See also Friedland, "New Trial after an Appeal from Conviction – Part II" (1968) 84 Law Quarterly Review 185 at 188-189. 249 Cooke, "Venire de Novo" (1955) 71 Law Quarterly Review 100 at 119-120. 250 [1921] 2 AC 299 at 319, 324, 330, 333. See also R v Granberg (1973) 11 CCC (2d) 117 at 121. 251 See R v Yeadon and Birch (1861) Le & Ca 81 [169 ER 1312]. See also R v Mellor (1858) Dears & B 468 [169 ER 1084]. Edelman Reserved, which was formally created in 1848252. The venire de novo was granted by the Court of Crown Cases Reserved only when the first trial was found to be a "nullity". As the King's Bench had described the order, it was "not to be considered in the nature of a new trial, but the first trial is to be considered a mis-trial, and therefore a nullity"253. The power to order a venire de novo after a mistrial was inherited by Supreme Courts in Australia. It was described in 1915 by Isaacs J as "well established", although Griffith CJ described it as "now almost obsolete"254. In Crane, the majority of the House of Lords relied upon s 20(4) of the 1907 English Act to hold that this power was vested in the Court of Criminal Appeal of England and Wales255. Section 20(4) vested in the Court of Criminal Appeal all the jurisdiction that had been vested in the Court of Crown Cases Reserved by the Crown Cases Act 1848256. The House of Lords in Crane was concerned only with the existence of a power which, upon a mistrial, permitted only the quashing of a conviction and order for a retrial. But the Court of Crown Cases Reserved also had the power to quash a conviction and to make no further order. Indeed, unlike the power to grant a venire de novo, which was not expressly contained in the Crown Cases Act and whose existence had divided the members of the Court of Crown Cases Reserved257, s 2 of the Crown Cases Act had conferred an express power "to avoid such Judgment, and to order an Entry to be made on the Record, that ... the Party convicted ought not to have been convicted". Hence, the Court of Criminal 252 Crown Cases Act 1848 (11 & 12 Vict c 78), s 2. Compare R v Parry, Rea and Wright (1837) 7 Car & P 836 at 841 [173 ER 364 at 367]. See also Conway v The Queen (2002) 209 CLR 203 at 210 [10], fn 38. 253 R v Fowler and Sexton (1821) 4 B & Ald 273 at 276 [106 ER 937 at 939], quoted in Conway v The Queen (2002) 209 CLR 203 at 209 [9]. 254 R v Snow (1915) 20 CLR 315 at 324, 351; [1915] HCA 90. 255 [1921] 2 AC 299 at 324, 332, 337-338. 256 11 & 12 Vict c 78. The powers conferred by the Crown Cases Act had been transferred to the High Court of Justice by s 47 of the Supreme Court of Judicature Act 1873 (36 & 37 Vict c 66). 257 See R v Mellor (1858) Dears & B 468 [169 ER 1084]. Edelman Appeal of England and Wales also had power, after a mistrial, to quash the conviction and make no further order258. If the powers of the Court of Crown Cases Reserved were also inherited by the Court of Criminal Appeal in New South Wales as appeal powers, due to being preserved by the Criminal Appeal Act, then there would be a strong argument that the power to quash a conviction without making any other order should be generally applicable. It would be difficult to see why that power, as part of a generalised appellate power, should be confined only to mistrials. To confine the power in that way would treat as immutable the reception of "a procedure which, with the exception of a few cases, has not been in use for over one hundred years and was probably never really understood even when it was in use"259. The distinction between mistrials where a conviction is quashed as a "nullity" and other trials where a conviction is quashed, sometimes described in contrast as an "irregularity", has been attempted to be justified in different ways260. None is satisfactory or clear261. At best, "the line is very thin"262, with the older decisions on nullity perhaps seen today as comparable with some instances of lack of authority and possibly also some serious errors within authority. At worst, it is not a principled distinction in the context of an appeal from a trial in a superior court263. In both instances, the verdict and judgment will have been quashed by the Court of Criminal Appeal, leaving them without effect: "The effect of the reversal of a conviction by proceedings in error has 258 Golathan (1915) 11 Cr App R 79 at 80; King (1920) 15 Cr App R 13 at 14; McDonnell (1928) 20 Cr App R 163 at 164; Wilde (1933) 24 Cr App R 98 at 99; Olivo (1942) 28 Cr App R 173 at 176; Field (1943) 29 Cr App R 151 at 153; R v Heyes [1951] 1 KB 29 at 30. See Cooke, "Venire de Novo" (1955) 71 Law Quarterly Review 100 at 118-120. 259 Friedland, "New Trial after an Appeal from Conviction – Part I" (1968) 84 Law Quarterly Review 48 at 63 (footnote omitted). 260 Munday v Gill (1930) 44 CLR 38 at 60-62; [1930] HCA 20; R v Middlesex Quarter Sessions (Chairman); Ex parte Director of Public Prosecutions [1952] 2 QB 758 at 769; R v Neal [1949] 2 KB 590 at 599; In re Pritchard, decd [1963] Ch 502 at 523- 524; Strachan v The Gleaner Co Ltd [2005] 1 WLR 3204 at 3211-3212 [25]-[26]. 261 See Cooke, "Venire de Novo" (1955) 71 Law Quarterly Review 100; Friedland, "New Trial after an Appeal from Conviction – Part I" (1968) 84 Law Quarterly Review 48. 262 Plowman v Palmer (1914) 18 CLR 339 at 348; [1914] HCA 41. 263 R v Swansson (2007) 69 NSWLR 406 at 417 [76]; see also at 420 [95], 424 [119]; compare at 435 [179]-[180], 437 [191]. See also Deveigne v Askar (2007) 69 NSWLR 327 at 343 [82]; see also at 331 [8]. Edelman long been settled, and the same effect is produced by quashing it, or setting it aside upon a statutory appeal."264 And in both instances, the orders are valid until set aside265. However, the issue of whether a distinction should be drawn between powers concerning mistrials and powers concerning irregularities need not be resolved on these appeals because in New South Wales the Criminal Appeal Act did not preserve, for appeals, the jurisdiction of the Court of Crown Cases Reserved to quash a conviction without further order. Like s 20 of the 1907 English Act, in New South Wales s 23 of the Criminal Appeal Act abolished "[w]rits of error, and the powers and practice now existing in the Supreme Court in respect of motions for new trials, and the granting thereof in criminal cases". But the Criminal Appeal Act had, and has, no equivalent to s 20(4) of the 1907 English Act, upon which the majority of the House of Lords in Crane relied for the preservation of the venire de novo and associated powers. Section 12 of the Criminal Appeal Act, entitled "Supplemental powers of the court", provides in sub-s (1) that the Court of Criminal Appeal "may, if it thinks it necessary or expedient in the interests of justice", exercise specific procedural powers and may also "exercise in relation to the proceedings of the court any other powers which may for the time being be exercised by the Supreme Court on appeals or applications in civil matters". Section 12(1) is similar to s 9 of the 1907 English Act. But it is not an acknowledgement of any inherent jurisdiction of the Court of Criminal Appeal, nor does it permit a cross- pollination of the considerations concerning a venire de novo from civil proceedings to criminal proceedings. As Dixon J said in Grierson v The King266: "The jurisdiction is statutory, and the court has no further authority to set aside a conviction upon indictment than the statute confers. The Criminal Appeal Act of 1912 (NSW) is based upon the English Act of 1907. It does not give a general appellate power in criminal cases exercisable on grounds and by a procedure discoverable from independent sources ... No considerations controlling or affecting the conclusion to be deduced from these provisions are supplied by analogous civil proceedings." 264 Commissioner for Railways (NSW) v Cavanough (1935) 53 CLR 220 at 225; [1935] HCA 45. 265 New South Wales v Kable (2013) 252 CLR 118 at 129 [21]; [2013] HCA 26. See also Bounds v The Queen (2006) 80 ALJR 1380 at 1383 [10]; 228 ALR 190 at 193; [2006] HCA 39. 266 (1938) 60 CLR 431 at 435-436; [1938] HCA 45. Edelman In New South Wales, the dissenting reasoning of Viscount Finlay in Crane must apply: "we must now look only to the provisions of the present Act if there is anything that requires to be set right"267. Indeed, the New South Wales Parliament was cognisant that this would be the case. During debate, one member, Mr Garland KC, after referring to the power to grant a new trial after a mistrial, said that he supported "the proposal that the Appeal Court in their wisdom, when they consider justice would be best served by granting a new trial, shall have power to grant it"268. Conclusion For these reasons, in addition to those of Kiefel CJ and Keane J and those of Nettle and Gordon JJ, I agree with the orders proposed by Kiefel CJ and 267 Crane v Director of Public Prosecutions [1921] 2 AC 299 at 318. 268 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 5 December 1911 at 2312.

HIGH COURT OF AUSTRALIA MWJ AND THE QUEEN APPELLANT RESPONDENT [2005] HCA 74 7 December 2005 ORDER Appeal dismissed. On appeal from the Supreme Court of South Australia Representation: P J L Rofe QC with S C Ey for the appellant (instructed by Mangan Ey and Associates) P F Muscat for the respondent (instructed by Director of Public Prosecutions (South Australia)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Criminal law – Practice and procedure – Trial by judge without a jury – Appellant convicted of three sexual offences against a child – Supposed inconsistencies between the evidence of the complainant and her mother concerning complaints that the complainant made to her mother – Whether the manner in which the trial judge dealt with the supposed inconsistencies involved error. Criminal law – Practice and procedure – Rule in Browne v Dunn – Application of the rule to an accused in a criminal trial – Supposed inconsistencies between the evidence of the complainant and her mother not put to the complainant in cross- the complainant should have been re-called – examination – Whether Consequences for trial judge's decision-making. GLEESON CJ AND HEYDON J. Following a trial before a judge, sitting without a jury, in the District Court of South Australia, the appellant was convicted of three sexual offences against the complainant, who was a child at the time. The three offences allegedly occurred at 10 Jeffries Street, Whyalla Playford, in 1990 or 1991, where the appellant was living with the complainant's mother. There was an alleged earlier offence of a similar nature, said to have occurred at 5 Sutcliffe Street, Whyalla Stuart, between 1986 and 1987. The appellant was acquitted of this charge. The three offences of which the appellant was convicted arose out of a single incident at Jeffries Street. However, evidence was given of other uncharged offences committed earlier at Jeffries Street. The alleged incident at Sutcliffe Street, and the incident at Jeffries Street, which were the subject of the charges, were, according to the complainant, the first and last occasions of sexual abuse to which she was subjected. Where there is alleged to be a history of sexual abuse, it may be that a complainant will find it easiest to remember, and give detailed evidence about, the first and the last occasions on which it occurred. Only three people gave evidence at the trial: the complainant, the complainant's mother and the appellant. The mother gave evidence of complaints made to her. The admissibility of that evidence is not in question in this appeal. The argument in the appeal relates to certain supposed inconsistencies between that evidence and the evidence of the complainant, and to the way those inconsistencies were dealt with at trial. The sequence of complaints was as follows. In 1991, the complainant told her mother that the appellant had tried to have sex with her at Jeffries Street. The complainant's mother gave evidence that she confronted the appellant with the allegation, and he admitted it was true. Many years later, in 2002, the complainant told her mother that, while they lived at Sutcliffe Street, the appellant "used to go into her room at night-time and touch her". The mother gave evidence that she confronted the appellant, who said that the matter had "already [been] worked out between [them]". The appellant in his evidence denied the alleged misconduct and the alleged admissions. The complaints to the mother were said to have been made in general terms. She did not question the complainant in the manner of a police investigator, or a trial lawyer, or seek further particulars as to exactly what happened. In giving evidence about the 2002 complaint, the mother said that she could not remember the exact details of the conversation. The complainant, in her evidence, was asked, and answered, questions about the alleged incident the subject of the charge relating to Sutcliffe Street. She was not asked, either in chief or in cross-examination, whether there were any other instances of sexual abuse at Sutcliffe Street. Counsel for the appellant was aware, from the evidence at committal, that the mother was expected to give evidence of a 2002 complaint about a course of conduct at Sutcliffe Street. She did not ask the complainant whether there were incidents at Sutcliffe Street in addition to that which was the subject of the charge, and of the evidence in chief. The Crown Prosecutor had said, in his opening address, that the complainant "thinks that this is the only occasion when the accused touched her in this way at Sutcliffe Street", but neither counsel raised the question with the complainant in the course of her evidence. The complainant, it should be added, said she was aged about 8 at the relevant time. In brief, the complainant gave no evidence about whether the charged incident at Sutcliffe Street was the only one of its kind at that address. The complainant's mother, who was unclear about the details of the 2002 complaint, described it as a general complaint relating to conduct at Sutcliffe Street, rather than an account of a single and specific incident. There was no direct inconsistency between the complainant's evidence at trial and what, according to her mother, she said in 2002. Counsel for the appellant knew that the mother was going to give evidence of a complaint about a course of conduct at Sutcliffe Street. The fact that she did not cross-examine the complainant about whether there was other abusive conduct at Sutcliffe Street apart from the occasion that was the subject of the charge is hardly surprising. The advantage to be gained from a negative answer was small, and the disadvantage resulting from a positive answer could have been significant. The evidence of the complainant was that the event at Sutcliffe Street was the first occasion on which anything like that had happened. That, perhaps, is why it was the subject of a charge. The complainant was not asked, and she did not say, that nothing like that ever happened again at Sutcliffe Street. In cases of alleged child sexual abuse, where the events allegedly happened many years previously, it may be quite wrong to treat a complainant, who is only asked about a single incident which is the subject of one charge, and who is not asked about other uncharged incidents of a like kind, as intending to imply that the incident about which evidence is given was an isolated incident. Here, the complainant was invited to give evidence, and gave evidence, about uncharged incidents at Jeffries Street. The prosecutor told the judge that the complainant thought that only one incident occurred at Sutcliffe Street. Whether the prosecutor was right or wrong about what the complainant thought is unknown. The complainant did not give evidence, one way or the other, on that topic. To say that the mother's evidence of complaint was inconsistent with the complainant's evidence is incorrect. Indeed, the possibility that, consistently with the complainant's evidence, there might have been a number of incidents at Sutcliffe Street, was part of the reasoning of the trial judge in deciding to acquit the appellant of the charge relating to Sutcliffe Street. He said that "she was not categorical about it being the only time it happened at Sutcliffe Street". He interpreted one answer she gave as possibly implying "that there may have been other occasions about which she has no memory". In order to make good the charge relating to Sutcliffe Street, the prosecution had to establish the date of the offence with sufficient clarity to satisfy the terms of the charge. The trial judge said: "I am convinced ... that the offending did take place and at Sutcliffe Street. However, placing it within the period charged ... is not possible, at least with any conviction, given the necessity to do so beyond reasonable doubt ... If I was convinced that it was a single occasion at Sutcliffe Street, then I would have entertained an application to amend to widen the charge period." The judge said he based his lack of such conviction "on [the complainant's] reserved response to whether there was only the one occasion of improper touching at Sutcliffe Street". He gave a transcript reference. The transcript reference, however, is to the complainant's response to the question whether anything like that had happened before. She was being asked about the first time the appellant had touched her improperly. She was not asked whether anything else like that happened later at Sutcliffe Street. The trial judge recorded an argument by defence counsel to the effect that there was such inconsistency between the complainant's evidence, including some aspects of her evidence about what had happened at Jeffries Street, and the mother's evidence of complaint, that the prosecution must fail entirely on the onus of proof. He referred to a legal argument about the status of the evidence of complaint, and also to the fact that no one had asked the complainant about what she had said to her mother in 2002 concerning Sutcliffe Street. The legal argument was about whether the evidence of complaint should be treated as evidence of a prior inconsistent statement. The judge said that to use the mother's evidence as evidence of a prior inconsistent statement would be unfair because the complainant had never been challenged in cross-examination about the supposed inconsistency. He then said: "Having said all that, resolving this difficulty is unnecessary in this case because it is my view that this submission [ie the submission based on the supposed inconsistency] is only marginally compelling for the following reasons." In substance, the judge concluded, for cogent reasons, that the supposed inconsistencies, including that to which particular attention has so far been directed, did not in truth exist. He said, in that context: "As to the 2002 complaint, I consider that [the mother] was, in recounting that episode, concerned not so much with the details of what was alleged to have happened, but the place where it happened, namely Sutcliffe Street. Further, to find that the Crown case was fundamentally flawed in the way contended for would be to give to the evidence fuelling the submission a cogency which is simply not warranted by the hesitant way in which it was treated by both Crown and Defence counsel." The trial judge's reasoning on this factual issue contains no error. That should be sufficient to dispose of the present appeal, were it not for an argument prompted by some observations made in the South Australian Court of Criminal Appeal in dealing with the appellant's appeal to that Court against his conviction1. In the Court of Criminal Appeal, counsel for the appellant again relied upon the supposed inconsistency concerning what happened at Sutcliffe Street, and upon certain other suggested inconsistencies between the complainant's evidence about what happened at Jeffries Street and the mother's evidence of the complaints concerning conduct at Jeffries Street. Upon analysis of the evidence, and the reasoning of the trial judge, Doyle CJ (with whom Besanko J and White J agreed) concluded that the suggested inconsistencies "were explicable in a manner that did not provide a basis for them to reflect on [the complainant's] credit". There is no error in the reasoning upon which the Court of Criminal Appeal based its decision. However, before expressing that conclusion, Doyle CJ attributed to the trial judge a certain view of the law, which he then corrected. It was what was said in that regard that gave rise to much of the argument in this appeal. In fact, as has already been noted, the trial judge found it unnecessary to resolve what he described as a legal difficulty resulting from the fact that the complainant had not been cross-examined about the suggested inconsistencies, including whether she maintained that there had been only a single incident at Sutcliffe Street. The judge had said that if there had been such an inconsistency, it would have been unfair to use it to impugn the credit of the complainant. She had never been given an opportunity to explain any inconsistency between her evidence and her complaints. The judge said: "I think if the Defence wish to impugn [the complainant] in this way then what is put to the tribunal of fact as achieving this should also have been put to her. I say this conscious that the accused bears no overall 1 R v M,WJ [2004] SASC 345. onus. However, serious unfairness to the complainant arises if the technical view of the rules of evidence [is] applied as I have suggested." Having said that, the judge went on immediately to say that "resolving this difficulty is unnecessary" for the reasons earlier mentioned, that is to say, that the suggestion of significant inconsistencies was without substance. Doyle CJ said that the trial judge "wrongly treated the failure to cross- examine [the complainant] as precluding the use of the inconsistencies to impugn her evidence". That might have been the trial judge's tentative view, but it was a matter that he concluded he did not have to resolve. Nevertheless, Doyle CJ felt he should not let the matter pass without comment. He said: "The fact that the inconsistencies were not put to [the complainant] was something to be taken into account in assessing the weight to be given to the inconsistencies. It was open to [counsel for the appellant] to have [the complainant] recalled for further cross-examination. She did not do that. The consequence is not that the inconsistency should be ignored, it is that the failure to put the inconsistency to [the complainant] that has to be taken into account2." The comments of Doyle CJ did not go either to the actual basis upon which the trial judge decided the case, or to the ultimate ground of decision of the Court of Criminal Appeal. Neither the trial judge nor Doyle CJ made specific reference in their reasons to the "rule of professional practice" discussed by the House of Lords in Browne v Dunn3. Nevertheless, the comments of Doyle CJ, made as they were in passing, became the foundation of an argument directed to the scope of that rule in criminal cases generally. The principle of fair conduct on the part of an advocate, stated in Browne v Dunn, is an important aspect of the adversarial system of justice. It has been held in England4, New South Wales5, South Australia6, Queensland7, and New 2 R v Foley [2000] 1 Qd R 290 at 291. 4 Fenlon (1980) 71 Cr App R 307; R v Lovelock noted in (1997) Criminal Law Review 821. 5 R v Birks (1990) 19 NSWLR 677. 6 R v Manunta (1989) 54 SASR 17. 7 R v Foley [2000] 1 Qd R 290. Zealand8, to apply in the administration of criminal justice, which, as well as being accusatorial, is adversarial. Murphy J, in this Court, even applied it to the conduct of an unrepresented accused9. However, for reasons explained, for example, in R v Birks10, and R v Manunta11, it is a principle that may need to be applied with some care when considering the conduct of the defence at criminal trial. Fairness ordinarily requires that if a challenge is to be made to the evidence of a witness, the ground of the challenge be put to the witness in cross- examination. This requirement is accepted, and applied day by day, in criminal trials. However, the consequences of a failure to cross-examine on a certain issue may need to be considered in the light of the nature and course of the proceedings. In the present case, there was no obligation on trial counsel for the appellant to question the complainant about whether there had been more than one incident of sexual abuse at Sutcliffe Street, and there was no obligation to seek to have the complainant recalled for that purpose. Why would counsel for the appellant want to run the risk of eliciting further evidence of uncharged criminal acts by her client? That, no doubt, left the trial judge in a difficult position when he came to evaluate a criticism (in final address) of the complainant's credibility based on the supposed (although, in truth, non-existent) inconsistencies. It did not mean that counsel could not put her argument to the judge. As Doyle CJ said, it was a matter to be taken into account in assessing the weight to be given to the supposed inconsistencies. In the event, it was the fact that counsel chose (with reason) to leave the evidence in a state of uncertainty that undermined her submission about inconsistency. That was a forensic choice for counsel to make. The appeal should be dismissed. 8 Gutierrez v The Queen [1997] 1 NZLR 192. 9 McInnis v The Queen (1979) 143 CLR 575 at 590-591. 10 (1990) 19 NSWLR 677 at 686-691. 11 (1989) 54 SASR 17 at 23. Kirby Callinan GUMMOW, KIRBY AND CALLINAN JJ. This appeal raises questions as to the obligations of the prosecution and the defence with respect to the calling and cross-examination of witnesses. The charges The appellant was charged with several offences of sexual misconduct: on one count, of unlawful sexual intercourse between 7 July 1986 and 31 December 1987 at Sutcliffe Street at Whyalla Stuart, and, on three others, of unlawful sexual intercourse, indecent assault and attempted unlawful sexual intercourse between 1 January 1990 and 31 December 1991 at Jeffries Street, Whyalla Playford. As will appear, the specification of the address in each instance is of particular relevance to the issues raised by the appeal. Facts and previous proceedings The complainant was born on 6 July 1978, and at the time of the trial was 25 years old. In 1986 her mother, and the man whom she had married in 1981, separated. They were then living at Sutcliffe Street, Whyalla Stuart. In 1987 the appellant met the complainant's mother and moved into the house at that address. In May 1989, the appellant, the complainant and two of her siblings and her mother moved into a house at Jeffries Street, Whyalla Playford. Although the offences constituting three of the counts were alleged to have occurred on the same day at 10 Jeffries Street, the last occasion of the appellant's alleged offending, numerous other allegations were made by the complainant of sexual abuse, not the subject of any of the charges, at that address. Because the complainant's mother worked as a cook at a restaurant, sometimes during the day and sometimes at night, the complainant was often left in the care of the appellant. The appellant elected to be tried by a judge (Smith DCJ) sitting alone pursuant to s 7(1) of the Juries Act 1927 (SA)12. The prosecutor, in opening the 12 Section 7(1) provides: "7 Trial without jury (1) Subject to this section, where, in a criminal trial before the Supreme Court or the District Court – the accused elects, in accordance with the rules of court, to be tried by the judge alone; and (Footnote continues on next page) Kirby Callinan case on the first of the counts said that the complainant, "thinks that this is the only occasion when the accused touched her in this way at Sutcliffe Street". When she came to give her evidence on this count the complainant confined her complaint fairly clearly to one event: "Q. At Sutcliffe Street, did anything unusual occur between you and [the appellant]? Yes. Q. Whereabouts were you when that occurred? I was in bed at the time. Do you recall whether anybody else was in the bedroom? I think K, but no-one else. [K was a sister of the complainant.] At what time of the day or night did something unusual occur? I don't know the time I was awoken. It was night-time. It was definitely night-time. Are you able to say whether it was light or dark outside? It was dark. Do you know whether K was awake or asleep? She was asleep. Q. What about you; do you remember what you had done that night before you went to bed? How old were you? Around eight. the presiding judge is satisfied that the accused, before making the election, sought and received advice in relation to the election from a legal practitioner, the trial will proceed without a jury." Kirby Callinan Can you tell us what happened? I woke up and somebody was laying in my bed. I was facing the wall and I rolled over – because I had been awoken, I thought my mum must have got home from work, so I said her name. It was [the appellant] there. I felt him remove his finger from inside me and he told me that mum would be home soon and he left. Had anything like this happened before? No, not that I know of." (Emphasis added) By contrast, in relation to the appellant's conduct at Jeffries Street, the complainant spoke of a multiplicity of acts of sexual misconduct over a long period: "Q. Can you describe what happened at Jeffries Street? Take your time. It might help if I ask you this: at Jeffries Street, was there one occasion or more than one occasion where something unusual went A. There was more. Q. You've described sexual touching occurring at Sutcliffe Street. Was there more sexual touching at Jeffries? A. Yes. Q. Are you able to say on how many occasions [the appellant] touched you at Jeffries Street? A. No. It happened too often. Q. How regularly did it occur at Jeffries Street? A. At the start, not as many, but sort of as time went on, it became a more regular thing; at least a couple of times a week. Q. This occurred when you were aged about 11, do you think? A. Up until then, yes. Like I said, a regular thing. Q. Over what period of time did this occur regularly? A. Like I said, it started – I don't know when it was that it started. We moved, I just sort of noticed it started to happen more and more. Kirby Callinan Q. Can I just check your school year. I think you said you moved to Jeffries Street at the beginning of '89; that's right, from your memory? A. Yes. Q. You commenced grade 6 in '89. A. Yes. Q. You turned 11 in the middle of 1989. A. Yes. Q. Either by referring to your grade or your age, can you tell us how old you were while this occurred regularly, or what grades you were in at school? A. Through year 6 and 7. Q. Year 6 and 7 were in 1989 and 1990. A. Yes. Q. Can you give us some detail about the things that happened to you at Jeffries Street? A. That happened on a regular basis? Q. Yes." The complainant's mother who was called by the prosecutor gave evidence, over objection by the appellant, of statements made by her daughter to her with respect to the appellant's conduct at Sutcliffe Street. The statements were readily capable of being construed as inconsistent with the complainant's own evidence that only one offence had occurred at that address. That an inconsistency would arise once the mother's evidence as to her daughter's statements was received, was apparent to all. This was relevantly the mother's evidence: "Q. Do you remember what she told you about what happened at Sutcliffe Street. You have used the words 'interfered with'; do you remember her words? She told me that he used to go into her room at night-time and touch her. Kirby Callinan Q. Did you infer from that that it was sexual touching? A. Yes. Q. Did you speak to [the appellant] about that in early 2002? A. Yes. Q. How did that come about? A. When [the complainant] told me, [the appellant] wasn't home at the time. I was very upset, so I phoned him. I was yelling at him over the phone. He told me not to scream because he was sitting near people in a bar and they could hear what I was saying, so I said 'You'd better come home', which he did. He came home. Q. What did you say to [the appellant] when he came home? I asked him about all the things that [the complainant] had told me. He said 'We've already gone through all this' and I said 'No, not' – 'I didn't know about all this previous'. Q. Do you remember whether or not you mentioned Sutcliffe Street to [the appellant]? A. Yes. Q. What did he say about events at Sutcliffe Street? A. He told me that he'd already – that it was already sorted out and worked out between us, that I'd already known about that, and I said 'No, I only knew about the incident in Jeffries Street', and he said 'No', he said 'It's already discussed', and I said 'Well, [the complainant] can't get over this', and he said 'Tell her to come around any time she likes and I'll talk it through with her and I'll try to help her through it'." The appellant submitted at the trial that the complainant's evidence of an instance of sexual abuse only at Sutcliffe Street was so different from the evidence of her mother of the complainant's assertions to her of several such instances at that address, that the conflict between them "constituted such a fundamental inconsistency that the Crown case simply could not discharge its onus". The trial judge dealt with the submission in this way13: 13 R v WJM [2004] SADC 75 at [80]-[85]. Kirby Callinan "In grappling with this submission I need to remind myself about the admissibility of the evidence here involved. [The complainant] said in evidence that in 1991 she complained to her mother in the following terms: 'I told her that [the appellant] had been touching me'. She explained that she told her mother it was sexual touching. She was not cross examined about this. What she said, on its face, cuts across [the submission of counsel for the appellant at trial] ... because it implies more than one incident of sexual impropriety at Jeffries Street. As to the content of the second complaint to her mother concerning what happened at Sutcliffe Street in early 2002, there was no evidence directly from [the complainant]. As a matter of strict principle the content of [the complainant's] complaints to her mother, both as to the truth of them and also as to the fact of them, are inadmissible. Firstly, the fact of what was said by [the complainant], either from her or from her mother, cannot be received by me as evidence going to her consistency and credibility because the complaint is not a 'recent complaint'. Further, the contents of the complaints, as deposed to either by [the complainant] or her mother, cannot be received for their truth because to do so would offend against, respectively, the rule against self corroboration and hearsay. So is it the case that in weighing up the submission I am confined to considering only what [the complainant's mother] says was the content of the complaint? In my view, this is unfair to the witness whose credit is being impugned, namely [the complainant]. The submission is effectively a plea that I should use the statements made by [the complainant] as deposed to by her mother as prior inconsistent statements without the witness whose credit is impugned thereby, namely [the complainant] being given an opportunity to address the alleged inconsistency. Further, I was told by counsel for the Crown ... that the content of the statements of complaint were before me only to make sense of the alleged admissions of the accused." There then followed this paragraph which betrays a misapprehension as to an accused's position and obligations in a criminal trial14: 14 [2004] SADC 75 at [86]. Kirby Callinan "I think if the Defence wish to impugn [the complainant] in this way then what is put to the tribunal of fact as achieving this should also have been put to her. I say this conscious that the accused bears no overall onus. However, serious unfairness to the complainant arises if the technical view of the rules of evidence are applied as I have suggested." "Having said all that, resolving this difficulty is unnecessary in this case because it is my view that this submission is only marginally compelling for the following reasons. That [the complainant] conveyed to her mother in 1991 only that the accused attempted to have sexual intercourse with her at Jeffries Street when her evidence alleged other sexual activity, whilst inconsistent is neither inexplicable nor alarming. After all, [the complainant] was then only 12 or 13 years old. She had on her evidence tolerated an ongoing regime of sexual touching commencing in 1987 and increasing in frequency. However, the single activity which immediately preceded the complaint was the first time she had been hurt by the accused when he attempted to insert his penis into her vagina. It was the last time on [the complainant's] evidence that the accused had sexually abused her. She said it 'hurt a lot' so much so, for the first time in her encounters with the accused, she cried and pushed him away. So it is little wonder she reported that to her mother. Indeed, [the complainant's mother] said that [the complainant] was 'scared' when she came to her. The fact that [the complainant] volunteered no further information about the alleged long history of abuse is again not surprising. It is not unreasonable to infer that she could not tolerate this new hurtful abuse. Further, her mother did not seek further detail from her. In my view, there would be an understandable reluctance on the part of the child to volunteer the long history of distasteful happenings to her mother who plainly liked the accused. As to the 2002 complaint, I consider that the witness [the complainant's mother] was, in recounting that episode, concerned not so much with the details of what was alleged to have happened, but the place where it happened, namely Sutcliffe Street. Further, to find that the Crown case was fundamentally flawed in the way contended for would be to give to the evidence fuelling the submission a cogency which is simply 15 [2004] SADC 75 at [87]-[89]. Kirby Callinan not warranted by the hesitant way in which it was treated by both Crown and Defence counsel. Then [counsel for the appellant] asked why in 1991 the 13-year-old [complainant] did not make full disclosure to her mother but only complained of attempted sexual intercourse. Again, I do not regard that as a compelling indication of unreliability. I repeat that [the complainant's mother] neither sought nor waited for any detail but immediately went to confront the accused. It is probably not without significance that the last offence on [the complainant's] evidence hurt her. [The complainant's mother], I accept, was in love with the accused. This was plainly not welcome news to her and [the complainant] must have been aware of that." (Original emphasis) The trial judge nonetheless acquitted the appellant on the count relating to Sutcliffe Street16: "I am convinced, based on my acceptance of [the complainant's] evidence, and the evidence of her mother, that the offending did take place and at Sutcliffe Street. However, placing it within the period charged, namely 7th July 1986 and 31st December 1987, is not possible, at least with any conviction, given the necessity to do so beyond reasonable doubt and bearing in mind the warning. If I was convinced that it was a single occasion at Sutcliffe Street, then I would have entertained an application to amend to widen the charge period; but I am not so convinced, based on [the complainant's] reserved response to whether there was only the one occasion of improper touching at Sutcliffe Street. So, Count 3 is not proved beyond reasonable doubt." (Original emphasis) His Honour however convicted the appellant on the other three counts17: "I am satisfied that the Crown have proved beyond reasonable doubt Counts 4, 5 and 6. Necessarily I am convinced that there is no reasonable possibility that the accused's denials of the offending are true. It is not incumbent upon me to identify the central evidence upon which I act and the basis upon which I prefer the evidence of [the complainant] and [the complainant's mother] to that of the accused18. 16 [2004] SADC 75 at [99]. 17 [2004] SADC 75 at [104]-[106]. 18 See R v Keyte (2000) 78 SASR 68 at 80, 81 per Doyle CJ. Kirby Callinan What I have said of the Defence contentions indicates some of my views. Further to that, I indicate that the evidence of [the complainant] and [the complainant's mother] had a cohesive consistency about it and a clear ring of truth to it. The admissions by the accused were an important part of the Crown case and were important to my considerations. [The complainant's mother's] evidence of the 1991 admission was not only itself convincing but also it was supported by the fact of and the circumstances surrounding the aborted trip to Mildura. The accused was driven, falsely, to claim that the trip to Mildura was motivated by [the complainant's mother's] wish to review their relationship, rather than a conviction, given the admission that her daughter's complaints were justified. I accept [the complainant's mother's] retort that the relationship was otherwise good in 1991. The engagement supports all that. She said there had been previous talk of marriage. Again the accused denied, falsely, that the confrontation in about March 2002 was about [the complainant's] further allegations of sexual misconduct at Sutcliffe Street but claimed it was about [the complainant's mother's] disenchantment with the property settlement. Again, I accept the evidence of [the complainant's mother] that such was not the case. The sudden angry summonsing of the accused from the hotel does not fit in with this. [The complainant's mother] said, and I accept it, that whilst the break up was not pleasant she left on 'good terms'. Certainly, whilst the understandable anger provoked by the accused's infidelity and perhaps even the property settlement was capable of providing a motive for a false accusation, what emerged from the accused's evidence and the cross-examination of [the complainant] and [the complainant's mother] failed to establish as a reasonable possibility that provoked by such matters [the complainant] and her mother fabricated the allegations. Indeed, the responses of [the complainant] and [the complainant's mother] to the penetrating cross-examination served to reinforce my views about the cogency of the Crown case, given the need for careful scrutiny. Finally, I accept that a witness's demeanour can be an elusive aid to credibility and reliability. However, after the most careful scrutiny I am satisfied that both [the complainant] and [the complainant's mother] were patently credible and save for the matters addressed by me in relation to Count 3 they were reliable." The appeal to the Court of Criminal Appeal of South Australia The appellant unsuccessfully appealed to the Court of Criminal Appeal of South Australia (Doyle CJ, Besanko and White JJ). Their Honours' reasons for dismissing the appeal were given by Doyle CJ (Besanko and White JJ agreeing). Kirby Callinan In that Court the appellant repeated the submission first made at the trial, that the inconsistency between the complainant's and her mother's evidence about the occasions of sexual abuse at Sutcliffe Street, was a fundamental one and of such significance as to undermine the foundation for all of the convictions. The Chief Justice accepted that the complainant's evidence was of the commission of one offence only at Sutcliffe Street. His Honour did not doubt that, by contrast, the complainant had sworn to a multiplicity of occasions of sexual misconduct at Jeffries Street. His Honour also accepted that the complainant's mother's evidence at the trial was of several complaints to her by the complainant of numerous acts of sexual abuse at Sutcliffe Street19: to rely on "I agree with [counsel for the appellant's] submission that the defence was entitled inconsistency between [the the complainant's] evidence about [the appellant's] conduct and her the complaints, and [the complainant's mother's] evidence about complaints. The fact that the evidence of the complaints was led from [the complainant] merely to explain [the complainant's mother's] response does not mean that the evidence of [the complainant's mother] cannot be used to weaken [the complainant's] evidence, or [the complainant's mother's] evidence. The evidence by [the complainant's mother] about [the complainant's] complaints is evidence of statements by [the complainant] inconsistent with her evidence about [the appellant's] conduct. The defence was entitled to rely on those inconsistencies to attack [the complainant's] credit. The fact that the inconsistencies were not put to [the complainant] was something to be taken into account in assessing the weight to be given to the inconsistencies. It was open to [counsel for the appellant] to have [the complainant] recalled for further cross-examination. She did not do that. The consequence is not that the inconsistency should be ignored, it is that the failure to put the inconsistency to [the complainant] that has to be taken into account20. I consider that the Judge erred in deciding that [the complainant's mother's] evidence could not be used as evidence of statements by [the complainant] inconsistent with her evidence at trial." 19 R v M,WJ [2004] SASC 345 at [66]-[69]. 20 R v Foley [2000] 1 Qd R 290. Kirby Callinan His Honour summarised the position in this way21: "In the end the challenge to the Judge's verdicts comes down to the fact that in deciding that the inconsistencies between [the complainant's] evidence at trial about [the appellant's] conduct and her evidence and that of [the complainant's mother] about her complaints, the Judge did not identify and deal with all aspects of the inconsistencies. The same applies in relation to the Judge's consideration of [the complainant's mother's] evidence of admissions by [the appellant]. But that has to be balanced against the fact that the Judge dealt with a number of aspects of the inconsistencies, and clearly was persuaded by other matters upon which he was entitled to rely. The Judge wrongly treated the failure to cross- examine [the complainant] as precluding the use of the inconsistencies to impugn her evidence. But as to that my view is that if one accepts that the inconsistencies were explicable in a manner that did not provide a basis for them to reflect on [the complainant's] credit (as the Judge actually decided), there is nothing of significance in the point." Doyle CJ concluded as follows22: "The ultimate question is whether the failure of the Judge to consider all aspects of what I will call the inconsistency argument has given rise to a miscarriage of justice. The matter can be put in three different ways. First, has it resulted in the Judge failing to consider a significant aspect of the defence case? Second, is there a real risk of the Judge having been led into error in his ultimate conclusion by his failure to consider the relevant matters? Third, if the Judge had summed up to the jury along the lines of his reasons, raising only the matters that he identified in his reasons, would the Court conclude that the jury had been misdirected? I agree that the inconsistencies were a significant aspect of the defence case. But I am satisfied, in the end, that the Judge has considered the substance of the defence case on this issue. [Counsel for the appellant] rightly identified aspects of the argument to which the Judge has not referred, but assessing the Judge's reasons as a whole I consider that he has sufficiently dealt with this aspect of the defence case. 21 R v M,WJ [2004] SASC 345 at [79]. 22 R v M,WJ [2004] SASC 345 at [84]-[88]. Kirby Callinan As to the second question, I do not agree that the matters that the Judge failed to deal with are of such significance that there is a real risk of the Judge's ultimate conclusion being flawed. Once again, reviewing the Judge's reasons as a whole I am satisfied that his conclusion could not have been affected by the aspects of the argument to which he did not refer. As to the third question, bearing in mind that it is not necessary for a judge to spell out to the jury all aspects of the factual issues that they have to decide, I am not persuaded that a direction to the jury that brought to the jury's attention the matters that the Judge dealt with, and did not refer to the aspects of the submissions that he overlooked, would be an erroneous direction on the facts. Conclusion For all those reasons I consider that the omissions in the Judge's reasons are not sufficient to lead to the conclusion that the verdict should be set aside. The appeal should be dismissed." The appeal to this Court The appellant's grounds of appeal to this Court are variants of two propositions: that the Court of Criminal Appeal erred in the application of the principle established in Browne v Dunn23, and that the inconsistency to which reference has been made, invalidated the convictions. The former proposition is correct, the latter is not. Something should first be said of the trial judge's criticism of the appellant's failure, in effect, to give the complainant an opportunity of explaining away the inconsistency arising out of her mother's evidence. The criticism is ill- founded for these reasons. The complainant had already given her evidence when the mother gave her evidence. It was not for the appellant to know and anticipate, by cross-examining the complainant, what the mother would say about the complainant's assertions of complaints of multiple offences at Sutcliffe Street. It was not for the appellant to iron out inconsistencies in the case for the prosecution. Secondly, his Honour erred in holding that if there were competition between the avoidance of unfairness to the complainant and a "technical view of the rules of evidence"24 (whatever that in the circumstances means), the former must prevail. It is not for a judge to depart from the rules of 24 R v WJM [2004] SADC 75 at [86]. Kirby Callinan evidence on such a basis. The rules are designed to ensure fairness to all, certainly not least, to an accused in a criminal trial. We should next say something about the rule in Browne v Dunn, which, in substance, both the trial judge and the Chief Justice thought should be applied here against the appellant, its application in criminal cases generally, and his Honour, the Chief Justice's reference to the appellant's counsel's failure to seek to have the complainant recalled for further cross-examination. The rule is essentially that a party is obliged to give appropriate notice to the other party, and any of that person's witnesses, of any imputation that the former intends to make against either of the latter about his or her conduct relevant to the case, or a party's or a witness' credit. One corollary of the rule is that judges should in general abstain from making adverse findings about parties and witnesses in respect of whom there has been non-compliance with it. A further corollary of the rule is that not only will cross-examination of a witness who can speak to the conduct usually constitute sufficient notice, but also, that any witness whose conduct is to be impugned, should be given an opportunity in the cross-examination to deal with the imputation intended to be made against him or her. An offer to tender a witness for further cross-examination will however, in many cases suffice to meet, or blunt a complaint of surprise or prejudice resulting from a failure to put a matter in earlier cross-examination. In this case, the appellant was confronted with a forensic dilemma: whether to seek to have the mother's evidence of her daughter's assertions of repeated misconduct at Sutcliffe Street excluded by reason of its prejudicial effect, or deliberately to leave it untouched to provide a basis for a submission that a fundamental inconsistency tainted the whole case. In the event the appellant chose the former. In that endeavour he failed, but was still able, albeit unsuccessfully, to rely on it as setting up a significant inconsistency. On no view was the appellant obliged however to seek to have the complainant recalled as a condition of his reliance upon the inconsistency which had emerged in the case for the prosecution. Reliance on the rule in Browne v Dunn can be both misplaced and overstated. If the evidence in the case has not been completed, a party genuinely taken by surprise by reason of a failure on the part of the other to put a relevant matter in cross-examination, can almost always, especially in ordinary civil litigation, mitigate or cure any difficulties so arising by seeking or offering the recall of the witness to enable the matter to be put. In criminal cases, in many jurisdictions, the salutary practice of excusing witnesses temporarily only, and on the understanding that they must make themselves available to be recalled if necessary at any time before a verdict is given, is adopted. There may be some circumstances in which it could be unfair to permit the recalling of a witness, but in general, subject to the obligation of the prosecution not to split its case, and to present or make available all of the relevant evidence to an accused, the course Kirby Callinan that we have suggested is one that should be able to be adopted on most occasions without injustice. The obligation of the prosecution to present its whole case in chief and the existence of the unavoidable burden of proof carried by the prosecution are of particular relevance here. Doyle CJ was critical of the appellant for not putting the inconsistency between the complainant and her mother, in turn giving rise to an internal inconsistency in the complainant's account, to the complainant. The criticism does not give due weight to the obligations of the prosecution to which we have referred. It is not for the defence to clear up, or resolve inconsistencies in the case for the prosecution. As soon as the inconsistency emerged, and the trial judge rejected the appellant's objection to the evidence intended to be adduced from the complainant's mother, it was open for the prosecution to offer to tender the complainant for further cross-examination. Had that happened it would then, and only then have been for the appellant, to decide whether to embrace the offer or not. If he had not, then and only then would the criticism that the Court of Criminal Appeal made of his conduct have been valid. The position of an accused who bears no burden of proof in a criminal trial cannot be equated with the position of a defendant in civil proceedings. The rule in Browne v Dunn can no more be applied, or applied without serious qualification, to an accused in a criminal trial than can the not dissimilar rule in Jones v Dunkel25. In each case it is necessary to consider the applicability of the rule (if any) having regard to the essential accusatory character of the criminal trial in this country. That the criticism by the Chief Justice was not warranted does not mean however judge's misapprehension as to the application of the rules of evidence to which we have referred dictate that result. that the appeal should succeed. Nor does the trial The inconsistency related to one count only, and on that, the appellant was acquitted. It is not difficult to treat as quite separate the offences alleged at each of the addresses. These were discrete events at different times and different places, opportunistically committed in the different circumstances of each of the occasions. It is easy to understand that those that occurred at Jeffries Street might be more vivid and precisely recalled than the one at Sutcliffe Street which was alleged to have been committed years before and when the complainant was younger. Furthermore, as both the trial judge and the Court of Criminal Appeal in effect held, the inconsistency was not in any event so fundamental as to undermine the strong case on the counts on which the appellant was convicted. 25 (1959) 101 CLR 298. See the discussion of this case in RPS v The Queen (2000) 199 CLR 620 at 632-633 [27]-[29] and Dyers v The Queen (2002) 210 CLR 285 at Kirby Callinan The appellant has not made out that he suffered such a miscarriage of justice as to warrant the quashing of the convictions26. Order We would dismiss the appeal. 26 Section 353(1) of the Criminal Law Consolidation Act 1935 (SA) provides: "The Full Court on any such appeal against conviction shall allow the appeal if it thinks that the verdict of the jury should be set aside on the ground that it is unreasonable or cannot be supported having regard to the evidence, or that the judgment of the court before which the appellant was convicted should be set aside on the ground of a wrong decision on any question of law, or that on any ground there was a miscarriage of justice, and in any other case shall dismiss the appeal; but the Full Court may, notwithstanding that it is of the opinion that the point raised in the appeal might be decided in favour of the appellant, dismiss the appeal if it considers that no substantial miscarriage of justice has actually occurred."

HIGH COURT OF AUSTRALIA AUSTRALIAN BROADCASTING CORPORATION APPELLANT AND RESPONDENT Australian Broadcasting Corporation v O'Neill [2006] HCA 46 28 September 2006 ORDER Appeal allowed. Set aside the order of the Full Court of the Supreme Court of Tasmania made on 29 August 2005 and, in its place, order that: the appeal be allowed; and (b) Order 1 of the orders made by Crawford J on 22 April 2005 be set aside insofar as it applies to the appellant. The appellant to pay the respondent's costs of the appeal to this Court. On appeal from the Supreme Court of Tasmania Representation: R J Whitington QC with A T S Dawson for the appellant (instructed ABC Legal Services) P W Tree SC with J E Green for the respondent (instructed by Hobart Community Legal Service) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Australian Broadcasting Corporation v O'Neill Defamation – Injunctions – Interlocutory injunctions – Interlocutory injunction to restrain publication – Appellant restrained from broadcasting documentary film making allegations including that respondent suspected of having committed notorious unsolved crime – Principles on which interlocutory injunction to restrain publication granted – Relevance of "flexible" or "rigid" approaches to granting interlocutory injunctions – Significance of value of free speech – Significance of avoiding "trial by media" – Whether relevant that only nominal damages likely to be awarded – Significance of status of respondent as convicted life prisoner. Injunctions – Interlocutory injunctions – Defamation – Whether general principles governing grant of interlocutory injunctions to restrain wrongs apply to interlocutory applications to restrain publication of allegedly defamatory matter – Relationship between Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 and American Cyanamid Co v Ethicon Ltd [1975] AC 396 – Whether respondent had made out an entitlement to an interlocutory injunction within the principles established by Beecham – Whether Full Court and primary judge shown to have erred in granting of interlocutory injunction. Defamation – Injunctions – Jurisdiction to grant interlocutory injunction to restrain publication of allegedly defamatory matter – Nature of equitable jurisdiction to grant injunctions to restrain publication – Effect of Common Law Procedure Act 1854 (UK) – Effect of Judicature Act 1873 (UK). Appeal – Interlocutory injunction in defamation proceedings – Necessity of demonstrating error in order to justify intervention by High Court – Whether error shown in approach and conclusion of Full Court and primary judge. Defamation – Defences – Justification – Whether avoiding "trial by media" relevant to determination of "public benefit" required by Defamation Act 1957 (Tas) s 15. Words and phrases – "public benefit", "public interest". Common Law Procedure Act 1854 (UK), ss 79, 82. Judicature Act 1873 (UK), s 25(8). Supreme Court Civil Procedure Act 1932 (Tas), s 11(12). Defamation Act 1957 (Tas), s 15. GLEESON CJ AND CRENNAN J. This appeal concerns the application, in what has long been recognised as the special context of a defamation action1, of the principles according to which the discretionary remedy of an interlocutory injunction is granted. The proceedings were brought in the Supreme Court of Tasmania. The provision of the Supreme Court Civil Procedure Act 1932 (Tas) (s 11(12)) empowering the grant of injunctive relief, including interlocutory injunctions, was considered recently by this Court in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd2. The general principles according to which courts grant such relief were there explained3. That was not a defamation case. The central issue concerned the nature of the right which the plaintiff sought to vindicate in the litigation; a matter that arose in the context of considering whether the plaintiff was able to show a sufficient colour of right to final relief to justify the grant of an interlocutory injunction. That question, together with the likelihood of injury for which damages would not be an adequate compensation, and wider considerations of the balance of convenience, goes to the justice and convenience of granting interlocutory relief. In the present case, there is no doubt about the nature of the legal right which the respondent seeks to vindicate in the action, although the existence of that right is disputed. The threatened publication In 1966, three children, aged nine, seven and four, members of the Beaumont family in South Australia, disappeared. The police suspect that the children were murdered, but investigations so far have been inconclusive. It is one of Australia's most notorious unsolved crimes. In November 1975 the respondent was convicted of the murder, in Tasmania, in February 1975, of a young boy whom he had abducted. He was sentenced to imprisonment for life. In May 1975, in an interview with Tasmanian police, the respondent confessed to the murder in April 1975 of another young boy. Following the conviction for the February 1975 murder, and the imposition of the life sentence, the Tasmanian prosecuting authorities announced that they did not intend to proceed with charges in relation to the April 1975 occurrence. In the Full Court of the Supreme Court of Tasmania, in the present proceedings, Slicer J said that it was open on the evidence to 1 Bonnard v Perryman [1891] 2 Ch 269 at 284. (2001) 208 CLR 199. (2001) 208 CLR 199 at 216-218 [8]-[16], 231-232 [59]-[61], 239-248 [86]-[105]. Crennan conclude that there was a "high likelihood" that the appellant, if necessary, would be able to prove the respondent's guilt of the second murder. Since at least 1999, Mr Davie, a former police officer, who was joined as a defendant in the present proceedings but who has taken no part in the appeal, has been investigating what he claims to be a connection between the respondent and the disappearance of a number of missing children, including the Beaumont children. Mr Davie has made allegations about the respondent which have been widely reported in the Tasmanian media. Mr Davie, and another defendant, Roar Film Pty Ltd (which, like Mr Davie, has not participated in this appeal) produced a documentary film called "The Fisherman", under contract with the appellant (a national television broadcaster). The film was displayed at the Hobart Film Festival in January 2005. There is an issue as to whether the appellant was involved in that publication, but that is not the publication with which this appeal is concerned. The media and political response was summarised by Crawford J, at first instance, as follows: "The defendants rely on the fact that similar, but far more detailed, imputations to the ones of which the plaintiff complains have been made to the public in recent times. Copies of articles in the Hobart based Mercury newspaper on 26, 27, 28, 29 and 30 January 2005, and 6, 7, 8, 11, 12, 13 and 15 April 2005, in addition to the one on 3 January 2005, to which I have already referred, were tendered. They contained many statements concerning the plaintiff, many of which are likely to have been highly defamatory. I will refer to some of them. The Tasmanian Commissioner of Police was reported as saying that the plaintiff could be responsible for the kidnapping of the Beaumont children in 1966 and that he was convinced that the plaintiff had murdered more children than the one of which he was convicted in 1975. The Commissioner was reported as saying: 'He's got a real lust for kiddies. He's a multiple murderer.' It was also reported that the plaintiff was wanted in Victoria on 12 charges involving the abduction and sexual assault of four boys in the 1970s and that the Commissioner had said that he was also a suspect concerning the disappearance and presumed murders of several boys and girls around Australia before 1974. However, South Australian police were reported as saying that they had found no evidence to support the plaintiff's involvement in the disappearance of the Beaumont children and that he had been discounted from their inquiries. Notwithstanding those denials, the Tasmanian Commissioner was reported as maintaining what he had said and of saying 'he's killed plenty of other people', 'he's a multiple murderer' and 'he would kill other kids, there is no doubt in the world if he gets out', adding 'we discovered that in the fortnight prior to the second boy disappearing that there were probably four if not five other children picked up, taken to remote locations, and had managed to escape the person who abducted them and get away relatively injury free'. He Crennan described the plaintiff as 'cold blooded, psychopathic, a prolific liar ... would seek gratification at all costs ... no remorse, no emotion, no guilt.' Mr Davie was reported as saying 'I know O'Neill has told other people he was responsible for killing the Beaumonts', referring to a denial by the plaintiff as a refusal to confess. Mr Davie was also reported to have said that the plaintiff had murdered more children than the one for which he was gaoled for life in 1975. A journalist, who was said to have worked with Mr Davie on the documentary, was reported to have made similar statements, adding that she was convinced that she knew where the Beaumont children were buried and that she wanted an investigation into the murders she believed the plaintiff had committed before being imprisoned. the Attorney-General Politicians became involved in the newspaper publicity. The Opposition justice spokesman called for the plaintiff to be immediately moved from the Gaol Farm to the security of Risdon Prison, demanding that safety of O'Neill's 'guarantee accommodation arrangements to the people of the Derwent Valley'. The Attorney-General was reported as saying that such calls were 'scandalous'. The Opposition spokesman was then reported accusing the Attorney- General of 'breathtaking arrogance and potential recklessness' and challenging the Attorney-General to state publicly that she was personally satisfied that housing the plaintiff at Hayes Prison Farm posed no risk to the community. the It was reported in the Mercury on 8 February 2005 that the plaintiff was prepared to meet a reporter to establish pre-interview guidelines and to have an article based on an acceptable level for him, but the Director of Prisons prohibited the meeting. A reference was made in the Mercury to a political storm having erupted concerning a day-release program for prisoners which had allowed the plaintiff to fish for trout in the Derwent River accompanied only by his pet dog. The Opposition spokesman then called for a representative of victims of crime to be a member of the Parole Board for 'appropriate balance', to which the Attorney-General retorted that the suggestion was insulting to existing members of the Board. On 11 April 2005, the Mercury reported a claim by a man identified as Lionel, who stated that he had been picked up by the plaintiff in a car when a 10 year old and had escaped from his clutches. On 7 April 2005, the Mercury newspaper published having received a letter from the plaintiff's lawyer complaining that the Mercury was attempting to keep him in custody through trial by media and that he considered it to be totally irresponsible and grossly unfair that he was Crennan being persecuted 30 years after his conviction. His lawyer said that he believed that he deserved a second chance if the Parole Board deemed him suitable for release." The facts recited by Crawford J show the level of media and political attention to the respondent over the period between early January and mid-April 2005. The Tasmanian Commissioner of Police was reported as describing the respondent as a "multiple murderer", with "a real lust for kiddies". The respondent's custodial situation became a political issue. This was all before the publication sought to be restrained in these proceedings. The appellant intended to broadcast "The Fisherman" nationally on 28 April 2005. On 15 April 2005, the respondent commenced, in the Supreme Court of Tasmania, an action for defamation against the appellant, Roar Film Pty Ltd, and Mr Davie. The respondent claimed damages, and permanent injunctive relief. The respondent also applied for interlocutory relief to prevent the appellant from broadcasting the documentary pending the hearing of the action. The application was heard by Crawford J. It was successful. It is that matter that is the subject of this appeal. It is not suggested that there are any current criminal proceedings against the respondent or that any such proceedings are presently in contemplation. In particular, so far as appears from the evidence, there is no present intention on the part of any prosecuting authority to charge the respondent with offences in relation to the Beaumont children, or any other children. No issue of contempt of court arises. This consideration is relied upon, in different ways, by both sides in argument. The appellant says that there is no question, in the circumstances, of jeopardising the fairness of a criminal trial because, so far as presently appears, there will be no such trial. The respondent says that this makes his position all the worse; he will face trial by media, with all the unfairness and injustice that entails. The proceedings in the Supreme Court of Tasmania The application for interlocutory relief was heard by Crawford J on 20 and 21 April, and judgment was delivered on 22 April 2005. Up to that time, no statement of claim had been filed. Indeed, Crawford J did not see the documentary. The application was conducted on the agreed basis that the documentary was capable of conveying the following imputations: That the respondent is a suspect in the disappearance of the Beaumont children. That the respondent is a suspect in the murder of the Beaumont children. Crennan That the respondent was a multiple killer of children. It was acknowledged in argument in this Court that there are difficulties with the form of those imputations. The case was argued before Crawford J on the basis that, at trial, the appellant will rely upon a defence of justification which, under the Defamation Act 1957 (Tas) ("the Defamation Act")4, meant truth and public benefit (s 15). What exactly would the appellant need to show was true? What does it mean to say that the respondent is a suspect? Suspected by whom? Obviously, he is suspected by Mr Davie. Perhaps it can be shown that he is suspected by other people as well. On the evidence, the Tasmanian Commissioner of Police may be one of them. Does the pleading mean that it is imputed that the respondent is suspected by the South Australian police, or prosecuting authorities, or by the Tasmanian police, or prosecuting authorities, or at least by one or more persons in those ranks? What, if anything, would the appellant need to show about the state of mind of at least some of those people in order to show that the matter to be published is true? There was also debate in this Court about the meaning of the third imputation. Does "multiple" mean more than one, or more than two? Having regard to the respondent's signed confession to a second murder, if the imputation bears the first meaning, it appears that the appellant may have little difficulty in establishing its truth. If it means more than two, the position may be different. involved that [the respondent] is suspected of being Crawford J considered it obvious that "there will be little difficulty in proving the disappearances and possible murders of the Beaumont children in the light of the Mercury's publications". He thought it was not so clear that it could be proved that the respondent was a multiple murderer of children, although he did not say what he meant by "multiple". At all events, he was ready to accept that there was a substantial likelihood that the appellant could show the imputations to be true. In his view "a greater problem for the [appellant] will be to establish that the publication of the imputations will be for the public benefit". He said, in a passage that conveys the essence of his reasons for granting an interlocutory injunction: "My view is that, in general, it is not for the public benefit that the media should publicly allege that a person has committed crimes of which he or she has not been convicted, whether or not there are currently proceedings afoot with respect to the crimes. It is instead in the public 4 The Defamation Act 2005 (Tas) came into force on 1 January 2006, but it was the Act of 1957 that was in force at the time of the proceedings in the Supreme Court of Tasmania, and it was the law as stated in the Act of 1957 that governed the decisions the subject of this appeal. Crennan interest that such allegations should usually be made to the public only as a result of charges and subsequent conviction. That the media on occasions makes such allegations is often referred to as 'trial by media', of which it appears the plaintiff complained to the Mercury. However, so far as concerns the imputation that the accused is a multiple killer of children, a more appropriate description in this case would be 'conviction by media'. No suggestion of a trial, as we understand that word, will be involved here. Similarly, I can see no aspect of public benefit in the making public of allegations that the plaintiff was responsible for the disappearance and murder of the Beaumont children or that he is suspected of being responsible. The responsibility owed to the public with regard to the investigation of crime is entrusted by our society to the police and other public investigators and prosecutors. If there is evidence available that might assist the authorities to investigate the disappearance of the children in question, it should be made available to them. I have difficulty accepting that it is in the public interest that instead, such information be bandied about in public. There will, of course, be cases when in the light of prior public statements by the person who is being defamed, or the public conduct of that person, it will be for the public benefit to publish allegations of that kind to the general public, but I have difficulty seeing that this is such a case. It is sufficient to say that the claim of the defendants to 'public benefit' may well be unsuccessful. It follows from what I have been saying that I am unpersuaded that the granting of an interlocutory injunction restraining the defendants from publishing the imputations will 'restrain the discussion in the media of matters of public interest', as that expression was used by Hunt J in Chappell's case at 164, applying, of course, the law's use of the term 'public interest'." Crawford J granted an interlocutory injunction5. The order restrained the appellant from broadcasting or otherwise publishing any part of the documentary known as "The Fisherman" that imputes or implies that the respondent was responsible for or is suspected of being responsible for the disappearance or murder of children commonly referred to as the Beaumont children or that the respondent is a multiple killer of children. The form of the order in some respects went beyond the form of the agreed imputations, but, to the extent that it followed those imputations, it reflected their defects. The appellant appealed to the Full Court of the Supreme Court of Tasmania. By majority (Evans and Blow JJ, Slicer J dissenting), the appeal was 5 O'Neill v Australian Broadcasting Corporation [2005] TASSC 26. Crennan dismissed.6 Blow J, with whom Evans J agreed, concluded that it had not been shown that Crawford J acted on some wrong principle, or that the interlocutory order involved substantial injustice. He reviewed in some detail the authorities that show that courts "have been most reluctant to grant interlocutory injunctions in defamation cases", but observed that the weight of authority in Australia favoured a flexible rather than a rigid approach. Crawford J, he said, was not obliged to treat as decisive the public interest in free speech which is one of the reasons for the traditional reluctance to grant interlocutory injunctions in defamation cases, and had exercised his discretion in accordance with the appropriate principles. Slicer J, who dissented, summarised the position as he saw it in this way: The respondent's status was that of a public persona. His conduct as a prisoner could be said to be of general interest and his past a matter which was in the public domain. The fate of the Beaumont children had been and remained of community interest. Issues concerning the release of prisoners have always been concerns of the community. The statements, allegations or innuendoes presented in the documentary had previously been published to the community. The ambit of the documentary was far wider than that portraying the activities of the respondent whilst in prison, and ... the respondent believed himself to have been betrayed [by Mr Davie who had gained access to the respondent on what the respondent says is a false basis]. Notwithstanding the belief of betrayal, the respondent had previously agreed to participate in the documentary process, albeit on a differing assumption. The allegations were, on their face, defamatory although the action was subject to statutory defences or justifications. The respondent had an arguable basis for an action in defamation." Slicer J emphasised that "public benefit" for the purpose of the statutory defence of justification is not co-extensive with "public interest" for the purpose 6 Australian Broadcasting Corporation v O'Neill [2005] TASSC 82. Crennan of considering prior restraint of publication. "The existence of a defence is a relevant factor, but prohibition of publication is governed by different legal principle." There were involved, he said, different value judgments. He regarded freedom of speech as "a compelling factor". The respondent retained his claim for damages. His reputation was already tainted. There had already been extensive publication of the material in question. The unsolved crimes, the murder to which the respondent had confessed but for which he had not been tried, and the respondent's future prospects of release, were all matters of public interest. He held that Crawford J had erred in failing to give appropriate weight to the public interest in free speech. Prior restraint of publication in defamation action and Lopes LJJ and Lindley, Bowen In his widely quoted judgment in Bonnard v Perryman7, in which Lord Esher MR, concurred, Lord Coleridge CJ explained why "the subject-matter of an action for defamation is so special as to require exceptional caution in exercising the jurisdiction to interfere by injunction before the trial of an action to prevent an anticipated wrong" and why, when there is a plea of justification, it is generally wiser, in all interference until the trial and but exceptional cases, determination of the plea of justification. First, there is the public interest in the right of free speech. Secondly, until the defence of justification is resolved, it is not known whether publication of the matter would invade a legal right of the plaintiff. Thirdly, a defence of justification is ordinarily a matter for decision by a jury, not by a judge sitting alone as in an application for an injunction. Fourthly, the general character of the plaintiff may be an important matter in the outcome of a trial; it may produce an award of only nominal damages. to abstain from In one respect, what Lord Coleridge CJ said, in its application to this case, requires qualification. His Lordship was dealing with a context in which truth of itself amounted to justification. Here, in the state of the law at the time of the proceedings before Crawford J and the Full Court, the appellant needed the added element of public benefit. Subject to that significant matter, what his Lordship said is directly in point. The general public interest in free speech is involved. The trial judge was prepared to accept that there was a strong possibility that the imputations could be shown to be true. The defence of justification remains unresolved. The respondent's general character, or if the difference be material, reputation8, is such that, even if he succeeded at trial, the damages awarded for the publication the subject of the interlocutory application could well be nominal. [1891] 2 Ch 269 at 283-285. cf Plato Films Ltd v Speidel [1961] AC 1090 at 1138. Crennan Lord Coleridge CJ's conclusion was that "it is wiser in this case, as it generally and in all but exceptional cases must be, to abstain from interference until the trial"9. That form of expression does not deny the existence of a discretion. Inflexibility is not the hallmark of a jurisdiction that is to be exercised on the basis of justice and convenience. Formulations of principle which, for purposes of legal analysis, gather together considerations which must be taken into account may appear rigid if the ultimate foundation for the exercise of the jurisdiction is overlooked. Nevertheless, so long as that misunderstanding is avoided, there are to be found, in many Australian decisions, useful reminders of the principles which guide the exercise of discretion in this area. One of the best known statements of principle is that of Walsh J, before he became a member of this Court, in Stocker v McElhinney (No 2)10. After referring to the 5th edition of Gatley on Libel and Slander, and citing Bonnard v Perryman, he said: "(1) Although it was one time suggested that there was no power in the court, under provisions similar to those contained in [the Act governing procedure in the Supreme Court of New South Wales] to grant an interlocutory injunction, in cases of defamation, it is settled that the power exists in such cases. In such cases, the power is exercised with great caution, and only in very clear cases. If there is any real room for debate as to whether the statements complained of are defamatory, the injunction will be refused. Indeed, it is only where on this point, the position is so clear that, in the judge's view a subsequent finding by a jury to the contrary would be set aside as unreasonable, that the injunction will go. If, on the evidence before the judge, there is any real ground for supposing that the defendant may succeed upon any such ground as privilege, or of truth and public benefit, or even that the plaintiff if successful, will recover nominal damages only, the injunction will be refused." The principles were discussed, for example, in Chappell v TCN Channel Nine Pty Ltd11 (a decision referred to by Crawford J in a passage quoted above), National Mutual Life Association of Australasia Ltd v GTV Corporation Pty [1891] 2 Ch 269 at 285. 10 [1961] NSWR 1043 at 1048. 11 (1988) 14 NSWLR 153. Crennan Ltd12, and Jakudo Pty Ltd v South Australian Telecasters Ltd13. As Doyle CJ said in the last-mentioned case, in all applications for an interlocutory injunction, a court will ask whether the plaintiff has shown that there is a serious question to be tried as to the plaintiff's entitlement to relief, has shown that the plaintiff is likely to suffer injury for which damages will not be an adequate remedy, and has shown that the balance of convenience favours the granting of an injunction. These are the organising principles, to be applied having regard to the nature and circumstances of the case, under which issues of justice and convenience are addressed. We agree with the explanation of these organising principles in the reasons of Gummow and Hayne JJ14, and their reiteration that the doctrine of the Court established in Beecham Group Ltd v Bristol Laboratories Pty Ltd15 should be folIowed16. In the context of a defamation case, the application of those organising principles will require particular attention to the considerations which courts have identified as dictating caution. Foremost among those considerations is the public interest in free speech. A further consideration is that, in the defamation context, the outcome of a trial is especially likely to turn upon issues that are, by hypothesis, unresolved. Where one such issue is justification, it is commonly an issue for jury decision17. In addition, the plaintiff's general character may be found to be such that, even if the publication is defamatory, only nominal damages will be awarded. Public benefit and public interest Section 15 of the Defamation Act provided: "15. It is lawful to publish defamatory matter if – the matter is true; and 13 (1997) 69 SASR 440 at 442-443. 14 See [65]-[72]. 15 (1968) 118 CLR 618. 16 See also Firth Industries Ltd v Polyglas Engineering Pty Ltd (1975) 132 CLR 489 at 492 per Stephen J; Winthrop Investments Ltd v Winns Ltd [1975] 2 NSWLR 666 at 708 per Mahoney JA; World Series Cricket v Parish (1977) 16 ALR 181 at 186 17 As to the practice concerning trial by jury in various Australian jurisdictions, see George, Defamation Law in Australia, (2006) at 225-226. Crennan it is for the public benefit that the publication should be made." These were both questions of fact (s 20). However, par (b) called for a value judgment as to whether the public would benefit from the publication in issue – here the publication of the documentary18. In London Artists Ltd v Littler19, Lord Denning MR said: "Whenever a matter is such as to affect people at large, so that they may be legitimately interested in, or concerned at, what is going on; or what may happen to them or to others; then it is a matter of public interest on which everyone is entitled to make fair comment." The contexts of fair comment, and qualified privilege, are somewhat different from the context of justification. However, it may be noted that, in Bellino v Australian Broadcasting Corporation20, where this Court was concerned with a Queensland statutory defence of publication in good faith in the course of the discussion of some subject of public interest, the public discussion of which is for the public benefit, Dawson, McHugh and Gummow JJ said that "[i]n the great majority of cases, the public discussion of a subject of public interest must be for the public benefit."21 There are some obvious exceptions, such as public discussion that might imperil national security. The requirement of public benefit, as an element of the defence of justification in a number of Australian jurisdictions, had a long history. In Rofe v Smith's Newspapers Ltd22, Street ACJ said, in words that applied equally in Tasmania: "The defence of justification rests on a different footing in New South Wales from that on which it rests in England. In England it is a complete answer to a civil action that the defamatory matter complained of was true. The reason upon which this rule of law rests, as I understand, is that, as the object of civil proceedings is to clear the character of the plaintiff, no wrong is done to him by telling the truth about him. The presumption is that, by telling the truth about a man, his reputation is not lowered beyond its proper level, but is merely brought down to it. The law was 18 Bellino v Australian Broadcasting Corporation (1996) 185 CLR 183 at 229. 19 [1969] 2 QB 375 at 391. 20 (1996) 185 CLR 183. 21 (1996) 185 CLR 183 at 229. 22 (1924) 25 SR (NSW) 4 at 21-22. Crennan altered in this respect in New South Wales many years ago. It was felt that to allow past misconduct, or discreditable episodes which were dead and gone, to be revived and dragged into the light of day at will by maliciously minded scandalmongers was too hard upon people who, whatever indiscretions they might have committed in the past, were leading respectable lives; and the Legislature, accordingly, provided that, in an action for defamation, the truth of the matters charged should not amount to a defence, unless it was for the public benefit that they should be published." The matter in question in this case goes far beyond the reporting of the past indiscretions of a person of otherwise good reputation, whose privacy ought to be respected. The unsolved mystery of the disappearance of the Beaumont children, the presence within the Tasmanian prison system of a convicted murderer who is suspected of responsibility, the respondent's confession to another murder with which he has never been charged, and the political controversies concerning release on licence or parole of serious offenders are all matters of public interest in the relevant sense. It would have been open to a tribunal of fact to find that the public discussion of those matters, with particular reference to the respondent, is for the public benefit. What might be thought to stand in need of explanation is how suppression of public discussion of those matters could serve the public interest. The reasoning of Crawford J, which was approved by the majority in the Full Court, rested upon a central proposition: it is not for the public benefit, and is contrary to the public interest, for there to be "trial by media". Crawford J said in the passage earlier quoted, that the public interest dictates that allegations of the kind here in question "should usually be made to the public only as a result of charges and subsequent conviction". That proposition requires further analysis. First, it is not the fact that allegations of serious criminal conduct usually become known to the public only as a result of charges and subsequent conviction. On the contrary, the process often works in reverse: charges and subsequent conviction often result from the publication of allegations of serious criminal conduct. Subject to the law of contempt (and, of course, the law of defamation) media outlets are free to make, and frequently make, allegations which are directed towards, or which have the effect of, prompting action by the authorities. Condemnations of trial by media sometimes have a sound basis, but they cannot be allowed to obscure the reality that criminal charges are sometimes laid as a response to media exposure of alleged misconduct. The idea that the investigation and exposure of wrongdoing is, or ought to be, the exclusive province of the police and the criminal justice system, bears little relation to reality in Australia, or any other free society. There are heavily governed societies in which the police and other public authorities have the exclusive capacity to make, and pursue, allegations of misconduct; but not in ours. Indeed, Crennan in our society allegations of misconduct are sometimes made against the police and public officials. Secondly, it may well be in the public interest that inaction on the part of the police and prosecuting authorities be called publicly into question. It is certainly in the public interest that it is open to be called into question. The facts of this case provide an example. At least according to the Hobart Mercury, the South Australian Commissioner of Police and the Tasmanian Commissioner of Police have formed different views on the respondent's likely responsibility for a number of murders. These may reflect legitimate differences of opinion, but why should such differences not be a matter of public knowledge and discussion, bearing in mind the respondent's existing conviction and custodial status? Thirdly, if the expression "trial by media" means any public canvassing by the media, outside the reporting of court proceedings, of the merits of topics which could become, or are, the subject of civil or criminal litigation, then we are surrounded by it. The idea that the criminal justice system ought to be the exclusive forum for canvassing matters of criminal misbehaviour is contrary to the way our society functions in practice. Fourthly, a complaint that what is going on is trial by media implies that there is some different, and better, way of dealing with the issues that have been raised. Unless it be suggested that the public interest is best served by silence on the subject of the respondent's possible complicity in the disappearance of the Beaumont children, it is not easy to see what, in the circumstances, that might be. Crawford J was willing to accept that it was likely that it would be shown to be true that the respondent was suspected of being involved in the murders of the Beaumont children. The South Australian authorities appear to have no present intention of charging the respondent with those murders. The respondent is a convicted murderer, serving a life sentence. The Tasmanian Commissioner of Police has been reported as saying that the respondent has killed many children. The corollary of the respondent's argument is that the public should not be allowed to hear of the suspicions. Any public revelation of those suspicions is likely to be stigmatised as trial by media. The alternative is silence. The third imputation alleged is that the respondent is a multiple murderer. He has confessed to a second killing. That is a matter of public interest. The authorities have never brought him to trial for that matter, perhaps because it would be a work of supererogation. If any media outlet publishes the fact of the respondent's confession, then no doubt it can be said that the question of his guilt is being canvassed without all the protections and safeguards of the criminal trial process. That would be true. Yet it seems surprising that the public could never be told of the respondent's confession. It is difficult to resist the conclusion that, in their natural and proper concern for fairness to the respondent, the judges who decided the case in his Crennan favour have fallen into the error of treating the criminal trial process as the only proper context in which matters of the kind presently in question may be ventilated. More fundamentally, however, it is apparent that they failed to take proper account of the public interest in free communication of information and opinion, which is basic to the caution with which courts have approached the topic of prior restraint of allegedly defamatory matter. The public interest in free speech goes beyond the public benefit that may be associated with a particular communication. The failure to recognise this was an error of principle on the part of the judges who found in favour of the respondent. As Auld LJ pointed out in Holley v Smyth23, Blackstone, in his Commentaries24, as long ago as 1769 distinguished between prior restraint of publication and subsequent legal consequences: "The liberty of the press is indeed essential to the nature of a free state: but this consists in laying no previous restraints upon publications, and not in freedom from censure for criminal matter when published. Every freeman has an undoubted right to lay what sentiments he pleases before the public: to forbid this, is to destroy the freedom of the press: but if he publishes what is improper, mischievous, or illegal, he must take the consequence of his own temerity" (emphasis in original). What lay behind Blackstone's remarks was the conclusion in the late 17th century of the controversy between Parliament and the Crown over free speech and freedom of the press. From Tudor times, the House of Commons appreciated that its role in public life would be seriously curtailed without such freedoms. This explains the House's repeated assertions, over the century, of a "liberty" to "speak freely their consciences without check or controlment"25. This liberty found its way into The Bill of Rights, 168926. The "check or controlment" complained about came from the Crown or its councillors. A freedom to speak on behalf of the commons became a freedom, as Blackstone notes of "[e]very freeman". Hand in hand with these developments went the dismantling of the Crown's control, or censorship, of the press, first asserted generally by Ordinance in 1534, and requiring all manuscripts to be scrutinised and licensed by the Stationers' Company. Decrees in Star Chamber reinforced that control or censorship in respect of both printers and books. As explained in the joint reasons of Gummow and Hayne JJ, the dismantling of the licensing system was 23 [1998] QB 726 at 737. 24 Blackstone, Commentaries, (1769) bk 4, at 151-152. 25 "The Apology of the Commons, 20 June 1604" in Stephenson & Marcham, Sources of English Constitutional History, (1972), vol 1, 418 at 422. 26 Expressed as a right to "freedom of speech and debates or proceedings in parliament." Crennan effectively completed by 169527. The public interest in free speech is explained not least by reference to the fact that freedom of speech and freedom of the press were important aspects of the constitutional struggles which came to rest with the Act of Settlement of 1701. Subsequently, courts of equity were not willing to enjoin publication of defamatory matter, not only because that would usurp the authority of juries, but also because they were most reluctant to be asked "to exercise the powers of a censor"28. This latter consideration remains important in our democracy. It is one thing for the law to impose consequences, civil or criminal, in the case of an abuse of the right of free speech. It is another matter for a court to interfere with the right of free speech by prior restraint. In working out the consequences of abuse of such freedom, the law strikes a balance between competing interests, which include an individual's interest in his or her reputation. When, however, a court is asked to intervene in advance of publication wider considerations are involved. This is the main reason for the "exceptional caution"29 with which the power to grant an interlocutory injunction in a case of defamation is approached. It is not reflected in the reasoning of Crawford J, or the majority of the Full Court. It is only in the reasoning of Slicer J that it was influential. Reputation There is a further reason why this case was a most unpromising candidate for this unusual form of relief. It concerns the final matter referred to by Lord Coleridge CJ in Bonnard v Perryman. This is a case in which, if the intended publication were to proceed, and if it were found to involve actionable defamation, it may be that an award of only nominal damages would follow. The three imputations upon which the respondent relied in argument before Crawford J, and which were the basis of the Full Court's decision, have to be considered in the light of two significant matters. First, the respondent is a convicted murderer, who is serving a life sentence, and who has confessed to another murder. To say of him that he is suspected of the murder of the Beaumont children, and that he is a multiple murderer, might not attract an award of substantial damages, especially if, as Crawford J was willing to assume, those imputations could be shown to be true. Secondly, as at 28 April 2005, the date of the threatened publication the subject of the interlocutory injunction, there had 27 See [80]. 28 Fleming v Newton (1848) 1 HLC 363 at 371 per Lord Cottenham LC. 29 Bonnard v Perryman [1891] 2 Ch 269 at 284 per Lord Coleridge CJ. Crennan already been extensive publication of matters involving allegations of the most serious nature against the respondent. Conclusion and Orders The primary judge, and the majority in the Full Court, erred in principle in two respects in their approach to the exercise of the discretionary power to grant an interlocutory injunction in the special circumstances of a defamation case. They failed to take proper account of the significance of the value of free speech in considering the question of prior restraint of publication, and they failed to take proper account of the possibility that, if publication occurred and was found to involve actionable defamation, only nominal damages might be awarded. The appeal should be allowed. The question as to the appropriate course for this Court to take, in the event that the appeal is allowed, is complicated by the fact that the legislation under which this litigation was conducted has been replaced by the Defamation Act 2005 (Tas), which came into effect on 1 January 2006. Under the new Act, which applies to the publication of defamatory matter after that date (s 48), the defence of justification is made out by proof of truth of the defamatory imputations. Public benefit is no longer an element of the defence. The defamatory matter the subject of the existing injunction has not yet been published. The element of public benefit was the decisive factor in Crawford J's decision to grant an injunction. The decision to grant an interlocutory injunction was discretionary. Ordinarily, if it were concluded that there was error in the exercise of the discretion, the matter would be remitted for further consideration. Here, however, the case against a grant of interlocutory relief was very strong. Furthermore, the allegedly defamatory publication with which this appeal is concerned has not yet occurred. The change in statute law that has taken place provides an additional reason for not continuing the restraint on the appellant30. In particular, it removes the element of the defence of justification that was central to the primary judge's decision to grant relief. As will appear, the conditions on which special leave to appeal was granted preserve the appellant's entitlement to costs of the proceedings in the Supreme Court of Tasmania in any event. The appeal should be allowed. The order of the Full Court of the Supreme Court of Tasmania should be set aside. In place of that order it should be ordered 30 Trade Practices Commission v Milreis Pty Ltd (No 2) (1978) 32 FLR 234 at 241. Crennan that the appeal to that Court be allowed. Order 1 of the orders made by Crawford J should be set aside insofar as it applies to the appellant. It was a condition of the grant of special leave to appeal that the appellant would undertake to pay the respondent's costs of the appeal in any event and would not seek to disturb the costs orders made in the Supreme Court of Tasmania. Accordingly the appellant must pay the respondent's costs of the appeal. GUMMOW AND HAYNE JJ. This appeal from the Full Court of the Supreme Court of Tasmania raises matters of principle respecting the exercise of jurisdiction to enjoin apprehended publication of defamatory matter, pending trial of an action. For the reasons which follow, the interlocutory restraint imposed upon the appellant ("the ABC") should be removed, and the appeal allowed. The Supreme Court action In an action instituted in the Supreme Court of Tasmania by writ filed on 15 April 2005, the present respondent ("Mr O'Neill") sought injunctive relief, particularly to restrain the ABC from broadcasting on 28 April 2005 a television programme, being a film entitled "The Fisherman". Mr O'Neill also sought damages for defamation against the ABC and the two other defendants (Roar Film Pty Ltd and Mr Gordon Davie, a filmmaker) by reason of the showing of the film at the Hobart Summer Film Festival during the first week of January 2005. The ABC throughout the litigation has denied any participation in that alleged publication. However, in this Court, it was an agreed fact that at some time before the granting of the interlocutory relief which has given rise to this appeal, the ABC had published "The Fisherman" to certain newspapers with a view to indicating the nature of the proposed transmission on 28 April 2005. Before the institution of his Supreme Court action, Mr O'Neill had not obtained the leave required for the commencement of his action by the Prisoners (Removal of Civil Disabilities) Act 1991 (Tas)31. However, in that regard, no point has been taken against his case. Eventually, an amended statement of claim by Mr O'Neill was filed on 24 February 2006 and the ABC filed its defence to that pleading. Mr O'Neill claims against the ABC (and the other defendants) damages and a final injunction against publication of any part of "The Fisherman" which "imputes or implies that [he] was responsible for or is suspected of being responsible for the disappearance or murder of the children commonly referred to as the Beaumont children or that [he] is a multiple killer of children". As the above chronology indicates, there has been no trial of the action. Mr O'Neill was aged 57 when he instituted the present action. He is serving in Tasmania a life sentence of imprisonment following his conviction in November 1975 for the murder of a child. He had been charged with the murder of a second child, aged nine, the respective events occurring in February and April 1975. Following the conviction and sentence for the February killing, the 31 cf Dugan v Mirror Newspapers Ltd (1978) 142 CLR 583. Tasmanian prosecuting authorities decided not to proceed with a trial for the April occurrence. The three Beaumont children, aged four, seven and nine, disappeared in South Australia on Australia Day 1966. The evidence includes articles published in a Hobart newspaper, The Mercury, on various dates in January, February and April 2005. There is an account in those articles of, or references to, the content of the film "The Fisherman", with indications that Mr O'Neill may have been involved in the disappearance of the Beaumont children and that he had confessed his guilt of the murders to the filmakers. Mr Davie, the third defendant, was reported as saying that he knew that Mr O'Neill had told other people he was responsible for killing the Beaumont children, and the Tasmanian Commissioner of Police was reported as saying he was convinced that Mr O'Neill had murdered more children than the child for whose murder he had been convicted in 1975. The article in the issue for 6 April 2005 speaks of preparations by the ABC to screen "The Fisherman" on 28 April, and to the ABC having pulled it from its original timeslot of 21 April after contact by Mr O'Neill's lawyers. When the action was instituted, the Defamation Act 1957 (Tas) ("the 1957 Act") was in force. Section 15 made it lawful to publish defamatory matter if it was true and "for the public benefit" that the publication be made32. Section 5 classified as a question of law the question whether matter is capable or not capable of bearing a defamatory meaning (par (3)), and as a question of fact whether matter is or is not defamatory (par (4)). This division in the functions of judge and jury represented the common law as settled by Capital and Counties Bank v Henty33 for civil actions in a manner analogous, as Lord Blackburn pointed out34, to that established by statute, Fox's Libel Act 1792 (UK)35 for prosecutions for criminal libel. With effect from 1 January 2006, the 1957 Act was replaced by the Defamation Act 2005 (Tas) ("the 2005 Act"). This was after the decision of the Full Court from which the present appeal is brought to this Court. As to any accrued claim for damages and the conduct of the action with respect to that 32 The legislative history of the addition in Australian defamation law of a requirement of public benefit to the defence of justification is traced in Mitchell, "The Foundations of Australian Defamation Law", (2006) 28 Sydney Law Review 33 (1882) 7 App Cas 741. 34 (1882) 7 App Cas 741 at 775-776. 35 32 Geo III c 60. claim, the governing legislation remains the 1957 Act. This follows from the operation of s 16(1) of the Acts Interpretation Act 1931 (Tas)36 and s 48(3)(a) of the 2005 Act37. Questions respecting the operation of the 2005 Act upon any publication by the ABC were it now to take place were the subject of further written submissions by the parties. It will be necessary to make some reference to those submissions later in these reasons. This appeal arises from interlocutory injunctive relief obtained by Mr O'Neill. The interlocutory application Upon an interlocutory application filed on 15 April 2005, the same day as the action was instituted, and after a hearing on 20 and 21 April 2005, on 22 April Crawford J made an order, until judgment in the action or earlier order, restraining the ABC and the other defendants "from broadcasting or otherwise publishing to the general public any part of the documentary known as 'The Fisherman' that imputes or implies that [Mr O'Neill] was responsible for or is suspected of being responsible for the disappearance or murder of children commonly referred to as the Beaumont children or that [Mr O'Neill] is a multiple killer [of] children". In the subsequently filed amended statement of claim, an order in these terms is sought as final relief. Crawford J did not view the film and the evidence disclosed little of its contents. For the purpose of the interlocutory application, the defendants conceded that several imputations were capable of being conveyed by the film. These were that Mr O'Neill is "a suspect" in the disappearance and murder of the Beaumont children and that he is "a multiple killer of children". Counsel for the ABC told the Supreme Court that the ABC would plead truth and public benefit under s 15 of the 1957 Act. An appeal was brought to the Full Court by the ABC, but not by the other defendants. They have played no further part in the interlocutory litigation. The Full Court (Evans and Blow JJ; Slicer J dissenting) dismissed the appeal. 36 Section 16(1) of the Acts Interpretation Act 1931 (Tas) provides that, unless the contrary is expressly provided, the repeal of a statute does not affect any right or liability acquired thereunder or affect any legal proceeding in respect thereof. 37 Section 48(3)(a) of the 2005 Act provides that the existing law continues to apply to any cause of action that accrued before the commencement of the 2005 Act in the same way as it would have applied had the 2005 Act not been enacted. The issues The issues before this Court are whether the majority of the Full Court erred in upholding the order made by the primary judge, whether the primary judge misunderstood or misapplied the principles governing the administration of the jurisdiction with respect to interlocutory injunctive relief, particularly to restrain publication of defamatory matter, and, if so, what consequential relief should be granted in this Court were the appeal to be allowed. In his reasons for judgment as one of the majority in Lovell v Lewandowski38, Kennedy J, after a review of the case law and non-judicial writings on the subject, concluded that, as matters stood at intermediate appellate level in Australia, the position with respect to the grant or refusal of interlocutory injunctions in defamation actions is "exceptional", when compared with "the ordinary equitable principles upon which an interlocutory injunction can be granted"39. Kennedy J considered various reasons which had been assigned for the development of "exceptional rules" in this particular area40. It will be necessary to return to consider those matters. At this point, it is sufficient to note that they concerned a reluctance to restrain freedom of speech, the policy of the law in favour of jury trials in defamation actions, and what was perceived at least in the past as the absence of a legal proprietary right in personal reputation. These considerations applied to final as much as, if not more so, to interlocutory relief by way of injunction. In Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc41, it was said in this Court that the grant of an interlocutory injunction is a matter of practice and procedure. However, where, as in this case, matters of principle are involved, an appeal stands somewhat above the ordinary appeal in a matter of practice and procedure. The same also properly may be said of the interlocutory anti-suit injunction and the assets preservation order considered by this Court respectively in CSR Ltd v Cigna Insurance Australia Ltd42 and Cardile v LED Builders Pty Ltd43, and the issues respecting interlocutory injunctive relief 38 [1987] WAR 81. 39 [1987] WAR 81 at 90-91. 40 [1987] WAR 81 at 91. 41 (1981) 148 CLR 170 at 176-177. 42 (1997) 189 CLR 345. 43 (1999) 198 CLR 380. considered in Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia44. The jurisdiction of the Supreme Court Neither the 1957 Act nor the 2005 Act refers explicitly to the role of injunctive relief in defamation actions45. Accordingly, and the contrary is not suggested, the jurisdiction of the Supreme Court with respect to interlocutory and final injunctive relief which was invoked by Mr O'Neill was that conferred by the Supreme Court Civil Procedure Act 1932 (Tas) ("the 1932 Act"). This provides for the concurrent administration by the Supreme Court of law and equity (s 10) and was introduced by the Parliament with the expressed objective of adopting in England over 50 years earlier46. the Judicature system established Section 11(12) of the 1932 Act confers power to grant an interlocutory injunction "in all cases in which it shall appear to the Court or judge to be just and convenient that such order should be made". This Court affirmed in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd47, a Tasmanian appeal considering s 11(12), that, where an interlocutory injunction is sought, it is necessary to identify the legal (including statutory) or equitable rights which are to be determined at the trial and in respect of which final relief is sought. This meant, in particular, that the Supreme Court of Tasmania did not have jurisdiction to grant an interlocutory injunction when no legal or equitable rights were to be so determined. The present appeal does not involve a situation resembling that considered in Lenah Game Meats. Here, there is no doubt that there were legal rights at stake, namely, the tort action against the ABC for defamation under the 1957 Act. The significant point is that not all apprehended commissions of tortious acts attract an injunctive remedy on a quia timet basis. In particular, Ashburner wrote48: 44 (1998) 195 CLR 1. 45 However, s 6(2) of the 2005 Act states that that statute does not affect the operation of the general law, meaning thereby "the common law and equity" (see s 4), in relation to the tort of defamation, except to the extent that the 2005 Act expressly or by necessary implication provides otherwise. 46 See Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at 239-240 [86]-[87]. 47 (2001) 208 CLR 199 at 217 [10], 231-232 [59]-[60], 241 [91]. 48 Ashburner's Principles of Equity, 2nd ed (1933) at 341. "It was settled before the Judicature Act that the Court of Chancery had no jurisdiction to restrain a publication merely because it was a libel." On the eve of the introduction of the Judicature system, Lord Cairns LC, speaking for the Court of Appeal in Chancery in Prudential Assurance Company v Knott declared49: "[A]s I have always understood, it is clearly settled that the Court of Chancery has no jurisdiction to restrain the publication merely because it is a libel. There are publications which the Court of Chancery will restrain, and those publications, as to which there is a foundation for the jurisdiction of the Court of Chancery to restrain them, will not be restrained the less because they happen also to be libellous." The qualification expressed by Lord Cairns LC allowed, for example, for injunctive relief in respect of those torts of slander of title and slander of goods, where property interests were involved, and which were classified as "trade libel"50, and later, after Ratcliffe v Evans51, were developed as the tort of injurious falsehood, elements of which were malice and special damage. The logical consequence was that, where causes of action both for defamation and injurious falsehood lay in the same situation, an injunction might be granted in respect of Thereafter, in Monson v Tussauds Limited; Monson v Louis Tussaud53, Lord Halsbury, sitting in the English Court of Appeal, declared "[t]he Court of Chancery had no jurisdiction in libel cases". A more accurate proposition was that, unless, as was the position in Saxby v Easterbrook54, a jury already had found the matter complained of to be libellous and repetition of the libel was calculated to do material injury to a legal proprietary interest of the plaintiff, an injunction would not be issued. In Saxby, a final injunction was granted to restrain further publication of allegations that the plaintiff had dishonestly and improperly presented a petition for the grant of a patent on the basis that he was 49 (1875) LR 10 Ch App 142 at 144. 50 See Lee v Gibbings (1892) 67 LT 263; White v Mellin [1895] AC 154. 52 See Collard v Marshall [1892] 1 Ch 571. 53 [1894] 1 QB 671 at 690. 54 (1878) 3 CPD 339. the true inventor whereas his claimed invention was pirated from that of the defendants. It was in this setting that, in Bonnard v Perryman55, Lord Coleridge CJ delivered reasons with the concurrence of Lord Esher MR and Lindley, Bowen and Lopes LJJ. Jurisdiction to grant injunctive relief in defamation actions now was seen as conferred by statute and located in ss 79 and 82 of the Common Law Procedure Act 1854 (UK) ("the 1854 Act")56 and its continuation by the Judicature legislation. In what was still Van Dieman's Land, the 1854 Act (including the text of ss 79 and 82) was adopted by The Common Law Procedure Act No 2 1855 (Tas). The relevant sections of this statute, ss 63 and 66, were repealed by the 1932 Act, but not so as to take away, lessen or impair any jurisdiction vested in the Supreme Court of Tasmania by that repealed legislation57. In Bonnard, Lord Coleridge CJ said58: "Prior to the [1854 Act], neither Courts of Law nor Courts of Equity could issue injunctions in such a case as this: not Courts of Equity, because cases of libel could not come before them; not Courts of Law, because prior to 1854 they could not issue injunctions at all. But the 79th and 82nd sections of the [1854 Act] undoubtedly conferred on the Courts of Common Law the power, if a fit case should arise, to grant injunctions at any stage of a cause in all personal actions of contract or tort, with no limitation as to defamation." Dean Pound cogently challenged what the Lord Chief Justice had described as the undoubted conferral of power by the 1854 Act with respect to defamation actions59. Section 79 of the 1854 Act did speak of "all cases of breach of contract or other injury, where the party injured is entitled to maintain and has brought an action" and went on to say that in such instances the party might claim a writ of injunction. However, Pound observed that it was 56 17 & 18 Vict c 125. 57 1932 Act, s 2(4)(a); cf Southern Textile Converters Pty Ltd v Stehar Knitting Mills Pty Ltd [1979] 1 NSWLR 692 at 697-698. 58 [1891] 2 Ch 269 at 283. 59 "Equitable Relief against Defamation and Injuries to Personality", (1916) 29 Harvard Law Review 640 at 665-666. reasonably clear that the 1854 Act referred to those cases "where there ought to be an injunction on the principles of equity jurisdiction"60. The provisions in the 1854 Act followed upon the Second Report of Her Majesty's Commissioners for inquiring into the Process, Practice, and System of Pleading in the Superior Courts of Common Law which was published in 185361. The Commissioners had noted that the injunction protected not merely equitable rights but also those rights violation of which was remedied by an action at common law; equity had gradually enlarged its jurisdiction, originally assumed by analogy to the case of waste, to include such torts as trespass and patent and copyright infringement and the restraint of breaches of negative covenants62. The Commissioners had supported the empowering of the Courts of Common Law to "exercise the same jurisdiction, and restrain violation of legal rights in the cases in which an injunction now issues for that purpose from the courts of equity"63. This legislative history supports the construction placed by Pound upon the 1854 Act. However, in Bonnard, the Lord Chief Justice went on64 to declare that the power he saw in the 1854 Act was by the Judicature legislation conferred upon the Chancery Division of the High Court as representing the old Courts of Equity. His Lordship continued65: "Nevertheless, although the power had existed since 1854, there is no reported instance of its exercise by a Court of Common Law till Saxby v Easterbrook66, which was decided in 1878. In that case the injunction was 60 "Equitable Relief against Defamation and Injuries to Personality", (1916) 29 Harvard Law Review 640 at 665. 61 (1853) [1626] at 42-44; the Report is reprinted in British Parliamentary Papers, Legal Administration, General, Courts of Common Law, vol 9 at 165. 62 Second Report of Her Majesty's Commissioners for inquiring into the Process, Practice, and System of Pleading in the Superior Courts of Common Law, (1853) 63 Second Report of Her Majesty's Commissioners for inquiring into the Process, Practice, and System of Pleading in the Superior Courts of Common Law, (1853) [1626] at 43 (original emphasis). 64 [1891] 2 Ch 269 at 283. 65 [1891] 2 Ch 269 at 283. 66 (1878) 3 CPD 339. not applied for, nor, of course, granted, till after a verdict and judgment had ascertained the publication to be a libel. That case was acquiesced in; and about the same time the Chancery Division began, and it has since continued, to assert the jurisdiction, which has been questioned before us, of granting injunctions on the interlocutory application of one of the parties to an action for libel." There is thus some force in the thesis advanced by Pound67 that the English courts had been moved "to strain a point" in order to be rid of the jurisdictional bar upon the injunctive remedy imposed by decisions such as Prudential Assurance Company v Knott68. The upshot of this development in the injunctive remedy, however haphazard, is that the existence of the jurisdiction in a Judicature system, such as that established in Tasmania by the 1932 Act, to grant injunctive relief to restrain publication of defamatory matter must be taken as settled. The question in the present appeal then arises at another level. This concerns the operation in this context of the principles respecting the grant of the special remedy of injunctive relief that is interlocutory in nature. Interlocutory injunctions The relevant principles in Australia are those explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd69. This Court (Kitto, Taylor, Menzies and Owen JJ) said that on such applications the court addresses itself to two main inquiries and continued70: "The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief ... The second inquiry is ... whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted." 67 "Equitable Relief against Defamation and Injuries to Personality", (1916) 29 Harvard Law Review 640 at 666. 68 (1875) LR 10 Ch App 142 at 144. 69 (1968) 118 CLR 618. 70 (1968) 118 CLR 618 at 622-623. By using the phrase "prima facie case", their Honours did not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. That this was the sense in which the Court was referring to the notion of a prima facie case is apparent from an observation to that effect made by Kitto J in the course of argument71. With reference to the first inquiry, the Court continued, in a statement of central importance for this appeal72: "How strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks." For example, special considerations apply where injunctive relief is sought to interfere with the decision of the executive branch of government to prosecute offences73. Again, in Castlemaine Tooheys Ltd v South Australia74, Mason ACJ, in the original jurisdiction of this Court, said that "[i]n the absence of compelling grounds" it is the duty of the judicial branch to defer to the enactment of the legislature until that enactment is adjudged ultra vires, and dismissed applications for interlocutory injunctions to restrain enforcement of the law under challenge. Various views have been expressed and assumptions made75 respecting the relationship between the judgment of this Court in Beecham and the speech of Lord Diplock in the subsequent decision, American Cyanamid Co v Ethicon 71 (1968) 118 CLR 618 at 620. 72 (1968) 118 CLR 618 at 622. 73 Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 156 per 74 (1986) 161 CLR 148 at 155-156; cf the earlier assumption in Murphy v Lush (1986) 60 ALJR 523 at 526; 65 ALR 651 at 655 that "a triable issue" of invalidity was sufficient to pass to consideration of the balance of convenience. 75 See, for example, Administrative and Clerical Officers Association, Commonwealth Public Service v Commonwealth (1979) 53 ALJR 588 at 591; 26 ALR 497 at 502; Australian Coarse Grain Pool Pty Ltd v Barley Marketing Board of Queensland (1982) 57 ALJR 425; 46 ALR 398; Tableland Peanuts Pty Ltd v Peanut Marketing Board (1984) 58 ALJR 283 at 284; 52 ALR 651 at 653; Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 at 24 [21]; Fejo v Northern Territory (1998) 195 CLR 96 at 122 [26]. Ltd76. It should be noted that both were cases of patent infringement and the outcome on each appeal was the grant of an interlocutory injunction to restrain infringement. Each of the judgments appealed from had placed too high the bar for the obtaining of interlocutory injunctive relief. Lord Diplock was at pains to dispel the notion, which apparently had persuaded the Court of Appeal to refuse interlocutory relief, that to establish a prima face case of infringement it was necessary for the plaintiff to demonstrate more than a 50 per cent chance of ultimate success. Thus Lord Diplock remarked77: "The purpose sought to be achieved by giving to the court discretion to grant such injunctions would be stultified if the discretion were clogged by a technical rule forbidding its exercise if upon that incomplete untested evidence the court evaluated the chances of the plaintiff's ultimate success in the action at 50 per cent or less, but permitting its exercise if the court evaluated his chances at more than 50 per cent." In Beecham, the primary judge, McTiernan J, had refused interlocutory relief on the footing that, while he could not dismiss the possibility that the defendant might not fail at trial, the plaintiff had not made out a strong enough case on the question of infringement78. Hence the statement by Kitto J in the course of argument in the Full Court that it was not necessary for the plaintiff to show that it was more probable than not that the plaintiff would succeed at trial. When Beecham and American Cyanamid are read with an understanding of the issues for determination and an appreciation of the similarity in outcome, much of the assumed disparity in principle between them loses its force. There is then no objection to the use of the phrase "serious question" if it is understood as conveying the notion that the seriousness of the question, like the strength of the probability referred to in Beecham, depends upon the considerations emphasised in Beecham. However, a difference between this Court in Beecham and the House of Lords in American Cyanamid lies in the apparent statement by Lord Diplock that, provided the court is satisfied that the plaintiff's claim is not frivolous or vexatious, then there will be a serious question to be tried and this will be sufficient. The critical statement by his Lordship is "[t]he court no doubt must be 77 [1975] AC 396 at 406. 78 (1967) 118 CLR 618 at 619. satisfied that the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried"79. That was followed by a proposition which appears to reverse matters of onus80: "So unless the material available to the court at the hearing of the application for an interlocutory injunction fails to disclose that the plaintiff has any real prospect of succeeding in his claim for a permanent injunction at the trial, the court should go on to consider whether the balance of convenience lies in favour of granting or refusing the interlocutory relief that is sought." (emphasis added) Those statements do not accord with the doctrine in this Court as established by Beecham and should not be followed. They obscure the governing consideration that the requisite strength of the probability of ultimate success depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory order sought. The second of these matters, the reference to practical consequences, is illustrated by the particular considerations which arise where the grant or refusal of an interlocutory injunction in effect would dispose of the action finally in favour of whichever party succeeded on that application81. The first consideration mentioned in Beecham, the nature of the rights asserted by the plaintiff, redirects attention to the present appeal. Defamation and interlocutory injunctions In Bonnard v Perryman82, after explaining what was to be taken as the derivation from the 1854 Act of the modern jurisdiction to enjoin defamatory publications, Lord Coleridge CJ continued83: "But it is obvious that the subject-matter of an action for defamation is so special as to require exceptional caution in exercising the jurisdiction to 79 [1975] AC 396 at 407. 80 [1975] AC 396 at 408. 81 See the judgment of McLelland J in Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 at 535-536 and the article by Sofronoff, "Interlocutory Injunctions Having Final Effect", (1987) 61 Australian Law Journal 341. 83 [1891] 2 Ch 269 at 284. interfere by injunction before the trial of an action to prevent an anticipated wrong." "The right of free speech is one which it is for the public interest that individuals should possess, and, indeed, that they should exercise without impediment, so long as no wrongful act is done; and, unless an alleged libel is untrue, there is no wrong committed; but, on the contrary, often a very wholesome act is performed in the publication and repetition of an alleged libel. Until it is clear that an alleged libel is untrue, it is not clear that any right at all has been infringed; and the importance of leaving free speech unfettered is a strong reason in cases of libel for dealing most cautiously and warily with the granting of interim injunctions." It is apparent from these remarks that the English Court of Appeal in Bonnard was dealing with a defamation law where truth was an absolute defence, whereas under the 1957 Act s 15 required truth and public benefit85. The Lord Chief Justice spoke in Bonnard expressly with reference to considerations attending the administration of interlocutory injunctive relief on a quia timet basis. However, this was at a time when that remedy was in a state of development and before the modern formulations of general principle, exemplifed for Australia by Beecham. One sequel was the production of a body of case law in Australia dealing with what was said in Bonnard as if interlocutory injunction applications in defamation actions occupy a field of their own and are somehow more than but one of the species of litigation to which the principles in Beecham apply. The body of Australian case law itself does not follow a single pattern, as Kennedy J explained in Lovell v Lewandowski86. The judgment of Blow J (with whom Evans J agreed) in the Full Court in the present litigation distinguished between "rigid" and "flexible" rules of practice in this regard87. The former are 84 [1891] 2 Ch 269 at 284. 85 Section 25 of the 2005 Act creates a defence if the defendant proves that the defamatory imputations are "substantially true". 86 [1987] WAR 81. 87 [1987] WAR 81 at 90-91. associated with the decision of Walsh J in Stocker v McElhinney (No 2)88. His Honour there said that an interlocutory injunction would be granted in cases of defamation only if the judge were of the view that a subsequent jury verdict to the contrary would be set aside as unreasonable, and that an injunction would be refused: "[i]f, on the evidence before the judge, there is any real ground for supposing that the defendant may succeed upon any such ground as privilege, or of truth and public benefit, or even that the plaintiff, if successful, will recover nominal damages only". Stocker was decided before the decision of this Court in Beecham. It also was decided before the adoption in New South Wales of the Judicature system and in reliance upon the jurisdiction then found in the New South Wales equivalent of the provisions of the 1854 Act89. The second or "flexible" view of the exercise of the interlocutory injunction power in these cases is exemplified in Chappell v TCN Channel Nine Pty Ltd90 and in cases following and applying it91. These cases rightly stress the application in this field of the general principles exemplified in Beecham. However, they give rise to two difficulties. The first difficulty is that the cases which advocate "flexibility" tend to give insufficient weight to the range of significant rights asserted on applications to restrain quia timet defamatory publications. A plaintiff asserts interests in character and reputation, while the defendant may assert what are special considerations derived from 17th and 18th century events which have been regarded in Britain as part of its constitutional history92. 88 [1961] NSWR 1043 at 1048. See also Church of Scientology of California Incorporated v Reader's Digest Services Pty Ltd [1980] 1 NSWLR 344 at 349-350; Shiel v Transmedia Productions Pty Ltd [1987] 1 Qd R 199; and, in New Zealand, TV3 Network Services Ltd v Fahey [1999] 2 NZLR 129 at 133. 89 Common Law Procedure Act 1899 (NSW), ss 176-179. 90 (1988) 14 NSWLR 153. 91 These include National Mutual Life Association of Australasia Ltd v GTV Corporation Pty Ltd [1989] VR 747 and Jakudo Pty Ltd v South Australian Telecasters Ltd (1997) 69 SASR 440. 92 For example, in the third edition of his work, Introduction to the Study of the Law of the Constitution, published in 1889, Dicey devoted Ch 6 to "The Right to Freedom of Discussion". Two special (and related) considerations which underpinned the denial of jurisdiction in the Court of Chancery to enjoin publication of defamatory matter were identified by Lord Cottenham LC in Fleming v Newton93. He asked94: "how the exercise of such a jurisdiction can be reconciled with the trial of matters of libel and defamation by juries under the 55 Geo III, c 42, or indeed with the liberty of the press. That act appoints a jury as the proper tribunal for trial of injuries to the person by libel or defamation; and the liberty of the press consists in the unrestricted right of publishing, subject to the responsibilities attached to the publication of libels, public or private."95 The reference to "the liberty of the press" reflected the statement by Lord Mansfield in R v Shipley96 that "[t]he liberty of the press consists in printing without any previous licence, subject to the consequences of law". The statutory system of press licensing in England had lapsed in 1695 and 13 proposals over the next decade for its revival had come to nothing97. (The unsuccessful attempts by Governor Darling to institute a press licensing system are a landmark in the constitutional history of New South Wales98.) There remained available to the Executive Government in England the power to prosecute the offences of criminal and seditious libel and this then led to great controversy as to the respective functions of judge and jury in such trials. The dispute culminated at the end of the 18th century in the passage of Fox's 93 (1848) 1 HLC 363 [9 ER 797]. 94 (1848) 1 HLC 363 at 376 [9 ER 797 at 803]. 95 Fleming v Newton was an appeal from Scotland; hence the reference to the Jury Trials (Scotland) Act 1815 (UK), 55 Geo III c 42. It is apparent that the Lord Chancellor was referring to the 1815 statute as it had been amended, in particular, by the Jury Trials (Scotland) Act 1819 (UK) (59 Geo III c 35). 96 (1784) 4 Dougl 73 at 170 [99 ER 774 at 824]. The earlier writings to the same effect by Blackstone influenced the initial reading of the denial by the First Amendment to the Congress of power to legislate "abridging the freedom of speech, or of the press" as importing no more than a freedom from prior restraint: Story, Commentaries on the Constitution of the United States, (1833), vol 3, 97 Deazley, On the Origin of the Right to Copy, (2004) at 1-29. 98 Bennett, Sir Francis Forbes, (2001) at 83-100. Libel Act 1792 (UK)99, and its subsequent judicial adoption for civil trials, to which reference has been made earlier in these reasons. The remarks by Lord Cottenham LC in Fleming v Newton manifest the reluctance by the courts of equity to participate in any indirect reinstatement of a licensing system by a method of prior restraint by injunctive order. The injunction (interlocutory or final) was a prior restraint and the decision was that of a judge alone. The jurisdictional objection was to disappear later in the 19th century, but distaste for prior restraint and respect for the role of the jury remained significant for the administration of the interlocutory injunction100. Section 21 of the 2005 Act confers upon each party in defamation proceedings in the Supreme Court an election for jury trial, subject to the power of the Supreme Court to order otherwise101. (However, s 22(3) of the 2005 Act reserves to the judicial officer the determination of the amount of any damages and unresolved issues of law and fact relating to that determination.) The second difficulty with the "flexible" approach is that it leads too readily to an assumption that all that is involved here is the exercise of an unbounded discretion, which thereafter is insusceptible of appellate interference. The course of the present litigation demonstrates that hazard. The present case The "rigid" approach of Stocker was rejected by the primary judge. However, his Honour proceeded on the basis that he had "an unfettered discretion" and concluded: "My view is that, in general, it is not for the public benefit that the media should publicly allege that a person has committed crimes of which he or she has not been convicted, whether or not there are currently proceedings afoot with respect to the crimes. It is instead in the public interest that such allegations should usually be made to the public only as a result of charges and subsequent conviction. That the media on occasions makes such allegations is often referred to as 'trial by media', of 99 32 Geo III c 60. 100 See the judgment of Fry J in Thomas v Williams (1880) 14 Ch D 864 at 870-871 and, more recently, that of Brooke LJ in Greene v Associated Newspapers Ltd [2005] QB 972 at 977. 101 cf Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 at 409 [116] respecting s 7A of the Defamation Act 1974 (NSW). which it appears the plaintiff complained to the Mercury. However, so far as concerns the imputation that the accused is a multiple killer of children, a more appropriate description in this case would be 'conviction by media' ... There will, of course, be cases when in the light of prior public statements by the person who is being defamed, or the public conduct of that person, it will be for the public benefit to publish allegations of that kind to the general public, but I have difficulty seeing that this is such a case. It is sufficient to say that the claim of the defendants to 'public benefit' may well be unsuccessful." Several points are to be made here. First, the issue was not whether to deny the plaintiff interlocutory relief would be to encourage "trial by media" or an outcome identified by some other evidently pejorative description. The issue differed in form and substance. It was whether, having regard to the nature of the rights asserted, including the special considerations, well rooted in Australian law, which caution equitable intervention to impose a prior restraint upon publication, and other relevant matters including the apparent weakness or strength of the proposed defence under s 15 of the 1957 Act, the plaintiff's case appeared sufficiently strong to pass on to the second inquiry, respecting the balance of convenience. The pursuit of these two inquiries by a court of equity in the circumstances of the particular case is hindered, not advanced, by the taking of the apparent refuge offered by such terms as "rigid" and "flexible". Secondly, the ABC correctly submits that the primary judge conflated the requirement of "public benefit" in s 15 of the 1957 Act with the more general, and more profound, issue involved in the policy of the law respecting prior restraint of publication of allegedly defamatory matter. The stance taken by the courts against prior restraint was not adopted in innocence of the malign influence, on occasion, which may be exerted by media of mass communication. Indeed, in R v Shipley102, Lord Mansfield, after speaking of the liberty to print without previous licence, continued: "The licentiousness of the press is Pandora's Box, the source of every evil. Miserable is the condition of individuals, dangerous is the condition of the State, if there is no certain law, or, which is the same thing, no certain administration of law, to protect individuals, or to guard the State." As in other fields103, the policy of the law struck here represents a particular balance between competing interests. With respect to tortious liability to be 102 (1784) 4 Dougl 73 at 170 [99 ER 774 at 824]. 103 See Cattanach v Melchior (2003) 215 CLR 1 at 32-35 [70]-[75]. determined at trial, that balance for this case is struck by statute, the 1957 Act. With respect to interlocutory restraint by injunction, attention must be paid to the case law as analysed in these reasons. In his dissenting judgment in the Full Court, Slicer J correctly said of the treatment by the primary judge of the notion of "public benefit": "Irrespective of the import of the language when used in consideration of the tort of defamation, I do not accept, with due respect to the learned primary judge, that any synonymity, if such be the case, transfers into the principle of injunctive restraint of publication. The existence of a defence is a relevant factor, but prohibition of publication is governed by different legal principle." There is a further matter. As the Chief Justice and Crennan J explain in their reasons, the general character of Mr O'Neill may well assume such importance at a trial as to be followed by an award of no more than nominal damages. That prospect is a powerful factor in considering the balance of convenience to favour the denial of interlocutory relief. Conclusion and orders The upshot is that the majority of the Full Court erred in upholding the decision of the primary judge. That decision proceeded upon wrong principle104. The appeal to this Court should be allowed. Section 37 of the Judiciary Act 1903 (Cth) authorises this Court on allowing an appeal to give such judgment as might have been given in the first instance. The outcome in this Court is to be determined on the state of the law at the time of the judgment of the Full Court on 29 August 2005, before the commencement of the 2005 Act105. It is unnecessary to decide here whether, if the interlocutory relief were to be permitted by this Court to continue, then, upon subsequent application to the Supreme Court by the ABC, a further order would be appropriate because the enforcement of the existing order would be unjust in the light of changes to the 104 House v The King (1936) 55 CLR 499 at 505. 105 Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73 at 85, 87, 109-110, 112-113. law made by the 2005 Act106. Nor is it appropriate here to enter upon the prospects of success in any action by Mr O'Neill which might be brought under the 2005 Act following publication by the ABC of "The Fisherman" after the dissolution of the injunction now in force. The Chief Justice and Crennan J emphasise that the case against the grant of interlocutory relief was very strong. We agree. It follows that in addition to the appeal to this Court being allowed, orders should be made to set aside the orders of the Full Court, allow the appeal to that Court, and set aside the orders of the primary judge so as to dismiss the interlocutory application filed on 15 April 2005, in so far as it was made against the ABC. This will require variation of Order 1 of the orders made by Crawford J on 22 April 2005 so as to remove any prohibition upon the ABC. The position respecting costs is stated by the Chief Justice and Crennan J. 106 See Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 178; Trade Practices Commission v Milreis Pty Ltd (No 2) (1978) 32 FLR 234 at 241; Harrison Partners Construction Pty Ltd v Jevena Pty Ltd (2005) 225 ALR 369 at 373-374. Kirby KIRBY J. This Court is a court of error. This feature derives from the nature of an "appeal" to it, as provided by the Constitution107, as interpreted by past decisions108. Although the Court can hear new arguments, raising fresh points of law addressed to the record109, it cannot receive new evidence in appeals. Absent demonstrated error, it has no authority to substitute its own opinion on the merits of the case decided below110. Least of all, in default of error, can this Court substitute its opinion for a discretionary order of a judge possessed of the requisite jurisdiction and powers. Above all, it may not do so in a discretionary order made at an interlocutory stage in the exercise of the practice and procedure of a court of trial111. Were this Court to assume that function, it would reward those with "long pockets", determined to use their money and power to the disadvantage of vulnerable adversaries112. Such an intrusion would be alien to the functions of this Court. An appeal is before the Court from an order of the Full Court of the Supreme Court of Tasmania113. By majority114, that Court dismissed an appeal against an interlocutory injunction issued four months earlier by a judge of the Supreme Court (Crawford J115). That injunction, granted on the usual terms, 107 Constitution, s 73. 108 See eg Mickelberg v The Queen (1989) 167 CLR 259 at 269-271, 297-299; Eastman v The Queen (2000) 203 CLR 1 at 12-13 [16]-[18], 25 [73], 35 [111], 63 109 Gipp v The Queen (1998) 194 CLR 106 at 116 [23], 153-155 [135]-[138]; Crampton v The Queen (2000) 206 CLR 161 at 171-174 [12]-[21], 179-185 [38]- 110 Lowndes v The Queen (1999) 195 CLR 665 at 679 [40]; AMS v AIF (1999) 199 CLR 160 at 179 [47], 222-223 [184]. 111 House v The King (1936) 55 CLR 499 at 504-505; Australian Coal and Shale Employees' Federation v The Commonwealth (1953) 94 CLR 621 at 626-628; Mace v Murray (1955) 92 CLR 370 at 377-378. 112 In re the Will of F B Gilbert (dec'd) (1946) 46 SR (NSW) 318 at 323; cf Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 at 163-164, 173-174. 113 Australian Broadcasting Corporation v O'Neill [2005] TASSC 82. 114 Evans and Blow JJ; Slicer J dissenting. 115 O'Neill v Australian Broadcasting Corporation [2005] TASSC 26. Kirby the defendants the proceedings, relevantly restrained the Australian Broadcasting Corporation ("the ABC"), "until judgment in this action or earlier order"116, from broadcasting or otherwise publishing to the general public any prohibited part of a documentary film known as The Fisherman. The prohibited part was that which "imputes or implies" that Mr James O'Neill ("the respondent") was "responsible for or is suspected of being responsible for the disappearance or murder of children commonly referred to as the Beaumont children or that [he] is a multiple killer of children"117. As was recognised in the Full Court by Blow J (who wrote the reasons of the majority) the issue for decision was not whether the Full Court would grant the interlocutory injunction on the same facts, if the application were presented to its judges at first instance. Consistent with binding legal authority and principle, the issue was whether the ABC had demonstrated an error on the part of the primary judge that would warrant disturbance of his interlocutory order118. Such an error might involve a misunderstanding of the governing law or a demonstration that the primary judge had acted on a wrong principle119 or had misstated facts or reached a conclusion that was "plainly wrong"120. But error was essential to intervention. Consistently with this approach, the Full Court rejected the ABC's appeal. The majority in the Full Court were of the view that the primary judge had taken into account a correct understanding of the applicable legal principles in exercising his discretion to grant the interlocutory relief and a correct appreciation of the evidence. The Full Court majority also concluded that the primary judge had not applied a wrong principle121. At the threshold of the ABC's appeal to this Court lies the question whether the majority of the Full Court erred in so concluding. If it did not, that is the end of the appeal. Simply holding a different opinion of the merits of the application or reaching a different conclusion on the facts would not be sufficient to sustain intervention by this Court and the substitution of different orders. At least this would be so unless the appellate court were convinced that the earlier decision, for whatever reason, was "plainly wrong". 116 [2005] TASSC 26 at [37]. 117 [2005] TASSC 26 at [37]. 118 [2005] TASSC 82 at [50]. 119 House v The King (1936) 55 CLR 499 at 504-505. 120 Mace v Murray (1955) 92 CLR 370 at 377-378 citing Clark v Edinburgh & District Tramways Co Ltd 1919 SC (HL) 35 at 37. 121 [2005] TASSC 82 at [82]. Kirby The case in context Grave imputations: The interlocutory injunction contested in these proceedings resulted from an action brought by the respondent against the ABC and others in respect of the documentary film The Fisherman. The film was shown to a limited audience at the Hobart Summer Film Festival in January 2005. The ABC intends to broadcast the film nationally if relieved of the injunction ordered by the primary judge. Neither at trial, nor on the appeal, did the ABC tender a copy of the film, or excerpts of it, or a transcript. It was therefore necessary for the courts below (as it is now for this Court) to proceed, in respect of the contents of the film, by reference to snippets of information arising out of the knowledge of the respondent gleaned from interviews with him and from published reports on the showing of the film at the Hobart Summer Film Festival. In a document negotiated between the representatives of the parties when they were before the primary judge, it was agreed that the film was capable of conveying three imputations: (1) that the respondent is a suspect in the disappearance of the Beaumont children; (2) that he is a "suspect in the murder of the Beaumont children"; and (3) that he is a "multiple killer of children"122. The Beaumont children were three young members of a family who disappeared in South Australia in 1966. Police suspect that they were murdered. They have never been found or accounted for. No one has been charged or tried, still less convicted, in connection with their disappearance. Without more, to say of a person that he is a "multiple killer of children" and is a suspect in the notorious disappearance and murder of the Beaumont children, is to defame that person in one of the most serious ways imaginable. In every society, a special fear and revulsion is reserved for child murderers. From earliest infancy we learn to fear them. To accuse a person of being a "multiple killer of children" and of being a suspect in still more unsolved disappearances and murders is to impute to that person the most heinous of wrongdoings. It is to expose that person to the fear and hatred of ordinary decent individuals. It is gravely defamatory. It may be the law that a person, subject to such a defamation, has no remedy to secure an interlocutory order of the kind made at the respondent's request by the primary judge against an intending publisher. The particular circumstances may deny the possibility of such relief. However, in the past, Australian courts have granted interlocutory injunctions of such a kind to prevent 122 [2005] TASSC 26 at [3]. Kirby the publication of matters containing imputations infinitely less serious123. It was common ground that the South Australia Police had investigated the allegations of the respondent's involvement in the disappearance of the Beaumont children; had completed their investigation; and had no present intention to bring proceedings against the respondent. In these circumstances, to broadcast the imputation to the nation (and beyond) would seem to be about as grave a threatened defamation as it would be possible to imagine. If an interlocutory injunction were not available in such a case, it would be almost impossible to imagine any defamation that would warrant such interlocutory relief124. Temporary relief: The second contextual consideration is likewise mentioned by Blow J at the outset of his reasons in the Full Court125. It is the very nature of an interlocutory injunction that it will be effective for a limited period only. In the present proceedings, it was sought, and granted, in support of the trial of the respondent's action in the Supreme Court. Those proceedings had been commenced when the injunction was granted. Amongst the relief claimed in those proceedings was a prayer not only for damages for defamation but also for a permanent injunction of the broadcast or publication of The Fisherman in so far as it imputes that the respondent was responsible for, or is suspected of being responsible for, the disappearance or murder of the Beaumont children or is a "multiple killer of children". "If the action is brought to trial, it might be held that the documentary is defamatory of the respondent, and a permanent injunction might be granted. If not, the televising of the documentary will have been delayed, rather than prevented. If the [ABC] has paid for a documentary that should never go to air, the existing injunction works no injustice. If it has paid for a documentary which should be permitted to go to air, any injustice in delaying its transmission until this action has been determined would not be substantial, in a financial sense, in my view … the injunction appealed against restrains the publication of material concerning the alleged or suspected criminal activities of one man; it concerns events prior to his incarceration in 1975; and it is of a temporary nature. Because 123 See eg Chappell v TCN Channel Nine Pty Ltd (1988) 14 NSWLR 153. The imputation was that a sporting identity, who was of high public profile and a member of a sporting ethics committee, had engaged in an extra-marital affair. 124 See also the reasons of Heydon J at [170]. 125 [2005] TASSC 82 at [51]. 126 [2005] TASSC 82 at [51]. Kirby of those circumstances I think that, even if the injunction does work some injustice to the appellant in a non-financial sense, any such injustice is not substantial." In a previous appeal before this Court, Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd127, observations were made about the election of the ABC to contest an interlocutory injunction forbidding a broadcast. By its terms, such an order simply restrains the broadcast until the trial or other order. The logic of the order is that it is at the trial, when all relevant evidence (including presumably the documentary film itself) is considered by the tribunal (probably a jury), that final decisions will be made, including as to the respondent's entitlement to any permanent injunctive relief. Instead of applying for an expedited hearing of the trial of the substantive action, the ABC, in these proceedings as in Lenah Game Meats, contested the provision of temporary protection until the asserted justification of the intended broadcast could be judged at trial. Callinan J, in circumstances not wholly dissimilar to the present, remarked that the "claimed need for urgency of communication to the public" has, on occasions, been "exaggerated"128: "[Earlier cases] show that the assertion that news is a perishable commodity often lacks foundation129 and the ends to which publishers may be prepared to go in pursuit of their own interests. The asserted urgency as often as not is as likely to be driven by commercial imperatives as by any disinterested wish to inform the public. It would be naive to believe that the media's priorities would be otherwise … It will be rare in fact that the public interest will be better served by partial truth and inaccuracy this Tuesday than balance and the truth on Friday week." Even if the delay in securing a hearing of the respondent's substantive proceedings against the ABC would, as here, have been more than a few weeks, it is hard to believe that it would have been as long as that occasioned by the interlocutory appellate process launched by the ABC. This is one reason why appellate courts are, and should be, reluctant to interfere in the provision of interlocutory injunctions. The course adopted suggests that the appeals have been brought by the ABC in an endeavour to prove a point that, even in so grave a defamation as that alleged here, free speech trumps not only the reputation of 127 (2001) 208 CLR 199 at 265-268 [159] ("Lenah Game Meats"). 128 Lenah Game Meats (2001) 208 CLR 199 at 305 [267]. 129 Contrast: The Observer and the Guardian v United Kingdom (1991) 14 EHRR Kirby the respondent, but also his right in principle130 to have his reputation protected until the contest can be decided on the merits in a full hearing131. Balance of interests: In this case, unlike Lenah Game Meats, the ABC did not seek to invoke the implied constitutional freedom of communication recognised by this Court132. By inference, both parties accepted that this was not a case where the intended broadcast could be characterised as one in respect of governmental and political matters of the type impliedly protected in the Constitution. Upon this basis, the issues in this appeal must be decided without the complication of any claimed reliance on constitutional imperatives. This feature of Australian decisions, concerning the availability of interlocutory injunctions to restrain the exercise of freedom of speech and freedom of the press, distinguishes the case law in this country from that decided in the courts of the United States of America133. Because of the language of the First Amendment to the United States Constitution, and the way that its provisions have been interpreted by the Supreme Court, pre-publication injunctions are extremely rare in that country. Thus it has been said that even "the most repulsive speech enjoys immunity provided it falls short of deliberate or reckless untruth"134. In the United States, if the allegedly defamatory statements are directed at a "public figure" (a phrase widely defined) actual malice must be proved by clear and convincing evidence to establish a legal right sounding in damages135. This is not what the Constitution, statute law or the common law, provide in Australia. 130 See International Covenant on Civil and Political Rights, Art 17. 131 cf [2005] TASSC 82 [38] citing Lenah Game Meats (2001) 208 CLR 199 at 285 [211] and R v Central Independent Television Plc [1994] Fam 192 at 203 per Hoffmann LJ. See also the reasons of Heydon J at [177]. 132 Theophanous v Herald and Weekly Times Ltd (1994) 182 CLR 104; Stephens v West Australian Newspapers Ltd (1994) 182 CLR 211; Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 568-575. 133 For a general comparison of approaches to defamation law, see Kenyon, Defamation: Comparative Law and Practice, (2006) at 239-280. 134 Linn v Plant Guard Workers 383 US 53 at 63 per Clark J delivering the opinion of the Court (1966); Letter Carriers v Austin 418 US 264 at 283-284 (1974). 135 New York Times Ltd v Sullivan 376 US 254 at 279-280 per Brennan J delivering the opinion of the Court (1964); Australian Law Reform Commission, Unfair Publication: Defamation and privacy, Report No 11, (1979) at 247-253. Kirby Unlike the United States, in Australia there is no constitutional presumption against prior injunctive relief136. Whilst free speech and the free press are important values in Australian law, they must find their expression and operation in a way that is harmonious with other legal values, including the protection of reputation, individual honour, privacy and the fair trial of legal proceedings. In this respect, Australian law appears to reflect more accurately the balance of rights that is found in statements of fundamental rights in international law137. Many of the submissions advanced by the ABC, both in the Full Court and in this Court, amounted to a repetition of its arguments of principle against interlocutory relief advocated in Lenah Game Meats. It is therefore necessary to say once again that only in the United States of America is the rule in favour of free speech and freedom of the press as unconfined as the appellant advocated. Under our Constitution, there is no express prohibition equivalent to that in the United States Constitution. Analogous principles have been rejected by this Court138, by courts in other common law countries139 and by law reform bodies asked to review Australian law in this respect140. The uniform defamation law that came into force in Australia after these proceedings were heard141, like the Australian law before it142, rejects the extreme 136 Organization for a Better Austin v Keefe 402 US 415 at 419 (1971); Pittsburgh Press Co v Pittsburgh Commission on Human Relations 413 US 376 at 389-390 (1973); Gilbert v National Enquirer, Inc 43 Cal App 4th 1135 (1996); 51 Cal Reptr 2d 91 at 96 (2nd Dist); Hajek v Bill Mowbray Motors Inc 645 SW 2d 827 at 831 (Texas 1982); Wilson v Superior Court of LA County 13 Cal 3d 652 at 657-658 (1975); 119 Cal Reptr 468. 137 International Covenant on Civil and Political Rights, Art 17. See Lenah Game Meats (2001) 208 CLR 199 at 282-283 [201]-[202]. 138 Theophanous (1994) 182 CLR 104 at 134. 139 Reynolds v Times Newspapers Ltd [2001] 2 AC 127 at 203-204, 215; Stone and Williams, "Freedom of Speech And Defamation: Developments in The Common Law World", (2000) 26 Monash University Law Review 362 at 364. 140 Australian Law Reform Commission, Unfair Publication: Defamation and privacy, Report No 11, (1979) at 77-78 [146]. 141 Relevantly the Defamation Act 2005 (Tas) commencing 1 January 2006. It was common ground that the present appeal was to be determined by reference to the previous statute. 142 Relevantly, Defamation Act 1957 (Tas). Kirby interlocutory and semi-absolute protection of free speech and the free press that prevails, for constitutional reasons, in the United States. Unsurprisingly, the Australian law this different constitutional and decisional setting of the relevant law. None of this is to say that defence of freedom of speech and of a free press are not important values of Australian law. They are. But they are not absolute. In a particular case, they must be given effect in a way consonant with the competing legal values. injunctions against publication reflects The competing values in Australia extend to protecting individuals against gross humiliation, irreparable damage, public and gratuitous harm and other like wrongs143. In every case, the court from which relief is sought must weigh the competing interests at stake144. It will do so knowing that sometimes media power is abused and, when this happens, that courts are often the only institutions in society with the authority and the will to protect the individual from such abuse of power145. The facts and legislation The background facts: The facts of this case, so far as relevant, are stated in the reasons of Gleeson CJ and Crennan J146. Also explained there is the course of proceedings in the Supreme Court of Tasmania, with some reference to the successive reasons in that Court, both at first instance and on appeal147. One feature of the facts which the primary judge mentioned "by way of background" might be noticed148. In his affidavit in support of the interlocutory injunction, the respondent described how he had become involved in a farm associated with the prison in which he was serving his mandatory sentence of life imprisonment. He had been sentenced to that term in 1975. In the prison farm, he had developed an expertise in breeding insects and worms. In 1999 he was contacted by Mr Gordon Davie, formerly a detective and by then a journalist, who is named as the third defendant in the proceedings. Mr Davie played no part in this appeal. 143 Lenah Game Meats (2001) 208 CLR 199 at 275-276 [180]-[183]. 144 Lenah Game Meats (2001) 208 CLR 199 at 285 [212]. 145 Lenah Game Meats (2001) 208 CLR 199 at 276 [183]. 146 Reasons of Gleeson CJ and Crennan J at [3]-[8]. 147 Reasons of Gleeson CJ and Crennan J at [9]-[15]. 148 [2005] TASSC 26 at [6]. Kirby According to the respondent's affidavit, Mr Davie represented to the respondent a desire to make a documentary film about the latter's activities at the worm farm. The respondent gave permission for the filming of his activities at that farm. He signed a proffered agreement with the ABC permitting it to prepare a film with the working title The Worm Farm149. The respondent said that he was induced into taking part in the film by an assurance that it would be confined to his activities at the worm farm and would not be about the crime for which he had been convicted or any other allegations against him of a criminal nature150. Confirmation that this was how Mr Davie represented himself to the respondent is apparent from letters that passed between the two men from 1999 onwards. The respondent indicates an awareness of Mr Davie's deception in a letter sent by him dated 24 March 2003. However, in his response, Mr Davie stated that "it was and still is my view that the person who was sentenced to imprisonment in 1975 is a different person to the one I have been visiting since September 1999". Mr Davie suggested that conducting further interviews would be "one of the best ways of portraying this fact"151. There was no suggestion that the documentary film would do otherwise. In fact, before The Fisherman was screened at the Film Festival in Hobart in January 2005, The Mercury newspaper in Hobart described it as a documentary that followed "former Victorian detective Gordon Davie as he interviews prisoner James O'Neill and tracks his path on the [Australian] mainland before he came to Tasmania in the 1970s". The Mercury reports Mr Davie as saying that he thought that what he had read about the plaintiff in 1999 "showed a strong pattern of behaviour and [he] wondered if O'Neill could have committed other crimes before arriving in Tasmania". Apparently, it was for this purpose that Mr Davie developed his relationship with the respondent. It was not to portray the respondent's activities at the worm farm. It was to test his possible involvement in the deaths of eight children152. As the primary judge acknowledged, the foregoing facts represent largely background material of little direct relevance to the grant, or refusal, of an interlocutory injunction against the ABC. However, they show how the respondent was "badly misled and deliberately told untrue representations by Mr Davie concerning the proposed content of the documentary"153. Tricks, 149 [2005] TASSC 26 at [6]. 150 [2005] TASSC 26 at [7]. 151 [2005] TASSC 26 at [8]. 152 [2005] TASSC 26 at [9]. 153 [2005] TASSC 26 at [10]. Kirby deceptive conduct and false representations are not uncommon features of media conduct in cases of this kind154. Media interests might assert that it is the only way to "get the story". Yet conduct of such a kind is not wholly immaterial when a party, with the requisite interest and a relevant legal right, comes before a court seeking an interlocutory injunctive remedy that is equitable both in history and in character155. In the absence of the actual film, or of excerpts or a transcript or equivalent record, the statements attributed to Mr Davie represent the best evidence available to the primary judge concerning the content of The Fisherman film, which the ABC wished to broadcast. On the face of things, it is a film portraying the respondent for the purpose of propounding and illustrating Mr Davie's hypothesis and doing so contrary to the undertaking given to the respondent. It was built on a false relationship which Mr Davie allegedly created by his pretended interest in other things. The potential for distortion, one-sidedness and partiality in a film produced in such a way, under such conditions, is not inconsiderable. It was open to the primary judge to conclude that the risk of presenting the respondent unfairly, in the worst possible light, was very large indeed. The legislation: The interlocutory injunction was sought as incidental to the respondent's action for defamation. At the relevant time, the law on that subject was governed in Tasmania by the Defamation Act 1957 (Tas). Importantly, in that State, it was not sufficient, at the time this action was brought, for a publisher, or proposed publisher, to prove that the matter complained of was true. To establish the defence of truth, it was also necessary to prove that the publication was one "for the public benefit"156. This added ingredient presented a question of fact for ultimate decision by the jury (or judge) assigned to try the case. This was a point of importance for the primary judge in deciding whether the legal foundation had been laid for the provision of interlocutory injunctive relief. The decision of this Court in Lenah Game Meats determined the ambit of the jurisdiction and power of the Supreme Court of Tasmania to grant an injunction under s 11(12) of the Supreme Court Civil Procedure Act 1932 (Tas). 154 cf Lenah Game Meats (2001) 208 CLR 199 at 262-263 [151]. 155 In the Full Court, Slicer J also referred to the representation. See [2005] TASSC 82 at [12]-[15]. See also the reasons of Heydon J at [179]-[180]. 156 Defamation Act 1957 (Tas), s 15(b). See [2005] TASSC 82 [25]; cf Defamation Act 2005 (Tas), s 25 which now provides a defence of substantial truth with no requirement of public benefit. Kirby Following Lenah Game Meats it was common ground in this appeal that s 11(12) did not expand the jurisdiction and power of the Supreme Court to permit the grant of an interlocutory injunction at large, where no legal or equitable rights were presented for judicial determination157. Here, the primary judge was willing to accept, on the evidence, that the ABC might prove that the respondent was "suspected" of being involved in the disappearance and possible murder of the Beaumont children158. Although the South Australia Police were "reported as saying that they had found no evidence to support the [respondent's] involvement in the disappearance of the Beaumont children and that he had been discounted from their inquiries"159, the Commissioner of Tasmania Police had been reported in The Mercury newspaper as saying that the respondent could be responsible for the kidnapping of the Beaumont children in 1966. In such circumstances, proof of the truth of the fact of "suspicion" might not be difficult for the ABC. Likewise, if the respondent's additional confession (which he now disputes), signed in May 1975, of the murder of another boy, might conceivably lay a basis on which the ABC could establish the truth of the imputation that the respondent was "a multiple killer of children". This assumes that "multiple", in this context, meant, or included, two such killings, a meaning that would be open to contest. For the primary judge, however, the problem faced by the ABC was that, under the Tasmanian law, as it then stood, the ABC would be obliged to prove that the broadcast or publication would be "for the public benefit". The primary judge said160: "[A] greater problem for the defendants will be to establish that the publication of the imputations will be for the public benefit. The submissions of counsel for the defendants about the matter at the hearing were slight in substance and in content. It appears that was due to a belief that counsel for the plaintiff had conceded the issue of public benefit. I had not understood that such a concession had been made." A check of the sound recording by the judge confirmed his impression. Counsel for the respondent had accepted that the subject matter of the proposed broadcast would be on a subject of "public interest". This did not extend to an 157 Lenah Game Meats (2001) 208 CLR 199 at 216-218 [8]-[16], 231-232 [59]-[61], 239-248 [86]-[105]. See also the reasons of Gleeson CJ and Crennan J at [2]. 158 [2005] TASSC 26 at [24]. 159 [2005] TASSC 26 at [14]. 160 [2005] TASSC 26 at [25]. Kirby acceptance that it would be "for the public benefit" for the respondent to be accused in such a way of additional crimes of which he had never been charged, and crimes for which he had been excluded from involvement by the police force with the relevant responsibility. The primary judge upheld the respondent's objection because he was concerned that the proposed broadcast and publication would amount to "trial by media". Indeed, as described, it would represent "conviction by media". And it would amount to such a conviction without the benefit of any "trial, as we understand that word". The primary judge concluded161: "I can see no aspect of public benefit in the making public of allegations that the [respondent] was responsible for the disappearance and murder of the Beaumont children or that he is suspected of being responsible. The responsibility owed to the public with regard to the investigation of crime is entrusted by our society to the police and other public investigators and prosecutors. If there is evidence available that might assist the authorities to investigate the disappearance of the children in question, it should be made available to them." The majority in the Full Court saw no error in this approach162. It is therefore important to keep in mind the content of the defence of justification under Tasmanian law as it stood when the decisions below were made. It was important to the approach of the courts below to the claim for an injunction pending the hearing of the trial of the action. Various other provisions of the Defamation Act 1957 were invoked by the ABC163. However, in the way the appeal proceeded in this Court, it is not necessary to consider these. Nevertheless, it should be noted that as a convicted prisoner, the respondent was under a procedural disability restricting his capacity to commence his action for defamation in the Supreme Court. The significant disability that formerly applied to convicted felons164 was removed by statute in Tasmania in 1991165. The respondent still required leave of the court to commence his action. He had not sought that leave. Very properly, the ABC 161 [2005] TASSC 26 at [28]. 162 [2005] TASSC 82 at [76]. 163 [2005] TASSC 26 at [30]-[31]. 164 cf Dugan v Mirror Newspapers Ltd (1978) 142 CLR 583 at 587, 592, 601-603; cf 165 Prisoners (Removal of Civil Disabilities) Act 1991 (Tas), s 4(2). Kirby expressly disavowed any reliance on that procedural impediment when the appeal came before the Full Court166. It was not revived as an issue in this Court. Common ground I have already said that there was common ground between the parties that this case did not attract any implied constitutional freedom to publish the matter complained of. It was also agreed, in accordance with Lenah Game Meats, that to secure an interlocutory injunction under the applicable law, the respondent had to demonstrate a legal or equitable right which was to be determined at trial in respect of which final relief was sought there167. In these proceedings, unlike Lenah Game Meats, there was no doubt that the respondent had identified a legal right that was to be determined at the trial and in respect of which final relief was sought. That right concerned his entitlement to remedies under the Defamation Act 1957. Those remedies included the claim to a permanent injunction against the publication by the ABC of the identified matter. The ABC did not contest that, the defences aside, the publication was actionable as a defamation. Nor, in the light of the evidence, could it have done so. The respondent, for his part, did not deny that the grant of an interlocutory injunction, to prevent the publication of a matter the subject of proceedings for defamation before trial, was rare in Australia. He accepted that applications of the present kind were to be approached with care and caution and that relief was not lightly afforded. One of the reasons for this principle of restraint, in a case such as the present, is that there are notorious instances where media persistence in questioning the fairness and correctness of criminal process have beneficially affected outcomes where the formal process is claimed to have failed168. What the respondent did contest was that these principles of restraint had hardened into a "fixed rule" against the provision of such relief, whether generally or in cases where the proposed publisher had indicated an intention to defend the proceedings at trial, specifically on the basis of justification of the truth of the matter complained of. 166 [2005] TASSC 82 at [2] per Slicer J. 167 Lenah Game Meats (2001) 208 CLR 199 at 218 [16] per Gleeson CJ; 232 [61] per Gaudron J; 241 [91] per Gummow and Hayne JJ; cf at 270-271 [167] of my own reasons. 168 See Stuart v The Queen (1959) 101 CLR 1; Kirby, "Black and White Lessons for the Australian Judiciary", (2003) 23 Adelaide Law Review 195. Normally, the cases have involved assertions of innocence not further guilt of the prisoner. Kirby The respondent also contested the ABC's submissions that his was not an exceptional case warranting such relief; that damages would be an adequate remedy for any wrong done to him; and that his reputation was already so poor, by reason of his conviction of the murder of one young boy, that he would suffer no significant additional damage by reason of the intended broadcast to warrant the issue of an interlocutory injunction against such a broadcast. For its part, the ABC accepted that the only real damage that it would suffer by the continuance of the injunction to the trial of the respondent's action was a delay in the resolution of its right to publish the film. On this footing, although not trivial or at this stage permanent, any damage suffered by the ABC was temporary and potentially transient. The issues The following issues arise for determination in this appeal: The rigid or flexible approach issue: Whether the agreed significance for the grant of an interlocutory injunction of the values of free speech and a free press169 was such that relief, by way of prior restraint, should virtually always be refused where the publisher indicated an intention to defend the proceedings and where such defence was not obviously futile or bound to fail? Or whether the general principle applicable to the grant of interlocutory injunctive relief, as stated in Beecham Group Ltd v Bristol Laboratories Pty Ltd ("Beecham")170 and refined in subsequent cases171, applied to such cases so that, in each instance, the issue was whether the applicant has demonstrated that there was a serious question to be tried and that the balance of convenience is in favour of the grant of the injunction sought? Flexible relief – error of principle issue: Whether, if the answer to issue (1) is that the "rigid rule" approach to the provision of an interlocutory injunction in advance of the trial of an action for defamation is rejected, the judges below erred in failing to give proper weight to the consideration 169 In this context the value of a 'free press' applies equally to the value of free expression in other forms of public media including radio and television. 170 (1968) 118 CLR 618. 171 Australian Coarse Grain Pool Pty Ltd v Barley Marketing Board of Qld (1982) 57 ALJR 425 at 425-426 per Gibbs CJ; 46 ALR 398 at 398-399; Murphy v Lush (1986) 60 ALJR 523 at 524; 65 ALR 651 at 653; Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 153-154 per Mason ACJ. Kirby of the value of free speech and of a free press so that an error of principle has been demonstrated warranting the intervention of this Court? The bad reputation issue: Whether the courts below erred in failing to pay any, or adequate, regard to the bad reputation which the respondent already had? An adverse reputation had resulted from the respondent's conviction and sentence to life imprisonment for the murder of a young child, and the alleged confession in 1975 to the additional murder of another child. It was suggested that any added damage to his reputation would be minimal, rendering it probable that, at most, he would recover only nominal damages were he to succeed in his action, so that an interlocutory injunction should not be granted. Was this a case where damages thus constituted an adequate and appropriate remedy for any wrong done to the respondent? Or would acceptance of that submission postulate a class of defamation-free plaintiffs, diminishing the principle of equality before the law for all persons such that none are put beyond the protection of the law where they can prove that they have been defamed without the availability of an applicable legal defence? In their joint reasons, Gleeson CJ and Crennan J appear to accept172 the "flexible rule" for the grant of interlocutory injunctions before the trial of an action for defamation and the applicability to such an action of the general principles governing interlocutory injunctions as stated by this Court in Beecham173, and appropriately modified in Australian Coarse Grain Pool Pty Ltd v Barley Marketing Board of Qld,174 Murphy v Lush175, and Castlemaine Tooheys Ltd v South Australia176. However, they conclude that the primary judge, and the Full Court, erred in failing to approach the application for the interlocutory injunction with "exceptional caution". In other words, Gleeson CJ and Crennan J 172 Reasons of Gleeson CJ and Crennan J at [19]. 173 (1968) 118 CLR 618 at 622-623. Gleeson CJ and Crennan J also refer to the reasoning of Doyle CJ in Jakudo Pty Ltd v South Australian Telecasters Ltd (1997) 69 SASR 440 at 442-443, which appropriately describes the three-stage test generally applicable to applications for interlocutory injunctions in respect of defamatory material. 174 (1982) 57 ALJR 425 at 425-426 per Gibbs CJ; 46 ALR 398 at 398-399, where the threshold requirement of a "prima facie case" was substituted for the need to show there was a "serious question to be tried", applying American Cyanamid v Ethicon Ltd [1975] AC 396. 175 (1986) 60 ALJR 523 at 524; 65 ALR 651 at 653. 176 (1986) 161 CLR 148 at 153-154 per Mason ACJ. Kirby the Full Court, suggest that insufficient weight was given to the public interest in free speech when determining the "balance of convenience". They caution against court interference with the "right of free speech by prior restraint"177 and state that only these considerations as "influential"178. In their view, these considerations are decisive. Gleeson CJ and Crennan J also conclude that because of the respondent's already poor reputation only nominal damages might be awarded to him and that this consideration had likewise not been taken into account as a consideration against providing, and upholding, the injunction179. These are the errors of principle which are said to authorise the substitution by this Court of contrary orders. I agree with their resolution of the first issue but I disagree with their resolution of the second and third issues. treated In their joint reasons, Gummow and Hayne JJ hold that the primary judge conflated the requirement of "public benefit" in s 15 of the Defamation Act 1957 with the general question of "public interest in free speech"180. They also hold that his Honour mistook the nature of his discretion and narrowly focused on whether it would be for the "public benefit" for the plaintiff to face "trial" or "conviction" by the media181. On the third issue outlined above, Gummow and Hayne JJ record their agreement with the reasons of Gleeson CJ and Crennan J. For the reasons that follow, I do not agree with these assessments. Relevantly, Gummow and Hayne JJ also argue that the test stated in the phrase "serious question to be tried", as understood from statements of Lord Diplock in American Cyanamid v Ethicon Ltd182, should not be followed183. Rather, that requirement should be read consistently with the "considerations emphasised in Beecham"184, whereby the "governing consideration" is that the "probability of ultimate success depends on the nature of the rights asserted and 177 Reasons of Gleeson CJ and Crennan J at [32]. 178 Reasons of Gleeson CJ and Crennan J at [32]. 179 Reasons of Gleeson CJ and Crennan J at [33]. 180 Reasons of Gummow and Hayne JJ at [86]. 181 Reasons of Gummow and Hayne JJ at [84]-[85]. 182 [1975] AC 396 at 407-408. 183 Reasons of Gummow and Hayne JJ at [71]. 184 Reasons of Gummow and Hayne JJ at [70]. Kirby the practical consequences likely to flow from the interlocutory order sought"185. With respect, I do not believe that this formulation is consistent with the approach repeatedly preferred in this Court in determining the threshold question of whether there is a "serious question to be tried"186. It diminishes the right of individuals to have serious questions tried on the evidence not pre-judged on limited predictions of success. This is not to deny that the propounded inquiry is relevant in determining whether the balance of convenience favours the grant of an interlocutory injunction. As the authorities attest, this is particularly the case when deciding whether to grant an interlocutory injunction to restrain an alleged defamation. But the legal entitlement to an injunction should not be confused with the secondary question of whether convenience favours it being issued. The flexible rule for injunctions in defamation Two approaches to relief: In England, it has long been the law that "once a defendant says he is going to justify [the matter complained of], that is the end of the case so far as an interim injunction is concerned"187. The "classic exposition"188 on the law with regard to the grant of interlocutory injunctions in actions of defamation in England was offered by Lord Esher MR in William Coulson & Sons v James Coulson & Co189: "To justify the Court in granting an interim injunction it must come to a decision upon the question of libel or no libel, before the jury decided 185 Reasons of Gummow and Hayne JJ at [71]. See also Beecham (1968) 118 CLR 186 Australian Coarse Grain Pool Pty Ltd v Barley Marketing Board (1982) 57 ALJR 425 at 425-426 per Gibbs CJ; 46 ALR 398 at 398-399; Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 153-154 per Mason ACJ; Jakudo Pty Ltd v South Australian Telecasters Ltd (1997) 69 SASR 440 at 442-443; National Australia Bank Ltd v Zollo (1995) 64 SASR 63 at 70-71. See also the persuasive reasoning of Diplock J in American Cyanamid v Ethicon Ltd [1975] AC 396 at 407: "The use of such expressions as 'a probability,' a 'prima facie case,' or 'a strong prima facie case' in the context of the exercise of a discretionary power to grant an interlocutory injunction leads to confusion as to the object sought to be achieved by this form of temporary relief". 187 Gatley on Libel and Slander, 8th ed (1981) at [1571] cited by Olney J in Lovell v Lewandowski [1987] WAR 81 at 94-95. 188 Duncan and Neill on Defamation, 2nd ed (1983) at [19.03]. See also Halsbury's Laws of England, 4th ed, vol 28, para 168. 189 (1887) 3 TLR 846 at 846. Kirby whether it was a libel or not. Therefore the jurisdiction was of a delicate nature. It ought only to be exercised in the clearest case, where any jury would say that the matter complained of was libellous, and where if the jury did not so find the Court would set aside the verdict as unreasonable. The Court must also be satisfied that in all probability the alleged libel was untrue, and if written on a privileged occasion that there was malice on the part of the defendant. It followed from these three rules that the Court could only on the rarest occasions exercise their jurisdiction." In the way of these things, common law judges sought to firm up these broad principles and turn them into hard and fast rules. Thus, in Fraser v Evans190, Lord Denning MR said: "The court will not restrain the publication of an article, even though it is defamatory, when the defendant says he intends to justify it or to make fair comment on a matter of public interest. That has been established for many years ever since Bonnard v Perriman191. The reason sometimes given is that the defences of justification and fair comment are for the jury, which is the constitutional tribunal, and not for a judge. But a better reason is the importance in the public interest that the truth should out. As the court said in that case192: 'The right of free speech is one which it is for the public interest that individuals should possess, and, indeed, that they should exercise without impediment, so long as no wrongful act is done'. There is no wrong done if it is true, or if it is fair comment on a matter of public interest. The court will not prejudice the issue by granting an injunction in advance of publication." This approach has been adopted in many cases and is commonly stated as a rule of law. It has been applied so as to take cases relating to defamation proceedings out of the category where the general principles applicable to interlocutory injunctions apply. This has been the approach observed in England193, Canada194 and New Zealand195. 190 [1969] 1 QB 349 at 360-361. 192 [1891] 2 Ch 269 at 284. 193 Bestobell Paints Ltd v Bigg (1975) 1 FSR 421 at 429-430; Khashoggi v IPC Magazines Ltd [1986] 1 WLR 1412 at 1417; [1986] 3 All ER 577 at 581. See also Holley v Smyth [1998] QB 726 at 740, 743-744. Kirby However, in Australia, appellate courts in most States have accepted a more flexible rule. They have acknowledged that the competing considerations of free speech and the free press, as well as reputation and privacy, can be accommodated adequately by the application of the normal principles for the grant of interlocutory injunctions. Thus the "flexible rule" has been adopted in New South Wales196, Victoria197, South Australia198, and more recently in Western Australia199. the "rigid approach"200. Obviously, if that approach expressed the applicable law, it would demonstrate an error on the part of the Full Court in these proceedings. Without more, it would warrant the intervention of this Court to reverse the order made by the primary judge. in Australia favours Some authority Preferring the flexible rule: Generally speaking, the rule adopted in Australia when an interlocutory injunction is sought in defamation cases, whilst involving a need to consider competing values of great importance, can nonetheless be adequately expressed within the framework of the general principles governing the grant, or refusal, of such injunctions. This means that, in Australia, such applications are to be decided within the framework of general 194 Canadian (Human Rights Commission) v Canadian Liberty Net (1998) 157 DLR (4th) 385 at 413-414 [47]; cf Canada Metal Co Ltd v Canadian Broadcasting Corporation (1975) 55 DLR (3rd) 42. 195 New Zealand Mortgage Guarantee Co Ltd v Wellington Newspapers Ltd [1989] 1 NZLR 4; Ron West Motors Ltd v Broadcasting Corporation of New Zealand (No 2) [1989] 3 NZLR 520; Auckland Area Health Board v Television New Zealand Ltd [1992] 3 NZLR 406; TV3 Network Services Ltd v Fahey [1999] 2 NZLR 129; Hosking v Runting [2005] 1 NZLR 1 at 39 [152]-[154]. 196 Marsden v Amalgamated TV Services Pty Ltd, unreported, New South Wales Court of Appeal, 2 May 1996 at 15. 197 National Mutual Life Association of Australasia Ltd v GTV Corporation Pty Ltd [1989] VR 747 at 764. 198 Jakudo Pty Ltd v South Australian Telecasters Ltd (1997) 69 SASR 440 at 442. 199 JDP Australasia Pty Ltd v Pneumatic Systems International Pty Ltd [1999] WASC 14 at [15]; cf Lovell v Lewandowski [1987] WAR 81. 200 eg Shiel v Transmedia Productions Pty Ltd [1987] 1 Qd R 199. See also Australian Broadcasting Corporation v Hanson [1998] QCA 306. Kirby principle for the grant of interlocutory injunctions generally, established by the previous decisions of this Court201. There is no reason in legal concept to excise defamation actions, as a unique or special sub-category, from the general approach to interlocutory injunctions. That approach is already expressed in principles of broad application, adaptable to particular needs and circumstances. It accommodates a great variety of cases invoking vastly differing legal rules and values. In matters of basic approach, it is ordinarily undesirable to fashion "stand alone" principles. Moreover, it is difficult to justify grafting a special exception onto the general language of the statute law that ultimately governs the case, namely s 11(12) of the Supreme Court Civil Procedure Act 1932. That sub-section does not contain an express exception for interlocutory injunctions in defamation actions. There are two additional considerations that support this conclusion. The first is the reminder, contained in the reasons of Blow J in the Full Court202, referring to the analysis of Dr I C F Spry QC, in his work Equitable Remedies203, that devising a peculiar and special rule for defamation actions (and specifically for those in which the publisher indicates an intention to justify the matter complained of) is fundamentally inconsistent with the provision of a remedy that is equitable in nature, such as an injunction. According to Dr Spry204, the expression of a particular rule for defamation actions was: "A further example of the manner in which judges trained in a common law rather than an equitable tradition may misunderstand the nature of equitable discretions, and hence attempt to describe them in terms of inflexible rules … In such cases the right to obtain an interlocutory injunction ought, on general equitable principles, to depend simply on whether, in the special circumstances in question, the balance of justice inclines towards the grant or refusal of relief; and such matters should be taken into account as considerations of hardship in relation to the parties, any special considerations of unfairness that may arise, the 201 Beecham (1968) 118 CLR 618 at 622-623; Australian Coarse Grain Pool Pty Ltd v Barley Marketing Board of Qld (1982) 57 ALJR 425 at 425-426 per Gibbs CJ; 46 ALR 398 at 398-399; Murphy v Lush (1986) 60 ALJR 523 at 524; 65 ALR 651 at 653; Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 153-154 per Mason ACJ. 202 [2005] TASSC 82 [57]. 203 Spry, Equitable Remedies, 6th ed (2001). 204 Spry, Equitable Remedies, 6th ed (2001) at 20-21. Kirby undesirability that a defendant should be prevented from making statements the legality or illegality of which will only subsequently be established with certainty, the extent to which third persons or the public generally may be interested in the truth of those statements, the degree of probability that the alleged libel will be published and will be wrongful, the degree to which the plaintiff will be injured in the event of its publication, and any other material considerations." A second consideration is that, at the time of the application in this case, in a number of Australian jurisdictions, justification was not established merely by proof that the matter complained of was true205. To justify, the publisher had to additionally establish (as in this case) that the matter complained of was published "for the public benefit". This additional consideration adds a matter for judgment and evaluation that renders outcomes more uncertain than where what is in issue is simply a question of fact: true or false. As the primary judge understood in this case, that additional factor made it more debatable as to whether, at trial, the ABC would succeed in justifying publication of the kind intended by the contested film. Before this Court, the ABC was somewhat ambivalent about the foregoing debate. It suggested that, whatever legal test was applied, and at whatever stage in the application of that test, paramountcy had to be accorded to the community's interest in free speech and a free press. However, there is an important difference between the approach required by a special rule for defamation cases and viewing such proceedings as an instance of the application of the general rule, although to circumstances having special features206. An endorsement of the approach contained in the general rule demands recognition of the discretionary character of the decision that has always to be made. It suggests that it is unlikely that any exercise of the judicial function of that character will permit a particular feature of the case (such as the value of free speech or a free press) to swamp entirely all other features. It also suggests that 205 This is another reason why, in addition to the difference between the modern test for the granting of an interlocutory injunction as distinct from the historical formulation, disproportionate weight should not be given to Lord Coleridge CJ's reasons in Bonnard v Perryman [1891] 2 Ch 269 at 283-285. See the criticisms of the Bonnard test in Brandis, "Interlocutory injunctions to restrain speech", (1992) 12 Queensland Lawyer 169. See also the reasons of Heydon J at [207]-[209], [280]; cf the reasons of Gleeson CJ and Crennan J at [16]-[18] and the reasons of Gummow and Hayne JJ at [73]-[83]. 206 Church of Scientology of California Inc v Reader's Digest Services Pty Ltd [1980] 1 NSWLR 344 at 350 [17] but cf Chappell v TCN Channel Nine Pty Ltd (1988) 14 NSWLR 153 at 161 per Hunt J. Kirby no exercise of the discretion will place any particular class of persons (even convicted murderers) into a sub-category where they are treated as falling outside the law's protection. All of this was clearly recognised in the reasons of Blow J in the Full Court207. It remains to take the community interest in the free discussion of matters of public or general interest into account in deciding whether it is "just and convenient" to grant relief. But, in so far as the ABC submitted that the question of convenience was not even reached (because of the paramountcy of the values accorded to free speech and a free press in the governing rule) that submission should be rejected208. The value of free speech was respected Approach of the majority: The reasons of Gleeson CJ and Crennan J do not suggest error on the part of the majority in the Full Court (or the primary judge) on the basis that those judges had failed to apply the "rigid approach" of rejecting the claim for an interlocutory injunction outright, once the ABC indicated that it intended to plead justification as a defence. Instead, the reasons of Gleeson CJ and Crennan J conclude that the error, evident of the majority in the Full Court, was that the majority failed to observe the "exceptional caution" applicable to the grant of an interlocutory injunction in a case of defamation. Only Slicer J, it is said, evidenced reasoning that treated that consideration as "influential"209. Various particular criticisms are made in the reasons of Gleeson CJ and Crennan J of the weight assigned to identified considerations contained in the reasoning of the majority in the Full Court. These include the concern expressed by the primary judge about "trial by media" and the fact that published media had already made "suspicions" concerning the respondent matters of public debate and that, in cases of prior restraint of publication, the law tends to favour free expression. However, it is quite wrong, with respect, to suggest that the values of free speech or of a free press were overlooked, or ignored, either by the primary judge or by the majority in the Full Court. The primary judge repeatedly acknowledged the authorities holding that "the power to grant an interlocutory 207 [2005] TASSC 82 at [57]-[67]. 208 cf National Mutual Life Association of Australasia Ltd v GTV Corporation Pty Ltd [1989] VR 747 at 754. 209 Reasons of Gleeson CJ and Crennan J at [32]. Kirby injunction to restrain an allegedly defamatory publication should be exercised with great caution, only in very clear cases"210. He accepted that an interlocutory injunction "will not usually be granted 'where such an injunction would restrain the discussion in the media of matters of public interest or concern'"211. He accepted the ABC's submissions about "the need to uphold and protect the freedom of the press". Nevertheless, he concluded that "like all freedoms, it is not an absolute one. The protection of individuals from the power and influence of the media is also important."212 His reasons clearly indicate attention to the values expressed in the law and relied on by the ABC. Crawford J did not, in my view, conflate the general question of "public interest in free speech" with the question of whether there was a defence of truth and public benefit213. Both questions were suitably considered214. Moreover, Crawford J did not inflate the nature of his discretion. With respect, in their reasons, Gummow and Hayne JJ215 attach undue weight to his characterisation of this discretion as an "unfettered" one. Clearly, read in context, this description was used by Crawford J to reject the submission that the "rigid" approach was the applicable rule216. In the Full Court, the majority reasons of Blow J likewise acknowledged the importance of the values of free speech and of the free press. Thus Blow J describes217: "The special practices adopted in such cases result from the need to protect freedom of speech and freedom of the press, and from the 210 [2005] TASSC 26 at [23]. 211 [2005] TASSC 26 at [24] citing Chappell v TCN Channel Nine Pty Ltd (1988) 14 NSWLR 153 at 164; Church of Scientology of California Inc v Reader's Digest Services Pty Ltd [1980] 1 NSWLR 344 at 351-352. See also [2005] TASSC 26 at 212 [2005] TASSC 26 at [36]. 213 [2005] TASSC 26 at [25], [29]; reasons of Heydon J at [282]-[286]; cf the reasons of Gummow and Hayne JJ at [84]-[86]. 214 See also the reasons of Heydon J at [282]-[286], [289]-[294]. 215 Reasons of Gummow and Hayne JJ at [84]. 216 [2005] TASSC 26 at [23]: "[b]ut as was made very clear by Hunt J in Chappell, there are no rigid rules relating to the question. I have an unfettered discretion." 217 [2005] TASSC 82 at [53]. Kirby associated notion that a decision as to whether published material is or is not defamatory is properly a decision for a jury rather than a judge." Repeatedly, Blow J referred to, and extensively cited from, decisions that lay emphasis on the need to exercise the power in question "with great caution, and only in very clear cases"218 and the need to be specially cautious where an injunction "would restrain the discussion in the media of matters of public interest to all concerned"219. The majority in the Full Court thus accepted that "the freedom of the press"220 was a relevant consideration. They expressed the view that the primary judge had considered it in weighing the relevant factors for and against the grant of an injunction. In response to the suggestion that the primary judge had applied a wrong principle that would confine the media to making allegations of a criminal nature only in reports of charges, trials and "In fact the learned primary judge did not express such a view in absolute terms, but used the adverb 'usually'. The learned primary judge was entitled to take into account the way our system of justice operates, the nature of the documentary in question, and the nature and extent of any benefit to the public that might result from the televising of the documentary prior to the trial of the action. He was entitled to form and express views in relation to those matters. The view that he expressed was reasonably open to him. He did not apply a wrong principle in taking that view into account." In this passage, three things stand out. First, the majority in the Full Court were correctly addressing the issue of whether any error was shown that would authorise disturbance of the trial judge's order of the interlocutory injunction. Secondly, they were judging that issue by reference to the record, including so far as this disclosed the nature of the film by reliance on such extrinsic material as was available. And thirdly, they were emphasising that the injunction granted merely restrained the broadcast "prior to the trial of the action". It was strictly temporary. It lasted only until the trial or other order. It was designed to prevent 218 [2005] TASSC 82 at [54]-[56] citing specifically Stocker v McElhinney (No 2) [1961] NSWR 1043 at 1048 per Walsh J and Church of Scientology of California Inc v Reader's Digest Services Pty Ltd [1980] 1 NSWLR 344 at 349-350, along with other authority. 219 [2005] TASSC 82 at [72] citing Chappell v TCN Channel Nine Pty Ltd (1988) 14 NSWLR 153. 220 [2005] TASSC 82 at [72]. 221 [2005] TASSC 82 at [76]. Kirby foreclosure of the issue of prejudice and infliction of widespread damage until a trial of the action could determine the defences, including justification and the remedies, if any, appropriate to the case. This was not an instance of sudden, urgent, contemporary politics. It was a story concerning a long-standing mystery which lacked an element of urgent revelation present in earlier cases where attempted prior restraint has failed. Different judges might take different views about the dangers of "trial by media" and the need to protect particular individuals against it. However, dangers certainly exist. In the absence of the tender by the ABC of the film itself (or excerpts or a transcript) it was open to the primary judge, drawing on the established extrinsic materials, to infer that the film in issue in these proceedings would not present a fair picture of potentially inflammatory material concerning the respondent. Instead, it would pursue the hypothesis of Mr Davie. On the materials before the primary judge, that course of conduct would arguably be grossly defamatory and unfairly damaging to the respondent so that its publication should be restrained, until his complaints about it were finally determined at trial where he was claiming a permanent injunction as one of his remedies. Appellate judges might disagree with this evaluation of where the balance of convenience lay in this case. But unless an error of principle or approach is shown, they are not authorised to substitute their evaluations for that of the primary judge. All that was missing from the reasoning of the primary judge and the majority in the Full Court, which was present in the reasoning of Slicer J, was a reference by the latter to the "compelling" character of the value of "freedom of the press"222. I do not consider that the omission from the reasons of the other judges of such an adjective evidences a lack of appreciation of the need to protect freedom of speech and freedom of the press in our society. Especially so because such values are repeatedly referred to throughout the cases to which extensive mention was made in all of the reasons. Moreover, it was clearly in the mind of, and expressed in terms in the reasons of, Blow J223. As Slicer J correctly conceded, while "freedom of the press" is a compelling factor it is not a "trump card"224. 222 [2005] TASSC 82 at [38]. 223 [2005] TASSC 82 at [53]. 224 [2005] TASSC 82 at [38], referring to my reasons in Lenah Games Meats (2001) 208 CLR 199 at 285 [211], where I cited R v Central Independent Television Plc [1994] Fam 192. Kirby No disregard of principle: I would therefore reject the suggestion that the primary judge and the majority of the Full Court failed to approach the power to grant an interlocutory injunction, in a case of defamation, with the measure of caution that is required by the need to uphold the legal values of free speech and freedom of the press. On the contrary, those judges gave express weight to such values. However, they did so in the context of the competition of those considerations with other values, including the individual right in a particular case to the defence of reputation against grave, widespread and possibly irreparable harm. The respondent was not outside legal protection The approach of the majority: By reason of the respondent's earlier conviction of a heinous crime, the majority concluded that the already damaged reputation of the respondent meant that it was possible that he had little reputation to lose and would therefore recover only nominal damages if he made good his assertion that the ABC's broadcast of the film would defame him and was not protected or excused by an available defence. It is suggested in the reasons of Gummow and Hayne JJ that this prospect operates as a "powerful factor in considering the balance of convenience to favour the denial of interlocutory relief"225. Gleeson CJ and Crennan J suggest that this, too, is a reason why an injunction should have been refused and that the primary judge, and the majority in the Full Court, failed to take account of that possibility and, on that ground, to decline or dissolve the interlocutory injunction226. Defects in the holding: The notion that a person such as the respondent is rendered "libel-free" is not one to which I would readily come. It is specifically contrary to the enactment by the Tasmanian Parliament of an express recognition that prisoners, such as the respondent, are entitled to pursue their legal rights227. Moreover, it is contrary to the fundamental notion of equality of all before the courts and under the law228. It would require very clear legislation to deprive the respondent of equal access to a right which other persons enjoy, if damaged by an actionable defamation to which no defence applies, to look to the courts for remedies. Those remedies include the remedy of a permanent injunction which the respondent has sought. No one is above the law. Equally, it needs very clear legal provisions to place anyone outside the law's protection. Here the jurisdiction and powers granted to the Supreme Court of Tasmania were 225 Reasons of Gummow and Hayne JJ at [89]. 226 Reasons of Gleeson CJ and Crennan J at [33]-[34]. 227 Prisoners (Removal of Civil Disabilities) Act 1991 (Tas). 228 See International Covenant on Civil and Political Rights, Art 14.1. Kirby expressed in general terms. Neither the Defamation Act 1957, nor the Prisoners (Removal of Civil Disabilities) Act 1991 (Tas), makes reference to excluding from ordinary legal entitlements a person such as the respondent. In the United States, the courts have considered the notion that some persons are "libel-free", whether because of notorious criminal behaviour or anti-social conduct229. However, the concept was rejected in 1984 by the Court of Appeals for the District of Columbia230. In 1991 it was rejected by the Supreme Court of the United States231. Although the notion has not entirely disappeared from reasoning in State courts in the United States232, it has no supporting authority in Australia. Nor should it have, because the idea is alien to basic concepts of legal equality. It reflects ideas of outlawry that are incompatible with modern notions of the law making legal protection available to all on a basis of equality233. The punishment for the respondent's crime, of which he has been convicted, is his sentence to life imprisonment. It would be contrary to basic principle to add to that sentence an unenacted deprivation of protection under the law of defamation or the law of procedural remedies. As stated by Stewart J in Rosenblatt v Baer234: "The right of a man to the protection of his own reputation from unjustified invasion and wrongful hurt reflects no more than our basic concept of the essential dignity and worth of every human being – a concept at the root of any decent system of ordered liberty." Hill v Church of Scientology of Toronto235, a decision of the Supreme Court of Canada, endorsed this passage and stressed that the reputation of every human being deserved protection under law. "Reputation", it was said, "is the 229 Cardillo v Doubleday & Co Inc 518 F 2d 638 (2nd Cir 1975); Wynberg v National Enquirer 564 F Supp 924 (CD Cal 1982). See also Kenyon, Defamation: Comparative Law and Practice, (2006) at 269-270. 230 Liberty Lobby Inc v Anderson 746 F 2d 1563 (DC Cir 1984). 231 Masson v New Yorker Magazine Inc 111 SCt 2419 (1991). 232 Jewell v NYP Holdings Inc 23 F Supp 2d 348 (SDNY 1998). 233 cf Hirst v The United Kingdom (No 2) [2005] ECHR 681 at [56]-[82]. 234 383 US 75 at 92 (1966). See also R v Dyment [1988] 2 SCR 417 at 427 per 235 [1995] 2 SCR 1130 at 1178 per La Forest, Gonthier, Cory, McLachlin, Iacobucci Kirby 'fundamental foundation on which people are able to interact with each other in social environments'. At the same time, it serves the equally or perhaps more fundamentally important purpose of fostering our self-image and sense of self-worth236." I agree with this analysis. Unequal impact of law: But can it be said that, in practical terms, the respondent's situation is such that he is not likely to be injured in his reputation nor, any more than he already is, prone to suffer from being shunned, avoided, ridiculed or despised237? This argument was considered in the Full Court by Blow J. He answered it in a convincing way238: "The respondent's reputation is already a bad one since it is well known that he is serving a life sentence for the murder of a child, and the Mercury has published material suggesting that he is suspected of involvement in the disappearance of the Beaumont children … But it was open on the evidence for the learned primary judge to conclude that the televising of the documentary in question might spread the respondent's bad reputation more widely, and that members of the public might receive information injurious to his reputation that they had not received before. He made findings to that effect. In my view he did not err in doing so, and certainly did not act on a wrong principle." Even if the respondent might not recover large (or any) damages, because of his already diminished reputation, this would not mean that he would fail in an application to prevent the publication of a broadcast if the film were held at trial to contain serious falsehoods, or unjustifiable, unbalanced and unfair opinions to which no pleaded defence was applicable. Both the primary judge and the Full Court gave consideration to the question of whether damages would be a sufficient remedy for any wrong to the respondent. They rejected that suggestion. No error has been shown in their reasoning or their conclusion. With respect, then, I find the suggested oversight of the possibility that the respondent would recover only nominal damages a most unlikely hypothesis. It reflects an attitude to the rights of persons who approach the courts for relief 236 [1995] 2 SCR 1130 at 1178 per La Forest, Gonthier, Cory, McLachlin, Iacobucci and Major JJ, citing Lepofsky, "Making Sense of the Libel Chill Debate: Do Libel Laws 'Chill' the Exercise of Freedom of Expression?", (1994) 4 National Journal of Constitutional Law 169 at 197. 237 Defamation Act 1957 (Tas), s 5(1)(c). 238 [2005] TASSC 82 at [74]. Kirby which I would not embrace. Effectively, it means that any prisoner, serving a sentence for a heinous crime, is fair game for anything at all that a media organisation, such as the appellant, might choose to publish about him or her. I do not consider that this represents the law of Australia. In Falbo v United States239, Murphy J remarked that "[t]he law knows no finer hour than when it cuts through formal concepts and transitory emotions to protect unpopular citizens against discrimination and persecution." The wrongs to which his Honour referred are not confined to wrongs by government. They can, on occasion, include wrongs done by large media organisations, public and private240. Amendment of the law: Nor do I believe that the alteration in the law of defamation in Tasmania, which now provides a defence of substantial truth with no requirement of public benefit241, in trials taking effect after 1 January 2006, alters the foregoing conclusions. The issue before this Court is whether the law, as applied by the primary judge and the Full Court, was correctly stated at the time of its application. Only if the question arose on a fresh application to dissolve the injunction or on an application (error being shown) that this Court should now exercise afresh the powers that miscarried below, would the new law be relevant to the disposition of this appeal. On the basis of the new law, the ABC might be warranted to seek modification or dissolution of the present orders. However, such an application would have to be made to the Supreme Court of Tasmania; not to this Court. Our function is the correction of error. In my view, no error of law or fact or principle has been shown. No occasion for the substitution of different orders therefore arises. Orders The appeal should be dismissed with costs. 239 320 US 549 at 561 (1944). 240 Lenah Game Meats (2001) 208 CLR 199 at 272 [172], 276 [183]. 241 Defamation Act 2005 (Tas), s 25. 169 HEYDON J. At the hearing of the application for special leave to appeal, counsel for the Australian Broadcasting Corporation ("the Corporation") submitted that the case raised "very important questions about the appropriate principles to be applied"; that the Court would be able to "speak on an issue it has never spoken on before, that is, in what circumstances should an interlocutory injunction [against defamation] go"; and that the Court could deal decisively with the question of how the community interest in free speech on a matter of public interest should manifest itself in the exercise of a judgment as to whether or not an interlocutory injunction to restrain publication of defamatory material should be granted. On the appeal, counsel urged the Court to "adopt a guideline", which it might be appropriate to treat as having "the force of a binding rule" for cases like the present. Counsel advanced various "tests" for the role free speech should play – the "paramountcy of free speech", the "primacy of the role of free speech", the "overriding principle of free speech", free speech as "a predominant consideration", or "dominant" consideration, to be given "special weight", and free speech as an "independent and overriding" factor. The outcome of this appeal will bitterly disappoint the authors of these doubtlessly sincere asseverations. There is no majority in the Court on any contested point of law. In truth, only one proposition of any importance flows from the appeal. That is that as a practical matter no plaintiff is ever likely to succeed in an application against a mass media defendant for an interlocutory injunction to restrain publication of defamatory material on a matter of public interest, however strong that plaintiff's case, however feeble the defences, and however damaging the defamation. It is necessary initially to notice some preliminary points, to identify the decisive reasoning underpinning the allowing of the appeal, to survey the history, structure and justification of the present law, and to analyse the role of free speech in relation to it. Then the reasons why the appeal should be dismissed will be stated. Three key questions about free speech Three key questions about free speech are provoked by the power to grant interlocutory injunctions against the publication of defamatory material. An understanding of what follows may be assisted by posing them, and answering the first two dogmatically. The first is whether, apart from the need to satisfy the rule in Bonnard v Perryman, which states specific limits on the grant of relief242, there is an overriding rule that no interlocutory injunction will be granted if it would 242 [1891] 2 Ch 269. See pars [207]-[208]. interfere with the exercise of free speech on a matter of public interest. Some have suggested that there is such a rule, but it has no support in Bonnard v Perryman or the other leading authorities243. The second question is whether, even though freedom of speech is not reflected in an overriding rule of that kind, it must still be taken into account independently of the rule in Bonnard v Perryman. A great many able lawyers seem to have thought so or to think so, but Bonnard v Perryman gives that position no support. Bonnard v Perryman eloquently employed freedom of speech as a justification for the limits it laid down, but it did not stipulate that freedom of speech had any independent role beyond those limits. What was said in justification of the limits stated in Bonnard v Perryman is not to be treated as having created some further rule additional to the limits so justified. It is to be treated only as a statement of justification of those limits, or as a statement of the consequences of those limits244. The third question is whether the Court of Appeal erred in Bonnard v Perryman in giving excessive weight to freedom of speech by causing the defamation defences which protect freedom of speech to be treated in a manner which is unjustified and anomalous compared to the way defences to other wrongs capable of being restrained by interlocutory injunctions are treated. That is not a question which this appeal makes it necessary or desirable to answer, but it is briefly discussed below245. Kirby J: three points Next, it is appropriate to record agreement with three points made by The first is that it would have been better if the Corporation had turned its energies to the central matter – an early trial of the action (which counsel for the Corporation in this Court said might be necessary in some cases, and which counsel for all defendants indicated they desired, after the primary judge granted the interlocutory injunction). Instead the Corporation concentrated on the time- consuming but sterile sideshows of protracted interlocutory appeals – an appeal to the Full Court, a special leave application to this Court and an appeal to this 243 See pars [270]-[271]. 244 See par [209]. This error underlay not only the Corporation's arguments, but also, to some extent, the reasoning in the courts below on issues indicated later. 245 See pars [272]-[278]. Court246. The Corporation did not submit that the fact that no trial had taken place was the plaintiff's fault; if it had been, that would have been a powerful ground on which the Corporation could have sought dissolution of the interlocutory injunction. It did at one point unsuccessfully seek to dissolve it, but for another reason. The second is that the issue in determining an appeal from the grant (or the failure to grant) an interlocutory injunction is not whether a judge sitting in the appellate court would have made the same orders as those appealed against had that judge been the primary judge247. With this approach, the Corporation's submissions rightly conform. the The third is the dishonest procurement of the plaintiff's cooperation in making the film which the Corporation wishes to broadcast. The person responsible was the third defendant, Mr Davie, a former detective248. That worthy, although an active participant interlocutory proceedings represented separately from the Corporation, did not read any affidavit denying the plaintiff's evidence that he had acted dishonestly, and the Corporation itself did not read any relevant affidavit either by him or by those in the Corporation who dealt with him. The conclusion that the plaintiff's account of his dealings with Mr Davie was correct may therefore confidently be drawn. In turn it follows that the Corporation, at least from the time when the plaintiff's affidavit was served, was on notice of Mr Davie's dishonesty. Thus it must have been aware that the effect of its defence of the interlocutory proceedings, and its defence of the proceedings as a whole, was to exploit in its own interests an advantage gained by that dishonesty, or at least to try to do so249. In neither of its 246 Reasons of Kirby J at pars [108]-[109]. 247 Reasons of Kirby J at pars [96] and [98]. 248 Reasons of Kirby J at pars [117]-[121]. See also O'Neill v Australian Broadcasting Corporation [2005] TASSC 26 at [6]-[10]. 249 See also Emcorp Pty Ltd v Australian Broadcasting Corporation [1988] 2 Qd R 169 (film taken by the Corporation during a trespass accompanied by harassing interrogation); Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 (accepting "video footage provided to it for nothing and surreptitiously made on private property during the course of the commission of an offence of trespass, probably following the even more serious offence of breaking and entering, the general nature of which" it knew: per Callinan J at 290 [225]). In the court below a different aspect of the Corporation's conduct attracted criticism from Slicer J. Although he made orders in favour of the Corporation, he did state that its reliance against a prisoner on delay as a defence revealed "an arrogance of power": Australian Broadcasting Corporation v O'Neill [2005] TASSC 82 at [20]. (Footnote continues on next page) appeals has the Corporation challenged the trial judge's findings supporting those conclusions. The Corporation's conduct in this regard will surprise many. In defamation proceedings of this kind the misconduct of a defendant which is distinct from the defamatory character of what it publishes has limited relevance – beyond questions of damages and costs, perhaps none250. But so far as it has relevance to damages, it has relevance to interlocutory relief. Misconduct of this type on the part of commercial media defendants is common. The Corporation, however, might be thought to be in a different position from commercial media defendants. It has no need to seek out, attract and retain advertisers. Its survival does not depend on securing mass audiences or on appealing to the lowest common denominator in public taste. As "the provider of an independent national broadcasting service"251, which is of long standing, and which promotes itself as "everyone's ABC", it is admired and trusted by many people who hold its rivals in less esteem. Its Board is under a statutory duty to maintain its "integrity"252 and to "ensure that the gathering and presentation by the Corporation of news and information is accurate and impartial according to the recognized standards of objective journalism"253. The journalists employed by the Corporation are presumably subject to an ethical duty to use "fair, responsible No doubt he was alluding to certain words of Rudyard Kipling – once celebrated to the point of cliché, now little known. They were employed by his first cousin Stanley Baldwin against Lord Beaverbrook (owner of the Daily Express and Evening Standard) and Lord Rothermere (owner of the Daily Mail and the Evening News) on 17 March 1931. Speaking at the Queen's Hall, two days before the St George's by-election, the Leader of the Opposition said: "What the proprietorship of these papers is aiming at is power, and power without responsibility – the prerogative of the harlot throughout the ages." See Middlemas and Barnes, Baldwin, (1969) at 600. The key passages in the speech have enduring value and modern-day application. 250 cf Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at 306 [269] per Callinan J; see also Kirby J in the present appeal at par [120]. 251 Australian Broadcasting Corporation Act 1983 (Cth), s 6(2)(a)(iii), which is part of what the Corporation refers to, in the language of the marginal note to s 6, as its "Charter". 252 Australian Broadcasting Corporation Act 1983 (Cth), s 8(1)(b). 253 Australian Broadcasting Corporation Act 1983 (Cth), s 8(1)(c). and honest means to obtain material"254. If so, the Corporation itself must be under an ethical duty not to publish material obtained in breach of such a duty by outside producers with whom it contracts for the supply of material255. The Corporation is a body corporate funded by the tax revenues raised by the Federal Government. For these reasons it might be thought that the Corporation, like the Federal Government itself, should conform to higher standards and ideals than may be current in society at large – and in the Corporation's case, higher standards than its commercial rivals. It might be thought that this should be so both in the material it broadcasts and the means it employs to get that material. The approach of the Full Court majority The majority in the court below considered that the Corporation's appeal to that Court should not be allowed unless the primary judge had acted on some wrong principle, or the interlocutory injunction he granted had worked a substantial injustice to the Corporation. The correctness of that approach has not been challenged in the sense that, apart from a few alleged factual errors on which the Corporation relied in this appeal but which, understandably, form no part of the grounds on which the appeal is to be allowed, the approach of the Corporation has been to endeavour to demonstrate errors of principle, not fact, in the judgment of the primary judge. There is no suggestion that the order worked any specific injustice independently of its inevitable, and in the circumstances rather slight, effect in delaying the broadcasting of the material identified. The narrowness of the Corporation's challenge The factual errors which the Corporation alleged were limited to errors about its motivation in broadcasting the film and about the plaintiff's reputation. The Corporation did not, however, argue that the primary judge erred in accepting its concessions about the capacity of the imputations to arise. It did not argue that he erred in his findings about their defamatory character: indeed it conceded that the imputations were "of the gravest and most damaging kind", were "of extreme gravity" and were "some of the gravest allegations" which could be made. And it did not argue that he erred in his findings about the weakness of the supposed defences. The findings about the weakness of the defences are important. The primary judge doubted the availability of the defence given by s 15 of the 254 See Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at 305 [268] n 476 (emphasis added). 255 Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at 306 [269]. Defamation Act 1957 (Tas)256, because he doubted whether public benefit could be established257. That conclusion itself is not attacked – it turns on questions of fact (s 20), and the Corporation's limited factual criticisms did not include any on this subject – although criticism was directed to the primary judge for discussing "trial by media" in that context. Numerous other defences were briefly advanced. The trial judge dealt with s 14(1)(a), (d) and (h)258 thus259: "Paragraph (d) concerns fair comment about the merits of a case. There is no reason to think that such an issue will arise at the trial of the plaintiff's action. Paragraph (h) concerns fair comment about a communication made to the public on any subject. I did not understand counsel to identify what the relevant communication was and I think that the defendants will have some difficulty at trial with the requirement for fairness. Counsel for the ABC said that par (a) is the most obvious paragraph that applies to this 256 Section 15 provided: "It is lawful to publish defamatory matter if – the matter is true; and it is for the public benefit that the publication should be made." 257 O'Neill v Australian Broadcasting Corporation [2005] TASSC 26 at [25]-[29]. 258 Section 14(1) relevantly provided: "It is lawful to publish a fair comment respecting – any of the matters with respect to which the publication of a fair report in good faith for the information of the public is declared by section 13 to be lawful; the merits of a case, whether civil or criminal, that has been decided by a court of justice, or the conduct in that case of a person as a judge, party, witness, counsel, or solicitor, or as an officer of the court, or the character of such a person, so far as his character appears in that conduct; a communication made to the public on any subject." 259 O'Neill v Australian Broadcasting Corporation [2005] TASSC 26 at [30]. case, but I cannot see that it would found a defence, for it brings in the provisions of s 13, none of which conceivably arise here." And he dealt with s 16(1)(c), (e) and (h)260 thus261: "The defendants also intend to plead qualified privilege pursuant to s 16(1)(h), but as that defence requires public benefit to be established, its likely success is open to doubt. Counsel for the second and third defendants said that his clients will also rely on s 16(1)(c) and possibly also (e). Paragraph (c) concerns a publication 'for the public good'. I think that a defence relying on that may have difficulty for the reasons I expressed when dealing with the question of public benefit. I regard par (e) as likely to be inapplicable in the circumstances of the case. Once again, it would raise the question of the public's interest or benefit." In these passages the primary judge was courteously saying that the defences were completely baseless. 260 Section 16(1) relevantly provided: "It is a lawful excuse for the publication of defamatory matter if the publication is made in good faith – for the protection of the interests of the person who makes the publication, or of some other person, or for the public good; for the purpose of giving information to the person to whom it is made with respect to a subject as to which that person has, or is reasonably believed by the person who makes the publication to have, such an interest in knowing the truth as to make the last- mentioned person's conduct in making the publication reasonable in the circumstances; in the course, or for the purposes, of the discussion of a subject of public interest the public discussion of which is for the public benefit." 261 O'Neill v Australian Broadcasting Corporation [2005] TASSC 26 at [31]. The five wrong principles alleged According to the majority judgments in this Court taken together, the primary judge acted on five wrong principles: (a) He conflated the requirement of "public benefit" in s 15 of the Defamation Act with the public interest in having free speech unfettered. (b) He wrongly focused on the question whether it was satisfactory that, were the film to be broadcast, the plaintiff would face trial or conviction "by media". (c) He failed to take proper account of the significance of free speech. (d) He failed to appreciate that the issue before him was whether, having regard to the nature of the rights asserted, including the special restraint upon considerations cautioning against prior equitable publication, and other relevant matters including the apparent weakness or strength of the proposed defence under s 15, the plaintiff's case was strong enough to justify passing on to an inquiry into the balance of convenience. This point overlaps in part with criticism (c) above. (e) He failed to take account of the possibility that only nominal damages might be awarded in view of the fact that the plaintiff is a convicted murderer, who is serving a life sentence, and who has confessed to another murder, and in view of the fact that by 28 April 2005, the date of the proposed broadcast, there had already been or would have been extensive publication of matters involving allegations of the most serious nature about the plaintiff. The circumstances in which judgment was delivered In reading the primary judge's reasons for judgment in the light of these five criticisms of them, it is desirable to bear in mind the following circumstances. The plaintiff's application for an interlocutory injunction to restrain a broadcast planned for Thursday 28 April 2005 was filed on 15 April 2005. It was heard in circumstances of urgency over two days on 20 and 21 April 2005. The proceedings are recorded on over 100 pages of transcript. At the end of the hearing, the primary judge reserved judgment until 2.15pm the following day, Friday 22 April. This was two clear working days before the proposed broadcast. After also receiving on that day submissions with which he had not had time to deal in detail, the primary judge duly delivered his reasons. They were neither short nor perfunctory262. This was an appropriately 262 O'Neill v Australian Broadcasting Corporation [2005] TASSC 26 at [1] and [25]. speedy response to the exigencies created by the manoeuvring of the parties. But speed can come at a price – a necessary and reasonable price. Seeming infelicities or obscurities or confusions in a reserved judgment pondered for some time might be regarded as signs of error. They ought to receive a more benevolent construction, if that is reasonably available, when they appear in a judgment produced under the pressure of the circumstances just outlined. Evidentiary gaps There is no evidence of the relevant contents of the film complained of. That is because no party tendered either the film or a transcript of it. It was in the possession of the Corporation, and it would have been easy for the Corporation to tender it. Although the defence deals with the public discussion of deficiencies in the investigation of serious crimes by the police, it is not possible to assess whether that topic was a theme of the film, as distinct from being a theme of newspaper articles in early 2005. There were in evidence newspaper reports that the police had charged the plaintiff with another murder but had not proceeded with those charges; that the Tasmanian Commissioner of Police thought that the plaintiff could be responsible for the kidnapping and murder of the Beaumont children and had murdered more than one child; that the plaintiff was a suspect in relation to the murders of various children; and that the South Australian police had "discounted" the plaintiff from their inquiries into the disappearance of the Beaumont children. But those newspaper reports were not tendered to prove the truth of the assertions contained in them. They were only tendered to establish that the Corporation's programme would not be likely to damage the plaintiff's reputation. Hence they cannot be used to establish that there was no present intention on the part of the police to charge the plaintiff over additional offences, or that he was suspected of crimes by the persons quoted in the articles, or that he had committed additional crimes. Any reasoning which depends on their use to establish these propositions (as opposed to assuming them before examining some further proposition) is to that extent flawed. History of the power to grant interlocutory injunctions to restrain the publication of defamatory material Jurisdiction before 1854. Before 1854 courts exercising common law jurisdiction had no power to grant injunctions, and hence no power to grant interlocutory injunctions restraining publication of defamatory matter. It came generally to be thought, at least from 1875, that before 1875 the same was true of courts exercising equitable jurisdiction in the sense that although they had power to grant injunctions, including interlocutory injunctions, that power did not extend to interlocutory injunctions restraining publication of defamatory matter. They "had power to intervene by injunction to protect property, but not to protect character; [they] had no power to try a libel"263. Hence they could grant injunctions against torts seen as affecting the plaintiff's proprietary rights even though they also had a defamatory character, for example, the torts then known as trade libel but now known as injurious falsehood (slander of goods and slander of title), and some kinds of passing off264. The 1854 Act. In 1854 courts exercising common law jurisdiction (but not courts exercising equitable jurisdiction) were given jurisdiction to grant injunctions. Section 79 of the Common Law Procedure Act 1854 (UK) provided: "In all Cases of Breach of Contract or other Injury, where the Party injured is entitled to maintain and has brought an Action, he may, in like Case and Manner as herein-before provided with respect to Mandamus, claim a Writ of Injunction against the Repetition or Continuance of such Breach of Contract, or other Injury, or the Committal of any Breach of Contract or Injury of a like kind, arising out of the same Contract, or relating to the same Property or Right; and he may also in the same Action include a Claim for Damages or other Redress." Section 82 provided in part: "It shall be lawful for the Plaintiff at any Time after the Commencement of the Action, and whether before or after Judgment, to apply ex parte to the Court or a Judge for a Writ of Injunction to restrain the Defendant in such Action from the Repetition or Continuance of the wrongful Act or Breach of Contract complained of, or the Committal of any Breach of Contract or Injury of a like kind, arising out of the same Contract, or relating to the same Property or Right; and such Writ may be granted or denied by the Court or Judge upon such Terms as to the Duration of the Writ, keeping an Account, giving Security, or otherwise, as to such Court or Judge shall seem reasonable and just ...". Effect of the 1854 Act. It seems that even if ss 79 and 82 conferred a power to grant interlocutory injunctions of any kind, before 1875 it was "very seldom"265 or "never" exercised266. It also seems that no injunction restraining 263 Collard v Marshall [1892] 1 Ch 571 at 577 per Chitty J. 264 Croft v Day (1843) 7 Beav 84 [49 ER 994]; Routh v Webster (1847) 10 Beav 561 265 Quartz Hill Consolidated Gold Mining Co v Beall (1882) 20 Ch D 501 at 510 per Baggallay LJ. 266 Monson v Tussauds Ltd [1894] 1 QB 671 at 693 per Lopes LJ. publication of defamatory matter was granted by the common law courts in the period 1854-1875. There is a controversy, discussed below267, about whether or not the grant by ss 79 and 82 to courts exercising common law jurisdiction of power to grant injunctions included a grant of power to grant injunctions restraining publication of defamatory matter. Even if it did, it certainly did not include a grant of that power to courts exercising equitable jurisdiction. Those courts continued to maintain the position that they had no other source of power. That was the ground on which, on 20 January 1875, the Court of Appeal in Chancery (Lord Cairns LC, James and Mellish LJJ) upheld a refusal to grant an interlocutory injunction in Prudential Assurance Co v Knott268. Six years earlier, in Dixon v Holden, Sir Richard Malins V-C contended that equity would grant injunctions against defamation where it "would have the effect of destroying the property of another person, whether that consists of tangible or intangible property, whether it consists of money or reputation". He went on to state: "Professional reputation is the means of acquiring wealth, and is the same as wealth itself"269. But Sir John Wickens V-C very soon drew attention to the "wholly new" character of this attempted destruction of any distinction between torts damaging personal reputation and torts which, while damaging proprietary interests, had a defamatory aspect as well270. And the Court of Appeal in Chancery in Prudential Assurance Co v Knott said that the general propositions in Dixon v Holden were at variance with the settled practice and principles of the court271. The Judicature Act 1873. Soon after, on 1 November 1875, the Judicature Act 1873 (UK) came into force. Section 16 provided for the transfer to the newly established High Court of Justice of the jurisdiction which at the commencement of the Act was vested in or capable of being exercised by all or any of various courts, including the High Court of Chancery and various common law courts. Section 25(8) relevantly provided: "A mandamus or an injunction may be granted or a receiver appointed by an interlocutory Order of the Court in all cases in which it shall appear to the Court to be just or convenient that such Order should be made; and 267 See pars [194]-[202]. 268 (1875) LR 10 Ch App 142. 269 (1869) LR 7 Eq 488 at 494. 270 Mulkern v Ward (1872) LR 13 Eq 619 at 621. 271 (1875) LR 10 Ch App 142 at 147. any such Order may be made either unconditionally or upon such terms and conditions as the Court shall think just ...". The Tasmanian position. The Tasmanian equivalents to ss 79 and 82 of the 1854 Act are ss 63 and 66 of the Common Law Procedure Act, No 2 1855 (Tas). They were repealed by the Supreme Court Civil Procedure Act 1932 (Tas), Sch 1. But s 2(4)(a) of that Act provided that the repeal did not take away any jurisdiction vested in the Supreme Court of Tasmania by the repealed sections. The Tasmanian equivalent to s 25(8) of the Judicature Act 1873 is s 11(12) of the Supreme Court Civil Procedure Act, which relevantly provides: "An injunction may be granted or a receiver appointed by an interlocutory order of the Court or a judge thereof in all cases in which it shall appear to the Court or judge to be just and convenient that such order should be made; and any such order may be made either unconditionally or upon such terms and conditions as the Court or judge shall think just ...". Interlocutory injunctions restraining publication of defamatory matter: Sir George Jessel MR. Between 1875 and 1894 it came to be accepted that any division of the High Court had jurisdiction to restrain the publication of defamatory matter by interlocutory injunction. for this The basis conclusion was Sir George Jessel MR in his usual masterful way. The case in which he did so, Beddow v Beddow272, was not a defamation case. It was an application for an interlocutory injunction to restrain the defendant from acting as arbitrator on grounds of unfitness. Further, the Master of the Rolls did not say anything specific about defamation. In his ex tempore judgment he did, however, say273: enunciated first "It is to be remembered that the jurisdiction of the Court of Chancery to grant injunctions was formerly limited; it was limited by the practice of different Chancellors. The jurisdiction was never extended in modern times beyond what was warranted by the authorities; and in course of time various vexatious and inconvenient restrictions were adopted. The granting of an injunction was always looked upon as an extraordinary exercise of jurisdiction, but it is not so now. One of the most useful functions of a Court of Justice is to restrain wrongful acts; and a power of this kind was given to the Common Law Courts in the largest terms by the Common Law Procedure Act, 1854, s 79." 272 (1878) 9 Ch D 89. 273 (1878) 9 Ch D 89 at 91-92. He then set out and discussed parts of ss 79, 81 and 82. Referring to the words "reasonable and just" in s 82, he said274: "What is reasonable and just is the only limit. No doubt the Court of Chancery was not originally limited by any other terms; but the instances in which an injunction might be granted were decided by that Court, and there were certain well-known cases in which it was settled that the Court ought not to grant an injunction." He then said275: "That being so, when we come to the Judicature Act, 1873, we find this: First, all jurisdiction whatever which was exercised by any of these Courts is transferred to the new Court. Next, all Acts of Parliament applying to any one of the old Courts apply to the High Court of Justice, which consequently has jurisdiction to grant injunctions whenever it may seem just." After setting out s 25(8) of that Act, giving power to grant interlocutory injunctions in all cases where it appeared to the court to be just and convenient, he concluded276: "If this can be done by interlocutory application à fortiori it can be done at the trial of the action, on the principle of 'omne majus continet in se minus'. Next, by the Common Law Procedure Act this power would have been exercised at the trial as far as it was 'just.' The only addition is that in the Judicature Act you have 'just or convenient': not that that would be convenient which was unjust; but that in ascertaining what is 'just' you must have regard to what is convenient. All acts, therefore, which a Common Law Court or a Court of Equity only could formerly restrain by injunction, can now be restrained by the High Court. That being so, it appears to me that the only limit to my power of granting an injunction is whether I can properly do so. For that is what it amounts to. In my opinion, having regard to these two Acts of Parliament, I have unlimited power to grant an injunction in any case where it would be right or just to do so: and what is right or just must be decided, not by the caprice of the Judge, but according to sufficient legal reasons or on settled legal principles." 274 (1878) 9 Ch D 89 at 92. 275 (1878) 9 Ch D 89 at 92-93. 276 (1878) 9 Ch D 89 at 93. In Quartz Hill Consolidated Gold Mining Co v Beall277 the defendant appealed against the grant of an interlocutory injunction to restrain publication of a defamation. The first argument of its counsel was278: "We contend that there is no jurisdiction to grant an interlocutory injunction." Sir George Jessel MR referred to Beddow v Beddow. Counsel responded with the following not implausible279 submission: "That case does not shew that the Court can grant an injunction in a case like this, unless it could have been granted at common law under the Common Law Procedure Act, 1854. Now, under sect 79 of that Act, the injunction could only have been granted at the trial." Sir George Jessel MR said: "I am not prepared to agree to that." After further debate, he said: "There is no doubt about the jurisdiction." In his judgment the Master of the Rolls said280: "I have no doubt whatever that there is jurisdiction to grant such an injunction. It is plain that the jurisdiction conferred on the Common Law Courts by the Common Law Procedure Act of 1854 extended to the granting of such an injunction. The 79th section is as large in terms as can well be, and the 82nd section allows ex parte injunctions in every case where a final injunction could be granted under the 79th section. Of course, under the rule of omne majus continet in se minus, if the Court can grant an injunction ex parte, à fortiori it can grant it on notice. It is, therefore, clear to my mind that the Common Law Courts had this jurisdiction in all Common Law actions. That jurisdiction is transferred to the High Court, and that would suffice to decide this question of jurisdiction. But by the Judicature Act of 1873, s 25, subs 8, a larger jurisdiction to grant injunctions than existed before is given in every case; and in my opinion that enactment extends the general jurisdiction given in Common Law actions to all actions whether in Equity or at Common Law. The result, therefore, is that there is jurisdiction in a proper case upon interlocutory application to restrain the further publication of a libel." 277 (1882) 20 Ch D 501. 278 (1882) 20 Ch D 501 at 506. 279 In Monson v Tussauds Ltd [1894] 1 QB 671 at 693 Lopes LJ doubted whether the 1854 Act gave the common law courts power to grant interlocutory injunctions. On the other hand, the reference to ex parte relief in s 82 suggests that it did. 280 (1882) 20 Ch D 501 at 507. Baggallay and Lindley LJJ spoke to similar effect. However, since the appeal was allowed and the injunction discharged on other grounds, the remarks were obiter. Pound's criticism. Sir George Jessel MR's approach has never been judicially doubted since Bonnard v Perryman, when it was unanimously approved by a six member Court of Appeal281. It has, however, been contradicted by Roscoe Pound. According to Pound, the Act of 1854282: "gave the courts of common law in their discretion power to grant injunctions in actions at law in cases where an injunction ought to issue ... It is reasonably clear that this referred to cases where there ought to be an injunction on the principles of equity jurisdiction." He drew attention to Richmond v The Dubuque and Sioux City Railroad Co283 which, he said, held that a similar American statute "was construed not to give a court of law power to do more than a court of equity could have done in the way of preserving the status quo pending the action at law"284. Pound said that, contrary to Sir George Jessel MR's view, the Act of 1854 could not have given the common law courts power to grant interlocutory injunctions in defamation actions, since courts of equity could not do so. Pound continued285: "Thus, we are to believe, the Act of 1854 put liberty of the press and all the common-law rights of Englishmen into the hands of the judges, so far as injunctions may affect them, subject to no restraint beyond the judicial sense of what justice may demand. If the judges had not been anxious to put equitable relief against defamation on a sound basis, we may be sure they would never have tolerated such arguments. In truth the good sense and sound instinct of the English courts led them to strain a point ... ". 281 [1891] 2 Ch 269 at 283 per Lord Coleridge CJ, Lord Esher MR, Lindley, Bowen and Lopes LJJ; at 285 per Kay LJ. 282 "Equitable Relief Against Defamation and Injuries to Personality", (1916) 29 Harvard Law Review 640 at 665. 283 33 Ia 422 (1871) (SC Iowa). 284 "Equitable Relief Against Defamation and Injuries to Personality", (1916) 29 Harvard Law Review 640 at 665 n 74. 285 "Equitable Relief Against Defamation and Injuries to Personality", (1916) 29 Harvard Law Review 640 at 665-666. Precisely what he meant by "all the common-law rights of Englishmen" is unclear. It is also not clear how what is, on his analysis, an egregious error of statutory construction can be described as putting equitable relief on a "sound basis" or as reflecting "good sense and sound instinct". The duty of judges is to construe statutes correctly, not to substitute for the correct construction their own opinions of what the legislature ought to have enacted. And Pound's words "no restraint beyond the judicial sense of what justice may demand" ignore Sir George Jessel MR's requirement that interlocutory injunctions only be granted "according to sufficient legal reasons or on settled legal principles"286. The Common Law Commissioners. Although the breadth of the language used in ss 79 and 82 contradicts Pound's opinion, that opinion may receive some support from the origins of those sections. Those origins lie in the Third Report Made to His Majesty by the Commissioners Appointed to Inquire into the Practice and Proceedings of the Superior Courts of Common Law in 1831287. The Report recommended that the writ of prohibition be widened to permit courts of common law to "restrain violations of legal rights in the same cases in which an injunction now issues for that purpose from the Courts of Equity"288. The Report described equitable jurisdiction to grant injunctions in relation to rights "for the violation of which an action lies at common law" as extending to injunctions against waste; certain torts, the "principal" of which were trespass by mining, copyright or patent infringement, and destruction of deeds and certain chattels; and certain breaches of contract. Parliament did not act on this recommendation. Pound's theory is supported by the failure of the Report to refer to defamation as one of the torts equity would restrain by injunction. On the other hand, the listed torts were only the "principal" torts. The Report did not specify what other torts the Commissioners had in mind. The Commissioners were a strong group, consisting of Bosanquet J and Alderson J of the Court of Common Pleas, Patteson J of the Court of King's Bench, and Henry John Stephen, Serjeant at Law, but no equity lawyer was among them. It must be remembered that by 1831 there was only one well-known statement in Chancery289 denying the 286 Beddow v Beddow (1878) 9 Ch D 89 at 93. 287 Reprinted in British Parliamentary Papers, Legal Administration, General, Courts of Common Law, vol 2 at 193. 288 Third Report Made to His Majesty by the Commissioners Appointed to Inquire into the Practice and Proceedings of the Superior Courts of Common Law, (1831) at 18; emphasis in original. 289 Gee v Pritchard (1818) 2 Sw 402 at 413 [36 ER 670 at 674]. The other well- known cases came after 1831: Martin v Wright (1833) 6 Sim 297 at 299 [58 ER (Footnote continues on next page) existence of power in the Court of Chancery to grant injunctions against libel, while there was one statement in the Court of King's Bench affirming it290. That Chancery statement – what Pound called Lord Eldon LC's "offhand remarks"291 and his "over-cautious" dicta292 – was uttered in argument. The relevant observation was: "The publication of a libel is a crime; and I have no jurisdiction to prevent the commission of crimes." It may be arguable that even by 1831 the law was unsettled in the sense that either equitable practice was extending to grant injunctions against wrongs not formerly so controlled, like various kinds of trespass293, and the possibility of further extension to defamation was foreseen, or at least the door was not firmly closed against granting interlocutory injunctions to prevent libel: the relevant inquiries would be difficult ones, not limited to published reports, but fortunately not compelled by this appeal. It may also be arguable that whether or not equity lawyers thought that the Court of Chancery lacked power to restrain libels, common lawyers did not think so, and it is their thinking that is material to the construction of ss 79 and 82. That is because the Second Report of Her Majesty's Commissioners for Inquiring into the Process, Practice, and System of Pleading in the Superior Courts of Common Law in 1853294, also the product of distinguished common lawyers, quoted the relevant passages from the 1831 Report and made a similar recommendation. This time the recommendation was acted on by the legislature in enacting ss 79-82 of the 1854 Act. In consequence, the correct construction of ss 79 and 82 is a nice question. "If an appellate court, particularly an ultimate appellate court, is convinced that a previous interpretation is plainly erroneous then it cannot allow previous error to 605 at 606]; Clark v Freeman (1848) 11 Beav 112 [50 ER 759]; Emperor of Austria v Day (1861) 3 De G F & J 217 at 239 [45 ER 861 at 870]. 290 Du Bost v Beresford (1810) 2 Camp 511 [170 ER 1235]. 291 "Equitable Relief Against Defamation and Injuries to Personality", (1916) 29 Harvard Law Review 640 at 645. 292 "Equitable Relief Against Defamation and Injuries to Personality", (1916) 29 Harvard Law Review 640 at 646. 293 "Equitable Relief Against Defamation and Injuries to Personality", (1916) 29 Harvard Law Review 640 at 643: "[I]n 1818 the jurisdiction of equity to enjoin trespasses on land was not yet well developed and the whole subject of equity jurisdiction over torts was backward because of the unsatisfactory mode of trial". See also at 644 and 646. 294 Reprinted in British Parliamentary Papers, Legal Administration, General, vol 9 at stand in the way of declaring the true intent of the statute"295. It is wrong to "give the effect of legislation to a decision contrary to the intention of the legislature, merely because it has happened, for some reason or other, to remain unchallenged for a certain length of time"296. If this Court thought, after proper argument, that Pound were correct in criticising the cases holding that the relevant provisions (and their modern descendants) gave power to grant interlocutory injunctions to restrain publication of defamatory matter, it would be necessary to overrule those cases. None of them are decisions of this Court, or even of the Privy Council or the House of Lords. Very few of them are decisions of intermediate appellate courts. The Corporation, which has a long-term interest in contending that they be overruled, did not do so – perhaps surprisingly in view of the portentous significance with which its submissions invested this appeal. On the other hand, it may be possible to argue that, even if the cases are wrong in their own terms, the language of the post-1875 legislation is such "that Parliament itself has approved a particular judicial interpretation" of the earlier legislation, and that in consequence that interpretation should be adhered to297. Prior notice would have to be given to the plaintiff, and further argument received, if the cases were to be overruled. Hence in this appeal it is right to abstain from overruling the cases. But they cannot be finally treated as having settled the law without argument on their correctness. Source of power to grant quia timet injunctions. Section 79 of the 1854 Act conferred no power to grant a quia timet injunction against publication of defamatory material, because it required that the plaintiff be entitled to bring an action at law as a condition of seeking an injunction. The Corporation raised a question whether anything in the Judicature Act 1873, in particular s 25(8), had changed that. The point is entirely moot in this case, because the parties eventually agreed that before the proceedings began the Corporation had published the film to three persons in Tasmania298. The injunction was thus not sought against a publication which was feared but had not yet happened: it had happened, and what was to be restrained was its repetition. 295 Babaniaris v Lutony Fashions Pty Ltd (1987) 163 CLR 1 at 13 per Mason J. (footnotes omitted) 296 Hamilton v Baker (1889) 14 App Cas 209 at 222 per Lord Macnaghten. 297 Geelong Harbor Trust Commissioners v Gibbs Bright & Co (A Firm) [1974] AC 810 at 820; see also Geelong Harbour Trust Commissioners v Gibbs, Bright & Co (1970) 122 CLR 504 at 518 per McTiernan and Menzies JJ, 518-519 per Kitto J. 298 Being distinct from the publication that took place with the showing of the film at the Hobart Summer Film Festival in January 2005, about which there is an issue as to the involvement of the Corporation. Section 25(8) as an independent source of power. It should be added that in Monson v Tussauds Ltd299 Lord Halsbury based the power to grant interlocutory injunctions against defamation not on the Common Law Procedure Act 1854 in combination with s 25(8) of the Judicature Act 1873 but on s 25(8) by itself. He did so in answering the argument that "the Court ought not to pronounce anything to be a libel when that very question must afterwards be submitted to the judgment of a jury ...". He said300: "[T]he legislature ... gave the power by the unqualified language of its enactment to do the very thing in question wherever the Court should deem it just and convenient. Had it thought right to limit the exercise of such power to cases where no question should be afterwards determined by a jury, it might have limited the exercise of such a power to such cases. It cannot be assumed to be ignorant of the state of the law or the practice, and it has enacted in the widest terms the jurisdiction in question. It is not necessary to enumerate, but there are other examples of jurisdictions where judges must exercise, in the first instance, a judgment which must, nevertheless, afterwards be submitted to a jury." But it has been questioned whether such general words could support this particular outcome: for example, Brett LJ in North London Railway Co v Great Northern Railway Co301 said that if no court had power to issue an injunction before the Judicature Act 1873, no part of the High Court had power to issue an injunction after it. Unnecessary questions. For want of argument, among other reasons, it is not necessary or desirable to decide: (a) whether s 79 of the 1854 Act conferred on common law courts a power to grant injunctions restraining the publication of defamatory matter; (b) whether, if it did confer the power mentioned in (a), s 25(8) added a power to grant quia timet injunctions; (c) whether, if s 79 did not confer the power mentioned in (a), s 25(8) did; 300 [1894] 1 QB 671 at 688-689. The idea that s 25(8) alone was a source of power had been advanced earlier in Thorley's Cattle Food Co v Massam (1877) 6 Ch D 582 at 588-590 per Sir Richard Malins V-C. 301 (1883) 11 QBD 30 at 36-37. (d) whether, assuming negative answers to (a)-(c), there are other possible sources of power. The curious evolution of Bonnard v Perryman If Pound is correct and Lord Halsbury is wrong, some most curious events took place between 1875 and 1894. On the one hand, by a gross misconstruction of the relevant legislation, the judges arrogated to themselves a power to grant interlocutory injunctions restraining publication of defamatory matter which they had not hitherto had. On the other hand, they developed four limits regulating that power which were so restrictive that the power could hardly ever be exercised in favour of plaintiffs, and hardly ever has been. The limits can be labelled "the rule in Bonnard v Perryman"302. The case is significant: the Court of Appeal must have considered that it raised important issues since, very unusually, it was heard by six judges (Lord Coleridge CJ, Lord Esher MR, Lindley, Bowen and Lopes LJJ, Kay LJ dissenting); despite the exceptionally offensive nature of the defamation involved, the plaintiff lost; and the core of its reasoning has hardly ever been doubted303. The consequence of the limits stated – perhaps their cause too – is that the jurisdiction to grant injunctions restraining the publication of defamations is "delicate"304, only to be exercised "most cautiously and warily"305 in the "clearest cases"306, "exceptionally clear cases"307, or "very clear cases"308, and on the "rarest occasions"309. These occasions can only arise where, first, a jury's verdict would be set aside as unreasonable if it did not find the matter to be defamatory. The second limit relates to defences. There can be no relief if the defence of 302 Many of them may be found earlier, in William Coulson & Sons v James Coulson & Co (1887) 3 TLR 846. 303 See n 335 below. 304 William Coulson & Sons v James Coulson & Co (1887) 3 TLR 846. 305 Bonnard v Perryman [1891] 2 Ch 269 at 284. 306 William Coulson & Sons v James Coulson & Co (1887) 3 TLR 846. 307 Monson v Tussauds Ltd [1894] 1 QB 671 at 690 per Lord Halsbury. 308 Stocker v McElhinney (No 2) [1961] NSWR 1043 at 1048 per Walsh J. 309 William Coulson & Sons v James Coulson & Co (1887) 3 TLR 846 at 846. justification will probably succeed, or even "might, not would, succeed"310; nor, if privilege or fair comment is alleged311, can there be relief unless there is probably malice on the part of the defendant, or the defendant is "clearly malicious"312, or, in modern formulation, the evidence of malice is "so overwhelming that the judge is driven to the conclusion that no reasonable jury could find otherwise; that is, that it would be perverse to acquit the defendant of malice"313. This need for the plaintiff to exclude the possible defences – to carry a "burden of proof"314, and at a very high level – is triggered, on some authorities, by the mere claim on behalf of the defendant that particular defences will be advanced315. The third and fourth limits relate to damages. The third limit is that no injunction should be granted where the court cannot "tell what may be the damages recoverable"316. The fourth limit is that there must be no "real ground" for supposing that the plaintiff, if successful, will recover nominal damages only317. It is true that in Australia there has been some modification of these tests. One is illustrated in National Mutual Life Association of Australasia Ltd v GTV Corporation Pty Ltd. Ormiston J said that it was not318: 310 Khashoggi v IPC Magazines Ltd [1986] 1 WLR 1412 at 1417-1418; [1986] 3 All ER 577 at 581 per Sir John Donaldson MR. 311 Fraser v Evans [1969] 1 QB 349 at 360 per Lord Denning MR. 312 Harakas v Baltic Mercantile and Shipping Exchange Ltd [1982] 1 WLR 958 at 960; [1982] 2 All ER 701 at 703 per Lord Denning MR. 313 Herbage v Pressdram Ltd [1984] 1 WLR 1160 at 1162; [1984] 2 All ER 769 at 771 per Griffiths LJ. 314 Crest Homes Ltd v Ascott, The Times, 4 February 1975 per Geoffrey Lane LJ, quoted in Bestobell Paints Ltd v Bigg (1975) 1 FSR 421 at 435 per Oliver J. 315 Little more than this appeared from the defendant's unsatisfactory affidavit in Bonnard v Perryman [1891] 2 Ch 269 at 287-288. A mere announcement of an intention to justify evidently sufficed in Bestobell Paints Ltd v Bigg (1975) 1 FSR 421 at 429. See also Crest Homes Ltd v Ascott (1980) 6 FSR 396 at 398 per Lord Denning MR; Herbage v Pressdram Ltd [1984] 1 WLR 1160 at 1162; [1984] 2 All ER 769 at 771 per Griffiths LJ; Khashoggi v IPC Magazines Ltd [1986] 1 WLR 1412 at 1416; [1986] 3 All ER 577 at 580 per Sir John Donaldson MR. 316 Bonnard v Perryman [1891] 2 Ch 269 at 284. 317 Stocker v McElhinney (No 2) [1961] NSWR 1043 at 1048 per Walsh J. 318 [1989] VR 747 at 754. "necessarily sufficient for a defendant to assert that it proposes to plead justification and prove the truth of its allegations at the trial. The nature of the material which will be sufficient to deny a plaintiff interlocutory relief must vary according to the sources of the defendant's information and according to the form of discussion which the publication of the defamatory material will take and the extent to which it may be seen to be genuine, serious and in the public interest." Another is seen in Chappell v TCN Channel Nine Pty Ltd319, which some say marks the beginning of a more "flexible approach". Hunt J said that an inability to hold that a jury's verdict of no libel would be set aside as unreasonable did not require the plaintiff's application for an interlocutory injunction to be rejected on that ground alone. He also said that there was no rule that an interlocutory injunction would be refused if, on the relevant defences being raised, the court were not satisfied that the libel was untrue or that the defendant was actuated by malice: those were relevant but not decisive factors. But despite these modifications, generally the tests stated in Bonnard v Perryman have been adopted in Australia320. As noted above321, there is a famous passage in Bonnard v Perryman322 extolling "the importance of leaving free speech unfettered". That is not, however, stated as an independent rule. It is stated only as a justification for the limits summarised above. In this respect, as in others, Bonnard v Perryman has never been specifically overruled by any relevant final or intermediate Court of Appeal. Application of Bonnard v Perryman to other causes of action Sometimes attempts are made to sidestep the difficulties created by Bonnard v Perryman by relying on a cause of action other than defamation. These attempts have had only limited success. Thus Bonnard v Perryman has a certain width of application, and hence importance. It has been held that 319 (1988) 14 NSWLR 153 at 158-163. 320 See, for example, Wilson v Parry (1937) 54 WN (NSW) 167; Stocker v McElhinney (No 2) [1961] NSWR 1043; Gabriel v Lobban [1976] VR 689; Royal Automobile Club of Victoria v Paterson [1968] VR 508; Edelsten v John Fairfax & Sons Ltd [1978] 1 NSWLR 685; Harper v Whitby [1978] 1 NSWLR 35; Swimsure (Laboratories) Pty Ltd v McDonald [1979] 2 NSWLR 796; Lovell v Lewandowski [1987] WAR 81. 321 See par [174]. 322 [1891] 2 Ch 269 at 284: it is set out in par [254] below. Bonnard v Perryman applies not only to defamation but to injurious falsehood323; to unlawful interference with trade closely allied to injurious falsehood324; and to passing off325 and claims for breach of confidence326, at least where the issues are broadly the same as they would be in defamation. On the other hand, Bonnard v Perryman has been held both not to apply327 and, at least in a modified form, to apply328 to a conspiracy involving defamatory material. It has been held not to apply where the defamatory words were published in the course of the torts of nuisance and intimidation329. In some breach of confidence cases involving defamation it has been said that the court would be entitled to grant an interlocutory injunction330. What test isolates these cases? One formula is331: "If the court were to conclude that though the plaintiff had framed his claim in a cause of action other than defamation but nevertheless his principal purpose was to seek damages for defamation, the court will refuse interlocutory relief. If, on the other hand, the court is satisfied that there is some other serious interest to be protected such as confidentiality, and that that outweighs considerations of free speech, then the court will grant an injunction." 323 Bestobell Paints Ltd v Bigg (1975) 1 FSR 421; Animal Liberation (Vic) Inc v Gasser [1991] 1 VR 51. 324 Lord Brabourne v Hough (1981) 7 FSR 79. 325 Sim v H J Heinz Co Ltd [1959] 1 WLR 313; [1959] 1 All ER 547. 326 Woodward v Hutchins [1977] 1 WLR 760; [1977] 2 All ER 751. 327 Gulf Oil (Great Britain) Ltd v Page [1987] Ch 327. 328 Femis-Bank (Anguilla) Ltd v Lazar [1991] Ch 391. 329 Animal Liberation (Vic) Inc v Gasser [1991] 1 VR 51. 330 Fraser v Evans [1969] 1 QB 349 at 362 per Lord Denning MR. An example is Francome v Mirror Group Newspapers Ltd [1984] 1 WLR 892; [1984] 2 All ER 331 Microdata Information Services Ltd v Rivendale Ltd (1991) 18 FSR 681 at 688 per Griffiths LJ; Essex Electric (Pte) Ltd v IPC Computers (UK) Ltd (1991) 18 FSR But the correctness of this reasoning has been doubted332. Thus the rule in Bonnard v Perryman is tending to bring considerable technical difficulties in its train. The limits stated in Bonnard v Perryman seem to have flowed from inhibitions experienced as much by judges whose professional lives had been in the common law courts – perhaps because common law courts had no jurisdiction to grant injunctions of any kind before 1854 – as they were by judges whose professional lives had been spent in equity courts – perhaps because before 1854 the want of a proprietary right, or the criminal character of the conduct, may have been seen as fatal, and the 1854 Act did not apply to courts of equity. In a practical sense the outcome of the present appeal vindicates most of the limits stated in Bonnard v Perryman, and much of the reasoning used to justify them. The curious thing is that courts which, on Pound's view, so violently seized the relevant power quickly became very timid in exercising it. They usurped the kingdom, but shrank from its delights. They thought themselves capable of exercising the new judicial power they were creating – until they had created it. It is thus an available view, to adopt Milsom's words in another context, that: "The miserable history ... can be shortly told. Nothing worth-while was created. There is no achievement to trace"333. Whether that view is sound depends on whether the limitations sanctioned in Bonnard v Perryman are defensible. Those limitations are certainly both deliberate and significant, because they were stated in the face of the following explicit submission for the plaintiffs in that case334: "The Court should be governed in a libel action by the same principles as in other cases in which it is asked to grant an interlocutory injunction; that is, it should take into consideration the balance of convenience and inconvenience." To this Lindley LJ replied: "Libel is a new subject-matter." And Fry LJ added: "May not, therefore, new considerations arise?" What are these new considerations justifying the limitations, which are different from those governing other interlocutory injunctions?335 332 Western Front Ltd v Vestron Inc (1987) 13 FSR 66. 333 Historical Foundations of the Common Law (1969) at 353. 334 [1891] 2 Ch 269 at 281. 335 Save on points of detail, Bonnard v Perryman has been criticised very rarely. For three exceptions to that statement, see Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at 339-341 [350]-[351] per (Footnote continues on next page) Libel as crime The justification advanced by Lord Eldon LC in Gee v Pritchard in the course of argument for equity's refusal to grant injunctions against libel was that the publication of libel is a crime, and he lacked jurisdiction to prevent the commission of crimes336. Latterly it has been put thus337: "[T]he absence in this area of the procedural safeguards traditionally associated with trial for criminal defamation and the dangers inherent in enjoining conduct which may give rise to criminal liability make the remedy one fraught with potential for abuse." This justification for Bonnard v Perryman, vague as its terms are, is rarely, if at all, now employed in the authorities. It can have little force: the privilege against self-incrimination is available in the civil proceedings, the standards of proof are different, and the civil outcome cannot affect the criminal outcome. It has particularly little force in Australia, where the scope of civil defamation and the scope of crimes based on defamatory publications are very far from being co- incident338, and where there are very few prosecutions for the latter type of narrowly defined crime. Callinan J; Spry, The Principles of Equitable Remedies, 6th ed (2001) at 20-22; Brandis, "Interlocutory Injunctions to Restrain Speech", (1991) 12 Queensland Lawyer 169. 336 (1818) 2 Sw 402 at 413 [36 ER 670 at 674]. 337 Hayes, "Injunctions Before Judgment in Cases of Defamation", (1971) 45 Australian Law Journal 125 at 192-193. 338 The common law misdemeanour of defamatory libel has been earlier abolished or modified by legislation in all Australian jurisdictions. In lieu there are, in the three Code States, in New South Wales and South Australia, and in the Australian Capital Territory, provisions having the effect of rendering criminal the publication without lawful excuse of matter defaming another living person knowing the matter to be false or without having regard to whether the matter is true or false, and intending to cause serious harm to the victim or any other person or without having regard to whether such harm is caused: Criminal Code (Q), s 365; Criminal Code (WA), s 345; Criminal Code (Tas), s 196; Crimes Act 1900 (NSW), s 529; Criminal Law Consolidation Act 1935 (SA), s 257; Crimes Act 1900 (ACT), s 439. The Criminal Code (NT), ss 203-208, renders certain types of defamation with specific intent criminal. The Wrongs Act 1958 (Vic), ss 3-13, adopts elements of both approaches. Injunctions and proprietary rights It is often said that in its auxiliary as distinct from its exclusive jurisdiction, equity only intervenes to protect proprietary rights. That rule has become much attenuated. But, attenuated or not, it is immaterial in the present field. Bonnard v Perryman injunctions do not depend directly on the auxiliary jurisdiction, but have statutory backing. Further, the twin facts that the rule in Bonnard v Perryman applies, for example, to injurious falsehood, where proprietary rights are protected, and also does permit limited injunctive relief even where there is no proprietary right being protected, suggest that the rule is not to be justified by reference to the protection of proprietary rights. Involvement of courts in controversial disputes Bonnard v Perryman has been justified by the following argument339: "[T]he damages remedy, applied after jury determination of the 'libel-no libel' question in favour of the plaintiff, involves the courts only minimally in disputes which are politically or otherwise controversial, while in contrast, the availability of injunctive relief means that they may be thrust unwillingly into such disputes, with supervision and enforcement of the equitable remedy placing a heavy burden on their officials." This is not a justification which has been advanced in the authorities. Only a small proportion of defamation cases are so "politically or otherwise controversial" as to be disputes from which the courts ought to be excluded, which the courts may feel peculiar unwillingness to decide, or in relation to which there will be difficulty in enforcing injunctive relief. Trial of libel question on motion to commit In Liverpool Household Stores Association v Smith, Lopes LJ said340: "It would be most inconvenient to have the question of libel or no libel tried by a Judge on motion to commit [for contempt of court] instead of being tried by a jury." Indeed it would. But this type of reasoning is a common argument against granting injunctions in a particular form whatever the wrong. The relevant inconvenience does not turn on the difference between the determination of the 339 Hayes, "Injunctions Before Judgment in Cases of Defamation", (1971) 45 Australian Law Journal 125 at 192; see also at 127. 340 (1887) 37 Ch D 170 at 184. See also at 183 per Cotton LJ. issue by judge and determination of the issue by jury. It turns on the unsatisfactoriness of having to decide whether the defendant's conduct is in contravention of a legal norm, not at a civil hearing, but in proceedings for such non-civil sanctions as sequestration, fines or imprisonment. To do so converts civil wrongs into crimes. The inconvenience flows from the error of drafting the interlocutory injunction by reference to whether the particular matter was tortious – in this instance, defamatory. A properly drafted injunction against the publication of particular material would not lead to the question of libel or no libel being tried by a judge on motion to commit for contempt of court – only the question of publication of the material. The importance of jury trial It is now necessary to examine various arguments resting on the fact that the trial of issues in defamation cases at common law was in part the responsibility of juries, while consideration of whether injunctions should be granted against defamation before trial is the province of judges sitting alone. Fox's Libel Act 1792. It has often been said that after Fox's Libel Act 1792 no relief could be given in relation to a libel unless it had first been submitted to a jury decision. Thus in Saxby v Easterbrook, Lord Coleridge CJ said341: "Libel or no libel, since Fox's Act, is of all questions peculiarly one for a jury". Similarly, Pound was of the view that "Fox's Libel Act applies ... to criminal prosecutions and to actions on the case for damages"342. However, in Thomas v Williams, Fry J rightly said that this was "entirely untenable", since Fox's Libel Act 1792 "applies only to proceedings by way of criminal information or indictment for libel, and has nothing whatever to do with civil actions based upon the libel"343. The legislative background related entirely to controversies about criminal cases344. The Act was entitled "An Act to remove 341 (1878) 3 CPD 339 at 342. 342 "Equitable Relief Against Defamation and Injuries to Personality", (1916) 29 Harvard Law Review 640 at 656 (emphasis added). It is more correct to say, as Lord Blackburn said in Capital and Counties Bank Ltd v George Henty & Sons (1882) 7 App Cas 741 at 775, that "it has been for some years generally thought that the law, in civil actions for libel, was the same as it had been expressly enacted that it was to be in criminal proceedings". 343 (1880) 14 Ch D 864 at 871. 344 Stephen, A History of the Criminal Law of England (1883), vol 3 at 300-359; Holdsworth, A History of English Law, vol 10, at 672-696. Doubts respecting the Functions of Juries in Cases of Libel."345 The preamble recited that: "[d]oubts have arisen whether on the trial of an indictment or information for the making or publishing of any libel, where an issue or issues are joined between the King and the defendant or defendants, on the plea of not guilty pleaded, it be competent to the jury impanelled to try the same to give their verdict upon the whole matter in issue ...". Section 1 provided that: "[O]n every such trial, the jury sworn to try the issue may give a general verdict of guilty or not guilty upon the whole matter put in issue upon such indictment or information; and shall not be required or directed, by the court or judge before whom such indictment or information shall be tried, to find the defendant or defendants guilty, merely on the proof of the publication by such defendant or defendants of the paper charged to be a libel, and of the sense ascribed to the same in such indictment or information." The balance of the Act consisted of provisions saving the rights of the judge to give "his opinion and directions to the jury" (s 2), of the jury to find a "special verdict, in their discretion, as in other criminal cases" (s 3), and of the defendant to move in arrest of judgment in any manner that would have been available before the passing of the Act (s 4). Contrary to what is sometimes suggested, Fox's Libel Act did not preserve to the jury only the issues of what was published and whether it was defamatory; it gave the jury the right to find the defendant not guilty for any reason and on any issue which to the jury seemed fit. Status of Fox's Libel Act 1792 as "declaratory"? The Act has sometimes been said in relation to other contexts and problems to be a "declaratory act"346. But it cannot have been declaratory of any point of common law or equity in 1792 relevant to interlocutory injunctions restraining publication of defamatory matter if the general opinion is correct that there was a shared incapacity on both sides of Westminster Hall to grant injunctions of that kind. The Jury Trials (Scotland) Act 1815347. In Fleming v Newton348 Lord Cottenham LC in the House of Lords had to consider a Scottish appeal. 345 32 Geo III c 60. 346 Parmiter v Coupland (1840) 6 M & W 105 at 108 [151 ER 340 at 342] per Parke B; Baylis v Lawrence (1841) 11 Ad & E 920 at 924 [113 ER 664 at 665] per 347 55 Geo III c 42. The Lord Ordinary, Lord Robertson, granted an interim interdict to restrain the Scottish Mercantile Society from publishing in its book a copy of a Register in which there appeared protests for failure by the pursuer to honour two promissory notes. He also ordered that the case be reported for the opinion of the Lords of the Second Division of the Court of Session. They were divided, but the majority decreed for the pursuer. On appeal to the House of Lords, Lord Cottenham LC questioned how, if the Court of Session had to decide the question in future, the alleged jurisdiction could349: "be reconciled with the trial of matters of libel and defamation by juries under the 55 George III, cap 42, or indeed with the liberty of the press. That act appoints a jury as the proper tribunal for trial of injuries to the person by libel or defamation; and the liberty of the press consists in the unrestricted right of publishing, subject to the responsibilities attached to the publication of libels, public or private. But if the publication is to be anticipated and prevented by the intervention of the Court of Session, the jurisdiction over libels is taken from the jury, and the right of unrestricted publication is destroyed." In argument he had suggested that if the court exercised the jurisdiction claimed, it would be "to exercise the powers of a censor"350. The following points may be noted. First, Lord Cottenham LC decided the appeal on other grounds, and said it was not expedient to give any opinion on the general question of what jurisdiction the Court of Session had to grant interdict against the publication of libels. Secondly, the report suggests that the statute Lord Cottenham LC referred to as "the 55 George III, cap 42", the Jury Trials (Scotland) Act 1815, was not discussed in argument. Thirdly, the Jury Trials (Scotland) Act 1815, unlike Fox's Libel Act 1792351, in the form in which it was originally enacted, made no specific 348 (1848) 1 HLC 363 [9 ER 797]. 349 (1848) 1 HLC 363 at 376 [9 ER 797 at 803]. 350 (1848) 1 HLC 363 at 371 [9 ER 797 at 801]. 351 With which some have erroneously confused it: for example, Pound, "Equitable Relief Against Defamation and Injuries to Personality", (1916) 29 Harvard Law Review 640 at 656; Ford, "A Note on the Protection of Reputation in Equity", (Footnote continues on next page) provision for "the trial of matters of libel and defamation by juries", nor appointing "a jury as the proper tribunal for trial of injuries to the person by libel or defamation". It enacted detailed provisions extending trial by jury to Scotland in civil cases but limiting it to those cases in which an order for jury trial had been made by either Division of the Court of Session. Sections 42 and 45 provided that the provisions of the Act were to endure, in the first instance, for only seven years. Section 43 provided for each Division of the Court of Session to report to Parliament annually specifying what issues had been directed for jury trial of their own motion, and what issues had otherwise been directed or refused. Section 44 provided for annual reports to Parliament specifying the issues tried pursuant to the Act and certified by the Commissioners who presided at the trial of the issues. This introduction of jury trial seems to have been regarded by Parliament as a success, because in 1819 another Act entitled Jury Trials (Scotland) Act352 was enacted. The long title described it as an Act to amend the 1815 Act, though it was enacted by way of addition rather than amendment. Section 1 provided: "[I]n all Processes raised in the Outer House of the Court of Session, by ordinary Action or otherwise, on account of Injuries to the Person, whether real or verbal, as Assault or Battery, Libel or Defamation, or on account of any Injury to Moveables, or to Lands, where the Title is not in question; or on account of Breach of Promise of Marriage, Seduction or Adultery, or any Action founded on Delinquency or quasi Delinquency of any kind, where the Conclusion shall be for Damages and Expences only; the Lord Ordinary of the Outer House, before whom such Processes shall be enrolled, do remit, and he is hereby authorised and required, after Defences are lodged, to remit the whole Process and Productions forthwith to the Jury Court in Civil Causes; which last mentioned Court is authorised and required, according to Rules and Regulations which the said Court and the Court of Session are hereinafter empowered to make, to settle an Issue or Issues, and to try the same by a Jury to be summoned and impannelled under the Provisions now in force, or hereinafter enacted for that Purpose." Since the remitter was only to take place after a defence was lodged, the provision did not in terms collide with the obtaining of urgent interlocutory relief before a defence was lodged. Indeed, where interlocutory relief of a wholly quia timet character was sought, it would seem questionable whether any action for (1954) 6 Res Judicatae 345 at 346; Hayes, "Injunctions Before Judgment in Cases of Defamation", (1971) 45 Australian Law Journal 125 at 126. 352 59 Geo III c 35. damages in the Outer House could be commenced. It seems that Fleming v Newton itself was a case of that kind353. Further, the Jury Trials (Scotland) Act 1819, which dealt only with civil proceedings, contains no provision equivalent to s 1 of Fox's Libel Act 1792 for criminal proceedings. The Jury Trials (Scotland) Act 1815 was amended again by the Jury Trials (Scotland) Act 1837, but not in any way relevant to Lord Cottenham LC's observations. This history does not suggest that trial by jury in defamation cases was viewed as being so fundamental, integral and universal an institution of the Scottish legal system in civil proceedings as somehow to debar the Court of Session from granting interim interdicts. Fourthly, Lord Cottenham LC saw the rights of defendants as "unrestricted", subject only to "the responsibilities attached to the publication of libels". That is, defendants were at liberty to publish libels subject only to the risk of later having to pay damages for them, and the risk of criminal sanctions. That view may correspond with English law as applied in the Court of Chancery at the time. It is not possible to reconcile that view with Bonnard v Perryman and the many authorities holding that by reason of the legislation of 1854 and 1873 there is jurisdiction to grant interlocutory injunctions against the publication of defamatory matter, subject to strict and narrow rules, and that rights of freedom of speech are not automatic bars to that remedy. Application of Fox's Libel Act 1792 by analogy. Another argument was that although Fox's Libel Act dealt only with criminal libel, it was applied to civil actions for libel "by analogy"354. That may be accepted in relation to trials – proceedings for final relief. But is there any analogy between the mode of hearing proceedings for final relief (in which factual questions are for the jury) and the mode of hearing proceedings for interlocutory relief? In the late 18th century jury trial was universal for factual issues in trials on indictment, and very common in common law civil proceedings. Had the view which was rejected in Fox's Libel Act 1792 prevailed, it would have created an anomalous exception, for libel cases alone, to the universal rule in trials on indictment. It was not irrational, in the succeeding decades, to apply the criminal rule for final hearings of criminal libel cases to the final hearings of civil libel cases. Since then, in criminal proceedings jury trials have become relatively less common. And in civil litigation, jury trial has declined very sharply in significance. The first step was the creation of County Courts, in which juries came to be rare, by the County Courts Act 1846 (UK). The second was the Common Law Procedure Act 1854, s 1, which made possible the trial of issues of 353 (1848) 1 HLC 363 at 370-371 [9 ER 797 at 800-801]. 354 Dunlop v Dunlop Rubber Co Ltd [1920] 1 IR 280 at 302-303 per Powell J. fact by the judge alone in common law courts, with the consent of the parties. They were followed by several enactments, in both parliamentary legislation and rules of court, which have made trial by jury very rare in civil cases, both in England355 and in Australia. Against that background, the determination of factual questions in proceedings for interlocutory injunctions against the publication of defamatory matter looks less exceptional; what is exceptional is the determination of those factual questions by juries in final proceedings. On occasion the common law is developed by analogy with statutes. But when that process is undertaken, it is not a process which it is easy or necessarily right to freeze in time. As the relevant body of statutes changes, the relevant analogies drawn from them may change. The present question does not relate to the common law in the sense of judge-made non-statutory law, but concerns the exercise of a discretion conferred by statutes which are largely in common form across the country and share a common origin in the 1854 Act. The parameters within which the discretion is to be exercised depend on each statute. Even assuming that before 1854 courts of equity drew analogies with Fox's Libel Act 1792 to support an abstention from granting interlocutory injunctions against the publication of defamatory material, it is not clear why it was appropriate to do so in construing the 1854 Act, which said nothing in terms about that type of injunction or about Fox's Libel Act 1792. It also is not clear why it is appropriate to do so in construing Australian legislation enacted after jury trial began to decline in civil cases. Nor is it clear why it is appropriate to do so after Australian defamation statutes began to dilute the pre-eminence of jury trial in defamation. Full allowance must be made for difficulties in drawing analogies with defamation statutes differing the Australian federation356. Further, if the relevant statute conferring a power to grant interlocutory injunctions against the publication of defamatory matter had a certain construction by reason of some analogy with Fox's Libel Act 1792 before these defamation statutes were enacted, no doubt their enactment alone, without more, might not change that construction. But the enactment of those defamation statutes does create so acute a tension as to suggest either that the analogy never existed or that the proposition inferred from it has been impliedly repealed. in different parts of 355 Jackson, "The Incidence of Jury Trial During the Past Century", (1937) 1 Modern Law Review 132; Simpson, "The Survival of the Common Law System" in Legal Theory and Legal History: Essays on the Common Law, (1987) at 399-400. 356 Public Service Board of New South Wales v Osmond (1986) 159 CLR 656 at 669 per Gibbs CJ; Lamb v Cotogno (1987) 164 CLR 1 at 11 per Mason CJ, Brennan, Deane, Dawson and Gaudron JJ; Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49 at 61-63 [23]-[28] per Gleeson CJ, What, then, is the legislative position in Australia? Leaving aside the power of judges to prevent proceedings going to a jury by striking out allegations on the ground, for example, that the matter complained of is incapable of bearing the meaning pleaded or that the meaning is not reasonably capable of being defamatory357, the legislative position in recent decades is as follows. The proposition that juries decide the issue of libel or no libel, and the related proposition that juries have a unique role in relation to defences and damages, have not been true in practice in the Australian Capital Territory since 1934. From 1934 to 2002, by reason of the Supreme Court Act 1933 (ACT), s 22358, trial was by judge alone unless the court otherwise ordered, which it rarely did. Since 2002, by reason of an amendment to that provision359, trial is always by judge alone. In the Northern Territory, from at least 1934 until 2006, trial was by judge without jury unless the court otherwise ordered: Supreme Court Ordinance 1934 (NT), s 2; Juries Ordinance 1962 (NT), s 7; Juries Ordinance 1967 (NT), s 7; Juries Act (NT), s 7; Supreme Court Rules (NT), O 47.02. Since 26 April 2006 trial has been by judge alone: Juries Act (NT), s 6A. In South Australia, since 1984 trial has been by judge alone: Juries Act 1927 (SA), s 5360. Prior to this, s 5(1) of the Juries Act 1927 (SA) provided that the normal mode of trial was to be by judge alone, although the Court was able to order trial by jury if it appeared that a question might arise whether any party had been guilty of any indictable offence. Evatt noted that this situation would occur very rarely but that: 357 Occasionally this power rested on a specific legislative basis, for example, the Defamation Act 1974 (NSW), s 7A(2), between 1995 and 2005. Usually it was based on rules of court. There is also a common law basis. "Before a question of libel or slander is submitted to a jury the Court must be satisfied that the words complained of are capable of the defamatory meaning ascribed to them. That is a matter of law for the Court": Stubbs Ltd v Russell [1913] AC 386 at 393 per Lord Kinnear. 358 Initially enacted as Seat of Government Supreme Court Act 1933 (Cth), s 14. 359 See Civil Law (Wrongs) Act 2002 (ACT), Sch 3, amdt [3.39]. 360 As amended by Juries Act Amendment Act 1984 (SA), s 5. "One illustration is a defamation action where an indictable offence is imputed and justification pleaded"361. In New South Wales, from 1 July 1972 to the end of 2005 trial on a claim in respect of defamation was by jury, although the court had power to order trial without jury in certain circumstances: Supreme Court Act 1970 (NSW), s 86362. Prior to 1 January 1995, the jury decided questions of fact and the judge questions of law, although the Defamation Act 1974 (NSW) provided that questions of public interest (s 12) and qualified privilege (s 23) were decided by the judge, not the jury. The respective functions of the judge and jury were altered by the passage of the Defamation (Amendment) Act 1994 (NSW). From 1 January 1995 the jury dealt with the questions whether the matter carried the pleaded imputation, whether it was defamatory, and whether the defendant published it; the judge dealt with defences and damages: Defamation Act 1974 (NSW), s 7A. Since 1 January 2006 the position has been that unless the court otherwise orders, a plaintiff or a defendant may elect for the proceedings to be tried by jury: Defamation Act 2005 (NSW), s 21(1). The jury deals with the questions whether the defendant has published defamatory matter about the plaintiff and whether any defence has been established: s 22(2). The judge deals with damages: s 22(3). In Victoria, from at least 1987 to 2005, trial was without jury unless the court ordered otherwise or either party elected for jury trial: General Rules of Procedure in Civil Proceedings 1986 (Vic), r 47.02; Supreme Court (General Civil Procedure) Rules 1996 (Vic), r 47.02. Since 1 January 2006 the position has been as it is in New South Wales: Defamation Act 2005 (Vic), ss 21(1), 22(2) and (3). In Queensland, from at least the commencement of the Rules of the Supreme Court of 1900 on 1 January 1901 to 30 June 1999 trial was by judge without jury unless either party required a jury trial or the court ordered otherwise: Rules of the Supreme Court (Q), O 39, rr 4-5. From 1 July 1999 to the end of 2005, either party could elect for jury trial unless the court otherwise ordered: Uniform Civil Procedure Rules 1999 (Q), rr 472 and 474. Since 1 January 2006 the position has been as it is in New South Wales: Defamation Act 2005 (Q), ss 21(1), 22(2) and (3). 361 Evatt, The Jury System in Australia, (1936) 10 Australian Law Journal Supp 57 at 362 Initially enacted as Supreme Court Act 1970 (NSW), ss 88 and 89. These sections were omitted, and substituted s 86 inserted, by the Courts Legislation Amendment (Civil Juries) Act 2001. In Western Australia, from 1 May 1936 to the end of 2005 trial on a claim in respect of defamation was by jury, although the court had power to order trial without jury in certain circumstances: Supreme Court Act 1935 (WA), s 42. Since 1 January 2006 the position has been as it is in New South Wales: Defamation Act 2005 (WA), ss 21(1), 22(2) and (3). In Tasmania, from 1 January 1934 to the end of 2005, a party was entitled to a jury trial in relation to any "action, question or issue which, before the commencement of the Act, could have been instituted in the Court as an action of law", although the Court had power to order trial without jury in certain circumstances: the Rules of Court 1932 (Tas), O 39, rr 6-7; Rules of the Supreme Court 1965 (Tas), O 39, rr 6-7; Supreme Court Rules 2000 (Tas), rr 557-558. Since 1 January 2006 the position has been as it is in New South Wales: Defamation Act 2005 (Tas), ss 21(1), 22(2) and (3). Hence, after considerable legislative wavering, the present position in the six States and the two principal Territories is that in none of the eight jurisdictions is there a strict and unqualified right to jury trial; three have completely abandoned jury trial on all civil issues; and while in the remaining five the question of whether publication is defamatory is left to the jury, together with issues other than damages, all questions of damages are removed from the jury. If it is legitimate to take into account the legislative environment, it scarcely supports a process of reasoning by analogy to the conclusion that a judicial power to grant interlocutory injunctions to restrain the publication of defamatory matter should be exercised only narrowly because of the importance of the judiciary not trespassing into the province of the jury. The role of the jury in Australia is now much narrower than it was in England before 1854, and during the years in which the rule in Bonnard v Perryman was being developed. Influence of judicial opinions on juries. In Liverpool Household Stores Association v Smith Kekewich J, in the course of refusing an application for an interlocutory injunction to prevent future publication of a libel, said that the court had to be363: "... cautious in expressing an opinion lest it should influence the minds of a jury, who are supposed to be more liable to be influenced than a judge of first instance or the Court of Appeal. Whether that be so or not is fairly open to question. But that is the principle upon which the Court is reluctant to express an opinion, or to grant an injunction, which might be equivalent to expressing such an opinion." 363 (1887) 37 Ch D 170 at 175. This reasoning was rejected by Oliver J in Bestobell Paints Ltd v Bigg364: the rule in Bonnard v Perryman applies to applications for interlocutory injunctions against injurious falsehood and other wrongs which are not tried by jury. In these circumstances it must be questioned whether what was said in the cases and elsewhere about a statute relating to criminal libels and a statute relating to Scottish jury trial, each enacted before 1854, and about jury trial generally, has any materiality in relation to Australian law today. Conclusion. The rule in Bonnard v Perryman cannot be explained by reference to the role of juries at the trial on issues such as publication of defamatory material, justification and other defences, and damage to reputation, in contrast to their absence in interlocutory hearings. To call the jury the "constitutional tribunal" in relation to the defences of justification and fair comment365 or any other issue in defamation366 is to assume an answer to the question being asked. To say that damages are "peculiarly the province of the jury"367 was once true, but no longer is in Australia; even if it were, it would not support Bonnard v Perryman. Other difficulties in interlocutory hearings The different treatment of applications for interlocutory injunctions against apprehended defamations compared to applications for interlocutory justified, as injunctions against other apprehended wrongs cannot be Sir George Jessel MR sought to do in Quartz Hill Consolidated Gold Mining Co v Beall368, by reason of the fact that the question of express malice in answer to privilege is very hard to try "upon affidavit, or in the mode in which an interlocutory application is disposed of". There are many potential issues in interlocutory applications against apprehended wrongs other than defamation which are difficult to try on affidavit in interlocutory hearings, but that has not led to the development of any rules peculiarly adverse to plaintiffs in such cases. 364 (1975) 1 FSR 421 at 431 and 434. 365 Fraser v Evans [1969] 1 QB 349 at 360 per Lord Denning MR. 366 Greene v Associated Newspapers Ltd [2005] QB 972 at 990 [57] per Brooke LJ. 367 Davis & Sons v Shepstone (1886) 11 App Cas 187 at 191. 368 (1882) 20 Ch D 501 at 509. Uncertainty of interlocutory hearings As indicated earlier369, the limits on the power to grant interlocutory injunctions restraining publication of defamatory matter described as "the rule in Bonnard v Perryman"370 can be grouped as follows. Until it is clear (a) that the material complained of is defamatory, and (b) that there is no defence available, the court will not know whether any right of the plaintiff has been infringed. Further, it will only rarely be clear at the interlocutory stage (c) how much will be recoverable by way of damages, or (d) that more than nominal damages will be recoverable. If these matters are not clear interlocutory relief should be refused. The fundamental question these rules raise is why, given that in an application for an interlocutory injunction against any wrong, not just defamation, it is likely that many issues will be unresolved, and unresolvable until a final hearing, there should be special rules for defamation despite the absence of any reference to them in the statutes which are said to ground the relevant power. (a) Uncertainty about whether material is defamatory. Lord Esher MR said in Coulson v Coulson371: "To justify the Court in granting an interim injunction it must come to a decision upon the question of libel or no libel, before the jury decided whether it was a libel or not. Therefore the jurisdiction was of a delicate nature. It ought only to be exercised in the clearest cases, where any jury would say that the matter complained of was libellous, and where if the jury did not so find the Court would set aside the verdict as unreasonable." The primary aspect of Lord Esher MR's reasoning rests on a contrast between judicial decision and jury decision, a matter discussed above372. Underlying that primary aspect may be a concern turning on a revulsion from deciding, in a hearing for an interlocutory injunction, that material is defamatory before a trial court can consider the matter after a more thorough inquiry in the less hurried atmosphere of a trial. But that is a difficulty which afflicts all hearings for interlocutory injunctions. It has not led to the development in any other field of any special rules of the type stated in Bonnard v Perryman for defamation. 369 See par [208]. 370 Described in pars [206]-[208] above. 371 (1887) 3 TLR 846. The Court of Appeal quoted this with approval in Bonnard v Perryman [1891] 2 Ch 269 at 284. 372 See pars [217]-[242]. (b) Uncertainty about whether any defence is available. In Coulson v Coulson Lord Esher MR said373: "The Court [hearing an application for an interlocutory injunction against defamation] must also be satisfied that in all probability the alleged libel was untrue, and if written on a privileged occasion that there was malice on the part of the defendant." This was reflected by the observation of the Court of Appeal in Bonnard v Perryman about the common law defence of justification: "Until it is clear that an alleged libel is untrue, it is not clear that any right at all has been infringed ... [W]e cannot feel sure that the defence of justification is one which, on the facts which may be before them, the jury may find to be wholly unfounded ..."374. Thus the rule is founded partly on the pragmatic grounds stated by Brooke LJ in Greene v Associated Newspapers Ltd375: "[U]ntil there has been disclosure of documents and cross-examination at the trial a court cannot safely proceed on the basis that what the defendants wish to say is not true. And if it is or might be true the court has no business to stop them saying it ... [A] court cannot know whether the plaintiff has a right to his/her reputation until the trial process has shown where the truth lies." The difficulty with the reasoning is that it is out of line with that employed in other types of case in which an interlocutory injunction is sought on the basis that the defendant's conduct is legally wrong unless a defendant can establish some defence. When an interlocutory injunction is sought to restrain breach of a covenant in a contract and the defendant contends that the covenant is in unreasonable restraint of trade, the court hearing the application for an interlocutory injunction will often not be able to find that it is "clear" that the defence will fail, or to "feel sure" that the court later conducting the trial will, "on the facts which may be before it", find the defence "wholly unfounded". It does not embark on those inquiries. "[W]here the defendant goes into evidence on the interlocutory application the Court does not undertake a preliminary trial, and give or withhold interlocutory relief upon a forecast as to the ultimate result of 373 (1887) 3 TLR 846. 374 [1891] 2 Ch 269 at 284 (emphasis added). 375 [2005] QB 972 at 990 [57] per Brooke LJ. the case"376. It can be relevant to consider the strength of any defence as well as the strength of the claim377 but the plaintiff does not have to exclude the possibility of any defences succeeding. In Films Rover International Ltd v Cannon Film Sales Ltd378 Hoffmann J said: "The principal dilemma about the grant of interlocutory injunctions ... is that there is by definition a risk that the court may make the 'wrong' decision, in the sense of granting an injunction to a party who fails to establish his right at the trial (or would fail if there was a trial) or alternatively, in failing to grant an injunction to a party who succeeds (or would succeed) at trial. A fundamental principle is therefore that the court should take whichever course appears to carry the lower risk of injustice if it should turn out to have been 'wrong' in the sense I have described." Avoiding the risk of a "wrong" decision requires some attention to the strength of the defendant's defences, but it does not suggest that the plaintiff must completely exclude them. The court does not abjure the possibility of interlocutory relief until it is certain that the plaintiff must obtain final relief. Hence there is no rule in cases other than defamation cases that the plaintiff will fail to obtain an interlocutory injunction merely because the defendant says defences will be raised at the trial, without consideration of what their strength is likely to be. Even in patent infringement cases where the defendant announces an intention to challenge the validity of the patent, it is necessary for the defendant to show by evidence that there is "some ground" for disputing validity379. (c) Uncertainty about quantum of damages. One of the grounds given by the Court of Appeal in Bonnard v Perryman for refusing an interlocutory injunction against defamation was that the court could not "tell what may be the damages recoverable"380. Yet an interlocutory injunction may be granted restraining publication of defamatory material before it has ever been published, 376 Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 622 per Kitto, Taylor, Menzies and Owen JJ. 377 Hubbard v Vosper [1972] 2 QB 84 at 96 per Lord Denning MR. 378 [1987] 1 WLR 670 at 680; [1986] 3 All ER 772 at 780-781. 379 Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 623- 625 per Kitto, Taylor, Menzies and Owen JJ; cf American Cyanamid Co v Ethicon Ltd [1975] AC 396 at 405-406 per Lord Diplock. 380 [1891] 2 Ch 269 at 284. even though if the plaintiff succeeds at the trial and obtains a final injunction, there will be no damage and no damages will be recovered. And, at least where the plaintiff is likely to suffer some harm by the publication, and it can be seen that damages will not be adequate to compensate for that harm, an interlocutory injunction may be an appropriate remedy even though it is not clear what quantum of damages would have been recovered if the injunction were not granted. (d) Risk of nominal damages. In Bonnard v Perryman the Court of Appeal said that in the particular case before them381: "[T]he decision at the hearing may turn upon the question of the general character of the Plaintiffs; and this is a point which can rarely be investigated satisfactorily upon affidavit before the trial, – on which further it is not desirable that the Court should express an opinion before the trial. Otherwise, an injunction might be granted before the trial in a case in which at the trial nothing but nominal damages, if so much, could be obtained." It goes without saying that at trials the issues can be much more satisfactorily examined, after proper preparation and without undue rush, than at interlocutory hearings. However, it is strange that Bonnard v Perryman proceeds on the basis of assuming that the defendant's defences are strong until the plaintiff excludes their application, while assuming that the plaintiff has no chance of recovering more than nominal damages until the contrary is established. At the interlocutory hearing the strength of the defendant's defences, which the defendant has the burden of proving at trial, is presumed in favour of the defendant; the weakness of the plaintiff's case on damages is also presumed in favour of the defendant. Why? Free speech The differences between the approach to interlocutory injunctions against defamation and the approach to interlocutory injunctions against other wrongs are often justified by what many think to be a deeper consideration than any of those listed above – the role of free speech. The Bonnard v Perryman restrictions came to be recognised 37 years after the supposed conferral of jurisdiction by a generally phrased statute not referring to "freedom of speech". However, appeals to the importance of free speech made before that statute have often been repeated after it. 381 [1891] 2 Ch 269 at 284-285. Some post-1891 authorities. In Bonnard v Perryman382 the plurality judgment stated, as a justification for the limits stated in that case rather than as an independent rule in its own right: "The right of free speech is one which it is for the public interest that individuals should possess, and, indeed, that they should exercise without impediment, so long as no wrongful act is done; and, unless an alleged libel is untrue, there is no wrong committed; but, on the contrary, often a very wholesome act is performed in the publication and repetition of an alleged libel. Until it is clear that an alleged libel is untrue, it is not clear that any right at all has been infringed; and the importance of leaving free speech unfettered is a strong reason in cases of libel for dealing most cautiously and warily with the granting of interim injunctions." These ideas have been much repeated. In 1968 Lord Denning MR stressed "the importance in the public interest that the truth should out"383. In 1981 Lord Denning MR said384: "The freedom of the press is extolled as one of the great bulwarks of liberty. It is entrenched in the constitutions of the world. But it is often misunderstood. I will first say what it does not mean. It does not mean that the press is free to ruin a reputation or to break a confidence, or to pollute the course of justice or to do anything that is unlawful. I will next say what it does mean. It means that there is to be no censorship. No restraint should be placed on the press as to what they should publish. Not by a licensing system. Nor by executive direction. Nor by court injunction. It means that the press is to be free from what Blackstone calls 'previous restraint' or what our friends in the United States – co-heirs with us of Blackstone – call 'prior restraint'. The press is not to be restrained in advance from publishing whatever it thinks right to publish. It can publish whatever it chooses to publish. But it does so at its own risk. It can 'publish and be damned.' Afterwards – after the publication – if the press has done anything unlawful – it can be dealt with by the courts. If it should offend – by interfering with the course of justice – it can be punished in proceedings for contempt of court. If it should damage the reputation of innocent people, by telling untruths or making unfair comment, it may be made liable in damages. But always afterwards. Never beforehand. Never by previous restraint." 382 [1891] 2 Ch 269 at 284. 383 Fraser v Evans [1969] 1 QB 349 at 360. 384 Schering Chemicals Ltd v Falkman Ltd [1982] QB 1 at 16-17 (emphasis in original). In 1984 Griffiths LJ attributed the rule in Bonnard v Perryman to "the value the court has placed upon freedom of speech and ... upon the freedom of the press, when balancing it against the reputation of a single individual who, if [wronged], can be compensated in damages"385. In 1988 Hunt J said that granting interlocutory injunctions against defamation interfered with "an important right of the defendant, that of his freedom of speech" and in many cases created386: "an interference with an even more important right, the right of the community in general to discuss in public matters of public interest and concern and to be informed of the different views held by others. ... A free and general discussion of public matters is fundamental to a democratic society." Also in 1988 the Full Court of the Supreme Court of Victoria said387: "[T]he very great importance which our society and our law have always accorded to what is called free speech, means that equity exercises great care in granting injunctive relief. ... [I]t is by no means rarely a benefit to society that a hurtful truth be published. It has been felt ... that it is usually better that some plaintiffs should suffer some untrue libels for which damages will be paid than that members of the community generally, including the so-called news media, should suffer restraint of free speech. The judges over the centuries have also been well aware how easy it would be for a tyrant to stifle all opposition by deciding what was 'genuine' free speech, to be allowed, on the one hand and what was an unjust or unfair or dishonest taking advantage of free speech, to be repressed, on the other hand. When the court enjoins, it must be extremely clear that no unacceptable repression is taking place." In 2004 the English Court of Appeal said388: "In this country we have a free press. Our press is free to get things right and it is free to get things wrong. It is free to write after the manner 385 Herbage v Pressdram Ltd [1984] 1 WLR 1160 at 1162; [1984] 2 All ER 769 at 386 Chappell v TCN Channel Nine Pty Ltd (1988) 14 NSWLR 153 at 163-164. 387 National Mutual Life Association of Australasia Ltd v GTV Corporation Pty Ltd [1989] VR 747 at 764. 388 Greene v Associated Newspapers Ltd [2005] QB 972 at 977 [1]. of Milton, and it is free to write in a manner that would make Milton turn in his grave. Blackstone wrote in 1769 that the liberty of the press is essential in a free state, and this liberty consists in laying no previous restraints on publication. 'Every freeman', he said[389] ... 'has an undoubted right to lay what sentiments he pleases before the public: to forbid this, is to destroy the freedom of the press.'" In some of these passages there is, with respect, a certain appeal to emotion, even a degree of shrillness and fustian. These qualities are evident in non-judicial writings also. Blackstone. The famous Blackstone passage partially quoted by the English Court of Appeal comes from Book 4 of the Commentaries, on Public Wrongs. It appears in Ch 11, entitled "Of Offences Against the Public Peace". Blackstone there deals successively with riotous assembly, unlawful hunting, unlawful threats, destruction of property, affrays, riots, tumultuous petitioning, forcible entry and detainer, riding or going armed, spreading false news, false and pretended prophecies, and challenges to fight. The last of the crimes discussed are "malicious defamations", which have a direct tendency to lead to breaches of the public peace. After some analysis of the precise rules of law, Blackstone moved onto a loftier height in making the following complacent remark390: "Our law, in this and many other respects, corresponds rather with the middle age of Roman jurisprudence, when liberty, learning, and humanity, were in their full vigour, than with the cruel edicts that were established in the dark and tyrannical ages of the antient decemviri, or the later emperors." The reference to the "middle age" is a reference to the reign of Augustus, whose love of liberty and whose humanity are, of course, both well-known. Blackstone then concluded the chapter thus391: "In this and the other instances which we have lately considered, where blasphemous, immoral, treasonable, schismatical, seditious, or scandalous libels are punished by the English law, some with a greater, others with a less degree of severity; the liberty of the press, properly understood, is by 389 Commentaries on the Laws of England, Book the Fourth, (1769) at 151-152. (footnote added) 390 Commentaries on the Laws of England, Book the Fourth, (1769) at 151 (emphasis in original). 391 Commentaries on the Laws of England, Book the Fourth, (1769) at 151-152. no means infringed or violated. The liberty of the press is indeed essential to the nature of a free State: but this consists in laying no previous restraints upon publications, and not in freedom from censure for criminal matter when published. Every freeman has an undoubted right to lay what sentiments he pleases before the public: to forbid this, is to destroy the freedom of the press: but if he publishes what is improper, mischievous or illegal, he must take the consequence of his own temerity." (emphasis in original) Blackstone then put the following as his last major argument392: "To subject the press to the restrictive power of a licenser, as was formerly done, both before and since the revolution, is to subject all freedom of sentiment to the prejudices of one man, and make him the arbitrary and infallible judge of all controverted points in learning, religion, and government. But to punish (as the law does at present) any dangerous or offensive writings, which, when published, shall on a fair and impartial trial be adjudged of a pernicious tendency, is necessary for the preservation of peace and good order, of government and religion, the only solid foundations of civil liberty. Thus the will of individuals is still left free; the abuse only of that free will is the object of legal punishment." Five points may be made. First, in these passages Blackstone sounds "ringing tones"393. The prose is indeed highly rhetorical. But it is not particularly rational. Unlike his approach in describing the offences analysed earlier, his language is largely not the language of argument. It is only the language of peroration. Secondly, so far as the passage contains reasoning, it is in essence circular. Why will the law not grant an injunction before publication? Because to do so would destroy the freedom of the press. Why would it destroy the freedom of the press? Because the defining characteristic of press freedom is that there can be "no previous restraints upon publications". Thirdly, Blackstone was speaking of matters much wider than civil proceedings against defamatory publications. The second passage just quoted establishes a contrast between "this" instance – "malicious defamations" – and "the other instances which we have lately considered" in other parts of the Commentaries. In the quoted passages Blackstone meant by "libels" not only 392 Commentaries on the Laws of England, Book the Fourth, (1769) at 152 (footnote omitted). 393 As Auld LJ pointed out in Holley v Smyth [1998] QB 726 at 737-738. defamatory libels dealt with in civil proceedings, but those dealt with in criminal proceedings, as well as seditious, blasphemous and obscene libels. He was speaking of many matters which were then crimes, but are now neither crimes nor civil wrongs. That limits the relevance of his observations to the present problem. He was dealing in large measure not with disputes between citizens and newspapers, but with disputes between citizens and the State. Fourthly, if the law now permits a judge to grant an interlocutory injunction against the publication of matter which is clearly defamatory, in relation to which no defence can be raised and which is likely to sound in substantial damages, it cannot now sensibly be said, as Blackstone suggested in 1769, that the law would subject all freedom of sentiment to the prejudices of that judge, and make that judge the arbitrary and infallible judge of all controverted points in learning, religion and government. Nor can that sensibly be said even if the plaintiff's case is less strong than that postulated. Fifthly, the reasoning would create an absolute bar to the grant of interlocutory injunctions in defamation cases. Yet this is not the law: since the time of Sir George Jessel MR it has been thought that there is power to grant them, though within only narrow limits. In these circumstances, whatever else Blackstone's analysis would justify, it will not justify the present law, because his conclusion is inconsistent with it. For that reason it can have no significance in applying the present law. Dicey. Dicey, writing just before Bonnard v Perryman, analysed matters thus. He quoted Odgers394: "Our present law permits any one to say, write, and publish what he pleases; but if he make a bad use of this liberty, he must be punished. If he unjustly attack an individual, the person defamed may sue for damages; if, on the other hand, the words be written or printed, or if treason or immorality be thereby inculcated, the offender can be tried for the misdemeanour either by information or indictment." Dicey then said395: "Any man may ... say or write whatever he likes, subject to the risk of, it may be, severe punishment if he publishes any statement ... which he is not legally entitled to make." 394 Introduction to the Study of the Law of the Constitution, 3rd ed (1889) at 225, quoting Odgers, A Digest of the Law of Libel and Slander, (1881) at 12. 395 Introduction to the Study of the Law of the Constitution, 3rd ed (1889) at 225. These passages repeat Blackstone's rejection of the power to impose restraints prior to publication. In that respect they do not state the law in 1889, when the third edition of Dicey's Introduction to the Study of the Law of the Constitution was published, or 1885, when the 1st edition was published. A little later Dicey wavered396: "[I]t is questionable how far the Courts themselves will, even for the sake of protecting an individual from injury, prohibit the publication or republication of a libel, or restrain its sale until the matter has gone before a jury and it has been established by their verdict that the words complained of are libellous." The extent to which the courts will restrain libels before a jury holds them to be libels may have been questionable in 1889, and indeed, in a different sense, it still is; but the post Judicature Act 1873 decisions leading up to and including Bonnard v Perryman did plainly hold that there is jurisdiction to restrain libels before trial. It is notable that Dicey is concerned to stress the freedom of Englishmen to publish libels independently of control by the Crown or the Ministry397. Civil actions by private persons against other private persons may, perhaps, be thought to be in a very different category, particularly when the former are weak and poor individuals and the latter are wealthy and powerful privately owned or state corporations operating large newspaper, radio or television businesses, most of them driven by motives of profit. The factors which make attempts by the government to censor what citizens say in advance of publication are not present where citizens are attempting to protect their reputations before these businesses destroy them. Free speech as a complete bar to interlocutory relief. Apart from the approach adopted in Bonnard v Perryman the Court could doubtless approach the relationship between protecting free speech and the granting of interlocutory injunctions against publication of defamatory material in numerous ways: here it is proposed to consider only three possibilities. 396 3rd ed, (1889) at 234, citing Prudential Assurance Co v Knott (1875) LR 10 Ch App 142, Saxby v Easterbrook (1878) 3 CPD 339 and Odgers, A Digest of the Law of Libel and Slander, (1881) at 13-16. 397 For example, Introduction to the Study of the Law of the Constitution, 3rd ed (1889) at 235. See also the discussion of State control of the press in France at 238-244 and State control of the press in England in the 16th and 17th centuries at First, free speech could be a complete bar to the grant of interlocutory injunctions in the sense that no matter how strong a plaintiff's case, interlocutory relief will always be refused if it could interfere with the exercise of free speech on a matter of public interest. That would correspond with the stand taken by Blackstone, to some extent by Dicey, and by Lord Denning MR. Sometimes that is said to be the law, although it is not. That is, sometimes it is said that any impairment on freedom of speech likely to be caused by the grant of an interlocutory injunction in relation to a matter of public interest would itself be a bar to the grant of the interlocutory injunction. Thus in 1980 Hunt J, after setting out the elements of the rule in Bonnard v Perryman, stated, as an independent bar, that an injunction would not be granted "which will have the effect of restraining the discussion in the press of matters of public interest or concern"398. Bonnard v Perryman stated no such rule; it referred to "the importance of leaving free speech unfettered", not as an independent and additional rule, but as a justification for the rule it proceeded to state. In terms Hunt J's language suggests that even if it were completely clear that matter was defamatory, that there was no defence, and that damages would be substantial, no injunction would be granted if that injunction would have the effect of restraining the press from discussing matters of public interest. Indeed, Hunt J later said that there is a principle "that an injunction will not go, if it has the effect of restraining the discussion in the press of matters of public interest or concern", and he described that principle as "independent or overriding"399. He repeated that description in Chappell v TCN Channel Nine Pty Ltd, although he retreated from its overriding character by leaving open the possibility of an injunction which interfered with free speech being granted very exceptionally, stating400: "The degree of interference may in some cases be minimal; in other cases, it may in any event be justified, although I am unable at present to envisage the circumstances of any such case." Neither the blanket nor the modified approach corresponds with the present law. If they were sound, there would be no need for the rule in Bonnard v Perryman. So far as there is a difference between them and the present law, although the Corporation's submissions sometimes seem to embrace them, this Court was not in the end specifically asked to resolve that difference by changing the law, and it should not be changed. 398 Church of Scientology of California Inc v Reader's Digest Services Pty Ltd [1980] 1 NSWLR 344 at 349-350. 399 Church of Scientology of California Inc v Reader's Digest Services Pty Ltd [1980] 1 NSWLR 344 at 351. 400 (1988) 14 NSWLR 153 at 164. Free speech lacking in independent operation outside the defences. Secondly, going to the other extreme, it could be that issues of free speech should have no independent operation outside the defences. In Lange v Australian Broadcasting Corporation this Court said401: "Under a legal system based on the common law, 'everybody is free to do anything, subject only to the provisions of the law', so that one proceeds 'upon an assumption of freedom of speech' and turns to the law 'to discover the established exceptions to it'. The common law torts of libel and slander are such exceptions. However, these torts do not inhibit the publication of defamatory matter unless the publication is unlawful – that is to say, not justified, protected or excused by any of the various defences to the publication of defamatory matter, including qualified privilege. The result is to confer upon defendants, who choose to plead and establish an appropriate defence, an immunity to action brought against them. In that way, they are protected by the law in respect of certain publications and freedom of communication is maintained." This stress on the role of the defamation defences in preserving free speech suggests that if no defences are available in relation to an impending publication, it would be unquestionably unlawful, it would fall within an exception to the "assumption" of free speech, and it would be open for it to be restrained by interlocutory injunction like many other threatened torts. But it does not follow from the bare existence of arguable defences that no interlocutory injunction should be granted. On the approach under discussion, the role of free speech is neither greater nor less than its reflection in the substantive defences to the tort of defamation. Those defences vindicate free speech at the trial. They also vindicate free speech at hearings for interlocutory injunctions. The less it can be seen at an interlocutory hearing that they are likely to fail at a trial, the more likely it is that an interlocutory injunction will be refused, and the role of free speech will be legitimately affirmed at that stage. The more it can be seen at an interlocutory hearing that they are likely to fail at a trial, the more likely it is that an interlocutory injunction will be granted, with a consequential limitation on free speech, but not on legitimate free speech. Free speech is important and, as reflected in the defences, free speech is significant, but it is not at the interlocutory hearing the ace of trumps, or indeed a card of any value at all, save to the extent that the defences give it value. The approach conforms with principles of legality: it gives weight to policies and considerations outside the 401 (1997) 189 CLR 520 at 564-565 per Brennan CJ, Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ (footnotes omitted). law so far as they have been reflected in rules of law, but not so far as they have not been. On this approach, freedom to speak as one wishes is not given greater weight in relation to interlocutory injunctions against defamation than, for example, freedom to work as one wishes is given in hearings relating to interlocutory injunctions against breach of covenants in restraint of trade. In the latter instance liberty of trade is seen as important, but it is not given significance going beyond its recognition in the rules stipulating when restraints of trade are unreasonable. There is no principle that independently of the factors going to whether there is a serious question as to breach of covenant and as to its reasonableness the court must bear in mind in addition, as an especially weighty factor, the age-old right to trade freely. This approach would depart from Bonnard v Perryman by treating applications for interlocutory injunctions against defamation in the same way as applications for interlocutory injunctions against any other wrong. Some support could be obtained for this approach from Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd. There Callinan J said, in discussing the judicial caution employed when considering whether to grant an interlocutory injunction against the impending publication of a defamation402: "The rationale offered for judicial caution is usually that free speech is precious beyond all other things ... To give all weight to ... free speech ... is to overlook, or to give insufficient weight to the continued hurt to a defamed person pending trial; the greater resources generally available to a defendant to contest proceedings; the attrition by interlocutory appeals to which a plaintiff may be subjected; the danger that by the time of vindication of the plaintiff's reputation by an award of damages not all of those who have read or heard of the defamation may have become aware of the verdict; the unreasonableness of requiring the plaintiff, in effect, at an interlocutory stage, unlike in other proceedings for an interlocutory injunction, to prove his or her case; and, the fact that rarely does a publication later, rather than earlier, do any disservice to the defendant or to the opportunity to debate the issues in an informed but not defamatory way, and therefore to free speech." Many of these difficulties would be met if free speech were given no more than the weight which the law's recognition of defamation defences gives it, and the strength of those defences were assessed in the circumstances of particular applications for interlocutory injunctions. 402 (2001) 208 CLR 199 at 341 [351] (footnote omitted). Free speech as independent but indeterminate factor. Thirdly, the law could adopt an intermediate position. It would be more favourable to the plaintiff than Bonnard v Perryman in departing from that case by abandoning or loosening the strict limits laid down in that case. It would allow a degree of favour to the interests of defendants by giving free speech some role independently of the defences – thus departing in another respect from Bonnard v Perryman, which stresses the importance of free speech merely as the justification for the strictness of the limits stated, without giving it any independent role beyond the limits themselves. On this approach, the question of free speech will be decisive in some cases but not others: perhaps it will be determinative when all other factors are evenly balanced, perhaps it is a factor to be given greater weight than other factors; the test will be difficult to define, and it will be difficult to state specific propositions about how it should be applied. Conclusion. If it were desirable and necessary to do so, the Court could consider whether Bonnard v Perryman should be departed from. Many things would have to be taken into account. The points made by Callinan J in the passage just quoted and elsewhere in the same judgment403 would be relevant. Another relevant question would be whether principles directed to tyrants, or at least to the Tudor, Stuart and Hanoverian monarchs, should control the modern law of Australia in its attempts to deal with defamatory statements by large corporations about ordinary citizens. Attention could be given to the significance of changed social conditions – to the fact that the judges who decided the cases which culminated in Bonnard v Perryman had just finished living through an era when the leading political journalists were Robert Cecil and Walter Bagehot; the name of Harmsworth was unknown; there were no relatively cheap mass circulation newspapers operated by large publicly owned companies; and no radio or television outlets were operated by those companies and by the state. Consideration could be given to whether those favoured children of equity should, in the light of past experience, become less favoured. Have changes which have affected other groups in society passed the mass media by to some degree? Was Baroness O'Neill of Bengarve right to say in the fifth of her Reith Lectures in 2002, under the title "License to Deceive", "The media ... while deeply preoccupied with others' untrustworthiness – have escaped demands for accountability"?404 Another question is whether she was also right to say405: 403 Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at 299-309 [254]-[276]. 404 O'Neill, A Question of Trust, (2002) at 89. 405 O'Neill, A Question of Trust, (2002) at 92-93. "We may use twenty-first century communication technologies, but we still cherish nineteenth century views of freedom of the press, above all those of John Stuart Mill. The wonderful image of a free press speaking truth to power and that of investigative journalists as tribunes of the people belong to those more dangerous and heroic times. In democracies the image is obsolescent: journalists face little danger (except on overseas assignments) and the press do not risk being closed down. On the contrary, the press has acquired unaccountable power that others cannot match." More particularly, attention would have to be given to whether the very narrow capacity of plaintiffs to obtain urgent relief against the publication of defamatory material should be widened in view of the fact, if it is a fact, that it is not only the scale and power of the media which has increased, but its penetration, its pervasiveness, and its capacity to do harm also. Those who decided Bonnard v Perryman had lived through a time when there was no electronic media and no problem of cross-media ownership; the print organs were much more fragmented than now, were directed to a population with much lower literacy than now, were much less able to reach most of the adult population, and were much less able speedily to disseminate defamatory material. In short, attention would have to be directed to whether in modern conditions the mass media are more able to inflict harm which is not also grave but irreparable, and if so, whether it ought to be less difficult for plaintiffs to obtain urgent interlocutory relief to prevent such harm. These and other relevant matters have not been debated in argument. In this case it is not desirable to decide whether the law should depart from Bonnard v Perryman because it is not necessary to do so. It is not necessary to consider whether the law should become less restrictive in its approach to the grant of interlocutory injunctions to restrain publication of defamatory matter because, subject to considering the five errors of principle summarised above, this case as seen by the primary judge falls within the areas in which Bonnard v Perryman permits an injunction to be granted. There are clear imputations of a highly defamatory kind; it is unlikely that any defences will be established; it is unlikely that damages will be nominal. Nor is it necessary to consider whether the law should depart from Bonnard v Perryman by becoming more restrictive: the Corporation did not distinctly argue for this outcome. First error: conflation of "public benefit" and "public interest"? The first error of principle for which the primary judge is criticised is that he conflated the requirement of "public benefit" in s 15 of the Defamation Act with the public interest in having free speech unfettered. The existence of this error was contended for by the Corporation406. The Corporation also submitted 406 See par [183] above. that in the Full Court only Slicer J, but not the majority, dealt with the question whether this supposed error of the primary judge had taken place. That latter submission can be rejected at once. In the Full Court the Corporation's submission was advanced in support of Ground 14 of its Notice of Appeal, which was as follows: "The learned primary judge erred in treating his consideration of whether it was arguable for the purposes of section 15 of the Act that the publication of the imputations would be for the public benefit, as determinative of the more general question of public interest for the purposes of the grant of an interlocutory injunction restraining the publication of defamatory matter." The Full Court majority revealed a sound understanding of that ground in saying407: "The learned primary judge needed to consider whether it was arguable for the purposes of s 15 that the publication of the relevant imputations would be for the public benefit, and needed also to consider whether the effect of an injunction would be to restrain the discussion of matters of public interest or concern. Those are two separate questions. Ground 14 asserts that the learned primary judge erred by treating the question of public benefit in relation to s 15 as determinative of the more general question." The Full Court majority then analysed the primary judge's reasoning as follows408: "The learned primary judge referred to the proposition that an interlocutory injunction will not usually be granted 'where such an injunction would restrain the discussion in the media of matters of public interest or concern' [409]; then proceeded to consider the strength of a s 15 defence based on truth and public benefit, paying particular attention to the question of public benefit; expressed the view that, in general, it was not for the public benefit that the media should publicly allege that a 407 Australian Broadcasting Corporation v O'Neill [2005] TASSC 82 at [80]. 408 Australian Broadcasting Corporation v O'Neill [2005] TASSC 82 at [81]. In the next four footnotes [nn 409-412], the particular paragraphs of the primary judge's reasons for judgment which the majority appear to have in mind are identified. 409 This is a reference to O'Neill v Australian Broadcasting Corporation [2005] TASSC 26 at [24]. person has committed crimes of which he or she has not been convicted, but that such allegations should usually be made to the public only as a result of charges and subsequent conviction; and concluded that a claim of 'public benefit' may well be unsuccessful[410]. He then returned to the more general question. He said it followed from what he had been saying that he was unpersuaded that an interlocutory injunction would 'restrain the discussion in the media of matters of public interest'. He said that he applied 'the law's use of the term "public interest"'[411]. He had earlier referred to a submission made by counsel for the appellant to the effect that the term 'public interest' in defamation statutes in other jurisdictions meant the same as 'public benefit' in the Defamation Act, s 15"412. The Full Court majority concluded with the following summary413: "[His Honour] took into account the correct principles relating to the freedom of the press, took into account separately the prospects of a successful defence based upon truth and public benefit, and exercised his discretion in accordance with the appropriate principles. He did not apply a wrong principle." Whatever else may be said of these passages, they do deal with the question whether the primary judge had wrongly conflated public benefit under s 15 with public interest. The Corporation's submission that they did not is baseless. Further, the Full Court majority's summary of the primary judge's approach is correct. The Full Court majority's conclusion that the primary judge maintained a separation between two questions – the question whether an injunction would restrain media discussion of "matters of public interest" and the question whether the "public benefit" element of the defence afforded by s 15 was likely to be made out – is supported by a specific statement in the primary judge's reasons for judgment. He referred to an argument by counsel for the 410 The preceding three clauses are references to O'Neill v Australian Broadcasting Corporation [2005] TASSC 26 at [28]. 411 These two sentences refer to O'Neill v Australian Broadcasting Corporation [2005] TASSC 26 at [29]. 412 This sentence is a reference to O'Neill v Australian Broadcasting Corporation [2005] TASSC 26 at [24] and [26]. 413 Australian Broadcasting Corporation v O'Neill [2005] TASSC 82 at [82]. plaintiff that "matters of crime are quite obviously matters of public interest", and then said414: "[A]greeing that matters of crime are matters of public interest is a far cry from conceding that the public dissemination by the media of all matters relating to crime, or matters concerning crimes allegedly committed by the plaintiff, will be for the public benefit". Hence, the Full Court majority reasons were correct to conclude that the primary judge did not conflate the two questions in the manner complained of in Ground 14 of its Notice of Appeal to the Full Court. It is true that in a long passage discussing the availability of the s 15 defence, the primary judge four times used the phrase "public benefit" and twice used the phrase "public interest"415. It is also true that the primary judge appeared to suggest that it followed from that passage that he was not persuaded that the injunction would restrain media discussion of matters of public interest. However, when his reasons for judgment are read as a whole, and allowances in relation to matters of the type just mentioned are made in view of the circumstances in which the reasons were composed, it is necessary respectfully to reject the view that the primary judge's reasoning was afflicted by the conceptual confusion alleged. Second error: trial by media The Corporation submitted that the primary judge erred in characterising the broadcasting of the film as trial by media and as treating the criminal process as the only proper context in which to ventilate matters of the kind which the Corporation wished to ventilate. The issue cannot be described as irrelevant416. The primary judge's comments on trial by media are criticised by reference to various propositions which it is unnecessary to repeat. If those propositions are to have a status greater than that of personal opinions based on common human experience, they would have to be supported by evidence, of which there is none. So far as they are only personal opinions based on common human experience, it is necessary respectfully to register deep disagreement with them. It is curious that the Corporation, which put arguments depending heavily on the importance of leaving untested issues in relation to allegations of civil 414 O'Neill v Australian Broadcasting Corporation [2005] TASSC 26 at [27] (emphasis added). 415 O'Neill v Australian Broadcasting Corporation [2005] TASSC 26 at [28]. 416 The Full Court of the Supreme Court of Victoria saw it as a possible issue in some cases in National Mutual Life Association of Australasia Ltd v GTV Corporation Pty Ltd [1989] VR 747 at 765. defamation to jury trial, did not acknowledge that there might be some importance in leaving untested issues in relation to allegations of criminal conduct to criminal jury trial. Third error: the significance of free speech Even if the primary judge did not confuse the s 15 issue with the issue of free speech, can it be said that he dealt properly with the free speech issue in other respects?417 He referred to a submission by the Corporation and the other defendants that "the power to grant an interlocutory injunction to restrain an allegedly defamatory publication should be exercised with great caution, only in very clear cases and usually not in cases where the defendant asserts that it has good defences"418. He said that counsel had referred, in support of that proposition, to Church of Scientology of California Inc v Reader's Digest Services Pty Ltd419, Chappell v TCN Channel Nine Pty Ltd420 and "a number of English cases". He also said that the defendants placed particular reliance on a statement of Hunt J421 that an interlocutory injunction would not usually be granted "where such an injunction would restrain the discussion in the media of matters of public interest or concern"422. He also said423 that he was "unpersuaded that the granting of an interlocutory injunction restraining the defendants from publishing the imputations will 'restrain the discussion in the media of matters of public interest', as that expression was used by Hunt J424 ...". And he concluded by saying425: "Much was said at the hearing by counsel for the defendants about the need to uphold and protect the freedom of the press. But like all freedoms, it is not an absolute one." 417 See n 244 above. 418 O'Neill v Australian Broadcasting Corporation [2005] TASSC 26 at [23]. 419 [1980] 1 NSWLR 344. 420 (1988) 14 NSWLR 153. 421 Chappell v TCN Channel Nine Pty Ltd (1988) 14 NSWLR 153 at 164. 422 O'Neill v Australian Broadcasting Corporation [2005] TASSC 26 at [24]. 423 O'Neill v Australian Broadcasting Corporation [2005] TASSC 26 at [29]. 424 Chappell v TCN Channel Nine Pty Ltd (1988) 14 NSWLR 153 at 164. 425 O'Neill v Australian Broadcasting Corporation [2005] TASSC 26 at [36]. It is not to be presumed that the primary judge failed to pay attention to what counsel submitted to him, or to what the cases cited said. The vital issue is whether he turned his mind to the correct question, not whether one agrees with his answer to the question. He did have in mind the importance of media discussions of matters of public interest. Indeed, in perhaps assuming that the need to uphold press freedom is a requirement additional to the limits stated in Bonnard v Perryman (as distinct from seeing it merely as a justification for them) the primary judge may have been unduly favourable to the Corporation. The Full Court majority itself noted the reluctance of the courts to grant interlocutory injunctions in defamation cases and the need to protect freedom of speech426. The Corporation tended to advance a submission that the Full Court majority wrongly rejected "the paramountcy of free speech" and failed to treat free speech as an "independent and overriding" factor. But the law does not go so far as to place free speech on a pinnacle of irrefragable significance. If it did, it would ban the grant of interlocutory injunctions against defamation in any circumstances, not merely in circumstances where there are doubts about the plaintiff's prospects at trial. This ban would reflect the approach of Blackstone and Lord Denning MR. But the law does not reflect this approach. It permits the grant of interlocutory injunctions within the limits of Bonnard v Perryman, perhaps with local modifications. In these circumstances the courts below did not err. The key question is: what should the primary judge have done that he did not do? Success for the Corporation on this point depends on concluding that the correct approach was taken by Slicer J and that the primary judge did not take it. Slicer J quoted Hunt J in Church of Scientology of California Inc v Reader's Digest Services Pty Ltd, and reconciled that case with Hunt J's later decision in Chappell v TCN Channel Nine Pty Ltd by perceiving the latter to turn on a distinction "between matters internal or personal to the life of a citizen and those which are, by reason of public life, within the public domain"427. Blackstone, like Hunt J in Church of Scientology of California Inc v Reader's Digest Services Pty Ltd, suggests that the restraint of press discussion is not merely one factor to be weighed, but an absolute bar to injunctive relief. Yet Slicer J rejected the existence of any absolute bar of this kind. He quoted authority428 holding that the public interest in free discussion of matters of public interest is something that 426 Australian Broadcasting Corporation v O'Neill [2005] TASSC 82 at [53]. 427 Australian Broadcasting Corporation v O'Neill [2005] TASSC 82 at [30]. 428 Australian Broadcasting Corporation v O'Neill [2005] TASSC 82 at [32]. only arises "when the balance of convenience comes to be weighed", and that "weighs heavily against the grant of an injunction"429. Slicer J did then say430: "Whilst I do not necessarily agree that the criteria of free discussion of matters of public general interest simply substitute a test of balance of convenience in favour of the intended publisher, the reasoning that it operates against the person claiming pre-publication restraint accords with my approach." But later he agreed with the primary judge that "freedom of the press" is "not absolute" and said it is "not a trump card" but only "a compelling factor"431. If Slicer J is correct, where did the primary judge err? What was the respect in which Slicer J correctly took press freedom into account while the primary judge did not? What was the aspect of Slicer J's reasoning which was decisively superior to that of the primary judge? These are not questions which the Corporation answered. To criticise the primary judge for not employing "exceptional caution" when he said that he was conscious of the need for "great caution"432 is not a course which can be undertaken unless the Corporation has shown that this verbal distinction corresponds with any substantive difference. This it did not do. It has not been shown that the primary judge made the third error. Fourth error: primary judge's analysis of plaintiff's case Did the primary judge err in his method of analysing the strength of the plaintiff's case before moving to the balance of convenience? Save for one brief passing reference, the primary judge did not touch on the application of "rigid" or "flexible" tests, and any error he made in that regard cannot be considered as determinative. Rather, the primary judge's summary of the parties' submissions, and his comments on them, reveal that, in addition to bearing in mind the traditional reluctance of the courts to grant interlocutory injunctions against defamation except in clear cases because of the importance of media debate about matters of public interest, the principal steps in his reasoning were as follows. 429 Jakudo Pty Ltd v South Australian Telecasters Ltd (1997) 69 SASR 440 at 442 per 430 Australian Broadcasting Corporation v O'Neill [2005] TASSC 82 at [33]. 431 Australian Broadcasting Corporation v O'Neill [2005] TASSC 82 at [9] and [38]. 432 O'Neill v Australian Broadcasting Corporation [2005] TASSC 26 at [23]. First, he acted on the Corporation's admission that its film was capable of conveying imputations that the plaintiff was a suspect in the disappearance and murder of the Beaumont children, and was a multiple killer of children. Secondly, he evidently thought that to say that the plaintiff was a suspect in the disappearance and murder of the Beaumont children was defamatory433. Thirdly, he also thought that to say that the plaintiff was a multiple killer of children was highly defamatory434 (and therefore deeply injurious to the plaintiff). Fourthly, he impliedly accepted that publication of the admitted imputations in the manner threatened by the Corporation might injure the plaintiff's reputation beyond the extent to which it had already been damaged by his conviction and by third party statements: this damage was particularly likely in northern Tasmania435. Fifthly, the s 15 defence was unlikely to succeed because the Corporation's conduct, even if it dealt with matters of public interest, was not for the public benefit436, and other defences referred to in argument (Defamation Act, s 14(1)(a), (d) and (h) and s 16 (1)(c), (e) and (h)) lacked merit437. Finally, the primary judge, in dealing with the adequacy of damages, found the suggestion that damages would only be nominal not to be persuasive438. Only the last proposition is controverted by the Corporation. It will be dealt with below: at this stage the point is simply that the primary judge did identify the question about whether damages might be nominal as a relevant one, even if minds may differ on the rightness of his answer to it. The primary judge did not in terms direct attention to the practical consequences of the injunction. This was not erroneous, because the injunction had no practical consequences of any significance beyond those flowing from its mere grant: the interlocutory injunction did not, for example, finally dispose of the action. It is true that the primary judge did not employ the precise language used in the submissions advanced to this Court. The question, however, is whether in substance he attended to the criteria which he was obliged to bear in mind. The answer is that he did. In substance he found a threat to repeat the publication of 433 O'Neill v Australian Broadcasting Corporation [2005] TASSC 26 at [20]-[21]. 434 O'Neill v Australian Broadcasting Corporation [2005] TASSC 26 at [22]. 435 O'Neill v Australian Broadcasting Corporation [2005] TASSC 26 at [20]. 436 O'Neill v Australian Broadcasting Corporation [2005] TASSC 26 at [25] and [28]. 437 O'Neill v Australian Broadcasting Corporation [2005] TASSC 26 at [30]-[31]. 438 O'Neill v Australian Broadcasting Corporation [2005] TASSC 26 at [33]. serious defamations – publication which was potentially very injurious to the plaintiff, in relation to which no defence could be established and which was capable of sounding in more than nominal damages. To grant an interlocutory injunction in these circumstances does not suggest any error in principle. The case as perceived by the primary judge can be described as very clear, and as one in which, even if a judge were to exercise great caution, an interlocutory injunction might be granted: the absence of any viable defences removed any inhibition based on the fear of restraining lawful media discussion of matters of public interest. Fifth error: possibility of only nominal damages The primary judge said that at the trial the court might "find against the plaintiff or award him only nominal damages, but those possibilities are not persuasive to me when resolving the appropriate outcome for the application"439. In the light of that passage it is necessary to reject the proposition that the primary judge failed to take account of the possibility that, if publication occurred and was found to involve actionable defamation, only nominal damages might be awarded. It would also not be correct to hold that the Full Court majority failed to advert to the matter and failed to perceive that the primary judge had not taken account of the possibility that only nominal damages might be awarded. In any event, these points were not taken in the Amended Notice of Appeal or in the Corporation's submissions. Either the primary judge considered the nominal damages question, or he did not. If he did not consider it, he erred in principle. If he considered it (as he did), but came to a wrong factual conclusion, he erred in fact, but not in principle. It has not been demonstrated that the primary judge did err in fact. It has not been demonstrated that he was wrong, for example, in identifying northern Tasmania as an area where the adverse publicity had not reached. He habitually sat in northern Tasmania. He resided there. He was unaware of the publicity. He was much better placed to assess the point than any other judge. Hence it has not been demonstrated why it would not be open to a jury to compensate the plaintiff for injury to reputation, and injury to feelings, despite the fact that he has been convicted of an odious crime and is serving a life sentence – for he remains a resident of this country, entitled to the protection of its law, which prides itself on assisting those who may have done much to make themselves hated. Damages might be greatly affected by a matter which cannot now be assessed and on which no adverse prejudgment is to be made – the 439 O'Neill v Australian Broadcasting Corporation [2005] TASSC 26 at [33]. plaintiff's performance as a witness. It would be for the jury to make a judgment of him as a man, and, to adopt one of Mr Davie's ideas, to estimate whether the man who once murdered is the same being as the man who is now suing. The Corporation placed considerable reliance on the fact that the police have possession of a document which, the Corporation alleges, is a signed confession to another murder. But that document is, with all respect to the police, the product of another era. In 1975, when the confession was supposedly made, police practice, and to some extent the law, whispered the last enchantments of an age holding a view not now in favour. The view was put thus by a Chief Constable of Greater Manchester440: "No machine should be allowed to get in between the suspect and his interrogator ... It would break that essential rapport which a detective needs to elicit an admission of guilt legitimately." But attitudes have changed. So, partly through legislative and partly though judicial means, has the law. As a consequence, and as a sign, of "the persistent and continuing denigration of police evidence in this country"441, majority decisions of this Court442 have discounted to insignificance confessions which have not been recorded on videotape or audiotape where it was technically possible to do so. In 1975 videotaping may well have been impossible for the Tasmanian police officers concerned, and perhaps audiotaping was too. But the fact that the confession is not mechanically recorded is not its only defect. The circumstances surrounding it are suspicious. The confession occupies only eight typed pages, but it purports to be a verbatim record of questions and answers despite being the result of an interview which is said to have lasted three hours and 10 minutes. This raises questions, however many allowances are made for slow thinking, slow speaking and slow typing. Hence the "confession" is of a type which has fallen into discredit since 1975. It is also a confession which the plaintiff contests. It will not, at this stage of the proceedings, bear any useful weight. Conclusion It is thus necessary respectfully to disagree with the central arguments advanced to make good each of the five errors which are said to justify the allowing of the appeal. It follows that the appeal should be dismissed. 440 Mortimer, In Character, (1984) at 82. 441 R v Schaeffer (2005) 159 A Crim R 101 at 105 [12] per Ormiston JA. 442 See Nicholls v The Queen (2005) 219 CLR 196. Orders I agree with the orders proposed by Kirby J.

HIGH COURT OF AUSTRALIA APPELLANT AND THE QUEEN RESPONDENT [2018] HCA 48 17 October 2018 ORDER Appeal dismissed. On appeal from the Supreme Court of South Australia Representation M E Shaw QC with B J Doyle for the appellant (instructed by Caldicott Lawyers) I D Press SC with B Lodge for the respondent (instructed by Director of Public Prosecutions (SA)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Criminal law − Appeal against convictions − Where appellant convicted of five counts of sexual offending against single complainant being his sister − Where counts joined − Where s 34P of Evidence Act 1929 (SA) provided for admission of discreditable conduct evidence for permissible use − Where applications to have counts one and two tried separately and to prevent Crown from leading evidence of discreditable conduct against complainant dismissed − Where Crown relied upon evidence of appellant's other alleged sexual misconduct to rebut presumption of doli incapax and to show relationship between appellant and complainant − Where verdicts on counts one and three quashed on appeal − Whether evidence of appellant's other alleged sexual misconduct admissible on trial of each remaining count − Whether joinder occasioned miscarriage of justice. Evidence − Criminal trial − Sexual offences − Propensity evidence − Admissibility − Where Crown relied on uncharged acts as relationship or context evidence − Where evidence of one uncharged act improperly admitted − Whether miscarriage of justice. Words and phrases – "admissibility", "context evidence", "contextual use", "discreditable conduct evidence", "effluxion of time", "impermissible use", "non- propensity use", "other alleged sexual misconduct", "permissible use", "prejudicial effect", "probative value", "relationship evidence", "uncharged act". Evidence Act 1929 (SA), Pt 3 Div 3, s 34P. KIEFEL CJ, BELL, GAGELER, NETTLE AND GORDON JJ. This appeal is concerned with the admissibility of evidence under Div 3 of Pt 3 of the Evidence Act 1929 (SA) ("the Evidence Act") of the accused's sexual misconduct towards the complainant on occasions other than the occasion charged where the use of the evidence is confined to "contextual" purposes. In these reasons, the expression "the other sexual misconduct" is used to refer to evidence of sexual acts charged in counts in the Information other than the count under consideration and sexual acts for which the accused has not been charged. An evident purpose of the introduction of Div 3 of Pt 3 into the Evidence Act1 was to overcome uncertainty under the common law2 as to the admissibility of evidence of the accused's discreditable conduct including other sexual misconduct where the use of the evidence is confined to "contextual" purposes3. Division 3 of Pt 3 provides for the admission of "discreditable conduct evidence" for permissible uses that rely on proof of the defendant's particular propensity as circumstantial evidence of a fact in issue and for permissible, non-propensity, uses. The test for admission for the latter use is less demanding than the test for admission for a propensity use. Provided the probative value of evidence of the accused's other sexual misconduct outweighs any prejudicial effect the evidence may have on the defendant, the evidence may be received for one or more contextual uses. Procedural history The appellant was tried in the District Court of South Australia (Judge Beazley and a jury) in March 2015 on an Information that charged him with five counts of sexual offences against his sister, VW. The appellant is two years and ten months older than VW. The first count alleged an indecent assault4 1 Evidence (Discreditable Conduct) Amendment Act 2011 (SA). 2 KRM v The Queen (2001) 206 CLR 221 at 230-233 [24]-[31] per McHugh J; [2001] HCA 11; HML v The Queen (2008) 235 CLR 334 at 358 [24]-[25], 361 [35] per Gleeson CJ, 362 [41] per Gummow J, 363 [46], 370 [58]-[60] per Kirby J, 383 [106], 396-397 [163]-[164], 416 [244] per Hayne J, 417 [248], 422 [271], 448-450 [328]-[330] per Heydon J, 478 [425], 485 [455], 486 [460], 487-488 [465]-[466] per Crennan J, 495 [494], 496 [498], 498 [502] per Kiefel J; [2008] HCA 16. South Australia, Legislative Council, Parliamentary Debates (Hansard), 26 July 4 Criminal Law Consolidation Act 1935 (SA), s 56. Bell Nettle Gordon which was particularised as occurring when the appellant was aged 11 or 12 years and was, by law, presumed to be doli incapax5. The second count, which charged an offence of carnal knowledge6, was particularised as occurring when the appellant was aged 17 years. The remaining counts charged offences that were alleged to have taken place when the appellant was an adult: the persistent sexual exploitation of VW, a child7, particularised as occurring over a period when the appellant was aged 18 or 19 years, and two counts of rape8. The first of the latter offences was alleged to have occurred when the appellant was aged 28 years and the second around one year later. The prosecution adduced evidence from VW of the appellant's other alleged misconduct against her from when she was three years old until the end of the period of the alleged offending ("the appellant's other alleged sexual misconduct"). Three incidents were alleged to have occurred before the commission of the first offence – the bath incident, the implements shed incident and the bedroom incident. The appellant was aged between six and nine or ten years at the date of these incidents. A purpose of adducing this evidence was to rebut the presumption of doli incapax. The appellant gave evidence denying that he had engaged in any sexual conduct with VW. The jury returned verdicts of guilty on each count. The appellant appealed against his convictions to the Court of Criminal Appeal of the Supreme Court of South Australia (Sulan, Peek and Stanley JJ). The Court of Criminal Appeal allowed the appeal in relation to the first and third counts. Their Honours held that the evidence adduced in support of the first count was incapable of rebutting the presumption that the appellant was doli incapax. Their Honours held that the evidence adduced in support of the third count was "simply too sparse" for the jury to agree upon any two occasions on which a particularised act of sexual exploitation (penile vaginal intercourse) See RP v The Queen (2016) 259 CLR 641; [2016] HCA 53. 6 Criminal Law Consolidation Act, s 55(1)(a). 7 Criminal Law Consolidation Act, s 50(1). 8 Criminal Law Consolidation Act, s 48(1). Bell Nettle Gordon occurred9. The verdicts on counts one and three were quashed and verdicts of acquittal were substituted on those counts. The Court of Criminal Appeal rejected the contention that the joinder of counts one and three had occasioned a miscarriage of justice in the trial of the remaining counts. Their Honours concluded that the evidence adduced in relation to counts one and three was admissible on the trial of each other count as "relationship evidence"10. This was a shorthand reference to evidence of other sexual misconduct adduced for one or more of the contextual purposes explained in R v Nieterink and by this Court in Roach v The Queen11. The appeal against the convictions on counts two, four and five ("the remaining counts") was dismissed. On 16 February 2018, Kiefel CJ and Bell J granted the appellant special leave to appeal. The appeal is brought on two grounds. The first ground asserts that the joinder of count one occasioned a miscarriage of justice because the evidence led in relation to it was not admissible on the trial of the remaining counts. In the alternative, if the evidence might have been received as evidence of "uncharged acts", it is contended that the trial miscarried nonetheless for one or more of the following reasons: (i) the evidence was not led, and the jury was not instructed, on the basis that the act charged in count one was an uncharged act; (ii) having returned a verdict of guilty on count one, the jury "necessarily treated the evidence in relation to it as having a status or effect which … it could not properly bear"; and (iii) the verdict on count one involved the rejection of the appellant's sworn account. The second ground mirrors the first with respect to the joinder of count three, save that there is no pleading of particular (ii) in the alternative way the trial is said to have miscarried. On the hearing of the appeal, the focus was on the challenge articulated in the first ground. For the reasons to be given, with the exception of the earliest act, the bath incident, the Court of Criminal Appeal was right to hold that the whole of the 9 R v Johnson [2015] SASCFC 170 at [110] per Peek J (Sulan and Stanley JJ agreeing at [2]). 10 R v Johnson [2015] SASCFC 170 at [121]. 11 R v Johnson [2015] SASCFC 170 at [20] citing (1999) 76 SASR 56 and (2011) 242 CLR 610; [2011] HCA 12. Bell Nettle Gordon evidence of the other sexual misconduct was admissible on the trial of each of the remaining counts. Given the course of the trial, the wrongful admission of the evidence of the bath incident did not occasion a miscarriage of justice. The Court of Criminal Appeal was also right to reject the contention that the joinder of count one or three occasioned a miscarriage of justice. It follows that the appeal must be dismissed. Discreditable conduct evidence Division 3 of Pt 3 of the Evidence Act governs the admission and use of evidence adduced on the trial of an offence that tends to suggest that the defendant has engaged in discreditable conduct, whether or not constituting an offence, other than the conduct constituting the offence charged ("discreditable conduct evidence")12. Division 3 of Pt 3 prevails over any relevant common law rule of admissibility to the extent of any inconsistency13. Section 34P(1) provides that discreditable conduct evidence cannot be used to suggest that the defendant is more likely to have committed the offence because he or she has engaged in discreditable conduct and is inadmissible for that purpose ("impermissible use"). Subject to sub-s (2), discreditable conduct evidence is inadmissible for any other purpose. Sub-section (2) provides: "Discreditable conduct evidence may be admitted for a use (the permissible use) other than the impermissible use if, and only if – the judge is satisfied that the probative value of the evidence admitted for a permissible use substantially outweighs any prejudicial effect it may have on the defendant; and in the case of evidence admitted for a permissible use that relies on a particular propensity or disposition of the defendant as circumstantial evidence of a fact in issue – the evidence has strong probative value having regard to the particular issue or issues arising at trial." 12 Evidence Act, s 34P(1). 13 Evidence Act, s 34O(1). Bell Nettle Gordon Evidence that under Div 3 of Pt 3 is not admissible for one use must not be used in that way even if the evidence is relevant and admissible for another use14. In determining whether discreditable conduct evidence is admissible under sub-s (2)(a), the judge must have regard to whether the permissible use of the evidence is, and can be kept, separate and distinct from the impermissible use so as to remove any appreciable risk of the evidence being used for that purpose15. The judge is required to identify and explain to the jury the purpose for which any discreditable conduct evidence may, and may not, be used16. Subject to a general dispensing power17, a party seeking to adduce discreditable conduct evidence for a sub-s (2)(b) use must give reasonable notice in writing to each other party in the proceedings in accordance with the rules of court18. Pre-trial applications Before the trial, the prosecution notified the appellant in writing of its intention to adduce evidence under s 34P(2)(b) of his particular propensity or disposition. The evidence was particularised as evidence of charged and uncharged acts of sexual misconduct as circumstantial evidence of the appellant's sexual attraction to VW and his tendency to act on that attraction. On 17 October 2014, the appellant filed an application for directions by which he sought orders for the separate trial of counts one and two19, and a ruling that the prosecution not be permitted to lead the evidence identified in its discreditable conduct notice. In a further application, the appellant sought a permanent stay of proceedings on counts one and three. The applications were heard together before Judge Soulio. On the hearing of the applications, the prosecutor argued that the discreditable conduct evidence was admissible for "non-propensity and propensity uses". As to the non-propensity use of the 14 Evidence Act, s 34Q. 15 Evidence Act, s 34P(3). 16 Evidence Act, s 34R(1). 17 Evidence Act, s 34P(5). 18 Evidence Act, s 34P(4). 19 The prosecution had earlier succeeded in an application to have the appellant tried as an adult in relation to the offences charged in counts one and two. Bell Nettle Gordon evidence of acts of sexual misconduct when the appellant was himself a child, the prosecutor submitted that "[t]o suddenly allege that when you are in your late teens or an adult your brother rapes you would seem to be just utterly unbelievable without knowing the history of the relationship". Judge Soulio's ex tempore reasons do not deal with the application to reject the discreditable conduct evidence. It is unclear whether this part of the application filed on 17 October 2014 was pressed. Both applications were dismissed. For the reasons given in R v Bauer (a pseudonym)20, on the trial of multiple sexual offences against a single complainant the latter's evidence of the accused's other sexual misconduct will commonly have very high probative value as circumstantial evidence of the accused's propensity to act on his or her sexual attraction to the complainant. Here, notwithstanding service of the s 34P(2)(b) notice and the stance adopted before Judge Soulio, that the other sexual misconduct evidence was admissible for propensity and non-propensity purposes, at the trial the prosecution confined its reliance on the evidence to the latter purpose. The probative value of the evidence adduced for a contextual use The correctness of the Court of Criminal Appeal's conclusion, that the evidence of other sexual misconduct was admissible on the trial of the remaining counts, requires assessment of whether the probative value of the evidence for a permitted use substantially outweighed any prejudicial effect to the appellant. The expression "probative value" is not defined in the Evidence Act. It was not in issue that the expression is to be understood in the way it is defined in the Uniform Evidence Acts as the extent to which the evidence could rationally affect the assessment of the probability of the existence of a fact in issue. The fact in issue on the trial of each of the remaining counts was the occurrence of the offence. On the trial of a sexual offence, where there is a familial or other relationship between complainant and accused, the complainant's evidence of the accused's other sexual misconduct may serve to place the offence in context in circumstances in which evidence of the offence might otherwise present as inexplicable21. Other recognised contextual uses of evidence of this kind are to [2018] HCA 40 at [51]-[52]. 21 Roach v The Queen (2011) 242 CLR 610 at 624 [42] per French CJ, Hayne, Bell Nettle Gordon explain the failure to complain or to rebuff the accused22; or the accused's confidence to act as he or she did23. The probative value of the complainant's evidence of the accused's other sexual misconduct for these uses lies in its capacity to assist in evaluating the evidence of the offence24. The prejudice with which s 34P(2)(a) is concerned is the risk that the jury will make some improper use of the evidence25. On the trial of sexual offences alleged to have been committed against a single complainant, the complainant's evidence of the accused's other sexual misconduct towards him or her will commonly not give rise to a risk that the evidence will be used otherwise than for its legitimate, contextual use26. As was explained in HML v The Queen27 in relation to uncharged act evidence adduced as propensity evidence, that is so because such evidence is seldom of a kind or quality radically different from charged act evidence, albeit sometimes lacking its specificity and particularity. The same is true of uncharged act evidence adduced as context evidence28. There is seldom as much risk of a jury reasoning improperly from uncharged act context evidence than reasoning improperly from charged act evidence; especially where, as here, the jury is carefully directed as to the limited purpose for which the uncharged act evidence is adduced and that the jury must not find the accused guilty of a charged act unless satisfied beyond reasonable doubt, on the evidence relating to that charge, that the accused is guilty of that charge. 22 KRM v The Queen (2001) 206 CLR 221 at 230 [24] per McHugh J; HML v The Queen (2008) 235 CLR 334 at 352 [6] per Gleeson CJ, 495 [494], 496-497 23 HML v The Queen (2008) 235 CLR 334 at 497 [499] per Kiefel J. 24 HML v The Queen (2008) 235 CLR 334 at 352 [6] per Gleeson CJ. 25 HML v The Queen (2008) 235 CLR 334 at 354 [12] per Gleeson CJ; and see Papakosmas v The Queen (1999) 196 CLR 297 at 325 [91]-[92] per McHugh J; [1999] HCA 37. 26 HML v The Queen (2008) 235 CLR 334 at 388 [126] per Hayne J. 27 (2008) 235 CLR 334 at 388 [126] per Hayne J. 28 Wilson v The Queen (1970) 123 CLR 334 at 344 per Menzies J; [1970] HCA 17; Roach v The Queen (2011) 242 CLR 610 at 624-625 [44]-[46]. Bell Nettle Gordon The appellant contends that, in this case, there was a special risk of prejudice because of the effluxion of time since the alleged offending. But that cannot be so unless the effluxion of time somehow made it more likely that the jury would reason improperly from the uncharged act evidence to a conclusion of guilt. And logically there is no reason to suppose that the jury would do so. There is nothing about the effluxion of time or the forensic difficulties which it imposed on the appellant that conceivably could cause a jury to reason improperly to guilt. Ultimately, however, the focus of the appellant's submissions was on the admission of the evidence of his sexualised behaviour towards his younger sister when he was himself a young child lacking the capacity to understand the serious wrongness of his conduct. He argues that this evidence did not have probative value for any of the contextual uses described above. Assessment of the strength of the argument requires reference to VW's evidence in some detail. The evidence VW grew up with her two brothers, Neil and the appellant, on a farm in south-east South Australia. Neil was the eldest sibling. He was four years older than the appellant and around seven years older than VW. VW was 52 years of age when she reported her allegations to the police. At the date of the trial VW was aged 58 years. Acts of the appellant's other alleged sexual misconduct The bath incident VW's earliest memory was of an incident in the bath when she was "[a]bout three, probably". The appellant and she were being bathed together. The appellant "pushed his foot in between [her] legs to [her] vagina. Not inside [her] vagina." She kicked the appellant to try to get him to stop and "must have connected with him" because he was "screaming and yelling out" for their mother. When their mother arrived, the appellant complained that VW had kicked him. Their mother "belted [VW] on the backside" ("the bath incident"). The implements shed incident The next incident occurred in the implements shed when VW was "[p]robably about four or five". VW was taken to the shed by Neil and the appellant on the pretext of being shown how she could have a baby sister or brother. Neil took VW's pants off as the appellant sat behind her holding her shoulders. Neil spat into his hand and rubbed his fingers and then his penis Bell Nettle Gordon against VW's vagina. VW yelled and tried to get away. The appellant had his hand over her mouth to stop her screaming. Neil told her not to say anything or she would get into trouble ("the implements shed incident"). Immediately after the implements shed incident, VW complained to her mother that Neil and the appellant were trying to give her "a little baby brother or sister" and that it "hurt down here". The mother slapped VW's face and said "[d]on't you ever say that again". VW recalled crying and being confused about why she was the one to be punished. (iii) The bedroom incident The next incident occurred when VW was "probably five or six". Neil and the appellant came into VW's bedroom and Neil said "[g]ive us a root". This was a "regular thing that they would say". She tried to get away from them but she was held down and Neil took her pants off. He spat on his hand and rubbed it and then his penis against her vagina. The appellant also rubbed his penis against her vagina. This was the first time the appellant had assaulted her in this way ("the bedroom incident"). VW did not complain about the bedroom incident because she had "got a belting" when she told her mother about the implements shed incident. (iv) Later acts of the appellant's other alleged sexual misconduct VW said that from when she was five until she was around ten the appellant and Neil would rub their penises against her vagina on "[p]retty much a weekly basis". She told her mother about this behaviour "a couple of times" when she was about five, and over the "next few years", but that "in the end … nothing changed". VW also said that when she was around eight or ten she had called the police on several occasions. She had told the police that her brothers were hurting her but she had not been able to explain in greater detail how they were hurting her. She had been told by the police to tell her parents when they got home. When her parents returned home after one of these calls the appellant reported that VW had telephoned the police. VW explained that she had wanted the boys to stop. Her father yelled at her, he was "really, really wild" and VW did not ring the police again. Count one – the shearing shed incident VW and her friend, FC, were called to the shearing shed where Neil told her "[w]e're going to have a root". He told her that if she tried to fight she would "cop it". Neil took her pants off. He spat onto his hand and rubbed his penis Bell Nettle Gordon against her vagina until he ejaculated. VW saw faces looking down from the wool bales. She felt embarrassed. Neil asked two friends, Des and Peter Flavel, to "come and have a go" but they refused. The appellant then spat on his hand, rubbed the spit against VW's vagina and rubbed his penis against her vagina until he ejaculated. After this VW ran out of the shed ("the shearing shed incident"). VW told FC that "[i]t happens to me all the time and I can't stop them". VW did not complain to anyone else about the shearing shed incident until many years later. At the date of the trial Neil was deceased. Peter and Des Flavel each gave evidence. Des Flavel remembered climbing some wool bales and looking down to see the appellant lying across the top of VW "having intercourse". He said that he "looked straight down in her eyes, and that's something I've never forgotten". Des also saw Neil having intercourse with VW's friend, FC. Peter Flavel did not remember seeing any sexual activity but he recalled Des climbing some wool bales and jumping down saying "[l]et's get out of here". FC refused to make a statement about the incident and was not called to give evidence. The trial was conducted, consistently with the way count one was particularised, on the basis that the appellant was aged 11 or 12 years at the time of the shearing shed incident. The Court of Criminal Appeal noted that the evidence of Des and Peter Flavel suggested that the incident probably occurred before December 1964. The appellant dated an incident in the shearing shed as taking place when he was "probably close to 10". The Court of Criminal Appeal concluded that it was not open to find that the shearing shed incident occurred when the appellant was older than 10 years. The pattern of abuse and VW's complaints to her parents VW said that Neil and the appellant hated each other and that her last recollection of "them doing it together to me" was probably the shearing shed incident. After this, the abuse occurred "[e]very week, sometimes every two weeks, but pretty regularly" but was carried out separately. Generally, the appellant sexually abused VW in her bedroom. She tried to avoid him by pulling her wardrobe across the door. She said that "I told mum on several occasions, many occasions. And dad knew, even though we had – dad and I hadn't specifically spoken about it until I was about 14". VW had been frightened of getting pregnant and on one occasion when her period was late she raised her fears with her mother. Her mother asked "[h]ave you been with anybody?" and VW replied "[n]o, only [the appellant]. He won't leave me alone." Her mother asked "[h]ow far did he penetrate?" and VW Bell Nettle Gordon indicated about one inch. VW asked "if it was possible for brothers and sisters to get pregnant and she said she didn't know, she would have to ask dad". Her mother left her for a little while after this conversation and when she returned she gave VW a hot water bottle. VW lay down for a couple of hours. VW thought that she was about 13 years old at the time of this discussion. VW gave evidence of an occasion when she was about 14 years when Neil demanded sex from her on their way home from a football match. She refused and Neil told her to get out of the car. VW walked home. It was after midnight when she arrived. Her parents confronted her about her late return and she told them what had happened. Her mother said to her father that "this has got to stop". VW did not know whether her father had spoken to her brothers. Nothing changed after this complaint. Count two – carnal knowledge The offence of carnal knowledge charged in count two occurred in late 1970 when VW was around 14 years and the appellant was around 17 years. It was the first occasion on which the appellant had full penile vaginal intercourse with VW. It was the occasion that VW recalled as when she lost her virginity. VW and the appellant had gone to a football match. After the match the appellant went to the local hotel. VW waited in the car for him. He was angry when he returned. On the drive home he stopped the car and said "[g]ive us a root". VW tried to get out of the car and she sought to fight off the appellant's advances. He punched her and slammed her head against the window. He took off her pants and inserted his penis into her vagina. Afterwards, he drove the car back to the hotel. He left VW in the car while he went back inside the hotel. Notwithstanding that she was "horrified" by what had happened, VW waited in the car so that she could get a lift home. She did not tell anyone about the incident. Count three – persistent sexual exploitation The acts relied on as evidencing the persistent sexual exploitation of VW, a child, were particularised as acts of penile vaginal intercourse in the period June 1971 to April 1973. VW was aged either 15 or 16 years at the time. VW said that the appellant had penile vaginal intercourse with her every week or so over this period. Generally, the offences occurred in her bedroom. VW said she had not complained to anyone about these incidents at the time although she said that "Dad knew. He repeatedly put locks on my door." Bell Nettle Gordon The changed pattern of abuse after VW leaves home VW moved out of the family home around April 1973. She was 17 years old and she moved into a flat in Naracoorte. After this the appellant's sexual assaults became less frequent. They occurred a few times on occasions when VW returned to the family home on the weekend. VW moved back to the family home when she was 18 years old. The sexual assaults continued but not very often. VW married in November 1975 when she was 19 years old. The marriage lasted for five years. On infrequent occasions during the marriage the appellant raped VW. These episodes followed a pattern; the appellant would take hold of VW's forearms and hook one of his legs around hers pushing her backwards onto the floor. After one violent assault VW told her mother that she was going to make a complaint to the police. Her mother made her promise not to do so while she lived. After VW's marriage ended, the appellant's sexual abuse became more frequent. For the following three years, VW said, the sexual assaults took place every two or three months. Counts four and five – rape The offence charged in count four occurred in 1981-1982. The appellant came into VW's house and shut the front door leaving her two young sons outside. He said "[j]ust give us a root", forcing VW onto the floor and raping her while her children banged on the door and called out for her. VW did not complain to anyone about the assault. The offence charged in count five occurred in September or October 1983. The appellant arrived at VW's house unannounced and let himself in through the back door. He forced VW onto the lounge room floor. She attempted to resist him and he choked her and hit her about the head. He raped her and then said "I'm moving out to the farm". "Any stock you've got out there, you better get rid of it because I'm going to sell them all". VW telephoned her father after this assault and told him "[the appellant's] been here again. He's just raped me and now he is threatening to sell all my cattle." Her father replied "[d]on't worry about it, it won't happen". The appellant's evidence The appellant agreed that there had been an incident in the shearing shed. He said it occurred when he was close to 10 years old. Des Flavel and Neil had Bell Nettle Gordon wanted him to take his clothes off and lie on top of VW and he had refused to. VW started unbuttoning his shirt and he "didn't want to have a bar of their game. Whatever it was". He was crying and eventually Neil and Des lost interest in him. He denied that FC had been in the shearing shed on this occasion. The appellant denied that he had engaged in any sexual misconduct with VW. It was the defence case that VW had made false accusations against him in the context of a bitter familial property dispute. The course of the trial The prosecution relied on the bath incident, the implements shed incident and the bedroom incident to show that notwithstanding his young age the appellant must have known his conduct in the shearing shed incident was wrong. More generally the evidence of the other sexual misconduct was relied upon to show that the relationship between the appellant and VW was one of "domination borne out of violence, fear, and a lack of being brought to account". The jury was given repeated instructions that the appellant was to be tried on the evidence relating to the count under consideration and not on evidence concerning things done on other occasions. The trial judge identified the limited purpose for which the evidence of the other sexual misconduct had been adduced, explaining that the evidence "may be used ... to understand the context in which the charged offences are alleged to have taken place". His Honour went on to illustrate the possible contextual use of the evidence, observing that it may "explain the confidence the [appellant] might have had in performing the charged offences, a confidence gained from [VW's] failure to complain" and why VW had not complained until much later. These directions were accompanied by a warning not to reason that the appellant was a person who is likely to have committed the charged offences simply because he committed one or more uncharged acts. The sufficiency of the directions as to the permissible and impermissible uses of the evidence of other sexual misconduct was not the subject of complaint at the trial. It should be accepted that the directions sufficed to remove any appreciable risk of the evidence being used for the impermissible use29. 29 Evidence Act, s 34P(3). Bell Nettle Gordon The submissions The appellant contests that the evidence adduced in support of count one possessed probative value for any permissible contextual use that substantially outweighed any prejudicial effect its admission may have occasioned to his case. He argues that the occurrence of the offences charged in the remaining counts can hardly be suggested to be incomprehensible absent evidence of the early childhood incidents. The evidence of those incidents was not needed to explain the lack of complaint given that it was VW's evidence that she made contemporaneous complaints. Nor was the evidence needed to explain VW's submission given that it was VW's evidence that she resisted the assaults. Peek J, giving the leading judgment in the Court of Criminal Appeal, considered that a notable feature of the first three incidents was the mother's response to VW's complaints, which was to remonstrate with VW and not with her brothers. Peek J reasoned that this parental response was unlikely to have impressed on a young child that his conduct was seriously wrong30. The appellant's description of the shearing shed incident as a "game", while self- serving, was, in his Honour's analysis, a reasonable hypothesis with respect to his The appellant embraces this aspect of Peek J's analysis in the alternative way in which he puts his first ground. He submits that the vice in the joinder of count one was that the jury was wrongly invited to conclude, and wrongly did conclude, that as a young child he sexually abused his sister knowing his conduct was seriously wrong. The conclusion is suggested to have infected consideration of the remaining counts. Added to this, he submits that the shearing shed incident was likely to assume undue significance in the jury's consideration of the offences charged in the remaining counts because it was the only incident of sexual misconduct for which there was independent evidence to support VW's account. The prosecution correctly submits that the critical issue is whether the evidence adduced in support of counts one and three was admissible on the trial of the remaining counts; if it was, the Court of Criminal Appeal was right to reject that the trial of the remaining counts miscarried. As to the admissibility of 30 R v Johnson [2015] SASCFC 170 at [97]. 31 R v Johnson [2015] SASCFC 170 at [99]. Bell Nettle Gordon the childhood incidents, the prosecution relies on the reasoning in R v M (D)32, submitting that the fact that the appellant may not have understood the wrongness of his childhood sexual abuse of VW does not deprive evidence of the abuse of its probative value on the trial of the remaining counts. The prosecution submits that the pattern of early childhood abuse and the mother's failure to act on VW's complaints are important to understanding the appellant's confidence to act as he did and VW's failure to complain about the offences charged in counts two and four. Admissibility of the evidence of counts one and three Accepting VW's evidence at its highest, her recollection of the bath incident was not probative of the appellant's capacity to bear criminal responsibility for the offence charged in count one, nor was it probative of any relevant feature of the relationship between the appellant and VW. The appellant and VW were infants being bathed together. His foot touched her vagina and she kicked him. He screamed and their mother came in and smacked her. It cannot rationally be concluded that the incident was illustrative of the appellant's asserted domination of VW. Nor was it illustrative of their mother's failure to act on VW's complaints of sexual abuse; when the mother arrived on the scene it was the appellant who was apparently distressed. It is not suggested that VW said or did anything to convey that the appellant had been mistreating her sexually or otherwise. Evidence of the bath incident should not have been adduced. In this Court, the prosecution only faintly contended to the contrary. The prosecution conceded that if evidence of the implements shed, bedroom and shearing shed incidents was not admissible, the reception of the evidence would have occasioned a miscarriage of justice and required that the appeal be allowed. The concession did not extend to the wrongful admission of evidence of the bath incident taking into account the treatment of that evidence in the summing-up. The submission refers to the following passages in the trial judge's instructions to the jury: "[Y]ou will recall that the prosecution case includes evidence on what I have called 'uncharged acts'. [The prosecutor] directed your attention of one alleged incident in the bath. It is a matter for you, but you might think a six-year-old and three-year-old in the bath have no idea about sexual matters. That is a matter for you." (emphasis added) [2016] 4 WLR 146. Bell Nettle Gordon And: "[VW] gave evidence of the alleged indecent conduct by the [appellant] in the bath at age three. I have already discussed that with you, you will decide whether that could seriously be regarded as being sexual misconduct or not. Just think about that. He was aged about 6 – she was aged about 3." (emphasis added) While unsuccessful objection was taken to the joinder of count one, at the trial objection was not taken to the evidence of the bath incident. Admission of the evidence was not a wrong decision on a question of law33. Nor did admission of the evidence occasion a miscarriage of justice in circumstances in which the trial judge's comments were apt to neutralise any suggestion that the bath incident cast light on the relationship between the appellant and VW, and in which the evidence of the incident was almost certainly subsumed by evidence of the appellant's explicitly sexualised childhood misconduct. In R v M (D)34 the Court of Appeal of England and Wales affirmed its earlier analysis in R v Hodson35. In each case evidence of the defendant's sexual misconduct at a time when he was presumed to be doli incapax was held to have been rightly admitted on his trial for sexual offences against the same complainant36. Admissibility was governed in each case by s 101(1) of the Criminal Justice Act 2003 (UK), which allows evidence of the accused's bad character to be received if, among other things, it is "important explanatory evidence". Evidence is important explanatory evidence if without it the court or jury would find it impossible or difficult to properly understand other evidence in the case and its value for understanding the case as a whole is substantial37. In each case the Court of Appeal considered that evidence of the accused's sexual misconduct as a child was important explanatory evidence in that it would have 33 Criminal Law Consolidation Act, s 353(1). [2016] 4 WLR 146. [2010] EWCA Crim 312. 36 R v M (D) [2016] 4 WLR 146 at 4 [20] quoting R v Hodson [2010] EWCA Crim 312 at [45]; see also Director of Public Prosecutions (Vic) v Martin (2016) 261 A Crim R 538. 37 Criminal Justice Act 2003 (UK), s 102. Bell Nettle Gordon been artificial to confine the complainant's evidence to events occurring after the defendant turned 14 years38. While the statutory regimes differ, the same reasoning informs the assessment of probative value for the purposes of s 34P(2)(a) of a child's acts of sexual misconduct regardless of whether the child bears criminal responsibility for them. The evidence of the implements shed, bedroom and shearing shed incidents was eloquent of the appellant being schooled by his older brother in sexually inappropriate behaviour at a time when the appellant was too young to have any appreciation that the behaviour was seriously wrong. If accepted, the relevance of these early incidents was to understanding the highly dysfunctional family in which VW and the appellant were raised; on VW's account, both of her parents were aware that she was being preyed upon sexually by each of her brothers and yet neither parent was disposed to taking effective action to protect her or to discipline them. Without an understanding of this background, VW's evidence of the offences charged in the remaining counts was likely to have presented as implausible. Implausible features of the offence charged in count two include that "out of the blue" the appellant should demand that his 14-year-old sister "give us a root"; that after forced sexual intercourse VW would sit in the car and wait for the appellant to drive her home; and that after losing her virginity to her brother in circumstances amounting to rape, VW made no complaint to her parents. So, too, it might be thought implausible that VW, an adult woman, would make no complaint following the rape charged in count four. This is to say nothing of the assessment the jury might make of VW's account of her conversation with her father following the last rape if the history of sexual abuse and her parents' phlegmatic response to her reports of that abuse was not known. The appellant did not contest that some evidence of other sexual misconduct was admissible to place the evidence of the offences charged in the remaining counts in context. His argument is that there was no need to adduce evidence of the shearing shed incident and the earlier incidents, and that the evidence of these early incidents risked provoking a response of moral outrage on the part of at least some jurors. 38 R v M (D) [2016] 4 WLR 146 at 4 [20] quoting R v Hodson [2010] EWCA Crim Bell Nettle Gordon As the prosecution submits, the unusual dynamics of this family would have made it difficult to confine VW's evidence of the other sexual misconduct while permitting her evidence of the offences to be evaluated in their proper context. Without her account of the early incidents of abuse, where was her evidence of the sexualised relationship with the appellant to start? The pattern established by Neil, and followed by the appellant, of demanding that VW "[g]ive us a root", dating back to their early childhood, was important to understanding VW's account of the incidents of abuse leading up to and including the offence charged in count two. On occasions, on VW's account, she complained to her mother of the appellant's sexual misconduct. Notably, however, VW did not complain about the offences charged in counts two and four. Her evidence of her mother's inappropriate response to her complaint about the implements shed incident, and the mother's subsequent inadequate response to her daughter's complaints of abuse, is important to the evaluation of VW's evidence of the offences. It is no answer to point to the preclusion on the making of a suggestion or statement to the jury that a failure to make, or a delay in making, a complaint of a sexual offence is probative of the complainant's credibility or consistency of conduct39. Jurors are not limited to considering the submissions of counsel in evaluating the evidence of the complainant40. The evidence of the incidents of sexual intercourse adduced in support of count three was important to the evaluation of VW's evidence of the offences charged in counts four and five. In the absence of evidence that the abuse of VW as a child had continued with periodic incidents of forced sexual intercourse, her account of those offences might be thought also to strain credulity. It is not apparent that evidence of the appellant's childhood sexual misconduct carried out at the instigation of his older brother gave rise to a risk that jurors would be inflamed against him such that they might ignore the direction to act on the evidence and not to permit prejudice or moral judgments to influence their deliberations. The probative value of VW's evidence of the implements shed, bedroom and shearing shed incidents and the later incidents of sexual intercourse adduced in support of count three substantially outweighed any prejudicial effect on the appellant. 39 Evidence Act, s 34M(2). 40 HML v The Queen (2008) 235 CLR 334 at 353 [9] per Gleeson CJ. Bell Nettle Gordon A miscarriage of justice nonetheless? The contention must be rejected that, even if the evidence adduced in support of count one was admissible, there was a miscarriage of justice because count one should not have been left to the jury. The fact that the appellate court determined that the evidence was incapable of supporting the conviction on count one does not mean that its joinder was wrong. There was evidence of each of the elements of the offence and, contrary to this aspect of the appellant's argument, in those circumstances it was not open to the trial judge to direct an acquittal upon an assessment that the evidence fell short of rebutting the presumption of doli incapax41. There is no reason to consider that the jury's finding, that the appellant understood the wrongness of his conduct in the shearing shed incident, infected its consideration of the remaining counts, which charged offences when he was aged 17 years and older. The limited permitted use of the evidence of the other sexual misconduct to the consideration of each of the remaining counts was correctly explained to the jury and the injunction to consider each count separately was given on a number of occasions. There is no basis for inferring that the jury did not act on those directions. The contention that the appellant was prejudiced by the reception of the evidence of the shearing shed incident because it was the sole occasion for which there was independent support for VW's evidence misapprehends the nature of the prejudice with which s 34P(2)(a) is concerned. In assessing the credibility of VW's evidence of the offences charged in the remaining counts, the jury may have taken into account that her account of the shearing shed incident was generally supported by Des Flavel's evidence. This, however, would not be to use the evidence for other than its permitted use. The final contention, that the trial of the remaining counts miscarried because the verdicts on counts one and three involved the jury's rejection of the appellant's sworn account, was not developed in oral argument. In written submissions, the high point of the argument is the assertion that "ordinary experience" suggests that if a jury finds an accused guilty of count one, which the accused has denied on oath, the jury will find it difficult to accept the accused's denial of guilt of count two. The jury was correctly directed to consider each count separately; that it was not incumbent on the appellant to prove anything; 41 Doney v The Queen (1990) 171 CLR 207 at 212 per Deane, Dawson, Toohey, Gaudron and McHugh JJ; [1990] HCA 51; MFA v The Queen (2002) 213 CLR 606 at 615 [26] per Gleeson CJ, Hayne and Callinan JJ; [2002] HCA 53. Bell Nettle Gordon and that if it did not accept his evidence in some respects, or at all, it did not follow that he should be found guilty of the charge under consideration. Consistently with those directions, the jury must have been satisfied of the truthfulness and reliability of VW's account of each of the offences. Necessarily, that satisfaction required the jury to exclude the reasonable possibility that the appellant's evidence in respect of each offence was true. The trial of the remaining counts did not miscarry because the jury rejected the appellant's evidence on counts which were properly joined and on which verdicts of guilty were returned which were later set aside. Order For these reasons there should be the following order: Appeal dismissed.

HIGH COURT OF AUSTRALIA AND THE QUEEN APPELLANT RESPONDENT Leach v The Queen [2007] HCA 3 6 February 2007 ORDER Appeal dismissed. On appeal from the Supreme Court of the Northern Territory Representation I R L Freckelton with R R Goldflam for the appellant (instructed by Legal Aid Commission of the Northern Territory) T I Pauling QC, Solicitor-General for the Northern Territory with R J Coates for the respondent (instructed by Director of Public Prosecutions (Northern Territory)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Leach v The Queen Statutes – Acts of Parliament – Sentencing legislation – Interpretation – Mandatory sentence of life imprisonment with no non-parole period passed upon the appellant in 1984 in respect of each of two convictions for murder – The Sentencing (Crime of Murder) and Parole Reform Act 2003 (NT) ("2003 Act") provided that life sentences for murder were taken to include a 25 year non- parole period – Section 19(1) of the 2003 Act empowered the Supreme Court of the Northern Territory, on the application of the Director of Public Prosecutions, to revoke the statutory non-parole period, and, in accordance with s 19(5), to refuse to fix a non-parole period – Whether the discretion granted to the Supreme Court under s 19(5) of the 2003 Act required the Court to consider "ordinary sentencing principles", including questions of the prisoner's rehabilitation – Meaning of the word "may" in s 19(5) – Whether primary judge must be satisfied "beyond reasonable doubt" of the basis for the decision before making an order under s 19(5). Words and phrases – "may". Criminal Code (NT). Criminal Law Consolidation Act (NT), s 5. Parole of Prisoners Act (NT), s 4. Sentencing (Crime of Murder) and Parole Reform Act 2003 (NT), ss 17-21. Sentencing Act (NT), s 53A. GLEESON CJ. This appeal is from a decision of the Court of Criminal Appeal the Northern Territory1 which, by majority (Mildren and Riley JJ, Southwood J dissenting), dismissed an appeal from the Chief Justice of the Supreme Court of the Northern Territory2 in a matter of sentencing. The proceedings before Martin CJ concerned provisions of the Sentencing (Crime of Murder) and Parole Reform Act 2003 (NT) ("the Act") relating to persons who were serving life sentences at the time of the commencement of the Act. The appellant was serving three life sentences; two for murder, and one for rape. The appellant's custodial history The sentences of direct relevance were for two murders committed on 20 June 1983. In May 1979, the appellant, then aged about 20, was living in Darwin. He broke and entered a dwelling house and raped a female resident after threatening her with a knife. He was sentenced to imprisonment for three years, with a non- parole period of one year and six months. He was released from custody in June On 20 June 1983, the appellant, in an area of bushland in the Northern Territory, saw two young women, aged 18 and 15, swimming in a pool. Armed with a knife, he approached the women and forced them to accompany him to a nearby gully. He cut their clothing from them and used it to bind and gag the younger woman. He stabbed the older woman in her side, then bound and gagged and raped her. He then stabbed and killed the younger woman. He stabbed the older woman again, and left the area, leaving her fatally wounded. The sentencing judge described his conduct as "entirely pitiless and cruel". After a trial, the appellant was convicted of two offences of murder, and one of rape. At the time of sentencing, the mandatory sentence for murder was imprisonment for life. The Court was not empowered to fix a non-parole period. That remained the position in the Northern Territory until the Act commenced in 2004. Although a new Criminal Code came into effect in January 1984, shortly before the appellant was sentenced, s 164 of that Code provided that a sentence of life imprisonment remained mandatory for murder, and there was no power to fix a non-parole period in respect of such a sentence. The trial judge, Muirhead J, in respect of each of the counts of murder, sentenced the appellant to imprisonment for life. In relation to the offence of rape, Muirhead J also sentenced the appellant to imprisonment for life. He said the appellant "suffered 1 Leach v The Queen (2005) 16 NTLR 117. 2 R v Leach (2004) 145 NTR 1; 14 NTLR 44; 185 FLR 189. a severe sociopathic personality disorder of an aggressive type". At the time, and until the coming into force of s 53 of the Sentencing Act (NT) in 1996, there was no power to fix a non-parole period where a sentence of life imprisonment was imposed for a crime other than murder. After 1996, there was a power to fix a non-parole period in respect of a life sentence for a crime other than murder, but, until 2004, there was still no such power in the case of a sentence for murder. Release from prison could occur only by way of executive clemency. The 2003 legislation The Act came into effect on 11 February 2004. It amended the Sentencing Act (NT). It introduced s 53A, which provided for the fixing of non-parole periods in respect of sentences of life imprisonment for murder imposed after 11 February 2004. Section 53A provided: "(1) Subject to this section, where a court ('the sentencing court') sentences an offender to be imprisoned for life for the crime of murder, the court must fix under section 53(1) – a standard non-parole period of 20 years; or if any of the circumstances in subsection (3) apply – a non- parole period of 25 years. The standard non-parole period of 20 years referred to in subsection (1)(a) represents the non-parole period for an offence in the middle of the range of objective seriousness for offences to which the standard non-parole period applies. The circumstances referred to in subsection (1)(b) are any of the following: the victim's occupation was police officer, emergency judicial services worker, correctional services officer, officer, health professional, teacher, community worker or other occupation involving the performance of a public function or the provision of a community service and the act or omission that caused the victim's death occurred while the victim was carrying out the duties of his or her occupation or for a reason otherwise connected with his or her occupation; the act or omission that caused the victim's death was part of a course of conduct by the offender that included conduct, either before or after the victim's death, that would have constituted a sexual offence against the victim; the victim was under 18 years of age at the time of the act or omission that caused the victim's death; if the offender is being sentenced for 2 or more convictions for unlawful homicide; if the offender is being sentenced for one conviction for murder and one or more other unlawful homicides are being taken into account; at the time the offender was convicted of the offence, the offender had one or more previous convictions for unlawful homicide. The sentencing court may fix a non-parole period that is longer than a non-parole period referred to in subsection (1)(a) or (b) if satisfied that, because of any objective or subjective factors affecting the relative seriousness of the offence, a longer non-parole period is warranted. The sentencing court may refuse to fix a non-parole period if satisfied the level of culpability in the commission of the offence is so extreme the community interest in retribution, punishment, protection and deterrence can only be met if the offender is imprisoned for the term of his or her natural life without the possibility of release on parole. The sentencing court may fix a non-parole period that is shorter than the standard non-parole period of 20 years referred to in subsection (1)(a) if satisfied there are exceptional circumstances that justify fixing a shorter non-parole period. For there to be exceptional circumstances sufficient to justify fixing a shorter non-parole period under subsection (6), the sentencing court must be satisfied of the following matters and must not have regard to any other matters: the offender is – otherwise a person of good character; and unlikely to re-offend; the victim's conduct, or conduct and condition, substantially mitigate the conduct of the offender. In considering whether the offender is unlikely to re-offend, the matters the sentencing court may have regard to include the following: (a) whether the offender has a significant record of previous convictions; any expressions of remorse by the offender; any other matters referred to in section 5(2) that are relevant. The sentencing court must give reasons for fixing, or refusing to fix, a non-parole period and must identify in those reasons each of the factors it took into account in making that decision. (10) The failure of the sentencing court to comply with this section when fixing, or refusing to fix, a non-parole period does not invalidate the sentence imposed on the offender. (11) This section applies only in relation to an offence committed – after the commencement of the Sentencing (Crime of Murder) and Parole Reform Act 2003; or the commencement of before that commencement, the offender has not been sentenced for the offence. that Act if, at In subsection (3) – 'unlawful homicide' means manslaughter." the crime of murder or Of direct present relevance are the transitional provisions of the Act. They were contained in Pt 5 Div 1, concerning "[p]risoners currently serving life imprisonment for murder". They provided as follows: "17. Application of Division This Division applies in relation to a prisoner who, at the commencement of this Act, is serving a sentence of imprisonment for life for the crime of murder. Sentence includes non-parole period Subject to this Division – the prisoner's sentence is taken to include a non-parole period of 20 years; or if the prisoner is serving sentences for 2 or more convictions for murder – each of the prisoner's sentences is taken to include a non-parole period of 25 years, commencing on the date on which the sentence commenced. 19. DPP may apply for longer or no non-parole period The Supreme Court may, on the application of the Director of Public Prosecutions – revoke the non-parole period fixed by section 18 in respect of the prisoner and do one of the following: fix a longer non-parole period in accordance with subsection (3) or (4); refuse to fix a non-parole period in accordance with subsection (5); or dismiss the application. The Director of Public Prosecutions must make the application – not earlier than 12 months before the first 20 years of the prisoner's sentence is due to expire; or if, at the commencement of this Act, that period has expired – within 6 months after that commencement. Subject to subsections (4) and (5), the Supreme Court must fix a non-parole period of 25 years if any of the following circumstances apply in relation to the crime of murder for which the prisoner is imprisoned: the victim's occupation was police officer, emergency judicial services worker, correctional services officer, officer, health professional, teacher, community worker or other occupation involving the performance of a public function or the provision of a community service and the act or omission that caused the victim's death occurred while the victim was carrying out the duties of his or her occupation or for a reason otherwise connected with his or her occupation; the act or omission that caused the victim's death was part of a course of conduct by the prisoner that included conduct, either before or after the victim's death, that would have constituted a sexual offence against the victim; the victim was under 18 years of age at the time of the act or omission that caused the victim's death; at the time the prisoner was convicted of the offence, the prisoner had one or more previous convictions for the crime of murder or manslaughter. The Supreme Court may fix a non-parole period that is longer than a non-parole period referred to in section 18 or subsection (3) if satisfied that, because of any objective or subjective factors affecting the relative seriousness of the offence, a longer non-parole period is warranted. The Supreme Court may refuse to fix a non-parole period if satisfied the level of culpability in the commission of the offence is so extreme the community interest in retribution, punishment, protection and deterrence can only be met if the offender is imprisoned for the term of his or her natural life without the possibility of release on parole. 20. Appeals For Part X of the Criminal Code, a decision of the Supreme Court under section 19(1)(a)(i) or (ii) fixing or refusing to fix a non-parole period is taken to be a sentence passed by the Court. The Director's application On 2 March 2004 the Director of Public Prosecutions, in respect of the sentences being served by the appellant for the two convictions of murder, applied under s 19 of the Act for the Supreme Court of the Northern Territory to revoke the non-parole period fixed by reference to s 18 and either to refuse to fix a non-parole period, in accordance with s 19(5), or, in the alternative, to fix a longer non-parole period in accordance with s 19(4). The application was heard by Martin CJ, who made an order revoking the non-parole period fixed by reference to s 18 and refused to fix a non-parole period. The majority in the Court of Criminal Appeal upheld the decision of the Chief Justice. Southwood J, dissenting, would have revoked the non-parole period fixed by reference to s 18 and, pursuant to s 19(4), fixed a non-parole period of 40 years, with the result that the appellant could be considered for parole at the age of 64 years. The issues The appellant submits that the reasoning of Martin CJ was affected by two errors of principle. First, it is said that Martin CJ failed to give effect, or full effect, to the discretion imported by the word "may" in sub-ss (1) and (5) of s 19. Secondly, it is said that Martin CJ failed to apply the appropriate standard of proof in coming to the state of satisfaction described in s 19(5). The discretion issue Martin CJ, and the three members of the Court of Criminal Appeal, accepted that the powers conferred by s 19(1) and s 19(5) of the Act were discretionary, although the nature and scope of the discretion were matters of some contention. Section 19(5) was said by Mildren J to have been modelled on s 61 of the Crimes (Sentencing Procedure) Act 1999 (NSW). Section 61(1) provided that a court "is to impose" a life sentence if satisfied that the level of culpability in the commission of the offence is so extreme that the community interest in retribution, punishment, community protection and deterrence can only be met through the imposition of that sentence. However, s 61(3) provided that nothing in s 61(1) affected s 21(1). Section 21(1) provided that, if by any provision in the Act an offender was made liable to imprisonment for life, a court may nevertheless impose a sentence of imprisonment for a specified time. In R v Merritt3, Wood CJ at CL said of the New South Wales legislation: "There is an obvious tension between the apparent mandatory requirement to impose a life sentence where a case falls within s 61(1) ..., and s 61(3), which preserves the s 21(1) discretion to impose a lesser sentence. That tension ... has been resolved in favour of recognising the continued existence of the discretion, notwithstanding the fact that the s 61(1) criteria are met, where the offender's subjective circumstances justify a lesser sentence than one of life imprisonment." We are presently not concerned with the New South Wales legislation. It may have inspired some of the Northern Territory provisions in question in this appeal, but there are differences. In the Court of Criminal Appeal in this case, Southwood J, in dissent, considered that, after it has been found that s 19(5) has been satisfied, there remains a question as to "the minimum term of incarceration that justice requires the prisoner must serve having regard to all of the (2004) 59 NSWLR 557 at 567 [36]. circumstances of the case". For reasons that will appear, that is not the correct approach. Section 19 confers upon the Supreme Court a power to make an order which substitutes a discretionary judicial decision for the otherwise mandatory effect of s 18. The discretion, like the discretion conferred by certain provisions of s 53A, is not at large. It is confined by statutory prescriptions which, in a number of respects, modify the principles according to which a judge would otherwise fix a non-parole period. Sub-section (3) of s 19, for example, requires that, if the victim of a murder was a police officer, and the death occurred while the officer was carrying out his or her duties, the Court must fix a non-parole period of 25 years, subject to sub-ss (4) and (5). Sub-section (4) empowers the Court, in such a case, to fix a non-parole period of more than 25 years. Sub- section (5) empowers the Court to refuse to fix any non-parole period. Sub- section (3), as qualified by sub-ss (4) and (5), only comes into operation if the Court, on the application of the Director of Public Prosecutions, decides to revoke the non-parole period fixed by s 18. Sections 18 and 19 present a patchwork of legislative prescription and judicial discretion. The exercise of judicial discretion is constrained by legislative direction. A court cannot ignore the legislative context within which the judicial discretion is left to operate. In particular, a conclusion that, after all necessary or appropriate judicial decisions have been made within the scope of s 19, there remains an ultimate question as to the minimum term of incarceration that justice requires the prisoner to serve, is inconsistent with the legislative scheme. The Director of Public Prosecutions will make an application under s 19 where it is considered that there may be a case for lengthening the non-parole period fixed by s 18. The Court may dismiss the application, in which event s 18 will continue to apply. If the application succeeds, and the Court revokes the non-parole period fixed by s 18, it does so for the purpose either of fixing a longer non-parole period or of refusing to fix any non-parole period. An order made under s 19 will not be to the prisoner's advantage. Its effect will be to displace the period otherwise fixed by s 18 in order to lengthen the period or to deprive the prisoner altogether of the benefit of a non-parole period. That is the statutory context of the discretions conferred within s 19. Sub-sections (1), (4) and (5) present the Court with a range of possibilities: leave s 18 to apply; increase the non-parole period; or refuse to fix any non-parole period. In the present case, all four judges agreed that the non-parole period fixed by s 18 was inadequate. One judge thought it should have been increased to 40 years. The other three judges thought that no non-parole period should be fixed. It may be remarked in passing that the conclusion reached by Martin CJ and the majority in the Court of Criminal Appeal made it unnecessary for them to deal with a problem not addressed by s 19, that is, the life sentence being served for rape. It was not clear from the argument of the appellant in this Court what relevance that sentence was said to have, if any, for the decision to be made about the non-parole period proposed in relation to the murders. Leaving to one side cases within s 19(3), a decision not to dismiss an application under s 19 will be made if the Court is at least satisfied, in terms of sub-s (4), that a longer non-parole period than that fixed by s 18 is warranted. That state of satisfaction will be reached having regard to any objective or subjective factors affecting the relative seriousness of the offence. By hypothesis, the offence may have occurred in the relatively distant past. The present appellant had been in prison for about 20 years when the Act came into force. The discretionary power conferred by sub-ss (1)(a) and (4) of s 19 is conditioned upon a certain satisfaction about matters affecting the relative seriousness of the offence. That does not deny the possibility that, having regard to events that have occurred over the potentially lengthy period since original sentencing, including a prisoner's progress towards rehabilitation, a court might dismiss the Director's application. The Court may revoke the s 18 non-parole period, and fix a longer period, if it is satisfied, because of the matters referred to in s 19(4), that a longer non-parole period is warranted, that is, is called for in all the circumstances. The Court will not revoke the s 18 non-parole period unless it is satisfied that a longer non-parole period is warranted. The relative seriousness of the offence may warrant such a conclusion, or it may not. The Court is entitled to have regard to all relevant circumstances in considering whether the conclusion is warranted. Its attention is directed specifically to the seriousness of the offence, but whether the seriousness of the offence warrants a longer non- parole period depends upon a consideration of all matters relevant to fixing a non-parole period. Sub-section (5) involves a possible further step on the way to a final outcome. It deals with an extreme case: a case where the level of culpability in the commission of the offence is so extreme that the community interest in retribution, punishment, protection and deterrence can only be met by incarceration for life. The words "can only be met" in sub-s (5) are the reflex of the words "is warranted" in sub-s (4). A non-parole period longer than the s 18 period may be set where the Court is satisfied that the longer period is warranted. However, the Court may conclude, not merely that a longer period is warranted, but that the removal of any non-parole period is demanded, because that is the only way of meeting the community interest. The level of culpability in the commission of an offence may be so extreme that not only is it necessary to intervene to set aside the period fixed by s 18 but, in addition, the community interest demands that there be, not merely a longer non-parole period, but a refusal to fix any non-parole period. The provisions of sub-ss (1), (4) and (5) of s 19 call for an exercise of discretionary judgment within a wider context of legislative prescription. They are different aspects of a single decision-making process. They do not require a court to disregard the consequences for the prisoner of the orders that may be made. They do not require a court to disregard events that have occurred over the period since original sentencing, including rehabilitation. They empower the Court to set aside the legislatively prescribed non-parole period for the purpose either of increasing the period or of removing the possibility of parole. They condition the power to make orders in substitution for the legislative provision by reference to a judgment made about culpability. The highest level of culpability is that described in sub-s (5). It is a level of culpability such that the community interest in the matters referred to can only be met by, (that is, the community interest demands), incarceration for life. This, as it appears to me, is the correct approach to s 19, and the approach that was followed in the reasoning of Martin CJ. Considerations relevant to sentencing, and fixing non-parole periods, are relevant because what is involved in s 19 is a sentencing exercise. Events that have occurred since the original sentencing, to the extent to which they bear upon such considerations, may be taken into account. These considerations and events are taken into account within the framework of s 19. Ultimately the Court asks itself whether the level of culpability is so extreme that the community interest identified in the statute demands incarceration for life. The nature of that question is such that, if it is answered in the affirmative, the answer will dictate an order under sub-s (5) rather than an order under sub-s (4), or a dismissal of an application. Martin CJ began by rejecting an argument that the power given by s 19(5) required an identification of the "worst of the worst" cases. He said, rather, that the legislature had recognised that a court would contemplate declining to fix a non-parole period only in those cases falling within the most serious category. He accepted that, in deciding whether to intervene pursuant to s 19, a court was entitled to have regard to events that have occurred since the original sentencing, including progress to rehabilitation and, further, that a court was required to consider the impact on a prisoner of orders of the kind that could be made under s 19. He considered at length the objective and subjective matters relevant to the appellant's culpability, psychiatric evidence before the trial judge, later psychiatric reports, and evidence relating to progress towards and prospects of rehabilitation. In assessing the present level of danger to the community he considered recent psychiatric assessments. He said: "I am left in no doubt that the respondent's level of culpability in the commission of the offence[s] is extreme. Notwithstanding that finding, it does not automatically follow that I should refuse to fix a non- parole period. The community, through Parliament, has recognised that even in cases falling within the worst category of cases of murder, and even where the culpability of the offender is extreme, nevertheless the court should not inflict the dreadful punishment of imprisonment for natural life without the possibility of release on parole unless satisfied that the level of culpability is 'so extreme' that the community interest in retribution, punishment, protection and deterrence can 'only' be met by such dreadful punishment." He considered each of the specific aspects of community interest referred to in s 19(5) and ultimately came to the conclusion that he should refuse to fix a non-parole period. The reasoning of Martin CJ was in conformity with the statute, and involved no error of approach. The standard of proof issue The satisfaction described by s 19(5) involves an exercise of judgment, based upon a finding of relevant facts, and an evaluation of relevant discretionary considerations as outlined above. What is involved in that judgment is aptly described in the paragraph from the reasons of Martin CJ quoted above. Findings of disputed facts adverse to the prisoner are to be made to the criminal standard of proof4. This was accepted by Martin CJ. He applied the criminal standard, for example, to his decision about the dangerousness of the appellant. Correctly, he rejected an argument that all aspects of the satisfaction described in s 19(5) had to be entertained beyond reasonable doubt. The discretionary judgment involved in the application of sub-ss (1), (4) and (5) of s 19 may rest upon findings of fact which are amenable to the application of differing standards of proof, but the evaluation of the demands of community interest referred to in sub-s (5), for the purposes of such a judgment, is not. Conclusion The appeal should be dismissed. 4 R v Olbrich (1999) 199 CLR 270. Crennan GUMMOW, HAYNE, HEYDON AND CRENNAN JJ. In the 1980s, the only sentence that could be passed upon a person convicted in the Northern Territory of the offence of murder was imprisonment for life. At the time of the appellant's offending in 1983, the Criminal Law Consolidation Act (NT) provided5 that the mandatory sentence for murder was life imprisonment with hard labour. Both that Act and the Criminal Code (NT), which came into force on 1 January 1984, provided that the sentence for murder could not be mitigated or varied. If a sentence of life imprisonment was imposed, the Parole of Prisoners Act (NT)6 precluded the fixing of a non-parole period. The Sentencing (Crime of Murder) and Parole Reform Act 2003 (NT) ("the 2003 Act") changed this sentencing regime. By the 2003 Act the Sentencing Act (NT) ("the NT Sentencing Act") was amended to provide, by s 53A, that when sentencing a prisoner to life imprisonment for murder, a court must, except in certain circumstances, fix a non-parole period. If a non-parole period was fixed it had to be not less than 20 years or, if certain aggravating circumstances applied, not less than 25 years. Section 53A(5) provided that a court might refuse to fix any non-parole period "if satisfied the level of culpability in the commission of the offence is so extreme the community interest in retribution, punishment, protection and deterrence can only be met if the offender is imprisoned for the term of his or her natural life without the possibility of release on parole". Transitional provisions were made, in Div 1 of Pt 5 (ss 17-21) of the 2003 Act, in respect of prisoners, like the appellant, who were then serving sentences of life imprisonment for murder. Section 18 provided that, subject to the other provisions of the Division, the sentence of a prisoner, who at the commencement of the 2003 Act was serving a sentence of life imprisonment for murder, "is taken to include a non-parole period of 20 years" or, if the prisoner was serving sentences for two or more convictions for murder, "each of the prisoner's sentences is taken to include a non-parole period of 25 years". Section 19 permitted the Director of Public Prosecutions to apply to the Supreme Court to revoke the non-parole period set by s 18 and to fix a non-parole period longer than the 20 or 25 years specified by s 18, or to refuse to fix any non-parole period. Section 19(5) prescribed the circumstances in which the Supreme Court "may refuse" to fix a non-parole period in terms identical to s 4(3)(b). Crennan those identified in s 53A(5) of the NT Sentencing Act. That is, the Court may refuse to fix a non-parole period "if satisfied the level of culpability in the commission of the offence is so extreme the community interest in retribution, punishment, protection and deterrence can only be met if the offender is imprisoned for the term of his or her natural life without the possibility of release on parole". The appellant's convictions and sentences On 16 May 1984, the appellant was convicted in the Supreme Court of the Northern Territory on two counts of murder and one count of rape. It is unnecessary to recount the circumstances of the murders, or the rape of one of the murder victims before she was killed. It is enough to say that the crimes were horrific and that the appellant showed no remorse for what he had done. On each count of murder the appellant was sentenced, in accordance with the law as it stood at the time of his offences, to be imprisoned for life with hard labour. On the count of rape, he was sentenced to the maximum sentence then provided for that offence7: imprisonment for life with hard labour. Application under the 2003 Act After the 2003 Act came into force, the Director of Public Prosecutions applied to the Supreme Court of the Northern Territory for an order that no non-parole period be fixed in respect of the appellant's sentences for murder. The primary judge, Martin CJ, revoked the non-parole period of 25 years fixed by s 18 of the 2003 Act in respect of each of the sentences of life imprisonment imposed on the appellant for the crime of murder, and refused to fix a non-parole period8. No application was, or could have been, made in respect of the sentence of life imprisonment imposed upon the appellant for the crime of rape. No submission was made in this Court, and no submission appears to have been made in the courts below, that the life sentence imposed on the appellant for rape was relevant to the determination of the application under the 2003 Act. It is not necessary to examine the correctness of any assumptions that may underpin this approach to the matter. 7 Criminal Law Consolidation Act (NT), s 60. 8 R v Leach (2004) 145 NTR 1. Crennan The appellant appealed to the Court of Criminal Appeal of the Northern Territory against the orders of the primary judge revoking the non-parole period fixed by the 2003 Act. By majority, the Court of Criminal Appeal (Mildren and Riley JJ, Southwood J dissenting) dismissed the appeal9. Southwood J would have allowed the appeal and would have fixed a non-parole period of 40 years. The issues in this Court By special leave the appellant appealed to this Court. He contended that the Court of Criminal Appeal erred in two respects. First, he submitted that s 19(5) of the 2003 Act required the issues presented to be considered in two distinct stages and second, he contended that the primary judge could not refuse to fix a non-parole period unless satisfied beyond reasonable doubt of the basis for that decision. Both of these submissions should be rejected. The appeal should be dismissed. The 2003 Act The appellant's submissions require close consideration of the relevant provisions of the 2003 Act, particularly s 19. Section 19, so far as presently relevant, provided: "(1) The Supreme Court may, on the application of the Director of Public Prosecutions – revoke the non-parole period fixed by section 18 in respect of the prisoner and do one of the following: fix a longer non-parole period in accordance with subsection (3) or (4); refuse to fix a non-parole period in accordance with subsection (5); or dismiss the application. Subject to subsections (4) and (5), the Supreme Court must fix a non-parole period of 25 years if any of the following circumstances 9 Leach v The Queen (2005) 16 NTLR 117. Crennan apply in relation to the crime of murder for which the prisoner is imprisoned: the victim's occupation was police officer, emergency services worker, correctional services officer, judicial officer, health professional, teacher, community worker or other occupation involving the performance of a public function or the provision of a community service and the act or omission that caused the victim's death occurred while the victim was carrying out the duties of his or her occupation or for a reason otherwise connected with his or her occupation; the act or omission that caused the victim's death was part of a course of conduct by the prisoner that included conduct, either before or after the victim's death, that would have constituted a sexual offence against the victim; the victim was under 18 years of age at the time of the act or omission that caused the victim's death; at the time the prisoner was convicted of the offence, the prisoner had one or more previous convictions for the crime of murder or manslaughter. The Supreme Court may fix a non-parole period that is longer than a non-parole period referred to in section 18 or subsection (3) if satisfied that, because of any objective or subjective factors affecting the relative seriousness of the offence, a longer non-parole period is warranted. The Supreme Court may refuse to fix a non-parole period if satisfied the level of culpability in the commission of the offence is so extreme the community interest in retribution, punishment, protection and deterrence can only be met if the offender is imprisoned for the term of his or her natural life without the possibility of release on parole." The relevant aspects of the provisions made by the 2003 Act may be described as follows. First, if no application was made by the Director of Public Prosecutions, the sentence of a person, who at the commencement of the 2003 Act was serving a sentence of imprisonment for life for murder, was taken to Crennan include a non-parole period of either 20 years or 25 years10. Secondly, if the Director of Public Prosecutions made an application under s 19, there could be one of three outcomes: the Court could revoke the non-parole period fixed by s 18 and fix a longer period11; the Court could revoke the non-parole period fixed by s 18 and refuse to fix any non-parole period12; or the Court could dismiss the Director's application13. Dismissing the Director's application would leave the statutorily determined non-parole period (in this case the period of 25 years) unaffected. The statutory non-parole period could be revoked, and a longer non-parole period fixed, only if the conditions described in s 19(4) were met. The Court could revoke the statutory non-parole period and refuse to fix a non-parole period, with the consequence that the prisoner would be imprisoned for life, only if the conditions described in s 19(5) were met. Two stages of consideration? The appellant submitted that although the primary judge concluded that the level of culpability in the appellant's commission of the two murders was "so extreme the community interest in retribution, punishment, protection and deterrence" could only be met by the appellant being imprisoned for life without the possibility of release on parole, a discretion was conferred by s 19(5) of the 2003 Act which required the Court to consider separately, and give effect to, what were described as "ordinary sentencing considerations". In particular, the appellant submitted that this second and separate inquiry required consideration of questions about the prisoner's rehabilitation. At once it can be seen that the appellant's submission would require reading s 19(5) as presenting a conundrum for the Court considering an application under s 19. Central to the appellant's contention was the proposition that the Court may be satisfied that "the community interest in retribution, punishment, protection and deterrence can only be met if the offender is imprisoned for the term of his or her natural life without the possibility of release on parole", yet conclude that a non-parole period should be fixed. That proposition should be rejected. Section 19(5) is not to be read as requiring the Court to consider the exercise of some separate or additional discretion after, or 11 s 19(1)(a)(i). 12 s 19(1)(a)(ii). 13 s 19(1)(b). Crennan despite, its having reached the conclusion that the level of the prisoner's culpability was as described in the provisions: "so extreme" that the community interest in the specified considerations could "only be met" by imprisonment for life. It is true that s 19(5) says that the Court "may refuse to fix a non-parole period" if satisfied of the matters set out in the provision. But it by no means follows that, if the Court is satisfied of those matters, it then has to exercise a discretion. Rather, s 19(5) is a provision of the kind considered in Finance Facilities Pty Ltd v Federal Commissioner of Taxation14 and Mitchell v The Queen15. The word "may" is used, not to give a discretion, but to confer a power which is to be exercised upon the Court being satisfied of the matters described in the provision. As Windeyer J said in Finance Facilities16: "This does not depend on the abstract meaning of the word 'may' but [on] whether the particular context of words and circumstance make it not only an empowering word but indicate circumstances in which the power is to be exercised – so that in those events the 'may' becomes a 'must'. Illustrative cases go back to 16[93]: R v Barlow17. Today it is enough to cite Julius v Bishop of Oxford18; and add in this Court Ward v Williams19. But I select one other reference out of a multitude: Macdougall v Paterson20. There Jervis CJ said in the course of the argument21 'The word "may" is merely used to confer the authority: and 14 (1971) 127 CLR 106. 15 (1996) 184 CLR 333. 16 (1971) 127 CLR 106 at 134-135. 17 (1693) Carth 293 [90 ER 773]; 2 Salk 609 [91 ER 516]. 18 (1880) 5 App Cas 214. 19 (1955) 92 CLR 496 at 505-506. 20 (1851) 11 CB 755 [138 ER 672]. 21 Macdougall v Paterson (1851) 11 CB 755 at 766 [138 ER 672 at 677]. Crennan the authority must be exercised, if the circumstances are such as to call for its exercise'. And, giving judgment, he said22: 'We are of opinion that the word "may" is not used to give a discretion, but to confer a power upon the court and judges; and that the exercise of such power depends, not upon the discretion of the court or judge, but upon the proof of the particular case out of which such power arises.'" It is therefore not necessary to consider some further questions that would be presented by the appellant's first submission. In particular, it is not necessary to consider what content or meaning would have to be assigned to the appellant's reference to "ordinary sentencing considerations". On its face the argument is one that would appear to require reference to the NT Sentencing Act rather than any consideration of judge-made law. That in turn may have presented questions about how the Sentencing Act provisions were to be applied to the separate statutory task given to the Supreme Court by s 19(5) of the 2003 Act. But these issues need not be examined further. Nor is it necessary to examine how questions of the appellant's past efforts at rehabilitation, or his future prospects of further rehabilitation, could remain for consideration, separate from the hypothesised conclusion that the community interest in a number of matters (of which one is protection) can only be met if the appellant is never to be released. Satisfaction beyond reasonable doubt? The second argument of the appellant was that a judge could exercise the power given by s 19(1)(a)(ii) and s 19(5) to revoke the non-parole periods fixed by s 18 in respect of the life sentences imposed on the appellant for murder, and refuse to fix a non-parole period, only if satisfied beyond reasonable doubt of the basis for the decision. This argument was said to be "the logical extension" of this Court's decision in R v Olbrich23 and to reflect the decision of the Court of Criminal Appeal of New South Wales in R v Merritt24. It is convenient to begin consideration of the appellant's submission by reference to those two decisions. The particular questions considered by this Court in Olbrich concerned what consequences for sentencing followed when the offender asserted the 22 Macdougall v Paterson (1851) 11 CB 755 at 773 [138 ER 672 at 679]. 23 (1999) 199 CLR 270. 24 (2004) 59 NSWLR 557. Crennan existence of mitigating circumstances, but the sentencing judge was not persuaded that the assertion was true. The majority of the Court held25 that the accused bore the burden of proving the matters submitted in mitigation but had failed to do so. The majority also concluded26 that a sentencing judge may not take disputed facts into account in a way that is adverse to the interests of an accused unless those facts were established beyond reasonable doubt. In Merritt, the Court of Criminal Appeal of New South Wales considered an appeal against life sentences imposed on the appellant for offences of murder. Section 61(1) of the Crimes (Sentencing Procedure) Act 1999 (NSW) ("the NSW Act") provided that a court "is to impose" a sentence of imprisonment for life on a person convicted of murder: "if the court is satisfied that the level of culpability in the commission of the offence is so extreme that the community interest in retribution, punishment, community protection and deterrence can only be met through the imposition of that sentence". The similarities between this part of the provision of the NSW Act and the provisions of s 19(5) of the 2003 Act (and s 53A(5) of the NT Sentencing Act) are evident. But unlike the relevant Northern Territory legislation, s 61(2) of the NSW Act provided that "[n]othing in subsection (1) affects section 21(1)". Section 21 of the NSW Act provided a general power to reduce penalties. In particular, s 21 provided that: If by any provision of an Act an offender is made liable to imprisonment for life, a court may nevertheless impose a sentence of imprisonment for a specified term. The power conferred on a court by this section is not limited by any other provision of this Part. This section does not limit any discretion that the court has, apart from this section, in relation to the imposition of penalties." 25 (1999) 199 CLR 270 at 281 [26]. 26 (1999) 199 CLR 270 at 281 [27]. Crennan It follows that the NSW Act took a form radically different from s 19 of the 2003 Act, and s 19(5) in particular. Section 21(1) of the NSW Act has been construed27 as demonstrating that even if the conditions described in s 61(1) are satisfied, a court sentencing an offender for murder retains a discretion to impose a sentence less than imprisonment for life. In Merritt, Wood CJ at CL, who gave the principal reasons of the Court, said28 that "the burden of proving that a case falls within s 61(1) of the [NSW] Act rests on the Crown, and that, in accordance with the decision in [Olbrich], the standard of such proof is beyond reasonable doubt". The consequences of these observations were not examined further in Merritt. In particular, there was no examination of what was intended, in the particular circumstances of that case, by the reference to the standard of proof being the criminal standard. The appellant submitted that "the logical extension" of the reasoning of the majority in Olbrich, taken in conjunction with the well-known examination of standards of proof in Briginshaw v Briginshaw29, was that the satisfaction that the Court acting under s 19(5) must reach for "the basis" for a decision "resulting in imprisonment for life without the potential for release ... must be at the highest level ... known to our law, namely beyond reasonable doubt". The reference to satisfaction about "the basis" for a decision is ambiguous. It seeks to elide two aspects of the task presented by s 19(5). When that provision speaks of the Court being "satisfied the level of culpability in the commission of the offence is so extreme the community interest" in certain matters can only be met if the offender is imprisoned without the possibility of release on parole, it describes a result that requires judgment, not the application of separately defined legal principles to facts as found by the Court. The judgments to be made under s 19(5) include judgments about "level of culpability" and the "community interest" in certain matters. There may be disputed questions of fact or opinion that bear upon those judgments. In particular, questions about the offender's likely conduct, if he or she were to be released into the community, may tender issues of fact for decision by the Court. Consistent with Olbrich, any disputed question of fact which is to be taken into account in a way that is adverse to the offender's interests would have to be 27 R v Harris (2000) 50 NSWLR 409. 28 (2004) 59 NSWLR 557 at 567 [35]. 29 (1938) 60 CLR 336. Crennan resolved according to the criminal standard of proof. But once the relevant facts have been found, a judgment would remain to be made about the level of culpability thus revealed and what the community interest in the specified matters then required. The appellant's submission sought to elide these separate aspects of the Court's task. It was not submitted that, in the present case, the primary judge had had to decide any disputed question of fact. It was, therefore, not submitted that the primary judge had failed to apply the principles stated in Olbrich. Rather, as the appellant's submission frankly acknowledged, what the appellant sought in this appeal was an extension of those principles: to require that a standard of proof be applied to the determination of the ultimate question or questions of judgment required by the statute. The submission should be rejected. The concept of a standard of proof, like the related concept of onus of proof, is apposite to the resolution of disputed questions of fact in issue in the litigation. Both onus and standard of proof concern the adducing of evidence at trial and the determination of which of the facts in issue are established by that evidence30. Standard of proof is not a concept that is apposite to the resolution of a contested question of judgment of the kind required by s 19(5), any more than it is apposite to the resolution of a disputed question of law. The appeal should be dismissed. 30 See, for example, Cross on Evidence, 7th Aust ed (2004) at [7005]; Stone, "Burden of Proof and the Judicial Process: A Commentary on Joseph Constantine Steamship Ltd v Imperial Smelting Corporation Ltd", (1944) 60 Law Quarterly Review 262.

HIGH COURT OF AUSTRALIA SHOALHAVEN CITY COUNCIL APPELLANT AND FIREDAM CIVIL ENGINEERING PTY LIMITED RESPONDENT Shoalhaven City Council v Firedam Civil Engineering Pty Limited [2011] HCA 38 5 October 2011 ORDER Appeal allowed. Set aside the order of the Court of Appeal of the Supreme Court of New South Wales made on 19 April 2010 and, in place thereof, order that the appeal to that Court be dismissed with costs. The respondent pay the appellant's costs of the appeal to this Court. On appeal from the Supreme Court of New South Wales Representation D F Jackson QC with J A Steele for the appellant (instructed by TressCox Lawyers) Submitting appearance for the respondent Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Shoalhaven City Council v Firedam Civil Engineering Pty Limited Contract – Construction – Dispute resolution clause – Parties to contract agreed to expert determination of claims for damages for breach of contract – Expert contractually obliged to give reasons – Whether inconsistency in expert's reasons – Whether court has power to review expert's determination made under contract. Words and phrases – "expert determination", "inconsistency", "issue", "valid and sufficient reasons". Commercial Arbitration Act 1984 (NSW), ss 24, 28, 33, 44. Corporations Act 2001 (Cth), s 500(2). FRENCH CJ, CRENNAN AND KIEFEL JJ. Introduction A person ("the Expert"), appointed under the provisions of a construction contract ("the Contract") to provide an expert determination of issues in dispute between the principal and the contractor, made a determination which the contractor contended was not binding on it. The contractor sought a declaration to that effect in the Supreme Court of New South Wales. The contractor's complaint related to the Expert's refusal to allow certain extensions of time which it claimed as of right arising out of variations to the works. That refusal was said to be inconsistent with the Expert's use of a contractual discretion, conferred on the principal, to extend the time for completion of the works. The discretionary extension was used by the Expert, in assessing the principal's claim for compensation for the contractor's delays, to allocate responsibility for delays between the principal and the contractor. The contractor contended that the Expert's reasons for his determination, burdened with an unexplained inconsistency, meant that the determination did not accord with the requirements of the Contract and was therefore not binding on the contractor. The contractor's summons for a declaration was dismissed by Tamberlin AJ1. However, an appeal against that decision was allowed by the Court of Appeal of the Supreme Court of New South Wales (Beazley, Campbell and Macfarlan JJA)2. The orders made by Tamberlin AJ were set aside and a declaration made that the Expert's determination was not binding on the parties. Special leave to appeal to this Court against the judgment and orders of the Court of Appeal was granted on 3 September 2010 by Gummow, Heydon and Kiefel JJ. The contractor was wound up by resolution of its creditors on 26 November 2010. The appeal is continued pursuant to leave granted by McDougall J in the Supreme Court of New South Wales on 10 December 2010. The contractor was not represented at the hearing of the appeal. The Expert's use of the principal's discretion to extend time as a device for allocating responsibility for delay caused by the principal was adequately explained and was not inconsistent with his refusal to allow the contractor's claimed extensions of time. The appeal against the decision of the Court of Appeal should be allowed and the orders of Tamberlin AJ reinstated. 1 Firedam Civil Engineering Pty Ltd v Shoalhaven City Council [2009] NSWSC 2 Firedam Civil Engineering Pty Ltd v Shoalhaven City Council [2010] NSWCA 59. Crennan The Contract – delay and extension provisions By the Contract dated 18 October 2005, Firedam Civil Engineering Pty Ltd ("Firedam") agreed with Shoalhaven City Council ("Shoalhaven") to design and construct a waste water collection and transport system for the Conjola Regional Sewerage Scheme. The Contract incorporated New South Wales Government GC21 (Edition 1) General Conditions of Contract ("the General Conditions"). The time for completion of the works was 64 weeks from the date of the Contract. Under the General Conditions Firedam was responsible for managing progress to meet the Contract completion date for the works. That date could be adjusted in the following ways: Pursuant to cl 41 where Firedam encountered site conditions materially adverse in comparison to those which it should reasonably have foreseen at the date of the Contract. To obtain an extension of time under cl 41, Firedam would have to give Shoalhaven the notice required by that clause. Any extension of time would be granted pursuant to cl 543. Pursuant to cl 52 where Shoalhaven instructed Firedam to undertake a variation of the works. The parties were required to endeavour to agree in writing on the value of the variation and its effect on time. Absent agreement, the matter could be referred to the issues resolution process under the Contract4. Pursuant to cl 54 where a delay to completion occurred or was anticipated. Firedam was entitled to an extension of time subject to conditions set out in cl 54.1 including: that Firedam had given Shoalhaven the requisite notices5; and 3 General Conditions, cl 41.4.2. 4 General Conditions, cl 52.4.1. 5 General Conditions, cl 54.1.3. Crennan the delay had occurred to an activity on a critical path of the "Contract Program" and the Contract Program had been submitted with the requisite notice6. Firedam was entitled, under cl 55.1, to recover "delay costs" at specified rates for the number of days by which the time for completion was extended because of a delay caused only by: a Variation, other than one for which, under clauses 41.6, 42.4 and 44.3, there is no payment for delays; or a breach of the Contract by the Principal which causes delay, disruption or interference to the Contractor carrying out the Works." The General Conditions made provision, in cl 54.6, for discretionary extensions of time to be allowed by Shoalhaven. That clause provided: "The Principal may in its absolute discretion for the benefit of the Principal extend the time for Completion at any time and for any reason, whether or not the Contractor has Claimed an extension of time. The Contractor is not entitled to an extension of time for Completion under this clause 54.6 unless the Principal exercises its discretion to extend the time for Completion." As appears later in these reasons, Shoalhaven's entitlement to compensation for delays caused by Firedam was calculated by the Expert by reference to a completion date extended under cl 54.6 in order to exclude delays attributable to Shoalhaven. The Contract – Expert Determination provisions A dispute resolution procedure was set out in cll 73-76 of the General Conditions. A party to the Contract could give notice to the other party of an issue about any matter arising under the Contract7. Senior executives were required to attempt to resolve issues so notified8. An issue not able to be resolved by senior executives of the parties could be referred to an Expert for 6 General Conditions, cl 54.1.4. 7 General Conditions, cl 73. 8 General Conditions, cl 74. Crennan "Expert Determination"9. The Contract also provided that, in answer to any issue referred to the Expert by a party, the other party could raise any defence, set-off or cross-claim10. Firedam claimed an entitlement to variations and payment for additional works, extensions of those works and contractual compensation in respect of the extended time. Shoalhaven asserted, by way of cross-claim11, an entitlement under the Contract to "direct costs incurred due to delayed completion". The parties referred their dispute to Mr Neil Turner for Expert Determination pursuant to the General Conditions. in relation time The Contract required the parties to treat the Expert Determination as final and binding if the aggregate liability of one party to the other did not exceed $500,000. If the aggregate amount determined exceeded $500,000, then either party was free to commence proceedings in respect of the determined amount within 56 days after receiving the Determination12. Firedam submitted to the primary judge, essentially by way of attack upon the Expert's reasons, that the Expert Determination did not accord with the Contract and that there was therefore no Expert Determination and nothing to prevent Firedam from commencing legal proceedings against Shoalhaven13. Schedule 6 to the General Conditions specified the procedure for Expert Determinations under the Contract. Relevantly to a claim for compensation, the Expert was required to determine, for each referred issue, whether there was any, and if so what, event, act or omission giving the claimant a right to compensation14. The dates of any such event, act or omission were to be identified and also the legal right which would give rise to a liability for compensation15. The Expert was, in the light of his answers, to state what 9 General Conditions, cll 74 and 75. 10 General Conditions, cl 75.5. 11 [2009] NSWSC 802 at [7]. 12 General Conditions, cll 75.6-75.7.1 read with Contract Information, Item 56. 13 [2009] NSWSC 802 at [10]. 14 General Conditions, Sched 6, cl 1.1.1. 15 General Conditions, Sched 6, cl 1.1.2. Crennan compensation, if any, was due from one party to the other, when it fell due16 and the interest payable17. The Expert was required to determine any other questions identified or required by the parties in respect of any referred issue, having regard to the nature of the issue18. As appears below, the Expert complied "meticulously" with these requirements. Schedule 6 also provided for submissions and for a conference of the parties. In cl 4 it defined the role of the Expert: "Role of Expert The Expert: acts as an Expert and not as an arbitrator; must make its determination on the basis of the submissions of the parties, including documents and witness statements, and the Expert's own expertise; and must issue a certificate in a form the Expert considers appropriate, stating the Expert's determination and giving reasons, within 16 weeks, or as otherwise agreed by the parties, after the date of the letter of engagement of the Expert referred to in clause 75.2 of the General Conditions of Contract." The terms "Expert", "Expert Determination" and "Issue" were all defined in the General Conditions by reference to their usage in cll 73 and 75. Specifically, the term "Expert Determination" was defined as: "The process of determination of an Issue by an Expert, under clause 75 and the procedure in Schedule 6 (Expert Determination Procedure)." 16 General Conditions, Sched 6, cl 1.1.3(1). 17 General Conditions, Sched 6, cl 1.1.3(2). 18 General Conditions, Sched 6, cl 1.2. Crennan The Expert's letter of engagement Mr Turner's letter of engagement as Expert under the Contract was dated 10 October 2008. It identified six unresolved issues. Each related to a variation claimed by Firedam. In addition, although it was not mentioned in the letter, Shoalhaven cross-claimed for costs incurred because of delayed completion by Firedam. Three of the variations claimed by Firedam are relevant to this appeal: Variation 10(a) – additional boring work – Other Structure. This claim for a variation related to additional under-boring of sheds, gardens, trees and driveways that Firedam said it could not have been aware of at the time of its tender. Firedam claimed compensation based on 659.5 metres of under-boring and an extension of time of 33 days. Variation 12 – Sunset Strip and Bounty rock blasting. This claim related to additional costs said to have been incurred by Firedam "as a consequence of encountering extremely hard rock". Firedam claimed an extension of time of 22 days in relation to this variation. Variation 62 – C1 Transfer Main Realignment. This claim related to a realignment of the transfer main pipeline. Firedam claimed an extension of time of 90 days in relation to this variation. The letter set out a program for lodgment of submissions by the parties and specified 30 January 2009 as the date for the Determination. That date was extended by agreement to 6 February 2009, when the Determination was delivered. The Determination was made on the parties' submissions. There was no conference with the parties. The Determination was amended on 17 March 2009 pursuant to the procedures prescribed in the Contract19. The Expert Determination The Expert's findings on Firedam's variation and extension of time claims were as follows: Variation 10(a). Part of the claim to variation 10(a), which was defined by reference to the length of the additional under-boring works, was granted. Out of a total length of 659.5 metres claimed, the Expert determined that Firedam was 19 General Conditions, Sched 6, cl 4.2. Crennan entitled to compensation for 28 metres characterised as variation. He also found Firedam entitled to compensation for 138 metres attributable to breaches by Shoalhaven. The sum was 166 metres. Firedam had not substantiated its claim for delay in relation to the under-boring. The Expert therefore declined to make a determination of an extension of time. The Expert also found that Firedam had encountered materially adverse site conditions within the meaning of cl 41.2 of the General Conditions but held that its rights to an extension of time on that account had been extinguished because of its failure to give the written notice required by Variation 12. Firedam was entitled incurred by reason of to additional costs encountering extremely hard rock and to an extension of time of at least 22 days. The Expert rejected Shoalhaven's submission that Firedam had failed to comply with contractual procedures conditioning its entitlement to the extension of time. However, Firedam was not awarded delay costs under cl 55 as none had been "expressly claimed". Variation 62. No amount was awarded for variation 62. Firedam had not demonstrated its actual costs of the realigned line, nor provided a calculation of the reasonable allowance for the under-boring in the original location. The claimed extension of 90 days was refused as Firedam had "not provided any reasoned support" for it. Shoalhaven claimed common law damages in the amount of $783,031.60 due to delayed completion by Firedam. The Expert determined that Shoalhaven had contributed to the delay. He gave effect to that finding by exercising the discretion conferred by cl 54.6 and extending the time for completion by the amount of the delay attributable to Shoalhaven. That extension had the effect of reducing Shoalhaven's entitlement to compensation accordingly. The Expert exercised that discretion in relation to variations 10(a) and 62. In relation to variation 10(a) the Expert had determined that out of a total length claimed of 659.5 metres of additional under-boring, Firedam was entitled to recompense with respect to 166 metres. Firedam had claimed an extension of time of 33 days. The Expert determined, on a pro rata basis, that a delay of nine days should be attributed to Shoalhaven and granted an extension in that amount under cl 54.6. The Expert undertook a similar exercise with respect to variation 62 relating to the realignment of the pipeline route. Although Firedam had not provided any reasoned support for its claim for a 90 day extension of time, Crennan Shoalhaven had not denied that the works were delayed because of the realignment. Firedam had alerted it, in December 2006, to the need to consider realignment. By 10 May 2007, Firedam was aware that there were real difficulties associated with the original design. Shoalhaven gave approval for the realigned route on 13 September 2007. The Expert said it was reasonable to assume that the realignment was delayed for a period at least equal to the period from 10 May 2007 to 13 September 2007, amounting to 89 days. On that basis, he determined an extension of time, under cl 54.6, of 89 days in order to "disentangle" Shoalhaven's acts from other causes of delay. In the event, the Expert determined an amount of $497,142.55 was payable to Firedam after a deduction for Shoalhaven's entitlement to damages for delayed completion. The net amount was below the $500,000 threshold specified in the General Conditions. If the determination stood, Firedam was bound by it and could not take proceedings against Shoalhaven in respect of its claims. The primary judge's decision It was accepted before the primary judge that his Honour's decision in relation to variation 10(a) would determine, by parity of reasoning, the outcome in relation to variation 62. In the event that Firedam was unsuccessful in those matters, its challenge in respect of variation 12 would not be pressed. His Honour held: There was no inconsistency between the reasons of the Expert for rejecting Firedam's claim for an extension of time pursuant to variation 10(a) and his reasons for allowing an extension of time of nine days in the exercise of the discretion conferred on Shoalhaven by cl 54.6. The Expert was dealing with different claims, based on different criteria and calling for different findings20. The Expert had used Shoalhaven's power to extend time under cl 54.6 in order to arrive at a reasonable and fair means by which general damages, the subject of Shoalhaven's cross-claim, could be calculated21. The Expert determined the nine day extension so that there would be a benchmark against which Shoalhaven's claim could be assessed22. 20 [2009] NSWSC 802 at [34]. 21 [2009] NSWSC 802 at [34]. 22 [2009] NSWSC 802 at [35]. Crennan By parity of reasoning Firedam's submissions in relation to variation 62 were rejected. In light of the rejection of its claims in relation to variations 10(a) and 62, it did not press its claims in relation to variation 1223. The decision of the Court of Appeal The principal reasons for judgment in the Court of Appeal were delivered by Macfarlan JA. Beazley JA concurred, as did Campbell JA subject to qualifications and additional matters expressed in his Honour's separate reasons for judgment. Macfarlan JA's reasons involved the following steps: The Expert Determination in relation to variation 10(a), that a delay of nine days should be attributed to Shoalhaven, was inconsistent with his finding, in relation to that variation, that Firedam had not discharged its onus of showing that delay for a defined period had occurred and that the additional work required caused delay in reaching completion24. The Expert Determination in relation to variation 62, granting an extension of 89 days pursuant to cl 54.6, reflected a finding of fact inconsistent with the Expert's conclusion in dealing with Firedam's claims25. It could be assumed, without deciding, that the Expert had the power to grant an extension of time under cl 54.6 – that proposition was not in issue26. The Expert's extension of time under cl 54.6 was granted because of a variation or breach of contract by Shoalhaven, which would have attracted the application of cl 55.1. Yet he awarded no delay costs under cl 55.1 to 23 [2009] NSWSC 802 at [38]. 24 [2010] NSWCA 59 at [41]. 25 [2010] NSWCA 59 at [44]. 26 [2010] NSWCA 59 at [54]. 27 [2010] NSWCA 59 at [57]. Crennan The Expert did not tell Firedam why it was not entitled to delay costs and thus "failed to give proper reasons for his decision"28. The Determination did not answer the contractual description29. Campbell JA accepted that the Expert had "meticulously answered" each of the questions identified in cl 1 of the Expert Determination Procedure concerning each of the issues which had been submitted to him. His Honour added, however, that30: "when there is an unexplained discrepancy in his conclusions concerning some of those issues, he has not provided reasons for his determination as a whole." The discrepancy identified by Campbell JA was the Expert's determination that nine days of delay were attributable to Shoalhaven with no explanation of the Expert's failure to allow that nine days as an extension of time when assessing variation 10(a). The Expert had failed to fulfil his obligation of "giving reasons" because the reader of his reasons was left wondering about what construction he had put on cl 54.631. The validity of the Determination Hudson's Building and Engineering Contracts refers to the increasing diversity of dispute avoidance and resolution mechanisms in modern contracts. It points to the need to give careful consideration "to the true nature of the specific role described in the contract, because the consequences of the different nature of the roles can be radical"32. The range of issues able to be entrusted to Expert Determination under the Contract was wide. That width, and the associated procedures, might be thought to indicate proximity to an arbitral function33. In this case, however, the Contract expressly provided that the Expert 28 [2010] NSWCA 59 at [60]. 29 [2010] NSWCA 59 at [60], [63]. 30 [2010] NSWCA 59 at [14]. 31 [2010] NSWCA 59 at [17]. 32 Hudson's Building and Engineering Contracts, 12th ed (2010) at 706 [4-102]. 33 The distinction between expert and arbitrator was enunciated in In re Dawdy and Hartcup (1885) 15 QBD 426 at 430; In re Carus-Wilson and Greene (1886) (Footnote continues on next page) Crennan was to act "as an expert and not as an arbitrator"34. "Expert Determination" was defined in the Contract by reference to the procedures set out in the Contract. Nevertheless, the history of the term suggests the way in which the function to which it refers will be discharged. As Chesterman J said in Zeke Services Pty Ltd v Traffic Technologies Ltd35: "The evident advantage of an expert determination of a contractual dispute is that it is expeditious and economical. The second attribute is a consequence of the first: expert determinations are, at least in theory, expeditious because they are informal and because the expert applies his own store of knowledge, his expertise, to his observations of facts, which are of a kind with which he is familiar."36 In this case, the Expert determined, as required by the Contract, the issues identified by the parties. He answered "meticulously", as Campbell JA put it37, each of the questions identified in the Expert Determination Procedure set out in Sched 6 to the General Conditions. The contested question, whether the Determination accorded with the Contract, reduced to an inquiry about whether the Expert had given "reasons" within the meaning of cl 4 of Sched 6. The content of the requirement to give reasons must reflect the nature of the expert determination process, which is neither arbitral nor judicial38. It must also be 18 QBD 7 at 9 per Lord Esher MR, 10 per Lindley LJ and Lopes LJ. Recent decisions include Heart Research Institute Ltd v Psiron Ltd [2002] NSWSC 646; Strategic Publishing Group Pty Ltd v John Fairfax Publications Pty Ltd [2003] NSWSC 1134; Zeke Services Pty Ltd v Traffic Technologies Ltd [2005] 2 Qd R 34 General Conditions, Sched 6, cl 4.1.1. This formula apparently first appeared in Dean v Prince [1953] Ch 590 at 591; [1954] Ch 409 at 415 – see Kendall, Freedman and Farrell, Expert Determination, (2008) at 4 [1.1.8]. The label is not always determinative of the true character of the function created: Age Old Builders Pty Ltd v Swintons Pty Ltd (2003) 20 VAR 200 at 217 [68]. 35 [2005] 2 Qd R 563 at 570 [27]. 36 See also Straits Exploration (Australia) Pty Ltd v Murchison United NL (2005) 31 WAR 187 at 192 [14]. 37 [2010] NSWCA 59 at [14]. 38 Kanivah Holdings Pty Ltd v Holdsworth Properties Pty Ltd (2002) 11 BPR 20,201 Crennan informed by the nature of the issues to be determined. Judicial observations in other cases about contractual requirements in expert determinations or in arbitrations must be read according to their context39. It may be accepted, as a general proposition, that a mistake in the reasons given for an expert determination does not necessarily deprive them of the character of reasons as required by the relevant contract nor deprive the determination of its binding force40. There are mistakes which may have that effect and others that will not. to give reasons A deficiency or error in the reasons given by an expert may affect the validity of the determination in two ways: The deficiency or error may disclose that the expert has not made a determination in accordance with the contract and that the purported determination is therefore not binding. The deficiency or error may be such that the purported reasons are not reasons within the meaning of the contract and, if it be the case that the provision of reasons is a necessary condition of the binding operation of the determination, the deficiency or error will have the result that the determination is not binding. It appears to have been an unstated premise in the proceedings leading to this appeal that the contractually binding effect of the Determination between the parties was conditional upon the giving of reasons as required in cl 4 of Sched 6 to the General Conditions. In this case it was held by the Court of Appeal that the reasons for the Determination disclosed an inconsistency and did not account for it. The question whether there was an unexplained inconsistency is a threshold question. If answered in the negative, the further question whether the reasons were, on that account, insufficient to support a binding Determination will not arise. 39 Bremer Handelsgesellschaft mbH v Westzucker GmbH (No 2) [1981] 2 Lloyd's Rep 130 at 132-133; Halifax Life Ltd v The Equitable Life Assurance Society [2007] 1 Lloyd's Rep 528 at 542 [85]. 40 Legal & General Life of Australia Ltd v A Hudson Pty Ltd (1985) 1 NSWLR 314 at 331-337 per McHugh JA; Holt v Cox (1997) 23 ACSR 590 at 596-597; AGL Victoria Pty Ltd v SPI Networks (Gas) Pty Ltd (2006) Aust Contract Reports Crennan In relation to variation 10(a) the Expert declined to determine Firedam's claim for an extension of time which appears to have been based upon cl 52 read with cl 54. He did so because Firedam had not provided any "basis for substantiation of its claim". The Expert also found that, while the conditions which required additional under-boring were materially adverse site conditions within the meaning of cl 41, there was no entitlement to an extension of time on that account because no notice had been given under that clause. In determining Shoalhaven's cross-claim for damages for delayed completion, the Expert considered what delays were attributable to Shoalhaven. In considering variation 10(a) he had found Firedam entitled to compensation for a total of 166 metres of under-boring out of its total claim for 659.5 metres. Firedam had also claimed an extension of 33 days, which the Expert found unsupported. Nevertheless, he took that claim as a basis for calculating a pro rata delay of nine days attributable to Shoalhaven. That assessment favoured Firedam because it took Firedam's claimed but unsubstantiated extension of time as a basis for calculating the delay attributable to Shoalhaven. The Expert gave contractual effect to the delay attributable to Shoalhaven by exercising, at least notionally, the discretion of Shoalhaven to extend time under cl 54.6. The question whether he could exercise that power in the way he did was not in issue in the Court of Appeal. There was no inconsistency between the Expert's finding of delay attributable to Shoalhaven and his rejection of Firedam's substantive claim for an extension of time in relation to variation 10(a). Nor was there any relevant deficiency in the explanation given in the Expert Determination of the process of reasoning adopted. Firedam was the beneficiary of an assumption in its favour. In relation to variation 62, Firedam failed to provide reasoned support for an extension of time arising out of the necessary realignment of the main transfer pipeline. Its claimed extension of time of 90 days in connection with the proposed variation would have had to be related to the realignment requirements. Shoalhaven's delay of 89 days in responding to the clear need for realignment approval appears to have been in a different category. The use by the Expert of the discretion to extend time under cl 54.6 was again an application of that provision in favour of Firedam. By extending the completion date by 89 days Shoalhaven's claim for common law damages for delay on Firedam's part was reduced correspondingly. There was no inconsistency in the Expert's reasoning in relation to variation 62. The attack upon the Expert's reasons in the Court of Appeal should not have succeeded. Crennan Conclusion For the preceding reasons the following orders should be made: Appeal allowed with costs. The orders of the Court of Appeal made on 19 April 2010 be set side and in place thereof the appeal to that Court be dismissed with costs. Bell GUMMOW AND BELL JJ. After the grant of special leave on 3 September 2010, the respondent ("Firedam") was wound up on 26 November 2010. On 10 December 2010 the Supreme Court of New South Wales (McDougall J) granted leave under s 500(2) of the Corporations Act 2001 (Cth) to the appellant ("Shoalhaven") to proceed in this appeal against Firedam. However, the liquidator has played no part in this appeal and Shoalhaven thus has prosecuted the appeal in the absence of a contradictor. Several grounds are advanced by Shoalhaven, and they are of varying width in their general application to other cases. The above circumstances, and for reasons which follow, indicate that the appeal be decided in favour of Shoalhaven on a narrow ground. On 18 October 2005 Shoalhaven wrote to Firedam that it accepted Firedam's consolidated tender dated that day for the design and construction of the Wastewater Transportation System for the Conjola Regional Sewerage Scheme; the site was located in various parts of the Conjola Lake region, the majority of which were in or near private residential properties. The time for completion of the whole of the works was 64 weeks from the date of contract. The Contract Documents (a defined term) incorporated the General Conditions of Contract of the New South Wales Government (GC21 (Edition 1)) ("the General Conditions"). This was a document of some length. Clause 41 provided for an adjustment of the Contract Price, and for an extension of time under cl 54, upon certain conditions, by reason of adverse site conditions. However, cl 55.2 stipulated that the only remedies available to Firedam for delay caused by Shoalhaven were for an extension of time and for delay costs under cl 55.1.2. For its part, Shoalhaven reserved its rights to claim "general damages" if Firedam failed to achieve completion by the Completion Date. The parties might agree to variations to the work required by the contract, but if they did not agree, cl 52.6 provided that all issues relating to the claimed variation were to be dealt with under cll 72-75. Clauses 72-76 were headed "Claim and Issue resolution" and provided for the determination of issues by an Expert, who was to follow the procedure for Expert Determination in Sched 6. Subject to a qualification to which further reference will be made, the determination by the Expert was to be treated by the parties as "final and binding" and given effect to by the parties. The issues on this appeal, from the Court of Appeal of the Supreme Court of New South Wales (Beazley, Campbell and Macfarlan JJA)41, essentially turn upon matters of construction of the contractual documents, in particular of the General Conditions, and their application to the relevant events. There are two 41 Firedam Civil Engineering Pty Ltd v Shoalhaven City Council [2010] NSWCA 59. Bell basic questions42. They are: (i) what the parties agreed that the Expert was to do; those and (ii) whether requirements. the determination made by the Expert satisfied Clause 4 of Sched 6 to the General Conditions was headed "Role of Expert" and stated: Role of Expert The Expert: acts as an Expert and not as an arbitrator; must make its determination on the basis of the submissions of the parties, including documents and witness statements, and the Expert's own expertise; and must issue a certificate in a form the Expert considers appropriate, stating the Expert's determination and giving reasons, within 16 weeks, or as otherwise agreed by the parties, after the date of the letter of engagement of the Expert referred to in clause 75.2 of the [General Conditions]. If a certificate issued by the Expert contains a clerical mistake, an error arising from an accidental slip or omission, a material miscalculation of figures, a mistake in the description of any person, matter or thing, or a defect of form, then the Expert must correct the certificate." Two provisions of cl 4 require immediate comment. First, the certificate must state the determination and give "reasons". Secondly, the Expert "acts as an Expert and not as an arbitrator". The character and quality of the "reasons" in any particular instance may be expected to respond to the nature of the issues before the Expert for determination. Decided cases in which there is consideration by a court of alleged failure in performance of an express or implied requirement for the giving of reasons by a valuer of land or shares, or by an appraiser on a rent review, will not readily assist in dealing with provisions of 42 cf Capricorn Inks Pty Ltd v Lawter International (Australasia) Pty Ltd [1989] 1 Qd R 8 at 39-40. Bell a contract for building public works43. In many instances, as in the present case, the issues before the Expert may require consideration of many and detailed claims of a factual and evaluative nature. Further, as Campbell JA emphasised in the Court of Appeal44, immediate assistance in determining the extent of the obligation of the Expert to give "reasons", within the meaning of cl 4.1 of Sched 6, is not provided by what has been said by the courts when considering the adequacy of reasons given by arbitrators. Clause 4.1.1 is apt to differentiate the role of the Expert from that of an arbitrator. And, as is emphasised by French CJ, Gummow, Crennan and Bell JJ in Westport Insurance Corporation v Gordian Runoff Ltd45, with respect to arbitrations conducted under the Commercial Arbitration Act 1984 (NSW) ("the Arbitration Act"): "An award, subject to the Arbitration Act and to any contrary criterion in the arbitration agreement, is final and binding on the parties to the agreement (s 28). The award may order specific performance of a contract if the Supreme Court would have power to decree specific performance (s 24). By leave of the Supreme Court, judgment may be entered in terms of an award and an award may be enforced in the same manner as a curial judgment or order to the same effect (s 33). The Supreme Court is empowered by s 44 to remove an arbitrator who has misconducted the proceedings or who is incompetent or unsuitable to deal with the particular dispute. is more These statutory provisions indicate that the making of an award in the performance of private than arbitration proceedings contractual arrangements between the parties which yields an outcome which rests purely in contract. They also suggest the importance which the provision of reasons by arbitrators has for the operation of the statutory regime. That statutory regime involves the exercise of public authority, whether by force of the statute itself or by enlistment of the jurisdiction of the Supreme Court. It also ... displays a legislative concern that the jurisdiction of the courts to develop commercial law not be restricted by the complete insulation of private commercial arbitration." 43 cf Legal & General Life of Australia Ltd v A Hudson Pty Ltd (1985) 1 NSWLR 314; Holt v Cox (1997) 23 ACSR 590; Kanivah Holdings Pty Ltd v Holdsworth Properties Pty Ltd (2002) 11 BPR 20,201. 44 [2010] NSWCA 59 at [4]-[7]. 45 [2011] HCA 37 at [18]-[19]. Bell Disputes arose, and claims were made by Shoalhaven for damages for delayed completion, and by Firedam for extensions of time, variations and delay costs. By letter of engagement dated 10 October 2008, Mr Neil Turner was appointed the Expert to determine six unresolved issues raised by Firedam. These were identified as claims 10(a), 11, 12, 59, 62 and 143. Shoalhaven, on its part, cross-claimed for direct costs due to delayed completion. The amended reasons of the Expert dated 17 March 2009 is a document of 84 pages and 572 paragraphs. The determination which the reasons supported was that Firedam was to pay Shoalhaven $308,000 (including GST) for damages for late completion, and interest of $13,501.37 payable to 6 February 2009. These sums were to be carried forward to the collection, with the final result that Shoalhaven was to pay Firedam $569,595.96 (including GST), being a principal amount of $497,142.55 plus interest. This principal amount was below the contractually stipulated threshold of $500,000, above which review by litigation was permitted, and below which the determination of the Expert was final and binding. Firedam was dissatisfied with that outcome and by Summons filed in the Supreme Court of New South Wales on 15 May 2009 it sought declarations that: (1) the determination was not binding upon it, and (2) it was at liberty to commence proceedings against Shoalhaven in respect of certain claims which it had made. One of the grounds upon which declaration (1) was sought was that the Expert had failed to give reasons complying with the obligation imposed by cl 4.1.3 of Sched 6, set out above. Tamberlin AJ, on 12 August 2009, ordered that the Summons be dismissed, and ruled46 that the Expert had given valid and sufficient reasons for his conclusions in the matter. However, the appeal by Firedam to the Court of Appeal succeeded and a declaration was made that the determination by the Expert was not binding upon the parties. For the reasons which follow, the appeal to this Court by Shoalhaven should succeed and the orders by Tamberlin AJ should be restored. There were three claims by Firedam which were dealt with in the Supreme Court, identified as claims 10(a), 12 and 62. Clause 41.4, subject to a qualification not presently relevant, provided as follows: 46 Firedam Civil Engineering Pty Ltd v Shoalhaven City Council [2009] NSWSC 802. Bell [Firedam] will be entitled as an adjustment to the Contract Price to its direct, reasonable additional costs (including costs of delay or disruption), necessarily and unavoidably incurred by [Firedam] in dealing with materially adverse Site Conditions, from the date of provision to [Shoalhaven] of the written notice required by clause 41.2, having taken all reasonable steps to minimise the costs in dealing with materially adverse Site Conditions; and [Firedam] may also be entitled to an extension of time for Completion under clause 54 for delays caused by the materially adverse Site Conditions occurring from the date of provision to [Shoalhaven] of the written notice required by clause 41.2." Clause 54 was headed "Extensions of time". It provided in cl 54.1 that in certain circumstances Firedam would be entitled to an extension of the completion time for a number of days to be assessed by Shoalhaven. In addition, a special provision with respect to extension of time by and for the benefit of Shoalhaven was made by cl 54.6. Clause 54.6 is set out later in these reasons. Claim 10(a) was made in respect of additional under-boring of sheds, gardens, trees and driveways of which Firedam claimed it could not have been aware at the time of tender. By claim 12 Firedam sought an amount for additional costs incurred as a consequence of encountering extremely hard rock, this being said to be a materially adverse site condition within the meaning of cl 41. By claim 62 Firedam sought an amount for additional costs incurred as a consequence of the realignment of a mainline across the waterway at Pattimores Lagoon. Firedam succeeded in obtaining some additional costs for extra work in respect of claim 10(a) and claim 12, but it failed in relation to claim 62. Firedam failed to obtain an extension of time in relation to claim 10(a) and claim 62, but did succeed in obtaining the claimed extension of time under claim 12. In the case of claim 12, while the Expert did allow the claimed extension of time, he did not allow delay costs. These had not been claimed and the Expert considered that there may be some allowance for delay costs in the hours claimed by Firedam for its staff. The Expert determined that Firedam should not obtain extensions of time with respect to claims 10(a) and 62 because it had not complied with the notice provisions of cl 41.2; this had obliged Firedam to notify Shoalhaven in writing within seven days of encountering the relevant adverse site condition. Nor had Firedam complied with the requirements of cl 54, which set out various conditions to be satisfied before it was entitled to an extension of time for the number of days to be assessed by Shoalhaven. The result with respect to claims 10(a) and 62 meant that in response to any claim by Shoalhaven against Bell Firedam for damages for delay in completion, Firedam could not say that the contractual completion date of 64 weeks, from the contract date, had been extended or postponed. Nor could Firedam claim damages under cl 55.1.2 for delay costs in respect of the number of days during which the completion date might have been extended. The Expert did, however, return to the question of the completion date. But this was because he also had to deal with the cross-claim by Shoalhaven for damages for delay by Firedam and to fix a time from which such entitlement should commence. The Expert considered that there were delays attributable to Shoalhaven which would have entitled Firedam to an extension of time had it complied with the conditions precedent to obtaining that extension. He determined in par 533 of the reasons that the contractual completion date should be further extended by a total of 120 days: "as a reasonable entitlement to [an extension of time] and in order to disentangle [Shoalhaven] caused causes of delay from other causes, so that [Shoalhaven] can have a determinate date from which general damages may be determined." The date of completion so fixed by the Expert was 15 November 2007. Completion in fact had been achieved on 30 May 2008, and this was not denied by Firedam. The Expert went on to determine the cross-claim on the footing that the breach by Firedam in failing to achieve due completion extended from 15 November 2007 to 30 May 2008. The determination in par 533 was made pursuant to cl 54.6 of the General Conditions. This stated: its absolute discretion for "[Shoalhaven] may the benefit of [Shoalhaven] extend the time for Completion at any time and for any reason, whether or not [Firedam] has Claimed an extension of time. [Firedam] is not entitled to an extension of time for Completion under this clause 54.6 unless [Shoalhaven] exercises its discretion to extend the time for Completion." There was no issue in the litigation which challenged the ability of the Expert to "step into the shoes" of Shoalhaven for the purpose of granting the extension of time under cl 54.6. In his reasons, Tamberlin AJ concluded that there was no "inconsistency" between the approach or reasoning of the Expert in dealing with the Firedam claims for an extension of time, and the reasoning used by the Expert in determining damages on the claim by Shoalhaven for delay. His Honour added: Bell "They are distinct claims based on different criteria and they call for different findings. [The Expert], in dealing with the cross-claim by Shoalhaven, on a proper interpretation of his reasons, was referring to the power to extend time under Clause 54.6 in order to arrive at a reasonable and fair means by which general damages, the subject of Shoalhaven's cross-claim, could be calculated." His Honour restated that conclusion in the fourth last paragraph of his reasons, and then said that he considered that the Expert had "given valid and sufficient reasons for his conclusions". The Court of Appeal allowed the appeal essentially on the ground that the Expert had not given reasons as required by cl 4.1.3 of Sched 6 to the General Conditions and that this was so because: (i) the determination contained conflicting decisions on two issues, and (ii) the reasons did not explain how this had arisen. In particular, there was said to be an "inconsistency" between the rejection by the Expert of the claim by Firedam to an extension of time for claim 10(a), and the exercise of the power in cl 54.6, so that Firedam was left in a state of ignorance as to why its delay costs claim in claim 10(a) was rejected. Thus, the Expert had failed to give "proper reasons" for his decision. The short answer is that cl 54.6 is expressed to operate for the benefit of Shoalhaven and is distinct from the provision in cl 54.1 respecting the entitlement of Firedam47. It is clear from the reasons given by the Expert that the extension of time was granted under cl 54.6 to provide a starting point for the determination of Shoalhaven's claim for damages, an issue factually and conceptually distinct from any entitlement of Firedam to an extension of time under cl 54.1. The primary submission by Shoalhaven is to this effect and should be accepted. It alternatively submitted that it would have been sufficient compliance with the task entrusted to the Expert that he gave clear reasons for the course he took, even if this was one on which different minds could have taken different views or even if the course he took was erroneous. It is unnecessary to consider this alternative submission. The appeal should be allowed with costs, the orders of the Court of Appeal made 19 April 2010 set aside and in place thereof the appeal to that Court be dismissed with costs. 47 cf Hervey Bay (JV) Pty Ltd v Civil Mining and Construction Pty Ltd (2010) 26 BCL 130 at 139 [40]. HEYDON J. It is unfortunate that this appeal will not decide the issues which arise in relation to the construction of the requirement in cl 4.1.3 of Sched 6 to the contract in question that the Expert's certificate was to state his determination "giving reasons". That is because, although in form they present themselves as only relating to the construction of a particular standard form contract, they have a much wider significance. They are extremely important. If ever those issues are examined in this Court, the written and oral submissions advanced in this appeal by the appellant will be a valuable reference source. But a decision ex parte on particularly important legal questions is an evil to be avoided as far as possible. Even if an ex parte decision is binding, it is extremely vulnerable to overruling in a later case which is fully argued. In a practical sense an ex parte decision could not settle the law. The same is true, a fortiori, of dicta on questions of that kind. Hence the better course in the circumstances is to say nothing about them. The Court of Appeal of the Supreme Court of New South Wales erred in considering that the determination was internally inconsistent and in departing from the contrary view of Tamberlin AJ. That contrary view of the somewhat confusing factual and contractual position is correct for the reasons which Tamberlin AJ gave48. The appeal must be allowed with costs. 48 Firedam Civil Engineering Pty Ltd v Shoalhaven City Council [2009] NSWSC 802, in particular at [34]-[36].

HIGH COURT OF AUSTRALIA AND APPELLANT GORDIAN RUNOFF LIMITED (formerly known as GIO INSURANCE LIMITED) & ANOR RESPONDENTS Wilkie v Gordian Runoff Limited [2005] HCA 17 7 April 2005 ORDER Appeal allowed with costs. Set aside order 2 of the orders of the Supreme Court of New South Wales made on 18 November 2003 and in its place order "The question be answered 'No'." Respondents to pay the costs of and related to the determination of the question in the Supreme Court of New South Wales. On appeal from the Supreme Court of New South Wales Representation: B W Walker SC with M J Leeming for the appellant (instructed by Speed & Stracey) M A Pembroke SC with A S Bell for the respondents (instructed by Henry Davis York) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Wilkie v Gordian Runoff Limited Insurance – Professional indemnity insurance – Directors and officers liability insurance policy – Criminal proceedings instituted against appellant insured – Following Royal Commission, appellant alleged to have permitted misleading information to be provided to company auditor – Appellant claimed for advance payment of defence costs under insurance policy – Availability of advance payment of insured's defence costs subject to respondent insurer not denying indemnity for a claim – Respondent purported to deny indemnity relying on exclusion under the policy for losses arising from dishonest, fraudulent, criminal or malicious conduct – Exclusion enlivened only where conduct admitted by the insured or established to have occurred following adjudication by a court, tribunal or arbitrator – Whether respondent had effectively denied indemnity for appellant's claim – Whether stated reliance upon exclusion sufficient to deny indemnity – Whether exclusion engaged in the circumstances. GLEESON CJ, McHUGH, GUMMOW AND KIRBY JJ. This appeal concerns the construction of a Directors & Officers/Company Reimbursement Policy dated 23 February 2000 ("the Policy"). The primary operation of the Policy is to insure to a limit of $20 million the "Insured" (defined as including past, present and future directors, officers and employees of FAI Insurance Limited ("FAI") and its subsidiaries, collectively called "the Organisation") against certain Loss arising out of any Claim. The Claim must be first made against an Insured and notified in the Period of Insurance and be in respect of any Wrongful Act committed or alleged to have been committed up to 31 May 1999. The terms "Loss", "Claim", "Wrongful Act" and "Period of Insurance" are all defined. The Period of Insurance commenced on 31 May 1999 and ends on 31 May 2006. The text of the definitions of "Loss", "Claim" and "Wrongful Act" appears later in these reasons. The appellant, Mr Wilkie, is within the class of persons each of which is an Insured because at all relevant times he was an executive officer or employee of FAI or a subsidiary of FAI. Where the Policy refers to "GIO", it means GIO Insurance Limited (as the first respondent was then known) for 60 per cent of the limit of liability, and RE Brown Syndicate at Lloyds, London (as the second respondent was then known) for 40 per cent of that limit. In these reasons, unless otherwise indicated, references to GIO are to GIO as defined in the Policy and thus to the respondents collectively. The liability of GIO under the Policy in respect of all Claims does not exceed the limit of liability stated above. The governing law chosen in the Policy is identified as that of the Commonwealth of Australia and of the State where it was issued, which appears to be New South Wales. The result is to attract the application of the Insurance Contracts Act 1984 (Cth) ("the Insurance Contracts Act")1. The background facts The question of construction of the Policy arises in circumstances where the appellant notified a claim in respect of criminal proceedings and sought the advancement of his Defence Costs (as defined in the Policy) but GIO denied liability, relying upon Exclusion 7, a "dishonesty exclusion". The criminal proceedings were instituted by process issued out of the Local Court at Sydney, on 29 May 2003, on information laid by the Australian Securities and Investments Commission ("ASIC"). The prosecution of the 1 See s 8 thereof and Akai Pty Ltd v People's Insurance Co Ltd (1996) 188 CLR 418. McHugh Kirby appellant is for alleged offences under the Corporations Act 2001 (Cth) ("the Act"). It is alleged that at Sydney between about 26 June 1998 and 9 September 1998, the appellant, being an officer of FAI General Insurance Company Limited ("FAIG"), permitted the making available to the auditor of FAI, which controlled FAIG, information relating to the affairs of FAIG but with omissions rendering the information misleading in a material respect. The appellant is said thereby to be guilty of an offence under ss 1309(1) and 1311(1) of the Act. It is further alleged that at Sydney between about 1 March 1998 and 6 May 1998 and between about 23 June 1998 and 26 June 1998, the appellant, being an officer of FAIG, knowingly failed to act honestly in the exercise of his powers and the discharge of his duties of office with the intention to deceive the auditors of FAI. The appellant is said thereby to have acted contrary to ss 232(2) and 1317FA of the Corporations Law as taken to be included in the Act by s 1401 of the Act. The appellant has not admitted these offences, nor has there been any adjudication of them. The appellant's claim for indemnity was not brought on the primary operation of the Policy. Rather, the claim was for the Defence Costs to be incurred in the appellant's defence of the charges brought against him by ASIC. Extension 9 to the Policy is headed "ADVANCE PAYMENT OF DEFENCE COSTS" and it was upon this that the appellant relied for payment of those costs as and when incurred. The Commonwealth Director of Public Prosecutions supplied the appellant's solicitors with a copy of the brief of evidence and they, in turn, provided a copy to the solicitors for GIO2. After a review of this material by counsel for GIO, on 25 September 2003 GIO's solicitors wrote to the appellant's solicitors informing them that their clients "deny indemnity for the claim pursuant to the terms of Exclusion 7 of the Policy". Section 13 of the Insurance Contracts Act implies in the Policy a provision requiring each party to it to act towards the other party with the utmost good faith in respect of any matter arising under or in relation to the Policy. The appellant has not alleged that GIO acted other than in good faith. 2 The Policy required the Insured "to provide such information and assistance to GIO as it reasonably requires ... to enable it to determine its liability under this policy" (Condition 3.4). McHugh Kirby It also should be noted that the denial by GIO of indemnity was founded solely on Exclusion 7. No other ground based in the terms of the Policy was asserted. Nor did GIO rely upon any of the statutory grounds of avoidance for failure to disclose a matter before contract or for misrepresentation or incorrect statements3. The decision of the Supreme Court By his amended summons in the Equity Division of the Supreme Court of New South Wales dated 25 September 2003, the appellant claims, among other relief, a declaration that the respondents were not entitled to rely on Exclusion 7 of the Policy in denying indemnity to him under Extension 9. The appellant also seeks a mandatory order that the respondents pay all the appellant's reasonable Defence Costs as and when they are incurred on condition that the respondents have the right to recover those payments from the appellant in the event, and to the extent, that it be subsequently established by judgment or other final adjudication that the appellant was not entitled to indemnity under the Policy. There have been no pleadings. An order was made by the Supreme Court4 that the question whether the respondents were entitled to decline to indemnify the appellant be determined as a separate question. The terms of the separate question were then agreed and the matter was promptly heard by the Supreme Court (Nicholas J). On 18 November 2003, his Honour delivered reasons for judgment in which he answered the question "yes" and, thus, answered it adversely to the appellant. In reaching that decision, Nicholas J paid close attention to the decision of the New South Wales Court of Appeal in Silbermann v CGU Insurance Ltd; Rich v CGU Insurance Ltd; Greaves v CGU Insurance Ltd5, the reasoning in which he regarded as directly applicable to the Policy. This Court granted special leave to appeal directly from the decision of Nicholas J and ordered that the appeal be heard on the same occasion as the then pending appeals in Silbermann and Rich. However, it became apparent in the course of argument that distinct issues arose in those appeals which did not arise in this appeal. Insurance Contracts Act, Pt IV, Div 3 (ss 28-33). 4 Pursuant to Pt 31 r 2 of the Supreme Court Rules 1970 (NSW). (2003) 57 NSWLR 469 at 484-488. McHugh Kirby The question determined adversely to the appellant by Nicholas J was drawn in precise terms as follows: "In circumstances where: The [appellant] wrote to the [respondents] and notified a claim ('the ASIC Claim') as described in the affidavit of [the appellant's solicitor] sworn 16 September 2003; The [respondents] on 25 September 2003 wrote to the [appellant] stating that '[the first respondent] and [the second respondent] deny indemnity for the claim pursuant to the terms of Exclusion 7 of the Policy'; The [appellant] has not admitted that his conduct falls within Exclusion 7; The conduct referred to in Exclusion 7 has not been 'subsequently established to have occurred following the adjudication of any court, tribunal or arbitrator'; and The [appellant] does not, for the purposes of the determination of this separate question, allege that the [respondents] acted other than in good faith in writing the letter referred to in paragraph 2 above, then: Are the [respondents] free of any obligation to indemnify the [appellant] under [Extension 9] of the Policy when the basis relied upon by the [respondents] in their letter of 25 September 2003 was solely Exclusion 7 of the Policy?" The terms of the insurance policy In McCann v Switzerland Insurance Australia Ltd6, after observing that, as a commercial contract, a policy of insurance should be given a businesslike (2000) 203 CLR 579 at 589 [22]; cf at 600-601 [74]. McHugh Kirby "Interpreting a commercial document requires attention to the language used by the parties, the commercial circumstances which the document addresses, and the objects which it is intended to secure". The immediate questions of construction of the Policy turn upon the relationship between Extension 9 and Exclusion 7. In construing the Policy, as with other instruments, preference is given to a construction supplying a congruent operation to the various components of the whole7. Counsel for the appellant submitted that his construction gives effect to this precept, and put to one side any principle of interpretation resolving doubts in the appellant's favour as one of the Insured8. The body of the Policy is an instrument of 16 pages, each headed with the GIO logo. However, the appellant's counsel prudently eschewed any recourse to the maxim verba chartarum fortius accipiuntur contra proferentem9 for the interpretation of an insurance policy agreed between the parties, all of which were organisations involved in the business of insurance. Before coming to the text of the particular provisions identified in the question for separate determination, namely Extension 9 and Exclusion 7, it is convenient to identify other basic provisions of the Policy by reference to the sections into which the body of the Policy is divided. The instrument is divided into sections headed "INSURING CLAUSE A", "INSURING CLAUSE B", "AUTOMATIC EXTENSIONS", "OPTIONAL EXTENSIONS", "EXCLUSIONS", "CONDITIONS" and "DEFINITIONS". Insuring Clause A is headed "DIRECTORS AND OFFICERS LIABILITY". It contains what has been described earlier in these reasons as the primary operation of the Policy. The claim for Defence Costs which the appellant makes is not made under this primary operation of the Policy. But an appreciation of Insuring Clause A and cognate provisions assists an understanding of the claim which is made. Insuring Clause A states: 7 See Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 cf Andar Transport Pty Ltd v Brambles Ltd (2004) 78 ALJR 907 at 911 [17], 922-923 [68], 930-931 [122]-[124]; 206 ALR 387 at 392-393, 408-409, 419-420. "The words of an instrument should be taken most strongly against the party proffering them." McHugh Kirby "GIO will pay on behalf of the Insured, all Loss arising from any Claim first made against an Insured during the Period of Insurance and notified to GIO during the Period of Insurance by reason of any Wrongful Act PROVIDED THAT the Organisation is not required or permitted to indemnify the Insured for such Loss." This directs the reader to several of the terms appearing in the section headed "DEFINITIONS". Definition 1 states: "Claim means any: written communication to the Insured or to the Organisation, which alleges a Wrongful Act by the Insured; or (ii) writ, summons, application or other original legal or arbitral proceedings, cross claim, or counter claim: issued against or served upon the Insured and alleging a Wrongful Act; or (iii) criminal proceeding commenced by a summons or charge against the Insured alleging a Wrongful Act." (emphasis added) Each paragraph of this definition fixes upon a written communication or legal process characterised by the allegation therein of a Wrongful Act. It is par (iii) of the definition of "Claim" which is applicable to the present case, but it will be apparent from the balance of the definition that it covers many allegations in civil process of a Wrongful Act where negligence or breach of fiduciary duty, rather than conscious wrongdoing or other dishonesty, is involved. Definition 19 states: "Wrongful Act means: any error, misstatement, misleading statement, act, omission, neglect, or breach of duty committed, or attempted or made (or so alleged) by the Insured in the performance of their duties to the Organisation or any matter claimed against the Insured solely by reason of the Insured serving the Organisation." The term "Loss" is the subject of Definition 8. This states: "Loss means: the total amount which the Insured and/or the Organisation becomes legally obligated to pay as a result of a Claim made against the Insured for a Wrongful Act. Loss includes: damages, judgements, settlements, costs and Defence Costs. Loss does not include: fines or penalties imposed by law, punitive or aggravated or exemplary or McHugh Kirby multiple damages, taxes, or matters uninsurable under the law pursuant to which this policy is construed." (emphasis added) The first sentence of this definition fixes upon that total quantification which is the product of the resolution of the allegations constituting a Claim into a legal obligation to make payment. The third sentence is important for the present case and for any case in which the claim in question is a criminal proceeding within the meaning of par (iii) of the definition of "Claim". GIO is not obliged by Insuring Clause A to pay any fines or penalties which may be imposed upon the appellant, these being uninsurable. The value of the Policy to the appellant as the particular Insured in question thus is limited to the identification in the second sentence of "Loss" of "Defence Costs". Definition 2 provides: "Defence Costs means: those costs or charges or expenses, incurred in defending or investigating or monitoring Claims or related appeals. Defence Costs does not include: wages or salaries or fees of the Insured, nor the cost of time spent by the Organisation." (emphasis added) Accordingly, the responsibility of GIO in its primary obligation under Insuring Clause A in the present case is to pay costs, charges or expenses when they have been incurred by the appellant in defending or investigating or monitoring the criminal proceedings instituted by ASIC and related appeals. This is because the term "Loss" is defined relevantly as meaning "the total amount" which the Insured "becomes legally obligated to pay", including "Defence Costs", which, in turn, are costs "incurred". That primary obligation is not of great assistance to the appellant in his situation where he requires an assured source of financial provision in the continuing task of the preparation of his defence to the ASIC charges against him. It should also be observed that the primary obligation is conditioned by the limitation in Condition 3.1. The Insured is not to incur Defence Costs: "without prior written consent from GIO (such consent not to be unreasonably withheld). GIO shall not be liable for any ... Defence Costs to which it has not so consented." Further, and in any event, the primary obligation to pay all "Loss" is qualified by what appears in the Policy in the section headed "EXCLUSIONS". There are 15 items under that heading. (There is also an additional exclusion attached to the Policy relating to Loss arising out of any reinsurance contract issued by the Organisation.) Each exclusion is introduced by the words "[t]his McHugh Kirby policy does not insure Loss arising out of any Claim". As has been indicated earlier in these reasons, whilst the content of the term "Claim" is identified by the description of allegations made, the term "Loss" looks to the resolution of those allegations by the accrual of a legal obligation to make a payment. Many of the 16 items of exclusion are described by reference to the nature of the allegations in the Claim. Examples are allegations of bodily injury or loss of tangible property (Exclusion 2), allegations first made against the Insured prior to the Period of Insurance (Exclusion 10), and (Exclusion 14) allegations based upon information contained in or omitted from a "Prospectus" (a defined term). Exclusion 4(i) fixes upon the forum in which the process is instituted (a court in the United States of America or Canada). Exclusions 5, 6 and 7 are of a distinct and different character10. For example, it is not enough to attract Exclusion 6 that the allegations in the process are based upon insider trading in securities; the phrase "in fact" is introduced and, as appears below, is given a defined meaning. The provisions respecting Exclusion 7 are as follows: "This policy does not insure Loss arising out of any Claim: based upon, attributable to, or in consequence of: any dishonest, fraudulent, criminal or malicious act or omission; or 10 The text of Exclusion 5 is as follows: "[This policy does not insure Loss arising out of any Claim] based upon, attributable to, or in consequence of any Insured having gained in fact any personal profit or advantage or receiving any remuneration to which such Insured was not legally entitled". That of Exclusion 6 is: "[This policy does not insure Loss arising out of any Claim] based upon, attributable to, or in consequence of any Insured having in fact improperly benefited from securities transactions as a result of information that is not available to other purchasers and sellers of such securities". McHugh Kirby any deliberate breach of any statute, regulation or contract; where such act, omission or breach has in fact occurred ... Notwithstanding the above Exclusions 5, 6 and 7 shall not apply to any Insured who had no direct personal involvement in, or knowledge of, the matters upon which the operation of those Exclusions are based. For the purposes of Exclusions 5, 6 and 7, the words 'in fact' shall mean that the conduct referred to in those Exclusions is admitted by the Insured or is subsequently established to have occurred following the adjudication of any court, tribunal or arbitrator." An admission or establishment by adjudication within the meaning of this last paragraph of Exclusion 7 would be an answer to a claim made to recoup Defence Costs which have been incurred. But the issue on this appeal turns upon what GIO contends is an anterior operation of Exclusion 7 upon another part of the Policy. The primary obligation under Insuring Clause A is accompanied by a number of additional benefits or "extensions". One class of these is included in the Policy automatically; the other is not included unless indicated in the Schedule to the Policy. In the section headed "AUTOMATIC EXTENSIONS", 10 extensions are specified. Each extension is subject to the terms, conditions, limitations and exclusions of the Policy. The appellant relies upon Extension 9. This states: "9. ADVANCE PAYMENT OF DEFENCE COSTS If GIO elects not to take over and conduct the defence or settlement of any Claim, GIO will pay all reasonable Defence Costs associated with that Claim as and when they are incurred PROVIDED THAT: GIO has not denied indemnity for the Claim; and the written consent of GIO is obtained prior to the Insured incurring such Defence Costs (such consent not to be unreasonably withheld). McHugh Kirby GIO reserves the right to recover any Defence Costs paid under this extension from the Insured or the Organisation severally according to their respective interests, in the event and to the extent that it is subsequently established by judgement or other final adjudication, that they were not entitled to indemnity under this policy." (emphasis added) Stipulation (ii) is the counterpart to Condition 3.1, set out above, which also requires prior written consent which is not to be unreasonably withheld. In Extension 9, stipulation (ii) supplies content to the term "reasonable" in the obligation that "GIO will pay ...". Analysis of the Policy It is stipulation (i) to Extension 9 which is of central importance for this appeal. The respondents submit that Extension 9 has no operation in the circumstances of this case because it cannot be said that "GIO has not denied indemnity for the Claim". To the contrary, by the letter from their solicitors dated 25 September 2003, the respondents effectively denied indemnity by stating that they did so "pursuant to the terms of Exclusion 7 of the Policy". What then is the relationship between Extension 9 and Exclusion 7 as it bears upon the separate question decided by the Supreme Court in the present case? It is important to note that Exclusion 7 speaks of "Loss arising out of any Claim", and that, as already indicated, "Loss" is so defined as to refer to the primary obligation under Insuring Clause A in respect of accrued obligations of payment. Extension 9 provides a distinct cover beside that under Insuring Clause A which obliges GIO to pay "all Loss arising from any Claim". What is removed by Exclusion 7 is "Loss arising out of any Claim" which is based upon, attributable to or in consequence of any matter detailed in the text of that Exclusion. There thus is a correlated operation between Insuring Clause A and Exclusion 7. No such correlation is immediately apparent between the text of Extension 9 and of Exclusion 7. The latter is inaptly drawn to exclude the former. To say that the Policy "does not insure Loss [including Defence Costs] arising out of any Claim" the allegations in which are based upon or attributable to any criminal act or omission is not to address an obligation to pay all reasonable Defence Costs of meeting those allegations as and when the costs are incurred. McHugh Kirby But it is that very lack of congruence which reinforces the effect of the vital provision, stipulation (i) to Extension 9. The obligation the Extension imposes is to make advance payments of Defence Costs at times when, by hypothesis, the liability to indemnify in respect of the Claim may be uncertain because it awaits adjudication. The obligation so imposed is limited by the proviso in stipulation (i). This is expressed in broader terms than a denial of indemnity to pay Defence Costs in advance. Rather, it is concerned with a denial of "indemnity for the Claim", that is to say, of indemnity in respect of the process alleging a Wrongful Act. By the letter of 25 September 2003, GIO in terms denied indemnity for the Claim. The letter referred to the findings of a Royal Commission into the affairs of FAI and to the "voluminous evidence contained in the Crown brief". That founded the statement made that Exclusion 7 applied. In this fashion, GIO had taken the stance that it "denied indemnity for the Claim", the expression used in stipulation (i). But was that sufficient to disengage Extension 9? The appellant's submission that it was not sufficient to do so should be accepted. This is because in such an action to enforce observance of Extension 9, it is no answer by GIO merely to point to a purported denial of indemnity for the Claim which, in turn, would be insufficient to meet an action for breach of the primary obligation of GIO under Insuring Clause A, were such an action to be brought. The efficacy in law of the purported denial based upon Exclusion 7 must be open to challenge in either case. The fact having legal consequences upon which stipulation (i) operates, is a denial of indemnity for the Claim which is then effective in the terms of the assigned ground of denial. Exclusion 7 does not read "where, in the opinion of the Insurer, such act, omission or breach has occurred", nor does it provide for determination of the question by an independent decision-maker (a so-called Queen's Counsel or Senior Counsel clause). The exclusion clause does not found a denial of indemnity for a Claim unless and until the phrase "in fact" operates in its defined sense. In the present case, the conduct referred to in Exclusion 7 had not been admitted by the appellant. Nor had the occurrence of that conduct been established by adjudication. It could not be suggested, nor was it, that any findings by the Royal Commission matched that description. The appellant accepts that such an adjudication might be in the very action upon the primary obligation of GIO under Insuring Clause A; the efficacy of the denial of indemnity for the Claim would be seen only in the outcome of that action. But that is not the present case. This arises where advance payment is McHugh Kirby sought, upon the very hypothesis that the ultimate outcome of the prosecution of the appellant is uncertain. That "gap" between present uncertainty and ultimate resolution is met in the second paragraph of Extension 9. This reserves to GIO a right of recovery if it be subsequently established that the appellant was "not entitled to indemnity under this policy" because, for example, GIO had made good its denial based on Exclusion 7. That reservation of a right of recovery may not always be a right of great value. But given the width of the "umbrella" extended by the definition of "Insured", this could not be said to be an inevitable outcome. On the face of things, when the Policy was issued, the Insured included a corporate group of considerable substance. On the other hand, if the party making an unsuccessful Claim against an Insured itself lacked substance, Defence Costs ultimately awarded to that Insured would not be recovered. Further, with respect to an unsuccessful prosecution, recovery of costs would depend upon limited legislative provision in that regard11. The contrary case put by GIO is that it is sufficient that GIO chooses, necessarily in good faith, to deny indemnity for the Claim on a ground stated in Exclusion 7, to then and there disengage Extension 9. This is said to be so even in circumstances in which the then present availability of that ground can only later be established "in fact". However, this construction would permit GIO to rely upon a provision such as Exclusion 7 in anticipation of its operation. To that extent, the recovery right in Extension 9 would be deprived of work to do and there would be denied a consistent and harmonious operation in both Exclusion 7 and Extension 9 of the phrase "is subsequently established". Extension 9 is subject to all the exclusions of the Policy, including Exclusion 7. It becomes necessary to relate the concept of denying indemnity in stipulation (i) of Extension 9 to the requirement in Exclusion 7 that the specified misconduct "has in fact occurred", that is, has been admitted or established by adjudication. Putting the possibility of admission to one side, where there is, for example, an allegation of a criminal act, an element necessary for the operation of Exclusion 7 is adjudication of criminal guilt. It is not the fact of criminal conduct that enlivens the exclusion; it is the fact of adjudication of guilt, ordinarily by conviction. The evident purpose of the concluding words of Exclusion 7 (and the corresponding words in Exclusions 5 and 6) is to deprive 11 cf Costs in Criminal Cases Act 1967 (NSW). McHugh Kirby the Insured of an entitlement to indemnity only where there has been a curial finding of misconduct of a kind specified. Where, by hypothesis, there has been no such finding, a necessary element of the exclusion is missing. In those circumstances, there is as yet no ground to which GIO can point as a legal basis for a denial of indemnity. The denial of indemnity of which Extension 9 speaks is a refusal of indemnity on a ground for refusal provided by the Policy, not a statement which foreshadows that indemnity will be refused if and when a ground for refusal becomes available. It was submitted by GIO that to accept the appellant's construction of Exclusion 7 and Extension 9 would deprive stipulation (i) to Extension 9 of the operation which it evidently was designed to have of protecting GIO against an obligation to pay all reasonable Defence Costs associated with a Claim as and when those costs are incurred in a situation where GIO had already denied indemnity for that Claim itself. However, there will be many instances of items in the list of exclusions which in an appropriate case may be so utilised. The Claim may have been brought in a court in the United States or Canada (Exclusion 4(i)); be based upon bodily injury or damage to tangible property (Exclusion 2); predate the Period of Insurance (Exclusion 10); or be based upon information contained in or omitted from a Prospectus (Exclusion 14). The denial may have been in reliance upon one of the statutory grounds of avoidance in Pt IV, Div 3 of the Insurance Act (ss 28-33). No such ground was taken here by GIO in its letter of 25 September 2003 denying liability. Conclusion: Exclusion 7 was not engaged Exclusions 5, 6 and 7 were cast in a distinct form. This sets them apart and rendered Exclusion 7 insusceptible of a notional anticipatory and completed operation to disengage Extension 9 in the manner asserted by GIO. The construction of the Policy should be preferred which leads to an answer that GIO was not free of any obligation to indemnify the appellant under Extension 9, on a basis located in Exclusion 7. No doubt, where possible, courts should endeavour to give the same construction to commercial instruments used in various jurisdictions12. The appellant sought to bolster his case by reference to a body of authority in the 12 McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579 at 601 [74]. McHugh Kirby United States13 in which policies having some resemblance to that in question here were construed favourably to the case for the plaintiff insured. However, a different emphasis in approach to construction of contracts generally, and insurance contracts in particular14, and an apparent lack of identity between significant features of the policies, make it unsafe to attempt to strengthen the conclusion already reached in these reasons by reliance upon those materials. In the conclusion which we have reached, it is unnecessary. The most that can be said about the results of the United States authorities is that they support upholding the commercial purpose of this form of policy which is, relevantly, to afford assistance with defence costs when an insured is faced by allegations of wrongdoing, including criminal wrongdoing. The terms of Exclusion 7 ("in fact") are compatible with that commercial purpose. It would require clearer exclusionary language than appears to deprive the Insured of the benefit of the Policy for which the premium has been paid. Orders The appeal should be allowed with costs. Order 2 of the Supreme Court entered 2 July 2004 should be set aside and in place thereof it should be ordered that "[t]he question be answered 'No'". Costs of, and related to, the determination of the question in the Supreme Court should be paid by the respondents. 13 Including Pepsico Inc v Continental Casualty Company 640 F Supp 656 (1986); Little v MGIC Indemnity Corporation 836 F 2d 789 (1987); National Union Fire Insurance Company of Pittsburgh v Brown 787 F Supp 1424 (1991). 14 For example, in Little, the Court of Appeals for the Third Circuit recorded as basic principles of Pennsylvania law respecting construction of insurance policies that a policy which, viewed as a whole, is reasonably susceptible to more than one interpretation is ambiguous, and any such ambiguity must be resolved against the insurer. Callinan CALLINAN J. This Court (Gleeson CJ, McHugh, Gummow, Kirby, Hayne and Heydon JJ, Callinan J dissenting) in Andar Transport Pty Ltd v Brambles Ltd15 recently reaffirmed the vitality of the contra proferentem rule in a case relating to the construction of an indemnity clause16. Self-evidently policies of insurance are contracts of indemnity and indeed the rule has always had a special role to play in insurance cases17. In their judgment Gleeson CJ, McHugh, Gummow and Kirby JJ have said that counsel for the appellant prudently eschewed any recourse to the contra proferentem rule for the interpretation of this policy which had been agreed between parties all of whom were in the business of insurance18. With respect, I am not so sure that this is so even though the appellant himself and the organization of which he was a director or officer were involved in the business of insurance. Although no doubt the genesis of the rule lies in a concern for the disadvantages and rights of the less than highly literate, it has over time become a rule of general application in insurance cases without regard to the standard of literacy, or the commercial, or the legal sophistication of the insured. That a high level of literacy and sophistication of either kind would in any event provide no armour against the obscurities of this policy appears clearly enough from the differences in reasoning and conclusions between this Court and the court below, and the most careful and elaborate analysis in which Gleeson CJ, McHugh, Gummow and Kirby JJ have been obliged to engage to make sense of it. There is a further reason to support their Honours' conclusions. It is that the adoption of the construction for which the respondents contend would mean that in a real and practical sense they would become the final arbiters of the extent of their obligations because their insureds will frequently lack the means to defend themselves adequately against the charges levelled against them unless they are put in funds to do so. It would not have been a difficult matter for the respondents to have insisted upon a policy that put beyond doubt their right to 15 (2004) 78 ALJR 907; 206 ALR 387. 16 (2004) 78 ALJR 907 at 913 [23]; 206 ALR 387 at 396. 17 Provincial Insurance Co Ltd v Morgan [1933] AC 240 at 251-253. As Lord St Leonards said in Anderson v Fitzgerald (1853) 4 HL Cas 484 at 510 [10 ER 551 at 561]: "A policy ought to be so framed, that he who runs can read." 18 See reasons for judgment of Gleeson CJ, McHugh, Gummow and Kirby JJ at [16]- Callinan postpone payment of defence costs until the outcome is known had they so wished. Subject to these matters I agree with the reasons and conclusions of Gleeson CJ, McHugh, Gummow and Kirby JJ.

HIGH COURT OF AUSTRALIA ALINTA LGA LIMITED (FORMERLY THE AUSTRALIAN GAS LIGHT COMPANY) & ANOR APPELLANTS AND MINE SUBSIDENCE BOARD RESPONDENT Alinta LGA Limited (Formerly The Australian Gas Light Company) v Mine Subsidence Board [2008] HCA 17 24 April 2008 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of New South Wales Representation J T Gleeson SC with J R Williams for the appellants (instructed by Freehills) M J Leeming SC with S J Free for the respondent (instructed by Crown Solicitor (NSW)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Alinta LGA Limited (Formerly The Australian Gas Light Company) v Mine Subsidence Board Statutes – Interpretation – Mine Subsidence Compensation Act 1961 (NSW) ("the Subsidence Act") – Appellants claimed compensation from statutory fund for cost of works to prevent damage to pipeline from subsidence – Pursuant to s 15(5)(b) "no claim shall be entertained or payment made" where improvement erected without approval unless certificate is issued – Respondent Board found pipeline erected without approval and refused to issue certificate or entertain claim – Section 12B(b) conferred right of appeal to Land and Environment Court against "the decision of the Board as to the amount of the payment from the Fund" – Whether refusal of Board to entertain claim in absence of jurisdictional facts appealable under s 12B(b) or subject only to judicial review in Supreme Court. Courts and judicial system – Jurisdiction – Land and Environment Court – Appeals – Class 3 – Sections 16 and 19(fl) of the Land and Environment Court Act 1979 (NSW) conferred jurisdiction to hear and determine appeals under s 12B of the Subsidence Act – Whether jurisdiction to hear and determine appellants' appeal against Board's decision – Relevance of breadth of powers under s 39(3) to conduct de novo rehearing. Words and phrases – "amount", "appeal", "jurisdictional facts", "no claim shall be entertained or payment made". Land and Environment Court Act 1979 (NSW), ss 16, 19(fl), 39. Mine Subsidence Compensation Act 1961 (NSW), ss 12B, 15(5)(b). GUMMOW, HAYNE, HEYDON, CRENNAN AND KIEFEL JJ. The Appin Mine Subsidence District was proclaimed under s 15(1) of the Mine Subsidence Compensation Act 1961 (NSW) ("the Subsidence Act") on 20 March 19681. Located within that district are the Appin and West Cliff Collieries. Between May 1998 and July 2003, coal was extracted by a third party from longwalls in these collieries. AGL Gas Networks Limited owned the Wilton to Horsley Park natural gas pipeline ("the Pipeline") at that time. It had acquired the Pipeline in 1985 from The Australian Gas Light Company. The Pipeline was built in or around 1975 and passes through the Appin Mine Subsidence District. The Australian Gas Light Company is now styled Alinta LGA Limited (the first appellant) and AGL Gas Networks Limited is now styled Alinta AGN Limited (the second appellant). It is convenient to refer to the appellants collectively as Alinta. Alinta alleges that the extractions between May 1998 and July 2003 caused subsidence to occur in the vicinity of the Pipeline and that it undertook preventative and mitigatory works to prevent damage to the Pipeline as a result of that subsidence. Alinta claims that the works cost $2,392,229.29. Section 10(1) of the Subsidence Act establishes a Mine Subsidence Compensation Fund ("the Fund"). The Fund is under the direction and control of the respondent, the Mine Subsidence Board ("the Board") (s 10(4)). Sections 12 and 12A establish a scheme for the payment from the Fund of compensation for damage to improvements caused by subsidence, of amounts to meet the expense of preventing or mitigating such damage and of compensation for damage caused by the Board carrying out certain works. "Improvement" is defined by s 4 to include any building or work erected or constructed on land and, relevantly to this appeal, any pipeline. The litigation which has reached this Court stems from the treatment by the Board of a claim made by Alinta on 28 September 2004. Alinta made a claim for compensation from the Fund in the sum of $2,392,229.29. By letter dated 14 October 2005, the Board informed Alinta that the claim could not be entertained by reason of s 15(5)(b) of the Subsidence Act. This states that "no claim shall be entertained or payment made under [the Subsidence Act]" in the circumstances there described. It will be necessary to set out the text of s 15(5)(b) in full later in these reasons. It is sufficient now to note that the In their submissions the appellants identified the source of the proclamation in legislation which in fact had been repealed in 1961 by s 2 of the Subsidence Act. Crennan consequence of the Board's refusal to entertain Alinta's claim was that no payment of compensation from the Fund was made. Alinta filed an application in the Land and Environment Court of New South Wales ("the LEC") on 10 February 2006. The application was identified as an "[a]ppeal under s 12B of [the Subsidence Act] against the decision of [the Board] as to non-payment from the Fund". Section 12B of the Subsidence Act states: "A person claiming compensation under section 12 or 12A may appeal to [the LEC] against the decision of the Board: as to whether damage has arisen from subsidence or could reasonably have been anticipated, or as to the amount of the payment from the Fund." The Board sought to defend the application by contending that the LEC did not have jurisdiction to hear and determine the application for two reasons. The first was that the impugned decision was not a decision refusing a claim under s 12 or s 12A. The second was that, in any event, the Board had not made any decision as to the matters specified in pars (a) and (b) of s 12B. The primary judge (Biscoe J) identified as a preliminary question2: "whether [the LEC] has jurisdiction to hear and determine the application filed by [Alinta] on 10 February 2006". His Honour directed that the preliminary question be determined separately and subsequently ordered that it be answered "yes". At issue in this appeal from the Court of Appeal of the Supreme Court of New South Wales (Tobias JA and Handley AJA, Hodgson JA dissenting)3 is whether that answer to the preliminary question was correct. On appeal by the Board, a majority of the Court of Appeal reached the opposite conclusion and ordered that the preliminary question be answered "no". Alinta seeks the reinstatement by this Court of the affirmative answer given by Biscoe J. For the reasons which follow the appeal to this Court by Alinta should be dismissed. 2 Australian Gas Light Co v Mine Subsidence Board (2006) 147 LGERA 433 at 436. 3 Mine Subsidence Board v Australian Gas Light Company (2007) 152 LGERA 73. Crennan No question arises in this appeal as to the merits of Alinta's claim to compensation or the correctness of the Board's decision. The preliminary question concerns the construction of s 12B of the Subsidence Act and the jurisdiction of the LEC to hear and dispose of appeals under that provision. The starting point in this regard is the Land and Environment Court Act 1979 (NSW) ("the LEC Act"). The LEC Act The LEC is constituted by s 5 of the LEC Act. It is a superior court but of limited jurisdiction. Section 16 of the LEC Act provides: [The LEC] shall have the jurisdiction vested in it by or under this or any other Act. (1A) [The LEC] also has jurisdiction to hear and dispose of any matter not falling within its jurisdiction under any other provision of this Act or under any other Act, being a matter that is ancillary to a matter that falls within its jurisdiction under any other provision of this Act or under any other Act. For the purposes of this Act, the jurisdiction of [the LEC] is divided into 7 classes, as provided in this Division." Of the seven classes of jurisdiction referred to in s 16(2), it is the third class that is relevant to this appeal. Class 3 of the LEC's jurisdiction is titled "land tenure, valuation, rating and compensation matters" (s 19). Pursuant to s 19(fl), the matters within Class 3 of the LEC's jurisdiction include jurisdiction to hear and dispose of "appeals under section 12B of [the Subsidence Act]". The powers of the LEC when hearing and disposing of appeals in Class 3 of its jurisdiction are described by s 39. They include the following. First, in accordance with s 39(3), the "appeal" is conducted by way of a de novo rehearing; fresh evidence or evidence in addition to, or in substitution for, the evidence given on the making of the decision under appeal may be received. Secondly, for the purposes of hearing and disposing of the "appeal", the LEC has all the functions and discretions which the person or body whose decision is under appeal had in respect of "the matter the subject of the appeal" (s 39(2)). Thirdly, the decision of the LEC on the "appeal" is deemed, where appropriate, to be the final decision of the relevant person or body and shall be given effect accordingly (s 39(5)). Proceedings in Class 3 of the LEC's jurisdiction are Crennan conducted with as little formality and technicality as possible (s 38(1)). The LEC is not bound by the rules of evidence (s 38(2)) and may obtain the assistance of other persons (s 38(3)), such as an assessor. Alinta relies on the breadth of the LEC's powers under s 39 of the LEC Act to hear and dispose of appeals under s 12B of the Subsidence Act by way of a de novo rehearing. It submits that such a proceeding is an appeal in name only, and that the proceeding is in truth an original proceeding for a determination of the claimant's entitlement to payment from the Fund where the LEC is given by s 39(2) of the LEC Act all the functions and discretions of the Board. While s 39 grants the LEC powers and discretions that provide, in effect, for a full merits review4, those powers and discretions are only conferred in respect of an "appeal" as defined by the section5. Section 39(1) defines "appeal" when used in s 39 to mean: "an appeal, objection, reference or other matter which may be disposed of by the Court in proceedings in Class 1, 2 or 3 of its jurisdiction". (emphasis added) Whether Alinta's application may be so characterised turns on the construction and application of s 12B of the Subsidence Act as no other matter arising under the Subsidence Act is included in Class 1, 2 or 3 of the jurisdiction of the LEC. This requires an understanding at the outset of the legislative scheme in which s 12B is located and the jurisdiction of the Board to make "decisions" of the kind referred to in s 12B. An examination of the provisions of the Subsidence Act discloses an accommodation, on particular terms, between the interests of colliery proprietors and the owners of damaged improvements. The nature of that accommodation appears only from analysis of complex provisions of the statute. It is necessary to undertake that analysis for an appreciation of the issues on this appeal. cf Administrative Appeals Tribunal Act 1975 (Cth), s 43(1); Australian Securities and Investments Commission v Donald (2003) 136 FCR 7 at 13-14. 5 See Dwyer v Calco Timbers Pty Ltd [2008] HCA 13 at [2]. Crennan The Board and the Fund Section 5(1) constitutes the Board. It is a body corporate capable of suing and being sued in its corporate name (s 6(1)). Its functions and duties include directing and controlling the Fund (s 10), collecting the contributions of colliery proprietors (s 11), investigating and determining claims for compensation (ss 12 and 12A), purchasing damaged improvements and effecting remedial works (s 13), carrying out preventative or mitigatory works (s 13A) and determining approvals and certifications (ss 15 and 15B). The Board consists of the Director-General of the Department of Primary Industries or a member of staff of that Department as chairperson (s 5(2)(a)), the Chief Inspector of Coal Mines (s 5(2)(b))6 and four persons appointed by the Governor (s 5(2)(c)). The persons appointed by the Governor must include a representative of the colliery proprietors (s 5(2)(c)(i)) and a person nominated by the Minister to represent improvement owners within mine subsidence districts (s 5(2)(c)(iii)). The composition of the Board is illustrative of the balance the Subsidence Act seeks to strike between the interests of the colliery proprietors and the owners of improvements within a mine subsidence district. The Fund consists of the contributions of colliery proprietors (s 10(2)(b)) and certain other sums (s 10(2)(a), (c) and (d)), such as interest accruing from the investment of moneys in the Fund (s 10(2)(c)). Colliery proprietors are obliged to make contributions to the Fund in accordance with s 11(1A), (1B) and (1C) and the amount so calculated is deemed a debt due to the Crown and recoverable by the Board (s 11(8)). The statutory quid pro quo for the contributions of colliery proprietors to the Fund lies in s 14(1) of the Subsidence Act. Provided the proprietor of a colliery holding is not in arrears with contributions (s 14(1)(a)) and observes operational covenants of the kind described by s 14(1)(b), the proprietor "shall not be liable for any damage to improvements or household or other effects occasioned by subsidence" (s 14(1)). This statutory immunity is stated not to extend to relieve the liability of a proprietor for damage caused by subsidence due to negligence (s 14(2)). Alinta submitted that s 14(1) would displace the 6 By force of amendments to s 5(2)(b) commencing after the filing of Alinta's application in the LEC, now a person nominated by the Minister who has appropriate expertise in coal mine operations. Crennan liability of a proprietor under the tort of nuisance; it is unnecessary to determine whether that is so. Claims for payment from the Fund Compensation is paid out of the Fund (s 10(3)(a)). There are two species of claim on the Fund, one in respect of damage (s 12) and the other for preventative or mitigatory works (s 12A). These will now be considered in turn. Section 12(1) provides for the making of claims for payment from the Fund of compensation for damage caused by subsidence. The key provision is par (a) of that sub-section. This states that claims may be made for payment from the Fund of: "compensation for any damage to improvements that arises from subsidence, except where the subsidence is due to operations carried on by the owner of the improvements". Claims may also be made for payment from the Fund of an amount to meet the expenses incurred in undertaking certain works (s 12(1)(b)) and an amount equivalent to lost rent where premises are untenantable or "such sum in lieu of rent as the Board deems just" where all or part of any building or work is occupied (s 12(1)(c)). "Household or other effects" are defined by s 4 and compensation for damage to such effects that arises from subsidence may also be claimed, save where subsidence is due to the owner's operations (s 12(1)(d)). The procedure for making claims for payment from the Fund under s 12(1) is laid out in par (a) of s 12(2): the owner of an improvement, household or other effect damaged by subsidence may notify the Board of the details of such damage, the location of the improvement damaged, the description of the effect damaged, the amount claimed from the Fund, and such other particulars as may be prescribed; that notification is then treated as a claim for payment from the Fund; the notification must be in a form approved by the Board and within the time limit prescribed by the regulations7. 7 At the time of Alinta's claim, reg 6 of the Mine Subsidence Compensation Regulation 2002 (NSW) imposed a 12 month time limit (subject to extension by the Board in certain circumstances) by reference to the day on which the owner knew, or the Board determined the owner should have known, that damage was caused by subsidence. Regulation 6 of the Mine Subsidence Compensation Regulation 2007 (NSW), now in force, is to the same effect. Crennan The obligations of the Board to investigate, report and make a decision on the claim are specified in par (b) of s 12(2). The notification: "shall be recorded and investigated by the Board, an officer of the Board or some other officer in the Public Service acting for the Board and on receipt of a report of such investigation the matter shall be placed before a meeting of the Board for a decision as to the payment, if any, to be allowed in respect of the damage to which such notification relates". This is an important provision in the statutory scheme and must be read with s 8. For the purpose of exercising and discharging its powers, authorities, functions and duties under the Subsidence Act, s 8 grants the Board and the chairperson of the Board the powers, authorities, protections and immunities conferred on Royal Commissioners and the chairperson of a Royal Commission respectively by Div 1 of Pt 2 of the Royal Commissions Act 1923 (NSW). These powers include, for example, the power to summon persons to give evidence on oath or affirmation and produce any document or other thing8. The powers afforded to individual members of the Board by s 16 include the power to make inspection, examination and inquiry as may be necessary to ascertain the nature and extent of any damage to property and to ascertain whether the provisions of the Subsidence Act have been complied with (s 16(1)). Section 16(1A) confers a power of entry upon any land, subject to the conditions respecting entry into dwelling houses (s 16(1B)) and the giving of notice to occupiers of land (s 16(1C)). We turn to the second species of compensation claim. The right to claim compensation for certain preventative or mitigatory works derives from par (b) of s 12A(1) of the Subsidence Act. This provides: "(1) Subject to this section, claims may be made under this Act for payment from the Fund of: an amount to meet the proper and necessary expense incurred or proposed by or on behalf of the owner of improvements or household or other effects in preventing or mitigating damage to those improvements or household or 8 Royal Commissions Act 1923 (NSW), ss 8 and 9. Crennan other effects that, in the opinion of the Board, the owner could reasonably have anticipated would otherwise have arisen, or could reasonably anticipate would otherwise arise, from a subsidence that has taken place, other than a subsidence due to operations carried on by the owner." Compensation to recover damage incurred as a result of the Board exercising its powers to undertake preventative or mitigatory works may also be claimed under par (a) of s 12A(1). Pursuant to s 13A, the Board may carry out "such works as, in its opinion, would reduce the total prospective liability of the Fund by preventing or mitigating damage" of the kind described in the section. Claims made under s 12A(1) must specify the particulars required by s 12A(2)(c) and (d) and be made within the time limit prescribed by s 12A(2)(a) and (b). Once such a claim is made, s 12A(3) relevantly provides that: "The provisions of section 12(2)(b) … shall, mutatis mutandis, apply to and in respect of claims and payments under this section in the same manner as they apply to and in respect of notifications and payments under section 12." It follows that, in dealing with a claim made under s 12A(1) of the Subsidence Act, the Board has the same functions and duties earlier described and is charged with the function of dealing with the claim in accordance with par (b) of s 12(2), to which reference has been made above. Necessary approvals and certification The statute also imposes obligations upon the owners of improvements and those effecting improvements. Observance of those obligations assists the interests of the colliery proprietors. That observance is encouraged by provisions denying the competency of claims to compensation from the Fund to which the colliery proprietors are required to contribute. It is an offence for a person to do or cause to be done any work in connection with the erection or alteration of an improvement within a subsidence district without the Board's approval or in disconformity with such approval as is given (s 15(7)). It is also an offence for a person to subdivide or cause to be subdivided any land within a subsidence district without approval of the Board (s 15(8)). It is the former offence (s 15(7)) that is relevant to this appeal. Crennan Three possible consequences flow from a contravention of s 15(7) of the Subsidence Act. First, there may be a prosecution under s 17, provided proceedings to prosecute are brought within 12 months of commission of the offence (s 15(10)). The maximum penalty is 20 penalty units. Secondly, where any improvement has been erected or altered in contravention of the section, a purchaser may cancel a contract for sale and recover any deposit paid together with reasonable costs and expenses (s 15(5)(a)). The reason why a purchaser might wish to do so becomes apparent when one has regard to the third possible consequence of a contravention. This is provided by s 15(5)(b). Read together with s 15(7), s 15(5)(b) relevantly provides that where an improvement has been altered or erected without the approval of the Board, "no claim shall be entertained or payment made under [the Subsidence Act] in respect of damage caused by subsidence" unless a certificate is issued under s 15B(3A). Such certificates take their place in the scheme of the Subsidence Act as follows. A contravention of s 15(7) of the Subsidence Act may be avoided by a person applying to the Board for its approval to alter or erect improvements in the form required by s 15(2A). The Board may grant its approval conditionally or unconditionally (s 15(3)) and certificates of compliance in respect of that approval may be obtained under s 15B. A certificate of compliance is deemed to be conclusive evidence that the requirements of the Subsidence Act relating to an improvement have been complied with up to the date of the certificate (s 15B(4)). The rationale of the certification regime was explained by the then Minister for Minerals and Energy in the second reading speech upon the Bill for what became the Mine Subsidence Compensation (Amendment) Act 1989 (NSW) ("the 1989 "The community is protected by certificates issued by the [B]oard … I am aware … of recent cases where members of the community have suffered financial loss because of the action of previous owners in failing to obtain the [B]oard's approval for erection or alteration of improvements ..." So far as material, the Subsidence Act provides for the issue of compliance certificates in two circumstances. The first is found in s 15B(3): where the Board is satisfied that an improvement was erected in accordance with the Board's approval and an application for certification is made in the form required by s 15B(2), the Board shall issue a certificate in respect of the relevant 9 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 19 September 1989 at 10127-10128. Crennan improvement. Secondly, if the Board is satisfied that an improvement would have met the requirements of s 15B(3) had the Board's approval been obtained (s 15B(3A)(a)), and it is appropriate having regard to the circumstances of the case to do so (s 15B(3A)(b)), the Board "may" issue a certificate under s 15B(3A). Section 15B(3A) was inserted into the Subsidence Act by the 1989 Act10. Read together with s 15(5)(b), the effect of an exercise by the Board of its discretion to issue a s 15B(3A) certificate is to enable the Board to entertain a claim in respect of damage caused by subsidence notwithstanding that an improvement was constructed or altered without contravention of s 15(7). The objective of the insertion of s 15B(3A) is explained in the Explanatory Note to the Bill for the 1989 Act. The note gives as an aim of the Bill: its approval and to extend the compensation provisions to improvements ... that have met all requirements except prior approval". It is now appropriate, with the statutory scheme in mind, to return to the facts and circumstances of this appeal. The application for a s 15B(3A) certificate Alinta applied for a "[c]ertificate under s 15B" in relation to the Pipeline in a letter to the Board dated 23 April 2003. No distinction was drawn in that letter between the two limbs of s 15B on which such a certificate might issue. Alinta asserted as the basis for its application that the Pipeline was constructed in compliance with the Pipelines Act 1967 (NSW) ("the Pipelines Act") and that Alinta had been granted a licence by the Governor and had the consent of the Minister for Mines to operate. At that time, the Minister for Mines was also responsible for administering the Subsidence Act. No point has been taken at any stage in these proceedings as to the interaction (if any) between the Pipelines Act and the Subsidence Act or the statutory relationship (if any) between any licence granted to Alinta under the Pipelines Act and the requirement for approval under s 15 of the Subsidence Act. Nor has either party referred at any stage to any relevant Commonwealth legislation. 10 Schedule 1, Item 9. Crennan In further correspondence to the Board dated 24 March 2004, Alinta asked the Board to treat "this letter, and our previous correspondence, as an application" for a "section 15B(3A) certificate" for that part of the Pipeline which traversed the Appin Mine Subsidence District. The letter asserted, as the basis for the application: "It is clear … that [the Board] would have given the requisite approval to [Alinta] (assuming for these purposes only, because of the lack of records both within [Alinta] and [the Board], that no such approval was in fact sought or given at the time)." The Board informed Alinta of its refusal to issue a certificate under s 15B(3A) by letter of the Secretary dated 29 July 2005. The Secretary stated with reference to s 15B(3A)(b) that the Board was not satisfied that it was appropriate to issue a certificate in the circumstances. The reasons given for the Board's lack of satisfaction included Alinta's "failure to obtain approval" at the time of construction of the Pipeline, delay in applying for certification, and the Board's belief that: "Issue of a certificate under s 15B(3A) will mean the entertainment and payment of a compensation claim from [Alinta] under [the Subsidence Act] is not precluded by operation of s 15(5)(b)". Alinta took issue with that interpretation by further letter to the Board dated 28 September 2005. Alinta asserted that: "[S]ection 15(5)(b) of the Act refers only to payments in respect of 'damage caused by subsidence'. This wording is the same as the wording used in section 12 of the Act and clearly differs from the wording used in section 12A of the Act. That latter section refers to 'damage … that … the owner could have reasonably anticipated would otherwise have arisen'. On this basis, section 15(5)(b) of the Act: precludes payments under section 12 of section 15B(3A) Certificate has been issued; but the Act unless a does not preclude payments under section 12A of the Act if no such certificate has been issued." Alinta's letter of 28 September 2005 also pressed the Board to reconsider its decision to refuse to grant a s 15B(3A) certificate. The Board responded to Crennan these matters when dealing with Alinta's claim for compensation on 14 October The application for compensation Alinta applied to the Board for compensation from the Fund on 28 September 2004, before the Board's decision to refuse its application for certification. The amount of the claim was specified as $2,392,229.29, being the costs of the mitigatory works that Alinta allegedly undertook to prevent damage to the Pipeline that would otherwise have arisen because of subsidence. Although the initial claim drew no distinction between ss 12 and 12A of the Subsidence Act, it was later particularised by reference to both those provisions. By the letter of 14 October 2005, under the hand of the Secretary, the Board informed Alinta of its decision to refuse to entertain Alinta's claim to compensation. The letter stated that the Board did not propose to reconsider its refusal to issue a s 15B(3A) certificate and that: "Given the Board's decision to refuse to issue a certificate, [Alinta's] claims under ss 12(1) and 12A(1)(b) of [the Subsidence Act] cannot be entertained, by reason of s 15(5)(b)." The letter then set out the following additional observations: "Your comments on the application of s 15(5)(b) to s 12A(1)(b) in your letter of 28 September 2005 are noted. However, the Board respectfully disagrees with your interpretation of s 15(5)(b). Insofar as [Alinta] claims compensation from the [F]und with respect to expenses incurred to prevent damage that might otherwise have arisen had anticipated subsidence occurred, I draw the following matters to your attention. The key provisions of the Act regarding compensation for damage arising from subsidence (s 12) and the recovery of expenses incurred in preventing or mitigating damage that would otherwise arise from subsidence (s 12A) apply only in respect of subsidence that has taken place. Those sections do not provide for the owner of an improvement to recover expenses incurred in preventing or limiting the damage that might be caused by anticipated subsidence … It is the Board's view that the only way in which a claim may be made with respect to expenses for works to prevent damage that might otherwise Crennan have arisen had anticipated subsidence taken place is through the operation of s 13A." (original emphasis) It was that additional commentary which founded the primary judge's affirmative answer to the preliminary question. Biscoe J accepted that, by expressing the "view" that ss 12 and 12A did not provide for the recovery of expenses incurred in connection with "anticipated subsidence", the Board had made a decision "as to whether damage has arisen from subsidence or could reasonably have been anticipated" within the meaning of s 12B(a) of the Subsidence Act. It followed that his Honour found that the LEC had jurisdiction to hear and dispose of an appeal against that decision (s 16(1) of the LEC Act) and matters ancillary to it (s 16(1A) of that statute). The matters his Honour considered to be within the ancillary jurisdiction included the Board's decisions to refuse to issue a s 15B(3A) certificate and to refuse to entertain Alinta's claim to compensation. The appeal to this Court It is no longer contended by Alinta that the Board's "view" as to "anticipated subsidence" as expressed in the letter of 14 October 2005 was a decision "as to whether damage … could reasonably have been anticipated" within s 12B(a) of the Subsidence Act. Each of the members of the Court of Appeal concluded that the primary judge erred in so finding11. No complaint is made by Alinta as to their Honours' conclusion in that respect. Nor does Alinta now contend that the refusal of the Board to issue Alinta with a s 15B(3A) certificate involved a decision as to the matters specified in s 12B(a) or (b) of the Subsidence Act. At issue in this Court is whether the Board's refusal to entertain Alinta's claim to compensation was a decision against which an appeal lay to the LEC under s 12B(b) of the Subsidence Act. The majority in the Court of Appeal concluded that a decision as to "the amount of the payment from the Fund" under s 12B(b) is a decision that determines the quantum of compensation to be paid from the Fund and that the Board's refusal to entertain Alinta's claim by reference to s 15(5)(b) could not be so characterised. 11 (2007) 152 LGERA 73 at 78 per Hodgson JA, 97 per Tobias JA and 99 per Handley AJA. Crennan Alinta's fundamental contention before this Court is that any decision of the Board which has the legal effect that there be no payment from the Fund engages the right of appeal in s 12B(b), and that this is so however that decision is reached. That proposition was adopted by Hodgson JA in his dissenting reasons. His Honour considered there were 10 issues which might arise for determination on a claim for payment from the Fund and stated that he could see no reason why the legislature would permit an appeal in respect of some (but not other) issues "if that decision results in a nil award"12. The contention advanced by Alinta should be rejected as contrary to the text and scheme of the Subsidence Act. "No claim shall be entertained" The Subsidence Act adopts the expression "no claim shall be entertained or payment made under [the Subsidence Act]" in two provisions. The first is the penultimate paragraph of s 12(1), which refers to the earlier legislation, the Mine Subsidence Act 1928 (NSW) ("the 1928 Act"), and provides13: "No claim shall be entertained or payment made under this Act in respect of any improvement which was the subject of a conditional right to insure granted under section 16 of [the 1928 Act] unless the conditions of such conditional right have been, and are at the date of making such claim, complied with, or, where such conditions have not been or are not being so complied with, unless the Board is satisfied that any departure from or contravention of such conditions is such that it need not be rectified." The second provision is s 15(5)(b), summarised earlier in these reasons. Section 15(5) states: 12 (2007) 152 LGERA 73 at 76. 13 The 1928 Act established a different scheme whereby owners of improvements paid a premium for certificates of insurance against damage caused by subsidence (ss 4(1) and 5(2)) and the Board determined claims against that insurance (s 10(1)). Section 16(1) of the 1928 Act forbad owners of land within a subsidence district to alienate any portion of their land in subdivision unless an application for insurance in respect of improvements had first been made to the Board, which insurance could be granted unconditionally or conditionally (s 16(3)). Crennan "Where any improvement has been erected or altered or subdivision has been made in contravention of this section: no claim shall be entertained or payment made under this Act in respect of damage caused by subsidence to any such improvement or to any improvement upon land within any such subdivision, unless a certificate is issued under section 15B(3A) in respect of the improvement or land." The language of "entertain" and "payment" is also found in s 12(1A) of the Subsidence Act. Section 12(1A) relevantly provides that the Board "may refuse to entertain a claim, or make a payment" where improvements or household or other effects were used in extractive industries or operations and the Board is satisfied that the relevant subsidence was caused by the carrying on of that industry or operation. Alinta submitted that the use of "may" in s 12(1A) is akin to that discussed in Leach v The Queen14 and confers no discretion on the Board as to whether it should refuse to entertain a claim or make a payment in such circumstances. It may be assumed, without deciding, that this analysis is correct. Alinta characterises the Board's refusal to entertain its claim to compensation as a "decision" made under s 12(2)(b) that "no payment be made from the Fund in the absence of a s 15B(3A) certificate". That decision of "no payment" is said to be a decision "as to the amount of the payment from the Fund" for the purposes of s 12B(b) of the Subsidence Act. However, in this characterisation there is implicit a misunderstanding of the decision-making process mandated by the provisions just described and by s 15(5)(b) in particular. Section 15 manifests a policy that the alteration or erection of improvements within a mine subsidence district should only take place with the Board's approval. One of the means of giving effect to that policy is to place persons who contravene s 15 in a position where they are unable to recover compensation from the Fund in respect of damage caused by subsidence by force of s 15(5)(b), unless a certificate is issued under s 15B(3A). This object might readily have been achieved by stating "no payment shall be made under this Act", but the disjunctive phrase "no claim shall be 14 (2007) 230 CLR 1 at 17-18 [38]; [2007] HCA 3. Crennan entertained or payment made under this Act" is adopted in s 15(5)(b) (emphasis added). This provides a powerful textual indication that s 15(5)(b) curtails not just a claimant's entitlement to payment from the Fund, but also the Board's jurisdiction to investigate, report and make a decision as to the payment, if any, to be allowed under s 12(2)(b). In this regard, both Alinta and the Board accept that the words "under this Act" in s 15(5)(b) should be read as providing "no claim shall be entertained [under this Act] or payment made under this Act". The Board submits that s 15(5)(b) requires the Board to satisfy itself that the approval regime prescribed by s 15 has been complied with before exercising its extensive powers to investigate, report and determine claims for payment from the Fund under s 12(2)(b). This construction is explained by the statutory context. Expenses incurred by the Board in administering the Subsidence Act, including expenses incurred in investigating notifications of damage and claims for payment, are paid out of the Fund (s 10(3)(b)). Determining the cause and extent of damage in a claim for payment from the Fund may be complex and difficult, especially where (as here) the improvement concerned is a major underground that an However, where improvement was altered or erected in a mine subsidence district without the Board's approval and no certificate has issued under s 15B(3A), the words "no claim shall be entertained" take effect. They relieve the Board from incurring unnecessary costs investigating and determining whether damage has been caused by subsidence and the extent and quantum of such damage when, in any event, no payment could be made because there has been a contravention of s 15. the Board finds infrastructure. Subject to one additional matter, the Board's construction of s 15(5)(b) should be accepted. So construed, s 15(5)(b) presents jurisdictional facts upon which the exercise of the Board's powers under s 12(2)(b) to investigate and determine claims for compensation are conditioned15. In this case, the Board found that requisite facts presented by s 15(5)(b) (approval under s 15 or the issue of a certificate under s 15B(3A)) were not established. 15 R v Connell; Ex parte The Hetton Bellbird Collieries Ltd (1944) 69 CLR 407 at 430, 432; Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 at 650-654 [127]-[137]; [1999] HCA 21; Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540 at 609 [183]; [2002] HCA 54. Crennan Alinta has never conceded in this litigation that the Pipeline was erected without the Board's approval. Relevantly in this regard, Hodgson JA observed in the Court of Appeal that16: "If the Board erroneously decides that an improvement was erected otherwise than in accordance with an approval of the Board, and for that reason does not entertain an application, then presumably, unless s 12B applies, the claimant could seek an order in the nature of mandamus in the Supreme Court." In this Court, the Board did not seek to resist that suggestion. To the contrary, it accepted that no specific time limit applies to an application for orders in the nature of mandamus in the New South Wales Supreme Court17 and referred the Court to s 65 of the Supreme Court Act 1970 (NSW) ("the Supreme Court Act"). Section 65 confers powers on the Supreme Court to "order any person to fulfil any duty" (s 65(1)) and is a simplified procedure unencumbered by the technicalities which attend the issue of the writ of mandamus at common law18. The additional matter concerns Alinta's submission that s 15(5)(b) applies only to claims for payment made under s 12(1) and has no application to s 12A. That contention was summarised in Alinta's letter to the Board of 28 September 2005. This is reproduced in part earlier in these reasons. Alinta's claim was particularised there by reference to both ss 12 and 12A. However, it is unnecessary to determine whether s 15(5)(b) precludes the Board from entertaining claims made under s 12A in addition to its operation on claims made under s 12(1). That question might arise in proceedings for an order in the nature of mandamus, but does not arise here. The Board decided that it could not entertain Alinta's claim by reason of s 15(5)(b). Whether that decision was right or wrong, it will be seen that no decision was made as to the subject 16 (2007) 152 LGERA 73 at 77. 17 cf r 25.07.2 of the High Court Rules 2004 (Cth). As to the discretionary considerations that would apply at common law, see Bodruddaza v Minister for Immigration and Multicultural Affairs (2007) 228 CLR 651 at 667 [40]-[42]; [2007] HCA 14. 18 Dickinson v Perrignon [1973] 1 NSWLR 72 at 82-83; McBeatty v Gorman [1976] 2 NSWLR 560 at 564. Crennan matter referred to in s 12B and there arose no right of appeal to the LEC. We turn now to s 12B. Section 12B Section 12B is set out earlier in these reasons and repeated for convenience. The section provides: "A person claiming compensation under section 12 or 12A may appeal to [the LEC] against the decision of the Board: as to whether damage has arisen from subsidence or could reasonably have been anticipated, or as to the amount of the payment from the Fund." Three observations may be made about the text of s 12B. First, there must be a decision of the Board on a claim under ss 12 or 12A for the right of appeal provided by s 12B to be enlivened. The Board's decision on an application for approval under s 15 or certification under s 15B will not meet the statutory description called for by the section. It may thus be observed at the outset that not every decision of the Board will be the subject of an appeal to the LEC. The second observation is that the Board's decision on the claim must be a decision "as to" one of two classes of subject matter (identified in pars (a) and (b) of s 12B) for the right of appeal to be enlivened. The third observation is that the subject matter prescribed in pars (a) and (b) is identified and delimited by the language of ss 12 and 12A. This proposition is elucidated by a textual comparison. The disjunctive expression "arisen from subsidence or could reasonably have been anticipated" in par (a) corresponds to the language used to prescribe causal elements of claims under ss 12 and 12A respectively. Under s 12(1), compensation may be claimed for damage which "arises from subsidence" (s 12(1)(a) and (d)) (emphasis added). That language is adopted by the first limb of s 12B(a) which refers to a decision "as to whether damage has arisen from subsidence" (emphasis added). By way of example, the Board may decide on a claim under s 12(1)(a) that there is no damage or less damage than is claimed or that the relevant damage pre-existed the alleged subsidence or has some other cause. Those decisions would be decisions as to the subject matter identified by s 12B(a). Similarly, a claim may be brought under s 12A(1)(b) in respect of an amount to meet the expense of preventing or mitigating damage that, in the opinion of the Board, the owner Crennan could "reasonably have anticipated would otherwise have arisen, or could reasonably anticipate would otherwise arise" from a subsidence that has taken place (emphasis added). This language is reflected by the second limb of s 12B(a). This provides a right of appeal against a decision "as to whether damage … could reasonably have been anticipated". Pursuant to s 12B(a), an appeal lies to the LEC against the Board's decision as to that subject matter on a claim under s 12A. As to par (b) of s 12B, claimants under ss 12(1) or 12A(1) must specify the "amount claimed" from the Fund in their application (ss 12(2)(a) and 12A(2)(c)) (emphasis added). Sections 12(1)(b) and 12A(1)(b) confer the right to make a claim for an "amount to meet the proper and necessary expense" of undertaking certain works (s 12(1)(b)) or preventing or mitigating damage (s 12A(1)(b)) and s 12(1)(c) confers the right to make a claim for an "amount equivalent to the rent which would have been payable" (emphasis added). The Board may also reduce "the amount of compensation" where the damage caused by subsidence is greater because of the negligent or improper manner in which an improvement is constructed or maintained (s 12(1), ultimate paragraph) (emphasis added). The Board's decision as to the quantum of payment from the Fund pursuant to these provisions would be a decision "as to the amount of the payment from the Fund" within s 12B(b) of the Subsidence Act. The Board submits that, if a broader construction of s 12B(b) be accepted, s 12B(a) would be rendered redundant. This would be because any adverse decision by the Board on the question of causation which leads to the refusal of a claim and hence "no payment" or a reduced payment is appealable under s 12B(b). Hodgson JA recognised the force of this submission but observed that19: "It seems to me unlikely that the legislature intended that the availability of an appeal, and the availability or need to approach the Supreme Court, should depend upon capricious distinctions … so although there is force in the contention that a broad construction of s 12B(b) would render s 12B(a) otiose, I think the broad construction of s 12B(b) is preferable." However, there may be a number of reasons for the distinction drawn by the text of s 12B. One is that s 12B reflects an intention to limit the liability of 19 (2007) 152 LGERA 73 at 77. Crennan the Fund under s 10(3)(b) to the costs of a rehearing in the LEC on any decision of the Board that goes on appeal. Another is that the legislature left to the Board the determination of jurisdictional facts, subject to scrutiny only on judicial review in the Supreme Court. That state of affairs is more readily understood where, as here, the jurisdictional impediment was in the alleged absence of approval and the absence of a certificate respecting Alinta's improvement. On the other hand, the legislation left for determination by the LEC de novo such questions as the determination of causation and quantum of compensation in claims competently made against the Fund. The right of appeal to the LEC is restricted to appeals against decisions of the Board as to the subject matter identified in s 12B(a) and (b). The outcome of "no payment" in this case followed not from a decision as to either of those subject matters, but from the Board's application of the statutory requirement that no claim be entertained in the circumstances prescribed by s 15(5)(b). In these circumstances, there was no decision of the Board "as to the amount of the payment from the Fund" under s 12B(b) against which an appeal would lie to the LEC. The jurisdiction to hear and dispose of an appeal under s 12B of the Subsidence Act is not enlivened by Alinta's application. One final point may be noted. This concerns Alinta's reliance on the legislative history of the right of appeal under the Subsidence Act. Alinta referred the Court to the 1928 Act and the Subsidence Act as it stood before amendment to include s 12B. It is unnecessary to set out that history here. The submission raised essentially the same question as to construction and takes Alinta's case no further. Orders It follows that the answer to the preliminary question is "no". The appeal should be dismissed with costs.

HIGH COURT OF AUSTRALIA Matter No S27/2010 AND APPELLANT STATE RAIL AUTHORITY OF NEW SOUTH WALES KNOWN AS STATE RAIL RESPONDENT Matter No S28/2010 APPELLANT AND STATE RAIL AUTHORITY OF NEW SOUTH WALES KNOWN AS STATE RAIL RESPONDENT Wicks v State Rail Authority of New South Wales Sheehan v State Rail Authority of New South Wales [2010] HCA 22 16 June 2010 S27/2010 & S28/2010 ORDER In each matter order that: Appeal allowed with costs. Set aside the orders of the Court of Appeal of the Supreme Court of New South Wales made on 31 August 2009. Remit the matter to the Court of Appeal for further consideration in accordance with the reasons of this Court. The costs of the proceedings in the Court of Appeal to date, and the costs of the further proceedings in that Court, be in the discretion of that Court. On appeal from the Supreme Court of New South Wales Representation B J Gross QC with K O Earl for the appellant in both matters (instructed by Baker & Edmunds) J T Gleeson SC with P M Morris and B A Arste for the respondent in both matters (instructed by DLA Phillips Fox Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Wicks v State Rail Authority of New South Wales Sheehan v State Rail Authority of New South Wales Negligence – Duty of care – Personal injuries – Psychological and psychiatric injuries – Train derailment – Passengers killed and injured – Police officers who attended scene sued railway operator in negligence for psychological and psychiatric injuries – Whether police officers "witnessed, at the scene, [one or more persons] being killed, injured or put in peril" by railway operator. Words and phrases – "another person", "being killed, injured or put in peril", "foreseeability", "mental or nervous shock", "recognised psychiatric illness", "shocking event", "sudden shock", "victim", "witnessed at the scene". Civil Liability Act 2002 (NSW), ss 30, 32. FRENCH CJ, GUMMOW, HAYNE, HEYDON, CRENNAN, KIEFEL AND BELL JJ. At about 7.14 am on 31 January 2003, a passenger train operated by "State Rail"1 left the tracks at high speed near Waterfall Station, south of Sydney. Seven of the almost 50 people on the train died. Many others were injured, some very seriously. All four carriages of the train were very badly damaged. At the time of the accident, the appellant in each appeal (Mr Wicks and Mr Sheehan respectively) was a serving member of the New South Wales Police Force. In response to a radio message, Mr Wicks and Mr Sheehan were among the first to arrive at the scene, soon after the accident had happened. What confronted them was death, injury and the wreckage of the train. Because the overhead electrical cables had been torn down, and were lying across the wreckage, it was anything but clear whether it was safe to go close to the wreckage. Some of those on board had been thrown out of the train. Many remained in the wreckage. Mr Wicks and Mr Sheehan each forced his way into damaged carriages. Some passengers were so badly injured that they were obviously dead. Some passengers were trapped, evidently seriously injured, and very distressed. Mr Wicks and Mr Sheehan each did his best to relieve the suffering of the survivors and to get them to a place of safety. As further emergency workers arrived at the scene, Mr Wicks and Mr Sheehan each continued his rescue efforts and, later, undertook other tasks assigned at the scene. Each remained at the scene for a considerable time – Mr Wicks until about 4.00 pm; Mr Sheehan until about 2.00 pm. State Rail admits that it was negligent in the operation of the railway and of the particular train that derailed. 1 State Rail Authority of New South Wales, the party named as the respondent to each appeal, is said, in some of the papers in the appeal books in this Court, to be the successor to a corporation (Rail Corporation New South Wales known as Railcorp) that operated the train. Nothing was said to turn on any question of succession and the question need not be explored in these reasons. It is convenient to refer to the respondent to each appeal as "State Rail". Crennan Bell Mr Wicks and Mr Sheehan each alleges that he was injured as a result of being present at the crash site and what he witnessed there. Each pleaded, as particulars of the injuries he suffered: psychological and psychiatric injuries, post traumatic stress syndrome, nervous shock and major depressive disorder. The determinative issue The determinative issue in each appeal is whether, if State Rail owed the appellant a relevant duty of care, and if the appellant suffered a recognised psychiatric illness of which the negligence of State Rail was a cause, State Rail is liable to the appellant. All parties accept that resolution of this issue turns on the construction and application of Pt 3 (ss 27–33) of the Civil Liability Act 2002 (NSW) ("the Civil Liability Act"). The issue should be resolved in favour of the appellants, and each matter remitted to the Court of Appeal of New South Wales for its further consideration. To explain how the issue arises, and why it is necessary for this Court to leave the questions of duty of care, recognised psychiatric illness and causation undecided, something must be said about the history of the litigation in the courts below. Proceedings in the courts below Each appellant commenced an action against State Rail in the Common Law Division of the Supreme Court of New South Wales. Both actions were set down before Malpass AsJ for trial on the same day. The parties agreed that, in each action, issues of liability should be tried separately from issues of damages. The parties agreed that there were five issues in the case: "1. Did the defendant owe the plaintiff, a rescuer, a duty of care? Did the plaintiff witness, at the scene, victims of the derailment, being killed injured or put in peril, in accordance with section 30(2) of [the Civil Liability Act]? Did the plaintiff's attendance at the derailment cause him to suffer a recognised psychiatric illness? If so, what is the nature of that illness? 4. What is the plaintiff's entitlement to damages? Crennan Bell Are the plaintiff's damages to be reduced by reason of his employer's negligence in accordance with the provisions of section 151Z of the Workers Compensation Act 1987 (NSW)?" In accordance with the agreement to try liability separately from any necessary assessment of damages, trial of the fourth and fifth issues was postponed. At first liability was not established, and directed the entry of judgment in each action for the defendant. Appeals to the Court of Appeal of the Supreme Court of New South Wales (Beazley, Giles and McColl JJA) against those judgments were dismissed3. It is from the orders of the Court of Appeal that, by special leave, the appellants now appeal to this Court. that Both at first instance, and on appeal to the Court of Appeal, the answer to the second issue identified by the parties, concerning the application of s 30(2) of the Civil Liability Act, was treated as determinative of the liability of State Rail. Since its insertion into the Civil Liability Act by the Civil Liability Amendment (Personal Responsibility) Act 2002 (NSW), Pt 3 of the Civil Liability Act has remained unamended. Section 30(1)–(4) of the Civil Liability Act provides: "(1) This section applies to the liability of a person (the defendant) for pure mental harm to a person (the plaintiff) arising wholly or partly from mental or nervous shock in connection with another person (the victim) being killed, injured or put in peril by the act or omission of the defendant. The plaintiff is not entitled to recover damages for pure mental harm unless: the plaintiff witnessed, at the scene, the victim being killed, injured or put in peril, or the plaintiff is a close member of the family of the victim. 2 Wicks v Railcorp [2007] NSWSC 1346. 3 Sheehan v SRA (2009) Aust Torts Reports ¶82-028. Crennan Bell (3) Any damages to be awarded to the plaintiff for pure mental harm are to be reduced in the same proportion as any reduction in the damages that may be recovered from the defendant by or through the victim on the basis of the contributory negligence of the victim. (4) No damages are to be awarded to the plaintiff for pure mental harm if the recovery of damages from the defendant by or through the victim in respect of the act or omission would be prevented by any provision of this Act or any other written or unwritten law." Section 30(5) provides definitions of the expressions "close member of the family" and "spouse or partner" (an expression used in the definition of close member of the family). The outcome of the litigation was treated, both at trial and on appeal to the Court of Appeal, as turning upon whether Mr Wicks and Mr Sheehan "witnessed, at the scene, the victim being killed, injured or put in peril" within the meaning of s 30(2)(a). Both Malpass AsJ and the Court of Appeal concluded that neither appellant witnessed a victim or victims of the derailment "being killed, injured or put in peril". However, s 30(2) is drawn in negative terms, using the word "unless" to indicate the operation of the sub-section as an exception to, or reservation from, what otherwise would be the entitlement of the plaintiff. This use of "unless" appears also in ss 31, 32 and 33, to which further reference will be made. At first instance, Malpass AsJ concluded4 that it was unnecessary to consider the third issue identified by the parties: whether in either case the appellant's attendance at the derailment caused him to suffer a recognised psychiatric illness. His Honour noted5 that there had been no real dispute that Mr Wicks had suffered such an illness as a result of his exposure to the derailment, but that in Mr Sheehan's case there was a dispute about those matters. Although State Rail submitted that Malpass AsJ made findings which affect whether State Rail should be found to have owed each appellant a duty of [2007] NSWSC 1346 at [83]. [2007] NSWSC 1346 at [84]. Crennan Bell care, his Honour expressly refrained6 from deciding that issue. The Court of Appeal also expressly decided7 that it was not necessary to address that issue. To begin inquiries by asking whether s 30(2)(a) of the Civil Liability Act is engaged, without first deciding whether State Rail owed a duty to each appellant to take reasonable care not to cause him psychiatric injury, was to omit consideration of an important anterior question. To examine the content of the limitation on liability provided by s 30 without a proper understanding of the provisions affecting duty runs the risk of reading the limitation divorced from its statutory context. Part 3 of the Civil Liability Act Part 3 of the Civil Liability Act is entitled "Mental harm". That term is defined in s 27 to mean "impairment of a person's mental condition". Section 28(1) provides that Pt 3, except s 29, "applies to any claim for damages for mental harm resulting from negligence, regardless of whether the claim is brought in tort, in contract, under statute or otherwise". Section 28(2) provides that s 29 "applies to a claim for damages in any civil proceedings". Section 29 provides that: "In any action for personal injury, the plaintiff is not prevented from recovering damages merely because the personal injury arose wholly or in part from mental or nervous shock." The phrase "mental or nervous shock" is not defined. Neither the purpose of s 29, nor the reason for the differential treatment of that provision in the specification by s 28 of the application of Pt 3, is immediately apparent. It need not be decided whether s 29 applies to these cases. For the purposes of these matters, it is necessary to notice only that, by operation of s 28(1), the other provisions of Pt 3 apply to any claim for damages for mental harm resulting from negligence, and thus apply to each appellant's claim against State Rail. [2007] NSWSC 1346 at [63]. (2009) Aust Torts Reports ¶82-028 at 63,485 [78] per Beazley JA (Giles JA agreeing), 63,499 [164] per McColl JA. Crennan Bell Section 27 identifies two species of "mental harm": "consequential mental harm" and "pure mental harm". Consequential mental harm is defined as "mental harm that is a consequence of a personal injury of any other kind". Pure mental harm is defined as "mental harm other than consequential mental harm". The claims made by both Mr Wicks and Mr Sheehan are claims for damages for pure mental harm. Damages for economic loss for consequential mental harm resulting from negligence may not be awarded "unless the harm consists of a recognised psychiatric illness" (s 33). Section 31 provides that: "There is no liability to pay damages for pure mental harm resulting from negligence unless the harm consists of a recognised psychiatric illness." As noted earlier, no finding was made at trial, or on appeal, whether either Mr Wicks or Mr Sheehan suffers "a recognised psychiatric illness", or whether the negligence of State Rail was a cause of either appellant suffering such an illness. Section 32 is entitled "Mental harm – duty of care". It provides: "(1) A person (the defendant) does not owe a duty of care to another person (the plaintiff) to take care not to cause the plaintiff mental harm unless the defendant ought to have foreseen that a person of normal fortitude might, in the circumstances of the case, suffer a recognised psychiatric illness if reasonable care were not taken. For the purposes of the application of this section in respect of pure mental harm, the circumstances of the case include the following: (a) whether or not the mental harm was suffered as the result of a sudden shock, (b) whether the plaintiff witnessed, at the scene, a person being killed, injured or put in peril, the nature of the relationship between the plaintiff and any person killed, injured or put in peril, (d) whether or not there was a pre-existing relationship between the plaintiff and the defendant. Crennan Bell For the purposes of the application of this section in respect of consequential mental harm, the circumstances of the case include the personal injury suffered by the plaintiff. This section does not require the court to disregard what the defendant knew or ought to have known about the fortitude of the plaintiff." Because s 32 defines or controls what otherwise would be a duty of care arising at common law, it falls for consideration before the limitation upon entitlement to damages imposed by s 30(2). Consideration of the operation of s 32 (in particular sub-ss (1) and (2)) must begin from the observation that neither s 32 itself, nor any other provision of the Civil Liability Act (whether in Pt 3 or elsewhere), identifies positively when a duty of care to another person to take care not to cause mental harm to that other should be found to exist. Rather, like s 30(2), s 32(1) is cast negatively. It provides that a duty is not to be found unless a condition is satisfied. The necessary condition for establishment of a duty of care, identified by s 32(1), is that the defendant ought to have foreseen that a person of normal fortitude might, in the circumstances of the case, suffer a recognised psychiatric illness if reasonable care were not taken. The determination of whether the defendant ought to have foreseen mental injury to a person of normal fortitude must be made with regard to "the circumstances of the case". Section 32(2) identifies four kinds of circumstance to which regard should be had: whether the mental harm was caused by sudden shock, whether there was "witness[ing], at the scene," of certain types of event, what was the relationship between plaintiff and victim, and whether there was a relationship between plaintiff and defendant. But s 32 does not prescribe any particular consequence as following from the presence or absence of any or all of those circumstances. Section 32, taking the form it does, must be understood against the background provided by the common law of negligence in relation to psychiatric injury as stated by this Court in Tame v New South Wales8. Judgment in Tame was delivered on 5 September 2002; the provisions of Pt 3 of the Civil Liability Act were inserted in December 2002 by the Civil Liability Amendment (Personal Responsibility) Act 2002 (NSW). (2002) 211 CLR 317; [2002] HCA 35. Crennan Bell Tame held9 that in deciding whether, for the purposes of the tort of negligence, a defendant owed a plaintiff a duty to take reasonable care to avoid recognisable psychiatric injury, the central question is whether, in all the circumstances, the risk of the plaintiff sustaining such an injury was reasonably foreseeable. A majority of the Court in Tame rejected10 the propositions that concepts of "reasonable or ordinary fortitude", "shocking event" or "directness of connection" were additional pre-conditions to liability. In part, s 32 of the Civil Liability Act reflects the state of the common law identified in Tame. Consistent with what was decided in Tame, s 32 assumes that foreseeability is the central determinant of duty of care. Consistent with Tame11, "shocking event", and the existence and nature of any connection between plaintiff and victim and between plaintiff and defendant, are considerations relevant to foreseeability, but none is to be treated as a condition necessary to finding a duty of care. But contrary to what was decided in Tame, s 32 provides that a duty of care is not to be found unless the defendant ought to have foreseen that a person of normal fortitude might, in the circumstances of the case, suffer a recognised psychiatric illness. For present purposes, there are three important features of s 32. First, "sudden shock" (the expression used in s 32(2)(a)) is no more than one of several circumstances that bear upon whether a defendant "ought to have foreseen that a person of normal fortitude might, in the circumstances of the case, suffer a recognised psychiatric illness if reasonable care were not taken". The occurrence of "sudden shock" is neither a necessary nor a sufficient condition for a finding (2002) 211 CLR 317 at 331 [12], 335-336 [29] per Gleeson CJ, 349 [89]-[90] per McHugh J, 385 [201] per Gummow and Kirby JJ, 411 [275] per Hayne J. 10 (2002) 211 CLR 317 at 332-333 [16]-[18] per Gleeson CJ, 340-341 [51]-[52], 343-344 [61]-[62], [66] per Gaudron J, 383-384 [197], 384-386 [199]-[203], 390 [213], 393 [221]-[222], 394 [225] per Gummow and Kirby JJ, 411-412 [275] per 11 (2002) 211 CLR 317 at 333 [18] per Gleeson CJ, 344 [66] per Gaudron J, 394 [225] per Gummow and Kirby JJ, 411-412 [275] per Hayne J. Crennan Bell that a defendant owed a duty to take reasonable care not to cause a plaintiff pure mental harm. Secondly, witnessing, at the scene, a person being killed, injured or put in peril is also but one of the circumstances that bear upon the central question of foreseeability. Witnessing, of the kind described, is neither a necessary nor a sufficient condition for finding a duty of care. Thirdly, the focus of s 32 is "mental harm" and "a recognised psychiatric illness", not mental or nervous shock. Section 32 does not use the expression "mental or nervous shock". Yet, as noted earlier, the phrase "mental or nervous shock" appears in s 29 of the Civil Liability Act, and in s 30(1), the provision which determines whether s 30 is engaged. Section 30 applies to the liability of a person (the defendant) for pure mental harm to a person (the plaintiff) "arising wholly or partly from mental or nervous shock" in connection with another person (the victim) being killed, injured or put in peril by the act or omission of the defendant. The phrase "mental or nervous shock" (as used in both ss 29 and 30) doubtlessly has a meaning different from "sudden shock" (the phrase used in s 32(2)(a)). The expression "mental or nervous shock" may be understood as referring to a consequence, and "sudden shock" may be understood as referring to an event or a cause. But the notion of "shock", in the sense of a "sudden and disturbing impression on the mind or feelings; usually, one produced by some unwelcome occurrence or perception, by pain, grief, or violent emotion ([occasionally] joy), and tending to occasion lasting depression or loss of composure"12, is central to both expressions. Because neither "sudden shock", nor witnessing a person being killed, injured or put in peril, is a necessary condition for finding a duty to take reasonable care not to cause mental harm to another, s 30 will be engaged in only some cases where a relevant duty of care is found to exist. As s 30(1) makes plain, s 30 will be engaged only where the claim is for "pure mental harm", where the claim is alleged to arise "wholly or partly from mental or nervous shock", and where the claim is alleged to arise from shock in connection with 12 Oxford English Dictionary, 2nd ed (1989), vol xv at 293, meaning 4a. Crennan Bell "another person ... being killed, injured or put in peril by the act or omission of the defendant". In considering the application of Pt 3 it would ordinarily be desirable to begin by determining whether State Rail owed the appellants a relevant duty of care. Duty of care? Although the Court of Appeal expressly declined to decide whether State Rail owed a duty to take reasonable care not to cause mental harm to Mr Wicks and Mr Sheehan, who each came to the scene of this accident as a "rescuer" (the expression used by the parties in their agreed statement of issues), it would be open to this Court to decide that issue. Contrary to the submissions of State Rail, the question of duty of care is a question of law13. To resolve this question would require consideration of whether it was reasonably foreseeable that a rescuer attending a train accident of the kind that might result from State Rail's negligence (in which there might be many serious casualties and much destruction of property) might suffer recognisable psychiatric injury as a result of his experiences at the scene. Or to put the same question another way, was it reasonably foreseeable that sights of the kind a rescuer might see, sounds of the kind a rescuer might hear, tasks of the kind a rescuer might have to undertake to try to ease the suffering of others and take them to safety, would be, in combination, such as might cause a person of normal fortitude to develop a recognised psychiatric illness? The question of foreseeability is to be posed in these terms because it must be judged14 before the accident happened. Any finding at first instance that there was no singular shocking event encountered by either Mr Wicks or Mr Sheehan would not be determinative of the issue of foreseeability and it would not preclude a conclusion that a duty of 13 Amaca Pty Ltd v New South Wales (2003) 77 ALJR 1509 at 1514 [26]; 199 ALR 596 at 602; [2003] HCA 44; Cole v South Tweed Heads Rugby League Football Club Ltd (2004) 217 CLR 469 at 487 [56]; [2004] HCA 29; Vairy v Wyong Shire Council (2005) 223 CLR 422 at 443 [62]; [2005] HCA 62. 14 Vairy v Wyong Shire Council (2005) 223 CLR 422 at 461-463 [126]-[129]; Adeels Palace Pty Ltd v Moubarak (2009) 239 CLR 420 at 438 [31]; [2009] HCA 48. Crennan Bell care was owed. If Malpass AsJ made such a finding (which is itself a doubtful proposition) the finding would seem, on the face of the matter, not to be consistent with the description given in evidence of the scene and the events to which the appellants were exposed at the site of the accident. Because, however, both parties submitted that this Court should not decide the issue of duty of care, these are not issues that should now be decided. The issue of duty of care should be remitted for consideration by the Court of Appeal. Assuming that State Rail did owe Mr Wicks and Mr Sheehan a duty to take reasonable care not to cause mental harm, was s 30(2) engaged? That turns on whether the claims of the appellants were claims alleged to arise "wholly or partly from mental or nervous shock in connection with another person ... being killed, injured or put in peril" by the negligence of State Rail. The phrase must be construed as a whole. It is, however, convenient to begin by noticing some particular matters about one aspect of it: the reference to "shock" in the composite expression "mental or nervous shock". "Shock"? There can be little doubt that those who came upon the scene of the derailment were confronted with a scene that would cause a "sudden and disturbing impression on the mind or feelings". But it would be wrong to attempt to confine the "shock" that each rescuer suffered to what he perceived on first arriving at the scene. The sudden and disturbing impressions on the minds or feelings of the rescuers necessarily continued as each took in more of the scene, and set about his tasks. Contrary to what appeared to be an unexpressed premise for much of the submissions on behalf of State Rail, the event capable of causing a shock to observers did not finish when the train came to rest as a twisted collection of carriages. The "shock" which caused a sudden and disturbing impression on the minds and feelings of others was not confined to whatever may have happened, or may have been experienced, in the period between the carriages of the train leaving the tracks and stopping. Rather, the consequences, which each appellant alleged he suffered as a result of what happened on that day, were said to follow from some or all of the series of shocking experiences to which he was exposed at the scene. The claim of each appellant can, then, be said to be a claim arising wholly or partly from (a series of) mental or nervous shock(s). Were they claims arising Crennan Bell from mental or nervous shock in connection with another person being killed, injured or put in peril by the negligence of State Rail? The course of argument of all parties, both at trial and in the Court of Appeal, assumed that the claim of each appellant was to be characterised in this way. That assumption depended upon treating each appellant's claims as being that his exposure to the accident scene, while the victims of the accident were still at the scene, amounted to a form of mental or nervous shock in connection with another being killed, injured or put in peril. Only if that were so could s 30(2)(a) be engaged. Did the appellants witness, at the scene, another person or other persons being killed, injured or put in peril? Section 30(2)(a) – State Rail's submissions The chief weight of the argument for State Rail, that neither appellant had "witnessed, at the scene, the victim being killed, injured or put in peril", was placed on the use in s 30(2)(a) of the expression "being killed, injured or put in peril" (emphasis added). State Rail submitted that this expression indicated that, to recover, a plaintiff must have observed, at the scene, an event unfolding which included, perhaps culminated in, another's death, injury or being put in peril. State Rail further submitted that, to satisfy s 30(2)(a), a plaintiff must be able to demonstrate that the psychiatric injury of which complaint was made was occasioned by observation of what was happening to a particular victim. It will be convenient to deal with these submissions in the order in which they are set out, but to preface that consideration by one observation about the construction of the relevant provisions. Extrinsic material provides no assistance in this case in construing the relevant provisions. Although the Civil Liability Act was enacted after submission of the Review of the Law of Negligence Final Report, published in September 200215, s 30 of the Civil Liability Act does not take a form recommended by that Report. The Second Reading Speech on the Bill which inserted Pt 3 of the Civil Liability Act contains no useful statement about why s 30 takes the form it does. 15 The Review was conducted by a panel of which Ipp AJA of the Court of Appeal of the Supreme Court of New South Wales was Chairman. The panel was appointed following ministerial meetings on public liability which were attended by Ministers from the Commonwealth, State and Territory governments. Crennan Bell "Being killed, injured or put in peril" The expression "being killed, injured or put in peril" is used in s 30(1) as well as in s 30(2)(a). The evident intention of s 30(2) is to create a particular subset of cases that fall within the general description of claims "for pure mental harm ... arising wholly or partly from mental or nervous shock in connection with another person ... being killed, injured or put in peril". But the definitions of both the general class, and the particular subset created by s 30(2), hinge about another being killed, injured or put in peril. The general class is identified by reference to shock in connection with another being killed, injured or put in peril. The subset is fixed by an "unless" clause. The alternative conditions thus fixed, as necessary for membership of the subset, are first, that the plaintiff witnessed, at the scene, the victim being killed, injured or put in peril, or second, that the plaintiff is a close member of the family of the victim. Although both sub-s (1) and sub-s (2) use the phrase "being killed, injured or put in peril", sub-s (1) applies to claims for pure mental harm arising wholly or partly from mental or nervous shock in connection with that event (another being killed, injured or put in peril); sub-s (2) requires that the plaintiff either witnessed that event or was a close relative of the victim. The reference in sub-s (1) to the event must be read as referring to an event that may (but need not) have been complete before the suffering of nervous or mental shock. By contrast, because sub-s (2)(a) requires witnessing of the event at the scene, it must be read as directing attention to an event that was happening while the plaintiff "witnessed" It would not be right, however, to read s 30, or s 30(2)(a) in particular, as assuming that all cases of death, injury or being put in peril are events that begin and end in an instant, or even that they are events that necessarily occupy only a time that is measured in minutes. No doubt there are such cases. But there are cases where death, or injury, or being put in peril takes place over an extended period. This was such a case, at least in so far as reference is made to victims being injured or put in peril. The consequences of the derailment took time to play out. Some aboard the train were killed instantly. But even if all of the deaths were instantaneous (or nearly so), not all the injuries sustained by those on the train were suffered during the process of derailment. And the perils to which living passengers were Crennan Bell subjected as a result of the negligence of State Rail did not end when the carriages came to rest. Most, if not all, who were injured suffered physical trauma during the process of derailment. It may readily be inferred that some who suffered physical trauma in the derailment suffered further injury as they were removed from the wrecked carriages. That inference follows from the fact that some were trapped in the wreckage. It would be very surprising if each was extricated without further harm. Further, it may be readily inferred that many who were on the train suffered psychiatric injuries as a result of what happened to them in the derailment and at the scene. The process of their suffering such an injury was not over when Mr Wicks and Mr Sheehan arrived. That is why each told of the shocked reactions of passengers they tried to help. That is why each did what he could to take the injured to safety looking straight ahead lest the injured see the broken body of one or more of those who had been killed. As they were removed from the train, at least some of the passengers were still being injured. If either inference is drawn, Mr Wicks and Mr Sheehan witnessed, at the scene, victims of the accident "being injured". Even if neither of these inferences should be drawn, the fact remains that when Mr Wicks and Mr Sheehan arrived at the scene of the accident, those who had been on the train, and had survived, remained in peril. The agreed description of each of Mr Wicks and Mr Sheehan as "a rescuer" necessarily implies as much. Each sought to (and did) rescue at least some of those who had been on the train from peril. The observation of fallen electrical cables draped over the carriages is but a dramatic illustration of one kind of peril to which those who remained alive in the carriages were subject before they were taken to a place of safety. Contrary to State Rail's submission, the expression "being ... put in peril" should not be given a meaning more restricted than that conveyed by the ordinary meaning of the words used. More particularly, "being ... put in peril" is not to be confined to the kind of apprehended casualty which was at issue in Hambrook v Stokes Bros16, where a mother feared a runaway lorry might have injured her Crennan Bell child. It is not to be read as confined to the cases discussed by Evatt J in Chester v Waverley Corporation17 by reference to the decision in Hambrook. Nor is the expression to be read down by reference to how the phrase was to be understood when used in s 4 of the Law Reform (Miscellaneous Provisions) Act 1944 (NSW). Rather, the expression should be given the meaning which the words ordinarily convey. A person is put in peril when put at risk; the person remains in peril (is "being put in peril") until the person ceases to be at risk. The survivors of the derailment remained in peril until they had been rescued by being taken to a place of safety. Mr Wicks and Mr Sheehan witnessed, at the scene, victims of the accident being put in peril as a result of the negligence of State Rail. State Rail's submission that neither Mr Wicks nor Mr Sheehan witnessed, at the scene, a victim or victims being killed, injured or put in peril should thus be rejected. State Rail's further submission, that the combined effect of s 30(1) and s 30(2) requires that a plaintiff must demonstrate that the psychiatric injury of which complaint is made was occasioned by observation of what was happening to a particular victim, should also be rejected. In a case such as the present, where there were many victims, s 30(2) does not require that a relationship be identified between an alleged psychiatric injury (or any particular part of that injury) and what happened to a particular victim. To read the provision as requiring establishment of so precise a connection would be unworkable. It would presuppose, wrongly, that the causes of psychiatric injury suffered as a result of exposure to an horrific scene of multiple deaths and injuries could be established by reference to component parts of that single event. Rather, the reference in s 30(1) to "another person (the victim)" should be read18 as "another person or persons (as the case requires)". The reference to "victim" in s 30(2)(a) is to be read as a reference to one or more of those persons. In a mass casualty of the kind now in issue, s 30(2)(a) is satisfied where there was a witnessing at the scene of one or more persons being killed, 17 (1939) 62 CLR 1 at 41-42; [1939] HCA 25. 18 Interpretation Act 1987 (NSW), s 8(b). Crennan Bell injured or put in peril, without any need for further attribution of part or all of the alleged injury to one or more specific deaths. Conclusion and orders Each appeal to this Court should be allowed with costs. In each matter, the orders of the Court of Appeal of the Supreme Court of New South Wales made on 31 August 2009 should be set aside. Because in neither case have there been findings about duty of care and about whether the appellant suffered a recognised psychiatric injury of which the negligence of State Rail was a cause, each matter must be remitted to the Court of Appeal for its further consideration in accordance with the reasons of this Court. Whether that Court can or should decide those issues itself, or whether it should remit the matter for retrial, will be a matter for further argument in, and decision by, the Court of Appeal. The costs of the proceedings in the Court of Appeal to date and the costs of the further proceedings in that Court should be in the discretion of that Court.

HIGH COURT OF AUSTRALIA Matter No S309/2009 JOHN ALEXANDER'S CLUBS PTY LIMITED & ANOR APPELLANTS AND WHITE CITY TENNIS CLUB LIMITED RESPONDENT Matter No S308/2009 WALKER CORPORATION PTY LIMITED APPELLANT AND WHITE CITY TENNIS CLUB LIMITED & ORS RESPONDENTS John Alexander's Clubs Pty Limited v White City Tennis Club Limited Walker Corporation Pty Limited v White City Tennis Club Limited [2010] HCA 19 26 May 2010 S309/2009 & S308/2009 Matter No S309/2009 ORDER White City Tennis Club Ltd ("White City") have leave to file out of time its Second Notice of Contention. The appeal be allowed with costs. The following orders: the orders of Tobias JA made on 6 April 2009; (b) Order 1 of the orders of the Court of Appeal of the Supreme Court of New South Wales ("the Court of Appeal") made on 5 May 2009; the orders of the Court of Appeal made on 3 June 2009, as amended on 23 July 2009; (d) Order 7 of the orders of the Court of Appeal made on 10 June 2009; and (e) Orders 3 and 6 of the orders of the Court of Appeal made on 23 July 2009; be set aside, and in lieu thereof: the appeal by White City to the Court of Appeal be dismissed with costs; and (g) White City pay the costs of John Alexander's Clubs Pty Ltd and Poplar Holdings Pty Ltd of White City's Notice of Motion dated 5 June 2009. Matter No S308/2009 Set aside so much of the orders of the Court of Appeal of the Supreme Court of New South Wales made on 23 July 2009 as ordered Walker Corporation Pty Ltd ("Walker Corporation") to pay the costs of White City Tennis Club Ltd ("White City") of the Amended Notice of Motion of Walker Corporation (including the costs of the Notice of Motion which the Amended Notice of Motion superseded) and in lieu thereof order that: White City pay Walker Corporation's costs of: (a) Walker Corporation's appearance before Macfarlan JA on 10 June 2009; and (b) Walker Corporation's costs of its Notice of Motion dated 11 June 2009 and its Amended Notice of Motion dated 22 June 2009. White City pay Walker Corporation's costs of the appeal to this Court. The appeal otherwise be dismissed. On appeal from the Supreme Court of New South Wales Representation J M Ireland QC with J S Cooke for the appellants in S309/2009 and the second and third respondents in S308/2009 (instructed by Colin Biggers & Paisley Solicitors) I M Jackman SC and J K Taylor for the appellant in S308/2009 (instructed by N C Hutley SC with J R Clarke for the respondent in S309/2009 and the first respondent in S308/2009 (instructed by Kemp Strang Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS John Alexander's Clubs Pty Limited v White City Tennis Club Limited Walker Corporation Pty Limited v White City Tennis Club Limited Equity – Fiduciary obligations – Where commercial parties entered into series of agreements – Relevance of contractual terms to existence of fiduciary relationship – Where memorandum of understanding required grantee of option to purchase land to exercise option in favour of another – Where later agreement superseded memorandum of understanding and contained no such requirement – Whether fiduciary obligations arose between parties. Trusts – Constructive trust – Whether equitable fraud, unconscionable conduct or breach of fiduciary duty by grantee of option – Whether order to convey option land appropriate – Relevance of third party interests. Procedure – Joinder of parties – Where constructive trust declared over land encumbered by equitable mortgage – Where party seeking constructive trust had notice of mortgage – Where mortgagee not a party – Whether mortgagee necessary party to action – Whether mortgagee entitled to be joined – Whether mortgagee entitled to have orders set aside – Whether mortgagee estopped. Words and phrases – "fiduciary", "injurious to third parties", "necessary party". Uniform Civil Procedure Rules 2005 (NSW), r 36.16. FRENCH CJ, GUMMOW, HAYNE, HEYDON AND KIEFEL JJ. These appeals relate to a tennis club which had been conducting its activities on land which it did not own. It attempted to create a regime by which some members could participate in the activities of a new club on the same land after it was sold by its owner. At trial, the tennis club was denied any entitlement to the land. An appeal was allowed, and the club was declared to be the beneficiary of a constructive trust over the land. Those orders should be overturned and the orders of the trial judge restored. The appeals are not without complexity. The background and the course of proceedings must be explained in some detail before the reasons for restoring the trial judge's orders are stated. Appeal S309 of 2009: the JACS appeal The background The origins of the appeals. The origins of these appeals lie in the desire of New South Wales Tennis Association Ltd ("Tennis NSW") to sell some land it owned at 30 Alma Street, Paddington, a suburb of Sydney ("the White City Land"). As at 28 February 2005 the White City Land was about 4.448 hectares in area. On it stood tennis courts, centre court stands and a car park. The appeals concern a particular part of the White City Land known as "the Option Land". The Option Land, like the White City Land as a whole, is Torrens system land. leading in which For many years, the White City Land had been best known as the site of tennis competitions international players participated. However, that activity moved to a new site at Homebush once the construction of facilities there for the 2000 Olympic Games was complete. It was that event which stimulated the desire of Tennis NSW to sell the White City Land. That desire had implications for a tennis club, White City Tennis Club Ltd ("the Club"), for another tennis club, Sydney Maccabi Tennis Club Ltd ("Maccabi"), for the Trustees of the Sydney Grammar School ("SGS") and for John Alexander's Clubs Pty Ltd ("JACS"). The Club. The Club is the respondent in one of the appeals ("the JACS appeal") and the first respondent in the other ("the Walker Corporation appeal"). From 1948 the Club had conducted the activities of a sporting club, particularly tennis activities, on part of the White City Land pursuant to a series of leases and licences. As at 28 February 2005, the relevant lease ("the Lease") ran until 2020. The leased area was the upper floor and part of the ground floor of the Northern Stand Building. That area had since 1970 been used as the Club's clubhouse. Clause 18 of the Lease gave the Lessor, Tennis NSW, the right to terminate it on six months' notice if Tennis NSW required possession for the purposes of the Northern Stand Building. rebuilding, reconstructing or demolishing Clause 18 also provided that, if a further building were constructed and the Lessor intended it to be used as a social club, the Club would have a right of first refusal of a lease. As at 28 February 2005, the relevant licence permitted the Club to use certain tennis courts on the White City Land. The licence was granted on 29 June 2004 for one year from 1 July 2004 ("the First Licence"). The desire of Tennis NSW to sell the White City Land imperilled the future of the Club's activities at that site. Maccabi. Although Maccabi's role in events began a little later than those of Tennis NSW, SGS, the Club and JACS, its interest lay in the fact that it had been conducting a tennis club on part of the White City Land, and it wished to go on doing so even if Tennis NSW sold the White City Land. SGS. One of the preparatory schools operated by SGS and its playing fields are adjacent to the White City Land. The decision of Tennis NSW to sell the White City Land stimulated in SGS an interest in acquiring some of it for use as playing fields. JACS. JACS is the first appellant in the JACS appeal and the second respondent in the Walker Corporation appeal. JACS was and is a company engaged in the business of developing sites for use by sporting clubs. Tennis NSW's desire to sell the White City Land created an opportunity for JACS to assist the Club in providing a place at which its members, or at least some of them, could continue to participate in tennis and other recreational activities. Pre 28 February 2005 dealings. Lengthy negotiations between Tennis NSW, the Club, JACS and SGS took place in 2004. By 9 December 2004, Tennis NSW had resolved to sell by tender not just the Option Land but the whole of the White City Land. The closing date for tenders was eventually fixed as 15 April 2005. The Memorandum of Understanding. On 28 February 2005 JACS and the Club entered a Memorandum of Understanding ("the MOU"). The MOU contemplated the creation of a club ("the New Club") for the conduct of tennis and other recreational activities on part of the White City Land. Clause 1.7 set out part of the background: "JACS has been negotiating with [Tennis NSW] for the purchase [of], or for the grant of an option to purchase, the Land by an entity to be established as hereinafter described and to be known as 'White City Holdings Limited' ('WCH'). [Tennis NSW] have advised JACS they now propose to offer the land for sale by tender ('the tender')." The reference to "the Land" was a reference to "all or part [of] lot 3 in Deposited Plan 234605 in the Parish of Alexandria, County of Cumberland, and being the whole or part of the land in Folio Identifier 9/11680." Lot 3 comprised the whole of the White City Land. WCH was to be incorporated by JACS: cl 5.2(d). The shareholders of WCH were in due course to comprise "Foundation Members" – existing members of the Club who wished to become members of WCH – and members of the public who subscribed for shares: cl 5.2(h)-(l). Despite the background described in cl 1.7, cl 1.8 made it clear that it was a third party, not JACS or WCH, which was to purchase the White City Land. Clause 1.8 provided: "JACS is negotiating with a third party ('the third party') with a view to entering into an agreement with the third party to include terms whereby: the third party and JACS prepare and lodge the tender for the purchase of the Land which will provide for the Land to be purchased by the third party; the third party grants to JACS on behalf of WCH an option to purchase part of the Land ('the option from the third party') within a period ('the option period')." The "third party" in both cl 1.8 and cl 3.7 was SGS. By cl 3.3 the Club agreed that it would not seek to buy the White City Land or any part of it until 31 July 2006. By cl 3.7, JACS promised to seek to obtain an option to purchase the Land or part of it from Tennis NSW or SGS. If it succeeded, it promised by cl 3.7.1 to exercise the option on behalf of WCH upon WCH simultaneously granting to John Alexander's White City Club Pty Limited ("JAWCC"), which like WCH was a company to be formed by JACS, a 99 year lease of the relevant land and entering into an operating agreement. By cl 3.7.2 JACS promised to seek to procure a further option exercisable by the Club if JACS were unable to exercise, or failed to exercise, the cl 3.7.1 option1. As the Club agreed in argument, the funding of the exercise by JACS on behalf of WCH of the option referred to in cl 3.7.1 was to come from the members of WCH. The parties to the JACS appeal agreed that not all parts of the MOU were contractually binding. They differed about which parts were not binding, and although they agreed that cl 3.7 was binding, they differed about its construction. From the MOU to the Second White City Agreement. The last day for lodging tenders to purchase the White City Land was 15 April 2005. On that day SGS lodged a tender. On the same day, SGS, Maccabi, JACS and the Club entered into the "First White City Agreement". On 10 May 2005, four events occurred. First, Tennis NSW and SGS entered into a contract for sale of the White City Land. Secondly, an agreement ("the Second White City Agreement") was executed by the same four parties as executed the First White City Agreement. Thirdly, Tennis NSW, SGS and the Club entered into a Novation Deed of the First Licence from Tennis NSW to SGS. Clause 2 of the Deed provided that the novation was not to take effect until the completion of the contract of sale of the White City Land from Tennis NSW to SGS dated 10 May 2005. Fourthly, Tennis NSW and the Club entered into a Deed of Licence for a period of one year commencing on 1 July 2005 permitting the Club to use the tennis courts on the White City Land in return for a licence fee ("the Second Licence"). Clause 13 of the Second Licence provided that if Tennis NSW sold the White City Land to a third party, the Club was required to enter into a novation deed substantially in the form of the Novation Deed of the First Licence between Tennis NSW, SGS and the Club. The completion of the Tennis NSW-SGS contract and the Third White City Agreement. There was a transfer of the White City Land from Tennis NSW to SGS on 30 June 2005. Part of the White City Land was immediately onsold by SGS to Maccabi ("the Maccabi Land"). Thereafter SGS and Maccabi owned the White City Land as tenants-in-common. 1 Clause 3.7 is quoted, and its key expressions are explained, below at [47]. On 29 June 2005, the day before SGS and Maccabi acquired their interests in the White City Land, SGS, Maccabi, JACS and the Club entered into a further agreement ("the Third White City Agreement"). Clause 8 of the Third White City Agreement was headed "Option to JACS or its associated nominated entity (together referred to as 'JACS' in this section)" and provided: Subject to Settlement, SGS and Maccabi ('Grantors') grant the following rights, referred to as the 'Option': to JACS an option to acquire the Option Land for the Option Amount (as defined below) payable solely by JACS, exercisable by JACS giving written notice to the Grantors and paying the Option Amount at any time from completion of the purchase of the Land until 30 June 2007, but if JACS does not exercise the Option within this period, the Grantors grant [the Club] an Option from 1 July to 30 September 2007, exercisable by [the Club] giving written notice to the Grantors and paying the Option Amount before 30 September 2007." The "Option Amount" was defined by cl 9 as being $6.33m, subject to payment of additional amounts up to $400,000. It is notable that, unlike cl 3.7.1 of the MOU, cl 8 did not compel JACS to exercise the option "on behalf of WCH", and did not refer to any grant to JAWCC of a 99 year lease or to entry into an operating agreement. Clauses 16 to 20 provided for the grant of a lease by SGS and Maccabi to the Club. The land leased comprised parts of the White City Land (including parts which the Club had not previously been entitled to occupy). The period was 1 July 2005 to 30 September 2007. This lease was to terminate earlier if JACS or the Club exercised the cl 8 option. Clause 21(a) provided that the Club "surrenders any rights it has, or would but for this agreement have had, in relation to the [White City] Land under the arrangements entered into between [Tennis NSW] and [the Club]". The combined effect of cll 16 to 20 was that the Club gained new rights over some areas of the White City Land, but also gave up its right under the Lease to occupy parts of the Northern Stand Building as a clubhouse until 2020. Clause 42 of the Third White City Agreement provided: "[The Club] and JACS agree that their MOU dated 28 February 2005 … continue[s] in accordance with [its] terms and each agrees to carry out its obligations under this agreement in accordance with [the MOU]." Clause 43 provided in part: "To the extent of any inconsistency between this agreement and any other agreement between any of the parties, this agreement will prevail, unless specifically stated." The First White City Agreement dated 15 April 2005 and the Second White City Agreement dated 10 May 2005 did not contain provisions equivalent to cll 42 and 43 of the Third White City Agreement. Further, the First White City Agreement and the Second White City Agreement contained different terms in relation to the lease of the relevant parts of the White City Land pending any exercise of the options. Under those two Agreements, JACS was to be the tenant under a two year lease. But under the Third White City Agreement, the Club was to enjoy the leasehold rights described above. On 30 June 2005, SGS, Maccabi and the Club entered into a Deed novating the First Licence and the Second Licence to reflect the fact that SGS and Maccabi had become owners of the White City Land. On the same day, SGS, Maccabi and the Club entered into a Deed of Variation of the Lease and First and Second Licences pursuant to which the Club leased part of the Northern Stand Building and was permitted to use the tennis courts on the White City Land. The new rights which the Third White City Agreement had assured to the Club were confirmed in that Deed. Purported termination of MOU. Disputes arose within the membership of the Club, and also between the Club and JACS. On 12 April 2006, JACS served on the Club a Notice of Termination of the MOU, on the supposed ground that the Club had evinced an intention not to be bound by the MOU and had repudiated it. The exercise of the option over the Option Land by Poplar. JACS nominated Poplar Holdings Pty Ltd ("Poplar") as its associated nominated entity to exercise the option granted under cl 8(a) of the Third White City Agreement. Poplar is the second appellant in the JACS appeal and the third respondent in the Walker Corporation appeal. Poplar exercised that option on 27 June 2007 at a cost of $6.73m pursuant to cll 8 and 9 of the Third White City Agreement. Poplar later became registered as proprietor of the Option Land. Poplar obtained the funds necessary to exercise the option from a loan granted by Walker Corporation Pty Ltd ("Walker Corporation"). Walker Corporation is the appellant in the Walker Corporation appeal. The loan was secured by, amongst other things, an unregistered mortgage over the Option Land, and a charge over Poplar's assets, which included the Option Land. The Club's claims at trial The nomination of Poplar by JACS to exercise the option on 27 June 2007 did not come as a surprise to the Club: on the same day it commenced proceedings in the Equity Division of the Supreme Court of New South Wales. The contentions of the Club which are still live are that the conduct of JACS was a breach of a fiduciary duty owed to the Club to hold the Option Land, if it exercised the cl 8(a) option, on behalf of the Club; or an equitable fraud; or unconscionable or unconscientious conduct2. The Club alleged that this breach or fraud or conduct deprived the Club of its opportunity to exercise the cl 8(b) option and caused it to lose an opportunity to acquire the Option Land. It claimed equitable compensation or an account of profits in its Further Amended Statement of Claim, but the only relief pressed in the Court of Appeal of the Supreme Court of New South Wales and in this Court was a claim for a constructive trust over the Option Land on terms that it pay Poplar its costs of acquiring the land from SGS and Maccabi, namely $6.73m. The trial judge The trial judge (Young CJ in Eq) dismissed the proceedings3. The principal grounds on which he did so and which are still in issue were as follows. He found that there was no fiduciary duty: the Club was not afflicted by any special vulnerability, it had not relied on JACS to protect its interests, those running it were experienced in business and advised by independent solicitors, and it had equality of bargaining power with JACS. He found that the Club had indicated that it was not prepared to perform the MOU, and that JACS had 2 On the use of these expressions, see Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (2003) 214 CLR 51 at 64 [11]-[14], 72-73 [42]-[43] and 110 [165]; [2003] HCA 18. 3 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd [2008] NSWSC validly terminated the MOU on 12 April 2006. He found that, even if fiduciary duties had arisen out of the MOU, its valid termination terminated those duties. He found that there was no equitable fraud or unconscionable conduct: he distinguished the authorities on which the Club relied, and held that after the MOU had been terminated on 12 April 2006, JACS was at liberty to proceed as it had. And he noted that the Club had failed to do equity in not offering to compensate Poplar for more than the exercise price of $6.73m. The Court of Appeal's first judgment The Court of Appeal (Macfarlan JA, Giles and Basten JJA concurring) allowed an appeal by the Club4. It delivered two judgments. In the first, delivered on 3 June 2009, the Court of Appeal declared that Poplar held its interest in the Option Land on a constructive trust for the Club, and ordered Poplar to transfer the Option Land to the Club upon the Club paying $6.73m. The Court of Appeal found that it would be unconscionable for Poplar to deny the Club any entitlement to an interest in the Option Land. This conclusion turned on three points. The first point was that "the MOU impliedly prohibited JACS exercising the option on its own behalf."5 The second point was that if JACS (rather than Poplar) had acquired the Option Land, "it would have done so in circumstances where the option had been acquired by JACS by reason of the [Club's] involvement in the White City [Agreements] and the [Club's] undertaking, given by those agreements, to surrender its existing rights to a long term lease over part of the [Club] House and licences to use the tennis courts."6 The third point was that Poplar could not be in a better position than JACS, that a "personal equity" was available against Poplar to defeat its claim to indefeasible title by reason of its registration, and that s 42 of the Real Property Act 1900 (NSW) ("the RP Act") did not entitle it to hold the land free from the Club's unregistered interest under a constructive trust7. That third point is not now in issue. 4 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86. 5 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 6 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 7 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 Although the Court of Appeal did not see it as necessary for its conclusion that JACS had behaved unconscionably to decide whether there was a fiduciary relationship, it did hold that there was such a relationship8. The Court of Appeal criticised the method by which the trial judge concluded that the MOU had been validly terminated. But it did not see that issue as crucial, and it did not overturn the trial judge's conclusion9. Finally, the Court of Appeal declined to remit to the Equity Division the question whether a condition should be imposed on the constructive trust that the Club pay a just allowance for the value of the skill, expertise and expenses of Poplar10. The Court of Appeal's second judgment On 10 June 2009, Macfarlan JA extended until further order an injunction preventing the Registrar-General of New South Wales from registering an interest over Poplar's interest in the Option Land. That injunction was originally granted by Tobias JA on 6 April 2009 and extended on 5 May 2009 to protect the Club's position pending payment by the Club of the $6.73m and the transfer to it of the Option Land. On 10 June 2009, counsel for Walker Corporation foreshadowed the filing of a Notice of Motion seeking orders that Walker Corporation be joined as third respondent to the appeal and that arrangements be made to protect Walker Corporation's entitlement as holder of an unregistered mortgage over the Option Land granted on 26 June 2007. Walker Corporation then filed a Notice of Motion on 11 June 2009. An Amended Notice of Motion filed on 22 June 2009 sought orders that Walker Corporation be joined as third respondent in the appeal; that a condition that the Club give security for its undertaking as to damages in relation to the injunction granted on 6 April 2009 be imposed; and that the Court of Appeal's declaration of a constructive trust and 8 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 9 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 10 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 its order that the Option Land be conveyed to the Club be set aside. Alternatively, it sought, in effect, a declaration that the constructive trust was without prejudice to Walker Corporation's interest being declared in separate proceedings to have priority. The matter was dealt with on the papers. The Amended Notice of Motion was dismissed on 23 July 200911. The nature of the Club's claims A striking feature of the Club's position is that it is not now suing in contract for breach of any express or implied term in the MOU, the Third White City Agreement or any other contract. It did originally plead a breach of the Third White City Agreement, but did not pursue the allegation at trial. Its claims are now only non-contractual. Another striking feature is that the Club's claims have an all-or-nothing character. Despite its knowledge that JACS (or a nominee) was going to acquire the Option Land, as Poplar did on 27 June 2007 – for it threatened the present proceedings well before the option was exercised – it did not try to force JACS to return to what it regarded as a lawful course by seeking a negative interlocutory injunction. The Club wants the whole of the Option Land, subject only to the condition of paying the price Poplar paid: it rejects any attempt at finding some route to a just apportionment of the gains made and losses suffered by the parties in their dealings. Thus it is not now claiming equitable compensation for what it may have lost. It is not now claiming an account of profits. And it is opposing any recognition of a claim by JACS or Poplar for just allowances. Although the Court of Appeal refused to remit this claim to the Equity Division for various procedural and substantive reasons, the trial judge said that "Poplar has almost certainly suffered far more detriment than merely payment of the option fee including its own conveyancing costs"12, and JACS must have suffered detriment also. In relation to the one condition the Club does submit to – payment of $6.73m – it makes no allowance for Poplar's losses in the period between 27 June 2007, when Poplar paid SGS and Maccabi the $6.73m, and the future date when the Club will pay that sum to Poplar: it is not offering to pay interest or make any other arrangement to compensate Poplar for the declining value of money. 11 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (No 2) (2009) 261 ALR 112. 12 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd [2008] NSWSC 1225 Further, the constructive trust which the Club sought and which the Court of Appeal declared to exist is in substance an order that the Club replace Poplar on the Register. That order was made on 3 June 2009 without consideration of what impact it might have on other persons interested, such as Walker Corporation, which claims to have an unregistered mortgage of which the Club had notice. Nor is the Club completely faithful to the primary document on which it relies as the source of its rights – the MOU. Although cl 3.7.1 of the MOU contemplated that when JACS exercised the option on behalf of WCH there would be a 99 year lease in favour of JAWCC and entry into an operating agreement, the Club does not accept that any equivalent regime should apply if it succeeds in defending its claim for a constructive trust. Further, parts of the Club's argument tended to suggest that JACS had, to its own purely selfish advantage, disrupted a plan to give the Club's members rights to play tennis on the White City Land of a kind they had long enjoyed. That suggestion overlooks the following facts. Brian Carpenter, a former President of the Club, formed the White City Lawn Tennis Club ("WCLTC") in March 2008. On 1 April 2008, Poplar signed a licence agreement with WCLTC giving its members rights to use tennis courts and a clubhouse area on the Option Land. That licence agreement also provided that Poplar would take reasonable steps to provide the first 400 members of WCLTC with an option either to take up membership of the new facilities to be constructed by Poplar on the Option Land or to take up shares in the entity which will issue the prospectus to raise funds for the redevelopment of the site at a discount of 40 percent off the offer price for such shares. Following the execution of that licence, in May 2008 WCLTC offered all members of the Club membership in WCLTC. As at 23 October 2008, WCLTC had approximately 104 members of which approximately 90 were also at that time, or had previously been, members of the Club. JACS submitted that this evidence showed that it had not behaved fraudulently, unconscionably, or in breach of fiduciary duty. These matters of fact, on which the submission rests, were specifically accepted by the Club. The submission itself was not answered by the Club. The position established by the Court of Appeal reflects success in a very ambitious claim on the part of the Club. So ambitious a claim calls for close scrutiny. The Court of Appeal's reasoning: the joint venture question It is convenient to begin the scrutiny by dealing with a point which, while not decisive, raises a doubt about the Court of Appeal's reasoning. The Court of Appeal's reasons for judgment commence with three paragraphs summarising the nature of the case and the conclusion reached. In those paragraphs the Court of Appeal described the relationship between JACS and the Club as that of joint venturers. It did so seven times: three times it called them "joint venturers", three times it called the MOU a "joint venture agreement", and once it referred to "the joint venture"13. Later, in a key part of its reasons, the Court of Appeal said that JACS acquired the option to buy the Option Land "in the course of giving effect to the MOU, with the assistance of the [Club]." It continued14: "Having had that assistance in acquiring the opportunity to purchase the property upon the basis that the property would be used for the purposes of the joint venture and, failing that, made available to the [Club], it would have been unconscionable for JACS to claim the property for its own use and benefit, whether or not JACS had terminated the MOU." (emphasis added) Yet cl 7.1 of the MOU provided: "Nothing in this MOU shall be taken to constitute the Parties as partners or as joint venturers for any purpose whatsoever." Despite the words to which emphasis has been added, the Court of Appeal said: "notwithstanding [cl 7.1], the arrangements clearly constituted some type of 'joint venture' of the parties, if that term is used in its broadest sense"15. The Court of Appeal also pointed out that a proposal by JACS more than a year before the MOU "used the term 'joint venture'" in that it contemplated that the parties would enter into a "Joint Venture agreement"16. The Court of 13 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 14 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 15 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 16 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 at 89 [11] and 92 [26]. Appeal continued: "What followed in the dealings of the parties did not render that description [that is, 'joint venture'] no longer applicable."17 It may well have been loose language of the kind to which the Court of Appeal referred, made in a selling document more than a year before the MOU, which stimulated the parties into clarifying the position by agreeing to include cl 7.1 in the MOU. The same is true of the statement in another document of that kind around that time that JACS would "partner with" the Club. The expression "joint venture" is no doubt a vague one, capable of a range of applications, but it is often used to bolster a conclusion that a fiduciary relationship exists. The Court of Appeal, however, correctly said18: "Describing the arrangements as a 'joint venture' does not however have any particular legal consequences. The rights and obligations of the parties remain to be determined by examination of the detail of what they have agreed and done." This makes it difficult to understand why references to "joint venture" were so frequent in the Court of Appeal's statement of the nature of the case, in the statement of its conclusion, and in a key part of its substantive reasoning. That is particularly so since the Club at the trial disavowed the existence of any joint venture. The Court of Appeal's reasoning: the construction of cl 3.7 and the Third White City Agreement There were two critical elements in the Court of Appeal's reasoning. The first rested on a construction of cl 3.7.1 of the MOU to the effect that if JACS obtained and exercised an option over the Option Land, it would do so only on 17 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 18 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 at 92 [27]. See also the reasons of Blanchard J in Paper Reclaim Ltd v Aotearoa International Ltd [2007] 3 NZLR 169 at 187 [31] and Edelman, "When Do Fiduciary Duties Arise?", (2010) 126 Law Quarterly Review 302 at 310, n 64. behalf of WCH, not on its own behalf19. The second was that JACS only obtained the option under cl 8(a) of the Third White City Agreement by reason of the Club's participation in that Agreement, which required the Club to agree to surrender its rights over the Option Land to make the grant of the option possible. It is desirable to deal now with the construction point. At the outset it must be noted that the Club rested, and continues to rest, its case on an arrangement or understanding to be derived only from written agreements – not on conversations or understandings outside them. That case depends on an analysis of the MOU and the Third White City Agreement in particular. Clause 3.7 of the MOU provided: "JACS agrees that it will seek to obtain an option to purchase the Land or part of it from [Tennis NSW] or the third party and in the event it obtains the option from [Tennis NSW] or the third party referred to in Clause 1.8 herein or any right to purchase the Land or any part of it then: in the event JACS exercises the option from [Tennis NSW] or the third party that it will exercise the option on behalf of WCH, upon WCH simultaneously granting to JAWCC a 99 year lease of the land [and] entering into the operating agreement referred to in clause 6.1(e) herein; JACS will seek to procure in favour of [the Club] a further option to purchase the Land or part of it exercisable by [the Club] within 90 days of expiry of the Option Period in the event JACS is unable to or fails to exercise the option from [Tennis NSW] or the third party in accordance with its terms[;] in the event [the Club] is unable to procure the further option referred to in Clause 3.7.2 herein and JACS has not exercised the option from [Tennis NSW] or the third party 30 days prior to the expiration of the Option Period, then upon [the Club] giving written notice to JACS that [the Club] requires JACS to exercise the option on behalf of [the 19 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 Club], that JACS will proceed to exercise the option from [Tennis NSW] or the third party on behalf of [the Club]." It is clear that the word "and" should be inserted between "land" and "entering" in cl 3.7.1, although it does not appear in the text. JAWCC was to be the principal operating company for the project, and was to enter into an Entitlements Agreement with the New Club to enable the New Club to conduct the traditional activities of the Club. The "Operating Agreement" was defined as the agreement between WCH and JACS specifying the rights and responsibilities of JAWCC for the management of the New Club: cl 2.1. JACS concentrated on the requirement in cl 3.7.1 that if JACS acquired and exercised an option it would do so on behalf of WCH. It submitted that that requirement was entirely conditional. It would only arise if the balance of cl 3.7.1 were fulfilled, namely a simultaneous grant to JAWCC of a 99 year lease, and simultaneous entry into the Operating Agreement. JACS accepted that the MOU made it responsible for bringing WCH into existence and drafting the 99 year lease and the Operating Agreement. But it submitted that the Club had not complained about JACS's failure to bring WCH and JAWCC into existence or to prepare the 99 year lease and the Operating Agreement, there had been no real attempt to explore the reasons for that failure at trial, and nothing was said on the subject in the Third White City Agreement. The Club, for its part, did not rely on a term to be implied into the MOU. The Club argued that JACS's construction of the express language of cl 3.7 was wrong. It said that the words "the option from … the third party" in the opening part of cl 3.7 and in cl 3.7.1 constituted a defined expression. The expression was said to be defined in cl 1.8.2: "the third party grants to JACS on behalf of WCH an option to purchase part of the Land ('the option from the third party')". The Club submitted and the Court of Appeal accepted20 that the acquired option could only be used for the benefit of WCH, independently of satisfaction of the conditions in cl 3.7.1. That reasoning is unsound. It gives too much weight to the definition, and too little weight to the operative words of cl 3.7.1. The duty to exercise the option on behalf of WCH derives from cl 3.7.1, not cl 1.8.2. The word "simultaneously" emphasises the necessary link between the duty to exercise the option on behalf of WCH and the entry into the 99 year lease and the The Club's submission does not deal with the Operating Agreement. 20 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 interdependence between the events described in cl 3.7.1. Clause 3.7 was silent about what duties JACS would have in the event that at the time the option was to be exercised it was not possible to enter the 99 year lease and the Operating Agreement. It follows that JACS's procurement of Poplar to exercise the cl 8 option was not a contractual breach of the MOU. The Third White City Agreement, in contrast to the MOU, contained no stipulation about the 99 year lease and the Operating Agreement, and no stipulation that the option be exercised only "on behalf of WCH". Nor was there any replacement stipulation that the option be exercised only on behalf of the Club. The fact that cl 3.7.1 obliged JACS to do something as part of a bargain which would give a 99 year lease in favour of JAWCC and entry into the Operating Agreement said nothing about what it was permitted to do as part of a bargain which did not give a 99 year lease in favour of JAWCC or entry into the Operating Agreement, but instead gave the Club rights of occupation under a lease until 30 September 2007. While the Club and JACS agreed in cl 42 of the Third White City Agreement that the MOU continued, cl 43 provided that, to the extent of any inconsistency between the Third White City Agreement and any other agreement, the Third White City Agreement was to prevail. In these major respects, there were clear inconsistencies. Clause 3.7 had to give way, and cl 8 had to prevail. The Court of Appeal said that "a constructive trust may … be imposed to give effect to contractual intentions where the basis for finding an express or resulting trust is not present."21 The Court of Appeal also said that if "JACS had exercised the option purportedly on its own behalf and for its own benefit while the MOU was on foot, JACS would have been in breach of … cl 3.7"22. The Club never pleaded or otherwise alleged any breach of cl 3.7, or indeed of any other express or implied term of the MOU. Had there been any threat to commit such a breach, it could have been quickly restrained in advance by the grant of an interlocutory injunction, since well before 27 June 2007 JACS made it plain that it would exercise the option with finance provided by a third party. 21 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 22 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 at 99 [63]; see also at 98 [53]. These problems reveal a key flaw in the Court of Appeal's reasoning. The reasoning assumed that the series of different agreements with contractual elements into which the parties entered should be treated as a unity taking shape entirely from the MOU. The Court of Appeal's statement that JACS would have been in breach of cl 3.7.123 would only be true if the conditions stated in cl 3.7.1 had been satisfied. But it does not follow that the same outcome flows from JACS's procurement of Poplar to exercise the option which SGS and Maccabi granted it under cl 8(a) of the Third White City Agreement. There was no limitation in cl 8(a) corresponding to the limitation in cl 3.7.1 concerning WCH. Nor did the cl 3.7.1 conditions exist in cl 8(a). The Court of Appeal's reasoning overlooks the fluidity and speed of the parties' dealings in the six weeks from the MOU on 28 February 2005 (between only JACS and the Club) to the First White City Agreement (between JACS, the Club, SGS and Maccabi) on 15 April 2005. Once JACS attempted to fulfil its obligations under cl 3.7 to "seek to obtain an option to purchase" the White City Land (or part of it) from third parties like Tennis NSW or SGS, it was entirely possible that the earlier arrangements between JACS and the Club would have to be modified. So it proved in the First White City Agreement. Clause 8(a) granted JACS an option to acquire the Option Land, but there was no reference to WCH or the cl 3.7.1 conditions. The Club agreed to surrender its rights in relation to the White City Land (cl 21). JACS was granted a two year lease over the Option Land (cl 16). There was no reference to the continuation of the MOU. Three weeks after the First White City Agreement, on 10 May 2005, the same four parties entered the Second White City Agreement. Again cl 8 did not refer to WCH or the cl 3.7.1 conditions. Again the Club surrendered its rights (cl 21). Again JACS was granted a two year lease (cl 16). Again there was no reference to a continuation of the MOU. Seven weeks after the Second White City Agreement, on 29 June 2005, the same four parties entered the Third White City Agreement. Again cl 8 did not refer to WCH or the cl 3.7.1 conditions. Again the Club surrendered its rights. But now JACS received no lease – only the Club did. And cll 42 and 43, terminating the MOU to the extent of any inconsistency, and causing cl 8 to prevail over cl 3.7.1, were introduced. 23 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 It is true, as the Club submitted, that Poplar's exercise of the cl 8 option was not expressly permitted by the MOU. The question is whether that event amounted to equitable fraud, unconscionable conduct or breach of fiduciary duty. The Club's case that that question be affirmatively answered faces a fundamental difficulty. The obligation imposed on JACS by cl 3.7.1 was conditional upon two events which never happened. Clause 3.7.1 was in turn cancelled and replaced by a quite different scheme which evolved through the White City Agreements until it reached its final form in the Third White City Agreement. Those three Agreements were agreed to by the Club. The Club did not allege that its consent was brought about by any mistake, misrepresentation, undue influence, duress, overbearing of the will, unequal bargaining power or concealment. Those who decided that the Club should consent were experienced in business and legally advised. This fundamental difficulty makes it hard to see why the Option Land should be held on constructive trust for the Club. It is a fundamental difficulty which none of the Club's submissions overcame. It is a difficulty which the Court of Appeal attempted to overcome by treating cl 3.7 as being, or as analogous to, a contract for valuable consideration to assign property which was not wholly executory. The problem is that JACS's promise to seek an option, and, if it exercised it, to do so on behalf of WCH, was, contrary to the Court of Appeal's view24, conditional on the simultaneous grant of a 99 year lease to JAWCC, and entry into the Operating Agreement. These cl 3.7.1 conditions were not satisfied, and cl 3.7.1 was eventually cancelled by reason of cl 43 of the Third White City Agreement. The Court of Appeal drew an analogy with Carson v Wood25. JACS submitted and the Club did not deny that that case was not cited to the Court of Appeal by the Club. But that case is distinguishable: there was no relevant condition corresponding, for example, to the 99 year lease condition. And, unlike this case, it was a case involving a corporate joint venture or partnership. Two other authorities on which the Court of Appeal relied may also be distinguished. One was Chan v Zacharia26, dealing with the content of fiduciary duties between partners after the partnership ended. Here there is no partnership, 24 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 25 (1994) 34 NSWLR 9. 26 (1984) 154 CLR 178; [1984] HCA 36. and the Court of Appeal did not see the existence of a fiduciary relationship as crucial to its reasoning27. The other was Baumgartner v Baumgartner28, dealing with the property rights of de facto spouses after their relationship ended. The constantly fluctuating business relationships of JACS and the Club in relation to future events, particularly after it became necessary for them to deal with SGS and Maccabi, are quite different. The Court of Appeal's reasoning: did JACS get its option because of the Club's agreement to surrender its rights? The second critical element in the Court of Appeal's reasoning endeavoured to sidestep the fundamental difficulty created by cl 3.7. The Court reasoned that while, under cl 3.7 of the MOU, JACS could only exercise the option "on behalf of WCH", and while those words did not appear in cl 8(a) of the Third White City Agreement, JACS only received the cl 8(a) option by reason of the Club's surrender of its Lease and Licences in cl 21. Thus the Court of Appeal said29: "the option had been acquired by JACS by reason of the [Club's] the [Club's] involvement undertaking, given by those agreements, to surrender its existing rights to a long term lease over part of the [Club] House and licences to use the tennis courts." (emphasis added) [Agreements] and the White City And later the Court of Appeal said30: "what is critical is that it was the [Club's] participation, in particular by surrendering its existing rights, which enabled JACS to obtain the option. That participation was procured by a promise to exercise the option, if at all, for the benefit of the joint project and, if the project did not proceed, to 27 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 at 100 [64] and 104 [83]. 28 (1987) 164 CLR 137; [1987] HCA 59. 29 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 30 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 at 104 [80]. See also at 88 [5], 103-104 [79] and 105 [89]. allow the [Club] to acquire the [Option Land] for itself. It would in the circumstances have been unconscionable for JACS to disregard that promise by exercising the option for its own benefit." (emphasis added) Similarly, the Club submitted that there was a causal relationship between its agreement to surrender rights and the grant of an option to JACS. It submitted that "the only reason JACS was able to obtain the option and be involved in the joint Project at all" was the agreement by the Club to surrender its "valuable rights in relation to the property". This reasoning departs from a finding of the trial judge. He said31: "It is clear that the [Club] did suffer a detriment in [the Third White City Agreement]. It had a lease terminating in 2020 over a club house and it had licences to use the tennis courts, both of which it surrendered as of 30 September 2007. However, it was bound to do that whether the option was exercised by anybody or not. The only way in which people in different interests to the [Club] and [JACS] would carry on negotiations and grant an option, was if this occurred. Accordingly, although there is a detriment, it is not something that flows from the [Club] to [JACS] and was really a condition precedent in a collateral transaction." The Court of Appeal recorded that the trial judge's finding about the insistence of SGS and Maccabi on surrender of the Lease and Licences was not challenged before it. Nor was it challenged in this Court. That finding is fatal to this second critical aspect of the Club's case. It involves two key points. The first key point correctly made by the trial judge was that on 30 June 2005, Tennis NSW had transferred the White City Land to SGS, and SGS had in turn transferred part of it to Maccabi. Before 30 June, SGS wanted its part of the White City Land to be unencumbered. Maccabi wanted to end up with its part of the White City Land also unencumbered – for some of the rights surrendered by the Club existed over the Maccabi Land rather than the Option Land. Apart from the provision in cl 18 of the Lease that it was terminable on six months' notice in certain circumstances, it was not to expire until 2020. The "detriment" of terminating the Lease was not required by the MOU, to which SGS and Maccabi were not parties. But when they became parties to the Third White City 31 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd [2008] NSWSC 1225 Agreement, it is not surprising that they stipulated for the "detriment" of its termination. Indeed they had done so as early as 15 April 2005, in the First White City Agreement. As Mr James Allardice, then a director of the Club, noted in his report to various other officers of the Club circulated on 4 November 2005, SGS "would not have proceeded with the partnership purchase with [the Club] holding a long term lease over [SGS's] head." That desire of SGS and Maccabi to clear their titles was the crucial matter, not something JACS was pressing. If the Club disliked that outcome sufficiently, it could have relied on its rights under the Lease, including its rights under cl 1832, and declined to agree to the Third White City Agreement. The second key point made by the trial judge was that the agreement by the Club to surrender its rights under the Lease was independent of all questions about options. This point is correct. It may be expanded as follows. The questions whether JACS should be granted an option up to 30 June 2007, whether any option it was granted was exercisable on its behalf or only on behalf of someone else, and whether the Club should be granted an option exercisable in the period 1 July 2007 to 30 September 2007 were all questions entirely independent of whether the sale of the White City Land by Tennis NSW to SGS should be free of the Club's Lease. There is no evidence and no finding that JACS put pressure on the Club to agree to surrender its rights under the Lease and for JACS to receive an option capable of being exercised unconditionally. The agreement to surrender the Lease was necessary if the sale of the land by Tennis NSW to SGS was to take place. But that does not justify the Court of Appeal's conclusion. The earlier authorities The Court of Appeal saw the proposition that JACS acquired its option by reason of agreement by the Club to surrender its rights as a means of bringing the Club's case within certain earlier authorities. In these cases plaintiffs had abandoned their rights to purchase properties in reliance on particular promises or assurances by defendants. 32 See above at [5]. Thus the Court of Appeal relied on Avondale Printers & Stationers Ltd v Haggie33. The Court of Appeal said34: "In that case, the plaintiff abandoned its rights to purchase a property in reliance on the promises of the defendants that they would invest in the development and would grant the plaintiff an option to purchase at the end of 2 years. It was held that the defendants' denial of the common intention of the parties amounted to equitable fraud and that the appropriate remedy was a constructive trust. Mahon J said that the key to the case with which he was concerned lay in the question 'whether the transferor would have parted with his property but for the oral undertaking of the transferee' … In the present case, there was a surrender of rights by the [Club] which was of similar effect and which would not have occurred but for [JACS's] promise to exercise any option it obtained 'on behalf of WCH'." The Court of Appeal went on35: "what is critical is that it was the [Club's] participation, in particular by surrendering its existing rights, which enabled JACS to obtain the option. That participation was procured by a promise to exercise the option, if at all, for the benefit of the joint project and, if the project did not proceed, to allow the [Club] to acquire the [Option Land] for itself." In this Court JACS challenged the Court of Appeal's reasoning. First, it said that the Club's purported surrender of rights under the Lease was not contemporaneous with the MOU or conditional in any way upon it. Secondly, it said that the Club's purported surrender of rights occurred in the context of gaining additional rights from SGS and Maccabi under the Third White City Agreement. Thirdly, it said that there was no testimonial or other evidence which could support the inference that the alleged surrender of rights would not have occurred but for the MOU. Fourthly, it said that in contrast to Avondale Printers & Stationers Ltd v Haggie, the present case was one in which there was 33 [1979] 2 NZLR 124. 34 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 35 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 no demonstrated relationship between the conduct of JACS and the course taken by the Club in relation to giving up its Lease rights. These criticisms are sound. The facts of Avondale Printers & Stationers Ltd v Haggie were correctly summarised by the Court of Appeal36. There is no analogy between them and a promise on 28 February 2005 by JACS to the Club that if JACS obtained an option it would, on certain conditions, exercise it on behalf of WCH, followed four months later by the Club's agreement to surrender the Lease in the Third White City Agreement, to which there were two further parties, and which granted an unconditional option to JACS followed by another option to the Club. There is no demonstrated connection between the grant of the unconditional option to JACS and the agreement to surrender its rights by the Club. JACS's criticisms invalidate the analogy which the Court of Appeal drew37 with Pallant v Morgan38. They also prevent any analogy being drawn with Banner Homes Group Plc v Luff Developments Ltd39, as the Club sought to do in this Court. In these cases, JACS submitted, rival purchasers for a particular property agreed that one would not enter into negotiations. Each case turned on a finding that the non-acquiring party had acted upon a firm arrangement to stay out of the market. No such finding was made and no such finding would have been sustainable in the present case. Rather, the Club negotiated its own alternative option exercisable in the event that JACS did not proceed. These submissions are correct. The trial judge quoted40 Chadwick LJ's summary of the English position thus41: 36 See above at [65]. 37 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 40 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd [2008] NSWSC 1225 41 Banner Homes Group Plc v Luff Developments Ltd [2000] Ch 372 at 398. that is necessary the pre-acquisition arrangement or understanding should contemplate that one party ('the acquiring party') will take steps to acquire the relevant property; and that, if he does so, the other party ('the non-acquiring party') will obtain some interest in that property. Further, it is necessary that (whatever private reservations the acquiring party may have) he has not informed the non-acquiring party before the acquisition (or, perhaps more accurately, before it is too late for the parties to be restored to a position of no advantage/no detriment) that he no longer intends to honour the arrangement or understanding." This is difficult to apply to JACS's promise in cl 3.7.1 to acquire property on certain conditions followed by its acquisition of the option in cl 8(a) of the Third White City Agreement and the Club's acquisition of its option in cl 8(b). The agreement of JACS and the Club to cl 8 of the Third White City Agreement was an agreement that the cl 3.7 regime was no longer to prevail. The trial judge said42: "for this equity, one needs to look at the understanding or arrangement made between the parties which kept the plaintiff out of the market. We just do not know what the details of the underlying arrangements were. There can be speculation that neither party felt that it could proceed without involvement by another party. It is not a situation where there were necessarily two competing bidders and one decided not to bid on an understanding with the other." The Court of Appeal criticised the trial judge for saying this. The Court of Appeal said there were no further "details of the underlying arrangements" which "needed to be known."43 But if the Club were not to be held to cl 8(a) of the Third White City Agreement, it can only have been because of some "underlying arrangements" distinct from the regime in cl 3.7 of the MOU, which was mutually abandoned by the parties in cl 8 of the Third White City Agreement. As noted above44, the Club did not rely on any arrangements beyond the terms of the MOU and the Third White City Agreement. 42 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd [2008] NSWSC 1225 43 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 44 See at [46]. There is an additional problem with the Club's reliance on Pallant v Morgan and Banner Homes Group Plc v Luff Developments Ltd. They are cases where the parties' agreement that one of them should buy property for the advantage of both operated as an inducement to the other not to bid against the buyer45. Here there is no general agreement or inducement of that kind. There was an agreement that JACS would exercise an option on behalf of WCH if, simultaneously, two conditions were satisfied. There was silence, both in the MOU and the Third White City Agreement, on what would happen if the option were exercised without those conditions being satisfied. But there was no inducement to the Club not to seek from SGS and Maccabi the two options which JACS obtained in cl 8, one for itself, one for the Club. The Club also relied on Cobbe v Yeoman's Row Management Ltd46. This is not a good precedent for the declaration of a constructive trust in the present case. The House of Lords refused to grant that remedy. Instead it ordered relief by way of quantum meruit, which was not sought here. And it did so after rejecting a claim for proprietary estoppel, which was not made here. The Club endeavoured to sidestep these difficulties by advancing a submission which went beyond the Court of Appeal's reasoning. It was: "[The Club], to the knowledge of JACS, surrendered its then existing rights over the White City [Land], in reliance on the completion of the Project by JACS … To [JACS's] knowledge, this step meant that [the Club] was relying on fulfilment of the Project for its members to obtain the purpose for which the Club was formed and operated, so that either the clause 8(a) option would be exercised for the benefit of WCH, and in turn 45 See Megarry J's discussion in Holiday Inns Inc v Broadhead unreported, 19 December 1969, quoted in Banner Homes Group Plc v Luff Developments Ltd [2000] Ch 372 at 391 ("is thereby induced to refrain from attempting to acquire the property"). 46 [2008] 1 WLR 1752 at 1766 [24] and 1769-1772 [30]-[37]; [2008] 4 All ER 713 at 728-729 and 732-735. See Getzler, "Quantum Meruit, Estoppel, and the Primacy of Contract", (2009) 125 Law Quarterly Review 196; McFarlane and Robertson, "Apocalypse Averted: Proprietary Estoppel in the House of Lords", (2009) 125 Law Quarterly Review 535; Thomas and Hudson, The Law of Trusts, 2nd ed (2010) the members of [the Club], or [the Club] would be entitled to exercise its own option under clause 8(b)." A reference was given to part of the Court of Appeal's reasons for judgment quoted above47. That passage does not support the submission. The submission seeks to characterise the case as falling into the Pallant v Morgan line of cases. The evidence will not permit this. The submission would only be sound if cl 8(a) expressly required the option to be exercised "for the benefit of WCH". The Club submitted that the Pallant v Morgan line of cases "stand[s] broadly" for the proposition that if there is an arrangement which deals with the acquisition of property but which fails to address, by reason of its uncertainty, deficiency or unenforceability, an eventuality which is contrary to a central tenet of the arrangement, and this failure results in the conferral on one party or its nominee of an opportunity to perform an act in its self-interest and acquire the property contrary to that tenet, that act, in denying to the other party the opportunity which it obtained as a result of the arrangement, is unconscionable. First, the cases do not support this proposition. They depend on something more than uncertainty, deficiency or unenforceability. the factual prerequisites to the proposition are absent in the present case in several respects. Secondly, The critical integers in the Court of Appeal's conclusion that JACS's behaviour was unconscionable, then, related to the alleged breach of cl 3.7 and the surrender by the Club of its rights pursuant to cl 21 of the Third White City Agreement. Each was intrinsically flawed. Each operated at a high "level of abstraction involved in notions of unconscientious conduct in some loose sense where all principles are at large."48 Flaws in constructive trust JACS submitted that the Court of Appeal erred when, in deciding that a constructive trust was the appropriate remedy, it failed to take into account a crucial factor – the impact of such a trust upon the then existing rights of third 47 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 at 99-100 [63]; see at [31] and [59]. 48 Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315 at 324 [20] per Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ; [2003] HCA 57. parties, here the unregistered mortgage over the Option Land held by Walker Corporation. That submission is correct for reasons more conveniently examined in dealing with the Walker Corporation appeal49. An aspect of the Club's constructive trust case in this Court is that, at least once JACS had acquired the cl 8(a) option, JACS owed a fiduciary duty to the Club corresponding with the duty it owed under cl 3.7.1, and this underpinned the constructive trust. If so, why were that duty and that constructive trust not conditional on WCH simultaneously granting to JAWCC a 99 year lease and entering into the Operating Agreement? The Club's defence of the constructive trust seeks to brush aside the non-existence of WCH and the non-fulfilment of the conditions on which JACS's exercise of the option depended. This is a curious outcome in a court of equity. It is now necessary to turn to the fiduciary relationship question. The Court of Appeal's reasoning: fiduciary relationship The Court of Appeal did not see the existence of a fiduciary relationship as necessary for its conclusion that a constructive trust be imposed. But it did conclude that JACS was bound by a fiduciary duty owed to the Club to exercise the option granted by cl 8(a) of the Third White City Agreement in a particular way. However, in this Court the Club appeared to place primary emphasis upon the constructive trust in its favour as the appropriate remedy for breach of a fiduciary duty owed to it by JACS. The Court of Appeal said50: "By contractually agreeing to a provision in terms of cl 3.7.1, the [Club] was relevantly placing itself in the hands of JACS. From that point on it had to trust that JACS would exercise any such option 'on behalf of WCH', as it said it would. It relied on [JACS's] commitment to do so by surrendering its rights in respect of the White City [Land]. It was 49 See below at [126]-[130]. 50 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 vulnerable to abuse of that commitment by JACS as such abuse might lead to the loss to the [Club] of the opportunity to acquire a valuable property and the opportunity to continue on the White City [Land] an activity it had been conducting there for over 55 years." The Court of Appeal also said51: "In light of the terms of the MOU and the assistance provided by the [Club] after the MOU to procure the option for JACS, including by surrender of the [Club's] existing rights, the option was one which the [Club] was entitled to expect would not be exercised by JACS in its own interests." The Club's submission, which the Court of Appeal accepted, rests heavily on the twin ideas of vulnerability and reliance: the Club was relying on JACS to exercise the cl 8(a) option only on behalf of WCH or not at all, and was vulnerable to JACS not doing so. Here the contracts to which JACS and the Club were parties are important in assessing whether JACS was bound by a fiduciary duty in relation to its exercise of the cl 8(a) option. The MOU obliged JACS to obtain an option, and exercise it in a certain way and on certain conditions. Before the First White City Agreement, JACS had not been able to obtain an option to buy part of the White City Land. By that Agreement, and the Second and Third White City Agreements, it obtained an option, and the Club obtained an additional option after the JACS option expired. The Club, as party to the Third White City Agreement, consented to the unconditional nature of JACS's option. The Club could have bargained for more precision in cl 8, using its ability to refuse to agree to surrender the Lease. It apparently did not. The Club was not relying on representations by JACS. It was not overborne by some greater strength possessed by JACS. It was not depending on JACS to carry out dealings of which the Club was necessarily ignorant. It was not trusting JACS to do anything. What JACS and the Club did in relation to the Third White City Agreement and the exercise of JACS's option under cl 8(a), they did consulting their own interests, with knowledge of what the other was doing. The trial judge 51 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 examined correspondence between the Club and JACS in late March and early April 2005, and characterised it thus52: "far from the [Club] leaving everything to [JACS] …, [the Club] considers that the arrangement was that the parties would work out the bid strategy together, a situation that Mr Alexander appears to have accepted. Furthermore, the [Club] was threatening that unless something [happened] by 4 April 2005, it would take immediate action to do something else. This implies that at all material times it considered that it was free to take such action." And the trial judge recorded his "strong impression that instead of there being an arrangement whereby the [Club] entrusted JACS to act on its behalf, the [Club] was going to act on its own behalf unless JACS complied with its demand."53 The only vulnerability of the Club was that which any contracting party has to breach by another. The only reliance was that which any contracting party has on performance by another. If JACS committed any breach of contract, it was quite open about it. If the Club could have established that JACS was in breach of contract, it had an ample array of contractual remedies to protect itself. It chose not to do so. It spoke of the difficulty of a social club giving an undertaking as to damages, and of the inutility of damages to a social club which wishes to continue its past activities in a new guise on the same site. It also said that monetary remedies against impecunious companies like JACS and Poplar were worthless. These factors do not justify converting the contractual relationship between JACS and the Club into a fiduciary relationship. The Club's arguments in this Court for a fiduciary relationship In this Court the Club went beyond the Court of Appeal's approach. It sought leave to rely on a Second Notice of Contention in relation to its fiduciary relationship case. That leave should be granted. 52 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd [2008] NSWSC 1225 53 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd [2008] NSWSC 1225 The Club relied on Hospital Products Ltd v United States Surgical Corporation54. The Club contended that, analogously with the reasoning of Mason J in that case, the MOU constituted an undertaking by JACS to acquire property on the Club's behalf and hold it for interested parties. The parties accepted that the relevant principles regarding the existence of a fiduciary relationship which does not fall within an established category, and the incidents of such a relationship, are those stated by Mason J in that case. This is so notwithstanding that Mason J was in dissent. Gibbs CJ, Wilson, Deane and Dawson JJ each decided that the relationship between Hospital Products International Pty Ltd ("HPI"), controlled by Mr Blackman, and the first respondent ("USSC") rested purely in contract between USSC as manufacturer and HPI as Australian distributor and was not supplemented by any fiduciary relationship. Mason J began his treatment of the issue whether HPI was a fiduciary by identifying the critical feature of what may be called the accepted traditional categories of fiduciary relationship – trustee-beneficiary, agent-principal, solicitor-client, employee-employer, director-company, and partners inter se. That critical feature was "that the fiduciary undertakes or agrees to act for or on behalf of or in the interests of another person in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense."55 From this power or discretion comes the duty to exercise it in the interests of the person to whom it is owed56. Justice Lehane, writing extra-judicially, made two points relevant to the present question. The first point is that phrases such as "for or on behalf of" (and "in the interests of") another person must be understood in a reasonably strict sense, lest the criterion they formulate become circular57. No doubt undertaking to act in this way is inherent in the position of trustee administering a trust, director participating in the control and management of a company, partner acting in the conduct of the partnership business and employee acting in the 54 (1984) 156 CLR 41; [1984] HCA 64. 55 (1984) 156 CLR 41 at 96-97 (emphasis added). 56 (1984) 156 CLR 41 at 97. 57 Lehane, "Fiduciaries in a Commercial Context", in Finn (ed), Essays in Equity, course of the business of the employer, for example. Further, such an undertaking may be found in the facts of a particular case. So, in Boardman v Phipps58 the issue which divided the House of Lords was whether the acquisition of the shares in contention, by Mr Boardman and the other defendant, fell within the scope of the transactions for which they had been engaged on behalf of the trustees of the deceased estate. Again, the contractual joint venture involving the use of architectural plans contributed by one party, which was considered in Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd59, also had fiduciary characteristics. But, as Justice Lehane asked60: "[W]hen is a contractual stipulation inserted for the benefit of one party (even if offered by the other party) an undertaking to act for or on behalf of that party and therefore to act, in relation to the contract, solely in the interests of that party? When does an offer to enter into a contract proposed by one party as a deal which will benefit the other (as well as himself) become such an undertaking by the former to the latter?" That leads to Justice Lehane's second point. This is that the reason why commercial transactions falling outside the accepted traditional categories of fiduciary relationship often do not give rise to fiduciary duties is not that they are "commercial" in nature, but that they do not meet the criteria for characterisation as fiduciary in nature61. The point is illustrated in the Hospital Products case by Deane J's the distributorship contract between USSC and treatment of Mr Blackman's company as follows62: "The express term of the contract in the present case requiring the distributor to use its 'best efforts' to build up the market for, and distribute, 59 (2006) 229 CLR 577 at 584 [15], 613 [124], 628 [156]; [2006] HCA 55. 60 Lehane, "Fiduciaries in a Commercial Context", in Finn (ed), Essays in Equity, 61 Lehane, "Fiduciaries in a Commercial Context", in Finn (ed), Essays in Equity, 62 (1984) 156 CLR 41 at 122-123. the products in Australia 'to the common benefit' of both manufacturer and distributor did not, of itself, impose a general fiduciary duty on the distributor to seek no profit or benefit for itself or to disregard its own interests where they conflicted with the manufacturer's. In the context of the term precluding the distributor from dealing in any competing product, the reference to 'the common benefit' was no more than a reflection of the commercial fact that, while the distributorship subsisted, it was in the interests of both manufacturer and distributor that, consistently with ordinary economic restraints on pricing, the market for the manufacturer's product in the relevant area be maximized." In the Hospital Products case, Mason J spoke in terms consistent with the later discussion of the case by Justice Lehane, and added an important statement of principle which, JACS correctly submitted, governs the present appeal. His Honour said of cases where contract provides the foundation for a fiduciary "In these situations it is the contractual foundation which is all important because it is the contract that regulates the basic rights and liabilities of the parties. The fiduciary relationship, if it is to exist at all, must accommodate itself to the terms of the contract so that it is consistent with, and conforms The fiduciary relationship cannot be superimposed upon the contract in such a way as to alter the operation true which construction." to have according the contract was intended them. its The terms of the contract include not only those expressed, but those implied, particularly those implied pursuant to the principles in Codelfa Construction Pty Ltd v State Rail Authority of NSW64. In the Hospital Products case, all members of this Court disagreed with the primary judge's finding of an implied term that HPI do nothing inimical to the market in Australia for the surgical stapling products of USSC65. They did so on the ground that it went beyond what was necessary to give the contract business efficacy. Where a term 63 (1984) 156 CLR 41 at 97. See also Keane, "The 2009 W A Lee Lecture in Equity: The conscience of equity", (2010) 84 Australian Law Journal 92 at 98-101. 64 (1982) 149 CLR 337 at 352-355; [1982] HCA 24. 65 (1984) 156 CLR 41 at 63-67 per Gibbs CJ, 95-96 per Mason J, 117-118 per Wilson J, 121-122 per Deane J and 138-141 per Dawson J. to like effect as the suggested fiduciary obligation cannot be implied, it will be very difficult to superimpose the suggested fiduciary obligation upon that limited contract. The Club here eschewed any attempt to imply a term into the MOU to the effect of the fiduciary obligation for which it contended. Further, the limited fiduciary obligation found by Mason J in the Hospital Products case sprang from USSC having entrusted the distributor with the protection, promotion and custodianship of its product goodwill in Australia. This created USSC's vulnerability to the distributor's abuse of its position66. Mason J's characterisation cannot be transposed to the relationship between the Club and JACS. USSC was a remote principal lacking the capacity to observe what was happening half the world away. Mr Blackman and his company were the only persons in contact with the Australian market. They were in a position to take every opportunity to enrich themselves at USSC's expense. Mason J summarised the relevant opportunities open to Mr Blackman thus67: the distributorship would enable him to know or become known to purchasers of USSC's products in Australia, without labouring under the handicap of being a competitor; the distributorship would enable him to establish surreptitiously a manufacturing capacity; he would be able to obtain finance from USSC and other sources; he would be able to reduce the promotion and sale of USSC's products before the distributorship and satisfy outstanding orders with products containing Australian-made components; and terminating he could supply his own products to existing customers who might readily believe that he was acting with the authority of USSC." In contrast, the Club was in constant contact with JACS, and in close contact with SGS and Maccabi. All parties were operating in a small part of Sydney. The Club was in an excellent position to observe the changing scene and protect its interests. Even if JACS was in a position to deal secretly or misleadingly with 66 (1984) 156 CLR 41 at 101. 67 (1984) 156 CLR 41 at 87-88. SGS and Maccabi, it was not alleged to have done so. There was no entrustment or custodianship to be abused. The Club advanced the following contentions. It did not matter whether the contention that cl 3.7 on its true construction created a contractual obligation on JACS never to exercise the option on its own behalf was correct68. Even if it were not correct, the MOU taken as a whole – including its annexures – constituted an arrangement, some parts of which were legally enforceable and some not. One term of the arrangement was that if JACS acquired an option in negotiations with SGS, it would be held for the benefit of WCH, or if that option were not exercised, the Club would have an option. And even if that term did not exist, leaving a lacuna in the arrangement, it would be filled by recognising fiduciary duties. The duties arose from JACS's promise to do something on behalf of others – gaining the option – which precluded JACS from making a personal gain. This was particularly the case where the option was to be exercised on behalf of WCH, which was in an especially vulnerable position since it did not exist. The Club stressed the proposition that cl 8(a) answers the description of cl 3.7.1, and cl 8(b) answers the description of cl 3.7.2. But that proposition is seen to be unsound when cl 3.7 is read in the light of cl 1.8.2. Clause 1.8 stated that JACS was negotiating with a third party with a view to entering an agreement with the third party which was to include a term whereby the third party granted an option to JACS on behalf of WCH. Clause 8(a) granted an option to JACS, but said nothing about WCH. The Club submitted that that would have been a matter of no concern to SGS and Maccabi, the other parties to the White City Agreements. That is probably so, but it remains the case that cl 8 moves sharply away from cl 3.7. A new construction argument: cll 3.7.2, 8(b) and 42 It is convenient at this point to deal with an argument of construction which the Court of Appeal did not employ but which was advanced by the Club in this Court. The Club submitted that: cl 42 of the Third White City Agreement provided that each of the Club and JACS "agrees to carry out its obligations under" the Third White City Agreement in accordance with the MOU; 68 Discussed above at [45]-[50]. the cl 3.7.2 option was to be procured by JACS in favour of the Club if "JACS is unable to or fails to exercise" the cl 3.7.1 option in accordance with its terms, and the same was true of the cl 8(b) option; therefore the cl 8(a) option could only be exercised by JACS on behalf of WCH. If this submission were sound, it would make all of the other submissions of the Club unnecessary. One fallacy in the submission lies in step (c). It does not follow from the preceding steps. There is also a problem in step (a). It would have been much easier to achieve the effect attributed to cl 42 by the use of specific language in cl 8 corresponding with that of cl 3.7, than by the general words of cl 42. Another difficulty is that if the argument were correct, JACS's breach of duty would not primarily be a breach of fiduciary duty or an equitable fraud or an item of unconscionable conduct, but a breach of a contractual covenant – cl 8 of the Third White City Agreement. No allegation that the Third White City Agreement had been breached was persevered in at trial. And to impose a constructive trust for a breach of contract would be, if not an impossible step, at least a very unusual and extreme one. Other potential difficulties in the fiduciary relationship case In view of the fact that it is possible to allow the appeal for the reasons set out above, it is unnecessary to deal conclusively with certain other difficulties in the Club's position. They can be summarised thus. The Club submitted that once JACS obtained the option under cl 8(a) of the Third White City Agreement, it could only exercise it "on behalf of WCH". If, by 30 June 2007, WCH had not come into existence, the Club's cl 8(b) option would spring into existence. The Club also submitted that the cl 8(a) option was a proprietary interest; it was held by JACS not on its own behalf, but on behalf of WCH, and, until that company was incorporated, "for and on behalf of the participants in the Project, including [the Club], whose members were intended to receive the benefits of the exercise of the option." It was also said to be held "for the benefit of [JACS] and [the Club] pursuant to the obligation on both parties to bring the Project to fruition". When JACS was not "acting in furtherance of the Project", it was required "to act not in its own interest, but in the interests of, and for or on behalf of, [the Club], in the exercise of a proprietary right". It was also submitted that "prior to the incorporation of WCH, JACS held the clause 8(a) option for and on behalf of [the Club], as representative of the members of [the Club] (because the members of WCH were to include all such members of [the Club] who chose to take up membership of WCH)". JACS held the option on trust, and hence a fiduciary duty arose. If JACS held the option on trust, was the trust express? The language of cl 3.7 and cl 8 is not suggestive of any express trust. If it was an express trust, and WCH was the beneficiary after incorporation, who was the beneficiary before that time? The Club submitted that it was the beneficiary "as representative of" its members. In that respect the trust would be that type of resulting trust which arises when there has been an incomplete disposition of the beneficial interests. Alternatively, it may only be a trust for a non-charitable purpose – a creature of doubtful and limited validity. If the beneficiary of the trust was WCH, since the MOU obliged JACS to bring it into existence, was there an enforceable duty that it do so? The MOU taken as a whole is such that it is unlikely that a court would decree specific performance of any of its parts. These complications, which were briefly touched on by the trial judge69, raise a problem which, as he said, "makes it less likely that there is … a fiduciary duty at all." Conclusion on equitable fraud, unconscionable conduct and breach of fiduciary duty Judge Learned Hand said: "in commercial transactions it does not in the end promote justice to seek strained interpretations in aid of those who do not protect themselves."70 And where interpretations, strained or otherwise, will not help, assistance to those persons by a strained application of equitable ideas does not promote justice either. The Club's defence of the orders in the Court of Appeal creates an unacceptable amount of strain of these kinds. Was the MOU validly terminated? Since the constructive trust in favour of the Club depended on some equity inherent in the contractual obligations created by the MOU, JACS argued that a valid termination of the MOU would be fatal for the constructive trust. However, in neither the reasoning of the Court of Appeal, nor the submissions of the Club, 69 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd [2008] NSWSC 1225 70 James Baird Co v Gimbel Bros Inc 64 F 2d 344 at 346 (2nd Circ Ct of Appeals, 1933) (delivering the judgment of himself, Judge Manton and Judge Swan). was the issue of whether the MOU had been terminated decisive. Further, for reasons given above, even if it is assumed that the MOU remained on foot, there is no justification for imposing a constructive trust. Accordingly it is not necessary to consider whether the MOU was validly terminated. However, it must be said that even if it were not validly terminated, the evidence bearing on that topic reveals that relations between JACS and the Club had become hostile by 27 June 2007. The case raises a question which need not be answered. Even if, to terminate a contract, there must be breach which an innocent party uses as the basis for termination, in what circumstances can the duties arising out of a fiduciary relationship come to an end if the relationship has broken down without being terminated formally by an innocent party? It is desirable briefly to discuss the technique employed by the trial judge in deciding that the termination was valid. The trial judge's technique in relation to the termination of the MOU The trial judge, after setting out the Notice of Termination with particulars which JACS gave the Club on 12 April 2006, quoted the written submissions of JACS advanced to him (omitting evidentiary references). The trial judge then said71: "I cannot see any answer to those submissions, nor can I see where the plaintiff has provided any such answer. The real question is whether adding them all up they amount to a party indicating that it was not prepared to perform its contract." He said that there was no doubt that the answer to the question was "Yes". The Court of Appeal, after saying that it did not regard the question whether the MOU was validly terminated as crucial to the Club's claim for a constructive trust, continued72: 71 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd [2008] NSWSC 1225 72 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 "Ordinarily, it would be appropriate … to nevertheless express … views as to the correctness of the primary judge's conclusion that the [Club] repudiated the MOU and in consequence JACS validly terminated that agreement. That is not appropriate in this case because of the absence of detailed consideration by the primary judge of matters relevant to the repudiation issue. His Honour's conclusion … was based upon an acceptance, without individual consideration, of some thirteen sub- paragraphs of [JACS's] submissions which his Honour set out. His conclusion that there had been a repudiation after 12 April 2006 was also founded upon an acceptance, again without individual consideration, of written submissions of JACS which his Honour set out. The submissions which his Honour accepted were expressed in general terms and, at times, in emotive language. Detailed consideration needed to be given to whether the matters relied upon were capable of constituting repudiatory conduct and, if they were, of the evidentiary foundation for them." The Court of Appeal said the "need for detailed analysis" was illustrated by the first three of JACS's submissions quoted by the trial judge. The Court of Appeal quoted them and made some brief criticisms of them73. These criticisms themselves could not be described as "detailed consideration" or "detailed analysis". But that response is not enough. This rebuke by the Court of Appeal rests on a misunderstanding of what the trial judge did. Although sometimes the submissions of counsel are entirely correct, and can be accepted in terms, the danger of recording a bare acceptance of them is that the reader of the judgment may lack confidence about whether the mind of the responsible judge actually did assimilate and evaluate the competing points of view. But the trial judge did not just record a bare acceptance of JACS's submissions. One thing he said was that the Club had not provided any answer to JACS's submissions – which were detailed, and supported by specific evidentiary references. His statement was true, for all the Club said was: 73 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 "(1) The evidence does not make good the alleged breaches relied on by JACS, rather the matters relied upon by JACS illuminate the conduct of JACS and its officers; (2) Neither [has JACS] established that any of the alleged breaches were fundamental, in the sense of going to the root of the MOU contract, and thereby entitled JACS to terminate; (3) Whilst a minority of the board of [the Club] (including the President), and a minority of the members, were against the Project with JACS, JACS cannot point to internal disagreements and disputes within [the Club], nor the conduct of one person towards JACS, as sufficient to show a breach by [the Club]". These submissions did not join issue with JACS's submissions at the necessary level of detail. Another thing the trial judge said was that in their totality, as distinct from being taken bit by bit, the items of behaviour on the part of the Club revealed it to be indicating a lack of preparedness to perform its contract. Whether or not the trial judge was correct in that conclusion – and the Court of Appeal did not say he was incorrect – in the circumstances his manner of expressing it was not open to criticism. Just allowances JACS contended that the Court of Appeal erred in failing to remit to the Equity Division JACS's claim for just allowances. It is understandable that those appearing for parties against whom breach of fiduciary duty is alleged do not wish to stress a claim for just allowances: this smacks too much of confession and only partial avoidance, and dilutes the righteous impression which those full- bloodedly denying a breach of fiduciary duty would wish to create. However, generally it is procedurally essential, tactically unpleasing though it may be, for a defendant who may have to rely on such a claim either to obtain an order for a separate trial of that issue or to call evidence on the claim which will permit whichever court has to deal with the issue to do so. Neither course was taken here. Conclusion on the JACS appeal The JACS appeal must be allowed. That and the other orders appear below74. Appeal S308 of 2009: the Walker Corporation appeal The background The procedural background. The unsuccessful attempt of Walker Corporation to set aside the constructive trust in the Court of Appeal has already been described75. Walker Corporation's mortgage. On 26 June 2007 a mortgage ("the Mortgage") over the Option Land was executed by Poplar in favour of Walker Corporation to secure advances of approximately $16m, repayable in June 2010. The Mortgage was not immediately in registrable form but it is common ground that the intention was that it cover the Option Land. The Mortgage was enforceable by Walker Corporation by equitable remedies against Poplar as registered proprietor of the Option Land. The entitlement of Walker Corporation to registration, with what then would be the protection of the indefeasibility provisions of the RP Act, was liable to displacement in favour of a later claimant seeking registration if that claimant had the advantage conferred by s 43A of the RP Act. The text of s 43A is so drawn as to have given rise to notorious difficulties in construction76. However, it is now settled that the provision is directed to the protection before registration of an interest under a registrable instrument and confers upon the holder of that interest the same protection against notice of an earlier unregistered interest as that which is achieved by a purchaser who acquires the legal estate at common law77. By this means there is 75 Above at [35]. 76 IAC (Finance) Pty Ltd v Courtenay (1963) 110 CLR 550 at 583-585; [1963] HCA 77 Meriton Apartments Pty Ltd v McLaurin & Tait (Developments) Pty Ltd (1976) 133 CLR 671 at 676; [1976] HCA 30; Black v Garnock (2007) 230 CLR 438 at 450 [33]; [2007] HCA 31. introduced into the administration in New South Wales of the Torrens system an analogy to the doctrine of bona fide purchaser as a means of regulating priorities between competing claimants to registration of unregistered dealings. If the Club were to assert a better claim to registration as unencumbered proprietor of the Option Land, pursuant to the declaration of constructive trust made by the Court of Appeal on 3 June 2009, this could be made good only if at that date the Club had no notice of the existence of the Mortgage. But there was evidence that it had such notice. These circumstances had several important and related consequences for the litigation between the Club and JACS (and Poplar), to be developed in more detail below. The first was that Walker Corporation had become a necessary party to the proceeding and that it was, at its peril, the responsibility of the Club to see to the proper constitution of its suit. The second was that a remedial constructive trust which would seek to provide an unencumbered registered title for the Club to the Option Land would not be an available or appropriate remedy. The third was that, contrary to the stance which seems to have been taken by the Court of Appeal and was supported by the Club in this Court, the field for contention was not subsequent litigation of what is described as disputed priority between the Club and Walker Corporation; rather, the issue should have been whether that dispute was to be created in the first place by the decision, in the absence of Walker Corporation, to declare Poplar a constructive trustee for the Club. The fourth consequence, in more general terms, was to provide an example of the caution required in imposing a remedial constructive trust to ensure that the legitimate interests of third parties will not be adversely affected. Walker Corporation's charge. On 26 June 2007, Poplar also created a floating charge ("the Charge") over its assets. As from 27 June, those assets included the Option Land. The Charge secured the same debt as the Mortgage. The Charge provided that it automatically became a fixed charge if Poplar allowed another "Encumbrance" (for example the constructive trust) to exist or arise. Hence the Charge became fixed at precisely the same time as the constructive trust arose. The time when the constructive trust arose. The Court of Appeal's orders are unclear as to whether the constructive trust arose at the time the Court made the orders on 3 June 2009, or at some earlier time – for example, as the Club contended, the time when the option was exercised on 27 June 2007. While ordinarily the remedy of constructive trust would have been selected from a range of possible remedies, by the time the orders were made it was the only remedy sought. But whenever the constructive trust arose, the Club would not have been able to obtain unencumbered registration of the transfer to it pursuant to the constructive trust unless it was taking for value and without notice of prior interests. It should be noted that the Mortgage was executed on 26 June 2007 and the option was exercised thereafter on 27 June 2007. Evidence of the Club's notice of the Mortgage and Charge. There was evidence before the trial judge that the Club had notice of the Mortgage and the Charge. For example, before the trial judge, the Mortgage was in evidence; there was evidence of the Charge; and there was evidence of negotiations between Walker Corporation and JACS for the provision of finance to buy the Option Land which were known to the Club before 27 June 2007. At the hearing before Tobias JA on 6 April 2009 which led to the grant of an interlocutory injunction to prevent Walker Corporation's mortgage being registered, evidence was tendered establishing the existence of the Mortgage, the Charge and the advance by Walker Corporation of the funds to enable exercise of the option. There was before the Court of Appeal, in relation to Walker Corporation's Amended Notice of Motion dated 22 June 2009, the following additional evidence, some on information and belief only. In early June 2007 the Managing Director of Walker Corporation told the President of the Club that the Club should operate on the basis that Walker Corporation was funding "Mr Alexander's company" to enable it to purchase the Option Land and that Walker Corporation was preparing to take security over the Option Land. On 25 June 2007 the Managing Director of Walker Corporation was sent a copy of a letter from the Club's solicitors to JACS threatening the institution of proceedings to enforce contractual rights – "to ensure JACS complies with its obligations under the MOU." That letter did not refer to any application for a declaration that a constructive trust existed over or should be imposed on the Option Land, nor did it claim that JACS or Poplar owed the Club any fiduciary duty. The letter to JACS stated the intention of the Club's solicitors "to forward a copy of this letter to Walker Corporation who has been involved in recent discussion with representatives of JACS and our client." The Club tendered no evidence to contradict Walker Corporation's evidence to the effect that, before Poplar acquired the Option Land, the Club knew that Walker Corporation was financing the purchase and would take security over the Option Land. Walker Corporation tendered evidence that, if the Club had claimed that whoever acquired the Option Land would hold it on trust for the Club, it would not have proceeded to fund the acquisition. And it tendered evidence that no claim that either a trust or a fiduciary duty existed had been made to it by the Club. Walker Corporation also tendered evidence that, on settlement of the purchase of the Option Land, a solicitor representing the Club produced to the solicitor for SGS a withdrawal of a caveat claiming "[a] legal interest as a party granted an option to purchase the [Option Land]." That was a withdrawal of the only claim that the Club had ever made up to that time to a proprietary interest in the Option Land. Walker Corporation's submission: Giumelli v Giumelli Walker Corporation submitted that before deciding to declare the constructive trust the Court of Appeal ought to have borne in mind the impact that that course would have on Walker Corporation's unregistered mortgage, of which the Club had notice, and of which the Court of Appeal was or ought to have been aware. The submission was correct, for reasons given in the line of cases associated with Giumelli v Giumelli78. The evidence may not have been complete. It may not have been perfect in form. But there was sufficient evidence of the Club having notice in the record as it stood before 3 June 2009 to justify the matter being taken into account in deciding whether to declare a constructive trust79. Indeed the Court of Appeal in its first judgment seems to have been seised of it, because, leaving aside the evidence earlier called before Tobias JA, which may not have been within its immediate contemplation, in rejecting JACS's request for an order that its just allowances claim be remitted to the Equity Division, it referred to evidence revealing that Walker Corporation was Poplar's financier. The evidence 78 (1999) 196 CLR 101 at 113-114 [10] and 125 [49]-[50]; [1999] HCA 10; Bathurst City Council v PWC Properties Pty Ltd (1998) 195 CLR 566 at 584-585 [40]-[43]; [1998] HCA 59; Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at 172 [200]; [2007] HCA 22. See also Muschinski v Dodds (1985) 160 CLR 583 at 623; [1985] HCA 78, where Deane J would only have imposed a constructive trust from the date when the Court's reasons for judgment were published, "[l]est the legitimate claims of third parties be adversely affected". 79 See above at [119]-[120]. became ampler after 3 June and before the second judgment was delivered on 23 July: in particular, the evidence that Walker Corporation would not have proceeded had it known a trust was to be claimed over the Option Land. A constructive trust ought not to be imposed if there are other orders capable of doing full justice. In its Further Amended Statement of Claim the Club sought equitable compensation and an account of profits. It abandoned those claims in the Court of Appeal. Counsel for the Club submitted that equitable compensation would not have been a just remedy on the ground that JACS and Poplar were without significant assets. But that possibility does not affect the remedy of account of profits. The Club submitted that the arrangements in place between Walker Corporation, JACS and Poplar precluded either JACS or Poplar making a profit out of the exercise of the option. That submission is contested by Walker Corporation. That submission must be controversial, since Tobias JA made a finding on 6 April 2009 which contradicts it. The resolution of this controversy is something which ought to have taken place in the courts below had the proceedings been properly constituted. If it is true, as the Club submits, that Walker Corporation is controlling the litigation and will make all the profits from the exercise of the option, it may be that an order for equitable compensation or an account of profits could have been made against it. In any event, it is not a complete answer to Walker Corporation's reliance on Giumelli v Giumelli that remedies other than a constructive trust may lack practical utility because of the impecuniosity of those against whom they are sought. One point made in the Giumelli v Giumelli line of cases is that care must be taken to avoid granting equitable relief which goes beyond the necessities of the case. Another point in those cases is that third party interests must be borne in mind in deciding whether a constructive trust should be granted. That line of cases does not permit a constructive trust to be declared in a manner injurious to third parties merely because the plaintiff has no other useful remedy against a defendant. On this ground alone, were it necessary to do so, it would be appropriate to allow the Walker Corporation appeal. Walker Corporation's submission: joinder of necessary parties Walker Corporation submitted that where a court is invited to make, or proposes to make, orders directly affecting the rights or liabilities of a non-party, the non-party is a necessary party and ought to be joined. That submission is correct80. The Court of Appeal's orders directly affected Walker Corporation. The majority of the Court of Appeal (Macfarlan JA, Giles JA concurring) erred when it held to the contrary81. In News Ltd v Australian Rugby Football League Ltd the Full Federal Court (Lockhart, von Doussa and Sackville JJ) said82: "Where the orders sought establish or recognise a proprietary or security interest in land, chattels or a monetary fund, all persons who have or claim an interest in the subject matter are necessary parties. This is because an order in favour of the claimant will, to a corresponding extent, be detrimental to all others who have or claim an interest." The relief claimed and granted – a constructive trust and a transfer of the land subject to the trust to the Club so as to make the interest transferred indefeasible on registration – directly affects the interests of any other person, like Walker Corporation, claiming an interest in the land, because orders in the Club's favour would, to a corresponding extent, be detrimental to those other persons. The Court of Appeal majority then said: "The appeal has only resolved the issues which arose between [the Club] and [JACS]."83 That would be true if only personal remedies had been granted; but the constructive trust, a proprietary remedy, was granted in a way which resolved issues against Walker Corporation through creating indefeasible proprietary rights without its being heard. The Court of Appeal majority also erred in saying: "Walker Corporation's claim that it has an equitable interest in the land ranking in priority to that of the [Club] may be pursued by it in separate proceedings against the [Club]."84 80 Victoria v Sutton (1998) 195 CLR 291 at 316-318 [76]-[81]; [1998] HCA 56; News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410 at 523-525. 81 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (No 2) (2009) 261 ALR 112 at 119 [39]. 82 (1996) 64 FCR 410 at 524-525. 83 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (No 2) (2009) 261 ALR 112 at 119 [39]. 84 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (No 2) (2009) 261 ALR 112 at 119 [39]. Walker Corporation's claim was not merely that its equitable interest ranked in priority to the Club's interest in the Option Land. One of its claims was that the Club never had any interest in the Option Land at all and that no constructive trust should have been declared because of the existence of its equitable interest of which the Club had notice both before the option was exercised and before the Court of Appeal's declaration of constructive trust. Indeed, Walker Corporation was entitled to claim, if it wished, that the Club's substantive case was insufficiently strong to succeed at all, whatever the remedy available if it did succeed to any extent. Walker Corporation was entitled to call evidence against that substantive case. Even if it did not wish to do that, it was entitled to be heard on the weaknesses in the substantive case. Counsel for the Club criticised the lateness of Walker Corporation's submission about calling evidence, which was made on the second day of the appeal to this Court. It may have been late, but it is sound. The Court of Appeal majority's belief that adequate protection of Walker Corporation's position would be achieved by pursuing its claim to an equitable interest in "separate proceedings" took no account of s 63 of the Supreme Court Act 1970 (NSW). Section 63 provides: "The [Supreme Court] shall grant, either absolutely or on terms, all such remedies as any party may appear to be entitled to in respect of any legal or equitable claim brought forward in the proceedings so that, as far as possible, all matters in controversy between the parties may be completely and finally determined, and all multiplicity of legal proceedings concerning any of those matters avoided." The question is not whether any problem arising in the original proceedings could be resolved in separate proceedings, but, as explained above, whether that problem should have been resolved in the original proceedings without the need for separate proceedings. The Court of Appeal majority next said that, in the separate proceedings in which Walker Corporation could pursue its claim that its Mortgage ranked in priority to the Club's constructive trust, "it would be open to Walker Corporation to seek interim relief preserving the status quo pending final determination of its claim."85 That supports the view, contrary to what the Court of Appeal majority 85 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (No 2) (2009) 261 ALR 112 at 119 [39]. initially said, that its orders directly affected Walker Corporation, for here the Court of Appeal majority recognised that an interlocutory injunction of a judge in another Division of the Supreme Court was necessary to stop Walker Corporation's rights being taken away from it. The wisdom of the rule, which is about to be dealt with, that a person directly affected by an order in proceedings to which that person was not party is entitled as of right to have it set aside is thus demonstrated: it is a more efficient course than having to institute separate proceedings calling for an interlocutory injunction and an undertaking as to damages. Walker Corporation's submission: entitlement of non-party who should have been joined to have order set aside Walker Corporation submitted that if a court makes an order affecting a person who should have been joined as a necessary party, while the order will not be a nullity, that person is entitled to have the order set aside, and is not limited merely to seeking the favourable exercise of a discretion, whether or not the person in question becomes a party. As a general proposition this submission is correct. The setting aside of the order "lays the ghost of the simulacrum of a trial, and leaves the field open for a real trial"86. In contrast, the Court of Appeal majority said87: "If there had been reason, for convenience rather than necessity, to have Walker Corporation's claim determined together with resolution of the disputes between the [Club] and [JACS and Poplar], it is far too late for Walker Corporation now to be joined. It was not a party at first instance, and its claim should not be entertained for the first time on appeal. Even as an applicant in the appeal, it failed to apply at an earlier time, apparently in the expectation that the outcome would not be the imposition of a constructive trust. That its expectation has been disappointed is not a reason for allowing it to participate." 86 Cameron v Cole (1944) 68 CLR 571 at 589 per Rich J; [1944] HCA 5. See also at 590-591, and see BP Australia Ltd v Brown (2003) 58 NSWLR 322 at 347-348 87 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (No 2) (2009) 261 ALR 112 at 119-120 [40]. Basten JA's reasoning at 116 [23] is similar. In this passage the Court of Appeal majority erred, not only in electing not to exercise a discretion in Walker Corporation's favour, but also in treating it as a matter of discretion at all and in treating the question of joinder, rather than the question of setting aside the orders, as decisive88. If there is any exception to the principle relied on (which it is unnecessary to decide in this case), it can have no application in the present circumstances, in which there was evidence that a plaintiff claiming a constructive trust over Torrens system land is cognisant of a mortgage which would be affected by its claim. The Club's submission: estoppel Chancery procedure, the influence of which is apparent in the modern Judicature systems, was concerned that all persons materially interested in the subject matter of a suit generally ought to be made parties so as to settle the controversy by binding those interested to the final decree89. There was some relaxation of the strict application of this rule by the adoption of procedures for representative parties90 but this is not relevant to the situation in the present case. In News Ltd v Australian Rugby Football League Ltd91 Lockhart, von Doussa and Sackville JJ said: "Generally speaking, to permit [the party prosecuting the proceedings] to transfer to others who might be affected by the outcome of the proceedings the responsibility of deciding whether or not they should apply to be joined could be productive of uncertainty and inconvenience. At times, it could lead to the need to halt expensive litigation part-way through, because a third party insufficiently understood the proceedings, or, through impecuniosity or some other reason, was not adequately advised." 88 Grovenor v Permanent Trustee Co of NSW Ltd (1966) 40 ALJR 329; News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410 at 525. 89 Wong v Silkfield Pty Ltd (1999) 199 CLR 255 at 261 [13]; [1999] HCA 48. 90 Wong v Silkfield Pty Ltd (1999) 199 CLR 255 at 261-262 [14]. 91 (1996) 64 FCR 410 at 526. See also Wentworth v Wentworth (2000) 52 NSWLR News Ltd v Australian Rugby Football League Ltd was a case where players who had not been joined in the proceedings but only informed of them were not debarred from attacking the orders made. There is no doubt that Walker Corporation was aware of the first proceedings, and it informed the Court of Appeal of that fact. Walker Corporation said there was a reasonable explanation for its delay in seeking to be joined. Whether or not that is so, it had no duty to seek to be joined, and its delay does not in this case call for explanation. In oral argument counsel for the Club outlined a submission to the effect that the facts supported an exception to what would otherwise be the operation of the principles stated in News Ltd v Australian Rugby Football League Ltd. This was that Walker Corporation was estopped by its conduct in not earlier seeking joinder and that its conduct had created or contributed to the continuation of an assumption on the part of the Club that the suit had been sufficiently constituted without Walker Corporation. In Osborne v Smith92 Kitto J referred to the well-established principle of practice in probate suits whereby any person having an interest in the estate might intervene as of right and be made a party; a corollary was that if a person with such an interest, knowing of the suit, did not intervene but stood by, that party was bound by the result and not allowed to reopen it by further suit. The principle explained in Osborne v Smith is not expressed in terms of estoppel by conduct as understood in the modern authorities. However, the Club relied upon cases, in particular the decision of the Privy Council in Nana Ofori Atta II v Nana Abu Bonsra II93, and of the English Court of Appeal in House of Spring Gardens Ltd v Waite94, where the probate practice has been so treated and extended into other areas of litigation. It is unnecessary to consider further these authorities given the lack of the factual foundation alleged by the Club as necessary to make good its submissions. It has not been shown that Walker Corporation conducted, 92 (1960) 105 CLR 153 at 158-159; [1960] HCA 89. 94 [1991] 1 QB 241. See also Spencer Bower and Handley, Res Judicata, 4th ed (2009), par 9.12; and Administration of Papua and New Guinea v Daera Guba (1973) 130 CLR 353 at 403, 456; [1973] HCA 59. controlled or managed the proceedings or that Walker Corporation is the only party likely to gain from the proceedings. Nor has it been shown that the Club suffered detriment from the alleged conduct of Walker Corporation by being induced to believe that the suit was sufficiently constituted without Walker Corporation. A significant counter consideration is that the Club knew of Walker Corporation's claim to hold an unregistered mortgage over the Option Land, which the Club was seeking to overreach by the imposition of a constructive trust. The effect of the Uniform Civil Procedure Rules. One aspect of Basten JA's reasoning in the Court of Appeal's second judgment, which the Club Subject to statutory exceptions, the Supreme Court has no power to set aside or vary orders once they have been entered. The orders of the Court of Appeal proposed in its first judgment were entered on 3 June 2009 because that is what the "court's computerised record system indicates" and r 36.11(2) of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") provides: "Unless the court orders otherwise, a judgment or order is taken to be entered when it is recorded in the court's computerised court record system." (c) Only orders (a)-(d) were entered on that date; however, the apparent failure to enter orders (e)-(g) was only an irregularity on which nothing turns. (d) Orders (a)-(d) can only be varied pursuant to a Notice of Motion filed within 14 days of entry: UCPR, r 36.16(3A). The orders sought in Walker Corporation's Amended Notice of Motion dated 22 June 2009 that had not appeared in its original Notice of Motion dated 11 June 2009 (namely those seeking to set aside the declaration of a constructive trust and the order of transfer, together with alternative orders) were sought more than 14 days after the relevant orders were entered on 3 June 2009. 95 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (No 2) (2009) 261 ALR 112 at 113-114 [3]-[5] and 117 [27]. The majority did not share this point of view: its orders state that order 4 made on 3 June was entered on 12 June96, and thus the majority disagrees with proposition (b). However, Basten JA's reasoning raises important questions. One problem with proposition (b) is that it assumes that the orders were entered on 3 June, that is, the day they were made. Rule 36.11(2A) provides: "If the court directs that a judgment or order be entered forthwith, the judgment or order is taken to be entered: (a) when a document embodying the judgment or order is signed and sealed by a registrar, or (b) when the judgment or order is recorded as referred to in subrule whichever first occurs." There was no direction that the orders be entered forthwith. Whatever "the court's computerised court record system" showed, there is a document in the record entitled "AMENDED JUDGMENT/ORDER". It purported to record a "JUDGMENT/ORDER" made or given on 3 June 2009, entered on 12 June 2009 and sealed on 10 September 2009. It recorded seven numbered orders corresponding to the orders lettered (a)-(g) proposed at the end of the reasons for judgment of the Court of Appeal published on 3 June 2009. The Club submitted that that document only came into existence after the Court of Appeal delivered its second judgment on 23 July 2009, the document could not have been before the Court of Appeal, the document was thus irrelevant, and the reference in the document to entry on 12 June 2009 was inconsistent with the computer printout shortly to be discussed. It is true that the document in its sealed form could not have been before the Court of Appeal. In an unsealed form, however, it may have been available before 23 July 2009. And, for reasons to be explained, it may have been more reliable than the computer printout. 96 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (No 2) (2009) 261 ALR 112 at 121 [53]. Another problem with proposition (b) is that it refers to a computer printout not available to the parties97. The Club procured it and handed it up on the second last day of the appeal to this Court. In her reply, junior counsel for Walker Corporation pointed out that each page of the printout was headed: "THIS RECORD OF PROCESSING IS ISSUED FOR INFORMATION ONLY. IT SHOULD NOT BE RELIED UPON AS THE OFFICIAL RECORD OF THE COURT FILE." It is unclear how the printout corresponds with "the court's computerised court record system" referred to in r 36.11(2). It does seem clear that this document was what proposition (b) was referring to in relation to what "the court's computerised court record system" revealed. That document records only four orders being made on 3 June 2009, and the last three of those orders are lettered (b)-(d). That document contains no reference to orders (e)-(g) and it was said that those orders "had not been included in the computer record" and "have never been included in the court's computerised court record system."98 Junior counsel for Walker Corporation also pointed out that, although the document contained a list of dates on every page in the left hand column, it did not expressly say that the entry purportedly recorded was entered on that day; some of the dates were out of order; and there was no record dated 12 June 2009 of the signing and sealing "AMENDED JUDGMENT/ORDER" document, were entered on 12 June 2009 and sealed on 10 September 2009. She further submitted that the "computerised record" in question should have been put to the parties for their comment, so that inquiries could have been made by them of the Registry with a view to finding out the particular date on which particular events actually happened. She also submitted that weight should not be placed on the computer record. Those submissions should be accepted. orders which, according the the In addition, she referred to s 14 of the Civil Procedure Act 2005 (NSW), which provided: "In relation to particular civil proceedings, the court may, by order, dispense with any requirement of rules of court if satisfied that it is appropriate to do so in the circumstances of the case." She submitted that, had 97 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (No 2) (2009) 261 ALR 112 at 113 [3]. 98 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (No 2) (2009) 261 ALR 112 at 113 [5]. Walker Corporation been given notice of the "computerised record", it could have applied to the Court of Appeal for dispensation from the limitations created by r 36.16 of the UCPR. Sub-rule (1) of that rule provides: "The court may set aside or vary a judgment or order if notice of motion for the setting aside or variation is filed before entry of the judgment or order." It is not necessary to determine the correctness of that submission, since there are several other reasons why the restriction in r 36.16(1) did not apply. One is that, since the computerised record appears unreliable, it is safe to conclude that the orders were entered on 12 June 2009, and the Amended Notice of Motion was filed on 22 June 2009, within 14 days of 12 June 2009. Secondly, the order said in the document headed "AMENDED JUDGMENT/ORDER" to have been entered on 12 June 2009 was an instance of the court ordering "otherwise" within the meaning of r 36.11(2). Thirdly, of the seven orders appearing at the end of the Court of Appeal's reasons for judgment, only four appear in the computerised record. The process of creating the record was thus insufficiently complete to start the 14 day period in r 36.16(3A) running, even if the other deficiencies of the computerised record are overlooked. It must be said that if the Club's submission that r 36.11(2) applies to the facts of this case is sound, the good sense of the rule is open to debate. It concerns an important question, for non-compliance with court orders can be contempt of court: it is important to know what orders have been made and when, and it is equally important to know within what period they can be set aside. The lapse of time between pronouncement and entry of orders also provides opportunity for the correction of error, an opportunity lost if the submissions by the Club are accepted. If the Club's submissions in relation to r 36.11(2) were correct, considerable injustice could be done to persons unaware that orders damaging their rights have been entered without their knowledge. The process of entry into the court's computerised system is a secret process independent of the acts of the parties and outside their knowledge. Further submissions of the Club. The Club relied on r 6.23 of the UCPR, which provides: "Proceedings are not defeated merely because of the misjoinder or non-joinder of any person as a party to the proceedings." The Club also relied on r 6.24(1), which provides: "If the court considers that a person ought to have been joined as a party, or is a person whose joinder as a party is necessary to the determination of all matters in dispute in any proceedings, the court may order that the person be joined as a party." The Club characterised the appeal as an appeal from the decision of the Court of Appeal that Walker Corporation should not be joined as a party. However, Walker Corporation does not now seek to be joined, and it does not submit that the proceedings were defeated merely by its non-joinder. The soundness or otherwise of its position does not depend either on its being a party or on the rules of court: it depends on matters of right affecting non-parties which rest on general law principles of natural justice99. The Club's submissions: the Court of Appeal orders avoid any injustice The Club submitted that even if Walker Corporation's submissions up to this point were accepted, the orders of the Court of Appeal as they stood after the Court of Appeal's second judgment left it open to Walker Corporation to obtain the opinion of the Supreme Court of New South Wales in separate proceedings as to whether its claim had priority over the Club's constructive trust, and that hence those orders did not do injustice to Walker Corporation. Before examining that submission, it is necessary to clarify some aspects of the Court of Appeal's orders. At the end of the reasons for judgment published on 3 June 2009, seven orders lettered (a)-(g) were proposed100. Virtually the same orders, but numbered 1-7, appeared in the formal order made on 3 June 2009, entered on 12 June 2009 and sealed on 10 September 2009. Order 3 of those orders made on 3 June 2009 and entered on 12 June 2009 was a declaration that Poplar "holds all of its right, title and interest in the land identified in Folio Identifier 2/1114604 on a constructive trust for the [Club]." That order was not changed on 23 July 2009. Order 4 made on 3 June 2009 and entered on 12 June 2009 was: "Order that upon the [Club] paying to [Poplar] the amount of $6.73 million on or before the date 3 months from the date of these orders, [Poplar] transfer all its rights, title and interest in the land contained in Folio Identifier 2/1114604 to the [Club]." 99 Victoria v Sutton (1998) 195 CLR 291 at 316 [77]. 100 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2009) 261 ALR 86 On 23 July the first three orders proposed by the majority of the Court of Appeal were101: "(1) Vary order (d) made on 3 June 2009 by deleting the words 'on or before the date 3 months from the date of these orders' and replacing them with the words 'as expeditiously as possible'. (2) Order that in the event that [Poplar] does not comply with order 4 as entered on 12 June 2009 and as subsequently varied, a registrar of the court is empowered to execute all documents and do all things as may be necessary to transfer to the [Club] [Poplar's] right, title and interest in the land contained in Folio Identifier (3) Order that the words 'subject to any different order that may be made by the Supreme Court of New South Wales in any other proceedings to which the [Club] and [JACS and Poplar] are parties' be added to the end of order 1 made by Tobias JA on 6 April 2009, as subsequently extended." The order described in order (1) of the Court of Appeal's orders proposed on 23 July 2009 as "order (d) made on 3 June 2009" is virtually identical with the order described in order (2) of those proposed orders as "order 4 as entered on 12 June 2009". The supposed subsequent variation referred to in order (2) was that to be effected by order (1). The reference in order (3) to "order 1 made by Tobias JA on 6 April 2009, as subsequently extended" was a reference to an order that originally took the form: "The Registrar-General of New South Wales be restrained from taking any steps to register or permit the registration of an interest over the interest of Poplar Holdings in the Property at Folio Identifier 2/1114604 until 5pm on 5 May 2009 or until further order of the Court." It had been extended, the last time by Macfarlan JA on 10 June 2009 "until further order". In theory that meant that order 1 made by Tobias JA, as amended on 23 July 2009, could be discharged by the Supreme Court of New South Wales in other proceedings. But that left in place, immune from possible change, order 3 as made on 3 June 2009 and entered on 12 June 2009, and order 4 as made on 101 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (No 2) (2009) 261 ALR 112 at 121 [53]. 3 June 2009, entered on 12 June 2009 and varied on 23 July 2009. In consequence, the Court of Appeal had closed off any possibility of challenging either the constructive trust declaration or the order that Poplar transfer its rights to the Club – that is, the orders which rested on an acceptance of the Club's substantive case. Walker Corporation has been prejudiced in two ways by the orders made by the Court of Appeal. First, the failure of the Court of Appeal to discharge the injunction on order 1 granted by Tobias JA on 6 April 2009 unless security for the undertaking for damages was provided has been prejudicial to Walker Corporation in the period 23 July 2009 until the day these appeals are decided. The injunction prevented it from exercising its rights to sell the Option Land under the Mortgage and the Charge. The injunction also prevented it from registering the Mortgage – a state of affairs which is against the public interest because it undermines the utility of the Register and public confidence in its utility. Originally, on 6 April 2009, Tobias JA declined to require an undertaking as to damages from the Club on the ground of its impecuniosity and because of the short duration then contemplated for the injunction – which has in fact operated ever since. When the Court of Appeal heard the appeal, the Court of Appeal did accept an undertaking as to damages, but it was not secured. In the proceedings decided by the Court of Appeal on 23 July 2009, Walker Corporation applied to have the injunction dissolved unless the Club provided security for the undertaking as to damages. Basten JA did not deal with that application. Macfarlan and Giles JJA declined to do so on the ground that Walker Corporation was not a party to the proceedings, and they refused to order that it become a party102. Yet r 25.8 of the UCPR permits non-parties to receive the benefit of the usual undertaking as to damages. The Club contends that it is not open to Walker Corporation to complain about the lack of security for the undertaking as to damages. It contends that no special leave was granted to raise the complaint; that, although the injunction granted by Tobias JA was interlocutory, since that granted by the Court of Appeal is final, there is no occasion for an undertaking as to damages; and that Walker Corporation had not established a prima facie case that its claim had 102 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (No 2) (2009) 261 ALR 112 at 120 [41]. priority over that of the Club. These submissions are unsound. The injunction as extended on 23 July 2009 was twice expressed to be until further order103, its purpose was to maintain the status quo until other proceedings determined the rights of the parties, and an order restraining the Registrar-General from registering an interest in the Option Land is unlikely to be final. The material which Walker Corporation tendered in the Court of Appeal did establish a serious question to be tried. In any event it was for the Club, as the party seeking the grant and continuation of the injunction, to establish a serious question to be tried, not the person who might later rely on the undertaking as to damages. And the complaint about the undertaking is merely part of Walker Corporation's overall complaint about the unsatisfactory state of affairs created by the Court of Appeal's orders taken as a whole. The second respect in which the Court of Appeal's orders fail to avoid injustice is as follows. The Court of Appeal first made a decision that the Club had a proprietary right. Then, some weeks later, it made a decision that in other proceedings there should be a determination of whether there was some other right having priority over the Club's proprietary right. That is unsatisfactory. As was pointed out earlier104, the first decision binds Walker Corporation to the result of proceedings to which it was not a party – a result which it could have affected, by evidence or argument. Walker Corporation does not just want priority over an interest which it has to accept exists. It wants that interest to be held non-existent, and it was deprived of the opportunity of achieving that result under conditions in which all matters would have been disposed of in one proceeding, with all evidence called, all submissions made and all questions considered together. That type of prejudice cannot be overcome by future proceedings about priorities in which Walker Corporation will have no opportunity to contend that the constructive trust now competing against its claimed mortgage should never have been recognised and does not exist. Orders on the Walker Corporation appeal Given that the appeal by JACS has succeeded, there is no point in allowing the Walker Corporation appeal, because the relief claimed by Walker Corporation in its appeal assumes that the JACS appeal will be dismissed. The 103 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (No 2) (2009) 261 ALR 112 at 122 [53]. See also at 120 [44] ("any different order"). 104 See above at [131]-[133]. consequence of allowing the JACS appeal is that the Court of Appeal orders which Walker Corporation wishes to have set aside will be set aside in the JACS appeal. But it should be stressed that if the JACS appeal had failed, the Walker Corporation appeal would have succeeded, and orders for a new trial would have been made. Despite the dismissal of its appeal, it was necessary for Walker Corporation to have brought it. Hence although the Walker Corporation appeal must be dismissed, the Club must pay Walker Corporation's costs in this Court and in the Court of Appeal. Orders in S309 of 2009 The orders are: 1. White City Tennis Club Ltd ("White City") have leave to file out of time its Second Notice of Contention. The appeal be allowed with costs. The following orders: The orders of Tobias JA made on 6 April 2009; (b) Order 1 of the orders of the Court of Appeal of the Supreme Court of New South Wales ("the Court of Appeal") made on 5 May 2009; The orders of the Court of Appeal made on 3 June 2009, as amended on 23 July 2009; (d) Order 7 of the orders of the Court of Appeal made on 10 June 2009; and (e) Orders 3 and 6 of the orders of the Court of Appeal made on 23 July 2009 be set aside, and in lieu thereof: The appeal by White City to the Court of Appeal be dismissed with costs; and (g) White City pay the costs of John Alexander's Clubs Pty Ltd and Poplar Holdings Pty Ltd of White City's Notice of Motion dated 5 June 2009. Orders in S308 of 2009 The orders are: Set aside so much of the orders of the Court of Appeal of the Supreme Court of New South Wales made on 23 July 2009 as ordered Walker Corporation Pty Ltd ("Walker Corporation") to pay the costs of White City Tennis Club Ltd ("White City") of the Amended Notice of Motion of Walker Corporation (including the costs of the Notice of Motion which the Amended Notice of Motion superseded) and in lieu thereof order that: White City pay Walker Corporation's costs of: (a) Walker Corporation's appearance before Macfarlan JA on 10 June 2009; and (b) Walker Corporation's costs of its Notice of Motion dated 11 June 2009 and its Amended Notice of Motion dated 22 June 2009. 2. White City pay Walker Corporation's costs of the appeal to this Court. The appeal otherwise be dismissed.

HIGH COURT OF AUSTRALIA CENTRAL BAYSIDE GENERAL PRACTICE ASSOCIATION LIMITED FORMERLY KNOWN AS CENTRAL BAYSIDE DIVISION OF GENERAL PRACTICE LIMITED APPELLANT AND COMMISSIONER OF STATE REVENUE RESPONDENT Central Bayside General Practice Association Limited v Commissioner of State Revenue [2006] HCA 43 31 August 2006 ORDER Appeal allowed. The respondent to pay the costs of the appellant in this Court. Set aside the orders of the Court of Appeal, Supreme Court of Victoria, made on 1 July 2005 and, in their place, order: Appeal allowed. Set aside the orders of the Supreme Court of Victoria made on 15 August 2003. The appellant's appeal from the decision of the Victorian Civil and Administrative Tribunal made on 22 November 2002 be allowed. The Notice of Determination issued by the respondent dated 16 July the appellant's Notice of Objection dated 29 January 2002 be set aside. to disallow The appellant's Notice of Objection dated 29 January 2002 against the respondent's decision dated 14 December 2001 be allowed. The respondent pay the costs of the proceedings in the Court of Appeal of the Supreme Court of Victoria, and in the Supreme Court of Victoria. On appeal from the Supreme Court of Victoria Representation B J Shaw QC with J J Batrouney SC and L G De Ferrari for the appellant (instructed by Health Legal) I J Hardingham QC with S G O'Bryan SC and R J Orr for the respondent (instructed by Solicitor to the Commissioner of State Revenue) M M Gordon SC with P R D Gray on behalf of the Commonwealth of Australia heard as amicus curiae (instructed by Clayton Utz) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Central Bayside General Practice Association Limited v Commissioner of State Revenue Taxation – Charities – Pay-roll tax exemption – Meaning of "charitable body" – Whether privately-established non-profit organisation is a "charitable body" for purposes of pay-roll tax exemption – Whether organisation precluded from being characterised as "charitable body" because of relationship with Commonwealth Government – Whether involvement in implementation of government policy precludes organisation from being characterised as "charitable body". its Words and phrases – "charitable body". Pay-roll Tax Act 1971 (Vic), s 10(1)(bb). GLEESON CJ, HEYDON AND CRENNAN JJ. The question is whether the wages paid in the period 1 July 2001 to 30 June 2002 by the appellant, Central Bayside General Practice Association Limited, are exempt from pay-roll tax under the Pay-roll Tax Act 1971 (Vic), s 10(1)(bb). That question in turn depends on whether the appellant was in that period a "charitable body"1. On 14 December 2001 the State Revenue Office determined that these questions should be answered in the negative, and refused to grant the appellant an exemption from pay-roll tax. The appellant objected to that decision on 29 January 2002, but a delegate of the Commissioner of State Revenue disallowed the objection on 16 July 2002. On 10 September 2002 the appellant requested the Commissioner to refer the matter to the Victorian Civil and Administrative Tribunal. The Taxation Division of the Tribunal agreed that the questions should be answered in the negative. So did the Commercial and Equity Division of the Supreme Court of Victoria (Nettle J)2 and the Court of Appeal of the Supreme Court of Victoria (Chernov JA and Osborn AJA; Byrne AJA dissenting)3. At the commencement of argument in the appellant's appeal to this Court, the Commonwealth of Australia was given leave to be heard as amicus curiae. It argued in support of the appellant. For the reasons given below the appeal should be allowed. 1 Section 10(1)(bb) provides: "(1) The wages liable to pay-roll tax under this Act do not include wages paid or payable – by a charitable body (other than a school or educational institution or an instrumentality of the State) to a person during a period in respect of which the body satisfies the Commissioner that the person is engaged exclusively in work of the body of a charitable nature ..." 2 Central Bayside Division of General Practice Ltd v Commissioner of State Revenue (2003) 53 ATR 473; [2003] ATC 4835. 3 Central Bayside Division of General Practice Ltd v Commissioner of State Revenue (2005) 60 ATR 151; [2005] ATC 4586. Crennan The constitution and activities of the appellant In order to understand the course of the proceedings below and the arguments advanced in this Court, it is necessary to examine the constitution and activities of the appellant. Appellant's object. The appellant was registered as a company limited by guarantee in Victoria on or around 7 February 1994 under the provisions of the Corporations Law (Vic). In the course of the relevant tax year, on 13 November 2001, the appellant adopted a new constitution. This was similar to its initial memorandum and articles of association, and no point was made of any differences. Clause 5.2 provided: "The company must not distribute any of its profit, income or assets directly or indirectly to its members." Clause 5.1 provided: "The company may only use its income, assets and profit for its object." Clause 4.2 provided: "The company may only exercise its powers for its object." Clause 3 described the object of the appellant as being "to improve patient care and health, primarily in the Central Bayside area of Melbourne" by the following nine methods: improving communication between general practitioners and other areas of the health care system; (b) more effectively integrating general practice with other elements of the health care system; enabling general practitioners to contribute to health planning; providing better access to available and appropriate general practitioner services for patients, and reducing inappropriate duplication of services; (e) meeting the special (and localised) health needs of groups (such as Aboriginal and Torres Strait Islanders and those with non-English speaking backgrounds) and people with chronic conditions, particularly where these needs are not adequately addressed by the current health care system; Crennan advancing general practice, and the health and well-being of general practitioners; enhancing educational and professional development opportunities for general practitioners and undergraduates; increasing general practitioner focus on illness prevention and health promotion; and improving the effectiveness and efficiency of health services at the local level." Appellant's activities. The Central Bayside area covers 92 square kilometres of suburban Melbourne. The activities actually carried out in the relevant year included improving the health information systems used in general practices; extending immunisation coverage within the Central Bayside area; assisting in the professional development of members; assisting and encouraging general practitioners within their accreditation; implementing a model of care programme in general practice based on decision support software; engaging in collaborative projects with the Pharmacy Guild of Australia to facilitate cooperation between general practitioners and pharmacists in managing patient health and developing a community-based model of falls and falls injury prevention for frail and aged persons. the Central Bayside area to upgrade Appellant's members. The appellant has two categories of members – primary and associate. Any general practitioner of medicine who practises in the Central Bayside area and supports the object of the appellant is eligible for primary membership: cl 7.1. Any person who supports the object of the appellant is eligible to be an associate member: cl 7.2. There is no provision for government representation among the members. In November 2002 all of the appellant's members were general practitioners: 180 general practitioners in practice in the Central Bayside area were primary members and 70 general practitioners who were not in practice in that area were associate members. By cll 12.1 and 12.2 the liability of members was limited to a duty to contribute up to $10 each on winding up. Appellant's directors. The board of directors is responsible for the management of the appellant: cl 42.1. There are nine directors elected at the annual general meeting, with power for the board to co-opt an additional director: cll 29.1, 30.2 and 31.1. There are no government appointees on the board. Crennan Distribution of assets on winding up. Clause 62 provided: If the company is wound up, its remaining assets must not be distributed to any member. Instead the remaining assets must be given to a body, trust or fund that: has a similar object to the company; and also prohibits the distribution of profit, income and assets to its members to at least as great an extent as this constitution." Finally, cl 53 provided: "The funds of the company may be derived from grants, fund-raising activities, subscriptions, interest and any other sources approved by the Board." Commonwealth grants to the appellant. The total revenue of the appellant in the relevant year was $1,048,979. Of that, $1,006,997 came from Commonwealth grants. Approximately 45 percent of that figure came from a Commonwealth grant called an "Outcomes Based Funding" grant ("OBF grant"). The other grants were predominantly project based. The distinction is that the latter kind of grant funds a particular activity, whatever the outcome, and the former type of grant funds activities directed to the achievement of specified outcomes. OBF Agreement. OBF grants were supplied to the appellant under an OBF Agreement made in 1999 between the Commonwealth "as represented by" the Department of Health and Ageing ("the Department"). For reasons discussed below4, in that agreement the appellant was described as "the Division". Recital A of the agreement stated that the Department provided funding to bodies like the appellant "to enable general practitioners to conduct activities to improve integration with other elements of the health system and to address identified local health needs". Clause 2.1 compelled the appellant to conduct "Programs of Activity" as described in Sched 1 in accordance with the requirements set out in Sched 1. Clause 2.3 provided: 4 See [14]. Crennan "The Division will comply with the requirements regarding identified Outcomes for Outcomes-Based Funding as specified in Schedule 2." Schedule 1, cll 1-8 provided: The Division shall conduct the Programs of Activity as described in the following documents: The Division's extended Strategic Plan for the period 1 July 1999 to 30 June 2003 (Attachment 1 to this Agreement); The Division's approved Business Plan for the period 1 July 2002 to 30 June 2003 (Attachment 2 to this Agreement). The Division shall undertake Programs of Activity in accordance with the requirements set out in the Implementation Guide for Outcomes Based Funding – May 1999 (Attachment 3 to this Agreement). The Division shall provide Programs of Activity which are based on a national framework for Divisions within which decision making and priority setting is focussed on activities in four distinct areas: Population Health Services by General Practitioners to patients Services to General Practitioners by the Division Infrastructure The Division shall undertake activities which are linked to the above four sectors in the Division's current Business Plan to achieve the Outcomes identified in the Division's extended Strategic Plan 1999-2003. The Division shall prepare a Business Plan that is consistent with the extended Strategic Plan for each year of operation of this Agreement. The Division's approved Annual Business Plan for 2002-2003 submitted to the Department appears as Attachment 2 to this Agreement. Crennan The Divisions shall submit their Annual Business Plan for 2000- 2003 to the Department for approval as follows: Business Plan 2000-2001 Due 31 March 2000 Business Plan 2001-2002 Due 31 March 2001 Business Plan 2002-2003 Due 31 March 2002 8. When approved the Business Plan shall be deemed to form part of this Agreement (Attachment 2) and will replace the Business Plan for the previous year." Attachments 1, 2 and 3 were not in evidence; however, it is clear that the "Programs of Activity" to be funded were suggested by the appellant in its "extended Strategic Plan" and its annual "Business Plans". That flows from cl (A) of Sched 2 which obliged the appellant to "conduct activities ... that are designed to achieve the identified Outcomes as set out in the [appellant's] extended Strategic Plan 1999-2003 and [its] current Business Plan." Clause (B) of Sched 2 provided: "The identified Outcomes shall be in keeping with: the Current Aims and Intended Outcomes of the Divisions of General Practice Program as set out in this Schedule; and the Implementation Guide for Outcomes Based Funding – May 1999 (Attachment 3 to this Agreement)." The "Current Aims and Intended Outcomes of the Divisions of General Practice Program" were then described in rather general terms. The "main aim", for example, was: "To improve health outcomes for patients by encouraging GPs to work together and link with other health professionals to upgrade the quality of health service delivery at the local level." In short, the function of the appellant was to devise a Strategic Plan and Business Plans identifying relevant outcomes. Once the Strategic Plan and Business Plans were approved by the Department, they became part of the Agreement. The appellant's duty was then to conduct activities designed to achieve the outcomes described in those plans. The evolution of "divisions". The expression "division", when used in relation to general medical practitioners, refers to an organisational structure Crennan enabling general practitioners to work together to improve health care, meet local goals and targets, promote preventative care and respond more rapidly to changing community health needs. From the mid 1970s hospital-based departments of general practice began to emerge as a focus for the hospital- related activities of general practitioners. By 1991, there were 31 departments of general practice, but their development was hindered by a lack of substantial infrastructure funding. In 1992 the Commonwealth Government began to provide funding for the establishment of divisions of general practice, and by 1993, there were 100 divisions in place, covering about 80 percent of the geographical area of Australia. By the late 1990s there were a total of 123 divisions across the country receiving Commonwealth funds with a general practitioner membership level of over 80 percent. One technique by which Commonwealth money is made available to fund divisions is the making of OBF grants on the terms of OBF Agreements in the form of the one to which the appellant is a party. There is similarity between these OBF Agreements in the sense that each OBF Agreement is in an identical standard form, but for two differences. First, in each case a different division is party to the OBF Agreement with the Commonwealth. Secondly, each division's extended Strategic Plan and approved Business Plans are likely to differ5. The proceedings below The course of the proceedings below was affected to some extent by a change in the Commissioner's position. Dealings between the appellant and the revenue authorities. Why, in its decision of 14 December 2001, did the State Revenue Office refuse to grant the appellant an exemption from pay-roll tax on the basis that s 10(1)(bb) of the Act did not apply? It gave the following reason: that the appellant was 5 The propositions in the last three sentences are not directly supported by the evidence, for only a pro forma OBF Agreement was in evidence, and the Strategic Plan and Business Plans of no division, not even the appellant, were in evidence. However, the propositions stated may be inferred from the form of the appellant's OBF Agreement, from the differences in circumstances between the various parts of Australia, and from the fact that there is evidence that the 123 divisions which by 1998 covered the whole of Australia were "quite heterogeneous divisions varying in size, number of GP members, resources, organisational structures, management expertise and range of activities". These factors suggest that the Strategic Plan and Business Plans of each division are likely to differ. The truth of the propositions in the text was conceded by the Commissioner. Crennan "predominantly a professional body with the aim of promoting the interests of its members". In its Notice of Determination of 16 July 2002 disallowing the appellant's objection to the decision of 14 December 2001 and declining to grant an exemption from pay-roll tax, the Commissioner, through a delegate, adhered to a similar position. The Commissioner said that the appellant "exists for the benefit of its members independently of whether benefits flow to the public." Proceedings before the Tribunal. Before the Tribunal, the Commissioner attempted to rely on a new ground: "[T]hat the Commissioner was not satisfied that the relevant employees were engaged exclusively in work ... of a charitable nature." The Tribunal declined to allow that point to be agitated. The Commissioner maintained the contention that the appellant existed principally for the benefit of its members. The Tribunal rejected that contention, and said that the appellant existed for purposes beneficial to the community. However, it held that the appellant's purposes were not charitable6, on the ground that services provided by the appellant were "provided in substance at the expense of the Federal Government and, most importantly, as an integrated part of a scheme of national health management presided over by the Federal Government". The appellant was "too close to being an arm of government or a part of bureaucracy 6 The Tribunal, the four judges of the Supreme Court of Victoria, and counsel in their arguments in this Court proceeded upon the assumption that "charitable" in s 10(1)(bb) was used by the Victorian Parliament in its technical legal sense – that is, as defined by Lord Macnaghten in Commissioners for Special Purposes of the Income Tax v Pemsel [1891] AC 531 by reference to the spirit and intendment of the preamble to the Statute of Charitable Uses Act 1601. That assumption reflected the general rule that, the word "charitable" being a word that has a technical legal meaning, when it is used in a statute it should be understood in its legal sense unless a contrary intention appears. It was not suggested that a contrary intention appears in the statute presently under consideration. It is not easy to see a basis upon which such a suggestion might have been made with any degree of plausibility. The general rule just mentioned has been accepted as the law in this country at least since the decision of the Privy Council in Chesterman v Federal Commissioner of Taxation (1925) 37 CLR 317; [1926] AC 128. The word is commonly used in statutes. It is reasonable to assume that parliamentary counsel, taxpayers, revenue authorities, settlors, testators and others have acted on the faith of an understanding that the general rule applies. It is the understanding that has been acted upon by those who have presented, argued and decided the present case. It accords with principle and with fairness. There is no occasion to call the rule in question, especially in the absence of any formulation of a reasonably clear alternative, and an examination, by the usual procedures of adversarial litigation, of its implications. Crennan ... to be an organisation whose objects come within the concept of charity ...". It was "not just an ally of government but an essential part of it". Proceedings before Nettle J. Before Nettle J, the Commissioner abandoned reliance on the contention that the appellant's main purpose was to protect and advance the interests of its members. Nettle J doubted the soundness of this course7 but did not in terms depart from it8. He did, however, disagree with the Tribunal's view that the appellant was "an essential part" of government, or "close to being an arm of government": he said it was not a department or other instrumentality of government, that it was in its own hands as to whether it would seek government funding and subject itself to any conditions attached to the funding, and that the Commonwealth's only control over it was the power of the purse9. Nettle J said that the question whether the appellant was a charitable body turned on its main purposes, and they depended on its constitution, activities, history and control. He said that having regard to these matters "and in particular, to the extent to which the Division's activities of providing services to its members are funded and thereby controlled by the Commonwealth", he was not persuaded that the appellant was a charitable body10. Proceedings in the Court of Appeal. In the Court of Appeal, Chernov JA dismissed the appeal on the ground that the appellant's "core activities are 7 Central Bayside Division of General Practice Ltd v Commissioner of State Revenue (2003) 53 ATR 473 at 476 [8] and 481 [13]-[14]; [2003] ATC 4,835 at 4837 and 4841. So did the Court of Appeal: Central Bayside Division of General Practice Ltd v Commissioner of State Revenue (2005) 60 ATR 151 at 153 [3] per Chernov JA; [2005] ATC 4586 at 4588. 8 Nor did the Court of Appeal: Central Bayside Division of General Practice Ltd v Commissioner of State Revenue (2005) 60 ATR 151 at 159-160 [21] per Chernov JA; [2005] ATC 4586 at 4593. The Court of Appeal declined to hear argument from the Commissioner that the abandonment of the contention before Nettle J was erroneous: Central Bayside Division of General Practice Ltd v Commissioner of State Revenue (2005) 60 ATR 151 at 153 [3] per Chernov JA; 161-162 [27] per Byrne AJA; [2005] ATC 4586 at 4588 and 4594-4595. 9 Central Bayside Division of General Practice Ltd v Commissioner of State Revenue (2003) 53 ATR 473 at 486 [29]; [2003] ATC 4835 at 4845. 10 Central Bayside Division of General Practice Ltd v Commissioner of State Revenue (2003) 53 ATR 473 at 486 [33]; [2003] ATC 4835 at 4845. Crennan performed pursuant to the dictates of government"11. These dictates were said to lie in the terms of the OBF Agreement12. Osborn AJA dismissed the appeal on the ground that the appellant was "a creature and agent of government"; he agreed with Chernov JA's reasons and added some of his own13. Byrne AJA dissented. He concluded that the appellant was not "the mere creature or agent of the Commonwealth government". He said14: "No government control is exercised over its management. It plays an active role in itself selecting the particular projects which it undertakes for the benefit of its community. These features and the fact that its management is undertaken by its elected members without stipend from the Commonwealth shows that its relationship is more ... that of an ally than that of an agent." Concessions by the Commissioner The Commissioner disclaimed any submission that the appellant was not a charitable body merely on the ground that: (a) most of its funds came from the Commonwealth Government; it performed work or functions which the government might have performed or ordinarily performed; the funding provided by the government to the appellant was designated to be used for particular purposes; or the government supported the appellant's purposes and sought to have them implemented and furthered by funding the appellant. 11 Central Bayside Division of General Practice Ltd v Commissioner of State Revenue (2005) 60 ATR 151 at 160 [21]; [2005] ATC 4586 at 4593. 12 Central Bayside Division of General Practice Ltd v Commissioner of State Revenue (2005) 60 ATR 151 at 158-159 [18]; [2005] ATC 4586 at 4592. 13 Central Bayside Division of General Practice Ltd v Commissioner of State Revenue (2005) 60 ATR 151 at 171-172 [61]-[62]; [2005] ATC 4586 at 4602-4603. 14 Central Bayside Division of General Practice Ltd v Commissioner of State Revenue (2005) 60 ATR 151 at 170 [57]; [2005] ATC 4586 at 4601. Crennan implicitly conceded The Commissioner also the constitution of the appellant – creating a corporation having a board of directors and members without any government representatives; with an object expressed in the language of charity; with provisions preventing the expenditure of the appellant's income or assets otherwise than in furtherance of its object; and with provisions requiring the assets on winding up not to go to members but only to go to a body, trust or fund with a similar object – prevented it being a charitable body. that nothing The Commissioner's case In the light of these concessions, the Commissioner's case was a narrow one. The appellant posed as the key issue whether a body like the appellant, the sole purpose of which was in this Court conceded to be charitable, was precluded from being a "charitable body" within s 10(1)(bb) because of its relationship with the Commonwealth Government. The Commissioner contended that it was precluded because it acted so much under the control or influence of government that it could be seen to be acting in furtherance of government objectives rather than, or as well as, in the independent performance of its own objects. Counsel for the Commissioner said that his case in a nutshell was that if no more appeared than that the appellant's members formed the appellant and caused it to carry out the activities it in fact carried out, it would be a charitable body, but because about 93 percent of its income came from Commonwealth funding, with about half of those funds being OBF grants received pursuant to its OBF Agreement, there was control and influence by government to such an extent that the appellant was carrying out, not its own purposes, but the purposes of the Department, which, since it was a government department, could not have charitable purposes15. Issues to be put aside The parties were at issue on the question whether a body with charitable objects could not be a charitable body if it were subject to substantial or complete government control, and, on a related question, whether a body, to be charitable, must independently carry out its charitable purpose. It is convenient at this stage 15 No counsel advanced argument to suggest that Dean J had been wrong in holding in In re Cain (decd); The National Trustees Executors and Agency Co of Australasia Ltd v Jeffrey [1950] VLR 382 at 387 that "a gift for carrying on the ordinary activities of a Government department pursuant to a statute ... is not a gift for charitable purposes, even if the activities are such that if carried on by private persons they would be charitable". Crennan to assume affirmative answers to these questions, that is, answers favourable to the Commissioner, and to turn instead to the question whether in truth there was here governmental control and influence to such an extent that the appellant was carrying out the Department's purposes rather than its own purpose. The Commissioner's sub-arguments The Commissioner's contention was advanced through particular sub- arguments. Acting at the behest or bidding or as the puppet of the Government. First, the appellant was said to act only at the behest, or at the bidding, or as the puppet, of the Department. However, it turned out that these expressions related only to the process by which the appellant entered its OBF Agreement and to the regime of obligations which that Agreement imposed, and lacked any content independent of those matters. Incapacity to negotiate. The Commissioner contended that divisions like the appellant did not "negotiate ... [the OBF] Agreements". It was said that the Agreements were "uniform and are presented by the Commonwealth on a take it or leave it basis". If a division refused to sign it would "wither on the vine" because it would cease to receive Commonwealth funding. There are three answers to this argument. The first answer is that while the OBF Agreements are in large measure in a standard form, the central obligations created for a division like the appellant depend on the "Programs of Activity" as described in the relevant division's extended Strategic Plan and approved Business Plans. Although the plans submitted by the divisions will not become part of a division's OBF Agreement unless the Commonwealth agrees, the plans are devised by each division to suit its own purposes, resources, problems and personnel. It is for each division to identify for what it wants the Commonwealth funding. The Commissioner denied that the divisions had any autonomy, because they were obliged by cl 3 of Sched 1 to provide programmes of activity based on a national framework within which decision making and priority setting was focused on activities in four areas (namely, population health, services by general practitioners to patients, services to general practitioners by the division, and infrastructure). The Commissioner submitted that these four areas were not nominated by the divisions but were instead presented by the Department. The problem with this approach is that the Commissioner failed to indicate anything restrictive about those four very general areas, which appear to cover the universe of relations between a division and general practitioners and between general practitioners and the population. Byrne AJA was correct to conclude that the appellant "plays an active role in Crennan itself selecting the particular projects which it undertakes for the benefit of its community"16. The second answer is that the evidence does not reveal that there was in fact any incapacity to negotiate. There was no legal compulsion on the appellant to seek funding from the Commonwealth, and the evolution of divisions suggests that the Commonwealth felt some pressure to ensure that divisions like the appellant entered OBF Agreements so that the Commonwealth's desires could be carried out. The Commonwealth referred to evidence by the Chief Executive Officer of the appellant that after the late 1990s the Commonwealth "moved to a [system of] block grant[s] and set some broad outcome indicators and said, 'You shall do a variety of things that will meet these outcomes'". This summary was directed only to the distinction between activity funding and outcome funding, not to the precise way the Commonwealth behaved in its communications with divisions. That apart, as the Commissioner accepted, there was no admissible evidence of how the appellant and the Department had behaved when the appellant proposed its extended Strategic Plan and its Business Plans, and whether any process of bargaining or amendment to those Plans had taken place or could take place. The third answer is that even if it were the case that the Commonwealth declined to negotiate about Strategic and Business Plans, and even if a failure by the appellant or any other division to enter an OBF Agreement would impair or destroy its capacity to function, it does not necessarily follow that the fact of entry by the appellant into an OBF Agreement of itself establishes that the appellant is under the control of the government. However, its terms might create that control, and the Commissioner submitted that in this case they did. Ongoing contractual management and control. The Commissioner relied on two aspects of the OBF Agreement. One was that it compelled the appellant to conform with the Strategic Plan and the Business Plans. The second was that the Agreement provided for periodic reporting by the appellant (cl 7.1 and Sched 3), provided for liaison by the appellant with the Department as required (cl 8.1), provided for the Department to have access to the appellant's premises and records (cl 19), prohibited subcontracting without the Department's consent (cl 22), gave the Department power to procure the replacement of personnel undertaking work in relation to Programs of Activity (cl 23) and gave the Department power at any time to terminate the Agreement or reduce the scope of the Programs of Activity (cl 24.1). 16 Central Bayside Division of General Practice Ltd v Commissioner of State Revenue (2005) 60 ATR 151 at 170 [57]; [2005] ATC 4586 at 4601. Crennan It is common for the donors of funds for charitable purposes to attach conditions to the gift or to stipulate mechanisms pursuant to which the funds are to be expended. These conditions or stipulations do not affect the charitable character of gifts. In addition, the Department is obliged by s 44 of the Financial Management and Accountability Act 1997 (Cth) to manage its affairs in a way that promotes the efficient, effective and ethical use of its resources. Recital C of the OBF Agreement refers to this obligation: "The Department is required by law to ensure the accountability of Program Funds and accordingly, the Division is required to be accountable for all Department Funds received." The expression "Program Funds" means funding supplied by the Department under Sched 4 for the programmes of activity to be carried out by the appellant pursuant to Scheds 1 and 2. The clauses which make the appellant accountable are not properly characterised as forms of control by the Department, but simply as methods of ensuring that the Department itself complies with the law. Ongoing review by the Department. The Commissioner relied on a letter of 14 September 2001 from the Department foreshadowing the "development of a strategic planning and performance reporting framework". The Commissioner also relied on a letter dated April 2002 from the Department to the appellant (and presumably all other divisions) indicating that the Department proposed "to undertake a more considered approach in developing future funding agreements with Divisions and identifying the services the Commonwealth wishes to purchase from Divisions." Finally, the Commissioner relied on the existence of a Commonwealth Government review of the future role of Divisions of General Practice. The Commissioner did not make clear how these events supported the argument. They add nothing to the arguments relating to the capacity of the Commonwealth to attach conditions to the advance of funds by inserting appropriate terms in the OBF Agreements. The Commissioner relied on Osborn AJA's statement that the Chief Executive Officer of the appellant "implicitly accepted" in evidence "that it would be the Commonwealth Government which determined the ongoing role of the Division"17. That overlooks the fact that the role of divisions will in truth evolve as a compromise between the desires of the Commonwealth and those of the divisions. 17 Central Bayside Division of General Practice Ltd v Commissioner of State Revenue (2005) 60 ATR 151 at 172 [62]; [2005] ATC 4586 at 4602. Crennan Implementing government purposes. The Commissioner, while accepting that a public hospital which received all its income from grants by the Commonwealth or a State subject to conditions was a charitable body, failed to explain how the appellant was different. The Commissioner said that the hospital was acting primarily in furtherance of its own purposes, but that the appellant did not: it "acted to implement certain government purposes directly". The Commissioner said that the government prescribed the purpose: in fact the appellant prescribed the purpose and the government agreed. The Commissioner also accepted that if a wealthy foundation had approached the appellant and offered it money for the purposes and in the terms set out in the OBF Agreement, that would be a valid charitable gift, because the donor would not have "independent non-charitable purposes" of its own which it would require to be furthered. But just as the appellant's purposes would be identical with the foundation's, so the appellant's purposes are identical with those of the Department. The Commissioner submitted that the difference between a hospital receiving funds from the government, or the appellant receiving funds from a foundation, on the one hand, and the appellant receiving funds under the OBF Agreement, on the other, was that in the latter instance "the whole system was set up to implement government policy". The appellant, while receiving funds under the OBF Agreement, was not independently pursuing its own charitable purposes, but was rather implementing government policy, even if its purposes "are consonant with or coincide with government policy". This argument is unsound. The appellant had a certain charitable purpose. The government wanted to advance the very same purpose. The appellant decided to advance its purpose by receiving funds from the government and spending them in the manner it did. These events did not cause the appellant to cease to be a charitable body merely by reason of the fact that the government is not a charitable body. Many charities implement government policy in the sense that their goals – providing education, aiding the sick and the poor – are the same as those of the government. Thus "a trust for the benefit of inmates in government mental asylums, or for the benefit of children under the care of the Children's Welfare Department would be charitable"18. The history of 18 In re Cain (decd); The National Trustees Executors and Agency Co of Australasia Ltd v Jeffrey [1950] VLR 382 at 388 per Dean J, citing Diocesan Trustees of the Church of England in Western Australia v Solicitor-General (1909) 9 CLR 757 at Crennan general practice divisions suggests that medical practitioners originally began to cooperate for charitable purposes of their own volition. The Commonwealth Government perceived that those purposes, which it shared, could be more effectively carried out by government-influenced reorganisation of, and government funding for, the activities of local private medical practitioners, than by enlisting the aid of more remotely located public servants. The appellant submitted that the Commissioner's stand rested on a confusion between the purpose of the appellant in acting "to improve patient care and health", which is a purpose shared by the Commonwealth, and the purpose of a body to give effect to government purposes, whatever they might be. The mere fact that the appellant and the government both have a purpose of improving patient care and health does not establish that the appellant has the purpose of giving effect to government purposes, abdicating any independent fulfilment of its own. The appellant's purpose is charitable. It remains charitable even though the government is the source of the funds it uses to carry out that purpose. Its consent to the attachment by the government of conditions to the employment of those funds does not establish that the appellant is not independently carrying out its purpose. These submissions are correct. To carry out the object of the appellant may be said to assist the achievement of government policy, but it does not follow that the appellant's object has changed from improving patient care and health to achieving government policy. The appellant's object continues; all that has happened is that it has seen entry into a beneficial agreement with the government as a means of achieving that object. It follows from the rejection of the Commissioner's arguments that Chernov JA, with respect, erred in holding that the appellant carried out its functions "in order to discharge the responsibility assumed by government to support and ensure the provision of efficient, integrated, quality local health care"19. Rather, the appellant carried out its functions in order to fulfil its object, improving patient care and health, and the government entered the OBF Agreement in order to discharge its own responsibility for patient care and health. It also follows that Chernov JA, with respect, erred in concluding that the appellant's core activities were performed pursuant to the dictates of government. 19 Central Bayside Division of General Practice Ltd v Commissioner of State Revenue (2005) 60 ATR 151 at 159 [20]; [2005] ATC 4586 at 4593. Crennan Even if, by fulfilling its own purpose, the appellant performed "the work or function of government"20, that did not prevent it from being a charitable body. Osborn AJA erred, with respect, in concluding that the appellant was "a creature and agent of government". The precise sense in which these expressions were employed was not indicated, but an otherwise charitable body which accepts conditional grants in order to fulfil its object does not thereby become in any sense an agent, let alone a creature, of government. His Honour also erred in concluding that the Commonwealth controlled the appellant's activities. Accordingly, the appeal must be allowed. "Public benevolent institution" cases The Commissioner relied on three cases21 for the proposition that it is "inappropriate to characterise activity organised or controlled by government, or predominantly by government, and thus activity effectively funded by taxpayers, as activity of a public benevolent institution according to its established meaning"22. From that proposition it inferred the proposition that activity organised and controlled by government which was funded by taxpayers was not charitable. The analogy between the institutions in those cases and the appellant breaks down, because in those cases the relevant institutions were created by statute, were subject to extensive ministerial control and were "virtually part of a 20 Central Bayside Division of General Practice Ltd v Commissioner of State Revenue (2005) 60 ATR 151 at 160 [22]; [2005] ATC 4586 at 4593. 21 Metropolitan Fire Brigades Board v Commissioner of Taxation (1990) 27 FCR 279; Mines Rescue Board (NSW) v Commissioner of Taxation (2000) 101 FCR 91; Ambulance Service of New South Wales v Commissioner of Taxation (2003) 130 FCR 477. 22 Ambulance Service of New South Wales v Commissioner of Taxation (2003) 130 FCR 477 at 493 [48] per Hill, Goldberg and Conti JJ. Crennan Department of State"23 or represented the Crown24, or were "governmental" bodies25. The appellant was not created by, and is not subject to, any statute generating those characteristics. A further submission by the appellant Apart from the submissions advanced by the appellant supporting the conclusion that the appeal must be allowed, it argued that a body with charitable objects was a charitable body "even if it is subject to substantial or complete government control". The Commissioner contended that no statement in the authorities supported that submission. This is not strictly correct. Question 5 in one of the authorities referred to by the appellant, Re Sutherland, deceased; Queensland Trustees Ltd v Attorney-General26, was: "Whether hospitals which are wholly maintained at the public expense and are subject to the entire control of government officers are qualified for selection by the plaintiffs to participate in the [income of the trust funds]?" The Full Court of the Supreme Court of Queensland answered that question "Yes". However, the authority is of very limited weight, since no party before the Court contended for a different answer. The appellant relied on other authorities27, but they do not explicitly support the proposition, partly because 23 Ambulance Service of New South Wales v Commissioner of Taxation (2003) 130 FCR 477 at 487 [28] per Hill, Goldberg and Conti JJ quoting Allsop J in Ambulance Service of New South Wales v Deputy Commissioner of Taxation (2002) 50 ATR 496 at 526 [151]; [2002] ATC 4681 at 4708. 24 Metropolitan Fire Brigades Board v Commissioner of Taxation (1990) 27 FCR 279 at 280-281; Mines Rescue Board of New South Wales v Commissioner of Taxation (2000) 101 FCR 91 at 92 [2]; Ambulance Service of New South Wales v Commissioner of Taxation (2003) 130 FCR 477 at 480-481 [9]. 25 Metropolitan Fire Brigades Board v Commissioner of Taxation (1990) 27 FCR 279 26 [1954] St R Qd 99 at 101. 27 Attorney-General v Heelis (1824) 2 Sim & St 67 at 76 [57 ER 270 at 274]; Attorney-General v M'Carthy (1886) 12 VLR 535; Robison v Stuart (1891) 12 LR (NSW) Eq 47 at 49-51; In re Morgan's Will Trusts; Lewarne v Minister of Health [1950] Ch 637; In re Frere decd; Kidd v Farnham Group Hospital Management Committee [1951] Ch 27 at 32; Tasmanian Electronic Commerce Centre Pty Ltd v Commissioner of Taxation (2005) 142 FCR 371. Crennan they do not make clear the degree of government control, if any, present, partly because questions of government control were not central to the reasoning, and in one instance, because the outcome turned on the terms of legislation28. In view of the fact that the appeal must be allowed on other grounds, it is undesirable and unnecessary to decide on the correctness of this submission, or to determine the related issue of whether a body, to be charitable, must independently carry out its charitable purpose. Orders The following orders should be made. Appeal allowed. The respondent to pay the costs of the appellant in this Court. Set aside the orders of the Court of Appeal, Supreme Court of Victoria, made on 1 July 2005 and, in their place, order: (a) Appeal allowed. Set aside the orders of the Supreme Court of Victoria made on 15 August 2003. The appellant's appeal from the decision of the Victorian Civil and Administrative Tribunal made on 22 November 2002 be allowed. The Notice of Determination issued by the respondent dated 16 July 2002 to disallow the appellant's Objection dated 29 January 2002 be set aside. The appellant's Objection dated 29 January 2002 against the respondent's decision dated 14 December 2001 be allowed. The respondent pay the costs of the proceedings in the Court of Appeal of the Supreme Court of Victoria, and in the Supreme Court of Victoria. 28 Construction Industry Training Board v Attorney-General [1973] Ch 173. Kirby KIRBY J. This appeal from a judgment of the Court of Appeal of the Supreme Court of Victoria29 presents a question as to the meaning of an exemption for a "charitable body" in State revenue law. Central Bayside General Practice Association Limited ("the appellant") claims that it is a "charitable body", and thus entitled to the exemption. The Commissioner of State Revenue (Vict) ("the Commissioner") (the respondent to this appeal) contests the appellant's entitlement. So far, the Commissioner's conclusion has been upheld by the Victorian Civil and Administrative Tribunal ("the Tribunal")30; by a single judge of the Supreme Court of Victoria (Nettle J)31; and by majority decision of the Court of Appeal32. By special leave, the appellant now seeks reversal by this Court of the order that it does not qualify for the exemption. I agree in the conclusion expressed by the other members of this Court. The appellant does qualify. However, because my reasoning takes a different course, it is necessary to explain the way in which I have arrived at identical orders. In doing so, I will call attention, as others have done in the past33, to unsatisfactory features of the general law on charities, which the parties to the appeal did not question, but accepted. The facts Appellant's activities and claim: The facts relevant to the decision in this appeal are set out in some detail by Gleeson CJ, Heydon and Crennan JJ34, and by Callinan J35. Their Honours' reasons severally describe the legal character of the appellant as a not-for-profit company limited by guarantee established for 29 Central Bayside Division of General Practice Ltd v Commissioner of State Revenue (2005) 60 ATR 151; [2005] ATC 4586. 30 Decision of the Victorian Civil and Administrative Tribunal (Taxation Division), G Gibson, Member, 22 November 2002 ("Decision of the Tribunal"). 31 Central Bayside Division of General Practice Ltd v Commissioner of State Revenue (2003) 53 ATR 473; [2003] ATC 4835. 32 Chernov JA, Osborn AJA; Byrne AJA dissenting. 33 Royal National Agricultural and Industrial Association v Chester (1974) 48 ALJR 304 at 305-306; 3 ALR 486 at 488. 34 Reasons of Gleeson CJ, Heydon and Crennan JJ at [1]-[15]. 35 Reasons of Callinan J at [148]-[160]. Kirby specified objects, with a mission statement and goals set out in its constituting documents. their professional development; and The membership and governance of the appellant are also described in those reasons, together with the general nature of its activities. Putting them broadly, they were to support general practitioners within the Central Bayside area of suburban Melbourne by improving their health information systems; assisting facilitating accreditations; improving their access to information systems; and increasing cooperation with one another, with pharmacists and with others (including in a specific project addressed to falls and falls injury prevention in frail and aged persons)36. These activities were designed to encourage, directly or indirectly, an outreach to the local community by the general practitioners concerned; and the treatment of patients living in that community. The evidence establishes that a relationship exists between the appellant and the federal Department of Health and Ageing ("the Department"). This feature of the appellant's operation has occasioned close and repeated attention by the law. As appears in the other reasons, the resulting relationship provided the overwhelming bulk of the appellant's income in the year of revenue in question in these proceedings37. The income was effectively tied to purposes specifically designated by the terms of the departmental grant (Outcomes-Based Funding or "OBF grants"); or by grants for other specifically approved purposes ("project-based grants")38. The arrangements with the Department included requirements to submit strategic and business plans to the Department, together with regular reports on the fulfilment of the approved purposes. In addition, the appellant faced the possibility of on-site inspections by departmental officers. Such inspections were designed to ensure that the Department could be accountable for the expenditure of the federal funds directed to the appellant, and that the appellant's approved activities would fulfil its own programmes at the same time as they contributed towards the aggregate activities of similar "divisions of general practice", established throughout the nation. Such divisions had begun operation in 1992 for the stated purpose of improving the delivery of general medical practice services to patients. They were established with the support of federal funding. 36 Reasons of Gleeson CJ, Heydon and Crennan JJ at [5]-[6]. 37 Amounting to approximately 93% of all income. See reasons of Callinan J at 38 See reasons of Callinan J at [158]. Forty-three percent of total income was outcome-based funding grants. The balance of federal funding was project-based. Kirby By the time of the year of revenue, 123 such divisions had been established throughout Australia. Together they enjoyed a participation rate of about 80% of general practitioners in Australia. The appellant contended that it was properly to be characterised as a "charitable body". It made this assertion by reference to the charitable objects expressed in its founding documents; the not-for-profit constitutional provisions governing its organisation; and the ongoing public benefit which it gave to patients (including to particular groups such as the old and frail, Aboriginal and Torres Strait Islanders and non-English speaking patients39). For this reason, it claimed that it was entitled to exemption from the liability otherwise arising under the Pay-roll Tax Act 1971 (Vic) ("the Act"), to pay tax on wages paid to its employees. Shifting basis of the dispute: Originally, the Commissioner rejected the appellant's claim for an exemption on the basis that the proper characterisation of the appellant was that of a "professional body with the aim of promoting the interests of its members". A body so characterised would not, on a conventional approach, be classified as a "charitable body", even though it might incidentally perform charitable activities. Before the Tribunal, however, the Commissioner shifted his ground. He contested the classification of the appellant as a "charitable body" on the basis that its purposes were not exclusively charitable but amounted to services provided, in effect, as part of "an integrated … scheme of national health management presided over by the Federal Government"40. The Tribunal, expressing misgivings, upheld this argument. Its decision survived two levels of appeal in the Supreme Court of Victoria. Those appeals were limited to a point of law. Before the Supreme Court, the Commissioner did not press his original argument that the true character of the appellant was that of a body promoting the interests of its members. Doubts about the correctness of that concession were voiced both by the primary judge41 and by Chernov JA in the Court of Appeal42. However, that issue has not been agitated before this Court. 39 See cl 3 of the constitution of the appellant in the reasons of Gleeson CJ, Heydon and Crennan JJ at [5]. 40 Decision of the Tribunal at [25]. 41 (2003) 53 ATR 473 at 476 [8], 481 [13]-[14]; [2003] ATC 4835 at 4837, 4841. 42 (2005) 60 ATR 151 at 153 [3]; [2005] ATC 4586 at 4588. Kirby The decisional history and common ground Decisional history: The history of the proceedings is described in other reasons43. Although the Tribunal, the primary judge and the majority in the Court of Appeal severally expressed themselves in somewhat different terms, the essential reasons for rejecting the appellant's claim to be a "charitable body" were the same. All of the decision-makers (including Byrne AJA, who dissented in the Court of Appeal) assumed that the word "charitable", contained in the Act, was to be given a meaning derived by analogy from the preamble to the Statute of Elizabeth (the Charitable Uses Act 1601 (UK)44), as explained by Lord Macnaghten in the decision of the House of Lords in Commissioners for Special Purposes of the Income Tax v Pemsel45. According to this approach, the decision-maker was required to search for the "spirit and intendment" of the Elizabethan statute46 or, as otherwise put, to ascertain whether the appellant lay within the "equity" of that statute47. It was accepted that, ultimately, this task enlivened a question for judgment and evaluation in the circumstances of the particular case48. Upon this basis, the Tribunal, the primary judge and the majority in the Court of Appeal concluded that the appellant was not a "charitable body". Effectively, this was because the evidence revealed that it was "too close to the Commonwealth" so that, essentially, it was carrying out federal government or legislative policy and not acting for charitable purposes49. Upon this view of the facts, the appellant was held to be effectively responding to the "dictates" of the Department, exerted through the power of the 43 Reasons of Gleeson CJ, Heydon and Crennan JJ at [16]-[20]; reasons of Callinan J 44 43 Eliz I c 4. 45 [1891] AC 531 at 581. 46 (2003) 53 ATR 473 at 486 [32]; [2003] ATC 4835 at 4845. 47 (2005) 60 ATR 151 at 160 [22]; [2005] ATC 4586 at 4593. 48 Incorporated Council of Law Reporting (Q) v Federal Commissioner of Taxation (1971) 125 CLR 659 at 666 per Barwick CJ. 49 (2005) 60 ATR 151 at 160-161 [23]; [2005] ATC 4586 at 4593-4594. Kirby purse50. It was thus a "creature" or "agent" of the federal Government51. Whilst doubtless many of its activities and purposes were consonant with a "charitable" classification, the "body" itself could not be so characterised. In effect, it was carrying out national governmental policy. This was held to deprive it of the "charitable" character that was necessary to qualify for the exemption under the Act. Common ground: I have mentioned the common ground that existed between the parties, below and in this Court, concerning the way in which the word "charitable", appearing in the Act, was to be interpreted. This was common ground upon a matter of law. That puts it in a class different from common ground on issues of fact. I will return to this point. In the meantime, it is useful to take note of the common ground that also existed between the Commissioner and the appellant about the facts. The Commissioner acknowledged that the appellant was not, as such, a department or instrumentality of the federal Government. So much was plain from the relevant legislation. He accepted that the appellant's activities were for the benefit of the community. The Commissioner also accepted that the appellant received, and could seek, funds other than those provided by the Department. Moreover, it was not bound in law to accept those funds. It could reject them if it so decided in accordance with its constitution. The Commissioner further accepted that the only means by which the Commonwealth could exert control over the appellant was through its financial power. However, he submitted that this was sufficient. The extremely high reliance placed on federal funds (which constituted almost the entirety of the appellant's income); and the subjection of the appellant to approval, monitoring and potential intervention, all added up to effective control in practical terms. That fact was supported by the existence of a large, integrated national scheme, within which the appellant formed only one of many units pursuing an overall objective orchestrated by the Department. Upon this view, it was not necessary for the Department to appoint representatives to the appellant's board so as to control it. The appellant's pursuit of federally approved projects was assured by the fact that any deviation would be sanctioned by the unwelcome reduction, or withdrawal, of federal funds. These are the arguments that convinced the Tribunal and the courts below. However, into the exotic consideration of a statute enacted by the Parliament of England in the reign of the first Queen Elizabeth, I must now intrude the practical 50 (2005) 60 ATR 151 at 159-160 [21]; [2005] ATC 4586 at 4593. 51 (2005) 60 ATR 151 at 171 [61] per Osborn AJA; [2005] ATC 4586 at 4602. Kirby realities of the statute applicable to this appeal, enacted by the Parliament of Victoria in the reign of the second Queen Elizabeth. The legislation The courts below gave virtually no attention to the detail of the legislation in question in this case. Neither did the written arguments of the parties or initial oral arguments before this Court. That legislation was enacted by the Parliament of Victoria in 1971. Its purpose was to impose a general obligation to pay payroll tax upon "wages", subject to State regulation. Section 10 of the Act affords an "exemption from pay-roll tax", as follows: "(1) The wages liable to pay-roll tax under this Act do not include wages paid or payable – by the Governor of a State; by a religious institution to a person during a period in respect of which the institution satisfies the Commissioner that the person is engaged exclusively in religious work of the religious institution; (ba) by a public benevolent institution to a person during a period the the Commissioner that the person is engaged exclusively in work of the institution of a public benevolent nature; respect of which institution satisfies (bb) by a charitable body (other than a school or educational institution or an instrumentality of the State) to a person during a period in respect of which the body satisfies the Commissioner that the person is engaged exclusively in work of the body of a charitable nature; (bc) by a public hospital to a person during a period in respect of which the hospital satisfies the Commissioner that the person is engaged exclusively in work of the hospital of a kind ordinarily performed in connexion with the conduct of public hospitals". There follow further exemptions extending to particular cases of great specificity. There is an exemption for certain private hospitals (par (c)); certain schools, colleges and school councils (pars (d), (da), (daa) and (db)); specified municipal councils (save for wages paid for activities of identified profit-making kinds) (par (e)); consular and like staff (par (f)); United Nations agency staff (par (g)); the Commonwealth War Graves Commission (par (h)); the Australian- American Educational Foundation (par (i)); defence personnel or employers Kirby employing such personnel whilst on leave (par (j)); and defined corporations acting in connection with municipal councils (par (l)). As is evident from the foregoing list, the category of exemption claimed by the appellant was added to the Act after its original enactment. In so far as the specific reference to a "charitable body" grants an exemption, it expressly excludes schools and educational institutions or instrumentalities of the State. In order to qualify for an exemption, such bodies have to attract one of the other specific paragraphs and satisfy their terms. According to the Pemsel test, "'[c]harity' in its legal sense comprises four principal divisions: trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community, not falling under any of the preceding heads"52. However, the drafter of s 10(1) of the Act was not content to leave "charitable bodies", defined in such general terms, to do the entire work of exemption. Indeed, the notion of "charitable body" was not originally expressed in the Act at all. Depending on the particular circumstances, several of the expressed categories of exemption might come within the charitable notions of "relief of poverty", "advancement of education" and even (in s 10(1)(b) of the Act) "the advancement of religion". Many, in a general sense, would be for "purposes beneficial to the community not falling under any of the preceding heads". Yet the Parliament of Victoria took no chances. As can be observed, s 10(1) includes a collection of highly particular categories and institutions which, in aggregate, seem to owe more to political bargaining and compromise than to a semi- coherent scheme of the kind that Pemsel was endeavouring to sustain. The issues As I approach this appeal, four issues require consideration: The statutory primacy issue: Having regard to the way in which the parties argued this matter before the Tribunal, in the courts below and in this Court, is it permissible for this Court to examine for itself the meaning of "charitable body", as that phrase appears in s 10(1)(bb) of the Act, so as to give meaning to that phrase in its statutory context? Is it permissible to question the assumption that the parties have made that the word "charitable" when used in s 10(1)(bb) of the Act is to be given a "technical" or "legal" meaning, by analogy to the Statute of Elizabeth, in accordance with Pemsel? 52 Pemsel [1891] AC 531 at 583. Kirby The meaning of charity issue: Depending on the answer to issue (1), what meaning should be given to the words "charitable body" in s 10(1)(bb) of the Act? Is that phrase to be accorded the meaning expressed in Pemsel, or is the true starting point for legal analysis in this appeal a recognition of the primacy of the Act and an ascertainment of the meaning of the phrase "charitable body" in the ordinary way, by giving content to the language, context and purposes of the Act? In light of the meaning given, does the appellant answer to the description of a "charitable body"? The governmental exemption issue: Depending on the answer to issue 2, is it inherent in a "charitable body" that such a body does not emanate from, and is not controlled by, government? If its purposes, directly or indirectly, involve the carrying into effect of governmental objectives, is the body incapable of answering to the description of a "charitable body"? If the character of "charitable" is to be ascertained by analogy with the preamble of the Statute of Elizabeth, with its references to "repairs of bridges, ports, havens, causeways, churches, sea banks and highways"53, given the advance of governmental activities into these and other functions, is the disqualification inapplicable, at least in Australia, where such activities have long been performed by government and its agencies? In any event, does the contemporary Australian notion of "charitable" include activities performed by bodies acting indirectly as agents of governmental policy, so long as the body is created, and acts, independently of government control? The exemption of the appellant issue: Having regard to the answers to the foregoing issues, did the majority of the Court of Appeal err in affirming the Commissioner's refusal to exempt the appellant from payroll tax under s 10(1)(bb) of the Act? Excluded issues: There are three further issues that should be mentioned at this stage, although I will put them out of account as issues in the proceedings. First, no constitutional or federal statutory issue was raised by either party. For example, no attempt was made by the appellant to suggest that an endeavour by the Parliament of Victoria to impose payroll tax on the wages of employees of a body that was performing functions authorised by or under federal law was inconsistent with the commands of such federal law, and thus, invalid for constitutional reasons54. Any such submission would have been inconsistent with 53 The Statute of Elizabeth is set out in modern English rendition in McGovern v Attorney-General [1982] Ch 321 at 332 per Slade LJ. 54 Constitution, s 109. Kirby the appellant's endeavour to distance itself from the Commonwealth and the Department so as to avoid the suggested disqualification. It is therefore safe to put this issue to one side. Secondly, I can also put aside the concerns expressed in the courts below about the Commissioner needlessly abandoning his initial argument that the true character of the appellant was that of a professional association, established for the benefit of its members, and only incidentally or secondarily a body with purposes and activities of a charitable character, for the general public or a substantial section thereof. That issue was not reopened in this Court. I am content to disregard it even though it appears far from unarguable. Thirdly, the Commissioner did attempt to invoke, in support of his submissions, a number of cases arising under the "public benevolent institution" exemption which appears in s 10(1)(ba) of the Act. In so far as the cases cited have any relevance to the issue before this Court, I do not regard them as helpful, save in so far as they demonstrate the importance of construing the contested phrase in its own statutory context. I agree, on this point, with what is said in other reasons55. The cases are distinguishable. The four issues that I have identified remain to be addressed. The primacy of the statute Implausible issue or judicial obligation? In their joint reasons, Gleeson CJ, Heydon and Crennan JJ have suggested that "[i]t is not easy to see a basis upon which [the Pemsel rule could be questioned] with any degree of plausibility"56. I do not agree with this opinion. Ultimately, my disagreement rests on a view of the Constitution, of the role of the Judicature it creates, and specifically of the functions of this Court. A fundamental assumption of the Constitution of the Commonwealth is maintenance of the rule of law57. Inherent in that obligation is the notion that courts, disposing of matters within the Judicature, will give effect to the commands of the several legislatures of the States and the Commonwealth, as expressed in the statutes which they enact, or in the subordinate laws which they thereby authorise. The Act in question in this case is such a statute. Its validity 55 Reasons of Gleeson CJ, Heydon and Crennan JJ at [46]-[47]; reasons of Callinan J 56 Reasons of Gleeson CJ, Heydon and Crennan JJ, fn 6. 57 Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 193; Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 513 [103]. Kirby has not been questioned. On its face, it is valid and applicable. This Court must therefore give effect to it. It must do so according to its terms. This Court has no authority to ignore or neglect a meaning of legislation which the Parliament intended. Whilst respect is paid to the issues which the parties define, it is ultimately not for the parties to make "concessions" concerning the content of the law. No court can accept, and act upon, an incorrect understanding of the law. Nor can parties expect that judges will simply go along unquestioningly with an erroneous understanding of the law, particularly where these understandings arise because they have not been questioned by the parties58. As averted to earlier, the position differs when a court is considering matters of fact, as opposed to matters of law. If the parties agree on the state of the facts, it would ordinarily work a procedural unfairness for a court to ignore the parties' agreement and to proceed to decide facts in a manner contrary to the way in which the case has been litigated59. However, no such procedural impediment arises when the court is faced with issues of law. The judicial duty to the law is paramount. Any potential procedural unfairness arising from a different view of the law can be overcome by raising the matter for argument and affording the parties the opportunity to put their submissions. This was certainly done when this appeal reached this Court. The concern that I felt about the assumed meaning of the phrase "charitable body" in s 10(1)(bb) of the Act was squarely identified. It involves the discharge by this Court of its constitutional function of disposing of the appeal according to law. If judges do not question doubtful assumptions about the law they will just go on, sheep like, repeating legal mistakes inherited from past generations. There have been many advances in the approach to the interpretation of legislation adopted by this Court in recent years. A nation's final court, as I conceive it, must be willing to test past legal assumptions and to correct error if it is demonstrated by the course of proceedings. Statutory primacy: The present appeal is, in fact, a clear instance of an error in approach to legal analysis which is relatively common and which this Court, over the past decade, has been at pains to correct. 58 cf Roberts v Bass (2002) 212 CLR 1 at 54 [143]. 59 Coulton v Holcombe (1986) 162 CLR 1 at 7-9. Kirby I made this point in Brodie v Singleton Shire Council60: "[T]he duty of a court is to the law. If a valid statute is enacted with relevant effect, that duty extends to giving effect to the statute, not ignoring it. No principle of the common law can retain its authority in the face of a legislative prescription that enters its orbit with relevant effect. The proper starting point for the ascertainment of the legal duties … is the statute." the same year, in Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vict)61, Gaudron, Gummow, Hayne and Callinan JJ insisted that the inquiry presented by the issues in that appeal "must begin with the relevant statutory provisions"62. I agreed, and remarked63: "The arguments in a number of recent appeals demonstrate a tendency to give priority to judicial exposition of legislation over analysis of what the legislation actually provides. It is as if the legal mind finds it more congenial to apply the law as stated by judges rather than the law as stated by a legislature. This tendency must be resisted, as must the related tendency, when construing our own legislation, to look to English judicial authority on English legislation, sometimes enacted more than a century ago." These remarks gain added force when the judicial exposition in question is one that was uttered more than a century ago in England, in relation to a statute enacted more than four centuries ago. Time and time again, this Court has reinforced the foregoing instruction. It is self-evident, but apparently it needs to be restated. Where the law in issue is expressed in the form of an Act of an Australian legislature, it is in the words of that statute that the content of the legal obligation is to be found, not in judicial synonyms, restatements or approximations. Upon this matter, this Court has until now spoken with a single voice64. It should be consistent in applying the 60 (2001) 206 CLR 512 at 602 [231]. 61 (2001) 207 CLR 72. 62 (2001) 207 CLR 72 at 77 [9]. 63 (2001) 207 CLR 72 at 89 [46] (footnote omitted). 64 Victorian WorkCover Authority v Esso Australia Ltd (2001) 207 CLR 520 at 526 [11], 545 [63]; The Commonwealth v Yarmirr (2001) 208 CLR 1 at 37-39 [11]- [15], 111-112 [249]; Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at 266 [159], 269 [164]; Conway v The Queen (2002) (Footnote continues on next page) Kirby same rule to the present appeal. It is not implausible to do so. It is our legal duty. Special considerations: There are a number of special considerations that reinforce the correctness of this approach in the present instance. They combine to cast doubt on the interpretation of a phrase in s 10(1)(bb) of the Act in question in this appeal by unquestioning reference to the authority of English judges (including in the Privy Council65), insisting that Australian legislative texts, making reference to "charity" or "charitable", should be interpreted in accordance with the approach stated by the House of Lords in Pemsel. First, the words in issue appear not in a general statute concerned with the law of charities or charitable trusts at large66. They exist in the particular context of a specific law with respect to the raising of revenue for the general purposes of the government of an Australian State and in connection with the budget process of that government. Presenting the Bill that introduced par (bb) in s 10(1) of the Act, the then Treasurer explained to the Legislative Assembly of the Victorian Parliament adjustments in various State taxes, including payroll tax, alteration in the 209 CLR 203 at 227 [65]; Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491 at 542-544 [143]-[148]; Western Australia v Ward (2002) 213 CLR 1 at 60 [2], 66 [16], 69 [25], 249-250 [588]; Wilson v Anderson (2002) 213 CLR 401 at 430 [47], 459-460 [144]-[146]; Joslyn v Berryman (2003) 214 CLR 552 at 595- 596 [137]; Dovuro Pty Ltd v Wilkins (2003) 215 CLR 317 at 359 [127]; Visy Paper Pty Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 1 at 6-7 [7]-[9]; Alexander v Perpetual Trustees WA Ltd (2004) 216 CLR 109 at 138 [87]; Rich v Australian Securities and Investments Commission (2004) 220 CLR 129 at 167-168 [90]-[94]; Commissioner of Taxation v Linter Textiles Australia Ltd (in liq) (2005) 220 CLR 592 at 649-650 [181]; R v Lavender (2005) 222 CLR 67 at 101-102 [107]; Stevens v Kabushiki Kaisha Sony Computer Entertainment (2005) 79 ALJR 1850 at 1856 [30]; 221 ALR 448 at 455; Travel Compensation Fund v Tambree t/as R Tambree and Associates (2005) 80 ALJR 183 at 195 [54]; 222 ALR 263 at 277; Combet v Commonwealth (2005) 80 ALJR 247 at 280 [135]; 221 ALR 621 at 660; Neindorf v Junkovic (2005) 80 ALJR 341 at 350-351 [42]; 222 ALR 631 at 641; Weiss v The Queen (2005) 80 ALJR 444 at 452 [31]; 223 ALR 65 Chesterman v Federal Commissioner of Taxation (1925) 37 CLR 317 reversing Chesterman v Federal Commissioner of Taxation (1923) 32 CLR 362. See also Ashfield Municipal Council v Joyce [1978] AC 122 (PC). 66 See, for example, Charities Act 1978 (Vic). Kirby threshold at which employers would begin to pay such tax and alteration in the exemptions, including the introduction of an exemption applicable "to charitable bodies other than educational institutions, schools, government departments and public statutory bodies"67. The Minister stated that "the urgency to commence the restoration of the State's finances necessitates the passage of a significant amount of legislation within a limited parliamentary session. This leaves the government no alternative but to adopt this compendium measure." There was no reference before the elected representatives, either in the Minister's speech or in the accompanying documents, to the Statute of Elizabeth, the decision in Pemsel or the importation of their categories into the adjustments of this particular and urgent State fiscal legislation. Without explanation, it seems most unlikely that members of the Victorian Parliament would have read par (bb) as connoting a reference to Pemsel. To render the State legislature accountable to the electors, particularly in the matter of taxation, as the postulate of democratic government requires, it does not seem sufficient that parliamentary counsel might have known of Pemsel or that expert tax lawyers are aware of what it says. At the least, the postulate of democratic accountability for a law enacted by a Parliament of lay members suggests that we should question such an assumption. Secondly, the text into which par (bb) was inserted already included, in several of the other paragraphs, references to exemptions which duplicate, cut across or partially cover the four categories identified in Pemsel which, it is suggested, were imported by the use of the phrase "charitable body" in the new par (bb). Inserting that phrase into a modern statute, by way of amendment, when other categories of a "charitable" character, so defined, are expressly exempted, would not appear to make sense. According to ordinary canons of statutory interpretation, it would not be assumed that par (bb) was inserted into s 10(1) as a redundancy or as a means of duplicating existing exemptions. Yet if there is imported with the reference to "charitable body" in par (bb) the "technical" or "legal" categories described in Pemsel, a significant part of the supposed purpose of the paragraph is rendered otiose because of the other express provisions in the sub-section. Thirdly, the character of the exemption for payroll tax must be understood in light of the fact that such a tax, being imposed on wages, is of a recurrent nature. It falls due for consideration with each recurring payment. The word "wages" is itself very broadly defined in the Act68. The recurrent character of this form of taxation appears to contradict the notion of a settled and immoveable 67 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 6 November 1992 at 566, The Hon A R Stockdale MP, Treasurer, delivering the Second Reading Speech to the State Taxation (Amendment) Bill 1992 (Vic). 68 The Act, s 3. Kirby denotation for a "charitable body" that has never changed, at least in its basic categories, since Pemsel was decided by the House of Lords in 1891 and by inference long before. Fourthly, it defies commonsense and ordinary intuition to suggest that the understanding by the Victorian Parliament, in the context of a 1992 amendment inserting the phrase "charitable body" in the law, would necessarily be the same as the understanding of that phrase in England when Pemsel was decided in 1891. Even more so, it seems unlikely that the phrase would have had the identical meaning in the social circumstances of England in 1601 when the preamble to the Statute of Elizabeth was drawn up. There is no reference in Pemsel or in the preamble to many considerations that might be apt to embody the meaning of a "charitable body" in contemporary Australian society. For example, there is no mention of the defence of fundamental human rights and human dignity; the maintenance of the benefits of science and technology; the protection of refugees and other vulnerable persons; the need for specific assistance for indigenous peoples; the protection of the welfare of animals; the advancement of culture, arts and heritage; the defence of the environment and so forth. To impose rigid categories derived from an English statute of the early 17th century (re-endorsed in 1891 at an historical moment when unity of the common law throughout the British Empire was thought essential) seems arguably incompatible with this Court's duty to adopt a purposive interpretation of legislation enacted by an Australian legislature. Conclusion – consistent approaches: It follows that there is no reason, in principle, why the problem of statutory interpretation presented by the present appeal should be approached in a way different from other cases involving statutory interpretation, considered by this Court in recent times69. The starting point is the statute. This includes its language but also the context of the contested phrase; the given reasons for the introduction of the particular provision; the light thrown on its meaning by surrounding provisions; the general purpose and object of the statute viewed in its time; and the constitutional context of the enactment of a law imposing taxation by which a State government, proposing that law, is rendered accountable to the electors. There may be reasons why a court such as this might ultimately conclude that it cannot perform the function of devising a modern definition of "charitable body", apt to the particular circumstances of the Victorian legislation in issue in this appeal. For example, that conclusion might present where the court lacks detailed assistance from the parties or the presence of a contradictor. However, 69 See for example, Palgo Holdings Pty Ltd v Gowans (2005) 221 CLR 249 at 262 [28]; Eastman v Director of Public Prosecutions (ACT) (2003) 214 CLR 318 at Kirby in my view it is proper, in the first instance, to comply with the settled methodology of this Court in deriving the meaning of the phrase "charitable body" in the statute in question. By that methodology, the ascertainment of the meaning must begin with the legislation and with proper analysis of its text. Revenue law is part of the general law. It is subject to the same general principles governing the ascertainment of its specific parliamentary purposes70. It is not implausible to bring this body of law back to the general approach of the Court. Consistency in matters of general principle is a hallmark of the rule of law. Revenue and charity law are not exempt. Occasion to reopen the meaning of "charitable" Once it is accepted that the Court must give meaning to the words "charitable body" in the context of s 10(1)(bb) of the Act, in the way typical to ascertaining the meaning of Australian statutes, there are a number of reasons for breaking from a search for the "spirit and intendment" of the preamble to the Statute of Elizabeth as the criterion for answering that question71. Some of the reasons have already been foreshadowed. It is unlikely that an Australian Parliament, acting without instruction and comprising ordinary citizens, would appreciate and intend that enacting a statute not specifically concerned with charitable trusts automatically imports a classification devised in England four centuries ago. Least of all could this be regarded as likely if the legislators knew that, in the United Kingdom, where the statutory formula was first adopted in 1601, the Statute of Elizabeth itself was repealed by the Mortmain and Charitable Uses Act 1888 (UK)72, passed before the federation of the Australian colonies. Although that repeal preserved the preamble73, which thereby remained in operation, the 1888 Act, including the preamble, was itself later repealed by the Charities Act 1960 (UK)74. The words of Gonthier J in the Supreme Court of Canada are 70 Federal Commissioner of Taxation v Ryan (2000) 201 CLR 109 at 146 [84]; cf Steele v Deputy Commissioner of Taxation (1999) 197 CLR 459 at 477 [52]; Federal Commissioner of Taxation v Citylink Melbourne Ltd [2006] HCA 35, my own reasons at [12]. 71 Pemsel [1891] AC 531 at 543. 72 51 and 52 Vict c 42, s 13(1). 73 By s 13(2). Kirby equally applicable in the Australian context: "no statutory authority for the preamble now exists"75. For judges, no longer subject to the authority of Imperial or English courts, to maintain obedience to conceptions of "charity" and "charitable bodies", expressed in such different times, seems, on the face of things, an irrational surrender to the pull of history over contemporary understandings of language used in a modern Australian statute. Further, much criticism has been directed towards the continued use of the categories established by the Statute of Elizabeth, and reasoning by analogy from the preamble to that statute. In 1966, several Australian reports reviewed the law relating to charitable trusts76. No substantive change ensued. However, in 2000 a federal inquiry was established into the legal definition of "charity". This resulted in the Report of the Inquiry into the Definition of Charities and Related Organisations, (2001). The report concluded that, although use of the preamble to the Statute of Elizabeth had been "valuable", it had "now outlived its usefulness". The report declared that the process of determining "whether a purpose is within the 'spirit and intendment' of the Preamble or is analogous to a charitable purpose is ambiguous and could lead to inconsistencies". The report further noted that removal of reference to the Statute of Elizabeth had been recommended in England by reports delivered in 1952 and 197677 and that this Court, in 1974, had referred to the possible need for reform78. A detailed statutory definition was proposed for Australian federal purposes, including for revenue purposes. However, after a process of consultation undertaken by the 75 Vancouver Society of Immigrant and Visible Minority Women v MNR [1999] 1 SCR 10 at 40 [32]. 76 In 1966, the Chief Justice's Law Reform Committee of Victoria in its report on Charitable Trusts, (1962-1966) had recommended in par [32] that no attempt be made to enact a statutory definition of "charity". Queensland Law Reform Commission, Trust, Trustees, Settled Land and Charities, Report No 8, (1971); Law Reform Commission of Tasmania, Unclaimed Charitable Funds, Report No 3, (1975); Victorian Legal and Constitutional Committee, Report to the Parliament on the Law Relating to Charitable Trusts, (1989); and Law Reform Commission of Tasmania, Variations of Charitable Trusts, Report No 38, (1984). 77 The Nathan Report, (1952); the Goodman Report, (1976). See also Chesterman, Charities, Trusts and Social Welfare, (1979) at 403-404. 78 Royal National Agricultural and Industrial Association v Chester (1974) 48 ALJR 304 at 306; 3 ALR 486 at 489. Kirby Board of Taxation, the ensuing federal Act79 effected only relatively modest and special amendments to the previous law80. In England, following earlier reports recommending changes to the law, an inquiry in 2002 recommended a new approach to the meaning of "charitable", with a fresh definition of "charity" including several features missing from the approaches adopted in earlier centuries. A Bill to implement the report for England and Wales is before the United Kingdom Parliament. A separate inquiry into the issue has been undertaken in Scotland81. In Canada the defects of the Pemsel categories were noted by the majority of the Supreme Court in the Immigrant and Visible Minority Women case82. That case concerned the entitlement to registration as an organisation with "charitable" status under the Income Tax Act 1985 (Can). The body was established for the purpose of assisting to obtain employment. immigrant and visible minority women The majority of the Supreme Court rejected the Society's appeal against the Minister's refusal of its application. However, they noted "repeated calls for the expansion or replacement of the test to reflect more completely the standards and values of modern Canadian society". They endorsed remarks of Strayer JA in Human Life International in Canada Inc v MNR83 to the effect that the definition of charity remains "an area crying out for clarification through Canadian legislation for the guidance of taxpayers, administrators, and the courts". The majority in the Supreme Court observed that "[i]n the absence of legislative reform, Canadian courts must contend with the difficulty of articulating how the law of charities is to keep 'moving' in a manner that is 79 Extension of Charitable Purpose Act 2004 (Cth). 80 Concerning provision of child care services on a non-profit basis (s 4(1)); open self-help groups (s 5(1)(a)); and closed and contemplative religious orders that regularly undertake "prayerful intervention" at the request of members of the public (s 5(1)(b)). 81 See Kemp Report, (1997) by the Scottish Council for Voluntary Organisations and Scottish Charity Law Review Committee Report, (2001). 82 Vancouver Society of Immigrant and Visible Minority Women v MNR [1999] 1 SCR 10 at 106 [149]. 83 [1998] 3 FC 202 at 214 [8]. Kirby consistent with the nature of the common law"84. The minority in the Supreme Court accepted the need for such movement as axiomatic85. One paper, cited in the Supreme Court86, by Mr E B Bromley, a Canadian expert on the law of charities, remarked87: "The time has come … to redefine radically the legal parameters of what is charitable by simply breaking with Lord Macnaghten's four heads and articulating a restatement of the law as it is in practice today rather than tortuously trying to fit everything into the categories set out in Pemsel. In an ironic fashion, such a radical restatement of current reality without undue allegiance to existing case law would be more consistent with Lord Macnaghten's judgment than simply repeating and adhering to his four categorisations." To like effect, Professor David Duff called for a reformulation that would lay emphasis on public benefit; uphold social and cultural pluralism; and "reject the political purposes doctrine"88. A further reflection of the perceived inadequacies of the Pemsel approach was the recent adoption in New Zealand of the Charities Act 2005 (NZ). Although this enactment appears to preserve the use of the traditional four heads of charity expressed in Pemsel89, it introduces reforms designed to protect special Maori charities and to forestall invalidation of a "charity" by the inclusion amongst its purposes of ancillary non-charitable purposes (including, for example, advocacy)90. 84 Vancouver Society of Immigrant and Visible Minority Women v MNR [1999] 1 SCR 10 at 107 [150]. 85 Vancouver Society of Immigrant and Visible Minority Women v MNR [1999] 1 SCR 10 at 91 [125] per Gonthier J. 86 [1999] 1 SCR 10 at 51 [50]. 87 Bromley, "Contemporary Philanthropy – Is the Legal Concept of 'Charity' Any Longer Adequate?", in Waters (ed), Equity, Fiduciaries and Trusts, (1993) 59 at 88 Duff, "Tax Treatment of Charitable Contributions in Canada: Theory, Practice, and Reform", (2004) 42 Osgoode Hall Law Journal 47 at 68. 89 Charities Act 2005 (NZ), s 5(1). 90 Charities Act 2005 (NZ), s 5(3). Kirby Not all countries of the common law world have continued to adhere to Pemsel. In India, although the influence of Pemsel may still be seen in revenue legislation91, local cultural concepts appear to have been accepted and grafted onto the old law92. A wrong turning? In 1923, in Chesterman v Federal Commissioner of Taxation93, this Court was asked to give meaning to s 8(5) of the Estate Duty Assessment Act 1914 (Cth). That sub-section exempted bequests and gifts "for religious, scientific, charitable or public educational purposes". A majority of the Court (Isaacs, Rich and Starke JJ; Knox CJ and Higgins J dissenting) rejected the submission that "charitable purposes" was to be read in a "technical legal sense". Isaacs J pointed to the "non-technical interpretation" of "charitable purposes" that had been adopted in a decision of the English Court of Appeal published only eight months after the decision in Pemsel94. His Honour was strongly influenced by the context and language of the Australian legislation in issue. So was Starke J who, in language similar to that used above, pointed to the need to construe each statute "by itself for the purpose of ascertaining its meaning" and to have regard to any other exemptions which would "cover a large number of 'charities' in the strict legal sense"95. The reasons of Rich J were to like effect96. There had been earlier Australian decisions in which local judges had endeavoured to be faithful to what they took to be the particular purposes of the Australian statutory text as enacted by These entirely orthodox approaches, attentive both to legal principle and to local conditions, were overruled when Chesterman reached the Privy 91 Municipal Corporation of Delhi v Children Book Trust AIR 1992 SC 1456. 92 CIT v FICC AIR 1981 SC 1408 at 1414-1415 per Venkataramiah J. 93 (1923) 32 CLR 362. See also Swinburne v Federal Commissioner of Taxation (1920) 27 CLR 377 at 384. 94 (1923) 32 CLR 362 at 382 citing Commissioner of Inland Revenue v Scott (1892) 2 QB 152 at 165. 95 (1923) 32 CLR 362 at 399. 96 (1923) 32 CLR 362 at 397-398. 97 See, eg, Trustees of Queen's College v Mayor &c of Melbourne [1905] VLR 247 at 255, noted in Ashfield Municipal Council v Joyce [1978] AC 122 at 139. Kirby Council98. That Court insisted on obedience to the "legal meaning expressed by Lord Macnaghten in Pemsel's Case"99. Fifty years later, the same approach was restated in a Privy Council decision from the Court of Appeal of New South Wales100. It was natural, in a legal environment in which this Court's decisions were subject to appeal to the Privy Council, that obedience to the Pemsel rule would continue, virtually unquestioned. But since that supervision has ceased101, this Court is free to reach its own conclusions. It may, if it chooses, return to its own earlier authority in Chesterman. That authority is, after all, more respectful to the purposes discerned from the particular legislation and to the ordinary principles governing the construction of statutes that give primacy to the parliamentary words over judicial authority. The foregoing reasons therefore provide a sound basis for reopening the meaning of "charitable body" in the present appeal. The issue is not immaterial to the outcome of this appeal given that, upon one view, a narrower, popular meaning for the word "charitable", understood in its ordinary sense, would exclude the appellant, especially if the phrase "charitable body" is interpreted in a revenue statute which imposes a general tax and permits exemptions only in specified and very particular circumstances. In light of the criticism that has been directed at Pemsel, both in Australia and in other common law countries, it is by no means self-evident that Pemsel provides the starting point for defining the word "charitable". Reasons for adhering to Pemsel Had this Court's decision in Chesterman not been overruled by the Privy Council in 1925, it is possible that a more satisfactory approach to the meaning of "charity" and "charitable" would have been fashioned in Australian courts and legislation over the years. In the event, a new kind of judicial mortmain was imposed on the law of charities, relevant to the content of federal and State legislation in Australia. Although, as I have shown, there are reasons that would support, even now, an attempt to fashion a new principle for application to the 98 Chesterman (1925) 37 CLR 317; [1926] AC 128. 99 (1925) 37 CLR 317 at 319; [1926] AC 128 at 131. 100 Joyce [1978] AC 122 at 136-139; cf Salvation Army (Victoria) Property Trust v Fern Tree Gully Corporation (1952) 85 CLR 159 at 174-175, adhering to Pemsel. 101 Privy Council (Limitation of Appeals) Act 1968 (Cth); Privy Council (Appeals from the High Court) Act 1975 (Cth); Australia Act 1986 (Cth), s 11(1). Kirby Act of the Victorian Parliament in question in this appeal, for the reasons which follow, I have concluded that such an attempt should not be made. First, it is by no means clear that the Victorian Parliament intended in this case to depart from the definition supplied by Pemsel. Recent amendments in the Australian federal context and in New Zealand have proved extremely limited. This may demonstrate the complexity and controversy of bolder reforms. Alternatively, it may reinforce a conclusion that the present law is not considered sufficiently anomalous, inefficient or unjust as to require general statutory intervention. If, as a result of the outcome of these proceedings, the Commissioner or the Government and Parliament of Victoria are disturbed, it will be open to them to seek and adopt a further amendment to the Act. The many amendments enacted, and the highly particular provisions appearing there, indicate that such amendments can easily be made where the political will exists. In effect, this constitutes the best answer available to the suggestion that the "technical" or "legal" definition of "charitable" is prone to mislead the elected representatives and Parliament when approving a law raising taxes from the people. Secondly, the one indisputably correct statement that Lord Macnaghten made in Pemsel was that "no one as yet has succeeded in defining the popular meaning of the word 'charity'"102. At least, no one has succeeded in providing a definition that enjoys universal acceptance. To reconceptualise the notion of charity and to apply it to the phrase "charitable body" in the Act, would desirably require assistance from the parties; a study of much comparative material; and close analysis of such material. In a case where neither the parties nor the Commonwealth intervening, was willing to undertake that task, I am not convinced that this Court, unaided, should attempt to do so on its own. Thirdly, the issue of whether the Privy Council's decision in Chesterman should be reversed was carefully re-examined by that Court in Joyce. Lord Wilberforce, who could not be described as a narrow or parochial legalist, took pains to refer to many decisions of this Court, and other Australian courts, which, once the Rubicon of Chesterman was crossed, had faithfully followed the Pemsel approach103. He offered several reasons of legal principle and policy for adhering to the old approach. He did not confine himself to a demand for unquestioning adherence to judicial authority. Fourthly, a judicial re-expression would have wide-ranging implications, affecting the legal affairs of many persons, ordered on the assumption of 102 Pemsel [1891] AC 531 at 583. 103 Joyce [1978] AC 122 at 136-139. Kirby adherence to the Pemsel approach. One of the reasons of policy advanced in Joyce (also mentioned in this appeal by Gleeson CJ, Heydon and Crennan JJ104) is that numerous charitable bodies have organised their affairs to bring themselves within the technical or legal definition, so as to secure the advantage of the exemption105. The Pemsel approach has also been applied beyond the context of revenue law. In light of these considerations, in a case such as this, judges should submit to the constraints of authority106, even where they have serious doubts about the correctness of that authority. Fifthly, in the one instance in which a final appellate court has been invited to review the approach in Pemsel, and to substitute a more modern and local judicial definition, the Supreme Court of Canada declined to accept the invitation. In the Immigrant and Visible Minority Women case107, the majority108 accepted the appellant's criticism of the Pemsel categories and approach. However, they concluded that, for the Court to attempt a re-expression of the law, having so many applications of great variety, would go beyond the proper judicial function to re-express the general law109. Given the ramifications, the majority considered that any such re-expression should be left to Parliament. Sixthly, the existing categories already afford a broad scope for a modern or liberal interpretation of "charity", a point acknowledged by a minority of the Supreme Court of Canada in the Immigrant and Visible Minority Women case110. Whilst not disagreeing with the majority's criticisms of Pemsel, the minority concluded that, especially in the fourth stated category ("trusts for other purposes beneficial to the community, not falling under any of the preceding heads"), and in the technique of reasoning by analogy from the categories collected in the 104 Reasons of Gleeson CJ, Heydon and Crennan JJ, fn 6, referring to considerations of convenience. 105 A list of organisations that have qualified for the exemption can be found in Joyce [1978] AC 122 at 139. 106 Young Men's Christian Association of Sydney (1954) 20 LGR (NSW) 35 per Sugerman J noted in Joyce [1978] AC 122 at 139. 107 Vancouver Society of Immigrant and Visible Minority Women v MNR [1999] 1 SCR 10. 108 Iacobucci J (Cory, Major and Bastarache JJ concurring). 109 [1999] 1 SCR 10 at 107 [150] applying R v Salituro [1991] 3 SCR 654 at 670. 110 Vancouver Society of Immigrant and Visible Minority Women v MNR [1999] 1 SCR 10 at 59 [81] per Gonthier J (L'Heureux-Dubé and McLachlin JJ concurring). Kirby preamble to the Statute of Elizabeth, Pemsel, in practice, afforded a potentially broad and facultative approach to the meaning of "charity" and "charitable"111. Indeed, it is arguable that Pemsel may have actually condoned adjustment and modernisation of the notion of "charity". A return to the ordinary meaning of the word might constrict that process. Dictionary definitions tend to assign as the primary meaning of "charity", "almsgiving; the private or public relief of unfortunate or needy persons; benevolence"112. "Charitable" is primarily defined as "generous in gifts to relieve the needs of others"113. If, as a matter of legal policy, it is considered that the term "charitable", in contemporary revenue laws, should be permitted to expand so as to cover a wider range of community interests, the Pemsel approach may be more conducive to this outcome than an embrace of the demotic meaning of the statutory words. It is possible that colloquial use of the notion of "charity" has kept pace with modern community interests in the legal context in a way that dictionary definitions do not reflect. I tend to think it has. But not everyone shares this belief. Reopening the question (which many parliaments appear to have been willing to leave to the courts) might produce a more restrictive and deleterious policy outcome than is represented by persistence with the approach that Pemsel mandates114. Outcome – change unnecessary: For these reasons, I am content to follow past authority and to treat the reference to "charitable body" in s 10(1)(bb) of the Act as a reference to such a body defined in the Pemsel sense. I concede that this is a counter-intuitive conclusion, given the normal way in which this Court approaches the construction of language in statutes of an Australian Parliament, where the Parliament itself has not provided a special definition to authorise an artificial meaning. The result is odd and the consequential meaning of "charitable" is derived in such a very strange way that I venture to suggest that few citizens know of it and most lay persons, when told, would find it astonishing. 111 Vancouver Society of Immigrant and Visible Minority Women v MNR [1999] 1 SCR 10 at 90-91 [124]-[125]. 112 Macquarie Dictionary, 3rd ed (1997) at 372. 113 Macquarie Dictionary, 3rd ed (1997) at 372. 114 It is insufficient merely to show that the claimant is established for the "public benefit" in the ordinary sense of that term. It remains necessary for it to demonstrate how its purposes are beneficial in a way that the law regards as charitable. See D'Aguiar v Guyana Commissioner of Inland Revenue [1970] TR 31 at 33 (PC). Kirby A return to an understanding of "charitable" in this context, according to the understanding of ordinary language, might result in a finding adverse to the appellant. But because I have concluded that this Court should adhere to past authority on the "legal" or "technical" meaning of "charitable", that outcome is avoided. A "charitable body", as the phrase is used in s 10(1)(bb) of the Act, is not confined to a body whose purposes and activities are concerned with gift- giving and help to "needy" or disadvantaged persons. Within the fourth category described by Pemsel, the appellant has been established for purposes which, though not falling under the three earlier heads, are nonetheless beneficial to the community. Subject, therefore, to the suggested exclusion of the appellant by reason of its close association with the Department, and its implementation of federal governmental policy, the appellant qualifies as a "charitable body". It is thus entitled to exemption from Victorian payroll tax. The ambit of the governmental disqualification Reasons for exclusion: In deciding whether an organisation, claiming to be a "charitable body" fits that description, the starting point for analysis is to identify the organisation's (ie the "body's") purposes. Obviously, the constitution of the body will be important for this purpose. However, it cannot be conclusive. The constitution will often have been drafted by lawyers with an eye to the revenue implications of the document. That is why it is material to have regard also to the activities of the organisation, as an assurance that the nominated "purposes" are genuine and express the real, as distinct from purely nominal, objectives for which the body is established. The difficulty of identifying the character of an activity as charitable was explained by the Supreme Court of Canada115: "The difficulty is that the character of an activity is at best ambiguous; for example, writing a letter to solicit donations for a dance school might well be considered charitable, but the very same activity might lose its charitable character if the donations were to go to a group disseminating hate literature. In other words, it is really the purpose in furtherance of which an activity is carried out, and not the character of the activity itself, that determines whether or not it is of a charitable nature … Unfortunately, this distinction has often been blurred by judicial opinions 'activities' almost which have used 'purposes' and terms the 115 Vancouver Society of Immigrant and Visible Minority Women v MNR [1999] 1 SCR 10 at 108 [152]-[153]. See also Attorney-General v Brown (1816) 1 Swans 265 [36 ER 384]; Attorney-General v Eastlake (1853) 11 Hare 205 [68 ER 1249]. Kirby interchangeably. Such inadvertent confusion inevitably trickles down to the taxpayer organization, which is left to wonder how best to represent its intentions to [the revenue] in order to qualify for [exemption]". The disqualification of organisations from description as "charitable bodies", on account of their connection with government, is linked to the characterisation of their "purposes". If the "purposes" fall within the Pemsel criteria, the body will be classified as "charitable". If, however, the "purposes" are no more than to implement governmental, including legislative, objectives, those features will colour the character of the body. It will then be designated as one to implement governmental policies, whether charitable or non-charitable. It will not qualify as a "body" whose purposes are identifiably "charitable". It was this distinction that was emphasised by Dean J in In re Cain (Deceased)116. One of the bequests of the will considered in that case was to the Children's Welfare Department at a nominated address, which was that of a State government department known by that name. The next-of-kin contended that the gift was void as not charitable. Various old cases on testamentary gifts to ministers and public officials117 were examined for the instruction that they provided. It appears to have been accepted that a gift to the State of Victoria or to the Government of Victoria would not be charitable. But what of a gift to the Child Welfare Department? Dean J said118: "In my opinion, if the present gift be construed as a gift for carrying on the ordinary activities of a Government department pursuant to a statute, the gift is not a gift for charitable purposes, even if the activities are such that if carried on by private persons they would be charitable. Such activities are simply part of the government of the country. … [The department] is concerned primarily with the welfare and protection of children. It is performing functions which Parliament, as a matter of public policy, has committed to it. It cannot, whilst performing its statutory duties, have any greater claim to be charitable than the Railways Department, the Department of Public Works, or the Crown Law Department." Notwithstanding these observations, and consonant with an approach favourable to upholding testamentary dispositions wherever possible, Dean J concluded that the gift was good because, according to the evidence, it would not 116 [1950] VLR 382. 117 See, eg, Nightingale v Goulbourn (1848) 2 Ph 594 at 596 [41 ER 1072 at 1073] referred to at [1950] VLR 382 at 386. 118 [1950] VLR 382 at 387. Kirby be used "in ease of Government expenditure"119, but "an appropriate method of using it to benefit children under [the Department's] care in some manner not likely to be carried into effect in the ordinary application by the Department of its grants from consolidated revenue" would be devised. Adherence to the charitable purpose would remain under the control of the court. The reasoning behind this analysis suggests a bifurcation between bodies that carry out governmental policy, using funds derived from Consolidated Revenue; and bodies that receive public funds but are not part of the machinery of government. For bodies that are part of such machinery, the charitable "purposes" necessary to attract characterisation as a "charitable body" are absent. Their purposes are governmental. Such bodies are therefore no more than an agent of government. Their activities may be beneficial to individuals and to the community, but they are still performing activities decreed by government. They lack the spark of altruism and benevolence that is essential to characterisation as "charitable". They are, in Dean J's words, "simply part of the Government of the country". The Commissioner's arguments: The Commissioner's argument, that the appellant failed on this basis, was not without persuasive force, as is evident from its success in the Tribunal, before the primary judge and in the Court of Appeal. The strongest evidentiary support for the characterisation which the Commissioner urged derived from the following facts: almost the entirety of the income of the appellant came from the Department; that income came under conditions largely or wholly tied to the pursuit of approved departmental policies; the appellant was subject to monitoring and reporting obligations; the appellant was liable to coercive scrutiny; and the appellant was part of an integrated national scheme adopted at a federal level to promote the attainment of objectives in all parts of the Commonwealth, within plans approved by the Department and inferentially endorsed by the federal Minister accountable to the Federal Parliament for the policies and funds thereby involved. In these circumstances, I can understand the reasons that led the three decision-makers below to find against the appellant's claim for exemption under 119 [1950] VLR 382 at 388. Kirby s 10(1)(bb) of the Act. Specifically, I could understand the Commissioner deciding that, if the federal Minister wished to provide federal funds through a private corporation for the implementation of formulated federal health policies, with employees receiving wages, the wages of such employees should be treated like those of any other employer and should not attract the special exemption limited to a "charitable body". It was this characterisation of the "purposes" and "activities" of the appellant that resulted in the conclusions unfavourable to exemption that have occasioned this appeal. Significance of the "body": In performing the task of characterisation enlivened by the Commissioner's ground of objection to the appellant, it is important to remember that the statutory question presented by s 10(1)(bb) of the Act is whether the organisation claiming exemption is a "charitable body". It is the character of the "body" that is important for deciding whether the Act's description is satisfied. Obviously, the appellant is not, as such, a governmental body. It is not part of government, established by statute to effect governmental purposes as such. In any case, even bodies so established have sometimes been held capable of being treated as "charitable". For example, in British Museum v White120, a devise to the British Museum was held to be charitable although it was argued that the Museum was not a charitable institution because it was founded by the munificence of the State. Sir John Leach, VC said it was "a gift to an institution, established by the Legislature, for the collection and preservation of objects of science and of art, partly supplied at the public expense, and partly from individual liberality, and intended for the public improvement". This, and several other cases in England121 and in Australia122 follow this line of reasoning. The type of distinction identified in the early cases may be seen in most recent times, and in Australia, by contrasting Metropolitan Fire Brigades Board v Commissioner of Taxation123 and Alice Springs Town Council v In the former case, the question was whether the Fire Brigade Board, established under Queensland legislation, was a "public benevolent institution". 120 (1826) 2 Sim & St 594 [57 ER 473]. 121 See, eg, Attorney-General v Heelis (1824) 2 Sim & St 67 [57 ER 270]. 122 Robison v Stuart (1891) 12 LR (NSW) Eq 47 at 50. 123 (1990) 27 FCR 279. 124 (1997) 115 NTR 25. Kirby The Federal Court of Australia held that it was not. That Court characterised the Fire Brigades Board as a governmental body which, in the language of In re Cain, was simply exercising the functions of government. Whilst the expression "public benevolent institution" is not the same as "charitable body", there is sufficient similarity to make the approach in that case noteworthy. However, this decision was distinguished by the Court of Appeal of the Northern Territory in the Alice Springs Council case. An Aboriginal corporation claimed (and the Town Council contested) that it was entitled to exemption from rates in respect of "land used or occupied for the purposes of … charity". The corporation had objects and purposes which extended to the provision of help to needy Aboriginal people as well as to its members. The corporation used premises on its lands for the accommodation of generally impoverished visitors who wished to stay in Alice Springs for short intervals. Mildren J, who gave the principal reasons of the Court of Appeal, rejected the argument that the corporation should, like the Fire Brigades Board in the earlier case, be characterised as an agency of government. He said125: "In this case no ministerial control could be exercised over any of the associations, either by virtue of the Acts under which they are constituted, or by the provisions of the constitutions. The mere fact that the associations are directly government funded does not deprive them of the character of being charities. I do not consider that the argument that the associations are merely carrying out the functions of government can be sustained." I agree with this approach. Comparative law: When considering the question whether a body is "charitable" for legal purposes, courts of other common law countries have not treated as decisive the fact that it receives funds, even substantial funds, from government or in some ways contributes to effectuating the policy of government under the encouragement of subventions. Tax concessions under federal law in the United States of America do not contain express exclusions from "charitable" status for recipients of government funds. Typically, the disqualifications provided by statute relate to the provision of private benefits to members; participation in propaganda activities; attempts to influence or alter legislation; or participation in political campaigns126. In a number of cases, the presence of governmental representation on a chartered 125 (1997) 115 NTR 25 at 41. 126 See Internal Revenue Code (2000) USC 26, §501(c)(3). Kirby private company established by government and supported by government funds has not prevented the corporation from being classified as a "charitable" organisation for tax purposes127. In the United Kingdom, an exempt charity for income tax purposes is "any body of persons or trust established for charitable purposes only"128. In the Charities Act 1993 (UK) a "charity" is defined as "any institution, corporate or not, which is established for charitable purposes and is subject to the control of the High Court in the exercise of the Court's jurisdiction with respect of charities"129. The phrase "charitable purposes" is, in turn, defined to mean "purposes which are exclusively charitable according to the law of England and Wales"130. In this way the definition dating back to the Statute of Elizabeth, as explained in Pemsel, continues to apply. However, the case law does not reveal a prohibition, as such, against governmental association or funding, of the kind adopted by the Court of Appeal of Victoria in this case. In 2001, the Charity Commissioners for England and Wales formulated guidelines that addressed the potential loss of a "charitable" character occasioned by too close an association with, or dependence upon, government131. These guidelines make it clear that an institution is not prevented from being an institution established for charitable purposes simply because it has been "set up by government". Nor is it a bar to such status that the body is created with a view to taking on a governmental function, so long as the body's purposes are exclusively "charitable" in the general sense. Moreover, under the guidelines, the motive of the promoter is irrelevant in determining whether the body is a "charity". It is critical that the body must be independent, such that it exists to carry out its own charitable purposes and not simply for the purpose of implementing policies or directions of the government. In New Zealand, under the Charities Act 2005 (NZ), registration for the purpose of concessions under the Income Tax Act 2004 (NZ) and the Gift Duties 127 Morales v New Jersey Academy of Aquatic Sciences 694 A 2d 600 (1997); Nazzaro v United States 304 F Supp 2d 605 (2004). 128 Income and Corporation Taxes Act 1988 (UK), s 506(1). 131 England and Wales, Charity Commissioners, The Independence of Charities from the State, Review of the Register publication RR7, (2001). Kirby Act 1968 (NZ) depends on demonstration of a "charitable purpose". This is defined to include criteria that, in part, repeat those adopted in Pemsel132. In Canada the Income Tax Act 1985 (Can) provides for the registration of charities. To be registered for this purpose, the charities must satisfy stated criteria133. These include the requirement that more than 50% of the controlling officers of the body be independent of private or public "foundations" and that no controlling group contribute more than 50% of the capital. However, the latter restriction does not apply to capital contributed by government. No exclusion for governmental association or funding is expressed in the Canadian legislation; nor is it evident in the Canadian case law. Obviously, many of these instances depend on their own special legislation. They suggest that generally the establishment, control or funding of a body by government may be relevant to the characterisation of that body's purposes and objects as "charitable" or otherwise. However, if a body is established separately from government, with substantial independence in its organisation, is not necessarily disqualified from characterisation as "charitable" merely because it receives substantial government funds. funding Government for public benefit through private sector organisations has expanded greatly in recent years in many countries, including in Australia. This development has occurred as a means of securing perceived advantages, including decentralisation; and securing the efficiency that small, local, private sector bodies can achieve. From the standpoint of legal policy, it would be undesirable for the law to needlessly expand the disqualification of such bodies from the advantages that they enjoy as "charities" under revenue law where their purposes otherwise qualify. If, because of a particular governmental association, and for inter-governmental, political or other reasons, governments wish to remove exemptions from bodies that otherwise meet the requirements of being "charitable" within the general law as it has been expounded by the courts, they can easily do so by securing the amendment of the legislation. In the matter of exemptions for charities and in defining exempted charities, Australian legislatures have a record of enacting very particular provisions when they deem it to be necessary. There is no need for the courts to descend to such particularity. 132 Charities Act 2005 (NZ), s 5(1). 133 Income Tax Act RSC 1985 (Can), c 1, 5th supp, s 149(1)(f). Kirby The appellant is a "charitable body" When attention is directed to the characterisation of the "body" which is constituted by the appellant, and the question is asked whether or not it is "charitable", within s 10(1)(bb) of the Act, the better answer is therefore that it is "charitable". True, the appellant receives most of its funds from government, but so too did the Aboriginal corporation in the Alice Springs Council case, and so did many other bodies held by this Court to be charitable. If attention is focused on the "purposes" of the body, rather than its funding as such, those purposes emerge as "charitable" within the fourth category in Pemsel. They are performed for the public benefit in the sense there described. Care was taken in constituting the appellant to preserve its ultimate independence from government if ever the position should arise that government wished the appellant to perform activities inimical to its members, their patients or services conceived and expressed through the board. The appellant's board contained no representative of the Department or the government. True, the financial and other arrangements imposed by the association with the Department were rigorous. But that is how it must be in the expenditure of funds for which the Department, and its Minister, are accountable, through the Parliament, to the electors from whom taxes are raised. At all times, as a "body", the appellant was a private corporation, constituted independently of government. It was only tied to the governmental purposes so long as those purposes coincided with benefits to the public, the patients and the members, as perceived and accepted by the constituent body of the appellant. The appellant was fulfilling its own objectives and purposes, which were conceded to be beneficial to the public. The appellant was not simply carrying out the objects of government. Still less was it part of the "government of the country"134. It follows that the suggested ground of disqualification from entitlement to the exemption claimed by the appellant was not established. The Court of Appeal erred in law in deciding otherwise. Wider questions concerning the ambit of the suggested disqualification for governmental association need not be answered in this appeal. Orders I therefore agree in the orders proposed by the other members of the Court. 134 In re Cain [1950] VLR 382 at 387 per Dean J. Callinan The question The question in this appeal is whether the appellant, although its objects and activities are clearly charitable, is obliged to pay pay-roll tax under the Pay- roll Tax Act 1971 (Vic) ("the Act"). By s 10(1)(bb) of the Act, a "charitable body" is exempted from that obligation if its employees are exclusively engaged in work of a charitable nature on behalf of their employer. Whilst it is not contended by the respondent that the appellant's objects and activities are not charitable, it argues, as the Victorian Civil and Administrative Tribunal ("the Tribunal"), a judge of the Supreme Court of Victoria (Nettle J) and the Court of Appeal of the Supreme Court of Victoria (Chernov JA and Osborn AJA, Byrne AJA dissenting) have all found, that it should be denied the exemption, because it acts so much under the control or influence of government that it must be regarded as acting in furtherance of objectives of government, rather than in the independent pursuit of its own objects. The facts The appellant is a company limited by guarantee. Its objects, legal capacity and powers are set out in pars 3 and 4 of its Constitution: Object The object of the company is to improve patient care and health, primarily in the Central Bayside area of Melbourne, by: improving communication between general practitioners and other areas of the health care system; (b) more effectively integrating general practice with other elements of the health care system; enabling general practitioners planning; to contribute to health providing better access to available and appropriate general practitioner services for patients, and reducing inappropriate duplication of services; (e) meeting the special (and localised) health needs of groups (such as Aboriginal and Torres Strait Islanders and those with non-English speaking backgrounds) and people with chronic conditions, particularly where these needs are not adequately addressed by the current health care system; Callinan advancing general practice, and the health and well-being of general practitioners; enhancing educational and professional development opportunities for general practitioners and undergraduates; increasing general practitioner focus on illness prevention and health promotion; and improving effectiveness and efficiency of health services at the local level. Legal Capacity and Powers The company has: the legal capacity and powers of an individual, and all the powers of an incorporated body, as provided by section 124 of the Corporations Act. The company may only exercise its powers for its object." Its status as a non-profit company is established by par 5 of the objects: Not For Profit The company may only use its income, assets and profit for its object. The company must not distribute any of its profit, income or assets directly or indirectly to its members. 5.3 Clause 5.2 does not prevent the company from paying its members (including its directors): reimbursement for expenses properly incurred by them, and for goods supplied and services provided by them, if this is done in good faith on terms no more favourable than if the member were not a member." The liability of each member of the appellant is limited to $10. Any medical practitioner in the relevant area may be a member (cl 7.1). There is also provision for associate membership (cl 7.2), but not for any governmental membership, or representation on the board of directors (cl 42.1). The appellant has made a "mission statement" and has also stated its "goals": Callinan "Mission Statement To establish and maintain an association of General Practitioners within the Bayside area to promote optimal, continuing patient care by General Practitioners for all residents at a local level. Goals To promote and support the role of GPs as the medical care manager of individuals in the community. To provide services to GPs, including: Continuing Medical Education and Quality Assurance Activities; (b) Enhancement of practice management support systems. To improve the integration of GP services into a range of primary, secondary and tertiary and other health care services in the region. To maintain and extend GP involvement in the full range of health care provision with particular emphasis on preventative strategies and health promotion. To establish a significant GP role in decision making in health care planning. Improve IT/IM utilisation rates by GPs and GP practices and to increase the use of IT by current users." The appellant entered into a funding agreement with the Department of Health and Ageing ("the Department") on behalf of the Commonwealth. The agreement recites: "A. The Department operates a Program, being the Divisions of General Practice Program, which provides funding under block grant arrangements to Divisions of General Practice to enable general practitioners to conduct activities to improve integration with other elements of the health system and to address identified local health needs. The Department accepts that the Division is an eligible body for the purposes of the Program, and the Department may give financial assistance to enable the Division to undertake the approved Programs of Activity as set out in the Division's extended Callinan Strategic Plan for the period 1 July 1999 - 30 June 2003 and Business Plan for the period 1 July 2000 - 30 June 2003. The Department is required by law to ensure the accountability of Program Funds and accordingly, the Division is required to be accountable for all Department Funds received. The Department wishes to pay Funds under the Program to the Division for the purposes, and subject to the terms and conditions, set out in this Agreement." (Emphasis in original) The agreement requires the appellant to prepare and follow a "business plan" and to have its receipts and expenditures audited. Clause 2 of the agreement is as follows: Conduct of Programs of Activity The Division shall conduct the Programs of Activity to a standard acceptable the the Department and requirements as set out in Schedule 1. in accordance with The Division shall perform its obligations under this Agreement at the times and in the manner specified. The Division will comply with the requirements regarding identified Outcomes for Outcomes-Based Funding as specified in Schedule 2. The Division will notify the Department in writing of any alteration to the Strategic Plan. If for any reason the Division is unable to commence or continue work on the Programs of Activity or forms the opinion that progress will be significantly delayed, the Division shall immediately notify the Department in writing and consult with the Department to deal with the matter. The Division, as and when required by the Department, shall cooperate with, participate in, or undertake evaluations of the Division's activities including the Annual Division's Survey, Minimum Data Set and Workforce Data. The evaluations will be in a format specified by the Department. If the Division is a corporation, the Division warrants that its Memorandum and Articles of Association are not, and shall not be, inconsistent with the Agreement." (Emphasis in original) Callinan Clause 4 is relevant: Funding Use and Accounts The Funding shall be expended by the Division only for the purposes of performing the Programs of Activity and in accordance with the terms and conditions set out in this Agreement. In relation to Clause 4.1, the Division shall not merely disperse Funds to General Practitioners but shall ensure that any payments made for General Practitioners are for activities performed on specified Programs of Activity being undertaken by the Division under the terms of this Agreement. 4.3 The Division must immediately deposit all Funds received into an account controlled solely by the Division with a financial institution such as a bank, building society or credit union The Division must notify the operating Department of the identifying details of that account. The Division must identify separately in its financial records the the receipt and expenditure of Funds received under Agreement for each of the agreed Programs of Activity. in Australia. The Division shall cause to be kept proper accounts and records of its transactions and affairs in relation to use of the Funding, in accordance with accounting principles generally applied commercial practice and as required by law, and shall do all things necessary to ensure that all payments out of its moneys are correctly made and properly authorised and adequate control is maintained over the incurring of liabilities. The Funding shall not be used as security for the purposes of obtaining commercial into hire purchase arrangements nor for the purpose of meeting existing loan obligations. loans or entering Interest earned by the Division on the Funding shall be used and dealt with by the Division as if the interest earned were part of the Funding." (Emphasis in original) Clause 15 should be set out: "15 Compliance with Commonwealth Policies 15.1 The Division shall, when using the Commonwealth's premises or facilities, comply with all reasonable directions and Departmental procedures relating to occupational health and safety and security Callinan in effect at those premises or in regard to those facilities, as notified by the Commonwealth or as might reasonably be inferred from the use to which the premises or facilities are being put. 15.2 The Division shall comply with its obligations, if any, under the Affirmative Action (Equal Employment Opportunity for Women) Act 1986 and shall not enter into a subcontract under this Agreement with a subcontractor named by the Director of Affirmative Action as an employer currently not complying with that Act." Clause 24 is also of relevance: "24 Termination and Reduction 24.1 The Department may, at any time by written notice, terminate this Agreement or reduce the scope of the Programs of Activity. If this Agreement is so terminated or reduced in scope, the Department shall, subject to Clauses 24.3 and 24.4, be liable only for: payments under the payment provisions of this Agreement that were due for the conduct of the Programs of Activity before the effective date of termination or reduction; and any reasonable costs incurred by the Division and directly attributable to the termination or reduction. 24.2 Upon receipt of a notice of termination or reduction the Division shall: stop work as specified in the notice; take all available steps to minimise loss resulting from that termination or reduction and to protect Commonwealth Material and Agreement Material; in the case of reduction in the scope of the Programs of Activity, continue work on any part of the Programs of Activity not affected by the notice; and immediately repay to the Department so much of the Funds unexpended or not acquitted to the satisfaction of the Department as relate to any part of the Programs of Activity affected by the notice. In the event of reduction in the scope of the Programs of Activity the Department's liability to pay any of the Funds or provide assistance under Clause 3 shall, in the absence of agreement to the Callinan contrary, abate proportionately to the reduction in the Programs of Activity. 24.4 The Commonwealth shall not be liable to pay compensation in respect of a termination or reduction under this Clause 24." The area in which the appellant operates is part of suburban Melbourne. "Divisions" of the kind of which the appellant is one were created, if not as a result of a government initiative, certainly with at least the encouragement and support of government from as early as 1992. It seems likely that they would not have been brought into existence, or would not function as they do, were it not for that encouragement and support, including, significantly, financial support for their programmes. Among the actual activities undertaken by the appellant are the expansion of access to immunisation, the provision of continuing medical education to general practitioners, the improvement of medical software systems, the enhancement of co-operation with pharmacists, the development of a "falls prevention programme", and the improvement of access by medical practitioners to timely and objective information about therapeutics. In the relevant tax year (1 July 2001 to 30 June 2002) the total receipts of the appellant were $1,048,979. The "sales revenues" were $1,087,813 (less $45,132 "unearned income on projects"). The source of $1,006,997 of those funds (about 93 per cent of the total receipts) was by way of grant from the Commonwealth government. About 43 per cent of the appellant's total income (less than half of the amount received from grants) was received from the Commonwealth under "outcomes based funding" ("OBF"). The other grants were described as being predominantly "project-based". A programme of funding from the Commonwealth to divisions of general practice under OBF agreements started in 1999. The first triennial OBF agreement was extended to 30 June 2003. It is not disputed that the appellant is bound to conduct activities intended to achieve the identified outcomes set out in its strategic plan and business plan (as approved by the Department) and incorporated in the agreement between it and the Department. In turn, these outcomes must be in keeping with the current The block grant from the aims of the division of general practice. Commonwealth, that is, 43 per cent of the appellant's income did not specify actual projects or actual project outcomes. The majority of the appellant's grant funding related to specific projects. Some of the projects were devised by the appellant. In some cases, the appellant would actively pursue funding for a particular project which it had decided was important to the community. In other cases, expressions of interest might be invited or tenders called. The appellant would then propose a project in response to the call for expressions of interest, or Callinan accept the tender. Grants for specific projects might be augmented from a variety of sources including "health promotion agencies" of which the Pharmacy Guild is one. Case history On 24 September 2001, the appellant wrote to the Minister for Regional Development requesting that it be considered for exemption for pay-roll tax purposes. On 14 December 2001, the respondent (to whom the request had been forwarded) ruled that the appellant was not a charitable body for the purposes of s 10(1)(bb) of the Act. On 29 January 2002, the appellant objected to the decision. On 16 July 2002, the respondent disallowed the objection. The appellant requested the respondent to refer the matter to the Tribunal. On 22 November 2002, the Tribunal affirmed that the appellant was not a charitable body for the purposes of s 10(1)(bb) of the Act. The Supreme Court of Victoria The appellant sought leave to appeal against the Tribunal's decision. That application came on for hearing by the Supreme Court (Nettle J). On 15 August 2003, his Honour made orders that leave to appeal be granted and that the appeal be dismissed with costs. Nettle J did not disturb a finding of the Tribunal that the appellant was a body that existed for purposes "beneficial to the community". His Honour held that the appellant was not a department or other instrumentality of government; it was a matter for it whether it would seek funds from government, and accordingly subject itself to the conditions of any grant. The Commonwealth's control over the affairs of the appellant was no more than the power of the purse. But his Honour nonetheless concluded that the appellant was not an exempt body135: "Having regard to the constitution, activities, history and control of the Division, and in particular, to the extent to which the Division's activities of providing services to its members are funded and thereby controlled by the Commonwealth, I am not persuaded that the Division is sufficiently analogous to any recognised charity or is otherwise to be regarded as within the equity of the Statute." 135 Central Bayside Division of General Practice Ltd v Commissioner of State Revenue (2003) 53 ATR 473 at 486 [33]; [2003] ATC 4835 at 4845. Callinan The Court of Appeal The appellant then sought and obtained leave to appeal from the decision of Nettle J. On 1 July 2005, the Court of Appeal of the Supreme Court of Victoria, by majority (Chernov JA and Osborn AJA, Byrne AJA dissenting) dismissed the appellant's appeal with costs. In the Court of Appeal, Chernov JA said136: "... the analysis involved in determining whether such a body is performing the function of government must be the same (or substantially so) irrespective of whether it claims to be a public benevolent institution or a charity. In either case, the process involves the characterisation of the body's activities to see, not only whether they are ordinarily performed by government, but more importantly to ascertain if they are so controlled by it that the body can be properly regarded as carrying out the function or work of government." The characterisation that his Honour preferred was as a body that performed the work or function of government. The reasoning of Osborn AJA was to a similar effect, that the appellant was "so much a creature or agent of government that it should be denied the status of a charity"137. In dissent and, as will appear, correctly in my opinion, Byrne AJA said this138: "I return once again to the facts of this case. It is clear that Central Bayside is not the mere creature or agent of the Commonwealth Government. No government control is exercised over its management. It plays an active role in itself selecting the particular projects which it undertakes for the benefit of its community. These features and the fact that its management is undertaken by its elected members without stipend from the Commonwealth shows that its relationship is more that of an ally than that of an agent. In this respect it is like any organisation whose principal object and activities are charitable. It is a charitable body." 136 Central Bayside Division of General Practice Ltd v Commissioner of State Revenue (2005) 60 ATR 151 at 154 [6]; [2005] ATC 4586 at 4589. 137 Central Bayside Division of General Practice Ltd v Commissioner of State Revenue (2005) 60 ATR 151 at 171 [60]; [2005] ATC 4586 at 4602. 138 Central Bayside Division of General Practice Ltd v Commissioner of State Revenue (2005) 60 ATR 151 at 170 [57]; [2005] ATC 4586 at 4601. Callinan The appeal to this Court Before proceeding, it is necessary to set out the relevant statutory provision, s 10(1)(bb) of the Act: "10 Exemption from pay-roll tax The wages liable to pay-roll tax under this Act do not include wages paid or payable – (bb) by a charitable body (other than a school or educational institution or an instrumentality of the State) to a person during a period in respect of which the body satisfies the Commissioner that the person is engaged exclusively in work of the body of a charitable nature ..." It is not in contention that the reference in the section to a "body of a charitable nature" is a reference to a body that is charitable in the same sense as "charitable" has been traditionally understood at law and in equity. That understanding is that the relevant purposes of the board or trustees in question must be purposes beneficial to the community within, among other classes, relevantly, the fourth class of charity referred to in Pemsel's Case139 in which Lord Macnaghten, whose words on the topic have not, so far as I am aware, been doubted, said this140: "That according to the law of England a technical meaning is attached to the word 'charity,' and to the word 'charitable' in such expressions as 'charitable uses,' 'charitable trusts,' or 'charitable purposes,' cannot, I think, be denied. The Court of Chancery has always regarded with peculiar favour those trusts of a public nature which, according to the doctrine of the Court derived from the piety of early times, are considered to be charitable. Charitable uses or trusts form a distinct head of equity. Their distinctive position is made the more conspicuous by the circumstance that owing to their nature they are not obnoxious to the rule against perpetuities, while a gift in perpetuity not being a charity is void. Whatever may have been the foundation of the jurisdiction of the Court over this class of trusts, and whatever may have been the origin of the title by which these trusts are still known, no one I think who takes the trouble to investigate the question can doubt that the title was recognised and the 139 Commissioners for Special Purposes of the Income Tax v Pemsel [1891] AC 531. 140 [1891] AC 531 at 580-583. Callinan jurisdiction established before the [Statute of Elizabeth][141] and quite independently of that Act. The object of that statute was merely to provide new machinery for the reformation of abuses in regard to charities. But by a singular construction it was held to authorize certain gifts to charity which otherwise would have been void. And it contained in the preamble a list of charities so varied and comprehensive that it became the practice of the Court to refer to it as a sort of index or chart. At the same time it has never been forgotten that the 'objects there enumerated,' as Lord Chancellor Cranworth observes142, 'are not to be taken as the only objects of charity but are given as instances.' Courts of Law, of course, had nothing to do with the administration of trusts. Originally, therefore, they were not concerned with charities at all. But after the passing of the Act 9 Geo 2, commonly known as the Statute of Mortmain, which avoided in certain cases gifts to 'uses called charitable uses,' alienations and dispositions to charitable uses sometimes came under the cognizance of Courts of Law, and those Courts, as they were bound to do, construed the words 'charitable uses' in the sense recognised in the Court of Chancery, and in the Statute of Elizabeth, as their proper meaning. I have dwelt for a moment on this point, because it seems to me that there is a disposition to treat the technical meaning of the term 'charity' rather as the idiom of a particular Court than as the language of the law of England. And yet of all words in the English language bearing a popular as well as a legal signification I am not sure that there is one which more unmistakeably has a technical meaning in the strictest sense of the term, that is a meaning clear and distinct, peculiar to the law as understood and administered in this country, and not depending upon or coterminous with the popular or vulgar use of the word. ... No doubt the popular meaning of the words 'charity' and 'charitable' does not coincide with their legal meaning; and no doubt it is easy enough to collect from the books a few decisions which seem to push the doctrine of the Court to the extreme, and to present a contrast between the two meanings in an aspect almost ludicrous. ... 'Charity' in its legal sense comprises four principal divisions: trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community, not falling under any of the preceding heads. The trusts last referred to are not the less charitable in the eye of the law, because incidentally they benefit the rich as well as the poor, as indeed, every charity that deserves the name must do either directly or indirectly." 141 Charitable Uses Act 1601 (43 Eliz I c 4) ("the Statute of Elizabeth"). 142 The University of London v Yarrow (1857) 1 D & J 72 at 79 [44 ER 649 at 652]. Callinan The Preamble to the Statute of Elizabeth gives as some examples, "repair of bridges, ports, havens, causeways ... and highways" and it has accordingly long been held that the fourth category includes trusts for the provision of roads143 and bridges144. I mention these for this reason. In modern times, and indeed for a long time now, a road or a bridge, certainly in Australia, could not be constructed without at least the approval, if not the active participation in the provision of it by either a State or Federal government or a local authority established by the latter. As I pointed out in Western Australian Planning Commission v Temwood Holdings Pty Ltd145: "... [the creation of new roads] cannot be done unilaterally by the [provider]: the Crown or the local authority must be willing for this to occur and to accept the road as a public road, and to permit it to intersect, or make a junction with an existing public road." It should also be noted that activities carried out in other countries by private enterprise have been more readily performed by governments and statutory authorities in this country. It might, as a practical matter, be necessary for a donor therefore, wishing to make a charitable gift within the fourth category, to place funds or property in the hands of government or a statutory authority with a charitable purpose impressed on it146. Exactly such an occurrence led to the litigation in Brisbane City Council v Attorney-General for Queensland147 in which the Privy Council advised that a conveyance of land for "showground, park and recreation purposes" to the Brisbane City Council, a creature owing its existence entirely to, and governed by, State legislation, upon a condition that a named show society be given exclusive use of the land for two weeks each year without charge, gave rise to a 143 See, for example, Eltham Parish v Warreyn (1734) Duke 67. 144 See, for example, Forbes v Forbes (1854) 18 Beav 552 [52 ER 216], which involved a bequest of £2000 to the testator's executors, on trust to build a bridge in Scotland over the river Don. 145 (2004) 221 CLR 30 at 84 [147]. 146 See also: Luxton, The Law of Charities (2001) at 144 [4.89] where, after referring to the Preamble's mention of bridges etc, it is said: "By analogy, purposes within the spirit of the Preamble include public works and amenities, and therefore comprise many services and provisions that are today undertaken by public (or privatized) authorities." Callinan charitable trust within the fourth category of charitable purposes defined in Pemsel's Case. In giving the advice of the Board, Lord Wilberforce relevantly said148: "It is common ground that the trust is only a valid charitable trust if it falls within the fourth class of charitable purposes defined in [Pemsel's Case]149 as a trust beneficial to the community within the spirit and intendment of the preamble to 43 Eliz 1, c 4. The lack of precision of the latter's words has to be made good by reference to decided authorities which, as has been said, are legion and not easy to reconcile150. It has been said in the Court of Appeal in England that, if a purpose is shown to be beneficial to the community or of general public utility, it is prima facie charitable, an approach which might help to simplify the law, but this doctrine, even assuming it to be established in the law of England, does not yet seem to have been received in Australia151. Their Lordships will therefore follow the route of precedent and analogy in the present appeal." In 1948152 and on two relatively recent occasions this Court too has effectively held that a local authority, notwithstanding its political character and subjection to State governmental control may, indeed may be obliged to, accept and hold property for a purpose of a public charitable kind. This appears from Bathurst City Council v PWC Properties Pty Ltd in which the Court said this153: "The vesting of land in a town centre in a local authority for the purpose of a publicly accessible free car park has some elements at least 148 [1979] AC 411 at 422. 150 Williams' Trustees v Inland Revenue Commissioners [1947] AC 447 at 455. It has been said in the Court of Appeal in England in Incorporated Council of Law Reporting for England and Wales v Attorney-General [1972] 1 Ch 73 at 88 per Russell LJ and endorsed by the other members of the Court. 151 See Incorporated Council of Law Reporting (Q) v Federal Commissioner of Taxation (1971) 125 CLR 659 at 666-667 per Barwick CJ. 152 Monds v Stackhouse (1948) 77 CLR 232, particularly at 240-241, 246-247 and 250-251. See also the discussion about charitable trusts for the provision of public works in Warburton, Tudor on Charities, 9th ed (2003) at 100-101 [2-074]. 153 (1998) 195 CLR 566 at 582-583 [35]-[37] per Gaudron, McHugh, Gummow, Callinan of a charitable trust for public purposes. The question, as formulated by Barwick CJ in Incorporated Council of Law Reporting (Q) v Federal Commissioner of Taxation154, is whether a purpose beneficial to the community is 'within the equity of the preamble to the Statute of Elizabeth'. The Preamble refers to 'Bridges, Ports, Havens, Causeways ... and Highways'. Freely accessible car parks on one view might be regarded as 'Havens' from the 'Highways' or as so necessarily incidental to the latter in modern times as to be almost indistinguishable in public purpose and utility from them: there is an analogy between a highway and a car park affording a haven from, and a secure place of resort near and accessible to, a highway155. An example of the recognition of a charitable trust of this nature may be provided by the judgment of Hart J in Mareen Development Pty Ltd v Brisbane City Council156. Clause 12 of an Ordinance of the City of Brisbane provided that an applicant for approval of a subdivision was to transfer to the Council three link strips at the end or on the side of existing dedicated roadways. In the Full Court, Hart J referred to the acquisition made by the Council free of cost and, speaking of the strip in question, concluded157: 'It could not have been the intention of the Ordinance that the Council was to make a profit from them from future subdividers. In these circumstances I think it holds the strip in trust for Town Plan purposes.' It is true that those, such as PWC in the present case, conducting commercial activities may derive a benefit somewhat greater than the general public from a proximate car park. However, the fact that some 154 (1971) 125 CLR 659 at 667. 155 See the discussion by Lords Reid and Wilberforce of the legitimacy in finding an analogy between an object already held to be charitable and a new object in Scottish Burial Reform and Cremation Society v Glasgow Corporation [1968] AC 138 at 147 and 156 respectively, and the discussion by McTiernan, Menzies and Mason JJ in Royal National Agricultural and Industrial Association v Chester (1974) 48 ALJR 304 at 305; 3 ALR 486 at 488-489. 156 [1972] Qd R 203; see the judgment on refusal of special leave to appeal (1972) 46 ALJR 377. 157 [1972] Qd R 203 at 216. Callinan non-charitable purposes may co-incidentally be served does not of itself destroy the legal character of a charitable trust158." What I have referred to would at least suggest that in some circumstances it may be that a gift, or a payment, if not to a government, but to some other polity or a creature of it, carrying out entirely statutorily mandated objects, will not fail to be charitable on that account, a matter not for decision in this case. But it is clear that the objects of government and its creatures are by no means necessarily antithetical to charitable objects and activities. The reasoning in and outcome of the cases in this Court to which I have so far referred, and in Incorporated Council of Law Reporting (Q) v Federal Commissioner of Taxation159 show that Australian jurisprudence with respect to the expression "charitable purpose" manifests at least as ample an approach as English jurisprudence. There Barwick CJ said160: "Not every purpose beneficial to the community is a charitable purpose but only those which are within the equity of the preamble to the Statute of Elizabeth. The purpose must not merely be beneficial: it must also be charitable161. In this connexion however we are reminded by Lord Wrenbury in Chesterman v Federal Commissioner of Taxation162 that 'the word "charitable" larger and more the Elizabethan sense comprehensive than the other words in the context'." Later his Honour said this163: 158 See Monds v Stackhouse (1948) 77 CLR 232 at 240-241; Congregational Union of New South Wales v Thistlethwayte (1952) 87 CLR 375 at 441-443; In re Resch's Will Trusts [1969] 1 AC 514 at 541; Brisbane City Council v Attorney-General (Q) [1979] AC 411 at 424. 159 (1971) 125 CLR 659. 160 (1971) 125 CLR 659 at 667. 161 See Re Macduff; Macduff v Macduff [1896] 2 Ch 451; Attorney-General v National Provincial and Union Bank of England [1924] AC 262; Williams' Trustees v Inland Revenue Commissioners [1947] AC 447 and Re Strakosch, dec'd; Temperley v Attorney-General [1948] Ch 37. 162 [1926] AC 128 at 132; (1925) 37 CLR 317 at 320. 163 (1971) 125 CLR 659 at 669. Callinan "Yet it must be considered whether that benefit is charitable in the Elizabethan sense. Out of certain of the instances given in the preamble to the Act of 1601 a broad concept emerges of the kind of object of public utility which will satisfy the quality of charity. Any notion that that concept is of an eleemosynary nature is seen to be untenable by some of those very instances themselves, eg the repair of bridges, havens, causeways, seabanks and highways and the setting out of soldiers. Further, these instances seem to regard the provision of some of the indispensables of a settled community as charitable." It seems to me to be beyond question that health care, a term which compendiously covers all of the purposes and activities of the appellant, can only be regarded as an "indispensable of a settled community". The respondent's case The respondent nevertheless advances these propositions: a government department, (here the Commonwealth Department of Health and Ageing), is not a charitable body when it acts to implement government policy. When a body, such as the appellant here, acts so much under the control or influence of a government department that it can be seen to be acting to implement government policy, rather than in the independent performance of its own objects, then it too may not be regarded as a charitable body. The history of the divisional system and the control asserted over all divisions of general practice, including the appellant, by the Commonwealth, shows that the appellant was acting so much under the control and influence of government in discharging its obligations under its OBF agreement, and otherwise, during the tax year ending 30 June 2002, that it is an implementer of government policy rather than an independent body pursuing its own objects: accordingly it was not a charitable body entitled to exemption from pay-roll tax. I would reject the respondent's arguments. Section 10(1)(bb) says nothing about government, government control, or the implementation of government policies. It is not difficult to conceive, as I have foreshadowed, of many charitable bodies, the activities of which further government ends. The classic example is a body which does good works for the relief of poverty. A major aim of all well-intentioned governments is the elimination or reduction of poverty. In argument, the respondent accepted that to be so but submitted that the facts have shown more, that the Commonwealth controlled the activities of the appellant. The submission went so far as to contend that the appellant was the puppet of the Commonwealth. The argument continued that the appellant was not a charitable body because, by reason of the Commonwealth's "control", it did not bear the hallmark of all charities: subjection to control by the Supreme Court at the suit of the Attorney-General for the State of Victoria. Callinan I disagree. There is no real possibility of a conflict between the appellant, the Commonwealth and the Attorney-General, leading to an application to any court by the Attorney-General, either personally or in a relator action. This is so because the appellant's objects are all truly charitable. They are also objects which either further or even implement government policy, and none of the appellant properly advised, the Commonwealth or the Attorney-General for Victoria, would have any interest in anything other than the proper pursuit of those objects. Both the Commonwealth and the Attorney-General would also have exactly the same interest in the proper application of the funds, however derived, of and by the appellant, to the charitable objects for which the appellant was established. The Attorney-General would not in any event be precluded from applying to the court if concerned about any misapplication or, if the Attorney wished, to ensure the proper application, of the appellant's funds however derived. Three cases upon which the respondent sought to rely are readily distinguishable even if everything that was said and held in them should be accepted (something which is unnecessary to decide here but about which there may be some doubt in view of the passages from Bathurst City Council that I have cited). First, in each of Metropolitan Fire Brigades Board v Commissioner of Taxation164, Mines Rescue Board (NSW) v Commissioner of Taxation165 and Ambulance Service of New South Wales v Commissioner of Taxation166, the appellant sought to be classified as a "public benevolent institution" within the meaning of the Fringe Benefits Tax Assessment Act 1986 (Cth), not as a charitable body within the meaning of the general law. Secondly, unlike the appellant here, the relevant body in each was established by statute and owed its whole existence to that statute. In Metropolitan Fire Brigades Board, it was expressly held that the Board was an emanation of government167. In Mines Rescue Board, the Board was held to represent the State168, and in Ambulance Service, it was held that when proper regard was had to the constitution, funding and functions of the Service, it was sufficiently governmental in character as to fall outside the meaning of the statutory phrase "public benevolent institution"169. On no view does the appellant answer any of the descriptions applied to the 164 (1990) 27 FCR 279. 165 (2000) 101 FCR 91. 166 (2003) 130 FCR 477. 167 (1990) 27 FCR 279 at 280. 168 (2000) 101 FCR 91 at 101 [43]. 169 (2003) 130 FCR 477 at 493 [48]. Callinan appellants in those cases. Each was obliged by statute or regulation to expend money under the ultimate supervision of the Minister to whom it was answerable. Accordingly, in those cases it was not difficult to conclude that the government could be said to have effectively assumed responsibility for what the appellants there did. The appellant in this case was entirely voluntarily established. It is not, and has never been, part of a government department. It does not owe its existence to a statute. It is quite separate from government. It is a matter entirely for it whether it seeks government funds or subsidisation. The respondent sought to rely on a principle that clear words are required before an obligation on the part of the Crown, or a servant or agent of the Crown will be treated as a trust according to ordinary principles, even if the obligation could be described as a fiduciary obligation: absent the clearest of words, the obligation will be characterised as a government or political obligation. Kinloch v Secretary of State for India170, Registrar of the Accident Compensation Tribunal v Federal Commissioner of Taxation171 and Bathurst City Council172 were relied upon in an attempt to make good that proposition. The submission continued that, by analogy with the reasoning underlying the exclusion of trusts for political purposes from the category of charities, a court could not adjudge whether the implementation of a particular government policy or particular work of government is for the benefit of the community or a section thereof. Roman Catholic Archbishop of Melbourne v Lawlor173 and Royal North Shore Hospital of Sydney v Attorney-General (NSW)174 were cited in support of the argument. Both the analogy and the reliance are inapt. In Roman Catholic Archbishop of Melbourne, Dixon J was referring to truly political objects, that is to say, controversial subjects although they may have had, for example, a religious connexion, such as to secularise education. Activities of that kind cannot be charitable because "the Court has no means of judging whether a proposed change in the law will or will not be for the public benefit, and therefore cannot say that a gift to secure the change is a charitable gift"175. His 170 (1882) 7 App Cas 619. 171 (1993) 178 CLR 145. 172 (1998) 195 CLR 566 at 591. 173 (1934) 51 CLR 1 at 33 per Dixon J. 174 (1938) 60 CLR 396 at 426 per Dixon J. 175 (1934) 51 CLR 1 at 33. Callinan Honour's observations there, and in Royal North Shore Hospital, have nothing to say about a case in which, as here, the objects can be seen to be undeniably No occasion arises for any assessment of any coincident charitable. governmental or political policy. That the Commonwealth, by the Department, controls the appellant and its activities is a misconception. The respondent seeks to make much of cl 2.3 of the agreement between the appellant and the Commonwealth requiring the former to comply with requirements "regarding identified Outcomes for Outcomes-Based Funding as specified ...". Charitable bodies, within the course of their activities, no doubt enter into many contracts under which obligations are imposed upon them, or they assume them. The fact that those obligations are, by contract, enforceable against them, by no means has the consequence that in respect of those particular obligations, they are under the control of another contracting party or parties. It is a matter for the charitable body in question, as here, to decide whether it wishes to enter into a particular contract. I would therefore reject the respondent's contention that the primary judge and the majority of the Court of Appeal were correct in concluding that, under the OBF agreement, or otherwise, the appellant acted to further the purposes of government "rather than to implement its own [charitable] purposes". The fact that the purposes of government are coincident with the undoubtedly charitable purposes of the appellant does not mean that the appellant cannot qualify for exemption under the Act. The appellant does not lose the status to which it may be entitled because it does not have, or seek to implement, any purposes different from those of the government in relation to health care. If the respondent's contention and the holdings in the courts below were correct, the result would be that whenever the government had a purpose, which if it were pursued by any non-government body would be charitable, and it funded some other body which happened to have the same purposes, and no others, that other body could never be regarded as a charitable body. As I have already said, many of governments' policies, particularly in modern times, are directed to what would undoubtedly be charitable purposes if they were undertaken by non-government bodies. It follows that the appeal should be allowed with costs. I would join in the orders proposed in the joint judgment. Callinan

HIGH COURT OF AUSTRALIA Matter No P40/2007 APPELLANT AND IRELAND & ANOR RESPONDENTS Matter No P41/2007 AND APPELLANT REPUBLIC OF HUNGARY & ORS RESPONDENTS Matter No S410/2007 APPLICANT AND UNITED STATES OF AMERICA & ANOR RESPONDENTS Zentai v Republic of Hungary Williams v United States of America [2008] HCA 14 23 April 2008 P40/2007, P41/2007 & S410/2007 Matter No P40/2007 and Matter No P41/2007 ORDER Appeals dismissed with costs. Matter No S410/2007 Special leave to appeal granted. Appeal treated as instituted, heard instanter and dismissed with costs. On appeal from the Federal Court of Australia Representation Matter No P40/2007 S J Gageler SC for the appellant (instructed by Freehills) H C Burmester QC for the first respondent (instructed by Commonwealth Director of Public Prosecutions) Submitting appearance for the second respondent Matter No P41/2007 S J Gageler SC with P W Johnston and V M Priskich for the appellant (instructed by Fiocco's Lawyers) H C Burmester QC for the first respondent (instructed by Commonwealth Director of Public Prosecutions) Submitting appearance for the second and third respondents D M J Bennett QC, Solicitor-General of the Commonwealth with H C Burmester QC and G A Hill for the fourth respondent (instructed by Australian Government Solicitor) Matter No S410/2007 S J Gageler SC with R P L Lancaster for the applicant (instructed by Watson Solicitors) H C Burmester QC for the first respondent (instructed by Commonwealth Director of Public Prosecutions) Submitting appearance for the second respondent Interveners D M J Bennett QC, Solicitor-General of the Commonwealth with H C Burmester QC and G A Hill intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor) in P40/2007 and S410/2007 R J Meadows QC, Solicitor-General for the State of Western Australia with R M Mitchell intervening on behalf of the Attorney-General for the State of Western Australia (instructed by State Solicitor for Western Australia) M G Sexton SC, Solicitor-General for the State of New South Wales with N L Sharp intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor (NSW)) C J Kourakis QC, Solicitor-General for the State of South Australia with M J Wait and J P McIntyre intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor for South Australia) P M Tate SC, Solicitor-General for the State of Victoria with R J Orr intervening on behalf of the Attorney-General for the State of Victoria (instructed by Victorian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Zentai v Republic of Hungary Williams v United States of America Extradition – Function of State magistrates under s 19 of Extradition Act 1988 (Cth) ("Extradition Act") and application of s 4AAA of Crimes Act 1914 (Cth) ("Crimes Act") – Arrangements between Governor-General and State Governors under s 46 of Extradition Act – Whether power exercised by State magistrates under s 19(1) of Extradition Act conferred under Commonwealth law relating to criminal matters – Whether intention appears in Extradition Act not to apply rule set out in s 4AAA of Crimes Act that State magistrates need not accept power conferred by Commonwealth law – Whether State magistrates obliged to accept performance of functions under Extradition Act – Whether acceptance of power conferred by s 19(1) of Extradition Act may be inferred by course of conduct of State magistrates – Whether State legislation approved exercise by State magistrates of functions and powers under s 19 of Extradition Act. Constitutional law (Cth) – Relationship between Commonwealth and States – Whether Commonwealth may unilaterally impose functions on State magistrates – Whether on true construction Extradition Act imposes functions on State magistrates – Whether such functions involve imposition of legal duties on State magistrates – Application of s 4AAA of Crimes Act – Whether State legislation approved exercise by State magistrates of functions and powers under s 19 of Extradition Act – Whether consent of State executive government sufficient to authorise imposition of functions on State magistrates. Words and phrases – "duty or power", "extradition", "magistrates". Crimes Act 1914 (Cth), s 4AAA. Extradition Act 1988 (Cth), ss 19, 46. Magistrates Courts Act 2004 (WA), s 6. Local Courts Act 1982 (NSW), s 23. It commonly GLEESON CJ. Part II of the Extradition Act 1988 (Cth) ("the Extradition Act"), which provides legislative authority for the extradition of persons from Australia to extradition countries (a defined term that includes the first respondent in each of these matters), was enacted pursuant to the power conferred by s 51(xxix) of the Constitution (the external affairs power). Extradition of alleged or convicted offenders to and from Australia is a matter which closely affects Australia's involves considerations of reciprocity. foreign relations. Australia's foreign relations are conducted by the Commonwealth, but State judicial officers are involved in the administration of extradition law. Part II of the Extradition Act establishes the procedures to be followed where a request for extradition of a person is made to Australia by an extradition country. The ultimate decision to surrender, where made, is a discretionary decision by the Attorney-General of the Commonwealth (s 22). Prior to that, however, questions of eligibility for surrender arise. These are dealt with administratively by a judicial officer acting as persona designata, subject to the possibility of judicial review1. Section 19 relates to determinations of eligibility for surrender. The question raised by each of these matters concerns the constitutional validity of Section 19 provides, in sub-s (1), that, where an application is made to a magistrate for proceedings to be conducted in relation to a person, "the magistrate shall conduct proceedings to determine whether the person is eligible for surrender in relation to the extradition offence or extradition offences for which surrender of the person is sought by the extradition country." It is unnecessary for present purposes to go into the detail of what is involved in the concept of eligibility for surrender, or the nature of the matters to be decided in determining such eligibility. The term "magistrate" is defined, in s 5 of the Extradition Act, to include "a magistrate of a State … being a magistrate in respect of whom an arrangement is in force under section 46." Section 46 of the Extradition Act provides that the Governor-General may arrange with the Governor of a State for the performance, by all or any of the persons who from time to time hold office as magistrates of that State, of the functions of a magistrate under the Extradition Act. It may be noted in passing that the reference in s 5 to an "arrangement ... in force" under s 46 is a reference to a lawful arrangement. If, for some reason, a purported arrangement in relation to a certain magistrate, or group of magistrates, were invalid, then the judicial officer or officers concerned would not satisfy the definition of "magistrate" for the purposes of s 5. One such reason might be that a Governor of a State lacked the power to enter into the relevant arrangement because the arrangement was inconsistent with State legislation. In none of the 1 Vasiljkovic v The Commonwealth (2006) 227 CLR 614 at 622-627 [16]-[28]; [2006] HCA 40. present matters is there a challenge to the validity of an arrangement, or purported arrangement, under s 46. In each case it is assumed that the judicial officer making the relevant determination of eligibility satisfied the definition of "magistrate" in s 5, there being in force an arrangement between the Governor- General and the Governors of Western Australia and New South Wales respectively covering that judicial officer. That, in turn, appears to accept that, under State law, the Governors had power to enter into such arrangements. If it were otherwise, there would have been an issue as to whether, even if s 19 were valid, it was effective in its application to these cases. No such issue was raised. The first two matters, which come before this Court as appeals from the Full Court of the Federal Court (Moore, Tamberlin and Gyles JJ)2, arise out of unsuccessful attempts to obtain an order in the nature of prohibition directed to two Western Australian magistrates dealing, under s 19 of the Extradition Act, with the determination of the respective appellants' eligibility for surrender. The third matter is an application for special leave to appeal from the Full Court of the Federal Court (Branson, Tamberlin and Allsop JJ), which dismissed proceedings seeking to prohibit New South Wales magistrates from conducting s 19 proceedings in relation to the applicant3. The matters were argued together. There is a difference between the Western Australian legislation and the New South Wales legislation concerning the functions of magistrates. That difference affects only the third of three propositions which the appellants and the applicant must establish in order to succeed. The legislation Reference has been made already to ss 5, 19 and 46 of the Extradition Act, enacted in 1988. Also relevant is s 4AAA of the Crimes Act 1914 (Cth), enacted in 2001. That section sets out the rules that apply if, under a law of the Commonwealth relating to criminal matters, a function or power that is neither judicial nor incidental to a judicial function or power, is conferred on one or more of a class of persons including, relevantly, a State magistrate (s 4AAA(1)(b)). Section 4AAA(2) provides that the function or power is conferred on the person only in a personal capacity. Section 4AAA(3) provides that the person need not accept the function or power conferred. Section 4AAA applies to Commonwealth laws enacted before 2001, such as the Extradition Act (s 4AAA(6)). The Magistrates Court Act 2004 (WA) includes s 6, which provides: 2 Zentai v Republic of Hungary (2007) 157 FCR 585. 3 Williams v United States of America (2007) 161 FCR 220. "6 Magistrates, functions of (1) A magistrate has the functions imposed or conferred on a magistrate by laws that apply in Western Australia, including this Act and other written laws. (2) A magistrate has and may perform any function of a registrar. (3) With the Governor's approval, a magistrate – (a) may hold concurrently another public or judicial office or appointment, including an office or appointment made under the law of another place; and (b) may perform other public functions concurrently with those of a magistrate. (4) A magistrate must not be appointed to an office that does not include any judicial functions without his or her consent. The Governor may extend the operation of section 37 to the performance by a magistrate of other functions, or the functions of another office or appointment, approved under subsection (3)." The Local Courts Act 1982 (NSW) includes s 23, which provides: "23 Employment of Magistrates in other offices etc Except as provided by this section, a Magistrate shall devote the whole of the Magistrate's time to the duties of the Magistrate's office. (2) A person may, with the approval of the Governor (which approval the Governor is hereby authorised to grant), hold and exercise the functions of the office of Magistrate and another office or appointment. (3) A Magistrate may not, however, practise as an Australian legal practitioner for fee, gain or reward, and no approval under subsection (2) may be granted to permit it. Subsection (1) does not prevent a person from holding office as and exercising the functions of a Magistrate on a part-time basis, but such a person must not, while so holding office: accept or continue to hold or discharge the duties of or be employed in any paid office in connection with any commercial business, or engage in or undertake any such business, whether as principal or agent, or engage in or continue in the private practice of any profession, occupation or into any employment, whether remunerated or not, with any person so engaged. trade, or enter To the extent specified in the commission by which the Magistrate was appointed, subsections (1) and (3) do not apply to a Magistrate who has limited tenure." Historical context The above legislation was enacted in an historical context that is of importance in resolving certain questions that were raised in argument4. It will be necessary to return to those questions, but first the history should be noted. It was referred to by Tamberlin J in his reasons in the third matter5. Before 1966, Australia's extradition procedures were governed by the domestic law and international treaties of the United Kingdom. The United Kingdom legislation included the Fugitive Offenders Act 1881 (Imp), in relation to extradition to one of Her Majesty's dominions, and the Extradition Act 1870 (Imp), in relation to extradition to foreign States. Western Australian and New South Wales magistrates exercised functions under that legislation. In 1966, countries of the British Commonwealth adopted the "London scheme", under which each Commonwealth country was to enact domestic legislation to govern The Extradition (Commonwealth extradition within the Commonwealth. Countries) Act 1966 (Cth) gave effect to the scheme in Australia. Parliament also enacted the Extradition (Foreign States) Act 1966 (Cth) to establish a similar scheme in relation to non-Commonwealth countries. As Tamberlin J observed, an aspect of both schemes was the provision for arrangements to be concluded between the Governor-General of the Commonwealth and Governors of the States for the appointment of State magistrates to exercise certain functions. When the Extradition Act was enacted in 1988, s 46 reflected a system that had been operating under the previous Commonwealth legislation. As to the Western Australian legislation of 2004, magistrates in Western Australia have exercised functions conferred by the laws of other polities, being functions the same as or similar to those presently in question, under the following legislation: 4 Singh v The Commonwealth (2004) 222 CLR 322 at 331-337 [8]-[20]; [2004] HCA (2007) 161 FCR 220 at 228-229 [39]-[42]. Fugitive Offenders Act 1881 (Imp); Extradition Act 1870 (Imp) and Extradition Act 1903 (Cth); Service and Execution of Process Act 1901 (Cth) and Service and Execution of Process Act 1992 (Cth) (in relation to the execution of warrants for apprehension in Australia); Extradition (Foreign States) Act 1966 (Cth) and Extradition (Commonwealth Countries) Act 1966 (Cth); Extradition Act 1988 (Cth); International War Crimes Tribunals Act 1995 (Cth). A similar position applies in relation to New South Wales magistrates. Three propositions The asserted ground of invalidity of s 19 of the Extradition Act is that it involves a constitutionally impermissible attempt by the Parliament of the Commonwealth unilaterally to impose a duty upon a holder of a State statutory office. This attempt is said to contravene an implication from the federal structure of the Constitution, and to involve a "per se breach" of the principle of federalism enunciated in Melbourne Corporation v The Commonwealth6, and most recently applied by this Court in Austin v The Commonwealth7. In the United States, the 1997 decision of the Supreme Court in Printz v United States8 provides an example of what was held to be an invalid federal attempt to impose duties on State officials. Senior counsel for the appellants (in the third matter, the applicant) said that the success of his argument depended upon acceptance of each of the following propositions: the Commonwealth Parliament It is an implication from the federal structure of the Constitution that administrative duty on the holder of a State statutory office without State legislative approval. impose cannot (1947) 74 CLR 31; [1947] HCA 26. (2003) 215 CLR 185; [2003] HCA 3. Section 19 of the Extradition Act imposes an administrative duty on a magistrate as the holder of a State statutory office. The imposition of that duty is not approved by any legislation of the Parliament of Western Australia or, in the third case, the Parliament of New South Wales. The first proposition is one of constitutional law. The second and third propositions depend upon the correct interpretation of Commonwealth and State legislation. For the reasons that follow, each of the second and third propositions should be rejected. That being so, it is unnecessary, and therefore inappropriate9, to decide whether the first proposition is correct. It is, however, convenient to refer to aspects of the argument about the first proposition in order to explain the context in which the other questions arise. The first proposition In oral argument, counsel refined the first proposition as follows: unless there is something in the subject matter, content or context of a particular head of Commonwealth legislative power to indicate to the contrary, the Commonwealth Parliament has no power without State legislative approval to impose an administrative duty on the holder of a State statutory office, the functions and incidents of whose office are exhaustively defined by State legislation. The opening words of that formulation contain a qualification which is necessary in order to accommodate the "autochthonous expedient of conferring federal jurisdiction on State courts"10, which is sustained by a specific grant of legislative power. The qualification was expressed by Dixon J in the Melbourne Corporation Case11. The qualification is also necessary in order to accommodate the decision (concerning the defence power) in South Australia v The Commonwealth (The First Uniform Tax Case)12. Subject to that qualification, the capacity of the Commonwealth Parliament to enact laws which impose duties on officers of a State is a matter that has far-reaching consequences for Federal-State relations. Some of the arguments from both the Commonwealth and the States appeared to have a prophylactic purpose not directly related to the issues that have to be decided in the present cases. 9 Cheng v The Queen (2000) 203 CLR 248 at 270 [58]; [2000] HCA 53. 10 R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 268; [1956] HCA 10. 11 (1947) 74 CLR 31 at 83. 12 (1942) 65 CLR 373; [1942] HCA 14. The concluding words of the formulation raise a question noted earlier in these reasons. To say that the functions of the holder of a State office are exhaustively defined by State legislation appears to mean that State law, expressly or by implication, prohibits the extension of those functions by administrative decision. In such a case, it is not clear how a State Governor could lawfully enter into an arrangement, with the Governor-General or anyone else, to extend such functions. Yet the potential application of s 19 of the Extradition Act in the present cases depends upon the assumption that the magistrates in question are magistrates as defined by s 5, and therefore the subject of a valid arrangement under s 46. If there were no such valid arrangement, the issues with which we are concerned would not arise. If State legislation exhaustively defined the functions of State magistrates in a manner that excluded the possibility of their exercising administrative functions under the Extradition Act (which, as will appear, it does not), then it might be thought that there would be a challenge to the power of the State Governor to make an arrangement under s 46 of the Extradition Act. If, on the other hand, State legislation does not define the functions of State magistrates in a manner that excludes the possibility of their exercising administrative functions under the Extradition Act, then the definition of functions is not exhaustive, and the proposition as formulated would not apply. The deployment of State officials, and the making of administrative arrangements concerning their accommodation, remuneration and like matters, is a typical responsibility of the executive government; a responsibility that, of course, is exercised subject to any relevant statutory constraints. Whether a function is a duty or a power, and whether it is exercised by virtue of an office or as persona designata, administrative arrangements of the kind mentioned have to be made if the exercise is to be practically effective. In fact, State magistrates exercise a variety of functions, and may hold a variety of offices, other than those of a magistrate. We were informed, for example, that administrative functions undertaken by Western Australian magistrates include acting as a mining warden under the Mining Act 1978 (WA), acting as a member of the Police Appeal Board under the Police Act 1892 (WA), acting as a coroner under the Coroners Act 1996 (WA), acting as an industrial magistrate under the Industrial Relations Act 1979 (WA), issuing licences under the Auction Sales Act 1973 (WA), and acting as a visiting justice for prisons under the Prisons Act 1981 (WA). The variety of administrative functions undertaken by State magistrates is one of the best- known features of Australian legal history13. To return to the first proposition as originally expressed, the argument that (subject to the qualification noted) the Commonwealth Parliament cannot impose an administrative duty on a holder of a State statutory office without State 13 North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146 at 153 [4]; [2004] HCA 31. legislative approval raises at least two questions. Would the argument be different if, for the words "the holder of a State statutory office", there were substituted the words "a State officer"? What is the reason for referring to "State legislative approval" rather than "State agreement"? The re-formulation suggests that the two questions may be related; that the hypothesis is that there is State legislation which operates as an impediment to lawful and effective State agreement by executive rather than legislative action. In the absence of such legislation, if it be accepted that the federal structure of the Constitution requires an implication (subject to the qualification noted) that, without State agreement, the Commonwealth Parliament cannot impose an administrative duty on a State officer, or on State officers above a certain level, then there arises the question of the kind of action, legislative or executive, by which a State might lawfully and effectively agree. If there is a State legislative impediment to effective executive agreement, that is one thing. If there is no such legislative impediment, then it is not easy to see why the making of such an agreement would not fall within the ordinary executive power of deployment of State officials; a power which lies at the very centre of executive authority. It is unnecessary to pursue these questions because here, far from there being a State legislative impediment to the arrangements that have been made, there is State legislative authority and, furthermore, the Commonwealth law does not impose administrative duties. The second proposition The foundation for the argument that s 19 of the Extradition Act imposes an administrative duty on a magistrate as the holder of a State statutory office is the provision in s 19 that, in stated circumstances, "the magistrate shall conduct proceedings to determine whether [a] person is eligible for surrender" (emphasis added). A problem for the argument is s 4AAA of the Crimes Act 1914 (Cth) which sets out the rules that apply if, under a law of the Commonwealth relating to criminal matters, a non-judicial function or power is conferred on a State magistrate. One of those rules is that the function or power is conferred on the person only in a personal capacity (s 4AAA(2)). Another is that the person need not accept the power or function conferred (s 4AAA(3)). The importance of the contention that what is involved is the imposition of a duty rather than the conferral of a power follows from the decision of this Court in Aston v Irvine14. In this constitutional context, it is the creation by federal statute of an obligation to execute federal law that is the essence of the supposed duty. 14 (1955) 92 CLR 353; [1955] HCA 53. See also R v Humby; Ex parte Rooney (1973) 129 CLR 231; [1973] HCA 63. As noted earlier, s 4AAA was enacted against an historical background that included the involvement of State magistrates in extradition proceedings since the time of Federation, and colonial magistrates before that time. In its application to State magistrates, extradition proceedings would appear to be a paradigm case within the contemplation of s 4AAA. The expression "a law of the Commonwealth relating to criminal matters" is wide enough to embrace the Extradition Act. Part II of that Act is not concerned with offences against the Australian criminal law, or with the trial and punishment in Australia of criminal offences. By hypothesis, an offender is alleged to have violated a law of another country, and the intention is to try that person, not in Australia, but elsewhere. Nevertheless, the subject matter of extradition, to and from Australia, in which reciprocity plays an important part, concerns "criminal matters", and the Extradition Act is a law "relating" to such matters. Extradition is such an obvious and important topic, the role of State magistrates in extradition proceedings is of such long standing, and the matters dealt with by s 4AAA are of such clear potential relevance to extradition proceedings, as to support strongly a conclusion that s 4AAA was intended to cover the role of State magistrates under s 19 of the Extradition Act15. It may be accepted that an individual State magistrate who accepted the function and embarked upon s 19 proceedings in a particular case could be compelled to complete the task. However, as Branson J said in the matter of Williams16: "Understood in the context provided by Pt II of the [Extradition Act], s 19 is concerned to identify the role which is to be performed by a magistrate under the [Extradition Act]. It is not concerned to identify who is to exercise that role in a particular case. The identification of an appropriately qualified person to perform the role required of a magistrate under s 19 will be undertaken by those responsible for allocating duties to the magistrates of the State concerned. No person whose extradition is sought, nor any extradition country, could, whether by seeking a writ of mandamus or otherwise, compel a particular magistrate to whom the task had not been allocated to entertain an application under s 19." The second proposition should be rejected. 15 cf Acts Interpretation Act 1901 (Cth), s 21(1)(b). 16 (2007) 161 FCR 220 at 222-223 [7]. The third proposition The failure of the third proposition was the ground, or the principal ground, of the decisions of each Full Court of the Federal Court in these matters. Those decisions should be upheld. As to the first two matters, the question turns on the meaning of s 6 of the Magistrates Court Act 2004 (WA) and, in particular, s 6(3)(b), which provides that, with the Governor's approval, a magistrate may perform other public functions concurrently with those of a magistrate. This is to be read in its immediate statutory context, s 6(3)(a) providing that, with the Governor's approval, a magistrate may hold concurrently another public or judicial office or appointment including an office or appointment made under the law of another place. This indicates that the reference to "other public functions" in s 6(3)(b) is not confined to public functions conferred by Western Australian legislation. The Commonwealth is not "another place", but par (a) throws light on the meaning of par (b). Apart from the immediate statutory context, and of paramount importance, is the historical context earlier described. Here again, the long-standing involvement of Western Australian magistrates in extradition proceedings, and the national and international importance of the topic of extradition, make it very difficult to accept that the topic was not in contemplation when the legislature, in s 6, dealt with the functions of Western Australian magistrates. This is such a well-known and significant function of State magistrates that it is impossible to imagine that it was overlooked, or that it was not included in the general terms used in the provision. To treat it as not included among the "other public functions" referred to would be to give that expression a narrow and unreasonable interpretation. The considerations mentioned in the preceding paragraph apply with equal force to s 23 of the New South Wales legislation, which provides that a person may, with the approval of the Governor, hold and exercise the functions of the office of magistrate and another office or appointment. It is true that the Interpretation Act 1987 (NSW), in s 12, requires that, in the absence of a contrary intention, a reference to a jurisdiction or other matter or thing implies a reference to a jurisdiction or matter or thing in New South Wales, but the subject matter with which s 23 is concerned, understood in the context of the functions historically performed by State magistrates, requires the conclusion that the general words used manifest a contrary intention. Extradition is a topic of direct relevance to the State of New South Wales. The arrangements made by the Commonwealth with other countries, and legislation in the exercise of the external affairs power concerning the matter of extradition to and from Australia, bear upon the efficacy of the State's system of criminal justice. That, no doubt, is why the Australian States permit their magistrates to participate in the administration of extradition law. It is the Commonwealth that conducts Australia's foreign relations, but in the matter of extradition of fugitive offenders, those foreign relations have an important bearing on the practical enforcement of State laws. The language of s 23(2) of the Local Courts Act 1982 (NSW) is wide enough to cover the function in question, and it was such an obvious matter for legislative consideration that it would be unreasonable to treat the language as not covering the function. The third proposition should be rejected. Conclusion In the first two matters, the appeals should be dismissed with costs. In the third matter special leave to appeal should be granted, and the appeal should be treated as heard instanter and dismissed with costs. Crennan GUMMOW, HAYNE, HEYDON, CRENNAN AND KIEFEL JJ. These proceedings concern the operation of the federal system in a situation which is the converse to that considered in R v Hughes17. There the Court held that the Commonwealth Director of Public Prosecutions had power to institute and carry on prosecutions for certain indictable offences against State law. This was because federal law (supported by an adequate head of federal legislative power) provided for the exercise of functions and powers expressed by State law to be conferred upon the Director. It was accepted in Hughes that by force only of its own legislation a State could not unilaterally invest functions thereunder in an officer of the Commonwealth. An important difference between Hughes and the present proceedings is that here the officers in question are those of a State, not the Commonwealth, and the conferral of authority is by a law of the Commonwealth, the Extradition Act 1988 (Cth) ("the Act"). The Act deals with extradition from Australia (Pt II) and extradition to Australia (Pt IV) and makes special provision for extradition to New Zealand (Pt III). These proceedings arise from three extradition applications under Pt II. The proceedings These three matters were heard together. The first two are appeals from decisions of the Full Court of the Federal Court of Australia (Moore, Tamberlin and Gyles JJ)18 dismissing appeals from a judge of that Court (Siopis J)19. His Honour had heard together applications by Mr Zentai and Mr O'Donoghue to restrain the further pursuit of extradition proceedings instituted against them respectively by the Republic of Hungary and Ireland. In each case before Siopis J the second respondent was a magistrate holding that office under the law of the State of Western Australia. The third matter in this Court is an application by Mr Williams for special leave to appeal against a decision of the Full Court of the Federal Court (Branson, Tamberlin and Allsop JJ)20. Their Honours were exercising the original jurisdiction of the Federal Court upon an application to restrain the 17 (2000) 202 CLR 535; [2000] HCA 22. 18 Zentai v Republic of Hungary (2007) 157 FCR 585. 19 Zentai v Republic of Hungary (2006) 153 FCR 104. 20 Williams v United States of America (2007) 161 FCR 220. Crennan taking of further steps under the Act for the surrender of Mr Williams to the United States of America. The second respondent in these proceedings is identified as "Magistrates Appointed by Commission under the Public Seal of NSW". In all three proceedings the jurisdiction of the Federal Court was conferred by s 39B(1A) of the Judiciary Act 1903 (Cth) in respect of a matter arising under the Constitution or involving its interpretation. The contention by the applicant in each case was that the conduct of the extradition proceedings against him should not proceed because of the invalidity of ss 19(1) and 46(1)(a) of the Act. In this Court the respondent magistrates filed submitting appearances. Counsel for Ireland, the Republic of Hungary and the United States of America adopted the submissions made by the Commonwealth Solicitor-General. Submissions also were made, as interveners, by the Attorneys-General of Western Australia, New South Wales, South Australia and Victoria. The State Attorneys-General presented submissions adverse to the interests of the appellants and the applicant for special leave. Part II of the Act Part II (ss 12-27) of the Act is headed "Extradition From Australia to Extradition Countries". The structure of Pt II was analysed most recently by Gleeson CJ in Vasiljkovic v The Commonwealth21 and need not be repeated here. The Chief Justice, with reference to what had been said in Harris v Attorney-General (Cth)22, said that Pt II provided for four stages in extradition proceedings, namely23: "commencement, remand, determination by a magistrate of eligibility for surrender and executive determination (subject to legislative constraints) that a person is to be surrendered". Section 19(1), the validity of which is impeached, is engaged at the third stage, namely the determination by a magistrate of eligibility for surrender. The 21 (2006) 227 CLR 614 at 622-628 [16]-[29]; [2006] HCA 40. 22 (1994) 52 FCR 386 at 389. 23 (2006) 227 CLR 614 at 628 [29]. Crennan sub-section states that where the preceding steps in the process have been taken and the magistrate considers there has been a reasonable time to prepare, then: "the magistrate shall conduct proceedings to determine whether the person is eligible for surrender in relation to the extradition offence or extradition offences for which surrender of the person is sought by the extradition country". (emphasis added) Where the determination is of ineligibility for surrender, then the magistrate "shall ... order that the person be released" (s 19(10)); where there is a determination of eligibility, "the magistrate shall ... order that the person be committed to prison to await surrender ..." (s 19(9)). It is settled by authority including Pasini v United Mexican States24 and Vasiljkovic25 that the determination under s 19(1) of eligibility to surrender and the making of consequential orders under ss 19(9) and 19(10) involves the exercise of administrative functions and not the exercise of the judicial power of the Commonwealth. Accordingly, s 19 is not the product of an exercise by the Parliament of its power conferred by s 77(iii) of the Constitution to make laws investing State courts with federal jurisdiction. The term "magistrate" is defined in par (b) of the definition in s 5 of the Act so as to include "a magistrate of a State ... being a magistrate in respect of whom an arrangement is in force under section 46". Paragraph (a) of s 46(1) of the Act states that the Governor-General may: "arrange with the Governor of a State for the performance, by all or any of the persons who from time to time hold office as magistrates of that State, of the functions of a magistrate under this Act". Section 15(1) requires that a person arrested under a provisional warrant issued after application on behalf of an extradition country "shall be brought as soon as practicable before a magistrate in the State ... in which the person is arrested". It is not disputed that on their face the subsequent proceedings under s 19(1) to determine eligibility for surrender have been conducted by magistrates under arrangements made in respect of Western Australia and New South Wales and complying with s 46(1)(a). However, counsel for the two appellants and the 24 (2002) 209 CLR 246; [2002] HCA 3. 25 (2006) 227 CLR 614. Crennan applicant (whom we will describe collectively as "the appellants") point to the presence in s 19(1) of the phrase "the magistrate shall conduct proceedings ..." and from that basis found submissions respecting invalidity. The appellants' principal submissions The submissions begin with the propositions that when the magistrate embarks upon the exercise of the power conferred by s 19(1) the magistrate is obliged to proceed to determine eligibility to surrender and to make appropriate consequential orders and that the making of the determination may be compelled by a remedy of mandamus from a court of competent jurisdiction. The next step in the submissions is that the Parliament of the Commonwealth lacks the power, without State legislative approval, to impose upon the holder of a State statutory office an administrative duty enforceable by legal remedy where the functions and incidents of that office are "exhaustively" defined by State legislation. This absence of legislative power in the Parliament is said not to apply to all heads of power conferred by s 51 of the Constitution. The appellants concede that with respect to a particular head of power there may be something in the subject matter or context which indicates that the power may be exercised to compel the performance of duties under federal law even without State legislative approval. This qualification is made in apparent response to the decision in 1942 in the First Uniform Tax Case26. The provisions of federal legislation, the validity of which was upheld in that case, included those made in the Income Tax (War-time Arrangements) Act 1942 (Cth) which enabled the Commonwealth to take over from the States their officers, premises and equipment concerned with the assessment and collection of income tax; that statute was to continue in operation until the last day of the first financial year after what was then the war being waged by Australia. However, as noted below, the statute with which the present case is concerned is supported by the external affairs power. The appellants contend that no qualification applies in respect of that power such as may be found with the defence power. The requirement (which is disputed by the active respondents and the interveners) for the giving of consent by State legislation, rather than by the State executive government, appears to be placed by the appellants upon two related 26 South Australia v The Commonwealth (1942) 65 CLR 373. Crennan bases. The first is that a State executive has no power to add to the functions of an office created by a statute of that polity any more than it can alter the content of any other law made by the State legislature. The second is that the executive cannot dispense with or suspend the operation of those laws. In the latter regard reference was made to the decision of Wild CJ in the New Zealand Supreme Court in Fitzgerald v Muldoon27. The Chief Justice made a declaration that a public announcement by the Prime Minister of New Zealand that the operation of a statutory superannuation scheme was to cease forthwith, was "illegal as being in breach of s 1 of the Bill of Rights [of 1688]"28. As will appear, these proceedings may be resolved without a determination of whether that requirement for State legislative, rather than executive, approval is sound doctrine. This is because of what follows from the distinction drawn by the appellants between the conferral by federal law of a power and the imposition of a duty. The appellants concede that their case must fail in any event if s 19(1) of the Act confers a power but does not impose a duty. Power and duty The limitation contained in the submissions by the appellants with respect to the imposition by the federal law of a duty rather than merely the conferral of a power reflects the reasoning evident in the joint judgment of the Court in Aston v Irvine29. The provisions of the Service and Execution of Process Act 1901 (Cth) which were held valid in that case conferred powers upon State magistrates or other officers in respect of interstate service of process, and did not impose duties upon them. The Court said that to give the magistrates and other State officers mentioned in the federal law the powers in question involved no interference with the executive governments of the States30. The legislation upheld in Aston v Irvine relied upon the power of the Parliament with respect to service and execution of process conferred by s 51(xxiv). The provisions of the Act dealing with extradition from this country 27 [1976] 2 NZLR 615. 28 [1976] 2 NZLR 615 at 623. 29 (1955) 92 CLR 353. 30 (1955) 92 CLR 353 at 364. Crennan rely upon the external affairs power conferred by s 51(xxix)31. The appellants correctly take no point seeking to distinguish Aston v Irvine by reason of the differences in these heads of legislative power conferred by s 51 of the Constitution. Nor, subject to what appears below under the heading "The Melbourne Corporation Case", do the appellants seek to revisit the Engineers' Case32 and revive any theory of State reserved legislative powers allegedly supported by ss 106, 107 and 108 of the Constitution33. In Aston v Irvine the Court did refer34 to the then current authority in the United States Supreme Court. This included Robertson v Baldwin35 and Holmgren v United States36, cases which indicated that federal law might authorise State magistrates to exercise powers conferred by that law, at least if those State magistrates chose to do so. In the more recent decision in Printz v United States37, favourable reference was made by the majority to Holmgren as a case of State consent to the exercise of federal authority. This Court in Aston v Irvine also referred38 with apparent approval to the following passage in the treatise by Willoughby39: 31 Vasiljkovic v The Commonwealth (2006) 227 CLR 614 at 618 [6], 643 [87], 32 (1920) 28 CLR 1. 33 See New South Wales v The Commonwealth (Work Choices Case) (2006) 229 CLR 1 at 73-74 [54], 119-120 [192]-[194]; [2006] HCA 52. 34 (1955) 92 CLR 353 at 364. 35 165 US 275 at 280 (1897). 36 217 US 509 at 517-518 (1910). 37 521 US 898 at 906 (1997). 38 (1955) 92 CLR 353 at 364. 39 Willoughby, The Constitutional Law of the United States, 2nd ed (1929), vol 1 at Crennan "In general, however, the Federal and State Governments act independently of each other, as regards their executive or administrative services, and the principle is well established that the Federal Government may not impose upon State officials the imperative obligation and burden of executing Federal laws, nor, a fortiori, may the States obligate Federal officials to execute State laws40. However, it is equally well established that there is no constitutional objection to the granting by the Federal Government to State officials of authority to execute Federal functions, if they, or rather their respective State governments, are willing that they should do so41." The Melbourne Corporation Case Counsel for the appellants submitted that the constitutional requirement for State legislative approval for the imposition upon a State officer of an administrative duty is "a particular per se application" of the implication drawn from the federal structure in Melbourne Corporation v The Commonwealth42 and subsequent authorities including Re Australian Education Union; Ex parte Victoria43 and Austin v The Commonwealth44. In Austin45 the majority applied the proposition drawn from Australian Education Union46 that it is critical to the capacity of a State to function as a government that it retain the ability to 40 Kentucky v Dennison 65 US 66 (1860). 41 Some of the States, by express constitutional provisions, forbid their officials from accepting, while in office, Federal appointments. These prohibitions, however, in general, if not in all cases, are declared to apply only to certain of the higher grades of officers. A violation of these prohibitions operates, ipso facto, as a resignation of the State offices. It would seem to be clear that the States cannot prevent anyone, not even their own officers, from accepting a Federal appointment: the most that they can do is to declare that such an acceptance will operate to vacate a State office held by the one accepting the Federal office. 42 (1947) 74 CLR 31. 43 (1995) 184 CLR 188. 44 (2003) 215 CLR 185; [2003] HCA 3. 45 (2003) 215 CLR 185 at 218 [25], 260-261 [152], 282-283 [227]. 46 (1995) 184 CLR 188 at 233. Crennan determine the terms and conditions of engagement of employees and officers at the higher levels of government. However, in Austin the Court left for another day consideration of a larger proposition than that previously accepted as required by the Melbourne Corporation doctrine. The proposition put to one side was that it is critical to the constitutional integrity of the States that they alone have the capacity to give directions Acceptance of such a proposition could lead to the invalidity of federal laws which merely affected the ease with which the States exercised their constitutional functions, rather than impaired the exercise of those functions48. their officials and determine what duties In making that reservation in Austin reference was made49 by Gaudron, Gummow and Hayne JJ to recent decisions, including Printz50, supporting an implication in the Constitution of the United States which restrains the unilateral imposition by federal law upon State officials of functions under that federal law. Printz concerned the validity of a federal gun control law which commanded the "chief law enforcement officer" of each local State jurisdiction to check the background of prospective purchasers of handguns and to perform related tasks. One ground of the majority decision was that the federal law effectively, but invalidly, transferred to State officers the responsibility of the President to administer the laws enacted by Congress51. Another ground, an aspect of "dual sovereignty", was that the scheme of the Constitution was that the government of each State be accountable to its own citizens for the conduct of its officers52. In the present cases the appellants disclaimed any translation of the 47 (2003) 215 CLR 185 at 269 [181]. 48 cf Western Australia v The Commonwealth (Native Title Act Case) (1995) 183 CLR 373 at 481. 49 (2003) 215 CLR 185 at 268 [178]. 51 521 US 898 at 922-923 (1997). 52 521 US 898 at 918-922 (1997). Crennan reasoning in Printz in so far as it relied upon "dual sovereignty" as that doctrine has been understood from time to time in the United States. The majority in Printz put aside, as not controlling the outcome their Honours reached, those Supreme Court authorities dealing with the applications to the States of federal laws which, whilst of general application, "excessively interfered with the functioning of state governments"53. It is those authorities which march with the Melbourne Corporation doctrine. Counsel for the appellants did refer to the reliance in Melbourne Corporation and the later cases, particularly Austin, upon that line of United States authority. This, however, was said to support the use of the decision in Printz to lay the ground for a further development of the Melbourne Corporation doctrine. It is unnecessary on this occasion to determine whether the Melbourne Corporation doctrine should be developed in such a fashion as the appellants suggest and to produce the result that the Parliament lacks power, without State legislative approval, to impose upon the holder of a State statutory office a duty, rather than merely a power of an administrative nature. This is because, as Counsel opposed to the appellants submitted, the Act does not impose a duty of the postulated character. It is to that aspect of the argument that we return. Section 4AAA of the Crimes Act Section 19, and the other provisions of the Act which involve the exercise of functions by magistrates, must be read with s 4AAA of the Crimes Act 1914 (Cth) ("the Crimes Act"). Section 4AAA was added to the Crimes Act by the Crimes Amendment (Forensic Procedures) Act 2001 (Cth) and amended by the Law and Justice Legislation Amendment (Video Link Evidence and Other Measures) Act 2005 (Cth). The Commonwealth in its written submissions to this Court relied upon s 4AAA and in oral submissions the appellants accepted that if that provision operated as the Commonwealth contended then their case must fail. We turn to consider s 4AAA. 53 521 US 898 at 932 (1997). Crennan Section 4AAA operates in the circumstances detailed in sub-s (1). First, there must be "a law of the Commonwealth relating to criminal matters"; that expression includes a reference to the Crimes Act itself (s 4AAA(7)). Secondly, that law must confer "a function or power" which is not judicial, nor must the function or power be "incidental to a judicial function or power"54; that requirement is satisfied by s 19(1) of the Act. Thirdly, the law in question may have been made before or after the commencement of s 4AAA (s 4AAA(6)); accordingly, while the legislation in question here was enacted in 1988, s 4AAA nevertheless may apply to it. Next, to attract s 4AAA, a function or power having the requisite character must be conferred on one or more persons including "a magistrate"; that term is defined in s 16C of the Acts Interpretation Act 1901 (Cth) as including any magistrate in respect of whose office an annual salary is payable, but as not including a Federal Magistrate. The respondent magistrates in these appeals answer the definition. However, an issue arises as to whether the function or power they exercise under s 19 is conferred "under a law of the Commonwealth relating to criminal matters" within the meaning of s 4AAA. That question may be put aside for the present. Where s 4AAA is engaged, then by force of sub-s (2) the function or power is conferred upon a magistrate "only in a personal capacity"; it is not conferred upon the magistrate as a member of a court. Section 4AAA(3) is important for these cases and is relied upon by those parties opposed to the appellants. The sub-section states that "[t]he person need not accept the function or power conferred". That proposition is one of "the rules" which s 4AAA establishes. It should be held that acceptance, rather than "non-acceptance", may be inferred from a course of conduct, in particular by exercise of the power or function in question. That is what has occurred in the extradition proceedings with which the present litigation is concerned. However, no "rule" which otherwise operates by reason of the impact of s 4AAA upon a law of the Commonwealth relating to criminal matters will apply if in that law there appears the "contrary intention". This qualification to the operation of s 4AAA is imposed by s 4AAA(6A). The appellants submit that 54 cf R v Murphy (1985) 158 CLR 596 at 616. Crennan such a contrary intention does appear from the Act, in particular from the use of the term "shall" in s 19(1). The appellants' submissions respecting s 4AAA The appellants put their submissions against the adverse consequence which would flow for their case if s 4AAA(3) of the Crimes Act applied and a power rather than a duty was imposed, by relying upon two grounds. First, as noted above, is that the Act is not a law of the Commonwealth "relating to criminal matters". The second ground is that there appears in the Act a contrary intention to the proposition in s 4AAA(3) that the magistrate "need not accept the function or power conferred". For the reasons which follow neither submission by the appellants should be accepted. The consequence is that the constitutional inhibition for which the appellants contend, even if otherwise accepted, would not apply. This is the consequence of the presence of a power and the absence of a duty imposed by the arrangement made under s 46(1)(a) of the Act with respect to the performance by State magistrates of the functions of a magistrate under that law. "Under a law of the Commonwealth relating to criminal matters" Part IV of the Act (ss 40-44) is concerned with requests by Australia for surrender of persons convicted of an offence against a law of Australia or accused of such an offence and with the consequences of this surrender to Australia. Here there readily may be found a relationship with "criminal matters", namely conviction or accusation of guilt under domestic criminal law. However, the present appellants resist extradition from Australia which is sought under Pt II. The "criminal matters" directly concerned here are offences against the laws of the extradition countries. Two points should be made here. The first is that consideration of Australian criminal law is engaged by Pt II through the "double criminality" ground of extradition objection provided by par (d) of s 7 (which is to be read with the interpretative provision in s 10(3)). The present appellants will only be eligible for surrender by Australia if the magistrate has the satisfaction required by par (c) of s 19(2), namely: "that, if the conduct of the person constituting the offence in relation to the extradition country, or equivalent conduct, had taken place in the part of Australia where the proceedings are being conducted and at the time at which the extradition request in relation to the person was received, that Crennan conduct or that equivalent conduct would have constituted an extradition offence in relation to that part of Australia". In answering that question, any difference between the denomination or categorisation of offences under the domestic and foreign law are to be disregarded (s 10(3)(b)). This issue of "double criminality" stamps the Act with the character of a federal law relating to subject matter which necessarily involves consideration of the operation of domestic criminal law as a step in the magistrate's eligibility determination under s 19. That is sufficient to attract s 4AAA of the Crimes Act. The second point was urged particularly by the Commonwealth Solicitor-General. It is that given the anterior enactment of the Act in 1988, the long-standing involvement of State magistrates in extradition matters, and the need for reciprocity as a means of assisting enforcement of Australian criminal law in proceedings by Australia under Pt IV, it would be an unduly narrow construction of s 4AAA to exclude its operation where what was involved was extradition in aid of the laws of the extradition country. The second point also should be accepted. Contrary intention The arrangement between the Governor-General and the Governor of a State for which par (a) of s 46(1) provides is "for the performance, by all or any of the persons who from time to time hold office as magistrates of that State, of the functions of a magistrate under this Act" (emphasis added). Those functions are variously identified throughout Pts II, III and IV of the Act. Reference may now be made to some of them. Reference may first be made to some of the provisions in Pt II. The requirement under s 19(1) to conduct proceedings to determine eligibility for surrender should not be considered in isolation from what goes before s 19 in the administration of Pt II. The magistrate shall issue a provisional arrest warrant, upon application on behalf of an extradition country, if the magistrate "is satisfied" on the basis of information on affidavit, that the person in question "is an extraditable person in relation to the extradition country" (s 12(1)(b)). After arrest the person must be brought before a magistrate and ordinarily "shall be remanded by a magistrate in custody" (s 15(2)) and "shall not" be remanded on bail in the absence of "special circumstances" (s 15(6)). If the Attorney-General exercises power conferred by s 16(1) the magistrate may be directed by the Attorney-General to order release from custody (s 17(1)(c)). Crennan With respect to proceedings under Pt II and extradition to New Zealand under Pt III provision is made for the issue of search and seizure warrants (ss 14, 31). The magistrate "may issue" such a warrant upon provision of adequate material on affidavit. Part IV provides for the taking of evidence in Australia where "the Attorney-General suspects that a person is an extraditable person in relation to Australia" (s 43(1)). A magistrate then "may take" the evidence from witnesses and then "shall" cause it to be reduced to writing and, with a certificate, to be sent to the Attorney-General (s 43(2)). Paragraph (a) of s 46(1) does not isolate or differentiate between performance of the range of functions of a magistrate under the Act. The arrangement applies to all of them. The significance of s 4AAA is that it supplements the operation of par (a) of s 46(1) and focuses upon each magistrate who from time to time holds office and is a subject of the inter-governmental arrangement. Each magistrate, as a matter of federal law, is not obliged to accept the performance of the functions of a magistrate under the Act. The circumstance that those functions under the Act may be so formulated, as to any one or more of them, in terms which require the taking of steps by the magistrate if conditions precedent or jurisdictional facts be satisfied does not supply a "contrary intention" for the purposes of s 4AAA(6A). Section 46(1) speaks in terms of inter-governmental arrangement, and not, for example, in the peremptory terms of the law upheld in the First Uniform Tax Case55, to which reference has been made. Any operative "contrary intention" here would need to spell out that a State magistrate is obliged to accept the obligation to perform the functions of a magistrate under the Act. The submissions by the appellants respecting the imposition of a duty rather than a power should not be accepted. Conclusions and orders Much attention in submissions was devoted to examination of the legislation of Western Australia and New South Wales under which magistrates are appointed56. It was said by the appellants that this showed an absence of the necessary legislative consent to the imposition of duties upon the State 55 (1942) 65 CLR 373. 56 Local Courts Act 1982 (NSW); Magistrates Court Act 2004 (WA). Crennan magistrates by federal law, and that the statement in the State legislation of the duties of these office holders was exhaustive and thus not to be supplemented by federal-State executive arrangements. It is unnecessary to resolve these issues here. This is because the appellants' case fails at the earlier stage indicated in these reasons, the federal law operating to confer powers rather than impose duties. The appeals should be dismissed with costs. The application for special leave should be granted, and the appeal treated as heard instanter and dismissed with costs. Kirby KIRBY J. In the opening words of the reasons of Gummow, Hayne, Heydon, Crennan and Kiefel JJ ("the joint reasons")57, it is recognised that these proceedings concern the operation of the Australian federal system of government. The point upon which I differ from the other members of the Court derives from the federal idea. It is not consistent with that idea, as expressed in the Australian Constitution, for the Federal Parliament, still less the federal Government, to impose federal administrative functions on State magistrates, distinct from the functions provided for by State law. As senior State office- holders, such magistrates cannot have duties imposed on them unilaterally by federal legislation. Any resulting gap in their legal authority cannot be filled by State Government consent. At least, that cannot be done unless the State Parliament so provides with sufficient clarity. These reasons will seek to demonstrate that the attempt in these cases to impose federal administrative duties on State magistrates lacks the essential authority of the State Parliaments concerned. It is therefore invalid. To meet this argument, the majority embrace a statutory fiction that State magistrates are mere volunteers, free to perform or refuse the tasks assigned by federal law. For me this is wholly unconvincing. It is not the first time in recent years that such a legislative sleight of hand has succeeded. In the argument of the Communist Party Case58 before this Court, the Commonwealth urged the "limited nature"59 of the impugned federal Act and advanced a submission that the Governor-General's determinations under the Act could be examined one way or another thereby meeting a major challenge to the validity of the law60. In those more robust and realistic times the majority of this Court saw through this device. They flatly rejected the disingenuous argument61. They upheld the challenge to validity. We should be no less insistent. A "minimalist approach" to constitutional adjudication has the "perverse effect of … imperiling fundamental values"62. The challengers should succeed. 57 Joint reasons at [32]. 58 Australian Communist Party v The Commonwealth (1951) 83 CLR 1; [1951] HCA 59 Argument of Mr G E Barwick KC: (1951) 83 CLR 1 at 18. 60 (1951) 83 CLR 1 at 100-101, 106-108, 113-114. 61 (1951) 83 CLR 1 at 179-180 per Dixon J, 257-258 per Fullagar J. 62 Fiss, "Law Is Everywhere", (2007) 117 Yale Law Journal 257 at 268. Kirby The Constitution and this Court's central function No higher duty is imposed on this Court than that of ensuring that the Commonwealth and the States conform to the Constitution in their relations with each other63. This high duty found recognition in the framers' insistence (against the wishes of the Imperial power) that decisions "upon any question, howsoever arising, as to the limits inter se of the Constitutional powers of the Commonwealth and those of any State or States" should be reserved to this Court and not subject to appeal to the Privy Council, save in the exceptional circumstances of a certificate, granted but once64. It explains the need for "legalism" in declaring and upholding the constitutional requirements governing the constituent parts of the federation. Other nations manage without such irksome rules. But they lie at the heart's core of our system of government. As it has evolved in Australia, federalism has tended to favour, and enhance, the law-making powers of the Commonwealth at the expense of the States. However, the governmental arrangements expressed in the Constitution remain inescapably those of a dualist federal polity. So much is clear from the provisions of the Constitution, and in particular Ch V ("the States"). Section 107, in that Part, provides: "Every power of the Parliament of a Colony which has become or becomes a State, shall, unless it is by this Constitution exclusively vested in the Parliament of the Commonwealth or withdrawn from the Parliament of the State, continue as at the establishment of the Commonwealth …". This Court must defend the powers of the Parliaments of the States of which this provision speaks. Save where a law-making power is exclusively vested in the Federal Parliament or where, otherwise, the Federal Parliament is authorised to act under the Constitution, this Court must defend the residual powers of the State Parliaments. It must do so, no matter what might have been done in Imperial and colonial times, before the Constitution came into force. It must do so however well-intentioned the federal intrusion might appear to be. It must even do so where the governments of the States concerned (as here) intervene in support of the federal law. Governments are constituted by transient electoral majorities. Parliaments, on the other hand, represent all of the people. They have a separate existence, dignity and role under the Constitution. 63 New South Wales v The Commonwealth (Work Choices Case) (2006) 229 CLR 1 at 244-245 [611]-[612]; [2006] HCA 52; Attorney-General (Vic) v Andrews (2007) 81 ALJR 729 at 745 [92]; 233 ALR 389 at 409; [2007] HCA 9. 64 Constitution, s 74. Kirby Lest this view of the Constitution seem unduly old-fashioned and traditional, it is necessary to say that it derives from the prescriptions and implications of the written text. The text is the source of this Court's powers and legitimacy. As well, the federal division of powers and responsibilities, although sometimes inconvenient and inefficient, affords important protections for the people of the Commonwealth. It ensures that, to the stated extent, government is decentralised and more responsive to electors than it would be in a unitary state, operating in a country of continental size. In addition, it tends to protect the liberties of the people by dividing governmental power. History, and not just ancient history, demonstrates that centralisation of governmental power can operate inimically to freedom. Modern technology has a tendency to centralise power. The federal form of government is a beneficial antidote65. There are, of course, arguments for different systems of government and different federal arrangements (for example, the abolition of the States and their replacement by enhanced local government). However, these do not reflect the provisions of the Constitution. Whilst it endures in its present terms, this Court's duty is to give effect to its meaning faithfully. Our constitutional system of checks and balances does not work according to its intended design unless this Court plays its proper part. In these proceedings, the moving parties challenge what they portray as an attempt by the Federal Parliament, unilaterally, to impose administrative duties or functions upon magistrates of two Australian States. It is common ground that, in this instance, no "mirror"66 or express State law has been enacted by the States concerned to authorise the federal legislative imposition. When the constitutional point was taken in these cases, it resulted in a scramble by the federal and State authorities to justify the law in question. In the courts below67, that attempt was almost entirely confined to an endeavour to squeeze out of ambiguous and opaque State laws an indication that the relevant State Parliaments had indeed given their express approval for the deployment of 65 Work Choices Case (2006) 229 CLR 1 at 229 [558], 245 [612]. 66 Numerous examples of "mirror" or counterpart federal and State legislation may be found in Twomey, The Constitution of New South Wales, (2004) at 840-843. See also Permanent Trustee Australia Ltd v Commissioner of State Revenue (Victoria) (2004) 220 CLR 388; [2004] HCA 53 referring to Commonwealth Places (Mirror Taxes) Act 1998 (Cth). 67 Zentai v Republic of Hungary (2006) 153 FCR 104 (Siopis J); Zentai v Republic of Hungary (2007) 157 FCR 585 (Full Court); Williams v USA (2007) 161 FCR 220. Kirby State magistrates in the manner apparently contemplated by the federal law. Although such arguments succeeded below, so fragile and contestable was the reasoning supporting them that by the time these proceedings reached this Court, the arguments (at least of some of the interveners) had changed. Some of the respondent parties and interveners now contend that executive government agreement alone was sufficient to permit the deployment of the magistrates, despite the fact that the office of "magistrate" in each of the States concerned was created by State legislation and did not arise out of delegated, implied or prerogative executive power. In addition, a new argument – and one that hardly featured in the courts below68, and was not the subject of any notice of contention in this Court – sought cleverly to escape from the problem altogether. It relied upon the federal legislative sleight of hand to which I have referred69. It was contended that individual State magistrates "need not accept the function or power conferred" by the contested provisions of federal law70. So, it was submitted, whatever a State magistrate did under the federal law was done personally and voluntarily, rather than as a magistrate. Both the reasons of Gleeson CJ and the joint reasons now embrace this apparent forensic afterthought71. It has the immediate attractiveness of absolving this Court of any obligation to decide the important and serious federal questions that comprised the greater part of the arguments of the parties. It would have the happy consequence of circumventing the inconvenient (if, in all likelihood, temporary) outcome of frustrating the extradition of three persons to friendly requesting countries. Not for the first time in recent years, an important problem arising under the Constitution is escaped by adopting a construction of the challenged legislation that has not featured, significantly or at all, until the case has reached this Court72. The parties who invoke the Constitution come to this 68 The point was mentioned but not decided by Branson J in Williams (2007) 161 FCR 220 at 225 [21]. 69 Crimes Amendment (Forensic Procedures) Act 2001 (Cth), Sched 1 inserting s 4AAA into the Crimes Act 1914 (Cth) ("the Crimes Act"). Later amendments to s 4AAA were made by the Law and Justice Legislation Amendment (Video Link Evidence and Other Measures) Act 2005 (Cth). 70 Crimes Act, s 4AAA(3). 71 Reasons of Gleeson CJ at [21]-[25], joint reasons at [59]-[77]. 72 See Combet v The Commonwealth (2005) 224 CLR 494 at 534 [43], 611-612 [281]-[282]; [2005] HCA 61; Gypsy Jokers Motorcycle Club v Commissioner of Police (2008) 82 ALJR 454 at 472 [82], 477 [111]; 242 ALR 191 at 212, 219; [2008] HCA 4; cf New South Wales v Amery (2006) 230 CLR 174 at 210 [120]; [2006] HCA 14. Kirby Court in the faith that we will uphold the basic law. They find that the Court is not really there. It sends them away saying that their problem does not really exist. I have no sympathy with such a view of the Constitution and of this Court's function under it. I do not agree that the problem presented by these cases can be circumvented in the manner suggested by my colleagues. I deprecate the avoidance of important constitutional questions by defining them out of existence. That is not the function of a constitutional court. I must therefore explain my reasons for rejecting the approach of the other judges of this Court. My conclusion, in that regard, obliges me to grapple with the constitutional and statutory issues that have hitherto engaged the courts below and otherwise engaged this Court. When those issues are correctly addressed, the submissions of Messrs O'Donoghue, Zentai and Williams ("the appellants")73 must be accepted. Because of the absence of State laws signalling clear consent to the purported conferral of federal functions on State magistrates by the Extradition Act 1988 (Cth) ("the Act"), that Act is, in this respect, invalid under the Constitution. The Federal Parliament cannot impose such functions in a unilateral manner. Nor can it do so by invoking executive arrangements. The facts For the purposes of resolving the constitutional question, it is unnecessary to explain, in detail, the facts surrounding the attempted extradition of the appellants. It is sufficient to note that Ireland is seeking the extradition of Mr O'Donoghue in respect of charges involving alleged fraud on his part. The Republic of Hungary is seeking the extradition of Mr Zentai in respect of an alleged war crime. The United States of America is seeking the extradition of Mr Williams in respect of multiple allegations of wilful attempts to avoid federal income tax74. In each case, the appellant was brought before a State magistrate for the performance of functions (I use a neutral word) under the Act, anterior to extradition to the respective "extradition country". In accordance with s 12 of the Act, those countries had earlier engaged the first of four stages set out in the Act, prerequisite to the serious step of the extradition of a person from Australia. The step is serious because it impinges upon the liberty of a person within Australia, 73 cf joint reasons at [42]. 74 See Williams v Minister for Justice and Customs (2007) 157 FCR 286. Kirby protected by Australian law. It involves a surrender by Australia to an extradition country of an attribute of this nation's sovereignty. Conventionally, extradition law is strictly interpreted and applied because of these and other features75. The scheme of the Act An extradition country having applied to a "magistrate", as defined in the Act76, for the arrest of each of the appellants, it was for the "magistrate", in the first stage of the process, to be "satisfied" that the person was an "extraditable person"77. The Act provides that, if he or she is so satisfied, the magistrate "shall issue a warrant" for the arrest of that person78. It was pursuant to such a warrant that each of the appellants was arrested under order of the State magistrate concerned. In the second stage of the extradition process, the arrested person is brought before a magistrate to be remanded in custody or on bail pending the conduct of proceedings under, relevantly, s 19 of the Act79. Once again, it is clear from the scheme of the Act that the "magistrate" has, and retains, authority over the liberty of the arrested person. The third stage of the extradition process involves the magistrate conducting proceedings under s 19 of the Act to determine whether the person is "eligible for surrender in relation to the extradition offence or … offences for which surrender of the person is sought"80. It is a prerequisite to s 19 proceedings that the federal Attorney-General has issued a notice under s 16(1) of the Act, notifying the magistrate that he or she has received an extradition request from an extradition country in relation to that person. If, in accordance with s 19 of the Act, the magistrate decides that the person is eligible for surrender, the fourth stage of the extradition process is reached. It is then for the Attorney-General, under s 22 of the Act, to determine 75 Vasiljkovic v The Commonwealth (2006) 227 CLR 614 at 666 [177]-[178]; [2006] HCA 40; cf Re Hilali [2008] UKHL 3 at [30]. 76 The Act, s 5. 77 See the Act, s 6. 78 The Act, s 12. 79 The Act, s 15. 80 The Act, s 19(1). Kirby whether the eligible person should be surrendered. The magistrate has no part in the decision made at the fourth stage. However, self-evidently, his or her decisions at the earlier stages are preconditions to the ultimate removal of the person from Australia to an extradition country. Under s 5 of the Act, the word "magistrate" is defined to mean, relevantly, "a magistrate of a State … being a magistrate in respect of whom an arrangement is in force under section 46". By s 46 of the Act, relevantly, it is provided that the Governor-General may: "arrange with the Governor of a State for the performance, by all or any of the persons who from time to time hold office as magistrates of that State, of the functions of a magistrate under this Act". The appellants' challenges The challenges that are now before this Court were raised by the appellants at the third stage of the extradition process. Each of them sought (pursuant to s 39B of the Judiciary Act 1903 (Cth)) to prohibit or restrain the respective State magistrates from conducting proceedings to determine their eligibility for surrender to the extradition country. The appellants also sought a declaration that ss 19 and 46 of the Act were invalid under the Constitution, in so far as those provisions purported to authorise, or permit, proceedings before State magistrates. In the proceedings of Messrs O'Donoghue and Zentai, the second respondents were individual magistrates of the Magistrates Court of Western Australia. Mr Williams's process named, as the second respondent, "Magistrates appointed by commission under the public seal of New South Wales". It was not contested that, on 24 November 1988, the Governor-General had, by instrument and in stated compliance with s 46 of the Act, arranged relevantly with the Governors of Western Australia and New South Wales for "all or any of the persons who from time to time hold office as Magistrates of [each] State" to perform the functions "of a Magistrate under the Act"81. The record shows that in the cases of Messrs O'Donoghue and Zentai, the arrest warrants issued under s 12(1) of the Act were authorised by magistrates of the State of Western Australia other than those who later had before them the third ("eligibility") stage, at which point the constitutional relief was claimed. 81 The relevant instruments were gazetted in the Commonwealth of Australia Gazette, S366, 30 November 1988. Kirby It was accepted for the appellants that no attempt had been made in the courts below to establish the precise factual situation governing the assignment of particular magistrates to the performance of functions under the Act which they severally discharged. As a matter of evidence, there is no indication of the existence, or absence, of any internal arrangements within the Magistrates Court of Western Australia or the Local Court of New South Wales by which particular magistrates were, or are, afforded the opportunity to participate in (or to object to or decline to perform) the functions described in the Act. It was common ground that those functions are administrative and not judicial in character82. Neither the character of the powers conferred by the Act, nor the language in which those powers are expressed, is apt to engage the judicial functions of a State court as contemplated by s 77(iii) of the Constitution. By that unique provision, the Federal Parliament may make laws "investing any court of a State with federal jurisdiction" in respect of any matter arising under any law made by that Parliament. Section 19 of the Act is not, and does not purport to be, a law investing a State court with federal jurisdiction. Instead, it is a law designating members of a nominated class (State "magistrates") as persons authorised to perform what s 46(1)(a) of the Act itself describes as "functions … under this Act". The decisional history O'Donoghue and Zentai appeals: The challenges of Messrs O'Donoghue and Zentai were heard together by Siopis J in the Federal Court of Australia. His Honour rejected two arguments then advanced for the appellants which have not been pursued in this Court83. However, most of his attention was addressed to what remained the principal focus of debate in all of the proceedings in the courts below. This was the suggested need for State legislative approval of the imposition of federal "functions" on a "magistrate" of the State84. Siopis J did not consider that there was such a need85. His Honour also accepted the submission that, in any event, "consent and approval" for the performance of the 82 See Director of Public Prosecutions (Cth) v Kainhofer (1995) 185 CLR 528 at 539; [1995] HCA 35; Pasini v United Mexican States (2002) 209 CLR 246 at 253-254 [11]-[13]; [2002] HCA 3. 83 Zentai (2006) 153 FCR 104 at 114-118 [41]-[61]. 84 (2006) 153 FCR 104 at 109-114 [14]-[40]. 85 (2006) 153 FCR 104 at 111 [24]-[25]. Kirby functions could be found in s 6(3)(b) of the Magistrates Court Act 2004 (WA) ("the WA Act")86. There is no record in his Honour's reasons of any reliance on s 4AAA of the Crimes Act 1914 (Cth) ("the Crimes Act") or principles of the common law that now prove determinative in this Court. Nor were those matters referred to by the Full Court of the Federal Court in dismissing an appeal from the orders of Siopis J. To the contrary, that Court confined its attention to the question whether s 6(3)(b) of the WA Act amounted to a State legislative provision authorising "the imposition of functions and duties on State magistrates under s 19 of the Act"87. Repeatedly, the Full Court characterised the "function" imposed on the State magistrates under the federal Act as a "duty"88. The Full Court simply concluded that "the State has approved the performance of duties under s 19 of the Act by persons holding office under the Magistrates Court Act"89. Mr Williams's application: When Mr Williams initiated his challenge in the Federal Court, the proceeding was referred to a Full Court. Despite the somewhat different legislation governing magistrates in New South Wales, the judges in the Full Court followed the general approach that had earlier been adopted in respect of Messrs O'Donoghue and Zentai. Specifically, their Honours concluded that s 23(2) of the Local Courts Act 1982 (NSW) ("the NSW Act"), on its proper construction, was "sufficiently extensive to enable the Governor [of New South Wales] to make an arrangement in relation to any function, including the imposition of a duty by the Commonwealth, as occurs in s 19 of the [Act]"90. In her separate reasons, Branson J mentioned in passing s 4AAA of the Crimes Act91. However, her Honour concluded that it was unnecessary to decide the applicability of that section to the circumstances of the case. She too regarded the federal deployment of State magistrates as sufficiently authorised by s 23(2) of the NSW Act92. 86 (2006) 153 FCR 104 at 112 [32]. 87 Zentai (2007) 157 FCR 585 at 590 [32]. 88 See eg (2007) 157 FCR 585 at 588 [15]-[16]. 89 (2007) 157 FCR 585 at 589 [25] per Tamberlin J (emphasis added). See also at 586 [1] per Moore J, 591 [35] per Gyles J. 90 Williams (2007) 161 FCR 220 at 234 [63]. 91 (2007) 161 FCR 220 at 225 [21]. 92 See (2007) 161 FCR 220 at 224 [14]. Kirby Common arguments below: This summation demonstrates what is clear from the record. Until this matter arrived at this Court, no one seriously considered (and certainly no one decided) that the functions imposed on magistrates by the Act were not duties, such that the constitutional and statutory problems raised could be side-stepped. In my respectful opinion, the general approach of the earlier judges was correct but their ultimate conclusions were wrong. The approach taken in this Court is wrong, as is its conclusion. I will demonstrate why that is so. The issues Three issues are presented for decision by this Court. Re-arranging them somewhat to accord with the new basis upon which the majority of this Court decides that the deeper questions may be ignored, the issues are: The construction issue: Does s 19 impose legal "duties" on State magistrates? Or is s 4AAA of the Crimes Act effective to deprive it of a compulsory character? The constitutional issue: If s 19 does impose duties, is it an implication from the federal structure of the Constitution that the Federal Parliament cannot impose such duties on the holder of the office of "magistrate", established under State law, without State legislative approval? The States' supposed approval issue: If State approval is required, is it afforded in these proceedings (a) in the cases of Messrs O'Donoghue and Zentai, by ss 6(1) or 6(3) of the WA Act; and (b) in the case of Mr Williams, by s 23(2) of the NSW Act? The construction issue: an administrative duty? Nature of the argument: The postulate underpinning the argument of the respondents and interveners on the first issue is that, because the Act does not purport to impose affirmative legal duties on State magistrates, no problem of a constitutional kind arises. Upon this view, it is for the State magistrates concerned to decide for themselves whether to perform the functions to which s 19 of the Act refers. In that sense, the magistrate is no more than a type of volunteer, performing functions as an individual who, although otherwise a State magistrate, in effect elects to undertake needlessly additional duties independent of the requirements of their office. One need do no more than set out the chain of reasoning to demonstrate what an unconvincing argument is advanced. Yet the argument is now accepted by all of my colleagues. It is said to derive support from the decision of this Kirby Court in Aston v Irvine93 and now s 4AAA of the Crimes Act94. It is therefore necessary to indicate, with a little care, why it should be rejected. Before doing so, however, it is appropriate to pause for a moment and to reflect a little further on what, with respect, is the unreality of the submission now embraced. Although State "magistrates" are singled out by express reference to their office, the suggestion is made not only that they perform functions under the Act as personae designatae95 but that, when doing so, they are somehow to be treated as disjoined from the very office that is a prerequisite to their selection to perform such functions. Each magistrate is to be "detached from the court to which he [or she] belongs and used for particular purposes"96. There is nothing in the Act that warrants such a conclusion. There is much that speaks against it. Decision in Aston: The foundation for the argument that now finds favour in this Court is the earlier holding of the Court in Aston97. That case concerned the constitutional validity of s 18 of the Service and Execution of Process Act 1901 (Cth) ("the 1901 Act"). Section 18 conferred functions on, inter alios, a Stipendiary or Special Magistrate, a Justice of the Peace or an officer of a court having the power to issue a warrant for the apprehension of a person under the law of one State to make an indorsement on a warrant issued in another Australian jurisdiction authorising the execution of that warrant in that State. In Aston, this Court unanimously rejected an argument that, since the persons named in the federal law as having the power to indorse warrants exercised that power under the authority of that law (and not as agents deriving authority from the executive governments of the States concerned), it was not a valid exercise of federal constitutional power. The suggestion is now made that, by analogy, the same result follows for s 19 of the Act in question in these proceedings. The analogy is unsound. Distinguishing Aston: There are several reasons why it is unsound. First, and most importantly, the gravamen of the decision in Aston was a consideration 93 (1955) 92 CLR 353; [1955] HCA 53. See joint reasons at [48]-[51]. 94 Joint reasons at [59]-[77]. 95 Vasiljkovic (2006) 227 CLR 614 at 627 [28]. 96 cf Queen Victoria Memorial Hospital v Thornton (1953) 87 CLR 144 at 152; [1953] HCA 11. 97 (1955) 92 CLR 353. Kirby of the ambit, and interpretation of the power to legislate expressly afforded to the Federal Parliament by s 51(xxiv) of the Constitution98. This confers power to make laws with respect to "the service and execution throughout the Commonwealth of the civil and criminal process and the judgments of the courts of the States". There is no equivalent provision pursuant to which the Federal Parliament is empowered to make laws with respect to extradition. Its powers in that respect derive (for the most part) from the federal legislative power with respect to "external affairs"99. That power, like all others in ss 51 and 52, is granted to the Federal Parliament "subject to this Constitution". This qualification imports the express provisions protective of the constitutional power of State Parliaments100. It also imports any implied limitations deriving from the federal character of the Constitution and the role of the States in such a federal polity. The decision reached in Aston was supported by the express and unambiguous terms in which the power to make federal laws with respect to the service and execution of criminal process throughout the Commonwealth was granted. Measured against the particularity of par (xxiv) of s 51, other provisions of, or implications in, the Constitution could not prevail. The decision in Aston is therefore no more than what it purports to be: a construction of the provisions of s 51(xxiv). On this basis, that decision can quite easily be distinguished from the present proceedings. Section 18 of the 1901 Act had a firm foundation in an explicit grant of legislative power. There is no equivalent foundation for s 19 of the Act in question here. The general source of power is susceptible to the attack on its deployment, made by the appellants. The decision in Aston does not repel that attack. On the contrary, by contrasting the respective legislative sources, the susceptibility to a collateral constitutional attack of the source founded, for example, in the external affairs power is made plain. There is a second response to the invocation of Aston. It relates to the nature of the functions conferred by s 18 of the 1901 Act when compared to those purportedly authorised by s 19 of the Act under present scrutiny. It was possible, in Aston, for this Court to conclude that the 1901 Act had done no more than enhance, pursuant to s 51(xxiv), powers already enjoyed by State magistrates to issue warrants under State law. This was seen as permissible 98 (1955) 92 CLR 353 at 364. 99 Constitution, s 51(xxix) (external affairs). See also ss 51(xxvii) (immigration and emigration), 51(xxviii) (the influx of criminals). 100 Constitution, s 107. See also ss 106, 108. Kirby because it involved "no interference with the functions of the executive government of the State"101. By way of contrast, the challenge in the present case is expressed much more broadly. It is not founded on suggested federal interference with the executive government of the State but rather with the office of magistrate and with the powers of the Parliament of the State concerned, having established that office, to provide exclusively for the deployment of holders of that office. Nothing in Aston contradicts the argument advanced by the appellants in these proceedings. The decision is founded in the express language of s 51(xxiv) of the Constitution. Neither the holding nor the reasoning answers the appellants' submissions or justifies the conclusion that the constitutional issues here presented are avoidable. The Act under consideration, as will be plain, does much more than confer powers upon magistrates. It imposes functions and duties. Indeed, it is clear that "magistrates" have been chosen to exercise the federal functions for the very reason that they hold offices making them apt repositories of the powers and duties which the Federal Parliament has purportedly assigned to them. Statutory language signifies duty: Many indications in the language, subject matter and structure of the Act confirm that, in enacting s 19 of the Act, the Federal Parliament intended to impose duties upon State "magistrates": The Act provides that where an application is made under s 19, "[a] magistrate shall conduct proceedings to determine whether [a] person is eligible for surrender". By definition the "magistrate" concerned must be "a magistrate of a State". The Act thus purports to impose a duty on a State magistrate, its character being signified by the imperative verb "shall". This is the language of duty. It is a language well understood, as such, by office-holders such as magistrates; The choice of State magistrates as the repositories of power under the Act also indicates that s 19 was drafted upon the expectation that persons of such a designation would be both competent and appropriate to perform the functions conferred (and invariably willing and able to do so) simply by reason of their office. That office involves numerous coercive functions, with which the functions purportedly imposed by the Act are, in many respects, analogous. Specifically, it is not uncommon for State magistrates to make decisions directly affecting the liberty of individuals, such as are required to be made under s 19 of the Act (and also, for example, s 12); 101 (1955) 92 CLR 353 at 364. Kirby There is no evidence in the Act or otherwise to suggest the existence, and exercise, by State magistrates, of an entitlement to refuse, or decline, to perform functions under the Act. Indeed, there are several indications in applicable State law that argue against an entitlement to do so. From the flimsiest of evidentiary foundations, the joint reasons appear prepared to infer that the State magistrates, who have performed functions under the Act affecting the appellants, have done so merely on the basis of their personal "acceptance" of the function or power concerned102. In the absence of direct evidence one way or the other (taking into account history, experience and common practice), the better inference to draw is that the State magistrates have each performed the federal functions pursuant to regular official assignment to those functions in the manner provided for under State law. In Western Australia, s 25 of the WA Act permits the Chief Magistrate, "by directions given from time to time to a person who is a magistrate", to "specify which administrative duties the person is to perform for the time being" and to "specify where, when and at what times to … perform those … duties". In New South Wales, a similar provision allows the Chief Magistrate to allocate particular functions to particular magistrates103. If, as appears to have been the case, the Federal Parliament (and Government) and the State Governments all assumed that functions under s 19 of the Act might lawfully be conferred by means of mutual executive arrangements, it is stretching the judicial imagination even of this Court to suppose that the State magistrates, at any stage in these proceedings, conceived of themselves, or acted, as if performing anything other than statutory duties binding upon them. All available indications point in the opposite direction. A factual inference that State magistrates were not obliged to perform s 19 functions should not be drawn by this Court, in effect for the first time, in the exercise of the Court's appellate jurisdiction. If such were to be established, the evidentiary or forensic burden of proving that the magistrates were volunteers rested on the governments concerned, each having the requisite knowledge, resources and motivation to provide such proof. None was forthcoming; and (4) Against this background, the notion that a State magistrate to whom an application was made under s 19 of the Act could treat the exercise of the resulting functions as purely personal and voluntary to him or her is impossible to reconcile with the scheme and purpose of the Act. It would not be open to such a magistrate to "simply abnegate his authority"104. 102 Joint reasons at [65]. 103 NSW Act, s 14. 104 Ffrost v Stevenson (1937) 58 CLR 528 at 572; [1937] HCA 41. Kirby Should a State magistrate fail (actually or constructively) to perform functions imposed by the Act, performance of those functions would doubtless be compellable by mandamus, assuming their constitutional validity. Alternatively, a declaration might be made, to which it would be expected that an office-holder such as a magistrate would conform without question. In essence, that is a consequence inherent in the choice of "magistrates" as the class of persons in whom the relevant powers are reposed. In establishing the nature of the functions imposed under a statute, and in particular the degree to which they are compulsory, it is appropriate to have regard to the character and functions of the donee of the power. As Earle Cairns LC observed in Julius v Lord Bishop of Oxford105: "[T]here may be something in the nature of the thing empowered to be done, something in the object for which it is to be done, something in the conditions under which it is to be done, something in the title of the person or persons for whose benefit the power is to be exercised, which may couple the power with a duty, and make it the duty of the person in whom the power is reposed, to exercise that power when called upon to do so." In the same reasons, his Lordship explained106: "[W]here a power is deposited with a public officer for the purpose of being used for the benefit of persons who are specifically pointed out, and with regard to whom a definition is supplied by the Legislature of the conditions upon which they are entitled to call for its exercise, that power ought to be exercised, and the Court will require it to be exercised." The power reposed by the Act in State "magistrates" is to be used for the benefit of the extradition country but also, in a sense, of the person subject to the application. The selection by the Act of a State "magistrate" to exercise the functions and powers indicates, clearly enough, that they are so reposed as duties and not "voluntary" or purely personal or "optional" activities. They are, and are intended to be, serious public powers. They impinge immediately on the rights of those seeking their exercise and the liberties of those potentially affected. It follows that, when the federal Act was enacted, it was never intended that anything less than a compulsory duty to exercise those powers should be imposed upon State magistrates. The contrary has not been demonstrated. 105 (1880) 5 App Cas 214 at 222-223. 106 (1880) 5 App Cas 214 at 225. Kirby Section 4AAA of the Crimes Act: But has the subsequent enactment of s 4AAA altered this situation in a material way? Does that section render non- compulsory the functions which the Federal Parliament, by the Act, initially imposed upon State magistrates assigned to consider applications at successive stages of the extradition process, effectively as part of their official duties? Reliance was placed on s 4AAA(3) by the first respondent in Mr Williams's case. At no stage was it relied on by any of the respondents in the earlier proceedings of Messrs O'Donoghue and Zentai. I shall overlook any difficulties that might be presented in this regard by the course of the proceedings, the state of the record and the absence from any of the proceedings of any relevant notice of contention. I can safely do this because of the conclusion that I reach adverse to the substance of the contention. The construction issue: s 4AAA of the Crimes Act Provisions of s 4AAA: The enactment of s 4AAA of the Crimes Act represents an attempt, in effect, to repair a perceived defect in pre-existing (and later enacted) federal law. Relevantly, s 4AAA states: "Application This section sets out the rules that apply if, under a law of the Commonwealth relating to criminal matters, a function or power that is neither judicial nor incidental to a judicial function or power, is conferred on one or more of the following persons: a State or Territory judge; a magistrate; a Justice of the Peace or other person: employed in a State or Territory court; and authorised to issue search warrants, or warrants of arrest. Kirby Functions and powers conferred personally The function or power is conferred on the person only in a personal capacity and not, in the case of a … State or Territory judge or magistrate, as a court or a member of a court. Function or power need not be accepted The person need not accept the function or power conferred. Protection and immunity provided (4) A State or Territory judge or magistrate performing a conferred function, or exercising a conferred power, has the same protection and immunity as if he or she were performing that function, or exercising that power, as, or as a member of, a court (being the court of which the judge or magistrate is a member). This section applies regardless of when Commonwealth law made This section applies whether the law conferring a function or power was made before, on or after, the commencement of this section. Contrary intention (6A) Despite subsection (1), a rule set out in this section does not apply if the contrary intention appears. A law of the Commonwealth relating to criminal matters In this section a reference to a law of the Commonwealth relating to criminal matters includes a reference to this Act." There follows s 4AAB which provides for the Governor-General to make arrangements with the Governor of a State for the conferral of non-judicial functions and powers on, amongst others, a State magistrate. This section does not advance the matter as it operates on the same basis as s 46 of the Act in contest here. Section 4AAA(1) contains a marginal note indicating that the word "magistrate" is defined in s 16C of the Acts Interpretation Act 1901 (Cth). That section provides that the word "magistrate" does not include a federal magistrate but does include a reference, unless the contrary intention appears, to a "Chief, Police, Stipendiary, Resident or Special Magistrate" or "any other Magistrate in Kirby respect of whose office an annual salary is payable". The context makes it plain that this extends to State magistrates of the kind respondent to these appeals. There are three reasons why s 4AAA of the Crimes Act does not perform the function attributed to it by the majority in this Court. Existence of a contrary intention: The first reason is that s 4AAA is inapplicable according to its own terms because "the contrary intention appears" in s 19 of the Act. There is nothing specific in s 4AAA to indicate that, in enacting the provision, the Federal Parliament gave any particular attention to the case of that Act. The reasons previously collected to indicate why the language, structure and context of s 19 are impossible to reconcile with a notion that the "functions" imposed on State magistrates are "voluntary" or "optional" sufficiently indicate why the general provisions of s 4AAA are inapplicable because "the contrary intention appears". It is unnecessary to repeat these reasons. It would require language of far greater specificity and clarity than appears in s 4AAA to have the effect of converting the manifestly obligatory administrative functions envisaged under s 19 of the Act into voluntary or optional functions. No law relating to criminal matters: The second reason for holding s 4AAA inapplicable to the functions contemplated by s 19 of the Act rests on the requirement in s 4AAA(1) that the federal law operated upon must be one "relating to criminal matters". The fact that s 4AAA is addressed to federal laws appears in terms. It is concerned with rules applicable "under a law of the Commonwealth". It would be normal to read the following phrase "relating to criminal matters" as confined to "criminal matters" provided for under the federal law of Australia. This is because the reader expects federal law to be addressed to the proper subject matters of federal law, in this case Australian federal criminal matters. If some other, further or different subject matter were intended, it is reasonable to presume that an expansive definition of "criminal matters" would have been adopted. In sub-s (7) of s 4AAA, the phrase "a law of the Commonwealth relating to criminal matters" is stated to encompass the Crimes Act itself, without doubt a federal law providing for federal criminal matters. Why, then, should "criminal matters" be read, exceptionally, to extend to foreign criminal matters? Or to the "criminal matters" of a foreign "extradition country"? The statutory context and the general canons of construction argue for the narrower meaning. Whereas legislation dealing with extradition to Australia for an offence against a law of the Commonwealth might attract a provision such as s 4AAA, each of the appellants here is the subject of an application by a foreign "extradition country". Section 19 of the Act deals with "extradition offences" committed against the laws of such countries, and therefore with those countries' "criminal matters". Kirby Whilst this point of construction is more disputable than the "contrary intention" point, an appropriately strict reading of s 4AAA demonstrates that the section is not applicable here. Federal statutory sleight of hand: I reach the third reason. I have earlier referred to the argument based on s 4AAA as an instance of attempted federal sleight of hand. By this I mean that it reflects an endeavour of the Federal Parliament, by the enactment of generally expressed provisions, to avoid serious constitutional problems by stating its commands in conflicting terms. Thus, whilst s 19 of the Act selects State "magistrates" eo nomine to perform magistrate-like functions affecting the liberty of persons subject to extradition orders, s 4AAA allegedly seeks to propound the notion that the dutiful office- holders so selected for such functions "need not accept the function or power conferred"107. They can, in effect, treat them as optional, voluntary, non- compulsory: as functions which they may or may not care to do. The argument that s 4AAA of the Crimes Act applies to s 19 defies the obvious scheme, purpose and intended operation of the Act. In the present context, it also reflects an unacceptable attempt by the Federal Parliament, wholly by the terms of its own legislation, unilaterally to escape the constitutional requirement of Commonwealth/State legislative mutuality. If it were to succeed, it would mean that, by introducing a fiction of voluntary or optional service, whilst relying on the actuality of dutiful performance of legal functions, the Federal Parliament could not only bypass the State Parliaments concerned. It could also, as a matter of law, bypass even executive "arrangements" between the Governor-General and the Governors. Such unilateralism is alien to the notion of federal governance implied in the Australian Constitution. This conclusion affords an additional reason for regarding s 4AAA as inapplicable in respect of the State judicial officers ("magistrates") in whom the Act reposes federal "functions" which those officers "shall" perform, if the Act is to be effective according to its tenor. A suggestion is made that any coercion that is imposed by s 19 of the Act is limited to coercion upon those magistrates who voluntarily and optionally accept the functions or powers conferred by that section. This is not an answer to the third point. Such persons are still (as they are required by the Act to be) "magistrates". Necessarily, they serve as such as part of the judiciary of the State concerned. There thus remains on the face of the federal statute an attempt by 107 Crimes Act, s 4AAA(3). Kirby federal law to impose on such high State office-holders federal "functions" assigned (as the appellants assert) without the authority of enacted State law. If State legislative consent is constitutionally required for such a deployment of State magistrates, it cannot be avoided or circumvented by the unilateral federal device attempted in s 4AAA. If the section directly endeavoured to remove altogether the need for State law authorising such a deployment (voluntary or obligatory), it would be contrary to the Constitution. The section would be read down to avoid such an operation108. So confined, the section does not perform the task assigned to it by the majority in this Court. We should flatly reject such a disingenuous argument109. Constitutional issues remain: It follows that it is necessary for me to consider the remaining issues argued by the appellants. The constitutional issues: requirement of State legislative approval Dualist federalism: The starting point for an appreciation of the need for State legislative approval of the vesting by the law of another polity (the Commonwealth) of "functions" to be exercised by State statutory office-holders ("magistrates") is a recognition that the Australian Constitution creates a "federation of a dualist kind"110. The Commonwealth of Australia is a federation comprising, relevantly, "a central government and a number of State governments separately organized"111. This feature of the nation's political arrangements is at once familiar, self-evident and vital. It must be given effect by this Court. In Re Wakim; Ex parte McNally112, Gummow and Hayne JJ acknowledged the part that cooperation between the component parts of the federation can play. But they emphasised, correctly, that113: 108 Acts Interpretation Act 1901 (Cth), s 15A. 109 cf above these reasons at [85]. 110 Saunders, "Administrative Law and Relations Between Governments: Australia and Europe Compared", (2000) 28 Federal Law Review 263 at 290 cited Re Australian Securities and Investments Commission; Ex parte Edensor Nominees Pty Ltd (2001) 204 CLR 559 at 572 [12]; [2001] HCA 1. 111 Melbourne Corporation v The Commonwealth (1947) 74 CLR 31 at 82; [1947] HCA 26; cf Austin v The Commonwealth (2003) 215 CLR 185 at 246 [115]; [2003] HCA 3. 112 (1999) 198 CLR 511; [1999] HCA 27. Kirby "[N]o amount of co-operation can supply power where none exists. To hold to the contrary would be to hold that the Parliaments of the Commonwealth and the States could, by co-operative legislation, effectively amend the Constitution by giving to the Commonwealth power that the Constitution does not give it." A consistent the history of the line of decisions: Throughout Commonwealth, in a series of well-known cases, this Court has upheld a limitation on the power of the Federal Parliament to impose administrative "functions" on State office-holders unilaterally. Thus, in The Commonwealth v New South Wales114, the Court invalidated a provision of federal law that had purported to impose on a State Registrar of Titles a duty to register land compulsorily acquired by the Commonwealth. In his reasons, Isaacs J, by reference to general principles of the Constitution, explained why such a provision was ultra vires the federal power115: "[The section] is a command to a State official as such in the performance of his State functions to disregard the conditions of his statutory authority and to act in accordance with Commonwealth directions. His action is a State service, not an individual service. [The section] attempts to create, not a new individual duty on the part of an inhabitant of the Commonwealth, but a new State governmental duty towards the Commonwealth. In the circumstances here appearing, that is not warranted by any provision of the Constitution, and the attempt fails." At the height of the Second World War, this Court upheld as valid the Income Tax (War-time Arrangements) Act 1942 (Cth), which authorised the Federal Treasurer, by notice to the State Treasurer, to "bring about the temporary transfer to the Public Service of the Commonwealth of any specified officers of the State service who have been engaged in duties [of collecting taxes]"116. A majority, drawing on the defence power in the Constitution117, emphasised the 113 (1999) 198 CLR 511 at 577 [113]. 114 (1923) 33 CLR 1; [1923] HCA 34. 115 (1923) 33 CLR 1 at 54. 116 South Australia v The Commonwealth (Uniform Tax Case No 1) (1942) 65 CLR 373 at 406; [1942] HCA 14. 117 Constitution, s 51(vi). Kirby particular needs of national defence at that time118. Latham CJ, who dissented, observed119: "Apart from the defence power it would hardly be argued that the Commonwealth could, as it were, forcibly seize a State department, its personnel, accommodation and equipment, under a law specifically directed to this object." The federal law concerned went far beyond giving effect to a cooperative arrangement between officers of the executive government. It involved the imposition of a federal statutory duty on a State employee without counterpart State legal authority. Only the defence power, and then only for the wartime period, was held sufficient to sustain the constitutional validity of such an imposition. In Melbourne Corporation v The Commonwealth120, Dixon J explained the limitations inherent in the Constitution that restrict unilateral federal attempts to impose "a particular disability or burden upon an operation or activity of a State, and more especially upon the execution of its constitutional powers"121. With the type of problem later to emerge in Aston in mind, Dixon J said122: "[T]he efficacy of the system logically demands that, unless a given legislative power appears from its content, context or subject matter so to intend, it should not be understood as authorizing the Commonwealth to make a law aimed at the restriction or control of a State in the exercise of its executive authority." The extension of this principle to State judicial office-holders was recognised in Queen Victoria Memorial Hospital v Thornton123. Drawing a negative inference from the explicit power in s 77(iii) of the Constitution, by which the Federal Parliament may "[invest] any court of a State with federal jurisdiction", this Court made it plain that it was not competent for a federal law, 118 (1942) 65 CLR 373 at 437, 458-459, 468-469. 119 (1942) 65 CLR 373 at 431. 120 (1947) 74 CLR 31. 121 (1947) 74 CLR 31 at 79. 122 (1947) 74 CLR 31 at 83. 123 (1953) 87 CLR 144. Kirby of itself, to call upon a State court "to perform a function which … is of a non- judicial character"124. In Queensland Electricity Commission v The Commonwealth125, Gibbs CJ made clear what was implicit in the foregoing decisional authority, pointing out that126: "[T]here is no reason to limit the doctrine to laws which interfere only with the executive power of a State. A Commonwealth law which is directed at the exercise by a State of any of its governmental powers – legislative, executive or judicial – will fall within the ban." In the same case, Brennan J explained the "ban" by reference to the text of the Constitution127: "The independence of the States in exercising their powers, implicit in s 106 of the Constitution, and the binding effect of Commonwealth law upon them is thus reconciled". The role of the canons of constitutional interpretation in evaluating intrusions of powers within a federation was recognised by Brennan J in The Queen v Duncan; Ex parte Australian Iron and Steel Pty Ltd128: "[A]n attempt by a State Act to vest similar State powers in the same [federal] tribunal would fail – not because of a constitutional incapacity in a Commonwealth tribunal to have and to exercise State power, but because the Commonwealth Act would be construed as requiring the tribunal to have and to exercise only such powers as the Commonwealth Parliament had chosen to vest in it." This principle was, in turn, applied in Re Cram; Ex parte NSW Colliery Proprietors' Association Ltd129. That was a decision concerning the Coal Industry Tribunal created by "mirror" or counterpart federal and State legislation. 124 (1953) 87 CLR 144 at 151. 125 (1985) 159 CLR 192; [1985] HCA 56. 126 (1985) 159 CLR 192 at 207. 127 (1985) 159 CLR 192 at 235. 128 (1983) 158 CLR 535 at 579; [1983] HCA 29. 129 (1987) 163 CLR 117; [1987] HCA 28. Kirby Crucial to the validity of such a legislative endeavour was the avoidance of unilateral imposition of functions and the enactment of complementary laws. In words directly applicable to the present proceedings, the entire Court, referring to the passage from Duncan quoted above, said130: "While it is unnecessary to investigate the matter here, it may well be, of course, that precisely the same comments could be made, mutatis mutandis, in relation to an attempt by a Commonwealth Act to confer federal duties upon a State-constituted non-judicial tribunal, which was not expressly or impliedly authorized to exercise them by State law." Analogous principles have been recognised in several more recent decisions including Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority131 and R v Hughes132. In Hughes, the joint reasons expressed succinctly the proposition for the counterpart of which the appellants contended in these proceedings133: "[A] State by its laws cannot unilaterally invest functions under that law in officers of the Commonwealth". In the same case, I remarked134: (such as the Commonwealth "An officer or authority of the Commonwealth DPP) would ordinarily be immune from the imposition, by a law of a State or Territory, of functions and powers distinct from, or additional to, those imposed by federal law. Effective immunity from such imposition arises from several sources. These include the provisions of the Constitution itself; the implication derived from the Constitution that the laws of the States and self-governing Territories may not impermissibly restrict or modify the capability of the Commonwealth to perform its functions as such; and the principle of statutory construction that the functions of a donee of legislative power will ordinarily be taken as confined to those relevant to the polity within which the officer or authority concerned operates." 130 (1987) 163 CLR 117 at 128. 131 (1997) 190 CLR 410 at 443, 507-508; [1997] HCA 36. 132 (2000) 202 CLR 535; [2000] HCA 22. 133 (2000) 202 CLR 535 at 553 [31]. 134 (2000) 202 CLR 535 at 569 [75] (footnotes omitted). Kirby Over the history of the Commonwealth, and of this Court, there have been many variations on the same theme. They have been addressed, for example, to the invalidity of federal laws that discriminate against the States or single them out to "curtail their freedom in the execution of their constitutional powers"135. In the United States of America, in recent years, a principle forbidding "conscription" of State officers and employees has been developed by the Supreme Court. That principle was expressed in Printz v United States136, which was referred to in both the majority and minority reasons in Austin v The Commonwealth137. It is unnecessary to consider Austin here because it was not part of the appellants' case either that particular States had been "singled out" for discriminatory federal imposition or that the federal Act in question here amounted to "conscription" of State officials138. The appellants' objection to the Act in these appeals was simple. It was that the Act, as a federal law, purported to impose "functions" on State office- holders (so named as "magistrates") without the approval of the State Parliament that created their offices and provided for the functions and duties of office. Without "mirror" or counterpart State laws, the imposition of such "functions" by federal law alone could not be valid. In light of the long series of decisions of this Court that I have collected, the constitutional proposition advanced by the appellants is plainly right. Performing its functions, protective of the constitutional design and purpose, it is the simple duty of this Court to uphold their submission. Particular constitutional powers: In Melbourne Corporation, Dixon J acknowledged that, occasionally, a particular head of federal legislative power might, of its nature, be sufficient to sustain a unilateral imposition of federal functions on State office-holders, or some of them139. This explains the apparently exceptional use of the defence power in wartime140, and the supplementation of the powers of State court officers under service and execution 135 Austin (2003) 215 CLR 185 at 251 [130]. 136 521 US 898 (1997). See Jackson, "Federalism and the Uses and Limits of Law: Printz and Principle?", (1998) 111 Harvard Law Review 2180. 137 (2003) 215 CLR 185 at 212 [17], 219 [27], 268 [178], 298 [273]. 138 cf Austin (2003) 215 CLR 185 at 298 [273]. See also Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 at 233. 139 (1947) 74 CLR 31 at 81. 140 Uniform Tax Case (No 1) (1942) 65 CLR 373. Kirby of process laws141. It also explains why, in some cases, a federal law of general application may be held to stand outside the constitutional conception142. Such was the view I accepted concerning the federal taxation law burdening judicial pensions which the Court invalidated in Austin143. My opinion did not prevail. Every other member of the Court in Austin held that the federal law was invalid. How much stronger is the present case, where the office- holders, who are members of the State judiciaries, are not simply swept up in a federal taxing law of general application but are named by their office in the federal Act and then have additional and federal administrative functions imposed on them eo nomine? A consistent application of the majority approach in Austin requires a resistance to the unilateral federal imposition of specific functions attempted in these appeals. Whatever might conceivably be the position in respect of minor State employees deployed on integrated and cooperative federal functions by consent of the executive government of the State concerned, the position of State magistrates is surely different. Magistrates are necessarily members of the judicial arm of a State government. Even when performing administrative functions, or functions as personae designatae, where they are chosen to do so as "magistrates" they inescapably retain the general character of their offices as such. Inferentially, they perform their functions in State facilities, using State resources, assisted by State officials, performing their functions in State time, by inference paid for in this respect by salaries and allowances drawn on the State Treasury. The constitutional requirement that the legal supplementation of the duties of State magistrates be authorised by State law is therefore unsurprising. In every sense, magistrates are in fact amongst the most senior office-holders of the State. Their deployment, as such, is provided for by State law enacted by the State Parliament enjoying the relevant State constitutional authority to do so144. Negative implication of s 77(iii): A final reinforcement of the foregoing conclusions may be found in the express provision in s 77(iii) of the Constitution for the compulsory imposition on State magistrates, as members of State courts, of federal jurisdiction as expressed in laws enacted solely by the Federal 141 Aston v Irvine (1955) 92 CLR 353. 142 See eg Western Australia v The Commonwealth (Native Title Act Case) (1995) 183 CLR 373 at 477-478; [1995] HCA 47. 143 (2003) 215 CLR 185 at 307-308 [300]. 144 The Constitution, s 107. Kirby Parliament. The fact that, in this particular respect, the Constitution acknowledges expressly a federal power of imposition of functions gives rise to a negative implication where the federal law in question involves the imposition of administrative functions on the very same person, even if in a different capacity. It is true (as I have often acknowledged) that care needs to be exercised in applying the expressio unius principle to the elucidation of the meaning of the sparse language of the federal Constitution145. However, one of the steps in the reasoning that led to the majority conclusion in Re Wakim146 was the negative implication arising from the express words of s 77(iii). That paragraph of the Constitution had no counterpart authorising the conferral of State jurisdiction on federal courts. Consistency by this Court in the deployment of the negative implication to which this gave rise in the present proceedings favours the conclusion for which the appellants argue. Government agreement insufficient: All this aside, is it sufficient that agreement in the present case was "arranged" between the Governor-General and the State Governors concerned, acting on the advice of the respective executive governments of the Commonwealth and the States of Western Australia and New South Wales? The sufficiency of the executive agreement was strongly defended by the Commonwealth. Plainly, s 46 of the Act was drafted on the assumption of such sufficiency. Given this, it is unsurprising that explicit attention does not appear to have been given to the enactment of counterpart State law by the organ of the State empowered to make such law, namely the State Parliament as envisaged by s 107 of the Constitution. Only when the present challenge was brought was the search for a State legislative approval joined in an energetic way. It would be contrary to fundamental principle for the State executive government to presume to a power, under its own authority, to vary or alter, in a material way, the "functions" of State magistrates, as established by the State Parliament. Yet that is what s 46 of the Act seems to envisage in this context. Insufficiency of "regal authority": The principle that the executive government cannot unilaterally vary provisions enacted by the State Parliament is part of the basic historical underpinning of our Constitution. It was inherited 145 eg Ruhani v Director of Police (2005) 222 CLR 489 at 546-547 [180]; [2005] HCA 42 citing Houssein v Under Secretary of Industrial Relations and Technology (NSW) (1982) 148 CLR 88 at 94; [1982] HCA 2. 146 (1999) 198 CLR 511 at 540 [2] per Gleeson CJ, 557 [56] per McHugh J, 581 [123]- [124] per Gummow and Hayne JJ. Kirby from Great Britain when our Constitution was adopted. The use of "regal authority", so far as it pretended to a power of suspending or dispensing with enacted laws, or the execution of those laws, without consent of Parliament, was declared illegal in the first section of the original Bill of Rights147. In contemporary Australian circumstances, "regal authority" is equivalent to executive power148. It was the claim of James II to an "uncertain power of dispensation"149 that led to the Trial of the Seven Bishops in England in 1688150. The verdicts of the jury in that trial, acquitting the bishops, have been taken to endorse the view of the Constitution expressed by the judges who summed up against the propositions of the Crown. Within months of the verdicts, there followed the flight of the King, a legal revolution, the passing of the British Crown to King William III and Queen Mary II and the new constitutional settlement expressed by Parliament in the Bill of Rights, accepted in the United Kingdom by the new monarchs and by their successors. Since that time it has been clear doctrine in countries of our constitutional tradition that the executive may not, without authority of Parliament, revoke, ignore or purport to vary an enactment of Parliament. This rule has a textual foundation in the Australian Constitution, being its provisions establishing the Federal and State Parliaments which, by the language and postulates of the Constitution, are accountable to the electors. In so far as, by any agreement between the Governor-General and a Governor of a State, the executive government of a State pretends to a power to ignore, vary or modify an enactment of the State Parliament governing State magistrates, a fundamental postulate of the Constitution is offended. No agreement between the executive government of the Commonwealth and of a State would be valid if it purported to ignore, vary or modify a State law duly enacted. 147 The Bill of Rights of 1689 (1 W and M sess 2 c 2). See Halsbury's Laws of England, 4th ed (1974), vol 8 at 597 [923]; cf Mann v O'Neill (1997) 191 CLR 204 at 266. The Bill of Rights is expressly adopted in New South Wales under s 6 of the Imperial Acts Application Act 1969 (NSW). For the position in Western Australia, see Law Reform Commission of Western Australia, United Kingdom Statutes In Force in Western Australia, Report No 75, (1994) at 56-57. 148 cf Fitzgerald v Muldoon [1976] 2 NZLR 615 at 622. 149 Maitland, The Constitutional History of England, (1955) at 303. 150 The King v Sancroft (Trial of the Seven Bishops) (1688) 12 St Tr 183. See also (1688) 3 Mod 212 [87 ER 136]. Kirby In these proceedings, both Western Australia and New South Wales relied on particular State laws as authorising the executive government of the State to agree to the "arrangement" contemplated by s 46 of the Act. Western Australia specifically accepted the submission of the appellants that the State approval in question had to be legislative, as the State executive government had no power of itself to alter or detract from enacted State legislation. Indeed, Western Australia acknowledged that "the correctness of that proposition cannot be doubted"151. In this, its submission was accurate. Conclusion: parliamentary consent? The result of this analysis is to sustain the constitutional proposition advanced by the appellants. Neither federal legislation on its own nor the "arrangement" agreed between the executive governments of the Commonwealth and the States could be effective to ignore, vary or modify the functions conferred on State magistrates by State statute law establishing the State office of "magistrate" and providing for the duties and functions of that office. To be effective, any variation, modification or supplementation had also to be authorised by, or under, enacted State law. This conclusion leads to the remaining issue, being whether the laws of Western Australia and New South Wales said to signal such State parliamentary consent do in fact so provide with sufficient clarity. The State statutory consent issue Western Australia: In Western Australia, statutory provisions: "magistrates" are members of the Magistrates Court of Western Australia, established by the WA Act. The Court is a court of record152. It may be constituted by one magistrate153. The functions of magistrates are provided for in s 6 of the WA Act. That section reads, relevantly: 151 Western Australia's submissions stated that Parliament might, by its laws, empower the executive to alter such laws, for example by a "Henry VIII clause" allowing amendment by delegated legislation (citing Permanent Trustee (2004) 220 CLR 388 at 420-421 [75]-[78]). They also noted that it was necessary in each case, by examination of State law, to ascertain whether that law forbade the alleged variation or modification of the State law. 152 WA Act, s 4(2). 153 WA Act, s 7(1). Kirby "(1) A magistrate has the functions imposed or conferred on a magistrate by laws that apply in Western Australia, including this Act and other written laws. (3) With the Governor's approval, a magistrate – (a) may hold concurrently another public or judicial office or appointment, including an office or appointment made under the law of another place; and (b) may perform other public functions concurrently with those of a magistrate. (4) A magistrate must not be appointed to an office that does not include any judicial functions without his or her consent." Section 25 of the WA Act empowers the Chief Magistrate to specify which administrative duties a magistrate is to perform and where, when and at what times he or she is to do so. A magistrate is required to ("must") comply with the Chief Magistrate's directions in this regard154. WA reliance on s 6(3)(b): No explicit approval is given in the WA Act for acceptance by magistrates of Western Australia of the "functions" purportedly conferred on them by ss 12 and 19 of the Act. To find such authority, it is necessary to perform upon the language of s 6 of the WA Act a highly creative act of interpretation. This is precisely what the primary judge and the Full Federal Court did, considering s 6(3)(b) to afford the requisite approval155. In my view that was an erroneous holding: The reference to the performance of "other public functions", in a statute of the Parliament of Western Australia is, on the face of things, a reference only to "other public functions" of that State and not to those of another polity156. This interpretation follows from the general principle that one does not expect to see one Parliament providing for the performance of functions by its office holders other than those the subject of its own laws; 154 WA Act, s 25(3). 155 Zentai (2006) 153 FCR 104 at 112-114 [32]-[39]; Zentai (2007) 157 FCR 585 at 156 Hughes (2000) 202 CLR 535 at 569 [75]. Kirby The fact that par (b) refers to Western Australian "public functions" is also confirmed by the Explanatory Memorandum circulated with the Bill. It explained that s 6(3)(b) of the WA Act was similar in intent to s 34 of the Justices Act 1902 (WA), which the WA Act replaced. By s 34 of that earlier Act, it had been provided that a magistrate "may discharge the duties of clerk of petty sessions". Obviously, that was a State "public function"; In any case, s 19 of the Act does not purport to confer federal functions on a State magistrate to be performed "concurrently with those of a magistrate". The function imposed by the Act is evidently separate and different from State functions and not, as such, conferred on the court of which the magistrate is a member. It is not, therefore, a public function to be performed "concurrently with [the functions] of a magistrate". It is an additional and distinct function. It follows that s 6(3)(b) does not address the imposition of functions on a magistrate by s 19; and The comprehensiveness of the statement of functions of a magistrate under the WA Act is confirmed not only by commonsense and the detailed provisions of that Act but also by the universal and unqualified entitlement of the Chief Magistrate, under s 25(1), to assign duties to each magistrate by giving directions with which the magistrate must comply. There is no mention in s 25, or anywhere else in the WA Act, of the performance by a magistrate of additional, distinct and different federal administrative "functions". The notion that a "magistrate" may perform those functions as a volunteer, personally and optionally, does not fit comfortably with the explicit identification of the duties of a "magistrate" of the State and the provisions enacted for the deployment of magistrates upon such duties by the Chief Magistrate. WA reliance on s 6(1): Although not earlier relied on, Western Australia placed much emphasis in this Court on the suggested function of s 6(1) of the WA Act as a source of State legislative consent to the Governor's "arrangement" with the Governor-General under s 46 of the federal Act. The State argued that the reference to "other written laws" in s 6(1) included a reference to written laws of the Commonwealth and hence to s 19 of the Act. This belated argument should also be rejected: The reference to "other written laws", given the context, is a reference to Imperial enactments still applicable in Western Australia. So understood, s 6(1) has clear work to perform without the need to import federal functions for that purpose; This approach to the meaning of "written laws" is confirmed by the Interpretation Act 1984 (WA). Under s 5, "written law" is stated to Kirby encompass "all Acts for the time being in force". "Act" refers to laws of Western Australia, or laws made "by any Council previously having authority or power to pass laws" in that State. The term "Commonwealth Act" is separately defined to mean "an Act passed by the Parliament of the Commonwealth". Given this, it seems clear that the general term "written law", used in s 6(1) of the WA Act, was not intended to refer to "Commonwealth Acts" applicable in Western Australia. Had this been intended, a mode of expression conformable with the Interpretation Act would have been used; It would be extremely surprising if a reference to laws that apply in Western Australia were intended to pick up, without qualification, the laws of another polity, in particular given the explicit recognition in s 6(3) of the WA Act of the need for the State Governor's approval for a magistrate to hold a concurrent public or judicial office or appointment under the law of another place. It is necessary to read s 6(1) alongside s 6(3) so as to ascertain the separate purposes for which each has been enacted; and The reliance on s 6(1) of the WA Act is misconceived. This conclusion will cause no real surprise because it is obvious that the Commonwealth and the State proceeded on the assumption, expressly affirmed in s 46 of the federal Act, that agreement between the executive government was all that was legally required to vary, modify or supplement the State law. That assumption was constitutionally incorrect. Reliance on s 6(3)(a): Although Western Australia itself disclaimed the argument, the Commonwealth (by this time clutching at straws) indicated its reliance, if need be, on s 6(3)(a) of the WA Act to authorise the Governor's "arrangement" with the Governor-General and to sustain the imposition of extraneous non-State duties on a State magistrate. It is sufficient to say, in answer to this proposition, that a law of the Commonwealth is not, in relation to Western Australia, a "law of another place". The Commonwealth is not "another place". It exists throughout Western Australia and is not "other" in relation to the States. Conclusion: no WA approval: The result is that neither in s 6(3)(b), relied on by the Full Court, nor in any other provision of the WA Act or any other law of the Parliament of Western Australia to which reference was made, was approval given by the State legislature to vary, modify or supplement the duties of persons holding office as "magistrates" under and in accordance with the WA Act. In the absence of such approval, it was not competent for the executive government to advise the Governor to execute the arrangement with the Governor-General. No such arrangement could be lawfully made to vary, Kirby modify or supplement the State law. In accordance with the constitutional principle previously explained157, such State approval was a precondition to the imposition upon State magistrates of federal functions, such as those stated in s 19 of the Act. It follows that the second respondents in the proceedings of Messrs O'Donoghue and Zentai had no lawful power or authority to perform the federal "functions" purportedly conferred on them by s 19 of the Act. Those appellants are therefore entitled to the relief they seek. New South Wales: statutory provisions: The provision of New South Wales law relied on to afford legislative approval for the inter-governmental agreement and the performance by State magistrates in that State of federal functions under the Act, was s 23 of the NSW Act. Relevantly, that section provides: "(1) Except as provided by this section, a Magistrate shall devote the whole of the Magistrate's time to the duties of the Magistrate's office. (2) A person may, with the approval of the Governor (which approval the Governor is hereby authorised to grant), hold and exercise the functions of the office of Magistrate and another office or appointment. Subsection (1) does not prevent a person from holding office as and exercising the functions of a Magistrate on a part-time basis, but such a person must not, while so holding office: accept or continue to hold or discharge the duties of or be employed in any paid office in connection with any commercial business, or engage in or continue in the private practice of any profession, occupation or into any employment, whether remunerated or not, with any person so engaged." trade, or enter 157 See above at [183]. Kirby In New South Wales, magistrates are members of the Local Court of the State, established by the NSW Act158. Under s 8, a court shall be constituted by a magistrate sitting alone. A magistrate holds public office of the State and is appointed by the Governor by commission under the public seal of the State159. A person's appointment as a magistrate "is taken to be an appointment on a full- time basis unless the appointment is expressed, in the commission by which the person was appointed, to be on a part-time basis"160. By s 52 of the Constitution Act 1902 (NSW), the office of magistrate of the Local Court is amongst those defined as a "judicial office" for the purposes of Pt 9 of that Act. By s 53, within Pt 9, no holder of a judicial office may be removed from the office except by the constitutional procedure of an address from both Houses of Parliament seeking removal on the ground of proved misbehaviour or incapacity. Holders of judicial office in New South Wales have protection against the abolition by legislation of their office161. Whether or not such provisions are "entrenched" and require approval at referendum for their alteration or repeal162 does not need to be determined here. Clearly, in New South Wales the office of "magistrate" is one of very high constitutional importance in terms of the government of the State. For the deployment of such "magistrates" upon duties of office, including administrative, a requirement for the consent of the State Parliament would not be surprising. Indifference or lack of involvement would be astonishing. Supposed NSW State approval: The only legislation identified in the Full Court as constituting approval by the New South Wales Parliament of the inter- governmental "arrangement" for the deployment of State magistrates on "functions" provided for in s 19 of the Act was s 23(2) of the NSW Act. Tamberlin J held that the expression there appearing, "another office or appointment", was "broad enough to cover the functions provided for in s 19(1) [of the Act]"163. In my view, with respect, this conclusion was wrong: 158 NSW Act, s 6. 159 NSW Act, s 12(1). 160 NSW Act, s 12(5). 161 Constitution Act 1902 (NSW), s 56. 162 Bruce v Cole (1998) 45 NSWLR 163 at 166, 203; cf Twomey, The Constitution of New South Wales, (2004) at 736-737. 163 (2007) 161 FCR 220 at 234 [62]. Kirby First, the reference to "another office or appointment" is, in accordance with established canons of construction, to another office or appointment in and of New South Wales. This conclusion finds support in s 12(1) of the Interpretation Act 1987 (NSW) (a reinforcing provision not present in the statute law of Western Australia). The effect of that provision is that a reference, in a State law, to an "office" or "officer", is presumed to mean an office or officer "in and for" the State164. Whilst the presumption may be displaced by a "contrary intention"165, there must be some "positive reason which supports"166 such a result. There is no such reason here. Given that the office of magistrate is specially a constitutionally protected "judicial office" in New South Wales, it is entirely unsurprising that the State Parliament would exhibit an intention to confine the exercise of the functions and powers of a magistrate only to those expressly provided for by State law. The reservation of such matters to State law involves nothing more than affording appropriate constitutional respect to the State Parliament concerned; The reference in s 23(2) of the NSW Act to the ability to "hold" another "office or appointment" confirms what is otherwise evident. Thus, a magistrate might be "appointed" to another State tribunal167. On the face of things, this is the kind of separate "office or appointment" contemplated by s 23(2). It is distinguishable from the performance of federal "functions" under s 19 of the Act; The reference to a person holding the functions of the office of magistrate and another office suggests the contemplation of a different office from that of "magistrate". Yet the whole point of s 19 of the Act is to enlist State office-holders who are "magistrates", inferentially because of the very integrity, experience and skills inherent in their office; and The inaptness of s 23(2) of the NSW Act to perform the functions propounded for it should cause no surprise. Clearly enough, those who 164 See Grannall v C Geo Kellaway and Sons Pty Ltd (1955) 93 CLR 36 at 52-53; [1955] HCA 5; Tobacco Leaf Marketing Board of NSW v Corte [1983] 3 NSWLR 165 Interpretation Act 1987 (NSW), s 5(2). 166 Birmingham University and Epsom College v Federal Commissioner of Taxation (1938) 60 CLR 572 at 576; [1938] HCA 57. 167 As for example under s 13 of the Administrative Decisions Tribunal Act 1997 (NSW), or s 7 of the Consumer, Trader and Tenancy Tribunal Act 2001 (NSW). Kirby drafted s 46 of the Act thought that State legislation was unnecessary. For the reasons already given, that assumption was constitutionally erroneous. Conclusions: no NSW approval: It follows that, as in Western Australia, no approval on the part of the New South Wales Parliament for the variation, modification or supplementation of the duties of magistrates under the NSW Act has been shown. There is therefore no consent by State law for the performance of those duties. It was not competent to the executive government to vary the duties stated in the NSW Act. Nor was it competent to the Federal Parliament unilaterally to impose those duties without "mirror" or "counterpart" legislation of the State Parliament giving approval to that course. It follows that the applicant, Mr Williams, has made good his attack on the validity of the purported performance by a New South Wales magistrate of the functions provided under s 19 of the Act. He too is entitled to the relief sought. Towards sensible constitutional outcomes A critique of criticisms: It might be said that the points raised by the appellants are technical, having nothing to do with the factual merits of the several claims of the extradition countries for their extradition. However, where "technical" objections raise important constitutional principles, they must be resolved conformably with the Constitution. At stake is observance of the rule of law and obedience of all affected office-holders to the requirements of the Constitution. If this Court does not uphold the basic principles of the Constitution, to whom can the people of the Commonwealth look for the discharge of that function? It might further be said that the Act and the impugned inter-governmental arrangements are an example of sensible cooperation within the Australian federation, and should be upheld for that reason. However, no amount of cooperation between governments can cure a demonstrated defect in obedience to constitutional requirements168. The true "cooperation" required in this case was a form of intergovernmental cooperation involving the respective parliaments of the States concerned. To the argument that, for more than a century, State magistrates have been involved in extradition hearings, and that this sensible arrangement should not be disturbed, there are several answers. For most of the 20th century, such magistrates performed their functions under an Imperial statute169 or a federal Act 168 Re Wakim (1999) 198 CLR 511 at 576-577 [113]. 169 Extradition Act 1870 (UK); Extradition Act 1895 (UK). Kirby giving it effect in Australia170. In recent years, the federal law has changed, as has the role of magistrates under that law171. When a specific challenge to the operation of present law is brought, this Court cannot disclaim its functions because the challenge was not raised earlier. Nor do federal constitutional requirements meekly assumptions, which earlier characteristically were untroubled by the features of federal governance here in question. Imperial observe Any suggestion that the need to enact "mirror" or "counterpart" legislation is an unnecessary burden on inter-federal cooperation must be firmly rejected. There are countless examples of such legislation172. When needed, such legislation can be quickly proposed to the State Parliament concerned and generally enacted without delay. That process observes the dignity and respect due to the State Parliaments under the Constitution. Even more importantly, it respects the federal character of Australia's constitutional arrangements and the accountability of the Parliaments concerned to the electors both in the Commonwealth and the States. This Court should uphold the status and role of State Parliaments in our constitutional arrangements. It should not sanction laws that ignore them. A sensible outcome: Had the Western Australian and New South Wales Governments proposed amendments to the WA Act and the NSW Act to permit State magistrates to perform federal functions, it is extremely doubtful that such amendments would have been rejected. However that may be, approval or disapproval was a matter for the Parliaments concerned. Those Parliaments should not have been bypassed leading to the unedifying attempt to squeeze the requisite State permission out of statutory language intended for other purposes, or, when this proved unsustainable, to resort to the unconvincing statutory fiction that the magistrates were no more than personal volunteers, although deploying powers that impinged directly on 170 Extradition Act 1903 (Cth). See also Extradition Act 1933 (Cth). 171 See Extradition (Foreign States) Act 1966 (Cth); Extradition (Commonwealth Countries) Act 1966 (Cth); Extradition (Repeal and Consequential Provisions) Act 1988 (Cth). 172 Twomey, The Constitution of New South Wales, (2004) at 840-843, referring to, for example, Air Navigation Act 1938 (NSW), Competition Policy Reform (New South Wales) Act 1995 (NSW), Australian Crime Commission (New South Wales) Act 2003 (NSW) and so forth. Kirby the liberties of people such as the appellants. As the majority reasons of four Justices said in Ha v New South Wales173: "When a constitutional limitation or restriction on power is relied on to invalidate a law, the effect of the law in and upon the facts and circumstances to which it relates – its practical operation – must be examined as well as its terms in order to ensure that the limitation or restriction is not circumvented by mere drafting devices." Inter-governmental and inter-jurisdictional cooperation is often desirable. However, such cooperation must be attained within the framework of the Constitution, under which the Parliaments of the States (representing all of the State electors) enjoy functions and powers that cannot be exercised solely by executive agreements without specific legislative authority174. An insistence on this attribute of federal "dualism" is not only necessary because of the terms of the constitutional text. It is also more likely to achieve the dual objectives of federation: cooperation upon agreed matters under appropriate terms and conditions and diversity, disagreement and experimentation where that is lawful and appropriate175. In the present cases, it can hardly be said that making the required amendments to the WA Act and the NSW Act would have been a great burden. However, had it been done, it would have meant that the State Parliament, which created the office of magistrate, would have had the opportunity and duty to address its attention to, and give its assent for, the imposition of federal 173 (1997) 189 CLR 465 at 498 per Brennan CJ, McHugh, Gummow and Kirby JJ; [1997] HCA 34. 174 Saunders, "A New Direction for Intergovernmental Arrangements", (2001) 12 Public Law Review 274 at 279-281; Saunders, "Intergovernmental agreements and the executive power", (2005) 16 Public Law Review 294 at 310. See also Saunders, "The Impact of Intergovernmental Arrangements on Parliaments", (1984) 9 Legislative Studies Newsletter 22; Saunders, "Administrative Law and Relations Between Governments: Australia and Europe Compared", (2000) 28 Federal Law Review 263 at 290; Hill, "R v Hughes and the Future of Co-Operative Legislative Schemes", (2000) 24 Melbourne University Law Review 478 at 493. 175 See eg Twomey, The Constitution of New South Wales, (2004) at 842, referring to Federal and State legislation concerning the practice of human cloning and the use of human embryos for research. Differing legislation was enacted in the States, following which, after further debate, the federal legislation was amended. See Prohibition of Human Cloning Act 2002 (Cth) (as enacted); Research Involving Human Embryos Act 2002 (Cth); Prohibition of Human Cloning for Reproduction and the Regulation of Human Embryo Research Amendment Act 2006 (Cth). Kirby functions. Perhaps doing so would have called specific notice to the need for appropriate financial or other contributions to be made by the Commonwealth in respect of the federal component of the work of the State magistrates concerned. Moreover, one could theoretically envisage the attempted imposition of some federal administrative functions upon State magistrates which, either because of their character or their burdens, the State Parliament might prefer not to accept. Upholding the Constitution consistently: This is the way, in such important matters, that the federal system of government operates in Australia. The appellants were correct to assert that clear State legislation was required for the imposition of the functions set out in s 19 of the Act. None was enacted. I can only repeat what Gummow and Hayne JJ said in this respect in Re Wakim176: "A federal structure of government involves the demarcation of powers and … this has been understood as placing upon a court such as this Court responsibility to construe the Constitution and to determine where the line falls in particular instances. The Court is entrusted with the preservation and application of constitutional distinctions. Were the Court to discard those distinctions, on the ground that at a particular time and to some minds they appear inconvenient or otherwise unsatisfactory, the Court not only would fail in its task but would exceed its authority." Orders The following orders should be made: In the appeal by Mr O'Donoghue and the appeal by Mr Zentai, order that each appeal be allowed; that, in each case, the order of the Full Court of the Federal Court of Australia be set aside; that in place of such order the appeal to the Federal Court be allowed; the order of the primary judge (Siopis J) be set aside; and in place of that order this Court should order that the second respondent in each proceeding be prohibited from conducting proceedings to determine whether the applicant is eligible for surrender for extradition pursuant to s 19 of the Extradition Act 1988 (Cth). The first respondent should pay the appellants' costs of the appeal to this Court and of the proceedings in the Federal Court. In the application by Mr Williams, special leave should be granted; the appeal should be treated as instituted, heard instanter and allowed and the orders of the Full Court of the Federal Court of Australia should be set aside. In place of those orders, this Court should order that the second respondents be restrained from hearing and determining any proceedings under s 19 of the Extradition Act 176 (1999) 198 CLR 511 at 569 [94]. Kirby 1988 (Cth) to decide whether Mr Williams is eligible for surrender to the United States of America. The first respondent should pay the costs of Mr Williams in this Court and in the Federal Court.

HIGH COURT OF AUSTRALIA MEMBERS OF THE YORTA YORTA ABORIGINAL COMMUNITY APPELLANT AND STATE OF VICTORIA & ORS RESPONDENTS Members of the Yorta Yorta Aboriginal Community v Victoria [2002] HCA 58 12 December 2002 Appeal dismissed with costs. ORDER On appeal from the Federal Court of Australia Representation: N J Young QC with K R Howie SC and T P Keely for the appellant (instructed G Griffith QC with H M Wright QC, M Sloss and S G E McLeish for the first respondents (instructed by Victorian Government Solicitor) V B Hughston SC with J A Waters for the second respondent (instructed by Crown Solicitor for the State of New South Wales) G E Hiley QC with G J Moloney for the first, third and fourth named third respondents (instructed by Suzanna Sheed & Associates) No appearance for the second, fifth, sixth, seventh and eighth named third respondents A C Neal with P G Willis for the fourth and fifth respondents (instructed by J G Thompson and Williams Love Lawyers) J E Curtis-Smith for the sixth respondents (instructed by Hargraves) No appearance for the seventh and eighth respondents B M Selway QC, Solicitor-General for the State of South Australia with J H Dnistrianski for the ninth respondent (instructed by Crown Solicitor for the State of South Australia) J Basten QC with R W Blowes for the tenth respondent (instructed by Chalk & Fitzgerald) Interveners: D M J Bennett QC, Solicitor-General of the Commonwealth of Australia with M A Perry intervening on behalf of the Attorney-General of the Commonwealth of Australia (instructed by Australian Government Solictor) B W Walker SC with S E Pritchard intervening on behalf of the Human Rights and Equal Opportunity Commission (instructed by Human Rights and Equal Opportunity Commission) M F Rynne intervening on behalf of the South West Aboriginal Land and Sea Council Aboriginal Corporation (instructed by South West Aboriginal Land and Sea Council Aboriginal Corporation) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Members of the Yorta Yorta Aboriginal Community v Victoria Aboriginals – Native title to land – Determination of native title – Native title rights and interests in s 223(1) Native Title Act 1993 (Cth) – Possessed under traditional laws acknowledged and traditional customs observed in s 223(1)(a). Aboriginals – Native title to land – Determination of native title – Consequences of sovereignty – Whether traditional laws and customs observed must originate in pre-sovereignty laws and customs – Effect of development of, or changes in, traditional laws and customs since sovereignty – Whether proof of continuous acknowledgment and observance of traditional laws and customs required – Effect of interruption to continuous acknowledgment and observance of substantially uninterrupted traditional acknowledgment and observance is sufficient – Whether traditional law and customs need only be presently acknowledged and observed – Whether continuous existence of claimant society required – Effect of cessation of claimant society on acknowledgment and observance of traditional laws and customs. laws and customs – Whether Aboriginals – Native title to land – Native title rights and interests – Section 223(1)(c) Native Title Act 1993 (Cth) – Meaning of rights and interests recognised by the common law of Australia – Whether there are common law requirements of native title. Aboriginals – Native title to land – Extinguishment of native title – Whether s 223 Native Title Act 1993 (Cth) incorporates notions of extinguishment of native title – Whether concepts of "abandonment" or "expiration" of native title can be applied. Aboriginals – Native title to land – Evidence – Proof – Oral and written testimony. Words and phrases – Traditional laws and customs – Traditional – Determination of native title – Native title rights and interests – Rights and interests recognised by the common law of Australia. Native Title Act 1993 (Cth), ss 223, 225. GLEESON CJ, GUMMOW AND HAYNE JJ. In February 1994, application was made to the Native Title Registrar for a determination of native title to land and waters in northern Victoria and southern New South Wales. Several areas of land and waters were claimed; all were said to be public lands and waters. For the most part, the areas claimed straddled the Murray River (from a point in the west near Cohuna to a point in the east near Howlong) or straddled the Goulburn River (from its junction with the Murray, south to a point near Murchison). In addition to those areas, a number of other areas were claimed. All the areas claimed lay within a more or less oval-shaped area bisected by the Murray River (measuring about 150 kilometres on its north-south axis and over 200 kilometres on its east-west axis) which was said to be traditional Yorta Yorta territory. The precise basis for fixing the boundaries of this oval-shaped area was later to be said by the trial judge in this matter not to have been established in evidence. The application was originally made in the name of an incorporated body, but later, eight named persons were substituted as applicants on behalf of the members of the Yorta Yorta Aboriginal community. Although the proceedings in this Court, and in the courts below, have described the claimant party simply as "Members of the Yorta Yorta Aboriginal community" it is convenient to refer to them as "the claimants" or "the appellants". Pursuant to the Native Title Act 1993 (Cth), as it stood at the relevant time, the application was accepted by the Native Title Registrar in May 1994, and in May 1995, under the then applicable provisions of that Act, the matter was referred to the Federal Court for decision. This was the first application for determination of native title to come on for trial after the enactment of the Native Title Act. It was tried between October 1996 and November 1998. Oral evidence was taken at trial from 201 witnesses; 48 witness statements were admitted into evidence without formal proof. The hearing occupied 114 days. After evidence had been completed, and the primary judge had reserved his decision, the Native Title Amendment Act 1998 (Cth) ("the 1998 Amendment Act") came into operation. The parties were invited to, and did, make submissions to the primary judge (Olney J) about the consequences of those amendments. It will be necessary to return to consider some of the changes made by that Act. On 18 December 1998, Olney J published his reasons for decision1 and made a determination of native title under the Native Title Act that: "Native title does not exist in relation to the areas of land and waters identified in Schedule D to Native Title Determination Application VN 94/1 accepted by the Native Title Registrar on 26 May 1994." From this determination the claimants appealed to the Full Court of the Federal Court. The Full Court, by majority (Branson and Katz JJ, Black CJ dissenting)2, dismissed the appeal. By special leave, the claimants now appeal to this Court. In order to understand the issues that fall for decision in this Court, it is necessary to begin with the statutory provisions from which those issues arise and to do so by reference first to what it was that the claimants sought. An application for determination of native title By their application, the claimants sought a determination of native title under the Native Title Act. The application which the claimants made, and the relief which they sought by that application, were both creatures of that Act. At the time the trial judge made his determination, s 225 of the Act provided that: "A determination of native title is a determination whether or not native title exists in relation to a particular area (the determination area) of land or waters and, if it does exist, a determination of: (a) who the persons, or each group of persons, holding the common or group rights comprising the native title are; and the nature and extent of the native title rights and interests in relation to the determination area; and the nature and extent of any other interests in relation to the determination area; and 1 The Members of the Yorta Yorta Aboriginal Community v The State of Victoria [1998] FCA 1606. 2 Yorta Yorta v Victoria (2001) 110 FCR 244. the relationship between paragraphs (b) and (c) (taking into account the effect of this Act); and the rights and interests to the extent that the land or waters in the determination area are not covered by a non-exclusive agricultural lease or a non-exclusive pastoral lease – whether the native title rights interests confer possession, occupation, use and and enjoyment of that land or waters on the native title holders to the exclusion of all others." As originally enacted, the Native Title Act had contained a different definition of "determination of native title" but that had been repealed, and a new definition substituted by the 1998 Amendment Act. The transitional provisions of the 1998 Amendment Act3 provided that the new form of the definition applied to all determinations made after the commencement of the 1998 Amendment Act regardless of when the native title determination application was made. Accordingly, what the claimants sought was a determination having the characteristics identified in the definition set out above. Those characteristics included, if native title were determined to exist, who the persons, or each group of persons, holding the common or group rights comprising the native title are and, in addition, the nature and extent of the native title rights and interests in relation to the determination area. Several of the terms used in the definition of "determination of native title" are defined elsewhere in the Native Title Act. For present purposes, the most important is the definition of "native title" contained in s 223 of the Act. Although that section was also amended by the 1998 Amendment Act, it is not necessary to notice the changes that were made then; for the purposes of the present matter, they may be left aside. "Native title", and the longer expression sometimes used in the Act, "native title rights and interests", are expressions defined in s 223(1) as: "the communal, group or individual rights and interests of Aboriginal peoples or Torres Strait Islanders in relation to land or waters, where: the rights and interests are possessed under the traditional laws acknowledged, and the traditional customs observed, by the Aboriginal peoples or Torres Strait Islanders; and 3 Sched 5, Pt 5, item 24. the Aboriginal peoples or Torres Strait Islanders, by those laws and customs, have a connection with the land or waters; and the rights and interests are recognised by the common law of Australia." Much of the argument of the present appeal was directed to the proper construction of this definition. In particular, considerable attention was directed to what is meant by par (c) of the definition when it says that "the rights and interests are recognised by the common law of Australia". Does this paragraph, as the majority of the Full Court held4, "[incorporate] into the statutory definition of native title the requirement that, in the case of a claimed communal title, the holders of the native title are members of an identifiable community 'the members of whom are identified by one another as members of that community living under its laws and customs'5 and that that community has continuously since the acquisition of sovereignty by the Crown been an identifiable community the members of which, under its traditional laws observed and traditional customs practised, possessed interests in the relevant land"? Does it, again as the majority of the Full Court held6, also incorporate into the statutory definition of native title, "the notion of extinguishment – whether by a positive exercise of sovereign power appropriate to achieve that result or by reason of the native title having expired so as to allow the Crown's radical title to expand to a full beneficial title"? (Native title was said by the majority7 to have "expired" if, at any time since the Crown acquired the radical title to the land, the traditional laws and customs, the acknowledgment and observance of which provided the foundation of native title, ceased to be acknowledged and observed or the relevant people, whether as a community, a group, or as individuals, ceased to have a connection with the land or waters in question.) (2001) 110 FCR 244 at 275 [108]. 5 Mabo v Queensland [No 2] (1992) 175 CLR 1 at 61 per Brennan J. (2001) 110 FCR 244 at 275 [108]. (2001) 110 FCR 244 at 275 [108]. As these reasons will seek to explain, the questions which arise in this matter turn more on a proper understanding of par (a) of the definition of native title, and in particular what is meant by "are possessed under the traditional laws acknowledged, and the traditional customs observed" by the relevant peoples, than it does on par (c) of the definition. But, of course, it will be necessary to consider all elements of the definition. Before turning to that consideration it is necessary to say something about the decisions in the courts below and about the way in which the claimants sought to demonstrate their entitlement to a determination that native title exists in relation to the land and waters the subject of their claim. That is necessary because the way in which the claimants shaped and presented their claim informs the proper understanding of the findings of fact that were made by the primary judge and the way in which he dealt with some questions of law. The claim The claimants made their claim on behalf of the members of the Yorta Yorta Aboriginal community. In their native title determination application, as amended on 2 May 1995, the claimants adopted a description of the Yorta Yorta Aboriginal community which had been prepared by a consultant anthropologist and was included by them in their application. That description noted that, in the period of nearly 155 years since Europeans first came to the area claimed, there had been "massive alterations in technical, environmental and economic circumstance". Reference was made in this regard to the use by the European settlers of land for pastoral purposes, to their use of forests for timber gathering, and to their use of waters for commercial fishing and irrigation, uses which had led to many plant and animal species which were once prolific becoming extinct or rare. Reference was made to the "impact of depopulation from disease and conflict during the early years of settlement" and to the policies of both government and others under which Aboriginal children had been separated from their parents, the performance of ceremonies and other traditional customs and practices had been forbidden, the use of traditional languages had been inhibited and "by controlling where and how the Yorta Yorta could live, they [that is, the government and others] forced the Yorta Yorta to make further adaptations to their new circumstances". At various times, different policies had been followed – absorption, segregation, integration – and each had had its effect on Aboriginal society. The claimants thus acknowledged, at the outset of their claim, that much had changed in Aboriginal society as a result of European settlement. It is these changes and their consequences that lie behind the issues which arise in this matter. The claim at trial The primary judge required the claimants and some of the many other parties to the proceeding who opposed, or at least did not support, the claims made by the claimants to file and serve a statement, in summary form, of the facts and contentions upon which they relied. That statement of facts and contentions was amended at various stages of the proceeding, the last of the amendments being made after the last day of the oral hearing before the primary judge. It may be taken, therefore, to represent a summary of the case which the claimants had sought to make at the trial of their application. Two particular aspects of that case are to be noted – the way in which it was said that the claimants were the persons who held native title, and the bases upon which it was said that native title was claimed. The claimants contended that, in accordance with Aboriginal custom and tradition, they had inherited native title rights and interests to the claimed areas from those Aboriginal persons who were in occupation of the land before European settlement. Those Aboriginal persons, referred to as the "ancestors", were said to have enjoyed that title uninterrupted by any non-Aboriginal person until European settlement. The claimants further asserted that, from the time of assertion of sovereignty over the claim areas (in the case of these areas, 1788) "to the times of the present generation", the ancestors and their descendants (including the claimants) had enjoyed that title, through the generations, firstly maintaining continuing uninterrupted occupation, use and enjoyment of the claimed areas and, secondly, maintaining traditional connection with, and possession of, the claimed areas. The claimants contended that they maintained their traditional connection to all of the claimed areas and that they had "maintained to the present day, and continuing, a system of tradition customs and practices inherited, in adapted form" from the ancestors (emphasis added). The reference to an adapted form of tradition, customs and practices was amplified in the contentions made about the bases upon which native title was claimed. Two alternative bases were advanced for the claim. First, it was said that the claimants had native title because they, or their ancestors, had been continuously physically present on, or had occupied, used and enjoyed, either all of the claimed areas, or at least large parts of the claimed areas, "[s]ince 1788 until the present day". Alternatively, it was said that, if there had not been continuous physical occupation, the claimants had native title to the claimed areas because there was a continuing traditional connection of the claimants and their ancestors with the claimed areas, demonstrated by a continuing system of custom and tradition incorporating a traditional relationship to land. In this regard, reference was made to what was said to be the physical presence of individuals or groups from the claimants and their ancestors upon the claimed areas and to activities described as being "other than those involving physical presence" on the land. All of the activities of the claimants and their ancestors were said to demonstrate a system of custom and tradition, including a traditional connection with the claimed areas, which was a system "sourced in, and in its essential features, … continuous with" the system of custom and tradition operating among the various generations of ancestors "from 1788 to [the] present time" (emphasis added). The significance of the references to adaptation of tradition and custom will be the subject of later consideration in these reasons. But in addition to that aspect of the claimants' contentions at trial, it is important to notice one other feature of them, namely, that the case which they sought to make good was that there was a connection between the native title rights and interests which they claimed to possess with the traditions and customs of Aboriginal society as those traditions and customs existed before European settlement. This connection was said to be established by demonstrating either continuous physical presence from the time the British Crown asserted sovereignty to the date of the proceeding or the existence of a continuing system of custom and tradition. Of this latter connection it was said that it could be demonstrated even though it had changed and adapted since European settlement. The primary judge's findings In his reasons for judgment the primary judge dealt with the case which the claimants had sought to make, namely, that they were descendants of Aboriginal persons who had inhabited the claim area when Europeans arrived and that either there had since been continuous occupation of the land by the claimants and their ancestors, or there was a continuing system of custom and tradition from before the time of European settlement to the time of the proceedings. The primary judge found that some but not all of the claimants were descended from persons who, in 1788, were indigenous inhabitants of part of the claim area. He found further that the evidence did not demonstrate that the descendants of the original inhabitants of the claimed land had occupied the land (in what he described as "the relevant sense") since 1788, and did not demonstrate that they had continued to acknowledge and observe, throughout that period, the traditional laws and customs in relation to land of their forebears. Rather, he concluded that the evidence demonstrated that, "before the end of the 19th century the ancestors through whom the claimants claim title had ceased to occupy their traditional lands in accordance with their traditional laws and customs". In this Court, and in the Full Court, the claimants attacked those findings and it will be necessary to say more about the way in which the primary judge arrived at them, but it is convenient to deal now with the nature of the attack that was made rather than the detail of the primary judge's reasoning. The Full Court On appeal to the Full Court of the Federal Court the claimants contended that in a number of respects the primary judge had applied a wrong test or tests in deciding whether they had established their asserted native title. It was contended, in effect, that the primary judge had required the claimants to establish that they, and their ancestors, had at all times since sovereignty continuously acknowledged and observed the same traditional laws and customs as had been acknowledged and observed before sovereignty, that they and their ancestors had occupied the claimed land and waters throughout that time in the same way as their ancestors had done so, and that the traditional connection which the claimants alleged they had with the land had been substantially maintained throughout the period since 1788. That is, the claimants contended on appeal to the Full Court that the primary judge had applied tests, characterised as a "frozen in time approach", which permitted no alteration of or development in the Aboriginal traditional law or custom in which the claimed native title was said to be based, and which allowed no interruption to the exercise of those rights and interests at any time after sovereignty was first asserted by the British Crown. At once it can be seen that what was said in the Full Court to constitute error by the primary judge was, subject to one very important exception, for the primary judge to conclude that it was necessary for the claimants to make good the case which they had set out to establish at trial, namely, a case that either there had been continuous occupation of the claimed land since before sovereignty was claimed, or that there was a continuing system of custom and tradition from before sovereignty to the time of the proceedings. (The exception which must, of course, be noted is the claimants' contention at trial that, between the time sovereignty was asserted and the time of the proceedings, there had been adaptations to traditions, customs and practices.) But what is clear is that there was, between trial and appeal to the Full Court, a marked shift in the case which the claimants sought to make. No longer did they contend that it was necessary for them to prove the case that they had set out to establish at trial. Be that as it may, and it was not suggested that the claimants were precluded from shifting their ground in this way, all members of the Full Court concluded that the primary judge had probably not applied a "frozen in time approach"8. All accepted that the traditional laws and customs which found native title may have adapted and changed in the period since the arrival of European settlers without native title rights and interests necessarily being lost as a result9. The majority of the Court (Branson and Katz JJ) concluded10, however, that the finding of the primary judge that there was a period of time between 1788 and the date of the claim made by the claimants during which the relevant community lost its character as a traditional Aboriginal community should not be disturbed and that, in consequence of that change, native title had "expired". By contrast, Black CJ concluded that the primary judge had applied too restrictive an approach to what is "traditional" in reaching his conclusion that native title had expired before the end of the nineteenth century11 and that the matters should, therefore, go back for further hearing. Again, the way in which the claimants shaped and presented their arguments on appeal to the Full Court informs the proper understanding of the way in which that Court dealt with the matter. The appeal to the High Court In this Court, the claimants contended that both the trial judge and the majority of the Full Court misconstrued and misapplied the definition of native title in s 223(1) of the Native Title Act and that, as a result, the findings of fact which the trial judge had made, and which the majority of the Full Court had upheld, were misdirected. The error which it was said that the primary judge had made was to require positive proof of continuous acknowledgment and observance of traditional laws and customs in relation to land and that the majority of the Full Court, albeit by a different path, had likewise concluded that positive proof of continuous acknowledgment and observance of traditional laws and customs was required. Rather, so the claimants contended, attention should be directed to the rights and interests presently possessed under traditional laws presently acknowledged and customs presently observed, and to a present connection by those laws and customs. It followed, so it was submitted, that (2001) 110 FCR 244 at 264 [67] per Black CJ, 288-290 [171-182] per Branson and (2001) 110 FCR 244 at 259-260 [49] per Black CJ, 278 [122] per Branson and 10 (2001) 110 FCR 244 at 293 [194], 294 [202]. 11 (2001) 110 FCR 244 at 271 [91]. occupation, as a traditional Aboriginal society of the land and waters claimed, was not a matter that need be established to prove the existence of native title rights and interests. The emphasis given in the claimants' arguments in this Court, to traditional laws presently acknowledged and traditional customs presently observed, appears to constitute another important shift in emphasis away from that given at trial to continuity between sovereignty and the present. Again, however, it was not submitted that the conduct of the proceedings below precluded the claimants advancing the arguments which they did in this Court. Nonetheless, it is important to approach the criticisms which they advanced of the reasoning adopted in the courts below bearing in mind the way in which the case has been put at the various stages of its progress through the courts. Further, it is as well to say that, in tracing the development of the claimants' arguments, we are not to be understood as criticising what was done. Shifts in emphasis in argument at different stages of a matter are far from unusual and when, as was the case here, the issues are novel, development of the arguments advanced by a party, not only by elaboration but also by modification, is to be expected. It is for different purposes that we have pointed out the way in which the claimants' arguments developed. First, as we have said, the reasons in the courts below must be read in the light of the arguments presented to those courts. Secondly, the developments in the claimants' arguments serve to identify a very important aspect of the issue that is to be decided in this matter. As six members of the Court said in Fejo v Northern Territory12: "Native title has its origin in the traditional laws acknowledged and the customs observed by the indigenous people who possess the native title13. Native title is neither an institution of the common law nor a form of common law tenure but it is recognised by the common law14. There is, therefore, an intersection of traditional laws and customs with the common law." (emphasis added) An application for determination of native title requires the location of that intersection, and it requires that it be located by reference to the Native Title Act. 12 (1998) 195 CLR 96 at 128 [46] per Gleeson CJ, Gaudron, McHugh, Gummow, 13 Mabo v Queensland [No 2] (1992) 175 CLR 1 at 58 per Brennan J. 14 Mabo [No 2] (1992) 175 CLR 1 at 59-61 per Brennan J. In particular, it must be located by reference to the definition of native title in s 223(1). Further, in this case, as the development of the claimants' argument, from trial through their appeal to the Full Court to their appeal in this Court, may be seen to reveal, it is critically important to identify what exactly it is that intersects with the common law. Is it a body of traditional law and custom as it existed at the time of sovereignty? Is it a body of law and custom as it exists today but which, in some way, is connected with a body of law and custom that existed at sovereignty? How, if at all, is account to be taken of the inescapable fact that since, and as a result of, European settlement, indigenous societies have seen very great change? It is necessary, as has now been said repeatedly15, to begin consideration of a claim for determination of native title by examination and consideration of the provisions of the Native Title Act. As has been pointed out above, what the claimants sought was a determination that is a creature of that Act, not the common law. In undertaking that task, all elements of the definition of native title must be given effect. "Native title" means certain rights and interests of indigenous peoples. Those rights and interests may be communal, group or individual rights and interests, but they must be "in relation to" land or waters. The rights and interests must have three characteristics. The first is that they are possessed under the traditional laws acknowledged and the traditional customs observed by the peoples concerned. That is, they must find their source in traditional law and custom, not in the common law16. It will be necessary to return to this characteristic. Secondly, the rights and interests must have the characteristic that, by the traditional laws acknowledged and the traditional customs observed by the relevant peoples, those peoples have "a connection with" the land or waters. Again, the connection to be identified is one whose source is traditional law and custom, not the common law. Thirdly, the rights and interests in relation to land must be "recognised" by the common law of Australia and it was, as we have said, upon the operation of this requirement that much of the debate on the hearing of this appeal centred. Three separate strands of argument about this element of the definition of native 15 Commonwealth v Yarmirr (2001) 75 ALJR 1582 at 1585 [7]; 184 ALR 113 at 119; Western Australia v Ward (2002) 76 ALJR 1098 at 1108 [16]; 191 ALR 1 at 16. 16 Ward (2002) 76 ALJR 1098 at 1109 [20]; 191 ALR 1 at 17. title will require consideration. First, does this element of the definition permit, even require, consideration of any aspect of the general law as it stood after the decision in Mabo v Queensland [No 2]17 but before the enactment of the Native Title Act? Secondly, does this element of the definition carry within itself any rule or principle relating to extinguishment, abandonment, or loss of native title rights, by which it can be decided whether native title rights which existed at sovereignty may no longer be the subject of a determination of native title under the Native Title Act? Thirdly, what, if anything, does this element of the definition of native title say about the significance that is to be attached to the identification of what traditional law or custom may have said, at the time sovereignty was first asserted, about the rights and interests of peoples in the land or waters in which native title is now claimed? None of these questions can be answered without an understanding of the operation of all of the elements of the definition of native title. Most especially is that the case in connection with the third of the strands we have identified. In order to understand the work that is to be done by par (c) of the definition of native title, with its reference to recognition by the common law of Australia, it is necessary to understand the operation of par (a), and what is meant by "possessed under the traditional laws acknowledged, and the traditional customs observed". Moreover, none of the questions posed in connection with "recognition" of native title rights and interests by the common law of Australia can be examined properly without taking into account some fundamental principles: principles to which we now turn. The consequences of sovereignty and change in sovereignty First, it follows from Mabo [No 2] that the Crown's acquisition of sovereignty over the several parts of Australia cannot be challenged in an Australian municipal court. Secondly, upon acquisition of sovereignty over a particular part of Australia, the Crown acquired a radical title to the land in that part, but native title to that land survived the Crown's acquisition of sovereignty and radical title. What survived were rights and interests in relation to land or waters. Those rights and interests owed their origin to a normative system other than the legal system of the new sovereign power; they owed their origin to the traditional laws acknowledged and the traditional customs observed by the indigenous peoples concerned. When it is recognised that the subject matter of the inquiry is rights and interests (in fact rights and interests in relation to land or waters) it is clear that 17 (1992) 175 CLR 1. the laws or customs in which those rights or interests find their origins must be laws or customs having a normative content and deriving, therefore, from a body of norms or normative system – the body of norms or normative system that existed before sovereignty. Thus, to continue the metaphor of intersection, the relevant intersection, concerning as it does rights and interests in land, is an intersection of two sets of norms. That intersection is sometimes expressed by saying that the radical title of the Crown was "burdened" by native title rights but, as was pointed out in Commonwealth v Yarmirr18, undue emphasis should not be given to this form of expression. Radical title is a useful tool of legal analysis but it is not to be given some controlling role. An intersection of two normative systems To speak of an intersection of two sets of norms, or of two normative systems, does not identify the nature or content of either. Nor may it be immediately evident that a reference to "traditional laws acknowledged, and the traditional customs observed" is, in fact, a reference to a body of norms or normative system. Indeed, reference to a normative "system" of traditional laws and customs may itself be distracting if undue attention is given to the word "system", particularly if it were to be understood as confined in its application to systems of law that have all the characteristics of a developed European body of Nonetheless, the fundamental premise from which the decision in Mabo [No 2] proceeded is that the laws and customs of the indigenous peoples of this country constituted bodies of normative rules which could give rise to, and had in fact given rise to, rights and interests in relation to land or waters. And of more immediate significance, the fundamental premise from which the Native Title Act proceeds is that the rights and interests with which it deals (and to which it refers as "native title") can be possessed under traditional laws and customs. Of course, those rights and interests may not, and often will not, correspond with rights and interests in land familiar to the Anglo-Australian property lawyer20. The rights and interests under traditional laws and customs 18 (2001) 75 ALJR 1582 at 1594-1595 [49]; 184 ALR 113 at 131-132. 19 cf Sampford, "Legal systems and their place in legal theory", in Galligan (ed), Essays in legal theory, (1984) at 165. 20 Yarmirr (2001) 75 ALJR 1582 at 1587 [13]; 184 ALR 113 at 121. will often reflect a different conception of "property" or "belonging"21. But none of those considerations denies the normative quality of the laws and customs of the indigenous societies. It is only if the rich complexity of indigenous societies is denied that reference to traditional laws and customs as a normative system jars the ear of the listener22. To speak of such rights and interests being possessed under, or rooted in, traditional law and traditional custom might provoke much jurisprudential debate about the difference between what HLA Hart referred to23 as "merely convergent habitual behaviour in a social group" and legal rules. The reference to traditional customs might invite debate about the difference between "moral obligation" and legal rules24. A search for parallels between traditional law and traditional customs on the one hand and Austin's conception of a system of laws, as a body of commands or general orders backed by threats which are issued by a sovereign or subordinate in obedience to the sovereign25, may or may not be fruitful. Likewise, to search in traditional law and traditional customs for an identified, even an identifiable, rule of recognition26 which would distinguish between law on the one hand, and moral obligation or mere habitual behaviour on the other, may or may not be productive. This last question may, however, be put aside when it is recalled that the Native Title Act refers to traditional laws acknowledged and traditional customs observed. Taken as a whole, that expression, with its use of "and" rather than "or", obviates any need to distinguish between what is a matter of traditional law and what is a matter of traditional custom. Nonetheless, because the subject of consideration is rights or interests, the rules which together constitute the 21 cf Yanner v Eaton (1999) 201 CLR 351 at 365-367 [17]-[20] per Gleeson CJ, Gaudron, Kirby and Hayne JJ and Milirrpum v Nabalco Pty Ltd (1971) 17 FLR 141 at 272 per Blackburn J. See also Ward (2002) 76 ALJR 1098 at 1108 [14]; 191 ALR 1 at 15-16. 22 cf In re Southern Rhodesia [1919] AC 211 at 233-234 per Lord Sumner. 23 Hart, The Concept of Law, 2nd ed (1994) at 10. 24 Hart, The Concept of Law, 2nd ed (1994) at 13. 25 Austin, The Province of Jurisprudence Determined, (1832) Lecture I, (Library of Ideas ed, 1968 impression) at 11; Hart, The Concept of Law, 2nd ed (1994) at 26 Hart, The Concept of Law, 2nd ed (1994) at 100. traditional laws acknowledged and traditional customs observed, and under which the rights or interests are said to be possessed, must be rules having normative content. Without that quality, there may be observable patterns of behaviour but not rights or interests in relation to land or waters. The consequences of sovereignty for the pre-sovereignty normative system What is important for present purposes, however, is not the jurisprudential questions that we have identified. It is important to recognise that the rights and interests concerned originate in a normative system, and to recognise some consequences that follow from the Crown's assertion of sovereignty. Upon the Crown acquiring sovereignty, the normative or law-making system which then existed could not thereafter validly create new rights, duties or interests. Rights or interests in land created after sovereignty and which owed their origin and continued existence only to a normative system other than that of the new sovereign power, would not and will not be given effect by the legal order of the new sovereign. That is not to deny that the new legal order recognised then existing rights and interests in land. Nor is it to deny the efficacy of rules of transmission of rights and interests under traditional laws and traditional customs which existed at sovereignty, where those native title rights continue to be recognised by the legal order of the new sovereign. The rights and interests in land which the new sovereign order recognised included the rules of traditional law and custom which dealt with the transmission of those interests. Nor is it to say that account could never be taken of any alteration to, or development of, that traditional law and custom that occurred after sovereignty. Account may have to be taken of developments at least of a kind contemplated by that traditional law and custom. Indeed, in this matter, both the claimants and respondents accepted that there could be "significant adaptations"27. But what the assertion of sovereignty by the British Crown necessarily entailed was that there could thereafter be no parallel law-making system in the territory over which it asserted sovereignty. To hold otherwise would be to deny the acquisition of sovereignty and as has been pointed out earlier, that is not permissible. Because there could be no parallel law-making system after the assertion of sovereignty it also follows that the only rights or interests in relation to land or waters, originating otherwise than in the new sovereign order, which will be recognised after the assertion of that new sovereignty are those that find their origin in pre-sovereignty law and custom. 27 (2001) 110 FCR 244 at 264 [67]. Consequences for construction of "native title" Construction of the definition of native title must take account of these considerations. The first level of inquiry is whether, on the proper construction of the Native Title Act and the definition of native title, the Act is to be understood as creating new rights and interests in land which it calls "native title". Putting the same question another way, does an application for determination of native title seek the determination of rights and interests which find their origin in the new sovereign order, or is it seeking a determination of the existence of rights and interests which, recognised after the assertion of that new sovereignty, nonetheless find their origin in pre-sovereignty law and custom? Hitherto it has been accepted, and the contrary was not contended in this appeal, that the native title rights and interests to which the Native Title Act refers are rights and interests finding their origin in pre-sovereignty law and custom, not rights or interests which are a creature of that Act. That being so, the references, in pars (a) and (b) of the definition of native title, to "traditional" law or custom must be understood in the light of the As the claimants submitted, considerations that have been mentioned. "traditional" is a word apt to refer to a means of transmission of law or custom. A traditional law or custom is one which has been passed from generation to generation of a society, usually by word of mouth and common practice. But in the context of the Native Title Act, "traditional" carries with it two other elements in its meaning. First, it conveys an understanding of the age of the traditions: the origins of the content of the law or custom concerned are to be found in the normative rules of the Aboriginal and Torres Strait Islander societies that existed before the assertion of sovereignty by the British Crown. It is only those normative rules that are "traditional" laws and customs. Secondly, and no less importantly, the reference to rights or interests in land or waters being possessed under traditional laws acknowledged and traditional customs observed by the peoples concerned, requires that the normative system under which the rights and interests are possessed (the traditional laws and customs) is a system that has had a continuous existence and vitality since sovereignty. If that normative system has not existed throughout that period, the rights and interests which owe their existence to that system will have ceased to exist. And any later attempt to revive adherence to the tenets of that former system cannot and will not reconstitute the traditional laws and customs out of which rights and interests must spring if they are to fall within the definition of native title. To explain why this is so requires consideration of fundamental aspects of what is meant by a body of norms (laws and customs) that give rise to rights or interests in relation to land or waters, and what is meant by saying that the body of norms has a continuous existence and vitality. The inextricable link between a society and its laws and customs Laws and customs do not exist in a vacuum. They are, in Professor Julius Stone's words, "socially derivative and non-autonomous"28. As Professor Honoré has pointed out29, it is axiomatic that "all laws are laws of a society or group". Or as was said earlier, in Paton's Jurisprudence30, "law is but a result of all the forces that go to make society". Law and custom arise out of and, in important respects, go to define a particular society. In this context, "society" is to be understood as a body of persons united in and by its acknowledgment and observance of a body of law and customs31. Some of these issues were considered in Milirrpum v Nabalco Pty Ltd32 where there appears to have been detailed evidence about the social organisation of the Aboriginal peoples concerned. Some were touched on by Toohey J in Mabo [No 2]33 where his Honour referred to North American decisions about similar questions34. They appear not to be issues that were addressed directly in argument in this matter in the courts below, whether for want of evidence about them or for some other reason does not matter. To speak of rights and interests possessed under an identified body of laws and customs is, therefore, to speak of rights and interests that are the creatures of the laws and customs of a particular society that exists as a group which acknowledges and observes those laws and customs. And if the society out of which the body of laws and customs arises ceases to exist as a group which 28 Stone, The Province and Function of Law, (1946) at 649. 29 Honoré, "Groups, Laws and Obedience", in Simpson (ed), Oxford Essays in Jurisprudence (Second Series), (1973) 1 at 2. 30 Paton, A Text-book of Jurisprudence, (1946) at 34. 31 We choose the word "society" rather than "community" to emphasise this close relationship between the identification of the group and the identification of the laws and customs of that group. 32 (1971) 17 FLR 141 at 165-176. 33 (1992) 175 CLR 1 at 186-188. See also at 99-100 per Deane and Gaudron JJ. 34 In particular, Hamlet of Baker Lake v Minister of Indian Affairs and Northern Development (1980) 1 FC 518 at 557-563; (1979) 107 DLR (3d) 513 at 542-547. acknowledges and observes those laws and customs, those laws and customs cease to have continued existence and vitality. Their content may be known but if there is no society which acknowledges and observes them, it ceases to be useful, even meaningful, to speak of them as a body of laws and customs acknowledged and observed, or productive of existing rights or interests, whether in relation to land or waters or otherwise. What is the position if, as is said to be the case here, the content of the laws and customs is passed on from individual to individual, despite the dispersal of the society which once acknowledged and observed them, and the descendants of those who used to acknowledge and observe these laws and customs take them up again? Are the laws and customs which those descendants acknowledge and observe "traditional laws" and "traditional customs" as those expressions are used in the Native Title Act, and are the rights and interests in land to which those laws and customs give rise possessed under traditional laws acknowledged and traditional customs observed? Again, it is necessary to consider the several elements of the issues that thus arise. Has the society ceased to exist? Does not the survival of knowledge of the traditional ways suggest that it has not? Or is it shown that, although there is knowledge, there has been or is no observance or acknowledgment? These may be very difficult questions to resolve. Identifying a society that can be said to continue to acknowledge and observe customs will, in many cases, be very difficult. In the end, however, because laws and customs do not exist in a vacuum, because they are socially derivative and non-autonomous, if the society (the body of persons united in and by its observance and acknowledgment of a body of law and customs) ceases to acknowledge and observe them, the questions posed earlier must be answered, no. When the society whose laws or customs existed at sovereignty ceases to exist, the rights and interests in land to which these laws and customs gave rise, cease to exist. If the content of the former laws and customs is later adopted by some new society, those laws and customs will then owe their new life to that other, later, society and they are the laws acknowledged by, and customs observed by, that later society, they are not laws and customs which can now properly be described as being the existing laws and customs of the earlier society. The rights and interests in land to which the re-adopted laws and customs give rise are rights and interests which are not rooted in pre-sovereignty traditional law and custom but in the laws and customs of the new society. In so far as it is useful to analyse the problem in the jurisprudential terms of the legal positivist, the relevant rule of recognition of a traditional law or custom is a rule of recognition found in the social structures of the relevant indigenous society as those structures existed at sovereignty. It is not some later created rule of recognition rooted in the social structures of a society, even an indigenous society, if those structures were structures newly created after, or even because of, the change in sovereignty. So much necessarily follows as a consequence of the assertion of sovereignty and it finds reflection in the definition of native title and its reference to possession of rights and interests under traditional law and custom. The caveat we have entered about the utility of jurisprudential analysis is not unimportant. Leaving aside the questions of choice between different schools of analytical thought, any analysis of the traditional laws and customs of societies having no well-developed written language by using analytical tools developed in connection with very differently organised societies is fraught with evident difficulty. The difficulty of that analytical task should not be understood, however, as denying the importance of recognising two cardinal facts. First, laws and customs and the society which acknowledges and observes them are inextricably interlinked. Secondly, one of the uncontestable consequences of the change in sovereignty was that the only native title rights or interests in relation to land or waters which the new sovereign order recognised were those that existed at the time of change in sovereignty. Although those rights survived the change in sovereignty, if new rights or interests were to arise, those new rights and interests must find their roots in the legal order of the new sovereign power. For these reasons, it would be wrong to confine an inquiry about native title to an examination of the laws and customs now observed in an indigenous society, or to divorce that inquiry from an inquiry into the society in which the laws and customs in question operate. Further, for the same reasons, it would be wrong to confine the inquiry for connection between claimants and the land or waters concerned to an inquiry about the connection said to be demonstrated by the laws and customs which are shown now to be acknowledged and observed by the peoples concerned. Rather, it will be necessary to inquire about the relationship between the laws and customs now acknowledged and observed, and those that were acknowledged and observed before sovereignty, and to do so by considering whether the laws and customs can be said to be the laws and customs of the society whose laws and customs are properly described as traditional laws and customs. Against this lengthy introduction it is convenient now to turn to the specific criticisms that the claimants made of the reasoning in the courts below and, for that purpose, to say more about the reasons both of the primary judge and of the majority in the Full Court. The reasons of the primary judge The claimants sought to prove their case by calling 60 witnesses. Most were part of the claimant group, but the claimants also called evidence from two anthropologists, an archaeologist and a linguist. The primary judge described the oral evidence of many of these witnesses as "in some respects both credible and compelling" but he concluded that not all of the oral evidence was of that character. In addition to this oral evidence, the claimants tendered a considerable volume of documentary material. As the primary judge recognised, "[t]he difficulties inherent in proving facts in relation to a time when for the most part the only record of events is oral tradition passed down from one generation to another, cannot be overstated". Not surprisingly then, the claimants tendered as part of their case, such written material as was available and which recorded observations of Aboriginal society after the first European settlers came to the area the subject of the claim. Particular reference was made to two works by Edward M Curr who was one of the first squatters to occupy land in the claim area, near Echuca, and who lived there from 1841 to 1851. Curr wrote two books – Recollections of Squatting in Victoria: Then Called the Port Phillip District (From 1841 to 1851), first published in 1883, and a four volume work entitled The Australian Race: Its Origin, Languages, Customs, Place of Landing in Australia and the Routes by which it Spread itself over that Continent, first published in 1886. From this evidence, and accounts of earlier travels by explorers and others through the claim area during the 1820s and 1830s, the primary judge concluded that the inference that indigenous people occupied the claim area in and before 1788 was "compelling". This conclusion was not challenged. As the primary judge noted, however, it left open whether the indigenous people who were found to be in occupation of the claim area in the 1830s and 1840s, as European settlement occurred, and about whom there were available records, were descended from those who had occupied the area at the time sovereignty was first asserted. At trial, two separate questions were understood as arising. First, did the claimants demonstrate that they were descended from those who were indigenous inhabitants of the claim area in 1788? Secondly, what was the nature of the entitlement which the indigenous inhabitants enjoyed in relation to their traditional lands in accordance with their laws and customs, and what was the extent of those lands? At trial, the claimants sought to address the first question by identifying 18 individuals, from whom it was said the claimants were descended, and seeking to demonstrate that one or more of those 18 "known ancestors" was a descendant of an indigenous inhabitant who occupied the claim area at or before 1788 and who enjoyed native title rights and interests to the claimed land and waters. Demonstrating this connection between the known ancestors and the people whose traditional laws and customs, at or before European contact, entitled them to the rights of ownership, possession, occupation and use claimed by the claimants was said by the primary judge to be "[o]ne of the major problems associated with the presentation of the [claimants'] case". Of the 18 named ancestors, the trial judge found that only two had been shown to be descended from persons who were indigenous inhabitants of part of the claim area in 1788. Even so, what was said to be "a significant number of the claimant group" were found to be descended from one or other of these two persons. As to the second of the questions identified (requiring identification of the nature and extent of the entitlement which the indigenous inhabitants enjoyed), the primary judge said that "[t]he most credible source of information concerning the traditional laws and customs of the area" was to be found in Curr's writings. He went on to say that: "The oral testimony of the witnesses from the claimant group is a further source of evidence but being based upon oral traditional passed down through many generations extending over a period in excess of two hundred years, less weight should be accorded to it than to the information recorded by Curr." In the Full Court35, Black CJ concluded that this approach made no proper allowance for adaptation and change in traditional law and customs in response to European settlement, and in this Court the claimants submitted that Black CJ was correct in this conclusion. At least to the extent that the primary judge's inquiry was directed to ascertaining what were the traditional laws and customs of the peoples of the area at the time of European settlement, the criticism is not open. The assessment of what is the most reliable evidence about that subject was quintessentially a matter for the primary judge who heard the evidence that was given, and questions of whether there could be later modification to the laws and customs identified do not intrude upon it. His assessment of some evidence as more useful or more reliable than other evidence is not shown to have been flawed. The conclusion the primary judge reached did not begin from the impermissible premise that written evidence about a subject is inherently better or more reliable than oral testimony on the same subject. The assessment he made of the evidence was one which no doubt took account of the emphasis given and reliance placed by the claimants on the writings of Curr. 35 (2001) 110 FCR 244 at 265-266 [69]-[72]. The question of adaptation and change was at the heart of the claimants' case. But so also was the proposition that the society, whose laws and customs had adapted and changed over time, continued to exist and, on one branch of the claimants' case, continued to occupy the claim area, or large parts of it, from before European settlement to the date of the claim. It was not disputed at trial that European settlement had brought great changes. The primary judge described the effect of European settlement in the area as having had "a devastating effect" on the Aboriginal population. In his works Curr described some aspects of Aboriginal life and culture and referred to the fact that European settlement had disturbed the way of life of the Aboriginal people. Curr's observations were, however, confined to the 1840s. The disruption of traditional life continued and increased during the immediately succeeding decades. Daniel Matthews who, in 1899 wrote a paper entitled "Native Tribes of the Upper Murray", recorded that when living at Echuca in the early part of 1864 he came into contact with tribes which, in early days "were probably large, numbering several hundreds; but owing to the march of civilisation, acquired estates, incursions and reprisals, they gradually became decimated until now, [1899] they are mere fragments of tribes". These changes were hastened by Matthews' practice of attracting Aboriginals from various parts of the country to the Maloga mission he established in 1874 and the policies he adopted at Maloga of suppressing the use of indigenous languages and the observance of traditional practices. The primary judge recorded that the evidence was silent about "the continued observance in Matthews' time of those aspects of traditional lifestyle" to which Curr had referred. In particular, the primary judge noted that there was no evidence about whether, as Curr had noted, the territorial areas of various tribal groups were still, in Matthews' day, recognised and protected, as they had been in Curr's. Rather, what the evidence demonstrated was that land on either side of the Murray had been taken up for pastoral purposes and that "there had been both severe dislocation of the indigenous population and a considerable reduction in its numbers due to disease". The next significant event to which the primary judge referred was the presentation of a petition to the Governor of New South Wales in 1881 by 42 Aboriginals, many of whom were known to have been resident at, or otherwise connected with, Maloga. This petition, said to be by members of the Moira and Ulupna tribes, recorded that "all the land within our tribal boundaries has been taken possession of by the government and white settlers". The petitioners sought a grant of land. The primary judge attached considerable significance to this petition. He said that apart from any conclusions which might have been drawn from the absence of evidence of continued observance of traditional laws and customs in the period after the establishment of Maloga, the petition amounted to "positive evidence emanating from the Aboriginals themselves" to the effect that the descendants of those who had originally occupied the land no longer continued to acknowledge their traditional laws or observe their traditional customs. Of the petition the primary judge said that: "Whilst there can be little doubt that Matthews would have played a part in the composition and presentation of [it] it has not been suggested in this proceeding that the general thrust of the statements attributed to the petitioners was factually inaccurate or in any way misrepresented their views or their aspirations." (emphasis added) As the primary judge pointed out, the petition had been tendered in the course of the claimants' opening address as part of what was said to demonstrate a long history of efforts to obtain land. Given that no attack on its accuracy was made at trial, it was well open to the primary judge to attach to the petition the significance he did. Having regard to the petition and to the absence of evidence of contemporary records to the contrary, the primary judge concluded that, by the time the petition was presented in 1881, those through whom the claimants sought to establish native title "were no longer in possession of their tribal lands and had, by force of the circumstances in which they found themselves, ceased to observe those laws and customs based on tradition which might otherwise have provided a basis for the present native title claim; and the dispossession of the original inhabitants and their descendants has continued through to the present time." Rather, the primary judge concluded that the current beliefs and practices of the claimants constituted genuine efforts on their part "to revive the lost culture of their ancestors". The legal principles which the primary judge considered were to be applied to the facts found were principles which he correctly identified as being found in the Native Title Act's definition of native title. It is true to say that his Honour said that this definition of native title was "consistent with" language in the reasons in Mabo [No 2] and that it was, in his Honour's view, necessary to understand the context in which the statutory definition was developed by reference to what was said in that case. It may be that undue emphasis was given in the reasons to what was said in Mabo [No 2], at the expense of recognising the principal, indeed determinative, place that should be given to the Native Title Act. It may also well be, however, that this treatment of the questions owes much to the course that argument took at trial. Whether or not that is so, what is notably absent from the reasons of the primary judge is any record of an argument directing attention to what now is said to be the significance to be attached to par (c) of the definition of native title and its reference to recognition by the common law of Australia. The Full Court Contrary to what appears to have been the course of argument at trial, argument in the Full Court focused considerable attention upon par (c) of the definition of native title. The majority of the Court concluded, as has already been noted, that that paragraph incorporates into the statutory definition of native title a number of requirements among which is that the relevant indigenous community "has continuously since the acquisition of sovereignty by the Crown been an identifiable community the members of which, under its traditional laws observed and traditional customs practised, possessed interests in the relevant land"36. Further, so the majority concluded37, this paragraph also incorporates notions of extinguishment and expiry of native title. The majority held38 that, on the proper construction of s 223(1) of the Native Title Act, a communal native title can exist only where four conditions are met, namely: possession under traditional laws currently acknowledged and traditional customs currently observed; by those laws and customs the indigenous claimants have, as members of the community, a current connection with the land or waters; the rights and interests are not inconsistent with basic precepts of the common law; and the native title claimed has not at any time since the acquisition of sovereignty been extinguished. 36 (2001) 110 FCR 244 at 275 [108] per Branson and Katz JJ. 37 (2001) 110 FCR 244 at 275 [108] per Branson and Katz JJ. 38 (2001) 110 FCR 244 at 287-288 [168]. Three methods of extinguishment were identified by their Honours39: positive exercise of sovereign power; (iii) cessation of acknowledgment and observance by the community of the traditional laws and customs upon which the native title had been founded; and by a loss of connection with the land or waters by the relevant community, such a loss of connection necessarily resulting from "the disappearance of the community as a traditional indigenous community". The majority held40 that, "there was more than adequate evidence before [the primary judge] to support" his finding that there was a period of time, between 1788 and the claimants' making their claim, during which the relevant community lost its character as a traditional community. This statement, that "there was more than adequate evidence … to support" the finding, was then amplified in the joint reasons by reference to particular pieces of the evidence. Having made those references, their Honours went on to say41, in effect, that the finding was one not lightly to be disturbed on appeal having regard to its being based on evidence "touching on a multitude of factors", following a long and complex hearing such that the primary judge could not be expected to refer to every matter which influenced the finding on so complex an issue as the maintenance of a traditional indigenous community. Accordingly, their Honours saw no reason to conclude from the fact that particular aspects of the evidence had not been mentioned in the reasons that he did not take them into account. Their Honours were, accordingly, not persuaded that the finding of fact should be disturbed. The appeal to this Court The claimants contended that both the primary judge, and the majority of the Full Court, wrongly held that the claimants' claim to native title failed without positive proof of continuous acknowledgment and observance of the traditional laws and customs in relation to land of the original inhabitants of the claimed land. The claimants submitted that the primary judge proceeded from 39 (2001) 110 FCR 244 at 287-288 [168]. 40 (2001) 110 FCR 244 at 293 [194]. 41 (2001) 110 FCR 244 at 294-295 [202-205]. the erroneous premise that ss 223(1) and 225 of the Native Title Act required proof of native title according to all common law requirements of which positive proof of the kind described was one. They contended that the majority of the Full Court wrongly found this requirement in an erroneous construction of s 223(1)(c). To speak of the "common law requirements" of native title is to invite fundamental error. Native title is not a creature of the common law, whether the Imperial common law as that existed at the time of sovereignty and first settlement, or the Australian common law as it exists today. Native title, for present purposes, is what is defined and described in s 223(1) of the Native Title Act. Mabo [No 2] decided that certain rights and interests relating to land, and rooted in traditional law and custom, survived the Crown's acquisition of sovereignty and radical title in Australia. It was this native title that was then "recognised, and protected"42 in accordance with the Native Title Act and which, thereafter, was not able to be extinguished contrary to that Act43. The Native Title Act, when read as a whole, does not seek to create some new species of right or interest in relation to land or waters which it then calls native title. Rather, the Act has as one of its main objects44 "to provide for the recognition and protection of native title" (emphasis added), which is to say those rights and interests in relation to land or waters with which the Act deals, but which are rights and interests finding their origin in traditional law and custom, not the Act. It follows that the reference in par (c) of s 223(1) to the rights or interests being recognised by the common law of Australia cannot be understood as a form of drafting by incorporation, by which some pre-existing body of the common law of Australia defining the rights or interests known as native title is brought into the Act. To understand par (c) as a drafting device of that kind would be to treat native title as owing its origins to the common law when it does not. And to speak of there being common law elements for the establishment of native title is to commit the same error. It is, therefore, wrong to read par (c) of the definition of native title as requiring reference to any such body of common law, for there is none to which reference could be made. The reference to recognition by the common law serves a different purpose of which there are at least two relevant features. First, the requirement 42 Native Title Act 1993 (Cth), s 10. 44 s 3(a). for recognition by the common law may require refusal of recognition to rights or interests which, in some way, are antithetical to fundamental tenets of the common law45. No such case was said to arise in this matter and it may be put aside. Secondly, however, recognition by the common law is a requirement that emphasises the fact that there is an intersection between legal systems and that the intersection occurred at the time of sovereignty. The native title rights and interests which are the subject of the Act are those which existed at sovereignty, survived that fundamental change in legal regime, and now, by resort to the processes of the new legal order, can be enforced and protected. It is those rights and interests which are "recognised" in the common law. How then, if at all, does the definition of native title take account of whether there has been some modification of or adaptation to traditional law and custom, or some interruption in the exercise of native title rights and interests? As foreshadowed at the outset of these reasons, much turns on a proper understanding of the reference in par (a) of the definition to "traditional" laws acknowledged and "traditional" customs observed. For the reasons given earlier, "traditional" does not mean only that which is transferred by word of mouth from generation to generation, it reflects the fundamental nature of the native title rights and interests with which the Act deals as rights and interests rooted in pre-sovereignty traditional laws and customs. It may be accepted that demonstrating the content of that traditional law and custom may very well present difficult problems of proof. But the difficulty of the forensic task which may confront claimants does not alter the requirements of the statutory provision. In many cases, perhaps most, claimants will invite the Court to infer, from evidence led at trial, the content of traditional law and custom at times earlier than those described in the evidence. Much will, therefore, turn on what evidence is led to found the drawing of such an inference and that is affected by the provisions of the Native Title Act. When the primary judge was hearing evidence in this matter the Native Title Act provided that, in conducting proceedings under the Act, the Federal Court, first46, was "not bound by technicalities, legal forms or rules of evidence" and, secondly47, "must pursue the objective of providing a mechanism of 45 Ward (2002) 76 ALJR 1098 at 1109 [20]-[21]; 191 ALR 1 at 17-18. determination that is fair, just, economical, informal and prompt". It may be that, under those provisions, a rather broader base could be built for drawing inferences about past practices than can be built since the 1998 Amendment Act came into operation. By that Act a new s 82 was enacted. Section 82(1) now provides that the Court is bound by the rules of evidence "except to the extent that the Court otherwise orders". (In the present case the parties were invited by the primary judge to make submissions about the effect of this amendment on the evidence that had already been received in the matter but nothing was said then, or in this Court, to turn on that point.) The kinds of evidentiary questions which may arise in this regard are well illustrated by Milirrpum48 but it is neither necessary nor appropriate to consider whether the answers given to the questions that arose in that case were right. Were they to arise again, in proceedings in the Federal Court, it would be necessary to consider them by reference to the Evidence Act 1995 (Cth). It is, however, important to notice that demonstrating the content of pre-sovereignty traditional laws and customs may be especially difficult in cases, like this, where it is recognised that the laws or customs now said to be acknowledged and observed are laws and customs that have been adapted in response to the impact of European settlement. In such cases, difficult questions of fact and degree may emerge, not only in assessing what, if any, significance should be attached to the fact of change or adaptation but also in deciding what it was that was changed or adapted. It is not possible to offer any single bright line test for deciding what inferences may be drawn or when they may be drawn, any more than it is possible to offer such a test for deciding what changes or adaptations are significant. Indeed, so far as the second of those issues is concerned, it would be wrong to attempt to reformulate the statutory language when it is the words of the definition to which effect must be given. What is clear, however, is that demonstrating some change to, or adaptation of, traditional law or custom or some interruption of enjoyment or exercise of native title rights or interests in the period between the Crown asserting sovereignty and the present will not necessarily be fatal to a native title claim. Yet both change, and interruption in exercise, may, in a particular case, take on considerable significance in deciding the issues presented by an application for determination of native title. The relevant criterion to be applied in deciding the significance of change to, or adaptation of, traditional law or custom is readily stated (though its application to particular facts may well be difficult). The key question is whether the law and custom can still be seen to be traditional law and traditional custom. Is the change or adaptation of such a kind 48 (1971) 17 FLR 141 at 151-165. that it can no longer be said that the rights or interests asserted are possessed under the traditional laws acknowledged and the traditional customs observed by the relevant peoples when that expression is understood in the sense earlier identified? Interruption of use or enjoyment, however, presents more difficult questions. First, the exercise of native title rights or interests may constitute powerful evidence of both the existence of those rights and their content. Evidence that at some time, since sovereignty, some of those who now assert that they have that native title have not exercised those rights, or evidence that some of those through whom those now claiming native title rights or interests contend to be entitled to them have not exercised those rights or interests, does not inevitably answer the relevant statutory questions. Those statutory questions are directed to possession of the rights or interests, not their exercise, and are directed also to the existence of a relevant connection between the claimants and the land or waters in question. Secondly, account must no doubt be taken of the fact that both pars (a) and (b) of the definition of native title are cast in the present tense. The questions thus presented are about present possession of rights or interests and present connection of claimants with the land or waters. That is not to say, however, that the continuity of the chain of possession and the continuity of the connection is irrelevant. Yet again, however, it is important to bear steadily in mind that the rights and interests which are said now to be possessed must nonetheless be rights and interests possessed under the traditional laws acknowledged and the traditional customs observed by the peoples in question. Further, the connection which the peoples concerned have with the land or waters must be shown to be a connection by their traditional laws and customs. For the reasons given earlier, "traditional" in this context must be understood to refer to the body of law and customs acknowledged and observed by the ancestors of the claimants at the time of sovereignty. For exactly the same reasons, acknowledgment and observance of those laws and customs must have continued substantially uninterrupted since sovereignty. Were that not so, the laws and customs acknowledged and observed now could not properly be described as the traditional laws and customs of the peoples concerned. That would be so because they would not have been transmitted from generation to generation of the society for which they constituted a normative system giving rise to rights and interests in land as the body of laws and customs which, for each of those generations of that society, was the body of laws and customs which in fact regulated and defined the rights and interests which those peoples had and could exercise in relation to the land or waters concerned. They would be a body of laws and customs originating in the common acceptance by or agreement of a new society of indigenous peoples to acknowledge and observe laws and customs of content similar to, perhaps even identical with, those of an earlier and different society. To return to a jurisprudential analysis, continuity in acknowledgment and observance of the normative rules in which the claimed rights and interests are said to find their foundations before sovereignty is essential because it is the normative quality of those rules which rendered the Crown's radical title acquired at sovereignty subject to the rights and interests then existing and which now are identified as native title. In the proposition that acknowledgment and observance must have continued substantially uninterrupted, the qualification "substantially" is not unimportant. It is a qualification that must be made in order to recognise that proof of continuous acknowledgment and observance, over the many years that have elapsed since sovereignty, of traditions that are oral traditions is very difficult. It is a qualification that must be made to recognise that European settlement has had the most profound effects on Aboriginal societies and that it is, therefore, inevitable that the structures and practices of those societies, and their members, will have undergone great change since European settlement. Nonetheless, because what must be identified is possession of rights and interests under traditional laws and customs, it is necessary to demonstrate that the normative system out of which the claimed rights and interests arise is the normative system of the society which came under a new sovereign order when the British Crown asserted sovereignty, not a normative system rooted in some other, different, society. To that end it must be shown that the society, under whose laws and customs the native title rights and interests are said to be possessed, has continued to exist throughout that period as a body united by its acknowledgment and observance of the laws and customs. Abandonment or expiry? Describing the consequences of interruption in acknowledgment and observance of traditional laws and customs as "abandonment" or "expiry" of native title is apt to mislead. "Abandonment" might be understood as suggesting that there has been some conscious decision to abandon the old ways, or to give up rights and interests in relation to the land or waters. Demonstrating continuous acknowledgment and observance of traditional laws and customs would, of course, negate any suggestion of conscious decision to abandon rights or interests. But the inquiry about continuity of acknowledgment and observance does not require consideration of why, if acknowledgment and observance stopped, that happened. That is, continuity of acknowledgment and observance is a condition for establishing native title. If it is not demonstrated that that condition was met, examining why that is so is important only to the extent that the presence or absence of reasons might influence the fact-finder's decision about whether there was such an interruption. "Expiry" may be a more neutral term than "abandonment". It does not invite attention to what those who held native title may have thought or intended at the time that acknowledgment and observance of traditional law and custom ceased. Even so, it is a term that may distract attention from the terms in which native title is defined. That is reason enough to conclude that its use is unhelpful for it is the words of the Native Title Act to which the inquiry must always return. Conclusions It follows from what has been said, that the majority of the Full Court were wrong to locate questions about continuity of acknowledgment and observance of traditional law and custom in par (c) of the definition of native title. It also follows that it is wrong to read par (c) of that definition as incorporating notions of extinguishment by expiry of native title into the definition of native title. Rather, as these reasons have sought to demonstrate, questions of the kind presented for decision in this matter focus more upon the requirements of par (a) of that definition than they do on the requirements of par (c). The claimants contended that, the primary judge and the Full Court having misdirected themselves as to applicable legal principle, the findings of fact made at trial, and endorsed on appeal, were misdirected. At first the claimants submitted that the matter should be remitted for retrial, a course which would have imposed very large burdens on all parties to the proceeding and could properly be said to be "a most deplorable result"49. Having regard to those, and perhaps other considerations, the claimants, supported by some respondents, reformulated the relief sought in this Court and submitted that the matter should be remitted for further hearing, albeit on terms that no further evidence be adduced except by leave of the Federal Court. The critical question is whether the errors of law which were made at trial bore, in any relevant way, upon the primary judge's critical findings of fact that the evidence did not demonstrate that the claimants and their ancestors had continued to acknowledge and observe, throughout the period from the assertion 49 Balenzuela v De Gail (1959) 101 CLR 226 at 243 per Windeyer J referring to Scott v Scott (1863) 3 Sw & Tr 319 at 322 [164 ER 1298 at 1299] and Dakhyl v Labouchere [1908] 2 KB 325 at 327. of sovereignty in 1788 to the date of their claim, the traditional laws and customs in relation to land of their forebears, and that "before the end of the 19th century, the ancestors through whom the claimants claim title had ceased to occupy their traditional lands in accordance with their traditional laws and customs". If those findings of fact stand unaffected by error of law, the claimants' claim to native title fails and their appeal should be dismissed. These findings were findings about interruption in observance of traditional law and custom not about the content of or changes in that law or custom. They were findings rejecting one of the key elements of the case which the claimants sought to make at trial, namely, that they continued to observe laws and customs which they, and their ancestors, had continuously observed since sovereignty. More fundamentally than that, they were findings that the society which had once observed traditional laws and customs had ceased to do so and, by ceasing to do so, no longer constituted the society out of which the traditional laws and customs sprang. In the Full Court, the claimants submitted that the primary judge's conclusions reflected a search for absolute identity between the laws and customs now observed with those that were observed at sovereignty. This attack failed, and was not renewed in this Court. In any event, however, the findings we have identified are more radical than is acknowledged by arguments about the particular content of laws and traditions at particular times. They are findings that the forebears of the claimants had ceased to occupy their lands in accordance with traditional laws and customs and that there was no evidence that they continued to acknowledge and observe those laws and customs. Upon those findings, the claimants must fail. The appeal should be dismissed with costs. Kirby GAUDRON AND KIRBY JJ. This is an appeal from a decision of the Full Federal Court of Australia which, by majority (Branson and Katz JJ, Black CJ dissenting), dismissed an appeal from a determination by Olney J that native title does not exist in relation to an area of land and waters in northern Victoria and southern New South Wales including parts of the Murray River50. It is convenient to refer to that area of land as "the claim area". The claimant group It is not in issue that the claim area was occupied by Aboriginal people in 1788 and that they continued in occupation until dispossessed by European settlers. It was found at first instance that two Aboriginals, Edward Walker and Kitty Atkinson/Cooper, who were born in approximately 1830 within the claim area, were descended from those original inhabitants. It was further found that very many of the persons who claim to be members of the Yorta Yorta and descended Aboriginal Community from Edward Walker are Definition of native title Before turning to the issues presented by this appeal, it is necessary to note that, at all relevant times, s 223(1) of the Native Title Act 1993 (Cth) ("the Act") has defined "native title" and "native title rights and interests" to mean: "the communal, group or individual rights and interests of Aboriginal peoples or Torres Strait Islanders in relation to land or waters, where: interests are possessed under the the rights and traditional traditional customs observed, by the Aboriginal peoples or Torres Strait Islanders; and laws acknowledged, and the the Aboriginal peoples or Torres Strait Islanders, by those laws and customs, have a connection with the land or waters; and the rights and interests are recognised by the common law of Australia." That definition speaks in the continuous present so that it is necessary under ss 223(1)(b) and (c) that native title claimants have a present connection 50 Yorta Yorta v Victoria (2001) 110 FCR 244. Kirby with the land or waters claimed and that the rights and interests claimed are presently recognised by the common law. So, too, under s 223(1)(a), it is necessary that traditional laws are presently acknowledged and traditional customs presently observed. As a matter of ordinary language, however, the word "traditional" imports a necessity for continuity with the past. The decision at first instance At first instance, Olney J noted the definition of "native title" and "native title rights and interests" in s 223(1) of the Act and, by reference to that definition and statements to be found principally in Mabo v Queensland [No 2]51, expressed the view that it was necessary for the claimants to prove four matters, namely: "that the members of the claimant group ... are descendants of the indigenous people who occupied (in the relevant sense) the claimed area prior to the assertion of Crown sovereignty"; "the nature and content of laws acknowledged, and the traditional customs observed by the indigenous people, in relation to their traditional land"; traditional the "that the traditional connexion with the land of the ancestors of the claimant group has been substantially maintained since the time sovereignty was asserted"; and "the claimed rights and interests [are] rights and interests recognised by the common law of Australia". For present purposes, it is sufficient to refer to the second and third of the matters identified by Olney J as necessary before native title could be held to exist in the claim area. To the extent that it repeats the substance and requirements of s 223(1)(a) of unexceptionable. Thus, because native title is the creature of traditional laws and customs, it is necessary to prove the nature and content of the rights and interests thus created and to establish that they are possessed under traditional laws acknowledged and customs observed. However, it is not necessary, pursuant to s 223(1)(a), to establish that those rights and interests have been continuously availed of in relation to land, or, even, that they are presently availed of. the second requirement the Act, 51 (1992) 175 CLR 1. Kirby The third of the requirements specified by Olney J, namely, that "traditional connexion with the land ... has been substantially maintained since the time sovereignty was asserted" does not, in terms, find expression in s 223(1) of the Act. Rather, s 223(1)(b) requires only that there be a present connection to land or waters. The terms of s 223(1)(b) also indicate the nature of the requisite connection, namely, "by [the traditional] laws and customs [acknowledged and observed]". That paragraph does not require that the connection be physical, much less continuing occupancy. Spiritual connection by laws acknowledged and customs observed falls comfortably within the words of s 223(1)(b). Save for the requirement that members of the claimant group be descendants of those who occupied the claimed area in 1788, the matters specified by Olney J did not assume great significance in his Honour's judgment. Rather, his Honour traced aspects of the dispossession of the original inhabitants of the claim area, including the establishment of the Maloga mission in 1874. Edward Walker and Kitty Atkinson/Cooper were recorded as having been at Maloga mission in 1877 and 1874, respectively. His Honour accepted that the establishment of the Maloga mission was the source of much disruption to traditional aboriginal life, including by the suppression of indigenous languages and traditional practices. In 1881, some 42 Aboriginals, some of whom had been associated with the Maloga mission, including a son of Edward Walker and some descendants of Kitty Atkinson/Cooper, petitioned the Governor of New South Wales, for a grant of land to "cultivate and raise stock", stating that "all the land within [their] tribal boundaries ha[d] been taken possession of" and that they were "earnestly desirous of settling down to more orderly habits of industry". On the basis of that petition, Olney J concluded that: "by 1881 those through whom the claimant group now seeks to establish native title were no longer in possession of their tribal lands and had, by force of the circumstances in which they found themselves, ceased to observe those laws and customs based on tradition which might otherwise have provided a basis for the present native title claim". His Honour added that "the dispossession of the original inhabitants and their descendants ha[d] continued through to the present time" and, a little later, observed that "[n]o group or individual has been shown to occupy any part of the land in the sense that the original inhabitants can be said to have occupied it". After referring to current beliefs and practices by members of the claimant group, which his Honour found to be of recent origin or, at least, not to have been Kirby proved to be part of the law or custom of the original inhabitants, Olney J concluded: "The evidence does not support a finding that the descendants of the original inhabitants of the claimed land have occupied the land in the relevant sense since 1788 nor that they have continued to observe and acknowledge, throughout that period, the traditional laws and customs in relation to land of their forbears. The facts in this case lead inevitably to the conclusion that before the end of the 19th century the ancestors through whom the claimants claim title had ceased to occupy their traditional lands in accordance with their traditional laws and customs. The tide of history has indeed washed away any real acknowledgement of their traditional laws and any real observance of their traditional customs." The decision of the majority in the Full Court In the Full Court, Branson and Katz JJ upheld the decision of Olney J on the basis that a reading of the whole of his Honour's judgment and of par 129, which contains the conclusion set out immediately above, makes it plain that: "his Honour was not satisfied that it had been shown that, throughout the entire period of time between 1788 and the date of the appellants' claim, the relevant indigenous community had maintained its character as an identifiable community the members of which lived under its laws and customs."52 Indeed, their Honours were of the view that Olney J "was positively satisfied that the relevant community had, before the end of the 19th century, abandoned its traditional way of life and its traditional culture and thus ceased to exist as a traditional indigenous community"53. Section 223(1)(c) of the Act and continuity as traditional indigenous community The notion of continuity as a traditional community does not, in terms, find expression in the definition of "native title" or "native title rights and interests" in s 223(1) of the Act. The majority in the Full Court took the view that continuity of community was necessitated by s 223(1)(c) of the Act which 52 (2001) 110 FCR 244 at 292 [191]. 53 (2001) 110 FCR 244 at 292 [191]. Kirby requires that native title rights and interests be recognised by the common law. In this regard, their Honours said: "s 223(1)(c) incorporates into the statutory definition of native title the requirement that, in the case of a claimed communal title, the holders of the native title are members of an identifiable community 'the members of whom are identified by one another as members of that community living under its law and customs'54 ... and that that community has continuously since the acquisition of sovereignty by the Crown been an identifiable community the members of which, under its traditional laws observed and traditional customs practised, possessed interests in the relevant land"55. (emphasis added) The requirement in s 223(1)(c) of the Act is that the rights and interests claimed as native title be "recognised by the common law of Australia". Native title owes its existence and incidents to traditional laws and customs, not to the common law. The role of the common law is limited to the recognition and protection of native title. That recognition and protection depends on native title not having been extinguished and its not having incidents that are repugnant to the common law. Thus, as was said in Commonwealth v Yarmirr, s 223(1)(c) "requires examination of whether the common law is inconsistent with the continued existence of the rights and interests that owe their origin to Aboriginal 54 Mabo v Queensland [No 2] (1992) 175 CLR 1 at 61 per Brennan J. 55 (2001) 110 FCR 244 at 275 [108] per Branson and Katz JJ. 56 (2001) 75 ALJR 1582 at 1600 [76] per Gleeson CJ, Gaudron, Gummow and Hayne JJ, 1617 [175]-[176] per McHugh J, 1631-1633 [254]-[259] per Kirby J; 184 ALR 113 at 139, 162, 182-184. See also Mabo v Queensland [No 2] (1992) 175 CLR 1 at 58-63 per Brennan J, 110 per Deane and Gaudron JJ, 178 per Toohey J; Wik Peoples v Queensland (1996) 187 CLR 1 at 84-85 per Brennan CJ, 213 per Kirby J; Fejo v Northern Territory (1998) 195 CLR 96 at 128 [46] per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ, 148-149 [101], 150-151 [105]-[106] per Kirby J; Yanner v Eaton (1999) 201 CLR 351 at 371-373 [32]-[37] per Gleeson CJ, Gaudron, Kirby and Hayne JJ, 382-384 [72]-[75], 399- 400 [122]-[123] per Gummow J; Western Australia v Ward (2002) 76 ALJR 1098 at 1109 [20]-[21] per Gleeson CJ, Gaudron, Gummow and Hayne JJ, 1212 [568], 1215-1216 [584] per Kirby J, 1227-1228 [629] per Callinan J; 191 ALR 1 at 17-18, 158, 163 and 179; Wilson v Anderson (2002) 76 ALJR 1306 at 1307-1308 [4] per Gleeson CJ, 1315-1316 [46]-[47] per Gaudron, Gummow and Hayne JJ, 1331 [137], 1332-1333 [144]-[145] per Kirby J; 190 ALR 313 at 315, 326, 347 and 350. Kirby The majority in the Full Court erred in holding that s 223(1)(c) requires continuity of traditional community as a prerequisite to a determination that native title exists. However, to say that continuity of a traditional community is not mandated by s 223(1)(c) is not to say that it is irrelevant to the existence of native title. Continuity, including continuity of community, is a matter that bears directly on the question whether present day belief and practices can be said to constitute acknowledgement of traditional laws and observance of traditional customs. As the focus of much of the argument in this case has been upon the word "traditional", it is convenient, at this point, to consider the nature and extent of the continuity necessary before laws and customs can properly be described as traditional. As a matter of ordinary usage, the word "traditional" does not necessarily signify rigid adherence to past practices. Rather, it ordinarily signifies that that which it describes has been handed down from generation to generation, often by word of mouth57. As and when it occurred, European settlement almost certainly rendered the observance of traditional practices impracticable in a number of respects. So much was impliedly recognised in the Preamble to the Act which "sets out considerations taken into account by the Parliament", including that Aboriginal people and Torres Strait Islanders had been "progressively dispossessed of their lands"58. In the face of the acknowledged history of dispossession, it must be accepted that laws and customs may properly be described as "traditional" for the purposes of s 223(1) of the Act, notwithstanding that they do not correspond exactly with the laws and customs acknowledged and observed prior to European settlement. What is necessary for laws and customs to be identified as traditional is that they should have their origins in the past and, to the extent that they differ from past practices, the differences should constitute adaptations, alterations, modifications or extensions made in accordance with the shared values or the 57 See, for example, The Macquarie Dictionary 3rd ed, (1997) at 2242 which defines "tradition" as "the handing down of statements, beliefs, legends, customs, etc, from generation to generation, especially by word of mouth or by practice" and Australian Oxford Dictionary (1999) at 1419 which defines "tradition" as "1a a custom, opinion, or belief handed down to posterity esp orally or by practice. b this process of handing down. 2 esp an established practice or custom". 58 Native Title Act 1993 (Cth). Kirby customs and practices of the people who acknowledge and observe those laws and customs. As already indicated, Olney J held that various current practices of the claimant group were of recent origin or not part of the law or custom of the original inhabitants. Thus, for example, his Honour observed of the current reburial practices in relation to those whose remains had been removed from Aboriginal burial sites for scientific and other purposes were "not part of the traditional laws and customs handed down from the original inhabitants." His Honour did not consider whether the reburial practices had their origins in the past in that, for example, they had evolved out of earlier practices or constituted an adaptation of earlier laws or customs, with the consequence that they had a sufficient degree of continuity with the past that they could properly be described as traditional for the purposes of s 223(1)(a) of the Act59. Continuity of community is also a matter that bears directly on the question whether laws and customs are properly described as traditional. In Mabo [No 2], Toohey J pointed out that a society must be "sufficiently organized to create and sustain rights and duties" for there to be a system of land utilization determined by that society60. So, too, a society must be sufficiently organised and cohesive to sustain beliefs and practices having normative influence and which, on that account, are recognisable as laws. Further, it must be sufficiently organised and cohesive to adapt, alter, modify or extend rights and duties if subsequent practices are to be seen as adaptations, alterations, modifications or extensions of laws previously acknowledged and, thus, as "traditional laws acknowledged" for the purposes of s 223(1)(a) of the Act. Ordinarily, lack of continuity as a community will provide the foundation for a conclusion either that current practices are not part of traditional laws or customs, or that traditional laws and customs are no longer acknowledged and observed. However, the question whether a community has ceased to exist is not one that is to be answered solely by reference to external indicia or the observations of those who are not or were not members of that community. The question whether there is or is not continuity is primarily a question of whether, throughout the period in issue, there have been persons who have identified themselves and each other as members of the community in question. 59 cf Commonwealth v Yarmirr (2001) 75 ALJR 1582 at 1600 [76] per Gleeson CJ, Gaudron, Gummow and Hayne JJ, 1640 [287]-[289], 1642 [295]-[296], 1647 [316] per Kirby J; 184 ALR 113 at 139, 194-195, 196-197, 203-204. 60 (1992) 175 CLR 1 at 187. Kirby Nor is the question whether a community has ceased to exist as a community to be answered by reference to physical presence in a particular place. Communities may disperse and regroup. To the extent practicable, individuals may, on the dispersal of a community, continue to acknowledge traditional laws and observe traditional customs so that, on regrouping, it may be that it can then be said that the community continues to acknowledge traditional laws and observe traditional practices. Although lack of continuity of community is directly relevant to the question whether native title exists, for present purposes the relevant questions were whether traditional laws and customs are acknowledged and observed and whether, by those laws and customs, the claimants have a connection with land and waters in the claim area. Those questions were not answered by the majority in the Full Court. That might not prove an obstacle to their being answered in this appeal were it not for the fact that Olney J did not find that the Yorta Yorta people had ceased to exist as "an identifiable community, the members [of which lived] under its laws and customs"61. Moreover, neither his Honour nor the majority in the Full Court considered the question whether, throughout the period, there were persons of aboriginal descent who identified themselves and others as Yorta Yorta people bound together by ancestry and by shared beliefs and practices. Sections 223(1)(a) and (b) of the Act: traditional laws and customs; connection with land and waters Relevant to the definition of "native title" and "native title rights and interests" in s 223(1) of the Act, Olney J found that "[t]he tide of history [had] ... washed away any real acknowledgement [by the Yorta Yorta people] of their traditional laws and any real observance of their traditional customs." That is a finding of fact and, although expressed in terms of a metaphor, unless it involves an error of law, that finding must lead to the conclusion that par (a) of the definition in s 223(1) of the Act has not been satisfied and, thus, that native title does not exist in the claim area. Although the conclusion of Olney J that history had "washed away any real acknowledgement of ... traditional laws and any real observance of ... traditional customs" is expressed in terms which closely follow the wording of s 223(1)(a) of the Act, it is clear from its context that his Honour was not concerned with the acknowledgement of traditional laws and observance of traditional customs pursuant to which the claimant group might establish a 61 (2001) 110 FCR 244 at 292 [190] per Branson and Katz JJ quoting Brennan J in Mabo v Queensland [No 2] (1992) 175 CLR 1 at 61. Kirby connection with land or waters in the claim area but with laws and customs specifically relating to the utilisation or occupation of the land and waters claimed. Thus, his Honour's conclusion was prefaced by the statement that the evidence did not "support a finding that the descendants of the original inhabitants ... have occupied the land in the relevant sense since 1788 nor that they have continued to observe and acknowledge, throughout that period, the traditional laws and customs in relation to land of their forebears". There are other indications that his Honour was concerned solely to identify acknowledgement of laws and observance of customs with respect to the utilisation or occupation of land. Thus, for example, his Honour observed that "[n]o group or individual has been shown to occupy any part of the land in the sense that the original inhabitants can be said to have occupied it." But of greater significance is his Honour's earlier statement that, for the native title claim of the Yorta Yorta people to succeed, "it must be demonstrated that the traditional connexion with the land of the ancestors of the claimant group has been substantially maintained since the time sovereignty was asserted". What the Act is required by ss 223(1)(a) and (b) of the acknowledgement of traditional laws and the observance of traditional customs by which particular Aboriginal or Torres Strait Islanders have a connection to the land and that they possess rights and interests in relation to that land under those laws and customs. There is nothing in that paragraph or any other part of the definition of "native title" or "native title rights and interests" which that "traditional connexion with the land ... [be] substantially maintained". His Honour's erroneous view that that was required was an error of law affecting the reasoning process which led to the finding that "the tide of history ha[d] washed away any real acknowledgement [by the Yorta Yorta people] of their traditional laws and any real observance of their traditional customs". It may be that the error which we have identified above occurred because the appellants assumed the burden of establishing a continuing and substantial traditional connection with the land through their direct forebears, including Edward Walker and Kitty Atkinston/Cooper. However, the source of the error is immaterial. The relevant issue under ss 223(1)(a) and (b) of the Act is simply whether the Yorta Yorta people now acknowledge and observe traditional laws and customs by which they have a connection with the land and waters claimed by them. Conclusion The appeal should be allowed with costs, the order of the Full Court should be set aside and, in lieu thereof, the appeal to that Court should be allowed with costs and the matter remitted to Olney J to be determined in accordance with these reasons. The costs of the proceedings at first instance Kirby should abide the outcome of the further determination by Olney J of the appellants' claim. McHugh 126 McHUGH J. The majority of the Full Court of the Federal Court held that s 223(1)(c) of the Native Title Act 1993 (Cth) invokes the common law requirement of a continuity of traditional community as a condition of a determination that native title exists. This holding is contrary to the holdings of the majority of and Western Australia v Ward63. in Commonwealth v Yarmirr62 this Court Again in this case, Gleeson CJ, Gummow and Hayne JJ declare64: "It follows that the reference in par (c) of s 223(1) to the rights or interests being recognised by the common law of Australia cannot be understood as a form of drafting by incorporation, by which some pre-existing body of the common law of Australia defining the rights or interests known as native title is brought into the Act. To understand par (c) as a drafting device of that kind would be to treat native title as owing its origins to the common law when it does not. And to speak of there being common law elements for the establishment of native title is to commit the same error. It is, therefore, wrong to read par (c) of the definition of native title as requiring reference to any such body of common law, for there is none to which reference could be made." Given the decisions in Yarmirr and Ward, the above statement concerning the construction of the Act must be accepted as correct. However, I remain unconvinced that the construction that this Court has placed on s 223 accords with what the Parliament intended. In Yarmirr, I cited statements from the Ministers in charge of the Act when it was enacted in 1993 and when it was amended in 1997. They showed that the Parliament believed that, under the Native Title Act, the content of native title would depend on the developing common law. Thus, Senator Evans told the Senate in 199365: "We are not attempting to define with precision the extent and incidence of native title. That will be a matter still for case by case determination through tribunal processes and so on. The crucial element of the common law is the fact that native title as such, as a proprietary right capable of being recognised and enjoyed, and excluding other 62 (2001) 75 ALJR 1582; 184 ALR 113. 63 (2002) 76 ALJR 1098; 191 ALR 1. 64 Reasons at [76]. 65 Australia, Senate, Parliamentary Debates (Hansard), 16 December 1993 at 5097. McHugh competing forms of proprietary claim, is recognised as part of the common law of the country". (emphasis added) Similarly, Senator Minchin told the Senate in 199766: "I repeat that our [A]ct preserves the fact of common law; who holds native title, what it consists of, is entirely a matter for the courts of Australia. It is a common law right." (emphasis added) Section 12 of the Native Title Act 1993 also made it clear that the content of native title under that Act was to be determined in accordance with the developing common law. Section 12 provided: "Subject to this Act, the common law of Australia in respect of native title has, after 30 June 1993, the force of a law of the Commonwealth." In Western Australia v The Commonwealth (Native Title Act Case)67, however, this Court held that s 12 was invalid. In the Native Title Act Case, six justices of the Court said: "If s 12 be construed as an attempt to make the common law a law of the Commonwealth, it is invalid either because it purports to confer legislative power on the courts or because the enactment of the common law relating to native title finds no constitutional support in s 51(xxvi) or (xxiv)." Section 12 has now been removed from the statute book. But its enactment in the 1993 Act shows that the Parliament intended native title to be determined by the common law principles laid down in Mabo v Queensland [No 2]68, particularly those formulated by Brennan J in his judgment in that case. When s 223(1)(c) of the 1993 Act referred to the rights and interests "recognised by the common law of Australia", it was, in my view, referring to the principles expounded by Brennan J in Mabo [No2]. But this Court has now given the concept of "recognition" a narrower scope than I think the Parliament intended, and this Court's interpretation of s 223 must now be accepted as settling the law. As a result, the majority judges in the Full Court erred when they approached the case in the manner that they did. 66 Australia, Senate, Parliamentary Debates (Hansard), 2 December 1997 at 10171. 67 (1995) 183 CLR 373 at 486-487. 68 (1992) 175 CLR 1. McHugh Nevertheless, as the judgment of Gleeson CJ, Gummow and Hayne JJ shows69, the trial judge found that "the forebears of the claimants had ceased to occupy their lands in accordance with traditional laws and customs and that there was no evidence that they continued to acknowledge and observe those laws and customs." Those findings were not influenced by any error of law. Because that is so, the claimants must fail. The appeal should be dismissed with costs. 69 Reasons at [69]. Callinan CALLINAN J. The appellants claim to be members of the Yorta Yorta community of aboriginal people, and to be entitled to a determination of native title in their favour in respect of both unalienated and alienated land and waters within a total area of approximately 5,000 square kilometres70 ("the region"). The region includes land in New South Wales and Victoria. It straddles the Murray River. Many people, State polities, and local authorities, of whom about 500 in total chose to be represented in the proceedings, have proprietary and other interests in the region, including of course South Australia, into which the river flows and from which it enters the sea. The Primary Proceedings The claim was made by application to the Native Title Registrar on 21 February 1994. The applicant was "The Yorta Yorta Murray Goulburn Rivers Clans Incorporated". The application was said to be made on behalf of the Yorta Yorta Aboriginal community without identifying any natural persons. An incorporated body did not answer the description of "a person or persons claiming to hold the native title either alone or with others" contained in s 61(1) of the Native Title Act 1993 (Cth) ("the Act"). Application was subsequently made to the National Native Title Tribunal to substitute eight named persons as applicants on behalf of the members of the Yorta Yorta Aboriginal community. Those named were Ella Anselmi, Wayne Atkinson, Geraldine Briggs, Kenneth Briggs, Elizabeth Hoffman, Desmond Morgan, Colin Walker and Margaret Wirapunda. The application was referred to the Federal Court and proceeded with these eight persons as claimants. Those persons, the claimant group, are described generally as the members of the Yorta Yorta Aboriginal community, and more particularly as men, women and children of Aboriginal descent who are descendants of the original inhabitants of the region, as identified on a map attached to the application. There was no evidence offered to indicate the precise basis upon which the boundary of the region was drawn. It was not related to any identifiable geographic or other feature. Within it are a number of substantial towns, including Shepparton, Mooroopna, Echuca, Mathoura, Yarrawonga and Wangaratta. Those parts of the region which were the subject of the claim to native title will be referred to as "the claimed land" and are more fully described in schedules to the application, and in the application itself in this way: "The area claimed is 'public land' including an area of approximately 5 hectares of land, being an ochre mine which exists on a 42,000 acre grazing occupation permit held by the Registered Proprietor of a 2071 70 As scaled from the "Map of Claim Area" tendered in evidence before Olney J. Callinan hectare property known as Moira Station ('the property'). A full title search of the property is set out in Schedule 1. Public land areas within the geographic boundaries of the claimed land are detailed in the attached map set forth in Schedule B ... This map, produced using a Public and Aboriginal Lands digital spatial database ('PAL') shows the geographic boundaries of the claimed land, and some of its natural features. A description of the PAL data used in the production of the map is also set out in a PAL manual at Schedule B. Details of the public lands claimed within NSW and Victoria are set out at Schedule D. The area contains a large number of archaeological sites. Some of these are set out in a Victorian Archaeological survey report (see Schedule C)." The claimed land included vacant land and other land used for various purposes such as State forest, State park, reference area, water supply reserve, water reserve, Aboriginal freehold land, flora reserve, flora and fauna reserve, vacant Crown land, reserved Crown land, park, scenic reserve, special purpose reserve, forest reserve and mine. In an amended statement of facts and contentions in the primary proceedings the appellants stated: "To dispel any doubt, the applicants' claim includes a claim to all water which, from time to time, may be found within the claimed areas, whether such waters are, at any time, stationary or flowing, or located in natural or man made water courses, dams etc. Such claims extend to the banks and beds, underlying or supporting such waters, and all natural resources found therein. Such claims do not extend to casual waters found in the claimed areas from time to time eg non-permanent pools following heavy rain." The nature and extent of the native title rights claimed were: rights to possession, occupation, use and enjoyment of the determination area, the waters, and natural resources, to the exclusion of all others; the interest of ownership of the determination area, the waters and natural resources according to traditional law and custom and the right to be recognised as the owners of the determination area, the waters, and the natural resources, according to traditional law and custom; the right to possession, occupation, use and enjoyment of the determination area, the waters and the natural resources; Callinan the right to participate to the fullest extent practicable in the making of decisions by non native title holders, being decisions made pursuant to a law, regulation, order or administrative arrangement by Government or its agencies about access to, occupation, use and enjoyment of the determination area, the waters and the natural resources, including the right to be consulted about such decisions; the right to access and occupy the determination area and the waters; rights to use and enjoy the determination area, and the waters and the natural resources, to hunt, fish, forage for traditional foods and medicines and camp; for burial, ceremonial and educational purposes; and for any other purpose deemed appropriate by the native title holders; the right to protect places and areas of importance in and on the determination area and waters." The application was determined, adversely to the appellants, at first instance by Olney J, to whom a vast array of material, both oral and written, including assertions as to the habits and customs of the appellants' ancestors and reconstructions of the past by anthropologists, was presented71. One of the first, and indeed most onerous tasks confronting his Honour, was to decide how to manage and treat all of that material. The Act did not provide any sure guidance. The appellants suffered two particular disadvantages to which regard had to be made: loss of traditional knowledge and practice because of dislocation and past exploitation; and, by reason of the lack of a written language and the absence therefore of any indigenous contemporaneous documents, the need to rely extensively upon the spoken word of their forebears, which, human experience knows, is at risk of being influenced and distorted in transmission through the generations, by, for example, fragility of recollection, intentional and unintentional exaggeration, embellishment, wishful thinking, justifiable sense of grievance, embroidery and self-interest. Anthropologists' reports which also relied to a large extent upon transmitted oral materials were liable to suffer from similar defects, as well, in this case, as his Honour held, as some lack of objectivity ordinarily to be expected of experts72. A further complication was that some witnesses on behalf of the appellants, understandably resentful of past 71 The Members of the Yorta Yorta Aboriginal Community v The State of Victoria [1998] FCA 1606. 72 The Members of the Yorta Yorta Aboriginal Community v The State of Victoria [1998] FCA 1606 at [54]. Callinan dispossession, made emotional outbursts and failed to give evidence which could be of assistance to the Court. Section 82 of the Act (the marginal note to which is "Federal Court's way of operating") was in this form when the application was made, as the evidence was led, and the case conducted: "(1) The Federal Court must pursue the objective of providing a mechanism of determination that is fair, just, economical, informal and prompt. (2) The Court, in conducting proceedings, must take account of the cultural and customary concerns of Aboriginal peoples and Torres Strait Islanders. (3) The Court, in conducting proceedings, is not bound by technicalities, legal forms or rules of evidence." Before Olney J gave judgment, s 82 was amended by the omission of sub- s (1). The section, in its new form, is as follows: "(1) The Federal Court is bound by the rules of evidence, except to the extent that the Court otherwise orders. In conducting its proceedings, the Court may take account of the cultural and customary concerns of Aboriginal peoples and Torres Strait Islanders, but not so as to prejudice unduly any other party in the proceedings." His Honour conducted the trial in accordance with the former sub-ss (1) and (2). He did raise the question whether he should apply what he described as the more stringent provision, the amended section, in his analysis of the evidence. But he resolved to decide the case on the evidence admitted during the trial in accordance with the law as it was when it was given. No submission to the contrary was made then or subsequently by any of the parties. Other amendments were made to the Act before Olney J gave judgment. Section 225 was replaced and re-enacted in a quite different form, to provide as follows: "A determination of native title is a determination whether or not native title exists in relation to a particular area (the determination area) of land or waters and, if it does exist, a determination of: (a) who the persons, or each group of persons, holding the common or group rights comprising the native title are; and Callinan the nature and extent of the native title rights and interests in relation to the determination area; and the nature and extent of any other interests in relation to the determination area; and the relationship between paragraphs (b) and (c) (taking into account the effect of this Act); and the rights and interests to the extent that the land or waters in the determination area are not covered by a non-exclusive agricultural lease or non- exclusive pastoral lease – whether the native title rights and interests confer possession, occupation, use and enjoyment of that land or waters on the native title holders to the exclusion of all others." Schedule 5, Pt 5, item 24 of the Native Title Amendment Act 1998 (Cth) provided: "The repeal of section 225 of the old Act and insertion of section 225 in the new Act by this Act apply to all determinations made after the commencement of this Act, regardless of when any native title determination application (if relevant) was made." Furthermore, s 94A (which is an entirely new provision) requires that: "An order in which the Federal Court makes a determination of native title must set out details of the matters mentioned in section 225 (which defines determination of native title)." His Honour held, and no one then or later suggested the contrary, that the case should be decided by reference to the new s 225. On the evidence, it was clear, his Honour inferred, that the region had been occupied by Aboriginal people in 1788. Colonial explorers traversed the region from as early as the 1820s. Edward M Curr was an early squatter who occupied land in it in the vicinity of Echuca. He remained there from 1841 to 1851. Later he wrote about his experiences in two books; Recollections of Squatting in Victoria: Then Called the Port Phillip District (From 1841 to 1851) ("Recollections") first published in 1883, and a more ambitious work in four volumes, The Australian Race: Its Origin, Languages, Customs, Place of Landing in Australia, and the Routes by which it spread itself over the Continent published in 1886. George Augustus Robinson, Chief Protector of Aborigines of Port Phillip from 1839 to 1849, made 22 expeditions into various parts of Victoria, recording, Callinan among other things, the distribution and identity of the Aboriginal inhabitants. Several of his journeys took him into the region. He made written records of some of these which were tendered in evidence at first instance. By about 1855 physical resistance by indigenous people had ceased largely because no doubt, the Aboriginal population of the region had been greatly reduced in number by disease and conflict. The white population had grown dramatically, and was to grow even more rapidly following the discovery of gold. A census in 1857 found only 1,769 Aborigines living in Victoria. In 1858 a Select Committee was appointed to "inquire into the present condition of the Aborigines of the colony, and the best means of alleviating their absolute wants". Missions and reserves were established in several places, ostensibly for that purpose but in the region they existed as ration depots only, at Echuca, Gunblower, Durham Ox, Wyuna, Toolamba, Cobram, Ulupna and Murchison. Local squatters were appointed "guardians". Children were relocated to stations where they could be educated apart from their parents and other traditional distractions. In the later 1860s some people, mainly children and young single women, were sent to Coranderrk near Healesville, places beyond the region. It is relevant to set out in full the primary judge's careful summary of his findings with respect to the continuing dislocation and reduction in numbers of the original inhabitants of the region73. "MALOGA MISSION In 1864 Daniel Matthews established a hardware, firearms and ships' supply store in Echuca. In the same year he attended a corroboree at Moira Lakes involving some 300 Aborigines and began visiting camps along the Murray and Goulburn Rivers. In 1865 he and his brother William took up a selection of 121 acres at Moira on the New South Wales side of the Murray. They extended their holding to 800 acres in 1868. Fringe camps already existed at Echuca by this time, and many Aboriginal people were living along the river or on nearby stations. Matthews visited Coranderrk in 1866. He had been instrumental in the transfer of a number of Echuca women and children to Coranderrk and began looking for ways to develop a similar station on the Murray. After discovering that the land which they had selected contained an area traditionally used as a meeting place the brothers decided to set aside 20 acres on the river for a mission station. They renamed their property 'Maloga'. 73 The Members of the Yorta Yorta Aboriginal Community v The State of Victoria [1998] FCA 1606 at [37]-[49]. Callinan In 1874, Matthews established a school and mission station at Maloga. His diaries record the arrival and life of many of the people who appear in the upper levels of the genealogies of the present claimants. During the early years residence at Maloga tended to be intermittent. Most of those at Maloga were from Moira, and moved between the mission, a camp at Moira Station and camps around the Moira Lakes and Barmah Forest. By the end of 1876 there were sixteen Aboriginal people in residence at Maloga, either living in the school house or camping within the grounds. Numbers increased steadily during 1877, with 30 new arrivals recorded for that year. Some of those who had been sent to Coranderrk from the Murray before Maloga was established returned. In 1880 there were 59 people on the mission. By 1882 there were 113 residents, either staying at the mission itself or at an old people's camp on the river flats while receiving rations from Matthews. In 1883 the population fluctuated between 90 and 125. In 1886 the Maloga population peaked at 153. The Maloga Mission reports suggest that those who came to it in the early years were very mobile. Most of Matthews' early efforts were directed towards getting children brought to the mission to attend school. Apart from a core group, most adults came and went; either returning to the forests along the river between Echuca and Albury, or seeking casual work on the stations of the area. In 1884 proposals for dispersing 'half castes' from missions and stations were circulated in Victoria and an Act to the same effect came into force in 1886. The Act had profound implications for many Aboriginal people living in Victoria. Extended families were split up, or forced to move away from places which had been their homes for many years. Maloga, over the New South Wales border where such provisions did not then apply, became a popular destination for some Coranderrk residents, particularly those who already had ties there by descent or marriage. Problems began to emerge at Maloga in early 1880. Many people resented moves by Matthews in the 1870s to limit traditional ceremonial activity and the sanctions imposed, such as loss of rations, if people failed to attend Christian services. Disputes arose over many aspects of life. Residents were expelled for 'immorality', for failing to attend services, and even for going to cricket matches or foot races. Matthews also saw it as his role to physically beat children and young women if they committed offences of a moral or religious nature. The Maloga men, who were in demand as labour on stations in the region, resented the intrusions on their freedom and demanded greater autonomy. When this was refused, some left. Health problems were also an issue. Tuberculosis was a common cause of death in the 1880s. The older people, born before the arrival of whites and who had survived the period of conflict immediately after white occupation, were dying out. Matthews was also fighting to retain control of Maloga. The Aborigines Protection Association (of New South Callinan Wales) placed its support behind a new manager, George Bellenger, who effectively replaced Matthews as head of the mission in 1887. In 1888, Bellenger, with the aid of disaffected Maloga residents, moved the houses, huts and most of the other buildings from Maloga to 1800 acres of land adjacent to Maloga, which had been created as a reserve in 1883. The new settlement was called Cummeragunja. (In official records and other published works the name of the new settlement is spelt in a variety of ways. In these reasons, except when quoting from such records and works, the currently accepted form, Cummeragunja, is used). CUMMERAGUNJA Bellenger proved extremely unpopular once separated from Matthews. Some residents attempted to return to Maloga. Bellenger threatened to cut off the rations of any who did so. Promises by Bellenger of individual farming lots for those who moved to Cummeragunja proved illusory. Major illnesses including typhoid also broke out. Bellenger resigned in 1891 but unrest continued under a succession of managers until George Harris was appointed in the mid 1890s. During this period many people left to set up camps along the river, or sought work on stations in the area but the recession of the early 1890s made work hard to find. Between 1895 and 1898, 20 farm lots, each of 40 acres, were established at Cummeragunja. Despite a depressed rural sector in the 1890s, floods and plagues of rabbits the block holders had succeeded in operating many of the blocks profitably by the turn of the century. Another change of manager occurred in 1905 and the blocks were resumed in 1908. At this time New South Wales was contemplating the introduction of an 'exclusion' system for 'half castes' on reserves similar to the arrangements made in 1886 in Victoria. In 1909, the Aborigines Protection Act (NSW) was passed, enabling the removal of 'any Aboriginal person who … in the opinion of the Board, should be earning a living away from the reserve'. These provisions were subsequently used to exclude some of those who protested when the blocks were resumed. Much of the land itself was subsequently leased to a neighbouring white farmer. Cummeragunja reached a peak population of 394 in 1908. By 1915 only 252 remained. The remainder had left, either as a result of direct expulsion or to keep families together when other members had been expelled. Much of the reserve land had been leased to white farmers after 1921. The irrigation system failed around 1927 and was not repaired, making it impossible to grow sufficient vegetables or even fodder for dairy cattle. Cash wages were abandoned for work on the mission in 1929 and most equipment was removed to other reserves. Employment generally became harder to find as the white work force was swelled with returned soldiers and increased settlement, and the need for labour shrunk with increasing mechanisation. In the 1930s, funding for the reserve was Callinan cut back and work became even harder to find. The problem was compounded by official policies in New South Wales which provided able bodied men and their families with no options. Aboriginal people living on reserves were not eligible for State unemployment relief. Nor were able bodied Aboriginal people eligible for rations. Many people moved to camps in Victoria where State relief and pensions were more readily available. In the mid 1930s at least forty people were already living in bag humpies at Barmah on the Victorian side of the river. the situation at Cummeragunja had deteriorated badly. Twenty one cottages had been pulled down while the occupants were away working, seemingly to prevent them returning to live on the reserve. The people at Cummeragunja were very dissatisfied with the manager who they felt used the withholding of rations as a disciplinary measure to control those who disagreed with his way of running the reserve. They were also dissatisfied with the quality of education offered, which was limited to 3rd grade primary standard by a NSW government ruling. Aboriginal children living on reserves were not legally allowed to enrol in public primary or secondary schools in New South Wales at that time. In February, 1939 all but four of the remaining families at Cummeragunja crossed over the river and set up camp near Barmah in Victoria, where those who had been expelled in earlier years had lived. After several months some people drifted back to Cummeragunja. Some of those who did, returned again after discovering no improvement at Cummeragunja. Some families stayed on the Barmah side for many years. Some moved to Melbourne. Some returned to Cummeragunja. Many others moved to Mooroopna, where other relatives were living. Many families from Cummeragunja had been working the fruit season in Mooroopna during the 1930s travelling and working as families, and camping on the river flats. During the Second World War, employment opportunities in the fruit industry increased and Mooroopna became the largest residential centre for Aboriginal people of the claim area. The war brought greater employment opportunities. As well as seasonal work such as shearing, harvesting and fruit picking it became possible to obtain work in Melbourne and other major centres. A significant group became established in Melbourne. Apart from the availability of some local work, the situation for those camped at Mooroopna was similar to that at Barmah after the walk-off. There were roughly 300 people from Cummeragunja at Mooroopna by 1941. Although many people had moved to Mooroopna, others continued to live around Barmah. The Cummeragunja population fell dramatically and in 1953 it was announced that the station would be closed. Many moved to Barmah. All but 200 acres of the reserve was released for use by neighbouring white farmers and the resident manager was removed. Some residents were Callinan moved to Echuca and Moama. Despite the closure, a small core group of people remained in Cummeragunja. In 1956 many were forced out by floods and moved to Echuca. There were 36 people living on Mooroopna tip in 1956, four families in housing commission houses and some 200 people living on the river flats. In 1957 police evicted many residents from shacks on the tip and the flats without notice and burnt their homes. In 1958, a 'transitional housing' project was established at Rumbalara near Mooroopna on five acres of Crown land. The houses were small, cold and poorly fitted out and totally inadequate for the number of people involved. Rumbalara was too small to accommodate the hundreds of people living in the area. Some people returned to Cummeragunja while others moved to other centres such as Echuca and Rushworth. In 1960 there were around 70 people living at Cummeragunja. The effective reserve had been reduced to 200 acres as a result of the leasing of land by the New South Wales government to neighbouring white farmers. After a delegation of Cummeragunja men approached the government, the New South Wales Crown Solicitor found that these leases had been improperly issued. The leases were revoked and in 1966 the land was made available to the Aboriginal people. Despite financial difficulties the people at Cummeragunja grew 50 acres of wheat and 15 acres of tomatoes in 1966, obtained some cattle and grew vegetables. A drought in 1967 provided a set back, but in 1969 the community was able to obtain a loan from the Commonwealth Capital Fund for Aboriginal Enterprises to continue its operations. In 1972 Rumbalara was officially closed as a transitional housing estate. It is now used as a medical and administrative centre, and as a meeting place. Its residents moved into houses in Shepparton, Mooroopna and other centres. Those camped over the river from Cummeragunja moved into houses in Barmah or returned to Cummeragunja. Others went to Echuca or Moama. In 1984, as a consequence of the operation of provisions of the Aboriginal Land Rights Act 1983 (NSW), an estate in fee simple in the former reserve land at Cummeragunja was vested in the Yorta Yorta Local Aboriginal Land Council. Subsequently, the Council acquired by purchase two further parcels in the same area. The whole of the land has since been leased to Cummeragunja Housing and Development Corporation for a term of 99 years expiring on 31 December 2084. The Yorta Yorta Local Aboriginal Land Council is a body corporate constituted under the Aboriginal Land Rights Act (NSW). Its membership is open to all adult Aboriginal people residing within the Yorta Yorta Local Aboriginal Land Council area and to other Aboriginal people who have an association with the Local Aboriginal Land Council area." His Honour had been invited to assess, and assessed the claims to entitlement by descent by some eighteen persons identified in a supplementary Callinan anthropological report tendered on behalf of the appellants. His Honour concluded that the descendants of Edward Walker and of Kitty Atkinson/Cooper only had been shown to have ancestors who were, in 1788, indigenous inhabitants of the claimed area74. His Honour's next step was to attempt to identify traditional laws and customs. He did this largely by recourse to Curr's writings because Curr enjoyed four relevant advantages, nothing to gain from his accounts, a large measure of corroboration by a subsequent petition to which reference will be made, a degree of rapport with the indigenous people in the region, and a last opportunity to observe an Aboriginal society before it disintegrated. He accordingly generally preferred, but did not rely exclusively upon, the writings of Curr, to conflicting, and a deal of, oral evidence at the trial. His Honour quoted and relied on passages from Recollections, some of which are regrettably condescending in tone75: "Besides the fact that the Bangerang territory was parcelled out between the two sub-tribes, [Curr's Wongatpan and Towroonban] and that fishing weirs on the numerous channels which conducted the flood-waters back into the Murray were owned by individuals, and descended to their heirs, I recollect, on one occasion, a certain portion of country being pointed out to me as belonging exclusively to a boy who formed one of the party with which I was out hunting at the time. As the announcement was made to me with some little pride and ceremony by the boy's elder brother, a man of five-and-twenty, I not only complimented the proprietor on his estate, on which my sheep were daily feeding, but, as I was always prone to fall in with the views of my sable neighbours when possible, I offered him on the spot, with the most serious face, a stick of tobacco for the fee-simple of his patrimonial property, which, after a short consultation with his elders, was accepted and paid. On two other occasions, also, if I remember right, some Blacks objected to hunt with me over certain land, on the plea that it did not belong to them. That both individuals and families amongst the Bangerang had particular rights to certain lands I have no doubt, but practically they were little insisted on. Had, however, anyone not of the tribe attempted encroachments, it would have been an instant casus belli. Amongst the Bangerang there was not, as far as could be observed, anything resembling government; nor was any authority, outside of the family circle, existent. Within the family the father was absolute. The 74 The Members of the Yorta Yorta Aboriginal Community v The State of Victoria [1998] FCA 1606 at [104]. 75 Curr, Recollections of Squatting in Victoria, (1883) at 243-247. Callinan female left the paternal family when she became a wife, and the male when he took rank as a young man. The adult male of the Bangerang recognized no authority in anyone, under any circumstances, though he was thoroughly submissive to custom. Offences against custom had sometimes a foreign aspect, and brought about wars with other tribes. Within the tribe they usually amounted to wrongs of some individuals, and for every substantial wrong custom appointed a penalty. But, though there was no government, there were certain important practices among the Bangerang which deserve to be called laws. Some of the principal of these had reference to the transfer of the young from one class to another (particularized hereafter), the knocking out of their teeth, making the ornamental scars on their backs, breasts, and arms, and restrictions with respect to food. There were also others which had reference to females. In the latter case only did infractions occur with some frequency, on which occasions, as I have already noticed, the persons aggrieved, when they chose, made their complaints publicly in the camp, and publicly vindicated their rights, the offender being often constrained by custom to go through the ordeal of having a certain number of spears thrown at him, and so run the risk of death or wounds in satisfaction for the injury done. Though each section of the Bangerang was thoroughly independent within the limits of its own territory, they were virtually one for the purposes of war. As regards war, however, as in other matters, there was no attempt to coerce any individual to join in an onslaught, or to adopt any course to which he was disinclined. A common danger or a common desire led to meetings and consultations, and so simple and uniform were interests generally that measures were usually proposed which met with the approval of all; but if anyone did dissent from them, he was at liberty to take his own course, and there was no attempt at coercion; and as there was no government, or attempt to govern, so there was no opposition. With the Wollithiga and Kailtheban the Bangerang were on very intimate terms, so that for war purposes they might almost be said to be one people. In addition, they were bound in a lesser, though a stout, friendship with the other six Bangerang-speaking septs, which, together with themselves, were surrounded by a number of tribes which looked on them as foreigners, and hated them in common; spoke a language different from theirs, and cut off stray members as opportunity offered, each tribe on its own account. Nor were these Bangerang intimacies barren of effect, for, besides a good deal of intermarriage, they did not resort to witchcraft against each other, and in the hour of need one tribe was at liberty to seek refuge in the territory of the other. At the same time, suspicion was not entirely absent amongst themselves; and had a few Bangerang men been Callinan found on the territory of any of the six tribes without some feasible explanation to offer, they would, as likely as not, have lost their lives. However, I remember, in the very early days, several of these tribes meeting together and sending a strong body of fighting men to meet the Ngooraialum at the Protectorate Station, which occupied the present site of Murchison, and I am under the impression that alliances of the sort were frequent before the coming of the white man interfered with native policy." (original emphasis) Further passages were quoted76: "It is a noteworthy fact connected with the Bangerang, … that as they neither sowed nor reaped, so they never abstained from eating the whole of any food they had got with a view to the wants of the morrow. If anything was left for Tuesday, it was merely that they had been unable to consume it on Monday. In this they were like the beasts of the forest. To- day they would feast – aye, gorge – no matter about the morrow. So, also, they never spared a young animal with a view to its growing bigger. I have often seen them, as an instance, land large quantities of fish with their nets and leave all the small ones to die within a yard of the water. When out hunting, the game captured by each was his own property. If one of the party returned unsuccessful, he rarely asked for a share of another's game, nor did he take it ill if none were given him; but, if a bachelor, he would get some roots from any female relative he might have in the camp. If an individual killed a kangaroo without assistance, it belonged to him, though it would certainly be shared with many others; but if several assisted in the capture, the animal was divided amongst the party, the man who first drew blood, I believe, receiving the skin (which was valuable) in addition to his share of the meat. The Bangerang mode of burial had nothing remarkable about it. The dead were rolled up on their opossum-rugs, the knees being drawn up to the neck with strings, when the corpse was interred in a sitting posture, or on its side, generally in a sand-hill, in which a grave about four feet deep had been excavated. A sheet of bark was then placed over the corpse, the sand 76 Curr, Recollections of Squatting in Victoria, (1883) at 262, 263, 265, 286. Callinan filled in, and a pile of logs about seven feet long and two feet high was raised over all. Round about the tomb it was usual to make a path, and not unfrequently a spear, surmounted by a plume of emu feathers, stuck at the head of the mound, marked the spot where rested the remains of the departed. Women were interred with less ceremony." By 1864 when Daniel Matthews settled in Echuca, people of many different tribal groups were living in the area. Matthews himself contributed to their dispersal. He sought to attract Aboriginal people from other parts of the country to Maloga, and adopted policies of suppressing the use of indigenous languages and the observance of traditional practices (including marriage contrary to customary laws). There was no evidence, his Honour held, to suggest that either Edward Walker or Kitty Atkinson/Cooper, or their immediate descendants continued to acknowledge the traditional laws, or observe the traditional customs of their forbears in relation to land. Olney J then discussed a petition presented to the Governor of New South Wales by 42 Aboriginal people: "To His Excellency Lord Augustus Loftus, GCB, Governor of the colony of New South Wales – The humble petition of the undersigned Aboriginal natives, residents on the Murray River in the colony of New South Wales, members of the Moira and Ulupna tribes, respectfully showeth: That all the land within our tribal boundaries has been taken possession of by the Government and white settlers; our hunting grounds are used for sheep pasturage and the game reduced and in many places exterminated, rendering our means of subsistence extremely precarious, and often reducing us and our wives and children to beggary. 2. We, the men of our several tribes, are desirous of honestly maintaining our young and infirm, who are in many cases the subjects of extreme want and semi-starvation, and we believe we could, in a few years support ourselves by our own industry, were a sufficient area of land granted to us to cultivate and raise stock. 3. We have been under training for some years and feel that our old mode of life is not in keeping with the instructions we have received and we are earnestly desirous of settling down to more orderly habits of industry, that we may form homes for our families. Callinan We more confidently ask this favour of a grant of land as our fellow natives in other colonies have proved capable of supporting themselves, where suitable land has been reserved for them. We hopefully appeal to your Excellency, as we recognise in you, The Protector specially appointed by Her Gracious Majesty the Queen 'to promote religion and education among the Aboriginal natives of the colony', and to protect us in our persons and in the free enjoyment of our possessions, and to take such measures as may be necessary for our advancement in civilization. And your petitioners, as in duty bound will ever pray." His Honour's view of the relevance and importance of the petition appears from the following77: "A number of observations can be made concerning the petition and the signatories. The petition was presented in 1881, some two years before the reserve at Cummeragunja was declared and whilst Maloga was still in operation. The petitioners are described as members of the Moira and Ulupna tribes, a description which is not found in Curr's writing but suggests that the individuals concerned identified with the two main pastoral properties in the region rather than as Bangerang or any of the other sub-groups referred to by Curr. The petition contains a frank acknowledgment that 'all land within (the petitioners') tribal boundaries has been taken possession of by the government and white settlers' a state of affairs which no doubt gave rise to their desire to change 'our old mode of life' in favour of 'settling down to more orderly habits of industry'. A number of the signatories, who apparently subscribed to these sentiments were persons who are either named in the applicants' list of the 18 known ancestors or were the children of persons so named. George Charles, Sampson Barber and Bagot Morgan are three of the 18; Freddy Walker was the son of Edward Walker; and Bobby Wilberforce (Cooper), Aaron Atkinson, Jacky Wilberforce (Cooper) and John Atkinson were children of Kitty Atkinson/Cooper. Other signatories who are readily identifiable with names on Treseder's 1891 list, prepared some 10 years after the petition, include James Coghill, Whyman McLean and Peter Stuckey. Whilst there can be little doubt that Matthews would have played a part in the composition and presentation of the petition it has not been suggested in this proceeding that the general thrust of the statements attributed to the petitioners was factually inaccurate or in any way misrepresented their views or their aspirations. In fact, the copy of the petition was 77 The Members of the Yorta Yorta Aboriginal Community v The State of Victoria [1998] FCA 1606 at [120]-[121]. Callinan tendered in the course of the applicants' counsel's opening address as evidencing a long history of efforts to obtain land. It is clear that by 1881 those through whom the claimant group now seeks to establish native title were no longer in possession of their tribal lands and had, by force of the circumstances in which they found themselves, ceased to observe those laws and customs based on tradition which might otherwise have provided a basis for the present native title claim; and the dispossession of the original inhabitants and their descendants has continued through to the present time. Although many of the claimant group reside within the claim area, many do not. No group or individual has been shown to occupy any part of the land in the sense that the original inhabitants can be said to have occupied it. The claimant group clearly fails Toohey J's test of occupation by a traditional society now and at the time of annexation78 a state of affairs which has existed for over a century. Notwithstanding the genuine efforts of members of the claimant group to revive the lost culture of their ancestors, native title rights and interests once lost are not capable of revival. Traditional native title having expired, the Crown's radical title expanded to a full beneficial title79. It is however appropriate that some mention should be made of the evidence concerning the current beliefs and practices of the claimant group." (emphasis added) His Honour continued80: "Brennan J observed in Mabo [No 2]81 that 'it is necessary to ascertain by evidence the nature and incidents of native title' and accordingly the resolution of this proceeding must depend upon the conclusions of fact which are supported by the evidence adduced. The evidence does not support a finding that the descendants of the original inhabitants of the claimed land have occupied the land in the relevant sense since 1788 nor that they have continued to observe and acknowledge, throughout that period, the traditional laws and customs in relation to land of their forebears. The facts in this case lead inevitably to the conclusion that before the end of the 19th century the ancestors through whom the claimants claim title had ceased to occupy their traditional lands in accordance with their traditional laws and customs. The tide of history has indeed washed away any real acknowledgment of their traditional 78 Mabo v Queensland [No 2] (1992) 175 CLR 1 at 192 per Toohey J. 79 Mabo v Queensland [No 2] (1992) 175 CLR 1 at 60 per Brennan J. 80 The Members of the Yorta Yorta Aboriginal Community v The State of Victoria [1998] FCA 1606 at [129]. 81 Mabo v Queensland [No 2] (1992) 175 CLR 1 at 58 per Brennan J. Callinan laws and any real observance of their traditional customs. The foundation of the claim to native title in relation to the land previously occupied by those ancestors having disappeared, the native title rights and interests previously enjoyed are not capable of revival. This conclusion effectively resolves the application for a determination of native title." His Honour did give consideration to some current practices of indigenous people in the region, which, it was said on behalf of the appellants, were traditional customs82. "There is no doubt that mounds, middens and scarred trees which provide evidence of the indigenous occupation and use of the land are of considerable importance and indeed, many are protected under heritage legislation, but there is no evidence to suggest that they were of any significance to the original inhabitants other than for their utilitarian value, nor that any traditional law or custom required them to be preserved. Another contemporary practice which is said to be part of the Yorta Yorta tradition is the conservation of food resources. A number of witnesses gave evidence that they hunt and fish on the land and in the waters of the claim area and to some limited extent, gather 'bush tucker' for their personal consumption. Of these activities fishing appears to be by far the most popular but is currently engaged in as a recreational activity rather than as a means of sustaining life. It is said by a number of witnesses that consistent with traditional laws and customs it is their practice to take from the land and waters only such food as is necessary for immediate consumption. This practice, commendable as it is, is not one which, according to Curr's observations, was adopted by the Aboriginal people with whom he came into contact and cannot be regarded as the continuation of a traditional custom. In earlier times, following European settlement in the area, it was the practice to remove skeletal remains located at Aboriginal burial sites and take them to Melbourne, and elsewhere, for scientific examination. In more enlightened times many such remains have been returned into the custody of representatives of the Aboriginal people for reinterment in the areas from which they were removed. In the claim area reburials have been conducted since about 1984. There can be no question about the importance of the returning of remains to the appropriate country but the modern practices associated with their reburial are not part of the traditional laws and customs handed down from the original inhabitants. 82 The Members of the Yorta Yorta Aboriginal Community v The State of Victoria [1998] FCA 1606 at [122]-[125]. Callinan Similar considerations apply to the extensive involvement of Yorta Yorta people in activities associated with the conservation of the timber and water resources of the area. The advent of extensive logging of, and the introduction of cattle into, the forests in the claim area together with the interference with the natural flow of the river systems for irrigation purposes are all matters about which contemporary Yorta Yorta have expressed concern and sought to be consulted. To some extent their concerns have been recognised by government authorities. But these are issues of relatively recent origin about which the original inhabitants could have had no concern and which cannot be regarded as matters relating to the observance of traditional laws and customs." His Honour did not overlook the possibility of any right of the appellants to exclude others from the region. He said this of it83: "The question of obtaining permission to enter upon or use the resources of the claim area was raised by a number of witnesses. The traditional position, according to Curr84, was that both individuals and families amongst the Bangerang had particular rights to certain lands but in practice they were rarely insisted on except in the case of an encroachment of a person not of the tribe. The evidence concerning current practices was not entirely consistent from one witness to the next. Some witnesses said that the earlier rules concerning seeking permission to enter the country of another clan no longer applied and that all Yorta Yorta now have rights in all parts of the traditional lands (Ella Anselmi …; Kenneth Briggs …). Alfred Turner said that 20-30 years ago each sub-group would ask permission to go onto the land of another subgroup but that tradition is no longer observed … Neville Atkinson (Jr) said that the Yorta Yorta can determine who will come onto Yorta Yorta land … and Gary Nelson said that a lot of Aboriginal people ask permission before entering Yorta Yorta country … But many of the senior members of the claimant group gave no evidence of any existing practice concerning the assertion of any rights to exclude others from the claim area and no-one suggested that even the former practices extended to excluding non- Aboriginals. There is overwhelming evidence that Aboriginals and non-Aboriginals alike enter, travel through, live, fish and hunt within the claim area without seeking permission other than such as may be required by State or Commonwealth law. The tide of history has undoubtedly washed away any traditional rights that the indigenous people may have 83 The Members of the Yorta Yorta Aboriginal Community v The State of Victoria [1998] FCA 1606 at [126]. 84 Curr, Recollections of Squatting in Victoria, (1883) at 244. Callinan previously exercised in relation to controlling access to their land within the claim area." In the result therefore, his Honour determined that native title did not exist in relation to the claimed land and waters. The appeal to the Full Court of the Federal Court The appellants' appeal to the Full Federal Court (Branson and Katz JJ, Black CJ dissenting) was dismissed. The appellants' arguments in the Full Court On appeal the appellants submitted that Olney J had erroneously adopted a "frozen in time" approach. The respondents disputed that. The appellants developed their submission with a contention that the trial judge had wrongly equated the existence of native title with the existence of a "traditional society" or a "traditional lifestyle". Whilst disputing this, the respondents argued that even if it were so, the finding that native title had expired by the end of the 19th century necessarily resolved the case against the appellants. A related submission by the appellants was that the trial judge failed to make the necessary findings of fact, particularly in relation to the traditional laws presently acknowledged, and the traditional customs presently observed by the members of the Yorta Yorta community. His Honour approached the matter from the wrong point in time and should have begun with the present instead of commencing with the past. They submitted that the language of the Act required that there be an assessment of the present laws and customs of the claimant group. Additionally, it was argued, the nature of an inquiry that begins in the past and examines ensuing events is, in itself, likely to result in an erroneous approach of looking exclusively to the past. The reasoning of the Full Court The Full Court were in agreement about several of the principles to be applied. Each judge accepted that the traditional laws and customs forming the foundation for native title may adapt and change. A "frozen in time" approach to the determination of native title would be an incorrect approach. The majority, Justice Branson and Justice Katz, were of the opinion that the trial judge's finding, that there was a period between 1788 and the date of the applicants' claim during which the indigenous people lost their character as a traditional Aboriginal community, was a finding that was open to the judge to make, and no case had been made out for disturbing that finding. That finding provided a complete answer to the appellants' claim and by reason of it alone the appeal should be dismissed. Callinan The Chief Justice (dissenting) concluded that although the primary judge did not adopt a strict "frozen in time" approach, he nevertheless was in error in that he applied too restrictive an approach to the concept of what is "traditional" when he made his finding that native title expired before the end of the 19th century. His Honour also considered that various aspects of the evidence should have been the subject of express findings by the primary judge. The Chief Justice would have remitted the case to the trial judge for further consideration so that appropriate findings might be made with respect to those aspects. The appeal to this Court All of the points sought to be made by the appellants in the Full Court of the Federal Court were raised again in this Court. Whilst it must be accepted that claims of native title are to be determined in accordance with and pursuant to the Act, there are many indications in it that it is in several respects an enactment of the reasoning and language of this Court (especially of Brennan J) in Mabo v Queensland [No 2]85. Sections 223 to 225 of the Act relevantly provide as follows: "223 Native title The expression native title or native title rights and interests means the communal, group or individual rights and interests of Aboriginal peoples or Torres Strait Islanders in relation to land or waters, where: the rights and interests are possessed under the traditional laws acknowledged, and the traditional customs observed, by the Aboriginal peoples or Torres Strait Islanders; and the Aboriginal peoples or Torres Strait Islanders, by those laws and customs, have a connection with the land or waters; and the rights and interests are recognised by the common law of Australia. 85 (1992) 175 CLR 1. Western Australia v Ward (2002) 76 ALJR 1098 at 1227-1228 [629] per Callinan J; 191 ALR 1 at 179. Callinan (2) Without limiting subsection (1), rights and interests in that subsection includes hunting, gathering, or fishing, rights and interests. 224 Native title holder The expression native title holder, in relation to native title, means: if a prescribed body corporate is registered on the National Native Title Register as holding the native title rights and interests on trust – the prescribed body corporate; or in any other case – the person or persons who hold the native title. 225 Determination of native title A determination of native title is a determination whether or not native title exists in relation to a particular area (the determination area) of land or waters and, if it does exist, a determination of: (a) who the persons, or each group of persons, holding the common or group rights comprising the native title are; and the nature and extent of the native title rights and interests in relation to the determination area; and the nature and extent of any other interests in relation to the determination area; and the relationship between paragraphs (b) and (c) (taking into account the effect of this Act); and the rights and interests to the extent that the land or waters in the determination area are not covered by a non-exclusive agricultural lease or a non-exclusive pastoral lease – whether the native title rights and interests confer possession, occupation, use and enjoyment of that land or waters on the native title holders to the exclusion of all others." "Native title" in s 223(1) is used interchangeably with "native title rights and interests". Each and all of these must relate to land or waters because the words "in relation to land or waters" qualify them. "Where" probably means, in context, "if and only if". Claimants, to succeed, must therefore prove that there are rights and interests, that is to say, current rights and interests currently acknowledged and observed, by an identifiable group, or an individual or individuals. That does not mean that different interests may not be held by Callinan different indigenous peoples, or that interests and rights may not be shared. The unfortunate point for the appellants is, however, that the rights and interests and the personal entitlement to them each needs to be identified. That, it seems to me, is exactly what the claimants strived, but ultimately failed to do. The group or individuals concerned must hold or own the rights under, that is, pursuant to, traditional laws or traditional customs. The repetition of the reference to the "laws and customs" and the use of the word "connection" contemplates at least a degree of continuity either of acknowledgment or observance, and possession, except arguably perhaps in exceptional cases, of which this does not appear to be one, of laws or customs which themselves contemplate discontinuity of acknowledgment or observance, or absence or departure from the land. I say that this is not such a case for the reason that no-one, and certainly not the claimants suggested otherwise. Their whole case involved a search for continuity, of occupation of the region, of families, of practices and laws, and the possession of rights and interests under traditional laws and traditional customs. Paragraph (b) of s 223(1) further requires that there must be a connexion not just with the land in question, but by the laws and customs, with that land. Paragraph (c) of s 223(1) means that the rights and interests, if and where established, to be the subject of a determination, must be recognisable by the common law. For rights and interests to be recognised by the common law they must be reasonably precise. In this context common law includes equity and contemplates the availability of all possible remedies in both branches of the law. Orders of courts, whether made in equity or in common law, to be enforceable need to be framed with clarity86. Parties placed under curial obligations to do, or abstain from doing acts need to know with certainty what their obligations are. Declarations require similar certainty. Lord Upjohn in Morris v Redland Bricks Ltd87 said that such a principle was well established in the case of mandatory injunctions but there is no reason why its application should be restricted to such cases. Furthermore, a defendant will ordinarily not be in contempt for failure to 86 For instance, equity will not provide injunctive relief in cases where it would be impossible to comply with the order sought, or where compliance, if possible, would be futile: Attorney-General v Colney Hatch Lunatic Asylum (1868) LR 4 Ch App 146 at 154. Further, if the granting of injunctive relief would result in uncertainty as to what conduct would be prohibited, ordinarily no relief will flow: Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1. 87 [1970] AC 652 at 666-667. Callinan comply with an ambiguous and imprecise undertaking, and by analogy, order88. It follows from all of s 223(1) that if there is not precision, as to the boundaries, the persons entitled, the traditional laws and customs, and the rights and interests to which they give rise, then the common law will be unable to enforce or give effect to them just as it will not recognise and enforce traditional laws that are repugnant to it89. The need for precision is reinforced by the provisions of s 225 which direct attention to the identification of, and therefore certainty with respect to, each of the matters to which I have referred, and s 185 which refers to the Register of Native Title Claims is also indicative of a need for some precision, for example, with respect to the beneficiaries of the trust upon which a body corporate is to hold the relevant rights and interests. The evidence at trial in this case dwelt heavily upon ancestral history. As Black CJ in the Full Court said90: "… it was not in controversy on the hearing of the appeal that native title will no longer exist once its foundation has disappeared by reason of the disappearance of any real acknowledgment of traditional law and real observance of traditional customs. Where such circumstances exist, the claimed rights and interests will no longer be possessed under what are truly 'traditional' laws acknowledged and customs observed." Those who were said to be the contemporary acknowledgers and observers (of the traditional laws and customs) in this case were the descendants of indigenous occupiers at 1788 of the land, and issue was joined on their ancestry at trial. That was a correct approach. The Crown's radical title was acquired in 1788. Only what then existed could burden it at that time. It was not argued by the appellants, and rightly so in my opinion, that native title could come into existence on and after the Crown's radical title was acquired. Some obscurities contained within s 223 do however need revelation, for example: what is required to satisfy the description, "traditional"; must the "tradition" be uninterrupted; what is the complete role of par (c) of s 223(1); may the common law recognise a traditional law or custom with respect to the exercise of, or entitlement to native title rights and interests which does not contain within it a means of enforcement that is itself acceptable to the common 88 Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483 at 516 per Owen J. See also Meagher, Gummow and Lehane, Equity: Doctrines and Remedies, 3rd ed (1992) at 619-621 [21 100]. 89 cf Mabo v Queensland [No 2] (1992) 175 CLR 1 at 61 per Brennan J. 90 Yorta Yorta v Victoria (2001) 110 FCR 244 at 256 [34]. Callinan law?91 The appellants' notice of appeal implicitly accepted the need for a means of effective assertion (not repugnant to the common law) in their complaint that the primary judge did not find that the appellants had "a traditionally based authority structure". In this context Brennan J asked in Mabo [No 2], whether there is an ability to assert native title effectively92. Other questions for which the section provides no ready answer are: is there a relevant starting point for the ascertainment of the law or custom; is actual presence, continuous or otherwise on the land necessary; may the traditional law or custom evolve; and, if it may, to what extent may it do so without losing its traditional character; and, what connexion by the laws and customs between the people and the land will suffice to satisfy the requirements of s 223(1)(b)? title, and, prospectively, and protection of native Not all of the questions that I have posed need to be answered definitively in this appeal. It is as well, however, before moving to those of the questions that do require answers for its disposition, to restate some propositions which may bear upon some of those answers. The purposes of the Act which appear from its objects and the overview of it contained in ss 3 and 4, are to provide for the recognition its non-extinguishment. The judgments in Mabo [No 2] made no claim to create native title. The holding is that native title existed before, and at the time of first non-indigenous settlement. It was simply that, until 1992, the courts had neither recognised nor given effect to it. The result of that decision was effectively to make native title a foster child of the common law notwithstanding its fragility, elusiveness and other marked differences from its foster parent. The existence of these weaknesses was certainly one of the main reasons for the enactment of the Act. Neither the statute nor the common law (to which it must be acceptable to gain recognition, and therefore access to the panoply of legal remedies for the obtaining, keeping and vindication of it) supplements, explains, enlarges or clarifies the relevant native title law or custom, or cures deficiencies in it. Native title is not an institution of the common law93. It must stand on its own foundations: it is sui generis94. The role of the Act and the common law is only to protect and give effect to it. 91 Mabo v Queensland [No 2] (1992) 175 CLR 1 at 51-56 per Brennan J. 92 (1992) 175 CLR 1 at 51. 93 Fejo v Northern Territory (1998) 195 CLR 96 at 128 [46] per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ. 94 Mabo v Queensland [No 2] (1992) 175 CLR 1 at 89 per Deane and Gaudron JJ, Callinan Apart from the special provisions of ss 47A and 47B95, the Act makes no provision for non-extinguishment, or revival of native title, although there are numerous sections which do provide for its extinguishment96. This is an indication of a need for continuity. I return to the questions that I earlier posed. The concept of "tradition" is central to the meaning and effect of s 223. It was at the forefront of the Prime Minister's second reading speech on the Bill on 16 November 1993. He said "native title is derived from the traditional laws and customs of indigenous people."97 The word "traditional" appears in several sections of the Act. No doubt the provisions for registration of "body corporate agreements" in Pt 2 Div 3 of the Act which, among other matters, contemplates the specification of "the manner of exercise of any native title rights and interests"98 were drawn with an eye to the deliberation to attend any departures from tradition99. Some grants of mining tenements are conditioned upon the protection and avoidance of any area "…of particular significance to the persons holding native title in accordance with their traditional laws and customs."100 There is also a reference to "traditional activities" in s 44B. The Act, unusually, rather than by regulation, sets out as part of it, the form of application for a determination of native title, including who may make an application, being a (current) holder or holders of the rights "according to their traditional laws and customs". Paragraph 1 of the form of application states101: "A person or persons authorised by all the persons (the native title claim group) who, according to their traditional laws and customs, hold the common or group rights and interests comprising the particular native title 95 These sections are concerned with native title applications in respect of vacant Crown land, or land held expressly for the benefit of or reserved for Aboriginal and Torres Strait Islander people. 96 ss 4, 11, 23A-23JB. 97 Australia, House of Representatives, Parliamentary Debates (Hansard), 16 November 1993 at 2879. 98 s 24CB(d). 99 See also s 203BE. 100 s 26A(7)(a). Callinan claimed, provided the person or persons are also included in the native title claim group…" It is important to notice that, before the Registrar of Native Title Claims may register a claim, the Registrar must be satisfied that at least one member of a native title group currently has, or previously had a traditional physical connection with particular land or water102, which strongly suggests the need for an actual presence on land. Meanings relevant to customs and practices given by the Oxford English Dictionary103 of "tradition" are: "a long established and generally accepted custom or method of procedure having almost the force of law; an immemorial usage; the body (or any one) of the experiences and usages of any branch or school of art or literature, handed down by predecessors and generally followed … an embodiment of old established custom or institution". Tradition, myth and legend are often indistinguishable, but the mere existence of either of the latter, in the sense of a fictitious narrative, or an unauthentic or non-historical story, however venerated by repetition, will not suffice of itself to establish native title rights and interests possessed under traditional laws or customs by people claiming a relevant connection with the land. All of the statutory criteria contained in s 223 read in the context of the Act as a whole must be satisfied. It seems to me that the critical elements of traditional laws and customs and "rights and interests" in the sense and context in which the words are used in s 223 are these. The rights and interests must be definable with sufficient certainty to enable them to be enforced by the common law104. They must, for the same reason, be held in relation to defined land. For their enjoyment a physical presence is essential. This is so, because, if physical presence were not a necessary component of the right or interest, then the right or interest could be enjoyed elsewhere: physical occupation, presence or possession of the land would not then be essential for the observance, participation in, or enjoyment of the right in question. The Act is concerned with title, that is title to land, and the bundle of rights and interests attaching to, or arising out of that title. The definition of the rights must be found in the traditional laws or customs. Tradition requires a high degree of continuity. It also involves intergenerational transmission, acknowledgment and observance. The traditional laws and customs to which the rights and interests owe their existence must be ones which were in existence on first non-indigenous settlement, in 1788, because it was at that time that the sovereign radical title was assumed, and upon which the native 102 s 190B(7). 103 Oxford English Dictionary, 2nd ed (1989), vol 18 at 354. 104 cf footnote 85. Callinan title became a burden. And it is those traditional laws and customs which must have continued (albeit that they may have evolved, a matter which I will discuss later) in order to give real content to the rights and interests currently asserted. It follows that in order for native title to survive (absent extinguishment), and be the subject of a determination under the Act, there must have been, in 1788, a recognisable group exercising identifiable relevant traditional laws and customs, themselves reasonably certain, on and relating to defined land, involving physical presence on it, and continuity of these, until, and at the time of the determination. The extent to which longstanding law and custom may evolve without ceasing to be traditional may raise difficult questions. The matter went uncontested in Yanner v Eaton105, although for myself I might have questioned whether the use of a motor boat powered by mined and processed liquid fuel, and a steel tomahawk, remained in accordance with a traditional law or custom, particularly one of alleged totemic significance. It is helpful however to contrast the evidence in that case with this one. The appellant there, without contradiction, indeed without any challenge, gave and called evidence capable of demonstrating between 140 and 1,300 or so years of unbroken and generally traditional enjoyment of and the undertaking of traditional activities in a particular area, an endeavour of the kind upon which the appellants here embarked but failed to achieve106. In this case, the appellants specifically, as appears from many indicators in the judgments in the Courts below, set out to satisfy the requirements of certainty that the Act demands, by proof of ownership of the rights and interests in 1788 and, or, about 1840, by certain named persons, and biological succession to them by other identified persons. Continuity, over that period, or periods, was the issue upon which the parties joined. It was the issue that the trial judge and the Full Court of the Federal Court were asked to decide. The appellants failed on this issue. On the evidence and proper meaning of the Act no other result was in my opinion likely. It follows that I would reject the approach of Black CJ, in dissent, in the Full Court. In a native title case, because of the statutory emphasis upon "tradition", and because, so far as the colony of New South Wales is concerned, radical title came into existence or was acquired in 1788, any judicial inquiry will generally start with the situation then, and trace its development until now, with due regard to the evolution of the traditions in question. To do so would not be to adopt a "frozen in time" approach. Sometimes it may well be possible to start 105 (1999) 201 CLR 351. 106 (1999) 201 CLR 351 at 402 [132]-[133]. Callinan with the present and look backwards to see whether the former is in truth a current manifestation of the latter. No matter which starting point is chosen, the relevant relationship between past, present and the land must still be established. As six Justices of this Court said in Fejo v Northern Territory107 "[t]he underlying existence of the traditional laws and customs is a necessary pre- requisite for native title but their existence is not a sufficient basis for recognising native title." (original emphasis) The trial judge did not, as Black CJ said, fail to give appropriate weight to orally transmitted accounts. If, in a particular case, they have, as Black CJ said, "potential richness and strength"108 then those qualities will no doubt serve to meet, and if appropriate, refute contemporaneous written records to the contrary. The primary judge did not think they did so here, and, in my opinion, paying due deference to his advantages as the trial judge in assessing the oral and oral based evidence, I think he was right in holding as he did. Olney J was alive to the possibility of evolution of tradition. It was only to be expected, however, that he would be influenced by the absence of evidence of any or any substantial degree of continuity. The onus was upon the appellants, and only they could speak of their contemporary and recent observance. His Honour fell into no error at the trial of the kind which Black CJ attributed to him. Nor was his Honour the primary judge in error in regarding quite intensive husbandry and agriculture on both sides of the Murray River as being incompatible with the traditional way of life of the early Aboriginal inhabitants, or any evolution of it. I would also, with respect, hold that his Honour's criticism of the fact- finding exercise performed by the primary judge was not well-founded. His Honour was confronted with more than 11,600 pages of transcript. In excess of 201 persons gave evidence before him. It would have been neither possible nor helpful for him to refer to all of the evidence upon which any of the parties relied. Correctly, sufficiently and orthodoxly his Honour referred to such of the evidence as was relevant or necessary for his decision. I would dismiss the appeal with costs. 107 (1998) 195 CLR 96 at 128 [46] per Gleeson CJ, Gaudron, McHugh, Gummow, 108 Yorta Yorta v Victoria (2001) 110 FCR 244 at 261 [55].

HIGH COURT OF AUSTRALIA Matter No S233/2008 AND THE QUEEN Matter No S236/2008 APPELLANT RESPONDENT APPELLANT AND THE QUEEN RESPONDENT Mas Rivadavia v The Queen [2008] HCA 52 Date of order: 3 September 2008 Date of publication of reasons: 6 November 2008 S233/2008 & S236/2008 Matter No S233/2008 ORDER The appeal be allowed. The orders of the Court of Criminal Appeal of the Supreme Court of New South Wales made on 5 September 2007 dismissing the appellant's appeals against conviction and sentence be set aside and, in their place, there be orders: The appeal to the Court of Criminal Appeal against conviction be allowed and the appellant's conviction be quashed. There be a new trial of the appellant. Matter No S236/2008 The appeal be allowed. The orders of the Court of Criminal Appeal of the Supreme Court of New South Wales made on 5 September 2007 dismissing the appellant's appeals against conviction and sentence be set aside and, in their place, there be orders: The appeal to the Court of Criminal Appeal against conviction be allowed and the appellant's conviction be quashed. There be a new trial of the appellant. On appeal from the Supreme Court of New South Wales Representation T A Game SC with H K Dhanji for the appellant in S233/2008 (instructed by Fragomen Global) G O'L Reynolds SC with J C Hewitt for the appellant in S236/2008 (instructed by Legal Aid Commission of New South Wales) W J Abraham QC with J G Renwick and L K Crowley for the respondent in both matters (instructed by Commonwealth Director of Public Prosecutions) Interveners M G Sexton SC, Solicitor-General for the State of New South Wales with R A Pepper intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor (NSW)) P M Tate SC, Solicitor-General for the State of Victoria with K L Walker intervening on behalf of the Attorney-General for the State of Victoria (instructed by Victorian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Mas Rivadavia v The Queen Criminal law – Appeals – Trial judge asleep for periods during trial – Whether "miscarriage of justice" under Criminal Appeal Act 1912 (NSW), s 6(1) – Whether consequences of conduct of trial judge a departure from proper conduct of trial – Whether trial judge exercised sufficient supervision and control over trial process to ensure jury paid attention to evidence – Whether supervision and control over trial so indispensable to trial by jury that failure itself gives rise to miscarriage of justice – Whether trial judge's conduct distracted jury from attending to evidence – Whether distraction of jury resulted in miscarriage of justice – Whether appearance of unfairness sufficient to constitute miscarriage of justice – Duties of trial judge and counsel in trial by jury. Criminal law – Appeals – Proviso – Whether no substantial miscarriage of justice actually occurred – Demonstration to appellate court from record of trial that accused guilty beyond reasonable doubt necessary but not sufficient condition for application of proviso – Natural limitations of appellate court acting on record of trial – Relevance of letter sent to trial judge by accused, after jury returned guilty verdict, but before sentence passed, to determining whether there was no substantial miscarriage of justice. Words and phrases – "miscarriage of justice", "substantial miscarriage of justice". Criminal Appeal Act 1912 (NSW), s 6(1). Introduction After a trial lasting 17 days in 2004 Rafael Cesan and Ruben Mas Rivadavia were convicted on 28 June 2004 of conspiracy to import ecstasy into Australia. They were sentenced to terms of imprisonment in March 2005. They appealed out of time to the New South Wales Court of Criminal Appeal against both their convictions and sentences. The Court gave them leave to appeal. A common complaint in their appeals was that the trial judge had been asleep during significant parts of the trial. The appeals to the Court of Criminal Appeal were dismissed by majority on the basis that there was no demonstrated error or prejudice to the appellants flowing from the trial judge's conduct. The appellants obtained special leave to appeal to this Court on a number of grounds. Those grounds included, among other things, that there had been a miscarriage of justice and no trial by jury as required by s 80 of the Constitution in relation to indictable offences against laws of the Commonwealth. At the commencement of the appeal the Court invited the parties to address it on the question whether, the constitutional issues apart, there had been a miscarriage of justice. At the close of oral argument the Court indicated that it would allow the appeals, set aside the convictions and remit the matters for retrials. The Court made orders to that effect. I now publish my reasons for joining in those orders. As these reasons indicate, the case invited consideration of the duty of the judge in a trial by jury. That duty extends to the supervision and control of the conduct of the trial. Where the judge is noticeably and repeatedly asleep or inattentive during the trial, there can be a miscarriage of justice. Putting to one side minor lapses, a substantial failure of that kind in the judge's duty may have imponderable effects upon the outcome of the trial which cannot be assessed by an appellate court. The trial in such a case is flawed in a fundamental respect. However apparently strong the evidence against the accused person may have been, it cannot generally be said with any confidence that there has been no substantial miscarriage of justice. The trial in this case was so flawed. There was a miscarriage of justice. It could not be said that the miscarriage was not substantial. Factual and procedural background On 31 May 2004, the appellants were charged upon indictment that between about 12 February 2002 and about 24 April 2002, at Sydney, they conspired with each other and others to import into Australia a prohibited import to which s 233B of the Customs Act 1901 (Cth) applied, namely narcotic goods consisting of a quantity of the narcotic drug commonly known as ecstasy. The weight of the drug involved was 642.5 grams and so exceeded the "commercial quantity" prescribed for the purposes of s 233B of the Act which was 500 grams. The conspiracy alleged was an offence against s 11.5 of the Criminal Code (Cth). Section 233B was repealed by the Law and Justice Legislation Amendment (Serious Drug Offences and Other Measures) Act 2005 (Cth) the relevant provisions of which commenced on 6 December 2005. An equivalent offence- creating provision was incorporated in Pt 9.1 of the Criminal Code. After a trial by jury, which commenced on 31 May 2004 and occupied 17 hearing days, the appellants were found guilty on 28 June 2004. They were not sentenced until 18 March 2005. The appellant Cesan was sentenced to imprisonment for 13 years six months, with a non-parole period of nine years. The appellant Mas Rivadavia was sentenced to imprisonment for 11 years. The appellants lodged notices of appeal against conviction and applications for leave to appeal against sentence. Those notices and applications were out of time but extensions of time were granted by the Court of Criminal Appeal. There were substantial delays between conviction and sentencing and in relation to the lodging of the notices of appeal. Those delays are not material for present purposes save to the extent that they may have affected the recollection of witnesses called to give evidence in the Court of Criminal Appeal concerning the conduct of the trial. So far as they related to conviction, the amended grounds of appeal filed on behalf of Cesan on 21 June 2007 included the ground that: "A miscarriage of justice was occasioned as a result of the fact that the trial judge was asleep for significant parts of the trial." The amended grounds of appeal filed on behalf of Mas Rivadavia on 3 July 2007 included the same ground. The Court of Criminal Appeal received affidavit evidence relevant to whether the trial judge had been asleep from time to time during the trial and the number, duration and effect of his sleep episodes. There was cross-examination on the affidavits. The Court also received two reports by a medical practitioner in respect of the trial judge and correspondence relating to the judge's retirement on the grounds of permanent disability. On 5 September 2007 the Court of Criminal Appeal, by majority (Grove and Howie JJ, Basten JA dissenting), made orders dismissing the appeals in the following terms (identical for each appellant): "1. Grant an extension of time for leave to appeal. Dismiss the appeal against conviction. Grant leave to appeal against sentence. Dismiss the appeal against sentence." On 16 May 2008 each of the appellants was granted special leave to appeal to this Court from the whole of the judgment and orders of the New South Wales Court of Criminal Appeal. Grounds of appeal The grounds of appeal for the appellant Cesan were in the following terms: "2.1 The Court of Criminal Appeal erred in holding that there was no miscarriage of justice arising from the fact that the trial judge was asleep during the course of the trial. The Court of Criminal Appeal, having found that the trial judge was asleep during the trial, erred in failing to hold that the trial did not comply with the requirements of 'trial by jury' as required by s 80 of the Commonwealth of Australia Constitution. The Court of Criminal Appeal, having found that the trial judge was asleep during the trial, erred in failing to find that the trial was held in a court which met the minimum requirements of a court for the purposes of Chapter III Commonwealth of Australia Constitution. The Court of Criminal Appeal, having found that the trial judge was asleep during the trial, erred in holding that the trial was held 'before a judge' for the purposes of s 11 of the District Court Act, The grounds of appeal for the appellant Mas Rivadavia were substantially the same. The Court invited the parties to address it first on the question whether, Ch III and s 80 of the Constitution apart and s 11 of the District Court Act 1973 (NSW) apart, there was a miscarriage of justice within the meaning of s 6(1) of the Criminal Appeal Act 1912 (NSW), whether no substantial miscarriage of justice actually occurred within the meaning of that sub-section, and whether, even if no substantial miscarriage of justice actually occurred, the proviso to s 6(1) of the Criminal Appeal Act was incapable of applying. The statutory framework Although the indictment did not so specify on its face, the offence with which each of the appellants was charged was, as indicated on the reverse of the indictment, the offence created by s 11.5 of the Criminal Code which is scheduled to the Criminal Code Act 1995 (Cth). The offence-creating part of that section provides: "(1) A person who conspires with another person to commit an offence punishable by imprisonment for more than 12 months, or by a fine of 200 penalty units or more, is guilty of the offence of conspiracy to commit that offence and is punishable as if the offence to which the conspiracy relates had been committed." The remaining sub-sections of s 11.5 are not material for present purposes. Section 233B(1) of the Customs Act provided, at the relevant time: "(1) Any person who: imports into Australia any prohibited imports to which this section applies or exports from Australia any prohibited exports to which this section applies; or shall be guilty of an offence." The District Court of New South Wales, in trying the indictments, was exercising the federal jurisdiction conferred upon the several courts of the States and Territories by s 68(2) of the Judiciary Act 1903 (Cth). The New South Wales Court of Criminal Appeal in hearing and deciding the appeals was also exercising jurisdiction under that provision1. When a State or Territory court tries a person on indictment for a Commonwealth offence in the exercise of jurisdiction conferred by s 68(2) then, by force of s 68(1), the laws of the State or Territory respecting, inter alia, the trial and conviction of accused persons on indictment apply. That application is subject to the other provisions of s 68. The laws of the State or Territory with respect to the hearing and determination of appeals arising out of any such trial or 1 See generally Zines, Cowen and Zines's Federal Jurisdiction in Australia, 3rd ed conviction also apply by virtue of s 68(1). Their application in this case was not in dispute. The jurisdiction of the District Court of New South Wales is dealt with in the District Court Act and, for present purposes, in the Criminal Procedure Act 1986 (NSW). The criminal jurisdiction of the Court is defined in the former Act as the jurisdiction conferred by Pt 42 thereof and the jurisdiction conferred "by or under any other Act or law on the Court in its criminal jurisdiction"3. Under the Criminal Procedure Act the District Court "has jurisdiction in respect of all indictable offences" other than offences prescribed by regulation4. The only prescribed offences excluded from the jurisdiction thus conferred upon the District Court are those specified in ss 12 and 19A of the Crimes Act 1900 (NSW) namely treason and murder5. The jurisdiction thereby conferred on the District Court attracted "the like jurisdiction" under s 68(2) of the Judiciary Act. Section 11(1) of the District Court Act provides: "All civil and criminal proceedings in the Court, and all business arising out of any such proceedings, shall, subject to this Act and the Jury Act 1977, be heard and disposed of before a Judge, who shall constitute the Court." Sub-section (2) is not material. Section 11(1) is to be read with s 131 of the Criminal Procedure Act which is found in Pt 3 of Ch 3 of that Act entitled "Trial procedures" and which provides: "Criminal proceedings in the Supreme Court or the District Court are to be tried by a jury, except as otherwise provided by this Part." There is an option for trial by judge alone in s 132(1) but, in respect of the trial on indictment of an offence against a law of the Commonwealth, s 80 of the Constitution requires that it be by a jury. 2 District Court Act, s 9(2)(a) and s 166. 3 District Court Act, s 9(2)(b). 4 Criminal Procedure Act, s 46. 5 Criminal Procedure Regulation 2000 (NSW), cl 4, as it stood at the time of trial and to the same effect now Criminal Procedure Regulation 2005 (NSW), cl 22. The Criminal Appeal Act provides for appeals against conviction. Section 5 of that Act confers upon a person convicted on indictment a right to appeal to the Court of Criminal Appeal: against the person's conviction on any ground which involves a question of law alone, and (b) with the leave of the court, or upon the certificate of the judge of the court of trial that it is a fit case for appeal against the person's conviction on any ground of appeal which involves a question of fact alone, or question of mixed law and fact, or any other ground which appears to the court to be a sufficient ground of appeal, and (c) with the leave of the court against the sentence passed on the person's conviction." Section 6 provides: "(1) The court on any appeal under section 5(1) against conviction shall allow the appeal if it is of opinion that the verdict of the jury should be set aside on the ground that it is unreasonable, or cannot be supported, having regard to the evidence, or that the judgment of the court of trial should be set aside on the ground of the wrong decision of any question of law, or that on any other ground whatsoever there was a miscarriage of justice, and in any other case shall dismiss the court may, notwithstanding that it is of opinion that the point or points raised by the appeal might be decided in favour of the appellant, dismiss the appeal if it considers that no substantial miscarriage of justice has actually occurred. the appeal; provided that Subject to the special provisions of this Act, the court shall, if it allows an appeal under section 5(1) against conviction, quash the conviction and direct a judgment and verdict of acquittal to be entered." Section 6(3) is not material for present purposes. Section 8 of the Act provides: "(1) On an appeal against a conviction on indictment, the court may, either of its own motion, or on the application of the appellant, order a new trial in such manner as it thinks fit, if the court considers that a miscarriage of justice has occurred, and, that having regard to all the circumstances, such miscarriage of justice can be more adequately remedied by an order for a new trial than by any other order which the court is empowered to make. Provision shall be made by rules of court for detaining the appellant until the fresh trial has terminated, or for ordering the appellant into any former custody." Evidence before the Court of Criminal Appeal The Court of Criminal Appeal received affidavit evidence from a number of persons who had been present at the trial. They were the appellant Cesan, the Crown Prosecutor Mr Bellew SC, the appellant Cesan's mother, his sister and four friends. Affidavits were also received from the appellant Mas Rivadavia's sister and his aunt. Mr Cesan's solicitor, Mr Kessels, swore a short affidavit to the effect that he had made inquiries about the existence of tapes of the trial and had been informed by the Reporting Services Branch of the Attorney-General's Department of New South Wales that no tapes existed. The Court of Criminal Appeal was divided in its opinion. The majority held in substance that there was no demonstrated error or prejudice flowing from the trial judge's conduct. Because of the majority judges' effects based approach, their findings of fact about the conduct of the trial judge were somewhat ambulatory in character. That is not a criticism of those findings, but an explanation of how the majority's reasoning affected their form. Because I do not agree with the approach taken by the majority, it is necessary to have regard to the evidentiary basis for the findings of fact made by the dissenting judge which were not inconsistent with those of the majority. A review of that evidence follows. The appellant Cesan said that, on or about the second day of the trial, when recordings of some telephone intercepts were being played to the jury, the judge was "slumped in his chair and appeared to be asleep". He raised the matter with his solicitor. His solicitor said words to the effect: "Look mate it doesn't really matter, it happens with this judge." The next day he again noticed that the judge appeared to be asleep. He would slump in his chair and his head would fall forward and it would stay down for some time. He would suddenly lift it and appear to wake up before "nodding off again". This happened several times for up to five or more minutes at a time. The judge appeared to him to be asleep on many occasions in the second week of the trial. A lot of tapes were played during that time. These episodes appeared to occur more in the afternoons than in the mornings. He did not know exactly how frequently or for how long the judge slept, but the episodes seemed to be for periods of 10, or 15, or even 20 minutes. Members of the jury often looked at the judge. He raised the matter again with his solicitor after a few days. His solicitor said that Cesan did not want to be upsetting the trial judge but he would bring it up with counsel. Cesan later spoke to counsel who said that there was nothing they could do about it. When Cesan gave his evidence, he faced the bar table and the jury. The judge was behind him. At times during cross-examination he heard a "deep rumbling noise" from behind. He eventually realised it was the sound of snoring. Some of the jury looked at the judge, rather than at Cesan or the prosecutor. Some appeared surprised and others smiled. When he first heard the noise it was soft and not particularly distracting but eventually he found it hard to concentrate on the questions. When the snoring was at its loudest the prosecutor seemed to stop asking questions. Cesan turned to the judge's associate, who shrugged her shoulders. There was a loud banging noise behind him and he looked back and saw the judge looking up startled. Questioning resumed, but after about 10 minutes he heard the snoring again. This happened a number of times while he was giving his evidence. Under cross-examination in the Court of Criminal Appeal Cesan was challenged on his estimates, but stood by them: "I have said that I heard him snoring for a period for 20 – period from between 15 and 20 minutes, and then his assistant would make some noise and then the snoring would stop." Cesan acknowledged that he had written a letter to the judge before sentencing. The letter was dated 13 December 2004. It began with the following words: "I would like to take this opportunity to thank you for what was a very fair trial, one wherein I accept the decision made by my peers and I am today at your mercy, asking for some leniency in my sentencing." He wrote of a change in his perspectives, recognition of the impact of his drug abuse on members of his family and other people around him and his commitment to a good Christian life. The letter went on: "I sincerely hope you have taken into account the above when deciding my sentence. I once again thank you and the institution you represent for allowing me very [sic] opportunity to defend myself in a fair and just trial. In no way do I hold a grudge against any of the authorities involved, since they have given me the chance to become a new man." He acknowledged in cross-examination that he had accepted that he had a very fair trial. Cesan's mother was present at the trial on every day except 31 May 2004. She had a clear view of the entire courtroom including the judge. When the judge was participating in the trial he would look at the witnesses, the jury or the lawyers and talk to them. He would turn pages, move items on his table, accept documents, move his glasses to read or look at counsel or a witness and make other small, but definite, movements. On 3 June 2004, she observed the judge sitting upright but slumped in his chair. His head was slightly forward as if he were reading. He was completely still. He had his arms resting on his desk and his hands clasped in front of his chest. He jerked abruptly when he woke up. On this occasion, he was asleep for about 10 minutes. Cesan's mother raised the matter with his solicitor in the presence of her daughter and two other friends who also gave evidence to the Court of Criminal Appeal. She asked the solicitor if he had seen the judge sleeping. The solicitor said that 85% of all the judges that her son could have had would have been much worse. This was evidently a reference to judges thought to be less favourable to accused persons. The solicitor told her that the judge fell asleep in court, but there was nothing that could be done about it. She pressed him and he said he would speak to counsel and they would talk about it later. She said that she spoke to the solicitor on at least one other occasion. Cesan's mother said that the judge fell asleep on practically every day of the trial, sometimes for only a few minutes and sometimes for up to 20 minutes. He fell asleep at least once a day every day. Some days he fell asleep a number of times in the morning and the afternoon. She began to look at her watch to see how long he slept. She was able to say that the time was between five and 20 minutes. On some occasions it would be 10 or 12 minutes, and on some occasions as long as 20 minutes. Members of the jury would smile or shrug their shoulders and look at each other and the judge. In cross-examination Cesan's mother denied that there were any days that she did not observe the judge being asleep. She acknowledged that she was not at the trial on 31 May. She denied that there was any occasion upon which she thought the judge was asleep simply by reason of the fact that he had his eyes closed. She referred to his posture and immobility. Ivan Amaro, a friend of Cesan, was present for the majority of the trial. In the early days of June he and a few others had noticed that the judge would slump back in his chair and close his eyes. He recalled joking about the fact that the judge was "just having a nap". This ceased to be a laughing matter as they suspected he was truly asleep. During quiet moments in the courtroom, a light but persistent snoring could be heard. The judge slept for anywhere between a few minutes and up to 20 minutes. This happened at the very least once a day but often more frequently. He described what happened when Cesan was giving evidence as one of the more memorable moments of the judge's sleeping patterns. He heard a loud snore. He saw the judge slumping back in his chair, eyes closed, and arms crossed. Another snore was clearly heard throughout the courtroom. He said: "What must have been 5-10 seconds seemed to be an eternity as everything and everyone came to a standstill." The judge's associate made a commotion with some papers and books and noticeable banging of the table until the judge opened his eyes. Members of the jury looked at the friends and family of Cesan during the proceedings and smiled, rolled their eyes, stared, laughed and engaged in "similar behaviour". This was most apparent when Cesan was on the stand and the judge was sleeping. In cross-examination Mr Amaro denied that the judge normally appeared to be asleep for only a few minutes. He could only recall one specific occasion of the judge sleeping while Cesan was giving evidence. He did not recall snoring on other occasions but did remember heavy breathing. Veronica Cabrera was a friend of Cesan who was present during most of his trial during June 2004. On each day that she attended the court she sat through the whole day. She said that her view was unobstructed. On 3 June 2004, towards lunch time she observed that the judge was sleeping. She mentioned this to the person beside her. Those present began murmuring amongst themselves. She continued to look at the judge to make sure she was not mistaken. She described him as slumped in his chair whereas previously he had been sitting upright. His head was tilted forward, his chin resting on his chest and his movements "erratic as if he was in and out of sleep". She said she had observed this behaviour for about 15-25 minutes before the lunch break interrupted. She said that the judge continued to sleep at various times throughout the trial. Often he would fall asleep six or more times in one session and would be asleep anywhere between five and 20 minutes. When taped evidence was being played the judge often slept for 15-20 minutes at a time. Ms Cabrera said that some of the jurors and officials dozed unchecked throughout periods when the judge was sleeping. She observed court officers attempt to wake him by banging their books loudly. She said: "It seemed as if the whole courtroom slipped into a state of irreverence." During Cesan's evidence she heard the judge snoring. The snoring subsided after a court officer banged on the table with some papers. The judge slept at some point on every day of the trial, except one day which was shorter than the others. She was cross-examined along lines similar to those of the preceding witnesses and gave broadly similar answers. Patricia Lawson, another friend of Cesan and his family, attended at least nine days of the trial in June 2004 and was there each day in the morning until lunch time. She remembered attending on days when taped telephone conversations were being played and the days when Cesan and Mas Rivadavia gave evidence, and when a witness for Cesan gave evidence. She could see everybody in the courtroom including the judge. Although she could not remember exactly what she saw on each separate occasion, she observed at various times at the trial that the judge would cross his arms, sit upright in the chair, begin to slouch a little, close his eyes, and tilt his head slightly forward and to the left. Sometimes he would jerk awake and his eyes would open suddenly, and then he would slowly close them and his head would tilt to the side again. As to the duration of these incidents, she said he would doze off many times, at least four or five during each morning or afternoon session which she attended, and seemed to be asleep for at least five minutes. She believed it was 15-20 minutes when tapes were being played and when counsel were making their submissions to the jury. She could clearly recall the judge being asleep at various times when Cesan was giving his evidence. In cross-examination she testified about the techniques used to wake the judge. These included counsel clearing their throats or knocking a microphone and a court officer moving and shuffling papers. She claimed in cross- examination that the judge was asleep for most of the trial. The shorter periods were "[p]robably a little bit longer than 5 minutes". At one point she said in cross-examination that the judge "was asleep most of the time, from my observation". Gabriela Cesan, Cesan's sister, was present on every day of the trial except the first day. In the first few days the judge would sleep for short periods, maybe two or three minutes at a time. As the trial progressed he would sleep for longer periods. If things were dragging on a bit he would sleep for 10 or 15 minutes at a time, and possibly longer. Sometimes she noticed members of the jury looking at the judge, and then looking at each other and then looking back to the judge very intently. She said: "During the times when the judge was asleep for long periods I noticed that many of the jurors appeared not to be paying attention to what was being said and would appear restless. They would fidget, look at each other, watch the judge, look around, appear to be scribbling and generally appeared to lose concentration. This was very different to how the jury reacted when the judge was awake. At those times they would appear to be paying attention, generally looking at whoever was speaking or at their papers when asked. It was very obvious to me that there was a real difference in the jury's behaviour when the judge was asleep." In cross-examination, she deposed to the snoring that occurred when Cesan was giving his evidence. She also deposed to the conversations her mother had with Cesan's solicitor who, according to her recollection, said there was nothing they could do. Another friend, Juan David Uribe, attended the trial on two days. On the first day he was there until lunch time. On the second occasion he was there for the full day. On both days he saw the judge sleep during the proceedings. It was more than half a dozen times on each day. He heard snoring. He saw people in the jury smirking and heard giggling "from the jury area". In cross-examination Mr Uribe said that counsel were making submissions on the first day that he attended the trial and that the judge appeared to be asleep while they were talking. He thought that the judge was asleep for periods of five to 10 minutes. He based his opinion that the judge was asleep on the fact that the judge's eyes were closed and the body language that he observed. On a few occasions the lawyers paused and waited for the judge to wake up. Sometimes they just kept on talking. Catalina Cal was the appellant Mas Rivadavia's sister. She had tried to attend the trial two or three times a week to give support to her brother. When at court she had a clear view of the judge. She noticed that he tended to fall asleep in the afternoons, although she could not remember exactly how many times he fell asleep each day. She saw the associate hitting or striking the bench or making noises to wake the judge up and saw the jury smiling at the loud noises the associate was making. The sleeping periods kept occurring throughout the three weeks she was at the trial. In oral evidence she said she didn't really know how long the judge had been asleep. She knew there were periods of minutes. There were no concessions in her cross-examination. Magalli Locaputo was Mas Rivadavia's aunt. She attended her nephew's trial about two or three times a week including the day her nephew gave evidence. On that day she heard snoring coming from where the judge was sitting while Mas Rivadavia was giving evidence. The judge had his head down and his eyes closed on many occasions. There were three occasions in one day on which she saw one of the court officers tapping to wake the judge. She did not observe the jury during that time but did notice a woman juror falling asleep on one occasion. In oral examination-in-chief, she said that she had heard the judge snore on a few occasions. He would snore for a short time then wake. Asked about the longest period for which the judge was asleep she said it could have been 10 to 15 minutes but she did not recall. In cross-examination she said on some occasions the judge appeared to be asleep for just a few minutes and sometimes longer than a few minutes. Prosecuting counsel at the trial, Mr Bellew SC, swore an affidavit in which he referred to the various affidavits that had been filed on behalf of Cesan. He recalled that there were occasions during the course of the trial in which the trial judge appeared to be asleep. He was not able to specify the number of those occasions although he thought it was less than the estimates given in some of the affidavit material adduced for Cesan. He had no recollection of raising his voice or clearing his throat to wake the judge. It was put to Mr Bellew in cross-examination that his focus was not necessarily on the judge at any given time. He said that when leading evidence from a witness or cross-examining his focus would be on the witness. The occasions on which he looked at the judge were generally limited to those on which he was addressing him directly. He recalled turning towards the judge on one occasion, at about the time of the morning break, to ask whether it was a convenient time to adjourn. The judge, who had his head on his chest and appeared to be asleep, responded with what he would probably call a "startle". He could not put a figure on the number of times the judge fell asleep. Asked whether he conceded that it was possible that the judge's sleeping was as widespread as indicated in the affidavit evidence he said: "It's possible, because those who have sworn the affidavits probably were in the position of observers only whereas I was dealing with a range of other things that I was in the position of at the time." No evidence was called from the solicitor or counsel who represented the appellants at trial. The medical evidence showed that at the time of the trial the judge was suffering from severe obstructive sleep apnoea. That condition was later brought under control but he developed a variable anxiety state and his capacity for continued judicial work was limited. He sought to retire from his office on the grounds of permanent disability. It is not in contention that he did retire. The judgment of the majority in the Court of Criminal Appeal The reasons for judgment of the majority in the Court of Criminal Appeal were delivered by Grove J. Howie J agreed with the reasons and the proposed orders. It is only necessary to refer to that part of the judgment relevant to the trial judge's conduct. Grove J observed that no application had been made at trial about the judge's sleep episodes. No omission, misdirection or error was said to have resulted. The complaint about the judge's sleep episodes was raised for the first time on appeal. The letter which Cesan had written to the trial judge before he was sentenced was "not … insignificant"6. It had not been contended that the verdicts of the jury were unreasonable or could not be supported. What was sought was a repeat trial. Grove J referred to the evidence before the Court of Criminal Appeal as summarised by Basten JA. He focussed on the absence of any suggestion that the trial judge had missed anything relevant or that Cesan himself had made any error in his evidence as a result of the judge's sleep episodes. His Honour 6 Cesan v Director of Public Prosecutions (Cth) (2007) 174 A Crim R 385 at 427 observed that Cesan's mother had not linked her observations of the trial judge's conduct to any aspect of the course of trial contemporaneous with her observation. Implying some scepticism about the witnesses' estimates of the duration of the sleep episodes, Grove J referred to Ivan Amaro's observation that: "What must have been five – ten seconds seemed to be an eternity" and characterised it as "a more realistic description of what was happening"7 His Honour rejected, as an exaggeration, Patricia Lawson's testimony that the judge was asleep most of the time during the nine days she attended the trial. He referred to Gabriela Cesan's evidence and noted she did not time the longer episodes of sleep to which she deposed. Juan David Uribe's evidence was said to be, in some respects, incompatible with the record of the proceedings on the days to which he referred. But even assuming that what he said was basically correct it carried the issue no further. He also referred to the evidence of Catalina Cal, Magalli Locaputo and Mr Bellew without comment. Two important passages of his Honour's judgment followed his reference to the evidence. He said8: "It is necessary to make findings of fact in respect of these matters for the purpose of dealing with the grounds. I accept that the judge was asleep from time to time. In reference to the evidence of Cesan, Basten JA has commented 'commonsense suggests that (his) estimates must have been subject to a significant margin of error'. I agree and would apply that comment also and particularly to those witnesses who testified to lengthy periods of fifteen to twenty minutes. I find the probability to be that, from time to time, the judge was 'nodding off' and on other occasions, notably when he was heard to snore, was asleep in a real and practical sense. I am persuaded by the tenor of all the evidence that it was on these latter occasions that the associate or perhaps the court staff, or Mr Bellew by clearing his throat, restored the judge's attention. I do not accept that three counsel would press on, remaining mute about the situation, if something of genuine significance was occurring without then, or even at a later time, drawing his Honour's attention to what he had apparently missed. The importance I have ascribed to this is that, in my view, the mere fact that the judge has been asleep (on and off) during the trial does not, without more, demonstrate that the trial had been (2007) 174 A Crim R 385 at 428 [180]. (2007) 174 A Crim R 385 at 429 [188]-[189]. unfair, or, put in the terms of the Criminal Appeal Act 1912 (NSW), that there had been a miscarriage of justice." His Honour quoted with approval observations made in a judgment of the Court of Appeal for England and Wales in R v Betson9. In that case, which involved conspiracy to rob the De Beers Millennium exhibition at the London Dome, the judge had slept, for a time, during the speeches of counsel for two of the accused. The Court of Appeal was prepared to accept that he was also asleep during a few other occasions, sometimes to the extent that he woke himself by the sound of his snoring. Their Lordships rejected a contention that he had been asleep on two specific occasions during the testimony of one of the appellants. No point was made of the judge's sleep episodes at trial. There was evidence that the jury had noticed the judge's behaviour. The argument on the appeal was evidently put on the basis that the appellants had been unfairly prejudiced and that the jury would have formed the impression, in respect of the appellant Betson, that the judge took such a dim view of the defence case, he could not be bothered to stay awake. The appeal was dismissed on the basis that the judge's sleep episodes were not shown to have led to error. Although observing that it was "highly regrettable" that he had fallen asleep, their Lordships said10: "But because a judge falls asleep or, for any other reason, allows his or her attention to wander, it does not necessarily follow that the trial is unfair, or that any ensuing conviction is unsafe. It is the effect, not the fact, of such inattention which is crucial. This must, in each case, depend on all the circumstances, including the period of inattention, both absolute and as a proportion of the length of the whole trial; the stage of the trial at which the inattention occurs; and, of primary importance, the impact of that inattention, if any, on the course and conduct of the trial." The Court found that it had not been shown that the judge missed, and failed to sum up to the jury, any significant feature of the evidence or speeches on account of his sleep episodes. His summing-up was "comprehensive and balanced, accurate as to the law and detailed as to the evidence"11. The Court also rejected the contention that the jury was, even arguably, unfairly prejudiced against any defendant having regard to the length of the trial, the full fair and [2004] EWCA Crim 254. An abbreviated report of the case appears at [2004] 2 Cr App R (S) 52 but does not contain the passages quoted by Grove J. 10 [2004] EWCA Crim 254 at [47]. 11 [2004] EWCA Crim 254 at [48]. accurate summing-up, the lengthy period of retirement, a pertinent question asked by the jury and "the compelling, powerful evidence against the defendants"12. Grove J drew a parallel between Betson and the present case. He rejected a distinction between the unconsciousness of a sleeping judge and the inattention of a judge who is not asleep. He said13: "The posited distinction is between causes, but what should be considered is effect. A judge (or anyone else) whose mind is disengaged from what is occurring by distraction, by deliberate choice or otherwise is as much a non participant as one whose mind has been disengaged by sleep." His Honour also rejected analogies between a sleeping judge and a judge who absents himself from court during the address of counsel to the jury14. After referring to s 6(1) of the Criminal Appeal Act and observations by Gleeson CJ in Nudd v The Queen15 about the width of the concept of "miscarriage of justice"16 his Honour said17: "There has been no identified act or omission of the trial judge which has produced consequence [sic] that is asserted to be different from that which would have occurred if the judge had been bright-eyed throughout the entire process. Of course, as was observed in Betson, it is regrettable if a judge falls asleep or is inattentive but it is the effect not the fact which is crucial. The appellants have pointed to no adverse effect on the canvass of issues at trial nor upon their determination which has been derived from the judge's episodes of dormancy. There has been no failure of process of such a kind as to make it impossible for this Court to decide that the convictions were just." His Honour went on to consider further arguments based upon s 11(1) of the District Court Act and s 80 of the Constitution. 12 [2004] EWCA Crim 254 at [48]. 13 (2007) 174 A Crim R 385 at 430 [192]. 14 Bateson v State 80 SW 88 (1904). 15 (2006) 80 ALJR 614; 225 ALR 161; [2006] HCA 9. 16 (2006) 80 ALJR 614 at 618 [7]-[8]; 225 ALR 161 at 164. 17 (2007) 174 A Crim R 385 at 431 [196]. The dissenting judgment Basten JA accepted that "it was clear from the evidence of the witnesses before this Court that the judge did fall asleep, although there was a further factual issue as to the extent to which that occurred"18. He carefully reviewed the evidence adduced in the Court of Criminal Appeal. He noted that neither of the appellants called evidence from the legal representatives at the trial. The fact that no objection was taken and the subjective reasons why no other steps were taken would arguably have been irrelevant. That matter was not explored before the Court of Criminal Appeal. His Honour also noted that all the witnesses called on the appeal were friends or relatives of the two appellants. There was a significant degree of consistency between their accounts but none were challenged in cross- examination on the basis of interest clouding perception or recollection. There was no suggestion of collusion. Basten JA observed that while such factors could not be ignored as potentially relevant, in the assessment of the evidence, they should be given limited weight. His Honour's findings of fact in summary were19: The trial judge was asleep on a number of occasions during the 11 days of the trial when evidence was being given. 2. When he was asleep he was not conscious of what was occurring in the courtroom. The trial judge slept for a period of several minutes on at least one occasion on most of the 11 days and on two or possibly three occasions on a handful of days. In support of this inference his Honour noted that the transcript showed that, on most days, there were long periods with no intervention by the judge. The regularity of this behaviour was supported by the fact that the judge was suffering from severe obstructive sleep apnoea, a condition consistent, before the judge obtained treatment, with a continual lack of adequate sleep at night. On a number of occasions, possibly between two and five, the judge was asleep for a period of between 10 and 15 minutes. On a majority of occasions he was asleep for between two and 10 minutes. 18 (2007) 174 A Crim R 385 at 392 [18]. 19 (2007) 174 A Crim R 385 at 402-403 [62]-[65]. There were a number of occasions on which the sleeping was accompanied by heavy breathing. There was an occasion during the cross-examination of Cesan when either a court officer or the judge's associate made a noise to wake the judge up. The judge's snoring when Cesan was giving evidence was to an extent disruptive and caused him to look around at the trial judge on two occasions. The trial judge slept during parts of the evidence of Mas Rivadavia but did not snore in a vigorous and audible manner so as to disrupt Mas Rivadavia's concentration. The jury was distracted at least during Cesan's cross-examination, and probably to a degree on other occasions, by the behaviour of the trial judge. Some members of the jury found the behaviour of the trial judge amusing and some emulated his apparent inattention. Basten JA referred to s 11 of the District Court Act and s 131 of the Criminal Procedure Act. In the context of their combined requirement for a trial by judge and jury, he considered the essential characteristics of such a trial by reference to authorities dealing with s 80 of the Constitution20. His Honour identified two principles in issue. The first was a jurisdictional debate about whether the Court was properly constituted. The second invited attention to the content of the process because the judge, by his behaviour, tended to distract the jury or trivialise the proceedings. His Honour referred to the role of the trial judge in a jury trial and the principle enunciated by the United States Supreme Court in Capital Traction Company v Hof21 that trial by jury was a trial of an issue by jurors "under the 20 Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 354-356 per Griffiths CJ, 375 per O'Connor J, 385-386 per Isaacs J; [1909] HCA 36; Maher v The Queen (1987) 163 CLR 221; [1987] HCA 31; Cheatle v The Queen (1993) 177 CLR 541; [1993] HCA 44; Katsuno v The Queen (1999) 199 CLR 40; [1999] HCA 50; Wu v The Queen (1999) 199 CLR 99; [1999] HCA 52; Cheng v The Queen (2000) 203 CLR 248; [2000] HCA 53; Brownlee v The Queen (2001) 207 CLR 278; [2001] HCA 36. direction and superintendence of the court"22, noting that "[t]his direction and superintendence was an essential part of the trial"23. In this context and after extensive review of authority, his Honour found a failure to comply with s 80 of the Constitution. There was therefore no need for the appellants to demonstrate that the conduct of the trial judge led to some consequential error demonstrating a miscarriage of justice. Notwithstanding the constitutional context of his conclusion, his Honour also characterised the trial as irreparably unfair, citing Gleeson CJ in Nudd24. He considered whether the judge's behaviour had the capacity to affect the jury's assessment of the appellants' cases. The proper test was an objective one. Applying that approach it could be assumed that the conduct of the judge would have had two related effects. First, it tended to undermine the routine directions given at the commencement of the trial to listen carefully to the evidence. Secondly, it tended to undermine the likelihood that the directions which he gave to the jury would be taken seriously and carefully applied. They might have been; it was impossible to know. The trial judge's behaviour constituted a distraction. His Honour concluded25: "Accordingly, there was a real possibility that the judge's conduct adversely affected the jury's performance of its function, in a material respect, which was sufficient to render the trial unfair and to deprive the proceedings of an essential characteristic of trial by jury." His Honour also considered the operation of the proviso to s 6(1) of the Criminal Appeal Act and held that it could not apply because there had been a failure to comply with s 80 of the Constitution. That failure either gave rise to a substantial miscarriage of justice or was one to which the proviso had no application. Miscarriage of justice The first question in these appeals is whether there was a "miscarriage of justice" within the meaning of s 6(1) of the Criminal Appeal Act. The second question is whether, if there were a miscarriage of justice, it was nevertheless not "substantial" within the meaning of the proviso to s 6(1). 22 174 US 1 at 15 (1899). 23 174 US 1 at 15-16 (1899). 24 (2006) 80 ALJR 614 at 618-619 [7]-[9]; 225 ALR 161 at 164-165. 25 (2007) 174 A Crim R 385 at 413 [109]. The term "miscarriage of justice" appears in a number of Commonwealth, State and Territory statutes, predominantly in relation to the disposition of criminal appeals. It is convenient to begin with its ordinary meaning before turning to relevant authorities. In the second edition of the Oxford English Dictionary "miscarriage of justice" is defined as "a failure of a court to attain the ends of justice". Applied to a system of laws the ends of justice will incorporate normative requirements relating to the way in which laws are applied and dispositions made under them. The conviction of an innocent person would be recognised by all observers as a miscarriage of justice. But the concept goes beyond that, particularly in a criminal justice system that is committed to fair process. One general definition from a perspective external to the system is26: "A miscarriage occurs as follows: whenever suspects or defendants or convicts are treated by the State in breach of their rights, whether because of, first, deficient processes or, second, the laws which are applied to them or, third, because there is no factual justification for the applied treatment or punishment; fourth, whenever suspects or defendants or convicts are treated adversely by the State to a disproportionate extent in comparison with the need to protect the rights of others; fifth, whenever the rights of others are not effectively or proportionately protected or vindicated by State action against wrongdoers or, sixth, by State law itself." To the extent that that definition incorporates perceived deficiencies in the law it runs wider than any definition that could be applied in a statutory setting. Within the statutory framework for criminal appeals under consideration in this case, the range of events, acts or omissions which can constitute a miscarriage of justice will depend upon the necessary conditions of "justice" in the criminal justice system. One class of necessary condition can be gathered under the general rubric of judicial process. A broader concept, which embraces but is not limited to the trial process, is that of "due process of law"27. 26 Walker, "Miscarriages of Justice in Principle and Practice", in Walker and Starmer (eds), Miscarriages of Justice – A Review of Justice in Error, (1999) 31 at 33. See also Greer, "Miscarriages of Criminal Justice Reconsidered", (1994) 57 Modern Law Review 58 esp at 61-62. 27 As to the term "due process of law" and its origins and use in the Magna Carta see the helpful discussion by Priestley JA in Adler v District Court of New South Wales (1990) 19 NSWLR 317 at 345-353. In the constitutional context see Wheeler, "Due Process, Judicial Power and Chapter III in the New High Court", (2004) 32 Federal Law Review 205. This is not a case about the judicial power of the Commonwealth nor implications to be drawn from Ch III of the Constitution. This Court, in allowing the appeals, did so on the basis that it was not necessary to decide the case by reference to the requirements of Ch III or s 80. Nevertheless the character of the judicial process as an element of the exercise of judicial power derives from the history and nature of the judicial function which in turn informs the constitutional concept. There have been many judicial observations which lend support to that general proposition. In Robins v National Trust Co28 the Privy Council said of the concept of "miscarriage of justice" in relation to judicial proceedings generally29: "It means such departure from the rules which permeate all judicial procedure as to make that which happened not in the proper use of the word judicial procedure at all." In Srimati Bibhabati Devi v Kumar Ramendra Narayan Roy30 a "miscarriage of justice" was seen as such a departure from the rules which permeate all judicial procedure as to make that which happened not judicial procedure in the proper sense of the words. It does not necessarily require the demonstration of a wrong decision. As Asprey JA said in Wilson v Wilson31: "What will constitute a miscarriage of justice may vary, not only in relation to the particular facts, but also with regard to the jurisdiction which has been invoked by the proceedings in question; and to reach the conclusion that a miscarriage of justice has taken place does not require a finding that a different result necessarily would have been reached in the proceedings said to be affected by the miscarriage. It is enough if what is done is not justice according to law." (citation omitted) Windeyer J said, in R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd32, that the concept of judicial power "inevitably attracts consideration of predominant characteristics and also invites comparison with the 29 [1927] AC 515 at 518. 30 [1946] AC 508 at 521. 31 (1967) 69 SR (NSW) 23 at 35; see also at 27 per Wallace P, 29 per Walsh JA. 32 (1970) 123 CLR 361 at 394; [1970] HCA 8. historic functions and processes of courts of law". In the joint judgment in Bass v Permanent Trustee Co Ltd33 their Honours said: "Judicial power involves the application of the relevant law to facts as found in proceedings conducted in accordance with the judicial process." (emphasis added; footnote omitted) There are elements of the judicial process which can be said, at least in a metaphorical way, to play a part in maintaining public confidence in the courts irrespective of their relationship to the actual outcome of the process. The appearance of impartiality is one such. In North Australian Aboriginal Legal Aid Service Inc v Bradley34 the joint judgment quoted with approval the observation by Gaudron J in Ebner v Official Trustee in Bankruptcy35: "Impartiality and the appearance of impartiality are necessary for the maintenance of public confidence in the judicial system." The somewhat elusive criterion of "public confidence" is in some cases, such as the appearance of bias, subsumed in what a fair and reasonable observer would think. The courts nevertheless depend in a real sense upon public confidence in the judicial system to maintain their authority. The maintenance of that authority depends, inter alia, upon that element of the judicial process which requires that parties before the court be given and be seen to be given a fair hearing. It is necessary to a fair hearing that the court be attentive to the evidence presented by the parties and to the submissions which they make. The appearance of unfairness in a trial can constitute a "miscarriage of justice" within the ordinary meaning of that term36. The appearance of a court not attending to the evidence and arguments of the parties and control of the conduct of the proceedings is an appearance which would ordinarily suggest to a fair and reasonable observer that the judicial process is not being followed. That is not to say that every minor distraction, inattention, sign of fatigue or even momentary sleepiness constitutes a failure of the judicial function. The courts are human institutions operated by human beings and there must be a margin of appreciation for human limitations. Otherwise the judicial system would be rendered unworkable by the imposition 33 (1999) 198 CLR 334 at 359 [56]; [1999] HCA 9. 34 (2004) 218 CLR 146 at 162 [27]; [2004] HCA 31. 35 (2000) 205 CLR 337 at 363 [81]; [2000] HCA 63. 36 R v Hertrich (1982) 137 DLR (3d) 400 at 430 (Ont CA); R v Duke (1985) 22 CCC (3d) 217 at 223 (Alta CA). of unachievable standards. Nevertheless, it would be an unnecessarily narrow view of the judicial duty to say that appeal courts are to judge such lapses solely by reference to their effects upon the outcome of the case. In so saying, it must be accepted that the question will ordinarily fall for consideration in the application of statutory language, in this case the common form provision for criminal appeals reflected in s 6(1) of the Criminal Appeal Act. The standards to which courts are held and to which they hold themselves have become higher in recent times. Lord Steyn, giving the opinion of the Appellate Committee of the House of Lords in Lawal v Northern Spirit Ltd37, said: "What the public was content to accept many years ago is not necessarily acceptable in the world of today. The indispensable requirement of public confidence in the administration of justice requires higher standards today than was the case even a decade or two ago." In a jury trial it is not the judge but the jury which finds the facts. It reaches a verdict by applying to the facts the law as explained to it by the judge. But the judge's function in such a trial is not exhaustively described by saying that he or she rules on questions of law including the admissibility of evidence, sums up to the jury, directs the jury on matters of law and otherwise acts as a kind of referee between prosecution and defence. These are all attributes of a more broadly expressed function of supervision and control of and participation in the trial process38. That is a function which has long been understood. It requires no less a standard of attentiveness to the evidence and the conduct of the trial generally than the standard applicable to a judge sitting alone. Indeed, because of the involvement of the jury it requires more. In Capital Traction Company v Hof39 the Supreme Court of the United States described the concept of trial by jury in language, which it approved, from the District Court of the United States40: 37 [2004] 1 All ER 187 at 196 [22]. 38 Trends towards and arguments for increased judicial responsibility for the outcomes of criminal trials are discussed in Doran, "The Necessarily Expanding Role of the Criminal Trial Judge", in Doran and Jackson (eds), The Judicial Role in Criminal Proceedings, (2000) 3. 40 174 US 1 at 15-16 (1899) quoting from United States v One Thousand Three Hundred and Sixty-Three Bags of Merchandise 27 Fed Cas 340 at 341 (1863). "The Constitution secures a trial by jury, without defining what that trial is. We are left to the common law to learn what it is that is secured. Now the trial by jury was, when the Constitution was adopted, and for generations before that time had been, here and in England, a trial of an issue of fact by twelve men, under the direction and superintendence of the court. This direction and superintendence was an essential part of the trial." The temporary absence of a judge from the court during a trial by jury has been held, in United States cases, to be a fatal flaw in process on the basis that the court ceases to be constituted as a court. That flaw is linked to the indispensability of the judge's presence supervising and controlling the trial41: "A defendant convicted under such circumstances has been deprived of his liberty without due process of law." It is difficult to distinguish in principle between the physical absence of a the courtroom and sleep episodes which effect substantial judge from discontinuities in the judge's superintendence and control of the trial. If it be accepted that the supervision and control of the trial by the judge is indispensable to trial by jury there is no requirement for present purposes to inquire whether its absence can be characterised as a failure to maintain a duly constituted court capable of exercising federal jurisdiction. Nor is it necessary to inquire whether its absence amounts to a failure to meet the constitutional guarantee of trial by jury. It suffices for present purposes that such a failure can be characterised as a miscarriage of justice by reference to common law concepts of trial by jury and what such trials necessarily entail. There are other dimensions going beyond the want of supervision and control to the effect of the judge's conduct upon his or her authority with the jury, the respect or lack of respect which its members may have for the trial process and, beyond that again, to public confidence in the courts. Against this general background it is necessary to have regard to the words "miscarriage of justice" in s 6(1) of the Criminal Appeal Act and to the words of the proviso which authorises the Court of Criminal Appeal to dismiss the appeal if it considers that "no substantial miscarriage of justice has actually occurred". Section 6(1) of the Criminal Appeal Act is a common form of statutory provision for criminal appeals which traces its legislative ancestry back to s 4(1) of the Criminal Appeal Act 1907 (UK). The history of that provision and its 41 People v Silver 269 NYS 765 at 771 (1934) citing People v Tupper 55 P 125 at 125 (1898). See also Bateson v State 80 SW 88 at 91 (1904). antecedents and the consequences of that history for its application were considered by this Court in Weiss v The Queen42. What that history revealed was that, before the introduction of the proviso by s 4(1) of the 1907 UK Act, a miscarriage of justice under the pre-existing Exchequer rule "was any departure from trial according to law, regardless of the nature or importance of that departure" (emphasis in original). When miscarriage of justice is seen in that light the word "substantial" has a function43. Weiss is authority for the proposition that the question whether an appellant may have lost a fair chance of acquittal is one to be considered under the proviso. It is not a necessary condition of the conclusion that there has been a "miscarriage of justice" as that term is used in "the dragnet ground" in s 6(1). Observations about the necessity of such a condition have been made in earlier cases and must be seen in the light of the approach taken by the whole Court in Weiss44. The earlier case of TKWJ v The Queen45 concerned a decision by defence counsel not to adduce evidence as to the good character of an accused nor to seek an advance ruling as to the admission of adverse evidence in response. There was no defect in the instructions to the jury nor in the procedures followed at trial. As Hayne J pointed out, the question of "miscarriage of justice" in that case directed attention to the result of the trial46. Counsel's decision was significant only if it affected the result of the trial. The case is not authority for the proposition that the loss of a chance of acquittal is a necessary condition of the existence of a miscarriage of justice. Weiss involved the admission of irrelevant but prejudicial evidence. In that context the Court in Weiss defined the task of criminal appeal courts applying the proviso. The task so defined requires their consideration of the whole of the record to reach an independent conclusion on whether the appellant 42 (2005) 224 CLR 300 at 306-311 [12]-[25]; [2005] HCA 81. 43 (2005) 224 CLR 300 at 308 [18]. 44 Mraz v The Queen (1955) 93 CLR 493 at 513 per Fullagar J; [1955] HCA 59; Driscoll v The Queen (1977) 137 CLR 517 at 524-525 per Barwick CJ; [1977] HCA 43; R v Storey (1978) 140 CLR 364 at 376 per Barwick CJ; [1978] HCA 39; Wilde v The Queen (1988) 164 CLR 365 at 375-376 per Deane J; [1988] HCA 6; TKWJ v The Queen (2002) 212 CLR 124 at 133 [25]-[26] per Gaudron J; [2002] HCA 46. 45 (2002) 212 CLR 124. 46 (2002) 212 CLR 124 at 157 [103]. was guilty beyond reasonable doubt of the offence on which the impugned verdict has been reached. There may be cases, nevertheless, in which there is a process failure of such significance that, whatever the apparent weight of the evidence against the accused person, it cannot be said that there has not been a substantial miscarriage of justice. That may be because the process failure has deprived the appeal court of the capacity to assess whether the appellant may have lost a fair chance of an acquittal. That proposition is supported by dicta in Simic v The Queen47. In Simic, the Court said48, in relation to s 568(1) of the Crimes Act 1958 (Vic): "It is true that an appellant who claims that the trial judge misstated the facts to the jury must, if his appeal is to succeed, show that there was a miscarriage of justice. But since an accused person has a fundamental right to a fair trial, conducted in accordance with law, the fact that the case has not been properly presented to the jury will in some circumstances be enough to show that a miscarriage has occurred." In TKWJ, McHugh J said that this dictum suggested that in some cases a material irregularity would itself constitute a miscarriage of justice. The context of the dictum suggested that in such a class of case there was no question of applying the proviso. However, the Court in Simic had also held that the onus was on the appellant to show that the misdirection which had occurred amounted to a miscarriage of justice. McHugh J concluded49: "Thus, Simic holds that, in most cases of misdirection on facts, the appellant has the onus of establishing a misdirection, that it might have affected the verdict and that, if it had not been made, the jury might have acquitted the appellant. In some undefined categories of cases, however, the irregularity may be so material that of itself it constitutes a miscarriage of justice without the need to consider its effect on the verdict." In Nudd the Court was concerned with a contention that incompetency of trial counsel had caused a miscarriage of justice. Gleeson CJ observed that "the concepts of justice, and miscarriage of justice, bear two aspects: outcome and 47 (1980) 144 CLR 319; [1980] HCA 25. 48 (1980) 144 CLR 319 at 331. 49 (2002) 212 CLR 124 at 147 [73]. process"50. He described the emphasis upon those two aspects as fundamental and familiar and continued51: "Some irregularities 'may' involve no miscarriage of justice if the appellate court forms a certain opinion about the strength of the case against the appellant. The corollary of that proposition is that a defect in process may be of such a nature that its effect cannot be overcome by pointing to the strength of the prosecution case. It is impossible to state exhaustively, or to define categorically, the circumstances in which such a defect will occur." One such circumstance would arise where, as a result of the failure of process, the appellate court is deprived of the capacity justly to assess the strength of the case against the appellant. Gleeson CJ said52: "There may be other circumstances in which a departure from the requirements of a fair trial according to law is such that an appellate court will identify what occurred as a miscarriage of justice, without undertaking an assessment of the strength of the prosecution case. If there has been a failure to observe the conditions which are essential to a satisfactory trial and, as a result, it appears unjust or unsafe to allow a conviction to stand, then the appeal will be allowed." Gummow and Hayne JJ saw "miscarriage of justice" in the common form of criminal appeal statute as encompassing a very wide variety of departures from the proper conduct of a trial. Their Honours said53: "Alleging that trial counsel was incompetent does not reveal what is said to be the miscarriage of justice. That requires consideration of what did or did not occur at the trial, of whether there was a material irregularity in the trial, and whether there was a significant possibility that the acts or omissions of which complaint is made affected the outcome of the trial." (footnotes omitted) 50 (2006) 80 ALJR 614 at 617 [3]; 225 ALR 161 at 162 citing Davies and Cody v The King (1937) 57 CLR 170 at 180; [1937] HCA 27 and Ratten v The Queen (1974) 131 CLR 510 at 516 per Barwick CJ; [1974] HCA 35. 51 (2006) 80 ALJR 614 at 617 [6]; 225 ALR 161 at 163. 52 (2006) 80 ALJR 614 at 618 [6]; 225 ALR 161 at 163. 53 (2006) 80 ALJR 614 at 622 [24]; 225 ALR 161 at 170. Kirby J, enunciating an individual rights-based approach, stated, inter alia, that provision of such rights is not necessarily confined to cases where their deprivation results in adverse consequences that might not otherwise have occurred54. In this context he referred to the judgment of the Ontario Court of Appeal in R v Joanisse55 where Doherty JA said: "A reliable verdict may still be the product of a miscarriage of justice if the process through which that verdict was reached was unfair." (citations omitted) Callinan and Heydon JJ agreed the appeal should be dismissed that notwithstanding counsel's incompetence on the basis that the appellant was not deprived of a chance of acquittal56. The case of incompetence of counsel which was considered in Nudd does not fall within the same category of defect of process as a failure of the judicial function. Nevertheless the approach taken in that case can be generalised to the identification of miscarriages of justice flowing from failure of process and to the application of the proviso. There is support for the proposition that a failure of the judicial process may be so fundamental as to result in a trial which is incurably flawed. In Katsuno v The Queen57 Gaudron, Gummow and Callinan JJ referred to Maher v The Queen58 and Johns (Roger) v The Queen59 which they said "[a]t one level" concerned failures to comply with mandatory legislative provisions governing the constitution and authority of the jury. Their Honours went on, however, to say60: 54 (2006) 80 ALJR 614 at 634 [94]; 225 ALR 161 at 186. 55 (1995) 102 CCC (3d) 35 at 62. 56 (2006) 80 ALJR 614 at 644-645 [159]-[163]; 225 ALR 161 at 200-201. 57 (1999) 199 CLR 40. 58 (1987) 163 CLR 221. 59 (1979) 141 CLR 409; [1979] HCA 33. 60 (1999) 199 CLR 40 at 60 [35]. See also the application of that reasoning in Petroulias v The Queen [2007] NSWCCA 134 at [66]-[70] per Simpson J, "At another [level], as is clear from the judgment of the Court in Maher, they are concerned with 'failure to observe the requirements of the criminal process in a fundamental respect', of which the failure to observe mandatory provisions relating to the constitution and authority of the jury is but an example. A conviction simply cannot stand if the trial process is flawed in a fundamental respect." (footnotes omitted) If there be a flaw in a fundamental respect such that the appearance of injustice is indelibly stamped on the process and its outcome from the point of view of a reasonable and informed observer, this may be expressed by saying that public confidence would be undermined if the conviction were allowed to stand. A trial process "flawed in a fundamental respect" falls into that category. Such deficiencies in process constitute miscarriages of justice. It may be that such a deficiency raises a possibility that a chance of acquittal has been lost but is of such a nature that no inquiry under the proviso could resolve that question. In that case it cannot be said that there has been no substantial miscarriage of justice. In such a case the proviso cannot apply. It may be that the deficiency is of its nature "substantial" and warrants no further inquiry, under the proviso, into its effects upon the appellant's chances of acquittal. Whether sleep or inattention by a trial judge can constitute a miscarriage of justice in a trial by jury It is perhaps a reflection of the human condition and the demanding nature and expectations of the judicial function that the phenomenon of the sleeping or apparently sleeping judge has a long history dating back to Plato's reference to Appellate courts in common law jurisdictions have deprecated judicial sleepiness where it has occurred. Nevertheless in reported cases in the United Kingdom, the United States and Canada there has been a tendency to focus on the practical effects of the judge's conduct on the trial process. In many of the cases this may be attributed, at least in part, to the brevity or inconsequential character of the incidents. In some cases failure by counsel to raise concerns at trial about the judge's condition has been a significant factor weighing against appellate intervention62. 61 See Pannick, Judges, (1987) at 77-78; Foss, A Biographical Dictionary of the Judges of England, (1870) referring at 223 to Judge Doderidge. See also William Hogarth's 1758 painting The Bench. 62 Examples abound. In the United Kingdom: R v Edworthy [1961] Crim LR 325; R v Tancred unreported, Court of Appeal (Criminal Division), 14 April 1997; R v (Footnote continues on next page) The general principle that a fair trial requires a judge to be attentive to the evidence and submissions of the parties was supported by the judgment of the Court of Appeal of England and Wales in Stansbury v Datapulse plc63. Peter Gibson LJ (Latham LJ and Sir Martin Nourse agreeing) said: "A member of a tribunal who does not appear to be alert to what is being said in the course of the hearing may cause that hearing to be held to be unfair, because the hearing should be by a tribunal each member of which is concentrating on the case before him or her. That is the position, as I see it, under English law, quite apart from the European Convention on Human Rights." Peter Gibson LJ saw the proposition as reinforced by Art 6(1) of that Convention64. If, by reason of sleep episodes or serious inattention, the reality or the appearance exists that a trial judge has substantially failed to discharge his or her duty of supervision and control of the trial process in a trial by jury, then enough has been made out to establish a miscarriage of justice. The question whether there has been the reality or appearance of a substantial failure by the judge to perform his or her duty will require assessment of a number of factors including: 1. Whether the conduct of the judge can be said to have affected the outcome of the trial. Moringiello [1997] Crim LR 902; R v Betson [2004] 2 Cr App R (S) 52. In the United States: Chicago City Railway Co v Anderson 61 NE 999 (1901); United States v White 589 F 2d 1283 (1979); United States v Yanez-Baldenegro 1994 US App LEXIS 22103 (9th Circuit); Hummel v State 617 NW 2d 561 (Minn 2000); People v Degondea 769 NYS 2d 490 (2003); United States v Martinez 97 Fed Appx 869 (2004); Lampitok v State 817 NE 2d 630 (Ind App 2004). In Canada: R v Caley 1991 CanLII 304 (BC SC); R v Chan (2007) 429 AR 101 (which cited Cesan (2007) 174 A Crim R 385); Leader Media Productions Ltd v Sentinel Hill Alliance Atlantis Equicap Limited Partnership (2008) 90 OR (3d) 561. 63 [2004] ICR 523 at 533 [28]. 64 Kraska v Switzerland (1993) 18 EHRR 188 at 200 [30], 201 [32]. Successful appeals based on the appearance of sleep were R v Weston-super-Mare Justices; Ex parte Taylor [1981] Crim LR 179; Kudrath v Ministry of Defence unreported, Employment Appeal Tribunal, 26 April 1999; cf R v Langham and Langham [1972] Crim LR 457. 2. Whether the conduct of the judge has created a risk that the outcome of the trial may have been affected. 3. Whether counsel raised the question of the trial judge's conduct at the trial. 4. Whether the jury appeared to have noticed or to have been distracted or otherwise affected by the judge's conduct. None of these factors, taken by itself, is determinative. There is an overall assessment to be made in deciding whether a failure or apparent failure by the judge for whatever reason to attend to the duty of supervising and controlling the trial process amounts to a miscarriage of justice. In so saying it should be emphasised that the duty of counsel in a case of non-trivial inattention or sleep episodes is to draw these issues to the attention of the judge in the absence of the jury. The failure of counsel to do so may support an inference that the judge's conduct did not amount to a substantial failure in the judicial process at trial. However, it will not always be determinative. Whether the judge's conduct in this case constituted a miscarriage of justice In this case the facts, as found by Basten JA, were amply supported by the evidence taken before the Court of Criminal Appeal, which was reviewed earlier in these reasons. They indicated a substantial failure of the judicial process. The trial judge was asleep on a number of occasions on the 11 days when evidence was being given. He slept at least once on most of those days and on some days on two or three occasions. Some of the sleep episodes, possibly between two and five, lasted from 10 to 15 minutes. Most lasted between two and 10 minutes. The judge's sleeping was accompanied by heavy breathing on a number of occasions and he snored when Cesan was giving his evidence. This was disruptive and caused Cesan to look around at the trial judge. The judge also slept through parts of Mas Rivadavia's evidence. The jury was distracted by the judge's sleep episodes and some of the jury members found his behaviour amusing and even emulated it. The fact that counsel at the trial did not draw the matter to the judge's attention does not, on the evidence in this case, appear to be based upon any assessment that the judge's conduct did not matter. Rather, it seemed it had been based on the defeatist proposition that nothing could be done. In this case there was a miscarriage of justice by failure of the judicial process. It was constituted by the judge's substantial failure to maintain the necessary supervision and control of the trial. Further, his conduct created a distraction during the trial process. In particular it distracted the jury and led at least some of the members of the jury to regard the judge with amusement. Whether there was no substantial miscarriage of justice It could not be said in this case that there was no substantial miscarriage of justice within the meaning of the proviso to s 6(1). The judge's conduct had a discernible distracting effect on the jury. The reaction of some of the jury members raised a real question about the extent to which they would have attended to the evidence and accorded to the judge's directions the respect and attention they required. The Court of Criminal Appeal was in no position to assess these imponderables. The nature of the miscarriage of justice which occurred put such inquiry beyond its reach. Further, this is a case in which the miscarriage of justice was substantial because it created the appearance of injustice which could not be cured by the Court of Criminal Appeal forming the opinion that a reasonable jury would have convicted the appellants in any event. Conclusion For the preceding reasons, I joined in the orders in this case allowing the appeals, setting aside the convictions and remitting the matters for retrial. GUMMOW J. In his reasons the Chief Justice explains the constitutional and statutory (federal and State) structure upon which rested the trial on joint indictment of the appellants in the District Court of New South Wales on charges laid under federal law. The provisions of s 11 of the District Court Act 1973 (NSW) and s 131 of the Criminal Procedure Act 1986 (NSW) produced the result that, as a matter of New South Wales law, the trial was to be "by a jury". There is no suggestion that these provisions were not "picked up" by federal law and no suggestion that they conflicted with the requirements of s 80 of the Constitution. Argument on the appeals to this Court was limited to what was said to be a serious systemic failure in the conduct of the jury trial by reason of a lack in the necessary superintendence of the proceedings by the trial judge. The appellants complained that the Court of Criminal Appeal of the Supreme Court of New South Wales (Grove and Howie JJ, Basten JA dissenting)65 had erred in dismissing the appeals against conviction. The appellants contended that there had been "a miscarriage of justice" and that this had not attracted the exercise of the power to dismiss an appeal because the appellate court "considers that no substantial miscarriage of justice has actually occurred" within the meaning of s 6(1) of the Criminal Appeal Act 1912 (NSW) ("the Criminal Appeal Act"), again as "picked up" by federal law. The appeals to this Court may be decided favourably to the appellants by reference to the State legislative structure and the common law of Australia respecting the character of trial by jury, without entering upon the question whether s 80 of the Constitution imposed requirements which both went beyond those of the common law and were not satisfied by the conduct of the trial of the appellants. The relevant characteristic of the institution of jury trial inherited in Australia and elsewhere from the English common law was explained by Sir Matthew Hale in his work The History of the Common Law, first published posthumously in 171366. The tenth of the excellencies of the jury trial was identified by Hale as follows67: "that the judge is always present, at the time of the evidence given in it. Herein he is able, in matters of law, emerging upon the evidence, to direct 65 Cesan v Director of Public Prosecutions (Cth) (2007) 174 A Crim R 385. 66 Cromartie, Sir Matthew Hale 1609-1676, (1995) at 104. 67 Hale, The History of the Common Law, 5th ed (ed Runnington) (1794), vol 2 at them; and also, in matters of fact, to give them a great light and assistance, by his weighing the evidence before them, and observing where the question and knot of the business lies; and by showing them his opinion even in matter of fact; which is a great advantage and light to lay-men. And thus, as the jury assists the judge in determining the matter of fact, so the judge assists the jury in determining points of law, and also very much in investigating and enlightening the matter of fact, whereof the jury are the judges." It was with these observations in mind that, in the 19th century, United States decisions stressed as an essential part of the institution of trial by jury inherited from England, the direction and superintendence of the judge68. In delivering the reasons of the Supreme Court of the United States in Capital Traction Company v Hof69, Gray J remarked: "'Trial by jury,' in the primary and usual sense of the term at the common law and in the American constitutions, is not merely a trial by a jury of twelve men before an officer vested with authority to cause them to be summoned and empanelled, to administer oaths to them and to the constable in charge, and to enter judgment and issue execution on their verdict; but it is a trial by a jury of twelve men, in the presence and under the superintendence of a judge empowered to instruct them on the law and to advise them on the facts, and (except on acquittal of a criminal charge) to set aside their verdict if in his opinion it is against the law or the evidence." With these basic principles in mind, it becomes apparent that the unusual circumstances to which the medical condition of the trial judge gave rise called for a response in the Court of Criminal Appeal which applied to the evidence before it concerning the conduct of the trial of the appellants, the statutory criterion of "miscarriage of justice", followed by a consideration of the "proviso" to s 6(1) of the Criminal Appeal Act. No modification of established principle is necessary to determine that the majority of the Court of Criminal Appeal erred in dismissing the appeals. The superintendence of the trial by the trial judge required him to ensure that the jury was not distracted from paying full attention. The evidence which was accepted by the Court of Criminal Appeal showed both that the jury was 68 The impact of Jacksonian populism upon the laws of some States curtailing the functions of the trial judge was traced and lamented by Wigmore: A Treatise on the Anglo-American System of Evidence in Trials at Common Law, 3rd ed (1940), vol 9, §§2551-2551a. 69 174 US 1 at 13-14 (1899). distracted from paying attention to all of the evidence and that the very source of the distraction was the sleeping judge. The consequence was that in respect of each appellant there was a miscarriage of justice within the meaning of s 6(1) of the Criminal Appeal Act. As to the application of the proviso to s 6(1), I agree with what is said by Hayne, Crennan and Kiefel JJ. For these reasons I supported the making of the orders pronounced at the conclusion of the oral argument on these appeals. 109 HAYNE, CRENNAN AND KIEFEL JJ. The facts and circumstances giving rise to the appeals are set out in the reasons of French CJ and need not be repeated. At the conclusion of argument, the Court made orders allowing each appeal, setting aside the orders of the Court of Criminal Appeal of the Supreme Court of New South Wales dismissing each appellant's appeal against conviction and sentence, and in their place ordering that the appeal to the Court of Criminal Appeal against conviction should in each case be allowed, the appellant's conviction quashed, and a new trial had. What follows are our reasons for joining in those orders. The disposition of the appeals to this Court depended, in our opinion, on the application of established principles to the particular facts and circumstances of the case. No development or amplification of those principles is necessary in order to conclude that the Court of Criminal Appeal should have allowed each appellant's appeal, quashed his conviction, and ordered a new trial. Each appellant's appeal to the Court of Criminal Appeal presented two questions which must be framed by reference to the words of s 6(1) of the Criminal Appeal Act 1912 (NSW). Was there "on any other ground whatsoever ... a miscarriage of justice"? If there was, should the Court of Criminal Appeal conclude that "no substantial miscarriage of justice has actually occurred"? Miscarriage? There was, in these cases, "on any other ground whatsoever ... a miscarriage of justice" because the trial judge did not exercise that degree of supervision of the proceedings which would ensure, so far as reasonably practicable, that the jury paid attention to all of the evidence as it was given. The occasion for this departure from the proper conduct of the trial was the trial judge falling asleep. (The trial judge was later diagnosed as suffering from severe obstructive sleep apnoea.) But for present purposes, attention should focus upon the consequences of the trial judge falling asleep70. The majority in the Court of Criminal Appeal (Grove and Howie JJ) concluded71 that no defect in the trial was identified. In particular, the majority 70 TKWJ v The Queen (2002) 212 CLR 124 at 134 [31], 135 [33] per Gaudron J, 149-150 [79] per McHugh J, 157 [101] per Gummow J, 157 [104] per Hayne J; [2002] HCA 46; Nudd v The Queen (2006) 80 ALJR 614 at 622 [24] per Gummow and Hayne JJ; 225 ALR 161 at 170; [2006] HCA 9. 71 Cesan v Director of Public Prosecutions (Cth) (2007) 174 A Crim R 385 at 430 [191] per Grove J, with whose reasons Howie J agreed. rejected72 the conclusion reached by Basten JA73 that the trial judge's conduct tended to undermine the routine directions given at the commencement of the trial and cast doubt on whether it could be presumed that the jury would follow the judge's instructions. In his evidence to the Court of Criminal Appeal, Mr Cesan complained that he found the judge's conduct, when he was giving evidence at trial, to have been disruptive, but the majority put this complaint aside74 as being "general in expression" and not accompanied by any attempt to identify any error in, or omission from, the evidence which Mr Cesan gave at his trial. All members of the Court of Criminal Appeal accepted that, as Grove J put it75, "the probability [was] that, from time to time, the judge was 'nodding off' and on other occasions, notably when he was heard to snore, was asleep in a real and practical sense". And all members of the Court of Criminal Appeal accepted76 the evidence of Mr Cesan that, during his cross-examination, the trial judge was heard to snore and that, as a result, some members of the jury "were looking at the judge and not [Mr Cesan] or the prosecutor" and that some "looked surprised and others were smiling"77. The importance of the evidence given in the Court of Criminal Appeal by Mr Cesan was that it showed that during the cross-examination of one of the two accused on trial at least some members of the jury were not paying attention to the evidence being given. And the findings made by all members of the Court of Criminal Appeal showed that the distraction that occurred during Mr Cesan's cross-examination was probably no isolated incident. There were other substantial periods of time during the trial when the trial judge was asleep and it follows, as Basten JA rightly concluded78, that it is probable that the attention of 72 (2007) 174 A Crim R 385 at 433 [208]-[209]. 73 (2007) 174 A Crim R 385 at 413 [106]-[107]. 74 (2007) 174 A Crim R 385 at 428 [178]. 75 (2007) 174 A Crim R 385 at 429 [188]. See also at 402-403 [62] per Basten JA. 76 (2007) 174 A Crim R 385 at 402-403 [62] per Basten JA, 428 [177]-[178] per 77 (2007) 174 A Crim R 385 at 394-395 [32], 402-403 [62] per Basten JA, 428 [178] 78 (2007) 174 A Crim R 385 at 403 [65]. members of the jury was distracted from other evidence being adduced because the trial judge was asleep. And because the trial judge was asleep, no step was taken to refocus the jury's attention upon the evidence. The conclusion reached by the majority in the Court of Criminal Appeal, that the jury should be taken to have paid attention to the instructions the trial judge gave during the trial, denies that there was on this account a miscarriage of justice. But it does not conclude the issue. As noted earlier in these reasons, in considering whether there was a miscarriage of justice at the trial, attention must focus upon the respect or respects in which it is said that there was some departure from the proper conduct of the trial, rather than upon the cause of the departure. That is why, in the present cases, to focus only upon the fact that the trial judge fell asleep during some parts of the trial diverts attention from identifying whether there was some miscarriage. What is important, in these cases, is that the jury was distracted from paying attention to all of the evidence. And it was upon the assessment of all of the evidence led at trial that the jury's verdict had to be founded. The repeated distraction of the jury from attending to the evidence at various stages of the trial, including when one of the accused was giving his evidence, constituted a miscarriage of justice. Ensuring that the jury is not distracted from paying full attention to its task is pre-eminently a matter for the trial judge. If trial counsel is concerned that members of the jury cannot give, or are not giving, proper attention during the trial, it will be for counsel to raise that issue with the trial judge. Ordinarily, if the trial judge does not act of his or her own motion, and if trial counsel says nothing, an appellate court will not later be able to conclude that the jury did not pay attention to the evidence that was led. In particular, proffering the opinion of one or more observers about whether the jury appeared to be paying attention to proceedings would not ordinarily suffice to show that there has been a miscarriage of justice. The absence of intervention by the trial judge will usually far outweigh the value of any opinion offered by some observer after the trial is over. In the present cases, however, the evidence that was accepted by the Court of Criminal Appeal went beyond the bald assertion of observers that the jury seemed not to have paid attention during the trial. The evidence that was led in the Court of Criminal Appeal showed that the jury was distracted from paying attention to all of the evidence and was distracted because the trial judge was asleep. There having been "on any other ground whatsoever ... a miscarriage of justice", s 6(1) of the Criminal Appeal Act obliged the Court of Criminal Appeal to allow the appeals against conviction, unless persuaded that the proviso was engaged. The proviso In Weiss v The Queen79, the Court said that it was neither right nor useful to attempt to lay down absolute rules or singular tests to govern the application of the proviso beyond three fundamental propositions. First, the appellate court must itself decide whether a substantial miscarriage of justice has actually occurred. Second, that task is an objective task which is not materially different from other appellate tasks. Third, the standard of proof is the criminal standard. The Court rejected80 the use of expressions, like loss of a real chance of acquittal, as substitutes for the statutory language. Rather, the Court held81 that no single universally applicable description of what constitutes "no substantial miscarriage of justice" can be given. The Court further held82 in Weiss that a necessary, but not always sufficient, step to the application of the proviso is that the appellate court is persuaded that the evidence properly admitted at trial proved, beyond reasonable doubt, the accused's guilt of the offence on which the jury returned its verdict of guilty. But the conclusion that guilt of the accused was proved to that standard does not, in every case, suffice to show that there was no substantial miscarriage of justice. An example of circumstances in which consideration of what was proved at trial is not a sufficient basis for applying the proviso is provided by AK v Western Australia83. In that case the relevant statute required that the trial of an accused, by judge alone, yield a reasoned decision, but there were no reasons given at the appellant's trial for the determination of the central issue tried in the case. That being so, it could not be said that there was no substantial miscarriage of justice. 79 (2005) 224 CLR 300 at 316 [42]; [2005] HCA 81. 80 (2005) 224 CLR 300 at 313 [33]. 81 (2005) 224 CLR 300 at 317 [44]. 82 (2005) 224 CLR 300 at 317 [44]. 83 (2008) 232 CLR 438; [2008] HCA 8. In Wilde v The Queen84, reference was made to the possibility that some errors occurring in the course of a criminal trial may amount to such a serious breach of the presuppositions of the trial as to deny the application of the proviso. The appellants submitted, both in the Court of Criminal Appeal and in this Court, that these cases were of this kind. That is, the appellants submitted that the inattention of the trial judge at various times during the trial meant that there was no trial by judge and jury. But just as the application of the proviso is not to be determined by deduction from expressions which attempt to describe the operation of the statutory language in other words, what was said in Wilde is not to be taken as if it were a judicially determined exception grafted upon the otherwise general words of the relevant statute85. And the application of the proviso is not to be determined according only to whether the form of expression used in Wilde, or some other conclusive statement, appears to be an apt description of the course of the trial. Rather, it is necessary to have regard to the miscarriage of justice that has been identified. In these cases the miscarriage lies in the distraction of members of the jury from their task. And because that is the miscarriage of justice that occurred in these cases, it is not possible to conclude, on the written record of the trial, that the evidence properly admitted at trial proved the appellants guilty beyond reasonable doubt. As noted earlier, forming that conclusion is a necessary condition for applying the proviso. In Weiss, the Court pointed out86 that, in considering the application of the proviso, an appellate court's task "must be undertaken on the whole of the record of the trial including the fact that the jury returned a guilty verdict" (emphasis in original). But in undertaking that task an appellate court must be conscious of the "natural limitations"87 that exist in the case of an appellate court proceeding wholly or substantially on the record of the trial88. 84 (1988) 164 CLR 365 at 373; [1988] HCA 6. 85 AK v Western Australia (2008) 232 CLR 438 at 455-456 [54]. 86 (2005) 224 CLR 300 at 317 [43]. 87 Dearman v Dearman (1908) 7 CLR 549 at 561; [1908] HCA 84. 88 Weiss v The Queen (2005) 224 CLR 300 at 316 [41]; Fox v Percy (2003) 214 CLR 118 at 125-126 [23]; [2003] HCA 22. In many cases where the proviso is to be considered, the fact that the jury returned a guilty verdict will indicate rejection of any explanation proffered by the accused in evidence. In the present cases, however, the relevant hypothesis is that the jury did not pay attention to all of the evidence led at trial. In particular, the jury was distracted when one of the two accused persons was giving his evidence. In those circumstances, it is not possible, in these cases, to place any weight upon the fact that the jury returned its verdicts of guilty. Each accused proffered an explanation of what was put against him. In transcript the explanation may lack persuasion. But whether the evidence as a whole, including what each accused said in explanation, was sufficient to establish guilt beyond reasonable doubt was a question for the jury to decide having regard to more than the words that are recorded in the transcript of the proceedings. But because members of the jury were distracted, they did not perform this task. And more importantly, the Court of Criminal Appeal could not decide from the record alone that the explanations proffered by each accused were in each case to be rejected and the conclusion reached beyond reasonable doubt that each was guilty. Finally, some weight was given89 by the majority in the Court of Criminal Appeal to a letter written by Mr Cesan to the trial judge after the jury had returned a guilty verdict and before sentence was passed. The majority in the Court of Criminal Appeal considered90 that, in the letter, he admitted his guilt of the offence charged. The letter was written for the evident purpose of mitigating the sentence that was then to be passed upon Mr Cesan. To do other than accept the jury's verdict would have aggravated the sentence. No weight can be attached to what was said in the letter in deciding whether there was no substantial miscarriage of justice. For these reasons the proviso was not engaged. It could not be said that no substantial miscarriage of justice actually occurred. 89 (2007) 174 A Crim R 385 at 427-428 [175]-[176]. 90 (2007) 174 A Crim R 385 at 428 [176]. 133 HEYDON J. I support the orders which the Court pronounced at the close of oral argument for the reasons given by Gummow J and by Hayne, Crennan and

HIGH COURT OF AUSTRALIA AND APPELLANT SCENIC TOURS PTY LTD RESPONDENT Moore v Scenic Tours Pty Ltd [2020] HCA 17 Date of Hearing: 11 February 2020 Date of Judgment: 24 April 2020 ORDER Appeal allowed. Set aside order 5 of the orders made by the Court of Appeal of the Supreme Court of New South Wales on 24 October 2018 and reinstate the primary judge's order of damages for disappointment and distress pursuant to s 267(4) of the Australian Consumer Law and for pre-judgment interest thereon, and further order that Scenic Tours Pty Ltd pay to Mr Moore post-judgment interest under s 101 of the Civil Procedure Act 2005 (NSW). Set aside order 8 of the orders made by the Court of Appeal of the Supreme Court of New South Wales on 24 October 2018 and remit to the primary judge the question of whether group members may recover damages for disappointment and distress. Vary order 14 of the orders made by the Court of Appeal of the Supreme Court of New South Wales on 7 December 2018, with reference to the Agreed Common Questions and Answers filed on 7 November 2018, as follows: Vary the last paragraph of A15 by deleting the words "however, there is no entitlement under that provision to any damages for distress or disappointment" and substituting "which damages may include disappointment and distress suffered by reason of the defendant's failure to comply with the guarantees". Vary A17 by substituting "No". Set aside order 13 of the orders made by the Court of Appeal of the Supreme Court of New South Wales on 24 October 2018 and remit the question of the costs of that appeal to that Court for reconsideration. Scenic Tours Pty Ltd pay Mr Moore's costs of the appeal and of the application for special leave to appeal. On appeal from the Supreme Court of New South Wales Representation J T Gleeson SC with J A Hogan-Doran and C G Winnett for the appellant (instructed by Somerville Legal) D L Williams SC with D S Weinberger and A A Lyons for the respondent (instructed by SWS Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Moore v Scenic Tours Pty Ltd Damages – Consumer guarantees – Personal injury – Where appellant booked holiday cruise tour supplied by respondent – Where holiday cruise tour severely disrupted by adverse weather conditions – Where respondent breached consumer guarantees in ss 60 and 61 of Australian Consumer Law ("ACL") – Where appellant claimed damages for disappointment and distress – Where s 275 of ACL provided that where failure to comply with consumer guarantee that applies to supply of services and State law proper law of contract, that law applies to limit or preclude liability for failure and recovery of liability as it would for breach of contract – Where New South Wales proper law of contract – Where s 16(1) of Civil Liability Act 2002 (NSW) ("CLA") precluded damages for non-economic loss in relation to personal injury cases unless non-economic loss at least 15% of most extreme case – Where threshold in s 16(1) not reached – Whether s 275 of ACL picked up and applied s 16 of CLA as surrogate federal law – Whether s 16 of CLA applied to preclude damages for disappointment and distress not consequential upon physical or psychiatric injury. Words and phrases – "breach of contract", "damages", "disappointment and distress", "enjoyment", "head of loss", "holiday cases", "impairment of a person's physical or mental condition", "loss of amenities of life", "non-economic loss", "pain and suffering", "peace of mind", "personal injury", "quantification of damages", "recovery", "recovery of that liability", "recreation", "surrogate federal law". Competition and Consumer Act 2010 (Cth), Sch 2, ss 60, 61, 267, 275. Civil Liability Act 2002 (NSW), ss 3, 11, 11A, 16. KIEFEL CJ, BELL, GAGELER, KEANE, NETTLE AND GORDON JJ. In 2012, the appellant ("Mr Moore") booked a holiday tour for himself and his wife with the respondent ("Scenic"). The tour, which involved a European river cruise, did not proceed as promised. It is not in issue in this appeal that Scenic's attempts to perform its contractual obligations were attended by breaches of consumer guarantees in the Australian Consumer Law ("the ACL")1. Mr Moore claimed damages in respect of loss suffered by him as a result of Scenic's breaches. The alleged loss included, among other things, disappointment and distress for breach of a contract to provide a pleasant and relaxed holiday recognised as a compensable head of loss in this Court's decision in Baltic Shipping Co v Dillon2. The issue in this appeal is whether, as Scenic contends, s 16 in Pt 2 of the Civil Liability Act 2002 (NSW) ("the CLA") applies to preclude Mr Moore from recovering damages for loss of that kind. Mr Moore's claim, founded as it was upon the ACL, was brought in federal jurisdiction. The CLA, being a State law expressed to be binding on a court, cannot affect Mr Moore's claim unless it is picked up and applied by a law of the Commonwealth3. Scenic contends that s 16 of the CLA is picked up and applied by s 275 of the ACL so as to preclude this part of Mr Moore's claim. Mr Moore's first response to Scenic's contention is that s 16 of the CLA does not apply as a surrogate federal law because s 275 does not pick up and apply those State or Territory laws that affect the assessment of compensation for loss suffered. Secondly, Mr Moore submits that loss consisting of disappointment and distress for breach of a contractual obligation to provide a pleasant and relaxed vacation is not precluded by the provisions of Pt 2 of the CLA because those provisions are concerned exclusively with claims for damages for personal injury; and his claim for the disappointment of his expectation of a pleasant and relaxed vacation is not a claim for personal injury. Thirdly, Mr Moore submits that s 16 has no application where the loss for which damages are claimed is suffered outside of New South Wales. 1 Competition and Consumer Act 2010 (Cth), Sch 2. (1993) 176 CLR 344. 3 Rizeq v Western Australia (2017) 262 CLR 1 at 24-26 [58]-[63]. Bell Nettle Gordon Mr Moore's first submission must be rejected; but his second submission should be accepted. Accordingly, Mr Moore's appeal must be allowed; and it is unnecessary to rule upon Mr Moore's third submission. It is convenient now to set out a brief summary of the factual, statutory and procedural background before turning to consider the arguments of the parties concerning the operation of s 275 of the ACL and the scope of s 16 of the CLA. The facts The river cruise was promoted in Scenic's tour brochure as "a once in a lifetime cruise along the grand waterways of Europe", with guests on board the Scenic vessel treated to "all inclusive luxury"4. Mr Moore and his wife chose Scenic's river cruise because they wanted to see different locations in Europe without having to unpack their belongings more than once5. The river cruise also suited Mr Moore because he found it difficult to spend extended periods of time sitting down, particularly in confined spaces, following spinal surgery6. The tour was paid for 12 months in advance with what Mr Moore described as his "life savings"7. The tour commenced in Paris on 31 May 2013. The river cruise along the Rhine, Main and Danube Rivers was scheduled to depart from Amsterdam on 3 June 2013 on board the Scenic Jewel and to conclude two weeks later in Budapest8. The cruise was severely disrupted by adverse weather conditions that resulted in high water levels on the Rhine and Main Rivers9. Instead of cruising for ten days as scheduled in the itinerary, Mr Moore's experience was of many 4 Moore v Scenic Tours Pty Ltd [No 2] [2017] NSWSC 733 at [3]. 5 Moore v Scenic Tours Pty Ltd [No 2] [2017] NSWSC 733 at [78]. 6 Moore v Scenic Tours Pty Ltd [No 2] [2017] NSWSC 733 at [78]. 7 Moore v Scenic Tours Pty Ltd [No 2] [2017] NSWSC 733 at [2], [813]. Scenic Tours Pty Ltd v Moore (2018) 361 ALR 456 at 461 [4]. Scenic Tours Pty Ltd v Moore (2018) 361 ALR 456 at 461 [5]. Bell Nettle Gordon hours spent travelling by bus; he cruised for only three days10. The cruise also began on board a different vessel to the luxurious Scenic Jewel11; and by the time the cruise concluded in Budapest, the Moores had changed ship at least twice12. In short, the holiday tour fell far short of the "once in a lifetime cruise" in "all inclusive luxury" that Mr Moore was promised by Scenic13. The proceedings Representative proceedings were commenced in the Supreme Court of New South Wales against Scenic by Mr Moore on his behalf and that of approximately 1,500 other passengers ("group members") of 13 Scenic cruises that were scheduled to depart between 19 May 2013 and 12 June 201314. In the representative proceedings it was alleged that Scenic failed to exercise due care and skill in the supply of the tours, in breach of the guarantee in s 60 of the ACL; that the severe disruptions to the river cruises rendered the services comprising the holiday tours unfit for the purpose for which Mr Moore and each of the group members acquired them, in breach of the guarantee in s 61(1) of the ACL; and that the tours were not of a nature and quality as could reasonably be expected to achieve the result that Mr Moore and each of the group members wished the services to achieve, in breach of the guarantee in s 61(2) of the ACL. Mr Moore's case was that Scenic knew or should have known about the weather disruptions that were likely to occur to each scheduled itinerary; and it chose not to cancel the cruises or inform the passengers in a timely manner to give them the opportunity to cancel their booking15. 10 Moore v Scenic Tours Pty Ltd [No 2] [2017] NSWSC 733 at [644]. 11 Scenic Tours Pty Ltd v Moore (2018) 361 ALR 456 at 461 [5]. 12 Moore v Scenic Tours Pty Ltd [No 2] [2017] NSWSC 733 at [5]. 13 Moore v Scenic Tours Pty Ltd [No 2] [2017] NSWSC 733 at [3]. 14 Scenic Tours Pty Ltd v Moore (2018) 361 ALR 456 at 461 [3], [7]. 15 Scenic Tours Pty Ltd v Moore (2018) 361 ALR 456 at 462 [9]. Bell Nettle Gordon Statutory provisions The ACL The ACL regulates the supply of services by corporations to consumers, Mr Moore sought relief under s 267 of the ACL. That section provides relevantly as follows: If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may: by action against the supplier, recover compensation for any reduction in the value of the services below the price paid or payable by the consumer for the services. The consumer may, by action against the supplier, recover damages for any loss or damage suffered by the consumer because of the failure to comply with the guarantee if it was reasonably foreseeable that the consumer would suffer such loss or damage as a result of such a failure. To avoid doubt, subsection (4) applies in addition to subsections (2) and (3)." Mr Moore claimed compensation pursuant to s 267(3) for the difference between the value of services provided by Scenic and the price he had paid for the services. That claim is no longer in issue. The focus of the dispute in this Court is Mr Moore's claim for damages under s 267(4) for disappointment and distress on the basis that "loss or damage" of that kind was "reasonably foreseeable" as a result of Scenic's failure to comply with the consumer guarantees. 16 Section 5(1) of the Competition and Consumer Act extends the application of the ACL (other than Pt 5-3 thereof) to "the engaging in conduct outside Australia by ... bodies corporate incorporated or carrying on business within Australia". Bell Nettle Gordon Mr Moore claimed that s 267(4) permits a court to award damages for disappointment and distress because the contract with Scenic was one aimed at providing enjoyment, relaxation, pleasure and entertainment. Scenic countered that s 275 of the ACL picks up and applies Pt 2 (and in particular s 16) of the CLA as a surrogate law of the Commonwealth, the effect of which is to preclude Mr Moore's claim for damages for disappointment and distress. Section 275 of the ACL provides: there is a failure to comply with a guarantee that applies to a supply of services under Subdivision B of Division 1 of Part 3-2; and the law of a State or a Territory is the proper law of the contract; that law applies to limit or preclude liability for the failure, and recovery of that liability (if any), in the same way as it applies to limit or preclude liability, and recovery of any liability, for a breach of a term of the contract for the supply of the services." It is uncontroversial in this appeal that, for the purposes of s 275, the proper law of the contract between Mr Moore and Scenic is the law of New South Wales. That law includes the CLA, to which one may now turn. The CLA Part 2 of the CLA is headed "Personal injury damages". The ambit of Pt 2 of the CLA is relevantly stated by s 11A as follows: "(1) This Part applies to and in respect of an award of personal injury damages ... This Part applies regardless of whether the claim for the damages is brought in tort, in contract, under statute or otherwise. (3) A court cannot award damages, or interest on damages, contrary to this Part." The term "personal injury damages" is defined in s 11 of the CLA to mean "damages that relate to the death of or injury to a person". The term "injury" is Bell Nettle Gordon defined, in turn, in s 11 to mean "personal injury", and includes "impairment of a person's physical or mental condition". Mr Moore submitted that his damages claim for disappointment and distress falls outside the scope of Pt 2 of the CLA because such damages are not damages that relate to personal injury. Scenic contended that disappointment and distress constitutes an impairment of his mental condition, and that therefore Mr Moore's claim falls within the scope of Pt 2 of the CLA. Within Pt 2 of the CLA, s 16(1) regulates personal injury damages for non-economic loss. It provides that: "No damages may be awarded for non-economic loss unless the severity of the non-economic loss is at least 15% of a most extreme case." It is common ground in this appeal that the minimum threshold set out in s 16(1) was not reached. The term "non-economic loss" is defined in s 3 of the CLA as follows: "non-economic loss means any one or more of the following: pain and suffering, loss of amenities of life, loss of expectation of life, disfigurement." Scenic argued that disappointment and distress is "pain and suffering" or "loss of amenities of life", and so, it was said, s 16(1) of the CLA applies to preclude Mr Moore's claim for damages for disappointment and distress. Bell Nettle Gordon The primary judge The primary judge (Garling J) concluded that Scenic had failed to comply with the consumer guarantees in s 60 and s 61(1) and (2) of the ACL17, and awarded Mr Moore $10,990 in compensation for loss of value (s 267(3) of the ACL); $2,000 in damages for disappointment and distress (s 267(4) of the ACL); plus interest18. His Honour held that s 275 of the ACL picks up and applies s 16 of the CLA to proceedings in federal jurisdiction19 and, further, that he was bound by authority20, "however surprising that result may appear in this case to be"21, to hold that a claim for damages for disappointment and distress is a claim for damages that relate to the injury of a person under Pt 2 of the CLA22. In the upshot, however, the primary judge rejected Scenic's contention that s 16 of the CLA applies to Mr Moore's claim. The basis for that conclusion was that s 16 of the CLA has no application to loss suffered outside of New South Wales; and that, because Mr Moore's disappointment and distress was suffered overseas, his claim for damages by way of compensation for that loss was unaffected by s 1623. The Court of Appeal The Court of Appeal of the Supreme Court of New South Wales (Sackville A-JA, with whom Payne JA and Barrett A-JA agreed) upheld the 17 Moore v Scenic Tours Pty Ltd [No 2] [2017] NSWSC 733 at [939]. 18 Moore v Scenic Tours Pty Ltd [No 2] [2017] NSWSC 733 at [941], [944], [946(1)]. 19 Moore v Scenic Tours Pty Ltd [No 2] [2017] NSWSC 733 at [942]. 20 Moore v Scenic Tours Pty Ltd [No 2] [2017] NSWSC 733 at [854]. 21 Moore v Scenic Tours Pty Ltd [No 2] [2017] NSWSC 733 at [854]. 22 Moore v Scenic Tours Pty Ltd [No 2] [2017] NSWSC 733 at [854], [873]. 23 Moore v Scenic Tours Pty Ltd [No 2] [2017] NSWSC 733 at [908]-[911], [943]. Bell Nettle Gordon primary judge's conclusion that Scenic had breached the consumer guarantees in s 61(1) and (2) of the ACL in relation to Mr Moore's holiday tour24. The Court of Appeal overturned the primary judge's conclusion concerning Scenic's breach of s 60 of the ACL25, but that is of no present significance. The Court of Appeal agreed with the primary judge that s 16 of the CLA is a law of New South Wales that is picked up and applied by s 275 of the ACL to limit Scenic's liability under the ACL. Sackville A-JA said26: "Section 16 prohibits an award of damages for non-economic loss unless the threshold requirement of 15 per cent of a 'most extreme case' is met. It follows, subject to any geographical limitation, that s 16(1) applies to limit or preclude Scenic's liability for its failure to comply with the [relevant consumer guarantees] in the same way as s 16(1) would apply to limit or preclude liability for a breach of the contract between Scenic and Mr Moore." On the other hand, the Court of Appeal disagreed with the primary judge's view that s 16 has no application to loss sustained outside of New South Wales27. In this regard, Sackville A-JA explained that28: "When s 16(1) of the [CLA] is read with s 11A and the definition of 'court' in s 3, the relevant matter or thing in and of New South Wales is seen to be the awarding of damages in New South Wales by a court or tribunal. In my opinion, there is no contextual reason for reading s 16(1) as subject to any other geographical limitation." (emphasis added) 24 Scenic Tours Pty Ltd v Moore (2018) 361 ALR 456 at 552 [396]. 25 Scenic Tours Pty Ltd v Moore (2018) 361 ALR 456 at 552 [396]. 26 Scenic Tours Pty Ltd v Moore (2018) 361 ALR 456 at 549 [381]. 27 Scenic Tours Pty Ltd v Moore (2018) 361 ALR 456 at 551 [389], [391]. 28 Scenic Tours Pty Ltd v Moore (2018) 361 ALR 456 at 551 [388] (footnotes omitted). Bell Nettle Gordon Accordingly, the primary judge's award of damages for disappointment and distress was set aside. In the Court of Appeal, Mr Moore reserved his position as to whether a claim for damages for disappointment and distress constitutes a claim for personal injury damages for non-economic loss within the terms of s 16 of the CLA29. That position was taken in light of the state of authority in New South Wales on the issue. That issue was not considered by the Court of Appeal; but it is pursued by Mr Moore in this Court. Does s 275 of the ACL pick up and apply s 16 of the CLA? Mr Moore, in challenging the conclusion of the primary judge and the Court of Appeal that s 16 of the CLA is a law that is picked up and applied by s 275 of the ACL to his claim, submitted that, properly construed, s 275 is directed to State and Territory laws that limit or preclude liability for breach of contract, and is not concerned with laws that limit the assessment of damages once liability has been established. Mr Moore argued that s 16 of the CLA is a law that governs the assessment and quantification of "damages" rather than a law that imposes a limitation upon "liability". It must be said immediately that the distinction that Mr Moore seeks to draw is as difficult to appreciate as it was for Mr Moore's counsel to articulate. Importantly, Mr Moore's construction of s 275 is distinctly awkward in its attempt to downplay the significance of the reference in the provision to "recovery of that liability". Section 275 contemplates limitations upon both "liability" and "recovery"; the reference to "recovery" must be given effect. "Recovery" is readily understood to encompass the amount of money assessed as compensation for the loss for which the defendant is liable. Mr Moore argued that the reference in s 275 to "recovery of that liability" is apt to pick up only those State and Territory laws that limit or preclude legal responsibility for a wrong by placing a ceiling or cap upon the entitlement to recover for that wrong. An example of such a law was said to be that in issue in Wallis v Downard-Pickford (North Queensland) Pty Ltd30. It was said that s 275 is not concerned with laws that affect the quantification of 29 Scenic Tours Pty Ltd v Moore (2018) 361 ALR 456 at 540 fn 222. (1994) 179 CLR 388. Bell Nettle Gordon recoverable damages where substantive liability for breach has already been established. Mr Moore's argument sits uneasily with the ordinary meaning of the text of s 275. On the natural reading of s 275, the section is concerned to allow a State or Territory law comprehensively to limit or preclude both liability and recovery of compensation by way of damages for that liability if the State or Territory law has that effect in relation to other contracts governed by the law of the State or Territory. Within the immediate context in which s 275 appears, the natural reading of the text is confirmed by s 267(3) and (4). These provisions permit a consumer to "recover" compensation or damages for failure to comply with a consumer guarantee; they plainly contemplate the quantification of an amount that may be recovered by way of satisfaction of the defendant's liability. The evident purpose of s 275 is to pick up and apply State and Territory laws that limit the amount of compensation or damages that might otherwise be recovered under s 267(3) and (4) of the ACL. Other aspects of the context in which s 275 of the ACL appears provide no support for the distinction for which Mr Moore argues. In this regard, ss 281 and 285 of the ACL refer to a particular species of liability as being limited to an amount that does not exceed the sum of the amounts then set out. These provisions are plainly concerned with limitations upon the recovery of the amount, in monetary terms, that may be assessed to be necessary to extinguish the defendant's liability. Mr Moore also contended that his argument is supported by the legislative history of s 275. He observed, in this regard, that s 275 of the ACL is similar in material respects to its predecessor, s 74(2A) of the Trade Practices Act 1974 (Cth) ("the TPA"), which was enacted to preserve State laws against invalidity for inconsistency with federal laws under s 109 of the Constitution. Section 74(2A) of the TPA was enacted in response to this Court's decision in Wallis. In that case, a State law that purported to limit the extent of a carrier's liability for a customer's lost goods to $20 per package carried was held to be invalid on the basis that it was inconsistent with s 74(1) of the TPA, which created "full contractual liability for breach"31. Seizing upon the circumstance that the State law in issue in Wallis imposed a monetary ceiling on recovery for each item of loss, Mr Moore sought (1994) 179 CLR 388 at 396. Bell Nettle Gordon to argue that s 74(2A) of the TPA and s 275 of the ACL should not be taken to have been intended to have an operation beyond the preservation of the validity of State laws of that particular kind. Nothing in the text, context, or purpose of the amendment of the TPA or the enactment of s 275 of the ACL suggests that either provision was confined to preserving only laws having that particular operation from the effect of s 109 of the Constitution. The legislative history provides no basis for the artificially constricted understanding of s 275 for which Mr Moore contended. The evident purpose of the amendment of the TPA and the enactment of s 275 of the ACL was to ensure the application of State and Territory laws that limit the extent of recovery for breach of a contract otherwise governed by that law. It is difficult to see any reason why the purpose would be to apply State and Territory laws limiting heads of compensable loss but not to apply State and Territory laws regulating the quantification of damages recoverable. The extrinsic materials do not suggest any such reason for taking that course, or any reason why s 275 should not pick up and apply State laws, like s 16 of the CLA, which regulate the quantification of the damages required to extinguish a liability for loss32. Do damages for disappointment and distress constitute personal injury damages for non-economic loss? Scenic submitted that Mr Moore's disappointment and distress is an "injury" for the purposes of Pt 2 of the CLA because it is an impairment to his mental condition. Scenic argued that a person's mental condition is impaired when expectations of pleasure, entertainment or relaxation in holiday cases are unfulfilled or dashed. In this regard, Scenic referred in particular to the reasoning of Brennan J in Baltic Shipping, where his Honour described "disappointment of mind" as "a mental reaction to a breach of contract" and "severe tension of mind and depression of spirit" as well as "mental distress"33. Scenic also argued that disappointment and distress constitutes "pain and suffering" or, alternatively, "loss 32 Compare Australia, House of Representatives, Treasury Legislation Amendment (Professional Standards) Bill 2003, Supplementary Explanatory Memorandum at 1 [1.3]-[1.5]; Australia, House of Representatives, Trade Practices Amendment (Australian Consumer Law) Bill (No 2) 2010, Explanatory Memorandum at 208 (1993) 176 CLR 344 at 368-371. Bell Nettle Gordon of amenities of life", within the definition of "non-economic loss" in s 3 of the CLA. Mr Moore submitted that his claim for damages for disappointment and distress for breach of contract falls outside Pt 2 of the CLA because the damages he claimed by way of compensation for his disappointment and distress do not relate to personal injury. He argued that a reaction of disappointment and distress to the breach of such a promise – a promise that had been bought and paid for – is a normal and healthy response to that disappointment rather than an impairment of the plaintiff's mental condition. It was said that the disappointment of a contractual expectation of recreation, relaxation and freedom from molestation is not "impairment" of a person's mental condition within the meaning of "injury" in s 11; nor is it "non-economic loss" under s 3 of the CLA. There is force in this submission. Disappointment at a breach of a promise to provide recreation, relaxation and peace of mind is not an "impairment" of the mind or a "deterioration" or "injurious lessening or weakening" of the mind34. Frustration and indignation as a reaction to a breach of contract under which the promisor undertook for reward to provide a pleasurable and relaxing holiday is, of itself, a normal, rational reaction of an unimpaired mind. In this regard, Mr Moore's claim for damages for his disappointment and distress resulting from Scenic's breach of contract can be seen as no more a claim relating to personal injury than would be a claim for damages for the indignation occasioned by false imprisonment or defamation. As was said in New South Wales v Williamson35 by French CJ and Hayne J, with whom Kiefel J agreed36, while there may be cases where an act of false imprisonment itself causes psychiatric injury, insofar as an action for false imprisonment claims damages for loss of dignity and harm to reputation associated with the deprivation of liberty it is not a claim for an "impairment of a person's physical or mental condition" or otherwise a form of injury within s 11 of the CLA. Scenic's submission invites this Court to elide the distinction between loss being disappointment and distress for breach of a contract to provide a pleasurable 34 New South Wales v Corby (2010) 76 NSWLR 439 at 444 [24]. (2012) 248 CLR 417 at 428-429 [33]-[34]. (2012) 248 CLR 417 at 431 [45]. Bell Nettle Gordon and relaxing experience and loss being disappointment and distress that is consequential upon personal injury. That submission is untenable in light of this Court's decision in Baltic Shipping. Baltic Shipping In Baltic Shipping37, every member of that disappointment and distress "caused by the breach of a contract ... the object of the contract being to provide pleasure or relaxation"38 is a compensable head of loss separate and distinct from injured feelings compensable under the rubric of pain and suffering and loss of amenities of life associated with personal injury. the Court accepted Mason CJ, with whom Toohey and Gaudron JJ relevantly agreed, took stock of the exceptions to the general rule that damages could not be recovered for injured feelings caused by a breach of contract, and described one exception in favour of claims for "damages for distress, vexation and frustration where the very object of the contract has been to provide pleasure, relaxation or freedom from molestation"39. That exception was identified as a category separate and distinct from a further exception, being a claim for "damages for pain and suffering, including mental suffering and anxiety, where the defendant's breach of contract causes physical injury to the plaintiff"40. In relation to the latter category, Mason CJ was at pains to explain that damages for pain and suffering consequent upon physical injury may include compensation for injured feelings41, while the former category stands independent of physical or psychiatric injury. Scenic's reliance upon the reasons of Brennan J in Baltic Shipping is misplaced. His Honour made it clear that disappointment and distress is compensable damage where no physical or psychiatric injury or impairment has been suffered. Brennan J referred first to the general rule that "where (1993) 176 CLR 344 at 362-363, 371-372, 380-382, 383, 387, 404-405. (1993) 176 CLR 344 at 363. 39 Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 363. 40 Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 362. 41 Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 362 fn 95. Bell Nettle Gordon disappointment of mind is no more than a mental reaction to a breach of contract and damage flowing therefrom" that reaction is not compensable damage42. His Honour then referred to the exception to the general rule where the "'disappointment of mind' is itself the 'direct consequence of the breach of contract'" and made the point that "[i]n such a case the disappointment is not merely a reaction to the breach and resultant damage but is itself the resultant damage"43. His Honour went on to say44: "[I]f peaceful and comfortable accommodation holidaymakers and the accommodation tendered does not answer the description, there is a breach which directly causes the loss of the promised peacefulness and comfort and damages are recoverable accordingly." is promised Disappointment and distress of this kind is not "non-economic loss" under Pt 2 of the CLA. The text and structure of Pt 2 of the CLA are clear that non-economic loss within Pt 2 is a head of loss associated with personal injury as pain and suffering. At common law, "pain and suffering" was understood to mean actual physical hurt occasioned by the accident or its aftermath45; and damages for emotional harm were not recoverable unless a psychiatric injury was suffered46. Similarly, the assessment of damages for "loss of amenities of life" invites a comparison between the ability of a person to enjoy life before and after the personal injury47. But in the present case, no physical injury was alleged and no psychiatric illness was alleged to have resulted from the breach of the consumer guarantees in the ACL. The exception to the general rule relating to promises of 42 Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 368. 43 Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 369-370. 44 Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 371. Physical or psychiatric impairment is no part of the compensable loss. 45 Balkin and Davis, Law of Torts, 5th ed (2013) at 389-390, citing Teubner v Humble (1963) 108 CLR 491 at 507. 46 Sappideen and Vines (eds), Fleming's The Law of Torts, 10th ed (2011) at 280-281. 47 Teubner v Humble (1963) 108 CLR 491 at 506, 508; Commonwealth of Australia, Review of the Law of Negligence: Final Report (2002) at 186 [13.20]. Bell Nettle Gordon enjoyment, relaxation or freedom from molestation, breach of which results directly in disappointment and distress48, compensates a plaintiff for what he or she was promised where the expectation of a peaceful and contented holiday has been unfulfilled49. The comparison between "the expectations against the reality"50 does not involve any reference to, or assessment of, an impairment to the plaintiff's mental condition. The authorities on Pt 2 of the CLA It has already been noted that the primary judge regarded himself as bound by authority to hold that a claim for damages for disappointment and distress was caught by Pt 2 of the CLA51. The primary judge was not indulging in hyperbole when he described this result as "surprising"52. Mr Moore's right to recover damages for such loss was securely established by this Court's decision in Baltic Shipping. Nothing in the text of the CLA suggests that Pt 2 was enacted with a view to limiting the liability of a defendant for claims that do not involve personal injury as defined in the CLA. It is a strong thing to hold that the entitlement recognised by this Court in Baltic Shipping as standing independently of personal injury was abrogated by Pt 2 of the CLA, given the absence of any reference to that entitlement, in either the text or the extrinsic materials53, and given further that the mischief at which Pt 2 of the CLA was directed was what was perceived as the excessive strain on insurance schemes established to indemnify defendants against their liability under the common law for loss relating to personal injury. The loss suffered by Mr Moore, and Scenic's liability to compensate him for that loss, have nothing to do with the mischief at which Pt 2 of the CLA was directed. 48 Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 365. 49 Jarvis v Swans Tours Ltd [1973] QB 233 at 239. 50 Milner v Carnival Plc [2010] 3 All ER 701 at 717 [47]. 51 Moore v Scenic Tours Pty Ltd [No 2] [2017] NSWSC 733 at [854], [865]. 52 Moore v Scenic Tours Pty Ltd [No 2] [2017] NSWSC 733 at [854]. 53 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 28 May 2002 at 2085-2088. Bell Nettle Gordon The primary judge referred in particular to the decision of Barr A-J in Flight Centre Ltd v Louw54. In that case the defendants claimed damages against the plaintiff travel agent for disappointment and distress in relation to an overseas holiday that was disrupted by construction noise and inaccessibility of parts of a resort by reason of the construction activity. The defendants had not claimed to have suffered any physical injury. Barr A-J held that "the inconvenience, distress and disappointment experienced ... constituted non-economic loss for the purposes of s 3 [of the CLA], being pain and suffering ... [T]hey constituted impairment of the mental condition of [the defendants] and so amounted to personal injury [under Pt 2 of the CLA]."55 This view has subsequently been applied in Tralee Technology Holdings Pty Ltd v Yun Chen56, but Flight Centre was the first case to hold that a claim of the kind made by Mr Moore is caught by Pt 2 of the CLA. In this regard, Flight Centre was incorrectly decided. Barr A-J cited the Court of Appeal's decision in Insight Vacations Pty Ltd v Young57 and the decisions of the Court of Appeal in New South Wales v Ibbett58 and New South Wales v Corby59 as support for the view that disappointment and distress constitutes an "impairment" of a person's mental condition under s 11 of the CLA. It is to be emphasised that these were cases where the disappointment and distress in issue was claimed as loss consisting of, or consequential upon, physical injury. Neither Ibbett nor Corby concerned damages for disappointment and distress for breach of a contract to provide a pleasurable and relaxing holiday – neither case was analogous to the holiday cases. The references in these cases to "distress" and "humiliation and injury to feelings" do not import the same meaning as disappointment and distress as understood in the holiday cases. These decisions (2010) 78 NSWLR 656. 55 Flight Centre Ltd v Louw (2010) 78 NSWLR 656 at 663 [31]. [2015] NSWSC 1259 at [61]. (2010) 78 NSWLR 641. (2005) 65 NSWLR 168. (2010) 76 NSWLR 439. Bell Nettle Gordon were concerned with claims for damages for personal injuries. They do not stand as authority for the proposition that a claim for damages for breach of contract for disappointment and distress which is not consequent upon physical or psychiatric injury, but instead flows directly from a breach of a contract to provide pleasure, relaxation and freedom from molestation, is a claim in respect of non-economic loss relating to personal injury within the scope of Pt 2 of the CLA. When, in Ibbett, Ipp JA said that "anxiety and distress would be an 'impairment' of a person's mental condition in accordance with the ordinary meaning of 'impairment', as the word is used in s 11"60, his Honour was speaking in a context in which he accepted that anxiety and distress arising from an apprehension of physical violence is encompassed by "injury"61. When, in Corby, Basten JA (with whom Beazley and Tobias JJA agreed) said that "to adopt a definition of 'injury' which did not include matters such as humiliation and injury to feelings ... is untenable"62, his Honour was directing his attention to an argument that aggravated damages fell outside personal injury damages. His Honour went on to explain63: "The general damages available for compensation for tortious conduct include damages for pain and suffering. There is no basis for limiting pain and suffering to physical suffering." Insight Vacations was a case in which the plaintiff claimed damages for personal injuries suffered during the course of a European tour purchased from the defendant. The disappointment and distress suffered by the plaintiff was directly occasioned by her physical injury. The plaintiff was unable to enjoy the balance of her tour by reason of the physical injuries sustained in the course of the tour64. (2005) 65 NSWLR 168 at 175 [124]. 61 New South Wales v Ibbett (2005) 65 NSWLR 168 at 175 [125]. See also at 171 [11] (2010) 76 NSWLR 439 at 449 [47]. 63 New South Wales v Corby (2010) 76 NSWLR 439 at 449 [47]. Insight Vacations Pty Ltd v Young (2010) 78 NSWLR 641 at 654 [173]. Bell Nettle Gordon Those physical injuries resulted from the defendant's breach of the implied term of the contract obliging it to render the relevant services with due care and skill. Basten JA concluded that it was "sufficient for present purposes to conclude that elements of distress and disappointment resulting from the physical injury in the course of the holiday, would have warranted inclusion in an award of damages for non-economic loss under the general law in relation to negligence"65. Sackville A-JA reached that "[t]he disappointment ... resulted from the [plaintiff's] inability to enjoy her tour by reason of the injuries sustained in the course of the tour"66. Sackville A-JA observed that67: the same conclusion, holding "Whatever uncertainties may arise in relation to the expression 'personal injury' in Pt 2 of the [CLA] ... in the present case the [plaintiff] clearly sustained personal injury in consequence of the [defendant's] breach of contract. If the damages awarded for disappointment flowing from the [plaintiff's] inability, by reason of the personal injury, to enjoy the remainder of her holiday, were damages that 'relate[d] to' her injury, they were 'personal injury damages' (s 11) and Pt 2 of the [CLA] applied in respect of the award of such damages (s 11A(1))." (emphasis added) It has been seen that in Baltic Shipping, Mason CJ, in taking stock of the exceptions to the general rule that damages for disappointment and distress were not recoverable in actions for breach of contract, noted that one such exception was a claim for "pain and suffering, including mental suffering and anxiety, where the defendant's breach of contract causes physical injury to the plaintiff"68. Insight Vacations was such a case. The present case is readily distinguishable because Mr Moore's disappointment and distress was not occasioned by any physical Insight Vacations Pty Ltd v Young (2010) 78 NSWLR 641 at 650 [129]. Insight Vacations Pty Ltd v Young (2010) 78 NSWLR 641 at 654 [173]. Insight Vacations Pty Ltd v Young (2010) 78 NSWLR 641 at 653 [164]. (1993) 176 CLR 344 at 362. Bell Nettle Gordon injury. Mr Moore made no claim that he had suffered any physical injury or recognised psychiatric illness by reason of his experience69. In Insight Vacations, Spigelman CJ agreed with the reasoning of both Basten JA and Sackville A-JA70. This may have been something of a departure from Spigelman CJ's earlier view in Ibbett71. In that case, his Honour had accepted that reactions such as disappointment and distress do not involve an impairment of a person's mental condition, at least where the reaction is not an aspect of physical injury. Spigelman CJ had said72: "The concept of 'personal injury' ... has rarely, if ever, been used to refer to harm to reputation, deprivation of liberty, or to injured feelings such as outrage, humiliation, indignity and insult or to mental suffering, such as grief, anxiety and distress, not involving a recognised psychological condition. (See, for example, Baltic Shipping Co v Dillon (1993) 176 CLR This passage, which accords with the view of French CJ, Hayne and Kiefel JJ in Williamson73, reflects a correct appreciation of the effect of this Court's decision in Baltic Shipping that a claim of the kind made by Mr Moore in this case stands separately and apart from a claim for damages for disappointment and distress associated with physical injury. For the sake of completeness, it should also be noted that there is a suggestion in the reasons of the Court of Appeal in the present case74 that when Insight Vacations75 came before this Court on appeal, the Court accepted that this issue had been correctly decided below. In this regard, the Court of Appeal erred. 69 Moore v Scenic Tours Pty Ltd [No 2] [2017] NSWSC 733 at [39]. (2010) 78 NSWLR 641 at 644 [78]. (2005) 65 NSWLR 168 at 172 [21]-[22]. 72 New South Wales v Ibbett (2005) 65 NSWLR 168 at 172 [21]. (2010) 248 CLR 417 at 428-429 [33]-[34], 431 [45]. 74 Scenic Tours Pty Ltd v Moore (2018) 361 ALR 456 at 540 fn 222. (2011) 243 CLR 149. Bell Nettle Gordon This Court in Insight Vacations did not address those conclusions, and, indeed, had no occasion to do so given the issues before it. Conclusion For these reasons, the appeal must be allowed. Mr Moore argued that s 16 of the CLA, construed in light of s 12(1)(b) of the Interpretation Act 1987 (NSW), has no application to his case because the disappointment and distress in respect of which he claims was suffered outside of New South Wales. It is unnecessary to proceed to consider whether s 16 of the CLA is subject to the geographical limitation for which Mr Moore contended. As has been explained, s 16 does not affect Scenic's liability to Mr Moore in respect of his claim for damages for disappointment and distress. That is the case irrespective of where that loss was suffered. Orders The following orders, which the parties agreed should take effect in the event the appeal be successful, should be made: The appeal be allowed. Order 5 made by the Court of Appeal on 24 October 2018 be set aside and the primary judge's order of damages for disappointment and distress pursuant to s 267(4) of the ACL and for pre-judgment interest thereon be reinstated, and further it be ordered that Scenic pay to Mr Moore post-judgment interest under s 101 of the Civil Procedure Act 2005 (NSW). Order 8 made by the Court of Appeal on 24 October 2018 be set aside and the question of whether group members may recover damages for disappointment and distress be remitted to the primary judge. Order 14 made by the Court of Appeal on 7 December 2018 be varied, with reference to the Agreed Common Questions and Answers filed on 7 November 2018, as follows: (a) Varying the last paragraph of A15, by deleting the words "however, there is no entitlement under that provision to any damages for distress or disappointment" and substituting "which damages may include disappointment and distress suffered by reason of the defendant's failure to comply with the guarantees". Bell Nettle Gordon (b) Varying A17, by substituting "No". Order 13 made by the Court of Appeal on 24 October 2018 be set aside, and the question of costs of that appeal be remitted to that Court for reconsideration. Scenic pay Mr Moore's costs of the appeal and of the application for special leave to appeal. Edelman EDELMAN J. I agree with the reasons and proposed orders in the joint judgment. I wish only to add the following additional remarks concerning why Mr Moore was correct in his submission that Pt 2 of the Civil Liability Act 2002 (NSW) is concerned exclusively with claims for damages for personal injury and why those damages do not extend to compensation for "expectation loss", including distress or disappointment, where that loss is not consequential upon physical injury whether the claim is brought for a breach of contract or a breach of the consumer guarantees in s 61(1) and (2) of the Australian Consumer Law76. The primary species of damages for a breach of contract are often expressed as "expectation damages"77 or as responding to an "expectation loss"78. These expressions were relied upon by both parties to this appeal in their explanations of the nature of damages for breach of the consumer guarantees in s 61(1) and (2) of the Australian Consumer Law and the operation of Pt 2 of the Civil Liability Act on those damages. However, the expressions are problematic79. In particular, they can conceal a fundamental difference between two components of compensatory damages for breach of contract, both of which are necessary parts of the compensatory goal of restoring the injured party to the position they would have been in if the breach had not occurred80. Those components are compensation directly for the performance interest and compensation for consequential losses. The two components are provided for separately in s 267(3) and s 267(4) of the Australian Consumer Law respectively. Where contract damages provide compensation directly based on the performance interest, that component of the award is not concerned with loss in any real or factual sense. The compensation for the performance interest, "by the 76 Competition and Consumer Act 2010 (Cth), Sch 2. 77 The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 80, 82, 161; Clark v Macourt (2013) 253 CLR 1 at 11 [27]. 78 Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 at 11-12; Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 at 502 [12]. 79 Coote, "Contract Damages, Ruxley, and the Performance Interest" (1997) 56 Cambridge Law Journal 537 at 542. See also Friedmann, "The Performance Interest in Contract Damages" (1995) 111 Law Quarterly Review 628. 80 Robinson v Harman (1848) 1 Ex 850 at 855 [154 ER 363 at 365]; Wenham v Ella (1972) 127 CLR 454 at 471; The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 80, 98, 117, 134, 148, 161; Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 362; Mann v Paterson Constructions Pty Ltd (2019) 93 ALJR 1164 at 1208 [191]; 373 ALR 1 at 52. Edelman value of the promised performance", appears "as a 'loss' only by reference to an unstated ought"81. The aim of this component of the award is to provide the promisee with the difference between the value of what was promised and the value of what was received. The promisee had a primary right to performance of the contract so, upon termination, the law generally provides for a secondary right for the value of the performance that was not received or the difference in value due to the defect82. This component of compensation is contained in s 267(3) of the Australian Consumer Law, where a consumer may "recover compensation for any reduction in the value of the services below the price paid or payable by the consumer for the services". In contracts for the provision of a service involving pleasure or enjoyment this measure of damages can provide some compensation for the value of the lost enjoyment benefit "because the breach results in a failure to provide the promised benefits"83. An assessment of Mr Moore's damages referable to his performance interest was remitted by the Court of Appeal of the Supreme Court of New South Wales for determination by the trial judge84. A promisee might also suffer true, consequential, loss from a breach of contract. These consequential losses might include economic (financial) losses to the promisee to the extent that they go beyond the value of the promised performance and are within the boundaries of legal responsibility85. They can also include some non-economic losses. This component of consequential loss is contained in s 267(4) of the Australian Consumer Law, a head of damages additional to s 267(3)86, which allows for recovery of further loss or damage for a relevant failure to comply with 81 Fuller and Perdue, "The Reliance Interest in Contract Damages: 1" (1936) 46 Yale Law Journal 52 at 53 (emphasis in original). See Clark v Macourt (2013) 253 CLR 1 at 7 [11], 19 [61], 30 [107]. See also Winterton, Money Awards in Contract Law 82 Mann v Paterson Constructions Pty Ltd (2019) 93 ALJR 1164 at 1209-1210 [195]- [197]; 373 ALR 1 at 53-55. 83 Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 365. 84 Scenic Tours Pty Ltd v Moore (2018) 361 ALR 456 at 537 [335], 552 [396(iv)]. 85 Compare Hadley v Baxendale (1854) 9 Ex 341 at 354 [156 ER 145 at 151] and Transfield Shipping Inc v Mercator Shipping Inc [2009] AC 61 at 68 [12]. 86 See Australian Consumer Law, s 267(5). Edelman a guarantee as provided in s 267(1) "if it was reasonably foreseeable that the consumer would suffer such loss or damage as a result of such a failure". The assumption of all the parties to this litigation has been that the damages recoverable under s 267(4) for non-economic loss are governed by the same principles as common law damages for breach of contract. As to non-economic losses for a breach of contract at common law, in Baltic Shipping Co v Dillon87 Mason CJ, with whom Toohey and Gaudron JJ agreed on this point, listed the circumstances based on earlier authority in which those non- economic losses are recoverable: (i) damages for injured feelings in an action for breach of promise of marriage; (ii) damages for pain and suffering, including mental suffering and anxiety, where the breach of contract causes physical injury to the plaintiff; (iii) damages for physical inconvenience including fatigue88; (iv) damages for mental suffering directly related to physical inconvenience such as "vexation" and "discomfort"89; and (v) damages for distress, vexation and frustration where "the very object of the contract has been to provide pleasure, relaxation or freedom from molestation". In effect, damages for what might broadly be described as mental harm consequent upon a breach of contract are available at common law in categories where the harm is: (i) "pain and suffering" consequent upon physical injury that arises from the breach of contract, (ii) "vexation and discomfort" consequent upon physical inconvenience that arises from the breach of contract, or (iii) "distress or disappointment" in contracts for the provision of pleasure or relaxation. It may be that the common principle underlying recovery in these disparate categories is that in each category, unlike in contracts generally, a promisor will usually be taken to have assumed the risk of liability for such distress90. Nevertheless, each category has had a separate history of development, reflected in the different descriptions of the types of mental harm in each category. (1993) 176 CLR 344 at 362-363. 88 For instance, Hobbs v London and South Western Railway Co (1875) LR 10 QB 111 at 115-116, compare at 120, 123 where Blackburn and Mellor JJ treated the award as a large award based on the expectation interest. 89 Watts v Morrow [1991] 1 WLR 1421 at 1439-1440; [1991] 4 All ER 937 at 954- 955. See also Perry v Sidney Phillips & Son [1982] 1 WLR 1297 at 1303; [1982] 3 All ER 705 at 709 ("anxiety, worry and distress"). 90 Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 362, rejecting Treitel, The Law of Contract, 8th ed (1991) at 878. See also Transfield Shipping Inc v Mercator Shipping Inc [2009] AC 61 at 68 [12]. Edelman Although contract law recognised a category of damages for "pain and suffering" where the breach of contract resulted in physical injury, this head of damages was concurrent with the far more common means by which a plaintiff would claim for breach of their rights resulting in physical injury, namely by a claim based upon a tort, usually the tort of negligence. The expression "pain and suffering" is one of the long-established categories into which general damages for non-pecuniary loss are divided in the law of torts91. In the law of torts, "pain and suffering" encompasses, respectively, the "immediate felt effect upon the nerves and brain of some lesion or injury to a part of the body" and the "distress which is not felt as being directly connected with any bodily condition"92. To this mental harm is sometimes added the "loss of amenities of life", which, apart from a modest amount for the objective capacity "to experience the varied quality of life"93, is concerned with the "subjective element" of living with an "incapacity, fully conscious of the limitations which it imposes upon ... enjoyment of life"94. Sometimes an additional category for subjective distress caused by "disfigurement" has also been recognised95, although the subjective effects of disfigurement could be divided among the categories of pain and suffering and loss of amenities of life and the usual practice is to award it as part of a single award of general damages encompassing pain and suffering and loss of amenity96. The restrictions in s 16 in Pt 2 of the Civil Liability Act concerning damages for non-economic loss are subject to two related constraints. Each constraint informs the interpretation of the other. The first constraint is that Pt 2 applies to, and in respect of, an award of "personal injury damages"97. The definition of personal injury damages is in terms that borrow heavily from the law of torts. 91 See, eg, Mayne, A Treatise on the Law of Damages (1872) at 351. 92 McCormick, Handbook on the Law of Damages (1935) at 315. 93 Skelton v Collins (1966) 115 CLR 94 at 102. 94 Skelton v Collins (1966) 115 CLR 94 at 113; see also at 132, 137. 95 Luntz, Assessment of Damages for Personal Injury and Death, 4th ed (2002) at 245. 96 See, eg, Shepherd v McGivern [1966] 1 NSWR 55 at 56; Stanners v Stanners [1968] 2 NSWR 90 at 91; Papanayiotou v Heath (1969) 43 ALJR 433 at 434. See also Burrows, Remedies for Torts, Breach of Contract, and Equitable Wrongs, 4th ed 97 Civil Liability Act 2002 (NSW), s 11A. Edelman Personal injury damages are "damages that relate to the death of or injury to a person". An injury is defined as "personal injury", which includes "pre-natal injury", "impairment of a person's physical or mental condition", or "disease"98. In Pt 3, the Civil Liability Act also generally follows the traditional approach of the law of torts by prohibiting recovery for "mental harm" that is not the consequence of "physical harm" to the body unless the mental harm consists of a recognised psychiatric illness99. That traditional approach, embedded in the language of the law which still distinguishes the physical and the mental, treats mental harm as though it were not the product of physical processes. However, just as Windeyer J was "not prepared to carry Cartesian doctrine so far as to distinguish ... between injuries to body and mind"100 in order to make fundamental distinctions between "physical injury" and "mental injury" in the law of torts, Pt 3 of the Civil Liability Act also generally follows the law of torts and treats mental harm amounting to recognised psychiatric harm in the same way as physical injury101, albeit with an added "control mechanism"102 in s 30, before recovery will be permitted103. The second constraint in s 16 of the Civil Liability Act also borrows heavily from the law concerning compensation for personal injury in the law of torts. Section 16 applies only to non-economic loss, which is defined in s 3 as meaning any one or more of the following: (a) pain and suffering; (b) loss of amenities of life; (c) loss of expectation of life; and (d) disfigurement. Putting to one side the "conventional award" in the law of torts of an amount for an objective loss of expectation of life unconnected with any mental harm, which was described by Gibbs and Stephen JJ as "curious and unsatisfactory"104 and was abolished as a separate head of damages in England and Wales105, the other three categories 98 Civil Liability Act, s 11. 99 Civil Liability Act, ss 27, 31. 100 Skelton v Collins (1966) 115 CLR 94 at 130. See, now, Tame v New South Wales (2002) 211 CLR 317. 101 See Commonwealth of Australia, Review of the Law of Negligence: Final Report 102 Tame v New South Wales (2002) 211 CLR 317 at 379-380 [186]. 103 Commonwealth of Australia, Review of the Law of Negligence: Final Report (2002) 104 Sharman v Evans (1977) 138 CLR 563 at 584. 105 Administration of Justice Act 1982 (UK), s 1(1)(a). Edelman comprise a classic statement of heads of general damages consequent upon physical injury in the law of torts. The scheme in Pt 2 of the Civil Liability Act is therefore concerned only with claims for personal injury, assertions of violations of the integrity of body and mind that have traditionally been brought as a claim for a tort. Although s 11A(2) provides that Pt 2 of the Civil Liability Act applies "regardless of whether the claim for the damages is brought in tort, in contract, under statute or otherwise", this is an anti-avoidance provision designed to ensure that a claimant cannot avoid the restrictions in Pt 2 by bringing their claim for damages consequential upon physical injury as a claim in contract or under statute. As the Ipp Report, upon which the Civil Liability Act reforms were based106, explained107: "[I]n order to be 'principled' and effective, reforms of personal injury law must deal with such liability regardless of the legal category (tort, contract, equity, under statute or otherwise) under which it arises. If they do not, it may be possible for a claimant to evade limitations on liability for personal injury and death that attach to one cause of action by framing the claim in another cause of action. For example, if a limitation on liability or damages were applied only to the tort of negligence, injured persons would be encouraged to explore the possibility of framing their claim in contract or for breach of a statutory provision." The scheme in Pt 2 of the Civil Liability Act may be comprehensive in its coverage of damages that are consequential upon physical injury so that, for instance, it would include damages for mental harm where the effect of the physical injury was to ruin or prevent the plaintiff's holiday108. But where the claim for breach of contract or for breach of a statutory guarantee is not for damages that are consequential upon physical injury then Pt 2 of the Civil Liability Act does not apply to either of the components of a claim for compensatory damages for breach of contract, namely the performance interest or consequential losses. 106 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 23 October 2002 at 5765. 107 Commonwealth of Australia, Review of the Law of Negligence: Final Report (2002) 108 Ichard v Frangoulis [1977] 1 WLR 556 at 558; [1977] 2 All ER 461 at 462; Hoffman v Sofaer [1982] 1 WLR 1350 at 1353.

HIGH COURT OF AUSTRALIA KETTERING PTY LTD APPELLANT AND NOOSA SHIRE COUNCIL RESPONDENT Kettering Pty Ltd v Noosa Shire Council [2004] HCA 33 23 June 2004 B52/2003 and B53/2003 ORDER Matter No B52/2003 Appeal allowed with costs; The order of the Court of Appeal of Queensland dated 8 February 2002 is set aside, and in place thereof the appeal to that Court is dismissed with costs. Matter No B53/2003 Appeal allowed with costs; The order of the Court of Appeal of Queensland dated 28 June 2002 is set aside; Respondent to pay the costs of the appellant of the application to amend made to that Court. On appeal from the Supreme Court of Queensland Representation: D F Jackson QC with D R Gore QC and R S Litster for the appellant (instructed by Hopgood Ganim Lawyers) P J Lyons QC with T N Trotter for the respondent (instructed by Wakefield Sykes) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Kettering Pty Ltd v Noosa Shire Council Planning law – Compensation for alleged diminution in value of land – Appellant owned land in Noosa – Town planning scheme amended by a Development Control Plan ("DCP") – DCP constrained development potential of appellant's land thereby diminishing its market value – Appellant sought compensation from respondent pursuant to Local Government (Planning and Environment) Act 1990 (Q) ("the Act"), s 3.5(1) – Compensation not payable where land affected by a planning scheme which had the effect of prohibiting or restricting "use of land or erection or use of building or other structure thereon for a particular purpose" – Whether the Act precluded appellant's claim for compensation. Courts – Jurisdiction – Trial of one of several separate issues – Issue reserved for later determination – Appeal to Court of Appeal with respect to issue decided – Whether Court of Appeal erred in determining issue reserved for later determination. Local Government (Planning and Environment) Act 1990 (Q), ss 3.4, 3.5. McHUGH, GUMMOW, HAYNE, CALLINAN AND HEYDON JJ. These appeals raise questions as to the proper construction of the Local Government (Planning and Environment) Act 1990 (Q)1 ("the Act"), and instruments made under it giving rise to injurious affection, and, in consequence an owner's entitlement to compensation. Facts The appellant is the owner of 19.8 hectares of land on Noosa Hill in the Noosa Shire in Queensland. The land is zoned "Rural Pursuits". In that zone a dwelling house is a permitted use but land may only be subdivided as of right into lots of no less than 40 hectares. On 21 September 1991 the "Noosa Hill Development Control Plan" ("the DCP") was gazetted. The Act defines a "planning scheme" as meaning "a scheme for town planning which conforms with section 2.1 and is approved by the Governor in Council". A "planning scheme" is to consist of the various elements listed in s 2.1, including a strategic plan, zoning maps and "a development control plan (if any)". The Act defines a "development control plan" as meaning: "... a plan for the orderly growth, development or conservation of an area, that conforms with section 2.5 and is approved by the Governor in Council." Section 2.5 sets out what the DCP was required to include: a map or series of maps that indicate the intentions for the future development of designated parts or the whole of a planning scheme area; statements of the intent of the development control plan; criteria for the implementation of the plan." In force at the time. As Davies JA pointed out in the Court of Appeal2 a DCP merely indicates the intentions for the future development of the area covered by a planning scheme. It is a statement of intention, not a declaration or prescription of uses, or prohibitions or restrictions upon them. In Queensland, local authorities, of which the respondent is one, are planning authorities although they are subject to interventions, approval and directions of the responsible Minister and the Governor in Council (s 2.10 to 2.15). Section 2.16 of the Act provides for local authorities to administer planning schemes. Section 2.18 makes provision for the amendment of a Planning Scheme by the Governor in Council on the recommendation of the Minister. Section 2.18(2)(c) is the provision pursuant to which the process for the inclusion of the DCP in the scheme was undertaken by the respondent. Section 4 of the DCP divided an area of land of which the appellant's land formed part, into precincts, and located most of it within sub-precinct D of precinct 2. Application of the principles and intentions stated in the DCP to the appellant's land would significantly reduce its potential for more intensive use. After gazettal of the DCP the appellant claimed compensation in the sum of $9,300,000.00. The claim was as follows: "Kettering Pty Ltd's interest in the said premises has been injuriously affected by: the coming into force of a provision contained in the planning scheme for the Shire of Noosa; and/or a prohibition or restriction imposed by or under the planning scheme for the Shire of Noosa." Particulars of the claim were stated in this way: "Prior to the gazettal on 21 September 1991 of Development Control Plan No 1 – Noosa Hill, which is part of the Planning Scheme for the Shire of Noosa, Lot 1 on Registered Plan 136508 could reasonably have been expected to be rezoned and subdivided so as to yield 73 house lots and 2 Kettering Pty Ltd v Noosa Shire Council (2002) 120 LGERA 33 at 41 [28]. 132 building units or group title units. Because of the gazettal of the Development Control Plan, the yield is reduced to 24 house sites and 75 units." The Planning and Environment Court The claim was rejected by the respondent. The appellant appealed against that rejection to the Planning and Environment Court ("the PEC") pursuant to s 7.1 of the Act. By then the appellant had formulated alternative bases for its claim as follows: "But for the DCP, necessary approvals in order to carry out residential development of the land (including the land now in sub-precinct D) could have been obtained in a number of ways including, relevantly for compensation purposes: by obtaining town planning consent for 'group housing developments'. Such a consent would have enabled development of both attached and detached dwellings; or rezoning from the Rural Pursuits Zone to another zone where land could be subdivided into smaller allotments for dwelling houses." A judge of the PEC made an order for the trial of separate issues: "That the question whether s 3.5(4) and (5) of the Local Government (Planning and Environment) Act operates to preclude the payment of compensation to the Appellant if and to the extent to which the claim for compensation is based upon the 'second option' (as above)." The questions were tried by the PEC (Senior Judge Skoien) and answered in favour of the appellant. His Honour held that ss 3.5(4)(d) and 3.5(5) of the Act upon which the respondent relied did not foreclose "option (b)" of the appellant's claim because the DCP did not have the effect, by its operation, of relevantly prohibiting or restricting the use of the land. The Appeal to the Court of Appeal The appellant sought, and was granted leave to appeal to the Court of Appeal of Queensland3. The appeal was upheld by a Court consisting of McPherson and Davies JJA and Ambrose J4. McPherson JA regarded himself as bound by an earlier decision of the Court of Appeal, Sparke v Noosa Shire Council5, which does not appear to have been relied upon by the respondent in that Court and was not at the forefront of its submissions in this Court. McPherson JA said6: "The state of affairs that prevails here is not to my mind legally distinguishable from that considered in Sparke v Noosa Shire Council7. The respondent here is within the ambit of the exception imposed by s 3.5(4)(d) upon the right to compensation conferred by s 3.5(1) and it is not taken out of that exception by the limitation added to s 3.5(4)(d) that begins with the word 'unless …'. It remains within the exception because the respondent had to surmount not only the obstacle presented by the discretionary power of the council as the local government under s 4.5(1), but also that presented by the discretionary power of the Governor-in- Council under s 4.5(6). Because of the existence of that discretionary power of the Governor-in-Council, it is not possible, in terms of s 3.5(5), to say that before 21 September 1991 it was 'by reason only that the applicant's right depended upon the exercise of discretion by the local government in the applicant's favour' that the respondent in this case had no 'legal right' in terms of s 3.5(4)(d). The discretion of the Governor-in- Council under s 4(6) to refuse the application was another reason for saying that the respondent had no such legal right. 3 The application for leave appears to have been made and granted under s 4.1.56 of the Integrated Planning Act 1997 (Q) which repealed the Act. 4 Kettering Pty Ltd v Noosa Shire Council (2002) 120 LGERA 33. [2001] 1 Qd R 344. 6 Kettering Pty Ltd v Noosa Shire Council (2002) 120 LGERA 33 at 36 [8], [10]. [2001] 1 Qd R 344. The respondent's submission would treat s 3.5(4)(d) as creating a right to compensation that is different from and in some respects wider than the right under s 3.5(1)(a) from which it is intended to detract. That would have the extraordinary result that, as the reasons of Davies JA demonstrate, the less direct or more remote the connection between the planning scheme provision and the injurious affection suffered by the owner, the stronger his prospect of recovering compensation would become. That is to ascribe an irrational outcome to the legislation. The foundation for the respondent's claim to compensation is s 3.5(1) and the exception imposed upon it by s 3.5(4)(d) cannot create a right to compensation that rises above its source. Exceptions are by their nature limitations on and not extensions of the rules on which they operate." Davies JA was of the opinion that the structure of s 3.5(4)(d) required that a distinction be drawn between a direct and an indirect operation of a planning scheme upon the usage of land to which it applied, and that a very broad meaning should be given to the word "restricts". His Honour's reasoning appears from these passages8: "It can be seen from the paragraphs of s 3.5(4) that injurious affection which may give rise to compensation is thereby limited to affection of an interest in premises which is direct and immediate. Nowhere is this clearer than in what I have described as the exceptions to par (d): for example, one of the ways in which a planning scheme might most directly and immediately operate to prohibit or restrict the use of land would be where, before it came into force, there was a right to use the land for a particular purpose which the provision prohibited or restricted. To construe par (d), as the learned primary judge held and the respondent contends, so as to exclude payment of compensation only where a planning scheme, by its direct operation, restricts the use of land would be inconsistent with the scheme of these paragraphs in general and with the exceptions in particular. The correct construction is to the contrary. So construed par (d) applies in this case to preclude payment of compensation. The reason why the respondent's interest is affected by the coming into force of the development control plan is that that plan, by its operation, restricts the use of land. But it does not do so immediately and 8 Kettering Pty Ltd v Noosa Shire Council (2002) 120 LGERA 33 at 41 [27]-[28] (original emphasis). directly; it does so only potentially thereby reducing its value. That is because a development control plan merely indicates the intentions for the future development of designated parts or the whole of a planning scheme area. ... That this development control plan is no more than a statement of intent for the future can be seen from an examination of the plan." the reasoning and conclusions of both McPherson JA and Davies JA9. It is this decision which is the subject of the first appeal to this Court. Unfortunately however their Honours also made orders which would preclude the appellant from pursuing the alternative basis for its claim, option (a) which had not been the subject of any order by the PEC for its determination, and was not covered by any ground of appeal to, or argued in the Court of Appeal. The respondent agreed that this was so and joined the appellant in seeking the correction of the all-embracing order made by the Court of Appeal. this10: The Court of Appeal declined to correct its orders. Their Honours said "This Court identified the question before it in the same way as the learned primary judge had identified it, that is whether the provisions of s 3.5(4) and s 3.5(5) of the Local Government (Planning and Environment) Act 1990 precluded a claim for compensation for injurious affection to land which Kettering had made against the Council. No objection was taken in this Court to the way in which the learned primary judge had identified the question before him. However the notice of appeal to this Court had sought an order that: 'Sub-sections 3.5(4) and (5) of the Local Government (Planning and Environment) Act 1990 operate to preclude the payment of compensation to the Respondent if and to the extent to which the claim for compensation is based on the second option identified in a letter dated 29 August 2000 from the solicitors for the Respondent to the solicitors for the Appellant.' 9 Kettering Pty Ltd v Noosa Shire Council (2002) 120 LGERA 33 at 42 [31]-[32]. 10 Kettering Pty Ltd v Noosa Shire Council [2002] QCA 229 at [5]-[8]. One reason why this Court reached a conclusion contrary to that of the learned primary judge is that it held that s 3.5(4)(d), like the other paragraphs of s 3.5(4), excluded a right to compensation where, speaking generally, the coming into force of a provision of a planning scheme has only a remote or indirect, as opposed to a direct and immediate effect on the value of a person's interest in premises; and that the coming into force of a development control plan has only the former effect. It is true that a claim based upon the first option described in the appellant's letter of 29 August 2000 would require evidence to be heard in order to determine whether, within the meaning of s 3.5(5), the appellant had a legal right referred to in sub-s (4)(d). However even if it did have such a right, it was not one which the coming into force of a development control plan prohibited or restricted for the reason that, as this Court explained in its judgment in this appeal, a development control plan affects land only potentially because it merely indicates the intentions for the future development of designated parts or the whole of a planning scheme area. That reasoning of this Court therefore precludes argument on the so-called first option. We would therefore refuse the application to amend this Court's order. To allow such an application and alter the order made in some such way as the parties seek would, in our opinion, be to encourage pointless further litigation." It is this decision which is the subject of the second appeal to this Court. The Appeals to this Court It is necessary to set out some further relevant provisions of the Act: "3.4 Effect of new planning scheme on pre-existing applications and approvals (1) Where a Local Authority has not decided an application prior to the date (in this section called 'the prescribed date') of the coming into force of a planning scheme or an amendment thereof (in this section called the 'new planning scheme') the Local Authority, in deciding the application in accordance with the planning scheme in force at the time the application was lodged, is to give such weight as it considers appropriate to the new planning scheme." The point to be made about this section is that it contemplates, in the case of a pending application made before an amendment to a planning scheme came into operation, that the amendment may be taken into account in deciding the application to which the amendment would otherwise not apply, by the according of weight to it. The topic of compensation is the subject of s 3.5. "3.5 Compensation (1) Where a person – has an interest in premises within a planning scheme area and the interest is injuriously affected – by the coming into force of any provision contained in a planning scheme; by any prohibition or restriction imposed by the planning scheme; (4) Compensation is not payable – in respect of any building or other structure erected or work done upon, or contract made, or other act or thing done in respect of land in a planning scheme area, unless, where required by law, the erection of the building or other structure, or the doing of the work or the making of the contract, or the doing of such other act or thing was approved by the Local Authority; (b) where an interest in premises is injuriously affected by reason of any provision contained in the planning scheme, if and in so far as the same provision or a provision of the same effect was, at the date when the provision included in the planning scheme came into operation, already in force by virtue of this or some other Act or by-law of the Local Authority; (c) where an interest in premises is affected by a planning scheme which by its operation prescribes the space about buildings or other structures or limits the size of allotments or the number of buildings or other structures to be erected or prescribes the height, floor space, density, design, external appearance or character of buildings or other structures, but nothing contained in this paragraph is to limit the liability of the Local Authority to pay compensation in respect of the acquisition by it of land pursuant to its power under section 35(9) of the Local Government Act; subject to subsection (2), where an interest in premises is affected by a planning scheme which by its operation prohibits or restricts the use of land or the erection or use of a building or other structure thereon for a particular purpose, unless the applicant establishes that the applicant had a legal right immediately before the provision in question of the planning scheme came into force to use the land or erect or use a building or other structure thereon for the particular purpose which is so prohibited or restricted; in respect of anything done in contravention of a planning scheme; in respect of anything done in contravention of any interim development control provisions in force in the proposed planning scheme area or approval given under those interim development control provisions, or in contravention of any building approval granted by the Local Authority, or, as the case may be, in contravention of any decision in an appeal under such an interim development control provision or under Part 5; in respect of any affection of an interest in premises by or pursuant to a planning scheme or a by-law made by a Local Authority whereunder the subdivision of the land is prohibited or restricted. For the purposes of subsection (4)(d), it is not to be taken that an applicant did not have the legal right referred to in that subsection by reason only that the applicant's right depended upon an exercise of discretion by the Local Authority in the applicant's favour if the applicant shows that it is reasonable to expect that the exercise of discretion would have been in the applicant's favour had it been sought immediately before the relevant provision of the planning scheme came into force. The onus of proving that compensation is not payable in any case by virtue of subsection (4) is upon the Local Authority. to subsections (2)(b) and (9), Subject the following provisions are to have effect in assessing compensation in respect of a claim made under this section:- the amount of compensation is (subject to paragraphs (b), (c) and (d)) to be an amount equal to the difference between the market value of the interest immediately after the time of the coming into operation of the provision of the planning scheme by virtue of the operation whereof the claim for compensation arose and what would have been the market value of that interest if the provision had not come into operation; any modification of the injurious affection that may be effected in consonance with the planning scheme is to be taken into account; any benefit which may accrue to any land adjacent to the land in respect of which compensation is claimed in which the claimant has an interest – by reason of the coming into operation of the relevant provision or any other provision of the planning scheme; or by reason of the construction or improvement by the Local Authority at any time after the planning scheme comes into force upon the adjacent land of any work or service in pursuance of the planning scheme, is to be taken into account; (13) The claimant may appeal to the Court pursuant to section 7.1 against the decision of the Local Authority." (emphasis added) In the Court of Appeal McPherson JA applied an earlier decision of that Court11 holding that the application for compensation there failed as the appellant could not satisfy s 3.5(5) of the Act. This was so because it needed more than the consent of the Local Authority to exercise any rights of exploitation of the land that it might otherwise have but for the planning change. The respondent here relied, at most, only faintly upon that earlier decision and McPherson JA's application of it. The introductory words of s 3.5(5), "[f]or the purposes of s 3.5(4)(d) ..." make it clear that s 3.5(5) is intended to, and can only apply to cases which are otherwise within the exception for which s 3.5(4)(d) provides, and, as will appear this is not one of them. Accordingly his Honour's construction of the Act cannot be accepted. It can be seen that s 3.5.1 is expressed in expansive language. If an interest in land is injuriously affected "by any prohibition or restriction imposed by [a] planning scheme" (s 3.5.1(a)(ii)) then equally it is not easy to see how it would not be injuriously affected by the coming into force of a provision contained in a planning scheme (s 3.5.1(a)(i)). It may be that s 3.5.1(a)(ii) was enacted out of an excess of caution to ensure that injurious effects of any kind unless clearly excepted were to attract compensation. "Injuriously affected [or affecting]" is itself an expression of wide import originally used in ss 63 and 68 of the Land Clauses Consolidation Act 1845 (UK)12 and thereafter in other enactments providing for compensation for many kinds of deleterious effects on 11 Sparke v Noosa Shire Council [2001] 1 Qd R 344. 12 8 & 9 Vict c 18. the value of land left in a dispossessed owner's hands and arising out of the compulsory acquisition and use of other parts of it13. The provisions here for compensation arising out of planning changes appear to have been broadly based upon s 342AC which was added in 194514 to the Local Government Act 1919 (NSW). However, as Sugerman J emphasised in Bingham v Cumberland County Council15, the phrase "injuriously affected" had its origin in English legislation16 dealing with physical injury or disturbance of enjoyment caused by the construction of works on resumed land. His Honour noted17 that the New South Wales legislation, whilst in turn based upon more recent English legislation, the Town and Country Planning Act 1932 (UK), did not adopt the narrow terminology of its s 18. This allowed compensation only where "property is injuriously affected by the coming into operation of any provisions contained in a scheme ... being a provision ... which infringes or curtails [the claimant's] legal rights in respect of that property." Section 18 also used the expression "by its operation". The respondent submits, adopting the reasoning of the Court of Appeal, that this expression requires that the focus be upon the substantial or "direct" effect of a planning scheme, rather than its "indirect" effect. It can also be seen that s 3.5 uses different expressions to cover what would appear to be the same event: the gazettal in, and therefore the occasion for the commencement of the legal enforceability of a planning scheme, or an amendment to it. Those expressions are: "by the coming into force …" (s 3.5.1(a)(i)); "… imposed by the planning scheme" (s 3.5.1(a)(ii)); "came into operation" (s 3.5.4(b)); "by its operation" (ss 3.5.4(c) and 3.5.4(d)); "coming into operation" (ss 3.5.8(a) and 3.5.8(c)(i)); and "comes into force" (s 3.5.8(c)(ii)). It is not possible to attach any particular significance to the use of the different 13 For example: Land Acquisition Act 1989 (Cth); Land Acquisition (Just Terms Compensation) Act 1991 (NSW); Acquisition of Land Act 1967 (Q). 14 By s 3 of the Local Government (Town and Country Planning) Amendment Act 1945 (NSW). 15 (1954) 20 LGR 1 at 8. 16 Land Clauses Consolidation Act 1845 (UK); considered in Metropolitan Board of Works v McCarthy (1874) LR 7 HL 243. 17 (1954) 20 LGR 1 at 9. expressions. They appear to be the result of inattention to the desirability of consistency of use to cover the same or similar concepts. In each case, however the expression has a temporal connotation and appears to be intended to identify a time or event, and not to point to a distinction between an indirect or direct effect of a change in a planning scheme. The DCP had no prohibitory effect upon the appellant's use of the land. Its effect, although no doubt significantly so, was no more than influential. The respondent submits however that this means that its effect was at least restrictive, and therefore that it falls within the alternative limb of the exception contained in s 3.5.4(d), as a provision of a planning scheme which, by its operation, restricts the use of land. In our opinion "restricts" should not be read in this way in s 3.5(4)(d). To give the word "restricts" such a meaning as, "restricted by influencing" or "by having a strong bearing upon" would be to give it a strained and artificial meaning, and one not compelled, either by the context of its use as held by the Court of Appeal18, or by any extraordinary consequences otherwise. Section 3.5(4) does not expressly or by implication confine compensation to affection which is direct and immediate. The meaning of s 3.5(1)(a)(i) is not to be construed as the Court of Appeal did, by reference almost exclusively, to the exceptions to it. The appropriate approach is to identify the extent to which the very expansive right to compensation which it confers, is reduced by the subsequent exceptions for which s 3.5(4) provides. Section 3.5(4)(a) is concerned with buildings, structures, contracts, and other acts done in respect of land which may only be done with the approval of the Local Authority when such an approval has not been obtained. Section 3.5(4)(b) is designed to ensure that compensation is available only if there has truly been a relevant change in the law affecting the use of the land. Section 3.5(4)(c) is applicable to planning schemes affecting the size of allotments and features peculiar to buildings, so- called "good neighbour" provisions19. Section 3.5(4)(e), not surprisingly, excludes compensation in respect of contravening uses. Section 3.5(4)(g) denies compensation in the case of an affection, again by way of a prohibition or 18 See also TM Burke Estates Pty Ltd v Noosa Shire Council [1998] 2 Qd R 448 at 451 where the same approach was adopted by the Court of Appeal (Davies JA, 19 See Fogg, Land Development Law in Queensland, (1987) at 713. restriction. It can be seen that each exception is quite specific, and not, as the Court of Appeal held, confined to instances of remote or indirect effects on value, expressions nowhere used in the Act. The Court of Appeal was of the opinion that acceptance of the construction urged by the appellant would produce an anomalous, indeed extraordinary result that an injurious affection by way of a prohibition or restriction upon use would not attract compensation, whereas such an affection by way of an indirect and only influential change would. But this is to overlook the particularity and limited nature of the subject matter with which s 3.5(4)(d) is concerned: the prohibition on the use of land, or the restriction on use of buildings or other structures, for particular purposes. The effect of the DCP here is upon the potential of the land for subdivision, and greater intensity of use, and not of use for a particular purpose. It should be pointed out that this is a different construction of s 3.5(4) from the one placed upon it by the Court of Appeal in TM Burke Estates Pty Ltd v Noosa Shire Council20 in which it was unnecessary to construe the section for the purposes of the decision. There is nothing in the language of s 3.5 which requires that a distinction be drawn between direct and indirect effects. To do so is to introduce concepts themselves imprecise and removed from the words actually used. Injurious affection by the taking and use of part of a landholding, and injurious affection occasioned by a planning change have in common the impairment or displacement of a private interest by a public one. This feature has led, in cases of the former, to judicial pronouncements favouring dispossessed landowners, of which the following, by Gaudron J21, is a recent example: "The right to compensation for injurious affection following upon the resumption of land is an important right of that kind and statutory provisions conferring such a right should be construed with all the generality that their words permit. Certainly, such provisions should not be construed on the basis that the right to compensation is subject to 20 [1998] 2 Qd R 448 at 451. 21 Marshall v Director General, Department of Transport (2001) 205 CLR 603 at 623 limitations or qualifications which are not found in the terms of the statute." To resolve this appeal it is not necessary to resort to pronouncements of that kind22, nor to the fact that the Act, by s 3.5(8)(c) imports another concept from the law relating to compulsory acquisitions of land, of a reduction in compensation on account of any enhancement in value of the remaining portions by reason of the use to which the acquired land is to be put. Nor is it necessary to have regard to cases in which it has been held that exceptions in statutes are generally to be strictly construed23 or to the principles relating to exceptions in deeds of which this was said as early as 1790 by Lord Kenyon in Bowring v Elmslie24: "... To let the exception control the instrument as far as the words of it extend, and no further, and then upon the case being taken out of the letter of the exception, the body of the instrument operates in full force." That the Act by s 3.5 imposes the onus upon the respondent of demonstrating that the case falls within an exception is not however irrelevant. It provides an indication at least, that in a case of doubt an approach similar to that adopted by Gaudron J in Marshall v Director General, Department of Transport25 is to be preferred. The respondent has not satisfied the onus that lies upon it here. It may well be that the language of s 3.5 does not, except perhaps for the "good neighbour" provisions, which may give rise to reciprocity of benefit and obligation, disclose the policy underlying the legislative selection of the cases for 22 See also: Commissioner of Succession Duties (SA) v Executor Trustee and Agency Co of South Australia Ltd (1947) 74 CLR 358 at 373 per Dixon J; Gregory v Federal Commissioner of Taxation (1971) 123 CLR 547 at 565 per Gibbs J; Tawharanui Farm Ltd v Auckland Regional Authority [1976] 2 NZLR 230 at 234 per Wild CJ, Mr Cooke and Mr Maclachlan; Robinson & Co v Collector of Land Revenue, Singapore [1980] 1 WLR 1614 at 1621 per the House of Lords. 23 As to the principles relating to exceptions in deeds, see: Verdouw v City of Unley (2000) 111 LGERA 357 at 362 [19] per Bleby J; McBaron v Roads & Traffic Authority of New South Wales (1995) 87 LGERA 238 at 244-245 per Talbot J. 24 As quoted in Burnett v Kensington (1797) 7 TR 210 at 214n [101 ER 937 at 939]. 25 (2001) 205 CLR 603 at 623 [38]; and see 634 [67] per Hayne J. the exclusion of compensation. There is no doubt that a restructuring and rewording of the relevant provisions to ensure consistency of expression when consistency of application is intended would be useful. The respondent argued that a purposive construction produced the result for which it contended. This is not so. It can provide no explanation why some, but not other, instances of affection should be regarded by the legislature as suitable for exclusion from the otherwise very broad entitlement to compensation which s 3.5(1) contemplates. The appellant's first appeal must be upheld. For the same reasons the second appeal should also succeed. It is therefore unnecessary to consider the implications of the decision of the Court of Appeal to dispose of the whole of the appellant's claim although part of it had not been in issue at first instance or on appeal. As to costs, the respondent may have rights under the Appeal Costs Fund Act 1973 (Q), but that is not a matter for this Court to decide. The orders of the Court should be: The appeal in Kettering v Noosa Shire Council (Matter No B52/2003) is allowed with costs. The order of the Court of Appeal dated 8 February 2002 is set aside, and in place thereof the appeal to the Court of Appeal is dismissed with costs. The appeal in Kettering v Noosa Shire Council (Matter No B53/2003) is allowed with costs. The order of the Court of Appeal dated 28 June 2002 is set aside and the respondent in this Court is to pay the costs of the appellant of the application to amend made to the Court of Appeal. The allowing of the first appeal to that Court and the substitution made for the order of the Court of Appeal dated 8 February 2002 make it unnecessary to make any further consequential orders in the second appeal respecting the application to amend.

HIGH COURT OF AUSTRALIA APPELLANT AND BOYLAN NOMINEES PTY LIMITED T/AS QUIRKS REFRIGERATION RESPONDENT Sweeney v Boylan Nominees Pty Limited [2006] HCA 19 16 May 2006 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of New South Wales Representation: D F Jackson QC with M J Ward for the appellant (instructed by McLachlan Chilton Solicitors) J E Maconachie QC with N E Chen for the respondent (instructed by Holman Webb) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Sweeney v Boylan Nominees Pty Limited Negligence – Vicarious liability – Respondent engaged a repairer to perform maintenance on refrigerator installed at a petrol station – Respondent obliged under lease agreement with third party to service and maintain refrigerator – Refrigerator door negligently repaired – Appellant struck and injured by insecurely fastened door. Employer and employee – Independent contractor – Whether relationship between the respondent and repairer that of employment or independent contract – Repairer performed work for the respondent on a regular basis – Repairer performed work at the respondent's request and direction – Repairer frequently attended the respondent's premises to obtain parts with which to effect repairs – Repairer had no formal or written contract with the respondent – Repairer did not wear shirt bearing the respondent's insignia which the respondent required its employees to wear – Repairer did not receive wages or superannuation contributions from the respondent – Repairer had secured his own insurance policy for liability which he may incur in the course of his work. Negligence – Vicarious liability – Whether respondent vicariously liable for the negligence of the repairer on the basis that the repairer was a "representative" of the respondent – Respondent provided the repairer with invoices bearing the respondent's name for the repairer to give to customers upon completion of work – Invoices described the repairer as the respondent's mechanic – Repairer authorised to receive payments from customers on behalf of the respondent – Whether the principles in Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia Ltd (1931) 46 CLR 41 apply. Negligence – Vicarious liability – Legal policy – Whether increasing reliance on independent contractors rather than employees relevant – Whether independent contractors taking out policies of insurance relevant – Whether vicarious liability on the basis of representation might encourage defendants to disclose the nature of commercial relationships with independent contractors in advance of trial. Evidence – Failure of the respondent to disclose until trial the nature of the commercial relationship which he had with the repairer – Administration of justice. Words and phrases – "vicarious liability", "representative", "representation", "agent", "principal", "employee", "independent contractor". GLEESON CJ, GUMMOW, HAYNE, HEYDON AND CRENNAN JJ. In August 2000 the appellant went to buy a carton of milk at a service station and convenience store near where she lived. When she opened the door of the refrigerator in which the milk was kept, the door came off and hit her on the head. She suffered injury to her head, neck and hand. The appellant commenced an action in the District Court of New South Wales claiming damages for negligence. She sued those whom she alleged were the owners and operators of the service station and convenience store, and the present respondent. She alleged that the present respondent "maintained ... or distributed" the refrigerator. At trial, the claim against those who were alleged to be the owners and operators failed; the claim against the respondent succeeded. It was held that the respondent was vicariously liable for the negligence of a mechanic it had sent to service the refrigerator in response to the service station's complaint that the door of the refrigerator was not closing properly. The owners and occupiers were found to have done all that they could reasonably be expected to have done in the circumstances and thus not negligent. Judgment was entered in the District Court for the appellant against the respondent for $43,932 and costs. The issue of the respondent's vicarious liability for the mechanic was an important issue at trial. Neither the mechanic, nor the company through which he may have conducted his business, was a party to the proceedings. On the appellant's case against the respondent, she would have succeeded in an action against the mechanic. Why the mechanic and his company were not parties does not emerge with any clarity from the material before this Court. There seems every reason to think, however, that the mechanic's identity, and the fact that the respondent asserted that he was an independent contractor, were matters that were known, or at least readily ascertainable, before the trial began. The facts found at trial can be stated shortly. The respondent had leased the refrigerator to Australian Co-operative Foods Ltd. The lease obliged the respondent to service and maintain the refrigerator in a proper and workmanlike manner and to replace any part which required replacement due to the normal operation of the refrigerator. The evidence led at trial did not reveal what arrangements Australian Co-operative Foods Ltd had made with the owners and operators of the service station and convenience store that led to the refrigerator being installed in their premises. Nothing was then, or is now, said to turn on this. About four or five hours before the appellant's accident, those operating the service station had told the respondent that the door of the refrigerator was Crennan not closing properly. A mechanic came to the premises, tightened the screws in the hinges and, having demonstrated to the manager of the service station that the door was working correctly, left the premises. The trial judge may be understood as finding that the mechanic did not act with reasonable care. The mechanic was not an employee of the respondent. He was described, in evidence at trial, as a contractor to the respondent. It was said that he performed duties at the respondent's request, when he was asked, and that he then "invoiced [the respondent] accordingly for the hours that he performed, and spare parts". The respondent provided him with no uniform, no tools or equipment and no vehicle in which to transport tools and equipment. The mechanic's van was marked with a name derived from the name of a company of which he was a director. The trial judge held that the respondent was vicariously liable for the mechanic's negligence. He concluded that the mechanic "was acting as a servant or agent of [the respondent] with the authority and the approval of [the respondent] to undertake the work that he did". Two documents loomed large in the trial judge's consideration of the question of vicarious liability. First, the mechanic had given a written service report to the service station operators and to the respondent. The report was written on the respondent's form. Among other things, that form referred to "our mechanic". Secondly, the respondent in its claim report to its personal and public liability insurer again referred to "our mechanic" as having gone to the premises, and said nothing about the mechanic not being an employee. Although some emphasis was given to these documents in the argument of the appeal to this Court, the better view is that the references to "our mechanic" said nothing about whether he was an employee of the respondent or its contractor. The most that can be gleaned from these references is that the mechanic did what he did for or on behalf of the respondent. Until she made her claim, the appellant knew nothing of any repair being effected to the refrigerator immediately before her accident. She knew nothing about any of the arrangements that underpinned the repair being made, or the arrangements concerning the refrigerator's lease, or its use on the premises. Until she made her claim, all that the appellant knew about the refrigerator, or its repair, was that its door had come off and struck her. Crennan On appeal to the Court of Appeal of New South Wales the judgment in favour of the appellant was set aside and in its place judgment was entered for the respondent. That Court (Giles and Ipp JJA, Brownie AJA) held1 that Boylan (the respondent in this Court) was not vicariously liable for the negligence of the mechanic. By special leave the appellant now appeals to this Court. The appeal should be dismissed. The respondent was not vicariously liable for the negligence of the mechanic. Three recent decisions of this Court have examined questions of vicarious liability: Scott v Davis2, Hollis v Vabu Pty Ltd3 and New South Wales v Lepore4. It is unnecessary to rehearse all that is established by those decisions. It is important, however, to begin examination of the issues in this appeal from a frank recognition of some considerations that are reflected in those decisions. First, "[a] fully satisfactory rationale for the imposition of vicarious liability in the employment relationship has been slow to appear in the case law"5. Secondly, "the modern doctrine respecting the liability of an employer for the torts of an employee was adopted not by way of an exercise in analytical jurisprudence but as a matter of policy"6. That may suggest that the policy to which effect was given by "the modern doctrine" is clearly identified, but, as is implicit in the first proposition, the policy which is said to lie behind the development of the modern doctrine is not and has not been fully articulated. Thirdly, although important aspects of the law relating to vicarious liability are often traced to the judgment of Parke B in Quarman v Burnett7, neither in that 1 Boylan Nominees Pty Ltd t/as Quirks Refrigeration v Sweeney [2005] Aust Torts Reports ¶81-780. (2000) 204 CLR 333. (2001) 207 CLR 21. (2003) 212 CLR 511. 5 Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at 37 [35]. 6 Hollis (2001) 207 CLR 21 at 37 [34]; Darling Island Stevedoring and Lighterage Co Ltd v Long (1957) 97 CLR 36 at 56-57; New South Wales v Lepore (2003) 212 CLR 511 at 580 [196]. (1840) 6 M & W 499 [151 ER 509]. See also Laugher v Pointer (1826) 5 B & C Crennan decision, nor in other early decisions to which the development of the doctrine of vicarious liability may be traced, does there emerge any clear or stable principle which may be understood as underpinning the development of this area of the law. Indeed, as is demonstrated in Scott8, the development of the law in this area has not always proceeded on a correct understanding of the basis of earlier decisions. Nonetheless, as the decisions in Scott, Hollis and Lepore show, there are some basic propositions that can be identified as central to this body of law. For present purposes, there are two to which it will be necessary to give principal attention. First, there is the distinction between employees (for whose conduct the employer will generally be vicariously liable) and independent contractors (for whose conduct the person engaging the contractor will generally not be vicariously liable). Secondly, there is the importance which is attached to the course of employment. Whether, as has recently been suggested9, these, or other, considerations would yield a compelling and unifying justification for the doctrine of vicarious liability need not be decided in this matter. In particular, whether, as suggested10, the justification for the doctrine of vicarious liability is found in an employer's promise in the contract of employment to indemnify the employee for legal liability suffered by the employee in the conduct of the employer's business is a large question which is better examined in the light of full argument. Whatever may be the justification for the doctrine, it is necessary always to recall that much more often than not, questions of vicarious liability fall to be considered in a context where one person has engaged another (for whose conduct the first is said to be vicariously liable) to do something that is of advantage to, and for the purposes of, that first person. Yet it is clear that the bare fact that the second person's actions were intended to benefit the first or were undertaken to advance some purpose of the first person does not suffice to demonstrate that the first is vicariously liable for the conduct of the second. The whole of the law that has developed on the distinction between employees and independent contractors denies that benefit or advantage to the one will suffice to (2000) 204 CLR 333 at 386-408 [162]-[226]. 9 Neyers, "A Theory of Vicarious Liability", (2005) 43 Alberta Law Review 287. 10 Neyers, "A Theory of Vicarious Liability", (2005) 43 Alberta Law Review 287 at Crennan establish vicarious liability for the conduct of the second. But there is an important, albeit distracting, consequence that follows from the observation that the first person seeks to gain benefit or advantage from engaging the second to perform a task. It is that the relationship is one which invites the application of terms like "representative", "delegate" or "agent". The use of those or other similar expressions must not be permitted to obscure the need to examine what exactly are the relationships between the various actors. In the present case, the appellant's contention that the respondent was vicariously liable for the negligence of the mechanic fastened upon a number of statements found in the reasons for judgment of Dixon J in Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia Ltd11. It was submitted that those statements supported the conclusion that the mechanic did the work he did "as a representative" of the respondent. He was a "representative", so the appellant submitted, because the mechanic "represented" that he had an association with the respondent, and the respondent "represented" that same association. It was not said that these representations of association had in any way been relied on by the appellant. She knew nothing of these matters until after her accident. The "representing" was said to be constituted by what passed between the respondent and the service station operators before and at the time of the attempted repairing of the door. At once it can be seen that "representative" and "represented" are used with radically different meanings when it is said that the mechanic was the respondent's "representative" because of what he and respondent "represented". "Representative" is used to denote a relationship in which one person (here, the mechanic) stood in the shoes of, or acted on behalf of, another (here, the respondent). By contrast, "represented" is used to denote the conveying of information or the inducing of a belief in another. the The point to be made is more than linguistic. What is revealed is that like "agent", the word "representative" and its cognate forms are used in many different senses. It is necessary to distinguish between the different meanings. Saying that B did what he or she did as the "representative" of A does not reveal, without definition of what is meant, what was the relationship between the parties. 11 (1931) 46 CLR 41. Crennan In Colonial Mutual Life, Dixon J said12: "Some of the difficulties of the subject arise from the many senses in which the word 'agent' is employed. 'No word is more commonly and constantly abused than the word "agent". A person may be spoken of as an "agent" and no doubt in the popular sense of the word may properly be said to be an "agent", although when it is attempted to suggest that he is an "agent" under such circumstances as create the legal obligations attaching to agency that use of the word is only misleading' (per Lord Herschell in Kennedy v De Trafford13). Unfortunately, too, the expressions 'for,' 'on behalf of,' 'for the benefit of' and even 'authorize' are often used in relation to services which, although done for the advantage of a person who requests them, involve no representation." In Colonial Mutual Life the person, for whose statements the appellant was sought to be made vicariously liable, had been engaged by the appellant to canvass for proposals for life insurance. The statements which it was alleged that he made, and which were slanderous of the respondent company, had been uttered in the course of his attempting to induce persons to make proposals for life insurance by the appellant. He was not a servant of the appellant company. Yet it was held that the appellant was vicariously liable for his statements because he made them in acting as the company's agent. In soliciting proposals, the person who made the slanderous statements was acting in right of the company and with its authority. He had express authority to canvass for the making of contractual offers to his principal. Although he had no authority from his principal to accept any offers that were made, "the Company in confiding to his judgment, within the limits of relevance and of reasonableness, the choice of inducements and arguments, authorized him on its behalf to address to prospective proponents such observations as appeared to him appropriate"14. "[T]he very service to be performed consist[ed] in standing in [the principal's] place and assuming to act in [its] right and not in an independent capacity"15 (emphasis added) in a transaction with others. He acted 12 (1931) 46 CLR 41 at 50. 13 [1897] AC 180 at 188. 14 (1931) 46 CLR 41 at 50 per Dixon J. 15 (1931) 46 CLR 41 at 48-49 per Dixon J. Crennan in right of the principal, and not in an independent capacity, because he acted in execution of his authority to canvass for offers to contract with his principal. In Colonial Mutual Life16, Dixon J said that the rule imposing liability upon a master for the wrongs of a servant committed in the course of employment was (then)17 commonly regarded as part of the law of agency. And as earlier noted, Dixon J emphasised the difficulties that attend the use of the word "agent". Rather than being used with a single and fixed meaning, the writings of Oliver Wendell Holmes Jnr, referred to by Dixon J in Colonial Mutual Life18, show that words like "agent", "representative", "for", "on behalf of", are often used in this context as statements of conclusion that mark the limits to which vicarious liability is extended19. But when used in that way, they are statements of conclusion that do not necessarily proceed from an articulated underlying principle that identifies why there should be vicarious liability in one case but not another. Rather, the conclusions that have been reached about the ambit of vicarious liability may best be understood as ultimately influenced by, even derived from, medieval notions of headship of a household20 which in turn law. depended upon Responsibility for the acts of a servant is, as Holmes said21: the application of analogies drawn from Roman "easily explained, if we remember, that it originated when a servant was a slave, whom the master was obliged to keep in order as he was his cattle, and it is then manifest why it should be otherwise if he employed an independent contractor; for the latter corresponds to a free man in ancient 16 (1931) 46 CLR 41 at 49. 17 See now, however, Scott v Davis (2000) 204 CLR 333 at 413 [239]. 18 (1931) 46 CLR 41 at 49. 19 Holmes, The Common Law, (1881) at 230-232; Holmes, Collected Legal Papers, (1921), "Agency" at 102-104. 20 Scott v Davis (2000) 204 CLR 333 at 409-410 [230]; Hollis (2001) 207 CLR 21 at 21 "The Arrangements of the Law – Privity", (1872) 7 American Law Review 46 at 62. Crennan Rome, who had a separate legal existence, and was, therefore, responsible in propria persona". But there is a further consequence of recognising the servile status of those for whom the master is to be held responsible as a basis for the initial development of much of this branch of the law. This further consequence is that the law has so far departed from its root that "it is as hopeless to reconcile the differences [between tradition and the instinct for justice] by logic as to square the circle"22. That is, as Holmes continued23, "there is no adequate and complete explanation of the modern law, except by the survival in practice of rules which lost their true meaning when the objects of them ceased to be slaves". Colonial Mutual Life must be understood against the background of the development of this area of law by the assertion and application of conclusions whose ultimate roots are found in analogies which are no longer apt (if they ever were). But whatever may now be seen to be the imperfections in the ultimate roots of this area of the law, the conclusion reached in Colonial Mutual Life fits entirely within the explanation of vicarious liability identified by Pollock24 and reflected in the subsequent decisions of this Court culminating in Scott, Hollis and Lepore. Colonial Mutual Life establishes that if an independent contractor is engaged to solicit the bringing about of legal relations between the principal who engages the contractor and third parties, the principal will be held liable for slanders uttered to persuade the third party to make an agreement with the principal. It is a conclusion that depends directly upon the identification of the independent contractor as the principal's agent (properly so called) and the recognition that the conduct of which complaint is made was conduct undertaken in the course of, and for the purpose of, executing that agency. Pollock identified the element common to cases of vicarious liability as being that "a man has for his own convenience brought about or maintained some state of things which in the ordinary course of nature may work mischief to his neighbours"25. Pollock further concluded that where an employer conducted a 22 Holmes, The Common Law at 231. 23 The Common Law at 232. 24 Pollock, Essays in Jurisprudence and Ethics, (1882) at 122. 25 See Lepore (2003) 212 CLR 511 at 582 [202] per Gummow and Hayne JJ. Crennan business, and for that purpose employed staff, the employer brought about a state of things in which, if care was not taken, mischief would be done. But the liability to be imposed on the employer was liability for the way in which the business (that is, the employer's business) was conducted. Conduct of the business and the employee's actions in the course of employment in that business were the only state of things which the employer created and for which the employer would be responsible. Thus for Pollock26, course of employment was not a limitation or an otherwise more general liability of the employer; it was a necessary element of the definition of the extent of liability. The conclusion reached in Colonial Mutual Life, that the party engaging an agent (albeit as an independent contractor) to solicit for the creation of legal relationships between that party and others is liable for the slanders uttered in the course of soliciting proposals, stands wholly within the bounds of the explanations proffered by Pollock for the liability of a master for the tortious acts of a servant. It stands within those bounds because of the closeness of the connection between the principal's business and the conduct of the independent contractor for which it is sought to make the principal liable. The relevant connection is established by the combination of the engagement of the contractor as the agent of the principal to bring about legal relations between the principal and third parties, and the slander being uttered in the course of attempting to induce a third party to enter legal relations with the principal. Now it may also well be that, as pointed out in Lepore27, cases of the deliberate misdoings of a servant, like Lloyd v Grace, Smith & Co28, are also to be understood as informed by notions of course of employment. It is not necessary to explore that question further here, beyond noting that, as was also pointed out in Lepore29, such cases may yield to simpler analysis revealing the employer's direct rather than vicarious liability for what has occurred. But the wider proposition that underpinned the argument of the appellant in this case, that if A "represents" B, B is vicariously liable for the conduct of A, is a proposition of such generality that it goes well beyond the bounds set by 26 Essays in Jurisprudence and Ethics at 126. 27 (2003) 212 CLR 511 at 593 [235] per Gummow and Hayne JJ. 29 (2003) 212 CLR 511 at 593 [235]-[237] per Gummow and Hayne JJ. Crennan notions of control (with old, and now imperfect analogies of servitude) or set by notions of course of employment. These bounds should not now be redrawn in the manner asserted by the appellant. Hitherto the distinction between independent contractors and employees has been critical to the definition of the ambit of vicarious liability. The view, sometimes expressed30, that the distinction should be abandoned in favour of a wider principle, has not commanded the assent of a majority of this Court. In Scott, the majority of the Court31 rejected the contention that the owner of an aircraft was vicariously liable for the negligence of the pilot of that aircraft if the pilot operated the aircraft with the owner's consent and for a purpose in which the owner had some concern. The argument that "a new species of actor, one who is not an employee, nor an independent contractor, but an 'agent' in a non-technical sense"32 should be identified as relevant to determining vicarious liability, was rejected. In Hollis33, the Court amplified the application of the distinction between independent contractors and employees to take account of differing ways in which some particular enterprises are now conducted. As was said in the joint reasons34: "In general, under contemporary Australian conditions, the conduct by the defendant of an enterprise in which persons are identified as representing that enterprise should carry an obligation to third persons to bear the cost of injury or damage to them which may fairly be said to be characteristic of the conduct of that enterprise." 30 Scott (2000) 204 CLR 333 at 370 [110] per McHugh J; Hollis (2001) 207 CLR 21 at 57-58 [93] per McHugh J. 31 (2000) 204 CLR 333 at 342 [18], 343 [20] per Gleeson CJ, 422-424 [268]-[273] per Gummow J, 440 [311] per Hayne J, 459-460 [357]-[358] per Callinan J. 32 Scott (2000) 204 CLR 333 at 423 [269] per Gummow J. 33 (2001) 207 CLR 21. 34 (2001) 207 CLR 21 at 40 [42]. Crennan But neither in Scott nor in Hollis, nor earlier in Colonial Mutual Life, was there established the principle that A is vicariously liable for the conduct of B if B "represents" A (in the sense of B acting for the benefit or advantage of A). On the contrary, Scott rejected contentions that, at their roots, were no different from those advanced in this case under the rubric of "representation" rather than, as in Scott, under the rubric "agency". As was said in Scott of the word "agent"35, to use the word "representative" is to begin but not to end the inquiry. It is as well to add something further about Hollis. Hollis hinged about whether the person whose conduct was negligent was to be identified as an employee of the principal. Seven considerations were identified in the facts of that case36 as bearing upon the question. They included that the courier wore the principal's livery, that he was subject to close direction by the principal about not only the manner of performing the work (work which required only limited skills), but also both the financial dealings generated by the work and the times at which the work was done. The circumstances of the present case are very different. The mechanic was not an employee of the respondent. He conducted his own business37. It may be that it could be inferred that he did that through, and as an employee of, the company whose name provided the name advertised on his vehicle. But this was not a matter to which close attention was given in evidence at trial and it is not necessary to pursue it to its conclusion. That the mechanic was engaged in a business other than that of the respondent was demonstrated by a number of circumstances but chief among them were his invoicing the respondent for each job he did and the respondent's concern to verify that the mechanic had proper workers' compensation and public liability insurance. The interposition of the mechanic's company would, of course, give further support to the conclusion that he was engaged in a business other than that of the respondent. The mechanic or, if it were the case, his company, was engaged from time to time as a contractor to perform maintenance work for the respondent. Unlike the principal in Hollis38, the respondent did not control the way in which the 35 (2000) 204 CLR 333 at 423 [268]. 36 (2001) 207 CLR 21 at 42-45 [48]-[57]. 37 cf Hollis (2001) 207 CLR 21 at 42 [48]. 38 (2001) 207 CLR 21 at 42 [49]. Crennan mechanic worked. The mechanic supplied his own tools and equipment39, as well as bringing his skills to bear upon the work that was to be done. And unlike the case in Hollis40, the mechanic was not presented to the public as an emanation of the respondent. The two documents to which the trial judge, as mentioned earlier, attached great weight neither require nor support the conclusion that he was. Neither says anything of the nature of the relationship between the mechanic and the respondent beyond the fact that the mechanic was acting at the request of the respondent. As previously stated, that presents the question to be answered in this case, it does not answer it. Whatever may be the logical and doctrinal imperfections and difficulties in the origins of the law relating to vicarious liability, the two central conceptions of distinguishing between independent contractors and employees and attaching determinative significance to course of employment are now too deeply rooted to be pulled out. And without discarding at least the first and perhaps even the second, the appellant's claim against the respondent must fail. The mechanic was an independent contractor. He did what he did for the benefit of the respondent and in attempted discharge of its contractual obligations. But he did what he did not as an employee of the respondent but as a principal pursuing his own business or as an employee of his own company pursuing its business41. The conclusion that the mechanic was an independent contractor is determinative of the issue that arises in the appeal. The appeal must be dismissed with costs. 39 cf Hollis (2001) 207 CLR 21 at 44 [56]. 40 (2001) 207 CLR 21 at 42 [50]. 41 Colonial Mutual Life (1931) 46 CLR 41 at 48. Kirby KIRBY J. This appeal, from a judgment of the New South Wales Court of Appeal42, concerns the law of vicarious liability. By that law, one person is rendered legally liable for the wrongs of another by virtue of a relationship with the other regardless of whether that person is personally at fault43. In a number of recent decisions, members of this Court have acknowledged that no single explanation can be offered, "completely satisfactory for all cases"44, for the imposition of vicarious liability. In so concluding this Court has repeated what scholars have long said. Thus, Professor Fleming observed that vicarious liability should be "frankly recognised as having its basis in a combination of policy considerations"45. In deriving the answers to the issues in this case, the duty of this Court is to apply the applicable legal doctrine, as expressed in the cases. In doing so, it must keep in mind the changing social conditions that affect economic activities of employment, or quasi-employment, in contemporary Australia46. A legal notion that began in Roman law, in concepts of responsibility for the actions of slaves and animals47, which is still replete with the language of servitude and talk of "servants" and "masters", and which has only lately accepted the language of "employment", is obviously in need of more than verbal repair and re-expression. But here no change in the law is necessary to sustain the appeal; merely its 42 Boylan Nominees Pty Ltd v Sweeney [2005] Aust Torts Rep ¶81-780 per Ipp JA (Giles JA and Brownie AJA concurring). 43 Queensland Law Reform Commission, Vicarious Liability, Report No 56, (2001) 44 See, eg, Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at 38 [35]; New South Wales v Lepore (2003) 212 CLR 511 at 611 [299]. See also Darling Island Stevedoring and Lighterage Co Ltd v Long (1957) 97 CLR 36 at 56-57. 45 Fleming, The Law of Torts, 9th ed (1998) at 410 referring to Atiyah, Vicarious Liability in the Law of Torts, (1967) ch 2 ("Atiyah"); Laski, "Basis of Vicarious Liability", (1916) 26 Yale Law Journal 105; Douglas, "Vicarious Liability", (1929) 38 Yale Law Journal 584; Flannigan, "Enterprise Control: The servant- independent contractor distinction", (1987) 37 University of Toronto Law Journal 25. See also Prosser and Keaton, Prosser and Keaton on the law of torts, 5th ed 46 Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 29 per Mason J; cf Hollis (2001) 207 CLR 21 at 53-54 [84]-[85]. 47 Reasons of Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ at [20] ("the joint reasons"). Kirby application. This is not an occasion to take the law back to the concededly imperfect analogies of servitude48. But it is important to apply the established category of vicarious liability to which the appellant appealed. Now is not the time to reverse recognition of the fact that, in specified circumstances, a principal is liable for the acts done by its "representative" in the world at large. When this approach is adopted, the outcome of the present appeal is that the person who caused the damage to the injured party was not an employee of the defendant. However, that person was the representative agent of the party sued, performing that party's functions and advancing its economic interests, effectively as part of its enterprise. Although an independent contractor, the wrong-doer carried out his activities "representing the person who requests its performance in a transaction with others, so that the very service to be performed consists in standing in [its] place and assuming to act in [its] right and not in an independent capacity"49. Vicarious liability in the other party is thus established. The result is that the primary judge in this case was correct in his orders50. The Court of Appeal erred in disturbing them51. The appeal succeeds. The judgment at trial should be restored. The facts Circumstances of the incident: Mrs Maria Sweeney ("the appellant") was injured on 2 August 2000 when a refrigerator door in the shop of a service station in Pymble, a Sydney suburb, fell off its hinge and hit her on the head. The incident was recorded by a video camera. It happened at about 4 pm. Earlier in the day, a defect or hazard of the door had been reported by the proprietors of the service station ("the Patels") to Boylan Nominees Pty Limited trading as Quirks Refrigeration ("the respondent"). Boylan owned the refrigerator. It leased it to Australian Co-operative Foods Limited who placed it in the service station shop pursuant to a further lease. Under the "Master 48 Joint reasons at [26]. 49 Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia Ltd (1931) 46 CLR 41 at 48-49 per Dixon J ("CML"). 50 Maria Sweeney v Narendra Patel and Ors, unreported, District Court of New South Wales, 12 March 2004 (No 1350/02) ("reasons of the primary judge"). 51 Such a claim, with specific reliance on CML, was raised by the appellant expressly before the Court of Appeal by a notice of contention. It was decided against the appellant: see [2005] Aust Torts Rep ¶81-780 at 67,219-67,223 [64]-[85]. Kirby Operating Lease Agreement", Boylan agreed to service and maintain the refrigerator "in a proper and workmanlike manner". Pursuant to the Patels' notification, Mr Nick Comninos arrived at the service station at about 2.30 pm. He partly dismantled the door of the refrigerator. He purported to effect a repair and to test the door, demonstrating the apparent absence of defect to the Patels' attendant52. As found, the defect that had originally occasioned the Patels' report to Boylan was not in fact repaired. The primary judge decided that Mr Comninos had failed to fix it. He concluded that this constituted negligence on Mr Comninos's part and that such negligence was the cause of Mrs Sweeney's injuries53. The worksheet or invoice for this inadequate repair was tendered in evidence. It appears under a prominent heading "Quirks Refrigeration". Below this title, in small type, appears the statement "A Division of Boylan Nominees Pty Ltd". The document reports the service effected by the mechanic ("Repaired door & tested left running well."). It records the date and time of the service call. The printed form then provides: This authorises you to service my/our refrigerator and I/we agree to pay cash for work done and material used. I/we hereby instruct your mechanic to work overtime for which I/we agree to pay the rates set out … (Cross out if not applicable). Any unsatisfactory repairs of which you are the sole judge to be rectified by you free of charge provided same are reported to you within seven days of the completion of the service and such claim shall be limited solely to the rectification free of charge of the unsatisfactory work no claim for loss consequential or otherwise being admissible." There then appears in bold type the statement: "Terms: Cash on completion of work. Our mechanic is authorised to collect the amount due." 52 Reasons of the primary judge at 13. 53 Reasons of the primary judge at 30. Kirby The form concludes with a space for the "Mechanic's Signature" and the "Customer's Signature". It was agreed that the mechanic's signature was that of Mr Comninos. On the face of things, therefore, Mr Comninos represented himself as "our" mechanic, that is, Boylan's mechanic. The form facilitated that representation. On the day after Mrs Sweeney's injury, she received a letter from the service station signed by Mr Naren Patel. After expressing regret for the incident, the letter stated: "I have informed the refrigeration company of the incident, and I am presently investigating the matter with them on your behalf. I will inform you in due course of any reply that I receive from them." The "refrigeration company" referred to was Boylan. According to the evidence, Boylan submitted an insurance claim form for Mrs Sweeney's claim to its public liability insurer. This form, signed on 21 August 2000 by an officer of Boylan, disclosed that the refrigerator in question was "owned by Quirks (Boylan Nominees)". It recorded the opinion that Boylan was liable: "The door hinge is broken, and it would seem that we are probably liable given the status of the cabinet, and our responsibility as owners." The report also went on to represent that the repair, found to have been defective, was performed by Boylan's own mechanic, just as the worksheet had earlier suggested: "Door not closing properly, so mechanic retightned [sic] screw which had come loose. We visited the site at 2.00 pm approximately. We tightened the door screws, refer accident details." In the description of the property and damage in the insurance form Boylan's officer wrote: "We are advised that we received a call to fix a loose door, and our mechanic went to the Service Station where he tightened the door screws, and demonstrated to the manager that the door was working correctly – this is apparently on video. Quirks have the broken hinge which was the cause of the door falling onto Mrs Sweeney, after we previously fixed it." Relationship with the mechanic: Mrs Sweeney did not sue Mr Comninos. Nor (if it is relevant) did she sue a company (Cool Runnings Refrigeration and Airconditioning Pty Ltd) whose name was said at trial to appear on Kirby Mr Comninos's van54. Her action was brought in the District Court of New South Wales against the Patels (as occupier of the premises in which the hazardous refrigerator door existed) and Boylan (allegedly responsible for the maintenance and upkeep of the refrigerator and for the negligent repair of the defective door by Mr Comninos). Before the trial, the Patels and Boylan, by a common cross-claim, joined Williams Refrigeration Australia Pty Ltd ("Williams Refrigeration"), to the proceedings, but not Mr Comninos or his company, as cross-defendants. In the result, this cross-claim, as brought, was rejected by the primary judge. It did not trouble the Court of Appeal, or this Court. We are not therefore concerned with any liability of Williams Refrigeration. In the ordinary course of events, a person such as Mrs Sweeney would have been unaware of the relationship between Mr Comninos and Boylan. All she would have known was that a heavy refrigerator door had fallen on her, causing injury and damage. The grounds of defence filed by Boylan made no explicit or implicit reference to the position of Mr Comninos. The defence was extremely brief and stated in very general terms. It denied the allegations in the statement of claim and contested that it "was negligent as alleged or at all". When the trial commenced, Boylan claimed that Mr Comninos was an independent contractor. In its case, Boylan called Mr Wayne Duckworth, its former operations manager. It was he who gave evidence as to the relationship between Boylan and Mr Comninos, pursuant to which the latter had performed the work on the refrigerator door55. According to Mr Duckworth's evidence, accepted by the primary judge, Mr Comninos had no formal or written contract with Boylan56. He was supplied with no uniform, whereas Boylan's employees wore a shirt with its insignia57. This differentiation was unlikely to have been known by Mrs Sweeney. It may not have been noticed by the Patels. Mr Comninos used his own van. He was not paid wages by Boylan nor were superannuation payments made for him. 54 Reasons of the primary judge at 19. I shall hereafter refer to Mr Comninos alone as including reference to "Cool Runnings Refrigeration and Airconditioning Pty Ltd" unless otherwise indicated. Mr Comninos gave no evidence in the trial. The precise status and role of the company (if any) was left to inference or conjecture. 55 Reasons of the primary judge at 18-22. 56 Reasons of the primary judge at 18. 57 Reasons of the primary judge at 18. See also [2005] Aust Torts Rep ¶81-780 at Kirby Whereas Boylan's employees filled in daily service reports, contractors like Mr Comninos, who were used as work pressure required in place of employees, rendered weekly invoices58. Mr Duckworth regarded Mr Comninos as a qualified tradesperson. He had inspected his trade certificate as a refrigeration mechanic59. This had been issued in the name of Mr Comninos personally. Mr Duckworth had introduced a procedure so that persons like Mr Comninos "had to provide us with their current liability and also their worker's [sic] comp [details]". As against the foregoing, other evidence, also accepted by the primary judge, threw additional light on the precise relationship between Mr Comninos and Boylan. This evidence had to be evaluated by the primary judge without the benefit of testimony from Mr Comninos himself60. Although it was open to any party to call him, none did. It was therefore left to the judge to decide the legal character of the relationship from the evidence of Mr Duckworth, the written documents and the inferences available from this material. Factual elements of representation The features of Mr Comninos's work which the primary judge found significant were that: he performed work for the respondent on a daily basis61; he performed the same work as Boylan's employees, doing the same activities on its behalf as Boylan's work requirements necessitated62; he proceeded to Boylan's jobs at the direction of Boylan's employees63; 58 [2005] Aust Torts Rep ¶81-780 at 67,216 [38]. 59 Reasons of the primary judge at 18. 60 Reasons of the primary judge at 24. 61 Reasons of the primary judge at 18. 62 Reasons of the primary judge at 17, 22. 63 Reasons of the primary judge at 31. Kirby he regularly attended at Boylan's premises to obtain from Boylan parts necessary to effect repairs, doing so in the same manner as employees64; Boylan was fully aware of the regular course of work undertaken in this way by Mr Comninos on its behalf65; Boylan provided Mr Comninos with a book of service reports bearing the title "Quirks Refrigeration" which reports Mr Comninos provided to Boylan's customers on behalf of Boylan66; provision of service reports, for execution by the customer, was part of Boylan's intended relationship with its customers67; the form authorised Mr Comninos to collect the "amount due" to Boylan from its client68 and described him as "our mechanic"69; and when Boylan reported Mrs Sweeney's injury to its public liability insurer, it represented Mr Comninos as being "our mechanic" and described his activities as part of Boylan's own acts in tightening the door screws of the defective refrigerator70. The decisional history Decision at trial: The primary judge rejected Mrs Sweeney's claim against the Patels71. That decision is not now in issue. The primary judge found that the relevant negligence was that of Mr Comninos72 and that her damages 64 Reasons of the primary judge at 20. 65 Reasons of the primary judge at 20. 66 Reasons of the primary judge at 20-21. 67 Reasons of the primary judge at 22-23, 31. 68 Reasons of the primary judge at 22. 69 Reasons of the primary judge at 22, 25. The pronoun "our" is significant. Had a lack of responsibility for representation been intended the word "a" would have been substituted. Cf joint reasons at [8]. 70 Reasons of the primary judge at 13. 71 Reasons of the primary judge at 34-35. 72 Reasons of the primary judge at 38-39. Kirby amounted to $43,93273. These findings, and a special costs order, have also not been contested in this Court. The primary judge concluded that Boylan was vicariously responsible for the consequences of Mr Comninos's negligent repair of the refrigerator door. He referred to the principle stated by this Court in Stevens74 that the relationship of employment is dependent upon multiple considerations. Such considerations assist in the determination of the "ultimate question", namely, "whether a person is acting as the servant of another or on his own behalf"75. He referred to this Court's then recent decision in Hollis76. His examination of that decision led him to a conclusion that "Mr Comninos was acting as a servant or agent of [Boylan] with the authority and the approval of [Boylan] to undertake the work that he did"77. It was on that dual basis that the primary judge entered judgment in favour of Mrs Sweeney against Boylan in the sum specified. Decision of the Court of Appeal: The Court of Appeal, also by reference to Stevens and Hollis, concluded that Mr Comninos was not an employee of Boylan78. It decided that Mr Comninos was in essence carrying on a trade or business of his own. In particular, the Court of Appeal held that the mutuality of obligations, normal to an employer/employee relationship, was missing from this case because "Mr Comninos was free to accept or decline work" from Boylan79. This conclusion led the Court of Appeal to consider whether Boylan was nonetheless liable for the acts of Mr Comninos as an agent or representative. In this respect, that Court examined the reasons of Dixon J in CML80, repeatedly referred to in a series of decisions in which McHugh J had explored the liability of a principal for work carried out by an independent contractor as a 73 Reasons of the primary judge at 52. 74 (1986) 160 CLR 16. See reasons of the primary judge at 35. 75 (1986) 160 CLR 16 at 37. 76 (2001) 207 CLR 21. 77 Reasons of the primary judge at 38. 78 [2005] Aust Torts Rep ¶81-780 at 67,218 [58]. 79 [2005] Aust Torts Rep ¶81-780 at 67,218 [56]. 80 (1931) 46 CLR 41 at 48. Kirby representative of the principal81. The Court of Appeal rejected the conclusion that CML constituted "a basis for widening the presently recognised grounds on which a finding of vicarious liability could be made"82. It found that this conclusion was required by an analysis of the majority approaches adopted by this Court in a number of decisions83. It suggested that McHugh J had pressed the reasoning of the majority in CML beyond its true application. In any event, it concluded that "even on the basis of the wider approach", the facts of the present case did not render Mr Comninos a "representative" of Boylan. They fell short of the indicia of "representation" upheld by McHugh J as his basis of liability in Hollis84. The issues Matters not in issue: A number of arguments that were considered by the Court of Appeal (or which might otherwise have been suggested by the facts of this case) are not in issue in this appeal: The personal liability issue: Neither as a matter of law, nor as a matter of fact, was it argued that Boylan was directly responsible for Mrs Sweeney's injury. Thus, there was no attempt to suggest that Boylan owed Mrs Sweeney a non-delegable duty of care on the basis that the defective refrigerator door constituted an "extra-hazardous" risk85 or on some other ground. As to the facts, although it is true that there had been a defect in the refrigerator door before Mr Comninos endeavoured to fix it, the primary judge's conclusion that the actual cause of Mrs Sweeney's injury was not that defect but the incompetent attempt to repair it. Clearly, that conclusion was open to the primary judge. In this Court, it was not suggested for Mrs Sweeney that liability could be brought home to Boylan, except as it was responsible for the negligence of Mr Comninos. 81 Northern Sandblasting (1997) 188 CLR 313 at 366; Scott v Davis (2000) 204 CLR 333 at 346 [34], 355 [61]; Hollis (2001) 207 CLR 21 at 57-58 [93]. See [2005] Aust Torts Rep ¶81-780 at 67,219-67,222 [65]-[81]. 82 [2005] Aust Torts Rep ¶81-780 at 67,222 [81]. 83 [2005] Aust Torts Rep ¶81-780 at 67,221-67,222 [78]-[84]. Cf Starks v RSM Security Pty Ltd [2004] Aust Torts Rep ¶81-763 at 65,994 [34]. 84 [2005] Aust Torts Rep ¶81-780 at 67,222-67,223 [85]. 85 [2005] Aust Torts Rep ¶81-780 at 67-222 [83] citing Torette House Pty Ltd v Berkman (1939) 39 SR (NSW) 156 at 170; Stevens (1986) 160 CLR 16 at 30, 41; Hollis (2001) 207 CLR 21 at 70 [121]. See also Honeywill & Stein Ltd v Larkin Bros (London's Commercial Photographers) Ltd [1934] 1 KB 191. Kirby The statutory employment issue: A belated attempt was made in the Court of Appeal to argue that Mr Comninos was a "deemed worker" of Boylan's and that the Workplace Injury Management and Workers Compensation Act 1998 (NSW)86 applied. However, even if that provision applied in some way to resolve the common law duty of Boylan to Mrs Sweeney, such an issue had not been raised at trial. Without procedural unfairness to Boylan it could not be asserted for the first time on appeal. The effect (if any) of that statute was therefore rejected by the Court of Appeal87. The argument was not revived in this Court. The organisation test issue: Mrs Sweeney did not seek to revive Lord Denning's attempt to explain the ambit of vicarious liability for persons working for and within the organisation of the defendant's business88. There are some similarities between the expression of this test ("part and parcel of the organisation") and other attempts to explain vicarious liability by reference to an analysis of "enterprise risk" (for example, as considered by the Supreme Court of Canada89). This Court rejected the organisation test in Stevens90. Whilst there may be more to the notion than some critics have suggested, it was not revived in argument in this appeal. Any reconsideration of the organisation test must therefore await another day. The ipso facto representative issue: It was suggested in the Court of Appeal that McHugh J had developed a sui generis principle of his own which he had propounded in a series of cases. This, it was argued, was to the effect that a principal is vicariously liable for acts carried out by an authorised agent91. Because there are some resonances of this view in the 86 Sched 1, cl 2(1). 87 [2005] Aust Torts Rep ¶81-780 at 67,219 [63] citing Suttor v Gundowda Pty Ltd (1950) 81 CLR 418. See also Coulton v Holcombe (1986) 162 CLR 1 at 7-9. 88 See, eg, Stevenson Jordan & Harrison Ltd v MacDonald and Evans [1952] 1 TLR 101 at 111; Bank Voor Handel en Scheepvaart NV v Slatford [1953] 1 QB 248 at 89 Bazley v Curry [1999] 2 SCR 534 at 548 [22]. See also Lepore (2003) 212 CLR 90 (1986) 160 CLR 16 at 26-29, 35-36. Cf Federal Commissioner of Taxation v Barrett (1973) 129 CLR 395 at 402. 91 Northern Sandblasting (1997) 188 CLR 313 at 366; Scott (2000) 204 CLR 333 at 346 [34], 355 [61]; Hollis (2001) 207 CLR 21 at 57-58 [93]. Kirby reasons of the primary judge, when he came to his ultimate conclusion that vicarious liability existed in this case92, it is important to understand that the arguments for Mrs Sweeney did not propound any such "broader doctrine". The Court of Appeal pointed out that the joint reasons in Hollis did not embrace the approach taken by McHugh J93. The joint reasons did not need to do so because of the finding of the participating judges that the proper relationship in that case was that of employment. By well established doctrine, that relationship, if proved, attracted vicarious liability for the tortious acts of the employee. For Mrs Sweeney, the foundation for her submissions was the reasoning of the majority in CML, specifically that of Dixon J. She did not seek to cast any doubt on that reasoning in Hollis. It was the reasoning in CML that was invoked, rather than any later re-expressions or elaborations of it by McHugh J or other judges. Apart from noticing the endeavours of McHugh J to draw the CML principle to attention, and to apply it, as an alternative basis for finding vicarious liability outside the employment relationship, it is unnecessary for the purposes of the present appeal to decide whether McHugh J's reasons express a different principle or the same principle restated. It is sufficient to return to CML, as Mrs Sweeney asked, and to consider whether it applies to the present circumstances. Remaining issues: The foregoing analysis cuts away immaterial issues. It is possible, therefore, to identify the following as the issues to be addressed by this Court: The employment relationship issue: Having regard to the principles stated in the authorities, and particularly in Hollis, was the primary judge correct to find that the true character of the relationship between Mr Comninos and Boylan included that of employment? Did the Court of Appeal err in coming to the opposite conclusion? The representative agent issue: Within the principle stated by Dixon J in CML, was the work performed by Mr Comninos done by him as a representative agent of Boylan, standing in its place and therefore identified with Boylan for the purpose of vicarious liability? Or, as the Court of Appeal found, was it simply done by Mr Comninos as an independent contractor in pursuit of his own independent business so that he alone, and not Boylan, is responsible in law for the consequences of any wrong? 92 Reasons of the primary judge at 38. 93 [2005] Aust Torts Rep ¶81-780 at 67,221-67,222 [80]-[84]. Kirby The legal policy issues: In the event that the last two issues are uncertain of resolution, do any considerations of legal policy favour the provision of vicarious liability in this case? Thus, does the changing character of work under contemporary Australian conditions (and the increasing number of activities performed for larger enterprises by persons formally engaged as independent contractors) suggest the employment relationship (or of the relationship of agent representatives) is appropriate so that the doctrine of vicarious liability can respond appropriately to contemporary circumstances? Conversely, given the antiquity of the principle that principals are not, in general, vicariously liable for the torts of independent contractors, is the creation of exceptions to that principle a matter more properly left to a legislature than decided by this Court? that some wider ambit of The procedural issue: Considering the way in which the separate liability of Mr Comninos was first raised in these proceedings, is a conclusion adverse to Mrs Sweeney consonant with the proper administration of justice? The employment relationship issue Applicable test: Because the test to be applied in deciding whether a relationship of employment has been established was examined so recently in Hollis, it is unnecessary to re-express it for the purposes of this appeal. Mrs Sweeney did not suggest a different test. She argued that, within the established principles, that Mr Comninos was not an employee of Boylan and that Boylan was not vicariously liable for his conduct on that basis. the Court of Appeal had erred in finding The bicycle courier considered an employee in Hollis was not a member of a clear-cut conventional employment relationship. There were some indicia that supported the opposite conclusion. Indeed, such a conclusion had been reached in the earlier "taxation" decision of the New South Wales Court of Appeal94. In his reasons in Hollis, McHugh J basically adhered to the approach of the taxation decision. He held that the "classical tests" of employment affirmed the conclusion against employment95. He opposed what he described as any 94 Vabu Pty Ltd v Federal Commissioner of Taxation (1996) 33 ATR 537 from which this Court has refused special leave to appeal: Federal Commissioner of Taxation v Vabu Pty Ltd (1997) 35 ATR 340. See Hollis (2001) 207 CLR 21 at 27 [8], 49 95 Hollis (2001) 207 CLR 21 at 49 [69]. Kirby unsettling of these tests by what he saw as an extension of their operation to a case of a business relationship "not typical of a traditional employment relationship"96. relationship between Vabu I adhere to the principles stated in the joint reasons in which I participated in Hollis. However, I accept McHugh J's statement that "certain aspects of the work employer/employee relationship"97 whilst other aspects of their relationship suggested "someone who acts as an independent contractor in the sense of someone who acts as an independent principal, exercising an independent discretion in carrying out a task for his own business interest and who is retained simply to produce a result"98. The joint reasons in Hollis do not hold otherwise. suggested couriers and the The detailed attention to the facts of the relationship set out in the joint reasons in Hollis, and to the multiple features that betokened an employment relationship99 in totality, shows that a conclusion, in hybrid cases of the present kind, is not one to be painted in black and white100. On the contrary, the joint reasons in Hollis were at pains to demonstrate that repeated references to the relationships of "employment" and "independent contract" simply identify the issue for decision. They do not constitute a substitute for analysis101. The changing character of employment and of quasi-employment relationships; the fundamental concerns underlying the doctrine of vicarious liability102; the inadequacies of the notion of control, taken on its own, to differentiate employees from independent contractors103; and the need, in each case, for assessment and judgment are all points that the joint reasons acknowledged in Hollis. 96 (2001) 207 CLR 21 at 48 [68]. 97 (2001) 207 CLR 21 at 48 [68]. 98 (2001) 207 CLR 21 at 48 [68]. 99 (2001) 207 CLR 21 at 42-45 [48]-[57]. 100 Luntz and Hambly, Torts: Cases and Commentary, 5th ed (2002) at 908. 101 Hollis (2001) 207 CLR 21 at 38 [36]. See also the joint reasons at [13], [29]. 102 Hollis (2001) 207 CLR 21 at 41 [45]. 103 Hollis (2001) 207 CLR 21 at 40-41 [43]; Glass, McHugh and Douglas, The Liability of Employers in Damages for Personal Injury, 2nd ed (1979) at 72-73. Kirby Application of the test: So was the primary judge correct to conclude in this case that, as in Hollis, a relationship of employment of a new and somewhat wider variety, had been established, rendering the Court of Appeal's contrary view erroneous? In support of the conclusion of the primary judge Mrs Sweeney invoked the following instruction contained in the joint reasons in Hollis104: "In general, under contemporary Australian conditions, the conduct by the defendant of an enterprise in which persons are identified as representing that enterprise should carry an obligation to third persons to bear the cost of injury or damage to them which may fairly be said to be characteristic of the conduct of that enterprise. In delivering the judgment of the Supreme Court of Canada in Bazley v Curry105, McLachlin J said of such cases that 'the employer's enterprise [has] created the risk that produced the tortious act' and the employer must bear responsibility for it. McLachlin J termed this risk 'enterprise risk' and said that 'where the employee's conduct is closely tied to a risk that the employer's enterprise has placed in the community, the employer may justly be held vicariously liable for the employee's wrong'106." In the present case, it was not unreasonable for the primary judge to have inferred the likelihood that the Patels (Boylan's customer), in dealing with Mr Comninos, thought that they were dealing with Boylan. Even more so, Mrs Sweeney was entitled to assume that the "refrigeration company", referred to in the Patels' letter, was a single entity, namely Boylan. Especially in the absence of evidence from Mr Comninos himself, clarifying the bare details sketched by Mr Duckworth, the relationship of Mr Comninos with Boylan was (as in Hollis) a complex one. It lay in the borderland between an employment-like relationship and a wholly independent contract. Counsel for Boylan argued that the relationship was clear-cut. But if Mr Comninos really had an independent business it would have been in the interests of Boylan to call him as a witness to say so and to demonstrate why that was the correct conclusion. This Boylan failed to do. Conclusion: non-employment: Whilst the issue, as in Hollis, is arguable both ways, I am not convinced that Mr Comninos was an employee of Boylan. There are various elements in the evidence that support this conclusion. They gather strength, by way of contrast, from the fact that the couriers in Hollis 104 Hollis (2001) 207 CLR 21 at 40 [42]. 105 [1999] 2 SCR 534 at 548. 106 [1999] 2 SCR 534 at 548-549. Kirby supplied their own transport (a single bicycle) whereas Mr Comninos used a van which was not supplied by Boylan107. The couriers in Hollis wore a uniform supplied by the putative employer which was how the tortfeasor was identified. No livery was provided by Boylan to Mr Comninos108. Further, the "employer" in Hollis superintended the couriers' finances, tools and equipment. It exercised significantly greater control over the couriers than was proved in the case of Boylan and Mr Comninos. It follows that the primary judge erred in deciding that a relationship of employment was established and that Boylan was vicariously liable for Mr Comninos's wrongs on that basis. In so far as the primary judge thought that the decision in Hollis authorised, or required, a conclusion of an employment relationship, he was mistaken. The Court of Appeal did not err in giving effect to the opposite conclusion. To that extent the appeal fails. The representative agent issue Applicable test: But did the primary judge correctly conclude that Mr Comninos was an agent of Boylan, acting not in a wholly independent capacity, but as a representative of Boylan, thereby giving rise to vicarious liability on Boylan's part for his negligence? If the judge was correct in that respect his orders would be upheld on that footing notwithstanding the erroneous finding of employment. In CML, a life insurance company, Colonial Mutual Life Assurance Society Ltd, engaged Mr Ridley, a canvasser, to sell its policies to customers. A condition of the agreement forbade Mr Ridley to use language that would bring any person or institution into disrepute. Whilst attempting to secure business for Colonial Mutual, Mr Ridley made defamatory statements about another life insurance company. This produced an action for slander, brought against Colonial Mutual. This Court, by majority109, held that, in the circumstances described, Colonial Mutual was vicariously liable for the wrong done by Mr Ridley. Importantly, this was because Mr Ridley, in performing his services for Colonial Mutual, had not acted independently. He had acted as Colonial Mutual's representative. It was therefore liable for his defamatory statements. 107 See above these reasons at [50]. 108 See above these reasons at [54]. 109 Gavan Duffy CJ, Rich, Starke and Dixon JJ; Evatt and McTiernan JJ dissenting. Kirby In his reasons in CML, Dixon J explained the applicable rule110: "In most cases in which a tort is committed in the course of the performance of work for the benefit of another person, he cannot be vicariously responsible if the actual tortfeasor is not his servant and he has not directly authorized the doing of the act which amounts to a tort. The work, although done at his request and for his benefit, is considered as the independent function of the person who undertakes it, and not as the benefit does by his something which representative standing in his place and, therefore, identified with him for the purpose of liability arising in the course of its performance. The independent contractor carries out his work, not as a representative but as a principal. But a difficulty arises when the function entrusted is that of representing the person who requests its performance in a transaction with others, so that the very service to be performed consists in standing in his place and assuming to act in his right and not in an independent capacity." the person obtaining Whilst the area of the law in question is an exceedingly difficult one, CML has never been overruled. It was not doubted by any of the judges in Hollis. The passage of time, and the emergence of new "hybrid" forms of "employment" make the principle stated in CML one especially apt for the relationships with business enterprises in contemporary Australia. Conclusion: representative agent established: When the CML principle is applied in the present case, in the terms in which it was expressed by Dixon J, it is my view that the primary judge was right to conclude on that basis that Boylan was vicariously liable for Mr Comninos's wrongs. The Court of Appeal erred in concluding to the contrary. The facts supporting this opinion are those recounted above111. In particular, they include those elements of the evidence, found by the primary judge and not really in dispute, that Boylan represented to others that Mr Comninos was Moreover, Boylan armed Mr Comninos with the means by which he could make that representation convincingly to those with whom he was dealing on behalf of Boylan. its employee or agent. The fact that Mr Comninos turned up to attend to the defect in the refrigerator when the Patels contacted their "refrigeration company" gave rise to an inference that he was Boylan's employee or representative agent for the 110 (1931) 46 CLR 41 at 48-49. 111 See above these reasons at [56]. Kirby purpose of performing the obligation that Boylan had assumed as lessor of the refrigeration equipment. If it had been otherwise, it could be inferred that Boylan would make this clear, at least to people such as the Patels. If it was claimed that Boylan had done so, this could have been proved by calling Mr Comninos to say as much. Boylan did not tender his evidence. The inference is inescapable that third parties, including the Patels and Mrs Sweeney, were left by Boylan to infer that Mr Comninos was an employee or representative agent of Boylan112. This inference is reinforced by the worksheet, provided by Boylan to Mr Comninos, for on-supply to customers such as the Patels. As the primary judge found, that form "promote[d] that relationship"113. Moreover, the relationship, so promoted, was one in which Mr Comninos was presented as representing Quirks Refrigeration. He was described in terms as "our mechanic". He was even authorised to receive payments in cash for Boylan114. The Court of Appeal considered that this expression "our mechanic" was ambiguous115. It might be so as to the relationship of employment116. But it certainly identified Mr Comninos as the representative of Boylan's enterprise. Correctly, the primary judge inferred that the worksheet was designed and created by Boylan for its purposes117. Boylan knew, or ought to have known, that it would be used in relation to Boylan's customers by contractors such as Mr Comninos. Additionally, in the insurance claim form, Boylan's officer made it clear that, for the purpose of Boylan's activities, Mr Comninos was integrated into its enterprise118. Thus, "We tightened the door screws", "we received a call", "our mechanic went to the Service Station" and the door fell on Mrs Sweeney "after we previously fixed There could scarcely have been a clearer contemporaneous indication of the mind and purpose of Boylan and the complete integration of Mr Comninos into its enterprise for this purpose. 112 Cf Jones v Dunkel (1959) 101 CLR 298 at 305; Hampton Court Ltd v Crooks (1957) 97 CLR 367 at 371-372; Payne v Parker [1976] 1 NSWLR 191 at 194, 200- 113 Reasons of the primary judge at 31. 114 Cf CML (1931) 46 CLR 41 at 49. 115 [2005] Aust Torts Rep ¶81-780 at 67,217 [42]. 116 See above these reasons at [72]. 117 See above these reasons at [44]-[45]. 118 See above these reasons at [47]-[49]. Kirby Although, once the parties came to the trial and the separate legal status of Mr Comninos became important for legal purposes, Mr Duckworth laid emphasis on the elements of the independence of Mr Comninos's activities, this was not how it looked at the relevant time, which was when the door was negligently "fixed". The contemporary documents make it clear that, at that time, Mr Comninos was viewed by everyone as part of Boylan's business. He was represented to be such and he represented himself similarly by signing the form that Boylan had provided to him as "Our [that is Boylan's] mechanic". It follows that, on the face of things, this is a clear case for the application of the special principle in CML. So how does Boylan seek to escape its liability on this basis? Rejecting Boylan's arguments: Two unconvincing arguments were advanced by Boylan. I shall deal with them in turn. First, it was suggested that the principle in CML was to be confined to cases where the independent contractor was not merely the representative of the principal but was a representative authorised to make representations. True it is, this was the factual position of Mr Ridley, the offending insurance canvasser, in CML. However, it is not the way the majority in CML expressed the wider principle of vicarious liability. In the reasons of Gavan Duffy CJ and Starke J, the principle that was applied was one of broader ambit attributed to a rule established in the Privy Council decision in Citizens' Life Assurance Co v Brown119. That decision was regarded as "conclud[ing] the present case". Gavan Duffy CJ and Starke J said120: "[W]e apprehend that one is liable for another's tortious act 'if he expressly directs him to do it or if he employs that other person as his agent and the act complained of is within the scope of the agent's authority.' It is not necessary that the particular act should have been authorized: it is enough that the agent should have been put in a position to do the class of acts complained of." The fact that Dixon J (with whom Rich J agreed) did not limit his expression of the applicable principle to contractors of a particular kind, with specified functions of representation, is clear from his Honour's explanation of the foundation for the liability that he upheld121: 120 (1931) 46 CLR 41 at 46. 121 (1931) 46 CLR 41 at 49 (emphasis added). Kirby "[I]n performing these services for the Company, he does not act independently, but as a representative of the Company, which accordingly must be considered as itself conducting the negotiation in his person." Given that it would reduce the holding in CML to a very confined and peculiar rule to limit it to exclude conduct other than acts of representation as such, such a reading of what Dixon J said in that case should not be adopted. It is required neither by his Honour's language; nor by the foundation he states; nor by previous understandings of that foundation; nor by its purpose. As Dixon J explained122: "The wrong committed arose from the mistaken or erroneous manner in which the actual authority committed to him was exercised when acting as a true agent representing his principal in dealing with third persons." Mr Comninos, when he repaired the refrigerator door, was acting as a true agent for Boylan. He represented it in his dealings with third persons, specifically the Patels (who notified Mrs Sweeney of their "refrigeration company" not of Mr Comninos). He was so described to Boylan's insurer. Secondly, Boylan argued that to apply the CML rule would undermine the principle in Quarman v Burnett123. That principle holds that, at common law, a person is not generally liable for the negligence of an independent contractor. This Court was repeatedly reminded by Boylan's counsel that the Quarman principle had stood for 160 years and had been affirmed in Stevens124 and other cases125. This argument is also unpersuasive. Obviously, the CML decision qualifies any rigid application of the immunity of principals from liability for the tortious acts of their independent contractors. But the immunity of principals has 122 (1931) 46 CLR 41 at 50. As McHugh J points out in Hollis (2001) 207 CLR 21 at 59 [97], the concept of "representation" was not new to this area of discourse. It was the element suggested by Littledale J in Laugher v Pointer (1826) 5 B & C 547 at 554 [108 ER 204 at 207] to explain the vicarious liability of masters for the wrongs done by servants. 123 (1840) 6 M & W 499 [151 ER 509]. 124 (1986) 160 CLR 16 at 43. 125 See, eg, Northern Sandblasting (1997) 188 CLR 313 at 366; Hollis (2001) 207 CLR 21 at 36 [32], 42 [51], 47 [66]. Kirby never been absolute126. The absence of a strict dichotomy between employees and independent contractors is revealed by the concept of non-delegable duties of care, the existence of torts which do not require proof of fault, such as public and private nuisance127, and other exceptions to the general rule that employers are only vicariously liable for the torts of their employees128. Now, it is true that there has been criticism of the CML exception. Dixon J anticipated this criticism in his reference, in CML, to the writings of "purists" who were "disposed to impugn the course that authority has taken in widening the liability for the wrongs of others"129. Professor Atiyah also noted similar criticisms130. But he did not doubt the existence of the broader ground for vicarious liability accepted in CML. No attempt was made in this appeal to suggest that the CML principle, which has stood for 75 years, should now be abolished. Even Boylan disclaimed such a submission. The result is that an independent contractor, with its own business, cannot generally look to the principal to assume vicarious liability for its wrongs. But if the contractor has been armed with the authority to act as the principal's representative, law and justice sustain the rule in CML that, if sued, the principal will be liable for its representative's wrongs to others acting within the scope of that authority. Whilst the rule in CML remains, it should be applied by this Court in accordance with its terms. It is part of Australian law. Its terms apply in the present case. Mr Comninos was the representative of Boylan which afforded him the means to persuade others that he should be admitted to their premises, permitted to repair a refrigerator placed there for which Boylan was responsible by lease and even allowed to receive Boylan's money and to give a receipt for what he received131. 126 Brooks, "Myth and Muddle – An Examination of Contracts for the Performance of Work", (1988) 11(2) University of New South Wales Law Journal 48 at 85. 127 See, eg, Spicer v Smee [1946] 1 All ER 489. 128 See Trindade and Cane, The Law of Torts in Australia, 3rd ed (1999) at 725-732. 129 CML (1931) 46 CLR 41 at 49 referring to Dr Baty, Vicarious Liability, (1916) at 44 which Dixon J notes was "criticized by Sir F Pollock, 32 Law Quarterly Review 130 Atiyah at 109. 131 That Mr Comninos did not do so in the present case is immaterial. The worksheet issued to him by Boylan described him as "Our mechanic" and expressly authorised this to happen against the receipt given by the mechanic. Kirby firm distinction between The respondent submitted that the joint reasons in Hollis favoured maintaining a independent contractors and employees132. However, the word "representation" used in the joint reasons in Hollis is entirely consistent with the use of the word by Dixon J in CML. It is a noun expressing what a "representative" does. This is made plain by the words that the search is for "identification with the alleged employer as indicative of a relationship of principal and independent contractor"133. There is nothing in the treatment of the CML rule in Hollis that suggests an outcome of this appeal adverse to Mrs Sweeney. That is scarcely surprising because, in Hollis, vicarious liability was upheld by the majority within the category of an employment relationship. Invocation of CML was not therefore necessary, still less essential, as it is in this instance. Conclusion: Boylan is vicariously liable: The result is that a person such as Mrs Sweeney was entitled to treat Mr Comninos as the representative of Boylan's "refrigeration company", just as the Patels, by inference, believed he was. If Boylan complains about having to assume vicarious liability for the wrongs done by Mr Comninos, they may be answered in the way contemplated by the CML principle. They should not have put Mr Comninos into the position that he could represent himself as Boylan's agent. They should have taken steps to make it plain to third parties that people, such as Mr Comninos, were not their "representatives" but represented their own business alone, being a separate, independent enterprise. At trial Boylan should have joined Mr Comninos as a third party liable to indemnify it or to contribute to any judgment. Because, to the contrary, Boylan armed Mr Comninos with the means to make the representations that he did (and took no steps to correct such representations or claim indemnity or contribution) Boylan must accept the legal consequences. It follows that it was open to the primary judge to hold that Boylan was vicariously liable for the wrong committed by Mr Comninos, its representative, and that this was the cause of Mrs Sweeney's injury. The Court of Appeal erred in disturbing that conclusion and the judgment at trial that gave effect to it. Representative agent: a caveat: Nothing I have said in these reasons should be taken to suggest that I favour the adoption of a rule which exposes a principal to vicarious liability in respect of torts committed by an independent contractor in circumstances where the contractor "represents" the principal simpliciter134. CML does not support the adoption of such a rule. I did not 132 See, esp, (2001) 207 CLR 21 at 39 [40]. 133 (2001) 207 CLR 21 at 39 [40]. 134 Cf joint reasons at [26], [29]. Kirby apprehend the appellant as presenting her case in such terms. Nor would I decide it so. The principle in CML constitutes a long-standing, confined and carefully drawn exception to the general rule that principals are not liable for the torts of independent contractors. CML has never previously been doubted by this Court. The mere fact that an independent contractor acted at the request of a principal for the latter's benefit, does not, without more, attract the exception. As Dixon J indicated, for the principle in CML to be engaged, the principal must arm the contractor with the means to hold himself or herself out "so that the very service to be performed [by the contractor] consists in standing in his [principal's] place and assuming to act in his [principal's] right and not in an independent capacity"135. The policy issues Vicarious liability: Boylan submitted that the foregoing result flew in the face of established legal doctrine and should not be accepted. I have endeavoured to show that it is, instead, the application of settled legal doctrine, as established by the decision of this Court in CML which has never been overruled. To Boylan's argument that this Court should read down, or somehow distinguish, the principle in CML, so as to avoid the imposition of vicarious liability on it in the present case, there are three responses based on considerations of legal policy136. First, changes in workplace and employment relationships that have occurred since CML was decided (and which have accelerated in recent years) make the rule enunciated in that decision a particularly useful one for contemporary Australian society. Thus, Professor Atiyah predicted that, as a social development, the liability of those in whose enterprise wrongs are done137: "… will assume greater practical importance in the near future. There is evidence to suggest that, in certain spheres of industry, and particularly in the building trade, employers are finding it convenient to 'sub-contract' work rather than to do it by employing their own men simply because it enables them to get the advantages of employing labour without the 135 (1931) 46 CLR 41 at 48-49 (emphasis added). 136 Contra Williams, "Liability for Independent Contractors", (1956) Cambridge Law Journal 180; Queensland Law Reform Commission, Vicarious Liability, Report No 137 Atiyah at 334-335 (citation omitted). Kirby corresponding obligations. … The purpose of this device appears to be largely to avoid the increasing legal burdens which public law (rather than the doctrine of vicarious liability) places on employers … One incidental by-product of this state of affairs is to bring into relief the general exemption accorded by the doctrine of vicarious liability to the employer of an independent contractor. … If this kind of arrangement becomes at all common, and if the courts are satisfied by the terms of the contracts in question that they are truly contracts for the employment of independent contractors, it will not be surprising if the courts come under pressure to extend the doctrine of vicarious liability for contractors still further." In elaboration of this prediction, founded in notions of economic equity and social justice as between the injured and those "responsible" for the injuries, Professor Atiyah pointed to the difficulty that "the man in the street would find … to grasp the law's fine distinctions between a servant and an independent contractor"138. That person would, he suggested, view "an organisation … as a composite entity which ought in justice to pay for damage which 'they' have caused"139. Although not always spelt out in such terms, it is policy notions of this kind that underpin the rule as to representative agents stated in CML. So far as legal principle and policy inform the boundaries of the rule in contemporary circumstances, they do not suggest its confinement as urged for Boylan. The relevance of the changing character of economic activity in Australia was addressed in Hollis both in the joint reasons140 and in the reasons of McHugh J141. McHugh J observed that "[i]f the law of vicarious liability is to remain relevant in the contemporary world, it needs to be developed and applied in a way that will accommodate the changing nature of employment relationships"142. 138 Atiyah at 335. 139 Atiyah at 335. 140 (2001) 207 CLR 21 at 40-41 [43]. 141 (2001) 207 CLR 21 at 50 [72], 53-54 [84]-[85], 57-58 [93]. 142 (2001) 207 CLR 21 at 54 [85]. Kirby recognised The changing character of many features of contemporary employment federal143 and State144 and quasi-employment legislation145. Such changes make it inappropriate to confine, or narrow, the CML rule. If anything, the new circumstances may, in the future, require an enlargement of that rule. In the present case, it is sufficient to apply the CML rule, according to the terms in which it was expressed, to arrive at the legally correct outcome which is also the outcome that is just in the circumstances. recent Secondly, to the extent that Boylan argued for a strict dichotomy between the liabilities of employers for employees and of principals for independent contractors, the exigencies of the times militate against such supposed strictness. In many, perhaps most, cases nowadays, where the actual wrongdoer is an independent contractor and that fact is known, that party will be separately sued. It will have its own insurance (as it is said apparently Mr Comninos had in addition to Boylan's insurance covering his negligence146). However, due to the proliferation of independent contracts in place of employment, cases will arise where the contractor is not insured or cannot be identified or where it cannot be established which of several contractors was responsible for causing the damage147. The law of vicarious liability may then make the difference between recovery and non-recovery. Accordingly, this is an important area of law and justice. It cannot be assumed that CML is unnecessary because many independent contractors are identified by those whom they injure and most now have their own insurance or other means of bearing their separate liabilities. Thirdly, maintenance and enforcement of the rule in CML, and its application to a case such as the present, would encourage greater rationality in the conduct of litigation. It would, for example, have been open to Boylan, long before the trial of Mrs Sweeney's action, including in its defence, to disclose frankly to those representing Mrs Sweeney the existence of an independent contractor with his own insurance. It would also have been open to Boylan to join Mr Comninos as a cross-defendant in the same way as it joined Williams Refrigeration. Such a course would have permitted the trial judge to assign the 143 See, eg, Workplace Relations Act 1996 (Cth), ss 832-834. 144 See, eg, Industrial Relations Act 1996 (NSW), esp Ch 2, Pt 9. 145 See also Secure Employment Test Case (No 3) [2006] NSWIRComm 38 at [7]-[8] concerning the ostensible preference of employers to increasingly rely on independent contractors. 146 Boylan [2005] Aust Torts Rep ¶81-780 at 67,215 [29]. 147 Atiyah at 333. Kirby ultimate responsibility (if any) wherever it lay. Instead, the details of the commercial arrangements within the "refrigeration company" lay in wait for the trial. Withdrawing or limiting the CML rule serves only to encourage and reward such outcomes where a party at trial sets out to catch its opponent on the back foot. It encourages trial by evidentiary ambush. Maintaining the liability of the principal for the representative agent discourages such potential miscarriages. If enforced, it deprives the principal of forensic rewards for its silence about the separate business status of a person such as Mr Comninos. Parliamentary solution: Finally, Boylan argued that the dichotomy between employment and independent contract, which it urged should be strictly maintained, should not be disturbed because this was the function of the legislature, rather than of the courts. The usual authorities for restraint were cited148. But for every such judicial opinion there is another explaining why, in particular cases, courts have found remedies in the case of wrongs by re- expressing the common law or by applying its rules justly to new factual circumstances149. Such generalities do not resolve, they merely state the problem for judicial decision-making. Boylan placed special emphasis upon the fact that the Parliament of New South Wales had entered upon the task of re-expressing the common law of vicarious liability, but had confined its labours to a small item which, it was said, was deliberate150. We were urged to draw the inference that Parliament was satisfied with the present law and had rejected any larger measure of reform. There are many answers to this submission. The most important is that Mrs Sweeney did not seek an enlargement of the CML rule; simply its application. On this basis, no widening of vicarious liability is involved in this appeal, merely its operation in the circumstances of this case. In any event, this Court has the responsibility of stating the common law for the whole of Australia. The enactment of a particular statute by a single State does not relieve this Court of that responsibility. The suggested inference of parliamentary satisfaction with the state of the common law, because of the 148 See, esp, State Government Insurance Commission v Trigwell (1979) 142 CLR 617 149 See, eg, Brodie v Singleton Shire Council (2001) 206 CLR 512; Cattanach v Melchior (2003) 215 CLR 1. 150 Law Reform (Vicarious Liability) Act 1983 (NSW). The Act deals with the vicarious liability of employees of the Crown. Cf McGee and Scanlan, "Judicial attitudes to limitation", (2005) 24 Civil Justice Quarterly 460 at 476. Kirby narrow focus of a particular enactment should be given little weight151. This is because many reasons will normally exist to explain legislative inaction other than satisfaction with the state of the common law152. Moreover, even if it were possible to attribute inaction to satisfaction with the existing law that is not a convincing reason for abandoning this Court's constitutional function. Unless Parliament's purpose is realised in legislation it has no legal force. It is a mistake to think otherwise153. Conclusion: policy favours recovery: To the extent that it is relevant in this case to consider such matters, when Mrs Sweeney has appealed to decisional authority rather than to policy, they support the existence of vicarious liability in employment for the wrongs of Mr Comninos. True, those wrongs were committed by an independent contractor. However, exceptionally, Boylan is legally responsible for them because they were done by the contractor as its authorised representative. They were done with authority provided by Boylan to let Mr Comninos appear to third parties as its representative and thus as part of Boylan's enterprise. On this basis the application of the CML principle does no offence to the nominated considerations of legal principle and policy. CML governs the case. Legal policy reinforces that conclusion. This conclusion requires that the appeal be allowed and Mrs Sweeney's judgment restored. The procedural issue Because of the conclusion reached by the majority of this Court, Mrs Sweeney loses. She loses on a basis that would not ordinarily have been known to her at the time of, or after, her injuries. It was contrary to the suggestion in the letter from the Patels that there was a single "refrigeration company", responsible for the defect that had caused her injuries. It was not pleaded in Boylan's notice of defence. The nature of the true defence was first revealed at trial. In Donaldson v Harris154, Wells J described litigation in accordance with the "old common law" as "based, with rigorous logic, upon the system of 151 Cf R v Reynhoudt (1962) 107 CLR 381 at 388; Zickar v MGH Plastic Industries Pty Ltd (1996) 187 CLR 310 at 329, 351. 152 Harriton v Stephens [2006] HCA 15 at [143]. 153 Atiyah, "Common Law and Statute Law", (1985) 48 Modern Law Review 1 at 26- 154 (1973) 4 SASR 299. Kirby litigation by antagonists". The common law protected the "treasured right of each litigant to store up, in secret, as many unpleasant surprises for his opponent as he could muster, and only reveal them at the last minute at the trial … in the presence of the judicial umpire"155. Wells J quoted Wigmore156 as explaining that the common law regarded "the concealment of one's evidential resources and the preservation of the opponent's defenceless ignorance, as a fair and irreproachable accompaniment of the game of litigation." In Nowlan v Marson Transport Pty Ltd157, Heydon JA (with the agreement of Mason P)158 and Young CJ in Eq159 condemned the culture of personal injury litigation in the District Court of New South Wales disclosed in that case. Their Honours pointed to the difference that had long prevailed on "the other side of Westminster Hall"160. They referred to changes in the practice of the Federal Court of Australia and of the State Supreme courts161 and other courts elsewhere in Australia and also in England from which the common law tradition derived. They suggested a need for the District Court of New South Wales to discourage the vestigial relics of ambush trial162. I can only agree. This Court does not know the full details of how the independent contract of Mr Comninos first came to be known to Mrs Sweeney and her legal representatives. I will not, therefore, condemn anyone. But this case is not a proud moment in our administration of justice. At the least, it suggests the need for attention by trial judges in the District Court of New South Wales to the considerations expressed by all members of the Court of Appeal as that Court was constituted when Nowlan was decided. Only when judges exact a price, 155 (1973) 4 SASR 299 at 302 citing (1628) Co Litt 36a: Nemo tenetur amare adversarium suum contra se (No one is bound to arm an adversary against one's self). 156 Evidence, 3rd ed (1940), vol 6 at 376. 157 (2001) 53 NSWLR 116. 158 (2001) 53 NSWLR 116 at 128-129 [28]-[32]. 159 (2001) 53 NSWLR 116 at 131 [40]-[46]. 160 (2001) 53 NSWLR 116 at 127 [27] quoting Sir George Jessel. 161 (2001) 53 NSWLR 116 at 128 [28] citing White v Overland [2001] FCA 1333 at 162 (2001) 53 NSWLR 116 at 131 [46] per Young CJ in Eq. Kirby principally in costs, for "treasuring up" unpleasant evidentiary surprises will the practice and culture be changed. Orders The appeal should be allowed with costs. The judgment of the Court of Appeal should be set aside. In place of that judgment, the appeal to the Court of Appeal should be dismissed with costs. The judgment of Robison DCJ should be restored.

HIGH COURT OF AUSTRALIA APPLICANT AND COMMONWEALTH OF AUSTRALIA RESPONDENT Spencer v Commonwealth of Australia [2010] HCA 28 1 September 2010 ORDER Special leave to appeal granted. Appeal treated as instituted and heard instanter and allowed with costs. The orders of the Full Court of the Federal Court of Australia made on 24 March 2009 be set aside and in lieu thereof it be ordered that: The appeal be allowed with costs. (b) Orders 2 and 3 of the orders made by Emmett J on 28 August 2008 be set aside and in lieu thereof it be ordered that: The respondent's motion of 26 July 2007 be dismissed. The respondent pay the applicant's costs of the motion. On appeal from the Federal Court of Australia Representation P E King with D H Godwin for the applicant (instructed by McKells) S J Gageler SC, Solicitor-General of the Commonwealth with A Robertson SC and C L Lenehan for the respondent (instructed by Australian Government Solicitor) Interveners R J Meadows QC, Solicitor-General for the State of Western Australia with R M Mitchell SC intervening on behalf of the Attorney-General for the State of Western Australia (instructed by State Solicitor for Western Australia) P M Tate SC, Solicitor-General for the State of Victoria with S P Donaghue intervening on behalf of the Attorney-General for the State of Victoria (instructed by Victorian Government Solicitor) M G Hinton QC, Solicitor-General for the State of South Australia with S A McDonald intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor for South Australia) J K Kirk intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor (NSW)) B W Walker SC with L T Livingston intervening on behalf of NSW Farmers Association (instructed by NSW Farmers Association) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Spencer v Commonwealth of Australia Practice and procedure – Federal Court of Australia – Summary judgment – Application by respondent to dismiss proceedings summarily under s 31A(2) of Federal Court of Australia Act 1976 (Cth) – Applicant claimed New South Wales legislation, said to be enacted pursuant to informal arrangements with Commonwealth, effected an acquisition of property other than on just terms – Applicant intergovernmental agreements, and Commonwealth legislation authorising them, were invalid under s 51(xxxi) of Constitution – Whether Court could be satisfied applicant had no reasonable prospect of successfully prosecuting proceeding – Effect of ICM Agriculture Pty Ltd v The Commonwealth (2009) 240 CLR 140, delivered after decisions below, on prospects of success. sought declarations that Statutes – Construction – Summary judgment – "no reasonable prospect". Words and phrases – "no reasonable prospect". Federal Court of Australia Act 1976 (Cth), s 31A. FRENCH CJ AND GUMMOW J. Introduction On 12 June 2007, Peter Spencer, the owner of a farm at Shannons Flat in New South Wales, commenced proceedings against the Commonwealth in the Federal Court of Australia. Restrictions had been imposed on the clearing of vegetation on his farm by reason of the Native Vegetation Conservation Act 1997 (NSW) ("the NVC Act 1997") and the Native Vegetation Act 2003 (NSW) ("the NV Act 2003")1. He claimed that the restrictions constituted an acquisition of property from him other than on just terms and that the acquisition was made in furtherance of agreements between the State of New South Wales and the Commonwealth. He alleged that the Commonwealth laws which authorised those agreements, the Natural Resources Management (Financial Assistance) Act 1992 (Cth) ("the Financial Assistance Act") and the Natural Heritage Trust of Australia Act 1997 (Cth) ("the Natural Heritage Trust Act")2, were made for the purpose of acquiring property other than on just terms and were invalid by reason of s 51(xxxi) of the Constitution. On 28 August 2008, Emmett J, on the Commonwealth's motion, made an order dismissing the proceedings pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act") on the basis that Mr Spencer had no reasonable prospect of successfully prosecuting the proceedings. His Honour also dismissed a motion for interlocutory injunctive relief filed by Mr Spencer. He held that there was no serious question to be tried as to whether Mr Spencer was entitled to the final relief which he claimed3. Mr Spencer was granted leave by a judge of the Federal Court to appeal from the decision of Emmett J and on 24 March 2009 the Full Court of the Federal Court dismissed his appeal with costs4. He applied for special leave to appeal to this Court. The application was adjourned pending delivery of the judgment of this Court in Arnold v Minister Administering the Water Management Act 20005. On 23 February 2010, Gummow J directed that any proposed further or amended statement of claim that would be relied upon in the 1 Hereafter referred to, collectively, as "the State Acts". 2 Hereafter referred to, collectively, as "the Commonwealth Acts". 3 Spencer v Commonwealth of Australia [2008] FCA 1256 at [212]. 4 Spencer v Commonwealth (2009) 174 FCR 398. (2010) 240 CLR 242; [2010] HCA 3. See [2009] HCATrans 126 at 748-749. Federal Court, if further leave were given there, should be filed and served on or before Friday, 26 February 2010. A proposed further amended statement of claim was filed on 26 February 2010 and a revised version was filed on 26 March 2010. On 12 March 2010, Mr Spencer's application for special leave was referred, by order of Gummow, Heydon and Bell JJ, to an enlarged Full Court of this Court for argument as on appeal. Mr Spencer was given leave to amend his draft notice of appeal and summary of argument. When the referred application for special leave came on for hearing on 16 June 2010, the Court invited counsel for Mr Spencer and for the Commonwealth to address it initially on the question whether the case had been a suitable one for the application of s 31A of the Federal Court Act. After submissions on that question, the Court adjourned the hearing and announced that it would either decide the application and make orders on the basis of the s 31A argument, or list the matter for further hearing at a date in the future. For the reasons that follow, the proceedings in the Federal Court were not appropriate for summary dismissal pursuant to s 31A. The case which Mr Spencer seeks to raise potentially involves important questions of constitutional law. It also involves questions of fact about the existence of an arrangement between the Commonwealth and the State of New South Wales which may justify the invocation of pre-trial processes such as discovery and interrogatories. The possible significance of those questions of fact has become apparent in the light of this Court's judgment in ICM Agriculture Pty Ltd v The Commonwealth6, which had not been delivered when the primary judge and the Full Court delivered their judgments. The statutes and agreements in contention Salient features of the statutes and agreements referred to in the amended statement of claim considered by Emmett J are as follows: Financial Assistance Act. The primary object of this Act is to "facilitate the development and implementation of integrated approaches to natural resources management in Australia"7. The Commonwealth may enter into an agreement with a State to provide financial assistance (by way of grant or otherwise) in respect of projects jointly approved by the relevant Commonwealth and State Ministers or specified in the agreement8. Such (2009) 240 CLR 140; [2009] HCA 51. 7 Financial Assistance Act, s 3. 8 Financial Assistance Act, s 5(1). an agreement must include provisions relating to "the conditions subject to which payments under the agreement are to be made"9. There is provision for repayment by the State, or for deduction of payments made from future payments, where a condition set out in the agreement has not been fulfilled. There is also provision for performance audits10. Natural Heritage Trust Act. This Act established a fund called the Natural Heritage Trust of Australia Reserve11, now known as the Natural Heritage Trust of Australia Account. One of the purposes of the Account is the Natural Vegetation Initiative12, the primary objective of which is "to reverse the long-term decline in the extent and quality of Australia's native vegetation cover" by, inter alia, "conserving remnant native vegetation"13. The Account can be used to provide funds for the grant of financial assistance to a State on conditions to be set out in a written agreement between the Commonwealth and the State14. Agreement between the Commonwealth of Australia and the State of New South Wales, 31 October 1997. This agreement sets out the "roles and responsibilities of the Commonwealth and New South Wales for the delivery of the objectives of the Natural Heritage Trust and any associated programs". One of those programs is "Bushcare: The National Vegetation Initiative". The State of New South Wales undertook as part of that program to "prevent inappropriate native vegetation clearing". It undertook to enact native vegetation conservation legislation. The agreement provided for Commonwealth funding from the Natural Heritage Trust, subject to the agreed objectives defined in Attachment A to the agreement being progressively met. NVC Act 1997. This New South Wales statute imposed controls and restrictions on the clearing of native vegetation from land within the State of New South Wales. Generally speaking, clearing was not permitted unless a development consent was provided and the clearing accorded 9 Financial Assistance Act, s 7(b). 10 Financial Assistance Act, ss 8 and 9. 11 Natural Heritage Trust Act, s 4. 12 Natural Heritage Trust Act, s 8(a). 13 Natural Heritage Trust Act, s 10(a). 14 Natural Heritage Trust Act, s 19(2). with a regional vegetation management plan or a native vegetation code of practice15. Under this agreement, Intergovernmental Agreement on a National Action Plan for Salinity and Water Quality, 3 November 2000. the Commonwealth undertook to provide $700 million over seven years for measures to address salinity and water quality problems, including the implementation of controls on land clearing, particularly in priority catchments or regions. The sum was to be matched by State and Territory Compensation to assist adjustment where financial contributions. property in developing lost would be addressed rights were catchment/regional plans. Although compensation was said, in the agreement, to be the responsibility of the States and Territories, the Commonwealth would consider additional funding over the $700 million for that purpose. Agreement between Commonwealth of Australia and State of New South Wales Relating to the National Action Plan for Salinity and Water Quality, 17 May 2002. Under this agreement, the State of New South regional vegetation to expedite completion of Wales undertook management plans under the NVC Act 1997. The parties agreed to each allocate $198 million for implementation of the National Action Plan for Salinity and Water Quality in New South Wales. They also agreed that compensation to assist adjustment where property rights were lost would be addressed in developing catchment/regional plans and that the Commonwealth would consider making an additional contribution for that purpose. Bilateral Agreement between the Commonwealth of Australia and the State of New South Wales to Deliver the Extension of the Natural Heritage Trust, 14 August 2003. This agreement recited New South Wales' commitment to the "conservation, rehabilitation and protection of significant native vegetation and ecological communities against land clearance and resource degradation". It also made reference to matching funding arrangements between the Commonwealth and the State. There was no reference to compensation for loss of property rights. The agreement recited the intention of the Commonwealth and the State to work as "joint investment partners" with the community and other stakeholders in natural resource management activities. 15 NVC Act 1997, ss 18 and 21. NV Act 2003. This Act repealed the NVC Act 1997 but, like it, provided wide-ranging restrictions on the clearing of native vegetation. The state of the pleading before the primary judge The statement of claim passed through a number of iterations leading up to the amended statement of claim considered by Emmett J in his decision to dismiss the proceeding pursuant to s 31A. Mr Spencer's case, as then pleaded, depended upon his contentions that the Natural Heritage Trust Act, the Financial Assistance Act and the intergovernmental agreements were invalid to the extent that they effected or authorised acquisitions of property from him other than on just terms within the meaning of s 51(xxxi) of the Constitution. The property so acquired was said to include carbon sequestration rights. A carbon sequestration right comprises a right to the "legal, commercial or other benefit … of carbon sequestration by any existing or future tree or forest on the land after 1990". It is so defined by s 87A of the Conveyancing Act 1919 (NSW) and deemed by s 88AB of that Act to be a profit à prendre16. Important elements of the pleading appeared at pars 9.1 to 9.3 of the amended statement of claim. After referring to the Commonwealth Acts and the intergovernmental and bilateral agreements, Mr Spencer alleged: "9.2 Further or alternatively, the said legislative provisions formed part of a scheme or device designed to avoid or overreach the restrictions on the exercise of law making powers by the Respondent under Constitution section 51(xxxi) such that if the said acquisitions of the Applicant's land and/or carbon rights in particular were carried out by the Respondent itself by direct initiative it would be required to provide just compensation to all persons whose property was acquired by such laws, including the Applicant. In the premises the laws and arrangements were made for the purpose of taking property other than on just terms including the property of the Applicant and are invalid pursuant to Constitution section 51(xxxi) and are not otherwise justified by any other provision thereof." 16 See generally Butt, "Carbon sequestration rights – a new interest in land?", (1999) 73 Australian Law Journal 235; Hepburn, "Carbon Rights as New Property: The benefits of statutory verification", (2009) 31 Sydney Law Review 239. He pleaded the passage of the State Acts, that he had been prevented and restricted from clearing native vegetation on his land by reason of those Acts and the refusal of the State of New South Wales to grant permission for such clearing pursuant to particular provisions of those Acts. Those provisions were said to have effected an acquisition of his property. He then alleged: "13. The acquisition of the Applicant's property as described in paragraphs 2 and 10 to 12 of this statement of claim occurred pursuant to or as the result of the operation or effect of a law of the Commonwealth as set out in paragraphs 4 and 5 of this Statement of Claim with respect to the acquisition of property otherwise than on just terms from a person inter alia the Applicant for a purpose in respect of which the Parliament of the Commonwealth has power to make laws …" Mr Spencer alleged that, by reason of the State Acts, his property had been rendered commercially unviable and that the State of New South Wales had offered to purchase the land at market value. He had evidentiary support for the claim that his land was commercially unviable. An affidavit sworn by Mr Spencer, which was before Emmett J, exhibited a letter dated 5 July 2007 from the New South Wales Rural Assistance Authority stating its finding that his farming enterprise was not commercially viable because of his inability to clear native vegetation under the NV Act 2003. The Authority, in accordance with the requirements of the Farmer Exit Assistance component of the New South Wales Government's Native Vegetation Assistance Package, forwarded advice of the Authority's assessment to the Nature Conservation Trust of New South Wales. The decision of the primary judge His Honour dismissed Mr Spencer's claim on the basis of what appeared on the face of the Commonwealth Acts, the State Acts and the intergovernmental agreements referred to in the statement of claim. In coming to his conclusion on the s 31A application, his Honour found: There was a serious question to be tried as to whether the detriment suffered by Mr Spencer resulting from the restrictions imposed by the State Acts constituted an acquisition in respect of his farm. Whether the restrictions imposed by the State Acts were such as to constitute an acquisition might depend upon "detailed evidence of value"17. 17 [2008] FCA 1256 at [149]. Neither of the Commonwealth Acts, by its direct, legal and practical operation, affected any vested proprietary right or cause of action of Mr Spencer in any way18. Neither of the Commonwealth Acts authorised the making of any agreement with a State "requiring the State to acquire property on unjust terms as a condition of receiving a grant of financial assistance from the Commonwealth". The Acts were not laws with respect to the acquisition of property under s 51(xxxi) of the Constitution19. The 1997 agreement20 did not "require or affect or authorise the exercise of any discretion under the State Statutes to refuse development consent for the clearing of native vegetation on any land"21. His Honour did not determine a Commonwealth objection to Mr Spencer's standing to challenge the validity of the Financial Assistance Act and the Natural Heritage Trust Act, which reduced to the proposition that Mr Spencer would be subject to the State Acts (which were not under challenge) even if the Commonwealth Acts were held to be invalid22. His Honour concluded that there was no serious question to be tried or, "[p]utting it the other way", that there was no "reasonable prospect" that Mr Spencer would succeed in obtaining the final relief that he claimed in the proceeding23. In relation to Mr Spencer's claim for interlocutory relief, his Honour also expressed the obiter opinion that the balance of convenience did not warrant the grant of an injunction24. 18 [2008] FCA 1256 at [155]. 19 [2008] FCA 1256 at [158]. 20 See above at [5]. 21 [2008] FCA 1256 at [172]. 22 [2008] FCA 1256 at [178]-[180]. The Commonwealth also argued, in the alternative, that Mr Spencer's claims did not give rise to a "matter" within the meaning of Ch III of the Constitution. 23 [2008] FCA 1256 at [193]. 24 [2008] FCA 1256 at [210]. The decision of the Full Court The Full Court dismissed Mr Spencer's appeal on 24 March 2009, several months before the hearings in this Court of ICM and Arnold. The leading judgment in the Full Court was written by Jagot J, with whom Black CJ and Jacobson J agreed. Her Honour held that Mr Spencer's case faced three fundamental problems which he was unable to overcome. They were25: This Court's decision in Pye v Renshaw26 concerning the operation of s 51(xxxi) and s 96 of the Constitution. The decision of the New South Wales Court of Appeal in Arnold v Minister Administering the Water Management Act 200027 which was indistinguishable from the present case. 3. Mr Spencer's acceptance of the validity of the State Acts which had the consequence that, even if the Commonwealth Acts and intergovernmental agreements were invalid, the NV Act 2003 would continue in force as the source of the prohibitions and restrictions of which he complained. Her Honour rejected the submission that the Commonwealth/State arrangements in this case were a mere device to circumvent s 51(xxxi), which could be impugned on the basis that the Commonwealth could not do indirectly that which it could not do directly28. This, her Honour said, overlooked the operation of s 96 of the Constitution and the clear statement in Pye29. There was no direct legal link between the Commonwealth and State Acts analogous to that in P J Magennis Pty Ltd v The Commonwealth30. 25 (2009) 174 FCR 398 at 406 [15]. 26 (1951) 84 CLR 58; [1951] HCA 8. 27 (2008) 73 NSWLR 196. 28 (2009) 174 FCR 398 at 408 [21]. 29 See (1951) 84 CLR 58 at 83, where the Court rejected the argument that "the Commonwealth is not authorized by s 96 or any other provision of the Constitution to provide money for a State in order that the State may resume land otherwise than on just terms". 30 (1949) 80 CLR 382; [1949] HCA 66. The decisions of the primary judge and of the Full Court of the Federal Court applied s 31A(2) of the Federal Court Act to defeat Mr Spencer's claim. It is necessary to consider the correct approach to the application of that provision. Federal Court Act, s 31A Section 31A(2) of the Federal Court Act provides: "The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if: the first party is defending the proceeding or that part of the proceeding; and the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding." A proceeding need not be "hopeless" or "bound to fail" for it to have no reasonable prospect of success31. Section 31A(1) provides for a party prosecuting a proceeding to obtain summary judgment against a respondent. The section does not limit any other powers that the Court has32. Section 31A was introduced into the Federal Court Act by the Migration Litigation Reform Act 2005 (Cth)33. Despite the reference in the title of the amending Act to migration litigation, the section is of general application. In his Second Reading Speech, the Attorney-General explained the purpose of the amendment34: 31 Federal Court Act, s 31A(3). 32 Federal Court Act, s 31A(4). 33 Similarly worded provisions were introduced into the Judiciary Act 1903 (Cth) (s 25A) and the Federal Magistrates Act 1999 (Cth) (s 17A) by the same amending legislation. 34 Australia, House of Representatives, Parliamentary Debates (Hansard), 10 March 2005 at 3. As to the lack of utility of s 31A in migration cases see White Industries Aust Ltd v Federal Commissioner of Taxation (2007) 160 FCR 298 at 311 [58] per "The bill … strengthens the power of the courts to deal with unmeritorious matters, by broadening the grounds on which federal courts can summarily dispose of unsustainable cases." Referring to the general application of the provision, the Attorney-General described it as "a useful addition to the courts' powers in dealing with any unsustainable case"35. The adoption of the provision for summary judgment reflected in s 31A was recommended in 2000 by the Australian Law Reform Commission ("ALRC")36. Although not initially accepted by the Government37 the recommendation was revisited in a Departmental Strategy Paper in December 2003, inspired in part by "the growth in the volume of unmeritorious litigation in the Federal Court and the [Federal Magistrates Court] over the last few years, particularly in migration cases"38. The Strategy Paper ultimately recommended the adoption of the ALRC's recommendation and was referred to in the Second Reading Speech for the Migration Litigation Reform Bill 200539. The criterion for summary dismissal of proceedings under s 31A was derived from a British precedent, r 24.2 of the Civil Procedure Rules ("the CPR"). That rule introduced the criterion "no real prospect" of succeeding on, or successfully defending, the claim or issue. It implemented a recommendation made in 1996 in the Woolf Report that in England and Wales there be a merging of existing procedures for summary judgment, summary determination of a point 35 Australia, House of Representatives, Parliamentary Debates (Hansard), 10 March 36 Australian Law Reform Commission, Managing Justice: A review of the federal civil justice system, Report No 89, (2000) at 520 [7.212] and Recommendation 94. 37 Attorney-General's Department, Australian Law Reform Commission Report, Managing Justice: A review of the federal civil justice system, Government Response to Recommendations, (2003) at 45. 38 Attorney-General's Department, Federal Civil Justice System Strategy Paper, 39 Australia, House of Representatives, Parliamentary Debates (Hansard), 10 March of law and the striking out of pleadings disclosing no cause of action40. The recommendation was explained in the Woolf Report thus41: "The test for making an order would be that the court considered that a party had no realistic prospect of succeeding at trial on the whole case or on a particular issue. A party seeking to resist such an order would have to show more than a merely arguable case; it would have to be one which he had a real prospect of winning. Exceptionally the court could allow a case or an issue to continue although it did not satisfy this test, if it considered that there was a public interest in the matter being tried." In Three Rivers District Council v Governor and Company of the Bank of England (No 3), Lord Hope of Craighead discussed42 the scope of the inquiry on an application for summary disposition under r 24.2 of the CPR43: "The method by which issues of fact are tried in our courts is well settled. After the normal processes of discovery and interrogatories have been completed, the parties are allowed to lead their evidence so that the trial judge can determine where the truth lies in the light of that evidence. To that rule there are some well-recognised exceptions. For example, it may be clear as a matter of law at the outset that even if a party were to succeed in proving all the facts that he offers to prove he will not be entitled to the remedy that he seeks. In that event a trial of the facts would be a waste of time and money, and it is proper that the action should be taken out of court as soon as possible. In other cases it may be possible to say with confidence before trial that the factual basis for the claim is fanciful because it is entirely without substance. It may be clear beyond question that the statement of facts is contradicted by all the documents or other material on which it is based. The simpler the case the easier it is likely to be to take that view and resort to what is properly called summary judgment. But more complex cases are unlikely to be capable of being resolved in that way without conducting a mini-trial on the documents without discovery and without oral evidence. As Lord Woolf 40 Woolf, Access to Justice: Final Report to the Lord Chancellor on the civil justice system in England and Wales, (1996) at 123 [32]-[33]. 41 Woolf, Access to Justice: Final Report to the Lord Chancellor on the civil justice system in England and Wales, (1996) at 123 [34]. 42 [2003] 2 AC 1 at 260 [94]-[95] and see also Swain v Hillman [2001] 1 All ER 91 at 92-93 per Lord Woolf MR. 43 [2003] 2 AC 1 at 260-261 [95]. said in Swain v Hillman, … that is not the object of the rule. It is designed to deal with cases that are not fit for trial at all." In the Federal Court and in the Court of Appeal of Queensland, the criterion of a "reasonable prospect" of success has been understood in analogous statutory settings to mean a "real" rather than "fanciful" prospect44. This exegesis adds little to the words of s 31A. The section authorises summary disposition of proceedings on a variety of bases under its general rubric. It will apply to the case in which the pleadings disclose no reasonable cause of action and their deficiency is incurable. It will include the case in which there is unanswerable or unanswered evidence of a fact fatal to the pleaded case and any case which might be propounded by permissible amendment. It will include the class of case in the longstanding category of cases which are "frivolous or vexatious or an abuse of process". The application of s 31A is not, in terms, limited to those categories. Accepting that there are a number of ways in which s 31A may be applied to empower the Federal Court to dismiss a proceeding, it is to be distinguished, in its application to deficient pleadings, from rules (such as O 11 r 16 of the Federal Court Rules) which provide for the striking out of pleadings. As Lindgren J said in White Industries Aust Ltd v Federal Commissioner of Taxation45: "evidence may disclose that a person has or may have a 'reasonable cause of action' or 'reasonable prospects of success', yet the person's pleading does not disclose this. In such a case O 11, r 16 empowers the Court to strike out the pleading but … s 31A(2) would not empower the Court to give judgment for the respondent against the applicant. A failure after ample opportunity to plead a reasonable cause of action may suggest that none exists and therefore that the applicant has no reasonable prospects of success, but the existence of a reasonable cause of action and the pleading of a reasonable cause of action remain distinct concepts." The exercise of powers to summarily terminate proceedings must always be attended with caution. That is so whether such disposition is sought on the basis that the pleadings fail to disclose a reasonable cause of action46 or on the 44 White Industries Aust Ltd v Federal Commissioner of Taxation (2007) 160 FCR 298 at 312 [59] and cases there reviewed; Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232 at 235 per Williams JA. 45 (2007) 160 FCR 298 at 309 [47]. See also Imobilari Pty Ltd v Opes Prime Stockbroking Ltd (2008) 252 ALR 41. 46 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 128-130 per Barwick CJ; [1964] HCA 69. basis that the action is frivolous or vexatious or an abuse of process47. The same applies where such a disposition is sought in a summary judgment application supported by evidence. As to the latter, this Court in Fancourt v Mercantile Credits Ltd said48: "The power to order summary or final judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried". More recently, in Batistatos v Roads and Traffic Authority (NSW)49 Gleeson CJ, Gummow, Hayne and Crennan JJ repeated a statement by Gaudron, McHugh, Gummow and Hayne JJ in Agar v Hyde50 which included the following: "Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways51, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way." There would seem to be little distinction between those approaches and the requirement of a "real" as distinct from "fanciful" prospect of success contemplated by s 31A52. That proposition, however, is not inconsistent with the 47 Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91 per Dixon J; [1949] HCA 1. 48 (1983) 154 CLR 87 at 99; [1983] HCA 25. See also Webster v Lampard (1993) 177 CLR 598 at 602-603 per Mason CJ, Deane and Dawson JJ; [1993] HCA 57. 49 (2006) 226 CLR 256 at 275 [46]; [2006] HCA 27. 50 (2000) 201 CLR 552 at 575-576 [57]; [2000] HCA 41. 51 Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91 per Dixon J; General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 130 per Barwick CJ. 52 In A v Essex County Council [2010] 3 WLR 509, the criterion of "real prospect of success" was variously equated to whether the plaintiff "could succeed at a trial", whether there was a "triable issue" and whether there was the "least doubt": at 523 [44] per Lord Clarke of Stone-cum-Ebony JSC, 541 [119] per Baroness Hale of Richmond JSC, 544 [133] per Lord Brown of Eaton-under-Heywood JSC and 552 [163] per Lord Kerr of Tonaghmore JSC. proposition that the criterion in s 31A may be satisfied upon grounds wider than those contained in pre-existing Rules of Court authorising summary dispositions. Section 31A(2) requires a practical judgment by the Federal Court as to whether the applicant has more than a "fanciful" prospect of success. That may be a judgment of law or of fact, or of mixed law and fact. Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the Court has formed the view that the applicant is unlikely to succeed on the factual issue. Where the success of a proceeding depends upon propositions of law apparently precluded by existing authority, that may not always be the end of the matter. Existing authority may be overruled, qualified or further explained. Summary processes must not be used to stultify the development of the law. But where the success of proceedings is critically dependent upon a proposition of law which would contradict a binding decision of this Court, the court hearing the application under s 31A could justifiably conclude that the proceedings had no reasonable prospect of success. Where an application under s 31A requires consideration of apparently complex questions of fact, then the caution uttered by Lord Hope is relevant53. The importance of those considerations is amplified if the case involves resolution of issues of law and fact, or mixed law and fact. The present case was one which involved important questions of public and constitutional law and potentially complex questions of fact. Issues of law and fact to be determined Mr Spencer alleged in his amended statement of claim the existence of a scheme or device to which the Commonwealth and the State of New South Wales were parties and which was designed to avoid the "just terms" constraint on the exercise of the legislative power of the Commonwealth under s 51(xxxi) of the Constitution. The Commonwealth laws and "arrangements" were said to have been made "for the purpose of taking property other than on just terms including the property of the Applicant". In ICM reference was made to the possibility of grants of financial assistance pursuant to s 96 of the Constitution supported by informal arrangements between governments setting out the conditions upon which such grants were made54. An informal arrangement, referred to in Gilbert v Western 53 See above at [21]. 54 (2009) 240 CLR 140 at 168 [37]-[38] per French CJ, Gummow and Crennan JJ. Australia55, explained the alteration, after judgment had been given in Magennis, of a New South Wales statute under consideration in the latter case. That alteration "decoupled" the Commonwealth/State agreement, which had supported the finding of invalidity in Magennis. The alteration had the result that the relevant Commonwealth legislation survived challenge in Pye. the State statute from In the joint judgment of French CJ, Gummow and Crennan JJ in ICM, their Honours observed, of the Ministerial correspondence disclosed in Gilbert, that56: "The assumption being made was that the terms and conditions attached to a s 96 grant may sufficiently be disclosed in an informal fashion, falling short of an intergovernmental agreement of the kind seen in this case in the Funding Agreement. It is unnecessary to consider whether that reflected a correct understanding of s 96 and of its relation to s 61 of the Constitution." Their Honours further observed57: "that the legislative power of the Commonwealth conferred by ss 96 and 51(xxxvi) does not extend to the grant of financial assistance to a State on terms and conditions requiring the State to acquire property on other than just terms." The question that arises is whether Mr Spencer's pleading left open the possibility, requiring factual exploration and possible amendment, of an informal arrangement between the Commonwealth and the State of New South Wales conditioning the relevant Commonwealth funding upon acquisition by the State of Mr Spencer's property rights on other than just terms. On the face of the pleading before Emmett J and the Full Court that possibility was open, even if not fully formulated or adequately particularised. Given the existence of the Commonwealth Acts and the relevant intergovernmental agreements, it is likely that there are negotiations and communications between the Commonwealth and the State of New South Wales, records of which might flesh out or cast light upon the Commonwealth and State funding arrangements. Documentary and electronic records of such negotiations and the practical operation of 55 (1962) 107 CLR 494 at 505 per Dixon CJ, Kitto and Windeyer JJ; [1962] HCA 7. 56 (2009) 240 CLR 140 at 168 [38]. 57 (2009) 240 CLR 140 at 170 [46]. communications may be amenable to discovery and ancillary processes in the Federal Court which could be invoked by Mr Spencer. It is not necessary for present purposes to determine whether a law of the Commonwealth, providing for grants to be made to a State under s 96 of the Constitution, or for agreements under which such grants could be made, might be characterised by reference to informal arrangements between the Commonwealth and the State as a law with respect to the acquisition of property. There are complex and difficult questions of both law and fact raised by that possibility, which was at least open on the amended statement of claim before the primary judge. By his proposed further amended statement of claim filed on 26 March 2010, Mr Spencer alleges, after pleading the intergovernmental agreements: "34. Each of the said agreements … or one or more of them were unconstitutional agreements in that by the terms thereof the [State of New South Wales] has expressly or impliedly agreed to make and adopt measures with respect to the acquisition of property of inter alia consideration of the payment of moneys by the [Commonwealth] to the Applicant otherwise than on terms just Further or alternatively the said agreements and the payments and receipt of benefits thereunder from inter alia the Applicant comprised a joint venture between the [Commonwealth and the State of New South Wales] for the acquisition of property other than on just terms. the said agreements and/or Pursuant the [Commonwealth] and/or in furtherance of the joint venture at the request of the [Commonwealth] the [State of New South Wales] made legislative and other measures which had the effect or consequence of acquiring the Plaintiff's land without just terms." induced by In fairness to the primary judge and the Full Court, it must be acknowledged that their decisions were made before this Court delivered judgment in ICM. In the light of ICM, and even the current rather stunted version of Mr Spencer's pleading in relation to "scheme or device", it could not be said, for the purposes of s 31A(2), that he has no reasonable prospect of successfully prosecuting the proceedings. The pleading in that respect raised the possibility of particularisation and/or amendment. That is not to say that, even on the proposed further amended statement of claim, he has a strong case. It is sufficient to say that it is not fanciful, and therefore not a case which he has no reasonable prospect of successfully prosecuting. Conclusion For the preceding reasons the following orders should be made: Special leave to appeal granted. Appeal treated as instituted and heard instanter and allowed with costs. The orders of the Full Court of the Federal Court of Australia made on 24 March 2009 be set aside and in lieu thereof it be ordered that: The appeal be allowed with costs. (b) Orders 2 and 3 of the orders made by Emmett J on 28 August 2008 be set aside and in lieu thereof it be ordered that: The respondent's motion of 26 July 2007 be dismissed. The respondent pay the applicant's costs of the motion. HAYNE, CRENNAN, KIEFEL AND BELL JJ. We agree that special leave to appeal should be granted, the appeal treated as heard instanter and allowed with costs, and consequential orders made in the terms proposed by French CJ and Gummow J. We write separately principally because of the issues that are presented by the application of s 31A of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act"). It is necessary to begin, however, by saying something about the proceedings which give rise to the application to this Court. The proceedings The applicant instituted proceedings in the Federal Court of Australia claiming, amongst other relief, declarations that each of the Natural Resources Management (Financial Assistance) Act 1992 (Cth) and the Natural Heritage Trust of Australia Act 1997 (Cth) was invalid to the extent to which it effected or authorised the acquisition of certain property from him other than on just terms within the meaning of s 51(xxxi) of the Constitution. He further claimed declarations that certain intergovernmental agreements were likewise invalid. At first instance, Emmett J held58 that the applicant had no reasonable prospect of obtaining any of the relief which he claimed against the Commonwealth, and granted the Commonwealth's motion that the proceeding be summarily dismissed pursuant to s 31A of the Federal Court Act. The Full Court of the Federal Court (Black CJ, Jacobson and Jagot JJ) dismissed59 the applicant's appeal against the order for summary dismissal. A critical step in the reasoning at first instance60, and in the Full Court61, was that the applicant could identify no Commonwealth law with respect to an acquisition of property because no law of the Commonwealth required or permitted the imposition of a term or condition of a grant of financial assistance under s 96 of the Constitution binding the State to acquire property otherwise than on just terms. Whether that proposition is right need not be, and is not, examined in these reasons. 58 Spencer v Commonwealth of Australia [2008] FCA 1256. 59 Spencer v Commonwealth (2009) 174 FCR 398. 60 [2008] FCA 1256 at [154]-[155]. 61 (2009) 174 FCR 398 at 405 [14], 413 [30]-[31]. Having regard to this Court's decision in ICM Agriculture Pty Ltd v The Commonwealth62, delivered after the Full Court's decision in this matter, it cannot now be held that the applicant "has no reasonable prospect of successfully prosecuting the proceeding"63. Whether, or how, ss 51(xxxi), 61 and 96 intersect where there is an informal arrangement or understanding between the Commonwealth and a State, falling short of an intergovernmental agreement, was expressly left as an open question by three members of the majority in ICM64. The applicant's claims The applicant's statement of claim was amended several times in the Federal Court, and he now proposes further amendments to his pleading to take account of what was decided in ICM. The pleading, in all its forms, both past and proposed, lacks precision and specificity. Whether, for that reason, it is properly described as embarrassing was not examined in argument and is not considered in these reasons. The Commonwealth's motion was not directed to the adequacy of the applicant's pleading; the Commonwealth sought summary dismissal of the proceeding. The general nature of the applicant's complaint can be discerned from the several versions of his statement of claim that have been filed, but the legal basis for his complaint is not so easily identified. The general nature of the complaint may be described as follows. The applicant claims that some or all of his interests in freehold and leasehold farming land were acquired, other than on just terms, when prohibitions or restrictions on his clearing native vegetation on the land were imposed under the Native Vegetation Conservation Act 1997 (NSW) and, later, the Native Vegetation Act 2003 (NSW). More particularly, he claims that the rights to the carbon sequestration and carbon abatement effects that are provided by the existing vegetation on the land have been acquired. He further claims that the acquisition has come about as a result, or through the implementation, of the two Commonwealth Acts whose validity he challenges, and what he has variously described as "a cooperative statutory and administrative framework, 62 (2009) 240 CLR 140; [2009] HCA 51. 63 Federal Court of Australia Act 1976 (Cth), s 31A(2)(b). 64 (2009) 240 CLR 140 at 168 [38] per French CJ, Gummow and Crennan JJ. arrangement or partnership between the [Commonwealth] and the State of New South Wales in performance of the [Commonwealth's] commitments under [the] United Nations Framework Convention [on] Climate Change", some express or implied agreement between the Commonwealth and the State, or a "joint venture" between the Commonwealth and the State. He alleges that between 1997 and 2003, pursuant to the Natural Resources Management (Financial Assistance) Act 1992 and the Natural Heritage Trust of Australia Act 1997, several bilateral agreements were made between the Commonwealth and New South Wales, and an intergovernmental agreement made between the Commonwealth and the States and Territories to establish a national framework for management and use of land in Australia. In one version of his statement of claim, the applicant alleged that the impugned Commonwealth Acts formed part of what was described as "a scheme or device designed to avoid or overreach the restrictions on the exercise of law making powers … under … s 51(xxxi)". Although expressed in different ways, this kind of allegation might be thought to underpin the applicant's claims for declarations of invalidity. It appears to be an idea of scheme or device65 that finds reflection, perhaps its foundation or elaboration, in the repeated use in the applicant's pleading of terms like "partnership" and "joint venture", as well as the references to express or implied agreements. But whether or not that is so, it is evident that the applicant seeks to mount a case having two principal elements. First, that there has been some arrangement or understanding made or reached between the Commonwealth and New South Wales beyond what appears in the relevant Acts and intergovernmental agreements. Second, that by or under that arrangement or understanding, some relevant connection can be drawn between the Commonwealth making a grant or grants of money to New South Wales under s 96 of the Constitution and the State exercising its legislative and other powers in the manner, and with the consequences, of which the applicant complains. The issues presented by the applicant's claims The Commonwealth does not admit that there is any scheme or device; it does not admit that there is any relevant arrangement or understanding beyond what appears in the relevant intergovernmental agreements and applicable 65 Cf ICM Agriculture Pty Ltd v The Commonwealth (2009) 140 CLR 140 at 169-170 [44] per French CJ, Gummow and Crennan JJ, 199 [139] per Hayne, Kiefel and legislation; it does not admit that there is any partnership or joint venture with the State. Two points follow. First, there is a factual question presented by the applicant's allegations. Is there any arrangement or understanding beyond what appears in the relevant intergovernmental agreements and applicable legislation? Second, if there is, what is its constitutional relevance? The decisions at first instance, and in the Full Court, proceeded from the premise that the existence of any arrangement or understanding of the kind apparently relied on by the applicant was constitutionally irrelevant. But, as has been pointed out, that question was expressly reserved for future consideration by three members of the majority in ICM66, and cannot be regarded as foreclosed from argument. It is neither necessary nor appropriate to examine the strength of the argument. It is enough to say that neither the factual question that has been identified, nor the associated constitutional question, can or should be answered at this stage of the proceeding. The factual question depends upon what evidence is adduced. What evidence is adduced may well be affected by what is revealed by further interlocutory processes in the proceeding. The constitutional question may be affected by, even depend upon, the resolution of the factual question. Even if it is not directly affected by what particular facts are found, it is not a question suitable for determination on a summary judgment application. Summary judgment – Federal Court Act, s 31A This was not a case in which the Federal Court could be satisfied that the the applicant had "no reasonable prospect of successfully prosecuting proceeding"67. Consideration of the operation and application of s 31A of the Federal Court Act must68 begin from consideration of its text. So far as relevant to this matter, s 31A provides: 66 (2009) 240 CLR 140 at 168 [38] per French CJ, Gummow and Crennan JJ. 67 Federal Court Act, s 31A(2)(b). 68 See, for example, Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vict) (2001) 207 CLR 72 at 77 [9], 89 [46]; [2001] HCA 49; The Commonwealth v Yarmirr (2001) 208 CLR 1 at 37-39 [11]-[15], 111-112 [249]; [2001] HCA 56; Stevens v Kabushiki Kaisha Sony Computer Entertainment (2005) 224 CLR 193 at 206 [30], 240-241 [167]-[168]; [2005] HCA 58; Weiss v (Footnote continues on next page) "(2) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if: the first party is defending the proceeding or that part of the proceeding; and the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding. For the purposes of this section, a defence or a proceeding or part of a proceeding need not be: hopeless; or bound to fail; for it to have no reasonable prospect of success. This section does not limit any powers that the Court has apart from this section." Two aspects of these provisions are to be noted. First, the central idea about which the provisions pivot is "no reasonable prospect" (emphasis added). The choice of the word "reasonable" is important. If s 31A is to be seen as deriving from r 24.2 of the Civil Procedure Rules 1998 of England and Wales, its provisions underwent an important change in the course of their translation from that jurisdiction to this. The English rule speaks of "no real prospect"; s 31A speaks of "no reasonable prospect". The two phrases convey very different meanings. Second, effect must be given to the negative admonition in sub-s (3) that a defence, a proceeding, or a part of a proceeding may be found to have no The Queen (2005) 224 CLR 300 at 312-313 [31]; [2005] HCA 81; Stingel v Clark (2006) 226 CLR 442 at 458 [26]; [2006] HCA 37; AK v Western Australia (2008) 232 CLR 438 at 455 [52]-[53]; [2008] HCA 8; Gassy v The Queen (2008) 236 CLR 293 at 300 [16]; [2008] HCA 18; Cesan v The Queen (2008) 236 CLR 358 at 394 [126]; [2008] HCA 52; CTM v The Queen (2008) 236 CLR 440 at 446 [5]; [2008] HCA 25. reasonable prospect of successful prosecution even if it cannot be said that it is "hopeless" or "bound to fail". It will be necessary to examine further the notion of "no reasonable prospect". But before undertaking that task, it is important to begin by recognising that the combined effect of sub-ss (2) and (3) is that the enquiry required in this case is whether there is a "reasonable" prospect of prosecuting the proceeding, not an enquiry directed to whether a certain and concluded determination could be made that the proceeding would necessarily fail. In this respect, s 31A departs radically from the basis upon which earlier forms of provision permitting the entry of summary judgment have been understood and administered. Those earlier provisions were understood as requiring formation of a certain and concluded determination that a proceeding would necessarily fail. That this was the basis of earlier decisions may be illustrated by reference to two decisions of this Court often cited in connection with questions of summary Dey v Victorian Railways judgment: Commissioners69 and General Steel Industries Inc v Commissioner for Railways (NSW)70. In Dey, the defendants moved for summary judgment on the grounds that the action was frivolous, vexatious and an abuse of process. In a passage often later cited, Dixon J said71 that "[a] case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury". What Dixon J meant by "very clear" was identified by his observation72 that "once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process" (emphasis added). And there would be a "real question" unless the defendant could "show that it was so certain that [the question] must be answered in the [defendant's] favour that it would amount to an abuse of the process of the court to allow the action to go forward for determination according to the appointed modes of procedure"73 (emphasis added). The test identified by 69 (1949) 78 CLR 62; [1949] HCA 1. 70 (1964) 112 CLR 125; [1964] HCA 69. 71 (1949) 78 CLR 62 at 91. 72 (1949) 78 CLR 62 at 91. 73 (1949) 78 CLR 62 at 90. Dixon J in Dey can thus be seen to be a test requiring certain demonstration of the outcome of the litigation, not an assessment of the prospect of its success. In General Steel Industries, Barwick CJ pointed out74 that previous decisions about summary termination of actions on the motion of a defendant had been given in cases in which the so-called "inherent" jurisdiction of a court to protect itself and its processes from abuse had been invoked, and in cases where the defendant had relied upon a particular rule of court permitting the court to strike out pleadings or dismiss an action on it being shown that a pleading "does not disclose a reasonable cause of action"75 or the action "being shown by the pleadings to be frivolous or vexatious"76. The material available to the court might differ, depending upon which power was invoked, but all the cases emphasised the need for "exceptional caution" in exercising a power to dismiss an action summarily. As Barwick CJ also pointed out in General Steel Industries77, the test to be applied was expressed in many different ways, but in the end amounted to different ways of saying78 "that the case of the plaintiff is so clearly untenable that it cannot possibly succeed" (emphasis added). As that formulation shows, the test to be applied was one of demonstrated certainty of outcome. Because s 31A(3) provides that certainty of failure ("hopeless" or "bound to fail") need not be demonstrated in order to show that a plaintiff has no reasonable prospect of prosecuting an action, it is evident that s 31A is to be understood as requiring a different enquiry from that which had to be made under earlier procedural regimes. It follows, of course, that it is dangerous to seek to elucidate the meaning of the statutory expression "no reasonable prospect of successfully prosecuting the proceeding" by reference to what is said in those earlier cases. Likewise, it is dangerous to apply directly what has been said in the United Kingdom about the application of a test of "no real prospect" or what has been said in United States decisions about summary judgment. The United 74 (1964) 112 CLR 125 at 129. 75 High Court Rules 1952 (Cth), O 26, r 18(1). 76 High Court Rules 1952, O 26, r 18(2). 77 (1964) 112 CLR 125 at 129. 78 (1964) 112 CLR 125 at 130. Kingdom cases are directed to a different test. The controversies in the United States about what is sufficient to resist a motion for summary judgment, reflected in the recent decisions of the Supreme Court of the United States in Ashcroft v Iqbal79 and Bell Atlantic Corp v Twombly80 and in that Court's earlier decision in Conley v Gibson81, turn upon the requirements of the Federal Rules of Civil Procedure applied to a system of "notice" pleading. The notion of what is not a "plausible" claim, discussed in Iqbal and Twombly, may in some cases overlap, but does not coincide, with the notion of "no reasonable prospect". How then should the expression "no reasonable prospect" be understood? No paraphrase of the expression can be adopted as a sufficient explanation of its operation, let alone definition of its content. Nor can the expression usefully be understood by the creation of some antinomy intended to capture most or all of the cases in which it cannot be said that there is "no reasonable prospect". The judicial creation of a lexicon of words or phrases intended to capture the operation of a particular statutory phrase like "no reasonable prospect" is to be avoided. Consideration of the difficulties that bedevilled the proviso to common form criminal appeal statutes82, as a result of judicial glossing of the relevant statutory expression, provides the clearest example of the dangers that attend any such attempt. In many cases where a plaintiff has no reasonable prospect of prosecuting a proceeding, the proceeding could be described (with or without the addition of intensifying epithets like "clearly", "manifestly" or "obviously") as "frivolous", "untenable", "groundless" or "faulty". But none of those expressions (alone or in combination) should be understood as providing a sufficient chart of the metes and bounds of the power given by s 31A. Nor can the content of the word "reasonable", in the phrase "no reasonable prospect", be sufficiently, let alone completely, illuminated by drawing some contrast with what would be a "frivolous", "untenable", "groundless" or "faulty" claim. Rather, full weight must be given to the expression as a whole. The Federal Court may exercise power under s 31A if, and only if, satisfied that there is "no reasonable prospect" of success. Of course, it may readily be accepted that 79 173 L Ed 2d 868 (2009). 82 Weiss (2005) 224 CLR 300 at 312-318 [31]-[47]. the power to dismiss an action summarily is not to be exercised lightly. But the elucidation of what amounts to "no reasonable prospect" can best proceed in the same way as content has been given, through a succession of decided cases, to other generally expressed statutory phrases, such as the phrase "just and equitable" when it is used to identify a ground for winding up a company. At this point in the development of the understanding of the expression and its application, it is sufficient, but important, to emphasise that the evident legislative purpose revealed by the text of the provision will be defeated if its application is read as confined to cases of a kind which fell within earlier, different, procedural regimes. HEYDON J. On 28 August 2008, when Emmett J dismissed the applicant's proceedings, Pye v Renshaw83 was thought to be an obstacle to their success. The same position applied on 24 March 2009, when the Full Court of the Federal Court of Australia dismissed an appeal against the orders of Emmett J. But on 9 December 2009, ICM Agriculture Pty Ltd v The Commonwealth84 was decided. A majority of this Court concluded that, notwithstanding Pye v Renshaw, the legislative power of the Commonwealth conferred by s 96 and s 51(xxxvi) of the Constitution does not extend to the grant of financial assistance to a State on terms and conditions requiring the State to acquire property on other than just terms85. Further, three members of the Court placed a question mark over the validity of legislation relating to an "informal arrangement" providing for Commonwealth funding to a State if it acquires property on unjust terms86. The applicant has pleaded facts which might attract a conclusion favourable to him if that question is answered against validity. Discovery of documents might assist him to establish those pleaded facts. Emmett J acted pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth). Whatever the construction of that provision, it is clear that had the courts below been aware – which obviously they could not have been – of what was to be said in ICM Agriculture Pty Ltd v The Commonwealth, they would not have viewed an order under s 31A(2) dismissing proceedings as appropriate. That is a sufficient reason for making order 1, order 2 and order 3(a) and (b)(i) of the orders which the other members of the Court wish to make. Contrary to the opinion of other Justices, it is not necessary to consider the correct approach to s 31A. If it were, it would also be necessary to hear submissions from the parties on the subject. Apart from some remarks at the end of the applicant's oral reply on the subject of whether a s 31A order was interlocutory, and two tentative sentences about the width of the power conferred by s 31A, the parties have not advanced any submissions about it. It is therefore both unnecessary and undesirable to say anything on that subject. I also favour order 3(b)(ii) of the orders favoured by other members of the Court for the following reasons. That is the order which would normally be made, unless there were some reason for an order less generous from the applicant's point of view. In this Court the applicant has consistently sought that order – in his draft Notice of Appeal, in his revised draft Notice of Appeal, in his written submissions, and in his oral reply. The respondent has consistently 83 (1951) 84 CLR 58; [1951] HCA 8. 84 (2009) 240 CLR 140; [2009] HCA 51. 85 (2009) 240 CLR 140 at 165-170 [31]-[46] and 206 [174]. 86 (2009) 240 CLR 140 at 168 [37]-[38]. contended that the application for special leave should be refused with costs, or, if the special leave application were granted, that the appeal should be dismissed with costs. The respondent never addressed the question of what costs order in relation to the Notice of Motion of 26 July 2007 should be made in the event, which has now come to pass, that special leave is granted and the appeal allowed.

HIGH COURT OF AUSTRALIA APPELLANTS AND LACHLAN ELDER REALTY PTY LIMITED RESPONDENT Butcher v Lachlan Elder Realty Pty Limited [2004] HCA 60 2 December 2004 ORDER 1. Appeal and cross-appeal dismissed. 2. Appellants to pay respondent's costs. 3. Renewed application by Robert Edward Harkins for special leave to appeal from the judgment of the Court of Appeal of the Supreme Court of New South Wales made on 28 August 2002 dismissed. On appeal from the Supreme Court of New South Wales Representation: R J Ellicott QC with G A Moore for the appellants (instructed by Williams Woolf & Zuur) L G Foster SC with I R Pike for the respondent (instructed by Murray Stewart & Fogarty) J McC Ireland QC seeking leave to appear on behalf of Robert Edward Harkins Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Butcher v Lachlan Elder Realty Pty Limited Trade practices − Misleading or deceptive conduct − Sale of waterfront property − Real estate agent published brochure containing survey diagram obtained from vendor's solicitors − Survey diagram alleged to be inaccurate − Brochure contained a disclaimer by the real estate agent as to the reliability of information from other sources − Purchasers intended to develop property in the survey diagram − Whether real estate agent made a reliance on representation − Whether real estate agent engaged in misleading or deceptive conduct or conduct "likely to mislead or deceive". Words and phrases – "misleading or deceptive conduct", "representation". Fair Trading Act 1987 (NSW), s 42. Trade Practices Act 1974 (Cth), ss 52, 82. GLEESON CJ, HAYNE AND HEYDON JJ. On 18 February 1997, the appellants, Jeffrey Gordon Butcher and Judith Kay Radford ("the purchasers"), agreed to buy 10 Rednal Street, Mona Vale ("the Rednal land") from its then registered proprietor, Robert Edward Harkins ("the vendor"). The Rednal land was at all material times property under the Real Property Act 1900 (NSW). It was lot 14 in Deposited Plan 9500, evidenced by Folio Identifier 14/9500. The Rednal land was a valuable waterfront property on the southern shore of Pittwater, a large bay to the north of Sydney separated from the ocean by a narrow peninsula. The respondent real estate agent, Lachlan Elder Realty Pty Ltd ("the agent"), acted for the vendor in that sale. The purchasers sued the agent for damages for misleading or deceptive conduct. The purchasers claimed (among other things) that a brochure issued by the agent was misleading because it misrepresented the location of the boundary of the Rednal land abutting Pittwater as being on the Pittwater side of a swimming pool on the land. In the Supreme Court of New South Wales, Austin J dismissed that claim1. The Court of Appeal (Handley, Beazley and Hodgson JJA) dismissed an appeal2. By special leave, the purchasers appealed to this Court. Background In 1996, the purchasers were living as husband and wife at 41 Calvert Parade, Newport. Newport, like Mona Vale, is a suburb in a prosperous area of Sydney known as the Northern Beaches area, close to the sea. In August 1996, Mr Butcher met his accountant to formulate an investment plan in order to ensure long-term financial security for his family. As a result, the purchasers decided to use the equity in 41 Calvert Parade as security to finance investments in land and shares. They sold their motor yacht in order to reduce their existing debt to a negligible level and to complete When the renovations were major renovations to 41 Calvert Parade. substantially complete, Mr Butcher began making inquiries with real estate agents in the Northern Beaches area about the availability of potential investment properties at a price between about $800,000 and $1 million. His main plan was to acquire a property suitable for immediate redevelopment and on-selling, while 1 Butcher v Harkins [2001] NSWSC 15. 2 Harkins v Butcher (2002) 55 NSWLR 558. Hayne continuing to live at 41 Calvert Parade. He had an alternative plan – selling 41 Calvert Parade and renovating a newly purchased property after moving in. During December 1996 and January 1997, Mr Spring, an employee of the agent, showed the purchasers various properties which did not meet their requirements. On 6 February 1997, Mr Spring showed the purchasers the Rednal land. He gave them a glossy coloured brochure. He said words to the effect: "These are all the details for the property. You have a full coloured brochure on the front and all the council outgoings land survey etc on the rear. That is everything you need to know." The trial judge found that, in context, these words conveyed no more than that the brochure "was a very helpful document which conveniently put together in a single place the answer to some questions that purchasers typically asked"3. The brochure consisted of a single sheet of paper with material on each side. The front consisted mainly of three coloured photographs, but there was some writing as follows. The page was headed "Mona Vale". Most of the bottom right hand quarter contained the words "10 REDNAL STREET NORTH EAST FACING DEEP WATERFRONT". At the bottom left appeared a reference to L J Hooker, Mona Vale (the agent's business name). In the left hand margin in small black type against a white background appeared the words "Produced by Williams Design Associates" and a telephone number. Across the bottom in slightly larger black type against a white background appeared the words: "Lachlan Elder Realty Pty Ltd ACN 002 332 247. All information contained herein is gathered from sources we believe to be reliable. However we cannot guarantee it's [sic] accuracy and interested persons should rely on their own enquiries." The bulk of the front of the brochure consisted of a photograph of the rear of the land, taken from Pittwater, showing boats moored at a jetty, then a lawn, then a metal picket fence with a gate, then the house. Two smaller photographs were inset on the bottom left quarter of the page. The second photograph, taken from the verandah of the house, showed part of a swimming pool, lawn, the metal picket fence and gate, more lawn, the jetty and Pittwater. The third photograph was of a large billiard room. The photographs conveyed an impression of some opulence. 3 Butcher v Harkins [2001] NSWSC 15 at [17]. Hayne On the back of the brochure, which was headed "10 Rednal Street Mona Vale", there appeared the following prose. In the top left quarter the document said: "Set in the best position in Rednal Street, closer to the water than any other home, your privacy is guaranteed. Featuring a grand full brick residence with high ceilings, full size billiard room and a large outdoor entertaining balcony lapping up the year round sunshine and sensational views. Offering scope for renovation or redecoration, rarely do you find deep waterfronts with six car garaging, jetty and pontoon with flexible berthing arrangements for two large vessels, visitor boats and runabouts, easy access, low maintenance grounds and level lawns to the waters [sic] edge. A must see for the serious boating enthusiast." The bottom half of the page was headed "North East Facing Deep Waterfront" and gave details of land area, council rates, water rates and permissive occupancy fee. It also gave the place and date (18 February 1997) of an auction and the contact number of Mr Lachlan Elder, a director and the principal of the agent. The third last line contained further references to L J Hooker Mona Vale. The last two lines were set in black type smaller than the equivalent material at the bottom of the front of the brochure but against a white background: "All information contained herein is gathered from sources we deem to be reliable. However we cannot guarantee it's [sic] accuracy and interested persons should rely on their own enquiries. Williams Design Associates The top right hand quarter of the page showed a survey diagram. Although it was partly illegible, it showed dimensions for the southern, western and eastern sides. It also showed, starting at the south end of the block and moving north towards Pittwater, a garage, a brick house, a pool, a line marked "MHWM" and a "reclaimed area". The trial judge found that a reader who compared the diagram with the photographs on the other side would conclude that the "MHWM" line was approximately the line of the fence. The number "14" was plainly visible, and the adjoining blocks were plainly numbered "13" and "15". The diagram bore other dimensions, and was dated "4.8.80". To anticipate events, on 17 February 1997 the solicitor for the purchasers received a draft contract for the Rednal land. Annexed to it was a survey by Hayne Mr F W Hannagan dated 4 August 1980. The survey had annexed to it a survey diagram identical to that appearing on the reverse of the brochure. The provenance of the survey diagram in relation to the brochure was that the vendor provided the survey report to his solicitors for inclusion in the draft contract; the agent obtained a copy of the draft contract from the solicitors; and the agent took its reproduction of the diagram from the survey report included with the draft contract. As a result of their visit to the Rednal land on 6 February 1997, the purchasers became interested in it. On 14 February 1997, accompanied by an architectural designer whom they had retained, Paul Gillmer, they inspected the Rednal land again, this time with Mr Elder. The trial judge found that on that occasion Mr Butcher told Mr Elder that he planned "to turn the pool around and have it [placed] by the side boundary", in order to "open up space for entertaining"4. Mr Elder said that the pool would "encroach [on] the mean high water mark". Mr Gillmer advised Mr Butcher that "the idea of 'moving' the pool was feasible, based on the position of the high water mark indicated by Mr Butcher, in reliance on the diagram in the brochure". On 15 February 1997, Mr Butcher inspected the Rednal land with a builder, Scott Hindmarch. He was shown the brochure by Mr Butcher. After taking advice from Mr Hindmarch, the purchasers formed the view that they could carry out the proposed restructuring of the swimming pool area, provided that the development did not go beyond the side boundaries or the mean high water mark. After their solicitor received the draft contract on 17 February 1997, the purchasers decided to bid at the auction. On 18 February 1997, they did so successfully and signed a contract to buy the Rednal land. The trial judge found that they would not have done so if they had known that the mean high water mark traversed the swimming pool5. They bid because they thought their plans for the swimming pool area could be achieved. They thought that because of the advice of Mr Gillmer and Mr Hindmarch. That advice relied on the mean high water mark being where Mr Butcher indicated, and he relied on the brochure. The contract price was $1.36 million. The deposit was $272,000: $200,000 was payable immediately, and the balance was payable on the date the purchasers exchanged contracts for the sale of 41 Calvert Parade (or on completion, if that 4 Butcher v Harkins [2001] NSWSC 15 at [26]. 5 Butcher v Harkins [2001] NSWSC 15 at [31], [67]. Hayne were earlier). By this time, the purchasers had decided to follow their alternative plan – to sell 41 Calvert Parade and renovate the Rednal land, rather than speedily redeveloping and reselling the Rednal land while remaining at Calvert Parade. But they still intended, after they moved into the Rednal land, to redevelop and resell it. The agent advised the purchasers that they could hope for at least $1.2-1.3 million from the sale of 41 Calvert Parade. Disputes break out Thereafter the purchasers came to believe that, contrary to the impression they had gained from the survey diagram in the brochure, the rear boundary of the Rednal land traversed the swimming pool. They formed this belief partly because of disclosures by the vendor, partly because of a survey they procured on 14 March 1997, and partly because of dealings with the Department of Conservation and Land Management and the Pittwater Council. They were also informed on 30 May 1997 by an officer of that Department that they would not be permitted to relocate the swimming pool as they wished. On 26 May 1997, the purchasers commenced proceedings against the vendor. The causes of action alleged were fraudulent misrepresentation, innocent misrepresentation and misleading or deceptive conduct. On 24 June 1997, contracts were exchanged on 41 Calvert Parade. The price was $1.1 million. Contrary to special condition 34.1 of the Rednal land contract, the balance of the deposit, $72,000, was not paid. On that ground, on 2 July 1997, the vendor purported to terminate the contract for the sale of the Rednal land and claimed that the deposit of $272,000 had been forfeited. On 4 July 1997, the solicitor for the purchasers alleged that that notice of termination was invalid and that the vendor had repudiated the contract. Thereafter, the purchasers and the vendor treated the contract as no longer being on foot. The present proceedings, brought by the purchasers against the agent, did not commence until 26 February 1998. The purchasers claimed damages for misleading or deceptive conduct, comprising various items of expenditure occasioned by entry into the contract to buy the Rednal land. The two sets of proceedings brought by the purchasers, against respectively the vendor and the agent, were heard together. The reasoning of the trial judge in relation to the vendor The trial judge found innocent misrepresentation by authorising the preparation and distribution of the brochure and the inclusion of Mr Hannagan's survey report in the contract. The representation was that "the mean high water mark identified by applying the the vendor had made an that Hayne registered plan measurements for lot 14 from fixed reference points at the street boundary was located beyond the swimming pool and did not traverse it"6. It was a misrepresentation because Mr Hannagan's report was inaccurate in that respect: the correct position of the mean high water mark in a survey identification report for lot 14 was through the swimming pool7. The trial judge regarded it as irrelevant that the vendor may have been entitled to additional land by accretion which might bring his waterside boundary beyond the swimming pool, on the ground that the vendor "made no representation about title by accretion"8. The trial judge held that, for the same reasons, the vendor's conduct was misleading, but that it did not contravene s 42 of the Fair Trading Act 1987 (NSW) because it was not in trade or commerce9. The trial judge ordered the vendor to repay to the purchasers the deposit of $200,000 with interest. The reasoning of the trial judge in relation to the agent In the second proceedings, against the agent, the trial judge found that, because of the statements at the bottom of each side of the brochure, it had not made the misrepresentations that the vendor had made. All it had said was, in "Here is a diagram showing that the mean high water mark is located beyond the swimming pool. It is a diagram provided to us from a source that we believe to be reliable. However, we cannot vouch for the accuracy of what is shown in the diagram, and if the matter interests you, you should rely on your own inquiries." He also said that even if the agent had been held to have distributed a misleading brochure, it was not liable since it had done no more than pass the information on11. The trial judge rejected other allegations of misleading conduct which are irrelevant to this appeal. 6 Butcher v Harkins [2001] NSWSC 15 at [124]. 7 Butcher v Harkins [2001] NSWSC 15 at [80], [82], [124]-[126] and [128]-[130]. 8 Butcher v Harkins [2001] NSWSC 15 at [126]. 9 Butcher v Harkins [2001] NSWSC 15 at [148]. 10 Butcher v Harkins [2001] NSWSC 15 at [169]. 11 Butcher v Harkins [2001] NSWSC 15 at [181]. Hayne The vendor's appeal to the Court of Appeal against the purchasers The vendor appealed to the Court of Appeal. The Court of Appeal agreed with the trial judge that the contract of sale and the brochure, in incorporating the survey diagram, were misleading. It rejected various challenges to the trial judge's decision to order repayment of the deposit with interest, but substituted a more favourable costs order in consequence of the unnecessary allegations of fraud made by the purchasers. The purchasers' appeal to the Court of Appeal against the agent The purchasers also appealed to the Court of Appeal. The Court upheld the trial judge's view that the agent had done no more than pass on information received from the vendor12, and accordingly dismissed the appeal. Notice of Contention issues After the purchasers were granted special leave to appeal, the agent, as it was entitled to do as respondent to the appeal, filed a Notice of Contention. By that Notice, the agent alleged that the judgment in its favour in the Court of Appeal should be upheld on the basis that, contrary to the reasoning of the Court of Appeal, the northern boundary of the title to the Rednal land is, or at least was not shown at the trial not to be, on the Pittwater side of the swimming pool. This is a contention that the vendor had sought to raise in this Court by seeking special leave to appeal against the Court of Appeal's orders in the proceedings which the purchasers had brought against him for return of the deposit. Special leave to appeal was refused in that matter. At the oral hearing of the purchasers' appeal, the vendor renewed his application, contending, in effect, that if special leave were not granted, there would be a real risk of inconsistent outcomes in the litigation to which he, the vendor, was a party, and the litigation to which his agent was a party. At the heart of both the agent's contention in the present appeal and the vendor's renewed application for special leave is the question of identifying the area of the earth's surface which the vendor was entitled to sell and to which he could pass title. In particular, the Rednal land being Torrens title land under the Real Property Act 1900 (NSW), the question is to what area of land did the vendor have title? 12 Harkins v Butcher (2002) 55 NSWLR 558 at 566-570 [36]-[52]. Hayne It appears not to have been an issue at trial, or on appeal to the Court of Appeal13, that the Pittwater boundary to the Rednal land was the mean high water mark. Deposited Plan 9500, by reference to which the title to the Rednal land was to be identified, located the mean high water mark at a certain distance from the road frontage of the Rednal land. It by no means follows, however, that the Pittwater boundary to the Rednal land was a line identified by reference to those distances. It is at least strongly arguable that the boundary was the mean high water mark. If that is so, decisions of this Court14, courts at first instance15 and commentary by learned authors16 would suggest that it follows that if, as the result of wholly natural processes, that mark recedes over time, the area of the Rednal land the subject of the title could become larger. The trial judge touched on questions about whether that mark had moved over time, and, if it had, whether that was the result of natural accretion or of reclamation. The trial judge concluded that "there are good grounds for arguing that the mean high water mark should now be located in a different position beyond the pool"17 – that is, different from its location in 1919 when surveyed for the purposes of the Deposited Plan by which the registered title to the land is identified. But the trial judge made no more precise finding about the question. And in the Court of Appeal the finding that there had been no accretion to the land (as a result of a movement in the high water mark) was founded entirely upon what were said to be admissions made in 1964 and 1979 by predecessors in title to the vendor. Both vendor and agent wished to challenge that finding18. At one stage it seemed that the question which founded the grant of special leave could be reached only by first examining whatever evidence was given about where the mean high water mark was, or was shown to have been, at the time of the agent issuing the brochure. That issue, of where the mean high 13 Harkins v Butcher (2002) 55 NSWLR 558 at 560 [2], 561 [8]. 14 Lanyon Pty Ltd v Canberra Washed Sand Pty Ltd (1966) 115 CLR 342 and Hazlett v Presnell (1982) 149 CLR 107. See also the Privy Council decision of Southern Centre of Theosophy Inc v State of South Australia [1982] AC 706. 15 For example, Verrall v Nott (1939) 39 SR (NSW) 89. 16 For example, Moore, "Land by the Water", (1968) 41 Australian Law Journal 532 17 Butcher v Harkins [2001] NSWSC 15 at [80]. 18 Harkins v Butcher (2002) 55 NSWLR 558 at 563 [15]. Hayne water mark was in fact located at relevant times, was far from the forefront of the purchasers' case at the trial, or before the Court of Appeal, and in this Court they, like the trial judge19, contended that it was irrelevant. Rather, the purchasers argued that the relevant inaccuracy in the brochure is demonstrated by showing no more than that the boundary determined by measuring the distances found on the Deposited Plan from the road frontage towards Pittwater yields a line lying through the swimming pool. The purchasers' Statement of Claim against the agent alleged that the agent had engaged in conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth) ("the Act"), and sought damages under s 82 for loss allegedly caused20. There is no dispute that, whatever conduct the agent engaged in, it was in trade or commerce. The Statement of Claim relevantly alleged: "17. The [agent] when distributing the … brochure represented that: the permissive occupancy [sic] did not affect any improvements of the land; and the swimming pool constructed on the Rednal [land] was wholly constructed within the rear boundary towards Pittwater of the Rednal [land]. The [agent] throughout the period 1 February to 18 February 1997 failed to advise the [purchasers] that: 19 Butcher v Harkins [2001] NSWSC 15 at [82] and [126]. 20 Section 52(1) provided: "A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive." Section 82(1) provided: "A person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part … V … may recover the amount of the loss or damage by action against that other person …" Hayne the … brochure was inaccurate in that [it] erroneously suggested that the swimming pool constructed on the Rednal [land] was wholly constructed within the rear boundary towards Pittwater of the Rednal [land], when the true position was that the Permissive Occupancy owned by the Crown included part of the swimming pool …" In this Court, the purchasers emphasised the proposition that the expression "conduct" in s 52 extends beyond "representations". That proposition is sound21. But the purchasers cannot claim any advantage out of an extension of "conduct" beyond "representation" in this case, since their case as pleaded was one based on representations to them by the agent. In this Court, counsel for the purchasers accepted that the alleged misrepresentation was a misrepresentation about the title to land. In argument in this Court, counsel for the purchasers said that the pleaded representation that the swimming pool "was wholly constructed within the rear boundary towards Pittwater" of the Rednal land included an allegation that the representation was that the "swimming pool was within the curtilage of the land being sold", or that "the boundary of the land to which [the purchasers] would take title extended to the back fence". He also said that even if the doctrine of accretion gave the vendor title to more land than was indicated by the mean high water mark line marked on the survey plan in the brochure, or the right to a wider title, the agent's conduct would have contravened s 52, because the purchasers were not interested in buying "a bundle of trouble with a doctrine of accretion hanging to it and a lot of inquiries have to be made in order to get there". For its part, the agent denied these contentions, and denied that the misrepresentation identified by the trial judge had been pleaded. Counsel said that even if the agent had represented that the swimming pool "was wholly 21 Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (1988) 39 FCR 546 at 555 per Lockhart J (Burchett and Foster JJ concurring). The contrary view was stated in the Court of Appeal: Harkins v Butcher (2002) 55 NSWLR 558 at 565-566 [32]. The passages in the authorities cited by the Court of Appeal were not directed to the precise distinction (Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82 at 88 per Bowen CJ, Lockhart and Fitzgerald JJ) or were seeking to illuminate the distinction between conduct which was merely confusing and conduct which was misleading (Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 202 per Deane and Fitzgerald JJ) or were qualified by reference to cases of a particular class (Argy v Blunts & Lane Cove Real Estate Pty Ltd (1990) 26 FCR 112 at 131 per Hill J). Hayne constructed within the rear boundary" as par 17(c) of the Statement of Claim alleged, the purchasers had not shown that it was not. In some cases of this kind it might be important to decide whether any representation made was made about the full extent of the title, or was simply made about the location of the swimming pool in relation to the line marked "MHWM". This is not one of them, because for reasons now to be given, the agent made no representation of any kind, beyond stating what information the vendor wished to communicate to the purchasers. The alleged representation made The relevant class addressed. Questions of allegedly misleading conduct, including questions as to what the conduct was, can be analysed from two points of view. One is employed in relation to "members of a class to which the conduct in question [is] directed in a general sense"22. The other, urged by the purchasers here, is employed where the objects of the conduct are "identified individuals to whom a particular misrepresentation has been made or from whom a relevant fact, circumstance or proposal was withheld"; they are considered quite apart from any class into which they fall23. Adoption of the former point of view requires isolation by some criterion or criteria of a representative member of the class. To some extent the trial judge adopted the former approach, pointing out that the class – potential home buyers for Pittwater properties in a price range exceeding $1 million – was small (as suggested by the fact that only one hundred brochures were printed), and its members could be expected to have access to legal advice. The former approach is common when remedies other than those conferred by s 82 (or s 87) of the Act are under consideration. But the former approach is inappropriate, and the latter is inevitable, in cases like the present, where monetary relief is sought by a plaintiff who alleges that a particular misrepresentation was made to identified persons, of whom the plaintiff was one. The plaintiff must establish a causal link between the impugned conduct and the loss that is claimed. That depends on analysing the conduct of the defendant in relation to that plaintiff alone. So here, it is necessary to consider the character 22 Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 at 85 [103] per Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and 23 Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 at Hayne of the particular conduct of the particular agent in relation to the particular purchasers, bearing in mind what matters of fact each knew about the other as a result of the nature of their dealings and the conversations between them, or which each may be taken to have known. Indeed, counsel for the purchasers conceded that the mere fact that a person had engaged in the conduct of supplying a document containing misleading information did not mean that that person had engaged in misleading conduct: it was crucial to examine the role of the person in question. The relevant principles. In Yorke v Lucas24, Mason ACJ, Wilson, Deane and Dawson JJ said that a corporation could contravene s 52 even though it acted honestly and reasonably: "That does not, however, mean that a corporation which purports to do no more than pass on information supplied by another must nevertheless be engaging in misleading or deceptive conduct if the information turns out to be false. If the circumstances are such as to make it apparent that the corporation is not the source of the information and that it expressly or impliedly disclaims any belief in its truth or falsity, merely passing it on for what it is worth, we very much doubt that the corporation can properly be said to be itself engaging in conduct that is misleading or deceptive." In applying those principles, it is important that the agent's conduct be viewed as a whole. It is not right to characterise the problem as one of analysing the effect of its "conduct" divorced from "disclaimers" about that "conduct" and divorced from other circumstances which might qualify its character. Everything relevant the agent did up to the time when the purchasers contracted to buy the Rednal land must be taken into account. It is also important to remember that the relevant question must not be reduced to a crude inquiry: "Did the agent realise the purchasers were relying on the diagram?" To do that would be impermissibly to dilute the strict liability which s 52 imposes. 24 (1985) 158 CLR 661 at 666. In Goldsbro v Walker [1993] 1 NZLR 394 at 398, a decision of the New Zealand Court of Appeal on comparable legislation, Cooke P described Yorke v Lucas as supporting the "fairly obvious proposition" that "an innocent agent who acts merely as a conduit and purports to do no more than pass on instructions from his principal does not thereby become responsible for anything misleading in the information so passed on" (emphasis in original); Richardson J approved Yorke v Lucas at 402, and Hardie Boys J said at 405 that it "may be that" Yorke v Lucas "puts it somewhat too narrowly". Hayne For the following reasons, the agent did not engage in conduct towards the purchasers which was misleading. Whatever representation the vendor made to the purchasers by authorising the agent to issue the brochure, it was not made by the agent to the purchasers. The agent did no more than communicate what the vendor was representing, without adopting it or endorsing it. That conclusion flows from the nature of the parties, the character of the transaction contemplated, and the contents of the brochure itself. The nature of the parties. The parties were, on the one side, a company director and his de facto wife. They engaged in a carpet cleaning business conducted from their home. They were proposing to engage in an investment for family purposes. The search for and making of that investment was the result of a three to five year plan designed to achieve long-term financial security, to educate their four children, and to provide for the wellbeing of the family. The plan involved making strategic investments in properties and shares. It involved the sale of an apparently valuable motor yacht. The purchasers were contemplating the expenditure of over $1 million to be funded by the sale of another piece of valuable land for over $1 million – land which, according to the agent, had had "absolutely magnificent" renovations effected and for which the purchasers hoped to get at least $1.2-1.3 million. The purchasers were persons who were quite wealthy, and certainly aspired to become wealthier, by means of complex property and financial dealings. The transcript of their oral evidence reveals each of the purchasers to have been intelligent, shrewd and self-reliant. No doubt they appeared that way to the officers of the agent. On the other side, the relevant party was a suburban real estate agent – a corporation, a franchisee of L J Hooker, but still a suburban real estate agent, which took the name of the man who was its principal. Its office was Shop 2, 19 Bungan Street, Mona Vale. Nothing in the evidence suggests that it had more than a very small staff, or that the purchasers believed that it had more than a very small staff. The representation alleged was a representation about title. It is a matter of common experience that the skill of suburban real estate agents lies in making contracts on behalf of sellers with buyers, in locating persons who wish to sell real property and interesting in that real property persons who might wish to buy it, and in advising the former what prices are obtainable and the latter what prices might have to be paid. Suburban real estate agents do not hold themselves out – and this agent did not hold itself out – as possessing research skills or means of independently verifying title details about the properties they seek to sell. It is also a matter of common experience – and it was certainly the fact here – that real estate agents, while they carry out tasks on behalf of their principals, are not agents in the sense of creating legal relationships between their principals and others. Here, the agent was obviously an agent for the vendor, but only in a limited sense. The legal relationship to be created by any contract of Hayne purchase was to be created by the purchasers directly – by bidding at the auction and then signing a contract. It is a matter of common experience that questions of title to land can be complex, both legally and factually. Hence they have to be dealt with by specialists. So far as the complexity is factual, the specialists are surveyors. So far as the complexity is legal, the specialists are solicitors or conveyancers, relying on specialists like surveyors. The skills of these specialists, and the problems on which those skills are brought to bear, are quite outside what suburban real estate agents hold themselves out as doing and are likely to be able to do. While Mr Butcher said he regarded the agent as an expert in appraising property values, the appeal papers do not record any evidence from the purchasers that they regarded the agent as an expert in surveying or in land title. The character of the transaction. The transaction was the purchase of very expensive property, to be used as an investment – a means of gaining future profits. While the purchasers initially told the agent that they were interested in properties to the value of between $800,000 and $1 million, they did not decline the agent's invitation to inspect the Rednal land, which was expected to sell for $1.3-1.5 million according to Mr Spring, well above that level, and which was in due course sold to them for $1.36 million, including an unusually large deposit of $272,000. The area of which the Rednal land was part was "a well regarded, prestige, waterfront location". The purchasers bought it despite the fact that, as they told the agent, they saw it as needing "a huge amount of" building work in the form of "major corrective renovations". They intended to carry on their carpet cleaning business from the premises. The purchasers were contemplating extensive changes to the entertaining area of the Rednal land if they bought it. The changes would also be expensive, for, as Mr Elder told the purchasers, "it would cost a fortune". The purchasers engaged appropriate professional advisers to assist them – Mr Gordon, an accountant; Mr Gillmer, an architectural designer and building consultant; and Mr Hindmarch, a licensed builder. They also engaged solicitors to assist with the actual process of making and completing the contract. The agent was acting for the purchasers not only on the purchase of the Rednal land but also on the sale of 41 Calvert Parade. The agent worked closely with the purchasers in both respects. The agent knew most of the key characteristics of the purchasers and the properties they wished to sell and to acquire – the fact that the purchasers owned a valuable house, their desire to use the equity in it to buy a valuable property to be redeveloped and on-sold, and their access to and reliance on various forms of professional advice. Hayne the brochure. The contents of As counsel for the purchasers acknowledged, the diagram on the back of the brochure was a survey diagram and "looks like" a copy of an original prepared by a professional surveyor. Mr Butcher appreciated that it was a survey diagram. Mr Hindmarch recognised it as "a survey" or a "survey document", and rejected any suggestion that it was merely a sketch. The trial judge found that potential purchasers would be likely to assume that the diagram had been taken from an identification survey report. Not only was it plain that the diagram had not been made by the agent, the circumstances also negated any suggestion that the agent had adopted the surveyor's diagram as its own, or that it had verified its accuracy. The losses allegedly suffered by the purchasers arose from their entry into the contract to buy the Rednal land on 18 February 1997. Before they entered it, their solicitor had received a copy of the contract, and they themselves entered the contract by signing it. If they had not previously realised that the diagram in the brochure was from a survey not conducted by or on the instructions of the agent, the contract annexed Mr Hannagan's survey report dated 4 August 1980, containing the survey diagram bearing that date. they must have realised then, because It is now necessary to consider the two disclaimers, one on the front and one on the back. The courts below treated the one on the back as relating to the position of the agent. It may instead relate to the position of Williams Design Associates, on whose role the evidence is silent, save that it may be inferred that they played some role in producing the brochure. But it does not matter, for present purposes, whether both disclaimers relate to the agent or only one. If the disclaimers are examined from the point of view of what the agent was trying to do, the first at least establishes that it was trying not to make any representations about the accuracy of the information conveyed, save that it believed the sources of it to be reliable. If the disclaimers are examined from the point of view of a careful reader, they communicate the same message. In fact, Mr Butcher said that he did not notice either disclaimer when he received the brochure on or about 6 February 1997. Though he apparently studied the brochure, including the diagram, with sufficient care to pass on his impressions of it to Mr Gillmer and Mr Hindmarch, the evidence in the appeal papers does not suggest that he ever noticed them. There is no evidence in the appeal papers that Ms Radford noticed the disclaimers either. Yet, though the disclaimers were in small type, the brochure was a short document, there was very little written on it, and the disclaimers were there to be read. Only persons of very poor eyesight would find them illegible, and there is no evidence that the eyesight of Mr Butcher or Ms Radford was in any way defective. Hayne The Court of Appeal declined to "accord [the disclaimers] decisive significance"25, but they do have some significance. If the "conduct" of the agent is what a reasonable person in the position of the purchasers, taking into account what they knew, would make of the agent's behaviour, reasonable purchasers would have read the whole document, given its importance, its brevity, and their use of it as the source of instructions to professional advisers. There are circumstances in which the "conduct" of an agent would depend on different tests. For example, those tests might turn on what purchasers actually made of the agent's behaviour, whether they were acting reasonably or not, and they might also call for consideration of how the agent perceived the purchasers. Tests of that latter kind might be appropriate for plaintiffs of limited experience acting without professional advice in rushed circumstances. They are not appropriate in the present circumstances. Hence, in the circumstances, the brochure, read as a whole, simply meant: "The diagram records what a particular surveyor found on a survey in 1980. We are not surveyors. We did not do the survey. We did not engage any surveyor to do the survey. We believe the vendor and the surveyor are reliable, but we cannot guarantee the accuracy of the information they have provided. Whatever you rely on, you must rely on your own inquiries." Hence it would have been plain to a reasonable purchaser that the agent was not the source of the information which was said to be misleading. The agent did not purport to do anything more than pass on information supplied by another or others. It both expressly and implicitly disclaimed any belief in the truth or falsity of that information. It did no more than state a belief in the reliability of the sources. Specific contentions of the purchasers. It is convenient to deal briefly with several specific contentions advanced by the purchasers. First, it was said that the disclaimers were to be read down, because the agent was not the source of all the information: it was plainly the source of the information and the photographs on the front of the brochure. That assertion is not correct: it is possible that the agent was the source of everything on the front of the brochure, but it has not been demonstrated that it was. Secondly, it was submitted that there should have been "something … in plain print near the [allegedly misleading] information that [readers] should check its accuracy and [the agent does] not stand behind it". The statement that the agent did not guarantee the accuracy of any information and that readers 25 Harkins v Butcher (2002) 55 NSWLR 558 at 568 [46]. Hayne should make their own inquiries meant that readers should check its accuracy. That statement was sufficiently near both the picture of the back garden on the front and the diagram on the rear, since it was reproduced on both pages where the allegedly misleading information appeared and clearly applied to everything on the respective pages. Thirdly, it was submitted that the location of the boundary was a matter highly material to a valuable property being sold specifically as a waterfront property, and the agent should have given a proper warning disassociating itself from any representation on that subject. Yet there were two explicit warnings, which, although general, were for that reason comprehensive, and there were other warnings implicit in the totality of the brochure. Fourthly, it was contended that agents carrying on business in the Pittwater area "presumably ought to know about mean high-water marks around Pittwater". That submission is highly questionable factually and asserts no more than part of what it is trying to prove. Fifthly, stress was placed on the large commission that the agent was probably seeking, and the expectation this would generate in the purchasers that any representations about the property would be correct. There is no evidence that the purchasers knew what commission the agent would get, and whatever the size of the agent's commission, the circumstances remain inconsistent with its having made any relevant representation. Sixthly, it was submitted that while it was open to an estate agent to put a disclaimer on marketing brochures which could prevent its conduct from falling within s 52, the disclaimer would be so antithetical to the goal of selling properties that no estate agent would ever employ it. Yet the disclaimers on the brochure are not of that character, and they do negate any relevant representation. Extreme consequences of the purchasers' arguments. Further difficulties are created by certain extreme consequences which counsel for the purchasers acknowledged would flow from their arguments. It was accepted that if their arguments were sound, it must follow that when a real estate agent produces a brochure offering land for sale by a vendor, the real estate agent is representing that the vendor had good title. That would be so radical a conclusion as to suggest that even the wide words of s 52 could not bring it about; that in turn suggests that the principles that supposedly lead to that radical conclusion are unsound. It was also said that while Mr Spring's handing over of the brochure made the agent liable, the handing over of it by a junior employee at the front desk could not. The basis for this distinction was not explained. If the brochure made Hayne any representation, the conduct of the junior employee in handing it over would be engaged in on behalf of the agent as much as the conduct of the senior officer, and would therefore be deemed by s 84(2) to have been engaged in by the agent26. The status of the employee might be relevant to whether it was probable that the employee was personally liable as a secondary party (for example, an aider or abettor)27 by reason of having knowledge of the essential elements of the contravention28; but it is not, subject to s 84(2), relevant to whether the corporation – here, the agent – is liable. Authorities analysed by the purchasers. Counsel for the purchasers submitted that the Federal Court had repeatedly held "that disclaimers of this nature are not likely to overturn the effect of otherwise misleading and deceptive conduct". However, the Federal Court authorities do not say that disclaimers cannot make clear who is and who is not the author of misleading or deceptive conduct. While acknowledging that each case depended on its own facts, the purchasers relied on various authorities as supporting their argument. In John G Glass Real Estate Pty Ltd v Karawi Constructions Pty Ltd29, a real estate agent ("John G Glass") placed a typed document emanating from the principal of a firm of consultants acting for the vendor with other materials in a folder with a glossy cover. The typed document showed that the net lettable area of a building being offered for sale was 180 m2. In fact, the net lettable area was 137.4 m2. John G Glass contended that the only representation it had made was that it had obtained the information in the brochure from the vendor; that it had 26 Section 84(2) provided: "Any conduct engaged in on behalf of a body corporate: by a … servant … of the body corporate within the scope of the person's actual or apparent authority; … shall be deemed, for the purposes of this Act, to have been engaged in also by the body corporate." 27 Section 75B(1)(a) provided that a reference in Pt VI to a person involved in contravention of Pt V (which included s 52) should be read as a reference to a person who "has aided, abetted, counselled or procured the contravention …" 28 Yorke v Lucas (1985) 158 CLR 661 at 670 per Mason ACJ, Wilson, Deane and 29 (1993) ATPR ¶41-249. Hayne not endorsed or approved the information in the brochure; and that it was no more than a conduit. These contentions relied on the following statement in the brochure on a page immediately before the back cover: "The information contained herein has been prepared with care by our Company or it has been supplied to us by apparently reliable sources. In either case we have no reason to doubt its completeness or accuracy. However, neither John G Glass Real Estate Pty Limited, its employees or its clients guarantee the information nor does it, or is it intended, to form part of any contract. Accordingly, all interested parties should make their own enquiries to verify the information as well as any additional or supporting information supplied and it is the responsibility of interested parties to satisfy themselves in all respects." The Full Federal Court (Davies, Heerey and Whitlam JJ) upheld the trial judge's rejection of these contentions. Counsel for the purchasers here contended that if John G Glass there failed, with its "more ample disclaimer", going "much further than the suggested disclaimer here", the agent must fail in the present case. The case is distinguishable on two grounds. The first ground of distinction is that in the brochure John G Glass held itself out as "consultants to institutional investors and to developers of major properties", and the Full Federal Court held that such an agent "would not be regarded by potential purchasers of properties as merely passing on information about the property 'for what it is worth and without any belief in its truth or falsity'."30 The second ground of distinction is that the Full Federal Court said that the net lettable area figure was "one of hard physical fact", and an essential matter in determining the profitability and value of the building31. The issue of whether there was a precise correspondence between the Pittwater boundary of the Rednal land and the "MHWM" line on the surveyor's diagram here, however, is not a matter of hard physical fact. What is more, there was nothing to indicate that the net lettable area figure had not been calculated by John G Glass itself: indeed, the part of the disclaimer which stated that some of the information had 30 John G Glass Real Estate Pty Ltd v Karawi Constructions Pty Ltd (1993) ATPR ¶41-249 at 41,359 paraphrasing Yorke v Lucas (1985) 158 CLR 661 at 666 per Mason ACJ, Wilson, Deane and Dawson JJ. 31 John G Glass Real Estate Pty Ltd v Karawi Constructions Pty Ltd (1993) ATPR Hayne been "prepared with care by" John G Glass suggested that it had, since it is the type of information an estate agent might be capable of working out for itself. It is quite different from the survey diagram, which had obviously not been prepared by the agent here. Hence Handley JA's succinct explanation of why the case was distinguishable is correct32: "In that case the agents claimed relevant expertise, adopted the figures as their own, and put them forward without any reference to their source. In the present case the agents claimed no relevant expertise, and the diagram itself indicated that it was the work of a professional surveyor." Not only is the case distinguishable, but its reasoning in one respect is questionable. The Full Federal Court said33: "There was certainly no express disclaimer of the [estate agent's] belief in the truth of the information in the brochure – indeed there was an express assertion of such belief." It does not seem quite correct to describe an estate agent which says it has no reason to doubt the accuracy of information but says it does not guarantee it, advises interested parties to make their own inquiries, and says interested parties have the responsibility of satisfying themselves in all respects, as making an "express assertion" of belief in the information. Finally, contrary to what the purchasers submitted, while the disclaimer in John G Glass Real Estate Pty Ltd v Karawi Constructions Pty Ltd was longer, it was not "more ample", and did not go "much further", than the present disclaimers. It did not go as far, because its opening words, unlike any words in this brochure, acknowledged that the estate agent had prepared some of the information. The purchasers next relied on Waltip Pty Ltd v Capalaba Park Shopping Centre Pty Ltd34. In that case, Pincus J held that clauses in a deed of acknowledgment providing that no pre-contractual statements had been relied on before the parties entered a lease were of no effect if the facts were to the 32 Harkins v Butcher (2002) 55 NSWLR 558 at 570 [52]. 33 John G Glass Real Estate Pty Ltd v Karawi Constructions Pty Ltd (1993) ATPR 34 (1989) ATPR ¶40-975. Hayne contrary. Cases of that type concern a problem which is entirely different from the present problem, and cast no light on its solution. The third case relied on was Benlist Pty Ltd v Olivetti Australia Pty Ltd35. An estate agent issued a brochure promoting the sale of a substantial city building. The brochure said it was suitable for strata title subdivision. In fact, two encroachments presented obstacles to strata subdivision: one encroachment by a neighbouring building on the land the subject of the sale; and another encroachment by the building being sold onto the neighbouring land. The brochure contained the following clause: "Chesterton International (NSW) Pty Limited for themselves and the vendors of this property whose Agent they are, give notice: (i) The particulars are set out as a general outline only for guidance of intending purchasers and do not constitute an offer or contract; (ii) All descriptions, dimensions, reference to conditions and necessary permissions for use and occupation and other details are given in good faith and are believed to be correct, but any intending purchasers should not rely on them as statements or representations of fact and must satisfy themselves by inspection or otherwise as to the correctness of each of them; (iii) No person in the employ of [Chesterton] has any authority to make or give a presentation or warrant whatsoever in relation to this property." A question arose about whether that clause prevented a conclusion that the purchaser relied on the representation about strata title subdivision. Burchett J held that it did not. The purchasers in the present appeal relied on the following passage36: "It has been held on many occasions that the perpetrator of misleading conduct cannot, by resorting to such a clause, evade the operation of [the Act]. Of course, if the clause actually has the effect [of] erasing whatever is misleading in the conduct, the clause will be effective, not by any independent force of its own, but by actually modifying the conduct. However, I should think it would only be in rare cases that a formal disclaimer would have that effect." Clause (i) of the disclaimer did not purport to modify the conduct. Nor did cl (iii), since, as Burchett J held, it merely prevented employees from binding 35 (1990) ATPR ¶41-043. 36 Benlist Pty Ltd v Olivetti Australia Pty Ltd (1990) ATPR ¶41-043 at 51,590. Hayne the vendor by conduct outside the brochure. Burchett J dealt with cl (ii) as a matter of fact37: "In the present case, the suggestion of the suitability of the building for strata title conversion might continue to influence the mind of a prospective purchaser notwithstanding his awareness of the existence of a disclaimer clause, which did not single out the particular representation, but purported to apply generally to every detail stated in the investment report. If it were permissible to avoid the operation of [the Act] by such a clause, it would be all too easy to make representations in the confidence that they would be acted upon, and then withdraw them in the confidence (equally important for the securing of the desired business) that the withdrawal would not be acted upon." The conclusions that Burchett J reached as a matter of fact in that case – the implicit conclusion that the clause had not modified the conduct, and the explicit conclusion that despite being told to make its own inquiries the purchaser relied on the representation about strata title conversion – were no doubt open to him, but different conclusions are open in other cases. The purchasers next referred to a case on which the Court of Appeal relied, Argy v Blunts & Lane Cove Real Estate Pty Ltd38, where Hill J suggested that a solicitor would not be guilty of misleading conduct in annexing to a contract for the sale of land a certificate issued by a local council under s 149 of the Environmental Planning and Assessment Act 1979 (NSW) which wrongly described the zoning of the land, so long as the whole of the certificate was annexed. It was said to be distinguishable in that the solicitor in that case merely attached a document prepared by another, while here the agent incorporated the document as part of its brochure in conjunction with other material, particularly the photographs on the front. The purchasers' attempt to distinguish this case rested on an unsatisfactory distinction between survey diagrams included in brochures and survey diagrams annexed to brochures. 37 Benlist Pty Ltd v Olivetti Australia Pty Ltd (1990) ATPR ¶41-043 at 51,590 (emphasis in original). 38 (1990) 26 FCR 112 at 131-132. Hayne The purchasers drew the same distinction in relation to a statement in another case on which the Court of Appeal below relied – Dean v Allin & Watts39: "The greatest caution is required in treating statements made by a solicitor in the course of conveyancing transactions and the like on or in accordance with the instructions of his client as representations made by the solicitor rather than as 'conveyed' by him as (in effect) a medium of communication or messenger for his client, for this may readily be assumed to be understood to be part of his role in the transactions. The solicitor's position in such a situation is to be contrasted with his position in a situation where the solicitor makes an express unequivocal statement to a third party which is not attributable simply to performing his role as the client's adviser: for in the latter case the adviser may readily be held to have assumed responsibility to the third party, since the explanation of his acting merely as a messenger would be inapplicable." After quoting this, the Court of Appeal said: "There is no reason why these principles should not apply to other agents as well."40 If this sentence is read as stating that the "greatest caution" is required in treating statements by many agents on behalf of their principals in brochures as statements of the agents, it would be a highly questionable statement, since at least in cases under s 52, read in the light of the particular structure and goals of the Act, everything must depend on an appropriately detailed examination of the specific circumstances of the case. However, the sentence in question is not to be read in that way, because Handley JA went on to carry out an examination of this kind before concluding that the agent in the present case made no representation about the accuracy of the survey diagram. In the course of his examination, Handley JA said that if the agent had handed copies of the survey report and diagram to the purchasers, that act would not have represented that the information was accurate, and would have done no more than represent a belief that it was accurate. To supply the diagram as part of the brochure was no different41. The purchasers did not submit that Argy v Blunts & Lane Cove Real Estate Pty Ltd and Dean v Allin & Watts were incorrect, but said that they were 39 [2001] 2 Lloyd's Rep 249 at 257-258 [28] per Lightman J, Robert Walker and 40 Harkins v Butcher (2002) 55 NSWLR 558 at 568 [46] per Handley JA (Beazley and Hodgson JJA concurring). 41 Harkins v Butcher (2002) 55 NSWLR 558 at 569 [47]-[48]. Hayne cases in which a solicitor did no more than present a principal's document to a plaintiff, not cases in which a principal's document was incorporated into the agent's document. The purchasers submitted that the Court of Appeal in this case had failed to understand that, and had failed to understand that the misleading quality of the conduct of the agent in this case arose not only from the inclusion of the survey diagram, but from its juxtaposition with the photographs on the front of the brochure. The distinction relied on by the purchasers has a formal character, and will not always be satisfactory. Its soundness in particular contexts must depend on the circumstances of those contexts. There could be cases where the presentation by an agent of a principal's document to a plaintiff does involve the agent in making a representation about the objective truth of the document's contents; and there could be cases where the incorporation of a principal's document into another document prepared by an agent will not involve the agent in making a representation about any matter of objective truth, whether the principal's document is considered by itself or in conjunction with other material in the agent's document. For the reasons given above, the present circumstances fall within the latter category. Appropriate level of analysis. Finally, it is necessary to deal with a submission made by the purchasers that it was wrong to analyse the structure and language of the brochure too minutely. It is true that the level of analysis which is appropriate might vary from case to case. A more impressionistic analysis, concentrating on the immediate impact of the conduct, might be sounder where the document was only briefly looked at before a decision was made. In other cases a more detailed examination may be more appropriate. Here, the purchasers had the brochure for twelve days before the auction. They relied on it in instructing professional advisers, and they were embarking on a very serious venture. It is not inappropriate to look closely at the contents of the brochure before deciding whether the agent had made a representation. Vendor's application for special leave to appeal The vendor's renewed application for special leave to appeal was made against the possibility that the agent's arguments could fail in relation to the Notice of Appeal but succeed in relation to its Notice of Contention. Since the agent's arguments have not failed in relation to the Notice of Appeal, and since it has not been necessary to deal with its Notice of Contention, it is not necessary to do more with the special leave application than dismiss it. Cross-appeal Against the event that the appeal were to be allowed, the agent filed a Notice of Cross-Appeal relating to contribution from the vendor. Since the Hayne appeal is to be dismissed, it is not necessary to do more than dismiss the cross- appeal as well. Orders The appeal and cross-appeal are dismissed. The purchasers are to pay the agent's costs. The vendor's application for special leave to appeal is dismissed. McHugh 80 McHUGH J. This case is concerned with the application of a statutory text, expressed in general terms, to particular facts. It falls within a class of case that rarely warrants the grant of special leave to appeal to this Court. But behind the ultimate issue in the case are other issues that affect every person who is induced to buy real estate in Australia by statements in sales brochures distributed by real estate agents. One of those issues is the extent to which estate agents engage in misleading or deceptive conduct when they distribute sales brochures that contain untrue or misleading statements prepared by others. Another issue is the extent to which agents can escape liability by relying on disclaimers about the authenticity of false statements contained in brochures prepared by them. The respondent, Lachlan Elder Realty Pty Ltd ("Lachlan Elder"), a real estate agency, prepared and handed to Mr Jeffrey Butcher and Ms Judith Radford a promotional brochure concerning the sale of a residential waterfront property, which Mr Butcher and Ms Radford subsequently bought at auction. The brochure contained a reproduction of a survey diagram of the property, which consisted of land held under freehold and land held under a permissive occupancy granted by a government department. The diagram purported to depict a swimming pool as lying wholly within the freehold of the property. In fact, the freehold boundary of the property traversed the swimming pool so that the swimming pool lay partly within the freehold and partly within the permissive occupancy. Mr Butcher and Ms Radford ("the purchasers") claimed that: they intended to relocate the swimming pool; Lachlan Elder was aware of this intention before the auction; they had purchased the property relying on the survey diagram in the brochure; and they would not have bought the property if they had known that the swimming pool did not lie entirely within the freehold. The ultimate issue in the appeal is whether, by distributing the brochure, the conduct of Lachlan Elder amounted to misleading or deceptive conduct or conduct that was likely to mislead or deceive in contravention of s 52 of the Trade Practices Act 1974 (Cth) ("the Act"). In my opinion, it did. Statement of the case In May 1997, the purchasers commenced proceedings in the Supreme Court of New South Wales against Mr Robert Harkins, the vendor of the property at 10 Rednal Street, Mona Vale, Sydney ("the Rednal Street property"). In February 1998, they commenced proceedings in the Federal Court against Lachlan Elder. In June 1998, the proceedings against that company were McHugh transferred to the Supreme Court of New South Wales. Both proceedings concerned the purchase at auction of the Rednal Street property. Lachlan Elder was the agent of the vendor. The purchasers sued Lachlan Elder for damages for misleading or deceptive conduct in contravention of s 52 of the Act. The s 52 claim was based on a "glossy colour brochure" issued by Lachlan Elder before the Rednal Street property was auctioned42. The claim alleged that the brochure was misleading because it misrepresented the location of the swimming pool as entirely within the freehold of the property. The purchasers also sought damages against the vendor for misrepresentation and misleading or deceptive conduct based on the incorrect survey diagram. Relying on s 55(2A) of the Conveyancing Act 1919 (NSW), they also sought to recover the part deposit paid to the vendor. In the Supreme Court, Austin J found43 that the survey diagram suggested that the swimming pool was wholly within the vendor's freehold land but that the mean high water mark traversed the swimming pool with the result that the swimming pool was partly in the permissive occupancy. His Honour found44 that the vendor had made a misrepresentation that the mean high water mark was located beyond the swimming pool. However, Austin J found45 that Lachlan Elder had not engaged in misleading or deceptive conduct within the meaning of s 52 in distributing the brochure even though the purchasers had reasonably relied on the diagram in the brochure. His Honour held46 that the class of potential purchasers of waterfront homes in a price bracket above $1 million, independently advised by their own solicitors, would be unlikely to be misled by the brochure read as a whole, having regard, in particular, to its disclaimer provisions. His Honour found47 that, even if the brochure had been misleading or deceptive, Lachlan Elder had done no more than pass on the survey diagram, making it clear that it was not the source of the information. He dismissed the purchasers' action against Lachlan Elder with costs. 42 Butcher v Harkins [2001] NSWSC 15 at [3] per Austin J. 43 Butcher [2001] NSWSC 15 at [82], [125]. 44 Butcher [2001] NSWSC 15 at [168]. 45 Butcher [2001] NSWSC 15 at [145]. 46 Butcher [2001] NSWSC 15 at [170]. 47 Butcher [2001] NSWSC 15 at [171]. McHugh The purchasers appealed to the New South Wales Court of Appeal, which unanimously dismissed their appeal48. Handley JA, with whom Beazley and Hodgson JJA agreed, held that, for the purposes of s 52, conduct is only misleading or deceptive if it conveys a misrepresentation49. His Honour held that the only representation conveyed by Lachlan Elder was that the survey diagram "was an accurate copy of what [Lachlan Elder] believed was a genuine and correct survey diagram."50 Handley JA found51 that Lachlan Elder did not make any representation as to the accuracy of the survey diagram. His Honour found52 that, because Lachlan Elder claimed no expertise as surveyors and the diagram indicated that it was the work of a professional surveyor, Lachlan Elder did not assume responsibility for the accuracy of the information in the brochure. Accordingly, it did not engage in misleading or deceptive conduct by distributing the brochure to the purchasers. Subsequently, this Court gave the purchasers special leave to appeal against the Court of Appeal's decision on the s 52 claim. The material facts In December 1996, the purchasers inquired of Lachlan Elder whether investment properties to the value of between approximately $800,000 and $1 million were for sale in the northern beaches area of Sydney. In February 1997, Mr Gordon Spring from Lachlan Elder contacted the purchasers to propose an inspection of the Rednal Street property. The purchasers inspected the Rednal Street property on 6 February 1997 with Mr Spring. Lachlan Elder had produced a single-sheet, four-colour brochure of the Rednal Street property for the purpose of selling the property. It had colour photographs of the property on the front side and information on the back. One of the photographs on the front page depicted a swimming pool, a fence and lawns sloping to the Pittwater. At the bottom of the front side of the brochure appeared the following text: "Lachlan Elder Realty Pty Ltd ACN 002 332 247. All information contained herein is gathered from sources we believe to be reliable. 48 Harkins v Butcher (2002) 55 NSWLR 558. 49 Harkins (2002) 55 NSWLR 558 at 566. 50 Harkins (2002) 55 NSWLR 558 at 569. 51 Harkins (2002) 55 NSWLR 558 at 569. 52 Harkins (2002) 55 NSWLR 558 at 569-570. McHugh However we cannot guarantee it's [sic] accuracy and interested persons should rely on their own enquiries." The other side of the brochure contained a narrative description of the property, "written in marketing language rather than legal language."53 Adjacent to the narrative was a reproduction of a survey diagram bearing the date "4.8.80" which the vendor had given to Lachlan Elder. The survey diagram purported to show the land boundaries of the property and indicated that the property comprised both freehold and a permissive occupancy with a frontage to the Pittwater. The survey diagram showed a swimming pool wholly within the vendor's freehold. The diagram showed an irregular line running across the property between the swimming pool and the Pittwater, labelled "M.H.W.M.". The area between that line and the Pittwater was labelled "Reclaimed Area"54. The reproduction of the survey diagram did not identify the author of the diagram who was Mr F W Hannagan, a surveyor. At the bottom of the page, in small print, appeared the following text: "All information contained herein is gathered from sources we deem to be reliable. However we cannot guarantee it's [sic] accuracy and interested persons should rely on their own enquiries. Williams Design Associates At the inspection in early February to which I have referred, Mr Spring handed Mr Butcher a copy of the brochure. There was a dispute between the parties as to what Mr Spring said to the purchasers when he handed them the brochure. Austin J found56 that the words used by Mr Spring "did not convey a representation that the brochure contained all the information that a purchaser would need before entering into a contract of purchase." His Honour said57 that they conveyed no more than "that the brochure was a very helpful document which conveniently put together in a single place the answer to some questions that purchasers typically asked." 53 Butcher [2001] NSWSC 15 at [19] per Austin J. 54 Butcher [2001] NSWSC 15 at [20] per Austin J. 55 On the first page the brochure contained the statement: "Produced by Williams Design Associates Tel: (02) 9905 7372". 56 Butcher [2001] NSWSC 15 at [17]. 57 Butcher [2001] NSWSC 15 at [17]. McHugh The purchasers also inspected the Rednal Street property with Mr Lachlan Elder on 14 February 1997, and Mr Butcher inspected the property again the following day at an open for inspection conducted by Lachlan Elder. On 14 February, Mr Paul Gillmer, an architectural designer, accompanied the purchasers; on 15 February, Mr Scott Hindmarch, a builder, accompanied Mr Butcher. At the Rednal Street property on 14 February, Mr Butcher told Mr Elder that he planned to move the pool to run along the western side boundary in order to open up space for entertaining. Mr Elder was sceptical, saying the plan would be expensive to implement and the pool would encroach the mean high water mark. Mr Gillmer advised Mr Butcher that the idea of "moving" the pool was feasible, based on the position of the high water mark indicated by Mr Butcher, in reliance on the diagram in the brochure58. At the inspection of the Rednal Street property on 15 February, Mr Butcher showed the brochure to Mr Hindmarch. He asked Mr Hindmarch if it would be possible for the pool to be relocated to make a larger entertaining area. Mr Hindmarch said that on the basis of the survey in the brochure, it would be possible to do so because the high water mark did not affect the area to which he wanted to move the pool. Mr Hindmarch expressed his opinion solely by reference to the brochure diagram. Three days later, the purchasers obtained the Rednal Street property at auction for $1.36 million59. Following a conversation with the vendor, the purchasers commissioned a survey of the Rednal Street property. The surveyor formed the opinion that the rear freehold boundary of the property traversed the swimming pool. As a result, the purchasers did not pay the balance of the deposit, and the vendor terminated the contract of sale. Upon these facts, the question arises as to whether Lachlan Elder engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of s 52 of the Act. The purchasers claim that it did so by distributing the brochure containing the inaccurate survey diagram and by the conduct and statements of Messrs Spring and Elder at the inspections of the property on 6 and 14 February 1997. Accordingly, it is necessary to consider the scope and application of s 52 of the Act. Lachlan Elder does not dispute that it is a corporation that was acting "in trade or commerce" at all relevant times. 58 Butcher [2001] NSWSC 15 at [26] per Austin J. 59 Butcher [2001] NSWSC 15 at [32]. McHugh Interpretation of s 52 The approach to interpreting s 52 Section 52 provides: "(1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. (2) Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of subsection (1)." Section 52 – which is in Pt V of the Act – is capable of flexible application and should be construed accordingly. Such an approach gives effect to the consumer protection objectives that underpin Pt V of the Act generally and s 52 in particular60. As Lockhart and Gummow JJ pointed out in Accounting Systems 2000 (Developments) Pty Ltd v CCH Australia Ltd61: "[T]he evident purpose and policy underlying Pt V, which includes s 52, recommends a broad construction of its constituent provisions, the legislation being of a remedial character so that it should be construed so as to give the fullest relief which the fair meaning of its language will allow". Section 52 must be construed against the background of the general law, for its intended scope cannot be fully perceived without an understanding of that background. But common law principles of liability do not govern the operation of the section. While those principles may often be relevant in determining whether a contravention of s 52 has occurred, they are not determinative62 and do not always provide a safe guide to the operation of s 5263. In Brown v Jam 60 Trade Practices Bill 1974 (Cth) Explanatory Memorandum, (1974) at 14-16; Australia, House of Representatives, Parliamentary Debates (Hansard), 16 July 1974 at 225, 226, 232 per Enderby. 61 (1993) 42 FCR 470 at 503. 62 Cassidy v Saatchi & Saatchi Australia Pty Ltd (2004) ATPR ¶41-980 at 48,506 per Stone J. For instance, the common law of damages in respect of tort or breach of contract has been accepted as relevant to, but not determinative of, the assessment of damages under s 82 of the Act: at 48,506, citing Henville v Walker (2001) 206 CLR 459. 63 See, eg, Stephen J's comments in Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 227 about the (Footnote continues on next page) McHugh Factory Pty Ltd, Fox J said64 that the words of the section "should not be qualified or ... expanded, by reference to established common law principles of liability." Courts must give effect to the natural and ordinary meaning of the section, even if to do so "may result in the imposition of liabilities and the administration of remedies which differ from those supplied by the general law"65. This is because the relevant conduct (including any representation) "falls to be judged under s 52 not, as at common law, by the state of mind or intention of the maker of the statement, but according to its effect or likely effect or impact on the person to whom it is directed"66. "Engage in conduct" Section 52 fastens on "conduct". It prohibits "conduct" that is misleading or deceptive or that is likely to mislead or deceive. The Act defines "conduct" and "engaging in conduct"67. These definitions apply to the entire Act including guidance provided in relation to s 52 claims by the law with respect to the tort of passing off: "In determining the meaning of 'misleading or deceptive' in s 52(1) and in applying it to particular circumstances the law which has developed around the tort of passing off, founded as that tort is upon the protection of the plaintiff's intangible property rights, may not always provide any safe guide. However the long experience of the courts in that field should not be disregarded, some principles which have been developed appear equally applicable to s 52(1)." 64 (1981) 35 ALR 79 at 86. 65 Accounting Systems 2000 (Developments) (1993) 42 FCR 470 at 504 per Lockhart and Gummow JJ, citing World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181 at 198-199 per Brennan J; Bill Acceptance Corporation Ltd v GWA Ltd (1983) 50 ALR 242 at 246 per Lockhart J; Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (1988) 39 FCR 546 at 564 per Lockhart J, 571 per Foster J; Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31. 66 Heydon v NRMA Ltd (2000) 51 NSWLR 1 at 148 per McPherson AJA, citing Yorke v Lucas (1985) 158 CLR 661 at 666 per Mason ACJ, Wilson, Deane and 67 Section 4(2). 68 Accounting Systems 2000 (Developments) (1993) 42 FCR 470 at 505 per Lockhart McHugh Section 4(2)(a) of the Act provides that "a reference to engaging in conduct shall be read as a reference to doing or refusing to do any act". Section 4(2)(b) provides that the expression "conduct", when used as a noun otherwise than as mentioned in s 4(2)(a), "shall be read as a reference to the doing of or the refusing to do any act". Section 4(2)(c) declares that a reference to "refusing to do an act" includes: refraining (otherwise than inadvertently) from doing that act; or (ii) making it known that that act will not be done". Section 4(2) imposes one important limitation on the meaning of "conduct". Inadvertent refraining from doing an act does not constitute conduct for the purposes of s 52. Section 4(2) requires actual knowledge for a failure to disclose to be actionable. There are two significant aspects to the expression "engage in conduct" for the purposes of s 52. First, "conduct" is not confined to "representations". Second, the section requires the court to examine the impugned conduct as a whole, not in isolated parts. For the purposes of s 52, "conduct" is not confined to "representations", whether they be representations as to matters of present or future fact or law. As Lockhart and Gummow JJ stated in Accounting Systems 2000 (Developments)69, "it is necessary to keep steadily in mind when dealing with [the Act and, in particular, s 52] that 'representation' is not co-extensive with 'conduct'." In proscribing conduct that is misleading or deceptive or that is likely to mislead or deceive, s 52 operates notwithstanding that the conduct may or may not amount to a representation as the term is understood in the general law context. In the Court of Appeal, Handley JA took the view that, for the purpose of s 52, conduct it conveys a is not misleading or deceptive "unless misrepresentation"70. However, the compound conception of conduct that is 69 (1993) 42 FCR 470 at 504. 70 Harkins (2002) 55 NSWLR 558 at 566, citing Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 202 per Deane and Fitzgerald JJ; Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82 at 88; Argy v Blunts & Lane Cove Real Estate Pty Ltd (1990) 26 FCR 112 at 131. See also Lego Australia Pty Ltd v Paul's (Merchants) Pty Ltd (1982) 42 ALR 344 at 352 per Deane and Fitzgerald JJ; Chase Manhattan Overseas Corporation v Chase Corporation Ltd (1985) 9 FCR 129 at 139 per Wilcox J; Chase Manhattan Overseas Corporation v Chase Corporation Ltd (1986) 12 FCR 375 at 377 per Lockhart J, 393 per (Footnote continues on next page) McHugh misleading or deceptive or likely to be so is not confined to conduct that involves representations. Conduct may infringe s 52 even though it may not amount to a misrepresentation. In Rhone-Poulenc Agrochimie SA v UIM Chemical Services Pty Ltd71, Lockhart J said that "[m]isleading or deceptive conduct under s 52 generally, though not always, consists of misrepresentations." His Honour went on to say72 that whether s 52 "has been contravened depends upon an analysis of the conduct of the alleged contravener viewed in the light of all the relevant circumstances constituted by acts, omissions, statements or silence." In the same case, Jackson J said73 that it was not correct to treat s 52(1) "as applying only to cases where the conduct of the respondent could amount to misrepresentation under the general law." Subsequently, in Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1)74, Lockhart J repeated that it was "erroneous to approach s 52 on the assumption that its application is confined exclusively to circumstances which constitute some form of representation." His Honour went on to say75: "[U]ltimately in each case it is necessary to examine the conduct, whether representational in character or not, and ask the question whether the impugned conduct of its nature constitutes misleading or deceptive conduct. This will often, but not always, be the same question, as whether the conduct is likely to mislead or deceive." In State Government Insurance Corporation v Government Insurance Office of New South Wales76, French J held that s 52 can be infringed although the relevant conduct is not a representation. His Honour noted that judges had said in a number of cases "that to establish that conduct is misleading or Beaumont J; TJM Products Pty Ltd v A & P Tyres Pty Ltd (1987) 14 FCR 33 at 39 per Fisher J; Gollel Holdings Pty Ltd v Kenneth Maurer Funerals Pty Ltd (1987) ATPR ¶40-790 at 48,616-48,617 per Einfeld J; 10th Cantanae Pty Ltd v Shoshana Pty Ltd (1987) 79 ALR 299 at 308 per Pincus J. 71 (1986) 12 FCR 477 at 504. 72 Rhone-Poulenc Agrochimie SA (1986) 12 FCR 477 at 504. 73 Rhone-Poulenc Agrochimie SA (1986) 12 FCR 477 at 508. 74 (1988) 39 FCR 546 at 555, Burchett and Foster JJ concurring. 75 Henjo Investments (1988) 39 FCR 546 at 555. 76 (1991) 28 FCR 511 at 561-562. McHugh deceptive, it is necessary to show that it conveys some representation which is false."77 However, his Honour said that78: "[I]t is not logically a necessary condition for the characterisation of conduct as misleading or deceptive or likely to mislead or deceive that it convey some representation. To so require is to impose a gloss on the words of the statute". In Demagogue Pty Ltd v Ramensky, Gummow J agreed with the above statement by French J and said79 that conduct that is misleading or deceptive or is likely to mislead or deceive "may not always involve misrepresentation". Section 52 applies to a wide range of conduct. Confining "conduct" in s 52 to "representations" is to ignore the ordinary meaning of "conduct". Furthermore, such a restricted reading of the section cannot be reconciled with the terms of other sections in Pt V that specifically refer to representations. Thus, s 53 of the Act is directed at "false or misleading representations" in connection with the supply, possible supply or promotion of the supply or use of goods and services. Similarly, s 53A, among other things, is directed at false or misleading representations in connection with the sale or grant, or the possible sale or grant, or the promotion of the sale or grant of an interest in land. Section 52 is not limited to conduct in relation to statements about goods or services. Nor is it limited to activity in relation to the sale or grant of interests in land (including the promotion of the sale of an interest in land). For the purposes 77 State Government Insurance Corporation (1991) 28 FCR 511 at 561. His Honour referred to the statement of Deane and Fitzgerald JJ in Taco Co of Australia (1982) 42 ALR 177 at 202 that: "Irrespective of whether conduct produces or is likely to produce confusion or misconception, it cannot, for the purposes of s 52, be categorised as misleading or deceptive unless it contains or conveys, in all the circumstances of the case, a misrepresentation." French J also cited Global Sportsman (1984) 2 FCR 82 at 88; 10th Cantanae (1987) 79 ALR 299; Chase Manhattan Overseas Corporation (1985) 9 FCR 129 at 139 per Wilcox J; and Chase Manhattan Overseas Corporation (1986) 12 FCR 375 at 378 per Lockhart J, 393 per Beaumont J. 78 State Government Insurance Corporation (1991) 28 FCR 511 at 562. 79 (1992) 39 FCR 31 at 40-41, Black CJ and Cooper J concurring. Gummow J cited Henjo Investments (1988) 39 FCR 546 at 555 per Lockhart J; French, "The Law of Torts and Part V of the Trade Practices Act", in Finn (ed), Essays on Torts, (1989) McHugh of s 52, "engage in conduct" extends to conduct concerning land, including conduct in connection with the promotion of the sale of interests in land80. The question whether conduct is misleading or deceptive or is likely to mislead or deceive is a question of fact. In determining whether a contravention of s 52 has occurred, the task of the court is to examine the relevant course of conduct as a whole. It is determined by reference to the alleged conduct in the light of the relevant surrounding facts and circumstances. It is an objective question that the court must determine for itself81. It invites error to look at isolated parts of the corporation's conduct. The effect of any relevant statements or actions or any silence or inaction occurring in the context of a single course of conduct must be deduced from the whole course of conduct82. Thus, where the alleged contravention of s 52 relates primarily to a document, the effect of the document must be examined in the context of the evidence as a whole83. The court is not confined to examining the document in isolation. It must have regard to all the conduct of the corporation in relation to the document including the preparation and distribution of the document and any statement, action, silence or inaction in connection with the document. The Court of Appeal erred when it found that, for the purposes of s 52, conduct is not misleading or deceptive unless it contains or conveys, in all the circumstances of the case, a misrepresentation. Misleading or deceptive conduct Conduct is misleading or deceptive if it induces or is capable of inducing error84. A corporation does not avoid liability for breach of s 52 because a person who has been the subject of misleading or deceptive conduct could have 80 See s 53A(2A). 81 See Equity Access Pty Ltd v Westpac Banking Corporation (1990) ATPR ¶40-994 at 50,950 per Hill J; see also Taco Co of Australia (1982) 42 ALR 177 at 202-203 per Deane and Fitzgerald JJ. 82 See, eg, Trade Practices Commission v Lamova Publishing Corp Pty Ltd (1979) 28 ALR 416 at 421-422 per Lockhart J. 83 See, eg, Lezam Pty Ltd v Seabridge Australia Pty Ltd (1992) 35 FCR 535 at 541 per Sheppard J, Hill J agreeing. 84 Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 198 per Gibbs CJ; Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564 at 589 per French J, Beaumont and Finkelstein JJ agreeing. McHugh discovered the misleading or deceptive conduct by proper inquiries85. Conduct that objectively leads one into error is misleading. The words "or is likely to mislead or deceive" were inserted into s 52(1) by s 29 of the Trade Practices Amendment Act 1977 (Cth). Those words make it clear that it is unnecessary to prove that the conduct in question actually deceived or misled anyone86. The amendment expands the scope of s 52 and makes it, in the oft-quoted words of Fox J in Brown, "a comprehensive provision of wide impact"87. The section establishes a norm of conduct with which corporations must comply. The failure by a corporation to observe that norm of conduct has the consequences provided for in Pt VI of the Act88. It is unnecessary to show on the balance of probabilities whether the impugned conduct was misleading or deceptive. For example, in Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd89, the Full Federal Court held that conduct is likely to mislead or deceive if there is a real and not remote chance or possibility that a person is likely to be misled or deceived. This is so even though the possibility of that occurring is less than 50 per cent. The liability of corporations for disseminating information supplied by a third party A corporation may contravene s 52 the corporation passes on erroneous information supplied by a third party. Both the decided cases and s 65A of the Act show that a corporation will contravene s 52 by disseminating erroneous information provided by another person if the conduct in disseminating the information may properly be regarded as misleading or deceptive or likely to mislead or deceive. in circumstances where Section 65A, like s 52, appears in Div 1 of Pt V of the Act. It applies to "prescribed information providers" (essentially, media providers such as 85 Collins Marrickville Pty Ltd v Henjo Investments Pty Ltd (1987) 72 ALR 601; aff'd on appeal in Henjo Investments (1988) 39 FCR 546; Sutton v A J Thompson Pty Ltd (in liq) (1987) 73 ALR 233 at 240-241. 86 Parkdale Custom Built Furniture (1982) 149 CLR 191 at 198 per Gibbs CJ; Taco Co of Australia (1982) 42 ALR 177 at 189 per Deane and Fitzgerald JJ. 87 (1981) 35 ALR 79 at 86. 88 See Brown (1981) 35 ALR 79 at 86 per Fox J. A breach of s 52 gives rise to civil liability in damages and injunctive relief: ss 80 and 82; see now also ss 86C(2)(c), (d) and 87. Thus, injured consumers have civil remedies. 89 (1984) 2 FCR 82 at 87. McHugh television stations and newspapers). It operates to exclude them from liability for, amongst other things, misleading or deceptive conduct within the meaning of s 52 in relation to editorial stories and news. The section was inserted following two decisions of the Federal Court in Australian Ocean Line Pty Ltd v West Australian Newspapers Ltd90 and Global Sportsman91. In those cases the Court held that publication of statements in newspapers in the course of reporting the news was capable of amounting to a contravention of s 52 if the statements were misleading or deceptive or likely to mislead or deceive. The context in which s 52 appears suggests, therefore, that, in the absence of an express statutory qualification or "exclusion" from liability such as s 65A, a corporation may contravene s 52 by passing on erroneous information that is produced by a third party. The decided cases also show that, by publishing erroneous information received from others, a corporation may engage in conduct that is or is likely to be misleading or deceptive. In determining whether a contravention of s 52 has occurred, two factors are important: whether the corporation assumed responsibility for or adopted (or endorsed or used its name in association with) the information so that it would be reasonable for a recipient to rely on the information; and whether the corporation disclaimed any belief in the truth or falsity of the information or disclaimed any personal responsibility for what it conveyed. In Gardam v George Wills & Co Ltd – which concerned the prosecution of a clothing wholesaler for a breach of s 53(a) of the Act in relation to the supply by the wholesaler of children's sleepwear which bore labels that did not accord with the relevant consumer product safety standard – French J said92: "The innocent carriage of a false representation from one person to another in circumstances where the carrier is and is seen to be a mere conduit, does not involve him in making that representation. … When, however, a representation is conveyed in circumstances in which the carrier would be regarded by the relevant section of the public as adopting it, then he makes that representation. It will be a question of fact in each case". 90 (1983) 47 ALR 497. 91 (1984) 2 FCR 82. 92 (1988) 82 ALR 415 at 427. McHugh His Honour held that a wholesaler who supplies goods bearing a label without attribution of authorship "can be taken in ordinary circumstances to adopt the text of those labels."93 In addition, he found that "the sale of such anonymously labelled goods by a wholesaler without any disclaimer as to their content, amounts to a statement by the wholesaler to the retailer and to the ultimate consumer that the text of the labels is correct."94 A similar result was reached in John G Glass Real Estate Pty Ltd v Karawi Constructions Pty Ltd95 which concerned a real estate agent "specialising in: … [r]eal estate investment consultants to Institutional investors and to developers of major properties". The agent had incorporated into a marketing dossier incorrect information about the lettable area of a commercial property that was under construction. After obtaining a set of incorrect calculations concerning the net lettable area of the building from a consultant, the agent prepared a document setting out the calculations. The document contained a disclaimer that stated inter alia: "The information contained herein has been prepared with care by our Company or it has been supplied to us by apparently reliable sources. In either case we have no reason to doubt its completeness or accuracy." The Full Federal Court (Davies, Heerey and Whitlam JJ) held that the agent had engaged in misleading or deceptive conduct. The Court thought the agent's claimed "expertise" was significant. It held that potential purchasers would not regard an agent that held itself out as "consultants to Institutional investors and to developers of major properties" as merely passing on information about the property "for what it is worth and without any belief in its truth or falsity"96. A reasonable purchaser would ordinarily expect that the agent "had no reason to doubt the completeness or accuracy of the information provided."97 This was particularly so where the information concerned a matter of "hard physical fact" and was an essential factor in determining the likely profitability and, hence, the value of the building. The Full Court said98 that information concerning "the net lettable area of a building, stands on a different 93 Gardam (1988) 82 ALR 415 at 427. 94 Gardam (1988) 82 ALR 415 at 428. 95 (1993) ATPR ¶41-249. 96 John G Glass Real Estate (1993) ATPR ¶41-249 at 41,359, citing Yorke (1985) 158 CLR 661 at 666 per Mason ACJ, Wilson, Deane and Dawson JJ. 97 John G Glass Real Estate (1993) ATPR ¶41-249 at 41,359. 98 John G Glass Real Estate (1993) ATPR ¶41-249 at 41,359. McHugh footing from the puffery which often accompanies the sale of real property" because the matter of the size of the net lettable area of the building was "one of hard physical fact". In addition, there was no express disclaimer of any belief by the agent in the truth of the information. In Mackman v Stengold Pty Ltd99, Spender J in the Federal Court held that a corporation had contravened s 52 by supplying to a potential purchaser of a franchise business a report containing inaccurate figures concerning profit projections for the business. The corporation had supplied the report as if the figures had been prepared by its accountants, when in fact the accountants had simply accepted the figures supplied to them by the corporation and had represented the figures as their own. The report was to be used to persuade persons to purchase franchises. His Honour held that the corporation was liable although the report contained the disclaimer from the accountants: "We have not audited either the basic records or the statements. Accordingly we express no opinion as to whether such statements present a true and fair view of the results of the company or of financial position, no warranty of accuracy or reliability is given, and we accept no responsibility whatsoever to any person other than our clients for any loss or damage occasioned by reliance on the information contained in these statements or for any error or omissions, therein however caused." Spender J held that the disclaimer disguised and distorted the corporation's involvement in the preparation of the report. In particular, the disclaimer conveyed the impression that the accountants had done more than merely reproduce the information supplied by the corporation. The disclaimer gave to the profit projections a spurious authenticity. the representations about His Honour held that the disclaimer itself was misleading or deceptive and that the conduct of the corporation was misleading or deceptive conduct within the meaning of s 52, particularly because the only purpose of the production of the report was to show it to prospective purchasers100. He stated101 that the attempt to disclaim was "an ingenuous but unsuccessful attempt to absolve its authors from liability for the dissemination and no doubt inducing quality of the document, when they knew that that was the purpose for which the documents were prepared." 99 (1991) ATPR ¶41-105. 100 His Honour found the accountants to be liable under s 75B of the Act, as being knowingly concerned in the contravention of s 52 by the corporation. 101 Mackman (1991) ATPR ¶41-105 at 52,632. McHugh Yorke v Ross Lucas Pty Ltd102 is another case where the trial judge found that a corporation that passed on information as agent for the vendor corporation had contravened s 52 despite its contravention being unwitting. However, the courts have held that in three situations a corporation does not contravene s 52 when it passes on erroneous information. They are: where the circumstances make it apparent that the corporation is not the source of the information and that it expressly or impliedly disclaims any belief in its truth or falsity and is merely passing on the information for what it is worth103; where the corporation, while believing the information, expressly or impliedly disclaims personal responsibility for what it conveys, for example, by disclaiming personal knowledge104; and where the corporation, while believing the information, ensures that its name is not used in association with the information105. If the circumstances of the case make it apparent that the corporation is not the source of the information, that it disclaims any belief in its truth or falsity and is merely passing the information on for what it is worth, it is unlikely that the corporation will contravene s 52. In Global Sportsman106, Bowen CJ, Lockhart and Fitzgerald JJ said that "[s]uch a statement is essentially different in the meaning which it contains or conveys unless it is adopted by the publisher and he will not necessarily do this by merely publishing the statement." Thus, a corporation which acts as a "mere conduit" for information supplied by another will ordinarily not be taken to have engaged in misleading or deceptive conduct or conduct that is likely to mislead or deceive107. 102 (1982) 45 ALR 299 at 314 per Fisher J. 103 See Yorke (1985) 158 CLR 661 at 666 per Mason ACJ, Wilson, Deane and Dawson JJ; Lezam (1992) 35 FCR 535 at 552-553 per Sheppard J, Hill J concurring. 104 Saints Gallery Pty Ltd v Plummer (1988) 80 ALR 525 at 530-531. 105 Amadio Pty Ltd v Henderson (1998) 81 FCR 149 at 257. 106 (1984) 2 FCR 82 at 90. 107 See, eg, Gardam (1988) 82 ALR 415 at 427 per French J. McHugh Assumption of responsibility Much of the discussion in the courts below turned on the nature of the "representation" that the purchasers allege was made by Lachlan Elder. Austin J found that a reader of the brochure who compared the survey on the back of the brochure with the photographs on the front of the brochure would conclude that the mean high water mark was approximately the line of the metal pool fence108. His Honour found further that it was open to conclude that the brochure represented more than that the swimming pool was within a fence. A reasonable person might assume from the brochure that the swimming pool lay within the freehold. Austin J held that there was a representation by the vendor109: "that the mean high water mark identified by applying the registered plan measurements for [the Rednal Street property] from fixed reference points at the street boundary was located beyond the swimming pool and did not traverse it." His Honour further found that when the agent distributed the brochure containing the survey diagram to potential purchasers, the agent "made a representation [on behalf of the vendor] … that the information in the brochure was accurate and materially complete, having regard to the nature of the brochure as a marketing document."110 However, the agent itself made no representation as to the truth or accuracy of the survey for the reasons that the reasonable potential purchaser (of waterfront properties in the price range of over $1 million) would be likely to assume that the survey in the brochure had been taken from an identification survey report111, would not ordinarily expect an agent in the position of Lachlan Elder to be a surveyor or to be in a position to check a survey, would be expected to have access to legal advice and to retain a solicitor for such a purchase112, and would expect the contract to deal with such matters. Handley JA in the Court of Appeal repeated the well-established principle that "for the purposes of s 52 and its equivalents … a disclosed agent conveying a representation on behalf of his principal may properly be understood as 108 Butcher [2001] NSWSC 15 at [20]. 109 Butcher [2001] NSWSC 15 at [124]. 110 Butcher [2001] NSWSC 15 at [129]. 111 Butcher [2001] NSWSC 15 at [130] per Austin J. 112 Butcher [2001] NSWSC 15 at [166] per Austin J. McHugh conveying a more limited representation in his own right."113 His Honour held114 that the only relevant "representation" in the brochure as to the location of the pool in relation to the title boundary "was that conveyed by the diagram reproduced on the back", namely, that "the reproduction was an accurate copy of what [the agent] believed was a genuine and correct survey diagram." He found that Lachlan Elder impliedly represented that it "had an honest, or perhaps honest and reasonable, belief that the copies were genuine and recorded the surveyor's opinion on the matters disclosed."115 He also held that the agent impliedly represented its "belief that the report and diagram were accurate"116. Significantly, Handley JA held that the agent made no representation as to the accuracy of the survey diagram117. He also stated that there was no good reason why the agent "would intend to represent that [the survey diagram] was in fact accurate, or why the recipients would think that the [agent was] making any such representation."118 In other words, his Honour found that potential purchasers could not properly assume that the agent was representing the accuracy of the diagram. Lachlan Elder engaged in conduct that was misleading In my opinion, the Court of Appeal erred in finding that the conduct of Lachlan Elder was not misleading or deceptive. In the courts below, the case turned on the nature of the "representation". However, the issue is whether the conduct of Lachlan Elder was misleading or deceptive or was likely to mislead or deceive, having regard to all the circumstances of the case. They included but were not limited to the representations Lachlan Elder made, its actions (and inaction or silence) and the impression conveyed by its conduct. The phrase that best describes the relevant conduct of Lachlan Elder is "selling the Rednal Street property". In determining whether a breach of s 52 occurred, all that Lachlan Elder did in relation to the sale is relevant. Hence, the presence of and participation in the inspections of Lachlan Elder's staff, their knowledge of the 113 Harkins (2002) 55 NSWLR 558 at 567. 114 Harkins (2002) 55 NSWLR 558 at 569. 115 Harkins (2002) 55 NSWLR 558 at 569, citing Spencer Bower, Turner and Handley, Actionable Misrepresentation, 4th ed (2000) at 13-14. 116 Harkins (2002) 55 NSWLR 558 at 569, citing Spencer Bower, Turner and Handley, Actionable Misrepresentation, 4th ed (2000) at 11-13. 117 Harkins (2002) 55 NSWLR 558 at 569. 118 Harkins (2002) 55 NSWLR 558 at 569. McHugh purpose of the inspections and the conversations at those inspections as well as the distribution and content of the brochure must be considered. To focus on whether a representation was made and the content of the representation diverts attention from the substantive issue, that is, whether in all the circumstances Lachlan Elder engaged in misleading or deceptive conduct or conduct that was likely to mislead or deceive. Accordingly, it is necessary to consider the whole conduct of Lachlan Elder in order to ascertain whether such conduct was misleading or deceptive or was likely to mislead or deceive persons in the class identified as reasonable potential purchasers of waterfront properties in the price range of over $1 million. Potential purchasers of such a property would have access to legal advice and would retain a solicitor who would advise them about matters such as the boundary of the property. No doubt, potential purchasers within the identified class would also have been aware that it was not part of a selling agent's functions to obtain a survey plan or to verify such a plan. As I have shown, an extensive body of case law has developed concerning the circumstances in which corporations will be found to have engaged in conduct that is misleading or deceptive or is likely to mislead or deceive by passing on information supplied by a third party. This case falls within the category of a corporation not being the source of the information and believing in its accuracy but not expressly or impliedly disclaiming personal responsibility for what it conveys. That Lachlan Elder incorporated the survey diagram in a brochure prepared for marketing purposes is a matter of great importance. The irresistible conclusion is that Lachlan Elder did so because it would influence potential purchasers to purchase the property. The importance that Lachlan Elder gave to the survey diagram is emphasised by its place in the brochure: the top right hand side of the second page. Lachlan Elder contends that potential purchasers would have known and understood that the survey diagram was a reproduction of a survey report. That is clearly so: the diagram was a reproduction of a survey identification report and bore the date "4.8.80". Moreover, the brochure indicated that Lachlan Elder was not the source of all the information contained in it. The foot of the first page contained a disclaimer in the following terms: "Lachlan Elder Realty Pty Ltd ACN 002 332 247. All information contained herein is gathered from sources we believe to be reliable. However we cannot guarantee it's [sic] accuracy and interested persons should rely on their own enquiries." McHugh However, the reproduction of the diagram in the brochure does not identify the author of the survey diagram, an omission that suggests that Lachlan Elder had adopted the diagram as its own. At the top of the reproduction, in type so small and blurred that many people could only read it with the assistance of a magnifying glass, are the words: LAND, MINING & ENGINEERING SURVEYS 17 PARKES ROAD TELEPHONE 98 6184 The reproduction in the brochure omitted the words at the top of the survey diagram, which appeared above the address details and which read: REGISTERED SURVEYOR Thus, while a potential purchaser would be likely to conclude that the diagram was a reproduction of a survey identification report and that Lachlan Elder had not prepared it, a potential purchaser could not have identified the author of the survey diagram. At the least, the omission of the identity of the surveyor in a marketing brochure prepared by Lachlan Elder was likely to induce a potential purchaser to believe that that corporation was asserting that the details of the diagram were accurately stated. The survey diagram purported to show the land boundaries and indicated that the property comprised both freehold and a permissive occupancy with a frontage to the Pittwater. The survey diagram showed a swimming pool wholly within the vendor's freehold. The diagram showed an irregular line running across the property between the swimming pool and the Pittwater, labelled "M.H.W.M.". The area between that line and the Pittwater was labelled "Reclaimed Area". The front of the brochure contained a photograph of the swimming pool and the pool fence. Austin J found that a reader of the brochure who compared the survey on the back of the brochure with the photographs on the front of the brochure would conclude that the mean high water mark was approximately the line of the metal pool fence119. Mr Spring gave evidence that at the inspection on 6 February 1997 he handed Mr Butcher a copy of the brochure and said: "This has the information of the boundary, land area boundary and water, Council rates and land size which is normal information." Austin J found that Mr Spring "did not convey a representation that the brochure contained all the information that a purchaser would need before entering into a contract of purchase."120 Nevertheless, 119 Butcher [2001] NSWSC 15 at [20]. 120 Butcher [2001] NSWSC 15 at [17]. McHugh his Honour found that Mr Spring's statement "conveyed that the brochure was a very helpful document which conveniently put together in a single place the answer to some questions that purchasers typically asked."121 What occurred at the subsequent inspection on 14 February 1997 is of cardinal importance in evaluating the conduct of Lachlan Elder. Mr Elder was present at a conversation that showed that the purchasers were intending to move the pool and were relying on the accuracy of the survey diagram to do so. On that occasion, Mr Gillmer, the architectural designer retained by the purchasers, advised Mr Butcher that the idea of "moving" the pool was feasible, based on the position of the high water mark indicated by Mr Butcher, in reliance on the diagram in the brochure122. Mr Elder was sceptical about the proposal because he thought the plan would be expensive and that the pool would encroach on the mean high water mark. But everything he said was premised on the pool being within the boundary of the freehold land. In addition, Lachlan Elder was aware that Mr Butcher had attended the open for inspection of the Rednal Street property on 15 February 1997 with a builder and had taken advice from him. The conduct of Mr Elder at the inspection on 14 February 1997 and the conduct of Lachlan Elder in distributing the brochure were significant factors in inducing the purchasers to buy the property. Lachlan Elder not only distributed a brochure containing an inaccurate survey diagram but at the inspection it did nothing to correct the misapprehension under which the purchasers laboured. It is not to the point that Lachlan Elder was unaware that the survey diagram was inaccurate. Section 52 looks at the conduct of a corporation and is concerned only with whether that conduct misled or was likely to mislead a consumer. It is not concerned with the mental state of the corporation. As Hill J observed in Equity Access Pty Ltd v Westpac Banking Corporation123: "Section 52 is not confined to conduct which is intended to mislead or deceive … and a corporation which acts honestly and reasonably may none the less engage in conduct that is likely to mislead or deceive". In my opinion, the conduct that Lachlan Elder engaged in in selling the Rednal Street property was conduct that was likely to mislead the purchasers. 121 Butcher [2001] NSWSC 15 at [17]. 122 Butcher [2001] NSWSC 15 at [26] per Austin J. 123 (1990) ATPR ¶40-994 at 50,951; see also Hornsby Building Information Centre (1978) 140 CLR 216 at 228 per Stephen J; Parkdale Custom Built Furniture (1982) 149 CLR 191 at 197 per Gibbs CJ; Yorke (1985) 158 CLR 661 at 666 per Mason ACJ, Wilson, Deane and Dawson JJ; Heydon (2000) 51 NSWLR 1 at 148 per McPherson AJA. McHugh Lachlan Elder put out a brochure containing an incorrect survey diagram in a context that suggested that it had adopted the survey diagram as its own. It knew of the purchasers' intention to relocate the swimming pool. It knew that its subsequent conduct in continuing to "endorse" the brochure was likely to induce the purchasers to buy the property because they believed that they would be able to move the pool to a location within the freehold boundary. Its conduct led the purchasers into error and was, therefore, conduct that was misleading or deceptive124. Handley JA regarded Argy v Blunts & Lane Cove Real Estate Pty Ltd125 as the case that was the "most relevant"126 to the appeal. However, the purchasers correctly assert that Argy is distinguishable. In Argy, the real estate agents were found not to have contravened s 52 by distributing a contract of sale prepared by the solicitors for the vendor that omitted that part of a certificate that showed the property was the subject of zoning restrictions. In Argy, Hill J thought that a contravention of s 52 could not occur unless the impugned conduct amounted to a representation. For the reasons I have given, that view cannot be accepted. But in any event, the agents in Argy did not prepare the contract, nor did they incorporate the contract or the certificate into any of their own materials that they prepared for distribution to potential purchasers. Moreover, the agents did not hold themselves out as having any expertise in the preparation of contracts of sale. Furthermore, the contract of sale identified the solicitors as having prepared the contract. Here, Lachlan Elder incorporated the survey diagram into its own document. Lachlan Elder included it to promote the sale of the Rednal Street property. In addition, the survey diagram was accompanied by other materials in the brochure, such as a photograph of the rear of the property, which showed the swimming pool and the back fence. The survey diagram was incorporated in such a way that while the reasonable potential purchaser would have been aware that Lachlan Elder had not prepared the diagram, the reasonable potential purchaser would not have been able to identify the true author of the diagram. Significantly, there was no conduct of the agents in Argy comparable to that which occurred on the occasion of the inspection of the Rednal Street property on 14 February. To the extent that Argy is also an authority for the proposition that the agents' conduct in that case was not misleading or deceptive because the agents disclaimed personal responsibility for the contents of the contract, the case applied an unduly narrow construction of s 52. In the present case, the 124 See Parkdale Custom Built Furniture (1982) 149 CLR 191 at 198 per Gibbs CJ. 125 (1990) 26 FCR 112. 126 Harkins (2002) 55 NSWLR 558 at 567. McHugh circumstances were such as to make it apparent that Lachlan Elder was not the source of the survey diagram. Nevertheless, the facts do not suggest that Lachlan Elder disclaimed any belief in the truth or falsity of the information contained in the survey diagram. For example, the disclaimer stated that all information contained in the brochure "is gathered from sources we believe to be reliable." It may be inferred that Lachlan Elder believed the source of the survey diagram to be a reliable source. For this reason, it is also open to conclude that Lachlan Elder did not disclaim any belief in the truth or falsity of the information in the diagram and was not merely passing on the information for what it was worth. Handley JA also found that the facts in the present case were distinguishable from John G Glass Real Estate on the basis that127: "the agents [in John G Glass Real Estate] claimed relevant expertise, adopted the figures as their own, and put them forward without any reference to their source. In the present case [Lachlan Elder] claimed no relevant expertise, and the diagram itself indicated that it was the work of a professional surveyor." Lachlan Elder did not hold itself out as a professional surveyor or conveyancer or as having particular surveying or conveyancing expertise. However, it did hold itself out as a specialist for the sale of prestige properties in the Pittwater area and was in fact an experienced selling agent of properties in that area. In these circumstances potential purchasers of such properties would be unlikely to regard the agent as merely passing on information about the Rednal Street property, including the location of the swimming pool, "for what it is worth and without any belief in its truth or falsity". It is reasonable to expect potential purchasers, even potential purchasers advised by solicitors, to rely on the accuracy of a survey diagram reproduced in a promotional brochure for the sale of a property. Handley JA also relied on statements by the Full Federal Court in Saints Gallery Pty Ltd v Plummer, where the Full Court said128: "The reference in Yorke v Lucas … to an express or implied disclaimer of belief in an instruction conveyed by an agent does not involve that an agent who does believe his client, and makes that fact apparent, may not at the same time impliedly disclaim personal responsibility for what he conveys." (original emphasis) 127 Harkins (2002) 55 NSWLR 558 at 570. 128 (1988) 80 ALR 525 at 530. McHugh Saints Gallery held that an agent may not contravene s 52 if it impliedly disclaims personal responsibility for the information that the agent conveys, notwithstanding that the agent believes the information and makes that fact apparent to the complainant. However, this proposition has limited application in the present case. As the Full Federal Court acknowledged in Saints Gallery, regard must be had to the facts and circumstances of each case. Indeed, Saints Gallery was unique in that the complainant art dealer admitted that he did not rely on the gallery's ability to judge the authenticity of the paintings that the gallery had offered to sell to the complainant. The complainant was also aware that the gallery in the ordinary course of its business did not deal in paintings of the kind offered to the complainant. Dean v Allin & Watts In considering whether Lachlan Elder had assumed responsibility in relation to the survey diagram in the brochure, Handley JA applied the decision of the English Court of Appeal in Dean v Allin & Watts129. His Honour found that the principles expressed in Dean concerning the role of solicitors also applied to other agents such as real estate agents130. Lightman J, who delivered the principal judgment of the Court of Appeal in Dean, said131: "The greatest caution is required in treating statements made by a solicitor in the course of conveyancing transactions and the like on or in accordance with the instructions of his client as representations made by the solicitor rather than as 'conveyed' by him as (in effect) a medium of communication or messenger for his client, for this may readily be assumed to be understood to be part of his role in the transactions." However, in the context of a claim brought under s 52 of the Act, Dean is not a persuasive authority. Whether or not the warning of Lightman J is relevant in relation to common law negligent misstatement cases (of which Dean was one), it is not appropriate in relation to s 52 cases. As I have indicated earlier, common law principles do not govern the operation of s 52. In the oft-quoted passage from Brown, Fox J said132: 129 [2001] 2 Lloyd's Rep 249. 130 Harkins (2002) 55 NSWLR 558 at 568. 131 [2001] 2 Lloyd's Rep 249 at 257. 132 (1981) 35 ALR 79 at 86. McHugh "In my view effect should be given to the ordinary meaning of the words used. They should not be qualified or (if it be possible) expanded, by reference to established common law principles of liability." Thus, while common law principles may "provide useful guidance in relation to some aspects of the consumer protection provisions of the [Act]", there are "important limitations to this approach."133 In Parkdale Custom Built "Likewise, the operation of s 52 is not restricted by the common law principles relating to passing-off. If, as I consider, the section provides the public with wider protection from deception than the common law, it does not follow that there is a conflict between the section and the common law. The statute provides an additional remedy." Accordingly, the Court of Appeal erred in treating the principles expressed in Dean as being directly applicable to the present case. The disclaimer Where a corporation passes on information supplied by another, one circumstance that may preclude a finding of a contravention of s 52 is where the corporation expressly or impliedly disclaims any belief in the truth or falsity of the information135. Another circumstance is where the corporation expressly or impliedly disclaims personal responsibility for what it conveys136. The presence and impact of a disclaimer are particularly relevant where the impugned conduct is alleged to have induced a particular course of conduct by the complainant. The issue arises because of the nature of the remedy sought by the complainant, which requires the complainant to show damage. The following principles apply137: The complainant must rely on the representation or conduct. 133 Cassidy (2004) ATPR ¶41-980 at 48,506 per Stone J. 134 (1982) 149 CLR 191 at 205; quoted with approval in Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 at 83 [97]. 135 Yorke (1985) 158 CLR 661 at 666 per Mason ACJ, Wilson, Deane and Dawson JJ. 136 Saints Gallery (1988) 80 ALR 525 at 530. 137 See Sutton (1987) 73 ALR 233 at 240, citing Gould v Vaggelas (1985) 157 CLR 215 at 236 per Wilson J; see also Benlist Pty Ltd v Olivetti Australia Pty Ltd (1990) ATPR ¶41-043 at 51,592 per Burchett J. McHugh If a material representation is made (or if certain conduct occurs) which is calculated to induce the complainant to enter into a contract and that person in fact enters into the contract, an inference arises that the person was induced to do so by the representation or the conduct. The inference may be rebutted by showing, for example, that the complainant, before entering into the contract, had actual knowledge of the true facts and knew them to be true or that the complainant did not rely on the representation or the conduct. The representation or conduct need not be the sole inducement. It is sufficient that it played some part, even if only a minor part, in contributing to the formation of the contract. As I have indicated, the intent of the corporation is not relevant for the purposes of s 52. As a result, a disclaimer as to the truth or otherwise of a representation does not, of itself, absolve the corporation from liability. This is not to say that a disclaimer should be ignored for the purposes of assessing whether a contravention of s 52 has occurred. As Miller notes in Miller's Annotated Trade Practices Act138, the conduct must be considered as a whole. This requires consideration of whether the conduct in question, including any representations and the disclaimer, is misleading or deceptive or is likely to mislead or deceive. If a disclaimer clause has the effect of erasing whatever is misleading in the conduct, the clause will be effective, not by any independent force of its own, but by actually modifying the conduct. However, a formal disclaimer would have this effect only in rare cases. Thus, in Benlist Pty Ltd v Olivetti Australia Pty Ltd, Burchett J said139: "It has been held on many occasions that the perpetrator of misleading conduct cannot, by resorting to [a disclaimer] clause, evade the operation of the [Act]. Of course, if the clause actually has the effect [of] erasing whatever is misleading in the conduct, the clause will be effective, not by 138 Miller's Annotated Trade Practices Act, 25th ed (2004) at 475. Miller states that the courts should consider "whether the representation in question, including the disclaimer or exclusion clause, is misleading or deceptive", which appears to confine the conduct to representations (at 475); however, he observes earlier that s 52 is not confined to circumstances which constitute some form of representation 139 (1990) ATPR ¶41-043 at 51,590. See also the similar remarks of his Honour in Lezam (1992) 35 FCR 535 at 557. McHugh any independent force of its own, but by actually modifying the conduct. However, I should think it would only be in rare cases that a formal disclaimer would have that effect." (emphasis added) Austin J thought that the disclaimer made by Lachlan Elder in the brochure formed part of the representations made by Lachlan Elder when staff of the company distributed the brochure140. His Honour found that the disclaimer contained the following propositions141: the information contained in the brochure had been gathered by Lachlan Elder from sources which Lachlan Elder deemed or believed to be reliable; and Lachlan Elder could not guarantee the accuracy of the information and interested persons should rely on their own inquiries. His Honour thought that its effect with respect to the location of the mean high water mark in relation to the swimming pool was to say to prospective purchasers142: "Here is a diagram showing that the mean high water mark is located beyond the swimming pool. It is a diagram provided to us from a source that we believe to be reliable. However, we cannot vouch for the accuracy of what is shown in the diagram, and if the matter interests you, you should rely on your own inquiries." This finding led Austin J to conclude that the class of potential purchasers of waterfront homes in a price bracket above $1 million, independently advised by their own solicitors, would be unlikely to be misled by the brochure read as a whole, including the two propositions143. Handley JA did not accord the disclaimers (that appeared "in fine print at the foot of the front and back pages") "decisive significance" on the question of Lachlan Elder's liability under s 52144. Nevertheless, his Honour regarded the 140 Butcher [2001] NSWSC 15 at [169]. 141 Butcher [2001] NSWSC 15 at [168]. 142 Butcher [2001] NSWSC 15 at [169]. 143 Butcher [2001] NSWSC 15 at [170]. 144 Harkins (2002) 55 NSWLR 558 at 568-569. McHugh disclaimers as "relevant as showing that the agents did not accept responsibility for the accuracy of the information in the brochure."145 This finding of Handley JA, however, is inconsistent with the accepted line of Federal Court authority that a disclaimer is only effective if it actually modifies the impugned conduct such that the conduct as a whole may be seen as not misleading, not because the disclaimer has any independent force of its own. It is also inconsistent with the finding of the Full Federal Court in John G Glass Real Estate. A disclaimer in a promotional brochure may purport to represent that the corporation does not accept responsibility for the accuracy of the information in that brochure, but it will only be effective if it operates to modify the corporation's conduct. The case law suggests that disclaimers that appear in small print at the foot of marketing brochures are rarely effective to prevent conduct from being found to be misleading or deceptive or likely to mislead or deceive. If misleading conduct has induced a contract, that fact cannot be negated by the mere circumstance that there is a statement to the contrary146. In Benlist, for example, the disclaimer appeared in a footnote on the back cover of a brochure prepared in connection with the sale of a city building, and in another section of the brochure. The disclaimer stated that all descriptions, dimensions and other details "are given in good faith and are believed to be correct, but any intending purchasers should not rely on them as statements or representations of fact and must satisfy themselves by inspection or otherwise as to the correctness of each of them"147. A disclaimer in similar terms appeared at the foot of the proposed lease Schedule for the commercial premises in Lezam Pty Ltd v Seabridge Australia Pty Ltd148, namely that all descriptions, dimensions and other details "are given in good faith and are believed to be correct but any intending tenant/purchaser should not rely on them as statements or representations of fact but must satisfy themselves by inspection or otherwise as to the correctness of each of them". The disclaimer in the marketing dossier prepared by the real estate agents in John G Glass Real Estate stated149: 145 Harkins (2002) 55 NSWLR 558 at 569. 146 See, eg, Bowler v Hilda Pty Ltd (1998) 80 FCR 191 at 207 per Heerey J; Burg Design Pty Ltd v Wolki (1999) 162 ALR 639 at 648-650 per Burchett J. 147 Benlist (1990) ATPR ¶41-043 at 51,590. 148 (1992) 35 FCR 535 at 539. 149 (1993) ATPR ¶41-249 at 41,358. McHugh "The information contained herein has been prepared with care by our Company or it has been supplied to us by apparently reliable sources. In either case we have no reason to doubt its completeness or accuracy. However, neither John G Glass Real Estate Pty Limited, its employees or its clients guarantee the information nor does it, or is it intended, to form part of any contract. Accordingly, all interested parties should make their own enquiries to verify the information as well as any additional or supporting information supplied and it is the responsibility of interested parties to satisfy themselves in all respects." In all three cases, the Federal Court found that the disclaimer did not operate to enable the conduct of the corporation to be seen as conduct that was not misleading or deceptive or likely to mislead or deceive. The disclaimer in the present case stated that Lachlan Elder "cannot guarantee [the information's] accuracy and interested persons should rely on their own enquiries." But that disclaimer does not allow Lachlan Elder to disclaim personal responsibility for the information conveyed by the inclusion of the survey diagram. In all the circumstances of the case – the prominent display of the survey diagram in the brochure, the conduct and statements of Mr Spring when he distributed the brochure to the purchasers, the subsequent conduct and statements of Messrs Spring and Elder, and the unavailability of the contract of sale until just before the auction – the disclaimer did not operate to obliterate the effect of Lachlan Elder's misleading or deceptive conduct. Moreover, as Burchett J acknowledged in Lezam150, once misleading or deceptive conduct is shown, the Act prevails over the disclaimer. It would be contrary to the consumer protection objects of the statute and to public policy for disclaimers to deny a statutory remedy for offending conduct under the Act151. Order in respect of the appeal In my opinion, the appeal must be allowed. The cross-appeal and application for special leave to appeal In relation to the cross-appeal and the application by the vendor for special leave to appeal, I agree with the orders proposed by Kirby J and with his Honour's reasons. 150 (1992) 35 FCR 535 at 557. 151 Henjo Investments (1988) 39 FCR 546 at 561 per Lockhart J, Burchett and Foster JJ concurring; Lezam (1992) 35 FCR 535 at 557 per Burchett J. Kirby 163 KIRBY J. The question in this appeal is whether the appellants, Mr Jeffrey Butcher and Ms Judith Radford, have established error in the approach taken by the courts below to the application of the Trade Practices Act 1974 (Cth) ("the Act") to their dispute with the respondent, Lachlan Elder Realty Pty Limited. Error has been shown. It requires correction of the orders of the Court of Appeal of the Supreme Court of New South Wales152 and of the primary judge (Austin J)153. The result has consequences for a cross-appeal brought by the respondent and also for an application by Mr Robert Harkins to reopen an associated application for special leave to appeal that was earlier rejected154. Such proceedings were brought defensively in the interests of the respondent and Mr Harkins. They need to be considered in the event (as I would hold) that the appeal succeeds. The appeal succeeds because of the application of the Act to the circumstances. Those circumstances involve dealings between the respondent, a real estate agent, and the appellants, would-be purchasers of real property which the agent was seeking to sell on behalf of Mr Harkins. Once again, this Court gives the Act, with its large purposes of consumer protection and regulation of corporate conduct in Australia, an unduly narrow construction155. That construction is warranted neither by the language of the Act, nor by the stated objects of the Parliament, nor by past authority. A corporation engages in "conduct that is misleading" The simple facts of this case cannot escape certain fundamental realities. The respondent prepared, and an employee of the respondent on its behalf gave to the appellants, a one-sheet promotional pamphlet depicting (amongst other things) the boundary of the valuable waterfront property that the respondent was commissioned by Mr Harkins to sell. The respondent was acting for reward. The effective boundary so shown was designated by the initials "MHWM" (mean high-water mark). As portrayed in the pamphlet, the "MHWM" line ("the 152 Harkins v Butcher (2002) 55 NSWLR 558. 153 Butcher v Harkins [2001] NSWSC 15. 154 See the reasons of Gleeson CJ, Hayne and Heydon JJ ("joint reasons") at [77]. 155 cf Qantas Airways Ltd v Aravco Ltd (1996) 185 CLR 43; Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494; Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591; I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109. See also Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (2003) 214 CLR 51 at 79-80 [65]-[66]. Kirby boundary line") was well clear of a swimming pool erected in front of a house built on the subject land. It lay between the house and a deep waterfrontage with the Pittwater, an inland waterway north of Sydney. In the courts below it was held that, contrary to the pamphlet, the boundary line actually ran through the swimming pool. The appellants had made known to the respondent the fact that the location of the boundary line was important to them because of plans they had to relocate the swimming pool, so as to afford a larger open area in the front of the house for entertainment purposes. The appellants wished to use the property as their residence; but also in connection with a business in which they were engaged. But for the misdescription of the location of the boundary line of the property, the appellants would not have bid for the land at auction. Nor would they have agreed to execute a contract as they did. They wanted to buy a residence, not a "bundle of trouble". Under that contract, a substantial deposit of $200,000 was released to Mr Harkins156. In consequence of that fact and other proved circumstances, the appellants suffered loss and damage because of the respondent's misdescription of the property. That loss and damage flowed from the "conduct" of the respondent, a corporation, in the course of its business in preparing and distributing the pamphlet. It was conduct that was "misleading or deceptive or … likely to mislead or deceive"157. The impediments to recovery under the Act, suggested as the ground to permit the respondent to escape liability to the appellants, were disclaimers printed in tiny typeface on each side of the pamphlet, together with evidence relating to the relationship of the parties. These considerations are now held sufficient to afford the respondent an exemption from liability under the Act. I would reject that contention. For me, this is a clear case of the application of the Act. The appellants are entitled to succeed. The facts, legislation and decisional history The facts and legislation: Most of the background facts are set out in the reasons of Gleeson CJ, Hayne and Heydon JJ ("the joint reasons")158 and the reasons of McHugh J159. With a few additions, to which it will be necessary to refer, and some added comments, I am content to adopt the same description of those events. 156 [2001] NSWSC 15 at [67]. 157 The Act, s 52(1). See joint reasons at [31]. 158 Joint reasons at [1]-[20]. 159 Reasons of McHugh J at [80]-[82], [89]-[91]. Kirby Contained in other reasons are references to the provisions of the Act (ss 52 and 82(1)) chiefly raised by the appeal160, together with the relevant pleading of the appellants' cause of action161, the reasons of the primary judge focussing on the printed disclaimer162 and the conclusions of the Court of Appeal relevant to the same and other issues163. Also contained there are some of the authorities concerning the requirements of the Act concerning "misleading or deceptive conduct" as explained both by this Court164 and by other appellate courts165. For the moment, it is sufficient to accept the foregoing. However, this brings me to the point where I differ from the majority. In these reasons, I will use the same descriptions as appear in the joint reasons. Thus, I will call the appellants "the purchasers", the respondent "the agent", Mr Harkins "the vendor" and the subject land, facing the Pittwater, "the Rednal land"166. An essential difference of approach: At the heart of the difference between my reasons and those of the majority lies a different conception of the intended operation of the provisions of the Act invoked in this case. If, in a transaction such as was entered into between the parties, liability under the Act may be escaped in circumstances such as these (and particularly by reliance on a printed disclaimer of the kind involved in this case) this Court might just as well fold up the Act and put it away so far as dealings between real estate agents and purchasers are concerned. By similar printed disclaimers, such agents and others like them will walk straight out of the operation of the Act in many and varied circumstances. Neither the printed disclaimers nor the other circumstances the agent relies upon, permits it to avoid the Act. Adopting such a view of the Act would not only be contrary to its proclaimed objectives. It would also be destructive of the beneficial operation of the Act in requiring corporations, engaged in trade and 160 Joint reasons at [31]; reasons of McHugh J at [96]-[98]. 161 Joint reasons at [31]-[32]. 162 Joint reasons at [23]; reasons of McHugh J at [85]-[86]. 163 Joint reasons at [24]-[25]; reasons of McHugh J at [87]. 164 In Yorke v Lucas (1985) 158 CLR 661 at 666. See joint reasons at [38]. 165 See joint reasons at [61]-[76]; reasons of McHugh J at [111]-[112], [139]-[149]. 166 Joint reasons at [1]. Kirby commerce in Australia, to desist from conduct that is misleading or deceptive or likely to mislead or deceive. The large purposes of the Act: The Act is intended, relevantly, to afford recovery to persons who suffer loss or damage by conduct in contravention of Pt V. Yet, in some ways more important, s 52(1) of the Act is addressed to the impugned conduct of corporations engaged in trade or commerce. That sub-section sets standards for corporate behaviour, care and responsibility. Disclaimers there can be. But, if they are to be effective, the language of the Act, legal authority and legal principle suggest that they must be made much more clearly than those invoked here were. Tiny printed disclaimers and inferences to be implied from the facts would not ordinarily have the effect of exempting a corporation from the regime established by the Act. The interpretation now adopted reduces the Act to a paltry thing of little real protection for the multitude of persons whom the Parliament intended to protect. It is inappropriate for this Court to send a signal to the industry of corporate real estate agents, and other industries, that they can avoid the requirements of the Act by the simple expedient of publishing disclaimers illegible to many eyes and easily overlooked. It is no answer to the operation of the Act that those who suffer damage by "conduct that is misleading" can be expected to get their own solicitors and surveyors to advise them. In many cases, they can. But the Act takes effect first and independently of that entitlement. It imposes duties and liabilities. In this case, those duties and liabilities applied to the agent and were contravened. Response to the agent's arguments General considerations: The foregoing distinction explains the source of the difference between the joint reasons and my own. However, my approach is reinforced by the established authority of the courts concerning the operation of ss 52(1) and 82(1) of the Act and by expert commentary on the Act. From soon after the Act's enactment, this Court has emphasised that s 52, being expressed in very general terms, is designed to have a "broad reach"167. Its purpose is to protect the consuming public from identified trading practices, specifically from being misled or deceived by the conduct of corporations168. It 167 Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 225 per Stephen J; see also Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (1988) 39 FCR 546 at 554. 168 World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181 at 186-187 per Bowen CJ, 199-200 per Brennan J; see R v Federal Court of Australia; Ex parte Pilkington ACI (Operations) Pty Ltd (1978) 142 CLR 113 at 128 per Mason J. Kirby is not necessary for the party seeking relief under the Act to establish an intent to mislead or deceive on the part of the impugned corporation. Such an intent is not an essential element to establish contravention of s 52(1) of the Act169. It was not suggested in the present case that the agent set out deliberately to mislead or deceive the purchasers. Fraudulent misrepresentation was initially alleged against the vendor. It was not established. That failure, properly, had consequences for the costs order substituted by the Court of Appeal for that made at trial170. However, the absence of a suggestion of deliberate deception is in no way fatal, or ultimately even relevant, to the case brought by the purchasers against the agent. The language of the Act is expressed in the alternative ("conduct that is misleading or deceptive"). It was therefore enough for the purchasers to demonstrate that the agent's conduct was "misleading". In his reasons171, McHugh J demonstrates, by reference to a line of decided cases, that, for the purposes of s 52, "conduct" is not limited to "representations", and that representations as understood in the general law need not be proved to have been made for a claim under s 52 to succeed. So much is also accepted by the majority in their joint reasons172. "Conduct" is a broader word, deliberately chosen. It is deployed in the Act, a consumer protection statute, to give it a wide application to activities that are likely to mislead or deceive consumers. Even if, however, the purchasers were confined in their claim to "conduct" constituted by the "representations" made by the agent173, that conduct was, in my view, unarguably "misleading". It involved the preparation and distribution of a pamphlet that identified the boundary of the subject land by reference to the MHWM line, well outside the swimming pool on the Pittwater side of the property. As this was found to be incorrect174, subject to the disclaimers and the 169 Hornsby Building Information Centre (1978) 140 CLR 216 at 228. 170 (2002) 55 NSWLR 558 at 576 [96], applying Parker v McKenna (1874) LR 10 Ch App 96 at 123 per Lord Cairns LC. 171 Reasons of McHugh J at [102]-[110]. 172 Joint reasons at [32]. 173 Joint reasons at [32]; cf Henjo (1988) 39 FCR 546 at 555. 174 The primary judge found that the mean high-water mark traversed the swimming pool on the subject land: [2001] NSWSC 15 at [80]-[82]. This was contrary to the appearance of the location of the mean high-water mark indicated in the published diagram. Kirby other supposed grounds of exemption, the case of "conduct that is misleading" was made out. The provisions of the Act for the protection of the purchasers were therefore engaged. Under s 82(1) of the Act, the purchasers thus became entitled to recover the "loss or damage [caused] by [that] conduct … by action against that other person", that is, the agent. The supposed contextual exemptions: So what are the reasons relied on by the agent to escape what seems to be a fairly clear case of a corporation engaging in "misleading" conduct? Various arguments have found favour with the majority. They do not convince me. First, it is suggested that the agent did no more than to convey representations to the purchasers concerning the Rednal land that were being made by the vendor. I cannot accept this interpretation of the facts. It would impermissibly erode the operation of the Act which, by its terms, applies to corporations for their own conduct. The agent chose to convey the representations that it did. For that conduct, it must accept accountability measured against the requirements of the Act. Others may indeed be liable, either under the Act or by virtue of other legal breaches. But the Act is addressed to the "conduct" of corporations. Corporations must conform to its requirements. If they engage in "misleading" conduct, it is no excuse that others may have done so too. The primary judge specifically found that the agent's pamphlet conveyed a representation as to the location of the pool wholly within the freehold175 and that the vendor's conduct in that respect was misleading or deceptive176. This was not a case where the agent was merely passing on information supplied by another within the words used by this Court in Yorke v Lucas177. Nor was it a case where the agent was simply passing on the information "for what it is worth". Nor was it an instance where information was incorporated by a course of past dealings between the parties178. Here, in a unique dealing, the agent was performing the corporation's precise function, namely promoting the sale of the subject land to purchasers and describing that land. The agent did not have to include in its pamphlet the diagram showing the boundary line designated by the mean high-water mark. Having done so, it was obliged to accept the legal consequences. Clearly, its conduct occurred in the performance of its professional activity as a corporate real estate agent. Moreover, it acted as 175 [2001] NSWSC 15 at [115], [128]-[130]. 176 [2001] NSWSC 15 at [144]. 177 (1985) 158 CLR 661 at 666. 178 cf D J Hill & Co Pty Ltd v Walter H Wright Pty Ltd [1971] VR 749; McCutcheon v David Macbrayne Ltd [1964] 1 WLR 125; [1964] 1 All ER 430. Kirby it did for its own economic advantage. It stood to gain the agent's fee for the sale of the property. The more attractive it could make the property seem, the more likely was it to succeed in effecting a sale. Self-evidently the agent would have known that the position of the boundary line of the land abutting the Pittwater was likely to be important to a purchaser. The property had advantages. These were shown to excellent effect in the pamphlet prepared by the agent. The large photograph of the deep waterfrontage of the land, viewed from the water, was the dominant image of the pamphlet, and understandably so. That was the property's chief selling point. However, the property also had an obvious defect. This was the very high development-to-land ratio. Most of the subject land was taken up by the three developments shown in the diagram. They were an extremely large garage, the "brick house" residence and the swimming pool. This left a relatively small area between the "brick house" and the Pittwater available for use by a purchaser for living and entertainment purposes. The limits of the availability of the land for such purposes were fixed by the line shown on the deposited plan constituted by the mean high-water mark. As the agent would well have known, that line was therefore of great significance to potential buyers. It indicated the extremity of the land available for redevelopment by a purchaser. Moreover, whereas the boundary line indicated in the diagram would have been of importance to virtually every purchaser, it was (as the agent knew) of special importance to the appellants. Mr Butcher made clear the importance of securing a larger open space for entertainment and that a redesign of the position of the pool would be necessary. He did this in a conversation with Mr Elder, a director and principal of the agent. The primary judge accepted what Mr Butcher said in this regard. It was not relevantly the subject of much contest. The only available inference therefore is that Mr Elder, for the agent, affirmed the correctness of the survey diagram by his response to Mr Butcher's plans to reposition the swimming pool179. Certainly, he said nothing to indicate any doubts concerning the description in the diagram of the position of the mean high-water mark and the boundary that it apparently signified. It follows that this was not a case of immaterial "puffery" about a property for sale by a real estate agent, as might sometimes appear innocently enough in a promotional pamphlet. It was a representation of a very important detail concerning the subject property. Important for virtually every purchaser of such a valuable piece of land. Specially important for the appellants because they had made that fact known to the agent. 179 See [2001] NSWSC 15 at [16]-[17], [22], [26]. Kirby Secondly, I cannot agree that personal characteristics of the parties180 in some way exempted the agent from the obligations imposed by the Act to avoid "misleading" conduct in its pamphlet. For example, the facts that Mr Butcher had at one stage enjoyed a high profile as a former professional football player, was a successful businessman, had decided with Ms Radford to engage in a venture of prudent investment in real estate or was intelligent, shrewd and self- reliant are all ultimately irrelevant considerations. It may be true that the Act is vigilant to protect the weak, the impressionable and the vulnerable. But there is nothing in its language, or purpose, to exclude from its protection, in a proper case, domestic partners who rely on the printed material of a real estate agent when proceeding to purchase a significant parcel of land. Throughout Australia it is not at all uncommon for individuals and couples to endeavour to improve their economic position by acquiring, and ultimately reselling, valuable parcels of real property. To exclude from the protections of the Act those who do so, because they are investors or shrewd and so forth is as irrelevant to the language and purpose of the Act as to exclude them because they were once professional footballers. The Act is a law of general application. It focuses on the conduct of corporations. None of the personal considerations nominated in this case, to exclude the purchasers from the Act's protection, is in the slightest convincing. Thirdly, it is true that land title can sometimes give rise to complex questions of law and fact181. I would accept that, especially in the purchase of a valuable allotment of land, purchasers will ordinarily be expected to obtain competent legal advice of their own. However, that consideration is extraneous to the issue of whether a corporation, dealing with the purchaser, has breached its own anterior and separate legal obligation not to engage in "conduct that is misleading" under the Act. In a particular case, an issue might be presented as to whether the chain of causation of the purchaser's loss or damage (signified by the preposition "by" in s 82(1) of the Act) has been snapped. However, in the present case, it would not have been in the least unreasonable, given the exigencies of the sale of the land by auction, for any detailed examination of the line marking the waterfront boundary of the property to be conducted by the solicitors after the purchasers had agreed to acquire the land at the notified auction on 18 February 1997. That is what the purchasers did. It was at the auction that the purchasers suffered their damage. They did so because they then took steps that included the acceptance of legal liability to the vendor. That liability was incurred because of the factual 180 Joint reasons at [41]. 181 Joint reasons at [43]. Kirby misrepresentation (as it was found) that the boundary line of the acquired land was clear of the swimming pool on the waterfront side of the Pittwater. Assuming that it was ever the inclination of the purchasers to become involved in a contest over disputed title, and before there was time to conduct and resolve title investigations, the agent's pamphlet made a representation to the purchasers of the whereabouts of the boundary line to the land offered for sale. It was a representation of significance. On the face of the pamphlet, there was nothing to suggest that it was anything but a representation of an undisputed fact, namely where the boundary line lay. Lawyers know that title boundaries, particularly where fixed by reference to mean high-water mark, can sometimes present complex questions182. However, the Act is not concerned with the classification of what conduct is "misleading" to lawyers. It is sufficient that it should be "conduct", as the preparation and supply of the agent's pamphlet certainly were. The Act protects people such as the purchasers. As a former footballer engaged in a business of carpet cleaning, Mr Butcher and his partner could scarcely be expected to have a familiarity with the nuances of land law. But they could be expected to observe the pamphlet provided to them on behalf of the vendor and to see the boundary line clearly shown in the diagram reproduced there. The only inference available from that diagram was that the mean high-water mark boundary line was well clear of the swimming pool. And, as found, that was incorrect and "misleading". Fourthly, it matters not whether the agent or someone else was the original source of the information in the pamphlet183. It was by the conduct of the agent that the pamphlet was prepared and distributed in support of its corporate activity undertaken for its own profit. Under the Act, the agent was liable for that conduct. At least it was liable unless it made it plain that it was not the source of the information or that it was merely passing the information on "for what it is worth". That was not the proper characterisation of the agent's pamphlet and the diagram that the agent included in it. The significance of the information, its importance to potential buyers, and specifically to the purchasers, was clear. The size of the agent's commission is not determinative184. But the fact that this was "conduct" of a corporation engaged in trade or commerce was conclusive of the application of the Act to 182 Lanyon Pty Ltd v Canberra Washed Sand Pty Ltd (1966) 115 CLR 342; cf Moore, "Land by the Water", (1968) 41 Australian Law Journal 532. 183 Joint reasons at [53]; reasons of McHugh J at [113]-[124]. 184 Joint reasons at [57]. Kirby such "conduct". Prima facie, once the conduct was shown to be "misleading", as the misdescribed boundary line was found to be, that was enough. The purchasers were entitled to invoke the Act to recover the amount of loss or damage occasioned to them by such misleading conduct. To classify the pamphlet as the vendor's document would be to ignore its markings, nature and purpose. The business identity of the agent appears prominently on both sides of the pamphlet. The pamphlet originated in the agent's office. It was designed for the agent to achieve the sale that the agent was seeking to effect on behalf of the vendor. It contained promotional photographs and statements inferentially prepared by or for the agent. As befitted such a valuable property (inevitably involving a substantial agent's fee) the document is attractive and seemingly accurate185. But in an important respect, it was found to have been inaccurate. The appearance, impression, character and object of the document deny any suggestion that it was someone else's document. It was the agent's production. Save in the one critical particular, it was a professional job, intended to perform the agent's function as such. For its contents, the Act required the agent, as a corporation, to accept responsibility for any misleading or deceptive conduct. The allegedly "extreme consequences" considered during the hearing of this appeal, and now repeated by the joint reasons186, of liability for other possible representations conveyed in pamphlets such as the agent's are not relevant to (and should not distract this Court from) the question whether the representation actually made by the agent in this case contravened s 52. Whether, for example, a pamphlet advertising land for sale amounts to a representation by a pamphlet's author that the vendor has a good title to the land187 is not a question requiring resolution in this case; I would reserve comment on such a question to a case that squarely raises the point. However, what the agent's pamphlet did expressly indicate was the location of the boundary line in the survey diagram. That indication put the representation distinctly within the purview of the Act. This Court's function is to resolve questions before it. We are deflected when we needlessly resort to hypotheticals not relevant to the question in issue. 185 The pamphlet included specific and precise information as to the land area (890 square metres) and as to current rates (council rates $2,931.75 per annum, water rates $87.90 per quarter (plus usage) and a permissive occupancy fee ("$900 approx")). 186 Joint reasons at [59]. 187 See joint reasons at [59]. Kirby The written disclaimers are ineffective Disclaimers in the context of the Act: The foregoing analysis brings me to the core of the agent's claim for exemption from the operation of the Act. Its argument was advanced even if otherwise the Act was found to apply by reason of misleading conduct on the part of the agent. The agent relied on the two printed disclaimers appearing on each side of the agent's pamphlet. The terms of the disclaimers are set out below188. Neither of them, nor both of them together, has the consequence urged by the agent. With respect, I do not agree that the disclaimers should be read in the way suggested by the primary judge189, upheld by the Court of Appeal190 and now by the majority of this Court. The disclaimers' tiny typeface: As a matter of evaluation of the facts, it is misleading to read the disclaimers as if they appeared with equal prominence along with other details, as might be inferred from the reproduction of their text in judicial reasons. A number of larger typefaces are used in the document. The disclaimers, however, appear in a typeface that can only be described as tiny. That on the rear of the pamphlet is even smaller than that on its face. The only print appearing in the document that is smaller comprises some of the handwritten details of the surveyor's diagram, inferentially photo-reduced and reproduced on the reverse of the pamphlet. A youth with 20/20 vision could possibly read the disclaimers without undue difficulty. But I doubt that any ordinary adult could do so without some form of magnification. I reproduce in these reasons both the disclaimers in the typeface in which they each appear in the agent's pamphlet and, for purposes of comparison, the typefaces appearing immediately next to them on the pamphlet page191: 188 These reasons at [201]. 189 Butcher [2001] NSWSC 15 at [169]. 190 Harkins (2002) 55 NSWLR 558 at 566-570 [37]-[52]. 191 Necessarily, appearing as they do here in judicial reasons that focus on their legal significance, and positioned at a different place on the page, the disclaimers attract an attention in these reasons that they do not enjoy in the agent's pamphlet. Kirby Side 1: "NORTH EAST FACING DEEP WATERFRONT" "Lachlan Elder Realty Pty Ltd ACN 002 332 247. All information contained herein is gathered from sources we believe to be reliable. However we cannot guarantee it's [sic] accuracy and interested persons should rely on their own enquiries." Side 2: "nobody does it betterTM" " All information contained herein is gathered from sources we deem to be reliable. However we cannot guarantee it's [sic] accuracy and interested persons should rely on their own enquiries. Williams Design Associates ph …" Viewing disclaimers in context: Disclaimers of such a kind must be considered as they appear in a pamphlet designed to communicate information to the recipient. The cover comprises a large and arresting photograph of the property with inserted smaller photographs, also attractive. The print size of most of the text is large and clear to read, much of it without the need for magnification. The diagram on the reverse is also clear enough. At least, this is so as it shows the boundary line, the subject of the present dispute. In such a context, the typeface used for the printed disclaimers suggests (and I think was intended to suggest) that the ordinary person reading the pamphlet did not need to bother with information so insignificant that it could be reproduced in such a typeface. In the agent's document of attractive photographs and bold assertions, clearly and sharply displayed (such as "North East Facing Deep Waterfront" on both sides and with the inscription "L J Hooker, Mona Vale, Nobody Does it Better"), who would bother to read written disclaimers presented in such tiny print? Presentation of the disclaimers: This impression is reinforced by the position in which the disclaimers appear on the document. Both appear below the line. That is to say, the one on the front appears below the attractive photographs that capture and hold the eye. On the reverse side, the disclaimer appears in even smaller typeface: below a dark line that crosses the entire page. Presentationally, these disclaimers do not appear as true communications to the readers of the pamphlet. They are placed symbolically outside the sphere of such communication. It is as if the agent (or the designer on behalf of the agent) is telling the reader of the pamphlet in its layout: "You don't need to Kirby worry about this. If it had been important, we would not have put it where it is and printed it in such an unfriendly size." Such a presentation of the disclaimers can be likened to the minuscule notes, published in obscure places in official reports, which, examined with a magnifying glass, typically disclose insignificant information, such as the identity of the government printer, the designer or some other data immaterial to the majority of readers. To suggest that such subscriptions constitute a communication of meaningful information is to defy common experience and half a century of legal efforts to discourage such ploys by denying them legal effectiveness192. No oral reinforcement of disclaimers: Mr Butcher (for the purchasers) asserted that he had not read the disclaimers before the contract to buy the Rednal land was executed. He did, however, see and rely on the mean high-water mark boundary line appearing in the diagram reproduced in the pamphlet. The finding by the primary judge that the purchasers would not have acquired the land had they known that the mean high-water mark traversed the swimming pool, indicates an acceptance that the written disclaimers had not entered into the purchasers' conscious evaluation of the communications in the pamphlet. Having regard to the totality of the circumstances and the appearance of that document, this conclusion is unsurprising. An employee of the agent initially gave the pamphlet to Mr Butcher. That employee did so on behalf of the agent which, as a corporation, could only act through its officers and employees. According to Mr Butcher, at the time he was given the multicoloured pamphlet the employee said193: "These are all the details for the property. You have a full coloured brochure on the front and all the council outgoings land survey etc on the rear. That is everything you need to know." Save for the printed disclaimer, neither the employee nor Mr Elder, for the agent, indicated any doubt or question concerning the boundary line obliging prior investigation. In particular, the agent took no steps to ensure that its name 192 The Balmain New Ferry Co Ltd v Robertson (1906) 4 CLR 379 at 390 per O'Connor J, affd Robertson v Balmain New Ferry Co Ltd [1910] AC 295 (PC); Thornton v Shoe Lane Parking Ltd [1971] 2 QB 163 at 169; Gillespie Bros & Co Ltd v Roy Bowles Transport Ltd [1973] QB 400 at 415; Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 at 204-205, 229; Baltic Shipping Co v Dillon (The Mikhail Lermontov) (1991) 22 NSWLR 1 at 8-9, 24-25 (CA). 193 [2001] NSWSC 15 at [16]-[17]. Kirby was neither associated with, nor supported the accuracy of, that part of its pamphlet that included the survey diagram194. It was accepted on behalf of the purchasers that, by clear disclaimers, corporations such as the agent could exempt themselves from liability for "conduct that is misleading". They could do so by clearly drawing to notice specific matters that should first be checked by the consumer. Alternatively, by clear communication, written or oral, they could indicate that the corporation is merely passing on information supplied by others "for what it is worth". In the agent's pamphlet, there were no such clear indications in writing or print. Nor were they ever offered orally, or separately in writing, by Mr Elder or anyone else on behalf of the agent. By holding that the printed disclaimer in this pamphlet was effective to exclude liability under the Act, this Court, in my respectful view, strikes a blow at the Act's intended operation. Henceforth, in effect, the Act may not operate to protect the ordinary recipient of the representations of corporations engaged in trade or commerce. Many such corporations will be encouraged by this decision to believe that they can avoid the burdens of the Act by the simple expedient of tucking away in an obscure place in minuscule typeface a disclaimer such as now proves effective. This approach is contrary to the language and purpose of the Parliament. The trend of authority on disclaimers: The approach that I favour is consistent with the way that intermediate courts have considered disclaimers when relied on by corporations that are otherwise in default of the Act. Of course, each case depends on its own facts and on the terms, size, prominence and context of the disclaimer in question. Also relevant is whether, on the particular question, the parties had the advantage of legal advice195. However, I could find no case where an Australian court has upheld a printed exemption with an equivalent lack of prominence, content and communicative force to that now upheld196. A similar unwillingness is observable in the courts of other 194 Amadio Pty Ltd v Henderson (1998) 81 FCR 149 at 257. 195 H W Thompson Building Pty Ltd v Allen Property Services Pty Ltd (1983) 48 ALR 196 cf Petera Pty Ltd v EAJ Pty Ltd (1985) 7 FCR 375 at 378; Byers v Dorotea Pty Ltd (1986) 69 ALR 715; Bateman v Slatyer (1987) 71 ALR 553; Clark Equipment Australia Ltd v Covcat Pty Ltd (1987) 71 ALR 367 at 371; Phillip & Anton Homes Pty Ltd v The Commonwealth (1988) ATPR ¶40-838; Keen Mar Corporation Pty Ltd v Labrador Park Shopping Centre Pty Ltd (1989) 67 LGRA 238; Netaf Pty Ltd v Bikane Pty Ltd (1990) 26 FCR 305; Lezam Pty Ltd v Seabridge Australia Pty Ltd (1992) 35 FCR 535. Kirby countries197, reluctant to allow claims to rescind land sale contracts for misrepresentation to be defeated by contractual exemptions. The pattern of past Australian decisions on this topic is unsurprising. The Act generally sets its face against contractual exemptions198. Yet this, in effect, is what a printed disclaimer seeks to secure. To treat the disclaimers in the present case as effective is difficult to reconcile with the high national and economic purposes of the Act. At the very least, if a disclaimer is propounded to exempt a corporation engaged in trade or commerce in Australia from the important obligations of the Act, it is reasonable to demand that this be done clearly, emphatically and so as reasonably to impinge on the consciousness of persons who thereby lose protections enacted by the Parliament for their benefit199. The disclaimer in the present case is neither as detailed nor as prominent as that described in John G Glass Real Estate Pty Ltd v Karawi Constructions Pty Ltd200. It is true that the real estate agents involved in John G Glass promoted themselves as investment consultants. However, the present was hardly a case where the agent was selling an ordinary suburban bungalow. Self- evidently, this was a substantial transaction for vendor, agent and purchasers alike. And the boundary line was included in the pamphlet because it could reasonably be anticipated that it might be relevant to potential purchasers, as in fact it was to these purchasers. For the lay recipient, the pamphlet communicated the location of the waterfront boundary. It did so by the actions of the agent in including the surveyor's diagram in its publication as it did201. The disclaimer that succeeds in this case is also neither as ample nor as prominent as that used by the real estate agent in Benlist Pty Ltd v Olivetti 197 Walker v Boyle [1982] 1 WLR 495; [1982] 1 All ER 634, cited by Pincus J in Byers (1986) 69 ALR 715 at 724-725; see also Laurence v Lexcourt Holdings Ltd [1978] 1 WLR 1128; [1978] 2 All ER 810. 198 The Act, s 68. See also s 68A; cf Indico Holdings Pty Ltd v TNT Australia Pty Ltd (1990) 41 NSWLR 281 at 285-286. The position under the Unfair Contract Terms Act 1977 (UK) appears to be similar: Furmston (ed), The Law of Contract, 2nd ed 199 Davis and Seddon, The Laws of Australia: Contract, (2003) at 466-467 [85]. 200 (1993) ATPR ¶41-249. The terms of that disclaimer appear in the joint reasons at 201 Reasons of McHugh J at [131]-[136]; cf joint reasons at [50]-[51]. Kirby Australia Pty Ltd202. In that case, Burchett J said, correctly, that courts must be on their guard against perpetrators of misleading conduct resorting to such disclaimer clauses to "evade the operation of the Trade Practices Act"203. The decision in the present case rewards illegible disclaimers and promises that, in the future, documents including them stand a real chance of avoiding the operation of the Act. With all respect, that is not the message that I believe this Court should give to real estate agents or any other corporate group. It is contrary to the purposes of the Act. Disclaimers and commercial reality: In its nature, self-interest often inclines parties to attempt to limit proper warnings and to seduce consumers with attractive communications, unembarrassed by messages of restraint. Where the Act would otherwise attach, it is important for this Court, like virtually all intermediate courts before this case, to insist that, to be effective, written disclaimers must be clear, detailed and prominent. None of those adjectives applies to the two disclaimers in this case. So far as the written disclaimer on the reverse side of the pamphlet is concerned, a quick reading would suggest (as the joint reasons acknowledge204) that it is aimed to let the designer off the hook, saying nothing at all about the agent. For centuries, lawyers have lamented the disinclination of their clients to read the fine print of documents. For a long time they have realised that it usually takes binding obligations of professional duty, a peculiar turn of mind and strong spectacles to combine in that result205. Whatever they should do in theory, ordinary people cannot be converted to reading hidden messages contained in tiny print. It requires a large measure of judicial self-deception to say that the purchasers should have read the written disclaimers invoked here. The decisions of the judges below in this case are out of line with the general 202 (1990) ATPR ¶41-043. The terms of that disclaimer appear in the joint reasons at 203 (1990) ATPR ¶41-043 at 51,590. 204 Joint reasons at [49]. 205 Ordinary readers are commonly preoccupied by other considerations and do not have the patience let alone the understanding to read such terms without having them specifically drawn to notice either orally or by some printed or written emphasis: Sydney Corporation v West (1965) 114 CLR 481; MacRobertson Miller Airline Services v Commissioner of State Taxation (WA) (1975) 133 CLR 125 at 136-137; China Ocean Shipping Co Ltd v P S Chellaram & Co Ltd (1990) 28 NSWLR 354; Davis and Seddon (eds), The Laws of Australia: Contract, (2003) at Kirby approach of intermediate courts with larger experience in the application of the Act. Expert commentary reinforces the conclusion: The approaches adopted by intermediate courts have not only been described by expert commentators. They have been strongly endorsed by them with reference to applicable considerations of legal principle and policy. Thus, Professor Davis and Dr Seddon in their new compilation The Laws of Australia: Contract206, drawing on a painstaking analysis of all the cases, say: "The courts have been very consistent in ruling that attempts to exclude liability for breach of s 52 of the Trade Practices Act 1974 (Cth), or its Fair Trading Act equivalents, will be unsuccessful. It is, of course, possible to qualify a statement so that it will not be misleading, but this must be done as part of the statement and not in some separate contractual clause." In short, the qualification must make any exemption very obvious to those unfamiliar with it. The more harsh the exemption, the stricter has been the approach of the courts to the duty of the party that seeks to rely upon it to draw it to specific notice207. The finer the "fine print", the more readily will a court draw a conclusion that insufficient notice has been given, so as to take the provision outside the operation of an effective exemption. In the Australian edition of Cheshire and Fifoot's Law of Contract208, Dr Seddon and Professor Ellinghaus reinforce these conclusions: "[T]he courts have consistently argued that an exemption or exclusion clause in no way diminishes the stark reality of a breach of s 52 or its equivalents, namely, that the representee was misled … It may be possible for an exclusion clause to remove the misleading effect of earlier conduct but the chances of a court being persuaded of this are very small indeed … The presence of such a clause may in fact exacerbate the misleading nature of the impugned conduct ... 206 (2003) at 485 [99] (emphasis added, footnotes omitted). 207 Oceanic Sun Line (1988) 165 CLR 197 at 229. 208 8th Aust ed (2002) at 591-592 [11.133] (footnotes omitted). Kirby In the face of this failure of exemption clauses, ingenious arguments have been employed to try to persuade courts to give effect to such clauses … But to no avail." Similar conclusions have been reached by commentators in other countries209. The language of the Act, as well as legal authority, principle and policy suggest that this Court should not waver on this point. I dissent from the conclusion that we should do so in this case. Appeal, cross-appeal and application The appeal should be allowed: The result is that the purchasers have shown error on the part of the Court of Appeal. That Court should have corrected the erroneous approach to the disclaimers adopted by the primary judge. This conclusion requires that the appeal be allowed. Because this is a minority view, I will deal more briefly with the consequences of my conclusion for the remaining proceedings before this Court. The cross-appeal should succeed: First, the agent cross-appealed defensively to assert an entitlement to contribution from the vendor, in the event that it was held liable under the Act. During the hearing, the agent was given leave to file a cross-appeal against the orders of the Court of Appeal dismissing, as unnecessary, the claim to contribution from the vendor. The vendor was present in court, by his counsel, when that leave was granted. The agent did not seek to argue the cross-appeal. It asked simply that there be a remitter to the Supreme Court to decide the consequential claim for contribution from the vendor. As the agent wishes to contend that any error in the diagram, reproduced in the pamphlet, is that of the surveyor's drawing provided to it by or for the vendor, it is obviously just that it should have the opportunity of advancing its case for such relief. I would so order. 209 Phang, Cheshire, Fifoot and Furmston's Law of Contract, 2nd Singapore and Malaysian ed (1998) at 291 ff. In Furmston (ed), The Law of Contract, 2nd ed (2003) at 34 [1.48], the authors point out that such controversies are to be viewed in the context of a large debate in contract law that followed the attempt in the middle of the twentieth century to use disclaimers and exemption clauses in standard form consumer contracts. Provisions such as s 52 of the Act must be read against this background (referring to Suisse Atlantique Société d'Armement Maritime SA v N V Rotterdamsche Kolen Centrale [1967] 1 AC 361; and Kessler, "Contracts of Adhesion – Some Thoughts About Freedom of Contract", (1943) 43 Columbia Law Review 629). Kirby The vendor's case should not be reopened: Secondly, and also defensively, the vendor appeared at the hearing of the appeal to support a motion to reopen his application for special leave to appeal. Special leave had earlier been denied to the vendor. He wished to advance arguments similar to those raised by the agent in a notice of contention. The vendor and the agent sought to argue that the boundary of the Rednal land had changed by accretion because of the shifting contours inherent in the definition of the land by reference to "the mean high-water mark"210. Amongst other things, these arguments sought to contend that the consequence of changes in the mean high-water mark at the Pittwater was that the boundary line of the Rednal land, fixed by reference to that identification, did not in fact pass through the swimming pool on the land. On the contrary, it was on the Pittwater side of the swimming pool. If this could be shown, by a mixture of law, chance and tidal movements over decades, the result might be that the surveyor's diagram, reproduced in the agent's pamphlet, could (contrary to the assumptions or findings of the courts below) prove to be accurate. The "MHWM" line might then appear roughly where shown in the diagram and not traverse the swimming pool at all. It is enough to explain the nature of the contest which the vendor (and by its notice of contention, the agent) wished to advance in this Court to reveal why these proceedings represent an unsuitable vehicle to permit that course. The proposed issue arises upon a question substantially affected by the way the parties litigated their contest. It raises potential disputes of fact that may not have been explored, or fully explored, at the trial or in the Court of Appeal. The issue of law presented is potentially a difficult one. Theoretically, it could be important for the title of all tidal waterfront land. It is undesirable that such a question should arise for decision by this Court at such a stage and solely in proceedings, otherwise concluded, that are filed defensively. It seems to me that the true location of the Pittwater boundary of the Rednal land was an issue upon which the vendor and the agent bore the forensic onus of establishing, if they so wished, that the mean high-water mark was at a different place, however slight, from that shown in the diagram reproduced in the agent's pamphlet. Particularly would this be so if the propounded propositions created a boundary to the subject land different from that suggested by the location indicated in the deposited plan, when the land was surveyed in 1919 for the purposes of the Real Property Act 1900 (NSW). 210 The issue is explained in the joint reasons at [26]-[30]. Kirby The Court of Appeal found that there had been no accretion to the Rednal land in consequence of the movement of the mean high-water mark211. It found that the boundary of the property to the Pittwater was fixed in time at the 1919 high-water mark line, at least by the Crown grant of the first permissive occupancy in 1964212. At this late stage, and in these proceedings, I would not reopen this Court's earlier decision to refuse the vendor special leave to challenge that finding. Nor would I uphold the agent's argument on the point in its notice of contention, filed in answer to the purchasers' claim under the Act presented in the appeal. Orders It follows that the appeal should be allowed with costs. The orders of the Court of Appeal of the Supreme Court of New South Wales should be set aside. In place of those orders, it should be ordered that the appeal to the Court of Appeal be allowed with costs. The judgment of the primary judge in the proceedings between the appellants and the respondent, Lachlan Elder Realty Pty Limited, should be set aside. In place thereof, judgment at trial should be entered in favour of the appellants. The proceedings should be remitted to the primary judge to find the damages and to decide the costs to which the appellants are entitled against Lachlan Elder Realty Pty Limited, conformably with these reasons. The cross-appeal of Lachlan Elder Realty Pty Limited to the Court of Appeal should be upheld with costs. There should be remitted to the primary judge the determination of the entitlement, if any, of the cross-claimant, Lachlan Elder Realty Pty Limited, to indemnity from the cross-respondent, Robert Harkins, in conformity with these reasons. The costs of such proceedings should be determined by the primary judge in light of their outcome. Leave should be granted to Mr Robert Harkins to file his motion to reopen his application for special leave to appeal. However, that application should be dismissed with costs. 211 (2002) 55 NSWLR 558 at 563 [15]. 212 (2002) 55 NSWLR 558 at 562 [12], 565 [28].

HIGH COURT OF AUSTRALIA APPELLANT AND THE STATE OF WESTERN AUSTRALIA & ANOR RESPONDENTS Garlett v Western Australia [2022] HCA 30 Date of Hearing: 10 & 11 March 2022 Date of Judgment:7 September 2022 ORDER The part of the appeal pending in the Court of Appeal of the Supreme Court of Western Australia removed into the High Court of Australia be dismissed. Representation G R Donaldson SC with R Young for the appellant (instructed by Roe Legal Services) Submitting appearance for the first respondent J A Thomson SC, Solicitor-General for the State of Western Australia, with S R Pack for the second respondent (instructed by State Solicitor's Office A M Mitchelmore SC with M A Hosking for the Attorney-General of the Commonwealth, (instructed by Australian Government Solicitor) intervening M G Sexton SC, Solicitor-General for the State of New South Wales, with J S Caldwell for the Attorney-General for the State of New South Wales, intervening (instructed by Crown Solicitor's Office (NSW)) G A Thompson QC, Solicitor-General of the State of Queensland, with P M Clohessy and F J Nagorcka for the Attorney-General of the State of Queensland, intervening (instructed by Crown Law (Qld)) M J Wait SC, Solicitor-General for the State of South Australia, with S T O'Flaherty for the Attorney-General for the State of South Australia, intervening (instructed by Crown Solicitor's Office (SA)) R J Orr QC, Solicitor-General for the State of Victoria, with F I Gordon and T M Wood for the Attorney-General for the State of Victoria, intervening (instructed by Victorian Government Solicitor's Office) S K Kay SC, Solicitor-General for the State of Tasmania, with J L Rudolf for the Attorney-General for the State of Tasmania, intervening (instructed by Office of the Solicitor-General (Tasmania)) Mr Derek Ryan appearing as amicus curiae, limited to written submissions Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Garlett v Western Australia Constitutional law (Cth) – Judicial power of Commonwealth – Jurisdiction vested in State courts – Institutional integrity of State courts – Where High Risk Serious Offenders Act 2020 (WA) ("Act") required State court to make restriction order in relation to serious offender if satisfied that order necessary to ensure adequate protection of community against unacceptable risk that offender will commit serious offence – Where robbery specified as "serious offence" under item 34 of Subdiv 3 of Div 1 of Sch 1 to Act – Where appellant imprisoned for offences including robbery – Where State sought restriction order in relation to appellant – Whether State court acting under dictation of executive government – Whether function conferred by Act on State court incompatible with State court being repository of judicial power of Commonwealth – Whether function conferred by Act on State court compromises institutional integrity of State court. Words and phrases – "adequate protection of the community", "dictation from the executive", "high risk serious offender", "indefinite detention", "institutional integrity", "involuntary detention", "Kable principle", "preventive detention", "protective purpose", "public confidence in the judicial process", "repository of federal jurisdiction", "repository of the judicial power of the Commonwealth", "restriction order", "serious offence", "unacceptable risk of harm to the community". Constitution, Ch III. High Risk Serious Offenders Act 2020 (WA), ss 7, 48, Sch 1, Div 1, Subdiv 3, item 34. KIEFEL CJ, KEANE AND STEWARD JJ. On 19 November 2017, the appellant ("Mr Garlett"), in company with others, entered a dwelling without consent and, with threats of violence, stole a pendant necklace and $20 in cash. He pretended to be armed with a handgun. He was arrested the following day and remanded in custody. He was charged with, and pleaded guilty to, the offences of robbery and assault with intent to rob, contrary to ss 392 and 393, respectively, of the Criminal Code (WA)1 ("the November 2017 offending"). For the November 2017 offending, Mr Garlett was sentenced in July 2019 to a total effective sentence of three years and six months' imprisonment, backdated to commence on 20 November 20172. On 12 January 2021, he was sentenced to a further five months' imprisonment for an offence of criminal damage committed while he was in prison. Mr Garlett's release date was 19 October 20213. Mr Garlett was 23 years old at the time of the November 2017 offending4. He has a lengthy history of offending, which includes numerous aggravated burglaries, aggravated robberies and stealing motor vehicles5. Generally speaking, he has a record of poor behaviour while in custody6. His history of offending, with his first recorded convictions in April 2007, is related to his abuse of alcohol and drugs, which was already manifest when he was 12 years old. Mr Garlett was released into the community in September 2017 from imprisonment for earlier offending, but shortly thereafter he tested positive for methylamphetamine, amphetamine and cannabis7. It is noteworthy that the November 2017 offending occurred only two months later. By his admission, Mr Garlett was injecting methylamphetamine daily at the time of that offending8. 1 Western Australia v Garlett (2021) 362 FLR 284 at 287 [1]. 2 Western Australia v Garlett [2019] WASCSR 74 at [146]-[147]; Western Australia v Garlett (2021) 362 FLR 284 at 287 [2]. 3 Western Australia v Garlett (2021) 362 FLR 284 at 288 [3]-[4]. 4 Western Australia v Garlett [2019] WASCSR 74 at [50]. 5 Western Australia v Garlett (2021) 362 FLR 284 at 343 [236], [240]. 6 Western Australia v Garlett (2021) 362 FLR 284 at 343 [239], 343-344 [241]. 7 Western Australia v Garlett (2021) 362 FLR 284 at 343 [236]-[238]. 8 Western Australia v Garlett (2021) 362 FLR 284 at 343 [237]. In Fardon v Attorney-General (Qld)9, Gleeson CJ observed that "difficult questions involving the reconciliation of rights to liberty and concerns for the protection of the community ... typically arise in the case of a small number of unfortunate individuals who suffer disorders which make them dangerous to others". The November 2017 offending, and Mr Garlett's history of offending, associated with his long-term abuse of alcohol and drugs, particularly methylamphetamine, may be reason for a concern that he is one of these unfortunate individuals. The High Risk Serious Offenders Act 2020 (WA) ("the HRSO Act") is addressed to that concern and to reconciling that concern with the right to liberty. The HRSO Act provides that the first respondent ("the State") may apply to the Supreme Court of Western Australia for a restriction order in relation to a "serious offender under custodial sentence who is not a serious offender under restriction"10. On 29 July 2021, the State applied for a restriction order in relation to Mr Garlett, on the basis of the November 2017 offending. In response to the State's application, Mr Garlett challenged the validity of the HRSO Act or parts of it. Subsequently, his challenge was confined to the validity of items 34 and 35 of Subdiv 3 of Div 1 of Sch 1 to the HRSO Act. These items specify that the offences of robbery and assault with intent to rob11 – of which Mr Garlett was convicted – are both a "serious offence" for the purposes of the HRSO Act12. Initially, Mr Garlett's challenge was put on several bases13; but the only basis now pursued is that the HRSO Act, insofar as its provisions apply to a person who has been convicted of robbery, as referred to in item 34, is contrary to Ch III of the Constitution by reason of the principle in Kable v Director of Public (2004) 223 CLR 575 at 592 [20]. 10 s 35(1) of the HRSO Act; Western Australia v Garlett (2021) 362 FLR 284 at 11 Criminal Code (WA), ss 392, 393. 12 Western Australia v Garlett (2021) 362 FLR 284 at 288 [6]-[7], [9]. 13 Western Australia v Garlett (2021) 362 FLR 284 at 288 [8]. Prosecutions (NSW)14. The decision in Kable15 established that, by reason of the integrated system of courts postulated by the provisions of Ch III of the Constitution16, State legislation which purports to confer upon a State Supreme Court a function which substantially impairs the institutional integrity of such a court in its role as a repository of federal jurisdiction is "repugnant to or incompatible with" that role and is, therefore, invalid17. For the reasons that follow, the question whether item 34 of Subdiv 3 of Div 1 of Sch 1 to the HRSO Act infringes the Kable principle should be resolved in favour of the validity of the HRSO Act. This conclusion accords with the decision of this Court in Fardon, which concerned legislation, the Dangerous Prisoners (Sexual Offenders) Act 2003 (Qld) ("the DPSO Act"), which is, as will be explained, materially indistinguishable from the HRSO Act. The proceedings A preliminary hearing of the State's application for a restriction order was held on 13 October 2021. As Mr Garlett was due to be released from custody soon thereafter, it was necessary to determine promptly whether orders should be made under s 46 of the HRSO Act. That required a decision as well on the challenge to the validity of the impugned parts of the HRSO Act18. The primary judge (Corboy J) concluded that the impugned parts of the HRSO Act did not confer powers on the Court that were repugnant to or incompatible with that Court's role as a repository of federal jurisdiction under Ch III of the Constitution19. Relevantly, his Honour declared that none of the provisions of the HRSO Act contravened Ch III of the Constitution, insofar as they apply to a serious offender under custodial sentence who has been convicted of the (1996) 189 CLR 51. (1996) 189 CLR 51 at 103-104, 114-115. See also Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 591 [15]; Vella v Commissioner of Police (NSW) (2019) 269 CLR 219 at 246 [55]. 16 ss 71, 77 of the Constitution. 17 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 103. 18 Western Australia v Garlett (2021) 362 FLR 284 at 288-289 [10], [13]. 19 Western Australia v Garlett (2021) 362 FLR 284 at 289 [14]. offence of robbery as referred to in item 34 of Subdiv 3 of Div 1 of Sch 1 to the HRSO Act. His Honour also concluded that there were reasonable grounds for believing that the Court might, in accordance with s 7 of the HRSO Act, find that Mr Garlett was a "high risk serious offender"; and consequently held that an order should be made under s 46(2)(c) of the HRSO Act for Mr Garlett to be detained until the Mr Garlett appealed to the Court of Appeal of the Supreme Court of Western Australia seeking to set aside the declaration on grounds which included the Kable ground. On 21 December 2021, Gordon J ordered that that part of the cause pending in the Court of Appeal concerned with the Kable ground be removed into this Court pursuant to s 40 of the Judiciary Act 1903 (Cth). As the primary judge noted, the legal consequences of the designation of an offence as a "serious offence" attach only by force of other relevant provisions of the HRSO Act, and so it is "not especially meaningful" to consider the validity of item 34 separately from the rest of the HRSO Act21. In order to appreciate the arguments agitated by Mr Garlett in this Court, it is necessary to set out the provisions of the HRSO Act at some length. The HRSO Act The HRSO Act commenced in 2020, save one provision that is not presently relevant22. It repealed the Dangerous Sexual Offenders Act 2006 (WA) ("the DSO Act"). The application of the DSO Act was limited to persons who had been convicted of a "serious sexual offence"23. The HRSO Act is broader, applying 20 Western Australia v Garlett (2021) 362 FLR 284 at 289 [14(e)-(f)]. 21 Western Australia v Garlett (2021) 362 FLR 284 at 296 [51]. 22 See item 1 of Subdiv 1 of Div 2 of Sch 1 to the HRSO Act, which is to commence on a date to be fixed by proclamation. 23 ss 3, 8(1) of the DSO Act; Evidence Act 1906 (WA), s 106A. to persons who have been convicted of a "serious offence"24 as listed in Sch 1 to that Act. The list of serious offences includes, relevantly, robbery25. Section 8 states the objects of the HRSO Act to be: to provide for the detention in custody or the supervision of high risk serious offenders to ensure adequate protection of the community and of victims of serious offences; and to provide for continuing control, care or treatment of high risk serious offenders." The relevant "community" is defined in s 4 to include any community and is not limited to the community of Western Australia or Australia. Section 7 was said by the primary judge to be "central" to the contentions concerning the Kable principle26. Section 7 defines a "high risk serious offender" in the following terms: "(1) An offender is a high risk serious offender if the court dealing with an application under this Act finds that it is satisfied, by acceptable and cogent evidence and to a high degree of probability, that it is necessary to make a restriction order in relation to the offender to ensure adequate protection of the community against an unacceptable risk that the offender will commit a serious offence. The State has the onus of satisfying the court as required by subsection (1). In considering whether it is satisfied as required by subsection (1), the court must have regard to the following – any report prepared under section 74 for the hearing of the application and the extent to which the offender cooperated in the examination required by that section; 24 s 5 of the HRSO Act. item 34 of Subdiv 3 of Div 1 of Sch 1 to the HRSO Act; Criminal Code (WA), 26 Western Australia v Garlett (2021) 362 FLR 284 at 296-297 [56]. any other medical, psychiatric, psychological, or other assessment relating to the offender; information indicating whether or not the offender has a propensity to commit serious offences in the future; (d) whether or not there is any pattern of offending behaviour by the offender; any efforts by the offender to address the cause or causes of the offender's offending behaviour, including whether the offender has participated in any rehabilitation programme; whether or not in any rehabilitation programme has had a positive effect on the offender; the offender's participation the offender's antecedents and criminal record; the risk that, if the offender were not subject to a restriction order, the offender would commit a serious offence; the need to protect members of the community from that risk; any other relevant matter. In considering whether it is satisfied as required by subsection (1), the court must disregard the possibility that the offender might temporarily be prevented from committing a serious offence by – imprisonment; or remand in custody; or the imposition of bail conditions." Section 11(1) provides, relevantly, that the Attorney-General for the State of Western Australia may make applications under the HRSO Act in the name of the State. Section 82(1) provides that proceedings under the HRSO Act, or on an appeal under the Act, are taken to be criminal proceedings for all purposes. However, sub-s (1) does not require anything that is to be evidenced for the purposes of the HRSO Act to be evidenced to a higher standard than is required by Part 2 of the HRSO Act creates the High Risk Serious Offenders Board28. Its functions are specified in s 15(1), and it has the power to do "all things necessary or convenient to be done for, or in connection with, or as incidental to, the performance of its functions"29. The membership of the Board comprises: the chief executive officer or chief employee, or an appointed member of staff, of the Department of the public service principally assisting in the administration of the HRSO Act; the Chief Psychiatrist or an appointed member of staff of the Chief Psychiatrist; the chief executive officer or chief employee, or an appointed member of staff, for a number of government agencies (which are generally concerned with health, housing and police); and community members30. Two types of restriction order may be made under the HRSO Act: a "continuing detention order" under s 26, and a "supervision order" under s 27. A continuing detention order, in relation to an offender, is an order that the offender be detained in custody for an indefinite term for control, care or treatment31. A supervision order, in relation to an offender, is an order that the offender, when not in custody, is to be subject to stated conditions that the Court considers appropriate, in accordance with s 3032. Section 29 limits the power of the Court to make a supervision order, rather than an order for continuing detention. It is in the following terms: "(1) A court cannot make, affirm or amend a supervision order in relation to an offender unless it is satisfied, on the balance of probabilities, that the offender will substantially comply with the standard conditions of the order as made, affirmed or amended. 27 s 82(2) of the HRSO Act. 28 s 14 of the HRSO Act. 29 s 15(2) of the HRSO Act. 30 ss 3, 17 of the HRSO Act. See also s 18. 31 s 26(1) of the HRSO Act. 32 s 27(1) of the HRSO Act. The onus of proof as to the matter described in subsection (1) is on the offender. This section does not apply to the making of an interim supervision order." Section 30(2) states the standard conditions of a supervision order. It relevantly provides: "A supervision order in relation to an offender must require that the offender – report to a community corrections officer at the place, and within the time, stated in the order and advise the officer of the offender's current name and address; and report to, and receive visits from, a community corrections officer as directed by the court; and notify a community corrections officer of every change of the offender's name, place of residence or place of employment at least 2 days before the change happens; and be under the supervision of a community corrections officer and comply with any reasonable direction of the officer ...; and not leave, or stay out of, the State of Western Australia without the permission of a community corrections officer; and not commit a serious offence during the period of the order; and be subject to electronic monitoring under section 31." Section 30(5) provides that a supervision order may also contain any other terms that the Court thinks appropriate: to ensure adequate protection of the community; or for the rehabilitation, care or treatment of the offender subject to the order; or to ensure adequate protection of victims of serious offences committed by the offender subject to the order. An application for a restriction order must be accompanied by any affidavits to be relied upon by the State for the purpose of seeking an order or orders under s 46. A copy of both the application and any accompanying affidavits must be provided to the offender within seven days after making the application33. After an application for a restriction order is made by the State, the Court must fix a day for a preliminary hearing before it34. Affidavits for use in a preliminary hearing must be confined to evidence that the person making it could give orally, except that they may contain statements based on information and belief if the person making the affidavit states the source of the information and the grounds for the belief35. As to the preliminary hearing, s 46 provides, relevantly: "(1) The main purpose of the preliminary hearing is to decide whether the court is satisfied that there are reasonable grounds for believing that the court might, in accordance with section 7, find that the offender is a high risk serious offender. If the court is satisfied as described in subsection (1) – the court must order that the offender undergo examination by a psychiatrist and a qualified psychologist for the purpose of preparing reports in accordance with section 74 to be used on the hearing of the restriction order application; and the court may, on the application of the State or of the offender, order that a person or body named by the court prepare a report in accordance with section 75 to be used on the hearing of the restriction order application on questions or topics set out in the order; and the court may – if the offender is in custody and might otherwise be released from custody before the restriction order application is finally decided, order that the offender be detained in custody for the period stated in the order; and 33 s 37(1), (2) of the HRSO Act. 34 s 43(1) of the HRSO Act. 35 s 45 of the HRSO Act. if the offender is not in custody, order that the offender be detained in custody for the period stated in the order; and the court must, except as provided in subsection (3), fix a day for the hearing of the restriction order application." An offender must disclose any expert evidence material and may file and serve affidavits upon which the offender proposes to rely prior to a preliminary hearing36. Conversely, the State is under a continuing obligation of disclosure, subject to certain exceptions, after a preliminary hearing has been conducted37. Section 48 makes provision for the determination of an application for a restriction order. Its operation depends upon the evaluative judgment contemplated by s 7. Section 48 provides: If the court hearing a restriction order application finds that the offender is a high risk serious offender, the court must – (a) make a continuing detention order in relation to the offender; except as provided in section 29, make a supervision order in relation to the offender. In deciding whether to make an order under subsection (1)(a) or (b), the paramount consideration is to be the need to ensure adequate protection of the community." It may be noted that s 48(1) provides that, if the Court finds that the offender is a high risk serious offender in accordance with s 7, the Court "must" make a restriction order. Part 5 of the HRSO Act provides for periodic review of detention under a continuing detention order. In this regard, s 64(2) requires the State to apply for a review to be carried out: as soon as practicable after the end of the period of one year commencing when the offender is first in custody pursuant to the continuing detention order; and as soon as practicable after the end of the period of two years 36 ss 41, 44 of the HRSO Act. 37 ss 34, 39 of the HRSO Act. commencing when the detention was most recently reviewed under s 64 or s 65. Alternatively, the offender may, with the leave of the Court, apply for review of his or her continuing detention order38. A continuing detention order must be rescinded if, on a review, the Court does not find that the offender remains a "high risk serious offender". If the Court finds that the offender does remain a "high risk serious offender", it must affirm the continuing detention order, or rescind it and make a supervision order. In deciding which order to make, the paramount consideration is to be the need to ensure adequate protection of the community39. Part 6 of the HRSO Act provides for appeals against decisions made under the Act, including the making of a restriction order. Either the State or a person in relation to whom the Court makes a decision under the HRSO Act may appeal to the Court of Appeal against the decision. However, an appeal does not lie against, inter alia, a decision on an order made at a preliminary hearing40. The primary judge's reasons The primary judge concluded, by reference to Fardon, that the legislature had not compromised the independence or impartiality of the Court by conditioning the making of a restriction order under the HRSO Act upon the commission of a "serious offence" of the kind identified in Sch 141. His Honour made three points about the operation of s 7(3). First, the matters for the Court's consideration were specified by Parliament, and were not specified "by an executive act in any relevant sense"42. Secondly, what is a "relevant matter" that the Court is permitted to take into account by virtue of s 7(3)(j) is determined by the objects of the HRSO Act and a consideration of its provisions as a whole43. And thirdly, s 7(3) emphasised the evaluative nature of 38 s 65(1) of the HRSO Act. 39 s 68 of the HRSO Act. 40 s 69(1), (3)(b) of the HRSO Act. 41 Western Australia v Garlett (2021) 362 FLR 284 at 313 [109]. See also 42 Western Australia v Garlett (2021) 362 FLR 284 at 314 [121]. 43 Western Australia v Garlett (2021) 362 FLR 284 at 314 [122]. the decision required by s 7(1): it does not constrain the matters which the Court may consider in making a finding under s 7(1)44. The primary judge held that s 48 of the HRSO Act was to be interpreted as requiring the Court to make the order that is "least invasive or destructive" of the right to liberty of the person subject to the order, while ensuring an adequate degree of protection for the community45. In this regard, his Honour followed the approach of Beech J in Director of Public Prosecutions (WA) v DAL [No 2]46 in determining whether a continuing detention order or supervision order should be made under s 4847. The primary judge held that the HRSO Act incorporated procedures that are the "hallmarks of traditional forms and procedures" of the judicial process: the onus of proof rests on the State; the "ordinary" rules of evidence apply (with one common exception relating to statements of information and belief48); the offender has a right to appear and adduce evidence49; experts must prepare an "independent report"50; the State is under a continuing obligation of disclosure and must serve expert reports; hearings are conducted in public; and there is a right of appeal51. Having regard to the circumstances, his Honour concluded that the provisions of the HRSO Act maintained the "essential character" of the Court as a court exercising State and federal judicial power: impartiality, independence, procedural fairness, and open decision-making52. The primary judge also concluded that the purpose of the HRSO Act was protective, not punitive. His Honour noted that the central provisions of the HRSO Act and its objects were, in substance, protective and not punitive in 44 Western Australia v Garlett (2021) 362 FLR 284 at 314 [123], [125]. 45 Western Australia v Garlett (2021) 362 FLR 284 at 320 [145]. [2016] WASC 212. 47 Western Australia v Garlett (2021) 362 FLR 284 at 320 [146]. 48 ss 45, 84 of the HRSO Act. 49 ss 84(3)(b), 86(2), (3) of the HRSO Act. 50 s 75(1)(b) of the HRSO Act. 51 Western Australia v Garlett (2021) 362 FLR 284 at 320-321 [147]. 52 Western Australia v Garlett (2021) 362 FLR 284 at 324-325 [161]. character53. Three further features of the HRSO Act confirmed its protective character, namely the establishment of the High Risk Serious Offenders Board, the imposition of obligations on "supporting agencies" in respect of serious offenders, and the circumstance that the HRSO Act required periodic reviews and thereby did not provide for indefinite detention in any relevant sense54. Mr Garlett's arguments in this Court While Mr Garlett's challenge to the validity of item 34 of Subdiv 3 of Div 1 of Sch 1 to the HRSO Act invoked the Kable principle, the argument advanced on his behalf conflated the Kable issue with a contention that the power exercisable under ss 7 and 48 of the HRSO Act was not judicial power such as might be conferred upon a court exercising federal jurisdiction consistently with Ch III of the Constitution. In this regard, Mr Garlett relied upon the statement of principle by Brennan, Deane and Dawson JJ in Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs55 that: "putting to one side the exceptional cases to which reference is made below, the involuntary detention of a citizen in custody by the State is penal or punitive in character and, under our system of government, exists only as an incident of the exclusively judicial function of adjudging and punishing criminal guilt". Mr Garlett's argument was not put on the basis that the Court, in exercising the powers conferred on it by the HRSO Act, exercises federal jurisdiction. Rather, it was that its exercise of those powers is inconsistent with it being a repository of federal jurisdiction because the exercise of power pursuant to the impugned provisions is non-judicial. The manner in which the argument is framed rightly recognises that the power to make a continuing detention order or a supervision order under the HRSO Act has been conferred by a State Parliament on a State court. Whether or not that power is judicial or non-judicial in character is not determinative as to whether the Kable principle has been infringed. The suggestion that investing a power in a State court to order preventive detention is repugnant to its institutional integrity as a Ch III court cannot stand with this Court's decision in Fardon; and that is so whether or not that power is properly characterised as 53 Western Australia v Garlett (2021) 362 FLR 284 at 322 [150]. 54 Western Australia v Garlett (2021) 362 FLR 284 at 322 [151]-[152]. (1992) 176 CLR 1 at 27. judicial power56. Accordingly, the Lim principle has no application to establish the invalidity of the HRSO Act. Even if the HRSO Act were a law of the Commonwealth, it would not contravene the Lim principle. Nevertheless, Mr Garlett sought to maintain the submission that the power conferred by the HRSO Act, being non-judicial in character, was a factor pointing to the conclusion that the impugned provisions of the HRSO Act substantially impair the institutional integrity of the Court. That argument should be rejected. Indeed, the circumstance that the power invested in the Court is recognisable as an orthodox exercise of judicial power may be seen as a positive indicator of validity. Mr Garlett sought to sideline the authority of Fardon by noting differences between the HRSO Act and the DPSO Act. It was said that because s 48 of the HRSO Act provides that the Court must make a restriction order if satisfied of the matters in s 7, the absence of a discretion in the Court not to make the order means that the Court is required to act under dictation from the executive. It was also argued that the HRSO Act is significantly different from the DPSO Act, which applied only to a "serious sexual offence"57. This submission was developed by a number of contentions advanced in various ways; but the gravamen of Mr Garlett's argument was that the offence of robbery under s 392 of the Criminal Code (WA) simply cannot be sufficiently "serious" to be a permissible basis for seeking a restriction order. It was also said on Mr Garlett's behalf that because there is no correlation in the HRSO Act between the nature of the "serious offence" which may trigger the operation of the Act, and the risk of harm against which a detention order is to protect, the HRSO Act impermissibly creates a scheme under which the Court may decide that a person, having served a term for rape, should not be released from prison because of the risk that the person might commit a robbery. Mr Garlett's arguments may now be considered. The Lim principle The HRSO Act establishes a non-punitive scheme that has as its object the protection of the community from harm. 56 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 591 [18], 57 See s 13(2) and Sch 1 of the DPSO Act. The proposition that, under the laws of the Commonwealth, the function of adjudging or punishing criminal guilt is exclusively the province of Ch III courts was stated in Lim in terms which expressly recognised that it did not encompass laws the purpose of which were to protect the community from harm, such as laws relating to quarantine from infectious diseases and laws for the confinement of some categories of mentally ill persons58. This Court's decision in Minister for Home Affairs v Benbrika59 affirmed that the distinction between detention of an individual for the punishment for a crime, and detention of an individual for the protection of the community from a proven unacceptable risk of serious harm, is not illusory. In Benbrika, the plurality said of the legislation there under consideration60: "The order for indefinite detention is founded on the court's assessment, in the exercise of State judicial power, of the danger to society that the offender would present at the completion of the nominal sentence. As Gleeson CJ observed in Fardon, if the lawful exercise of judicial power admits of the judge assessing the danger an offender poses to the community at the time of sentencing it is curious that it does not admit of the judge making such an assessment at or near the time of imminent release when that danger might be assessed more accurately." (footnote omitted) The decision in Benbrika confirms the statement of the primary judge that a State law will not be invalid "merely because it provides for the detention of a person as a preventative measure to protect the community from the risk of future harm", and that a determination about the risk of future harm is judicial in nature61. The assessment of whether the subject of an application for a restriction order is a "high risk serious offender" involves consideration of the risk of the person committing a "serious offence" and consideration of the harm that may be occasioned to the community if the risk were to materialise. It may be said that because the protection of the community is one of the purposes which informs the exercise of the judicial discretion to impose a proper 58 Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 27-28, 58. (2021) 95 ALJR 166 at 181 [35]-[36], 183 [41]-[43]; 388 ALR 1 at 14, 16-17. 60 Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 181 [34]; 388 ALR 1 61 Western Australia v Garlett (2021) 362 FLR 284 at 306 [88]. sentence upon an offender following conviction of a crime, it may not be possible to discern the operation of the protective purpose of the criminal law separately and distinctly from the deterrent or retributive purpose of the criminal law. That may well have been so in relation to criminal sentencing in earlier times, but it is not so in relation to orders under the HRSO Act. In the late 18th century, Sir William Blackstone wrote62: "As to the end ... of human punishments. This is not by way of atonement or expiation for the crime committed ... but as a precaution against future offences of the same kind. This is effected three ways: either by the amendment of the offender himself; for which purpose all corporal punishments, fines, and temporary exile or imprisonment are inflicted: or, by deterring others by the dread of his example from offending in the like way, ... or, lastly, by depriving the party injuring of the power to do future mischief; which is effected by either putting him to death, or condemning him to perpetual confinement, slavery, or exile. The same one end, of preventing future crimes, is endeavoured to be answered by each of these three species of punishment." Oliver Wendell Holmes Jr, writing in the late 19th century, said that "probably most English-speaking lawyers would accept the preventive theory without hesitation"63. As is apparent from the passage cited from Blackstone, at the time that author wrote, the protective or preventive purpose of the criminal law was vindicated to the most extreme extent possible by the removal of the offender from the community either by the imposition of the death penalty or by "perpetual confinement, slavery, or exile". And in the United States, when Holmes wrote, the death penalty was routinely imposed for serious crimes. None of the means of prevention of crime mentioned by Blackstone is now available in Australia as a result of legislative intervention to mitigate the extreme harshness of the criminal law of these earlier times. But the merciful development of the criminal law has also meant that the risk to the community posed by the release of a disordered individual who has served his or her proper sentence has been revealed as an issue left unresolved by the enforcement of the criminal law. 62 Blackstone, Commentaries on the Laws of England (1769), bk 4, ch 1 at 11-12. 63 Holmes, The Common Law (1881) at 43. Late in the 20th century in Australia, the cases of Veen v The Queen64 and Veen v The Queen [No 2]65 added special poignancy to this unresolved issue. These decisions established as a principle of the criminal law in relation to sentencing that protection of the community from the dangerous propensities of an offender could not justify a sentence disproportionate to the moral culpability of the offender and the need for retribution appropriate to the seriousness of the offending. The principle stated by this Court in Veen [No 1] and Veen [No 2] imposed a limit upon the extent to which the protection of the community from a disordered individual could be taken into account in the exercise of the discretion of a sentencing judge. In Fardon, Gleeson CJ, in discussing this Court's decisions in Veen [No 1] and Veen [No 2], noted the tension between the practical effect of each of the two decisions66. In Veen [No 1], this Court upheld an appeal against a sentence of life imprisonment imposed for the protection of the community upon Mr Veen, who had been charged with murder but convicted of manslaughter on the ground of diminished responsibility, the sentencing judge having taken the view that, by reason of brain damage which could cause uncontrolled aggression when affected by alcohol, Mr Veen was likely to kill or injure someone if he were released. This Court reduced Mr Veen's sentence to imprisonment for 12 years. Subsequently, Mr Veen was released from custody, and nine months later he stabbed and killed a man. For this crime, the Crown accepted a plea of manslaughter on the ground of diminished responsibility. Once again, Mr Veen was sentenced to life imprisonment, on the ground that he was a danger to society, and was likely to kill again when released. This Court upheld that sentence in Veen [No 2]. In Fardon, Gleeson CJ did not seek to reconcile the outcome in Veen [No 1] with the outcome in Veen [No 2], given that there was no apparent difference of approach in terms of principle; but his Honour observed that "[t]he facts of the case reveal a common problem with which courts and legislatures have to deal"67. One legislative response to that problem was the DPSO Act and its analogues, such as the HRSO Act. That response addressed the need to protect the community from disordered individuals in a way that the criminal law as expounded in Veen [No 1] and Veen [No 2] does not; and that response proceeded by way of a regime which (1979) 143 CLR 458 at 467, 468, 482-483, 495 ("Veen [No 1]"). (1988) 164 CLR 465 at 472-473. 66 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 588-589 [7]-[9]. 67 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 588 [9]. eschewed entirely the purposes of deterrence and retribution that characterise punishment under the criminal law. The purpose of a legislative regime, such as the DPSO Act or the HRSO Act, is discernibly distinct from the imposition of retribution or deterrence pursued by the criminal law. To the extent that detention or supervised release is part of the legislative regime, the character of the curtailment of the liberty of the individual offender under the regime can be seen to be protective rather than punitive because any curtailment of liberty must be supported by the risk evaluation contemplated by s 7 of that evaluation, considerations of retribution and deterrence, central to sentencing by way of punishment under the common law, have no part to play. In addition, any curtailment of liberty must be no greater than is necessary adequately to protect the community from the demonstrated unacceptable risk of harm to the community68. Further, any curtailment of liberty is subject to regular review to ensure that the evaluation of risk and response remains current. Where detention can be justified only by that evaluation and cannot be continued beyond the currency of such an evaluation, the purpose of detention and of the regime under which it is imposed can readily be seen to be distinct from the purpose of punishment. the HRSO Act. In The HRSO Act can be seen to be protective, rather than punitive, in its purpose and effect because: it operates by reason of the evaluation by reference to criteria concerned solely with the risk of harm to the community rather than considerations of retribution or deterrence; the evaluation of risk to the community is given effect only to the extent that interference with an offender's liberty is necessary to protect the community; the processes by which the evaluation is undertaken and given effect are familiar as exercises of judicial power and, as such, serve to ensure the fairness and rationality of the making of, and giving effect to, the evaluation. There was, in the course of argument in this Court, a suggestion that the imposition of the obligation of disclosure upon an offender was a departure from ordinary judicial processes. That suggestion was without foundation: that obligation relates only to 68 Western Australia v Latimer [2006] WASC 235 at [49]; Western Australia v ACJ [2021] WASC 219 at [32]; Western Australia v Quartermaine [No 2] [2021] WASC 267 at [14]; Western Australia v Dragon [No 2] [2022] WASC 189 at [15]. material upon which the offender proposes to rely. Moreover, it is a familiar aspect of the process of criminal justice69; and the provisions for regular review serve to ensure that the restrictions upon an offender's personal liberty do not continue any longer than is necessary for the protection of the community. Kable In Kable, the Community Protection Act 1994 (NSW) authorised the Supreme Court of New South Wales to issue a preventive detention order against Mr Kable, who had been convicted of the manslaughter of his wife. A majority of this Court (Toohey, Gaudron, McHugh and Gummow JJ) held that the Community Protection Act was invalid on the basis that it impaired the institutional integrity of the Supreme Court. Essential to the need to maintain the integrity of Ch III courts was the maintenance of their independence from the other branches of government, so that they should be free to act impartially in accordance with judicial process70. Where the Court acted as an "instrument of executive government policy", as required by the Community Protection Act, public confidence in the Court "must inevitably be impaired"71. Although the Community Protection Act was framed in general terms, s 3 made it clear that it was confined in its operation to Mr Kable; the ad hominem focus of the legislation was seen to be problematic72. In Attorney-General (NT) v Emmerson73, French CJ, Hayne, Crennan, Kiefel, Bell and Keane JJ said: 69 Criminal Procedure Act 2004 (WA), s 62(4)(b). See also Criminal Procedure Act 1986 (NSW), s 143(1)(h); Criminal Procedure Act 2009 (Vic), s 189(1); Criminal Procedure Act 1921 (SA), s 123(4)(e); Criminal Code (Qld), s 590B(1). 70 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 98, 107, 108, 71 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 124. 72 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 98. (2014) 253 CLR 393 at 425 [42]. "The ad hominem legislation in Kable (the stated object of which was 'to protect the community'74) authorised the Supreme Court of New South Wales to order preventive detention without any breach of the law being alleged or any adjudication of guilt75. A majority of this Court found that task incompatible with the institutional integrity of the Supreme Court because the legislation drew the Court into implementing what was essentially a political decision or government policy that Mr Kable should be detained, without the benefit of ordinary judicial process76." The general proposition for which Kable stands77 must be understood and applied bearing in mind that all legislation reflects political decisions and government policy as a source of laws, substantive and adjectival; and that it is the essential role of the judiciary to enforce those laws by the exercise of judicial power78. It is within this context that it can be appreciated that the vice of the Community Protection Act was that it enlisted the Supreme Court to give effect to a decision on the part of the executive government that Mr Kable should remain in detention. Fardon In Fardon, a majority of this Court held that the DPSO Act did not infringe the Kable principle. This Court rejected the contention that the involvement of the Supreme Court of Queensland in deciding whether prisoners who have been convicted of sexual offences should be the subject of continuing detention orders, on the ground that they pose a danger of harm to the community, was incompatible with the role of the Supreme Court as a repository of federal judicial power. Gleeson CJ noted a number of features of the DPSO Act which distinguished it from Kable and supported its validity79: 74 Community Protection Act 1994 (NSW), s 3(1), (2). 75 Community Protection Act 1994 (NSW), ss 3(1), (3), 5(1). 76 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 98, 106-107, 77 See Attorney-General (NT) v Emmerson (2014) 253 CLR 393 at 426 [44]. 78 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 592-593 [21]. 79 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 592 [19]. "The [DPSO] Act is a general law authorising the preventive detention of a prisoner in the interests of community protection. It authorises and empowers the Supreme Court [of Queensland] to act in a manner which is consistent with its judicial character. It does not confer functions which are incompatible with the proper discharge of judicial responsibilities or with the exercise of judicial power. It confers a substantial discretion as to whether an order should be made, and if so, the type of order. If an order is made, it might involve either detention or release under supervision. The onus of proof is on the Attorney-General [of the State of Queensland]. The rules of evidence apply. The discretion is to be exercised by reference to the criterion of serious danger to the community. The Court is obliged, by s 13(4) of the [DPSO] Act, to have regard to a list of matters that are all relevant to that criterion. There is a right of appeal. Hearings are conducted in public, and in accordance with the ordinary judicial process. There is nothing to suggest that the Supreme Court is to act as a mere instrument of government policy. The outcome of each case is to be determined on its merits." "It might be thought that, by conferring the powers in question on the Supreme Court of Queensland, the Queensland Parliament was attempting to ensure that the powers would be exercised independently, impartially, and judicially. Unless it can be said that there is something inherent in the making of an order for preventive, as distinct from punitive, detention that compromises the institutional integrity of a court, then it is hard to see the foundation for the appellant's argument." His Honour, and most other members of the majority81, therefore rejected the proposition that there is something inherent in the making of an order for preventive, as distinct from punitive, detention that compromises the institutional integrity of a court. Rather, it was held that the purpose of the DPSO Act was to protect the community, not to impose punishment, or further punishment, on an offender82. Their Honours emphasised that the DPSO Act required the Court to act independently of the other arms of government. The Court was required to make, 80 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 592 [20]. 81 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 613 [83], 647-648 [196], 82 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 589-590 [11]-[14], and give effect to, its own evaluative judgment as to whether it was satisfied that there was an "unacceptable risk" that a prisoner would commit a serious sexual offence; and that evaluation was to be made in accordance with the rules of evidence, and other processes that bore the "hallmarks of traditional judicial forms and procedure"83. In Emmerson, French CJ, Hayne, Crennan, Kiefel, Bell and Keane JJ, having noted the basis on which the Community Protection Act had been held invalid in Kable, went on to say84: "By comparison with Kable, in Fardon v Attorney-General (Qld)85, legislation of general application authorising the continued detention or supervised release of prisoners who were 'a serious danger to the community' was upheld as valid. This was because the adjudicative process required of the State Supreme Court in that case supported the maintenance of the institutional integrity of the Court86 and the adjudicative process required could be performed 'independently of any instruction, advice or wish of the legislative or executive branches of government'87." The complexity of the task Mr Garlett argued that the application of s 7 of the HRSO Act is a task so complex and difficult that it is inherently incompatible with the judicial function. This contention cannot be accepted. A contention to similar effect was rejected in Fardon88; and in Vella v Commissioner of Police (NSW), Bell, Keane, Nettle and Edelman JJ observed that "open-textured criteria" – such as "an unacceptable risk to the safety, welfare or order of the community", "reasonably necessary", "reasonably appropriate and adapted", "sufficient grounds" and "considers 83 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 602 [44], 619 [107], 84 Attorney-General (NT) v Emmerson (2014) 253 CLR 393 at 425-426 [43]. (2004) 223 CLR 575. 86 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 592 [19]-[20], 87 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 621 [116]. See also 88 See Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 593 [22], appropriate"89 – have been deployed by the legislature to confer power on courts without falling foul of the concern that the power so conferred was not properly characterised as judicial power90. It is, no doubt, true to say that the evaluative task required of the Court under ss 7 and 48 of the HRSO Act is difficult. But its difficulty should not be exaggerated. It is certainly no more onerous than the task given to the Court by the DPSO Act. In Fardon, Gleeson CJ said91: "No doubt, predictions of future danger may be unreliable, but, as the case of Veen shows, they may also be right. Common law sentencing principles, and some legislative regimes, permit or require such predictions at the time of sentencing, which will often be many years before possible release. If, as a matter of policy, the unreliability of such predictions is a significant factor, it is not necessarily surprising to find a legislature attempting to postpone the time for prediction until closer to the point of release." The function to be performed by the Court under ss 7 and 48 of the HRSO Act is materially indistinguishable from the function required of the Supreme Court of Queensland by s 13 of the DPSO Act. Just as the DPSO Act was not held to impose on the Supreme Court of Queensland a "grossly unjudicial chore"92, so the HRSO Act does not require the Supreme Court of Western Australia to carry out an unjudicial task. Distinguishing Fardon The arguments advanced on behalf of Mr Garlett did not invite this Court to reconsider its decision in Fardon. Rather, Mr Garlett sought to draw attention to some respects in which the HRSO Act differs from the DPSO Act, in order to take this case outside the authority of Fardon. An examination of these supposed 89 Vella v Commissioner of Police (NSW) (2019) 269 CLR 219 at 258 [84]. See Thomas v Mowbray (2007) 233 CLR 307; Wainohu v New South Wales (2011) 243 CLR 181; Condon v Pompano Pty Ltd (2013) 252 CLR 38. 90 Vella v Commissioner of Police (NSW) (2019) 269 CLR 219 at 235 [23]. See also Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 593 [22]. 91 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 589-590 [12]. 92 cf Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 133, quoting Hobson v Hansen (1967) 265 F Supp 902 at 930. points of difference shows that the two Acts are, in substance, materially indistinguishable. "Must" not "may" Section 48 of the HRSO Act contemplates that the Supreme Court "must" make a restriction order if it is satisfied that the offender is a "high risk serious offender". The DPSO Act preserved a discretion in the Supreme Court of Queensland as to whether to make an order where a prisoner was assessed to pose an unacceptable risk of harm to the community93. On Mr Garlett's behalf, emphasis was placed on this circumstance as a point of distinction between the two Acts. That submission must be rejected. The terms of s 7(1) must be read in conjunction with s 4894. Section 48 authorises and requires the Court to make a restriction order only where a positive determination has been made in accordance with s 7 of the HRSO Act. The circumstance that the Court is not invested with a residual discretion to decline to make a restriction order does not establish that it is acting upon the dictation of the executive government as to the manner of deciding the case or its outcome. While s 48(1) is couched in mandatory terms, the terms of s 48(2) and the definition of "high risk serious offender" in s 7(1) mean that the judicial evaluation upon which the Court's determination depends is essential to the making of a restriction order. The decisive nature of the Court's evaluation is distinctly inconsistent with the suggestion that it must act upon the dictation of the legislature or the executive as to whether a restriction order should be made in any particular case. Whether or not a risk that an offender will commit a "serious offence" is "unacceptable" is a question which requires the Court's judgment as to the nature and extent of the harm said to be in prospect. Further, whether a restriction order is "necessary" to protect against that risk requires recognition of what would otherwise be the offender's entitlement to be at liberty, an entitlement not lightly to be denied. The Court must consider whether a restriction order is necessary to ensure adequate protection of the community95. The Court is required to perform this evaluative exercise and come to its own determination as to whether to make 93 See s 13(1), (5) of the DPSO Act. 94 Kelly v The Queen (2004) 218 CLR 216 at 253 [103]. 95 s 7(1) of the HRSO Act. a restriction order; it does not automatically follow from the inclusion of an offence in Sch 1 that a restriction order must be made. In Emmerson, French CJ, Hayne, Crennan, Kiefel, Bell and Keane JJ observed that the legislation under consideration in that case provided that the "Supreme Court [of the Northern Territory was] authorised to determine whether the statutory criteria set out [were] satisfied and, if they [were], the Court must make the declaration sought" by the executive government96. The legislation then "provide[d] the Supreme Court's the consequences which follow from "Together, these steps are an unremarkable example of conferring jurisdiction on a court to determine a controversy between parties which, when determined, will engage stated statutory consequences." The same may be said of ss 7 and 48 of the HRSO Act. This part of Mr Garlett's argument cannot stand with the decision in Emmerson. A serious offence? It was submitted on behalf of Mr Garlett that Fardon is authority only for the narrow proposition that legislation empowering a State court to order detention of a person serving a sentence for a "serious sexual offence", for the purpose of protecting the community and on the terms provided for in the DPSO Act, does not attract the Kable principle. It was said that the offence of robbery under s 392 of the Criminal Code (WA) is inherently insufficiently serious to be capable of being regarded as a basis for a restriction order. Mr Garlett focussed on what was said to be the unexceptional nature of robbery as an offence to argue that the making of a restriction order, in addition to the sentence imposed on the offender for the offence of which he or she was convicted, is disproportionate to the seriousness of that offence for which proper punishment has already been imposed. These contentions cannot be accepted. First, Mr Garlett's argument fails to appreciate that the imposition of a restriction order is not by way of further punishment for the "serious offence" of 96 Attorney-General (NT) v Emmerson (2014) 253 CLR 393 at 419-420 [24], 431 [59]-[60]. See Misuse of Drugs Act 1990 (NT), s 36A; Criminal Property Forfeiture Act 2002 (NT), s 94(1). 97 Attorney-General (NT) v Emmerson (2014) 253 CLR 393 at 431 [60]. which the offender has been convicted, but a precaution that has been judicially assessed as necessary for the purpose of protecting the community. A restriction order does not contravene the principle of "double jeopardy"98, in the sense that it punishes the offender twice, for the offence that engages the application of the HRSO Act. The protective purpose of the HRSO Act is not undermined by a lack of correlation between the past offence, which conditions the operation of the legislation, and the harm to the community from the commission of any "serious offence" in the future. Secondly, Mr Garlett's argument confuses orthodox notions of proportionality in sentencing with the radically different notion of a judicial usurpation of the responsibility of the legislature to determine the degree of culpability appropriate to various categories of misconduct. The determination of the relative seriousness of criminal offences, reflected in the maximum sentences for those offences, is a matter for the legislature. The inclusion of an offence, such as robbery, in Sch 1 to the HRSO Act reflects a legislative judgment as to the kinds of offences which may be such as to cause harm of a kind from which the community needs protection different from that provided by the criminal law. It is not inimical to the institutional integrity of the Court to act upon a legislative judgment that robbery should be included in the serious offences listed in Sch 1. That is especially so where an element of the offence is violence to person or property, or the threat of such violence. It is to be borne in mind that the maximum penalty for a contravention of s 392 of the Criminal Code (WA) ranges between imprisonment for 14 years, 20 years and life, depending upon the circumstances of the contravention. It is also to be noted that the sexual offences in respect of which the operation of the DPSO Act depended covered a range of seriousness, with some offences attracting higher penalties than others, but with any one offence being sufficient to engage the application of the regime. In Benbrika, Edelman J noted that this Court in Fardon respected the judgment of the legislature that all the offences on this spectrum "could potentially involve harm to the community sufficient to permit consideration of a continuing detention order"99. As his Honour also noted, "'conduct is regarded as criminal for the very reason that its commission harms society, or some part of it', and it is rarely the 98 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 610 [74]; Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 220 [214]; 388 ALR 1 at 64-65. 99 Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 224 [230]; 388 ALR role of a court to second-guess Parliament's decision about the seriousness of the harm that various crimes will have to the community"100. Similarly, in Vella, the range of offending on which the power of the Supreme Court and the District Court of New South Wales was conditioned was acknowledged to be "very wide"101. In Magaming v The Queen102, it was said: "The enactment of sentences by the legislature, whether as maxima or minima, involves the resolution of broad issues of policy by the exercise of legislative power. A sentence enacted by the legislature reflects policy-driven assessments of the desirability of the ends pursued by the legislation, and of the means by which those ends might be achieved. It is distinctly the province of the legislature to gauge the seriousness of what is seen as an undesirable activity affecting the peace, order and good government of the Commonwealth and the soundness of a view that condign punishment is called for to suppress that activity, and to determine whether a level of punishment should be enacted as a ceiling or a floor." Whatever may be said in the abstract of the relative seriousness of an offence designated as a "serious offence" for the purposes of the HRSO Act, it is always for the Court to determine whether there is an "unacceptable risk" that the offender will commit such an offence, having regard to the evidence as to the nature of the offending and the circumstances of the offender. Importantly, the evaluative exercise contemplated by s 7 of the HRSO Act is not an exercise involving the notional ordering in the abstract of the relative culpability of categories of offences. Rather, s 7 contemplates a practical evaluation concerned with the circumstances of the particular offending and the particular offender. While the requirement of an evaluation under s 7 depends upon the offender having been convicted of a "serious offence", ss 7 and 48 do not envisage the possibility that a restriction order might be made to prevent the commission of a serious offence, whether of the same kind or of another kind, unless the risk of further offending involves a real threat of harm to the community103. 100 Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 224 [228]; 388 ALR 1 at 69, quoting McGarry v The Queen (2001) 207 CLR 121 at 129 [20]. 101 Vella v Commissioner of Police (NSW) (2019) 269 CLR 219 at 230 [3]. 102 (2013) 252 CLR 381 at 414 [105]. 103 See Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 184-185 [46]; 388 ALR 1 at 18. In the case of Mr Garlett, that practical evaluation could be expected to involve consideration of the November 2017 offending, and the relationship between his history of offending and his long-term abuse of methylamphetamine. The Court would be required to consider the implications of these circumstances in relation to the likelihood that he would reoffend, and the nature of that offending, if he were to be released into the community with or without supervision. A restriction order will only be made consequent upon an assessment of all the circumstances of the "serious offence" and the offender. There can be no doubt that a judge tasked with the determination of the State's application for a restriction order against Mr Garlett would make a restriction order of either kind only after anxious consideration of Mr Garlett's prospects of freeing himself from the grip of methylamphetamine and the extent to which those prospects bear upon the likelihood that the community will continue to be exposed to robberies and like crimes involving, for example, the horrors of home invasions104. As Derrick J said in Western Australia v Patrick [No 5]105: "The scheme of the [HRSO] Act requires that the court do no more than is necessary to achieve an adequate degree of protection to the community." A similar point was made in the reasons of the plurality in Benbrika in relation to the protective regime under consideration in that case106: "It is difficult to envisage any circumstances in which a continuing detention order would be made to prevent the risk of the commission of a serious ... offence where that offence is of a kind that could not be seen to pose a real threat of harm to the community .... Correctly understood, a continuing detention order could not properly be made by a Court ... in a case where the only risk of offending identified by the authorities did not carry a threat of harm to members of the community that was sufficiently serious in the assessment of the Court as to make the risk of the commission of the offence 'unacceptable' to that Court." This aspect of Mr Garlett's argument culminated in a plea that this Court strike down the HRSO Act lest the legislature be emboldened to designate a failure 104 See s 7(3)(e), (f) of the HRSO Act. 105 [2022] WASC 61 at [56]. 106 Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 184-185 [46]-[47]; 388 ALR 1 at 18-19. to wear a helmet while riding a bicycle as a "serious offence" for the purposes of the HRSO Act. In Gerner v Victoria107, this Court, following Amalgamated Society of Engineers v Adelaide Steamship Co Ltd ("the Engineers' Case")108, observed that "[t]o point to the possibility that legislative power may be misused is distinctly not to demonstrate a sufficient reason to deny its existence". The rhetorical deployment of extreme and distorting examples of the possibility of the abuse of legislative power is an appeal to "a jaundiced view of the integrity or wisdom or practical competence of the representatives chosen by the people"109. This kind of rhetorical device provides no substantial basis for regarding robbery as something other than a serious offence. Other considerations relating to the institutional integrity of the Supreme Court Public confidence It was submitted on behalf of Mr Garlett that preventive detention under the HRSO Act required to be enforced by the Court would adversely affect public confidence in the Court. In Fardon, Gleeson CJ, noting that an aspect of the reasoning in Kable was concerned with the maintenance of public confidence in the judicial process, clarified that those observations were made in the context of a statute that involved the Court in an ad hominem exercise: "[n]othing that was said in Kable meant that a court's opinion of its own standing is a criterion of validity of law"110. Gleeson CJ said that111: "nothing would be more likely to damage public confidence in the integrity and impartiality of courts than judicial refusal to implement the provisions of a statute upon the ground of an objection to legislative policy". 107 (2020) 270 CLR 412 at 423-424 [18]. 108 (1920) 28 CLR 129 at 151-152. 109 Gerner v Victoria (2020) 270 CLR 412 at 424 [18] (footnote omitted). 110 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 593 [23] (footnote omitted). 111 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 593 [23]. As Edelman J said recently in Benbrika112: "[T]he very integrity and impartiality of the courts which the [Kable] principle protects would be seriously impaired if the judiciary could generally refuse to implement statutory provisions on the grounds of an objection to legislative policy113." It may be noted here that the legislative removal of procedural safeguards of fairness, characteristic of the exercise of judicial power, has been significant in subsequent decisions where legislation has been successfully challenged as infringing the Kable principle. These cases may conveniently be discussed by reference to the submissions made by Mr Ryan. Procedural safeguards Mr Derek Ryan is currently subject to a supervision order under the HRSO Act. Like Mr Garlett, he was convicted of the "serious offence" of robbery. Mr Ryan was granted leave to provide written submissions on the basis that he sought to make submissions "which the Court should have to assist it to reach a correct determination"114, and which had not then been presented. The thrust of Mr Ryan's submissions in this regard was that the HRSO Act enlists the Court to give effect to legislative policy115. Challenges to State legislation have succeeded in this Court in International Finance Trust Co Ltd v New South Wales Crime Commission116, South Australia v Totani117 and Wainohu v New South Wales118. None of these cases was concerned with a preventive detention regime. The legislation challenged in the first of these 112 Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 223 [226]; 388 ALR 113 Vella v Commissioner of Police (NSW) (2019) 269 CLR 219 at 235 [24], quoting Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 593 [23]. 114 Roadshow Films Pty Ltd v iiNet Ltd [No 1] (2011) 248 CLR 37 at 39 [3]. 115 See Kuczborski v Queensland (2014) 254 CLR 51 at 98 [140]. 116 (2009) 240 CLR 319. 117 (2010) 242 CLR 1. 118 (2011) 243 CLR 181. cases provided for asset-freezing orders119. Totani and Wainohu were concerned with control orders120. In each of these two cases, the flaw in the legislation lay in the co-opting of the courts by the executive to implement decisions of the executive. Mr Ryan relied particularly upon this Court's decision in Totani. The Magistrates Court of South Australia was required to make a control order on an application by the Commissioner of Police against a defendant if the defendant was a member of a "declared organisation" without any need to determine, by ordinary judicial processes, whether the defendant was actually engaged in serious criminal activity, a "declared organisation" being an organisation declared to be such by another member of the executive government121. This was a clear case of enlistment of the Court to give effect to the decision of the executive government in relation to particular individuals. Under the HRSO Act, as with the DPSO Act, there is no enlistment of the Court to implement the decisions of the executive government. As has been explained, under the HRSO Act, the Court, in making a restriction order, is required to make a substantial evaluative judgment in order to make that determination. In addition, the Court is obliged to proceed to make that determination by reference to the processes characteristic of the exercise of judicial power. And the Supreme Court must support its determination by giving reasons for its decision. The Court is not permitted to act as the judges acting as "personae designatae" under the provisions challenged in Wainohu were permitted to act, contrary to the characteristic judicial obligation of giving reasons to justify a judicial decision122. In addition, the offender is assured a full opportunity to engage in the process to determine whether or not a restriction order should be made, in contrast to the legislation considered in International Finance Trust which obliged the Supreme Court of New South Wales to proceed to make a restraining order without 119 See Criminal Assets Recovery Act 1990 (NSW). 120 See Serious and Organised Crime (Control) Act 2008 (SA); Crimes (Criminal Organisations Control) Act 2009 (NSW). 121 South Australia v Totani (2010) 242 CLR 1 at 21 [3]-[4]. 122 Wainohu v New South Wales (2011) 243 CLR 181 at 192 [7], 213-215 [54]-[59], regard for ordinary judicial processes123. The legislation in question purported to direct the Supreme Court as to the manner and outcome of its exercise of jurisdiction124. The community On behalf of Mr Garlett it was said that it would be "incredulous" to a fair-minded lay observer that the HRSO Act requires the Court to assess "adequate protection of the community" by reference to the Western Australian community, and the Australian community, and "all other communities" – apparently even Tunisia125. Thus, it was sought to emphasise the excessive scope, and hence the illusory character, of the protective purpose of the HRSO Act. The scope of the expression "community" is indeed broad, but its use is appropriate to direct attention to the risk of harm that the offender poses to the members of the organised society with whom he or she may happen to live from time to time. Indeed, it is in this sense that the expression is frequently used in legislation and in the reasons for judgment in the cases, such as Fardon126: it is the ordinary and natural language of this field of discourse. The references throughout the HRSO Act to protection of the "community", in the extended sense, also serve the practical purpose of ensuring that the protective purpose of the HRSO Act cannot be defeated by the simple expedient of an offender stating an intention to leave Western Australia or the Commonwealth. Sections 29 and 30(2)(f) of the HRSO Act It was said on Mr Garlett's behalf, picking up an argument put on behalf of Mr Ryan, that the effect of s 30(2)(f) of the HRSO Act was that the making of a supervision order was a logical impossibility. This was said to demonstrate a restriction upon the independence of the Court inconsistent with the due exercise of judicial power. The problem was said to arise because, given that the State must be taken to have discharged the burden upon it under s 29, the offender could not discharge the onus cast upon him or her by s 30(2)(f). 123 International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319 at 355 [56], 366-367 [97]-[98], 386-387 [159]-[161]. 124 International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319 at 360 [77]. 125 See s 4 of the HRSO Act. 126 See Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 588 [7]-[8]. This view of the combined operation of ss 29 and 30(2)(f) fails to appreciate that the evaluation of whether or not an offender can discharge the onus of showing a likelihood that he or she will not commit any further serious offences while under a supervision order must inevitably be affected by the restraints upon the offender's conduct imposed by the other conditions referred to in s 30(2)(a)-(e) and (g) of the HRSO Act. In this regard, in Western Australia v ACJ127, Fiannaca J observed: "The question of whether the respondent will substantially comply with the standard conditions of the supervision order requires consideration of all of the circumstances, both personal to him and external, which will affect him. External circumstances include the conditions of the supervision order, the available means to monitor, supervise and treat him, and any pro-social support available to him." These observations by Fiannaca J correctly state the operation of s 30(2)(f). This understanding of the relationship between ss 29 and 30(2)(f) underpins the making of numerous supervision orders by the Court128. The argument for Mr Garlett failed to acknowledge these decisions. In Attorney-General v Francis129, the Court of Appeal of the Supreme Court of Queensland said, in relation to the choice to be made by the Supreme Court of Queensland between a continuing detention order and a supervision order by the analogous provisions of the DPSO Act: "The question is whether the protection of the community is adequately ensured. If supervision of the prisoner is apt to ensure adequate protection, having regard to the risk to the community posed by the prisoner, then an order for supervised release should, in principle, be preferred to a continuing detention order on the basis that the intrusions of the [DPSO] Act upon the liberty of the subject are exceptional, and the liberty 127 [2021] WASC 219 at [416]. 128 See Western Australia v Lewis [No 2] [2020] WASC 377 at [102]-[111]; Western Australia v Atkinson [No 2] [2020] WASC 379 at [87]-[95]; Western Australia v TJZ [2020] WASC 407 at [158]-[169]; Western Australia v PCA [2020] WASC 478 at [388]-[406]; Western Australia v Yorkshire [No 2] [2021] WASC 261 at [117]-[146]; Western Australia v Quartermaine [No 2] [2021] WASC 267 at [155]-[170]; Western Australia v D'Rozario [No 3] [2021] WASC 412 at [136]-[140]; Western Australia v Atkins [No 2] [2022] WASC 45 at [140]-[156]. 129 [2007] 1 Qd R 396 at 405 [39]. of the subject should be constrained to no greater extent than is warranted by the statute which authorised such constraint." That s 29 of the HRSO Act does not require an approach different from that which has been accepted under the DPSO Act has been rightly, and consistently, recognised by the Supreme Court of Western Australia130. So, in ACJ, Fiannaca J said of the operation of s 48 with s 7 of the HRSO Act131: "The court should make the order that is least invasive of the respondent's right to liberty, while at the same time ensuring an adequate degree of protection of the community, having regard to the paramount consideration stipulated in s 48(2)132. As was decided in respect of s 17(2) of the DSO Act, that requirement does not exclude other considerations. Further, the use of the word 'adequate' indicates that a qualitative assessment is required. It cannot simply be assumed that the most assured preventative measure is detention and, therefore, the protection of the community will always favour such an order133." Conclusion The function of the Supreme Court of Western Australia under the HRSO Act is not incompatible with the role of the Court as a repository of the judicial power of the Commonwealth. The HRSO Act does not require the Court to give effect to any decision of the legislature or the executive government. Rather, the Court, in making a restriction order, is required to act upon its own evaluative judgment, by reference to prescribed criteria, in order to determine whether such an order is necessary for the purpose of protecting the community from harm. The performance by the Court of this function proceeds by processes which are familiar aspects of the exercise of judicial power134. The challenge to the validity of item 34 of Subdiv 3 of Div 1 of Sch 1 to the HRSO Act fails. 130 See Director of Public Prosecutions (WA) v DAL [No 2] [2016] WASC 212 esp 131 Western Australia v ACJ [2021] WASC 219 at [32]. 132 Western Australia v Latimer [2006] WASC 235 at [49]. 133 Director of Public Prosecutions (WA) v Decke [2009] WASC 312 at [14]. 134 See Fardon v Attorney-General (Qld) (2004) 223 CLR 575. That part of the appeal pending in the Court of Appeal of the Supreme Court of Western Australia which was removed into the High Court of Australia should be dismissed. 110 This appeal tests the scope and contemporary veracity of the canonical observation in the joint reasons for judgment in Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs135 that, "exceptional cases" aside, "the involuntary detention of a citizen in custody by the [s]tate is penal or punitive in character and, under our system of government, exists only as an incident of the exclusively judicial function of adjudging and punishing criminal guilt". Ch III: Boilermakers and Kable The Lim observation was framed as an observation about the relationship between the citizen and the state under our system of government. It was made in the context of expounding an implication of the structural separation of the "judicial power of the Commonwealth" effected by Ch III of the Constitution. That structural separation constitutes "the Constitution's only general guarantee of due process"; yet its implications are "far-reaching"136. The structural separation of the judicial power of the Commonwealth effected by Ch III of the Constitution had been recognised before Lim. It had come to be associated with R v Kirby; Ex parte Boilermakers' Society of Australia137. The structural separation operates first and foremost to restrict the legislative capacity of the Commonwealth Parliament. It implies that the Commonwealth Parliament: cannot itself exercise any part of the judicial power of the Commonwealth; cannot confer authority to exercise any part of the judicial power of the Commonwealth other than on a court; and cannot confer on a court any authority which is not part of, or incidental to, the judicial power of the Commonwealth. The Lim observation was made in the context of examining the second of those implied restrictions on Commonwealth legislative power. The observation led in that context to the specific conclusion that, with limited exceptions, "the citizens of this country enjoy ... constitutional immunity from being imprisoned by Commonwealth authority except pursuant to an order by a court in the exercise of the judicial power of the Commonwealth"138. However, the import of the observation is much broader than that. 135 (1992) 176 CLR 1 at 27. 136 Re Tracey; Ex parte Ryan (1989) 166 CLR 518 at 580. See also R v Federal Court of Bankruptcy; Ex parte Lowenstein (1938) 59 CLR 556 at 580-581. 137 (1956) 94 CLR 254 at 270. 138 (1992) 176 CLR 1 at 28-29. To appreciate the import of the Lim observation, and in particular to appreciate the generality of its reference to our system of government, it is necessary to begin by noting the range of courts on which the Commonwealth Parliament is permitted to confer the judicial power of the Commonwealth and in respect of which the Commonwealth Parliament is correspondingly restricted from conferring non-judicial power. Those courts are not confined to the High Court139 and other federal courts created by the Commonwealth Parliament140. They encompass all State courts141, together with all Territory courts142. In short, they encompass all courts in Australia. A "court" within the meaning of Ch III is an institution for the administration of justice143: "an independent and impartial tribunal"144 having the institutional capacity to exercise "the power which every sovereign authority must of necessity have to decide controversies between its subjects, or between itself and its subjects, whether the rights relate to life, liberty or property"145 through a fair and transparent judicial process the outcome of which is determined by the application of law as ascertained to facts as found146. Because the separated judicial power of the Commonwealth cannot admit of "different grades or qualities of justice"147 depending on which court in Australia is administering it, the legislative capacity of the Commonwealth Parliament to confer the judicial power of the Commonwealth on all courts in Australia implies that every court in Australia must 139 Sections 71 and 76 of the Constitution. 140 Sections 71 and 77(i) of the Constitution. 141 Sections 71 and 77(iii) of the Constitution. 142 Sections 71 and 122 of the Constitution. 143 North Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 256 CLR 569 at 618 [120]. 144 North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146 145 Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 357. 146 R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 374; TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 533 at 553 [27]. 147 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 103; Condon v Pompano Pty Ltd (2013) 252 CLR 38 at 89 [123]. meet and maintain the standard of institutional integrity requisite of any court having the capacity to exercise it. Hence, a secondary operation of Ch III, which came to be recognised after Lim and to be associated with Kable v Director of Public Prosecutions (NSW)148, is as an implied restriction on the legislative capacities of State Parliaments and Territory legislatures. The restriction has application in relation to the permissible structure of State and Territory courts149. The restriction likewise has application in relation to the content150 and manner of exercise151 of the State and Territory jurisdiction that can be conferred on State and Territory courts. As Kable was explained in Forge v Australian Securities and Investments Commission152: "[T]he relevant principle is one which hinges upon maintenance of the defining characteristics of a 'court' … It is to those characteristics that the reference to 'institutional integrity' alludes. That is, if the institutional integrity of a court is distorted, it is because the body no longer exhibits in some relevant respect those defining characteristics which mark a court apart from other decision-making bodies." The explanation continued153: "It is neither possible nor profitable to attempt to make some single all-embracing statement of the defining characteristics of a court. The cases concerning identification of judicial power reveal why that is so. An important element, however, in the institutional characteristics of courts in Australia is their capacity to administer the common law system of 148 (1996) 189 CLR 51. 149 North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146 at 162-164 [26]-[33]; Forge v Australian Securities and Investments Commission (2006) 228 CLR 45 at 75-76 [62]-[64]. 150 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51; South Australia v Totani (2010) 242 CLR 1. 151 International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319; Wainohu v New South Wales (2011) 243 CLR 181. 152 (2006) 228 CLR 45 at 76 [63]. 153 (2006) 228 CLR 45 at 76 [64]. adversarial trial. Essential to that system is the conduct of trial by an independent and impartial tribunal." The secondary operation of Ch III can therefore be expressed, sufficiently for present purposes, as being to invalidate a State or Territory law which purports to confer upon a State or Territory court a function that "substantially impairs its institutional integrity" considered in terms of its capacity to be (and be seen to be) an institution for the administration of justice according to the common law system of adjudication154. The restriction on Commonwealth legislative power associated with Boilermakers and the restriction on State and Territory legislative powers associated with Kable are accordingly complementary implications from Ch III's separation of the judicial power of the Commonwealth. Each is a structural implication implicit in, and directed to the preservation of, the distinctive nature of the separated judicial power of the Commonwealth. Each serves ultimately to maintain the integrity of the exercise of that judicial power. The relationship of one to the other is derivative in the sense that the Kable restriction follows as a matter of "practical, if not logical necessity" from the Boilermakers restriction155: "To render State and Territory courts able to be vested with the separated judicial power of the Commonwealth, Ch III of the Constitution preserves the institutional integrity of State and Territory courts. A State or Territory law that undermines the actuality or appearance of a State or Territory court as an independent and impartial tribunal is incompatible with Ch III because it undermines the constitutionally permissible investiture in that court of the separated judicial power of the Commonwealth." The derivative nature of the relationship between the Kable restriction and the Boilermakers restriction logically entails that a State or Territory law will not transgress the Kable restriction if a Commonwealth law in the same terms would not transgress the Boilermakers restriction156. The derivative nature of the relationship correspondingly entails that the converse does not hold: to conclude 154 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 591 [15]; Attorney- General (NT) v Emmerson (2014) 253 CLR 393 at 424 [40]. 155 Condon v Pompano Pty Ltd (2013) 252 CLR 38 at 106 [183]. 156 H A Bachrach Pty Ltd v Queensland (1998) 195 CLR 547 at 561-562 [14]; Silbert v Director of Public Prosecutions (WA) (2004) 217 CLR 181 at 186 [10]; Baker v The Queen (2004) 223 CLR 513 at 526-527 [22]-[24]; Condon v Pompano Pty Ltd (2013) 252 CLR 38 at 90 [126]. "that a State [or Territory] law does not infringe the principles associated with Kable does not conclude the question whether a like Commonwealth law for a Ch III court would be valid"157. That is because a State or Territory law can confer on a State or Territory court a non-judicial power, provided always that the non- judicial power is compatible with the institutional integrity of that court as a repository of federal jurisdiction; whereas a Commonwealth law cannot confer a non-judicial power on any Australian court, even if that non-judicial power is compatible with the institutional integrity of that court as a repository of federal jurisdiction158. The Kable restriction on State and Territory legislative power and the Boilermakers restriction on Commonwealth legislative power have a common purpose and complementary operation. If the Commonwealth Parliament could not itself confer a function on a court as an incident of the judicial power of the Commonwealth, the reason why the function lies beyond the power of the Commonwealth Parliament to confer on that court can inform determination of whether the function is properly characterised as incompatible with the institutional integrity of a court so as to be also beyond the power of a State Parliament or Territory legislature to confer on a State or Territory court159. In particular, if a function is not judicial for the reason that its conferral on a court would impair the integrity of that court as an institution for the administration of justice, not only must that function for that reason lie beyond the power of the Commonwealth Parliament to confer on any Australian court, but the same function for the same reason must lie beyond the power of a State Parliament or Territory legislature to confer on any State or Territory court. That leads to the proposition that if a function is non-judicial for the reason that having that function would impair the institutional integrity of a court, legislative conferral of that function must be offensive to the Kable restriction on State and Territory legislative power in the same way as it is offensive to the Boilermakers restriction on Commonwealth legislative power. In respect of a non- judicial function of that nature, the Boilermakers restriction and the Kable restriction are indistinguishable. Ch III: Lim, "institutional integrity" and "the rule of law" That brings me to the content of the Lim observation and to the significance of that observation to what was described in Forge as an "important element ... in 157 Condon v Pompano Pty Ltd (2013) 252 CLR 38 at 90 [126]. 158 See Condon v Pompano Pty Ltd (2013) 252 CLR 38 at 89-90 [124]-[125]. 159 See Vella v Commissioner of Police (NSW) (2019) 269 CLR 219 at 278 [147]. the institutional characteristics of courts in Australia", being "their capacity to administer the common law system of adversarial trial"160. The Lim observation "has its foundation in the concern for the protection of personal liberty lying at the core of our inherited constitutional tradition", and needs to be understood in the context of liberty having been recognised as "the most elementary and important of those basic common law rights, which traditionally, and therefore historically, are judged by that independent judiciary which is the bulwark of freedom"161. The observation was introduced within the structure of the joint reasons in Lim by the notation that the adjudgment and punishment of criminal guilt is the "most important" of the functions "which, by reason of their nature or because of historical considerations, have become established as essentially and exclusively judicial in character". From that characterisation of the function as exclusively judicial, it was noticed to follow that, consistently with the Boilermakers restriction on Commonwealth legislative power, the Commonwealth Parliament could not confer the function other than as part of the judicial power of the Commonwealth on a court162. Why the adjudgment and punishment of criminal guilt has always been characterised as an exclusively judicial function, as I have said in the past, "is founded on deeply rooted notions of the relationship of the individual to the state going to the character of the national polity created and sustained by the Constitution"163. Bearing in mind that "[m]any of our fundamental freedoms are guaranteed by ancient principles ... which are so much part of the accepted constitutional framework that their terms, if not their very existence, may be overlooked until a case arises which evokes their contemporary and undiminished 160 Forge v Australian Securities and Investments Commission (2006) 228 CLR 45 at 161 North Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 256 CLR 569 at 610 [94], quoting Williams v The Queen (1986) 161 CLR 278 at 292 and R v Quinn; Ex parte Consolidated Foods Corporation (1977) 138 CLR 1 at 11 (cleaned up). 162 (1992) 176 CLR 1 at 27. 163 Magaming v The Queen (2013) 252 CLR 381 at 400 [63]. See also Vella v Commissioner of Police (NSW) (2019) 269 CLR 219 at 276 [141]. force"164, I recognise that the nature of the relationship to which I referred cannot be taken for granted and calls for further elaboration165. Now attempting to provide that further elaboration, I hesitate to use the language of "the rule of law". The language can become hackneyed and the profoundness of the constitutional values encapsulated within it can be diminished by over-theorisation. Still, the essence of the relationship between the individual and the state underpinned by the commitment of the function of adjudging and punishing of criminal guilt exclusively to courts has to be acknowledged to have been a core component of Albert Venn Dicey's prototypical exposition of the "rule of law"166 which came to prominence in the final decade of the nineteenth century when the Constitution was in the process of formation. Expressed in Dicey's words, the essence of the relationship between the individual and the state under our system of government is that the individual is "ruled by the law, and by the law alone" such that the individual "may with us be punished for a breach of law, but ... for nothing else"167. Notably, those exact words were quoted in the joint reasons for judgment in Lim168 in support of the canonical observation. The import of the Lim observation can only be fully appreciated having regard to the standard incidents of the common law system within which that exclusive judicial function of adjudging and punishing criminal guilt has historically been performed169. Those standard incidents have long been that "[t]he judiciary is called on ... to hear and authoritatively determine a controversy about an existing liability of the individual which is claimed by the executive [as the representative of the state] to arise solely from the operation of some positive law on some past event or conduct" as a result of which "[d]eprivation of the liberty of the individual occurs only if the determination of the controversy is by conviction" 164 Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 520-521. 165 See Stellios, "Liberty as a Constitutional Value: The Difficulty of Differing Conceptions of 'The Relationship of the Individual to the State'", in Dixon (ed), Australian Constitutional Values (2018) 177. 166 Dicey, Lectures Introductory to the Study of the Law of the Constitution (1885) at 167 Dicey, Lectures Introductory to the Study of the Law of the Constitution (1885) at 215. See also Ex parte Walsh and Johnson; In re Yates (1925) 37 CLR 36 at 79. 168 (1992) 176 CLR 1 at 27-28. 169 Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 189 [71]; 388 ALR 1 and then "only through the judicial pronouncement of a sentence which reflects the penal consequence prescribed by law for the liability determined by the conviction to have arisen from the operation of the positive law on the past event or conduct"170. Those standard incidents reflect what Dixon and Evatt JJ described in R v Federal Court of Bankruptcy; Ex parte Lowenstein171 as a "long course of development" that "produced a conception of the judicial process which placed the court in the position of a detached tribunal entertaining and determining civil and criminal pleas brought before it". "It is true that in relation to contempt of court the courts of justice are armed with powers of summary punishment, at all events for contempts in facie curiae exercisable ex mero motu", their Honours added, "[b]ut this has always been regarded as an exceptional power based on the necessity of keeping order and of preserving the court from actual interference in the discharge of its duties". The constitutional characterisation of the function of adjudging and punishing criminal guilt as exclusively judicial, and therefore as able to be performed only by a court other than in an exceptional case, is obviously protective of individual liberty in the procedural sense of preventing detention in custody at the initiative of the state other than through the agency of an independent and impartial tribunal according to a fair and transparent process. But the deeper and broader import of the Lim observation is to be found in the standard incidents of the common law system of adversarial trial protecting individual liberty in the substantive sense of allowing for detention in custody at the initiative of the state only where detention in custody is the penal consequence prescribed by law for an existing criminal liability determined to have arisen from the operation of positive law on past events or conduct172. That substantive constitutional significance of consigning the function of adjudging and punishing criminal guilt exclusively to the judicial branch of government is the central contribution that our common law system of adversarial trial has made to establishing and maintaining the relationship between the individual and the state within our inherited conception of the rule of law. Although rarely articulated, and all too readily overlooked, it lies at the heart of our system of government. 170 Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 188-189 [69]; 388 ALR 1 at 24. 171 (1938) 59 CLR 556 at 588-589. 172 See Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 189 [71]-[72]; 388 ALR 1 at 24-25. The Lim observation spelt out that the relationship between the individual and the state protected by Ch III is a relationship within which freedom of the individual from involuntary detention by the state, other than as a penal consequence prescribed by law for an existing criminal liability determined to have arisen from the operation of positive law on past events or conduct, is the norm. Exceptional cases have always existed and can be expected always to exist. The plurality in Lim was careful both to acknowledge the inevitability of exceptional cases and to avoid seeking to bring them within a closed category. Much more, however, was the plurality in Lim at pains to emphasise their exceptionality. Other than in what is truly an exceptional case, and other than as an incident of the adjudgment and punishment of criminal guilt, conferral on a court of a function that involves the creation of a liability to detention in custody through an act of adjudication is not simply antithetical to the character of that court as an institution for the administration of justice. Conferral of such a function is antithetical to the very conception of justice which it is the responsibility of courts to administer. The significance of the Lim observation for present purposes is therefore that legislative conferral on a court of a function that involves the creation of a liability to detention in custody through an act of adjudication other than as an incident of the adjudgment and punishment of criminal guilt must infringe both the Boilermakers restriction on Commonwealth legislative power and the Kable restriction on State and Territory legislative power, unless conferral of that function can be justified as within a category of exceptional case. That is so irrespective of whether the function can be performed in accordance with a judicial process. That understanding of the significance of the Lim observation to the Kable restriction on State and Territory legislative power is underscored by the significance attributed to the observation by each member of the majority in Kable in holding invalid a State law purporting to confer jurisdiction on a State court to order the continuing detention of a named individual. The observation was "applied as a step in the reasoning" of two members of the majority173 and was "reflected" in the reasoning of two other members of the majority174. The upholding by the majority in Fardon v Attorney-General (Qld)175 of the conferral on a State court by a State Parliament of a function of creating a liability 173 (1996) 189 CLR 51 at 97-98, 131-132. 174 (1996) 189 CLR 51 at 106-107, 121-122. See Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 611 [77]. 175 (2004) 223 CLR 575. to be detained in custody in order to safeguard against a "serious danger to the community" arising by reason of "an unacceptable risk" that the individual would commit "an offence of a sexual nature ... involving violence [or] against children" is explicable on the basis of the conferral of that function having been within a category of exceptional case so as not to have infringed the Kable restriction. The conferral was characterised by Gleeson CJ in the language of Deane J in Veen v The Queen [No 2]176 as an incident of an "acceptable statutory system of preventive restraint to deal with the case of a person who has been convicted of violent crime and who, while not legally insane, might represent a grave threat to the safety of other people by reason of mental abnormality if he were to be released as a matter of course at the end of what represents a proper punitive sentence"177. The upholding by the majority in Minister for Home Affairs v Benbrika178 of the conferral on a court by the Commonwealth Parliament of a function of creating a liability to be detained in custody in order to protect the community from "an unacceptable risk" of a "serious" offence relating to terrorism is similarly explicable on the basis of the conferral of that function having been within a category of exceptional case so as not to have infringed the Boilermakers restriction. I will say something more about Benbrika in the context of addressing the identification of an exceptional case. Identifying an exceptional case Dissenting in Fardon179, Kirby J remarked that "[t]he categories of exception to deprivations of liberty treated as non-punitive may not be closed; but they remain exceptions". His Honour added that "[t]hey are, and should continue to be, few, fully justifiable for reasons of history or reasons of principle developed by analogy with the historical derogations from the norm". I agree with that approach. I do not think that its adoption is countermanded by the decision of the majority in that case or in any subsequent case. Vella v Commissioner of Police (NSW)180, like Thomas v Mowbray181, concerned a legislative conferral on a court of a function which involved the court in the imposition of a restriction of liberty falling short of detention in custody. 176 (1988) 164 CLR 465 at 495. 177 (2004) 223 CLR 575 at 588-589 [9], 592 [20]. 178 (2021) 95 ALJR 166; 388 ALR 1. 179 (2004) 223 CLR 575 at 634 [155]. 180 (2019) 269 CLR 219. 181 (2007) 233 CLR 307. The issue in Vella was as to the compatibility of State legislation with the Kable restriction on State legislative power. The issue in Thomas was as to the compatibility of Commonwealth legislation with the Boilermakers restriction on Commonwealth legislative power. In Vella, albeit in dissent, I advanced the following general proposition182: "Where an exercise of a power conferred on a court settles no question as to the existence of any antecedent right or obligation yet results in an order imposing a new and enduring restriction on liberty, some special and compelling feature ought to be found to exist for its inclusion in the category of judicial power to be justified. Characterisation of the power as judicial ought to require at least that the criteria to be applied by the court in making the order are legislatively tailored to the achievement of a legislatively specified protective outcome." Consistently with that proposition, and albeit again in dissent, I drew attention in Benbrika183 to the prior formulation of a more specific principle for determining when conferral on a court of a function of creating a liability to be detained in custody through an act of adjudication in a novel category of case can be taken to fall within Lim's reference to exceptional cases. The principle was formulated by Gummow J in Kruger v The Commonwealth184 and adopted by Callinan and Heydon JJ in Fardon185: "The question whether a power to detain persons or to take them into custody is to be characterised as punitive in nature, so as to attract the operation of Ch III, depends upon whether those activities are reasonably capable of being seen as necessary for a legitimate non-punitive objective. The categories of non-punitive, involuntary detention are not closed." Within the principle so formulated, the term "legitimate" is an important qualifier. As elsewhere in constitutional analysis186, the term signifies a need for compatibility with the constitutionally prescribed system of government. Used to qualify "non-punitive", the term serves to emphasise that a legislative objective 182 (2019) 269 CLR 219 at 287 [171]. 183 (2021) 95 ALJR 166 at 190-191 [78]; 388 ALR 1 at 26-27. 184 (1997) 190 CLR 1 at 162. 185 (2004) 223 CLR 575 at 653-654 [215]. 186 See Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 191 [78]; 388 ALR 1 at 26-27, citing McCloy v New South Wales (2015) 257 CLR 178 at 231 [130]. See also Cunliffe v The Commonwealth (1994) 182 CLR 272 at 324. sought to be pursued by means of involuntary detention is not automatically to be accepted as compatible with the constitutionally prescribed system of government merely because that objective can be characterised as non-punitive. Elaborating on the principle formulated by Gummow J in Kruger, with particular reference to the subsequent analysis of Gummow J in Fardon187, I sought to explain in Benbrika why mere prevention of the commission of a criminal offence cannot be a legitimate non-punitive objective whilst acknowledging that protection from harm can be a legitimate non-punitive objective if the harm sought to be protected from by preventing the commission of the offence can be characterised as grave and specific188. My reasoning in Benbrika did not deny that, under our system of government, it is for the legislative branch of government to prescribe the severity of the punishment that can be imposed by a court where an existing criminal liability is determined by a court to have arisen from the operation of positive law on past events or conduct. My reasoning cast no doubt on the proposition that "[i]t is distinctly the province of the legislature to gauge the seriousness of what is seen as an undesirable activity affecting the peace, order and good government of the [polity] and the soundness of a view that condign punishment is called for to suppress that activity"189. The burden of my analysis in Benbrika was rather to discern and put into words a principled basis for the identification of a legitimate non-punitive legislative objective such as might be capable of justifying the conferral on a court of the extraordinary function of creating a liability to detention in custody in order to prevent a criminal offence from being committed in the future. To accept prevention of the commission of a criminal offence in the future to be capable of justifying conferral on a court of the function of creating a liability to detention, without a requirement for the criminal offence to be capable of giving rise to grave and specific harm if committed, it seemed to me, would be to admit of the extraordinary becoming the ordinary – the exception becoming the rule. To concede to a legislature an unconstrained choice as to which criminal offences are to be treated as capable of giving rise to harm of sufficient magnitude or "seriousness" to justify conferral of such a function on a court, it seemed to me also, would be to admit of the same result. 187 (2004) 223 CLR 575 at 608-614 [68]-[89]. 188 (2021) 95 ALJR 166 at 188-193 [66]-[89]; 388 ALR 1 at 23-29. 189 Magaming v The Queen (2013) 252 CLR 381 at 414 [105]. See also at 397-398 [52], To any suggestion that such a result ought to be excluded from constitutional analysis as a "distorting possibility"190, two responses are appropriate. One is to recall the lesson of history that "[t]he preventive function of government ... is far more liable to be abused, to the prejudice of liberty, than the punitory function" given that "there is hardly any part of the legitimate freedom of action of a human being which would not admit of being represented, and fairly too, as increasing the facilities for some form or other of delinquency"191. The other is to observe the contemporary trend towards expansion in the range of offences legislatively designated to be sufficiently "serious" to justify preventive detention that can be seen in the sequence of cases beginning with Kable and moving on to Fardon, to Benbrika, and now to the present case. So it seemed to me at the time of the decision in Benbrika; so it seems to me now. To accept without qualification that prevention of the commission of a criminal offence in the future is an objective capable of justifying the conferral on a court of the function of creating a liability to detention in custody would be to permit the Lim exception to hollow out the Lim norm. That outcome would alter in a fundamental respect the nature of the relationship conventionally understood to exist between the individual and the state under our inherited conception of the rule of law. I cannot regard that outcome as permissible within our constitutional structure. Revisiting Benbrika with the benefit of argument in this appeal, I adhere to the principle formulated by Gummow J in Kruger as I there elaborated it. I am persuaded by the argument of the appellant that its acceptance is not precluded by the holding in Benbrika that the legislation there in issue did not infringe the Lim restriction on legislative power and that the difference between the majority and the minority can be seen to have turned on a difference in preparedness to accept the gravity of the harm sought to be protected against across the range of terrorism offences legislatively designated as "serious". Explaining the Lim exception, the plurality in Benbrika said that it is "the protective purpose that qualifies a power as an exception to a principle that is recognised under our system of government as a safeguard on liberty". The plurality emphasised that a non-punitive purpose is "essential" but would not "suffice" to engage the Lim exception and further emphasised that as a "matter of substance, the power must have as its object the protection of the community from harm"192. As to the gravity of the requisite harm, the conclusion of the plurality 190 Kartinyeri v The Commonwealth (1998) 195 CLR 337 at 381 [88], quoting Western Australia v The Commonwealth (1975) 134 CLR 201 at 275. 191 Mill, On Liberty (1859) at 172. 192 (2021) 95 ALJR 166 at 181 [36]; 388 ALR 1 at 14. that there was "no principled reason for distinguishing the power of a Ch III court to order that a mentally ill person be detained in custody for the protection of the community from harm and the power to order that a terrorist offender be detained in custody for the same purpose" was expressly premised on the assessment that "[t]errorism poses a singular threat to civil society"193 and was the result of the reasoned satisfaction of the plurality that the legislation in issue was "rightly characterised as directed to ensuring the safety and protection of the community from the risk of harm posed by the threat of terrorism"194. Robbery is not exceptional "The Constitution is a political instrument. It deals with government and governmental powers"195. But the Constitution is also supreme law and, axiomatically196, "[i]t is, emphatically, the province and duty of the judicial department to say what the law is"197. Making contestable judgments of degree is inescapable in constitutional adjudication198; it is a judicial responsibility. If the foregoing analysis is correct, then it must be accepted that assessment of the gravity of harm sufficient for protection from the harm to be characterised as a legitimate non-punitive objective, capable of justifying legislative conferral of a power of involuntary detention outside the Lim norm, is a judgment of that nature. The judgment falls to be made with an eye on history, including recent history199, cognisant of the consequences of departing from the Lim norm other than in truly exceptional cases, and mindful of the need in recognising exceptional cases to avoid what has been called "the domino method of constitutional 193 (2021) 95 ALJR 166 at 181 [36]; 388 ALR 1 at 14. 194 (2021) 95 ALJR 166 at 185 [47]; 388 ALR 1 at 19. 195 Melbourne Corporation v The Commonwealth (1947) 74 CLR 31 at 82. 196 Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 262-263. 197 Marbury v Madison (1803) 5 US 137 at 177. 198 eg Austin v The Commonwealth (2003) 215 CLR 185 at 249 [124]. 199 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 646 [190], citing Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 187-188. adjudication ... wherein every explanatory statement in a previous opinion is made the basis for extension to a wholly different situation"200. Embracing that responsibility in the present case, I cannot accept that the offences of robbery and assault with intent to rob201 are capable of giving rise to harm of sufficient gravity to justify conferral on a court of a function of creating a liability to detention in custody in order to "ensure adequate protection of the community against an unacceptable risk"202 of their commission. Never have robbery and assault not been offences known to the law. Never has loss of either life or liberty not been a penal consequence prescribed by law for their commission. Neither offence, of course, is victimless: each involves the use or threat of violence to a person or to property. Yet in the gravity of the harm it has potential to cause, neither offence is analogous to an offence of a sexual nature involving violence or against a child as in Fardon, or to an offence relating to terrorism as in Benbrika. If robbery is an offence protection from harm from which is sufficient to justify empowering a court to order pre-emptive detention in custody, it needs to be asked: what offence is not? Unless the observation in Lim is to be treated as no longer descriptive of our system of government, a State or Territory law purporting to empower a State or Territory court to order detention in custody merely to ensure adequate protection of the community against an unacceptable risk of harm from robbery must contravene the restriction on State and Territory legislative power recognised in Kable just as a Commonwealth law in the same terms must contravene the restriction on Commonwealth legislative power recognised in Boilermakers. In the result, I would allow the appeal and make the consequential orders 200 Condon v Pompano Pty Ltd (2013) 252 CLR 38 at 94 [137], quoting Friendly, "The Bill of Rights as a Code of Criminal Procedure" (1965) 53 California Law Review 201 Sections 392 and 393 of the Criminal Code (WA), referred to in items 34 and 35 of Subdiv 3 of Div 1 of Sch 1 to the High Risk Serious Offenders Act 2020 (WA). 202 Section 7(1) of the High Risk Serious Offenders Act 2020 (WA). 161 GORDON J. This case concerns a preventive detention regime – the High Risk Serious Offenders Act 2020 (WA) ("the HRSO Act") – in relation to the offence of "robbery"203. It raises a question, fundamental to the rule of law in a democratic society, about whether, consistently with Ch III of the Constitution, the judiciary, as the protector of the liberty of the individual, may deprive an individual of their liberty, not to punish them for a crime committed but to prevent the prospect of a further offence based on an individual's propensity to commit robbery. Under the HRSO Act, which authorises the coercive and preventive detention of individuals, the Supreme Court of Western Australia is the key player. Insofar as that regime concerns the offence of robbery, the role of the Supreme Court is contrary to Ch III of the Constitution – its role is antithetical to its status as an institution "established for the administration of justice"204. The premise of the HRSO Act is that those who have offended may offend again. Detention – imprisonment – of any individual protects society from anything and everything that that individual might do if at large in society205. Labelling the HRSO Act scheme, and the role of the Supreme Court, as "preventive justice" is a misnomer. It is not justice. The HRSO Act scheme, at least in its operation with respect to robbery, is contrary to Ch III and undermines underpinning Ch III's strict separation of Commonwealth judicial power from executive and legislative power: first, the historical judicial protection of liberty against incursions by the legislature or the Executive; and second, the protection of the independence and impartiality of the judiciary so as to ensure that the judiciary can operate effectively as a check on legislative and executive power206. – or constitutional values two key rationales the Before addressing Ch III of the Constitution, liberty and punishment, four matters should be addressed at the outset. 203 HRSO Act, Sch 1, Div 1, Subdiv 3, item 34. See also Criminal Code (WA), s 392. 204 cf North Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 256 CLR 569 at 621 [134] ("NAAJA"). 205 cf Vella v Commissioner of Police (NSW) (2019) 269 CLR 219 at 292 [186]. 206 See Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 201 [136]; see also 202-203 [138]-[142]; 388 ALR 1 at 40; see also 41-42. Preventive detention regimes and "preventive justice" First, "preventive justice"207 (use of "coercive preventive measures"208) is not a new concept; it is a concept with "over two hundred years of history"209. But it is important to understand what "coercive preventive measures" seek to achieve and how. They have two aspects: they are not only preventive, they are coercive. "[A] measure is preventive if it is created in order to avert, or reduce the frequency or impact of, behaviour that is believed to present an unacceptable risk of harm"; and "[i]t is coercive if it involves state-imposed restrictions on liberty of action, backed by a coercive response, or the threat of a coercive (emphasis added). The HRSO Act scheme contains both aspects. Although the HRSO Act authorises the making of two different types of coercive preventive measures, both referred to as "restriction order[s]"211 – which is defined to mean a "continuing detention order"212 or a "supervision order"213 – it is sufficient for present purposes to focus on the validity of the HRSO Act insofar as it authorises the making of a continuing detention order. There was no dispute that the supervision order regime cannot be severed from the continuing detention order regime – they are inextricably intertwined and cannot be disentangled by severance214. individual"210 response, restricted the Second, this proceeding is the latest in a series of cases215 involving challenges to the validity of coercive preventive justice regimes on the basis that 207 Blackstone, Commentaries on the Laws of England (1769), bk 4, ch 18 at 248, referring to the power to bind persons to keep the peace. See also Thomas v Mowbray (2007) 233 CLR 307 at 329 [16]; Vella (2019) 269 CLR 219 at 236-237 208 See Ashworth and Zedner, Preventive Justice (2014) at 2, 5-7, 20-21. 209 Zedner, "Taking the Preventive Justice Project Forward", in Tulich et al (eds), Regulating Preventive Justice: Principle, Policy and Paradox (2017) xiii at xiii. 210 Ashworth and Zedner, Preventive Justice (2014) at 20. 211 HRSO Act, s 3 definition of "restriction order". 212 HRSO Act, s 26. 213 HRSO Act, s 27; see also s 30. 214 See, eg, HRSO Act, ss 3 definition of "restriction order", 7(1), 35(4), 48. 215 See Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51; Fardon v Attorney-General (Qld) (2004) 223 CLR 575; Thomas (2007) 233 CLR 307; South the regimes infringed Ch III of the Constitution. Other than in Kable v Director of Public Prosecutions (NSW)216 and South Australia v Totani217, in each of those cases the Court upheld the validity of the impugned regimes218. Some of the regimes considered by the Court involved post-sentence continuing detention219; others involved restrictions on liberty falling short of detention in custody220. They are not all alike221. Third, propositions embraced incrementally by this Court in those decisions (since Kable222) have led to coercive preventive justice regimes becoming "an increasingly prominent feature of lawmaking in Australia"223 and to Parliaments adjusting the design of such regimes to be more far-reaching and Australia v Totani (2010) 242 CLR 1; Wainohu v New South Wales (2011) 243 CLR 181; Pollentine v Bleijie (2014) 253 CLR 629; Vella (2019) 269 CLR 219; Benbrika (2021) 95 ALJR 166; 388 ALR 1. 216 (1996) 189 CLR 51. 217 (2010) 242 CLR 1. And leaving aside Wainohu (2011) 243 CLR 181, in which the Court held wholly invalid the impugned legislation but on a basis that is not presently relevant: see 217-220 [65]-[70], 228-230 [104]-[109]; cf 220 [72], 218 See Fardon (2004) 223 CLR 575 at 593 [24], 601-602 [43]-[44], 619-622 [106]-[120], 647-648 [195]-[198], 658 [234]; cf 646-647 [191]-[194]; Thomas (2007) 233 CLR 307 at 326-335 [10]-[30], 342-358 [61]-[126], 506-509 Pollentine (2014) 253 CLR 629 at 651 [52]-[53], 658 [77]; Vella (2019) 269 CLR 219 at 234 [20], 261 [91]; cf 262 [94], 291 [181], [182]; Benbrika (2021) 95 ALJR 166 at 185-186 [53], 227 [239]; cf 187 [64], 193-195 [90]-[99], 196 [109], 210-211 [177]-[179]; 388 ALR 1 at 20, 74; cf 22, 29-32, 33, 52. 219 Kable (1996) 189 CLR 51; Fardon (2004) 223 CLR 575; Benbrika (2021) 95 ALJR 166; 388 ALR 1. 220 Totani (2010) 242 CLR 1; Vella (2019) 269 CLR 219. See also Wainohu (2011) 243 CLR 181. 221 cf Thomas (2007) 233 CLR 307 at 356 [116]. 222 (1996) 189 CLR 51. 223 See Tulich, Murray and Skead, "Antipodean Perspectives on Preventive Justice: The High Court and Serious Crime Prevention Orders" (2021) 30 Griffith Law Review 211 at 232. intrusive224. Regimes which once were seen as exceptional measures to address specific community fears about particular kinds of crime – terrorism or serious sexual offences – now risk becoming the norm225, and extending to protect the community against the commission of a broad category of offences and conduct where the nature and extent of the harm that may be caused to persons or property by the prospective commission of an offence varies widely226. And that is not without danger. Where risk comes to prevail as the main driver of policy, there is a danger of "the logic of risk reduction ... permit[ting] ever more intrusive and liberty-eroding "[t]he preventive function of government ... is far more liable to be abused, to the prejudice of liberty, than the punitory function"228. incursions"227. As John Stuart Mill warned That leads to the fourth observation: the potential normalisation of regimes that override individuals' liberty on the grounds of legislatively asserted "preventive" or "protective" imperatives, unrelated to the adjudgment and punishment of criminal guilt, inevitably presents risks to the institutional integrity of courts – institutions established for the administration of justice229 – and the separation of powers. The coercive preventive justice regimes that are enacted must reflect and respect the two key rationales – or constitutional values – that underpin, and are protected by, Ch III's strict separation of federal judicial power230. Those core constitutional values – "conventions of [the] 'rule of law'" – cannot be waived or set aside for the protection of the community against what is 224 cf Loughnan and Selchow, "Preventive Detention Beyond the Law: The Need to Ask Socio-Political Questions", in Keyzer (ed), Preventive Detention: Asking the Fundamental Questions (2013) 261 at 269. 225 McSherry and Keyzer, Sex Offenders and Preventive Detention: Politics, Policy and Practice (2009) at 114. See also Zedner, "Taking the Preventive Justice Project Forward", in Tulich et al (eds), Regulating Preventive Justice: Principle, Policy and Paradox (2017) xiii at xxii. 226 cf Benbrika (2021) 95 ALJR 166 at 209 [167]; 388 ALR 1 at 50. 227 Zedner, "Neither Safe Nor Sound? The Perils and Possibilities of Risk" (2006) 48 Canadian Journal of Criminology and Criminal Justice 423 at 425. 228 Mill, On Liberty (1859) at 172. 229 cf NAAJA (2015) 256 CLR 569 at 621 [134]. 230 See Benbrika (2021) 95 ALJR 166 at 201 [136]; see also 202-203 [138]-[142]; 388 ALR 1 at 40; see also 41-42. asserted to be a "growing number of 'predators'"231, relevantly in this case: (a) persons convicted of a "serious offence"232 (whether robbery233 or another "serious offence") who pose an unacceptable risk of committing a robbery in the future234; and (b) persons convicted of robbery who pose an unacceptable risk of committing a "serious offence" in the future (whether robbery or another "serious offence"). Ch III of the Constitution, liberty and punishment The doctrine of separation of powers enshrined in Ch III of the Constitution – underpinned by and protecting the two core constitutional values discussed above – mandates "an allocation of the judicial power of the Commonwealth which is both exclusive and exhaustive"235. "Chapter III's separation of the judicial power of the Commonwealth to be exercisable only by courts 'was not a product of abstract reasoning alone, and was not based upon precise definitions of the terms employed'. Rather, it was 'based upon observation of the experience of democratic states'"236. The separation of the different branches of government – itself a "safeguard of individual liberty"237 – was and remains achieved "by requiring a distinction to be maintained between powers described as legislative, executive and judicial", by reference "not to fundamental functional differences between powers, but to distinctions … between classes of powers requiring different 'skills and professional habits' in the authorities entrusted with their exercise"238. 231 Rose, "Government and Control" (2000) 40 British Journal of Criminology 321 at 334. See also Totani (2010) 242 CLR 1 at 91 [233]. 232 HRSO Act, s 5; see also Sch 1, Divs 1 and 2. 233 HRSO Act, Sch 1, Div 1, Subdiv 3, item 34. See also Criminal Code (WA), s 392. 234 HRSO Act, s 7(1). 235 NAAJA (2015) 256 CLR 569 at 613 [104]. 236 Vella (2019) 269 CLR 219 at 276 [141], quoting R v Davison (1954) 90 CLR 353 at 237 Davison (1954) 90 CLR 353 at 381. 238 Davison (1954) 90 CLR 353 at 381-382, quoted with approval in Vella (2019) 269 CLR 219 at 276 [141], 292 [190] and Benbrika (2021) 95 ALJR 166 at 188 [67], 202 [139]; 388 ALR 1 at 23, 41. See also White v Director of Military Prosecutions In the criminal law context, the different skills and professional habits of the legislature, Executive and judiciary are of fundamental importance. As explained in Vella239: "It is the legislature that has the power, skills and resources to identify what conduct should be unlawful, to legislate to make that conduct unlawful and then to take any other steps the legislature considers necessary to reinforce the fact that, and to explain why, that conduct is now unlawful. It is the legislature that prescribes norms of conduct which govern the manner in which individuals are required to behave. It is the legislature that determines how best to protect the public against criminal behaviour by determining what conduct should be prohibited, how it should be punished, and what powers and resources the police force should have to detect and prevent crime." (emphasis added) It is the Executive that executes the laws made by the Parliament240. In the criminal law context, the Executive is responsible for law enforcement241, policing and detecting crime242, preventing the commission of crime to the extent possible243 and executing sentences imposed by courts as punishment for criminal offences244. It is the Executive that has the skills and professional habits to undertake those functions. (2007) 231 CLR 570 at 594 [45]; Thomas (2007) 233 CLR 307 at 464 [463]; Murphy v Electoral Commissioner (2016) 261 CLR 28 at 123-124 [303]; Palmer v Ayres (2017) 259 CLR 478 at 502-503 [62]; Brown v Tasmania (2017) 261 CLR 328 at 239 (2019) 269 CLR 219 at 293 [191]. 240 Plaintiff M68/2015 v Minister for Immigration and Border Protection (2016) 257 CLR 42 at 158 [373], quoting R v Kidman (1915) 20 CLR 425 at 441. See also Davis v The Commonwealth (1988) 166 CLR 79 at 108; Pape v Federal Commissioner of Taxation (2009) 238 CLR 1; Williams v The Commonwealth [No 2] (2014) 252 CLR 241 See Lipohar v The Queen (1999) 200 CLR 485 at 576 [237], 583 [254]. 242 See Benbrika (2021) 95 ALJR 166 at 207 [160]; 388 ALR 1 at 48. 243 See Vella (2019) 269 CLR 219 at 293 [191]. 244 Leeth v The Commonwealth (1992) 174 CLR 455 at 471; Nicholas v The Queen (1998) 193 CLR 173 at 187 [18]. Adjudgment and punishment of criminal guilt, on the other hand, is an exclusively judicial function245. Although judicial power is not susceptible to an exhaustive or exclusive definition246, it is at its core "the power which every sovereign authority must of necessity have to decide controversies between its subjects, or between itself and its subjects, whether the rights relate to life, liberty or property"247. The standard incidents of the exercise of judicial power in the adjudgment and punishment of criminal guilt for an offence are "founded on deeply rooted notions of the relationship of the individual to the state going to the character of the national polity created and sustained by the Constitution"248. As Gageler J explained in Minister for Home Affairs v Benbrika249, in the "[t]rial 245 Federal Commissioner of Taxation v Munro (1926) 38 CLR 153 at 175; R v Quinn; Ex parte Consolidated Foods Corporation (1977) 138 CLR 1 at 11; Re Tracey; Ex parte Ryan (1989) 166 CLR 518 at 580; Polyukhovich v The Commonwealth (1991) 172 CLR 501 at 536, 609-610, 612, 646, 685-686, 721; Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 27; Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245 at 258, 269; Attorney-General (Cth) v Breckler (1999) 197 CLR 83 at 109 [40]; Magaming v The Queen (2013) 252 CLR 381 at 396 [47], 399-400 [61]-[63]; Kuczborski v Queensland (2014) 254 CLR 51 at 120 [233]; Duncan v New South Wales (2015) 255 CLR 388 at 407 [41]; Falzon v Minister for Immigration and Border Protection (2018) 262 CLR 333 at 340 [15]; Benbrika (2021) 95 AJLR 166 at 177-178 [18]-[19], 189 [72], 202 [140], 207 [160], 218 [207]-[208]; 388 ALR 1 246 Benbrika (2021) 95 ALJR 166 at 204 [146]; 388 ALR 1 at 43, citing Davison (1954) 90 CLR 353 at 366, R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 373, Precision Data Holdings Ltd v Wills (1991) 173 CLR 167 at 188-189, Brandy (1995) 183 CLR 245 at 267-268, Re Woolley; Ex parte Applicants M276/2003 (2004) 225 CLR 1 at 22 [51], Thomas (2007) 233 CLR 307 at 414 [306] and Attorney-General (Cth) v Alinta Ltd (2008) 233 CLR 542 247 Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 357, quoted with approval in Vella (2019) 269 CLR 219 at 279 [151] and Benbrika (2021) 95 ALJR 166 at 204 [146]; 388 ALR 1 at 43. See also Waterside Workers' Federation of Australia v J W Alexander Ltd (1918) 25 CLR 434 at 442-443; Brandy (1995) 183 CLR 245 at 267-268; Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at 355-359 [45]-[56]; Alinta (2008) 233 CLR 542 at 577 [94], 592-593 [153]-[155]; Totani (2010) 242 CLR 1 at 86 [220]. 248 Benbrika (2021) 95 ALJR 166 at 189 [70]; 388 ALR 1 at 24, quoting Magaming (2013) 252 CLR 381 at 400 [63]. 249 (2021) 95 ALJR 166 at 188 [69]; 388 ALR 1 at 24. of an individual for an offence at the instigation of the executive, whether by jury or by judge alone, ... [t]he judiciary is called on ... to hear and authoritatively determine a controversy about an existing liability of the individual which is claimed by the executive to arise solely from the operation of some positive law on some past event or conduct". It is only if the determination of the controversy is by conviction that the individual may be deprived of their liberty pursuant to judicial pronouncement of a sentence250. Those characteristics of "judicial power" and of the judiciary (the institution qualified to exercise it) "are deeply rooted in a tradition within which judicial protection of individual liberty against legislative or executive incursion has been a core value"251. The Court, therefore, must be cognisant of, and vigilant to protect against, laws that are corrosive to or erode those key rationales – or constitutional values – underpinning the separation of judicial power. That cognisance and vigilance is not limited to laws that involve some overt or "outright conscription"252 of the judiciary to do the work of the legislative or executive branches of government. The Court must be cognisant of, and vigilant to protect against, "the creeping normalisation of piecemeal borrowing of judicial services to do the work of the legislature or the executive" that gradually erodes judicial independence253. Lim It is the two key rationales – or constitutional values – that underpin and are protected by Ch III's strict separation of federal judicial power that are reflected in the principle articulated in Chu Kheng Lim v Minister for Immigration, 250 Benbrika (2021) 95 ALJR 166 at 189 [69]; see also 189 [73]; 388 ALR 1 at 24; see also 25. 251 Vella (2019) 269 CLR 219 at 276 [141]. See also Magaming (2013) 252 CLR 381 at 400-401 [63]-[67]; NAAJA (2015) 256 CLR 569 at 610-611 [94]-[97]; Benbrika (2021) 95 ALJR 166 at 188 [68], 202 [138]-[140]; 388 ALR 1 at 23, 41-42. See generally Stellios, "Liberty as a Constitutional Value: The Difficulty of Differing Conceptions of 'The Relationship of the Individual to the State'", in Dixon (ed), Australian Constitutional Values (2018) 177. 252 Vella (2019) 269 CLR 219 at 277 [145]. 253 Vella (2019) 269 CLR 219 at 277 there, Redish, "Separation of Powers, Judicial Authority, and the Scope of Article III: The Troubling Cases of Morrison and Mistretta" (1989) 39 DePaul Law Review 299 [145]; see also, quoted Local Government and Ethnic Affairs254. For present purposes, the central principle derived from Lim "is that involuntary detention in custody by the State is inherently penal or punitive in character, and thus cannot be imposed other than as an incident of adjudging and punishing criminal guilt unless one of the recognised exceptions applies; '[it] exists only as an incident of the exclusively judicial function of adjudging and punishing criminal guilt'"255. Where a law authorises detention in custody, the "default characterisation" is that the detention is penal or punitive256. What is punitive in nature about involuntary detention is the deprivation of liberty257. And it is the involuntary deprivation of liberty by itself that ordinarily constitutes punishment258. "Punishment is punishment, whether it is imposed in vindication or for remedial or coercive purposes. And there can be no doubt that imprisonment ... constitute[s] punishment"259. There are some exceptional cases where detention other than as punishment for breach of a law may be authorised, such as in the context of mental illness or trial for an offence260. to secure attendance at infectious disease, or 254 (1992) 176 CLR 1 at 27-29. See Benbrika (2021) 95 ALJR 166 at 201 [136], 202-203 [138]-[142]; 388 ALR 1 at 40, 41-42. 255 Benbrika (2021) 95 ALJR 166 at 201 [134]; 388 ALR 1 at 40, quoting Lim (1992) 176 CLR 1 at 27. See also Behrooz v Secretary, Department of Immigration and Multicultural and Indigenous Affairs (2004) 219 CLR 486 at 528 [121]; Re Woolley (2004) 225 CLR 1 at 12 [16]; Vasiljkovic v The Commonwealth (2006) 227 CLR 614 at 642 [84], 667 [180]; NAAJA (2015) 256 CLR 569 at 592-593 [37]; Plaintiff M68 (2016) 257 CLR 42 at 69-70 [40]; Falzon (2018) 262 CLR 333 at 341 [16]; Vella (2019) 269 CLR 219 at 280 [152]. 256 NAAJA (2015) 256 CLR 569 at 611 [98]. See also Falzon (2018) 262 CLR 333 at 342 [24]; Benbrika (2021) 95 ALJR 166 at 182-183 [40], 189 [73], 202 [140]; 388 ALR 1 at 16, 25, 41-42. 257 Behrooz (2004) 219 CLR 486 at 499 [20]. 258 Behrooz (2004) 219 CLR 486 at 499 [21]. 259 Witham v Holloway (1995) 183 CLR 525 at 534. See also Muldrock v The Queen (2011) 244 CLR 120 at 140 [57]. 260 Lim (1992) 176 CLR 1 at 28-29; Benbrika (2021) 95 ALJR 166 at 177 [18], 189-190 [73]-[75], 201 [135]; 388 ALR 1 at 9-10, 25-26, 40. Another exceptional category, reflected in the outcome in Lim261, is executive detention, pursuant to statutory power, of a person unlawfully in Australia, pending either expulsion from Australia or grant of permission to remain in Australia. It may be accepted that the exceptions do not fall within "precise and confined categories"262 and that the categories of exceptional cases are not closed263. Reflecting "both the strict separation of Commonwealth judicial power from executive and legislative power inherent in the text and structure of the Constitution and the values protected by that separation"264, exceptional cases aside, "the involuntary detention of a citizen in custody by the State is permissible only as a consequential step in the adjudication of criminal guilt of that citizen for past acts"265. That is a limitation on power inherent in the division of powers266. In Benbrika267, the plurality stated that "[i]t is the protective purpose that qualifies a power as an exception to a principle that is recognised under our system of government as a safeguard on liberty". But, consistently with Ch III of the Constitution, that any protective purpose, even when accompanied by a form of judicial process268, justifies the imposition of preventive detention as "exceptional". Nowhere in Lim was it suggested, expressly or that cannot mean 261 Lim (1992) 176 CLR 1 at 10, 32, 58, 71. See also Behrooz (2004) 219 CLR 486 at 499 [20]; Vasiljkovic (2006) 227 CLR 614 at 648 [108], 668 [183]; Benbrika (2021) 95 ALJR 166 at 189-190 [73]-[75]; 388 ALR 1 at 25-26. 262 Kruger v The Commonwealth (1997) 190 CLR 1 at 110; Vasiljkovic (2006) 227 CLR 614 at 631 [37]; Benbrika (2021) 95 ALJR 166 at 202 [140]; 388 ALR 1 at 42. 263 Benbrika (2021) 95 ALJR 166 at 190 [75]-[77], 202 [140]; 388 ALR 1 at 25-26, 41-42. See also Al-Kateb v Godwin (2004) 219 CLR 562 at 646 [251]; Vasiljkovic (2006) 227 CLR 614 at 648 [108]. 264 Benbrika (2021) 95 ALJR 166 at 201 [135]; 388 ALR 1 at 40. 265 Fardon (2004) 223 CLR 575 at 612 [80]. See also Vella (2019) 269 CLR 219 at 280 [152]; Benbrika (2021) 95 ALJR 166 at 179-180 [24]-[27], 189 [71], 201 [135]; 388 ALR 1 at 11-12, 25, 40. 266 Benbrika (2021) 95 ALJR 166 at 189 [71], 201-202 [137]-[140]; 388 ALR 1 at 25, 40-42. See also Foucha v Louisiana (1992) 504 US 71 at 82-83. 267 (2021) 95 ALJR 166 at 181 [36]; 388 ALR 1 at 14. 268 Totani (2010) 242 CLR 1 at 51 [78]; Vella (2019) 269 CLR 219 at 295 [201]. See also Kable (1996) 189 CLR 51 at 98, 106-108, 121-122, 131. cf Fardon (2004) 223 CLR 575 at 602 [44], 614 [90], 648 [198], 654 [216]-[217], 656 [220]. impliedly, that the exceptional category of cases where detention other than as punishment for breach of a law may be authorised extended generally to laws with a purpose of protecting the community from harm269. The imposition of punishment for criminal wrongdoing is and must be subject to clear limits that protect the liberty of the individual from the exercise of one of the most extreme forms of public power. Preventive detention has the same punitive consequences and effects on the liberty of the individual as detention in custody as punishment for criminal offending and yet it is too often sought to be justified "by no more than passing reference to a poorly articulated claim that the general public has a right to protection"270. Neither a legislative assertion of a preventive purpose, nor the fact that it may be possible to characterise a power as having a purpose of protecting the public, can alone be determinative of compatibility with Ch III of the Constitution271. The plurality in Benbrika should not be understood as denying the possibility that a law with a protective purpose may "pursue that purpose in a manner incompatible with the doctrine [of separation of judicial power]"272. If the position were otherwise, there would be no meaningful limit on the exercise of coercive powers by the State to restrict individual liberty in the name of protection; overreach would be inevitable. The "exception" would deprive Ch III, and the separation of powers, of content273. There must, therefore, be a principled limit on the extent to which a "protective" purpose can qualify a power to order detention in custody as an exception to the Lim principle274. Legislation that confers power to constrain liberty according to what someone might do in the future lies outside the "general rule" that the exercise of judicial power settles for the future "a question as to the existence of a right or obligation, so that an exercise of the power creates a new charter by reference to which that question is in future to be decided"275. And while 269 See also Dyer, "Minister for Home Affairs v Benbrika and the Capacity of Chapter III of the Commonwealth Constitution to Protect Prisoners' Rights" (2022) 45 University of New South Wales Law Journal 209 at 235-236. 270 Ashworth and Zedner, Preventive Justice (2014) at 146. 271 See Rich v Australian Securities and Investments Commission (2004) 220 CLR 129 at 146 [35]; see also Alexander v Minister for Home Affairs (2022) 96 ALJR 560 at 584-585 [106]; 401 ALR 438 at 463. 272 Alexander (2022) 96 ALJR 560 at 584-585 [106]; 401 ALR 438 at 463. 273 cf Benbrika (2021) 95 ALJR 166 at 210-211 [178]; 388 ALR 1 at 52. 274 cf Benbrika (2021) 95 ALJR 166 at 181 [36]; 388 ALR 1 at 14. 275 Vella (2019) 269 CLR 219 at 279 [151], quoting Tasmanian Breweries (1970) 123 CLR 361 at 374; see also 282 [158]. there might be strong policy reasons for courts to exercise such power276, "[w]here an exercise of a power conferred on a court settles no question as to the existence of any antecedent right or obligation yet results in an order imposing a new and enduring restriction on liberty, some special and compelling feature ought to be found to exist for its inclusion in the category of judicial power to be justified"277. Kable and the relevance of Ch III and the Lim principle The HRSO Act is State legislation. Its validity depends on limits on State legislative power and, in particular, the reach of the Kable principle278. Chapter III does not permit of "different grades or qualities of justice" as between Commonwealth and State courts279. State legislation which purports to confer upon a State court "a function which substantially impairs its institutional integrity, and which is therefore incompatible with its role as a repository of federal jurisdiction, is invalid"280. In assessing whether legislation substantially impairs the institutional integrity of a State court or courts, regard may be had to the effect of the legislation 276 See Vella (2019) 269 CLR 219 at 282 [158]. cf Grollo v Palmer (1995) 184 CLR 348 at 367; Thomas (2007) 233 CLR 307 at 329 [17]; Vella (2019) 269 CLR 219 at 277 Vella (2019) 269 CLR 219 at 287 [171], quoted in Benbrika (2021) 95 ALJR 166 at 205 [151]; 388 ALR 1 at 45. See also Tasmanian Breweries (1970) 123 CLR 361 at 278 Kable (1996) 189 CLR 51 at 96, 101-103, 114-119, 127-128, 138, 143. See also Fardon (2004) 223 CLR 575 at 591 [15]; Totani (2010) 242 CLR 1 at 47-48 [69], 81 [201]-[202], 83-84 [212]; Wainohu (2011) 243 CLR 181 at 208-209 [44]; Attorney-General (NT) v Emmerson (2014) 253 CLR 393 at 424 [40]; Kuczborski (2014) 254 CLR 51 at 72-73 [38], 98 [139]; NAAJA (2015) 256 CLR 569 at 593-595 [39]; Vella (2019) 269 CLR 219 at 245-246 [55], 274-275 [138]. 279 Kable (1996) 189 CLR 51 at 103; see also 115, 127-128; cf 82. See also Fardon (2004) 223 CLR 575 at 617 [101]; Wainohu (2011) 243 CLR 181 at 209-210 [45], 228-229 [105], 247 [171]; Condon v Pompano Pty Ltd (2013) 252 CLR 38 at 88-89 [123]; Vella (2019) 269 CLR 219 at 278 [147]; Benbrika (2021) 95 ALJR 166 at 178 [20]; 388 ALR 1 at 10. 280 Vella (2019) 269 CLR 219 at 275 [138], quoting Fardon (2004) 223 CLR 575 at on public confidence in the courts281 – institutions established for the administration of justice282, including criminal justice – and the defining characteristics of courts, including the reality and appearance of independence and impartiality283. There is no single comprehensive statement of the content to be given to the essential notion of repugnancy to, or incompatibility with, the institutional integrity of State courts284. It therefore would be futile to attempt to provide some all-embracing characterisation or taxonomy of the circumstances in which "a State law might be repugnant [to] or incompatible with the exercise of Commonwealth judicial power or the essential attributes of a State court, or what might undermine a court's institutional integrity"285. The Court, however, must be "attentive to creative [and incremental] ways in which State Parliaments might establish impermissible relationships between courts and the political arms of government"286. Otherwise, the Kable principle will be stripped of its content and impermissibly constrained in its application. The application of the Kable principle depends on underlying 281 Kable (1996) 189 CLR 51 at 98, 107-108, 116-118, 124, 133; Fardon (2004) 223 CLR 575 at 617-618 [102], 638 [166], 653 [213]; Totani (2010) 242 CLR 1 at 82 [206]; NAAJA (2015) 256 CLR 569 at 595 [40]; Vella (2019) 269 CLR 219 at 277 282 cf NAAJA (2015) 256 CLR 569 at 621 [134]. 283 See, eg, Forge v Australian Securities and Investments Commission (2006) 228 CLR 45 at 76 [63]-[64]; Gypsy Jokers Motorcycle Club Inc v Commissioner of Police (2008) 234 CLR 532 at 552-553 [10]; K-Generation Pty Ltd v Liquor Licensing Court (2009) 237 CLR 501 at 530 [89], 559 [204]; Wainohu (2011) 243 CLR 181 at 208 [44]; Pompano (2013) 252 CLR 38 at 71-72 [67]-[68], 89-90 [125], 105 [177], 110 [194]; Emmerson (2014) 253 CLR 393 at 426 [44]; NAAJA (2015) 256 CLR 569 at 594 [39], 618 [120]-[121]. 284 Fardon (2004) 223 CLR 575 at 618 [104]-[105]; K-Generation (2009) 237 CLR 501 at 530 [90]; Kuczborski (2014) 254 CLR 51 at 72-73 [38], 89 [103], 90 [106]. 285 Stellios, The Federal Judicature: Chapter III of the Constitution, 2nd ed (2020) 286 Stellios, The Federal Judicature: Chapter III of the Constitution, 2nd ed (2020) principle, not just on what form the laws in issue in previous cases took or what was said in those cases in the context of different legislative regimes287. The Lim principle (a principle developed in the context of the strict separation of Commonwealth judicial power from executive and legislative power) is not irrelevant to the assessment of whether State legislation is compatible with Ch III of the Constitution. There is no separation of powers at the State level288. The Kable principle is less strict than the limitations on Commonwealth legislative power derived from Ch III, in the sense that it protects the independence and institutional integrity of State courts, and that "the notions of repugnancy to and incompatibility with the continued institutional integrity of the State courts are not to be treated as if they simply reflect what Ch III requires in relation to the exercise of the judicial power of the Commonwealth"289. But the fact that the Kable principle has its roots in Ch III of the Constitution remains of fundamental importance290. Chapter III requires that the judicial power of the Commonwealth be invested only in institutions sufficiently distinct from other arms of government to answer the description of "courts"291. Fardon and Benbrika It is now established that assessments and predictions of risk to the community are not matters that are incapable of judicial evaluation292 and that 287 See Totani (2010) 242 CLR 1 at 83-84 [212]; Pompano (2013) 252 CLR 38 at 94 [137]; Kuczborski (2014) 254 CLR 51 at 90 [106]; Vella (2019) 269 CLR 219 at 277-278 [146], 292 [188]; Benbrika (2021) 95 ALJR 166 at 205 [152]; 388 ALR 1 288 Kable (1996) 189 CLR 51 at 66-67, 78, 103-104, 109, 137, 142; Fardon (2004) 223 CLR 575 at 614 [86]; Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 573 [69]; Pompano (2013) 252 CLR 38 at 89-90 [124]-[125]; Pollentine (2014) 253 CLR 629 at 649 [42]; Burns v Corbett (2018) 265 CLR 304 at 386 [183]; Benbrika (2021) 95 ALJR 166 at 201 [137]; 388 ALR 1 at 40. 289 Pollentine (2014) 253 CLR 629 at 649 [42], quoting Pompano (2013) 252 CLR 38 at 90 [125]. See also Kable (1996) 189 CLR 51 at 104; Baker v The Queen (2004) 223 CLR 513 at 534 [51]; Benbrika (2021) 95 ALJR 166 at 201 [137]; 388 ALR 1 290 Totani (2010) 242 CLR 1 at 83-84 [212]; Vella (2019) 269 CLR 219 at 275 [140]. 291 Vella (2019) 269 CLR 219 at 275 [140], 277-278 [146]. 292 See Fardon (2004) 223 CLR 575 at 589-590 [12], 593 [22], 597 [34], 616-617 [97]-[98], 657 [225]-[226]; Thomas (2007) 233 CLR 307 at 330-331 [19], 333-334 "[d]ispensation of 'preventive justice' ... is not inherently incompatible with judicial power"293. And, most relevantly for present purposes, as Fardon v Attorney-General (Qld)294 and Benbrika295 demonstrate, post-sentence preventive detention regimes are not, in all circumstances, contrary to Ch III of the Constitution. Neither case was challenged by the appellant, Mr Garlett. But neither Fardon296 nor Benbrika297 is determinative of the validity of the HRSO Act. "[T]he constitutional validity of one law cannot be decided simply by taking what has been said in earlier decisions of the Court about the validity of other laws and assuming, without examination, that what is said in the earlier decisions can be applied to the legislation now under consideration"298. The Court must be wary of "domino" reasoning; "[i]t is a mistake to take what was said in other cases about other legislation and apply those statements without close attention to the principle at stake"299. The majority in Fardon300 decided that a State law could validly authorise post-sentence detention of a person serving a period of imprisonment for a "serious sexual offence"301 who posed a serious danger to the community because there was an unacceptable risk that the person would commit a further "serious sexual offence" if released from custody, and that the judiciary could determine, pursuant to a judicial process, whether an offender was to be subject to [27]-[28], 347-348 [78]-[79], 355 [109]. See also Pompano (2013) 252 CLR 38 at 293 Vella (2019) 269 CLR 219 at 279 [149]. 294 (2004) 223 CLR 575. 295 (2021) 95 ALJR 166; 388 ALR 1. 296 (2004) 223 CLR 575. 297 (2021) 95 ALJR 166; 388 ALR 1. 298 Pompano (2013) 252 CLR 38 at 94 [137]. 299 Vella (2019) 269 CLR 219 at 292 [188]; see also 277-278 [146]; Benbrika (2021) 95 ALJR 166 at 205 [152]; 388 ALR 1 at 45-46. 300 (2004) 223 CLR 575 at 593 [24], 601-602 [43]-[44], 619-622 [106]-[120], 301 "[S]erious sexual offence" was defined as an offence of a sexual nature involving violence or against children: see Fardon (2004) 223 CLR 575 at 604 [51]. that regime. The majority in Benbrika302 decided that a Commonwealth law could validly authorise post-sentence detention of a person who was serving a sentence of imprisonment for certain terrorism offences303 who posed an unacceptable risk of committing a terrorist offence if released from custody, and that the judiciary could determine, by orthodox judicial process, whether an offender was to be subject to that regime. Both Fardon304 and Benbrika305 concerned legislative regimes which depended on close identification between past offending (serious sexual offences or terrorism offences) and possible future offending (serious sexual offences or terrorism offences). Each applied only to a narrow class of offenders. In Benbrika306 the Court divided over how close the nexus between the past and possible future offending must be. The minority view was that only some future terrorism offences could justify a post-sentence preventive detention order307. The post-sentence preventive detention regimes upheld in Fardon308 and Benbrika309 should be seen as exceptional and as depending on the nature and character of the past offending for which the persons subject to preventive detention were detained in custody and on the nature and character of the possible future offending sought to be prevented by subjecting those persons to continuing detention. "Sexual offences are almost universally given special significance" in criminal justice systems310. Repeated serious sexual offending is often driven by 302 (2021) 95 ALJR 166 at 172-173 [2], 185 [48], 227 [239]; 388 ALR 1 at 3, 19, 74. 303 The specified terrorism offences were defined as "serious Pt 5.3 offences": see Benbrika (2021) 95 ALJR 166 at 174 [8], 183-184 [44]; 388 ALR 1 at 5, 17-18. 304 (2004) 223 CLR 575. 305 (2021) 95 ALJR 166; 388 ALR 1. 306 (2021) 95 ALJR 166; 388 ALR 1. 307 Benbrika (2021) 95 ALJR 166 at 187 [64], 193-194 [93], [97], 195 [100]-[101], 209 [168]-[170], 210 [175]; see also 210 [177]; 388 ALR 1 at 22, 30, 31, 32, 50-51, 51-52; see also 52. 308 (2004) 223 CLR 575. 309 (2021) 95 ALJR 166; 388 ALR 1. 310 Floud and Young, Dangerousness and Criminal Justice (1981) at 50. psychological factors and disordered sexual attitudes311 – some, perhaps many, paedophiles will never change312. reference Terrorism offences to motive – are defined by religious, political or ideological – and those motives may never change. "[A] special sort of moral outrage should be reserved for terrorist crimes, as distinguished from other homicides or acts of destruction ... [W]e put definitional pressure on our ability to articulate this sense that special outrage is appropriate for these offences"313. Terrorism offences "address the combination of violent destruction and political or ideological motivation which is unique to terrorism but which is largely absent from other crimes. The underlying motivation of terrorism provides a compelling, nihilistic drive to terrorists that often trumps their value of the perpetrators' own lives. It would be short-sighted to divorce these motivational contexts from the crimes themselves when they directly inform the 311 See Guttmacher and Weihofen, Psychiatry and The Law (1952) at 110, 113; Zedner, "Sexual Offences", in Stockdale and Casale (eds), Criminal Justice Under Stress (1992) 265 at 274-283; Gunn and Taylor (eds), Forensic Psychiatry: Clinical, Legal and Ethical Issues (1993) at 323, 567; Beckett, "Assessment of Sex Offenders", in Morrison, Erooga and Beckett (eds), Sexual Offending Against Children: Assessment and Treatment of Male Abusers Commonwealth, Royal Commission into Institutional Responses to Child Sexual Abuse: Final Report (2017), vol 2 at 138, 206 fn 20. See also Fardon (2004) 223 CLR 575 at 588 [9], quoting Veen v The Queen [No 2] (1988) 164 CLR 465 at 495; Kansas v Crane (2002) 534 US 407 at 413, 415. 312 "Paedophilia or paedophilic disorder is a psychiatric diagnosis which indicates a sustained sexual preference towards prepubescent children": Commonwealth, Royal Commission into Institutional Responses to Child Sexual Abuse: Final Report (2017), vol 2 at 206 fn 20. See also Guttmacher and Weihofen, Psychiatry and The Law (1952) at 115; Glaser, "Paedophilia: The Public Health Problem of the Decade", in James (ed), Paedophilia: Policy and Prevention (1997) 4 at 6; Kansas (2002) 534 US 407 at 414. 313 Ashworth and Zedner, Preventive Justice (2014) at 179, quoting Waldron, Torture, Terror, and Trade-Offs: Philosophy for the White House (2010) at 49. gravity of the conduct"314. As the plurality in Benbrika315 put it, "[t]errorism poses a singular threat to civil society" (emphasis added). HRSO Act, in its operation to robbery, is contrary to Ch III The HRSO Act is different. Four features of the HRSO Act are significant. First, there is a broad category of offences and conduct that may engage the coercive preventive justice regime under the HRSO Act. What constitutes a "serious offence"316 and, correspondingly, the conduct captured by the definition of "serious offence" is very broad317. Second, "[t]he nature and extent of the harm that may be caused to persons or property by commission of a ['serious offence'] will vary widely"318. The harm sought to be protected against is not "grave and specific"319. Third, there is no correlation required by the HRSO Act between the nature or character of the prior offending that a person is serving a sentence of imprisonment for and the nature or character of the offence that a person is found to be at risk of committing and that a restriction order is designed to protect against, save that the offending conduct must have been identified by the Parliament of Western Australia as falling within the definition of "serious offence"320. Fourth, the requirements to obtain and consider reports prepared by a psychiatrist and a psychologist apply in all circumstances321, even if there is no reason to think 314 Ruddock, "Law as a Preventative Weapon Against Terrorism", in Lynch, MacDonald and Williams (eds), Law and Liberty in the War on Terror (2007) 3 at 5. See also Conte, Human Rights in the Prevention and Punishment of Terrorism – Commonwealth Approaches: The United Kingdom, Canada, Australia and New Zealand (2010) at 9-11. 315 (2021) 95 ALJR 166 at 181 [36]; 388 ALR 1 at 14. 316 HRSO Act, s 5; see also Sch 1, Divs 1 and 2. 317 cf Vella (2019) 269 CLR 219 at 294 [197]; Benbrika (2021) 95 ALJR 166 at 206 [157]; 388 ALR 1 at 47. 318 cf Benbrika (2021) 95 ALJR 166 at 209 [168]; 388 ALR 1 at 50. 319 cf Benbrika (2021) 95 ALJR 166 at 191 [79]; 388 ALR 1 at 27. See also Fardon (2004) 223 CLR 575 at 588 [9], quoting Veen (1988) 164 CLR 465 at 495. 320 See HRSO Act, ss 3 definitions of "offender" and "serious offender under custodial sentence", 7(1), 7(3)(c)-(d), 7(3)(g)-(i). cf Fardon (2004) 223 CLR 575 at 619 [108]. 321 HRSO Act, ss 7(3)(a), 46(2)(a), 74. cf Fardon (2004) 223 CLR 575 at 656 [222]; Benbrika (2021) 95 ALJR 166 at 174 [9]; 388 ALR 1 at 5. that psychiatric or psychological factors played any part in the offender's prior offending. The HRSO Act goes beyond the exceptional. It can be engaged in respect of any of numerous so-called "serious offences". Not only that, but the future conduct to be considered is equally broad and, in the case of robbery, is not so exceptional as to warrant such a scheme. The judiciary is left to perform the executive function of preventing a wide range of crimes one offender at a time. And it is required to do that without identifying any underlying justification of the kind that might be identified with respect to sexual offending or terrorism – factors peculiar to the psychology of sexual offenders or the motives of terrorism offenders are wholly absent. The potential expansion of preventive detention to address all manner and kinds of criminal offending is by no means far-fetched – it is not an extreme or distorting possibility322. Nor is the problem new. An example from the United Kingdom (albeit in the context of sentencing offenders, rather than post-sentence preventive detention323) well illustrates the point. Section 10 of the Prevention of Crime Act 1908 (UK) provided for a court to order preventive detention of "habitual criminal[s]". Where the court passed a sentence of penal servitude and was of the opinion that by reason of the offender's "criminal habits and mode of life" it was "expedient for the protection of the public that the offender should be kept in detention for a lengthened period of years", the court could pass a further sentence of preventive detention. A report of an Advisory Council on the Treatment of Offenders in the United Kingdom stated that "[b]etween 1908 and 1911 it had become apparent that the police, in presenting cases to the Director of Public Prosecutions for indictment as habitual criminals, were applying widely varying standards and were presenting offenders for whom preventive detention had not been intended"324. A 1911 memorandum by the Home Secretary recorded that the Prevention of Crime Act 322 cf Western Australia v The Commonwealth (1975) 134 CLR 201 at 275; Kartinyeri v The Commonwealth (1998) 195 CLR 337 at 380-381 [88]; Egan v Willis (1998) 195 CLR 424 at 505 [160]; Singh v The Commonwealth (2004) 222 CLR 322 at 384 [155], see also 418 [268]-[269]; XYZ v The Commonwealth (2006) 227 CLR 532 at 323 See Fardon (2004) 223 CLR 575 at 613 [83]. 324 United Kingdom, Home Office, Preventive Detention: Report of the Advisory Council on the Treatment of Offenders (1963) at 1 [8]. was intended to deal with "the persistent dangerous criminal" and not with persons who were "a nuisance rather than a danger to society"325. The Advisory Council relevantly observed that, after a new provision dealing with preventive detention was enacted in the Criminal Justice Act 1948 (UK)326 several decades later, "[i]t [was] clear ... that preventive detention [had] not infrequently been imposed for relatively minor offences", including where the value of the property concerned was £10 or less327. The Advisory Council acknowledged that it was, to some extent, borne out that under the Criminal Justice Act it remained the "nuisances" rather than the dangerous criminals who had been the recipients of preventive detention328. The Advisory Council also referred to research that had "shown conclusively that the majority of preventive detainees [were] of the passive-inadequate type, feckless and ineffective in every sphere, who regard the commission of crime as a means of escaping immediate difficulties rather than a part of a deliberately anti-social way of life. Very few of them [were] of the seriously violent or aggressive type of personality"329. They added that it must, however, be recognised that "the community ought to be protected ... both from the dangerous criminals ... and from the more numerous offenders who practise thefts or frauds on victims who may be severely afflicted by the loss of a small sum or seriously distressed by what may rank as very minor housebreakings"330 (emphasis added). Put simply, as that historical experience suggests, "[i]mprisonment to protect society from predicted but unconsummated offences is ... fraught with danger of excesses and injustice"331. 325 See United Kingdom, Home Office, Preventive Detention: Report of the Advisory Council on the Treatment of Offenders (1963) at 1 [8]. 326 See Criminal Justice Act 1948 (UK), s 21. 327 United Kingdom, Home Office, Preventive Detention: Report of the Advisory Council on the Treatment of Offenders (1963) at 5 [17]. 328 United Kingdom, Home Office, Preventive Detention: Report of the Advisory Council on the Treatment of Offenders (1963) at 7-8 [21]. 329 United Kingdom, Home Office, Preventive Detention: Report of the Advisory Council on the Treatment of Offenders (1963) at 8 [21]. 330 United Kingdom, Home Office, Preventive Detention: Report of the Advisory Council on the Treatment of Offenders (1963) at 8 [21]. 331 Williamson v United States (1950) 184 F 2d 280 at 282. "The premise which underpins making any conduct a crime is that its commission works some harm to society"332 and, as explained, detaining a person in custody will always prevent that person from committing a crime that they would commit if released from custody. If it is permissible, consistently with Ch III, for preventive detention to be ordered to protect against an unacceptable risk that a person convicted of a "serious offence" (whether robbery or another "serious offence") in the past will commit a robbery in the future or that a person convicted of robbery in the past will commit a "serious offence" in the future (whether robbery or another "serious offence"), then what is the basis for a limitation on State legislatures extending preventive detention to any offence that involves harm or a threat of harm to a person? And where does it stop? What is the outer limit? It is difficult to see why preventive detention could not be ordered in respect of a range of property offences – for example, "theft" not in the presence of any victim and unaccompanied by any threat or act of violence or fraud. Indeed, the Solicitor-General for Western Australia frankly acknowledged during oral argument that, on the submissions of the Attorney-General for Western Australia, "as a matter of principle", there was "probably not" any offence in the Criminal Code (WA) that could not be the subject of the preventive detention regime under the HRSO Act. That cannot be accepted. Speaking of the HRSO Act as "protective" presents a question, not the answer. How is it protective? Is it protective in a way in which the judicial branch should and can be involved? The answer is "no". It is "no" because the HRSO Act seeks to protect against recidivism in relation to a broad range of offences. Under the HRSO Act, "preventive justice" is punishment on the basis of a risk of recidivism or tendency to commit crime; preventive detention is being used "to deal with the problem of the persistent offender"333. It may be that factors such as drug and alcohol abuse commonly contribute to certain types of repeat offending behaviour which the HRSO Act regime seeks to protect the community from; but that is hardly exceptional. The preventive detention regime under the HRSO Act applies to an extraordinarily large class of potential offenders; not to "a small number of unfortunate individuals who suffer disorders which make them to others"334. Not all recidivist offenders are "disorder[ed]" dangerous individuals of the kind described by Gleeson CJ in Fardon335. 332 Benbrika (2021) 95 ALJR 166 at 209 [167]; 388 ALR 1 at 50. 333 cf United Kingdom, Home Office, Preventive Detention: Report of the Advisory Council on the Treatment of Offenders (1963) at 1 [7]. 334 cf Fardon (2004) 223 CLR 575 at 592 [20]. 335 (2004) 223 CLR 575 at 592 [20]. Loss of liberty as a punishment is ordinarily one of the hallmarks reserved to criminal proceedings conducted in courts, with the protections and assurances that criminal proceedings provide336. Those assurances include that in the trial of an individual for an offence at the instigation of the Executive, "[t]he judiciary is called on ... to hear and authoritatively determine a controversy about an existing liability of the individual which is claimed by the executive to arise solely from the law on some past event or conduct"337 operation of some positive (emphasis added). The normalisation of judicial preventive detention orders means that "the distinctive character of the judiciary as the constitutional arbiter of disputes about rights between the citizen and the State will become increasingly less distinct. Incrementally but inexorably the judiciary will be drawn ever more deeply into a process in which institutional boundaries are blurred and by which its institutional independence is diminished"338. That cannot be permitted because it is corrosive to – it erodes – the core constitutional values underpinning and protected by Ch III of the Constitution: the judicial protection of liberty and the protection of the independence and impartiality of the judiciary. That is not a concern limited to the exercise of Commonwealth judicial power; those values must be protected to ensure that State courts are suitable repositories of federal jurisdiction. Chapter III does not permit of different grades or qualities of justice339, and that is especially so where the justice fundamentally affects the liberty of the individual. Indeed, it would be remiss not to acknowledge that the Justices in the majority in Kable were themselves plainly cognisant of the risks posed by State courts imposing post-sentence preventive detention divorced from the function of adjudging and punishing criminal guilt340. The Court must remain vigilant to prevent those risks 336 Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 216 CLR 161 at 179 [56]. See also Fardon (2004) 223 CLR 575 at 612 [79]. 337 Benbrika (2021) 95 ALJR 166 at 188 [69]; 388 ALR 1 at 24. 338 Vella (2019) 269 CLR 219 at 290-291 [180]. See also Stellios, The Federal Judicature: Chapter III of the Constitution, 2nd ed (2020) at 574; Benbrika (2021) 95 ALJR 166 at 194 [97]; 388 ALR 1 at 31. 339 Kable (1996) 189 CLR 51 at 103; see also 115, 127-128; cf 82. See also Fardon (2004) 223 CLR 575 at 617 [101]; Wainohu (2011) 243 CLR 181 at 209 [45], 228-229 [105], 247 [171]; Pompano (2013) 252 CLR 38 at 89 [123]; Vella (2019) 269 CLR 219 at 278 [147]; Benbrika (2021) 95 ALJR 166 at 178 [20]; 388 ALR 1 340 See Kable (1996) 189 CLR 51 at 96-98, 106-107, 121-122, 131-134. See also Dyer, "Minister for Home Affairs v Benbrika and the Capacity of Chapter III of the from materialising, whether they are "dramatic and obvious" or "small and incremental"341. In its operation with respect to robbery, the HRSO Act undermines the two key rationales – or constitutional values – that underpin Ch III's strict separation of federal judicial power. The HRSO Act seeks to normalise preventive detention in the custody of the State, something that must, under our constitutional system, be "exceptional". It opens the door to a general practice of preventive detention – a parallel system of "preventive justice", administered by courts that are repositories of federal jurisdiction – divorced from the administration of the criminal law, where the judiciary is the key player authorising the detention of individuals in custody by the Executive because they are "criminal types". Here, the "criminal type" was a man – Mr Garlett – who, prior to being incarcerated in November 2017, was convicted of his first offences as an adult (then aged 23) for committing burglary and robbery when he entered a home without the occupants' consent and stole, with threats of violence, $20 and a pendant necklace whilst in the presence of others, including his sister, and pretending to be armed with a handgun342. That is not exceptional. In its operation with respect to robbery, the preventive detention regime authorised by the HRSO Act simply comes at too great a cost to the constitutional framework required by the separation of powers and the core values protected by that framework. The fact that, in a particular case, the Supreme Court might decide that a particular offender does not present an "unacceptable" risk of committing a serious offence or that it is not "necessary", in a particular case, to make a restriction order to adequately protect the community from an unacceptable risk, does not address or overcome the issues of principle identified above. And the conclusion that the HRSO Act in its operation with respect to robbery is invalid can, and should, be made now; it does not depend on the objective seriousness of the robbery offences in relation to which continuing detention orders are, in fact, made in future under the HRSO Act. Conclusions and orders For those reasons, the appeal should be allowed with costs. Paragraph (a) of the declaration made by the Supreme Court of Western Australia on 12 November 2021 should be set aside and, in its place, it should be declared that Commonwealth Constitution to Protect Prisoners' Rights" (2022) 45 University of New South Wales Law Journal 209 at 223-224. 341 cf New South Wales v The Commonwealth (2006) 229 CLR 1 at 328 [787]. 342 Western Australia v Garlett [2019] WASCSR 74 at [4], [12], [50]. the HRSO Act is invalid insofar as it operates in respect of item 34 of Subdiv 3 in Div 1 in Sch 1 to the HRSO Act. Edelman Introduction Notwithstanding the views of many philosophers about free will, a fundamental premise of the criminal law is that individuals have free will. An offence is generally the result of a chosen act. One of the most serious responses of the criminal law is to punish that act, and the individual choice, with imprisonment. But for many years parliaments have also permitted people to be imprisoned, by "continuing detention orders", for choices that they have not yet made, and offences that they have not yet committed. The logic of such "punitive-preventive"343 orders – protective punishment – "applies without respect for whether the subject is a responsible agent or not"344. Despite the individual injustice of such imprisonment, this Court has upheld the constitutional validity of regimes of continuing detention orders for anticipated serious sexual offences345 and for anticipated terrorism-related offences346. This appeal presents the same issue in relation to continuing detention orders made by the Supreme Court of Western Australia under the High Risk Serious Offenders Act 2020 (WA) ("HRSO Act") for anticipated robberies. The HRSO Act authorises the indefinite imprisonment of an offender after completion of their sentence based upon an apprehension that they might commit any of a wide range of offences in the future, with maximum penalties ranging from as low as 12 months' imprisonment when tried summarily347. The HRSO Act could potentially lead to the imprisonment of one seventh of the entire prison population of Western Australia for offences that they have not committed348. But this appeal is concerned only with the validity of such continuing detention orders in their application to the offence of robbery. It is common ground that the HRSO Act will be entirely invalid in its application to robbery if the legislative provisions 343 Ashworth and Zedner, Preventive Justice (2014) at 16. 344 Ashworth and Zedner, Preventive Justice (2014) at 19. See Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 222 [222]; 388 ALR 1 at 67-68. 345 Fardon v Attorney-General (Qld) (2004) 223 CLR 575. 346 Minister for Home Affairs v Benbrika (2021) 95 ALJR 166; 388 ALR 1. 347 See, eg, HRSO Act, Sch 1, Div 1, Subdiv 3, Item 32 read with Criminal Code (WA), s 338E(2). 348 Western Australia, Legislative Assembly, Parliamentary Debates (Hansard), 8 August 2019 at 5250. Edelman concerning continuing detention orders in respect of robbery are beyond the power of the Parliament of Western Australia. It would be a basic error for this Court to conclude that there could never be any circumstances of robbery which are equivalent to the offences in the regimes that have been upheld, especially since the violence element of a serious robbery offence could itself be conduct that amounts to a serious sexual offence. Principle and respect for precedent require that the HRSO Act be recognised as consistent with the Constitution unless there are specific features of the Act in its legal or practical operation, including in relation to robberies that are objectively less serious than offences in regimes that have been upheld, that create such individual injustice as to unjustifiably compromise the institutional integrity of a court. On the material before this Court and the proper, albeit narrow, interpretation of the HRSO Act, the limit of injustice has not been reached in the application of the HRSO Act to robbery, although it is perilously close. If I had not been satisfied that the HRSO Act, in its legal operation and (so far as can be considered on the material in this case) its practical operation, makes continuing detention orders for robbery an order of last resort in cases of the most serious robberies, then I would have concluded that the HRSO Act was invalid in its application to robbery. But on the proper interpretation of the HRSO Act and on the material before this Court, the circumstances in which the legal and practical operation of the HRSO Act permit a continuing detention order for robbery are justified and cannot be meaningfully distinguished from those circumstances related to the many serious sexual offences and terrorism-related offences for which this Court has upheld continuing detention orders. Mr Garlett In October 2021, Mr Garlett was due to be released from prison. He had been imprisoned for his first adult offences, involving robbery of a pendant necklace and $20 cash whilst pretending to be armed and in the company of his sister and others349. But he was not released. Instead, he was detained in prison following the preliminary hearing of an application under the HRSO Act because, in light of a childhood history of burglaries and robberies, it was thought that there were "reasonable grounds for believing" that he might commit another robbery in the future350. Ultimately, however, Mr Garlett was not made the subject of any 349 Western Australia v Garlett (2021) 362 FLR 284 at 287-288 [1]-[4], 342 [232]. 350 Western Australia v Garlett (2021) 362 FLR 284 at 345 [248]-[249], 347 [259], [263]; HRSO Act, s 46(2)(c)(i). Edelman restriction order. But how did such a possibility arise, and is the HRSO Act invalid on its proper interpretation in its application to robbery? Repeated experiments with models of unjust punishment In its generalised application to a wide range of offences, Western Australia's approach is recent but not novel. As explained in Vella v Commissioner of Police (NSW)351, historically English courts recognised a general power of preventive detention by orders binding over a person, subject to a pledge of money, if there was sufficient apprehension that the person's activities could breach the peace. And the Court of Chancery granted writs of supplicavit to take a person into custody to restrain anticipated breaches of the peace but "the severity of the apprehended harm that might attract Chancery's intervention increased over time"352. The foundational legislative innovation came in the Habitual Criminals Act 1869353. That legislation imposed sweeping changes to respond to the problem of recidivist criminals, including introducing post-sentence police supervision and imprisonment of those offenders who, after release on licence, were reasonably believed by a magistrate to be "getting a livelihood by dishonest means"354. "Serious deficiencies in the legislation soon appeared"355. Following various attempts356, the United Kingdom Parliament settled upon the model in the Prevention of Crime Act 1908 (UK)357, which empowered courts to impose a sentence of preventive detention in addition to a sentence of imprisonment for an offender found to be a "habitual criminal". The Prevention of Crime Act was repealed in 1948358. In the second reading speech of the repealing Bill, the Secretary of State for the Home Department said 351 (2019) 269 CLR 219. 352 (2019) 269 CLR 219 at 236-237 [29]. 353 32 & 33 Vict c 99. See also Vella v Commissioner of Police (NSW) (2019) 269 CLR 354 Habitual Criminals Act 1869 (32 & 33 Vict c 99), ss 3, 8. 355 Radzinowicz and Hood, A History of English Criminal Law and its Administration from 1750 (1986), vol 5 at 255. 356 Including the Prevention of Crimes Act 1871 (34 & 35 Vict c 112). 357 See s 10. 358 Criminal Justice Act 1948 (UK), s 83(3), Sch 10. Edelman that preventive detention had "failed to achieve any substantial results" and that "[j]udges and juries have hesitated to make use of a procedure that looked, at any rate, as if it involved a double sentence"359. Nevertheless, the Criminal Justice Act 1948 (UK) implemented another version of preventive detention which included, in part, "training of a corrective character" during the detention360. The 1948 regime remained the subject of criticism. The 1963 Report of the Advisory Council on the Treatment of Offenders concluded that "if preventive detention were abolished and nothing were put in its place the general deterrent effect of the penal system would not be weakened to any significant extent" and, in view of "all the disadvantages of the preventive detention system", proposed that the regime be abolished in its entirety361. The regime was abolished in 1967 and replaced with a new scheme that included extended sentences for offences362. In the course of the debate and second reading speeches in the House of Commons and House of Lords, the abolished 1948 regime was described as involving "not very useful rigidity of categorisation in our prison system"363 and as "harsh, unjust, oppressive and totally ineffective"364. Its abolition was said to be "long overdue"365 and made "at long last"366. In 1991367, the "unpopular friend" of the extended 359 United Kingdom, House of Commons, Parliamentary Debates, 29 November 1938, vol 342, col 278. 360 Criminal Justice Act 1948 (UK), s 21. 361 United Kingdom, Home Office, Preventive Detention: Report of the Advisory Council on the Treatment of Offenders (1963) at 23 [58]. 362 Criminal Justice Act 1967 (UK), ss 37, 103(2), Sch 7; Powers of Criminal Courts Act 1973 (UK), ss 28, 56(2), Sch 6. 363 United Kingdom, House of Commons, Parliamentary Debates, 12 December 1966, vol 738, col 64. 364 United Kingdom, House of Commons, Parliamentary Debates, 12 December 1966, vol 738, col 121. 365 United Kingdom, House of Lords, Parliamentary Debates, 10 May 1967, vol 282, col 1434. 366 United Kingdom, House of Lords, Parliamentary Debates, 10 May 1967, vol 282, col 1446. 367 Criminal Justice Act 1991 (UK), s 101(2), Sch 13. Edelman sentence was (temporarily368) "laid to rest" by provisions requiring people "to be sentenced for what they have done, not for what it is feared that they may do"369. Nevertheless, and yet again, preventive detention was reintroduced by the Criminal Justice Act 2003 (UK). Section 225 required the court to impose a sentence of imprisonment for public protection on a person convicted of a "serious offence" and not sentenced to life imprisonment, where it was "of the opinion that there is a significant risk to members of the public of serious harm occasioned by the commission by him of further specified offences". A serious offence was one of 65 specified violent offences and 88 specified sexual offences370. The sentence of imprisonment for public protection was, again, one of the most widely criticised of all categories of sentence in the United Kingdom371. At the time that the sentence was introduced, it was estimated that there would be around 900 prisoners serving sentences of imprisonment for public protection372. By November 2011, there were 6,500 such prisoners373. The rigidity of the regime was diluted in 2008, including with the introduction of judicial discretion374. It was 368 Crime and Disorder Act 1998 (UK), ss 58-60. 369 United Kingdom, House of Commons, Parliamentary Debates, 20 November 1990, vol 181, col 171. 370 Criminal Justice Act 2003 (UK), s 224, Sch 15. 371 Bettinson and Dingwall, Challenging the Ongoing Injustice of Imprisonment for Public Protection: James, Wells and Lee v The United Kingdom (2013) 76 Modern Law Review 1094 at 1094. 372 United Kingdom, House of Commons Standing Committee B, 23rd sitting, 11 February 2003, col 917. 373 United Kingdom, House of Lords, Parliamentary Debates, 21 November 2011, vol 732, col 825. 374 See Criminal Justice and Immigration Act 2008 (UK), s 13. Edelman abolished altogether "discredited"376, "poorly understood"377, and "something of a lottery"378. in 2012375 after being described in Parliament as Concurrently with these failed experiments in preventive detention in the United Kingdom, Australian parliaments introduced preventive regimes involving detention or other restrictions on liberty. As was recognised in Vella379, the Australian regimes were in areas concerning domestic and personal violence, problem gambling that was ancillary to domestic violence, public safety and breaches of the peace, sexual and other dangerous offenders, groups associated with criminal activity, and terrorism. One early regime was the Habitual Criminals Act 1905 (NSW)380, which had itself been considered a "useful precedent" for the Prevention of Crime Act 1908 (UK)381. Two relevant features of the Habitual Criminals Act for the offence of robbery were that an order for preventive imprisonment could only be made if (i) the offender had previously been convicted of robbery on three occasions and (ii) a judge exercised their discretion to declare that the offender was a habitual criminal382. There was a further discretion for the Governor to direct the release of an offender who was "sufficiently reformed, or for other good cause"383. The interpretation and operation of the HRSO Act An essential preliminary to any assessment of the constitutional validity of the HRSO Act is the interpretation of the Act. That interpretation can be set out in 375 Legal Aid, Sentencing and Punishment of Offenders Act 2012 (UK), s 123. 376 United Kingdom, House of Commons, Parliamentary Debates, 29 June 2011, vol 530, col 989. 377 United Kingdom, House of Lords, Parliamentary Debates, 21 November 2011, vol 732, col 825. 378 United Kingdom, House of Commons, Parliamentary Debates, 1 November 2011, vol 534, col 787. 379 (2019) 269 CLR 219 at 237-238 [31]. 380 Replaced by the Habitual Criminals Act 1957 (NSW). 381 Radzinowicz and Hood, A History of English Criminal Law and its Administration from 1750 (1986), vol 5 at 273. 382 Habitual Criminals Act 1905 (NSW), s 3(b), read with the Schedule. 383 Habitual Criminals Act 1905 (NSW), s 7. Edelman a staged approach in the same manner as Vella384. The interpretation which follows involves a strict and narrow interpretation of the HRSO Act. It focuses upon the provisions central to the subject of the challenge on this appeal – continuing detention orders – although it is necessary to emphasise that the discretion to make an interim detention order under s 46(2)(c) should only ever be exercised when there are reasonable prospects of a continuing detention order being made and, even then, only as a matter of last resort. Although I consider the narrow interpretation below to be the proper interpretation of the HRSO Act, if there were any doubt about any significant aspect of this interpretation then s 7 of the Interpretation Act 1984 (WA) would require that narrow interpretation to ensure that its application to robbery did not exceed legislative power. First, ss 34 and 35 allow the State of Western Australia to apply for a "restriction order" in relation to an offender, requiring the Court to make a finding as to whether the offender is a "high risk serious offender". Since the Court must assess the risk that the offender will commit "a serious offence", the application must specify the serious offence within Sch 1 to the HRSO Act which the State alleges there is an unacceptable risk that the offender will commit385. Secondly, by ss 7(1) and 7(2), the Court is required to assess the level of risk that the offender will commit the specified serious offence. Before a restriction order must be made, ss 7(1) and 7(2) require the State to prove that there is "an unacceptable risk that the offender will commit a serious offence". The open-textured criterion of "unacceptable", similar to criteria such as "oppressive", "unreasonable", or "unjust"386, is so closely associated with notions of the "adequate" protection of the community and the "necessity" of the restriction order that it is best addressed at the third stage. The second stage can therefore be limited to an assessment of the level of risk that the offender will commit the specified serious offence. In assessing the level of risk that the offender will commit the specified serious offence, the Court may receive, under s 84(5), an offender's antecedents or criminal record, and anything relevant in the official transcript of a proceeding against the offender. The context of s 84(5), including the requirement in s 7(3)(g) 384 (2019) 269 CLR 219 at 240-245 [39]-[54]. 385 See Bell v Tasmania (2021) 96 ALJR 22 at 41 [100]; 395 ALR 589 at 613. 386 Vella v Commissioner of Police (NSW) (2019) 269 CLR 219 at 249 [62]. Edelman to consider an offender's antecedents and criminal record, demonstrates an intention that such tender will rarely be refused by the Court387. Section 84(5) is not, however, a free licence for the Court to draw conclusions about the risk of the specified serious offence from unrelated offending. The offending upon which the Court can place any weight must be relevant to establishing a pattern of behaviour, or a propensity, sufficiently proximate in time, showing a likelihood that the offender will commit the specified serious offence388. Before concluding that there is any real risk that the offender will commit the specified serious offence, the State will almost always need to prove that the offender has committed prior offences of the same or similar nature. Even a criminal record of numerous other serious offences might say very little or nothing about a different specified serious offence. For instance, the past commission of an offence of robbery, no matter how serious, is unlikely to reveal anything about the risk of commission of an offence of criminal damage by fire, and vice versa. The assessment of the risk of commission of the specified serious offence is not an exercise of mathematical precision. By ss 7(3)(a) and 7(3)(b)389, the Court must have regard to expert evidence concerning the offender including psychological and psychiatric evidence. Great caution is required in the treatment of this evidence because risk prediction for serious violence, including sexual violence, has been said to be "plagued by high false-positive rates"390. Members of this Court have repeatedly emphasised the notorious difficulties in expert evidence in this area391, including by reference to comments in literature that "[p]redictions of dangerousness have been shown to have only a one-third to 50% success rate"392. Caution should be exercised in evaluating any expert evidence based on generalised psychological tools for assessment of recidivism. A fundamental premise of our criminal law is that individuals, with their vast variety of 387 Compare Evidence Act 1906 (WA), s 31A. See HRSO Act, s 82. 388 HRSO Act, ss 7(3)(c), 7(3)(d). 389 Read with HRSO Act, s 46(2)(a). 390 Tonry, Punishment and Politics: Evidence and Emulation in the Making of English Crime Control Policy (2004) at 142. 391 See, eg, Veen v The Queen (1979) 143 CLR 458 at 464; Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 123; McGarry v The Queen (2001) 207 CLR 121 at 142 [61]. 392 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 623 [124], quoting Warner, "Sentencing review 2002-2003" (2003) 27 Criminal Law Journal 325 at Edelman backgrounds and circumstances, should be treated based upon their own circumstances. The expert evidence can be taken into account cautiously, but the level of the risk is ultimately a question for the judge, based upon all the evidence and all the factors in s 7(3). This includes "any other relevant matter" in s 7(3)(j), particularly any evidence given by the offender393, as well as other restrictions imposed upon the offender (apart from imprisonment, remand in custody, or bail conditions)394. For instance, an otherwise substantial risk could become negligible if an offender were already subject to a post-sentence supervision order under ss 74D and 74G of the Sentence Administration Act 2003 (WA), such as wearing an electronic monitoring device. Thirdly, by ss 7(1) and 7(2), before a restriction order must be made the State has the onus of proving that it is "necessary to make a restriction order in relation to the offender to ensure adequate protection of the community" against an "unacceptable" risk. "Community" is defined in terms that include "any community" and is not limited to the community of Western Australia or Australia395. It would therefore extend to risks to regional communities within Western Australia or communities outside Western Australia, and arguably even overseas. The requirements that the risk be "unacceptable" and that the restriction order be "necessary" to ensure "adequate" protection of the community direct attention to whether the identified risk to the community can be tolerated. That assessment must be made in light of the whole of the burden which would be placed upon the liberty of the offender by the making of a restriction order, including any standard supervision order conditions396. Section 7 thus requires balancing, on the one hand, the level of the risk identified at the second stage (that is, the probability of the commission of the specified serious offence) together with the magnitude of the harm associated with that risk with, on the other hand, the burden that would be placed upon the liberty of the offender by a restriction order for an offence that they have not committed397. 393 HRSO Act, s 84(3)(b). 394 HRSO Act, s 7(4). 395 HRSO Act, s 4. 396 HRSO Act, s 30(2). 397 See Vella v Commissioner of Police (NSW) (2019) 269 CLR 219 at 260 [88]. See also Director of Public Prosecutions (WA) v Williams (2007) 35 WAR 297 at 312-313 [63]-[65]; Italiano v Western Australia [2009] WASCA 116 at [4], [46]. Edelman Consider, for example, circumstances adapted from those of Mr Garlett, involving an offender who had a pattern of unplanned and reasonably spontaneous burglaries and robberies as a minor398. It would not be necessary to make a restriction order to ensure adequate protection of the community from a small to moderate risk that they might commit a robbery that is not at the higher end of seriousness, especially if that offence were unlikely to involve any actual violence399. Even if the balancing process favoured the making of a restriction order, it might still be unnecessary to make such an order if, for example, the Court were able to make orders under other legislation, such as post-sentence supervision orders under the Sentence Administration Act400. Such orders might reduce an unacceptable risk to an acceptable one. Fourthly, if the Court concludes that the offender is a high risk serious offender then, by s 48, the Court must make a restriction order. There are two types of restriction orders: continuing detention orders, which impose the most extreme constraint upon liberty, and supervision orders. The discretion in s 48 to choose between a continuing detention order and a supervision order preserves the basic principle of justice that detention in the custody of the State should only be ordered as a matter of last resort401. As to supervision orders, there is a huge range of possible conditions that deprive an offender of their liberty without custodial detention. The Court should consider the conditions that are "appropriate"402, in addition to the standard conditions in s 30(2). The requirement of appropriateness imposes a duty on the Court to make only the additional supervision conditions required to ensure "adequate" protection of the community403, while imposing the minimum intrusion on an offender's liberty404. 398 Western Australia v Garlett (2021) 362 FLR 284 at 345 [249]. 399 See Western Australia v Amoore (2008) 182 A Crim R 165 at 176 [50]; Schischka v Western Australia [2015] WASCA 15 at [33]. 400 Western Australia v D'Rozario [No 3] [2021] WASC 412 at [21]. 401 Dinsdale v The Queen (2000) 202 CLR 321 at 328 [14]. 402 HRSO Act, s 27(1). 403 HRSO Act, s 48(2). 404 See Vella v Commissioner of Police (NSW) (2019) 269 CLR 219 at 243-244 Edelman There is, however, one substantial constraint upon the exercise of the discretion by the Court to impose a supervision order rather than a continuing detention order. By s 29, the Court cannot make a supervision order in relation to an offender unless it is satisfied, on the balance of probabilities, that the offender will substantially comply with the standard conditions of the order, including not committing another serious offence. The offender bears the onus of proof under The onus on the offender in s 29(1) is not an impossible onus which requires negating the possibility of commission of every variant of the many listed serious offences. In an adversarial system of law, s 29(1) should be interpreted to require only that the offender establish that, with a supervision order imposed, the offender will not, on the balance of probabilities, commit the serious offence, or offences, specified in the State's application405. For instance, an offender who is alleged in the State's application to pose an unacceptable risk of committing dangerous driving causing grievous bodily harm need not establish that they do not pose a risk of committing a robbery. Although it is invidious to speak of probabilities in the context of predicting human behaviour, the effect of s 29(1) is that a supervision order cannot be made, and a continuing detention order must be made, if the risk of the commission of the specified serious offence remains more likely than not after taking into account the conditions of the supervision order. Nevertheless, subject to the issues related to legislative facts discussed below, which issues were not before this Court on the appeal, a continuing detention order should be a rare order because s 30(5) permits an almost unlimited range of possible conditions beyond the standard supervision order conditions. In most circumstances, a supervision order should be able to satisfy the Court that the specified serious offence will not be committed on the balance of probabilities406. In addition to reporting and electronic monitoring, the long list of possible supervision order conditions includes conditions like those before the Court in Minister for Home Affairs v Benbrika407 such as prohibitions on various associations or attending various locations, home curfew, and even, in extreme cases, home detention requirements. For instance, in the case of an offender such as Mr Garlett, if a restriction order had been considered necessary and if the Court were not otherwise satisfied under s 29(1) that the offender would not commit the serious offence of robbery, 405 See Bell v Tasmania (2021) 96 ALJR 22 at 41 [100]; 395 ALR 589 at 613. 406 Compare, however, Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 214-215 [195]; 388 ALR 1 at 57-58. 407 (2021) 95 ALJR 166 at 214 [194]; 388 ALR 1 at 57. See, in detail, Lee v Benbrika [2020] FCA 1723, Annexure A. Edelman it should only require a modicum of legal competence to identify additional supervision order conditions which would satisfy the Court on the balance of probabilities that a robbery would not be committed. Even in more extreme cases where common supervision order conditions would not be sufficient for such satisfaction, it is hard to see how, as a measure of nearly last resort, a condition of home detention could not suffice rather than custodial detention. It is noteworthy that senior counsel for Mr Garlett properly conceded that there was a "clear line" between detention in custody, under a continuing detention order, and home detention, under a supervision order. That correct concession further increases the exceptional nature of a continuing detention order. Fifthly, although a continuing detention order is indefinite, the HRSO Act requires periodic reviews. The State is usually required to apply for a review as soon as practicable after the offender has been detained for a year, and every two years thereafter408. In exceptional circumstances, the offender can apply for a review of their continuing detention order409. The State is, in effect, required to provide ongoing justification for a continuing detention order at each review. This is because, by s 68(1)(a), the Court must rescind a continuing detention order unless it makes a finding at the review that the offender remains a high risk serious offender, a matter upon which the State bears the onus of proof410. On review, if the offender remains a high risk serious offender, s 68(1)(b) ensures that a continuing detention order remains an order of last resort. The discretion to make a supervision order ensures that such an order should be made, in the exercise of discretion, if it could reduce the risk that the offender will commit the specified serious offence to an acceptable level. The Kable principle and its application The Constitution preserves the existence of State courts and permits them to be vested with federal judicial power. It tolerates the courts being used as instruments of individual injustice in the pursuit of broader social purposes such as the prevention of future crime. But in a line of cases this Court has held that there is a limit to the extent to which courts can be used as instruments of injustice. 408 HRSO Act, s 64. 409 HRSO Act, s 65. 410 HRSO Act, s 7(2). Edelman The progenitor of Prosecutions (NSW)411. those cases was Kable v Director of Public In Kable, a majority of this Court held invalid a New South Wales law that authorised the further detention in custody of Mr Kable after his sentence of imprisonment had expired. Different reasons were given by the four members of the majority. One member of the majority, Toohey J, took a distinctly different approach from the others. His Honour's conclusion of invalidity was dependent upon his reasoning that the matter was within federal jurisdiction412. The first question that then arises is to identify the ratio decidendi of Kable – that is, the binding principle of law at an appropriate level of generality that can be identified from the reasons of a majority that is sufficient for the decision413. No sensible judge or academic author has ever supported an approach to ratio decidendi in appellate courts which requires focus upon a majority agreeing on the resolution of the case by reference to reasoning at every level of particularity. On that bizarre approach, Donoghue v Stevenson414 would have been a dull case with a ratio decidendi concerned with dead snails in ginger-beer bottles415. And Kable would have no ratio decidendi. Indeed, if ratio decidendi were (erroneously416) thought to be the only manner in which a decision could be binding authority then Kable would not even be a binding authority. It would, on that view, be open to any counsel to seek to have this Court ignore Kable without requiring it to be overturned, and to overturn other decisions that had assumed, 411 (1996) 189 CLR 51. 412 (1996) 189 CLR 51 at 96. 413 Compare the broader view of ratio decidendi: Goodhart, "Determining the Ratio Decidendi of a Case" (1930) 40 Yale Law Journal 161 at 168; Mason, "The Use and Abuse of Precedent" (1988) 4 Australian Bar Review 93 at 104. 415 Blackshield, "Ratio decidendi", in Blackshield, Coper and Williams (eds), The Oxford Companion to the High Court of Australia (2001) 579 at 579. See also Montrose, "The Ratio Decidendi of a Case" (1957) 20 Modern Law Review 587 at 591; Lücke, "Ratio Decidendi: Adjudicative Rationale and Source of Law" (1989) 1 Bond Law Review 36 at 44. 416 Re Tyler; Ex parte Foley (1994) 181 CLR 18 at 37, referring to Scruttons Ltd v Midland Silicones Ltd [1962] AC 446 at 479; D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at 46-47 [133]. See also Oliphant, "A Return to Stare Decisis" (1928) 14 American Bar Association Journal 71 at 72-73. See further Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at 150-151 [134]. Edelman without argument, that the decision had a ratio decidendi. Such an approach to precedent has no merit whatsoever417. At the appropriate level of generality, the ratio decidendi of Kable lies in the common reasoning of all members of the majority that legislation will be invalid to the extent that it confers functions upon a court resulting in what Gummow J described as the "incongruity between the discharge of those functions and the exercise of the federal judicial power"418. In an integrated Australian court system which includes State courts as repositories of federal jurisdiction, this doctrine has been applied with respect to the impairment of the institutional integrity of a State court by laws that required the court to act in a manner that is incompatible with, or repugnant to, its institutional integrity419. The Kable doctrine is based upon a presupposition in Ch III of the Constitution that Australian courts, including federal and State courts recognised in Ch III of the Constitution and possessing, or capable of possessing, federal jurisdiction, remain institutions of justice. Australian parliaments cannot impair the institutional integrity of courts by requiring them to act in a manner that is repugnant to their institutional integrity. The notions of impairment of institutional integrity and repugnancy or incompatibility with that institutional integrity are "not readily susceptible of definition in terms which will dictate future outcomes"420. Nevertheless, the repugnancy must usually be in a "fundamental degree"421. The threshold for the impairment of such a vaguely stated constitutional presupposition must be very high. The "defining characteristics"422 of courts that are necessary to preserve substantially their institutional integrity exist in two dimensions. One dimension is formal. It concerns the form in which the power is generally exercised: fair rules of evidence and procedure; independence and impartiality of decision-making; open justice and public decision-making; and the provision of reasons for decision. 417 See also Evda Nominees Pty Ltd v Victoria (1984) 154 CLR 311 at 316. 418 (1996) 189 CLR 51 at 127. 419 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 591 [15], 593 [23], 598-599 [37], 648 [198], 655-656 [219]; Condon v Pompano Pty Ltd (2013) 252 CLR 38 at 88-89 [123]; Attorney-General (NT) v Emmerson (2014) 253 CLR 393 at 424 [40]. See also Kuczborski v Queensland (2014) 254 CLR 51 at 98 [139]; Vella v Commissioner of Police (NSW) (2019) 269 CLR 219 at 245-246 [55]. 420 Condon v Pompano Pty Ltd (2013) 252 CLR 38 at 89 [124]. 421 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 132. 422 South Australia v Totani (2010) 242 CLR 1 at 43 [62]. Edelman These characteristics cannot always be treated as absolute requirements. For instance, without losing their character as courts: courts are sometimes closed; reasons are not given in every matter, however trivial; and procedures might in exceptional cases be unfair to one party. But the substantial impairment of a defining feature of a court can lead to it losing its character as judicial. Under the Kable doctrine, it has been held that one defining formal characteristic of courts that cannot be substantially impaired is a court's independence or impartiality, or the appearance of such423. The court's institutional integrity might be substantially impaired by a requirement to exercise judicial power without important aspects of procedural fairness424, without a duty to give reasons on important issues425, or without an independent curial determination because the court is enlisted to give effect to executive or legislative policy426. The other dimension of judicial power concerns the substantive effect of the exercise of the power. This encompasses the persons over whom the power is exercised, the orders that can be made in the exercise of the power, and the conditions under which those orders can be made. Under the Kable doctrine, the institutional integrity of a court can be unjustifiably compromised where the substantive effect of the exercise of judicial power is such that power, which is judicial in its formal dimension, is exercised unjudicially. That was an essential basis for the conclusion of invalidity in Kable itself. 423 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 116; North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146 at 163 [29]; Attorney-General (NT) v Emmerson (2014) 253 CLR 393 at 425 [41]. 424 Leeth v The Commonwealth (1992) 174 CLR 455 at 470; International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319 at 354-355 [54]-[56], 379-380 [140]-[141]; Wainohu v New South Wales (2011) 243 CLR 181 at 208-209 [44]; TCL Air Conditioner (Zhongshan) Co Ltd v Judges of Federal Court of Australia (2013) 251 CLR 533 at 553 [26]-[27]; Condon v Pompano Pty Ltd (2013) 252 CLR 38 at 72 [68], 99 [156], 106-108 [181]-[188]; North Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 256 CLR 569 at 594 [39]; Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 222-223 [223]; 388 ALR 1 at 68. 425 Wainohu v New South Wales (2011) 243 CLR 181 at 213-215 [54]-[58], 228 [104]; North Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 256 CLR 569 at 594 [39]. 426 South Australia v Totani (2010) 242 CLR 1 at 52 [82], 66 [142], 67 [149], 92-93 Edelman One strand of the reasoning of McHugh and Gummow JJ in Kable concerned deficiencies in the formal dimension of judicial power. The legislation was ad hominem, directed only to Mr Kable427. This gave the impression that the Court would apply rules as though it were an instrument of government policy428. But the formal dimension was not the central focus of the majority. A significant strand of the reasoning of every member of the majority concerned the substantive exercise of the power. The majority all held that the substantive exercise of the power was repugnant to the institutional integrity of the Supreme Court of New South Wales because the Court was required to consider depriving a person of his liberty "in a process designed to bring about the detention of a person by reason of the Court's assessment of what that person might do, not what the person has done"429. This was described as imprisonment "not on the basis that they have breached any law, but on the basis that ... they may do so"430, "not for what he has done but for what the executive government of the State and its Parliament fear that he might do"431, and "punitive in nature ... not consequent upon any adjudgment by the Court of criminal guilt"432. The continuing detention powers in the HRSO Act are punitive It is "fundamental for an understanding of Kable"433 to appreciate that the Kable doctrine is distinct from the principles considered in Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs434 which are based upon the separation of powers at the Commonwealth level. At the Commonwealth level, the principle of separation of powers divides the powers that can be exercised by the Commonwealth judiciary from those that can be exercised by the Commonwealth Parliament or the Commonwealth Executive. The relevant principle in Lim, relied upon by Mr Garlett, was that punishment is generally435 the 427 (1996) 189 CLR 51 at 121, 125. See also at 89. 428 (1996) 189 CLR 51 at 124, 134. 429 (1996) 189 CLR 51 at 97. 430 (1996) 189 CLR 51 at 107. 431 (1996) 189 CLR 51 at 120. 432 (1996) 189 CLR 51 at 132. 433 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 614 [86]. 434 (1992) 176 CLR 1. 435 Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 211 [181]; 388 ALR Edelman exclusive province of the judiciary and that involuntary detention of a citizen in custody will often be punitive436. But that is a principle concerned with the separation of powers. It says nothing about when punishment will be so unjust that a power to impose it cannot even be exercised by the judiciary. Mr Garlett did not dispute that the constitutional separation of powers considerations that arise at the Commonwealth level do not apply equally at the State level, so the Lim principle concerning the separation of powers does not arise in this case. Nevertheless, the character of continuing detention orders as undeserved punishment is relevant to a consideration of whether the HRSO Act in its application to robbery unjustifiably compromises the institutional integrity of the Supreme Court of Western Australia. The reasoning in Lim about the nature and character of punishment, expressed in relation to the separation of powers, can inform the answer to this different question, namely: when is power that is of a nature that is generally exclusively judicial so unjust in its operation that it cannot even be exercised by the judiciary? There are passages in the joint judgment in Benbrika that appear to contain a premise that an order that is protective cannot also be punitive437. For instance, the joint judgment described the object of a continuing detention order as "community protection and not punishment" and as "protective and not punitive"438. If this is taken to mean that an order that is protective cannot be punitive then it is plainly wrong. It is a simple logical fallacy to reason that: (i) in some non-punitive instances, detention is imposed for public protection, such as for psychological illness, chemical, biological and radiological emergencies, contagious diseases, and drug treatment439; (ii) continuing detention orders are imposed for reasons including public protection; and therefore (iii) continuing detention orders are not punitive. The same logical fallacy would suggest that sentences of imprisonment for most criminal offences are not punitive because they involve community protection considerations of specific and general deterrence. There are also passages in the joint judgment in Benbrika that appear to draw analogies between, on the one hand, continuing detention of persons who, based upon their past conduct and the commission of past offences, it is anticipated might commit an offence and, on the other hand, detention of persons due to 436 (1992) 176 CLR 1 at 27. 437 See also Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 654 [216]-[217]. 438 Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 182-183 [38]-[41]; 388 ALR 1 at 15-16. 439 See, eg, Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 654 [217]. Edelman psychological illness or infectious disease440. Such analogies are, at best, strained. The detention of a person for reasons of psychological illness or infectious disease is not a sanction for behaviour, actual or anticipated. It is not a response to any choices made by the person detained. A person chooses to commit an offence. A person does not choose to suffer from psychological illness or infectious disease. Elsewhere, however, the joint judgment in Benbrika suggested that the term "punishment" was only being used in the narrow sense of sanctioning an offender "for the offence for which [they were] sentenced" or "for the offences of which [they] had been convicted"441. Only in this narrow, contrived sense of punishment could the legislation considered in Benbrika be said not to be punitive. The law should, however, avoid mealy-mouthed euphemisms. The relevant legal and constitutional sense of punishment does not require "extraordinarily narrow and formalistic reasoning"442. And, as explained above, preventive detention has historically been recognised for what it is. It is a form of punitive order443. As a matter of substance, and whether or not it is described as "coercive"444, the continuing detention of an offender under a regime such as the HRSO Act applies a sanction to enforce a norm of behaviour445. It differs from traditional criminal punishment in that the sanction looks forward to future behaviour rather than backwards to past behaviour446. But the order is punitive. 440 See, eg, Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 180 [32]; 388 ALR 1 at 13. 441 Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 182-183 [40]-[41]; 388 ALR 1 at 16. 442 Dyer, "Minister for Home Affairs v Benbrika and the Capacity of Chapter III of the Commonwealth Constitution to Protect Prisoners' Rights" (2022) 45 University of New South Wales Law Journal 209 at 238. See also Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 589 [11], 612-613 [81]-[82]; Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 219-220 [212]-[214]; 388 ALR 1 at 63-65. 443 See also Vella v Commissioner of Police (NSW) (2019) 269 CLR 219 at 254-255 [78]; Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 219 [212]; 388 ALR 1 at 63-64. 444 Witham v Holloway (1995) 183 CLR 525 at 534. 445 See Alexander v Minister for Home Affairs (2022) 96 ALJR 560 at 612-613 [241]-[246]; 401 ALR 438 at 498-500. 446 Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 216-217 [202]; 388 ALR 1 at 60. Edelman In Lim447, Brennan, Deane and Dawson JJ (with Gaudron J relevantly agreeing on this point) treated punishment as a matter of substance rather than form when they explained that the adjudication and punishment of criminal guilt has "become established as essentially and exclusively judicial in character". Their Honours went on to describe the concern as being "with substance and not mere form"; it was not open to the Parliament to "invest the Executive with an arbitrary power to detain citizens in custody notwithstanding that the power was conferred in terms which sought to divorce such detention in custody from both punishment and criminal guilt". This reasoning applies, a fortiori, to detention which continues the imprisonment of an offender after a sentence has been served. Thus, in Chester v The Queen448 this Court spoke of the "stark and extraordinary nature of punishment by way of indeterminate detention" which "permit[s] the increase of a sentence of imprisonment beyond what is proportional to the crime merely for the purpose of extending the protection of society from the recidivism of the offender". As five members of this Court recognised when considering the Queensland preventive detention legislation in Fardon v Attorney-General (Qld)449, the punitive character of the indefinite detention does not change according to whether it is imposed at the time of sentencing or later. That legislation was also rightly recognised as penal by both the majority and the minority of the United Nations Human Rights Committee in Fardon v Australia450. The fiction that continuing detention orders are not punitive is further evident in the requirement that the offender remain in a prison during the term of continuing detention. As Professor Radzinowicz observed, if preventive detention really were not punishment then "an institution for preventive detention ought to be so organized that it actually differs from [a] prison"451. Continuing detention orders are "enhanced repression, that is ... a punishment more severe than that envisaged by the code for the offence under trial just because of the previous, 447 (1992) 176 CLR 1 at 27, 53. 448 (1988) 165 CLR 611 at 618-619. See also Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 217 [203]; 388 ALR 1 at 60-61. 449 (2004) 223 CLR 575. See the discussion in Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 219-220 [214]; 388 ALR 1 at 64-65, referring to Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 589 [11], 596-597 [34], 610 [74], 450 United Nations Human Rights Committee, Communication No 1629/2007 (Fardon v Australia), UN Doc CCPR/C/98/D/1629/2007 (2010). 451 Radzinowicz, "The Persistent Offender" (1939) 7 Cambridge Law Journal 68 at 72. Edelman heavily marked criminal record of this category of offenders"452. As Winston Churchill observed, "it ought not to be imagined by the courts or by the public, that a period of prolonged confinement ... within the walls of a prison ... is not, whatever name it may be called by, a most serious addition to any other punishment"453. Continuing detention orders under the HRSO Act are appropriately described as "protective punishment"454. Unjust punishment, by itself, is insufficient to invalidate a law Legislation can require, and historically has required, courts to act for what is perceived to be the public good despite injustice to the individual before the court. As explained above, there is a long history of courts participating in, and perpetuating, the injustice of punishment by a continuing detention order to protect the public from an objectively serious offence that has not been committed and might never be committed. In Kable, the existence of this injustice was not by itself a sufficient impairment of the institutional integrity of the Court. Nor was it sufficient in Fardon or in Benbrika. In Fardon455, six members of this Court upheld the validity of continuing detention orders for serious sexual offenders under the Dangerous Prisoners (Sexual Offenders) Act 2003 (Qld). And in Benbrika456, five members of this Court upheld the validity of continuing detention orders for terrorism-related offenders under s 105A.7 of the Criminal Code (Cth). Nevertheless, as Kable demonstrates, although legislation that imposes unjust punishment for an objectively serious offence will not be invalid for that reason alone, there will come a point at which the goal of public protection cannot justify the extent of injustice and the consequent sacrifice of the court's institutional integrity. The issue, to adopt the words of the joint judgment in Benbrika457, is whether the legislation is an "appropriately tailored scheme for the protection of the community from the harm that particular forms of criminal activity may pose". Although courts can be used as instruments of unjust punishment in order to protect 452 Radzinowicz, "The Persistent Offender" (1939) 7 Cambridge Law Journal 68 at 68. 453 See Radzinowicz and Hood, A History of English Criminal Law and its Administration from 1750 (1986), vol 5 at 279. 454 Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 216 [198]; 388 ALR 455 (2004) 223 CLR 575. 456 (2021) 95 ALJR 166; 388 ALR 1. 457 (2021) 95 ALJR 166 at 180 [32]; 388 ALR 1 at 13. Edelman the community from apprehended harm, a scheme that is not appropriately tailored will unjustifiably compromise the institutional integrity of a federal, State or Territory court by requiring the court to perpetuate individual injustice of a magnitude, and in a manner, that cannot be justified by the incremental social benefit of the law. In my reasons in Benbrika, I considered how the point might be identified at which legislation is no longer appropriately tailored because the social purposes, such as adequate protection of the community and treatment of offenders, no longer justify the individual injustice of continuing detention458. One circumstance is where, based on the legal operation or practical effect of the legislation, the purposes of the protective punishment could easily be met to the same extent by reasonable alternatives which are less invasive upon liberty. Another is where the purposes of the protective punishment, assessed primarily by reference to the importance placed upon those purposes by Parliament, are slight or trivial compared with the extent of the constraint upon liberty. Like the legislation considered in Kable, the legislation considered in Fardon and Benbrika involved the individual injustice of preventive detention for very serious offences. But unlike the legislation considered in Kable, there were few obstacles to justifying the legislation considered in Fardon and Benbrika based on the formal dimension of judicial power. As Gleeson CJ said in Fardon459, the legislation considered in that case "authorise[d] and empower[ed] the Supreme Court to act in a manner which is consistent with its judicial character". And as I said in Benbrika460, there were many aspects of the legislation considered in that case that required that the power "be exercised in a judicial manner". Can the individual injustice of the HRSO Act be justified? The legal operation of the HRSO Act The objects of the HRSO Act are to "ensure adequate protection of the community and of victims of serious offences" and also to "provide for the continuing control, care or treatment of high risk serious offenders"461. The legal operation of the HRSO Act is the starting point for assessing "reasonable necessity", namely the availability of any reasonable, less restrictive alternatives 458 (2021) 95 ALJR 166 at 223-224 [226]-[227]; 388 ALR 1 at 69. 459 (2004) 223 CLR 575 at 592 [19]. 460 (2021) 95 ALJR 166 at 226 [234]; 388 ALR 1 at 72. 461 HRSO Act, s 8. Edelman that could achieve these purposes as effectively. It is also the starting point for assessing the adequacy of that legislation in the balance. There are two aspects of the HRSO Act in its application to robbery that present significant issues for reasonable necessity and adequacy in the balance. Both aspects concern the substantive operation of the HRSO Act. In its formal dimension, the HRSO Act satisfies the key requirements for the exercise of judicial power. The HRSO Act requires the Court to hear admissible evidence given by or on behalf of the offender462. It provides that proceedings under the Act "are to be taken to be criminal proceedings for all purposes"463, which incorporates protections under the Criminal Procedure Act 2004 (WA) and the Evidence Act 1906 (WA). The rules of evidence generally apply464. The HRSO Act also requires the Court making a restriction order to "give detailed reasons for the order"465. And, despite the detailed submissions of Mr Ryan, as amicus curiae in support of the contrary conclusion, the Supreme Court of Western Australia is not invalidly enlisted to give effect to legislative and executive policy. The real difficulties in justifying the HRSO Act in its application to robbery concern the substantive dimension of judicial power. 1. Continuing detention as a possible order for less serious robberies If the HRSO Act permitted a continuing detention order for all robberies, then there would be two difficulties for justification which, at least in combination, would be likely to invalidate the Act in its application to robbery. The first difficulty is the wide range of seriousness of robbery offences. In this respect, robbery differs from serious sexual offences and terrorism-related offences. The serious sexual offences to which the legislation considered in Fardon responded were sexual offences involving violence or against children. And the terrorism-related offences to which the legislation considered in Benbrika responded involved conduct "connected with action which strikes at the heart of a civilised society"466 and which "poses a singular threat to civil society"467. No offence in the range of serious sexual offences or terrorism-related offences 462 HRSO Act, s 84(3)(b). 463 HRSO Act, s 82(1). 464 HRSO Act, s 84(4). 465 HRSO Act, s 28. 466 (2021) 95 ALJR 166 at 224 [229]; 388 ALR 1 at 70. 467 (2021) 95 ALJR 166 at 181 [36]; 388 ALR 1 at 14. Edelman covered by the Fardon and Benbrika legislation could be described other than as a serious offence. By contrast, the offence of robbery, under s 392 of the Criminal Code (WA), involves stealing a thing with the use, or threatened use, of violence to a person or property in order to obtain the thing or overcome resistance to it being stolen. Although the maximum term of imprisonment for robbery in circumstances of aggravation is life imprisonment, the offence need not be serious. Towards the lowest level of seriousness, robbery could be committed in circumstances as trivial as an 18-year-old offender demanding possession of a $1 comic book known to be owned by his friend, by threatening to tear some of the pages if it is not permanently given by the friend to the offender. Whilst the triviality of this offence is such that it might never be charged, s 6(a) of the HRSO Act extends the application of the Act to robberies that might never be the subject of a charge. It must be emphasised that the difficulty in justifying the application of the HRSO Act to less serious offences of robbery does not depend upon any distinction between "[p]revention of harm" and "prevention of commission of a criminal offence"468. The invidiousness of such a distinction is illustrated by the difficulty, perhaps absurdity, of attempting to identify which criminalised acts of assistance in the commission of terrorist offences do not involve "harm"469. The policy choice of the Parliament of Western Australia to treat robbery as a crime that always involves harm to the public must be respected. But, as the sentencing discretion rightly recognises, the harm might be very minimal. The difficulty in justifying the potential application of the HRSO Act to all robberies arises because the Act could, as effectively, achieve its purposes without permitting continuing detention orders for anticipated robberies that are not objectively serious. This Court has said that the "extension of a sentence of imprisonment which would violate the principle of proportionality can scarcely be justified on the ground that it is necessary to protect society from crime which is serious but non-violent"470. That reasoning applies, a fortiori, when the crime is both non-serious and non-violent. It is hard to conceive of any circumstances where the adequate protection of the community (including potential victims) requires the continuing detention of a person solely on the basis that it is predicted, 468 See Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 225 [231]; 388 ALR 1 at 71. Compare (2021) 95 ALJR 166 at 191 [79]; 388 ALR 1 at 27. Compare also Blackstone, Commentaries on the Laws of England (1769), bk 4, ch 1 at 9. 469 Compare Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 195 [101]; 388 ALR 1 at 32. 470 Chester v The Queen (1988) 165 CLR 611 at 618. Edelman by means of dubious validity, that the person is likely to commit a robbery at the lower end of seriousness. Further, it is at least arguable that an order for continuing detention of such a predicted offender might undermine, rather than advance, any care or treatment of that person. A second difficulty in justifying the application of continuing detention to any offence of robbery is the apparent absence of balance between, on the one hand, the limited need to protect the community from the commission of robberies that are not objectively serious and, on the other hand, the extreme constraint upon liberty imposed by continuing detention orders. 2. The lack of discretion as to whether to make a restriction order Another notable feature of the HRSO Act which raises issues for the substantive dimension of judicial power is the lack of judicial discretion in s 48 as to whether to make a restriction order. This contrasts with the discretion contained in the sexual offender legislation considered in Fardon, which provided that if the court is satisfied that there is an unacceptable risk that the prisoner will commit a serious sexual offence, the court "may order" continuing detention or supervision471. It also contrasts with the discretion contained in the terrorism legislation considered in Benbrika, which provided that a court "may make a written order under this subsection"472. The absence of judicial discretion as to whether to make a restriction order could be very significant in the absence of an appropriately narrow interpretation of the HRSO Act. For instance, on an interpretation of the HRSO Act which neglected the third and fourth stages set out above, if the Court were to conclude that a person is a high risk serious offender on the basis of a high risk that the person will commit a robbery at the lower end of seriousness, then the combination of s 29(1) and the lack of judicial discretion in the making of a restriction order in s 48 could have a perverse effect. An offender who was thought to be at high risk of committing a very minor robbery – threatened damage to a cheap comic book – would be subject to the grossly disproportionate order of continuing detention if the offender could not prove that a supervision order would make the offender unlikely to commit any anticipated minor offending falling within Sch 1. 471 Dangerous Prisoners (Sexual Offenders) Act 2003 (Qld), s 13(5) (emphasis added). See Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 592 [19], 597 [34], 602 [44]. Compare at 619 [109]. 472 Criminal Code (Cth), s 105A.7(1) (emphasis added). See Minister for Home Affairs v Benbrika (2021) 95 ALJR 166 at 175 [11], 186-187 [58], 199 [123], 213 [189]; 388 ALR 1 at 6-7, 21, 37-38, 55. See also Vella v Commissioner of Police (NSW) (2019) 269 CLR 219 at 245 [54]. Edelman The practical operation of the HRSO Act Since the HRSO Act was very recently enacted, Mr Garlett was not in a position to make submissions about the practical operation of the HRSO Act. Nevertheless, it is necessary to observe that the practical operation of the Act may, in future, raise significant difficulties in justifying continuing detention orders, particularly as the level of objective seriousness of the "serious offences", or the level of objective seriousness of the circumstances of those offences, diminishes. Although this Court had no legislative facts before it on the subject, one potentially significant issue in the practical operation of the HRSO Act was referred to in the written submissions for Mr Ryan. That issue is what Quinlan CJ, referring to the predecessor legislation to the HRSO Act, described as a "Catch-22"473. The Catch-22 arises where a continuing detention order must be made before the State will provide an offender with treatment, which is in turn necessary to prevent them from being subject to an order for continuing detention. That Catch-22 would show a practical operation of the HRSO Act that is contrary to its expressed purposes. It would provide a strong foundation for a submission that the significant individual injustice manifested by the HRSO Act is unjustified by its purposes. As Quinlan CJ rightly said, it is "in the interests of the community, and its protection from offending, that an offender with known treatment needs have those treatment needs addressed before consideration is given to their release under supervision not, as is the case, afterwards"474. The same concern has been reiterated in proceedings under the HRSO Act. This suggests that its practical operation might, not uncommonly, be subject to the same issues475. In this matter, however, probably due to the recent nature of the HRSO Act, there was no evidence about these issues before Corboy J and there is insufficient information before this Court for any legislative fact to be found concerning the extent to which the Catch-22 arises under the HRSO Act. Another significant issue may be the disproportionate effect that the HRSO Act has on Indigenous Australians for reasons that do not bear upon any of the purposes of the HRSO Act. That effect might be manifest in relation to Indigenous Australians who do not have permanent or fixed accommodation. As the Australian Law Reform Commission has observed, "Aboriginal and Torres Strait Islander peoples are ... disproportionately represented in the homeless population 473 Western Australia v Rao [2019] WASC 93 at [135]-[136]. 474 Western Australia v Rao [2019] WASC 93 at [137] (emphasis in original). 475 Western Australia v ACW [No 2] [2020] WASC 480 at [136]-[137]; Western Australia v Mackay [No 2] [2020] WASC 474 at [122]; Western Australia v ACJ [2021] WASC 219 at [268]-[270]. Edelman ... accounting for 28% of homeless people [in 2011]"476. Those persons might be deprived of the possibility of a supervision order, and subjected to a continuing detention order, only because they are unable to prove, as required by ss 29(1), 30(2)(a), and 30(2)(c), that they will advise a community corrections officer of their address and every change in their place of residence during the period of the Any disproportionate effect of the HRSO Act upon Indigenous Australians might be exacerbated by psychological or psychiatric reports to which the Court must have regard478. In 2019, it was observed that Australian practitioners in this field "do not have access to risk assessment instruments that have been developed and validated for Australian populations and therefore use instruments that were developed for North American and European populations". The authors continued479: "Practitioners' use of non-validated instruments to assess Indigenous Australians is particularly problematic because people from this population group are significantly over-represented in the criminal justice system. ... Scholars have been writing about the role of ethnicity in the assessment of offenders for many years. There has specifically been an ongoing debate regarding the use of risk assessment instruments developed in North America to assess Indigenous people since the beginning of this decade to the present. The few Australian authors who write about this topic are mostly sceptical about the propriety of using non-validated instruments to assess Indigenous Australian offenders." Such practical effects cannot be assessed without sufficient material before this Court from which inferences concerning these matters can be drawn. Nevertheless, the disproportionate application of continuing detention orders to Indigenous Australians has been noticed under the Queensland preventive detention legislation considered by this Court in Fardon. During the debate on that proposed legislation in Parliament, it was said that it would apply only to 476 Australian Law Reform Commission, Pathways to Justice – An Inquiry into the Incarceration Rate of Aboriginal and Torres Strait Islander Peoples, Report No 133 477 See also Western Australia v ACW [No 2] [2020] WASC 480 at [132]-[133]. 478 HRSO Act, ss 7(3)(a), 7(3)(b), 46(2)(a). Above at [223]. 479 Allan et al, "Assessing the Risk of Australian Indigenous Sexual Offenders Reoffending: A Review of the Research Literature and Court Decisions" (2019) 26 Psychiatry, Psychology and Law 274 at 275 (footnotes and in-text citations omitted). Edelman "approximately a dozen or so very, very serious offenders, most of whom have been in prison for a long time"480. In 2021, in Attorney-General for the State of Queensland v Thaiday481, Applegarth J said: "Over time, however, it has swept up scores of Indigenous men who are not paedophiles, but who pose a risk of committing a serious sexual offence when they are intoxicated by alcohol or drugs. The Act is a blunt instrument for these offenders. It is poorly-designed to address the long tail of Indigenous disadvantage in this State. It also is a very expensive way to address the risk of reoffending by individuals whose problems are associated with prejudiced upbringings in places like Palm Island, histories of alcohol and substance abuse, entrenched anti-social attitudes, distorted senses of entitlement towards women, homelessness and poverty." Issues of this nature were not unnoticed in Parliament at the time that the HRSO Act was passed. In relation to the inclusion of the offence of burglary, if committed in specified circumstances, as a serious offence in Sch 1 to the HRSO Act – that being the only provision which has not yet come into operation – the Attorney-General cogently observed482: "The Legislative Council decided in its wisdom that aggravated burglary should be included. I have to say, this was of some concern to the State Solicitor and the Director of Public Prosecutions, because that can bring in so many people who have not committed an actual violent offence ... I thought that all members of the chamber contributed to the third reading speech in a most positive way on the reduction of Indigenous prisoner rates. We know that a lot of burglaries are committed by young Indigenous people who have fled their home because it is too violent at night. They wander the streets of some of our regional towns like Kununurra, Halls Creek, Fitzroy, Kalgoorlie and other towns, enter homes and steal for food. We did not want to capture all these people in this; we would never reduce the Indigenous prisoner rate. Do not forget that these people have served the actual term for their offence. So, aggravated burglary was eventually included, but not if the only circumstance of aggravation was being in company." The inclusion of burglary as a serious offence in the HRSO Act may have significant and separate problems of justification. But an assessment of the impact 480 Queensland, Legislative Assembly, Parliamentary Debates (Hansard), 4 June 2003 481 [2021] QSC 227 at [17]. 482 Western Australia, Legislative Assembly, Parliamentary Debates (Hansard), 25 June 2020 at 4482. Edelman of such practical effects upon the validity of continuing detention orders under the HRSO Act for robbery, or possibly burglary, must await a case which raises those legislative facts. On the material before this Court, the HRSO Act is justified in relation to robbery Since the only substantial concerns in justifying the HRSO Act in its application to robbery, on the facts of this case, relate to the legal operation of the HRSO Act, it is essential to assess those concerns in light of the proper interpretation of the HRSO Act. The five interpretive stages set out above adopt a narrow interpretation that answers these concerns. That narrow interpretation is the best understanding of the HRSO Act, which has a broad premise of depriving persons of liberty only where it is necessary to ensure adequate protection of the community. Even if the narrow interpretation were not the proper interpretation, s 7 of the Interpretation Act would require the relevant provisions to be read down in this manner in order to prevent the invalidity of the HRSO Act in its application to robbery. Both of the issues considered above, concerning justification of the legal operation of the HRSO Act, relate to the possibility of a continuing detention order being imposed for the anticipated commission of a robbery that is not objectively serious and involves little individual or social harm. On the proper interpretation of the HRSO Act, no restriction order can be made unless, by the third stage in the interpretive process, the probability of the specified serious offence being committed, together with the magnitude or seriousness of the harm that would result, outweighs the burden placed upon the liberty of the offender by a restriction order for an offence that they have not committed. Applied correctly, therefore, even a judicial assessment of a high probability of an offender committing a robbery would not be sufficient for a restriction order if the anticipated robbery is of a low level of seriousness. Even where an anticipated robbery is sufficiently serious to engage s 7 of the HRSO Act, any concerns arising from the lack of judicial discretion to refuse a restriction order are resolved by the fourth stage of the interpretive process. Given the vast range of possible supervision orders, including even home detention, it should not require more than a modicum of ingenuity to devise supervision orders that will suffice for an offender to establish that they will satisfy the conditions of a supervision order, including not committing the specified serious offence. A continuing detention order would not then be made. Mr Garlett's challenge on this appeal was concerned only with continuing detention orders; supervision orders for anticipated offences of robbery would be invalid only if inseverable in the legislative scheme from continuing detention orders. An important part of the scheme is the discretion to make a supervision order rather than a continuing detention order. That discretion would almost invariably be exercised, other than in the most extreme cases which involve Edelman offenders who cannot be the subject of a supervision order. The existence of this "internal" discretion is a reasonable alternative to a discretion as to whether any restriction order should be made. And, in light of the extreme circumstances necessary for a continuing detention order, it cannot be said that the purposes of the protective punishment are slight or trivial compared with the extent of the constraint upon a person's liberty for an anticipated offence. Conclusion It is of paramount importance to these reasons to emphasise that, on its proper interpretation, the HRSO Act does not permit the imposition of continuing detention orders for any robbery. In its application to robberies, the HRSO Act permits restriction orders only for anticipated robberies with a sufficiently high degree of seriousness and a sufficiently high magnitude of harm to justify a restriction order that deprives a person of their liberty for an offence that they have not committed. Even then, the restriction order will only be a continuing detention order as a matter of last resort. The real question on this appeal, in the absence of any particular legislative facts, is therefore whether the HRSO Act is invalid in its application to robbery in those extreme cases in which continuing detention orders would be imposed. On its proper interpretation, which involves a very narrow application of continuing detention orders, and in light of the decisions of this Court in Fardon483 and Benbrika484, that question must be answered in the negative. As explained at the outset of these reasons, any attempt to distinguish the seriousness of extreme cases of robbery from the sexual offences that were the subject of the legislation considered in Fardon is a futile enterprise because the categories are not Whether or not a continuing detention order for an offence that has not been committed can ever be morally justified, the Constitution does not prohibit the Parliament of Western Australia from empowering a court to impose that injustice in the extreme circumstances of an anticipated robbery as permitted by the proper interpretation of the HRSO Act. I agree with the orders proposed by Kiefel CJ, Keane and Steward JJ. 483 (2004) 223 CLR 575. 484 (2021) 95 ALJR 166; 388 ALR 1. 485 See, eg, Western Australia v Hussian [2020] WASCA 186. Gleeson 286 GLEESON J. Legislation providing for a court to order the detention of an offender following completion of (or otherwise in excess of) a sentence of imprisonment was found to be valid in Fardon v Attorney-General (Qld)486, Pollentine v Bleijie487 and Minister for Home Affairs v Benbrika488. In Fardon and Pollentine, which concerned State legislation, the standard of constitutional validity engaged was that identified in the decision of Kable v Director of Public Prosecutions (NSW)489, and which has been stated in terms that State (or Territory490) legislation may not validly confer upon a court that is a potential repository of federal jurisdiction a function that substantially impairs that court's institutional integrity, such an impairment being incompatible with the court's constitutional position as a potential repository of federal judicial power491. In Benbrika, which concerned Commonwealth legislation, the standard of validity engaged was instead supplied by the principle of separation of federal judicial power from the executive and legislative powers of the Commonwealth492. Of these decisions, Fardon is most relevant to this case. Fardon concerned the Dangerous Prisoners (Sexual Offenders) Act 2003 (Qld) ("the DPSO Act"). The appellant did not challenge the correctness of Fardon (or any other decision in which this Court has found legislation providing for preventive orders to be valid). Instead, the appellant contends that, unlike the DPSO Act, the High Risk Serious Offenders Act 2020 (WA) ("the HRSO Act") offends the Kable principle insofar as the HRSO Act applies to a person who has been convicted of robbery. It was recognised in Fardon that the DPSO Act raised "[s]ubstantial questions of civil liberty" and "difficult questions involving the reconciliation of 486 (2004) 223 CLR 575. 487 (2014) 253 CLR 629. 488 (2021) 95 ALJR 166; 388 ALR 1. 489 (1996) 189 CLR 51. In Kable, legislation of that general kind, but which had the exceptional feature of being ad hominem, was held invalid. 490 Attorney-General (NT) v Emmerson (2014) 253 CLR 393 at 425 [42]. 491 Vella v Commissioner of Police (NSW) (2019) 269 CLR 219 at 246 [55] (quoting Emmerson (2014) 253 CLR 393 at 424 [40]), 274-275 [138]. 492 R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 269- Gleeson rights to liberty and concerns for the protection of the community"493. Those questions are magnified in relation to the HRSO Act to the extent that the Act has the potential to apply to more offenders and may operate to protect the community from a wider array of harms. The present case may demonstrate the harsh potential of the HRSO Act: the State of Western Australia sought a continuing detention order from the Supreme Court of Western Australia ("WASC")494 in respect of a young offender who has spent little of his adolescent and adult life outside of prison. His most recent imprisonment followed a conviction for aggravated armed robbery involving threats of violence but no physical violence, and no weapon but a pretence of being armed with a handgun. However, as it turned out, no continuing detention order was made. Prior to the hearing of the application, the State advised the Court that the State would seek only a supervision order495, and, ultimately, the State's application was refused. The appellant was not considered to have a propensity to commit any particular "serious offence" as defined in the HRSO Act. Rather, the Court's conclusion was that the appellant had a tendency to commit offences more generally, particularly when in antisocial company and when under the influence of illicit substances. In any event, and as in Fardon, this case may not be decided upon the basis of concerns about the legislative policy of preventive detention as provided for in the State legislation under challenge. The appellant argued that the case raises for consideration whether the regime in the HRSO Act, designed to protect the community, might render preventive detention so commonplace that its application by the WASC is offensive to the Court's institutional integrity. Put another way, does the HRSO Act provide for so much preventive detention that its application should be impugned as a "grossly unjudicial chore"496? The Court's capacity to address broad questions of this kind meaningfully is limited: its task is confined to 493 (2004) 223 CLR 575 at 586 [3], 592 [20]. In Fardon v Australia, the United Nations Human Rights Committee found that the DPSO Act violated Mr Fardon's rights under Art 9 para 1 of the International Covenant on Civil and Political Rights: Communication No 1629/2007, UN Doc CCPR/C/98/D/1629/2007 (2010) at [7.4]. 494 As provided for in ss 3 and 26(1) of the HRSO Act, a continuing detention order is "an order that the offender be detained in custody for an indefinite term for control, care, or treatment". 495 As provided for in ss 3 and 27(1) of the HRSO Act, a supervision order is "an order that the offender, when not in custody, is to be subject to stated conditions that the court considers appropriate", where the imposition of those conditions is governed by s 30. 496 See Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 133. Gleeson determining the narrow issue of the validity of the HRSO Act in its application to a person who is under a custodial sentence for robbery. I agree with the plurality that the function of the WASC under the HRSO Act in its application to the offence of robbery is materially indistinguishable from the function conferred upon the Supreme Court of Queensland ("QSC") by the DPSO Act. Accordingly, the appellant's challenge to the validity of the HRSO Act must fail. I generally agree with their Honours' reasons that the Act is not offensive to the institutional integrity of the WASC but add the following observations. State power to make laws for involuntary detention by the state Despite early criticisms497, the statement referred to in Benbrika by the plurality as the "Lim principle"498 and by Gageler J in the present proceeding as the "Lim observation"499, namely that, exceptional cases aside, "the involuntary detention of a citizen in custody by the [s]tate is penal or punitive in character and, under our system of government, exists only as an incident of the exclusively judicial function of adjudging and punishing criminal guilt"500, is now well accepted as a statement of a constitutional limit upon Commonwealth legislative power501. In Benbrika, the plurality considered that a preventive detention regime imposed by Commonwealth legislation was valid as an exception to the "Lim principle"502. Noting that the decision in Lim itself illustrated that the categories of exceptional cases of legal non-punitive detention are not closed, the plurality in Benbrika did not accept that the exceptions were either confined by history or insusceptible of analogical development. For their Honours, it was the protective purpose of the relevant legislation that qualified the judicial power conferred by 497 Kruger v The Commonwealth (1997) 190 CLR 1 at 109-110; Re Woolley; Ex parte Applicants M276/2003 (2004) 225 CLR 1 at 24 [57]; Al-Kateb v Godwin (2004) 219 CLR 562 at 648-649 [258]. 498 Benbrika (2021) 95 ALJR 166 at 177 [15]; 388 ALR 1 at 8-9. 499 Reasons of Gageler J at [110]-[111]. 500 Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 27. 501 Benbrika (2021) 95 ALJR 166 at 177-178 [19], 187-188 [65], 200-201 [134], 211 [181], 212 [185]; 388 ALR 1 at 10, 22, 39-40, 53, 54; The Commonwealth v AJL20 (2021) 95 ALJR 567 at 576 [22]-[23], 587 [78], 599 [128]; 391 ALR 562 at 569- 502 Benbrika (2021) 95 ALJR 166 at 181 [36], 185 [47], 185-186 [53]; 388 ALR 1 at Gleeson the legislation as "an exception to a principle that is recognised under our system of government as a safeguard on liberty"503. It has been suggested that the Lim principle operates as a limit upon the legislative power of the States, as a principle that identifies functions that are incompatible with the institutional integrity of a State court that is the concern of the Kable principle. In the absence of a challenge to Fardon, the question was not fully argued. It would be a significant step to conclude that the Lim principle operates as an additional constraint on State (and Territory) legislative power, over and above the Kable principle. There can be no doubt that the generally penal or punitive character of involuntary detention of a citizen (or any person) in custody does not depend upon whether "the [s]tate"504 effecting the detention is the Commonwealth, or an Australian State or Territory. Further, at least as a matter of empirical fact, it is the norm throughout Australia that involuntary detention exists only as an incident of the exercise of judicial power to adjudge and punish criminal guilt. However, the Lim principle was articulated as a constitutive part of the doctrine of the separation of Commonwealth judicial power505, not as a doctrine about the nature of Ch III courts or the characteristics of Ch III courts that are essential to the institutional integrity of those courts, and not in answer to a question about the scope of State legislative power. This Court in Fardon did not treat the Lim principle as relevant to the constitutional validity of the DPSO Act, despite an argument (made by the Attorney-General for the Commonwealth) that the DPSO Act would have been valid if enacted as Commonwealth legislation (thereby testing the Act against the Lim principle) and despite an argument (made by the appellant in that case) that the Act was invalid as a Bill of Pains and Penalties, because it inflicted punishment without a judicial trial506. Rather, the majority Justices focussed squarely on whether the DPSO Act impaired the institutional integrity of the QSC in terms of its independence and impartiality. In this regard, the judgments are consistent with the well-established separation between the Kable principle (which relevantly defines limits upon State 503 Benbrika (2021) 95 ALJR 166 at 181 [36]; 388 ALR 1 at 14. 504 In the sense of that phrase as used in Lim (1992) 176 CLR 1 at 27. 505 Lim (1992) 176 CLR 1 at 27-29. 506 Fardon (2004) 223 CLR 575 at 578, 580. Gleeson legislative power) and the doctrine of the separation of Commonwealth judicial power (which relevantly limits Commonwealth legislative power)507. The common conclusion of the majority Justices in Fardon was that the DPSO Act did not impair the institutional integrity of the QSC, and so did not transgress limits imposed by Ch III of the Constitution. Further, while it is true to say that the legislation in Fardon was directed to a particular class of sexual offender, none of the majority Justices in Fardon reasoned by reference to the special nature of sexual offences, or the exceptional character of the DPSO Act as a scheme tailored to address specific community fears about sexual crimes, or its limited operation, because the legislation was directed to what might be thought to be a very small number of offenders. Nor did their Honours focus attention upon the nature of the risk assessment that the QSC was required to undertake, beyond observing that it involved an evaluative exercise that the Court was well equipped to undertake508. Their Honours did not express concerns about the "borrowing of judicial services to do the work of the legislature or the executive"509, or about the potential "blur[ring]" of institutional boundaries510. Although not explicitly addressed to the application of the Lim principle, there are several passages in the majority judgments in Fardon that are inconsistent with the Lim principle as a test for whether State legislation offends the institutional integrity of a State court. Gleeson CJ perceived "the case of the prisoner who represents a serious danger to the community upon release" as an "almost intractable problem" for the criminal justice system, but one which may warrant a legislative response which considers "the protection of the safety of citizens in light of the rights and freedoms accepted as fundamental in our society"511. The Chief Justice cited, with apparent approval, Deane J's observation in Veen v The Queen [No 2] that512: 507 Condon v Pompano Pty Ltd (2013) 252 CLR 38 at 53 [22], 90 [125]; K-Generation Pty Ltd v Liquor Licensing Court (2009) 237 CLR 501 at 529 [84]; Fardon (2004) 223 CLR 575 at 598 [36], 614 [86], 655-656 [219]. 508 Fardon (2004) 223 CLR 575 at 592 [19], 593 [22], 597 [34], 657 [225]. 509 cf Vella (2019) 269 CLR 219 at 277 [145]. 510 cf Vella (2019) 269 CLR 219 at 290-291 [180]. 511 Fardon (2004) 223 CLR 575 at 589 [12], 590 [14]. 512 Fardon (2004) 223 CLR 575 at 588 [9], quoting Veen v The Queen [No 2] (1988) 164 CLR 465 at 495. Gleeson "[T]he protection of the community obviously warrants the introduction of some acceptable statutory system of preventive restraint to deal with the case of a person who has been convicted of violent crime and who, while not legally insane, might represent a grave threat to the safety of other people by reason of mental abnormality if he were to be released as a matter of course at the end of what represents a proper punitive sentence". After referring to various aspects of the legislation, including that it did not confer functions which were "incompatible" with the proper discharge of judicial responsibilities or with the exercise of judicial power513, the Chief Justice suggested that, by conferring the relevant powers upon the QSC, "the Queensland Parliament was attempting to ensure that the powers would be exercised independently, impartially and judicially"514. McHugh J, who considered the functions conferred upon the QSC to involve the exercise of judicial power515, stated that it would be a "serious constitutional mistake" to think that either Kable or the Constitution assimilates State courts or their judges and officers with federal courts or their judges and officers. Rather, his Honour said: "Chapter III of the Constitution, which provides for the exercise of federal judicial power, invalidates State legislation that purports to invest jurisdiction and powers in State courts only in very limited circumstances"516. Subject to the Kable principle, "when the federal Parliament invests State courts with federal jurisdiction, it must take them as it finds them"517. Further, McHugh J considered, State legislative power to make laws "for the peace welfare and good government" of the State is "as plenary as that of the Imperial Parliament" and would authorise a law requiring "breaches of the criminal law to be determined by non-judicial tribunals", that is, in a manner inconsistent with the Lim principle518. His Honour concluded that519: "The bare fact that particular State legislation invests a State court with powers that are or jurisdiction that is repugnant to the traditional judicial process will seldom, if ever, compromise the institutional integrity of that 513 Fardon (2004) 223 CLR 575 at 592 [19]. 514 Fardon (2004) 223 CLR 575 at 592 [20]. 515 Fardon (2004) 223 CLR 575 at 596 [34]. 516 Fardon (2004) 223 CLR 575 at 598 [37]. 517 Fardon (2004) 223 CLR 575 at 599 [37]. 518 Fardon (2004) 223 CLR 575 at 600 [40]. 519 Fardon (2004) 223 CLR 575 at 600-601 [41]. Gleeson court to the extent that it affects that court's capacity to exercise federal jurisdiction impartially and according to federal law. ... State legislation may require State courts to exercise powers and take away substantive rights on grounds that judges think are foolish, unwise or even patently unjust. Nevertheless, it does not follow that, because State legislation requires State courts to make orders that could not be countenanced in a society with a Bill of Rights, the institutional integrity of those courts is compromised." Gummow J was the only Justice to address the argument that the DPSO Act could have been validly enacted as Commonwealth law. His Honour rejected that argument but, in doing so, reformulated the Lim principle in terms that, "the 'exceptional cases' aside, the involuntary detention of a citizen in custody by the [s]tate is permissible only as a consequential step in the adjudication of criminal guilt of that citizen for past acts"520. As his Honour put it, "[t]he vice for a Ch III court and for the federal laws postulated ... would be in the nature of the outcome, not the means by which it was obtained"521. Notably, Gummow J did not extrapolate from this reformulation to a conclusion that the DPSO Act was invalid. His Honour (with Hayne J here agreeing) considered that the application of the Kable principle focussed attention on the judicial process under the impugned legislation and whether elements of that process "may ameliorate what otherwise would be the sapping of the institutional integrity of the Supreme Court"522. Gummow J did not express any doubt about the impact of the DPSO Act upon either the independence or the impartiality of the QSC. Ultimately, his Honour considered that the nature of the "factum" selected for the attraction of the Act (being a "prisoner"), the subjection of orders to annual "review", the judicial nature of the process with respect to applications, and the Court's independence in the performance of its functions under the Act, combined to support the conclusion that invalidity was not established523. Hayne J (who otherwise agreed with Gummow J) reserved his opinion about whether federal legislation along the lines of the DPSO Act would be invalid524. His Honour explicitly adverted to the problem that preventive detention "is at odds with identifying the central constitutional conception of detention as a 520 Fardon (2004) 223 CLR 575 at 612 [80]. 521 Fardon (2004) 223 CLR 575 at 614 [85]. 522 Fardon (2004) 223 CLR 575 at 614 [90]. 523 Fardon (2004) 223 CLR 575 at 621 [114]-[117]. 524 Fardon (2004) 223 CLR 575 at 647 [196]. Gleeson consequence of judicial determination of engagement in past conduct"525. However, his Honour saw this as an issue about judicial power for the reason that legislation requiring a federal court to make an order for preventive detention "would purport to confer a non-judicial function on that court"526. For their part, Callinan and Heydon JJ stated527: "Not everything by way of decision-making denied to a federal judge is denied to a judge of a State. So long as the State court, in applying legislation, is not called upon to act and decide, effectively as the alter ego of the legislature or the executive, so long as it is to undertake a genuine adjudicative process and so long as its integrity and independence as a court are not compromised, then the legislation in question will not infringe Ch III of the Constitution." Significance of the Lim principle for the Kable principle Although in Fardon Gummow J noted that the Lim principle had informed several of the judgments in Kable (including his own)528, there is reason to doubt its significance for the principle stated in Kable, at least for the purpose of a conclusion that the Lim principle is germane to the institutional integrity of a State court. In Kable, his Honour considered that the requirement of the Community Protection Act 1994 (NSW) ("the NSW Act") that the Supreme Court of New South Wales ("NSWSC") "inflict punishment without any anterior finding of criminal guilt by application of the law to past events, being the facts as found" was "repugnant to judicial process"529. However, his Honour was alone in apparently treating that feature of the NSW Act as a sufficient basis for the challenged legislation's incompatibility with the institutional integrity of the NSWSC530. The other Justice who referred explicitly to the Lim principle in Kable was Toohey J, but his Honour reasoned materially differently by rejecting the NSW Act, including because preventive detention under the Act: was not an incident of the exclusively judicial function of adjudging and punishing criminal guilt; was 525 Fardon (2004) 223 CLR 575 at 648 [197]. 526 Fardon (2004) 223 CLR 575 at 648 [197]. 527 Fardon (2004) 223 CLR 575 at 656 [219]. 528 Fardon (2004) 223 CLR 575 at 611 [77]. 529 Kable (1996) 189 CLR 51 at 134. 530 Compare Kable (1996) 189 CLR 51 at 106-107, 121-122. Gleeson not part of a system of preventive detention with appropriate safeguards, consequent upon or ancillary to the adjudication of guilt; and did not fall within the "exceptional cases" mentioned in Lim, directly or by analogy531. These reasons, and in particular his Honour's evident acceptance of the possibility of "appropriate safeguards", do not indicate that Toohey J would have accepted Gummow J's reformulation of the Lim principle without qualification. Gummow J also noted that the Lim principle was "reflected" in the reasons of Gaudron J and McHugh J in Kable532. But neither Justice can be taken to have expressed any general view that State legislation providing for court-ordered preventive detention after sentence, directed to a class of offenders and for a purpose of community protection, was likely to be invalid for repugnancy to the judicial process. While Gaudron J considered that the process provided for by the NSW Act was the "antithesis of the judicial process", her Honour emphasised the Act's provision for formation of an opinion as to the probability of future offending "on the basis of material which does not necessarily constitute evidence admissible in legal proceedings"533, and concluded that public confidence could not be maintained in a judicial system not predicated on equal justice – an observation directed to the ad hominem nature of the NSW Act534. In Kable, McHugh J had stated that "there is no reason to doubt the authority of the State to make general laws for preventive detention when those laws operate in accordance with the ordinary judicial processes of the State courts"535. In Fardon, McHugh J explicitly deprecated the phrase "repugnant to the judicial process" as tending to invite error536. McHugh J concluded that repugnancy to the traditional judicial process "will seldom, if ever, compromise the institutional integrity of [a State court] to the extent that it affects that court's capacity to exercise federal jurisdiction impartially and according to federal law"537. 531 Kable (1996) 189 CLR 51 at 98. 532 Fardon (2004) 223 CLR 575 at 611 [77]. 533 Kable (1996) 189 CLR 51 at 106. 534 Kable (1996) 189 CLR 51 at 107. 535 Kable (1996) 189 CLR 51 at 121. 536 Fardon (2004) 223 CLR 575 at 601 [42]. 537 Fardon (2004) 223 CLR 575 at 601 [41]. Gleeson Preventive detention for robbery If it were necessary to test the inclusion of robbery in the HRSO Act against the Lim principle, and if that required demonstration that the relevant law was directed to a grave and specific harm, I would consider that law passes both hurdles. Section 392 of the Criminal Code (WA) creates an offence of robbery in the following terms: "Robbery A person who steals a thing and, immediately before or at the time of or immediately after doing so, uses or threatens to use violence to any person or property in order – to obtain the thing stolen; or to prevent or overcome resistance to its being stolen, is guilty of a crime and is liable – if immediately before or at or immediately after the commission of the offence the offender is armed with any dangerous or offensive weapon or instrument or pretends to be so armed, to imprisonment for life; or if the offence is committed in circumstances of aggravation, to imprisonment for 20 years; or in any other case, to imprisonment for 14 years." The terms of s 392 cover a wide range of offending including conduct that may not cause significant harm to any individual. Potential harms that may be inflicted by an offence against s 392 will necessarily vary according to the particular circumstances of the offence. However, it is reasonable to assume that, by fixing a maximum penalty of life imprisonment in some circumstances, the legislature apprehended that the harm inflicted by a robbery may be very grave. A court is not well placed to compare the gravity of potential harms resulting from categories of offences beyond noting the maximum penalties fixed by the legislature. If the institutional integrity of a court may be compromised by applying a law such as the HRSO Act on the basis that the harm sought to be addressed by the law is not sufficiently grave, then, having regard to the availability of life imprisonment as a maximum penalty, I am not persuaded that the institutional integrity of the WASC may be compromised by the inclusion of robbery as a "serious offence" in the HRSO Act on that account. Gleeson The HRSO Act as it applies to the Western Australian offence of robbery seeks to balance the liberty interests of both a "high risk serious offender" and those members of the community who may be harmed as a result of an "unacceptable risk that the offender will commit a serious offence"538, particularly, although not necessarily, the offence of robbery. I respectfully agree with the observation of the plurality in Benbrika that Gummow J's analysis in Fardon did not explain why an appropriately tailored scheme for protection of the community from harm resulting from particular forms of criminal activity is incapable of coming within an "exceptional case" to be identified by analogy to those "exceptional cases" identified in Lim539. To my mind, such detention is capable of being seen as analogous to involuntary detention in cases of infectious disease which is necessarily directed to community protection540. Involuntary detention in cases of mental illness may also afford an analogy where the detention is not solely for the protection of the detainee. Judicial independence and impartiality under the HRSO Act On its face, there is no aspect of the HRSO Act that compromises the independence of the WASC from either the legislative or executive branches of the Western Australian government, or that compromises the Court's impartiality. To the contrary, and similarly to the DPSO Act, the HRSO Act requires the Western Australian executive to make an application to the Court, in accordance with the legislation. The application is then assessed by the Court in accordance with the legislation. As is illustrative of the independent functions of executive and judiciary under the HRSO Act, in this case the State of Western Australia applied ultimately for a supervision order. That application was rejected by the Court, which was not satisfied that it was necessary to make a restriction order in relation to the appellant to ensure adequate protection of the community against an unacceptable risk that the appellant would commit a serious offence. Conclusion The appeal should be dismissed. 538 HRSO Act, s 7(1). 539 Benbrika (2021) 95 ALJR 166 at 180-181 [32]-[33]; 388 ALR 1 at 13-14. 540 Benbrika (2021) 95 ALJR 166 at 180 [32]; 388 ALR 1 at 13; see also Kruger (1997) 190 CLR 1 at 110.

HIGH COURT OF AUSTRALIA WINGFOOT AUSTRALIA PARTNERS PTY LTD & ANOR APPELLANTS AND EYUP KOCAK & ORS RESPONDENTS Wingfoot Australia Partners Pty Ltd v Kocak [2013] HCA 43 30 October 2013 ORDER Appeal allowed. Set aside orders 1, 2 and 3 of the Court of Appeal of the Supreme Court of Victoria made on 23 October 2012 and, in their place, order that the appeal to that Court be dismissed. The appellants pay the first respondent's costs of this appeal and the application for special leave to appeal. On appeal from the Supreme Court of Victoria Representation M F Wheelahan SC with M C Norton for the appellants (instructed by Thomsons Lawyers) A G Uren QC with A D B Ingram for the first respondent (instructed by Slater & Gordon) A S Pillay for the second and third respondents (instructed by Moray & Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Wingfoot Australia Partners Pty Ltd v Kocak Administrative law – Availability of certiorari – Legal consequences of Medical Panel's opinion under Accident Compensation Act 1985 (Vic) – Where separate proceedings for common law damages and statutory compensation – Whether Medical Panel's opinion on medical questions referred to it in one proceeding required to be adopted and applied in other proceeding – Whether issue estoppel – Whether order in nature of certiorari available. Administrative law – Statutory obligation to give written statement of reasons – Standard of reasons required – Whether error of law on the face of the record. Words and phrases – "certiorari", "error of law", "for the purposes of determining any question or matter", "Medical Panel", "medical question", "reasons", "written statement of reasons". Accident Compensation Act 1985 (Vic), s 68. Administrative Law Act 1978 (Vic), ss 8, 10. FRENCH CJ, CRENNAN, BELL, GAGELER AND KEANE JJ. This appeal raises questions about s 68 of the Accident Compensation Act 1985 (Vic) ("the Act"), under which a Medical Panel must give its opinion on a medical question referred to it and a written statement of its reasons for that opinion. What is the legal effect of an opinion of a Medical Panel? What standard is required of a written statement of reasons? Can the legal effect of the opinion be quashed by an order in the nature of certiorari for breach of that standard? The Act The Act has been amended frequently and extensively. Leaving to one side the minor effect of some transitional provisions, the form of the Act relevant to the appeal is the form in which it existed as at 5 April 2010 1. It is convenient to refer to the Act in that form in the present tense. Part IV of the Act deals with the payment of statutory compensation. It confers on an injured worker an entitlement to compensation in accordance with the Act2, prescribes the benefits to which a worker is so entitled to include (amongst other things) the payment of medical expenses3, and imposes obligations on the Victorian WorkCover Authority ("the Authority"), an employer or a self-insurer to meet that entitlement4. It sets out procedures by which a claim for statutory compensation is to be made by a worker, ordinarily to the employer5, and by which a claim so made is to be assessed (so as to be either accepted or rejected), ordinarily by the Authority or a self-insurer6. Divisions 8A and 9 of Pt IV deal with common law damages. An injured worker who is or may be entitled to compensation in respect of an injury which arose between 12 November 1997 and 19 October 1999 is wholly prevented from 1 Version No 159D. 2 Section 82. 3 Section 99. 4 Sections 20(1)(b), 125A(2) and (3), 127(1) and 143. 5 Section 103(4A). 6 Sections 20(1)(aa) and 109. Crennan Bell recovering common law damages in respect of that injury7. An injured worker who is or may be entitled to compensation in respect of an injury which arose on or after 20 October 19998, or before 12 November 19979, is prevented from recovering common law damages in respect of that injury save where certain threshold conditions are met. Those conditions include that a court, being satisfied on the balance of probabilities that the injury is a serious injury, gives leave to bring proceedings10. Part III of the Act deals with the resolution of disputes. Division 1 confers jurisdiction on the County Court to "inquire into, hear and determine any question or matter under [the Act] arising … out of" any decision of the Authority, an employer or a self-insurer (and also out of any recommendation or direction of a Conciliation Officer)11. It confers like jurisdiction on the Magistrates' Court12. Division 2 provides for the conciliation, by a Conciliation Officer appointed under Div 1A, of a dispute between a worker and the Authority, an employer or a self-insurer about a claim for compensation. Division 3 of Pt III provides for the establishment and operation of Medical Panels. A Medical Panel is to be comprised of medical practitioners drawn from a list of members appointed by the Governor in Council and is to be constituted for a particular case in such number as one of those members, appointed by the Minister to be Convenor, considers appropriate13. The Medical Panel is "to give its opinion on any medical question in respect of injuries arising out of, or in the course of or due to the nature of employment ... referred by a Conciliation Officer or the County Court or the Authority or a self-insurer"14, and 7 Section 134A(1). 8 Section 134AB. 9 Section 135A. 10 Sections 134AB(16)(b) and (19)(a) and 135A(4)(b) and (6). 11 Section 39. 12 Section 43. 13 Section 63(2), (3) and (4). 14 Section 67(1). Crennan Bell "must give its opinion on a medical question in accordance with [that] Division"15. What amounts to a medical question is the subject of elaborate and exhaustive definition. It is relevant to note that a medical question encompasses a question as to: "the nature of a worker's medical condition relevant to an injury or alleged injury"16; "whether a worker's employment was in fact, or could possibly have been, a significant contributing factor to an injury or alleged injury, or to a similar injury"17; or "the extent to which any physical or mental condition … results from or is materially contributed to by the injury"18. It is relevant also to note that a medical question encompasses a question prescribed to be a medical question in respect of an application for leave to bring proceedings for common law damages in respect of an injury which arose on or after 20 October 199919, as well as a question determined to be a medical question by a court hearing such an application20. The Act makes provision for a medical question to be referred to a Medical Panel in a number of distinct situations. First, the County Court or the Magistrates' Court exercising jurisdiction under Pt III has power to refer on its own motion a medical question arising in the proceeding before it21, and ordinarily has a duty under s 45(1)(b) to refer such a question if requested by a party to the proceeding. Secondly, a court hearing an application for leave to bring proceedings for common law damages in respect of an injury which arose on or after 20 October 1999 has power to refer on its own motion a medical question arising in the application before it22, and ordinarily has a duty to refer 15 Section 67(1A). 16 Section 5(1), "medical question", par (a). 17 Section 5(1), "medical question", par (b). 18 Section 5(1), "medical question", par (ca). 19 Section 5(1), "medical question", par (h). 20 Section 5(1), "medical question", par (i). 21 Section 45(1)(a). 22 Section 45(1A)(a). Crennan Bell such a question if requested by a party to the application 23. There is no similar power or duty for a court to refer a medical question arising in an application for leave to bring proceedings for common law damages in respect of an injury which arose before 12 November 1997. Thirdly, a Conciliation Officer has a discretion to refer a medical question under Div 2 of Pt III24, and has a duty to do so if the Authority or a self-insurer applies and the worker consents25 or if the question arises in a dispute relating to a continuation of weekly payments after a second entitlement period26. Fourthly, in the assessment of a claim for non- economic loss, the Authority or a self-insurer must refer a disputed question as to the degree of impairment or total loss in respect of the injuries claimed27. Finally, in the assessment of a claim for industrial deafness, the Authority, a self- insurer or a court must refer a disputed question of the total percentage of hearing loss28. In each case, the person or body referring the medical question to a Medical Panel must specify the injury or alleged injury to which the medical question relates29. The person or body must also specify those facts relevant to the medical question that have been agreed and those questions of fact that are in dispute30, and submit to the Medical Panel copies of all documents relating to the medical question in the possession of that person or body31. 23 Section 45(1A)(b). 24 Section 56(6). 25 Section 55A. 26 Section 55AA. 27 Section 104B(9). 28 Section 89(3D). 29 Section 65(6A)(a). 30 Section 65(6A)(b). 31 Section 65(6B). Crennan Bell Section 68 of the Act provides: "(1) A Medical Panel must form its opinion on a medical question referred to it within 60 days after the reference is made or such longer period as is agreed by the Conciliation Officer, the County Court, the Authority or self-insurer. The Medical Panel to whom a medical question is so referred must give a certificate as to its opinion and a written statement of reasons for that opinion. (3) Within seven days after forming its opinion on a medical question referred to it, a Medical Panel must give the relevant Conciliation Officer or the County Court or the Authority or self-insurer its written opinion and a written statement of reasons for that opinion. For the purposes of determining any question or matter, the opinion of a Medical Panel on a medical question referred to the Medical Panel is to be adopted and applied by any court, body or person and must be accepted as final and conclusive by any court, body or person irrespective of who referred the medical question to the Medical Panel or when the medical question was referred." A Medical Panel "is not bound by rules or practices as to evidence, but may inform itself on any matter relating to a reference in any manner it thinks fit"32 and "must act informally, without regard to technicalities or legal forms and as speedily as a proper consideration of the reference allows"33. The Panel may ask the worker to meet with the Panel and answer questions, to supply copies of all documents in the possession of the worker which relate to the medical question to the Panel, and to submit to a medical examination by the Panel or by a member of the Panel34. An attendance of the worker before the Medical Panel is ordinarily to be in private35. 32 Section 65(1). 33 Section 65(2). 34 Section 65(5). 35 Section 65(4). Crennan Bell The Minister has power, as yet unexercised, to issue guidelines as to the procedures of Medical Panels for the purpose of ensuring procedural fairness and facilitating proper administration36. The Convenor also has power to give directions as to the arrangement of the business of Panels37. That power has been exercised to establish procedures which, amongst other things, contemplate that a party to the referral may choose to submit written submissions or other documents38. Facts The first respondent ("the Worker") was employed by the appellants ("the Employer") when he suffered an injury to his neck at work on 16 October 1996. The extent of that injury and its present effects, if any, are contentious. In May 2009, after experiencing more significant symptoms in his neck than previously, the Worker made a claim for statutory compensation in respect of the injury under Pt IV of the Act. The claim was rejected in May 2009. A subsequent attempt at conciliation was unsuccessful. In November 2009, the Worker commenced two proceedings in the County Court of Victoria relating to that injury to his neck: one seeking leave to bring proceedings for common law damages in respect of the injury ("the serious injury application"); the other seeking a declaration of entitlement in respect of the injury under Pt IV of the Act ("the statutory compensation application"). The statutory compensation application was transferred to the Magistrates' Court, which, at the Employer's request, referred three medical questions to a Medical Panel for determination under s 45(1)(b) of the Act. The Medical Panel constituted for the purpose of opining on those questions comprised a musculoskeletal physician, a neurosurgeon and an orthopaedic surgeon. The Panel met with the Worker, took a medical history from him and conducted a physical examination of him. The Panel viewed an x-ray and an MRI scan of his cervical spine. The Worker provided to the Panel a number of medical reports 36 Section 65(8). 37 Section 65(7). 38 "Convenor's Directions as to the Arrangement of Business and as to the Procedures of Medical Panels", issued 1 March 2008, at [29]. Crennan Bell prepared by his own doctors, who included two neurosurgeons. The solicitors acting for the Worker also made written submissions to the Panel. The Medical Panel in due course gave to the Magistrates' Court a certificate as to its opinion on the medical questions referred and a written statement of reasons for that opinion. The certificate recorded the medical questions referred by the Magistrates' Court and the answers given by the Medical Panel as follows: "Question 1. Answer: Question 2. Answer: What is the nature of the [Worker's] neck/cervical spine condition relevant to the alleged neck/cervical spine injury? The Panel is of the opinion that the [Worker] is suffering from chronic mechanical left cervical spine dysfunction with referred pain to the left shoulder girdle and upper limb, in the absence of objective signs of radiculopathy, on a background of radiological changes of multilevel degeneration and a left C5-6 disc prolapse, but this condition is not relevant to any alleged neck/cervical spine injury. Was the [Worker's] employment with the [Employer] on 16 October 1996 a significant contributing factor to his alleged neck/cervical spine injury? The Panel is of the opinion that the [Worker's] employment with the [Employer] on 16 October 1996 was in fact a significant contributing factor to a now resolved soft tissue injury to the neck, but was not in fact and could not possibly have been a significant contributing recurrence, aggravation, acceleration, exacerbation or deterioration of any pre-existing neck or cervical spine condition, in any way. to any claimed factor Question 3. What is the extent to which any neck/cervical spine condition results from or is materially contributed to by the [Worker's] alleged neck/cervical spine injury on 16 October 1996? Crennan Bell Answer: The Panel is of the opinion that the [Worker's] current neck/cervical spine condition does not result from, nor is it materially contributed to by the [Worker's] alleged neck/cervical spine injury of 16 October 1996." The Medical Panel's written statement of reasons for that opinion was a six page document, to some of the detail of which it will be appropriate to return. After receiving the certificate of the opinion of the Medical Panel, the Magistrates' Court made orders by consent. The orders were expressed to "adopt" and "apply" the opinion and to dismiss the statutory compensation application. The serious injury application subsequently came on for hearing in the County Court. The Employer foreshadowed a contention that the County Court was bound by the opinion of the Medical Panel, either by virtue of s 68(4) of the Act or on the basis that the orders made by consent in the Magistrates' Court gave rise to an issue estoppel which precluded the Worker from arguing that the present condition of his neck for which he sought common law damages was related to the injury he suffered on 16 October 1996. The serious injury application was adjourned and remains pending in the County Court. Proceedings for certiorari The Employer's foreshadowed contention in the County Court provoked the Worker to apply to the Supreme Court of Victoria for an order, in the nature of certiorari, quashing the opinion of the Medical Panel. The grounds of the application included that the Medical Panel failed to give adequate reasons for the opinion. The application was dismissed by the primary judge (Cavanough J) on the basis that the Worker had not established any of the grounds set out in the The Court of Appeal (Nettle and Osborn JJA and Davies AJA) allowed an appeal by the Worker and made the order sought, in the nature of certiorari, quashing the opinion of the Medical Panel40. The Court of Appeal concluded: that the reasons given by the Medical Panel for the opinion were inadequate; that the Panel's failure to give adequate reasons constituted an error of law on the face 39 Kocak v Wingfoot Australia Partners Pty Ltd [2011] VSC 285. 40 Kocak v Wingfoot Australia Partners Pty Ltd (2012) 295 ALR 730. Crennan Bell of the record and certiorari was an available remedy in those circumstances; and that there was utility in granting certiorari because the Medical Panel's opinion was to be adopted and applied by the County Court in the serious injury application by force of s 68(4) of the Act and because the Magistrates' Court order adopting and applying the opinion was capable of creating an issue estoppel in the serious injury application. The Employer's appeal, by special leave, to this Court involves a challenge by one or both of the Worker and the Employer to each of those conclusions of the Court of Appeal. It is convenient to consider the conclusions about the availability and utility of certiorari before considering the conclusion about the adequacy of the reasons given by the Medical Panel. Availability and utility of certiorari The jurisdiction of the Supreme Court to make an order in the nature of certiorari is an aspect of its jurisdiction as "the superior Court of Victoria"41. The exercise of that jurisdiction is regulated by rules of the Supreme Court which require that it be exercised only by way of judgment or order42. The function of an order in the nature of certiorari is to remove the legal consequences or purported legal consequences of an exercise or purported exercise of power. Thus, an order in the nature of certiorari is available only in respect of an exercise or purported exercise of power which has, at the date of order, an "apparent legal effect"43. An order in the nature of certiorari is not available in respect of an exercise or purported exercise of power the legal effect or purported legal effect of which is moot or spent. An order in the nature of certiorari in those circumstances would be not simply inutile; it would be unavailable. Jurisdictional error constitutes one basis on which the Supreme Court can make an order in the nature of certiorari to remove the purported legal consequences of a purported exercise of power under a State statute. That basis for the Supreme Court making an order in the nature of certiorari is entrenched 41 Section 85 of the Constitution Act 1975 (Vic). 42 Rule 56.01(1) of the Supreme Court (General Civil Procedure) Rules 2005 (Vic). 43 Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149 at 159; [1996] HCA 44. Crennan Bell by the Commonwealth Constitution44. Error of law on the face of the record constitutes a separate and distinct basis on which the Supreme Court can make an order in the nature of certiorari to remove the legal consequences or purported legal consequences of an exercise or purported exercise of power under a State statute45. That basis for the Supreme Court making an order in the nature of certiorari is not entrenched by the Commonwealth Constitution; its application can be excluded by statute46. Where it is not excluded, however, it applies independently of jurisdictional error. That is to say, where error of law on the face of the record is not excluded by statute as a basis for making an order in the nature of certiorari, and where an error of law on the face of the record is found, an order in the nature of certiorari can be made so as to remove the legal consequences or purported legal consequences of an exercise or purported exercise of power irrespective of whether the error of law also constitutes a breach of a condition of the valid exercise of that power. Recognition of the availability of certiorari for error of law on the face of the record, independently of jurisdictional error, goes much of the way towards meeting the Employer's challenge to the conclusion of the Court of Appeal that certiorari is available to quash an opinion of a Medical Panel where the Medical Panel has given reasons for that opinion which are inadequate to comply with its duty under s 68(2) of the Act. Not only is error of law on the face of the record as a basis for making an order in the nature of certiorari quashing an opinion of the Medical Panel not excluded by statute, but the "record" of the opinion by reference to which such an error of law can be discerned has been expanded by statute to include whatever reasons the Medical Panel in fact gives for that opinion. Within the meaning of the Administrative Law Act 1978 (Vic) ("the Administrative Law Act"), a Medical Panel is a "tribunal" and the opinion of a Medical Panel on a medical question referred to it is a "decision"47. Section 10 of that Act provides: 44 Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 580-581 [98]; [2010] HCA 1. 45 Craig v South Australia (1995) 184 CLR 163 at 175-183; [1995] HCA 58. 46 Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 581 [100]. 47 Masters v McCubbery [1996] 1 VR 635. Crennan Bell "Any statement by a tribunal or inferior court whether made orally or in writing … of its reasons for a decision shall be taken to form part of the decision and accordingly to be incorporated in the record." The effect of s 10 is to make whatever reasons a Medical Panel in fact gives for its opinion on a medical question referred to it part of that opinion and part of the record of that opinion. An error of law manifest on the face of such reasons as a Medical Panel in fact gives for its opinion on a medical question referred to it is therefore an error of law on the face of the record of that opinion. A Medical Panel which in fact gives reasons that are inadequate to meet the standard required of a written statement of reasons under s 68(2) of the Act fails to comply with the legal duty imposed on it by s 68(2) and thereby makes an error of law. Inadequacy of reasons will therefore inevitably be an error of law on the face of the record of the opinion of a Medical Panel48, and certiorari will therefore be available to remove the legal consequences of an opinion for which non- compliant reasons have been given. Whether non-compliance by the Medical Panel with its duty to give a written statement of reasons also constitutes a breach of a condition of the valid performance of the duty imposed on it by s 68(1) and (2) of the Act to form, and to give a certificate as to, its opinion on a question referred to it is not to the point. That issue would only be determinative in an application to the Supreme Court for an order in the nature of certiorari to remove the purported legal consequences of a medical opinion on the basis of jurisdictional error49. In an application for an order in the nature of certiorari to remove the legal consequences or purported legal consequences of a medical opinion on the basis of error of law on the face of the record, the issue simply does not arise. The Court of Appeal was therefore correct to conclude that an order in the nature of certiorari is available to remove the legal consequences or purported legal consequences of an opinion in respect of which reasons given by a Medical Panel are inadequate to meet the standard required of a written statement of reasons under s 68(2) of the Act. 48 Cf Campbelltown City Council v Vegan (2006) 67 NSWLR 372 at 398-399 [129]- 49 Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme (2003) 216 CLR 212 at 226 [48], 227 [55]; [2003] HCA 56. Crennan Bell Because an order in the nature of certiorari to quash an opinion is limited to removing the legal consequences or purported legal consequences of an exercise or purported exercise of power, however, the Court of Appeal was also correct to ask a threshold question. That threshold question was whether the opinion of the Medical Panel, sought to be quashed by certiorari in the application made to the Supreme Court by the Worker, had any continuing legal consequences, given that the opinion was on medical questions arising in the statutory compensation application, which by then had been dismissed. The Court of Appeal's affirmative answer to that threshold question was based on a conclusion that the opinion of the Medical Panel had two legal consequences for the continuing serious injury application. One was that the County Court would be compelled by s 68(4) of the Act to adopt and apply the opinion in the determination of the serious injury application. The other was that the adoption and application of the opinion by the Magistrates' Court when dismissing the statutory compensation application created an issue estoppel binding the parties in the conduct of the serious injury application. The Employer and the Worker challenge the Court of Appeal's conclusion that the opinion of the Medical Panel had those two legal consequences for the serious injury application. Both challenge the conclusion as to the first consequence. The Worker alone challenges the conclusion as to the second consequence. To address those challenges, it is necessary to return to the explanation of the ambit and effect of s 68(4) of the Act given by the High Court in Maurice Blackburn Cashman v Brown50. The question in that case was whether an employer was precluded, by s 68(4) of the Act or by issue estoppel, from disputing in a common law action for damages an opinion previously given by a Medical Panel on a question referred to it in the course of the assessment of a claim for non-economic loss as to the degree of impairment in respect of the injuries claimed. The answer was "no". As to s 68(4) of the Act, the Court said51: "At first sight, s 68(4) of the Act is cast in terms of very general application. Reference is twice made to 'any court, body or person'. But the sub-section is introduced by the expression '[f]or the purposes of 50 (2011) 242 CLR 647; [2011] HCA 22. 51 (2011) 242 CLR 647 at 660 [34]-[35] (footnote omitted). Crennan Bell determining any question or matter'. Those words should not be given a literal meaning. The meaning of the phrase that best accords with its context, and which should be adopted, is 'for the purposes of determining any question or matter arising under or for the purposes of the Act'. Those are the purposes for which the opinion of a Medical Panel on a medical question is to be adopted and applied and accepted as final and conclusive. Once that step is taken, it is then clear that s 68(4) does not speak at all to the litigation of questions or matters that are not questions or matters arising under or for the purposes of the Act. More particularly, s 68(4) does not speak at all to an action for damages brought by a worker against an employer." (emphasis in original) As to issue estoppel, the Court said52: "The conclusions reached with respect to the construction and application of s 68(4) entail the further conclusion that no issue estoppel arises out of the opinions expressed by a Medical Panel … in an action later brought by a worker against the worker's employer. It is a necessary condition for an issue estoppel to exist between parties that the decision from which the estoppel arises was a final decision. Where, as here, the statute establishing the body in question prescribes that its decisions are final for the purposes of that Act, no greater ambit of finality should be attributed to its decisions than the Act itself marks out. Thus no estoppel arises because the quality of 'finality' which the Act gives to an opinion expressed by a Medical Panel ... is finality for the purposes of determining any question or matter arising under or for the purposes of the Act. No wider finality should then be ascribed to a Panel's opinion." The Court of Appeal reached its conclusion that the County Court would be compelled by s 68(4) of the Act to adopt and apply the opinion of the Medical Panel because it considered itself bound by the reasoning in the first of those quoted passages in Brown to hold that an opinion of a Medical Panel on a medical question referred to it must thereafter be adopted and applied for the purposes of determining all questions or matters arising under or for the purposes 52 (2011) 242 CLR 647 at 662 [39]-[40] (footnote omitted). Crennan Bell of the Act. An earlier decision of the Court of Appeal, Pope v WS Walker & Sons Pty Ltd53, is to the contrary. The correctness of Pope was not in issue in Brown, and is supported in the present appeal by both the Employer and the Worker. The Court of Appeal's reasoning in Pope highlights the potential for injustice in the outworking of the construction to which the Court of Appeal felt compelled54, as well as the lack of support for that construction in legislative history55. The passage in Brown should not be interpreted as having overruled The correct construction of s 68(4) of the Act, consistent with Pope and with Brown, is to read the word "any" in the introductory expression "[f]or the purposes of determining any question or matter" as referring to "a question or matter" not "all questions and matters". In respect of a particular opinion of a Medical Panel on a medical question referred to it, formed under s 68(1) and certified under s 68(2), the question or matter to which s 68(4) refers is the question or matter in which the medical question arose and in respect of which the medical question was referred to the Medical Panel. What s 68(4) of the Act on that construction requires is that an opinion of a Medical Panel on a medical question referred to it must thereafter be adopted and applied for the purposes of determining the question or matter, arising under or for the purposes of the Act, in which the medical question arose and in respect of which the medical question was referred to the Medical Panel. What s 68(4) does not require is that the opinion must thereafter be adopted and applied for the purposes of determining some other question or matter. The operation of s 68(4) of the Act in the present case was therefore to require the opinion given by the Medical Panel on the medical questions referred to it in the statutory compensation application to be adopted and applied by all courts and persons in the determination of the question or matter the subject of the statutory compensation application. That question or matter comprised the controversy between the parties to the statutory compensation application about the Worker's entitlement to the statutory compensation he claimed under Pt IV of the Act, and was brought to a conclusion when the statutory compensation application was dismissed. Section 68(4) did not have, and does not have, the 54 (2006) 14 VR 435 at 445 [40]. 55 (2006) 14 VR 435 at 438-445 [12]-[41]. Crennan Bell further effect of requiring the opinion given on the medical questions referred in the statutory compensation application to be adopted and applied if and to the extent that the same medical question may arise in the determination of the question or matter the subject of the serious injury application. That quite distinct question or matter, which remains unresolved, comprises the controversy between the parties to that application as to whether the Worker should have leave to bring common law proceedings. That being the limited operation of s 68(4) of the Act, the second of the legal consequences for the serious injury application identified by the Court of Appeal cannot arise for the reasons set out in the second of the quoted passages in Brown. Section 68(4) provides an exhaustive statutory measure of the extent to which the opinion of a Medical Panel on a medical question referred to it is to be adopted and applied and is to be accepted as final and conclusive. The adoption and application of a medical opinion as required by s 68(4) cannot create an estoppel giving a greater measure of finality to a medical opinion than that provided by s 68(4) itself. The Magistrates' Court's adoption and application of the opinion when dismissing the statutory compensation application therefore created no issue estoppel binding the parties in the conduct of the serious injury application. The answer to the threshold question properly asked by the Court of Appeal is that the opinion of the Medical Panel sought to be quashed by an order in the nature of certiorari had no continuing legal consequences. The only legal effect of the opinion was that given to it by s 68(4) of the Act. That legal effect was spent when the question or matter, in respect of which the medical question was referred to the Medical Panel, was brought to a conclusion by the order The Employer's dismissing foreshadowed reliance on the opinion having legal effect in the serious injury application would be of no avail. statutory compensation application. the The order in the nature of certiorari made by the Court of Appeal was not available to quash the opinion of the Medical Panel because that opinion had no continuing legal consequence which could be removed by that order. Despite the irony of this being relied on by the Worker as respondent and eschewed by the Employer as appellant, that is a sufficient reason to allow the appeal. Adequacy of reasons The Employer's challenge to the Court of Appeal's conclusion that the reasons given by the Medical Panel were inadequate to meet the standard required of a written statement of reasons under s 68(2) of the Act raises a Crennan Bell question of public importance. Its resolution in the Employer's favour provides an independent reason for allowing the appeal. The starting point for considering the standard required of a written statement of reasons under s 68(2) of the Act is recognition that there is in Australia no free-standing common law duty to give reasons for making a statutory decision56. The duty of a Medical Panel to give reasons for its opinion on a question referred to it is no more and no less than the statutory duty imposed by s 68(2) itself. The content of that statutory duty defines the statutory standard that a written statement of reasons must meet to fulfil it. The standard required of a written statement of reasons in order to fulfil the duty imposed on a Medical Panel by s 68(2) of the Act falls therefore to be determined as an exercise in statutory construction. In the absence of express statutory prescription, that standard can be determined only by a process of implication. General observations, drawn from cases decided in other statutory contexts and from academic writing, about functions served by the provision of reasons for making administrative decisions are here of limited utility. To observe, for example, that the provision of reasons imposes intellectual discipline, engenders public confidence and contributes to a culture of justification, is to say little about the standard of reasons required of a particular decision-maker in a particular statutory context. The standard of reasons required even of courts making judicial decisions can vary markedly with the context. Two considerations are of particular significance in determining by implication the standard required of a written statement of reasons in order to fulfil the duty imposed on a Medical Panel by s 68(2) of the Act. One is the nature of the function performed by a Medical Panel in forming and giving an opinion on a medical question referred to it. The other is the objective, within the scheme of the Act, of requiring the Medical Panel to give a written statement of reasons for that opinion. The function of a Medical Panel is to form and to give its own opinion on the medical question referred for its opinion. In performing that function, the Medical Panel is doubtless obliged to observe procedural fairness, so as to give 56 Public Service Board of NSW v Osmond (1986) 159 CLR 656; [1986] HCA 7. Crennan Bell an opportunity for parties to the underlying question or matter who will be affected by the opinion to supply the Medical Panel with material which may be relevant to the formation of the opinion and to make submissions to the Medical Panel on the basis of that material. The material supplied may include the opinions of other medical practitioners, and submissions to the Medical Panel may seek to persuade the Medical Panel to adopt reasoning or conclusions expressed in those opinions. The Medical Panel may choose in a particular case to place weight on a medical opinion supplied to it in forming and giving its own opinion. It goes too far, however, to conceive of the function of the Panel as being either to decide a dispute or to make up its mind by reference to competing contentions or competing medical opinions57. The function of a Medical Panel is neither arbitral nor adjudicative: it is neither to choose between competing arguments, nor to opine on the correctness of other opinions on that medical question. The function is in every case to form and to give its own opinion on the medical question referred to it by applying its own medical experience and its own medical expertise. The reasons that s 68(2) of the Act obliged the Medical Panel to set out in a statement of reasons to accompany the certificate as to its opinion were the reasons which led the Medical Panel to form the opinion that the Medical Panel was required to form for itself on the medical question referred for its opinion. What is to be set out in the statement of reasons is the actual path of reasoning by which the Medical Panel arrived at the opinion the Medical Panel actually formed for itself. Legislative history provides part of the context in which the objective of requiring the Medical Panel to give a written statement of reasons for its opinion falls to be identified. As first inserted into the Act in 199258, s 68(2) required only that the Medical Panel to whom a medical question was referred give a certificate as to its opinion. The obligation of a Medical Panel to furnish reasons then arose only under s 8(1) of the Administrative Law Act. That obligation, applicable to any "tribunal" which makes a "decision", is contingent on a person affected making a request for a statement of reasons and must, by force of s 8(3), be performed within a reasonable time of the making of such a request. The standard to be met by such a statement of reasons where requested and the 57 Cf Masters v McCubbery [1996] 1 VR 635 at 645. 58 Accident Compensation (WorkCover) Act 1992 (Vic). Crennan Bell remedy for non-compliance of a statement of reasons with that standard are in s 8(4), which provides: "The Supreme Court, upon being satisfied by the person making the request that a reasonable time has elapsed without any such statement of reasons for the decision having been furnished or that the only statement furnished is not adequate to enable a Court to see whether the decision does or does not involve any error of law, may order the tribunal to furnish, within a time specified in the order, a statement or further statement of its reasons and if the order is not complied with the Court, in addition to or in lieu of any order to enforce compliance by the tribunal or any member thereof, may make any such order as might have been made if error of law had appeared on the face of the record." Thus, a statement of reasons furnished in response to a request made under s 8(1) must meet the standard of being "adequate to enable a Court to see whether the decision does or does not involve any error of law". Where a statement that is furnished does not meet that standard, the statutorily prescribed remedy is for the Supreme Court, in the first instance, to order the furnishing of a further statement59. The imposition of the standard expressed in s 8(4) for a statement of reasons furnished in response to a request made under s 8(1) of the Administrative Law Act fulfils one of the aims identified by the Victorian Attorney-General to the Victorian Parliament when introducing that Act: "[t]o ensure that people are not prevented from challenging erroneous decisions merely because they cannot find out what was the tribunal's reason for deciding against them"60. In its application to a statement of reasons furnished by a Medical Panel on request for an opinion given under s 68(2) of the Act, s 8(4) of the Administrative Law Act was in 1995 held to require61: 59 Sherlock v Lloyd (2010) 27 VR 434. 60 Victoria, Legislative Council, Parliamentary Debates (Hansard), 25 October 1978 61 Masters v McCubbery [1996] 1 VR 635 at 661. See also at 650, 653. Crennan Bell "medical reasons in sufficient detail, and only in sufficient detail, to show the court and the worker that the question referred to the panel has been properly considered according to law and that the opinion furnished is founded on an appropriate application of the members' medical knowledge and experience." The insertion into s 68(2) of the Act of the words "and a written statement of reasons for that opinion", by an amendment in 201062, was designed to implement a recommendation of Mr Peter Hanks QC in a report to the Victorian Government in 200863. Noting that it appeared to be an "unnecessary step" to require an affected party to request written reasons from a Medical Panel under s 8 of the Administrative Law Act and that a Panel giving an opinion will already have formulated reasons for that opinion, Mr Hanks recommended that a Medical Panel should be required to provide written reasons together with its opinion64. The amendment to s 68(2) of the Act to implement that recommendation removed any need for an affected party to make a request under s 8 of the Administrative Law Act. Through s 10 of the Administrative Law Act, the amendment to s 68(2) of the Act had the result, already explained, that failure of reasons given by a Medical Panel to comply with the statutory standard is now an error of law on the face of the record of the opinion of the Medical Panel, so that an order in the nature of certiorari is now available to remove the legal consequences of an opinion for which non-compliant reasons were given without the party seeking that order needing to rely on the statutory remedy provided by s 8(4) of the Administrative Law Act. There is, however, nothing in the legislative history to suggest that the amendment was designed to alter the standard previously required by s 8(4) of a statement of reasons given for an opinion of a Medical Panel, namely, that the statement be adequate to enable a court to see whether the opinion does or does not involve any error of law. The objective, within the scheme of the Act, of requiring the Medical Panel to give a written statement of reasons for that opinion can therefore be seen to be that persons affected by the opinion automatically be provided with a written statement of reasons adequate to enable a court to see whether the 62 Accident Compensation Amendment Act 2010 (Vic). 63 Accident Compensation Act Review: Final Report, (2008). 64 Accident Compensation Act Review: Final Report, (2008) at 375 [10.323]. Crennan Bell opinion does or does not involve any error of law. There is an obvious benefit in requiring a written statement of reasons for an opinion always to meet that standard. The benefit is that it enables a person whose legal rights are affected by the opinion to obtain from the Supreme Court an order in the nature of certiorari removing the legal effect of the opinion if the Medical Panel in fact made an error of law in forming the opinion: an error of law in forming the opinion, if made, will appear on the face of the written statement. To require less would be to allow an error of law affecting legal rights to remain unchecked. To require more would be to place a practical burden of cost and time on decision- making by an expert body for no additional legal benefit and no identified systemic gain. The standard required of a written statement of reasons given by a Medical Panel under s 68(2) of the Act can therefore be stated as follows. The statement of reasons must explain the actual path of reasoning by which the Medical Panel in fact arrived at the opinion the Medical Panel in fact formed on the medical question referred to it. The statement of reasons must explain that actual path of reasoning in sufficient detail to enable a court to see whether the opinion does or does not involve any error of law. If a statement of reasons meeting that standard discloses an error of law in the way the Medical Panel formed its opinion, the legal effect of the opinion can be removed by an order in the nature of certiorari for that error of law on the face of the record of the opinion. If a statement of reasons fails to meet that standard, that failure is itself an error of law on the face of the record of the opinion, on the basis of which an order in the nature of certiorari can be made removing the legal effect of the opinion. The Court of Appeal considered that a higher standard was required of a written statement of reasons given by a Medical Panel under s 68(2) of the Act. On the premise that Brown held that the opinion of a Medical Panel must be adopted and applied for the purposes of determining all questions or matters arising under or for the purposes of the Act, the Court of Appeal analogised the function of a Medical Panel forming its opinion on a medical question to the function of a judge deciding the same medical question. Accordingly, it then equated the standard of reasons required of a Medical Panel with the standard of reasons that would be required of a judge giving reasons for a final judgment after a trial of an action in a court65. The application of that judicial standard in 65 Kocak v Wingfoot Australia Partners Pty Ltd (2012) 295 ALR 730 at 742-743 [47]- Crennan Bell circumstances where an affected party had provided to the Medical Panel opinions of other medical practitioners and had sought in submissions to rely on those opinions, and where the opinion formed by the Medical Panel itself did not accord with those opinions, meant that "it was incumbent on the [P]anel to provide a comprehensible explanation for rejecting those expert medical opinions or, if it be the case, for preferring one or more other expert medical opinions over them"66. Rejection of the premise and the analogy, for reasons already stated, entails rejection of the conclusion that the higher standard is required. A Medical Panel explaining in a statement of reasons the path of reasoning by which it arrived at the opinion it formed is under no obligation to explain why it did not reach an opinion it did not form, even if that different opinion is shown by material before it to have been formed by someone else. The nature of the question referred to a Medical Panel, and the way that question was addressed by other medical practitioners in opinions supplied to a Medical Panel, might allow an inference to be drawn, on the balance of probabilities in a particular case, that the reasoning in fact adopted by a Medical Panel in arriving at its own differing opinion is not adequately reflected in its written statement of reasons. An inference might be drawn, for example, that the reasoning involved one or more steps not reflected in the written statement of reasons either at all or in sufficient detail to allow a court to see whether a Medical Panel made an error of law in those steps. That is not this case. The written statement of the Medical Panel's reasons for its opinion in the present case listed in a schedule the documents considered by the Panel. The listed documents included those described as "Plaintiff's Medical Reports" and "Defendant's Medical reports". The statement commenced with a recitation of agreed facts. The statement then set out the medical history taken by the Panel from the Worker, findings made by the Panel from its physical examination of the Worker, and findings made by the Panel from its viewing of the x-ray and MRI scan of the Worker's cervical spine. The statement then recorded the Panel's conclusion as to the nature of the Worker's current condition as reflected in the Panel's answer to Question 1: the Worker was suffering from chronic mechanical left cervical spine dysfunction with referred pain to his left shoulder girdle and upper limb. Moving on to the process of reasoning adopted by the Medical Panel to answer Questions 2 and 3, the statement of the Panel's reasons recorded that the 66 (2012) 295 ALR 730 at 749 [55]. Crennan Bell Panel considered the Worker's description of his employment duties, the history of his workplace injuries, medical reports of doctors who had treated and examined him, radiological results and its own examination. The statement then specifically recorded that the Panel noted various medical reports by one of the Worker's neurosurgeons and recorded that the Panel noted as well submissions on behalf of the Employer and the Worker, the thrust of which it summarised. The last six paragraphs of the statement were then as follows: "The Panel considered that the [Worker] suffered a soft tissue injury to the neck/cervical spine during the course of his normal work duties on 16 October 1996. The Panel further noted that the underlying degeneration in the cervical spine is a radiological diagnosis only, is often constitutional, and notes from the published medical literature that such degenerative changes may or may not cause symptoms, and that such degenerative changes on imaging studies, including MRI scanning, can commonly be seen in asymptomatic people. The Panel considered that the soft tissue injury has now resolved, that it has not had any effect upon the progression on the degenerative changes noted on various imaging studies, and that the [Worker's] current symptoms are not related to the soft tissue injury of 16 October 1996 in any way. The Panel therefore concluded that the [Worker's] employment with the [Employer] on 16 October 1996 could possibly have been, and was in fact, a significant contributing factor to a, now resolved, soft tissue injury to the neck, but could not possibly have been, and was not in fact, a significant contributing factor to any claimed recurrence, aggravation, acceleration, exacerbation or deterioration of any pre-existing neck/cervical spine condition, in any way. Whilst the Panel acknowledges that the [Worker] does currently suffer from a significant medical condition of the neck/cervical spine as noted above, the Panel, based on its clinical assessment, and the documents in the enclosures, concluded that the [W]orker's current medical condition of the neck/cervical spine is not related to the now resolved soft tissue injury of the neck/cervical spine of 16 October 1996 in any way. Crennan Bell The Panel therefore concluded that the [Worker's] current neck/cervical spine condition does not result from and is not materially contributed to by the [Worker's] alleged neck/cervical spine injury of 16 October 1996." The primary judge found that the last six paragraphs of the statement of reasons adequately disclosed the route by which the Medical Panel arrived at its answers to Questions 2 and 3, in that it was evident from those last six paragraphs that the Medical Panel determined67: "first, that the [Worker] suffered a soft tissue injury during the course of his normal work duties on 16 October 1996; second, that the soft tissue injury has now resolved; third, that it has not had any effect upon the progression of the degenerative changes noted on the various imaging studies; fourth, that the [Worker's] current symptoms are not related to the soft tissue injury of 16 October 1996 in any way; and fifth, that (therefore) the [Worker's] employment on 16 October 1996 did not contribute to the [Worker's] current neck condition, in any way." Implicit in the first of those steps in the reasoning of the Medical Panel, as identified by the primary judge, was that the Medical Panel found that all that the Worker suffered on 16 October 1996 was a soft tissue injury. The remaining four steps in the reasoning addressed why that soft tissue injury did not contribute to the degenerative changes which resulted in the Worker's current condition. As argument developed in this Court, it became apparent that the gist of the Worker's complaint about the adequacy of the statement of reasons is that the statement of reasons did not address the possibility that the degenerative changes resulting in the Worker's current condition were initiated on 16 October 1996 other than through soft tissue injury. His counsel submitted on his behalf that "[i]t is a perfectly possible situation that a traumatic event can cause a soft tissue injury to ligaments and muscles and so forth and also cause an injury to the spine". That was, in the Worker's submission, the import of one of the medical reports, provided to the Medical Panel on behalf of the Worker, which was not addressed in the Panel's statement of reasons. The report, that of a neurosurgeon engaged by the Worker in 2009, expressed the opinion that what happened to the Worker on 16 October 1996 "would appear to be consistent with an injury to the 67 Kocak v Wingfoot Australia Partners Pty Ltd [2011] VSC 285 at [113]. Crennan Bell cervical spine" and on that basis "may have resulted in intervertebral disc prolapse or an aggravation of underlying cervical spondylosis". The answer to the Worker's complaint lies in the implicit finding of the Medical Panel that the Worker on 16 October 1996 sustained only a soft tissue injury, and not an injury to his spine. That finding was one of fact. Whether or not that finding of fact was open to the Medical Panel is a question of law. But no further explanation of the reasoning process adopted by the Medical Panel is necessary to enable a court to address that question. Conclusion The legal effect of an opinion of a Medical Panel on a medical question referred to it is that given by s 68(4) of the Act. The legal effect given by s 68(4) is not that the opinion must be adopted and applied for the purposes of determining all questions or matters arising under or for the purposes of the Act. The legal effect given by s 68(4) is that the opinion must be adopted and applied for the purposes of determining the question or matter, arising under or for the purposes of the Act, in which the medical question arose and in respect of which the medical question was referred to the Medical Panel. The opinion is given no greater legal effect through the operation of issue estoppel. The standard required of the written statement of reasons which s 68(2) of the Act obliges a Medical Panel to give for its opinion is that the statement must explain the actual process of reasoning by which the Medical Panel in fact formed its opinion and must do so in sufficient detail to enable a court to see whether the opinion does or does not involve any error of law. By operation of s 10 of the Administrative Law Act, such reasons as are given by a Medical Panel form part of its opinion and part of the record of that opinion. Such continuing legal effect as an opinion might have may be removed by an order in the nature of certiorari for an error of law on the face of the record where the reasons given do not meet the standard required of a written statement of reasons by s 68(2) of the Act. Certiorari was not available in this case for two independent reasons. One was that the opinion of the Medical Panel had no continuing legal effect. That was because the matter or question, in respect of which the medical question was referred to the Medical Panel, had already been brought to a final resolution. The other was that the reasons given by the Medical Panel for its opinion met the required standard, as the primary judge found. Crennan Bell The appeal should be allowed. The substantive orders made by the Court of Appeal should be set aside. In their place, the appeal to the Court of Appeal should be dismissed, with the result that the order of the primary judge dismissing the Worker's application for an order in the nature of certiorari will stand. In accordance with conditions of the grant of special leave to appeal, the orders as to costs made by the Court of Appeal should not be disturbed and the Employer should pay the Worker's costs of this appeal.

HIGH COURT OF AUSTRALIA ALAN GRIFFITHS ON BEHALF OF THE NGALIWURRU AND NUNGALI PEOPLES AND ANOR APPELLANTS AND MINISTER FOR LANDS, PLANNING AND ENVIRONMENT AND ANOR RESPONDENTS Griffiths v Minister for Lands, Planning and Environment [2008] HCA 20 15 May 2008 ORDER Appeal dismissed. Appellants to pay the costs of the first respondent. On appeal from the Supreme Court of the Northern Territory Representation S J Gageler SC with S A Glacken for the appellants instructed by (Northern Land Council) D F Jackson QC with R J Webb QC for the first respondent (instructed by Solicitor for the Northern Territory) Interveners R G Orr QC with M A Perry QC intervening on behalf of the Attorney-General for the Commonwealth of Australia (instructed by Australian Government Solicitor) R J Meadows QC Solicitor-General for the State of Western Australia with G J Ranson intervening on behalf of the Attorney-General for the State of Western Australia (instructed by State Solicitor for Western Australia) M G Sexton SC Solicitor-General for the State of New South Wales with S B Lloyd intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor (NSW) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Griffiths v Minister for Lands, Planning and Environment Real property – Compulsory acquisition – Section 43(1) of Lands Acquisition Act (NT) ("LAA") empowered Minister, subject to LAA, to compulsorily acquire land "for any purpose whatsoever" – Whether s 43(1) of LAA conferred power on Minister to acquire land solely to enable it to be sold or leased for private use. Aborigines – Native title – Compulsory acquisition of native title rights and interests – Section 11(1) of Native Title Act 1993 (Cth) ("NTA") provided that native title could not be extinguished contrary to NTA – At time of notification of compulsory acquisition appellants had commenced proceedings for determination of native title to lots – Lots otherwise consisted of vacant Crown land – Whether s 24MD(2) of NTA permitted extinguishment of native title by compulsory acquisition when no non-native title rights and interests subsisted. Statutes – Construction – Compulsory acquisition of native title interests – Whether s 43(1) of LAA conferred power on Minister to acquire interests including native title interests – Whether statute so providing is subject to interpretive principle that acquisition of native title interests must be stated in clear and plain terms – Whether distinction drawn between acquisitions for governmental and non-governmental purposes. Aborigines – Native Title – Compulsory acquisition of native title rights and interests – Nature of such native title interests in Australian law – Whether such interests do or may include special features arising from spiritual, cultural or social connection between native title owners and their land – Communal character of native title – History of denial and later recognition of native title rights and interests in land in Australia – Whether such special characteristics of native title rights and interests import requirement for express provisions in legislation for compulsory acquisition of such rights and interests – Whether the LAA sufficiently or at all provides for acquisition of native title rights or interests in circumstances of the present case. Words and phrases – "compulsory acquisition", "native title". Lands Acquisition Act (NT), ss 5A, 43(1). Native Title Act 1993 (Cth), ss 11(1), 24MD(2), 223. GLEESON CJ. I agree with the orders proposed by Gummow, Hayne and Heydon JJ, and with their reasons ("the joint reasons") for those orders. I would make the following additional observations about the second issue dealt with in those reasons, that is, the construction of s 24MD(2)(b) of the Native Title Act 1993 (Cth). Section 24MD(2) provides for the extinguishment of native title on just terms as to compensation if: the act is the compulsory acquisition of the whole or part of any native title rights and interests under a law of the Commonwealth, a State or a Territory that permits both: the compulsory acquisition by the Commonwealth, the State or the Territory of native title rights and interests; and the compulsory acquisition by the Commonwealth, the State or the Territory of non-native title rights and interests in relation to land or waters; and the whole, or the equivalent part, of all non-native title rights and interests, in relation to the land or waters to which the native title rights and interests that are compulsorily acquired relate, is also acquired (whether compulsorily or by surrender, cancellation or resumption or otherwise) in connection with the compulsory acquisition of the native title rights and interests; and the practices and procedures adopted in acquiring the native title rights and interests are not such as to cause the native title holders any greater disadvantage than is caused to the holders of non-native title rights and interests when their rights and interests are acquired[.]" The evident concern of these three conditions of the operation of the substantive provisions of s 24MD(2) relating to extinguishment of native title rights and interests, and compensation, is to avoid racial discrimination. Paragraphs (a), (b) and (ba) address potential kinds or sources of discrimination. The argument for the appellants fastens upon the word "all" in par (b). The appellants submit that the condition expressed in par (b) can only be satisfied where there are some non-native title rights and interests in the subject land, and they also are acquired. Textually, the argument is inconclusive. There are many contexts, including legislative contexts, in which the word "all" means "any and all". To say, for example, that a company may qualify for a certain order relating to the administration of its affairs only if it has paid all its debts does not disqualify a company that has never traded and therefore never had any debts. Context and purpose will determine whether satisfaction of a condition that all non-native title rights and interests also be acquired is rendered impossible by the circumstance that there are no such rights and interests to acquire. Such a circumstance, if it exists, would appear to be fortuitous, and unrelated to any discernible legislative object. There is, no doubt, a great deal of land in the Northern Territory in which there are no interests other than native title interests. The same is probably true of Western Australia. How would it advance a legislative purpose against discrimination to distinguish between such land and land where there is a single, perhaps relatively unimportant, non-native title right or interest? Why should the existence of, say, a short-term unregistered lease mean that, during the subsistence of the lease, par (b) could be satisfied, but, upon expiry of the lease, par (b) could not be satisfied? The legislative purpose is against discrimination and discriminatory acquisition. To make the presence or absence of a non-native title right or interest of any kind determinative of the application of s 24MD(2) does not advance that purpose. It may be added that whether or not any non-native title right or interest exists at any particular time could be a matter of uncertainty. Such rights and interests may not be known at the time of acquisition. It is difficult to accept that there was a legislative acceptance of a possibility with such obvious adverse consequences for reasonable certainty and predictability in land management. to extinguishment by s 24MD(2), whereas The construction for which the appellants contend appears to produce a curious, in fact inexplicable, new form of discrimination between different kinds of native title rights and interests: those that co-exist with non-native title rights and interests, and those that do not. The former, according to the appellants, are subject latter are not. Discrimination is judged by making comparisons. The comparisons required by pars (a), (b) and (ba) respectively are different, but all are directed to the same ultimate question: whether, in the compulsory acquisition of native title rights and interests, there is equality of treatment between native title and non-native title rights and interests. That question is capable of being answered by postulating the existence of non-native title rights and interests and asking how they would be affected. It does not require the identification of actual rights or interests and demonstration of how they are affected. the The aim of the legislation is not to ensure that every time some native title rights and interests (regardless of their nature and extent) are acquired there will also be some non-native title rights and interests (regardless of their nature and extent) that also must be acquired. That would be a crude form of equality, but not one that advanced any rational objective. The construction contended for by the first respondent and the interveners better fits the statutory context, the history (as explained in the joint reasons) and the legislative purpose. GUMMOW, HAYNE AND HEYDON JJ. This appeal from the Northern Territory Court of Appeal1 (Martin CJ, Mildren and Riley JJ) concerns land at the Town of Timber Creek which is situated at the junction of the Victoria River and Timber Creek in the north-west of the Territory. The Town largely comprises unalienated "Crown land" within the meaning of that term in the Crown Lands Act (NT) ("the CLA"). The Crown land is unaffected by any interest or tenure which might be called "ordinary title", but this appeal was conducted on the footing that there exists with respect to that Crown land "native title" within the meaning given to that expression by s 223 of the Native Title Act 1993 (Cth) ("the NTA"). The term "Crown lands" is defined in s 3 of the CLA as meaning: "all lands of the Territory, including the bed of the sea within the territorial limits of the Northern Territory, and including an estate in fee simple that is registered in the name of the Territory, but does not include reserved or dedicated lands". Section 4 imposes a general bar upon the alienation of "Crown lands" otherwise than in pursuance of that statute; this reflects for the Territory the general position in Australia that the authority of the executive to dispose of Crown lands must be derived from statute2. Section 9 empowers the Minister (the first respondent) in the name of the Territory, but subject to the CLA, by instrument in the appropriate form to grant an estate in fee simple in or lease of vacant Crown land. The vacant Crown land in the Town of Timber Creek in which there exists native title includes certain Lots ("the Lots") in respect of which the Minister proposes to acquire compulsorily that native title. The purpose of doing so is to enable the Lots then to be alienated by the Territory by sale or lease for private use in the manner described later in these reasons. To bring about the acquisition the Minister relies upon provisions of the Lands Acquisition Act (NT) ("the LAA"). Section 43(1) of the LAA empowers the Minister, subject to that statute, to acquire compulsorily land "for any purpose whatsoever" by causing to be published in the Gazette a notice declaring the land to be acquired. That power is conditioned upon compliance with applicable pre-acquisition procedures specified in Pts IV (ss 31B-41) and IVA (ss 42-42D) of the LAA. The term "land" is defined in s 4 as including an "interest" in land which in turn is defined as including "native title" rights and 1 Minister for Lands, Planning and Environment v Griffiths (2004) 14 NTLR 188. 2 Western Australia v Ward (2002) 213 CLR 1 at 121 [166]-[167]; [2002] HCA 28. interests within the meaning of s 223 of the NTA. Upon publication in the Gazette of a notice of acquisition, "the land" described therein vests in the Territory freed and discharged from all interests and restrictions of any kind Section 5A(1) provides that the LAA applies in relation to an acquisition of an interest in land comprising native title rights and interests, being an acquisition which is an "act" to which there apply the consequences set out in sub-ss (6A) or (6B) of s 24MD of the NTA. It will be necessary to refer further to the NTA but it should be indicated here that the appeal in this Court turns upon the interaction between the NTA and the LAA, one a law of the Commonwealth and the other a law of the Territory. This is foreshadowed by the above provisions which link acquisitions under the LAA to s 24MD of the NTA. Section 24MD(6A) gives to native title holders the same procedural rights in relation to a compulsory acquisition under Territory law as they would have as holders of ordinary title to the land in question and to any adjoining land. Section 24MD(6B) assumes that the purpose of that compulsory acquisition may be the conferral in relation to the land concerned of rights and interests upon persons other than the Territory; in such cases, special provision is made for the determination of objections by an "independent body", but compliance by the Territory with that recommendation is not mandated in all circumstances. Pursuant to the pre-acquisition procedures provided in Pt IV of the LAA, in 2000 the Minister notified the appellants (Alan Griffiths and William Gulwin on behalf of the Ngaliwurru and Nungali Peoples) of proposals to acquire all interests including native title rights and interests (if any) in the Lots. Thereafter some of the Lots were to be dealt with by granting Crown leases to Warren Pty Ltd for agricultural purposes of a commercial nature, including cattle husbandry and goat breeding, and other Lots were to be offered at public auction for the grant of Crown leases and use for "commercial/tourism development". That purpose appears to have engaged s 24MD(6) of the NTA. Conformably with the NTA, s 34 of the LAA (which is in Pt IV) provides for the making of objections to proposed acquisitions. The objections by the appellants were heard by the Lands and Mining Tribunal ("the Tribunal")3 and on 22 March 2002 the Tribunal recommended in favour of the compulsory acquisition of the native title but subject to conditions designed: 3 Established by the Lands and Mining Tribunal Act 1998 (NT). The Tribunal is the second respondent to the appeal in this Court but played no active part in the appeal. "to ensure that in due course in the event that native title is indeed determined by the Federal Court to have existed (but for the acquisition and consequent extinction of native title) the Northern Territory is possessed of an amount which at least hopefully will be equal to or a major contribution towards any compensation which would fall to be paid by the Northern Territory Government as a consequence of such determination". In the meantime, the appellants had commenced on 10 December 1999 proceedings in the Federal Court under s 13 of the NTA for a determination of native title to vacant Crown land situated within the Town. A determination was made on 28 August 20064. The Full Court of the Federal Court varied the determination in the appellants' favour on 22 November 20075. On 1 June 2002 the Minister accepted the recommendations of the Tribunal. The appellants then commenced proceedings in the Supreme Court of the Northern Territory to set aside the recommendations of the Tribunal and the decision of the Minister to act on those recommendations. On 31 July 2003 the primary judge (Angel J) made orders setting aside the recommendations and decision6. However, an appeal by the Minister to the Court of Appeal was successful. On 10 May 2004, the orders of Angel J were set aside and the Supreme Court proceedings dismissed. The appeal to this Court is brought by special leave from that decision of the Court of Appeal. Counsel for the Attorneys-General of the Commonwealth, Western Australia and New South Wales were heard in support of the first respondent, the Minister. The issues The appellants seek reinstatement of the orders made by Angel J. They put forward two grounds for doing so. The first concerns the construction of the compulsory acquisition provisions of the LAA. In particular, the appellants focus upon s 43(1)(b) of the LAA which states: 4 Griffiths v Northern Territory (No 2) [2006] FCA 1155. 5 Griffiths v Northern Territory (2007) 243 ALR 72. 6 Griffiths v Lands and Mining Tribunal (2003) 179 FLR 241. "Subject to this Act, the Minister may acquire land under this Act for any purpose whatsoever – if the pre-acquisition procedures in Parts IV and IVA as applicable have been complied with – by compulsory acquisition by causing a notice declaring land to be acquired to be published in the Gazette." The appellants submit that notwithstanding the phrase "any purpose whatsoever", the section does not confer power upon the Minister to acquire land from one person solely to enable it to be sold or leased by the Territory for private use to another person. The second issue flows from the circumstance that the Lots are unalienated Crown land in which the only outstanding interests therein are native title. The appellants appear to concede that the contrary would have been the case under the NTA were there subsisting interests or tenures of others derived from the Crown, but they refer to the statement in s 11(1) of the NTA that native title is not to be extinguished contrary to that statute and then submit that the NTA contains no provision permitting the acquisition proposed under the Territory law. For the reasons which follow neither submission should be accepted and the appeal should be dismissed. It is convenient to turn first to the construction of s 43 of the LAA. "For any purpose whatsoever" In considering the restriction which the appellants would by a process of construction place upon those words in s 43 of the LAA, it is appropriate first to look to the provenance of that section. This course was taken by Martin CJ in the Court of Appeal7. The Northern Territory (Self-Government) Act 1978 (Cth) ("the Self- Government Act") came fully into operation on 1 July 1978 (s 2). Before the commencement of the Self-Government Act the acquisition of land in the (2004) 14 NTLR 188 at 191-193. Northern Territory was controlled by federal legislation, the Lands Acquisition Act 1955 (Cth) ("the 1955 federal law"). Section 6 thereof empowered the Commonwealth to acquire land "for a public purpose", and that term was so defined in s 5(1) as to apply to a purpose in respect of which the Parliament of the Commonwealth had power to make laws and, in relation to land in the Northern Territory, any purpose in relation to that Territory. The term "for public purposes" had appeared in s 13 of the earlier statute, the Lands Acquisition Act 1906 (Cth), and had been similarly defined in s 5. The identification in the federal legislation of "public purpose" with heads of legislative power reflected the terms of s 51(xxxi) of the Constitution. But it also was consistent with what appeared in a line of English authority beginning in the 19th century. This treated as "public purposes" those required and created by the government of the country, being purposes of the administration of that government8. Following the commencement of the Self-Government Act, the LAA was enacted and included s 43 in the following form: "Subject to this Act, the Minister may acquire land for public purposes by causing a notice declaring that land to be acquired to be published in the Further, the expression "public purpose" was defined in s 4 of the LAA as meaning a purpose in relation to the Territory and as including a purpose related to the carrying out of a function by a statutory corporation. In 19829 s 43 was amended so that it then simply read "Subject to this Act, the Minister may, under this Act, acquire land". Following the amendments made to the NTA by the Native Title Amendment Act 1998 (Cth) ("the 1998 NTA Amendment"), the LAA was extensively amended10. In particular, s 43 was repealed and s 43 substantially in its present form was introduced. What had supervened was not only the 1998 NTA Amendment, but the decision of this Court in Clunies-Ross v The Commonwealth11. That litigation 8 See Bank Voor Handel en Scheepvaart NV v Slatford [1953] 1 QB 248 at 298, reversed on other grounds [1954] AC 584. 9 By s 10 of the Lands Acquisition Amendment Act 1982 (NT). 10 By s 10 of the Lands Acquisition Amendment Act (No 2) 1998 (NT). 11 (1984) 155 CLR 193. concerned the power conferred by s 6 of the 1955 federal law to "acquire land for a public purpose". The Court construed that expression as limited to an acquisition of land needed, or proposed for use, application or preservation for the advancement or achievement of a public purpose. The power did not extend to purposes "quite unconnected with any need for or future use of the land"12, and did not extend to the taking of land merely in order to deprive the owner of the land and thereby advance or achieve some purpose in respect of which the Parliament had power to make laws. Against that background, the absence from s 43 in its post-1998 form of any reference to "public purpose" and the presence of the expression "for any purpose whatsoever" may readily be understood as a removal by the Territory legislature of any ground for the limitation of the statutory power by reference to considerations which had prevailed in Clunies-Ross. It is unnecessary in this case to determine what nevertheless may be the limits to the scope of the power conferred by the broad words of s 43. This is because the expression "for any purpose whatsoever" as it appears in s 43(1) must at least include for the purpose of enabling the exercise of powers conferred upon the executive by another statute of the Territory. Those purposes include the exercise of the power conferred by s 9 of the CLA. This provides that subject to that statute the Minister may in the name of the Territory and by instrument in the appropriate form grant an estate in fee simple or lease of Crown land. Further and more detailed provisions respecting the alienation of Crown land are found in the balance of Pt 3, Div 1 (ss 9-18) of the CLA. Further, it is pertinent, though not critical, to note that as Mildren J observed in the Court of Appeal13: "it is difficult to see why, in the circumstances of this case, the acquisitions could not be for what might be regarded as a legitimate Territory purpose, and there can be no doubt that such a purpose falls within the ambit of [s 43(1)(b)]. It is very much the business of government to promote industry in or around towns by providing land for the use of industry, whether the industry be manufacturing, tourist businesses or goat farming." 12 (1984) 155 CLR 193 at 200. 13 (2004) 14 NTLR 188 at 216. Further, the Territory is established by s 5 of the Self-Government Act as a body politic, and subject to the requirement of just terms imposed by s 50, the Legislative Assembly is empowered by s 6 to make laws for the peace, order and good government of the Territory. This constitutional position of the Territory differentiates it from the situation of local government bodies whose powers fell for consideration in such cases as Werribee Council v Kerr14. The statement in that case by Higgins J, with reference to the powers of the appellant conferred by the Local Government Act 1915 (Vic), that municipal councils had not been empowered to interfere with the private title of A for the private benefit of B15 is inapt to describe in the Territory the interrelation between the powers conferred by the LAA and the CLA. Nor, given that statutory structure, has any case been presented which would bring this case within the situation considered in Samrein Pty Ltd v Metropolitan Water Sewerage & Drainage Board16. This Court indicated in Samrein that if it had appeared on the evidence that the Board had been seeking to acquire the land in question for an ulterior purpose there would have been an ostensible but not a real exercise of the power granted by its statute17. For these reasons the appellants fail in their attack upon the conclusions reached by the Court of Appeal respecting the construction of s 43 of the LAA. Native title Here also the issue which arises is best understood by first making some reference to the background in the case law and statute law. In Mabo v Queensland [No 2]18 Deane and Gaudron JJ remarked: "The personal rights conferred by common law native title do not constitute an estate or interest in the land itself. They are extinguished by an unqualified grant of an inconsistent estate in the land by the Crown, such as a grant in fee or a lease conferring the right to exclusive 14 (1928) 42 CLR 1. 15 (1928) 42 CLR 1 at 33. 16 (1982) 56 ALJR 678; 41 ALR 467. 17 (1982) 56 ALJR 678 at 679; 41 ALR 467 at 468. 18 (1992) 175 CLR 1 at 110. possession. They can also be terminated by other inconsistent dealings with the land by the Crown, such as appropriation, dedication or reservation for an inconsistent public purpose or use, in circumstances giving rise to third party rights or assumed acquiescence." (emphasis added) "Our conclusion that rights under common law native title are true legal rights which are recognized and protected by the law would, we think, have the consequence that any legislative extinguishment of those rights would constitute an expropriation of property, to the benefit of the underlying estate, for the purposes of s 51(xxxi) [of the Constitution]." Against that background and as enacted in 1993, the NTA made specific provision, among "permissible future acts"20, for compulsory acquisition. Section 23(3) stated: "If the act is the acquisition, under a Compulsory Acquisition Act, of the whole or part of any native title rights and interests: the non-extinguishment principle applies to the acquisition; and nothing in this Act prevents any act that is done in giving effect to the purpose of the acquisition from extinguishing the native title rights and interests; and the Compulsory Acquisition Act does not provide for compensation on just terms to the native title holders for the acquisition, they are entitled to compensation for the acquisition in accordance with Division 5." (emphasis added) In relation to the Territory, the term "Compulsory Acquisition Act" was defined in s 253 as a law of the Territory permitting the compulsory acquisition by the Territory of native title rights and interests and of other interests in relation to land and waters, and providing for compensation for the acquisition of any native 19 (1992) 175 CLR 1 at 111. 20 These included the extinguishment on or after 1 January 1994 of any legal right in the exercise of power conferred by statute, which could be done in relation to the land concerned if the native title holders concerned instead held ordinary title to it (ss 233, 235). Section 235 was repealed by the 1998 NTA Amendment. title rights and interests and containing provisions to the same effect as s 79 of the NTA. Section 79 dealt with requests for non-monetary compensation. It may be accepted that the LAA was a Compulsory Acquisition Act within the definition in s 253 of the NTA. The result was that where all that could be acquired in respect of particular unalienated Crown land were native title rights, s 23(3) of the NTA would apply to the extinguishment of that native title. With the decision in 1996 of this Court in Wik Peoples v Queensland21, it became apparent that grants of interests under legislation using such terms as "pastoral lease" would not necessarily extinguish all incidents of native title in respect of the relevant areas. In such a situation, a compulsory acquisition might now be made of the native title rights, but not of the concurrent pastoral lease. Were that to be permitted by the NTA, this would be likely to offend the Racial Discrimination Act 1975 (Cth) ("the RDA") as it has been interpreted by this Court22. Section 23(3) appeared in Div 3 (ss 21-44) of Pt 2 of the NTA. The Division was headed "Future acts and native title". That Division was repealed by Sched 1, Item 9 of the 1998 NTA Amendment. What then was introduced into the NTA by the 1998 statute23 was a new Div 3, with the same chapeau but extending from s 24AA to s 44G and divided into Subdivs A-Q. Subdivision M compulsory (s 24MA-s 24MD) dealt with acquisition. In Ch 15 of the Explanatory Memorandum to the Native Title Amendment Bill 1997 there appeared the following: future Subdivison M of Division 3, inserted by Item 9 of Schedule 1, is based on sections 23 and 235 of the current NTA, which are repealed by these amendments. In brief, this Subdivision means that legislation will be valid to the extent it relates to an onshore place if it affects native title areas in the same way as, or no less beneficially than, it affects freehold areas. It also means that a non-legislative 21 (1996) 187 CLR 1. 22 The effect of that interpretation is explained in Western Australia v Ward (2002) 213 CLR 1 at 96-109 [98]-[134]. 23 Sched 1, Item 9. act can be done validly over native title areas if that act could be done validly over freehold areas or if [it] is the creation or variation of a right to mine for opals or gems. The non-extinguishment principle will apply unless the act is the compulsory acquisition, under a non-discriminatory law, of native title and non-native title rights are also acquired (ie the acquisition power is exercised in a non-discriminatory way). Generally, the native title holders would be entitled to compensation for the act in the same way For compulsory acquisitions, native title holders will either be entitled to just relevant compulsory terms compensation under acquisition to compensation under Division 5 of Part 3 of the NTA. Native title holders will also have the same procedural rights for the act as freeholders would have for that act." freeholders would be. laws or entitled that the A Supplementary Explanatory Memorandum of amendments to be moved in the Senate on behalf of the government included the following with respect to an amendment proposed to cl 24MD(2): "This amendment to proposed subsection 24MD(2) makes it clear that when native title rights are subject to a non-discriminatory compulsory acquisition process, the non-native title rights in the area concerned, if any, must be acquired, but that this acquisition can be through a compulsory acquisition or by surrender, cancellation, resumption, or otherwise. The purpose of the amendment is to ensure that the methods under which non-native title rights are acquired are sufficiently broad to cover the whole range of circumstances under which State and Territories in fact acquire those rights." What is apparent from these Parliamentary materials is a legislative proposal to proceed on the basis provided by the previous s 23, permitting future compulsory acquisition of native title rights, but also to ensure that where, as it now appeared to be feasible, native title rights subsisted concurrently with in a non-native non-discriminatory fashion by acquiring and extinguishing both species of rights. title rights, any power of acquisition was exercised However, the appellants submit that this proposal miscarried and was not fully translated into s 24MD(2). This is said to be so because unlike the repealed s 23, the new legislation does not meet the case where all that is present are native title rights and there are no subsisting non-native title rights which might also be acquired and extinguished. If Subdiv M applies to a future act then, subject to the provisions in Subdiv P dealing with the right to negotiate, that act is valid. This follows from s 24MD(1). The critical provision is s 24MD(2). This provides (par (c)) that a compulsory acquisition will extinguish the whole or part of the relevant native title rights and interests if three conditions are satisfied. These are contained in pars (a), (b) and (ba). First, the act must be the compulsory acquisition of the whole or part of any native title rights and interests under a law (in the present case of the Territory) that permits both the compulsory acquisition by the Territory of native title rights and interests and the compulsory acquisition of non-native title rights and interests in relation to land or waters (par (a)). The LAA is such a statute. Secondly, the practices and procedures adopted in acquiring the native title rights and interests must not be such as to cause the native title holders a disadvantage which is greater than that caused to the holders of non-native title rights and interests when their rights and interests are acquired (par (ba)). The critical condition for the operation of the extinguishment permitted by s 24MD(2) is that found in par (b). This condition is in the following terms: "the whole, or the equivalent part, of all non-native title rights and interests, in relation to the land or waters to which the native title rights and interests that are compulsorily acquired relate, is also acquired (whether compulsorily or by surrender, cancellation or resumption or otherwise) in connection with the compulsory acquisition of the native title rights and interests". (emphasis added) The appellants fix upon the word "all" as requiring the presence of at least some non-native title rights. However, the word "all" has various meanings and shades of meaning. It may be used in the sense of "any whatever", as in the phrases "denial of all responsibility" and "beyond all reasonable doubt". It may be used in the sense of "such number as proves to be the case". Observations by Lord Bingham of Cornhill in R (Quintavalle) v Secretary of State for Health24 are pertinent here: "The court's task, within the permissible bounds of interpretation, is to give effect to Parliament's purpose. So the controversial provisions should be read in the context of the statute as a whole, and the statute as a whole 24 [2003] 2 AC 687 at 695. should be read in the historical context of the situation which led to its enactment." Thus, in par (b) of s 24MD(2) the phrase "all non-native title rights" must be read against the legislative history detailed above in these reasons. With that in mind, it would be an odd construction which read par (b) of s 24MD(2) as denying, contrary to what had been the case under the previous s 23(3), the possibility of compulsory acquisition where all that existed for that acquisition were native title rights and interests. The better construction of the paragraph treats "all" as identifying such non-native title rights and interests as may exist in relation to the land or waters in question. Put shortly, "all" may be read as "any". Counsel for the Commonwealth Attorney-General pointed to an example of the mischief to which par (b) is addressed; a situation that after Wik could have arisen under the previous s 23(3). This was the compulsory acquisition in land the subject of a pastoral lease of the native title interests only, leaving the pastoral lessee to enjoy that interest without any concurrently existing native title interests. To take par (b) further by insisting that before native title might be acquired there had to be other subsisting interests would be to reverse the effect of the NTA as previously it operated and would do so where there was no discriminatory operation of the compulsory acquisition law which conflicted with the scheme of the RDA and the NTA. It follows that the appeal respecting the construction of s 24MD(2) fails. Orders The appeal should be dismissed with an order for costs in favour of the first respondent. Kirby KIRBY J. This is an appeal from a judgment of the Court of Appeal of the Supreme Court of the Northern Territory25. That Court's orders allowed an appeal from orders made in the Supreme Court, at first instance, by Angel J26. The primary judge had held that the notices of proposal and notices of proposed compulsory acquisition, purportedly issued by the Minister for Lands, Planning and Environment of the Northern Territory ("the Minister") with respect to the land in issue in the proceedings, were invalid and of no effect. The primary judge reached this conclusion on the basis of his analysis of the Lands Acquisition Act (NT) ("the LAA"). There followed an appeal to the Court of Appeal. The Court of Appeal allowed the appeal, ordering that the challenge to the decision of the Minister compulsorily to acquire the subject land be wholly dismissed. Unless reversed by this Court, the appellants' challenge to the acquisition of their native title interest in the land will therefore fail. It was to contest such an outcome that the appellants sought, and obtained, special leave to appeal to this Court. A majority of this Court27 upholds the orders of the Court of Appeal. Accordingly, by inference, the acquisitions will now go ahead. I accept that, as the other reasons in this Court demonstrate, if a purely literal approach is taken to the language of the material provisions of the LAA, read against the statutory history of those provisions and together with provisions of the Crown Lands Act (NT) ("the CLA") and the Native Title Act 1993 (Cth) ("the NTA"), a conclusion favourable to the Minister can be persuasively explained. However, another conclusion is open and in my view it is the preferable view of the legislation. In deciding the appeal, on the issue that is critical for my conclusion and orders, I am affected by considerations of legal authority, legal principle and legal policy that I will identify. These demand respect for the legal rights to property of private individuals in Australia generally, and in particular the legal rights of Aboriginal Australians to what has become known (perhaps unfortunately) as "native title" to their land. Subject to a constitutional question, which was not argued but which it will be necessary to mention28, the legislature of the Northern Territory might, by express language, overcome the ambiguity in 25 Minister for Lands, Planning and Environment v Griffiths (2004) 14 NTLR 188. 26 Griffiths v Lands and Mining Tribunal (2003) 179 FLR 241. 27 Gleeson CJ; Gummow, Hayne and Heydon JJ in joint reasons; Crennan J agreeing with both; Kiefel J and I dissenting. 28 See below at [78]-[86]. Kirby the LAA that is crucial to my determination. However, having failed to enact specific and unambiguous provisions in the LAA, authorising the "private to private" acquisitions purportedly effected in this case, the general language of the LAA relied on by the Northern Territory Minister does not support the acquisitions envisaged in the notices issued by the Minister. It follows that the notices of proposal and notices of proposed compulsory acquisition were invalid. The primary judge was correct to set them aside. This Court should restore the primary judge's orders. It should do so to uphold, in case of ambiguity and uncertainty, the well-established principles of the common law that are here invoked by the appellants on behalf of the Aboriginal native title holders. The facts and legislation The facts: The background facts are set out in the joint reasons of Gummow, Hayne and Heydon JJ ("the joint reasons")29. However, it is desirable to add some more detail. The appellants, Alan Griffiths and William Gulwin, brought the present proceedings on behalf of the Ngaliwurru and Nungali peoples. The Ngaliwurru and Nungali peoples are a community of Aboriginal Australians who derive from a part of the north-west of the Northern Territory of Australia surrounding Timber Creek. That town was described in the Court of Appeal by Mildren J30: "Timber Creek is a small town in the Northern Territory located on the Victoria Highway 285 km west of Katherine and 193 km east of the Western Australian and Northern Territory border. Although the town has existed for well over a century, it was not until June 1975 that Timber Creek was gazetted as a town under the provisions of the former Crown Lands Ordinance, and it has remained proclaimed as a town ever since. The boundaries of the town straddle Victoria Highway. In addition to a number of quite small allotments there are a number of larger allotments within the boundaries of the town." As was recognised by the Full Court of the Federal Court of Australia in related proceedings31, the Ngaliwurru and Nungali peoples had maintained their long-standing connection with the Timber Creek district in spite of early violent 29 Joint reasons at [9]-[18]. 30 (2004) 14 NTLR 188 at 202-203 [43]-[44]. 31 Griffiths v Northern Territory of Australia (2007) 243 ALR 72. Kirby contact with European settlers and, later, their involvement in the cattle station economy that developed in the vicinity32. The history of legal dealings in one of the lots concerned (Lot 109) is in some ways similar to that of the traditional lands of the Wik and Thayorre peoples, the Aboriginal communities described in Wik Peoples v Queensland33. In the case of the Ngaliwurru and Nungali peoples, there had been pastoral leases over the land. However, there was an important difference. In the case of the Wik and Thayorre, the land in question was still subject to a pastoral lease, granted under Queensland legislation. In the case of the Ngaliwurru and Nungali people's land, the pastoral leases in respect of Lot 109 near Timber Creek had lapsed. The only legal interests in the lots of land, the subject of the impugned notices, were those of "the Crown", represented by the Government of the Northern Territory, and such interests as still belonged to the Ngaliwurru and Nungali peoples. Before the decision of this Court in Mabo v Queensland [No 2]34, the interests of the Ngaliwurru and Nungali peoples were not treated by Australian law as legal interests at all. However, following the decisions of this Court in Mabo, reaffirmed in Wik, Australian law belatedly recognised the potential of interests in land, such as those of the Ngaliwurru and Nungali peoples, to qualify as legal interests that might be upheld in the nation's courts. Because the land in question in this appeal was unalienated Crown land, with no inconsistent interest granted to others, the situation of the land at Timber Creek presents (subject to proof) the classic circumstance in which Australian law gives recognition to an established Aboriginal native title. It does so without legal discrimination occasioned by the Aboriginal race of the traditional owners. It does so in accordance with the common law as modified by the provisions of the NTA, as enacted by the Federal Parliament in 1993 with later amendments, including in 1998, following the Wik decision35. At the time of the proceedings before the primary judge and also before the Court of Appeal, the claim by the Ngaliwurru and Nungali peoples to native title over the vacant Crown land situated within the town of Timber Creek was undetermined. In fact, no claim to such title had been made before the first notice of proposed acquisition was published. The events concerning one lot, Lot 109, are described in the reasons of Mildren J in the Court of Appeal36: 32 Griffiths (2007) 243 ALR 72 at 78-79 [14]-[18]. 33 (1996) 187 CLR 1 at 67-68; [1996] HCA 40 ("Wik"). 34 (1992) 175 CLR 1; [1992] HCA 23 ("Mabo"). 35 NTA as amended by the Native Title Amendment Act 1998 (Cth). 36 (2004) 14 NTLR 188 at 203 [44]. Kirby "From 1981 to 1997 grazing licences over [Lot 109] were held under the [CLA] by one Lloyd Fogarty, either in his own right or in the right of a company in which he has a significant interest, namely Warren Pty Ltd. [Together "Fogarty"] … During this time, Fogarty developed this land through fencing facilities for branding, horning, spraying, pest treatment, weaning onto improved pasture and tailing. Fogarty estimated that the cost of improvements made to the land were worth $50,000. On 25 September 1997 Fogarty applied under the [CLA] to purchase the lot. The application was favourably received by the Minister and on 2 February 2000 a notice of proposed acquisition of all interests in Lot 109 including native title interests, if any, in the lot was published. On 11 May 2000 a native title claim was filed together with a notice of objection to the acquisition by the present [appellants]." The Fogarty interests also applied to purchase Lot 47, which was likewise the subject of a notice of proposed acquisition, published on 30 August 2000, and a notice of proposal, dated 4 September 2000. The appellants had filed a native title claim in respect of that Lot on 10 December 199937. Subsequently, following requests received for the release of land for commercial and/or tourism-related purposes, certain other lots in the town (Lots 97, 98, 99, 100 and 114) were the subject of a notice of proposed acquisition, published on 24 January 2000, and a notice of proposal dated 2 February 2000. On 11 May 2000, the appellants filed a native title claim in respect of those lots. The inference is inescapable that the Ngaliwurru and Nungali peoples, living in and near Timber Creek, would have continued to use the land in harmony with the activities of the Fogarty interests, at least for a time, had the purchase applications not been made by Fogarty (and had the desire to purchase land in the town not been expressed by other interests), resulting in the Minister's move to acquire all interests, notably the native title interests, in the specified lots. It was those moves that propelled the Ngaliwurru and Nungali peoples to invoke the protection of their interests by the Australian courts. To secure such protection, the Ngaliwurru and Nungali peoples initiated a two-pronged endeavour. The first was an urgent move to object to the Minister's proposed acquisitions of the identified lots under the LAA. The second was a dependent move involving a substantive application to the Federal Court of Australia for a determination, under the NTA s 13, that the Ngaliwurru and 37 Although it pre-dates the notice at issue in the proceedings, the claim appears to have followed a notice of proposal dated 3 September 1999 and a notice of proposed acquisition published on 1 September 1999, which the subsequent notice stated should be disregarded. Kirby Nungali peoples held native title in the subject (and other) land in the town of Timber Creek. A determination under the NTA was essential to any entitlement of the Aboriginal claimants to "compensation on just terms to the native title holders" for any acquisition of their native title interests that might be found to have lawfully occurred38. More fundamentally, establishment of such native title interests would, at once: identify the standing of the Ngaliwurru and Nungali peoples, in law, to object to the compulsory acquisitions proposed by the Minister; . establish the nature and extent of the Aboriginal claimants' interests in the . help to explain the significance for those peoples of the propounded operation of the LAA upon their interests in this particular case. subject land; and It is only by appreciating these features of the factual background, in which the LAA was said to apply, that the arguments of the Ngaliwurru and Nungali peoples in this Court will be understood. A determination in favour of the Ngaliwurru and Nungali peoples' claim to native title to vacant Crown land within Timber Creek, and to Timber Creek itself, was made by the Federal Court of Australia in August 200639. In November 2007, after the hearing of the present appeal by this Court, the Full Court of the Federal Court confirmed that determination, whilst varying some of its detail40. The present appeal fails to be decided on that footing. The legislation: The respective rights at law of the Ngaliwurru and Nungali peoples (represented by the appellants) and of the Minister attempting compulsory acquisition under the LAA are not to be decided at a level of broad generality. Instead, they are to be resolved by a close consideration of the language and application of the LAA, determined against the background of the CLA, the NTA and other material statutory provisions. 38 NTA, s 23(3). See joint reasons at [37]. 39 Griffiths v Northern Territory of Australia (No 2) [2006] FCA 1155. 40 Griffiths v Northern Territory (2007) 243 ALR 72. Kirby The last-mentioned provisions include the federal laws governing compulsory acquisition of interests in land in the Northern Territory before self- government41 and the provisions of the Northern Territory (Self-Government) Act 1978 (Cth)42 itself. The federal legislation, previously applicable to Territory acquisitions, included (in an important respect) a limitation upon compulsory acquisitions by requiring that they be "for a public purpose" – a phrase conventional in Australian legislation for such acquisitions and partly reflecting the language of the power afforded to the Federal Parliament by s 51(xxxi) of the Constitution to make laws with respect to: "the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws". After self-government was granted to the Northern Territory in 1982, the LAA was amended by the Territory legislature to provide, subject to the Act, that the Minister might "under this Act acquire land"43. Further amendments were enacted in 199844, introducing the broad language upon which the Minister placed chief reliance in these proceedings, relevantly45: "Subject to this Act, the Minister may acquire land under this Act for any purpose whatsoever – if the pre-acquisition procedures in Parts IV and IVA as applicable have been complied with – by compulsory acquisition by causing a notice declaring the land to be acquired to be published in the Gazette". 41 Such as the Lands Acquisition Act 1906 (Cth), s 5 ("public purpose") and s 13 and Lands Acquisition Act 1955 (Cth), s 5(1) ("public purpose") and s 6. See joint reasons at [24]. 42 Joint reasons at [24]. 43 Lands Acquisition (Amendment) Act 1982 (NT), s 10. See joint reasons at [27]. 44 Lands Acquisition Amendment Act (No 2) 1998 (NT), s 10. See joint reasons at 45 LAA, s 43(1)(b) (emphasis added). Kirby The approach to interpreting the legislation adopted by the Minister, pointing not only to the text of the legislation but also to the context and extrinsic documents (including those explaining the process of legislative history), reflects the greater emphasis placed in recent times on giving effect to the purpose of legislation in determining its meaning46. The arguments in this appeal have concerned, primarily, the suggested limitations which the Ngaliwurru and Nungali peoples urged were to be implied into the grant of power to the Minister to acquire land under the LAA "for any purpose whatsoever". However, the appellants secondly argued that each of the proposed acquisitions, if otherwise within the power conferred by the LAA, s 43(1)(b), would produce a result repugnant to the provisions of the federal NTA, s 24MD. They would thus involve a direct collision between the substantive operation respectively of the applicable Territory and federal law. Upon this hypothesis, the appellants submitted that the federal law would prevail. The Territory law would be invalid to the extent of the inconsistency47. The issues Two statutory issues: In resolving the arguments advanced for the Ngaliwurru and Nungali peoples, two statutory issues arise for the decision of this Court. Those issues are explained in the joint reasons. They are, in brief: The ambit of compulsory acquisition issue48; and The requirement of outstanding interests issue49. These issues are presented in the alternative. For the appellants to succeed in this appeal, and to secure the restoration of the orders of the primary judge, it 46 Bropho v Western Australia (1990) 171 CLR 1 at 20; [1990] HCA 24; CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; [1997] HCA 2; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 384-385 [78]-[81]; [1998] HCA 28; Foots v Southern Cross Mine Management Pty Ltd (2007) 82 ALJR 173 at 194-196 [96]; 241 ALR 32 at 56-59; [2007] HCA 56. 47 Northern Territory v GPAO (1999) 196 CLR 553 at 579-583 [49]-[60], 636-638 [219]-[223]; [1999] HCA 8. 48 Joint reasons at [19]. 49 Joint reasons at [20]. Kirby would be sufficient for them to prevail on either of the foregoing issues. In my view, the appellants succeed on the first. I acknowledge the force of the construction argument offered by Gleeson CJ50 and the joint reasons51 against the interpretation of the NTA urged for the appellants on the second statutory issue. I am not inclined to disagree with the resolution of that issue favoured by their Honours. However, the larger considerations that are presented by the determination of the first issue are not involved in deciding the second issue. I will therefore confine my reasons to the first issue. It is sufficient to do so because, in my opinion, the Ngaliwurru and Nungali peoples succeed on that issue. Specificity and high particularity are required for the Northern Territory LAA to permit the Minister to acquire the appellants' native title interests compulsorily for the private benefit of the Fogarty interests and other private interests. Such specificity and particularity are absent from the LAA. That Act, and the apparently large grant of powers to the Minister to acquire land "for any purpose whatsoever", must be read accordingly. That conclusion is fatal to the Minister's notices and to his proposed acquisitions of the appellants' native title rights and interests in the subject land. Two constitutional questions: Before showing why this is so, I must mention two constitutional questions. As I have shown, in the second statutory issue, an express constitutional question was raised by the Ngaliwurru and Nungali peoples, founded on the suggested intersection of the federal NTA and the Northern Territory LAA. Pursuant to s 78B of the Judiciary Act 1903 (Cth), the appellants gave notice of constitutional questions in September 2007, shortly before the argument of the appeal in this Court. On the return of the appeal, counsel appeared on behalf of the Attorneys-General of the Commonwealth and of New South Wales and Western Australia, effectively to support submissions advanced by the Northern Territory Minister. In view of the approach that I will adopt to the second statutory issue, it is unnecessary for me to address this first constitutional question. However, another constitutional question lurks in the background. It was not addressed in written or oral arguments of any party or of the interveners. It was a question raised in, but not finally decided by, the decision of this Court in 50 Reasons of Gleeson CJ at [4]-[8]. 51 Joint reasons at [43]-[51]. Kirby Newcrest Mining (WA) Ltd v The Commonwealth52. The question is: how does the grant of legislative power to the Federal Parliament to make laws "for" the government of any Territory of the Commonwealth, pursuant to s 122 of the Constitution, interact with the limitation on the power of that Parliament where the "just terms" provisions apply, pursuant to s 51(xxxi)? In Newcrest, Gaudron J53 and Gummow J54 favoured the view that s 51 and s 122 "should be read together". As Gummow J remarked in that decision: "Section 122 is not to be torn from the constitutional fabric."55 This was also my view56. I shall never cease to protest against attempts to treat the territories of the Commonwealth as somehow disjoined from the Commonwealth57. Nevertheless, in Newcrest, Toohey J, who otherwise agreed with Gaudron J, Gummow J and me, disagreed that the contrary authority of Teori Tau v The Commonwealth58 "should no longer be treated as authority denying the operation of the constitutional guarantee in s 51(xxxi) of the Constitution in respect of laws passed in reliance upon the power conferred by s 122 of the Constitution"59. While noting the force of criticisms made by other members of the Court of the decision in Teori Tau, Toohey J held back from what he described as the "serious step to overrule a decision which has stood for nearly thirty years and which reflects an approach which may have been relied on in earlier years"60. It follows that, to this day, Teori Tau has not been formally overruled. Nevertheless, as a matter of constitutional principle, like Toohey J, Gaudron J 52 (1997) 190 CLR 513; [1997] HCA 38 ("Newcrest"). 53 (1997) 190 CLR 513 at 568. 54 (1997) 190 CLR 513 at 597-598. 55 (1997) 190 CLR 513 at 598. 56 (1997) 190 CLR 513 at 652-657. 57 cf Re Governor, Goulburn Correctional Centre; Ex parte Eastman (1999) 200 CLR 322 at 370-378 [123]-[143]; [1999] HCA 44. 58 (1969) 119 CLR 564; [1969] HCA 62. 59 Newcrest (1997) 190 CLR 513 at 560. 60 (1997) 190 CLR 513 at 560. Kirby and Gummow J in Newcrest, I regard the contrary conclusion on the operation of the Constitution as preferable. Teori Tau should have been overruled. All compulsory acquisitions of property in and for the Northern Territory under s 122 of the Constitution are subject to the limiting requirements of s 51(xxxi) of the Constitution. So much follows from the obligation to read the Constitution as a single legal document, giving appropriate effect to all of its provisions.61 The public purpose of all compulsory acquisitions under federal or Territory law has a constitutional origin. Unlike the Australian States62, it would not be open to the legislature of the Northern Territory (or to the Federal Parliament pursuant to a grant of self-government to that Territory) to circumvent the dual requirements for compulsory acquisition of property provided for in s 51(xxxi) of the Constitution. That is, it would not be open to the LAA, as a Northern Territory law, to provide for the acquisition of property otherwise than "on just terms" where such acquisition was from "any State or person". Moreover, any such acquisition of property would have to be "for any purpose in respect of which the Parliament has power to make laws". This would include the power (consistent with s 51(xxxi)) granted by s 122 in respect of laws "for the government of any territory". Having mentioned this second constitutional question, as a potential issue in the proceedings, I will pursue it no further. First, it was not expressly relied on by the Ngaliwurru and Nungali peoples. They had other legal fish to fry. Secondly, I would infer that it was not the subject of the notice given under the s 78B requirement. Thirdly, and in any case, I can resolve the present appeal in a way favourable to the appellants without invoking the "public purpose" requirements of the Constitution, so far as they are explicit or implicit in the language of s 51(xxxi). In leaving this question, however, I would point out that it would not be specially surprising if the legislative power of the Northern Territory, being part of the Commonwealth, a federal territory provided for in the federal Constitution, were subject to the equitable and public obligations imposed by the Constitution upon federal acquisitions of property. If that were so, the legislature of the Northern Territory might say that a Minister could acquire land "for any purpose whatsoever". However such a provision would be read down to conform to the equitable ("just terms") and public ("purpose in respect of which the Parliament has power to make laws") preconditions stated in s 51(xxxi) of the Constitution. 61 cf New South Wales v The Commonwealth (Work Choices Case) (2006) 229 CLR 1 at 208 [491], 243 [607]; [2006] HCA 52. 62 Durham Holdings Pty Ltd v New South Wales (2001) 205 CLR 399 at 408 [7], 432 [77]; [2001] HCA 7. Kirby Upon this approach, a compulsory acquisition for private purposes, so as to advance private interests, could fall outside the legislative power of the Northern Territory legislature. However, while the Ngaliwurru and Nungali peoples saw the acquisition of their native title interest in their traditional land to be outside the power of the Minister, they sought to reach that conclusion by a statutory rather than a constitutional route. The compulsory acquisitions provisions issue Belated recognition of native title: I return to the first statutory issue which is, in my opinion, determinative of the outcome of this appeal. Within a statutory provision purporting to permit the Minister to "acquire land … for any purpose whatsoever"63, and against the background of the amendments to the legislation for compulsory acquisition of interests in land in the Northern Territory64, where is the ambiguity? On what basis might the provisions of the LAA be read in a particular way so as to exclude the acquisition of the interests of the Ngaliwurru and Nungali peoples under the LAA? Although the language of the LAA is concededly very broad, and deliberately so when the predecessors for compulsory acquisitions of land in the Northern Territory are considered, a reflection on the arguments of the appellants sustains their contention that the apparently broad language does not extend so far as to permit the acquisitions proposed by the Minister, and notified, in the present case. The starting point involves a consideration of the fact that the interests of the Ngaliwurru and Nungali peoples are something more than a legal interest in land of an ordinary kind. True, native title interests are now recognised as legal interests, after more than a century and a half of denial by the Australian legal system65. The interests of the appellants are true legal interests which the courts of Australia will protect and defend. They are interests in "property" which, as this Court has acknowledged, involves a bundle of claims to which the law will 63 LAA, s 43(1)(b). 64 cf joint reasons at [24]-[31]. 65 Cooper v Stuart (1889), 14 App Cas 286 at 291 (PC). See also Attorney-General v Brown (1847) 1 Legge 312 at 316-318; Williams v Attorney-General (NSW) (1913) 16 CLR 404 at 439; [1913] HCA 33; Milirrpum v Nabalco Pty Ltd (Gove Land Rights Case) (1971) 17 FLR 141 and New South Wales v The Commonwealth (Seas and Submerged Lands Case) (1975) 135 CLR 337 at 438-439; [1975] HCA 58. Kirby give effect66. The common law recognises that such interests may be of value, whether or not they have an economic or market value67. Nevertheless, this Court will not ignore the fact that the property interests of the Ngaliwurru and Nungali peoples, now called by the Australian legal system native title interests, are not exactly the same in their origin and character as the property interests in land derived under the general common law and by statute, which make up most of the legal interests in "land" or "property" that may be acquired under enactments such as the LAA. A spiritual link to land: One of the important considerations that moved this Court, belatedly, to recognise the native title interests of indigenous peoples was the high significance attributed to their relationship to land by the laws and customs of Australia's indigenous peoples. For the indigenous peoples who maintained traditional associations with the lands of their ancestors, such interests connote a claim of a particular spiritual or quasi-spiritual character68. As a general and certainly a legal characteristic, this element is missing from the general common law governing interests in land in Australia. Whereas other interests in land in Australia will be interests of a purely social or economic character, it is essential to an understanding of the step taken by this Court in Mabo that the Court gave recognition to the special place of land in Aboriginal law and custom, and the distinctive spiritual quality inherent in it. This was, I believe, an important element in the arguments that persuaded this Court to take the very serious step of reversing the previous understandings of the common law and affording common law recognition to native title69. 66 Yanner v Eaton (1999) 201 CLR 351 at 365-366 [17]; [1999] HCA 53 ("Yanner"). See also Gray, "Property in Thin Air", (1991) 50 Cambridge Law Journal 252. The analysis of Professor Gray in this article was cited with approval by Gleeson CJ, Gaudron and Hayne JJ and myself in our joint reasons in Yanner at 67 cf Rogers v Nationwide News Pty Ltd (2003) 216 CLR 327 at 349 [67]; [2003] HCA 52. 68 Gray, "Equitable Property", (1994) 47(2) Current Legal Problems 157 at 181-188. See R v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327 at 356- 357; [1982] HCA 69 ("Toohey"); Mabo (1992) 175 CLR 1 at 29; cf at 156; Wik (1996) 187 CLR 1 at 215; Fejo v Northern Territory (1998) 195 CLR 96 at 98 (argument); [1998] HCA 58. 69 Mabo (1992) 175 CLR 1 at 41, 51, 57, 61; cf at 156. Kirby Thus, a fundamental distinction between the acquisition of ordinary interests in land and the existence of interests giving rise to native title in Australia is the special spiritual relationship that exists between the native title owners and the land. There is much authority from Australia and abroad that recognises that important spiritual link between indigenous peoples and their land. The Aboriginal peoples of Australia, including the Ngaliwurru and Nungali peoples, are bearers of this element common to most indigenous peoples. In Toohey, Brennan J stated that "Aboriginal ownership is primarily a spiritual affair rather than a bundle of rights."70 This statement of Brennan J was cited with approval by Gleeson CJ, Gaudron and Hayne JJ and myself in joint reasons in Yanner v Eaton71. The Court there specifically acknowledged that there is a "connection with the land"72, specifically, a "spiritual, cultural and social connection"73. In the Federal Court in Western Australia v Ward74, Beaumont and von Doussa JJ cited Toohey and specifically the statement of Brennan J extracted above75. In Ward, Beaumont and von Doussa JJ also referred to the "religious relationship" described by Blackburn J in Milirrpum v Nabalco Pty Ltd76, and to a "spiritual connection"77 and "religious or spiritual" relationship78. When Western Australia v Ward was considered by this Court79, Gleeson CJ, Gaudron, Gummow and Hayne JJ expressly affirmed that "[a]s is now well recognised, the connection which Aboriginal peoples have with 'country' is essentially spiritual"80. 70 (1982) 158 CLR 327 at 358. 71 (1999) 201 CLR 351 at 373 [37]. 72 (1999) 201 CLR 351 at 372-373 [37]. 73 (1999) 201 CLR 351 at 373 [38]. 74 (2000) 99 FCR 316. 75 (2000) 99 FCR 316 at 382 [242] per Beaumont and von Doussa JJ. 76 (1971) 17 FLR 141 at 167. 77 (2000) 99 FCR 316 at 382 [243]. 78 (2000) 99 FCR 316 at 483 [666]. See also De Rose v South Australia (2003) 133 FCR 325 at 418 [317] and Daniel v Western Australia [2003] FCA 666 at [422]. 79 (2002) 213 CLR 1; [2002] HCA 28 ("Ward"). 80 (2002) 213 CLR 1 at 64 [14]. Kirby Nothing in my reasons in Ward casts doubt on this principle.81 On the contrary, in that case I concluded that82: "It has been accepted that the connection between Aboriginal Australians and 'country' is inherently spiritual83 and that the cultural knowledge belonging to Aboriginal people is, by indigenous accounts, inextricably linked with their land and waters, that is, with their 'country'. In evidence, the … appellants described the 'land-relatedness' of their spiritual beliefs and cultural narratives. Dreaming Beings located at certain sites, for example, are narrated in song cycles, dance rituals and body designs. If this cultural knowledge, as exhibited in ceremony, performance, artistic creation and narrative, is inherently related to the land according to Aboriginal beliefs, it follows logically that the right to protect such knowledge is therefore related to the land for the purposes of the NTA84. Indeed, as stated in Yanner v Eaton85: 'an important aspect of the socially constituted fact of native title rights and interests that is recognised by the common law is the spiritual, cultural and social connection with the land.' It also follows that the right to protect cultural knowledge is, in my view, sufficiently connected to the area to be a right 'in relation to' land or waters for the purpose of s 223(1) of the NTA." This Court therefore took a significant step in Mabo in recognising the particular and distinctive relationship between indigenous peoples and their land. Brennan J (Mason CJ and McHugh J concurring) described it as a "connexion with the land"86; Deane and Gaudron JJ as a "special relationship"87; and 81 (2002) 213 CLR 1 at 241 [565], 246-247 [579]-[580]. 82 (2002) 213 CLR 1 at 247 [580]. 83 Toohey (1982) 158 CLR 327 at 357-358; cf The Commonwealth v Tasmania (1983) 158 CLR 1 at 158-159. 84 For evidence of the land-relatedness, see Western Australia v Ward (2000) 99 FCR 85 (1999) 201 CLR 351 at 373. 86 (1992) 175 CLR 1 at 70. 87 (1992) 175 CLR 1 at 86. Kirby Toohey J saw it as having significance to (among other things) "cultural or religious life"88. In The Commonwealth v Yarmirr89, this Court also referred to a "spiritual connection with a given 'country'"90. In a dissenting opinion in Members of Yorta Yorta Aboriginal Community v Victoria, Gaudron J and I highlighted the "spiritual connection" to land91. Although that opinion was stated in dissent, by the time Yorta Yorta was decided, this attribute of the native title rights of Aboriginal Australians was well settled as part of Australian common law. It marks that form of title off from all other interests in land given legal effect in Australia. In its earlier report, The Recognition of Aboriginal Customary Laws, the Australian Law Reform Commission also made reference to the relationship of Australian Aboriginals with their land. In particular, the Commission said that "[t]he link with land must never be forgotten in seeking to understand the structure and operation of Aboriginal customary laws."92 The report makes reference to a source that emphasised the reliance placed upon their land by Aboriginal peoples for "spiritual sustenance"93. The foregoing features of Aboriginal interests in land in Australia are not unique to the indigenous peoples of this country. Indeed, even a cursory glance shows that the same element in the interests of indigenous peoples in their land has been a marked feature of the claims made by indigenous peoples in virtually every society established by European settlers in the age of imperial dominion. Thus in New Zealand, the preamble to the Maori Land Act/Te Ture Whenua Maori Act 1993 (NZ) recognises that "land is a taonga tuku iho [treasure handed down by our ancestors] of special significance to Maori people". 88 (1992) 175 CLR 1 at 188. 89 (2001) 208 CLR 1; [2001] HCA 56. 90 (2001) 208 CLR 1 at 133 [298]. 91 (2002) 214 CLR 422 at 460 [104]; [2002] HCA 58. 92 Australian Law Reform Commission, The Recognition of Aboriginal Customary Laws, Report No 31, (1986) vol 1 at 155 [212] ("ALRC Report"). 93 ALRC Report, vol 2 at 126 [888], quoting Bell, Daughters of the Dreaming, (1983) Kirby Canadian jurisprudence places even greater emphasis upon occupancy of lands for the purposes of land title claims. It is, however, recognised that if such94 "lands are so occupied, there will exist a special bond between the group and the land in question such that the land will be part of the definition of the group's distinctive culture." Further, in R v Marshall; R v Bernard95 in the Supreme Court of Canada, LeBel J stated that96: "the group's relationship with the land is paramount. To impose rigid concepts and criteria is to ignore aboriginal social and cultural practices that may reflect the significance of the land to the group seeking title." Significance for acquisition of native title: Against the background of these authorities, for this Court now to approach the present contest as if the interests in land of Aboriginal communities in the Northern Territory of Australia were wholly indistinguishable from non-indigenous interests in land would, in my view, be to miss the essential step reflected in the belated legal innovation expressed in Mabo. That new legal principle accepted that the common law of Australia would give recognition to native title without altering that title or imposing on it all of the characteristics of other interests in land derived from the different (and originally feudal) law of land tenures inherited by Australian law from English law upon settlement97. Whatever may still be the situation elsewhere in Australia, a significant part of the Northern Territory comprises unalienated Crown land. Indigenous Aboriginal peoples constitute more than a quarter of the population of the Northern Territory. Many still live according to traditional ways. To pretend that, after Mabo and the successive iterations of the NTA, native title in the Northern Territory is no more than another interest in land, functionally and legally the same as the interests recognised under the inherited system of land tenures, would be to ignore both legal and social reality. It would be to distort the facts as they exist in actuality. It would be to overlook and underrate the fundamental change to Australian law that followed Mabo and that despite the fact that such change was accepted and reflected in the provisions of the NTA. 94 Delgamuukw v British Columbia [1997] 3 SCR 1010 at 1089 [128] per Lamer CJ. 95 [2005] 2 SCR 220. 96 [2005] 2 SCR 220 at 276-277 [136]. 97 (1992) 175 CLR 1 at 58-59, 110, 194-195. Kirby Importantly, it would needlessly involve a failure of our law to live up to the promise of Mabo98. Native title in Australia is a special, distinctive and legally unique interest that is now given recognition by Australian common and statute law. Subject to the Constitution, like any other legal interest, it is not immune from legislative modification. Some modification has indeed occurred. legally unusual Nevertheless, against the background of the history of previous non- recognition; the subsequent respect accorded to native title by this Court and by the Federal Parliament; and the incontestable importance of native title to the cultural and economic advancement of indigenous people in Australia, it is not that any deprivations and unreasonable or extinguishment of native title, so hard won, will not occur under legislation of any Australian legislature in the absence of provisions that are unambiguously clear and such as to demonstrate plainly that the law in question has been enacted by the lawmakers who have turned their particular attention to the type of deprivation and extinguishment that is propounded. In Mabo Brennan J cited authorities from Canada, the United States and New Zealand that support the contention that "native title is not extinguished unless there be a clear and plain intention to do so"99. to expect It follows that it is one more aspect of the special character of native title in Australia to expect in such matters that a legislature, before effecting modification and still more abolition of such title, will have: . expressly addressed that outcome in the legislative text; 98 See Pearson, "The High Court's Abandonment of 'The Time-Honoured Methodology of the Common Law' in its Interpretation of Native Title in Mirriuwung Gajerrong and Yorta Yorta", (2003) 7(1) Newcastle Law Review 1 at 4; see also Tehan, "A Hope Disillusioned, an Opportunity Lost? Reflections on Common Law Native Title and Ten Years of the Native Title Act", (2003) 27 Melbourne University Law Review 523 at 571. 99 (1992) 175 CLR 1 at 64. See for example Lipan Apache Tribe v United States 180 Ct Cl 487 at 492 (1967) in which Davis J states the requirement of a "plain and unambiguous" act and a "'clear and plain indication' in the public records"; Calder v Attorney-General of British Columbia [1973] SCR 313 at 404 per Hall J; Spence and Laskin JJ concurring; see also at 402 where Hall J states that a "legal right" to "Indian title" cannot "be extinguished except by … competent legislative authority, and then only by specific legislation". For discussion, see Slattery, "Understanding Aboriginal Rights", (1987) 66 Canadian Bar Review 727 at 749, 765-766. Kirby . thereby assumed electoral accountability before the community for what it . provided clear procedures and terms according to which the acquisition is doing100; and and deprivation will be effected. In the absence of such legislative particularity, any impugned law will be interpreted protectively and construed in favour of indigenous land rights. In New Zealand Maori Council v Attorney-General101, the New Zealand Court of Appeal interpreted the State-Owned Enterprises Act 1986 (NZ) protectively, reading provisions of the Act so as to comply with the indigenous land rights principles evidenced in the Treaty of Waitangi102. More generally, the Supreme Court of Canada has held in Nowegijick v The Queen that "statutes relating to [indigenous peoples] should be liberally construed … in favour of the [indigenous peoples]."103 In addition to the aforementioned attributes of democratic and electoral responsibility, Australian legislatures, on this subject, must be held accountable to the pages of history. If they intend deprivation and extinguishment of native title to occur, reversing unconsensually despite the long struggle for the legal recognition of such rights, then they must provide for such an outcome in very specific and clear legislation that unmistakably has that effect. These hypotheses constitute no more than a reflection, in the particular circumstances of deprivation of native title interests of Australian Aboriginals, of 100 R v Home Secretary; Ex parte Simms [2000] 2 AC 115 at 131; Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 492 [30]; [2003] HCA 2; Daniels Corp International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 at 582 [106]; [2002] HCA 49; Chang v Laidley Shire Council (2007) 81 ALJR 1598 at 1610 [56]; 237 ALR 482 at 496; [2007] HCA 37 101 [1987] 1 NZLR 641. 102 [1987] 1 NZLR 641 at 657-658 and 668 per Cooke P. Unlike the LAA, the New Zealand Act specifically referred to the Treaty of Waitangi (and thus to indigenous land rights) (see for example s 9). However, the Court was mindful to read certain provisions (for example s 27) so as to provide "added Maori protection". See Nijman, "Ascertaining the Meaning of Legislation – A Question of Context", (2007) 38 Victoria University of Wellington Law Review 629 at 653-656. 103 [1983] 1 SCR 29 at 36 (emphasis added). See also Slattery, "Understanding Aboriginal Rights", (1987) 66 Canadian Bar Review 727 at 766. Kirby the general principle of the common law of Australia requiring that legislation depriving individuals of established legal rights must be clear and unambiguous. General language will not suffice. And in this particular context there are special historical, ethical and national reasons that explain why Australian law insists both on strictness and explicitness. Protection of democratic accountability: It might be argued that the general principle defensive of individual rights (including in respect of interests in land) needs to be modified in the current age to accord with the greatly expanded role of governmental activities and of legislation in providing for communal interests. It cannot be denied that, today, the protection of individual rights must find their place in the general context of legislation designed to uphold the interests of the community in a broad sense104. However, of their nature, Aboriginal native title rights, such as those asserted by the Ngaliwurru and Nungali peoples in this appeal, are not the same as individual rights asserted for the exclusive benefit of those persons or corporations that possess them. Native title rights in Australia are communal in character. They belong to the indigenous community concerned. If an Aboriginal community is to be deprived of such rights, by what (at the very least) is an unusual legislative course involving an atypical purpose of governmental acquisition of property, it is not unreasonable that such a measure should be expressly identified, considered and approved by the legislature to whose enactment that consequence is later attributed. The purpose of the subject acquisitions is atypical in the following important respect. The acquisitions proposed by the Minister are not intended to carry out a form of "private to public" transaction, with subsequent public use of the land in question for a public purpose. Instead, they are essentially to carry out a "private to private" transaction. The indicated purposes are unconnected with any need or use of the land by the Northern Territory itself, its government, a government department, statutory agency or office-holder on behalf of the public. Instead, it is no more than the acquisition of the private (but communal) interests of the Ngaliwurru and Nungali peoples in the land over which they have claimed (and now established) their native title, for the private benefit of the Fogarty interests and other private interests which are wholly commercial in character. Expressed another way the acquisition is for a non-governmental rather than a governmental purpose105. 104 cf Prentice v Brisbane City Council [1966] Qd R 394 at 406. 105 cf reasons of Kiefel J at [172] and [181]. Kirby On the face of things, where the native title interests of the appellants are acquired for such private purposes, it would be reasonable to expect the legislature of the Northern Territory to provide expressly for such a transfer of interests through intervention of public compulsory acquisition. It is not reasonable to oblige courts to discover the authority for such a course in the general language of the LAA, enacted and applied against the background of almost a century of the restriction of compulsory governmental acquisitions in Australia to those for identified public purposes. Only by the courts' insisting upon express provisions to authorise such "private to private" acquisitions would the legislature be forced to consider specifically whether it should enact such a distinctive law and with what safeguards. Only in that way is that legislature obliged to assume political accountability and democratic answerability to the electors for what it is said to have enacted. to a suggested I accept that the requirement of democratic accountability and express lawmaking for that purpose cannot be pressed to extremes106. However, the compulsory acquisition of Aboriginal native title interests in Australia is incontestably a most sensitive question. Not the least is this so because of the history of earlier denials and deprivations. Against that background, it is proper to apply, legislative authorisation of deprivation and extinguishment of native title interests belonging to an Aboriginal community in the Northern Territory, a rule obliging the terms of the authorisation to be specific and particular. Especially so, where the acquisition is for the immediate enrichment of private commercial interests (a "private to private" acquisition) and not for the conduct on the acquired land of public activities of the acquiring government ("private to public"). Upon one view, the latter type of acquisition will be tolerated in a democratic society because undertaken for an identified public benefit, not just the private gain of another107. The same is not self- evidently true in the case of a "private to private" acquisition where publicly beneficial outcomes depend upon hopes and expectations rather than the legal character of the acquiring beneficiary. Exceptionality of compulsory acquisition: From the earliest days of compulsory acquisition legislation in England and Australia, statutory provisions 106 Dossett v TKJ Nominees Pty Ltd (2003) 218 CLR 1 at 19-23 [64]-[75]; [2003] HCA 69; cf Al-Kateb v Godwin (2004) 219 CLR 562 at 577 [19]; [2004] HCA 37; Chang (2007) 81 ALJR 1598 at 1614 [81]-[83]; 237 ALR 482 at 501. 107 Gray, "There's No Place Like Home!" (2007) 11(1) Journal of South Pacific Law Kirby affording powers to governments or their agencies to acquire the property interests of individuals have been interpreted with considerable vigilance to protect those affected against abuse. In Webb v Manchester and Leeds Railway Co108, Lord Cottenham LC explained, in the context of the legislation under consideration there109: "The powers are so large – it may be necessary for the benefit of the public – but they are so large, and so injurious to the interests of individuals, that I think it is the duty of every Court to keep them most strictly within those powers; and if there be any reasonable doubt as to the extent of their powers, they must go elsewhere and get enlarged powers; but they will get none from me, by way of construction of their Act of Parliament." The language in which his Lordship stated his disinclination to import the propounded power of acquisition may, it is true, appear somewhat outdated in the conditions of contemporary Australia. But it may not be so inapplicable to the particular problem that is now before this Court, namely a suggested deprivation and extinguishment of hard-won native title interests of indigenous Australians for the immediate private gain of commercial interests of other private interests, without needing the consent of the indigenous owners and their satisfaction with the price to be paid for the peculiar value to them of their native title interests. The statement in Webb was cited by this Court in Clunies-Ross v The Commonwealth110. It still carries more than a grain of truth. Exceptionality of "private to private": If acquisition for public purposes is still ordinarily treated by the law, in a society such as Australia's, as exceptional, and tolerable only because performed for the benefit of the community as a whole, acquisition of one person's private interests, so as to advantage a different person's private interest, is even more exceptional. In the present case, the Minister (and his Department) repeatedly made it clear that "private to private" transfer of interests was what they had in mind. Briefing the Minister on a sale application over one of the lots affected, Lot 47, the Department in August 1999 informed the Minister of the intended 108 (1839) 4 My & Cr 116 [41 ER 46]. 109 (1839) 4 My & Cr 116 at 120 [41 ER 46 at 47-48]. See also Gard v Commissioners of Sewers (1885) 28 Ch D 486 at 506, 511-512. 110 (1984) 155 CLR 193 at 201; [1984] HCA 65. Kirby offer of a Crown lease, convertible to freehold, in favour of the Fogarty interests. This led in September 1999 to the publication of a notice of proposed acquisition signifying the Territory's intention to acquire "[a]ll interests, including native title rights and interests (if any)" in the land. The same notice also identified the manner in which the Territory proposed to deal with the land, if so acquired, namely to "Grant a Crown lease term under the provisions of the Crown Lands Act to [a Fogarty company] for the purpose of goat breeding". The same intention was made clear in the briefing to the Minister in January 2000 in respect of the proposed sale application over Lot 109, except that the envisaged purpose was stated to be "cattle husbandry". Lots 97, 98, 99, 100 and 114 were earmarked for auction "for the purpose of commercial/tourism development". In a letter of April 2000, the Minister offered to approve a grant to the Fogarty interests of an estate in fee simple over Lot 109 and a Crown lease convertible to an estate in fee simple over Lot 47, subject to conditions, including that "any native title rights currently being acquired by my Department". The letter went on to state that "[t]he compensation required will be met by the Government, however, the company may be required to contribute to the administrative costs of acquisition". In May 2000, the Department wrote to the Northern Land Council informing it of the intention "to acquire and extinguish native title rights and interests over the … Lots as with all proposed acquisitions". Thus, throughout these dealings, the purpose and object of the compulsory acquisition was clear. It was immediately to extinguish the private interests of the Ngaliwurru and Nungali peoples so as to enhance the private interests of the Fogartys and others. They were therefore classic "private to private" acquisitions. They involved taking from one private interest holder (with economic and other interests in the land) to enable it to be sold or leased to other private bodies for their entrepreneurial purposes. In his majority reasons for the Supreme Court of the United States in Kelo v City of New London111, Stevens J acknowledged: "[I]t has long been accepted that the sovereign may not take the property of A for the sole purpose of transferring it to another private party B, even though A is paid just compensation." In the same decision, O'Connor J (with whom Rehnquist CJ, Scalia and Thomas JJ joined) wrote in her dissenting reasons, to similar effect112: 111 545 US 469 at 477 (2005). Kirby "Over two centuries ago, just after the Bill of Rights was ratified, Justice Chase wrote: 'An Act of the Legislature (for I cannot call it a law) contrary to the great first principles of the social compact, cannot be considered a rightful exercise of legislative authority … A few instances will suffice to explain what I mean … [A] law that takes property from A and gives it to B: It is against all reason and justice, for a people to entrust a Legislature with SUCH powers; and, therefore, it cannot be presumed that they have done it.'" Of course, the Justices were writing in Kelo in the context of the requirement of the "takings" clause in the Fifth Amendment to the United States Constitution. That guarantee is applied to compulsory acquisitions by the States in that country by the operation of the Fourteenth Amendment. The judicial words cannot be imported unreservedly for operation as part of the common law of Australia. On the other hand, the affront expressed both by the majority and the minority of the Supreme Court of the United States in Kelo to pure forms of "private to private" transfer of property under legal compulsion (specifically of interests in land) and the long acceptance of that response to such transactions in our legal tradition, is, I consider, as justified in Australia as it is in the United States. Citizens will accept the compulsory acquisition of their interests in land if this is done according to law, with the payment of just compensation and for the identified public purposes of the lawmaker (assured because of the legal character and obligations of the public acquiring authority). They will accept that, in such circumstances, their private interest must give way to the lawmaker's perception of the community's interest. But an acquisition from A in order to transfer its interests in land to B for B's individual commercial gain is one of an entirely different character. As Professor Kevin Gray of the University of Cambridge has observed113: "[T]he assertion of a private form of eminent domain – the 'one-to-one transfer of property' for private rather than public benefit – remains 112 545 US 469 at 494 (2005), citing Calder v Bull 3 US 386 at 388 (1798) (original emphasis). 113 Gray, "There's No Place Like Home!", (2007) 11(1) Journal of South Pacific Law 73 at 74-75 (citations omitted). Kirby anathema in most legal traditions. This is so even though the taking is coupled with an offer of full monetary compensation. It seems wrong that the coercive power of the state should be used to force an unconsented transfer from A to B where the operation of the open market has failed to generate the required bargain by means of normal arm's length dealing." In another decision of the Supreme Court of the United States114, that Court explained that a "purely private taking could not withstand the scrutiny of the public use requirement; it would serve no legitimate purpose of government and would thus be void". This consideration presents what Professor Gray describes as a "fair consensus that the practice of private eminent domain is unacceptable in modern civilised legal communities"115, although he notes that that consensus is threatened by litigation such as the present case. He traces back to Biblical times the imposition in civilised societies of restrictions upon the power of one individual to force another individual to surrender private property interests for the pleasure or advantage of the former, including by the intervention of governmental power116. He explains117: "It is … one of the more ancient and majestic themes of global jurisprudence that private necessity can never demand that the lands of one individual be taken peremptorily and given to another individual exclusively for his or her personal benefit or profit. True it is that, by way of exception to the general inviolability of proprietary entitlements, we allow certain heavily controlled measures of taking in the name of the state and for communal purposes. However, such exercises of eminent domain require clear justification on grounds of public interest and must be accompanied by the payment of fair compensation – limitations which are emphatically confirmed, in some form or other, in most constitutional charters."118 114 Hawaii Housing Authority v Midkiff 467 US 229 at 245 (1984). 115 Gray, "There's No Place Like Home", (2007) 11(1) Journal of South Pacific Law 116 (2007) 11(1) Journal of South Pacific Law 73 at 74 citing the story of Ahab and Naboth in 1 Kings 21. 117 (2007) 11(1) Journal of South Pacific Law 73 at 74. 118 For example the European Convention on Human Rights provides that: "[n]o one shall be deprived of his possessions except in the public interest" (ECHR, Protocol No 1, Art 1). See also Newcrest (1997) 190 CLR 513 at 658-661. Kirby Were it otherwise, the promise of stable possession of interests in land would be rendered inherently fragile. As Paterson J described it in Vanhorne's Lessee v Dorrance119, we would "have nothing that we can call our own, or are sure of, for a moment; we are all tenants at will, and hold our landed property at the mere pleasure of the Legislature". From a practical point of view, "private to private" acquisition through the intermediary of a government's legislative power for compulsory acquisition presents the risk of disturbing features that have not hitherto been characteristic of compulsory acquisitions of interests in land under statute in Australia. They present the possibility of a "powerful commercial party [harnessing sub-national governmental power] in order to squeeze out business competition, a strategy which [is] particularly effective if coupled with a threat to relocate an anchor business (and its accompanying jobs and revenue potential) to another urban centre"120. Such acquisitions could also sometimes give rise to risks of cronyism and corruption in government121. They could open up the possibility of acquisitions "just so some other people can get a lot more money"122. As the above demonstrates, acquisitions also present the danger that public funds will be used to compensate, as here, the Aboriginal owners for native title interests lost whereas the land is acquired for private individuals and companies that are thereby, to this extent, effectively subsidised by an often opaque transfer of public funds for private gain. The risk of unexamined and unexaminable corrupt practices in such transactions is all too obvious. That is not, of course, to suggest that this was a feature of the present acquisition. However, the risk is a reason for adopting the construction of the legislation that I favour. In effect, to say this is to say no more than that to construe s 43(1) of the LAA so as to permit acquisition of the native title interests of the Ngaliwurru and Nungali peoples in the subject land for a "private to private" transfer in favour of 119 2 US 304 at 316 (1795). 120 Gray, "There's No Place Like Home!", (2007) 11(1) Journal of South Pacific Law 73 at 79 citing 99 Cents Only Stores v Lancaster Redevelopment Agency 237 F Supp 2d 1123 (CD Cal 2001). 121 Gray, "There's No Place Like Home!", (2007) 11(1) Journal of South Pacific Law 122 As Justice Breyer observed during oral argument in Kelso v City of New London 545 US 469 (2005) (Transcript, 22 February 2005 at 50). See Gray, "There's No Place Like Home!", (2007) 11(1) Journal of South Pacific Law 73 at 83. Kirby the Fogarty and other private commercial interests, is to interpret the LAA to permit features of compulsory acquisition of property that have not hitherto been common or normal in Australia. It may be that the legislature in the Northern Territory did intend these results. However, if so, it did not expressly address such consequences. It did not clearly manifest its considered will.123 In compulsory acquisitions of property, it is a normal rule that the law is construed with a measure of strictness124, requiring that the legislative acquisitions power clearly applies to authorise acquisition of the property interests of one person for the benefit of others125. Where the acquiring authority behaves effectively as an agent for a proposed private developer, rather than as "[the agent] of the inhabitants in in Australia126 and New Zealand127 have, until now, general", courts conventionally been suspicious and strict in their interpretation of the propounded law. Contrary to the submissions for the Minister, the principle applies as much to a law conferring powers on a Minister as it does to one conferring powers on a local authority or other statutory authority. It is the approach that I would take to the meaning and application of s 43(1) of the LAA. It is fatal to the construction which the Minister has urged this Court to adopt in respect of that provision. The arguable textual impediment: In response to these arguments, the Minister pointed to the great generality of the language used in the amended provisions of the LAA ("for any purpose whatsoever"); the legislative history of amendments enlarging his power; and to the express contemplation of the acquisition of Aboriginal interests in land. 123 La Forest JA, delivering a decision of the New Brunswick Court of Appeal in Canada, stated (in the context of the taking of Indian lands) that there was a "general presumption that the Legislature does not, in the absence of clear words, intend to interfere with vested rights": Paul v Canadian Pacific Limited (1983) 2 DLR (4th) 22 at 33. See also Slattery, "Understanding Aboriginal Rights", (1987) 66 Canadian Bar Review 727 at 766. 124 For the comparable requirement of a rule of strictness in relation to search warrants, see George v Rockett (1990) 170 CLR 104 at 110-111; [1990] HCA 26; New South Wales v Corbett (2007) 81 ALJR 1368 at 1372-1373 [16]-[22], 1382- 1383 [87]-[88]; 237 ALR 39 at 42-44, 57-58; [2007] HCA 32. 125 Clunies-Ross v The Commonwealth (1984) 155 CLR 193 at 201. See also Chang (2007) 81 ALJR 1598 at 1606-1608 [34]-[42]; 237 ALR 482 at 491-493. 126 Prentice v Brisbane City Council [1966] Qd R 394 at 410 per Mansfield CJ. 127 Bartrum v Manurewa Borough [1962] NZLR 21 at 27 per Hardie Boys J. Kirby In the absence of any constitutional argument that there must be a public element of some kind in order to justify the acquisitions, should this Court take the legislature at its word? Should it hold that a "private to private" acquisition is within the language now appearing in the LAA? In the presence of such language, what textual source exists to read "for any purpose whatsoever" down so as to exclude the kind of private to private purpose disclosed in the present case? Leaving constitutional imperatives aside, for the reasons that I have earlier indicated, the starting point for any task of statutory construction is the text. Legislative interpretation is in every case a "text-based activity. It cannot be otherwise."128 Although a court's usual obligation is to give effect to the purpose of the legislature derived from the statutory text, when important values appear to have been overlooked, a court is entitled to conclude that apparently broad language does not, in law, achieve departure from those values, without an explicit indication to this effect in the text. There are three textual features of s 43(1) of the LAA that arguably import land, the power of acquisition of implied notwithstanding the amplitude of the reference to "any purpose whatsoever": limitations on interests The first is the requirement that any acquisition be effected "subject to this Act"; The second is the designation of "the Minister", a high public officer- holder, as the repository of the power of acquisition under the Act; and The third is the signification that there must be a "purpose" for the acquisition which by inference must be at least a "purpose" of the designated acquiring power, namely the Northern Territory of Australia. The requirement of a "purpose", to be identified at the time of acquisition is indicated by the reference to "purpose" in s 43(1) and also in s 48(1) of the LAA. By s 48(1) it is provided (with emphasis added): "The Minister may, at any time while no person (other than the Crown) has an estate or interest in the land, by notice published in the Gazette, declare that any land acquired under this Act is no longer required for the purpose for which it was acquired." 128 Network Ten Pty Ltd v TCN Channel Nine Pty Ltd (2004) 218 CLR 273 at 305-306 [87]; [2004] HCA 14 (footnote omitted). Kirby It is such land, as referred to in a notice under s 48(1) of the LAA, that "may be dealt with as unalienated Crown land under a law in force in the Territory", in accordance with s 48(2) of the LAA. The precondition of compliance with the compulsory acquisition procedures, including publication in the Gazette, is specified in s 43(1) of the LAA. These sections indicate that there is no power to acquire land completely "independently of purpose"129. The "purpose" is not now delimited, as it previously was, by adjectival qualifications such as fulfilment of a "public purpose". But s 48 of the LAA demonstrates that a statutory "purpose" must exist. It is vital to the availability of the power of acquisition. There is no power "apart from the purpose"130. Moreover, the context also imports limitations upon the ostensible width of the phrase "any purpose whatsoever". Thus, the purpose cannot be one outside the provisions of the LAA, a public statute of the legislature of the Northern Territory. Nor can it be one alien to the general objectives of the statute, being one providing for the compulsory acquisition of private interests in land. Nor could it be a purpose foreign to the repository of the power, a Minister, acting under the statute as a public office-holder in one of the governments of Australia. Although a majority of this Court have not accepted the principle that the Crown or executive governments in Australia owe fiduciary obligations to the indigenous peoples of Australia in respect of their interests in land131, the obligation of a Minister to act in good faith, according to law, adopting fair procedures and without the operation of irrelevant and irrational purposes, is well settled in this country's constitutional and administrative law. The executive power of government conferred on a Minister by Pt IV of the Northern Territory (Self-Government) Act extends to the execution and maintenance of the laws of the Territory. In the context, the purpose of acquiring land must necessarily be, to some extent at least, a purpose of the Northern Territory. It cannot be a wholly personal or idiosyncratic purpose of the Minister or a corrupt purpose or a purpose wholly or substantially for the private benefit of an individual corporation. It would not be a fulfilment of the Minister's power to exercise a statutory function solely or substantially for such. 129 Thompson v Randwick Corporation (1950) 81 CLR 87 at 103; [1950] HCA 33. 130 Werribee Council v Kerr (1928) 42 CLR 1 at 30; [1928] HCA 41. 131 See generally Thorpe v The Commonwealth [No 3] (1997) 71 ALJR 767 at 775- 776; 144 ALR 677 at 687-689; [1997] HCA 21; Bennett v The Commonwealth (2007) 81 ALJR 971 at 994-995 [113]-[117]; 235 ALR 1 at 29-31; [2007] HCA 18. Kirby There is thus a distinction between the use of land for a purpose of the Northern Territory and its disposal for the purpose of purely private gain of other parties. Arguably, the latter is outside even the kind of very broad "purposes" for which s 43(1) of the LAA provided. Had it been intended to authorise acquisition for immediate "private to private" transfer of interests in land (especially where such interests comprise native title interests of Aboriginal traditional owners) it would have been expected that such a power of acquisition and alienation would have been expressly provided for. Other examples of specificity: To the protest that this conclusion imposes undue burdens upon the legislature which, by amendment, has deliberately endorsed language of broad generality, the answer may be offered that, when unusual purposes of acquisition have been contemplated, the legislature of the Northern Territory has indeed provided for them expressly, so as to remove any doubt that may exist by the invocation of language of generality. Thus, where a particular private corporation is to be benefited by compulsory acquisition, express authorisation of that course has been enacted132. There are similar provisions governing acquisition by the Northern Territory for the benefit of particular local government bodies133 and also grants to particular Aboriginal community bodies134. To remove any doubt, specificity, when it is desired, can be easily enacted. If that practice is sometimes observed, why should it not be insisted upon in the present case, given the countervailing considerations the phrase "for any purpose whatsoever"? that favour reading down Public or private purposes?: The Minister argued that the creation of business investments and employment in Timber Creek was itself a legitimate public purpose of the Northern Territory, justifying the acquisition of the native 132 See eg McArthur River Project Agreement Ratification Act (NT), Sched 1, Item 6(2) providing that on the request of the Company, the Territory "shall use its best endeavours to voluntarily acquire or under the [LAA] compulsorily acquire land" of significance to and required for the project and "shall sell, lease or grant licenses, easements or rights of way in respect of that land to the Company on [agreed] terms". 133 Local Government Act (NT), ss 129-130. 134 Pastoral Land Act (NT), s 111. See also LAA, s 46(1A). Kirby title interests of the Ngaliwurru and Nungali peoples. That point of view recommended itself to the Court of Appeal135. However, if this were the case, it is no more than an indirect feature of the immediate transfer of the native title interests to the private rights of the Fogartys. Whether it was actually necessary, in order to procure the economic benefits, to acquire the interests of the Ngaliwurru and Nungali peoples by compulsion rather than by free negotiation in the open market, depriving them of rights of entrepreneurship that would otherwise belong to them by reason of their native title, is a matter of speculation. It will rarely, if ever, be the case that compulsory acquisition of land will be proposed without some supposed public purpose. In the end, however, it remains necessary to decide whether what occurred is truly for a purpose of the Northern Territory or simply for the purpose of private economic gain which has some incidental or indirect advantages for others. Whilst the use of land acquired under compulsion by privatised utilities has complicated the traditional rationale of compulsory acquisition for public benefit in Australia136, typically in this country, until now, the "private to public to private" acquisitions have been addressed by specific infrastructure legislation. Under such legislation, governmental authorities have ordinarily retained the acquired land, conferring rights of use on private entities on the basis of published conditions137. Or they have transferred interests in the acquired land under special provisions138. Or they have used specific powers that have engaged acquisition legislation139 and permitted particularised uses140. 135 (2004) 14 NTLR 188 at 215-216 [85]; cf Gray, "There's No Place Like Home!", (2007) 11(1) Journal of South Pacific Law 73 at 86-87. 136 Gray and Gray, Land Law, 5th ed (2007) at 449-450 [13.24]. 137 See eg Melbourne City Link Act 1995 (Vic); Sydney Harbour Tunnel (Private Joint Venture) Act 1987 (NSW). 138 See eg Lands Acquisition Act 1993 (Tas) Pt 1A. 139 See eg Land Acquisition (Just Terms Compensation) Act 1991 (NSW), s 4(2); Land Acquisition and Compensation Act 1986 (Vic), s 4; Land Acquisition Act 1969 (SA), s 6 "prescribed private acquisition" and s 12B; cf s 18. See Brown, Land Acquisition, 5th ed (2004) at 4-6 [1.4]. 140 Acquisition of Land Act 1967 (Q), s 5 and Schedule 1; Land Administration Act 1997 (WA), s 161; Public Works Act 1902 (WA), s 2, definition of "public works". The general acquisition statutes of the Commonwealth and the Australian Capital Territory proceed by reference to acquisitions for a "public purpose" used in the sense stated in the Lands Acquisition Act 1955 (Cth), s 5(1). Kirby These features of compulsory acquisition powers, and their deployment in Australia until this time, tend not only to support the expectation and requirement of specific enactment to authorise a "private to private" acquisition, rather than reliance on the general language of a statute like the LAA. They also deny acceptance of the argument that the indirect and flow-on effects from private gain justify the characterisation of the beneficiary of the acquisitions as the general public or community (here that of the Northern Territory) such that the purpose may be regarded as public or governmental. There is no legal guarantee that such hopes or expectations, however genuine, will be fulfilled. There is no statutory procedure or audit to hold the Fogarty and other private interests to such public purposes. Conclusion: The general statutory power is inapplicable It follows from the foregoing analysis that the absence of express provisions in the LAA to uphold the unusual kind of acquisition notified by the Minister of the native title interests in land of the Ngaliwurru and Nungali peoples is fatal to the validity of the Minister's notifications. Despite the apparently wide language of the amended terms of s 43(1) of the LAA, that provision is not to be construed so as to apply to acquisitions such as those presently proposed. If the legislature of the Northern Territory means to empower the Minister, under the LAA, to acquire native title interests of Aboriginal communities such as the Ngaliwurru and Nungali peoples, in order to extinguish them in favour of private interests such as the Fogartys', the LAA must make this expressly clear. Then only would the Territory legislature assume responsibility, and accept electoral accountability, for taking such a course. Any such provision would, in turn, enliven questions as to the power of the legislature to so enact under the restricted grants of governmental power afforded by the Northern Territory (Self-Government) Act and having regard to the requirements of the Constitution141 and of the LAA and NTA. Insisting upon this interpretation of the LAA is not to be regarded as denying the attainment of the constitutionally valid purposes of legislation, enacted in concededly broad terms. Instead, it is a course adopted out of respect for: the legislature's normal observance of great care in the deprivation of the basic rights of individuals, whoever they may be; 141 ss 122 and 51(xxxi). Kirby the special care to be attributed and expected (in light of history) to deprivation by a legislature of the native title rights of Aboriginal and other indigenous communities; and the serious offence which the opposite construction of the LAA does to common or hitherto universal features of legislative compulsory acquisition in our legal tradition. If the lawmakers in the Northern Territory (or elsewhere in Australia) are to permit "State-endorsed buy-outs of potentially valuable assets [to] be forced upon the poor and vulnerable by those who are rich and more powerful"142, it must, in my view, be done unambiguously and expressly. General language is not sufficient. And, even then, questions may remain, in the case of the Northern Territory, as to whether any such language complies with the requirements of the federal Constitution143. Orders The foregoing conclusion is sufficient to uphold the attack by the Ngaliwurru and Nungali peoples on the Minister's purported notifications of the acquisitions of their land. The appeal should therefore be allowed. The orders of the Court of Appeal of the Supreme Court of the Northern Territory should be set aside. In place of those orders, this Court should order that the appeal to the Court of Appeal be dismissed. The Minister should pay the appellants' costs in the Supreme Court, the Court of Appeal and in this Court. 142 Gray, "There's No Place Like Home!", (2007) 11(1) Journal of South Pacific Law 143 See above at [129] referring to Newcrest (1997) 190 CLR 513 at 658-661. Crennan CRENNAN J. The appeal should be dismissed with an order for costs in favour of the first respondent as proposed by Gummow, Hayne and Heydon JJ. I agree with their Honours' reasons and with the additional reasons of Gleeson CJ. 156 KIEFEL J. I agree that a compulsory acquisition of native title rights and interests under a law referred to in s 24MD(2) of the Native Title Act 1993 (Cth) ("the NTA") is, by reason of that sub-section, effective to extinguish those rights and interests where they are the only outstanding interests in unalienated Crown land. The more substantial question is whether the acquisitions in this case are for a purpose to which s 43(1) of the Lands Acquisition Act (NT) ("the LAA") refers. In my respectful view, they are not. Section 43(1) provides that "[s]ubject to this Act, the Minister may acquire land under this Act for any purpose whatsoever". If the procedures required by the Act are followed, land may be acquired by compulsory acquisition144. At an earlier point in time the sub-section had required that an acquisition be for "public purposes". Native title rights and interests qualify for acquisition and compensation because they are recognised by the LAA as interests in land145. (I shall continue to refer to their "acquisition" in these reasons, although no other person can hold the rights, and the process referred to in s 43 is a step towards their extinguishment). The Ngaliwurru and Nungali Peoples are amongst members of estate groups in whose favour a determination of native title has been made over lands which include the lots in question, in the Town of Timber Creek in the Northern Territory146. Three notices of proposed acquisition were issued by the Minister with respect to the lands. They each advise that it is proposed to deal with the land in question by granting a Crown lease. The uses proposed under the leases are "goat breeding, hay production, market garden and ancillary"147; "a cattle husbandry facility"148; and a "commercial/tourism development"149. In each case it is said that, upon completion of the development, the lease may be exchanged for freehold title. The Minister has given approval for the sale of the land the subject of the two leases firstmentioned, provided the native title rights and interests are acquired. There is no suggestion that the proposed uses form part of any wider plan by the government of the Northern Territory. They were proposals put forward by the developers. It is not disputed that the acquisitions 144 LAA, s 43(1)(b). 145 LAA, s 4. 146 Griffiths v Northern Territory (No 2) [2006] FCA 1155; Griffiths v Northern Territory (2007) 243 ALR 72. 147 Lot 47. 148 Lot 109. 149 Lots 97-100 and 114. involve the divestiture of rights of the native title holders in order to provide the leases and grants of land to the developers. The terms of s 43(1) do not permit land to be acquired absent any purpose for the acquisition and it is apparent that the purpose required is one connected with the Minister's act of acquiring the land. These propositions are accepted by the first respondent, who puts the question on the appeal as: whether s 43 enables the Minister to compulsorily acquire native title rights in unalienated Crown land for the purpose of conferring rights and interests in the land on others. The statement does not suggest that the executive government itself has any use for, or need of, the land. The acquisition, and following extinguishment, of the interests in question is sought only so that the lands can be made available for the use of others. An underlying contention may be that an intention to effect a grant of land, within power, suffices as a purpose under s 43(1). The construction of s 43(1) contended for by the first respondent is of a largely unconstrained power to acquire land, provided by the words "for any purpose whatsoever". It relies also upon the deliberate omission of the requirement that there be public purposes for the acquisition. The omission might confirm an intention that the sub-section extends to non-governmental, private, purposes. The prospect that there may be a public need for a citizen's property, to which their private right must defer, provided they are properly compensated, is well known to European and western legal systems150. In some commentaries, notions of public necessity, public utility, public interest, the common good and the common purpose are treated as interchangeable151. Those notions may imply a wider socio-economic justification for the taking of property beyond a direct use for, or a need of, the land. Early Commonwealth legislation, dealing with the compulsory acquisition of property, did not state the basis for acquisition quite so broadly. The "public purpose" which permitted an acquisition was defined as "any purpose in respect of which the Parliament has power to make laws"152. The Lands Acquisition Act 1955 (Cth) altered that definition to include, in relation to 150 See Taggart, "Expropriation, Public Purpose and the Constitution", in Forsyth and Hare (eds), The Golden Metwand and the Crooked Cord: Essays on Public Law in Honour of Sir William Wade QC, (1998) 91 at 94-98. 151 See Taggart, "Expropriation, Public Purpose and the Constitution", in Forsyth and Hare (eds), The Golden Metwand and the Crooked Cord: Essays on Public Law in Honour of Sir William Wade QC, (1998) 91 at 94 fn 18, referring to Grotius. 152 Property for Public Purposes Acquisition Act 1901 (Cth), ss 2, 6. land in a Territory of the Commonwealth, "any purpose in relation to that Territory"153. Issues concerning the exercise of a power of compulsory acquisition, to the benefit of a private interest and not for a public purpose, have arisen in cases concerning local authorities and other statutory bodies. In Werribee Council v Kerr154 Higgins J observed that "[t]he Legislature did not give to municipal councils power to interfere with the private title of A for the private benefit of B"155. The first respondent points out, correctly, that these cases need to be understood in context. They more often involve powers limited by the specific purposes enumerated in the statute granting the power. Nevertheless, where very wide purposes have been stated, the courts have not countenanced the use of the power to benefit private interests. In Prentice v Brisbane City Council156 the Council was restrained from proceeding with an acquisition because its main purpose was to assist a developer "notwithstanding that in a broad sense the interests of the city and its inhabitants were being served by the subdivision and the opening up of the lands"157. The approach evident in Prentice is reflected in other areas of property law158. It is consistent with the principle of the law, concerning statutory interference with economic interests, which is applied to the interpretation of statutes containing powers of that kind159. The general rule of construction was stated by Griffith CJ in Clissold v Perry160 to be "that [statutes] are not to be construed as interfering with vested interests unless that intention is manifest". 154 (1928) 42 CLR 1; [1928] HCA 41. 155 (1928) 42 CLR 1 at 33. 156 [1966] Qd R 394. 157 [1966] Qd R 394 at 410 per Mansfield CJ. 158 Gray, "There's No Place Like Home!", (2007) 11 Journal of South Pacific Law 73 159 Bennion, Statutory Interpretation, 4th ed (2002) at 723; Pearce and Geddes, Statutory Interpretation in Australia, 6th ed (2006) at 179 [5.18]. 160 (1904) 1 CLR 363 at 373; [1904] HCA 12. In Bropho v Western Australia161 it was said that any intention to infringe rights must be made "unambiguously clear". Martin (BR) CJ in the Court of Appeal considered that the legislature must be taken to have intended to create an executive power wider in its scope than earlier provisions when, in 1998, it substituted the words "for any purpose whatsoever" in s 43(1)162. Further, in his Honour's view, it is to be assumed that, when enacting the amendment, the legislature was aware of the history of the Act and the meaning which had been given to the expression "public purpose"163. In the latter respect his Honour had in mind the decision in Clunies-Ross v The Commonwealth of Australia164, which concerned the Lands Acquisition Act 1955 (Cth). Section 43 of the 1978 LAA was enacted following the passing of the Northern Territory (Self-Government) Act 1978 (Cth), which provided the Northern Territory legislature with the power to make laws for the peace, order and good government of the Territory165 and, with respect to the acquisition of property, only on just terms166. Section 43 provided that the Minister could acquire land for "public purposes", which term was defined to mean "a purpose in relation to the Territory and includes a purpose related to the carrying out of a function by a statutory corporation"167. The second reading speech discloses that the bill proposing it was amended "to make clear that the bill only authorises compulsory acquisitions for public purposes"168. In 1982 the section was amended so that it read "[s]ubject to this Act, the Minister may, under this Act, acquire land". This could hardly be more widely stated. Despite the absence of a 161 (1990) 171 CLR 1 at 18 per Mason CJ, Deane, Dawson, Toohey, Gaudron and McHugh JJ; [1990] HCA 24. 162 Minister for Lands, Planning and Environment v Griffiths (2004) 14 NTLR 188 at 163 Minister for Lands, Planning and Environment v Griffiths (2004) 14 NTLR 188 at 164 (1984) 155 CLR 193; [1984] HCA 65. 165 Northern Territory (Self-Government) Act 1978 (Cth), s 6. 166 Northern Territory (Self-Government) Act 1978 (Cth), s 50. 167 LAA, s 4. 168 Northern Territory, Legislative Assembly, Parliamentary Debates (Hansard), 30 November 1978 at 726. stated purpose, the power was explained to be "for purposes beneficial to the Territory and the people of the Territory"169. In 1998 the current section was included along with a number of other amendments to the LAA170. As Martin (BR) CJ observed171, their purpose was to ensure that acquisitions of land that was, or which might be, subject to native title interests complied with the NTA. It was in that context that the words "for any purposes whatsoever" appeared. The legislative history of s 43 does not provide much assistance in understanding the choice of expression in the 1998 amendment to s 43, or its intended operation. The context in which those amendments were effected does not provide any answer to those enquiries, given in particular that s 43(1) affects all interests in land, not just native title rights and interests. The "public purpose" requirement had been removed some time before the 1998 amendments and even before the decision in Clunies-Ross. Regardless of the statement appearing in the extrinsic materials to the 1982 Act, clearly enough a wide power was sought. In any event it is necessary to consider the effect of that omission and whether it extends the purpose necessary for the acquisition to one to benefit private interests. In Clunies-Ross172 the Commonwealth sought to acquire land on Home Island, Cocos (Keeling) Islands for the sole purpose of divesting the owner of it. On one view, that favoured by Murphy J, the exclusion of the owner was to the benefit of the Island people173. The majority, however, held that, as a matter of language, a power to acquire land for a public purpose is prima facie limited to "an acquisition of land which is needed or which it is proposed to use, apply or preserve for the advancement or achievement of that purpose"174. Their Honours said that the purpose of which s 6 spoke was the use to which the land acquired was to be put175. The relevant Commonwealth purpose identified by their 169 Northern Territory, Legislative Assembly, Parliamentary Debates (Hansard), 16 March 1982 at 2078. 170 Lands Acquisition Amendment Act (No 2) (NT). 171 Minister for Lands, Planning and Environment v Griffiths (2004) 14 NTLR 188 at 172 (1984) 155 CLR 193. 173 (1984) 155 CLR 193 at 209. 174 (1984) 155 CLR 193 at 198 per Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ, referring inter alia to Attorney-General (Cth) v Schmidt (1961) 105 CLR 361 at 372-373; [1961] HCA 21. Honours, as necessary to justify acquisition under the Act, was a "planned use, application or preservation of the land itself or of any buildings thereon"176. It was not sufficient that it was sought, by the acquisition, to achieve some consequential advantage which could be described as a more remote public purpose177. The majority in Clunies-Ross were not attempting to define a public purpose by reference to the nature of the intended use. Their references to it were not confined to some physical development of the land, in the nature of public works, or a use by the public of the land. Rather, their Honours considered that a purpose for the land necessarily involved a plan for its use. That provided the basis for the exercise of the power. They did not suggest any limitation on what such a plan might be, so long as it was with respect to the land. This construction was supported by, but not derived from, other provisions of the Act and the long title which spoke of the land being "suitable" or "required" for public purposes178. Expressed another way, the Commonwealth had to have a need for the land, as their Honours observed at a later point in their The argument for in Clunies-Ross, and the the Commonwealth observations of the majority with respect to it, is worthy of mention. The Commonwealth sought to extend the power of acquisition beyond the purposes stated in s 6 of the Lands Acquisition Act 1955 (Cth). It contended that the definition of "public purpose" in that section reflected the wider provisions of s 51(xxxi) of the Constitution and should be read accordingly180. Section 51(xxxi) provides a law-making power for the peace, order and good government of the Commonwealth with respect to the acquisition of property, on just terms, from a State or person for any purpose in respect of which the Parliament has powers to make laws. It was not necessary for their Honours to determine whether the argument was correct. They did, however, observe that the cases dealing with s 51(xxxi) had assumed that the power there spoken of was confined to laws with respect to the acquisition of property "for some purpose related to a 175 (1984) 155 CLR 193 at 198-199. 176 (1984) 155 CLR 193 at 199. 177 (1984) 155 CLR 193 at 199. 178 See (1984) 155 CLR 193 at 199. 179 (1984) 155 CLR 193 at 200. 180 (1984) 155 CLR 193 at 200. need for or proposed use or application of the property to be acquired"181. On this approach there is little difference between the purposes spoken of in the two provisions, albeit they are differently worded, and s 51(xxxi) in wider terms. The authorities to which their Honours referred included the decisions of Dixon J in Andrews v Howell182 and Attorney-General (Cth) v Schmidt183. One aspect of the reasoning in those cases is that the power given by s 51(xxxi) is referrable to the acquisition of property by the Commonwealth for use by it in the execution of its functions and administration under its laws. His Honour said that, whilst the expression "for any purpose" is doubtless indefinite, in the section it refers to the intended use of the executive government of the property acquired184. In Andrews v Howell his Honour considered that there was some difficulty in applying the provision to an acquisition of property, the purpose of which was its immediate disposal, where the executive was not itself interested in the commodity in question and which it did not intend to use for any governmental purpose185. The purpose there spoken of may be thought to be similar to those in the present case. The relevance of the statements by Dixon J is to the construction of s 43(1) and the apparently unlimited power of acquisition "for any purpose whatsoever". No question arises on the appeal as to the relationship, if any, between s 51(xxxi) and laws made under the Northern Territory (Self- Government) Act 1978 (Cth)186. In my view the reasons of the majority in Clunies-Ross should be understood to say that the critical words of the provision were "acquire … for a … purpose [of the Commonwealth]". They convey a need for the land as the requirement for an acquisition. The basis for the need is the proposals for the land. The statements in Andrews v Howell and Schmidt confirm, if it be necessary, that the need for the land must be that of the acquiring authority. 181 (1984) 155 CLR 193 at 200-201. 182 (1941) 65 CLR 255; [1941] HCA 20. 183 (1961) 105 CLR 361 (now Dixon CJ). 184 Attorney-General (Cth) v Schmidt (1961) 105 CLR 361 at 372. 185 (1941) 65 CLR 255 at 281-282. 186 As to which see generally Teori Tau v The Commonwealth (1969) 119 CLR 564; [1969] HCA 62; Capital Duplicators Pty Ltd v Australian Capital Territory (1992) 177 CLR 248; [1992] HCA 51; Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513; [1997] HCA 38. It follows, in my view, that the word "public" in the former s 43(1) did not have the importance attributed to it in argument and by the Court of Appeal. It did not qualify "purpose" in any meaningful way, such that its removal might imply the opposite. It confirms what otherwise appears from the section, namely that the purpose for the land is a governmental purpose. This is conformable with the plain words of the section. The expression "any purpose whatsoever", understood in this light, extends the nature of what might be proposed for the land, but refers to the government's proposals. The omission of the word "public" in the section provides no warrant for a construction that the power of acquisition may be used for private purposes in connection with the land. There is no clear statement of any such intention. The majority in Clunies-Ross reiterated that an executive power to deprive a citizen of property by compulsory acquisition should be construed as confined "within the scope of what is granted by the clear meaning or necessary intendment of the words by which it is conferred"187. Their Honours had earlier observed that, if an Act was to be construed as extending to purposes quite unconnected with the need for the land, the ministerial power thereby created would be so wide that188: "subject only to monetary compensation, it would encompass the subjection of the citizen to the compulsory deprivation of his land, including his home, by executive fiat to achieve or advance any ulterior purpose which was a purpose in respect of which the Parliament has power to make laws or, in the case of land in a Territory, 'any purpose in relation to that territory'". There is nothing in the LAA to suggest that it was intended to operate such that one person's interest in land might be taken in order that others might put it to some use agreed upon by the Minister. The Act itself does not state that the "purpose" for acquisition was intended to be non-governmental and no explanation to that effect was given with respect to s 43 in the bill as it was proposed. It has been observed that even in England in the 19th century, private bills which bestowed public acquisition powers on private for-profit companies were subject to procedures requiring a public case to be made out189. 187 (1984) 155 CLR 193 at 201, referring to Webb v Manchester and Leeds Railway Co (1839) 4 My & Cr 116 at 120 per Lord Cottenham LC [41 ER 46 at 47-48] and Simpson v South Staffordshire Waterworks Co (1865) 34 LJ Ch 380 at 387 per Lord Westbury LC. 188 (1984) 155 CLR 193 at 199-200. 189 See Taggart, "Expropriation, Public Purpose and the Constitution", in Forsyth and Hare (eds), The Golden Metwand and the Crooked Cord: Essays on Public Law in Honour of Sir William Wade QC, (1998) 91 at 102-103. The provision of controls and safeguards against possible executive abuse might support an inference that the power was intended to be limited only by the Minister's consideration that the acquisition was warranted. Some importance was placed upon the absence of such measures in Clunies-Ross190, as confirming that no such wider power was intended. The provisions of the LAA may be thought to go some way towards an independent assessment of a proposal to acquire land, but they are limited in their effectiveness as safeguards. A Tribunal is created to hear objections against the taking of land191. Any recommendation it makes, with respect to lands generally, that land not be taken, is made without specification of the matters to be considered by it and the Minister is required only to take the recommendation into account before proceeding to acquisition192. These measures cannot be said to be designed to identify wrongfully motivated acquisitions. There are further requirements with respect to native title rights and interests. The Tribunal must consider matters such as the effect of the acquisition upon them, the economic or other significance of the acquisition to the Territory or the region, and the public interest193. Where the Tribunal recommends that such interests not be acquired, the Minister is further required to consult the Minister responsible for indigenous affairs and to be satisfied that it is in the interests of the Territory not to comply with the recommendation194. The expression "interests of the Territory" is defined to include social and economic benefits, including that of Aboriginal peoples and Torres Strait Islanders195. These requirements may more readily expose problems in the background to an acquisition, as well as its effect, but the reason for their inclusion is compliance with the procedural requirements of the NTA with respect to the compulsory acquisition of native title interests196. They are directed to the consideration that the Minister should give to an acquisition, because of the consequence which follows it, the extinguishment of those 190 (1984) 155 CLR 193 at 200. 191 LAA, s 38, the Lands and Mining Tribunal; and see NTA, s 24MD(6B)(f). 192 LAA, s 45(1). 193 LAA, s 38AA. 194 LAA, s 45(2). 195 LAA, s 45(3). 196 NTA, s 24MD(6B)(g). rights197. The provisions do not assume the existence of a wide power of acquisition, nor the possibility that such a power might be exceeded. It cannot therefore be inferred by reference to them that a power, of the kind in question, was intended. The first respondent relied upon certain provisions of the LAA as supporting a wider view of s 43. Reference was made to s 33(1)(b), which requires that the notice of proposed acquisition give only details of the manner in which it is proposed to deal with the lands if acquired198. This was said to be consistent with the power in s 43(1) extending to the acquisition of land so that it may be leased or granted to another. And there was said to be a possible assumption, in s 54(1), that land could be acquired for a third party. It provides that neither the Territory "nor any person for whom the land is acquired" is to enter upon the land within a specified period following acquisition. It is true that s 33(1)(b) is not expressed to require, in terms, a statement of the purpose for the acquisition. It may be that it should. The required reference, to how it is proposed the land be dealt with, is ambiguous. It does not necessarily suggest a dealing, in a transactional sense. It is apt to refer, more generally, to what is intended to be done with the land. Section 54(1) is in a different category. It is not readily explained, although the appellants point to another provision, which may be seen as inconsistent with it. Section 48(1) refers to a situation where land acquired under the LAA "is no longer required for the purpose for which it was acquired". This implies a need for the land as the basis for its acquisition in the sense referred to in Clunies-Ross. In any event these provisions are not by themselves capable of supplying a meaning to s 43(1); at most they are capable of supporting or confirming a construction otherwise arrived at. No member of the Court of Appeal suggested that a purpose permitted by s 43(1) may be the divesting of native title rights and interests so as to enable a grant to other persons, in order that they be able to carry out their proposals for the development of the land. Martin (BR) CJ held that the power given by s 43 did not extend to the purpose of giving the land of one citizen to another, absent a purpose related to a need for, or a proposed use of, the land199. Significantly, the reasons of his Honour and those of Mildren J200 involve a search for a connection 197 NTA, s 24MD(2). 198 See LAA, ss 33(3)(b); 35(4)(b); 42B(1)(b). 199 Minister for Lands, Planning and Environment v Griffiths (2007) 14 NTLR 188 at 200 With whom Riley J agreed. the acquisition of between Martin (BR) CJ concluded that the acquisitions referred to in the notices were for an "underlying" or "ultimate purpose" relating to the need for or proposed use of, the land201. Mildren J said that the promotion of industry and the provision of land to that end were both the business of government202. the Territory's need for land and the It is abundantly clear that in the present case no use by the Minister or the Territory is proposed, even in the most passive sense. The land is to be acquired for the purpose of its use by interested third parties who are later to be granted freehold title in the property. The use of the power of grant under the Crown Lands Act (NT) is a means to effect that purpose. It is not the purpose itself. Absent a governmental purpose, as s 43(1) requires, the exercise of the power stands as no more than a clearing of native title interests in order to effect leases and grants of the land for private purposes. A view that there can be seen to be some governmental purpose in providing land and promoting industry relies upon a consequential effect. Even if it answers the description of a purpose, it is one remote from that which clearly explains the acquisition. It may provide some other justification for the exercise of the power, but it does not answer directly the question as to what is the purpose for the acquisition of the land. Stated as aims, these potential effects hint at a socio-economic purpose as referrable to the power. An argument based upon such a purpose would involve wide notions of the public interest and social need. They might not be thought to have informed many of the statutes relating to the acquisition of land in Australia, but they may reside in law-making powers. It is possible that the purposes permitted by s 43(1) extend to purposes of this kind, but that is not a line which was pursued in argument, which merely alluded, in a general way, to some connection to governmental interest in the outcome. The Supreme Court of the United States has grappled with the question of takings of land for the purpose of economic development, most recently in Kelo v City of New London, Connecticut203. The question is one of considerable difficulty, but it does not arise on the facts of this case. The acquisition of the land was not connected to such a purpose. The evidence, such as there was on the topic, did not even suggest a public benefit as a likely outcome. 201 Minister for Lands, Planning and Environment v Griffiths (2007) 14 NTLR 188 at 202 [39] and [41]. 202 Minister for Lands, Planning and Environment v Griffiths (2007) 14 NTLR 188 at The Tribunal, which considered the issues of economic and social benefit, found that the proposed leases and grants of land, for animal husbandry and associated purposes, had little economic or other significance to the region, no benefit to the appellants and there was little or no public benefit in the acquisition. The only benefit identified was that to the proposed developer204. In relation to the release of land for tourist and other developments, the Tribunal said that it was not possible to come to a view about whether there was a wider benefit. One could only have regard to the developer's belief in the viability of the proposal205. For these reasons I consider that the acquisitions are not a valid exercise of the power given by s 43(1) of the LAA. I would allow the appeal, set aside the orders of the Court of Appeal of the Supreme Court of the Northern Territory and order in their place that the appeal to that Court be dismissed. The first respondent should pay the appellants' costs of the proceedings in the Supreme Court and of the appeal in this Court. 204 Minister for Lands, Planning and Environment v Griffiths NT LMT 26, 20, 37 at 205 Minister for Lands, Planning and Environment v Griffiths NT LMT 26, 20, 37 at

HIGH COURT OF AUSTRALIA APPELLANT AND OVERSEAS PROJECTS CORPORATION OF VICTORIA LTD & ANOR RESPONDENTS Neilson v Overseas Projects Corporation of Victoria Ltd [2005] HCA 54 29 September 2005 ORDER Appeal allowed with costs. Set aside the orders of the Full Court of the Supreme Court of Western Australia made on 3 May 2004 that set aside: the judgment entered at trial in favour of the plaintiff; and the order made at trial for her costs. In their place, order that the appeal to the Full Court against the judgment and order entered at trial be dismissed with costs. On appeal from the Supreme Court of Western Australia Representation: B W Walker QC with A S Bell and P Kulevski for the appellant (instructed by Talbot & Olivier) G Griffith QC with L G De Ferrari and A B Lu for the respondent (instructed by Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Neilson v Overseas Projects Corporation of Victoria Ltd Private international law – Foreign tort – Choice of law – Appellant was injured in the People's Republic of China – Scope of the lex loci delicti – Where the lex loci delicti treats another connecting factor, such as nationality or domicile, as determining the applicable law – Whether Article 146 of the General Principles of Civil Law of the People's Republic of China was a relevant part of the lex loci delicti – Whether Article 146 of the General Principles of Civil Law of the People's Republic of China made the law of the parties' domicile the applicable law – Whether the doctrine of renvoi applies to international tort claims – Infinite regression of reference. Evidence – Foreign law – Principles governing admission of evidence of foreign law – Where there is a deficiency of evidence – Whether there is a presumption that foreign law is the same as the law of the forum. Words and phrases – "lex loci delicti", "choice of law", "renvoi", "single renvoi", "double renvoi", "infinite regression of reference". GLEESON CJ. The issues in this appeal are narrower than those raised at trial. Furthermore, the issues at trial were narrower than those that might have been raised. It was for the parties to define the issues, and adduce such evidence as they chose. The case involved foreign law. It is possible, perhaps even likely, that the evidence of foreign law was incomplete. Nevertheless, it was necessary for the trial judge to decide the issues raised by the parties on the evidence which they presented. This is adversarial litigation, and the outcome of such litigation is commonly influenced by the way in which the parties have chosen to conduct their respective cases. Decisions about such conduct may have been based on tactical and other considerations which are unknown to a trial judge or an appellate court. This appeal is concerned only with the claim made by the appellant against Overseas Projects Corporation of Victoria Ltd ("OPC") for damages for personal injuries suffered as a result of OPC's negligence. The appellant's husband was engaged by OPC to work on a project in Wuhan, in the People's Republic of China ("PRC"). His family went there with him. They were accommodated in a flat provided by OPC. The appellant fell down the stairs. She claimed that the stairs were dangerous, and that OPC, which owed her a duty to take reasonable care for her safety, was in breach of that duty. That claim was framed in conventional common law terms based on occupier's liability. The questions of duty, breach and damage were resolved in the appellant's favour, and are not presently in issue. The action was brought in the Supreme Court of Western Australia. Counsel for the appellant informed the trial judge (McKechnie J), in his opening, that he would lead no evidence of PRC law, and intended to say as little about that topic as possible. His opponent, however, relied on PRC law and, in the course of the defence case, tendered English translations of the General Principles of Civil Law of the PRC ("the General Principles") and of the Code of Civil Procedure of the PRC, and an opinion of the Supreme People's Court (in Mandarin) on the implementation of the General Principles. He also called a Chinese lawyer, Mr Liu, who had law degrees from Shanghai University and from an Australian university. Mr Liu referred to, and translated portions of, the Supreme People's Court opinion. Following his cross-examination of Mr Liu, counsel for the appellant tendered a law journal article on PRC personal injury law. Counsel for the first respondent argued that the substantive law to be applied by McKechnie J was the law of the PRC; that, according to that law (for reasons that are not material to this appeal), OPC did not assume any civil liability to the appellant; and that, if it did, such liability was extinguished under Art 136 of the General Principles, which specified a limitation period of one year for demands for compensation for bodily harm. Although McKechnie J decided the case by applying Australian law, relying in that regard on Art 146, he also dealt with those arguments and decided them against OPC. In particular, he dealt with the limitation point on the basis that Art 137 allowed a court, "under special circumstances", to extend the limitation period. He found that there were special circumstances. The Full Court disagreed with his reasoning on that question, but the issue does not arise if McKechnie J's decision based on Art 146 is upheld. The case has been argued at all levels on the assumption (which may or may not be correct) that, if the second sentence of Art 146 applied, Arts 136 and 137 were irrelevant. The Full Court of the Supreme Court of Western Australia held that McKechnie J was wrong to invoke Art 146 and apply Australian law. That has been the focus of the present appeal. The case has been conducted on the assumption that the General Principles, and in particular Art 106, which imposes civil liability either on the basis of fault or pursuant to legal stipulation, applied, or potentially applied, to the relations between the appellant and OPC and, further, that both the appellant and OPC were nationals of Australia within the meaning of Art 146 and, therefore, foreigners within the meaning of Art 142. Those may not be surprising assumptions, but they were not the subject of evidence and it is necessary, therefore, to note that they were not in dispute. Furthermore, no issue was raised concerning any complexities that might result from Australia's federal system. Article 146 of the General Principles seems to rise above questions of federalism, and the parties did not raise such questions in their evidence or arguments. The General Principles are divided into nine Chapters. Chapter I is headed: "Fundamental Principles". It includes Art 8, which provides that, unless otherwise stipulated, the laws of the PRC apply to civil activities carried out within the PRC, and the provisions of the General Principles with regard to citizens apply to foreign nationals within the territory of the PRC. Chapters II and III deal with the status of "natural persons" and "legal persons", the former being citizens, and the latter being organisations possessing legal capacity. Chapters IV and V are not relevant. Chapter VI deals with civil liability, and includes Art 106 which has been summarised above. Chapter VII deals with limitation of actions, and includes Arts 136 and 137 to which reference has already been made. Chapter VIII is headed: "Application of the Law to Civil Relations involving Foreigners". It commences with Art 142, which states that the application of the law to civil relations involving foreigners shall be determined by the provisions of Ch VIII. It includes Art 146. Not much was said in evidence about Art 146. The first sentence provides that, in a claim for compensation for damages resulting from an infringement of rights, the law of the place where the infringement occurred shall be applied: in the case of a fault-based claim such as the present, the lex loci delicti. Since Art 146, according to Art 142, applies to civil relations involving foreigners, the first sentence has general application to foreigners. Whether the first sentence of Art 146 would apply to a dispute between two citizens of China arising out of personal injury caused by one to the other in, say, Japan was not considered in evidence. The second sentence deals with a more particular case of civil relations involving foreigners. It applies only where the parties are nationals of the same country, or domiciled in the same country. It would have no application in the present case if, for example, OPC had been a Delaware corporation. (In argument it was assumed that the appellant, a Western Australian resident, and OPC, a Victorian corporation, were nationals of the same country. What would have happened if the laws of Victoria and Western Australia had been materially different was not considered.) Where both parties are nationals of the same country (relevantly, Australia), Art 146 says that the law of their own country may be applied. McLure J, who gave the reasons of the Full Court, reasoned that this raised a question of renvoi; that Art 146 was a choice of law rule; that Australian law directed the Western Australian court to apply the law of the PRC as the lex loci delicti1; that the law of the PRC for that purpose did not include its choice of law rules; and that Art 146 was irrelevant. Her reasoning, which was supported by a body of learned opinion on the subject of renvoi, would have been exactly the same if the second sentence of Art 146 had been mandatory rather than permissive. Subject to one qualification, there was no evidence as to any other laws of the PRC which affect the operation of the second sentence in Art 146. It was not shown that the Supreme People's Court had given any guidance on the matter. Perhaps the second sentence is what a common lawyer might call a flexible exception to the general principle stated in the first sentence2. If it is, the evidence did not cast much light upon the considerations that would bring the exception into play. The qualification is that, at one stage in the course of his cross-examination, Mr Liu assented rather hesitantly to the proposition that, if it appeared just and reasonable, a court in Wuhan might treat Australian (presumably meaning Western Australian) law as applicable to the appellant's claim for damages against OPC. His primary position was that Art 146 was irrelevant. His reason for that was unclear, but it may have been that, like the Full Court, he regarded Chinese choice of law rules as irrelevant. If that were his reason, then it was a proposition of Australian law, upon which his opinion, whether right or wrong, was immaterial. The rule of Australian law which directed McKechnie J to the lex loci delicti, the law of the PRC, did not require him to ignore the fact that the law of 1 Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491. cf Boys v Chaplin [1971] AC 356; Red Sea Insurance Co Ltd v Bouygues SA the PRC made special provision for claims for damages resulting from infringement of rights where both parties to the claim were foreigners and were also nationals of the same country. That the law of the PRC makes provision for such a case is not surprising. In a developing legal system and economy, where foreigners are brought into the country temporarily for special purposes, a decision that their civil relations might be governed by their own laws reflects an understandable policy. The Chinese authorities evidently consider that if, say, an Australian corporation, with Australian staff, is carrying out a construction project in China, it may be reasonable to decide the respective rights and obligations of the corporation, its staff, and their families, by reference to Australian law, assuming there is Australian law which is capable of application. (As it happens, in the present case McKechnie J ultimately decided that, apart from the limitation of actions question, there was no material difference between Western Australian law and the law of the PRC in their application to the facts. That aspect of his decision is not the subject of this appeal.) There was no evidence to suggest that, as a matter of interpretation of Art 146, application of the second sentence would set up some sort of infinite regression by requiring a Chinese court which invoked that sentence to accept, as it were, a reference back from Australia. The word "applied", in both the first and the second sentences of Art 146, appears to refer to the norms of conduct, the obligations and the claim. Furthermore, it was not suggested in evidence that Art 136, the limitation provision, would anticipate and therefore defeat the application of Art 146. Mr Liu said that Art 136 was a matter of substantive law (subject to whatever might be the effect of Art 137), and the argument proceeded on the basis that if the law of the PRC applied, it included Art 136, but that if the law of Western Australia applied it was the Western Australian limitation period (which did not present a problem for the appellant) that was relevant. liabilities, which will be determinative of The argument that the decision of this Court in Regie Nationale des Usines Renault SA v Zhang3 directed McKechnie J to the General Principles excluding Ch VIII, that is to say, that the relevant law of the PRC should be taken to exclude the special provisions made with respect to foreigners in the PRC, was said to have the merit of certainty, and consistency with principle. This may be doubted. If it be accepted that one object of a choice of law rule is to avoid difference in outcomes according to selection of forum, then the objective ought to be to have an Australian court decide the present case in the same way as it would be decided in China. Directing the Western Australian court to the General Principles, but requiring it to ignore Ch VIII, if the appellant's argument about Art 146 is otherwise correct, would appear to ensure difference of outcome. As has been noted, McLure J's reasoning did not turn on (2002) 210 CLR 491. the permissive aspect of Art 146. The reasoning would have been the same if Art 146 had clearly directed that, in a case between two foreigners of the same nationality, their law was to be applied. In that event, it would have been clear beyond argument that a Chinese court would apply Western Australian law, but, on the approach that a Western Australian court must ignore Ch VIII, a Western Australian court would apply the purely domestic law of the PRC. Why Australia's choice of law rule should seek such a result is difficult to see. I am unable to accept that conclusion. There are, however, two further questions, both of which arise from the permissive nature of the second sentence of Art 146. First, is the second sentence of Art 146 a legal rule of a kind that is capable of being picked up by an Australian choice of law rule that directs a Western Australian court to the law of the PRC? Australian law required the Western Australian court to consider the rights and obligations between the appellant and OPC by looking to the law of the PRC. When it looked, the Western Australian court found that, in a court in China, the law of Western Australia "may ... be applied". (The case was argued in the Supreme Court of Western Australia and in this Court, and the reasoning of the judges in the Supreme Court of Western Australia proceeded, on the assumption that "may also be applied" means "may be applied in place of PRC law".) The law of the PRC, in Ch VIII, makes special provisions concerning "civil relations involving foreigners". One such provision is that if both parties to a claim for damages resulting from an infringement of rights are nationals of the same country, the law of their own country may be applied by a Chinese court to decide that claim. It says nothing further to explain the word "may". The substratum of fact upon which the appellant's claim was based remained constant, and existed independently of the laws of either jurisdiction. Let it be assumed (contrary to the view of McKechnie J) that the legal incidents of the relations arising out of those facts according to the law of Western Australia were materially different from the legal incidents of the relations that would have existed had the parties been PRC nationals, or even nationals of two different foreign countries. Even so, the parties were both nationals of Australia, and the law of the PRC provided that, in such a circumstance, a Chinese court was empowered to resolve their dispute by the application of Western Australian law. The Western Australian court would then be faced with a question whether a Chinese court would exercise that power. That, for the Western Australian court, would be a question of fact. If the Western Australian court decided that question in the affirmative, then according to Australian choice of law rules it should apply the law of Western Australia as governing the legal incidents of the relations between the parties. That raises the second question. Was the Western Australian court entitled to decide that question of fact in the affirmative? I find no assistance in a general presumption that, in the absence of evidence to the contrary, foreign law is the same as Australian law. That might be a rational and practical aid to decision-making in many cases, but, whatever its precise extent, the principle seems to me to be devoid of content in this case. The question is not sufficiently described, in abstract terms, as a question of the construction of Art 146. The question is one as to the considerations that are relevant to a decision to invoke the second sentence of Art 146 of the General Principles. There is no Australian law on that subject. In particular, Australian law does not accept a flexible exception to its rule that the lex loci delicti governs foreign torts. The first sentence of Art 146 accords with Australian choice of law rules. The second sentence does not. The principles governing its operation cannot be assumed to be the same as some corresponding Australian principle. The evidentiary presumption is only of assistance in a case where it can be given practical content. This, in my view, is not such a case. The appellant, then, is thrown back on the evidence of Mr Liu. It was barely sufficient, but it is just enough to support McKechnie J's conclusion. It is not inherently implausible that Art 146 calls for a consideration of what is just and reasonable in the circumstances of the case. Furthermore, the present is a case where the relations between the parties were established in Australia (which must be what McKechnie J meant when he said the duty of care was assumed here), the Chinese authorities are totally unaffected by the outcome of the litigation, no Chinese interests are involved, and there appears to be no reason of policy for a Chinese court to resist the proposition that the rights and obligations of the parties should be determined according to the law of Western Australia, assuming the court were sufficiently informed of the law. No one has suggested that Art 150 would apply. The appeal should be allowed. I agree with the further orders proposed by McHugh 19 McHUGH J. The question presented in this case is whether the doctrine of renvoi is a part of the Australian choice of law rule in cases of tort. Specifically, it requires the Court to determine what law an Australian court should apply where: the lex fori's choice of law rules select a foreign law to resolve a particular legal question that is relevant to a dispute; the foreign law would choose not to answer the question by its own law; and the foreign law would answer the question by reference to the lex fori or the law of another legal system. Statement of the case In June 1997, the appellant, Mrs Barbara Neilson, sued the first respondent, Overseas Projects Corporation of Victoria Ltd ("OPC"), in the Supreme Court of Western Australia, in respect of injury she sustained while living in China. Mrs Neilson was born in the United Kingdom but is ordinarily resident in Western Australia. OPC is a company that is owned by the State of Victoria. Its registered office and principal place of business are in Victoria. The second respondent, Mercantile Mutual Insurance (Australia) Ltd ("Mercantile"), was OPC's public liability insurer. OPC joined Mercantile as a third party in the action, claiming that Mercantile was bound to indemnify it against any liability owed by OPC to Mrs Neilson. In the action, Mrs Neilson alleged that she suffered injury as a result of OPC's breach of a contract and breach of a common law duty of care that it owed to her. In par 30(b)(1) of its Defence, OPC pleaded that the law that was applicable to resolve the claim was "the law of Wuhan, China". The trial judge rejected this contention of OPC. He also rejected the claim in contract but found that Mrs Neilson had been injured by reason of OPC's negligence. His Honour awarded her damages of $300,000, an amount on which the parties had agreed, and costs. His Honour also held that Mercantile was bound to indemnify OPC in respect of this judgment. The Full Court of the Supreme Court allowed the appeal, brought by Mercantile, in part on the ground that "the trial judge erred in applying Australian domestic law to Mrs Neilson's tort claim."4 4 Mercantile Mutual Insurance (Australia) Ltd v Neilson (2004) 28 WAR 206 at 216 McHugh The material facts and findings In October 1991, Mrs Neilson suffered severe injury when she fell down a flight of stairs in a double storey unit in the People's Republic of China. At the time, she lived in China with her husband. OPC employed Mrs Neilson's husband for a two-year term as a consultant under a contract, made in Victoria, which required him to live and work in Wuhan, China. Under the contract, OPC agreed to provide accommodation for Mr Neilson. The contract also expressly provided that Mrs Neilson could accompany her husband to Wuhan. Mr and Mrs Neilson were living in a unit provided by OPC when Mrs Neilson fell down the stairs and injured herself. The People's Republic of China assumed responsibility for building and maintaining the units. About 4am on the day she was injured, Mrs Neilson fell over the edge of stairs while going to get a drink. The stairs had no balustrade. She suffered injuries to her head and back. She was in hospital for about 18 days. The pleadings and evidence of foreign law In its Defence, OPC gave three reasons why Mrs Neilson's claim was "not actionable" under Chinese law. First, under Arts 122 and 126 of the General Principles of Civil Law of the People's Republic of China ("the General Principles"), only the "owner, controller or manager of the building" is liable for "injuries sustained in relation to buildings". Second, under Art 135 of the General Principles, the limitation period for "protection of civil rights is 2 years from the date of the injuries being sustained". But under Art 136 of the General Principles, the limitation period for "personal injuries is 1 year from the date of the injuries being sustained." Article 136 declares: "In the following cases, the period of limitation of actions shall be one year: (i) demand for compensation for bodily harm". Third, Arts 119, 143, 144, 145 and 146 limited the "maximum damages" that Mrs Neilson could recover for past and future economic loss. At the trial, OPC tendered an English translation of the General Principles. Chapter VIII of the General Principles is headed "Application of the Law to Civil Relations involving Foreigners" and Art 142 states that "[t]he application of the law to civil relations involving foreigners shall be determined by the provisions of this Chapter." Article 146 of the General Principles declares: "With regard to compensation for damages resulting from an infringement of rights, the law of the place in which the infringement occurred shall be applied. If both parties are nationals of the same country or domiciled in the same country, the law of their own country or of their place of domicile may also be applied." Article 150 of the General Principles contains a caveat to Art 146. It states: McHugh "Where this Chapter provides for the application of the law of a foreign country or of international practice, this must not be contrary to the public interest of the People's Republic of China." OPC also led evidence from an expert witness, Mr Hongliang Liu, as to Chinese law. Decision of trial judge The trial judge, McKechnie J, referred to the choice of law rule that this Court articulated in John Pfeiffer Pty Ltd v Rogerson5 and applied to international torts in Regie Nationale des Usines Renault SA v Zhang6. His Honour held that it required him to apply the lex loci delicti to "all questions of substance to be determined in a proceeding arising from [a] ... tort."7 McKechnie J found that Wuhan was the place of the tort, and Chinese law the applicable law, because: "although a duty of care arose in Australia, breach of that duty of care did not give rise to any cause for complaint until 6 October 1991 when Mrs Neilson fell down the stairs in Wuhan. That was when the wrong crystallised by the infliction of damage." His Honour found that the General Principles applied to foreign nationals. He held that, under Art 106 of the General Principles, OPC assumed liability for "allowing Mr and Mrs Neilson to continue to live in the apartment which had this inherent danger." The danger arose from the lack of a balustrade at the top of the stairwell. He found that Mrs Neilson was not guilty of contributory negligence and awarded her the agreed damages of $300,000. McKechnie J found that, under Art 137, the limitation periods enumerated in Arts 135 and 136 of the General Principles should be extended. However, at the end of this analysis, his Honour also found that Art 146 "gives me a right to choose to apply the law of Australia because both parties are nationals of Australia." McKechnie J then applied principles of Australian negligence law and found that OPC breached the duty of care that it owed Mrs Neilson as landlord and that Mrs Neilson was entitled to judgment in the sum of $300,000. (2000) 203 CLR 503. (2002) 210 CLR 491. 7 Pfeiffer (2000) 203 CLR 503 at 544 [102]. McHugh Decision of the Full Court of the Supreme Court The Full Court allowed the appeal of the second respondent in part on the ground that "the trial judge erred in applying Australian domestic law to Mrs Neilson's tort claim."8 This conclusion was reached on the basis that "the reasoning of the High Court in Pfeiffer and Zhang is inconsistent with the application of the renvoi doctrine to international torts"9 and because "[t]he application of the double renvoi doctrine to international torts would not promote certainty and predictability" given that10: "[i]t would require identification of Australia's choice of law rules, the foreign country's choice of law rules and its attitude to renvoi, from which a conclusion can then be reached as to the domestic law of which country applies." Applying Chinese law, the Court dismissed Mrs Neilson's claim against OPC on the ground that Mrs Neilson's claim was "time barred". The Court held "there were no special circumstances within the meaning of Art 137 that warranted the extension of the one year time limitation imposed by Art 136 of the General Principles"11. The issue The issue for determination is whether it is the law of Australia or China that sets the limitation period for the bringing of Mrs Neilson's claim in tort. If Australian law applies, then Mrs Neilson's claim was brought within time and the trial judge's order that OPC pay Mrs Neilson the sum of $300,000 should be restored. If Chinese law applies, then Mrs Neilson's claim is statute barred. Article 137 of the General Principles states that "special circumstances ... [may] extend the period of limitation of actions." However, there is no ground on which to challenge the Full Court's finding that "there were no special 8 Mercantile Mutual Insurance (Australia) Ltd v Neilson (2004) 28 WAR 206 at 216 9 Mercantile Mutual Insurance (Australia) Ltd v Neilson (2004) 28 WAR 206 at 216 10 Mercantile Mutual Insurance (Australia) Ltd v Neilson (2004) 28 WAR 206 at 216 11 Mercantile Mutual Insurance (Australia) Ltd v Neilson (2004) 28 WAR 206 at 220 McHugh circumstances within the meaning of Art 137"12. The Full Court held that "the trial judge erred in rejecting the evidence of Mr Liu on the interpretation of Art 137 of the General Principles."13 Mrs Neilson submitted to this Court that "it is not clear whether [the circumstances that Mr Liu outlined] were exhaustive of the possible special circumstances or merely a paradigm case."14 But the burden of making clear whether there were additional "possible special circumstances" fell on Mrs Neilson. In failing to discharge that burden at trial, she cannot now rely on Art 137 of the General Principles. Mrs Neilson argues that Australian law applies. This argument entails two propositions: one of fact and one of law. First, as to the proposition of fact, Mrs Neilson contends that Art 146 of the General Principles is a choice of law rule that chooses "the law of ... [the parties'] place of domicile" as the law that is applicable to this dispute. On its face, Art 146 is undoubtedly a choice of law rule. But it is a choice of law rule with a flexible exception. Article 146 mandates that the law that "shall be applied" is "the law of the place in which the infringement occurred". However, Art 146 also states that, "[i]f both parties are nationals of the same country or domiciled in the same country, the law of [the parties'] own country or of their place of domicile may also be applied." This discretionary aspect makes China's choice of law rule different from the choice of law rules that apply in Australia. In Zhang15, this Court rejected the argument that our choice of law rules in international tort cases should be subject to a flexible exception. The evidence is unclear as to how the Chinese courts would exercise the flexible exception that is entailed in the word "may". There are no findings of fact from the trial judge as to whether the Chinese courts would exercise the flexible exception in this particular set of circumstances. This gap in the evidence means that Mrs Neilson failed to discharge the burden that rested on her, as the party seeking to make Australian law applicable16, to prove that the 12 Mercantile Mutual Insurance (Australia) Ltd v Neilson (2004) 28 WAR 206 at 220 13 Mercantile Mutual Insurance (Australia) Ltd v Neilson (2004) 28 WAR 206 at 220 14 [2005] HCATrans 192 at line 455. 15 (2002) 210 CLR 491. 16 Zhang (2002) 210 CLR 491 at 518 [70]; Standard Bank of Canada v Wildey (1919) 19 SR (NSW) 384 at 390-391; BP Exploration Co (Libya) Ltd v Hunt [1980] 1 NSWLR 496 at 503 [24]; Walker v W A Pickles Pty Ltd [1980] 2 NSWLR 281 at 285 [5]; Spain (King of) v Machado (1827) 4 Russ 225 at 239 [38 ER 790 at 795]; (Footnote continues on next page) McHugh Chinese choice of law rule, in this case, would choose Australian law as the applicable law. That "the law of ... [the parties'] place of domicile may also be applied" does not establish, on the balance of probabilities, that that law would be applied. Without any additional evidence as to the manner in which this flexible exception is exercised by Chinese courts, Mrs Neilson has failed to discharge the persuasive burden of proof. In their judgment, Gummow and Hayne JJ seek to overcome this deficiency of evidence by holding that, in the absence of evidence, a presumption exists that a Chinese court would exercise the discretion in the same way that an Australian court would exercise a discretion under a statute. But that approach divorces the discretion from its context. It treats the exercise of the discretion as an abstract question divorced from its context in a choice of law rule. Article 146 is a choice of law rule with a flexible exception. It has no counterpart in Australian law. Its tender negated any presumption that the legal content of Art 146 is the same as the Australian law on that subject. The discretion contained in Art 146 concerns how a choice of law rule should be applied. It constitutes a flexible exception to the choice of law rule otherwise applicable. Hence, the discretionary aspect of the Article is part of the content of the choice of law rule, not an abstract jurisprudential concept. It is part and parcel of a rule of law that has no counterpart in Australian law. It surely cannot be right to hold that there is a presumption that Australian courts would exercise a discretion in accordance with Australian law in respect of a foreign rule of law that is contrary to the Australian rule on the subject. Moreover, for the reasons that Kirby J gives in his reasons for judgment, I am far from convinced that a Chinese court would apply the discretion in Mrs Neilson's favour. Independently of the considerations in the last paragraph, Mrs Neilson cannot rely on the evidential presumption that Chinese law is the same as the lex fori to fill this gap in the evidence for two reasons. First, the evidential presumption is "said to operate against, not in favour, of the party whose obligation it is to prove foreign law."17 Second, by tendering Art 146 of the General Principles in evidence, Mrs Neilson satisfied the evidential – even if not the persuasive – burden of proof as to whether the Chinese court would, or would not, exercise the flexible exception in favour of Mrs Neilson. That is, Mrs Neilson "adduc[ed] evidence sufficient to justify consideration of [the] particular issue"18 as to the law that the Chinese courts would apply to this case. Lloyd v Guibert (1865) LR 1 QB 115 at 129; Szechter (orse Karsov) v Szechter [1971] P 286 at 296; Cross on Evidence, (looseleaf service), vol 1 at [41005]. 17 Cross on Evidence, (looseleaf service), vol 1 at [41005]. 18 Cross and Tapper on Evidence, 10th ed (2004) at 166. McHugh If the evidential burden of proof as to foreign law is satisfied, then the forum trial court is in a position to make factual findings as to the content of the foreign law. If the party on whom the burden rests fails to satisfy the persuasive burden of proving that a foreign choice of law rule is applicable to the party's case, it may be that the evidence that has been tendered is sufficient to satisfy the trial court that, in accordance with the contentions of the opposing party, another choice of law rule is applicable. In this case, the following parts of Art 146 of the General Principles prove, on the balance of probabilities, that a Chinese court would apply to this case, not Australian law, but Chinese law: The declaration that "the law of the place in which the infringement occurred shall be applied" persuasively indicates that generally this is the applicable choice of law rather than the exception that "the law of ... [the parties'] place of domicile may also be applied." Article 146 is found in Ch VIII of the General Principles. That Chapter is headed "Application of the Law to Civil Relations involving Foreigners". The opening words of Art 146, therefore, state the general rule that is applicable to cases involving foreigners. The terms of Art 146 of the General Principles indicate that the law of the parties' domicile is not applied instead of the law of the place of the infringement. Rather, that "the law of ... [the parties'] place of domicile may also be applied" indicates that the lex domicil is applicable only to a case where the laws of the place of the infringement and the parties' domicile may be applied cumulatively. In the context of Art 146, the adverb "also" indicates addition not substitution. Where, for example, the law of domicile provides the plaintiff with a number of causes of action alternative to those available under the law of the place of infringement, Art 146 permits the law of the parties' domicile to be applied. Similarly, it permits the law of domicile to be applied where that law provides the defendant with defences alternative to those available under the law of the place of infringement. But in both cases, the law of domicile is applied in addition to the law of the place of infringement. Where the laws specify different limitation periods, however, the laws are not alternatives. Consequently, it is not possible for the law of the parties' domicile to "also be applied". In such cases – and this is one of them – the law of the place in which the infringement occurred "shall be applied" to the exclusion of the law of the parties' domicile. Let it be assumed in Mrs Neilson's favour, however, that the discretion in Art 146 would be exercised in this set of circumstances to make Australian law applicable, then a further issue arises. Mrs Neilson's second submission is that the lex loci delicti comprises the foreign law's choice of law rule, ie Art 146 of the General Principles, so that an application of the lex loci delicti entails an application of "the law of ... [the parties'] place of domicile". She contends that an application of Australian law as the law of Mrs Neilson's and OPC's "place of McHugh domicile" does not entail a re-application of Australian choice of law rules for two alternate reasons. First, after having selected the Chinese law as the lex loci delicti, the choice of law rules were "spent" and "had no work to do". Secondly, for reasons of pragmatism, the doctrine of renvoi should be limited to single renvoi. The respondents submit that Chinese law applies because the doctrine of renvoi does not apply to international torts. The issue that requires resolution is not whether choice of law rules form part of the lex loci delicti. That is a question of fact. On the evidence, there is no doubt that Art 146 of the General Principles is as much a part of Chinese law as Arts 135 and 136, which fix limitation periods. The issue is whether choice of law rules form part of the category of the lex loci delicti's laws that the forum court makes applicable to the characterised issue of law. In my opinion, they do not. This conclusion follows from the following propositions: Except in cases where evidence is tendered to show that the lex causae rejects the doctrine of total renvoi, applying the "whole" of the lex causae inevitably produces an "infinite regression". (Under the total renvoi doctrine, the forum court's own choice of law rule entails the application of the entirety of the lex causae, which includes choice of law rules and the lex causae's approach to renvoi.) The "infinite regression" can be interrupted only by accepting that the issue cannot be resolved by reference to the entirety of the foreign law and sacrificing logic to concerns of pragmatism. (iii) The point at which that sacrifice is best made, and the foreign law categorised into "applicable" and "inapplicable" foreign law, is fixed by reference to the purpose of choice of law rules. That purpose is to determine which country's legal rules govern the substantive issues in the case. It is furthered by rejecting the doctrine of renvoi and not applying the single renvoi. (Under the single renvoi doctrine, the forum court regards its reference to the law of a foreign jurisdiction as a reference to the choice of law rules of that jurisdiction. It then treats the reference by the choice of law rules of that foreign jurisdiction as a reference to the substantive law of the legal system to which those choice of rules refer the case. This legal system may be that of the forum court or a third legal system.) The "infinite regression" of renvoi The doctrine of renvoi is infamous for infinitely requiring the forum court to apply choice of law rules, but to no end. The problem of the "infinite regression" arises when: McHugh the choice of law rule of the lex fori makes the lex causae the applicable law; the choice of law rule of the lex causae, as proved or presumed, makes the lex fori the applicable law19; and the lex fori has a doctrine of total renvoi. When these circumstances arise, the forum's choice of law rule requires the forum court to apply the choice of law rules of the lex causae. And those choice of law rules of the lex causae require the forum court to apply the choice of law rules of the lex fori. And so "applicable law" goes back and forth on an endless journey. The result is that it is impossible to identify which law resolves the issue that is in dispute. There is only one circumstance where, in proceedings in which choice of law is an issue, the forum's acceptance of the total renvoi doctrine with respect to a choice of law rule will not cause this "hall of mirrors". That circumstance is when a party tenders evidence that shows, to the requisite standard of proof20, that the lex causae rejects the doctrine of renvoi, or has a doctrine of only single renvoi, with respect to the particular choice of law rule. In the first instance, the forum court applies the choice of law rules of the lex causae so as to identify the lex fori as the applicable law and makes no reference to the lex fori's choice of law rules. Only the "substantive" law of the lex fori is applicable. In the latter instance, the forum court goes through the same process, but with one additional step. The court must apply the lex fori's choice of law rules for a second time, but this time ignore the lex causae's choice of law rules. Only the "substantive" law of the lex causae is applicable the second time around. If a party tenders evidence that shows that the lex causae applies a doctrine of total renvoi to its choice of law rule, then the lex fori's own commitment to total renvoi will require the forum court to embark down the long road to nowhere. This is also the case when, as is most common and as occurred 19 If the lex causae chooses the law of a third place, then the "infinite regression" arises if the law of that place chooses the lex causae and both laws apply the doctrine of total renvoi. 20 As already discussed, the onus rests on the party that contends that the foreign law's doctrine of renvoi differs from the lex fori's; Zhang (2002) 210 CLR 491 at 518 [70]; Lloyd v Guibert (1865) LR 1 QB 115 at 129; Wright, Heaton and Co v Barrett (1892) 13 LR (NSW) 206 at 210; BP Exploration Co (Libya) Ltd v Hunt [1980] 1 NSWLR 496 at 503 [24]; Szechter (orse Karsov) v Szechter [1971] P 286 at 296; Cross on Evidence, (looseleaf service), vol 1 at [41005]. McHugh in the instant case, the parties tender no evidence as to the applicability of renvoi to the lex causae's choice of law rule. This is because, in the absence of evidence as to foreign law, the forum court "presumes" that foreign law is the same as the lex fori21. Thus, the forum court must presume that the lex causae, like the lex fori, applies a doctrine of total renvoi to its choice of law rule. In their joint judgment, Gummow and Hayne JJ hold that "Art 146 is not to be understood as permitting, let alone requiring, a Chinese court to have regard to Australian choice of law rules" because "[i]t was not contended, and there was no evidence, that Art 146 was to be understood as having that effect."22 With great respect, that conclusion does not sit easily with their Honours' conclusion that "the lex loci delicti is the whole of the law of that place"23, on the one hand, and their Honours' application of the evidential presumption as to the state of foreign law on the other. The reason for the uneasiness is that no evidence was tendered before McKechnie J, and McKechnie J made no findings of fact, as to the operation of renvoi with respect to the Chinese choice of law rule in tort. The General Principles provide no foundation for concluding that the reference in Art 146 to "the law of their own country or of their place of domicile" is a reference only to that law's "substantive" law and not to its choice of law rules. At all events, the text and context of the General Principles do not establish it clearly enough to satisfy the evidential or persuasive burden of proving foreign law. In the absence of evidence, this Court would ordinarily assume that Chinese law is identical to Australian law. On that hypothesis and for the purposes of resolving this appeal, the Court would presume that Chinese law concerning the applicability of renvoi to the choice of law rule in tort was the same as under Australian law. Hence, if the Australian choice of law in tort selects "the whole of the law of that place", then the Chinese choice of law in tort would be presumed to select also "the whole of the law" of its chosen country. 21 Wright, Heaton and Co v Barrett (1892) 13 LR (NSW) 206 at 210; Bowden Bros & Co v Imperial Marine and Transport Insurance Co (1905) 5 SR (NSW) 614 at 616; BP Exploration Co (Libya) Ltd v Hunt [1980] 1 NSWLR 496 at 503 [24]; Broken Hill Pty Co Ltd v Federal Commissioner of Taxation 99 ATC 5193 at 5,214 [85]; Lloyd v Guibert (1865) LR 1 QB 115 at 129; Bumper Development Corporation v Commissioner of Police of the Metropolis [1991] 1 WLR 1362 at 1368; [1991] 4 All ER 638 at 644; Mount Cook (Northland) Ltd v Swedish Motors Ltd [1986] 1 NZLR 720 at 726-727; Cross on Evidence, 7th Aust ed (2004) at 1358-1360 22 Reasons of Gummow and Hayne JJ at [131] (emphasis added). 23 Reasons of Gummow and Hayne JJ at [102]. McHugh The end result in cases like this one is that this Court can only interrupt the "infinite regression" and reach a decision if the Court rejects the doctrine of total renvoi. Accordingly, the doctrine of total renvoi should be rejected, not only for cases such as the present, but for all other cases, including those in which the foreign law's approach to renvoi is provable. The remaining options, then, are either to apply a doctrine of single renvoi or reject the entire doctrine of renvoi. (ii) The logical impossibility of applying the entirety of the lex loci delicti Regardless of whether this Court rejects the entire doctrine of renvoi or adopts a doctrine of single renvoi, the Court can resolve the appeal only by applying less than the entirety of (what the evidence and the evidential presumptions demonstrate is) Chinese law. I cannot accept, therefore, that this Court can fully "take account of what the foreign jurisdiction would do if the matter were to be litigated there"24. Mrs Neilson contends that the Australian choice of law rule in tort requires the forum court to apply all laws of the lex loci delicti, except for laws that the forum court classifies as renvoi laws; ie laws that define the scope of the lex causae's choice of law rules. She relies on a dictum of Scrutton LJ in Casdagli v Casdagli25. His Lordship said that, where the choice of law rules of the lex causae require the application of the lex fori, the lex fori: "may well apply its own law as to the subject-matter of dispute, being that which the country of domicil [the lex causae] would apply, but not that part of it which would remit the matter to the law of domicil, which part would have spent its operation in the first remittance." This reasoning applies the doctrine of single renvoi. It requires the forum court to apply the lex causae's choice of law rules. But it does so without regard to whether the lex causae would also require the application of the whole of its chosen law. It is not a modified doctrine of total renvoi because it is not the lex causae, but the lex fori, that considers the choice of law rules of the lex fori to have "spent its operation". OPC rejects the doctrine of renvoi and classifies Chinese law differently. OPC submits that the Australian choice of law rule in tort requires the forum 24 Reasons of Gummow and Hayne JJ at [107]. 25 [1918] P 89 at 111. McHugh court to apply all laws of the lex loci delicti. The only exception is laws that the forum court classifies as choice of law rules; ie laws that identify the circumstances in which the rest of its laws are inapplicable and the laws of another place are applicable. Given that, to reach a decision in this case, the Court must categorise Chinese law and apply something less than its whole, the question to be answered is: how should Chinese law be categorised? That is, which Chinese laws should this Court exclude from the bundle of laws that apply to the resolution of this appeal? (iii) Rejecting renvoi or adopting single renvoi? Where the forum's choice of law rules make foreign law applicable to a case, it seems logical to conclude that those choice of law rules should be applied in the way that causes the foreign law to be applied most fully. Thus, to ascertain whether a doctrine of renvoi should be rejected, or a doctrine of single renvoi should be applied, the scope of the foreign law that each approach makes applicable to the contentious issue needs to be compared. Foreign law is applied during the choice of law process in two different spheres. First, it is applied during the "discourse" between the legal systems. That is, it is applied in the process through which the forum court refers to the foreign law in order to identify the law that is determinative of the issue. Second, the lex causae is applied to determine the issue. A doctrine of no renvoi and a doctrine of single renvoi differ in that the latter doctrine causes the foreign law to be more fully applicable during the "discourse", but the former doctrine causes the foreign law to be more fully applicable to determine the issue. No renvoi If the doctrine of renvoi is made inapplicable to the choice of law rule in tort, then none of the lex loci delicti is applied during the discourse. This is because the forum court ignores the choice of law rules of the lex loci delicti. However, the end result of this choice of law discourse is that the forum court applies the laws that the lex loci delicti would have applied to a set of facts that is identical to the instant case in all respects. There is one exception and that is where the parties or the events of the case were connected to another legal system. In this case, the forum court's rejection of renvoi would cause it to apply Art 136 of the General Principles to fix the period of limitations in which Mrs Neilson needed to have brought her claim. On Mrs Neilson's submission as to the meaning of Art 146 of the General Principles, the Chinese courts would also have applied Art 136 to a case like hers, as long as the plaintiff and defendant were not domiciled in or nationals of the same country. Thus, if the doctrine of renvoi is rejected, the result is that the forum court applies the law McHugh that the lex loci delicti would apply to a set of facts that are analogous to, but not congruous with, the facts of the instant case. Single renvoi If the doctrine of single renvoi is applied to the choice of law rule in tort, then the forum court applies all the laws that the lex loci delicti would apply to the set of facts in the instant case during the choice of law discourse. Again there is an exception: it is the law with respect to renvoi. But the end result of this choice of law process is that the forum court applies the laws that the lex loci delicti would not have applied to these facts or to any other set of facts if the lex loci delicti had, in fact, been the lex fori. This is because the doctrine of single renvoi precludes the forum court from taking notice of the lex loci delicti's approach to renvoi and from applying the law that that approach would select. If, in this case, the forum court is an Australian court, then the forum court's application of a doctrine of single renvoi would select Australian law (without its conflict laws) to determine the issue. This is because the doctrine of single renvoi requires the Australian court to apply the Chinese law's (ie the lex loci delicti's) choice of law rules, which select, under Mrs Neilson's construction of Art 146 of the General Principles, Australian law as "the law of [the parties'] own country or ... domicile". However, the Australian court cannot have regard to whether Chinese law would also require the application of the whole of the law of the parties' country or domicile. The problem with this result is that there is no factual circumstance in which a Chinese court would apply Australian law to determine the issue if a Chinese court was the forum court. If the plaintiff and defendant were domiciled in or nationals of the same country, then Art 146 of the General Principles states that "the law of their own country or of their place of domicile may also be applied." In this case, the absence of evidence as to the way that Chinese law defines the reference in Art 146 to "the law of their own country or of their place of domicile" means that the Chinese courts must be presumed to have the same approach to renvoi in tort as the Australian courts; ie adopt a doctrine of single renvoi. Under this doctrine, the Chinese forum court would take notice of the lex domicil's (ie Australian law's) choice of law rules. As the Australian choice of law rules select Chinese law, the result would be that Chinese law (without its conflicts laws) would be applicable to determine the result. Thus, an application by the Australian courts of a doctrine of single renvoi results in the Australian courts applying a set of laws that is entirely different from the set of laws that (an Australian court presumes) would be applied if the action were heard in China. This result is clearly contrary to the aim of Australian conflicts laws, which is to take account of what the foreign jurisdiction would do. In contrast, rejecting the renvoi doctrine enables the forum court to apply the law of the lex loci delicti as fully as possible. Accordingly, it is the McHugh preferable approach given the reasoning in our decisions in Pfeiffer26 and Zhang27. The choice of law rule in tort that was articulated in Pfeiffer28 and applied to international torts in Zhang29 requires the forum court to apply the law of the lex loci delicti, but not those laws that merely "direct[] which law is applicable to a given set of facts."30 The result is that, in this case, Art 146 of the General Principles – which is a law that permits "the law of the place in which the infringement occurred" or "the law of [the parties'] own country or of their place of domicile" to be applied – is not applied by the forum court. Article 146 then cannot be invoked to resolve the issue as to the period of limitations in which the appellant needed to have brought her claim. Article 136 of the General Principles had to be applied by the forum court – the Supreme Court of Western Australia – with the result that Mrs Neilson's claim was statute barred. It follows that the decision of the Full Court must be upheld. On the view that the majority in this Court take of the construction of Art 146, my conclusion has the result that Mrs Neilson loses an action that, on the majority's construction of Art 146, would have succeeded if the case had been commenced and heard in China. But that result is achieved by placing a construction on Art 146 that, with great respect, I think is unjustified. As I have indicated, it is reached only by concluding that "the law of their own country or of their place of domicile" in that Article means the substantive law and not the whole law of the parties' country or place of domicile. There is no evidence to support that construction of Chinese law – which after all is a question of fact – and it runs counter to the presumption, in the absence of evidence, that the Chinese choice of law rules are the same as the Australian choice of law rules. And, as I have indicated, even if the construction that the majority have placed on Art 146 is accepted, I am far from convinced that Mrs Neilson has established that a Chinese court would have applied the substantive law of Australia to resolve the dispute. Order The appeal must be dismissed with costs. 26 (2000) 203 CLR 503. 27 (2002) 210 CLR 491. 28 (2000) 203 CLR 503. 29 (2002) 210 CLR 491. 30 Mann, "Statutes and the Conflict of Laws", (1972-1973) 46 British Year Book of International Law 117 at 118. GUMMOW AND HAYNE JJ. When a tort or delict is committed in a place outside the area over which a court has jurisdiction, what legal significance is the common law to give to the fact of it having been committed in a foreign place? For many years, the common law attached only limited significance to that fact. It applied the "double actionability" rule. That rule, established in 187031, was that an act done in a foreign country was a tort, actionable as such, only if it was both actionable as a tort according to the law of the forum and "not justifiable" by the law of the place where it was done. If those tests were met, the rights and duties of the parties were to be determined according to the law of the forum32. In 2000, in John Pfeiffer Pty Ltd v Rogerson33, this Court restated the common law choice of law rule to be applied in Australian torts involving an interstate element. The Court held that, in intranational torts, the law governing all questions of substance was the law of the place of commission of the tort (the lex loci delicti). In 2002, in Regie Nationale des Usines Renault SA v Zhang34, this Court held that the substantive law for the determination of rights and liabilities in respect of foreign torts was also the lex loci delicti. The double actionability rule now has no application in Australia to intranational35 or foreign36 torts. No exception, flexible or otherwise, is recognised37 to the rule that the lex loci delicti is to be applied to determine substantive questions in both intranational torts and foreign torts. The particular issues which must be examined in this appeal concern a foreign tort. They stem from one fundamental question. What is meant by the lex loci delicti? In particular, what is to be done when the law of the place of commission of the tort would apply the law of a different place because it 31 Phillips v Eyre (1870) LR 6 QB 1 at 28-29. 32 Koop v Bebb (1951) 84 CLR 629. 33 (2000) 203 CLR 503. 34 (2002) 210 CLR 491. 35 John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 at 542 [96] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ, 546-547 [109]-[113] per Kirby J. 36 Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491 at 515 [60] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ, 534-535 [121] per 37 cf Chaplin v Boys [1971] AC 356. attaches significance to a particular feature of the factual circumstances such as the nationality or domicile of one or more of the parties? That is, what is to be done when Australian law chooses the place where the tort is committed as the relevant connecting factor, but the law of that place treats another connecting factor, such as nationality or domicile, as determining the applicable law? The parties to the appeal proffered different answers to these questions. They agreed, however, upon two points. First, there is no determinative judicial authority. Secondly, the answers to the questions that have been identified are to be provided by considerations of basic principle, not by simply pointing to the fact that Australian law chooses the law of the place of commission of the tort. Noting that Australian law makes that choice does no more than pose the questions; it does not answer them. As will appear, the answers to be given to the questions require the appeal to be allowed. The essential facts The appellant, a long-term resident of Western Australia, was the wife of an employee of the first respondent ("OPC"), a company owned by the State of Victoria and having its registered office and principal place of business in that State. The appellant's husband was employed to work in Wuhan, in the People's Republic of China. The husband was required to live in an apartment provided to him by OPC. The appellant accompanied her husband to Wuhan. Before leaving for Wuhan the appellant agreed to do some work as personal assistant to the director of the programme being undertaken by OPC in Wuhan. In Wuhan, the appellant and her husband lived in the apartment provided by OPC. In October 1991, the appellant fell down stairs in the apartment and was injured. More than five years after the accident, in July 1997, the appellant and her husband sued OPC in the Supreme Court of Western Australia. The appellant claimed damages for the personal injuries she had suffered. Her Statement of Claim made no reference to the law of China. She alleged several causes of action, including breach of contract and negligence, but these reasons need deal only with her claim in negligence. The other claims made against OPC failed at trial and are not pursued further in this Court. The second respondent to the appeal, Mercantile Mutual Insurance (Australia) Ltd ("the insurer"), was OPC's public liability insurer. It was originally joined as a third party to the proceedings. In this Court, OPC and the insurer were named as respondents and were jointly represented. It is not necessary to make any further separate reference to the position of the insurer. In its defence, OPC alleged that the appellant's claim was not actionable under the law of China. It asserted that, by Chinese law, the claims the appellant made were statute barred after one year. It asserted that, in any event, by Chinese law the damages that might be awarded were limited to past and future economic loss. OPC's defence referred to a number of provisions of the General Principles of Civil Law of the People's Republic of China. The pleading described these General Principles as having been adopted at the 4th Conference of the 3rd National People's Congress on 12 April 1986 with effect from 1 January 1987. In evidence they were described as having been adopted on 12 April 1986 by the 4th Session of the 6th National People's Congress. Nothing turns on this difference. It is convenient to refer to them as the "General Principles". An English translation of the General Principles was tendered in evidence. This showed the General Principles to be divided into Chs I-IX. Chapter I (Arts 1-8) was headed "FUNDAMENTAL PRINCIPLES" and Art 8 read: "Unless otherwise stipulated by law, the laws of the People's Republic of China shall apply to civil activities carried out within the territory of the People's Republic of China. Unless otherwise stipulated by law, the provisions of this Law with regard to citizens apply to foreign nationals and stateless persons within the territory of the People's Republic of China." (emphasis added) OPC's contention that, under Chinese law, the appellant's claim was statute barred relied upon Arts 135 and 136 of the General Principles. Chapter VII (Arts 135-141) of the General Principles was headed "LIMITATION OF ACTIONS". Articles 135 and 136 were translated as providing: "Article 135. The period of limitation of actions on a request to the People's Court for the protection of civil rights is two years, unless otherwise stipulated by the law. Article 136. In the following cases, the period of limitation of actions shall be one year: demand for compensation for bodily harm ..." The appellant did not file a reply to OPC's defence. As a result, there was a simple joinder of issue on the matters raised by OPC's defence. It appears, however, that the pleadings were not treated by the parties as confining the issues that were to be debated at trial. In particular, although not mentioned anywhere in either side's pleadings, the appellant relied upon Art 146 of the General Principles as an answer to OPC's contentions about the law of China. Chapter VIII (Arts 142-150) of the General Principles was translated with the heading "APPLICATION OF THE LAW TO CIVIL RELATIONS INVOLVING FOREIGNERS". This invites attention back to the reference to other legal stipulation in the general provision made in Art 8 set out above. Article 146 was translated as providing that: "With regard to compensation for damages resulting from an infringement of rights, the law of the place in which the infringement occurred shall be applied. If both parties are nationals of the same country or domiciled in the same country, the law of their own country or of their place of domicile may also be applied. Acts which occur outside the territory of the People's Republic of China and which the law of the People's Republic of China does not recognise as acts of infringement of rights shall not be dealt with as such." The appellant placed chief emphasis in argument in this Court, and in the courts below, upon the second sentence of that provision, namely, that "[i]f both parties are nationals of the same country or domiciled in the same country, the law of their own country or of their place of domicile may also be applied". The appellant contended that her claim in negligence against OPC was to be determined by Australian law because Chinese law (by Art 146) would have applied Australian law. The primary judge In accordance with what had been decided in Zhang, the primary judge (McKechnie J) concluded38 that "the proper law to be applied in this case [to the appellant's claim in negligence, was] the law of the People's Republic of China". At the trial only one witness was called to give expert evidence about Chinese law. That witness (Mr Hongliang Liu) was called by OPC. The primary judge found Mr Liu to be an honest and impartial witness and accepted and "rel[ied] in general" on his opinion as to Chinese law39. His Honour concluded that the General Principles applied to foreign nationals within the territory of China and thus covered the claim by the appellant against OPC40. His Honour further concluded that, under Art 106 of the General Principles, if the acts or omissions of the first respondent caused harm to the appellant, the first 38 Neilson v Overseas Projects Corporation of Victoria Ltd [2002] WASC 231 at 39 [2002] WASC 231 at [126]. 40 [2002] WASC 231 at [128]. respondent "would assume civil liability"41. The correctness of these conclusions is not in issue in the appeal to this Court. Although the primary judge went on to consider how the limitation provisions of the General Principles applied in the matter, it is convenient to pass by this aspect of his Honour's reasons. That is because the primary judge concluded42 that he should apply Art 146 of the General Principles. The primary judge described the consequence of his resort to Art 146 as being the exercise by him43 of "a right to choose to apply the law of Australia"44. It will be necessary to return to consider whether it was correct to treat what, on its face, is a power or discretion given by Art 146 to Chinese courts as if it were a power or discretion to be exercised by an Australian court. Applying Australian common law principles of negligence45, the primary judge held that the appellant should recover damages, assessed in accordance with Australian principles, and entered judgment accordingly. The Full Court The insurer appealed to the Full Court of the Supreme Court of Western Australia. That Court (McLure and Johnson JJ, Wallwork AJ) allowed the 41 [2002] WASC 231 at [144]. Article 106 is found in Section 1 (Arts 106-110), headed "General Provisions", of Ch VI, titled "CIVIL LIABILITY", in the translation. Article 106 states: "A citizen or legal person who violates a contract or fails to fulfil other obligations shall assume civil liability. A citizen or legal person who through his own fault infringes upon State or collective property or upon another person, or who harms another person, shall assume civil liability. If he is not at fault but the law stipulates that he shall assume civil liability, he shall assume such liability." 42 [2002] WASC 231 at [204]. 43 [2002] WASC 231 at [208]. 44 [2002] WASC 231 at [204]. 45 [2002] WASC 231 at [209]-[221]. appeal in part46 and set aside the judgment obtained by the appellant. The principal reasons of the Court were given by McLure J, the other members of the Court agreeing with her Honour's reasons. McLure J considered47 the central issue in the appeal was "whether the private international law doctrine of renvoi applies to international tort claims". Her Honour held48 that the primary judge had erred in applying Australian common law, and that the primary judge "should have applied Chinese domestic law and held that the claim was statute barred". Her Honour concluded49 that to apply "the double renvoi doctrine to international torts would not promote certainty and predictability". This was said50 to follow from the need to identify "Australia's choice of law rules, the foreign country's choice of law rules and its attitude to renvoi, from which a conclusion can then be reached as to the domestic law of which country applies". By special leave the appellant appeals to this Court. The particular questions in this Court The particular questions raised in the appeal to this Court may be identified as being: 1. When applying the lex loci delicti to determine substantive questions arising in the appellant's tortious claim against OPC, was Art 146 of the General Principles a relevant part of that law? If Art 146 was a relevant part of the lex loci delicti, how, if at all, was that provision to be applied in the present case? This second question will require consideration of two subsidiary questions: (a) What evidence was given at trial about s 146? and 46 Mercantile Mutual Insurance (Australia) Ltd v Neilson (2004) 28 WAR 206. 47 (2004) 28 WAR 206 at 208 [1]. 48 (2004) 28 WAR 206 at 220 [65]. 49 (2004) 28 WAR 206 at 216 [47]. 50 (2004) 28 WAR 206 at 216 [47]. (b) What consequences follow from any gap in or deficiency of that evidence? and may require consideration of two further consequential questions: (c) What is the possibility of "infinite regression of reference" from any identification by Art 146 of the law of Australia as the applicable law in this case? and (d) What are the consequences of the reference in Art 146 to the law of the country of nationality when Australia is a federation? The particular questions which arise in this appeal are best examined after some more general underlying principles are identified. General principles Legal scholars have devoted much attention and effort to suggesting what is to be done when the law of the forum, deciding the rights and obligations of parties to a dispute which has some connection with a foreign legal system, looks to that foreign legal system only to find that it would decide the parties' rights and obligations by reference to either the law of the forum or the law of another legal system. To put the question another way, if the law of the forum chooses one connecting factor as determining the choice of law, but the law chosen by the forum treats some other connecting factor as determinative, to which system does the forum look in deciding the rights and obligations of the parties? In some early cases where this problem was recognised and examined, the foreign law chosen by the forum as the governing law (the lex causae) would have applied the law of the forum51. That came about because the law of the forum chose the place of occurrence of events as the relevant connecting factor, whereas the foreign law chose as the connecting factor a status of the parties – nationality or domicile. 51 Collier v Rivaz (1841) 2 Curt 855 [163 ER 608]; Kahn-Freund, General Problems of Private International Law, (1976) (Kahn-Freund) at 286 referring to the Forgo case, Cass. civ. 24.6.1878, D.P. 1879.1.156; S. 1878.1.429, and the Soulier case, Cass. req. 9.3.1910, D.P. 1912.1.262. It is in this context that, some years later, metaphorical references to renvoi ("return" or "reference back") entered the English legal lexicon52 as the description to be applied to the problem and its solution. That is, the problem was presented as if some dialogue occurred between jurisdictions. Would a foreign jurisdiction to whose law the forum had referred, "refer" the issue back to the forum and say that forum law should be applied? Would the forum "accept" the reference back? Could there be an infinite regression of reference, followed by reference back? An immense amount of scholarly literature has been produced. Subsets of the problem have been identified as cases of single renvoi or double renvoi. Scholars have asserted that there was not53 or there was54 a fundamental logical fallacy underlying what was happening. One leading scholar has said55 of the literature that it is "extensive and partly of very high quality" and that, as a result, "[i]t is difficult to believe that anyone could produce any argument which has not already been advanced". But the scholarly debate has focused more upon theoretical explanations for the method of solution than upon the principal and essentially practical concern of the courts, which is to decide the controversies that are tendered by the parties for decision. Against this background it is necessary to begin consideration of the problems presented in this appeal by stating some premises from which the examination proceeds. Three premises are identified. They can be referred to as "No advantage"; "Certainty and simplicity"; and "The significance of theories of renvoi". No advantage The first and most important premise for considering the issues raised in the appeal is that the rules adopted should, as far as possible, avoid parties being able to obtain advantages by litigating in an Australian forum which could not be obtained if the issue were to be litigated in the courts of the jurisdiction whose law is chosen as the governing law. 52 See the Note at (1898) 14 Law Quarterly Review 231; Griswold, "Renvoi Revisited", (1938) 51 Harvard Law Review 1165. 53 Cowan, "Renvoi Does Not Involve a Logical Fallacy", (1938) 87 University of Pennsylvania Law Review 34. 54 Griswold, "In Reply to Mr Cowan's Views on Renvoi", (1939) 87 University of Pennsylvania Law Review 257. 55 Kahn-Freund at 285. Once Australian choice of law rules direct attention to the law of a foreign jurisdiction, basic considerations of justice require that, as far as possible, the rights and obligations of the parties should be the same whether the dispute is litigated in the courts of that foreign jurisdiction or is determined in the Australian forum. This is not a consideration which seeks uniformity for the sake of the aesthetic value of symmetry. Nor is it a precept founded in notions of international politeness or comity56. As has been said57, comity is "either meaningless or misleading"; it is "a matter for sovereigns, not for judges required to decide a case according to the rights of the parties". Rather, adopting a rule that seeks to provide identical outcomes is neither more nor less than an inevitable consequence of adopting a choice of law rule to which there is no exception. To apply that choice of law rule in a way that would permit a party to gain some advantage by litigating in the courts of the forum, rather than the courts of the jurisdiction whose law provides the governing law, would constitute a considerable qualification to that choice of law rule. A party could gain an advantage by litigating in the courts of the forum rather than the courts of the foreign jurisdiction only if the forum were to choose to apply only some of the law of that foreign jurisdiction. And to do that would make a significant inroad upon what on its face is stated to be an unqualified choice of the law which is to govern the rights and obligations of the parties: the lex loci delicti. Certainty and simplicity The second premise for consideration of the problem is that certainty and simplicity are desirable characteristics, not only when stating the applicable rule, but also when a court comes to apply the rule. Perhaps they are ideals that can never be attained. But as Kahn-Freund pointed out58, the intellectual challenge presented by questions of conflict of laws is its main curse. Whenever reasonably possible, certainty and simplicity are to be preferred to complexity and difficulty. 56 Kahn-Freund at 318. 57 North (ed), Cheshire's Private International Law, 9th ed (1974) at 4; cf North and Fawcett (eds), Cheshire and North's Private International Law, 13th ed (1999) at 5. 58 Kahn-Freund at 320. Certainty and simplicity are important consequences of adopting59 the rule that the lex loci delicti governs questions of substance in tort and rejecting60 exceptions or qualifications, flexible or otherwise, to that rule. What have come to be known as "flexible exceptions" to choice of law rules are necessarily uncertain61. That is the inevitable consequence of their flexibility. Experience reveals that such rules generate a wilderness of single instances. Especially is that so if the application of the exception depends upon giving content to qualitative expressions like "more significant relationship ... to the occurrence and the parties"62. And experience also dictates that these difficulties are not removed by reference to considerations such as State interests63. To take no account of what a foreign court would do when faced with the facts of this case does not assist the pursuit of certainty and simplicity. It does not assist the pursuit of certainty and simplicity because it requires the law of the forum to divide the rules of the foreign legal system between those rules that are to be applied by the forum and those that are not. This requires the forum to impose on a foreign legal system, which must be assumed is intended to constitute an integrated system of interdependent rules, a division which that system may not make at all. And to make that division, the forum must consider hypothetical circumstances which are not identical to those of the case under consideration. Neither dividing the rules of the foreign legal system nor the manner of effecting that division assists the pursuit of certainty and simplicity. An example may illustrate the point. A foreign legal system may make separate provision for the kinds of loss sustained by a person as a result of a 59 Pfeiffer (2000) 203 CLR 503 at 539-540 [83]-[86] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ; Zhang (2002) 210 CLR 491 at 517 [66] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ. 60 Pfeiffer (2000) 203 CLR 503 at 538 [79]-[80] per Gleeson CJ, Gaudron, McHugh, 61 Pfeiffer (2000) 203 CLR 503 at 538 [79] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ; cf Babcock v Jackson 191 NE 2d 279 (1963) and subsequent decisions about guest passenger liability. 62 Restatement of Conflict of Laws, 2d, vol 1, Ch 7, Topic 1, Title B, "Particular Torts", (1971), §146. 63 Alaska Packers Association v Industrial Accident Commission of California 294 US 532 (1935); Allstate Insurance Co v Hague 449 US 302 (1981); Phillips Petroleum Co v Shutts 472 US 797 (1985); Franchise Tax Board of California v Hyatt 538 US 488 (2003). traffic accident, recoverable from the party whose negligence caused that loss, according to whether the negligent party was a national of, or domiciled in, that foreign country. The differences may reflect not only different insurance arrangements for "local" drivers from those applying to others but also different social security and health arrangements. That is, the foreign legal system may also make provision in its social security and health legislation for giving larger benefits to those who are nationals of, or domiciled in, the country than the benefits allowed to others. If the Australian choice of law rules look only to the "domestic" law of that country, what account is to be taken of these different social security and health provisions in deciding the extent of the liability to an Australian citizen of the Australian employer of a negligent "local" driver sued in an Australian court? Is reference to be made only to the foreign law that deals with recovery of damages? Is reference to be made to the social security and health provisions? Any division that is made is necessarily an incomplete and incoherent reflection of the law of that place. The significance of theories of renvoi Thirdly, as may be apparent from what has already been said, scholarly analyses of renvoi by the metaphors of "reference", "reference back" and "acceptance" do not provide a sure footing upon which to construct applicable rules. The metaphors of reference, reference back and acceptance suggest, wrongly, the existence of some dialogue between legal systems. They therefore mask the nature of the task being undertaken. That task is to determine, here as an element of the common law of Australia, the source and content of rules governing the rights and obligations of parties to a particular controversy. less importantly, such theories depend upon the underlying assumption, referred to in connection with considerations of certainty and simplicity, that it is useful, apparently as an exercise in characterisation by the law of the forum, to attempt to divide foreign legal systems between rules of "domestic law" and choice of law rules. That this assumption underpins much of the scholarly analysis of renvoi is apparent from the treatment of that subject in the work of Dicey and his later editors64. There, the problem of renvoi is dealt with by definition. The "law of a country" is defined65, when applied to a foreign country, as "usually the domestic law of that country, sometimes any domestic law which the courts of that country would apply to the decision of the case". 64 See, for example, Dicey, The Conflict of Laws, (1896) at 75; Dicey and Morris on the Conflict of Laws, 13th ed (2000), vol 1 at 65. 65 Dicey and Morris on the Conflict of Laws, 13th ed (2000), vol 1 at 65. As mentioned earlier, the distinction between the domestic law of the foreign jurisdiction and its conflict of laws rules may not be easy to draw. To draw such a distinction invites difficulties of the same kind as have so long attended the distinction between procedural and substantive questions66. But even if those difficulties could be overcome, why should a choice of law rule which provides that the rights and obligations of the parties to a proceeding are to be resolved according to the law of a foreign jurisdiction refer to some but not all of that foreign law in deciding those rights and obligations? Why should choice of law be premised upon the results of imposing on a foreign legal system a division which that foreign system may not make? Those questions are not to be answered by choosing one theory of renvoi as the premise from which subsequent arguments proceed. Choosing a single overarching theory of renvoi as informing every question about choice of law would wrongly assume that identical considerations apply in every kind of case in which a choice of law must be made. But questions of personal status like marriage or divorce, questions of succession to immovable property, questions of delictual responsibility and questions of contractual obligation differ in important respects. Party autonomy may be given much more emphasis in questions of contract than in questions of title to land. Choice of governing law may be important in creating private obligations by contract but less important when the question is one of legal status. Choosing one theory of renvoi as applicable to all cases where a choice of law must be made would submerge these differences. No doubt that is why Kahn-Freund urged67 that in this field dogmatism must yield to pragmatism. Where, as in the present case, the focus falls upon choice of law in tort, attention must be paid to the reasons that underpin reference to the lex loci delicti as the law governing questions of substance that arise in cases of that kind. As the joint reasons in Zhang explain68, the bases upon which the law of the forum was once given a controlling role in relation to delictual liability, because of connections perceived between the law of civil delict and the criminal law of the forum, are now seen as infirm. Rather, as those joint reasons demonstrate69, adopting the lex loci delicti accommodates requirements of certainty with the modern phenomenon of the "movement of people, wealth and skills across state 66 Pfeiffer (2000) 203 CLR 503 at 542-543 [97] per Gleeson CJ, Gaudron, McHugh, 67 Kahn-Freund at 290. 68 (2002) 210 CLR 491 at 509-515 [43]-[60]. 69 (2002) 210 CLR 491 at 515-517 [61]-[65]. lines"70. As one North American scholar has put it71, "[i]n an age of high personal and professional mobility, the significance attached to the concept of the personal law is in decline; activity-related connections are increasingly thought to offer a more stable and predictable criterion for choice of law". In applying the lex loci delicti, was Art 146 of the General Principles relevant, or was it to be discarded from consideration as not being a part of what an Australian court classifies as the "domestic" law of China? OPC submits that Art 146 was to be discarded for that reason. The appellant contends to the contrary. Was Art 146 relevant? The premises earlier described require the conclusion that choosing the lex loci delicti as the law to govern questions of substance where a claim is made for a foreign tort is not to be confined to reference to what the forum classifies as the domestic law of that jurisdiction: the law that that foreign jurisdiction would apply in a case having no element foreign to it but otherwise identical with the facts under consideration. At least where the choice of law rules of the lex loci delicti depend upon a connecting factor other than place, such as nationality or domicile, the lex loci delicti is the whole of the law of that place. There are some consequences entailed by that conclusion that should be noticed. Two are obvious. First, if the foreign jurisdiction would choose to apply the law of the forum, and not the law of the place where the wrong was committed, the forum should apply its own law. Second, if the law of the place where the wrong was committed would look to a third jurisdiction to provide the relevant law governing the resolution of substantive questions, the forum should look to and apply the law of that third jurisdiction. Some other consequences that might be said to follow from the conclusion that account is to be taken of a foreign jurisdiction's choice of law rules in tort are less obvious but should also be noticed. They should be noticed because they may be said to reveal that, despite the first two consequences being acceptable, other consequences entailed by a conclusion that reference should be made to the whole of the law of the place of commission of the tort would arguably be less readily acceptable. 70 Tolofson v Jensen [1994] 3 SCR 1022 at 1047 per La Forest J. 71 Walsh, "Territoriality and Choice of Law in the Supreme Court of Canada: Applications in Products Liability Claims", (1997) 76 Canadian Bar Review 91 at The same kinds of question about choice of law may be presented not only where, as the appellant contended to be the case here, the law of the forum and the law of the place choose different connecting factors to determine the applicable law. They may be presented in at least three other kinds of case. Thus, they may be presented where the law of the forum and the law of the place use the same connecting factor but apply it differently. They may be presented where the two jurisdictions would characterise the problem differently72. They may be presented if the law of the place applies no single connecting factor but seeks to identify the so-called proper law of the tort73. The present case is not of these kinds. But it is easy to imagine cases where different legal systems would identify differently the place of commission of a tort, like defamation, or liability for defective products. It is easy to imagine cases where different legal systems would characterise a particular claim differently (as a claim in contract rather than tort or vice versa). It is well known that some foreign jurisdictions have adopted the proper law of the tort as the applicable choice of law rule. In all of these cases, the question would arise: is the law of the forum to take account of what the foreign jurisdiction would do if the matter were to be litigated there? The reasons which favour applying the whole of the law of the place of commission of the tort, where that law adopts a connecting factor other than place of occurrence, are no less applicable to the cases identified. Once the step is taken of giving effect to what the foreign law would do when applying its choice of law rules, there is no reason to shrink from doing that in any of the cases identified. Until the abandonment of rules that used the law of the forum as the governing law in tort, no question of renvoi could arise in tort. The double actionability rule established in Phillips v Eyre gave only limited significance to the law of the place where the tort was committed. But now that the rights and obligations of parties are to be determined by reference to the lex loci delicti, it is necessary to confront directly the problem of what is meant by that. For the reasons given earlier, in a case like the present, reference to only part of that law would not give proper effect to the reasons that underpin reference to the law of the place where the tort was committed – the lex loci delicti. 72 Harris, "Does Choice of Law Make Any Sense?", (2004) 57 Current Legal Problems 305 at 312-313. 73 See, for example, Base Metal Trading Ltd v Shamurin [2005] 1 WLR 1157. It may be said that the result reached in these reasons, of understanding reference to the lex loci delicti in this particular case as reference to the whole of the law of China, represents a sharp departure from what hitherto has been understood to be a dominant view in Anglo-Australian conflict of laws. In that regard, leading scholars, particularly Dr J H C Morris and his successors as editors of Dicey, later Dicey and Morris, on The Conflict of Laws, have exhibited a marked antipathy to renvoi. Other scholars have taken a different view74. Morris and his successors have said75 that "in all but exceptional cases the theoretical and practical difficulties involved in applying the doctrine outweigh any supposed advantages it may possess". it must be recognised that some In so far as those authors spoke of practical difficulties the proposition is not self-evidently true, but its validity need not be examined in this case. For present purposes, it is enough to notice that those authors go on to accept76 that the doctrine should be invoked if it is plain that the object of the relevant choice of law rule, in referring to a foreign law, will on balance be better served by construing the reference to foreign law as including the conflict rules of that law. A choice of law rule for foreign torts which requires reference to and application of the lex loci delicti, without exception, is such a case. And whatever may be the consequent difficulties in articulating a single coherent and overarching doctrine of renvoi for the whole field of conflict of laws, adopting this rule need present no great practical difficulty. Indeed, to refer to the whole of the law of the place of commission of a tort runs less risk of incoherence than does reference to only part of that law. And as these reasons will later show, such difficulties as exist in the present case stem not from choosing to apply the whole of Chinese law but from the nature of the evidence that was given at trial about that law. In the present case, then, the primary judge was right to have regard to Art 146. But how was it to be applied? 74 See, for example, Briggs, "In Praise and Defence of Renvoi", (1998) 47 International and Comparative Law Quarterly 877; Rimmel, "The Place of Renvoi in Transnational Litigation – A Pragmatic Approach to An Impractical Doctrine", (1998) 19 Holdsworth Law Review 55. 75 See, for example, Dicey and Morris on the Conflict of Laws, 13th ed (2000), vol 1 at 73-74 (footnote omitted). 76 Dicey and Morris on the Conflict of Laws, 13th ed (2000), vol 1 at 74-76. The application of Art 146 At the outset it should be said that the primary judge was wrong to hold that Art 146 of the General Principles somehow permitted him to exercise "a right to choose to apply the law of Australia"77. As Pfeiffer demonstrated, an Australian court applying the common law rules of choice of law applies Australian law, but it derives the content of the rights and obligations of the parties by reference to the chosen foreign law. That process is radically different from treating the foreign law as giving to Australian courts powers or discretion under that foreign law which then fall to be exercised by the Australian court according to Australian principles. Yet in essence that appears to be what the primary judge did. Rather, the question presented in this case about Art 146 was how, if at all, would a Chinese court exercise the power or discretion given by that Article? What answer did the evidence permit to be given to that question? Examination of that question must again begin from a consideration of basic principles. Australian courts know no foreign law The courts of Australia are not presumed to have any knowledge of foreign law. Decisions about the content of foreign law create no precedent. That is why foreign law is a question of fact to be proved by expert evidence78. And it is why care must be exercised in using material produced by expert witnesses about foreign law. In particular, an English translation of the text of foreign written law is not necessarily to be construed as if it were an Australian statute. Not only is there the difficulty presented by translation of the original text, different rules of construction may be used in that jurisdiction. It will be necessary to return to consider how these precautionary admonitions intersect with the well-known rule that, absent proof of, or agreement about, foreign law, the law of the forum is to be applied79. In addition, it will be necessary to consider what evidence a suitably qualified expert can give about the way in which a provision, like Art 146, apparently conferring a power or giving a discretion to a foreign court, would be applied in that foreign jurisdiction, either generally or in the particular case. First, however, it is necessary to consider the evidence that was given about Art 146. 77 [2002] WASC 231 at [204]. 78 Di Sora v Phillipps (1863) 10 HLC 624 [11 ER 1168]; National Mutual Holdings Pty Ltd v Sentry Corporation (1989) 22 FCR 209. 79 Lloyd v Guibert (1865) LR 1 QB 115 at 122-123. The evidence about Art 146 The expert evidence of Mr Liu about Art 146 was brief. Neither in his written opinion, nor in his evidence-in-chief, did he refer to that Article. In cross-examination he denied that Art 146 was relevant to this case, but it seems that this denial was founded in his understanding of Australian choice of law rules. He understood Australian choice of law rules as requiring, and permitting, reference to Chinese domestic law only, not Chinese choice of law rules. He accepted that had the appellant sued in China she could have asked a Chinese court "for an order applying Australian law" and he accepted the suggestion, put to him, that in such a case the court in China would determine that question according to its own ideas of fairness and the justice of the case. What was meant by this was not explored, and counsel for OPC did not re-examine Mr Liu on this or any other aspect of Art 146. It is, of course, pointless to speculate about why evidence took this course. The court does not, and should not, know what material counsel for either side had available when deciding what questions would be asked of this witness or deciding whether some competing evidence should be called. It is for the parties and their advisers to decide the ground upon which their battle is to be fought80. The trial is not an inquisition into the content of relevant foreign law any more than it is an inquisition into other factual issues that the parties tender for decision by the court. Expert evidence about foreign law, like any other form of expert evidence, presents questions about what limits there are to the evidence that may be adduced from an expert witness. The Evidence Act 1995 (Cth), and equivalent statutes, provide in s 80 that evidence of an opinion is not inadmissible only because it is about a fact in issue or an ultimate issue. No provision of that kind applied at the trial of this matter. It follows that in this case, where a provision like Art 146 was in issue, there may have been some question about what evidence an expert might give to elucidate how a Chinese court would apply that provision. It has been held81 that expert evidence about foreign law can be divided into evidence about the content of the law and evidence about its application to 80 cf Ratten v The Queen (1974) 131 CLR 510 at 517 per Barwick CJ. 81 Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (No 6) (1996) 64 FCR 79. the facts of the particular case. The former is said82 to be admissible; the latter not. But as National Mutual Holdings Pty Ltd v Sentry Corporation83 reveals, a distinction between content and application evidence is not to be understood as precluding an expert from examining in evidence how a power or discretion would be exercised by a foreign court. An overly abstract articulation by an expert of a foreign court's approach to the exercise of a power or discretion will be of little assistance to the tribunal of fact. Yet the closer the examination comes to the particular set of facts under consideration in the instant case, the closer the expert may be said to come to offering an opinion about how a foreign court, confronted by those facts, would decide the case. But in doing that, does the expert give evidence that is inadmissible? In the National Mutual Case, it was decided84 that "[w]here the relevant rules and principles of foreign law are so framed as to confer discretions upon the courts which administer them ... evidence is receivable as to the manner in which those discretions are exercised, with reference to any pattern or course of decision". Evidence of that kind was held not to trespass upon the function of the court of the forum to decide the effect of the application of the rules and principles of the law of the foreign jurisdiction to the particular facts and circumstances of the instant case. In the present case, then, it was open to the parties to adduce evidence of how Art 146 is administered in the courts of China. But this they did not do, whether by describing the matters which a Chinese court would consider relevant to that question or by pointing to any particular examples of its consideration. Having in evidence no more than the translated text of Art 146 and the expert's assent to the proposition that the power given by the Article was to be exercised according to fairness and the justice of the case, the trial judge was bound to conclude that Chinese law, when applied to the facts of this case, would look to the law of the nationality or domicile of the parties. For the reasons that follow, the trial judge was bound to reach that conclusion no matter whether the analysis of the evidence that was given proceeds from the premise that there was some want of or deficiency in the evidence, or proceeds from the premise that all 82 (1996) 64 FCR 79 at 82; see also United States Trust Co of New York v Australia and New Zealand Banking Group Ltd (1995) 37 NSWLR 131 at 146. 83 (1989) 22 FCR 209. 84 (1989) 22 FCR 209 at 226. that could be said about the content and application of Art 146 had been said in evidence. If there is thought to be some deficiency in the evidence, the "presumption" that foreign law is the same as the law of the forum comes into play85. That would then require an Australian court to approach the task of construing Art 146 as it would approach the construction of an Australian statute86. Neither the absence of pleading the relevant content of foreign law87 nor the absence of proof88 would be fatal to the case of the party relying on the relevant provision of foreign law. If the presumption was applied it would follow that the relevant power or discretion would be exercised, as it would by an Australian court under an Australian statute, having regard to its scope and the objects for which it was conferred89. By contrast, if the evidence given at the trial were to be treated as if it was a complete account of all principles relevant to the application of Art 146, fairness and the justice of the case would require the conclusion that Australian law should apply. It may be said that the hypothesis that the evidence given at trial was a complete account of principles relevant to the application of Art 146 should be rejected as improbable. It is, however, not necessary to decide that point. Whether regard is had to the scope and objects of the power or discretion, or regard is had, on the hypothesis identified, to fairness and the justice of the case, the conclusion available on the limited evidence led at trial is the same. All parties to the dispute were Australian. The only connection between the dispute and China was the place of occurrence of the tort. Although locating the place of commission depended upon the location of the apartment, and it was the condition of the apartment in China (which had presumably been built according to the locally applicable laws and standards) that lay at the heart of the appellant's claim in negligence, there was no evidence that suggested that either of those 85 Cross on Evidence, 7th Aust ed (2004) at 1358-1360 [41005]. 86 cf F & K Jabbour v Custodian of Israeli Absentee Property [1954] 1 WLR 139 at 147-148; [1954] 1 All ER 145 at 153. 87 Zhang (2002) 210 CLR 491 at 518-519 [69]-[72]. 88 cf Fentiman, Foreign Law in English Courts, (1998) at 142-158. 89 Klein v Domus Pty Ltd (1963) 109 CLR 467 at 473 per Dixon CJ; Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 (2003) 77 ALJR 1165 at 1178 [69] per McHugh and Gummow JJ; 198 ALR 59 at 75-76. considerations was relevant to the application of Art 146. Rather, all that was shown to be relevant to what fairness and the justice of the case required when applying that Article were the considerations mentioned in the Article itself – the place of the tort and the nationality or domicile of the parties. That being so, the conclusion that Art 146 required the application of the law of the country of nationality or domicile of the parties was inevitable. There remains what earlier in the reasons was identified as two consequential questions which might require consideration. As will now appear, no concluded answer to either of them is called for on this occasion. What is meant when it is said that the law of the place where the tort was committed would apply the law of the country of nationality or domicile? There are two aspects to that question. The first is like the question "what is meant by the lex loci delicti?" When the foreign law refers to the law of the country of nationality or domicile, does that reference include the conflict of laws rules of that country? Secondly, what is to be done when the country of nationality or domicile is a federal state? The first aspect of this question conjures up the spectre, mentioned earlier in these reasons, of the infinite regression90 of reference followed by reference back. The second suggests an inexactness of reference and consequent difficulty in working out what the lex loci delicti requires. Infinite regression? The possibility of an infinite regression of reference was a principal reason underpinning the Full Court's conclusion91 in this case that to apply "the double renvoi doctrine to international torts would not promote certainty and predictability". This was said92 to be because of the need to identify not only Australia's choice of law rules but also "the foreign country's choice of law rules and its attitude to renvoi" (emphasis added). 90 The expression "infinite regression" is taken from the debate between Professors Cowan and Griswold: Cowan, "Renvoi Does Not Involve a Logical Fallacy", (1938) 87 University of Pennsylvania Law Review 34 and Griswold, "In Reply to Mr Cowan's Views on Renvoi", (1939) 87 University of Pennsylvania Law Review 91 (2004) 28 WAR 206 at 216 [47]. 92 (2004) 28 WAR 206 at 216 [47]. In this particular case, however, Art 146 is not to be understood as permitting, let alone requiring, a Chinese court to have regard to Australian choice of law rules. It was not contended, and there was no evidence, that Art 146 was to be understood as having that effect. Moreover, there is no basis in the context, provided particularly by Art 8 of the General Principles and the heading to Ch VIII, that would warrant that conclusion. Rather, both text and context point to Art 146 being understood as providing for a once for all reference of the problem out of Chinese law and into the law of the country of nationality or domicile. That may, perhaps, leave open the possibility in Chinese law that a Chinese court would recognise the consequences of a reference by the law of the country of nationality or domicile to a third legal system, but that is a question that does not arise here. What is clear is that Art 146 is intended to achieve the result that the rights and obligations of those who are nationals of, or domiciled in, another country are to be determined by a law other than the law of China. It must nonetheless be recognised that there may be cases where the law of the place where a tort is committed would determine the rights and duties of the relevant parties by referring to all of the law of Australia, including Australian common law choice of law rules. That is, there may be cases where Australia would look to the whole of the law of that country only to find that country looking to the whole of the law of Australia. It may be asked, where and how would such a circle of reference be broken? But this approach to the matter is apt to introduce those notions of dialogue between legal systems which have been disfavoured earlier in these reasons. The task is to consider the content of the Australian choice of law rule which has fixed upon the lex loci delicti93. In Casdagli v Casdagli94, Scrutton LJ adverted to this issue in connection with the law of a person's domicile. What was to be done if the relevant law of the foreign domicile of an English national applied the law of the nationality? He suggested95 that one possible solution to the conundrum thus presented was to regard the reference to the law of the domicile as requiring reference back to the law of the forum "but not that part of [the law of the forum] which would remit the matter to the law of domicil, which part would have spent its operation in the first remittance" (emphasis added). 93 Harris, "Does Choice of Law Make Any Sense?", (2004) 57 Current Legal Problems 305 at 346. 94 [1918] P 89. Scrutton LJ was in dissent but an appeal to the House of Lords was allowed: [1919] AC 145. 95 [1918] P 89 at 111. It is not necessary to explore whether this solution should be adopted. For the moment, it is enough to recognise the existence of the problem and to conclude that its existence does not warrant departing from the conclusion, earlier expressed, that reference to the lex loci delicti is to be understood as reference to the whole of that law. The Australian choice of law rule will not yield disagreeable uncertainty and complexity if it is interpreted as giving full effect to its selection as the lex causae of the whole of the foreign law, even where what is classified as the foreign choice of law rule and which is thereby adopted prefers Australian law as dispositive of the case. In such circumstances, to say that the reference back to the law of the forum is "accepted" would be to do no more than abide the consequences of the initial selection of the lex loci delicti. That choice of law would not have miscarried where, by reason of the content of the lex loci delicti, the outcome in the forum was the same as if there had been no initial choice of a foreign law. Reference to the law of the country of nationality in a federation At trial no separate consideration was given to what consequences, if any, followed from the reference to the law of the country of nationality rather than to the law of a particular State or Territory. And although the appellant's Statement of Claim alleged that she was domiciled in Western Australia nothing was said at trial or subsequently to turn on this fact. The course taken at trial may be supported on the basis that the relevant claim was to be identified as a claim in negligence brought in accordance with the common law of Australia96 and raising no question about the application of a (State) limitation provision. No contrary contention was advanced on appeal to the Full Court or on appeal to this Court. The point must be noted but need not be examined further. Conclusion and order For these reasons, the appellant was entitled to the verdict she obtained at trial. Her appeal to this Court should be allowed with costs. The following consequential orders should be made: set aside so much of the orders of the Full Court of the Supreme Court of Western Australia made on 3 May 2004 as set aside the judgment entered at trial in favour of the appellant in this Court and the order made at trial for her costs; 96 Lipohar v The Queen (1999) 200 CLR 485. in their place, order that the appeal to that Court against that judgment and order is dismissed with costs. Kirby 137 KIRBY J. This appeal from a judgment of the Full Court of the Supreme Court of Western Australia97 originated in a decision of McKechnie J (the primary judge)98. His Honour upheld a claim in negligence brought by Mrs Barbara Neilson (the appellant). That claim arose out of a civil wrong alleged to have occurred in Wuhan, in the Province of Hubei in the People's Republic of China ("China"). The defendants to the proceedings were Overseas Projects Corporation of Victoria Ltd ("OPC"), a company owned by the State of Victoria with its registered office in that State and Mercantile Mutual Insurance Australia Ltd ("MMI"), OPC's public liability insurer, also an Australian company with its registered office in New South Wales99. Instead of bringing her claim, as it was narrowed at trial100, in China – correctly found to be the place of the wrong101 (and ostensibly a "clearly more appropriate forum" for the litigation102) – the appellant, an Australian national whose ordinary residence was in Western Australia, prosecuted her claim in the Supreme Court of that State. Two issues of private international law arise from that action. The first is whether the limitation law applicable to the appellant's proceeding was that of China (in which event she was well out of time unless "special circumstances" were applicable to her case under Chinese law103) or that of Australia, specifically Western Australia (in which event the claim was within time104). 97 Mercantile Mutual Insurance (Australia) Ltd v Neilson (2004) 28 WAR 206. 98 Neilson v Overseas Projects Corporation of Victoria Ltd [2002] WASC 231. 99 [2002] WASC 231 at [2]. 100 Following the rejection by the primary judge of claims based in contract and under Australian legislation. 101 [2002] WASC 231 at [123]. See reasons of Callinan J at [230]. 102 cf Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 at 477-478. But see Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538. 103 China, General Principles of Civil Law ("GPCL"), Arts 135, 136, 137. See [2002] WASC 231 at [185]. 104 The Limitation Act 1935 (WA), s 38(1)(c)(vi) provided for the commencement of proceedings within six years. At the applicable time, when the appellant's proceedings were commenced, the Limitation of Actions Act 1958 (Vic), s 5 provided the same time bar. The latter Act was amended by the Limitation of Actions (Amendment) Act 2002 (Vic), s 3(2) to substitute a three year limitation period in respect of such proceedings but only if commenced thereafter. Kirby Anterior to the resolution of the limitation issue was a further question arising under Chinese law105. This was whether, by an express provision allegedly applicable to the appellant's proceedings, the primary judge was bound, or permitted, to resolve the limitation issue and other questions as to the law to be applied at trial by reference to the law of the nationality or domicile of the parties. The primary judge resolved the two issues in favour of the appellant106. The appellant therefore succeeded in recovering damages. However, the Full Court107 set aside that judgment. It decided the second question contrary to the appellant's arguments. It also set aside the primary judge's purported extension of the limitation period "under Chinese law"108. The Full Court concluded that, under Chinese law, the appellant's claim was time-barred109, obliging entry of judgment in favour of the respondents. Now, by special leave, the appellant appeals to this Court. The facts and legal developments The facts: The appellant sustained injuries on 6 October 1991 when she fell at night on a staircase in a dwelling in Wuhan in which she was living with her husband. The fall was found to have been causally related to the lack of a balustrade about which the appellant and her husband had complained. Living in the dwelling was an incident of the employment contract between OPC and the husband. The dwelling existed in an "Australian compound". It was supplied by China as one of a number of buildings serving participants in a managerial skills course provided by OPC for the Wuhan Iron and Steel University110. How the appellant fell, why her fall gave rise to recovery in tort and how various other claims brought by the appellant (and defences raised by the respondents) were resolved are matters adequately explained in the reasons of 105 GPCL, Art 146. 106 [2002] WASC 231 at [198], [208]. 107 McLure J (Johnson J and Wallwork AJ concurring). 108 [2002] WASC 231 at [191]. 109 (2004) 28 WAR 206 at 222 [73]. 110 [2002] WASC 231 at [13]-[14]. Kirby other members of this Court111. There was no dispute about these facts. I will not repeat any of this detail. The appellant did not commence her proceedings in the Supreme Court of Western Australia until 20 June 1997. She brought no proceedings in any court in China. Her statement of claim in the Supreme Court of Western Australia did not plead, as a fact, the content of the Chinese law applicable to the events out of which the claim arose. Nor did it plead, as a fact, the manner in which a Chinese court, or Chinese law, would determine the appellant's claim. Instead, as the appellant's counsel made clear at the beginning of the trial, the appellant intended to say as little as possible about the law of China. Counsel said "we're endeavouring to keep well away from the China law as we can [sic]"112. The primary judge expressed anxiety about this approach. In words that were to prove prescient, he said113: "Wouldn't that be an onus that would fall on you in any event? If the defendant satisfied me that the applicable law was the Chinese law so that I was then sitting as a Chinese judge, then wouldn't the onus be on you ... ?" So far as the statement of claim was concerned, on its face it appeared to assert (or assume) that the law applicable to the appellant's action ("lex causae") was the law of Western Australia ("lex fori"). In particular, the pleading assumed that the applicable limitation period was an Australian one, not the period that would have applied had the proceedings been brought in China114. Relevant legal developments: The assumption by the appellant's advisers that the law of the forum applied to the case can be understood more readily when it is remembered that (although the position was not entirely clear), in June 1997 when the proceedings were commenced, an Australian court would ordinarily have applied to such a case the principle stated in Phillips v Eyre115. 111 Reasons of Gleeson CJ at [2]; reasons of McHugh J at [22]-[23]; reasons of Gummow and Hayne JJ at [67]-[75]; reasons of Callinan J at [223]-[234]. 112 Transcript of the trial, Supreme Court of Western Australia, No 1686/97, 9 September 2002 at 126. See reasons of Gleeson CJ at [3]. 113 Transcript of the trial, Supreme Court of Western Australia, No 1686/97, 9 September 2002 at 126 per McKechnie J. 114 Specifically, no reference was made in the pleading to "special circumstances" in GPCL, Art 137 or to the facts said to constitute such "special circumstances", considerations that only emerged later. 115 (1870) LR 6 QB 1 at 28-29. See The "Halley" (1868) LR 2 PC 193. Kirby Subject to considerations of jurisdiction over the parties and questions as to inappropriate forum, the Australian court would have applied the "double actionability rule"116. In actions of tort this approach gave the predominant role to the law of the forum117. Preference for the law of the forum was not without its supporters, both in common law countries and in countries of the civil law118. However, after the commencement of the appellant's proceedings, and before the trial, two events of legal significance occurred. The first, pointing the way, was the decision of this Court in John Pfeiffer Pty Ltd v Rogerson119. That decision adopted, for intra-national torts outside federal jurisdiction, the law of the place of the wrong ("lex loci delicti") as the law governing all questions of substantive law. Secondly, in Regie Nationale des Usines Renault SA v Zhang120, this Court decided that the substantive law for the determination of rights and liabilities of parties in respect of international or foreign torts was also the law of the place of the wrong. The Court concluded that the "double actionability rule" expressed in Phillips v Eyre had no application in Australia to international torts. In Zhang, the joint reasons concluded that the "flexible exception" to the basic rule for the choice of law, as expressed in Chaplin v Boys121, should not be adopted by Australian law. I agreed in the foregoing restatements of Australian common law principle122. I was inclined to reserve the question of whether a "flexible exception" should be recognised by Australian law123. However, I did 116 Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491 at 506 [32], 117 Zhang (2002) 210 CLR 491 at 506-507 [32]-[33], 531 [113]. 118 Savigny, the founder of the modern legal doctrine applicable to multilateral claims, followed this approach: Savigny, System des heutigen roemischen Rechts, (1849) noted in John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 at 536 [74]. See also Zhang (2002) 210 CLR 491 at 531-532 [114]. 119 (2000) 203 CLR 503. 120 (2002) 210 CLR 491 at 520 [75], 539 [132]-[133]. 122 In Pfeiffer (2000) 203 CLR 503 at 562-563 [156]-[157]. In Zhang (2002) 210 CLR 123 (2002) 210 CLR 491 at 535 [122] referring to Breavington v Godleman (1988) 169 CLR 41 at 77, 147, 163. The rejection of flexible exceptions has been criticised: see Keyes, "The Doctrine of Renvoi in International Torts: Mercantile Mutual Insurance v Neilson", (2005) 13 Torts Law Journal 1 at 13-14. Kirby not press this preference to a dissent, given the recognition in the joint reasons that public policy considerations would sometimes make the enforcement of the law of the place of the wrong contrary to the public policy of the forum124. Application of logic and analogy: The foregoing developments do not solve the issues presented by this appeal. However, as the primary judge and the Full Court correctly concluded, no decision could be reached in the present case, consistent with Pfeiffer and more particularly Zhang, that applied the displaced law. Thus, it would not have been correct for the primary judge to decide the appellant's claim by simply applying the law of the forum (Western Australia). He could not ignore the fact that the tort had occurred in China. Consistently with Zhang, it was necessary for him to determine the substantive rights and liabilities of the parties by reference to the law of China. In deciding the consequential questions presented by the appellant's claim to the Supreme Court of Western Australia, the law was not expressly stated in the earlier authority. Yet, it was correct for the judges below to endeavour to find the answers to those questions by a process of analogical reasoning: seeking to derive from the ratio decidendi of Zhang any implications that helped resolve the new, different but related questions presented by these proceedings125. The Chinese law The Chinese legal system: Exhibited in the trial was an article by Kui-Hua Wang and Dr Danuta Mendelson, "An Overview of Liability and Compensation for Personal Injury in China under the General Principles of Civil Law"126. It provides a general description of the "long and difficult evolution over nearly 40 years" through which the Chinese law of civil obligations (tort) has moved. According to the authors, that body of law has shown a "remarkable blend of influences … a mixture of socialist objectives, capitalist pragmatism, and feudal doctrines combined with jurisprudential models taken from a range of western civil codes and, more recently, the common law"127. Traditionally, the Chinese legal system was based on notions of a cosmic order derived from the doctrines of Confucius128. In this order, there were no professional judges. Important cases were decided by local governors in a 124 (2002) 210 CLR 491 at 535 [123]. 125 See Blunden v Commonwealth (2003) 218 CLR 330 at 349 [59]. 126 (1996) 4 Torts Law Journal 137 (Exhibit 34). 127 (1996) 4 Torts Law Journal 137 at 137. 128 See (1996) 4 Torts Law Journal 137 at 137-139. Kirby system resembling the customary and baronial courts of medieval Europe. Following the 1840 Opium War, China was forced to open its ports to Western countries, resulting in the creation of enclaves ruled under systems of foreign law. The general legal system of China which then developed was influenced by the law of Japan, derived, in turn, from Germany and other civil law systems. After the victory of the Chinese Communist Party in 1949, the old legal order was abolished. Soviet socialist law was adopted as a model. This, in turn, was influenced by the civil law systems of Germany, France and Switzerland129. Thereafter, until recent times, there were still relatively few professional judges. As late as 1994, only 40,000 lawyers were admitted to practise in the whole of China. It was in the 1980s, with the shift towards an enterprise economy, that notions of tort law and other aspects of civil liability were introduced in China, effectively for the first time130. Central to the adoption of a new regime was the acceptance by the National People's Congress in 1986 of the General Principles of Civil Law ("GPCL") of China131. In accordance with the traditions of the continental European judiciary, judges in China had no overt or acknowledged role to develop and elaborate the written law, including the GPCL. Generally speaking, they were expected to observe the "absolute primacy of statute as a source of law"132. Remembering Napoleon's injunction to the judges of France, when the Code Civil des Français was promulgated in 1804, Chinese judges are expected to be "the voice of the statute" and nothing more133. This notwithstanding, because the GPCL is stated in very general terms, the Judicial Committee of the Supreme People's Court of the People's Republic of China, so as to make the GPCL "more precise and comprehensive"134, adopted an opinion ("the Opinion")135 that came into force on 26 January 1988. The 129 (1996) 4 Torts Law Journal 137 at 139. 130 (1996) 4 Torts Law Journal 137 at 142. 131 See reasons of Gummow and Hayne JJ at [71]-[75]. 132 (1996) 4 Torts Law Journal 137 at 138. 133 See (1996) 4 Torts Law Journal 137 at 138, referring to van Caenegem, An Historical Introduction to Private Law, (1992) at 130. 134 See (1996) 4 Torts Law Journal 137 at 147; cf [2002] WASC 231 at [146]. 135 Opinion (for Provisional Use) of the Supreme People's Court on Questions Concerning the Implementation of the General Principles of Civil Law of the (Footnote continues on next page) Kirby Opinion was subsequently distributed as a circular to the People's Courts of China at all levels and to every special court in the country. In effect, according to Ms Wang and Dr Mendelson, the Opinion "created a new supplementary law"136. In the course of the trial of the appellant's claim, expert evidence was given referring to, and translating parts of, the Opinion. Whilst the Opinion "goes some way towards refining the general principles of compensation for tortious conduct contained in the GPCL", the commentators state what is in any case obvious: "further regulatory legislation is needed in order to strike a balance between the theoretical principle of the civil law which prohibits judges from formulating legal rules, and the customary law which gives them unfettered discretion to decide the issue of compensation by reference to the defendant's ability to pay damages". The authors conclude that "both GPCL and the Opinion pay scant attention to legal standards that govern the level and amount of compensation". These defects result in a lack of uniformity of decision-making that may offend Western legal notions that "the law should conform to certain minimum standards of justice [and] that like should be treated alike"137. If the foregoing description of the Chinese legal system, taken from an article written by apparent experts, accepted in evidence and quoted by the primary judge, is even a partial portrait of the legal system in which the GPCL operates, it indicates the dangers of an Australian court applying the GPCL strictly according to its English language text, without informed assistance from expert evidence. In particular, it demonstrates the error of construing the GPCL as if it were an Australian statute. As the authors of the article stated in 1996, progress was being made in the development of a legal system in China. That progress included the GPCL and Opinion providing for compensation for injuries caused by the fault of others. However, "the jurisprudence of tortious liability in China is still at a very early stage of development"138. These features need to be remembered in approaching the evidentiary problems presented by the present appeal. Particular Chinese laws: The GPCL was the most important Chinese law referred to in these proceedings. It was treated by both parties as akin to legislation, although the Chinese approach to the construction of uncertain People's Republic of China. The Opinion, in the Chinese language, was Exhibit 31 in the proceedings. 136 (1996) 4 Torts Law Journal 137 at 147. 137 (1996) 4 Torts Law Journal 137 at 149. 138 (1996) 4 Torts Law Journal 137 at 172. Kirby provisions of the GPCL was never fully established. In addition to the GPCL, reference was made during the trial to the Chinese Code of Civil Procedure ("CCP"). An English language translation of that code was also exhibited in the proceedings139. By Art 2 of the CCP, its purpose is stated: "(2) The tasks of the [CCP] shall be to protect the right of parties to engage in legal action, ensure that the people's courts ascertain the facts, distinguish right from wrong, apply the law correctly, try civil cases promptly, determine civil rights and obligations, apply sanctions against civil offences, protect the legal rights and interests of parties concerned, educate citizens to voluntarily abide by the law, maintain social and economic order and ensure the smooth progress of socialist construction undertakings." Articles 4 and 5 of the CCP provide: "(4) All parties to civil action cases conducted within the territory of the People's Republic of China must abide by this Law. (5) A foreign national … or foreign enterprise or organisation initiating or responding to legal action in a people's court shall have the same litigation rights and obligations as a citizen, legal person or other organisation of the People's Republic of China. If a court of a foreign country imposes restrictions on the civil litigation rights of a citizen, enterprise or organisation of the People's Republic of China, the people's courts shall adopt the principle of reciprocity with regard to the civil litigation rights of a citizen, enterprise or organisation of that country." Other relevant provisions of the foregoing laws, and the structure of those laws, are set out in the reasons of other members of this Court140. Particularly important to the issues that need to be resolved are the terms of Art 106 GPCL (civil liability for fault); Arts 135-137 GPCL (limitation of actions) and Art 146 GPCL (choice of law). As these provisions are stated elsewhere, I shall not repeat them. 139 Stated to have been adopted 9 April 1991 by the Fourth Session of the Standing Committee of the Seventh National People's Congress. This was Exhibit 30 in the proceedings. 140 Reasons of Gleeson CJ at [6]-[7]; reasons of Gummow and Hayne JJ at [71]-[75]; reasons of Callinan J at [231]-[232]; reasons of Heydon J at [268]. Kirby Expert evidence on Chinese law: The appellant did not plead, or tender evidence of, Chinese law, or of how a Chinese court, applying Chinese law, would have resolved the appellant's claim in practice. In particular, she did not show how, if at all, a Chinese court would have applied the choice of law provisions of Art 146 GPCL. However, the respondents called expert evidence which, to some extent, addressed those questions. This was the evidence of Mr Liu is a graduate in law both of Shanghai University in China and Macquarie University in Australia. He is admitted to practise law in China. He has consulted, in China, with an Australian law firm. His evidence included a written witness statement, treated as an exhibit in the trial141, as well as oral evidence. Some of the latter is referred to, or extracted, in other reasons. The primary judge accepted Mr Liu as an honest and impartial witness whose evidence (with one notable exception) could be relied on142. The exception, to which I shall return, concerns the testimony that Mr Liu gave that limitation periods are "substantive" under Chinese law. According to such testimony, such limitation periods operate to extinguish the cause of action, as that concept is understood under Australian law143. The primary judge did not accept Mr Liu's evidence in this respect, although he did not explain why he felt entitled to give effect to the opposite conclusion144. The view is taken by other members of this Court145 that the limitation period issue does not arise, or may be passed by, if the relevant provisions of Chinese law, applicable to the proof of the appellant's claim in Western Australia, included Art 146 GPCL, specifically the entirety of that article. In my opinion, there are many difficulties in adopting that approach. I shall explain those difficulties in these reasons. Ultimately, those difficulties lead me to a different result. The issues The following issues arise for decision: 141 Exhibit G in the proceedings. 142 [2002] WASC 231 at [126]. 143 [2002] WASC 231 at [186]. 144 [2002] WASC 231 at [186]. 145 See eg reasons of Gleeson CJ at [4] and reasons of Gummow and Hayne JJ at Kirby The application of foreign law issue: Were the primary judge and the Full Court correct to conclude that the substantive law for the determination of the rights and liabilities of the parties, in respect of the appellant's action in tort in Western Australia, was the law of the place of the wrong (lex loci delicti)? If so, was it correct to decide that such place was Wuhan, China, requiring that the substantive rights and liabilities of the parties to the appellant's proceedings be determined by the Supreme Court of Western Australia in accordance with the law of China at that time? The Art 146/renvoi issue: Having regard to the answer to (1), what was the content of the applicable Chinese law? Did it permit, or require, consideration to be had of Art 146 GPCL? If so, did it require the application only of the first sentence of that article, treating the case effectively as one within the domestic jurisdiction of a Chinese court? Or did it require effect to be given as well to the second sentence of Art 146, in effect occasioning a renvoi (from the French "return" or "reference back") by the law of China to the law of Australia, as the law of the "own country" or "place of domicile" of the parties to the proceedings? If, by way of Art 146 GPCL, the law to be applied in deciding the substantive rights of the parties was that of the "country" Australia, how is such law itself to be ascertained? Is the Australian law that is picked up the law of the forum chosen by the moving party, namely Western Australia? Would the Chinese court take note of the fact that, following this Court's decision in Zhang, the law of the forum in Australia now itself applies, to the determination of foreign or international claims in tort, the law of the place of the wrong (in this case China itself)? Would Art 146 require an unending series of returns (circulus inextricabilis146) to apply? Or at some stage (and if so when) would the application of the Chinese choice of law rule, or of the specific provisions of Art 146, be treated as "spent"147, and if so with what consequences? The consideration of foreign law issue: In the light of the answers to the foregoing issues, if the substantive law for the determination of the rights and liabilities of the parties was that of China, did the primary judge err in deciding that this fact "gave him a right" to apply Chinese law in resolving 146 Barcelo v Electrolytic Zinc Co of Australasia Ltd (1932) 48 CLR 391 at 437. 147 See Casdagli v Casdagli [1918] P 89 at 111; approved [1919] AC 145 at 175, 199; cf reasons of Gummow and Hayne JJ at [133]; reasons of Callinan J at [259]. See also Morris, "The Law of the Domicil", (1937) 18 British Year Book of International Law 32 at 34. Kirby the case148? Did Art 146, or any other part of established Chinese law, give the primary judge that right, as he considered, in the application of Arts 135, 136 and 137 GPCL? Specifically, was the primary judge entitled to reject the evidence of the expert in Chinese law that (in accordance with the GPCL) the extinguishment of the cause of action, after the period of limitation of one year applicable to the case, was part of the substantive law of China149? Did the proved Chinese law give the primary judge the right himself to "extend[] under Chinese law" the period of limitation of actions, on the ground of "special circumstances" in the case150? If so, was it open to the primary judge, on the evidence, to conclude (as he did) that "special circumstances" had been established? The presumption of identity of laws issue: In the absence of pleading or proof (or adequate proof) of the content of the applicable substantive Chinese law and practice, is it open to this Court to repair any omissions at trial by relying on a presumption of Australian law, that the Chinese law in question is the same as the law of Australia would be in such a case? If that presumption is available, should this Court rely upon it, effectively for the first time in a final appeal, to repair the pleading and evidentiary deficits at trial? In default of evidence as to the applicable Chinese law (and adequate evidence as to the practice of a Chinese court), would it be a proper exercise of this Court's powers, in deciding the appeal, to invoke that presumption? The sufficiency of evidence issue: If the foregoing presumption is not available to cure the deficits in the proof of the applicable Chinese law (and the practice in a Chinese court disposing of a claim such as the appellant's as Art 146 GPCL provides) is there sufficient evidence in the testimony of the expert witness to sustain a conclusion by this Court as to the meaning of Art 146 GPCL and as to the manner in which that article would be applied in China to a proceeding between "nationals of the same country or domiciled in the same country"? In particular, is there sufficient evidence as to how Art 146 would be applied to nationals of the same country where that country is, like Australia, a federation, involving domicile or residence of parties in different subnational jurisdictions? And is there evidence, or sufficient evidence, to prove when and in what circumstances a Chinese court would apply such foreign law, in lieu of the law of China itself? Is there sufficient, or any, evidence to show how such 148 [2002] WASC 231 at [186]-[190]. 149 [2002] WASC 231 at [186]. 150 As provided in GPCL, Art 137. Kirby law "may also be applied" within Art 146, inferentially in addition to the Chinese law stated in the GPCL, including the law on the limitation of actions (Arts 135-137 GPCL) and the elaborated provisions on the recovery of medical expenses, loss of income from work, loss of earning capacity and other entitlements in accordance with Arts 143, 144, 146 and 147 of the Opinion, if that Opinion is applicable and relevant to such a case151? The choice of law: conclusion: Based on the correct interpretation of Chinese law, was the primary judge correct in concluding that Art 146 GPCL applied152? Or was the Full Court correct in concluding that Art 146 did not authorise circumvention of the limitation periods in Arts 135-137 GPCL? Alternatively, in the state of the evidence as to the meaning of Chinese law (specifically Art 146) and as to the manner in which such law would be applied by a Chinese court deciding proceedings like those brought by the appellant, should this Court dismiss the appellant's claim on the ground that an essential ingredient of that claim was not proved153? The limitation period: conclusion: Having regard to the resolution of the foregoing issues, did the Chinese limitation period of one year in Art 136(i) GPCL apply to the appellant's proceedings as the expert deposed and the Full Court concluded? If so, did Art 137 apply to those proceedings when commenced in the Supreme Court of Western Australia? If it did, was it open to that Court to find "special circumstances" and thereunder to extend the period of the time bar? Upon the evidence was the primary judge entitled to "order" such an extension? Did the circumstances relied on by the primary judge amount, in any case, to "special circumstances"? Was his conclusion sustained by sufficient, or any, evidence on Chinese law and practice tendered at the trial? Or was the Full Court correct in concluding that the limitation period in Art 136 imposed a strict time bar on the appellant's claim under Chinese law to 151 See GPCL, Art 119 and the Opinion noted in Wang and Mendelson, "An Overview of Liability and Compensation for Personal Injury in China under the General Principles of Civil Law", (1996) 4 Torts Law Journal 137 at 149-152; cf [2002] WASC 231 at [157]-[167]. 152 [2002] WASC 231 at [204]. 153 Namely what was the relevant "law" in the "law of the place of the wrong" (that is, the lex of lex loci delicti) as required by Zhang (2002) 210 CLR 491. Kirby which, in the absence of other evidence, the primary judge should have given effect154? The variety and complexity of the foregoing issues, in an otherwise ordinary damages claim, illustrate once again why the rules of private international law have attracted damning epithets155. In her reasons in the Full Court, McLure J156 added to these descriptions the criticism of renvoi expressed by Professors Davies, Ricketson and Lindell157. They said that renvoi "is a subject loved by academics, hated by students and ignored (when noticed) by practising lawyers (including judges). ... To make matters worse, renvoi hardly ever arises in practice". This Court does not have the luxury of ignoring the issue. It must answer it, addressing at least some of the complexities. However, the complexities should not be exaggerated. Although, in the end, in the application of the basic principles to the evidence proved, I come to a result different from the majority of this Court158, on the fundamental issues159 I am in agreement with the conclusions of my colleagues. On those questions there is unanimity. Chinese law determines the parties' substantive rights The first issue may be quickly disposed of. The primary judge found that the law to be applied to the appellant's proceeding (lex causae) was that of China160. This was notwithstanding the failure of the appellant to plead, or to attempt to prove, the content of that law. The respondents argued that the primary judge was bound to apply Chinese law. They tendered relevant parts of that law and called Mr Liu, as an 154 (2004) 28 WAR 206 at 222 [73]. 155 Zhang (2002) 210 CLR 491 at 522 [86] citing Dean Prosser, Professor Cheshire 156 (2004) 28 WAR 206 at 211 [25]. 157 Conflict of Laws: Commentary and Materials, (1997) at 379 [7.3.1]. 158 Gleeson CJ, Gummow and Hayne JJ, Callinan J and Heydon J. 159 Notably on the foregoing issues 1 and 2 and part of issue 3. I also agree with Gleeson CJ and McHugh J on issue 4 that the presumption does not help the appellant. See reasons of Gleeson CJ at [16]; reasons of McHugh J at [36]. 160 [2002] WASC 231 at [123]. See reasons of Callinan J at [230]. Kirby expert, to elaborate it161. In this, the approach of the appellant was perilous. It meant that the appellant was forced to rely on the evidence elicited in the respondents' case or upon the presumption of identity of law belatedly invoked. Following the decision of this Court in Zhang162, the approach of the respondents was correct. The primary judge and the Full Court were correct to so decide. Article 146 GPCL can apply in its entirety Disposition of the issue below: The primary judge concluded that Art 146, in its entirety, was applicable to the case and constituted part of the substantive law governing the rights and liabilities of the parties. He did so "because both parties are nationals of Australia"163. The primary judge did not perceive the case as one presenting a problem of renvoi, as such. In part, this may have been because of the way the issues were presented at trial. In part, it seems to have followed from the view the primary judge took that he was obliged to apply the whole of the GPCL. That included Art 146. He detected no reason to ignore its provisions. In effect, this was a consequence of his rejection of Mr Liu's opinion that limitation periods were classified as "substantive" under Chinese law and that they took priority in extinguishing the appellant's proceedings at the threshold164. The Full Court drew an inference from what it took to have been the essential reason behind this Court's re-expression of the law in Zhang. It held that the law of the place of the wrong (lex loci delicti), applicable to cases of foreign or international torts such as the present, demanded the identification of a clear, simple and readily ascertainable statement of the substantive law. It therefore excluded the "extraordinarily complex, unwieldy, phantasmagorical journey"165 inherent in the incorporation of choice of law rules, whether in Art 146 or otherwise, referring to the law of other jurisdictions to identify the law of the place of the wrong. This Court, in Zhang, did not specifically address issues of the kind that now arise in this appeal. The rejection in Zhang of a "flexible exception" to the rule established in that case, could be read as unsympathetic to the modification 161 Reasons of Gleeson CJ at [3]. 162 (2002) 210 CLR 491. 163 [2002] WASC 231 at [204]. 164 [2002] WASC 231 at [186]. 165 Tilbury, Davis and Opeskin, Conflict of Laws in Australia, (2002) at 1005 cited by McLure J: (2004) 28 WAR 206 at 216 [47]. Kirby of the application, by the forum, of the law of the place where the wrong occurred. This was the conclusion that the Full Court drew166. It inferred that this Court had "deliberately selected a rigid choice of law rule in tort to promote certainty and predictability". It was understandable reasoning. Application of all of the relevant law: However, on the bases explained in other reasons, I agree that the conclusion in Zhang does not, in this case, require the exclusion of Art 146 GPCL from the applicable law of China. That article was part of the substantive law of China. It was part of the body of law which (as the parties eventually agreed) governed the outcome of this issue in the case. Indeed, the first sentence of Art 146 is rather similar to the principle stated by this Court in Zhang. To exclude the second sentence, in the application of a unified foreign code, would be to introduce an artificial home-made distinction. It is one that cannot be sustained when the purposes of adopting the law of the place of the wrong are understood. It is true that those purposes included the attainment of a measure of certainty about the contents of the applicable law167. It is also true that the rule in Zhang was designed to reduce the risk that a party could obtain advantages for itself by choosing to bring proceedings in one jurisdiction rather than another (forum shopping168). So far as torts are concerned, the rule in Zhang has "sure foundations in human psychology"169. The ordinary expectation of most parties is that, in such cases, the law of the place of the wrong will govern their rights and duties. Such expectations are based on notions connected with the fact that the reach of law in such matters is normally territorial. The law must be even-handed in its operation. It must be just to defendants as well as plaintiffs. Whilst the law of torts has a compensatory purpose, it also has purposes of promoting the prevention of wrongs and the distribution of costs within the community concerned where wrongs occur170. This is a reason why a party should not normally be able to pick and choose the applicable law (and thus in many cases the outcome) according to the forum selected by that party for the commencement of proceedings. 166 (2004) 28 WAR 206 at 216 [48]. 167 Zhang (2002) 210 CLR 491 at 517 [66]; see also reasons of Gummow and Hayne JJ at [92]; reasons of Callinan J at [237]. 168 Reasons of Gummow and Hayne JJ at [89]; cf Zhang (2002) 210 CLR 491 at 533- 169 Carter, "Torts in English Private International Law", (1981) 52 British Year Book of International Law 9 at 16, noted in Zhang (2002) 210 CLR 491 at 537 [130]. 170 Zhang (2002) 210 CLR 491 at 538-539 [131]. Kirby If these considerations oblige reference by the court of the forum to the law of the place of the wrong, this suggests a reference to all of the law of that place that local courts would normally apply in deciding the proceedings, were such proceedings commenced there171. The application of a foreign choice of law rule in such a case might be different where that rule is unwritten, obscure, contestable, or otherwise difficult to ascertain. However, in the present case, given that the applicable rule is found in the self-same law upon which the liability of the respondents concededly depended, to apply one sentence of Art 146, but to ignore another, would be unacceptably arbitrary. How a Chinese court would act: I agree with Gummow and Hayne JJ172 that, in resolving this appeal, it is unnecessary to postulate a single theory of renvoi to govern all proceedings in Australian courts requiring reference to foreign substantive law. I also agree with Heydon J that essentially what is required in this case is an understanding of the meaning of Art 146 GPCL, not, as such, a comprehensive dissertation on a principle of renvoi, of universal or general application173. It follows that the ultimate question which the rule in Zhang presents is: How would the court of the place of the wrong decide the proceedings brought there in respect of that wrong? Where the forum is an Australian court, that is the question which Australian law must answer174. To provide an answer by referring to part only of the applicable foreign substantive law would frustrate the fulfilment of the purpose for which the rule in Zhang was devised175. The Full Court therefore erred in concluding that Art 146, in so far as it contained a choice of law rule akin to renvoi, had to be ignored in this case176. 171 The Australian Law Reform Commission in its report Choice of Law, Report No 58, (1992) at 30 [4.11-4.12] recommended legislation for a general choice of law rule that did not include the law relating to choice of law. The recommendations of the Commission have not yet been implemented. 172 Reasons of Gummow and Hayne JJ at [99]. 173 Reasons of Heydon J at [277]. In judicial practice renvoi is said to be rarely used in China and People's Courts "tend to ignore it": see Kong and Minfei, "The Chinese Practice of Private International Law", (2002) 3 Melbourne Journal of International Law 414 at 425. 174 In accordance with Zhang (2002) 210 CLR 491. 175 cf reasons of Gummow and Hayne JJ at [108]. 176 (2004) 28 WAR 206 at 216 [48]. Kirby This error was important for the steps in the reasoning which the Full Court then took concerning the application of the time bar otherwise applicable under the GPCL in respect of a "demand for compensation for bodily harm" in China177. It follows that the judgment of the Full Court cannot stand. Prima facie, it must be set aside. Is it possible for this Court simply to restore the judgment entered in favour of the appellant by the primary judge? Or is the reasoning that sustains the judgment at first instance itself flawed in other respects and, if so, with what consequences for the disposition of this appeal? Ascertainment of the operation of Chinese law Erroneous rejection of the expert: Unfortunately the primary judge's reasoning was also flawed. I say this with respect to him because he decided a great many difficult issues. He dealt with most of them accurately and convincingly. Indeed, most of his findings are, at this stage, unchallenged. However, there are two errors. The first error lay in the primary judge's treatment of the evidence of the only expert on Chinese law called in the case, Mr Liu. This is a part of the reasoning at trial that was closely examined by the Full Court. The Full Court's criticism of the primary judge's treatment of the expert's evidence about the Chinese limitation bar is compelling. It reveals an error which, if it remains relevant, is fatal to the conclusion of the primary judge on this issue. It is convenient to deal with it now. In his witness statement, Mr Liu gave evidence of his awareness "of the distinction in Australian law between limitation periods that extinguish a cause of action and those which prevented a remedy from being sought"178. According to Mr Liu, the limitation period expressed in Art 136 GPCL "acts to extinguish a cause of action, as that notion is understood in Australian law"179. He explained this conclusion by reference to the fact that the GPCL deals with substantive rights. Procedural matters are addressed by another code, namely the CCP. If the "limitation period merely prevented a remedy, it would be dealt with in the [CCP]"180. 177 GPCL, Art 136(i): see (2004) 28 WAR 206 at 217 [55]. 178 Witness Statement of Hongliang Liu (Exhibit G), par 29. This distinction is explained in John Pfeiffer (2000) 203 CLR 503 at 543-544 [98]-[100], 553-554 179 Witness Statement of Hongliang Liu (Exhibit G), par 30. 180 Witness Statement of Hongliang Liu (Exhibit G), par 31. Kirby This was the only part of Mr Liu's evidence about Chinese law that the primary judge did not accept181. He referred to the facility, envisaged by Art 137 GPCL, of an extension of the limitation period and Mr Liu's evidence that such an extension was a "possibility". However, quoting the Opinion, Mr Liu insisted that this "possibility" was confined to circumstances that had prevented the bringing of proceedings to the Chinese court, such as "objective barriers during the legal time limitation period"182. Mr Liu elaborated what was meant by this expression, stating "only, for example, if there's some war which stopped a person, for example, [commencing the proceedings]". He said that application of Art 137 was "very difficult and they are very rare cases". Pressed on this, he was asked whether his researches had discovered any cases where Art 137 had been applied to extend time. He said "No, actually not". Notwithstanding this seemingly clear and unqualified evidence, from an expert witness accepted as honest and neutral, the primary judge rejected what he said in this respect. For a number of reasons, similar to those explained by the Full Court183, it is my view that the primary judge erred in rejecting Mr Liu's evidence on the interpretation of Art 137 GPCL. That evidence was uncontradicted and uncomplicated184. It took into account considerations of "fairness and justice" to both parties, and not just to the appellant185. As Callinan J points out186, the primary judge's view as to what constituted prejudice was rather one-sided. It did not give any apparent weight to the prejudice to the respondents of depriving them of a time limitation available to them as part of substantive law in China. Doing so subjected them, in respect of a claim that originated in a foreign 181 [2002] WASC 231 at [186]. 182 Opinion, Art 169, quoted by Mr Liu, transcript of the trial, Supreme Court of Western Australia, No 1686/97, 11 September 2002 at 268. See reasons of 183 (2004) 28 WAR 206 at 218-220 [57]-[65]. 184 (2004) 28 WAR 206 at 220 [63]. Commentaries on Chinese law, published in Australia, confirm that "time limitations ... are characterised as substantive issues": see eg Kong and Minfei, "The Chinese Practice of Private International Law", (2002) 3 Melbourne Journal of International Law 414 at 424, fn 43 referring to Opinion, Art 195. These commentaries confirm the evidence of Mr Liu and help render the rejection of that evidence at trial the more puzzling and unacceptable. 185 (2004) 28 WAR 206 at 220 [63]. 186 Reasons of Callinan J at [231]. Kirby country, to proceedings in Western Australia five years after the descent of the Chinese time bar extinguishing the claim. There was nothing inherently unlikely in the evidence of Mr Liu on this point. English law (and that of Australia) has only recently moved away from the application of inflexible rules in matters of time limitations, as well as other areas of substantive and procedural law187. It should occasion no surprise that the Chinese legal system, at this stage of its development, contains inflexible rules on such a subject, rarely if ever departed from188. Under Australian law, courts are not deemed to know the law of foreign nations189. That is why the content of such law presents questions of fact, ordinarily to be pleaded by the party relying upon it and, unless agreed, proved by expert evidence. It is true that the court receiving such evidence is not bound to accept it, including where it is uncontradicted. However, as Diplock LJ observed in Sharif v Azad190, a court should be reluctant to reject such evidence unless it is patently absurd or inconsistent191. It will be rare indeed that an Australian trial judge, required to make findings about the content of foreign law, will prefer his or her own conclusions as to the state of that law to expert testimony of a competent witness with proved training and qualifications. Applying these principles to the present case, I come to the same conclusion as the Full Court did on this issue. There was nothing patently absurd or inconsistent in the evidence of Mr Liu on the meaning and operation of Arts 135, 136 and 137 GPCL. The evidence was clear and apparently applicable. 187 Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 at 167-172. See, eg, Weldon v Neal (1887) 19 QBD 394 and Horton v Jones (No 2) (1939) 39 SR (NSW) 305 at 315. 188 Similar strict rules of time limitations commonly appear in the law of other countries and in international treaties. See, eg, Art 29 of the Warsaw Convention on Civil Aviation: Milor Srl v British Airways Plc [1996] QB 702 at 707; Kahn v Trans World Airlines Inc 443 NYS 2d 79 at 87 (1981); Agtrack (NT) Pty Ltd (t/as Spring Air) v Hatfield (2005) 218 ALR 677 at 687 [45]-[47]. 189 cf reasons of Gummow and Hayne JJ at [115]. 190 [1967] 1 QB 605 at 616. 191 James Hardie & Co Pty Ltd v Hall (1998) 43 NSWLR 554 at 573 per Sheller JA, citing A/S Tallinna Laevauhisus v Estonian State Steamship Line (1946) 80 Ll L Rep 99 at 108. Kirby The trial judge erred in rejecting Mr Liu's interpretation and in substituting his own192. This is an important conclusion for the purposes of the Australian law binding on the primary judge. That law obliged him to decide the appellant's claim against the respondents by applying the substantive law of China for the determination of rights and liabilities in respect of her claim193. The substantive law on time limitations was part of that law. Such law was to be ascertained, not by reference to the (often artificial) classifications of Australian law as to what law is substantive or procedural. It was to be decided by reference to what the law of China treated as "substantive". Subject to the arguments on Art 146 which follow, I would reach the same conclusion on this point as expressed by McLure J for the Full Court. Necessarily, that conclusion would be fatal to the appellant's claim because, according to Chinese law, the appellant's claim was time-barred. The primary judge's conclusion to the contrary would have to be set aside. The Full Court's conclusion would have to be affirmed, upon this basis. Erroneous assertion of discretion: For the moment, however, I will assume that, for technical reasons of pleading194, the foregoing errors in the rejection by the primary judge of the evidence of Mr Liu are not available to the respondents in this Court. Even so, error being shown in the reasoning of the Full Court, the judgment of the primary judge cannot simply be restored. There is a separate error in that reasoning. As to that error, this Court speaks with one voice. The primary judge, whilst acknowledging his function as a "Western Australian Judge" and "not a People's Court"195, on two occasions, critical to his conclusions, asserted that he was entitled, out of his own powers, to apply Chinese law as stated in the GPCL. He did this in concluding that "the limitation period should be extended under Chinese law [as provided for in Art 137 GPCL]"196. He took the same course in asserting his entitlement "to apply 192 (2004) 28 WAR 206 at 220 [64]-[65]. 193 In accordance with Zhang (2002) 210 CLR 491. 194 For example because the respondents did not file a notice of contention in this Court seeking to sustain the Full Court's judgment upon the correctness of its conclusion on the evidence of Mr Liu concerning the time bar. 195 [2002] WASC 231 at [190]. 196 [2002] WASC 231 at [191]. Kirby Article 146"197. He stated that that article "gives me a right to choose to apply the law of Australia because both parties are nationals of Australia"198. This was a misunderstanding of what the primary judge was required, and entitled, by Australian law to do199. Under Zhang, the duty of the primary judge in the forum was not (and could never properly be) to step into the shoes of a foreign judge, exercising that judge's powers as if sitting in the foreign court. Instead, it was to ascertain, according to the evidence or other available sources, how the foreign court itself would have resolved the substantive rights of the parties in an hypothetical trial conducted before it. The error of the primary judge in the approach that he took is accepted in the reasons of the majority of this Court200. I agree with that conclusion. This means that the approach of the primary judge to the application of Arts 137 and 146 GPCL cannot stand. For reasons explained, the Full Court concluded that Art 146, in its second sentence, did not apply and that Art 137 did, in accordance with the evidence of Mr Liu. Because this Court has accepted that Art 146 applies in its entirety, it remains to follow the logic of that conclusion to its correct outcome. The presumption of identity of law is a fiction Bridging the gulf by evidence: In disposing of this appeal, how should this Court resolve the application of Art 146 and (if it be necessary) Arts 135, 136 and 137 GPCL that miscarried at trial? If this Court does not remit such a question, to be determined by another court in accordance with principles of law identified by it201, it is empowered to decide the question for itself, entering the 197 [2002] WASC 231 at [204]. 198 [2002] WASC 231 at [204]. 199 See reasons of Gummow and Hayne JJ at [113]. Arriving at a uniform result in a case irrespective of the chosen forum is the object that Savigny said was "the chief purpose of private international law": Rabel, The Conflict of Laws: A Comparative Study, 2nd ed (1958), vol 1 at 94. It has caused judges in many countries to accept the need to disregard the "fortuitous circumstances which often determine the forum": Lauritzen v Larsen 345 US 571 at 591 (1953) per Jackson J. 200 Reasons of Gleeson CJ at [13]; reasons of Gummow and Hayne JJ at [113]; reasons of Callinan J at [244]; reasons of Heydon J at [275]. 201 Judiciary Act 1903 (Cth), s 37. Kirby judgment that should have been entered below202. If this Court adopts the latter course, it must reach its own conclusions upon the evidence in, and inferences available from, the record, unembroidered by any additional evidence203. In their submissions, the respondents concentrated on the doctrine of renvoi about which "[t]he literature … is immense"204. However, the appeal cannot be resolved at such a level of generality. This Court must reach a lawful outcome and make dispositive orders. In doing so, it cannot ignore the issues that arise because of demonstrated errors in the courts below. The parties, by their arguments, cannot impose on this Court, in discharging its constitutional function of deciding appeals, an obligation to decide an appeal otherwise than in accordance with law205. The starting point for analysis is a determination, once the whole of Art 146 GPCL is available, of whether, in accordance with that article, a Chinese court, deciding a case between the present parties commenced at the same time, would have done so by the application of Australian law and, if so, with what consequences. Would the Chinese court have: Ignored the complication of federation, in a country such as Australia, and treated the parties relevantly as "nationals of the same country" or "domiciled in the same country"? Resolved the content of the "law of their own country" in Art 146 GPCL in favour of Western Australia, treating it as a "country" when, in this case, the "country" was Australia but the appellant was domiciled in Western Australia and OPC was registered in Victoria and MMI in yet another State of Australia? "Also" applied the law of such "country", in addition to that of China and at the same time? When, and in accordance with what principles, would it have done this, given the general provisions of Art 106 GPCL imposing civil liability on a person who harms another person in China, without apparent differentiation as to foreign nationality or domicile (and having regard also to the terms of Arts 4 and 5 of the CCP206)? 202 Judiciary Act 1903 (Cth), s 37. 203 Mickelberg v The Queen (1989) 167 CLR 259; Eastman v The Queen (2000) 203 CLR 1. 204 Dicey and Morris, The Conflict of Laws, 13th ed (2000), vol 1 at 65 fn 1. 205 cf Roberts v Bass (2002) 212 CLR 1 at 54 [143]. 206 These articles are set out earlier in these reasons at [157]-[158]. Kirby Exercised the apparent discretion stated in Art 146 ("the law of their own country ... may also be applied")? When, if ever, would this actually happen in China, upon the assumption of the commencement of the appellant's proceedings in a Chinese court? None of the foregoing questions are matters in which this Court can provide answers from its own knowledge. To do so would involve this Court in making the same error as the primary judge, namely, assuming that it enjoys powers conferred by Chinese law upon Chinese courts. Our inquiry is about the state of curial facts for the exercise of the Australian judicial power. It is not one that seeks to derive judicial power from a foreign source. This is why the presentation of evidence to prove the content and practice of Chinese law was vital in this case for the fulfilment of the requirements of Zhang. It explains why a deficit in the proof of the content of such law, and in the practice of its application, will sometimes be critical (even fatal) to the fulfilment of the premise of establishing what the foreign court would do. It is that search alone that fulfils the purpose of Zhang and deprives the party initiating the proceedings of the power to select a forum in a tort action in a place most advantageous to that party. The foregoing analysis also explains why it is not possible, in this case, for this Court to guess, or presume for itself, the answers to the questions presented by applying to the Chinese law (principally the GPCL) rules of construction that accord with the way that we would construe an Australian statute207. Quite apart from the nuances and difficulties that exist because of the need to translate the Chinese law into the English language, it would be an absurd fiction to pretend that the elaborate principles of statutory construction developed by, or applicable to, Australian courts have exact equivalents in the courts of China, given the divergent historical and jurisprudential traditions of the two legal systems. If, then, the purpose of ascertaining, and applying, the law of the place of the wrong (lex loci delicti) is to ensure consistency of outcomes, to deny advantages of forum shopping and to fulfil ordinary human expectations, the only way this can be done, in a case such as the present, is according to evidence. Arguably, it might be different where the law of the foreign country is written in the English language; where it is simple, clear or agreed; where there is a shared tradition of legal history; where there are common principles of interpretation of written law; and where judge-made law is accepted and its content proved. But 207 cf reasons of Callinan J at [250]; reasons of Heydon J at [267], [275]; cf Ruhani v Director of Police [No 2] [2005] HCA 43 at [80]. Kirby that is not this case. Here, the languages, traditions, institutions and history of China are quite different from Australia's. If the decision in these proceedings is to be based on evidence, there is a commensurate need for expert testimony to bridge the gulf that exists between the substantive law known to an Australian court and the law that would be observed in China, were the proceedings brought there. The presumption of identical law: The unsatisfactory nature of the evidence available in the record concerning the manner in which a Chinese court would approach Art 146 GPCL is effectively acknowledged in other reasons208. Indeed, it is self-evident. It probably originates in an erroneous assumption on the part of the appellant's advisers (evident in the pleadings) that it was sufficient for the appellant to rely on the substantive law of the Western Australian forum. Callinan J has identified, in my view accurately, the silences in the evidence concerning the way Art 146 GPCL would be applied to the present parties by a Chinese court. His Honour correctly describes the expert evidence of Mr Liu concerning Art 146 as ultimately inconclusive209. This appears to be so because Mr Liu's eventual opinion was that Art 146 was irrelevant to a claim such as the appellant's210. His agreement to the proposition that principles of "fairness and justice" could allow a Chinese court, hearing such a claim, to decide it according to Australian law was distinctly hesitant211. The most that Mr Liu would say was "That's a possibility". But it was a "possibility" put in his mouth by the cross-examiner. Mr Liu's written witness statement and other oral testimony made no reference to Art 146 GPCL at all. The article appears to have been introduced in the case by the application of Australian legal ingenuity rather than by Chinese legal experience as to the meaning of the article and how it is actually applied by Chinese courts. The foregoing difficulties, presented by the record, for the ascertainment of the law and practice of China governing Art 146 GPCL, have caused a majority of this Court212 to invoke a supposed presumption of the common law of evidence. This is to the effect that, in a case where the content of foreign law is significant for the resolution of the issues, and such law is not proved at all or 208 See eg reasons of McHugh J at [35]; reasons of Gummow and Hayne JJ at [117]. 209 Reasons of Callinan J at [244]. 210 cf reasons of Gleeson CJ at [10]. 211 Reasons of Gleeson CJ at [10]. 212 Reasons of Gummow and Hayne JJ at [125]; reasons of Callinan J at [249]; reasons of Heydon J at [275]. Kirby adequately, an Australian court may presume that such law is the same as Australian law. It may decide the case accordingly. Like Gleeson CJ and McHugh J, I derive no assistance from this supposed presumption, at least in a case such as the present213. In this case, it involves an unrealistic fiction which has only to be stated for its flaw to be revealed. A presumption that a basic rule of the substantive law of England or some other common law country, in default of proof, is the same as the law of Australia is one that might be justified in a particular case. However, the notion that the law of a country so different, with a legal system so distinct, as China is the same as that of Australia, is completely unconvincing214. As Richard Fentiman explains215: "[T]he argument for relying upon such an unlikely fiction has always been insecure. To speak of such a presumption at all, rather than admitting that English law applies as the lex causae where no other is proved, may rest on a conceptual mistake. And the inappropriateness of deeming English and foreign law to be the same in all situations has long been recognized. Certainly there are cases in which the courts have declined to do so where this would strain credibility. … It is unclear therefore that it is ever appropriate to speak of a presumption of similarity between English and foreign law. And even if we do so it is apparent that it has never been treated by the courts as a universal rule. … One danger in applying the presumption … is that the mandatory introduction of foreign law might thus be subverted. A party who is required to introduce foreign law by a mandatory choice of law rule may attempt to employ the presumption to defeat that rule's obligatory character. Another risk is that a plaintiff who relies upon foreign law even when no such duty exists might oppress a defendant by requiring the latter to disprove the presumption. Certainly, there is something potentially unfair not to say irrational, about requiring one party to disprove what the other has not sought to prove." With all respect to the majority view, I regard it as straining even credulity to impose on an Australian court the fiction of presuming that the law of China 213 Reasons of Gleeson CJ at [16]; reasons of McHugh J at [36]. 214 Guepratte v Young (1851) 4 De G & Sm 217 at 224 [64 ER 804 at 808]. See also Damberg v Damberg (2001) 52 NSWLR 492 at 508 [129] per Heydon JA. 215 Fentiman, Foreign Law in English Courts: Pleading, Proof and Choice of Law, (1998) at 146-148 (footnote omitted). See also Dicey and Morris, The Conflict of Laws, 13th ed (2000), vol 1 at 232 [9-025]. Kirby (the place of the wrong), which is an essential element in this case, is the same as the law in Australia. Or that a written law of China would be interpreted and applied by a Chinese court in the same way as an Australian judge would do in construing a similar text. Facilitating proof of foreign law: It is true that the expansion of the Internet has made written laws available, especially in the English language, to an extent that was earlier unthinkable216. It is also true that the growth in the international movement of people, goods and capital has greatly expanded the potential applicability of foreign law in municipal decision-making. It is true that securing expert evidence (such as that of Mr Liu) will often be prohibitively expensive. I accept that means should be found by courts and our law to receive evidence about foreign law in a way that is economic, efficient and manageable217. However, in Australia, the foregoing needs must be met in a constitutional system of courts that are impartial as between the parties and that rely on evidence, not guesswork, speculation and inherently unlikely fictions. Where a party, bringing a claim in an Australian court in respect of a wrong that has occurred in a foreign country, fails to establish adequately the substantive law that would have been applicable to that claim in that country, the solution which our judicature offers is that the party has failed to prove its case. Pretending that the content of the applicable substantive law and, equally important, the practice by which that law is applied by courts in the place of the wrong is the same as it would be in Australia, involves an unconvincing exercise. Effectively, it shifts the burden of proving the foreign law to the defendant, who may (as here) contest its content. This course is similar to the fiction earlier adopted in English law that a foreign tort was to be treated as having occurred in England218. Our law has abandoned that fiction. We should not adopt another that is equally incredible. Least of all should we do so given the purposes in Zhang of requiring the plaintiff, who invokes the jurisdiction of the courts of the forum, to establish 216 Yezerski, "Renvoi rejected? The Meaning of 'the lex loci delicti' after Zhang", (2004) 26 Sydney Law Review 273 at 291. See also Keyes, "The Doctrine of Renvoi in International Torts: Mercantile Mutual Insurance v Neilson", (2005) 13 Torts Law Journal 1 at 12. 217 The receipt into evidence, and use, of the descriptive article on the Chinese law of torts by Wang and Mendelson, "An Overview of Liability and Compensation for Personal Injury in China under the General Principles of Civil Law", (1996) 4 Torts Law Journal 137, is an indication of what may be done. 218 The "Halley" (1868) LR 2 PC 193 at 203. See Zhang (2002) 210 CLR 491 at 531 Kirby the acceptability and justice of having done so by submitting to the outcome as to the substantive law that would have applied, had the action been tried in the place of the wrong according to the law and practice of that place219. If there is doubt or disagreement about the content of that law, the plaintiff must prove what the law is. I therefore agree with Gleeson CJ and McHugh J that, in this case, the presumption invoked by the majority in this Court is unhelpful. However, I cannot agree with Gleeson CJ that there was "just enough" evidence given by Mr Liu to sustain the conclusion as to what Art 146 GPCL meant and how it would have been applied if the appellant's proceedings had been brought in China220. The most that Mr Liu said in cross-examination was that it was "possible" that a Chinese court might have applied Australian law to such a claim between Australians. Possibilities are insufficient to fill the gap in the evidence. The appellant did not prove this aspect of her case. Indeed, she did not even try to do so. Conclusion: presumption rejected: The presumption relied on by the majority in this Court to repair the defects in the appellant's case should be rejected as unavailable. This leaves the appellant's case silent on the way in which Art 146 would be applied in China. This Court does not have the knowledge to fill that gap. Any attempt on its part to do so would be sheer guesswork. We do not advance the orderly development of private international law by encouraging the defective presentation of cases and by adopting incredible fictions to cure such defects. The correct application of the foreign law Application of Art 146 GPCL: Once this Court has found error and proceeds, for itself, to decide the matter, it is essential that it do so accurately. In the present case, this means by correctly applying the evidence about the foreign law contained in the record. Because there is no suggestion, in the primary judge's findings, of defects of credibility of the expert witness, no complication of that kind intrudes221. The proceedings can therefore be resolved on the transcript of Mr Liu's evidence. 219 cf Briggs, "In Praise and Defence of Renvoi", (1998) 47 International and Comparative Law Quarterly 877 at 881. 220 Reasons of Gleeson CJ at [17]. 221 Fox v Percy (2003) 214 CLR 118 at 127 [26]. Kirby It is true that, on its face, the English language translation of Art 146 GPCL suggests the possibility that a Chinese court might apply to proceedings like those of the appellant the substantive law derived from Australia. One can invent reasons of convenience for its doing so: to encourage tourism and investment and to avoid the possible injustice of applying to disputes between foreigners a disparate legal system with low entitlements to recovery222. However, in a published comment knowledgeable authors state223: "While private international law in China is becoming increasingly important, the sporadically released jurisprudence shows that the Chinese practice leaves much to be desired." It is not true to say that "no Chinese interests are involved" and "no reason of policy" exists for a Chinese court to decline the determination of such a case according to the law of Western Australia224. To the contrary, there are many such interests and policies at stake. They include (1) the self-respect of a newly emergent polity, building its own legal system which, according to the GPCL, ordinarily applies its own law to the disputes that foreigners have in China225; (2) the lack of expertise of the Chinese court on foreign law; (3) the need in China (as much as Australia) to prove a foreign law where it is to be applied, and the practical availability and cost of that expertise; (4) the differing legal and cultural attitudes to strict time limitations and to the extinguishment of time- barred proceedings; (5) the avoidance of manifest dis-uniformity of outcomes in proceedings decided by the same municipal court; (6) the criticism, inherent in the appellant's claim, of the Chinese builders and providers of the allegedly 222 "In China … compensation for non-material injury has not been encouraged": see Wang and Mendelson, "An Overview of Liability and Compensation for Personal Injury in China under the General Principles of Civil Law", (1996) 4 Torts Law Journal 137 at 140. See also GPCL, Art 119. 223 Kong and Minfei, "The Chinese Practice of Private International Law", (2002) 3 Melbourne Journal of International Law 414 at 435. 224 Reasons of Gleeson CJ at [17]. 225 A tendency of Chinese courts appears to be to apply Chinese law to a tort occurring in China even though there is a disparity of applicable laws: see Kong and Minfei, "The Chinese Practice of Private International Law", (2002) 3 Melbourne Journal of International Law 414 at 430, referring to Hong Kong Meridian Success International Ltd v Aslan Transmarin Shipping Trading & Industry Co Ltd (Guangzhou Maritime Court (1994)). Kirby defective dwelling; and (7) the risk of joinder of those State agencies in the proceedings, if the proceedings were brought in China226. These considerations, and doubtless other practical features, might present strong public interest and other reasons for the court doing what is normal in Chinese courts, namely applying Chinese law227. After China's recent history of foreign occupation and subjection to foreign law, it is dangerous to leap to assumptions about the way Art 146 GPCL would be applied by a Chinese court. That question was one for evidence. Especially so because, even in the English language version, the second sentence of Art 146 is ambiguous. At the most, it affords a discretion to the Chinese court. There is no evidence whatever as to how Art 146 is interpreted or applied in practice in China. All that exists is an interpretation by judges of this Court of the English language translation of GPCL, understood according to Australian principles of interpretation or relying on a presumption that the application of the law would be the same as in Australia. By way of contrast, the accepted Chinese legal expert regarded Art 146 as immaterial. The highest that he would go in evidence was to concede that the application of foreign law was a "possibility". Such "possibility" was never elaborated by questioning. It is therefore guesswork for this Court to perform that elaboration where the appellant failed to provide relevant evidence or otherwise to perform that task. Applying Art 146 GPCL in the correct way, I am left completely uncertain as to whether, and if so on what terms, a Chinese court would apply Australian law (of which State is undiscoverable) in proceedings brought for the appellant in China. A "possibility" is not enough. The burden was on the appellant, if she could, to elicit more than this. The result is that the ingredient of the law (lex) in the law of the place of the wrong (lex loci delicti), required by Zhang, was not established. The appellant, by use of possibilities and presumptions, should not be allowed to turn the requirement of Zhang on its head. Otherwise, this Court permits a litigant, in effect, to choose the forum and there to impute an identity of law in the foreign country despite the large numbers of such countries and jurisdictions and the enormous variations in the contents of their laws to which Heydon J refers228. 226 Joinder appears to be available: GPCL, Art 122 and Opinion, Art 153(2); cf Wang and Mendelson, "An Overview of Liability and Compensation for Personal Injury in China under the General Principles of Civil Law", (1996) 4 Torts Law Journal 227 cf GPCL, Art 150. 228 Reasons of Heydon J at [283]. Kirby Application of Arts 135-137 GPCL: Once the applicability of Art 146 GPCL is rejected as unproved, this Court should return to the affirmative evidence of the expert. This was that Art 136, imposing a strict one year time limit, was applicable to the appellant's claim and was treated in China as part of its substantive law. The rejection of that expert evidence was arbitrary and unsustained. This Court, in disposing of this appeal, should not make the same mistake. The appellant urged the adoption of the whole of Art 146 GPCL on the stated basis that this was the substantive law that would be applied if the matter were adjudicated in a court exercising the judicial power of the country in which the wrong occurred. Yet, according to the evidence, so would be the limitation provisions of Art 136. Differentiation between the articles is unprincipled. Even assuming that this Court may, without evidence as to the law and practice of China (and contrary to the testimony of Mr Liu), construe the GPCL as it would an Australian statute, it is not difficult to reconcile Arts 135-137 and Art 146. They appear together in the same law (the GPCL). Indeed, they are almost adjoining provisions. The special choice of law provisions for foreigners in the GPCL are not disjoined from the other provisions of the GPCL. On the face of things, they have to be applied together. If (as Mr Liu deposed) a time- barred action under Art 136 is extinguished as a matter of substantive law, such a claim could not thereafter enliven the special choice of law provisions in Ch VIII of the GPCL. Put simply, according to Chinese law, that claim was It is not so long ago that an identical approach to statutes of limitations was taken in our own law230. In accordance with the evidence of Chinese law, it should now be given effect. No other approach conforms with the obligation stated in Zhang, that the substantive law of the place of the wrong applies to such a case. Here that is the law of China. Conclusions and orders The result is that, although for reasons different from those given, the Full Court reached the correct conclusion. The invocation of Art 146 GPCL fails as unproved by the evidence. Its suggested revival by a presumption of the identity 229 cf Timeny v British Airways plc (1991) 56 SASR 287 at 301 per Bollen J treating the claim as "extinguished, dead and gone forever". 230 Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 553 per Kirby of Chinese and Australian law should be rejected as an unconvincing fiction231. Article 136 would have applied to the appellant's proceedings had she brought them in China, the place of the wrong. According to the evidence, the provisions in Art 137 for relief from the time bar do not apply to such a case. The judges below erred in their reasoning on these points. This Court should determine the appeal and not remit the outstanding issues232. Doing so, in accordance with Zhang, it should apply the law of China, as the place of the wrong. By that law the appellant's claim was time-barred. She could not improve her position, five years out of time, by bringing her proceedings in an Australian court. Least of all could she do so by invoking the jurisdiction of the Western Australian court and ignoring the necessity to prove the substantive law of the place of the wrong, namely China. The appeal should be dismissed with costs. 231 cf Calverley v Green (1984) 155 CLR 242 at 264 per Murphy J. Neither at trial nor in the Full Court was mention made of the supposed presumption of identity between Australian and Chinese law. Yet it is that presumption that is now critical for the conclusion of the majority in favour of the appellant. Only in this Court does the presumption appear as deus ex machina. 232 Judiciary Act 1903 (Cth), s 37. Callinan Issue This is the third appeal233 in recent times in which the Court has been called upon to resolve problems which arise when plaintiffs bring proceedings in jurisdictions different from those in which they claim to have been wronged. The particular problem here lies in the selection of the law to be applied to the appellant's claim. Facts On 6 October 1991, the appellant was injured when she fell from a landing at the top of a flight of stairs in an apartment in which she was living with her husband, in Wuhan, a city in the province of Hubei in the People's Republic of China ("China"). At the time, her husband was employed by the first respondent, a company owned by the State of Victoria and having its registered office and principal place of business there. The first respondent's presence in China should be explained. On 16 May 1989, the Commonwealth entered into a joint venture with the Chinese Government, by which it agreed to provide experts to conduct training courses at the China-Australia Iron and Steel Industry Training Centre ("the Training Centre") located at the Wuhan Iron and Steel University. The Chinese Government agreed to provide Australians who were undertaking the training with accommodation in Wuhan. After the arrangements were made, the first respondent entered into an agreement with the Commonwealth to be the supplier on its behalf of the contractual services. The appellant's husband was employed on a temporary contract as a consultant to prepare and teach a course on organisational behaviour at the Training Centre. He and the appellant resided in Wuhan with their family, in accordance with the husband's contract of employment with the first respondent. The accommodation in Wuhan was maintained by Chinese officials. Before leaving for China with her husband, the appellant also accepted an offer of employment with the first respondent on a part-time basis as a personal assistant to the Australian Director of the Training Centre. The terms of her employment, including her remuneration, were settled orally in telephone conversations with the first respondent in Victoria. There was no written contract of employment. 233 John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503; Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491. Callinan The accident occurred in the early morning of 6 October 1991. At about 4am, the appellant awoke with a thirst. There was a refrigerator, with chilled water in it, in the kitchen downstairs. To avoid waking her husband, she did not turn on the bedroom light. In darkness, the appellant approached the stairs leading to the kitchen. There was no protective balustrade. Its absence had been the subject of complaint to the first respondent by both the appellant and her husband. The appellant attempted to avoid this part of the stairwell, and to turn on the stairwell light. She miscalculated and stepped over the edge of the stairs, falling heavily. She suffered injuries to her head and back. She was admitted to hospital where she stayed for three weeks. Following her discharge, and upon medical advice, she returned to Australia. It was agreed between the parties that if the appellant's damages were assessable according to Australian law, they would amount to $300,000. The Supreme Court proceedings The appellant234 sued the first respondent in tort and contract in the Supreme Court of Western Australia more than a year after she fell and hurt herself. It was not argued by either party that if the proceedings could be brought in Australia they could not be brought in that State or should not be pursued there because that Court was an inappropriate forum. They were commenced by statement of claim filed on 20 June 1997. On 2 October 2002, following a trial before McKechnie J, the first respondent was held liable and judgment given for the appellant for the agreed sum of $300,000. The claims in contract The appellant's causes of action in contract were dismissed. I mention some details of them and their fate to show that the resolution of the appellant's action required some consideration of the law of contract albeit that the appellant failed to make out the claims under that head. She had claimed, first that it was an express term of her contract of employment that the first respondent would provide her with accommodation in Wuhan; and that it was an implied term of the contract that the accommodation would be safe and satisfactory. The trial judge held that there was no express term in her contract that accommodation would be provided to her in Wuhan, and that there was no implied term as pleaded because a term of that kind was not necessary to give business efficacy to her contract. The appellant had also sought to rely upon a breach by the first respondent of her husband's contract of employment with it, pursuant to which the first respondent was expressly obliged to provide the appellant's husband with 234 Although the appellant's husband was the second named plaintiff on the statement of claim, it will be convenient to refer solely to the appellant when referring to the claims made in the statement of claim. Callinan accommodation that was in a "reasonably fit condition for use as a residence". The trial judge dismissed this claim on the basis that the appellant was not a party to that contract. The claims in contract are not in issue in this appeal. The claim in tort The appellant pleaded that the first respondent was the occupier of the premises in which she and her husband resided in Wuhan, had the immediate control of the premises, and accordingly the ability to have such repairs and modifications made as were necessary to make them safe and habitable. The trial judge, after reviewing both John Pfeiffer Pty Ltd v Rogerson235 and Regie Nationale des Usines Renault SA v Zhang236, decided that he was bound to apply the lex loci delicti, that is, the law of China. His Honour said237: "I find that although a duty of care arose in Australia, breach of that duty of care did not give rise to any cause for complaint until 6 October 1991 when [the appellant] fell down the stairs in Wuhan. That was when the wrong crystallised by the infliction of damage. Accordingly, I hold that in determining the choice of law to be applied in the resolution of [the appellant's] claim, the wrong or delicti substantially arose in Wuhan. Therefore the proper law to be applied in this case is the law of the People's Republic of China." The applicable Chinese law is to be found in the General Principles of Civil Law of the People's Republic of China ("the General Principles") which were based upon the civil codes of Europe, and which, in translation, were proved by the first respondent at the trial. Article 106 of the General Principles provided: "A citizen or legal person who violates a contract or fails to fulfil other obligations shall assume civil liability. A citizen or legal person who through his own fault infringes upon State or collective property or upon another person, or who harms another person, shall assume civil liability." 235 (2000) 203 CLR 503. 236 (2002) 210 CLR 491. 237 Neilson v Overseas Projects Corporation of Victoria Ltd [2002] WASC 231 at Callinan The trial judge found the first respondent liable to the appellant under Art 106. A further question that the trial judge was asked to resolve was whether the appellant's claim was statute barred under Chinese law. Articles 135 and 136 of the General Principles stated the relevant limitation provisions: "135. The period of limitation of actions on a request to the People's Court for the protection of civil rights is two years, unless otherwise stipulated by the law. In the following cases, the period of limitation of actions shall be one year: demand for compensation for bodily harm ..." The trial judge held that the People's Court in China might however exercise a discretion to extend a limitation period pursuant to Art 137 if special circumstances existed, and which provided as follows: "137. The period of limitation of actions shall be calculated from the time it was known, or should have been known, that a right was infringed upon. If more than twenty years have passed, however, since the date of the infringement of the right, the People's Court shall offer no protection. The People's Court may, under special circumstances, extend the period of limitation of actions." His Honour was of the opinion that there were special circumstances that justified the extension of the limitation period in the appellant's case: that the parties were Australian nationals; that the appellant returned to Australia at the end of the term of her husband's contract; that the first respondent was aware from an early stage of the appellant's intention to take legal action; and that no prejudice would be suffered by the first respondent if the limitation period were extended. To hold the last was to overlook the prejudice caused by the denial to the first respondent of the defence of limitations itself. His Honour also seems to have overlooked the prejudice to the first respondent by reason of the fact that in China the damages that could be awarded to the appellant would be likely to be less than in Australia and less than the sum agreed238. The outcome of the appeal is not, as will appear however, affected by those errors. In the result, the trial judge found that the appellant's claim was not statute barred under Chinese law. His Honour did this despite that the evidence before him by the only expert on Chinese law to give evidence said this of extensions in China of limitation periods: 238 Article 119 of the General Principles makes no provision for non-pecuniary loss, a matter noted elsewhere by the trial judge. Callinan "[STAUDE, MR:] Can I ask you to refer to 137? --- Okay. So should I read out, or ... We have got the document in front of us. Does that not provide, 'The People's Court may, under special circumstances, extend the period of limitation of actions'? --- That's a possibility. There are possibilities, so there is a way for the court to extend the limitation, but that's impractical. It's very difficult and they are very rare cases and in fact the opinion of Supreme Court has a relevant explanation in this article, in this particular article or sentence. What does the opinion say? We don't have a translation of that? --- I do have one by myself. The opinion at 169 says: (indistinct) force the meaning of article 137 of the General Principle of Civil Law, if the right holder cannot exercise his right of request due to the objective barriers during the legal time limitation period. So impractically this is very difficult use, only, for example, if there's some war which stopped a person, for example, going for overseas qualification or some (indistinct) Can I just ask you once again, so we get this right, we don't have it in writing in front of us, to read that part of the opinion again and any other part of the opinion that is directed towards article 137? --- In the opinions it's only 169 of the opinion refers to article 137 of the General Principle in relation to special circumstances and this ... [McKECHNIE J:] Could you just read the first two words again? Is it 'If force'? --- It force. I mean it means if – I use the words 'If' force which may be a Chinese – it means or it can be considered as the meaning of special circumstance under article 137. If the right holder cannot exercise his rights due to the objective barriers during this, so I keep on ... STAUDE, MR: Could you spell those two words that you used at the beginning of your statement, Mr Liu? --- I'm not sure whether this translates it correctly but it force – I use the words 'It force.' It, i-t? --- I-t, yes, force. F-o-r-c-e? --- for meaning translation it says it should be considered as (indistinct) McKECHNIE J: So we could read it as, 'It may be considered as the meaning of'? --- Considered. Callinan STAUDE, MR: In the researches that you've carried out for the purposes of preparing your opinion have you discovered any cases where article 137 has been applied? --- No, actually not." The trial judge considered the operation of the Chinese choice of law rule. Article 146 of the General Principles provided: "With regard to compensation for damages resulting from an infringement of rights, the law of the place in which the infringement occurred shall be applied. If both parties are nationals of the same country or domiciled in the same country, the law of their own country or of their place of domicile may also be applied." It was not in issue that the parties answered the description of nationals of, or persons domiciled in Australia. His Honour determined that Australian common law should apply because the remedy of negligence was available which was not dissimilar to the cause of action contemplated by Art 106 of the General Principles. In determining this, his Honour also thought it relevant that the dispute between the appellant and the first respondent had its genesis in Australia, as that was where the assumption of a duty of care by the first respondent occurred. The trial judge found that under the Australian common law of negligence, the first respondent owed a duty of care to the appellant to provide safe premises, similar to that owed by a landlord to a tenant, and that it had breached that duty239. His Honour also found that the appellant made no negligent contribution to her injuries. The Full Court of the Supreme Court of Western Australia The first respondent's insurer which had been a party to the proceedings, successfully appealed to the Full Court of Western Australia (McLure and Johnson JJ and Wallwork AJ)240. McLure J, with whom Johnson J and Wallwork AJ agreed, was of the view that the trial judge erred in applying Australian domestic law to the appellant's claim in tort. Her Honour identified a potential for conflict between the choice of law rule in tort in Australia and the relevant rule in China. If proceedings are commenced in Australia in respect of a tort that occurred in a foreign country, the law of that foreign country should be applied to determine the legal rights and 239 The Occupiers' Liability Act 1985 (WA) could have no possible application on the facts of the case. 240 Mercantile Mutual Insurance (Australia) Ltd v Neilson (2004) 28 WAR 206. Callinan liabilities of the parties to the tort as held by this Court in Zhang. In the present case, that would require the application of Chinese law to resolve the issue of the first respondent's liability for the appellant's injury. Under Chinese law however, and in particular, Art 146 of the General Principles, the law of a foreign country may be applied if both parties are nationals of that country. Her Honour was of the view that the case therefore raised the vexed question of the operation of the renvoi doctrine in private international law, a question which may be answered in no fewer than three ways: that the court of the forum might apply the domestic law of the foreign country without regard to its choice of law rules ("the no renvoi solution"); the court of the forum might apply the foreign choice of law rules, accept the remission to its law by the foreign law and apply the law of the forum ("single renvoi"); or the court of the forum might resolve the issue in the same manner as a foreign court, that is as if that court were to exercise local jurisdiction in the same case on the same facts. McLure J considered this Court's reasoning in Pfeiffer and Zhang and was of the view that those decisions were inconsistent with the application of the renvoi doctrine to torts that occur in a foreign country. Her Honour determined therefore that the "no renvoi" solution should be adopted, and the lex loci delicti, as the domestic law of the place of the wrong, should have been applied. Her Honour said241: "The High Court in Zhang has deliberately selected a rigid choice of law rule in tort to promote certainty and predictability. It would be inconsistent with the reasoning and result in Zhang to superimpose a renvoi doctrine the purpose and effect of which is to soften or avoid the rigidity of choice of law rules. Further, the implication in the reasons and reasoning of the majority in Pfeiffer and Zhang, particularly relating to certainty and territoriality, is that the chosen choice of law rule identifies or defines the law applicable to the determination of the relevant substantive rights in dispute (the lex causae) not the jurisdiction or law area which in turn will identify (or facilitate the identification of) the lex causae. It follows that the no renvoi solution should apply and the lex loci delicti be construed as a reference to the domestic law of the place of the wrong. In summary, I am satisfied that the reasoning of the High Court in Pfeiffer and Zhang is inconsistent with the application of the renvoi doctrine to international torts. Accordingly, the trial judge erred in applying Australian domestic law to [the appellant's] tort claim." 241 (2004) 28 WAR 206 at 216 [48]. Callinan The appeal to this Court The appellant's submissions The appellant submitted that a "single renvoi" approach should be adopted to the interpretation of Art 146, and that the trial judge correctly applied Australian domestic law to determine the first respondent's liability to the appellant. It was contended that Art 146 did not require the application of Australian choice of law rules giving rise to the (futile) result that the matter should be referred to China, again, to be determined according to domestic Chinese law. The appellant submitted that such a course would be unnecessary because the Australian choice of law rule which requires the matter to be determined by the lex loci delicti, has been exercised, and therefore spent, on that, the first, referral to the law of the foreign jurisdiction. The appellant argued that the language of Art 146 is generic and contemplates the potential application of as many different laws as there are countries. In those circumstances, the appellant contended, Art 146 reflects a policy decision to defer to the substantive law of another country to determine the result and does so for the good reason that the foreign law has a more appropriate connexion with a dispute solely between its nationals than Chinese law. The respondents' submissions The respondents submitted that the first sentence of Art 146 would have been applied if the proceedings had been instituted in China at the time when they were instituted in Western Australia, in which event, the limitations laws as part of substantive Chinese law would have barred the appellant's action. The respondents submitted that any choice of law rule that requires proof of foreign law is to be avoided. It was contended that an approach which reduces the uncertainties and costs of litigation accords with this Court's reasoning in Pfeiffer and Zhang, and would be beneficial to all litigants. The respondents further submitted that the application of the lex loci delicti rule for foreign torts without further application of choice of law rules achieves these aims. Disposition of the appeal In Zhang, this Court decided that the law of the place where a delict occurs should be applied by Australian courts to determine the substantive rights and liabilities of parties to that delict, whether it occurred in a different jurisdiction in Australia, or overseas. The majority (Gleeson CJ, Gaudron, Callinan McHugh, Gummow and Hayne JJ) were concerned to promote certainty in the law. Their Honours said242: "The selection of the lex loci delicti as the source of substantive law meets one of the objectives of any choice of law rule, the promotion of certainty in the law. Uncertainty as to the choice of the lex causae engenders doubt as to liability and impedes settlement. It is true that to undertake proof of foreign law is a different and more onerous task than, in the case of an intra-Australian tort, to establish the content of federal, State and Territory law. But proof of foreign law is concomitant of reliance upon any choice of law rule which selects a non-Australian lex When an Australian court selects a non-Australian lex causae it does so in the application of Australian, not foreign, law. While the content of the rights and duties of the litigants is determined according to that lex causae, it is necessary to recall that the selection of the lex causae is determined by Australian choice of law rules." Zhang came before the courts on an application by a foreign defendant with no connexion with Australia for a stay of the plaintiff's proceedings brought in New South Wales to recover damages caused and sustained in the territory of the foreign defendant. The application was made under the Rules of the Supreme Court of New South Wales on the basis that the lex loci delicti should be applied, and that the Supreme Court was for that and other reasons, an inappropriate forum. All members of the Court accepted the former but a minority only (Kirby J and Callinan J) were prepared to accept the latter. One of the results of the decision of the Court was to extend the rule that it had made in Pfeiffer governing the application throughout the Commonwealth of the lex loci delicti in the forum in which the action was brought, to foreign torts. In Zhang, the Court was invited to, but declined to recognize any exceptions, flexible or otherwise, to the rule. The ultimate question to be resolved in this appeal is whether the lex loci delicti referred to by the majority in Zhang includes the choice of law rules, specifically Art 146, of the Chinese General Principles. But before that question is reached, it is necessary to decide whether that article would have been construed and applied by a Chinese court, by finding, adopting and applying the tort law of Australia to this case if it were before that court, a matter to which little, or no relevant useful evidence was directed at the trial. For the appellant to succeed she needs an affirmative answer to that question as well as these holdings: that in resolving the matter, the Chinese court would hold that despite 242 (2002) 210 CLR 491 at 517 [66]-[67]. Callinan the expiration of the Chinese limitations period (Art 136) it had jurisdiction to, and would entertain an application under Art 146 for the application of Australian law; that that law includes as substantive law, Australian limitations law; and that the Chinese court would not read and apply Zhang as part of Australian law, requiring it to apply Chinese law only (double renvoi). Article 146 was the subject of some inconclusive cross-examination on behalf of the appellant. "Can I turn you to article 146? --- Yes. I will just read that for the benefit of the transcript: With regard to compensation for damages resulting from an infringement of rights, the law of the place in which the infringement occurred shall be applied. If both parties are nationals of the same country or domiciled in the same country, the law of their own country or of their own place of domicile may also be applied? --- Yes. Is that not a relevant provision in the context of this case? --- That's because – the reason I think it's irrelevant is because I think this is the law of conflict – I mean, lieu of conflict laws, and lieu of conflict laws under my knowledge is only used when a court – court used that – courts decide a case, decide which application is in a place where the case will be submitted, so, for example, this clause is only used when a case submitted in the Chinese court and the Chinese courts before hearing any further on the substantive issues would decide which law should be used as governing law, so this article will be used to decide that. Yes? --- So what I understand, according to my knowledge, is if a case rest in other countries – so other country like Australia, a court in Australia should use the law of Australia conflict to decide which law to use, so that's why to that extent I think it's not relevant to this case. That's just a matter of your opinion? --- That's right, yes, of course. Can I put it to you that article 146 would have enabled [the appellant], had she sued in China, to apply for an order applying Australian law? --- Apply for that. That's a possibility, yes." I cannot regard that evidence as of much assistance. It certainly did not say anything useful about what the likely conclusion of a court in China would Callinan be as to the question whether the tort law of the appellant's domicile should in fact be applied. There was evidence, one way it must be said, that the appellant would have been unlikely to have had a Chinese court's discretion to extend time exercised in her favour. The trial judge found to the contrary, and if the outcome of this appeal depended on that finding, the appellant would fail. But it does not. What must be visualized is a case instituted in China by the appellant, out of time, and in respect of which the respondents raise Art 136 as a bar. It is in that situation that the Chinese court could be expected to look to Art 146, and to entertain a request for the application of the second sentence of it. No suggestion was made that Art 136 could operate to prevent any party from starting a case in China and coming before the court to invoke Art 146. Indeed the contrary is the position. The expert in one of the passages that I have quoted from his evidence expressly saw such a request as a possibility. The second matter to which I adverted is also made out. Pfeiffer clearly holds that limitations laws are substantive laws in this country243. The third matter to which I have referred raises the ultimate question in this case, and I will leave it aside for present purposes. The question which I have posed involves the proper construction and application of the second sentence of Art 146 of the General Principles. The appellant submitted that there was expert evidence that a Chinese court would in applying the General Principles adopt principles of fairness and justice and that fairness or justice required the application of Australian law. The better view however is the one accepted in argument by the respondents, and correctly so in my opinion, that no expert evidence of any present relevance or utility was given on this matter at the trial. In any event I would not be prepared to say that fairness or justice is to be found, or found exclusively in Australian law rather than Chinese law. The evidence is simply silent on that matter. In those circumstances, the absence of relevant evidence of the Chinese approach to the construction and application of Art 146, it is right in my opinion to presume that the Chinese principles of statutory construction are the same as the Australian ones and to use the latter. This is consistent with authority in which English law has been applied to resolve questions involving a foreign law in the absence of any, or sufficient evidence of that law, which otherwise is in the usual case, to be pleaded and proved as a fact244. In F & K Jabbour v Custodian 243 (2000) 203 CLR 503 at 544 [100] per Gleeson CJ, Gaudron, McHugh, Gummow 244 Lloyd v Guibert (1865) LR 1 QB 115 at 129; The Nouvelle Banque de l'Union v Ayton (1891) 7 TLR 377 at 378; Re Parana Plantations Ltd [1946] 2 All ER 214 at 217-218; Szechter (orse Karsov) v Szechter [1971] P 286 at 296. Callinan of Israeli Absentee Property245, Pearson J, who was confronted with an unassisted need to construe some Israeli statutes, said this246: "I did not feel entitled or qualified to look through volumes of Palestine or Israeli ordinances or statutes or law reports as they were not in evidence and I would not know which of the ordinances or statutes were still in force or which of the reported decisions were still good law at any material time. It must be assumed that the Israeli rules of construction are the same as the English rules of construction." I propose accordingly to construe Art 146 as I would construe an Australian enactment. The first step is to have regard to its context. It forms part of Ch VIII of the General Principles which is wholly devoted to the application of the law to civil relations involving foreigners. The separate and detailed treatment of these immediately suggests that they are special matters apart from the mainstream of Chinese domestic law. That this is so is also implied by the well-known fact of which the Court can take judicial notice that China is avid for international trade and investment after many years of the maintenance of a different kind of economy. What is implicit in these matters is made explicit by Art 146, that the Chinese courts are to have a discretion in respect of activities in their country carried out by foreigners to allow the foreigners' law to determine their differences. What then are the sorts of factors which are likely to trigger the exercise of the discretion conferred by Art 146? In my opinion a Chinese court would regard the following factors as determinative of the exercise of the discretion to apply Australian law if the discretion were, as I have held it to be, assumed to be exercisable according to Australian legal principles: the absence of any question of liability of a Chinese national or authority; the fact that liability, if found, would be the liability of an authority or company of a polity of Australia; that there is no allegation of a breach of any written building laws, or laws of occupiers' liability in China; that the relationship between the parties came into existence in Australia; that the court might, as it did, need to construe, even if adversely to the appellant, a contract made in Australia; that the expenses and standards of treatment of the appellant would be Australian ones; that Chinese nationals would not be required to give evidence (except perhaps as to the effect of Chinese law); and that the outcome of the case on the application of Australian law would be of no, or little relevance or interest to the Chinese law makers or reformers. 245 [1954] 1 WLR 139; [1954] 1 All ER 145. 246 [1954] 1 WLR 139 at 148; [1954] 1 All ER 145 at 153. Callinan I do not overlook however that there are matters which can be put with some force the other way. One of them is what I noted in Zhang in a different context and which can be said of any court, including a Chinese court247: "No doubt, courts in Australia can and do regularly apply foreign law, but it would be vain to claim that they can, or would do it with the same familiarity and certainty as the courts of the jurisdiction in which it was created." That is not inconsistent also with what Kahn-Freund said in General Problems of Private International Law248: the only, justification why any country should "Nor is this in private international law merely a facet of the eternal and eternally insoluble dilemma of certainty of the law against fairness in the individual case. In this field it has a special significance. That significance stems from what is, when all is said and done, the principal, in any perhaps circumstances apply any law except its own. This is to prevent a party from gaining advantages and to protect him from suffering disadvantages owing to his or his opponent's ability to invoke a particular jurisdiction. The ideal of 'harmony' or (better) 'uniformity' is not an aesthetic caprice of academics: it is in this sphere a requirement of justice. The ideal is unattainable. All ideals are. Never shall we see the day when all countries will apply the same law to the same situation. This does not mean that we should give up pursuing the ideal, following a road leading in its direction – but this, too, is no more than a 'guiding line', not a 'policy' to be adhered à outrance." In short, any court in exercising a discretion as to the law to be applied should keep in mind the difficulties of finding, understanding and applying the law of a foreign country, the nuances of which at least may well elude the most diligent and careful of courts. Another countervailing consideration is that China is the country where the injury was suffered. Chinese principles of statutory construction could conceivably be called into question as the case progressed. Even so, as I have said, I am of the opinion that on balance, a Chinese court would be likely to prefer Australian law in all of the circumstances. The respondents' response to everything so far is of course that if a Chinese court were to apply Australian law it should do so comprehensively, and 247 (2002) 210 CLR 491 at 563 [192]. See also Earl Nelson v Lord Bridport (1845) 8 Beav 527 at 534-536 [50 ER 207 at 210-211] per Lord Langdale MR. 248 General Problems of Private International Law, (1976) at 323. Callinan not selectively by disregarding or qualifying the absolute rule stated in Zhang. Such an approach would be however unproductive of an attractive and clear result: Australian conflict law says, go to China to find and apply Chinese law; then Chinese law says a Chinese court may and would in the circumstances apply Australian law, including Australian conflict law, with the result that the matter would have to be decided according to the Chinese law of delict. No matter which solution is to be adopted by Australian courts, the result will not be entirely satisfactory intellectually and in logic. This does not stem wholly however from the unwillingness of the Court to recognize in Zhang what in hindsight might have resolved this case, a flexible exception in special circumstances of the kind which the second sentence of Art 146 of the Chinese General Principles expressly contemplates, but from the fact that absolute rules however apparently certain and generally desirable they may be, almost always in time come to encounter a hard and unforeseen case. In most respects this one is not a hard case. The proceedings have in fact been instituted in Australia. There is no contest between courts. The parties are all here. Their presence in China was temporary. The issue of liability was a simple one of negligence according to Australian common law. No one has argued that the Supreme Court of Western Australia was an inappropriate forum. All of those should incline the Australian court, if it may, to the application of Australian law. They are, it can be said, considerations arguing against the rebounding of the question of the law to be applied backwards and forwards potentially infinitely between Australian and Chinese law, and the mechanical use of renvoi as to which Scoles et al say249: "Nevertheless, a mechanical use of renvoi by all concerned jurisdictions could theoretically produce the problem of circularity. In this case, however, it is suggested that the forum accept the reference to its own law, refer no further, and apply its own law. This is the practice of most jurisdictions that do employ renvoi250. This is good policy: the 249 Conflict of Laws, 4th ed (2004) at 139-140. 250 See, eg, Austria: Federal Statute on Conflict of Laws §5(2), Bundesgesetzblatt 1978, No 304; France: Cass. Civ. June 24, 1878, D.P. 79.1.56, S. 78.1.429 and Cass. Reg. February 22, 1882, S. 82.1.393 (Forgo case); Germany: Introductory Law to the Civil Code (EGBGB) Art 4(1) (1986), and Kegel & Schurig, Internationales Privatrecht 393-94 (9th ed 2004); Japan: X v Y, [1994] HJ (1493) 71 (S Ct of Japan), transl in 18 Japanese Ann Int'l L 142 (1995); Switzerland: Federal Statute on Private International Law Art 14 (1987). For the German provision see also Ebenroth & Eyles, Der Renvoi nach der Novellierung des deutschen Internationalen Privatrechts, 1989 IPRax 1. For comparative treatment see Bauer, Renvoi im internationalen Schuld-und Sachenrecht (1985). European (Footnote continues on next page) Callinan foreign conflicts rule itself discloses a disinterest to have its own substantive law applied, indeed it recognizes the significance of the forum's law for the particular case; the case therefore probably presents a 'false conflict.' This view was expressly adopted by the Court of Appeals of Maryland. Furthermore, since uniformity in result would not otherwise be achieved in these circumstances, ease in the administration of justice is furthered by the application of forum law rather than by the use of foreign law." (further footnote omitted) The matters to which I have referred are the sorts of matters which influence courts in deciding the appropriateness of a forum. The two questions, which law should be applied, and in which forum should it be applied, are closely related251, and will often admit, indeed demand, the same answer. In all of the circumstances here, the Western Australian Supreme Court is an appropriate forum and is better fitted, unless it is compelled not to do so, to find and apply Australian law to this case. I agree that the right course to adopt here is for the Australian courts to accept the (likely) Chinese reference to Australian law in accordance with the practice of most other jurisdictions. The truth is that although choice of law rules are part of the domestic or municipal laws of a country, they are very special rules as this case shows and should not be mechanically applied to all situations. Indeed as Lord Atkinson pointed out in Casdagli v Casdagli, fallacies lurk in the term "municipal law" in any event252. It is also important to note that in that case, the House of Lords approved the dissenting judgment of Scrutton LJ in the Court of Appeal, in which his Lordship said253: law makes one exception: there is no renvoi in choice of law for contract. Rome Convention on the Law Applicable to Contractual Obligations Art 15; Germany, EGBGB Art 35(1). In addition, the EU Commission's Proposal for a Regulation for the Law Applicable to Non-Contractual Obligations would also exclude renvoi in cases of tort injury without mandate, and unjust enrichment. Art 20 COM (2003) 0427; Japan: X v Y, [1994] HJ (1493) 71 (S Ct) transl in 18 Japanese Ann Int'l L 142 (1995). [balance of footnote omitted] 251 cf Briggs, "In Praise and Defence of Renvoi", (1998) 47 International and Comparative Law Quarterly 877 at 883. 252 [1919] AC 145 at 192-193. 253 [1918] P 89 at 111. See also Jaber Elias Kotia v Katr Bint Jiryes Nahas [1941] AC 403 at 413, which was a decision of the Privy Council. Callinan "Practical and theoretical difficulties arise from the fact that, while England decides questions of status in the event of conflict of laws by the law of the domicil, many foreign countries now determine those questions by the law of the nationality of the person in question. Hence it has been argued that if the country of allegiance looks to or sends back the decision to the law of the domicil, and the country of domicil looks to or sends back (renvoyer) the decision to the law of nationality, there is an inextricable circle in 'the doctrine of the renvoi' and no result is reached. I do not see that this difficulty is insoluble. If the country of nationality applies the law which the country of domicil would apply to such a case if arising in its Courts, it may well apply its own law as to the subject-matter of dispute, being that which the country of domicil would apply, but not that part of it which would remit the matter to the law of domicil, which part would have spent its operation in the first remittance. The knot may be cut in another way, not so logical, if the country of domicil says 'We are ready to apply the law of nationality, but if the country of nationality chooses to remit the matter to us we will apply the same law as we should apply to our own subjects.'" How then should the principle be stated? In my opinion, it is, in relation to the remedying of wrongs committed in foreign countries, that although the lex loci delicti is to be applied to cases brought in Australian courts, if the evidence shows that the foreign court would be likely to apply Australian law by reason of its choice of law rules or discretions, then the Australian common law of torts should govern the action. This is a solution which offers finality, and limits the need to search for and apply foreign law. It does not however eliminate the need to find the foreign choice of law rules so that it can be ascertained whether they would be likely in fact to require the application of Australian tort law. Each case will depend upon the evidence before the court. Foreign law must as a matter of fact be pleaded and proved (or absent proof, presumed) as with any other fact in issue. The appeal should be allowed with costs. I agree with the consequential orders proposed by Gummow and Hayne JJ. 263 HEYDON J. The background circumstances are set out in the judgments of Gummow and Hayne JJ and Callinan J. I agree with the orders proposed by Gummow and Hayne JJ for the following reasons, grouped under headings noting the key questions for decision. What law determines the plaintiff's rights? Since the events giving rise to the plaintiff's injury took place in the People's Republic of China, it is necessary to look to the lex loci delicti – the law of that place – for the resolution of her claim254. How much of the law of China is to be looked to? The respondents' submission was in effect that in applying the lex loci delicti – Chinese law – an Australian court should only look at Arts 106255 and 135-137256 of the General Principles of Civil Law of the People's Republic of China ("the General Principles"). They submitted that it would be wrong for Australian courts to have recourse to Ch VIII of the General Principles because this was to have impermissible recourse to the conflicts rules of China. Alternatively, it was submitted for the same reason that if Australian courts were to have recourse to Ch VIII, and Art 146 within that Chapter, they were limited to the first sentence of Art 146, and could not examine the second. Article 146 provides: "With regard to compensation for damages resulting from an infringement of rights, the law of the place in which the infringement occurred shall be applied. If both parties are nationals of the same country or domiciled in the same country, the law of their own country or of their place of domicile may also be applied. Acts which occur outside the territory of the People's Republic of China and which the law of the People's Republic of China does not recognise as acts of infringement of rights shall not be dealt with as such." In evaluating the merits of the respondents' submission, it is desirable to analyse its consequences. Those consequences can only be seen by examining what, on each side's case, are said to be the relevant provisions of Chinese law. 254 Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491. 255 Article 106 is set out at [231] of Callinan J's reasons. 256 Articles 135 and 137 and the relevant parts of Art 136 are set out at [231] of Callinan J's reasons. In deciding the content of those provisions, it is necessary to apply appropriate principles of construction. There was no evidence about what principles of construction ought to be applied to Art 146. That is so for the reasons given by Callinan J257. It is appropriate to employ Australian principles of construction, both for the reasons given by Callinan J258 and for the reasons given by Gummow and Hayne JJ (on the hypothesis that there was an evidentiary deficiency on this point259). The general correctness of that approach (pursuant to which the relevant foreign law is assumed to be the same as the lex fori if there is no, or only incomplete, proof of the foreign law) has been questioned260, but no argument adverse to its general correctness was advanced in this appeal, and it was described by the respondents as "trite". The only relevant argument was that that approach should not be permitted to result in the plaintiff's success, for that would destroy, by a side- wind, the requirement that only the domestic lex loci delicti be applied. For reasons given below, there is not in the present case any requirement of that kind. Further, this Court in Regie Nationale des Usines Renault SA v Zhang261 said nothing about the approach in question. On Australian principles of construction, Ch VIII is to be read as dealing with the application of the law to civil relations involving foreigners. The opening words of Art 142 make it plain that it does so in a manner which excludes other parts of the General Principles: "The application of the law to civil relations involving foreigners shall be determined by the provisions of this Chapter." Various provisions apart from Art 146 provide for the application of principles other than those of Chinese law. Thus the balance of Art 142 provides: "Where the provisions of an international treaty which the People's Republic of China has concluded or has acceded to differ from civil laws of the People's Republic of China, the provisions of the international treaty shall apply, with the exception of those articles to which the People's Republic of China has declared its reservation. 257 Callinan J's reasons at [248]-[249]. 258 Callinan J's reasons at [249]. 259 Reasons of Gummow and Hayne JJ at [125]. 260 Fentiman, Foreign Law in English Courts, (1998) at 149-156. 261 (2002) 210 CLR 491. Where the law of the People's Republic of China and international treaties concluded or acceded to by the People's Republic of China do not contain provisions in relation to civil matters involving foreigners, international practice may be applied." Article 143 provides: "In the case of a citizen of the People's Republic of China who has settled in a foreign country, the law of the country in which he has settled may be applied with regard to his capacity for civil acts." Article 144 provides: "With regard to the ownership of real estate, the law of the place in which the real estate is located shall be applied." Article 145 provides: "Unless otherwise stipulated by law, the parties to a contract involving foreigners may choose the law applicable to the handling of disputes arising from the contract. If the parties to a contract involving foreigners have not made a choice, the law of the country of closest connection to the contract shall be applied." Article 147 provides: "With regard to a marriage between a citizen of the People's Republic of China and a foreign national, the law of the place in which the marriage is concluded shall be applied. With regard to divorce, the law of the place in which the court handling the case is located shall be applied." Article 148 provides: "With regard to the support of dependants, the law of the country of closest connection to the dependant shall be applied." And Art 149 provides: "With regard to the legal inheritance of property, the law of the place in which the deceased was domiciled at the time of death shall be applied to personal property, while the law of the place in which real estate is situated shall be applied to such real estate." Thus in some cases Ch VIII contemplates that a law other than Chinese law must apply (Arts 142 (second sentence), 144, 145, 146 (first sentence, subject to the second sentence), 147, 148 and 149). And in other cases the provisions of Ch VIII confer a discretion to select a law other than Chinese law, but they make it plain that once the other law is selected, it must apply. To all these possibilities there remains a residual exception in Art 150: "Where this Chapter provides for the application of the law of a foreign country or of international practice, this must not be contrary to the public interest of the People's Republic of China." But subject to that, where questions about civil relations involving foreigners arise, the provisions of Ch VIII operate in place of other provisions of the General Principles. Among the provisions of Ch VIII is the second sentence of Art 146, which creates a discretion to apply Australian law and hence remove Chinese law as the relevant source of rights and obligations. This conclusion would unquestionably have followed if the present parties, or parties in the position of the present parties, had participated in proceedings instituted in China. The respondents argued, however, that this conclusion did not follow where the proceedings had been instituted, as they were, in Australia. The respondents contended that there was a general "no renvoi" principle in the present circumstances: an Australian court required to apply the lex loci delicti was required to apply "the domestic law of the foreign law area". The respondents also contended that that principle was "implicit" in Regie Nationale des Usines Renault SA v Zhang, and one passage of the majority joint reasons was referred to262. However, there was no textual demonstration that the principle contended for was to be found in any part of Regie Nationale des Usines Renault SA v Zhang, and indeed it cannot be found in that or any other case. Further, the principle, at least in cases like the present, cannot exist. That is because it would be absurd if it did. This Court has seen it as undesirable that "the existence, extent and enforceability of liability [should vary] according to the number of forums to which the plaintiff may resort"263. It would be absurd for Australian courts to do what the supposed principle requires, namely to apply Chinese law to disputes even though Chinese law would not apply had the proceedings been instituted in China and a decision to apply Australian law were made pursuant to the second sentence of Art 146. That is, it would be absurd, if the supposed principle existed, that the body of law to be applied in proceedings commenced in China by the plaintiff against the respondents in relation to the incident causing her injuries should be different from that to be applied in 262 (2002) 210 CLR 491 at 520 [75] per Gleeson CJ, Gaudron, McHugh, Gummow 263 John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 at 539 [83] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ. proceedings commenced in Australia by the plaintiff against the same parties in relation to the same incident. Finally, it would be absurd that the regime – the lex loci delicti – which the Chinese Government enacted for incidents causing injuries of the type which the plaintiff suffered should be set at naught by reason of Australian law, as it would be if the supposed principle existed. Is the plaintiff's action defeated by the Chinese law of limitations? Had the plaintiff sued in China, assuming that no extension of the limitation period were granted under Art 137 and Australian law were not applied under Art 146, Art 136 would have debarred the plaintiff from suing. That is because she sued nearly six years after the incident causing her injuries, ie nearly five years after the period stipulated in Art 136(i). The question is whether Art 136 operates in the present circumstances rather than Art 146, or vice versa. On Australian principles of construction, because Ch VIII is an exclusive statement of the principles which apply to civil relations involving foreigners, it applies in substitution for principles stated in other Chapters of the General Principles which might have applied if Ch VIII had not existed. Hence, where both parties to a dispute about compensation for damages resulting from an infringement of rights are nationals or domiciliaries of the same country, and the law of this country is applied pursuant to the second sentence of Art 146, the law so applied includes its law on limitations. This country's law on limitations therefore applies instead of Arts 135-137 in Ch VII. Is the discretionary decision contemplated by the second sentence of Art 146 a decision of a Chinese court? The answer is in the affirmative for the reasons given by Gummow and Hayne JJ264. What factors are relevant to the decision of a Chinese court under the second sentence of Art 146? The process of applying Australian principles of construction to Art 146 leads to the conclusion that the factors relevant to the decision of a Chinese court engaged in deciding how to exercise its discretion under Art 146 are those listed by Callinan J265. Those factors support the conclusion that a Chinese court would exercise its discretion in relation to this controversy in favour of applying Australian law. 264 Reasons of Gummow and Hayne JJ at [113]. 265 Reasons of Callinan J at [251]. What parts of Australian law are to be applied? Should the whole of Australian law be applied, including its rules as to the conflict of laws? Or only the domestic Australian law of tort? The problem in this case is not to be solved by seeking to identify some principle of universal or general application. It is to be solved rather by construing Art 146. Article 146 is part of the Chapter of the General Principles dealing exclusively with foreigners in relation to the civil law of China. It sits alongside provisions contemplating that in many respects civil relations involving foreigners are to be resolved by bodies of law other than Chinese law. It contemplates that when a Chinese court decides to apply the law of the country of which the parties are nationals or domiciliaries to a claim for compensation for damages resulting from an infringement of rights, it is to decide to apply that law in such a way as to prevent any remission of the controversy to China. Thus in this case an application of the law of Australia under Art 146 would not apply any part of Australian law which might result in recourse back to China as the lex loci delicti. It is unnecessary to decide how Art 146 would operate if the parties were nationals or domiciliaries of a country having rules of the conflict of laws calling for the controversy to be decided by the law of a third country. There is no inconsistency between: deciding that in this case at least the Australian rules of the conflict of laws refer to the entirety of the lex loci delicti (as distinct from Chinese "domestic" law only); and deciding that recourse to the second sentence of Art 146 leads to an application only of domestic Australian law. That is so for two reasons. First, the above examination of the lex loci delicti reveals that Ch VIII exhaustively deals with civil relations involving foreigners. There is no authority for any general principle mandating the exclusion of Ch VIII in relation to the foreigners engaged in these proceedings, and no such general principle could stand with the absurdity inherent in it of an Art 146 order applying Australian law if proceedings were instituted in China, but not if they were not. Secondly, to construe Art 146 in relation to an application of the law of Australia as an application only of Australian domestic law is not to describe any rule of the common law, but simply to reach a conclusion about the content of Chinese legislation. In short, the result in this case turns on the specific content of Chinese legislation, not on the wider principles that each of the parties to this appeal advocated. The respondents objected that an outcome favourable to the plaintiff could only rest on the recognition of some "flexible exception" to the rule that controversies about foreign torts are governed by the lex loci delicti, and that any such recognition was forbidden by earlier authority in this Court266. That objection is groundless. There is a fundamental difference between, on the one hand, "flexible exceptions" to a rule of law commanding attention to the lex loci delicti, and, on the other hand, the consequences which flow from attention to and application of the rules of foreign law, proved or assumed as facts, varying as they do in the hundreds of jurisdictions throughout the world. 266 Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491 at 520 [75] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ.

HIGH COURT OF AUSTRALIA STATE OF NEW SOUTH WALES APPELLANT AND RESPONDENT New South Wales v Bujdoso [2005] HCA 76 8 December 2005 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of New South Wales Representation: M G Sexton SC, Solicitor-General for the State of New South Wales with P R Sternberg for the appellant (instructed by Crown Solicitor for New South Wales) J J Graves SC with R J de Meyrick for the respondent (instructed by T D Kelly & Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS New South Wales v Bujdoso Negligence – Breach of duty of care – Prison authorities – Respondent was a prisoner admitted to minimal supervision Work Release Programme – Respondent had been threatened by other prisoners – Appellant knew of threats – Respondent assaulted by a group of prisoners – Scope of duty of prison authorities to protect the safety of prisoners under its control – Whether the appellant breached its duty of care to the respondent – Whether effective measures were adopted to prevent a foreseeable risk of injury to the respondent. GLEESON CJ, GUMMOW, KIRBY, HAYNE, CALLINAN AND HEYDON JJ. The issue Silverwater Prison is a prison in and conducted by the State of New South Wales. The issue in the appeal is whether the State was in breach of its duty of care to the respondent when he was assaulted during his imprisonment there. The facts On 16 February 1990, the respondent was convicted in the District Court of New South Wales, on his own plea of guilty, of three counts of sexual assaults on male persons under the age of 18 years. He was sentenced to a minimum term of two years and six months' imprisonment, and an additional term of ten months' imprisonment. The minimum term was due to expire on 15 August 1992. By September 1991, the respondent had been admitted to a prison Work Release Programme ("the Programme"). He accordingly left the prison each working day to undertake paid employment. On his return, he occupied a room in one of a group of buildings known as "the Units" located within a fenced area in the grounds of the prison. On the evening of 21 September 1991, two or more assailants wearing balaclavas, who also were prisoners, entered the respondent's room, and attacked him with iron bars. He suffered serious injuries. In 1991, there were relevantly three main classifications of prisoners1: A, B and C. Category C, which was the "lowest" category, was divided into further sub-categories. Prisoners classified as C1 were kept behind a secured fence with minimal supervision. Prisoners classified as C2 were kept in an open institutional environment with minimum security, and prisoners with a C3 classification were permitted to leave the prison on work release, and could be granted weekend, day and education leave. These last were prisoners who in the opinion of the Director-General did not need to be confined by a physical barrier at all times and who did not require close supervision. 1 Reg 8 of the Prisons (General) Regulation 1989 (NSW) made under the Correctional Centres Act 1952 (NSW). See now Crimes (Administration of Sentences) Regulation 2001, Reg 22. The respondent was first imprisoned in Parramatta Gaol, and then, after July 1990, in Bathurst Gaol. By 26 July 1990 he had been classified as Level B. He was soon granted a C1 classification. In November 1990 he was given a C2 classification and was transferred to the Oberon prison farm. There he was taunted by other prisoners and called a "rock spider". The Deputy Superintendent recommended that the respondent be transferred from Oberon to the Kirkconnell Afforestation Camp for his own safety. The respondent made several applications to be included in the Programme which was conducted from Silverwater. In the meantime, at Kirkconnell, he had been assaulted but had not complained. He did not wish to be branded a "dog". In May 1991, he was transferred to Silverwater, and two months later a psychologist, Mr Edwards, recommended that he be accepted for the Programme. In late July 1991 the respondent received an obscene and threatening letter of which the prison officers became aware. At Silverwater the respondent was at first placed in the dormitories. At meal times, he was taunted by being called a "rock spider". The Deputy Superintendent of Silverwater made a note in his journal on 8 August 1991: "Reported by Officer J Kirby (SLEF) the finding of two metal knuckle dusters. All SLEF workers to be searched at 12.15 pm on leaving the SLEF area. Institution to purchase one metal detector for use when prisoners return from work at SLEF." (SLEF is the Silverwater Light Engineering Factory which was fenced off from the Units in which the respondent was assaulted.) On 9 August 1991, Mr Lewis, the Acting Superintendent, sent this memorandum to the Superintendent: "Today 9/8/91, I was approached by the Welfare Officer Mrs Torda, in relation to prisoner Peter Andrew Bujdoso. I then spoke to Bujdoso in company with Mrs Torda. Bujdoso told me that [another prisoner] was moved into this [an apparent error for 'his'] cell last night, and since that time was causing trouble by turning other prisoners against him. He requested that I move him to another section of the gaol. The SAU being fully occupied, I arranged for him to be accommodated in Unicom House. S P O R Brown at 2.15 pm informed me that he has been told by a prisoner that Bujdoso would not be safe in Unicom House. I have instructed Mr Brown to immediately submit a report on this matter." Unicom House was an area within the Silverwater complex in which drug and alcohol treatment was provided. It was also known as the D & A Unit. On the same day, Mr Brown, an official based in that unit, reported to the Superintendent in these terms: "On commencing duties as SPO in the D & A unit I was informed by Mr Lehn [a prison officer] that inmate Bujdoso 186369 was moved into the unit on Mr Lewis's instructions. I have also been informed that the inmate was moved into the D & A because his cell mate had threatened him. I was also told that Bujdoso was a rock spider and that some of the inmates were going to flog him if he is not moved out of the D & A Unit. I have conveyed this message to Mr Lewis who has stated that Bujdoso is 'there and is stopping there.' I wish it known that the onus is now on Mr Lewis should anything happen to this inmate. Furthermore Bujdoso is here even though he has not got a drug or alcohol problem so he will not be attending the classes which is part of the criteria to be moved into the D & A unit." The respondent said in his evidence at the trial that he was taunted in the dormitory and the lunch room and called a "rock spider". He was told by other prisoners that he should not even be at Silverwater. It was for this reason that he asked to be moved to the work release area. It was when that request was refused that he was located in Unicom House. On his location at Unicom House, he spoke to the Deputy Superintendent, Mr Rochford, and Mr Lewis. They asked him if he wished to go back to Kirkconnell or to stay at Silverwater. He replied that he felt that he would be safest on work release. His reason was that employment out of the prison from about 5.30 am until 6.30 to 7.00 pm would remove him from the attention of other prisoners for a substantial part of the day: and, that the psychologist had told him that at Silverwater he would be in much less danger in the work release section than elsewhere, because the inmates there had all worked so hard to reach the stage of being on the Programme. He was then asked to write out a statement to that or a similar effect. This is what he wrote and signed: "I Peter Bujdoso, feel that I am in no danger. I feel that other inmates will throw verbal abuse at me but I am firmly convinced that is as far as it will go, I wish to remain at Silverwater." The accommodation for prisoners on the Programme comprised four demountable units with two on one side of a walkway, and two on the other. Adjacent to one set of two was the administration block which accommodated the prison officer on duty. Each of the four accommodation units had a central corridor and approximately nine rooms for prisoners on each side. At each end of the corridor was a door which was left open. The units were fenced off from the balance of the Silverwater complex by means of a chain wire fence, the gate to which was locked at night. Within that fence was Silverwater House which also contained prisoners who were participating in the Programme. There were between 80 and 100 such work release prisoners in the area at the time. The respondent was allocated a room at the end of a unit furthest from the walkway. It was also furthest from the administration block. The shower and lavatories were adjacent to it. Each prisoner's room was entered by a door in which there was a small window. Each was fitted with a night latch lock which could be opened from the inside by turning a knob, but from the outside only by a key. Each inmate was given a key to his room which would open only that room. The prison officer on duty had a master key which could open all of the rooms. On 21 September 1991, the respondent returned from work. At about 11.00 pm he saw a face looking through the window in his door. He arose from his bed to see that the door was being pushed open. He went to it and put his shoulder against it but it was forced open. Two to four, he could not be sure of the number, balaclava-clad men burst into the room and immediately began to strike him with iron bars. The respondent huddled in a corner so that only one or two of them could get to him at a time. He was being hit hard on the head. He said that his brain felt like jelly: he was "swimming around in his head" and he lost consciousness. He was also struck on his arm and thumb as he tried to protect his head. His right knee and back were struck as well but most blows were to his head. His next recollection is of waking up and crossing to a room on the other side of the corridor to ask its occupant to call the prison officer. His injuries included a fracture of the skull. On about 2 October 1991, after receiving remedial treatment, the respondent wrote an application for return to Silverwater so that he could continue with his work. In that letter he said: "I accept that the prison officials do not want to accept responsibility for my safety. I take that responsibility on myself." He also said: "The problem at Silverwater is the attitude of certain inmates. They are violent to the core and there is some lapse in the system allowing them to achieve a C3 classification. I am willing to allow myself to be locked in separation to the majority of prisoners with the aim of achieving my stage 2 where I can be reunited with my family." On 7 October 1991, another named prisoner made a statement saying that he was in the toilets when he heard a conversation about a "rock spider" who had been attacked a few weeks before and had returned to the Units. He heard four or five men speaking of giving him another "going over". Following this, the respondent was returned, against his wishes, to Kirkconnell where he served the remainder of his sentence. On the evening of the assault, as was the current practice, one prison officer, Mr Lehn came on duty on the B watch at Silverwater House and the Units at 10.30 pm and remained on duty until 6.00 am the next day. His first task was to check the fence line by walking around its perimeter for some 10 or 15 minutes. Thereafter, he would be joined temporarily by another officer from another unit to make a head count of the prisoners in the Units. They would shine a torch through the window in the door of each room, satisfying themselves that each was occupied, and confirm that the numbers counted coincided with the correct complement of persons. Having completed this head count the two of them would leave the Units and go across to the other units and Silverwater House to conduct a similar head count there: after that they would separate. In consequence there were some periods when there was no officer at the Units at all, and when there was, only one. The trial The respondent sued the appellant for damages for personal injuries in negligence in the District Court of New South Wales. The action was heard by Cooper DCJ, sitting without a jury. Mr Mercer, who became the Governor of the Mid North Coast Correctional Centre, and was an Assistant Superintendent at Silverwater between 1989 and 1992, gave evidence. He explained that until 1990, there had been two officers working on the B watch, one at Silverwater House and one in the Units. In late 1990, the number of officers in those sections was reduced to one. The main role of the officer on duty on the B watch was "accountability", that is apparently ensuring that all prisoners were present on random checking. Because the majority of the inmates there were out in the community for most of the day, and some for most of the night, Mr Mercer believed that there were no "custodial issues" with them. If one did arise with a particular inmate he would have been removed from the work release area. Mr Edwards, the prison psychologist, had worked at the Silverwater complex for four years by 1991. It was one of his duties to assist in the assessment of the suitability of an inmate for the Programme. He also provided psychological services as required, not only in preparation for an inmate's inclusion in the Programme but also in preparation for his release into the community. Mr Edwards could recall the respondent for two reasons. The first was his willingness to confront and deal with his criminal tendencies. The second was the fact of the assault itself. Mr Edwards said that the incidence of violence within the Units was very low, lower than in other sections within the Silverwater complex which itself had a lower incidence of violence than other institutions. He did concede however that if there were a risk to a particular prisoner it could be reduced if he were given a room next to the warder's station. Mr Mercer explained that not all inmates who came to the Silverwater complex were considered suitable for a C3 classification. If unsuitable, they were returned to the gaol from which they had been sent. An inmate who fought, or failed to follow instructions, would be unlikely to be allowed to undertake the Programme. Mr Mercer's evidence was that inmates who had been convicted of sexual offences against children were at times placed in mainstream prisons in association with other inmates who had not committed offences of those kinds. They would be counselled to redress the cause of their imprisonment. Inmates convicted of sexual offences against children generally preferred not to be housed with other such inmates. In the case of the respondent, a plan would have been made to deal with his offending behaviour, part of which was his release to work. Mr Mercer could recall only one other serious assault upon an inmate on the Programme and in the Units. The victim had been fire bombed, not because he was a sexual offender against children, but because he had given information at Long Bay Prison about the presence of a hand gun at the Central Industrial Prison. There was one other significant piece of evidence given by Mr Mercer. He said that it had been the practice of some prisoners to absent themselves from the Units at night in order to visit the nearby Silverwater Speedboat Club where they drank alcohol and generally behaved as if they were not prisoners. Better surveillance in the form of random checks had instantly stopped these abscondings. The primary judge said that it was clear from the evidence that the prison authorities believed that those within the fence that housed the work release inmates could be trusted, and had proved themselves worthy of that trust. Accordingly, no special measures were necessary to ensure their safety. In dismissing the respondent's action, the trial judge was critical of some of the expert evidence called by the respondent: "There was tendered in the [respondent's] case a report from Mr Ryan, a consultant who has had some experience, albeit limited, in the correctional services industry. Notwithstanding this, he does make some points which are worthy of consideration. In his report of 14 November 2002 ... he sets out the history of what he had been informed were threats made to the [respondent]. In particular he referred to the [respondent's] movements from Oberon to Kirkconnell and from the dorms into Unicom House due to threats made against him. He also points out that there always exists in the prison community a definite hierarchy or pecking order and sex offenders are of the lowest stratum. To quote from his report: 'Once prisoners make it through to something like a work release program, there is an inferred expectation that they require minimal supervision and maintenance. After all they are free in the wider community for much of the time so their propensity for errant or illegal behaviour is deemed to be at a minimum. That does not take into account however, that there will always be present in even the most open of correctional setting a hard core, recidivist element. Such individuals are most often long term and institutionalised offenders who tread a very fine line but who often fall back easily into criminal ways.' He goes on to say that placement on the work release program subjected the [respondent] to further exposure because he was in a setting where there was almost no direct supervision or monitoring for lengthy periods during the night. Moving him into Unicom House drew even more attention to him and would have attracted even more adverse interest because of the fact that he was a non participant in the drug and alcohol treatment program. The cell/room in which he lived was fundamentally insecure, the size of the work release unit, its layout and the absence of a prison officer made it a most dangerous environment in which to place someone of [the respondent's] circumstances. Mr Ryan postulates that while it is generally advantageous for any prisoner to make his way through the various levels of security to the point where he can participate in a work release program there are some cases where the contrary is indicated. The [respondent's] was one such case. He concludes: 'In summary, despite [the respondent's] that he participate in the works release program, proper consideration of the case would have dictated a refusal of that request. In the alternative, further security should have been provided for [the respondent] given his special circumstances and the well documented knowledge of the concerns about him.' insistence There are significant inaccuracies in the statement of facts upon which Mr Ryan based his opinion. The first was that there were records of minor assaults perpetrated upon the [respondent]. Whilst the [respondent] gave evidence of one previous minor assault in March 1991 at Kirkconnell, he did not report it and I am satisfied on the probabilities that it was never recorded and so never came to the notice of the prison authorities. The second inaccuracy is the statement that '[the respondent] was placed in an environment where there had been recorded weapons findings.' In support of this he relied upon exhibit B. That document, however, refers to knuckle dusters being located within the SLEF area. That area was fenced off and quite separate from the work release units." The appellant had not at the trial disputed that a duty was owed. That no doubt was because of what was said by Dixon CJ, Fullagar and Taylor JJ in Howard v Jarvis2. This was applied as the settled law in Cekan v Haines3. More recently, in State of New South Wales v Napier, Mason P had said4: "The control vested in a prison authority is the basis of a special relationship which extends to a duty to take reasonable care to prevent harm stemming from the unlawful activities of third parties." It was the primary judge's opinion however that the appellant had not been in breach of the duty of care which it owed to the respondent in this case. The primary judge said this: "The [appellant] concedes that the supervision was minimal but says that it was appropriate in the light of the fact that the inmates in the units and Silverwater House had all passed through various tests and observations to the extent that they were trusted to go out into the community on works release and/or day leave. Accordingly they could be trusted not to inflict an assault upon a fellow inmate. In my view this is a reasonable conclusion for the authorities in charge of that prison to have reached." One finding of the primary judge which the Court of Appeal thought important was that the history of the respondent, as known to the appellant, "was one where (1958) 98 CLR 177 at 183. Howard v Jarvis was followed in Morgan v Attorney- General [1965] NZLR 134 at 138-139. (1990) 21 NSWLR 296 at 308, 310. [2002] NSWCA 402 at [75]. there was a potential that the [respondent] could be subjected to physical violence". The Court of Appeal The respondent successfully appealed to the Court of Appeal of New South Wales (Sheller, Ipp and McColl JJA)5. Ipp JA, with whom Sheller and McColl JJA agreed, said6: "Prisoners convicted of sexual assaults on minors are known in prison as 'rock spiders'. They are regarded with contempt by other prisoners and are often subjected to verbal and physical abuse by them. For this reason sexual offenders are sometimes placed in protective custody. The [respondent] did not wish to be placed under protection and attempted, while in gaol, to stay away from other paedophiles. He also attempted to keep secret the offences of which he had been convicted. He was, however, unsuccessful." His Honour was influenced by the appellant's reduction in the number of supervising officers at Silverwater and said this7: "In late 1990, the system was changed by reducing the number of officers in Silverwater House and the Units to one. The second officer was moved to a different section of the Silverwater complex. Mr Mercer, who at the relevant time was an assistant superintendent at Silverwater, testified that the officers were reduced from two to one 'because of the lack of custodial issues and the administrative and accountability role that they played'. It is apparent from other evidence given by Mr Mercer that, by 'custodial issues' he meant issues involving the potential escape of the prisoners. 'Accountability' involved head counting. It does not seem from Mr Mercer's testimony that any thought was given to the personal safety of the prisoners residing in the Units. 5 Bujdoso v New South Wales (2004) 151 A Crim R 235. (2004) 151 A Crim R 235 at 237 [9]. (2004) 151 A Crim R 235 at 240 [32]-[34]. The effect of the reduction in officers meant that for substantial periods within every two hours there was no officer at the Units and the prisoners were left entirely alone there. The lock on the [respondent's] room door was flimsy and out of date. It could be forced open fairly easily. Its purpose was merely to give privacy to the inmates. As the trial judge found, 'it was never intended to keep out a person or persons who might be striving to enter the room with felonious intent'." His Honour thought these matters of particular relevance8: "At Silverwater [the respondent] had received the anonymous threatening letter and had been called a rock spider. In a report dated 26 September 1991, Mr Edwards stated that the [respondent] had 'often reported incidents in which he had been threatened, vilified or humiliated'. 'Those issues came up in ongoing discussions about whether or not [the respondent] could be maintained safely at Silverwater.' He said that that information 'was related to other staff in case discussions, direct discussions of how well he could be managed.' The fact that the [respondent] signed a document stating that he did not fear for his safety does not detract from the actual knowledge of those in control of the Units that his safety was at risk. Indeed, the fact that Mr Rochford and Mr Lewis asked him to make a statement to that effect indicates that they appreciated that he was at risk and did not want to be blamed should the risk materialise." His Honour's conclusion appears in the following paragraph9: "... I consider that the [appellant] did breach the duty of care it owed the [respondent] and the judge erred in finding to the contrary. The system of trusting the C3 prisoners had not always worked, there had been a serious (2004) 151 A Crim R 235 at 243 [60]-[61]. (2004) 151 A Crim R 235 at 243-244 [63]. assault in the past and virtually continuous minor infractions. The [appellant] had reduced to one the number of guards on duty at the Units for reasons unrelated to prisoner safety. Importantly, the [appellant] had actual knowledge that the [respondent] was at risk. Nevertheless, it took no additional steps to protect him. Those in control and who knew that the [respondent] had been threatened did not even inform the guard at the Units (Mr Lehn) of this fact, and did not even provide the [respondent] with a more secure lock on his door. Nothing was done. In my view that was negligent." The appeal to this Court The appellant's principal submission in this Court is in substance that it had implemented at Silverwater Prison a reasonable system of incarceration which balanced two, sometimes competing objects, an enlightened approach to rehabilitation, and the security of the institution as a prison. The appellant argued that the means chosen of achieving these objects, the classification of prisoners, and the supervision of them according to that classification were reasonable, and had in practice operated satisfactorily. In particular, it was said, experience had shown that prisoners such as the respondent and those surrounding him in Silverwater, required little supervision and had not previously been responsible for assaults. The appellant pointed out that prisoners who were classified as C3 were permitted to take weekend, day and education leave. They could also work in the general community during the daytime. Silverwater was the only prison in New South Wales where Work Release Programmes were available. Such a programme was especially important to the respondent because he had mortgage payments to meet. And as he was keen to obtain treatment for paedophilia as soon as possible, the Programme offered him a further opportunity to obtain this. This last matter, and the references by the appellant to the documents that the respondent signed expressing his wish to stay at Silverwater and to participate in the Programme, carried an implication that in some way the respondent, rather than the appellant, was responsible for the injuries caused to him. Such submissions are not to be accepted. This is not a case to which the maxim of volenti non fit injuria is applicable. The respondent's apparently sincere desire for rehabilitation, and his application to be imprisoned at the only place where that desire could be achieved, could not relieve the appellant of the duty of care it owed to him. The respondent was not required to make a choice between rehabilitation and personal safety. It was the duty of the appellant to take reasonable care for the respondent whether he was participating in the Programme or was a differently classified prisoner. As to the minimal nature of the supervision of inmates housed in the Units at Silverwater, the appellant submitted that it was appropriate having regard to the C3 classification of all those living there. It had, the appellant submitted, been well established that they were persons who could be trusted. The appellant accepted, indeed contended, that enlightened modern penology requires that emphasis be placed upon rehabilitation and that it should not be, as a decision against it here would, penalized for seeking to achieve that end. The appellant submitted that Ipp JA in the Court of Appeal misused the existence, or knowledge, of risk as the basis for a finding that the appellant had a positive duty to take "additional steps" to alleviate it. In doing so, it was argued, his Honour did not indicate what additional steps should have been taken by the appellant, or evaluate whether any such additional steps were reasonably required in the circumstances. In so doing, the appellant contended, Ipp JA fell into an error of the kind which Gummow and Hayne JJ identified in Graham Barclay Oysters Pty Ltd v Ryan10, of formulating a duty of care retrospectively as an obligation purely to avoid the particular act or omission said to have caused loss11. Reliance was also placed upon what Gaudron J said in Bennett v Minister of Community Welfare12 that "a precaution is not classified as 'reasonable' unless it can be said that its performance would, in the ordinary course of events, avert the risk that called it into existence."13 The appellant then sought to emphasize that the primary judge had held at first instance that the assailants were "desperate" to make an attack upon the respondent. They carefully planned and executed it, without warning, concealing their identity in doing so, having earlier secreted iron and steel bars, and contravened the conditions of their curfew, all of which constituted breaches of prison rules. Each of the assailants therefore risked losing his own classification. Accordingly, it was argued, the measures in respect of which the appellant was 10 (2002) 211 CLR 540. 11 (2002) 211 CLR 540 at 611-612 [191]-[192]. 12 (1992) 176 CLR 408. 13 (1992) 176 CLR 408 at 422. found to be deficient by Ipp JA, of increased supervision and a secure lock on the respondent's door, would not, in any event, have prevented the attack on the respondent. Even the presence of more prison officers in the Units would not have been effective. There would still have been periods when the respondent was left unsupervised. Furthermore, the appellant submitted, even if the measures might have been effective, it would not have been reasonable to impose them upon it, having regard to the evidence of Mr Edwards, who had said this: "Once people move into unit accommodation and work release that sort of oversight and surveillance was absolutely minimal and it was usually because these people had passed through every possible check ... that we could come up with to determine that they were about as low risk of committing further offences in or out of gaol as we could estimate." The appellant's submissions continued, that as the respondent himself recognized, the appellant would have had to deny him a C3 classification and exclude him from the Programme in order to eliminate the risk. Action of this nature would have significant implications for the system of classification generally and especially for prisoners in some categories of which paedophiles formed one. The disposition of the appeal It is true that a prison authority, as with any other authority, is under no greater duty than to take reasonable care. But the content of the duty in relation to a prison and its inmates is obviously different from what it is in the general law-abiding community. A prison may immediately be contrasted with, for example, a shopping centre to which people lawfully resort, and at which they generally lawfully conduct themselves14. In a prison, the prison authority is charged with the custody and care of persons involuntarily held there. Violence is, to a lesser or a greater degree, often on the cards. No one except the authority can protect a target from the violence of other inmates15. Many of the people in prisons are there precisely because they present a danger, often a physical danger, to the community. It is also notorious that without close supervision some of the 14 Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 205 CLR 254. 15 The seriousness of risk of injury to prisoners and its consequences for criminal justice and the penal system appear from York v The Queen (2005) 79 ALJR 1919. prisoners would do grave physical injury to other prisoners. The respondent here did not simply rely upon the notorious fact that prisoners convicted of sexual offences against minors are at greater risk than other offenders: he proved that the appellant knew that he had been threatened and taunted by other prisoners, on that account, albeit to a somewhat lesser extent at Silverwater Prison than he might have been in the other institutions in which he had been imprisoned. the United States, federal constitutional considerations apart16, has long recognized the special situation of prisoners and the obligations of those having their custody. In a leading text on the law of torts it is said, with ample citation of authority17: the common law, "An affirmative obligation to use care to control the conduct of others may also be raised by a special relationship between the actor and the person injured. Thus where one stands in loco parentis, or is put in charge of persons under circumstances that deprive them of normal means of self-protection (eg, prisoners), he must use care to restrain the foreseeable dangerous conduct of third persons that unreasonably threatens his wards." In §320 of the Restatement of Torts, the reporter for which was Professor Prosser, it is said, with reference to a range of persons, including gaolers18: "One who is required by law to take or who voluntarily takes the custody of another under circumstances such as to deprive the other of his normal power of self-protection or to subject him to association with persons likely to harm him, is under a duty to exercise reasonable care so to control the conduct of third persons as to prevent them from intentionally harming the other or so conducting themselves as to create an unreasonable risk of harm to him, if the actor knows or has reason to know that he has the ability to control the conduct of the third persons, and 16 See Logan v United States 144 US 263 at 285 (1892). 17 Harper, James and Gray, The Law of Torts, 2nd ed (1986), vol 3, §18.7. 18 2d, vol 2, Div 2, "Negligence", Ch 12, "General Principles", (1965). knows or should know of the necessity and opportunity for exercising such control." The position in England is well summarized in Halsbury's Laws of England19: "The duty on those responsible for one of Her Majesty's prisons is to take reasonable care for the safety of those who are within, including the prisoners20. Actions will lie, for example, where a prisoner sustains injury as a result of the negligence of prison staff21; or at the hands of another prisoner in consequence of the negligent supervision of the prison authorities22, with greater care and supervision, to the extent that is 19 4th ed reissue, vol 36(2), par 565. 20 Ellis v Home Office [1953] 2 QB 135, [1953] 2 All ER 149 at 154, CA; Palmer v Home Office (1988) Guardian, 31 March, CA. 21 See, however, Knight v Home Office [1990] 3 All ER 237, 4 BMLR 85, in which Pill J held that the standard of care provided for a mentally ill prisoner detained in a prison hospital was not required to be as high as the standard of care provided in a psychiatric hospital outside prison since psychiatric and prison hospitals performed different functions and the duty of care had to be tailored to the act and function to be performed. See also Brooks v Home Office [1999] 2 FLR 33, QBD. As to the liability of the Home Office where a prisoner is held in intolerable conditions of confinement see R v Deputy Governor of Parkhurst Prison, ex p Hague [1992] 1 AC 58, sub nom Hague v Deputy Governor of Parkhurst Prison [1991] 3 All ER 733, HL. See also Toumia v Evans (1999) Times, 1 April, CA. 22 Ellis v Home Office [1953] 2 QB 135, [1953] 2 All ER 149, CA. There are a number of examples of cases where prisoners have sought (with greater or lesser success) to fix the prison authorities with liability in negligence in relation to injury caused by the violent acts of other prisoners: see eg D'Arcy v Prison Comrs [1956] Crim LR 56; Anderson v Home Office (1965) Times, 8 October; Egerton v Home Office [1978] Crim LR 494; Porterfield v Home Office (1988) Times, 9 March, Independent, 9 March; Palmer v Home Office (1988) Guardian, 31 March, CA; Steele v Northern Ireland Office [1988] 12 NIJB 1; H v Secretary of State for the Home Department (1992) Times, 7 May, 136 SJ 140, CA. See also Hartshorn v Home Office (21 January 1999, unreported), CA, in which liability in negligence was established were prison staff failed to take reasonable care to ensure that a non- (Footnote continues on next page) reasonable and practicable, being required of a prisoner known to be potentially at greater risk than other prisoners23; or if negligently put to work in conditions damaging to health24; or if inadequately instructed in the use of machinery25; or if injured as a result of defective premises26. The prison authorities also owe a duty of care to members of the public, and an action will lie where property is damaged by prisoners which results from negligence on the part of the authorities, but a wide latitude will be allowed the authorities in determining proper ways of dealing with inmates before liability is imposed27." As the respondent was a known likely target of other prisoners, the appellant was under a duty to adopt measures to reduce the risk of harm to the respondent. What measures did the appellant in fact adopt? Towards or for the protection of the respondent, the answer is, effectively, none. It simply relied on its system of classification, effectively treating it as a virtually infallible solution to such problems as might arise, and a somewhat perfunctory personal oversight effectively by one warder, only, during the night, of all of the prisoners in the Units. That the appellant solicited from the respondent a signed document in the nature of, but not effectual as, a release, or an acceptance of responsibility for his own safety and welfare at Silverwater, cannot avail the appellant. The contrary is statutory rule, designed to limit the opportunity for prisoners to assault other prisoners, was obeyed. 23 Egerton v Home Office [1978] Crim LR 494. 24 Pullen v Prison Comrs [1957] 3 All ER 470, [1957] 1 WLR 1186. ... 25 Ferguson v Home Office (1977) Times, 8 October, where damages were awarded in respect of injuries to a prisoner's hand. The duty applies even if the machine was not at the time being used in the interests of the prison authorities: Ferguson v Home Office supra. 26 Christofi v Home Office (1975) Times, 31 July, where a prisoner was awarded damages for injuries received as a result of a fall on a broken step. 27 Home Office v Dorset Yacht Co Ltd [1970] AC 1004, [1970] 2 All ER 294, HL. the case. The fact that the appellant invited the respondent to sign such a document shows that the appellant must have been aware that the respondent was, despite the classification of the other prisoners as relatively trustworthy, at greater risk than the others. This was not a case in which it was proved, or even contended that measures to ensure closer supervision of prisoners, were costly or so much more costly as not reasonably to be affordable28. Nor was it suggested that secure doors and locks could not have been provided. No reason was advanced why the respondent was allocated a room furthest away from the prison officer's station, an allocation which self-evidently, and as a matter of actual evidence from the psychologist Mr Edwards, increased the risk which the respondent ran. It is of relevance also that although the respondent had specifically requested a room close to the warder's station, no explanation was offered by the appellant as to how the request was dealt with and why such a room was not provided. And again, the appellant did not say how it was that the assailants were able to obtain, conceal and use the iron bars that they used to injure the respondent. It is clear that the appellant did truly place almost all of its trust in the system of classification, and what it hoped would flow from that. The Court of Appeal was right to hold that the appellant failed in its duty to the respondent. There was more than a mere foreseeable risk of injury to the respondent. There was a risk that had actually been expressly threatened. The risk, if it were to be, as it was, realized, was of considerable physical injury to the respondent. Such a risk, once known, called for the adoption of measures to prevent it. All of this is well established29. No effective measures were adopted. The respondent did actually point to measures which could reasonably have been undertaken but were not: closer and more frequent checking of prisoners; better and stronger locks and doors; checking for weapons; and, relocation of the respondent within the Units. The case was not one therefore of the kind which the appellant submitted it to be, of the recognition, but only retrospectively, of dangers not reasonably foreseeable and not capable of avoidance at the time. Nor was it a case in which the Court of Appeal failed to identify the measures which could and should have been taken to minimize the 28 Cekan v Haines (1990) 21 NSWLR 296 at 306-307, 314. 29 Wyong Shire Council v Shirt (1980) 146 CLR 40. risk to the respondent. Indeed, one of the appellant's witnesses had effectively identified one of the measures available, the one which had stopped the visits to the Silverwater Speedboat Club, that is, of better surveillance. That and the other measures identified by the Court of Appeal would have been likely in fact to obviate the risk to the respondent. There was no obligation upon the respondent to prove, as the appellant contended he should, that they would have guaranteed his safety. Reasonable care was enough. And that was missing, as the Court of Appeal rightly found. We would dismiss the appeal with costs.

HIGH COURT OF AUSTRALIA Matter No M144/2006 LEMALUOFUIFATU ALIPAPA TOFILAU APPELLANT AND THE QUEEN Matter No M145/2006 RESPONDENT APPELLANT AND THE QUEEN Matter No M146/2006 AND THE QUEEN Matter No M147/2006 RESPONDENT APPELLANT RESPONDENT APPELLANT AND THE QUEEN RESPONDENT Tofilau v The Queen Marks v The Queen Hill v The Queen Clarke v the Queen [2007] HCA 39 30 August 2007 M144/2006, M145/2006, M146/2006 & M147/2006 ORDER Each appeal is dismissed. On appeal from the Supreme Court of Victoria Representation O P Holdenson QC with L C Carter for the appellants in M144/2006 & M146/2006 (instructed by Victoria Legal Aid) P F Tehan QC with C B Boyce for the appellant in S147/2006 (instructed by G J Lyon SC with M J Croucher for the appellant in S145/2006 (instructed by Victoria Legal Aid) P A Coghlan QC with J D McArdle QC and S B McNicol for the respondents (instructed by Solicitor for Public Prosecutions (Vic)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Tofilau v The Queen; Marks v The Queen; Hill v The Queen; Clarke v The Queen Criminal law – Evidence – Confessions and admissions – Scenario evidence – Undercover police officers posing as a criminal gang used scenarios involving staged criminal conduct to gain the trust of persons suspected of committing a serious crime – On condition that the person tell the gang boss the truth about his prior criminal activity, the gang boss offered that person membership of the gang with concomitant material benefits and the prospect of illegally avoiding prosecution for prior crimes – Whether the resulting confessions were admissible. Criminal law – Evidence – Confessions and admissions – "Inducement rule" – History of the "inducement" requirement – Whether the promises made to the confessionalists were "inducements" – History of the "person in authority" requirement – Whether undercover police officers posing as gang members were "persons in authority" – Whether a person who represented himself as having the capacity to influence illegally a criminal prosecution was a "person in authority" – Whether a person must be known by the suspect to have actual lawful authority to influence the course of the prosecution to be a "person in authority". Criminal law – Evidence – Confessions and admissions – "Basal voluntariness" – History of the "basal voluntariness" rule – Meaning of "voluntariness" – Whether the use of deception by the police obviated "voluntariness" – Whether inducements obviated "voluntariness" – Whether in the circumstances the confessionalists' wills were overborne – Relevance of analogy to "duress". Criminal law – Evidence – Confessions and admissions – Discretionary grounds for exclusion – "Public policy" discretion – Whether the use of deception by the police was improper. Criminal law – Evidence – Confessions and admissions – Discretionary grounds for exclusion – Unfairness discretion – Whether in all the circumstances it was unfair to the confessionalist to use against him a confession obtained by police deception. Criminal law – Evidence – Confessions and admissions – Discretionary grounds for exclusion – Prejudice discretion – Whether the prejudicial impact of the circumstances in which the confession was obtained was greater than the probative value of the confession. Criminal law – Evidence – Confessions and admissions – Discretionary grounds for exclusion – Reliability discretion – Whether the circumstances in which the confession was made rendered the confession inherently unreliable. Words and phrases – "basal voluntariness", "duress", "free choice", "inducement", "oppression", "overborne", "person in authority", "right to silence", "scenario evidence", "scenario techniques", "unfairness", "voluntary". Evidence Act 1958 (Vic), s 149. GLEESON CJ. The appellants were suspected of having committed serious and violent crimes (murder). They were tricked by undercover police officers, posing as criminals, into confessing. They were tried and convicted. Their confessions were received in evidence. The technique of deception used by the police, and the details of the confessions, appear from the reasons of other members of the Court. The confessions, which were made in circumstances that supported rather than cast doubt upon their reliability, were obviously found by the trial juries to have been true. The issue in these appeals is whether the evidence of the confessions should have been excluded. All four appellants rely upon the rule of the common law that evidence of a confession (the rule covers all admissions, but we are concerned here with admissions that amounted, or for practical purposes amounted, to confessions) may not be received against an accused person unless it is shown to be voluntary. In this context, as in other legal contexts, the word "voluntary" may create uncertainty. There is, however, an aspect of the rule with a more specific focus. A confessional statement will be excluded from evidence as involuntary if it has been obtained from an accused either by fear of prejudice or hope of advantage, exercised or held out by a person in authority1. That particular and well- established form of involuntariness was described by Dixon J as "the classical ground for the rejection of confessions and [that which] looms largest in a consideration of the subject."2 Even so, it does not cover the field. In addition to the rule that requires a trial judge to exclude evidence of a confession that is not voluntary, there are discretionary principles according to which a trial judge may exclude evidence of a voluntary confession. Those principles have been stated in a number of decisions of this Court, and were summarised in R v Swaffield3, by Toohey, Gaudron and Gummow JJ, as covering three classes of case. The first is a case where it would be unfair to the accused to admit the statement. The relevant form of unfairness is related to the law's protection of the rights and privileges of the accused person. The second is a case where considerations of public policy, such as considerations that might be enlivened by improper police conduct, make it unacceptable to admit the statement. The third concerns the general power of a trial court to reject evidence on the ground that its prejudicial effect (that is to say, the danger of its misuse, not its inculpatory force) outweighs its probative value. Ibrahim v The King [1914] AC 599 at 609. 2 McDermott v The King (1948) 76 CLR 501 at 511-512. (1998) 192 CLR 159 at 189 [51]-[52]. The first two of those discretions were of potential relevance to these cases. They were invoked by the appellants at trial in the Supreme Court of Victoria, and in the Victorian Court of Appeal. The ability to invoke considerations of unfairness, and public policy, in support of an argument for exclusion of confessional evidence in the exercise of a judicial discretion limits the need to go beyond established principle in seeking to characterise the conduct of a confessionalist as involuntary. If what is really meant is that, the confession having been induced by some form of deception, it would be unfair to the accused (in the sense stated above) to receive it in evidence, or contrary to public policy to allow the deception to bear fruit, then existing principle brings discretion into play. There is no occasion to seek to extend the concept of voluntariness beyond its accepted limits in order to accommodate considerations of fairness and public policy. On the other hand, it is understandable that an accused would seek to invoke a rule of mandatory exclusion rather than to rely only upon discretionary judgment. Furthermore, the approach taken by appellate courts to the review of discretionary decisions may make it more difficult for a convicted person to challenge an unfavourable ruling4. This consideration will be even more compelling in a second appellate court, where an intermediate appellate court has reviewed, and affirmed, a trial judge's exercise of discretion. These forensic considerations were reflected in the course taken in argument in these appeals. Initially, all four appellants confined their arguments in this Court to the issue of voluntariness: both the narrower, more specific, aspect earlier identified, and the wider, less clearly defined aspect (referred to in argument, adapting an expression used by Dixon J in McDermott v The King5, as "basal voluntariness"). Under pressure of argument, one appellant relied as well on the discretionary principles. Concentrating on the mandatory rule of exclusion avoided the difficulty of overcoming discretionary judgments which had already been affirmed after appellate review. Tactically, it may have suited the appellants not to become too closely involved in the extent to which their complaints could be dealt with on discretionary grounds. In this connection, it is interesting to note the course of argument and decision in the two matters decided in Swaffield. Those cases involved confessions obtained by subterfuge and deception. They were dealt with according to principles of discretionary exclusion. If some of the arguments advanced in the present appeals were correct, then Swaffield and its related appeal would seem to have been dealt with according to the wrong principle. On the approach of at least three of the present appellants, they should have been dealt with under the rubric of mandatory exclusion of involuntary confessions. 4 House v The King (1936) 55 CLR 499 at 505. (1948) 76 CLR 501 at 512. Two further preliminary matters should be mentioned. First, the common law rules with which we are presently concerned apply, not only to confessions of guilt, but to all admissions sought to be used in evidence against an accused person at trial. Sometimes, an admission may be made in the course of an assertion of innocence. It may be an admission of a fact which is not seriously in dispute, which of itself is not inconsistent with innocence, but which the prosecution could not otherwise prove. The admission may have been made to any manner of person, and in any kind of circumstance. It may have been made in response to a mistake, a misrepresentation (either deliberate or innocent), to the pressure of events or circumstances, or to mere inadvertence. It may have been made in circumstances where issues of legal rights or consequences, or considerations of choice either to speak or remain silent, never entered the mind of the maker. It would be clearly wrong to suggest that the only kinds of admission used in evidence at criminal trials are those made to police officers in a context of a conscious decision not to exercise a "right to silence". Admissions, which may turn out to be very damaging, are often made in circumstances where the maker of the admission is unconcerned with legalities, and may not even realise the significance that later will be attached to what is said. Secondly, the use by the police of deception in the hope of eliciting admissions is not new. The particular technique of deception adopted in the present cases seems to have been imported into Australia from Canada. Since these trials, it has been reported in the media. Presumably, unless Australians suspected of serious crime are unaware of what is contained in the newspapers, it has a limited life expectancy. It would, however, be erroneous to characterise these appeals as raising a completely novel problem demanding reconsideration of established legal principle. The use of undercover police operatives always involves deception. Such operatives are undercover precisely because they are trying to deceive somebody about something. The technique of deception used in Deokinanan v The Queen6, where the police put an accused person's friend in a prison cell with the accused in the hope of obtaining a confession, is common. These days, the friend would probably be equipped with a secret recording device. The Privy Council held that the confession was voluntary and admissible. All forms of covert surveillance, many of them authorised (subject to safeguards, such as a requirement for judicial approval) by statute, involve a kind of deception. Interception and recording of telephone conversations often produces evidence of admissions tendered at a criminal trial, as well as circumstantial or direct evidence of criminal activity. The parties to those conversations speak in the erroneous belief that they are not being overheard. They have no opportunity to consult a lawyer, or to take advice on what they should or should not say. They are not given any warning that what they say may be used against them. They do not waive any right to silence. Yet, if a suspect, in an intercepted and secretly recorded conversation, makes an admission, that admission is ordinarily and rightly regarded as voluntary. At least, it is not regarded as involuntary simply because the person making the admission is the victim of a form of deception. The concept of voluntariness, which is significant in many legal contexts, is protean. This was explained by Windeyer J in Ryan v The Queen7 to be "partly because of ambiguities in the word 'voluntary' and its supposed synonyms, partly because of imprecise, but inveterate, distinctions which have long dominated men's ideas concerning the working of the human mind". Even the use of terms such as "mind" and "will", or "freedom of choice", may provoke scientific or philosophical protest. Generally speaking, however, the law, as a normative science which must evaluate human conduct for practical purposes, accepts certain working hypotheses, one of which is the existence of free will. It judges the conduct of people upon assumptions of personal autonomy that may be rejected by a psychiatrist or a philosopher8. Conscious of this problem, judges, when they speak of confessions as voluntary, or involuntary, often seek to explain what they mean. In Cornelius v The King9, Dixon, Evatt and McTiernan JJ gave as an example of an involuntary statement one that is given in consequence of a threat made, or a promise of advantage given, by a person in authority. In the preceding sentence, however, they stated a wider proposition: "If [a statement] is made as a result of violence, intimidation, or of fear, it is not voluntary." Similarly, some years later, in his judgment in McDermott, Dixon J referred both to the "definite rule" excluding statements resulting from threats or inducements by persons in authority, and also to a wider concept. He said that to say that a statement has been voluntarily made means "that it has been made in the exercise of [a person's] free choice". He amplified this: "If he speaks because he is overborne, his confessional statement cannot be received in evidence and it does not matter by what means he has been overborne. If his statement is the result of duress, intimidation, persistent importunity, or sustained or undue insistence or pressure, it cannot be voluntary."10 An example of the dangers involved in giving a broad and colloquial meaning to the concept of voluntariness is provided by cases dealing with the admissibility of statements made by people under a legal obligation to answer questions. The courts have rejected arguments that such statements, not being made in the exercise of a free choice to speak or remain silent, were involuntary. (1967) 121 CLR 205 at 244. cf Azar (1991) 56 A Crim R 414 at 418-419. (1936) 55 CLR 235 at 245. 10 (1948) 76 CLR 501 at 511. One such case was R v Kempley11, where the Court of Criminal Appeal of New South Wales held that admissions made under compulsory interrogation pursuant to certain regulations could be received in evidence in a later prosecution, and were not involuntary. The case went to this Court, where special leave to appeal was refused. Latham CJ said12: "The reasons for excluding statements obtained from accused persons by inducements consisting in a threat or promise by a person in authority were that it was probable that statements so induced might be false, and further that it was improper for such persons to use their authority to bring about confessions by accused persons. But it could not be held by a court of law that compliance with a law requiring true answers and designed to elicit true answers should be assumed to be likely to produce false answers ... Thus it could not be said that the calling of the attention of a person to a duty imposed upon him by law to answer truly was a threat or was improper in any sense."13 That reasoning is directed to the narrower, "definite" rule, rather than the wider concept of voluntariness, but the outcome of the case is instructive. Latham CJ's identification of considerations of reliability as the primary, but not the sole, rationale for the exclusion of involuntary statements is consistent with history and authority. The addition of the reference to impropriety in the form of abuse of authority to extract confessions is interesting in the light of later High Court authority, such as Bunning v Cross14 and Swaffield, concerning discretionary exclusion. Statements often are made under weaker, but nevertheless real, forms of legal compulsion. Membership of a professional association, for example, might oblige a person to answer questions posed by a governing professional body. Again, a person may be under a contractual obligation to furnish information to another. A recent example in the New South Wales Court of Criminal Appeal is R v Frangulis15, where the owner of a building destroyed by fire was advised by his solicitor that he was required by an insurance policy to provide information to the insurance company about the circumstances of the fire. The information 11 (1944) 44 SR (NSW) 416. 12 Kempley v The King (1944) 18 ALJ 118 at 122. 13 See also R v Travers (1957) 58 SR (NSW) 85; R v Zion [1986] VR 609. 14 (1978) 141 CLR 54. 15 [2006] NSWCCA 363. provided did not involve a confession of guilt, but it contained admissions which were later used in evidence against the insured, who was convicted of arson. It could hardly be denied that such admissions were voluntary, but there was, no doubt, a sense in which the insured's freedom to speak or to remain silent was, or was at least perceived by the insured to be, impaired. The "definite" rule Reference has been made above to the passage in his judgment in McDermott in which Dixon J referred to the general requirement of voluntariness for the admissibility of confessional statements and then added that it was "also a definite rule" that a statement cannot be voluntary if it is preceded by an inducement held out by a person in authority. The context reveals that Dixon J used the word "definite", not for emphasis, but as meaning precise or specific, in contrast to the general and less specific principle to which he had earlier referred. The first argument of each of the appellants in the present case was based upon this definite rule. The confessions made by the appellants were procured by inducements held out to them. The question is whether the people who held out the inducements, police officers posing as criminals, were persons in authority. This question was considered recently by the Supreme Court of Canada, in a case indistinguishable from the present, R v Grandinetti16, and answered in the negative. The decision was unanimous. The reasons of the Court were delivered by Abella J. This Court, of course, is bound to form its own opinion on the matter, but the reasons of Abella J are persuasive. A similar question had been considered previously by the Supreme Court of Canada. In R v Hodgson17, seven members of that Court gave the same rationale for the rule of exclusion as had been given in this Court by Latham CJ in Kempley; concerns about unreliability (false confessions) and the need to guard against improper state coercion. Citing Hodgson, Abella J said in "The underlying rationale of the 'person in authority' analysis is to avoid the unfairness and unreliability of admitting statements made when the accused believes himself or herself to be under pressure from the uniquely coercive power of the state." 16 [2005] 1 SCR 27. 17 [1998] 2 SCR 449. 18 [2005] 1 SCR 27 at 38 [35]. It was conceded in Grandinetti that undercover police officers are usually not persons in authority within the rule, because the critical element is the perception of the person making the statement. That concession also represents the law in Australia. The unusual feature of Grandinetti, and of the present cases, is that the undercover police officers, although posing as persons who were not persons in authority, represented that they had influence with other persons who could influence the investigation and prosecution of the relevant offence. The representations expressly or by implication indicated that those whom the undercover officers could influence were themselves corrupt. The belief of the maker of the confessional statement was that he was being offered inducements, not by police officers, but by criminals who were in a position to influence certain corrupt police officers. The Supreme Court of Canada held, and I respectfully agree, that in such circumstances "the state's coercive power is not engaged."19 The appellants did not believe the makers of the inducements to be persons in authority, or to be acting as agents of persons in authority. Their supposed capacity to exercise corrupt influence over others who were persons in authority does not alter their character as understood by the appellants. A representation (true or false) as to a capacity to influence corrupt officials could be made by anybody, but it would not constitute the maker of the representation a person in authority. The definite rule does not avail the appellants. The wider principle In view of the obvious possibility that this Court would reach the same conclusion as the Supreme Court of Canada in Grandinetti, the appellants next supported mandatory exclusion of their confessional statements by reference to the wider principle, which they called "basal voluntariness". This was a reference to a fundamental principle concerning voluntariness, of which the "definite rule" considered above is a particular, although the most common, application. It may be that the definite rule ought to be regarded as a response of the law of evidence to some extent analogous to the response of the law of contract to problems of defining voluntariness when dealing with questions of duress. In Barton v Armstrong20, Lord Wilberforce and Lord Simon of Glaisdale said: "The action is one to set aside an apparently complete and valid agreement on the ground of duress. The basis of the plaintiff's claim is, 19 [2005] 1 SCR 27 at 42 [44]. 20 [1976] AC 104 at 121 (references omitted). thus, that though there was apparent consent there was no true consent to the agreement: that the agreement was not voluntary. This involves consideration of what the law regards as voluntary, or its opposite; for in life, including the life of commerce and finance, many acts are done under pressure, sometimes overwhelming pressure, so that one can say that the actor had no choice but to act. Absence of choice in this sense does not negate consent in law: for this the pressure must be one of a kind which the law does not regard as legitimate. Thus, out of the various means by which consent may be obtained – advice, persuasion, influence, inducement, representation, commercial pressure – the law has come to select some which it will not accept as a reason for voluntary action: fraud, abuse of relation of confidence, undue influence, duress or coercion. In this the law, under the influence of equity, has developed from the old common law conception of duress – threat to life and limb – and it has arrived at the modern generalisation expressed by Holmes J – 'subjected to an improper motive for action'". The common law of evidence in Australia has treated the definite rule as a specification of a particular form of conduct, involving the application of a certain kind of coercive force external to a confessionalist, which it will not accept as a reason for voluntary action. At the same time, it has declined to limit itself by treating that as the only form of conduct that will destroy or overwhelm the freedom of choice which it considers necessary to make conduct voluntary. (Some Australian jurisdictions have enacted legislation which deals somewhat differently with the matter of admissions, but such legislation is not of present concern.) The law treats as voluntary a great deal of conduct about which a person, speaking colloquially, may say that he or she had no choice. Since the original rationale for the principle of exclusion of involuntary statements was concern about the unreliability of statements made under coercion, that will sometimes be a useful guide in making a judgment about what kind of conduct will be taken to render a statement involuntary. It is, however, of no assistance to the appellants in this case, because the deception practised upon them was not such as was likely to elicit a false confession. To the extent that abuse of the state's coercive authority is another part of the rationale for the exclusionary rule, there are two difficulties for the appellants. The first has already been mentioned in dealing with the definite rule: the appellants thought they were talking to criminals, not police officers. The second is that deception is a very common method of seeking to obtain confessions from people suspected of crime. For most of the twentieth century, the Crimes Act 1900 (NSW), in s 410, excluded evidence of confessions induced by untrue (meaning deliberately false21) representations made by persons in authority. That legislation was unusual, and went beyond the common law. Thus, in Adams, Criminal Law and Practice in New Zealand22, the following appeared: "The mere fact that a confession, otherwise voluntary, has been obtained by artifice, misrepresentation, breach of faith, or other underhand means, will not render it inadmissible. In New South Wales, under s 410 of the Crimes Act 1900, a confession is inadmissible if induced by any untrue representation made by the prosecutor or a person in authority. But no trace of any such rule is to be found in England or New Zealand." Since possible forms of deception are bounded only by human imagination, and human gullibility, it would be dangerous to assert that no form of deception could deprive conduct of its voluntary character. Most deception used in the hope of eliciting admissions, however, including the form used in the present case, is calculated to induce a person to choose to reveal information that otherwise would be concealed. The appellants were subjected to powerful psychological pressure, but it is not unusual for people to reveal old secrets under pressures that are no less compelling. The law attempts to distinguish between external pressures and pressures personal to the confessionalist23. That itself may be a distinction based on pragmatic rather than scientific considerations. The effect of external forces and circumstances on an individual is likely to depend on characteristics personal to the individual. That which a person of one disposition may regard as unbearable pressure may be a matter of indifference to another. The physical or emotional characteristics of a person, or that person's background or circumstances, will always be material to the effect of externally imposed pressure. The burden of guilt may weigh heavily on one person but may be borne lightly by another. References were made in argument to the appellants' "right to silence", and to the effect on that right of the techniques adopted by the undercover police. As Lord Mustill pointed out in R v Director of Serious Fraud Office, Ex parte Smith24, that expression "refers to a disparate group of immunities, which differ in nature, origin, incidence and importance, and also as to the extent to which they have already been encroached upon by statute." It is not a single principle. 21 R v Connors (1990) 20 NSWLR 438. 22 2nd ed (1971) at 988. 23 Collins v The Queen (1980) 31 ALR 257 at 307 per Brennan J. 24 [1993] AC 1 at 30. It is a convenient shorthand reference to a collection of principles and rules, some substantive and some procedural. If it is said that there has been an infringement of a person's right to silence, then it is usually necessary to identify the particular legal rule involved and to explain the nature of the infringement by reference to that rule. The tendency in argument in the present case was to use the shorthand description to create an aura of inviolability around the appellants' guilty secrets, and then to take the further step of characterising the tricking of the appellants into deciding to reveal those secrets as an overbearing of the will. In answer to this line of reasoning it must again be observed that many forms of undercover police activity, and of covert surveillance, involve attempts to gain information from people who, if they were aware of what was going on, would remain inactive or silent. There is a sense in which it can be said that intercepting a telephone conversation, or secretly recording an interview, always deprives a person of the opportunity to remain silent in circumstances where, if the person had realised that he or she was under observation, the person would have remained silent. That does not mean that there has been an infringement of one of the legal rules which together make up the right to silence. Nor does it mean that what is being said in the conversation is involuntary. The argument seems to equate the right to silence with a right of privacy, and to treat as involuntary any statement that is made without a fully-informed appreciation of the possible consequences. Neither step is consistent with legal principle. In Basto v The Queen25, Dixon CJ, Webb, Fullagar, Kitto and Taylor JJ described s 410 of the Crimes Act 1900 (NSW) as a "statutory extension of ... common law doctrine". Yet if the argument for the appellants in the present case were correct it was not an extension at all; fraudulent misrepresentations would vitiate consent and result in involuntariness. The argument for the appellants proves too much. If the deception practised upon the appellants rendered their statements involuntary, then many other forms of deception to which people suspected of crime are subjected will have the same consequence. The wills of the appellants were not overborne. Their statements were, in a legal sense, voluntary. There remain, however, the discretionary grounds relied upon by one appellant. There, questions of unfairness, including unfair derogation from legal rights, and matters of public policy, including an evaluation of police conduct, are important. 25 (1954) 91 CLR 628 at 640. Discretion The discretionary arguments were strongly relied on by all appellants at trial and in the Court of Appeal. However, appellate review of judicial discretion, in accordance with the principles stated in House v The King26, is not at large. I agree with what is said on the subject in the reasons of Callinan, Heydon and Crennan JJ and have nothing to add. Conclusion The appeals should be dismissed. 26 (1936) 55 CLR 499. GUMMOW AND HAYNE JJ. Undercover police, posing as criminals, tell a murder suspect that, to join their gang and profit from their activities, he must tell their boss the truth about his involvement in the murder. They tell him that, if he does that, the boss can and will make any problems "go away". The undercover police play out various scenarios designed to show the suspect how successful and powerful they are as criminals. Any initial protestations of innocence by the suspect are met with insistence upon the need to tell the truth because charging and conviction are inevitable if the gang's help is rejected. Is the suspect's subsequent confession to those who play the roles of boss and gang members a voluntary confession? This is the central issue that arises in each of these appeals. Although the facts of each case differ in their detail, they raise the same legal issue, and it is to be resolved in the same way. In each case the appellant's confession was rightly held in the courts below27 to have been made voluntarily. There are three separate, but overlapping, inquiries that may have to be made in deciding whether evidence of an out-of-court confessional statement is admissible28. First, there is the question, commonly described as a question of "voluntariness", presented when the confession in issue was made to someone identified as a "person in authority". Second, there may be the consideration of exclusion of evidence of the confession based upon notions of "basal voluntariness"29. Finally, there is the discretion to exclude evidence of the confession for reasons of fairness, reliability, probative value or public policy30. The first question, the question of "voluntariness", requires examination of whether the statement in issue was made to a person known or believed by the speaker to be a person in authority. In the present cases, because each appellant neither knew nor believed that those to whom he was speaking were police (or other persons having lawful authority to affect the course of the investigation of 27 R v Tofilau (2003) 13 VR 1; R v Tofilau (No 2) (2006) 13 VR 28; R v Hill [2004] VSC 293; R v Hill [2006] VSCA 41; R v Clarke [2004] VSC 541; R v Clarke [2006] VSCA 43; R v Marks (2004) 150 A Crim R 212; R v Marks [2006] VSCA 28 R v Swaffield (1998) 192 CLR 159 at 188-189 [50]-[52] per Toohey, Gaudron and 29 McDermott v The King (1948) 76 CLR 501 at 511-512 per Dixon J. 30 Swaffield (1998) 192 CLR 159 at 188-189 [50]-[52], 197 [78] per Toohey, or prosecution for the offence to which the confession related) the particular rules about confessional statements to persons in authority were not engaged. The central inquiry in each of the present cases concerns the second question – the question described as "basal voluntariness". In none of the present cases was there compulsion of the kind that would deny "basal voluntariness". In each case, the appellant could and did choose not only whether to say anything about the murder, but also what he said about that subject. That he spoke at all because he thought that he would profit from doing so does not mean that he was not free to choose whether he spoke or remained silent about the murder. His statements were made voluntarily. In only one of the present cases (the matter of Clarke) was it submitted that it was necessary to consider the third issue which may arise in connection with confessions – the discretion to exclude evidence of the out-of-court statement alleged to constitute or contain a confession. It was said, in Clarke, that the confession to undercover police should have been excluded because it was unfairly or inappropriately obtained by or on behalf of investigating authorities. This contention should be rejected. It is convenient to turn at once to a consideration of the origin and content of the applicable principles. Once that is done, so much of the facts of the individual cases can be set out as is necessary to permit consideration of the application of those principles. Some important matters of history Proper understanding of the principles governing "voluntariness" and "basal voluntariness" requires some understanding of the history of the development of the common law rules about the admissibility of evidence of out-of-court confessional statements. The common law rule excluding evidence of certain out-of-court confessional statements was originally founded only in considerations of the reliability of the evidence. The rule was predicated upon the presumption that only a voluntary confession is reliable. The essential premise was that a person does not act against self-interest. In the 18th century, reliability was understood to be the only rationale for the rule. So much was made clear in R v Warickshall31 where it was said that: 31 (1783) 1 Leach 263 at 263-264 [168 ER 234 at 234-235]. "It is a mistaken notion, that the evidence of confessions and facts which have been obtained from prisoners by promises or threats, is to be rejected from a regard to public faith: no such rule ever prevailed. The idea is novel in theory, and would be as dangerous in practice as it is repugnant to the general principles of criminal law. Confessions are received in evidence, or rejected as inadmissible, under a consideration whether they are or are not intitled to credit. A free and voluntary confession is deserving of the highest credit, because it is presumed to flow from the strongest sense of guilt, and therefore it is admitted as proof of the crime to which it refers; but a confession forced from the mind by the flattery of hope, or by the torture of fear, comes in so questionable a shape when it is to be considered as the evidence of guilt, that no credit ought to be given to it; and therefore it is rejected." (emphasis added) The 18th century focus upon reliability is confirmed when it is noticed that, in Warickshall, the principle that was stated was expressly confined to the exclusion of evidence of what had been said by the accused. The Court in Warickshall went on to say32 that: "This principle respecting confessions has no application whatever as to the admission or rejection of facts, whether the knowledge of them be obtained in consequence of an extorted confession, or whether it arises from any other source; for a fact, if it exist at all, must exist invariably in the same manner, whether the confession from which it is derived be in other respects true or false." (emphasis added) Subsequent development of the common law regulating the exclusion of evidence of out-of-court confessions was, at least for a time, informed wholly by considerations of reliability. Much of that development of the common law was directed to articulating the circumstances in which evidence of statements made to persons in authority were to be excluded. But it is important to recognise that "voluntariness" was used at this time as the means of determining whether the evidence was not so unreliable that it should be excluded from consideration by the jury. That is, a class of cases was identified in which evidence of what had been said out of court was to be rejected because, as a class, those cases were thought likely to have produced an unreliable confession. Voluntariness, for its own sake, had no significance. These early developments of the law relating to confessions had little if anything to do with the privilege against self-incrimination. The development of 32 (1783) 1 Leach 263 at 264 [168 ER 234 at 235]. law relating the independently33. that privilege had separate roots and developed The law, as understood in the middle of the 19th century, was stated in the first edition of Best on Evidence, published in 1849, as being34 that: "Self-disserving evidence is not always receivable in criminal cases, as it is in civil. There is this condition precedent to its admissibility, that the party against whom it is adduced must be shown to have supplied it voluntarily, or at least freely. ... [T]he law on the subject as it stands at present is merely that every confession or criminative statement of any kind, which either has been extracted by any species of physical torture, coercion, or duress of imprisonment; or been made in consequence of inducements held out to the accused, by any person in whose custody he is, or who has any lawful authority, judicial or otherwise, over his person or the charge against him, ought to be rejected." This statement of the law was not inconsistent with what Parke B was to say, a few years later, in R v Baldry35: "By the law of England, in order to render a confession admissible in evidence it must be perfectly voluntary; and there is no doubt that any inducement in the nature of a promise or of a threat held out by a person in authority, vitiates a confession." The way in which the requirement of an inducement by a person in authority had been understood before the decision in Baldry was not then without controversy. Not least was that so because cautions against saying anything in response to official questioning had been held36 to be a form of inducement. In Baldry, Parke B said37 that the rule about inducements had "been extended quite too far, and that justice and common sense have, too frequently, been sacrificed 33 Morgan, "The Privilege Against Self-Incrimination", (1949) 34 Minnesota Law Review 1. 34 Best, A Treatise on the Principles of Evidence and Practice as to Proofs in Courts of Common Law, (1849) at 418-419. 35 (1852) 2 Den 430 at 444-445 [169 ER 568 at 574]. 36 R v Drew (1837) 8 Car & P 140 [173 ER 433]; R v Morton (1843) 2 M & Rob 514 37 (1852) 2 Den 430 at 445 [169 ER 568 at 574]. at the shrine of mercy". But leaving aside these controversies about the particular content that was then given to the rules governing the admissibility of evidence of out-of-court confessional statements made to persons in authority, the rules remained rooted in considerations of reliability. Indeed the burden of the criticism made by Parke B in Baldry of earlier decisions about what was an inducement by a person in authority was that the consequence of the earlier decisions was to exclude evidence that was not likely to be unreliable. The way in which Parke B stated the rule in Baldry was consistent with the need to make a distinct inquiry about "basal voluntariness". And that understanding of the rule stated by Parke B would have been consistent with what had earlier been written on the subject in the first edition of Best on Evidence. But subsequent developments in the law relating to confessions suggest strongly that the rules stated by Parke B were later understood as a single rule concerned only with statements to persons in authority. Indeed it is the statement of Parke B in Baldry that has subsequently been identified38 as the point at which the requirement of an inducement by a person in authority became an essential part of the test. And, as will later appear, it was not until this Court's decision in McDermott v The King39 that the overarching principle of voluntariness was again identified as encompassing the consideration of not only inducements offered by persons in authority but also "basal voluntariness". Yet it is to be observed that the formulation in successive editions of Best on Evidence of the relevant principles remained substantially unchanged through the latter half of the 19th century and into editions published as late as 192240. The rule about confessional statements to persons in authority remains. A confession made following a promise or threat by a person in authority is inadmissible. As was said in the advice of the Privy Council in Ibrahim v The King41, a case sometimes treated42 as the origin of much of the modern Australian law relating to the admissibility of confessions43: 38 See, for example, Cross and Tapper on Evidence, 8th ed (1995) at 665. 39 (1948) 76 CLR 501. 40 Phipson (ed), The Principles of the Law of Evidence, 12th ed (1922) at 472. 42 See, for example, McDermott (1948) 76 CLR 501 at 503-504. 43 [1914] AC 599 at 609. "It has long been established as a positive rule of English criminal law, that no statement by an accused is admissible in evidence against him unless it is shewn by the prosecution to have been a voluntary statement, in the sense that it has not been obtained from him either by fear of prejudice or hope of advantage exercised or held out by a person in authority." Whether, as that opinion suggests44, the principle "is as old as Lord Hale" need not be considered. In the first part of the 20th century, the rationale for the common law rules excluding evidence of certain out-of-court confessional statements was still understood to be reliability. Wigmore, writing in the second edition of his work on Evidence45, published in 1923, treated reliability as not simply the central, but the only, rationale for the common law rules relating to confessions. That author "The principle upon which a confession is treated as sometimes inadmissible is that under certain conditions it becomes untrustworthy as testimony. ... This theory, while developing different and inconsistent practical tests at the hands of various Courts, seems to have been generally accepted as the underlying and fundamental principle since the first introduction of any doctrine about the inadmissibility of confessions." Wigmore denied47 that the exclusionary rules could rightly be founded in any considerations other than considerations of reliability. He expressly rejected the notions that the rules were to be understood as related to breach of confidence or of good faith, or were to be engaged because of illegality in the method of obtaining the confession, or in the speaker's situation at the time of making it, or because of any connection with the privilege against self-incrimination. Yet it is clear that during the 20th century there was a major conceptual shift in the rationale for the law in this area. First, there was introduced a 44 [1914] AC 599 at 609-610. 45 A Treatise on the Anglo-American System of Evidence in Trials at Common Law, 2nd ed (1923), vol 2 at 139-142. 46 A Treatise on the Anglo-American System of Evidence in Trials at Common Law, 2nd ed (1923), vol 2 at 139-140. 47 A Treatise on the Anglo-American System of Evidence in Trials at Common Law, 2nd ed (1923), vol 2 at 142-144. concern for self-determination as encapsulated by the maxim nemo debet prodere se ipsum (no one can be required to be his own betrayer or, in what Lord Diplock said48 was "its popular English mistranslation 'the right to silence'"). It has been argued that this was a conflation, perhaps based on confusion, of the traditional requirement for voluntariness to determine reliability and the privilege against self-incrimination49. Second, there emerged a concern to regulate police conduct by excluding evidence obtained by inappropriate police action. There would seem little doubt that the latter concern was linked to the growth of a professional police force in the latter half of the 19th century and was both reflected in and grew out of the introduction of the Judges Rules in England in 191250. However this may be, by the end of the 20th century, three rationales had been propounded51 to support the rule excluding evidence of an out-of-court confession made in response to some threat or inducement made or offered by a person in authority: reliability, self-determination and regulation of police conduct. It may be that the way in which the law has developed in other jurisdictions, notably Canada52 and England53, before statutory intervention54, may best be understood as the rearticulation of applicable principles in ways intended to accommodate application of these other rationales to the exclusion of certain kinds of confessional evidence. In particular, the treatment in those jurisdictions of the idea of "inducement" (and, perhaps, "person in authority") may owe much to accommodating principles of self-determination and police 48 See, for example, R v Sang [1980] AC 402 at 436. 49 Godsey, "Rethinking the Involuntary Confession Rule: Toward a Workable Test for Identifying Compelled Self-Incrimination", (2005) 93 California Law Review 465 at 477-478; Bram v United States 168 US 532 (1897). 50 Framed or approved by the judges in England, for the guidance of the police in their inquiries: R v Voisin [1918] 1 KB 531 at 539; Archbold, Pleading, Evidence & Practice in Criminal Cases, 28th ed (1931) at 406. 51 See, for example, DPP v Ping Lin [1976] AC 574 at 595 per Lord Morris of Borth-y-Gest, 607 per Lord Salmon; Lam Chi-Ming v The Queen [1991] 2 AC 212 52 R v Hodgson [1998] 2 SCR 449; R v Oickle [2000] 2 SCR 3; R v Grandinetti [2005] 1 SCR 27. 53 DPP v Ping Lin [1976] AC 574 at 595 per Lord Morris of Borth-y-Gest, 607 per Lord Salmon; Lam Chi-Ming v The Queen [1991] 2 AC 212 at 217-219. 54 Police and Criminal Evidence Act 1984 (UK). regulation in a single test originally informed only by considerations of reliability. Whether that is so need not be decided. For present purposes, it is important to notice that the common law in Australia has developed in and since McDermott by identifying the three overlapping rules mentioned earlier in these reasons. Those rules deal with confessional statements made to persons in authority, but also engage the considerations described as "basal voluntariness" and the application of the discretionary principles earlier mentioned. Because the common law in Australia has developed in this way it is neither necessary nor appropriate to extend the concept of "person in authority" beyond those persons known or believed by the confessionalist to have lawful authority to affect the course of the investigation of or prosecution for the offence in question55. In the present matters, the focus falls upon "basal voluntariness". Basal voluntariness It is a definite rule of the common law of Australia that a confession made in response to a threat or inducement by a person in authority is inadmissible. But it is also a definite rule that a confession must be made voluntarily before evidence may be given of it. This latter rule, described as "basal voluntariness", derives directly from the common law principles in Warickshall where voluntariness was used as the touchstone of reliability. But that is not to be understood as suggesting that the common law has not been further developed. In his dissenting speech concerning the existence of a defence of duress to a charge of murder, the subject with which the House of Lords was concerned in Director of Public Prosecutions for Northern Ireland v Lynch56, Lord Simon of Glaisdale pointed to the "chaotic terminology" in the classification of conduct as voluntary or involuntary for purposes of the criminal law. His Lordship said57: "Will, volition, motive, purpose, object, view, intention, intent, specific intent or intention, wish, desire; necessity, coercion, compulsion, duress – such terms, which do indeed overlap in certain contexts, seem frequently to be used interchangeably, without definition, and regardless that in some cases the legal usage is a term of art differing from the popular usage. As 55 cf Grandinetti [2005] 1 SCR 27 at 39-42 [38]-[44]. 56 [1975] AC 653. Lynch was subsequently overruled in R v Howe [1987] AC 417. 57 [1975] AC 653 at 688. if this were not enough, Latin expressions which are themselves ambiguous, and often overlap more than one of the English terms, have been freely used – especially animus and (most question-begging of all) mens rea." What can be said for the purposes of the present appeal is that in legal discourse the terms "voluntary", "voluntariness" and cognate terms take their colour from the particular context and purpose in which they are used. Several contrasting examples may be given from the civil and criminal law. In Ryan v The Queen58, Windeyer J, when considering the proposition that the only acts punishable were voluntary acts of the accused, remarked: "The word 'involuntary' is sometimes used as meaning an act done seemingly without the conscious exercise of the will, an 'unwilled' act: sometimes as meaning an act done 'unwillingly', that is by the conscious exercise of the will, but reluctantly or under duress so that it was not a 'wilful' act." The plea of non est factum which puts in issue the execution of an instrument by the defendant, who alleges the absence of a consenting mind, is kept within narrow limits to allow for the significance attached by third parties to the presence of a signature upon a document59. On the other hand, where an alienation of property is set aside on the ground of undue influence, the law responds to "an unconscientious use of any special capacity or opportunity that may exist or arise of affecting the alienor's will or freedom of judgment in reference to such a matter". The words are those of Dixon J in Johnson v Buttress60. When Dixon J thereafter in McDermott61 came to deal with "basal voluntariness" in the context of the law of evidence he used, as these reasons will show, different terms. What emerges are two general propositions, supported by what was said by Lord Wilberforce in Lynch62 with reference to Barton v Armstrong63. The first 58 (1967) 121 CLR 205 at 244. 59 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at 182-183 60 (1936) 56 CLR 113 at 134. 61 (1948) 76 CLR 501 at 515. 62 [1975] AC 653 at 680. is that only some of the means by which consent to act or speak may be obtained are classified unacceptable for the attribution of legal consequences. The second is that what the law accepts in one field of legal discourse it may regard as unsatisfactory in another. When one turns to the common law respecting the inadmissibility of some confessional statements, it must first be said that the common law tests of voluntariness have never required a subjective inquiry into the mind of the confessionalist to determine why it was that he or she made the statement of which evidence is to be given. Rather, subject to what later is said about the discretion to reject confessional evidence, the common law rules have sought to operate by excluding evidence from consideration of the tribunal of fact that is deemed so unreliable as a class that it should not be available for consideration. The exclusionary effect of the rules is important. Although it is for the prosecution to demonstrate64 that a confession was made voluntarily before it becomes admissible, the rules are essentially exclusionary in character. The rules deal only with the admissibility of evidence of out-of-court confessional statements. If the evidence is admitted, it remains open for the confessionalist to argue, and for the tribunal of fact to accept, that, even if the statement was made, it is not reliable. To the extent to which questions of fairness are distinct from reliability, and to the extent to which questions of controlling police conduct and methods are relevant, they are best dealt with under the discretion. Questions of basal voluntariness are to be understood as informed only by considerations of reliability of the evidence concerned. Do the circumstances in which the evidence was obtained fall into the category of cases which the law classifies as so likely to produce unreliable evidence that the evidence should be excluded from consideration by the tribunal of fact? In order to make good the propositions just stated, it is necessary to consider what was said in McDermott. The reasons of Dixon J in McDermott65 have rightly been taken to be the authoritative statement of the common law of Australia on the admissibility of confessions. In McDermott, the Court decided66 that, apart from special statutory 63 [1976] AC 104 at 125. 64 R v Lee (1950) 82 CLR 133 at 144. 65 (1948) 76 CLR 501. 66 (1948) 76 CLR 501 at 515. provisions like what is now s 149 of the Evidence Act 1958 (Vic), a judge may exclude evidence of a confessional statement if "improperly procured by officers of police" even if "the strict rules of law, common law and statutory," do not require rejection of the evidence. The Court rejected the argument that evidence of a confession had to be rejected if the confession had been obtained in breach of the Judges Rules. But it is in the reasons of Dixon J that there is found reference to the notion of "basal voluntariness" and it is only by close analysis of those reasons that the content of that concept emerges. The overarching common law rule was described67 by Dixon J as being that "a confessional statement made out of court by an accused person may not be admitted in evidence against him upon his trial for the crime to which it relates unless it is shown to have been voluntarily made". The rule was amplified68 in the immediately following sentences: "This means substantially that it has been made in the exercise of his free choice. If he speaks because he is overborne, his confessional statement cannot be received in evidence and it does not matter by what means he has been overborne. If his statement is the result of duress, intimidation, persistent importunity, or sustained or undue insistence or pressure, it cannot be voluntary. But it is also a definite rule of the common law that a confessional statement cannot be voluntary if it is preceded by an inducement held out by a person in authority and the inducement has not been removed before the statement is made ... An inducement may take the form of some fear of prejudice or hope of advantage exercised or held out by the person in authority (Ibrahim v The King69; R v Voisin70)." (emphasis added) The similarities between this statement of the applicable rules, and the passage quoted earlier from the first edition of Best on Evidence, are evident. The content given by Dixon J, in McDermott, to the word "voluntarily" is important. As pointed out above, the overarching principle is that a confession cannot be admitted into evidence unless it is shown to have been made "voluntarily". Both the rules governing the exclusion of evidence of certain the principle of "basal confessions made in authority and to persons 67 (1948) 76 CLR 501 at 511. 68 (1948) 76 CLR 501 at 511. 69 [1914] AC 599 at 609-610. 70 [1918] 1 KB 531 at 537-538. voluntariness" take their place as aspects of this one principle. Both also identify criteria that found a legal conclusion: that the confession was not made "voluntarily". That this is the way in which the rules operate is most obviously apparent in the rule concerning statements made to persons in authority. The particular content that is given to both the concept of "inducement" and the concept of a "person in authority" constitute the criteria that yield the relevant legal conclusion: that the confession was not made voluntarily. But as the reasons of Dixon J in McDermott show, application of the rule about "basal voluntariness" also depends upon identifying the criteria that are to found the legal conclusion that a confession was not made "voluntarily". The relevant conclusion is described as the will being "overborne". The circumstances that yield that conclusion, and provide the criteria which govern the availability of the legal conclusion, are described as "the result of duress, intimidation, persistent importunity, or sustained or undue insistence or pressure". All are species of compulsion. Further refining the content of the criteria that are engaged under the head of "basal voluntariness" must take account of the way in which the tests will fall for consideration. "Basal voluntariness" may be seen as a principle underpinning the whole of the law relating to confessions. But it is a principle that in practice will fall for consideration, if at all, only in cases not concerning a person in authority. The test excluding statements preceded by an inducement in the form of fear of prejudice or hope of advantage held out by a person in authority necessarily excludes confessions in which a person in authority has so acted as to engage the principle of basal voluntariness. For, of course, if a person in authority subjects a suspect to coercion, whether by threats of violence or other intimidatory acts, the rule excluding a confession made to a person in authority in response to an inducement is readily applied. Further questions may then be engaged where the person in authority is an agent of the state. Thus, the conduct of state agents will either be dealt with directly under the rules about statements to persons in authority or, if those rules do not require exclusion of the evidence, circumstances that are said to bear upon reception of the confessional evidence that state agents have obtained can be examined in connection with the exercise of the discretion. Confessions made to someone not known or believed to be a person in authority will thus fall to be considered under the test of "basal voluntariness". Basal voluntariness is concerned with confessions made under compulsion. The key inquiry is about the quality of the compulsion that is said to have overborne the free choice of whether to speak or to remain silent. In this context, "overborne" should be understood in the sense described71 by Dixon J as "the result of duress, intimidation, persistent importunity, or sustained or undue insistence or pressure". It is necessary to focus upon the sufficiency of the compulsion. In McDermott, Dixon J treated overbearing of the will separately from the fear of prejudice or hope of advantage. Fear of prejudice and hope of advantage were treated as the two species of the genus of inducements. But, by contrast, like duress. overbearing of Considerations of a fear of prejudice or the hope of advantage were seen as not only different from an overbearing of the will but also as relevant only to statements made to a person in authority. the will was confined to circumstances Rarely, if ever, would the test of "basal voluntariness" exclude confessions where some hope of advantage (as distinct from fear of prejudice) was held out to the person who made the confession. The "basal principle" of which Dixon J spoke72 is "a principle the application of which is flexible and is not limited by any category of inducements that may prevail over a man's will" (emphasis added). But there are few circumstances when an inducement in the form of a promise of advantage will compel a person to speak. Promises of advantage that are not made by a person whom the confessionalist knows or believes to be a person in authority would rarely, if ever, be such as could found the conclusion that the speaker did not have a free choice to speak or remain silent. That is not to say that the promising of an advantage may not bear upon the exercise of the discretion. It may do so. Two further points should be made. The first is negative and identifies what does not suffice to show that the will has been overborne. The conclusion that a confessionalist had no choice to speak or stay silent is not required (and without more being established, would not be open) if it is observed that the confessionalist acted under some misapprehension or mistake, even if that misapprehension or mistake was induced by the person to whom the confession is made. Nor is that conclusion required (and without more being shown the conclusion would not be open) if it is observed that there was some imbalance of power between the confessionalist and the person to whom the confession was made. The second point to make is that the conclusion that a confessionalist had no choice to speak or stay silent is not readily reached where the confession was 71 (1948) 76 CLR 501 at 511. 72 (1948) 76 CLR 501 at 512. not made to a person whom the speaker knew or believed to be a person in authority. In such a case, absent duress of person or intimidation, it will be necessary to articulate why there was no choice. Was the importunity, insistence or pressure so sustained or persistent that there was no choice? Why? By hypothesis, the confessionalist did not know or believe that the weight of the state or its agencies bore upon him or her. What, then, is said to have deprived that person of choice? For the basal voluntariness rule to apply it must be possible to identify what it was that is said to have deprived that person of choice. The discretion In only one of the present cases, the case of Clarke, did the appellant submit that the discretion to exclude the confession should have been exercised in favour of its exclusion from evidence. It was submitted that the confession had been inappropriately or unfairly obtained by investigating authorities. This being the particular basis of the appellant's complaint, it is neither necessary nor appropriate to attempt to chart the metes and bounds of the discretion. Only those aspects of the discretion that are relevant to the facts in Clarke require application. It is nonetheless important to begin consideration of the application of the discretion by reference to three decisions of this Court – R v Lee73, Cleland v The Queen74, and R v Swaffield75. In Lee, the Court decided some questions about the operation of what is now s 149 of the Evidence Act 1958 (Vic). Those issues may be put to one side. But the decision in Lee is also important for what it decided about the circumstances in which a voluntary confession may be excluded in the exercise of the discretion. The Court discountenanced asking76, as separate questions, whether a police officer had acted "improperly" and then whether it would be unfair to reject the accused's statement. Rather, it was said77 to be "better to ask whether, having regard to the conduct of the police and all the circumstances of the case, it would be unfair to use his own statement against the accused". And emphasis was given78 to it being in the interests of the community that all crimes 73 (1950) 82 CLR 133. 74 (1982) 151 CLR 1. 75 (1998) 192 CLR 159. 76 (1950) 82 CLR 133 at 154. 77 (1950) 82 CLR 133 at 154. 78 (1950) 82 CLR 133 at 155. See also R v Jeffries (1946) 47 SR (NSW) 284 at 313. "should be fully investigated with the object of bringing malefactors to justice, and such investigations [not being] unduly hampered". In Cleland79, a majority of the Court again emphasised the purpose of the rules as to confessions (and in particular the residual discretion) as being to ensure that the accused has a fair trial not, as Gibbs CJ put it80, "to insist that those who enforce the law themselves respect it". In that regard, Gibbs CJ expressly agreed81 with what Brennan J had said in Collins v The Queen82 that: "it is difficult to conceive of a case ... where a voluntary confession which might fairly be admitted against an accused person would be rejected in the public interest because of unlawful conduct leading to the making of the confession." It is in the setting provided by these earlier decisions of the Court that the decision in Swaffield is to be understood. There, in the joint reasons of Toohey, Gaudron and Gummow JJ, it was pointed out83 that it is not always possible to treat voluntariness, reliability, unfairness to the accused, and public policy considerations as discrete issues. It followed84 that: "The wider the operation given to the principle that, to be admissible, a confession must be voluntary, the less scope there is, in practice, for the exercise of the unfairness discretion. Particularly is that so in relation to improprieties calculated to cause the making of an untrue admission. It may be expected that improprieties calculated to have that effect will often impact on the exercise of a free choice to speak if that notion is given its full effect. However, it will not necessarily be so in every case." 79 (1982) 151 CLR 1. 80 (1982) 151 CLR 1 at 8, quoting from Bunning v Cross (1978) 141 CLR 54 at 75 per Stephen and Aickin JJ. 81 (1982) 151 CLR 1 at 9; see also at 17 per Wilson J, 34-35 per Dawson J. 82 (1980) 31 ALR 257 at 317. 83 (1998) 192 CLR 159 at 196 [74]. 84 (1998) 192 CLR 159 at 197 [76]. But as was also pointed out85, unreliability, although an important aspect of the unfairness discretion, is not the only consideration that may be engaged. Other forms of disadvantage may arise. The circumstances considered by this Court in Foster v The Queen86 and in the Supreme Court of Victoria by Smith J in R v Amad87 are notable instances of such other forms of disadvantage. But the chief focus for the discretionary questions that arise remains upon the fairness of using the accused person's out-of-court statement, rather than upon any purpose of disciplining police or controlling investigative methods. In the further consideration of the questions raised, in Clarke, about the refusal of the trial judge to exclude evidence of confessional statements the appellant had made, it will be necessary to examine not only the particular facts of the case that are said to have required the discretionary exclusion of the evidence, but also the principles that are to be applied in the appellate review of that decision. The second of those questions is better left for consideration in conjunction with the application of the principles that have been stated in these reasons to the particular facts of that case. Tofilau On 29 June 1999, Belinda Romeo was found dead in her unit. She had been dead for some days. She had died by ligature strangulation. On the day after Ms Romeo's body was found, the appellant made a statement to police in which he described having met Ms Romeo about half way through March 1999. They had commenced a sexual relationship and the appellant had moved into Ms Romeo's unit soon after they had met. He said that he had stayed there for two weeks until he left and returned to live with relatives in Carlton. He said that the last time he had seen Ms Romeo was at a club, in the early hours of the morning of Sunday, 20 June 1999. He had subsequently tried to telephone her but with no result. One month later, on 29 July 1999, the appellant was arrested and he took part in a videotape recorded interview at the offices of the homicide squad of the Victoria Police. He denied any involvement in Ms Romeo's death and was released without being charged. 85 (1998) 192 CLR 159 at 197 [78]. 86 (1993) 67 ALJR 550 at 554-555; 113 ALR 1 at 7-8. Little progress was made in the investigation of Ms Romeo's death during the next two years but in November 2001, the investigation took a new turn. Between November 2001 and March 2002, police constructed a series of 16 scenarios in which undercover police operatives, posing as members of an organised criminal gang, interacted with the appellant. The officer in charge of the police team subsequently gave evidence at the appellant's trial that he had been provided with only basic information about the circumstances surrounding the death of Ms Romeo and that very little information was given to the covert operatives. He said that this was done so that leading questions would not be asked by operatives that might affect the reliability of any admissions they obtained and to ensure that they did not inadvertently disclose to the appellant that they knew anything about the matter. It is not necessary to describe the techniques used by the undercover police officers. Considerable emphasis was given to instilling in the appellant a sense of confidence that association with what he was led to believe was a criminal gang would bring not only financial and personal reward but also protection against police investigation. The appellant participated in or observed what appeared to be serious criminal activity by gang members. In fact, the "criminal" activity was staged. From time to time reference was made in conversation between the appellant and members of the gang to the appellant's connection with the death of Ms Romeo. Over time it was made plain to the appellant that it was important that the appellant tell the gang the whole truth about his background. If he did, the problem could be handled. The covert operations culminated in March 2002. Police served a notice on the appellant foreshadowing an application to the Magistrates Court for permission to take a sample from him for DNA analysis. (He had refused to give such a sample when he was interviewed in 1999.) One of the gang members, on being told that the notice had been served, exhorted the appellant to tell the truth. He told the appellant that he did not believe what the appellant had earlier said and that he believed that the appellant had killed Ms Romeo. The appellant then admitted to killing Ms Romeo by strangling her with something she had round her neck. As the trial judge put it88, the appellant was "effectively persuaded" by one of the covert operatives to give a full and frank account of the killing to the gang's boss. The appellant was then taken to a meeting, in a hotel room, with the man whom he understood to be the "boss". What happened in that room was videotape recorded. The "boss" told the appellant that he did not have to say 88 (2003) 13 VR 1 at 6 [15]. anything, that he could "get up and walk out now" but that the "boss" could not help him if he did. The boss went on to say89: "But we can help you, we can make this go away but you'll have to tell me everything that happened so that I make sure that we cover all the bases." The appellant then described to the "boss" how he had killed Ms Romeo. He said that he had disposed of the scarf he had used to strangle her by leaving it in a car behind the units where Ms Romeo lived. On the day following this conversation the appellant was arrested, taken to the offices of the homicide squad, and there he participated in a tape recorded interview. He denied that he had been to the hotel but, when the recording was played, he accepted that the voices on the recording that had been made of the conversation at the hotel were his, and that of the "boss". The appellant denied strangling Ms Romeo and said that he had decided to pretend that he had committed a murder so that he could work in the gang. In the course of the interview, the appellant was shown a scarf found in a car behind Ms Romeo's unit. He denied ever having seen it before. It was put to the appellant that he had told the "boss" about throwing the scarf with which he had strangled Ms Romeo into a car at the back of the block of units. He was asked how he could explain how he knew where the scarf had been found if his story about participating in the murder was all an invention. He declined to offer any comment. The trial judge90 and the Court of Appeal91 held that what the appellant had said to gang members and the boss were not statements made to a person in authority. These conclusions were correct. During the recorded interview with officers of the homicide squad the appellant said, "I don't know if he's [the boss is] a cop or not."92 Because the appellant neither knew nor believed that those to whom he spoke had lawful authority to affect the course of the investigation of or prosecution for the murder of Ms Romeo, the rules about confessional statements to persons in authority were not engaged. 89 (2003) 13 VR 1 at 6 [15]. 90 (2003) 13 VR 1 at 11 [32]. 91 (2006) 13 VR 28 at 67 [170]. 92 (2006) 13 VR 28 at 47 [84]. The trial judge93 further held that evidence of what the appellant had said in the conversations was not to be excluded as not being made voluntarily. (The better view may be that no distinct point about basal voluntariness was argued in the Court of Appeal, though it is plain that reference was made to the subject.) However this may be, the trial judge's conclusion on that subject was correct. The statements the appellant made to undercover police officers were not made under compulsion. Nothing that was said to or done with the appellant constituted compulsion of a kind that would meet the criteria leading to the conclusion that what was said was not said voluntarily. There was no duress or intimidation. The police operation was elaborate and took place over an extended period. The appellant thought that he would benefit from saying what he did. More than once the appellant was told how important it was that he be frank about his past and about the circumstances of Ms Romeo's death in particular. He was repeatedly told that if he had a problem the boss would make it "go away". But no coercion was applied to the appellant by those to whom he made his confession. There was no importunity, insistence or pressure of a kind exerted by those to whom the confession was made that would found the conclusion that the appellant had no free choice whether to speak or stay silent. Observing that the appellant may have felt under pressure requires no different conclusion. What is important is the absence of coercion by those to whom he spoke. That he may have felt under the pressure that he himself generated by his desire to join the gang and thus gain not only the financial benefits said to follow from that membership but also resolution of what otherwise appeared to be his inevitable prosecution for murder is not to the point. The appeal to this Court should be dismissed. Marks This appellant was charged with the murder of his great-aunt, Margaret Mary O'Toole. She was found dead in her home on 17 April 2002. She had been beaten to death. In April 2002, the appellant owed more than $28,500 on credit card accounts. His accounts were overdrawn. One creditor had obtained judgment against him. The previous year, in April, the deceased, accompanied by the applicant, had borrowed $28,000, secured by mortgages over certain real estate, for use in a "business investment". There was evidence, and there were admissions made by the appellant, from which it would have been open to the jury to conclude that the appellant had received the money which his great-aunt borrowed. There was evidence of the appellant borrowing other money from her. There was also evidence from which it would have been open to the jury to 93 (2003) 13 VR 1 at 16 [51]. conclude that the deceased either had called for repayment of the money lent or proposed to do so. In May 2002, police arrested the appellant, cautioned him, searched his premises, and conducted a videotape recorded interview. He was not then charged with the deceased's murder. Between 25 September 2002 and 27 November 2002 the Victoria Police Undercover Unit conducted an operation of the same kind as has been considered in the matter of Tofilau. Again, the operation culminated in an interview with the "boss" of the criminal gang conducted in a hotel room. Again, the "boss" said that he did not care whether the appellant was responsible or not for the death of the deceased but that he needed to know what had happened so that the situation could be "handled". The appellant described to the "boss" how he had killed the deceased and what he had done after doing so. At his trial the appellant submitted that evidence of these statements should be excluded. On the voir dire he adduced evidence from a consulting clinical and forensic psychologist that, in his opinion, the appellant was suffering from a borderline personality disorder as well as a dependent personality disorder and an adjustment disorder, in addition possibly to an anti-social personality disorder. Presumably this evidence was directed to showing what had moved the appellant to say what he did. For the reasons given earlier, the application of the rule about basal voluntariness neither required nor permitted that kind of inquiry. The relevant inquiry was about whether those who had secured the confession had coerced the appellant; it was not about the appellant's state of mind. The trial judge concluded94 that there was no evidence that the will of the accused was overborne and that the prosecution had discharged the onus of He concluded95 that the rule about demonstrating basal voluntariness. confessions to persons in authority was not engaged because the person to whom the statements were made was not known or believed to be a person in authority. The appellant's appeal to the Court of Appeal against his conviction on grounds including that the trial judge erred in failing to exclude evidence of the out-of-court confessions to the "boss" was dismissed. For the reasons given in respect of the matter of Tofilau, the appeal to this Court should also be dismissed. The statements in issue were not made to a person in authority. They were not 94 Marks (2004) 150 A Crim R 212 at 224 [70]. 95 (2004) 150 A Crim R 212 at 225 [75]. made under compulsion. No challenge was made in this Court to the failure to exclude them in exercise of the discretion. Hill On the evening of 17 February 2002 a taxi driver picked up this appellant and his girlfriend, Nicole Green, and drove them to the house in Carrum where the appellant, Ms Green, and the appellant's stepbrother, Craig Anthony Reynolds, lived together. After they had arrived at the house, and the appellant had gone in to fetch money to pay the taxi fare, the appellant summoned the taxi driver into the house. Mr Reynolds lay seriously wounded on the floor. Subsequent examination revealed that he had sustained a fracture to the base of the skull consistent with being struck by a blunt object. Mr Reynolds died a few days later. When first interviewed by police, the appellant described coming upon Mr Reynolds, lying injured. He spoke about what he observed and heard, but said nothing that implicated him in Mr Reynolds suffering the injuries he did. Subsequent investigations by police suggested that the appellant was responsible for Mr Reynolds' death but yielded insufficient evidence to warrant charging the appellant. Investigating officers asked the Victoria Police Undercover Unit for assistance. Between the middle of June 2002 and 6 August 2002 that unit enacted a series of 19 scenarios in which undercover operatives, posing as members of an organised criminal gang, interacted with the appellant. As in the matters of Tofilau and Marks, emphasis was given to a supposed code of truth, honesty and loyalty between all gang members and the necessity for full disclosure of any past crimes which the police might still be investigating. Again, as in Tofilau and Marks, the culmination of this aspect of the investigation was a meeting between the appellant and a policeman, posing as the "boss" of the gang. The boss spoke to and secured admissions from the appellant about the death of Mr Reynolds. Again, it is not necessary to describe the scenarios. At his trial, the appellant formally admitted that he had inflicted the injuries on Mr Reynolds which caused his death. In those circumstances, the central issues at the appellant's trial were whether the prosecution established that the appellant had acted with murderous intent, and whether the prosecution excluded provocation. The appellant contended that evidence of the admissions he had made to the undercover policeman who had acted the part of the gang's boss should be excluded. He said that these statements were not made voluntarily. Rather, he said, they were made because that was what those with whom he was dealing had wanted to hear, and because, by making up the story he did about his involvement in the death of Mr Reynolds, he would be able to participate in proceeds of crime promised to him by members of the gang. The trial judge concluded that the appellant was "not in any sense overborne or having his will affected by that which members of the gang said to him or did in his presence". Rather, the trial judge concluded that "at all times the conversation between [the appellant] and either or all of the police undercover operatives was voluntary and made by him in a free exercise of his will to speak or not to speak". He concluded that neither the "boss" nor any of the other undercover police was a person in authority. On appeal to the Court of Appeal against conviction the appellant's challenges to these conclusions were rejected96. The Court of Appeal was correct. The rules about statements to persons in authority were not engaged. The person to whom the appellant made the admissions was not a person whom he knew or believed could lawfully affect the outcome of the investigation of or any subsequent prosecution for the murder of Mr Reynolds. The statements which the appellant made were not made under compulsion. Nothing that was said to or done with him constituted compulsion of a kind that would meet the criteria leading to the conclusion that what was said was not said voluntarily. There was no duress or intimidation. There was no importunity, insistence or pressure of a kind exerted by the person to whom the confession was made that would found the conclusion that the appellant had no free choice whether to speak or stay silent. The evidence of what he had said was rightly admitted at his trial. The appeal to this Court should be dismissed. Clarke Bonnie Melissa Clarke was aged six years when she died. On the night of 20 December 1982, Bonnie's mother, Marion Wishart, put Bonnie to bed at about 8.30 pm. Next morning she discovered Bonnie, dead in her bed with a stab wound through her chest. She had suffered wounds consistent with her killer attempting to asphyxiate her. She had been sexually assaulted. 96 R v Hill [2006] VSCA 41 at [98]-[125]. The appellant had boarded with Mrs Wishart between January and September 1982. The appellant shared the victim's surname but was not related to her. In March 2002, almost 20 years after the murder, the Victoria Police Undercover Unit began an operation of the same general kind as the operations considered in the matters of Tofilau, Marks and Hill. During the period when undercover police operatives were engaged in playing out various scenarios designed to demonstrate to the appellant their membership of a successful and powerful gang of criminals, an article was published in a newspaper reporting that DNA testing was being used to solve old murders. The article said that police had recommenced their investigation into the case of Bonnie Clarke. The article said that police believed that the killer may have boarded with the child's family before she was killed, and that they planned to interview at least 14 persons who had rented rooms in the house during the three years before the murder. On the following day, an officer of the homicide squad of the Victoria Police went to the appellant's home, spoke to the appellant's partner, and left his business card indicating that he wanted the appellant to contact him. Against this background, the appellant spoke to an undercover police operative whom he believed was a member of the criminal gang, and said that he did not know who killed the child but that he had lived at the house for about nine months as a boarder and knew mother and daughter. The police operative told the appellant that the "boss" could "fix" anything and that he had to be provided with the absolute truth. The appellant then denied, and for some time thereafter continued to deny, any involvement in the death of Bonnie Clarke. In June 2002, the appellant was taken by a gang member to a hotel room to meet the man whom he believed to be the "boss" of the gang. The "boss" emphasised that he had to be able to trust the appellant entirely and explained that the appellant "could not have more police 'heat' on him if he tried". The "boss" produced what appeared to be a three page confidential police report on investigations into the murder of Bonnie Clarke. This was a fabricated document, prepared for the occasion. The document recorded that the appellant was "the only suspect identified by investigators for this crime". It described certain inquiries that were still to be made and said that on completion of those inquiries, approval would be sought from the Director of Public Prosecutions to charge the appellant with the murder. The appellant's first reaction to the document was to say that "it was an accident that she [Bonnie] died". The "boss" assured the appellant that "I can fix it". The appellant then gave a full description of how it was that he had killed Bonnie Clarke. He described what he did after the killing, and in response to further questions put by the "boss", further elaborated on the manner and The conversation in the hotel room finished at about 6.12 pm. By about 7.15 pm the appellant had been arrested and taken to the offices of the Homicide Squad. At 7.45 pm a videotape recorded interview was conducted. In the course of that interview the appellant acknowledged that he had assaulted Bonnie, smothered her, and had probably stabbed her. At his trial, the appellant submitted that the admissions obtained by the covert police officers should be excluded from evidence, first because the statements had been induced by persons in authority, second because the appellant's will had been overborne, and third because they should be excluded in the exercise of discretion. The trial judge concluded97 that the covert operative to whom the confession was made was not a person in authority. He further concluded98 that the appellant had had a choice as to whether he spoke up or did not. (Indeed, the trial judge noted that on the voir dire, the appellant acknowledged that he had had such a choice99.) In relation to the discretion to exclude the evidence, the trial judge concluded100 that "on balance ... the means adopted by the admissions were [not] disproportionate to the purpose, particularly when one considers the seriousness of the crime under investigation". The trial judge further concluded101 that any forensic disadvantage to the appellant otherwise occasioned by admitting the evidence could be overcome. More generally, the trial judge concluded102 that "despite some concerns, the conduct of the covert operatives did not cross the line of acceptable conduct and that the admissions made to [one of the covert operatives] on 6 June 2002 should be admitted into evidence so as to enable the jury to assess their probative value". One factor which weighed in the trial judge's conclusions in this last regard was that he considered that the appellant had joined in the criminal activity fabricated by the undercover operatives of his own free will and "with some enthusiasm"103. the covert operatives to elicit 97 [2004] VSC 11 at [40]. 98 [2004] VSC 11 at [49]. 99 [2004] VSC 11 at [50]. 100 [2004] VSC 11 at [91]. 101 [2004] VSC 11 at [96]. 102 [2004] VSC 11 at [101]. 103 [2004] VSC 11 at [98]. On the issues of "person in authority" and "basal voluntariness", what has been said in relation to the previous matters applies equally to this matter. The statements in issue were not made to a person in authority. The statements were not coerced; they were made voluntarily. In the Court of Appeal, the discretionary questions considered at trial were agitated by reference to three propositions: first, that the statements were made in circumstances that rendered them inherently unreliable and calculated to elicit an untrue admission of guilt. Secondly, it was submitted that the circumstances in which the statements were made must inevitably have caused the appellant to suffer forensic disadvantage because they involved the implication that he had "serious criminal propensities". Thirdly, the admission of the evidence was said to be "both unfair and contrary to public policy". Each of these propositions was rejected by the Court of Appeal. In this Court, the appellant's argument on the discretionary questions emphasised what he identified as the "pressure" placed on him by the covert operative playing the role of the "boss" to confess to the crime. In addition, it was said that the scenario evidence inevitably revealed that the appellant was willing to participate in criminal activity and that revealing that willingness to the jury placed him at a serious forensic disadvantage. The respondent asserted, and the appellant denied, that the appeal against the trial judge's decision not to exercise the discretion to exclude the evidence was to be decided according to the familiar principles stated in House v The King104. Once it is noticed that the discretion which is to be exercised is, as was said in McDermott105, to be exercised even if "the strict rules of law, common law and statutory," do not require rejection of the evidence, it follows that the respondent's submission should be accepted. The trial judge is to exercise a discretion. That discretion is to be exercised according to principle. The question on appeal is whether the exercise of the discretion miscarried because the judge "acts upon a wrong principle, ... allows extraneous or irrelevant matters to guide or affect him, ... mistakes the facts, [or] does not take into account some material consideration"106. (Because the decision will ordinarily be supported by reasons, it is to be assumed that the residual category of cases identified in House, where it does not appear how the primary judge reached the result embodied in the order but the result embodied is, upon the facts, unreasonable or plainly unjust, would rarely fall for consideration.) 104 (1936) 55 CLR 499 at 505. 105 (1948) 76 CLR 501 at 515. 106 House v The King (1936) 55 CLR 499 at 505. A number of matters may affect the exercise of the discretion to exclude evidence of a confession which otherwise is admissible. So much is evident from what is said in Swaffield. But as noted earlier in these reasons, by reference to the decisions in Lee107 and Cleland108, the chief focus of the discretionary questions that arise remains upon the fairness of using the accused person's out-of-court statement, rather than upon the method of obtaining it. To the extent to which questions of disciplining police or controlling investigative methods are said to be relevant, proper weight must be given to the seriousness of the crime being investigated. Such considerations are relevant to the exercise of the discretion to exclude illegally obtained evidence109. The relevance of the seriousness of the crime being investigated can be no less when considering the exercise of a discretion to exclude evidence that has not been unlawfully obtained. In the present matter, the appellant sought to describe the methods employed by investigating police as "improper". That description was given colour and, perhaps, some content, by reference to the playing out of what appeared to be serious criminal activity. But in fact, no crime was committed in the course of the various scenarios conducted by the covert police operatives. The "impropriety" to which the appellant pointed was, in the end, said to lie in the "pressure" that had been applied to him. That "pressure" was constituted by creating in his mind the belief that the only way he could avoid being charged with and convicted of the murder of Bonnie Clarke was to tell the "boss" that he had done it. In the present case there was no reason to doubt the reliability of what the appellant told the "boss". He repeated essentially the same account of events surrounding the death of Bonnie Clarke when he was interviewed formally by the Homicide Squad officers very soon after he had said what he did to the "boss". But leaving this consideration to one side, and confining attention wholly to what was said to the covert police operatives, it was open to the trial judge to conclude, as he did, that the circumstances were not such as to warrant excluding the confession from consideration by the jury. The trial judge considered the significance to be attached to the appellant's participation in the various criminal scenarios that were played out. He concluded that the evidence of those activities 107 (1950) 82 CLR 133. 108 (1982) 151 CLR 1. 109 Bunning v Cross (1978) 141 CLR 54; Cleland (1982) 151 CLR 1 at 20 per Deane J; Pollard v The Queen (1992) 176 CLR 177 at 202-203; Ridgeway v The Queen (1995) 184 CLR 19 at 31; Nicholas v The Queen (1998) 193 CLR 173. did not present forensic difficulties of a kind that required exclusion of the evidence. That conclusion was open. It was not shown that the trial judge acted upon any wrong principle, allowed extraneous or irrelevant matters to guide or affect him, mistook the facts or failed to take into account some material consideration. It was not shown that the exercise of the discretion miscarried. The appeal should be dismissed. Kirby 117 KIRBY J. Four appeals are before this Court. Each challenges the conviction of the appellant of murder. In each trial, the judge admitted prosecution evidence given by undercover police officers. In each case, those police officers gave evidence, over the accused's objection, of confessional statements made to them by the accused in the course of dealings with the officers who were acting out "scenarios". Such "scenarios" were carefully pre-planned and followed a technique known as the "Canadian model"110. During an early stage in the proceedings in Victoria in one of the four matters, the Chief Commissioner of Police (Vic) sought to suppress the publication of details of the "scenario technique". This Court, like Canadian courts before it111, declined to provide the suppression order sought112. The "scenario" technique used in the cases varied from one instance to the other. The following description accurately captures the main ingredients113: "Typically, the covert technique begins with an apparently chance encounter between the suspect and an undercover operative posing as some sort of criminal. A relationship is developed between the suspect and the initial contact person, and through that relationship the suspect is gradually drawn into the activities of the criminal gang to which the initial contact supposedly belongs. As the suspect is drawn into the gang, the activities in which they are involved escalate in seriousness, going from collecting money from brothels as part of an apparent protection racket, to acting as a lookout for robberies, to involvement in a violent 'run through' of a supposed drug dealer's home. All of this conduct is staged, all of the participants – apart from the suspect – are undercover police officers and none of the activity is in fact criminal; but the suspect is led to believe that it is." The initial inducement for the involvement of the accused in the "criminal gang" is the prospect of material gain. However, the scenario unfolds so as to 110 The methodology was borrowed from Canadian police practice exemplified in R v Unger (1993) 83 CCC (3d) 228. See R v Tofilau (2003) 13 VR 1 at 11 [34]. 111 R v Mentuck [2001] 3 SCR 442; R v ONE [2001] 3 SCR 478. 112 In the Matter of an Application by the Chief Commissioner of Police (Vic) (2005) 79 ALJR 881; 214 ALR 422 affirming Re Applications by Chief Commissioner of Police (Vic) (2004) 9 VR 275. 113 Palmer, "Applying Swaffield Part II: Fake gangs and induced confessions", (2005) 29 Criminal Law Journal 111 at 112 (footnotes omitted). Kirby play on the suspect's fear about past criminality and his hope that the gang (or its "boss") will be able to "fix up" the reason for that fear114: "At this point, the suspect will be made to believe that the formal police investigation has been re-activated: for example, the police will write to the suspect seeking a DNA sample. The suspect will then be confronted by his contacts and warned that his past crimes could bring 'heat' onto the gang; but he will also be told that the gang can make the investigation go away. All that the suspect has to do, he will be told, is to tell the truth; indeed, he may be harangued into doing so, or even interrogated. The suspect may initially deny involvement, but as the pressure mounts to 'tell the truth', a confession may be made, partial at first and then in full. At this point, the suspect will be charged, whereupon he may repeat his confession, or may revert to his previous silence, denials or version of events. In either case, the prospects for success of any prosecution are likely to rest very heavily on the question of whether the accused's confession to the undercover operatives is admissible." By these appeals, the four appellants contest the admissibility of the evidence procured by variations on the foregoing "scenario techniques". Each of their cases arose in Victoria. Although it has been suggested that Victoria should adopt the reformed Uniform Evidence Act115, the common law (with its different approach to the issues argued in this appeal116) continues to be applicable.117 However, in one relevant respect, the common law is modified by a provision of the Evidence Act 1958 (Vic)118 ("the Evidence Act") upon which the prosecution relied. 114 (2005) 29 Criminal Law Journal 111 at 112 (footnotes omitted). 115 See Victorian Law Reform Commission, Implementing the Uniform Evidence Act (2006) at 11 (Recommendation 1). 116 See reasons of Callinan, Heydon and Crennan JJ ("joint reasons") at [322] describing the different approach taken to the issues by the Evidence Act 1995 (Cth) and derivative legislation. The Uniform Evidence Acts are in force in New South Wales, Tasmania, the Australian Capital Territory and Norfolk Island. The common law approach has also been abandoned in the United Kingdom: Police and Criminal Evidence Act 1984 (UK), ss 76, 78. 117 The common law principle of voluntariness is expressly preserved in Victoria by the Crimes Act 1958 (Vic), s 464J(b). 118 s 149. See below at [211]-[214]. Kirby It follows that, whilst in many jurisdictions the law governing the type of issues presented by these appeals has moved towards detailed statutory regulation, these appeals require a belated exploration of common law rules. As this Court pointed out in R v Swaffield119, the common law with respect to the admissibility of confessional evidence has followed a meandering history. It is one that has responded to the changing organisation and functions of police services; changing practices and technologies affecting the investigation and prosecution of crime; changing provisions for criminal appeals designed to prevent miscarriages of justice120; and changing "social attitudes" and "social realities" observed by the courts121. In an attempt to impose a measure of conceptual order on the many earlier developments of the common law, this Court, in Swaffield, derived from past decisions a series of tests to be applied before disputed confessional evidence is admitted. Over time, the tests have been formulated in different terms, and it is clear that they overlap and reinforce one another to a significant extent. The first of the tests, voluntariness, arises from "the fundamental requirement of the common law that a confessional statement must be voluntary, that is, 'made in the exercise of a free choice to speak or be silent'"122. Another test, sometimes subsumed in voluntariness, requires that the evidence should be judged reliable123. A third test (policy exclusion) concerns unfairness to the accused124 and other grounds for the rejection of confessional evidence (even where given voluntarily and reliable) in the exercise of judicial discretion125. 119 (1998) 192 CLR 159. 120 A point made by Dixon J in McDermott v The King (1948) 76 CLR 501 at 512- 513; and by Dawson J in Cleland v The Queen (1982) 151 CLR 1 at 30; cf Swaffield v The Queen (1998) 192 CLR 159 at 171 [14], 174 [17] per Brennan CJ. 121 Law Reform Commission of Canada quoted in Australian Law Reform Commission, Evidence, Report No 26, (1985) vol 1 at 534 cited Swaffield (1998) 192 CLR 159 at 194 [68]. 122 Swaffield (1998) 192 CLR 159 at 188 [50] quoting R v Lee (1950) 82 CLR 133 at 149 and citing MacPherson v The Queen (1981) 147 CLR 512 at 519; Cleland (1982) 151 CLR 1 at 5; Collins v The Queen (1980) 31 ALR 257 at 307. See also Swaffield (1998) 192 CLR 159 at 208 [121]. 123 Swaffield (1998) 192 CLR 159 at 209-210 [124]-[126]; see also at 167-171 [10]- 124 Swaffield (1998) 192 CLR 159 at 171-172 [14], 189 [53], 211 [129]. 125 Swaffield (1998) 192 CLR 159 at 167 [8], 189 [51]-[52], 211-212 [132]. Kirby In the present appeals, all of the appellants invoked the rule of voluntariness. All of them did so by reference to the particular aspect of the voluntariness rule requiring the exclusion of evidence of confessional statements made to "persons in authority" as a result of an "inducement", being a threat or promise of favour or advantage ("the inducement rule"). That this is an established sub-category of the common law voluntariness rule in Australia was not contested during the argument. Additionally, all of the appellants relied more generally on so-called "basal involuntariness"126. I dislike the adjective "basal" for it adds nothing to the critical concept of "voluntariness"127. However, it tends to be used to refer to those elements of the voluntariness rule concerned with the exercise of the free will of a person who is suspected of a criminal offence, either to remain silent or to make confessional statements to police, prosecutors or other persons. In Swaffield, the arguments before this Court were not presented by reference to the voluntariness rule in any of its forms. This was so notwithstanding the fact that "voluntariness is a flexible principle" and that some dicta existed suggesting 'false representations or other trickery'". Such considerations were arguably relevant to the circumstances both of Mr Swaffield's case and the conjoined appeal of Mr Steven Pavic128. By way of contrast, in the present appeals, the voluntariness and "basal voluntariness" of the confessional statements constituted the centrepiece of each appellant's contentions129. that "involuntariness might extend None of the appellants sought to contest the admissibility of the statements made by them on the basis of the reliability test. Most did not rely on the discretionary ground for exclusion of the confessional evidence. Only one (Mr Malcolm Clarke) invoked the judicial discretion, appealing in his case to considerations of alleged unfairness and public policy to support the exclusion of the contested statements. 126 cf Swaffield (1998) 152 CLR 159 at 196-197 [75], 209 [123] referring to McDermott (1948) 76 CLR 501 at 512 per Dixon J; Cleland (1982) 151 CLR 1 at 127 It derives from the reference by Dixon J in McDermott (1948) 76 CLR 501 at 512 to "the basal principle that to be admissible a confession must be voluntary". 128 Swaffield (1998) 192 CLR 159 at 209 [123]. 129 If the applicants were to succeed on the issue of involuntariness, this would attract the Evidence Act 1958 (Vic), s 149. See below at [213]. Kirby Approach to the appeals A new problem: It follows from the foregoing introduction that these appeals present a new problem for this Court's resolution. Because voluntariness was not argued in Swaffield, the outcome of each appeal is not supplied simply by applying what was held in that case and in Pavic. This is so despite the fact that there are some factual features that all of the cases have in common (undercover police officers recording confessional evidence obtained by interrogation and elicitation following official conduct deliberately designed to mislead the accused). Only in Mr Clarke's appeal, in so far as it invokes the policy discretion as a fall-back if the voluntariness test is unavailing, are the reasons in Swaffield of direct application. Nevertheless, because under the discretionary grounds of exclusion, Messrs Swaffield and Pavic argued objections to the admissibility of evidence procured by elicitation, questioning, deception and trickery, some of the observations of the Court in Swaffield may, by analogy, be relevant to evaluating the appellants' submissions concerning "basal voluntariness". The history of the common law, and the development of its responses to the perceived dangers of confessional evidence, is traced in the reasons of Callinan, Heydon and Crennan JJ ("the joint reasons")130. Those reasons demonstrate the manner in which, over time, the common law principles have expanded, contracted, refocused and changed in response to the perception of new problems arising within changing institutional settings and to reflect different social and judicial attitudes131. When a new problem such as "scenario evidence" arises for evaluation under the common law it is a serious mistake to assume that the answers are to be given by simply plucking out of the casebooks passages from judicial reasoning addressed long ago, before "scenario techniques" were dreamed of. to different problems considered I agree with the joint reasons that the attempt by the appellants, when advancing their arguments concerning the ambit of those who are in "lawful authority" (for the purpose of the inducement sub-category of the voluntariness rule) to treat remarks of Wood J in R v Dixon132 as if they were legally definitive in their appeals, is erroneous. As the joint reasons remark, the problem raised by 130 Joint reasons at [268]-[293], [326]-[327]. 131 Swaffield (1998) 192 CLR 159 at 171-172 [14], 194 [68]. 132 (1992) 28 NSWLR 215 at 229. See joint reasons at [294]. Kirby the facts addressed by Wood J in that case was "completely different" from the problem now presented by these appeals133. However, I would go further and in the same vein. Most of the judicial remarks addressed to the inducement rule, collected in the joint reasons134 (save perhaps for those contained in recent Canadian authority specifically addressed to "scenario evidence"135), have to be read with considerable care and used with discernment. Otherwise, the risk is run that later judges select words written by earlier judges to address significantly different problems, in order to extract from those words a congenial rule that offers a resolution of new issues presented by relevantly different circumstances. Taken literally, the words used by Wood J in Dixon are broad enough to include, as "persons in authority", the undercover police officers who dealt with the appellants in these "scenarios". If this were so, without more, Wood J's test would attract the inducement rule in each of the present appeals and support the appellants' common argument that their confessional statements should be excluded from the record. However, just as Wood J's words cannot be treated as though expressed in a statute of universal application, so the observations of Wood B and his judicial colleagues in R v Row136 nearly two hundred years earlier have, in my view, only marginal relevance to the novel problem now presented. The law's treatment of an admonition of a neighbour to tell the truth in the setting of England at the time when Row was decided will cast no more than the remotest light upon the contemporary problem which this Court now faces. Given the nature of the common law, it is essential to provide responses to the appellants' submissions in a manner that proceeds by analogical reasoning from judicial opinions expressed in past decisions. However, such reasoning is more likely to be useful and convincing if it draws on cases bearing some approximate factual similarity to the present ones. As "scenario evidence" constitutes a new development in policing, it requires that courts examine closely any decisions concerned with the new technique. It obliges them to confine the use of earlier cases, addressing quite different facts, to determining the purpose and objective which courts have there held to be reflected in basic common law doctrine. Any attempt at a more specific use of earlier judicial dicta runs the risk 133 Joint reasons at [295]. 134 Joint reasons at [268]-[293]. 135 Such as R v Grandinetti (2003) 178 CCC (3d) 449 (Alberta Court of Appeal); [2005] 1 SCR 27 (Supreme Court). 136 (1809) Russ and Ry 153 [168 ER 733]. See joint reasons at [283]. Kirby identified by the joint reasons in their criticism of the appellants' invocation of R v Dixon. That is the risk of deploying judicial language, written in earlier times for different purposes, to the significantly different circumstances of the present case. This Court should be more discerning in eliciting the applicable legal principle. A cautious response to confessions: One thread of basic common law doctrine runs through the authorities back to the 18th century and before. It demands a serious approach of caution to "confessions under threats or promises"137. That phrase, in all of its generality, is the one that Lord Mansfield CJ used when addressing himself to the danger of reliance on words "forced from the mind by the flattery of hope, or by the torture of fear"138. The general language used by Lord Mansfield CJ was not cut back by reference to the status, ostensible authority or lawful power of those who procured, and later repeated, the confessional statements. The apprehended danger arose from the operation of hope and fear on the mind of the suspect139. This is where the inducement rule began. It is as well to keep the attitudinal caution of the common law in mind when attempts are made to restrict the operation of the inducement rule, so that it applies in limited circumstances or to limited relationships. The danger of false, misleading, blustering, hypothetical or mistaken confessional evidence is no less present today than it was when Blackstone described that form of testimony as "the weakest and most suspicious of all"140. Any analogical development of common law principles to apply to new factual circumstances will remain true to the approach that lies at the core of the common law rule. Parliament may alter that rule in fundamental respects as it chooses. Judges, applying analogical reasoning, may not do so. Not long ago, in Mallard v The Queen141, this Court corrected an earlier refusal of special leave to appeal142 to a long-term prisoner convicted of murder. 137 R v Rudd (1775) 1 Leach 115 at 118 [168 ER 160 at 161]. See joint reasons at 138 R v Warickshall (1783) 1 Leach 263 at 263-264 per Eyre B and Nares J [168 ER 139 Warickshall (1783) 1 Leach 263 at 263-264 [168 ER 234 at 235]. See reasons of Gummow and Hayne JJ at [34]. 140 Blackstone, Commentaries on the Laws of England (1813), vol 4 at 324-325; cf joint reasons at [270]. 141 (2005) 224 CLR 125. Kirby It set aside an accused's conviction which had been based, substantially, on confessional evidence. Later and more detailed scrutiny by the Court showed that the confession, which had convinced a jury and many earlier appellate judges, was insubstantial, misleading and factually impossible to reconcile with other objective evidence. Mallard (along with many other cases before it, and doubtless others yet to come) reinforces the wisdom of the common law's insistence on taking great care to ensure that confessional evidence is voluntary and reliable, and was not collected in circumstances justifying exclusion on discretionary grounds. These may be old rules. But they have lost none of their modern relevance and applicability. In considering the rule of voluntariness, and specifically the sub-rule governing the inducement of confessional evidence by persons in authority in the context of "scenario evidence", this Court should maintain the longstanding caution of the common law about confessional evidence. It should express the governing legal rule with this caution in mind. To the extent that the law demands that the recipient of a confession must not only in fact be a "person in authority" (such as a police officer or prosecutor), but must be known to be such by the suspect and must have, and be known to have, lawful power to influence the course of criminal proceedings, the ambit of the protection of the inducement rule is obviously diminished. Its capacity to restrain the use of confessional evidence that is "involuntary", in the sense of being affected by a relevant hope or fear, is reduced. Very good reasons would be needed to confine the inducement rule in such a way. Considerations of legal principle and policy Reasons of principle and policy: As in other cases where there is no precisely applicable provision of the Constitution nor legislation governing the point in controversy, and where no holding of this Court affords a clear and binding rule that can be applied to resolve the differences in argument, the solution to the contentions of the parties in the present appeals must be found in the usual sources. What is required is a close examination of relevant legal authority, principle and policy143. The parties argued for the outcomes which they respectively favoured substantially by reference to judicial dicta in earlier decisions of this and other courts concerned with voluntariness, the inducement rule and the judicial discretion to exclude confessional evidence. I will address shortly the arguments 142 Noted (1997) 191 CLR 646. 143 Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 at 252; Northern Territory v Mengel (1995) 185 CLR 307 at 347. Kirby on the legal authorities. However, first it is useful to identify some important considerations of legal principle and policy. Such considerations provide a relevant background so as to ensure that evaluation of the authorities proceeds in a manner apposite to the novel problems that "scenario evidence" raises. Correctly, in my view, these considerations, or some of them, were adverted to below, both at trial144 and on appeal145. Reference to these background considerations is not intended to merge concerns of public policy into the resolution of the voluntariness issue. Such concerns are more properly to be taken into account in the context of the third, discretionary, ground for the exclusion of confessional evidence. As noted above, that ground is here relevant only to the appeal of Mr Clarke. Nevertheless, reference to the background considerations is appropriate at this stage to provide a transparent foundation for the resolution of the parties' arguments concerning voluntariness in the present factual context. As noted above, the various common law bases for the exclusion of confessional evidence overlap with one another. Thus, a common explanation of the law's general hostility to involuntary confessions in earlier times was the proneness of such confessions to be unreliable. Yet this is not now generally seen as the sole justification for the voluntariness rule in either of its manifestations146. Other considerations (including respect for the basic rights of an accused and discouragement of undesirable conduct by police and other public officials) supplement explanations of voluntariness focusing on reliability. Likewise, considerations that inform decisions about "basal voluntariness" may overlap those relevant to the exercise of the judicial discretion to exclude even confessional evidence considered to have been given voluntarily and to be reliable. When facing a new evidentiary problem, such as the present, it is more likely that the correct ambit of the applicable categories, and their accurate application to the circumstances of the case, will follow from a candid acknowledgment of the most important factors of legal principle and policy that will be in the mind of a court when deciding such questions. Considerations favouring admissibility: The following considerations of legal principle or policy tend to favour the admissibility of the confessional 144 eg R v Tofilau (2003) 13 VR 1 at 22-27 [76]-[89] per Osborn J. 145 R v Tofilau [No 2] (2006) 13 VR 28 at 70-71 [181]-[182] per Vincent JA. 146 cf reasons of Gummow and Hayne JJ at [42]-[43]; joint reasons at [285]-[293]. See also Schrager, "Recent Developments in the Law Relating to Confessions: England, Canada and Australia", (1981) 26 McGill Law Journal 435 at 446. Kirby evidence gathered by the "scenario techniques" to which the appellants object in these appeals: The crimes alleged against the appellants were all very serious, being in each case homicide. The killings involved were unresolved. It is to be expected that modern police forces will seek to clear up such crimes. Inevitably, such crimes are of great concern to the community and to the family and friends of the victim. Clearly, it is in society's interest that wherever possible, such crimes should be resolved in a public trial based on substantial evidence147; In so far as the use of "scenarios" and like trickery and deception by police officers is criticised as objectionable, a principle of proportionality may apply. The "scenario techniques", for reasons of their complexity and sheer expense, have (so far) been confined to cases of homicide such as those here under consideration. They have not been deployed to clear up less serious crimes. Where homicide is concerned, society has the strongest interest in bringing offenders to justice because of the particular value accorded by our community to safeguarding human life; The confessional evidence of the appellants, secured in the course of "scenarios", was apparently reliable, in the sense that it was accurately recorded. Its technical reliability was not contested. If part of the common law's caution over the admission of confessional statements stemmed from an anxiety about their content reliability, that concern can safely be put aside in these appeals; In so far as it may be suggested that the confessional evidence was unreliable in a different sense, as for example that it was the result of bravado, boasting, giving the interrogator what he or she wished to hear, or otherwise affected by extraneous motives, such considerations could be left to be argued before the jury which would be aware of such dangers; (5) Australian police services need not only to use the most modern technology but also new techniques of investigation found to be successful in comparable police forces overseas. Just as some criminals have become more sophisticated, so policing techniques must also advance to ensure that those who are suspected of crimes are rendered accountable for them before the independent courts148; 147 cf Swaffield (1998) 192 CLR 159 at 217 [147]. 148 cf Swaffield (1998) 192 CLR 159 at 217 [147]. Kirby (6) A distinction needs to be drawn between cases where police officers and other public officials themselves become involved in criminal acts and instances where (as in the present appeals) there was no actual criminal conduct on the part of police, simply "scenarios" giving a false appearance of criminality149. Different considerations might arise had there been any involvement of police in criminal acts. Those considerations can be disregarded in the present appeals; (7) Apart from homicide, other offences, difficult to detect yet important to prevent, may demand the use of trickery and deception in undercover police operations, for society's protection. Anti-terrorist policing, for example, may necessitate infiltration of illegal or anti-social organisations for the purposes of preventing very serious offences or, where they have occurred, bringing offenders to justice. In these and other cases, it should not be expected that police, any more than the suspects, will conduct their activities according to the rules of a gentlemanly sporting club; and (8) Acknowledging that social values, like police techniques, change over time, a question may ultimately be presented as to whether the "informed community", giving effect to "prevailing community standards", would expect that a reliable confession to a previously unsolved case of homicide would be excluded from the trial of persons such as the appellants. In Tofilau, asking to extract confessional evidence from the appellant would be viewed as "a dirty trick, one that shocks the community"150, the trial judge (Osborn J) concluded that the overall discretion to reject such evidence should not be exercised against reception of the evidence151. Is a similar conclusion to be expressed in judging whether the confessional statements are to be classified as "voluntary" or "involuntary"? the question whether what was done remains to decide whether, notwithstanding foregoing the considerations voluntariness test in Australia (which is wider than that applied in other countries152) demands a different outcome. the confessional statements, reception of favouring the Considerations favouring inadmissibility: The following arguments of legal principle and policy tend to favour the exclusion of such evidence: 149 cf Ridgeway v The Queen (1995) 184 CLR 19 at 30. 150 R v Collins [1987] 1 SCR 265 at 287. 151 (2003) 13 VR 1 at 26-27 [89]-[90] applying R v Unger (1993) 83 CCC (3d) 228. 152 Tofilau [No 2] (2006) 13 VR 28 at 68 [174]. Kirby The use of such evidence, consciously collected by sworn officers of police, tends to undermine both the principle of the common law protective of a suspect's "right to silence"153 and also a basic principle of the international law of human rights to which Australia has subscribed154. Such international principles can properly inform the expression of the common law of Australia155, and add a new dimension, not considered in past cases, for the elaboration of the common law; The "scenario technique", by its psychological impact, has an inherent tendency to overbear the will of the target. It deprives the target of a warning about the fact that statements made may be recorded and later used against him or her, notwithstanding that he or she is in fact being interrogated by police. It also tends to deprive the target of access to a lawyer before providing incriminating confessional evidence that may prove critical at trial; The techniques used, including deception and trickery, and the bypassing of ordinary police obligations to warn a suspect before interrogation, sit uncomfortably with the accusatorial character of criminal proceedings in Australia156. In several recent decisions, this Court has insisted upon the observance of the requirements of the accusatorial trial. One of the most important of such requirements is the need to uphold both the accused's "right to silence" during official investigation and his or her right to be warned about the potential consequences of self-incrimination during interrogation. The use of "scenario techniques" in effect allows undercover police officers to circumvent these requirements. Yet they are requirements that those officers would be expected to observe if wearing their uniforms. In this sense, the techniques tend to undermine special features of the administration of criminal justice that comprise an important check on the power of the state and on its intrusion into the lives of all persons; 153 R v Sang [1980] AC 402 at 436 per Lord Diplock. See joint reasons at [291]. 154 International Covenant on Civil and Political Rights, Art 14.3(g): "In the determination of any criminal charge against him, everyone shall be entitled to the following minimum guarantees, in full equality … Not to be compelled to testify against himself or to confess guilt." 155 Mabo v Queensland [No 2] (1992) 175 CLR 1 at 42. 156 See RPS v The Queen (2000) 199 CLR 620 at 630 [22]; cf Rogers v Richmond 365 US 534 at 540-541 (1961). Kirby The use of "scenario techniques" also has an inherent tendency to select vulnerable persons, playing on the very "hope" and "fear" that has traditionally been the source of the common law's insistence upon "great chastity"157 in the reception into evidence of testimony that has been influenced by threats or promises made by persons in authority. Where the question is whether the will of an individual has been overborne, the vulnerability of the individual concerned, whether on grounds of "age, background [or] psychological condition"158 has conventionally been treated as significant. As Brennan J repeatedly said159: "Voluntariness is not an issue to be determined by reference to some hypothetical standard; it requires a careful assessment of the effect of the actual circumstances of a case upon the will of the particular accused." (5) A particular problem with "scenarios" is that they involve the suspect in conduct which shows him or her to be willing to become implicated in illegal acts, even if no real illegality actually eventuates. This of itself puts the suspect into a disadvantageous position. It does so by a type of entrapment, organised by police. It reveals the suspect in a bad light before the trial judge and jury. It makes it next to impossible for the suspect, "whose liberty is at stake and who stands to be condemned on the undercover officer's evidence if his credibility is unchallenged", to make proper checks on the background of the police officers concerned and to challenge them, given that such officers "have necessarily led a Jekyll- and-Hyde life and … in their undercover work have had to lie convincingly and dissimulate"160; Especially significant in this respect is the fact that the deception and trickery is performed by agents of the state who deliberately set about pretending to perform illegal and improper acts. Displacing the usual assumption that the state and its officials will always act with honesty, integrity and lawfulness, the conduct of "scenarios" comprises an arguable 157 R v Thompson (1783) 1 Leach 291 at 293 per Hotham B [168 ER 248 at 249], cited in joint reasons at [275]. 158 Collins (1980) 31 ALR 257 at 307 per Brennan J. 159 Swaffield (1998) 192 CLR 159 at 170 [11] quoting Collins (1980) 31 ALR 257 at 160 R v Hughes [1986] 2 NZLR 129 at 148. See also R v Hines [1997] 3 NZLR 529 and Lusty, "Proposed Witness Anonymity Laws Violate the Right to a Fair Trial and Arguably Infringe Ch III of the Constitution", (2004) 28 Criminal Law Journal Kirby misuse of state power by persons who are expected to behave in an impeccable manner161. It involves agents of the state taking advantage of their own apparent criminality and wrong-doing; Pessimists might view official involvement in deception, trickery and apparent criminality as a further instance of the attainment of state objectives, and in particular criminal confessions, through undesirable isolation, sleep deprivation, practices (such as suspects162; and humiliation and psychological manipulation of international rendition163). As a matter of general principle, the extension of such practices is not to be encouraged164. Ultimately, the only institutions that are likely to curb them are the courts165; torture, prolonged (8) Where legislation expressly authorises the employment of novel investigative techniques, individual rules will generally be stated in ways that take into account the need to restrain state officials from descending to unacceptable conduct for the purpose of securing evidence in a particular case. The fact that no such legislation has been enacted in relation to "scenario techniques" should not be permitted to found an assumption that the use of such techniques is subject to no legal restraint. It is possible for the cost of obtaining relevant evidence to be too high166; and The grave nature of the crime of homicide and the affront that unsolved crimes (or those that must remain unsolved because of the exclusion of inadmissible confessional evidence) occasion do not license disregard for 161 R v Looseley [2001] 1 WLR 2060 at 2068; [2001] 4 All ER 897 at 904; Bronitt, "Taking Privacy Rights Seriously: Engaging with Undercover Law Reform", (2003) 27 Criminal Law Journal 113 at 116. 162 See eg Greenberg and Dratel (eds), The Torture Papers: The Road to Abu Ghraib, (2005); Miles, "Medical Ethics and the Interrogation of Guantanamo 063", (2007) 7(4) American Journal of Bioethics 5. 163 See eg Skinnider, "The Art of Confessions", (2005) at 32-33. 164 cf A v Home Secretary (No 2) [2006] 2 AC 221 at 287 [113] citing Holdsworth, A History of English Law, [3rd ed] (1945), vol 5 at 194. 165 Wong Kam-Ming v The Queen [1980] AC 247 at 261. See joint reasons at [292]. 166 Bunning v Cross (1978) 141 CLR 54 at 72 citing Pearse v Pearse (1846) 1 De G & Sm 12 at 28-29 [63 ER 950 at 957]. The passage was cited in the Court of Appeal in Tofilau [No 2] (2006) 13 VR 28 at 61 [149] per Vincent JA. Kirby the basic principles of our law. In the gathering of evidence, the end rarely, if ever, justifies the deployment of any means167. Were it otherwise, routine torture in the cause of gathering evidence to solve the most serious crimes might be justified, despite the affront that such conduct occasions to human dignity, as well as the danger it presents for the reliability of the resulting testimony and for the integrity of those state officials involved. Some evidence, even if arguably relevant and reliable, is excluded by the operation of legal rules because of the basic principles observed in our system of criminal justice. Those principles pervade the administration of criminal law in Australia. The securing of convictions, even in cases of unsolved homicide, must comply with the law, which reflects fundamental notions of justice and fairness. The state is a great teacher in society. If it sets debased standards for itself, there is a risk that such standards will proliferate and result in a lowering of confidence in the state and its officials and of respect for the rule of law. Some additional facts Understanding the appeals: Having now described the background of policy and principle against which the particular requirements of the common law in the present context are to be elicited, it is necessary to add some detail to the skeletal description of the facts of each appeal contained in the reasons of Gummow and Hayne JJ168, and in the joint reasons169. Only if some additional facts are mentioned will the force of the appellants' several submissions in relation to the voluntariness rule be fully understood. The appeal of Tofilau: So far as Mr Tofilau's appeal is concerned, the confessional statements in question were considered in a voir dire in which three undercover police officers, as well as their "controller" gave sworn evidence. The "controller" testified that he coordinated, supervised and planned the operation, the purpose of which was to make the suspect "feel comfortable about talking about his involvement in the crime". Mr Tofilau was told that "Mark Butcher" and "Tui Brown" were able to "organise things" with "Corey", identified as a corrupt member of the Drug 167 Bronitt, "Taking Privacy Rights Seriously: Engaging with Undercover Law Reform", (2003) 27 Criminal Law Journal 113 at 114, 118. See also R v Mack (1988) 44 CCC (3d) 513 at 541 cited in Ridgeway (1995) 184 CLR 19 at 36. 168 Reasons of Gummow and Hayne JJ at [70]-[80], [83]-[87], [89]-[95], [100]-[107]. 169 Joint reasons at [220]-[241]. Kirby Squad who provided assistance to the "gang". He was led to believe that the police investigation of him, in respect of his involvement in the death of Belinda Romeo, would be made to conclude, being halted by the corrupt officer pursuant to a request by "Butcher" to that effect. Mr Tofilau would then be neither subject to further police attention or investigation in relation to the death of Ms Romeo, nor charged with any offence in respect of that death. He would also be given access to $10,000 from a safe deposit box. He would be admitted into the "gang" as one of its members. The trial judge accepted that Mr Tofilau was "completely deceived" by the operation, and that he believed that the superiors in the gang had the capacity to "fix things with the police"170; and also that he was "exhorted" and "harangued" to make a confession171. The statements made to Mr Tofilau contained implied threats as to the potential dangers of further attention from the police and other distinct disadvantages if he did not tell the "truth" to the boss of the gang172. The trial judge accepted that the confessional statements were elicited from Mr Tofilau in what was the "functional equivalent" of a police interrogation173 and that he was "manipulated" by the undercover agents to bring about a mental state in which he was likely to confess to a crime174. Nevertheless, the trial judge rejected the submission that the statements were involuntary. He admitted them into evidence.175 His ruling was upheld by the Court of Appeal. The appeal of Marks: Mr Matthew Marks was tried before Coldrey J and a jury where similar evidence was adduced on a voir dire. At the conclusion of the hearing his Honour ruled that the prosecution could lead the confessional statements in evidence at the trial176. The general background to Mr Marks's case is set out in other reasons177. However, those reasons do not explain the way in which it was represented to 170 Tofilau (2003) 13 VR 1 at 6 [15], 15 [48]. 171 Tofilau (2003) 13 VR 1 at 5 [12], 19-20 [66]. 172 Tofilau (2003) 13 VR 1 at 15 [48]-[50]. 173 Tofilau (2003) 13 VR 1 at 19 [66]. 174 Tofilau (2003) 13 VR 1 at 20 [70]. 175 Tofilau (2003) 13 VR 1 at 27 [91]. 176 R v Marks (2004) 150 A Crim R 212. 177 Reasons of Gummow and Hayne JJ at [83]-[87]; joint reasons at [227]-[231]. Kirby Mr Marks, by the undercover police officer with whom he principally dealt ("Rick Baxter"), that the head of the gang ("Gary Butcher") had influence over a corrupt police officer ("Royce") who could "fix up" any "drama" with the police. Such influence extended to the matter in which Mr Marks was being investigated by the homicide squad. "Baxter" represented to Mr Marks that "Butcher" could make things of concern to him (including evidence) "disappear". Mr Marks was later told by "Butcher" that word had come from police that he was a suspect in a murder investigation, and that "Butcher" wanted to know what the problem was so that an alibi witness could be found or evidence made to disappear. The trial judge, in his ruling, concluded that Mr Marks was subjected to "a massive and elaborate subterfuge" and "a degree of manipulation and exploitation"178. He also found that Mr Marks's confession was "the result of various inducements" made to him by members of the gang who were, in fact, police officers.179 He nevertheless admitted the evidence in the trial180. His ruling was upheld on appeal by the Court of Appeal. The appeal of Hill: Mr Hill was arraigned before Bongiorno J and a jury. A ruling was made upholding the admissibility of the confessional evidence in his case. That ruling was upheld by the Court of Appeal181. The background facts are stated in other reasons182. However, those reasons do not explain the inducements that were held out to Mr Hill. On 19 separate occasions Mr Hill met an undercover police officer whom he knew as "Pat Austinn". He was led to believe, and did believe, that "Austinn" was a member of a criminal gang. "Austinn" introduced Mr Hill to "Mark Butcher", identified as the head of the gang who had contacts with and influence over a corrupt police officer. Mr Hill was informed that the matter in which he was being investigated by police (a murder) was something the gang "could take care of if he passed the checks". He was told that "good … money" was paid by the gang to police to ensure that they could "fix" any problem. The undercover operation culminated in a meeting between Mr Hill and "Butcher" in which the former admitted to attacking the deceased with a house brick, but at first denied 178 Marks (2004) 150 A Crim R 212 at 229 [99]. 179 Marks (2004) 150 A Crim R 212 at 229 [99]. 180 Marks (2004) 150 A Crim R 212 at 231 [116]. 181 R v Hill [2006] VSCA 41. 182 Reasons of Gummow and Hayne JJ at [89]-[95]; joint reasons at [232]-[236]. Kirby being responsible for leaving him in the condition in which he was later found. This denial led to an indication that there could be a "problem" because "Butcher" did not believe Mr Hill, whereupon Mr Hill revised his account somewhat. "Butcher" continued to press Mr Hill as to certain details, but the latter averred that his revised account was "the … honest truth". "Butcher" accepted this and represented that he wanted to "sort it out". The trial judge found that the undercover police had made it clear to Mr Hill that untruthful denials might jeopardise the criminal activities of the "gang". However, he found that the representations made to Mr Hill were not an "inducement" nor were "Austinn" or "Butcher" to be treated as "persons in authority". For this latter ruling, he relied on the approach adopted by Osborn J in Tofilau. The confessional evidence was admitted. The Court of Appeal accepted that it had been made "as a result of persistent questioning by [the] undercover operatives"183. However, the trial judge's ruling on the evidence was upheld. The appeal of Clarke: The same pattern of events was disclosed in the trial of Mr Clarke before Kellam J and a jury. A voir dire was conducted. This showed that, during a conversation between Mr Clarke and two undercover police officers ("Terry Batchelor" and "Mark Cassidy") posing as members of a criminal gang, one produced a fictitious document (described as a "prop") apparently emanating from Victoria Police. It purported to disclose that Mr Clarke was the only suspect in the crime of murder of the deceased. It also stated that a circumstantial case against Mr Clarke had been developed. On further inquiries being made, approval was to be sought from the Director of Public Prosecutions to charge Mr Clarke with murder. The "prop" lent an air of authenticity to the claim of "Batchelor" and "Cassidy" to speak with authority concerning the favourable internal consideration of Mr Clarke's case within Victoria Police. It gave the appearance that gang members had the power to influence police or prosecution decisions affecting Mr Clarke. Evidence was given by the "controller" of the covert operation. He agreed that the intention was to lead Mr Clarke to believe that "Cassidy" was the "boss" of a powerful and violent criminal organisation and had the ability to control corrupt police, who did favours for the criminal gang. Mr Clarke was led to believe that problems could be fixed if he were to confess to the killing of the deceased. At one stage Mr Clarke was told by "Cassidy", "now if you say to me I didn't do this I can't fix it". Despite these pressures Mr Clarke continued for some time to deny involvement in the death of the deceased. "Cassidy" told him that he did not 183 [2006] VSCA 41 at [3] per Callaway JA. Kirby believe him and that it was Mr Clarke's "one and only chance". The message could not have been more blunt. That was the point at which the "prop" was produced, with "Cassidy" saying to Mr Clarke: "What do you want to do about it? Because I'm telling ya this is not going to go away. You can deny it 'til the cows come home. I can't have you hanging around with us." Evidence suggested that, at this time in his life, Mr Clarke was specially vulnerable because he was hoping to get married. The trial judge admitted the confessional statements procured following the foregoing exchange as voluntary184. The Court of Appeal upheld that decision185. Common features of the appeals: The common features of the evidence in the four appeals, relevant to the issues of voluntariness are: Each appellant was subjected to sustained, prolonged, intense pressure to admit his involvement in a murder which, at first, he denied; Each persisted in denial of guilt for a period of time but ultimately made a confessional statement; The confessional statements were made to persons who were in fact police officers, acting covertly; The police officers concerned used techniques that played on each appellant's fear of being prosecuted for murder and on his hope of joining a criminal gang, thereby securing financial advantages, and more importantly, gaining access to corrupt police who could "fix up" the otherwise looming problem of criminal prosecution; Each appellant did not know that the persons with whom he was dealing were police officers186; but each of those persons represented that they had the power, through police officers whom they effectively controlled, to influence and alter the course of future criminal proceedings to the appellant's advantage; 184 R v Clarke [2004] VSC 11. 185 R v Clarke [2006] VSCA 43. 186 Crimes Act 1958 (Vic), s 464J [right to remain silent]. Kirby The confessional evidence was, in each case, procured through what was effectively an interrogation and not a neutral investigation that allowed the appellant to tell his own story in his own way; (7) Although none of the appellants was in physical custody at the time the confessional statements were made, each was suspected by police of homicide in circumstances where police believed that there was insufficient evidence to sustain a successful prosecution. The purpose of the "scenarios" was to repair the evidentiary gap in the prosecution case;187 and By reason of the course adopted, each of the appellants was deprived of a warning which the police officers, acting as such, would ordinarily have given concerning the appellant's "right to silence"; the recording of the evidence; its possible later use in a trial of the appellant; and the availability of access to a lawyer before giving inculpating confessional testimony to the police. The issues: The principal issue presented by the foregoing features of the evidence in these appeals thus becomes whether the appellants, or any of them, are entitled to complain of breach of the requirement that, to be admissible, confessional statements must be voluntary. Specifically: The confessional inducement issue: Did the confessional statements, or any of them, breach the inducement rule, being confessional statements impermissibly induced from the appellant by persons in authority? The basal voluntariness issue: Were the confessional statements otherwise inadmissible as procured in breach of the requirement of "basal voluntariness"? The s 149 Evidence Act issue: If the confessional statements were obtained in breach of the inducement rule or otherwise subject to exclusion, are they nonetheless admissible by reason of s 149 of the Evidence Act? The discretionary exclusion issue: In the case of Mr Clarke, if neither of the foregoing grounds of exclusion is established or if s 149 authorises reception of the evidence, were his confessional statements inadmissible under the general judicial discretion to exclude confessions obtained unfairly, unlawfully or otherwise in ways contrary to public policy? 187 cf joint reasons at [219]. Kirby In successive decisions, the Court of Appeal determined the above questions adversely to each of the appellants. By special leave, they are now before this Court challenging those determinations. Voluntariness: inducement by persons in authority Persons in authority: Although, in Hill, Bongiorno J concluded that the various statements made by the undercover police agents did not amount to "inducements"188, I would not accept that conclusion, given the purposes of the inducement rule. The inducement rule is addressed to statements and conduct of "persons in authority" that are designed to operate on the mind and will of a person suspected of criminal wrong-doing. The question which the rule raises is whether such statements or conduct caused a suspect to make a confession or admission against his or her own interest. In the relevant sense, it is apparent that the repeated, insistent statements made by the undercover agents to each of the appellants comprised "inducements". The substantial issue in these appeals is whether, for the purposes of the inducement rule, the undercover police were "persons in authority", as that term is used in the present context. inducement rule189, and specifically of I am indebted to the joint reasons for their helpful survey of the history of the in authority" requirement190. Those reasons have identified various bases that have been advanced, long before the present problem presented, for the existence of both the rule and the requirement. the "person In numerous cases it has been held that "persons in authority" include police officers, prosecutors and other like officials. Indeed, wider categories of such persons have been recognised. However, it is not necessary in these appeals to consider that feature of the rule. The undercover agents who procured the confessions relied on by the prosecution from each of the appellants were indisputably police officers. To that extent, they were in fact "persons in 188 An "inducement" for the purposes of the rule is any statement or representation that suggests that the outcome of making confessional statements will be a beneficial result for the accused, including a result that no prosecution will be conducted. See Cornelius v The King (1936) 55 CLR 235 at 245; Stapleton v The Queen (1952) 86 CLR 358 at 375-376; DPP v Ping Lin [1976] AC 574 at 594-595; Heydon, Cross on Evidence, 7th Aust ed (2004) at 1126 [33640]. 189 Joint reasons at [268]-[292]. 190 Joint reasons at [283]-[284]. Kirby authority". The question for decision is whether the law requires an accused, later complaining of inducement, to have known that the persons making the inducement were themselves such persons. Specifically: Is it sufficient that the persons who make the inducement are in fact persons in authority, although that fact is unknown to the suspect and only subsequently revealed? Is it sufficient that the suspect knows or believes that the persons making the inducement have effective control over persons in authority who can influence the course of a criminal prosecution against the suspect? Is it essential that the "persons in authority" have, and are known or believed to have, lawful power to control or influence the course of a criminal prosecution of the suspect191? None of these issues has hitherto been decided by this Court. Overseas judicial authority is of limited persuasive power because of the broader view that has been taken in Australia of "basal voluntariness". It is against this background that I approach the foregoing questions. I agree with the joint reasons that they are not to be answered by treating the words of selected earlier judicial reasons as if they presented a statutory formulation yielding the solution192. Much safer is the derivation of the ambit of the inducement rule by reference to its basic purpose as a species of the cautious response of the common law to confessional evidence in general, and in particular where that evidence is the product of statements and representations by a public official playing on the suspect's hopes and fears. Functional analysis of the rule: I accept, as the joint reasons have demonstrated, that judicial authority may be found to support the arguments advanced in these appeals both for the appellants and for the prosecution. Because the joint reasons outline this authority most thoroughly, I will not deal with it in these reasons. This Court must choose an expression of the rule, applicable to these cases, that not only best represents a proper extension by analogy of the common law that has previously existed in Australia, but also most effectively upholds the purpose for which the limitation on the admissibility of confessional statements made to "persons in authority" exists. That purpose takes this Court back to the 191 cf reasons of Gummow and Hayne JJ at [29]; joint reasons at [266]-[267]. 192 cf the joint reasons at [295] referring to the appellants' argument based on R v Dixon (1992) 28 NSWLR 215 at 229. Kirby context of the rule (upholding the voluntariness of confessional statements generally) and the object of the particular sub-category of the rule (addressing the capacity of people with access to the levers of power and decision-making over criminal proceedings to influence "by promises of favour"193 both the decision to make a confessional statement and its contents). These two considerations (context and purpose) lend force to the appellants' submission that the requirement that the "inducement" be made by a "person in authority" is satisfied in cases such as the present. Specifically, it is satisfied if the persons making the inducement were in fact (as all of the undercover police officers were here) "persons in authority", and if those persons represented themselves to be (and were believed by the suspect to be) persons with authority and power to influence the course of a criminal prosecution against the suspect. The coincidence of these factual elements tends to overbear the will of the suspect and his or her interest and entitlement to be silent, and to induce him or her to make damaging, inculpating statements against interest. It is this feature of the "inducement" that attracts the inducement rule. To limit the class of "persons in authority" to those whom an accused knows or believes to have lawful authority makes no sense if the reason for the rule is to discourage officials from exploiting hope or fear to procure confessional statements from suspects against their own interest. There is no point to requiring that the person in authority must act, and be believed to act, in a lawful way. By definition, any public official, with relevant power, who represents to a suspect that power over a criminal prosecution will be used in a manner favourable to that suspect is, regardless of the strict legal merit of the representation, acting unlawfully. No public official – police officer, prosecutor or otherwise – may utilise such powers in any way alien to the purposes for which those powers are afforded to them by law. It is therefore of the essential nature of statements and representations of the kind addressed by the inducement rule that, normally, they will have been made for unlawful purposes, alien to the reasons for which the power was granted to the public official concerned. To impose a requirement that the suspect must be aware that the person making the inducement is, himself or herself, a person in authority (as distinct from one able to pull the levers of authority) restricts the operation of the rule in an unnecessarily artificial way. Even more clearly, to limit the rule to cases where the person in authority operates, or is believed to operate, lawfully is quite unrealistic. Indeed, it is counterproductive when the very nature of the power that engenders the hope or fear is such that it will be deployed unlawfully and corruptly. 193 Warickshall (1783) 1 Leach 263 at 264 [168 ER 234 at 235]. Kirby Whilst the ambit of the rule is not to be found, statute-like, in the formulation which Wood J used in Dixon194, that formulation ("seen by the accused by virtue of his position, as capable of influencing the course of the prosecution, or the manner in which he is treated in respect of it") was obviously carefully chosen by that experienced judge. Its terms lend support to the appellants' submissions concerning the applicable legal principle. The same can be said of the comment (for that is all it was) of Davies JA in R v Kassulke195. The inducement rule was explained in that case by reference to deterring improper pressure by persons who are in fact officers of the state in order to avoid unreliable confessional statements motivated by hope or fear procured by such officers.196 With respect to those of the contrary view, I find the analysis of Davies JA, and his preference for a "rational" over an "historical" operation of the inducement rule, most persuasive. Of course, some judges consider that finding binding legal authority demands of a court such as this an exercise in historicism, if not archaeology197. But when this Court faces a novel legal problem, such as that presented by "scenario" induced confessions, the answer should be found in a functional analysis. In that analysis, history has a part to play, but not to the exclusion of a rational ascertainment of the object that the inducement rule is intended to serve in contemporary circumstances. Canadian analysis in Grandinetti: The most substantial argument in favour of the respondent's interpretation of "person in authority" is that it derives support from the unanimous reasons of the Supreme Court of Canada in R v Grandinetti198. In that case, Abella J, giving the opinion of the Court, said199: "The underlying rationale of the 'person in authority' analysis is to avoid the unfairness and unreliability of admitting statements made when the 194 (1992) 28 NSWLR 215 at 229. 195 [2004] QCA 175 at [19]. See joint reasons at [299]-[304]. 196 [2004] QCA 175 at [21]. 197 See Coventry v Charter Pacific Corporation Ltd (2005) 227 CLR 234 at 266-267 [108]-[113]; Central Bayside General Practice Association Ltd v Commissioner of State Revenue (2006) 80 ALJR 1509 at 1530 [96]; 229 ALR 1 at 26. 198 [2005] 1 SCR 27. 199 [2005] 1 SCR 27 at 38 [35] (emphasis added), quoting R v Hodgson [1998] 2 SCR Kirby accused believes himself or herself to be under pressure from the uniquely coercive power of the state. In Hodgson, although explicitly invited to do so, the Court refused to eliminate the requirement for a 'person in authority' threshold determination. As Cory J stated, were it not for this requisite inquiry, 'all statements to undercover police officers would become subject to the confessions rule, even though the accused was completely unaware of their status and, at the time he made the statement, would never have considered the undercover officers to be persons in authority.'" Because of the respect owed to the Canadian Court, because of the similarity of the applicable common law and because the "scenario techniques" here in issue originated in Canada, it is proper to pay considerable attention to that Court's holding on this subject. Undoubtedly, it supports the decisions of the courts below. If correct, it is fatal to the appellants' submissions on the inducement rule. For a number of reasons, however, I am unpersuaded by the Supreme Court's exposition. First, as already stated, the Australian common law on voluntariness (of which the inducement rule is a sub-category), has developed differently to, and more broadly than, its overseas counterparts. Especially because of the gradual acceptance of the Uniform Evidence Acts in Australia, any elaboration of the common law on this topic should not depart from the previous approach in this country. It should maintain the comparative strictness of the remaining categories of cases to which the common law continues to apply. Secondly, some of the passages in the reasons of the Supreme Court of Canada in Grandinetti, immediately before and after the paragraph just cited, indicate peculiarities of the Canadian law that make a literal borrowing of the stated rationale for defining "person in authority" somewhat unsafe. Just prior to the paragraph excerpted above, Abella J cites an additional passage from Cory J's reasons in Hodgson explaining that the "person in authority" requirement is "appropriate since most criminal investigations are undertaken by the state, and it is then that an accused is most vulnerable to state coercion200". However, "state coercion" and the "uniquely coercive power of the state" can be brought to bear on the will of a suspect not only by those who are known to be public officials but also by those who appear to control the levers of state power, although apparently holding no state office themselves. Moreover, immediately following the cited passage, Abella J goes on to refer to the "filter" available in Canada under the Canadian Charter of Rights and Freedoms. The Charter operates to 200 Hodgson [1998] 2 SCR 449 at 467 [24]. Kirby prevent the admission of statements that "undermine the integrity of the judicial process"201. This "filter" has no precise equivalent in Australia. Any Australian common law rule must be fashioned without the benefit of access to such a "filter". Preferred analysis of Grandinetti: For the purpose of deriving the Australian common law rule, the reasoning in the Alberta Court of Appeal of Conrad JA, in dissent, when Grandinetti was in that Court202, is in my opinion both correct and compelling. In her reasons, Conrad JA concluded that the trial judge in that case had interpreted the meaning of "person in authority" too narrowly. She said203: "The trial judge should have determined whether the accused believed that the recipient could influence the prosecution and whether that belief was reasonable. This test does not require that the maker of a statement believe that any prosecutorial inducement be for the good of the state. A maker of a statement must merely have a subjective belief, reasonably held, that the person to whom he is talking has a sufficient connection with the prosecution to affect the prosecution. The law does not require that an accused also make a qualitative analysis of whether any promise or inducement furthers the objects of the state." In explaining her broader view, Conrad JA approached the problem in the way that I too would favour204: "I find support for this conclusion in the very policy behind the voluntariness rule, namely, that of ensuring fairness in the criminal process. The confessions rule serves to discourage police officers from engaging in undesirable investigative techniques. A police officer cannot promise a prosecutorial favour in return for a statement. To allow an undercover operation to rely on its relationship with the police to obtain a 201 [2005] 1 SCR 27 at 38 [36]. 202 (2003) 178 CCC (3d) 449. 203 (2003) 178 CCC (3d) 449 at 485 [113]. 204 (2003) 178 CCC 3(d) 449 at 487 [117]-[118]. The Supreme Court's decision in this respect has been criticised. See Skinnider, "The Art of Confessions", (2005) at 17: "The conclusion that only a person who has visible power over the proceedings against an accused has the power to coerce a confession is flawed. This view seems to lack the foresight to acknowledge the scenario involving private citizens holding knives to throats or police officers posing as criminals advising suspects to confess or risk the fate of other would be informants". Kirby statement would be to allow the police to do indirectly that which it cannot do directly. I accept that in the normal case police officers operating undercover are not considered persons in authority. But the reason for this is that the accused must believe there is a connection between the recipient of his statements and the prosecution. An accused who speaks to an undercover officer believes he is talking to a civilian. But where an undercover operation includes, as part of its ruse, an association with the police, and the suggested ability to influence the investigation and prosecution of the offence, it loses its protection from the confessions rule. Put another way, if undercover officers pretend to associate themselves with the police in such a way as to make it reasonable for an accused to believe that they can influence the prosecution, and an accused actually believes them, the officers can be persons in authority." The foregoing explanation provides what I regard as a functional, as distinct from a purely historical or verbal, approach to the inducement rule. The function of the rule is to prevent people who are in fact public officials, and are believed by the suspect to have power over the bringing of a criminal prosecution, using their power to instil the type of fear or hope which for centuries has been the source of the common law's caution about the reception of confessional statements by suspects. Conclusion: breach of inducement rule: Applying that approach, as I would, to the present appeals, the undercover officers involved were in fact unquestionably persons with authority. Moreover, they were believed by each of the appellants to be such because of the representations which they repeatedly made about their special capacity to control the initiation or termination of criminal investigations and prosecutions against the appellants. Any other approach to the resolution of the "persons in authority" issue in these cases would be formulaic. It would be concerned with the form rather than the substance of the common law rule. Such an approach would fail to carry forward the purpose of the rule as a sub-category of the common law's insistence on the voluntariness of confessions made to persons in authority, so defined. All of the confessional statements in issue in these appeals were profoundly influenced by the repeated inducements offered to each of the appellants so as to oblige them to make confessions in order to join the criminal "gangs" and have things "fixed up" by police officers who were under their effective control. These were classic instances of "hope" and "fear" inducing the appellants' several confessions. The circumstances were thus within the inducement rule. Subject to what follows, each of the confessional statements was therefore liable to exclusion from evidence on this ground. The trial judges and the Court of Appeal erred in law in concluding otherwise. No question of discretionary Kirby leeway arises. The legal error common to the decisions was an overly narrow conception of the "person in authority" requirement of the inducement rule in the Australian common law of evidence. The voluntariness rule: basal voluntariness An additional pathway: Because the foregoing conclusion is sufficient to entitle each of the appellants to succeed in his argument about the suggested involuntariness of his confessional statements, it is unnecessary for me to state at length an alternative pathway that leads to the same conclusion by way of the application of "basal voluntariness". However, for a number of reasons it is appropriate to address that argument. At common law, the prosecution bears the burden of proving, on the balance of probabilities, that confessional statements upon which it seeks to rely have been made voluntarily205. This common law requirement is preserved by statute in Victoria206. As an alternative to reliance on the inducement rule, each of the appellants invoked "basal involuntariness". They did so on the footing that the confessional statements tendered by the prosecution were, in each case, induced by trickery, deception, sustained pressure and repeated interrogation which they characterised as sophisticated, elaborate, extreme, persistent and destructive of their independent will. The appellants argued that the inducements held out by the undercover police officers were so substantial that they effectively deprived them of the free choice, otherwise enjoyed in law, whether to make or withhold confessional statements to persons who were police officers. In this respect, each of the appellants challenged the conclusion of the trial judges, confirmed by the Court of Appeal, to the effect that their confessional statements were the result of their own volition. Even if the undercover police were not "persons in authority" (and thus subject to the inducement rule), the appellants submitted that their will had been overwhelmed by the conduct of persons who were in fact agents of the state and who set out to subject them to a barrage of psychological pressure, lies, manipulation, exploitation and inducements. The appellants invoked the fundamental or "basal" requirement for the admissibility of confessional evidence at common law in Australia, namely that 205 Lee (1950) 82 CLR 133 at 144; Wendo v The Queen (1963) 109 CLR 559 at 562, 572-573; MacPherson (1981) 147 CLR 512 at 522, 532; Cleland (1982) 151 CLR 206 Crimes Act 1958 (Vic), s 464J(b). Kirby "a confessional statement made out of court by an accused person may not be admitted in evidence against him upon his trial for the crime to which it relates unless it is shown to have been voluntarily made"207. As the relevant authorities concerning this aspect of voluntariness are set out in the reasons of Gummow and Hayne JJ208, I will not repeat them. It is sufficient for me to incorporate them by reference. Can it be said that each of the appellants, by a voluntary exercise of his own free will, chose to respond (where he did not have to do so) to the insistent importuning of the undercover operatives, whom they believed to be their friends, to "tell the truth"? For the purpose of the principles of "basal voluntariness", were the conversations between the respective appellants and "the bosses" of the criminal "gangs" that they wished to join nothing more than free dialogues, in which self-incriminating admissions were all the more plausible because made in circumstances lacking any perceived official pressure? I find that view of the conversations a serious mischaracterisation of the exchanges that actually took place. As described earlier in these reasons, in every instance, the confessions were motivated by a combination of purposes. However, in accordance with the build-up of fear, which the "scenarios" were designed to produce, and in the hope of securing the promised assistance of pretended corrupt police officers, the appellants, and each of them, cannot in my view be said to have freely chosen to make the confessional statements that they did. Least of all did they freely do so for the purpose of enabling the later use of those confessional statements in their respective trials for murder as damaging (even possibly decisive) testimony against themselves. The relevance of Swaffield: Although Swaffield was not a case in which the parties argued questions of voluntariness, some of the remarks made in this Court in that case are apt to an understanding of the purposes of "basal voluntariness", as it exists in the context of the administration of criminal justice as practised in this country. In the joint reasons in Swaffield209, reference was made by Toohey, Gaudron and Gummow JJ to an earlier decision of the Supreme Court of Canada 207 McDermott (1948) 76 CLR 501 at 511. See also Ibrahim v The King [1914] AC 208 Reasons of Gummow and Hayne JJ at [55]-[56]. See also "Developments in the Law – Confessions", (1966) 79 Harvard Law Review 935 at 954. 209 (1998) 192 CLR 159 at 199-200 [84]-[86]. Kirby in R v Hebert210. Whilst cautioning about the use of Canadian authority, given the intervention of the Charter, the joint reasons in Swaffield cite the majority's observations in Hebert in relation to the "right to silence", which is the time- honoured antonym to the making of self-incriminating confessional statements211. As the joint reasons in Swaffield point out, McLachlin J drew a distinction between "observing a suspect and actively eliciting information in violation of the suspect's choice to remain silent"212. They quote the following passage213: "When the police use subterfuge to interrogate an accused after he has advised them that he does not wish to speak to them, they are improperly eliciting information that they were unable to obtain by respecting the suspect's constitutional right to silence: the suspect's rights are breached because he has been deprived of his choice. However, in the absence of eliciting behaviour on the part of the police, there is no violation of the accused's right to choose whether or not to speak to the police. If the suspect speaks, it is by his or her own choice, and he or she must be taken to have accepted the risk that the recipient may inform the police." This explanation of the impermissibility of elicitation by police officers was given effect in the decision in Swaffield. The conduct of a police constable, operating undercover and actively interrogating Mr Swaffield in a hotel concerning his criminal involvements, was held to have exceeded what was legally permissible. Although the resulting exclusion of the evidence was premised on the judicial discretion, the joint reasons make a point that is directly relevant to the issue of basal voluntariness under present consideration214: "However, there is [a] broader question of whether what [the police constable] did was in violation of Swaffield's right to choose whether or not to speak to the police. There is the added question whether there has been a breach of [the Judge's Rules] and, if so, the consequence for the admissibility of the conversation … What if a test is applied by reference to Swaffield's right to choose whether or not to speak to the police? The application of such a test turns, at least so far as the Canadian authorities are concerned, on the extent to which any admission was elicited. It is clear from Hebert that the 210 [1990] 2 SCR 151. 211 [1990] 2 SCR 151 at 181. 212 (1998) 192 CLR 159 at 200 [86]. 213 [1990] 2 SCR 151 at 185. 214 (1998) 192 CLR 159 at 202-203 [94], [97], [98]. Kirby Canadian Supreme Court regards the use of a subterfuge to obtain a statement as likely to be in violation of the choice whether or not to speak but even then would treat a quite unelicited admission as not calling for the exercise of the discretion to exclude. In the circumstances of this case, the admissions were elicited by an undercover police officer, in clear breach of Swaffield's right to choose whether or not to speak. The Court of Appeal was right in its conclusion [that is, in excluding the confessional statements] and this appeal should be dismissed." In my own reasons in Swaffield I too embraced a test of elicitation. I also cited Hebert215. I noted the endorsement by the Canadian judges of United States authority216: "[T]he defendant must demonstrate that the police and their informant took some action, beyond merely listening, that was designed deliberately to elicit incriminating remarks." When this test was applied in Swaffield, it led to the conclusion that the "state agent" had "actively [sought] out information such that the exchange could be characterised as akin to an interrogation"217. I observed218: "Subterfuge, ruses and tricks may be lawfully employed by police, acting in the public interest219. There is nothing improper in these tactics where they are lawfully deployed in the endeavour to investigate crime so as to bring the guilty to justice. Nor is there anything wrong in the use of technology, such as telephonic interception and listening devices although this will commonly require statutory authority220. Such facilities must be employed by any modern police service. The critical question is not whether the accused has been tricked and secretly recorded. It is not even whether the trick has resulted in self-incrimination, electronically 215 (1998) 192 CLR 159 at 219 [153]. 216 Kuhlmann v Wilson 477 US 436 at 459 (1986). 217 (1998) 192 CLR 159 at 220 [154] citing R v Broyles [1991] 3 SCR 595. 218 (1998) 192 CLR 159 at 220-221 [155]. 219 Ridgeway v The Queen (1995) 184 CLR 19 at 37; R v Christou [1992] QB 979 at 989; cf Rothman v The Queen [1981] 1 SCR 640 at 697. 220 cf Ousley v The Queen (1997) 192 CLR 69 at 134-135. Kirby preserved to do great damage to the accused at the trial. It is whether the trick may be thought to involve such unfairness to the accused or otherwise to be so contrary to public policy that a court should exercise its discretion to exclude the evidence notwithstanding its high probative value. In the case of covertly obtained confessions, the line of forbidden conduct will be crossed if the confession may be said to have been elicited by police … in unfair derogation of the suspect's right to exercise a free choice to speak or to be silent." These remarks in Swaffield apply equally, in principle, to exclusion under the "basal voluntariness" rule. Either the courts are serious about upholding the accusatorial form of criminal trial in Australia or they are not. Either they will defend suspects from conduct of police officers who set out to extract confessional statements by undercover interrogation where earlier, regular interviews have failed to afford the necessary evidence, or they will not. Either they are willing to protect an accused's entitlement to remain silent in the presence of police or other official interrogators or they are not. A case such as the present puts our courts to the test. It puts this Court to a test as to its adherence to basal principles of the common law. Conclusion: statements inadmissible: In my view, the confessional evidence secured from each of the appellants by "scenario techniques" offended the common law principle of basal involuntariness. In each case, the will of the suspect (in respect of the choice whether to speak or to withhold incriminating statements, in a context where police officers were present, and the statements were being recorded for future use in evidence) was overborne by the tactics used to extract the confessional statements. That will was overborne because tricks and deception were targeted directly at the suspect's fundamental legal right under our criminal justice system, namely to remain silent in the presence of police investigators. As to the suggestion that the tricks used by the undercover police officers were tolerable because the officers did not threaten violence, engage in unlawful conduct or use intimidation or duress to obtain the confessions,221 it is necessary to remember that violence, intimidation and duress can be deployed in different manifestations. For frightened, vulnerable people of low intellect, a physical bashing may be much less effective than trickery and manipulation. As Professor Ashworth has remarked222: 221 cf reasons of Gummow and Hayne JJ at [81], [88], [98], [108]; joint reasons at 222 Ashworth, "Should the Police be Allowed to Use Deceptive Practices?", (1998) 114 Law Quarterly Review 108 at 112. Kirby "The conduct of a person who has been deceived is in an important sense not voluntary: the behaviour is, to the extent it is governed by the deception, not under the control or the choice of the actor." A State Parliament, by enactment, might override such basic features of the Australian criminal justice system (and the rights of suspects within it). That Parliament then accepts democratic accountability before the electors for any departures from fundamental rights hitherto observed223. Courts of law should not change such basic rules. Their task is to adhere to long-established principles and to apply them neutrally. When asked to extend old rules, courts of law should only do so by analogical reasoning. They should ensure that such extensions adhere scrupulously to basic principles. Courts in this country are bound to do this, however unattractive they may sometimes regard the task. Necessity of parliamentary change: I can well understand an inclination of the mind adverse to the appellants and their arguments in these appeals. I can appreciate an intuitive objection to excluding from consideration by a jury apparently reliable confessional statements that may help to clear up unresolved cases of homicide. I am sympathetic to the need, in contemporary circumstances, for innovations in police techniques and the use of technology. I accept the bona fides of the undercover police officers, and their "controllers", engaged in these cases. I understand the force of the rhetoric of Osborn J in his ruling in Tofilau224: "[P]revailing community standards would not support the exclusion of the confessional statements in the circumstances of the present case." However, under our Constitution, courts exist to protect the legal rights of the probably guilty as well as of the possibly innocent. They exist to defend the unpopular as well as the acclaimed. We say this in the law many times in our ceremonies. But it only really matters when we are put to the test as judges to apply our rhetoric in a live case affecting real prisoners facing long sentences. If the community does not understand the importance of the rule of law and of defending time-honoured rights against self- incrimination, it is the duty of judges and lawyers to explain how these principles transcend even unpopular outcomes in particular cases. When such values are lost, all established rights are imperilled. the accusatorial trial and In Swaffield, I observed225: 223 Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476 at 492 [30]. 224 (2003) 13 VR 1 at 27 [90]. 225 (1998) 192 CLR 159 at 225 [167]. Kirby "Legislation might permit police conduct of the kind disclosed in each of these appeals. None has been enacted. If it were, it would presumably introduce pre-conditions of prior independent authorisation. It would lay down checks and limits to defend the kinds of values which have long been protected by the common law. If it derogated from those values it would do so by the authority of Parliament." Subject to the Constitution226, it was open to the Victorian Parliament to legislate in respect of the police practices the subject of these appeals. Following this Court's decision in Ridgeway227, amendments were enacted to federal law to regulate controlled operations by police and customs agents. The Federal Parliament passed the Measures to Combat Serious and Organised Crime Act 2001 (Cth)228. Where such legislation is enacted, it ordinarily includes independent checks against misuse of official power; defined limits on derogations from the normal rights of suspects; assurances to facilitate scrutiny of the means adopted by officials; and protections for innocent persons caught up in an operation. No such legislation was enacted by the Victorian Parliament to authorise and regulate state police covert operations utilising "scenario techniques" such as were deployed in each of the present cases. This Court should not authorise such operations as within the common law where they derogate so seriously from basic individual common law rights which it is normally the province of courts to defend and uphold. Recent Australian experience suggests that, if police can demonstrate a need for enhanced legislative powers, parliaments have not been slow in enacting them. This is the way to preserve the rule of law. It is not by bending basic principles of voluntariness to allow the reception of confessional statements containing damning self-incrimination induced by trickery and deception on the part of public officials. Least of all should departures from permissible police conduct which override and ignore a suspect's "right to silence" be justified ex post facto 226 Leeth v The Commonwealth (1992) 174 CLR 455 at 483-486, 501-503; cf at 466, 475; Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 99, 104, 115, 139. But see Nicholas v The Queen (1998) 193 CLR 173; cf Wheeler, "The Doctrine of Separation of Powers and Constitutionally Entrenched Due Process in Australia", (1997) 23 Monash University Law Review 248; Lusty, "Proposed Witness Anonymity Laws Violate the Right to a Fair Trial and Arguably Infringe Ch III of the Constitution", (2004) 28 Criminal Law Journal 110 at 114. 227 (1995) 184 CLR 19. 228 See Crimes Act 1914 (Cth), s 15HB; Bronitt, "The Law in Undercover Policing: A Comparative Study of Entrapment and Covert Interviewing in Australia, Canada and Europe", (2004) 33 Common Law World Review 35 at 43. Kirby on the ground that "prevailing community standards would not support the exclusion of the confessional statements"229. Doubtless, "community standards" may inform the content of the common law as expressed by the judges. However, in matters such as the present, it would be a mistake to enlist supposed "community standards" to condone departure by police officers from the basic rights of those suspected of crimes. Often it is the judges alone who will safeguard those basic rights. Elected officials, journalists and community groups sometimes prove to be no more than fair weather friends to basic legal principles and the rule of law. But it is in defending them that courts like this are put to the test. Remaining issues A number of issues remain to be dealt with. First, in each appeal, the respondent relied on s 149 of the Evidence Act. Relevantly, that section provides: "No confession which is tendered in evidence shall be rejected on the ground that a promise or threat has been held out to the person confessing, unless the judge or other presiding officer is of opinion that the inducement was really calculated to cause an untrue admission of guilt to be made … ." Because the trial judges and the Court of Appeal determined that the undercover police operatives were not "persons in authority", they held that s 149 had no application to the case230. Once it is concluded (as in my opinion it should be) that the undercover police were "persons in authority" for the purposes of the inducement rule, it is necessary, in cases arising in Victoria, to give effect to s 149. The provision would not appear to apply more broadly to the exclusion of evidence on the ground of "basal involuntariness".231 However, given the way the proceedings developed, that question has never been determined in any of the present cases. The appellants each resisted the application of s 149. They did so on the footing that the confessional statements were not "confessions" of the kind to which s 149 is addressed. They also argued that the inducements were calculated 229 Tofilau (2003) 13 VR 1 at 27 [90] applying dicta expressed in Canada in R v Unger (1993) 83 CCC (3d) 228 at 248-249 [68]-[72]. 230 See eg Tofilau (2003) 13 VR 1 at 16 [54]. 231 cf joint reasons at [390]. Kirby to cause them falsely to confess their guilt. These too are not issues that have been considered below in any of the cases. Conclusion: remit to Court of Appeal Any determination of such issues by this Court would proceed without the benefit of the opinion of an intermediate court. A disappointed party would thus lose a right to seek appellate review of the decision, itself an important privilege generally recognised in Australia, as under international law232. Consideration of the foregoing issues, if they be still relevant, should therefore be remitted to the Court of Appeal. So should any further consideration of the application by Mr Clarke for the exclusion of the confessional statements on the additional basis of the exercise of the judicial discretion. A favourable determination of the issue of voluntariness, on either or both of the grounds propounded, entitles the suspect, as a matter of law, to the removal of the affected statements from the record. In such circumstances, no judicial discretion falls to be exercised. However, Mr Clarke's issue too should be remitted to the Court of Appeal in case conclusions adverse to the appellants are reached on the application of s 149 of the Evidence Act. The prosecution did not rely on the "proviso"233 to sustain the appellants' convictions on the basis of other evidence if the confessional statements were excluded. As the joint reasons point out234, two of the appellants (Tofilau and Clarke) sought orders of acquittal and the other two (Hill and Marks) sought orders for a retrial. The proper order is therefore that each of the appeals should be returned to the Court of Appeal so that all remaining issues might be dealt with, so far as is necessary, and orders made appropriate to each case. Orders In each appeal, the following orders should be made: (1) Appeal allowed; 232 International Covenant on Civil and Political Rights, Art 14.5. See Young v Registrar, Court of Appeal [No 3] (1993) 32 NSWLR 262 at 276-280. 233 Crimes Act 1958 (Vic), s 568(1). 234 Joint reasons at [244]. Kirby Set aside the orders of the Court of Appeal and of the Supreme Court of Victoria; and Remit the proceedings to the Court of Appeal for decision conformable with these reasons. CALLINAN, HEYDON AND CRENNAN JJ. These four appeals raise for consideration the admissibility of "scenario evidence". In outline, scenario evidence is confessional evidence obtained in the following way. Undercover police officers pose as members of a gang. They solicit the cooperation of a person whom they think has committed a serious crime, although they do not believe that they are yet able to prove it. They encourage that person to take part in "scenarios" involving what the person wrongly thinks is criminal conduct. Provided that the person informs the head of the gang of anything which might attract the adverse attention of the police, they offer the person two advantages. One is the opportunity of material gain by joining the gang. The other is the certainty that the head of the gang can influence supposedly corrupt police officers to procure immunity from prosecution for the serious crime. This technique was developed in Canada and evidence obtained pursuant to it there has been held admissible by the Supreme Court of Canada235. The background in Tofilau v The Queen The trial. After a trial before the Supreme Court of Victoria (Osborn J and a jury), on 16 October 2003 Lemaluofuifatu Alipapa Tofilau ("Tofilau") was convicted of murdering Belinda Loree Romeo on 20 June 1999. She had been strangled. She had had a sexual relationship with him for the previous three months. Preliminary investigation. Tofilau gave a statement to police on 14 July 1999. He was interviewed by detectives on 29 July 1999. He made no admissions of involvement in the killing. 235 Evidence obtained by a similar technique was admitted in R v Todd (1901) 13 Man LR 364. The Manitoba Court of Appeal admitted scenario evidence in R v Unger (1993) 83 CCC (3d) 228. In R v Hodgson [1998] 2 SCR 449 at 475 [36] a test was stated which, if correct, rendered the evidence admissible (see below at [300]). The Supreme Court of Canada reaffirmed the test specifically in relation to scenario evidence after the trials in the present appeals had taken place, and held that type of evidence admissible: R v Grandinetti [2005] 1 SCR 27. There are rulings of trial judges other than those under challenge in these appeals permitting the reception of scenario evidence, but they did not turn on the question of whether there was a person in authority: Director of Public Prosecutions (Vic) v Ghiller (2003) 151 A Crim R 148; R v Favata [2004] VSC 7 (an appeal against conviction being subsequently allowed on other grounds in R v Favata [2006] VSCA 44); State of Western Australia v Lauchlan [2005] WASC 266. Use of scenarios. From December 2001 the police carried out an undercover operation in which particular officers posed as members of a criminal gang. At a meeting on 17 March 2002 an undercover officer told Tofilau that he did not believe what he had earlier said about the death of Belinda Romeo and that he believed that Tofilau had killed her. That officer exhorted Tofilau to confess, and Tofilau proceeded to admit the strangling. This meeting was audio taped. The undercover officer then took Tofilau to the purported head of the gang. The purported head told Tofilau he needed to know all relevant details if he were to fix things with the police, and he interrogated Tofilau about them. Tofilau made extensive admissions which were videotaped. On 18 March 2002 Tofilau made admissions in a record of interview conducted by persons known to him to be police officers. He confirmed that he had made statements to the undercover officers about strangling the deceased. Initially he said they were true, but he then claimed that he had fabricated what he had told them so that he could join the criminal gang. The trial judge's ruling. The trial judge ruled that Tofilau's admissions were admissible. He held that they were not to be excluded as involuntary on the ground of having been induced by threats or promises from a person in authority, because the undercover officers were not perceived by Tofilau to be persons in authority. He held that it was not necessary to consider whether s 149 of the Evidence Act 1958 (Vic)236 ("the Evidence Act") applied; in any event Tofilau's admissions were not "confessions" (that is, complete admissions of guilt) within the meaning of that expression in s 149. He also held that there were no circumstances of "basal involuntariness" because Tofilau's will was not overborne. He declined to exclude the admissions as unreliable, or to exercise the discretion, discussed in R v Swaffield237, to exclude them238. 236 It provides: "No confession which is tendered in evidence shall be rejected on the ground that a promise or threat has been held out to the person confessing, unless the judge or other presiding officer is of opinion that the inducement was really calculated to cause an untrue admission of guilt to be made; nor shall any confession which is tendered in evidence be rejected on the ground that it was made or purports to have been made on oath." 237 (1998) 192 CLR 159. 238 R v Tofilau (2003) 13 VR 1. The trial proceeded and Tofilau was convicted. The background in Marks v The Queen The trial. After a trial before the Supreme Court of Victoria (Coldrey J and a jury), on 15 October 2004 Matthew Joseph Marks ("Marks") was convicted of murdering Margaret O'Toole, his great aunt, on 7 April 2002. She died as a result of many hammer blows being inflicted on her head and throat. Marks owed her approximately $60,000 and believed that he would derive considerable financial benefit under her will. Preliminary investigation. Marks was interviewed by the Homicide Squad. Although he was released without charge, they decided to elicit scenario evidence. Use of scenarios. In similar fashion to what happened in relation to Tofilau, undercover operatives gained Marks's confidence and involved him in 16 scenarios enacted between 22 October and 27 November 2002. On 27 November 2002 he admitted to an undercover officer, whom he wrongly believed to be the head of the gang he wished to join, that he had killed the deceased by bashing her head and neck with a hammer. The trial judge's ruling. The trial judge overruled all the objections to reception of the admission – a "person in authority" objection, a "basal involuntariness" objection, a reliability objection and contentions that the evidence should be excluded in the court's discretion. He held also that, if the first objection had been upheld, s 149 would have applied239. The trial proceeded and Marks was convicted. The background in Hill v The Queen The trial. After a trial before the Supreme Court of Victoria (Bongiorno J and a jury), on 6 August 2004 Shane John Hill was convicted of murdering Craig Anthony Reynolds, who died on 22 February 2002. The victim, who was Hill's stepbrother, had been struck repeatedly with a house brick on 17 February 2002 and there were signs of attempts to strangle him. He had habitually supplied Hill with heroin, and relations between them had become tense. 239 R v Marks (2004) 150 A Crim R 212 at 220-231 [57]-[115]. Preliminary investigation. Late in the evening of 17 February 2002, and on 14 March 2002, Hill provided exculpatory statements to the police. In the days after the crime, on the other hand, he made incriminating remarks to his own brother and the victim's brother. Use of scenarios. From 18 June to 6 August 2002, undercover police officers participated with Hill in 19 "scenarios" involving various types of apparent illegality and impropriety in order to gain his confidence. These tactics culminated on 6 August 2002 with Hill making admissions, which were recorded, about his stepbrother's death. On 9 August 2002 Hill was arrested and interviewed by a non-covert police officer. He made admissions during this interview. The trial judge's ruling. The trial judge found that the admissions were not induced by persons in authority; that if they had been, s 149 of the Evidence Act would have applied; that there was no "basal involuntariness"; and that the evidence should not be excluded as a matter of discretion. The trial proceeded and Hill was convicted. The background in Clarke v The Queen The trial. After a trial before the Supreme Court of Victoria (Kellam J and a jury), on 15 June 2004 Malcolm Joseph Thomas Clarke ("Clarke") was convicted of murdering Bonnie Melissa Clarke on 21 December 1982. She was six years old, and had been sexually assaulted, asphyxiated and stabbed. Clarke had been a lodger in her mother's house, and had later lived next door. Preliminary investigation. Although the police spoke to Clarke on several occasions in the ensuing months, he was not formally interviewed. The initial investigation was unsuccessful, but in February 2001 the police resumed work on the case. Use of scenarios. From March 2002 undercover police officers staged a series of scenarios with Clarke which were broadly similar to those employed with Tofilau, Marks and Hill. On 6 June 2002 Clarke made filmed admissions to an undercover officer, whom he believed to be the boss of the gang he was seeking to join. He then made admissions in a video-recorded interview with non-undercover officers. The trial judge's ruling. The trial judge admitted evidence of admissions made to undercover operatives. He rejected an objection based on the "person in authority" rule, and hence held that s 149 of the Evidence Act did not need to be considered. He also rejected objections based on "basal involuntariness", on reliability and on discretionary exclusion. The trial proceeded and Clarke was convicted. The Court of Appeal The Court of Appeal of Victoria (Callaway, Buchanan and Vincent JJA) heard separate applications for leave to appeal against conviction by each of Tofilau, Marks, Hill and Clarke ("the appellants"). However, in each appeal the appellant had the same counsel as the others, the prosecution had the same counsel, the applications were argued together, and the decisions were handed down on the same day. In those applications each appellant maintained his arguments relating to "person in authority", "basal involuntariness" and discretionary exclusion. Each application was dismissed240. The appeal to this Court In their appeals to this Court, all appellants contend that the courts below erred in relation to the issues of "person in authority" and "basal involuntariness". In addition, Clarke applied to amend his notice of appeal in order to contend that the Court of Appeal erred in failing to find error in the trial judge's failure to exclude the evidence on discretionary grounds. Tofilau contends that apart from the scenario evidence, and the admissions in the record of interview made under their influence, there is insufficient evidence on which a jury could convict him at a second trial. Thus he seeks an acquittal. Marks, too, seeks an acquittal. Hill and Clarke each seek only an order for a new trial. The legal context of the appellants' submissions In order to appreciate the significance of the appellants' arguments, it is desirable to place them in the context of the law relating to the admissibility of confessions as a whole. An admission by an accused person "must be voluntary in order to be admissible"241. It is common to divide involuntary statements into 240 R v Tofilau (No 2) (2006) 13 VR 28; R v Hill [2006] VSCA 41; R v Clarke [2006] VSCA 43; R v Marks [2006] VSCA 42. 241 R v Lee (1950) 82 CLR 133 at 144 per Latham CJ, McTiernan, Webb, Fullagar and two categories. One concerns the "inducement rule": an admission by an accused person "is not voluntary if it is preceded by an inducement, such as a threat or promise, held out by a person in authority, unless the inducement is shown to have been removed"242. The other category concerns those caught by the "basal involuntariness" rule, to be discussed below243. But even if an admission is voluntary, it may be excluded on "discretionary" grounds. In R v Swaffield244 Toohey, Gaudron and Gummow JJ grouped these "discretionary" grounds under three heads. The first in time to emerge was that which was stated in the cases summarised by Lord Sumner delivering the advice of their Lordships in Ibrahim v The King245 about impropriety in police questioning. The correctness of excluding evidence on this ground in Victoria was left open in Cornelius v The King246, but was approved for New South Wales by Dixon J in McDermott v The King247. Dixon J said of it: "there has arisen almost in our own time a practice in England of excluding confessional statements made to officers of police if it is considered upon a review of all the circumstances that they have been obtained in an improper manner". In R v Lee248 Latham CJ, McTiernan, Webb, Fullagar and Kitto JJ declined to interfere with the Victorian Full Court's recognition of the discretion in that State. The application of this head was given fresh life from 1982, for in Cleland v The Queen249 the discretion to exclude illegally or improperly obtained real evidence 242 R v Lee (1950) 82 CLR 133 at 144 per Latham CJ, McTiernan, Webb, Fullagar and 243 Below at [325]-[340]. 244 (1998) 192 CLR 159 at 189 [52]. 245 [1914] AC 599 at 611-614. 246 (1936) 55 CLR 235 at 247-248 per Dixon, Evatt and McTiernan JJ. 247 (1948) 76 CLR 501 at 513. 248 (1950) 82 CLR 133 at 149-151. 249 (1982) 151 CLR 1. enunciated in Bunning v Cross250 was applied to confessions. It has since been common to refer to this as a "policy" discretion. The second "discretionary" head to emerge arose where it could be said of a voluntary confession that "in all the circumstances it would be unfair to use it in evidence against" the accused. The words are those of Latham CJ in McDermott v The King251 summarising R v Jeffries252, but they were approved by Latham CJ, McTiernan, Webb, Fullagar and Kitto JJ in R v Lee253. This is commonly called a "fairness" discretion. The third "discretionary" head to emerge was the application to confessions of the "discretion" to exclude evidence the prejudicial impact of which is greater than its probative value, which had begun to be recognised in R v Christie254 and continued to develop in various fields of the law of evidence throughout the 20th century. The application of that principle to confessions, but not its description as a "discretion", was accepted as legitimate by Toohey, Gaudron and Gummow JJ in R v Swaffield255. 250 (1978) 141 CLR 54 at 75. 251 (1948) 76 CLR 501 at 506-507. 252 (1946) 47 SR (NSW) 284. 253 (1950) 82 CLR 133 at 151. 254 [1914] AC 545 at 560 per Lord Moulton, 564-565 per Lord Reading (Lord Dunedin concurring). 255 (1998) 192 CLR 159 at 191-193 [61]-[65]. In that case at 194 [69] it was further suggested that, subject to a qualification, admissibility at common law turns "first on the question of voluntariness, next on exclusion based on considerations of reliability and finally on an overall discretion which [takes] account of all the circumstances of the case to determine whether the admission of the evidence or the obtaining of a conviction on the basis of the evidence is bought at a price which is unacceptable, having regard to contemporary community standards". Whether or not this is so was not crucial to the outcome in R v Swaffield, was not argued in the present appeals, and is not crucial to their outcome. The correctness of the suggestion thus need not be decided in these appeals (cf reasons of Kirby J at [127]). Subject to that, it is desirable to say the following about the fact that Tofilau appeared to submit to Osborn J that confessions can be excluded merely because they are unreliable, as did Marks and Clarke. The submissions were rejected on the facts (R v Tofilau (2003) 13 VR 1 at 17 [57]-[58]; R v Marks [2004] VSC 476 at [83]-[92]; R v Clarke [2004] VSC 11 at [54]-[65]), but in any event (Footnote continues on next page) Were the undercover operatives "persons in authority"? The legal issues. The question whether the admissions were excluded by the "inducement rule" depends on whether the undercover operatives were "persons in authority". That question is discussed here in relation to the appellants as a class. That is because from this point of view there is no material difference between them. Indeed the submissions presented were substantially similar, with significant reciprocal adoption by cross-reference. In contrast, it is necessary to consider the application of the "basal involuntariness" rule separately in relation to each appellant because the outcome will be governed by the particular circumstances of each appellant. The approach of the trial judges. In the case of Tofilau, Osborn J held that the inducement rule did not apply where the suspect "neither knew or believed that the person holding out the inducement was a 'person in authority'"256. He also held that "the holding out contemplated must be one which cloaks the inducement with authority"257. He said that in the present case "the inducements did not come from persons supposed by the accused to have some capacity by reason of authority to carry them into effect"258. He concluded259: "In the present case, this requirement can only be regarded as being met if the role of an undercover police officer who was represented to be a corrupt drug squad detective at the initial meeting ... can be regarded as cloaking the subsequent inducements with authority. In my opinion it cannot. The purported corrupt police officer was part of the scenario at the time of the initial introduction to the purported gang. What was said about him both at the [initial meeting] and subsequently in reiteration and reinforcement of the scenario was, however, clearly said by persons who purported to be criminals. There were no inducements offered by persons their correctness in law is highly questionable: a fear of unreliability may underpin the "inducement rule", and unreliability may be a factual circumstance relevant to basal involuntariness and to discretionary exclusion, but the fact that a judge thinks that a confession is unreliable is not in itself a ground of automatic exclusion. 256 R v Tofilau (2003) 13 VR 1 at 9 [26]. 257 R v Tofilau (2003) 13 VR 1 at 9 [27]. 258 R v Tofilau (2003) 13 VR 1 at 10 [29]. 259 R v Tofilau (2003) 13 VR 1 at 14 [42]. in authority in the relevant sense prior to the confessional statements. Indeed, the essence of the inducements that were offered was that they were not offered by persons in authority but were offered by criminals purporting to have connections with, but in fact to be outside, authority." In the case of Hill, Bongiorno J followed Osborn J's reasoning in R v Tofilau and said that, while the accused believed in the power of the gangster boss to fix things, power was not authority, and the accused did not believe in the boss's authority. In the case of Marks, Coldrey J applied Osborn J's reasoning and held that the inducements offered were not "held out by a person cloaked with authority legitimately linked to the investigative or prosecutorial process", but "were held out by a crime boss outside the authority of the law and envisaged the ... perversion of the course of justice through the utilisation of [a] corrupt police officer"260. And in the case of Clarke, Kellam J also followed Osborn J's reasoning. He held that Clarke did not see the gangster boss as a person with authority or control over the prosecution, but as "a criminal who might be able to interfere in a criminal way with the investigation of the case against" him261. The approach of the Court of Appeal. In R v Tofilau the Court of Appeal rejected a challenge to Osborn J's reasoning in relation to a "person in authority". It approved Osborn J's approach. It distinguished between a suspect's perception that an individual had the capacity to influence the prosecution, and a suspect's perception that the individual had the authority to do so. It required that the suspect perceive that the offeror of the inducement possess, "by reason of some lawfully held or conferred status or relationship with" the suspect, the capacity to influence "the course of the prosecution, or the manner in which [the suspect] is treated in respect of it"262. The Court of Appeal rejected the corresponding ground of challenge in the other applications263. 260 R v Marks (2004) 150 A Crim R 212 at 225 [74]-[75]. 261 R v Clarke [2004] VSC 11 at [40]. 262 R v Tofilau (No 2) (2006) 13 VR 28 at 67 [170] per Vincent JA (Callaway and Buchanan JJA concurring). The latter quotation is from R v Dixon (1992) 28 NSWLR 215 at 229 per Wood J. 263 R v Hill [2006] VSCA 41 at [104]-[105]; R v Clarke [2006] VSCA 43 at [122]; R v Marks [2006] VSCA 42 at [183]. The appellants' arguments. All appellants contended that their admissions to undercover operatives were not voluntary, on the ground that they had been preceded by threats or promises held out by persons in authority. They did not in terms contend that the "person in authority" requirement did not or should not exist. But the appellants did submit that the operatives in the present cases were persons in authority. There was no issue that the admissions of each appellant had been preceded by promises of advantage if they were made (specifically, profitable membership of the gang and the conferral of de facto immunity by supposedly corrupt police officers friendly with the gangsters) and threats of corresponding disadvantage if they were not made. The arguments which the appellants advanced on the "person in authority" issue, like their other arguments, were advanced in some detail. The consequences for the appellants if their arguments fail, and the legal significance of those arguments, make it necessary both to set them out and to analyse them in some detail. The appellants submitted that the trial judges and the Court of Appeal erred in holding that a police officer could not be a person in authority unless the person who confesses or makes admissions believes that officer to have lawful authority, and in concluding that the operatives were not persons in authority because the appellants believed that they were gangsters with access to corrupt police officers capable of perverting the course of justice as distinct from honest officers dedicated to enforcing the law264. Dixon J, writing in a context remote from scenario evidence, defined the expression "person in authority" as including "officers of police and the like, the prosecutor, and others concerned in preferring the charge"265. The primary 264 For example, R v Tofilau (No 2) (2006) 13 VR 28 at 67 [170] per Vincent JA (Callaway and Buchanan JJA concurring). 265 McDermott v The King (1948) 76 CLR 501 at 511. In R v Kassulke [2004] QCA 175 at [18] Davies JA said that Dixon J "intended to limit [the] expression ['person in authority'] to those persons exercising or purporting to exercise the authority of the State in the investigation or prosecution of a charge of a criminal offence". (See also R v Burt [2000] 1 Qd R 28 at 32-33 [7] per Thomas JA.) This leaves out another type of "prosecutor" – the victim of the crime who, where private prosecutions are possible, could prosecute the crime, and who, where they are not, or where they are not being undertaken, is normally the trigger for the police force to investigate the crime and for the prosecuting authorities to institute a prosecution. It is not necessary in this case to consider whether this suggestion, which would involve a radical departure from the many cases which have included (Footnote continues on next page) submission of the appellants involved a significant expansion of that formulation. The submission was: "[A]ny person genuinely and reasonably believed by an accused to have the ability or capacity to influence the conduct of an investigating police officer in such a manner as to bring to an end a police investigation or to prevent a prosecution from being commenced falls within the definition of a 'person in authority'." The appellants submitted that it was not necessary for the suspect to believe that the person holding out the inducement had lawful authority to do so. They advanced the following reasons for the conclusion they urged. First, the appellants contended that "person in authority" was correctly defined by Wood J in R v Dixon266: "[A] person in authority includes any person concerned in the arrest, detention or examination of the accused, or who has an interest in respect of the offence, or who otherwise is seen by the accused by virtue of his position, as capable of influencing the course of the prosecution, or the manner in which he is treated in respect of it." Secondly, the appellants submitted that the approach they advocated was supported by Davies JA in R v Kassulke267. Thirdly, the appellants submitted that it had never been a bar to characterising a statement as an inducement made by a person in authority, thereby rendering a confession inadmissible, that the inducement was a threat or promise to commit an unlawful act – to commit a contempt of court268, to attempt to pervert the course of justice by procuring the grant of bail269, to obstruct the course of justice by not charging a relative of the suspect270, to commit the tort of "the prosecutor" in the sense described within the category "person in authority" for nearly two centuries, is justified. 266 (1992) 28 NSWLR 215 at 229 (Hunt CJ at CL and Sharpe J concurring). 267 [2004] QCA 175 at [20]. 268 R v Scofield (1988) 37 A Crim R 197. 269 R v Bosman (1988) 50 SASR 365. 270 R v Hurst [1958] VR 396. false imprisonment by keeping a mother in custody and putting her children in care unless she confessed271, or to commit a battery if the suspect was threatened with a beating unless there was a confession, for example. The appellants in effect submitted that there was no difference between that type of conduct and the conduct of persons thought to be gangsters offering to interfere with the course of justice through the medium of a supposedly corrupt police officer. Fourthly, the appellants submitted that on the test they proposed many past cases would still be decided as they had in fact been decided. Fifthly, the appellants confronted R v Grandinetti. That unanimous decision of the Supreme Court of Canada upheld a test for defining "person in authority" inconsistent with that which the appellants proposed, namely whether the accused reasonably believed that the person hearing the admission was acting on behalf of the police or prosecuting authorities272. The appellants attacked the underlying reasoning. Finally, the appellants submitted that the undercover officers were exercising the authority of the state in dealing with the appellants, or acting under the orders of officers who were not acting undercover but who were also exercising the authority of the state. They submitted that had the undercover officers been wearing police uniforms and badges while speaking to the appellants before they made admissions, they would have been persons in authority. The appellants submitted that the fact that they were not wearing uniforms and badges was not a material circumstance; in particular, their belief that the "gangsters" would make a request of a police officer corruptly to terminate the investigation was not mistaken in that they believed that officer to be an officer, and he was. The prosecution's position. On the other hand, the Director of Public Prosecutions submitted that two conditions had to be satisfied before a person was a person in authority. The first was that that person actually did possess the authority – that is, the lawful authority – of the state. The second was that that person was perceived reasonably by the person confessing to have possessed that lawful authority. A question may arise whether, even if it is otherwise correct, the prosecution's definition is too narrow because it excludes what Dixon J called 271 R v Middleton [1975] QB 191. 272 [2005] 1 SCR 27 at 40-41 [43], approving R v Hodgson [1998] 2 SCR 449 at 475 "the prosecutor". That is not, however, a question which needs to be decided in this appeal273. The critical difference between the parties. One difference between the appellants and the Director is that the appellants do not require the putative person in authority to in fact be a person exercising the legal authority of the state, whereas the Director does. Even if the appellants' test is erroneous in this respect, it would not affect the outcome, because the undercover police officers in these appeals do satisfy the requirement stipulated by the Director's test. It is accordingly not necessary to decide whether the Director is correct in insisting on the first limb274. The other difference between the test advocated by the appellants and that advocated by the Director is critical. It concerns what the reasonable perception of the person confessing is of the relationship between the alleged person in authority and the conduct of the prosecution. For the appellants, the reasonable perception of the relationship need only be that the alleged person in authority has a practical ability to influence the conduct of the prosecution, whether lawfully or not. For the Director, the reasonable perception of the relationship must be that the alleged person in authority has an ability to influence the conduct of the prosecution deriving from lawful authority. The difference is critical because the appellants did not have any reasonable basis on which to believe that the undercover police officers were acting pursuant to lawful authority. History of the inducement rule Before considering the appellants' arguments, it is desirable to bear in mind the history of the inducement rule with particular reference to the "person in authority" requirement. There is no doubt that by 1783 admissions were excluded in criminal cases on the ground that they were unreliable when "forced from the mind by the 273 See note [265] above. 274 There are authorities against it: R v Hodgson [1998] 2 SCR 449 at 471-475 [32]- [36]; R v Burt [2000] 1 Qd R 28 at 32-33 [7] per Thomas JA, 41-42 [39] and [45] per White J, but they were criticised in R v Kassulke [2004] QCA 175 at [21] per Davies JA (Williams and Jerrard JJA concurring): see below at [299]-[304]. flattery of hope, or by the torture of fear"275. In 1775 Lord Mansfield CJ had remarked276: "The instance has frequently happened, of persons having made confessions under threats or promises: the consequence as frequently has been, that such examinations and confessions have not been made use of against them on their trial." Professor Langbein has concluded that the relevant development began after 1722. First, confessions induced by threats or promises were seen as lacking weight in 1738. Then, in 1740, they were seen as inadmissible. That view, for example, was expressed in 1741 by the future Foster J277, the celebrated author of Crown Law. By 1761 the latter view came to prevail, and a string of cases ensued in which prisoners against whom there was no evidence except induced confessions were acquitted278. Foster, writing in 1762, said279: "[H]asty confessions made to persons having no authority to examine, are the weakest and most suspicious of all evidence. Proof may be too easily procured, words are often mis-reported, whether through ignorance, 275 R v Warickshall (1783) 1 Leach 263 at 263-264 per Eyre B and Nares J [168 ER 276 R v Rudd (1775) 1 Leach 115 at 118 [168 ER 160 at 161]. Mirfield, Confessions, (1985) at 47, questioned whether Lord Mansfield was referring to "a practice of prosecutors, or to a practice of judges, or to a rule binding judges". Kaufman, The Admissibility of Confessions in Criminal Matters, 3rd ed (1979) at 1, said it was "a statement of fact, a hint, perhaps, that a rule of practice existed". 277 R v White (1741) 17 Howell State Trials 1079 at 1085. 278 Langbein, The Origins of Adversary Criminal Trial, (2005) at 220-222. The inconclusiveness of the position before the early 18th century is discussed in Mirfield, Confessions, at 42-47. For arguments that, as Lord Sumner said in Ibrahim v The King [1914] AC 599 at 610, the "principle is as old as Lord Hale", see Wolchover and Heaton-Armstrong, Confession Evidence, (1996) at pars 4-002- 279 A Report of Some Proceedings on the Commission of Oyer and Terminer and Gaol Delivery for the Trial of the Rebels in the Year 1746 in the County of Surry; and of Other Crown Cases, (1762) at 243. inattention, or malice, it mattereth not the defendant, he is equally affected in either case; and they are extremely liable to mis-construction. And withall, this evidence is not in the ordinary course of things to be disproved by that sort of negative evidence by which the proof of plain facts may be and often is confronted." Blackstone, writing in the later 1760s, said that confessions280: "are the weakest and most suspicious of all testimony; ever liable to be obtained by artifice, false hopes, promises of favour, or menaces; seldom remembered accurately, or reported with due precision; and incapable in their nature of being disproved by other negative evidence". The reasons for these developments have been said to lie in a distrust of evidence given by persons implicated in crimes who had been promised immunity and rewards if they would give evidence for the prosecution against their accomplices, in the "ever growing aversion to capital punishment for relatively minor crimes of theft", and in the risk of abuse by masters of their "[T]he confession rule was not generated in rural venues populated by 'half-stupid' peasants fawning before squires,[283] but in metropolitan London, then the largest urban center in the world. The typical confessant was a young and vulnerable domestic servant (often female), or an apprentice, hireling, or lodger, often far from the support of home and family, charged with taking food, clothes, housewares, tools, or stock of the trade. Cases in which a suspect was overawed into confessing a crime of which he or she was completely ignorant were no doubt rare, but it was plausible for contemporaries to have been concerned that a frightened and bewildered servant, mistakenly accused of a crime by the master upon whom the servant depended for daily bread, might confess to something the servant had not done, if that is what the master insisted, especially when the master promised impunity or forgiveness (the 'hope of favor' 280 Commentaries on the Laws of England, (1813), vol 4 at 324-325. 281 Langbein, The Origins of Adversary Criminal Trial, (2005) at 230-232. 282 Langbein, The Origins of Adversary Criminal Trial, (2005) at 230-231 (footnotes omitted). 283 This is an allusion to Wigmore, A Treatise on the Anglo-American System of Evidence in Trials at Common Law, 3rd ed (1940), vol 3, par 865 at 353. branch of the rule). Moreover, there were a few occasions in which alleged crimes arising out of domestic or workplace settings were ambiguous, in the sense that the servant had a tenable claim of entitlement to the allegedly stolen goods as part of an understanding about the terms of service. Such cases were not smash-and-grab break-ins, but workplace disputes. The danger was that the master might determine to win the dispute with a three-step minuet: first instigating or threatening criminal prosecution, then promising impunity if the servant confessed stealing what the servant had taken without criminal intent, and then reneging on the promise not to prosecute the servant on the confession." On that view, the development of the "person in authority" element of the inducement rule was integrally connected with the power of private persons over prosecutions. There are today proportionately many fewer private prosecutions than in the 18th century, even in jurisdictions which permit private prosecutions at all; a symptom and cause of this is the rudimentary nature of 18th century police forces. "The law enforcement officers formed no disciplined police force and were not subject to effective control by the central government, watch committees or an inspectorate."284 Further explanations for the development of the inducement rule have been advanced. Appellate review was limited until the Court for Crown Cases Reserved was set up in 1848, and even that was a cumbrous and infrequently used procedure285. There was no legal aid. In felony cases, until the Trial for Felony Act 1836 (UK), defence barristers could only argue points of law and advise the accused what questions to ask witnesses; defence barristers could not address the jury or examine witnesses themselves. Neither the accused nor the accused's spouse was generally considered a competent witness until the late 19th century, and they were therefore unable to explain any admissions made – although many contemporary lawyers favoured that state of affairs as conferring advantages on the accused, so that it may not have been causative in the development of the inducement rule286. However that may be, many aspects of contemporary conditions appear to have engendered a spirit of hostility to induced confessions. 284 Director of Public Prosecutions v Ping Lin [1976] AC 574 at 600 per Lord 285 Stephen, A History of the Criminal Law of England, (1883), vol 1 at 308-313. 286 See Cornwell v The Queen (2007) 81 ALJR 840 at 849-853 [38]-[53] per Gleeson CJ, Gummow, Heydon and Crennan JJ; 234 ALR 51 at 64-69. The ground induced confessions initially given for rejecting R v Warickshall was unreliability. But the inquiry did not turn on whether in the particular circumstances of a given case a confession was unreliable. Once an inducement was made out – and the decisions on that question were lenient to the accused – the confession was automatically excluded without further inquiry into the likelihood of its being untrue287. Thus in 1783 Hotham B said: "It is almost impossible to be too careful ... Too great a chastity cannot be preserved on this subject."288 In the ensuing years the authorities revealed the following tendencies. First, the courts inquired into whether there was a threat or promise; they did not inquire into whether it was likely to have produced an untrue confession289. Secondly, very vague observations were held to amount to a threat or promise. Thus confessions were excluded after such statements as: "[Y]ou may as well tell me all about it."290 Thirdly, some truthful and even helpful observations were held to amount to a threat or promise. In R v Drew291 Coleridge J excluded a confession made after the accused was told not to say anything to prejudice himself, as what he said would be taken down, and would be used for or against him at his trial. He ruled in similar fashion in R v Morton292, as did Maule J in R v Furley293 and R v Harris294. 287 R v Thompson (1783) 1 Leach 291 [168 ER 248]; R v Cass (1784) 1 Leach 293n [168 ER 248 at 249]. 288 R v Thompson (1783) 1 Leach 291 at 293 [168 ER 248 at 249]. 289 For example, R v Enoch (1833) 5 C & P 539 at 540 [172 ER 1089], where Parke J saw it as sufficient to exclude a confession that it "was made after an inducement". 290 R v Croydon (1846) 2 Cox CC 67. 291 (1837) 8 C & P 140 [173 ER 433]. 292 (1843) 2 Moo & Rob 514 [174 ER 367]. 293 (1844) 1 Cox CC 76. 294 (1844) 1 Cox CC 106. In R v Baldry295, in 1852, Lord Campbell CJ, Parke B and Erle J made trenchant criticisms of the case law on that point, and this may have checked the tendency described in the penultimate paragraph. However, only the four cases mentioned in the previous paragraph were said or suggested to be wrong. And R v Baldry did not disturb the principle that once a threat or promise was found, no inquiry was conducted into whether it was likely to produce an untrue confession296. This was reaffirmed in R v Moore297, which was argued on the same day as R v Baldry. In R v Moore, Parke B, speaking for eight judges of the Court for Crown Cases Reserved, said298: "It is admitted that confessions ought to be excluded unless voluntary, and the Judge, not the jury, ought to determine whether they are One element in the consideration of this question as to their being voluntary is, whether the threat or inducement was such as to be likely to influence the prisoner. Perhaps it would have been better to have held (when it was determined that the Judge was to decide whether the confession was voluntary), that in all cases he was to decide that point upon his own view of all the circumstances, including the nature of the threat or inducement, and the character of the person holding it out together, not necessarily excluding the confession on account of the character of the person holding out the inducement or threat. But a rule has been laid down in different precedents by which we are bound, and that is, that if the threat or inducement is held out actually or constructively by a person in authority, it cannot be received, however slight the threat or inducement, and the prosecutor, magistrate, or constable, is such a person, and so the master or mistress may be. If not held out by one in authority, they are clearly admissible." 295 (1852) 2 Den 430 [169 ER 568]. 296 (1852) 2 Den 430 at 446 and 445 per Lord Campbell CJ and Parke B respectively [169 ER 568 at 575 and 574]. This no doubt led to the enactment in Victoria shortly after 1852 of the precursor to s 149 of the Evidence Act (see note [236] above), namely s 19 of the Law of Evidence Consolidation Act 1857 (21 Vic No 8). 297 (1852) 2 Den 522. 298 (1852) 2 Den 522 at 526-527 [169 ER 608 at 610]. Thus in 1881 Lord Coleridge CJ, sitting in the Court for Crown Cases Reserved, said299: "[A] confession, in order to be admissible, must be free and voluntary: that is, must not be extracted by any sort of threats or violence, nor obtained by any direct or implied promises, however slight, nor by the exertion of any improper influence." In so doing he was quoting from Russell, who a little later said300: "A confession can never be received in evidence, where the prisoner has been influenced by any threat or promise; for the law cannot measure the force of the influence used, or decide upon its effect upon the mind of the prisoner, and, therefore, excludes the declaration, if any degree of influence has been exerted." In 1893 the Court for Crown Cases Reserved in R v Thompson301 repeated Lord Coleridge CJ's statement. That remained the position in England until, shortly before the statutory abolition of the inducement rule in 1984302, the House of Lords in Director of Public Prosecutions v Ping Lin303 favoured an examination of whether, in the particular case, the inducement had actually caused the confession. In Australia, perhaps some courts resisted the English extremes304, but the operation of the rule was not fundamentally different, save that in Australia the prosecution had only to establish voluntariness on the balance of probabilities, whereas in England the standard of proof was beyond reasonable doubt305. 299 R v Fennell (1881) 7 QBD 147 at 151. 300 A Treatise on Crimes and Misdemeanors, 5th ed (1877), vol 3 at 442 (emphasis in original). 301 [1893] 2 QB 12 at 17 per Cave J, speaking as well for Lord Coleridge CJ, Hawkins, 302 Police and Criminal Evidence Act 1984 (UK). 303 [1976] AC 574: see [289] below. 304 For example, R v Bodsworth [1968] 2 NSWR 132 at 139. 305 Wendo v The Queen (1963) 109 CLR 559 at 562 per Dixon CJ, 572 per Taylor and History of the "person in authority" requirement The person in authority requirement appears first to have emerged explicitly in 1809 in R v Row306. Lord Ellenborough CJ, Mansfield CJ of CB, Macdonald CB, Heath, Grose, Lawrence, Le Blanc, Chambre JJ and Wood B held admissible a confession made after some of the accused's "neighbours, who had nothing to do with the apprehension, prosecution or examination of the prisoner, officiously interfered, and admonished the prisoner to tell the truth, and consider his family, which was a large one". They did so on the ground that "the advice to confess was not given or sanctioned by any person who had any concern in the business". While the rule stated in R v Row was often followed307, there were a few later cases decided in a four year period, between 1830 and 1834, which held or assumed that an inducement could lead to the exclusion of a confession even though it did not proceed from or in the presence of a person in authority308. In 1837, Parke B recorded that there was disagreement among the judges on the point309. However, in 1839 the judges agreed that the person in authority requirement existed310. Its existence was put beyond doubt in 1852 by R v Moore311 and in 1853 by R v Sleeman312. In R v Cleary313 and R v Wilson314 306 (1809) Russ & Ry 153 [168 ER 733]. 307 For example, R v Gibbons (1823) 1 C & P 97 [171 ER 1117]. 308 R v Kingston (1830) 4 C & P 387 [172 ER 752]; R v Dunn (1831) 4 C & P 543 [172 ER 817]; R v Slaughter (1831) 4 C & P 544n [172 ER 818]; R v Walkley (1833) 6 C & P 175 [172 ER 1196]; R v Thomas (1834) 6 C & P 353 [172 ER 309 R v Spencer (1837) 7 C & P 776 [173 ER 338]. 310 R v Taylor (1839) 8 C & P 733 [173 ER 694]. See generally Joy, On the Admissibility of Confessions and Challenge of Jurors in Criminal Cases in England and Ireland, (1842) at 23-33. 311 (1852) 2 Den 522 [169 ER 608]. In R v Baldry (1852) 2 Den 430 at 445 [169 ER 568 at 574], the person in authority requirement is mentioned by Parke B, but in R v Moore the recognition and limitation of the person in authority rule was crucial to the decision that the wife of a person in whose house had been committed an offence in no way concerning that person or his wife was not a person in authority. 312 (1853) 6 Cox CC 245. 313 (1963) 48 Cr App R 116. the rule was applied by the English Court of Criminal Appeal. In 1967 the House of Lords refused to accept a requirement sometimes thought to be related to the person in authority rule, namely that the inducement, in addition to proceeding from a person in authority, must relate to the prosecution315. In 1968 the Privy Council rejected a submission that the person in authority requirement be abolished316. The person in authority requirement has never been challenged in Australia, and many Australian authorities have accepted that it exists317, although there has been debate about its extent318. The purpose of the inducement rule What have the authorities suggested as being the purposes served by the rule that an admission proceeding from an inducement by a person in authority is inadmissible? It is desirable to pose the inquiry because the answer may assist in assessing the cogency and desirability of the test advocated by the appellants. It is not, however, proposed to discuss the question whether the various purposes do satisfactorily explain the inducement rule in its entirety, for no submission that it be abandoned has been made. Nor is it proposed to discuss suggestions not made in the authorities. Further, it is not denied either that other classifications are possible or that the categories may overlap to some extent. Reliability. The oldest justification for the rule is that given by Eyre B and Nares J in R v Warickshall. In that case a person accused of having received property knowing it to have been stolen made a full confession of her guilt. In consequence the property was found in her bed. The court rejected the 315 Commissioners of Customs and Excise v Harz and Power [1967] 1 AC 760 at 818- 821 per Lord Reid (Lords Morris of Borth-y-Gest, Hodson, Pearce and Wilberforce concurring). 316 Deokinanan v The Queen [1969] 1 AC 20. 317 For example, Dixon J did so in McDermott v The King (1948) 76 CLR 501 at 511. 318 For example, the conclusion that the mother of (R v Scofield (1988) 37 A Crim R 197) or a person in loco parentis to (Jonkers v Police (1996) 67 SASR 401) a child complaining of sexual offences was a person in authority was criticised in R v Burt [2000] 1 Qd R 28 at 32-33 [7]-[8] by Thomas JA and R v Tofilau (No 2) (2006) 13 VR 28 at 66 [166] by Vincent JA (Callaway and Buchanan JJ concurring). confession on the ground that it had been "obtained by promises of favour". Her counsel contended319: "[A]s the fact of finding the stolen property in her custody had been obtained through the means of an inadmissible confession, the proof of that fact ought also to be rejected; for otherwise the faith which the prosecutor had pledged would be violated, and the prisoner made the deluded instrument of her own conviction". Eyre B and Nares J said320: "It is a mistaken notion, that the evidence of confessions and facts which have been obtained from prisoners by promises or threats, is to be rejected from a regard to public faith: no such rule ever prevailed. The idea is novel in theory, and would be as dangerous in practice as it is repugnant to the general principles of criminal law." That is, the law does not reject a confession merely because it is made on the faith of a particular assumption and a pledge of that faith has been violated by reason of that assumption being incorrect. Eyre B and Nares J continued321: "Confessions are received in evidence, or rejected as inadmissible, under a consideration whether they are or are not intitled to credit. A free and voluntary confession is deserving of the highest credit, because it is presumed to flow from the strongest sense of guilt, and therefore it is admitted as proof of the crime to which it refers; but a confession forced from the mind by the flattery of hope, or by the torture of fear, comes in so questionable a shape when it is to be considered as the evidence of guilt, that no credit ought to be given to it; and therefore it is rejected." The same approach can be illustrated by three other old cases. In R v Court, "The object of the rule relating to the exclusion of confessions is to exclude all confessions which may have been procured by the prisoner 319 (1783) 1 Leach 263 at 263 [168 ER 234 at 234]. 320 (1783) 1 Leach 263 at 263 [168 ER 234 at 234]. 321 (1783) 1 Leach 263 at 263-264 [168 ER 234 at 234-235]. 322 (1836) 7 C & P 486 at 487 [173 ER 216]. being led to suppose that it will be better for him to admit himself to be guilty of an offence which he really never committed." In R v Baldry, Parke B approved the reasons given by Lord Campbell CJ at trial; he said, in admitting the confession, that the inducement "could have no tendency to induce him to say anything untrue"323. In R v Scott324, Lord Campbell CJ said that if there were threats or promises, "the party may have been influenced to say what is not true, and the supposed confession cannot be safely acted upon". There are modern authorities to the same effect. Thus Lord Reid said that one line of thought underlying the rejection of confessions was "that a statement made in response to a threat or promise may be untrue or at least untrustworthy"325. This type of thinking might suggest that an inquiry into the accused's mental processes is called for, in order to examine whether the inducement did stimulate the flattery of hope or the torture of fear, and whether it was the flattery or the torture, as distinct from some other cause, which forced the confession from the accused's mind. The traditional English approach, until Director of Public Prosecutions v Ping Lin326, was against conducting any inquiry of this kind. This had the result that very small inducements were fatal, even after R v Baldry. A small selection from a huge field of examples would include: "It will be the right thing ... to make a clean breast of it"327; "I think it might be better if you made a statement and told me exactly what happened"328; "Put your cards on the table. Tell them the lot"329; "You had better tell the truth"330. 323 (1852) 2 Den 430 at 444 [169 ER 568 at 574]. 324 (1856) Dears & Bell 47 at 58 [169 ER 909 at 914]. 325 Commissioners of Customs and Excise v Harz and Power [1967] 1 AC 760 at 820. 327 R v Thompson [1893] 2 QB 12 at 13. 328 R v Richards [1967] 1 WLR 653; [1967] 1 All ER 829. 329 R v Cleary (1963) 48 Cr App R 116. 330 R v Jarvis (1867) LR 1 CCR 96. This traditional approach can be defended in two ways. In Commissioners of Customs and Excise v Harz and Power Lord Reid defended it thus331: "It is true that many of the so-called inducements have been so vague that no reasonable man would have been influenced by them, but one must remember that not all accused are reasonable men and women; they may be very ignorant and terrified by the predicament in which they find themselves. So it may have been right to err on the safe side." An alternative approach is that while an inquiry on the voir dire into what happened between an accused person and a person in authority is manageable, a wider inquiry into the actual contents of the accused's mind is not likely to generate any benefits, or at least any benefits outweighing the increased costs of that inquiry in time and money. This appears to underlie the view expressed in Russell and referred to earlier332. In the years just before the statutory abolition of the inducement rule in England in 1984333, the English courts began to react against the strictness of the inducement rule. In R v Isequilla334 Lord Widgery CJ said: "[T]he courts have perhaps been over-generous in accepting as an inducement for present purposes something which would be unlikely to induce the average man." The House of Lords in Director of Public Prosecutions v Ping Lin335 made it plain that the test was whether the inducement, on the facts of the particular case, caused the confession. Whether or not that tendency, if adopted in Australia, would cause the inducement rule to reflect a reliability rationale more closely is not entirely clear. The curiosity would remain that confessions made without any inducement can be false – whether because of a spontaneous desire to confess, or because of shock or shame on arrest, for example – but no "reliability" principle applies there. At all events, there has been a persistent line of authority disagreeing with the "reliability" principle. Thus in R v Baldry, Pollock CB said of an induced statement336: "There is no presumption of law that it is false or that 331 [1967] 1 AC 760 at 820. 332 See above at [281]. 333 Police and Criminal Evidence Act 1984 (UK), s 76. 334 [1975] 1 WLR 716 at 721; [1975] 1 All ER 77 at 82. 335 [1976] AC 574 at 594, 600-602, 604 and 606-607. 336 (1852) 2 Den 430 at 442 [169 ER 568 at 573]. the law considers such statement cannot be relied upon." And in Basto v The Queen this Court said337: "A confessional statement may be voluntary and yet to act upon it might be quite unsafe; it may have no probative value. Or such a statement may be involuntary and yet carry with it the greatest assurance of its reliability or truth. That a statement may not be voluntary and yet according to circumstances may be safely acted upon as representing the truth is apparent if the case is considered of a promise of advantage being held out by a person in authority. A statement induced by such a promise is involuntary within the doctrine of the common law but it is plain enough that the inducement is not of such a kind as often will be really likely to result in a prisoner's making an untrue confessional statement." However, the reliability principle has been asserted on several more recent occasions in this Court338. Jury danger. A second principle on which the inducement rule has been said to rest was put thus by Pollock CB, as a matter quite distinct from, and indeed contradictory of, the reliability principle339: "The ground for not receiving such evidence is, that it would not be safe to receive a statement made under any influence or fear. There is no presumption of law that it is false or that the law considers such statement cannot be relied upon; but such confessions are rejected because it is supposed that it would be dangerous to leave such evidence to the jury." The theory is evidently that although admissions are received because "what a party himself admits to be true, may reasonably be presumed to be so"340, a jury 337 (1954) 91 CLR 628 at 640 per Dixon CJ, Webb, Fullagar, Kitto and Taylor JJ. 338 For example, Cleland v The Queen (1982) 151 CLR 1 at 18 per Deane J; R v Swaffield (1998) 192 CLR 159 at 167-170 [11] per Brennan CJ. 339 R v Baldry (1852) 2 Den 430 at 441-442 [169 ER 568 at 573] per Pollock CB. This justification is sometimes treated as part of the first. Thus the English Criminal Law Revision Committee Eleventh Report Evidence (General), (1972), Cmnd 4991 at 35 [55] said: "Persons who are subjected to threats, inducements or oppression may 'confess' falsely; juries are peculiarly apt to attach weight to such a confession, even though the evidence of the threat, inducement or oppression is before them; consequently, they must be prevented from knowing of the confession." But that is not how Pollock CB put it in R v Baldry. may give excessive weight to admissions compared with other evidence. Lord Sumner appears to have adopted this view341: "It is not that the law presumes such statements to be untrue, but from the danger of receiving such evidence judges have thought it better to reject it for the due administration of justice ... ." Dixon J quoted those words with approval in Sinclair v The King342. Nemo tenetur se ipsum prodere. Thirdly, if an accused is convicted solely or largely on the basis of a confession, in some minds a question arises whether it can be said that the duty of the prosecution to prove guilt has been discharged. In Frankfurter J's words343: "Ours is an accusatorial system, a system in which the state must establish guilt by evidence independently and freely secured and may not by coercion prove its charge against an accused out of his own mouth." In that sentence much depends on what is meant by "coercion". In R v Sang, Lord Diplock said344: "The underlying rationale of this branch of the criminal law, though it may originally have been based upon ensuring the reliability of confessions is, in my view, now to be found in the maxim nemo debet prodere se ipsum, no one can be required to be his own betrayer or in its popular English mistranslation 'the right to silence'." Lord Reid considered that the exclusion of induced confessions rested on the idea "that nemo tenetur seipsum prodere"345. Under this principle "it is regarded as inappropriate that a person should incriminate himself as the result of the conduct of another"346. Deane J said that the basis of the law rested on "a combination of 340 Slatterie v Pooley (1840) 6 M & W 664 at 669 per Parke B [151 ER 579 at 581]. 341 Ibrahim v The King [1914] AC 599 at 611, citing R v Baldry (1852) 2 Den 430 at 445 [169 ER 568 at 574], which appears to be a slip: the correct reference is in note [339] above. 342 (1946) 73 CLR 316 at 335. 343 Rogers v Richmond 365 US 534 at 540-541 (1961). 344 [1980] AC 402 at 436. 345 Commissioners of Customs and Excise v Harz and Power [1967] 1 AC 760 at 820. 346 R v Dixon (1992) 28 NSWLR 215 at 221 per Wood J. the potential unreliability of a confessional statement that does not satisfy the requirement of voluntariness and the common law privilege against self- incrimination"347. Appeal is also made to a supposed disconformity between the right of the accused not to testify at the trial, and the tender of admissions made before trial. Thus Channell J said348: "[T]he moment you have decided to charge him and practically get him into custody, then, inasmuch as a judge even can't ask a question or a magistrate, it is ridiculous to suppose that a policeman can." That was a view with some support just before the turn of the 20th century349; obviously now police officers can ask questions of suspects both before and after they are charged, on certain conditions. But some have a lingering distaste about the reception of the answers. Disciplining the police. A further principle was stated in Wong Kam-Ming v The Queen. Lord Hailsham of St Marylebone said350: "[A]ny civilised system of criminal jurisprudence must accord to the judiciary some means of excluding confessions or admissions obtained by improper methods. This is not only because of the potential unreliability of such statements, but also, and perhaps mainly, because in a civilised society it is vital that persons in custody or charged with offences should not be subjected to ill treatment or improper pressure in order to extract confessions. It is therefore of very great importance that the courts should continue to insist that before extra-judicial statements can be admitted in evidence the prosecution must be made to prove beyond reasonable doubt that the statement was not obtained in a manner which should be reprobated and was therefore in the truest sense voluntary." Again, much depends on what is meant by "improper methods", "ill treatment" and "improper pressure". Threats or promises of unlawful conduct, depending on what it is, may well be "improper" and indeed may be themselves unlawful conduct; but not all inducements involve threats or promises of unlawful conduct. The House of Lords held in Director of Public Prosecutions v Ping 347 Cleland v The Queen (1982) 151 CLR 1 at 18 per Deane J. 348 R v Booth (1910) 5 Cr App R 177 at 179, differently reported in R v Knight and Thayre (1905) 20 Cox CC 711 at 713. 349 R v Gavin (1885) 15 Cox CC 656; R v Histed (1898) 19 Cox CC 16. 350 [1980] AC 247 at 261. In Australia this was recognised in R v Dixon (1992) 28 NSWLR 215 at 221. Lin351 that establishing an inducement did not require proof of any impropriety. On this approach, the exclusion of confessions has two effects: it protects the accused who made the confession by excluding it, and it deters police officers on future occasions from repeating their conduct with other accused persons. Impact on free choice. Another principle relates to the impact of an inducement on the free choice of the accused to confess. In R v Baldry352, Lord Campbell CJ said that the reason for excluding confessions made after an inducement "is, not that the law supposes that the statement will be false, but that the prisoner has made the confession under a bias, and that, therefore, it would be better not to submit it to the jury". The "bias" is generated by the power of the inducement made by the person in authority. A similar idea appears in Canada: the purpose of the rule is "to avoid the unfairness ... of admitting statements made when the accused believes himself or herself to be under pressure from the uniquely coercive power of the state"353. This has particular force in relation to confessions in police stations, where the accused may have no family or lawyer at hand. Examination of the appellants' arguments The argument based on R v Dixon. In relying on the definition given by Wood J in R v Dixon354 the appellants noted that he used the word "capable" without qualification by any reference to lawful authority. That definition does not, however, assist the appellants. First, that case had nothing to do with scenario evidence. It concluded that a Community Aboriginal Liaison Officer speaking to a young Aboriginal, "held in police cells and charged with serious crime", was a person in authority because, in the eyes of the suspect, the officer "was likely to be seen as a person of some standing and influence with the police ... to be associated with them in his office, and to be in a position both to offer advice as to what he should do and also to secure some help for him in relation to the charges he was facing"355. 351 [1976] AC 574 at 593 per Lord Wilberforce, 594 per Lord Morris of Borth-y-Gest, 602 per Lord Hailsham of St Marylebone. 352 (1852) 2 Den 430 at 446 [169 ER 568 at 575]. 353 R v Grandinetti [2005] 1 SCR 27 at 38 [35]. 354 (1992) 28 NSWLR 215 at 229: quoted above at [259]. 355 (1992) 28 NSWLR 215 at 229-230. That is, the suspect believed that the officer could influence the course of the prosecution, but lawfully. The position here is the converse: the appellants believed that the gangsters with whom they thought they were dealing could influence the course of the prosecutions, but only unlawfully. What Wood J said about the circumstances before him contains nothing favourable to the appellants about the resolution of the problem raised by the completely different circumstances of these appeals. Secondly, the proposition that Wood J's definition does not apply to scenario evidence is supported by his favourable citation of an early scenario evidence case from Manitoba. In R v Todd two detectives represented to the accused that they were members of an organised gang of criminals and that to join that gang he had to satisfy them that he had committed a crime of a serious nature. They were held not to be persons in authority. Wood J quoted the following statement of Bain J356, which has been approved by the Privy Council357: "A person in authority means, generally speaking, anyone who has authority or control over the accused or over the proceedings or the prosecution against him. And the reason that it is a rule of law that confessions made as the result of inducements held out by persons in authority are inadmissible is clearly this, that the authority that the accused knows such persons to possess may well be supposed in the majority of instances both to animate his hopes of favor on the one hand and on the other to inspire him with awe." The expression "the authority that the accused knows such persons to possess" cannot be applied to the supposed gangsters in these cases, because each appellant knew that the "gangsters" possessed no authority – lawful power – at all, whatever unlawful power he believed they had. Thirdly, when Wood J spoke of the person in authority being seen in a certain light by virtue of his "position", the context suggests that he had in mind the person's official position, carrying rights and functions authorised by law, as distinct from the person's de facto power. 356 R v Todd (1901) 13 Man LR 364 at 376. 357 Deokinanan v The Queen [1969] 1 AC 20 at 32-33 per Viscount Dilhorne, Lords Hodson and Upjohn. For those reasons, when Wood J's definition is read in context, it can be seen not to support, and to differ from, that which the appellants propound. Under Wood J's definition mere "ability" or mere "capacity" is not enough: it must be lawful capacity. The argument based on R v Kassulke. The appellants cited R v Kassulke358 in support of the test they propounded. Davies JA, after referring to Dixon J's statement that the expression "'person in authority' includes officers of police and the like, the prosecutor, and others concerned in preferring the charge", said: "There is also authoritative support for the view that the above definition should be expanded, by the notion of the reasonable perception of the accused, to include any person whom the accused reasonably believed was a person who had some power to control or influence the proceedings against him. On this view it would not matter whether the person in question was, objectively, a person in authority within Sir Owen's definition. There may be many persons whom an accused might reasonably perceive were persons who had some power to influence proceedings, in the sense that such proceedings might only commence if that person complains; but who were not persons who in fact had the power to exercise the authority of the State in the investigation or prosecution of the accused." (footnote omitted) In R v Kassulke, the Queensland Court of Appeal decided that a doctor and a medical student who testified about a confession were not persons in authority. Davies JA's statement was thus directed to a very different factual context from the present. Further, although the passage referred to three authorities that Davies JA cited as affording "authoritative support" for the test proffered by the appellants, they do not do so. The first of the three was R v Hodgson359. But the majority of the Supreme Court of Canada there did not include as a person in authority "any person whom the accused reasonably believed was a person who had some power to control or influence the proceedings against him". Their test was "whether the accused reasonably believed the receiver of the statement was acting on behalf of the police or prosecuting authorities". That test is 358 [2004] QCA 175 at [20] per Davies JA (Williams and Jerrard JJA concurring). 359 [1998] 2 SCR 449 at 471-475 [32]-[36] per Lamer CJ, Gonthier, Cory, McLachlin, Iacobucci, Major and Binnie JJ. inconsistent with that advocated by the appellants here. The present appellants did not believe the "gang boss" was acting on behalf of the police; they only believed that he had access to a corrupt police officer. The second authority was R v Dixon. There Wood J said that a "person in authority" included any person who "is seen by the accused by virtue of his position, as capable of influencing the course of the prosecution, or the manner in which he is treated in respect of it"360. But to be seen as having a particular "position" is different from being seen as having "some power to control or influence the proceedings": the former test is much narrower than the latter. The third authority was R v Burt, and in particular some statements of Thomas JA and White J361. They do not support the test proffered by the appellants. Thomas JA's observations centre on whether "the accused would see the person asking the questions as a person in authority". And White J's also centre on "authority" rather than "some power to control or influence the proceedings". The fact that the three cases do not support the test proffered by the appellants is further revealed by the fact that each of them cites R v Todd362; yet that case is cited by Davies JA as authority for a narrower test than that proffered by the appellants, namely a test depending on whether the accused reasonably perceives the questioner to be a person in authority363. In fact the passage on which the appellants rely in Davies JA's judgment in R v Kassulke as supporting their test cannot be regarded as having the authority of the Queensland Court of Appeal. Far from adhering to it, as the appellants submitted, Davies JA rejected the test described in that passage. He did so in the immediately succeeding passage364: 360 (1992) 28 NSWLR 215 at 229. 361 [2000] 1 Qd R 28 at 32-33 [7] per Thomas JA, 41 [39] and 43 [48] per White J. 362 (1901) 13 Man LR 364 at 376, quoted above at [296]; see R v Dixon (1992) 28 NSWLR 215 at 229; R v Hodgson [1998] 2 SCR 449 at 471-472 [32]; R v Burt [2000] 1 Qd R 28 at 41 [39]. 363 R v Kassulke [2004] QCA 175 at [19]. 364 R v Kassulke [2004] QCA 175 at [21]. "If the dual rationales for the [inducement rule] ... are, as I think they are, the deterrence of [that] conduct ... by officers of the State and the risk that such conduct will induce unreliability in a confession then, in my opinion, the view expressed in the preceding paragraph does not serve either rationale. It plainly does not serve the first." That is because, on that view, it is not necessary for the person in question in fact to be a police officer, a prosecutor, or another person concerned in preferring the charge. Davies JA continued365: "And in my opinion it does not serve the second because police officers and those in similar positions, but not all of those persons who may be included in this view, may be presumed to animate hopes of favour and to inspire awe because they hold those positions, thereby risking the reliability of confessions which they obtain by such conduct. This view would include within the meaning of 'person in authority' many who could not be presumed to have those effects. The likely explanation for this view, in my opinion, is historical rather than rational; that there was a time when complainants were persons of authority, in the sense in which Sir Owen used that term, because they would have had the power to initiate, stultify or prevent a prosecution."366 The argument based on threats to do unlawful acts. A person known to be a police officer who threatens to do an unlawful act unless a confession is made is a person in authority. But it does not follow that promises by persons whom a suspect does not know to be police officers to procure a corrupt police officer to obtain practical immunity are promises made by persons in authority. A suspect could well know that a police officer investigating an offence who threatened to beat that suspect unless the latter confessed was not making a lawful threat, but the police officer is still a person in authority because the suspect would be likely to believe, with reason, that the police officer had lawful authority to carry out investigations of and initiate prosecutions for the offence. The appellants' submission was that where a police officer offered a suspect bail367 or offered not to prosecute a suspect's relative368, if the suspect confessed, an inducement had been offered by a person in authority by threatening an unlawful act. It was 365 [2004] QCA 175 at [21]. 366 He referred to R v Wilson [1967] 2 QB 406 at 415. 367 R v Bosman (1988) 50 SASR 365. 368 R v Hurst [1958] VR 396. submitted that the offer of bail was a representation that the police officer would "attempt to pervert the course of justice" by representing that he or she "is close to the judge and that the judge will accede to [the] request". The appellants submitted that by offering not to prosecute a relative of the suspect, the police officer was contemplating a "thwarting [of] the interests of the State [in ensuring that] offenders get prosecuted, and indeed partly sabotaging or steering the investigation away from an ... offender". These are very far-fetched statements. These can be promises which police officers know they can make good lawfully: they promise bail to people they know will get bail; they promise not to charge relatives whom they do not intend to charge. However, even where police officers threaten illegalities, it is possible for someone being questioned reasonably to believe that they have lawful authority to investigate and initiate prosecutions for an offence, even though they are threatening or carrying out unlawful acts in the course of investigating the offence. There is a distinction between threatening or committing unlawful acts in the course of exercising lawful powers of investigation, on the one hand, and, on the other hand, doing so while lacking any lawful authority to conduct an investigation at all. The fact that persons in the former category are persons in authority is not a ground for inferring that persons in the latter category are as well. The argument that the appellants' test is consistent with the outcomes in earlier cases. The appellants' submission that on their test many past cases would still be decided as they were in fact decided does not support that test. Since no existing Anglo-Australian case before Osborn J's decision had to determine the precise issue in these appeals, it is not surprising that the results in past cases are compatible with the appellants' test. The appellants' attack on R v Grandinetti. The appellants submitted that what was said in R v Grandinetti is inconsistent with Wood J's test in R v Dixon. That is not so. The submission that there is inconsistency depends on reading the word "capable" in Wood J's test as meaning that any capacity, lawful or not, to influence the course of the prosecution will suffice. For reasons given above369 that reading is unsustainable. The appellants also submitted that the focus of the "person in authority" rule is different in Canada from that of the equivalent rule in Australia. It was said that in Canada the focus is on the "coercive power of the state". It is true that the Court's conclusion was370: 370 R v Grandinetti [2005] 1 SCR 27 at 42 [44]. "When ... the accused confesses to an undercover officer he thinks can influence his murder investigation by enlisting corrupt police officers, the state's coercive power is not engaged." That is, the state's coercive power was not, to the accused's perception, engaged, and hence the accused was not exposed to the pressures generated when the state's coercive power is engaged. As noted above371, the Court said372: "The underlying rationale of the 'person in authority' analysis is to avoid the unfairness and unreliability of admitting statements made when the accused believes himself or herself to be under pressure from the uniquely coercive power of the state." However, contrary to the appellants' submission, that is among the functions which the inducement rule was seen as performing in English law before the abandonment of the inducement rule in 1984, and which it is seen as performing in Australia in those jurisdictions which have not adopted legislation on the model of the Evidence Act 1995 (Cth). The appellants submitted that R v Grandinetti misconstrued the "disciplinary principle" underlying the inducement rule, and was inconsistent with two other principles underlying it, the reliability principle and the protective principle. They submitted that it paid no regard to the need to protect persons from the coercive conduct of agents of the persons who were actually agents of the state even though they were not believed to be. They adopted the criticism of Conrad J, dissenting in the Alberta Court of Appeal in R v Grandinetti, that the Canadian position wrongly required "the maker of a statement [to] believe that any prosecutorial inducement be for the good of the state"373. Conrad J also said that to permit reception of the evidence would be to allow the police to do indirectly what they could not do directly374. She further said that the undercover officers were making "use of the implied power and authority of the state to assist them in inducing the appellant to confess"375. She concluded376: 372 R v Grandinetti [2005] 1 SCR 27 at 38 [35]. 373 R v Grandinetti (2003) 178 CCC (3d) 449 at 485 [113]. 374 R v Grandinetti (2003) 178 CCC (3d) 449 at 487 [117]. 375 R v Grandinetti (2003) 178 CCC (3d) 449 at 487 [120]. 376 R v Grandinetti (2003) 178 CCC (3d) 449 at 487-488 [120]. "The object of the confessions rule is to ensure that statements extracted by the police are reliable and that they have not been coerced by inappropriate state conduct. It makes sense, therefore, that the rule should apply to the police officers in this case." These criticisms advanced by Conrad J cannot be transposed to the reasoning of the Victorian Court of Appeal. Its approach did not require the appellants to believe that what was said to them was for the good of the state. It required only that they believe, on some reasonable basis, that the "gangsters" had the authority of the state. The appellants did not believe this. If there is unfairness in the eliciting of scenario evidence, that is a matter to be dealt with by inquiring whether there should be discretionary exclusion on grounds of unfairness, not as part of the inducement rule. To say that the police officers did indirectly what they could not have done directly is questionable: there was insufficient evidence for the appellants to be suspects, they were not in custody, and there was no duty to warn them about their right to silence. To describe the conduct of the police officers posing as gangsters as making "use of the implied power and authority of the state" is incorrect; they were reasonably to be perceived by the appellants as making use of their functions as gangsters and making use of a confederate, a supposedly corrupt police officer, who could not be described as embodying the "power and authority of the state" when he was nullifying its attempts to detect crime. The appellants in the present appeals did not demonstrate how the admissions were at risk of being unreliable, or why the conduct was "inappropriate". That is, the appellants did not demonstrate how the reception of the evidence was inconsistent with the reliability principle and the protective principle. The argument based on uniforms and badges. If the police officers who induced the appellants' admissions had not been undercover operatives disguised as gangsters, but had been acting as uniformed officers (or as plain clothes detectives with identification), no doubt they would have been persons in authority, because it may have been reasonable for the appellants to believe that they were. To postulate this variation is not helpful. It brings about a radical change in the circumstances. It introduces discordance and unreality: for a representation by a person believed to be a gangster that he can procure immunity for the suspect from a corrupt police officer is likely to be different in its effect from a representation by a police officer that he can procure immunity for the suspect from a police officer, corrupt or otherwise. It was not reasonable for the appellants to perceive the "gangsters" as being capable lawfully of influencing the course of the investigation; it would be more reasonable to perceive police officers as being capable of doing so. One question which the appellants posed by varying the facts of the present cases, which may arise in other cases, but which does not arise in the present circumstances, is whether the supposed "corrupt police officer" who was to ensure immunity for each appellant could be a person in authority. The "corrupt police officer" in these appeals could not be a person in authority, because he offered no inducement personally and he offered no inducement through the undercover officers with whom the appellants had dealings. It might be a question, in another case in which a person in that position did offer inducements, whether that person was a person in authority. The answer to that question would depend on whether it was reasonable for the accused to perceive the person to have the lawful authority of the state to act as he did. Consequences of the appellants' test. The appellants did not shrink from the extreme consequences of their arguments. Their argument that persons were persons in authority if they had a practical ability to influence the conduct of the prosecution, whether lawfully or not, if sound, entails the result that a criminal who was not an undercover police officer and who offered to assassinate the crucial witness to the accused's crime would be a person in authority if there were reasonable grounds for believing in his capacity to do this. The Court of Appeal rightly rejected that consequence as absurd, and its absurdity reveals the invalidity of the argument which leads to it377. The relationship between the purposes of the inducement rule and the "person in authority" requirement The rules excluding confessions induced by a person in authority are old and, for the most part, well-settled. Ordinarily what needs to be considered are the terms of the rules rather than their underlying principles. However, the present appeals are presented by the appellants as raising what is in this country a novel problem about their application. The appellants seek to solve that problem by altering the rules. Consideration of whether that should be done may be assisted by examining the relationship between the purposes of the inducement rule and the "person in authority" requirement. Reliability. If confessions are excluded because an inducement carries a risk of unreliability, it is true that some inducements from persons not in authority could be weighty, and likely to affect reliability. The Privy Council accepted this in Deokinanan v The Queen when it said378: 377 R v Tofilau (No 2) (2006) 13 VR 28 at 66 [165]. 378 [1969] 1 AC 20 at 33. "The fact that an inducement is made by a person in authority may make it more likely to operate on the accused's mind and lead him to confess. If the ground on which confessions induced by promises held out by persons in authority are held to be inadmissible is that they may not be true, then it may be that there is a similar risk that in some circumstances the confession may not be true if induced by a promise held out by a person not in authority, for instance if such a person offers a bribe in return for a confession." But the fact is that persons in authority in the sense of police officers, prosecutors and employers are more likely in standard instances to affect reliability because of the force of what they say than persons who are not persons in authority. Police officers in particular have power in relation to questions like the grant of police bail, the formulation of charges, the length of interrogations and the conditions under which they are conducted. It is they who conduct most investigations of crime and most interrogations about it. It is they who conduct those interrogations largely in the unamiable environment of police stations (and indeed modern legislation requiring tape recording tends to compel this). In standard instances, persons who are believed to be police officers are more likely to be in a coercive position vis-à-vis suspects, because they are arms of the state, than persons who are not in authority. To the extent that inducements can cause suspects to confess to crimes which they did not commit, inducements are more likely to have that outcome when they proceed from persons in authority as traditionally understood than other inducements are. Jury danger. The view that confessions are excluded because of their disproportionate effect on the jury, if treated as a separate justification for the inducement rule independently of the reliability principle, would lead to the exclusion of all confessions, not just those generated by inducements and not just those generated by inducements proceeding from persons in authority. Hence that principle is unrelated to the "person in authority" requirement and does not cast any light on the definition of "person in authority". Nemo tenetur se ipsum prodere. If confessions generated by inducements are excluded on the ground that they are the result of the accused having been influenced by the state to engage in self-betrayal or self-accusation and they unsatisfactorily relieve the state of its duty to prove its allegations, then there is no case for including in the definition of "person in authority" persons who were not perceived to be officers of the state. To take the present facts as an example, the appellants thought they were obtaining private and personal advantages from gangsters. It is true that a conduit to one of those advantages was thought to be the connection between the gang and a corrupt police officer, but the appellants can hardly reasonably have thought that that officer was acting in the state's interests. Disciplining the police. If confessions are excluded because of a desire to prevent police officers using threats or promises on the ground that it is improper for them to do so, then the inducement rule has no operation in relation to non- police officers. Accepting the appellants' contention that what matters is the perception of the person confessing, the function of ensuring appropriate police behaviour is not advanced by controlling the conduct of people who appear to be gangsters. The appellants leave out of their test that which the Director puts in his, namely a requirement that the person offering the inducement actually be a person in authority. If that is not a necessary element of the test, as the appellants would have it, controlling the behaviour of persons in relation to whom it does not matter whether they are police officers is immaterial. Impact on free choice. If the purpose of the inducement rule is to preserve the autonomy of the accused's will in the face of pressure from the uniquely coercive power of the state, there is no justification for extending the definition of "person in authority" to cover persons who are not perceived to be officers of the state, but only gangsters. Summary. Whether the basis of the inducement rule be reliability, preventing improper state coercion, disciplining the police, or avoiding unfair reductions in the choice of suspects to speak, a perception by the suspect that the coercive power of the state is being used is central: "most criminal investigations are undertaken by the state, and it is then that an accused is most vulnerable to state coercion"379. Where that perception does not exist, the basis of the inducement rule is not present. It is true that the coercive power of bodies or persons other than the state can be as coercive in particular cases as that of the state, but to select that fact as a reason for devising a new inducement rule would be to create a rule wider than that which the appellants are seeking. It would be to abandon the "person in authority" requirement. It would be to compel the prosecution to establish the voluntariness of every statement against interest made by an accused to any person. To require that is to impose "an overwhelming burden"380. The appellants' test should not be adopted The appellants did not submit in terms that the "person in authority" requirement should be completely abandoned. However, in substance the test which the appellants advocate is not a test which simply reflects a minor 379 R v Hodgson [1998] 2 SCR 449 at 467 [24]. 380 R v Hodgson [1998] 2 SCR 449 at 467 [25]. modification in the received test to cope with supposedly novel circumstances: rather it goes very close to abandoning any "person in authority" requirement. That is because in modern conditions the role of police officers in preparing matters for prosecution is so crucial that to include in the ambit of "person in authority" all persons reasonably believed to have the practical capacity (whether lawfully nor not) to influence police conduct is to blur or go close to annihilating the distinction between inducements offered by persons in authority as traditionally understood and inducements offered by anyone at all. The inevitable consequence of adopting the test which the appellants advocate would be that the Court would tend to look only to the degree of coerciveness or attractiveness in the inducement. In summary, the change in the law which the appellants invite the Court to make should not be made for the following reasons. To widen the "person in authority" requirement is to change a rule of law which has existed since 1809. According to the conclusions of distinguished modern scholarship381, the requirement has its roots two or three generations earlier, and it grew up then on rational grounds. The rule has had its modern critics382. But the only judicial doubts about it were expressed over a very brief period a long time ago. To alter the "person in authority" requirement is to take a step which the Privy Council refused to take in Deokinanan v The Queen, and to take a step which was thought to call for legislation to effectuate it in the United Kingdom, Australian federal courts, the Australian Capital Territory, Tasmania and Norfolk Island383. In each case that legislation came after very lengthy and careful consideration by law reform bodies384. They conducted "a wide survey of the whole field" and resisted a "policy of make do and mend"385. 381 Above at [271]-[272]. 382 For example, Mirfield, "Confessions – the 'Person in Authority' Requirement", (1981) Criminal Law Review 92. 383 Police and Criminal Evidence Act 1984 (UK); Evidence Act 1995 (Cth); Evidence Act 1995 (NSW); Evidence Act 2001 (Tas); Evidence Act 2004 (Norfolk Island). 384 English Criminal Law Revision Committee Eleventh Report Evidence (General), (1972), Cmnd 4991 at 39 [58] and 41-44 [61]-[66]; Australian Law Reform Commission, Evidence, Interim Report No 26, (1985) vol 1 at 69 [141], 432-440 (Footnote continues on next page) But even in those jurisdictions the step of abandoning the "person in authority" requirement was not a step taken in isolation and for its own sake. The "person in authority" requirement went, but only as a small part of a radical process of jettisoning the common law on confessions and substituting a wholly restructured system. The model which Australian legislators have followed is that of the Evidence Act 1995 (Cth). Section 84 provides for the exclusion of admissions the making of which were influenced by violent, oppressive, inhuman or degrading conduct, whether towards the person who made the admission or towards another person, or a threat of conduct of that kind. Section 85 provides that evidence of certain admissions is inadmissible unless the circumstances in which the admission was made were such as to make it unlikely that the truth of the admission was adversely affected. The circumstances in which that applies relate to admissions made by a defendant in criminal proceedings in the course of official questioning, or as a result of an act of another person who is capable of influencing the decision whether a prosecution of the defendant should be brought or should be continued. In addition, s 138 provides for the exclusion of evidence obtained improperly or illegally, unless the desirability of admitting the evidence outweighs the undesirability of admitting evidence obtained in the way in which the evidence was obtained. Section 90 provides that in a criminal proceeding the court may refuse to admit evidence of an admission if it would be unfair to a defendant to use it. Section 135 gives the court power to refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might be unfairly prejudicial, be misleading or confusing, or cause or result in undue waste of time. And s 137 obliges a court in criminal proceedings to refuse to admit evidence adduced by the prosecutor if its probative value is outweighed by the danger of unfair prejudice to the defendant. In England the equivalent to ss 84 and 85 is s 76 of the Police and Criminal Evidence Act 1984. Confessions may be excluded if obtained by oppression (ie torture, inhuman or degrading treatment, and the use or threat of violence, whether or not amounting to torture): s 76(2)(a) and (8). Confessions may also be excluded if obtained in consequence of anything said or done which was likely to render unreliable any confession: s 76(2)(b). To modify the inducement rule as the appellants wish would be to take a step favourable to the interests of defendants generally. But that was not the way the legislatures, accepting [759]-[770]; vol 2, App C at 196-198 [131]; Australian Law Reform Commission, Evidence, Report No 38, (1987) Ch 12. 385 Myers v Director of Public Prosecutions [1965] AC 1001 at 1022 per Lord Reid. the advice of expert law reform bodies, chose to act. They got rid of the "person in authority" requirement, but also made changes hostile to the interests of defendants generally by emphatically reversing the trend which R v Baldry had criticised, checked, but not reversed. No doubt, as Marks submitted, it can be appropriate for the common law to be modified so as to adopt, or accommodate itself to, statutory changes, though this is not an easy course in a federation like Australia that has a single common law, where legislation has altered that single common law in some jurisdictions but not others. To refine or abolish the "person in authority" requirement in the light of statutory refinement or abolition would not necessarily be outlandish. But complete abandonment of the received inducement rules and the substitution for them of entirely new statutory regimes might be thought a different matter, particularly since the new regimes at present only apply to a minority of jurisdictions and a minority of litigants; and the step is indeed not one which the appellants invite the Court to take. Nor is there any injustice to the present appellants in not taking this step: it is highly unlikely that the appellants' confessions would have been excluded under ss 84 or 85 if those provisions had been in force in Victoria, since the conduct of the operatives was not violent, oppressive, inhuman or degrading within the meaning of s 84, and since, on the findings of the trial judges, it was unlikely that the truth of the admissions was affected by that conduct within the meaning of s 85. It has not been shown that the purposes of the common law rules underlying induced confessions can only be fulfilled if the proposed change is made. The proposed revision or abandonment of the "person in authority" requirement might have had some force in the 19th century. But two changes have taken place in the law in the 20th century which undercut the need for any change. One is that the courts have now detected, or perhaps created, the doctrine of "basal involuntariness", and have done so more markedly in Australia than in England386. The other is the development, since the late 19th century387, of doctrines permitting the exclusion of evidence on "discretionary" grounds of various kinds388. To 386 See [326] below. 387 See R v Miller (1895) 18 Cox CC 54 at 55; R v Knight and Thayre (1905) 20 Cox CC 711 at 713; Ibrahim v The King [1914] AC 599 at 614; R v Christie [1914] AC 388 See the summary at [245]-[248] above. the extent that the common law inducement rule is thought to bear harshly on accused persons – a highly controversial proposition – the harshness is ameliorated by the possibility of these doctrines being applicable in particular cases. Conclusion on inducement The Director is correct in submitting that a person to whom an accused has made admissions cannot be a person in authority at least unless that person is perceived by the accused, on reasonable grounds, to have the lawful authority of the state to investigate the circumstances. On that test, the undercover officers were not persons in authority, because each appellant lacked reasonable grounds for thinking that the undercover officers had lawful authority to investigate the offence of which that appellant, it was thought, was guilty. The only reasonable belief which the appellants could have had about those persons was that they were gangsters, not authorised police officers, and that, as the Director submitted, "[t]hey do not call upon the power of the State. They call upon the power of evil." Accordingly, the admissions of the appellants were not the result of inducements rendering them inadmissible. Section 149 of the Evidence Act The appellants contended that if the admissions were involuntary on the basis of being induced by threats or promises from a person in authority, s 149 of the Evidence Act did not make them admissible. Since it has been held that the admissions were not involuntary on this ground, no occasion arises to consider the application of s 149. Basal involuntariness: general The second aspect of the appellants' arguments rested on "basal involuntariness". This is a doctrine which had the advantage for the appellants that no "person in authority" requirement need be satisfied. The origins of "basal involuntariness". The origins of the doctrine of "basal involuntariness" are much later than those of the "inducement rule". In Australia they lie in the joint judgment of Dixon, Evatt and McTiernan JJ in Cornelius v The King. They said389: 389 (1936) 55 CLR 235 at 246. "[A] promise of advantage and a threat of harm are not the only matters which may deprive a statement of its voluntary character. For instance, a confession which is extracted by violence or force, or some other form of actual coercion is clearly involuntary, and, therefore, cannot be received in evidence." They then approved390 a statement of Brandeis J391: "a confession obtained by compulsion must be excluded whatever may have been the character of the compulsion". They also spoke approvingly of cases excluding confessions392: "where the compulsion alleged takes the form of prolonged and sustained pressure by police officers upon a prisoner in their hands, until, through mental and physical exhaustion, to which want of sleep and food sometimes contributes, he consents, in order to obtain relief, to make a confession of the crime. If it is alleged that the confession is the outcome of pressure, the question whether by persistent interrogation, or by other means, a prisoner has been constrained to confess so that his statement cannot be regarded as voluntary must sometimes be decided as a matter of degree." And they concluded by saying393: "no doubt can be felt that interrogation may be made the means or occasion of imposing upon a suspected person such a mental and physical strain for so long a time that any statement he is thus caused to make should be attributed not to his own will, but to his inability further to endure the ordeal and his readiness to do anything to terminate it." However, they also said that the "difficulty of defining a standard in such a matter is necessarily almost insuperable"394. 390 (1936) 55 CLR 235 at 246. 391 Wan v United States 266 US 1 at 14 (1924). 392 Cornelius v The King (1936) 55 CLR 235 at 246-247. 393 Cornelius v The King (1936) 55 CLR 235 at 252. 394 Cornelius v The King (1936) 55 CLR 235 at 252. In R v Lee Latham CJ, McTiernan, Webb, Fullagar and Kitto JJ said, adopting the words of Dixon J in McDermott v The King395, that an admission by an accused person is not admissible396: "unless it is shown to have been voluntarily made in the sense that it has been made in the exercise of free choice and not because the will of the accused has been overborne or his statement made as the result of duress, intimidation, persistent importunity or sustained or undue insistence or pressure". And in McDermott v The King Dixon J also said397: "It is perhaps doubtful whether, particularly in this country, a sufficiently wide operation has been given to the basal principle that to be admissible a confession must be voluntary, a principle the application of which is flexible and is not limited by any category of inducements that may prevail over a man's will." It was upon the latter part of that proposition in particular that the appellants fastened. They said that the voluntariness test posed an inquiry into whether each appellant "truly had a freedom to speak or remain silent" – a "free choice" – that is, "a choice unconstrained by any pressure, hope of advantage or benefit or force or coercion or compulsion, a true free choice". They also stressed the opening words of the proposition, and they noted that Dixon J said of the discretion to exclude confessions398: "In part perhaps it may be a consequence of a failure to perceive how far the settled rule of the common law goes in excluding statements that are not the outcome of an accused person's free choice to speak." "Oppression" under English common law. The approach of the appellants would give a very wide scope to "basal involuntariness". A similar approach may have applied at common law in England: there appears to have been no doctrine of "basal involuntariness", but, even if there were no inducement by a person in authority, confessions were inadmissible where "oppression" was 395 (1948) 76 CLR 501 at 511. 396 (1950) 82 CLR 133 at 144. 397 (1948) 76 CLR 501 at 512. 398 McDermott v The King (1948) 76 CLR 501 at 512. present. The doctrine of oppression was asserted in 1963 when Lord Parker CJ said that answers and statements were inadmissible if "obtained in an oppressive manner by force or against the wishes of an accused person"399. The Judges' Rules 1964 then stated that the Rules did not affect the principle400: "[t]hat it is a fundamental condition of the admissibility in evidence against any person, equally of any oral answer given by that person to a question put by a police officer and of any statement made by that person, that it shall have been voluntary, in the sense that it has not been obtained from him by fear of prejudice or hope of advantage, exercised or held out by a person in authority, or by oppression." In R v Prager the Court of Appeal adopted two "definitions or descriptions" of oppression401. The first was that of Sachs J in R v Priestley402: "[S]omething which tends to sap, and has sapped, that free will which must exist before a confession is voluntary." He added that relevant facts included: "such things as the length of time of any individual period of questioning, the length of time intervening between periods of questioning, whether the accused person had been given proper refreshment or not, and the characteristics of the person who makes the statement. What may be oppressive as regards a child, an invalid or an old man or somebody inexperienced in the ways of this world may turn out not to be oppressive when one finds that the accused person is of a tough character and an experienced man of the world." The second definition or description was taken from an address by Lord MacDermott. He said oppressive questioning was403: 399 Callis v Gunn [1964] 1 QB 495 at 501. 400 Practice Note (Judges' Rules) [1964] 1 WLR 152 at 153. 401 [1972] 1 WLR 260 at 266 per Edmund Davies and Stephenson LJJ and 402 (1965) 51 Cr App R 1. 403 "The Interrogation of Suspects in Custody", (1968) 21 Current Legal Problems 1 at its nature, duration or other attendant "questioning which by circumstances (including the fact of custody) excites hopes (such as the hope of release) or fears, or so affects the mind of the suspect that his will crumbles and he speaks when otherwise he would have stayed silent." Yet the first definition or description could operate very differently from the second. Unless full force is given to the phrase "his will crumbles", the words "he speaks when otherwise he would have stayed silent" are capable of applying so as to render many confessions inadmissible, because spontaneous confessions are much rarer than those which follow on from questioning, and the most innocuous conduct can cause suspects to speak in the sense that but for the conduct they would otherwise have remained silent. A related danger exists with the appellants' submissions on basal involuntariness. Dixon J's statement analysed. Dixon J in McDermott v The King drew a distinction between confessions made in the exercise of free choice and those made by persons whose will was overborne. The examples he gave of an overbearing of the will – "duress, intimidation, persistent importunity, or sustained or undue insistence or pressure"404 – are instructive, for they are restricted. In 1948, when McDermott v The King was decided, duress was the use or threat of either violence to the person or imprisonment. At that time duress of goods was not seen as sufficient to render a contract void405, although money paid in order to obtain possession of goods wrongfully detained, or to avoid their unlawful detention, was recoverable in an action for money had and received406. Nor was economic duress then recognised as a ground rendering a contract void. In any event both duress of goods and economic duress are factually remote from involuntary confessions. Intimidation is the threat of violence or some other illegal act. The expression "sustained or undue insistence or pressure" implies that insistence or pressure which is less than sustained or undue does not produce involuntariness. Even though these examples selected by Dixon J are not exhaustive, his use of them points to a relatively narrow ambit for "basal involuntariness" and suggests that the appellants are wrong in construing other parts of Dixon J's language in McDermott v The King as indicating any breadth in the doctrine. 404 McDermott v The King (1948) 76 CLR 501 at 511. 405 Skeate v Beale (1841) 11 Ad & E 983 at 990 [113 ER 688 at 690]; The Unitas [1948] P 205; aff'd sub nom Lever Bros and Unilever NV v HM Procurator General [1950] AC 536 (on other grounds). 406 For example, Maskell v Horner [1915] 3 KB 106. The limits of Dixon CJ's conception of "basal involuntariness". Dixon CJ was either the sole or a primary author of the "basal involuntariness" doctrine. That he, at least, had a more limited view of voluntariness than that suggested by the appellants is indicated not only by the precision of the language quoted above407 from Cornelius v The King, and the language just analysed in McDermott v The King, but also by other decisions in which he participated. In Wendo v The Queen408 he said: "[O]nce it was established that a prisoner understood what he was doing in making a statement which, if true, would amount to a confession, it is admissible in evidence quite independently of its probative value." (emphasis added) Another case in which the limits of Dixon J's approach can be seen is Sinclair v The King, in relation to his treatment of confessions by persons of unbalanced mind. If a confession is inadmissible where the choice of the maker is not free, an impaired mental capacity to choose would appear relevant. And it is true that a confession is inadmissible as involuntary where the mind of the accused is so unbalanced as to render it wholly unsafe to act on the confession. But Dixon J limited this avenue of exclusion to extreme cases. He said409: "It may be conceded that a confession may in fact be made by a person whose unsoundness of mind is such that no account ought to be taken of his self-incriminating statements for any evidentiary purpose as proof of the criminal acts alleged against him. In such a case it might properly be rejected." But he went on410: "A confession is not necessarily inadmissible as evidence upon a criminal trial because it appears that the prisoner making it was at the time of unsound mind and, by reason of his mental condition, exposed to the liability of confusing the products of his disordered imagination or fancy with fact." 408 (1963) 109 CLR 559 at 562. 409 Sinclair v The King (1946) 73 CLR 316 at 338. 410 Sinclair v The King (1946) 73 CLR 316 at 338. Dixon J rejected analogies with inquiries into the competence of witnesses said to be insane and inquiries into whether accused persons were fit to plead. He also declined to accept an analogy with the inducement rule, drawn in an argument summarised thus411: "The argument is that to be admissible evidence of a confession must be an expression of the independent will of the confessionalist and, moreover, must derive from the circumstances in which it is made that assurance of trustworthiness which the law finds in the improbability of a false admission being made of incriminating facts. If the mind is unsound and its infirmity disables the person confessing from distinguishing between reality and unreality, how, it is asked, can these conditions be fulfilled?" He rejected this argument, first, because he said it "appears to me to press too far the supposed logical basis of the exclusion of 'involuntary' confessions"412. He said413 that that rule was, in the words of Lord Sumner, "a rule of policy", the policy being "not that the law presumes such statements to be untrue, but from the danger of receiving such evidence judges have thought it better to reject it for the due administration of justice"414. He said, evidently with approval, that the view of Holmes CJ was that the inducement rule "had been carried very far"415. Indeed, he quoted Holmes CJ as saying that the inducement rule had gone "to the verge of good sense, at least"416. Secondly, he reasoned that a strict, perhaps over-strict, rule relating to induced confessions should not be extended to non-induced confessions. He said417: 411 Sinclair v The King (1946) 73 CLR 316 at 334-335. 412 Sinclair v The King (1946) 73 CLR 316 at 335. 413 Sinclair v The King (1946) 73 CLR 316 at 335. 414 Ibrahim v The King [1914] AC 599 at 610-611, attributing this to R v Baldry (1852) 2 Den 430 at 445 [169 ER 568 at 574]: the correct reference is to Pollock CB at 442; 573. 415 Sinclair v The King (1946) 73 CLR 316 at 335. 416 Commonwealth v Chance 54 NE 551 at 553 (Mass, 1899) as quoted in Sinclair v The King (1946) 73 CLR 316 at 336. 417 Sinclair v The King (1946) 73 CLR 316 at 337. "The tendency in more recent times has been against the exclusion of relevant evidence for reasons founded on the supposition that the medium of proof is untrustworthy, in the case of a witness, because of his situation and, in the case of evidentiary material, because of its source. The days are gone when witnesses were incompetent to testify because they were parties or married to a party, because of interest, because of their religious beliefs or want of them or because of crime or infamy. We now call the evidence and treat the factors which formerly excluded it as matters for comment to the tribunal of fact, whose duty it is to weigh the evidence. It must be remembered that the rules relating to the presumptive involuntariness of confessions were developed at a time when the incompetency of witnesses on such grounds was a matter of daily inquiry and, moreover, when the prisoner could not testify. These are all considerations against extending the principle upon which confessions resulting from intimidation or from a threat made or promise given in reference to the charge by a person in authority are excluded as involuntary to cases of insanity where the will may be affected or there may be a liability to confuse the data of experience with those of imagination, so that such factors without more would be enough to exclude a confession." He then dealt with the position of the appellant in Sinclair v The King thus418: "Boyd Sinclair's mental state did not disable him from observing, appreciating, recollecting and recounting real occurrences, events or experiences. The fact that his mind, in its schizophrenic state, may have been stored with imaginary episodes and with the memory of unreal dramatic situations would, of course, make it impossible to place reliance upon his confessional statements as intrinsically likely to be true. The tendency of his mental disorder to dramatic and histrionic assertion formed another difficulty in attaching an inherent value to what he said. But it is to be noticed that his condition did no more than make it possible that the source of any confessional statement made, lay in these tendencies. His was not a case in which it could be said that the higher probability was in favour of his confession of such a crime being the product of imagination. Reason suggests that in such circumstances it is for the tribunal of fact to ascertain or verify the factual basis of the statements of a man in such a mental condition by comparing their the circumstances and contents with independent proofs of the 418 Sinclair v The King (1946) 73 CLR 316 at 337-338. occurrences to which they relate. It happens that external facts independently proved do supply many reasons for supposing that the confessional statements made by Boyd Sinclair were substantially correct. Though this consideration is not relevant to the question of the legal admissibility of such statements, it provides an example of the inconvenience or undesirability of a rule of rigid exclusion." The limits of Dixon J's approach is also indicated by the fact that in Sinclair v The King he referred with approval to United States authority holding that a confession by an intoxicated person is not inadmissible "unless the degree of intoxication is so great as to deprive him of understanding what he was confessing"419. In similar fashion Sholl J considered that evidence could be excluded as involuntary only if an accused person lacked "sufficient intellectual capacity ... to determine whether he would or would not exercise his right to refuse to answer"420. A mere reduction in that capacity did not suffice. The aspect of the basal involuntariness doctrine under discussion has only occasionally led to exclusion. A confession late at night by an accused person who had fainted twice, had difficulty in moving and was "in a dopey condition" was excluded on the ground that the prosecution had not established that it was voluntary421. The same result applied to a confession by a person who, after stabbing another person, had "blacked out" and attempted suicide by taking poison and by jumping into Auckland Harbour; he was found in wet clothing, cold, shivering, frothing at the mouth and in a distressed state; he had repeatedly vomited; and he had been rushed to hospital where his stomach had been forcibly pumped out before the confession was elicited422. But instances of this kind, where there has been automatic exclusion on grounds of involuntariness, as distinct from discretionary exclusion, are rare. The point of these citations is to demonstrate that Dixon J, and other judges, have considered the "basal involuntariness" rule in its application to mentally disordered persons to be quite circumscribed. The appellants do not now claim the benefit of any doctrine relating to mental disorder, although Marks 419 Commonwealth v Zelenski 191 NE 355 at 357 (Mass, 1934), citing Commonwealth v Howe 9 Gray 110 at 114 (Mass, 1857). (The correct page is in fact 112.) 420 R v Buchanan [1966] VR 9 at 15. 421 R v Burnett [1944] VLR 115 at 116-117 per O'Bryan J. 422 The Queen v Williams [1959] NZLR 502. at one stage appeared to423, but the limits of the "basal involuntariness" rule in that respect suggests that it is not extensive in other respects, and that the width of the inducement rule is not a pointer towards any width in the "basal involuntariness" rule. To the very narrow extent to which a category of basal involuntariness has been found or contemplated as a possibility in relation to persons suffering from mental disorder, or a head wound, or extreme fatigue, that category operates as an exception to a general proposition – it cannot be called a rule of law – that "what will render a confessional statement involuntary must be some factor external to the accused"424. The factors listed by Dixon J in McDermott v The King were all factors external to the accused – factors causing the will of the accused to be "overborne"425. The appellants' first submission: denial of appellants' rights The appellants submitted that "the vice is here that these were police officers who deliberately set about the scenario tactic to secure from the suspect a detailed confession which, had they gone about it by interview process, they could not have done without giving proper warnings and securing and advising that they could have the benefit of a solicitor". It was the essence of scenario evidence that "the appellants in each case had to be denied their fundamental rights". In particular, counsel for Clarke submitted: "Naturally [Clarke] was not afforded any protective rights; they were and indeed, had to be, deliberately circumvented in order to achieve the sole purpose of extraction of the confession." This submission faces difficulties of a magnitude which permit it to be rejected at this stage. It may be true that had the police officers not been operating undercover, but had asked each appellant to answer questions, the appellants would not have answered, or would not have made admissions. But whether the police officers would have had a duty to warn the appellants about a right to communicate with a solicitor depends on the terms of ss 464A(2) and 464C of the Crimes Act 1958 (Vic) ("the Crimes Act"). The sections protecting the rights of suspects under interrogation did not apply to the police officers for 423 Below at [380]. 424 R v Azar (1991) 56 A Crim R 414 at 419 per Gleeson CJ (Finlay and Smart JJ concurring). 425 Collins v The Queen (1980) 31 ALR 257 at 307 per Brennan J. several reasons. Since they were "engaged in covert investigations under the orders of a superior" they fell outside the definition of "investigating official" in s 464(2). Secondly, the appellants were not "in custody" within the meaning of s 464A(2) or s 464C. For the same reasons the duty created by s 464A(3) to warn the appellants that they did not have to do or say anything but that anything they did say or do might be given as evidence did not arise. Even if the first bar to the application of ss 464A and 464C was removed by postulating a case where police officers were not operating covertly, the second would remain as long as the appellants were not taken into custody. Another difficulty is that when police officers, pursuant to judicial warrant, listen to telephone calls made by others, they may obtain evidence of admissions which they could not have obtained by the process of interviewing. Yet the surveillance evidence is admissible. So is confessional evidence obtained by eavesdropping. An even more fundamental difficulty is that this submission does not correspond in any way with Dixon J's test in McDermott v The King. That test does not turn on a rejection of police tactics which seek to obtain evidence indirectly which could not have been obtained directly without certain safeguards being supplied to the accused. It turns simply on an overbearing of the will. The submission might be material to discretionary exclusion. It is not material to basal involuntariness. The appellants' second submission: absence of choice The appellants' second submission was, in essence, that their confessions were involuntary because they "had no choice but to make the confessions they did". Each had no choice, it was submitted, because each feared prosecution for murder, each was promised that in return for a confession the murder investigations would cease, and each believed that that promise would be fulfilled. The appellants submitted that the courts below had misapplied the "basal involuntariness" rule by relying excessively on the fact that the appellants had been told by the covert operatives that they could leave at any time. The appellants' third submission: freedom to remain silent nullified by deception The appellants' third submission was that even if the will of the appellants had not been overborne, "basal involuntariness" existed because the appellants' freedom to speak or remain silent had been so influenced by deception, trickery or manipulation that there had been no effective exercise of the freedom. Deception and manipulation Is the conduct of a person who has been deceived not voluntary? Underlying both the second and the third of the appellants' submissions was a contention, in the words of a learned article, that the "conduct of a person who has been deceived is in an important sense not voluntary: the behaviour is, to the extent it is governed by the deception, not under the control or the choice of the actor"426. That reasoning is unsound in relation to the "basal involuntariness" doctrine. There are innumerable examples of confessions being admitted despite the confession having been generated by deception. Sometimes the deception is contemplated by the grant of warrants by judges to police officers to record telephone conversations secretly, or to record face-to-face conversations secretly427. Often the decision to record conversations with a particular accused person secretly is made because no recording would be possible if that accused person knew of the recording. Secret recording thus commonly depends on trickery - creating or confirming a false assumption that no recording is being made. Sometimes the deception occurs without prior judicial authority, as where police officers deliberately arrange matters so that they can overhear what a suspect says: the suspect has been deceived into thinking that he can speak with impunity. To introduce a rule which could render "involuntary" all confessions made on the basis of a false assumption of fact created or encouraged by police officers would radically change the law. In any event, the force of the contention advanced in the article quoted at the start of the preceding paragraph is lessened by the fact that in the same article the author said that while lying in court and deceiving suspects about their rights were wrong, "there are distinctly fewer moral objections to the use of disguises, informers or other agents at the investigative stage, so long as this does not involve prompting or questioning a suspect in relation to an incident in a way that undermines rights that should be protected"428. Whether, as Clarke submitted in relation to discretionary exclusion, rights were undermined in this case is considered below429. 426 Ashworth, "Should the Police be Allowed to Use Deceptive Practices?", (1998) 114 Law Quarterly Review 108 at 112. 427 As in Em v The Queen [2006] NSWCCA 336. 428 Ashworth, "Should the Police be Allowed to Use Deceptive Practices?", (1998) 114 Law Quarterly Review 108 at 138. 429 Below at [391]-[414]. Deception and involuntariness: the cases. The appellants referred to specific authority in support of their third submission. The appellants contended that Murphy J in Cleland v The Queen430 had said that "involuntariness can arise where there is any suggestion of trickery or false representation". "It may be a question of classification whether a confession induced by false representations or other trickery is voluntary. In older decisions these were regarded as negating voluntariness (see for example R v Johnson432; Attorney-General (NSW) v Martin433; see also various statutory provisions such as Crimes Act (NSW) 1900, s 410; Evidence Act 1928 (Vic), s 144 which treated inducement by false representations as requiring exclusion)." Later, after quoting a lengthy passage from the judgment of Hayes J in R v "The voluntariness of a confession is suspect if it is obtained by interrogation rather than being volunteered, or if, although volunteered, the procedure involved interrogation; if the confessor was in custody, lawful or otherwise; or if anything suggests inducement by threats, promises, false representations or other trickery." The submission which the appellants advanced on the strength of these passages is too extreme. 430 (1982) 151 CLR 1 at 13-15. 431 Cleland v The Queen (1982) 151 CLR 1 at 13. This passage was noted by Toohey, Gaudron and Gummow JJ in R v Swaffield (1998) 192 CLR 159 at 197 [75]. There is single judge authority that an admission made under material misapprehension of the facts is not voluntary: R v Kwabena Poku [1978] Crim LR 488; R v Anderson (1991) 105 FLR 25, and unreported cases referred to at 31. 432 (1864) 15 ICLR 60. 433 (1909) 9 CLR 713. 434 (1864) 15 ICLR 60 at 83-84. 435 Cleland v The Queen (1982) 151 CLR 1 at 15. First, Attorney-General (NSW) v Martin was not a decision on the common law of voluntariness; it was a decision on s 410(1) of the Crimes Act 1900 (NSW) which provided: "No confession, admission, or statement shall be received in evidence against an accused person if it has been induced – by any untrue representation made to him; or by any threat or promise, held out to him by the prosecutor, or some person in authority." Further, far from supporting Murphy J's contention, Attorney-General (NSW) v Martin contains the following dictum by Griffith CJ436: "I doubt whether this enactment as to admissions or statements made any difference in the law so far as regards admissions or statements induced by threats or promises, but it did alter the law so far as regards statements induced by untrue representations." And in Basto v The Queen437, Dixon CJ, Webb, Fullagar, Kitto and Taylor JJ said that s 410(1)(a) made a "statutory extension of the common law doctrine ... to untrue representations". If the recognition by s 410(1)(a) of an untrue representation as an inducement leading to involuntariness could be said to "alter" the common law or effect a "statutory extension" of it, that points against the common law treating untrue representations by persons other than those in authority as inadmissible on grounds of basal involuntariness. Secondly, there never was any s 144 of the Evidence Act 1928 (Vic). The section in that Act which corresponded to s 410 of the Crimes Act 1900 (NSW) was s 141, but, like its original ancestor438 and its current successor439, it did not render confessions inadmissible on the ground of having been induced by a false representation. 436 Attorney-General (NSW) v Martin (1909) 9 CLR 713 at 721. The same view was put more tentatively by Dixon J in McDermott v The King (1948) 76 CLR 501 at 437 (1954) 91 CLR 628 at 640. 438 Law of Evidence Consolidation Act 1857 (21 Vict No 8), s 19. 439 Section 149 of the Evidence Act, set out above at note [236]. Thirdly, R v Johnston was a decision of the Irish Court of Criminal Appeal, comprising 11 judges. The passage quoted by Murphy J from the judgment of Hayes J attracted the support of none of the other 10 judges. The passage collects together doctrines which under modern Australian law are divided up under the heads of involuntariness by reason of an inducement held out by a person in authority; basal involuntariness; and potential exclusion on various discretionary grounds440. Hayes J did say that the word "voluntary"441: "is to be understood in a wide sense, as requiring not only that the prisoner should have free will and power to speak, or refrain from speaking, as he may think right, but also that his will should not be warped by any unfair, dishonest, or fraudulent practices, to induce a confession." It may be accepted that if the accused's will has been overborne in the sense in which that word is used in the Australian authorities, any resulting confession is involuntary. It does not follow that an accused's will is overborne merely by reason of misrepresentations. Hayes J's statement was an obiter dictum so far as he held the confession admissible because it was not "obtained by any threat, promise, or other undue or unfair means"442: that is, his conclusion did not turn on a finding of misrepresentation. That Hayes J's dictum needs to be handled with care is also suggested by his conclusion that, had the accused been in custody, the confession would have been inadmissible as not voluntary unless preceded by a caution. This view does not correspond with the modern law: a want of caution would only be a possible reason for exclusion on discretionary grounds. Fourthly, Murphy J spoke tentatively ("It may be a question of classification"; "The voluntariness of a confession is suspect"). He did not link his remarks to the question of whether the person dealing with the accused was a person in authority. The case in which he spoke was dealing with an issue quite separate from basal involuntariness, namely whether there was a discretion to exclude illegally or improperly obtained confessional evidence. What Murphy J said on issues other than that issue was general and cautious. The circumstances he described were seen by him as flagging a dangerous area; but he was not purporting to delineate with precision the boundaries of that area. In particular, Murphy J did not specifically state any rule that at common law a confession is 440 See above at [350]. 441 R v Johnston (1864) 15 ICLR 60 at 83. 442 R v Johnston (1864) 15 ICLR 60 at 86. involuntary on the sole ground that it has been induced by a misrepresentation made by a person other than a person in authority. Canadian authority on deceit. There is Canadian authority that deceit in the form of "a police officer pretending to be a chaplain or a legal aid lawyer, or injecting truth serum into a diabetic under the pretense that it was insulin" would render a confession inadmissible. This was so on the ground that the conduct "is so appalling as to shock the community" – but not because it undermined "voluntariness per se"443. In Australian law, of course, the abuse of what were assumed to be confidential relationships which a suspect might well expect would give the conversation immunity from use in litigation, even if no civil wrong were committed, would be an impropriety likely to attract exclusion on discretionary grounds, subject to other relevant factors; the same is true of the battery involved in the injection, which is not merely an impropriety but an actual illegality. Among the deceptions employed by the undercover officers against Clarke was a suggestion that the police had stronger evidence against him than they actually had. In R v Oickle the Court treated this as an example of potential "oppression" – that is, the creation of "oppressive conditions" which are "A final possible source of oppressive conditions is the police use of non-existent evidence ... The use of false evidence is often crucial in convincing the suspect that protestations of innocence, even if true, are futile. I do not mean to suggest in any way that, standing alone, confronting the suspect with inadmissible or even fabricated evidence is necessarily grounds for excluding a statement. However, when combined with other factors, it is certainly a relevant consideration in determining on a voir dire whether a confession was voluntary." These aspects of R v Oickle appear to reveal that the detail of Canadian law on this aspect of confessions is somewhat different from Australian law. However, Canadian authority, as far as it goes, does not support any submission 443 R v Oickle [2000] 2 SCR 3 at 42 [66]-[67] per Iacobucci J (speaking for himself, L'Heureux-Dubé, McLachlin, Major, Bastarache and Binnie JJ). Cf at 41 [65]: "the police use of trickery to obtain a confession ... is a distinct inquiry. While it is still related to voluntariness, its more specific objective is maintaining the integrity of the criminal justice system." 444 [2000] 2 SCR 3 at 39 [61]. that police trickery by itself renders a confession inadmissible on grounds of "basal involuntariness". Deception and involuntariness: conclusion. Counsel for Tofilau and Hill submitted that deception could lead to a conclusion of basal involuntariness "whenever the justifications for the voluntariness rule are engaged". He submitted that the undercover officers had engaged in "the functional equivalent of an interrogation of a suspect". He submitted that by "improper means", namely "trickery or deceit", they had induced a state of mind in the appellants which was "completely, wholly, fundamentally mistaken as to the circumstances or context" in which they answered "questions and the consequences of answering questions". He submitted that at least two of the justifications for excluding confessions existed, namely the importance of protecting the right to silence and the need to prevent "improper practices of interrogation" by This submission conformed with another disciplining police officers. submission, namely that the Court "should confirm that the voluntariness requirement cannot be satisfied in circumstances where a person is unaware of their right to silence". Counsel cited R v Li445, where Coldrey J said: "[T]he concept of voluntariness ... extends to and encompasses the situation where answers are given by an accused person who lacks understanding that such questions need not be answered, and, as a result, feels compelled to participate in the interview process." These submissions should be rejected. The police officers committed no crimes or civil wrongs or other illegalities. They had the benefit of statutory exemption from various aspects of the regime protecting suspects under interrogation446. They were investigating four murders in relation to which more conventional methods had not yielded useful results. One of those murders had taken place 20 years earlier. In the circumstances, the means employed, while deceitful, cannot be described as "improper". Nor, unless police officers are to be forbidden from addressing questions to anyone whom they later charge, or at least from relying on the answers, can what happened be described as an impermissible interference with the right to silence. As for Coldrey J's statement, he was speaking in a case concerning a 17 year old male of East Timorese background who had not had previous contact with the police; who did not speak good English and lacked the capacity to understand or articulate abstract concepts; whom the police warned of his right to remain silent, his right to seek 445 [1993] 2 VR 80 at 87. 446 See above at [342]. legal advice and his right to speak to a friend or relation; but who did not understand what was said. Coldrey J's remarks must be understood in that context, and not as applying generally. As Gleeson CJ said in R v Azar447: than police officers, and sometimes "There is no justification for the proposition that a statement is voluntary ... only if the maker of the statement was aware, at the time it was made, that the law offered a choice between speaking or remaining silent. Admissions are frequently made by accused persons, often to persons other circumstances where the maker of the statement is uninterested in, and unaware of, the legalities of the situation. Indeed if ... a statement may be voluntary even though made pursuant to a legal obligation, a fortiori a statement may be voluntary even though the maker is unaware of what the law requires. to police officers, ... There are numerous statements in the law reports to the effect that a confessional statement to a police officer is not inadmissible merely because no caution has been administered. It is hardly likely that those statements were intended to apply only in the case of an accused person who knows of his right to silence even without a caution." While it is possible to conclude that there has been basal involuntariness in circumstances which include the fact that the accused has been deceived, the mere fact of deception is insufficient in itself to justify a conclusion of basal involuntariness. Similarly, deception may be a ground on which a confession may be excluded in the court's discretion; but when that inquiry is undertaken, other factors must be weighed with the deception. It is necessary to reject two further submissions advanced in relation to the law on voluntariness by counsel for Marks. The first of these rested on a reference to Deane J's observation in Cleland v The Queen448: "If the making of [a confessional] statement has been procured or influenced by unlawful or improper conduct on the part of law enforcement officers, that circumstance will be of relevance on the question whether the confession was voluntary." 447 (1991) 56 A Crim R 414 at 419-420 (Finlay and Smart JJ concurring). 448 (1982) 151 CLR 1 at 18. Counsel submitted that the conduct of the police officers was "improper or undesirable". The impropriety of police conduct may be a ground for the exclusion of any resulting confession as a matter of discretion. But in principle that factor – while, with other factors, it may, as Deane J says, be "of relevance" – will not cause the confession to be subject to the "basal involuntariness" doctrine unless the accused's will has been overborne. The second of these submissions rested on a reference to the following statement of Iacobucci J (speaking for himself, L'Heureux-Dubé, McLachlin, Major, Bastarache and Binnie JJ) in R v Oickle449: "There may be situations in which police trickery, though neither violating the right to silence nor undermining voluntariness per se, is so appalling as to shock the community." The Supreme Court of Canada saw that consideration as a matter going to voluntariness. On Australian authority, there is no distinct ground for treating confessions as automatically inadmissible on the basis of appalling police trickery unless the inducement rule is attracted or the conduct is such as to overbear the will of the accused: neither ground applies here. "Appalling police trickery" could trigger a discretion to exclude the evidence, but Marks did not rely on that discretion. Duress analogy For present purposes it may be accepted that the causes of basal involuntariness are not limited to the factors listed by Dixon J – "duress, intimidation, persistent importunity, or sustained or undue insistence or pressure"450. But the appellants pointed to only one factor legitimately going to basal involuntariness beyond those factors. They submitted that "basal involuntariness" could be found not only in the overbearing – or destruction – of the will, but also in its "deflection". They accepted that no authority gave direct support to this approach. However, they relied on Director of Public Prosecutions v Lynch451. There the House of Lords held by a bare majority that the defence of duress (in the form of threats to kill or cause serious personal injury to the defendant) was available to a 449 [2000] 2 SCR 3 at 42 [67]. 450 McDermott v The King (1948) 76 CLR 501 at 511. person charged as an accessory to murder. All members of the House examined the question whether duress negated criminal intent, and said that it did not452. Rather they saw the question as being whether the presence of duress was sufficient to excuse the intentionally committed act which constituted the crime. A majority (Lords Morris of Borth-y-Gest, Wilberforce and Edmund-Davies) thought it was; Lords Simon of Glaisdale and Kilbrandon disagreed. Reference was also made in argument to the dissenting judgment of Lords Wilberforce and Simon of Glaisdale in Barton v Armstrong453. In that case the Privy Council held that a deed was void because it was executed under duress in the form of threats to kill. The point on which the majority differed from the minority was that the majority thought it sufficient that the duress was a reason for executing the deed, even if it might have been executed although no threat had been made. That point of difference did not affect the following statement of Lords Wilberforce and Simon of Glaisdale454: "The action is one to set aside an apparently complete and valid agreement on the ground of duress. The basis of the plaintiff's claim is, thus, that though there was apparent consent there was no true consent to the agreement: that the agreement was not voluntary. This involves consideration of what the law regards as voluntary, or its opposite; for in life, including the life of commerce and finance, many acts are done under pressure, sometimes overwhelming pressure, so that one can say that the actor had no choice but to act. Absence of choice in this sense does not negate consent in law: for this the pressure must be one of a kind which the law does not regard as legitimate. Thus, out of the various means by which consent may be obtained – advice, persuasion, influence, inducement, representation, commercial pressure – the law has come to select some which it will not accept as a reason for voluntary action: fraud, abuse of relation of confidence, undue influence, duress or coercion. In this the law, under the influence of equity, has developed from the old common law conception of duress – threat to life and limb – 452 [1975] AC 653 at 670 per Lord Morris of Borth-y-Gest, 680 per Lord Wilberforce, 690-695 per Lord Simon of Glaisdale, 703 per Lord Kilbrandon, 709-710 per Lord Edmund-Davies. 454 [1976] AC 104 at 121. and it has arrived at the modern generalisation expressed by Holmes J – 'subjected to an improper motive for action'."455 Reference was further made in argument to the fact that Professor Atiyah used what was said in Director of Public Prosecutions v Lynch as a reason for urging a reformulation of the emerging doctrine of economic duress. He said456: "Once it is appreciated that the victim of duress has chosen between evils, it becomes necessary to examine the nature and acceptability of the choice he was presented with. That clearly involves important questions of law, and cannot be treated as a pure question of fact. To treat the issue as one of fact diverts inquiry from the really vital issues in a case of economic duress, namely what sort of threats is it permissible to make, and when is it permissible for a victim of duress to reopen a question which has apparently been closed by his submission to the coercion." He also said457: "Once it is understood that the law is not searching for overborne wills, but for improper and unacceptable threats, the very difficult question as to the permissible limits of coercion in our society has to be faced. Similarly, the extent to which society can legitimately require people to stand up to threats when they are made, rather than to submit and litigate afterwards, raises very difficult questions of policy. In my view the overborne will theory was unsatisfactory not because it was more difficult to apply but because it simply evaded the really difficult questions." The passages just referred to deal with "voluntariness" in the contexts of duress as a defence to murder, duress to the person in relation to contracts, and economic duress. The present context is different again: the admissibility of confessions. The appellants submitted that the primary judges had concentrated too much on whether the will of the appellants had been "overborne" and too little on whether, to use an expression of Lord Simon of Glaisdale, it had been "deflected not destroyed; so that the intention conflicts with the wish"458. 455 Fairbanks v Snow 13 NE 596 at 598 (Mass, 1887). 456 "Economic Duress and the 'Overborne Will'", (1982) 98 Law Quarterly Review 197 457 "Duress and the Overborne Will Again", (1983) 99 Law Quarterly Review 353 at 458 Director of Public Prosecutions v Lynch [1975] AC 653 at 695. Even if this line of thinking were relevant to the admissibility of confessions, and even if it suggested some flaw in Dixon J's account of basal involuntariness, it would not assist the present appellants. There is no analogy between the present appellants and persons who commit crimes under duress. To use Lord Simon of Glaisdale's language, their intention to confess did not conflict with their wish not to do so. They intended to confess because they wished to. To use Professor Atiyah's language, the undercover police officers made no threats: they only offered the advantages of immunity from prosecution and a livelihood from the gang. The line of thinking advocated would have to suffer a transformation so as to accommodate the appellants' complaints about how they were deceived; but no attempt so to transform it was made. In view of the inapplicability of the submission even if it were soundly based in law, it is not necessary to consider whether it is soundly based in law. That conclusion is reinforced by the following considerations. The "deflection of the will" submission rests on ideas which did not originate with the appellants. The submission was never put to any of the trial judges. That by itself is not necessarily a fatal objection to the submission. But what may be a fatal objection, depending on how the doctrine of will deflection were to be expressed, is that factual examinations might have been carried out on the voir dire which could possibly have defeated the appellants' argument. The submission was not put to the Court of Appeal. In the course of argument on the first day of these appeals, members of the Court referred the parties to Professor Atiyah and Barton v Armstrong459. By the second day of the hearing, two and a half months later, some of the appellants took up the suggestions. But there was no examination, in any detailed or organised or confident way, of the merits of the suggestion in law, the consequences of its acceptance for other parts of the law of confessions, or even of its application to the facts. These are circumstances which do not make the present occasion one on which it would be satisfactory to consider whether this important part of the law of evidence should undergo the radical reconstruction suggested. It may be desirable, however, to note the following matters. First, Director of Public Prosecutions v Lynch was overruled by a unanimous House of Lords 12 years later in R v Howe460: duress, based on a desire to protect one's own life or the lives of one's family, was held not to be a defence to a charge of murder, whether the accused was the actual killer or a principal in the second degree. This is not an event to which the appellants referred. The House of Lords in R v Howe did not criticise Director of Public Prosecutions v Lynch in relation to the "overbearing of the will" issue: rather it adopted the view of the minority in Director of Public Prosecutions v Lynch. But the changed result reveals how criticism of the "overbearing of the will" approach as a matter of principle does not lead inexorably to any precise conclusion as to what the rules of substantive law are in any particular field. Secondly, there are general differences between the issues raised in the cases relied on and the present circumstances. Where duress as a defence to murder is in question, the law is seeking to balance an accused person's understandable instinct for self-preservation against the importance of showing fortitude against pressure to commit the wrongful act of killing another. Where duress to the person as a vitiating factor in contractual validity is in question, the law is seeking to balance the plaintiff's instinct for preservation of bodily health against the undesirability of reopening concluded transactions. But where confessions are in question, the form taken by the rules relating to voluntariness rests, among other things, on the need to balance the desirability or undesirability of the conduct which led to the confession, the risk of an unjust conviction, and the public interest in investigating and prosecuting crime by obtaining evidence of it from persons who can give the best evidence about it. It is far from clear that light is cast on the underlying considerations applicable to the present category by examining those applicable to other categories. "Basal involuntariness": general factual aspects It is now necessary to apply Dixon J's test to the facts in order to assess the submissions that each appellant had no choice but to confess. First some general aspects of the facts will be noted. Then the circumstances peculiar to each appellant will be considered. Here the undercover police officers did not use violence on any appellant, and they did not threaten it. They did not threaten any illegal act directed against any appellant and they did not threaten any illegal act against any third party whose position might cause an appellant to speak who otherwise might have remained silent. They did promise to procure a corrupt police officer to terminate the police investigations, but they never in fact intended to do any such thing. They did tell Clarke that the police had DNA evidence linking him with the crime: that was untrue, but it was not intrinsically unlawful. They thus did nothing unlawful. There was no duress or intimidation. To ask whether they did anything "illegitimate" begs the question: if what they did fell outside Dixon J's test, it was not; if it fell within it, it was. The police officers were at times importunate. They were insistent that each appellant confess his guilt. By their questioning they applied pressure. The question whether each appellant confessed involuntarily thus turns on whether the importunacy was so persistent, and whether the insistence and the pressure were so sustained or undue, as to overbear his will. That depends on the particular circumstances applying to each appellant. "Basal involuntariness": the circumstances of Tofilau Osborn J's conclusions were as follows461: "In the present case the accused was given a clear choice whether to speak or not as to his past. He was encouraged to speak the truth but the ultimate choice was his as to whether he spoke at all concerning the killing. It can of course be said that the accused was misled as to the circumstances in which he spoke. He was misled as to the true identity of those with whom he was speaking and he was misled as to a number of related collateral circumstances. In my view, however, this did not render his statements involuntary in the necessary sense. Moreover, I do not accept that he was intimidated, importuned or overborne into speaking as he did. He was offered an increasingly attractive choice and he made it." The Court of Appeal, while accepting that "the careful targeting of ... [the] psychological and situational vulnerabilities" of suspects could cause those suspects to regard themselves "as having no realistic choice not to speak"462, did not find that that possibility existed in the present case, and declined to interfere with Osborn J's findings. Counsel for the appellant submitted that the conduct of the undercover officers involved "trickery, deception, sustained pressure and interrogation". It was "sophisticated, elaborate, extreme, protracted, extensive and persistent". Even if these descriptions are apt, their aptness, whether taken separately or in combination, does not of itself necessarily give rise to basal involuntariness, and does not contradict Osborn J's findings. In this Court no error was demonstrated in Osborn J's reasoning so far as it was factual. It was submitted, however, that 461 R v Tofilau (2003) 13 VR 1 at 15 [46]-[47]. 462 R v Tofilau (No 2) (2006) 13 VR 28 at 62-63 [155] per Vincent JA (Callaway and Osborn J erred in making463, and the Court of Appeal erred in accepting464, the following statement: "There is no sense in which the confessional statements can be regarded as 'manufactured'. The substance of them was clearly the result of the accused's volition." Counsel submitted that that was not the correct test. That submission is erroneous: the test stated in the second sentence in substance corresponds with that of Dixon J. This aspect of Tofilau's appeal thus fails. "Basal involuntariness": the circumstances of Marks Counsel for Marks complained that his client was the victim of pressure built up by a pincer movement between persons known to his client as police officers, who appeared hostile, and the "gangsters", who appeared to offer a way out. Coldrey J found that before Marks confessed he "fervently desired to be a member of the crew", he wished to obtain large sums of money as a result, he wanted to retain his friendship with one member of the gang, he was anxious for police investigation of him to cease, he believed the gang boss could arrange this, and he believed that if he lied to the gang boss he would forfeit any right to gang membership465. Coldrey J found that the gang boss told him three times that he did not have to speak about the homicide, that he could walk away, and that he had to be truthful and honest466. Coldrey J also found467: "The videotaped interview reveals a person who, if initially nervous, settled down quickly and, thereafter, confidently and relatively fluently, gave a detailed account of the events of 7 April 2002, and their aftermath. At no time was the accused harangued ... Nor was he interrogated ... in the accepted sense of that term, or subjected to duress, sustained pressure, intimidation, or persistent importunity. True it is that the 463 R v Tofilau (2003) 13 VR 1 at 16 [52]. 464 R v Tofilau (No 2) (2006) 13 VR 28 at 63 [155]-[156]. 465 R v Marks (2004) 150 A Crim R 212 at 220 [55], 223 [65]. 466 R v Marks (2004) 150 A Crim R 212 at 223 [63]. 467 R v Marks (2004) 150 A Crim R 212 at 223 [64]-[66] (footnotes omitted). accused was told he was the prime suspect for murder ... and, unless something was done about it, he would 'go down for it'. But the accused's own belief expressed later in the conversation ... was that he knew that the police knew they had the right man. Indeed as early as the 6 May interview investigating police had not only put the allegation to him that he was the killer but had made it clear that they would be conducting further inquiries. At all times during the videotaped episode the accused appears in control of himself even to the extent of querying the crime boss ... as to whether their conversation was being tape recorded." Counsel for Marks submitted that the conduct of the people known to Marks to be police officers simply reinforced the likelihood of him responding to the inducement. Counsel did not explain how that militated against a finding of voluntariness. For the sake of argument, Coldrey J was prepared to assume the correctness of expert evidence that Marks suffered from a borderline personality disorder, a dependent personality disorder and an adjustment disorder. But he decided, after hearing the various recorded conversations between the appellant and the police officers, that Marks "had considerable self-possession and was well able to cope with situations of stress"468. Counsel submitted that his client was known to the police as "a person of weak character who was dependent on attention and affection". But counsel did not explain how these findings of Coldrey J could be overturned. Coldrey J concluded469: "In short there is no evidence that the will of the accused was overborne and I am satisfied, on the totality of the evidence, that the Crown have discharged the onus of demonstrating this basal aspect of voluntariness. As the accused subsequently remarked to [a covert operative], when essentially repeating his description of the killing, he felt better for having got it off his chest." On the first day of the appeal, counsel for Marks said he did not intend to attack the conclusion just stated. He was then asked: "If you do not do that, how can you possibly have this Court hold that the confession was not voluntary?" He answered: "Through the first aspect, your Honour. Through inducements made to a person in authority." After an adjournment for two and a half months occasioned by Clarke's application to amend his notice of appeal, counsel for Marks said: "Now, just to ensure that there is no misunderstanding about the 468 R v Marks (2004) 150 A Crim R 212 at 224 [69]. 469 R v Marks (2004) 150 A Crim R 212 at 224 [70]. position on behalf of those representing Marks, it should not be thought that I was in fact giving away our submissions as to basal voluntariness." He then referred to parts of his written submissions which were rejected above470. Since no other basis was advanced on which to criticise Coldrey J's reasoning or the Court of Appeal's acceptance of it471, this aspect of the Marks appeal fails. "Basal involuntariness": the circumstances of Hill Although counsel for Hill at the trial did not contend that Hill's confession should be excluded on the ground of basal involuntariness472, Bongiorno J dealt with that issue. He held that the accused was not overborne, and his will was not affected by what the gang members said. He said that Hill's admissions were made "in a free exercise of his will to speak or not to speak. He could at any stage have left. The only 'inducement' for him to remain and to continue talking to the police was a hope of gain or reward which they offered out to him." The trial judge thus did not consider that Hill was influenced by any assistance which the gangsters might be able to give in terminating the investigation of his stepbrother's murder. The Court of Appeal held that that conclusion was open: Hill had expressed confidence to one "gangster" that the police had no evidence linking him with the stepbrother's murder473. Apart from relying on some factual submissions advanced by each of the other appellants which are irrelevant to Hill's circumstances, counsel's principal point was that the questioning by the gangsters was so persistent as to cause the confession to be "dragged out of him", and to be made, as Hill later claimed in his record of interview with non-undercover police officers, "under compulsion". It is true that Callaway JA described the questioning as "persistent"474, but counsel referred to no evidence which supported the broader submission, and the questioning could not be described as "duress, intimidation, persistent importunity, or sustained or undue insistence or pressure". This aspect of Hill's appeal fails. 470 Above at [379]-[380]. 471 R v Marks [2006] VSCA 42 at [186]. 472 R v Hill [2006] VSCA 41 at [106]-[107]. 473 R v Hill [2006] VSCA 41 at [102]. 474 R v Hill [2006] VSCA 41 at [3]. "Basal involuntariness": the circumstances of Clarke Kellam J had the benefit of observing "the demeanour and the manner in which the [appellant Clarke] commenced to make the admissions"475 which had been recorded. He also observed Clarke being cross-examined on the voir dire. The trial judge found that, while the undercover officers misled him about their identity, and while they overstated the progress of the police investigation, Clarke had a free choice whether to speak or not476. He was told to tell the truth; he was offered a choice whether or not to speak about the death of Bonnie Clarke; he was given the opportunity to leave without saying anything; and the trial judge specifically rejected Clarke's evidence that if he had left he would have received a beating. The trial judge concluded477: "But in the end result, and in all the circumstances, the accused had a choice as to whether he spoke up or did not. He was offered the choice of not proceeding with his endeavours to join the criminal organisation or of doing so and telling ... the truth. He chose the latter course." And the trial judge pointed to many admissions by Clarke during the voir dire that he was weighing up his options478. He also pointed to a statement by Clarke that it was his choice to stay because of "the pure fact of greed for money"479. The factual finding, accepted by the Court of Appeal480, that Clarke had a free choice whether to speak or not was challenged in this Court. It was submitted that: "The trial judge concentrated on the objective circumstance of [the gangsters] saying that he could leave at any time without bringing into the mix the reality that if he did leave it was inevitable that he would be 475 R v Clarke [2004] VSC 11 at [49]. 476 R v Clarke [2004] VSC 11 at [46]-[49]. 477 R v Clarke [2004] VSC 11 at [49]. 478 R v Clarke [2004] VSC 11 at [50]-[52]. 479 R v Clarke [2004] VSC 11 at [51]. 480 R v Clarke [2006] VSCA 43 at [125] per Vincent JA (Callaway and Buchanan JJA concurring). charged with murder. It is unrealistic to find that the Appellant exercised an effective choice to speak or remain silent." It was conceded that nothing said by the undercover police officers to the appellant "expressly forced" him to speak. Nevertheless, the supposed gang leader's "statements to the Appellant that he could leave at any time were, in reality, quite hollow. The same was true if he continued in his denials of murder". Why the statements were hollow was not explained. It was also submitted: "The situation was tantamount to the Appellant having a loaded gun held at his head and [the 'gang leader'] saying to him 'if you deny it the trigger will be pulled, but you are free to deny it.' This is not freedom to speak or remain silent." (emphasis in original) The example would fit Dixon J's test, but the facts are far removed from the example. Counsel for Clarke read out numerous selected passages from the conversations with the "gangsters" which led to the confession. While some of those passages revealed the appellant to be under increasing stress, the primary purpose of counsel's selections was to establish that Clarke believed that unless he confessed it was inevitable that he would be charged with murder and convicted; and hence that he believed he had no choice but to confess. Indeed counsel went so far as to submit that "it was not open to the judge to find other than that the appellant was in fear of the murder charge and confessed as a result of this fear". Counsel submitted that this negated any suggestion that the appellant was free to leave at any time. The primary flaw in these arguments is that, while the appellant was told that the police would not give up their investigation and was also told that they had some information adverse to him, the evidence did not establish that the appellant believed that unless he confessed he would be charged with murder and convicted, or that any such belief caused him to confess. Contrary to the appellant's submissions, the trial judge was entitled to rely on the appellant's admissions on the voir dire that he saw himself as having a choice, and that he chose to stay because of greed, and to prefer those admissions over the rather more speculative inferences about the appellant's beliefs which counsel sought to draw from the tape recorded interviews with the undercover officers. Even if Clarke were deceived into speaking by the false representations of the police officers as to who they were and as to the extent of the police investigation, which they "overstated"481, it does not follow that he did not exercise a free choice to speak. Counsel for Clarke submitted: "These inducements followed upon months of calculated manipulations of his personal situation and condition. They included the actual commission of crime." It was submitted that the purpose "of the process was corruption of the legal system". That criticism is false. No crimes were committed. No corruption of the legal system took place. Counsel for Clarke also submitted that the function of the basal involuntariness rule was to operate as a disincentive against undesirable practices of the kind which the police officers had engaged in. The proposition that the police practices were undesirable is questionable. They were in no way unlawful. Whether they were improper in such a manner as to justify discretionary exclusion is a matter for consideration below482. Section 149 of the Evidence Act It may be controversial whether s 149 is capable of applying to evidence which does not offend is affected by basal inducement rule but involuntariness. Even if s 149 is capable of applying, since it has been contended that basal involuntariness does not arise here, no occasion arises to consider whether in fact s 149 would assist the appellants. the Discretionary exclusion Clarke applied towards the end of the first day of hearing to amend his notice of appeal. The new ground contended that the Court of Appeal had "erred in failing to determine that the trial judge had erred in not excluding, in the exercise of his discretion", the admissions made by Clarke to the gang leader. Events at trial. At trial counsel for Clarke (who was not the counsel appearing in the Court of Appeal or this Court) put three arguments to Kellam J: that Clarke was denied the opportunity to exercise his rights; that the manner in which the admissions were obtained placed Clarke at "a massive forensic disadvantage"; and that the nature of the covert operation was such as to require exclusion of the admissions on public policy grounds. 481 R v Clarke [2004] VSC 11 at [79] per Kellam J. 482 Below at [391]-[414]. Clarke's first argument at trial. The first argument was that the covert operatives denied Clarke any of his rights under the provisions of Pt III Div 1 Subdiv 30A of the Crimes Act. Counsel submitted that the gang boss was dominant in his relationship with Clarke; that in consequence he discouraged Clarke from responding to a police request for a DNA sample; that the "prop" – a supposed progress report into the state of the police investigation – which he supplied Clarke with contained material falsehoods; that he indulged in hectoring, bullying and overbearing behaviour in circumstances where Clarke had not been given the opportunity to be questioned by non-undercover officers; and that he had thus not been able to exercise any of the rights given by those provisions of the Crimes Act. Kellam J accepted that, although in the videotape of his discussions with the boss Clarke revealed no distress and gave no sign of being under threat or coercion, he was hectored and harangued to a significant degree, in a manner which would be unacceptable in a formal police interview. He also accepted that the prop was fabricated and that while no piece of information in it was untrue, it contained several exaggerations. Indeed the available admissible circumstantial evidence fell a long way short of being sufficient to charge Clarke. Thus he was not in custody or something akin to custody and was not subject to the compulsion of the state. He was not under any compulsion by threat of violence. He thus had no vulnerability flowing from custody or compulsion of that kind. He had no rights under the relevant provisions of the Crimes Act because he was neither in custody nor a suspect, and because the police officers were engaged in covert investigations483. The means employed against Clarke were deceptive, but they did not circumvent any express exercise by Clarke of his right not to talk to police officers. Kellam J found that although the relationship between Clarke and the boss was unequal, it did not compare with the inequality between a person in custody and police officers. Nor did the boss unfairly exploit the inequality. Clarke wanted to impress the boss in order to join the gang and avoid the consequences of the police investigation. Kellam J concluded that the means employed by the covert operatives were not disproportionate to their purpose of investigating the serious crime of murdering a six year old girl. Clarke's second argument at trial. The second argument advanced by counsel for Clarke at the trial was that reception of the admissions would create the forensic disadvantage of revealing Clarke to be a person with a criminal past who was prepared to engage in criminal acts in the future and to encourage the criminal acts involved in interfering with the police investigation. 483 See Crimes Act, s 464(2) (definition of "investigating official"), ss 464A and 464C, discussed above at [342]. Kellam J accepted that while this difficulty could be lessened by editing parts of the confessional statements, it could not be wholly cured, for some prejudicial material would remain. However, he thought that the forensic disadvantage could be overcome by careful jury directions, and he indicated that the issue might have to be reconsidered as the trial proceeded. Clarke's third argument at trial. The third argument advanced at trial by counsel for Clarke was that employment of the particular covert operation was too high a price to pay: it involved the deliberate depraving of an apparently reformed offender, and it was a technique with obvious dangers if used by corrupt police officers. Although Kellam J found force in the submission, he said484: "[T]he fact is that the accused exercised his own free will in this regard. Indeed, he joined in the exercise with some enthusiasm. Significantly, and contrary to the then belief of the accused, no actual criminal act occurred. The police conduct, although dramatic, was not unlawful. Police officers acting as covert operatives did not commit any crimes. In particular the purported criminal activity was not designed to introduce the accused man into such activity in order to arrest and charge him for it but, rather, used as an investigative tool to solve an extremely serious crime." Kellam J concluded that the task was to balance the individual and public interest in protecting the rights of the accused against the public interest in the effective investigation and prosecution of serious crime, and that the conduct of the undercover operatives was not sufficiently unacceptable to cause the evidence to be excluded485. The Court of Appeal. The Court of Appeal found no appellable error in Kellam J's approach486. Counsel's submissions in this Court. Counsel for Clarke in this Court submitted that while it was conventional to analyse discretionary exclusion of confessions as involving two "discretions" – to reject a confession the reception of which would be unfair487, and to reject a confession that was illegally or 484 R v Clarke [2004] VSC 11 at [98]. 485 R v Clarke [2004] VSC 11 at [66]-[102]. 486 R v Clarke [2006] VSCA 43 at [129]-[134]. 487 R v Lee (1950) 82 CLR 133. improperly obtained on public policy grounds488 – in truth there was but a single "discretion"489. It is not necessary to resolve this question, since the outcome of the appeal will be the same whatever the answer. He also submitted that in any event what was involved was not a "discretion" but a rule of law, and relied on an analogy with the rule excluding evidence the prejudicial effect of which exceeded its probative value. It is not necessary to resolve that question either, for the same reason, although the appellant's submission is open to question, and quite out of line with past linguistic usage in this field. Counsel for Clarke submitted that Kellam J's reasoning contained four errors. The first alleged error was his conclusion that Clarke was not in a vulnerable position. The error lay in a failure to appreciate that Clarke believed that if he left the operatives he would inevitably be charged with murder. It also lay in a failure to appreciate fully, or weigh, the fact that the boss held himself out as a person with significant power over the progress of the police investigation. The second alleged error related to the forensic disadvantage which reception of the admissions created for Clarke in revealing a criminal propensity. Counsel submitted that Kellam J was wrong to conclude that the forensic disadvantage of having this evidence of bad disposition admitted could be overcome by judicial warnings. Thirdly, it was alleged that there was another forensic disadvantage. This argument, which is not recorded by Kellam J as having been put to him, related to the nature of the questioning engaged in by the boss. Counsel submitted: "[T]he judge erred by placing no weight upon the impact of the nature of the questioning ... and the effect that such questioning would have upon the [appellant's] decision whether or not to give evidence at his trial. Here the questioning was protracted. It included continual statements of disbelief with regard to the [appellant's] denials. It was in the nature of oppressive haranguing and exhortation." 488 Cleland v The Queen (1982) 151 CLR 1. 489 He cited R v Swaffield (1998) 192 CLR 159 at 202 [91] per Toohey, Gaudron and Counsel relied on R v Amad490 and R v Pritchard491. The fourth error alleged by counsel for Clarke was that the boss, and other covert officers, exploited the vulnerability of Clarke by a process of psychological duress. "Minimum standards of the conduct of law enforcement officers whether covert or otherwise would never permit subjecting a suspect to this form of duress in an attempt to obtain confessional evidence." It was said that Kellam J erred in placing too much weight on the enthusiasm with which Clarke joined in the scenarios and on the fact that the police officers did not commit any crimes. Consideration of the appellant's arguments. The first submission and, in part, the fourth, rest on the proposition that Clarke was in a vulnerable position. That proposition, and the contentions underlying it, were rejected above for reasons which need not be repeated492. As to the forensic disadvantages of the scenario evidence in revealing Clarke's criminal propensity, it misrepresents Kellam J's reasoning to suggest that he relied only on the effect of jury directions to cure the problem. He relied also on the effect of editing, and left open the possibility of the problem being revisited later if necessary. The Court was taken to no passage indicating that counsel for Clarke at the trial took up this invitation. In any event the prejudicial effect of the criminal propensity revealed was insignificant compared to the prejudicial effect of what he admitted about the murder of Bonnie Clarke. So far as the forensic disadvantages of hectoring questioning are concerned, there is no close analogy between the authorities on which Clarke relied and the present case. R v Amad493 concerned questioning by non-covert police officers of an accused person held in custody who had not been cautioned. The questioning was in breach of the Police Commissioner's Standing Orders, and there were other improprieties. Here Clarke was not in custody, the police officers lacked the material to place him in custody, there was no breach of either the Crimes Act or the modern equivalent of the Police Commissioner's Standing Orders, and there were no improprieties. In addition, the reasoning of Smith J towards his conclusion that the discretion should be exercised against reception 492 See above at [384]-[389]. reflects a distaste for the employment at trials of lies by persons being interrogated. Whether evidence should be excluded on the grounds under consideration is a question depending very much on the specific facts of the particular case, and Smith J's approach to the employment of lies is not necessarily determinative in other cases. In R v Pritchard, which was again, unlike the present case, a case involving interrogation in custody in breach of the Chief Commissioner's Standing Orders494, the outcome turned on the unfairness of depriving the accused of his right to make an unsworn statement by reason of receiving evidence of police interrogation in which the interrogator repeatedly and derisively revealed disbelief in the accused's denials. The particular aspect of the right to make an unsworn statement which was stressed was the right to give a version of events without being subjected to cross-examination. That kind of thinking has no application in Victoria now in view of the fact that the right to make an unsworn statement has been abolished. But again, since the decision to exclude the evidence depends closely on the facts of each case, the reasoning in R v Pritchard is not determinative in the circumstances of this case, which will now be considered below495. The submission that Kellam J erred in failing to conclude that the way Clarke was treated fell below acceptable standards of police conduct must be rejected for the following reasons. Counsel for Clarke correctly accepted that so far as his arguments turned on exclusion because of illegal or improper means, the factors listed by Stephen and Aickin JJ in Bunning v Cross496 were relevant. Two of these in particular are adverse to Clarke's submissions. One is the nature of the offence charged – here not only a murder, but a particularly vicious and horrifying murder. This was a factor which on occasion counsel, in his emphasis of the need for compliance with particular standards, submitted was irrelevant: but to accept that submission would be radically to change the law, as counsel admitted, and for the worse. The other is whether the police conduct affected the cogency of the evidence497. 494 [1991] 1 VR 84 at 91. 495 Below at [413]. 496 (1978) 141 CLR 54 at 78-80. See also R v Swaffield (1998) 192 CLR 159 at 212- 213 [135] per Kirby J. 497 If the matter is viewed as resting on unfairness rather than public policy, the likelihood or unlikelihood of the interrogation producing an untrue admission is (Footnote continues on next page) That Clarke said what the prosecution alleged he said is clear beyond doubt, for what he said was recorded, and he did not deny saying it. There is no reason to disagree with Kellam J's conclusion, after he had closely compared what Clarke said with the objective evidence, that the admissions were "not inherently unreliable" and that "it would be open in all the circumstances for a jury to consider that the manner in which the admissions are shown to have been made on the video-tapes is such that they are reliable"498. The Court of Appeal agreed with that conclusion499, and no attack was made on it in this Court, beyond a throwaway assertion that the conduct "may well have" affected the cogency of the evidence. That assertion must be rejected. Three other relevant Bunning v Cross factors are whether any illegality was the result of an innocent mistake or a deliberate disregard of the law, whether it was easy to comply with the law, and what the specific intention of the legislation infringed was. These do not arise in terms because there was no illegality, as counsel for Clarke twice conceded, then denied, but then, correctly, twice conceded again. Counsel for Clarke however submitted that the conduct was improper. He submitted – correctly – that it was plainly deliberate. He also submitted that it would have been easy for the police to have behaved properly, by questioning Clarke in a conventional fashion. It is true that that would have been easy, but it is also true that conventional questioning had failed in the past. Counsel for Clarke said that three further factors were relevant500. One was that the conduct was encouraged or tolerated by those in higher authority: plainly it was. Another was that the conduct was inconsistent with a right of Clarke's which was fundamental, namely the "right to silence". That submission must be rejected in view of the conclusions reached above that the admissions were voluntary and that Clarke saw himself as having a choice which he exercised for his own purposes501. That is, he had a right to silence but he chose not to exercise it. The final factor was whether the conduct would involve the court itself in giving, or appearing to give, effect to impropriety in a way that equally relevant: R v Lee (1950) 82 CLR 133 at 153 per Latham CJ, McTiernan, Webb, Fullagar and Kitto JJ. 498 R v Clarke [2004] VSC 11 at [64]. 499 R v Clarke [2006] VSCA 43 at [128]. 500 Relying on factors (v) to (vii) as stated by Kirby J in R v Swaffield (1998) 192 CLR 501 Above at [384]-[389]. would be incompatible with the functions of a court, or which might damage the repute and integrity of the judicial process. Counsel for Clarke submitted that for police officers to promise to secure immunity from prosecution when in fact they intended to prosecute was an act of bad faith and corruption, which if permitted by this Court, would cause "the very authority of the State ... itself [to] be placed in jeopardy". It was improper for the state to put moral or psychological pressure on individuals in a process of actively eliciting confessions – as improper as it is for the state to put physical pressure on them for that purpose. The correctness of that submission must be evaluated against the following circumstances. The police had failed – and their failure was not said to be culpable – to collect sufficient evidence against Clarke to charge him. The crime being investigated was very serious502. It had remained unsolved for 20 years. The scenario technique was one which had been in use for a long time in Canada, and had been approved by the Canadian courts. It was not embarked on as an unthinking frolic by junior officers. It had been deliberately selected by the superiors of those involved in the light of Canadian experience. No alternative was available if the investigation was to continue. It was reasonable for the police to seek to employ this technique, new in Australia, in carrying out their important duty to investigate an old crime. The technique was employed in a discriminating way, with considerable care being taken to avoid illegality. No doubt psychological pressure was built up, but conventional police interrogation of the most proper kind naturally involves pressure. Counsel submitted that the process was "designed to circumvent the [appellant's] right to silence". Clarke was in fact an experienced criminal who understood that he did not have to answer anyone's questions. He had not claimed any right to silence when interviewed by non-undercover officers soon after the murder. He actively cooperated in the questioning by the undercover officers. The questioning took place in the course of a relationship which he entered freely, and did not exploit some pre-existing or collateral relationship. The interrogation elements in the conversations were patent, and consistent with the roles which he believed the undercover officers were occupying. He had not been charged, and there was no proper basis to charge him. There was no illegality and no breach of Police Standing Orders. Part III Div 1 Subdiv 30A of the Crimes Act did not apply. The failure of other investigative methods which made it necessary to conduct the undercover operation also made it necessary for a process of active "elicitation" to take place. The admissions eventually obtained formed a significant part of the prosecution case. The operatives stressed the need to tell the truth. The undercover officers did not prey upon any special characteristics 502 See, in relation to the seriousness of the crime, Cleland v The Queen (1982) 151 CLR 1 at 17 per Murphy J. of Clarke related to his gender, race, age, education or health. The means of elicitation were not so disproportionate to the problem confronting the police as to be inherently unfair or contrary to public policy. If Kellam J's decision is to be viewed as discretionary, it cannot be said that he made any error of fact or law, took anything irrelevant into account or failed to take anything relevant into account; nor that the result was so unjust as to suggest some error not apparent on the face of his reasoning. If his discretion is not to be viewed as discretionary, it was correct for the reasons set out above. In either event the Court of Appeal was right not to interfere with it. In view of the importance of the issue raised by the application for leave to amend, it is appropriate to grant that leave, but to reject the new ground of appeal. A cautionary note Nothing said above should be taken as a warrant for any undiscriminating reception of evidence gathered by police officers operating covertly. Plainly, as these appeals show, it is desirable that covert operations be undertaken from time to time, and they can be undertaken without damaging the integrity of the police force, or indeed of the system of criminal justice itself. Covert operations can however be risky. Sometimes the covert officers will, as a matter of necessity, be remote from close supervision and the discipline that it entails. Seduction of officers by criminals is not unknown. Covert officers can be placed in danger. Their response to that danger may cause them, however understandably, to act in a way that might otherwise be thought irregular. But none of those factors were present in the circumstances out of which these appeals arose. The trial judges in these cases were in all respects careful and discriminating in considering and admitting the relevant evidence. Orders Each appeal is dismissed.

HIGH COURT OF AUSTRALIA RADIO 2UE SYDNEY PTY LTD APPELLANT AND RAY CHESTERTON RESPONDENT Radio 2UE Sydney Pty Ltd v Chesterton [2009] HCA 16 22 April 2009 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of New South Wales Representation R G McHugh SC with J Chambers for the appellant (instructed by Banki C A Evatt with R K M Rasmussen for the respondent (instructed by Beazley Singleton Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Radio 2UE Sydney Pty Ltd v Chesterton Defamation – Statements amounting to defamation – Test to be applied in determining what is defamatory – Whether general test has application to imputations concerning business or professional reputation – Whether general test limited to imputations concerning character or conduct – Distinction between defamation and injurious falsehood – Gacic v John Fairfax Publications Pty Ltd (2006) 66 NSWLR 675 considered. Defamation – Statements amounting to defamation – Standards by which allegedly defamatory imputations to be judged – Distinction between general test for defamation and standards to be applied – Standards imported by describing hypothetical referees of whether person defamed as "right-thinking" – Relevance and applicability of general community standards. Defamation – Statements amounting to defamation – Standards by which allegedly defamatory imputations to be judged – Whether in cases concerning business or professional reputation hypothetical referees assumed to have special knowledge of business or profession – When plea of true innuendo appropriate. Defamation – Statements amounting to defamation – Test to be applied in determining what is defamatory – Whether jury misdirected – Whether substantial wrong or miscarriage occurred. Words and phrases – "business defamation", "general community standards", "hypothetical referee", "ordinary decent person", "ordinary reasonable person", "reputation", "right-thinking", "true innuendo". Defamation Act 1974 (NSW), s 4(2). Defamation Act 2005 (NSW), s 6(2). Uniform Civil Procedure Rules 2005 (NSW), r 51.53(1). FRENCH CJ, GUMMOW, KIEFEL AND BELL JJ. The common law recognises that people have an interest in their reputation and that their reputation may be damaged by the publication of defamatory matter about them to others1. In Uren v John Fairfax & Sons Pty Ltd2 Windeyer J explained that compensation for an injury to reputation operates as a vindication of the plaintiff to the public, as well as a consolation3. Spencer Bower4 recognised the breadth of the term "reputation" as it applies to natural persons and gave as its meaning: "[T]he esteem in which he is held, or the goodwill entertained towards him, or the confidence reposed in him by other persons, whether in respect of his personal character, his private or domestic life, his public, social, professional, or business qualifications, qualities, competence, dealings, conduct, or status, or his financial credit …". A person's reputation may therefore be said to be injured when the esteem in which that person is held by the community is diminished in some respect. Lord Atkin proposed such a general test in Sim v Stretch5, namely that statements might be defamatory if "the words tend to lower the plaintiff in the estimation of right-thinking members of society generally"6. An earlier test asked whether the words were likely to injure the reputation of a plaintiff by 1 Slatyer v The Daily Telegraph Newspaper Co Ltd (1908) 6 CLR 1 at 7 per Griffith CJ, 8 per Isaacs J; [1908] HCA 22; Lee v Wilson & Mackinnon (1934) 51 CLR 276 at 290 per Dixon J; [1934] HCA 60; Mirror Newspapers Ltd v World Hosts Pty Ltd (1979) 141 CLR 632 at 638-639 per Mason and Jacobs JJ; [1979] HCA 3; Reader's Digest Services Pty Ltd v Lamb (1982) 150 CLR 500 at 507; [1982] HCA 4. (1966) 117 CLR 118; [1966] HCA 40. 3 Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR 118 at 150. 4 A Code of the Law of Actionable Defamation, 2nd ed (1923) at 3. [1936] 2 All ER 1237. 6 Sim v Stretch [1936] 2 All ER 1237 at 1240; and see Tolley v J S Fry & Sons Ltd [1930] 1 KB 467 at 479 per Greer LJ. Bell exposing him (or her) to hatred, contempt or ridicule7 but it had come to be considered as too narrow8. It was also accepted, as something of an exception to the requirement that there be damage to a plaintiff's reputation, that matter might be defamatory if it caused a plaintiff to be shunned or avoided, which is to say The common law test of defamatory matter propounded by Lord Atkin was applied in Slatyer v The Daily Telegraph Newspaper Co Ltd10, although Griffith CJ expressed some concern about the ambiguity of the expression "right thinking members of the community"11. The general test, stated as whether the published matter is likely to lead an ordinary reasonable person to think the less of a plaintiff, was confirmed by this Court in Mirror Newspapers Ltd v World Hosts Pty Ltd12, Chakravarti v Advertiser Newspapers Ltd13 and by Callinan and Heydon JJ in John Fairfax Publications Pty Ltd v Gacic14. Gummow and Hayne JJ in Gacic referred to the likelihood that the imputations might cause "ordinary decent folk" in the community to think the less of the plaintiff15. Putting requirement of being "right-thinking", the hypothetical audience, that is to say the referees of the issue of whether a person has been defamed, has been regarded as composed of aside Lord Atkin's additional 7 Parmiter v Coupland (1840) 6 M & W 105 at 108 per Parke B; [151 ER 340 at 8 Tournier v National Provincial and Union Bank of England [1924] 1 KB 461 at 477 per Scrutton LJ; Sim v Stretch [1936] 2 All ER 1237 at 1240 per Lord Atkin. 9 Youssoupoff v Metro-Goldwyn-Mayer Pictures Ltd (1934) 50 TLR 581 at 587. 10 (1908) 6 CLR 1. 11 Slatyer v The Daily Telegraph Newspaper Co Ltd (1908) 6 CLR 1 at 7. 12 (1979) 141 CLR 632 at 638-639 per Mason and Jacobs JJ, Gibbs J and Stephen J agreeing. 13 (1998) 193 CLR 519 at 545 [57] per Gaudron and Gummow JJ; [1998] HCA 37. 14 (2007) 230 CLR 291 at 351 [190]; [2007] HCA 28. 15 John Fairfax Publications Pty Ltd v Gacic (2007) 230 CLR 291 at 309 [53] referring to Boyd v Mirror Newspapers Ltd [1980] 2 NSWLR 449 at 452. Bell ordinary reasonable people16, whom Spencer Bower described as "of ordinary intelligence, experience, and education"17. Such persons have also been described as "not avid for scandal"18 and "fair-minded"19. They are expected to bring to the matter in question their general knowledge and experience of worldly affairs20. In Reader's Digest Services Pty Ltd v Lamb21 Brennan J explained that any standards to be applied by the hypothetical referees, to an assessment of the effect of imputations, are those of the general community22: "Whether the alleged libel is established depends upon the understanding of the hypothetical referees who are taken to have a uniform view of the meaning of the language used, and upon the standards, moral or social, by which they evaluate the imputation they understand to have been made. They are taken to share a moral or social standard by which to judge the defamatory character of that imputation … being a standard common to society generally …". 16 Mirror Newspapers Ltd v World Hosts Pty Ltd (1979) 141 CLR 632 at 638; Favell v Queensland Newspapers Pty Ltd (2005) 79 ALJR 1716 at 1719-1720 [10] per Gleeson CJ, McHugh, Gummow and Heydon JJ; 221 ALR 186 at 190; [2005] HCA 52; Nevill v Fine Art and General Insurance Company [1897] AC 68 at 72 per Lord Halsbury LC; Capital and Counties Bank v Henty (1882) LR 7 App Cas 17 Spencer Bower, A Code of the Law of Actionable Defamation, 2nd ed (1923) at 37; and see Slatyer v The Daily Telegraph Newspaper Co Ltd (1908) 6 CLR 1 at 7 ("of fair average intelligence") and Lewis v Daily Telegraph Ltd [1964] AC 234 at 286 per Lord Devlin ("sensible"). 18 Lewis v Daily Telegraph Ltd [1964] AC 234 at 260 per Lord Reid. 19 Lewis v Daily Telegraph Ltd [1964] AC 234 at 268 per Lord Morris of Borth-y-Gest. 20 Favell v Queensland Newspapers Pty Ltd (2005) 79 ALJR 1716 at 1719-1720 [10] per Gleeson CJ, McHugh, Gummow and Heydon JJ; 221 ALR 186 at 190 referring to Lewis v Daily Telegraph Ltd [1964] AC 234 at 258. 21 (1982) 150 CLR 500. 22 Reader's Digest Services Pty Ltd v Lamb (1982) 150 CLR 500 at 506. Bell This appeal raises questions as to whether the general test for defamation has application to imputations concerning a person's business or professional reputation, or whether it is limited to those concerning the character or conduct of that person. If injury to a person's business or professional reputation is to be adjudged having regard to different considerations, referable to the business or profession of that person, a further question arises as to whether the hypothetical referees are to be drawn from a class of persons who have particular knowledge associated with the business or profession. Before turning to these questions, and the decisions which give rise to them, it is necessary to isolate the action for defamation from other actions which concern injury to a plaintiff's business. Defamation and injurious falsehood It is not in dispute that persons may be defamed in their business reputation. The common law has for some time recognised that words may not only reflect adversely upon a person's private character, but may injure a person in his or her office, profession, business or trade23. This may be so where the words reflect upon the person's fitness or ability to undertake what is necessary to that business, profession or trade. But in each case the injury spoken of is that to the person's reputation. The remedy which the law provides for injury to a person's business or professional reputation must be distinguished from that for malicious statements which result in damage not to the reputation but to the business or goods of a person. The former is provided by an action for defamation, the latter by that for injurious falsehood24. Lord Esher MR explained the distinction in South Hetton 23 Odgers, A Digest of the Law of Libel and Slander, 6th ed (1929) at 23; Gatley on Libel and Slander, 11th ed (2008) at 71 [2.26]; Sungravure Pty Ltd v Middle East Airlines Airliban SAL (1975) 134 CLR 1 at 13 per Stephen J; [1975] HCA 6; John Fairfax Publications Pty Ltd v Gacic (2007) 230 CLR 291 at 294 [2] per Gleeson CJ and Crennan J, 315-316 [74] per Kirby J, 351 [190] per Callinan and 24 Ratcliffe v Evans [1892] 2 QB 524 at 527-528 per Bowen LJ; Joyce v Sengupta [1993] 1 WLR 337 at 341 per Sir Donald Nicholls V-C; [1993] 1 All ER 897 at 901; South Hetton Coal Co Ltd v North-Eastern News Association Ltd [1894] 1 QB 133 at 139; Drummond-Jackson v British Medical Association [1970] 1 WLR 688 at 698; [1970] 1 All ER 1094 at 1103; Mirror Newspapers Ltd v World Hosts Pty Ltd (1979) 141 CLR 632 at 639 per Mason and Jacobs JJ. Bell Coal Co Ltd v North-Eastern News Association Ltd25. A false statement that a wine merchant's wine is not good, which is intended to and does cause loss to the wine merchant's business, is an injurious (or "malicious") falsehood. A statement reflecting upon that person's judgment about the selection of wine, and therefore upon the conduct of his business, may be defamatory of him26. Gummow J observed in Palmer Bruyn & Parker Pty Ltd v Parsons27 that the action for injurious falsehood is more closely allied to an action for deceit. The distinction between defamation and injurious falsehood has some relevance to these proceedings, which are brought under the Defamation Act 1974 (NSW). That Act repealed the Defamation Act 1958 (NSW). The 1958 Act imported a meaning of defamation from the Criminal Code (Q)28, which was extended beyond that of the common law and included injurious falsehood. The common law requirement that the plaintiff's reputation be disparaged, for matter to be found defamatory, was thereby removed. It was sufficient, relevantly, that an imputation concerned the plaintiff and was likely to injure the plaintiff in his or her profession or trade29. The 1974 Act reverted to the common law requirements of what is defamatory30. Accordingly for present purposes, a publication must have an effect upon the reputation of the plaintiff rather than upon the business, trade or profession of the plaintiff as such. The imputations alleged The plaintiff, Mr Chesterton, the respondent to this appeal, was a journalist at the time of the broadcast in question, by Radio Station 2UE on 26 South Hetton Coal Co Ltd v North-Eastern News Association Ltd [1894] 1 QB 133 27 (2001) 208 CLR 388 at 406 [59]; [2001] HCA 69. 28 Criminal Code (Q), s 366 (relocated by Act 37 of 1995 to become s 4 of the Defamation Act 1889 (Q) (since repealed)). 29 Sungravure Pty Ltd v Middle East Airlines Airliban SAL (1975) 134 CLR 1; Mirror Newspapers Ltd v World Hosts Pty Ltd (1979) 141 CLR 632. 30 Defamation Act 1974 (NSW), s 4(2). The 1974 Act has been superseded by the Defamation Act 2005 (NSW) (see s 6(3)) but the meaning which the common law gives to defamation would not appear to be affected (see s 6(2)). Bell 8 August 2005. The defendant appellant is the licensee of that station. The following words were said of the plaintiff by the presenter of the John Laws Morning Show: "Well that bombastic, beer-bellied buffoon Ray Chesterton, writes a column in the Telegraph called 'The Final Word'. Well it's not the final word today. What's the matter with you Ray? I mean, you know, I always knew you were a bit of a creep, but can't you get over it? He was fired by 2UE and blames me for it. He's never got over it and he talks about the Joey Johns saga and say (sic) Meanwhile the Johns saga is starting to run out of motivation. You know that when 70-year-old disc jockeys are drawn into the fray to support the argument. I talked to Joey Johns because I wanted to, because he is a friend of mine, a word you probably wouldn't understand because I doubt you'd have any, and those that you do have call you 'Ankles' and for a very good reason. I don't know. Why can't you get over it, Ray? I mean, you used to enjoy going to my farm and I used to give you the house and you used to take your family and your children up there. I was very happy that all that took place. But why can't you get over it? Well, I suppose you have some kind of inferiority complex. Well, I have to tell you, I have never met a man who deserved one more." The imputations said to have been conveyed by those words were: the plaintiff is a creep in that he is an unpleasant and repellent person; the plaintiff is a bombastic, beer-bellied buffoon; that as a journalist the plaintiff is not to be taken seriously; the plaintiff was fired from Radio 2UE; the plaintiff falsely accuses John Laws of being responsible for his dismissal from Radio 2UE; Bell the plaintiff is an ungrateful person in that he accepted the hospitality of John Laws and then attacked him. Two further imputations, (g) and (h), were alleged but they are not relevant to the issues on this appeal. At the trial, which took place before Simpson J and a jury, the jury were required to determine whether the words complained of carried those imputations and, if so, whether they were defamatory31. The jury found in the plaintiff's favour on both issues and with respect to all imputations. The imputations with which this appeal is concerned are those in (b), (c) and (d), which the plaintiff alleged injured him in his profession as a journalist. On the appeal to the Court of Appeal, and again on the appeal to this Court, the appellant contended that the trial judge misdirected the jury as to how they were to assess whether the imputations were defamatory. It is said that resulted from her Honour's application of the requirements of the New South Wales Court of Appeal in Gacic v John Fairfax Publications Pty Ltd32 with respect to such a direction. Gacic – the Court of Appeal Gacic concerned the publication of a review of the plaintiff appellants' restaurant in the first respondent's newspaper. A jury found that the two imputations in the review, that the appellants sold unpalatable food and provided bad service at the restaurant, were not defamatory. In the New South Wales Court of Appeal Beazley JA (with whom Handley and Ipp JJA agreed) held that a reasonable jury, properly directed, could reach no verdict other than that the imputations were defamatory. The Court set aside the verdicts of the jury and entered verdicts for the appellants. Beazley JA stated the appellants' case to be that the imputations in the article "injured their business, trade or profession as owners of the restaurant and were thus defamatory"33. Her Honour said that "[a] person may be defamed in their business trade or profession regardless of whether the defamation lowers the 31 Defamation Act 1974 (NSW), s 7A(3). 32 (2006) 66 NSWLR 675. 33 Gacic v John Fairfax Publications Pty Ltd (2006) 66 NSWLR 675 at 678 [32]. Bell person in the estimation of others"34 and cited the following passage from the 10th edition of Gatley on Libel and Slander35: "Any imputation is defamatory if it would tend to lower the claimant in the estimation of right-thinking members of society generally or would be likely to affect a person adversely in the estimation of reasonable people generally. For instance, to say of someone that he is ungrateful would scarcely expose him to hatred, ridicule or contempt, or cause him to be avoided, yet it has been held defamatory. To say of a person carrying on any trade or profession, or holding any office, that he is incompetent at it, may not even lower him in the estimation of others, but the words will be defamatory because of the injury to his reputation in his trade, profession or office …". (footnotes omitted) (emphasis as added by Beazley JA) Beazley JA concluded that the trial judge (Bell J) had not been right to direct the jury in such a way as to suggest that "business defamation"36 was to be regarded as the same as words "having the tendency to lower a person in the estimate of ordinary, right-thinking members of the community."37 Her Honour considered "business defamation" to be distinct from defamation in its "generally understood meaning"38 and that it was incumbent upon the trial judge to direct "it did not matter whether the published material lowered the person in the eyes of right-thinking members of the community." In her Honour's view, to say that a restaurateur sells "unpalatable" food "injures that person in their business or calling and because of that, is 34 Gacic v John Fairfax Publications Pty Ltd (2006) 66 NSWLR 675 at 678 [32]. 35 (2004) at 36-37 [2.7], which may be contrasted with the 11th ed (2008) at 38 [2.1]. 36 Gacic v John Fairfax Publications Pty Ltd (2006) 66 NSWLR 675 at 682 [46] per 37 As Bell J described it, see Gacic v John Fairfax Publications Pty Ltd (2006) 66 NSWLR 675 at 681 [41]. 38 Gacic v John Fairfax Publications Pty Ltd (2006) 66 NSWLR 675 at 678 [32], 682 39 Gacic v John Fairfax Publications Pty Ltd (2006) 66 NSWLR 675 at 683 [50]. Bell defamatory."40 The imputation of "some bad service" "would injure a person in their business or calling as a restaurateur and was likewise defamatory."41 Beazley JA did not suggest what test was to be applied, as an alternative to whether people might think the less of the plaintiffs by reason of the imputations, and did not refer to any standard by which injury to the plaintiffs was to be assessed, other than by reference to their business. The appellant on this appeal submits that the approach taken by her Honour either creates a separate tort for "business defamation" or reintroduces the meaning of defamation in the 1958 Act, which encompassed an injurious falsehood with respect to a person's business. Gacic – this Court The principal issue on the appeal to this Court in Gacic was the power of the Court of Appeal, under s 108(3) of the Supreme Court Act 1970 (NSW), to enter verdicts for the plaintiffs after it had reached its conclusion that no reasonable jury, properly instructed, could find that the imputations in question were not defamatory of the plaintiffs42. A majority of this Court resolved that issue in the plaintiff respondents' favour. No issue was raised on the appeal concerning the application of the general test for defamation. A question as to the possible application of general community standards did arise, in connection with the appellants' argument that the Court of Appeal should not have entered a verdict itself. It was submitted that the attention of a jury was required for the application of community standards. The question therefore turned upon whether there were some such standards which were relevant to the imputations in question. Gleeson CJ and Crennan J43 and Callinan and Heydon JJ44 rejected the appellants' submissions that community standards bore upon imputations concerning the provision of unpalatable food and bad service in a restaurant. The 40 Gacic v John Fairfax Publications Pty Ltd (2006) 66 NSWLR 675 at 684 [56]. 41 Gacic v John Fairfax Publications Pty Ltd (2006) 66 NSWLR 675 at 684 [57]. 42 John Fairfax Publications Pty Ltd v Gacic (2007) 230 CLR 291 at 296 [10]. 43 John Fairfax Publications Pty Ltd v Gacic (2007) 230 CLR 291 at 298 [13]. 44 John Fairfax Publications Pty Ltd v Gacic (2007) 230 CLR 291 at 351 [189]-[190]. Bell standards to which their Honours' considerations were directed were standards referable to personal character. Their Honours pointed out that it was not necessary that imputations reflect badly upon the respondents' character to be defamatory; it was enough that they might damage their business reputation45. Callinan and Heydon JJ distinguished between the respondents' business reputation and their personal reputation. Their Honours referred to "restaurant standards" as those relevant to imputations about a "person as a restaurateur in relation to the conduct of the restaurant."46 However their Honours did not suggest that such considerations were to be applied by persons having particular knowledge of the business of restaurants. It may be doubted that the imputations in question required such knowledge. Their Honours said47: "It is unimaginable, in any event, that the estimation of the respondents in the mind of any adult person, let alone a reasonable reader, would not be lowered by a statement that they sold unpalatable food and provided bad service at their restaurant, and did so for considerable sums of money." Their Honours did not propose any alternative to the accepted test for defamatory matter. Gummow and Hayne JJ said that it was sufficient that the imputations be such as to be "likely to cause ordinary decent folk in the community, taken in general, to think less of [the plaintiff]"48. The directions in this case and Gacic At one point in the directions given by the trial judge in this case, no doubt with the decision of the Court of Appeal in Gacic in mind, her Honour divided the imputations into two classes. The jury were told by her Honour that the imputations here in question ((b), (c) and (d) above): "are imputations concerned with Mr Chesterton's reputation in his profession as a journalist and in that respect you ask yourselves whether 45 John Fairfax Publications Pty Ltd v Gacic (2007) 230 CLR 291 at 295 [6] per Gleeson CJ and Crennan J, 351 [190] per Callinan and Heydon JJ. 46 John Fairfax Publications Pty Ltd v Gacic (2007) 230 CLR 291 at 351 [190]. 47 John Fairfax Publications Pty Ltd v Gacic (2007) 230 CLR 291 at 351 [190]. 48 John Fairfax Publications Pty Ltd v Gacic (2007) 230 CLR 291 at 309 [53] referring to Boyd v Mirror Newspapers Ltd [1980] 2 NSWLR 449 at 452. Bell the imputations, if conveyed, damaged him in that respect, that is in the practice of his profession as a journalist." The other imputations were described as saying "something personal about Mr Chesterton's personal reputation". Her Honour said that if the jury decided that any of them were conveyed by what was said: "… then you ask whether that imputation would be regarded by ordinary right-thinking members of the community as defamatory, as damaging to his reputation." These aspects of the directions, in particular, are the focus of the appellant's submissions, although it was acknowledged that it is necessary to consider what the jury would have understood from the directions as a whole. That question will be considered later in these reasons. The Court of Appeal The appeal to the Court of Appeal in this matter, concerning the trial judge's directions, turned upon the correctness of the decision of the Court of Appeal in Gacic. The appellant in this case submitted that the Court of Appeal ought not to follow that decision. A majority of the Court declined to accept that submission (Spigelman CJ and Hodgson JA, McColl JA dissenting)49. In her dissenting judgment, McColl JA held that whether matter is defamatory "turns on whether the hypothetical referee, whose standards are taken to reflect those of ordinary right-thinking people, would conclude that they tended to injure the plaintiff in his or her trade, business or professional reputation."50 Her Honour considered that the Court of Appeal's direction in Gacic had overlooked the requirement that an imputation reflect upon the plaintiff's reputation51. 49 Radio 2UE Sydney Pty Ltd v Chesterton (2008) Aust Torts Reports ¶81-946 at 61,541 [3] per Spigelman CJ, 61,542 [18] per Hodgson JA. 50 Radio 2UE Sydney Pty Ltd v Chesterton (2008) Aust Torts Reports ¶81-946 at 51 Radio 2UE Sydney Pty Ltd v Chesterton (2008) Aust Torts Reports ¶81-946 at Bell Hodgson JA understood Gacic to turn upon a distinction between the ordinary reasonable reader, listener or viewer, and the community standards which might be applied by them52. His Honour said that in cases concerning injury in the area of general character or conduct, the ordinary reasonable reader must be considered as "accepting community standards" and viewing the matter accordingly; with respect to a plaintiff's business reputation, that reader would view the matter in light of their understanding as to "the requirements for fitness or competence for the plaintiff's business"53. The expression "right-thinking" could be misleading if it suggests community standards are to be applied to any imputation, his Honour said54. His Honour concluded that these propositions were consistent with Gacic and its statement that there "could be business defamation even though the defamatory statement did not lower the defamed person in the estimation of right thinking members of the community"55. His Honour took the Court of Appeal's decision in Gacic to involve a "de-emphasis of community standards in relation to business defamation and [an] insistence on reference to what is conveyed to the ordinary reader."56 Spigelman CJ considered that it was not always necessary to ensure that the jury are aware "that community standards is the relevant test."57 Such a test was appropriate to imputations directed to reputation generally. Injury to the reputation of a person in their trade, profession or business directs attention to a 52 Radio 2UE Sydney Pty Ltd v Chesterton (2008) Aust Torts Reports ¶81-946 at 53 Radio 2UE Sydney Pty Ltd v Chesterton (2008) Aust Torts Reports ¶81-946 at 54 Radio 2UE Sydney Pty Ltd v Chesterton (2008) Aust Torts Reports ¶81-946 at 55 Radio 2UE Sydney Pty Ltd v Chesterton (2008) Aust Torts Reports ¶81-946 at 61,543 [24] referring to Gacic v John Fairfax Publications Pty Ltd (2006) 66 NSWLR 675 at 682 [46] per Beazley JA. 56 Radio 2UE Sydney Pty Ltd v Chesterton (2008) Aust Torts Reports ¶81-946 at 57 Radio 2UE Sydney Pty Ltd v Chesterton (2008) Aust Torts Reports ¶81-946 at Bell narrower section of the community, in his Honour's view58. Tests of defamation such as that in Gardiner v John Fairfax & Sons Pty Ltd59, as to whether a publication "is likely to cause ordinary decent folk in the community, taken in general, to think the less of [the plaintiff]" and the broadly equivalent test in Sim v Stretch may be appropriate in most cases, his Honour said60. However his Honour noted that Lord Atkin in Sim v Stretch had not suggested that the test was appropriate in every case61. His Honour said that Lord Atkin's reference to the effect upon "right-thinking members of society generally" should be read in context. Lord Atkin had said that the question of what is defamatory is complicated by the need to consider the class of persons whose reaction to the publication is the test62. This sectional approach had been taken up by Willmer J in Drummond-Jackson v British Medical Association63, who had observed that the fact that the plaintiff was a dental surgeon and the article in question related to dentistry was "sufficient to indicate the class of persons whose reaction to the publication is to be considered."64 Spigelman CJ noted that such an approach had been followed in some Australian cases65. Resolution of this appeal At this point it is necessary to return to and consider the effect of the decision of the Court of Appeal in Gacic, so far as it concerns directions to a jury 58 Radio 2UE Sydney Pty Ltd v Chesterton (2008) Aust Torts Reports ¶81-946 at 59 (1942) 42 SR (NSW) 171 at 172 per Jordan CJ. 60 Radio 2UE Sydney Pty Ltd v Chesterton (2008) Aust Torts Reports ¶81-946 at 61 Radio 2UE Sydney Pty Ltd v Chesterton (2008) Aust Torts Reports ¶81-946 at 62 Sim v Stretch [1936] 2 All ER 1237 at 1240. 63 [1970] 1 WLR 688; [1970] 1 All ER 1094. 64 Drummond-Jackson v British Medical Association [1970] 1 WLR 688 at 700; [1970] 1 All ER 1094 at 1106. 65 Radio 2UE Sydney Pty Ltd v Chesterton (2008) Aust Torts Reports ¶81-946 at 61,542 [10] and see per McColl JA at 61,561-61,562 [125]-[127]. Bell as to whether matter is defamatory. The effect of the direction it required to be given to a jury is that the general test for defamation – stated as whether a person is lowered in the eyes of right-thinking persons – is not applied to cases of "business defamation". The reasoning of the Court did not involve an analysis of the general test or its application to different aspects of reputation. It assumed, incorrectly, that the relevant injury was that to the plaintiffs' business, not to their reputation. It is disparagement of reputation which is the essence of an action for defamation66. The reasons in Gacic contain no reference to the plaintiffs' reputation as affected by the imputations. To say that imputations may injure the plaintiff "in their business or calling" does not identify their reputation as relevant. The approach of the Court of Appeal in Gacic, which emphasised the possible damage to the plaintiffs' restaurant business, may be relevant to an action for injurious falsehood, but it is not to one for defamation. The Court of Appeal may have been influenced to its view that "business defamation" is to be treated otherwise than by applying the general test by the passage from the 10th edition of Gatley on Libel and Slander, to which it referred. That passage may have been intended to convey that it is not necessary that an imputation injure a person in their reputation as to character for it to be actionable; an action will also lie where an imputation injures them in their business or professional reputation. Such an opinion would be unexceptionable. The passage did not suggest that it was injury to a plaintiff's business which was relevant. It clearly identified the plaintiff's reputation as relevant in this respect. However in the way it is expressed, the sentence in the passage highlighted by Beazley JA has the potential to mislead. It could be taken to say that the general test, whether a person is lowered in the estimation of others, does not apply to cases involving damage to business, trade or professional reputation. In the 11th edition of Gatley on Libel and Slander67, published following the decisions in Gacic and of the Court of Appeal in this case, it is said that: "Without suggesting that there is a separate tort of 'business defamation', as a practical matter it has been thought necessary where the words denigrate the claimant's business or professional capacity to recognize that 66 Mirror Newspapers Ltd v World Hosts Pty Ltd (1979) 141 CLR 632 at 638-639 per Mason and Jacobs JJ; Lee v Wilson & Mackinnon (1934) 51 CLR 276 at 290 per Dixon J; and see John Fairfax Publications Pty Ltd v Gacic (2007) 230 CLR 291 at 295 [6] per Gleeson CJ and Crennan J, 351 [190] per Callinan and Heydon JJ. 67 11th ed (2008) at 38 [2.1]. Bell words may be defamatory even though they in no way reflect on the character of the claimant … " and that "community standards" of "right-thinking people" may have less of a role in such cases68. The majority of the Court of Appeal in this case did not deny that the focus of an action for defamation is upon the plaintiff's reputation. However their Honours viewed aspects of reputation as distinct and subject to differing standards or considerations and, in the case of Spigelman CJ, to be judged by a different class of referee69. It was by this process of reasoning that the general test for defamation was held by the majority not to apply in cases of imputations concerning a person's business or professional reputation. The concept of "reputation" in the law of defamation comprehends all aspects of a person's standing in the community70. It has been observed that phrases such as "business reputation" or "reputation for honesty" may sometimes obscure this fact71. In principle therefore the general test for defamation should apply to an imputation concerning any aspect of a person's reputation. A conclusion as to whether injury to reputation has occurred is the answer to the question posed by the general test, whether it be stated as whether a person's standing in the community, or the estimation in which people hold that person, has been lowered or simply whether the imputation is likely to cause people to think the less of a plaintiff. An imputation which defames a person in their professional or business reputation does not have a different effect. It will cause people to think the less of that person in that aspect of their reputation. For any imputation to be actionable, whether it reflects upon a person's character or their business or professional reputation, the test must be satisfied. The reference in the general test, as stated in Sim v Stretch, to a plaintiff being "lowered in the estimation" of the hypothetical referee does not imply the exercise of a moral judgment, on their part, about the plaintiff because of what is said about that person. It does not import particular standards, those of a moral 68 Gatley on Libel and Slander, 11th ed (2008) at 38 [2.1]. 69 Radio 2UE Sydney Pty Ltd v Chesterton (2008) Aust Torts Reports ¶81-946 at 61,542 [11] per Spigelman CJ. 70 Berkoff v Burchill [1996] 4 All ER 1008 at 1018 per Neill LJ. 71 Berkoff v Burchill [1996] 4 All ER 1008 at 1018 per Neill LJ. Bell or ethical nature, to the assessment of the imputations. It simply conveys a loss of standing in some respect. The expression "right-thinking" should not be taken to refer to the application by the hypothetical referee of moral or social standards, those referable to general character. Such an approach might also limit the application of the general test. It should be understood as a rejection of a wrong standard, one not held by the community. It should be taken to describe a person who shares the standards of the general community and will apply them. The expression has been criticised. Griffith CJ in Slatyer v The Daily Telegraph Newspaper Co Ltd72 considered it to be ambiguous, but thought that it was intended to refer to a person of "fair average intelligence" and otherwise accepted the test as stated in Sim v Stretch. Murphy J in Reader's Digest Services Pty Ltd v Lamb also thought its meaning was unclear73. Bray CJ in Potts v Moran74 considered that it involved "question-begging assumptions and circuity of reasoning."75 The term most clearly implies a standard of decency in a person. The references in Gardiner v John Fairfax & Sons Pty Ltd76 and in John Fairfax Publications Pty Ltd v Gacic77 to the hypothetical referees as being ordinary decent persons, or folk, appear to accept this to be the case. Such a description may serve to distinguish a person in society who abides by its standards, values and rules, from a person who does not. A difference of perspective about the position of an informer to police illustrates this point78. It was said of such a person that "[t]he very circumstances which will make a person be regarded with 72 (1908) 6 CLR 1 at 7. 73 Reader's Digest Services Pty Ltd v Lamb (1982) 150 CLR 500 at 502. 74 (1976) 16 SASR 284. 75 Potts v Moran (1976) 16 SASR 284 at 303. 76 (1942) 42 SR (NSW) 171. 77 (2007) 230 CLR 291 at 309 [53] per Gummow and Hayne JJ. 78 Accepting that there may be a difference of views about informers within society generally – see Fricke, "The Criterion of Defamation", (1958) 32 Australian Law Journal 7 at 10-11. Bell disfavour by the criminal classes will raise his character in the estimation of right-thinking men"79. The expression does not necessarily import a particular social standard. It may be seen as a benchmark by which some views would be excluded from consideration as unacceptable80. It confirms that the hypothetical referee is a person who will apply general community standards. It may be taken to refer to ordinary decent persons81. It is important to distinguish between the general test for defamation and any general community standards which may be relevant in a particular case. Some such standards may be necessary to the assessment of the effect of an imputation upon the reputation of the plaintiff, but they do not form part of the test. Hodgson JA said that it was necessary to separate the concepts of the ordinary reasonable reader and the standards which they might apply. This should be restated as a separation of the general test from the standards which the ordinary reasonable person might consider relevant and apply. There are a number of assumptions apparent, in the decisions of the Court of Appeal in Gacic and in this case, about general community standards which might be applied to defamatory imputations, which require correction. Any standards which might be applied by the ordinary reasonable reader will vary according to the nature of the imputation. It should not be assumed that such standards are limited to those of a moral or ethical kind, such as may reflect upon a person's character. It should not be assumed that moral standards have no relevance to imputations concerning a person's business or professional reputation. And it should not be assumed that it will be necessary in every case to apply a standard in order to conclude that a plaintiff's reputation has been injured. There are many standards held within the general community which are not of a moral or ethical kind but which may be relevant to an assessment of whether a person's standing in the community has been lowered. It may be inferred that Hodgson JA in the court below did not take the references of 79 Mawe v Piggott (1869) Ir R 4 C L 54 at 62 per Lawson J, referred to in Byrne v Deane [1937] 1 KB 818 at 833 per Slesser LJ. 80 Even if from the Court's perspective: see McNamara, Reputation and Defamation, 81 See John Fairfax Publications Pty Ltd v Gacic (2007) 230 CLR 291 at 309 [53] per Bell Brennan J in Reader's Digest Services Pty Ltd v Lamb to "social" standards to add to, or be descriptive of, standards different from those which are "moral". It is not apparent why those words should be taken to have the same meaning. In any event the point made by Brennan J is that any standards to be applied must be those of the general community. Reader's Digest Services Pty Ltd v Lamb concerned the admissibility of evidence that the conduct attributed to the plaintiff amounted to a breach of a code of ethics or a standard of behaviour which was required of him as a journalist. The question which arose was whether the standards contained in the code were to be applied in determining whether the publication was defamatory. It was held that they were not admissible for that purpose, as they did not reflect general community standards but rather the attitude of a particular group or class82. The general community standards of which his Honour spoke were not expressed to be moral standards but shared moral or social standards. The distinction sought to be drawn between the standards which might apply to imputations concerning a person's business or professional reputation and those as to their character may be more theoretical than real. Moral or ethical standards may be relevant to imputations about a person's business or professional reputation, for example those concerning a person's honesty or fidelity83 in the conduct of a business or profession, failure to conform to relevant ethical standards pertaining to that profession84 or which suggest misconduct in the discharge of professional duties85. Some statements may convey more than one meaning and bring into question moral or ethical standards as well as conveying a lack of ability to carry on a business or profession. A charge of unfitness for office furnishes an example. Closer to the present case, a statement that a person has been fired by their employer may provide another. That moral or ethical standards held by the general community may be relevant to imputations which reflect upon a person's business or professional reputation does not suggest a true dichotomy as between imputations of that kind and those as to character, with different standards applying to each. Rather it confirms as practicable the general test as applying in all cases involving all 82 Reader's Digest Services Pty Ltd v Lamb (1982) 150 CLR 500 at 507. 83 Jones v Jones [1916] 2 AC 481 at 491 per Viscount Haldane. 84 Angel v H H Bushell & Co Ltd [1968] 1 QB 813 at 825-826 per Milmo J. 85 Odgers, A Digest of the Law of Libel and Slander, 6th ed (1929) at 46. Bell aspects of reputation. In such cases the ordinary reasonable person may be expected to draw upon such community standards as may be relevant, in order to answer the question whether there has been injury to that reputation. In keeping with that test it may be said such standards are those by which a person's standing in the community, the esteem in which others hold them, is lowered. The focus upon moral or ethical standards, in discussions about standards of the community, no doubt reflects the fact that they are the standards most often identified as relevant in actions for defamation. There are obviously other standards, for example as to the behaviour expected of persons within the community, which may not involve a sense of wrongdoing. In some cases injury to reputation may appear so obvious that a standard, which may unconsciously be applied, is not identified. And in some cases such a conclusion may be possible without the need to identify a standard. It may be obvious that people will be thought the less of simply because of what is said about them. The imputations in Gacic were considered to fall within this latter category. Another example may be the attribution of authorship of a work of very inferior quality, which may be taken to affect an established author's high reputation, without more86. Whether a social standard applies to an imputation of a person's lack of competence to carry out a profession or business may not be so clear, particularly where it is also conveyed that the person held themselves out as competent and for reward. It is not necessary to determine such questions; in each case the plaintiff will have been defamed because he or she has suffered a loss of reputation. The applicability of the general test towards that conclusion cannot be denied because a general community standard does not apply in a particular case. The test does not depend for its exercise upon the existence of standards. In Reader's Digest Services Pty Ltd v Lamb Brennan J emphasised that any standard to be applied must be one common to society, rather than one which reflects an attitude of a section of it87. Questions have been raised concerning the notion of there being one general community standard with respect to all topics88; 86 See Ridge v The English Illustrated Magazine (Limited) (1913) 29 TLR 592. 87 Reader's Digest Services Pty Ltd v Lamb (1982) 150 CLR 500 at 507; and see Tolley v J S Fry & Sons Ltd [1930] 1 KB 467 at 479 per Greer LJ. 88 McNamara, Reputation and Defamation, (2007) at 120 ff and Fleming, The Law of Torts, 9th ed (1998) at 583. Bell and as to whether standards applied by the courts in some cases are in reality those of the general community. Cases involving what are said to be community-held attitudes to police informers are sometimes referred to in the latter regard89. And it has been suggested that sectional attitudes may be valid, when regard is had to the cultural diversity of countries such as Australia90. Such an approach would require further consideration of the meaning of "community". This case does not involve these fields of discourse. The only distinctive character of the class of persons suggested as necessary to assess imputations of the kind here in question, it may be inferred, is special knowledge of the business or profession in question. The issue is not whether general community standards apply. It is whether the ordinary reasonable person has knowledge of the facts necessary to determine the meaning of an imputation in a business or professional context. It may be taken that this was the concern shared by Spigelman CJ in the court below and by Willmer J in Drummond-Jackson v British Medical Association91. The technique used by the plaintiff in Drummond-Jackson v British Medical Association, which was the subject of the article in question, furnishes an example. Willmer J considered the article, which discussed the technique and its risks, to be of a highly technical nature, "barely intelligible to the ordinary layman". It was for that reason that he considered that it would be necessary to gauge the reaction of dentists to it92. True innuendo Reference was not made, in the cases to which Spigelman CJ referred, to evidence which may be admitted where it is contended that the words bear a meaning different from that which might be conveyed to the ordinary reasonable reader, as when a true or legal innuendo is pleaded93. This does not involve 89 Fricke, "The Criterion of Defamation", (1958) 32 Australian Law Journal 7 at 90 McNamara, Reputation and Defamation, (2007) at 122-123 but see Arab News Network v Al Khazen [2001] EWCA Civ 118 at [30]. 91 [1970] 1 WLR 688; [1970] 1 All ER 1094. 92 Drummond-Jackson v British Medical Association [1970] 1 WLR 688 at 700-701; [1970] 1 All ER 1094 at 1106. 93 As McColl JA observed: Radio 2UE Sydney Pty Ltd v Chesterton (2008) Aust Torts Reports ¶81-946 at 61,562 [128]. Bell calling people to say that they understood the words in a defamatory sense, as Greer LJ observed in Tolley v J S Fry & Sons Ltd94. When a true innuendo is pleaded evidence may be given of special facts, known to those to whom the matter was published, such as would lead a reasonable person knowing those facts to conclude that the words have another, defamatory, meaning95. The essential requirement of the plea is that the matter is not one within the general knowledge of the hypothetical referees96. A plea of true innuendo might have been, but was not, made in Reader's Digest Services Pty Ltd v Lamb. It may have permitted proof of the existence of the code of ethics, in support of the meaning sought to be attributed to the words. No true innuendo was pleaded in this case, at least with respect to the imputations in question. It is difficult to see what special facts might be necessary to be applied to the particular imputations – that the plaintiff is not to be taken seriously as a journalist and that he had been fired by the radio station – in order to determine whether they are defamatory. They do not suggest as necessary knowledge limited to journalists, although their impact within that profession might sound in damages. The ordinary reasonable reader could apply their general knowledge to the imputations in order to determine their defamatory meaning. The directions as a whole It was necessary that the jury in this case be told that the imputations as to the plaintiff's professional reputation were to be adjudged by reference to whether they would be likely to make an ordinary reasonable person think less of the plaintiff. In doing so they were to assume that that hypothetical person applied whatever community standards as were appropriate and relevant to the imputations. The outstanding features of the trial judge's directions were their emphasis upon injury to the plaintiff's reputation, as the subject of the jury's assessment, and the requirements of the general test of defamation. 94 [1930] 1 KB 467 at 480. 95 See Tolley v J S Fry & Sons Ltd [1930] 1 KB 467 at 480 per Greer LJ; Lewis v Daily Telegraph Ltd [1964] AC 234 at 264 per Lord Morris of Borth-y-Gest. 96 Gatley on Libel and Slander, 11th ed (2008) at 121-122 [3.26]. Bell At the outset her Honour described defamation as being "about reputation … something that injures a reputation". She went on to explain the concept of the ordinary reasonable listener and said that something is defamatory if it is disparaging or derogatory, "something that is damaging to reputation and this is important, something that would make ordinary, decent members of the community think less of the plaintiff". When her Honour later returned to the meaning of defamatory matter, she reiterated what she had earlier said and advised the jury that: "… you measure that against community standards. That is, what would ordinary decent people in the community think? That is the test that you apply in relation to the six imputations[97] contained in question A. You listen to the broadcast. You ask yourselves what that would have conveyed to ordinary reasonable listeners, and in doing so, you apply the standards of the community. What would ordinary decent people in the community have drawn from that? And you also apply that to whether or not it was defamatory, you apply the standards of ordinary decent members of the community." It was at this point that her Honour explained the two different and relevant aspects of a person's reputation. It was in this context that her Honour discussed the jury's approach to the two classes of imputations. With respect to imputations (a), (e), (f), (g) and (h) they were to ask themselves whether they would be understood by ordinary, right-thinking members of the community as damaging the plaintiff's reputation. Her Honour said that those in (b), (c) and (d) concerned the plaintiff's reputation as a journalist and that they could ask themselves whether it damaged him in the practice of his profession as a journalist. Her Honour gave an example of a statement which might not damage a person in their personal reputation but might injure them in their professional reputation. Her Honour explained, again, that the imputations in question, particularly that which suggested the plaintiff should not be taken seriously, concerned the plaintiff's professional reputation. The only question which arises, with respect to these otherwise impeccable directions, is whether the jury would have understood that a test different from the general test was to apply to imputations (b), (c) and (d). The 97 It was accepted by the parties that the transcript reference to the "sixth imputation" was erroneous. Bell only basis for a submission to that effect could be that her Honour did not reiterate that the jury were to consider these imputations from the perspective of the ordinary right-thinking members of the community, as she had done with respect to the other imputations, in the passages set out above. The answer to that question is not provided by a close examination of the words appearing in the transcript of directions, with a lawyer's eye for fine distinctions. The question is what a jury would have understood. There can be no doubt that the jury would have understood, from the general directions given by her Honour, that they were to assess any injury to the plaintiff's reputation resulting from the imputations and they were to undertake that assessment from the point of view of ordinary reasonable decent members of the community. The only distinction that is likely to have been obvious to the jury was that drawn by her Honour as between the two different aspects of reputation to which different imputations were to be attributed. The jury would not have understood that they were to ask whether the plaintiff was injured financially in the practice of his profession. It was made abundantly clear that they were to consider the effect upon his professional reputation in connection with the imputations in question. In that regard they had been told that the question was whether ordinary reasonable members of the community would think less of the plaintiff. No miscarriage of justice resulted from the trial judge's directions. Conclusion and orders The Court of Appeal in Gacic was in error in requiring a jury to be directed that the general test as to whether an imputation is defamatory is not to be applied in cases involving defamation in the way of a plaintiff's business or professional reputation. The reasons of the majority of the Court of Appeal in this case do not provide additional support for such an approach. The general test for defamation is relevant to all imputations which are said to have injured a plaintiff's reputation in some respect. The likelihood that the ordinary reasonable person may think the less of a plaintiff because of the imputations is assessed by reference to that person's general knowledge and their knowledge of standards held by the general community, as they may apply to what is said about the plaintiff. Because such a person can be expected to apply the standards of the general community, he or she may be described as "decent". The standards are not limited to those of a moral or ethical kind. That a particular imputation may not require the application of a community standard does not render the general test inapplicable. The inquiry as to the effect upon reputation remains. In a case where a secondary defamatory meaning is alleged, which may require knowledge of particular facts within a business or profession, those special facts may be pleaded and led in evidence in support of a true innuendo. There is no warrant Bell for the application of the knowledge or attitudes of a hypothetical referee other than those of the ordinary reasonable person. The majority of the Court of Appeal should have held that the general test applied in the case of the imputations in question. Nevertheless the Court was correct in its conclusion that the appeal should be dismissed. The trial judge's directions would have conveyed to the jury that they must apply the general test, adjudged by reference to the ordinary reasonable reader. The appeal should be dismissed with costs. HEYDON J. The background is set out above98. The appeal turns on whether the trial judge erred in saying to the jury that the question for them was whether the three "business reputation" imputations, "if conveyed, damaged [the respondent] in the practice of his profession as a journalist", and on whether she failed to tell them that the question was whether "ordinary people in the community … would tend to think less of" the respondent. The Court is invited to embark on the enterprise of considering whether it should interfere with the refusal of a divided intermediate appellate court, comprising three judges experienced in defamation law, to overrule an earlier decision of that court, comprising another three judges experienced in defamation law. The parties submitted that the enterprise would be assisted by examining many authorities, a significant amount of specialised professional writing, and shifts in the way in which doctrine was expressed from edition to edition of those writings. However, unless it is absolutely necessary for the just disposition of the appeal that the invitation be accepted, it is undesirable to accept it. It is not necessary because the appeal can be dismissed for two separate reasons specific to this particular case. Even if there was a misdirection, there was no substantial wrong or miscarriage The only complaint which the appellant pursued on appeal either to the Court of Appeal or to this Court was a complaint that the trial judge had misdirected the jury. The primary remedy desired by the appellant reflected both in its notice of appeal to the Court of Appeal and its notice of appeal to this Court, was an order for a new trial. The misdirection alleged was that the trial judge directed the jury that they were not required to assess whether the "three 'business reputation' imputations were defamatory in accordance with the standards of the general community". The Court of Appeal was prohibited from ordering a new trial for misdirection unless it appeared to it that some substantial wrong or miscarriage had been occasioned by that misdirection99. 98 At [13]-[15] and [26]-[31]. 99 Rule 51.53(1) of the Uniform Civil Procedure Rules 2005 (NSW) provides: "The Court must not order a new trial on any of the following grounds: (a) misdirection, non-direction or other error of law, unless it appears to the Court that some substantial wrong or miscarriage has been thereby occasioned." A substantial wrong or miscarriage in relation to jury misdirection exists where "the result of the case is such as to show that [the jury] may have been influenced in their verdict by the misdirection"100. The appellant submitted that it had argued before the jury that the broadcast would not have been understood as conveying any defamatory meaning, but rather would have been understood as constituting mere vulgar abuse. In this Court the appellant argued that the "'business defamation' direction to the jury made it impossible for the jury to understand or accept the basis of the vulgar abuse submission". The appellant submitted that the trial judge's direction to the jury excluded any reference to community standards, and, if it had, that this destroyed the "substratum" of its argument in relation to vulgar abuse. A "vulgar abuse" argument can take one or both of two forms. One form contends that an alleged imputation is not conveyed because the ordinary reasonable reader would not take notice of what is only abuse. The second form contends that an imputation which is conveyed is not defamatory because the ordinary reasonable reader would not take notice of what is only abuse. The appellant advanced both forms of the argument to the jury. In relation to the first form, the trial judge directed the jury that the question whether an imputation was conveyed was to be answered by considering whether it was conveyed to the ordinary reasonable listener. The appellant did not criticise that test. The trial judge's direction that that was the test could not have made it impossible for the jury to understand and accept that aspect of the vulgar abuse submission. The appellant's argument rather was that the impact of the trial judge's alleged error in her direction to the jury unjustly damaged the second form of the vulgar abuse submission. It thus relates to the question whether the imputations were defamatory. Despite that argument, even if the jury had been directed in the manner which the appellant now submits it should have been, there is no possibility that the answers to the questions put to the jury could have changed. The appellant's complaint was that the trial judge erred in failing to ask the jury whether, if the business reputation imputations were conveyed, they would be regarded by ordinary reasonable members of the community as defaming the respondent. Even if the trial judge erred in that respect, the broadcast was of a character so egregious as to make it inevitable that the jury would find not only that the pleaded imputations, including the business reputation imputations, were conveyed, but also that they were defamatory. That is so whether the relevant test for what is defamatory is what the appellant contends the trial judge put to 100 Holford v The Melbourne Tramway and Omnibus Co Limited [1909] VLR 497 at 526 per Cussen J, approved in Balenzuela v De Gail (1959) 101 CLR 226 at 233 per Dixon CJ; [1959] HCA 1. the jury or whether the relevant test is what the appellant contends should have been put to the jury. Whichever of the two tests were to be applied, had the jury returned different answers, the Court of Appeal could have set those answers aside and substituted the correct ones. Each of the imputations was inescapably and unmistakably defamatory. A contrary conclusion would be perverse101. There was no misdirection There is a second ground on which the appeal may be dismissed. Let it be assumed that, as the appellant submitted, the jury should have been told that the question whether the imputations as to the respondent's professional reputation were defamatory ought to have been determined by reference to whether they would be likely to make an ordinary reasonable person think less of him, applying community standards. Or let it be assumed that, as the dissenting judge in the court below said, the jury should have been told to consider whether "the hypothetical referee, whose standards are taken to reflect those of ordinary right-thinking people, would conclude that [the imputations] tend to injure the [respondent's] reputation in the relevant … professional respect"102. Even if one or other of those assumptions is made, the directions given by the trial judge, read as a whole, did not fail to conform to the standard assumed. In the passage in the trial judge's summing up about which the appellant complained, she said that the question for the jury was whether the three business reputation imputations, "if conveyed, damaged [the respondent] in the practice of his profession as a journalist". That passage was part of a sentence. A summing up is a structured and solemn piece of prose. When considering prose of that kind, to find out the meaning of particular words forming part of a sentence, it is normal not to examine the words in isolation, as though they were recorded on a fragment of papyrus or were part of an edict of Asoka on a broken pillar. Rather it is desirable to ascertain the meaning of the sentence as a whole103. And to ascertain the meaning of a sentence, it is normal to consider the context in which it appears. In context, as the respondent submitted and as Hodgson JA pointed out in the court below, it is plain that the trial judge was saying that the question was whether the respondent was damaged in respect of his reputation in his profession as a journalist. That is because the entire sentence in which the impugned passage occurs is: 101 John Fairfax Publications Pty Ltd v Gacic (2007) 230 CLR 291 at 350-351 [184]- [187]; [2007] HCA 28. 102 These are assumptions. As such, they do not derogate from what was said in John Fairfax Publications Pty Ltd v Gacic (2007) 230 CLR 291 at 336-354 [153]-[195]. 103 See XYZ v The Commonwealth (2006) 227 CLR 532 at 592-593 [176], n272; [2006] HCA 25. "Imputations (b), (c) and (d) are imputations concerned with [the respondent's] reputation in his profession as a journalist and in that respect you ask yourselves whether the imputations, if conveyed, damaged him in that respect, that is in the practice of his profession as a journalist". (emphasis added) The words "that respect" refer back to the words "reputation in his profession as a journalist" and transfer that meaning to the words "practice of his profession as a journalist". Hodgson JA also pointed out that in addition to that reference to "professional reputation" in the sentence containing the impugned passage there were references to it in the succeeding two paragraphs. Indeed, there were three additional references to it in the two paragraphs after that. And just before the impugned passage, the trial judge had told the jury that the reference by counsel for the respondent to "business reputation" was to a claim by the respondent "to have been defamed in relation to the practice of his profession as a journalist". What did the trial judge tell the jury about the meaning of the word "defamed"? First, in an earlier passage the jury had been told that defamation is "a publication of something that injures a reputation". Secondly, the jury had been told that the test for assessing whether an imputation damages the respondent's reputation was "the test of ordinary reasonable members of the community". Thirdly, the jury had been told: "The ordinary, reasonable recipient of this broadcast is a hypothetical person who reflects community views, standards, attributes and behaviour". And, fourthly, they had been told that defamatory matter is "something that would make ordinary, decent members of the community think less of the [respondent]". In none of those four passages just quoted did the trial judge distinguish between the three business reputation imputations and the others. The same is true of later references by the trial judge to whether the imputations "were damaging to [the respondent's] reputation" and to what "ordinary decent people in the community" would think. The only angle from which, if one makes either of the assumptions set out above, the direction could be criticised is that just before the passage containing the impugned part-sentence, the trial judge said of the five non-business imputations: "[T]hey are imputations of something personal about [the respondent's] personal reputation. If you decide that any of those imputations have been conveyed by the broadcast, then you ask whether that imputation would be regarded by ordinary right-thinking members of the community as defamatory, as damaging to his reputation." The appellant argued in effect that the express reference to the test for the non-business imputations at that point, coupled with the trial judge's failure to repeat it in the immediately following sentence containing the impugned passage, was an exclusion of its applicability to the business imputations. That submission must fail, on the ground that there are so many other passages conforming to what is being assumed to be the correct approach that the jury cannot have misunderstood the point made by the trial judge in them. It will be remembered in relation to the issue whether there was a substantial wrong or miscarriage that the appellant contended that if the trial judge's direction excluded any reference to community standards then what his counsel said to the jury about the three business reputation imputations in relation to vulgar abuse lost its substratum. The trial judge's admirably short summing up, read as a whole, did not exclude any relevant reference to community standards. This is an additional reason for concluding that there was no substantial wrong or miscarriage. Orders The appeal should be dismissed with costs.

HIGH COURT OF AUSTRALIA PLAINTIFFS AND AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION & ORS DEFENDANTS Forge v Australian Securities and Investments Commission [2006] HCA 44 5 September 2006 ORDER The First and Second Defendants' Demurrers to the Statement of Claim dated 12 April 2005 are allowed. Judgment for the Defendants with costs. Representation R J Ellicott QC with J L Glissan QC, S M Whybrow and W J Wilcher for the plaintiffs (instructed by Ken Cush & Associates) S J Gageler SC with M R Pearce SC for the first defendant (instructed by Australian Securities and Investments Commission) M G Sexton SC, Solicitor-General for the State of New South Wales with J G Renwick for the second defendant (instructed by Crown Solicitor for New South Wales) D M J Bennett QC, Solicitor-General of the Commonwealth with N L Sharp for the third defendant (instructed by Australian Government Solicitor) Interveners W C R Bale QC, Solicitor-General of the State of Tasmania with S K Kay intervening on behalf of the Attorney-General of the State of Tasmania (instructed by Solicitor-General of Tasmania) W C R Bale QC, Solicitor-General of the State of Tasmania with S L Brownhill intervening on behalf of the Attorney-General for the Northern Territory (instructed by Solicitor for the Northern Territory) R J Meadows QC, Solicitor-General for the State of Western Australia and R M Mitchell intervening on behalf of the Attorney-General for the State of Western Australia (instructed by State Solicitor's Office (Western Australia)) C J Kourakis QC, Solicitor-General for the State of South Australia with M J Wait and S A McDonald intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor's Office South Australia) P M Tate SC, Solicitor-General for the State of Victoria with S G E McLeish, K L Walker and R J Orr intervening on behalf of the Attorney-General for the State of Victoria (instructed by Victorian Government Solicitor) W Sofronoff QC, Solicitor-General of the State of Queensland with R W Campbell intervening on behalf of the Attorney-General of the State of Queensland (instructed by Crown Solicitor for the State of Queensland) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. HIGH COURT OF AUSTRALIA GUMMOW, KIRBY, HAYNE, CALLINAN, HEYDON AND CRENNAN JJ AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION PLAINTIFF AND WILLIAM ARTHUR FORGE & ORS DEFENDANTS Australian Securities and Investments Commission v Forge 5 September 2006 The questions reserved are answered as follows: ORDER As to the validity of the appointments under the Supreme Court Act 1970 (NSW) of the Honourable Michael Leader Foster to act as a Judge of the Supreme Court of New South Wales, and the capacity of his Honour to act in the cause: None of the successive appointments of the Honourable Michael Leader Foster to act as a judge of the Supreme Court of New South Wales was invalid. As to the construction and validity of the transitional provisions of Chapter 10 of the Corporations Act 2001 (Cth): The proceedings commenced in the Supreme Court of New South Wales by the Australian Securities and Investments Commission against William Arthur Forge and others on 26 April 2001 and tried before Foster AJ constituted a matter arising under a law made by the Parliament within the meaning of s 76(ii) of the Constitution. The Defendants (other than the Fifth Defendant) to pay the Plaintiff's costs. Representation S J Gageler SC with M R Pearce SC for the plaintiff (instructed by Australian Securities and Investments Commission) R J Ellicott QC with J L Glissan QC, S M Whybrow and W J Wilcher for the first to fourth and sixth defendants (instructed by Ken Cush & Associates) No appearance for the fifth defendant Interveners D M J Bennett QC, Solicitor-General of the Commonwealth with N L Sharp intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor) W C R Bale QC, Solicitor-General of the State of Tasmania with S K Kay intervening on behalf of the Attorney-General of the State of Tasmania (instructed by Solicitor-General of Tasmania) W C R Bale QC, Solicitor-General of the State of Tasmania with S L Brownhill intervening on behalf of the Attorney-General for the Northern Territory (instructed by Solicitor for the Northern Territory) R J Meadows QC, Solicitor-General for the State of Western Australia and R M Mitchell intervening on behalf of the Attorney-General for the State of Western Australia (instructed by State Solicitor's Office (Western Australia)) M G Sexton SC, Solicitor-General for the State of New South Wales with J G Renwick intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor for New South Wales) C J Kourakis QC, Solicitor-General for the State of South Australia with M J Wait and S A McDonald intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor's Office South Australia) P M Tate SC, Solicitor-General for the State of Victoria with S G E McLeish, K L Walker and R J Orr intervening on behalf of the Attorney-General for the State of Victoria (instructed by Victorian Government Solicitor) W Sofronoff QC, Solicitor-General of the State of Queensland with R W Campbell intervening on behalf of the Attorney-General of the State of Queensland (instructed by Crown Solicitor for the State of Queensland) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. HIGH COURT OF AUSTRALIA GUMMOW, KIRBY, HAYNE, CALLINAN, HEYDON AND CRENNAN JJ WILLIAM ARTHUR FORGE & ORS APPLICANTS AND AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION & ANOR RESPONDENTS Forge v Australian Securities and Investments Commission 5 September 2006 ORDER The time for the Applicants to file their application for special leave is extended. Application for special leave dismissed. Applicants to pay the costs of the First Respondent. On appeal from the Supreme Court of New South Wales Representation R J Ellicott QC with J L Glissan QC, S M Whybrow and W J Wilcher for the applicants (instructed by Ken Cush & Associates) S J Gageler SC with M R Pearce SC for the first respondent (instructed by Australian Securities and Investments Commission) No appearance for the second respondent Interveners D M J Bennett QC, Solicitor-General of the Commonwealth with N L Sharp intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor) W C R Bale QC, Solicitor-General of the State of Tasmania with S K Kay intervening on behalf of the Attorney-General of the State of Tasmania (instructed by Solicitor-General of Tasmania) W C R Bale QC, Solicitor-General of the State of Tasmania with S L Brownhill intervening on behalf of the Attorney-General for the Northern Territory (instructed by Solicitor for the Northern Territory) R J Meadows QC, Solicitor-General for the State of Western Australia and R M Mitchell intervening on behalf of the Attorney-General for the State of Western Australia (instructed by State Solicitor's Office (Western Australia)) M G Sexton SC, Solicitor-General for the State of New South Wales with J G Renwick intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor for New South Wales) C J Kourakis QC, Solicitor-General for the State of South Australia with M J Wait and S A McDonald intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor's Office South Australia) P M Tate SC, Solicitor-General for the State of Victoria with S G E McLeish, K L Walker and R J Orr intervening on behalf of the Attorney-General for the State of Victoria (instructed by Victorian Government Solicitor) W Sofronoff QC, Solicitor-General of the State of Queensland with R W Campbell intervening on behalf of the Attorney-General of the State of Queensland (instructed by Crown Solicitor for the State of Queensland) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Forge v Australian Securities and Investments Commission Constitutional law (Cth) – Chapter III – State Supreme Courts – Acting Judges – Section 37 of the Supreme Court Act 1970 (NSW) provided for appointments to act as a judge, for a period not exceeding 12 months – Former Federal Court Judge appointed as an Acting Judge of the Supreme Court of New South Wales under a series of commissions pursuant to s 37 of the Supreme Court Act – Whether the appointments as an Acting Judge were validly made – Whether s 37 of the Supreme Court Act was valid – Whether Acting Judges, when appointed other than on an occasional and exceptional basis, substantially impair public confidence in the Supreme Court's institutional integrity and impartiality and prevent that Court from answering to the constitutional description of "Supreme Court of any State" – Distinctions between permanent Judges and Acting Judges – Significance of a substantial increase in the number of Acting Judges appointed to the Supreme Court, the incidence of reappointing such Acting Judges and the duration of such appointments since 1989 – Whether changes in appointments of Acting Judges amounts to a fundamental alteration of the character and composition of the Supreme Court – Relevance of the fact that Acting Judges are typically retired Judges. Constitutional law (Cth) – No objection to the appointment of the Acting Judge in question taken at trial or on appeal to the New South Wales Court of Appeal – Whether parties contesting the validity of appointment prevented from doing so by reason of acquiescence or waiver – Opposing parties did not submit acquiescence or waiver, if any, prevented objection to validity of appointment – Whether High Court should consider effect of acquiescence or waiver. Constitutional law (Cth) – Judicial power of the Commonwealth – Vesting in State courts – Federal character of the Commonwealth – Power of State Parliament to confer function incompatible with exercise by State court of federal judicial power – Whether appointments of Acting Judges in large numbers consistent with judicial process and Chapter III of the Constitution. Judges – Acting Judges – Validity of orders made by Acting Judge – Whether such orders valid regardless of validity of appointment of the Acting Judge by reason of the de facto officers doctrine. Corporations law – Transitional provisions of Ch 10 of the Corporations Act 2001 (Cth) – ASIC brought proceedings, in 2001, against the parties contesting validity of in question alleging contravention, in 1998, of civil penalty provisions of the Corporations Law of New South Wales – Whether, after the repeal of the relevant civil penalty the appointment of the Acting Judge provisions of the State corporations law and the enactment of the Corporations Act, the proceedings alleging contravention could be brought. Words and phrases – "Acting Judges", "court", "impartiality", "institutional integrity", "judicial independence", "Supreme Court of any State". Constitution, ss 71, 72, 73, 75, 76, 77(iii). Corporations Act 2001 (Cth), Ch 10. Judiciary Act 1903 (Cth), s 39(2). Supreme Court Act 1970 (NSW), s 37. GLEESON CJ. There are three proceedings before the Court. The first was commenced in the original jurisdiction of the Court. The second was commenced in the Supreme Court of New South Wales and removed in part into this Court under s 40 of the Judiciary Act 1903 (Cth). The third is an application for special leave to appeal to this Court from a decision of the Court of Appeal of the Supreme Court of New South Wales, which substantially dismissed an appeal from Foster AJ. It is convenient to refer to the moving parties in all those proceedings as "the applicants". All three proceedings relate to, or arise out of, litigation in the Supreme Court of New South Wales between the Australian Securities and Investments Commission ("ASIC") and the applicants. On 26 April 2001, ASIC commenced an action ("the ASIC proceedings") in the Supreme Court of New South Wales for civil penalties, declarations and orders pursuant to Pt 9.4B of the Corporations Law of New South Wales ("the State law"), alleging contraventions in 1998 by the applicants of the State law. The State law was repealed as from 14 July 2001. The Corporations Act 2001 (Cth) ("the Commonwealth law") came into force on 15 July 2001. On and from that date ASIC continued, or purported to continue, the proceedings pursuant to the transitional provisions of the Commonwealth law. The action came on for hearing before Foster AJ in March 2002. The hearing concluded on 1 May 2002. On 28 August 2002, Foster AJ delivered judgment. He found in favour of ASIC, made declarations and imposed penalties. The applicants appealed to the Court of Appeal. On 7 December 2004, the appeal was dismissed except in relation to penalty. The Court of Appeal ordered that the matter be remitted to the Equity Division of the Court for hearing on penalty only. That penalty hearing has not yet taken place. At that stage, the applicants, for the first time, raised a question as to the validity of the appointment of Foster AJ. No objection had been taken to Foster AJ sitting, and no point about the validity of his appointment had been raised before the Court of Appeal. An application for special leave to appeal to this Court raised as one proposed ground of appeal "that the appointment under section 37 of the Supreme Court Act 1970 (NSW) of Foster AJ, the trial judge, was invalid". The other proposed ground of appeal was based on a point that had been argued before the Court of Appeal. It concerned the legislative validity of the transitional provisions earlier mentioned. In addition, the applicants instituted the first two proceedings referred to at the commencement of these reasons. In those proceedings, a Justice of this Court has reserved two questions for the decision of a Full Court. The first question concerns the validity of the appointment of Foster AJ. The second concerns the validity of the transitional provisions of the Commonwealth law. If both of those questions are answered unfavourably to the applicants, then that will be decisive of the special leave application. I agree with the answers to both questions proposed in the reasons of Gummow, Hayne and Crennan JJ. I also agree with their reasons for the answer proposed to the second question, and have nothing to add to what is there said. My reasons for the answer to the first question are as follows. The issue It is important to be clear about the legal basis of the belated challenge to Foster AJ's appointment. It is that s 37 of the Supreme Court Act 1970 (NSW), the section that empowers the Governor of New South Wales to appoint acting Judges, is invalid. The Honourable Michael Leader Foster was born on 27 November 1928. He served for a number of years as a Judge of the Federal Court of Australia. He reached the age of 70, at which age he was compelled by statute to retire from that Court, in November 1998. Under a series of commissions pursuant to s 37 of the Supreme Court Act he was appointed an acting Judge of the Supreme Court of New South Wales commencing on 31 May 1999 and ending on 26 November 2003, when he reached the age of 75, which is, by s 37(4A), the maximum age for an acting Judge of the Supreme Court. Each of those commissions except the last was for a period of one year. The appointments that were operative when the ASIC proceedings were heard and determined were the third and fourth of his appointments, commencing on 31 May 2001 and 31 May 2002 respectively. It is those two appointments that are challenged. Subject to one qualification, the bare facts set out above constitute the only information before the Court concerning Foster AJ's appointments. He himself is not a party to any of the proceedings. The potential consequences for him, and for other litigants, if the challenge succeeds have not been explored. One of the arguments for the applicants countenanced the possibility that legislation could validly provide for the appointment of acting Judges to the Supreme Court in "special circumstances", but there is very little information about the circumstances in which Foster AJ was appointed, and, in any event, s 37 does not so provide. The nature of the case for the applicants is such that the circumstances of Foster AJ's appointments are irrelevant. If it were otherwise, it would be inappropriate to deal with the matter in its present form. This Court is in a position to decide, as a question of law, the validity of s 37 of the Supreme Court Act. It is not in a position to make any decision about the validity of Foster AJ's appointments on the hypothesis that the section stands, but that the validity of appointments made under the section depends upon the circumstances existing at the times of the appointments, or turns upon a judgment as to whether those circumstances were "special", whatever that might mean. The qualification mentioned in the preceding paragraph is that reference was made in argument to some publicly available (and undisputed) figures about the numbers of people holding commissions as Judges, Judges of Appeal, Acting Judges and Acting Judges of Appeal, of the Supreme Court of New South Wales at annual intervals. The figures were taken from the Supreme Court's Annual Reviews. As at 31 December 2001, there were 45 permanent Judges (including Judges of Appeal) of the Supreme Court of New South Wales. During the preceding calendar year 20 persons (all of whom were retired Judges of either the Federal Court or the Supreme Court, or serving Judges of the District Court) had been appointed as acting Judges or Judges of Appeal for specified terms. Some of those terms were for a year; others were for shorter periods, typically three months. None of the persons appointed as acting Judges were practising barristers. 31 December 2001 fell approximately in the middle of the dates of the two appointments in question. The corresponding figures for 31 December 2002 are not materially different. There were 44 permanent Judges and Judges of Appeal. During the calendar year 2002 seven acting Judges of Appeal and 13 acting Judges held appointments. Again they were all retired judges, or serving District Court Judges, but for one, who was a Master of the Supreme Court. Self-evidently, in calculating the proportion of judge sitting-time occupied by acting Judges it would be necessary to take account of the periods for which any acting Judge actually sat. That information is not before the Court. What the figures show is that, at the times of Foster AJ's appointments, putting to one side full-time serving judicial officers who were brought up temporarily from within the court system itself, the acting Judges of the Supreme Court of New South Wales were retired judicial officers; not practising barristers. The legal significance which the applicants seek to attach to that information is not clear. Section 37 was enacted in 1970, and it was not materially different from earlier legislation enacted legislation providing for acting appointments to the Supreme Court of New South Wales has an even longer history. It is only the appointments of Foster AJ that are in question. If s 37 is invalid, then it was invalid in 1970, and the appointments of Foster AJ were invalid. Indeed, The validity of the two relevant appointments of Foster AJ is not said to turn upon any circumstances personal to Foster AJ, or upon any particular circumstances that might have had any bearing on the decision by the Executive Government to exercise, in the case of the appointments of Foster AJ, the power conferred by s 37. There is no evidence, or agreement, as to what those circumstances might have been, even if they were otherwise relevant to any decision which it is within this Court's capacity to make. Relevant legislation The Supreme Court Act 1970 (NSW) "continued" the Court "as formerly established as the superior court of record in New South Wales" (s 22). It provided, in s 25, that the Court shall be composed of a Chief Justice, a President of the Court of Appeal and such other Judges of Appeal and Judges as the Governor may from time to time appoint. The Act imposed no limit on the number of Judges that might be in which appointed, and made no provision about the circumstances appointments might be made. It specified (in s 26) the qualifications of appointees. In s 27, it provided for tenure. Subject to the age of compulsory retirement (then 70 and now 72) Judges' commissions were to "continue and remain in force during ... good behaviour", subject to a power of removal by the Governor on an address of both Houses of Parliament. (The matter of tenure was later dealt with, to like effect, in the Judicial Officers Act 1986 (NSW), and later still by an amendment to the Constitution Act 1902 (NSW).) In brief, subject to the prescribed qualifications for appointment, the power to appoint Judges of the Supreme Court was left to the Executive Government in completely general terms. That is typical of legislation in all Australian jurisdictions. It is necessary to say something more about the Constitution Act 1902 (NSW). Part 9 of that Act deals with the judiciary. It governs the removal of a holder of judicial office. By s 53, the holder of a judicial office can be removed from the office only by the Governor, on an address from both Houses of Parliament in the same session, seeking removal on the ground of proved misbehaviour or incapacity. The provision extends to acting appointments to a judicial office, whether made with or without a specific term (s 53(5)). The provision applied the relevant appointments1. to Foster AJ during term of both the In Valente v The Queen2, Le Dain J said: "The essence of security of tenure for purposes of s 11(d) [of the Canadian Charter of Rights and Freedoms] is a tenure, whether until an age of retirement, for a fixed term, or for a specific adjudicative task, that is secure against interference by the Executive or other appointing authority in a discretionary or arbitrary manner." The appointments of Foster AJ satisfied that requirement. To return to the Supreme Court Act of 1970 in its original form, s 37 conferred a power to appoint acting Judges. It provided: "(1) The Governor may, by commission under the public seal of the State, appoint any qualified person to act as a Judge for a time not exceeding six months to be specified in such commission. In subsection one of this section "qualified person" means a person qualified for appointment as a Judge. 1 Contrast Starrs v Ruxton; Ruxton v Starrs 2000 JC 208; and compare Kearney v HM Advocate 2006 SC (PC) 1. [1985] 2 SCR 673 at 698. The person so appointed shall, for the time and subject to the conditions or limitations specified in his commission, have all the powers, authorities, privileges and immunities and fulfil all the duties of a Judge." Section 37, in its form at the time of the appointments in question, is set out in the joint reasons. It accommodates the relatively recent development of appointing, as acting Judges, retired judges rather than practising barristers, as was the case during most of the history of the Supreme Court. However, save for the inclusion of a reference to Judges of Appeal in 19893, and the alteration of six months to 12 months, s 37(1) remains the same. That is the provision central to the present issue. Legislation relating to the Supreme Court has long contained provision for the appointment of acting Judges. For example, s 13 of the Supreme Court and Circuit Courts Act 1900 (NSW), which was in force at the time of Federation, empowered the Governor to issue a special commission to any Judge of the District Court, or to any barrister of not less than seven years' standing, appointing him to act as a Judge of the Supreme Court. Such appointments could be made for the purpose of sitting at any Circuit Court, or at any place or places at which a Judge of the Court could not attend without detriment to the ordinary business of the Court, or for the purpose of sitting and acting as a Judge of the Court at Sydney in any one or more jurisdictions of the Court to be specified in such commission, and for a time not exceeding six months. Subject to the qualification in the 1900 Act concerning appointments to sit at places outside Sydney, legislation, in New South Wales and elsewhere in Australia, empowering the Executive Government to appoint acting judges, like legislation providing for the appointment of permanent judges, has usually been expressed in general terms, without attempting to confine the circumstances in which it might be considered appropriate to exercise the power. This is consistent with constitutional principle. Judges are appointed by the Executive Government in the exercise of powers conferred by Parliament. Judges are not appointed by the judicial branch of government. They are appointed by the political branches of government, and decisions as to appointment are subject to political accountability. No doubt many judges have strong opinions about matters relating to judicial appointments, whether permanent or temporary. Many judges have opinions about the number of judges that ought to be appointed, the qualities that ought to be looked for in appointees, and the procedures of selection that ought to be followed. Their opinions may deserve weight, because of their personal knowledge and experience. Even so, judges do not appoint one another. The responsibility for making decisions about Statute Law (Miscellaneous Provisions) Act 1989 (NSW), ss 2(1), 3 and Sched 1. judicial appointments, including numbers and circumstances of appointments, rests with those who have the responsibility of paying the salaries, and providing the necessary resources, of the appointees, and who have political accountability for bad or unpopular decisions about appointments. Assertions are sometimes made about possible abuses of the power to appoint acting judges. What would constitute an abuse of the power might be a matter on which opinions would differ. Two points should be made. First, such opinions concern matters which are decided by the political branches of government, not by the judiciary. If it is said (as it is in this case) that there is a justiciable issue concerning the appointment of acting judges, there is a need to identify that issue with precision, and to ensure that what is being decided is a matter within judicial, and not executive or legislative, authority. The validity of s 37 is a justiciable issue. The general desirability of acting appointments is not. Secondly, the possibility of abuse of the power to appoint permanent judges is just as obvious as the possibility of abuse of the power of appointing acting judges. It requires no imagination to think of ways in which an Executive Government, if so minded, could misuse its power to appoint permanent judges, yet it has never been suggested that legislation which confers the power in unconfined terms is invalid. Before concluding on the subject of New South Wales legislation, further reference should be made to the Judicial Officers Act 1986. That legislation established a scheme for dealing with complaints against judicial officers. In that Act, a reference to the holder of any judicial office includes a reference to a person appointed to act in that office (s 3(3)). Furthermore, an acting Judge is within the definition of "public official" in s 3 of the Independent Commission Against Corruption Act 1988 (NSW) and is therefore subject to the regime of scrutiny imposed by that Act in respect of departures from the standards of "honest and impartial exercise of official functions". These two legislative regimes post-date s 37. They are, however, part of the circumstances in which the appointments of Foster AJ were made and would need to be considered if, in some way, reliance were to be placed on those circumstances. As with permanent Judges, the remuneration of acting Judges of the Supreme Court of New South Wales is fixed by recommendations made by an independent statutory authority, which recommendations are subject disallowance by Parliament4. Finally, before an acting Judge enters upon the performance of duties pursuant to a commission, he or she must take the judicial oath or affirmation, Statutory and Other Offices Remuneration Act 1975 (NSW), ss 13, 19A and Sched 1. which is a commitment to do right to all manner of people without fear or favour, affection or ill-will5. In brief, an acting Judge of the Supreme Court of New South Wales is appointed by the same authority (the Governor-in-Council) as appoints a permanent Judge of that Court, takes the same oath of office binding him or her to impartiality, is subject to the same process of removal during a term of office (removal by the Governor on an address of both Houses of Parliament), is remunerated on the basis of recommendations of the same tribunal, is subject to the same system of complaints and discipline administered by the Judicial Commission of New South Wales, and is subject to the same scrutiny by the Independent Commission Against Corruption. It might be added that the last two statutory mechanisms for judicial accountability, which reinforce obligations of impartiality, go beyond any system that applies to federal judges, or to judges in most other parts of Australia. New South Wales judges, including acting judges, are subject to statutory regimes of scrutiny and accountability for misbehaviour (including bias) more extensive than those which apply to their counterparts elsewhere in Australia. Acting Judges In a perfect world, an Executive Government would appoint exactly the number of permanent judges required to enable all courts to operate efficiently and effectively, all courts would have consistent and predictable caseloads, there would be no temporary shortages of resources, there would be no need for delay reduction programmes, and the size of courts would expand to meet litigious demand. (What would happen in the event of a contraction of litigious demand is a question that raises its own problems.) No such world exists. The appointment of acting judges, supplementing permanent judicial resources, has been an aspect of the administration of justice in New South Wales, and in other parts of Australia, from the beginning. Until fairly recently, most acting judges were practising barristers who agreed to accept judicial appointment for a limited term. Sometimes, judges of a lower court were appointed, temporarily, to a higher court. There are two main reasons advanced in opposition to appointments of the first kind. First, barristers who are appointed as acting judges are said to lack the necessary appearance of impartiality, especially if they are hoping for permanent appointment. Secondly, governments may be tempted to make acting appointments in order to avoid their responsibility to provide an adequately resourced, permanent, full-time judiciary. Depending on circumstances, there may be substance in such concerns. Anybody familiar with the practicalities of government funding will know that temporary accommodation has a way of becoming permanent. These, however, 5 Oaths Act 1900 (NSW), s 8 and Fourth Schedule. are matters that are generally the subject of political responsibility and accountability. As was noted above, there are sometimes concerns about aspects of government decisions on the making of permanent appointments. Such issues are usually fought out in the political arena. Resolution of justiciable issues requires identification of a legal norm and its application to established facts. Earlier this year, the Privy Council, in Kearney v HM Advocate6, applied the legal norm set out in Art 6(1) of the European Convention on Human Rights to the Scottish system of appointing practising advocates as temporary judges. The Article provides: "In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law." Similar legal standards, usually based on constitutional provisions, or human rights instruments, have been applied by courts on a number of occasions, in deciding whether some aspect of a court, or a court system, complied with minimum requirements of independence and impartiality, and thus whether a decision-making authority answered the description of a "court". Decisions in those cases contain valuable analyses of the essential requirements of an independent and impartial court7. In Kearney v HM Advocate, the Privy Council concluded that the Scottish system complied with the requirement of Art 6(1). The reasons of Lord Hope of Craighead contain an account of the development in Scotland of the practice of appointing advocates as temporary judges. Lord Carswell, summarising the conclusions of the other members of the Privy Council, said that "there is no reason to doubt the independence or impartiality of temporary judges appointed from the Faculty of Advocates to act as judges in the High Court of Justiciary"8. Of course, that conclusion depended upon a close examination of matters of fact, and of the legal context in which the issue arose. The point is that what was addressed was a justiciable issue involving the application of a legal test to a particular system of appointing temporary judges. The system was held to satisfy the test. 2006 SC (PC) 1. 7 See, for example, Valente v The Queen [1985] 2 SCR 673; R v Beauregard [1986] 2 SCR 56; R v Généreux [1992] 1 SCR 259; Reference re Remuneration of Judges of the Provincial Court of Prince Edward Island; Reference re Independence and Impartiality of Judges of the Provincial Court of Prince Edward Island [1997] 3 SCR 3; Van Rooyen v The State 2002 (5) SA 246 (CC). 2006 SC (PC) 1 at 21 [63]. The use of part-time judicial officers in England and Wales is extensive. In the fourth edition of Halsbury it is said9: "It is a feature of the judicial system in England and Wales that there are many part-time judicial office holders, such as deputy High Court judges, deputy circuit judges and recorders. These appointees are usually barristers or solicitors in practice. They do not enjoy the high degree of security of tenure applicable to the full-time judiciary." It has not been unusual in Australia for practising barristers to be appointed acting judges. This is illustrated by the fact that two of the first three members of this Court, Barton J10 and O'Connor J11, had been acting Judges of the Supreme Court of New South Wales, and Dixon J12, Rich J13, Williams J14, Owen J15 and Jacobs J16 had also been acting judges of State Supreme Courts. At the time of Federation, some of the State (formerly colonial) Supreme Courts were, by modern standards, very small. Each of the Supreme Courts of Tasmania17, South Australia18 and Western Australia19 had only three members. 9 Halsbury's Laws of England, 4th ed reissue, vol 8(2), par 301. 10 Bolton, Edmund Barton, (2000) at 131. 11 Blackshield, Coper and Williams (eds), The Oxford Companion to the High Court of Australia, (2001) at 509. 12 Ayres, Owen Dixon, (2003) at 48. 13 Blackshield, Coper and Williams (eds), The Oxford Companion to the High Court of Australia, (2001) at 605. 14 Blackshield, Coper and Williams (eds), The Oxford Companion to the High Court of Australia, (2001) at 713. 15 Blackshield, Coper and Williams (eds), The Oxford Companion to the High Court of Australia, (2001) at 518. 16 Blackshield, Coper and Williams (eds), The Oxford Companion to the High Court of Australia, (2001) at 365. 17 Ely (ed), Carrel Inglis Clark: The Supreme Court of Tasmania, Its First Century [1900] South Australian Law Reports. (1899-1900) 1 & 2 Western Australian Law Reports. An illness of a permanent judge could create a temporary need which governments might well be reluctant to meet by appointing another permanent judge. Similarly, departure of a permanent judge on a period of leave could result in a vacancy which a government might wish to fill by an acting appointment. Practical considerations of that kind were well understood by the Founders, who were familiar with the needs of States for systems that made it possible to appoint acting judges. Quantitative analysis may be misleading. It was pointed out in argument that four of the ten Judges presently holding commissions in the Supreme Court of the Northern Territory are acting Judges. They perform a relatively small proportion of the Court's total work. That may vary from time to time. Depending upon the size of a court, a small number of acting appointments could influence strongly the proportion between permanent and temporary judges. From one point of view, the smaller the court the more necessary it may be to have some provision for acting judges. Again, however, the effective size of a court needs to be related to its workload. Comparison of the number of acting judges in a given court over a period of years without reference to changes in the number of permanent judges over the same period would be meaningless. According to the submissions of the parties, examination of the front pieces and memoranda in the State Reports of New South Wales and the New South Wales Law Reports shows that in 1907 there were seven permanent Judges, in 1929 there were nine, in 1935 there were ten, in 1952 there were 16, in 1969 there were 35, in 1988 there were 42, in 2001 there were 49 and in 2004 there were 50. The number of acting Judges fluctuated. In many years there were none. In several years (such as 1907, 1911, 1919, 1920, 1924, 1929, 1936, 1937, 1938, 1939 and 1952) the number of acting Judges was more than 20 per cent of the total number of Judges at the Court. That figure, in turn, is uninformative unless it is further refined by reference to the actual time for which individual Judges sat. A change that has occurred in recent times in New South Wales has been a move towards the appointment of retired judges as acting Judges of the Supreme Court. At the time of his appointments, Foster AJ was not a practising barrister. None of the other acting Judges who held office at the same time as him were practising barristers. The age of compulsory retirement for a Federal Court Judge is 70. The corresponding age for a Judge of the Supreme Court of New South Wales is 72. The maximum age for an acting Judge of the Supreme Court of New South Wales is 75. If there are to be any acting judges at all, the reasons why governments might look to experienced, retired judges are plain. It may be added that retired Australian judges perform valuable service as judges, for limited terms, in a number of countries in the Pacific region and elsewhere. Finally, it may be noted that, in 1999, this Court dismissed a challenge to the validity of an appointment of an acting Judge of the Supreme Court of the Australian Capital Territory, although the arguments advanced in that case were somewhat different from the arguments in the present case. In Re Governor, Goulburn Correctional Centre; Ex parte Eastman20, a man who had been convicted of murder after a long criminal trial sought to challenge the conviction on the ground that the presiding judge, Carruthers AJ (a retired former member of the Supreme Court of New South Wales), had not been validly appointed. One of the grounds of invalidity was that he was appointed for a limited term only. If argument for the applicants in the present case is correct, it is difficult to see how the outcome in that case could be supported. Furthermore, the case provides a good example of the kind of circumstance that explains the existence of a power to appoint acting judicial officers. The Supreme Court of the Australian Capital Territory is a small court. The Eastman trial (which lasted for many months) placed a large, but temporary, strain on its limited resources. Hence the resort to what was described as "the facility regularly employed in many of the Australian States but with added practical justifications deriving from the circumstances of the Territories"21. The validity of Supreme Court Act, s 37 Australia has an integrated, but not a unitary, court system. As was pointed out in North Australian Aboriginal Legal Aid Service Inc v Bradley22, there is no single ideal model of judicial independence, personal or institutional. Within the Australian judiciary, there are substantial differences in arrangements that bear upon judicial independence. Until a constitutional amendment in 1977, Justices of this Court, and other federal courts created by Parliament, were required to be appointed for life. No one ever suggested that, in that respect, Ch III of the Constitution provided a template that had to be followed to ensure the independence of State Supreme Courts, much less of all courts on which federal jurisdiction might be conferred. Indeed, for most of the twentieth century, many of the judicial officers who exercised federal judicial power, that is to say, State magistrates, were part of the State public service23. If Ch III of the Constitution were said to establish the Australian standard for judicial independence then two embarrassing considerations would arise: first, the standard altered in 1977; secondly, the State Supreme Courts and other State courts upon which federal jurisdiction has been conferred did not comply with the standard at the time of Federation, and have never done so since. (1999) 200 CLR 322. (1999) 200 CLR 322 at 365 [110] per Kirby J. (2004) 218 CLR 146 at 152 [3]. 23 North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146 Nothing better illustrates the room for legitimate choice that exists in connection with arrangements affecting judicial independence than the removal in 1977 of the requirement of life tenure for federal judges. That requirement probably explained why, before 1977, the federal judiciary was so small, and why so much federal jurisdiction was exercised by State judges, who did not have life tenure. At the time of Federation, life tenure was seen as necessary to secure the independence of the federal judiciary and, in particular, of the members of this Court. In 1977, it was seen as inconvenient. This Court did not become less independent in 1977. Tenure is an important aspect of the arrangements that support the individual and personal aspects of judicial independence; but it is only one of a number of aspects all of which have to be considered in combination. Furthermore, the essence of tenure is that explained in the quotation from Valente v The Queen set out earlier in these reasons. It is s 72 of the Constitution which, in its provisions as to judicial appointment, tenure and remuneration, deals with topics relevant to judicial independence. Those provisions are said, by s 72, to apply to the Justices of the High Court and of other courts created by the Parliament. There is nothing in the Constitution that says, either expressly or by implication, that State Supreme Courts, or other State courts that may be invested with federal jurisdiction, must be subject to like provisions relating to appointment, tenure and remuneration. At the time of Federation they were not; and they never have been since then. There are, of course, substantial similarities between the provisions applicable to State Supreme Courts and those found in s 72; but there are differences. In Re Governor, Goulburn Correctional Centre; Ex parte Eastman24, it was held that s 72 did not apply to the Supreme Court of the Australian Capital Territory. Obviously, it does not apply to the Supreme Court of New South Wales. Its terms are such that it could not possibly do so. The principal argument for the applicants, however, was less direct. It was acknowledged that the Constitution accepts the possibility that State courts, including State Supreme Courts, might be constituted differently from federal courts25. In Le Mesurier v Connor26, Knox CJ, Rich and Dixon JJ cited the statement of Isaacs J in R v Murray and Cormie; Ex parte The Commonwealth27 that "[t]he Constitution, by Chapter III, draws the clearest distinction between federal Courts and State Courts, and while enabling the Commonwealth Parliament to utilize the judicial services of State Courts recognizes in the most (1999) 200 CLR 322. 25 The Commonwealth v Hospital Contribution Fund (1982) 150 CLR 49. (1929) 42 CLR 481 at 495-496. (1916) 22 CLR 437 at 452. pronounced and unequivocal way that they remain 'State Courts.'" Their Honours went on to say: "The Parliament may create Federal Courts, and over them and their organization it has ample power. But the Courts of a State are the judicial organs of another Government. They are created by State law; that law, primarily at least, determines the constitution of the Court itself, and the organization through which its powers and jurisdictions are exercised." The argument for the applicants invoked the principle in Kable v Director of Public Prosecutions (NSW)28 that, since the Constitution established an integrated court system, and contemplates the exercise of federal jurisdiction by State Supreme Courts, State legislation which purports to confer upon such a court a function which substantially impairs its institutional integrity, and which is therefore incompatible with its role as a repository of federal jurisdiction, is invalid. By parity of reasoning, it was said, s 37 is invalid. If, according to the principle invoked, a State Supreme Court may not have acting judges because they substantially impair its institutional integrity, then the institutional integrity of all State Supreme Courts has been impaired since Federation. This is not a case about a conferral of a function on a court; it is about State legislation providing for the constitution of a Supreme Court (and providing for it in a manner that has remained substantially unchanged since before Federation). Even so, it is argued, the same principle applies. If the conclusion for which the applicants contend truly followed from the principle, then the principle would require reconsideration. It follows from the terms of Ch III that State Supreme Courts must continue to answer the description of "courts". For a body to answer the description of a court it must satisfy minimum requirements of independence and impartiality. That is a stable principle, founded on the text of the Constitution. It is the principle that governs the outcome of the present case. If State legislation attempted to alter the character of a State Supreme Court in such a manner that it no longer satisfied those minimum requirements, then the legislation would be contrary to Ch III and invalid. For the reasons given above, however, Ch III of the Constitution, and in particular s 72, did not before 1977, and does not now, specify those minimum requirements, either for State Supreme Courts or for other State courts that may be invested with federal jurisdiction. State legislation which empowers the Governor of a State to appoint acting judges to a State Supreme Court does not, on that account alone, deprive the body of the character of a court, or of the capacity to satisfy the minimum requirements of judicial independence. Before and since Federation, such legislation has been common. Minimum standards of judicial independence are (1996) 189 CLR 51. not developed in a vacuum. They take account of considerations of history, and of the exigencies of government. There are sound practical reasons why State governments might need the flexibility provided by a power to appoint acting judges. Judicial independence and impartiality is secured by a combination of institutional arrangements and safeguards. It has already been explained that acting Judges of the Supreme Court of New South Wales are appointed by the same authority as appoints permanent Judges; they take the same judicial oath; they may be removed only by the Governor on an address of both Houses of Parliament; and their remuneration is fixed by an independent tribunal. They are now subject to the scrutiny of the Judicial Commission of New South Wales and the Independent Commission Against Corruption. In the case of a retired federal judge such as Foster AJ, it is difficult to imagine what doubts might reasonably have been entertained about his independence or impartiality, except such as could arise from the renewability of his temporary appointment. This consideration must be evaluated in the wider context mentioned in the preceding paragraph. There are aspects of the position of many permanent judges that could raise questions of at least as much significance. Consider, for example, the matter of judicial promotion. Judges are commonly promoted (by executive governments) within courts or within the judicial hierarchy. Such promotions may involve increased status and remuneration. Throughout the history of this Court, most of its members have arrived here by way of promotion. There may be some people who would say that could erode independence and impartiality. There may be permanent judges for whom judicial promotion would have at least as much attraction as an opportunity to spend another year as an acting judge would have to a 73 or 74 year old former judge. The usual response to such concerns is that a ban on judicial promotion would result in inflexibility and inconvenience; and that the independence and impartiality of judges is shored up by so many systemic and personal factors that this is not, in practice, a decisive objection. The same may be said of the renewability of Foster AJ's appointments. It is not a matter to be dismissed lightly, but in the wider context it is not decisive. It is difficult to legislate against the pursuit of self-interest, and neither s 72 of the Constitution nor any State or federal Act seeks to do so. A permanent judge with prospects of advancement might be seen by some observers as being at least as likely to seek to please the executive as a temporary judge with prospects of re-appointment. Issues such as these are generally dealt with by standards of professional behaviour, not legislative prescription. As the Attorney-General of Queensland pointed out in written submissions, ultimately what stands between any judge and the temptation of executive preferment is personal character. Views may differ on the circumstances in which appointments of acting judges are desirable or appropriate, but it is difficult to legislate for such circumstances. Let it be assumed, for example, that executive governments ought not to use the power of appointing acting judges to evade the responsibility of providing an adequately resourced court system. That proposition would probably command general acceptance; but it has large political and economic content, and corresponding uncertainty of application. Acceptance of that view does not lead to the conclusion that s 37 of the Supreme Court Act is invalid; indeed it raises issues that may not be justiciable. They are certainly not issues that are capable of being resolved on the information available to this Court as to the circumstances of the appointments of Foster AJ. It is possible to imagine extreme cases in which abuse of the power conferred by s 37 could so affect the character of the Supreme Court that it no longer answered the description of a court or satisfied the minimum requirements of independence and impartiality. It is, however, a basic constitutional principle that the validity of the conferral of a statutory power is not to be tested by reference to "extreme examples and distorting possibilities"29. Possible abuse of power is rarely a convincing reason for denying its existence. The challenge to the validity of s 37, and thus to the appointments of Foster AJ, fails. Conclusion I agree with the answers to questions, and orders, proposed by Gummow, 29 Shaw v Minister for Immigration and Multicultural Affairs (2003) 218 CLR 28 at Crennan GUMMOW, HAYNE AND CRENNAN JJ. There are two issues that arise in the two matters in this Court30, and also in an application for special leave to appeal to this Court that was heard at the same time31. The first issue raises fundamental questions about the operation of Ch III of the Constitution. It concerns the validity of the legislation permitting appointment of acting judges of the Supreme Court of New South Wales. It is with this issue that these reasons deal first. Acting judges The Honourable Michael Leader Foster was, from 1987 until his retirement on 26 November 1998, a judge of the Federal Court of Australia. By successive appointments, each made by commission under the public seal of the State, Mr Foster was appointed to act as a judge of the Supreme Court of New South Wales for terms of 12 months commencing on 31 May 1999, 2000, 2001 and 2002. Between March and May 2002, during the third of these periods of appointment, he tried proceedings brought in the Supreme Court of New South Wales by the Australian Securities and Investments Commission ("ASIC") against Mr Forge and others in which ASIC alleged the commission of contraventions of certain civil penalty provisions of corporations legislation. On 28 August 2002, during the fourth period of appointment, Foster AJ delivered judgment in those proceedings. Were the appointments of Foster AJ that were in force when these proceedings were heard and determined validly made? It will be necessary, later, to identify the relevant civil penalty provisions more precisely when considering the second of the issues that arise in this Court but that is a task that need not be undertaken in considering the validity of the appointments of Foster AJ. For the moment, it suffices to recognise that the trial 30 Matter No C7 of 2005 is a proceeding instituted in the original jurisdiction of this Court against Australian Securities and Investments Commission, the State of New South Wales and the Commonwealth and in which the first and second defendants demurred to the whole of the plaintiffs' statement of claim. In Matter No C12 of 2005, part of a matter pending in the Supreme Court of New South Wales was removed into this Court pursuant to s 40 of the Judiciary Act 1903 (Cth) and questions were reserved for the opinion of the Full Court. 31 Against the orders of the Court of Appeal of the Supreme Court of New South Wales made on 7 December 2004 in Forge v Australian Securities and Investments Commission (2004) 213 ALR 574. Crennan was an exercise of federal jurisdiction, the proceedings instituted by ASIC being proceedings brought by or on behalf of the Commonwealth32. Each appointment of Foster AJ was made in reliance upon the provisions of s 37 of the Supreme Court Act 1970 (NSW) which, in its terms, permits the appointment of a qualified person to act as a judge for a time not exceeding 12 months specified in the commission. Mr Foster was a "qualified person" because he had been a judge of the Federal Court of Australia33. Section 37 provides: "(1) The Governor may, by commission under the public seal of the State, appoint any qualified person to act as a Judge, or as a Judge and a Judge of Appeal, for a time not exceeding 12 months to be specified in such commission. In subsection (1) qualified person means any of the following persons: a person qualified for appointment as a Judge of the Supreme Court of New South Wales, a person who is or has been a judge of the Federal Court of Australia, a person who is or has been a judge of the Supreme Court of another State or Territory. (3) A person appointed under this section shall, for the time and subject to the conditions or limitations specified in the person's commission, have all the powers, authorities, privileges and immunities and fulfil all the duties of a Judge and (if appointed to act as such) a Judge of Appeal. (3A) The person so appointed may, despite the expiration of the period of the person's appointment, complete or otherwise continue to deal with any matters relating to proceedings that have been heard, or partly heard, by the person before the expiration of that period. (3B) The person so appointed is entitled to be paid remuneration in accordance with the Statutory and Other Offices Remuneration Act 32 Constitution, s 75(iii); Judiciary Act, s 39(2); Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559. 33 Supreme Court Act 1970 (NSW), s 37(2)(b). Crennan 1975. The remuneration payable to an acting Judge is to be paid to the acting Judge so long as his or her commission continues in force. (4) A retired Judge of the Court or of another court in New South Wales (including a retired judicial member of the Industrial Commission or of the Industrial Relations Commission) may be so appointed even though the retired Judge has reached the age of 72 years (or will have reached that age before the appointment expires), but may not be so appointed for any period that extends beyond the day on which he or she reaches the age of 75 years. (4A) A person who is or has been a judge of the Federal Court of Australia or of the Supreme Court of another State or Territory may be so appointed even though that person has reached the age of 72 years (or will have reached that age before the appointment expires) but may not be so appointed for any period that extends beyond the day on which he or she reaches the age of 75 years. The conditions or limitations specified in a commission under this section may exclude the whole or any part of the period of appointment from being regarded as prior judicial service (within the meaning of section 8 of the Judges' Pensions Act 1953) by the person. The provisions of section 36(4) and (5) apply to an acting Judge who acts as a Judge of Appeal in the same way as they apply to a Judge who acts as an additional Judge of Appeal."34 The parties who contended that the appointments of Foster AJ, for the terms ending 30 May 2002 and 30 May 2003, were invalid (Mr Forge and others) alleged that s 37 is wholly invalid. Their basic proposition was that the Supreme Court of New South Wales "as an institution must be made up of full-time permanent judges with security of tenure". But, in the end, these parties did not appear to stake all upon acceptance of this basic proposition. Rather, recognising that both before and after federation, legislation establishing the Supreme Courts of all of the colonies, and later all of the States, made provision for appointment of acting judges35, they accepted that some provision for acting appointments 34 Some questions about the construction and operation of sub-s (3A) were touched on in oral argument. Those questions need not be and are not addressed in these reasons. 35 See, for example, as to New South Wales: The Australian Courts Act 1828 (Imp) (9 Geo 4 c 83), s 1; Supreme Court and Circuit Courts Act 1900 (NSW), ss 13-15. Crennan might be constitutionally valid. They contended, however, that the power given by s 37 was not limited "as to numbers and the circumstances in which acting judges may be appointed". They then further contended that s 37 could not be read down because, so they submitted, no satisfactory criterion could be devised which would sufficiently confine exceptions to the basic proposition that the court must be made up of full-time permanent judges with security of tenure. In particular, the parties alleging invalidity contended that qualitative criteria governing the appointment of acting judges, like "in special circumstances", or "for temporary needs or purposes", should be rejected and could not be applied to read down s 37 and thus confine the power to appoint acting judges. As will later be explained, none of the opposite parties, and none of the Attorneys-General who intervened (all of whom supported the validity of s 37 and the appointments of Foster AJ), contended that the power given by s 37 was unlimited. All accepted, correctly, that properly construed, the power to appoint acting judges under s 37 of the Supreme Court Act was not unlimited. The question in these matters, they submitted, is whether those limits were transgressed, and they contended that they were not. The questions that arise in connection with this first issue are questions which touch upon fundamental aspects of the structure of government. They concern the way in which the Supreme Court of a State is constituted and therefore concern the structure of the judicial branch of government. As was pointed out in D'Orta-Ekenaike v Victoria Legal Aid36: "reference to the 'judicial branch of government' is more than a mere collocation of words designed to instil respect for the judiciary. It reflects a fundamental observation about the way in which this society is governed." See also Supreme Court Act 1890 (Vic), s 14; Constitution Act 1975 (Vic), s 81; Supreme Court Act 1855-56 (SA), s 5; Supreme Court Act 1935 (SA), s 11; Supreme Court Act 1867 (Q), s 33; Supreme Court Act 1892 (Q), s 12; Supreme Court of Queensland Act 1991 (Q), s 14; Supreme Court Act 1880 (WA), s 12 (permitting the appointment of Commissioners); Supreme Court Act 1935 (WA), s 11. As to Tasmania, The Australian Courts Act 1828 applied to Van Diemen's Land. (The Supreme Court Act 1887 (Tas) made no provision for appointment of acting judges.) (2005) 79 ALJR 755 at 761 [32] per Gleeson CJ, Gummow, Hayne and Heydon JJ; 214 ALR 92 at 99. Crennan They are questions that will require examination of whether the institutional integrity of an essential element of the judicial branch of government has been compromised. Chapter III Although the issue concerns the constitution of a State Supreme Court it is necessary to begin the examination in the terms of the Commonwealth Constitution and Ch III in particular. The general considerations which inform Ch III of the Constitution were identified in R v Kirby; Ex parte Boilermakers' Society of Australia37. Central among those considerations is the role which the The ultimate judicature must play in a federal form of government. responsibility of deciding upon the limits of the respective powers of the integers of the federation must be the responsibility of the federal judicature. That is why, as was pointed out in Boilermakers38, "[t]he demarcation of the powers of the [federal] judicature, the constitution of the courts of which it consists and the maintenance of its distinct functions become ... a consideration of equal importance to the States and the Commonwealth". But it also follows39 that "[t]he organs to which federal judicial power may be entrusted must be defined, the manner in which they may be constituted must be prescribed and the content of their jurisdiction ascertained". It is these considerations that explain the provisions of Ch III of the Constitution. And it is these considerations that explain why it has been so long established by the decisions of this Court that it is beyond the competence of the federal Parliament to invest with any part of the judicial power of the Commonwealth any body or person, except a court created pursuant to s 71 of the Constitution and constituted in accordance with s 72, or another "court" brought into existence by a State or Territory that can be invested with federal jurisdiction. Section 73 provides that this Court has jurisdiction "with such exceptions and subject to such regulations as the Parliament prescribes" to hear and determine appeals from all judgments, decrees, orders, and sentences "of any other federal court, or court exercising federal jurisdiction; or of the Supreme Court of any State". No exception or regulation prescribed by the Parliament may prevent this Court from hearing and determining any appeal from the Supreme Court of a State in any matter "in which at the establishment of the Commonwealth an appeal lies from such Supreme Court to the Queen in (1956) 94 CLR 254 at 267-268 per Dixon CJ, McTiernan, Fullagar and Kitto JJ. (1956) 94 CLR 254 at 268. 39 R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 268. Crennan Council". It is plain, then, as was recognised in Kable v Director of Public Prosecutions (NSW)40, that Ch III not only assumes, it requires, that there will always be a court in each State which answers the constitutional description "the Supreme Court of [a] State". Chapter III also assumes, but it may not require, that there will, from time to time, be courts other than the Supreme Courts of the States, in which federal jurisdiction may be invested. Thus, s 77(iii) gives power to the Parliament to make laws with respect to any of the matters mentioned in s 75 or s 76 "investing any court of a State with federal jurisdiction". It is in reliance on that power that s 39(2) of the Judiciary Act 1903 (Cth) provides that: "The several Courts of the States shall within the limits of their several jurisdictions, whether such limits are as to locality, subject-matter, or otherwise, be invested with federal jurisdiction, in all matters in which the High Court has original jurisdiction or in which original jurisdiction can be conferred upon it ..." What is meant in s 71 of the Constitution by "courts" in the expression "such other courts as it invests with federal jurisdiction"? What is meant in s 77(iii) by "court" in the expression "any court of a State"? In Kotsis v Kotsis41 and Knight v Knight42, consideration was given to whether the reference in s 39(2) of the Judiciary Act to "Courts", and the reference to "court" in s 77(iii) of the Constitution, should be read as extending to permit the exercise of federal jurisdiction by an officer of a State court who was not a part of the court. In Kotsis v Kotsis, this Court held that the Supreme Court of New South Wales, as constituted by the then applicable State legislation43, consisted of the judges of the Court and that it did not include other officers of the Court, even if those officers were authorised to exercise part of its jurisdiction by the relevant State laws. It followed, so the Court held, that the jurisdiction invested in the Supreme Court of New South Wales by s 39(2) of the Judiciary Act could be exercised only by the judges of the Court, not by a Deputy Registrar who was not identified, by the relevant State legislation, as part of the Court. Knight v Knight reached like conclusions with respect to a Master of the Supreme Court of South Australia. (1996) 189 CLR 51. (1970) 122 CLR 69. (1971) 122 CLR 114. 43 Supreme Court and Circuit Courts Act 1900 (NSW), Matrimonial Causes Act 1899 (NSW) and Administration of Justice Act 1968 (NSW). Crennan Kotsis v Kotsis and Knight v Knight were overruled in The Commonwealth v Hospital Contribution Fund44. This Court held that "court of a State" in s 77(iii) of the Constitution and "Courts of the States" in s 39(2) of the Judiciary Act meant the relevant court "as an institution"45, not the persons of which it is composed. Thus, regardless of whether a State court was constituted only by its judges, or was constituted by its judges and Masters, federal jurisdiction invested in the court could be exercised by a Master, Registrar or other officer of the court in whom the State legislation reposed the task, at least where the exercise of the jurisdiction by such a person remained subject to the supervision of the judges of the court on review or appeal46. In this, and in other related respects, reference is often made to the aphorism that when the federal Parliament makes a law investing federal jurisdiction in a State court, the Parliament "must take the State court as it finds it". This proposition, most often associated with Le Mesurier v Connor47, but originating in the reasons of Griffith CJ in Federated Sawmill, Timberyard and General Woodworkers' Employees' Association (Adelaide Branch) v Alexander48, should not be misunderstood. The provisions of Ch III do not give power to the federal Parliament to affect or alter the constitution or organisation of State courts49. It may be accepted that the constitution and organisation of State courts is a matter for State legislatures. In that sense, the federal Parliament having no power to alter either the constitution or the organisation of a State court, the federal Parliament must take a State court "as it finds it". It does not follow, however, that the description which State legislation may give to a particular body concludes the separate constitutional question of whether that body is a "court" in which federal jurisdiction may be invested. It is only in a "court", as (1982) 150 CLR 49. (1982) 150 CLR 49 at 58 per Gibbs CJ, 59 per Stephen J, 64 per Mason J, 66 per Aickin J, 71 per Wilson J. 46 The Commonwealth v Hospital Contribution Fund (1982) 150 CLR 49 at 64 per (1929) 42 CLR 481 at 495-496 per Knox CJ, Rich and Dixon JJ. (1912) 15 CLR 308 at 313. 49 Le Mesurier v Connor (1929) 42 CLR 481 at 496, 498; Adams v Chas S Watson Pty Ltd (1938) 60 CLR 545 at 554; Peacock v Newtown Marrickville and General Co-operative Building Society No 4 Ltd (1943) 67 CLR 25 at 37; Russell v Russell (1976) 134 CLR 495 at 516, 530, 535, 554; The Commonwealth v Hospital Contribution Fund (1982) 150 CLR 49 at 74 per Brennan J. Crennan that word is to be understood in the Constitution, that federal jurisdiction may be invested. Recognising that to be so reveals an important boundary to the power given to the Parliament by s 77(iii). The Parliament may not make a law investing federal jurisdiction in a body that is not a federal court created by the Parliament or that is not a "court" of a State or Territory. But there is another and different proposition that is to be drawn from Ch III which has significance for State legislation concerning State Supreme Courts. Because Ch III requires that there be a body fitting the description "the Supreme Court of a State", it is beyond the legislative power of a State so to alter the constitution or character of its Supreme Court that it ceases to meet the constitutional description. One operation of that limitation on State legislative power was identified in Kable. The legislation under consideration in Kable was found to be repugnant to, or incompatible with, "that institutional integrity of the State courts which bespeaks their constitutionally mandated position in the Australian legal system"50. The legislation in Kable was held to be repugnant to, or incompatible with, the institutional integrity of the Supreme Court of New South Wales because of the nature of the task the relevant legislation required the Court to perform. At the risk of undue abbreviation, and consequent inaccuracy, the task given to the Supreme Court was identified as a task where the Court acted as an instrument of the Executive51. The consequence was that the Court, if required to perform the task, would not be an appropriate recipient of invested federal jurisdiction. But as is recognised in Kable, Fardon v Attorney-General (Qld)52 and North Australian Aboriginal Legal Aid Service Inc v Bradley53, the relevant principle is one which hinges upon maintenance of the defining characteristics of a "court", or in cases concerning a Supreme Court, the defining characteristics of a State Supreme Court. It is to those characteristics that the reference to "institutional integrity" alludes. That is, if the institutional integrity of a court is distorted, it is because the body no longer exhibits in some relevant respect those defining characteristics which mark a court apart from other decision-making bodies. 50 Fardon v Attorney-General (Qld) (2004) 78 ALJR 1519 at 1539 [101] per Gummow J; 210 ALR 50 at 78. 51 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 124 per McHugh J, 134 per Gummow J. (2004) 78 ALJR 1519; 210 ALR 50. (2004) 218 CLR 146 at 164 [32]. Crennan It is neither possible nor profitable to attempt to make some single all-embracing statement of the defining characteristics of a court. The cases concerning identification of judicial power reveal why that is so. An important element, however, in the institutional characteristics of courts in Australia is their capacity to administer the common law system of adversarial trial. Essential to that system is the conduct of trial by an independent and impartial tribunal54. It by no means follows, however, that the only means of securing an independent and impartial Supreme Court is to require that the court is made up of none other than full-time permanent judges with security of tenure. This proposition, cast in absolute and universal terms, is not fundamentally different from a proposition that a State Supreme Court must be constituted by judges who have the same security of tenure as s 72 of the Constitution provides in respect of the Justices of this Court and of the other courts created by the Parliament. Yet Ch III makes no explicit reference to the appointment, tenure or remuneration of judges of State courts. Rather, s 71 refers to "such other courts as it [the Parliament] invests with federal jurisdiction", s 77(iii) speaks of "investing any court of a State with federal jurisdiction", and s 73 makes a number of references to the "Supreme Court" of a State. Questions of appointment, tenure and remuneration of judges of State courts are dealt with in Ch III only to whatever extent those subjects are affected by the identification of the repositories of invested federal jurisdiction as "any court of a State" and the identification of a court from whose judgments, decrees, orders and sentences an appeal may lie to this Court as "the Supreme Court of [a] State". As explained in Ebner v Official Trustee in Bankruptcy55, effect has been given to the fundamental importance which is attached to the principle that a court must be independent and impartial by the development and application of the apprehension of bias principle. Even the appearance of departure from the principle that the tribunal must be independent and impartial is prohibited lest the integrity of the judicial system be undermined. As further explained in Ebner56, the apprehension of bias principle admits of the possibility of human frailty and its application is as diverse as human frailty. Thus when reference is made to the 54 Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at 343 [3] per Gleeson CJ, McHugh, Gummow and Hayne JJ. (2000) 205 CLR 337 at 345 [7]-[8] per Gleeson CJ, McHugh, Gummow and (2000) 205 CLR 337 at 345 [7]-[8] per Gleeson CJ, McHugh, Gummow and Crennan institutional "integrity" of a court, the allusion is to what The Oxford English Dictionary describes57 as "[t]he condition of not being marred or violated; unimpaired or uncorrupted condition; original perfect state; soundness". Its antithesis is found in exposure, or the appearance of exposure, to human frailties of the kinds to which reference was made in Ebner. In applying the apprehension of bias principle to a particular case, the question that must be asked is whether a judicial officer might not bring an impartial mind to the resolution of a question in that case. And that requires no prediction about how the judge will in fact approach the matter. Similarly, if the question is considered in hindsight, the test is one which requires no conclusion about what factors actually influenced the outcome which was reached in the case. No attempt need be made to inquire into the actual thought processes of the judge; the question is whether the judge might not (as a real and not remote possibility rather than as a probability) bring an impartial mind to the resolution of the relevant question. The apprehension of bias principle has its application in particular cases. No unthinking translation can be made from the detailed operation of the apprehension of bias principle in particular cases to the separate and distinct question about the institutional integrity of a court. But the apprehension of bias principle is one which reveals the centrality of considerations of both the fact and the appearance of independence and impartiality in identifying whether particular legislative steps distort the character of the court concerned. As noted at the outset of these reasons, the immediate issue is the validity of the appointments of Foster AJ. That depends upon whether s 37 of the Supreme Court Act was validly engaged and it is necessary first to construe s 37. The construction of s 37 The better construction of the Supreme Court Act is that it distinguishes between appointment as a judge (or Chief Justice) or as a judge of appeal (or President), and appointment to act as a judge, or judge of appeal, for a term not to exceed 12 months. Appointment as a judge (or Chief Justice)58, or as a judge of appeal (or President)59, is appointment to an office which, subject to removal on an address of both Houses of the State Parliament60, is terminated only upon 57 The Oxford English Dictionary, 2nd ed (1989), vol 7 at 1066. 58 Pursuant to s 26. 59 Pursuant to s 31. Crennan attainment of the retirement age of 72 years, sooner resignation by the office holder, or death. The appointee's remuneration may not be reduced during office61. By contrast, s 37 of the Supreme Court Act provides for short-term appointments to act as a judge: the term may not exceed 12 months. During that term the appointee may not be removed from office, save on an address of both Houses of the State Parliament62, and the appointee's remuneration may not be reduced63. There is, however, a real and radical difference between an appointment to act as a judge for a term not longer than 12 months, and an appointment, as a judge, until a statutorily determined age of retirement (in this case 72 years of age64). Of course, the older the person appointed as judge at the time of appointment, the less the difference may appear to matter. But even if it is assumed, contrary to experience, that a person might be appointed a judge when that person has less than 12 months before attaining the age of retirement, the person so appointed as judge is not eligible for reappointment to that office after the appointment expires by effluxion of time. By contrast, a person appointed under s 37 to act as a judge, if aged less than 72, is eligible for permanent appointment as a judge and, if aged less than 75, is eligible for reappointment as an acting judge. The outer limit to reappointment as an acting judge is that the appointee's term may not extend beyond the day that person turns 75 years of age65. It is the possibility of permanent appointment, and the possibility of reappointment as an acting judge, which marks the two cases of appointment as a judge and appointment to act as a judge as radically different. Given that it distinguishes between acting and permanent appointments in the way described, the Supreme Court Act would not easily be read as permitting the appointment of so few persons as judges, and so many to act as judges, as would permit the conclusion that the court was predominantly, or chiefly, composed of acting judges. On the proper construction of the Act the power to appoint acting judges under s 37 would not extend to authorising the making of And none of New South Wales, ASIC, the so many appointments. 60 Constitution Act 1902 (NSW), s 53. 61 Supreme Court Act, s 29(2). 62 Constitution Act 1902, s 53(5); Judicial Officers Act 1986 (NSW), s 41. 63 Supreme Court Act, s 37(3B). 64 Judicial Officers Act, s 44(1). 65 Supreme Court Act, s 37(4) and (4A). Crennan Commonwealth or the interveners submitted that the Supreme Court Act should be read as permitting such an exercise of the power under s 37 to appoint acting judges. All accepted that the power to appoint acting judges was limited at least to this extent. Some contended that this was a conclusion that followed from the words of the Act; some accepted that constitutional considerations reinforced or required that conclusion. No matter whether the conclusion, that s 37 does not give unlimited power to make acting appointments, is seen as following from the words of the Act, or as reinforced or required by constitutional considerations, it is a conclusion that proceeds from an unstated premise about what constitutes a "court". Thus, the conclusion may proceed from a premise that a court, or at least the Supreme Court, of a State must principally be constituted by permanent judges (who have tenure of the kind for which the Act of Settlement66 provided: appointment during good behaviour for life, or, now, until a set retirement age, with no diminution of remuneration during tenure). Or the conclusion may proceed from a premise that is stated at a higher level of abstraction: that the courts, and in particular the Supreme Court, of a State must be institutionally independent and impartial. The first statement of the premise may be seen as focusing upon quantitative considerations. On what terms are most of the judges appointed? The second statement of the premise may be seen as pointing to qualitative rather than quantitative considerations. But both statements of the relevant premise rest ultimately upon considerations of the fact and appearance of institutional independence and impartiality. The former statement focuses upon institutional independence and impartiality by emphasising the particular steps taken in the Act of Settlement to ensure judicial independence from the Executive: steps replicated in legislation establishing all the Supreme Courts of the colonies and the States. But Act of Settlement terms regulating tenure and security of remuneration are not the only statutory and other principles which support judicial independence and impartiality. Reference has already been made to the apprehension of bias principle – a principle of great importance in reinforcing the impartiality of the courts. And judicial independence refers not only to independence from the Executive, it refers to independence from other sources of influence. Thus a comprehensive statement of principles supporting judicial independence would have to take account of the principles governing the immunity of judges from suit for judicial acts67. While it is not necessary to 66 12 & 13 Wm III c 2. 67 D'Orta-Ekenaike v Victoria Legal Aid (2005) 79 ALJR 755 at 762-763 [40] per Gleeson CJ, Gummow, Hayne and Heydon JJ; 214 ALR 92 at 101-102; Crennan consider the detail of those rules, it will be recalled that different rules developed in respect of courts of record from those applying to inferior courts and that the development of the law relating to judicial immunity was bound up with the law relating to excess of jurisdiction and when a judicial decision was open to collateral attack68. That a judge is immune from suit serves a number of purposes, not least the need for finality of judicial decisions. But it is also a principle which forecloses the assertion that the prospect of suit may have had some conscious or unconscious effect on the decision-making process or its outcome. Further, if attempting to state comprehensively the measures that have been taken to support judicial independence, it would be necessary to take account of not only the arrangements for remuneration of judges while in office but also the provision made for payment of pensions on retirement. The "remuneration", which s 72(iii) of the Constitution states shall not be diminished during continuance in office, includes non-contributory pension plan entitlements which accrue under the federal judicial pensions statute69. Provision is made for judicial pensions for a number of reasons. One not insignificant reason is to reduce, if not eliminate, the financial incentive for a judge to seek to establish some new career after retirement from office. As was pointed out in argument, it may otherwise be possible to construe what a judge does while in office as being affected by later employment prospects. No doubt the provisions that have been made to govern the security of both the tenure and the remuneration of judges are important in securing judicial independence and impartiality. But those provisions take their place in a much wider setting of principles that have been established or enacted and which also contribute to the maintenance of both the fact and the appearance of judicial independence and impartiality. For these reasons it is more useful to identify the premise that lies behind the contention that s 37 does not give an unlimited power to appoint acting judges as the more abstract premise described earlier: that the courts, and in particular the Supreme Court, of a State must be, and be seen to be, institutionally independent and impartial. Indeed, this statement of Holdsworth, "Immunity for Judicial Acts", (1924) Journal of the Society of Public Teachers of Law 17; Holdsworth, A History of English Law, (1924), vol 6 at 68 See, for example, Rajski v Powell (1987) 11 NSWLR 522. 69 Austin v The Commonwealth (2003) 215 CLR 185 at 235 [72], 261 [155] per Gaudron, Gummow and Hayne JJ, 303 [288] per Kirby J. Crennan the relevant premise is no more than the particular application of a more general premise identified in Bradley70: "that a court capable of exercising the judicial power of the Commonwealth [must] be and appear to be an independent and impartial tribunal". It follows that, although these reasons are principally directed to the position of the Supreme Courts of the States, the conclusions reached about those courts would apply equally to the Supreme Courts of the Territories. The last matter that should be mentioned in connection with identifying the premise that lies behind the conclusion that s 37 does not give an unlimited power to make acting appointments is that to allow any valid operation for s 37 denies the central tenet of the arguments advanced by those contending the provision is invalid. Those parties contended that the Supreme Court of New South Wales "as an institution must be made up of full-time permanent judges with security of tenure". Both those asserting invalidity and those supporting validity referred to various overseas sources in aid of their argument. In the end, however, overseas analogies provide little sure guidance to the resolution of the issues that must now be considered and such references may even be apt to mislead. First, they may serve to obscure the particular historical and governmental setting in which the issues that now arise in this Court must be decided. Secondly, they are, in many cases, the product of interpreting and applying the text of particular constitutional, legislative, or international instruments. To take only two of the several examples given in argument, the recorder system in England and Wales cannot be understood without paying adequate attention to the historical distinctions between the Royal Courts and the Quarter Sessions and other inferior courts in which, before the Courts Act 1971 (UK), recorders sat. Nor can the several decisions made about the validity of appointment of temporary or part-time judicial officers in the Scottish judicial system be understood except as an application of the relevant European principles. The most that can be derived from overseas decisions is that impartiality and integrity are generally seen as essential characteristics of a court. Rather than examining those overseas decisions in detail, attention must be focused upon the consequences of the constitutional recognition in, and requirement of, Ch III, that there is and remain in each State the Supreme Court of that State. It is convenient to deal now with three points that emerged at various times in the course of argument: first, a point about the position of courts of summary jurisdiction and the investing of federal jurisdiction in those courts; second, a point about the numbers of acting appointments made; and third, a (2004) 218 CLR 146 at 163 [29]. Crennan point about the qualifications for appointment as an acting judge. Each was said to bear upon whether any exception should be admitted to the proposition that the judges of the Supreme Court of a State must all be full-time permanent appointees with security of tenure. Each was said to bear upon the ambit of any exception to that rule. Courts of summary jurisdiction Both before and long after federation, courts of summary jurisdiction have been constituted by Justices of the Peace or by stipendiary magistrates who formed part of the colonial or State public services. As public servants, each was generally subject to disciplinary and like procedures applying to all public servants. Thus, neither before nor after federation have all State courts been constituted by judicial officers having the protections of judicial independence afforded by provisions rooted in the Act of Settlement and having as their chief characteristics appointment during good behaviour and protection from diminution in remuneration. That being so, if the courts of the States that were, at federation, considered fit receptacles for the investing of federal jurisdiction included courts constituted by public servants, why may not the Supreme Court of a State be constituted by an acting judge? The question just posed assumes that all courts in a hierarchy of courts must be constituted alike. In particular, it assumes that inferior State courts, particularly the courts of summary jurisdiction, subject to the general supervision of the Supreme Court of the State, through the grant of relief in the nature of prerogative writs and, at least to some extent, the process of appeal, must be constituted in the same way as the Supreme Court of that State. Yet it is only in relatively recent times that the terms of appointment of judicial officers in inferior courts have come to resemble those governing the appointment of judges of Supreme Courts. History reveals that judicial independence and impartiality may be ensured by a number of different mechanisms, not all of which are seen, or need to be seen, to be applied to every kind of court. The development of different rules for courts of record from those applying to inferior courts in respect of judicial immunity and in respect of collateral attack upon judicial decisions shows this to be so. The independence and impartiality of inferior courts, particularly the courts of summary jurisdiction, was for many years sought to be achieved and enforced chiefly by the availability and application of the Supreme Court's supervisory and appellate jurisdictions and the application of the apprehension of bias principle in particular cases. But by contrast, the independence and impartiality of a State Supreme Court cannot be, or at least cannot so readily be, achieved or enforced in that way. Rather, the chief institutional mechanism for achieving those ends, in the case of the Supreme Crennan Courts, has been the application of Act of Settlement terms of appointment to the Court's judges coupled with rules like the rules about judicial immunity mentioned earlier in these reasons. That different mechanisms for ensuring independence and impartiality are engaged in respect of inferior courts from those that are engaged in respect of State Supreme Courts is, no doubt, a product of history: not least the historical fact that the inferior courts of England were often constituted by persons who were not lawyers or, if legally trained, held no permanent full-time appointment to office. But the differences that may be observed as a matter of history between, on the one hand, the inferior courts in Australia and their English forbears and, on the other, the colonial, and later State, Supreme Courts, do not deny the central importance of the characteristics of real and perceived independence and impartiality in defining what is a "court" within the meaning of the relevant provisions of Ch III. The observed differences do no more than deny that Act of Settlement terms of appointment are defining characteristics of every "court" encompassed by the expression, in s 77(iii), "any court of a State". But the existence of these observed differences does not necessarily mean that particular mechanisms for ensuring the independence and impartiality of State Supreme Courts may not be defining characteristics of those, constitutionally recognised and required, bodies. In examining what are those defining characteristics, it is necessary to consider whether Act of Settlement terms of appointment for all judges constituting a State Supreme Court are essential to the institutional integrity of those courts. Numbers of acting appointments Although those asserting the invalidity of s 37 denied that there could ever validly be an acting appointment, much emphasis was given in their oral arguments to the number of persons who had been appointed as acting judges of the Supreme Court of New South Wales between 2001 and 2004. Some of those persons were appointed for less than 12 months; some, like Foster AJ, were appointed for successive terms of 12 months. At 31 December of each of the years 2001 to 2004, at least five persons held a commission to act as a judge and at least a further three held a commission to act as a judge of appeal. But it is by no means clear what significance those asserting invalidity sought to attach to this information. As noted earlier, the position adopted by those asserting invalidity was that s 37 was wholly invalid and that, accordingly, no acting appointment could be made. The most that can be gleaned from the information about the numbers appointed pursuant to the power given by s 37 is that it appears to have been used in such a way that during the years 2001 to 2004 there were always some acting judges. What does not appear, however, is how often those persons sat as judges or why it may have been thought necessary or desirable to appoint them to act. And unless some quantitative criterion is Crennan adopted as the limit on the power given by s 37, the number appointed, standing alone, is of little relevance to the problem that now arises, it not being contended that the Court was predominantly or chiefly constituted by acting judges. Rather, all that seemed to be drawn from the number of acting judges who had been appointed was that that number was not insignificant when compared with the number of permanent appointees. No quantitative criterion should be adopted as limiting the exercise of power under s 37. Any such criterion would inevitably be arbitrary in its content and application. To explain why that is so, it is as well to notice some matters of history. For many years it was common for colonial, and later State, legislatures to provide for the number of judges that constituted the Supreme Court of the colony or State concerned. There was no obligation to appoint persons to every office thus created. The statutorily identified number of judges fixed the maximum number that might be appointed. Often, legislation provided for the appointment of a person to act in stead of a judge who was absent on leave, or whether in consequence of sickness or some other reason was temporarily unable to perform the duties of office71. The application of provisions of that kind was, then, limited by the number of permanent office holders and by the occasion for making an acting appointment. But some Australian colonial and State legislation also provided for the appointment of acting judges in addition to the permanent office holders who constituted the court. Early examples of that are to be found in the District Courts Act 1858 (NSW)72 and the Judicial Offices Act 1892 (NSW)73. The application of those provisions was not explicitly limited numerically and the occasion for exercising the power to make an acting appointment was often stated in very general terms. Now it is uncommon for State legislation to fix the number of judges who may be appointed to a Supreme Court. Now the legislation permitting appointment of acting judges is not ordinarily hinged upon absence or incapacity of a serving judge. The Supreme Court Act does not fix the number of judges who may be appointed to the Supreme Court of New South Wales. Section 37 is not hinged upon absence or incapacity of a serving judge. In a large court like the Supreme Court of New South Wales the temporary absence of one judge may have less effect on the work of the court as 71 See, for example, Supreme Court Act 1958 (Vic), s 11. Crennan today, a whole than the temporary absence of a judge in a smaller court. But both at federation and include courts whose the State Supreme Courts membership is not numerous. To hold that no acting judge may be appointed to any State Supreme Court may therefore have large consequences for the work of those smaller courts. Those consequences would be felt not only if, as the Attorney-General for Tasmania submitted, the members of the court were afflicted by some pandemic illness or other disaster, but also if a case were to come before the court in which all or most of the judges were embarrassed. If it is accepted that some acting appointments may lawfully be made under s 37, a quantitative criterion for marking the boundary of permissible appointments would treat the circumstances seen by the appointing authority as warranting the appointment of an acting judge as wholly irrelevant to the inquiry about validity. It would assume that the external observer considering the independence and impartiality of the court as a whole should, or would, ignore why it had been thought necessary to appoint those who had been appointed to act as judges. Thus the necessity presented by sickness, absence for other sufficient cause, or the embarrassment of a judge or judges in one or more particular cases would be treated as irrelevant; all that would matter is how many have been appointed. And that, in turn, presents the question: how would the particular number or proportion of acting judges that would compromise the institutional integrity of the court be fixed? That is a question to which none but an arbitrary answer can be given. Rather than pursue the illusion that some numerical boundary can be set, it is more profitable to give due attention to the considerations that would have to inform any attempt to fix such a boundary: the fact and appearance of judicial independence and impartiality. "Qualified" persons As noted earlier, s 37 of the Supreme Court Act permits appointment of "any qualified person" to act as a judge. Qualified persons extend beyond those who are or have been a judge of the Federal Court of Australia or a judge of the Supreme Court of another State or Territory74, they extend to any "person qualified for appointment as a Judge of the Supreme Court of New South Wales"75. Persons qualified for appointment as a judge of the court are now those who hold or have held "a judicial office" of New South Wales, the Commonwealth, or another State or a Territory76, and legal practitioners of at s 37(2)(b) and (c). s 37(2)(a). s 26(2)(a). Crennan least seven years' standing77. (Reference to the holding of "a judicial office" was added in 2002 by the Courts Legislation Amendment Act 2002 (NSW).) Different considerations affect these different classes of qualified persons. The prospect of appointment as a permanent judge, or reappointment as an acting judge, will most likely bear differently upon those who, at the time of appointment as an acting judge, are judges of the Federal Court or the Supreme Court of another State or Territory from the way in which they bear upon retired judges, judges of other, inferior, courts, or legal practitioners in active practice. The person in active practice may be thought by some to be concerned about prospects of future permanent appointment, or about the effect of what is done while an acting judge upon resumption of practice at the end of the period of appointment. The person who holds some other judicial office may be thought to be concerned about prospects of promotion to the Supreme Court. The retired judge may be thought to be concerned about the prospect of being able to continue to act as a judge beyond retirement and beyond the statutory retiring age with its consequences for continued professional engagement and enjoyment of a larger income. Is the availability of such arguments to be left for consideration under the principle of apprehended bias or are they considerations that bear upon the institutional integrity of the court? Satisfaction of the constitutional description "Supreme Court of [a] State" is not sufficiently met by application of the apprehension of bias principle in particular cases. Kable demonstrates that the institutional integrity of the court must be preserved and that the preservation of that institutional integrity operates as a limit upon State legislative power. The institutional integrity of State Supreme Courts is not inevitably compromised by the appointment of an acting judge. But the institutional integrity of the body may be distorted by such appointments if the informed observer may reasonably conclude that the institution no longer is, and no longer appears to be, independent and impartial as, for example, would be the case if a significant element of its membership stood to gain or lose from the way in which the duties of office were executed. There are circumstances, perhaps many circumstances, in which appointing a serving judge of the Supreme Court of one State to act as a judge of the Supreme Court of another State for a limited time (as, for example, to hear a matter in which the permanent judges of the court would be embarrassed) could, of itself, have no adverse effect on the institutional integrity of the court. It could have no adverse effect on the institutional integrity of the court because the person appointed in the circumstances described would have nothing to gain and nothing to fear. Prospects of permanent appointment or reappointment as an s 26(2)(b). Crennan acting judge would be irrelevant. As a serving judge of another court, the appointee would return to the duties of that office when the task in hand had been performed. Once that possibility (of validly appointing a serving judge of another Supreme Court as an acting judge) is admitted, the absolute proposition advanced by those alleging invalidity is denied. The appointment of a retired judge of the Federal Court or an interstate Supreme Court in the particular circumstances just described could likewise have no adverse effect on the institutional integrity of the court. It could have no adverse effect because, again, the appointment being made in the unusual circumstances of all (or most) permanent judges being embarrassed, and limited to the hearing of one case, the person appointed would have nothing to gain and nothing to fear from the performance of the task confided in that person. Because the circumstances of appointment are unusual and the appointment is limited, there is no immediate prospect of reappointment. As noted earlier, however, the appointment of a legal practitioner to act as a judge for a temporary period, in the expectation that that person would, at the end of appointment, return to active practice, may well present more substantial issues. The difficulty of those issues would be intensified if it were to appear that the use of such persons as acting judges were to become so frequent and pervasive that, as a matter of substance, the court as an institution could no longer be said to be composed of full-time judges having security of tenure until a fixed retirement age. As was said in Bradley78, there may come a point where the series of acting rather than full appointments is so extensive as to distort the character of the court. It is necessary to explain how and why that may be so, if only for the purpose of drawing contrasts with the examples, earlier given, of the appointment of serving or retired judges as acting judges. The practitioner appointed to act as a judge for a temporary period, in the expectation that that person will return to active practice, may be portrayed as standing to gain the advantage of full-time appointment or to suffer detriment if, in the course of performing the duties of office, adverse decisions were made in matters in which those to whom that person would look for work on resumption of practice were engaged. The first of these possibilities is frankly acknowledged when it is said that appointment as an acting judge may allow the assessment of the appointee's "suitability" or "aptitude" for judicial work. And the second set of considerations is no less real (2004) 218 CLR 146 at 164 [32]. Crennan if it is said that appointment as an acting judge may allow the appointee to decide if he or she enjoys judicial work. That is not to say that the importance of these considerations may not be reduced if account is taken of the reasons that lead to the making of an acting appointment. The greater the necessity for the appointment, the less influential on perceptions of impartiality and integrity may be the considerations of the possible frailties of the person or persons appointed. That is, the institutional integrity of the court is less likely to be damaged by response to pressing necessity than it is by the change of character that may be worked by a succession of short-term appointments for no apparent reason other than avoiding the costs associated with making full-time appointments or, perhaps worse, a desire to assess the "suitability" of a range of possible appointees. As is implicit in what is just said, "pressing necessity" refers to some necessity arising from the work of the court, not simply a desire, by the Executive, to avoid the costs of making full-time appointments. In particular, the proposition that a sudden increase in the work of a court may turn out to be "of a temporary nature only"79 will seldom amount to such a pressing necessity. It is an assertion which serves only to obscure first, the fact that "[j]udicial power is exercised as an element of the government of society"80 and secondly, and no less importantly, that "the third great department of government"81 cannot discharge its functions without adequate financial support from the other two departments. Whether, or when, the institutional integrity of the court is affected depends, then, upon consideration of much more than the bare question: how many acting judges have been appointed? Regard must be paid to who has been appointed, for how long, to do what, and, no less importantly, why it has been thought necessary to make the acting appointments that have been made. Those alleging invalidity in the present matter did not seek to make a case founded in any examination of the circumstances that led either to the successive appointments of Foster AJ, or any of the other appointments made at or about the time of his appointments. To the extent that those alleging invalidity sought to make any case separate from and additional to their basic proposition that s 37 is 79 cf Kearney v HM Advocate 2006 SC (PC) 1 at 11 [30]. 80 D'Orta-Ekenaike (2005) 79 ALJR 755 at 761 [32] per Gleeson CJ, Gummow, Hayne and Heydon JJ; 214 ALR 92 at 99. 81 Quick and Garran, The Annotated Constitution of the Australian Commonwealth, (1901) at 719; D'Orta-Ekenaike (2005) 79 ALJR 755 at 761 [33] per Gleeson CJ, Gummow, Hayne and Heydon JJ; 214 ALR 92 at 99-100. Crennan wholly invalid, they did no more than point to the numbers of appointees. For the reasons that have been given, s 37 is not to be read down by reference to some numerical criterion. Section 37 of the Supreme Court Act is not invalid. It is not demonstrated that s 37 was not validly engaged to appoint Foster AJ as an acting judge of the Supreme Court of New South Wales. The first issue tendered for decision in these matters and in the application for special leave should be resolved against those alleging invalidity. Corporations Act 2001 (Cth) – Ch 10 The second issue that arises concerns the construction and validity of the transitional provisions of Ch 10 of the Corporations Act 2001 (Cth). That is the second question reserved for the consideration of the Full Court in that part of the matter pending in the Supreme Court of New South Wales removed into this Court. It is the second question that arises in consequence of the demurrers to the statement of claim in the proceedings instituted by Mr Forge and others in the original jurisdiction of the Court. It is the second issue that arises in the application for special leave to appeal. As noted at the outset of these reasons, ASIC brought proceedings in the Supreme Court of New South Wales against Mr Forge and others alleging contravention of certain civil penalty provisions of corporations legislation. The conduct alleged to constitute the relevant contraventions occurred in April 1998. At that time the applicable corporations legislation was the Corporations Law of New South Wales. That law, the text of which was set out in s 82 of the Corporations Act 1989 (Cth), as in force for the time being, was applied in New South Wales by s 7 of the Corporations (New South Wales) Act 1990 (NSW). In April 1998, s 232 of the Corporations Law of New South Wales provided for the duties and liabilities of officers of corporations. Some of the provisions of s 232 were identified as civil penalty provisions, a term defined then by s 1317DA of the Corporations Law, with the effect that the then provisions of Pt 9.4B of the Law (ss 1317DA to 1317JC) provided for the civil and criminal consequences of contravening any of them or of being involved in the contravention of any of them82. Section 1317EA empowered the court (in this case, the Supreme Court of New South Wales) to make civil penalty orders if satisfied that the person had contravened a civil penalty provision. 82 Corporations Law of New South Wales, s 232(6B). Crennan In April 1998, s 243ZE of the Corporations Law of New South Wales made provisions for the consequences of a public company, or a "child entity"83 of a public company, giving a financial benefit to a related party of that public company. Section 243ZE(5) provided that certain provisions of the section were civil penalty provisions, as defined by s 1317DA, so that Pt 9.4B of the Corporations Law provided for civil and criminal consequences of contravening or of being involved in the contravention of either of them. On 13 March 2000, the Corporate Law Economic Reform Program Act 1999 (Cth) (usually referred to as "CLERP") came into force. CLERP amended the Corporations Act 1989 (Cth) and, by operation of s 7 of the Corporations (New South Wales) Act 1990 (NSW), the amendments made to the Corporations Act 1989 (Cth) operated as amendments of the Corporations Law of New South Wales. The changes made by CLERP included changes to the provisions governing the civil and criminal consequences of contravening civil penalty provisions but also included new provisions about the duties of directors and other officers, and about related party transactions. The old provisions concerning the duties of directors and other officers, concerning related party transactions and regulating the civil and criminal consequences of contravening civil penalty provisions were repealed. CLERP inserted s 1473 into the law set out in s 82 of the Corporations Act 1989 (Cth), and thus, effectively, into the Corporations Law of New South Wales. Section 1473 provided: "(1) Part 9.4B of the old Law continues to apply in relation to: a contravention of a civil penalty provision listed in section 1317DA of the old Law; or an offence committed against one of those civil penalty provisions; despite its repeal. Part 9.4B of the new Law applies in relation to a contravention of a civil penalty provision listed in section 1317E of the new law." On 26 April 2001, ASIC commenced proceedings against Mr Forge and others in the Supreme Court of New South Wales alleging contraventions of ss 232 and 243ZE of the Corporations Law of New South Wales as that Law was in force in April 1998. As is apparent from what has been said earlier, these 83 Defined in Corporations Law of New South Wales, s 243D(2). Crennan proceedings relied upon s 1473 of the Corporations Law operating upon what by then were the repealed sections of the Corporations Law regulating civil penalty proceedings in respect of those contraventions. As noted earlier, the State Corporations Law picked up and applied the Corporations Act 1989 (Cth) as it stood from time to time. The relevant federal Act, CLERP, on its true construction in the light of s 8 of the Acts Interpretation Act 1901 (Cth) did not, by repealing the earlier provisions, affect the continued operation of the provisions so repealed in respect of either the contraventions, or the legal proceedings brought for contravention. The next legislative event of present significance was the enactment of the Corporations (Commonwealth Powers) Act 2001 (NSW) by which certain matters relating to corporations and financial products and services were referred to the Parliament of the Commonwealth for the purposes of s 51(xxxvii) of the Constitution. The matters referred were84 the matters to which "the referred provisions" (being the tabled text of the Corporations Bill 2001 and the Australian Securities and Investments Commission Bill 2001) related, but only to the extent of the making of laws with respect to those matters by including the referred provisions in Acts enacted in the terms, or substantially in the terms, of that identified text. In consequence of that reference, and equivalent references made by other States, the Corporations Act 2001 (Cth) was enacted and came into force on 15 July 2001. The central contention of Mr Forge and others was that although the necessary legislative chain permitting the institution of proceedings alleging contravention remained intact until 14 July 2001, the coming into force of the Corporations Act 2001 (Cth) broke that chain. The consequence, so they asserted, was that there was no matter before the Supreme Court of New South Wales. To examine whether that is so, it is necessary to understand the position as it stood immediately before the coming into force of the Corporations Act 2001 (Cth). At that time, the rights and liabilities of the parties were governed relevantly by s 1317EA of the Corporations Law of New South Wales (repealed but continued in force by s 1473 of the Corporations Law of New South Wales) operating upon ss 232 and 243ZE of that Law which, despite their repeal, were still validly the subject of proceedings founded upon their application at the time of commission of the relevant conduct. The proceedings which had been instituted in the Supreme Court of New South Wales by ASIC were proceedings in federal jurisdiction. The Commonwealth or a person suing on behalf of the Commonwealth (ASIC) was a party. The jurisdiction was that conferred under 84 Corporations (Commonwealth Powers) Act 2001 (NSW), s 4(1). Crennan s 77(iii) of the Constitution by s 39(2) of the Judiciary Act read with s 42(1) of the Corporations (New South Wales) Act 1990 (NSW) (which conferred jurisdiction on the Supreme Court in civil matters arising under the Corporations Law). The power given by s 1317EA of the Corporations Law of New South Wales to grant remedies was picked up and applied in federal jurisdiction by s 79 of the Judiciary Act85. Section 1401 of the Corporations Act 2001 (Cth) was evidently intended to deal with questions of transition from the old co-operative scheme laws to the new Commonwealth corporations legislation. Its provisions, though elaborate, must be set out in full. "(1) This section applies in relation to a right or liability (the pre-commencement right or liability), whether civil or criminal, that: (a) was acquired, accrued or incurred under a provision of the old corporations legislation of a State or Territory in this jurisdiction that was no longer in force immediately before the commencement; and (b) was in existence immediately before the commencement. However, this section does not apply to a right or liability under an order made by a court before the commencement. For the purposes of subsections (3) and (4), the new corporations legislation is taken to include: the provision of the old corporations legislation (with such modifications (if any) as are necessary) under which the pre-commencement right or liability was acquired, accrued or incurred; and the other provisions of the old corporations legislation (with such modifications (if any) as are necessary) that applied in relation to the pre-commencement right or liability. (3) On the commencement, the person acquires, accrues or incurs a right or liability (the substituted right or liability), equivalent to the pre-commencement right or liability, under the provision taken to 85 Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559. Crennan be included in the new corporations legislation by paragraph (2)(a) (as if that provision applied to the conduct or circumstances that gave rise to the pre-commencement right or liability). Note: If a time limit applied in relation to the pre-commencement right or liability under the old corporations legislation, that same time limit (calculated from the same starting point) will apply under the new corporations legislation to the substituted right or liability—see subsection 1402(3). (4) A procedure, proceeding or remedy in respect of the substituted right or liability may be instituted after the commencement under the provisions taken to be included in the new corporations legislation by subsection (2) (as if those provisions applied to the conduct or circumstances that gave rise to the pre-commencement right or liability). Note: For pre-commencement proceedings in respect of substituted rights and liabilities, see sections 1383 and 1384." ASIC rightly submitted that the effect of s 1401 of the Corporations Act 2001 (Cth) was, by sub-s (1), to look at, rather than to pick up, the rights and liabilities, inchoate and contingent, as they existed on 14 July 2001, and to label them "pre-commencement rights or liabilities". By sub-s (2), s 1401 then incorporated into the new Corporations Act 2001 (Cth), for the limited purposes of sub-s (3), the text of the provisions of the State law which had given rise to the pre-existing rights and liabilities (in this case ss 1317EA and 232 or 243ZE as the case required). Sub-section (3) then created, under the provisions thus incorporated into the new Corporations Act 2001 (Cth), new and substituted rights and liabilities equivalent to the old "as if that provision applied to the conduct or circumstances that gave rise to the pre-commencement right or liability". Section 1401(3) thus provided for present and future consequences as to past acts86. The consequence of this was that on and from 15 July 2001 jurisdiction was conferred on the Supreme Court (again under s 77(iii) of the Constitution) to determine and enforce the newly created rights and liabilities. The matter founding that jurisdiction was, as counsel for ASIC rightly submitted, properly to be identified as the justiciable controversy arising from the disputed contention of ASIC of an entitlement to orders under the substituted, carbon-copy, 86 cf Coleman v Shell Co of Australia Ltd (1943) 45 SR (NSW) 27 at 30; The Commonwealth v SCI Operations Pty Ltd (1998) 192 CLR 285 at 309 [57] per Crennan s 1317EA, for breach of the substituted, carbon-copy, s 232 or s 243ZE, as those sections were incorporated under s 1401(2) and as they are to be applied according to the assumption required by s 1401(3) when it speaks of the relevant provision which is taken to be included in the new corporations legislation applying "as if that provision applied to the conduct or circumstances that gave rise to the pre-commencement right or liability". That is the matter that was before the Supreme Court of New South Wales. Orders For these reasons, the questions reserved should be answered: None of the successive appointments of The Honourable Michael Leader Foster to act as a judge of the Supreme Court of New South Wales was invalid. The proceedings commenced in the Supreme Court of New South Wales by the Australian Securities and Investments Commission against William Arthur Forge and others on 26 April 2001 and tried before Foster AJ constituted a matter arising under a law made by the Parliament within the meaning of s 76(ii) of the Constitution. In the proceeding commenced by writ in this Court, the first and second defendants' demurrers should be allowed and judgment entered for the defendants. An appeal against the orders of Foster AJ was allowed in part by the New South Wales Court of Appeal. The Court of Appeal remitted to the Equity Division issues relating to penalty. That cause pending in the Equity Division was, in part, removed into this Court and the questions answered above were reserved by a Justice to the Full Court. The special leave application against part of the orders of the Court of Appeal was filed out of time. The necessary extension of time should be granted but the application for special leave should be dismissed. In each of the matters, and in the application for special leave to appeal to this Court, there should be an order that William Arthur Forge, Jozsef Endresz, Dawn May Endresz, Allan Paul Endresz and Bisoya Pty Limited pay the costs of the opposing parties, other than those Attorneys-General who intervened in the proceedings in this Court. Kirby 121 KIRBY J. In Ebner v Official Trustee in Bankruptcy87, in words endorsed by six members of this Court in North Australian Aboriginal Legal Aid Service Inc v Bradley88, I observed: "[I]n Australia, the ultimate foundation for the judicial requirements of independence and the requirements of, and implications derived from, Ch III of the Constitution." impartiality rests on The central issue in these proceedings concerns the compatibility with Ch III of the Constitution of provisions of State law for the appointment of acting judges. In recent times, such judges have been appointed, at least in one State, in significant numbers, including to the Supreme Court of the State which enjoys a special status and role in the federal Constitution89. The question for decision is whether State laws, to the extent that they purport to authorise this development, and to allow for commissions to acting judges who in aggregate constitute a significant augmentation of such courts, are valid when measured against the federal constitutional standard, including as it was explained in Kable v Director of Public Prosecutions (NSW)90. The issue now arising is one that has been anticipated in a number of earlier decisions of this Court91. It has been the subject of controversy in judicial92, political93 and professional94 circles. It is an issue of the kind that tests (2000) 205 CLR 337 at 373 [116] (footnote omitted). See also at 363 [81] per (2004) 218 CLR 146 at 163 [27]. 89 Constitution, s 73(ii). (1996) 189 CLR 51. 91 Bradley (2004) 218 CLR 146 at 164 [32]; cf Fardon v Attorney-General (Qld) (2004) 78 ALJR 1519 at 1540 [104]; 210 ALR 50 at 79. 92 Young, "Acting judges", (1998) 72 Australian Law Journal 653; Kirby, "Acting Judges – A Non-theoretical Danger", (1998) 8 Journal of Judicial Administration 69; Drummond, "Towards a More Compliant Judiciary?", (2001) 75 Australian Law Journal 304. 93 See, eg, Ruddock, "Selection and Appointment of Judges", paper delivered at Sydney University, 2 May 2005 at [83]. 94 New South Wales Bar Association, "Bar Tells NSW Government: No More Acting Judges", media release, 29 June 1997; Ray, "The Law and Order Bidding War", (2005) 132 Victorian Bar News 11 at 12. Kirby this Court on a matter of basic constitutional principle. Our predecessors were not found wanting when similarly tested95. In my opinion, the number and type of acting appointments made under the impugned provisions of s 37 of the Supreme Court Act 1970 (NSW) ("the Supreme Court Act") are such as to amount to an impermissible attempt to alter the character of the Supreme Court. They attempt to work a change in a fundamental respect forbidden by the federal Constitution. What was intended as a statutory provision for occasional and exceptional additions to judicial numbers, in special circumstances, has become a means for an institutional alteration that is incompatible with the role of the State courts, particularly the Supreme Court. It has made the courts beholden to the Executive for regular short-term reappointments of core numbers of the judiciary. This is offensive to basic constitutional principle. In Republican Party of Minnesota v White, Stevens J, in the Supreme Court of the United States, explained succinctly the importance of ensuring that judges are removed from any necessity, or inclination, to court the good opinion of the government of the day96: "There is a critical difference between the work of the judge and the work of other public officials. In a democracy, issues of policy are properly decided by majority vote; it is the business of legislators and executives to be popular. But in litigation, issues of law or fact should not be determined by popular vote; it is the business of judges to be indifferent to unpopularity." The time has come for this Court to draw a line and to forbid the practice that has emerged in New South Wales, for it is inimical to true judicial independence and impartiality. When viewed in context, the acting judicial commission in question in these proceedings was not an ad hoc, special one for particular purposes. When the line is crossed, this Court should say so. It should not postpone the performance of its role as guardian of the Constitution. The challenge to the validity of the legislation should be upheld. The facts and the legislation The proceedings: The three proceedings now before this Court are described in other reasons97. It is unnecessary for me to repeat that description. However, for the approach that I take, two additional issues must be identified98. 95 See Lee and Winterton (eds), Australian Constitutional Landmarks, (2003). 96 536 US 765 at 798 (2002). 97 Reasons of Gleeson CJ at [1]-[4]; reasons of Gummow, Hayne and Crennan JJ at [49]-[50]. The decision of the New South Wales Court of Appeal is reported: Forge v Australian Securities and Investments Commission (2004) 213 ALR 574. Kirby History of acting judges: There is no dispute that, from early colonial times, legislation throughout Australia authorised the appointment of acting judges, including to the Supreme Courts99. The Charter of Justice100, which applied in New South Wales, envisaged the appointment of an acting judge instead of another full-time judge to replace an absent judge, until that judge returned, or until a successor had been appointed. When the District Court of New South Wales was established in 1858, its statute provided for judges of that Court to act as judges of the Supreme Court under special commissions for the trial of issues, civil or criminal, at remote places101. The Judicial Offices Act 1892 (NSW) repealed the 1858 provisions. It replaced them with one which extended the power to appoint a District Court judge as an acting judge of the Supreme Court for a time not exceeding six months102. In his Second Reading Speech in support of the Bill that became the 1892 Act, the Attorney-General, Mr Edmund Barton, explained that this provision was intended to be used only for temporary purposes to clear a block in judicial business where cases had been a long time in arrears103. The Supreme Court and Circuit Courts Act 1900 (NSW) replaced the Judicial Offices Act. At the time of Federation, s 13 of the 1900 Act provided a For convenience, I will refer to the parties challenging the validity of the legislation as the plaintiffs, which is their status in the first of the three proceedings before this Court. 98 See below these reasons at [159]. 99 At the time of Federation, all Australian colonies provided for the appointment of acting judges. See Supreme Court and Circuit Courts Act 1900 (NSW), s 13; Supreme Court Act 1890 (Vic), s 14; Acting Judges Act 1873 (Q), s 1; Supreme Court Act 1855-56 (SA), s 5; Supreme Court Act 1880 (WA), s 12; Australian Courts Act 1828 (Imp) (9 Geo IV c 83), s 1. See generally reasons of Heydon J at 100 4 Geo IV c 96, s 1. 101 District Courts Act 1858 (NSW), s 26. 102 Judicial Offices Act 1892 (NSW), s 3. 103 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 21 January 1892 at 4426. Kirby power to appoint acting judges to the Supreme Court104. However, its terms made it clear that any such appointment was to be treated as special105: "(1) The Governor may issue a special commission to any Judge of the District Court, or to any barrister or solicitor of not less than seven years' standing, appointing him – to sit and act as a judge of the Court at Sydney in any one or more jurisdictions of the Court to be specified in such commission, and for a time not exceeding in any case six months to be specified in like manner." (emphasis added) It is true that, pursuant to the 1900 Act, Mr Barton and other persons with the requisite qualifications were appointed acting judges of the Supreme Court of New South Wales. However, the record of such appointments, contained in the frontispiece to the authorised reports of that Court, confirms that such appointments were invariably of three types: (1) A short-term elevation of a District Court judge for particular purposes; (2) A short-term appointment of a qualified senior barrister, with a view to his early confirmation in office as a permanent judge of the Supreme Court when a vacancy arose; or (Rarely) the appointment of some other qualified person for a short period for special purposes, not followed by permanent appointment106. The appointment of a large and steady number of acting judges under the 1900 Act would have been inconsistent both with its explicit reference to the "special" character of the acting judge's commission107 and with the actual practice observed in New South Wales back to the earliest colonial times. 104 See also s 15, providing for acting judges in special jurisdictions. 105 See Walker, The Practice of the Supreme Court of New South Wales at Common Law, 4th ed (1958) at 707. 106 A more recent instance of this class was the appointment of Mr E H St John QC as an acting judge of the Supreme Court of New South Wales: see (1995) 69 Australian Law Journal 307. 107 Confirmed by the requirement, in the case of an Acting Chief Justice, for specially designated reasons to be fulfilled: see Supreme Court and Circuit Courts Act 1900 (NSW), s 12A, introduced in 1912. Kirby The 1989 change: It is not correct to suggest that the nineteenth century practice simply continued. Section 37 of the Supreme Court Act, the meaning and validity of which are in issue in these proceedings, was enacted in 1970. The section is set out in other reasons108. There is no need for me to repeat it. Given that s 22 of the Supreme Court Act makes it clear that the Supreme Court of New South Wales, as "formerly established", is continued, it seems hardly likely that the Parliament of New South Wales intended, by the enactment of s 37, to introduce after 1970 a regime for acting judges that was significantly different from that which had lasted in that Court for so very long. Nothing explicit was said to suggest otherwise, either in s 37 itself or in the Second Reading Speech that accompanied the introduction of the Bill that became the Supreme Court Act. In fact, the practice that had existed in New South Wales for the better part of the first century of Federation continued, substantially unaltered, until 1989. The memoranda in the frontispiece of the authorised reports of the Supreme Court of New South Wales over the twentieth century confirm the recollection that I hold from fifty years of observing, practising before and participating judicially in, that Court. I intrude personal recollection in the same way as Lord Hope of Craighead did in his reasons in Kearney v HM Advocate109. In deciding a challenge to the appointment of a barrister as a temporary judge of the Court of Session in that case, his Lordship drew on his experience as Lord President in Scotland. In matters concerning the composition, practices and traditions of the judiciary, it is inevitable that serving judges will draw on their own memories. However, it is as well to check these recollections against recorded history, lest inclination contaminate the facts. Table 1 sets out the number of appointments as acting judges of the Supreme Court of New South Wales from 1901 to 2004 as recorded in that Court's authorised reports. 108 Reasons of Gleeson CJ at [15]; reasons of Gummow, Hayne and Crennan JJ at 109 2006 SC (PC) 1 at 11 [30]. Kirby TABLE 1 ACTING JUDICIAL APPOINTMENTS, NEW SOUTH WALES 1901–2004 110 Acting appointments are taken from the State Reports (NSW) until 1971 and thereafter from the New South Wales Law Reports. The first figure in each cell indicates the number of commissions as acting judge of the Supreme Court issued during the year. The figure in round brackets indicates the number of acting judges appointed to the Supreme Court. The figure in square brackets indicates the number of acting judges of the Supreme Court who were subsequently appointed as permanent judges of the Supreme Court. Appointments as Acting Chief Justice and Acting President (which all came from permanent judges of the Court) have been disregarded. The appointment of acting judges of appeal is undifferentiated in this Table. From 1987, figures for appointments of acting District Court judges were published in the New South Wales Law Reports. The incidence of such appointments is recorded on the second line of each cell. Kirby A significant change of practice in the appointment of acting judges to the Supreme Court occurred in 1989, in which year no fewer than 12 qualified persons were commissioned as acting judges. This is apparent from Table 1. The practice of making acting appointments in this way continued thereafter. Indeed, in the case of the District Court of New South Wales, appointments of acting judges from the practising legal profession for relatively short intervals became both very common and very numerous, a fact that casts light on the constitutional character of the concurrent acting appointments to the Supreme Court. Two graphs (Figures 1 and 2) show, even more clearly, the change in the appointment of acting judges to the Supreme Court of New South Wales. Figure 1 illustrates the aggregate number of acting judge commissions over the course of the twentieth century. Figure 2 illustrates the duration of such commissions. Kirby FIGURE 1 NUMBERS OF ACTING JUDGES AND ACTING JUDGES OF APPEAL SUPREME COURT OF NEW SOUTH WALES, 1901-2004 FIGURE 2 111 Figure 1 was constructed from the data contained in Table 1. Kirby FIGURE 2 DURATION OF COMMISSIONS OF ACTING JUDGES AND ACTING JUDGES OF APPEAL SUPREME COURT OF NEW SOUTH WALES, 1901-2004 Once this institutional feature of the courts of New South Wales, specifically the Supreme Court, changed and persisted for a time, a danger was presented that the change would become permanent. What had begun, and long persisted, as an exception for a special and limited purpose (ad hoc requirements of particular "delay reduction programmes"113), became entrenched when its advantages to the Executive Government became apparent. As Table 1 and Figure 1 demonstrate, the number of acting judges in the 1990s waxed and waned somewhat. However, by 2000, the numbers settled down to fairly stable figures. Acting judges then came to constitute a settled proportion of the complement of the Supreme Court. A further table, Table 2, produced by the plaintiffs in these proceedings, reveals the position that has now been reached. It describes the pattern of acting appointments to the Supreme Court of New South Wales between January 2000 and January 2005. 112 Like Table 1, Figure 2 was constructed using the authorised reports of the Supreme Court of New South Wales. The precise duration of a relatively small number of commissions of acting judges is not stated in the authorised reports. Such commissions have been omitted from Figure 2. Note that the Figure refers only to the years in which commissions have issued to acting judges. For most years in the period examined (56 out of 104 years) there were no acting judges. 113 Reasons of Gleeson CJ at [25]. Kirby TABLE 2 NUMBERS OF ACTING JUDGES AND ACTING JUDGES OF APPEAL SUPREME COURT OF NEW SOUTH WALES, 2000-2005 Year Judges of Appeal (Excluding President) Judges (Excluding Chief Justice, President and Judges of Appeal) Acting Judges Acting Judges of Appeal Total Acting Judges As at January As at January As at January As at January As at January As at January Total Judges, Judges of Appeal, Acting Judges, Acting Judges of Appeal (Including Chief Justice and President) Whereas all of the persons appointed acting judges or acting judges of appeal of the Supreme Court in 2004-2005 were former judges of that Court (or in two cases, former judges of the Land and Environment Court of New South Wales, in one case of the Federal Court and in three cases of the District Court), the position with acting appointments to the District Court of New South Wales in the same period was different. In 2004, no fewer than 38 persons were appointed acting judges of the District Court. Between 1 July 2004 and 30 June 2005, 20 such appointees were former judges of the District Court or of other superior courts. The rest had a background at the Bar, as solicitors or, in two cases, as legal academics. These figures demonstrate a systematic and uninterrupted trend since 1989 to alter the composition of New South Wales courts by appointing acting judges in substantial numbers. Anyone who thinks otherwise must have forgotten the constitution of such State courts with which they grew up. The foregoing tables and figures provide an empirical antidote to imperfect memories. There comes a time when quantitative change turns into a qualitative change; when special need becomes a settled practice; when a number of individual commissions becomes an institutional restructuring. This is what has happened in New South Wales courts, specifically in the Supreme Court. It has happened without an alteration of the relevant legislation to afford the specific 114 This table is compiled using memoranda in the New South Wales Law Reports, volumes 48, 50, 52, 55, 57 and 61. Kirby endorsement by the State Parliament of such restructuring. It has occurred by the use of statutory provisions, expressed in general terms, for appointing acting judges, although such provisions were obviously intended, and initially only used, for ad hoc and special needs. In the case of the Supreme Court, the cohort of acting judges has now effectively become part of the Court's institutional arrangements. This is even truer of the District Court. It is such arrangements that the plaintiffs challenge. Evidence of a changed practice was relied on by the plaintiffs to make good their constitutional submission. However, the plaintiffs did not rely on numbers alone. They emphasised the pattern and continuity of the trend evident in the numbers as well as the variety and identity of the named persons appointed to acting judicial office in the State. One such pattern may be seen in the renewal of the commissions of certain acting judges and acting judges of appeal. Table 3 illustrates this point. Instead of appointing permanent judges to fill obvious and substantial institutional needs, these were filled by repeated renewals of acting judges, extended in successive years, on each occasion, for the maximum time allowed for acting appointments. Kirby TABLE 3 RENEWAL OF ACTING COMMISSIONS SUPREME COURT OF NEW SOUTH WALES, 1901-2004 Acting Judge or Acting Judge of Appeal Badgery-Parker, Jeremy Barton, Edmund Alfred Horace Bruce, Vincent Sholto Callaway, Calvin Rochester Number of commissions received Acting Judge or Acting Judge of Appeal Maughan, David Devenish Langer Roper, Ernest David Sheppard, Ian Fitzhardinge Whitlam, Antony Philip Number of commissions received Between 1901 and 1988, 69 acting commissions in the Supreme Court were issued. Fourteen of these commissions (or 20.3%) were given to individuals who had already held an acting commission. Between 1989 and 2004, 158 acting commissions were issued. However, in contrast to the practice of commissions which had previously prevailed, 83 (or 52.5%) of these commissions were given to recipients who had already held an acting commission. These figures reveal the institutional significance of renewed acting commissions in recent years. Governmental submissions: None of the parties seeking to defend the validity of the legislation116 raised any formal or evidentiary objection to this 115 Table 3 is completed from data contained in the authorised reports of the Supreme Court of New South Wales. It records renewal of commissions given to acting judges and acting judges of appeal. Kirby Court's receiving and acting on the matters of public record set out above. They joined issue on the facts as revealed in Table 2. Table 1 is no more than a retrospective to permit the figures in Table 2 to be understood against their historical background. Figures 1 and 2 and Table 3 constitute no more than a detailed breakdown of the same publicly available material. However, the defendants were critical of the quality of this evidence. Thus, the Commonwealth pointed out that raw figures concerning the number of acting judges in New South Wales afforded no information, as such, on the backgrounds of such judges; the actual days of judicial work performed during individual appointments; and the nature of the judicial activity assigned during those days. The Commonwealth submitted that, in any case, expressed in such raw terms, the number of part-time Supreme Court judges as at January 2002 (comprising 22.8% of all judges of the Supreme Court) represented the "high water mark" when compared with the preceding years. Thus, according to the Commonwealth, the emerging position in the Supreme Court was as follows: As at January 2000 there were eight acting judges out of a total of 52 (both permanent and acting). Thus, 13.7% of judges of the Court were acting judges; As at January 2001 there were seven acting judges out of a total of 51 (both permanent and acting). Thus, 15.4% of judges were acting judges; As at January 2003 there were 12 acting judges out of a total of 57 judges (both permanent and acting). Thus, 21.1% of judges were acting judges; and As at January 2004 there were nine acting judges out of a total of 56 judges (both permanent and acting). Thus, 16.1% of judges were acting judges. The acting judges of the Supreme Court could not be viewed as performing 22.8% or even 13.7% of the work of the Supreme Court during the respective years of the high and low figures. Obviously, the proportion of the work of the Supreme Court performed would depend on the days on which the acting judges were rostered for duty. The defendants sought to turn this paucity of information to their advantage. Thus, the Commonwealth argued that acting judges of the Supreme Court would not necessarily sit continuously but only as the need arose. They would thus perform a smaller (although unidentified) part of the business of the Supreme Court. By inference, on this argument, any defect 116 The Australian Securities and Investments Commission ("ASIC") and the State of New South Wales. For convenience, I will refer to these parties as "the defendants". Kirby introduced by the participation of non-permanent judges was to be treated as diminished because such participation affects only a small proportion of cases and litigants. In the same vein, ASIC presented an analysis of the judicial reasons reported in the volumes of the New South Wales Law Reports from which the plaintiffs have taken their recent statistics concerning the numbers of acting judges of the Supreme Court117. According to ASIC, the analysis revealed that: "[I]n vol 48 there were 90 instances of judgments by permanent judges and only three instances of judgments by acting judges; in vol 50 there were 99 instances of judgments by permanent judges and six instances of judgments by acting judges; in vol 52: 73 permanent, 12 acting; in vol 55: 83 permanent and 13 acting; in vol 57: 91 permanent and 4 acting." Whilst conceding that such figures did not disclose accurately the "proportion of work actually conducted by acting judges in the period 2000-2004", ASIC argued that "they do nevertheless suggest that amount is modest". Modest infractions against the Constitution (if that they be) remain infractions. Moreover, the very "modesty" enlivens a different criticism concerning the recruitment of acting judges, at least at the level of appeals. This is that such judges may sometimes appear to participate in order to make up the numbers and not to be as fully engaged, fully supported and equally committed judicial officers, playing a fully active, entirely equal, and proportionate role in the work of the Court as their permanent colleagues. No conclusion could be reached on this suggestion without further evidence. However, the risk is undeniable. The perception of a problem is almost as serious as the suggested problem itself. The State of New South Wales complained about the imperfections in the memoranda published in the authorised reports of the Supreme Court from which, substantially, the foregoing statistics and figures are derived. It is true that the materials are open to minor criticisms. However, they are clearly sufficient to illustrate accurately the overall trends and outcomes, which is what these proceedings are concerned with. Moreover, the State's criticisms cannot be given great weight when regard is had to its presumed capacity to secure access to its own more detailed records that would reveal perfectly the number, duration and variety of all of its acting judicial appointments since Federation. The failure of the State to produce competing evidence, to cast doubt on the patterns emerging from the foregoing tables and figures, suggests strongly that the published memoranda are adequate, accurate and representative. Given their sources, the contrary conclusion would be perverse. 117 Volumes 48, 50, 52, 55 and 57. Kirby However, the State also suggested, cautiously, that the foregoing tables and figures "could be misleading" and "of limited utility". That submission was advanced on the basis of the fact that some of the acting judges of the Supreme Court in recent years (eg in 2002) were permanent judges of other State courts or former judges who may not have sat continuously throughout the period of their appointment as acting judges. That submission does not affect the accuracy of the statistics or the value of the figures based on them as illustrations of the institutional augmentation of the Supreme Court by outside personnel in large numbers after 1989. The State denied that a significant change of practice in the appointment of acting judges occurred in 1989. It produced tables and figures in an attempt to support that submission. However, if the period of the operation of the Supreme Court Act following its enactment in 1970 is adopted, being the operation of the law challenged in these proceedings, the graphical representation supplied by the State itself clearly denies the accuracy, and certainly the persuasiveness, of its submission. Kirby FIGURE 3 NUMBER OF JUDGES OF THE SUPREME COURT OF NEW SOUTH WALES, 1970-2004 SHOWING ACTING JUDGES IN RELATION TO PERMANENT JUDGES Permanent Judges Acting Judges Year The State (supported by the Commonwealth) also argued that the number of acting judges may not reflect the level of representation of acting judges on the Court over time. No doubt exact figures would disclose precisely the number of judge days served (permanent and acting) in each year since 1901. The State did not provide such materials although it was in the best position to do so and was given a full opportunity for that purpose. It is proper to assume that such information did not advance the State's argument. The State and the Commonwealth submitted that a more accurate impression of the participation of acting judges in the Supreme Court would arise by comparing the number of acting judges in any given year to the number of permanent judges. Yet even if this approach were adopted, the graphical representation of the ratio of such judges in the Supreme Court remains telling, based on the information supplied by the State. It is contained in Figure 4. That 118 This Figure substantially reproduces a graphical representation of the identified years supplied by the State. Kirby figure confirms the significant proportional alteration that has occurred in the participation of acting judges of the Supreme Court after 1989. It is that alteration that is the subject of these proceedings. FIGURE 4 PROPORTION OF ACTING JUDGES TO PERMANENT JUDGES OF THE SUPREME COURT OF NEW SOUTH WALES, 1901-2004 Permanent Judges Acting Judges Year Other members of this Court may find the foregoing statistics and figures "meaningless"120. To the contrary, I regard them as demonstrating a clear trend that has the effect of altering the composition of a State Supreme Court. It is that trend that should enliven the concern, and response, of this Court. It should be stopped now before it becomes permanent and spreads, as departures from constitutional principle have a tendency to do. The evidence: conclusions: The evidence relied on by the plaintiffs was qualified, limited and imperfect. Even when it is broken down a little more and 119 This Figure is based upon statistics supplied by the State. 120 Reasons of Gleeson CJ at [33]. Kirby the same sources are analysed more closely, the entire picture is not presented. Yet its major outlines were not successfully challenged by the defendants. The general trend revealed in the appointment of acting judges in the frontispiece pages to the authorised reports of the Supreme Court of New South Wales, over more than a century, is reinforced by professional recollection and the well- remembered institutional tradition. In respect of the last decade or so it is confirmed by information contained in the Annual Reviews of the Supreme Court of New South Wales published in that time121. From the tables and figures set out in these reasons, this Court should draw a number of conclusions. Such conclusions are sufficient for the purposes of the proceedings. In my opinion, the conclusions available from the record and such other public material as is incontestable are: From the first establishment of courts in New South Wales in colonial times a power existed for the appointment of acting judges to the Supreme Court; Throughout the nineteenth and most of the twentieth centuries, such appointments were made in special circumstances, afforded on an ad hoc basis and issued in tiny numbers that never threatened to alter the institutional identity of the court concerned, specifically the Supreme Court; This settled practice changed in 1989. The change then introduced has been continued ever since. It has gathered pace in the past six years; Initially, in the early 1990s, appointees as acting judges of the Supreme Court included retired judges and judges of appeal, judges of other courts and qualified legal practitioners. This practice has changed further so that now only retired judges of the Supreme Court, Federal Court or of other courts are appointed acting judges or acting judges of appeal of the Supreme Court; foregoing alteration has, however, not extended to acting The appointments to the District Court of New South Wales. A significant number of legal practitioners and some academic lawyers have been appointed as acting judges of that Court; 121 The Supreme Court of New South Wales began to publish an Annual Review in 1990. Before that date, the number of appointments to that Court is to be found in the authorised reports and in the New South Wales Law Almanac, published annually. Kirby (6) Acting appointments now represent a significant component of judicial appointments to the Supreme Court and, even more so, to the District Court; and (7) Whilst the number of such appointments has varied over the past twenty years, in the Supreme Court it has now settled down so as to constitute a steady and significant component. It represents an important and relatively stable institutional supplementation of the judicial personnel of the Supreme Court. It is even more so in the District Court. The development is new and appears to be semi-permanent. There appears to be little prospect of diminution or abolition of the practice. The question for this Court is whether the foregoing conclusions are of constitutional significance. In my opinion, they are. The issues Four issues arise for decision: The acting judge issue: Whether the provisions of s 37 of the Supreme Court Act, in so far as that section purports to authorise the issue of the commission as an acting judge of the Supreme Court of New South Wales to the Honourable M L Foster is invalid under the federal Constitution. Alternatively, was that commission invalid because it constituted an attempt to invoke the section (valid for other purposes) to support the appointment of a person as an acting judge in circumstances where doing so would impermissibly constitute part of a change to the character of the Supreme Court, rendering that Court, as a whole, a tribunal different from that envisaged, and required, by s 73 of the federal Constitution? The transitional law issue: Whether the proceedings commenced by ASIC against the plaintiffs in the Supreme Court of New South Wales, tried before Foster AJ, constituted a "matter" arising under a law enacted by the Federal Parliament within the Constitution122. In particular, assuming the validity of Foster AJ's commission, did the transitional provisions of Ch 10 of the Corporations Act 2001 (Cth) ("the Corporations Act") validly operate to confer jurisdiction on the Supreme Court to apply, and enforce against the plaintiffs, the civil penalty provisions of that Act? Or was there a break in the legal chain by virtue of the enactment of the federal Act in 2001 such that, for any successful proceedings against the plaintiffs, ASIC could not rely on the transitional provisions but would be obliged to commence fresh proceedings brought entirely under the federal law? 122 Constitution, s 76(ii). Kirby The waiver or acquiescence issue: Given that the plaintiffs, both in the trial and on appeal in the Court of Appeal, raised no objection to the validity of the appointment of Foster AJ, as an acting judge of the Supreme Court of New South Wales, are they, by their conduct, to be treated as having waived any objection to (or as having acquiesced in) the participation by Foster AJ in the trial? In short, is it too late for the plaintiffs to advance their objection to the validity of Foster AJ's commission as an acting judge of the Supreme Court? The de facto officers doctrine issue: In the event that the commission of Foster AJ is otherwise found to have been constitutionally invalid, are his acts, in purported fulfilment of his commission, valid by reason of the de facto officers doctrine? Narrowing the issues The transitional law issue: I can narrow the issues for decision in these proceedings immediately. For the reasons stated by Gummow, Hayne and Crennan JJ ("the joint reasons")123, I agree that, if otherwise valid, the trial conducted in the Supreme Court of New South Wales before Foster AJ of the proceedings commenced in that Court by ASIC against the plaintiffs constituted a matter arising under a law made by the Federal Parliament. The plaintiffs' arguments to the effect that the transitional provisions of Ch 10 of the Corporations Act did not apply, in terms, to the proceedings concerning them should be rejected. I have nothing to add to the joint reasons on this issue. However, as will appear, this conclusion does not ultimately avail ASIC. The waiver or acquiescence issue: This issue was not, as such, advanced by ASIC, or indeed by any party or intervener. However, it is suggested by the reasons delivered in the recent Privy Council decision in Robertson v Higson124. It should therefore be noticed. The decision in Robertson is one of a number in which their Lordships have had to consider complaints by litigants about the validity of orders pronounced in the High Court of Justiciary of Scotland. Three bills of suspension were appealed to the Privy Council, operating in its new role under the Scotland Act 1998 (UK). The bills arose out of the decision of the High Court in Starrs v Ruxton125. 123 Joint reasons at [103]-[115]. 124 2006 SC (PC) 22. Kirby Starrs was a case in which it was held that a court, presided over by a temporary sheriff under the then arrangements applicable to the Scottish judiciary, did not constitute an "independent and impartial tribunal" in terms of Art 6(1) of the European Convention for the Protection of Human Rights and Fundamental Freedoms ("the European Convention")126. The decisions of the temporary sheriffs, and their orders, were therefore found to be invalid. The correctness of the decision in Starrs was not challenged before the Privy Council127. The Lord Advocate of Scotland accepted in Robertson that, in each of the cases argued, the Procurator Fiscal had no power to proceed with the prosecution of the appellant before a temporary sheriff. However, it was argued in Robertson that the appellants had acquiesced in their trials before the temporary sheriffs and so could not secure relief. Despite extensive media coverage given to the decision in Starrs in November 1999, no challenge by way of bill of suspension was filed against the appellants' convictions in those cases until October 2001 or later. In Robertson, the Privy Council unanimously upheld the argument of acquiescence and dismissed the appeals. The argument that the conviction and sentence constituted a "fundamental nullity", so as to render the suggested argument of waiver inapplicable, was rejected128. The discussion of that subject by Lord Carswell resonates with the recent consideration in this Court of somewhat similar questions129. Lord Carswell130 relied on Lord Radcliffe's speech in the House of Lords in Smith v East Elloe Rural District Council131: "An order, even if not made in good faith, is still an act capable of legal consequences. It bears no brand of invalidity upon its forehead. Unless the necessary proceedings are taken at law to establish the cause of invalidity and to get it quashed or otherwise upset, it will remain as effective for its ostensible purpose as the most impeccable of orders." 126 2000 JC 208 at 231 per Lord Justice-Clerk Cullen; Lord Prosser agreeing at 231; Lord Reed agreeing at 257. 127 2006 SC (PC) 22 at 29 [22]. 128 2006 SC (PC) 22 at 38 [52]. 129 See Berowra Holdings Pty Ltd v Gordon (2006) 80 ALJR 1214 at 1218 [10], 1219 130 2006 SC (PC) 22 at 38 [54]. 131 [1956] AC 736 at 769-770. Kirby In the present proceedings, there was no earlier decision of this or any other court to hold, or suggest, that the orders made, and the judgment entered, by Foster AJ were constitutionally invalid. The objection raised by the plaintiffs is a fresh one. It presents a question of law, notably constitutional law. It does so in proceedings that are still alive before the Australian Judicature. There is no legal impediment to the point being raised, although belatedly, before this Court132. Once such a point is raised by a party (indeed, in my view, even if raised by the Court itself upon its perceiving a false assumption or concession relevant to jurisdiction which the parties should not have made133), it is the duty of the Court to decide the issue. Certainly, it must do so if the issue is necessary to the disposition of the proceedings in accordance with law. Waiver and acquiescence connote, at least to some degree, a knowing participation in a legal proceeding without raising an objection to it in a timely manner. There is no suggestion in the materials before this Court, still less any proof, that the plaintiffs were guilty of such disqualifying conduct here. None of the defendants suggested so. It is therefore unnecessary in these proceedings to consider whether, if a constitutional defect were established, a party might, procedurally, be incapable of relying on it because of waiver or acquiescence. This is not a case in which the plaintiffs' principal issue can be avoided, as was that in Robertson. The de facto officers doctrine issue: In its written submissions, ASIC argued that, if Foster AJ's appointment as an acting judge in the Supreme Court were invalid, his decision in finding the plaintiffs guilty of offences under the Corporations Act, and his orders giving effect to that decision, were valid in accordance with the de facto officers doctrine. My difficulties with this "doctrine"134 were expressed in reasons in which I joined with Hope JA in G J Coles & Co Ltd v Retail Trade Industrial Tribunal135. In the federal constitutional setting I have repeated the expression of these 132 Gipp v The Queen (1998) 194 CLR 106 at 116 [23], 153-155 [135]-[138], 169 [184]; Crampton v The Queen (2000) 206 CLR 161 at 171-174 [12]-[21], 179-185 133 Dalton v NSW Crime Commission (2006) 80 ALJR 860 at 875-876 [73]; 226 ALR 570 at 588-589; cf Roberts v Bass (2002) 212 CLR 1 at 54-55 [143]-[144]. 134 Which may be found in State v Carroll 9 Am Rep 409 at 427 (1871). 135 (1986) 7 NSWLR 503 at 519-520. Kirby difficulties in this Court in Re Governor, Goulburn Correctional Centre; Ex parte Eastman136. In that case I observed that137: "[A] distinction has been drawn between the validity of the acts de facto of a person invalidly appointed to a valid office and the acts of a person appointed to an office which itself has no validity". Assuming this to be a proper distinction, the frontal attack by the plaintiffs on s 37 of the Supreme Court Act would mean that, on their argument, the office of "acting judge" of the Supreme Court, to which Foster AJ was purportedly appointed, did not exist. At least, it did not exist to fulfil the institutional arrangements which Foster AJ's appointment was intended to advance. On this basis (even assuming it to be otherwise available to answer an established defect under the Australian Constitution), the de facto officers doctrine would not rescue the validity of the orders made by an invalid appointee. In Ruddock v Taylor138, I rejected an approach to the issue under consideration in that appeal which would have contradicted the Constitution or frustrated the making of orders upholding relevant constitutional provisions139. Similar considerations would inform my approach to any invocation of the de facto officers doctrine in these proceedings that sought to contradict a holding that Foster AJ's orders were invalid for reasons going to the heart of the requirements governing the Judicature under the Constitution. However this may be, it is unnecessary finally to decide this point. During oral argument, ASIC made it clear that it did not ultimately press the de facto officers doctrine argument. Instead, ASIC indicated that it would only do so if this Court upheld the submissions made for South Australia (intervening), relevant to that subject. In its arguments (intervening) in Eastman140, South Australia drew attention to what it suggested was the need for a de facto officers doctrine in order to avoid the "anarchy and chaos" that would otherwise follow a ruling that 136 (1999) 200 CLR 322; cf Residual Assco Group Ltd v Spalvins (2000) 202 CLR 629 137 (1999) 200 CLR 322 at 384 [156]. 138 (2005) 79 ALJR 1534 at 1561-1562 [170]-[174]; 221 ALR 32 at 69-70. 139 See also Coleman v Power (2004) 220 CLR 1 at 63-64 [142]-[143] per McHugh J. 140 (1999) 200 CLR 322 at 383 [155]. In Eastman, Western Australia joined in this submission. Kirby would be unsettling to the basic constitutional principle of the rule of law141. The invalidation of judgments and orders of acting judges of a State Supreme Court was argued to involve "anarchy and chaos" of this kind. It was for such a situation that the de facto officers doctrine was said to be necessary142. In the United States of America, the Supreme Court has held that the de facto officers doctrine is inapplicable where the relevant appointment is invalid on "nonfrivolous constitutional grounds"143. This unedifying phrase is indication enough of the uncertain foundation of the doctrine in that country. Even if some form of the doctrine exists in Australia, it would not appear to apply to the present case. First, on no account could the constitutional grounds urged by the plaintiffs be described as "frivolous". Secondly, success on the part of the plaintiffs would not lead to "anarchy and chaos". On the material placed before this Court, it would have little, if any, application to the judiciary in any other Australian State where acting judges have, until now, been comparatively rare. It would have no application to the federal judiciary, where acting judges do not exist. The constitutional flaw urged for the plaintiffs lay in the substantial and apparently stable number of acting judicial appointments that had altered the institutional character of the Supreme Court of New South Wales. Whether the argument would apply equally to the District Court of New South Wales (which is not expressly named in the Constitution) would remain for future debate. Thirdly, it is difficult to reconcile the doctrine with the fundamental role of the federal Constitution as the ultimate source of other laws. Constitutional rulings can occasionally be unsettling, at least for a period144. However, this is inherent in the arrangements of a nation that lives by the rule of law and accords a special status to the federal Constitution as its fundamental law. 141 See Reference re Manitoba Language Rights [1985] 1 SCR 721 at 765. 142 cf Dixon, "De Facto Officers", in Jesting Pilate, 2nd ed (1997) 229 at 230; Pannam, "Unconstitutional Statutes and De Facto Officers", (1966) 2 Federal Law Review 37; Campbell, "De Facto Officers", (1994) 2 Australian Journal of Administrative Law 5. 143 See Glidden Co v Zdanok 370 US 530 at 535-537 (1962); Ryder v United States 515 US 177 at 182-184 (1995). 144 As occurred following eg R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 (invalidation of the Commonwealth Court of Conciliation and Arbitration), Cheatle v The Queen (1993) 177 CLR 541 (invalidation of majority jury verdicts in trials of federal indictable offences) and Ha v New South Wales (1997) 189 CLR 465 (invalidation of tobacco licence fees). Kirby Conclusion: confining the objection: Having regard to the tepid way in which ASIC ultimately pressed its argument on this point, I need say no more about it. None of the three identified subsidiary issues therefore controls the outcome of these proceedings. That outcome depends upon the principal argument for the plaintiffs. It rests on the plaintiffs' objection to the validity of the appointment of acting judges of the Supreme Court of New South Wales in the past decade, and specifically to the appointment of Foster AJ in ASIC's proceedings against them. I therefore turn to that objection. The acting judge objection succeeds Source of invalidation: As stated at the outset of these reasons, the answer to any question concerning the invalidation of a State law (or of a commission issued under that law) purporting to permit a person to be appointed as an acting judge of the Supreme Court for reasons of incompatibility with the federal Constitution, depends upon the constitutional text, or the implications necessarily derived from that text. In the case of federal judges (including federal magistrates) provisions of the federal Constitution expressly govern the terms of their appointment, tenure, remuneration and removal145. Those provisions do not apply, according to their language, to State judges. From this feature of the Constitution, ASIC, and some of the States intervening, sought to derive much comfort – basically on an expressio unius argument. If the Constitution had intended to express requirements concerning the terms of appointments of State judges, they argued, it would have said so. The dangers of deploying the expressio unius rule have been explained by this Court many times146. Those dangers are particularly evident in constitutional interpretation because of the brief terms in which the federal Constitution is expressed; the necessity of applying the Constitution to a myriad circumstances; the difficulty of securing formal amendment; and the changing circumstances to which the Constitution must continually apply. I explained these considerations in Re Wakim; Ex parte McNally147. The absence of an express provision concerning the appointment of State judges by no means excludes implied requirements necessitated by considerations of history, context and also the function of the Constitution as the instrument of government for the entire Australian nation. 146 See, eg, Houssein v Under Secretary of Industrial Relations and Technology (NSW) (1982) 148 CLR 88 at 94. 147 (1999) 198 CLR 511 at 605 [199]; cf Ruhani v Director of Police (2005) 79 ALJR 1431 at 1463-1467 [173]-[199]; 219 ALR 199 at 240-246. Kirby Much is written in the reasons of the other members of this Court to explain the arguments advanced on the acting judge issue in these proceedings; relevant past authority of the Court; and the considerations that need to be given weight in reaching a conclusion on the plaintiffs' submissions. It is unnecessary for me to repeat this background material. However, it is useful to collect a number of matters of common ground. Common ground: Some circumstances evident in these proceedings are not disputed or should be taken as given: The challenge is not personal to the Honourable M L Foster148. There was not the slightest suggestion that he had been biased against the plaintiffs or that he approached his duties as an acting judge in a way that was personally inappropriate. The issue for decision is a legal one. It is concerned with the nation's judicial institutions and the basic values of the Constitution, not personalities; (2) Nor was it suggested by anyone that any particular circumstances149 had contaminated the trial of the proceedings involving the plaintiffs. To the extent that it was argued that an evidentiary base for the plaintiffs' complaint was missing, I disagree. Nor do I accept that the issue presented by the plaintiffs is in any way lacking in justiciability. No party contested the essential constitutional facts presented by the plaintiffs. On the contrary, the defendants joined issue upon them. They too are non- personal. They exist in detail in official records. It is the institutional change of recent years that the plaintiffs contest. It is not the individual honour and integrity of the persons who, in good faith, have participated in those arrangements; The role of this Court is not, as such, to pronounce on the "general desirability"150 of the appointment of acting judges. But neither is that issue one which belongs exclusively to a State Parliament, the Executive Government or officials. To the extent that a federal constitutional norm is invoked, the ultimate decision on that issue belongs to this Court. The Court cannot disclaim its responsibilities in resolving that issue; (4) Whilst the plaintiffs' challenge has potential significance for State courts other than the Supreme Court, it was ultimately focussed on the validity of 148 Reasons of Gleeson CJ at [9]. 149 Reasons of Gleeson CJ at [9]. 150 Reasons of Gleeson CJ at [20]; reasons of Heydon J at [251]. Kirby appointments of acting judges in the Supreme Court of New South Wales. As is clear from the evidence and public records, different factual considerations arise in the case of the District Court of New South Wales because of the much greater number of acting appointments there and the large proportion of such appointments in recent years involving private legal practitioners151. Similarly, as the joint reasons demonstrate, different considerations arise in respect of the exercise of federal jurisdiction by State magistrates152. A determination of invalidity in the present case, in respect of an appointment as an acting judge of the Supreme Court, would not necessarily require the same outcome in respect of other courts, where the constitutional position is different153; the Judicial Commission and of The materials placed before this Court, and other publicly known and available information, indicate that the same oaths or affirmations are administered, before taking up duty, to acting judges as to permanent judges; that the jurisdiction in New South Wales of the complaints Independent procedure of Commission Against Corruption applies equally to both154; and that during appointment an acting immunity from removal or interference by the Executive Government in the same way as does a permanent judge. Nevertheless, acting judges do not enjoy the same security of tenure for an extended term (to the age of 70 years) that a permanent judge enjoys155. They hold office only during short terms, sometimes (but not always) successive. They are subject to renewal, even repeated renewal, at the behest of the Executive; and judge enjoys the Inherent in the references in the federal Constitution to State courts (and specifically to the "Supreme Court of any State") is a conception of what such courts will be and how they will be constituted. As a minimum, the constitutional description of such courts connotes basic requirements of independence and impartiality on the part of the judicial officers constituting them156. The federal Constitution necessarily implies, and all democratic nations accept, that an independent and impartial judiciary is 151 See above these reasons at [140]. 152 Joint reasons at [84]-[85]. 153 Constitution, s 73(ii). 154 Reasons of Gleeson CJ at [21]-[24]; reasons of Heydon J at [269]-[271]. 155 Reasons of Gleeson CJ at [36]-[38]. 156 Reasons of Gleeson CJ at [36]. Kirby essential to the maintenance of the rule of law157. The rule of law is a fundamental postulate of the Australian federal Constitution158. Given that the Constitution suggests that provision for the composition of State courts will be made under State law, how can an implication be derived from the provisions in Ch III to invalidate the action of the Parliament of New South Wales in authorising the appointment of acting judges in the terms of s 37 of the Supreme Court Act, even in unusually large numbers? How is the commission granted to Foster AJ, purportedly pursuant to that provision, rendered invalid in respect of the proceedings affecting the plaintiffs? In particular, how can such invalidity arise given that the federal Constitution posits the existence of States, as separate governmental entities, with institutions of government (including courts) that are basically left to conform to their own several constitutional requirements159? In investing the "courts of the States" with federal jurisdiction is not the Commonwealth ordinarily to be taken as accepting those courts as established under State law160? The answer to these questions requires attention to the six steps by which the plaintiffs advanced their arguments before this Court. In order to give proper consideration to those arguments, it is necessary to examine these steps in turn. Needs of Australian federation: The first step involves a full appreciation of the federal character of the Australian Constitution and the checks and balances which that feature stamps on the institutions of the Commonwealth, the States and the Territories. It is the federal character of the Australian Constitution that necessitates, more than in nations differently organised, a judiciary that can decide federal contests in a way that is accepted by all participants in the polity161. Given the necessity of drawing lines that mark off the governmental powers respectively of the Commonwealth, the States and the Territories, it is essential that there be an independent and impartial constitutional umpire for the disputes that inevitably 157 Shetreet and Deschênes (eds), Judicial Independence: The Contemporary Debate, (1985) at xv. 158 Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 193. 159 Yougarla v Western Australia (2001) 207 CLR 344 at 378-380 [91]-[99]. 160 R v Murray and Cormie; Ex parte The Commonwealth (1916) 22 CLR 437 at 452; Le Mesurier v Connor (1929) 42 CLR 481 at 495; cf reasons of Gleeson CJ at [36], 161 See Boilermakers (1956) 94 CLR 254 at 276; cf Attorney-General (Cth) v The Queen (1957) 95 CLR 529 at 540-541; [1957] AC 288 at 315. Kirby occur. This is why federalism is legalism. It is why judicial review is an essential feature of governmental arrangements in a federal nation. The judges who perform the task of judicial review in such a polity must be, and be seen to be, legally competent, independent and impartial in the discharge of such functions. These features, necessary to, and inherent in, the Judicature of the Commonwealth, take on an added significance in Australia because of the integrated character of the national Judicature and the capacity of the Federal Parliament to invest the courts of the States (and also of the Territories) with federal jurisdiction162. In this respect, the Australian Constitution is not only different from that of the United Kingdom, hitherto a unitary state. It is also distinct from that of the United States and Canada where, although federations, different judicial arrangements apply. These features of the Australian constitutional system make it dangerous to assume that the organisation of the judiciary accepted in other countries will necessarily satisfy Australian constitutional norms. During argument, much was made of the existence of courts with part- time members in the United Kingdom, both before and after Australian Federation163. Thus, the English arrangements for Recorders and Deputy High Court Judges, appointed part-time from practising barristers (as well as Scottish arrangements for temporary sheriffs164 and temporary judges165), were described. Although the Scottish part-time sheriffs were recently found incompatible with the requirements of independence and impartiality in Art 6(1) of the European Convention, the very large number of part-time judicial officers throughout the United Kingdom was urged as a reason why the smaller number of Australian acting State judges should cause no constitutional offence. It is understandable that such an argument should be mounted. There are indeed many similarities between the judiciary in Australia and that of the United Kingdom. However, there is a fundamental difference. Australian courts have special responsibilities in deciding federal questions. Inevitably, such questions concern governmental issues. They involve issues that are political in the broad 162 Constitution, s 77(iii). See also s 77(ii). 163 Provisions existed for special appointments of acting judges in England prior to Australian Federation but always on a limited, special and ad hoc basis, or subject to specific requirements: see 13 & 14 Vict c 25; Supreme Court of Judicature Act 1884 (UK), s 7; County Courts Act 1888 (UK), s 18. 164 Starrs 2000 JC 208. 165 Clancy v Caird 2000 SC 441; Kearney 2006 SC (PC) 1. Kirby sense of that word166. So much is inescapable in judicial review in a federation in those courts that are entrusted with that responsibility. It is therefore a fundamental mistake to attach large significance to the arrangements for temporary judicial appointments in non-federal countries, including the United Kingdom, New Zealand and South Africa167. The legal texts are distinguishable. The constitutional obligations are different. The traditions that have grown around those obligations are peculiar. One illustration will suffice. The combination in the United Kingdom, until recently, in one person, the Lord Chancellor, of legislative, executive and judicial functions, is inconceivable in an Australian constitutional context168. The absence, until the European Convention recently forced the issue on courts in the United Kingdom, of any consideration of the possible deficiencies in the large cohort of temporary judges is another reason for considerable reserve in considering the plaintiffs' present challenge in conventional terms, according to the United Kingdom's legal institutions and traditions. Similarly, pre- Federation, colonial debates and assumptions in Australia169 are, with respect, of very limited utility in judging what the federal Constitution requires, and permits, in contemporary Australia. As it happens, the pre-Federation practice in Australia (in part because of the small size and high status of courts in colonial times) was uniformly to limit acting judicial appointments to special ad hoc circumstances. Generally speaking, Canada has followed a similar convention. In the context of very different constitutional provisions for the appointment of provincial judges in 166 Melbourne Corporation v The Commonwealth (1947) 74 CLR 31 at 82 per Dixon J; cf Combet v Commonwealth (2005) 80 ALJR 247 at 306 [271]; 221 ALR 167 See, for example, the approach of the Constitutional Court of South Africa in Van Rooyen v The State 2002 (5) SA 246 at 326-327 [241]-[243]. As Chaskalson CJ states at 327 [244]-[245], s 175 of the Constitution of South Africa expressly permits the appointment of acting judges on the recommendation of the Minister acting with the concurrence of the Chief Justice of the Constitutional Court or the senior judge of the court concerned. See also In re Certification of the Constitution of the Republic of South Africa, 1996 1996 (4) SA 744. 168 See Boilermakers (1956) 94 CLR 254 at 276. 169 Reviewed by Heydon J at [256]-[267]. Kirby Canada170 and despite a decision upholding part-time inferior court appointments in Quebec171, such appointments have not proliferated. This may have been because the Supreme Court of Canada recognised, and stated, that the appointment of such part-time judges was not "ideal"172. Advent of the Kable principle: With Australian Federation in 1901, the peculiar arrangements for the exercise of federal jurisdiction by State (and eventually Territory) courts commenced. There is no equivalent constitutional arrangement in the United States or Canadian Constitutions. It was a sensible expedient in Australia given the small population; the limited amount of litigation; the high standing of the State (previously colonial) courts; and economic considerations. However, necessarily involved in the vesting of federal jurisdiction in State courts was an assumption which it took nearly a century for this Court to express. In Kable, this Court spelt out what had earlier been assumed. This was that, in order to be courts suitable for the exercise of federal jurisdiction under the Constitution, State courts (and by analogy Territory courts173) were required to exhibit certain basic qualities as "courts" (or specifically as a "State Supreme Court"174) named as such in the Constitution. From this relatively simple, one might almost say self-evident, implication, drawn from the language and structure of Ch III of the Constitution (and specifically ss 73 and 77), have flowed the decision in Kable and a large body of judicial dicta; but not yet certainty about the scope of the doctrine or clarity about the occasions for its application175. It is true that, in the past, the appointment of acting judges has been noted by this Court, without criticism176. However, the basis and number of such appointments was then quite different from that lately evident in New South Wales. If the criterion is whether there has 170 It appears to have been accepted that acting or part-time federal judges would "of course" strike constitutional problems in Canada: see Friedland, A place apart: judicial independence and accountability in Canada, (1995) at 260. 171 Constitution Act 1867 (Can), s 96; R v Lippé [1991] 2 SCR 114. 172 Lippé [1991] 2 SCR 114 at 142 per Lamer CJ. 173 Bradley (2004) 218 CLR 146. 174 Fardon (2004) 78 ALJR 1519 at 1545 [136]; 210 ALR 50 at 86. 175 Wheeler, "The Kable Doctrine and State Legislative Power Over State Courts", (2005) 20(2) Australasian Parliamentary Review 15 at 30. 176 Silk Bros Pty Ltd v State Electricity Commission of Victoria (1943) 67 CLR 1 at 10; Spratt v Hermes (1965) 114 CLR 226 at 271-272; Eastman (1999) 200 CLR 322 at Kirby now been "a series of acting rather than full [judicial] appointments which is so extensive as to distort the character of the court concerned"177, that criterion is, in my view, now fulfilled in the case of the Supreme Court of New South Wales. It has been said that the circumstances that must be proved to invoke the principle of repugnance expressed in Kable must be "extraordinary"178. Being an implication derived from the Constitution, it cannot, of its nature, be confined to individual factual circumstances. It will attach wherever incompatibility is shown between a State law and the fundamental assumptions inherent in the exercise of federal jurisdiction. The criterion of "public confidence" is conclusory, sometimes inappropriate and usually unhelpful179. However, a more useful test, suggested in a number of the cases, involves consideration of whether, if enacted by the Federal Parliament, the impugned provision would be impermissible for a federal court180. This cannot be an exclusive test of validity181. Yet it is often a useful check because of the fundamental assumption that the Constitution did not intend to adopt basically different standards of justice in federal and State courts182. It is uncontested that the federal Constitution imposes a complete prohibition on acting appointments to federal judicial office in Australia. Even if such an absolute prohibition is not implied in the case of State courts (including a State Supreme Court) by the repugnancy principle in Kable, that principle is engaged, at least, when an attempt is made by State law and practice to alter the institutional arrangements of a State court in ways that threaten the real and apparent independence and impartiality of that court and of the State judicial officers serving in it. If the institutional alterations result in a "court" that is qualitatively changed (so that, in the case of a Supreme Court, it does not answer to its constitutional description as such) the Kable rule is engaged. Self-evidently, matters of judgment and basic constitutional values 177 Fardon (2004) 78 ALJR 1519 at 1540 [104]; 210 ALR 50 at 79. 178 Kable (1996) 189 CLR 51 at 98, 134. 179 The criterion is stated in Kable (1996) 189 CLR 51 at 108 per Gaudron J, 118-119 per McHugh J, 133 per Gummow J. But see Fardon (2004) 78 ALJR 1519 at 1546 [144.3]; 210 ALR 50 at 88-89. 180 In H A Bachrach Pty Ltd v Queensland (1998) 195 CLR 547 at 561-562 [14]. 181 Silbert v Director of Public Prosecutions (WA) (2004) 217 CLR 181 at 192-193 [32]; Fardon (2004) 78 ALJR 1519 at 1547 [144.4], 1562 [219]; 210 ALR 50 at 182 Fardon (2004) 78 ALJR 1519 at 1547 [144.5]; 210 ALR 50 at 89. Kirby inform such assessments. These, in turn, are influenced by considerations of the history and functions of acting commissions and the context in which they apply. Neither the federal Constitution nor Kable assimilates State courts or their judges and officers, with federal courts, their judges and officers183. Thus, Kable does not require the elimination of variations in the organisation and operation of State courts, enacted according to perceived local needs and requirements from time to time184. Those who are not ordinarily enthusiastic for the federal character of our Constitution can sometimes become highly defensive of State experimentation when it comes to imposing new institutional arrangements on State courts185. However, consistently with the Kable principle, there is certainly a limit. That limit is fixed by the standards of independence and impartiality that are demanded of State courts for their exercise of federal jurisdiction. Those features find a reflection in the general character of the federal judiciary even when they do not oblige observance of precisely the same requirements. It must be doubted today whether the remarks of Gibbs CJ, to the effect that a State court composed of laymen, with no security of tenure, might effectively be invested with federal jurisdiction186, survive the insight which this Court's decision in Kable provided. When Kable was expressed, its insight was new. This Court is still discovering Kable's applications. They are beneficial and protective of judicial institutions throughout Australia. They exist not for the advantage of judges themselves but for the courts and all persons dependent on the protection of the law. The Kable principle thus lies in the bedrock of Australia's constitutional assumptions. In this respect, it is a practical and necessary counterpart to that other fundamental principle, stated by Dixon J in Australian Communist Party v The Commonwealth187, that "the rule of law forms an assumption" upon the acceptance of which the Australian Constitution is framed. Numerous decisions of this Court contain remarks to the effect that the Federal Parliament must, when investing State courts with federal jurisdiction, take those courts as it finds them "with all [their] limitations as to jurisdiction, 183 Fardon (2004) 78 ALJR 1519 at 1528 [36] per McHugh J; 210 ALR 50 at 62. 184 Kotsis v Kotsis (1970) 122 CLR 69 at 110 per Gibbs J. 185 As in Baker v The Queen (2004) 78 ALJR 1483; 210 ALR 1 and Fardon (2004) 78 ALJR 1519; 210 ALR 50. 186 In The Commonwealth v Hospital Contribution Fund (1982) 150 CLR 49 at 57. 187 (1951) 83 CLR 1 at 193. Kirby unless otherwise expressly declared"188. However, virtually all of these words were written before the Kable enlightenment. They now need to be reconsidered in the light of the important general principle of constitutional law expressed in Kable. The legal mind clings to oft-repeated formulae. But when a new constitutional truth is perceived, it is necessary to reconsider past observations. It is not now the constitutional law of Australia that the Federal Parliament must accept all State courts as it finds them when investing federal jurisdiction in such courts. So far as the State Supreme Courts are concerned, with their guaranteed constitutional status, it is inherent in their existence and the necessity that they should receive and exercise federal jurisdiction, that they will not depart from a capacity to do so in a way appropriate to such jurisdiction. If they did so depart, this Court would not be without remedy. As to other State courts, such as a District Court, if they were to depart from Kable requirements, it would be open to the Federal Parliament to limit their exercise of federal jurisdiction to such courts as particularly constituted. In the practical circumstances of federation, it may be expected that repugnance and incompatibility will generally be avoided so as to maintain this beneficial feature of the Constitution. But, if they are not, Kable affords a judicial remedy. to experimentation Decisions of this Court, since Kable, have contained remarks that can be read as favourable judicial appointments189. Some such remarks, in obiter comments, have suggested the validity of part-time or temporary judicial commissions190. However, such observations present no difficulty for the plaintiffs' challenge in these proceedings. in features of Territory First, there is no earlier occasion when this Court has been asked specifically to rule on the validity of the appointment of an acting judge of a State Supreme Court. Secondly, the constitutional position of the courts of the Territories, in respect of which such remarks have been made, is separate, and different, from that of State courts191 and especially State Supreme Courts192. 188 Federated Sawmill, Timberyard and General Woodworkers' Employes' Association (Adelaide Branch) v Alexander (1912) 15 CLR 308 at 313. See also Peacock v Newtown Marrickville and General Co-operative Building Society No 4 Ltd (1943) 67 CLR 25 at 37; Kotsis (1970) 122 CLR 69 at 107; Knight v Knight (1971) 122 CLR 114 at 137. 189 See, eg, Bradley (2004) 218 CLR 146 at 152-153 [3]. 190 Bradley (2004) 218 CLR 146 at 164 [32]. 191 Constitution, s 77(ii) and (iii). Kirby The constitutional status of Territory courts considered in Eastman and Bradley (Territory courts not being specifically named in Ch III as such) is still in a process of evolution193. Thirdly, the plaintiffs did not contest the permissibility of ad hoc, individual, special arrangements, including for temporary or acting judges in State (or Territory) courts, as such. What they challenged were appointments as instances of substantial institutional alteration. Far-fetched requirements for multiple appointments of acting judges, including the sudden death of many judges in a terrorist attack or an influenza pandemic, were advanced by the defendants in support of the unrestricted appointment of acting judges. Such emergencies constitute an entirely different circumstance from that disclosed by the record showing what has actually occurred in New South Wales in recent years. In fact, they highlight the arguably valid and proper use of a special statutory power to appoint acting State judges. They differentiate that use from the purposes of fulfilling the basic institutional needs of the State courts, evident in New South Wales since 1989. Finally, it is true that, so far, the Kable doctrine, although often invoked, has not resulted in the invalidation of many State laws. Apart from in Kable itself, the only other instance in which the principle has been applied was in Queensland in Re Criminal Proceeds Confiscation Act 2002194. This is why the Kable doctrine has been described as one that is "under-performing"195. In this Court, there have been many rejections196. But these facts are immaterial. The circumstances of the other cases were different. No one in these proceedings challenged the authority or correctness of the Kable principle. There are some indications that the principle may be operating prophylactically197. Thus, since Kable was decided by this Court, only retired judges have been appointed to acting positions in the Supreme Court of New South Wales. This was a prudent 192 Constitution, s 73(ii). 193 Eastman (1999) 200 CLR 322 at 371-372 [127]; cf Ruhani (2005) 79 ALJR 1431 at 1465-1466 [189]-[191]; 219 ALR 199 at 244. 194 [2004] 1 Qd R 40. 195 Wheeler, "The Kable Doctrine and State Legislative Power Over State Courts", (2005) 20(2) Australasian Parliamentary Review 15 at 30. 196 Including Nicholas v The Queen (1998) 193 CLR 173; H A Bachrach (1998) 195 CLR 547; McGarry v The Queen (2001) 207 CLR 121; Bradley (2004) 218 CLR 146; Silbert (2004) 217 CLR 181; Baker (2004) 78 ALJR 1483; 210 ALR 1; Fardon (2004) 78 ALJR 1519; 210 ALR 50. 197 Wheeler, "The Kable Doctrine and State Legislative Power Over State Courts", (2005) 20(2) Australasian Parliamentary Review 15. Kirby step to reduce the risks of Kable invalidity. However, the invalidity is fundamentally concerned with institutional considerations touching the integrity of State courts198. That is the specific defect which the plaintiffs allege has happened here. It is the feature of the proceedings that makes the decision in Kable specially applicable. Context: international human rights: There is a third consideration. Legal interpretation involves the derivation of meaning from words, understood in context. That context includes the sentence in which the words appear199, the parts of the legal document that throw light on the meaning, considerations of legal history and background legal materials. However, it also includes admissible social facts and the national and international circumstances in which the legal document in question is intended to operate. It is this modern understanding of the process of interpretation that leads, in constitutional construction, to the examination of the context of international human rights law as it operates in the contemporary world200. the recent decision of It is futile to suggest that a contemporary lawyer ignores this international context when ascertaining the meaning of relevant provisions of the Australian Constitution. An instance of the process (not always acknowledged or perhaps perceived) Commonwealth201. The issue there was whether a child, born in Australia, answered to the description of "alien" in s 51(xix) of the Constitution. In answering this question, four members of this Court, including myself, treated it as relevant to examine the provisions of international law contained in the Convention on Such provisions of international law cast light on the meaning of alienage for the purposes of the Constitution, as understood in contemporary circumstances. the Reduction of Statelessness202. this Court 198 Fardon (2004) 78 ALJR 1519 at 1523 [15] per Gleeson CJ, 1528 [37] per McHugh J, 1539 [101] per Gummow J, 1562 [219] per Callinan and Heydon JJ; 210 ALR 50 at 56, 62-63, 78, 110. 199 Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 at 396-397. 200 Al-Kateb v Godwin (2004) 219 CLR 562 at 622-624 [169]-[176]; cf at 589-595 201 (2006) 80 ALJR 1146 at 1154 [44] per Gummow, Hayne and Crennan JJ, my own reasons at 1158 [69]; 227 ALR 406 at 415-416, 420-421. 202 [1975] Australian Treaty Series 46. In my reasons in Koroitamana (2006) 80 ALJR 1146 at 1157-1158 [66]-[68]; 227 ALR 406 at 420, I also referred to the provisions of the Universal Declaration of Human Rights; the International Covenant on Civil and Political Rights; and the Convention on the Rights of the Child. Kirby The Supreme Court of the United States has also adopted this approach, in the interpretation of the United States Constitution, paying due regard to international law and practice203. This is a natural and inevitable development in the law. Contemporary judges and lawyers can hardly leave their knowledge about the developments of the world and of international law at the courtroom door when they enter to perform their duties. With respect, I do not accept the view that the meaning of the Australian Constitution is to be ascertained solely or mainly by reference to what the words are taken to have meant in 1900204. That approach is fundamentally inconsistent with the character of the Constitution as an instrument of government intended to be of indefinite duration. The use of international law is a further advance in the approach to interpretation that has occurred in this Court, and elsewhere, since the early decisions about the features of State courts that would be compatible with the implications of Ch III of the federal Constitution and specifically the vesting of federal jurisdiction in State courts205. The process will continue to gather pace, stimulated by access to, and knowledge about, the decisions of national and transnational tribunals applying international human rights law. The International Covenant on Civil and Political Rights ("the ICCPR") provides, relevantly, in Art 14(1), that: "[a]ll persons shall be equal before the courts and tribunals. In the determination of … his rights and obligations in a suit at law, everyone shall be entitled to a fair and public hearing by a competent, independent and impartial tribunal established by law." This provision supplements Art 10 of the Universal Declaration of Human Rights. There are analogous provisions in each of the regional human rights instruments206. 203 Trop v Dulles 356 US 86 at 102-103 (1958); cf Roper v Simmons 73 USLW 4153 at 4160-4161 (2005); Hamdan v Rumsfeld Slip Opinion at 49-72 (2006) per 204 cf XYZ v Commonwealth (2006) 80 ALJR 1036 at 1069-1070 [153]; 227 ALR 495 at 536-537; reasons of Heydon J at [266]. 205 The process was stimulated by Mabo v Queensland [No 2] (1992) 175 CLR 1 at 206 American Declaration of the Rights and Duties of Man, Art 26; American Convention on Human Rights, Art 8(1); European Convention, Art 6(1); African Charter on Human and Peoples' Rights, Arts 7(1), 26. Kirby In order to decide whether a court or tribunal may be considered "independent" for these purposes, regard is usually had (amongst other things) to the manner of the appointment of its members; their terms of office; the existence of effective guarantees against outside pressure; and the question whether the body presents an appearance of independence and impartiality207. Courts have identified various "essential conditions" for judicial independence, having regard to their own traditions and legal systems. These include security of tenure; financial security; and institutional independence208. Depending on the circumstances, and measured against such standards, the appointment of acting judges has enlivened concern in several countries. Sometimes, the appointments have been held to fall short of the requirement of manifest independence and integrity209. On other occasions, the appointments have been held compatible with such fundamental standards210. The ICCPR is not, as such, part of Australia's municipal law. Still less are its provisions repeated in the federal or State Constitutions. Where municipal law is clear, including in the Constitution, it is the duty of Australian courts to give effect to it211. However, where, as here, the applicable law is in a state of development, especially since Kable, and is inescapably concerned with general principles212, it is helpful to examine the way in which the rules governing 207 Langborger v Sweden (1989) 12 EHRR 416; Bryan v United Kingdom (1995) 21 EHRR 342. 208 Valente v The Queen [1985] 2 SCR 673 at 687. See also Richardson, "Defining judicial independence: A judicial and administrative tribunal member perspective", (2006) 15 Journal of Judicial Administration 206 at 206-207. 209 R v Liyanage (1962) 64 NLR 313 (ministerial control); Law Society of Lesotho v Prime Minister of Lesotho [1986] LRC (Const) 481 (acting judges from office of public prosecutions); Starrs 2000 JC 208 (temporary sheriffs in Scotland); Mackin v New Brunswick (Minister of Finance) [2002] 1 SCR 405 (supernumerary provincial judges). 210 Lippé [1991] 2 SCR 114 (part-time municipal court judges). 211 See, eg, Minister for Immigration and Multicultural and Indigenous Affairs v B (2004) 219 CLR 365 at 424-426 [169]-[173]. 212 Such as whether the Supreme Court of New South Wales, when it includes a large and effectively permanent cohort of acting judges, answers the description of a "Supreme Court of any State" in s 73(ii) of the federal Constitution; whether "State courts", so constituted, answer the description of "courts of the States" or "any court of a State" in s 77(ii) and (iii) of the Constitution; and whether such courts are appropriately constituted to exercise federal jurisdiction as contemplated by s 77 of the Constitution. Kirby judicial independence and impartiality have been elaborated, both under the ICCPR and elsewhere. In the submissions of the parties and the interveners in these proceedings, that elaboration was undertaken – itself a sign of changing practices in legal argument in Australia. The United Nations Human Rights Committee, which decides communications alleging non-compliance by states parties with the ICCPR, has strongly endorsed the importance of judicial tenure as an essential prerequisite for an independent judiciary213. In general observations on judicial arrangements in one country, the Committee expressed its concern about the lack of tenure as an impediment to the independence of the judiciary214. The Committee, like the European Court of Human Rights in upholding Art 6(1) of the European Convention, has drawn distinctions between: The standards applicable to administrative as distinct from judicial tribunals215; The standards stated in the legal text and the requisite appearance of independence and "objective impartiality" in practice216; and Individual infractions and institutional defects217, the latter ordinarily being more serious because they are likely to repeat their consequences in many decisions made by the flawed institution. The application of the European Convention to the municipal law of the United Kingdom218 has required the courts of that country to consider directly the necessities of independence and impartiality of its courts in accordance with the jurisprudence that has grown around these basic concepts. In Australia, we cannot use the same legal material in an identical way in elaborating the 213 Joseph, Schultz and Castan (eds), The International Covenant on Civil and Political Rights: Cases, Materials, and Commentary, 2nd ed (2004) at 405 [14.30]. 214 United Nations Human Rights Committee, Concluding Observations on Slovakia, UN Doc CCPR/C/79/Add.79, (1997) at [18]. 215 cf Campbell and Fell v United Kingdom (1984) 7 EHRR 165; Lester and Pannick (eds), Human Rights Law and Practice, 2nd ed (2004) at 237 [4.6.55]. 216 Findlay v United Kingdom (1997) 24 EHRR 221 at 244-245 [73]; Stafford v United Kingdom (2002) 35 EHRR 32 at 1143 [78]; Clark v Kelly [2004] 1 AC 681. 217 Valente [1985] 2 SCR 673; Beaumartin v France (1994) 19 EHRR 485. 218 By the Human Rights Act 1998 (UK), s 1, 3 and 4 and, in Scotland, by s 57(2) of the Scotland Act 1998 (UK). Kirby requirements of our own Constitution and laws. Nevertheless, the many recent judicial decisions in the United Kingdom and elsewhere concerning acting and temporary judges, collected in the reasons of Lord Justice-Clerk Cullen in Starrs219, bear out the conclusion in 1998 of the then United Nations Special Rapporteur on the Independence of the Judiciary (Dato' Param Cumaraswamy). This was that the growing understanding of the needs for the protection of judicial independence "send alarm bells to some jurisdictions where temporary judges are appointed as a matter of course without regard to the grave constitutional flaw in such appointment"220. It was considerations such as these that resulted in the conclusion of the High Court of Justiciary in Scotland that the institutional arrangements for the temporary sheriffs in that country (which had been in place for many years) should be declared incompatible with the right to trial by "an independent and impartial tribunal". In Starrs, that conclusion invalidated the conviction of the applicant by such a sheriff221. As Lord Reed observed222: "[T]he United Kingdom practice of appointing temporary judges appears to be unusual within a European context: it appears that in almost all the other systems surveyed the appointment of a temporary judge by the executive for a period of one year, renewable at the discretion of the executive, would be regarded as unconstitutional". In the elaboration of the Australian Constitution, this Court should maintain an awareness of international expositions of the requirements of judicial independence and impartiality, including in respect of judicial tenure. Each complaint of individual and institutional infractions must be judged on its own merits and in an Australian context. Considerations of practicality, economy and post-service desire for further judicial service may be given weight. Constitutional provisions, treaty obligations and institutional arrangements will inevitably vary as between different countries. However, the significance of the elaboration of international human rights standards in the context of acting and part-time judges is now clear. Increasingly, the defects of such appointments, when measured against the requirements of fundamental human rights, have been 219 2000 JC 208 at 220-226. See also at 241-249 per Lord Reed. 220 Report to the Seminar of the Commonwealth Magistrates and Judges' Association, Larnaca, October 1998 cited in Starrs 2000 JC 208 at 223. 221 See also the reference in Starrs 2000 JC 208 at 242 by Lord Reed to the Universal Declaration on the Independence of Justice (June 1983), Annex IV, par 2.20: "The appointment of temporary judges and the appointment of judges for probationary periods is inconsistent with judicial independence." 222 Starrs 2000 JC 208 at 242-243 (citations omitted). Kirby identified and given effect by courts and tribunals of high authority in many countries. This Court should approach the resolution of the plaintiffs' challenge in the present proceedings with such worldwide developments in mind. The fact that they represent new criticisms of local judicial arrangements which may have lasted for some time is not a reason to reject them. The law is full of new insights. Kable itself was one of them. And in any case, the plaintiffs' institutional criticism concerns developments in the Australian judiciary, specifically the Supreme Court of New South Wales, that the evidence shows are less than twenty years old. Other contextual considerations: The three remaining steps in the plaintiffs' submissions can be dealt with more briefly. They require a recognition of other contextual features that lend colour to the alteration of the judicial institution of which the plaintiffs complain; the accumulation of changes so that they may be perceived as an attempted institutional modification, specifically of the State Supreme Court; and a recognition of the obligation of this Court, as the defender of the Constitution (and specifically of its judicial Chapter), to be vigilant against such alterations223. The materials before this Court lend support to the plaintiffs' submissions. Of greatest importance was the factual material concerning the incidence of the acting appointments described. The shift in practice is arguably important because of the essential fragility of judicial power and authority; and also because of the special importance it enjoys in a federation224. Inevitably, the role of the judiciary in federations occasions criticism, and sometimes attack, from members of the other branches of government. Such attacks have increased in recent years225, not only in Australia226. 223 Willheim, "Review of Australian Public Law Developments", (2006) 30 Melbourne University Law Review 269 at 294-295. 224 Drummond, "Towards a More Compliant Judiciary? – Part II", (2001) 75 Australian Law Journal 356 at 374-377. 225 Kirby, "Attacks on Judges – A Universal Phenomenon", (1998) 72 Australian Law Journal 599. 226 Ginsburg, "Judicial Independence", (1998) 72 Australian Law Journal 611; "Justice O'Connor Speaks Out on Inter-Branch Relations, Civic Education, and the State of the Federal Judiciary", (2006) 38(5) The Third Branch 6 at 6: "There is more intense criticism and concern about judges in the country than at any earlier time during my life." Kirby In such circumstances, this Court should be specially protective of the Judicature from intrusions by the other branches of government upon judicial independence and impartiality. If the Court fails to discharge this constitutional function, it cannot be assumed that others will fill the gap. This institutional point was made by Phillips JA in remarks on his retirement from the Court of Appeal of Victoria. The plaintiffs included those remarks in their materials. By reference to proposed legislation in Victoria, designed to facilitate an institutional increase in the use of acting judges in that State, his Honour said, in words applicable here227: "It is one thing to tolerate the occasional acting appointment to this court for a limited time or purpose; it is altogether different to institutionalise such temporary appointments at the discretion of the executive." These remarks must be clearly understood against the background of recent experience in Australia. In New South Wales, the appointment of acting judges in large numbers was first justified to remove a specific backlog. However, the temporary expedient soon became a permanent feature of the affected courts228. The objections to such an institutional change are many, quite apart from the fact that they were accomplished without specific debate in, or new laws enacted by, the State Parliament. To the extent that practising lawyers are temporarily appointed, later or meantime returning to their individual practices, the defects in manifest independence and impartiality are obvious. They were noticed in Starrs229 where Lord Reed cited some extra-curial remarks of Brennan CJ230, as well as the following remarks of my own231: "But what of the lawyer who would welcome a permanent appointment? What of the problem of such a lawyer faced with a decision which might be very upsetting to government, unpopular with the media or disturbing to some powerful body with influence? Anecdotal stories soon spread about the 'form' of acting judges which may harm their chances of permanent appointment in a way that is unjust. Such psychological pressures, however subtle, should not be imposed on decision-makers." 227 Phillips, "The corporatising of our courts", The Age, 24 March 2005. 228 Sackville, "Acting Judges and Judicial Independence", The Age, 28 February 2005. 229 2000 JC 208 at 243. 230 "The State of the Judicature", (1998) 72 Australian Law Journal 33 at 34. 231 Kirby, "Independence of the Judiciary – Basic Principle, New Challenges", address to the International Bar Association Conference, Hong Kong, 12 June 1998 at 12. Kirby At a time of increased media and other attacks on judges in Australia, an institutional change that shifts a significant cohort of the State judiciary from permanent tenured judges to part-time judges is seriously threatening to the independence and impartiality of that judiciary. In the nature of such threats, their impact is difficult to prove. But they are not theoretical. Governments are excused from appointing adequate numbers of permanent judges (with implications for staff, facilities and pensions). Litigants are subject to the risk of judges of short tenure and with inappropriate distractions. The tenured judiciary is undermined by such an alteration in its basic composition. The part-time and acting judges inevitably ride on the reputation earned by the tenured judiciary232. And although during service the acting judge is immune from day-to-day executive interference, their desire for reappointment as an acting judge (or confirmation as a permanent judge) renders the temporary appointee dependent on a decision by the Executive. This is not a feature of the tenure of permanent judges. Such judges, once appointed, are not beholden to the Executive for any wished-for continuation in office. Typically, they serve for a long interval, terminating on a specified birthday known in advance or upon earlier death or upon resignation decided by the judge. In Australia, the changed practice, instanced in these proceedings, endangers the separation of the senior judiciary from the Executive won in the Act of Settlement 1700233. It should be nipped in the bud, although by now the bud is in full flower. It is fair to say that the worst features of the short-term appointments of practising lawyers to the Supreme Court of New South Wales have given way, in more recent years, to the exclusive appointment of retired judges as acting judges of the Supreme Court. I accept that this reduces the institutional affront234. However, it does not remove it. If it is decided that the years of service of permanent judges should be extended, the course consistent with manifest independence and impartiality of the judiciary of the State is to extend (or remove) the age of mandatory retirement. Such an extension occurred when that age was altered in New South Wales from seventy years to seventy-two235. 232 Kirby, "Acting Judges – A Non-theoretical Danger", (1998) 8 Journal of Judicial Administration 69 at 74. 233 12 and 13 Wm III c 2. 234 Young, "Acting judges", (1998) 72 Australian Law Journal 653 at 653-654. The same may be said of the occasional deployment of visiting judges from other courts in Australia who hold permanent judicial commissions or the use of permanent trial judges in the appellate court of the same court: see French, "Judicial exchange: Debalkanising the courts", (2006) 15 Journal of Judicial Administration 142 at 235 Judicial Officers Act 1986 (NSW), s 44. This section was relevantly amended by the Judicial Officers Legislation (Amendment) Act 1990 (NSW), s 3, Sched 1, Pt 1. Kirby The objections of principle to the present arrangements for extension of such appointments include: That each extension is dependent in every case on the will of the Executive; That some retired judges clearly desire continuation in office and are thus beholden for this purpose, at regular and short-term rests, sometimes repeatedly, to the will of the Executive; That some acting judges mix intervals of judicial service with private professional activities on their own behalf, thereby breaking down the judicial culture of an exclusive, dedicated, tenured service that previously existed; and That acting judges lack the staffing, personal benefits and institutional resources of permanent judges and, as has been observed, in appellate courts, typically (but not always) appear to play a more limited role when compared with permanent appellate judges. To suggest that an acting judge, desirous of reappointment, confirmation as a permanent judge or promotion in appointment would be wholly uninfluenced, on the basis of a possible reappointment, by the risk of upsetting government with a decision, may be correct in the individual case. But it makes a considerable demand on human nature. Not all reasonable observers will be persuaded that it is so236. What is at stake in these proceedings, as the plaintiffs submitted, is not the accretion of flexibility and post-judicial retirement activities congenial to some former judges. Doubtless arguments can be advanced on both sides on these grounds. The danger of the institutional shift that has occurred, including in the Supreme Court of New South Wales, is that the State judicial institution is thereby weakened by an alteration of its membership to include a significant number, in stable proportion, of persons intermittently reliant upon government for renewal, at relatively short intervals. It is a development fundamentally wrong in principle. It is alien to the previous arrangements for judicial appointments to superior courts that obtained in Australia since colonial days. It is inconsistent with the constitutional character of the Supreme Court of a State 236 Crock, "Of Fortress Australia and Castles in the Air: The High Court and the Judicial Review of Migration Decisions", (2000) 24 Melbourne University Law Review 190 at 216. Kirby of the Commonwealth as existing at the time of Federation and for nearly ninety years thereafter237. In the nature of the accretions of executive power, once the process begins, it is likely to extend to other States238. Although the defendants argued that the law of disqualification for apparent bias was an adequate protection for judicial independence and integrity, that submission is unsound. That law exists to repair individual infractions in particular cases. The plaintiffs' challenge was more fundamental in character and concerned the validity of institutional arrangements. In Fardon v Attorney-General (Qld), McHugh J acknowledged that the Kable principle was more likely to be applied in the future "in respect of the terms, conditions and manner of appointment of State judges … rather than in the context of Kable-type legislation"239. So, in my opinion, it has proved in these proceedings. To conform to the federal Constitution, the previous condition of things must be restored. This Court should hold that, in respect of the Supreme Court of New South Wales, the repeated appointment of acting judges in recent years, in the numbers and under the arrangements shown in the record, is constitutionally impermissible. With respect, it is not sufficient to hint that in some future, unidentified and uncertain time, such a ruling might be made240. There comes a time when the number of acting judges appointed, and appointed persistently, works an identifiable institutional alteration to the courts affected. Defining when that moment arrives may be difficult. But it invites the discharge of the most important function entrusted to this Court by the Constitution. When the test of principle arises, this Court must respond. Who can seriously doubt that the power provided by s 37 of the Supreme Court Act is now being used in an utterly different way than was formerly the case and than 237 See the remarks of Alfred Deakin cited by Gleeson CJ on the centenary of the Court, (2003) 218 CLR v at vii: "Whatever is supreme in the State … ought to give a security to its justice against its power. It ought to make its judicature, as it were, something exterior to the State"; cf Re Macks; Ex parte Saint (2000) 204 CLR 158 at 265 [298]-[299]. 238 As evident in the introduction of the Courts Legislation (Judicial Appointments and Other Amendments) Act 2005 (Vic) inserting s 80D into the Constitution Act 1975 (Vic) to provide for appointment to a pool of acting judicial officers. 239 Fardon (2004) 78 ALJR 1519 at 1530 [43]; 210 ALR 50 at 65. It is institutional integrity that is important for Kable: see Kable (1996) 189 CLR 51 at 103; cf Fardon (2004) 78 ALJR 1519 at 1529-1530 [41]-[42]; 210 ALR 50 at 64-65. 240 Joint reasons at [97]. Kirby was expected when the facility of acting appointments was enacted? The institutional change undermines the integrity and independence of the Supreme Court in a manner that occasional, special, ad hoc acting appointments never did. This Court should say so. It should fashion orders to give effect to that constitutional conclusion. When Austin v The Commonwealth241 came before this Court, it was astute to find a constitutional implication protective of what the majority saw as the necessity of the State judiciary (specifically the State Supreme Court) to be free of a disability or burden on its judicial activities by reason of the operation upon the remuneration of State judicial officers of a federal law of income taxation of general application. I dissented in the result, although I recognised the protection afforded by the federal Constitution for "the very frame of the Constitution" as stated in Melbourne Corporation v The Commonwealth242 and hence, to some degree, of the integrity and independence of the State judiciary243. With respect to those of a different view, I regard any attitude of "Dammit, let 'em do it"244 as alien to this Court's proper constitutional function. To the extent that this philosophy is "coming along nicely"245, it is time for this Court to change direction. I also regard it as unfortunate, in these proceedings, where the threat to the integrity and independence of the State courts is much more direct, endemic and dangerous than in Austin, and where the interests of litigants and the public generally are involved, not just judicial remuneration, that a similar vigilance to the application of the implied principles of the Constitution has not attracted the support of the majority of this Court. Conclusions and orders Outcome of proceedings: By the foregoing analysis, Foster AJ had no legal authority to serve as an acting judge of the Supreme Court of New South Wales. To the extent that s 37 of the Supreme Court Act appeared to afford him such authority, and to sustain the commission that he received from the State (2003) 215 CLR 185. 242 (1947) 74 CLR 31 at 83 per Dixon J. See Austin (2003) 215 CLR 185 at 299 [275]. 243 Austin (2003) 215 CLR 185 at 293 [257], 302 [284]. 244 Bennett, "'Dammit, Let 'em do it!' The High Court and Constitutional Law: The 2005 Term", (2006) 29 University of New South Wales Law Journal 167. 245 Bennett, "'Dammit, Let 'em do it!' The High Court and Constitutional Law: The 2005 Term", (2006) 29 University of New South Wales Law Journal 167 at 181. Kirby Governor, it was invalid under the federal Constitution. The section should be read down so as to conform to the federal constitutional prerequisites. Those constitutional prerequisites permit exceptional and occasional appointments of acting State judges, including to the Supreme Court. However, they do not permit appointments, en bloc, of such a number of acting judges, for such durations as would have the effect of altering the character of the Supreme Court as an institution suitable for the vesting of federal jurisdiction under the Constitution. In the result, the purported commission as an acting judge given to Foster AJ was invalid. It was of no legal effect. It follows that Foster AJ's purported orders imposed on the plaintiffs are of no legal validity. No argument of waiver or acquiescence stands in the way of giving effect to this conclusion. Nor, in the face of the Constitution, does the supposed de facto officers doctrine. Orders: There are three proceedings in this Court: (1) an application commenced by writ in the original jurisdiction of this Court; (2) a cause removed from the Supreme Court; and (3) an application for special leave to appeal to this Court. I would dispose of the three proceedings in the following way: The questions reserved for the opinion of the Full Court should be answered as follows: All of the successive appointments of the Honourable Michael Leader Foster to act as a Judge of the Supreme Court of New South Wales were invalid; and The proceedings commenced in the Supreme Court of New South Wales by the Australian Securities and Investments Commission against William Arthur Forge and others on 26 April 2001 and tried before Foster AJ constituted a matter arising under a law made by the Parliament within the meaning of s 76(ii) of the Constitution. In the proceedings commenced by writ in this Court, the demurrers should be overruled. Judgment should be entered for the plaintiffs. The proceedings should be returned to a single Justice to be disposed of consistently with these reasons. In the application for special leave to appeal from the judgment of the Court of Appeal of the Supreme Court of New South Wales, the necessary extension of time should be provided for the bringing of the application out of time; special leave should be granted; the appeal should be allowed; the judgment of the Court of Appeal should be set aside; in place of that judgment it should be ordered that the appeal to the Court of Appeal be allowed and the judgment purportedly made by Foster AJ on 28 August 2002 be set aside. The matter should be remitted to the Supreme Court of New South Wales for retrial. There should be no order for the costs of the proceedings in the Supreme Court. Kirby The plaintiffs' costs should be paid by the unsuccessful parties in each proceeding. Callinan CALLINAN J. I agree with the reasons for judgment of Gummow, Hayne and Crennan JJ with respect to the application of the relevant transitional provisions to these matters. As to the validity of s 37 of the Supreme Court Act 1970 (NSW), the appointment of Foster AJ pursuant to it, and, in consequence, the validity of the proceedings before him, I would only wish to add a few observations to the reasons for judgment of Gleeson CJ, with which I agree. Before making those observations I should acknowledge my debt to Heydon J for his valuable history of acting judicial appointments in the colonies before federation. As the Chief Justice points out, there are likely to be differing views held by judges about judicial appointments. Some of these are canvassed in his Honour's reasons and in the joint judgment. In 1997 however, the eight Chief Justices of the States and Territories agreed upon the principles which should apply to judicial appointments, and the exercise of judicial power by judges appointed to non-federal courts246: "(1) Persons appointed as Judges of those Courts should be duly appointed to judicial office with security of tenure until the statutory age of retirement. However, there is no objection in principle to: the allocation of judicial duties to a retired judge if made by the judicial head of the relevant court in exercise of a statutory power; or the appointment of an acting judge, whether a retired judge or not, provided that the appointment of an acting judge is made with the approval of the judicial head of the court to which the judge is appointed and provided that the appointment is made only in special circumstances which render it necessary. The appointment of an acting judge to avoid meeting a need for a permanent appointment is objectionable in principle. The holder of a judicial office should not, during the term of that office, be dependent upon the Executive Government for the continuance of the right to exercise that judicial office or any particular jurisdiction or power associated with that office. 246 Declaration of Principles on Judicial Independence Issued by the Chief Justices of the Australian States and Territories, reproduced in "Independence of the Judiciary", (1996-1997) 15 Australian Bar Review 175 at 177. Callinan There is no objection in principle to the Executive Government appointing a judge, who holds a judicial office on terms consistent with principle (1), to exercise a particular jurisdiction associated with the judge's office, or to an additional judicial office, in either case for a limited term provided that: the judge consents; the appointment is made with the consent of the judicial head of the Court from which the judge is chosen; the appointment is for a substantial term, and is not renewable; the appointment is not terminable or revocable during its term by the Executive Government unless: the judge is removed from the first mentioned judicial office; or the particular jurisdiction or additional judicial office is abolished. It should not be within the power of Executive Government to appoint a holder of judicial office to any position of seniority or administrative responsibility or of increased status or emoluments within the judiciary for a limited renewable term or on the basis that the appointment is revocable by Executive Government, subject only to the need, if provided for by statute, to appoint acting judicial heads of Courts during the absence of a judicial head or during the inability of a judicial head for the time being to perform the duties of the office. There is no objection in principle to the appointment of judges to positions of administrative responsibility within Courts for limited terms provided that such appointments are made by the Court concerned or by the judicial head of the court concerned." That agreement about those principles was reached by persons of such eminence and experience necessarily means that they should be accorded respect by those responsible for judicial appointments. There are, of course, other matters to be weighed. Even though the population may be ageing, institutions, including courts, are likely to benefit from the infusion of younger appointees bringing with them enthusiasm and vigour, allied of course with suitable experience and qualifications. It would be unfortunate if any practice were to be adopted of obstructing that infusion by the Callinan widespread appointment of retired judges for long and repeated periods. There is also this consideration. The appointment of suitably qualified acting judges to the mainstream courts is likely to produce a better system of justice than the establishment of special tribunals outside that mainstream with restricted appeals from them, staffed by persons for relatively short terms, whether renewable or not, and therefore lacking the institutional history, traditions and protections found in the courts. I too would join in the orders proposed in the joint judgment. 243 HEYDON J. The relevant circumstances and the key statutory provisions are set out in other judgments. Acting judges In Kable v Director of Public Prosecutions (NSW)247 this Court invalidated a State law because it conferred a function on a State court which was inconsistent with the institutional integrity of that court as a repository of federal jurisdiction. The applicants seek to extend the principles stated in that case so as to invalidate a law on the ground that it creates in a State court a particular characteristic – acting judges as members. Assumptions in the applicants' argument. Certain legal assumptions underlay, or were clustered about, the applicants' arguments. Some were supported by authority; some have been raised in the past, but only as possibilities. Among them were the following: the States must preserve a system of State courts to act as repositories of the judicial power of the Commonwealth248; it is beyond the legislative power of a State so to alter the constitution or character of its Supreme Court that it ceases to meet the constitutional description "Supreme Court"249; State legislation will be invalid where it compromises the institutional integrity of State courts and affects their capacity to exercise federal jurisdiction impartially and competently250; it is necessary that a State court capable of exercising the judicial power of the Commonwealth be and appear to be an independent and impartial 247 (1996) 189 CLR 51. 248 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 139-140 per 249 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 111 per 250 Fardon v Attorney-General (Qld) (2004) 78 ALJR 1519 at 1528 [37] per McHugh J; 210 ALR 50 at 62-63. 251 North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146 at 163 [29] per McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ. the actuality and appearance of impartiality would be impaired if a Supreme Court were predominantly or chiefly constituted by acting judges; the actuality and appearance of impartiality would be impaired if a series of acting, rather than full-time, appointments were made in such numbers as to distort the character of a Supreme Court252; if State legislation takes such a form as to make the State Supreme Court an unfit repository of federal jurisdiction, it is that legislation which is invalid rather than the Commonwealth legislation which confers federal jurisdiction on the unfit repository253. The competing arguments in these proceedings did not centre on attempts to demonstrate the correctness or falsity of these propositions, but tended rather to assume their correctness. It is not necessary, for the purpose of deciding the present controversy, to reaffirm any of those propositions so far as they are supported by authority, or to reach any conclusion as to their correctness so far as they are not supported by authority. The arguments in these proceedings proceeded on the basis that even if those propositions were assumed to be correct, the applicants could not succeed without establishing something more. Concessions by the defendants and the interveners. The defendants and some of the interveners from time to time conceded that, accepting some or all of the assumptions of the applicants' arguments, there were some kinds of State legislation which might be invalid. Thus the Australian Securities and Investments Commission accepted "the possibility ... that the institutional integrity of a court as an independent and impartial tribunal might be undermined in practice by the manner or extent of the appointment of acting judges". New South Wales conceded that "a Supreme Court consisting entirely of acting judges, each appointed only for individual cases, would probably infringe the Kable principle." The Commonwealth made a similar concession. South Australia conceded that a court could not be composed entirely of acting judges but on the basis of construing s 37 of the Supreme Court Act 1970 (NSW) in the light of the power to appoint permanent judges in s 26. While many allowances must be made for the tact, and the tactics, of advocates, it was not necessary to make these concessions. They were not in any 252 This was a question posed, but a question which it was not necessary to discuss, in North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146 at 164 [32] per McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ. 253 This was assumed in Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 102-103 per Gaudron J. way tested in argument because no counsel advanced argument against them. It is possible that they are sound, but it should not be assumed that they are sound, and the decision whether they are sound must abide some case the facts of which make it necessary to resolve those questions one way or the other. Construction of s 37. It would be possible to undercut significant parts of the applicants' submissions by adopting a particular construction of s 37 as permitting the appointment of only limited classes of acting judge. But apart from South Australia, no party or intervener attempted to do this. It is better to proceed on the basis that s 37 is capable of being construed broadly without finally deciding what its true construction is. Foreign law. Considerable reliance was placed on cases on the European Convention for the Protection of Human Rights and Fundamental Freedoms, Art 6; the Canadian Charter of Rights and Freedoms, s 11(d) and the Bill of Rights of the Constitution of the Republic of South Africa, s 34. These documents all post-dated Ch III. They did not lead to Ch III and they were not based on Ch III. Accordingly, no assistance is to be obtained from cases on these documents in construing Ch III and evaluating its impact on State laws. Desirability of acting judges. I agree with the Chief Justice that it is important to distinguish between, on the one hand, one's personal view of the merits of appointing acting judges at all, or of appointing particular categories of persons as acting judges, and, on the other hand, those aspects of the phenomenon of acting judges which are relevant to the constitutional validity of the legislation providing for their appointment254. The applicants' submissions The primary position of the applicants was that any legislation permitting the appointment of part-time judges to Supreme Courts was invalid. An alternative and more qualified position which they advanced was that an acting judge sitting for a short period to clear up a list or meet some emergency in the court system might pass muster because the reason for the appointment would be explicable to a member of the public knowing the facts. But the circumstances in which this would be permissible were said to be "very special" or "very, very limited". The applicants submitted that references to "courts" in Ch III of the Constitution were references to courts that are manned by a full-time permanent judiciary whose tenure is fully secure and whose remuneration is secure. They submitted that by the time the present proceedings were dealt with by the trial judge, the appointment of acting judges as a part of the Supreme Court of New South Wales had become so extensive and so institutionalised that it had impaired the integrity of that Court or distorted its character. This had come about because the proportion of acting judges was so great that the Court's independence and impartiality "was placed under threat, if not in fact, then as a matter of perception." That was "a view traditionally held among lawyers, politicians and others" and any "ordinary member of the public informed of the relevant facts would justifiably perceive [the appointments of acting judges] as a threat to the independence and impartiality of the courts." The appointment of acting judges offends "the principle that there are not to be two qualities or grades of justice in relation to the exercise of the judicial power". The applicants also submitted that s 72 of the Constitution "is an affirmation ... that acting justices should not exercise the Judicial Power [of the Commonwealth]." The applicants submitted: "acting judges must of their very nature be seen as impermanent, possibly not qualified to be full time judges and not part of a stable structure ... They could ... also be perceived variously as fill-ins or appointed to save costs or supernumeraries or not committed fully to the task because of their potential to have other interests. ... [T]he existence or the perception of two classes of judges evincing two grades of justice is antipathetic to the Constitution". The applicants further submitted that the appointment of acting judges would carry the risk that they would be perceived to be likely to curry favour with the executive and not to be free of influence from the executive. The applicability of s 72 There is ample authority against the s 72 argument. It is clear that s 72 does not in terms require State judges to conform to its criteria. Chapter III refers several times to State courts, but s 72 is limited to federal courts255. Section 72 cannot be construed as requiring for State courts by implication what it does not require expressly. An acting judge in a Territory court may exercise the judicial power of the Commonwealth under s 71 of the Constitution while not being subject to the requirements of s 72, and in particular the proscription by s 72 of acting judges256. If so, given that a State court is as much one of the 255 The Commonwealth v Hospital Contribution Fund (1982) 150 CLR 49 at 63 per Mason J; Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 80-81 per Dawson J, 101-102 per Gaudron J, 115 per McHugh J. 256 Re Governor, Goulburn Correctional Centre; Ex parte Eastman (1999) 200 CLR 322; North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146 at 163-164 [31] per McHugh, Gummow, Kirby, Hayne, Callinan and "other courts" mentioned in s 71 as a Territory court, the proscription by s 72 of acting judges does not apply to State courts either. This conclusion leaves open the question whether the quantity and character of the acting judges appointed under State legislation can cause it to be invalid. Acting judges before federation The arguments of the applicants turn on the meaning of the expression "such other courts" in s 71 and "any court of a State" in s 77(iii) of the Those words now bear the meaning "they bore in the Constitution. circumstances of their enactment by the Imperial Parliament in 1900."257 In 1901 the expression "court" in those provisions must have meant those courts which had been Colonial Supreme Courts and had just become State Supreme Courts in the sense referred to in s 73. The expression "Colonial Supreme Court" referred to courts which had for a long time had provision for the appointment of acting judges: for six of the Colonies legislation had been enacted permitting this, and it was still in force in all six of them in 1901258. That well-informed lawyers would have regarded the expressions "such other courts" and "any court of a State" as bearing the meaning of a court with the potential to contain acting judges is supported by the fact that it was Edmund Barton – a man deeply involved in the drafting of the Constitution and in the process by which it obtained popular acceptance – who as Attorney-General introduced into the New South Wales Legislative Assembly the Bill which became the Judicial Offices Act 1892. Indeed, both Edmund Barton259 and Richard O'Connor260, who played 257 King v Jones (1972) 128 CLR 221 at 229 per Barwick CJ. 258 For New South Wales, see Charter of Justice 1823 (Imp) (4 Geo IV c 96), s 1; Australian Courts Act 1828 (Imp) (9 Geo IV c 83), s 1; District Courts Act 1858 (22 Vic No 18), s 26; Judicial Offices Act 1892 (55 Vic No 26), s 3; Supreme Court and Circuit Courts Act 1900, s 13. For Victoria, see An Act to make provision for the better Administration of Justice in the Colony of Victoria 1852 (15 Vic No 10), s 5; Supreme Court Amending Act 1885 (49 Vic No 834), s 3; Supreme Court Act 1890, s 14. For Queensland, see Supreme Court Act 1867 (31 Vic No 23), s 33; Acting Judges Act 1873 (37 Vic No 5), s 1; District Courts Act 1891 (55 Vic No 33), s 19; Supreme Court Act 1892 (55 Vic No 37), s 12; Supreme Court Act (No 2) 1892 (56 Vic No 10), s 2. For Western Australia, see Supreme Court Ordinance 1861 (24 Vic No 15), s 11; Supreme Court Act 1880 (44 Vic No 10), s 12. For South Australia, see An Act for the Establishment of a Court to be Called the Supreme Court of the Province of South Australia 1837 (7 Wm IV No 5), s 5 and Supreme Court Act 1856 (Act No 31 of 1855-6), s 5. In Tasmania, the Australian Courts Act 1828 (Imp) (9 Geo IV c 83), s 1, was applicable. See also An Act for the effectual Administration of Justice in the Supreme Court of Van Diemen's Land 1831 (2 Wm IV No 1), s 3. 259 Bolton, Edmund Barton, (2000) at 131-132. a comparable role in developing the Constitution and having it adopted, had served as acting judges of the Supreme Court of New South Wales before federation. There were other well-known appointments of acting Supreme Court judges before federation in New South Wales, for example Sir William Manning in 1848-1849261. Three Queensland illustrations are Sheppard DCJ262, Ratcliffe Pring, a former Attorney-General263, and Windeyer J, from the Supreme Court of New South Wales264. In Victoria, Sir Henry Wrenfordsley, who had been Chief Justice of Western Australia in 1880-1883265, was appointed an acting Supreme Court judge in 1888266 and Edward Hodges, "a leader of the Bar", in 1889267. In Western Australia, Edward Stone acted as Chief Justice in 1881 and as an acting puisne Supreme Court judge in 1883-1884268 and Sir Henry Wrenfordsley was sworn in as Acting Chief Justice in 1890269. In Tasmania, Sir James Dowling, Chief Justice of New South Wales, was an acting judge in 1845270, J W Rogers 260 Rutledge, "Richard Edward O'Connor", (1988) 11 Australian Dictionary of Biography 56 at 57. 261 McPherson, The Supreme Court of Queensland 1859-1960: History Jurisdiction Procedure, (1989) at 55. 262 McPherson, The Supreme Court of Queensland 1859-1960: History Jurisdiction Procedure, (1989) at 55-56. 263 McPherson, The Supreme Court of Queensland 1859-1960: History Jurisdiction Procedure, (1989) at 56 and 184-185. 264 McPherson, The Supreme Court of Queensland 1859-1960: History Jurisdiction Procedure, (1989) at 204; Windeyer, "A Presage of Federation", (1976) 61 Journal of the Royal Australian Historical Society 311 at 318-319. 265 Louch, "Sir Henry Thomas Wrenfordsley", (1976) 6 Australian Dictionary of Biography 440 at 441. 266 Bennett, Lives of the Australian Chief Justices: Sir Henry Wrenfordsley, (2004) at 267 Bennett, Lives of the Australian Chief Justices: Sir Henry Wrenfordsley, (2004) at 268 Castles, An Australian Legal History, (1982) at 343-344. 269 Bennett, Lives of the Australian Chief Justices: Sir Henry Wrenfordsley, (2004) at 270 Ely (ed), Carrel Inglis Clark: The Supreme Court of Tasmania, Its First Century was an acting judge in 1884-1885271 and Sir Henry Wrenfordsley was an acting judge in 1885-1887272. In South Australia, Henry Jickling, a barrister, served as an acting judge of the Supreme Court in 1837-1839273. Gresson J and Martin J were appointed temporary judges of the Supreme Court of New Zealand before they were appointed permanently, and four other temporary judges were appointed before federation (one after resignation as a permanent puisne judge)274. These appointments are not the only examples of temporary appointments to the Supreme Courts of the Australasian Colonies prior to federation. Nor were all of them obscure events. Many of them were controversial and of wide interest. In Victoria, Sir Henry Wrenfordsley's appointment in 1888 attracted conflicting but well-publicised responses. The Argus said he was "held in high esteem in this colony", but at a meeting of the Bar held to protest about the appointment he was described as a "journeyman judge, who went about with robes in his carpet bag"275. In South Australia, Jickling J's appointment was controversial, and on one occasion he was hissed off the bench by the Bar and the public276. In Queensland, the appointments of Sheppard DCJ and Ratcliffe Pring were challenged in litigation277. 271 Ely (ed), Carrel Inglis Clark: The Supreme Court of Tasmania, Its First Century 272 Bennett, Lives of the Australian Chief Justices: Sir Henry Wrenfordsley, (2004) at 79; Ely (ed), Carrel Inglis Clark: The Supreme Court of Tasmania, Its First Century 1824-1924, (1995) at 181. 273 Whitfeld, Founders of the Law in Australia, (1971) at 142. 274 Cooke (ed), Portrait of a Profession: The Centennial Book of the New Zealand Law Society, (1969) at 420-422. 275 Bennett, Lives of the Australian Chief Justices: Sir Henry Wrenfordsley, (2004) at 276 Hague, Hague's History of the Law in South Australia 1837-1867, (2005), vol 1 at 112; Whitfeld, Founders of the Law in Australia, (1971) at 142. 277 McPherson, The Supreme Court of Queensland 1859-1960: History Jurisdiction Procedure, (1989) at 55-56. The appointment of Windeyer J was necessitated by Queensland Investment and Land Mortgage Co Ltd v Grimley. Four of the five defendants were "leading members of Queensland society" and were sued for misconduct as directors of the plaintiff. One defendant, Sir Arthur Palmer, was a former Premier and Leader of the Opposition; at the time of the proceedings he was President of the Legislative Council and Administrator of the Colony. Another, Sir Thomas McIlwraith, had also been Premier and Leader of the Opposition, and at the time of the proceedings he was Colonial Treasurer. A third, E R Drury, was General Manager of the Queensland National Bank, which had a monopoly of banking business in the Colony. A fourth, F H Hart, was a leading businessman and a member of the Legislative Council278. The trial began on 5 November 1891 before Lilley CJ and a jury. Lilley CJ was another former Premier, had been a vigorous political opponent of Palmer and McIlwraith, and was on bad terms with them. The Chief Justice's son appeared as counsel for the plaintiff before him as in the past he often had, with considerable success. For some time trial judges on the Supreme Court had participated in appeals from their own judgments. To prevent this happening, and while the trial was still proceeding, Sir Samuel Griffith, the Premier and Attorney-General, procured the passing of the Supreme Court Act 1892. Section 4 prevented Lilley CJ from sitting on the appeal. Since two of the other four Supreme Court judges disqualified themselves, and since an appeal could only be heard by three judges, a temporary appointment was called for. The Acting Judges Act 1873, s 1, permitted a temporary appointment when a judge was absent on leave, but no judge was absent on leave. For that reason s 12 of the 1892 Act provided that if the Chief Justice certified that from any cause whatsoever a sufficient number of judges of the court competent to sit upon the hearing of any matter or proceeding in the Full Court could not be secured, or could not be secured without detriment to the ordinary business of the court, the Governor-in-Council could appoint a District Court judge or any person qualified to be a judge of the court to act as a judge of the court for the hearing of that matter. The jury verdict was given on 21 May 1892 favourably to the defendants, but on 16 August 1892 Lilley CJ, after argument, made orders which disregarded and contradicted many of the answers which the jury gave. An appeal was then brought. Lilley CJ gave a certificate under s 12 on 23 August 1892. Sir Samuel Griffith decided to appoint Windeyer J, of the Supreme Court of New South 278 Gibbs, "A Nineteenth Century Cause Célèbre: Queensland Investment and Land Mortgage Company Ltd v Grimley", (1987) 13 Royal Historical Society of Queensland Journal 73 at 74-76. Wales, and negotiated with Edmund Barton, Acting Premier279 and Attorney- General for New South Wales, to this end280. A doubt then arose as to whether a judge of the Supreme Court of New South Wales was "qualified to be a Judge of" the Supreme Court of Queensland within the meaning of s 12, not being a barrister of the Supreme Court of Queensland, or of New South Wales or of Victoria or England or Ireland or an advocate of Scotland281. Barton told Griffith that it was essential that all doubts be removed. On 8 September 1892 the Supreme Court Bill No 2 was introduced by Griffith into the Legislative Assembly. Griffith said that the Bill dealt with the matter in "what I think I may call a federal spirit, by providing that a judge of any of the Australian colonies shall be qualified to sit as acting judge in the Supreme Court of Queensland to constitute the appellate court." The Bill passed the Legislative Assembly without opposition. By 9 September 1892, Windeyer J had indicated willingness to act. The Bill passed the Legislative Council, and received Royal Assent on 13 September 1892. Windeyer J was appointed an acting judge, and presented his commission on 14 September 1892 in a crowded courtroom. Griffith welcomed Windeyer J as one of the original members of the Queensland Bar, who had appeared in the Supreme Court of Moreton Bay before Queensland separated from New South Wales. The appeal was then heard over some days. On 12 October 1892 the appeal was allowed in a judgment read for two hours by Windeyer J to another crowded courtroom, and reported the next day at length in the Brisbane Courier282. Sir Thomas McIlwraith then initiated steps to have Lilley CJ removed from office on the grounds of bias in his conduct of the trial, and within a 279 Rutledge, "Sir Edmund Barton", (1979) 7 Australian Dictionary of Biography 194 280 See Windeyer, "A Presage of Federation", (1976) 61 Journal of the Royal Australian Historical Society 311 at 315-316. (Sir Victor inserted a corrigendum into the copy in the Joint Law Courts Library, Sydney, changing "Martin" to "Barton" in his transcription of Griffith's letter of 4 September 1892 to 281 See Supreme Court Act 1867 (Q) (31 Vic No 23), s 8. 282 Queensland Investment and Land Mortgage Co Ltd v Grimley (1892) 4 QLJ Supp 1. The proceedings before Lilley CJ were reported at 4 QLJ 224, and the argument before the Full Court is reported at 4 QLJ 243. See generally McPherson, The Supreme Court of Queensland 1859-1960: History Jurisdiction Procedure, (1989) at 203-205; Windeyer, "A Presage of Federation", (1976) 61 Journal of the Royal Australian Historical Society 311 at 313-314, 319-321; Gibbs, "A Nineteenth Century Cause Célèbre: Queensland Investment and Land Mortgage Company Ltd v Grimley", (1987) 13 Royal Historical Society of Queensland Journal 73. fortnight the Chief Justice "bowed to the storm" and announced his intention to retire. Lilley CJ, after retiring the following year, and thus clearing the way for Sir Samuel Griffith's appointment as Chief Justice, stood for Parliament against McIlwraith but was defeated283. These extraordinary happenings – Sir Harry Gibbs called the case a "cause célèbre" and described it as a "rather sad story"284 – cannot have been forgotten by Barton, Griffith, or anyone else involved in drafting Ch III. Indeed, Griffith CJ recalled these events, no doubt among others, during the course of argument in Stockwell v Ryder285. The Brisbane Courier on 2 October 1906 contained the following passage: "'I wonder', remarked Sir Samuel, 'whether it has ever occurred to any one to doubt whether under the Constitution any one can be appointed temporarily a Judge of the Supreme Court? I know it has been done for a great many years, and I wonder whether it has occurred to any one to doubt whether it can be done.' His Honour, then recollecting his own political days, added: 'I admit I have done it myself, but I have made mistakes just the same as other people.'" It is not clear which Constitution Griffith CJ had in mind. The applicants downplayed this background by saying that they accepted that at the time of federation it was well understood that the full-time judges in the Supreme Courts of the Colonies were "sometimes assisted by an acting judge or judges to meet special circumstances". The possibility that State legislation could achieve the same result now without invalidity was one which the its fallback position applicants' primary submission eschewed, although accommodated it. In the very vague terms in which it is put, the exception cannot be correct. The question remains whether s 37 by itself, or s 37 in the light of the appointments made under it, is open to the criticisms advanced by the applicants. Safeguards in the New South Wales legislation 283 Gibbs, "A Nineteenth Century Cause Célèbre: Queensland Investment and Land Mortgage Company Ltd v Grimley", (1987) 13 Royal Historical Society of Queensland Journal 73 at 81-82. 284 Gibbs, "A Nineteenth Century Cause Célèbre: Queensland Investment and Land Mortgage Company Ltd v Grimley", (1987) 13 Royal Historical Society of Queensland Journal 73 at 82. 285 (1906) 4 CLR 469. The arguments of the applicants did not deal effectively with the similarities between permanent and acting judges of the Supreme Court of New South Wales, particularly the similarities between the safeguards affecting the two classes. Like permanent judges, acting judges of the Supreme Court of New South Wales are appointed by the Governor on ministerial advice by commission under the public seal of the State286. Like permanent judges, acting judges are qualified for appointment if they are legal practitioners of at least seven years' standing, or if they hold or have held a judicial office of New South Wales or of the Commonwealth, or of another State or a Territory287. Like permanent judges, acting judges are obliged to take not only the oath of allegiance but also the judicial oath (to "do right to all manner of people after the laws and usages of the State of New South Wales without fear or favour, affection or ill-will")288. These oaths are not seen as mere words. Acting judges have "all the powers, authorities, privileges and immunities and fulfil all the duties of" permanent judges289. Among those immunities is immunity from suit, and among those privileges is the protection afforded by the law relating to contempt of court. The protection and immunity of both permanent and acting Supreme Court judges performing duties as judges extends to judges when performing ministerial duties as judges290. The remuneration of acting judges, like that of permanent judges, is, subject to parliamentary disallowance291, determined from time to time by the Statutory and Other Offices Remuneration Tribunal292, is directly appropriated from the Consolidated Fund293, is a statutory entitlement294 and cannot be reduced during the term of the respective officers295. Both acting and permanent judges 286 Supreme Court Act 1970 (NSW), s 37(1). 287 Supreme Court Act 1970 (NSW), ss 26(2) and 37(2). 288 Oaths Act 1900 (NSW), s 8 and Fourth Schedule. 289 Supreme Court Act 1970 (NSW), s 37(3). 290 Judicial Officers Act 1986 (NSW), s 44A (which did not commence operation until 7 July 2003, after Foster AJ began hearing the relevant proceedings in 2002, but which is illustrative of the regime of safeguards in place). 291 Statutory and Other Offices Remuneration Act 1975 (NSW), s 19A. 292 Statutory and Other Offices Remuneration Act 1975 (NSW), ss 13 and 20. 293 Statutory and Other Offices Remuneration Act 1975 (NSW), s 11(3). 294 Supreme Court Act 1970 (NSW), ss 29(1) and 37(3B). 295 Statutory and Other Offices Remuneration Act 1975 (NSW), s 21(1) and Sched 1. are only removable from office by the Governor after the Governor has received, first, a report of the Conduct Division of the Judicial Commission of New South Wales setting out its opinion that the matters referred to in the report could justify parliamentary consideration of the removal on the ground of proved misbehaviour or incapacity296 and, secondly, an address from both Houses of Parliament in the same session, seeking removal on the ground of proved misbehaviour or incapacity297. Both acting and permanent judges are subject to the same system of complaints and discipline administered by the Judicial Commission of New South Wales298 and to the same capacity for scrutiny by the Independent Commission Against Corruption299. The intra-curial arrangements for the transaction of the business of the Court of Appeal apply indifferently as between permanent Judges of Appeal and acting Judges of Appeal, and the intra- curial arrangements for the transaction of the business of a Division apply indifferently as between permanent judges appointed or nominated to that Division and acting judges so appointed or nominated300. Hence the same practices in relation to the court administration apply – assignment of judges, sittings of the court and allocation of courtrooms. Apart from those statutory provisions treating permanent and acting Supreme Court judges indifferently, both permanent and acting judges are subject indifferently to the general law and subject to the same duty to apply it. They are subject to the same possibilities and procedures of appeal and the same requirements of impartiality and of apparent impartiality. They must treat all parties equally, and protect the right of the parties to meet the case each is making against the other. They are bound by the same rules of natural justice. They are bound by the same duties to hear cases fairly, find facts accurately, and apply the law, correctly ascertained, to the facts found. In addition, since the work of both permanent and acting judges takes place in public, and since the reasons for judgment of both permanent and acting judges are publicly available, acting judges are equally open to the same scrutiny by their peers, the profession and the public as permanent judges. Both acting and permanent judges share the same professional ethos, tradition and culture. They share the same concern for professional reputation. There is no legislative provision permitting interference by the executive or the legislature in the work 296 Judicial Officers Act 1986 (NSW), s 41. 297 Constitution Act 1902 (NSW), s 53. 298 Judicial Officers Act 1986 (NSW), s 3(3). 299 Independent Commission Against Corruption Act 1988 (NSW), s 3 (definition of "public official"). 300 Supreme Court Act 1970 (NSW), s 39. of acting judges any more than there is in relation to permanent judges, and there are equally well-established customs precluding interference. It was not suggested by the applicants that the actual process and techniques by which acting judges tackle the issues thrown up for their decision differ from those employed by permanent judges. Consequences of the statutory and other safeguards From the considerations just outlined it follows that it is necessary to reject the following submissions made by the applicants: that "there is a vast difference both conceptually and as a matter of perception between a court ... constituted by a full time judge and one constituted by an acting judge appointed for a short term"; that "[t]here is clearly a vast difference between a court constituted by full time Judges and one constituted by full time Judges and a substantial number of acting judges"; that "acting judges must ... be seen as impermanent, possibly not qualified to be full time judges and not part of a stable structure"; that acting judges "could ... be perceived variously as fill-ins or appointed to save costs or supernumeraries or not committed fully to the task because of their potential to have other interests"; and that the appointment of acting judges gives rise to "the existence or the perception of two classes of judges evincing two grades of justice". Threats to actual and perceived independence and impartiality So far as the applicants contended that the proportion of acting judges appointed to the Supreme Court of New South Wales placed the independence and impartiality of that Court under threat either as a matter of fact or as a matter of perception, there was no actual evidence of that fact or that perception. It may be a view that some lawyers, politicians and others hold, but it has not been shown that many other persons hold that view. In the absence of evidence, it is necessary to resort to estimations of how reasonable bystanders would probably view matters. To start with, it must be remembered that a perceived tendency to undermine public confidence in the impartiality of a Supreme Court is not by itself a touchstone of invalidity301. The applicants submitted that acting judges are perceived to lack independence, because of a desire for further appointment, because of work done for the executive in the past by the appointee or the hope of offers of work from the executive in the future, and because they "can become beholden to other interests". The argument based on these amorphously expressed concerns proves too much: permanent judges too can hope for promotion to a higher court or a higher judicial office; they too can receive acting appointments in those courts or those offices (as has happened since the first half of the 19th century); they too can hope for work at the hands of the executive; they too may have done work for the executive in the past; and they too can become beholden to other interests in hoping for work, whether from the government or from private interests, on leaving the bench. There are institutional, professional and ethical checks against these risks, and there are obstacles raised by personal integrity, but all these checks and obstacles operate as fully for acting judges as for permanent ones. Any specific suspicions of actual or apprehended bias can be dealt with by ad hoc applications which can be considered on their merits in the ordinary way302. The acting Supreme Court judges during the relevant period comprised ex-Federal Court judges whose career on that Court had been terminated on attainment of the retirement age of 70, other ex-Federal Court or Supreme Court judges, Masters and District Court judges. To the extent that estimations of likely public perceptions are relevant, an objective observer would be likely to see the acting appointments as, in the case of ex-judges, a continuation for a short time of an existing judicial career, and in the case of Masters and District Court judges, as service in a judicial role, different, but not radically different, from that in which they were already engaged; and would be likely to see the acting judges appointed as suitable and qualified persons whose circumstances and independence were indistinguishable from those of the permanent judges. In short, the history of acting judges in the Colonies before federation points to the conclusion that Ch III contemplates the validity of State legislation permitting the appointment of acting judges. The arguments of the applicants concentrated on the numbers of acting judges as a proportion of the whole. Those are misleading figures, for not all acting judges work full-time during the 301 Fardon v Attorney-General (Qld) (2004) 78 ALJR 1519 at 1525 [23] per Gleeson CJ, 1539 [102] per Gummow J, 1546 [144] per Kirby J; 210 ALR 50 at 302 Barton v Walker [1979] 2 NSWLR 740 at 757-758 per Samuels JA (Reynolds and Glass JJA concurring). period in which they are acting. To compare them with appointments of a single acting judge to a Colonial Supreme Court ignores the possible impact of even a single appointment of that kind on courts with the very low memberships of those days. But even apart from those qualifications, if the relevant criterion is the protection of judicial independence and impartiality, the conclusion of Gummow, Hayne and Crennan JJ303 that the numbers of judges appointed alone cannot be decisive and that it is necessary to consider why they have been appointed and what safeguards are in place to protect judicial independence and impartiality must, with respect, be correct. There is no evidence as to why the acting judges were appointed. There are ample safeguards to protect judicial independence and impartiality. Section 37 of the Supreme Court Act 1970 (NSW) is not invalid. Corporations Act 2001 (Cth) – Ch 10 I agree with the reasoning of Gummow, Hayne and Crennan JJ. Orders I agree with the orders proposed in relation to each of the proceedings by Gummow, Hayne and Crennan JJ.

HIGH COURT OF AUSTRALIA APPLICANT AND THE STATE OF NEW SOUTH WALES RESPONDENT Beckett v New South Wales [2013] HCA 17 8 May 2013 ORDER Special leave to appeal granted. The appeal be treated as instituted and heard instanter and allowed with costs. Set aside that part of order (b) of the Court of Appeal of the Supreme Court of New South Wales made on 2 May 2012 dismissing the appeal with costs and, in lieu thereof, order that: appeal allowed with costs; and the answer of Davies J to question A of the respondent's notice of motion filed on 16 May 2011 be set aside and, in lieu thereof, question A be answered "No". The respondent pay the appellant's costs of the separate On appeal from the Supreme Court of New South Wales Representation G O'L Reynolds SC with S M Nixon and G R Rubagotti for the applicant (instructed by Turner Freeman Lawyers) B W Walker SC with W G Roser SC and P J Saidi for the respondent (instructed by Crown Solicitor (NSW)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Beckett v New South Wales Torts – Malicious prosecution – Elements – Whether proof of innocence required where proceedings terminated by entry of nolle prosequi – Whether entry of nolle prosequi terminates proceedings in favour of accused – Whether Davis v Gell (1924) 35 CLR 275 should be followed – Whether direction that no further proceedings be taken against person under s 7(2)(b) of Director of Public Prosecutions Act 1986 (NSW) equivalent to termination by entry of nolle prosequi. Words and phrases – "favourable termination of the prosecution", "malicious prosecution", "nolle prosequi". Director of Public Prosecutions Act 1986 (NSW), s 7(2). FRENCH CJ, HAYNE, CRENNAN, KIEFEL AND BELL JJ. This appeal is concerned with proof of the tort of malicious prosecution in a case in which the criminal proceeding giving rise to the claim is terminated by a direction from the Director of Public Prosecutions ("the Director") that no further proceedings be taken against the person1. With one exception, the plaintiff's guilt or innocence of the criminal charge is not an issue in the action for malicious prosecution. The exception, allowed in Commonwealth Life Assurance Society Ltd v Smith2 on the authority of Davis v Gell3, requires the plaintiff to prove his or her innocence at the trial of the civil action where the prosecution was terminated by the entry of a nolle prosequi by the Attorney-General ("the Davis exception"). The Attorney-General, or a person acting under the authority of the Attorney-General, may enter a nolle prosequi4 at any time after the indictment is signed and before the return of the verdict. The entry of the nolle prosequi brings the proceedings to a halt without determination of guilt. It does not bar the subsequent prosecution of the accused on the same charge5. Section 7(2)(b) of the Director of Public Prosecutions Act 1986 (NSW) ("the DPP Act") confers the same functions on the Director as the Attorney-General with respect to directing that there be no further proceedings against a person who has been committed for trial. The two questions raised in the appeal are whether the Davis exception is good law and, if it is, whether the termination of a prosecution in the exercise of the Director's statutory power is within it. 1 Director of Public Prosecutions Act 1986 (NSW), s 7(2)(b). (1938) 59 CLR 527; [1938] HCA 2. (1924) 35 CLR 275; [1924] HCA 56. 4 R v Dunn (1843) 1 Car & K 730 [174 ER 1009]; R v Colling (1847) 2 Cox CC 184; R v Rowlands (1851) 17 QB 671 [117 ER 1439]; R v Allen (1862) 1 B & S 850 5 Broome v Chenoweth (1946) 73 CLR 583 at 599 per Dixon J; [1946] HCA 53; R v Sneesby [1951] St R Qd 26; R v Ferguson; Ex parte Attorney-General [1991] 1 Qd R 35. Hayne Crennan Bell The tort of malicious prosecution The wrong for which the tort provides redress is the malicious instigation or maintenance of the prosecution of the plaintiff without reasonable and probable cause. The elements of the tort are set out in A v New South Wales. In summary, the plaintiff must prove four things: (1) the prosecution was initiated by the defendant; (2) the prosecution terminated favourably to the plaintiff; (3) the defendant acted with malice in bringing or maintaining the prosecution; and (4) the prosecution was brought or maintained without reasonable and probable cause6. A v New South Wales considered the third and fourth of those elements. One aspect of that consideration which assumes importance in this appeal is the discussion of the temporal dimension of the tort: proof of the absence of reasonable and probable cause directs attention to the state of affairs at the time the defendant is alleged to have instigated or maintained the prosecution7. Evidence bearing on the existence of reasonable and probable cause is confined to the material available to the defendant at the time the prosecution was commenced or maintained8. The second element of the tort is a requirement of policy. Differing accounts of the rationale for the requirement are found in the early cases9. It is said that a person should not be permitted to allege that a pending proceeding is "unjust"10, and that the possibility of a conflict in judicial decisions should not be allowed11. The rationales for the rule evince the concern of the law with the 6 A v New South Wales (2007) 230 CLR 500 at 502 [1] per Gleeson CJ, Gummow, Kirby, Hayne, Heydon and Crennan JJ; [2007] HCA 10. 7 A v New South Wales (2007) 230 CLR 500 at 520 [59] per Gleeson CJ, Gummow, Kirby, Hayne, Heydon and Crennan JJ. 8 A v New South Wales (2007) 230 CLR 500 at 520 [59] per Gleeson CJ, Gummow, Kirby, Hayne, Heydon and Crennan JJ. 9 See Commonwealth Life Assurance Society Ltd v Smith (1938) 59 CLR 527 at 538- 540 per Rich, Dixon, Evatt and McTiernan JJ. 10 Waterer v Freeman (1792) Hob 266 at 267 [80 ER 412 at 413]; Gilding v Eyre (1861) 10 CB (NS) 592 at 604 [142 ER 584 at 589]; Varawa v Howard Smith Co Ltd (1911) 13 CLR 35 at 47 per Griffith CJ, 74-75 per O'Connor J; [1911] HCA 46. 11 Basebé v Matthews (1867) LR 2 CP 684 at 687 per Byles J; Varawa v Howard Smith Co Ltd (1911) 13 CLR 35 at 47 per Griffith CJ, 82-83 per Isaacs J. Hayne Crennan Bell consistency of judicial determinations, a concern that is distinct from proof of actual innocence or guilt: a plaintiff who is wrongfully convicted of an offence cannot maintain an action for malicious prosecution notwithstanding that he or she may possess irrefutable proof of innocence12. The requirement that the prosecution has terminated avoids the possibility of conflict in the decisions of the court trying the criminal charge and the court trying the civil action. Any termination that does not result in conviction is favourable to the plaintiff for the purposes of the civil action13. Prosecutions may terminate in a number of ways without verdict: the magistrate may not commit for trial; the Director may not find a bill of indictment; the Director may direct that no further proceedings be taken after a bill has been found; or the Attorney-General may enter a nolle prosequi. The plaintiff has no control over the termination of the proceedings in any of these ways and in those circumstances it would be unjust to deprive him or her of the ability to recover for the tort14. As Professor Salmond explained it15: "What the plaintiff requires for his action is not a judicial determination of his innocence, but merely the absence of any judicial determination of his guilt." As will appear, the Davis exception was allowed in Smith because of uncertainty concerning whether the entry of a nolle prosequi terminates the prosecution, and not because the innocence of the plaintiff was an issue in the civil action. At this juncture it is convenient to turn to the decisions in Davis and Smith. 12 Castrique v Behrens (1861) 3 El & El 709 at 722-723 [121 ER 608 at 613]; Basebé v Matthews (1867) LR 2 CP 684. 13 Varawa v Howard Smith Co Ltd (1911) 13 CLR 35 at 89 citing Bynoe v Bank of England [1902] 1 KB 467; Davis v Gell (1924) 35 CLR 275 at 289-292 per Isaacs ACJ; Salmond, The Law of Torts, 6th ed (1924) at 595. 14 See Varawa v Howard Smith Co Ltd (1911) 13 CLR 35 at 89 per Isaacs J. 15 Salmond, The Law of Torts, 6th ed (1924) at 595. Hayne Crennan Bell The prosecution in Davis was terminated by the entry of a nolle prosequi after Mr Gell entered a plea of not guilty to the presentment in the Supreme Court of Victoria16. At the trial of Mr Gell's subsequent action for damages for malicious prosecution, the jury were directed to assume his innocence because the prosecution had terminated in his favour. The jury returned a verdict for Mr Gell. Mr Davis applied for a new trial contending that the direction to assume Mr Gell's innocence was wrong17. He appealed from the dismissal of his application to the Full Court of the Supreme Court of Victoria18. The Full Court dismissed the appeal, holding that any error had not occasioned a miscarriage of justice. From that decision Mr Davis appealed to this Court. Isaacs ACJ said that an element of the tort is that "[t]he prosecution must have been groundless"19. In this respect, his Honour relied upon the statements of Cleasby B in Johnson v Emerson that the prosecution must be "wholly unfounded" and "really without foundation"20. Isaacs ACJ explained that groundlessness in this context "means that the plaintiff in the civil action is innocent, because, the prosecution being groundless, there was, when all the circumstances are known, no real cause for it"21. The entry of a nolle prosequi established the favourable termination of the prosecution, but it remained for the plaintiff to prove his innocence to succeed in his action22. In the case of a prosecution which terminated in the plaintiff's acquittal, the policy against permitting conflicting decisions23 gave rise to an irrebuttable presumption of 16 Davis v Gell (1924) 35 CLR 275 at 278 per Isaacs ACJ. 17 Davis v Gell (1924) 35 CLR 275 at 279. 18 Gell v Davis [1924] VLR 315. 19 Davis v Gell (1924) 35 CLR 275 at 282. 20 Davis v Gell (1924) 35 CLR 275 at 284 citing (1871) LR 6 Ex 329 at 344. 21 Davis v Gell (1924) 35 CLR 275 at 285 (emphasis in original). 22 Davis v Gell (1924) 35 CLR 275 at 291-292. 23 Davis v Gell (1924) 35 CLR 275 at 292. Hayne Crennan Bell innocence at the trial of the civil action24. However, in the case of a prosecution which terminated favourably to the plaintiff without verdict, it remained for the plaintiff to prove his innocence in accordance with the ordinary rules of evidence25. Gavan Duffy J agreed that proof of innocence was an element of the tort. The trial judge had been wrong to direct that the plaintiff's innocence was to be assumed from the entry of the nolle prosequi. His Honour found it unnecessary to consider the position in the case of a prosecution that terminated in the plaintiff's acquittal26. Starke J held that innocence was an issue in the civil action on the authority of Cox v English, Scottish, and Australian Bank Ltd27 and Crowley v Glissan (No 2)28. These approved a statement made by Bowen LJ in Abrath v North Eastern Railway Co that "in an action for malicious prosecution the plaintiff has to prove, first, that he was innocent and that his innocence was pronounced by the tribunal before which the accusation was made"29. Starke J considered that public policy was against re-litigation of the issue of innocence in the civil action in a case in which the prosecution terminated in acquittal. Proceedings terminated by the entry of a nolle prosequi, the ignoramus of a grand jury, the refusal of a justice to commit for trial, some want of jurisdiction or technical defect in the indictment were all forms of termination favourable to the plaintiff, but none sufficed to prove innocence30. At around the time of the decision in Davis, a court in India held that the plaintiff was required to prove his innocence in an action for malicious 24 Davis v Gell (1924) 35 CLR 275 at 291. 25 Davis v Gell (1924) 35 CLR 275 at 285, 292. 26 Davis v Gell (1924) 35 CLR 275 at 294. 27 Davis v Gell (1924) 35 CLR 275 at 296 citing [1905] AC 168 at 170-171. 28 Davis v Gell (1924) 35 CLR 275 at 296 citing (1905) 2 CLR 744 at 754 per Griffith CJ; [1905] HCA 31. 29 (1883) 11 QBD 440 at 455. 30 Davis v Gell (1924) 35 CLR 275 at 296-297. Hayne Crennan Bell prosecution. On appeal to the Privy Council, Lord Dunedin characterised this requirement as one that was "quite erroneous". His Lordship observed that the action required proof "[t]hat the proceedings complained of terminated in favour of the plaintiff if from their nature they were capable of so terminating"31. Smith Mr Smith was committed for trial on a charge of defrauding the Commonwealth Life Assurance Society Ltd. The prosecution was terminated by the decision of the Attorney-General not to file an indictment32. In a subsequent action for damages for malicious prosecution, Mr Smith sought to adduce evidence of his innocence. The defendant objected on grounds of relevance. The trial judge, on the authority of Davis, admitted the evidence. On appeal in this Court, the question squarely raised was whether the plaintiff's guilt or innocence is in issue in the civil action33. The majority held it was not. In so holding, Rich, Dixon, Evatt and McTiernan JJ concluded that Bowen LJ's dictum in his ex tempore reasons in Abrath34 was intended to state no more than that the plaintiff must prove a favourable termination of the prosecution in order to maintain the action35. Their Honours observed that none of the pleading precedents and none of the text-writers suggested that proof of innocence was required in the civil action36. They concluded37: 31 Commonwealth Life Assurance Society Ltd v Smith (1938) 59 CLR 527 at 536 citing Balbhaddar Singh v Badri Sah AIR 1926 PC 46. 32 Commonwealth Life Assurance Society Ltd v Smith (1938) 59 CLR 527 at 532. 33 Commonwealth Life Assurance Society Ltd v Smith (1938) 59 CLR 527 at 532 per Rich, Dixon, Evatt and McTiernan JJ. 34 (1883) 11 QBD 440 at 455. 35 Commonwealth Life Assurance Society Ltd v Smith (1938) 59 CLR 527 at 541 referring to Basebé v Matthews (1867) LR 2 CP 684 at 687 per Byles J. 36 Commonwealth Life Assurance Society Ltd v Smith (1938) 59 CLR 527 at 532-533, 540-541 citing Bullen and Leake, Precedents of Pleadings, 2nd ed (1863) at 307; 3rd ed (1868) at 355; 8th ed (1924); Chitty's Pleading, 7th ed (1844), vol 2 at 441 et seq; Buller, An Introduction to the Law Relative to Trials at Nisi Prius, 4th ed (1785); Chitty, Criminal Law, (1816) at 835 et seq; Salmond on the Law of Torts, (Footnote continues on next page) Hayne Crennan Bell "Except in the case of a nolle prosequi covered by the decision in Davis v Gell, we are of opinion that the guilt or innocence of the plaintiff is not an issue going to the cause of action in malicious prosecution." Turning to the decision in Davis, their Honours observed that in Balbhaddar Singh v Badri Sah Lord Dunedin had adverted to the position of the nolle prosequi as "possibly unsettled"38. They quoted the statement in Goddard v Smith that the entry of a nolle prosequi "only puts the defendant without day"39, and said that there was "some uncertainty as to the sufficiency of a nolle prosequi"40. The uncertainty was with respect to whether the entry of a nolle prosequi stayed proceedings permitting "fresh process [to] be awarded in the same indictment"41. It was uncertainty as to the termination of the prosecution. Starke J adhered to the view he had expressed in Davis, that proof of the falsity of the charge is an essential element of the cause of action42. Balbhaddar affirmed that termination of a prosecution by the refusal to commit for trial (as 8th ed (1934) at 649 et seq; Winfield, A Text-Book of the Law of Tort, (1937) at 643 et seq; Winfield, The History of Conspiracy and Abuse of Legal Procedure, (1921) at 118 et seq; Winfield, The Present Law of Abuse of Legal Procedure, (1921) at 174 et seq; Stephen, The Law Relating to Actions for Malicious Prosecution, (1888) at 107; Halsbury's Laws of England, 2nd ed, vol 22 at 10 et seq. 37 Commonwealth Life Assurance Society Ltd v Smith (1938) 59 CLR 527 at 543. 38 Commonwealth Life Assurance Society Ltd v Smith (1938) 59 CLR 527 at 537 referring to AIR 1926 PC 46 at 49. 39 Commonwealth Life Assurance Society Ltd v Smith (1938) 59 CLR 527 at 534 citing (1704) 1 Salk 21 [91 ER 20]; 2 Salk 456 [91 ER 394]; 2 Salk 767 (Record) [91 ER 632]; 3 Salk 245 [91 ER 803]; 6 Mod 261 [87 ER 1008]; 11 Mod 56 [88 ER 882]; Holt 497 [90 ER 1173]. 40 Commonwealth Life Assurance Society Ltd v Smith (1938) 59 CLR 527 at 535 citing Winfield, A Text-Book of the Law of Tort, (1937) at 647-648. 41 Commonwealth Life Assurance Society Ltd v Smith (1938) 59 CLR 527 at 534. 42 Commonwealth Life Assurance Society Ltd v Smith (1938) 59 CLR 527 at 550. Hayne Crennan Bell had occurred in that case) conclusively established the falsity of the charge43. Turning to other forms of termination, his Honour concluded that it would not be consistent with principle or public policy that the decisions of magistrates, grand juries or the Attorney-General should be tried again on the merits and "blowed off by a side wind"44. It followed that Mr Smith's innocence was conclusively presumed from proof that the Attorney-General had decided not to find a bill of indictment against him. The evidence adduced to establish Mr Smith's innocence at the trial of the civil action was irrelevant45. Smith held that the statements in Davis, that innocence was an issue in the civil action requiring proof in cases in which the prosecution had not been terminated by acquittal, were not to be followed46. Davis had been decided on the effect of a termination by nolle prosequi, and on principle and on the authority of Balbhaddar it was not to be extended further47. Procedural history At this point there should be some reference to the history of the present proceedings. The appellant was arrested by members of the New South Wales Police Force and charged with a number of offences against her husband. She was committed to stand trial in the Supreme Court of New South Wales. A bill of indictment charging the appellant with nine counts was found and she was arraigned upon it. The eighth count was preferred ex officio. At the conclusion of the appellant's trial on 11 September 1991 the jury returned verdicts of guilty on counts 1, 2, 3, 4, 6, 7 and 9, and on an alternative charge to the offence charged in count 5. A verdict of not guilty was returned respecting the offence charged in count 8. 43 Commonwealth Life Assurance Society Ltd v Smith (1938) 59 CLR 527 at 552. 44 Commonwealth Life Assurance Society Ltd v Smith (1938) 59 CLR 527 at 552. 45 Commonwealth Life Assurance Society Ltd v Smith (1938) 59 CLR 527 at 552-553. 46 Commonwealth Life Assurance Society Ltd v Smith (1938) 59 CLR 527 at 535 per Rich, Dixon, Evatt and McTiernan JJ. 47 Commonwealth Life Assurance Society Ltd v Smith (1938) 59 CLR 527 at 543 per Rich, Dixon, Evatt and McTiernan JJ. Hayne Crennan Bell In October 1991, the appellant was sentenced to a term of imprisonment of twelve years and three months with a non-parole period of ten years and three months. She appealed unsuccessfully against her convictions and sentence to the New South Wales Court of Criminal Appeal48. In 2001, the appellant petitioned the Governor seeking a review of her convictions49. The Attorney-General referred the application to the Court of Criminal Appeal50. The Court of Criminal Appeal remitted the determination of a number of factual questions to Acting Judge Davidson51. Following the delivery of Davidson ADCJ's findings, on 17 August 2005 the Court of Criminal Appeal allowed the appeal in relation to counts 1, 2, 5, 6, 7 and 9 and quashed each conviction52. The Court entered a verdict of acquittal on count 9. A new trial was ordered on counts 1, 2, 5, 6 and 7. The appellant's appeal against her convictions for the offences charged in counts 3 and 4 was dismissed. On 22 September 2005, the Director directed that there be no further proceedings against the appellant on the outstanding charges that were the subject of the Court of Criminal Appeal's order for a new trial. On 26 September 2005, a document communicating the Director's determination was forwarded to the Registry of the Court of Criminal Appeal. The civil proceedings – the determination of two separate questions On 15 August 2008, the appellant instituted proceedings against the respondent in the Common Law Division of the Supreme Court claiming damages for malicious prosecution on the basis that the respondent was vicariously liable for the conduct of the police officers who instigated the prosecution. The respondent filed a notice of motion on 16 May 2011 seeking a separate determination in relation to two questions: 48 Catt (1993) 68 A Crim R 189. 49 Crimes Act 1900 (NSW), s 474B. 50 Crimes Act 1900 (NSW), s 474C(1)(b). 51 Criminal Appeal Act 1912 (NSW), s 12(2). 52 R v Catt [2005] NSWCCA 279. Hayne Crennan Bell "A. With respect to each of the counts 1, 2, 5, 6 and 7 for which the plaintiff was tried: Accepting that the proceedings terminated in favour of the plaintiff, to the extent that the plaintiff's claim for malicious prosecution is based upon each of these counts, does the plaintiff need to prove her innocence in relation to each count to succeed? B. With respect to count 9 for which the plaintiff was tried: To the extent that plaintiff's the claim [sic] for malicious prosecution is based upon this count does the plaintiff need to prove her innocence of the charge?" The primary judge (Davies J) agreed to the separate determination of the two questions. His Honour said that the order quashing the appellant's convictions and directing a new trial on the specified counts meant that the issues "raised by the indictment upon which those counts were tried will remain justiciable"53. He held that the indictment on which the appellant had been tried was extant54. His Honour concluded that the notification to the Registry of the Court of Criminal Appeal of the Director's decision to take no further proceedings against the appellant was the equivalent of the entry of a nolle prosequi55. He held that he was bound to apply the Davis exception56. He answered the questions as follows57: "A. Yes. 53 Beckett v New South Wales (No 1) (2011) 210 A Crim R 105 at 113 [32]. 54 Beckett v New South Wales (No 1) (2011) 210 A Crim R 105 at 114 [34]. 55 Beckett v New South Wales (No 1) (2011) 210 A Crim R 105 at 115 [42]. 56 Beckett v New South Wales (No 1) (2011) 210 A Crim R 105 at 125 [68]. 57 Beckett v New South Wales (No 1) (2011) 210 A Crim R 105 at 125 [72]. Hayne Crennan Bell The appellant appealed to the Court of Appeal of the Supreme Court of New South Wales (Beazley and McColl JJA and Tobias AJA) against the answer to question A and the respondent cross-appealed against the answer to question B. The Court of Appeal agreed with the primary judge that the direction under s 7(2)(b) of the DPP Act constituted the entry of a nolle prosequi58. It followed that the primary judge had been right to conclude that the Davis exception applied59. The appeal and the cross-appeal were dismissed. The appellant applied for special leave to appeal. On 5 October 2012, Gummow, Hayne and Heydon JJ referred the application into an enlarged Full Court for hearing as on appeal. For the reasons to be given, special leave should be granted and the appeal allowed. It is convenient in these reasons to refer to the application as an appeal and to the applicant as the appellant. The grounds of challenge The appellant submits that there is no principled basis for distinguishing proceedings terminated by the entry of a nolle prosequi from those terminated in any of the other ways favourable to the plaintiff. She seeks leave to re-open Davis. Alternatively, she contends that the Davis exception was wrongly applied in the trial of her action because the prosecution of the charges against her was terminated under s 7(2)(b) of the DPP Act and not by the entry of a nolle prosequi by the Attorney-General. The appellant's submissions in support of her alternative ground departed from the submissions on which she relied below. In this Court she did not maintain that the indictment was spent at the time the s 7(2)(b) determination was communicated to the Registry of the Court of Criminal Appeal. Her case is that the Davis exception is confined to "the special case" of proceedings terminated by nolle prosequi60. The termination of proceedings by the Director under statutory power is said to be of a different character: the source of the power is different and the statutory power is wider. 58 Beckett v State of New South Wales [2012] NSWCA 114 at [89(c)]. 59 Beckett v State of New South Wales [2012] NSWCA 114 at [89(d)]. 60 Commonwealth Life Assurance Society Ltd v Smith (1938) 59 CLR 527 at 535 per Rich, Dixon, Evatt and McTiernan JJ. Hayne Crennan Bell The functions of the Attorney-General with respect to the prosecution of criminal offences derive from Imperial statutes61. However, it may be accepted that the purpose of the provision of the Australian Courts Act 1828 (Imp), which conferred power on the Attorney-General to prosecute offences on ex officio indictment62, was to arm the Attorney-General with a power in all respects similar to that enjoyed by the Attorney-General in England63. That power included the entry of a nolle prosequi64. The importance of the functions that are incidents of the office of the Attorney-General is recognised in s 38 of the Constitution Act 1902 (NSW). The Director's functions with which the appeal is concerned are set out in the DPP Act as follows: Principal functions The principal functions and responsibilities of the Director are: to institute and conduct, on behalf of the Crown, prosecutions (whether on indictment or summarily) for indictable offences in the Supreme Court and the District Court, The Director has the same functions as the Attorney General in relation to: 61 New South Wales Act 1823 (Imp) (4 Geo IV c 96), s 4; Australian Courts Act 1828 (Imp) (9 Geo IV c 83), s 5. 62 The term "indictment" is used in these reasons consistently with the practice in New South Wales. It is interchangeable with "information" as that term is used in the Australian Courts Act 1828 (Imp), s 5: see Fraser v The Queen (No 2) (1985) 1 NSWLR 680 at 689-691 per McHugh JA; R v Hull (1989) 16 NSWLR 385 at 388- 63 Barton v The Queen (1980) 147 CLR 75 at 92 per Gibbs ACJ and Mason J; [1980] HCA 48. 64 Gilchrist v Gardner (1891) 12 LR (NSW) (L) 184. Hayne Crennan Bell finding a bill of indictment, or determining that no bill of indictment be found, in respect of an indictable offence, in circumstances where the person concerned has been committed for trial, directing that no further proceedings be taken against a person who has been committed for trial or sentence, and finding a bill of indictment in respect of an indictable offence, in circumstances where the person concerned has not been committed for trial." The Director may not delegate the exercise of the function conferred on him under s 7(2)(b) save to a Deputy Director65. The Director may not, without the consent of the Attorney-General, exercise a function in a manner that is inconsistent with the manner in which the Attorney-General has already exercised a function in the same matter66. The Attorney-General's power to enter a nolle prosequi is unaffected by the DPP Act67. The appellant relies on the decision of the Court of Criminal Appeal of New South Wales in GKA for the proposition that the Director's power to exercise the function under s 7(2)(b) is wider than the function of entering a nolle prosequi68. The holding in GKA was that once the Director's direction under s 7(2)(b) was communicated to the court, the court was deprived of power to proceed further "upon the current indictment"69. The passage on which the appellant relies is set out below70: 65 Director of Public Prosecutions Act 1986 (NSW), s 33(2). 66 Director of Public Prosecutions Act 1986 (NSW), s 28(1). 67 Director of Public Prosecutions Act 1986 (NSW), s 30. 68 (1998) 99 A Crim R 491 at 494 per Cole JA (Gleeson CJ and Barr J concurring). 69 GKA (1998) 99 A Crim R 491 at 496. 70 GKA (1998) 99 A Crim R 491 at 494. Hayne Crennan Bell "The power to direct a nolle prosequi is the same as one power referred to in ss 7(a) and 27(a) of the DPP Act. A determination of a 'no bill of indictment' would not prevent the bringing of a further indictment. The substance of the power contemplated by ss 7(2)(b) and 27(b) is wider than a nolle prosequi because it constitutes a direction that no further proceedings be taken against a person who has been committed for trial or sentence. Nonetheless, the power conferred by s 7(2)(b) includes a power to require entry of a nolle prosequi. It is not necessary in this proceeding to further define the scope of the power conferred by s 7(2)(b)." It is not clear in what respect the Court in GKA considered the power under s 7(2)(b) to be wider than the power to enter a nolle prosequi. The functions in s 7(2)(a) and (b) respecting the termination of proceedings in the case of a person who has been committed for trial are those of determining that no bill of indictment be found (par (a)) and directing that no further proceedings be taken against the person (par (b)). Each terminates the prosecution without barring the subsequent prosecution of the person for the same offence. The power to enter a nolle prosequi is not engaged until a bill is found and the indictment is signed71. While the power under par (b) is not confined to a direction after a bill has been found, when the two paragraphs are read together it is apparent that the power to terminate proceedings by declining to find a bill of indictment is found in par (a). The appellant submits that the reference to the width of the statutory power in GKA recognises that a direction under s 7(2)(b) brings proceedings on an indictment to an end, whereas the entry of a nolle prosequi merely stays the proceedings on the indictment sine die72. The appellant relies on the statements in Smith that the nolle prosequi "does no more than bring the trial to an end" and that "fresh process may be awarded in the same indictment and the prisoner again put on his trial"73. Nolle prosequi – a stay of proceedings sine die? It will be recalled that, in Smith, it was uncertainty concerning the sufficiency of a nolle prosequi to terminate the prosecution that was held to 71 R v Wylie (1919) 83 JP 295 at 295. 72 GKA (1998) 99 A Crim R 491 at 496. 73 Commonwealth Life Assurance Society Ltd v Smith (1938) 59 CLR 527 at 534 per Rich, Dixon, Evatt and McTiernan JJ. Hayne Crennan Bell justify the Davis exception. In their joint reasons, Rich, Dixon, Evatt and McTiernan JJ quoted Professor Winfield's A Text-Book of the Law of Tort74: "The effect of a nolle prosequi (staying by the Attorney-General of proceedings on an indictment) is open to question. An old case indicates that it is not a sufficient ending of the prosecution because it still leaves the accused liable to be indicted afresh on the same charge. But this seems inconsistent with the broad interpretation put upon 'favourable termination of the prosecution' which signifies, not that the accused has been acquitted, but that he has not been convicted." Their Honours also noted Professor Winfield's reference to American authorities, which were to the same effect as the decision of the New South Wales Supreme Court in Gilchrist v Gardner75. In Gilchrist, Darley CJ said the entry of a nolle prosequi "puts an end to that prosecution, though [the Attorney-General] may afterwards cause a to be commenced"76. Windeyer J in the same case said that the entry of a nolle prosequi "put an end altogether to the prosecution", although it may be commenced anew on a fresh indictment77. fresh prosecution It was not necessary in Smith to resolve the controversy concerning the effect of the entry of a nolle prosequi. It was sufficient to note that uncertainty in this respect had led to proceedings terminated by nolle prosequi constituting a "special case". This category of special case was "covered" by the decision in Davis78. 74 Commonwealth Life Assurance Society Ltd v Smith (1938) 59 CLR 527 at 535 per Rich, Dixon, Evatt and McTiernan JJ citing Winfield, A Text-Book of the Law of Tort, (1937) at 648. 75 Commonwealth Life Assurance Society Ltd v Smith (1938) 59 CLR 527 at 535 per Rich, Dixon, Evatt and McTiernan JJ citing (1891) 12 LR (NSW) (L) 184. 76 Gilchrist v Gardner (1891) 12 LR (NSW) (L) 184 at 187. 77 Gilchrist v Gardner (1891) 12 LR (NSW) (L) 184 at 187. 78 Commonwealth Life Assurance Society Ltd v Smith (1938) 59 CLR 527 at 535 per Rich, Dixon, Evatt and McTiernan JJ. Hayne Crennan Bell In Question of Law Reserved on Acquittal (No 3 of 1995)79, Debelle J considered the power to enter a nolle prosequi. In question in that case was the power of the court to refuse to accept the entry of a nolle prosequi. His Honour observed that in England the form of endorsement of a nolle prosequi is of a stay postponing the proceedings sine die80. He said that it "seems that it is possible for the Crown later to proceed on the original indictment or information", although his Honour noted that the usual practice is to issue a fresh indictment or information81. These statements were based on Professor Edwards' account of the incidents of a nolle prosequi in The Attorney General, Politics and the Public Interest82: "[T]he effect of a nolle prosequi is neither a bar to a fresh indictment nor a discharge of the original offence. What it does is to postpone sine die the prosecution. Should the Attorney General decide at a later date to reopen the original charges he can, theoretically speaking, reactivate the earlier indictment that was placed in suspension when the nolle prosequi was filed in the court's records. Alternatively, fresh proceedings leading to a new indictment can be commenced to which the accused will be precluded from raising a plea of autrefois acquit on the basis of the nolle prosequi." Three authorities are cited for these propositions: Goddard v Smith83, R v Ridpath84 and R v Allen85. Each is authority for the proposition first stated. There is, however, tension between Goddard and Allen with respect to the proposition that the indictment may be reactivated. Early text-writers differed on the question. Chitty's Criminal Law stated that the effect of a nolle prosequi was to permit the defendant to be re-indicted and "even upon the same indictment 79 (1996) 66 SASR 450. 80 Question of Law Reserved on Acquittal (No 3 of 1995) (1996) 66 SASR 450 at 458. 81 Question of Law Reserved on Acquittal (No 3 of 1995) (1996) 66 SASR 450 at 458. 82 Edwards, The Attorney General, Politics and the Public Interest, (1984) at 444. 83 (1704) 6 Mod 261 [87 ER 1008]; 11 Mod 56 [88 ER 882]. 84 (1713) 10 Mod 152 [88 ER 670]. 85 (1862) 1 B & S 850 at 854 per Cockburn CJ, 855 per Crompton J [121 ER 929 at Hayne Crennan Bell fresh process may be awarded"86. The authority given for the proposition was Goddard. Archbold's Practice of the Crown Office stated that the entry of a nolle prosequi "has the effect of putting an end to the prosecution altogether"87. Goddard was decided in 1704 and the several reports of the decision are not easy to reconcile88. It was an action on the case for conspiracy maliciously to cause the plaintiff to be indicted for barratry. The plaintiff's declaration pleaded that the indictment had been "according to law in a due and lawful manner thereof discharged"89. At the trial the plaintiff produced a nolle prosequi by the Attorney-General. The question reserved for the consideration of the Judges of the King's Bench was whether proof of the nolle prosequi was sufficient to maintain the declaration. In the course of argument Holt CJ said90: further prosecution upon "that the entering a nolle prosequi was only putting the defendant sine die, and so far from discharging him from the offence, that it did not discharge any that, notwithstanding, new process might be made out upon it; and sure it is hard to allow a man who gets off by a nolle prosequi to maintain an action for a malicious prosecution." indictment, but that very Goddard held that production of the nolle prosequi did not prove the material part of the declaration. It is less clear that it is authority for the proposition that the entry of a nolle prosequi stays proceedings, permitting the prosecutor to proceed upon the same indictment at a later date. A later report of the decision records that "the nonpross is not a discharge of the crime, but only of the indictment"91. Mr Harcourt, the Master of the Crown Office, appears to 86 Chitty, Criminal Law, (1816) at 480. 87 Archbold, Practice of the Crown Office, (1844) at 62. 88 (1704) 1 Salk 21 [91 ER 20]; 2 Salk 456 [91 ER 394]; 2 Salk 767 (Record) [91 ER 632]; 3 Salk 245 [91 ER 803]; 6 Mod 261 [87 ER 1008]; 11 Mod 56 [88 ER 882]; Holt 497 [90 ER 1173]. 89 (1704) 11 Mod 56 at 56 [88 ER 882 at 882] (emphasis in original). 90 (1704) 6 Mod 261 at 261 [87 ER 1008 at 1009]. 91 (1704) 11 Mod 56 at 56 [88 ER 882 at 882]. Hayne Crennan Bell have informed the Court of the practice respecting the plea of nolle prosequi. The report concludes92: "[A]nd they went upon Mr Harcourt's report, that they used to indict them again, and not to proceed upon the same indictment." In Allen, Crompton J observed that "the nolle prosequi being on the record, there is an end of this prosecution; but the question remains whether that is final or not"93. His Lordship considered that Archbold was correct and that the nolle prosequi "has the effect of putting an end to the prosecution altogether"94. He thought that Goddard only decided that the entry of a nolle prosequi is not a decision on the merits, observing of the report of the decision in volume six of the Modern Reports95: "[T]he Court, in the course of the argument, said that the Attorney General might issue new process upon the indictment; but, as I have said, I rather think the nolle prosequi puts an end to the prosecution." It is far from clear when the older authorities speak of the entry of a nolle prosequi as "putting the defendant sine die" that more is being said than that it does not bar a subsequent prosecution96. It is rare for proceedings to be revived after termination by nolle prosequi, and there is an absence of authority on the point. The preferable view, which accords with practice, is that stated in Allen: the entry of a nolle prosequi brings proceedings on the indictment to an end without barring a subsequent prosecution on a fresh indictment97. 92 (1704) 11 Mod 56 at 56 [88 ER 882 at 882]. 93 (1862) 1 B & S 850 at 855 [121 ER 929 at 931] (footnote omitted). 94 R v Allen (1862) 1 B & S 850 at 855 [121 ER 929 at 931] citing Archbold, Practice of the Crown Office, (1844) at 62. 95 R v Allen (1862) 1 B & S 850 at 856 [121 ER 929 at 931]. 96 R v Ridpath (1713) 10 Mod 152 at 153 [88 ER 670 at 671]; R v Mitchel (1848) 3 Cox CC 93; and see Stephen, A History of the Criminal Law of England, (1883), vol 1 at 496. 97 This is consistent with the drafting of the Griffith Code, which at s 589 provided that on the court being informed that the Crown will not proceed further upon any (Footnote continues on next page) Hayne Crennan Bell The prosecution of indictable offences in all Australian jurisdictions is now conferred on a statutory office holder, the Director of Public Prosecutions. In each jurisdiction, the Director of Public Prosecutions has power to terminate the prosecution of proceedings on indictment98. In each jurisdiction, the Attorney-General retains the power to enter a nolle prosequi, although in the majority of them the power is now sourced in statute99. In New South Wales, Victoria and South Australia the Attorney-General's power in this respect continues as an incident of office. As a matter of practice, the occasions on which the prosecution of a person is terminated by the Attorney-General entering a nolle prosequi are likely to be rare. The appeal should not be decided on the narrow footing that the appellant's prosecution was terminated under the statutory power, and not in the exercise of the Attorney-General's prerogative power. The power under s 7(2)(b) is in substance and effect the same as the power to enter a nolle prosequi. A principled distinction between termination under s 7(2)(b) and other forms of termination? The joint reasons in Smith drew a distinction between the functions of the Attorney-General when declining to find a bill following a committal for trial indictment "the accused person is to be discharged from any further proceedings upon that indictment." The Criminal Code (Q) so provides in s 563(3). 98 Director of Public Prosecutions Act 1983 (Cth), s 9(4); Director of Public Prosecutions Act 1986 (NSW), s 7(2); Criminal Procedure Act 2009 (Vic), s 177(1); Director of Public Prosecutions Act 1991 (SA), s 7(1)(e) and Criminal Law Consolidation Act 1935 (SA), s 276; Director of Public Prosecutions Act 1984 (Q), s 10(1)(a) and Criminal Code (Q), s 563; Director of Public Prosecutions Act 1991 (WA), ss 11 and 19(3) and Criminal Procedure Act 2004 (WA), s 87; Director of Public Prosecutions Act 1973 (Tas), s 12(1)(a)(iii); Director of Public Prosecutions Act (NT), ss 12(1) and 20(3) and Criminal Code (NT), s 302; Director of Public Prosecutions Act 1990 (ACT), s 7(6). 99 Judiciary Act 1903 (Cth), s 71; Director of Public Prosecutions Act 1986 (NSW), s 30; Public Prosecutions Act 1994 (Vic), s 25(2); Criminal Code (Q), s 563; Criminal Procedure Act 2004 (WA), s 87(3); Criminal Code (Tas), s 350; Criminal Code (NT), s 302; Director of Public Prosecutions Act 1990 (ACT), s 7(6). Hayne Crennan Bell and when terminating proceedings by the entry of a nolle prosequi100. The same distinction is evident in the division of functions in s 7(2)(a) and (b). The respondent submits that the distinction provides a principled basis for the Davis exception, at least in some cases terminated by entry of a nolle prosequi or by direction under s 7(2)(b). The respondent's argument is that the determination of whether or not to find a bill of indictment involves an assessment of the legal merit of the prosecution. By contrast, the respondent points out that the decision not to take further proceedings against a person may be unconnected to the strength of the prosecution case. The decision to take no further proceedings against the appellant is said to be such a case: the appellant had served all but a few months of the non-parole period of the sentence imposed on her in 1991 at the time the Court of Criminal Appeal quashed her convictions and ordered a new trial. The inference is open that the Director determined to take no further proceedings against her for utilitarian reasons having nothing to do with the cogency of the prosecution case. The respondent says that it would be a scandal in the administration of justice to permit recovery of damages for malicious prosecution in circumstances in which a nolle prosequi has been entered on a strong prosecution case. The respondent calls in aid decisions of the Supreme Court of Illinois, in which the circumstances surrounding the entry of a nolle prosequi have been examined to determine whether its entry is "not indicative of the innocence of the accused"101. However, the decisions are concerned with proof of the termination of the prosecution. In the same connection, the Supreme Court of Canada in Miazga v Kvello Estate commented that "a live issue may arise whether the termination of the proceedings was 'in favour' of the plaintiff" in the case of a 100 Commonwealth Life Assurance Society Ltd v Smith (1938) 59 CLR 527 at 543 per Rich, Dixon, Evatt and McTiernan JJ. 101 Swick v Liautaud 662 NE 2d 1238 at 1242-1243 (Ill 1996) citing Restatement, Second, Torts §§659, 660 and 661; McKenney v Jack Eckerd Co 402 SE 2d 887 at 888 (SC 1991); Wynne v Rosen 464 NE 2d 1348 (Mass 1984); and see Cult Awareness Network v Church of Scientology International 685 NE 2d 1347 at 1354 (Ill 1997). Hayne Crennan Bell termination that is not an adjudication on the merits, such as a settlement or a plea bargain102. In Miazga the elements of the tort were stated consistently with the statement in A v New South Wales103. Decisions in other common law jurisdictions also accord with A v New South Wales in describing the tort of malicious prosecution as comprising the four elements summarised earlier in these reasons104. The respondent's argument did not identify to which of those elements proof of the plaintiff's innocence is relevant in a case terminated for any reason by the entry of a nolle prosequi (or under the equivalent statutory power). The respondent's submission wrongly assumes that other forms of termination favourable to the plaintiff incorporate an element of "merit assessment". The termination of a prosecution may be for a technical reason that is unconnected to the strength of the prosecution case. The termination is nonetheless one favourable to the plaintiff such as to maintain the civil action105. For example, the decision not to find a bill of indictment may be taken for reasons which are not connected to the strength of the prosecution case106. The requirement that the plaintiff prove favourable termination, as earlier explained, is concerned with consistency of judicial decisions. Proof of favourable termination does not involve an inquiry into the underlying merits of the prosecution. The respondent was right to acknowledge in drafting the separate question that the prosecution had terminated in favour of the appellant. 102 [2009] 3 SCR 339 at 367 [54]. 103 Miazga v Kvello Estate [2009] 3 SCR 339 at 346-347 [3]. 104 Mills v Kelvin & James White Ltd 1913 SC 521 at 527; Balbhaddar Singh v Badri Sah AIR 1926 PC 46, extracts of which appear in Commonwealth Life Assurance Society Ltd v Smith (1938) 59 CLR 527 at 535-538; Martin v Watson [1996] AC 74 at 80; Van Heeren v Cooper [1999] 1 NZLR 731 at 740-742; Gregory v Portsmouth City Council [2000] 1 AC 419 at 426; Jae Hoon Oh v Richdale [2005] 2 HKLRD 285 at 292 [12]. 105 Wicks v Fentham (1791) 4 TR 247 [100 ER 1000]. 106 Office of the Director of Public Prosecutions for New South Wales, Prosecution Guidelines of the Office of the Director of Public Prosecutions for New South Wales, (2007) at 8-10, 13-14. Hayne Crennan Bell The respondent's submissions are apt to overlook two things. First, the appellant must prove the absence of reasonable and probable cause before she can recover in the civil action. Secondly, for whatever reason, the appellant has not been convicted of the offences charged in counts 1, 2, 5, 6 and 7 of the indictment. In the event that the appellant is able to prove that her prosecution by persons for whom the respondent is vicariously liable was instigated or continued maliciously and without reasonable and probable cause, her recovery in the civil action would not scandalise the administration of justice. The circumstances in which this Court will depart from a previous decision were the subject of recent consideration in Wurridjal v The Commonwealth107. The appellant is right to say that the reasoning in Davis is undermined by subsequent authority. As has been observed, the conclusion that Mr Gell was required to prove his innocence did not stem from doubts that the entry of the nolle prosequi was a favourable termination of the prosecution. All three Justices accepted that it was. Their reasoning, that proof of innocence was an element of the tort, cannot stand with Smith and A v New South Wales. There is no principled reason to distinguish a prosecution terminated by the entry of a nolle prosequi by the Attorney-General or a direction by the Director under the statutory power from other forms of termination falling short of acquittal. The Davis exception produces an anomalous outcome. Were the decision of the Court of Appeal to stand, the appellant would be entitled to lead evidence at the trial of matters tending to establish her innocence that were unknown to the respondent at the time the prosecution was commenced and maintained. However, material that has come to light since the prosecution was commenced and maintained tending to establish her guilt would not be admissible on the 107 (2009) 237 CLR 309 at 350-353 [65]-[71], 357-359 [82]-[86] per French CJ; [2009] HCA 2; see also Queensland v The Commonwealth (1977) 139 CLR 585 at 592-594 per Barwick CJ, 598-601 per Gibbs J, 602-604 per Stephen J, 620-631 per Aickin J; [1977] HCA 60; John v Federal Commissioner of Taxation (1989) 166 CLR 417 at 438-440 per Mason CJ, Wilson, Dawson, Toohey and Gaudron JJ, 450-453 per Brennan J; [1989] HCA 5. Hayne Crennan Bell issue of reasonable and probable cause. The unsatisfactory nature of that outcome was noted in Smith108: "In the course of proving facts on which he based the prosecution, the defendant may sometimes succeed in raising a doubt of the plaintiff's innocence. When this happens an absence of reasonable and probable cause is hardly likely to be found. But it would be surprising if a defendant could go into the guilt or innocence of the plaintiff as a separate issue, though on the issue of reasonable and probable cause he is not permitted to prove facts which he did not know at the time of the prosecution even when the facts amount to the highest degree of objective cause for the prosecution, namely, proof of the real guilt of the accused." Davis should not be followed. Orders There should be orders as follows: Special leave to appeal granted. The appeal be treated as instituted and heard instanter and allowed with costs. Set aside that part of order (b) of the Court of Appeal of the Supreme Court of New South Wales made on 2 May 2012 dismissing the appeal with costs and, in lieu thereof, order that: appeal allowed with costs; and the answer of Davies J to question A of the respondent's notice of motion filed on 16 May 2011 be set aside and, in lieu thereof, question A be answered "No". The respondent pay the appellant's costs of the separate determination 108 Commonwealth Life Assurance Society Ltd v Smith (1938) 59 CLR 527 at 542-543 per Rich, Dixon, Evatt and McTiernan JJ. The majority holding in Commonwealth Life Assurance Society Ltd v Smith109 was that "[e]xcept in the case of a nolle prosequi covered by the decision in Davis v Gell110 … the guilt or innocence of the plaintiff is not an issue going to the cause of action in malicious prosecution"111. The question is whether the exception stated in that holding should be maintained. It should not. Davis should be overruled. The common law of Australia should be declared to be that the guilt or innocence of the plaintiff is never an issue going to the cause of action in malicious prosecution. The reasoning in Davis was founded on the proposition that it was an element of every cause of action in malicious prosecution that the plaintiff was innocent112. The reasoning was that termination of a prosecution by conviction or acquittal created a res judicata foreclosing any issue of guilt or innocence. Termination by other means left innocence to be proved by the plaintiff113. Entry of a nolle prosequi terminated the prosecution, but did not create a res judicata. In the case of a prosecution terminated by entry of a nolle prosequi, it therefore remained for the plaintiff in an action for malicious prosecution to lead evidence to establish the fact of innocence114. No part of that reasoning survived Smith. The proposition that it was an element of every cause of action in malicious prosecution that the plaintiff was innocent was rejected. But, it was said, "[t]here was controversy" about whether entry of a nolle prosequi was sufficient to establish another element of the cause of action in malicious prosecution. That other element was that the prosecution proceedings must have terminated in the plaintiff's favour. The controversy was "as to what terminated proceedings, as, eg, whether a nolle prosequi … was a termination"115. It was seen not to be necessary to resolve that controversy in Smith because the case was not one where the prosecution proceedings had been terminated by a nolle prosequi116. The case was one where the proceedings had 109 (1938) 59 CLR 527; [1938] HCA 2. 110 (1924) 35 CLR 275; [1924] HCA 56. 111 (1938) 59 CLR 527 at 543. 112 (1924) 35 CLR 275 at 282, 285. 113 (1924) 35 CLR 275 at 289, 292, 296. 114 (1924) 35 CLR 275 at 292, 294, 297. 115 (1938) 59 CLR 527 at 537. 116 (1938) 59 CLR 527 at 543. been terminated by refusal to file an indictment. Three reasons were nevertheless identified for the rule that the prosecution proceedings must have terminated in the plaintiff's favour. The first was to prevent the collateral questioning of a conviction. The second was to prevent imputations in one proceeding against the justice of another proceeding still pending. The third, "from which the conclusion in Davis … was deduced", was that only a terminated proceeding could be shown to be without foundation117. It was sufficient for the purpose of the decision in Smith to note that those three reasons for the rule did "not affect the nature and application of the rule itself" and did not have "an independent and further operation in imposing some additional condition as a necessary element in the cause of action for malicious prosecution"118. It was held that, contrary to the conclusion deduced in Davis, the third reason for the rule did not turn on equating acquittal, or any other form of termination, with the establishment of innocence119. The decision in Davis "covered" only a case of a nolle prosequi and, on principle, was not to be "extended further"120. Contemporaneous commentary described the attitude of the majority in Smith to the decision in Davis as "that of those who come neither to praise nor yet to bury"121. The time to bury Davis is now. The controversy referred to in Smith about the effect of a nolle prosequi has now long been resolved. At common law, the entry of a nolle prosequi terminates proceedings on an indictment even though it does not prevent new proceedings being brought on a new indictment122. Termination of prosecution proceedings by entry of a nolle prosequi should be held to be sufficient to establish the element of the cause of action in malicious prosecution that requires prosecution proceedings to have terminated in the plaintiff's favour. The Full Court of the Supreme Court of New South Wales properly so held, after Smith, in Mann v Jacombe123. To treat termination 117 (1938) 59 CLR 527 at 539-540. 118 (1938) 59 CLR 527 at 540. 119 (1938) 59 CLR 527 at 540-541. 120 (1938) 59 CLR 527 at 543. 121 Donovan, "The Effect of a Nolle Prosequi in Relation to the Action for Malicious Prosecution", (1939) 12 Australian Law Journal 457 at 463. 122 Gilchrist v Gardner (1891) 12 LR (NSW) (L) 184; Broome v Chenoweth (1946) 73 CLR 583 at 599; [1946] HCA 53. 123 [1961] NSWR 273. of proceedings by entry of a nolle prosequi as a termination in the plaintiff's favour for the purpose of an action in malicious prosecution is consistent with the first two reasons identified in Smith for the rule that prosecution proceedings must have terminated in the plaintiff's favour. It is no less consistent with the third reason than was the form of termination in Smith itself, being refusal to file an indictment. Principle as articulated in Smith told against the decision in Davis being extended. It tells equally against the decision in Davis being maintained. Even if entry of a nolle prosequi were insufficient to establish the element of malicious prosecution that the prosecution proceedings have been terminated in the plaintiff's favour, the principled result would not be to apply Davis. The principled result would rather be that no action for malicious prosecution would lie. There is no principled reason why the absence of one element of the cause of action in malicious prosecution should be capable of being remedied by the importation of another element that otherwise forms no part of the cause of action. In the present case, Ms Beckett brings an action in malicious prosecution against the State of New South Wales. At the request of the State of New South Wales questions were reserved for separate determination in the Supreme Court of New South Wales. The questions expressly accepted that, insofar as prosecution proceedings against Ms Beckett had terminated by direction of the Director of Public Prosecutions under s 7(2)(b) of the Director of Public Prosecutions Act 1986 (NSW) ("the DPP Act"), those prosecution proceedings had terminated in her favour. The questions asked whether Ms Beckett needs to prove her innocence. The answer is that Ms Beckett does not need to prove her innocence. The primary judge (Davies J) and the Court of Appeal (Beazley and McColl JJA and Tobias AJA) gave a different answer because, being bound by Davis, they held that no principled distinction could be drawn between a case of proceedings terminated by the entry of a nolle prosequi and a case of proceedings terminated by direction under s 7(2)(b) of the DPP Act. The overruling of Davis makes any question about whether such a distinction can or should be drawn redundant. Without error on the part of the Court of Appeal, special leave to appeal should be granted and the appeal should be allowed. For these reasons, I agree with the orders proposed in the joint reasons for judgment.

HIGH COURT OF AUSTRALIA STATE OF NEW SOUTH WALES APPELLANT AND RESPONDENT New South Wales v Robinson [2019] HCA 46 Date of Hearing: 3 September 2019 Date of Judgment: 4 December 2019 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of New South Wales Representation J K Kirk SC with P D Herzfeld for the appellant (instructed by McCabe Curwood Pty Ltd) D R J Toomey SC with D C Morgan and D J Woodbury for the respondent (instructed by Foott, Law & Co Solicitors) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS New South Wales v Robinson Police – Arrest without warrant – Where s 99(1) of Law Enforcement (Powers and Responsibilities) Act 2002 (NSW) provides that police officer may, without warrant, arrest person if police officer suspects on reasonable grounds that person is committing or has committed offence and police officer is satisfied that arrest is reasonably necessary for one or more specified reasons – Where s 99(3) provides that police officer who arrests person under s 99 must, as soon as is reasonably practicable, take person before authorised officer to be dealt with according to law – Where police officer had not formed intention to charge arrested person with offence at time of arrest – Where police officer had not formed intention to bring arrested person before authorised officer to be dealt with according to law at time of arrest – Where arrested person brought claim for damages for wrongful arrest and false imprisonment – Whether arrest unlawful. Words and phrases – "answer a charge for an offence", "arrest", "arrest without a warrant", "as soon as is reasonably practicable", "authorised officer", "dealt with according to law", "false imprisonment", "improper purpose", "intention to charge", "investigation period", "police officer", "power to arrest", "purpose of arrest", "suspects on reasonable grounds". Law Enforcement (Powers and Responsibilities) Act 2002 (NSW), ss 4, 99, 105, KIEFEL CJ, KEANE AND NETTLE JJ. This is an appeal from a decision of the Court of Appeal of the Supreme Court of New South Wales (McColl and Basten JJA, Emmett A-JA dissenting) that the power of arrest without warrant under s 99 of the Law Enforcement (Powers and Responsibilities) Act 2002 (NSW) ("LEPRA") is conditional upon the arresting police officer having determined by the time of arrest that the person to be arrested will be charged with the offence of which he or she is reasonably suspected. For the reasons which follow, the appeal should be allowed. Although the only permissible purpose of arrest under s 99 of LEPRA is to take the arrested person before an "authorised officer"1 to be dealt with according to law, it is not necessary that the arresting police officer have determined at the time of arrest that the arrested person will definitely be taken before an authorised officer to be dealt with according to law or, therefore, charged. The facts telephone calls and been blackmailed by On 8 October 2013, Roselyn Singh reported that she had received respondent threatening ("Mr Robinson"). On 9 October 2013, an apprehended violence order ("AVO") was made in her favour against Mr Robinson. The order restrained Mr Robinson from, among other things, harassing Ms Singh, engaging in conduct that intimidated her, deliberately damaging or interfering with her property, or contacting her "by any means whatsoever" except by Mr Robinson's lawyer. On 16 October 2013, the AVO was extended until further order. the At the relevant times, Mr Robinson ran a website with an associated email address: "brad@datatheft.com.au". That email address had been used to contact Ms Singh. Ms Singh had blocked receipt of emails from the address but, on 18 December 2013, one of her employees informed her that he had received an email from it. Ms Singh checked her computer and found the email in her junk box. After reading the email, Ms Singh replied to the employee to the effect that she would "forward to detective – this is a breach of his [Mr Robinson's] Bail conditions". On 20 December 2013, Ms Singh attended the Town Hall Police Station and reported her concerns. She made a signed statement in which she deposed that Mr Robinson had attempted to contact her, and her employees, colleagues, business partners and others, to "inform them I [Ms Singh] have been defrauding 1 LEPRA, s 3(1) (definition of "authorised officer"). Nettle people and am under police investigation". She stated that she had "blocked this email address". Ms Singh named the employee who had contacted her regarding the email from the "brad@datatheft.com.au" email address, and stated that on finding it in her junk box she had opened it and found it to be as follows: "Hi, Everybody, Hope you are all well. Thought you might like to know Ms Singh and her company UTSG Consortium Pty Ltd (Sydney City Medical) are being wound up. She finally tried to rip off somebody who had the financial clout to fight back. [Link to a web address at creditorwatch.com.au] You will notice in the article, Singh registered my blog name 'Data Theft Australian' as a business names [sic]. This is another scam Singh uses to convince victims she owns certain businesses or organisations. She did the same with City Clinic and other competitor businesses in the Sydney CBD. Kind regards Brad". So far as appeared from the email, Ms Singh's employee had received it from "Brad Robinson" and it had, presumably, been sent to the employee's email address and other unidentified email addresses. Ms Singh further stated: "As soon as I read the email I felt really frightened and my heart started beating really fast. I began crying as I could not control the fear I was feeling. I am worried about Brad's future actions as I believe he has an unstable state of mind. Brad has previously attended my home addresses and I am afraid he will go to my home again and this has caused me to be in a permanent state of anxiousness and stress which is causing me to become paranoid that he is following me." On the morning of Sunday, 22 December 2013, Constable Smith of the Sydney City Police Station read the file relating to Ms Singh's complaint. He formed the opinion that Mr Robinson had breached the AVO and he determined to go to Mr Robinson's residence and arrest him. At 11.15 am that day, police Nettle officers, including Constable Smith, went to what they believed to be Mr Robinson's residence but were that Mr Robinson no longer lived at that address. Further preliminary inquiries failed to reveal a forwarding address. informed by neighbours there At noon the same day, Mr Robinson telephoned the police and told Constable Colakides that he had been informed by police at North Sydney that the Sydney City police wished to speak to him regarding a breach of an AVO. Mr Robinson further stated that he was homeless and currently interstate but that he would be in Sydney the next day. He refused, however, to provide the address where he would be the next day, and he said that he would not be attending any police station before seeking legal representation. Constable Colakides advised Mr Robinson to attend the Sydney City Police Station the next day, but Mr Robinson was argumentative and did not agree to do so. Constable Colakides made a note of the conversation on the New South Wales Police Force's Computerised Operational Policing System and informed Constable Smith of what had occurred. At 5.00 pm the same day, Mr Robinson entered the Sydney City Police Station. Thereupon, Constable Smith arrested him in connection with the breach of the AVO. Constable Smith offered Mr Robinson the opportunity of an interview, which Mr Robinson accepted, and an interview was then conducted. At the conclusion of the interview, at 6.18 pm, Mr Robinson was released without charge. Relevant statutory provisions At the time of Mr Robinson's arrest, s 99 of LEPRA provided that: "Power of police officers to arrest without warrant (cf Crimes Act 1900, s 352, Cth Act, s 3W) (1) A police officer may, without a warrant, arrest a person if: the police officer suspects on reasonable grounds that the person is committing or has committed an offence, and the police officer is satisfied that the arrest is reasonably necessary for any one or more of the following reasons: to stop the person committing or repeating the offence or committing another offence, to stop the person fleeing from a police officer or from the location of the offence, Nettle (iii) (vii) to enable inquiries to be made to establish the person's identity if it cannot be readily established or if the police officer suspects on reasonable grounds that identity information provided is false, to ensure that the person appears before a court in relation to the offence, to obtain property in the possession of the person that is connected with the offence, to preserve evidence of the offence or prevent the fabrication of evidence, to prevent the harassment of, or interference with, any person who may give evidence in relation to the offence, (viii) to protect the safety or welfare of any person (including the person arrested), because of the nature and seriousness of the offence. (2) A police officer may also arrest a person without a warrant if directed to do so by another police officer. The other police officer is not to give such a direction unless the other officer may lawfully arrest the person without a warrant. (3) A police officer who arrests a person under this section must, as soon as is reasonably practicable, take the person before an authorised officer to be dealt with according to law. Note. The police officer may discontinue the arrest at any time and without taking the arrested person before an authorised officer – see section 105. (4) A person who has been lawfully arrested under this section may be detained by any police officer under Part 9 for the purpose of investigating whether the person committed the offence for which the person has been arrested and for any other purpose authorised by that Part. This section does not authorise a person to be arrested for an offence for which the person has already been tried. Nettle For the purposes of this section, property is connected with an offence if it is connected with the offence within the meaning of Part 5." Section 105 of LEPRA provided that: "Arrest may be discontinued (1) A police officer may discontinue an arrest at any time. (2) Without limiting subsection (1), a police officer may discontinue an arrest in any of the following circumstances: if the arrested person is no longer a suspect or the reason for the arrest no longer exists for any other reason, if it is more appropriate to deal with the matter in some other manner, including, for example, by issuing a warning or caution or a penalty notice or court attendance notice or, in the case of a child, dealing with the matter under the Young Offenders Act 1997. (3) A police officer may discontinue an arrest despite any obligation under this Part to take the arrested person before an authorised officer to be dealt with according to law." Section 107 of LEPRA provided that: "Part does not affect alternatives to arrest (1) Nothing in this Part affects the power of a police officer to commence proceedings for an offence against a person otherwise than by arresting the person. (2) Nothing in this Part affects the power of a police officer to issue a warning or a caution or a penalty notice to a person." Part 9 of LEPRA was entitled "Investigations and questioning". The objects of Pt 9 were set out in s 109 of LEPRA as follows: to provide for the period of time that a person who is under arrest may be detained by a police officer to enable the investigation of the person's involvement in the commission of an offence, and Nettle to authorise the detention of a person who is under arrest for such a period despite any requirement imposed by law to bring the person before a Magistrate or other authorised officer or court without delay or within a specified period, and to provide for the rights of a person so detained." Section 113(1) of LEPRA provided that Pt 9 of LEPRA did not: confer any power to arrest a person, or to detain a person who has not been lawfully arrested, or prevent a police officer from asking or causing a person to do a particular thing that the police officer is authorised by law to ask or cause the person to do (for example, the power to require a person to submit to a breath analysis under Division 2 of Part 2 of Schedule 3 to the Road Transport Act 2013), or independently confer power procedure." to carry out an investigative Division 2 of Pt 9 of LEPRA, which was entitled "Investigation and questioning powers", was comprised of ss 114 to 121. Section 114 provided that: "Detention after arrest for purposes of investigation (cf Crimes Act 1900, s 356C) (1) A police officer may in accordance with this section detain a person, who is under arrest, for the investigation period provided for by section 115. (2) A police officer may so detain a person for the purpose of investigating whether the person committed the offence for which the person is arrested. If, while a person is so detained, the police officer forms a reasonable suspicion as to the person's involvement in the commission of any other offence, the police officer may also investigate the person's involvement in that other offence during the investigation period for the arrest. It is immaterial whether that other offence was committed before or after the commencement of this Part or within or outside the State. Nettle The person must be: released (whether unconditionally or on bail) within the investigation period, or brought before an authorised officer or court within that period, or, if it is not practicable to do so within that period, as soon as practicable after the end of that period. (5) A requirement in another Part of this Act, the Bail Act 1978 or any other relevant law that a person who is under arrest be taken before a Magistrate or other authorised officer or court, without delay, or within a specified period, is affected by this Part only to the extent that the extension of the period within which the person is to be brought before such a Magistrate or officer or court is authorised by this Part. If a person is arrested more than once within any period of 48 hours, the investigation period for each arrest, other than the first, is reduced by so much of any earlier investigation period or periods as occurred within that 48 hour period. The investigation period for an arrest (the earlier arrest) is not to reduce the investigation period for a later arrest if the later arrest relates to an offence that the person is suspected of having committed after the person was released, or taken before a Magistrate or other authorised officer or court, in respect of the earlier arrest." Section 115 provided in substance that the "investigation period" is a period that begins when the person is arrested and ends at a time that is reasonable having regard to all the circumstances, but does not exceed the maximum investigation period; and that the "maximum investigation period" is four hours or such longer period as the maximum investigation period may be extended to by a detention warrant. Section 116(1) provided in substance that, in determining what is a reasonable time for the purposes of s 115(1), all the relevant circumstances of the particular case must be taken into account; and s 116(2) provided that, without limiting the relevant circumstances that must be taken into account, the following circumstances (if relevant) were to be taken into account: the person's age, physical capacity and condition and mental capacity and condition, Nettle (b) whether the presence of the person is necessary for the investigation, the number, seriousness and complexity of the offences under investigation, (d) whether the person has indicated a willingness to make a statement or to answer any questions, the time taken for police officers connected with the investigation (other than police officers whose particular knowledge of the investigation, or whose particular skills, are necessary to the investigation) to attend at the place where the person is being detained, whether a police officer reasonably requires time to prepare for any questioning of the person, the time required for facilities for conducting investigative procedures in which the person is to participate (other than facilities for complying with section 281 of the Criminal Procedure Act 1986) to become available, the number and availability of other persons who need to be questioned or from whom statements need to be obtained, the need to visit the place where any offence concerned is believed to have been committed or any other place reasonably connected with the investigation of any such offence, the time during which the person is in the company of a police officer before and after the person is arrested, the time taken to complete any searches or other investigative procedures that are reasonably necessary to the investigation (including any search of the person or any other investigative procedure in which the person is to participate), the time required to carry out any other activity that is reasonably necessary for the proper conduct of the investigation." The District Court proceedings Mr Robinson brought proceedings in the District Court of New South Wales against the State of New South Wales claiming damages for false Nettle imprisonment constituted by his arrest. The State of New South Wales defended the claim on the basis that the arrest was lawfully effected pursuant to ss 99(1)(a) and 99(1)(b)(i), (iv) and (ix) of LEPRA. Although the pleadings are not before the Court, in his reasons for judgment the trial judge (Judge P Taylor SC) identified the issues at trial as being: (1) Did Constable Smith suspect that Mr Robinson had committed an offence? (2) Did Constable Smith have reasonable grounds for suspecting that Mr Robinson had committed an offence? (3) Was Constable Smith satisfied that the arrest was reasonably necessary to stop Mr Robinson repeating the offence? (4) Was Constable Smith satisfied that the arrest was reasonably necessary to ensure that Mr Robinson appeared before the court in relation to the offence? (5) Was Constable Smith satisfied that the arrest was reasonably necessary because of the nature and seriousness of the offence? (6) Was the arrest made in good faith for the purpose of conducting the prosecution and not for some extraneous purpose such as investigation? (7) Was Mr Robinson's continued detention after the arrest, in any event, unlawful? At trial, Constable Smith gave evidence that he believed it had been necessary to arrest Mr Robinson for the alleged breach of the AVO because of the seriousness of the alleged offence and because he believed that it should be dealt with; to prevent a repetition of the offence; and to ensure Mr Robinson's appearance in court. As to the last of those reasons, the trial judge noted that, when Constable Smith had gone to Mr Robinson's last listed address to arrest him, he had found that Mr Robinson was no longer living there, and that Constable Colakides had informed Constable Smith that Mr Robinson had said that he was interstate and "[h]e wouldn't tell us where he was living over the telephone". Constable Smith conceded that he did not believe at the time of arrest that he had enough evidence to charge Mr Robinson. He said that whether he would, ultimately, have been able to charge Mr Robinson depended on what, if anything, Mr Robinson might say in his record of interview. Nettle The trial judge found that: Constable Smith had suspected that Mr Robinson had committed an offence of breaching the AVO and believed that it should be dealt with; Constable Smith had reasonable grounds for that suspicion; Constable Smith had been satisfied that it was reasonably necessary to arrest Mr Robinson to ensure that he appeared before the court; Constable Smith had been satisfied that it was reasonably necessary to arrest Mr Robinson because of the nature and seriousness of the offence; it was not established that Constable Smith was satisfied that arrest was reasonably necessary to prevent a repetition of the offence; it had not been put to Constable Smith, and, there being no other evidence of the fact, it was thus not established, that a purpose of the arrest was to investigate the offence or question Mr Robinson; and the period of one hour and 18 minutes for which Mr Robinson had been detained after being arrested was a reasonable period in all the circumstances. The trial judge rejected Mr Robinson's contention that, in substance, an arrest under s 99 was unlawful unless the arresting officer had determined at the time of arrest that the arrested person would be charged. His Honour reasoned2 that: "If Mr Robinson's construction of s 99(1)(b)(iv) were adopted, a person who was a known flight risk could not be arrested in reliance upon s 99(1)(b)(iv) unless the police officer was already persuaded that the person should be charged (or that the arrest would not be withdrawn under s 105). But a charge requires reasonable and probable cause, namely a positive belief and a sufficient (or reasonable) basis for the belief (see A v 2 Robinson v New South Wales (2017) 26 DCLR (NSW) 106 at 116 [42]. Nettle New South Wales3), a higher obligation on the police officer to that imposed by s 99(1)(a), which requires only a suspicion on reasonable grounds." (emphasis added) On those bases, his Honour dismissed the claim. Proceedings before the Court of Appeal Mr Robinson appealed to the Court of Appeal on the sole ground that the trial judge erred in failing to hold that the arrest and subsequent detention of Mr Robinson was unlawful because, at the time of arrest, Constable Smith had not formed an intention to charge him with any offence. The factual premise of this complaint was said by Mr Robinson to follow from the fact that, at the time of arrest, Constable Smith "did not believe there was enough to charge him" and thus must have contemplated the possibility that Mr Robinson would be released without charge. So characterised, it is apparent that Mr Robinson's complaint was that any intention which Constable Smith may have had to charge Mr Robinson at the time of arrest was not an unqualified intention. Mr Robinson contended that such an intention was an essential precondition to lawful arrest. The State of New South Wales responded that the essential preconditions of a lawful arrest are those found in s 99(1) of LEPRA and that they do not include an intention to charge. McColl JA held4 that s 99(1)(a) upon its proper construction was to be understood as requiring that an arresting officer must at the time of arresting a person have formed the intention to charge that person and advise the arrested person of that charge. This was, in her Honour's view, the result of construing the provision against the background of the common law requirement reflected in s 99(3) of LEPRA that an arrested person must be taken before a justice "as soon as is reasonably practicable", which permits of no more than reasonable time to formulate and lay charges for the purpose of bringing the arrested person before a justice; the implication which her Honour derived from s 107 of LEPRA that the power to arrest without warrant is to be exercised only in order to commence proceedings against the arrested person; and the requirement in s 201(1)(c) of LEPRA that an arresting officer must inform the person arrested of the reason for the exercise of the power of arrest (in the sense of conveying to the person (2007) 230 CLR 500 at 527 [77] per Gleeson CJ, Gummow, Kirby, Hayne, 4 Robinson v New South Wales [2018] NSWCA 231 at [51], [61], [63], [64]. Nettle arrested the charge to be preferred against the person5) and so, therefore, must have an intention so to charge the arrested person at the time of arrest. In her Honour's view6, it was notable that the power to detain a suspect for the purpose of investigating the offence for which the person is arrested is conferred by Pt 9 of LEPRA, given that Pt 9 was relevantly beside the point because it proceeded "via the express requirement in both Pt 8 (s 99(4)) and Pt 9 (s 113(1)(a)) that such further investigation may only be undertaken if there has been a lawful arrest" and "a lawful arrest can only be effected pursuant to s 99 if both s 99(1)(a) and (b) are satisfied". McColl JA expressly rejected7 the trial judge's reasoning that, if that were so, it would be at odds with the fact that the requisite state of mind for an arresting officer to effect an arrest under s 99(1) of LEPRA is reasonable grounds to suspect the commission of an offence, which falls well short of the state of mind of reasonable and probable cause necessary to prosecute and, therefore, to charge. In her Honour's view8, it was apparent from the judgment of Jordan CJ in Bales v Parmeter9, and the joint judgment of Mason and Brennan JJ in Williams "There are not two states of mind. Rather, on this approach the state of mind of the arresting officer which justifies the arrest of a person without warrant is also sufficient to found a finding that the arresting officer who charges the person arrested had 'reasonable and probable cause' to do so." Basten JA likewise reasoned from the general law that an arrest without warrant must be for the purpose of taking the arrested person before a court or justice as soon as reasonably practicable, which, his Honour considered11, 5 Christie v Leachinsky [1947] AC 573 at 586-587 per Viscount Simon, 592-594 per Lord Simonds, 598-599 per Lord du Parcq; Adams v Kennedy (2000) 49 NSWLR 78 at 84 [24] per Priestley JA. 6 Robinson v New South Wales [2018] NSWCA 231 at [73]. 7 Robinson v New South Wales [2018] NSWCA 231 at [96]. 8 Robinson v New South Wales [2018] NSWCA 231 at [81]. (1935) 35 SR (NSW) 182 at 186. (1986) 161 CLR 278 at 300. 11 Robinson v New South Wales [2018] NSWCA 231 at [157]. Nettle implied that an arresting officer or his or her superior must, at the time of arrest, "have the state of mind necessary to lay charges". Basten JA observed12 that the position had been altered by statute, inasmuch as s 99(1)(b) imposed an additional constraint on the use of the power of arrest without warrant. But in his Honour's view, there was "no reason to derive from the existence of [that] additional constraint an implied variation of the long standing requirement that an arrest must be a preliminary step in invoking the criminal process"13. Nor, in his Honour's view, did s 99(3) suggest any change in the law "in this regard"14, for, as his Honour reasoned15, if the effect of the new form of s 99(3) were to remove the conventional purpose underlying a valid arrest, it had been done without any indication as to any alternative purpose or rationale, and the extrinsic materials lent support to the view that the amendment to s 99(3) was not intended to vary that requirement. Basten JA considered it to be immaterial that Pt 9 expressly contemplated that an arrested person may be released before being taken before an authorised officer to be dealt with according to law. As his Honour put it, it was "unclear why the conferral of an additional power to release following an arrest should be read as allowing an arrest for a purpose other than the conventional purpose"16. And, like McColl JA, Basten JA rejected the trial judge's reasoning that so to conclude would be to ignore that the state of mind necessary to arrest is merely reasonable grounds to suspect and that that falls well short of the degree of certainty of guilt necessary to prosecute and therefore to charge. Basten JA observed17 that, "[a]t least in a formal sense, the incoherence of a dual test of intention for a lawful arrest may be resolved by treating the obligation to take the person as soon as practicable before a justice as a separate obligation imposed by law once an arrest has taken place". 12 Robinson v New South Wales [2018] NSWCA 231 at [164]. 13 Robinson v New South Wales [2018] NSWCA 231 at [164]. 14 Robinson v New South Wales [2018] NSWCA 231 at [166]. 15 Robinson v New South Wales [2018] NSWCA 231 at [167], [169]. 16 Robinson v New South Wales [2018] NSWCA 231 at [176]. 17 Robinson v New South Wales [2018] NSWCA 231 at [160]. Nettle But, his Honour said, to do so would be inconsistent with Bales v Parmeter and Drymalik v Feldman18, which he understood19 to stand for the proposition that the purpose of commencing the criminal process attaches at the moment of arrest. By contrast, Emmett A-JA accepted that there is a clear distinction between reasonable grounds to suspect – as his Honour put it, "a state of conjecture or surmise where proof is lacking and the facts [only] reasonably ground a suspicion" – and the degree of reasonable and probable cause necessary to prosecute and, therefore, to charge20. As Emmett A-JA reasoned21, if an arresting officer were required to reach the higher standard of reasonable and probable cause before effecting a lawful arrest without warrant, the mental state required to effect a lawful arrest without warrant would be different from the mental state of suspicion on reasonable grounds expressly provided for in s 99(1)(a). Additionally, as Emmett A-JA observed22, it is clear from s 105(1) that a police officer may discontinue an arrest at any time; s 105(2) demonstrated that the discontinuance may be for any reason, including that it may be considered more appropriate to deal with the matter by other means; and s 105(3) expressly provided that discontinuance may occur despite any obligation to bring the arrested person before an authorised officer, leading to the conclusion that arrest is a process which commences at the time when an arrest begins and continues through subsequent detention. Consequently, as Emmett A-JA reasoned23, when s 99 and s 105 are read together, it is apparent that an arrested person might or might not be brought before an authorised officer, and hence it must be that, while an arresting officer must intend that the arrested person will be brought before an authorised officer, the arresting officer is not required to have "decided" at the time of arrest that he or she will bring the arrested person before an authorised officer. [1966] SASR 227. 19 Robinson v New South Wales [2018] NSWCA 231 at [160]. 20 Robinson v New South Wales [2018] NSWCA 231 at [247]. 21 Robinson v New South Wales [2018] NSWCA 231 at [249]. 22 Robinson v New South Wales [2018] NSWCA 231 at [252]. 23 Robinson v New South Wales [2018] NSWCA 231 at [253]. Nettle Finally, Emmett A-JA observed24 that it is apparent from s 99(4) that a person who has been lawfully arrested under s 99(1) may be detained under Pt 9 for the purpose of investigating whether the person committed the offence for which he or she has been arrested, and thus it would be inconsistent with Pt 9 if an arresting officer were required at the time of arrest to have "concluded" or "decided" that the arrested person will be taken before an authorised officer and charged. Legislative history of s 99 of LEPRA At common law, in order to justify an arrest without warrant it was necessary for the arresting constable to show that he had taken the arrested person without delay and by the most direct route before a justice unless some circumstance reasonably justified a departure from those requirements25. There was no power to detain the subject in order to assemble sufficient evidence in support of the intended charge – to do so was a trespass to person – which meant that an arresting constable had only a limited period of time between arresting the person and bringing the subject before a justice to be charged26. For that reason, it was desirable that an arresting constable have assembled sufficient evidence to support the intended charge before arresting the subject. But it was recognised27 that there are cases in which, if police are prevented from arresting a suspect before assembling sufficient admissible evidence to mount a prima facie case, the work of the police can be seriously hampered: for example, because the suspect might flee, evidence might be destroyed, or further offending might occur. Consequently, under the common law, a constable had a discretion28 to arrest a person on reasonable suspicion that the person had committed an offence. Reasonable suspicion required an arresting constable to have reasonable grounds for suspicion of guilt. It did not, however, require anything like 24 Robinson v New South Wales [2018] NSWCA 231 at [257]. 25 Wright v Court (1825) 4 B & C 596 at 598 [107 ER 1182 at 1182]; Clarke v Bailey (1933) 33 SR (NSW) 303 at 309 per Davidson J. 26 Williams v The Queen (1986) 161 CLR 278 at 295-296 per Mason and Brennan JJ, 306 per Wilson and Dawson JJ. 27 Dumbell v Roberts [1944] 1 All ER 326 at 329 per Scott LJ; Hussien v Chong Fook Kam [1970] AC 942 at 948-949 per Lord Devlin for the Board. 28 See Holgate-Mohammed v Duke [1984] AC 437 at 443 per Lord Diplock. Nettle reasonable and probable cause for prosecution or, in other words, a prima facie case for conviction. Consequently, as was recognised by Lord Devlin in delivering the opinion of the Privy Council in Hussien v Chong Fook Kam29, where under common law an arresting constable arrested a person on the basis of reasonable suspicion, the constable had to act promptly to verify his suspicions or otherwise release the subject without charge: for, if the constable proceeded to charge the subject without prima facie proof of the offence charged, the constable would be at risk of an action for malicious prosecution. The origins of s 99 of LEPRA lie in s 429 of the Criminal Law Amendment Act 1883 (NSW) (46 Vic No 17). It provided that: "Every constable or other person may without a warrant apprehend any person in the act of committing or immediately after having committed an offence punishable whether by indictment or on summary conviction under this or any other Act and take such person together with any property found upon him before a Justice to be dealt with according to law – And may in like manner apprehend and deal with any offender who has committed a crime punishable by death or penal servitude and for which he has not been tried – And every constable may without warrant apprehend and in like manner deal with any person whom he with reasonable cause suspects of having committed any such crime". As Basten JA observed30 in the Court of Appeal, that provision in some respects expanded the powers of arrest of constables and other persons but it did not codify the law relating to arrest. In large part the power of arrest without warrant continued to be governed by the common law. Section 352 of the Crimes Act 1900 (NSW) recast the form of s 429 of the Criminal Law Amendment Act 1883 but with little substantive change. When enacted, it was as follows: Any constable or other person may without warrant apprehend, any person in the act of committing, or immediately after having committed, an offence punishable, whether by indictment, or on summary conviction, under any Act, [1970] AC 942 at 948. 30 Robinson v New South Wales [2018] NSWCA 231 at [140]. Nettle any person who has committed a felony for which he has not been tried, and take him, and any property found upon him, before a Justice to be dealt with according to law. (2) Any constable may without warrant apprehend, any person whom he, with reasonable cause, suspects of having committed any such crime, any person lying, or loitering, in any highway, yard, or other place during the night, whom he, with reasonable cause, suspects of being about to commit any felony, and take him, and any property found upon him, before a Justice to be dealt with according to law." In Clarke v Bailey31, Davidson J (with whom Street CJ and James J agreed) observed that the effect of s 352 of the Crimes Act as it appeared in that form reinforced the common law principle that a constable was required to take an arrested person without delay and by the most direct route before a justice unless circumstances reasonably justified a departure from those requirements, and that the section did not give an arresting constable any discretion in the matter except to the extent that existed before. It remained, as it had been at common law, that there was no power to detain a suspect for longer than was reasonably practicable to bring the suspect before a magistrate to be dealt with according to law. Similarly, as Jordan CJ later concluded in Bales v Parmeter32, the only legitimate purpose for which the power of arrest could be exercised under s 352 was to take the arrested person before a magistrate as soon as reasonably practicable to be dealt with according to law, and s 352 gave no power to restrain a person for any other purpose: "[S]uspicion that a person has committed a crime cannot justify an arrest except for a purpose which that suspicion justifies; and arrest and (1933) 33 SR (NSW) 303 at 309, citing Wright v Court (1825) 4 B & C 596 [107 (1935) 35 SR (NSW) 182 at 188-189. Nettle imprisonment cannot be justified merely for the purpose of asking questions. ... Where the imposition of physical restraint is authorised by law it may be imposed only for the purpose for which it is authorised. ... [I]t may be imposed by a police officer in the course of arresting and bringing before a magistrate a person for whose arrest no warrant has issued, but whom the officer, with reasonable cause, suspects of having committed a crime or an offence punishable whether by indictment or summarily under any Act. ... But the statute, like the common law, authorises him only to take the person so arrested before a justice to be dealt with according to law, and to do so without unreasonable delay and by the most reasonably direct route". (emphasis added) Over the years following Bales v Parmeter, a practice grew up among police forces throughout Australia, as it did in England, of treating the concept of "as soon as is reasonably practicable" as sufficiently flexible to enable police officers to detain an arrested person for some time for investigation of the person's involvement in the offence for which he or she had been arrested before taking the person before an authorised officer to be dealt with according to law. That practice was sanctioned by English courts33. But in Williams v The Queen, Mason and Brennan JJ34 and Wilson and Dawson JJ35 concluded that, without a clear legislative warrant, the practice was unlawful under the common law of Australia36. Hence, in Williams v The Queen, it was held37 that neither the power of a police officer under s 27 of the Criminal Code (Tas) to arrest a person on reasonable grounds to suspect he or she had committed an offence, nor the obligation under s 34A(1) of the Justices Act 1959 (Tas) to bring that person before a justice as soon as was reasonably practicable after the person had been brought into custody, gave any power to delay bringing the person before a justice in order to take the opportunity to question the person. 33 Dallison v Caffery [1965] 1 QB 348 at 366-367 per Lord Denning MR; Holgate- Mohammed v Duke [1984] AC 437 at 445 per Lord Diplock. 34 Williams v The Queen (1986) 161 CLR 278 at 299. 35 Williams v The Queen (1986) 161 CLR 278 at 311. 36 cf Williams v The Queen (1986) 161 CLR 278 at 284 per Gibbs CJ. 37 Williams v The Queen (1986) 161 CLR 278 at 295, 299-300 per Mason and Brennan JJ, 305-306, 313 per Wilson and Dawson JJ. Nettle In reasoning to that conclusion, Mason and Brennan JJ emphasised the passage from Jordan CJ's judgment in Bales v Parmeter earlier set out and expressly rejected the holding of the House of Lords in Holgate-Mohammed v Duke38 that a person may be arrested on reasonable suspicion of guilt for the purpose of using the ensuing period of detention to dispel or confirm the suspicion by questioning of the suspect or seeking further evidence with his assistance39. As their Honours explained40: "That proposition [that a person may be arrested on reasonable suspicion of guilt for the purpose of using the ensuing period of detention to dispel or confirm the suspicion by questioning of the suspect or seeking further evidence with his or her assistance] is opposed to the view which has been taken of the common law in this country. The jealous protection of personal liberty accorded by the common law of Australia requires police so to conduct their investigation as not to infringe the arrested person's right to seek to regain his personal liberty as soon as practicable. Practicability is not assessed by reference to the exigencies of criminal investigation; the right to personal liberty is not what is left over after the police investigation is finished." Mason and Brennan JJ acknowledged41 that it was open to question where should lie the balance between personal liberty and the exigencies of criminal investigation. But their Honours stated that the striking of any different balance was a task for the legislature, which would be able to prescribe safeguards to ameliorate the risk of unconscionable pressure being applied to persons under interrogation while being kept in custody. Their Honours added in obiter dictum that "in general" there was also no reason to think that an arresting police officer would be unable properly to make a complaint or to lay an oral information until he had had an opportunity to question the person arrested42: "In the ordinary case of an arrest on suspicion, the arresting officer must have satisfied himself at the time of the arrest that there are reasonable 39 Williams v The Queen (1986) 161 CLR 278 at 299. 40 Williams v The Queen (1986) 161 CLR 278 at 299. 41 Williams v The Queen (1986) 161 CLR 278 at 296. 42 Williams v The Queen (1986) 161 CLR 278 at 300 per Mason and Brennan JJ. Nettle grounds for suspecting the guilt of the person arrested43, although the grounds of suspicion need not consist of admissible evidence44. If the arresting officer believes the information in his possession to be true, if the information reasonably points to the guilt of the arrested person and if the arresting officer thus believes that the arrested person is so likely to be guilty of the offence for which he has been arrested that on general grounds of justice a charge is warranted, he has reasonable and probable cause for commencing a prosecution45. There is no practical necessity to construe the words 'as soon as is practicable' in s 34A(1) [of the Justices Act] so as to authorize the detention by the police of the person arrested for the purpose of questioning him or conducting inquiries with his assistance." Wilson and Dawson JJ accepted46 that it would be unrealistic not to recognise that the restrictions which the common law placed on the purpose for which an arrested person may be held in custody had on occasions hampered the police, sometimes seriously, in their investigation of crime and the institution of proceedings for its prosecution. But like Mason and Brennan JJ, their Honours concluded that, if the law were to be modified, it was appropriate that it be done by legislation, as they observed it had been modified in Victoria by amendments to s 460 of the Crimes Act 1958 (Vic)47. Legislative history of Pt 9 of LEPRA Despite the decision in Williams v The Queen, some police forces (including the New South Wales Police Force) continued to detain arrested persons for investigation for substantial periods of time prior to taking them before a duly authorised officer48. Evidently, they did so with relative confidence 43 Dumbell v Roberts [1944] 1 All ER 326 at 329. 44 See Hussien v Chong Fook Kam [1970] AC 942 at 948-949. 45 See Mitchell v John Heine & Son Ltd (1938) 38 SR (NSW) 466 at 469; Commonwealth Life Assurance Society Ltd v Brain (1935) 53 CLR 343 at 382; Glinski v McIver [1962] AC 726 at 766-767. 46 Williams v The Queen (1986) 161 CLR 278 at 312. 47 Williams v The Queen (1986) 161 CLR 278 at 311-313. 48 New South Wales Law Reform Commission, Criminal Procedure: Police Powers of Detention and Investigation after Arrest, Report No 66 (1990) at [1.51]-[1.54]. Nettle that, although evidence obtained as a result of the process would be considered as improperly obtained, criminal courts would be disposed Increasingly, however, that situation came to be regarded as unacceptable50. In 1990, the New South Wales Law Reform Commission concluded51 that the common law imposed artificial constraints on police, who were obliged, in their own view, regularly to skirt the law in order properly to investigate allegations of criminal activity, and the Law Reform Commission recommended52 replacement of the common law regarding arrest without warrant with a comprehensive legislative regime "addressing the needs of the police for adequate power to conduct criminal investigations while offering proper and realisable safeguards for persons in police custody". to admit The New South Wales Parliament responded to the Law Reform Commission's recommendations with the enactment of the Crimes Amendment (Detention after Arrest) Act 1997 (NSW), which relevantly created a new Pt 10A of the Crimes Act similar in form to what now appears in Pt 9 of LEPRA. As was explained53 in the Second Reading Speech for the Crimes Amendment (Detention after Arrest) Bill 1997, the new Pt 10A was intended to make the law accord with practice by responding to the need which had been identified in Williams v The Queen for legislation to enable police to detain an arrested person for the purpose of investigation, subject to controls to protect the person: "The decision in Williams' case has been very much honoured in the breach over the years. ... That is a problem that must be remedied. The Crimes Amendment (Detention [a]fter Arrest) Bill addresses the problem. It does so by creating a regime whereby police are In accordance with the common law discretion to exclude illegally or improperly obtained evidence, discussed in Bunning v Cross (1978) 141 CLR 54. 50 Australia, Law Reform Commission, An Interim Report: Criminal Investigation, Report No 2 (1975) at 40 [90], 147 [328]. 51 New South Wales Law Reform Commission, Criminal Procedure: Police Powers of Detention and Investigation after Arrest, Report No 66 (1990) at [1.48]. 52 New South Wales Law Reform Commission, Criminal Procedure: Police Powers of Detention and Investigation after Arrest, Report No 66 (1990) at [1.72]. 53 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 26 June Nettle empowered to detain persons in custody after arrest for the completion of investigatory procedures, but only for strictly limited periods. A detailed system is set out whereby police and citizens will know precisely their rights and obligations. In short, the bill strikes a proper balance between allowing the police to make legitimate investigations of alleged offences on the one hand, and, on the other hand, safeguarding the rights of ordinary citizens suspected of having committed those offences. The need for legislation of this sort was of course raised by the High Court in Williams' case. That need was subsequently affirmed by the New South Wales Law Reform Commission in its 1990 report on police powers of detention and investigation after arrest. The recommendations of that report have guided the preparation of this bill. Some months ago, the royal commission [into the New South Wales Police Service] was provided with a draft version of the bill similar to that which was circulated more widely in April 1997. In his interim report ... Justice Wood affirmed that the bill 'will clarify an area of the common law that is currently fraught with uncertainty and difficulty in its application'. More recently, [his] final report ... has recommended the enactment of the bill 'as speedily as possible'." It was emphasised54 in the Second Reading Speech, as it was provided in s 356B in the new Pt 10A of the Crimes Act following the enactment of the Crimes Amendment (Detention after Arrest) Act 1997 (NSW), that Pt 10A was not intended to confer any new power of arrest, and, in particular, that it was not intended to confer any power of arrest simply for the purpose of making inquiries. But it was also stated that, although it would remain that a person could not be arrested without warrant unless he or she were suspected on reasonable grounds of having committed an offence, the new Pt 10A would have the effect that the arrested person could be detained for the investigation period for the purpose of investigating the person's involvement in the alleged offence before being either brought before an authorised officer to be dealt with according to law or released: "[T]his bill confers no new power of arrest. Police will not be able to arrest a person in any circumstance where the law does not otherwise already allow them to do so [and] the bill does not in itself authorise any new investigative procedures or powers. Rather, it merely allows police, 54 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 26 June Nettle during the investigation period, to carry out investigative procedures that are otherwise authorised in relation to persons who are lawfully under arrest. ... [T]he period for which police may detain a person is 'a reasonable time'. However, pursuant to proposed section 356D(2), that reasonable time may not be more than four hours unless a detention warrant is granted." In 2002, the New South Wales Government introduced the Law Enforcement (Powers and Responsibilities) Bill 2002 to give effect to the recommendations of the Royal Commission into the New South Wales Police Service55. As appears from the Second Reading Speech for that Bill, it was intended substantially to re-enact the existing legislation but with amendments more accurately to reflect some areas of common law and to address other areas in the existing law where gaps had been identified56. Part 8 of LEPRA in substance re-enacted the arrest provisions of Pt 10 of the Crimes Act and Pt 9 of LEPRA in substance re-enacted the investigation and questioning provisions of Pt 10A of the Crimes Act. As first enacted, s 99 of LEPRA appeared as follows: "Power of police officers to arrest without warrant (cf Crimes Act 1900, s 352, Cth Act, s 3W) (1) A police officer may, without a warrant, arrest a person if: the person is in the act of committing an offence under any Act or statutory instrument, or the person has just committed any such offence, or the person has committed a serious indictable offence for which the person has not been tried. (2) A police officer may, without a warrant, arrest a person if the police officer suspects on reasonable grounds that the person has committed an offence under any Act or statutory instrument. 55 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 September 2002 at 4846. 56 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 September 2002 at 4846. Nettle (3) A police officer must not arrest a person for the purpose of taking proceedings for an offence against the person unless the police officer suspects on reasonable grounds that it is necessary to arrest the person to achieve one or more of the following purposes: to ensure the appearance of the person before a court in respect of the offence, to prevent a repetition or continuation of the offence or the commission of another offence, to prevent the concealment, loss or destruction of evidence relating to the offence, to prevent harassment of, or interference with, a person who may be required to give evidence in proceedings in respect of the offence, to prevent the fabrication of evidence in respect of the offence, to preserve the safety or welfare of the person. (4) A police officer who arrests a person under this section must, as soon as is reasonably practicable, take the person, and any property found on the person, before an authorised officer to be dealt with according to law." (emphasis added) As is apparent, s 99(1) and (2) as first enacted thus substantially restated the power of arrest without warrant previously conferred under s 352 of the Crimes Act. But whereas the power of arrest under s 352 (like the power of arrest at common law) had been unguided – in that it was left to the unguided discretion of the arresting police officer to determine the circumstances in which it was appropriate to arrest a suspect rather than proceed by other means57 – s 99(3) of LEPRA as first enacted expressly provided for six situations in which a police officer would be justified in exercising the discretion to arrest and, in effect, provided that the power of arrest without warrant was not to be exercised in any other circumstances. 57 See and compare Zaravinos v New South Wales (2004) 62 NSWLR 58 at 66 [24], 71-72 [37] per Bryson JA. Nettle Clearly enough, s 99(3) was designed to assist police by making more certain when it was appropriate to arrest a suspect rather than proceeding by other means. Just as clearly, however, the new provision was also designed to guard against the risk of the power of arrest being exercised in inappropriate circumstances by providing that the power was not to be exercised in any other than the six specified circumstances. It is to be observed that, as first enacted, s 99(3) referred to the exercise of the power of arrest as being "for the purpose of taking proceedings for an offence against the person": presumably, in order to emphasise that the only permissible purpose of arrest was to take the arrested person before an authorised officer to be dealt with according to law in accordance with s 99(4). But it should also be noticed that, as enacted, s 105 – located in Pt 8 of LEPRA – formed part of the context in which Pt 9 sat. Section 105 expressly provided for the discontinuance of an arrest at any time, including when and if an arrested person ceased to be a suspect or it was determined that it was more appropriate to deal with the matter by other means. Part 9 of LEPRA (ss 109 to 132) as first enacted was similar to Pt 10A of the Crimes Act (ss 354 to 356Y) following the enactment of the Crimes Amendment (Detention after Arrest) Act 1997 (NSW), with two significant differences. The first was the introduction of s 105, into Pt 8 of LEPRA, which expressly conferred the power of discontinuance of an arrest at any time, to which reference has just been made. The Crimes Act did not contain an express provision to that effect. The second was that Pt 9 of LEPRA did not include a provision like s 356Y of the Crimes Act providing for review of Pt 10A of the Crimes Act as soon as possible after 12 months from its commencement. The form of s 99 of LEPRA at the time of Mr Robinson's arrest was introduced by the Law Enforcement (Powers and Responsibilities) Amendment (Arrest without Warrant) Act 2013 (NSW) ("the 2013 LEPRA amendments"). As is apparent from comparison of the form of s 99 as first enacted with the form of s 99 as it appeared following the 2013 LEPRA amendments58, the 2013 LEPRA amendments in substance consolidated into s 99(1)(a) the several powers of arrest previously provided for separately in s 99(1) and (2); relocated from s 99(3) to s 99(1)(b) the list of circumstances in which the power of arrest may be exercised; added three new situations to the list of circumstances in which the power of arrest may be exercised (making a total list of nine such circumstances); relocated from s 99(4) to s 99(3) the requirement to take an arrested person 58 See [11]. Nettle before an authorised officer as soon as reasonably practicable; added to s 99(3) the cross-referencing note that an arresting officer may, under s 105, discontinue an arrest at any time without taking the arrested person before an authorised officer; removed the reference previously contained in s 99(3) to the exercise of the power of arrest being "for the purpose of taking proceedings for an offence against the person"; and added, in the form of s 99(4), an express provision, linking s 99 to Pt 9, that a person who has been lawfully arrested under s 99 may be detained under Pt 9 for the purpose of investigating whether the person committed the offence for which the person has been arrested or for any other purpose authorised by that Part. The effect of s 99 of LEPRA Contrary to the State of New South Wales' submissions, s 99(1)(b) of LEPRA did not change the purpose or add to the purposes for which a person may be arrested without warrant. As s 99(3) makes clear, a police officer who arrests a person under s 99(1) on reasonable suspicion of committing or having committed an offence must, as soon as is reasonably practicable, take the person before an authorised officer to be dealt with according to law. Consequently, the only purpose for which a person may be arrested under s 99(1) remains as it was under s 352 of the Crimes Act59: to take him or her before an authorised officer to be dealt with according to law. What did change, however, as a result of LEPRA or, more accurately, as a result of the enactment of Pt 10A of the Crimes Act and now appears more pellucidly from the cross-referencing note since added to s 99(3); the deletion from s 99(3) as first enacted of the stipulation that arrest be "for the purpose of taking proceedings for an offence against the person"; and the addition of the express power of discontinuance of arrest in s 105, is that, once a person has been lawfully arrested under s 99 for the purpose of taking him or her before an authorised officer to be dealt with according to law, the person may be detained for the investigation period60 for the purpose of investigating whether he or she committed the offence for which he or she has been arrested, and only then be 59 See Bales v Parmeter (1935) 35 SR (NSW) 182 at 189 per Jordan CJ. 60 As defined by LEPRA, s 115. Nettle taken before an authorised officer to be dealt with according to law or alternatively dealt with by other means or released61. Furthermore, although it remains that the only purpose for which a police officer may arrest a person under s 99 is the purpose of taking the person before an authorised officer to be dealt with according to law, and only if one or more of the circumstances adumbrated in s 99(1)(b)(i) to (ix) is applicable, a police officer contemplating the exercise of the power of arrest under s 99(1) may now properly take into account that, if the person is lawfully arrested on the basis of reasonable grounds to suspect that the person is committing or has committed an offence, the person may then be detained for up to the investigation period for the investigation of the person's involvement in the offence for which the person has been arrested, at which point a final decision can then be made whether to proceed to take the person before the authorised officer to be dealt with according to law, to proceed by other means, or to release the person. The purpose of the power to arrest under s 99, being to take the person before an authorised officer to be dealt with according to law, is, therefore, a purpose subject the decision-making power conferred by ss 105 and 114 in respect of the person detained under Pt 9. the proper exercise of in accordance with to defeasance This is not to say that every person who is lawfully arrested under s 99 of LEPRA may lawfully be detained under Pt 9 for the purposes of investigating the person's involvement in the commission of the offence. As was earlier set out, the "investigation period" is defined as such period of time not exceeding the maximum investigation period as is reasonable having regard to all the circumstances62. In some cases, possibly many – for example, cases of relatively minor offences where the facts are clear – it might not be reasonable to detain the person for any significant period of time at all. There is no power to detain a person under Pt 9 for any purpose other than investigating the person's involvement in the offence for which he or she has been arrested, or for investigation in accordance with s 114(3), and, if the facts are clear, there is nothing to be gained by further investigating the person's involvement in the offence. In such a case, s 115 would curtail or preclude any investigation period. Equally, however, there are cases, particularly those involving serious offences 61 See and compare North Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 256 CLR 569 at 586-588 [22]-[25] per French CJ, Kiefel and 62 LEPRA, s 115. Nettle where the facts are not clear – for example, a case of homicide where the arresting officer has reason to suspect that it might be a case of self-defence or of excessive self-defence manslaughter – where there is likely to be very good reason for the arresting officer to exercise the power under Pt 9 to detain the arrested person for the investigation period in order to investigate the person's involvement in the offence, and only then make a final decision whether to take the person before an authorised officer to be dealt with according to law, to deal with the person by other means, or to release the person. Contrary to the majority's reasoning63 in the Court of Appeal, the fact that an arresting officer has not at the time of arrest definitely determined that the arrested person will be charged with the offence for which the person is arrested does not mean that the arrest is not for the purpose of taking the person before an authorised officer to be dealt with according to law. Generally speaking, the fact that the purpose of an act is defeasible does not mean that it is not the purpose of the act. As Joseph Raz remarks64, "[t]he notion of one reason overriding another should be carefully distinguished from that of a reason being cancelled by a cancelling condition". Hence, just as a reservation of funds for the purpose of discharging a designated liability does not cease to be for that purpose by reason only that it is recognised at the time of reservation that events might later occur which result in the liability being discharged by other means, an arrest for the purpose of taking the arrested person before an authorised officer does not cease to be for that purpose by reason only that it is recognised at the time of arrest that, following investigation of the person's involvement in the offence for which the person is arrested, it may emerge that the arresting officer's suspicion of the person's involvement in the offence is not sufficiently borne out for the person to be charged, or that the person should be dealt with by other means, or that the person should be released65. So long as an arresting officer's state of mind at the time of arrest is that the person will be taken before an authorised officer to be dealt with according to law unless, by reason of investigation of the person's involvement in the offence during the investigation period, it emerges that the arresting officer's suspicion is not sufficiently borne out to charge the person or that the person should be dealt with by some other means or released, the arrest is 63 Robinson v New South Wales [2018] NSWCA 231 at [60]-[65] per McColl JA, [164]-[167] per Basten JA. 64 Raz, Practical Reason and Norms (1975) at 27. 65 LEPRA, s 105(2). Nettle for the purpose of taking the person before an authorised officer to be dealt with according to law. As Emmett A-JA rightly concluded66: "While s 99 does not modify the common law principle to the extent contended by [the State of New South Wales], it has modified the common law to the extent that there is no longer a requirement that the person be charged. It is clear that, by amending s 99, the legislature intended to introduce a second step in the arresting process, the first being to satisfy ss 99(1)(a) and 99(1)(b), and the second being the exercise of discretion by a police officer when [finally] deciding to charge. In that way, the ultimate purpose of arrest is still to bring the arrested person before an authorised officer, by laying a charge, and the arrest cannot be for the purpose of investigation." The degree of certainty of guilt required to charge It is true, as has been noticed, that, in Williams v The Queen, Mason and Brennan JJ observed67 in obiter dictum that there was no reason to think that, "in general", an arresting police officer would be unable to make a complaint or to lay an oral information until he had had an opportunity to question the person arrested. But contrary to the majority's reasoning in the Court of Appeal68, Mason and Brennan JJ are not to be taken thereby to have represented that what suffices to constitute reasonable grounds to suspect must necessarily be enough to lead an arresting officer to believe that the arrested person is so likely to be guilty of the offence for which he or she has been arrested that a charge is warranted. The essential point of both Dumbell v Roberts69 and Hussien70 – which Mason and Brennan JJ cited71 with evident approval in support of their analysis of reasonable grounds to suspect – was that the requirement of reasonable grounds 66 Robinson v New South Wales [2018] NSWCA 231 at [273]. 67 Williams v The Queen (1986) 161 CLR 278 at 300. 68 Robinson v New South Wales [2018] NSWCA 231 at [79]-[94] per McColl JA, [148]-[160] per Basten JA. [1944] 1 All ER 326. 71 Williams v The Queen (1986) 161 CLR 278 at 300. Nettle to suspect is "very limited" and nothing like as much as a prima facie case. As Lord Devlin stated72 in Hussien: "Suspicion in its ordinary meaning is a state of conjecture or surmise where proof is lacking: 'I suspect but I cannot prove.' Suspicion arises at or near the starting-point of an investigation of which the obtaining of prima facie proof is the end." Likewise, as this Court observed73 in George v Rockett: "Suspicion, as Lord Devlin said in Hussien v Chong Fook Kam74, 'in its ordinary meaning is a state of conjecture or surmise where proof is lacking: "I suspect but I cannot prove."' The facts which can reasonably ground a suspicion may be quite insufficient reasonably to ground a belief, yet some factual basis for the suspicion must be shown. In Queensland Bacon Pty Ltd v Rees75, a question was raised as to whether a payee had reason to suspect that the payer, a debtor, 'was unable to pay [its] debts as they became due' as that phrase was used in s 95(4) of the Bankruptcy Act 1924 (Cth). Kitto J said76: 'A suspicion that something exists is more than a mere idle wondering whether it exists or not; it is a positive feeling of actual apprehension or mistrust, amounting to "a slight opinion, but without sufficient evidence", as Chambers's Dictionary expresses it. Consequently, a reason to suspect that a fact exists is more than a reason to consider or look into the possibility of its existence. The notion which "reason to suspect" expresses in sub-s (4) is, I think, of something which in all the circumstances would create in the mind of a reasonable person in the position of the payee an actual apprehension or fear that the situation of the payer is in actual fact that which the sub-section describes – a mistrust of the payer's ability to pay his debts as they become due and of the effect which 72 Hussien v Chong Fook Kam [1970] AC 942 at 948. 73 George v Rockett (1990) 170 CLR 104 at 115-116. [1970] AC 942 at 948. (1966) 115 CLR 266. 76 Queensland Bacon Pty Ltd v Rees (1966) 115 CLR 266 at 303. Nettle acceptance of the payment would have as between the payee and the other creditors.'" That Mason and Brennan JJ cannot have intended to equate reasonable grounds to suspect with the state of belief required to charge is further borne out by their Honours' observation77 that: "Whatever a police officer should do before making a complaint or preferring an oral information, s 34A casts no obligation on him to make the complaint or prefer the information when an arrested person is brought before a justice pursuant to that section." At common law, and under s 352 of the Crimes Act as it was before the enactment of Pt 10A, there was no statutory warrant to delay taking an arrested person before an authorised officer. Hence, as Lord Devlin observed78 in Hussien, it was desirable "as a general rule" that an arrest should not be made "until the case is complete". But, as has been seen, that did not mean that an arrest could not be effected until the arresting officer was satisfied of the existence of a prima facie case. At common law, and under s 352 of the Crimes Act, an arresting officer had a discretion to arrest on reasonable suspicion when the case demanded it. What it meant was that the arrested person had to be brought before an authorised officer forthwith, and if the arrested person were so brought before an authorised officer, and charged, before the arresting officer was satisfied that the arrested person was so likely guilty of the offence for which he or she had been arrested that a charge was warranted, the arresting officer would be at risk of a claim for malicious prosecution79. That is the significance of Mason and Brennan JJ's observation that s 34A of the Justices Act cast no obligation on an arresting officer to make a complaint or prefer an information when an arrested person was brought before a justice pursuant to that section: the requirement was one to take the arrested person before the authorised officer as soon as practicable, not charge the arrested person80. In that sense, Basten JA was correct in observing81 that the "incoherence" between what is required to 77 Williams v The Queen (1986) 161 CLR 278 at 299. 78 Hussien v Chong Fook Kam [1970] AC 942 at 948. 79 See [31] above. 80 See Williams v The Queen (1986) 161 CLR 278 at 289 per Mason and Brennan JJ. 81 Robinson v New South Wales [2018] NSWCA 231 at [160]. Nettle comprise reasonable grounds to suspect and reasonable and probable cause to charge may be resolved by treating the obligation to take an arrested person as soon as practicable before an authorised officer as a separate obligation imposed by law once an arrest has taken place. But his Honour was not correct that so to reason would be inconsistent with Bales v Parmeter and Drymalik v Feldman. Contextual construction In any event, and ultimately more importantly, even if Bales v Parmeter, Drymalik v Feldman or Williams v The Queen were properly to be understood as requiring that, before effecting an arrest, an arresting officer had to make an unqualified decision to charge the person arrested (and to repeat, for the reasons given that is not a correct understanding of those decisions), each of them was decided on the basis of legislative provisions that, in marked contradistinction to the cross-referencing note to s 99(3) of LEPRA following the 2013 LEPRA amendments, the provisions of s 99(4) and the provisions of Pt 9 of LEPRA that have been identified, did not expressly authorise the arresting officer to detain the arrested person for the investigation period for the purpose of inquiring into that person's involvement in the offence for which he or she has been arrested; discontinue the arrest at any time; or within the investigation period either take the person before an authorised officer to be dealt with according to law, deal with the person by other means, or release the person. Granted, s 99(1)(a) as it has appeared since the 2013 LEPRA amendments is not relevantly different from the form of s 352 of the Crimes Act considered in Bales v Parmeter or the form of s 27 of the Criminal Code (Tas) considered in Williams v The Queen. And as has been seen, s 99(1)(b) says nothing as to the purpose for which a person may be arrested as opposed to circumstances in which arrest may be regarded as appropriate. But s 99(1) of LEPRA presents in a very different context from s 352 of the Crimes Act or s 27 of the Criminal Code (Tas), and it is in the context in which s 99 now appears that it must be construed "so that it is consistent with the language and purpose of all the provisions of the statute"82. 82 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69] per McHugh, Gummow, Kirby and Hayne JJ. See also K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309 at 315 per Mason J; CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408 per Brennan CJ, Dawson, Toohey and Gummow JJ; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 31 [4] per French CJ, 46-47 [47] per Hayne, Heydon, Crennan and Kiefel JJ; Certain Lloyd's Footnote continues Nettle Given that context, and given in particular as part of that context that s 105 expressly provides for each of the several possible ways in which an arrest may now be finalised (as opposed to the sole outcome of taking an arrested person before a proper officer that applied under s 352 of the Crimes Act and kindred provisions the subject of consideration in Bales v Parmeter and Williams v The Queen), a construction of s 99(1) which requires an arresting officer to have made an unqualified decision at the time of arrest to take the arrested person before an authorised officer to be dealt with according to law is, as Emmett A-JA reasoned83, necessarily precluded. To treat Bales v Parmeter, Drymalik v Feldman and Williams v The Queen as determinative of the correct construction of the current form of s 99 would not only fly in the face of the express terms of s 99 as amended by the 2013 LEPRA amendments, but run directly counter to the clear legislative purpose of Pt 9 of LEPRA of providing a regime "whereby police are empowered to detain persons in custody after arrest for the completion of investigatory procedures"84. Conclusion and orders It follows that the trial judge was right to hold that Mr Robinson's arrest under s 99 of LEPRA was not rendered unlawful by reason of Constable Smith not having formed an unqualified intention to charge Mr Robinson at the time of arrest. The appeal should be allowed. The orders of the Court of Appeal should be set aside and in their place it should be ordered that Mr Robinson's appeal to the Court of Appeal be dismissed with costs. Mr Robinson should pay the State of New South Wales' costs of the appeal to this Court. Underwriters v Cross (2012) 248 CLR 378 at 389 [24], 391 [30]-[31] per French CJ and Hayne J, 411-412 [88]-[89] per Kiefel J; Regional Express Holdings Ltd v Australian Federation of Air Pilots (2017) 262 CLR 456 at 465 [19] per Kiefel CJ, Keane, Nettle, Gordon and Edelman JJ; SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362 at 368 [14] per Kiefel CJ, Nettle and Gordon JJ. 83 Robinson v New South Wales [2018] NSWCA 231 at [253]. 84 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 26 June Bell BELL, GAGELER, GORDON AND EDELMAN JJ. This appeal concerns whether a police officer has the power to arrest a person, without warrant, under s 99 of the Law Enforcement (Powers and Responsibilities) Act 2002 (NSW) ("LEPRA") when, at the time of the arrest, the officer had not formed the intention to charge the arrested person. The answer is "no". In Bales v Parmeter85, Jordan CJ provided a clear statement of the law in New South Wales: an arrest can only be for the purpose of taking the arrested person before a magistrate (or other authorised officer) to be dealt with according to law to answer a charge for an offence. An arrest merely for the purpose of asking questions or making investigations in order to see whether it would be proper or prudent to charge the arrested person with a crime is an arrest for an improper purpose and is unlawful. That straightforward, single criterion has been repeatedly cited with approval in New South Wales and elsewhere86. In making that statement, Jordan CJ was expressing the effect of s 352 of the Crimes Act 1900 (NSW)87. Nothing done in LEPRA (in its original or amended form), or for that matter in any of the intervening legislative amendments which will be examined, has displaced that single criterion. Facts restrained Mr Robinson On 9 October 2013, Mr Robinson was served with a Provisional Order (ex parte) Apprehended Personal Violence Order after a complaint by Ms Singh. things, The order her, harassing Ms Singh, deliberately damaging or interfering with her property, or contacting her "by any means whatsoever" except by way of Mr Robinson's lawyer. On 16 October 2013, the Local Court of New South Wales made an Apprehended Violence Order ("AVO") against Mr Robinson in terms equivalent to the initial order, other intimidated from, conduct among that engaging (1935) 35 SR (NSW) 182 at 188-190. 86 Ex parte Evers; Re Leary (1945) 62 WN (NSW) 146 at 147; R v Jeffries (1946) 47 SR (NSW) 284 at 287-288; Drymalik v Feldman [1966] SASR 227 at 233-234; R v Banner [1970] VR 240 at 249-250; R v Clune [1982] VR 1 at 10-11, 18; Williams v The Queen (1986) 161 CLR 278 at 283, 293-294, 306-307. See also R v Stafford (1976) 13 SASR 392 at 400-401; R v Larson and Lee [1984] VR 559 at 568-569; Dowse v New South Wales (2012) 226 A Crim R 36 at 46 [27]. 87 Bales (1935) 35 SR (NSW) 182 at 189. Bell with additional orders that he must not approach or contact or enter the premises at which Ms Singh lived or worked. On 20 December 2013, Ms Singh reported to police that Mr Robinson had sent an email to one of her employees, making false allegations. Ms Singh made a signed statement. Constable Smith of Sydney City Police Station read the police file concerning the complaint on the morning of Sunday 22 December 2013. He formed the opinion that Mr Robinson had breached the AVO and that he would go to Mr Robinson's address and arrest him. At 11.15 am, police officers, including Constable Smith, went to what they believed to be Mr Robinson's residence but were told by neighbours that Mr Robinson no longer lived there. They were unable to locate him. At noon, Mr Robinson telephoned the police and told Constable Colakides that he had been told that the Sydney City police wished to speak to him regarding a breach of an AVO. Mr Robinson said he was homeless and currently interstate but that he would be in Sydney the next day. He refused to provide the address where he would be the next day. He said that he would not be attending any police station before seeking legal representation. Constable Colakides told Mr Robinson to attend Sydney City Police Station the next day regarding breaching an AVO. Mr Robinson was argumentative and did not agree to do so. Constable Colakides made a note of the conversation on the New South Wales Police Force's Computerised Operational Policing System and told Constable Smith of what had occurred. At 5.00 pm on the same day, Mr Robinson voluntarily entered Sydney City Police Station. Constable Smith immediately arrested Mr Robinson and told him he was being arrested for breaching an AVO. Constable Smith offered Mr Robinson the opportunity of an interview, which Mr Robinson accepted. At the end of the interview, at 6.18 pm, Mr Robinson was released without charge. Mr Robinson brought proceedings in the District Court of New South Wales against the State of New South Wales claiming damages for wrongful arrest and false imprisonment constituted by his arrest. The State of New South Wales defended the claim on the basis that the arrest was lawfully effected pursuant to ss 99(1)(a) and 99(1)(b)(i), (iv) and (ix) of LEPRA. At first instance, Constable Smith gave evidence that he believed it had been necessary to arrest Mr Robinson for the alleged breach of the AVO because of the seriousness of the alleged offence, because he believed that it should be Bell "dealt with", to prevent a repetition of the offence, and to ensure Mr Robinson's appearance in court. At the time Constable Smith arrested Mr Robinson, he had not decided to charge him with any offence. Constable Smith conceded that at the time of the arrest he "did not believe there was enough [evidence] to charge him". He said the decision whether to charge Mr Robinson depended on what Mr Robinson said in his interview. Constable Smith said he did not charge Mr Robinson after the interview as Mr Robinson had given an explanation during the interview which led Constable Smith to believe further evidence would be needed. Legislative framework At the time of Mr Robinson's arrest, Pt 8 of LEPRA set out the powers relating to arrest. Section 99, headed "[p]ower of police officers to arrest without warrant (cf Crimes Act 1900, s 352, Cth Act, s 3W)", was the first section in Pt 8 and it relevantly provided: "(1) A police officer may, without a warrant, arrest a person if: the police officer suspects on reasonable grounds that the person is committing or has committed an offence, and the police officer is satisfied that the arrest is reasonably necessary for any one or more of the following reasons: (iii) to stop the person committing or repeating the offence or committing another offence, to stop the person fleeing from a police officer or from the location of the offence, to enable inquiries to be made to establish the person's identity if it cannot be readily established or if the police officer suspects on reasonable grounds that identity information provided is false, to ensure that the person appears before a court in relation to the offence, to obtain property in the possession of the person that is connected with the offence, Bell to preserve evidence of the offence or prevent the fabrication of evidence, (vii) to prevent the harassment of, or interference with, any person who may give evidence in relation to the offence, (viii) to protect the safety or welfare of any person (including the person arrested), because of the nature and seriousness of the offence. (2) A police officer may also arrest a person without a warrant if directed to do so by another police officer. The other police officer is not to give such a direction unless the other officer may lawfully arrest the person without a warrant. (3) A police officer who arrests a person under this section must, as soon as is reasonably practicable, take the person before an authorised officer to be dealt with according to law. Note. The police officer may discontinue the arrest at any time and without taking the arrested person before an authorised officer – see section 105. (4) A person who has been lawfully arrested under this section may be detained by any police officer under Part 9 for the purpose of investigating whether the person committed the offence for which the person has been arrested and for any other purpose authorised by that Part. This section does not authorise a person to be arrested for an offence for which the person has already been tried. Section 105, to which reference was made in the note to s 99(3), was also in Pt 8. It provided: "(1) A police officer may discontinue an arrest at any time. (2) Without limiting subsection (1), a police officer may discontinue an arrest in any of the following circumstances: Bell if the arrested person is no longer a suspect or the reason for the arrest no longer exists for any other reason, if it is more appropriate to deal with the matter in some other manner, including, for example, by issuing a warning or caution or a penalty notice or court attendance notice or, in the case of a child, dealing with the matter under the Young Offenders Act 1997. (3) A police officer may discontinue an arrest despite any obligation under this Part to take the arrested person before an authorised officer to be dealt with according to law." Section 107, headed "[p]art does not affect alternatives to arrest", provided: "(1) Nothing in this Part affects the power of a police officer to commence proceedings for an offence against a person otherwise than by arresting the person. (2) Nothing in this Part affects the power of a police officer to issue a warning or a caution or a penalty notice to a person." Part 9, to which reference was made in s 99(4), was headed "[i]nvestigations and questioning". Section 111(1) provided that Pt 9 applied to a person who was "under arrest by a police officer for an offence". The objects of Pt 9 were set out in s 109 as follows: to provide for the period of time that a person who is under arrest may be detained by a police officer to enable the investigation of the person's involvement in the commission of an offence, and to authorise the detention of a person who is under arrest for such a period despite any requirement imposed by law to bring the person before a Magistrate or other authorised officer or court without delay or within a specified period, and to provide for the rights of a person so detained." Significantly, s 113(1) provided, relevantly, that Pt 9 did not: confer any power to arrest a person, or to detain a person who has not been lawfully arrested, or Bell prevent a police officer from asking or causing a person to do a particular thing that the police officer is authorised by law to ask or cause the person to do (for example, the power to require a person to submit to a breath analysis under Division 2 of Part 2 of Schedule 3 to the Road Transport Act 2013), or independently confer power procedure." (emphasis added) to carry out an investigative Division 2 of Pt 9 was headed "[i]nvestigation and questioning powers". It comprised ss 114 to 121. Section 114, entitled "[d]etention after arrest for purposes of investigation (cf Crimes Act 1900, s 356C)", provided: "(1) A police officer may in accordance with this section detain a person, who is under arrest, for the investigation period provided for by section 115. A police officer may so detain a person for the purpose of investigating whether the person committed the offence for which the person is arrested. If, while a person is so detained, the police officer forms a reasonable suspicion as to the person's involvement in the commission of any other offence, the police officer may also investigate the person's involvement in that other offence during the investigation period for the arrest. It is immaterial whether that other offence was committed before or after the commencement of this Part or within or outside the State. The person must be: released (whether unconditionally or on bail) within the investigation period, or brought before an authorised officer or court within that period, or, if it is not practicable to do so within that period, as soon as practicable after the end of that period. (5) A requirement in another Part of this Act, the Bail Act 1978 or any other relevant law that a person who is under arrest be taken before a Magistrate or other authorised officer or court, without delay, or within a specified period, is affected by this Part only to the extent that the extension of the period within which the person is to Bell be brought before such a Magistrate or officer or court is authorised by this Part. If a person is arrested more than once within any period of 48 hours, the investigation period for each arrest, other than the first, is reduced by so much of any earlier investigation period or periods as occurred within that 48 hour period. The investigation period for an arrest (the earlier arrest) is not to reduce the investigation period for a later arrest if the later arrest relates to an offence that the person is suspected of having committed after the person was released, or taken before a Magistrate or other authorised officer or court, in respect of the earlier arrest." (emphasis added) Section 115 provided that the "investigation period" was "a period that begins when the person is arrested and ends at a time that is reasonable having regard to all the circumstances, but does not exceed the maximum investigation period"; and that "[t]he maximum investigation period is 4 hours or such longer period as the maximum investigation period may be extended to by a detention warrant". Section 116(1) provided that, "[i]n determining what is a reasonable time for the purposes of section 115(1), all the relevant circumstances of the particular case must be taken into account". Section 116(2) provided that, without limiting the relevant circumstances that must be taken into account, the following circumstances (if relevant) were to be taken into account: the person's age, physical capacity and condition and mental capacity and condition, (b) whether the presence of the person is necessary for the investigation, the number, seriousness and complexity of the offences under investigation, (d) whether the person has indicated a willingness to make a statement or to answer any questions, the time taken for police officers connected with the investigation (other than police officers whose particular knowledge of the investigation, or whose particular skills, are necessary to the Bell investigation) to attend at the place where the person is being detained, whether a police officer reasonably requires time to prepare for any questioning of the person, the time required for facilities for conducting investigative procedures in which the person is to participate (other than facilities for complying with section 281 of the Criminal Procedure Act 1986[88]) to become available, the number and availability of other persons who need to be questioned or from whom statements need to be obtained, the need to visit the place where any offence concerned is believed to have been committed or any other place reasonably connected with the investigation of any such offence, the time during which the person is in the company of a police officer before and after the person is arrested, the time taken to complete any searches or other investigative procedures that are reasonably necessary to the investigation (including any search of the person or any other investigative procedure in which the person is to participate), the time required to carry out any other activity that is reasonably necessary for the proper conduct of the investigation." Section 4 of LEPRA, headed "[r]elationship to common law and other matters", provided: "(1) Unless this Act otherwise provides expressly or by implication, this Act does not limit: the functions, obligations and liabilities that a police officer has as a constable at common law, or 88 Section 281 of the Criminal Procedure Act 1986 (NSW) addresses the admissibility of admissions by suspects. It is not presently relevant. Bell the functions that a police officer may lawfully exercise, whether under an Act or any other law as an individual (otherwise than as a police officer) including, for example, powers for protecting property. (2) Without limiting subsection (1) and subject to section 9, nothing in this Act affects the powers conferred by the common law on police officers to deal with breaches of the peace." (emphasis added) Earlier decisions First instance The primary judge, Judge P Taylor SC, dismissed Mr Robinson's claim for damages for false imprisonment. His Honour noted that Mr Robinson "accepted that Constable Smith had suspected a breach of the AVO" and thus the commission of an offence. Further, his Honour held that Constable Smith had reasonable grounds for that suspicion given information from Ms Singh about the email sent by Mr Robinson. His Honour then turned to the requirement of s 99(1)(b) (that the police officer needs to be satisfied that the arrest is reasonably necessary for any one or more of the specified reasons), by considering three possible reasons for the arrest. First, s 99(1)(b)(i) required that "the police officer is satisfied that the arrest is reasonably necessary ... to stop the person committing or repeating the offence or committing another offence". His Honour found, on Constable Smith's evidence (including that he did not have any reason to suspect that another breach of the AVO by Mr Robinson may occur), that it was not established that Constable Smith was satisfied that an arrest was reasonably necessary to prevent repetition of the offence. Next, the primary judge considered s 99(1)(b)(iv), which required that "the police officer is satisfied that the arrest is reasonably necessary ... to ensure that the person appears before a court in relation to the offence". The primary judge found that s 99(1)(b)(iv) was satisfied because: "Constable Smith was informed that Mr Robinson would not agree to attend the police station as requested, had refused to provide his place of residence, had indicated that he was homeless and that he was no longer at his noted residence. These matters all support a belief in Constable Smith of a concern about whether the person, Mr Robinson, would attend court and whether arrest was necessary for that purpose. I accept that this belief Bell of Constable Smith was not displaced by the circumstance that Mr Robinson voluntarily attended the police station." Finally, the primary judge considered s 99(1)(b)(ix), which required that "the police officer is satisfied that the arrest is reasonably necessary ... because of the nature and seriousness of the offence". Quoting an earlier decision of the Court of Appeal of the Supreme Court of New South Wales in relation to Mr Robinson89, the primary judge found that the requirement was met as "breach of an AVO is a serious offence" and "social media harassment is not to be lightly dismissed", social media harassment evidently being considered similar to Mr Robinson's email in the circumstances. Accordingly, the arrest was held to be lawful, and the claim for wrongful imprisonment was dismissed. Court of Appeal The only appeal ground was that "the primary judge erred in finding that [Mr Robinson's] arrest and subsequent detention were lawful in circumstances where, at the time of the arrest, Constable Smith had not formed an intention to charge him with any offence". The Court of Appeal of the Supreme Court of New South Wales (McColl and Basten JJA and Emmett A-JA) allowed the appeal, by majority. Each member of the Court of Appeal gave separate reasons for judgment. The majority (McColl and Basten JJA) allowed the appeal on the basis that it was a requirement under s 99 that, at the time of the arrest, the arresting police officer must have formed a positive intention to charge the arrested person with an offence and, because Constable Smith "had not determined at the time of the arrest whether he would charge Mr Robinson", the arrest was unlawful. 89 New South Wales v Robinson (2016) 93 NSWLR 280 at 290 [69]. Bell Powers of arrest without warrant The starting point is the decision of Jordan CJ in Bales90 (with whom the rest of the Full Court of the Supreme Court of New South Wales agreed91), which has frequently been cited with approval92. The effect of the provision in issue, s 352 of the Crimes Act 1900 (NSW), was "merely to reinforce the common law principle" that a constable had to take an arrested person without delay, and by the most direct route, before a justice unless some circumstances reasonably those requirements93. The provision was relevantly as follows: justified a departure from "(1) Any constable or other person may without warrant apprehend, any person in the act of committing, or immediately after having committed, an offence punishable, whether by indictment, or on summary conviction, under any Act, any person who has committed a felony for which he has not been tried, and take him, and any property found upon him, before a Justice to be dealt with according to law. (2) Any constable may without warrant apprehend, any person whom he, with reasonable cause, suspects of having committed any such offence or crime, (1935) 35 SR (NSW) 182. (1935) 35 SR (NSW) 182 at 191 per Stephen J, 192 per Street J. 92 Ex parte Evers (1945) 62 WN (NSW) 146 at 147; Jeffries (1946) 47 SR (NSW) 284 at 287-288; Drymalik [1966] SASR 227 at 234; Banner [1970] VR 240 at 249; Williams (1986) 161 CLR 278 at 306. 93 Clarke v Bailey (1933) 33 SR (NSW) 303 at 309. Bell any person lying, or loitering, in any highway, yard, or other place during the night, whom he, with reasonable cause, suspects of being about to commit any felony, and take him, and any property found upon him, before a Justice to be dealt with according to law." In Bales, Jordan CJ explained the relevant principles in these terms94: "[S]uspicion that a person has committed a crime cannot justify an arrest except for a purpose which that suspicion justifies; and arrest and imprisonment cannot be justified merely for the purpose of asking questions. ... Where the imposition of physical restraint is authorised by law it may be imposed only for the purpose for which it is authorised. ... [I]t may be imposed by a police officer in the course of arresting and bringing before a magistrate a person for whose arrest no warrant has issued, but whom the officer, with reasonable cause, suspects of having committed a crime or an offence punishable whether by indictment or summarily under any Act. ... But the statute [Crimes Act 1900 (NSW), s 352], like the common law, authorises him only to take the person so arrested before a justice to be dealt with according to law, and to do so without unreasonable delay and by the most reasonably direct route: Clarke v Bailey95." (emphasis added) Jordan CJ went on to state96: "If a person has been arrested, and is in process of being brought before a magistrate questioning within limits is regarded as proper in New South Wales ... but a police officer has no more authority to restrain the liberty of a suspected person for the purpose, not of taking him before a magistrate, but of interrogating him, than he has of restraining the liberty of a person who may be supposed to be capable of supplying information as a witness." 94 Bales (1935) 35 SR (NSW) 182 at 188-189. (1933) 33 SR (NSW) 303. 96 Bales (1935) 35 SR (NSW) 182 at 190. Bell The single criterion set out by Jordan CJ was approved by this Court in Williams v The Queen97. There, "bringing [an arrested person] before a justice (or nowadays before some other person with power to deal with him) to be dealt with according to law" was described as the "true purpose" of arrest98. Police officers have, in New South Wales, a power to arrest and detain a person where they suspect on reasonable grounds that an offence has been committed or is being committed, and that the person has committed or is committing the offence99, and the arrest is reasonably necessary for any one or more of specified reasons100. But that power is exercisable only for the purpose of taking the person before a magistrate (or other authorised officer) to be dealt with according to law to answer a charge for that offence. Arrest cannot be justified where it is merely for the purpose of questioning101. As will be seen, nothing in LEPRA (in its original or amended form) has displaced the single criterion identified in Bales and confirmed in Williams. In Williams, Mason and Brennan JJ, as well as Wilson and Dawson JJ, acknowledged that the "jealousy with which the common law protect[ed] the personal liberty of the subject [did] nothing to assist the police in the investigation of criminal offences"102. Their Honours recognised that the duties of an arresting officer were by no means incompatible with efficient investigation but that "the balance between personal liberty and the exigencies of criminal investigation [had] been thought by some to be wrongly struck"103. But their Honours concluded that if the law was to be modified it was a task for the (1986) 161 CLR 278 at 283, 293-294, 306-307. See also McLachlan v Mesics (1966) 116 CLR 340; Foster v The Queen (1993) 67 ALJR 550 at 552; 113 ALR 1 98 Williams (1986) 161 CLR 278 at 305-306. 99 LEPRA, s 99(1)(a). See also Williams (1986) 161 CLR 278 at 303. 100 LEPRA, s 99(1)(b). 101 Williams (1986) 161 CLR 278 at 295-296, 298. 102 Williams (1986) 161 CLR 278 at 296; see also at 312. 103 Williams (1986) 161 CLR 278 at 296; see also at 311-313. Bell legislature, not the courts104. As Mason and Brennan JJ said, it was the legislature that was able to "prescribe some safeguards which might ameliorate the risk of unconscionable pressure being applied to persons under interrogation while they are being kept in custody"105. In 1990, the New South Wales Law Reform Commission published its report into police powers of detention and investigation after arrest and concluded that the common law imposed "artificial constraints" on police106. The report recommended replacing the common law regarding arrest without warrant with a comprehensive legislative regime "addressing the needs of the police for adequate power to conduct criminal investigations while offering proper and realisable safeguards for persons in police custody"107. The New South Wales Parliament responded with the enactment of the Crimes Amendment (Detention after Arrest) Act 1997 (NSW), which relevantly created a new Pt 10A of the Crimes Act 1900 (NSW) similar in form to what now appears in Pt 9 of LEPRA. The new Part was described in the Second Reading Speech as addressing the problem identified in Williams108: "by creating a regime whereby police are empowered to detain persons in custody after arrest for the completion of investigatory procedures, but only for strictly limited periods. A detailed system is set out whereby police and citizens will know precisely their rights and obligations. In short, the bill strikes a proper balance between allowing the police to make legitimate investigations of alleged offences on the one hand, 104 Williams (1986) 161 CLR 278 at 296; see also at 313. 105 Williams (1986) 161 CLR 278 at 296; see also at 313. 106 New South Wales Law Reform Commission, Criminal Procedure: Police Powers of Detention and Investigation after Arrest, Report No 66 (1990) at [1.48]. 107 New South Wales Law Reform Commission, Criminal Procedure: Police Powers of Detention and Investigation after Arrest, Report No 66 (1990) at [1.72]. 108 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 26 June Bell and, on the other hand, safeguarding the rights of ordinary citizens suspected of having committed those offences." Following the enactment of this amending legislation, s 356B(1) of the Crimes Act 1900 (NSW) provided that: "This Part does not: confer any power to arrest a person, or to detain a person who has not been lawfully arrested, or prevent a police officer from asking or causing a person to do a particular thing that the police officer is authorised by law to ask or cause the person to do (for example, the power to require a person to submit to a breath analysis under section 4E of the Traffic Act independently confer power procedure." (emphasis added) to carry out an investigative The purpose and extent of the amendments were clear. The single criterion for a lawful arrest had not changed. As was said in the Second Reading Speech109: "[T]his bill confers no new power of arrest. Police will not be able to arrest a person in any circumstance where the law does not otherwise already allow them to do so ... [and] the bill does not itself authorise any new investigative procedures or powers. Rather, it merely allows police, during the investigation period, to carry out investigative procedures that are otherwise authorised in relation to persons who are lawfully under arrest. ... [T]he period for which police may detain a person is 'a reasonable time'. However, pursuant to proposed section 356D(2), that reasonable time may not be more than four hours unless a detention warrant is granted." (emphasis added) Subsequently, (Powers and Responsibilities) Bill 2002 (NSW) was introduced to give effect to the recommendations of the Royal Commission into the New South Wales Police the Law Enforcement 109 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 26 June Bell Service110. The Bill substantially re-enacted the existing legislation but with some amendments intended to "more accurately reflect areas of the common law" and "to address areas in the existing law where gaps [had] been identified"111. Unless "expressly stated", the Bill was "not intended to change the common law"112. Part 8 of the Bill, headed arrest", contained cll 99-108. What became s 99 of LEPRA, headed "[p]ower of police officers to arrest without warrant (cf Crimes Act 1900, s 352, Cth Act, s 3W)", was in the following terms: "[p]owers relating "(1) A police officer may, without a warrant, arrest a person if: the person is in the act of committing an offence under any Act or statutory instrument, or the person has just committed any such offence, or the person has committed a serious indictable offence for which the person has not been tried. (2) A police officer may, without a warrant, arrest a person if the police officer suspects on reasonable grounds that the person has committed an offence under any Act or statutory instrument. (3) A police officer must not arrest a person for the purpose of taking proceedings for an offence against the person unless the police officer suspects on reasonable grounds that it is necessary to arrest the person to achieve one or more of the following purposes: to ensure the appearance of the person before a court in respect of the offence, 110 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 September 2002 at 4846. 111 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 September 2002 at 4846. 112 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 September 2002 at 4846. Bell to prevent a repetition or continuation of the offence or the commission of another offence, to prevent the concealment, loss or destruction of evidence relating to the offence, to prevent harassment of, or interference with, a person who may be required to give evidence in proceedings in respect of the offence, to prevent the fabrication of evidence in respect of the offence, to preserve the safety or welfare of the person. (4) A police officer who arrests a person under this section must, as soon as is reasonably practicable, take the person, and any property found on the person, before an authorised officer to be dealt with according to law." (emphasis added) In the Second Reading Speech, Pt 8 of the Bill was described in these terms113: "Part 8 of the bill substantially re-enacts arrest provisions of the Crimes Act 1900 and codifies the common law. The provisions of part 8 reflect that arrest is a measure that is to be exercised only when necessary. An arrest should only be used as a last resort as it is the strongest measure that may be taken to secure an accused person's attendance at court. Clause 99, for example, clarifies that a police officer should not make an arrest unless it achieves the specified purposes, such as preventing the continuance of the offence. Failure to comply with this clause would not, of itself, invalidate the charge. Clauses 107 and 108 make it clear that nothing in the part affects the power of a police officer to exercise the discretion to commence proceedings for an offence other than by arresting the person, for example, by way of caution or summons or another alternative to arrest. Arrest is a measure of last resort. The part 113 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 September 2002 at 4848-4849. Clauses 99, 107 and 108 of the Bill became ss 99, 107 and 108 of LEPRA, respectively. Bell clarifies that police have the power to discontinue arrest at any time." (emphasis added) A number of points need to be made. Section 99(1) and (2) substantially restated the power of arrest without warrant previously existing under s 352 of the Crimes Act 1900 (NSW). The single criterion for arrest was not changed. Section 99(3) was new. It had two distinct parts. First, it reinforced that the only permissible purpose of arrest was to take the arrested person before an authorised officer to be dealt with according to law pursuant to s 99(4). Second, it narrowed rather than expanded the circumstances in which the arrest powers in s 99(1) and (2) could be exercised by providing that a police officer would not be justified in exercising the discretion to arrest a person for the purpose of taking proceedings for an offence against the person unless the police officer suspected on reasonable grounds that it was necessary to arrest the person to achieve one or more of six identified purposes. Section 105 was also new and clarified that the police had the power to discontinue arrest at any time114. It expressly provided that a police officer could discontinue an arrest at any time, including if an arrested person was no longer a suspect or it was more appropriate to deal with the matter in some other manner. Section 99 was then amended by the Law Enforcement (Powers and Responsibilities) Amendment (Arrest without Warrant) Act 2013 (NSW). It has remained in this form and was the section that applied when Mr Robinson was The Second Reading Speech identified a number of important points about the amendments to s 99116: "The bill will clarify that police can arrest without a warrant for any offence they reasonably suspect a person is committing or has committed. 114 See New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 September 2002 at 4849. 115 See [72]-[80] above. 116 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 30 October 2013 at 25093-25094. Bell New section 99(1)(a) makes it abundantly clear that police can arrest without a warrant for any offence, whether in the act of being committed or having been committed in the past. Having formed a reasonable suspicion that an offence is being or has been committed, under new section 99(1)(b) a police officer can place a person under arrest if satisfied it is reasonably necessary to do so for one of the reasons set out in the section. New section 99(1)(b) replicates and simplifies the existing reasons for arrest contained in section 99(3) of the Act. It also introduces new reasons the circumstances in which police are called on to act in order to keep the community safe. to arrest without a warrant that better reflect Section 99 will also be amended to make clear to the arresting police officer that an arrest may be discontinued and the person released without requiring the suspect be brought before an authorised officer. This may occur when inquiries reveal the reasons for arrest no longer exist or if police decide it is more appropriate to deal with the matter in some other manner – for example, by issuing a caution, penalty notice or court attendance notice. Finally, section 99 will be amended to make clear that a person who is lawfully arrested under this section may be detained for the purpose of an investigation in accordance with part 9 of the Act. This amendment is intended to remove uncertainty about whether a person who is otherwise lawfully arrested can be detained for questioning under part 9." (emphasis added) The Explanatory Note relevantly explained that the117: "substituted section extends the reasons for arrest without warrant to include additional reasons in line with section 365 of the Police Powers and Responsibilities Act 2000 of Queensland. Those additional reasons include to stop the person fleeing, to make inquiries to establish the identity of the person, to obtain property in the possession of the person connected with the offence, to preserve the safety or welfare of any person or because of the nature and seriousness of the offence." 117 New South Wales, Law Enforcement (Powers and Responsibilities) Amendment (Arrest without Warrant) Bill 2013, Explanatory Note at 2. Bell However, significantly, the substituted section did not adopt the text of s 365 of the Police Powers and Responsibilities Act 2000 (Qld), which expressly provides that it is lawful for a police officer, without warrant, to arrest an adult the police officer reasonably suspects has committed or is committing an offence if it is reasonably necessary for one or more specified reasons and makes it lawful for a police officer, without warrant, to arrest a person the police officer reasonably suspects has committed or is committing an indictable offence, for questioning the person about the offence, or investigating the offence, under Ch 15 of that Act118. Construction of s 99 Section 99(1) stipulates conditions for arrest without a warrant, namely that "the police officer suspects on reasonable grounds that the person is committing or has committed an offence"119 and that "the police officer is satisfied that the arrest is reasonably necessary for any one or more" of specified reasons120. And a police officer who arrests a person under s 99 must, as soon as is reasonably practicable, take the person before an authorised officer to be dealt with according to law121. That is a requirement that takes effect immediately upon arrest. To comply with the requirement in s 99(3) immediately upon arrest, a police officer must at the time of arrest have an intention to take the person, as soon as is reasonably practicable, before an authorised officer to be dealt with according to law to answer a charge for that offence. If there is no intention to comply with the requirement in s 99(3), the arrest is unlawful. And a requirement for the police officer to have an intention to bring a person before an authorised officer means, as a matter of substance, a requirement to have an intention to charge that person. Thus, an arrest under s 99 can only be for the purpose, as soon as is reasonably practicable, of taking the arrested person before a magistrate (or other authorised officer) to be dealt with according to law to answer a charge for that offence. An arrest merely for the purpose of asking questions or making investigations in order to see whether it would be proper or prudent to charge the 118 Police Powers and Responsibilities Act 2000 (Qld), s 365(1) and (2). 119 LEPRA, s 99(1)(a). 120 LEPRA, s 99(1)(b). 121 LEPRA, s 99(3). Bell arrested person with the crime is an arrest for an improper purpose and is unlawful. Section 99(1)-(3), in its terms, does not alter that single criterion for a lawful arrest that has been the law in New South Wales since at least 1933122. The note to s 99(3), which states that, under s 105, a police officer may discontinue the arrest at any time and without taking the arrested person before an authorised officer, says nothing about the necessary mental state of the police officer at the time of the arrest. Instead, s 105 (and the note to s 99(3)) underscores the possibility that while there must be at the time of arrest an intention to bring the person who is arrested before an authorised officer to answer a charge for the offence, that intention may be negated (and instead the arrest discontinued) if the circumstances after arrest are not sufficient to justify a decision to charge. The intention required at the time of arrest is an intention to charge unless it emerges after the arrest that the circumstances do not justify such a decision. As s 105 provides, discontinuing the arrest may mean that the person is dealt with in some other manner pursuant to s 105(2)(b). This is reinforced by the terms of Pt 9, which concerns investigations and questioning. The Part applies to a person who is under lawful arrest by a police officer for an offence123. It expressly provides that it does not confer any power to arrest, or detain, a person who has not been lawfully arrested124. Put in different terms, absent a lawful arrest under s 99, Pt 9 has no operation. If there is a lawful arrest, a police officer may "detain" a person for the investigation period. Part 9 has operation only when there has been a lawful arrest and, then, subject to the protective procedures and provisions in Pt 9. Section 114(4) provides that the person must be released within the investigation period or brought before an authorised officer or court within that period, or, if it is not practicable to do so within that period, as soon as practicable after the end of that period. That protection is in addition to that provided for under s 99(3), which, subject to the investigation period, remains a duty of the police officer – that is, as soon as practicable, to take the person before an authorised officer to be dealt with according to law. 122 See [88]-[108] above. 123 LEPRA, s 111(1). 124 LEPRA, ss 113(1)(a), 114(1). Bell Part 9, specifically ss 114 and 115, provided at the relevant time for a police officer to detain a person who was under arrest for an investigation period of up to four hours125 (or such longer period as the maximum period may have been extended to by a detention warrant). However, the Second Reading Speech126 for the Crimes Amendment (Detention after Arrest) Bill 1997 (NSW)127 indicates that the original introduction of the investigation period (as Pt 10A of the Crimes Act 1900 (NSW)) was not intended to alter the conditions of arrest – indeed, it was said that "[p]olice will not be able to arrest a person in any circumstance where the law does not otherwise already allow them to do so"128. That investigation period is therefore not to be taken into account by a police officer at the time of the arrest. Taking it into account at the time of arrest may lead to consideration, subconsciously or consciously, of the possibility of questioning as a reason for the arrest, which is impermissible. Moreover, it may lead to an arrest being made in the knowledge that the relevant level of persuasion of guilt required for charging might be formed as a result of the investigation period. It may therefore in substance lower the threshold for arrest and dilute the required purpose of arrest, which is to take a person before an authorised officer to be dealt with in accordance with law to answer a charge for the offence. Thus, if "the police officer suspects on reasonable grounds that the person is committing or has committed an offence"129 and "the police officer is satisfied that the arrest is reasonably necessary for any one or more" of the specified reasons130, then the police officer who makes the arrest under s 99 must intend, 125 LEPRA, ss 114(1), 115(2). The maximum investigation period is now six hours (or such longer period as the maximum period may be extended to by a detention warrant): see Law Enforcement (Powers and Responsibilities) Amendment Act 2014 (NSW), Sch 1 [9]. 126 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 26 June 127 See [98] above. 128 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 26 June 129 LEPRA, s 99(1)(a). 130 LEPRA, s 99(1)(b). Bell as soon as is reasonably practicable, to take the person before an authorised officer to be dealt with according to law to answer a charge for that offence131. And they must have that intention without taking into account at the time of arrest the existence of the investigation period. Reasonable suspicion requires an arresting constable to have reasonable grounds for suspicion of guilt. This is less than reasonable and probable cause for prosecution132. The former is the necessary intention at the time of arrest. The latter is the necessary intention when making a decision to prefer a charge and then preferring it133. Contrary to the submissions of the State of New South Wales, the requirement of an intention to charge at the time of arrest does not import, to the time of arrest, a requirement to have the mental state required at the time of charging. All that it means is that there is an intention to meet the requirements for charging at the time of charging, which is to take place as soon as is practicable after the arrest, unless it emerges after the arrest that there is not sufficient basis to bring a charge. And in that circumstance, the arrest should be discontinued pursuant to s 105. Mr Robinson's arrest was unlawful On the evidence, Constable Smith had no intention, at the time of the arrest, of bringing Mr Robinson before an authorised officer to be dealt with according to law unless it emerged subsequent to the arrest that there was sufficient reason to charge him. Constable Smith did not have the power to arrest Mr Robinson, without warrant, under s 99 of LEPRA when, at the time of the arrest, Constable Smith had not formed the intention to charge Mr Robinson. The arrest was unlawful. Conclusion and orders For those reasons, the appeal should be dismissed with costs. 131 LEPRA, s 99(3). 132 A v New South Wales (2007) 230 CLR 500 at 525 [71]. 133 Williams (1986) 161 CLR 278 at 300.

HIGH COURT OF AUSTRALIA APPELLANT AND RESPONDENT [2014] HCA 19 16 May 2014 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of New South Wales Representation N C Hutley SC with J C Giles for the appellant (instructed by Henry Davis York Lawyers) H K Insall SC with D F C Thomas for the respondent (instructed by Hugh and Associates Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Estoppel – Equitable estoppel – Proprietary estoppel – Where promisor made representations to give property to promisee – Whether promisee acted to her detriment in reliance on promisor's representations – Whether onus of proof on promisee to prove reliance on promisor's representations. Equity – Relief – Whether relief measured by reference to value of representations. Words and phrases – "presumption of reliance". FRENCH CJ, KIEFEL, BELL AND KEANE JJ. In The Commonwealth v Verwayen1, Mason CJ described estoppel as "a label which covers a complex array of rules spanning various categories." His Honour went on to say of "titles such as promissory estoppel, proprietary estoppel and estoppel by acquiescence" that they are all "intended to serve the same fundamental purpose[2], namely 'protection against the detriment which would flow from a party's change of position if the assumption (or expectation) that led to it were deserted'3." In Giumelli v Giumelli4, it was said that the category of equitable estoppel that is usually traced back to the decisions in Dillwyn v Llewelyn5 and Ramsden v Dyson6 is now a "well recognised variety of estoppel as understood in equity", which affords relief "found in an assumption as to the future acquisition of ownership of property … induced by representations upon which there had been detrimental reliance by the plaintiff." The questions which arise in this appeal concern the sufficiency of proof of detrimental reliance required to give rise to a sound claim for relief based on that category of estoppel; and the appropriate measure of equitable compensation where an order for the transfer of the property in question to the plaintiff is not made for reasons of hardship to a third party. Background The factual background is not in dispute. The following summary is drawn from the reasons of the primary judge and the Court of Appeal. (1990) 170 CLR 394 at 409; [1990] HCA 39. 2 A common "fundamental purpose" does not support a single unifying doctrine of estoppel – the existence of which has been the subject of different views in this Court: Giumelli v Giumelli (1999) 196 CLR 101 at 112-113 [7]; [1999] HCA 10. 3 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 419 per Brennan J, see also at 404 per Mason CJ and Wilson J; [1988] HCA 7; Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 at 674-675; [1937] HCA 58. (1999) 196 CLR 101 at 112 [6]. (1862) 4 De GF & J 517 [45 ER 1285]. (1866) LR 1 HL 129. But see also Dann v Spurrier (1802) 7 Ves Jun 231 at 235-236 [32 ER 94 at 95-96] for an earlier adumbration of the doctrine. Bell Prior to the events which gave rise to the litigation between the parties, the appellant lived with his wife in the main homestead of a 32-hectare rural property known as Burra Station, located near Queanbeyan in New South Wales7. In 1996, the respondent married the brother of the appellant's wife. Later in that year, the respondent and her husband moved into Oaks Cottage, a building located approximately 100 metres away from the main homestead on Burra Station. There they began to raise their newborn child. The respondent and her husband paid rent to the appellant's wife, who managed the financial aspects of the tenancy arrangement8. Both the main homestead and Oaks Cottage were located on an unsubdivided lot of land described as the Homestead Block, which was owned by the appellant and his wife as joint tenants9. Towards the end of 1997, the appellant and respondent commenced a sexual relationship10. In January 1998, the appellant said to the respondent11: "I love you and can tell you love me too. I want you to have a home here with me. I am planning to subdivide Burra Station. As soon as this is done, I will make sure the Oaks [scil, Oaks Cottage] is put into your name ... Using my Indian family money to buy this place means I can make my own decisions as to what I do with it, and I want you to have it because I love you. You need a home of your own to raise [your child] in. I can provide it". The respondent's husband learned of the liaison between the respondent and the appellant, and in the middle of 1998 the respondent and her husband separated and later divorced12. 7 Van Dyke v Sidhu [2012] NSWSC 118 at [2], [17]; Van Dyke v Sidhu (2013) 301 ALR 769 at 772 [8]. 8 Van Dyke v Sidhu [2012] NSWSC 118 at [20]. 9 Van Dyke v Sidhu (2013) 301 ALR 769 at 772 [8]. 10 Van Dyke v Sidhu [2012] NSWSC 118 at [22]. 11 Van Dyke v Sidhu (2013) 301 ALR 769 at 773 [17]. 12 Van Dyke v Sidhu (2013) 301 ALR 769 at 772 [10]. Bell When the respondent told the appellant, who was himself a lawyer, that she needed to find a lawyer to assist her with her divorce and property settlement, the appellant said to her words to the effect, "you have the Oaks you do not need a settlement from him. You can do the divorce yourself, you don't need a lawyer."13 In the divorce proceedings she did not seek a property settlement. After the departure of the respondent's husband, she continued to live in Oaks Cottage with her young child14. In about September 1998, the respondent asked the appellant whether she should stop paying rent "now that the Oaks is my property". The appellant replied: "How about you continue to pay what you can as this will help keep things low key with [the appellant's wife]."15 While the respondent lived in Oaks Cottage, she paid rent to the appellant's wife at a rate which was lower than the market rate16. The respondent also carried out unpaid work in relation to the maintenance and renovation of Oaks Cottage and the improvement and maintenance of Burra Station, and an adjoining rural property owned by a company in which the appellant and his wife owned shares. The respondent was also actively involved in the work involved in the subdivision of Burra Station for which the appellant and his wife applied to the local council17. The respondent was employed part time elsewhere; she did not seek full-time employment during her stay at Burra Station. As a result, over a period of eight and a half years, she lost the opportunity to earn wages which she might have earned as a natural resource catchment officer or a ranger. These disadvantages were not quantified by evidence, but were substantial18. 13 Van Dyke v Sidhu [2012] NSWSC 118 at [31]. 14 Van Dyke v Sidhu [2012] NSWSC 118 at [27]. 15 Van Dyke v Sidhu [2012] NSWSC 118 at [34]. 16 Van Dyke v Sidhu [2012] NSWSC 118 at [34]-[35]. 17 Van Dyke v Sidhu [2012] NSWSC 118 at [36]. 18 Van Dyke v Sidhu (2013) 301 ALR 769 at 790 [103]-[104]. Bell In 2000, the appellant, in response to expressions of concern by the respondent as to the security of her position, gave her a signed note in which he confirmed that "[d]uring the years 1996 to 2000" he had "expressed to [the respondent] that [he] was willing to gift [her] the house in which she resided at the time (Oaks Cottage, … Burra NSW)"19. There were concurrent findings of fact by the primary judge and the Court of Appeal that the promises made by the appellant were, in substance, promises to give Oaks Cottage to the respondent once the Oaks Cottage site existed in subdivided form20. In mid-2005, the respondent again pressed the appellant for some confirmation of his "continued promise that the house would be [her] own"21. This pressure elicited an email which proposed terms for a transfer of the property "at a price based on valuation by agent[s]" but with the appellant and his wife agreeing to bear the financial burden of defraying that price 22. In October 2005, the local council gave conditional approval to a subdivision of the Homestead Block into three lots23. Completion of the subdivision was conditional upon the construction of roads enabling access to the lots. In a practical sense, the subdivision also depended on the consent of the appellant's wife and the availability of adequate finance. One of the proposed lots ("the Oaks Property") was 7.3-7.4 hectares in size24. It was identified by reference to the local council survey plan of Burra Station, and included the land on which Oaks Cottage then stood. 19 Van Dyke v Sidhu [2012] NSWSC 118 at [51]. 20 Van Dyke v Sidhu (2013) 301 ALR 769 at 780 [54]. 21 Van Dyke v Sidhu [2012] NSWSC 118 at [66]. 22 Van Dyke v Sidhu [2012] NSWSC 118 at [68]-[76]. 23 Van Dyke v Sidhu [2012] NSWSC 118 at [77]. 24 Van Dyke v Sidhu [2012] NSWSC 118 at [18]; Van Dyke v Sidhu (2013) 301 ALR Bell In February 2006, Oaks Cottage burnt down and the respondent and her child moved into a vacant relocatable cottage on the Homestead Block25. During May 2006, the respondent discussed the appellant and arrangements concerning the respondent's long-term accommodation at Burra Station. During the course of those discussions the appellant gave the respondent a handwritten statement dated 7 May 2006 in which he said that his wife "agrees [that] when the house which burned in an accident in mid-February is rebuilt and as soon as it is possible to transfer the property on which the house is rebuilt, it will be done"26. On or about 5 July 2006, the respondent offered to purchase the relocatable cottage from the appellant and his wife, but on 21 July 2006 the appellant and his wife rejected that offer, saying they could not sell it because they did not own it27. On that day, the respondent left Burra Station and the relationship between the respondent and the appellant came to an end28. The appellant and his wife refused to convey the Oaks Property to the respondent. Notwithstanding the conditional approval given by the council to the proposed subdivision, that subdivision, which was a necessary condition of the appellant's ability to transfer Oaks Cottage as a separate property to the respondent, did not proceed. Conditions of the approval as to the construction of roads were not satisfied by the appellant29. The proceedings Supreme Court of New South Wales The respondent commenced proceedings in the Equity Division of the Supreme Court of New South Wales. Her claim was that the appellant (who was 25 Van Dyke v Sidhu [2012] NSWSC 118 at [78]. 26 Van Dyke v Sidhu [2012] NSWSC 118 at [80]-[94]. 27 Van Dyke v Sidhu [2012] NSWSC 118 at [94]. 28 Van Dyke v Sidhu (2013) 301 ALR 769 at 772-773 [15]. 29 Van Dyke v Sidhu (2013) 301 ALR 769 at 773 [16]. Bell the sole defendant) made clear and unambiguous representations to her that he would transfer (or procure the transfer of) the Oaks Property to her, and that she acted in a number of ways in reliance on those representations to her detriment30. At trial, the respondent gave evidence, but neither the appellant nor his wife gave evidence. The primary judge (Ward J) found31 that the appellant made two promises to the respondent. The first promise, made in 1998, was to the effect that the appellant would transfer Oaks Cottage to the respondent by way of gift. The second promise, made in May 2006, was to the effect that the appellant would transfer the Oaks Property to the respondent by way of gift. Her Honour found32 that both promises were conditional on the subdivision of the Homestead Block, which was conditional on the construction of road access to the lots and required the consent of the appellant's wife and the availability of adequate finance. The primary judge found that it was not unreasonable for the respondent subjectively to have relied on the promises33, and inferred that the appellant knew or intended that the respondent would rely on his promises34. But her Honour held that the respondent had not established that she did, in fact, rely to her detriment on the appellant's promises, otherwise than in giving up the opportunity to seek a property settlement from her former husband after their divorce in 199935. The primary judge accepted that the work which the respondent carried out on Oaks Cottage and on Burra Station generally, and the giving up of opportunities for gainful employment, were activities "of a kind that may be 30 Van Dyke v Sidhu [2012] NSWSC 118 at [4]; Van Dyke v Sidhu (2013) 301 ALR 31 Van Dyke v Sidhu [2012] NSWSC 118 at [182]. 32 Van Dyke v Sidhu [2012] NSWSC 118 at [182]. 33 Van Dyke v Sidhu [2012] NSWSC 118 at [188]. 34 Van Dyke v Sidhu [2012] NSWSC 118 at [209]. 35 Van Dyke v Sidhu [2012] NSWSC 118 at [15]. Bell sufficient to amount to detrimental reliance for the purpose of an equitable estoppel."36 Her Honour concluded, however, that the respondent "may very well have done all or most of those things in any event."37 Her Honour's conclusion was based on answers given by the respondent in the course of cross-examination38. The primary judge regarded the respondent's answers, as to whether she would have remained at Burra Station and contributed to its maintenance had the appellant's promises not been made, as "equivocal in that [the respondent] could not discount the possibility that she would have remained on the property and (at least in most respects) done what she had done in any event."39 Her Honour held that40: "it [was] entirely possible that [the respondent] would have remained living on the property, carrying out tasks on the property (even if not to the extent of the work she in fact carried out) and working part-time, whether or not the promises had been made. That seems to me to make impossible a finding that she did those things (and refrained from seeking or taking up other opportunities that may have been available to her) acting in reliance on the promises to her detriment. No detriment can have been suffered if [the respondent] would or is likely to have done those things in any event." (emphasis in original) Given the importance of this evidence to the primary judge's conclusion, it is necessary to set that evidence out at some length. The respondent accepted that she had been very happy at Burra Station, that she loved the appellant, and that she believed that their relationship would last forever. The evidence41 went 36 Van Dyke v Sidhu [2012] NSWSC 118 at [217]. 37 Van Dyke v Sidhu [2012] NSWSC 118 at [217]. 38 Van Dyke v Sidhu [2012] NSWSC 118 at [197]-[199]. 39 Van Dyke v Sidhu [2012] NSWSC 118 at [202]. 40 Van Dyke v Sidhu [2012] NSWSC 118 at [204]. 41 Van Dyke v Sidhu [2012] NSWSC 118 at [197]-[198]. Bell Isn't this the case, you would have stayed living at The Oaks cottage for the 8 or 9 years that you lived there regardless of any promise that [the appellant] made to you, wouldn't you? Q. What does 'not necessarily' mean? A. Well, because I believed I was in a long-term relationship and that I would have a home transferred to me and I believed that the, that there was a continuation of that and if I had not been told certain things, those things by the [appellant], I may have been, I may have looked at other options for myself and my son. Q. You naturally suspected that for so long as [the appellant] lived on Burra Station that he would allow you to continue to live at The Oaks cottage, correct[?] A. Well, he had promised to transfer the property into my name and he told me it was my home, so yes. Q. Now, would you answer the question. You expected that for as long as he lived there, you would live there didn't you? I may have made other decisions if I did not have. Q. Regardless of the promise, because you were so in love with him you would have stayed living at The Oaks property whilst ever he loved [sic] on Burra Station for as long as you could, couldn't you? It is hard, it is hard to dissect that. Q. Because of those expectations [that their love and the relationship would last forever], you would have stayed living there regardless of the promises? Wouldn't you? Bell Q. What does not necessarily mean? I may have made other decisions too, if the [appellant] hadn't made representations to me that the Oaks property was my home, I may have thought about making decisions to develop some security for me and my son. Q. You might have? I might have[.] Q. But you might not have? It is hard to say." The respondent also accepted that she had begun doing work on the properties before the appellant's promises were made. In response to a question suggesting that she would probably have continued doing the work she did on Oaks Cottage and about Burra Station, without the appellant's promises, the respondent answered: I would have helped [keeping the property in tip top condition] but I think the work I did do after the representation was made to me was way above what I would have done if I were just a tenant on the property. That is not the other scenario, is it, you would have still been having an affair with [the appellant] and living on a property that you loved and that he loved, that is the other universe we have to think about, isn't it? I agree with what you are saying, that the relationship, it is very hard for me to dissect what I would have done had I not had the representation made to me, however I believe that I did the work that I did because I felt I had a future security in the home or I had security at the time but I also had future security that could have gone on for 20 plus years and so my work on the property was in that I was grateful for that security." We pause here to observe that this last passage from the respondent's evidence was distinctly to the effect that the extent of her involvement in maintaining Oaks Cottage and Burra Station was induced by the appellant's promise of a secure home. Bell The primary judge held42 that the respondent's decision not to seek a property settlement from her former husband was induced by the appellant's promises, but that it was not "objectively reasonable" for her to rely on a promise of a transfer of the Oaks Cottage given that the performance of the promise was "necessarily dependent on the ultimate subdivision of the land (and either the consent of [the appellant's wife] or circumstances arising where such consent was not necessary), when deciding not to seek a property settlement from her former husband." Court of Appeal The respondent appealed to the Court of Appeal of the Supreme Court of New South Wales. In her notice of appeal, the respondent contended, among other things, that the primary judge erred: in finding that it was "objectively unreasonable" for the respondent to rely on the representations made by the appellant; and in finding that the respondent's reliance on the appellant's representations was only in not seeking a property settlement from her husband on the basis of "equivocal answers ... in cross-examination." The Court of Appeal upheld the respondent's contention that the primary judge erred in holding that it was "objectively unreasonable" for the respondent to rely upon the appellant's representations43. In this Court, the appellant disavowed any challenge to the Court of Appeal's conclusion in that regard. As to the second of the respondent's contentions, the Court of Appeal upheld the respondent's challenge, but reasoned to its conclusion on a basis which was not advanced by the respondent or addressed by the appellant. In this regard, Barrett JA (Basten JA and Tobias AJA agreeing) relied upon a line of English decisions44 which suggest that in some circumstances the onus of proof in relation to the issue of detrimental reliance shifts from the plaintiff to the party said to be estopped. His Honour held45 that the primary judge erred in 42 Van Dyke v Sidhu [2012] NSWSC 118 at [220]. 43 Van Dyke v Sidhu (2013) 301 ALR 769 at 780-783 [57]-[69]. 44 Greasley v Cooke [1980] 1 WLR 1306 at 1311; [1980] 3 All ER 710 at 713; Grant v Edwards [1986] Ch 638 at 657; Wayling v Jones (1995) 69 P & CR 170 at 173. 45 Van Dyke v Sidhu (2013) 301 ALR 769 at 785 [77]-[78]. Bell approaching the issue of detrimental reliance in a way which denied the respondent the benefit of the "presumption of reliance". "Where inducement by the promise may be inferred from the claimant's conduct, as is the case here, the onus or burden of proof shifts to the defendant to establish that the claimant did not rely on the promise. It was therefore for the [appellant] to rebut that presumption and establish that the [respondent] did not rely at all on the promises in acting or refraining from acting to her detriment." Applying the "presumption of reliance" to the evidence in the present case, Barrett JA said that47: "the equivocal or inconclusive answers given by the [respondent] in cross- examination were an insufficient basis on which to regard the presumption of reliance as displaced." His Honour went on to hold48 that the maintenance and improvement work carried out by the respondent on Burra Station, and the loss of opportunities to obtain a property settlement and higher earnings in full-time employment, meant that the respondent's reliance upon the appellant's promises involved "material detriment". His Honour, having concluded that the respondent was entitled to equitable relief to preclude departure by the appellant from his promises to the respondent, declined to make an order that the appellant take all necessary steps to cause the Oaks Property to be transferred to her. His Honour took this course having regard to the adverse effect that such an order would have upon the interests of the appellant's wife as co-owner of the property49. 46 Van Dyke v Sidhu (2013) 301 ALR 769 at 786 [83]. 47 Van Dyke v Sidhu (2013) 301 ALR 769 at 790 [101]. 48 Van Dyke v Sidhu (2013) 301 ALR 769 at 790 [104]. 49 Van Dyke v Sidhu (2013) 301 ALR 769 at 795 [137]-[138]. Bell On that basis, Barrett JA said that50: "The [respondent's] equitable claim was a claim to prevent departure by the [appellant] from his promises and thus to have the benefit of all action necessary to bring about a transfer of the relevant property to the [respondent]. The [respondent] should therefore have a sum equal to the value she would now have had the promises been fulfilled." His Honour concluded that, although an award of equitable compensation measured by reference to the value of the respondent's disappointed expectation was the appropriate form of relief, the Court of Appeal was not in a position to assess that sum, given that the assessment should proceed by reference to the value of the property at the date of judgment51. Accordingly, the Court of Appeal allowed the appeal and ordered that the appellant in this Court pay the respondent by way of equitable compensation a sum to be determined in accordance with the decision of the Court of Appeal. The matter was remitted to the Equity Division of the Supreme Court for determination of the quantum of equitable compensation52. The appeal to this Court The appellant appealed to this Court pursuant to a grant of special leave made by French CJ and Bell J on 13 December 2013. Appellant's submissions The appellant made two broad submissions. The first was that the Court of Appeal reversed the onus of proof in relation to whether the respondent relied on the appellant's promises. The adoption and application of the "presumption of reliance" by the Court of Appeal was said to be contrary to the decision of this Court in Gould v Vaggelas53. 50 Van Dyke v Sidhu (2013) 301 ALR 769 at 795 [140]. 51 Van Dyke v Sidhu (2013) 301 ALR 769 at 795-796 [141]-[143]. 52 Van Dyke v Sidhu (2013) 301 ALR 769 at 797 [147]. 53 (1984) 157 CLR 215; [1984] HCA 68. Bell The appellant's second broad submission was that the Court of Appeal erred in ordering the payment of equitable compensation measured by reference to the value of the appellant's promises. The appellant argued that his assurances were conditional upon the subdivision of the property and the consent of his wife, and contended that the Court of Appeal should have limited the relief granted to the respondent to what was necessary to compensate the respondent for the loss she suffered by relying on his promises. Respondent's submissions The respondent submitted that the "presumption of reliance" applied by the Court of Appeal is consistent with the approach in Gould v Vaggelas, applied by the Victorian Court of Appeal in Flinn v Flinn54, in that both approaches have the same effect, namely, to give rise to an evidentiary onus to rebut an inference that arises where a promise is made and the natural tendency of the promise is to induce relevant conduct in the promisee. The respondent sought and was given leave to file a notice of contention whereby she sought to sustain the decision of the Court of Appeal on the footing that the appellant did not discharge the evidentiary onus which was upon him to rebut the inference of reliance which naturally arose from the respondent's conduct following the appellant's promises. The respondent submitted that the measure of relief granted by the Court of Appeal was correct in that a party setting up an equitable estoppel relating to an unperformed promise is prima facie entitled to enforcement of the promise unless there are special circumstances warranting different relief, and there were no such circumstances present here. Reliance: onus of proof and inference The respondent sought to neutralise the appellant's first submission by arguing that, in this case, the Court of Appeal did no more than apply what Brooking JA described in Flinn v Flinn55 as a "commonsense and rebuttable presumption of fact that may arise from the natural tendency of a promise". This argument must be rejected. The observations by Brooking JA in Flinn v Flinn do not support the proposition accepted by Barrett JA56 that "[w]here inducement by 54 [1999] 3 VR 712 at 749 [117]. 55 [1999] 3 VR 712 at 749 [117]. 56 Van Dyke v Sidhu (2013) 301 ALR 769 at 786 [83]. Bell the promise may be inferred from the claimant's conduct … the onus or burden of proof shifts to the defendant to establish that the claimant did not rely on the promise." In Newbon v City Mutual Life Assurance Society Ltd57, Rich, Dixon and Evatt JJ, speaking of a case where the party setting up the estoppel asserted a failure to take action in reliance upon an assumption allegedly induced by the conduct of the defendant, said: "Where inaction is the natural consequence of the assumption, the prima facie inference may be drawn in favour of the causal connection … Any general presumptive connection between inaction and a belief in a state of facts must depend upon probabilities which arise from the common course of affairs, and accordingly must be governed by circumstances." In Gould v Vaggelas58, Wilson J, with whom Gibbs and Dawson JJ agreed, speaking of an action in deceit, said: "If a material representation is made which is calculated to induce the representee to enter into a contract and that person in fact enters into the contract there arises a fair inference of fact that he was induced to do so by the representation." It is apparent that in the passage cited from the plurality judgment in Newbon v City Mutual Life Assurance Society Ltd, their Honours were speaking of a "presumptive connection" as the equivalent of the "fair inference" of which In Gould v Vaggelas59, Brennan J said: "An inference of inducement may be drawn when a party enters into a contract after a material representation has been made to him, but it is no more than an inference of fact and it is settled law that such an inference may be rebutted by the facts of the case". 57 (1935) 52 CLR 723 at 735; [1935] HCA 33. 58 (1984) 157 CLR 215 at 236. 59 (1984) 157 CLR 215 at 250. Bell Nothing in the judgments in Gould v Vaggelas suggests that the onus of proof in relation to detrimental reliance shifts to the defendant in any circumstances60. The line of English authority on which Barrett JA relied was founded on the statement by Lord Denning MR in Greasley v Cooke61 that "[t]here [was] no need for [the promisee] to prove that she acted to her detriment or to her prejudice." In the present case, this statement was treated as involving a shift in the burden of proof on the issue of detrimental reliance. Lord Denning's view is contrary to observations of high authority in Smith v Chadwick62 by Lord Blackburn, with whom the Earl of Selborne LC and Lord Watson agreed. Lord Blackburn spoke of the circumstances in which a fair inference of fact might be drawn in terms substantially repeated by Wilson J in the passage from Gould v Vaggelas set out above; but his Lordship expressly rejected the suggestion that a defendant might be obliged to disprove inducement once the making of a material representation had been proved. In point of principle, to speak of deploying a presumption of reliance in the context of equitable estoppel is to fail to recognise that it is the conduct of the representee induced by the representor which is the very foundation for equitable intervention. Reliance is a fact to be found; it is not to be imputed on the basis of evidence which falls short of proof of the fact. It is actual reliance by the promisee, and the state of affairs so created, which answers the concern that equitable estoppel not be allowed to outflank Jorden v Money63 by dispensing with the need for consideration if a promise is to be enforceable as a contract64. It is not the breach of promise, but the promisor's responsibility for the detrimental reliance by the promisee, which makes it unconscionable for the promisor to resile from his or her promise. In Giumelli v Giumelli65, Gleeson CJ, 60 See also Redgrave v Hurd (1881) 20 Ch D 1 at 21; Smith v Chadwick (1882) 20 Ch D 27 at 44; affd (1884) 9 App Cas 187 at 196; Arnison v Smith (1889) 41 Ch D 348 at 369; Holmes v Jones (1907) 4 CLR 1692 at 1707, 1711; [1907] HCA 35. 61 [1980] 1 WLR 1306 at 1311-1312; [1980] 3 All ER 710 at 713. 62 (1884) 9 App Cas 187 at 196. 63 (1854) 5 HLC 185 at 210, 212-213 [10 ER 868 at 880-881]. 64 The Commonwealth v Verwayen (1990) 170 CLR 394 at 410, 416. 65 (1999) 196 CLR 101 at 121 [35]. Bell McHugh, Gummow and Callinan JJ approved the statement of McPherson J in "It is not the existence of an unperformed promise that invites the intervention of equity but the conduct of the plaintiff in acting upon the expectation to which it gives rise." It may be that Lord Denning's view will no longer be understood in England in the way it seems to have been understood by the Court of Appeal in this case. In Steria Ltd v Hutchison67, Neuberger LJ said: "I very much doubt whether it could be right to hold that in every case where a representation is established, the onus must always be on the representor to show that it was not acted on. As a matter of normal principle it seems to me that, as a matter of law, the onus must be on the person alleging the estoppel to establish unconscionability or, to put it another way, to establish, in the case of estoppel by representation, the three essential ingredients of representation, reliance and detriment. In many cases, and I think that the Greasley case was one of them, it can fairly be said that, once it is established that the representation was made, the representation together with all the other facts of the case enables the claimant to say that, unless the defendant can elicit some further evidence to the contrary, the claimant will have discharged the onus. I am inclined to think that the Greasley case went no further than that." It may also be that the application of Lord Denning's view would not lead to an outcome in the present case different from that which follows from the application of the orthodox approach. Be that as it may, this aspect of the appellant's submission must be accepted. The approach suggested by Lord Denning should not be applied in Australia. The legal burden of proof borne by a plaintiff did not shift68. To speak of a shifting onus of proof is both wrong in principle and contrary to 66 [1985] 2 Qd R 292 at 301. 67 [2007] ICR 445 at 467 [129]-[130]. 68 Holmes v Jones (1907) 4 CLR 1692 at 1706, 1710; Gould v Vaggelas (1984) 157 CLR 215 at 238-239. Bell authority. The respondent at all times bore the legal burden of proving that she had been induced to rely upon the appellant's promises. The respondent's notice of contention The respondent's notice of contention raised the argument that the appellant did not discharge the evidentiary onus to displace the inference of reliance which fairly arose from the respondent's conduct in response to the appellant's promises. It may be said immediately that to speak of an evidentiary onus upon the appellant is to create a risk of distraction from the required analysis. To speak of the evidentiary onus in its strict legal connotation is to speak of the burden of adducing or pointing to sufficient evidence to raise an issue for determination by the court69. In the present case, there can be no doubt that the issue as to the respondent's reliance upon the appellant's promises was a live issue. The real question was as to the appropriate inference to be drawn from the whole of the evidence, including the answers elicited from the respondent in the course of cross-examination. In that regard, as was said by Gummow, Hayne, Heydon and Kiefel JJ in Campbell v Backoffice Investments Pty Ltd70, consideration of the application of the process of reasoning adumbrated by Wilson J in Gould v Vaggelas "must always attend closely to all of the evidence that is adduced that bears upon the question being examined." One should not be deflected by considerations of terminology from dealing with the substance of the argument raised by the respondent's notice of contention. It is sufficiently clear that the notion of evidentiary onus is not being used in its strict legal sense. Insofar as the notice of contention speaks of an evidentiary onus upon the appellant to rebut the inference which would otherwise be drawn, it reflects the language used in Gould v Vaggelas by Wilson J at different points in his reasons71. While Wilson J expressed himself in this way, he also made it clear that he gave no countenance to the notion that the onus might shift to the defendant to disprove detrimental reliance. The same view may fairly be taken of the notice of contention. 69 Purkess v Crittenden (1965) 114 CLR 164 at 167-168; [1965] HCA 34; Cross on Evidence, 9th Aust ed (2013) at 290 [7200]-[7205]. 70 (2009) 238 CLR 304 at 351 [143]; [2009] HCA 25. 71 (1984) 157 CLR 215 at 238-239. Bell It may, therefore, be accepted that the respondent's notice of contention sufficiently raises the question, to adapt the words of Wilson J in Gould v Vaggelas72, whether, when all the facts are in, the court is satisfied on the balance of probabilities that the promises in question contributed to the respondent's conduct in deciding to commit to her relationship with the appellant and adhering to that relationship (with all that that entailed) for eight and a half years. We now turn to a consideration of that question. Counsel for the appellant argued that the respondent's answers in the course of cross-examination as to what she would have done had the appellant's promises not been made to her were so equivocal that the primary judge was right to conclude that the respondent had not discharged the onus of proving that she would not have "remained on the property and … done what she had done in any event."73 That argument should be rejected. To reject that argument, it is not necessary to rely upon any shifting of the onus of proof. A review of the whole of the evidence shows that the respondent had made out a compelling case of detrimental reliance. There are four broad reasons why that is so. First, there is the evidence-in-chief of the respondent. It may be noted that the primary judge considered the respondent to be a truthful witness74. In the respondent's evidence-in-chief she had said that: "As a result of the [appellant's] repeated promise of the Oaks Property to me … I did not seek or engage in any full time paid work in the 8.5 years between January 1998 and July 2006 … [I]n the belief that I had a home in the Oaks Property, I chose instead to improve the Oaks and to repay the [appellant] in every way that I could using all the time and energy that I had for what I believed was his generous gift to me … I also lost the opportunity to obtain a property settlement from my divorce … [and] the opportunity to purchase a property for my son and me from money from my divorce settlement and salary from a full-time job." That evidence was likely, as a matter of the probabilities of human behaviour, to be true. Indeed, it would be remarkable if the appellant's promises did not have some influence upon the respondent's decision to stay on and work at Burra Station. Upon the breakdown of the respondent's marriage, she was 72 (1984) 157 CLR 215 at 238-239. 73 Van Dyke v Sidhu [2012] NSWSC 118 at [202]-[204]. 74 Van Dyke v Sidhu [2012] NSWSC 118 at [112], [114], [156]. Bell confronted with difficult decisions relating to the course of her life and the care and maintenance of her child. The appellant's promises were objectively likely to have had a significant effect upon the decision-making of a person in the respondent's position. The appellant's assurances were integral to his proposal to the respondent to put their relationship on a firm long-term footing. It is unlikely that she would have thrown in her lot with the appellant and exerted herself as she did over a period of eight and a half years if he had not made the promises which he in fact made. To the contrary, it is likely that she would have sought to maximise her own income for the benefit of herself and her infant son by seeking the most gainful form of employment. Secondly, the primary judge said75: "I have no doubt that [the respondent] placed faith in [the appellant] and in the promises he made her and that this played a part in her willingness to spend time and effort in the maintenance and improvement of The Oaks Cottage and assisted [sic] on the Burra Station property". Her Honour's finding that the appellant's promises "played a part in her willingness to spend time and effort in the maintenance and improvement of The Oaks Cottage and assisted on the Burra Station property" warranted the conclusion that the respondent had discharged the onus she bore on the basis that to establish estoppel by encouragement it is not necessary that the conduct of the party estopped should be the sole inducement operating on the mind of the party setting up the estoppel76. Counsel for the appellant disputed this proposition but did not cite any authority in support of their position. The respondent's position is amply supported by authority. In Amalgamated Investment & Property Co Ltd (in liq) v Texas Commerce International Bank Ltd77, Robert Goff J said that: "the question is not whether the representee acted, or desisted from acting, solely in reliance on the encouragement or representation of the other party; the question is rather whether his conduct was so influenced by the encouragement or representation … that it would be unconscionable for 75 Van Dyke v Sidhu [2012] NSWSC 118 at [203]. 76 Handley, Estoppel by Conduct and Election, (2006) at 170 [11-011]. 77 [1982] QB 84 at 104-105. See also Gillett v Holt [2001] Ch 210 at 226-227. Bell the representor thereafter to enforce his strict legal rights." (emphasis in original) Similarly, in Steria Ltd v Hutchison78, Neuberger LJ said that it is sufficient for the representee to show that "the representation was a significant factor which he took into account when deciding whether to [act as he did]." This approach conforms to that taken by the High Court as long ago as Newbon v City Mutual Life Assurance Society Ltd79, where it was said that the "supposed belief" of the representee as "a contributing cause" of the representee's conduct was a "sufficient connection between the assumption and the position of detriment". It is the view which continued to prevail in Gould v Vaggelas80. Thirdly, apart from the respondent's direct testimony in support of her case, the primary judge accepted81 that the respondent displayed a concern from time to time that the appellant honour his promises. While it is true that this concern was consistent with an understanding on the respondent's part that the appellant's promises were not contractually binding, the fact that the respondent exhibited that concern, and the fact that the appellant sought to allay that concern by giving her written assurances that the property would be transferred to her82, tend to confirm that the appellant's promises were material to the respondent's willingness to remain living at Oaks Cottage and working on Burra Station as part of maintaining her ongoing relationship with the appellant. Fourthly, the principal argument for the appellant, which was that the cross-examination of the respondent showed that the appellant's promises were not a real inducement which contributed to the respondent's decision to conduct herself as she did over a period of eight and a half years, is not compelling. Counsel for the appellant emphasised the finding of the primary judge that the their "contributions" of eight-and-a-half-year relationship seemed "to be broadly matched"83. But the the appellant and respondent the 78 [2007] ICR 445 at 465 [117]. 79 (1935) 52 CLR 723 at 735. 80 (1984) 157 CLR 215 at 236, 250-251. 81 Van Dyke v Sidhu [2012] NSWSC 118 at [191]. 82 Van Dyke v Sidhu (2013) 301 ALR 769 at 775 [26]. 83 Van Dyke v Sidhu [2012] NSWSC 118 at [260]. Bell question here is whether the respondent would have committed to, and remained in, the relationship with the appellant, with all that that entailed in terms of the effect upon the material well-being of herself and her son, had she not been given the assurances made by the appellant. In this regard, the answers elicited from the respondent in cross-examination did not accept the proposition that the appellant's promises were immaterial to her. And as has been noted, some of her answers were positively to the effect that the extent of her involvement in maintaining Oaks Cottage and Burra Station was induced by the appellant's assurances of security. That evidence was to the effect that the promises in question were a vital aspect of the security which the appellant plainly understood was of concern to her. This category of equitable estoppel serves to vindicate the expectations of the representee against a party who seeks unconscionably to resile from an expectation he or she has created84. The extent to which it is unconscionable of the appellant to seek to resile from the position expressed in his assurances to the respondent may be gauged by reflecting on the likely response of the respondent if the appellant had told her in January 1998: "I am happy for you to remain at Oaks Cottage, but only for so long as it suits me and my wife to have you here; and, while you remain on the property, you must care for it as if you were the owner of the property and do unpaid work on parts of Burra Station other than the property. Until I make the property over to you, you must pay rent sufficient to content my wife. Should you choose to leave, you will leave with nothing in return for the value of your work here." In summary, on all the evidence, it should be found that the respondent was induced to remain at the property and to continue to work for the appellant and his wife by the assurances which he made. It is unconscionable for the appellant now to resile from his assurances. The measure of relief In Waltons Stores (Interstate) Ltd v Maher, Brennan J said85: "The protection which equity extends is analogous to the protection given by estoppel in pais to which Dixon J referred in Grundt v Great Boulder, ie, protection against the detriment which would flow from a party's 84 Donis v Donis (2007) 19 VR 577 at 582-583 [18]-[20]. 85 (1988) 164 CLR 387 at 418-419. Bell change of position if the assumption (or expectation) that led to it were deserted." (footnote omitted) In Grundt v Great Boulder Pty Gold Mines Ltd86, Dixon J, speaking of estoppel in pais, said: "[I]t is often said simply that the party asserting the estoppel must have been induced to act to his detriment. Although substantially such a statement is correct and leads to no misunderstanding, it does not bring out clearly the basal purpose of the doctrine. That purpose is to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption upon which the former acted or abstained from acting. This means that the real detriment or harm from which the law seeks to give protection is that which would flow from the change of position if the assumption were deserted that led to it. So long as the assumption is adhered to, the party who altered his situation upon the faith of it cannot complain. His complaint is that when afterwards the other party makes a different state of affairs the basis of an assertion of right against him then, if it is allowed, his own original change of position will operate as a detriment. His action or inaction must be such that, if the assumption upon which he proceeded were shown to be wrong and an inconsistent state of affairs were accepted as the foundation of the rights and duties of himself and the opposite party, the consequence would be to make his original act or failure to act a source of prejudice." This statement of principle has been applied in the context of this category of equitable estoppel in Australia87. In England, in Gillett v Holt88, Robert Walker LJ also applied the statement by Dixon J to the resolution of the issue of detrimental reliance in a case of equitable estoppel. In Giumelli v Giumelli89, Gleeson CJ, McHugh, Gummow and Callinan JJ held that, because the fundamental purpose of equitable estoppel is to protect the 86 (1937) 59 CLR 641 at 674-675. 87 Donis v Donis (2007) 19 VR 577 at 593-594 [54]; Delaforce v Simpson-Cook (2010) 78 NSWLR 483 at 491 [42]. See also Cameron v Murdoch [1983] WAR 321 at 351-352; Sullivan v Sullivan (2006) 13 BPR 24,755. 88 [2001] Ch 210 at 232-233. 89 (1999) 196 CLR 101 at 112 [6], 123-125 [40]-[48]. Bell plaintiff from the detriment which would flow from the defendant's change of position if the defendant were to be permitted to resile from his or her promise, the relief granted may require the taking of active steps by the defendant including the performance of the promise and the performance of the expectation generated by the promise. That holding is supported by the leading decisions to which this category of equitable estoppel is usually traced90. The requirements of good conscience may mean that in some cases the value of the promise may not be the just measure of relief. In The Commonwealth v Verwayen91, Deane J noted that: "There could be circumstances in which the potential damage to an allegedly estopped party was disproportionately greater than any detriment which would be sustained by the other party to an extent that good conscience could not reasonably be seen as precluding a departure from the assumed state of affairs if adequate compensation were made or offered by the allegedly estopped party for any detriment sustained by the other party." If the respondent had been induced to make a relatively small, readily quantifiable monetary outlay on the faith of the appellant's assurances, then it might not be unconscionable for the appellant to resile from his promises to the respondent on condition that he reimburse her for her outlay. But this case is one to which the observations of Nettle JA in Donis v Donis92 are apposite: "[H]ere, the detriment suffered is of a kind and extent that involves life-changing decisions with irreversible consequences of a profoundly personal nature … beyond the measure of money and such that the equity raised by the promisor's conduct can only be accounted for by substantial fulfilment of the assumption upon which the respondent's actions were based." The appellant's argument, rightly, sought no support from the discussion in cases decided before Giumelli v Giumelli of the need to mould the remedy to 90 Dillwyn v Llewelyn (1862) 4 De GF & J 517 [45 ER 1285]; Ramsden v Dyson (1866) LR 1 HL 129; Riches v Hogben [1985] 2 Qd R 292; The Commonwealth v Verwayen (1990) 170 CLR 394. 91 (1990) 170 CLR 394 at 441. 92 (2007) 19 VR 577 at 588-589 [34]. Bell reflect the "minimum relief necessary to 'do justice' between the parties"93. There may be cases where "[i]t would be wholly inequitable and unjust to insist upon a disproportionate making good of the relevant assumption"94; but in the circumstances of the present case, as in Giumelli v Giumelli, justice between the parties will not be done by a remedy the value of which falls short of holding the appellant to his promises. While it is true to say that "the court, as a court of conscience, goes no further than is necessary to prevent unconscionable conduct"95, where the unconscionable conduct consists of resiling from a promise or assurance which has induced conduct to the other party's detriment, the relief which is necessary in this sense is usually that which reflects the value of the promise. In the circumstances of the present case, no reason has been identified by the appellant to conclude that good conscience does not require that the appellant be held to his promises. In particular, it is no answer for the appellant to say that the performance of his promises was conditional on the completion of the subdivision and the consent of his wife to the transfer to the respondent. His assurances to the respondent were expressed categorically so as to leave no room for doubt that he would ensure that the subdivision would proceed and that the consent of the appellant's wife would be forthcoming. Conclusion and order For the foregoing reasons, the decision of the Court of Appeal was correct. The appeal should be dismissed with costs. 93 The Commonwealth v Verwayen (1990) 170 CLR 394 at 416, see also at 429; Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 404-405, 419. 94 The Commonwealth v Verwayen (1990) 170 CLR 394 at 413. 95 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 419. I agree with the joint reasons and add one observation concerning the second of the four reasons for concluding that the respondent discharged her onus of proof. Paraphrasing Dixon J in Thompson v Palmer96, the respondent bore the onus of establishing that she believed the appellant's representations and that, on the faith of that belief, she took a course of action or inaction which would turn out to be to her detriment were the appellant to be permitted to depart from those representations. The respondent did not need to establish that the belief to which she was induced by the appellant's representations was the sole or predominant cause of the course of action or inaction she took but, in the language of Rich, Dixon and Evatt JJ in Newbon v City Mutual Life Assurance Society Ltd97, she did need to establish that the belief was a "contributing cause". To establish that the belief to which she was induced by the appellant's representations was a contributing cause to the course of action or inaction which she took, the respondent needed to establish more than that she had the belief and took the belief into account when she acted or refrained from acting. She needed to establish that having the belief and taking the belief into account made a difference to her taking the course of action or inaction: that she would not have so acted or refrained from acting if she did not have the belief. The need for the respondent to establish such a difference stems from what Dixon J described in Grundt v Great Boulder Pty Gold Mines Ltd98 as the "indispensable" condition that a party asserting an estoppel "must have so acted or abstained from acting upon the footing of the state of affairs assumed" that the party asserting the estoppel "would suffer a detriment if the opposite party were afterwards allowed to set up rights against him inconsistent with the assumption". That is to say, "the real detriment or harm from which the law seeks to give protection is that which would flow from the change of position if the assumption were deserted". There can be no real detriment if the party asserting the estoppel would have been in the same position in any event. The question of causation is therefore ordinarily appropriately framed, as it was implicitly framed by the primary judge in the present case, as being: "Despite any other contributing factors, would the party seeking to establish the estoppel have adopted a different course (of either action or refraining from 96 (1933) 49 CLR 507 at 547; [1933] HCA 61. 97 (1935) 52 CLR 723 at 735; [1935] HCA 33. 98 (1937) 59 CLR 641 at 674; [1937] HCA 58. action) to that which [the party] did had the relevant assumption not been induced?"99 The only authority of this Court potentially in conflict with that approach is Lynch v Stiff100. There is a statement in the joint reasons for judgment in that case to the effect that "it is sufficient if [a] party [asserting an estoppel] acts to his prejudice upon a representation made with the intention that it should be so acted upon, though it is not proved that in the absence of the representation he would not have so acted"101. That statement, however, does not address what is necessary to establish that a party "acts to his prejudice" in the first place. The statement was made in a context where the plaintiff was found to have acted to his prejudice on the basis that his evidence established that he had extended credit "because he believed" in the representation of the defendant102. that judge's finding the respondent's faith There is no inherent contradiction between the primary judge's conclusion that the respondent had not discharged her onus of proving that she would not have remained on the property and done what she had done in any event, and the primary the appellant's representations played a part in her willingness to spend time and effort in maintaining and improving Oaks Cottage and in working on Burra Station. There is no inherent contradiction because it was possible that the respondent would have remained and done what she had done even if she had not believed and The respondent acknowledged that possibility in her cross-examination. The joint reasons for judgment demonstrate, however, that the probability is otherwise. The inference to be drawn from the whole of the evidence is that, were it not for her belief in the appellant's representations, the respondent would not have remained on the property and done what she had done. the appellant's representations. taken account of 99 Spence, Protecting Reliance: The Emergent Doctrine of Equitable Estoppel, (1999) at 43. See also Spencer Bower, The Law Relating to Estoppel by Representation, 4th ed (2004) at 99-100. 100 (1943) 68 CLR 428; [1943] HCA 38. See Handley, Estoppel by Conduct and Election, (2006) at 83 [5-012]. 101 (1943) 68 CLR 428 at 435. 102 (1943) 68 CLR 428 at 435.

HIGH COURT OF AUSTRALIA THORNE AND APPELLANT RESPONDENT Thorne v Kennedy [2017] HCA 49 8 November 2017 ORDER Appeal allowed. Set aside the orders of the Full Court of the Family Court of Australia made on 26 September 2016 and, in their place, order that the appeal to that Court be dismissed with costs. The respondent pay the appellant's costs of the appeal to this Court. On appeal from the Family Court of Australia Representation M J Foley with P J Woods for the appellant (instructed by Somerville Laundry Lomax) R G Lethbridge SC with G C Eldershaw and D Birch for the respondent (instructed by Jones Mitchell Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Thorne v Kennedy Family law – Financial agreements – Family Law Act 1975 (Cth), Pt VIIIA – Pre-nuptial agreement – Post-nuptial agreement – Where fiancé wealthy – Where fiancée had no substantial assets – Where fiancée moved to Australia for purposes of marriage – Where fiancée had no community or connections in Australia – Where fiancée relied on fiancé for all things – Where pre-nuptial agreement provided to fiancée shortly before wedding – Where fiancé told fiancée that if she did not sign agreement wedding would not go ahead – Where independent solicitor advised fiancée against signing – Where pre-nuptial agreement signed – Where substantially identical post-nuptial agreement influence, or signed – Whether agreements voidable for duress, undue unconscionable conduct – Whether primary judge's reasons adequate. Words and phrases – "adequate reasons", "duress", "financial agreement", "illegitimate pressure", "independent legal advice", "maintenance order", "post- nuptial agreement", "pre-nuptial agreement", "property adjustment", "special disadvantage", "unconscionable conduct", "undue influence", "vitiating factor". Family Law Act 1975 (Cth), ss 90F, 90G, 90K, 90KA. two substantially KIEFEL CJ, BELL, GAGELER, KEANE AND EDELMAN JJ. This appeal concerns identical financial agreements, a pre-nuptial agreement and a post-nuptial agreement which replaced it, made under Pt VIIIA of the Family Law Act 1975 (Cth). The agreements were made between a wealthy property developer, Mr Kennedy, and his fiancée, Ms Thorne. The parties met online on a website for potential brides and they were soon engaged. In the words of the primary judge, Ms Thorne came to Australia leaving behind "her life and minimal possessions ... If the relationship ended, she would have nothing. No job, no visa, no home, no place, no community"1. The pre-nuptial agreement was signed, at the insistence of Mr Kennedy, very shortly before the wedding in circumstances in which Ms Thorne was given emphatic independent legal advice that the agreement was "entirely inappropriate" and that Ms Thorne should not sign it. One of the issues before the primary judge, Judge Demack, was whether the agreements were voidable for duress, undue influence, or unconscionable conduct. The primary judge found that Ms Thorne's circumstances led her to believe that she had no choice, and was powerless, to act in any way other than to sign the pre-nuptial agreement. Her Honour held that the post-nuptial agreement was signed while the same circumstances continued, with the exception of the time pressure. The agreements were both set aside for duress, although the primary judge used that label interchangeably with undue influence, which is a better characterisation of her findings. The Full Court of the Family Court of Australia (Strickland, Aldridge and Cronin JJ) allowed an appeal and dismissed a notice of contention by Ms Thorne, concluding that the agreements had not been vitiated by duress, undue influence, or unconscionable conduct. For the reasons which follow, the findings and conclusion of the primary judge should not have been disturbed. The agreements were voidable due to both undue influence and unconscionable conduct. The names, and some details, of the parties were suppressed during the course of this litigation. That approach was generally followed on this appeal, including the use of pseudonyms to describe the parties. Background The parties met over the internet in 2006. At the time, Ms Thorne, who was an Eastern European woman, was living in the Middle East. She was 1 Thorne & Kennedy [2015] FCCA 484 at [91]. Bell Edelman 36 years old. She had no substantial assets. She previously had been married and divorced and was subsequently in a four year de facto relationship which ended when her partner moved to Kuwait for work. Mr Kennedy was a 67 year old Greek Australian property developer. He had assets worth between $18 million and $24 million. He was divorced with three adult children. Ms Thorne's profile on the website on which they met described her as a single woman with no children, of the Greek Orthodox religion, who spoke a little English and Greek. She shared the same religion with Mr Kennedy and generally conversed with him in Greek. Mr Kennedy travelled overseas to meet Ms Thorne very shortly after meeting her online. He told her that if he liked her then he would marry her but that "you will have to sign paper. My money is for my children"2. During their courtship phase, Mr Kennedy travelled overseas twice to meet Ms Thorne. He took her on an extended holiday around Europe, during which he met her family. He bought her expensive jewellery. In February 2007, about seven months after Mr Kennedy and Ms Thorne met, they moved to Australia to live in Mr Kennedy's expensive penthouse with the intention of getting married. The wedding between Ms Thorne and Mr Kennedy was set for 30 September 2007. On 8 August 2007, Mr Kennedy had instructed a solicitor to prepare a pre-nuptial agreement. It is unclear whether Ms Thorne was, at this time, aware of the agreement but she was certainly not aware of its contents. Around 19 September 2007, Mr Kennedy told Ms Thorne that they were going to see solicitors about the signing of an agreement. Ms Thorne asked Mr Kennedy whether he required her to sign the agreement. He replied that if she did not sign it then the wedding would not go ahead. On 20 September 2007, Mr Kennedy took Ms Thorne and her sister to see an independent solicitor, Ms Harrison, who was an accredited family law specialist. Mr Kennedy waited in the car outside. It was during this appointment that Ms Thorne first became aware of the contents of the agreement. By this time, Ms Thorne's parents and sister had been flown to Australia from Eastern Europe and accommodated for the wedding by Mr Kennedy. Guests had been invited to the wedding. Ms Thorne's dress had been made. The wedding reception had been booked. 2 Thorne & Kennedy [2015] FCCA 484 at [33]. Bell Edelman The day after the meeting, Ms Harrison produced a written advice to Ms Thorne which she subsequently explained to Ms Thorne. There was no dispute that Ms Harrison's advice was accurate. Some of the key features of Ms Harrison's advice were as follows: The agreement provided for Ms Thorne to receive maintenance during the marriage of the greater of (i) $4,000 per month or (ii) 25% of the net income from the management rights of a proposed development. Ms Harrison observed that the $4,000 per month contained no provision for increase and was a very poor provision from someone in Mr Kennedy's circumstances. (2) Ms Thorne would be permitted to live rent free in a penthouse located in the proposed development and her family would be permitted to live rent free in a unit located in that development. Ms Harrison noted, however, that Ms Thorne had informed her that the local council had refused planning permission for the proposed development. If Ms Thorne and Mr Kennedy separated within the first three years of marriage, with or without children, then Ms Thorne would get nothing. The rights described above would also cease. If Ms Thorne and Mr Kennedy separated after three years, without children, Mr Kennedy would only have an obligation to pay a single lump sum of $50,000 to Ms Thorne. This payment was indexed to the Consumer Price Index if the separation occurred after 1 July 2011. Ms Harrison described this amount as "piteously small". If Mr Kennedy died while they were living together and while they had not separated then the agreement provided that Ms Thorne would be entitled to (i) a penthouse in the proposed development or, if that were not possible, a unit she chose in the same city not exceeding a market value of $1.5 million; (ii) 40% of the net income of the management rights of the proposed development or $5,000 per month, indexed annually, whichever was the greater; and (iii) the Mercedes Benz car that was presently in her possession or a replacement vehicle of the same or higher value. Bell Edelman Ms Harrison's advice concluded as follows: "I believe that you are under significant stress in the lead up to your wedding and that you have been put in a position where you must sign this Agreement regardless of its fairness so that your wedding can go ahead. I also understand from what you have told me that you are longing to have a child and you see your relationship with [Mr Kennedy] as the opportunity to fulfil what may well be a long held desire. I hold significant concerns that you are only signing this Agreement so that your wedding will not be called off. I urge you to reconsider your position as this Agreement is drawn to protect [Mr Kennedy's] interests solely and in no way considers your interests." On 21 September 2007, the same day that Ms Harrison had produced her written advice, the solicitors for Mr Kennedy wrote to Ms Harrison. The solicitors referred to amendments to the agreement that Ms Harrison had sought which had been incorporated. The solicitors then said that since the wedding was scheduled for 30 September it was Mr Kennedy's preference that the agreement be signed that day, ie on 21 September 2007. The amendments made to the agreement at Ms Harrison's suggestion were relatively minor amendments concerning the provision for Ms Thorne if Mr Kennedy died while they were married and co-habiting. The provision concerning Ms Thorne's entitlement to a penthouse initially provided for the penthouse to be in the proposed development or in the same city if the development did not proceed. The amendment added the words "or if for any other reason the penthouse cannot be transferred to [Ms Thorne]". The second amendment concerned the mechanics of Mr Kennedy's undertaking to execute a will containing provision for Ms Thorne. The amendment added the words "if necessary a testamentary trust" and it was also provided that Mr Kennedy "will ensure that any further testamentary dispositions are drawn to contain these provisions and [Mr Kennedy] shall not execute any further testamentary dispositions without these provisions". No issue was raised in this proceeding about the enforceability of this provision. On 24 September 2007, Ms Harrison explained her advice to Ms Thorne. Ms Thorne understood Ms Harrison's oral advice to be that the agreement was the worst agreement that Ms Harrison had ever seen. Ms Harrison's evidence was that the agreement was entirely inappropriate and that she told Ms Thorne that Ms Thorne should not sign it. Although Ms Thorne was advised by Ms Harrison about the effect of the agreement if Mr Kennedy chose to separate from her, Ms Thorne did not even turn her mind to the possibility that Bell Edelman Mr Kennedy would separate from her, or the consequences about which she was advised. Ms Thorne also believed that she would never leave Mr Kennedy. Her concerns were focused only upon her rights under the agreement if Mr Kennedy should predecease her. The first agreement was signed by Ms Thorne on 26 September 2007, four days before her wedding. The agreement contained a recital that within 30 days Mr Kennedy and Ms Thorne would sign another agreement in similar terms. The terms of the second agreement were substantially identical to the first. On 5 November 2007, Ms Thorne met with Ms Harrison to get advice on the second agreement. As Ms Harrison had done in relation to the first agreement, Ms Harrison again urged Ms Thorne not to sign the second agreement. During this meeting, Ms Thorne received a phone call from Mr Kennedy asking how much longer she was going to be. Ms Harrison gained the impression that Ms Thorne was being pressured to sign the document. Again, Ms Thorne ignored Ms Harrison's advice and signed the second agreement on the same day, 5 November 2007. On 16 June 2011, slightly less than four years after the marriage, Mr Kennedy signed a separation declaration. Mr Kennedy and Ms Thorne separated, without children, in August 2011. Ms Thorne commenced this proceeding in April 2012. She sought orders, including orders setting aside the two agreements, an adjustment of property order in the amount of $1.1 million, and a lump sum spousal maintenance order of $104,000. Mr Kennedy died in May 2014, during the trial. He was substituted as a party by the executors and trustees of his estate, who were two of his adult children. The statutory context In 1929, the House of Lords held that an agreement could not exclude the power of the courts, which had existed since 1857, to make financial adjustment between the parties following the breakdown of a marriage3. The agreement might be taken into account when the court quantifies the amount of maintenance but it would not be binding4. Section 87(1)(k) of the Matrimonial Causes Act 1959 (Cth) modified that principle by empowering a court to "sanction" pre- nuptial or post-nuptial agreements concerning property distribution or 3 Hyman v Hyman [1929] AC 601. 4 Hyman v Hyman [1929] AC 601 at 609 per Lord Hailsham LC. Bell Edelman maintenance5. That Act was repealed and replaced by the Family Law Act, which introduced a regime for registration of certain types of maintenance agreements and a regime for certain other maintenance agreements to be approved by the court. On 27 December 2000, the Family Law Act was amended to "encourage people to agree about the distribution of their matrimonial property and thus give them greater control over their own affairs, in the event of marital breakdown"6. The amendments to the Family Law Act introduced Pt VIIIA, which allows couples to make regulated financial agreements. These agreements include financial agreements before marriage and after marriage, commonly described as pre-nuptial and post-nuptial agreements. Part VIIIA of the Family Law Act imposes various requirements before a financial agreement will be binding and restrictions upon the content of those agreements. One restriction, in s 90G(1) (the effect of which has since been modified by the insertion of s 90G(1A)), is a requirement that the financial agreement contain a statement from each party that the party was provided with independent legal advice concerning the effect of the agreement on the party's rights and the advantages and disadvantages of making the agreement. Another restriction upon pre-nuptial and post-nuptial agreements is s 90F, which, by ss 90F(1) and 90F(1A), prohibits the agreement from excluding or limiting the power of a court to make an order in relation to the maintenance of a party if: "when the agreement came into effect, the circumstances of the party were such that, taking into account the terms and effect of the agreement, the party was unable to support himself or herself without an income tested pension, allowance or benefit." Despite Ms Thorne's extremely limited personal means, the agreements purported to provide for an "acknowledgement" that Ms Thorne was able to support herself without an income tested pension, allowance or benefit. It seems that this clause was an attempt to oust the operation of s 90F of the Family Law Act. However, no submissions were made about s 90F before the primary judge 5 Shaw v Shaw (1965) 113 CLR 545; [1965] HCA 39. 6 Australia, House of Representatives, Family Law Amendment Bill 2000, Further Revised Explanatory Memorandum at 6. Bell Edelman or before the Full Court. In this Court, it assumed significance only as a matter for contextual construction after it was drawn to the attention of the parties by the Court. The restriction upon the validity of financial agreements which is central to this appeal is contained in ss 90K and 90KA. Section 90K(1) provides that a court may make an order setting aside a financial agreement if the court is satisfied of matters including, in s 90K(1)(b), "the agreement is void, voidable or unenforceable" and, in s 90K(1)(e), "a party to the agreement engaged in conduct that was, in all the circumstances, unconscionable". Section 90KA then provides, in part, that the question whether a financial agreement is valid, enforceable or effective "is to be determined by the court according to the principles of law and equity that are applicable in determining the validity, enforceability and effect of contracts and purported contracts". The issues in this case The issues raised by the notice of appeal in this case concerned whether the Full Court erred in finding error in the primary judge's conclusion that the agreements should be set aside. The only issues were whether the agreements should be set aside because Ms Thorne was subject to any of the vitiating factors of duress, undue influence, or unconscionable conduct in her entry into each of the agreements and whether the reasons of the primary judge were adequate. At all stages in this litigation it was assumed that each of the vitiating factors applied according to the principles of common law and equity as described in s 90KA. There were no submissions made concerning how the statutory prohibition against unconscionable conduct in s 90K(1)(e) might differ, if at all, from the equitable doctrine concerning unconscionable conduct. Further, although, in written submissions in this Court, Ms Thorne initially appeared to submit that the statutory context of ss 90K and 90KA might somehow have affected these principles, in oral submissions in this Court, counsel for Ms Thorne accepted that the principles were not altered although the particular circumstances of the marital context would be taken into account. This latter point was, properly, common ground. Two other issues do not arise. First, although the issue of causation was raised in oral argument in this Court, there was no ground of appeal in this Court or in the Full Court which alleged that causation was absent because Ms Thorne would have entered into either agreement in any event. It is therefore Bell Edelman unnecessary to consider whether, as the oral submission assumed, but for any vitiating factor Ms Thorne would have entered into the agreements in any event7. It can be observed, however, that the failure to raise any ground of appeal alleging an absence of either causation or contribution is unlikely to have been an oversight. Where duress, undue influence, or unconscionable conduct is otherwise shown, an inference of the necessary causation or contribution is readily drawn if the particular transaction cannot reasonably be accounted for by "ordinary motives"8, as clearly appears from the circumstance that Ms Thorne understood the advice of her solicitor to be that the agreements were the worst that the solicitor had ever seen. Secondly, this case concerns only the presence of a vitiating factor between parties to an agreement. It is not concerned with the circumstances in which a person can take the benefit of a transaction procured by the duress, undue influence, or unconscionable conduct of a third party. Where the recipient is not a volunteer9, the duress, undue influence, or unconscionable conduct of a third party raises additional issues10. Duress, undue influence, and unconscionable conduct Duress The vitiating factor of duress focuses upon the effect of a particular type of pressure on the person seeking to set aside the transaction11. It does not 7 Bank of Credit and Commerce International SA v Aboody [1990] 1 QB 923 at 970- 971. Cf Barton v Armstrong [1976] AC 104 at 120 per Lord Cross of Chelsea; Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40 at 46 per McHugh JA, Samuels and Mahoney JJA agreeing. 8 Allcard v Skinner (1887) 36 Ch D 145 at 185 per Lindley LJ. 9 Bridgeman v Green (1757) Wilm 58 at 64-65 [97 ER 22 at 25]. 10 Bainbrigge v Browne (1881) 18 Ch D 188 at 198-199 per Fry J; Smith v William Charlick Ltd (1924) 34 CLR 38 at 56 per Isaacs J; [1924] HCA 13; Bank of New South Wales v Rogers (1941) 65 CLR 42 at 51-52 per Starke J, 60-61 per McTiernan J, 85 per Williams J; [1941] HCA 9. 11 Westpac Banking Corporation v Cockerill (1998) 152 ALR 267 at 289 per Kiefel J, Bell Edelman require that the person's will be overborne12. Nor does it require that the pressure be such as to deprive the person of any free agency or ability to decide. The person subjected to duress is usually able to assess alternatives and to make a choice. The person submits to the demand knowing "only too well" what he or she is doing13. As Holmes J said in Union Pacific Railroad Co v Public Service Commission of Missouri14: "It always is for the interest of a party under duress to choose the lesser of two evils. But the fact that a choice was made according to interest does not exclude duress. It is the characteristic of duress properly so called." Historically, the primary constraint upon an action based on duress was the threats that were recognised as sufficient for an action. The early common law rule was that the duress which was necessary to set aside an agreement required an unlawful threat or conduct in relation to the person's body, such as loss of life or limb15. Even duress in relation to a person's goods was not a basis upon which an agreement could be avoided at common law16, although it was a basis for restitution of a payment of money17. The abandonment of this common law restriction18 introduced a difficult question. This question is whether duress should be based on any unlawful threat or conduct or, alternatively, whether 12 Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40 at 45 per McHugh JA, Samuels and Mahoney JJA agreeing; Director of Public Prosecutions for Northern Ireland v Lynch [1975] AC 653 at 695. 13 Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40 at 45-46 per McHugh JA, Samuels and Mahoney JJA agreeing. 14 248 US 67 at 70 (1918). 15 Sumner v Ferryman (1708) 11 Mod 201 [88 ER 989]; Skeate v Beale (1841) 11 Ad & E 983 [113 ER 688]; Blackstone, Commentaries on the Laws of England, (1765), bk 1, c 1 at 126-127. 16 Skeate v Beale (1841) 11 Ad & E 983 [113 ER 688]. 17 Astley v Reynolds (1731) 2 Str 915 [93 ER 939]. 18 Occidental Worldwide Investment Corp v Skibs A/S Avanti (The Siboen and The Sibotre) [1976] 1 Lloyd's Rep 293. Bell Edelman other illegitimate or improper, yet lawful, threats or conduct might suffice19. In 1947, Dawson described that question as one "which has chiefly arrested the modern development of the law of duress"20. A significant focus of the submissions by Mr Kennedy's executors was that a conclusion of duress was not open to the primary judge because any pressure exerted by Mr Kennedy upon Ms Thorne did not involve any unlawful threat or conduct. Senior counsel relied upon a decision of the New South Wales Court of Appeal which held, consistently with the older common law cases, that duress at common law requires proof of threatened or actual unlawful conduct21. He submitted that Ms Thorne had not set out any "justifiable formulation" by which lawful act duress could apply. It was not necessary for the primary judge to consider common law duress. As will be explained later in these reasons, the sense in which the primary judge in this case described the pressure on Ms Thorne was to focus on Ms Thorne's lack of free choice (in the sense used in undue influence cases) rather than whether Mr Kennedy was the source of all the relevant pressure, or whether the impropriety or illegitimacy of Mr Kennedy's lawful actions might suffice to constitute duress. Nor did this Court receive any substantial submissions concerning when illegitimacy or impropriety might be established for duress at common law including in light of the statutory policy of the Family Law Act and, in that context, how the actions of Mr Kennedy should be characterised. In these circumstances, it is not necessary to address the arguments in favour of or against the conclusion of the New South Wales Court of Appeal that duress at common law requires proof of threatened or actual unlawful conduct22. Nor is it necessary to consider whether the recognition of 19 Beatson, "Duress by Threatened Breach of Contract", (1976) 92 Law Quarterly Review 496 at 497-498. 20 Dawson, "Economic Duress – An Essay in Perspective", (1947) 45 Michigan Law Review 253 at 287. 21 Australia & New Zealand Banking Group v Karam (2005) 64 NSWLR 149 at 168 22 Australia & New Zealand Banking Group v Karam (2005) 64 NSWLR 149 at 168 Bell Edelman lawful act duress adds anything to the doctrine concerned with unconscionable conduct23. Undue influence In Allcard v Skinner24, Lindley LJ said that "no Court has ever attempted to define undue influence". One reason for the difficulty of defining undue influence is that the label "undue influence" has been used to mean different things25. It has been used to include abuse of confidence26, misrepresentation27, and the pressure which amounts to common law duress28. Each of those concepts is better seen as distinct. Nevertheless, the boundaries, particularly between undue influence and duress, are blurred29. One reason why there is no clear distinction is that undue influence can arise from widely different sources30, one of which is excessive pressure. Importantly, however, since pressure is only one of the many sources for the influence that one person can have over another, it is 23 Compare Bigwood, "Throwing the Baby Out with the Bathwater? Four Questions on the Demise of Lawful-Act Duress in New South Wales", (2008) 27(2) University of Queensland Law Journal 41. 24 (1887) 36 Ch D 145 at 183. 25 Swadling, "Undue Influence: Lessons from America?", in Mitchell and Swadling (eds), The Restatement Third: Restitution and Unjust Enrichment: Critical and Comparative Essays, (2013) 111 at 113. 26 Yerkey v Jones (1939) 63 CLR 649 at 675; [1939] HCA 3. 27 Royal Bank of Scotland plc v Etridge (No 2) [2002] 2 AC 773 at 820 [103] per Lord Hobhouse of Woodborough. 28 Royal Bank of Scotland plc v Etridge (No 2) [2002] 2 AC 773 at 820 [103] per Lord Hobhouse of Woodborough. 29 Westpac Banking Corporation v Cockerill (1998) 152 ALR 267 at 290 per Kiefel J, 30 Royal Bank of Scotland plc v Etridge (No 2) [2002] 2 AC 773 at 795 [7] per Lord Nicholls of Birkenhead. Bell Edelman not necessary that the pressure which contributes to a conclusion of undue influence be characterised as illegitimate or improper31. In 1836, in a passage which was copied verbatim by Snell thirty years later32, Story said that a person can be subjected to undue influence where the effect of factors such as pressure is that the person "has no free will, but stands in vinculis [in chains]"33. He explained that "the constant rule in Equity is, that, where a party is not a free agent, and is not equal to protecting himself, the Court will protect him"34. In 1866, this approach was applied in equity by the House of Lords, recognising undue influence in a case of pressure that deprived the plaintiff of "free agency"35. In 1868, in probate, Sir James Wilde also described undue influence as arising where a person is not a "free agent"36. In Johnson v Buttress37, Dixon J described how undue influence could arise from the "deliberate contrivance" of another (which naturally includes pressure) giving rise to such influence over the mind of the other that the act of the other is not a "free act". And, in Bank of New South Wales v Rogers38, McTiernan J 31 American Law Institute, Restatement of the Law Third, Restitution and Unjust Enrichment, (2011), §15, comment a; Burrows, A Restatement of the English Law of Contract, (2016) at 201-202, discussing Langton v Langton [1995] 2 FLR 890, Killick v Pountney [2000] WTLR 41, and Daniel v Drew [2005] EWCA Civ 507. 32 Snell, The Principles of Equity, Intended for the use of Students and the Profession, 33 Story, Commentaries on Equity Jurisprudence, as Administered in England and America, (1836), vol 1 at 243. 34 Story, Commentaries on Equity Jurisprudence, as Administered in England and America, (1836), vol 1 at 243. 35 Williams v Bayley (1866) LR 1 HL 200 at 215-216 per Lord Chelmsford. 36 Hall v Hall (1868) LR 1 P & D 481 at 482. 37 (1936) 56 CLR 113 at 134; [1936] HCA 41. 38 (1941) 65 CLR 42 at 61, citing Bainbrigge v Browne (1881) 18 Ch D 188 at 196, 197 per Fry J and Yerkey v Jones (1939) 63 CLR 649 at 677. Bell Edelman characterised the absence of undue influence as a "free and well-understood act" and Williams J referred to "the free exercise of the respondent's will"39. The question whether a person's act is "free" requires consideration of the extent to which the person was constrained in assessing alternatives and deciding between them. Pressure can deprive a person of free choice in this sense where it causes the person substantially to subordinate his or her will to that of the other party40. It is not necessary for a conclusion that a person's free will has been substantially subordinated to find that the party seeking relief was reduced entirely to an automaton or that the person became a "mere channel through which the will of the defendant operated"41. Questions of degree are involved. But, at the very least, the judgmental capacity of the party seeking relief must be "markedly sub-standard"42 as a result of the effect upon the person's mind of the will of another. An example which illustrates the characterisation by a court of a lack of free will sufficient to amount to undue influence is the decision of this Court in Johnson v Buttress43. In that case, Mr Buttress was a 67 year old man, who was "wholly illiterate, not very intelligent, and of little or no experience or capacity in business"44. He made a voluntary transfer of land to a relative of his wife. The land was his only property and his only means of livelihood. When he made the transfer he did not understand that he had parted with the land irrevocably. After Mr Buttress died, the administrator of his estate brought an application to set aside the transfer. The trial judge set aside the transfer on the basis of undue influence. This decision was upheld in this Court. Although other members of the Court relied upon a presumption of undue influence, which is considered 39 Bank of New South Wales v Rogers (1941) 65 CLR 42 at 85. 40 American Law Institute, Restatement of the Law Third, Restitution and Unjust Enrichment, (2011), §15. 41 Tufton v Sperni [1952] 2 TLR 516 at 530 per Jenkins LJ. See also Bank of Credit and Commerce International SA v Aboody [1990] 1 QB 923 at 969. 42 Birks and Chin, "On the Nature of Undue Influence", in Beatson and Friedmann (eds), Good Faith and Fault in Contract Law, (1995) 57 at 67. 43 (1936) 56 CLR 113. 44 Johnson v Buttress (1936) 56 CLR 113 at 124. Bell Edelman below, one member of the Court, Starke J, concluded that it was open to the trial judge to find that undue influence arose without any presumption. His Honour upheld the conclusion of the trial judge that the circumstances of the transfer invited the inference that it was "not the result of the free and deliberate judgment of the deceased"45. There are different ways to prove the existence of undue influence. One method of proof is by direct evidence of the circumstances of the particular transaction. That was the approach relied upon by the primary judge in this case. Another way in which undue influence can be proved is by presumption. This presumption was relied upon by Ms Thorne in this Court as an alternative. A presumption, in the sense used here, arises where common experience is that the existence of one fact means that another fact also exists46. Common experience gives rise to a presumption that a transaction was not the exercise of a person's free will if (i) the person is proved to be in a particular relationship, and (ii) the transaction is one, commonly involving a "substantial benefit"47 to another, which cannot be explained by "ordinary motives"48, or "is not readily explicable by the relationship of the parties"49. Although the classes are not closed, in Johnson v Buttress50 Latham CJ described the relationships that could give rise to the presumption as including parent and child, guardian and ward, trustee and beneficiary, solicitor and client, physician and patient, and cases of religious influence. Outside recognised categories, the presumption can also be raised by proof that the history of the particular relationship involved one party occupying a similar position of ascendency or influence, and the other a corresponding position of dependency or trust51. In either case, the presumption is rebuttable by 45 Johnson v Buttress (1936) 56 CLR 113 at 126. 46 Calverley v Green (1984) 155 CLR 242 at 264 per Murphy J; [1984] HCA 81. 47 Johnson v Buttress (1936) 56 CLR 113 at 134 per Dixon J. 48 Allcard v Skinner (1887) 36 Ch D 145 at 185 per Lindley LJ. 49 Royal Bank of Scotland plc v Etridge (No 2) [2002] 2 AC 773 at 798 [21] per Lord Nicholls of Birkenhead. 50 (1936) 56 CLR 113 at 119. See also Bank of New South Wales v Rogers (1941) 65 CLR 42 at 51 per Starke J. 51 Johnson v Buttress (1936) 56 CLR 113 at 134-135 per Dixon J. Bell Edelman the other party proving that the particular transaction or transfer, in its particular circumstances, was nevertheless the result of the weaker party's free will52. Ms Thorne submitted that she was entitled to the benefit of a presumption of undue influence because the relationship of fiancé and fiancée should be recognised as one to which the presumption attaches. This submission was concerned with a presumption of undue influence (that a transaction was the result of a lack of free will) and not with the different doctrine concerning the possibility of an abuse of confidence in any relationship of intimacy53. The submission should not be accepted. Although the relationship of fiancé and fiancée was first seen as falling within the recognised categories by Lord Langdale MR in 184854, and although it was also recognised in this Court by Dixon J in 193655 and 193956, in 1961 in England Lord Evershed MR refused to apply the established presumption, saying that "this is 1961 and what might have been said of the position, independence, and the like, of women in 1848 would have to be seriously qualified to-day"57. In 1992 in Louth v Diprose58 Brennan J observed that it "may no longer be right to presume that a substantial gift made by a woman to her fiancé has been procured by undue influence". Common experience today of the wide variety of circumstances in which two people can become engaged to marry negates any conclusion that a relationship of fiancé and fiancée should give rise to a presumption that either person substantially subordinates his or her free will to the other. 52 Spong v Spong (1914) 18 CLR 544 at 549 per Griffith CJ; [1914] HCA 52; Johnson v Buttress (1936) 56 CLR 113 at 123 per Latham CJ. 53 Garcia v National Australia Bank Ltd (1998) 194 CLR 395; [1998] HCA 48. 54 Page v Horne (1848) 11 Beav 227 at 235 [50 ER 804 at 807]. 55 Johnson v Buttress (1936) 56 CLR 113 at 134. 56 Yerkey v Jones (1939) 63 CLR 649 at 675. 57 Zamet v Hyman [1961] 1 WLR 1442 at 1446; [1961] 3 All ER 933 at 937-938. 58 (1992) 175 CLR 621 at 630; [1992] HCA 61. Bell Edelman Unconscionable conduct There was no controversy on this appeal concerning the principles of unconscionable conduct in equity. Those principles were recently restated by this Court in Kakavas v Crown Melbourne Ltd59. A conclusion of unconscionable conduct requires the innocent party to be subject to a special disadvantage "which seriously affects the ability of the innocent party to make a judgment as to [the innocent party's] own best interests"60. The other party must also unconscientiously take advantage of that special disadvantage61. This has been variously described as requiring "victimisation"62, "unconscientious conduct"63, or "exploitation"64. Before there can be a finding of unconscientious taking of advantage, it is also generally necessary that the other party knew or ought to have known of the existence and effect of the special disadvantage65. 59 (2013) 250 CLR 392; [2013] HCA 25. 60 Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 462 per Mason J; [1983] HCA 14. 61 Cory v Cory (1747) 1 Ves Sen 19 [27 ER 864]; Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 462; Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392 at 398 [6]. 62 Hart v O'Connor [1985] AC 1000 at 1028; Louth v Diprose (1992) 175 CLR 621 at 638; Bridgewater v Leahy (1998) 194 CLR 457 at 479 [76]; [1998] HCA 66; Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392 at 401 [18], 402 [22], 403 63 Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 461 per Mason J, 474 per Deane J; Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (2003) 214 CLR 51 at 64 [15]; [2003] HCA 18. 64 Louth v Diprose (1992) 175 CLR 621 at 626; Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (2003) 214 CLR 51 at 63 [9], 64 [14]; Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392 at 439-440 65 Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 462 per Bell Edelman In Commercial Bank of Australia Ltd v Amadio66, Deane J said that the equitable principles concerning relief against unconscionable conduct are closely related to those concerned with undue influence. The same circumstances can result in the conclusion that the person seeking relief (i) has been subject to undue influence, and (ii) is in a position of special disadvantage for the purposes of the doctrine concerned with unconscionable conduct. For instance, in Diprose v Louth (No 1)67, the trial judge, King CJ, observed that both doctrines were satisfied where the defendant "was in a position of emotional dominance which gave her an influence over the [plaintiff] which she exercised unconscientiously to procure the gift of the house". Before the High Court in that case, Mr Diprose relied only upon the ground of unconscionable conduct. Although undue influence and unconscionable conduct will overlap, they have distinct spheres of operation. One difference is that although one way in which the element of special disadvantage for a finding of unconscionable conduct can be established is by a finding of undue influence, there are many other circumstances that can amount to a special disadvantage which would not establish undue influence. A further difference between the doctrines is that although undue influence cases will often arise from the assertion of pressure by the other party which might amount to victimisation or exploitation, this is not always required. In Commercial Bank of Australia Ltd v Amadio68, Mason J emphasised the difference between unconscionable conduct and undue influence as follows: "In the latter the will of the innocent party is not independent and voluntary because it is overborne. In the former the will of the innocent party, even the disadvantageous position in which he is placed and of the other party unconscientiously taking advantage of that position." independent and voluntary, the result of The proper appellate approach to findings concerning vitiating factors In any case where a transaction is sought to be impugned by the operation of vitiating factors such as duress, undue influence, or unconscionable conduct, it is necessary for a trial judge to conduct a "close consideration of the facts ... in 66 (1983) 151 CLR 447 at 474. 67 (1990) 54 SASR 438 at 448-449. 68 (1983) 151 CLR 447 at 461. Bell Edelman order to determine whether a claim to relief has been established"69. On appeal, it is also essential for the appellate court to scrutinise the trial judge's findings and assess any challenge to the trial judge's conclusions in light of the advantages enjoyed by that judge. In Kakavas v Crown Melbourne Ltd70, quoting with approval from the judgment of Dawson, Gaudron and McHugh JJ in Louth v Diprose71, this Court described how the "proof of the interplay of a dominant and subordinate position in a personal relationship depends, 'in large part, on inferences drawn from other facts and on an assessment of the character of each of the parties'". As Rich J said, in the context of a claim to set aside a transaction, the advantage of the trial judge "of seeing the parties and estimating their characters and capacities is immeasurable"72. These matters led Toohey J, in Louth v Diprose73, to say that the "formidable obstacles" involved in an attack on findings of fact by a trial judge "may be enhanced where issues of undue influence and unconscionability are involved". Related to the fact finding advantage of the trial judge is the evaluative nature of the judgment involved in determining whether the vitiating factors have been established. For example, in undue influence there will be questions of evaluative judgment involved in assessing whether the extent to which a person's will has been subordinated to another's is sufficient to characterise the person as lacking free will. The same evaluative exercise was described by this Court in Kakavas v Crown Melbourne Ltd74 in relation to unconscionable conduct, quoting from Dixon CJ, McTiernan and Kitto JJ in a passage from Jenyns v Public Curator (Q)75 which emphasised how the application of these equitable principles: 69 Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392 at 400 [14]. 70 (2013) 250 CLR 392 at 434-435 [144]. 71 (1992) 175 CLR 621 at 639-641. 72 Wilton v Farnworth (1948) 76 CLR 646 at 654, Dixon J agreeing; [1948] HCA 20. 73 (1992) 175 CLR 621 at 649-650. 74 (2013) 250 CLR 392 at 426 [122]. See also at 401 [18]. 75 (1953) 90 CLR 113 at 118-119; [1953] HCA 2. Bell Edelman "calls for a precise examination of the particular facts, a scrutiny of the exact relations established between the parties and a consideration of the mental capacities, processes and idiosyncrasies of the [other party]. Such cases do not depend upon legal categories susceptible of clear definition and giving rise to definite issues of fact readily formulated which, when found, automatically determine the validity of the disposition. Indeed no better illustration could be found of Lord Stowell's generalisation concerning the administration of equity: 'A court of law works its way to short issues, and confines its views to them. A court of equity takes a more comprehensive view, and looks to every connected circumstance that ought to influence its determination upon the real justice of the case'". The primary judge's decision The primary judge posed the hypothetical question of why Ms Thorne would sign an agreement when she understood the advice of her solicitor to be that the agreement was the worst that the solicitor had ever seen76. The primary judge also asked why, despite the advice of her solicitor, Ms Thorne failed to conceive of the notion that Mr Kennedy might end the marriage. The primary judge found that the answer to these questions did not lie in Ms Thorne's lack of proficiency in English. Instead, the primary judge attributed Ms Thorne's beliefs and actions to matters of duress or undue influence. The primary judge described duress as "a form of unconscionable conduct"77. This description was not subsuming the vitiating factor of duress within the doctrine of unconscionable transactions, which would require a finding of special disadvantage and an unconscientious taking advantage of that special disadvantage. Her Honour was using "unconscionable" in the sense described by Gaudron, McHugh, Gummow and Hayne JJ in Garcia v National Australia Bank Ltd78 as "to characterise the result rather than to identify the reasoning that leads to the application of that description". The critical findings of the primary judge concerning duress and undue influence were based primarily upon Ms Thorne's evidence. Although the 76 Thorne & Kennedy [2015] FCCA 484 at [85]. 77 Thorne & Kennedy [2015] FCCA 484 at [68]. 78 (1998) 194 CLR 395 at 409 [34]. Bell Edelman primary judge described Mr Kennedy's evidence as having "many difficulties"79, she had no such concerns about Ms Thorne's evidence. The primary judge concluded that Ms Thorne was powerless to make any decision other than to sign the first agreement. The primary judge referred to an inequality of bargaining power and a lack of any outcome for Ms Thorne that was "fair or reasonable"80. However, her Honour also explained that Ms Thorne's situation was "much more than inequality of financial position"81. The primary judge set out six matters which, in combination, led her to the conclusion that Ms Thorne had "no choice"82 or was powerless83: (i) her lack of financial equality with Mr Kennedy; (ii) her lack of permanent status in Australia at the time; (iii) her reliance on Mr Kennedy for all things; (iv) her emotional connectedness to their relationship and the prospect of motherhood; (v) her emotional preparation for marriage; and (vi) the "publicness"84 of her upcoming marriage. These six matters were the basis for the vivid description by the primary judge of Ms Thorne's circumstances85: "She was in Australia only in furtherance of their relationship. She had left behind her life and minimal possessions ... She brought no assets of substance to the relationship. If the relationship ended, she would have nothing. No job, no visa, no home, no place, no community. The consequences of the relationship being at an end would have significant and serious consequences to Ms Thorne. She would not be entitled to remain in Australia and she had nothing to return to anywhere else in the world. 79 Thorne & Kennedy [2015] FCCA 484 at [23]. 80 Thorne & Kennedy [2015] FCCA 484 at [94]. 81 Thorne & Kennedy [2015] FCCA 484 at [93]. 82 Thorne & Kennedy [2015] FCCA 484 at [97]. 83 Thorne & Kennedy [2015] FCCA 484 at [93]. 84 Thorne & Kennedy [2015] FCCA 484 at [93]. 85 Thorne & Kennedy [2015] FCCA 484 at [91]-[92]. Bell Edelman Every bargaining chip and every power was in Mr Kennedy's hands. Either the document, as it was, was signed, or the relationship was at an end. The husband made that clear." As to the second agreement, the primary judge held that it was "simply a continuation of the first – the marriage would be at an end before it was begun if it wasn't signed"86. In effect, her Honour's conclusion was that the same matters which vitiated the first agreement, with the exception of the time pressure caused by the impending wedding87, also vitiated the second agreement. The Full Court's decision The approach taken by the parties on appeal was to raise so many grounds of appeal that the essential point of the appeal – whether a vitiating factor had been established – was concealed. The Full Court was confronted with 13 grounds of appeal and a notice of contention with eight grounds. As the Full Court held, many of those grounds went nowhere or had no merit. For instance, Mr Kennedy's executors and trustees challenged many of the findings of fact by the primary judge despite there being a solid foundation for all of those findings. With one exception, discussed below, each of those challenges properly failed. However, the Full Court upheld the grounds of appeal in two respects. First, the Full Court held that the primary judge's reasons were inadequate because in the list of six matters relied upon by the primary judge, it was not possible to determine which of the factors were fundamental, and which were subsidiary, to the decision concerning either the first or the second agreement. The Full Court considered that the lack of financial equality might have been determinative, although "a finding of financial inequality could never provide a reasoned basis for duress"88. Secondly, relying upon the decision of the New South Wales Court of Appeal in Australia & New Zealand Banking Group v Karam89, the Full Court held that the primary judge had erred in the test for duress which she had 86 Thorne & Kennedy [2015] FCCA 484 at [96]. 87 Thorne & Kennedy [2015] FCCA 484 at [95]. 88 Kennedy & Thorne (2016) FLC ¶93-737 at 81,807 [62]. 89 (2005) 64 NSWLR 149 at 168 [66]. Bell Edelman applied90. The Full Court held that duress required threatened or actual unlawful conduct but that the primary judge had not concluded that the pressure was "illegitimate" or "unlawful"91. The Full Court also overturned the finding by the primary judge, which had been a factor in her assessment that the agreements were vitiated, that there was no outcome available to Ms Thorne that was fair or reasonable. In effect, the Full Court considered the agreements to be fair and reasonable because (i) Mr Kennedy had told Ms Thorne at the outset of their relationship, and she had accepted, that his wealth was intended for his children, and (ii) Ms Thorne's interest, which was provided for in the agreements, concerned only the provision that would be made for her in the event The Full Court also dismissed a notice of contention by Ms Thorne which, amongst other matters, sought to uphold the primary judge's conclusions on the basis influence or unconscionable conduct. the agreements were vitiated by either undue that The Full Court held that Ms Thorne could not have been subject to undue influence because she acquiesced in Mr Kennedy's desire to protect his assets for his children and because she had no concern about what she would receive on separation92. The Full Court held that Mr Kennedy's conduct was not unconscionable because he did not take advantage of Ms Thorne. The Full Court referred to: (i) its findings of the lack of any misrepresentation by Mr Kennedy about his financial position; (ii) Mr Kennedy's early statements to Ms Thorne that made clear that she would not receive any part of his wealth on separation; (iii) Ms Thorne's staunch belief that Mr Kennedy would never leave her and her lack of concern about her financial position while Mr Kennedy was alive; and (iv) Mr Kennedy's acceptance of handwritten amendments to the agreements that were made by Ms Thorne's solicitor93. 90 Kennedy & Thorne (2016) FLC ¶93-737 at 81,809 [71]. 91 Kennedy & Thorne (2016) FLC ¶93-737 at 81,809 [71]. 92 Kennedy & Thorne (2016) FLC ¶93-737 at 81,817 [132]-[134]. 93 Kennedy & Thorne (2016) FLC ¶93-737 at 81,815-81,816 [111]-[122], 81,817- Bell Edelman The agreements were vitiated by undue influence Any assessment of whether the agreements were vitiated by undue influence must begin by consideration of the findings of the primary judge, with due regard for the advantages enjoyed by the primary judge and the evaluative exercise involved in the primary judge's consideration. With one exception, none of the findings of fact by the primary judge was overturned by the Full Court. That exception was the Full Court's rejection of the primary judge's finding that there was no outcome available to Ms Thorne that was fair or reasonable. The Full Court erred in rejecting this finding. It was open to the primary judge to conclude that Mr Kennedy, as Ms Thorne knew, was not prepared to amend the agreement other than in minor respects. Further, the description of the agreements by the primary judge as not being "fair or reasonable" was not merely open to her. It was an understatement. Ms Harrison's unchallenged evidence was that the terms of the agreements were "entirely inappropriate" and wholly inadequate "[i]n relation to everything". She said that the agreements did not show any consideration for Ms Thorne's interests. Even without Ms Harrison's evidence, it is plain that some of the provisions of the agreements could not have operated more adversely to Ms Thorne. For instance, the agreements purported to have the effect that if Ms Thorne and Mr Kennedy separated within three years then Ms Thorne was not entitled to anything at all. The primary judge was correct to consider the unfair and unreasonable terms of the pre-nuptial agreement and the post-nuptial agreement as matters relevant to her consideration of whether the agreements were vitiated. Of course, the nature of agreements of this type means that their terms will usually be more favourable, and sometimes much more favourable, for one party. However, despite the usual financial imbalance in agreements of that nature, it can be an indicium of undue influence if a pre-nuptial or post-nuptial agreement is signed despite being known to be grossly unreasonable even for agreements of this nature. In other words, what the Full Court rightly recognised as the significant gap between Ms Thorne's understanding of Ms Harrison's strong advice not to sign the "entirely inappropriate" agreement and Ms Thorne's actions in signing the agreement was capable of being a circumstance relevant to whether an inference should be drawn of undue influence. The Full Court also mischaracterised the effect of the primary judge's reasons. As explained above, the primary judge found that Ms Thorne was "powerless" and that Ms Thorne believed that she had "no choice" to do anything other than sign the agreements as presented. The primary judge's finding was, in Bell Edelman effect, that Ms Thorne was deprived of the ability to bring a free choice to the decision as to whether to sign the agreements. Ms Thorne's choices about entering the agreements on Mr Kennedy's terms were subordinated to the will of Mr Kennedy. Despite the strong advice from Ms Harrison, Ms Thorne accepted the terms of the agreements in part due to her "reliance on Mr Kennedy for all things". Although the primary judge described her conclusion as one of "duress", for the reasons explained above her conclusion is more aptly described as one of undue influence. It was, therefore, unnecessary for the primary judge to assess the extent to which the pressure upon Ms Thorne came from Mr Kennedy as might be required for the doctrine of duress. It was also unnecessary for the primary judge to consider whether, for the purposes of the doctrine of duress, the pressure that Mr Kennedy exerted upon Ms Thorne was improper or illegitimate. These are matters within the domain of duress rather than undue influence. Contrary to the reasoning of the Full Court, the failure of the primary judge to reach these conclusions was not an error. Mr Kennedy's executors also relied upon the Full Court's reasoning that the primary judge had based her conclusion only upon an inequality of bargaining power. That submission cannot be accepted. Contrary to the reasoning of the Full Court, the primary judge carefully set out the six factors which, together with the lack of a fair or reasonable outcome, led her to the conclusion that Ms Thorne had no choice but to enter the agreements94. The primary judge's conclusions were open to her on the evidence. Each of the factors which the primary judge considered was a relevant circumstance in the overall evaluation of whether Ms Thorne had been the subject of undue influence in her entry into the agreements. In combination, it was open to the primary judge to conclude that Ms Thorne considered that she had no choice or was powerless other than to enter the agreements. In other words, the extent to which she was unable to make "clear, calm or rational decisions"95 was so significant that she could not aptly be described as a free agent. In the Restatement of the Law Third, Restitution and Unjust Enrichment96, the Reporter said that: 94 Thorne & Kennedy [2015] FCCA 484 at [97]. 95 NA v MA [2007] 1 FLR 1760 at 1785 [114] per Baron J. 96 American Law Institute, Restatement of the Law Third, Restitution and Unjust Enrichment, (2011), §15, comment c. Bell Edelman "Circumstances universally relevant to the proof of undue influence include the relation of the parties; the nature and terms of the transfer in question; the susceptibility of the transferor to the influence of the other; the opportunity of the other to exert undue influence; and the extent to which the transferor acted on the basis of independent advice." In the particular context of pre-nuptial and post-nuptial agreements, some of the factors which may have prominence include the following: (i) whether the agreement was offered on a basis that it was not subject to negotiation; (ii) the emotional circumstances in which the agreement was entered including any explicit or implicit threat to end a marriage or to end an engagement97; (iii) whether there was any time for careful reflection; (iv) the nature of the parties' relationship; (v) the relative financial positions of the parties; and (vi) the independent advice that was received and whether there was time to reflect on that advice. The primary judge's reasons were not inadequate As French CJ and Kiefel J said in Wainohu v New South Wales98, "[t]he centrality, to the judicial function, of a public explanation of reasons for final decisions and important interlocutory rulings has long been recognised". The content of that judicial duty to give adequate reasons will depend upon the circumstances of the matter being considered. Importantly, it is not necessarily the case that reasons be lengthy or elaborate in order to be adequate99. The reasons given by the primary judge for her conclusion of undue influence were not inadequate. Those reasons assessed, evaluated, and characterised all of the circumstances before reaching the conclusion that Ms Thorne was powerless and believed that she had no choice to do anything other than sign the agreements. Contrary to the reasoning of the Full Court, an assessment of whether undue influence arises in the circumstances does not require, and may not even permit, a trial judge to assign some weight to each of the factors upon which the trial judge relies. Nor is a trial judge necessarily 97 Thompson, Prenuptial Agreements and the Presumption of Free Choice: Issues of Power in Theory and Practice, (2015) at 115. 98 (2011) 243 CLR 181 at 213 [54]; [2011] HCA 24. 99 Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 at 443 per Meagher JA. Bell Edelman required to identify which factors are fundamental and which are subsidiary. An assessment of the will-power of a person is not an exercise of mathematical precision. Further, as was the case here, the factors which lead to a conclusion of undue influence might not be independent of each other. That was likely to be the case in relation to the six matters relied upon by the primary judge. For instance, Ms Thorne's "lack of financial equality" with Mr Kennedy and her "lack of permanent status in Australia" would likely have contributed to her "reliance on Mr Kennedy for all things" and may have affected her "emotional connectedness to their relationship and the prospect of motherhood" or "her emotional preparation for marriage". The agreements were also vitiated by unconscionable conduct This appeal should be allowed on the basis that the Full Court erred in concluding that the primary judge's reasons were not adequate and erred in overturning the primary judge's conclusion that, in effect, Ms Thorne was subject to undue influence. As we have explained, it is not necessary to consider the operation of the vitiating factor of duress. This is particularly so in the absence of any detailed argument about the operation of a criterion for duress that the conduct of the dominant party is improper or illegitimate, and the absence of any findings by the primary judge or the Full Court on these matters. In contrast, the issues concerning unconscionable conduct were fully argued. For the reasons which follow, the Full Court also erred in its conclusion that Ms Thorne's entry into the agreements was not procured by unconscionable conduct. The Full Court recognised that Ms Thorne was labouring under a disadvantage100, although the Court did not add the adjective "special", which, as Mason J in Commercial Bank of Australia Ltd v Amadio101 explained, is used to emphasise that the disadvantage is not a mere difference in the bargaining power but requires an inability for a person to make a judgment as to his or her own best interests. The findings by the primary judge that Ms Thorne was subject to undue influence – powerless, with what she saw as no choice but to enter the agreements – point inevitably to the conclusion that she was subject to a special disadvantage in her entry into the agreements. Ms Thorne's special disadvantage was known to Mr Kennedy. Her special disadvantage had been, in part, created by him. He created the urgency with 100 Kennedy & Thorne (2016) FLC ¶93-737 at 81,817 [138]. 101 (1983) 151 CLR 447 at 462. Bell Edelman which the pre-nuptial agreement was required to be signed and the haste surrounding the post-nuptial agreement and the advice upon it. While Ms Thorne knew Mr Kennedy required her acknowledgement that his death would not result in her receiving a windfall inheritance at the expense of his children, she had no reason to anticipate an intention on his part to insist upon terms of marriage that were as unreasonable as those contained in the agreements. Further, Ms Thorne and her family members had been brought to Australia for the wedding by Mr Kennedy and his ultimatum was not accompanied by any offer to assist them to return home. These matters increased the pressure which contributed to the substantial subordination of Ms Thorne's free will in relation to the agreements. Mr Kennedy took advantage of Ms Thorne's vulnerability to obtain agreements which, on Ms Harrison's uncontested assessment, were entirely inappropriate and wholly inadequate. Even within that class of agreement, the agreements which Ms Thorne signed involved "gross inequality"102. Conclusion For these reasons, the appeal should be allowed. In the Full Court there was also a ground of appeal that the primary judge had failed to afford procedural fairness to Mr Kennedy's executors before making orders for costs against his estate103. That ground was conceded by Ms Thorne, although she argued that costs would follow in any event if the agreements were rescinded. Since Mr Kennedy's executors were successful in the Full Court, the costs orders of the primary judge were set aside. In this Court, Mr Kennedy's executors did not submit that the primary judge's costs orders should be disturbed if the appeal were allowed and the orders of the Full Court set aside. The orders that should be made are: (1) Appeal allowed. Set aside the orders of the Full Court of the Family Court of Australia made on 26 September 2016 and, in their place, order that the appeal to that Court be dismissed with costs. The respondent pay the appellant's costs of the appeal to this Court. 102 Gartside v Isherwood (1778) 1 Bro CC 558 at 560-561 per Lord Thurlow LC [28 ER 1297 at 1298]. 103 Kennedy & Thorne (2016) FLC ¶93-737 at 81,811 [85]. Bell Edelman These orders do not affect Ms Thorne's application for property adjustment and lump sum maintenance orders, which remains to be determined by the Federal Circuit Court. Nettle NETTLE J. I have had the advantage of reading in draft the reasons for judgment of the plurality, and I agree in the orders which their Honours propose. Were it not for the decision of the Court of Appeal of the Supreme Court of New South Wales in Australia & New Zealand Banking Group v Karam104, I should be disposed to decide this appeal on the basis that Ms Thorne's entry into the agreements was the result of illegitimate pressure (or duress, as the primary judge aptly described it105) of such degree as to engage equity's jurisdiction to grant relief106. The difficulty with doing so, however, as the plurality observe, is that Karam decided107 that the concept of illegitimate pressure should be restricted to the exertion of pressure by "threatened or actual unlawful conduct", and, by and large, Karam has since been followed without demur108. Of course, so to observe is not necessarily to accept that Karam's rejection of illegitimate pressure by lawful means is doctrinally valid. To the contrary, there appears to be much to be said for the view that, rather than persist with a blanket restriction of illegitimate pressure to pressure exerted by unlawful means, it would better accord with equitable principle, and better align with English109 104 (2005) 64 NSWLR 149. 105 Thorne & Kennedy [2015] FCCA 484 at [94]. 106 See generally Barton v Armstrong [1976] AC 104 at 118 per Lord Cross of Chelsea (Lord Kilbrandon and Sir Garfield Barwick concurring); SH v DH (No 1) (2003) 202 ALR 660 at 668 [59]-[61], 669 [65]; Wagner & Wagner [2009] FamCAFC 16 107 (2005) 64 NSWLR 149 at 167 [62], 168 [66]. 108 See for example Mitchell v Pacific Dawn Pty Ltd [2006] QSC 198 at [20]-[24]; A Little Company Ltd v Peters [2007] NSWSC 833 at [44]-[45], [54]-[55]; A v N [2012] NSWSC 354 at [506]-[509], [520]; May v Brahmbhatt [2013] NSWCA 309 at [40] per Beazley P (Bergin CJ in Eq agreeing at [57]), cf at [54] per Basten JA; Westpac Banking Corporation v Billgate Pty Ltd (2013) 9 BFRA 1 at 82 [596]- [597]; Commercial Base Pty Ltd v Watson [2013] VSC 334 at [34]-[39]; Zagar & Hellner [2016] FamCA 224 at [80]-[82]; Merrion Pty Ltd v Loustas [2017] VSC 95 at [41]-[43]; Tiernan & Tiernan [2017] FamCA 23 at [32]; Nalbandian v Commonwealth of Australia [2017] FCA 45 at [55]-[57]. See and compare Electricity Generation Corporation v Woodside Energy Ltd [2013] WASCA 36 at [25] per McLure P (Newnes JA agreeing at [44]), [159] per Murphy JA; Doggett v Commonwealth Bank of Australia (2015) 47 VR 302 at 321 [73] per Whelan JA (Garde AJA agreeing at 353-354 [218]). 109 See for example Pao On v Lau Yiu Long [1980] AC 614 at 635-636; Universe Tankships Inc of Monrovia v International Transport Workers Federation [1983] 1 (Footnote continues on next page) Nettle and American110 authority, if the test of illegitimate pressure were whether the pressure goes beyond what is reasonably necessary for the protection of legitimate interests111. It has been suggested that Karam was consistent with this Court's decision in Smith v William Charlick Ltd112. Even if that were so, however, by the time Karam was decided, equity's capacity to relieve against illegitimate pressure exerted by lawful means had become established doctrine113. Karam was a significant departure from the preponderance of relevant Australian authority114. AC 366 at 383-384 per Lord Diplock (Lord Cross of Chelsea and Lord Russell of Killowen agreeing at 391-392, 397), 400-401 per Lord Scarman; CTN Cash and Carry Ltd v Gallaher Ltd [1994] 4 All ER 714 at 718 per Steyn LJ (Farquharson LJ and Sir Donald Nicholls V-C agreeing at 719); Attorney-General v R [2003] EMLR 24 at 506-507 [16] per Lord Hoffmann (Lord Bingham of Cornhill, Lord Steyn and Lord Millett concurring); Borrelli v Ting [2010] Bus LR 1718 at 1728 [34]. 110 See Corbin on Contracts: Avoidance and Reformation, (2002), vol 7, §28.3; French v Shoemaker 81 US 314 at 332-333 (1871); United States v Bethlehem Steel Corporation 315 US 289 at 328-330 (1942) per Frankfurter J (dissenting in the result); Nyulassy v Lockheed Martin Corporation 16 Cal Rptr 3d 296 at 306-310 (2004); Nino v Jewelry Exchange Inc 609 F 3d 191 at 201-202 (3rd Cir 2010); Pokorny v Quixtar Inc 601 F 3d 987 at 996-998 (9th Cir 2010). 111 See Edelman and Bant, Unjust Enrichment, 2nd ed (2016) at 211-212, 215-216. 112 (1924) 34 CLR 38 at 49, 51 per Knox CJ, 55-57, 62-63 per Isaacs J, 68 per Rich J, 69 per Starke J, cf at 64-65 per Higgins J; [1924] HCA 13. See Stewart, "Economic Duress – Legal Regulation of Commercial Pressure", (1984) 14 Melbourne University Law Review 410 at 425. 113 See Public Service Employees Credit Union Co-operative Ltd v Campion (1984) 75 FLR 131 at 138-140; CTN Cash and Carry [1994] 4 All ER 714 at 718 per Steyn LJ (Farquharson LJ and Sir Donald Nicholls V-C agreeing at 719); Attorney- General v R [2003] EMLR 24 at 506-507 [16] per Lord Hoffmann (Lord Bingham of Cornhill, Lord Steyn and Lord Millett concurring). See generally Williams v Bayley (1866) LR 1 HL 200 at 212-213 per Lord Cranworth, 216 per Lord Chelmsford, 222 per Lord Westbury; Mutual Finance Ltd v John Wetton & Sons Ltd [1937] 2 KB 389 at 395; Edelman and Bant, Unjust Enrichment, 2nd ed (2016) 114 See Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40 at 46 per McHugh JA (Samuels JA and Mahoney JA agreeing in the result). See also Equiticorp Financial Services Ltd (NSW) v Equiticorp Financial Services Ltd (NZ) (1992) 29 NSWLR 260 at 296-297, 300; Equiticorp Finance Ltd (Footnote continues on next page) Nettle Moreover, Karam's rejection of illegitimate pressure by lawful means was largely based on a view115 that the concept is too uncertain to be acceptable. Yet it is by no means immediately obvious116 why it should be considered any more uncertain than the equitable conceptions of unconscionable conduct and undue influence to which Karam held117 it should be consigned. Nevertheless, there would need to be detailed argument and deep consideration of the ramifications of departing from Karam before this Court would contemplate that course, and, although counsel for Ms Thorne essayed something of that task in written submissions, in oral argument it was accepted that what was said about illegitimate pressure by lawful means was subsumed by what was advanced under the rubric of unconscionable conduct. The equitable doctrine of unconscionable conduct is not restricted to unlawful means. Equity may intervene to relieve against the consequences of a party taking unconscientious advantage of another party's position of special disadvantage regardless of whether the conduct is otherwise lawful118. And while (in liq) v Bank of New Zealand (1993) 32 NSWLR 50 at 149-151 per Clarke and Cripps JJA; Caratti v Deputy Commissioner of Taxation (1993) 27 ATR 448 at 457 per Ipp J (Wallwork J agreeing at 458); Deemcope Pty Ltd v Cantown Pty Ltd [1995] 2 VR 44 at 48; Westpac Banking Corporation v Cockerill (1998) 152 ALR 267 at 289-290 per Kiefel J (Northrop J and Lindgren J agreeing at 276); Australasian Meat Industry Employees' Union v Peerless Holdings Pty Ltd (2000) 103 FCR 577 at 589 [54]; Cox v Esanda Finance [2000] NSWSC 502 at [141]- [145]; Ford Motor Company of Australia Ltd v Arrowcrest Pty Ltd (2003) 134 FCR 522 at 543-545 [148]-[151], [155]-[163] per Lander J (Hill and Jacobson JJ agreeing at 524 [1]); Denmeade v Stingray Boats [2003] FCAFC 215 at [14]-[15]. See generally Sindone, "The Doctrine of Economic Duress Part 2", (1996) 14 Australian Bar Review 114 at 117-121; Cooper, "Between a Rock and a Hard Place: Illegitimate Pressure in Commercial Negotiations", (1997) 71 Australian Law Journal 686 at 694-696. 115 (2005) 64 NSWLR 149 at 166-167 [61]-[62], 168 [66]. 116 See Edelman and Bant, Unjust Enrichment, 2nd ed (2016) at 211-212; Bigwood, "Throwing the Baby Out with the Bathwater? Four Questions on the Demise of Lawful-Act Duress in New South Wales", (2008) 27(2) University of Queensland Law Journal 41 at 65-70. 117 (2005) 64 NSWLR 149 at 168 [66]. 118 See Louth v Diprose (1992) 175 CLR 621; [1992] HCA 61; Bridgewater v Leahy (1998) 194 CLR 457; [1998] HCA 66. See generally Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392; [2013] HCA 25. Nettle this case might better be conceived of as one involving illegitimate pressure, it is also capable of resolution in terms of Mr Kennedy having taken unconscientious advantage of Ms Thorne's position of special disadvantage119. In effect, it was a position of special disadvantage which he created by bringing her to this country, keeping her here for many months in a state of belief that he would marry her, allowing preparations for the wedding to proceed, and only then, when she had ceased for all practical purposes to have any other option, subjecting her to the pressure of refusing to marry her unless she agreed to the terms of the first agreement120. It was thus also a position of special disadvantage of which Mr Kennedy was aware, or at least of which a reasonable person in his position would have conceived as a real possibility121. In all likelihood, things would have been different if, instead of waiting until the eleventh hour, Mr Kennedy had made clear to Ms Thorne from the outset of their relationship that his love for her was in truth so conditional that the marriage he proposed would depend upon her giving up any semblance of her just entitlements in the event of a dissolution of their marriage. In the scheme of things, it can hardly be supposed that a young woman in Ms Thorne's position would be persuaded to abandon her life abroad and travel halfway around the world to bind herself to a sexagenarian if, at the outset of the relationship, she had been made aware of the enormity of the arrangement that was proposed. Mr Kennedy, however, never attempted so to persuade Ms Thorne. By the time he disclosed to her the full terms of the agreement, and by the time Ms Harrison had made Ms Thorne understand the purport of them, the circumstances in which Ms Thorne found herself appear so seriously to have affected her state of mind as to have rendered her incapable of making a judgment in her own best interests. As the plurality in effect observe, there is no other rational explanation for Ms Thorne's decision not to insist upon the substantive changes which Ms Harrison recommended, and instead to acquiesce in Mr Kennedy's extraordinary demands. The second agreement takes the matter no further. It was dependent for its efficacy upon the first agreement, and so, in my view, falls with the first. But, if that were not so, by the time of the second agreement, given that Mr Kennedy no longer had the leverage of being able to refuse to marry Ms Thorne, it is apparent that Ms Thorne must then have been in a position of special disadvantage which 119 Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 462 per Mason J; [1983] HCA 14. 120 Thorne & Kennedy [2015] FCCA 484 at [46]-[50], [88]-[93]. 121 See and compare Amadio (1983) 151 CLR 447 at 467-468 per Mason J, 478-479 per Deane J (Wilson J agreeing at 468). Nettle rendered her even less capable of making a decision in her own best interests to refuse to sign the second agreement than she had been capable at the time of the first agreement of insisting upon amendments in accordance with Ms Harrison's recommendations. In the result, it would be against equity and good conscience for Mr Kennedy or his successors to be permitted to enforce either agreement122. Both should be set aside. 122 See and compare Blomley v Ryan (1956) 99 CLR 362 at 401-402, 405 per Fullagar J; [1956] HCA 81. GORDON J. I agree with the orders proposed by the plurality. However, the path I take is different: each financial agreement made under Pt VIIIA of the Family Law Act 1975 (Cth) was procured by unconscionable conduct, but not undue influence. Underlying the difference in approach is an important point of principle. The point of principle concerns the relationship between undue influence and the judgment of the person whose will is said to have been affected. In this particular case, Ms Thorne's capacity to make an independent judgment was not affected. The primary judge found that Ms Thorne was able to comprehend what she was doing when she signed the agreements, and that she knew and recognised the advice she was given. importance of Moreover, Ms Thorne wanted the marriage to Mr Kennedy to proceed and to prosper. She knew and understood that it would proceed only if she accepted the terms proffered. Once she decided to go ahead with the marriage, it was right to say, as the primary judge said, that she had "no choice" except to enter into the agreements. No other terms were available. But her capacity to make an independent, informed and voluntary judgment about whether to marry on those terms was unaffected and she chose to proceed. Her will was not overborne. the effect and Although Ms Thorne's independent, informed and voluntary will was not impaired, she was unable, in the circumstances, to make a rational judgment to protect her own interests. In those circumstances, which were evident to and substantially created by Mr Kennedy, it was unconscionable for Mr Kennedy to procure or accept her assent to the agreements. These reasons will consider undue influence and unconscionable conduct in turn. The background to these proceedings and the applicable statutory framework are set out in the reasons given by the plurality. It is unnecessary to repeat those matters except where it is necessary to explain the conclusions reached. Undue influence Applicable principles It is neither possible nor desirable to provide an all-encompassing description of a court's jurisdiction to grant relief on the ground of undue influence123. The circumstances which might enliven the equitable jurisdiction are many and diverse: "the relief stands upon a general principle, applying to all 123 Boyse v Rossborough (1857) 6 HLC 2 at 47 [10 ER 1192 at 1211]; Allcard v Skinner (1887) 36 Ch D 145 at 183; National Westminster Bank Plc v Morgan [1985] AC 686 at 709. the variety of relations" in which one person may have a degree of influence or authority over another124. So far as methods of proof are concerned, the doctrine of undue influence may be engaged either by pointing to facts showing that a transaction was affected by undue influence, or by raising a presumption of influence which shifts the onus of justifying a transaction to the person seeking to uphold it125. As the reasons of the plurality explain, Ms Thorne and Mr Kennedy were not at any relevant time in a relationship that is recognised to give rise, without more, to a presumption of undue influence126. Moreover, there were no factual findings by the primary judge about the course of Ms Thorne and Mr Kennedy's relationship that would assist this Court to determine if there was otherwise a relationship of influence so as to shift the onus of justifying the financial agreements to Mr Kennedy. Accordingly, for undue influence to be established in this case, facts had to be identified which showed that entry into each financial agreement "was the outcome of such an actual influence over the mind of [Ms Thorne] that it [could not] be considered [her] free act"127. What, then, does that inquiry involve? The doctrine of undue influence is concerned with "the quality of the consent or assent of the weaker party"128. Although it is natural to speak of a person "exercising" undue influence over another, and although the conduct of the stronger party may fall for consideration as part of the fact-specific inquiry that the doctrine requires129, the "critical element in the grant of relief" is the impairment of the will of the weaker party130. In that respect, undue influence is 124 Spong v Spong (1914) 18 CLR 544 at 550; [1914] HCA 52 quoting Dent v Bennett (1839) 4 My & Cr 269 at 277 [41 ER 105 at 108]. 125 Johnson v Buttress (1936) 56 CLR 113 at 134-135; [1936] HCA 41. 126 Reasons of Kiefel CJ, Bell, Gageler, Keane and Edelman JJ at [34]-[36]. 127 Johnson (1936) 56 CLR 113 at 134. 128 Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 474; [1983] HCA 14; Bridgewater v Leahy (1998) 194 CLR 457 at 478 [74]; [1998] HCA 66. 129 Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392 at 426 [122]; [2013] HCA 25 quoting Jenyns v Public Curator (Q) (1953) 90 CLR 113 at 118-119; [1953] HCA 2. 130 Mason, "The Impact of Equitable Doctrine on the Law of Contract", (1998) 27 Anglo-American Law Review 1 at 7 quoted in Bridgewater (1998) 194 CLR 457 at distinct from the doctrine of unconscionable conduct, which is concerned with the conduct of the stronger party in unconscientiously taking advantage of some special disability or disadvantage of the weaker party131. That distinction, though not always clearly drawn, may now be taken to be accepted in Australia132. Of course, that is not to deny that the two doctrines may be engaged by the same set of facts133; the point, rather, is that the focus of the inquiry is different. In assessing the quality of the weaker party's consent or assent, the focus of undue influence is on the extent to which the weaker party's "will or freedom of judgment in reference to" the transaction was affected134. Accordingly, where undue influence is sought to be proved by reference to the particular circumstances surrounding a transaction, the question for the court will be whether those circumstances disclose that "the transaction was the outcome of such an actual influence over the mind of the [weaker party] that it cannot be considered [their] free act"135. As is well established, the transaction will be voidable if it was not the product of the free exercise of independent will136. In not dissimilar terms, Ashburner relevantly described the equitable jurisdiction to grant relief on the ground of undue influence as follows: "if A obtains any benefit from B, whether under a contract or as a gift, by exerting an influence over B which, in the opinion of the court, prevents B from exercising an independent judgment in the matter in question, B can set aside the contract or recover the gift"137 (emphasis added). 131 Amadio (1983) 151 CLR 447 at 474-475; Kakavas (2013) 250 CLR 392 at 132 cf Tate v Williamson (1866) LR 2 Ch App 55 at 61; Birks and Chin, "On the Nature of Undue Influence", in Beatson and Friedmann (eds), Good Faith and Fault in Contract Law, (1995) 57 at 58-59. 133 Amadio (1983) 151 CLR 447 at 461; Bridgewater (1998) 194 CLR 457 at 134 Johnson (1936) 56 CLR 113 at 134. 135 Johnson (1936) 56 CLR 113 at 134. 136 Yerkey v Jones (1939) 63 CLR 649 at 677; [1939] HCA 3. See also Watkins v Combes (1922) 30 CLR 180 at 193; [1922] HCA 3; Johnson (1936) 56 CLR 113 at 137 Ashburner, Principles of Equity, (1902) at 411. That focus on the independent judgmental capacity of the weaker party, whether undue influence is sought to be established in a particular situation or a presumption has been raised and is sought to be rebutted, is well settled. Two examples of cases decided by this Court in which undue influence was established with the assistance of a presumption illustrate the point. In Spong v Spong138, a father sought to have a voluntary transfer of land to his son set aside. The father was elderly and the transfer was executed the morning after the death of his wife. It was apparent to the trial judge that the father was, at the time he executed the transfer, "feeble-minded, weak and unable to transact any business whatever"139. Griffith CJ, with whom Isaacs J agreed, observed that the relationship between the father and his son was such that the transfer could not be allowed to stand unless it were "abundantly plain that the father fully understood what he was doing" and it were established that the transfer "was the result of [his] own free will"140. Watkins v Combes141 concerned a transfer of land by an elderly woman to a married couple upon whom she had come to depend. The principal consideration for the transfer was a covenant under which the defendants would maintain her for the rest of her life. Though not incompetent, the woman "was failing both physically and mentally"; her mind "was entirely under the dominion of the defendants"; and she was therefore "incapable of dealing with [the defendants] on a footing of equality"142. Isaacs J observed that the transaction could not stand unless it was "the free outcome of the donor's uninfluenced will"143. His Honour accepted that the issue could be expressed as being "whether the grantor thoroughly comprehended, and deliberately and of her own free will carried out, the transaction"144 (emphasis of Isaacs J). The extent to which a person's will or capacity to exercise independent judgment must be impaired involves questions of degree. In Commercial Bank of Australia Ltd v Amadio, Mason J observed that undue influence is concerned 138 (1914) 18 CLR 544. 139 Spong (1914) 18 CLR 544 at 548. 140 Spong (1914) 18 CLR 544 at 549. 141 (1922) 30 CLR 180. 142 Watkins (1922) 30 CLR 180 at 187-188. 143 Watkins (1922) 30 CLR 180 at 193. 144 Watkins (1922) 30 CLR 180 at 196 quoting Kali Bakhsh Singh v Ram Gopal Singh (1913) 41 LR Ind App 23 at 31. with a situation where "the will of the innocent party is not independent and voluntary because it is overborne"145. The metaphorical description of an "overborne" will does not mean that relief will only be granted if it is established that the weaker party abdicated all semblance of authority or was completely paralysed in making a decision or became a "mere vehicle for [the stronger party's] schemes"146. The word "voluntary" and its cognates are protean expressions which "take their colour from the particular context and purpose in which they are used"147. Even if a person may be perfectly competent to understand and intend what they did, the question remains as to how their intention to enter into the transaction was produced148. However, Mason J's observation that undue influence is concerned with circumstances where the will of the weaker party is so impaired that their decision to enter into a transaction cannot be described as "independent and voluntary" underscores five points. First, it serves as a useful reminder that what needs to be "affected" or impaired is the will of the weaker party – that is, their capacity to exercise independent judgment. The gist of the ground on which relief is granted is "the actual or presumed impairment of the judgment of the weaker party"149 (emphasis added). The question whether a person entered into a transaction in the independent and voluntary exercise of their will is not sufficiently answered by inquiries into whether they perceived there to be few or no practical alternatives to the course actually taken, or whether their options were in fact limited. Second, although it is not necessary to show that the weaker party completely abdicated all decision-making authority, there must still be some relationship, or circumstances surrounding the transaction, which had the effect of "impair[ing] the autonomy of the weaker party to a serious and exceptional 145 (1983) 151 CLR 447 at 461. 146 Tufton v Sperni [1952] 2 TLR 516 at 519. See Birks and Chin, "On the Nature of Undue Influence", in Beatson and Friedmann (eds), Good Faith and Fault in Contract Law, (1995) 57 at 69. 147 Tofilau v The Queen (2007) 231 CLR 396 at 417 [49]; see also at 404 [6]; [2007] HCA 39. 148 Huguenin v Baseley (1807) 14 Ves Jun 273 at 300 [33 ER 526 at 536]; Bridgewater (1998) 194 CLR 457 at 491 [118]. 149 Mason, "The Impact of Equitable Doctrine on the Law of Contract", (1998) 27 Anglo-American Law Review 1 at 7 quoted in Bridgewater (1998) 194 CLR 457 at degree"150. As has sometimes been said, the judgmental capacity of the weaker party must have been "invaded" in such a way that it cannot be said that the decision to enter into the transaction was "the offspring of her own volition"151. Third, the focus on the free exercise of an independent and voluntary will demarcates undue influence from unconscionable conduct. In contrast to undue influence, establishing a special disadvantage or disability for the purposes of unconscionable conduct does not require asking whether the weaker party lacked the capacity to exercise independent judgment152. Fourth, although the free exercise of an independent and voluntary will provides that demarcation, there is no bright line. As the reasons of the plurality identify, the assessment of a set of circumstances is fact-specific. No one fact or matter will be determinative. The assessment of whether there has been the free exercise of an independent and voluntary will necessarily involves questions of fact and degree. And the outcome of that assessment may be that the circumstances of a particular case fall short of a conclusion of undue influence but provide a step towards a conclusion of unconscionable conduct. Fifth, the bare fact of deep emotional commitment to securing the prospect of a shared life together is not of itself a loss of will. Describing commitment as "infatuation" is rhetorically powerful but conclusory. It is against that background that it is necessary to consider the circumstances in this appeal. No undue influence in this appeal The central question in relation to undue influence is whether, when Ms Thorne entered into each financial agreement, she did so otherwise than in the free exercise of her independent will. Under the heading "Any Matters of Duress or Undue Influence", the primary judge set out a number of factual findings about the circumstances in which the first agreement was entered into and the respective attitudes of Ms Thorne and Mr Kennedy. 150 Birks and Chin, "On the Nature of Undue Influence", in Beatson and Friedmann (eds), Good Faith and Fault in Contract Law, (1995) 57 at 69. 151 Daniel v Drew [2005] EWCA Civ 507 at [36]. See also Hall v Hall (1868) LR 1 P & D 481 at 482. 152 Amadio (1983) 151 CLR 447 at 461. The primary judge concluded that there was no evidence to suggest that there would be any further relationship if the wedding did not take place. If the relationship ended, Ms Thorne "would have nothing. No job, no visa, no home, no place, no community". Her Honour found that "[e]very bargaining chip and every power was in [Mr Kennedy's] hands. Either the [first agreement], as it was, was signed, or the relationship was at an end". Ms Thorne was in a position of "powerlessness" which was attributable to "her lack of financial equality, but also [to] her lack of permanent status in Australia at the time, her reliance on [Mr Kennedy] for all things, her emotional connectedness to their relationship and the prospect of motherhood, her emotional preparation for marriage, and the publicness of her upcoming marriage". So far as Ms Thorne's attitude to the first agreement was concerned, the primary judge found that she "wanted a wedding", that she loved Mr Kennedy and that she wanted to have a child with him. And Ms Thorne knew that there would be no wedding if she did not sign the first agreement. In relation to the second agreement, the primary judge found that "the marriage would be at an end before it was begun if it wasn't signed", and that the wife "plainly had no choice that she could reasonably see, but to sign the agreement". The critical element for relief on the ground of undue influence is the impairment of the will of Ms Thorne153. Undue influence does not protect against bad deals. Here, the equitable jurisdiction will be engaged if entry into the agreements was "the outcome of such an actual influence over the mind of [Ms Thorne] that it cannot be considered [her] free act"154 (emphasis added). Put another way, when Ms Thorne signed the agreements, was her capacity to make independent judgments impaired so that she was not acting in the free exercise of her independent and voluntary will? The primary judge found that Ms Thorne knew and understood that the first agreement was "terrible". Yet, despite that knowledge and understanding, she signed it. The question posed by the primary judge was: why? There was an explanatory gap between the fact that Ms Thorne, an intelligent person, knew and understood how disadvantageous it was and the fact that she nevertheless signed it (and the second agreement). So what filled that gap? Her knowledge about the contents of each agreement and Mr Kennedy's financial 153 Mason, "The Impact of Equitable Doctrine on the Law of Contract", (1998) 27 Anglo-American Law Review 1 at 7 quoted in Bridgewater (1998) 194 CLR 457 at 154 See Johnson (1936) 56 CLR 113 at 134. position was not incomplete, although that information was provided late by Was her will impaired, or did she simply have a strong desire to marry him because, as the primary judge found, she was in love with Mr Kennedy, she wanted to marry him and she wanted to have a child with him? Was her "enthusiasm", or willingness, to sign the financial agreements the result of undue influence155? Whatever metaphors and descriptors are used to describe the relevant principles, the focus of the doctrine is on identifying whether and how a person's will is impaired. A belief on Ms Thorne's part that she had no choice but to sign the agreements if she wanted the relationship to continue does not speak to a lack of will or capacity to exercise independent judgment. Indeed, in light of the primary judge's findings, such a belief demonstrates that she did enter into each agreement in the free exercise of her independent will. As the primary judge explained, Mr Kennedy held "[e]very bargaining chip and every power" and did not create any opportunities to negotiate. Ms Thorne's choices were limited to (1) signing each agreement, including agreeing to the clauses which substantially displaced her entitlements in the event of separation, or (2) ending the relationship, which would have disastrous consequences. Those findings were amply supported by the evidence. Accordingly, if Ms Thorne did believe that she had "no choice" but to sign each agreement if she wanted to fulfil her desire to marry and continue her relationship with Mr Kennedy, then her assessment of the options was plainly correct. The evident correctness of her assessment militates against the conclusion that her will was impaired. And the fact that Ms Thorne's options were narrow, even eliminated, is not to the point. The paucity of options is relevant to whether, for the purposes of the doctrine of unconscionable conduct, Ms Thorne was suffering from a special disability or disadvantage of which Mr Kennedy unconscientiously took advantage. But it says nothing about her will. It cannot be said that her entry into each agreement was the outcome of "such an actual influence over the mind" of Ms Thorne that it cannot be considered her free act156. The only sense in which it can be said that Ms Thorne was not "free" was that circumstances (including Mr Kennedy's conduct) had conspired to limit the outcomes that she could realistically obtain by exercising her decision-making capacity. As to that, equity does not aspire to resolve philosophical questions about whether it is meaningful to speak of "free will" when one's zone of autonomy has been bounded. 155 See Bridgewater (1998) 194 CLR 457 at 491 [118]. 156 See Johnson (1936) 56 CLR 113 at 134. For those reasons, Ms Thorne's will was not overborne in the sense explained and there should not be a finding of undue influence. Unconscionable conduct Applicable principles Unconscionable conduct "looks to the conduct of the stronger party in attempting to enforce, or retain the benefit of, a dealing with a person under a special disability in circumstances where it is not consistent with equity or good conscience that he should do so"157. The rationale of the doctrine is "to ensure that it is fair, just and reasonable for the stronger party to retain the benefit of the impugned transaction"158. Whether equity will intervene to prevent a party from enforcing, or retaining the benefit of, a transaction is determined by examining the circumstances under which the parties entered into the transaction. Specifically, the equitable jurisdiction is engaged if, when the transaction was entered into: (1) one party was under a special disadvantage in dealing with the other party; and (2) the other party unconscientiously took advantage of that special disadvantage. The existence of those circumstances at the time of the transaction is what "affect[s] the conscience" of the stronger party159 and renders the enforcement of the transaction, or the taking of the benefit, "unconscientious" or "unconscionable". That understanding of the equitable doctrine of unconscionable conduct is of long standing. In Blomley v Ryan, Kitto J described the circumstances in which equity would intervene on the basis of "unconscientiousness" in the following terms160: "The essence of the ground we have to consider is unconscientiousness on the contract; and the part of unconscientiousness is not made out in this case unless it appears, first, that at the time of entering into the contract the defendant was in such a debilitated condition that there was not what Sir John Stuart called to enforce the party seeking 157 Amadio (1983) 151 CLR 447 at 474. 158 Kakavas (2013) 250 CLR 392 at 425 [118]. 159 Jenyns (1953) 90 CLR 113 at 118. See also Kakavas (2013) 250 CLR 392 at 160 (1956) 99 CLR 362 at 428-429 (citation omitted); [1956] HCA 81 cited in Amadio (1983) 151 CLR 447 at 474. '… a reasonable degree of equality between the contracting parties'; and secondly, that the defendant's condition was sufficiently evident to those who were acting for the plaintiff at the time to make it prima facie unfair for them to take his assent to the sale. If these two propositions of fact were established the burden of proving that the transaction was nevertheless fair would lie upon the plaintiff". (emphasis added) To similar effect, Mason J in Amadio identified the circumstances in which the equitable jurisdiction would be enlivened as follows161: "As we have seen, if A having actual knowledge that B occupies a situation of special disadvantage in relation to an intended transaction, so that B cannot make a judgment as to what is in his own interests, takes unfair advantage of his (A's) superior bargaining power or position by entering into that transaction, his conduct in so doing is unconscionable." (emphasis added) It is not possible to identify exhaustively what amounts to a special disadvantage. Relevant matters may include "illness, ignorance, inexperience, impaired faculties, financial need or other circumstances" that affect the weaker party's ability to protect their own interests162. Those matters are illustrative, not exhaustive163. A special disadvantage may also be discerned from the relationship between parties to a transaction; for instance, where there is "a strong emotional dependence or attachment"164. Whichever matters are relevant to a given case, it is not sufficient that they give rise to inequality of bargaining power: a special disadvantage is one that "seriously affects" the weaker party's ability to safeguard their interests165. Retaining a benefit conferred under a transaction, or seeking to enforce a right or obligation under a transaction, cannot attract the intervention of equity without the existence of some factor that affects the conscience of the stronger party. Once it is accepted that (1) the doctrine of unconscionable conduct seeks to identify that factor in the wrongful (scil "unconscientious" or "exploitative"166) 161 (1983) 151 CLR 447 at 467. 162 Blomley (1956) 99 CLR 362 at 415; see also at 405. 163 Amadio (1983) 151 CLR 447 at 462. 164 Bridgewater (1998) 194 CLR 457 at 490 [115]; see also at 492 [120]. See also Louth v Diprose (1992) 175 CLR 621; [1992] HCA 61. 165 Kakavas (2013) 250 CLR 392 at 425 [118]. 166 Kakavas (2013) 250 CLR 392 at 427 [124]. conduct of the stronger party167, and (2) a person commits no wrong per se by retaining a benefit or seeking to enforce a right or obligation obtained through a lawful transaction, then the basis for equitable intervention must reside in some defect in how the dealing was entered into. That defect will exist if the special disadvantage was sufficiently evident to the stronger party at the time of the transaction to make it unconscientious to procure or accept the assent of the weaker party. Although the doctrine of unconscionable conduct bears some resemblance to the doctrine of undue influence, there is an important difference between the two doctrines. As Mason J explained in Amadio, that difference concerns the will of the innocent party. For unconscionable conduct, "the will of the innocent party, even if independent and voluntary, is the result of the disadvantageous position in which [the innocent party] is placed and of the other party unconscientiously taking advantage of that position"168. By contrast, for undue influence, "the will of the innocent party is not independent and voluntary because it is overborne"169. Unconscionable conduct in this appeal The primary judge's factual findings and reasoning did not specifically address whether Ms Thorne was under any special disadvantage or disability. But a special disadvantage may be discerned from the relationship between the parties170 and the findings of fact in this case require a conclusion that Ms Thorne was under a special disadvantage at the time of each agreement171. In relation to the first agreement, that special disadvantage arose from the circumstances in which Mr Kennedy brought Ms Thorne to Australia, the proximity of the wedding and the circumstances in which the agreement was first provided, coupled with the finding that Ms Thorne knew that the wedding would not take place (and the relationship would be at an end) if she did not sign the agreement. Moreover, Ms Thorne plainly depended on Mr Kennedy both financially and emotionally, was emotionally invested in their relationship and expected a future life with him. It is eminently plausible that she would have been unusually 167 Amadio (1983) 151 CLR 447 at 461, 474. 168 Amadio (1983) 151 CLR 447 at 461. 169 Amadio (1983) 151 CLR 447 at 461. 170 See, eg, Louth v Diprose (1992) 175 CLR 621; Bridgewater (1998) 194 CLR 457. 171 cf Kennedy & Thorne (2016) FLC ¶93-737 at 81,817 [138]. susceptible to entering into an "improvident transaction"172 with Mr Kennedy if she felt that doing so would ensure, or was necessary to ensure, that their relationship continued and that any adverse consequences of ending the relationship were avoided. The force of these conclusions is not lessened by observing that Ms Thorne signed the second agreement after they married. Save that the wedding had occurred by that point, the factors identified above as constituting a special disadvantage could hardly be thought to have dissipated immediately after they married. The wedding did not, of itself, relieve her of the special disadvantage she was under when she entered into the first agreement. Indeed, when Ms Thorne was meeting with her solicitor for the purpose of receiving advice about the second agreement, Mr Kennedy not only sat in the car but telephoned her to ask how much longer she was going to be. And, as the primary judge found, Ms Thorne had no bargaining power and no capacity to effect any change. Accepting that Ms Thorne was placed at a special disadvantage, the question becomes whether Mr Kennedy unconscientiously took advantage of Plainly, Mr Kennedy, as the other party to the relationship, not only was aware of, but played a central role in creating, the various factors constituting the special disadvantage173. And having regard to the circumstances in which they were entered into and their content, the financial agreements were "neither fair nor just and reasonable"174 and the entry into them involved an unconscientious taking of advantage by Mr Kennedy. First, the agreements were "grossly improvident"175. Although it is not essential or necessarily decisive that there is "an inadequacy of consideration"176, it is relevant to observe that the entitlements for which they provided in the event of separation were extraordinarily and disproportionately small in comparison to 172 See Bridgewater (1998) 194 CLR 457 at 492 [121]; see also at 490 [115]. 173 See Kakavas (2013) 250 CLR 392 at 438-440 [155]-[161]. 174 Bridgewater (1998) 194 CLR 457 at 492 [121]. 175 See Bridgewater (1998) 194 CLR 457 at 493 [123]. 176 Amadio (1983) 151 CLR 447 at 475. what Ms Thorne would have been entitled to if she had not entered into the agreements177. Second, the circumstances in which the agreements were entered into support the conclusion that Mr Kennedy's procurement or acceptance of Ms Thorne's assent to each agreement was unconscientious. True it is that some kind of agreement or "paper" relating to Mr Kennedy's wealth had long been in the contemplation of the parties, and that Ms Thorne was not under any relevant misapprehension as to the effect of each agreement178. However, having brought Ms Thorne to Australia promising to look after her like "a queen", it was not until two weeks before the wedding that Mr Kennedy arranged for Ms Thorne to receive legal advice; and it was not until ten days before the wedding that she received detailed information about his finances and became aware of the specific contents of the first agreement. It is not a sufficient response to the conclusion of unconscionable conduct to point to the fact that Ms Thorne received independent legal advice about the two agreements and chose to reject her solicitor's recommendation on each occasion. The fact that Ms Thorne was willing to sign both agreements despite being advised that they were "terrible" serves to underscore the extent of the special disadvantage under which Ms Thorne laboured, and to reinforce the conclusion that in these circumstances, which Mr Kennedy had substantially created, it was unconscientious for Mr Kennedy to procure or accept her assent. Orders I agree with the orders proposed by Kiefel CJ, Bell, Gageler, Keane and 177 See Bridgewater (1998) 194 CLR 457 at 492-493 [121] (noting that the assets in that case had been disposed of for a small fraction of their actual value). 178 cf Amadio (1983) 151 CLR 447 at 480.

HIGH COURT OF AUSTRALIA COMPTROLLER-GENERAL OF CUSTOMS APPELLANT AND PHARM-A-CARE LABORATORIES PTY LTD RESPONDENT Comptroller-General of Customs v Pharm-A-Care Laboratories Pty Ltd [2020] HCA 2 Date of Hearing: 17 October 2019 Date of Judgment: 5 February 2020 Appeal dismissed. ORDER On appeal from the Federal Court of Australia Representation N J Williams SC with D P Hume for the appellant (instructed by Australian Government Solicitor) S B Lloyd SC with J E Taylor for the respondent (instructed by Clayton Utz) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Comptroller-General of Customs v Pharm-A-Care Laboratories Pty Ltd Customs and excise – Customs tariff – Tariff classification – Where no duty owed if goods classifiable as medicaments under heading 3004 of Sch 3 to Customs Tariff Act 1995 (Cth) – Where Administrative Appeals Tribunal found vitamin preparations and garcinia preparations classifiable under heading 3004 – Where Comptroller-General of Customs contended vitamin preparations and garcinia preparations classifiable under heading 1704 ("sugar confectionery") or heading 2106 ("food preparations") so that duty owed – Whether vitamin preparations and garcinia preparations excluded from heading 3004 by Note 1(a) to Ch 30 of Sch 3 to Customs Tariff Act – Whether Administrative Appeals Tribunal erred in classifying vitamin preparations and garcinia preparations under heading 3004. Words and phrases – "duties of customs", "error of law", "essential character", "food preparations", "food language", "Harmonized System", "Harmonized System Convention", "medicament", "most akin", "ordinary meaning", "products for therapeutic or prophylactic uses", "tariff classification", "Vienna Convention", "vitamin". supplements", "foods", "French Administrative Appeals Tribunal Act 1975 (Cth), s 44. Customs Act 1901 (Cth), s 273GA. Customs Tariff Act 1995 (Cth), Schs 2, 3. International Convention on the Harmonized Commodity Description and Coding System (1983). Vienna Convention on the Law of Treaties (1969), Art 33. KIEFEL CJ, BELL, GAGELER, KEANE AND GORDON JJ. This appeal is from a judgment of the Full Court of the Federal Court1 on an appeal on questions of law under the Administrative Appeals Tribunal Act 1975 (Cth)2 from a decision of the Administrative Appeals Tribunal3 under the Customs Act 1901 (Cth)4. It raises issues concerning the construction and application of provisions of the Customs Tariff Act 1995 (Cth) ("the Tariff Act") which implement the International Convention on the Harmonized Commodity Description and Coding System5 ("the Harmonized System Convention"). The issues arise in the context of a dispute between the Comptroller- General of Customs and Pharm-A-Care Laboratories Pty Ltd about the tariff classification of goods imported into Australia from Germany. The goods were referred to by the Tribunal and the Full Court as "vitamin preparations" and "garcinia preparations". Tariff Act The Tariff Act imposes duties of customs on goods imported into Australia6. The amount of duty imposed on imported goods is ordinarily worked out by reference to the rate of duty (expressed as a percentage of the customs value of the goods) set out in the tariff classification in Sch 3 to the Tariff Act under which the goods are classified7. The statutory premise is that all goods are classifiable under a uniquely applicable tariff classification. 1 Comptroller-General of Customs v Pharm-A-Care Laboratories Pty Ltd (2018) 262 FCR 449. Section 44. 3 Pharm-A-Care Laboratories Pty Ltd and Comptroller-General of Customs [2017] AATA 1816. Section 273GA. [1988] ATS 30. Section 15. Section 16(1)(a). Bell Gordon Schedule 3 to the Tariff Act adopts the structure and the English text of the Harmonized Commodity Description and Coding System ("the Harmonized System"), as set out in the Annex to the Harmonized System Convention and as amended in accordance with the procedure for amendment prescribed by the Convention8. Conformably with the Harmonized System, the Schedule is divided into "Sections" and, within Sections, into "Chapters". Each Section and each Chapter has a title, and at the commencement of Sections and Chapters there are often "Notes". Within each Chapter are then "headings", typically indicated by four digits in the first column9. Under headings are "subheadings", typically indicated by between five and eight digits in the first column opposite to a dash or dashes in the second column10. For the purpose of working out the duty imposed by the Tariff Act, the uniquely applicable tariff classification under which imported goods are classified is the heading or subheading under which the goods are classified, in the third column of which a rate of duty is set out in Sch 3 to the Tariff Act11. Potentially relevant to the tariff classification of the vitamin preparations and the garcinia preparations are headings and subheadings located within four Chapters. The four Chapters are in turn located within two Sections. They are Section IV and Section VI. Section IV is entitled "Prepared foodstuffs; beverages, spirits and vinegar; tobacco and manufactured tobacco substitutes". Within it are relevantly Chapter 17 and Chapter 21. Chapter 17 is entitled "Sugars and sugar confectionery". Note 1(c) to Chapter 17 states that the Chapter does not cover "[m]edicaments or other products of Chapter 30". Within Chapter 17 is heading 1704, which is as follows: 8 Articles 7(1)(a), 8(1) and 16 of the Harmonized System Convention. Section 4(1)(a). 10 Section 4(1)(b). 11 Section 6. Bell Gordon SUGAR CONFECTIONERY (INCLUDING WHITE CHOCOLATE), NOT CONTAINING COCOA: -Chewing gum, whether or not sugar-coated -Other Chapter 21 is entitled "Miscellaneous edible preparations". Within Chapter 21 is heading 2106, which is as follows: FOOD PREPARATIONS NOT ELSEWHERE SPECIFIED OR INCLUDED: -Protein concentrates and textured protein substances: ---Protein concentrates ---Textured protein substances -Other: ---Goods, as follows: compound alcoholic preparations of a kind used for the manufacture of beverages; food preparations of flour or meal; hydrolysed protein Free DCS:4% DCT:5% DCS:4% DCT:5% Bell Gordon ---Preparations for oral consumption, such as tablets and chewing gum containing nicotine, intended to assist smokers to stop smoking Free ---Other DCS:Free". The references in the third column of subheadings under heading 2106 to "DCS" and "DCT" are to rates applicable in respect of goods imported from developing countries12. They are of no present relevance. Section VI is entitled "Products of the chemical or allied industries". Note 2 to Section VI is of some importance. Subject to an immaterial exception, the Note relevantly states that "goods classifiable in 3004 ... by reason of being put up in measured doses or for retail sale are to be classified in those headings and in no other heading of this Schedule". Within Section VI are relevantly Chapter 29 and Chapter 30. SYNTHESIS Chapter 29 is entitled "Organic chemicals". Note 1(a) to Chapter 29 relevantly states that the headings of Chapter 29 apply only to "[s]eparate chemically defined organic compounds". Within Chapter 29 is heading 2936, which is "PROVITAMINS AND VITAMINS, NATURAL OR REPRODUCED CONCENTRATES), DERIVATIVES THEREOF USED PRIMARILY AS VITAMINS, AND INTERMIXTURES OF THE FOREGOING, WHETHER OR NOT IN ANY SOLVENT". Because the terms of heading 2936 assume present significance only for the purpose of understanding a reference to heading 2936 in subheading 3004.50.00, there is no need to refer to the subheadings of heading 2936. (INCLUDING NATURAL Chapter 30 is entitled "Pharmaceutical products". Note 1(a) to Chapter 30, the construction and application of which give rise to the central issues in the appeal, is as follows: 12 Section 14. Bell Gordon "This Chapter does not cover: Foods or beverages (such as dietetic, diabetic or fortified foods, food supplements, tonic beverages and mineral waters), other than nutritional preparations for intravenous administration (Section Within Chapter 30 is heading 3004, which is as follows: MEDICAMENTS (EXCLUDING GOODS OF 3002, 3005 OR 3006) CONSISTING OF MIXED OR UNMIXED PRODUCTS FOR THERAPEUTIC OR PROPHYLACTIC USES, PUT UP IN MEASURED DOSES (INCLUDING THOSE IN THE FORM OF TRANSDERMAL ADMINISTRATION SYSTEMS) OR IN FORMS OR PACKINGS FOR RETAIL SALE: -Containing penicillins or derivatives thereof, with a penicillanic acid structure, or streptomycins or their derivatives Free -Other, containing antibiotics Free -Other, containing hormones or other products of 2937: --Containing insulin --Containing corticosteroid hormones, their derivatives or structural analogues --Other Free Free Free -Other, containing alkaloids or derivatives thereof: --Containing ephedrine or its salts Free Bell Gordon --Containing pseudoephedrine (INN) or its salts --Containing norephedrine or its salts --Other -Other, containing vitamins or other products of 2936 -Other, containing antimalarial active principles described in Subheading Note 2 to this Chapter Free Free Free Free Free -Other Free". For the purpose of working out the particular heading or subheading in Sch 3 to the Tariff Act under which imported goods are classified, the Tariff Act requires that use must be made of the "Interpretation Rules" set out in Sch 2 to the Tariff Act13. Those Interpretation Rules are the General Rules for the Interpretation of the Harmonized System ("the GIRs"), also set out in the Annex to the Harmonized System Convention14. To the extent that the GIRs it sets out have potential to bear on the tariff classification of the vitamin preparations and the garcinia preparations, Sch 2 provides: "Classification of goods in Schedule 3 shall be governed by the following principles: The titles of Sections, Chapters and sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative 13 Section 7(1), read with s 3(1) (definition of "Interpretation Rules"). 14 Section 3(1) (definition of "Interpretation Rules"). Bell Gordon Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions: (b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of Rule 3. 3. When by application of Rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. (c) When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. Bell Gordon Tribunal Goods which cannot be classified in accordance with the above Rules shall be classified under the heading appropriate to the goods to which they are most akin. For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related Subheading Notes and, mutatis mutandis, to the above Rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this Rule the relative Section and Chapter Notes also apply, unless the context otherwise requires." Before the Tribunal, Pharm-A-Care contended the vitamin preparations and the garcinia preparations were to be classified under subheadings 3004.50.00 and 3004.90.00 respectively, so as to be free of duty. The Comptroller-General contended that each was to be classified under either subheading 1704.90.00, so as to be dutiable at a rate of 5%, or subheading 2106.90.90, so as to be dutiable at a rate of 4%. that Determining the dispute before it, the Tribunal adopted the conventional two-staged approach to tariff classification explained in Re Gissing and Collector of Customs15. The first stage involves making findings as to the identification of the goods in the condition in which they were imported, including as to the composition of the goods and the functions the goods were designed to serve. The second stage is the construction and application to the goods so identified of the potentially relevant provisions of Sch 3 in accordance with the applicable GIRs set out in Sch 2. Turning first to the identification of the goods in the condition in which they were imported, the Tribunal found that the vitamin preparations and the garcinia preparations were identified as pastilles, imported in bulk in plastic (1977) 1 ALD 144 at 146. See also Chinese Food & Wine Supplies Pty Ltd v Collector of Customs (Vic) (1987) 72 ALR 591 at 599; Vernon-Carus Australia Pty Ltd v Collector of Customs (1995) 21 AAR 450 at 455-456. Bell Gordon sealed bags each containing some 5,000 pastilles and weighing approximately 10.5 kilograms accompanied by certificates of analysis. Each pastille contained sucrose, glucose syrup, gelatin, flavours and other substances. The other substances included vitamins of specified descriptions. The other substances in the garcinia preparations did not include vitamins but did include garcinia cambogia, the scientific name of which is hydroxycitric acid16. the vitamin preparations Taking account of the certificates of analysis and of other evidence which bore on the characteristics of the goods in the condition in which they were imported, the Tribunal made an express finding that "the essential feature" or "essential character or purpose" of the vitamin preparations was the vitamins that they contained17. The Tribunal implicitly made the corresponding finding that the essential feature of the garcinia preparations was the hydroxycitric acid that they contained, noting that the garcinia preparations were designed to enable weight loss, that their efficacy in that respect was disputed, and that their "main purpose" appeared to be "cosmetic"18. Turning to consider the provisions of Sch 3 potentially relevant to the tariff classification of the vitamin preparations, the Tribunal looked first to Note 1(a) to Chapter 30. Construing "such as" within the first parentheses in the Note to mean "for example", the Tribunal took the view that the vitamin preparations were excluded from Chapter 30 by the Note only if they answered the relevant description of "[f]oods"19. Having regard to the fact that the essential feature of the vitamin preparations was the vitamins they contained, the Tribunal concluded that the vitamin preparations did not answer the description of "[f]oods" according to the ordinary meaning of that term20. The Tribunal went on separately to conclude that the vitamin preparations did not in any event answer the description of "food supplements" in Note 1(a) to [2017] AATA 1816 at [4]-[7], [10]. [2017] AATA 1816 at [60]. [2017] AATA 1816 at [79], [85]. [2017] AATA 1816 at [51]. [2017] AATA 1816 at [57]. Bell Gordon Chapter 30, according to the ordinary meaning of that expression21. In reaching that conclusion, the Tribunal expressed the view that there was room for differences of opinion as to the "complete denotation" of the expression "food supplement". For its own part, the Tribunal did "not think that vitamin preparations would naturally or normally be described as food supplements in this country" and did "think that a vitamin preparation would naturally be referred to as such rather than as a food supplement"22. The Tribunal next turned its attention to heading 3004, concluding that the vitamin preparations answered the description in that heading of "medicaments ... consisting of ... products for therapeutic or prophylactic uses"23. The Tribunal noted in light of Note 2 to Section VI that the effect of its conclusion that the vitamin preparations were classifiable to heading 3004 was that the vitamin preparations were classifiable only to heading 3004 and were classifiable neither to heading 1704 nor to heading 210624. Necessarily implicit in the Tribunal's conclusions as to the application of heading 3004 and as to the application of Note 2 to Section VI was its acceptance that the vitamin preparations answered the description of medicaments consisting of products which were not only "for therapeutic or prophylactic uses" but also "put up in measured doses". Under heading 3004, the Tribunal considered subheading 3004.50.00 to provide the most appropriate description25. Turning to consider the provisions of Sch 3 potentially relevant to the tariff classification of the garcinia preparations, the Tribunal concluded that, like the vitamin preparations, the garcinia preparations answered the description neither of "[f]oods" nor of "food supplements" according to the ordinary meanings of those expressions and that they were therefore not excluded by Note 1(a) to Chapter 3026. The Tribunal doubted whether the garcinia preparations [2017] AATA 1816 at [54], [61]-[64]. [2017] AATA 1816 at [61]-[62]. [2017] AATA 1816 at [67]-[74]. [2017] AATA 1816 at [77]. [2017] AATA 1816 at [78]. [2017] AATA 1816 at [79]. Bell Gordon could be characterised as "products for therapeutic or prophylactic uses" within heading 300427, and rejected the contention that they could be regarded as either "sugar confectionery" within heading 1704 or "food preparations" within heading 210628. Applying GIR 4, the Tribunal rejected heading 2106 as a heading to which the garcinia preparations were akin and formed the view that the garcinia preparations were more akin to heading 3004 than to heading 1704 "because there is often a significant health advantage to weight loss"29. The Tribunal thereby concluded in the application of GIR 4 that heading 3004 was that to which the garcinia preparations were "most akin". Under heading 3004, the Tribunal considered subheading 3004.90.00 to provide the most appropriate description30. The result was that the Tribunal determined that the vitamin preparations were classifiable to subheading 3004.50.00 and that the garcinia preparations were classifiable to subheading 3004.90.0031, with the consequence that no duty was owed. Full Court The Comptroller-General appealed from the decision of the Tribunal to the Federal Court on numerous questions of law. The Full Court dismissed the appeal. For present purposes, it is necessary to refer only to those aspects of the Full Court's reasoning which responded to challenges to the Tribunal's decision taken up by the Comptroller-General on further appeal to this Court. The relevant aspects of the Full Court's reasoning concern the Tribunal's treatment of Note 1(a) to Chapter 30 in relation to the vitamin preparations and the Tribunal's treatment of heading 2106 in relation to the garcinia preparations. The Full Court upheld the Tribunal's construction of Note 1(a) to Chapter 30 and found that the Tribunal had not erred in law in concluding that the vitamin [2017] AATA 1816 at [85]. [2017] AATA 1816 at [87]. [2017] AATA 1816 at [88]. [2017] AATA 1816 at [89]. [2017] AATA 1816 at [98]. Bell Gordon preparations did not answer the description either of "[f]oods" or of "food supplements"32. But the Full Court also went further in support of the Tribunal's conclusion that Note 1(a) to Chapter 30 did not exclude the vitamin preparations. The Full Court adopted a construction of the reference to "Section IV" in the second parentheses at the end of that Note which had not been advanced by either party to the appeal before it. The Full Court construed the reference as further confining the exclusory operation of the Note to "only those items of food and beverages which fall within the scope and ambit of Section IV"33. Having regard to the Tribunal's finding that the essential feature or essential character of the vitamin preparations was the vitamins that they contained, the Full Court concluded that the vitamin preparations did not fall within the scope and ambit of Section IV because they could not be described as "sugar confectionery", so as to be classifiable under heading 1704, and could not be described as "food preparations", so as to be classifiable under heading 210634. In relation to the Tribunal's classification of the garcinia preparations, the Full Court rejected arguments advanced by the Comptroller-General that the Tribunal erred in law either by wrongly equating "food preparations" in heading 2106 with "[f]oods" or "food supplements" in Note 1(a) to Chapter 30 or by failing to give adequate reasons as to why the garcinia preparations did not answer the description of "food preparations" in heading 210635. In so doing, the Full Court characterised the Tribunal's finding that the main purpose of the garcinia preparations appeared to be cosmetic as "a finding ... concerning the essential character of the garcinia preparations". From that finding of "essential character", the Full Court appeared to reason that it followed as a matter of law that the garcinia preparations were not "food preparations" for the reason that "a product whose essential character is 'cosmetic' cannot also bear the essential characteristic of being a 'food preparation'"36. The Full Court noted that the Comptroller-General did not challenge the Tribunal's conclusion that, if the (2018) 262 FCR 449 at 462-463 [31]-[35]. (2018) 262 FCR 449 at 463-464 [36]-[38]. (2018) 262 FCR 449 at 464 [39], 465 [41]. (2018) 262 FCR 449 at 472 [67]-[71]. (2018) 262 FCR 449 at 472 [68]. Bell Gordon garcinia preparations were not "food preparations", GIR 4 was capable of applying to classify the garcinia preparations to heading 3004 on the basis that it was the heading to which the garcinia preparations were most akin37. Note 1(a) to Chapter 30 The principal focus of the Comptroller-General's appeal to this Court, by special leave, from the judgment of the Full Court is on the construction of Note 1(a) to Chapter 30 of Sch 3 to the Tariff Act. Observing that the Harmonized System Convention was authenticated in the French language as well as the English language and is equally authoritative in each language, the Comptroller-General draws attention to the French text of Note 1(a) to Chapter 30 of the Harmonized System. The French text of the Note is in the following terms: "Le présent Chapitre ne comprend pas: les aliments diététiques, aliments enrichis, aliments pour diabétiques, compléments alimentaires, boissons toniques et eaux minérales, autres que les préparations nutritives administrées par voie intraveineuse (Section IV)". Notably absent from the French text of Note 1(a) to Chapter 30 of the Harmonized System are opening words equivalent to "[f]oods or beverages" in the English text together with parentheses introduced by words equivalent to "such as". Their absence, the Comptroller-General submits, indicates that those features of the English text were not intended to control the meaning of the words of Note 1(a) that are common to both texts. Reading the English text of Note 1(a) to Chapter 30 of the Harmonized System as transposed into Note 1(a) to Chapter 30 of Sch 3 to the Tariff Act in light of the French text of Note 1(a) to Chapter 30 of the Harmonized System, the Comptroller-General submits that it becomes tolerably clear that the Tribunal and the Full Court were wrong to construe the references in the first parentheses in the English text of the Note as examples of a wider genus of "[f]oods or the description of "food supplements" beverages". If goods answer (2018) 262 FCR 449 at 472 [70]. Bell Gordon ("compléments alimentaires"), excluded by the Note without also needing to answer the description of "food". the Comptroller-General submits, they are The Comptroller-General submits that the Full Court was also wrong to regard the parentheses at the end of the Note as importing a further limitation on the coverage of the Note. The reference to "Section IV" in those second parentheses, the Comptroller-General submits, is no more than a convenient cross-reference, indicating to the reader where goods excluded by the Note from Chapter 30 of Section VI might be classified. The reference is without operative legal effect. Those submissions as to the construction of Note 1(a) to Chapter 30 of Sch 3 to the Tariff Act can be accepted. Transposition of the English text of the Harmonized System into the text of Sch 3 to the Tariff Act attracts the principle of statutory construction identified by Brennan CJ in Applicant A v Minister for Immigration and Ethnic Affairs38: "If a statute transposes the text of a treaty or a provision of a treaty into the statute so as to enact it as part of domestic law, the prima facie legislative intention is that the transposed text should bear the same meaning in the domestic statute as it bears in the treaty. To give it that meaning, the rules applicable to the interpretation of treaties must be applied to the transposed text and the rules generally applicable to the interpretation of domestic statutes give way". By operation of Art 33 of the Vienna Convention on the Law of Treaties39, not only is the French text of the Harmonized System Convention equally authoritative with the English text40, but each term of the Harmonized System Convention is presumed to have the same meaning in each text41. Application of that presumption "requires that every effort should be made to find a common (1997) 190 CLR 225 at 230-231 (footnote omitted). See also at 239-240. cf Minister for Justice (Cth) v Adamas (2013) 253 CLR 43 at 55 [32]. [1974] ATS 2. 40 Article 33(1). 41 Article 33(3). Bell Gordon meaning for the texts before preferring one to another"42, from which "[i]t follows that the treaty interpreter should seek the meaning that gives effect, simultaneously, to all the terms of the treaty, as they are used in each authentic language"43. Because the English text of Note 1(a) to Chapter 30 of the Harmonized System is presumed to have the same meaning as the French text, a meaning that gives simultaneous effect to all of the terms of the English text and of the French text must be preferred to a meaning that does not. Simultaneous effect can be given to all of the terms of both texts by reading the words "such as" in the first parentheses in the Note in the demonstrative sense of meaning "of the following kinds"44. The words then signify not that the particular kinds of goods that are specified within the parentheses are examples of a wider genus indicated of "[f]oods or beverages", but rather that the exclusion from the coverage of Chapter 30 introduced by the reference to "[f]oods or beverages" is confined to the particular kinds of goods specified within the parentheses. Read in that way, the English text corresponds to the French text in referring affirmatively only to "dietetic, diabetic or fortified foods" ("aliments diététiques, aliments enrichis, aliments pour diabétiques"), "food supplements" ("compléments alimentaires"), "tonic beverages" ("boissons toniques") and "mineral waters" ("eaux minérales"). Goods must meet one of those descriptions to fall within the scope of the Note. For goods that meet any of those descriptions, there is no added requirement that the goods also meet the more general description of "[f]oods or beverages" in order to be excluded by the Note from the coverage of Chapter 30. As to the reference to "Section IV" in the parentheses at the end of Note 1(a) to Chapter 30 of Sch 3 to the Tariff Act, it reflects no more than a drafting convention employed in the drafting of both the English text and the French text of the Harmonized System. The drafting convention is to insert parenthetical references to Sections, Chapters or headings at the end of Section Notes and 42 United Nations, Yearbook of the International Law Commission (1966), vol II at 43 World Trade Organization, Report of the Appellate Body, United States – Final Countervailing Duty Determination with respect to Certain Softwood Lumber from Canada, WT/DS257/AB/R, 19 January 2004 at [59]. 44 The Oxford English Dictionary, 2nd ed (1989), vol XVII at 102, "such", sense 7a. Bell Gordon Chapter Notes to indicate for ease of reference where goods excluded by the Section or Chapter Notes might otherwise be classified. Where a Section or Chapter Note operates to exclude goods on the basis of the classification of those goods to a heading within another Section or Chapter, the Note typically does so by referring to goods "of" that other Section or Chapter. Note 1(c) to Chapter 17 is an example. The Tribunal was therefore wrong to construe Note 1(a) to Chapter 30 of Sch 3 to the Tariff Act as excluding the vitamin preparations and the garcinia preparations from the coverage of Chapter 30 only if they answered the relevant description of "[f]oods". The Full Court was also wrong to think that the Tribunal's conclusion that the vitamin preparations were not excluded from the coverage of Chapter 30 could be supported by the parenthetic reference to Section IV at the end of the Note on the basis that those goods were not classifiable under either of the headings within Section IV to which the Comptroller-General had argued that they were classifiable. However, it does not follow that the Comptroller-General's appeal to the Federal Court from the decision of the Tribunal ought to have succeeded. That is because, for an error of law on the part of the Tribunal identified in an appeal on a question of law to the Federal Court to result in an order setting aside the decision of the Tribunal, the error must be shown to be material to the decision of the Tribunal in the sense that the decision which was in fact made by the Tribunal might have been different if the error of law had not occurred45. On the correct construction of Note 1(a) to Chapter 30 of Sch 3 to the Tariff Act, the vitamin preparations and the garcinia preparations were excluded by the Note from the coverage of Chapter 30 only if they answered the relevant description of "food supplements" ("compléments alimentaires"). Nothing in the French text or in the broader context of the Harmonized System is argued to indicate that the expression "food supplements" encompasses anything more or less than is signified by the common understanding of that expression. Within the bounds of reasonableness, the application or non-application of the common 45 Hyundai Automotive Distributors Australia Pty Ltd v Australian Customs Service (1998) 81 FCR 590 at 599; 3-D Scaffolding Pty Ltd v Federal Commissioner of Taxation (2009) 75 ATR 604 at 614 [35]. Bell Gordon understanding of an expression used in a statute to facts that have been found is itself a question of fact46. Hence, in a context in which appeals from the Tribunal to the Federal Court are limited to appeals on questions of law, the Tribunal's conclusions that the vitamin preparations and the garcinia preparations as identified by it each fell outside the description of "food supplements" had the status of findings of fact. The structure of the Tribunal's reasons for decision makes plain that it reached those findings independently of its earlier findings that the preparations did not answer the description of "[f]oods". There is no reason to consider that the findings were in any other way affected by the Tribunal's misconstruction of the Note. Nor are the findings suggested to have been unreasonable. The Comptroller-General nevertheless submits that the Tribunal arrived at its findings that the preparations fell outside the common understanding of "food supplements" through the application of a wrong legal test. The wrong legal test which the Comptroller-General submits that the Tribunal applied was to depart from the second stage of the two-staged approach to tariff classification explained in Re Gissing and Collector of Customs so as not to ask whether the goods having the characteristics identified by the Tribunal at the first stage answered the tariff description of "food supplements" but instead to ask how those goods would commonly be described. Though there is no error of law merely in making a wrong finding of fact47, there is no doubt that a finding of fact can be erroneous in law if the finding is reached through the application of a wrong legal test48. There is also no doubt that the Tribunal would have applied a wrong legal test if the Tribunal had found that the preparations fell outside the description of "food supplements" by asking how those goods would commonly be described. That error of law, if made, would have been elementary. Its making is not lightly to be inferred. 46 Hope v Bathurst City Council (1980) 144 CLR 1 at 7-8; Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 at 395; Vetter v Lake Macquarie City Council (2001) 202 CLR 439 at 450-451 [24]-[25]. 47 Waterford v The Commonwealth (1987) 163 CLR 54 at 77. 48 Times Consultants Pty Ltd v Collector of Customs (Qld) (1987) 16 FCR 449 at 462-463; Sharp Corporation of Australia Pty Ltd v Collector of Customs (1995) 59 FCR 6 at 12. Bell Gordon Fairly read, as they must be49, the Tribunal's reasons for decision disclose no basis for considering that the Tribunal committed the legal error which the Comptroller-General ascribes to it. In finding that the preparations fell outside the description of "food supplements", the Tribunal proceeded by looking to what the Tribunal understood to be signified by the common understanding of "food supplements" and by asking whether goods having the characteristics identified by the Tribunal answered that description. That was precisely what it was required to do. Moreover, as is accepted by both the Comptroller-General and Pharm-A- Care, the Tribunal did not err in law in finding that the preparations did not answer the description of "food supplements" having regard to its express finding that the "essential feature" of the vitamin preparations was the vitamins that they contained and to its implicit finding that the "essential feature" of the garcinia preparations was the hydroxycitric acid that they contained. The Tribunal would have erred in law had it purported to apply GIR 2(b) to treat the preparations as mixtures of substances prima facie classifiable under two or more headings and had it then purported to apply GIR 3(b) to find that the preparations were not excluded from heading 3004 because they did not answer the description of "food supplements" in Note 1(a) to Chapter 30 by reference to their "essential character". That is perhaps what the Full Court thought that the Tribunal did. But it is not what the Tribunal in fact did. The Tribunal's findings as to the "essential feature" or "essential character or purpose" of each of the preparations are to be understood as findings as to the most important characteristic of those goods, which the Tribunal made as an aspect of its identification of the goods at the first stage of the two-staged approach to tariff classification explained in Re Gissing and Collector of Customs. That is to say, in referring to the "essential feature" or "essential character or purpose" of each of the preparations, the Tribunal was doing no more than asking "what really are the [g]oods, and what really is it that they do?"50. No doubt, in framing its answer to those questions, the Tribunal was focusing its attention on the feature of the goods which it thought most important to the classification of the goods at the second stage of the two-staged approach. 49 BVD17 v Minister for Immigration and Border Protection (2019) 93 ALJR 1091 at 1100 [38]; 373 ALR 196 at 205. 50 Anite Networks Pty Ltd v Collector of Customs [1999] FCA 26 at [32]. Bell Gordon And, no doubt, the Tribunal was doing so in light of the competition between headings presented by the dispute before it. That was entirely appropriate. Although the identification of goods "cannot be controlled by the descriptions of goods adopted in the nomenclature of the Tariff", it must always be remembered that the sole purpose of identification is to facilitate classification. Accordingly, "in identifying goods it is necessary to be aware of the structure of the nomenclature, the basis on which goods are classified and the characteristics of goods which may be relevant to the frequently complex task of classification"51. What the Tribunal did at that first stage of the two-staged approach to tariff classification explained in Re Gissing and Collector of Customs is not to be confused with what the Tribunal then went on to do at the second stage. Neither in finding that the preparations did not answer the description of "food supplements" in Note 1(a) to Chapter 30 nor in finding that the vitamin preparations did answer the description of "products for therapeutic or prophylactic uses" in heading 3004 did the Tribunal mention or purport to apply GIR 2(b) or GIR 3(b). That is in contrast to the Tribunal's express application of GIR 4 to classify the garcinia preparations to heading 3004, having found that the garcinia preparations answered neither the description in heading 3004 nor a competing description in heading 1704 or heading 210652. The Tribunal's application of GIR 4 to classify the garcinia preparations to heading 3004 might at first glance seem incongruous with its non-application of GIRs 2(b) and 3(b) in determining that the garcinia preparations as well as the vitamin preparations did not answer descriptions in Note 1(a) to Chapter 30 so as to be excluded from heading 3004. Because that is so, the reason why GIRs 2(b) and 3(b) had no application warrants some elaboration. The GIRs are not limited to rules of construction. For the most part, the GIRs are rules that govern the process of classification of goods to headings and subheadings. As the Tribunal correctly recognised in the structure of its reasoning, GIRs 1 and 6 require goods to be classified first to a heading and, only once classified to a heading, then to a subheading within that heading. GIR 1 sets out the 51 Re Tridon Pty Ltd and Collector of Customs (1982) 4 ALD 615 at 620 [15]. [2017] AATA 1816 at [88]. Bell Gordon primary rule that classification of goods to a heading is to be determined according to the terms of potentially applicable headings as well as to such Section or Chapter Notes as are "relative" to those headings. GIR 6 correspondingly requires classification of goods within a heading to a subheading to be determined according to the terms of potentially applicable subheadings as well as to such Section or Chapter Notes as are "relative" to those subheadings. The GIRs do not contemplate Section Notes or Chapter Notes as having a freestanding operation that is independent of a heading or subheading. Through GIRs 1 and 6, a Section Note or a Chapter Note is to be read as a note to each of the headings and subheadings to which the Note relates. Put another way, each heading and each subheading is to be read with each Section Note that relates to that heading or subheading as well as with each Chapter Note that relates to that heading or subheading. Each Note so read contributes to defining the precise scope and limits of the heading or subheading as if the text of the Note were incorporated into the text of the heading or subheading. Thus, Note 2 to Section VI is to be read as if it were incorporated into the text of heading 3004 and, within heading 3004, into the text of subheadings 3004.50.00 and 3004.90.00. So is Note 1(a) to Chapter 30. In the same way, Note 1(c) to Chapter 17 is to be read as if it were incorporated into the text of heading 1704 and, within heading 1704, into the text of subheading 1704.90.00. GIR 1 goes on to require that classification of goods to a heading be in accordance with GIRs 2, 3, 4 and 5, "provided such headings or Notes do not otherwise require". GIR 6 correspondingly requires that classification of the goods to a subheading within a heading be in accordance with the same GIRs, subject to the same proviso. Whereas GIR 1 is always engaged in the classification of any goods, GIRs 2, 3, 4 and 5 are not framed to govern the classification of all goods. Relevantly, GIR 2(b) is engaged only in respect of the classification of goods that are mixtures or combinations of a material or substance described in a heading with other materials or substances. Where GIR 2(b) is engaged, it operates to expand the scope of the heading by deeming the description in the heading to include goods consisting wholly or partly of the material or substance described in the heading53. GIR 3, including GIR 3(b), is only engaged where goods are prima 53 Canada (Attorney General) v Igloo Vikski Inc [2016] 2 SCR 80 at 93-95 [23]-[24]. Bell Gordon facie classifiable under two or more headings. Goods might be prima facie classifiable under two or more headings so as to engage GIR 3 through the deeming effect of GIR 2(b) on one or more of those headings or because the goods answer descriptions in one or more of those headings independently of GIR 2(b). The "failsafe 'likeness' rule"54 in GIR 4 is applicable only where GIRs 1, 2 and 3 fail to yield a classification. Were it possible to ignore Note 2 to Section VI and Note 1(c) to Chapter 17, the Tribunal's findings as to the identification of the vitamin preparations leave little doubt that the Tribunal would properly have treated them as mixtures engaging GIR 2(b). Application of GIR 2(b) to headings 1704 and 2106 would have the potential to result in the vitamin preparations being not only prima facie classifiable by operation of GIR 1 under heading 3004 (as "mixed ... products for therapeutic or prophylactic uses") but also prima facie classifiable under heading 1704 (as goods consisting partly of "sugar confectionery") and heading 2106 (as goods consisting partly of "food preparations"). If so, GIR 3(b) would apply to require the choice between the descriptions in the three competing headings to be made by treating the vitamin preparations as consisting of the material or component which gave them their "essential character". Applied to heading 3004, the requirement of GIR 3(b) to treat the vitamin preparations as consisting of the material or component which gave them their "essential character" would apply as much to determining whether or not the vitamin preparations answered the description of "food supplements" in Note 1(a) to Chapter 30 as it would to determining whether or not they answered the description of "products for therapeutic or prophylactic uses" in heading 3004. To countenance inconsistent treatment of the Note and the heading in the application of GIR 3(b) would be to countenance an anomaly55. However, it is not possible to ignore Note 2 to Section VI and Note 1(c) to Chapter 17. Nor is it possible to defer consideration of their application until after GIRs 2(b) and 3(b) have been applied. That is because the proviso to GIR 1 makes clear that classification is only to proceed in accordance with GIRs 2, 3, 4 and 5 provided that a heading or any relative Section Note or Chapter Note does not "otherwise require". The proviso in that way subordinates each of those GIRs 54 Canada (Attorney General) v Igloo Vikski Inc [2016] 2 SCR 80 at 97 [28]. 55 Re Tridon Pty Ltd and Collector of Customs (1982) 4 ALD 615 at 619 [14]. See also Horton, Import and Customs Law Handbook (1992) at 32-34. Bell Gordon to any requirement of a heading and of any relative Section Note or Chapter Note that is in any way inconsistent with the operation of another GIR. The exclusory effect on GIRs 2, 3, 4 and 5 of an inconsistent requirement in a heading or relative Section Note or Chapter Note is not all-or-nothing but is only to the extent of the inconsistency. Hence, there is no difficulty with the notion that a particular Note in a particular context might exclude the application of GIRs 2(b) and 3(b) and yet leave open the application of GIR 4. The effect of the proviso's subordination of each of GIRs 2, 3, 4 and 5 to a contrary requirement of a heading or of any relative Section Note or Chapter Note is emphasised in the Harmonized System Explanatory Notes56 ("the Explanatory Notes"). The Explanatory Notes are prepared and approved under the Harmonized System Convention as a guide to the interpretation of the Harmonized System57. In consequence, they are available to be used in the interpretation of so much of the Tariff Act as transposes the text of the The Explanatory Notes spell out that GIR 1 provides that classification must be determined "according to the terms of the headings and any relative Section or Chapter Notes" and "where appropriate, provided the headings or Notes do not otherwise require, according to the provisions of Rules 2, 3, 4, and 5"59. By way of amplification of the bolded text, the Explanatory Notes go on to state60: "The expression 'provided such headings or Notes do not otherwise require' is intended to make it quite clear that the terms of the headings and any relative Section or Chapter Notes are paramount, ie, they are the first consideration in determining classification. For example, in Chapter 56 World Customs Organization, Harmonized Commodity Description and Coding System: Explanatory Notes, 6th ed (2017). 57 Articles 7(1)(b) and 8(2) of the Harmonized System Convention. 58 Barry R Liggins Pty Ltd v Comptroller-General of Customs (1991) 32 FCR 112 at 59 Note (III) to Rule 1 (emphasis in original). 60 Note (V)(a) to Rule 1 (emphasis in original). Bell Gordon 31, the Notes provide that certain headings relate only to particular goods. Consequently those headings cannot be extended to include goods which otherwise might fall there by reason of the operation of Rule 2(b)." To the same effect, the Harmonized System Compendium, prepared by the "The legal elements of classification are: the terms of headings; Section or Chapter Notes; and if not prevented by the two elements above, the remaining General Interpretative Rules. For legal purposes classification is determined by the terms of the headings, the Section or Chapter Notes where relevant, and, if necessary and allowable, the other GIRs. Where the terms of the headings and any relevant Notes leave only one heading open for consideration, or they direct either the classification or the means of classification, then only GIR 1 is used at heading level." Note 2 to Section VI is within the category referred to in the Harmonized System Compendium as Notes that "leave only one heading open for consideration". By leaving only one heading open for consideration, the Note "otherwise require[s]" within the meaning of the proviso to GIR 1 to the 61 Established by the Convention establishing a Customs Co-operation Council [1961] ATS 1. 62 World Customs Organization, The Harmonized System: A universal language for international trade – 30 Years On (2018) at 22. Bell Gordon exclusion of GIRs 2(b) and 3(b)63. Note 1(c) to Chapter 17 similarly "otherwise require[s]" by excluding one heading from consideration64. That exclusionary operation of Note 2 to Section VI was implicitly acknowledged by the Tribunal in recognising that the vitamin preparations were not classifiable under heading 1704 or heading 2106 if they answered the description of "products for therapeutic or prophylactic uses" in heading 3004 and if they were not excluded from that heading by Note 1(a) to Chapter 30. By stating that goods classifiable under heading 3004 are to be classified in that heading and in no other heading in Sch 3, Note 2 to Section VI operates to produce the result that, if goods are determined to be classifiable in heading 3004 by reason of meeting a description in heading 3004 and by reason of not being excluded from the scope of heading 3004 by any Section or Chapter Note that relates to heading 3004, that is the end of the process of classification of those goods: the goods are to be classified under heading 3004 and are not even prima facie classifiable under any other heading. The Note so operates to the exclusion of GIR 3(b) by preventing goods classifiable under heading 3004 from ever being goods that are prima facie classifiable under two or more headings so as to come within the chapeau of GIR 3. Necessarily, the Note further operates to the exclusion of GIR 2(b) by preventing the expansion of references in other headings to cover mixed goods classifiable under heading 3004 so as to preclude the scenario contemplated by GIR 2(b) of those mixed goods needing to be classified in accordance with GIR 3. By reason of Note 2 to Section VI, GIRs 2(b) and 3(b) can therefore have nothing to say about the process of determining whether or not mixed goods are classifiable in heading 3004. They can have nothing to say about whether or not the goods answer a description in heading 3004. They can also have nothing to say about whether or not the goods are excluded from the scope of heading 3004 63 Vernon-Carus Australia Pty Ltd v Collector of Customs (1995) 21 AAR 450 at 459. See also at 453-454. 64 cf Liebert Corporation Australia Pty Ltd v Collector of Customs (unreported, Federal Court of Australia, 26 February 1992) at 18-20, affirmed in Liebert Corporation Australia Pty Ltd v Collector of Customs (1993) 23 AAR 287 at 289- 290. See also Victoria's Secret Direct LLC v United States (2013) 908 F Supp 2d 1332 at 1355-1356; Kent International Inc v United States (2019) 393 F Supp 3d Bell Gordon by any other Section or Chapter Note that relates to heading 3004, including about whether or not the goods answer a description in Note 1(a) to Chapter 30 in so far as that Note relates to heading 3004. Concurrently with yet independently of Note 2 to Section VI, Note 1(c) to Chapter 17 operates in the context of the dispute between the Comptroller- General and Pharm-A-Care to exclude the operation of GIRs 2(b) and 3(b) to a more limited extent. By stating that Chapter 17 does not cover medicaments or other products of Chapter 30, Note 1(c) to Chapter 17 relevantly operates to limit the scope of heading 1704 so as to exclude from that heading medicaments or other products that are classifiable to heading 3004. The effect of the Note, in so far as the dispute is as to whether the preparations should be classified to heading 3004 or to heading 1704, is to prevent goods classifiable to heading 3004 from ever being classifiable to heading 1704. Thus, if goods are classifiable to heading 3004, that is again the end of the dispute so far as it concerns heading 1704 and GIRs 2(b) and 3(b) can have no operation. The consequence of there being no error of law in the Tribunal's findings that the vitamin preparations and the garcinia preparations failed to answer the description of "food supplements" is that the Tribunal was correct in law in concluding that the vitamin preparations and the garcinia preparations were not excluded by Note 1(a) to Chapter 30 from being covered by heading 3004. That is so notwithstanding that the Tribunal was wrong in law in considering that the heading was not excluded by the Note because the preparations also failed to answer the description of "[f]oods". The Tribunal's error in construing Note 1(a) to Chapter 30 of Sch 3 to the Tariff Act as requiring for its application that the vitamin preparations and the garcinia preparations separately answer the description of "[f]oods" was therefore immaterial to the decision which it made. Heading 2106 The Comptroller-General also complains about the Full Court's rejection of his argument that, in applying the "most akin" test in GIR 4 to the garcinia preparations, the Tribunal wrongly equated the expression "food preparations" in heading 2106 with the expression "[f]oods" or "food supplements" in Note 1(a) to Chapter 30. In so far as the Full Court treated the Tribunal as having made a finding about the "essential character" of the garcinia preparations and in so far as the Full Court went on to treat that finding of "essential character" as foreclosing a Bell Gordon the Comptroller-General's complaint finding that the garcinia preparations answered the description of "food preparations", is well-founded. The Tribunal would have erred in law had it sought to apply the criterion of "essential character" to choose between descriptions in supposedly competing headings pursuant to GIR 3(b). As already explained, the Tribunal correctly recognised that GIR 3(b) had no application. Nevertheless, for reasons other than those which the Full Court gave, the Full Court was correct to reject the Comptroller-General's argument that the Tribunal equated "food preparations" with "[f]oods" or "food supplements". The Tribunal's reasons for decision in relation to the garcinia preparations are brief but adequate. Fairly read, those reasons do not suggest that the Tribunal equated one statutory expression with either of the other two slightly different statutory expressions. What the reasons disclose is that the Tribunal applied the same process of decision-making to all three. Having identified the "main purpose" of the garcinia preparations as "cosmetic", the Tribunal found as a fact that the garcinia preparations did not meet the description of "food preparations" according to the common understanding of that expression in the same way as the Tribunal found as a fact that the garcinia preparations did not meet the description of "[f]oods" or "food supplements" according to the common understanding of those other expressions. Heading 3004 Different views have been expressed internationally as to the content of the reference to "products for therapeutic or prophylactic uses" in the heading of the Harmonized System that corresponds to heading 3004 of Chapter 30 of Sch 3 to the Tariff Act65. Against that background, it is as well to record that the Comptroller-General raised no question before the Full Court or before this Court 65 See, eg, Unigreg Ltd v Commissioners of Customs and Excise [1998] 3 CMLR 128 at 137-138 [22]-[25]; Flora Manufacturing & Distributing Ltd v Minister of National Revenue (2000) 258 NR 134 at 138 [17]; Warner-Lambert Co v United States (2005) 425 F 3d 1381 at 1385 [2]; Nutricia NV v Staatssecretaris van Financiën (2014) C-267/13 at [20]. See also Bureau of Customs and Border Protection, US Customs Bulletin and Decisions, vol 38, no 44 (2004) at 16; Canada Border Services Agency, Tariff Classification of Medicaments Including Natural Health Products, D10-14-30 (2014) at 2-5 [4]-[16]. Bell Gordon as to whether the Tribunal erred in law in its construction or application of that expression in heading 3004. Nothing in these reasons should be taken to express any opinion on that question. Disposition The appeal must be dismissed. The Comptroller-General having undertaken as a condition of the grant of special leave to pay Pharm-A-Care's costs of the appeal irrespective of the outcome, an order for costs is unnecessary.

HIGH COURT OF AUSTRALIA THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA APPELLANT AND RELIANCE CARPET CO PTY LIMITED RESPONDENT Commissioner of Taxation v Reliance Carpet Co Pty Limited [2008] HCA 22 22 May 2008 ORDER Appeal allowed. Set aside orders 1 and 2 of the orders of the Full Court of the Federal Court of Australia dated 5 July 2007 and, in their place, order that the appeal to that Court be dismissed. The appellant pay the costs of the respondent. On appeal from the Federal Court of Australia Representation A Robertson SC with J O Hmelnitsky for the appellant (instructed by Australian Government Solicitor) J J Batrouney SC with C M Sievers for the respondent (instructed by Ambry Legal) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Commissioner of Taxation v Reliance Carpet Co Pty Limited Taxes and duties – Goods and services tax – Taxable supply – A New Tax System (Goods and Services Tax) Act 1999 (Cth) ("the Act"), s 9-10 – Contract for sale of land – Whether there is a taxable supply when a deposit held as security for the performance of a purchaser's obligations is forfeited for failure by the purchaser to perform its obligations. Vendor and purchaser – Deposit – Characteristics of deposit – Whether payment of deposit was "in connection with a supply" by vendor taxpayer for the purpose of s 9-15(1) of the Act – Whether forfeited deposit treated as consideration for a supply under s 99-5 of the Act. Words and phrases – "consideration for a supply", "deposit", "grant, assignment or surrender of real property", "in connection with a supply", "real property", "supply", "taxable supply". A New Tax System (Goods and Services Tax) Act 1999 (Cth), ss 9-5, 9-10, 9-15, Property Law Act 1958 (Vic), s 49(2). Sale of Land Act 1962 (Vic), s 26(1)(a). Statute of Frauds 1677, s 17. GLEESON CJ, GUMMOW, HEYDON, CRENNAN AND KIEFEL JJ. The issue The issue before this Court, shortly stated, is whether the Full Court of the Federal Court of Australia (Heerey, Stone and Edmonds JJ)1 erred in holding that the respondent ("the taxpayer") had made out its objection against an assessment by the appellant ("the Commissioner") of goods and services tax ("GST") in respect of a "taxable supply" by the taxpayer; the consideration for that supply by the taxpayer was treated by the Commissioner as being the deposit forfeited to the taxpayer upon its rescission of a contract for the sale of certain real property by the taxpayer. The taxpayer rescinded the contract upon default by the purchaser in completion of the sale. Something should be said immediately of the use here of the term "rescission". A relevant distinction is expressed in the well-known passage in the reasons of Dixon J in McDonald v Dennys Lascelles Ltd2. A contract may be rescinded because of matters, such as fraud, which affect its formation, with the consequence that, so far as possible, the parties are restored to their pre-contract positions. Rescission in that sense is distinct from rescission (or termination) at the election of one party for breach by the other, with the consequence that the contract, so far as it remains executory, is determined, and damages for breach may be recovered. The present case concerns rescission in the latter sense of termination upon a failure in performance by the other party. The GST Provision respecting the assessment and payment of the GST is made by the statute styled A New Tax System (Goods and Services Tax) Act 1999 (Cth) ("the Act"). An important point respecting the nature of the GST was made as follows by the Full Court of the Federal Court in Sterling Guardian Pty Ltd v Commissioner of Taxation3: 1 Reliance Carpet Company Pty Ltd v Federal Commissioner of Taxation (2007) 160 FCR 433. (1933) 48 CLR 457 at 476-478. See also the speech of Lord Wilberforce in Johnson v Agnew [1980] AC 367 at 396. (2006) 149 FCR 255 at 258. Crennan "In economic terms it may be correct to call the GST a consumption tax, because the effective burden falls on the ultimate consumer. But as a matter of legal analysis what is taxed, that is to say what generates the tax liability (and the obligations of recording and reporting), is not consumption but a particular form of transaction, namely supply ..." By way of contrast to the Australian system, counsel for the Commissioner referred to Art 2(1) of the first Council directive4 on the harmonisation of legislation of member states of the European Community concerning turnover taxes; this indicates that VAT is a general tax on the consumption of goods and services. Section 7-1 of the Act relevantly states that GST is payable on "*taxable supplies"5. Section 9-5 answers a question "what are taxable supplies?", posed by a hypothetical taxpayer, by stating that "you make a taxable supply" if, among other criteria not presently relevant, "you make the supply for *consideration". The composite expression "a taxable supply" is of critical importance for the creation of liability to GST. In the facts and circumstances of a given case there may be disclosed consecutive acts each of which answers the statutory description of "supply", but upon examination it may appear that there is no more than one "taxable supply". The meaning of "supply" is given in s 9-10 and in addition to the general words "any form of supply" in s 9-10(1), par (d) of s 9-10(2) includes "a grant, assignment or surrender of *real property", and "real property" is defined6 expansively as including: any interest in or right over land; or a personal right to call for or be granted any interest in or right over land; or 4 Directive 67/227. 5 The use of the asterisk is a device to alert the reader to the presence of a definition in the Dictionary to the Act. In the Dictionary provision of s 195-1. Crennan a licence to occupy land or any other contractual right exercisable over or in relation to land". Further, par (g) of s 9-10(2) includes "an entry into ... an obligation ... to do anything". The term "consideration" is defined in par (a) of s 9-15(1) as including: "any payment, or any act or forbearance, in connection with a supply of anything". The payment, act or forbearance may be voluntary and need not be by the recipient of the supply (s 9-15(2)). The amount of GST on a taxable supply is 10 per cent of "the value of the taxable supply" (s 9-70), and in the present case this was assessed as being the consideration represented by the forfeited deposit. Division 29 lays down rules for the attribution to a tax period of the GST payable on a taxable supply. The general rule (s 29-5) is that the supplier becomes liable to pay GST on the earlier of two events, namely the receipt by the supplier of any of the consideration for the taxable supply, and the issue of an invoice relating to that supply; in the present case no invoice was issued by the taxpayer and the only relevant event was the receipt of the alleged consideration. Special provisions are made in Div 99 respecting deposits as security. These are stated in Div 99 to apply despite anything in the general provisions respecting consideration (s 9-15), and tax periods (s 29-5). It will be necessary to refer to Div 99 more fully later in these reasons. It is sufficient at this stage to remark that the chapeau to s 99-1 reads "What this Division is about" and the text of s 99-1 reads: "GST does not apply to the taking of a deposit as security for the performance of an obligation (unless the deposit is forfeited or is applied as consideration). GST is not attributable prior to forfeiture." This temporal link is important. There may have been an anterior supply, or more than one anterior supply, but GST is not attributable prior to performance of the obligation or forfeiture of the deposit. The effect of the Commissioner's submissions made to this Court and earlier made (unsuccessfully) to the Full Court, is that without the payment of the Crennan deposit by the purchaser, the purchaser would not have obtained contractual rights exercisable in relation to land, namely the benefit of the promise by the taxpayer to convey the subject land upon completion of the contract. By dint of the expansive definition of "real property" in the Act, this was a "supply" by the taxpayer which was constituted by "a grant ... of real property": par (d) of s 9- 10(2). Further, the deposit received by the taxpayer was a payment "in connection with" that supply and so was "consideration" (s 9-15(1)(a)). However, by reason of the special provision of s 99-5, the deposit was treated as consideration only if and when the deposit was forfeited. The Full Court held7: "When the [taxpayer] entered into the contract for sale with the purchaser it entered into a contract for the supply of real property; nothing more and nothing less ... That supply did not take place because the contract was rescinded." Several points should be made here. The circumstance that the contract did not proceed to completion does not necessarily prevent there having been a "supply" when the contract was entered into; the ultimate issue is whether there was "a taxable supply" to which GST was attributed for the relevant tax period. The contract was executory in nature and was never "rescinded" in the sense of being set aside for some vitiating factor attending its formation. Further, the use of the phrase "nothing more and nothing less" appears to give insufficient weight both to the definition of "real property" in the Act, and to the identity of the subject matter of the contract, in accordance with ordinary principles of conveyancing, as the title or estate of the vendor in a parcel of land rather than merely the parcel itself in a geographical sense8. For the further reasons which follow the Full Court fell into error and should have upheld the disallowance by the Commissioner to the objection by the taxpayer to the GST assessment. (2007) 160 FCR 433 at 445. cf Travinto Nominees Pty Ltd v Vlattas (1973) 129 CLR 1 at 13; The Commonwealth v Western Australia (1999) 196 CLR 392 at 426 [96]; [1999] HCA 5; Risk v Northern Territory (2002) 210 CLR 392 at 418 [82]; [2002] HCA 23. Crennan The facts The facts were not disputed but the legal significance for the operation of the Act of various steps in the conveyancing process which led to the forfeiture of the deposit calls for some attention. Upon exchange of instruments dated 10 January 2002, the taxpayer entered into a written contract ("the Contract") to sell real estate at Camberwell in Victoria where it conducted its business ("the property"). The premises were not sold as part of a going concern. Nothing turns on the identity of the purchaser, 699 Burke Road Pty Ltd ("the purchaser"). The Contract incorporated the standard form provisions set out in Table A of Sched 7 to the Transfer of Land Act 1958 (Vic). The Contract fixed the purchase price at $2,975,000 and stated that the deposit of $297,500 (or 10 per cent) had been paid "[u]pon the exercise of the option contained in the Option Agreement dated 3 December 2001 between the parties". By written option agreement dated 3 December 2001 ("the Option Agreement") and in consideration of an option fee of $25,000 paid by the purchaser before execution of the Option Agreement the taxpayer had granted to the purchaser an option to purchase the property upon the terms of the annexed contract. Clause 2 of the Option Agreement provided for the exercise of the option by written notice together with the payment of $297,500, "being the deposit payable under the Contract". Clause 5 of the Option Agreement stipulated that upon receipt by the taxpayer of the written notice of exercise and the payment of the deposit, "the [taxpayer] will be bound to sell and the [purchaser] will be bound to purchase the property on the terms and conditions set out in the [annexed Contract]" and that the Contract was to be treated as having been entered into upon the day the option was exercised. In the events which followed execution of the Option Agreement, the parties agreed to extend the time for the exercise of the option until 10 January 2002 (which became the date of the Contract) and to defer payment of the deposit until 31 January 2002. The deposit (with interest and legal costs) was paid on 5 February 2002 and the Contract subsequently was executed and exchanged between the parties; it specified as its date the earlier date of 10 January 2002. The Contract provided that the balance of $2,677,500 was to be paid on settlement. The Special Conditions in the Contract indicated that the purchase Crennan price did not include GST (cl 7)9. Settlement was to take place on or before 10 January 2003, but the taxpayer had the right to defer settlement for a period of six months if required to relocate its business. On 27 February 2002, the taxpayer's solicitors, acting pursuant to s 27 of the Sale of Land Act 1962 (Vic) ("the Sale of Land Act"), released the deposit to the taxpayer10. The taxpayer later exercised its option to defer the date of settlement by six months, to 10 July The purchaser failed to complete on 10 July 2003 and did not remedy that default within the period of the 14 day notice to complete (headed "Rescission Notice") given by the taxpayer on 11 July 2003. On or about 26 July 2003, the taxpayer rescinded the Contract and forfeited the deposit. By notice dated 9 November 2004, the Commissioner assessed the taxpayer as liable to pay GST in respect of the forfeited deposit for the three month tax period which had ended on 30 September 2003. The matter proceeded with a grant by the Commissioner of test case funding. The Commissioner's disallowance of the taxpayer's objection was affirmed11 by the Hon Howard Olney AM, QC as a Deputy President of the Administrative Appeals Tribunal ("the AAT"), but an "appeal" by the taxpayer to the Full Court of the Federal Court was successful. The significance of the deposit In Howe v Smith12, Fry LJ said that money paid as a deposit must be paid on some terms implied or expressed; statute also may play a part in the formulation of those terms. The ordinary sense of the term "deposit", as 9 This case does not turn upon the special provision made by s 40-65 of the Act respecting sales of residential premises. 10 Section 27 provides for the purchaser to empower the release to the vendor "in his own right" of deposit moneys held by a legal practitioner or estate agent as a stakeholder. In the absence of an arrangement or legislation to the contrary, neither vendor nor purchaser has a proprietary interest in a deposit held by a stakeholder: Hastingwood Property Ltd v Saunders Bearman Anselm [1991] Ch 114 at 123. 11 Re Reliance Carpet Co Pty Ltd and Federal Commissioner of Taxation (2006) 63 ATR 1001; 2006 ATC 2206. 12 (1884) 27 Ch D 89 at 101. Crennan understood in the case law and in conveyancing usage, has several aspects which are relevant to the treatment by the Commissioner of the forfeiture to the taxpayer as the "consideration" for the "supply". First, if the Contract had proceeded to completion, then, as the Contract itself stipulated, the deposit would have been counted towards the payment of the purchase price. Secondly, if specific performance had been sought by the taxpayer but had been refused, the Supreme Court would have been empowered by the wide terms of s 49(2) of the Property Law Act 1958 (Vic) ("the Property Law Act")13 to have ordered repayment of the deposit and to leave the taxpayer to recover such damages as it could against the purchaser14. Thirdly, where, as here, the contract was terminated for breach, the deposit would be brought into account in any assessment of damages if an action were pursued against the purchaser15. By its notice of contention, the taxpayer submits that (i) the forfeited deposit was received by the taxpayer "in the nature of damages", (ii) damages do not attract GST in the absence of an "underlying supply" for which the damages are "consideration" within the meaning of the Act, and (iii) the taxpayer retained the property with the result that there was no "supply" in connection with the forfeited deposit. It is unnecessary to consider 13 Section 49(2) states: "Where the Court refuses to grant specific performance of a contract, or in any action for the return of a deposit, the Court may, if it thinks fit, order the repayment of any deposit." There is legislation in similar terms in the United Kingdom and New South Wales: Law of Property Act 1925 (UK), s 49(2); Conveyancing Act 1919 (NSW), s 55(2A). 14 See, generally, Lucas & Tait (Investments) Pty Ltd v Victoria Securities Ltd [1973] 2 NSWLR 268 at 272-273; Poort v Development Underwriting (Victoria) Pty Ltd [1976] VR 779 at 784-785, affd Poort v Development Underwriting (Victoria) Pty Ltd (No 2) [1977] VR 454; Harkins v Butcher (2002) 55 NSWLR 558 at 572-574; Butt, The Standard Contract for Sale of Land in New South Wales, 2nd ed (1998) at 15 NLS Pty Ltd v Hughes (1966) 120 CLR 583 at 588-590; Cowan v Stanhill Estates Pty Ltd (No 2) [1967] VR 641 at 654; Carpenter v McGrath (1996) 40 NSWLR 39 Crennan the operation of the Act for which the taxpayer contends in propositions (ii) and (iii). The argument fails at proposition (i). Subject to the possibility of a successful application by the purchaser under s 49(2) of the Property Law Act16, a deposit may be forfeited by a purchaser irrespective of the vendor having sustained any loss sounding in damages for breach of contract. Further, in the present case there has been no action taken by the taxpayer to recover any alleged damages for failure to complete the Contract, still less is there any apprehended recovery of damages. No question arises of setting-off the deposit against damages recovered by the taxpayer. Fourthly, the taxpayer emphasises that the deposit constitutes "a stand alone obligation", which is a token understood, even in the absence of express contractual provision17, to be provided by the purchaser to the taxpayer as "an earnest to bind the bargain" represented by the Contract18. Fifthly, and although the taxpayer appeared to dispute this, the authorities indicate that whilst the Contract remained executory and was on foot but uncompleted by the purchaser, the deposit provided to the taxpayer a form of security for that performance by the purchaser19. The taxpayer could take the property off the market, "and not concern [itself] with other offers in case the sale should go off, with the comfort at least that the deposit is there for [its] security"20. This security (in an amount representing no more than 10 per cent of the price) was enforced by the forfeiture to the taxpayer on or about 26 July 2003. That forfeiture upon termination for breach by the purchaser was 16 In an English decision, Dimsdale Developments (South East) Ltd v De Haan (1983) 47 Property and Compensation Reports 1 at 12, the vendor had resold at a higher price and on an application by the purchaser the Court ordered repayment of the deposit but on terms that the purchaser allow for a deduction from the deposit of the extra costs and charges paid by the vendor in respect of the second contract. 17 Workers Trust & Merchant Bank Ltd v Dojap Investments Ltd [1993] AC 573 at 18 Brien v Dwyer (1978) 141 CLR 378 at 386, 406. 19 Brien v Dwyer (1978) 141 CLR 378 at 392, 401, 406. 20 Brien v Dwyer (1978) 141 CLR 378 at 401; Romanos v Pentagold Investments Pty Ltd (2003) 217 CLR 367 at 374 [20]; [2003] HCA 58. Crennan supported not only by the general law respecting deposits21, but also by specific entitlement conferred by s 26(1)(a) of the Sale of Land Act22. Further, the forfeiture of the 10 per cent deposit did not attract the jurisdiction of a court of equity to relieve against penalties and forfeitures23. The fourth and fifth aspects of the provision of the deposit are related but distinct. The expression "an earnest to bind the bargain" reflects, as Fry LJ put it in Howe v Smith, the adaptation by the common law of "[t]he practice of giving something to signify the conclusion of the contract, sometimes a sum of money, sometimes a ring or other object, to be repaid or redelivered on the completion of the contract, [which] appears to be one of great antiquity and very general prevalence"24. The practice was received from Roman law into the mediaeval common law by the time of Bracton, and thus preceded the development of the modern law of contract and of the equitable principles which it includes25. The quotation by Fry LJ from Bracton26 indicates that where something was given by way of a deposit before delivery then if the buyer repented and wished to resile from the contract the buyer lost the deposit; if the seller was responsible for the non-performance then the seller was required to return double the amount of the deposit. Writing in the same period as Fry LJ, Benjamin said that in the modern law "the true legal effect of earnest is simply to afford conclusive evidence that a bargain was actually completed with mutual intention that it should be binding 21 In the absence of an express contractual stipulation to the contrary, a vendor terminating a contract for default by the purchaser in completion is entitled to retain the deposit, as an implied term upon which the deposit was provided: Hall v Burnell [1911] 2 Ch 551. 22 Section 26(1)(a) provides that in these circumstances, "the vendor shall be immediately entitled to be paid the deposit moneys in his own right". 23 NLS Pty Ltd v Hughes (1966) 120 CLR 583 at 588-589; Lexane Pty Ltd v Highfern Pty Ltd [1985] 1 Qd R 446 at 455; Workers Trust & Merchant Bank Ltd v Dojap Investments Ltd [1993] AC 573 at 578-579. 24 (1884) 27 Ch D 89 at 101. 25 Linggi Plantations Ltd v Jagatheesan [1972] 1 MLJ 89 at 91 per Lord 26 (1884) 27 Ch D 89 at 102. Crennan on both [parties]"27. Section 17 of the Statute of Frauds 167728, in dealing with the enforcement of contracts for the sale of goods for the price of £10 or upwards, treated separately the giving by the buyer of something "in earnest to bind the bargain" and "in part of payment". The circumstance that the deposit forfeited to the taxpayer had various characteristics does not mean that the taxpayer may fix upon such one or more of these characteristics as it selects to demonstrate that there was no taxable supply. It is sufficient for the Commissioner's case that the presence of one or more of these characteristics satisfies the criterion of "consideration" for the application of the GST provisions respecting a "taxable supply". One of the characteristics of the deposit was that upon its payment on 5 February 2002 it operated as a security for the performance of the obligation of the purchaser to complete the Contract and was liable to forfeiture on that failure. That is sufficient for the Commissioner's case. Counsel for the taxpayer referred to the statement of the modern French law respecting deposits in the recent judgment of the European Court of Justice (First Chamber) in Société Thermale d'Eugénie-les-Bains v Ministère de l'Économie, des Finances et de l'Industrie29, as follows: "As regards, specifically, deposits, it must be noted first that they mark the conclusion of a contract, since their payment implies a presumption that the contract exists. Secondly, a deposit encourages the parties to perform the contract, because otherwise the party who has paid it stands to lose the corresponding sum, while the other party must, if responsible for the non-performance, return double that amount. Thirdly, the deposit constitutes fixed compensation, since its payment releases one of the parties from the need to prove the amount of the loss suffered if the other party goes back on the agreement. The raison d'être for deposits in the hotel sector corresponds, as a rule, to the above characteristics. Such deposits serve therefore to mark 27 Benjamin's Treatise on the Law of Sale of Personal Property, 3rd ed (1884) at 301. 28 29 Car II c 3. Section 17 was repealed by the Statute Law Revision and Civil Procedure Act 1881 (UK) 44 & 45 Vict c 59. 29 [2007] 3 CMLR 38 at 1019-1020. Crennan the conclusion of the contract, to encourage its performance and, as the case may be, to provide fixed compensation." This case concerned the operation of a VAT system upon deposits for hotel accommodation which were retained by the hotelier upon cancellation of reservations. The first characteristic of a deposit identified above accords with what Benjamin said of the common law, but the second and third characteristics do not state the common law. It was these characteristics which the Court emphasised in holding that VAT was not exigible because the sum was retained as compensation for the default by the client30. The European Community directive in question31 requires that there be a direct connection between the services provided and what is received for them, as the judgment states32. In this case it was necessary that the deposit be linked to the provision of hotel services. In French contract law that link would only be present if the hotelier's obligation was interdependent with that of the customer, to pay the deposit33. The parties to a contract may agree as to compensation to be paid upon breach, which is what they were taken to have done in providing the deposit. The direct connection required by the directive may be contrasted with that for a taxable supply under the GST legislation and the directive has no counterpart to s 99-5. Counsel for the taxpayer also referred to treatment in the Value Added Tax Act 1994 (UK) of the grant and assignment of estates or interests in land. But that statute, which is fleshed out by extensive delegated legislation34, is of no apparent assistance in construing the Australian legislation as it applies to the present case. Counsel also provided materials respecting the treatment of deposits in the taxation systems of New Zealand and Canada. However, these systems appear to lack any sufficiently close analogue to Div 99 of the Act for assistance to be derived from them in the present case. 30 [2007] 3 CMLR 38 at 1020. 31 Articles 2(1) and 6(1) of the Sixth Council Directive 77/388 of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value added Uniform basis of assessment tax: ([1977] OJ L145/1); see also Art 11(A)(1)(a). 32 [2007] 3 CMLR 38 at 1018. 33 [2007] 3 CMLR 38 at 1019. 34 See Halsbury's Laws of England, 4th ed, vol 49(1), pars 37, 40, 41. Crennan Conclusions Was the taxpayer liable to pay GST as assessed for the three month tax period ending 30 September 2003? Had the taxpayer made a taxable supply, ie a "supply for consideration"? First, as to the consideration. The payment of the deposit by the purchaser to the taxpayer was "in connection with" a supply by the taxpayer, within the meaning of the definition of "consideration" in s 9-15(1)(a) of the Act. That connection is readily seen from the circumstance that, with the receipt of the written notice of the exercise of the option by the purchaser, and by force of cl 5 of the Option Agreement, the payment of the deposit obliged the parties to enter into the mutual legal relations with the executory obligations and rights laid out in the Contract. Those legal relations were directed to the completion of the Contract by conveyance of the property to the purchaser by the taxpayer upon payment by the purchaser. But, as to the requirement for "consideration", that is not the end of the matter. As noted earlier in these reasons, in this case the payment by the purchaser of the deposit was to be treated as "consideration" for a "supply" only if and when the deposit was forfeited because of the failure by the purchaser to perform its obligation to complete the Contract. That conclusion follows from the application of s 99-5. This states: Giving a deposit as security does not constitute consideration (1) A deposit held as security for the performance of an obligation is not treated as *consideration for a supply, unless the deposit: is forfeited because of a failure to perform the obligation; or is applied as all or part of the consideration for a supply. This section has effect despite section 9-15 (which is about consideration)." What, if any, principled concerns may support the adoption by the Parliament of this "wait and see" provision? The AAT pointed out in its reasons Crennan that in any standard contract for sale of land it may be expected that upon termination by the purchaser for breach by the vendor, the purchaser will be entitled to repayment of the deposit, and upon termination by the vendor for breach by the purchaser the deposit will be forfeited to the vendor. If the sale proceeds to completion the deposit will be applied towards the settlement payment. Until one of these three events comes to pass, the ultimate fate of a deposit will be unresolved. (Allowance would also have to be made for the possibility of an order under s 49(2) of the Property Law Act for the return of the deposit to the purchaser.) The AAT accordingly concluded35: "Having regard to the 3 possible alternative destinations of the deposit it is understandable that the legislature has put on hold the question of liability for GST until one or other of the events referred to in s 99-5(1) has occurred." In the present case, and as remarked earlier in these reasons, whatever other characteristics were attributable to the deposit, it was held as security for the obligation of the purchaser duly to complete the Contract. Further, upon the termination by the taxpayer for default by the purchaser, there was a statutory entitlement conferred upon the taxpayer (as vendor) by s 26(1)(a) of the Sale of Land Act to the deposit moneys "in [its] own right". The "supply" by the taxpayer occurred before the forfeiture and thus before the provision of consideration in accordance with s 99-5. Section 9-10 provides: "9-10 Meaning of supply (1) A supply is any form of supply whatsoever. (2) Without limiting subsection (1), supply includes any of these: a supply of goods; a supply of services; a provision of advice or information; 35 (2006) 63 ATR 1001 at 1005; 2006 ATC 2206 at 2210. Crennan a grant, assignment or surrender of *real property; a creation, grant, transfer, assignment or surrender of any right; a *financial supply; an entry into, or release from, an obligation: to do anything; or to refrain from an act; or (iii) to tolerate an act or situation; any combination of any 2 or more of the matters referred to in paragraphs (a) to (g)." The AAT correctly applied that definition to the Contract as follows36: "The ultimate obligation was of course to transfer title to the purchaser upon payment of the balance of purchase price. But there were other obligations, such as maintaining the property in its present condition (special condition 2.1), to pay all rates, taxes, assessments, fire insurance premiums and other outgoings in respect of the land (Table A, cl 9) and to hold the existing policy of fire insurance for itself and in trust for the purchaser to the extent of their respective interests (Table A, cl 10). In the circumstances it may fairly be said that upon execution of the contract the applicant made a supply in that, in terms of s 9-10(2)(g) of [the Act], it 'entered into an obligation' to do the things it was bound to do under the contract ..." Further, as indicated earlier in these reasons, and within the meaning of par (d) of s 9-10(2) as extended by the definition of "real property", there was upon exchange of contracts the grant by the taxpayer to the purchaser of contractual rights exercisable over or in relation to land, in particular of the right to require in due course conveyance of the land to it upon completion of the sale. 36 (2006) 63 ATR 1001 at 1006; 2006 ATC 2206 at 2210-2211. Crennan The lack of temporal coincidence between "supply" and "consideration" was dealt with by s 99-10 as follows: Attributing the GST relating to deposits that are forfeited etc. The GST payable by you on a *taxable supply for which the *consideration is a deposit that was held as security for the performance of an obligation is attributable to the tax period during which the deposit: is forfeited because of a failure to perform the obligation; or is applied as all or part of the consideration for a supply. This section has effect despite section 29-5 (which is about attributing GST for taxable supplies)." Thus the GST was attributable to the tax period in which the deposit was forfeited. Section 9-5 provides that "you", here, the taxpayer, make a taxable supply if "you make the supply for *consideration". The supply was made in advance of that failure by the purchaser in performance of the executory terms of the Contract which led to the forfeiture of the deposit to the taxpayer. But, as s 99-10 makes plain, the GST was attributable to the tax period within which the forfeiture occurred. Upon forfeiture to the taxpayer of the deposit, by reason of the failure by the purchaser to complete the Contract, the "supply" represented by the making of the Contract became "a taxable supply". Division 99 draws within the one regime the consequences of forfeiture of a deposit where there is no completion and of the application of a deposit towards the purchase price paid upon completion. It may be accepted that, as the taxpayer contends, the structure of Div 99 gives rise to an issue of construction where a contract does proceed to completion. Is there not then a "second supply", in addition to the making of the contract, which is represented by the conveyance to the purchaser? However, upon the proper construction of the Act no question of two "taxable supplies" arises in that situation. The deposit is not treated as Crennan consideration for a supply (and therefore there is no taxable supply) unless, in the case of a sale that proceeds from contract to completion, it is applied (as normally it is on completion) as all or (more usually) part of the purchase price. If and when it happens that the deposit is applied as part (or all) of the consideration for the transfer of the land then the GST is attributable to the tax period during which that occurs, and there is only one taxable supply. Orders The appeal should be allowed. Orders 1 and 2 made by the Full Court of the Federal Court on 5 July 2007 should be set aside and in place thereof the appeal to that Court should be dismissed. In accordance with the terms of the grant of special leave the Commissioner must bear the costs to the taxpayer of the appeal to this Court and the costs order made by the Full Court is not disturbed.

HIGH COURT OF AUSTRALIA Matter No M27/2020 MINISTER FOR HOME AFFAIRS & ORS APPELLANTS AND FOR DLZ18 & ANOR RESPONDENTS Matter No M28/2020 MINISTER FOR HOME AFFAIRS & ANOR APPELLANTS AND MARIE THERESA ARTHUR AS LITIGATION REPRESENTATIVE FOR BXD18 RESPONDENT Matter No M29/2020 MINISTER FOR HOME AFFAIRS & ANOR APPELLANTS AND FRX17 AS LITIGATION REPRESENTATIVE FOR FRM17 RESPONDENT Matter No M30/2020 MINISTER FOR HOME AFFAIRS & ANOR APPELLANTS AND DJA18 AS LITIGATION REPRESENTATIVE FOR DIZ18 RESPONDENT Minister for Home Affairs v DMA18 as litigation guardian for DLZ18 Minister for Home Affairs v Marie Theresa Arthur as litigation representative for BXD18 Minister for Home Affairs v FRX17 as litigation representative for FRM17 Minister for Home Affairs v DJA18 as litigation representative for DIZ18 [2020] HCA 43 Date of Hearing: 1 September 2020 Date of Judgment: 2 December 2020 M27/2020, M28/2020, M29/2020 & M30/2020 ORDER In each of Matter Nos M27/2020 and M29/2020: Appeal allowed. Set aside paragraph 1 of the orders made by the Full Court of the Federal Court of Australia on 28 August 2019 and, in its place, order: The questions ordered determined as follows: to be separately answered be Questions: (a) When the proceeding was commenced in the Federal Court of Australia, was the effect of s 494AB of the Migration Act 1958 (Cth) that it could not be instituted? and Is the effect of s 494AB of the Migration Act 1958 (Cth) that the proceeding cannot be continued in the Federal Court of Australia? Answers: (a) No, but the respondents, if so advised, could have sought, in an appropriate case, to plead that s 494AB applied to the proceeding; and (b) No, but the respondents, if so advised, may seek to plead that s 494AB applies to the proceeding and, if permitted to do so, may apply for an order that continuation of the framed be stayed. Whether proceedings as amendment of pleadings should be allowed or a stay granted are matters to be determined." then In each of Matter Nos M28/2020 and M30/2020: Appeal allowed. Cross-appeal dismissed. Set aside paragraph 1 of the orders made by the Full Court of the Federal Court of Australia on 28 August 2019 and, in its place, order: The questions ordered determined as follows: to be separately answered be Questions: (a) When the proceeding was commenced in the Federal Court of Australia, was the effect of s 494AB of the Migration Act 1958 (Cth) that it could not be instituted? and Is the effect of s 494AB of the Migration Act 1958 (Cth) that the proceeding cannot be continued in the Federal Court of Australia? Answers: (a) No, but the respondents, if so advised, could have sought, in an appropriate case, to plead that s 494AB applied to the proceeding; and (b) No, but the respondents, if so advised, may seek to plead that s 494AB applies to the proceeding and, if permitted to do so, may apply for an order that continuation of the proceedings as framed be stayed. Whether amendment of pleadings should be allowed or a stay granted are matters to be determined." then On appeal from the Federal Court of Australia Representation S P Donaghue QC, Solicitor-General of the Commonwealth, with C J Tran and A P Yuile for the appellants in all matters (instructed by Australian Government Solicitor) G M Watson SC with D H Tang for the respondents in M27/2020 (instructed by National Justice Project) C J Horan QC and L G De Ferrari SC with J E Hartley and S Gold for the respondents in M28/2020 and M30/2020 (instructed by Maurice Blackburn Lawyers) G M Watson SC with J P Wheelahan for the respondent in M29/2020 (instructed by National Justice Project) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Minister for Home Affairs v DMA18 as litigation guardian for DLZ18 Minister for Home Affairs v Marie Theresa Arthur as representative for BXD18 Minister for Home Affairs v FRX17 as litigation representative for FRM17 Minister for Home Affairs v DJA18 as litigation representative for DIZ18 litigation Immigration – Regional processing – Statutory bar on legal proceedings – Where s 494AB(1) of Migration Act 1958 (Cth) provided that certain "proceedings against the Commonwealth may not be instituted or continued in any court" – Where those proceedings, listed in s 494AB(1)(a)-(d), were all "proceedings relating to" a particular subject matter – Where proceedings in s 494AB(1)(b) further defined by reference to time period – Where s 494AB(3) provided that nothing in section intended to affect jurisdiction of High Court under s 75(v) of Constitution – Where respondents, while in regional processing country, instituted proceedings in Federal Court of Australia alleging Commonwealth breached duty of care to provide adequate medical treatment on Nauru – Where Commonwealth alleged Federal Court did not have jurisdiction by reason of s 494AB(1)(a), (ca) or (d) – Whether s 494AB(1) limited jurisdiction or barred remedy – Whether respondents' proceedings in Federal Court engaged s 494AB(1). Words and phrases – "bars the remedy", "duty of care", "instituted or continued", "jurisdiction", "medical treatment", "model litigant", "model litigant obligations", "Nauru", "negligence", "plead as a defence", "proceedings against the Commonwealth", "proceedings relating to", "regional processing", "removal", "transitory person", "under". Constitution, ss 75, 77. Migration Act 1958 (Cth), ss 198AB, 198AD, 198AH, 198AHA, 198B, 494AA, KIEFEL CJ, BELL, GAGELER, KEANE AND GORDON JJ. Each respondent, while in a country designated a regional processing country1 under s 198AB(1) of the Migration Act 1958 (Cth), instituted proceedings in the Federal Court of Australia alleging, in various ways, that the appellants, the Minister for Home Affairs and the Commonwealth of Australia ("the Commonwealth")2, breached a duty of care to provide them with adequate medical treatment on Nauru. At least part of the relief sought was to compel the Commonwealth to provide adequate medical treatment. After the proceedings were instituted, each respondent was transferred to Australia for the temporary purpose of receiving medical treatment. These appeals are not concerned with whether the respondents were owed the pleaded duty of care or whether that duty, if owed, was breached. The issue in each appeal is the proper construction and application of s 494AB of the Migration Act, headed "Bar on certain legal proceedings relating to transitory persons". There was no dispute that each respondent was and is a transitory person3. Section 494AB provides that: "(1) The following proceedings against the Commonwealth may not be instituted or continued in any court: proceedings relating to the exercise of powers under section 198B; 1 Migration Act 1958 (Cth), s 5(1) definition of "regional processing country". In the FRM17 proceeding in the Federal Court, the named respondents were the Minister for Immigration and Border Protection, the Commonwealth of Australia and the Secretary of the Department of Immigration and Border Protection. The Secretary is not an appellant in this Court. In the DLZ18 matter, the Secretary of the Department of Home Affairs was a named respondent in the Federal Court and is also an appellant in this Court. 3 A "transitory person" includes a person who was taken to a regional processing country under s 198AD of the Migration Act, or the child of such a person if the child was born in a regional processing country to which the parent was taken and the child was not an Australian citizen at the time of birth: Migration Act, s 5(1) paras (aa) and (d) of the definition of "transitory person". Bell Gordon proceedings relating to the status of a transitory person as an unlawful non-citizen during any part of the ineligibility period; proceedings relating to the detention of a transitory person who is brought to Australia under section 198B, being a detention based on the status of the person as an unlawful non-citizen; (ca) proceedings relating to the performance or exercise of a function, duty or power under Subdivision B of Division 8 of Part 2 in relation to a transitory person; proceedings relating to the removal of a transitory person from Australia under this Act. This section has effect despite anything else in this Act or any other law. (3) Nothing in this section is intended to affect the jurisdiction of the High Court under section 75 of the Constitution. In this section: Commonwealth includes: an officer of the Commonwealth; and any other person acting on behalf of the Commonwealth. ineligibility period means the period from the time when the transitory person was brought to Australia under section 198B until the time when the person next ceases to be an unlawful non-citizen." The question of construction which arises is the legal effect and reach of s 494AB. Section 494AB applies to the institution or continuation of some proceedings in federal jurisdiction conferred on federal courts under s 77(i) of the Constitution, and invested in State courts under s 77(iii), by a law of the Commonwealth. As these reasons will explain, s 494AB is not a law that takes away the jurisdiction of those courts (or that of this Court) to hear and determine proceedings of the kinds described in s 494AB(1). It does not limit the authority Bell Gordon of those courts (or the High Court of Australia4) to decide those specific claims but provides the Commonwealth with an available answer to those claims if they are made in a court other than the High Court. In practical terms, it creates a defence which the Commonwealth may, but need not, plead to specific claims in all courts, except the High Court5. If no practical benefit is to be gained by raising s 494AB, the Commonwealth acting as a model litigant need not and, it may be expected, would not raise it6. In the terms used in relation to statutes of limitations, s 494AB potentially bars the remedy, not the right7. Section 494AB applies only to proceedings against the Commonwealth where one of the issues raised in the proceedings relates to one or more of the subject matters identified in s 494AB(1). Consequently, it is not limited to proceedings in the nature of judicial review but, on the other hand, it is not so wide that it applies to all claims relating to regional processing or a regional processing country. It is a provision which the Commonwealth may plead as a defence where one of the identified subject matters in s 494AB(1) is an issue in that proceeding. Whether one or more of the identified subject matters is raised as an issue in the proceeding will depend on the pleadings viewed in light of the relief claimed or, if there are no pleadings, the application and other documents filed in the proceeding. Migration Act – regional processing regime Section 494AB must be understood and applied in light of the legislative history relating to Australia's regional processing regime. That history shows how and to what extent the legislature has sought to limit the institution and 4 The provision does not apply to the institution or continuation of proceedings in the jurisdiction of the High Court under s 75 of the Constitution: Migration Act, s 494AB(3). See The Commonwealth v Verwayen (1990) 170 CLR 394 at 405-406, 425-426, 456, 473-474, 486-487; The Commonwealth v Mewett (1997) 191 CLR 471 at 534-535. Judiciary Act 1903 (Cth), Pt VIIIC; Legal Services Directions 2017 (Cth), App B. See also Melbourne Steamship Co Ltd v Moorehead (1912) 15 CLR 333 at 342. See, eg, Verwayen (1990) 170 CLR 394 at 405, 426-427, 456, 473-474, 486-487; Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 562; Mewett (1997) 191 CLR 471 at 507, 508-509, 511, 516, 534. Bell Gordon continuation of proceedings relating to regional processing, and informs the conclusion that the scope of s 494AB is limited in the manner described. introduced a In September 2001, following the events concerning the MV Tampa, regime8. the Australian government The combined effect of the Acts9 implementing the regime was that, from late 2001, persons without a visa arriving by boat on Christmas Island (or other excised offshore places) would be detained, unable to validly apply for a visa in Australia while in an excised offshore place10, and subject to removal to a location outside Australia. It is necessary to refer to only one of the Acts passed in 2001. regional processing The Migration Amendment (Excision from Migration Zone) (Consequential Provisions) Act 2001 (Cth) ("the 2001 Act") was said to be intended to provide "the necessary powers for dealing with an unlawful non-citizen who entered Australia at an 'excised offshore place' after the relevant 'excision time'[11] without a visa"12. The 2001 Act relevantly inserted s 494AA into Pt 9 of the Migration Act (a Part headed "Miscellaneous") to "ensure that court proceedings are not used by an 'offshore entry person'[13] to frustrate the resolution of his or her immigration See Ruddock v Vadarlis (2001) 110 FCR 491 at 522-527 [131]-[146]. 9 Border Protection (Validation and Enforcement Powers) Act 2001 (Cth); Migration Amendment (Excision from Migration Zone) Act 2001 (Cth); Migration Amendment (Excision from Migration Zone) (Consequential Provisions) Act 2001 (Cth). 10 Migration Amendment (Excision from Migration Zone) Act, Sch 1, item 1. See also Migration Act, s 5(1) definition of "excised offshore place". 11 Migration Amendment (Excision from Migration Zone) Act, Sch 1, item 2. See also Migration Act, s 5(1) definition of "excision time". 12 Australia, House of Representatives, Migration Amendment (Excision from Migration Zone) (Consequential Provisions) Bill 2001, Explanatory Memorandum 13 Migration Amendment (Excision from Migration Zone) Act, Sch 1, item 3. Following the Migration Amendment (Unauthorised Maritime Arrivals and Other Bell Gordon status, movement to a 'declared country' or to obtain desirable migration outcomes"14. Under s 494AA(1) (as enacted), four types of proceedings against the Commonwealth were not to be instituted or continued in any court: proceedings relating to an offshore entry by an offshore entry person; proceedings relating to the status of an offshore entry person as an unlawful non-citizen during any part of the ineligibility period; proceedings relating to the lawfulness of the detention of an offshore entry person during the ineligibility period, being a detention based on the status of the person as an unlawful non-citizen; proceedings relating to the exercise of powers under section 198A". Section 494AA had effect "despite anything else in this Act or any other law"15 and provided that "[n]othing in this section [was] intended to affect the jurisdiction of the High Court under section 75 of the Constitution"16. "Commonwealth" was defined for the purposes of the section to include "an officer of the Commonwealth" and "any other person acting on behalf of the Commonwealth"17. The "ineligibility period" referred to in s 494AA(1)(b) was defined as "the period from the time of the offshore entry until the time when the person next ceases to Measures) Act 2013 (Cth), the Migration Act now refers to "unauthorised maritime arrivals" instead of "offshore entry persons". 14 Australia, House of Representatives, Migration Amendment (Excision from Migration Zone) (Consequential Provisions) Bill 2001, Explanatory Memorandum 15 Migration Act, s 494AA(2). 16 Migration Act, s 494AA(3). 17 Migration Act, s 494AA(4). Bell Gordon be an unlawful non-citizen"18. As will be apparent, s 494AB, which was enacted in the following year, was in substantially similar form. By 2002, persons without a visa attempting to enter Australia by boat were being taken to Nauru or Papua New Guinea for their protection claims to be assessed19. But there was concern over "a small number of exceptional situations where it may be necessary to bring one of these people removed to another country ('transitory persons') to Australia" for medical treatment or other reasons20. In such situations, it was considered "necessary to ensure that the transitory person's presence in Australia is as short as possible and that action cannot be taken to delay that person's removal from Australia"21. To this end, the Migration Legislation Amendment (Transitional Movement) Act 2002 (Cth) ("the 2002 Act") was passed. The 2002 Act permitted transitory persons to be brought to Australia without a visa for a temporary purpose22. The provisions introduced by the 2002 Act stated that while in Australia, transitory persons were not able to make valid visa applications23. And they provided for the removal of a transitory person from Australia as soon as reasonably practicable after the person's temporary purpose for being in Australia was spent24. 18 Migration Act, s 494AA(4). See also Migration Act, s 14 definition of "unlawful non-citizen". 19 Australia, Senate, Migration Legislation Amendment (Transitional Movement) Bill 2002, Revised Explanatory Memorandum at 2 [4]. 20 Australia, Senate, Migration Legislation Amendment (Transitional Movement) Bill 2002, Revised Explanatory Memorandum at 2 [5]. 21 Australia, Senate, Migration Legislation Amendment (Transitional Movement) Bill 2002, Revised Explanatory Memorandum at 2 [6]. 22 Migration Legislation Amendment (Transitional Movement) Act 2002 (Cth), Sch 1, items 2 and 5. See also Migration Act, ss 42(2A)(ca) and 198B. 23 Migration Legislation Amendment (Transitional Movement) Act, Sch 1, item 3. See also Migration Act, s 46B(1). 24 Migration Legislation Amendment (Transitional Movement) Act, Sch 1, item 4. See also Migration Act, s 198(1A). Bell Gordon The 2002 Act also inserted s 494AB into Pt 925. Section 494AB substantially mirrored s 494AA but applied to transitory persons instead of offshore entry persons. The provision was said to be intended to "stop legal proceedings being taken in relation to the 'transitory person's' presence in Australia"26. The third Act to which reference must be made in tracing the context in which s 494AB operates and must be applied, the Migration Legislation Amendment (Regional Processing and Other Measures) Act 2012 (Cth) ("the 2012 Act"), was enacted ten years later. The 2012 Act made27 substantial amendments to the Migration Act in response to this Court's decision in Plaintiff M70/2011 v Minister for Immigration and Citizenship (Malaysian Declaration Case)28 and key recommendations of the Report of the Expert Panel on Asylum Seekers29. The 2012 Act inserted Subdiv B, headed "Regional processing", into Div 8 of Pt 2 of the Migration Act. The reason for the Subdivision was stated, in part, to be that30: "offshore entry persons, including offshore entry persons in respect of whom Australia has or may have protection obligations under the Refugees 25 Migration Legislation Amendment (Transitional Movement) Act, Sch 1, item 6. 26 Australia, Senate, Migration Legislation Amendment (Transitional Movement) Bill 2002, Revised Explanatory Memorandum at 3 [7]. 27 Australia, Senate, Migration Legislation Amendment (Regional Processing and Other Measures) Bill 2012, Revised Explanatory Memorandum at 2. (2011) 244 CLR 144. 29 Report of the Expert Panel on Asylum Seekers (2012). 30 Migration Legislation Amendment (Regional Processing and Other Measures) Act 2012 (Cth), Sch 1, item 25. See also Migration Act, s 198AA(b). Bell Gordon Convention as amended by the Refugees Protocol[31], should be able to be taken to any country designated to be a regional processing country". Subdivision B of Div 8 of Pt 2 then included, relevantly, ss 198AB, 198AD and Section 198AB(1) provided that "[t]he Minister may, by legislative instrument, designate that a country is a regional processing country". Section 198AD applied to an offshore entry person who was detained under s 18932. Section 198AD(2) provided that "[a]n officer must, as soon as reasonably practicable, take an offshore entry person to whom this section applies from Australia to a regional processing country". Section 198AH concerned the applicability of s 198AD to certain transitory persons brought to Australia for a temporary purpose and, following amendments in 201333 and 201434, relevantly provided: "(1) Section 198AD applies, subject to sections 198AE, 198AF and 198AG, to a transitory person if, and only if, the person is covered by subsection (1A) or (1B). (1A) A transitory person is covered by this subsection if: the person is an unauthorised maritime arrival who is brought to Australia from a regional processing country under section 198B for a temporary purpose; and 31 Convention relating to the Status of Refugees done at Geneva on 28 July 1951 as modified by the Protocol relating to the Status of Refugees done at New York on 31 January 1967. 32 Migration Act, s 198AD(1). Section 198AD(1) was subject to ss 198AE, 198AF and 198AG, which are not presently relevant. 33 Migration Amendment (Unauthorised Maritime Arrivals and Other Measures) Act, Sch 1, items 43-47. The amendments included substituting "offshore entry person" with "unauthorised maritime arrival". 34 Migration and Maritime Powers Legislation Amendment (Resolving the Asylum Legacy Caseload) Act 2014 (Cth), Sch 6, item 9. Bell Gordon the person is detained under section 189; and the person no longer needs to be in Australia for the temporary purpose (whether or not the purpose has been achieved). (1B) A transitory person (a transitory child) is covered by this subsection a transitory person covered by subsection (1A) gives birth to the transitory child while in Australia; and the transitory child is detained under section 189; and the transitory child is a transitory person because of paragraph (e) of the definition of transitory person in subsection 5(1). Subsection (1) of this section applies whether or not the transitory person has been assessed to be covered by the definition of refugee in Article 1A of the Refugees Convention as amended by the Refugees Protocol." The 2012 Act also inserted ss 494AA(1)(e) and 494AB(1)(ca) into the Migration Act, which, in substantially identical terms, expanded the kinds of proceedings dealt with by ss 494AA and 494AB respectively to include "proceedings relating to the performance or exercise of a function, duty or power under Subdivision B of Division 8 of Part 2" in relation to an offshore entry person (s 494AA(1)(e)) or a transitory person (s 494AB(1)(ca)). The effect of these amendments, when read with the new Subdiv B, was said to be that proceedings against the Commonwealth relating to any performance or exercise of a function, duty or power under Subdiv B, in relation to an offshore entry person or a transitory person, could not be instituted or continued in any court35. The Revised 35 Australia, Senate, Migration Legislation Amendment (Regional Processing and Other Measures) Bill 2012, Revised Explanatory Memorandum at 34 [251], Bell Gordon Explanatory Memorandum went on to record that the amendment did not affect the jurisdiction of the High Court under s 75 of the Constitution36. Three years later, in 2015, shortly before the hearing of Plaintiff M68/2015 v Minister for Immigration and Border Protection37 in this Court, the Migration Act was further amended by the Migration Amendment (Regional Processing Arrangements) Act 2015 (Cth) ("the 2015 Act") "to provide statutory authority ... where the Commonwealth has entered into an arrangement with another country with respect to the regional processing functions of that country"38. The 2015 Act inserted s 198AHA into Subdiv B of Div 8 of Pt 239. Section 198AHA provided as follows: "(1) This section applies into an arrangement with a person or body in relation to the regional processing functions of a country. the Commonwealth enters The Commonwealth may do all or any of the following: take, or cause to be taken, any action in relation to the arrangement or the regional processing functions of the country; (b) make payments, or cause payments to be made, in relation to the arrangement or the regional processing functions of the country; do anything else that is incidental or conducive to the taking of such action or the making of such payments. 36 Australia, Senate, Migration Legislation Amendment (Regional Processing and Other Measures) Bill 2012, Revised Explanatory Memorandum at 34-35 [251], (2016) 257 CLR 42. 38 Australia, House of Representatives, Migration Amendment (Regional Processing Arrangements) Bill 2015, Explanatory Memorandum at 2. 39 Section 198AHA was inserted with retrospective effect from 18 August 2012: Migration Amendment (Regional Processing Arrangements) Act 2015 (Cth), s 2(1). Bell Gordon To avoid doubt, subsection (2) is intended to ensure that the Commonwealth has capacity and authority take action, without otherwise affecting the lawfulness of that action. (4) Nothing in this section limits the executive power of the Commonwealth. In this section: action includes: exercising restraint over the liberty of a person; and action in a regional processing country or another country. arrangement includes an arrangement, agreement, understanding, promise or undertaking, whether or not it is legally binding. regional processing functions includes the implementation of any law or policy, or the taking of any action, by a country in connection with the role of the country as a regional processing country, whether the implementation or the taking of action occurs in that country or another country." The 2015 Act did not amend s 494AA or s 494AB or any other provision in Subdiv B. But, as is self-evident, because s 198AHA was in Subdiv B, it became relevant when considering the application of s 494AB(1)(ca). Full Court of the Federal Court the Full Court of the present matters, the Federal Court (Kenny, Robertson and Griffiths JJ) determined what was described as the jurisdictional issue as separate questions before any other question in the proceedings. The questions were whether the effect of one or more of s 494AB(1)(a), (ca) and (d) was that each proceeding: (1) could not be instituted in the Federal Court; and (2) could not be continued in the Federal Court. Bell Gordon In the cases of FRM17 and DLZ18, the Full Court answered both questions "No"40. In the case of BXD18, the Full Court also answered the first question "No" but answered the second question "Yes" on the basis that para (d) applied to the proceeding as continued. In the fourth case, DIZ18, the Full Court answered "Yes" to both questions. In that case, the Full Court held that para (a) applied to the institution of the proceeding and para (d) applied to the continuation of the proceeding. As noted above, argument in the Full Court proceeded on the basis that s 494AB was to be understood as limiting the jurisdiction of the Federal Court and, indeed, of all courts except the High Court. That is, argument in the Full Court treated s 494AB as defining the Federal Court's jurisdiction41 by limiting or withdrawing the Federal Court's authority to decide the respondents' claims. In relation to s 494AB(1)(ca), the Full Court found that there was no relevant intersection between ss 494AB(1)(ca) and 198AHA. It held that s 198AHA "confers a bare capacity that enables the Commonwealth to be conferred with powers or functions or duties under the laws of a regional processing country", and that "a capacity, by its very nature, is to be distinguished from a power". Thus, the Full Court held that because s 198AHA was limited to a "statutory capacity" or "bare authority" to engage in activities, and did not confer any function, duty or power, the exercise of that capacity did not engage s 494AB(1)(ca). The Full Court further held that even if the language of s 494AB(1)(ca) was wide enough to include a bare "statutory capacity", that would not create an intersection with s 198AHA because actions authorised by s 198AHA would not be performed "under" Subdiv B in the relevant sense. The Full Court concluded that, on its proper construction, s 494AB(1)(ca): "requires more than that acts are pleaded which constitute, or are claimed to constitute, a valid exercise or performance of a relevant function, duty or power. The proposition that the pleaded acts were authorised should, at least, have some direct legal consequence in the case. Or, to put it another way, the rights and duties sought to be determined in the proceedings should arise from the conferral or imposition by the Migration Act of the relevant 40 The Full Court held that in the case of FRM17, none of paras (a), (ca) and (d) were engaged, while in the case of DLZ18, neither of paras (a) and (ca) were engaged and it was not necessary to consider para (d) as it was not pleaded. 41 Constitution, s 77(i). Bell Gordon powers, functions or duties, through the medium of their exercise or performance." Hence, the Full Court held that s 494AB(1)(ca) did not apply to any of the four proceedings because: actions authorised by s 198AHA were not actions performed under Subdiv B; the duty under s 198AD(2) to take an unauthorised maritime arrival to a regional processing country says nothing about any common law duty of care owed to such a person after they are so taken; and there was no inconsistency between the pleaded duties of care and the purpose of Subdiv B as reflected in s 198AA. The Full Court dealt with s 494AB(1)(a) and (d) together. At the outset, the Full Court observed that the respondents were all brought to Australia under s 198B of the Act. In relation to s 494AB(1)(a), the Full Court held that FRM17, DLZ18 and BXD18 did not in terms invoke the power in s 198B or seek that it be exercised, and did not obtain an order requiring the Commonwealth to exercise that power. The Full Court said that those respondents did not challenge any exercise of the power in s 198B or plead a case in negligence arising from a statutory duty conditioning the exercise of that power. By contrast, the Full Court found that DIZ18 had expressly sought an interlocutory order requiring the Commonwealth to transfer her and her mother to a location in Australia, reasoning that while s 198B was not the only power pursuant to which the Commonwealth might bring a transitory person to Australia from a place outside Australia, the statutory scheme contemplates that s 198B confers the power usually to be exercised in such a case. The Full Court therefore concluded that s 494AB(1)(a) applied to DIZ18's proceeding but did not apply to the proceedings of FRM17, DLZ18 and BXD18. In relation to s 494AB(1)(d), the Full Court held that it did not apply to FRM17's proceeding because no issue of removal had arisen, the proceeding did not challenge any determination under s 198AH(1A)(c) that she no longer needs to be in Australia for a temporary purpose within the meaning of s 198B, and the claim for a permanent longer pressed. For DLZ18, the Commonwealth's pleadings did not refer to or rely upon s 494AB(1)(d). Accordingly, the Full Court held that it was unnecessary to consider that provision in relation to her proceeding. For BXD18, the Full Court held that because an injunction against removal from Australia was sought in BXD18's amended injunction was no Bell Gordon pleadings, the proceeding related to her removal from Australia under the Migration Act. Similarly, for DIZ18, the Full Court held that because DIZ18 sought an injunction requiring the Commonwealth to take steps to ensure she received the required standard of care, this proceeding related to her removal from Australia under the Migration Act. The Full Court therefore concluded that the proceedings of BXD18 and DIZ18, as then continued, attracted the operation of s 494AB(1)(d). Section 494AB is not jurisdictional As foreshadowed earlier in these reasons, s 494AB does not limit the jurisdiction of any court. That conclusion is grounded in the established principle that "a law of the Commonwealth is not to be interpreted as withdrawing or limiting a conferral of jurisdiction unless the implication appears clearly and unmistakably"42. instituted or continued Section 494AB(1) provides that certain "proceedings against the Commonwealth may not be in any court". Those proceedings, listed in s 494AB(1)(a)-(d), are all described as "proceedings relating to" a particular subject matter. In the case of s 494AB(1)(b), the proceedings are further identified by reference to a time period ("during any part of the ineligibility period"). But s 494AB(1) is not expressly framed as defining43 or taking away jurisdiction. It does not say that identified courts other than the High Court have no jurisdiction in relation to the listed kinds of proceedings44. Nor does it identify a single, broad subject matter such as "all claims relating to regional processing". To provide, as s 494AB does, that certain "proceedings against the Commonwealth may not be instituted or continued in any court" does not, in its terms, or by a clear and unmistakeable implication45, take away jurisdiction otherwise conferred on federal courts or invested in State courts. It is not a law made in exercise of the powers given by either s 77(i) or (ii) of the Constitution. 42 Shergold v Tanner (2002) 209 CLR 126 at 136 [34]. 43 Constitution, s 77(i) and (ii). 44 cf Migration Act, ss 476(2), 476A, 484. 45 See Shergold (2002) 209 CLR 126 at 136 [34]. Bell Gordon Indeed, the word "jurisdiction" is used only in s 494AB(3), which states that "[n]othing in this section is intended to affect the jurisdiction of the High Court under section 75 of the Constitution". This sub-section is not to be read as implying that other provisions in s 494AB affect the jurisdiction of any court other than the High Court. Rather, by confirming that the High Court's s 75 jurisdiction is unaffected, s 494AB(3) promotes a constitutionally valid construction of s 494AB such that s 494AB does not impinge on the exercise of the High Court's jurisdiction under s 75, including its jurisdiction not only under s 75(v) but also under the other provisions of s 75. It is significant, too, that the heading to s 494AB is "Bar on certain legal proceedings relating to transitory persons". The choice of the word "[b]ar" is consistent with the language of cases that contrast a bar to a remedy with the extinguishment of a cause of action46. Its use suggests an intention that the provision have the features of a bar to a remedy. And, as has long been established in relation to provisions fixing a limitation period on the bringing of a cause of action, a statutory bar does not extinguish a right or underlying cause of action or affect a court's jurisdiction47. Adopting and adapting the words of Gummow and Kirby JJ in The Commonwealth v Mewett48, citing The Commonwealth v Verwayen49: "a statutory bar ... does not go to the jurisdiction of the court to entertain the claim but to the remedy available and hence to the defences which may be pleaded. The cause of action has not been extinguished. Absent an appropriate plea, the matter of the statutory bar does not arise for the consideration of the court." 46 Verwayen (1990) 170 CLR 394 at 405, 456, 486; Mewett (1997) 191 CLR 471 at 47 See fn 7 above. (1997) 191 CLR 471 at 534. (1990) 170 CLR 394 at 473-474. Bell Gordon The consequence of characterising a provision as a bar to a remedy, rather than a limitation on jurisdiction, is that it is for the defendant to raise the point by pleading the provision50. This is not to overlook that s 494AB(2) provides that the section "has effect despite anything else in this Act or any other law". But the meaning of s 494AB(2) depends upon determining what is the effect of the section. And that drives the inquiry back to construing sub-s (1). Moreover, nothing in s 494AB affects this Court's jurisdiction. Thus, claims of the kinds identified in s 494AB(1) are able to be brought in this Court. Section 494AB provides no answer to such a claim. And, once it is accepted, as the Commonwealth did, that proceedings instituted in this Court in relation to the matters identified in s 494AB(1) could be (and ordinarily would be) remitted to another court51 for hearing and determination without s 494AB providing an answer to the claim, the better and more workable construction of s 494AB is that it does not limit the jurisdiction of federal courts or limit the federal jurisdiction invested in State courts. So construing s 494AB as a statutory bar avoids the High Court being made a post box for the commencement of proceedings destined to be remitted to another court. It avoids diverting the High Court away from its central work as the apex court of the Australian judicial system. And, further, it avoids administrative inconveniences for the courts, the profession and litigants in circumstances where the Commonwealth could not identify any purpose or utility in requiring the proceedings to be filed in the High Court only for them to be remitted. In the result, it is to be concluded that s 494AB provides for an answer (analogous to a time bar) which the Commonwealth may plead to a claim of a kind identified in s 494AB, when and if pleading the answer would be consistent with its model litigant obligations52. If, however, the only consequence of the plea were 50 See fn 5 above. 51 Judiciary Act, s 44. See also Plaintiff S156/2013 v Minister for Immigration and Border Protection (2014) 254 CLR 28 at 41-42 [20]. 52 Judiciary Act, Pt VIIIC; Legal Services Directions 2017 (Cth), App B. See also Melbourne Steamship (1912) 15 CLR 333 at 342; Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345 at 406-407 [147]-[152]. Bell Gordon to be that fresh proceedings would be instituted in this Court (and then remitted), then it seems improbable that pleading the section would be consistent with the obligations of a model litigant53. Similarly, if a consequence of the plea were that fresh proceedings in this Court would be time barred, that would be a matter that would affect the Commonwealth's model litigant obligations in pleading s 494AB54. The intervention of a time bar might also bear on whether, if leave to amend the Commonwealth's pleadings to plead s 494AB were needed, that leave should be granted, as well as the determination of any consequential application for a stay. Reach of s 494AB(1) The question of construction which then arises is the reach of s 494AB(1) and, in particular, the reach of s 494AB(1)(a), (ca) and (d). Parties' submissions The Commonwealth submitted that s 494AB(1)(ca) applied because each proceeding related to the performance of the duty to remove under s 198AD and the taking of actions under s 198AHA. In this respect, the Commonwealth argued that the Full Court made three errors. First, the Full Court erred in finding that there was no intersection between ss 198AHA and 494AB(1)(ca). Contrary to the Full Court's reasoning, it was contended that a proceeding can relate to a "function, duty or power" within the meaning of s 494AB(1)(ca) because it takes as its factual substratum various actions of the Commonwealth under s 198AHA, or because s 198AHA is a necessary ingredient of the validity of actions taken by the Commonwealth. The words "function, duty or power" are not intended to exclude other kinds of actions engaged in by the executive. Second, the Full Court erred in finding that actions are only "under" a provision of Subdiv B if that provision has the capacity to affect rights. Third, the Full Court erred in finding that s 494AB(1)(ca) did not apply to common law negligence claims, as that approach gave an unjustifiably narrow reading to the words "relating to" and was not plausible as a matter of policy. In relation to s 494AB(1)(a), the Commonwealth submitted that it applied because each proceeding related to the exercise of the power in s 198B to bring a transitory person to Australia for a temporary purpose and that was sufficient for 53 See Legal Services Directions 2017 (Cth), App B, paras 2(a), 2(d)-2(g). 54 See Legal Services Directions 2017 (Cth), App B, para 2(a). Bell Gordon the proceedings to engage s 494AB(1)(a). The Commonwealth further submitted that s 494AB(1)(d) applied because each proceeding expressly or impliedly sought orders which in substance would prevent the respondents' removal to Nauru under s 198AD, and relief which intercepts the duty under s 198AD is sufficient to engage s 494AB(1)(d). The respondents split into two cohorts. DLZ18 and FRM17 submitted that the respondents' claims are properly characterised as common law negligence claims which do not invoke, rely upon or depend upon the Migration Act and thus there is no intersection between the respondents' proceedings and the specific subject matters in s 494AB(1). BXD18 and DIZ18 made different submissions55. They submitted that the Full Court erred in construing s 494AB(1)(a) and (d) as applying to proceedings beyond those that challenged the exercise of a relevant statutory power, or asserted a duty to exercise that statutory power, or sought to enforce the performance of a relevant duty. Thus, they contended that the Full Court erred in concluding that s 494AB(1)(a) applied to DIZ18's proceeding because it was "relating to the exercise of powers under s 198B" in circumstances where: DIZ18 did not invoke s 198B in her application; no order was made requiring DIZ18's transfer to Australia, whether invoking s 198B or otherwise; and s 198B was not the only power pursuant to which DIZ18 might have been brought to Australia. In relation to s 494AB(1)(d), they contended that the Full Court erred in concluding that for BXD18 and DIZ18 to seek, among other relief, an injunction against their removal from Australia which was not predicated on a challenge to an exercise or non-exercise of power, and did not seek to enforce the performance of a statutory duty, had the result that the proceedings were properly to be characterised as "relating to the removal of [the respondents] from Australia under this Act". In relation to s 494AB(1)(ca), in addition to seeking to uphold the Full Court's findings, BXD18 and DIZ18 contended56 that s 494AB(1)(ca) applied only 55 BXD18 filed a notice of contention seeking to challenge the Full Court's construction of s 494AB(1)(a) and a notice of cross-appeal seeking to challenge the Full Court's construction of s 494AB(1)(d). DIZ18 filed a notice of cross-appeal seeking to challenge the Full Court's construction of s 494AB(1)(a) and (d). 56 BXD18's notice of contention and DIZ18's notice of cross-appeal sought to challenge the Full Court's construction of s 494AB(1)(ca). Bell Gordon to proceedings that challenged the exercise of a relevant statutory power, asserted a duty to exercise that statutory power, or sought to enforce the performance of a relevant duty. Application of s 494AB(1) The stated purpose of s 494AB, as enacted, was to "stop legal proceedings being taken in relation to the 'transitory person's' presence in Australia"57, to the extent constitutionally possible58. The 2012 Act and the 2015 Act expanded the kinds of proceedings to which s 494AB applied59 and restated that the purpose of s 494AB was that certain kinds of proceedings could not be instituted or continued in any court, except the High Court60. The Commonwealth accepted, however, that s 494AB, whether in the form in which it was enacted, or as it now stands, did not achieve that stated purpose. But of course, although the text cannot be construed by reference to that stated purpose, s 494AB must still be given meaning and operation, consistent with the text and structure of the Act61. Each paragraph of s 494AB(1) is directed to "proceedings relating to" an identified subject matter. The phrase "relating to", in each paragraph of s 494AB(1), directs attention to the connection between the "proceedings" and the subject matter of the paragraph. This Court has often said that the phrase "relating to" is one of wide import62. It can refer to a direct or indirect connection 57 Australia, Senate, Migration Legislation Amendment (Transitional Movement) Bill 2002, Revised Explanatory Memorandum at 3 [7]. See [11]-[12] above. 58 cf DBE17 v The Commonwealth (2018) 265 FCR 600 at 627 [128]. 59 See [13]-[18] above. 60 Australia, Senate, Migration Legislation Amendment (Regional Processing and Other Measures) Bill 2012, Revised Explanatory Memorandum at 35 [255], [257]. 61 Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 518. 62 Tooheys Ltd v Commissioner of Stamp Duties (NSW) (1961) 105 CLR 602 at 620-621; Fountain v Alexander (1982) 150 CLR 615 at 629; Perlman v Perlman (1984) 155 CLR 474 at 489; O'Grady v Northern Queensland Co Ltd (1990) 169 CLR 356 at 365, 367, 374, 376; PMT Partners Pty Ltd (In liq) v Australian National Parks and Wildlife Service (1995) 184 CLR 301 at 330; North Sydney Council v Ligon 302 Pty Ltd (1996) 185 CLR 470 at 478-479; Bell Gordon between two subject matters63, and one subject matter can "relate to" another subject matter even though the first subject matter also relates to other things64. The degree of connection required between two subject matters joined by the words "relating to" is ordinarily to be determined by reference to the text, context, legislative purpose and history of the provision, and, of course, the facts of the case65. Here, it is the text of s 494AB(1), read in its statutory context, that provides the surest guide66. It is the need for a connection between a proceeding and one of the identified subject matters that imposes the limit on the operation of the provision. Subject to that, however, its operation is not restricted to identified kinds of claims or causes of action, or to claims for particular forms of relief. Thus, the section does not exclude all common law negligence cases against the Commonwealth. For the same reason, s 494AB is not confined in its application to proceedings in the nature of judicial review67. That conclusion follows from the text of the provision but is reinforced by the fact that s 494AB is concerned with Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 387 [87]; Airservices Australia v Canadian Airlines International Ltd (1999) 202 CLR 133 at 219-220 [242]-[243]; Kennon v Spry (2008) 238 CLR 366 at 440 63 O'Grady (1990) 169 CLR 356 at 376-377; Airservices Australia (1999) 202 CLR 64 Project Blue Sky (1998) 194 CLR 355 at 387 [87]. 65 Tooheys (1961) 105 CLR 602 at 620-621; O'Grady (1990) 169 CLR 356 at 376; PMT Partners (1995) 184 CLR 301 at 313, 330; North Sydney Council (1996) 185 CLR 470 at 478-479; Project Blue Sky (1998) 194 CLR 355 at 387 [87]; Kennon (2008) 238 CLR 366 at 440 [218]; Travelex Ltd v Federal Commissioner of Taxation (2010) 241 CLR 510 at 519-520 [25]. See also Bodruddaza v Minister for Immigration and Multicultural Affairs (2007) 228 CLR 651 at 662 [22]. 66 Certain Lloyd's Underwriters v Cross (2012) 248 CLR 378 at 388-389 [23]-[24], citing, among others, Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 46-47 [47]. 67 cf Migration Act, Pt 8. See also DBE17 v The Commonwealth (2019) 266 CLR 156 Bell Gordon proceedings against the "Commonwealth". By s 494AB(4), "Commonwealth" is given an extended meaning and includes not only officers of the Commonwealth but also "any other person acting on behalf of the Commonwealth". It is also to be observed that s 494AB(3) acknowledges this Court's jurisdiction under s 75 of the Constitution generally, not just under s 75(v). But s 494AB does not in its terms apply to any and every proceeding relating to regional processing. Nor is s 494AB confined to: proceedings which challenge to exercise, power; proceedings which challenge the validity or scope of provisions of the Migration Act; or proceedings in which the Migration Act is expressly invoked or relied upon. threatened exercise of, or failure the actual or Where, however, the section applies by reference to actions taken under s 198B or Subdiv B of Div 8 of Pt 2 of the Migration Act (as in s 494AB(1)(a) and (ca), respectively), there is no textual basis for excluding from its reach some actions relating to that provision or Subdivision, but not others. Where Subdiv B authorises the Commonwealth to take certain actions – as in the case of s 198AHA – the taking of such actions will be "under" that Subdivision in the relevant sense. The legislative text and context do not require some further inquiry into whether the actions taken under Subdiv B also had the capacity to, or did, affect legal rights. To reason, as the Full Court did, that actions are only "under" a provision or subdivision if they have the capacity to affect rights would be to import a test formulated in the context of legislation conferring a right to judicial review68, a very different statutory context. For the reasons earlier explained, the application of s 494AB is to be determined by asking whether one of the identified subject matters in s 494AB(1) is raised as an issue for determination by a court. And as explained, whether one or more of the identified subject matters is an issue will depend on the pleadings viewed in light of the relief claimed or, if there are no pleadings, the application and other documents filed in the proceeding. It remains to say something further about each of s 494AB(1)(a), (ca) and (d). 68 See Griffith University v Tang (2005) 221 CLR 99. Bell Gordon Section 494AB(1)(a) Where proceedings are brought in which the transfer of a transitory person to Australia under s 198B of the Act is raised as an issue between the parties, they will be "proceedings relating to" the exercise of powers under s 198B and attract the operation of s 494AB(1)(a). In deciding that there is an issue between the parties attracting s 494AB(1)(a), it will not always be necessary for s 198B to be expressly identified in the pleadings (or if there are no pleadings, the application and other filed documents). But the issue must be raised for determination by the court. BXD18's argument that s 198B is not the only power under which a transitory person could be brought to Australia – there being a class of temporary visas to travel to, enter and remain in Australia, issued under s 33 of the Migration Act and known as special purpose visas – does not detract from the conclusion that the proceedings relate to the exercise of powers under s 198B. Rather, as the Commonwealth submitted, s 198B is the specific power enacted for the precise purpose of bringing a transitory person to Australia. Under s 33 of the Migration Act, a non-citizen is taken to have been granted a special purpose visa if that non-citizen has a prescribed status69 or the Minister makes a written declaration that the non-citizen is taken to have been granted such a visa70. There was nothing to suggest that s 33 was available or otherwise engaged in the circumstances of these matters. The significance of there being an issue about the exercise of powers under s 198B is illustrated by the case of DLZ18. There, an interlocutory application71 sought an order that DLZ18, a transitory person, be immediately transferred "to a location where [the Commonwealth] can obtain for [her] urgent paediatric physical and psychiatric care". DLZ18 was brought to Australia without the application being determined. The Commonwealth could have raised s 494AB(1)(a) by way 69 Migration Act, s 33(2)(a) read with Migration Regulations 1994 (Cth), reg 2.40. 70 Migration Act, s 33(2)(b). 71 DLZ18 also filed an originating application seeking orders, among others, that the Commonwealth obtain for her urgent paediatric physical and psychiatric care, where that care is not provided to her on Nauru or in any other offshore environment. Bell Gordon of defence but did not. Thereupon there ceased to be an issue in the proceeding that related to the exercise of powers under s 198B. Section 494AB(1)(d) Similarly, where proceedings are brought in which the removal of a transitory person from Australia other than in the manner ordinarily contemplated under the Migration Act72 is an issue, they will be "proceedings relating to" the removal of a transitory person under the Act for the purposes of s 494AB(1)(d). For example, BXD18's amended originating application and statement of claim sought, among other relief, an injunction preventing the removal of her and her family from Australia until they could be resettled in a country that is a signatory to the Refugees Convention. The relief was sought on grounds which included that BXD18 suffered injury, loss and damage because of the Commonwealth's failure to remove BXD18 from Nauru or the Commonwealth's decision to continue to keep BXD18 and her family on Nauru. Her claim, if made out, would preclude her removal from Australia in the manner ordinarily contemplated under the Migration Act. That proceeding attracts s 494AB(1)(d). Section 494AB(1)(ca) Finally, it is necessary to say something about s 494AB(1)(ca) – "proceedings relating to the performance or exercise of a function, duty or power under Subdivision B of Division 8 of Part 2 in relation to a transitory person". It is unnecessary to attempt to mark the metes and bounds of s 494AB(1)(ca). It is desirable, however, to say something about s 198AD (read with s 198AH) and s 198AHA, both in Subdiv B of Div 8 of Pt 2. Where, for example, the power of the Commonwealth to remove a transitory person to a regional processing country, or the fact that the transitory person has been removed, is not an issue, then, without more, s 494AB(1)(ca) will not apply. But where proceedings are brought in which the possible removal of a transitory person to a regional processing country under s 198AD is sought to be prevented, they will be "proceedings relating to" the performance or exercise of a function, duty or power under Subdiv B of Div 8 of Pt 2 for the purposes of s 494AB(1)(ca). It does not matter that the proceedings might also relate to other matters or plead a cause of action in the common law of negligence relating to something other than the possible removal of the transitory person. An issue on the pleadings, viewed in light of the relief sought (preventing removal), relates to the 72 Removal to a regional processing country under ss 198AD and 198AH. Bell Gordon performance or exercise of the power to remove the transitory person under s 198AD. The same would apply to an issue involving the interaction between ss 198AHA and 494AB(1)(ca). Where the Commonwealth has entered into an arrangement with a person or body in relation to the regional processing functions of a country, and there is an issue raised between the parties about the performance or exercise by the Commonwealth of one or more of the actions listed in s 198AHA(2), then s 494AB(1)(ca) would apply to that proceeding. As the Full Court pointed out, s 198AHA may support acts done by the Commonwealth by providing that the Commonwealth has the "capacity" to take those actions. But, contrary to the Full Court's conclusion, an action need not affect rights to be "under" a provision for the purposes of s 494AB(1)(ca). So, for example, proceedings seeking to challenge the authority of the Commonwealth to make payments, or anything incidental or conducive to the making of those payments, pursuant to such an arrangement would attract the operation of s 494AB(1)(ca) read with one or both of s 198AHA(2)(b) and (c)73. Against that background, it is necessary to deal separately with each matter and, in particular, to say in what respects the proceedings related to the subject matters identified in s 494AB. FRM17 In December 2017, FRM17 commenced negligence proceedings against the Commonwealth in the Federal Court. The originating application alleged, among other things, that the Commonwealth, in exercise of its powers under one or both of s 198AHA of the Migration Act and s 61 of the Constitution, owed FRM17 a duty of care. It alleged that the duty arose because the Commonwealth had transferred her to Nauru under ss 198AD and 198AHA and maintained significant involvement in the day-to-day operation of regional processing activities on Nauru and her day-to-day health care and welfare. It further alleged that the Commonwealth breached this duty by "fail[ing] to provide [FRM17] with access to safe and appropriate medical facilities and treatment", and that, as a result of that breach, she was "suffering significant harm" and "at immediate risk". 73 cf Williams v The Commonwealth (2012) 248 CLR 156; Williams v The Commonwealth [No 2] (2014) 252 CLR 416. Bell Gordon FRM17 sought interlocutory orders restraining the Commonwealth from detaining her "on Nauru or at any other off-shore processing centre not within Australia" and from "[n]ot permitting [FRM17] from travelling to another country for the purpose of obtaining urgent psychiatric medical attention". By way of final relief, FRM17 sought orders for ongoing medical care as recommended by treating medical practitioners. By an interlocutory application also in December 2017, FRM17 sought an order that she be transferred immediately to a location where she could receive medical treatment. The Federal Court ordered that, until trial or further order, the Commonwealth place FRM17 in a tertiary level specialist child mental health facility in accordance with medical advice. On 24 December 2017, FRM17 was transferred to Australia with her mother and sister and they remain in Australia. filed Subsequently, FRM17 filed amended pleadings. The alleged duty of care and the alleged breach were put in substantially similar terms to those in the originating application. FRM17 sought damages and an injunction that the Commonwealth "cease to fail to discharge the responsibility that [it has] assumed to procure specialist child psychiatric health treatment". The Commonwealth filed an amended defence which alleged that the Federal Court did not have jurisdiction by reason of: s 494AB(1)(a), because FRM17 "sought interlocutory relief which, in effect, required her transfer to Australia for a medical purpose"; s 494AB(1)(ca), because "an important element of the alleged assumption of responsibility, the alleged duty of care and the alleged standard of care is that [FRM17] was removed to Nauru pursuant to s 198AD of the Act" and "the various actions and omissions which the [Commonwealth] is said to have taken in the statement of claim were taken (or omitted to be taken) in the exercise of statutory power under provisions of the Act ... including s 198AHA of the Act"; and s 494AB(1)(d), because "[t]he relief which [FRM17] seeks, in effect, prevents her removal from Australia". At times in argument, these paragraphs of the Commonwealth's defence were treated as if they were a general answer to the claims made. The better view, however, is that what was put in the defence was directed to the single concluding Bell Gordon plea that the Federal Court had no jurisdiction and that the proceeding should be dismissed or permanently stayed. The Full Court held that s 494AB(1)(a) did not bar FRM17's proceeding because she did not seek or obtain an order requiring the exercise of s 198B; the interlocutory order obtained merely required that she be placed in a specialist child mental health facility meeting particular conditions. The Full Court further held that s 494AB(1)(d) did not bar FRM17's proceeding because no issue of removal had arisen while medical care was being provided. That characterisation of the issues in the case was incomplete. As explained above, s 494AB does not alter or limit the Federal Court's jurisdiction. Hence, orders already made in this proceeding were and remain validly made. As the claim for relief now stands, it is a claim for relief preventing removal to Nauru (there being no tertiary level specialist child mental health facilities available on Nauru). Thus, one of the issues in the proceeding relates to the removal of FRM17 from Australia within the meaning of s 494AB(1)(d). It is not to the point that the Commonwealth's duty to remove FRM17 under ss 198AD(2) and 198AH(1A) has not yet arisen. It is enough that the relief sought would in substance prevent removal in accordance with those provisions were that duty to arise. It is unnecessary to decide whether s 494AB(1)(a) and (ca) were engaged. Whether the Commonwealth will seek to rely on s 494AB in answer to the further prosecution of these claims (which are within the jurisdiction of the Federal Court) is yet to be seen. DLZ18 In July 2018, DLZ18 commenced negligence proceedings against the Commonwealth in the Federal Court. The pleadings in DLZ18's and FRM17's proceedings are substantially the same and it was common ground that none of the differences between the pleadings was material to answering the separate questions. After DLZ18 had filed an originating application and an interlocutory application seeking an order that she be immediately transferred "to a location where the [Commonwealth] can obtain for [DLZ18] urgent paediatric physical and psychiatric care", DLZ18 and her mother and father were brought to Australia. After DLZ18 filed an amended originating application and statement of claim seeking damages (but not an injunction), the Commonwealth filed a defence to the same effect as that filed in FRM17's proceeding alleging that the Federal Court did not have jurisdiction by reason of: Bell Gordon s 494AB(1)(a), because "the Statement of Claim include[s] ... an allegation that the [Commonwealth] ought to have transferred [DLZ18 and her mother74 and father] from Nauru to Australia"; and s 494AB(1)(ca), because "an element of the genesis of the alleged duties of care is that [DLZ18 and her mother] were taken to Nauru under s 198AD and certain actions were allegedly taken by the Commonwealth under s 198AHA of the Act". While the Commonwealth did not allege in its defence that the Federal Court did not have jurisdiction by reason of s 494AB(1)(d), the Commonwealth contended in its written submissions to this Court that "jurisdictional issues must be determined by the [Federal] Court in the exercise of its first duty to be assured of its own jurisdiction. That was so whether or not the point was taken by the [Commonwealth]." That submission was not pressed at the hearing. As s 494AB is procedural, not jurisdictional, and the Commonwealth had not pleaded s 494AB(1)(d), its application to these proceedings does not arise. The Full Court held that s 494AB(1)(a) did not bar DLZ18's proceeding because DLZ18 did not seek or obtain an order requiring the exercise of s 198B, and no interlocutory orders were made. Again, that characterisation of the issues in the case was incomplete. As in FRM17, orders already made in the proceeding were and remain validly made. The Federal Court had jurisdiction to make those orders. Section 494AB(1)(a) applied to the proceeding because one of the issues was and remains whether the Commonwealth ought to have transferred DLZ18, her mother and her father from Nauru to Australia, an issue within the meaning of s 494AB(1)(a)75. DLZ18 was transferred to Australia pursuant to s 198B, the power identified in s 494AB(1)(a). DLZ18's submission that despite the availability and suitability of s 198B, the Commonwealth could have engaged in negotiations with other countries, within a short period of time, to determine whether there was an alternative location to which DLZ18 could be transferred, may be put to one side. It is apparent, on the face of the pleadings, that whether the Commonwealth ought to have transferred DLZ18, her mother and her father from 74 DLZ18's mother, FZR18, is the second respondent in this appeal. 75 See [52] above. Bell Gordon Nauru to Australia was an issue. It is unnecessary to decide whether s 494AB(1)(ca) was engaged. Whether the Commonwealth will seek to rely on s 494AB in answer to the further prosecution of these claims (which are within the jurisdiction of the Federal Court) is yet to be seen. BXD18 In April 2018, BXD18 commenced negligence proceedings against the Commonwealth in the Federal Court. The originating application sought an injunction "requiring the Commonwealth to take all steps within its power to ensure that [BXD18] receives treatment in a specialist child mental health treatment facility with comprehensive tertiary level child psychiatric assessment", or alternatively injunctive or declaratory relief that the Commonwealth cease breaching a duty of care owed to BXD18 by failing to take those steps. The application also sought damages. An interlocutory application filed at the same time sought an order that BXD18 be immediately transferred to a location where she could receive "immediate comprehensive psychiatric assessment by a qualified specialist in child psychiatry" and "treatment in an inpatient child mental health facility". transfer BXD18 The Commonwealth agreed to Australia. No interlocutory orders were made. After BXD18 had been transferred, she filed an amended originating application and statement of claim. The amended claim alleged that the Commonwealth owed BXD18 a duty of care because it relevantly designated Nauru as a "regional processing country" under s 198AB(1), entered into a memorandum of understanding and administrative arrangements relating to regional processing on Nauru76, and maintained significant involvement in regional processing activities on Nauru. It alleged that the Commonwealth breached this duty by failing to remove BXD18 from Nauru. The claimed relief included an injunction requiring the Commonwealth to resettle BXD18 and each member of her family in a country that is a signatory to the Refugees Convention "and, until this is done, requiring the [Commonwealth] not to take any steps to remove [BXD18] and her family from Australia". Alternatively, BXD18 sought an injunction requiring the Commonwealth not to take any steps to remove her to any "regional processing country" where she would be at risk of suffering the same harm she suffered on Nauru, or alternatively an injunction requiring the 76 See Plaintiff M68 (2016) 257 CLR 42 at 61 [3], 77-78 [68]-[69], 116-117 Bell Gordon Commonwealth not to take any steps to remove BXD18 from Australia "until she has reached maximum medical improvement". The Commonwealth filed a defence to the same effect as that filed in FRM17's proceeding which included an allegation that the Federal Court did not have jurisdiction by reason of: s 494AB(1)(a), because BXD18 "sought effectively required her transfer to Australia for a medical purpose"; interlocutory relief which s 494AB(1)(ca), because "an important element of the alleged assumption of responsibility, the alleged duty of care and the alleged standard of care is that [BXD18] was removed to Nauru pursuant to s 198AD of the Act" and "the various actions and omissions which the [Commonwealth] is said to have taken in the statement of claim were taken (or omitted to be taken) in the exercise of power under provisions of the Act ... including s 198AHA"; and s 494AB(1)(d), because BXD18 "seeks relief preventing her removal from Australia". The Full Court held that s 494AB(1)(d) did not bar BXD18's proceeding as instituted, but that BXD18's amended originating application and statement of claim engaged s 494AB(1)(d). The Full Court was right. Section 494AB(1)(d) was engaged because orders preventing removal from Australia are sought. to BXD18's proceeding because an As with the claims of FRM17 and DLZ18, orders already made in this proceeding were validly made and continue to operate. Further, as instituted, s 494AB(1)(a) applied interlocutory application filed at the time the proceeding was instituted sought an order that BXD18 be immediately transferred to a location where she could receive "immediate comprehensive psychiatric assessment by a qualified specialist in child psychiatry" and "treatment in an inpatient child mental health facility". This was an order which effectively required her transfer to Australia: an issue within the meaning of s 494AB(1)(a). BXD18 was transferred to Australia pursuant to s 198B, the power identified in the statutory scheme. Section 494AB(1)(d) applies because BXD18 seeks an order preventing her removal from Australia in the manner contemplated under ss 198AD and 198AH Bell Gordon of the Migration Act77. Whether the Commonwealth will seek to rely on s 494AB in answer to the further prosecution of these claims (which are within the jurisdiction of the Federal Court) is yet to be seen. Although it is unnecessary to decide whether s 494AB(1)(ca) was engaged, BXD18's contention that, in respect of each of BXD18, her father and her brother, the power in s 198AHA ceased to be available on 25 March 2015 (the date they were found to be refugees), is misconceived. There was no dispute that each of BXD18, her father and her brother were at all relevant times transitory persons. Section 494AB applies to legal proceedings relating to transitory persons, a status which does not depend on whether a person has or has not been determined to be a refugee78. In June 2018, DIZ18 commenced negligence proceedings against the Commonwealth in the Federal Court. The originating application sought an injunction requiring the Commonwealth to take all steps within its power to ensure that DIZ18 was transferred from Papua New Guinea to "a location in Australia where [DIZ18] receives an MRI head scan and specialist paediatric treatment, care and follow up". Alternatively, the application sought injunctive or declaratory relief that the Commonwealth cease breaching a duty of care owed to DIZ18 by failing to take those steps. An interlocutory application filed at the same time sought an order in similar terms, namely that DIZ18 be transferred "to a location in Australia" to receive an "MRI head scan" and "[a]ssessment, long term care and follow up by a paediatric neurologist and multi disciplinary specialist paediatric team". A statement of claim also filed at the same time sought an injunction "prohibiting the Commonwealth from taking steps to transfer [DIZ18] back to Nauru". In July 2018, orders were made requiring that, as soon as reasonably practicable, DIZ18 be brought to Australia. She was brought to Australia the next day. In March 2019, DIZ18 filed an amended statement of claim seeking an injunction "requiring the [Commonwealth] to take and to continue to take all steps within [its] power to ensure that [DIZ18] receives treatment, including long-term 77 See [53] above. The Commonwealth did not press the ground relating to s 494AB(1)(d) in respect of BXD18 in oral submissions but it was put in issue by BXD18's cross-appeal. 78 Migration Act, s 5(1) definition of "transitory person". Bell Gordon care and follow-up, in a location with access to quality, multi-disciplinary specialist paediatric care". The Commonwealth filed a defence to the same effect as that filed in FRM17's proceeding which alleged that the Federal Court did not have jurisdiction by reason of: s 494AB(1)(a), because DIZ18 "sought interlocutory relief which required her transfer to Australia for a medical purpose"; s 494AB(1)(ca), because "an important element of the alleged assumption of responsibility, the alleged duty of care and the alleged standard of care is that [DIZ18's] parents were removed to Nauru pursuant to s 198AD and that [DIZ18] was as a result born on Nauru" and "the various actions and omissions which the [Commonwealth] is said to have taken in the statement of claim, including the alleged actions and omissions relating to [DIZ18's] transfer from Nauru to [Papua New Guinea], were taken or would have been taken had they not been omitted to be taken in the exercise of power under provisions of the Act ... including s 198AHA"; and s 494AB(1)(d), because by reason of the combination of a paragraph of her amended statement of claim and a paragraph of the prayer for relief, DIZ18 in effect seeks relief preventing her removal from Australia. The Full Court held that s 494AB(1)(a) barred DIZ18's proceeding because she sought transfer to Australia for medical treatment and s 494AB(1)(d) also barred DIZ18's proceeding because she sought an injunction preventing her removal from Australia. As with the other claims, orders made in DIZ18's proceeding were validly made and continue to operate. As the proceeding was instituted, s 494AB(1)(a) applied because DIZ18 expressly sought transfer to Australia for medical treatment, an issue within the meaning of s 494AB(1)(a), and DIZ18 was transferred to Australia pursuant to s 198B. As the proceeding is now framed, s 494AB(1)(d) applies because DIZ18 seeks an order preventing her removal from Australia. It is not to the point that the Commonwealth's duty to remove DIZ18 under ss 198AD(2) and 198AH(1A)(c) has not yet arisen. It is enough that the relief sought would, in substance, prevent removal in accordance with those provisions were that duty to arise. It is unnecessary to decide whether s 494AB(1)(ca) was engaged. Again, whether the Commonwealth will seek to rely on s 494AB in answer to the further prosecution of these claims (which are within the jurisdiction of the Federal Court) is yet to be seen. Bell Gordon Orders For those reasons, each appeal should be allowed and the cross-appeals should be dismissed. In each proceeding, paragraph 1 of the orders made by the Full Court of the Federal Court of Australia on 28 August 2019 should be set aside and, in its place, order: "1. The questions ordered to be separately answered be determined as follows: Questions: (a) When the proceeding was commenced in the Federal Court of Australia, was the effect of s 494AB of the Migration Act 1958 (Cth) that it could not be instituted? and Is the effect of s 494AB of the Migration Act 1958 (Cth) that the proceeding cannot be continued in the Federal Court of Australia? Answers: (a) No, but the respondents, if so advised, could have sought, in an appropriate case, to plead that s 494AB applied to the proceeding; and (b) No, but the respondents, if so advised, may seek to plead that s 494AB applies to the proceeding and, if permitted to do so, may apply for an order that continuation of the proceedings as then framed be stayed. Whether amendment of pleadings should be allowed or a stay granted are matters to be determined." Although each appeal should be allowed and the cross-appeals dismissed, the answers given to the separate questions are not the answers the Commonwealth sought. In these circumstances, each party should bear their own costs of their proceeding in this Court and the order for costs made by the Full Court should not be disturbed.

HIGH COURT OF AUSTRALIA APPELLANT AND THE QUEEN RESPONDENT [2017] HCA 18 10 May 2017 ORDER Appeal dismissed. On appeal from the Supreme Court of New South Wales Representation G R James QC with P D Lange and M G Coroneos for the appellant L A Babb SC with H Baker and B K Baker for the respondent (instructed by Solicitor for Public Prosecutions (NSW)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Criminal law – Infliction of grievous bodily harm – Meaning of "inflicts" – Where appellant caused complainant to contract human immunodeficiency virus – Whether infliction requires force and immediate physical injury – Whether communication of infection or disease amounts to infliction – Consideration of R v Clarence (1888) 22 QBD 23 and R v Dica [2004] QB 1257. Criminal law – Fault element – Recklessness – Foresight of risk – Where appellant diagnosed with human immunodeficiency virus – Where appellant knew of possibility of transmitting virus through unprotected sexual intercourse – Whether foresight of possibility of risk sufficient to establish recklessness. Words and phrases – "always understanding", "grievous bodily harm", "inflicts", "maliciously", "recklessly". speaking", "contemporary ideas and Crimes Act 1900 (NSW), ss 5, 35(1)(b), 36. KIEFEL CJ, KEANE, NETTLE AND EDELMAN JJ. The appellant was presented in the District Court of New South Wales on an ex officio indictment alleging one count of maliciously causing the complainant to contract a grievous bodily disease (namely, the human immunodeficiency virus ("HIV")) with the intent of causing the complainant to contract that grievous bodily disease, contrary to s 36 of the Crimes Act 1900 (NSW) ("Count 1"), and, in the alternative, one count of maliciously inflicting grievous bodily harm upon the complainant, contrary to s 35(1)(b) of the Crimes Act ("Count 2"). The Crown case was, in broad terms, that the appellant engaged in unprotected anal sexual intercourse with the complainant between January and July 2004 in circumstances where the appellant had been diagnosed as, and therefore knew that he was, HIV positive. The Crown did not allege1 "an application of direct and intentional violence" but rather that the appellant had inflicted grievous bodily harm upon the complainant by reason that "the complainant was infected with a grievous bodily disease (HIV) as the immediate consequence of the relevant act of intercourse". On 5 March 2012, the appellant moved for an order that Count 2 be quashed on the basis that, on the acts alleged by the Crown, the appellant did not, at law, inflict grievous bodily harm on the complainant. Sorby DCJ, who heard the motion, ruled2 that, because of the "uncertainty as to whether infecting another person with a serious disease constituted inflicting grievous bodily harm as proscribed in the offence of maliciously inflicting grievous bodily harm as it was defined under s 35(1)(b) in 2004", the proceedings in relation to Count 2 should be stayed. On an appeal by the Crown pursuant to s 5F(2) of the Criminal Appeal Act 1912 (NSW) ("the interlocutory appeal"), the New South Wales Court of Criminal Appeal (Macfarlan JA, Johnson and Davies JJ agreeing) dissolved the stay. The Court accepted3 the Crown's contention that: "the word 'inflicts' should not be given a limited and technical meaning which requires that the harm result from a violent act which creates an immediate result. That being so, the transmission of a disease which 1 R v Aubrey (2012) 82 NSWLR 748 at 750 [4]. 2 R v Aubrey unreported, District Court of New South Wales, 8 March 2012 at 6-7 3 Aubrey (2012) 82 NSWLR 748 at 750 [9], 761 [62]. Nettle Edelman manifests itself after a period of time can amount to the infliction of grievous bodily harm." The appellant's application for special leave to appeal to this Court against that Proceedings on the same two counts were reinstated by indictment dated 8 August 2013. Following a trial before Marien DCJ and a jury of 12, the appellant was acquitted of Count 1 (maliciously causing the complainant to contract a grievous bodily disease with intent to cause the complainant to contract that disease) but convicted of Count 2 (maliciously inflicting grievous bodily harm), and was sentenced therefor to a term of five years' imprisonment with a non-parole period of three years. The appellant appealed against that conviction on grounds including that Count 2 as alleged disclosed no offence known to law and that the trial judge erred in directing the jury that the element of malice was satisfied. A differently constituted Court of Criminal Appeal (Fagan J, Gleeson JA and Button J agreeing) dismissed the appeal, adopting, in relation to the first ground, the analysis of the Court which had heard the interlocutory appeal5. By grant of special leave, the appellant now appeals to this Court. The appeal raises two questions of principle for decision: Is an act of having sexual intercourse with another person and thereby causing the other person to contract a grievous bodily disease capable of amounting to the infliction of grievous bodily harm within the meaning of s 35(1)(b) of the Crimes Act? Is it sufficient to establish that an accused acted recklessly within the meaning of s 5 of the Crimes Act, and thus maliciously within the meaning of that section and s 35, for the Crown to establish that the accused foresaw the possibility (as opposed to the probability) that the act of sexual intercourse with the other person would result in the other person contracting the grievous bodily disease? For the reasons which follow, both questions should be answered affirmatively, and the appeal should be dismissed. [2013] HCATrans 110. 5 Aubrey v The Queen [2015] NSWCCA 323 at [23]-[25]. Nettle Edelman Relevant statutory provisions At the relevant times, and so far as is applicable, sections of the Crimes Act provided as follows: Definitions In this Act, unless the context or subject-matter otherwise indicates or requires: Grievous bodily harm includes any permanent or serious disfiguring of the person. Maliciously Maliciously: Every act done of malice, whether against an individual or any corporate body or number of individuals, or done without malice but with indifference to human life or suffering, or with intent to injure some person or persons, or corporate body, in property or otherwise, and in any such case without lawful cause or excuse, or done recklessly or wantonly, shall be taken to have been done maliciously, within the meaning of this Act, and of every indictment and charge where malice is by law an ingredient in the crime. 18 Murder and manslaughter defined (a) Murder shall be taken to have been committed where the act of the accused, or thing by him or her omitted to be done, causing the death charged, was done or omitted with reckless indifference to human life, or with intent to kill or inflict grievous bodily harm upon some person, or done in an attempt to commit, or during or immediately after the commission, by the accused, or some accomplice with him or her, of a Nettle Edelman crime punishable by imprisonment for life or for 25 years. (b) Every other punishable homicide shall be taken to be manslaughter. (a) No act or omission which was not malicious, or for which the accused had lawful cause or excuse, shall be within this section. (b) No punishment or forfeiture shall be incurred by any person who kills another by misfortune only. 33 Wounding etc with intent to do bodily harm or resist arrest Whosoever: maliciously by any means wounds or inflicts grievous bodily harm upon any person, or maliciously shoots at, or in any manner attempts to discharge any kind of loaded arms at any person, with intent in any such case to do grievous bodily harm to any person, or with intent to resist, or prevent, the lawful apprehension or detainer either of himself or herself or any other person, shall be liable to imprisonment for 25 years. 35 Malicious wounding or infliction of grievous bodily harm (1) Whosoever maliciously by any means: (a) wounds any person, or inflicts grievous bodily harm upon any person, shall be liable to imprisonment for 7 years. Nettle Edelman (2) A person is guilty of an offence under this subsection if the person commits an offence under subsection (1) in the company of another person or persons. A person convicted of an offence under this subsection is liable to imprisonment for 10 years. Causing a grievous bodily disease A person: (a) who maliciously by any means causes another person to contract a grievous bodily disease, or (b) who attempts maliciously by any means to cause another person to contract a grievous bodily disease, with the intent in any such case of causing the other person to contract a grievous bodily disease, is liable to imprisonment for 25 years." With effect from 15 February 2008, and so not until after the offences in this case were committed, the definition of grievous bodily harm in s 4(1) was amended6 so as to include the following: "(c) any grievous bodily disease (in which case a reference to the infliction of grievous bodily harm includes a reference to causing a person to contract a grievous bodily disease)." Infliction of grievous bodily harm The course of authority With respect to the first question raised by this appeal, the course of authority begins with the decision of the Court for Crown Cases Reserved in R v Clarence7. Nine members of the Court of 13 who decided that case 6 Crimes Amendment Act 2007 (NSW). (1888) 22 QBD 23. Nettle Edelman held8 that a man who knew that he had gonorrhoea and foresaw that it was possible he could transmit the disease to his wife by having sexual intercourse with her, and yet proceeded to do so without informing her of his condition, could not be convicted of maliciously inflicting grievous bodily harm upon her. Stephen J, delivering the main majority judgment, held that proof of the offence of "unlawfully and maliciously ... inflict[ing] ... grievous bodily Harm" under s 20 of the Offences against the Person Act 1861 (UK) (24 & 25 Vict c 100) ("the 1861 Act") required proof of9: "the direct causing of some grievous injury to the body itself with a weapon, as by a cut with a knife, or without a weapon, as by a blow with the fist, or by pushing a person down. Indeed, though the word 'assault' is not used in the section, I think the words imply an assault and battery of which a wound or grievous bodily harm is the manifest immediate and obvious result." That was to be contrasted, it was held, with the uncertain and delayed effect of an infection communicated by an act of sexual intercourse. The decision in Clarence has been widely criticised, perhaps most notably by Dr Kenny in the first edition, published in 1902, of Outlines of Criminal Law10, in which it was pointed out that the reasoning in Clarence was contrary to an important earlier decision of the Court for Crown Cases Reserved in R v Martin11 and the 1889 decision in R v Halliday12. In Martin, it was held13 that a man who turned out the lights in a theatre and put a bar on the door, thereby creating panic among the patrons which led to some of them suffering serious injuries in their attempts to escape, was guilty of recklessly inflicting grievous 8 Clarence (1888) 22 QBD 23 at 36-37 per Wills J, 37-38 per A L Smith J, 41 per Stephen J (with whom Mathew J, Grantham J, Manisty J and Huddleston B agreed), 62 per Pollock B, 65-66 per Lord Coleridge CJ (who agreed with both Wills and Stephen JJ). 9 Clarence (1888) 22 QBD 23 at 41-42. 10 Kenny, Outlines of Criminal Law, (1902) at 149-150. 11 (1881) 8 QBD 54. 13 (1881) 8 QBD 54 at 56-58. Nettle Edelman bodily harm under s 20 of the 1861 Act. In Halliday, it was held that a man who, by his threats to his wife, caused her to fall and be injured as she attempted to escape from him, was properly convicted of maliciously inflicting grievous bodily harm upon her. The Court reasoned that, if an accused creates in another person's mind an immediate sense of danger which causes the person to try to escape, and, in attempting to escape, that person injures himself or herself, the accused is responsible for the injuries which result. Eighty years after Clarence, the Full Court of the Supreme Court of Victoria in R v Salisbury14 endeavoured to rationalise Clarence with Halliday and Martin as, in effect, two lines of authority that conduced to the conclusion that grievous bodily harm could be inflicted15 either by an accused assaulting a victim or, without assaulting the victim, by the accused directly and violently inflicting grievous bodily harm by doing something intentionally which, though not itself a direct application of force to the body of the victim, directly results in force being applied violently to the body of the victim whereby grievous bodily harm is suffered16. It followed, it was held, that common assault was not necessarily a lesser included offence on a charge of recklessly inflicting grievous bodily harm within the meaning of s 19A of the Crimes Act 1958 (Vic) and, therefore, that the trial judge had not erred in failing to leave a charge of assault to the jury as an alternative count. In R v Wilson, the House of Lords approved17 the reasoning in Salisbury. Lord Roskill, with whom the other Law Lords agreed, concluded18 that, although "inflicts" does not have as wide a meaning as "causes", it connotes a broader notion inflicting grievous bodily harm by assaulting a victim. Consequently, it was held, consistently with Salisbury, that while an offence under s 20 of the 1861 Act may include an allegation of common assault, it need not necessarily do so. It would depend on the facts. An accused may be convicted of inflicting grievous bodily harm if shown either to have directly and than 15 In that case, within the meaning of s 19A of the Crimes Act 1958 (Vic): Salisbury [1976] VR 452 at 453. 16 Salisbury [1976] VR 452 at 458, 461. 17 [1984] AC 242 at 259-260 per Lord Roskill (Lords Fraser of Tullybelton, Elwyn-Jones, Edmund-Davies and Brightman agreeing at 253-254, 262). 18 Wilson [1984] AC 242 at 259-261. Nettle Edelman violently inflicted grievous bodily harm by assaulting the victim or to have done something intentionally which, though it does not amount to the direct application of force, directly results in force being applied violently to the body of the victim19. The next development in the course of authority was the decision of the Court of Appeal of England and Wales in R v Chan-Fook20, that "actual bodily harm" within the meaning of s 47 of the 1861 Act extends to psychiatric injury. In so concluding, Hobhouse LJ, who delivered the judgment of the Court, reasoned21 that the body of a victim includes all parts of his or her body, including organs, nervous system and brain; that "harm" is a synonym for "injury"; and that bodily harm, therefore, includes injury to the parts of the victim's body which affect mental and other faculties. It followed that bodily harm may be caused to a victim by causing injury to his or her health. Accordingly, in the circumstances of that case, where the accused had assaulted the complainant without occasioning physical bodily injury but in a manner that so terrified the complainant as to result in a recognised psychiatric injury, it was open to the jury to convict the accused of assault occasioning actual bodily harm22. The development in Chan-Fook led next to the decision of the House of Lords in R v Ireland23 that an accused who had caused a number of complainants to suffer severe depressive illness by his menacing and harassing behaviour24 was properly convicted of unlawfully and maliciously inflicting grievous bodily harm and actual bodily harm contrary to ss 20 and 47 of the 1861 Act. Lord Steyn, who delivered the principal speech, referred25 to the decision in Chan-Fook as a 19 Wilson [1984] AC 242 at 259-260, quoting Salisbury [1976] VR 452 at 461. 20 [1994] 1 WLR 689; [1994] 2 All ER 552. 21 Chan-Fook [1994] 1 WLR 689 at 694-695; [1994] 2 All ER 552 at 558-559. 22 Chan-Fook [1994] 1 WLR 689 at 696; [1994] 2 All ER 552 at 559-560. 24 Including making silent telephone calls, distributing offensive cards and taking photographs of a complainant and her family. 25 Ireland [1998] AC 147 at 159 (Lords Goff of Chieveley and Slynn of Hadley agreeing at 152). Nettle Edelman "sound and essential clarification of the law" relating to bodily harm. Whereas Clarence had confined "bodily harm" to physical injury and "inflict" to assault (in the sense of a battery involving the direct application of force), the reasoning in Chan-Fook "opened up the possibility" of applying ss 20 and 47 to new circumstances that do not involve the application of force. According to Lord Steyn, the 1861 Act is to be construed as "always speaking"26. As such, references to "bodily harm" in the 1861 Act may now be understood as including psychiatric injury because nowadays it is natural to speak of "inflicting" psychiatric injury and, although "inflict" and "cause" are not exact synonyms, one may naturally conceive of an accused's actions as having inflicted serious psychiatric injury (and, therefore, grievous bodily harm) on a victim27. Lord Hope of Craighead reasoned to similar effect, adding that the word "inflict" implies that the consequence of the act is something which the victim is likely to find "unpleasant or harmful", whereas "cause" is essentially neutral28. Finally, building on the observations in Ireland and Chan-Fook, in R v Dica the Court of Appeal held29 that Clarence has "no continuing application" and that an accused who knows that he is suffering from a serious sexual disease and recklessly transmits it to a woman through consensual sexual intercourse, without informing her of the risk of contracting the disease, is liable to be convicted of inflicting grievous bodily harm contrary to s 20 of the 1861 Act. Judge LJ, who delivered the judgment of the Court, embraced Hobhouse LJ's reasoning in Chan-Fook that contemporary notions of harm include injury to one's health30. His Lordship reasoned further that, inasmuch as Ireland held that grievous bodily harm constituted of psychiatric injury may be "inflicted" without the application of physical violence, it logically follows that grievous bodily harm constituted of a serious sexual disease may be "inflicted" without the application of violence; and so, therefore, may be "inflicted" by an act of sexual intercourse without the complainant's informed consent to the risk of the disease31. Judge LJ concluded accordingly that, in light of contemporary 26 Ireland [1998] AC 147 at 158-159. 27 Ireland [1998] AC 147 at 160-161. 28 Ireland [1998] AC 147 at 164. 29 [2004] QB 1257 at 1266 [30]-[31]. 30 Dica [2004] QB 1257 at 1265 [27]-[28]. 31 Dica [2004] QB 1257 at 1265-1266 [30]-[31]. Nettle Edelman conceptions of bodily injury and disease, it is no longer possible to discern the critical difference identified by the majority in Clarence between, on the one hand, an immediate and necessary connection between a blow and consequent physical harm and, on the other, the supposed uncertain and delayed effect of an act of sexual intercourse leading to the development of infection. As such, that reasoning in Clarence should no longer be followed. The reasoning below On the interlocutory appeal, Macfarlan JA surveyed the course of authority outlined above and concluded, in accordance with Chan-Fook, Ireland and Dica, that the infliction of harm does not require a direct or indirect application of force and that grievous bodily harm may be inflicted by the transmission of a sexual disease32. His Honour considered that the reasoning in Salisbury did not require a contrary conclusion because the Full Court of the Supreme Court of Victoria was there concerned only with "whether a charge of assault was encompassed within a charge of maliciously inflicting grievous bodily harm" and the subsequent conclusion that some act, other than an assault, that results in an application of force is required was obiter dicta33. On the appeal against conviction, the Court of Criminal Appeal upheld Macfarlan JA's earlier reasoning in that respect34. Their Honours were right to do so. Infliction without the application of force There are a number of reasons why Clarence should no longer be followed. First, as Dr Kenny observed in 1902, the decision in Clarence ran counter to contemporary authority35. As has been seen, the idea that the infliction of grievous bodily harm necessitated a battery productive of immediate physical injury was not reflected in the decisions of the Court for Crown Cases Reserved Secondly, despite the eminence of the judges who comprised the majority in Clarence – Wills J, A L Smith J, Mathew J, Stephen J, Grantham J, Manisty J, Huddleston B, Pollock B and Lord Coleridge CJ – their Lordships did not all 32 Aubrey (2012) 82 NSWLR 748 at 760-761 [56]-[61]. 33 Aubrey (2012) 82 NSWLR 748 at 760 [57]. 34 Aubrey [2015] NSWCCA 323 at [25]. 35 Kenny, Outlines of Criminal Law, (1902) at 149-150. Nettle Edelman speak with one voice. Stephen J, with whom A L Smith J, Mathew J, Grantham J, Manisty J and Huddleston B agreed, and Pollock B in a separate judgment, held36 that the infliction of grievous bodily harm required an assault or battery productive of immediate physical injury. But Wills J rested his conclusion on what his Lordship considered to be the impossibility of viewing an act of consensual sexual intercourse as an assault, notwithstanding that the complainant had not consented to the risk of the disease37. Lord Coleridge CJ rested his conclusion on a concern that, if the conviction were upheld, it might logically follow that a conviction could be sustained against a father or relative for infecting a child with smallpox or other contagious disease38. Thirdly, Field J and Hawkins J each delivered forceful dissenting judgments39 which suggest that, even as at 1888, the transmission of a sexual disease was not beyond the bounds of the ordinary acceptation of the phrase "inflicting grievous bodily harm". Fourthly, as Hawkins J identified, although s 18 spoke in terms of conduct "causing" a consequence; s 20 of conduct "inflicting" a consequence; and s 47 of conduct "occasioning" a consequence, a more rigorous textual and contextual analysis leaves little doubt that the drafters of the legislation employed the words "inflicting", "causing" and "occasioning" essentially as synonyms40. Fifthly, as Hawkins J also reasoned41, since the operation of s 47 was expressly predicated on proof of an assault42, the absence of any reference to assault in ss 18 and 20 implied that the object of each of those sections was respectively to make the intentional infliction of grievous bodily harm by any 36 Clarence (1888) 22 QBD 23 at 41 per Stephen J, 62 per Pollock B. 37 Clarence (1888) 22 QBD 23 at 34-36. 38 Clarence (1888) 22 QBD 23 at 65. 39 Clarence (1888) 22 QBD 23 at 48-49 per Hawkins J; see more generally at 58-59 40 See Clarence (1888) 22 QBD 23 at 48-49. 41 Clarence (1888) 22 QBD 23 at 49. 42 Section 47 provided: "Whosoever shall be convicted upon an Indictment of any Assault occasioning actual bodily Harm shall be liable ...". Nettle Edelman means punishable as a felony and to make the malicious infliction of grievous bodily harm by any means punishable as a misdemeanour. Sixthly, as Lord Steyn later noticed in Ireland43, the likelihood of that being so is fortified by the caveat noted in the commentary on the Criminal Law Consolidation Acts 1861 that the various provisions of the 1861 Act had been taken from a miscellany of previous enactments without effort to standardise the language, with the result that the significance which might ordinarily be attributed to different forms of expression in different sections of one statute would be misplaced. Seventhly, as was recognised in Dica44, even if the reckless transmission of sexual diseases were not within the ordinary acceptation of "inflicting grievous bodily harm" in 1888, subsequent developments in knowledge of the aetiology and symptomology of infection have been such that it now accords with ordinary understanding to conceive of the reckless transmission of sexual disease by sexual intercourse without disclosure of the risk of infection as the infliction of grievous bodily injury. Viewed in hindsight, a deal of the majority's reasoning in Clarence presents as based on a necessarily more rudimentary understanding of infectious diseases, a consequent fear of the unpredictability of what might be the consequence of recognising the spread of infectious disease as the infliction of serious bodily harm and, ultimately, what now appears as an unwarranted concern that it may prove impossible to define the demarcation between culpable and non-culpable non-violent acts that transmit infectious diseases. Eighthly, it is to be observed that, to a greater or lesser extent, each of the majority judgments in Clarence was overlaid with the then presumed consent of a married woman to sexual intercourse with her husband and an apparent inability or unwillingness on the part of some members of the majority to distinguish between consent to intercourse and consent to risk of infection45. As 43 [1998] AC 147 at 159, quoting Greaves, The Criminal Law Consolidation and Amendment Acts, (1861) at 3-4. 44 [2004] QB 1257 at 1265 [28], 1273 [59]. 45 See for example Clarence (1888) 22 QBD 23 at 30 per Wills J, 37 per A L Smith J, Nettle Edelman Hawkins J observed46, however, in effect that distinction had already been sanctioned by authority47. Lastly, there is, with great respect, no sufficient reason to disagree with the construction attributed to s 20 of the 1861 Act in subsequent decisions, including Ireland and Dica, or to fail to accept that that reasoning applies with at least equal force to s 35 of the Crimes Act. Counsel for the appellant contended that the word "inflicts" connotes the production of an immediate consequence with the result that, because the symptoms of the HIV which the appellant transmitted to the complainant were not immediately apparent, it could not be said that there had been any infliction of disease or injury. Arguably, that idea derives some support from some of the observations of Stephen J in Clarence48. But it is misplaced. It rests on the kind of discredited logic that was rejected in Alcan Gove Pty Ltd v Zabic49 that until and unless the symptoms of an insidious disease become manifest, no damage has been inflicted. As Zabic established, that is not so. On the appellant's submission, the ordinary acceptation of the word "inflicts" does not, even now, extend to the communication of disease or infection. That contention must also be rejected. It is commonplace to speak of the infliction of suffering and thus, as counsel seemed to accept, it is now commonplace to speak of the infliction of psychiatric injury50. Semasiologically, it is just as commonplace and just as appropriate to speak of the infliction of physical disease. In written submissions, the appellant asserted that the decision in Ireland did not accord with approaches to statutory construction in Australia. That does not appear to be the case. The approach in this country allows that, if things not known or understood at the time an Act came into force fall, on a fair 46 Clarence (1888) 22 QBD 23 at 53. 47 See R v Bennett (1866) 4 F & F 1105 [176 ER 925]; R v Lock (1872) LR 2 CCR 10. 48 (1888) 22 QBD 23 at 41-42. 49 (2015) 257 CLR 1 at 15 [26], 18-19 [41]-[42], 20 [48]; [2015] HCA 33. 50 See for example Tame v New South Wales (2002) 211 CLR 317; [2002] HCA 35. Nettle Edelman construction, within its words, those things should be held to be included51. Thus in Lake Macquarie Shire Council v Aberdare County Council52, Barwick CJ considered whether the word "gas" in English legislation was confined to coal gas or whether it extended to liquefied petroleum gas. The only form of gas which was in common use for lighting and heating at the time the statutes were enacted was coal gas. Barwick CJ held that although the connotation of the word "gas" was fixed, its denotation could change with changing technology. A similar approach has been taken in England53 and, with respect, Lord Steyn's approach in Ireland does not appear in principle to have been any different. In Ireland, Lord Steyn expressly stated that the decision in Chan-Fook opened up the possibility of applying the provisions of the 1861 Act to new circumstances54. Having observed that the correct approach was not to consider the subjective intention of the draftsperson, but to consider whether the words of the 1861 Act extended to a recognisable psychiatric injury when considered in light of contemporary knowledge55, his Lordship concluded56 that the 1861 Act employed the preferred Victorian drafting technique. Thus, it was "always speaking". By that, his Lordship appears to have meant that the language of the 1861 Act was adaptable to new circumstances; and if so, his Lordship's approach accorded with the approach in this country. Granted, it has been suggested that his Lordship may have had something else in mind57. But that suggestion was not called in aid on this appeal. The appellant did not develop his argument on 51 See generally Pearce and Geddes, Statutory Interpretation in Australia, 8th ed 52 (1970) 123 CLR 327 at 331 (Menzies J agreeing at 332); [1970] HCA 32. 53 See for example R v G [2004] 1 AC 1034 at 1054 [29] per Lord Bingham of Cornhill (Lords Browne-Wilkinson, Hutton and Rodger of Earlsferry agreeing at 54 Ireland [1998] AC 147 at 159. 55 Ireland [1998] AC 147 at 158. 56 Ireland [1998] AC 147 at 158-159. 57 See for example Yemshaw v Hounslow London Borough Council [2011] 1 WLR 433 at 442-443 [26]-[27] per Baroness Hale of Richmond JSC, with whom Lords Hope of Craighead DPSC and Walker of Gestingthorpe JSC agreed (Lord Rodger of Earlsferry JSC agreeing at 446 [38]); [2011] 1 All ER 912 at 922-923, 926. Nettle Edelman the always speaking approach to statutory construction and certainly did not develop it in accordance with any alternative view of what Lord Steyn intended. Counsel for the appellant contended that, be that as it may, the use of "inflicts" in s 35 and "causes" in s 36 implies that the former is intended to operate as a term of narrower connotation than the latter, and that, if Chan-Fook and Ireland were followed in New South Wales, it would lead to the remarkable and most unsatisfactory result that an accused may be found guilty of maliciously inflicting grievous bodily harm merely on the basis of having contemplated that his or her non-violent, and possibly non-physical, conduct might cause a disease or infection which later results in harm to another's body. Those contentions are not persuasive. As has been observed58, the commentary on the Criminal Law Consolidation Acts 1861 reveals that the various provisions of the 1861 Act were taken from a miscellany of previous enactments without significant effort to standardise the language, and thus the significance that might ordinarily be attached to differences in language between different sections within one enactment would be inapposite. Offences against the person in the Criminal Law Amendment Act 1883 (NSW) were largely derived from the 1861 Act. Thus, if an accused, foreseeing the possibility that he or she may cause a victim to suffer psychiatric injury, so acts as to cause the victim to suffer a psychiatric injury, it is neither surprising nor in the least degree unsatisfactory that the accused should be liable to be convicted of recklessly inflicting serious injury. Counsel for the appellant contended that it is to be presumed that the New South Wales Parliament was aware of Clarence when the Crimes Act was enacted in 1900 and so should be presumed to have enacted s 35 with the intention that it be applied in accordance with Clarence. Further, in counsel's submission, persons may be taken to have ordered their affairs in the belief that the operation of s 35 was as decided by Clarence and, in those circumstances, it would be wrong for this Court now to place any other construction on the section. To do so would amount to creating a new offence where none had previously existed. Those submissions are equally unpersuasive. Admittedly, in cases where words used in an Act have acquired a legal meaning prior to enactment, it may be presumed that the legislature intends them to have that meaning unless a contrary 58 See [23] above. Nettle Edelman intention appears from the context59. But the words of s 20 of the 1861 Act had not acquired the meaning ascribed to them by Clarence at the time of their first enactment in New South Wales. What later became s 35 of the Crimes Act was first proposed in New South Wales in the form of cl 19 of the draft bill attached to the Law Reform Commissioners' Report of 1871. As so proposed, it differed from s 20 of the 1861 Act in that it included the words "by any means". Clause 19 of the draft bill formed the basis of s 24 of the Criminal Law Amendment Act 1883, which was then re-enacted as s 35 of the Crimes Act in 1900. As the Crown submitted, the presence of the words "by any means", particularly in the re-enactment of the provision in 1900, suggests a legislative intention that "inflicts" should not be read narrowly in the manner considered by the majority in Clarence, but rather in the natural and ordinary sense attributed to the word by Lord Hope in Ireland60: of causing an unwelcome consequence of some harm or detriment to the victim. Granted, until this case, Clarence had not been distinguished or judicially doubted in New South Wales. It was assumed that proof of an offence against s 35 of the Crimes Act necessitated proof of a direct causing of some grievous physical injury with a weapon or blow, or proof of circumstances of the kind essayed in Halliday and Martin and later affirmed in Salisbury and Wilson61. It may also be accepted that the Court is ordinarily loath to overturn a long- standing decision about the meaning of a provision62 unless there is doubt about it, or to depart from the view of judges who, because of proximity in time to the 59 R v Slator (1881) 8 QBD 267 at 271-272 per Denman J; Webb v McCracken (1906) 3 CLR 1018 at 1027 per O'Connor J; [1906] HCA 45; Attorney-General for NSW v Brewery Employes Union of NSW (1908) 6 CLR 469 at 531-532 per O'Connor J; [1908] HCA 94; Bathurst City Council v PWC Properties Pty Ltd (1998) 195 CLR 566 at 585-586 [44]-[45] per Gaudron, McHugh, Gummow, Hayne and Callinan JJ; [1998] HCA 59. 60 [1998] AC 147 at 164. 61 See Watson and Purnell, Criminal Law in New South Wales, (1971), vol 1 at 68. 62 Platz v Osborne (1943) 68 CLR 133 at 137 per Latham CJ, 147 per Williams J; [1943] HCA 39; Thompson v Nixon [1966] 1 QB 103 at 109-110 per Sachs J (Browne J and Lord Parker CJ agreeing at 110). Nettle Edelman passage of the legislation in question, were more aware of the reasons underlying the legislation63. But that is not this case. As has been observed, the decision in Clarence has long been regarded as doubtful and, with the possible exception of Stephen J64, it is not clear that the judges who comprised the majority had particular insight into the Parliament's purpose in enacting s 20 of the 1861 Act. Furthermore, although it may once have been assumed that Clarence would be followed in New South Wales, at least since Salisbury, Wilson and subsequent decisions of courts in the United Kingdom there has been cause for considerable doubt. In these circumstances, the idea that persons might have planned their sexual activities in the belief that they would be safe from liability under s 35 under cover of Clarence is hardly compelling. Counsel for the appellant contended that, notwithstanding such doubts, it is apparent from the enactment of s 36 of the Crimes Act in 1990 that the Parliament were of the view that s 35 had the meaning attributed to its words by the majority in Clarence and that it is significant that Parliament acted to insert s 36 rather than to amend s 35 so as clearly to expand its meaning. By so proceeding, it was submitted, the Parliament signalled an intention that s 35 should continue to operate, as it had been supposed it would, in accordance with Clarence. For that reason, the appellant submitted, it would be quite wrong for this Court now to impose a different construction on the section. That argument is rejected. As appears from the second reading speech relating to the Crimes (Injuries) Amendment Bill 1990 (NSW), the impetus for the enactment of s 36 was "a series of robberies [that had been] carried out recently by bandits armed with syringes that they [had] claimed contained blood infected with the [HIV] AIDS virus"65. The provision was enacted because it was considered that Clarence created "some doubt [as to] whether the contraction of a disease ... constitutes bodily harm" for the purposes of s 35 and therefore to ensure that "[a] person who intentionally inflicts a serious disease upon another 63 See generally Pearce and Geddes, Statutory Interpretation in Australia, 8th ed 64 See [42] below. 65 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 4 December 1990 at 11737. Nettle Edelman [can] be convicted of an offence that reflects the gravity of the harm"66. That there was doubt about the effect of Clarence does not suggest that Parliament intended that s 35 be restricted in the manner suggested by Clarence, or that the section had, in fact, operated in that way previously. Rather, to the contrary, it is apparent that Parliament's concern that s 35 might be so restricted was the reason to enact s 36 to deal with the particular problem of offenders who, by any means, intentionally and maliciously cause or attempt to cause a person to contract a grievous bodily disease. Moreover, even if the Parliament that enacted s 36 contemplated that s 35 would be construed in accordance with Clarence, the meaning of s 35 is not thereby affected. The relevant question is whether, if the Parliament that enacted s 35 in 1900 were appraised of subsequent advances in the understanding of the aetiology and symptomology of infectious diseases, they would have intended that s 35 extend to the reckless transmission of HIV by consensual sexual intercourse with a complainant who is ignorant of the accused's infection67. Counsel for the appellant prayed in aid the general principle that where there is doubt about the meaning of a penal statute it should be resolved in favour of the subject. As Gibbs J stated in Beckwith v The Queen, however, that rule is one of last resort68. Penal statutes are to be construed in accordance with ordinary rules of construction and so, where, as here, it is apparent that a statute is to be construed as "always speaking"69, it is not to the point that, at an earlier 66 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 4 December 1990 at 11738. 67 See R v Gee (2003) 212 CLR 230 at 240-241 [6]-[7] per Gleeson CJ; [2003] HCA 12; Deputy Commissioner of Taxation v Clark (2003) 57 NSWLR 113 at 144-145 [137]-[139] per Spigelman CJ (Handley and Hodgson JJA agreeing at 150 [171]-[172]); Stingel v Clark (2006) 226 CLR 442 at 458-459 [27] per Gleeson CJ, Callinan, Heydon and Crennan JJ; [2006] HCA 37. 68 (1976) 135 CLR 569 at 576-577; [1976] HCA 55. See also Deming No 456 Pty Ltd v Brisbane Unit Development Corporation Pty Ltd (1983) 155 CLR 129 at 145 per Mason, Deane and Dawson JJ; [1983] HCA 44; Waugh v Kippen (1986) 160 CLR 156 at 164-165 per Gibbs CJ, Mason, Wilson and Dawson JJ; [1986] HCA 12. 69 See Ireland [1998] AC 147 at 158-159 per Lord Steyn. Nettle Edelman time in the life of the statute, there may have been doubt about the reach of its provisions70. Given that the language of s 20 of the 1861 Act has been held to have a generality that attracts the operation of the always speaking approach71, and so includes the reckless infliction of sexual disease, as was held in Dica, it is right to recognise that the same applies under s 35 of the Crimes Act. In light of contemporary ideas and understanding, any other result would be productive of considerable inconvenience72. The meaning of maliciously At the time of enactment of s 5 of the Crimes Act in 1900, there was no clear uniform meaning of "malice" at common law. Stephen's A Digest of the Criminal Law (Crimes and Punishments), which was first published in 1877, deployed the term in several different senses. For example, Art 279(5) of Stephen's draft code73 provided that a violation of property rights may occur "[b]y wilful and malicious mischief done to property", thus implying that malice and wilfulness were conceived of as being different. At another point, Stephen noted74 that one form of malice was "intent to bring any ship ... into danger", as was the injury of railway carriages. In a further passage, Stephen recorded that75: "[t]he word 'malicious' in reference to the offence of libel has been elaborated by the judges into a whole body of doctrine on the subject in the same sort of way as the words 'malice aforethought' in the definition of murder". The confusion caused by the several senses in which malice was used in common law led in 1879 to the Commissioners appointed to consider the law 70 Lake Macquarie Shire Council (1970) 123 CLR 327 at 331 per Barwick CJ (Menzies J agreeing at 332); Taylor v Goodwin (1879) 4 QBD 228 at 229. 71 Ireland [1998] AC 147 at 158-159 per Lord Steyn. 72 See Lake Macquarie Shire Council (1970) 123 CLR 327 at 333 per Windeyer J. 73 Stephen, A Digest of the Criminal Law (Crimes and Punishments), (1877) at 195. 74 Stephen, A Digest of the Criminal Law (Crimes and Punishments), (1877) at 301. 75 Stephen, A Digest of the Criminal Law (Crimes and Punishments), (1877) at 375. Nettle Edelman relating to indictable offences, of whom Stephen was one, recommending that, in relation to offences against property, the word "malice" be avoided and replaced with "wilful"76. Section 381 of the Commissioners' draft code, which drew heavily on Stephen's draft code of 1877, thus provided as follows: "Every one who causes any event by an act which he knew would probably cause it, being reckless whether such event happens or not, shall be deemed to have caused it wilfully for the purposes of this part of this Act. Nothing shall be an offence under any provision contained in this Part unless it is done without legal justification or excuse, and without colour of right: Provided that where the offence consists in an injury to anything in which the offender has an interest, the existence of such interest if partial shall not prevent his act being an offence, and the fact that the thing injured belonged wholly to the offender shall not prevent his act being an offence if done with an intention to defraud." In that context, "reckless" appears to have meant "without reck" (scil, without care or not caring whether the event happened or not)77 and "probable" to have meant what is usually called "possible"78. By contrast, s 5 of the Crimes Act was a re-enactment of s 7 of the Criminal Law Amendment Act 1883 and, in Stephen and Oliver's Criminal Law Manual of the same year, the authors observed that s 7 spoke of "malice" in its "proper, and ordinary, and only legitimate acceptation, and then expand[ed] its application for the purposes of the Act"79. It is not clear what Stephen and Oliver meant by "ordinary, and only legitimate acceptation". It may have been the ancient meaning of wickedly or wantonly, although, even by 1883, that had been superseded in England by the 76 United Kingdom, Criminal Code Bill Commission, Report of the Royal Commission Appointed to Consider The Law Relating to Indictable Offences: with an Appendix Containing a Draft Code Embodying the Suggestions of the Commissioners, (1879) [C 2345] at 30, 146. 77 Glanville Williams, Criminal Law: The General Part, 2nd ed (1961) at 54. 78 Glanville Williams, Criminal Law: The General Part, 2nd ed (1961) at 55, 60. 79 Stephen and Oliver, Criminal Law Manual Comprising the Criminal Law Amendment Act of 1883, (1883) at 7. Nettle Edelman course of common law development80. But it is at least clear that, by expanding on the "ordinary, and only legitimate acceptation" of the term, the definition was designed to embrace the notion of recklessness recognised in R v Welch81, of foreseeing the possibility of consequences and proceeding nonetheless. Until relatively recently, it has been consistently so construed82. More recently, it has been held in jurisdictions other than New South Wales, in relation to like provisions, that an offence of reckless infliction of grievous bodily harm necessitates proof of foresight of the probability, or likelihood, as opposed to the possibility, of grievous bodily harm83. For example, in R v Campbell84, the Victorian Court of Appeal overturned a line of previous authority85 that it was sufficient to establish the mental element of an offence of reckless infliction of grievous bodily harm contrary to s 17 of the Crimes Act 1958 (Vic) to demonstrate foresight of the possibility of grievous bodily harm. Hayne JA and Crockett AJA invoked what they described as "[t]he spirit of the decision in Crabbe"86 as a basis to conclude that proof of an offence of reckless infliction of grievous bodily harm requires proof of foresight of a probability of injury. In R v Crabbe, this Court held87 that for an accused to be convicted of common law murder, it was necessary for the Crown to prove at least that the accused foresaw the probability, as opposed to the possibility, of death or 80 See R v Ward (1872) LR 1 CCR 356; R v Pembliton (1874) LR 2 CCR 119. See generally R v Cunningham [1957] 2 QB 396 at 399-400. 81 (1875) 1 QBD 23. 82 See for example, in Victoria, R v Smyth [1963] VR 737 at 738-739; R v Kane [1974] VR 759 at 760; R v Lovett [1975] VR 488 at 493. 83 See and compare R v Hoskin (1974) 9 SASR 531 at 537-538; Selig v Hayes (1989) 52 SASR 169 at 174-176; Laurie v Nixon (1991) 55 SASR 46 at 51-53; Gillan v Police (SA) (2004) 149 A Crim R 354 at 358 [19]; R v Barker (2014) 287 FLR 85 See for example Smyth [1963] VR 737 at 738-739; Kane [1974] VR 759 at 760; Lovett [1975] VR 488 at 493. 86 Campbell [1997] 2 VR 585 at 593, referring to R v Crabbe (1985) 156 CLR 464; [1985] HCA 22. 87 (1985) 156 CLR 464 at 468-470. Nettle Edelman grievous bodily harm. In light of that, Hayne JA and Crockett AJA reasoned88 that it could not be supposed that the legislature intended that the courts would interpret relevant sections as producing a different requirement of recklessness for offences other than murder. In R v Coleman, however, the New South Wales Court of Criminal Appeal rejected that kind of reasoning in relation to s 3589. It had previously been held in R v Annakin90 that, just as recklessness for the purpose of common law murder requires foresight of probability of serious bodily injury, "reckless indifference to human life" in the statutory definition of murder in s 18 of the Crimes Act requires foresight of the probability of serious bodily injury91. Equally, Hunt J observed in Coleman, reckless indifference to human life could not amount to murder unless it were malicious within the meaning of s 5. But it did not follow that an act done recklessly within the meaning of s 5 must amount to reckless indifference within the meaning of s 18. As Hunt J stated92, malice was not an element of murder as defined by s 18. Rather, s 18(1) replaced the common law concept of malice aforethought with a list of matters that would previously have established malice aforethought. Consequently, if the Crown proved any of those matters, s 18(2)(a) (which excluded from the definition any act or omission which was not malicious) had no role to play. The only part of the definition of "maliciously" in s 5 which restated the common law was the first part: "Every act done of malice ... shall be taken to have been done maliciously". The remainder, which included the reference to an act done "recklessly or wantonly", went beyond that. At the time of Crabbe, the view taken in England93 and generally in Australia94 was that the degree of recklessness required to establish 88 Campbell [1997] 2 VR 585 at 593. 89 (1990) 19 NSWLR 467. 90 (1988) 17 NSWLR 202(n). 91 Coleman (1990) 19 NSWLR 467 at 473, 475. 92 Coleman (1990) 19 NSWLR 467 at 473-474. 93 Cunningham [1957] 2 QB 396. 94 See for example R v O'Connor (1980) 146 CLR 64 at 85 per Barwick CJ; [1980] HCA 17; Galasso (1981) 4 A Crim R 454 at 456. See also Vallance v The Queen (1961) 108 CLR 56 at 69 per Taylor J, where recklessness was equated with foresight of a "not unlikely" consequence; [1961] HCA 42. Nettle Edelman malice for the purpose of statutory offences other than murder was foresight of possibility of harm. Consequently, as Hunt J concluded95, nothing said in Crabbe in relation to the degree of recklessness required any change to that. The requirements in States other than New South Wales may vary according to the terms of each State's legislation. But, so far as ss 18 and 35 of the Crimes Act are concerned, the reasoning in Coleman was correct. As the Court emphasised in Crabbe, the reason for requiring foresight of probability in the case of common law murder was the near moral equivalence of intention to kill or cause grievous bodily harm and the foresight of the probability of death96. The same does not necessarily, if at all, apply to statutory offences other than murder. Counsel for the appellant referred to some more recent decisions in England in which it has been held that, for an accused to be convicted of recklessly causing grievous bodily harm, it is necessary to show not only that the accused foresaw the possibility of harm and proceeded nonetheless, but also that it was unreasonable for the accused to take that risk in so proceeding97. It was submitted that this development represents an advance in the law relating to reckless conduct which should lead this Court to replace the requirement of foresight of possibility with a test of foresight of probability. That submission should be rejected. Of course, the reasonableness of an act and the degree of foresight of harm required to constitute recklessness in so acting are logically connected. So much is implicit in the notion of an accused's willingness to "run the risk" or to proceed notwithstanding a risk98. As Glanville Williams observed99, therefore, if the act in question is devoid of social utility, a jury might properly and more readily consider that foresight of a mere possibility 95 Coleman (1990) 19 NSWLR 467 at 475-476. 96 Crabbe (1985) 156 CLR 464 at 469. 97 See for example Richardson, Archbold Criminal Pleading, Evidence and Practice, 2015 ed (2015) at 1969 §17-51, 2083 §19-262; R v G [2004] 1 AC 1034 at 1048-1049 [15]-[16] per Lord Bingham of Cornhill. See also Attorney General's Reference (No 3 of 2003) [2005] QB 73 at 83 [29]. 98 See for example Pemble v The Queen (1971) 124 CLR 107 at 119-120 per Barwick CJ; [1971] HCA 20. 99 Glanville Williams, Criminal Law: The General Part, 2nd ed (1961) at 60-62. Nettle Edelman of harm is enough to amount to recklessness. But, if the act in question has a slight degree of social utility, a jury might properly consider that foresight of something more than a mere possibility of harm is required. Thus, for example, in Welch100, where the accused thrust the handle of a hay fork into the body of a mare for no better reason than "the gratification of his own depraved tastes", foresight of the mere possibility that the mare might be killed was sufficient to render the accused's killing of her reckless and therefore malicious. Similarly, in R v Cunningham101, where the accused ripped a gas meter from the mains in order to steal money from within, his foresight of the mere possibility that gas might escape from the mains into an adjacent room and injure the inhabitant was sufficient to render the consequent injury of the inhabitant reckless and therefore malicious. By contrast, as Glanville Williams posited102, the act of driving a motor car will be foreseen by everyone who drives to be productive of a possibility that it could result in death or bodily injury. But, because driving is considered to be an activity of considerable social utility, a killing or injury which results from driving is not judged to be reckless by reason only of foresight of the mere possibility of injury. So also, anyone who plays a contact sport is likely to foresee the possibility that another player could be seriously injured in the course of the game. But, because of the social utility of the activity, the infliction of such injury is not judged to be reckless by reason only of the foresight of the mere possibility of it. Experience to date suggests that juries are ordinarily able as a matter of common sense and experience, and so without the need for particular directions, to take the social utility of an act into account when determining whether it was reckless. Accordingly, so far in this country, it has not been standard practice for a trial judge to give the kind of explicit directions regarding reasonableness that are now required in England103. Possibly, cases will arise in future in which, to ensure that an accused receives a fair trial, it does prove necessary for the judge to invite the jury's attention to what they consider to be the social utility of the act in question and to direct them to bear it in mind when determining whether the act was reckless. It is also possible that, when and if such a case arises, the kind 100 (1875) 1 QBD 23 at 23. 101 [1957] 2 QB 396 at 399-401. 102 Glanville Williams, Criminal Law: The General Part, 2nd ed (1961) at 60. 103 R v G [2004] 1 AC 1034 at 1049 [16] per Lord Bingham of Cornhill; R v Castle [2004] EWCA Crim 2758 at [8]-[10]; Richardson, Archbold Criminal Pleading, Evidence and Practice, 2015 ed (2015) at 1969 §17-51. Nettle Edelman of directions that are now given in England will prove to be of assistance. But none of that provides a basis to replace the requirement of foresight of possibility with a test of probability. In any event, in this case there was never any question of the jury proceeding on the basis of foresight only of a bare possibility of harm. The appellant conceded at trial that he knew that there was a real possibility that he could infect the complainant by having unprotected sexual intercourse with him. Nor was there even the slightest suggestion by or on behalf of the appellant that having unprotected sexual intercourse with the complainant, without disclosing the risk of infection to the complainant, should be considered other than reckless as to the possibility of that risk. The sole basis of the defence was that the jury ought not to be satisfied beyond reasonable doubt that the appellant was the source of the complainant's infection. Conclusion It follows that the appeal should be dismissed. Bell BELL J. The facts and procedural history are set out in the joint reasons and need not be repeated save to the extent that is necessary to explain my reasons. I agree with their Honours' analysis and conclusion with respect to proof of recklessness for the offence of maliciously inflicting grievous bodily harm. In the view I take, however, that issue is not reached. I would uphold the appellant's first ground: in my opinion the Court of Criminal Appeal of New South Wales was wrong to hold that the transmission of the human immunodeficiency virus ("HIV") by sexual intercourse is capable of constituting the infliction of grievous bodily harm within the meaning of s 35(1)(b) of the Crimes Act 1900 (NSW) ("the Crimes Act") as that provision stood at the material time104. The capacity of the sexual transmission of a serious disease to constitute the infliction of grievous bodily harm was the question reserved for consideration in R v Clarence105, and was determined adversely to the prosecution. The Court of Criminal Appeal considered the authority of Clarence had been undermined by later decisions holding that an assault is not an ingredient of the offence of unlawfully and maliciously inflicting grievous bodily harm. This was a reference to the decisions of the Full Court of the Supreme Court of Victoria in R v Salisbury106 and the House of Lords in R v Wilson107. The Court of Criminal Appeal favoured the "commonsense approach" to the concept of the "infliction" of harm adopted by the Court of Appeal of England and Wales in R v Dica108. It is, of course, the responsibility of the court to give effect to the legislative intention expressed in s 35(1)(b) of the Crimes Act. Nonetheless, it is a large step to depart from a decision which has been understood to settle the construction of a provision, particularly where the effect of that departure is to extend the scope of criminal liability109. For more than a century Clarence has 104 The material time was between January 2004 and July 2004. Section 35 as in force at that time was in substantially similar terms to s 35 as enacted in 1900, with only formatting changes, effected by the Crimes (Amendment) Act 1983 (NSW), Sched 1, item 1, having been made to the provision since its enactment. 105 (1888) 22 QBD 23. 108 R v Aubrey (2012) 82 NSWLR 748 at 761 [61] citing [2004] QB 1257. 109 Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 531 per Deane J; [1987] HCA 12; Babaniaris v Lutony Fashions Pty Ltd (1987) 163 CLR 1 at 13 per Mason J, 22-23 per Wilson and Dawson JJ; [1987] HCA 19; Hanau v Ehrlich [1912] AC 39 at 41 per Earl Loreburn LC. Bell stood as an authoritative statement that the "uncertain and delayed operation of the act by which infection is communicated" does not constitute the infliction of grievous bodily harm110. If that settled understanding is ill-suited to the needs of modern society, the solution lies in the legislature addressing the deficiency, as it has done111. In my judgment it was an error to follow Dica. At the outset there should be some reference to the respondent's contention that Clarence is not of moment because it was concerned with the construction of s 20 of the Offences against the Person Act 1861 (UK) ("the 1861 UK Act"), and s 35(1)(b) of the Crimes Act is in materially different terms. Both s 20 of the 1861 UK Act and s 35(1)(b) of the Crimes Act can be traced to s 4 of the Prevention of Offences Act 1851 (UK) ("the 1851 UK Act"). Section 4 of the 1851 UK Act provided that "if any Person shall unlawfully and maliciously inflict upon any other Person, either with or without any Weapon or Instrument, any grievous bodily Harm, or unlawfully and maliciously cut, stab, or wound any other Person …". A provision in almost identical terms was enacted as s 4 of the Offences better Prevention Act 1852 (NSW). Section 4 of the 1851 UK Act was replaced by s 20 of the 1861 UK Act, which combined the elements of the earlier provision, making it an offence to "maliciously wound or inflict any grievous bodily Harm upon any other Person, either with or without any Weapon or Instrument". In 1870, in New South Wales, the Law Reform Commission ("the Commission") was established to inquire into the statute law of the colony and submit proposals for its consolidation and amendment112. In 1871, the Commission produced a report and a draft bill based on the 1861 English consolidation statutes113. Clause 19 of the draft bill was based on s 20 of the 1861 UK Act save that the words "either with or without any Weapon or 110 R v Clarence (1888) 22 QBD 23 at 41-42 per Stephen J, with Huddleston B, Mathew, A L Smith and Grantham JJ agreeing. (Lord Coleridge CJ agreed with both Stephen and Wills JJ.) 111 Crimes Amendment Act 2007 (NSW), Sched 1 [1], which amended the definition of grievous bodily harm in s 4(1) of the Crimes Act to include "any grievous bodily disease (in which case a reference to the infliction of grievous bodily harm includes a reference to causing a person to contract a grievous bodily disease)". 112 See Woods, A History of Criminal Law in New South Wales: The Colonial Period 113 The 1861 English consolidation statutes comprised six Acts, including the Offences against the Person Act 1861. Bell Instrument" were omitted in favour of the inclusion of the words "by any means whatsoever". The Commission's report does not suggest any reason for the change. The Criminal Law Amendment Act 1883 (NSW) ("the 1883 NSW Act") was largely based on the Commission's draft bill. Section 24 relevantly departed from cl 19 by omitting the word "whatsoever". As enacted, s 24 made it an offence for a person to "maliciously by any means wound[] or inflict[] grievous bodily harm upon any person". Section 35 of the Crimes Act was enacted materially in the same terms as s 24 of the 1883 NSW Act. The Crimes Act was a consolidating Act and it may be accepted that there is no reason to presume that it was the legislature's intention in enacting s 35 to adopt the interpretation of the infliction of grievous bodily harm in Clarence114. Equally, there is no reason to conclude that it was the colonial legislature's intention in enacting s 24 of the 1883 NSW Act to provide any wider field of operation for the offence of unlawfully and maliciously inflicting grievous bodily harm than was provided under s 20 of the 1861 UK Act. Section 19A of the Crimes Act 1958 (Vic), which was the provision considered in Salisbury, was framed in terms "[w]hosoever unlawfully and maliciously inflicts grievous bodily harm upon any other person ...". The Full Court did not consider this departure from the wording of s 20 of the 1861 UK Act to be material: the focus of their Honours' analysis was on the infliction of grievous bodily harm as explained by the majority in Clarence. The same issue is raised here and the submission that Clarence can be put to one side because it was concerned with the 1861 UK Act is not persuasive. in providing separately for It is relevant to note that the scheme of the 1883 NSW Act followed the 1861 UK Act the offence of maliciously administering poison or other destructive or noxious thing so as to inflict grievous bodily harm115. The same scheme is found in Pt 3 of the Crimes Act, which deals with offences against the person and which makes separate provision for the offence of administering poison or other destructive or noxious thing so as to inflict grievous bodily harm116. As will appear, this feature of the statutory scheme was important to the majority's analysis in Clarence. 114 Williams v Dunn's Assignee (1908) 6 CLR 425 at 441 per Griffith CJ; [1908] HCA 27; Melbourne Corporation v Barry (1922) 31 CLR 174 at 188 per Isaacs J; [1922] HCA 56. 115 Criminal Law Amendment Act 1883 (NSW), s 27; Offences against the Person Act 1861 (UK), s 23. 116 Crimes Act 1900 (NSW), s 39. Bell Before turning to Clarence, it is convenient to refer to two earlier authorities dealing with s 20 of the 1861 UK Act. The first, R v Taylor117, was concerned with whether it was open to return a verdict for the lesser offence of assault on an indictment charging the unlawful and malicious infliction of grievous bodily harm. Kelly CB had held that it was. The second, R v Martin118, upheld the prisoner's conviction of two counts of inflicting grievous bodily harm notwithstanding that the actus reus did not involve the direct application of violence to the complainants. The prisoner caused a panic among the patrons of a theatre by extinguishing the gaslights on the stairway leading to the exit and by barring the exit door. The complainants' injuries were sustained in the crush as the patrons attempted to leave119. Lord Coleridge CJ gave the leading judgment. His Lordship's focus was on the element of malice and not the infliction of grievous bodily harm: the absence of personal malice against the particular individuals who suffered injury did not matter given that the prisoner's unlawful act was calculated to, and did, cause the injuries120. The facts in this appeal mirror those in Clarence in essential respects. Relevantly, the accused, Clarence, was charged under s 20 of the 1861 UK Act with the unlawful and malicious infliction of grievous bodily harm upon his wife. The wife contracted gonorrhoea from sexual intercourse with the accused in circumstances in which he knew of his condition and she did not. Following the accused's conviction, the Recorder stated a case for the consideration of the Court for Crown Cases Reserved asking whether it was open on these facts to find the offence made out121. The majority's conclusion, that it was not, did not depend on the concept of a wife's irrevocable consent to intercourse. The judges in the majority were at one in holding that the requirement of unlawfulness and malice was satisfied: engagement in sexual intercourse in the circumstances amounted to cruelty providing the wife with grounds for a judicial separation122. The principal majority judgments were those of Wills J and Stephen J. Wills J held that s 20 required the infliction of "direct and intentional violence", a concept which his Lordship made clear included the facts of Martin123. Stephen J 117 (1869) LR 1 CCR 194. 118 (1881) 8 QBD 54. 119 R v Martin (1881) 8 QBD 54 at 55-56. 120 R v Martin (1881) 8 QBD 54 at 58. 121 R v Clarence (1888) 22 QBD 23 at 27. 122 R v Clarence (1888) 22 QBD 23 at 36 per Wills J, 41 per Stephen J. 123 R v Clarence (1888) 22 QBD 23 at 36. Bell said that the words of the provision implied an assault and battery of which either a wounding or grievous bodily harm is the immediate and obvious result124. Common to the analysis of each of the judges who formed the majority was the holding that the infliction of grievous bodily harm requires an act having an immediate relation to the harm, a requirement that was held to be inconsistent with the uncertain and delayed operation of the act by which infection is communicated125. This was by way of contrast with causing grievous bodily harm to another by the administration of poison, for which the 1861 UK Act made discrete provision126. Infection was likened to an "animal poison", and its communication by sexual intercourse, like the administration of poison, lacked the necessary immediacy of connection to amount to the "infliction of grievous bodily harm" within the meaning of s 20127. Wills J's analysis did not require an assault for the necessary immediacy of connection to constitute the infliction of grievous bodily harm. While Stephen J spoke of an implied assault, it is to be observed that Stephen J was a party to the decision in Martin and does not appear to have considered that decision to have been inconsistent with his analysis in Clarence. Lord Coleridge CJ saw no inconsistency between the judgments of Wills and Stephen JJ in Clarence: his Lordship agreed with both128. Plainly his Lordship did not see Stephen J's analysis as turning on proof of an assault as an element of the s 20 offence. Shortly after Clarence his Lordship gave the leading judgment in R v Halliday129, upholding the prisoner's conviction for the infliction of grievous bodily harm in circumstances which did not involve an assault and battery. Halliday's wife had endeavoured to escape from his drunken threats of violence by climbing out of a window and she had suffered serious injuries in the resulting fall. The creation of an immediate sense of danger such as to cause a 124 R v Clarence (1888) 22 QBD 23 at 41. 125 R v Clarence (1888) 22 QBD 23 at 41-42. 126 Section 23 of the 1861 UK Act provided: "Whosoever shall unlawfully and maliciously administer to or cause to be administered to or taken by any other Person any Poison or other destructive or noxious Thing, so as thereby to endanger the Life of such Person, or so as thereby to inflict upon such Person any grievous bodily Harm, shall be guilty of Felony ...". 127 R v Clarence (1888) 22 QBD 23 at 36 per Wills J, 41-42 per Stephen J, 55-56 per 128 R v Clarence (1888) 22 QBD 23 at 66. Bell person to sustain injury in an attempt to escape from it was held to suffice to establish liability130. It remains that there is a tension between Taylor and Stephen J's reference to an implied assault in Clarence on the one hand and Martin and Halliday on the other. Resolution of this tension was the focus in Salisbury. It was argued in that case that the prisoner's conviction for the malicious infliction of grievous bodily harm should be set aside because the trial judge had not directed the jury of the availability of an alternative verdict of assault131. The Full Court observed that the Court for Crown Cases Reserved in Clarence had not been concerned with whether an assault was an element of the s 20 offence. Their Honours considered that Stephen J's statement of the implied requirement of an assault and battery was an obiter dictum and that the language of Wills J brought out the essential ingredient, namely, "the infliction of direct and intentional violence"132. The examples given by Wills J were said to show the width of the expression "inflicting grievous bodily harm"133. Wilson was also concerned with the availability of a verdict for the lesser offence of assault on an indictment charging the infliction of grievous bodily harm134. Lord Roskill, giving the leading judgment, saw little point in endeavouring to reconcile Taylor, Martin, Clarence and Halliday. His Lordship adopted the Full Court's analysis in Salisbury, holding that it is possible to inflict grievous bodily harm without the commission of an assault135. The conclusion in Salisbury that the trial judge did not err by failing to direct the jury of the availability of an alternative verdict of assault did not undermine the holding in Clarence that the sexual transmission of a disease is not the infliction of grievous bodily harm. Nor did the decision of the House of Lords in Wilson. The House of Lords returned to a consideration of Clarence in R v Ireland136. The question was whether s 20 of the 1861 UK Act caught the unlawful and malicious infliction of psychiatric injury. Lord Steyn observed that 130 R v Halliday (1889) 61 LT 701 at 702. 131 R v Salisbury [1976] VR 452 at 453. 132 R v Salisbury [1976] VR 452 at 457. 133 R v Salisbury [1976] VR 452 at 457. 135 R v Wilson [1984] AC 242 at 259-261. Bell Clarence is a troublesome authority but noted that it had not been overruled. His Lordship concluded that the obiter dicta in Clarence were not to be given weight in circumstances in which the judges had not had before them the possibility of psychiatric injury137. Lord Hope of Craighead also saw Clarence as an uncertain guide to the question of the infliction of psychiatric injury. His Lordship considered that Wilson had cast doubt on the weight to be attached to Clarence "when the facts are entirely different"138. It may be allowed that the words of the provision are susceptible of application to circumstances that were not within the contemplation of the judges who decided Clarence. My difficulty is with holding that Clarence is not authority with respect to the application of the provision to the very facts that it decided. This was the step taken by the Court of Appeal of England and Wales in Dica139. Dica was convicted of two counts of inflicting grievous bodily harm contrary to s 20 of the 1861 UK Act. The prosecution case was that Dica knew that he was HIV positive and with that knowledge he had sexual intercourse with each of the complainants without disclosing his HIV status. Each complainant contracted HIV as a result140. As in this appeal, it was the prosecution case that on each occasion the complainants' consent would not have been given had they known of Dica's condition141. Dica was convicted of both counts and he appealed, contending, as here, that the offence of inflicting grievous bodily harm is not made out by the sexual transmission of a harmful virus. The analysis in Dica proceeded upon the footing that Wilson had "destroyed" one of the foundations of the majority's reasoning in Clarence. Wilson was said to represent "a major erosion of the authority of Clarence in relation to the ambit of section 20 in the context of sexually transmitted disease"142. The "erosion process" was completed by Ireland: the holding that a person may inflict psychiatric injury on another contrary to s 20 of the 1861 UK Act meant that it is no longer possible to discern the critical difference between, on the one hand, an "immediate and necessary connection" between the act and 137 R v Ireland [1998] AC 147 at 160. 138 R v Ireland [1998] AC 147 at 163-164. 140 R v Dica [2004] QB 1257 at 1260-1261 [4]-[10]. 141 R v Dica [2004] QB 1257 at 1261 [12]. 142 R v Dica [2004] QB 1257 at 1265 [26]. Bell the injury, and, on the other, the "uncertain and delayed" effect of the act that leads to the eventual development of infection143. Dica may be thought to overlook the House of Lords' adoption, in Wilson, of Salisbury's analysis of the ratio decidendi of Clarence. It is an analysis which does not undermine the conclusion that the sexual transmission of a disease is not within the expression "infliction of grievous bodily harm" in the 1861 UK Act and its analogues. And while Ireland confined Clarence, their Lordships did not overrule it. Clarence has long stood as an authoritative statement that the sexual transmission of a disease does not amount to the infliction of grievous bodily harm within the meaning of s 35(1)(b) of the Crimes Act144. The construction is a plausible one in the context of the scheme of Pt 3 of the Crimes Act. In the circumstances I consider that the Court should not depart from it. Certainty is an important value in the criminal law. That importance is not lessened by asking whether it is likely that persons would have acted differently had they known that the law was not as it had been previously expounded. For these reasons I would allow the appeal and set aside order 2 of the Court of Criminal Appeal entered on 18 December 2015 and in its place order that the appeal to that Court be allowed and a judgment and verdict of acquittal entered. 143 R v Dica [2004] QB 1257 at 1266 [30]. 144 See Mack, The Criminal Law of New South Wales, (1920) at 26, which cited Clarence with respect to the meaning of "inflict", and the first and successive editions of Watson and Purnell, Criminal Law in New South Wales, which cite Clarence for the proposition that the transmission of a venereal disease is not the infliction of grievous bodily harm (see eg 1st ed (1971), vol 1 at 68 [158]).

HIGH COURT OF AUSTRALIA APPELLANT AND THE QUEEN RESPONDENT Markarian v The Queen [2005] HCA 25 18 May 2005 ORDER Appeal allowed. Set aside the sentence and orders of the Court of Criminal Appeal of the Supreme Court of New South Wales. Remit the matter to the Court of Criminal Appeal of the Supreme Court of New South Wales to dispose of the appeal in accordance with the reasons for judgment of this Court. On appeal from the Supreme Court of New South Wales Representation: A C Haesler and R W Burgess for the appellant (instructed by Legal Aid Commission of New South Wales) R D Cogswell SC with G E Smith and J A Quilter for the respondent (instructed by Solicitor for Public Prosecutions (New South Wales)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Markarian v The Queen Criminal law – Sentence – Principles – Drug offence – Appellant acted as driver for heroin dealer – Appellant pleaded guilty and asked that four other offences be taken into account by sentencing judge – Whether Court of Criminal Appeal adopted impermissible approach to sentencing by means of staged approach – Whether staged approach to be preferred to instinctive synthesis of sentencer – Relevance of maximum available sentence – Relevance of quantity of drug. Criminal law – Appeal – Prosecution appeal against sentence – Court of Criminal Appeal increased sentence from 2 years and 6 months to 8 years – Whether Court of Criminal Appeal was wrong to find that the original sentence was manifestly inadequate – Whether re-sentencing discretion miscarried. Criminal law – Sentence – Re-sentencing – Further offences – Additional discrete sentence added to head sentence for further offences disclosed by offender – Whether such approach a breach of totality principle. Criminal law – Sentence – Principles – Failure by trial judge and Court of Criminal Appeal to consider an obligatory requirement of sentencing statute in determining appellant's sentence – Whether sentencing discretion of trial judge and Court of Criminal Appeal miscarried because of such omission. Words and phrases – "staged approach", "two-stage approach", "instinctive synthesis". Crimes (Sentencing Procedure) Act 1999 (NSW), Div 3 Pt 3, s 21A, s 31, s 32, s 34(1), s 101A. Criminal Appeal Act 1912 (NSW), s 5D. Drug Misuse and Trafficking Act 1985 (NSW), s 33(2). GLEESON CJ, GUMMOW, HAYNE AND CALLINAN JJ. The question in this case is whether the Court of Criminal Appeal of New South Wales failed to apply or misapplied orthodox sentencing principles in upholding an appeal against sentence by the Crown. Facts At his arraignment on 3 May 2002, the appellant pleaded guilty to a charge that between 18 April and 10 October 2000 he did knowingly take part in the supply of a prohibited drug, namely heroin, in an amount not less than the commercial quantity for that drug – 415 grams pursuant to s 33(2) of the Drug Misuse and Trafficking Act 1985 (NSW) ("the Act") ("the principal offence"). He asked that in sentencing him for the principal offence four other matters ("the further offences") be taken into account by the sentencing judge. The way in which the further offences should be dealt with is governed by a special statutory regime to which some detailed reference is necessary and will be made later. On 15 April 2002, before the arraignment, s 21A of the Crimes (Sentencing Procedure) Act 1999 (NSW) ("the Sentencing Act") had commenced1. Section 21A, headed "General sentencing principles", was not referred to by the sentencing judge or by the Court of Criminal Appeal. This may have been on the assumption of counsel that insofar as it applied to the present case it did not alter the general law principles which otherwise applied. No contrary submission, requiring further attention to s 21A, was made in this Court and, accordingly, its terms need not be considered. The most serious of the further offences were the supply of in excess of 5 grams of heroin between 25 September and 1 October 2001, and of 232.5 grams of cannabis leaf, another prohibited drug, on 29 September 2000. On 18 July 2002 Hosking DCJ sentenced the appellant to a term of imprisonment of 2 years and 6 months from 18 July 2002 with a non-parole period of 15 months. His Honour was of the opinion that the appellant's plea of guilty had utilitarian value. He accordingly discounted the sentence by 25%. The appellant was therefore eligible for release on parole on 17 October 2003. Inserted by the Crimes (Sentencing Procedure) Amendment (General Sentencing Principles) Act 2002 (NSW), Sched 1, Item [1]. Repealed and substituted, with effect from 1 February 2003 by the Crimes (Sentencing Procedure) Amendment (Standard Minimum Sentencing) Act 2002 (NSW), Sched 1, Item [2]. His head sentence was to expire on 17 January 2005. In August 2002 however the respondent appealed. The facts constituting the principal offence consisted of the appellant's acting over a period of 5 months as a driver for Vincent Caccamo, a dealer in heroin. The appellant, who was himself a heroin addict, was paid in heroin for his services. The material before the sentencing court emphasized the different degree of criminality of the appellant from Caccamo's. Caccamo had previously been sentenced to 8 years imprisonment with a non-parole period of 5 years for a number of offences of supply in the course of an illicit business of handling and selling drugs. The relative brevity in all of the circumstances of his sentence is explained by the significant value that the judge who sentenced him attached to his cooperation with the police. Another of Caccamo's drivers, Chung, was sentenced to periodic detention of 3 years with a 2 years period of non-parole. Chung did not have a criminal record. He had fewer other matters to be taken into account, and he had driven less frequently for Caccamo than had the appellant. The appellant gave evidence at the sentence hearing. This, in summary, was that he was born in December 1963 and started to use heroin soon after his mother's death in August 1996. Caccamo became his source for the drug. In April 1998, he was sent to prison. By the time of his release in October 1999 he had taken himself off both heroin and methadone. He however resumed contact with Caccamo in about July 2000. He regarded himself as indebted to Caccamo for the latter's kindness to his father when he was in prison. At this point the appellant resumed drug taking. Caccamo, who did not have a valid driver's licence, used the appellant as his driver in return for drugs. Before he was charged the appellant had dissipated, largely on illegal drugs, an inheritance from his father of $200,000. He claimed that his own criminal activities had been done out of desperation and in despair at the loss of his parents. The appellant has a criminal history. He was placed on recognisance of 3 years for cultivating a prohibited plant and fined for possessing a prohibited imported drug in 1991. In May 1998 he was sentenced to imprisonment for supplying a prohibited drug. For that offence he spent 18 months in prison and an additional 18 months on parole. He was on parole at the time of the commission of the principal offence and one of the further offences. The sentencing judge had before him an optimistic pre-sentence report indicating that the appellant had been in regular employment until about 1990. He had apparently made genuine progress towards drug rehabilitation by the time of sentence. The appeal to the Court of Criminal Appeal was upheld2 (Hulme J with whom Heydon JA and Carruthers AJ agreed). A sentence of 8 years imprisonment with a non-parole period of 4 years and 6 months was imposed in lieu of the earlier sentence of 2 years and 6 months with a 15 month non-parole period. The appellant is now eligible for release on parole on 18 January 2007. His sentence will expire on 17 July 2010. In his reasons for judgment Hulme J referred to relevant penalties imposed "The Drug Misuse and Trafficking Act provides for a variety of maximum periods of imprisonment, depending on the quantity and type of drug involved. In the case of the supply, or knowingly take part in the supply, of heroin, the periods are: where the quantity is not more than 1 g (a 'small quantity'), and two years imprisonment (s 30); is dealt with summarily, the matter (ii) where the quantity is not more than 5 g (an indictable quantity), and the matter is dealt with summarily, two years imprisonment (s 31); (iii) where the quantity is less than 250 g and the matter is dealt with on indictment, 15 years imprisonment (s 32); (iv) where the quantity is not less than 250 g but not as much as 1,000 g (a 'commercial quantity'), 20 years imprisonment (s 33(2)); and (v) where the quantity is not less than 1,000 g (a 'large commercial quantity'), life imprisonment (s 33(3))." As to these his Honour observed4: 2 R v Markarian (2003) 137 A Crim R 497. (2003) 137 A Crim R 497 at 501 [17]. (2003) 137 A Crim R 497 at 501 [18]. "Although this summary makes it clear that the maximum sentences prescribed are not proportional to quantities, it is clear that, all other things being equal, Parliament intended that the greater the quantity, the higher the sentence should be. Of course, that is not to say that all other matters relevant to sentence should not also have their proper weight5." His Honour then referred to other judgments6 of the Court of Criminal Appeal of New South Wales in which statements drawing attention to the need in sentencing to deter criminal conduct, and to protect the public, without losing sight of tailoring the sentence to the particular circumstances of the offence charged, and to the ensuring of "reasonable proportionality" in that regard, have been made. Hulme J was of the opinion that not one of the principles reflected in the statements to which we have referred was applied by the sentencing judge. He was influenced by his own experience as a trial judge. He said7: "Much, if not most of the work of the courts is taken up with the consequences of the ravages drugs, particularly heroin, inflict on those who take it and, by them, on society. The survey of imprisoned burglars reported in 'The Stolen Goods Market in New South Wales' conducted by the New South Wales Bureau of Crime Statistics and Research indicated a median expenditure by heroin users of $1,500 per week and the need to steal goods worth a number of times this amount to feed their habit. On average each such offender is thus costing the community through property losses and the like $200,000 per year. And that says nothing about the violence other offenders resort to, or the waste of life and degradation heroin inflicts on the lives of the tens of thousands of persons it comes to dominate. To punish those who help to perpetuate such consequences by sentences such as was imposed in this case is to fail to adhere to the dictates of Parliament, to fail to adhere to basic principles of sentencing, to fail to provide much disincentive to others tempted to offend in the same way, and to fail the community's entitlement to 5 See Wong v The Queen (2001) 207 CLR 584. 6 R v Rushby [1977] 1 NSWLR 594; Dodd (1991) 57 A Crim R 349; Bimahendali (1999) 109 A Crim R 355; R v Whyte (2002) 55 NSWLR 252. (2003) 137 A Crim R 497 at 502-503 [23]. retribution or, as I think is encompassed within that expression, to feel justice has been done." His Honour then turned his mind to the particular circumstances of the offence8: "'The degree by which, having regard to the maximum penalties provided by the Act in question, the [appellant's] conduct ... offend[ed] against the legislative objective of suppressing the illicit traffic in the prohibited drug' was substantial. Albeit it was a long way short of the 999.9 g maximum for a commercial quantity, the 415 g the distribution of which he assisted well exceeded the 250 g upper limit for an indictable quantity for the supply of which Parliament had seen fit to prescribe a maximum penalty of 15 years. The [appellant's] activities extended over a period of almost six months. They amounted to conscious deliberate criminality, day after day, for reward, even if that reward was in the form of drugs. At the time he was on parole – a seriously aggravating feature – and had previously been convicted of supplying prohibited drugs and imprisoned. By his repeated offending the [appellant] 'manifested ... a continuing attitude of disobedience of the law'9. There were also the offences on the Form 1. The second, involving cannabis, carried a penalty of two or 10 years also depending on whether it was prosecuted summarily or on indictment. In that this offence may have been part of the [appellant's] active assistance to Mr Caccamo in the latter's drug dealing activities, it is proper to regard it as part of the same criminal activity. However, in that a different drug was involved, the criminal activity covered a broader spectrum and merited an increase in punishment. It seems likely that the third of the offences in the Form 1 – which being of possession rather than supply, carried a maximum period of imprisonment of two years – was associated with either the operation which was the subject of the first Form 1 offence or the [appellant's] own heroin addiction. It seems very likely that the fourth of these offences, which, under s 527C of the Crimes Act 1900 (NSW) carried a maximum period of imprisonment of six months – was also an incident of the (2003) 137 A Crim R 497 at 503-504 [24]-[28]. 9 Veen v The Queen [No 2] (1988) 164 CLR 465 at 477. [appellant's] own commercial dealing. It does not disadvantage the [appellant] to so regard both of these offences." Hulme J did not overlook the subjective matters to which regard should be had, the first of which was the appellant's pleas to the principal offence and the further offences. He pointed out however that these were only entered after the committal, and that the evidence against the appellant which included the results of surveillance and taped records of conversations, was strong. His Honour then had regard to the appellant's apparent contrition, his addiction and his attempts to rehabilitate himself. All of these had to be weighed, his Honour said, with the compelling counter consideration, of two previous offences of supplying heroin. And, despite his reservations about the correctness of an earlier line of authority in the New South Wales Court of Criminal Appeal10 holding that there should be a significant discount in any additional penalty on account of further offences which were admitted, Hulme J accepted that he must give effect to those authorities in this case. His Honour also had regard to the need to apply the totality principle. Later in his judgment his Honour again referred to his personal experience as a trial judge11: "There is some weight of authority in favour of sentences being determined by instinctive synthesis12. However, as one who has had to carry out the sentencing task both in this Court and at first instance, and to examine innumerable sentences imposed by others, my experience is that there are far more advantages in reasoning to a conclusion. I confess that in a significant number of the cases which come to this Court, the instinctive synthesis approach adopted in the cases under appeal have made me wonder whether figures have not just been plucked out of the air. Indeed that is what seems to have occurred in this case. His Honour, having referred to the objective and subjective features, including the [appellant's] addiction and efforts towards rehabilitation, having expressed the opinion that the [appellant] was entitled to a discount of 25% for his plea of guilty, and that he proposed to extend some leniency because Chung was treated very leniently, said simply 'In my view, the starting 10 Perese (2001) 126 A Crim R 508; Kay (2002) 132 A Crim R 72; R v AEM [2002] NSWCCA 58. 11 (2003) 137 A Crim R 497 at 505 [33]-[35]. 12 See R v Whyte (2002) 55 NSWLR 252 and the cases therein cited. point for this sentence would have been a sentence in the order of three and a half years but with the offender's plea of guilty, that translates to a sentence of 30 months, namely, two and a half years'. No reasons were advanced in support of the three and a half years figure or to explain why it was not five, or seven or 10 years. I acknowledge that, in many sentencing exercises, there will be an element of subjective choice or value judgment which it may be impossible to avoid but it seems to me far preferable that reasoning be apparent in respect of the more significant features than occurred in relation to what was his Honour's fundamental starting point. Neither does it seem very satisfactory for me, sitting on appeal, simply to say 'His Honour's instinctive synthesis was manifestly wrong. My instinctive synthesis leads to the view his starting point should have been five (or seven or 10) years'." Intervention by the Court of Criminal Appeal was warranted, his Honour said13, for these reasons: that "Had the [appellant's] offence and circumstances fallen within the category of a worst case falling within the statutory provisions, the sentence should have been not less than the 15 years maximum for the offence of supplying an indictable quantity. I appreciate that the charge the maximum period of specified a commercial quantity, imprisonment prescribed for that offence is 20 years and that the quantity involved in this offence was only a little more than 40% of the maximum commercial quantity. However, Parliament cannot have intended that, other things being equal, the penalty for supplying more than 250 g should be less than for supplying that quantity. The absence of proportionality in the maximum sentences prescribed is perhaps partly explicable upon the basis that the severity of imprisonment is not simply proportional to its length. Having regard to the sorts of terms under consideration for drug dealing a sentence of one of the longer periods is liable to have an impact on an offender's life in terms of wife, children, job prospects and the like far greater than a sentence, say half as long. 13 (2003) 137 A Crim R 497 at 505-506 [37]-[38]. But be that as it may, in face of the totality of the statutory provisions and the principles for which I have cited Veen v The Queen (No 2)14 and R v Peel15, it seems to me that the maximum prescribed for the supply of 250 g is not too high a starting point. In R v Perrier (No 2)16, the Victorian Court of Criminal Appeal thought the sentences prescribed for lesser quantities relevant to the sentence appropriate for higher quantities." After referring again to the subjective factors which he had earlier noted in his judgment his Honour said this17: "So far as the [appellant's] role is concerned, he was of course not the principal and the charge was not to supply but only of being knowingly involved in supply. While at times he seems to have been no more than a chauffeur, on other occasions his role was substantially more significant. In light of the matters referred to in this paragraph, I would reduce my 15 year starting point by about one-third. A number of factors lead me to the view that the reduction on this account should not be greater. These include the sorts of considerations spoken of in Le Cerf18. They include also my view that the severity of sentences is not simply proportionate to length. They include the nature of the [appellant's] activities and the fact that they extended over a much longer period than that during which a courier is normally involved. The conclusion derives some support also from the relativity between the maximum sentences available for importing heroin and the pattern of sentences imposed on couriers involved in the importation of quantities in the top part of trafficable quantities of that drug. Based on the decisions to which I referred, I concluded in R v Spiteri19 that nine years out of a maximum of 16.5 or 17 years seemed to be the pattern. Of course those figures show a greater difference than one-third and if the comparison is to be made 14 (1988) 164 CLR 465. 15 [1971] 1 NSWLR 247. 16 [1991] 1 VR 717 at 722. 17 (2003) 137 A Crim R 497 at 506 [40]. 18 R v Le Cerf (1975) 13 SASR 237. 19 [1999] NSWCCA 3 at [33]. between the circumstances here and those in the cases to which I referred it is necessary to recognise the differences. I need not detail these but they include that most of those cases included a plea of guilty and I am not at this stage taking any account of such a plea of guilty. One must recognise also the difference in nature and extent of the [appellant's] activities compared with those of persons regarded as couriers." Despite his reservations about the appropriateness of a discount of as much as 25%, Hulme J was disposed to allow such a discount to any sentence that he concluded should be imposed, in part at least because the appeal was a Crown appeal. That discount should, he said, be regarded however as the sum of all discounts which might otherwise be made in consequence of the plea and the appellant's admission of guilt to the further offences. In dealing with those offences his Honour said20: "Operating in the other direction are the offences on the Form 1. I have said sufficient to indicate my view about them save and except that principles of totality have also to be taken into account. On account of the matters on the Form 1, particularly the first and second of these, I would increase the sentence otherwise appropriate by between 18 months and two years." Because of the great disparity in criminality between Chung and the appellant, his Honour did not think that any question of parity of penalties arose. His Honour was however conscious that the sentence that he would substitute was a high one21: "The second of these further topics to which I should refer arises from the statistics kept by the Judicial Commission. By comparison with those statistics, the sentence I propose is a high one. Those statistics show that, in the period from July 1995 to December 2001, there were 22 offenders sentenced in respect of the offence of being knowingly concerned in the supply of (not less than) a commercial quantity of heroin. Twenty one were sent to prison. The longest full term of imprisonment was eight years, imposed on two offenders, and only seven offenders received full terms of six years or more. The statistics indicate that all the 20 (2003) 137 A Crim R 497 at 507 [45]. 21 (2003) 137 A Crim R 497 at 509 [55]-[56]. persons referred to in the last sentence pleaded guilty and, except for one of the seven, had matters on a Form 1. This comparison raises the question whether the sentence I propose is the lowest which should properly be imposed for the [appellant's] offending but, having reflected on the question, I am satisfied that nothing less will properly reflect the considerations to which I have referred." The appeal to this Court In this Court the appellant argues that the Court of Criminal Appeal erred by adopting a staged approach to the calculation of the sentence, in taking a maximum penalty as a starting point for that calculation, and, by, in reality impermissibly imposing a separate penalty for the other offences. Further, the appellant contends that the sentence was, in any event, so plainly unjust that an error in the sentencing discretion was to be inferred. The respondent argued that if at all, it was only in form and not in substance, that Hulme J embarked upon an approach of a two-tiered or sequential kind. This, the respondent accepted, appeared from the order and way in which his Honour dealt with the relevant matters: the statutory provisions and the purposes of them; the worst category of cases; deterrence and public security; proportionality; subjective matters; the circumstances of the offences; criminal history; double jeopardy on a Crown appeal; and the need or otherwise for parity and comparable sentences. Nonetheless, the respondent submitted, his Honour, having taken all possible relevant issues and matters into account, had not been shown to have erred. The appellant submitted that Hulme J fell into error in taking as his starting point, the quantity of heroin the subject of the principal offence. He acknowledged that quantity was clearly a relevant, but contended that it was not the determinative factor. In this connexion he cited the joint judgment of Gaudron, Gummow and Hayne JJ in Wong v The Queen22: "These are reasons enough for concluding that the Court of Criminal Appeal was in error in attributing chief importance to the weight of narcotic in fixing sentences for the offence. The error of the Court is, however, more deep seated than the factual difficulties to which reference has been made. The selection of weight of narcotic as the chief factor to 22 (2001) 207 CLR 584 at 609 [70]. be taken into account in fixing a sentence represents a departure from fundamental principle." Hulme J, the appellant argued, then engaged in an impermissible arithmetical process after rejecting what has been called an approach by way of instinctive synthesis. His Honour proceeded by referring to a maximum penalty of 15 years, reducing that period by a third because the appellant's role was of a lesser kind than that of Caccamo, making a further reduction of 25% on account of the utilitarian value of the plea and contrition, increasing the sentence by 18 months to 2 years because of the further offences, and taking into account the prospects of various other factors pointing rehabilitation, deterrence, the security of the community, and the double jeopardy arising by reason of a Crown appeal. in different directions, The decision It is not useful to begin by asking a general question like was a "staged sentencing process" followed. That is not useful because the expression "staged sentencing process" may mean no more than that the reasoning adopted by the sentencer can be seen to have proceeded sequentially. Or it may mean only that some specific numerical or proportional allowance has been made by the sentencer in arriving at an ultimate sentence on some account such as assistance to authorities or a plea of guilty. Neither the conclusion that a sentencer has reasoned sequentially, nor the observation that a sentencer has quantified the allowance made, for example, on account of the offender's plea of guilty, or the offender's assistance to authorities, of itself, reveals error. Indeed provisions like s 21E of the Crimes Act 1914 (Cth) may require the sentencer, in some circumstances, to identify the amount by which a sentence has been reduced on some account. As with other discretionary judgments, the inquiry on an appeal against sentence is identified in the well-known passage in the joint reasons of Dixon, Evatt and McTiernan JJ in House v The King23, itself an appeal against sentence. Thus is specific error shown? (Has there been some error of principle? Has the sentencer allowed extraneous or irrelevant matters to guide or affect the decision? Have the facts been mistaken? Has the sentencer not taken some material consideration into account?) Or if specific error is not shown, is the result embodied in the order unreasonable or plainly unjust? It is this last kind of error that is usually described, in an offender's appeal, as "manifest excess", or in a prosecution appeal, as "manifest inadequacy". 23 (1936) 55 CLR 499 at 504-505. Any consideration of alleged error of principle must now begin in any applicable legislation governing sentencing either generally or in the particular case. In sentencing for a federal offence, it must begin by considering Pt 1B of the Crimes Act. In the present case, it must begin with the provisions of the Sentencing Act. Express legislative provisions apart, neither principle, nor any of the grounds of appellate review, dictates the particular path that a sentencer, passing sentence in a case where the penalty is not fixed by statute, must follow in reasoning to the conclusion that the sentence to be imposed should be fixed as it is. The judgment is a discretionary judgment and, as the bases for appellate review reveal, what is required is that the sentencer must take into account all relevant considerations (and only relevant considerations) in forming the conclusion reached. As has now been pointed out more than once, there is no single correct sentence24. And judges at first instance are to be allowed as much flexibility in sentencing as is consonant with consistency of approach and as accords with the statutory regime that applies25. The proceedings in the Court of Criminal Appeal being a prosecution appeal, brought pursuant to s 5D of the Criminal Appeal Act 1912 (NSW), it was, of course, necessary for the prosecution to show error in the sentence passed below – either specific error or manifest inadequacy. As the whole Court pointed out in Lowndes v The Queen26, a court of criminal appeal may not substitute its own opinion for that of the sentencing judge merely because the appellate court would have exercised its discretion in a manner different from the manner in which the sentencing judge exercised his or her discretion. In the present case, contrary to what ordinarily would be expected, the Court of Criminal Appeal did not state explicitly that it was of the view that the sentence below was manifestly inadequate. It was nonetheless apparent from the order ultimately made by the Court that it had reached this conclusion. The appellant submitted in this Court that the Court of Criminal Appeal was wrong to find that the sentence originally passed was manifestly inadequate. Because, for 24 Pearce v The Queen (1998) 194 CLR 610 at 624 [46]. 25 Johnson v The Queen (2004) 78 ALJR 616 at 618 [5] per Gleeson CJ, 624 [26] per Gummow, Callinan and Heydon JJ; 205 ALR 346 at 348, 356. 26 (1999) 195 CLR 665 at 671-672 [15]. the reasons that follow, the re-sentencing discretion of the Court of Criminal Appeal miscarried, it will be necessary for the matter to be remitted to the Court of Criminal Appeal. It is not necessary in those circumstances to decide whether the original sentence was manifestly inadequate. That will be a matter for the Court of Criminal Appeal to consider afresh in the further hearing of the prosecution appeal. Legislatures do not enact maximum available sentences as mere formalities. Judges need sentencing yardsticks. It is well accepted that the maximum sentence available may in some cases be a matter of great relevance. In their book Sentencing, Stockdale and Devlin27 observe that: "A maximum sentence fixed by Parliament may have little relevance in a given case, either because it was fixed at a very high level in the last century ... or because it has more recently been set at a high catch-all level ... At other times the maximum may be highly relevant and sometimes may create real difficulties ... A change in a maximum sentence by Parliament will sometimes be helpful [where it is thought that the Parliament regarded the previous penalties as inadequate]." It follows that careful attention to maximum penalties will almost always be required, first because the legislature has legislated for them; secondly, because they invite comparison between the worst possible case and the case before the court at the time; and thirdly, because in that regard they do provide, taken and balanced with all of the other relevant factors, a yardstick. That having been said, in our opinion, it will rarely be, and was not appropriate for Hulme J here to look first to a maximum penalty28, and to proceed by making a proportional deduction from it. That was to use a prescribed maximum erroneously, as neither a yardstick, nor as a basis for comparison of this case with the worst possible case. That he used the maximum penalty impermissibly appears from his Honour's particular deference to it in this passage29: 27 Stockdale and Devlin, Sentencing, (1987), pars 1.16-1.18. 28 The maximum selected by his Honour was not, as will appear, the maximum available in respect of the principal offence. 29 (2003) 137 A Crim R 497 at 506 [37]. "Parliament cannot have intended that, other things being equal, the penalty for supplying more than 250 g should be less than for supplying that quantity." The form of the statement is explained by the fact that his Honour did not start with the maximum penalty for an offence involving the quantity in question, but used another maximum penalty as his starting point, that is, the maximum for an offence in the category of seriousness immediately below that of the principal offence. The appellant's submission that the passage just quoted involved too great an emphasis upon quantity without regard to the facts of the case, should be accepted. True it is that his Honour did not overlook the objective facts, or indeed any other matters relating to penalty, but having started where he did, at a maximum, and then making deductions from it, he did not make, even in a provisional way, an assessment of the sentence called for by the objective facts. It might or might not be appropriate for a trial judge to state such a provisional view. A judge would rarely be in error in not doing so. It is, after all, a provisional position only. A serious fallacy in his Honour's reasoning is that it assumes that any case involving more than 250 grams of heroin is likely to be a worse case than any case involving only 250 grams or less. That cannot be so in the virtually absolute terms in which his Honour puts it. Little imagination is required to envisage a case involving a relatively small quantity of heroin, as being of very great seriousness, for example, supply to create an addiction in an infant. The qualification which his Honour did make of "other things being equal" was not one to which he gave effect, for in adopting his starting point of 15 years he had no regard to the sorts of matters which could have had any equalising effect. The further defect in the reasoning is a related one. Having started with a penalty which would have been appropriate for the worst possible kind of offence of supply involving up to 250 grams of heroin, Hulme J made no attempt to identify the nature of such a case and to make a comparison of the facts of the principal offence with it. For these reasons the appellant's first ground of appeal succeeds. The appellant's next submission invited the Court to reject sequential or two-tiered approaches to sentencing taking as their starting point the maximum penalty available, and to state as a universal rule to the extent that legislation does not otherwise dictate, that a process of instinctive synthesis is the one which sentencing courts should adopt. No universal rules can be stated in those terms. As was pointed out earlier, much turns on what is meant by a "sequential or two-tiered" approach and, likewise, the "process of instinctive synthesis" may wrongly be understood as denying the requirement that a sentencer give reasons for the sentence passed. So, too, identifying "instinctive synthesis" and "transparency" as antonyms in this debate misdescribes the area for debate. In general, a sentencing court will, after weighing all of the relevant factors, reach a conclusion that a particular penalty is the one that should be imposed. As Gaudron, Gummow and Hayne JJ said in Wong30: "Secondly, and no less importantly, the reasons of the Court of Criminal Appeal suggest a mathematical approach to sentencing in which there are to be 'increment[s]' to, or decrements from, a predetermined range of sentences. That kind of approach, usually referred to as a 'two- stage approach' to sentencing, not only is apt to give rise to error, it is an approach that departs from principle. It should not be adopted. It departs from principle because it does not take account of the fact that there are many conflicting and contradictory elements which bear upon sentencing an offender. Attributing a particular weight to some factors, while leaving the significance of all other factors substantially unaltered, may be quite wrong. We say 'may be' quite wrong because the task of the sentencer is to take account of all of the relevant factors and to arrive at a single result which takes due account of them all. That is what is meant by saying that the task is to arrive at an 'instinctive synthesis'. This expression is used, not as might be supposed, to cloak the task of the sentencer in some mystery, but to make plain that the sentencer is called on to reach a single sentence which, in the case of an offence like the one now under discussion, balances many different and conflicting features. In R v Thomson31, Spigelman CJ reviewed the state of the authorities in Australia that deal with the 'two-stage' approach of arriving at a sentence, in which an 'objective' sentence is first determined and then 'adjusted' by some mathematical value given to one or more features of the case, such as a plea of guilty or assistance to authorities. As the reasons in Thomson reveal, the weight of authority in the intermediate appellate courts of this country is clearly against adopting two-stage sentencing and 30 (2001) 207 CLR 584 at 611-612 [74]-[76] (some footnotes omitted). 31 (2000) 49 NSWLR 383. favours the instinctive synthesis approach. In this Court, McHugh and Hayne JJ, in dissenting opinions in AB v The Queen32 expressed the view that the adoption of a two-stage approach to sentencing was wrong. Kirby J expressed a contrary view. We consider that it is wrong in principle. The nature of the error can be illustrated by the approach adopted by the Court of Criminal Appeal in these matters. Under that approach, the Court takes, for example, the offender's place in the hierarchy and gives that a particular significance in fixing a sentence but gives the sentencer no guidance, whatever, about whether or how that is to have some effect on other elements which either are to be taken into account or may have already been taken into account in fixing the guideline range of sentences. To take another example, to 'discount' a sentence by a nominated amount, on account of a plea of guilty, ignores difficulties of the kind to which Gleeson CJ referred in R v Gallagher33 when he said that: 'It must often be the case that an offender's conduct in pleading guilty, his expressions of contrition, his willingness to co-operate with the authorities, and the personal risks to which he thereby exposes himself, will inter-related considerations, and an attempt to separate out one or more of those considerations will not only be artificial and contrived, but will also be illogical.' form a complex of So long as a sentencing judge must, or may, take account of all of the circumstances of the offence and the offender, to single out some of those considerations and attribute specific numerical or proportionate value to some features, distorts the already difficult balancing exercise which the judge must perform." (emphasis in original) Following Wong benches of five judges in New South Wales in R v Sharma34 and R v Whyte35 and in South Australia in R v Place36, have sought to 32 (1999) 198 CLR 111. 33 (1991) 23 NSWLR 220. 34 (2002) 54 NSWLR 300. 35 (2002) 55 NSWLR 252. 36 (2002) 81 SASR 395. state general sentencing principles to be applied in those States. In the first two of these cases the Court of Criminal Appeal of New South Wales endorsed an approach of instinctive synthesis as a general rule but also accepted as a qualification that departure from it may be justified to allow for separate consideration of the objective circumstances of the crime. On occasions intermediate courts of appeal have however refused to find error where a staged approach has been undertaken. In Place37 the Court of Criminal Appeal of South Australia (Doyle CJ, Prior, Lander, Martin and Gray JJ) although it rejected a staged approach in general, made it clear that a reduction of penalty for a plea of guilty should be identified. This approach, their Honours held, was in conformity with the relevant sentencing legislation of South Australia. Following the decision of this Court in Wong it cannot now be doubted that sentencing courts may not add and subtract item by item from some apparently subliminally derived figure, passages of time in order to fix the time which an offender must serve in prison. That is not to say that in a simple case, in which, for example, the circumstances of the crime have to be weighed against one or a small number of other important matters, indulgence in arithmetical deduction by the sentencing judges should be absolutely forbidden. An invitation to a sentencing judge to engage in a process of "instinctive synthesis", as useful as shorthand terminology may on occasions be, is not desirable if no more is said or understood about what that means. The expression "instinctive synthesis" may then be understood to suggest an arcane process into the mysteries of which only judges can be initiated. The law strongly favours transparency. Accessible reasoning is necessary in the interests of victims, of the parties, appeal courts, and the public. There may be occasions when some indulgence in an arithmetical process will better serve these ends. This case was not however one of them because of the number and complexity of the considerations which had to be weighed by the trial judge. The third ground is that the Court of Criminal Appeal in substance and in fact wrongly imposed a separate sentence of 18 months to 2 years for the further offences. To understand this ground it is necessary to explain the relevant provisions in the Sentencing Act. Division 3 of Pt 3 of the Sentencing Act is concerned with offences other than the particular or principal offence with which a person is charged, and the effect, which in some circumstances an admission of the commission of the former should have upon the penalty to be imposed for the latter. Section 31 of 37 (2002) 81 SASR 395 at 424-425 [80]-[83]. the Sentencing Act defines an additional charge as a further offence. Pursuant to s 32 of the Sentencing Act the prosecutor may file in the court a document (Form 1) specifying other offences with which the offender has been charged but not convicted and that he has indicated he wishes to be taken into account when the principal offence with which he has been charged is dealt with. The relevant requirements of request and the exercise of the prosecutor's discretion were satisfied here. So too the sentencing court in its discretion and on the admission of guilt by the appellant decided to take the further offences into account in dealing with the appellant for the principal offence. Although the appellant did not initially put the matter this way it emerged in argument that his substantial complaint with respect to his third ground of appeal was that the Court of Criminal Appeal ignored the negative direction in s 34(1) of the Sentencing Act which provides as follows: "If a court takes a further offence into account under this Division, the court may make such ancillary orders as it could have made had it convicted the offender of the offence when it took the offence into account, but may not impose a separate penalty for the offence." We are not satisfied that the Court of Criminal Appeal did err as contended. For the reasons which we have given the errors of the Court of Criminal Appeal were errors of principle made at the outset, and the effect of referring in terms to an increase in the sentence for the principal offence of between 18 months to 2 years, tended to compound the initial error rather than to constitute a separate error in the application of the Sentencing Act. Just as on occasions, albeit that they may be rare ones, it may not be inappropriate for a sentencing court to adopt an arithmetical approach, it may be useful and certainly not erroneous for a sentencing court to make clear the extent to which the penalty for the principal offence has been increased on account of further offences to which an offender has admitted guilt. Here Hulme J sought to, and in our opinion did make it clear, that the additional period of imprisonment was imposed not as a separate penalty for the further offences but by way of increase of penalty for the principal offence. There was a fourth argument advanced by the appellant: that the sentence of the Court of Criminal Appeal was in any event manifestly excessive and that the sentence of the sentencing judge should be restored. It would need a very exceptional case indeed for this Court to hold that a sentence of an intermediate criminal appellate court of a State was manifestly excessive. This Court is not a sentencing court. It would be most unlikely to be sufficiently aware, for example, of relevant matters such as the prevalence of a particular offence and sentencing patterns in a particular State. This is not a case in which this Court should or could usefully intervene with respect to the duration of sentence and the ground relating to its claimed excessiveness fails. The appellant's appeal must be upheld. The appellant submitted that the sentence of the sentencing judge should be restored. One arguable ground for doing so is that the appeal to the Court of Criminal Appeal was a Crown appeal and that it would be unfair to subject the appellant to a further hearing of it. We do not think that the argument should however be accepted. True it is that in Crown appeals different considerations from those arising on an offender's appeal arise and have to be taken into account. Nonetheless the Crown is entitled to proper consideration of an appeal duly made. That has not happened here. This Court is not, as we have said, in general a sentencing court. We are unable to say whether, having regard to comparable sentences in New South Wales and other relevant matters, the sentence of the sentencing judge is correct or not. We would therefore order that the appeal be upheld, the sentence and orders of the Court of Criminal Appeal of New South Wales be quashed and that the matter be remitted to the Court of Criminal Appeal for disposition of the appeal in accordance with these reasons. McHugh 48 McHUGH J. This is an appeal against a sentence imposed by the Court of Criminal Appeal of New South Wales allowing a Crown appeal against the sentence imposed at first instance. The appellant was originally sentenced to two years and six months with a non-parole period of 15 months. The Court of Criminal Appeal re-sentenced him to a term of eight years imprisonment with a non-parole period of four years and six months. The appellant had pleaded guilty to a charge that he knowingly took part in the supply of a prohibited drug, namely heroin, in a commercial quantity – 415 grams. He had further offences taken into account in accordance with the Form 1 process. They included other drug supply offences. In my opinion, the Court of Criminal Appeal made a number of errors in imposing the sentence that it did. They are set out in the joint judgment of the Court. The errors are such that the decision of the Court of Criminal Appeal must be set aside. If there were no more to the case, I would need to do no more than agree with the joint judgment. But there is more to the case than whether or not the Court of Criminal Appeal erred in imposing the sentence that it did. The appellant was granted special leave to appeal in this case because he contended that the key question in the case was whether "two-tier sentencing" in contrast to "instinctive synthesis" is the correct approach to sentencing. In this case, the Court of Criminal Appeal applied the "two-tier" approach. It erred in doing so. By two-tier sentencing, I mean the method of sentencing by which a judge first determines a sentence by reference to the "objective circumstances" of the case. This is the first tier of the process. The judge then increases or reduces this hypothetical sentence incrementally or decrementally by reference to other factors, usually, but not always, personal to the accused. This is the second tier. By instinctive synthesis, I mean the method of sentencing by which the judge identifies all the factors that are relevant to the sentence, discusses their significance and then makes a value judgment as to what is the appropriate sentence given all the factors of the case. Only at the end of the process does the judge determine the sentence. The two-tier sentencer contends that using the instinctive synthesis is inimical to the judicial process and is an exercise of arbitrary judicial power, unchecked by the giving of reasons. The two-tier sentencer claims, as Hulme J did in this case, that, where the sentence is the result of an instinctive synthesis, it makes one "wonder whether figures have not just been plucked out of the air"38. The instinctive synthesiser, on the other hand, contends that the two-tier sentencer mistakes an illusion of exactitude for the reality of sentencing because there is no method of sequential arithmetical reasoning that produces the correct 38 R v Markarian (2003) 137 A Crim R 497 at 505 [33]. McHugh sentence for any case. A sentence can only be the product of human judgment, based on all the facts of the case, the judge's experience, the data derived from comparable sentences and the guidelines and principles authoritatively laid down in statutes and authoritative judgments. The instinctive synthesiser asserts that sentencing is not an exercise in linear reasoning because the result of each step in the process is not the logical foundation for the next step in the process. Nor in practice can it be an exercise in multiple regression where one starts with particular coefficients and adds to or subtracts from their result by changing the weighting of each variable as new variables are added to the process. The circumstances of criminal cases are so various that they cannot be the subject of mathematical equations. Sociological variables do not easily lend themselves to mathematization. Hence, when judges embark on a process that seeks to adjust incrementally or decrementally a hypothetical sentence, "they but illustrate the way in which the human mind tries, and vainly tries, to give to a particular subject matter a higher degree of definition than it will admit", as Lord Porter said39 in another context. In AB v The Queen40, I gave my reasons for preferring the instinctive synthesis approach. In my view, the judge who purports to compile a benchmark sentence as a starting point inevitably gives undue – even decisive – weight to some only of the factors in the case. Furthermore, the judge falls into the error of determining that notional sentence by reference to a hypothetical crime derived from some only of the circumstances of the case. Instead of sentencing this accused for his or her criminality, the judge sentences the person for another crime and adjusts the notional sentence by reference to factors that are additional to the objective circumstances. Indeed, there are some offences – manslaughter is an example – where an attempt to fix a first-tier sentence by reference to the objective circumstances is meaningless. How can a judge possibly fix a first-tier or any sentence for the mother who has killed her newborn baby without taking into account her personal circumstances? Moreover, by concentrating on the objective circumstances of a crime, the judge is giving effect, and ultimately greater weight, to the retributive or deterrent theory of sentencing. Indeed, the judgment of the Court of Criminal Appeal in this case makes it clear that the Court thought that the issues of retribution and deterrence were the dominant issues in the case. Consciously or unconsciously, the judge who commences with a notional sentence downplays the importance of mitigation, reformation and rehabilitation in the sentencing process. Cognitive psychology has long emphasised the difficulty that the 39 The Commonwealth v Bank of NSW (1949) 79 CLR 497 at 642; [1950] AC 235 at 40 (1999) 198 CLR 111 at 120-123 [13]-[19]. McHugh human mind has in giving correct weightings to each of a number of variables. In particular, people frequently fail to distinguish between the strength of evidence and its relative weight in determining the outcome or prediction. As Griffin and Tversky have pointed out41: "The extensive experimental literature on judgment under uncertainty indicates that people do not combine strength and weight in accord with the rules of probability and statistics." The tendency of the mind is to seize on one or two variables – usually those with which the decision-maker is most familiar or which seem most cogent – and give that variable or those variables undue weight. Overconfidence – but sometimes underconfidence – in the significance of factors or the accuracy of the assessment The tendency to err must increase when particular is very common. circumstances are selected as the starting point for the decision and further factors are allowed to modify the starting point. One fact that critics of the instinctive synthesis approach do not face up to – assuming they are aware of it – is that the first tier of the two-tier approach – unless it is the maximum sentence – is itself derived by an instinctive synthesis of the "objective circumstances" of the case. Or on another view of the two-tier approach, the first-tier sentence is the product of a value judgment that is proportionate to the offence. But as the Victorian Court of Criminal Appeal said "What is a sentence proportionate to an offence is a matter of discretion and there must in most cases be a range of sentences open to a sentencing judge which are proportionate to the offence. There cannot be said to be a sentence which is the proportionate sentence ... Thus to attempt to fix a proportionate sentence before fixing the sentence to be imposed will only multiply the possibilities of error. Upon what facts is the proportionate sentence to be fixed?" (emphasis in original) Analysing the process involved in two-tier sentencing reveals that its appearance of objectivity and unfolding reason is illusory. Whether the starting point is a sentence derived from the objective circumstances or a sentence proportionate to the offence, the correctness of the sentence always depends on the correctness of the value judgment involved in assessing the first-tier sentence. But even if the judge can correctly assess the first-tier sentence, the judge must still correctly assess the quantum of the increment or decrement for each factor in 41 "The Weighing of Evidence and the Determinants of Confidence", (1992) 24 Cognitive Psychology 411 at 413. 42 [1990] VR 951 at 960. McHugh the process. With great respect to those who think the contrary, it would require a judge to have the statistical genius and mental agility of a Carl Friedrich Gauss43 to arrive at the correct sentence using these methods. As Gaudron, Gummow and Hayne JJ pointed out in Wong v The Queen44, mathematical increments and decrements to some pre-determined notional sentence are "apt to give rise to error". The Court of Criminal Appeal's judgment in the present case is a nice illustration of this tendency. In giving the leading judgment, Hulme J said "that the maximum [15 years] prescribed for the supply of 250 g is not too high a starting point."45 His Honour then said that only five topics removed the appellant's sentence "from a worst case category – his role, his plea, the finding of contrition, his addiction, and matters which fall within the topic of rehabilitation."46 The learned judge then went on to say47: "In light of the matters referred to in this paragraph, I would reduce my 15 year starting point by about one-third. A number of factors lead me to the view that the reduction on this account should not be greater. These include the sorts of considerations spoken of in Le Cerf48. They include also my view that the severity of sentences is not simply proportionate to length. They include the nature of [Markarian's] activities and the fact that they extended over a much longer period than that during which a courier is normally involved. The conclusion derives some support also from the relativity between the maximum sentences available for importing heroin and the pattern of sentences imposed on couriers 43 This was the name that Gauss used in signing his works although he was christened Johann Friedrich Carl Gauss. Gauss made many mathematical discoveries. In the realm of statistics, he invented the "least squares" method that is indispensable "in all work where the 'most probable' value of anything that is measured is to be inferred from a large number of measurements." Another statistical tool that we owe to Gauss is "[t]he Gaussian law of normal distribution of errors and its accompanying bell-shaped curve [that] is familiar today to all who handle statistics" (Bell, Men of Mathematics, (1937) at 227). 44 (2001) 207 CLR 584 at 611 [74]. 45 (2003) 137 A Crim R 497 at 506 [38]. 46 (2003) 137 A Crim R 497 at 506 [39]. 47 (2003) 137 A Crim R 497 at 506 [40]. 48 R v Le Cerf (1975) 13 SASR 237. McHugh involved in the importation of quantities in the top part of trafficable quantities of that drug." This reasoning process was wholly dependent on a series of value judgments and quantification of intangibles. Ironically, his Honour, having criticised49 the primary judge for not advancing reasons for his starting point of 3.5 years, justified the maximum as the starting point by simply referring to "the totality of the statutory provisions and the principles for which I have cited Veen v The Queen [No 2]50 and R v Peel51"52. But with great respect, this is a less than illuminating revelation of reasons. What it shows is that almost invariably the major premise of the two-tiered sentence is a value judgment based on the judge's instinct or intuition. His Honour then differentiated the present case from the "worst case category"53 by reference to a number of identified factors. But how does a judge decide the "worst case category", except by judicial imagination? The next step was to assert that these factors required a one-third reduction from the maximum sentence attributable to the "worst case category". But his Honour did not use the maximum sentence for the offence with which the appellant was charged. Rather, he used the maximum for the offence of supplying less than 250 grams of heroin, apparently on the basis that "Parliament cannot have intended that, other things being equal, the penalty for supplying more than 250 g should be less than for supplying that quantity."54 His Honour did not provide any other justification for this approach. Moreover, is not this one-third reduction a figure "plucked out of the air"? Hulme J then applied a 25% discount for the appellant's guilty plea in respect of all the offences making "it clear that it covers all credit [Markarian] may be entitled to in consequence of the plea."55 Again the 25% figure – which the trial judge had also applied – is an arbitrary figure even though it is a discount for pleading guilty that is frequently applied by judges. 49 (2003) 137 A Crim R 497 at 505 [32]. 50 (1988) 164 CLR 465. 51 [1971] 1 NSWLR 247. 52 (2003) 137 A Crim R 497 at 506 [38]. 53 (2003) 137 A Crim R 497 at 506 [39]. 54 (2003) 137 A Crim R 497 at 506 [37]. 55 (2003) 137 A Crim R 497 at 507 [44]. McHugh The result at this stage was that the 15 years starting point had been reduced by one-third to 10 years and then reduced by 25%. This would have resulted in a sentence of 7.5 years. His Honour then said56: "Operating in the other direction are the offences on the Form 1. I have said sufficient to indicate my view about them save and except that principles of totality have also to be taken into account. On account of the matters on the Form 1, particularly the first and second of these, I would increase the sentence otherwise appropriate by between 18 months and two years." This statement would seem to suggest that the sentence of 7.5 years – a figure which Hulme J never specifically mentioned but which was already determined before this statement – would increase to either 9 or 9.5 years. But this is not what occurred, and I do not understand why it did not occur. Instead, Hulme J arrived at a sentence of eight years. Nothing in the remaining reasons reveals why the sentence was not increased beyond eight years. After referring to the appellant's prospects of successful rehabilitation, his Honour said57: "As [his] efforts to date in this regard would seem to have been appreciably more than token, I am disposed to reduce the sentence to a limited extent, but because the value of his efforts depends so much on their success, it seems to me that the topic should be reflected more in the non-parole period than in the head sentence." His Honour said that there was nothing in Markarian's evidence or the Pre-Sentence Report "which has any appreciable significance."58 He referred to an affidavit of the appellant and said it could not have "any material impact on the question of what should be a proper sentence."59 His Honour then said60: "Thus, on the basis of the matter to which I have referred, I would impose on [Markarian] a sentence of eight years. In proposing that figure I make it clear that in arriving at it I have taken account of the fact of the double jeopardy to which [he] has been subjected and selected a sentence which is the lowest that could reasonably be imposed." 56 (2003) 137 A Crim R 497 at 507 [45]. 57 (2003) 137 A Crim R 497 at 507 [46]. 58 (2003) 137 A Crim R 497 at 508 [47]. 59 (2003) 137 A Crim R 497 at 508 [48]. 60 (2003) 137 A Crim R 497 at 508 [49]. McHugh Given his Honour's remarks about rehabilitation, Markarian's evidence, the Pre-Sentence Report and the affidavit, it seems unlikely that his Honour gave the appellant a credit of up to two years for these factors. But perhaps he did. Or it may be that it was taken into account earlier in arriving at the starting point of the sentencing process. Or maybe his Honour decided intuitively that a sentence of 9 or 9.5 years was too high. His Honour concluded by saying that neither the principles of parity nor the sentencing statistics "kept by the Judicial Commission"61 required a sentence different from the eight years his Honour proposed. His Honour acknowledged that the sentence was comparatively high and was imposed on a Crown appeal but held that in all the circumstances it was the lowest appropriate sentence that could be imposed. This suggests that the two-tier approach led his Honour to believe that a sentence of up to 12 years may have been appropriate. No doubt the process in which Hulme J engaged revealed his erroneous quantification of various elements in the sentence as well as the invalidity of his major premise or starting point. But it also revealed the arbitrariness of the two-tier approach and its almost exponential capacity for error. It showed that the criticism that his Honour directed at the instinctive synthesis approach applied to each stage of his own reasoning process. It is no answer to the criticism that the two-tier approach creates error to say that, because it reveals the error, it permits an appellate court to correct the error. The need for appellate intervention arises only because the two-tier approach is inherently susceptible to error. Appellate counsel are unlikely to be short of material to attack the reasoning process of judges who use the two-tier approach. Appeals are inevitable, and likely to succeed. Ironically, sentences imposed by using the two-tier method are likely to be upheld only by appellate courts declaring that, given the circumstances, there has been no miscarriage of justice because the sentence imposed was within the appropriate range. Unfortunately, discretionary sentencing is not capable of mathematical precision or, for that matter, approximation. At best, experienced judges will agree on a range of sentences that reasonably fit all the circumstances of the case. There is no magic number for any particular crime when a discretionary sentence has to be imposed. What Jordan CJ said in R v Geddes62 about the reality of the sentencing process has never been bettered and probably has never been equalled. With the passage of time, it is no longer cited as frequently as it once was. But the whole judgment repays careful study. I make no apology for setting out the crucial passage, lengthy though it is: 61 (2003) 137 A Crim R 497 at 509 [55]. 62 (1936) 36 SR (NSW) 554 at 555-556. McHugh "This throws one back upon a preliminary question as to the general principles upon which punishment should be meted out to offenders. In the nature of things there is no precise measure, except in the few cases in which the law prescribes one penalty and one penalty only. In all others, the judge must, of necessity, be guided by the facts proved in evidence in the particular case. The maximum penalty may, in some cases, afford some slight assistance, as providing some guide to the relative seriousness with which the offence is regarded in the community; but in many cases, and the present is one of them, it affords none. The function of the criminal law being the protection of the community from crime, the judge should impose such punishment as, having regard to all the proved circumstances of the particular case, seems, at the same time, to accord with the general moral sense of the community in relation to such a crime committed in such circumstances, and to be likely to be a sufficient deterrent both to the prisoner and to others. When the facts are such as to incline the judge to leniency, the prisoner's record may be a strong factor in inducing him to act, or not to act, upon this inclination. Considerations as broad as these are, however, of little or no value in any given case. It is obviously a class of problem in solving which it is easier to see when a wrong principle has been applied than to lay down rules for solving particular cases, and in which the only golden rule is that there is no golden rule. The position of the judge is analogous to that of a civil jury who are called upon to award damages for a breach of contract, or a tort, in relation to goods which have no market value, and for the assessment of the value of which no generally accepted measure exists. The jury must do the best they can; and so must the judge. In applying considerations as general as these, it is necessarily not often that it can be said, with reasonable confidence, that the sentence imposed was wrong." (emphasis added) This passage is not a testament of despair but a perceptive understanding of the reality of the sentencing process by one of the greatest judges that the common law system of justice has produced. It recognises that the judge must weigh all the circumstances and make a judgment as to what is the appropriate sentence. In R v Williscroft63, the Full Court of the Supreme Court of Victoria referred to this value judgment as an "instinctive synthesis of all the various aspects involved in the punitive process." This was a candid recognition of the fact that in the end sentencing depends on the judge's assessment of what is the correct sentence. There is no objectively correct sentence, only a range of sentences that the majority of experienced judges would agree applied to the 63 [1975] VR 292 at 300. McHugh case. The only novelty in Williscroft was the description that it gave to the sentencing process. After I came to the Bar in 1961, judges in New South Wales, to the best of my recollection, always followed the approach referred to in Williscroft. Only in recent times has there been any attempt to move away from it. Having regard to the remarks of Jordan CJ in Geddes, it seems almost certain that New South Wales judges were applying the Williscroft approach long before 1936. In 1961 and for some years afterwards, the most cited cases in this area of law in New South Wales were Geddes64, Goodrich65, Cooke66 and Herring67. Those four cases reflected the general principles applied and the approach taken to the sentencing process. The reasoning in those cases followed the Williscroft approach. There were, of course, other cases in New South Wales, England and other States that required particular matters to be taken or not taken into account. But these four cases illustrated the proper approach in all cases. The judgment of Street CJ in Herring68, where the Court of Criminal Appeal allowed a Crown appeal and re-sentenced the prisoner, is a good and concise illustration of the way that New South Wales judges approached the sentencing issue. After reviewing the facts and referring to the principles concerning retribution, reformation, protection of the public and mitigation, Street CJ concluded69: "I view this offence most seriously. I do not think that it calls for the maximum penalty, but it certainly calls for nothing light. If the prisoner had been older than he is, or if he had had any previous record indicating that he was not entitled to expect leniency from this Court, I would have imposed a heavier sentence than that which I think is the proper one in the present case. But giving full weight to everything that can be said in favour of the prisoner, I think the proper sentence to impose to mark this Court's view of the seriousness of the crime, and to let other wrongdoers know the retribution which will fall upon them if they commit similar crimes, is one of five years' penal servitude ..." 64 (1936) 36 SR (NSW) 554. 65 R v Goodrich (1952) 70 WN (NSW) 42. 66 R v Cooke (1955) 72 WN (NSW) 132. 67 R v Herring (1956) 73 WN (NSW) 203. 68 (1956) 73 WN (NSW) 203 at 205. 69 (1956) 73 WN (NSW) 203 at 205. McHugh Nothing in any High Court judgment before or since Williscroft throws any doubt on the approach in that case. In particular, there is not a line in the joint judgment in Veen v The Queen [No 2]70 that supports the two-tier approach to sentencing. As the Victorian Court of Criminal Appeal pointed out in R v Young71, the critical "passage demonstrates in clear terms the same approach to the fixing of an appropriate sentence as this court adopted in Williscroft's Case." And as the Court also said in Young72: "There is also much in the majority judgment in Veen (No 2) which shows that the High Court simply did not have in mind that a sentencer might, let alone should, proceed to arrive at the sentence to be imposed by a staged or structured approach." Both Veen [No 2] and the earlier Veen73 case were concerned with the issue of whether the penalty was proportionate to the facts of the case. The principle of proportionality is one of the fundamental principles of sentencing law. It is difficult – maybe impossible – to reconcile that principle with the two-tier approach to sentencing. The principle of proportionality requires the judge to make a judgment concerning the relationship of the penalty to the facts. This is a value judgment, based on experience and instinct, derived after taking into account all the facts and circumstances of the case. The existence of the proportionality principle makes one wonder whether, despite appearances, two-tier sentencers exist. At the end of the process, the two-tier sentencer must ask whether the result of the additions and subtractions from the objectively determined sentence is proportionate to the accused's offence. What happens if the judge concludes that the result is not proportionate to the offence? It would be almost a miracle if it was. If the judge tinkers with the quantum of each component in the sentence to achieve a result compatible with the concept of proportionality, the two-tier structure is meaningless, if not a charade. Whether or not the two-tier approach to sentencing does exist in practice, the common law should not accept it as superior to the method that in Williscroft the Court called the instinctive synthesis. Nothing in the judgments that have used it suggests that the two-tier approach will produce sentences that are more acceptable or better than the sentences produced by the instinctive synthesis method. The judgment of the Court of Criminal Appeal in this case is an 70 (1988) 164 CLR 465. 71 [1990] VR 951 at 957. 72 [1990] VR 951 at 957. 73 Veen v The Queen (1979) 143 CLR 458. McHugh example of its inherent tendency to error. I think it very likely that a judge with the experience of Hulme J would have imposed a proportionate sentence if he had used the instinctive synthesis approach instead of the approach he followed. But unfortunately the learned judge engaged in an arithmetical exercise instead of applying his judgment based on his considerable judicial experience with the result that he fell into error. The belief that two-tier sentencing is the preferable method is principally based on the idea that it promotes transparency of sentencing. Certainly, it shows a series of numbers. But they are more likely than not to be erroneous numbers. Each time the judge adds or subtracts another number the chance of ultimate error increases exponentially. In so far as its proponents claim that two-tier sentencing also promotes predictability, they mistake the illusion for the reality. Its proponents also contend that it makes sentencing more scientific. But if two-tier sentencing is science, its results, as in this case, suggest it is junk science. Belief in the advantages of two-tier sentencing is reminiscent of the once popular belief that judges do not make law. Like that belief, it belongs in Lord Reid's fairytales. There is no Aladdin's Cave of accurate sentencing methodology, the door to which can be opened by chanting the magic words, "two-tier sentencing". There is only human judgment based on all the facts of the case, the judge's experience, the data derived from comparable sentences and the guidelines and principles authoritatively laid down in statutes and authoritative judgments. The flaws in the two-tier method do not mean that the instinctive synthesis approach is perfect. Far from it. Any assessment, based on indeterminate standards and human judgment – whether it is negligence, damages or sentences – is unsatisfactory. That is why I have always preferred the use of rules and principles to standards. And the instinctive synthesis method is open to the criticism that, in arriving at the sentence, the judge has unconsciously over- emphasised or under-emphasised the weight to be given to various factors in the synthesis. But unless we adopt fixed sentences or provisions similar to the United States Federal Sentencing Guidelines with their requirements that courts must impose a sentence of the kind and within the range mandated74, it is the best we can do. Critics of the instinctive synthesis method place too much emphasis on the "instinct" and too little on the "synthesis". The use of the word "synthesis" in the context of sentencing identifies the very last part of the process. It recognises that, where a variety of considerations, often tending in opposing directions, operate in the context of a statutory maximum, there must finally be a 74 The Supreme Court recently considered the constitutionality of these Guidelines in United States v Booker 73 USLW 4056 (2005). McHugh quantification of the sentence to be imposed. There must be a synthesising of the relevant factors. In that process, greater and lesser weight will be allocated to some factors depending on their relevance to the person convicted and his or her crime. Ultimately, community and legal values are translated into a number of years, months and days. That process must involve an instinctive judgment. As Mason CJ, Brennan, Dawson and Toohey JJ said in their joint judgment in Veen [No 2]75: "[S]entencing is not a purely logical exercise, and the troublesome nature of the sentencing discretion arises in large measure from unavoidable difficulty in giving weight to each of the purposes of punishment. The purposes of criminal punishment are various: protection of society, deterrence of the offender and of others who might be tempted to offend, retribution and reform. The purposes overlap and none of them can be considered in isolation from the others when determining what is an appropriate sentence in a particular case. They are guideposts to the appropriate sentence but sometimes they point in different directions." (emphasis added) Nor is the instinctive synthesis approach inconsistent with awarding a discount for some factor, provided that discount relates to a purpose distinct from a sentencing purpose. The distinction between permissible and impermissible quantification of "discounts" on a sentence will usually be found in whether the quantification relates to a sentencing purpose rather than some other purpose. So, the quantification of the discount commonly applied for an early plea of guilty or assistance to authorities is offered as an incentive for specific outcomes in the administration of criminal justice and is not related to sentencing purposes. The non-sentencing purpose of the discount for an early guilty plea or assistance is demonstrated by the fact that offenders are ordinarily entitled to additional mitigation for any remorse or contrition demonstrated with the plea or assistance, aside from the discount for willingness to facilitate the course of justice76. That said, I think the use of discounts should be reserved for only one – maybe two – factors in a particular sentence that serve some goal other than a sentencing goal. In this case, Hulme J, having commenced from an erroneous premise, applied a fractional reduction that reflected the lesser gravity of the appellant's role in the offences, the lengthy period of offending, and some reference to proportionality with sentences for related offences. In so doing, Hulme J was selecting matters related to retribution and general and specific deterrence. 75 (1988) 164 CLR 465 at 476. 76 Cameron v The Queen (2002) 209 CLR 339 at 345-346 [22] per Gaudron, McHugh His Honour was giving a mathematical value to these purposes separated from the other purposes that were to be synthesised in the sentencing outcome. These were not appropriate matters for separate quantification and caused his Honour to fall into error. One reason why the idea of instinctive synthesis is apparently abhorrent to lawyers who value predictability and transparency in sentencing is that they see the instinct of a sentencing judge as entirely subjective, personal, arbitrary and unconfined. In fact, although a sentencing judge does ultimately select a number, it is not from thin air that the judge selects it. The judicial air is thick with trends, statistics, appellate guidance and, often enough these days, statutory guidance. First, the sentencing judge almost never imposes a sentence for an offence that has been committed for the first time. A sentencing judge may have seen dozens or scores of such cases and develops, through experience, a sense of the relative gravity of offences and the relative circumstances of offenders that dictate the weighting of different factors in the sentencing process. The need to give greater weight to general or specific deterrence in response to crime trends is one factor to which a sentencing judge has special sensitivity. A sentencing judge also has the benefit of collegiate knowledge, both formally through reading the judgments of other judges and informally through interaction with other judges. No one suggests that the judicial robe carries in its seams the wisdom of Solomon, but judicial experience in sentencing is a skill to be respected by the community and other judges. Repeated exercise in synthesising sentencing factors can only hone the instinct required to translate such factors into just numerical outcomes. That experience, combined with the special advantages of receiving sentencing material, including oral material, first hand, are the two most important reasons why appellate courts, and especially an ultimate appellate court which is national rather than local to the sentencing jurisdiction, must exercise restraint in reviewing sentencing decisions, especially on the basis of manifest excess or leniency. A further source of information about the sentences imposed by other judges is the sentencing statistics produced by (in New South Wales) the Judicial Commission. Hulme J referred to these statistics towards the end of his judgment in this case77. It is surprising that they did not cause the Court of Criminal Appeal to see that the sentence of eight years that it was imposing was disproportionate. Those statistics showed that the Court was imposing a sentence as high as any that had been imposed during a six year period dealing with 77 (2003) 137 A Crim R 497 at 509 [55]. McHugh 22 cases concerning the same offence, despite the subordinate role played by this offender and the context of a Crown appeal. The failure of the Court to act on those statistics suggests that its belief in the "logic" of its numbers caused it to overlook the significance of the statistics. If so, it shows the dangers lurking in an approach that concentrates on numerical components. Second, a judge is sensitive to legislative trends. A change in the maximum penalty for an offence or in the elements of an offence may indicate a shift in the values to be applied when sentencing for that offence. In New South Wales there is also a statutory system of guideline judgments and standard minimum non-parole periods that give more specific guidance in common offences and operate as a starting point from which departure is intended to be the exception or at least require explanation. In recent times, both methods have been used to increase the prevailing median sentence for particular classes of offences. That does not mean that the judge must start with a specific number but knowledge of the median or the extent of the range guides the judicial "instinct". Third, a sentencing judge always knows that the sentence imposed is subject to judicial review by an appellate court. Whether or not that review takes place, he or she is conscious that the sentencing discretion and the reasons for arriving at a particular sentence will be considered by the advisers to the Crown and the offender. Error will be the subject of appeal. To avoid appealable error, a judge pays close attention to the guidance provided by appellate courts as to the impermissible paths of reasoning and the permissible factors which will be relevant to the sentencing process in a particular case. Fourth, the role of open justice is also important. A judge's sentence and reasons are usually exposed to public scrutiny through publication or media reporting. Public responses to sentencing, although not entitled to influence any particular case, have a legitimate impact on the democratic legislative process. Judges are aware that, if they consistently impose sentences that are too lenient or too severe, they risk undermining public confidence in the administration of justice and invite legislative interference in the exercise of judicial discretion. For the sake of criminal justice generally, judges attempt to impose sentences that accord with legitimate community expectations. Finally, in Veen [No 2]78, as I have indicated, this Court affirmed that the ultimate control on the judicial sentencing discretion is the requirement that the sentence be proportionate to the gravity of the offence committed. In pursuit of other sentencing purposes, a judge may not impose a sentence that is greater than is warranted by the objective circumstances of the crime. Both proportionality 78 (1988) 164 CLR 465 at 472. McHugh and consistency commonly operate as final checks on a sentence proposed by a judge. They guard against hidden errors in the process, the kind later identified on appeal as manifest excess or leniency in accordance with the principles in House v The King79. The acceptance of the role of instinctive synthesis in the judicial sentencing process is not opposed to the concern for predictability and consistency in sentencing that underpins the rule of law and public confidence in the administration of criminal justice. The synthesising task is conducted after a full and transparent articulation of the relevant considerations including an indication of the relative weight to be given to those considerations in the circumstances of the particular case. The instinctive synthesis approach does not prevent the use of adjectives or adverbs or indications that this or these factors makes or make the case more or less serious than other cases or are the critical features of the case. And judicial instinct does not operate in a vacuum of random selection. On the contrary, instinctive synthesis involves the exercise of a discretion controlled by judicial practice, appellate review, legislative indicators and public opinion. Statute, legal principle and community values all confine the scope in which instinct may operate. The judicial wisdom involved in the instinctive synthesis approach is therefore likely to lead to better outcomes than the pseudo-science of two-tier sentencing. At all events, I am not satisfied that two-tier sentencing is a better method or process than the instinctive synthesis method that has been the traditional approach of common law judges. Order The appeal must be allowed. 79 (1936) 55 CLR 499 at 505 (referred to in the joint judgment at [25]). Kirby KIRBY J. This is an appeal from a judgment of the Court of Criminal Appeal of New South Wales80. That judgment upheld a prosecution appeal to that Court from a sentence which Hosking DCJ imposed on Mr Anthony Markarian (the appellant) in the District Court of New South Wales. As a result of upholding the appeal, the Court of Criminal Appeal set aside the sentence of two years six months imprisonment from 18 July 2002 (with a non-parole period of fifteen months). It substituted a sentence of eight years imprisonment (with a non- parole period of four years six months). The appeal to this Court has concerned the appellant's submission that, in disturbing the sentence imposed on him in the District Court, the court below erred and that the substituted sentence (and the reasons given for it) disclosed either specific or imputed error81. The appellant asked this Court to restore the sentence imposed on him by Hosking DCJ or, at the least, to return the matter to the Court of Criminal Appeal for reconsideration of the prosecution's appeal to that Court, freed from the errors complained of. The facts, legislation, issues and disposition The facts and related sentences: Most of the background facts are stated in the reasons of Gleeson CJ, Gummow, Hayne and Callinan JJ ("the joint reasons")82. It is necessary, however, to appreciate that the sentencing of the appellant in the District Court occurred as one of a series of related judicial acts affecting four prisoners who were severally involved in an illicit business, conducted by Mr Vincent Caccamo, involving the handling and sale of illegal drugs. On 30 May 2002, Mr Caccamo himself was sentenced by Shillington DCJ to eight years imprisonment (with a non-parole period of five years). Allowance was made in his case for his assistance to the authorities and for the consequent requirement that Mr Caccamo would serve his sentence in protective custody. But for those facts, Shillington DCJ said that he would have sentenced Mr Caccamo to 15 years imprisonment. On 14 June 2002, Mr Chung was sentenced by Knight DCJ to three years imprisonment, with a non-parole period of two years, to be served by way of periodic detention. Unlike the appellant, he had no criminal record. However, like him, Mr Chung was a driver for Mr Caccamo, although employed less frequently than the appellant had been. 80 R v Markarian (2003) 137 A Crim R 497. 81 As to specific error and manifest excess, see AB v The Queen (1999) 198 CLR 111 at 160 [130] per Hayne J. 82 Joint reasons at [2]-[19]. Kirby The appellant was sentenced on 18 July 2002 by Hosking DCJ. As stated, his sentence was two years six months imprisonment (with a non-parole period of fifteen months). There followed the sentencing of a fourth prisoner, Mr Barta, who was sentenced by Hosking DCJ on 25 July 200283. He was the person who had supplied Mr Caccamo with heroin. His sentence is undisclosed. It is proper to infer that, in sentencing the named prisoners for their respective offences (whilst also taking into account disclosed further offences), the judges of the District Court would have kept in mind, in a general way, the respective roles of the offenders in the criminal enterprise which had Mr Caccamo at its centre, having regard to the comparative criminality of each of them. This notwithstanding, the sentence imposed on the appellant by the Court of Criminal Appeal resulted in an obvious and serious disturbance of the relativities of the punishments imposed on the respective offenders. It left the appellant, a heroin-addicted chauffeur charged only with knowing participation in the supply of the drug by Mr Caccamo, with a final sentence identical to that imposed on Mr Caccamo, the ring-leader and mastermind of the criminal business. The appellant's non-parole period, moreover, was just six months short of that fixed in Mr Caccamo's case. When such a result is arrived at, alarm bells begin to ring. The applicable legislation: The joint reasons identify the three statutes of the New South Wales Parliament that afford the legislative context in which the task of sentencing was performed both by the primary judge and by the Court of Criminal Appeal. The first was the Drug Misuse and Trafficking Act 1985 (NSW), s 33(2), which fixed the maximum sentence that Parliament had provided for the offence with which the appellant was charged84. Also contained in the joint reasons are references to the Crimes (Sentencing Procedure) Act 1999 (NSW) ("the Sentencing Act")85. Finally, it is proper, as the joint reasons state, to keep in mind the terms of the Criminal Appeal Act 1912 (NSW), s 5D of which afforded the Court of Criminal Appeal its jurisdiction and powers with respect to the prosecution appeal against the sentence imposed on the appellant. To enliven the 83 [2004] HCATrans 329 at 1936. 84 See joint reasons at [2], [11] referring to Markarian (2003) 137 A Crim R 497 at 85 See joint reasons at [3]. Kirby power to re-sentence the appellant, it was necessary for the appellate court to be satisfied of error, either specific or imputed, on the part of the sentencing judge86. I agree with the joint reasons that no task of sentencing, at trial or on appeal, could be accurately carried out without proper attention to any statutes affecting the maximum penalty fixed by Parliament for the worst possible case; the procedure to be followed where a judicial duty to sentence, or re-sentence, the appellant was enlivened; and the precondition to be observed where appellate powers of re-sentencing were invoked. In this respect, the statutory requirements applicable to sentencing constituted the starting points for the judicial task. That is because, in a case like the present, whatever has been said or written by judges about that task must take second place to the requirements of legislation as part of the written law. So long as that law is constitutionally valid, it has the imputed authority of democratic credentials and must be obeyed87. The sentence and re-sentence: The joint reasons explain the approach taken by Hosking DCJ to sentencing the appellant88 and the explanations of Hulme J, who gave the reasons of the Court of Criminal Appeal, for disturbing that sentence and arriving at a new, increased sentence89. Hulme J is a judge with long experience in criminal trials and sentencing. His detailed and thorough treatment of the many issues presented by the appellant's case bears witness to his close attention to the issues and to his endeavour to identify and pay regard to all of the considerations that he regarded as relevant and applicable to the task in hand. It will be evident from past expositions of my own90, that I share with Hulme J (and inferentially with Heydon JA and Carruthers AJ in the Court of 86 Lowndes v The Queen (1999) 195 CLR 665 at 671-672 [15]. See also Dinsdale v The Queen (2000) 202 CLR 321 at 339-340 [57]-[58], 340-341 [62]; cf AMS v AIF (1999) 199 CLR 160 at 222 [183]. The principle was stated earlier in Norbis v Norbis (1986) 161 CLR 513 at 517-519; cf Wong v The Queen (2001) 207 CLR 87 Conway v The Queen (2002) 209 CLR 203 at 227 [66]; cf Visy Paper Pty Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 1 at 10 [24], 25 [74] and cases there cited. 88 Joint reasons at [5]. 89 Joint reasons at [10]-[19]. 90 eg AB (1999) 198 CLR 111 at 150 [102]; Wong (2001) 207 CLR 584 at 622 [102]- [103]; Cameron v The Queen (2002) 209 CLR 339 at 362 [70]-[71] and Johnson v The Queen (2004) 78 ALJR 616 at 626 [40]; 205 ALR 346 at 358-359. Kirby Criminal Appeal, who agreed with Hulme J's reasons) a discomfort with talk about determining sentences "by instinctive synthesis"91. I would point out at the outset of these reasons that Hulme J's disquiet about so-called "instinctive synthesis" derived, as he explains, from his experience as a judge, both at trial and on appeal, in seeking, as conscientiously as he did in this case, to reach an outcome sustained by a process of reasoning more satisfying and conformable to the rule of law than a so-called judicial "instinctive synthesis". The danger of that language, as Hulme J correctly explained, is that it can lead all too easily to figures "just … plucked out of the air"92. Identifying elements in a sentence: I shall return to this point. But I cannot leave it without observing that it is the very process, accepted by Hulme J as part of his judicial function in this case, of explaining in detail and with proper care the manner of arriving at the sentence that he believed should be substituted for that imposed at first instance, that opens up the effective remedy which the appellant now invokes in this appeal. Had Hulme J and his colleagues done little more than to suggest that the sentence imposed by Hosking DCJ struck them as "manifestly inadequate" and thus exhibiting imputed error calling for a judicial "synthesis" attributed to "instinct" or a sequential consideration of relevant but unidentified factors, the appellant's appeal to this Court would have been bound to fail. Indeed, the appellant would almost certainly have been refused special leave to appeal93. As the joint reasons accept, the gateway to this Court in appeals expressed in terms of manifest excess (or inadequacy) of sentence is almost always barred and locked, and the key is rarely found94. There is, then, an irony in the fact that it is the very attention of Hulme J and his colleagues to transparency in the re-sentencing process that has made it feasible for the appellant to attract the attention of this Court and now to secure relief from the judgment of the Court of Criminal Appeal. Error of judicial reasoning is not made more palatable for prisoners (or anyone else) who suffer as a consequence because the judges concerned are encouraged by appellate courts to submerge the true steps taken by their minds beneath talk of "instinctive", 91 Markarian (2003) 137 A Crim R 497 at 505 [33]-[35], cited in the joint reasons at 92 Markarian (2003) 137 A Crim R 497 at 505 [33]. 93 It is very rare for the High Court to give relief for "manifest [as distinct from specific] error" of sentencing: AB (1999) 198 CLR 111 at 126 [30]; see also Postiglione v The Queen (1997) 189 CLR 295 at 337. 94 Joint reasons at [44]. Kirby "intuitive" or unspecified "sequential" approaches to an outcome declared but inadequately explained. Extent of agreement with the joint reasons The omission to express error: Having said this, and having allowed full credit for the exposure by the Court of Criminal Appeal of its reasoning – available for the appellant, the respondent, the community and this Court – I have nevertheless come to the conclusion that its reasoning exhibits error. The errors must be corrected. For the most part, I agree with the conclusions expressed in the joint reasons. I agree with the orders favoured there. Like my colleagues, I am prepared to assume that, although it did not expressly say so, the Court of Criminal Appeal found error on the part of the sentencing judge sufficient to warrant the disturbance of the sentence that he had imposed on the appellant95. It is important, once again, to emphasise the point made by this Court in Lowndes v The Queen96 and in other cases concerned with the exercise of appellate powers97. An explicit finding of error by appellate judges is not a mere technicality. It is the precondition to the authority which the appellate court enjoys under the law to disturb the conclusions of the trial judge, manifested in that judge's orders. What is involved in this rule is not simply professional respect for the trial judge, still less for a formula of words. It is a salutary reminder to the appellate court of the advantages that the trial judge enjoys; the impossibility of expressing all of the considerations leading to an outcome in judicial reasons; and the special difficulty of doing so where the outcome involves (as sentencing does) discretionary and quasi-discretionary considerations of judgment. To pause at the end of the analysis of criticisms of the reasons of a trial judge, and to express clearly the appellate court's satisfaction that error has been established, is a useful reminder to the appellate court that its function is different from that of the trial judge. It is so even if, once error is shown, the appellate court enjoys its own separate power to substitute the orders that ought to have been made at trial. Whilst this step was not expressly taken in the instant case, I am satisfied that it was inherent in the reasoning of Hulme J. By its very detail, that reasoning 95 Joint reasons at [29]. 96 (1999) 195 CLR 665 at 671-672 [15]. 97 AMS (1999) 199 CLR 160 at 222 [183]; cf Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at 225-226 [77]; The Commonwealth v Yarmirr (2001) 208 CLR 1 at 119 [266]. Kirby displays what his Honour considered to be the errors of the sentencing judge, and what he regarded as necessary to a proper sentence. The omission to apply the statute: I have more concern about the omission of the sentencing judge and of the Court of Criminal Appeal to pay regard to the requirements of s 21A of the Sentencing Act98. As is now common ground, that section applied to this case99. It is a rudimentary error in the exercise of a sentencing discretion (or of the discretion enlivened by the appellate re-sentencing of an offender) for the decision-maker to fail to take into account a relevant consideration100. It is clearly relevant for a judge engaged in sentencing, or re-sentencing, to pay regard to an applicable provision of the written law, such as the Sentencing Act, made by Parliament to apply to such a case. Statute law, having the higher authority of Parliament, cannot be waived by parties simply because they are ignorant of it or because they choose not to argue it although it is applicable. Once such an omission comes to light in proceedings that are still current within the Judicature, judges, certainly when they are on notice of such provisions, are under a constitutional duty to obey them and give them effect. Although it seems that s 21A of the Sentencing Act was not called to the attention either of the sentencing judge or of the Court of Criminal Appeal, its terms have been brought to our notice, as has the fact that it was not given consideration below. What to do? For my own part, I would not disregard the omission as irrelevant to the proper exercise of the sentencing discretion in the matter before this Court as do the joint reasons101. There, reliance is placed on assumptions and the lack of contrary submissions. For me, it is sufficient to say that the omission of the Court of Criminal Appeal to pay specific regard to the aggravating, mitigating and other factors in sentencing elaborated in s 21A of the Sentencing Act can be passed by in this appeal for the practical reason that, in the result of the appeal, for other reasons, 98 The Sentencing Act, s 21A(4), as then enacted, stated: "The matters to be taken into account by a court under this section are in addition to any other matters that are required or permitted to be taken into account by the court under this Act or any other law." This requirement has now become part of s 21A(1); cf R v Way (2004) 60 NSWLR 168 at 189 [103]. 99 Joint reasons at [3]. 100 House v The King (1936) 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ: "[I]f [the judge] does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so." 101 Joint reasons at [3]. Kirby the entire matter must be reconsidered by the Court of Criminal Appeal. The sentence is not, as such, invalidated by the omission to comply with the Sentencing Act. It continues to govern the appellant's case102. Should it become necessary to re-sentence the appellant (or to test the validity of the sentence imposed by Hosking DCJ) on reconsideration by the Court of Criminal Appeal, that can be done by that Court with due attention to the provisions of s 21A. On the face of things, however, the failure to attend to the section was an oversight that cannot, without argument, be said to have been irrelevant to the process of re-sentencing which the Court of Criminal Appeal felt was enlivened by the errors that it found in the sentence imposed by Hosking DCJ. If the statute applied (as is agreed) the duty of the court engaged in sentencing was to "take into account" all of the specified factors and that was clearly a duty binding in law. It was a duty unfulfilled. The reasoning to the proper sentence: These conclusions bring me to the heart of the reasons stated by the other members of this Court. Those reasons present five issues: The starting point issue: Whether the Court of Criminal Appeal erred in taking as its starting point, for the criticism of the sentence imposed by the sentencing judge, the quantity of the heroin the subject of the principal offence and the maximum sentences fixed by the relevant legislation for specific quantities103; The instinctive synthesis issue: Whether the Court of Criminal Appeal erred in failing to observe a process of an "instinctive" or "intuitive" synthesis both in testing the sentence imposed by Hosking DCJ for error and in proceeding to its own substitute sentence104; 102 Section 101A of the Sentencing Act (which commenced after the hearing of the Crown's appeal but before the handing down of the Court of Criminal Appeal's decision) provides that the effect of failure to comply with the Act may be considered by an appellate court in any appeal against sentence even if the Act declares that the failure to comply does not invalidate the sentence. Certain sections so provide. See, for example, s 44(3) of the Sentencing Act, providing that the failure of a court to set an appropriate term for the balance of the sentence with respect to the non-parole period does not invalidate a sentence. 103 Joint reasons at [20], [30]-[34]; reasons of McHugh J at [50]. 104 Joint reasons at [35]-[39]; reasons of McHugh J at [50]. Kirby The consideration of additional offences issue: Whether the Court of Criminal Appeal erred in identifying, as part of its substitute sentence, a separate additional punishment of eighteen months to two years imprisonment for the further offences disclosed by the appellant which he asked to be taken into account in conjunction with his sentence for the principal offence105; The manifest excess issue: Whether, whatever outcome was appropriate to the other issues in this appeal, the appellant was entitled to succeed because the re-sentencing by the Court of Criminal Appeal resulted in a sentence that was manifestly excessive and such as to attract the intervention of this Court on that ground106; and The proper outcome issue: Whether, if error be shown warranting intervention of this Court, the proper course is to restore the sentence imposed on the appellant by Hosking DCJ or to return the matter to the Court of Criminal Appeal107. Common ground on most issues: I agree with the conclusions stated in the joint reasons on the starting point issue and the additional offences issue. I therefore agree that the appellant's appeal must be allowed108. For the disposition of the appeal, I agree with the joint reasons that the proper course is to return the appeal to the Court of Criminal Appeal. I am more hesitant over the manifest excess issue. It is one thing to exhibit reluctance to examine such a ground at the stage of an application for special leave to appeal to this Court. However, special leave having been granted and the matter being before this Court, manifest error (if it can be demonstrated) is a proper consideration to be taken into account. It is, after all, a well-known and unquestioned category for the appellate review of judicial discretions109. In my opinion, this aspect of the law of appellate reconsideration should not be excised and disregarded simply because the discretion in question concerns a judicial sentence. In the present case, the disturbance of the relativities of the sentences of the respective participants in Mr Caccamo's enterprise, and the virtual equality of the re-sentencing of the appellant and the sentence imposed on 105 Joint reasons at [40]-[43]. 106 Joint reasons at [44]. 107 Joint reasons at [46]. 108 Joint reasons at [45]; reasons of McHugh J at [85]. 109 House v The King (1936) 55 CLR 499 at 505. Kirby Mr Caccamo, strikes me, with respect, as manifestly erroneous. However, as nothing ultimately turns on this point, I will not press my disagreement on this issue to a dissent. Nevertheless, there are important differences between the approach expressed in the joint reasons and the approach that I favour on the remaining issue. As the matter is to be returned to the Court of Criminal Appeal, the differences cannot be treated as legally immaterial. I must accordingly address these considerations in the remaining parts of these reasons. The "two-stage approach" versus "instinctive synthesis" Origin of the controversy: The appellant complains that the Court of Criminal Appeal erred in "[f]ormulating the substituted sentence by means of a staged approach". For as long as judges have been sentencing convicted offenders for crimes, where they have had a discretion to impose a sentence within limits fixed by law, they have typically considered aggravating and mitigating circumstances when coming to their result. Sometimes, judges would explain the ultimate outcome by reference to what the sentence might have been if this, or that, feature of the case had been different. There is nothing unusual in proceeding in this way. For example, in Veen v The Queen [No 2]110, decided in 1988, the joint majority reasons in this Court111 clearly envisaged112 such a "two-stage" or "two-tiered" approach. In a conventional fashion, the Court postulated a sentence. It then adjusted this to take into account matters special to the case. This approach reflected, and reinforced, conventional sentencing practice in Australian courts, "first determining the outer limit of the sentence and then applying mitigating factors, if any, so as to arrive at an appropriate sentence"113. In truth, this approach to sentencing did no more than to put on paper a logical process of human reasoning. Of course, the mitigating and aggravating factors would often be many and varied. But where particular considerations were clearly important, a process of reasoning would follow such as was described in Veen [No 2]. Many judges have exposed that process of reasoning 110 (1988) 164 CLR 465. 111 Per Mason CJ, Brennan, Dawson and Toohey JJ. 112 (1988) 164 CLR 465 at 476-478. See also Baumer v The Queen (1988) 166 CLR 113 Bugmy v The Queen (1990) 169 CLR 525 at 535. Kirby in their explanations for sentence. In my view, it was honest, useful and lawful for them to do so. Unfortunately, in R v Young114, the legal waters were muddied by a decision of the Court of Criminal Appeal of Victoria. That decision was given two years after Veen [No 2]. There, that Court set its face against the stated process of reasoning in sentencing. It rejected the two-stage approach as incompatible with "long established practice in Victoria"115. From a practical viewpoint, it expressed its concern that such an approach was likely to result in the imposition of inadequate sentences. Revealingly, the Victorian judges also noted that by exposing the processes of reasoning of the sentencing judge in this way the approach would facilitate appellate challenges, much more difficult of success where the steps of reasoning were submerged in an outcome expressed in general terms and attributed to judicial "instinct". All appellate judges would have been aware that the more that sentencing judges exposed of the steps taken in their process of reasoning, the more likely it would be that specific error would be revealed, facilitating prisoner appeals against sentence. And sentencing appeals were viewed by many judges as a "painful" and "unrewarding" task116. The Victorian courts adhered to their opposition to the two-stage approach. Inevitably, out of necessity, trial judges in that State have bowed to the requirement to proceed in a staged way where Parliament (perhaps ignorant of the judicial minefield into which it was treading) imposed statutory obligations to reduce a sentence otherwise appropriate for a plea of guilty117. Such cases apart, the Victorian judges continued to reject the two-stage approach118. Even in a case where statute119 appeared to require identification of a sentence and adjustment for the statute's purposes, the Victorian Court of Criminal Appeal insisted on the adoption of what it called an "instinctive synthesis" of all relevant matters, including such adjustments. 115 [1990] VR 951 at 960-961. 116 Lord Kilbrandon, "Children in Trouble", (1966) 6 British Journal of Criminology 112 at 122; Kirby, "Sentencing Reform: Help in the 'Most Painful' and 'Unrewarding' of Judicial Tasks", (1980) 54 Australian Law Journal 732 at 734. 117 See, for example, Penalties and Sentences Act 1985 (Vic), s 4(2) (repealed); Tierney (1990) 51 A Crim R 446; cf Sentencing Act 1991 (Vic), ss 5(2AB), 5(2AC), 5(2)(e). 118 See, for example, R v Nagy [1992] 1 VR 637. The history is traced in Punch v The Queen (1993) 9 WAR 486 at 493-496 per Murray J. 119 Crimes Act 1914 (Cth), ss 16A and 21E. See Nagy [1992] 1 VR 637. Kirby Developments in State jurisdictions: This Court noticed this controversy in Bugmy v The Queen120, a Victorian appeal. It did not resolve it there. Meantime, the controversy simmered in other Australian States. Most of the judges of other States who passed upon the issue expressed themselves unconvinced by the Victorian approach in Young. Thus, the Court of Criminal Appeal of the Northern Territory in R v Raggett121 rejected the criticism about adopting the two-stage approach. Likewise, the strict embargo on the two-tiered approach was not followed in New South Wales in R v Gallagher122. In South Australia, the two-tiered approach was well established in the practice of judicial sentencing. This was especially so for discounts for pleas of guilty and for assistance to authorities. King CJ, who knew a great deal about criminal law and practice, endorsed the two-stage approach in R v Shannon123. It was also reflected in his Honour's highly influential reasons in R v Osenkowski124, where he defended the entitlement of sentencing judges "occasionally to correct a sentence"125 out of a sense of reasoned leniency in the particular circumstances. The approach in Young fared no better in Western Australia126, although it gathered some support in the Tasmanian Court of Criminal Appeal in Pavlic v The Queen127. This was not, however, without a strong dissent on this point by Slicer J. By the late 1990s, no other court of criminal appeal of this nation had clearly embraced the anathema in Young on the two-stage approach. To the contrary, many judges, highly experienced in sentencing at trial and on appeal, rejected that approach. For identified reasons of "social utility and public 120 (1990) 169 CLR 525 at 535-536. 121 (1990) 101 FLR 323 at 334-335; 50 A Crim R 41 at 51-52. See also R v Mulholland (1991) 1 NTLR 1 at 14-15. 122 (1991) 23 NSWLR 220 at 230 per Gleeson CJ. 123 (1979) 21 SASR 442 at 452-453. 124 (1982) 30 SASR 212. 125 (1982) 30 SASR 212 at 212-213. 126 McKenna v The Queen (1992) 7 WAR 455 at 467-468; Punch (1993) 9 WAR 486 at 493-496, 503; Verschuren v The Queen (1996) 17 WAR 467 at 470-474, 480- 127 (1995) 5 Tas R 186. Kirby policy"128, they saw value in exposing the process of reasoning towards their sentences and (whilst not obliging such a course as an absolute rule) they saw utility in identifying specifically, in quantitative or percentage terms, discounts for various considerations such as pleas of guilty and specific assistance to the authorities129. By 1999, so far as the rest of Australia was concerned, Young looked dead in the Yarra River water. "Wrong in principle?": It was at this stage, in 1999, that Hayne J, in AB v The Queen130, in dissenting reasons in this Court, indicated his adherence to an approach similar to that expressed in Young and to the earlier statement in the Victorian Full Court in R v Williscroft131. There that Court had said that it is "profitless … to attempt to allot to the various considerations their proper part in the assessment of the particular punishments". Instead, according to Williscroft, the sentence to be imposed "represents the sentencing judge's instinctive synthesis" of relevant considerations. In his reasons in AB, McHugh J, also in dissent in that case, endorsed a similar approach, holding that the two-stage approach was "plainly unsuited to the sentencing process"132. There this minor judicial controversy might have rested, but for the joint reasons of Gaudron, Gummow and Hayne JJ in Wong v The Queen133. An extract from those reasons appears in the joint reasons in this case134. The two-stage approach was there castigated as "wrong in principle"135, in terms directly traceable to the idiosyncratic view expressed in Young, which in turn built on the "instinctive" approach endorsed earlier in Victoria in Williscroft. Although in Wong it is stated that the intermediate appellate courts of Australia were, by that time, "clearly against adopting two-stage sentencing and favour[] 128 Pavlic (1995) 5 Tas R 186 at 206 per Slicer J. 129 Thus in Verschuren (1996) 17 WAR 467 at 473, Malcolm CJ expressed agreement with the reasons of Slicer J in Pavlic. See also R v Place (2002) 81 SASR 395 at 130 (1999) 198 CLR 111 at 156-157 [115]-[120]. 131 [1975] VR 292 at 300; cf Place (2002) 81 SASR 395 at 413-414 [47]-[48]. 132 (1999) 198 CLR 111 at 121 [16]. 133 (2001) 207 CLR 584 at 611 [75]-[77]. 134 Joint reasons at [37]. 135 (2001) 207 CLR 584 at 612 [76]. Kirby the instinctive synthesis approach"136, I have endeavoured to show (and many more cases could be added to my list) that this was not a correct representation of the state of decisional authority. Now, building upon this highly unstable foundation of judicial reasoning, the dictum in Wong at last gathers up a majority of this Court, for it is apparently endorsed in the joint reasons and the reasons of McHugh J. Because I do not agree with it either as a matter of analysis of Australian judicial authority or as a matter of legal principle and policy, I must voice my contrary opinion. The fact that, in the joint reasons in this case, there is a substantial retreat from the strict anathema expressed in Young does not mean that the error of the joint reasons in Wong, now repeated with added qualifiers, should pass unremarked137. Decisions since Wong: It was inevitable, following the differing opinions expressed in this Court in Wong, that intermediate appellate courts in Australia, reviewing sentences, should struggle to accommodate the differing views stated (although without binding authority) by judges of this Court. Naturally, none of the courts below wished needlessly to expose themselves to the peril of reversal should the approach in Young ultimately prevail in this Court. Yet none (so far as my reading shows) was willing to accept that a two-stage approach was universally impermissible ("wrong in principle") or that the complexities of sentencing could be adequately hidden by adopting a judicial formula such as the so-called "instinctive synthesis". Specifically, in many decisions, the intermediate courts saw nothing wrong (and much that was advantageous) in the explicit identification of the precise discount to be allowed, in particular cases, for pleas of guilty and for assistance to the authorities. They therefore did what was sensible in the circumstances. They adhered, in fact, to the two-stage approach in those and other instances of sentencing. However, they accepted that this was not a universal approach of sentencing but one specific to the ad hoc instances where it was appropriate or at least permissible. The formula "two-stage approach" was sometimes replaced by descriptions such as "sequential process"138. The judges occasionally confessed (as Hulme J did in this case) that they found it "difficult 136 Wong (2001) 207 CLR 584 at 611 [76]. 137 See Cameron (2002) 209 CLR 339 at 362 [70]-[71]; Johnson (2004) 78 ALJR 616 at 626-627 [40]-[42]; 205 ALR 346 at 358-359. 138 See R v Garforth unreported, New South Wales Court of Criminal Appeal, 23 May 1994 at 6 per Gleeson CJ, McInerney and Mathews JJ; Way (2004) 60 NSWLR 168 at 190 [112]; cf R v Thomson (2000) 49 NSWLR 383 at 396 [57]; R v Sharma (2002) 54 NSWLR 300 at 305 [24], 307 [31]. Kirby to understand" how the "instinctive synthesis" approach could be applied, or how it could result in a "single appropriate sentence" unless an hypothesised starting point were taken "against which the factors of assistance and of the plea could be considered"139. For the specification of particular discounts (and hence the necessity of a kind of two-stage approach) a unanimous Court of Criminal Appeal of South Australia in R v Place140 clearly remained unconvinced by the approach demanded in Young. Indeed, it was dismissive of the favour it had, by that time, gathered in this Court, then still short of a majority. In Place, the South Australian Court of Criminal Appeal said141: "For these reasons, in our opinion the current practice should continue and this Court should continue to encourage sentencing courts to identify the specific reduction given in respect of a plea of guilty." As a matter of principle, the same approach applied in South Australia for the consideration of assistance to authorities mentioned earlier in the reasons in Place142. But once that position was reached, as a matter of logic and principle, the same approach would necessarily apply to any other distinct factor in sentencing, important to the particular case, that caused a measurable and clearly identifiable adjustment to the sentence that warranted explicit mention in discharging the sentencing function according to law, not in accordance with supposed judicial "instinct". Where so many judges in Australia, experienced in criminal trials and in sentencing, have expressed their disagreement with the approaches derived from Williscroft and Young, it is undesirable, in my respectful opinion, for this Court (even in the present watered-down version) to impose those authorities on sentencing judges throughout the Commonwealth. Inconsistency with statutory transparency: An additional reason, which should cause hesitation on our part in this respect, is the growing move of federal and State legislatures in Australia to spell out specific considerations that are to be taken into account in judicial sentencing. This is obviously the purpose of s 21A of the Sentencing Act which was overlooked in this case. But those 139 MacDonnell (2002) 128 A Crim R 44 at 54 [59] per Wood CJ at CL for the Court. See also Howie, "Criminal Law Update 2004", (2004) 7 Judicial Review 89 at 103- 140 (2002) 81 SASR 395. 141 (2002) 81 SASR 395 at 425 [83] per Doyle CJ, Prior, Lander and Martin JJ (Gray J concurring). 142 (2002) 81 SASR 395 at 417 [59]. Kirby provisions are simply examples of a multitude of contemporary statutory requirements, in virtually every Australian jurisdiction, federal, State and Territories, obliging sentencing courts and courts of criminal appeal to pay regard to aggravating and mitigating factors. Sometimes, these will suggest the need for adjustment stated in quantitative or percentage terms. Always, they postulate the contemplation of an hypothesised norm that is adjusted up and down. Indeed, in some instances, such adjustments are expressly required by the legislation, such as is the case under the Sentencing Act143. In particular circumstances, the introduction of standard non-parole sentencing obliges judges, in effect, to adopt a two-stage approach144. In such cases, it is impossible to conceive that a purely instinctive synthesis or "single- tiered approach" could be taken to the sentencing of a prisoner affected by the statute. The sentencing judge is effectively obliged to identify the "standard non- parole period"145. It then becomes the statutory reference point relating to the "middle of the range of" objective seriousness of the offence. The sentencing judge is then required to take into account the other matters referred to in the Sentencing Act, in order to arrive at an appropriate non-parole period and hence the resulting balance of the sentence146. A clearer example of a two-stage approach could not be imagined. In this statutory environment, given the first duty of sentencing judges to conform to applicable parliamentary law, the instances for a single-tiered and purely instinctive synthesis in sentencing will now be increasingly rare, if ever they existed. If legislation obliges identification of adjustments to "standard … period" sentences, it is questionable that the common law of Australia should now, belatedly, embrace any different rule where it has not previously been regarded by judges as a universal obligation. 143 For example, Sentencing Act, s 21A (requiring certain aggravating and mitigating factors to be taken into account in determining sentence); Sentencing Act, s 22 (a court may take into account a guilty plea and in doing so impose a "lesser penalty"); Sentencing Act, s 23 (assistance to authorities); and Sentencing Act, s 33 (taking into account a further offence which may lead to a longer sentence). 144 Crimes (Sentencing Procedure) Amendment (Standard Minimum Sentencing) Act 2002 (NSW) amending the Sentencing Act to insert ss 54A-54D in the Act. 145 Sentencing Act, s 54A. 146 Sentencing Act, ss 21A, 44, discussed in Way (2004) 60 NSWLR 168; see also Two-tiered or Instinctive Traynor and Potas, "Sentencing Methodology: Synthesis?", (2002) 25 Sentencing Trends and Issues (Judicial Commission of New South Wales) 1 at 14. Kirby Considerations of function and principle: Whilst I recognise that the modified version of the prohibition against two-tiered sentencing, now adopted in the joint reasons in this appeal, permits exceptions and acknowledges, in effect, that instances will exist where "some indulgence in an arithmetical process" will pass muster147, the continued endorsement of the discredited view of sentencing as an "instinctive synthesis" remains to undermine this ultimate acknowledgment of the inescapable reality. With all respect to those of the different opinion, the phrase "instinctive synthesis" sends quite the wrong signals for the law of sentencing in Australia. Who are those who have the "instincts" in question? Only the judges. This is therefore a formula that risks endorsement of the deployment of purely personal legal power. It runs contrary to the tendency in other areas of the law, notably administrative law, to expose to subsequent scrutiny the use of public power by public officials148. It is contrary to the insistence of Australian courts149, including this Court150, that judicial officers must give reasons for their decisions. At this stage in the development of the Australian law of sentencing, this Court should be encouraging, not impeding, transparency and accountability of judicial decision-making151. I remain of the view that "[i]t is too late (and undesirable) to return to unexplained judicial intuition"152. Talk of "instinctive synthesis" is like the breath of a bygone legal age. It resonates with a claim, effectively, to unexplainable and unreviewable power. It is for these reasons that the supposed "instinctive synthesis", as an explanation of in sentencing, has been criticised by knowledgeable experts in criminal law and sentencing153. All of those experts judicial task the 147 Joint reasons at [39]. 148 Davis, Discretionary Justice: A Preliminary Inquiry, (1971) at 31; Dworkin, Taking Rights Seriously, (1978) at 31-33; Galligan, Discretionary Powers: A Legal Study of Official Discretion, (1986) at 17-22; cf Osmond v Public Service Board of New South Wales [1984] 3 NSWLR 447 at 462-464 citing Wade, Administrative Law, 5th ed (1982) at 486. 149 Pettitt v Dunkley [1971] 1 NSWLR 376 at 387-388 per Moffitt JA. 150 Public Service Board of NSW v Osmond (1986) 159 CLR 656 at 666-667. 151 Pearce v The Queen (1998) 194 CLR 610 at 624 [46]; Wong (2001) 207 CLR 584 at 621-622 [101]-[102]; Weininger v The Queen (2003) 212 CLR 629 at 652 [75]. 152 AB (1999) 198 CLR 111 at 150 [102]. 153 eg Leader-Elliott, "Instinctive synthesisers in the High Court", (2002) 26 Criminal Law Journal 5; Bagaric, "Sentencing: The Road to Nowhere", (1999) 21 Sydney (Footnote continues on next page) Kirby know, and recognise, that there are limits to the explanation of reasons for a given sentence. Ultimately, unless the law itself fixes the sentence, judgment is invoked. However, as the present appeal demonstrates, appellate courts expounding general principles should encourage revelation at least of the important adjustments that are made by a sentencing judge. They should not be encouraging the thought that there descends upon a judicial officer, following appointment, a mystical "instinct" or "intuition" that ensures that he or she will get the sentence right "instinctively". That approach discourages explanation of the logical and rational process that led to the sentence, so far as it can reasonably be given and is useful. Functional analysis also suggests that talk of judicial "instinct" is ill- advised. If, in reasoning, the judicial officer does make a significant adjustment for a particular factor – measurable in the judge's opinion in quantitative or percentage terms – the choice before the law is whether that factor should be specifically exposed in the reasons or not. There are many grounds of policy and principle, in such circumstances, why it should be154. If it is not identified, the risk that arises is that identified by Hulme J in the Court of Criminal Appeal in this case. Some judges will feel that it is safer, wiser or even essential to keep the process of reasoning secret. That course is good neither for the parties, nor for the community, nor for the discharge of the functions of sentencing, nor for appellate review155. With some judicial officers, talk of "instinct" and pure "intuition" might be understood as endorsing a process of sentencing that involves little more than plucking a figure from the air, to use Hulme J's telling expression156. Such an arbitrary exercise of public power is to be discouraged, not endorsed by the use by this Court of phrases such as "instinctive synthesis". Semantics and substance: I have previously suggested that some of the debates over the two-stage approach and instinctive or intuitive synthesis may be semantic, not substantive157. That remains my view. To this extent, I agree with Law Review 597; Bagaric and Edney, "What's instinct got to do with it? A blueprint for a coherent approach to punishing criminals", (2003) 27 Criminal Law Journal 119; cf Fox and Freiberg, Sentencing: State and Federal Law in Victoria, 2nd ed (1999) at 195-196 [3.302], 202 [3.307]. The objection to the two-stage approach is also inconsistent with approaches of final courts overseas. See eg R v McDonnell [1997] 1 SCR 948 at 986-989 [57]-[61]. 154 Cameron (2002) 209 CLR 339 at 362 [70]. 155 See above these reasons at [96]-[98]. 156 Markarian (2003) 137 A Crim R 497 at 505 [33]. 157 Cameron (2002) 209 CLR 339 at 362 [71]; see also Punch (1993) 9 WAR 486 at Kirby what is said in that part of the joint reasons158. But a sticking point remains, for I cannot accept a Williscroft "instinct" or a Young prohibition on two-stage reasoning as sentencing principles, where a more transparent course is available, appropriate and more conformable with modern legal principles governing the deployment of public power. To say the least, there have been important developments in the subjection of uncontrolled discretions to judicial analysis since R v Geddes159 was written160. Fundamentally, such developments derive from a principle that lies at the heart of the Australian Constitution and its system of democratic and accountable government. Intuitive and instinctive power is not now in favour. The rule of law stands in its place161. I agree that there is no single correct sentence (unless it is lawfully fixed by Parliament). I also agree that sentencing is not a mechanical, numerical, arithmetical or rigid activity in which one starts from the maximum fixed by Parliament and works down in mathematical steps162. The process is not so scientific. Because there are a multitude of factors to be taken into account, many of them pulling successively in opposite directions, the evaluation, in terms of time of imprisonment, quantity of fine or other sanction, is necessarily imprecise163. Human judgment is inevitably invoked. In sentencing there is sometimes a legitimate role for differences of judicial view. These may occasionally favour the extension of leniency, as Osenkowski164 shows. Necessarily, there must also be room for the views of a judicial officer who takes a more punitive view of all of the relevant considerations in the case. So long as all relevant considerations are given due attention, the discretionary character of sentencing will inhibit appellate interference. 158 Joint reasons at [36]. 159 (1936) 36 SR (NSW) 554 at 555-556. 160 See reasons of McHugh J at [65]. 161 Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 193; Kartinyeri v The Commonwealth (1998) 195 CLR 337 at 381 [89]; Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 513-514 [103]-[104] per Gaudron, McHugh, Gummow, Kirby and Hayne JJ. 162 AB (1999) 198 CLR 111 at 121-122 [16]; Wong (2001) 207 CLR 584 at 611 [74]- [75], 612 [77]; R v Whyte (2002) 55 NSWLR 252 at 278 [160]-[166]. 163 Weininger (2003) 212 CLR 629 at 645 [50]. 164 (1982) 30 SASR 212 at 212-213 per King CJ. Kirby This said, there are outer boundaries. They control the scope for judicial officers to indulge individual idiosyncrasies. Sentencing appeals afford a protection against miscarriages of justice that weigh heavily on the liberty of the individual affected. The appellate court should be attentive to the possibility of error. But it is not, in my view, an error of sentencing principle for the sentencing judge to proceed in two or more stages. Exposure of particular discounts – for a plea of guilty, the provision of assistance to authorities or other considerations that seem most significant – is not compulsory unless statute makes it so. But neither does it constitute an error of sentencing principle as such. Judicial officers engaged in sentencing should be encouraged to reveal their processes of reasoning. Simply to assert that they have considered a list of relevant matters, without identifying, in general terms, the weight that has been given to the most important of them, may represent an error in sentencing. The generalised assertion by the sentencer that he or she has acted on "instinct", "intuition" or personal experience or the experience in the courts, is not now enough, in my opinion, to meet the standards of reasoning in sentencing that we have come to expect in Australia. Honesty and transparency in the provision of reasons is the hallmark of modern judicial administration. Not judicial "instinct". Conclusion: a needless diversion Limited residue of the prohibition: Where, then, have we arrived at the end of this judicial journey? The joint reasons continue to chastise the "two- tiered approach"165. Yet if it is merely a "sequential" approach, involving distinct factors, it is apparently unobjectionable. The difference will usually be illusory. Moreover, there are now "[n]o universal rules"166. This is at least an advance on Young and the earlier unyielding prohibition upon a staged explanation of the ultimate sentence imposed by a judge. However, there is still talk of "instinctive synthesis"167. Yet this too must apparently be reconciled with the obligation of public decision-makers to transparency and also with the specific judicial duty to provide proper reasons168. In the end, even the postulated process of "instinctive synthesis" to the judicial outcome is not apparently to be confused with "mysterious" and "arcane" 165 Joint reasons at [37]. 166 Joint reasons at [36]. 167 Joint reasons at [35]-[39]. 168 Joint reasons at [39]. Kirby activities limited to judges169. Perhaps, in the end, the "instinctive synthesis" means nothing more than that the sentencing judge is to take everything relevant into account and to reach a final judgment. But this is what judges have always had to do. So what does the reference to "instinctive" add, except to distract? All that seems to be left from the original imperatives, traced to the decisions in Williscroft and Young, is a prohibition on mathematical adjustment in deriving the ultimate sentence imposed on an offender. Yet even this is not now absolute. Specification, in a staged or sequential approach, of the degree of reduction of what would otherwise have been the penalty for a plea of guilty is, it seems, sometimes permissible170. So presumably is re-adjustment for any assistance to authorities. So indeed, by statutes in many parts of Australia, must now be specific reductions and adjustments expressed in terms of identified Even occasionally (albeit in unexplained quantification or percentages. circumstances) arithmetical indulgence will now, it seems, be overlooked. However, preferably that will happen only where the factors adjusted are comparatively few and the case is "simple"171. So analysed, the residue of this judicial debate over twenty years – in this Court over the past five years – is revealed for what it is. Australian judges must now express their obeisance to an "instinctive synthesis" as the explanation of their sentencing outcomes. It might be prudent for them to avoid mention of "two stages" or of mathematics. Yet in many instances (and increasingly by statutory prescription) if judges do so, no error of sentencing principle will have occurred. Such mention may, in fact, sometimes even be required172. The lofty and absolute prescriptions of Williscroft and Young remain in place like the two vast and trunkless legs of stone of Ozymandias173. But, with all respect, they are now beginning to look just as lifeless. One day, I expect that travellers to the antique land of this part of the law of sentencing will walk this way without knowing that the two proscriptions once were there. The ironic disclosure of error: By virtue of the transparent approach taken correctly, in my view, by the Court of Criminal Appeal, it is apparent that that Court erred in adopting the wrong starting point for consideration of the 169 See joint reasons at [39]. 170 Joint reasons at [38]. 171 Joint reasons at [39]. 172 When prescribed by statute. 173 Shelley, "Ozymandias", reproduced in The Norton Anthology of English Literature, 6th ed (1993), vol 2 at 672. Kirby appellant's sentence for the principal offence. That error warrants correction. For this reason, the appeal must succeed and the matter must be remitted to the Court of Criminal Appeal for disposition of the appeal in light of these reasons. However, the appellant's specific complaint that the Court of Criminal Appeal erred in adopting the "staged approach" in my view fails. But for that approach, the appellant's appeal to this Court would probably never have been heard, and the errors that now occasion the appellant's success would not have been revealed. Orders For the foregoing reasons, I agree in the orders proposed in the joint reasons.

HIGH COURT OF AUSTRALIA GUMMOW ACJ CONCRETE PTY LIMITED APPELLANT AND PARRAMATTA DESIGN & DEVELOPMENTS PTY LIMITED & ANOR RESPONDENTS Concrete Pty Limited v Parramatta Design & Developments Pty Ltd [2006] HCA 55 6 December 2006 ORDER Appeal allowed with costs. Set aside the orders made by the Full Court of the Federal Court of Australia on 29 July 2005 and 22 August 2005 and in their place order that the appeal to that Court be dismissed with costs. Remit to the Federal Court of Australia for determination the inquiry into the quantum of damages referred to in Order 3 made by Conti J on 13 October 2004. Grant leave out of time to the respondents to file a notice of cross-appeal in the form of Annexure A to the affidavit of Gordon Scurr sworn on 29 June 2006. The cross-appeal be treated as having been instituted and heard instanter and be dismissed with costs. On appeal from the Federal Court of Australia Representation B W Rayment QC with A J Sullivan QC and D T Kell for the appellant (instructed by Costa & Associates) C R Birch SC with J-J T Loofs for the respondents (instructed by Hal Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd Intellectual Property – Copyright – Infringement – Architect's drawings – Two companies formed a joint venture and purchased a development site – Director and shareholder of one of the companies in the joint venture also sole director and shareholder of architectural firm engaged as architect to prepare drawings for local council for a development application – Consent received from development in accordance with the drawings – Joint venturer's dispute – Site sold by trustees for sale – Purchaser of site on notice that architect sought to deny the purchaser's use of the drawings – Whether purchaser of site had an implied licence to use the drawings. Courts and judicial system – Apprehension of bias – Exchange between bench and counsel – Questioning of witness by trial judge – Whether trial miscarried on the ground of apprehended bias. Words and phrases: "apprehended bias", "implied licence", "joint venture" Copyright Act 1968 (Cth) ss 10(1), 202(1), 202(2). Conveyancing Act 1919 (NSW) s 66G. Environmental Planning and Assessment Act 1979 (NSW) ss 4(1), 78A-81, 95. Local Government Act 1993 (NSW) s 68. Real Property Act 1900 (NSW). GUMMOW ACJ. The Full Court of the Federal Court (Branson, Kiefel and Finkelstein JJ)1 dealt first with what appears to have been argued as the main issue before the Full Court. This concerned the freedom of Concrete Pty Limited ("Concrete") to use the architectural plans and drawings in question without infringing copyright subsisting in them as original artistic works, within the meaning of ss 31 and 32 of the Copyright Act 1968 (Cth) ("the Act"). Having decided that issue adversely to Concrete and disagreeing with the outcome at the trial, the Full Court went on to consider the challenge to the conduct of the trial which had been put on a quite different footing, namely, the alleged apparent bias of the primary judge. The Full Court upheld that challenge. In proceeding in this way, the Full Court itself fell into error. The present respondents, Parramatta Design & Developments Pty Limited ("Parramatta") and Mr Fares, were permitted to present their arguments to the Full Court on inconsistent bases. If the bias submissions were to succeed, the remedy would be a retrial. If the copyright submissions were to succeed, the Full Court would itself provide the orders which should have been made and there would be no occasion to order a retrial. The Full Court so disposed of the appeal as to accept the bias submissions but without consequential relief. If allowed to stand uncorrected, this outcome would have the adverse consequences for the administration of justice to which Kirby and Crennan JJ refer in their reasons for judgment in passages with which I agree. The application by Parramatta and Mr Fares for leave to file out of time a cross-appeal in this Court should be granted, but the cross-appeal dismissed. As to the particular aspects of the conduct of the trial said to make out the complaint of apprehended bias, I agree with Callinan J and with Kirby and Crennan JJ that no such complaint is made out. In particular, the conclusion stated for the Privy Council in Almeida v Opportunity Equity Partners Ltd2 by Lord Walker of Gestingthorpe applies in the present case. His Lordship said3: "[T]he judge's interventions were motivated, not by partiality, but by the wish to understand the evidence (which was often obscure and inconsequential) and to push on the trial process." 1 Parramatta Design & Developments Pty Ltd v Concrete Pty Ltd (2005) 144 FCR [2006] UKPC 44. [2006] UKPC 44 at [103] Gummow ACJ There remains the copyright issue. Here I agree generally with what is said by Callinan J and by Kirby and Crennan JJ in their reasons for judgment and would add the following. Concrete sued Parramatta and Mr Fares for unjustifiable threats made actionable by s 202 of the Act. In its defence and cross-claim, Parramatta pleaded the subsistence of its copyright in the plans and drawings in question, entry by its related company, Landmark Building Developments Pty Ltd ("Landmark"), into a joint venture to develop an apartment complex on the site at Nelson Bay, the breakdown of the joint venture, the sale of the site to Concrete, the absence of any implied licence in the joint venture thereafter to use the plans and drawings, and the inability of Concrete by contract to receive a better title or licence to those plans or drawings than that vested in the joint venture parties. Two points should be noted as to the way in which the litigation was framed. First, there was no joinder by Parramatta of Landmark or of the other joint venturer, Toyama Pty Ltd ("Toyama") or its principals, Ms Haviland and Mr Rix. Secondly, Parramatta did not plead that any implied licence in favour of the joint venturers had been revocable by Parramatta and that Parramatta had effectively revoked that licence. Further, as Kirby and Crennan JJ point out in their reasons, the trial was not run on a basis of entitlement to revoke any implied licence; rather, the contention was that no such implied licence existed for want of satisfaction of a condition necessary for its existence. Presented in terms of the Act, the copyright issues in this Court are: (a) whether Concrete is liable to restraint against the doing in Australia, or the authorising of the doing in Australia, of any act comprised in the copyright in the plans and drawings, "without the licence of the owner of the copyright" within the meaning of ss 13(1) and 36 of the Act; and (b) whether, to the contrary of (a), Concrete has been the object of unjustifiable threats of proceedings for copyright infringement and itself has an action for groundless threats under s 202 of the Act. The Act contains a definition of "exclusive licence" (s 10(1)) which requires such a licence to be in writing and signed by the owner or prospective owner of the copyright; special rights are given to exclusive licensees (ss 117-125). No such licence is asserted by Concrete. However, any act of Concrete with respect to the plans and drawings will be treated under the Act as done with the licence of Parramatta if the doing of the act "was authorized by a licence binding [Parramatta as] the owner of the copyright" (s 15). Section 15 is an important provision for this case. It accommodates instances of what ordinarily would be called a sub-licence4. The 4 Lahore, Intellectual Property Law in Australia – Copyright, (1977), §923. Gummow ACJ section also encompasses cases where the existence and scope of an effective licence is found in a consent binding the copyright owner other than by reason solely of the principles of contractual consideration and privity. The facts and holding of the Privy Council in Mellor v Australian Broadcasting Commission5 would present such a case. There the appellants were publishers of band music and were owners of the sole right of performing in public within Australia a large number of musical works arranged for performance by brass and military bands. They published pamphlets containing price lists of their sheet music and words stating that the music was free for public performance anywhere. The licence or consent thereby given included broadcasting by the Australian Broadcasting Commission of band performances, with any necessary consequences of such broadcasting, including the use of wirelesses by listeners. The Commission had engaged bands, which had purchased the appellants' sheet music, to play some of the copyright works of the appellants and had caused the performances to be broadcast6. It is here that the nature and scope of the joint venture in which Parramatta, Landmark and Toyama participated becomes critical. No written agreement was made recording the terms of the joint venture. Title to the development site was registered for a tenancy in common as to two-thirds for Landmark and one-third for Toyama. The land subsequently was sold in the circumstances explained in the other reasons for judgment. Title to the copyright of Parramatta was not conveyed by Parramatta to Landmark and the other members of the joint venture. However, the plans were made available for the purposes of the joint venture, in particular to procure the grant of the development application, an essential step to achieve the development of the site. Landmark had a substantial financial interest in that development and its proceeds, and Mr Fares, sole director and shareholder in Parramatta, was a principal of Landmark. Contrary to the case asserted by Parramatta, the purposes of the joint venture extended, upon breakdown of relations between the parties, to such use [1940] AC 491; cf Hall-Brown v Iliffe & Sons Ltd [1928-35] MacG Cop Cas 88 at 6 The case was decided when the Copyright Act 1911 (UK) was in force in Australia by reason of the Copyright Act 1912 (Cth). This, unlike s 31(1)(iv) of the Act, conferred no distinct broadcast right. The Privy Council approached Mellor on the footing that there would be "a performance" if a broadcast were heard in public and the broadcaster might then be liable for authorising an infringement of the musical works: [1940] AC 491 at 499-500. Gummow ACJ of the plans and drawings as was necessary and convenient to turn to account the development site and the current development approval. As a matter of contract, Parramatta and Landmark were obliged to cooperate in the doing of acts necessary for the performance by the joint venturers of their mutual and fundamental obligations under their arrangements7. The better view of the facts is that, rather than manifested by distinct and several contracts, the joint venture arrangements were varied at the stages identified by Callinan J in his reasons and in accordance with the principles considered in Federal Commissioner of Taxation v Sara Lee Household & Body Care (Australia) Pty Ltd8. Further, given the nature and scope of the joint venture arrangements, the joint venture possessed fiduciary characteristics of the kind identified in United Dominions Corporation Ltd v Brian Pty Ltd9. For Parramatta to deny consent to the use by Concrete of the plans and drawings as consequent upon the acquisition of the development site would be to pursue its interests in conflict with the purposes of the joint venture as earlier identified. For these reasons, and as an implication drawn from the circumstances of the case, Concrete enjoys the authority of a licence binding upon Parramatta within the meaning of s 15 of the Act. In addition, for the reasons developed by Callinan J and by Kirby and Crennan JJ, the consent upon which Concrete may rely has not been given by Parramatta subject to revocation at will, as a bare licence; the reward to Parramatta was to be the fruits of participation in the joint venture in the manner described above. As appears from the foregoing, the legal rights and duties of the parties to this dispute turn upon the particular circumstances. Concrete has acquired the Nelson Bay site by reason of the breakdown of the joint venture for the development of the site, with Parramatta's plans and drawings already having been used to obtain a still current development approval and Parramatta having, in substance, a share in the joint venture. 7 Mackay v Dick (1881) 6 App Cas 251 at 263, 270; Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 448-449; Federal Commissioner of Taxation v Sara Lee Household & Body Care (Australia) Pty Ltd (2000) 201 CLR 520 at 547 [89]. (2000) 201 CLR 520 at 533-534 [22], 545-546 [81]. (1985) 157 CLR 1 at 10-11. Gummow ACJ Some of the cases discussed in detail by Kirby and Crennan JJ, particularly Beck v Montana Constructions Pty Ltd10 and Blair v Osborne & Tomkins11, contain expressions which suggest the implication as a matter of law of a licence in a particular class of contract between architect and client where standard contract conditions and scales of professional fees are employed. The present dispute arises in very different circumstances. The argument in this Court of both sides to some extent placed too great a significance on what were the features within or outside the traditional relationship arising from the retainer of a member of the architect's profession by a client. As indicated above, I do not regard this case as turning upon any implication as a matter of law in a contract of a particular description. I also would reserve for further consideration any application in the field of copyright licensing of the doctrines respecting non-derogation from grant12 and the applicability in Australia of the reasoning in Solar Thomson Engineering Co Ltd v Barton13 and British Leyland Motor Corpn Ltd v Armstrong Patents Co Ltd14. The appeal should be allowed with costs and the cross-appeal dismissed with costs. The orders made by the Full Court on 29 July and 22 August 2005 should be set aside and in place thereof the appeal to that Court should be dismissed with costs. The setting aside of the orders of the Full Court has the effect of reinstating Order (3) of the orders made by the primary judge on 13 October 2004. Order (3) provided for an inquiry as to the quantum of damages sustained by Concrete by reason of the threats by Parramatta and Mr Fares. To place the matter beyond doubt, there should be an order of this Court remitting to the Federal Court for determination the inquiry into damages referred to in that Order (3). 10 [1964-5] NSWR 229. 12 Canon Kabushiki Kaisha v Green Cartridge Co (Hong Kong) Ltd [1997] AC 728 at 13 [1977] RPC 537. Kirby Crennan KIRBY AND CRENNAN JJ. This is an appeal from a decision of the Full Court of the Federal Court of Australia. The Full Court (Branson, Kiefel and Finkelstein JJ)15 allowed an appeal from the decision of the primary judge (Conti J)16 and ordered that the declarations and orders made at first instance be set aside. In this Court the appellant, Concrete Pty Limited ("Concrete"), seeks orders which would restore its success against the respondents at first instance. The appeal to this Court raises two main issues. The first is whether the appellant has an implied licence to use architectural plans and drawings prepared by the first respondent, Parramatta Design & Developments Pty Limited ("Parramatta Design"), for the purpose of undertaking the development of 14 units at a site in Nelson Bay, New South Wales. The second issue is whether a case of apprehended bias could properly be established in regard to the conduct of the primary judge. The facts Parramatta Design is a company which provides architectural design services. The second respondent, Mr Ghassan Fares, is a qualified architect and is the sole director and shareholder of Parramatta Design. Mr Benjamin Barrak, a solicitor, conducts a legal practice under the name of Barrak Lawyers. Together Mr Fares and Mr Barrak established Landmark Building Developments Pty Ltd ("Landmark") as a property development company. Mr Fares is a director and shareholder of Landmark and he recognised at trial that Parramatta Design and Landmark are related companies. The Nelson Bay site came up for sale in 1998. Mr Fares and Mr Barrak decided to seek a joint venture partner to help purchase and develop the site. Mr Barrak was acquainted with Ms Jeanette Haviland, a sole practitioner. He asked Ms Haviland and her former husband, Mr Kevin Rix, if they would like to be involved in the project presented to them as a joint venture arrangement. They agreed to take a one-third interest in the development through their company, Toyama Pty Ltd ("Toyama"). Accordingly, Landmark contributed two-thirds of the necessary funds for purchase of the site, while Toyama contributed one-third. No written agreement recording the terms of the joint venture was ever made. The site was purchased by the joint venturers on 2 October 1998 for $560,000. Landmark and Toyama became the registered 15 Parramatta Design & Developments Pty Ltd v Concrete Pty Ltd (2005) 144 FCR 16 Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd [2004] FCA 1312. Kirby Crennan proprietors of the land as tenants in common, with a respective two-thirds and one-third interest. It was agreed between the parties that Mr Fares and/or Parramatta Design would perform the architectural services for the joint venture. No written agreement for the provision of these services was drawn up. In any event, Parramatta Design prepared plans and drawings for an eight unit development on the site. Landmark and Toyama paid $27,000 for the plans and drawings17. Planning approval for the eight unit development was sought on 7 March 1999, and granted by Port Stephens Council on 24 September 1999. Some time after the eight unit development had been approved Mr Fares and Mr Barrak became aware that a neighbouring property had been granted approval to build a 16 unit development. They decided that it would be preferable, inferentially because it would be more profitable, to construct a 14 unit development on the site instead. In order to persuade Ms Haviland and Mr Rix to agree to the increased development, despite the additional costs and delay involved, Mr Fares offered to prepare the plans and drawings for the larger development at no additional cost beyond the $27,000 already paid18. It was agreed between the joint venturers (one of whom was, of course, the architect) that the architect's offer to prepare the plans and drawings for the joint venture, free of charge, should be accepted. Parramatta Design proceeded to prepare the new plans and drawings and to lodge an application for a development consent with Port Stephens Council on behalf of the joint venturers as owners of the land to which the development consent would apply. Consent for the 14 unit development was granted on 10 May 2000. Section 95 of the Environmental Planning and Assessment Act 1979 (NSW) ("the EPA Act") provides that, subject to any extension granted, a development consent will lapse if construction is not begun within five years. There was evidence at the trial which indicated that if the development consent lapsed a new regime of regulatory planning changes applied such that any future application for a development consent would be confined to an eight unit development. 17 At trial it was common ground that the payment of $27,000.00 related to work undertaken prior to the decision to seek a 14 unit development approval. There was some dispute about whether this payment was a fee for services or to cover Parramatta Design's out-of-pocket expenses, which need not be resolved here because it does not affect the issues in the present appeal. 18 Evidence was led at trial that a reasonable fee for the preparation of the plans for a 14 unit development would be in the range of $28,000 to $30,000. Kirby Crennan Development did not go ahead because of a falling out between the joint venturers. There was a dispute regarding whether they had agreed that Parramatta Design would build the units under a cost-plus contract. As a result of that dispute, the site was put up for sale in June 2002. On 27 June 2002 a written offer to purchase the land for $1.8 million was made by a company called Tangate Pty Ltd ("Tangate"). In response Mr Barrak wrote to Tangate on behalf of Landmark, accepting the offer on 10 July 2002 and stating that: "The full size copy of the approved plans as requested ... in your letter may be collected from our office. Please telephone the writer ... in order to arrange a mutually convenient time for collection of the copy." The reference to the "approved plans" was to the plans and drawings for the 14 unit development. Toyama communicated its individual acceptance of the offer directly to Tangate by letter dated 11 July 2002. However, the sale was ultimately called off by Tangate on 15 July 2002 because of alleged unprofessional behaviour on Mr Barrak's part. The relationship between the joint venturers continued to deteriorate and Toyama made an application pursuant to s 66G of the Conveyancing Act 1919 (NSW) to the Supreme Court of New South Wales for the appointment of trustees for the sale of the site. An order appointing the trustees was made on 12 December 2002 and it relevantly provided that "the [Nelson Bay] land be vested in such trustees ... to be held by the said trustees upon statutory trust for sale under ... the Conveyancing Act". The trustees for sale were authorised to pay out two-thirds of the net proceeds of the sale to Landmark and one-third to Toyama. After the sale, Landmark received two-thirds of the net proceeds, but Toyama was prevented from obtaining access to its one-third share as a result of an injunction granted upon the application of Mr Fares and Mr Barrak by the Supreme Court. Soon after the appointment of the trustees for sale, Parramatta Design put the trustees on notice that "we are the designers and owners of the copyright of an approved DA" ("DA" standing for development approval) for the 14 unit development and that it would not grant a licence for the use of "our copyright or our plans". As a result of the correspondence from Parramatta Design it was not clear what, if anything, the trustees could say to prospective purchasers about the right to use the plans and drawings, so they sought advice on this issue from the Supreme Court. In accordance with that advice the trustees attached to the Kirby Crennan contract of sale a copy of both development consents and included the following DEVELOPMENT CONSENTS 7.1 Annexed and marked with the letters indicated are copies of the following: 'A' Front page of Notice of Determination of Development Application 24 September 1999 from the Port Stephens Council excluding all conditions ('the First Development Consent'). 'B' Letter from Port Stephens Council to Parramatta Design & Development ('the Council letter'). 'C' Notice of Determination of Development Application 10 May 2000 from the Port Stephens Council ('the Second Development Consent'). The vendors are unable to provide copies of the plans and designs which accompanied the First and Second Development Consents. The vendors disclose that a dispute exists in relation to the right to use the plans and designs which accompanied the Development Applications, including as to the existence of any licence to make use of the copyright in those plans and designs. The vendors further disclose that legal action has been foreshadowed in respect of any future use of those plans and designs. The vendors give no warranty as to the availability or the right to use the plans and designs which accompanied the First and Second Development Consents. The purchaser acknowledges that it has satisfied itself in respect of all matters referred in or arising out of the First and Second Development Consents and will not raise any objection, requisition or claim for compensation in respect of any of the matters arising out of the First and Second Development Consents." The land was then offered for sale by public auction. It was advertised to have the benefit of the development consent, both Toyama and Landmark having agreed on 22 May 2003 before Young CJ in Equity that the contract of sale could disclose the existence of the development consent issued by Port Stephens 19 (2005) 144 FCR 264 at 267 [5]. Kirby Crennan Council. Concrete purchased the land for $2,760,000 by contract of sale dated 7 August 2003. Prior to settlement Concrete's solicitors sent a letter to the trustees' solicitors enclosing a deed of assignment with respect to "the architectural plans and drawings lodged in respect of or accompanying the Development Applications" and asking for it to be signed. The trustees did not sign the deed of assignment. Upon completion of the sale on 15 September 2003 Concrete became, and remains, the registered proprietor in fee simple under the Real Property Act 1900 (NSW) of the Nelson Bay land. Concrete wished to construct a 14 unit development in accordance with the development consent granted on 10 May 2000. After purchasing the land, Concrete approached Parramatta Design and offered to pay for a licence to reproduce the plans and drawings for the 14 unit development, but Parramatta Design refused to give its express permission to use the plans and drawings. This led to a dispute between the parties, which resulted in Concrete commencing proceedings in the Federal Court on 7 October 2003. Following commencement of the proceedings, without admission of liability, Concrete offered to pay Parramatta Design $33,000 plus costs for permission to use "any or all of the plans and drawings the subject of your clients' claim for copyright for the purpose of development in accordance with the development consent attached to the land ...". Parramatta Design responded by asking for $5 million to license any use of its copyright material. The Federal Court decision At trial, Concrete asserted that it was permitted to use the plans and drawings in the relevant development application which were the same as the plans and drawings in the development consent. It averred it could do so without infringing Parramatta Design's copyright in the plans and drawings by virtue of an implied licence, and brought an action pursuant to s 202 of the Copyright Act 1968 (Cth) ("the Act") alleging the respondents had made unjustifiable threats to bring proceedings for copyright infringement. Section 202 of the Act relevantly provides: "(1) Where a person, by means of circulars, advertisements or otherwise, threatens a person with an action or proceeding in respect of an infringement of copyright, then, whether the person making the threats is or is not the owner of the copyright or an exclusive licensee, a person aggrieved may bring an action against the first-mentioned person and may obtain a declaration to the effect that the threats are unjustifiable, and an injunction against the continuance of the threats, and may recover such damages (if any) as he or she has sustained, unless the first-mentioned person satisfies the court that the acts in respect of which the action or Kirby Crennan proceeding was constitute, an infringement of copyright. threatened constituted, or, if done, would The mere notification of the existence of a copyright does not constitute a threat of an action or proceeding within the meaning of this section." Concrete's claims under s 202 were based primarily on two letters sent by the respondents' solicitors, Barrak Lawyers, to Concrete's solicitors, Costa & Associates. The first letter was dated 9 September 2003 and the most contentious sentence provided that "[i]f your client proceeds to build in breach of our copyright, it does so at its own risk". The second letter was dated 1 October 2003 and its final sentence stated "we again put you on notice that if your client breaches our client's copyright, it does so at its own risk". The respondents denied that these letters constituted a threat of action within s 202(1), submitting instead that they were "mere notifications" of the existence of copyright within the meaning of s 202(2). The respondents also cross-claimed, alleging that Concrete could not use the plans and drawings without infringing their copyright in them, essentially because no payment had been made for the preparation of the drawings20. The primary judge held that it was clear that the letters "individually and cumulatively [could] fairly be read and understood as notice to Concrete to the effect [that the respondents were] … prepared to exercise their legal rights of enforcement in relation to the subject matter of their claims to copyright"21. Thus, the main issue at trial became whether Concrete had the benefit of an implied licence to use the relevant plans and drawings for the purpose of undertaking development on the land, despite the respondents' refusal to give express consent to the use of the drawings. Concrete advanced three separate, but somewhat overlapping, bases for establishing its implied licence to use the drawings22: as a legal incident of the engagement of the architect (or Parramatta Design) to prepare the drawings for use in applying for the development consent which runs with the land; 20 [2004] FCA 1312 at [3]. 21 [2004] FCA 1312 at [44]. 22 [2004] FCA 1312 at [56]. Kirby Crennan (iii) by reference to the circumstance that an implied licence "typically arises" between an architect and client; and by reference to the five year duration of the development consent giving rise to the contention that the architect (or Parramatta Design) implicitly licensed the owners (or any successor in title) to use the drawings for the purpose of utilising or giving effect to the development consent. The primary judge held that the three bases were well founded in the circumstances and accorded with established principles23, and it followed that Concrete had an implied licence to use the plans and drawings, and that the respondents' cross-claim failed. His Honour's findings in relation to the first two grounds flowed from the premise that a development consent "runs with the land"24. From this the primary judge held25: "where the architect ... has prepared plans and drawings for the purpose of landowners ... obtaining development consent in respect of their jointly owned land, and since that consent runs with the land in accordance with the principles enunciated in those local government authorities, the architect has implicitly licensed any entity (here of course Concrete) who thereafter comes to own that land, that is of course any immediate or ultimate successor in title, during the currency of the development consent, that is until 10 May 2005, to use those plans and drawings for the purpose of implementing the basis, terms and scope of that earlier consent. To hold otherwise would sterilise the land in terms of its usage, in conformity with that development consent, in the hands of successors in title, notwithstanding that the development consent would remain otherwise in force and effect vis-a-vis the original grantee of that consent for the requisite statutory or regulatory period of time." In respect of the third argument26, his Honour held "that a term should be implied by law in the relevant contractual relationship" to the effect that the 23 [2004] FCA 1312 at [136], [148], [150] and [302]. 24 [2004] FCA 1312 at [132]. 25 [2004] FCA 1312 at [133]. 26 The trial judge considered that this argument, by which an implied licence arises in favour of a purchaser during the currency of a development consent, would extend (Footnote continues on next page) Kirby Crennan partners were entitled to use the plans and drawings for the purpose for which they were created, that is the construction of the development, and that "[s]uch a licence ... extends in principle to any purchaser of the subject property"27. In this case the primary judge found that the implied licence had been "transferred from the joint venture companies to Concrete (being a purchaser for value) per medium of the trustees for sale"28. Accordingly, the primary judge found in Concrete's favour, declaring that threats made by Parramatta Design were unjustifiable within the meaning of s 202 of the Act and ordering that Parramatta Design be restrained from making any further threats. The primary judge further ordered that there be an inquiry into the quantum of damages sustained by reason of the threats and dismissed the cross-claim. Before considering the findings on appeal to the Full Court of the Federal Court, it is relevant to note that there were a number of interlocutory applications made prior to the final hearing in this matter, all of which were unsuccessful29. One such application, made on behalf of the respondents, occurred at the commencement of the third day of the hearing on 8 April 200430. The application sought the primary judge's disqualification from further hearing of the proceedings on the ground of apprehended bias. Senior counsel for the respondents declined to make the application or appear on the application, but it was pressed by junior counsel. Substantial written submissions were presented to the Court, and the hearing took up almost a full day. The primary judge dismissed the application at the close of the submissions and delivered written reasons at a later date31. After the application for dismissal had been determined, a different senior counsel appeared for the respondents. On 21 April 2004, further written submissions were forwarded to the primary judge by the respondents, who the dictum in the relevant authorities, but would do so in a logical and coherent way: [2004] FCA 1312 at [135]. 27 [2004] FCA 1312 at [298]. 28 [2004] FCA 1312 at [301]. 29 [2004] FCA 1312 at [4]. 30 [2004] FCA 1312 at [7]. 31 Concrete Pty Limited v Parramatta Design & Developments Pty Limited [2004] FCA 483. Kirby Crennan sought leave to re-open the disqualification application. The primary judge refused to grant the leave sought32. The Full Federal Court decision The Full Court unanimously allowed the appeal33. The main issue on appeal was whether Parramatta Design had "conferred a licence on Concrete and its contractors to reproduce the architectural drawings by the construction of the development"34. The Full Court found that it had not been suggested that Parramatta Design had given express permission to Concrete or to any other person to reproduce the drawings, so the question was whether it had done so by implication35. Looking to the contract between Parramatta Design and the joint venture partners, and assuming there was consideration to support the contract, the Full Court considered whether it was possible to imply a contractual term to the effect that the joint venturers were entitled to use the drawings for the purpose for which they were created, that is the construction of the 14 unit development, and further imply that such a licence extends in principle to any successor in the title to the land which had the benefit of the relevant development consent. Applying general principles emerging from case law relating to implied terms and contracts with architects to the facts of the present case, the Full Court noted that very little was known about the terms of the contract between Parramatta Design and the joint venture partners36. It appeared that Parramatta Design had agreed to prepare the 14 unit development plans and drawings for no fee because Mr Fares wanted to keep Toyama in the joint venture. The Full Court held that Toyama's agreement to remain in the joint venture might have been sufficient consideration to support the contract, but the agreement could not be characterised as the payment of a full fee for Parramatta Design's services37. It could be accepted that Parramatta Design granted a licence to the joint venture partners themselves to construct a 14 unit development in accordance with the plans and drawings if planning approval were obtained. However, the Full Court 32 [2004] FCA 1312 at [8]. 33 (2005) 144 FCR 264. 34 (2005) 144 FCR 264 at 266 [1]. 35 (2005) 144 FCR 264 at 268-269 [11]. 36 (2005) 144 FCR 264 at 271 [20]. 37 (2005) 144 FCR 264 at 271 [20]. Kirby Crennan held that there was no reason to imply a term that this licence could be assigned to a purchaser of the Nelson Bay land38. The Court reasoned that an architect "should not be expected to work for free for the benefit of third parties" and that this position does not change even if "the architect has an interest in the proceeds of sale of the land"39. Further, a sensible purchaser would not expect to be permitted to use an architectural drawing without having made any payment for the privilege, either to the architect or to the vendor by way of reimbursement40. The Full Court went on to hold, contrary to the primary judge's view, that even if an assignable licence to reproduce the plans and drawings were conferred on the joint venturers, that licence was not in fact transferred to Concrete because the existence of the so-called "implied term" was inconsistent with the tenor of cl 7 of the contract of sale: terms will not be implied if they are inconsistent with an express contractual term. Furthermore, trustees for sale can only dispose of property which has been vested in them and in this case the order of the Supreme Court only vested in the trustees the Nelson Bay land, but not a licence to use personal property such as the plans and drawings41. To hold that the sale of the land resulted in an implied licence to use the plans and drawings would ignore the terms of the order. The Full Court further held that it was "difficult to know precisely how the [primary] judge was able to reach the conclusion that, in the circumstances he described, an architect implicitly licenses any entity who comes to own the land to use the plans" and that this view appeared to be based on the false premise that the land would otherwise be sterilised "in terms of its usage, in conformity with the development consent"42. The Full Court found that land is not "sterilised in terms of its usage" simply because a purchaser cannot use an architect's plans and drawings to develop the land without the consent of the architect. The land will have an exchange value and can be used for whatever purpose is permitted by the relevant planning laws. The Full Court said43: 38 (2005) 144 FCR 264 at 271 [20]. 39 (2005) 144 FCR 264 at 271 [20]. 40 (2005) 144 FCR 264 at 271-272 [20]. 41 (2005) 144 FCR 264 at 272 [21]. 42 (2005) 144 FCR 264 at 272 [23]. 43 (2005) 144 FCR 264 at 273 [23]. Kirby Crennan "Looked at more broadly, there is simply no basis upon which to found a licence to use an architect's drawings in favour of a purchaser which has neither paid for those drawings nor altered its position in the belief, induced by the architect, that the drawings would be available for its use." Assuming that Concrete paid fair market price for the land, the Full Court concluded44: "Concrete's case, which the judge accepted to be a good case, is that a purchaser of land who does not before purchase obtain the architect's consent to use his (or her) drawings, who does not under the contract of purchase take an assignment of the right (if there be one) to use the drawings, who does not rely upon any conduct by the architect which represents that the purchaser can use the drawings, and who does not in any event pay anything for the drawings or for their use, nonetheless has the architect's irrevocable permission to reproduce the drawings. In our opinion that case cannot be sustained." In relation to other points which had been raised on appeal, the Full Court held that the respondents' letters to Concrete's lawyers had threatened to instigate legal action for copyright infringement if Concrete used the plans and drawings, but that these threats were justified because Concrete had no right to use the plans and drawings45. Justification is a defence to s 202 of the Act, which is the provision under which Concrete originally brought its action46. The Full Court also held that the trial had miscarried on the ground of apprehended bias47. It was recognised that the test for a reasonable apprehension of bias is whether a fair-minded lay observer might reasonably have apprehended that the primary judge might not bring an impartial and unprejudiced mind to the 44 (2005) 144 FCR 264 at 273 [24]. 45 (2005) 144 FCR 264 at 274 [28]-[29]. 46 The Full Court also refused to rule upon a challenge to certain findings of fact made by the trial judge, as they could not change the result of the appeal, and held that arguing these issues was wasteful and costly: (2005) 144 FCR 264 at 275 [33]. 47 (2005) 144 FCR 264 at 277 [41]. The Full Court made this finding despite the fact that they considered that their conclusions in respect of the other grounds of appeal rendered it "strictly unnecessary" to determine whether the trial judge had failed to maintain the necessary appearance of impartiality: (2005) 144 FCR 264 at 275 Kirby Crennan resolution of the question to be decided48. Having particular regard to comments made during the trial and in the primary judge's reasons for decision, the Full Court held, by reference to the accumulated weight of this material, that this test had been satisfied49. Accordingly, the appeal was allowed with costs, and orders entered in favour of Parramatta Design. Appeal to this Court The primary judge's finding that Concrete had an implied licence from Parramatta Design to use the plans and drawings in question must be restored. The reason for that is to be found in established principle, the relevant legislation and in the specific facts and circumstances of the case. The specific circumstances were that the owners of the land, which included Mr Fares, the architect, had him prepare the plans and drawings for certain purposes, which included the purposes for which Concrete now seeks to use them, having purchased the land with the benefit of a development consent. The owners of the land, including the architect, did not oppose the sale of the land with the benefit of the development consent. It will also be found, in the reasons which follow, that the respondents have not established any reasonable apprehension of bias in respect of the primary judge. Applicable law regarding architectural plans and drawings We turn now to the copyright issues in the present case. An architect who is the author of two-dimensional architectural plans and drawings has copyright in those plans and drawings as "artistic works"50 notwithstanding commonality in plans51. It will be an infringement of such copyright to reproduce52 or publish53 those drawings without the architect's permission54. 48 Johnson v Johnson (2000) 201 CLR 488 at 492 [11] and 498 [31]. 49 (2005) 144 FCR 264 at 277-278 [41]-[46]. 50 Section 10(1) of the Act: "artistic work" means "a ... drawing ... whether the work is of artistic quality or not"; and "drawing" includes "a ... plan"; see also ss 32(1) and (2), 35(2) and 36(1) of the Act. See also ss 3(1) and 48(1) of the Copyright Act 1956 (UK). For a history of the protection of architect's plans, Copinger and Skone James on Copyright, 12th ed (1980) at 101-102 [251]-[255]. 51 Lend Lease Homes Pty Ltd v Warrigal Homes Pty Ltd [1970] 3 NSWR 265; Ancher, Mortlock, Murray & Woolley Pty Ltd v Hooker Homes Pty Ltd [1971] (Footnote continues on next page) Kirby Crennan The principles established by a series of cases concerning implied licences to use architectural drawings and plans were not in contest. Problems have frequently arisen in circumstances where the commissioner of architectural drawings and plans, a property owner (or a successor in title), wishes to assert an implied licence to use them in the absence of any express permission to do so. A non-exclusive licence to use architectural plans and drawings may be oral55 or implied by conduct56, or may be implied, by law, to a particular class of contracts57, reflecting a concern that otherwise rights conferred under such contracts may be undermined58, or may be implied, more narrowly, as necessary to give business efficacy to a specific agreement between the parties59. A term which might ordinarily be implied, by law, to a particular class of contracts may 2 NSWLR 278; Eagle Homes Pty Ltd v Austec Homes Pty Ltd (1997) 39 IPR 565. See also Merchant-Adventurers Ltd v M Grew & Co Ltd [1972] Ch 242. 52 Sections 21(3), 31(1)(a)(i), 35(2) and 36(1) of the Act. 53 Sections 31(1)(a)(ii), 35(2) and 36(1) of the Act. 54 Sections 13(2) and 36(1) of the Act. 55 Section 196(4) of the Act; cf s 119 covering exclusive licences which must be in writing. See also Devefi Pty Ltd v Mateffy Pearl Nagy (1993) 113 ALR 225 at 233-234 per Northrop, Gummow and Hill JJ. 56 Lorenzo & Sons Pty Ltd v Roland Corporation (1992) 23 IPR 376 at 380-382. See also Mellor v Australian Broadcasting Commission [1940] AC 491. For the position in the United States of America see Nimmer on Copyright, vol 3 at 10-49, §10.03[A][7]. See also IAE Inc v Shaver and Cantrell 74 F 3d 768 (1996); Saxelbye Architects Inc v First Citizens Bank & Trust Co 129 F 3d 117 (1997); Effects Associates Inc v Cohen 908 F 2d 555 (1990). 57 Contracts between architects and clients have been recognised as one such class: Beck v Montana Constructions Pty Ltd [1964-5] NSWR 229 at 234-235 per Jacobs J; followed in the United Kingdom in Blair v Osborne & Tomkins [1971] 2 58 Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 449-450 per McHugh and 59 Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 345-347; Castlemaine Tooheys Ltd v Carlton & United Breweries Ltd (1987) 10 NSWLR 468 at 486-487 per Hope JA. Kirby Crennan be excluded by express provision60 or if it is inconsistent with the terms of the contract61. In some instances more than one of the bases for implication may apply62. There is also a line of patent cases where an implied licence to use and repair a patented item has been upheld and recognised as an implied licence which runs with the patented item itself, as a result of which a purchaser of a patented item can both use and repair the item63. That implied licence essentially arises because of the rights conferred by Letters Patent "to make, use, exercise and vend"64 which can be reflected in the terms of a patent specification65. That line of cases was considered in British Leyland Motor Corporation Ltd v Armstrong Patents Co Ltd66 in which a manufacturer of car replacement parts submitted that it had an implied licence from the copyright owner of drawings to use those drawings. In a majority speech, Lord Templeman (with whom Lord Scarman agreed) preferred to uphold a right to repair an item, which is the subject of copyright drawings, by extending the principle of non-derogation from grant which originated in conveyancing law, rather than by implying a licence67. This approach has been subsequently treated with some caution68. There are 60 Gruzman Pty Ltd v Percy Marks Pty Ltd (1989) 99 FLR 116 at 118 per McLelland J; Devefi Pty Ltd v Mateffy Pearl Nagy Pty Ltd (1993) 113 ALR 225 at 240-241 per Northrop, Gummow and Hill JJ. 61 Devefi Pty Ltd v Mateffy Pearl Nagy Pty Ltd (1993) 113 ALR 225 at 240-241. 62 Acohs Pty Ltd v RA Bashford Consulting Pty Ltd (1997) 144 ALR 528 at 546-547. 63 Solar Thomson Engineering Co Ltd v Barton [1977] RPC 537 at 548 (and the authorities there referred to) per Graham J; see also Interstate Parcel Express Co Pty Ltd v Time-Life International (Nederlands) BV (1977) 138 CLR 534 at 549 per 64 Copinger and Skone James on Copyright, 15th ed (2005), vol 1 at 310 [5-217]. 65 Solar Thomson Engineering Co Ltd v Barton [1977] RPC 537. 67 [1986] AC 577 at 639-644. 68 Canon Kabushiki Kaisha v Green Cartridge Co (Hong Kong) Ltd [1997] AC 728 at 737-738 per Lord Hoffmann who gave the judgment of their Lordships; Mars UK Ltd v Teknowledge Ltd [2000] FSR 138 at 147. Kirby Crennan however Canadian authorities which permit a right to repair an item, the subject of copyright drawings, by reference to an implied consent69. By reference to the reasons of Jacobs J in Beck v Montana Constructions Pty Ltd70 and the reasoning of the English Court of Appeal in Blair v Osborne & Tomkins71, the parties agreed that where an architect is engaged to prepare plans and drawings which are the subject of copyright, and is paid a professional fee to do so, if the fee would normally be taken to cover the use of the plans and drawings for the purpose of constructing a building in substantial accordance with them, the commissioner of the plans and drawings (or a successor in title) will have an implied licence to use the plans and drawings for that purpose. It has been recognised, at least since Blair v Osborne & Tomkins72, that the preparation of plans and drawings as part of an application for a development consent by a local council is part of a progressive process governed by legislation. If a development application is successful it will form the basis of more detailed plans and drawings leading to final plans and drawings in accordance with which a building, as approved, will be built73. The relevant legislation The EPA Act contains a comprehensive scheme for the management of development, which includes "the use of land" and the "erection of a building"74. Part 4 contains detailed provisions for the making of a "development application"75, for the assessment of such an application and for issuing a "development consent"76, with or without conditions77, which "makes lawful, in a 69 See, for example, John Maryon International Ltd v New Brunswick Telephone Co Ltd (1982) 141 DLR (3d) 193; ADI Ltd v Destein (1982) 141 DLR (3d) 370. 70 [1964-5] NSWR 229. 73 [1971] 2 QB 78 at 87 per Widgery LJ. 74 Section 4(1) of the EPA Act, definition of "development" and also "building work". 75 Section 4(1) of the EPA Act. 76 Section 4(1) of the EPA Act. 77 Section 80A of the EPA Act; see also s 78A(6). Kirby Crennan town planning context, what would otherwise be unlawful but does so by reference to the acts done and not to the identity of the actor"78. The main steps to be taken are set out from ss 78A to 81 inclusive. Two matters can be noted. First, s 78A(3) of the EPA Act provides that where a consent authority is a council, a person may combine any development application under the EPA Act, with any applications as are necessary for anything requiring approval under the Local Government Act 1993 (NSW) ("the Local Government Act")79. Secondly, where a development application is made under s 78A(3), s 78A(6) provides that council may impose either or both of the following conditions: a condition that the approval is granted only to the applicant and does not attach to or run with the land to which it applies, a condition that the approval is granted for a specified time." The development consent granted for the 14 unit development contained general condition number 3: "The development shall take place in accordance with the plans and documentation submitted with the application excepting as modified by the conditions of this development consent." The development consent was also expressed to be subject to conditions made in accordance with s 80A of the EPA Act to ensure compliance with that Act and the Local Government Act. The Notes to the development consent contained a condition that the development consent was for a period of five years. It is important to observe that there were no conditions imposed restricting the development consent to the applicant, the owners of the land, or to the effect that the development consent did not run with the land. It is also important to note that "[a] development application may be withdrawn at any time prior to its determination"80. The legislative scheme and the steps taken in the processes covered by the legislative scheme in this case constitute the background against which Concrete's claim, to an implied licence to use the plans and drawings in the development consent, falls to be assessed. There is a longstanding principle that 78 Eaton & Sons Pty Ltd v Warringah Shire Council (1972) 129 CLR 270 at 293 per Stephen J (in dissent in the result, but with whom McTiernan J agreed at 276). 79 See the Table to s 68 of the Local Government Act. 80 Environment Planning and Assessment Regulation 2000, reg 52(1). Kirby Crennan a development consent is not personal to the applicant but endures for the benefit of subsequent owners during the currency of the development consent. In Ryde Municipal Council v Royal Ryde Homes81, Else-Mitchell J said: "... a consent to the development of land under a prescribed planning scheme is not personal to the applicant but enures for the benefit of subsequent owners and occupiers, and in some respects a consent is equivalent to a document of title." Application to the facts The question as posed in argument was whether there was an implied licence to Concrete, the successor in title to the land, permitting Concrete to use the plans and drawings prepared by Parramatta Design, for the land owners, Landmark and Toyama, for the application for development consent for the construction of the 14 unit development on the land. This question must be understood to arise in circumstances where the architect, Mr Fares (as principal of Parramatta Design), had prepared the drawings free of charge, for the land owners (which included him, as a principal of Landmark). Implied licence The complication in this case, namely that the architect is both the provider of architectural plans and drawings for the owners of the land and is also one of those owners does not take this case outside the principles set out in Beck v Montana82 and Blair v Osborne & Tomkins83. However, that fact was the source of distinctions upon which the respondents attempted to rely. The respondents sought to distinguish Beck v Montana84 and Blair v Osborne & Tomkins85 in two ways. First, they submitted that no fee was paid for the drawings in this case. Secondly, they submitted that the purchaser bought the land with notice of the architect's claim to copyright. 81 [1970] 1 NSWR 277 at 279 per Else-Mitchell J; see also dicta in Eaton & Sons Pty Ltd v Warringah Shire Council (1972) 129 CLR 270 at 293 per Stephen J. 82 [1964-5] NSWR 229. 84 [1964-5] NSWR 229. Kirby Crennan To appreciate those distinctions it is necessary to examine the reasoning and facts in those two cases in a little more detail. In Beck v Montana86, a firm of architects contracted under a then standard form contract to produce plans for a block of units on particular land. When the owners sold the land they gave the purchaser the plans, and the purchaser decided to build in accordance with the plans but not to retain the architect. The rationale for finding an implied licence in favour of the purchaser to use the plans was explained by Jacobs J as follows87: "[T]he engagement for reward of a person to produce material of a nature which is capable of being the subject of copyright implies a permission, or consent, or licence in the person giving the engagement to use the material in the manner and for the purpose in which and for which it was contemplated between the parties that it would be used at the time of the engagement." There was no reference in Beck v Montana88 to any development consent or planning permission. In Blair v Osborne & Tomkins89 an architect was retained by land owners to prepare drawings for the purpose of obtaining a planning permission and his clients subsequently sold the land with the benefit of the planning permission and gave the purchaser the architect's drawings. Before approving Beck v Montana90 in Blair v Osborne & Tomkins, Lord Denning MR (with whom Widgery and "... when the owner of a building plot employs an architect to prepare plans for a house on that site, the architect impliedly promises that, in return for his fee, he will give a licence to the owner to use the plans for the building on that site. The copyright remains in the architect, so that he 86 [1964-5] NSWR 229; it can be noted that this case was heard under the provisions of the Copyright Act 1911 (Cth), but nothing turns on this fact. 87 [1964-5] NSWR 229 at 235. 88 [1964-5] NSWR 229. 90 [1964-5] NSWR 229. 91 [1971] 2 QB 78 at 85. Kirby Crennan can stop anyone else copying his plans, or making a house from them; but he cannot stop the owner who employed him, from doing work on that very site in accordance with the plans. If the owner employs a builder or another architect, the implied licence extends so as to enable them to make copies of the plans and to use them for that very building on that site: but for no other purpose. If the owner should sell the site, the implied licence extends so as to avail the purchaser also." The position may be otherwise if the architect has charged a nominal fee only to prepare drawings for the limited purpose of obtaining a planning permission92. Beck v Montana93 and Blair v Osborne & Tomkins94 have been followed or recognised on many occasions in Australia95 and elsewhere96. In those two cases and in Stovin-Bradford v Volpoint Properties Ltd97 the architects were utilising standard contract conditions and scales of professional fees determined by their professional institutes and the rationale for implying a consent or licence in all of them depended on the architect's reward or fee. Fees to the architect Central to the respondents' pleadings and submissions was the fact that no payment was made to the architect by the owners of the land in this case. Where 92 Stovin-Bradford v Volpoint Properties Ltd [1971] Ch 1007. 93 [1964-5] NSWR 229. 95 Ng v Clyde Securities Ltd [1976] 1 NSWLR 443; Bourke v Filmways Australasian Distributors Pty Ltd, unreported, Supreme Court of New South Wales, 9 October 1979; R & A Bailey & Co Ltd v Boccaccio Pty Ltd (1986) 4 NSWLR 701; Gruzman Pty Ltd v Percy Marks Pty Ltd (1989) 99 FLR 116; De Garis v Neville Jeffress Pidler Pty Ltd (1990) 37 FCR 99; Tucker v Bentley (1996) 36 IPR 243; Acohs Pty Ltd v RA Bashford Consulting Pty Ltd (1997) 144 ALR 528 per Merkel J; Torpey Vander Have Pty Ltd v Mass Constructions Pty Ltd (2002) 55 IPR 542 at 549 per Spigelman CJ. 96 See, for example, Netupsky v Dominion Bridge Co Ltd (1971) 24 DLR (3d) 484 at 491 per Judson J (delivering the opinion of the Court). See also John Maryon International Ltd v New Brunswick Telephone Co Ltd (1982) 141 DLR (3d) 193; ADI Ltd v Destein (1982) 141 DLR (3d) 370; Robertson v Thompson Corp (2001) 15 CPR (4th) 147. Kirby Crennan any contract is silent on whether a licence to use drawings can be implied when there has been no payment for the drawings the existence of an implication will depend on construing the relevant contract. In considering that question, Laddie, Prescott and Vitoria98 have stated in their text: "There are two alternatives: first, the licence is implied whether or not the architect has been paid and his only remedy for non-payment is breach of contract; secondly, the licence is conditional on the full fee being paid. It is submitted that the first alternative is to be preferred as the second would sterilise the site in the hands of the liquidator." It can be noted that there is some authority to support the proposition that a bare licence to use drawings which are the subject of copyright, that is one given without consideration, is revocable at any time99. In Ng v Clyde Securities Ltd100 the argument that any licence to use architectural plans for a development was subject to an implied term that the licence could be revoked for non-payment of the architect's fees was not successful. On the assumption that Beck v Montana101 should be followed, it was concluded that it was not reasonable to imply a term into a contract between an architect and developer that the licence to use the plans and specifications, once granted and acted upon, could be revoked in the circumstances of subsequent non-payment of the architect's fees102. At trial the architect did not seek to argue that he was entitled to revoke any implied licence on the basis of non-payment of any fee. Rather, he denied the existence of any implied licence on the basis that the joint venturers, Landmark and Toyama, had an oral agreement with Parramatta Design that it would build the 14 unit development on a cost-plus contract103 and that the provision of the plans and drawings, without fee, was conditional on that agreement. 98 The Modern Law of Copyright and Designs, 3rd ed (2000), vol 1 at 917 [24.25]. 99 Hart v Hayman, Christy & Lilly Ltd [1911-1916] MacG Cop Cas 301; followed in Katz v Cytrynbaum (1983) 2 DLR (4th) 52 at 56-57. 100 [1976] 1 NSWLR 443. 101 [1964-5] NSWR 229. 102 Ng v Clyde Securities Ltd [1976] 1 NSWLR 443 at 446. 103 A point which arose but was not decided in Gruzman Pty Ltd v Percy Marks Pty Ltd (1989) 99 FLR 116; see also Devefi Pty Ltd v Mateffy Pearl Nagy Pty Ltd (1993) 113 ALR 225. Kirby Crennan The primary judge rejected the claims of Landmark and Mr Fares that the joint venturers had agreed that Parramatta Design and/or Mr Fares would build the 14 unit development104. This finding of fact was not overturned by the Full Court. There was no contest about the fact that the architect (as principal of Parramatta Design) and the owners of the land (Landmark, of which the architect was a principal, and Toyama) agreed that no fee was to be paid in respect of the preparation of the drawings. The fact that no fees were paid for the preparation of the architectural drawings falls to be assessed by reference to the broad purposes of the joint venture which were clear and not in contest, and the purposes for which, and circumstances in which, the joint venture commissioned the drawings. The clear purpose of the joint venture between Landmark and Toyama was to purchase the land, obtain a development consent in respect of the land, build units in accordance with the development consent, then sell the units and share the profits on a respective two-thirds and one-third basis. The question of whether there was any implied licence to use the drawings falls to be decided at the time when the drawings were prepared at the request of the owners of the land and not at any later time. Such documentary evidence as exists records that the drawings were to be the responsibility of Mr Fares, working for Parramatta Design, for the clients, Landmark and Toyama. The precise circumstances in which the drawings were agreed to be prepared free of charge were dealt with by the Full Court, which noted in its reasons that when Landmark proposed that the joint venture undertake a 14 unit development, instead of an eight unit development, Toyama agreed to the change and noted that according to Ms Haviland (Toyama) she said to Mr Fares and "[I]f you are satisfied to accept the $27,000.00 you have already been paid and all we (Toyama) have to pay is our share of the fresh engineering plans etc. I suppose we should try for 14 units." It was not contended that this consensus between the parties amounted to an express licence or consent and, as noted by the Full Court, it was not suggested by anyone that Parramatta Design had given express permission to any 104 [2004] FCA 1312 at [283]. Kirby Crennan person to reproduce the drawings105. Accordingly there are no findings of fact to the effect that the licence was express, however it is likely in the circumstances recounted that if the parties could have foreseen the collapse of the joint venture they would have made a more formal contract expressly dealing with consent to use the plans and drawings106. Here the architectural plans and drawings were contemplated to be used by the owners to develop the site from the stage of obtaining development consent, through to achieving profits from the sale of any development built in accordance with that development consent. Those purposes must encompass and include a sale of the land with the benefit of the development consent, by the owners, after the development consent has been obtained and before completion of the development. Whilst it is not essential to decide the point, the fact that the company controlled by the architect who provided the plans and drawings to the owners did not charge a fee to those owners, suggests no more than that the architect was willing to contribute his architectural skills to the joint venture, for the benefit of himself and his co-venturers. Were the position otherwise, an architect could "sterilise"107, that is, render unproductive, the land in the hands of owners (including any co-owners), any liquidator of the owners or any successor in title to the owners. This would be the case particularly where considerable costs might be necessary to prepare fresh and different plans or where, as here, legislative changes meant that a development consent for a project of a similar size would not be forthcoming. The principle which applies to these facts is this: in the absence of an agreement to the contrary, an express contract or an express reservation of copyright, an owner (or a co-owner) of land who is an architect, who himself prepares plans or drawings, free of charge, for himself (or for himself and other co-owners) impliedly consents to himself as owner (or co-owner) using the plans and drawings for the purposes for which they have been prepared. The "reward"108 to the architect in such circumstances is not the "fee"109 which accompanies an orthodox retainer between an architect and client. The reward is 105 (2005) 144 FCR 264 at 268 [11]. 106 See Nichrotherm Electrical Co Ltd v JR Percy and GA Harvey & Co (London) Ltd [1957] RPC 207 at 212. 107 The expression of Laddie, Prescott and Vitoria, The Modern Law of Copyright and Designs, 3rd ed (2000), vol 1 at 917 [24.25]. 108 Beck v Montana Constructions Pty Ltd [1964-5] NSWR 229 at 235 per Jacobs J. 109 Blair v Osborne & Tomkins [1971] 2 QB 78 at 85 per Lord Denning MR. Kirby Crennan so much of the net profits expected to eventually flow at the conclusion of the joint venture in respect of which he is both "architect to the joint venture" and a "joint venturer", which are referrable to the fact that the joint venture partners did not have to incur a disbursement for architect's fees. The fact that an architect might be prepared to share that part of the net profit with his co-venturers does not detract from the foregoing analysis. For this reason, the argument that there is no consideration in these circumstances must be rejected. It follows that such circumstances are distinguishable from those cases in which there is a bare licence, revocable at will. The purchaser's position The respondents sought to resist any conclusion that the purchaser obtained an implied consent to use the plans and drawings by relying on the architect's conduct in asserting copyright in the drawings and giving notice that no licence would be forthcoming prior to the sale of the land and the terms of cl 7 of the contract of sale. Despite the architect's conduct prior to the sale, the implied licence in favour of the owners of the land to use architectural plans and drawings for the purpose for which they were commissioned also gives rise to an implied consent in favour of their successors in title, the purchaser, Concrete. This implied consent does not arise out of any contract between the purchaser and the architect, but is implied from the nature of the original arrangement between the owners and the architect. The owners requested and obtained the architectural plans and drawings for the purpose of obtaining a development consent which ran with the land for a period of five years and which would permit the building of units, for sale, substantially in accordance with that development consent. An earlier sale than was originally contemplated does not extinguish that implied consent. Once the parties had fallen into dispute, the architect, Mr Fares, exhibited two differing and mutually inconsistent attitudes to the prospect of the sale of the land. For example, by letter of 18 November 2002, Mr Fares wrote to Toyama's solicitors on behalf of Parramatta Design and said of Toyama: "We have not been engaged or instructed by [Toyama] to do anything. We have not accepted any instructions from your clients to perform any architectural service ... All work conducted by us has been done purely as part and parcel of the agreement between [Landmark] and [Toyama] for Landmark to develop [the site] ... Kirby Crennan [T]he documents [ie the architectural plans] came into existence purely to facilitate the development of the [site] by [Landmark]." Then on 20 February 2003 the architect's solicitor, Mr Barrak, wrote on behalf of Parramatta Design to the trustees' solicitors as follows: "... [Parramatta Design] was not engaged to design the development for payment and [Parramatta Design] has not been paid any moneys whatsoever for its substantial work on the approved [Development Approval]. We stress that [Parramatta Design] has not even issued an invoice for its work and does not seek payment for the plans ... Furthermore, [Parramatta Design's] preparation of the plans is conditional on [Parramatta Design] building the project ... The Development Approval does not run with the land in this instance due to established law." On 14 April 2003, Mark Rahme & Associates, solicitors, wrote to the solicitors for the trustees on behalf of Parramatta Design stating: "We again repeat that in accordance with the agreement of [Landmark and Toyama] the [development approval] plans were drafted by [Parramatta Design] to enable the two-third owner of the property, [Landmark] which shares common directors and shareholders with [Parramatta Design] to develop the land. There is no issue whatsoever of fees being payable to our client for the sole purpose of drafting the [development approval] plans. This is the reason why [Parramatta Design] has not sent any invoice to [Landmark and Toyama] for over 2 years for [Parramatta Design's] substantial work in preparing the [development approval] plans." By way of contrast, on 21 May 2003, Mr Barrak wrote on behalf of Landmark to the trustees' solicitors to the effect that Landmark wanted "the the Supreme Court dated the Orders of Trustee 12 December 2002 by exercising its Powers of Sale" and demanded that "the Trustees proceed to sell the property forthwith". to comply with As already noted, on 22 May 2003 Landmark's counsel was present when Young CJ in Equity advised that the property could be sold by reference to the development consent, albeit without giving any warranty as to the ability to use the plans and drawings. It has been necessary to consider this evidence in some detail because Mr Fares, the architect, had inconsistent attitudes to the proposed sale depending on whether he was acting as director and shareholder of Parramatta Design, or Kirby Crennan acting as a director and shareholder of Landmark, the owner and seller of a two-thirds share in the land, which had the benefit of the development consent. In his capacity as a principal of Parramatta Design, he resisted the idea that the development consent ran with the land. At the time of the proposed sale of the land, Toyama indicated to Young CJ in Equity that it had no objection to Concrete using the plans and drawings in the development consent for the purposes of building in accordance with the development consent during the currency of the development consent, whereas Landmark declined to give any such indication or undertaking. However, Landmark indicated its consent to the land being sold on the basis that the development consent had been obtained. This, coupled with the fact that this particular development consent ran with the land for five years is a sufficient circumstance from which to imply that Landmark, as one of the owners, held out to Concrete, as purchaser from trustees, that the plans and drawings used to obtain the development consent could be used by the purchaser for the purposes of building in accordance with the development consent during its currency. This is the case notwithstanding the fact that a dispute existed and no warranty could be given. It has already been explained that this is not a case of a bare licence. However, in any event, in the absence of any reservation of copyright in the plans and drawings, or any withdrawal of the development application by Parramatta Design prior to its determination, once the development consent has been granted the implied licence or consent to the owners must be irrevocable, because one of the purposes for which the plans and drawings were prepared has then been achieved. Further, an owner who sells (or does not oppose the sale of) the land, with the benefit of the development consent, must be taken to be passing on the benefit of the implied consent it holds to the purchaser, such conduct being within the ambit of the implied consent which the owners originally received from the architect as explained above. It is not necessary that the owners deliver the plans and drawings to the purchaser, as occurred in Beck v Montana110 and Blair v Osborne & Tomkins111. Further, the consent is not vitiated by the owners giving notice of a dispute about whether a consent subsists, or insisting that no warranty can be given in respect of the availability of the plans and drawings for use, as reflected in cl 7 of the contract of sale. Those circumstances merely make it more difficult to imply the consent. They do not preclude its implication which flows from a consideration 110 [1964-5] NSWR 229. Kirby Crennan of all the circumstances, including the circumstance that the development consent runs with the land for five years and can be presumed to add value to the land. In our view, the conduct of the architect, as principal of Parramatta Design (or as a principal of Landmark), in insisting that the sale take place on the basis that no warranty be given in relation to the availability of the drawings for the use of the purchaser, reflected in cl 7 of the contract of sale, does not affect the foregoing conclusion. This is because Parramatta Design's ownership of copyright in the drawings, which it was perfectly entitled to assert, only operates subject to any consent to use, reproduce or publish any copyright drawings which had already been granted, expressly or impliedly. Although those reasons do not reflect all that was said by the primary judge on the issue of the implied licence, his ultimate finding in that respect was correct and should not have been disturbed by the Full Court. There is a further point. It sometimes happens that more than one legal basis for a conclusion is available. Landmark's conduct in agreeing to the sale of the land, with the benefit of the development consent, precludes the architect from seeking to derogate from the grant of an implied licence to the purchaser by assertion of Parramatta Design's copyright in the drawings, that is the architect "having given a thing with one hand is not to take away the means of enjoying it with the other"112. That principle, derived from the law of conveyancing, had particular application where a grant was made for a special purpose113. The principle has to contexts outside been followed on many occasions and extended conveyancing114. Here the grant of the implied licence originally was to enable the owners to build substantially in accordance with the drawings in the development consent, which is precisely what Concrete wishes to do. Leaving aside entirely the question of how much a development consent adds value to the sale price of the land, there is a clear benefit to a seller in holding a development consent. There can be no doubt that a sale of land by owners, with the benefit of a development consent which runs with the land, carries the possibility that a purchaser may wish to exploit the development consent that it obtains with the 112 Birmingham, Dudley and District Banking Company v Ross (1888) 38 Ch D 295 at 313 per Bowen LJ. 113 Browne v Flower [1911] 1 Ch 219 at 225-226 per Parker J. 114 British Leyland Motor Corporation Ltd v Armstrong Patents Co Ltd [1986] AC 577 at 641 per Lord Templeman. Kirby Crennan land, rather than pursue the option, and associated costs, of applying for a fresh development consent. The architect here acting for Parramatta Design was the grantor of an implied licence in respect of copyright. Given that an implied licence or an application, by extension, of the principle of non-derogation from grant are alternatives in that context115, the finding that an implied licence exists here in favour of the purchaser makes it unnecessary to rely also on the principle of non-derogation from grant. However, the architect here, as a principal of Landmark, was also a grantor in respect of a discrete interest: the two-thirds interest in the land, sold with the benefit of the development consent. In respect of that grant it might have been submitted, although it was not, that he should not be entitled to derogate from it by resort to his ownership of copyright in the plans and drawings in the development consent. However, as it is not necessary to decide the point, it can be left to another occasion. The result of this analysis is that the Full Court erred in disturbing the orders of the primary judge in favour of Concrete. Subject to what follows, that conclusion requires that the appeal be allowed and the judgment for Concrete restored. The bias issue Before considering the application for disqualification it should be noted that there was an inherent tension in the position of Mr Fares arising out of his dual roles as architect, through Parramatta Design and as a tenant-in-common as to a two-third share of the land, through Landmark. The respondents' application for the disqualification of the primary judge was based on certain comments which he made during the opening stages of the trial and during the cross-examination of Mr Barrak. It was conceded responsibly by senior counsel appearing on the appeal that the comments made by the primary judge during the opening stages of the trial would not be sufficient without more to give rise to any apprehension of bias. The transcript indicates that his Honour thought there was "something enigmatic" about the claims made by Parramatta Design and Mr Fares. In further exchanges between his Honour and counsel, the primary judge sought to crystallise the issue as one where the second respondent, Mr Fares, the architect, denied that Concrete had a licence to use the drawings even though 115 British Leyland Motor Corporation Ltd v Armstrong Patents Co Ltd [1986] AC 577 at 639-644 per Lord Templeman. Kirby Crennan Concrete had purchased the site on the basis that the site was subject to a judge's comments were particular development consent. understandable and clearly part of dialogue between bench and bar aimed at clarifying the issues in the case. If the primary judge had formed a preliminary view that there was a tension between these aspects of the architect's evidence and case and did not express that view for comment and persuasion, Mr Fares might have had a legitimate complaint of a different kind. The primary During the course of Mr Barrak's cross-examination, the primary judge commented on the paucity of Parramatta Design's documentary records and indicated that he thought that was unusual. His Honour stated that he thought it was fair that he should indicate this concern to both parties. He then said: "It may well be that I've misunderstood something or I haven't got an appreciation of the whole of the evidence, so I'll certainly keep an open mind ..." The documents in question were put forward to evidence various expenditures made by Parramatta Design in preparing drawings for the eight unit development, including expenditures in relation to external draftspersons. Bearing in mind that contracts of service can be critical in determining questions of the ownership of any copyright in drawings116, of somebody who is not the author of those drawings, his Honour's concerns could hardly be considered unusual, even though the evidence was being led as part of the respondents' case that the payment of $27,000 made to Parramatta Design was for disbursements only, including payments to external draftspersons in respect of the eight unit development. His Honour made it clear he was keeping an open mind despite his indication of concerns. The respondents submitted that certain parts of the primary judge's reasons for judgment117 confirmed the apprehension of bias, noting that certain paragraphs were of particular concern to the Full Court118, which upheld the respondents' claims on this aspect of the case, about which more will be said later. Paragraph [21] contains a recitation of the facts. Paragraph [37] uses the epithet "commercially enigmatic" of a letter from Barrak Lawyers in which Parramatta Design claimed copyright in the relevant drawings. It was contended by the respondents' senior counsel in oral argument that this had to be read in the 116 See ss 35(2) and 35(6) of the Act. 117 [2004] FCA 1312. 118 [2004] FCA 1312 at [21], [37], [40], [52], [247] and [303]. Kirby Crennan light of the abovementioned exchange with Mr Barrak and it was submitted that this was the clearest passage confirming an apprehension of bias. The record makes it clear that the word "enigmatic" was not used in paragraph [37] in the same way as it was used in exchanges with counsel in the opening stages, and there is nothing in the exchanges with Mr Barrak which renders the usage a matter for criticism. Paragraph [40] describes events leading up to institution of the proceedings. Paragraph [52] contains a description of the stance taken by each of the parties prior to the litigation. Paragraph [247] describes the evidence which confirms the respondents' assertion that Parramatta Design had incurred expenses in respect of the drawings for the eight unit development. Paragraph [303] repeats his Honour's view that there was something "enigmatic" about the respondents' copyright claims given that the owners of the land, Landmark and Toyama, had made such a substantial capital profit from their Nelson Bay venture in such a relatively short period of time. The applicable principles The appeal involves the application of well-established principles, which were not in dispute and were both reiterated and explained in Ebner v Official Trustee in Bankruptcy119 in the joint reasons of Gleeson CJ, McHugh, Gummow and Hayne JJ: "Where, in the absence of any suggestion of actual bias, a question arises as to the independence or impartiality of a judge ..., a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide. That principle gives effect to the requirement that justice should both be done and be seen to be done, a requirement which reflects the fundamental importance of the principle that the tribunal be independent and impartial. It is convenient to refer to it as the apprehension of bias principle ... The apprehension of bias principle admits of the possibility of human frailty. Its application is as diverse as human frailty. Its application requires two steps. First, it requires the identification of what it is said might lead a judge ... to decide a case other than on its legal and factual merits. The second step is no less important. There must be an 119 (2000) 205 CLR 337 at 344-345 [6]-[8], footnotes omitted; see also Smits v Roach (2006) 80 ALJR 1309 at 1321-1322 [53] per Gleeson CJ, Heydon and Crennan JJ, 1322 [56] per Gummow and Hayne JJ, 1333-1334 [114]-[117] per Kirby J; 228 ALR 262 at 278, 278, 293-294. Kirby Crennan articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits." In assessing the logical connection between a matter complained of and any deviation from deciding a case on the merits, (the "second step" in Ebner v Official Trustee in Bankruptcy120) it is important to bear in mind the characteristics of modern litigation as recognised by Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ in Johnson v Johnson121: "Whilst the fictional observer, by reference to whom the test is formulated, is not to be assumed to have a detailed knowledge of the law, or of the character or ability of a particular judge, the reasonableness of any suggested apprehension of bias is to be considered in the context of ordinary judicial practice. The rules and conventions governing such practice are not frozen in time. They develop to take account of the exigencies of modern litigation. At the trial level, modern judges, responding to a need for more active case management, intervene in the conduct of cases to an extent that may surprise a person who came to court expecting a judge to remain, until the moment of pronouncement of judgment, as inscrutable as the Sphinx. In Vakauta v Kelly, Brennan, Deane and Gaudron JJ, referring both to trial and appellate proceedings, spoke of 'the dialogue between Bench and Bar which is so helpful in the identification of real issues and real problems in a particular case'. Judges, at trial or appellate level, who, in exchanges with counsel, express tentative views which reflect a certain tendency of mind, are not on that account alone to be taken to indicate prejudgment. Judges are not expected to wait until the end of a case before they start thinking about the issues, or to sit mute while evidence is advanced and arguments are presented. On the contrary, they will often form tentative opinions on matters in issue, and counsel are usually assisted by hearing those opinions, and being given an opportunity to deal with them." Sometimes judicial interventions and observations can exceed what is a proper and reasonable expression of tentative views. Whether that has happened is a matter of judgment taking into account all of the circumstances of the case122. However, one thing that is clear is that the expression of tentative views during 120 (2000) 205 CLR 337 at 345 [8] per Gleeson CJ, McHugh, Gummow and Hayne JJ. 121 (2000) 201 CLR 488 at 493 [13], footnotes omitted. 122 Antoun v The Queen (2006) 80 ALJR 497 at 502 [22] per Gleeson CJ, 503-504 [27]-[30] per Kirby J, 508-509 [56]-[57] per Hayne J, 517 [81] per Callinan J; 224 ALR 51 at 57, 58-59, 65, 76. Kirby Crennan the course of argument as to matters on which the parties are permitted to make full submissions does not manifest partiality or bias123. Application to this case All the comments made by the primary judge about which complaint has been made have to be considered in the context of the most striking feature of the facts of this case. The architect who claimed copyright in the drawings and purported to deny any implied consent to Concrete, the purchaser of the land with the benefit of a development consent, was also a principal of Landmark, the tenant-in-common as to a two-thirds share of the land, and had agreed to the sale of the land with the benefit of the development consent. The inherent tension in the architect's dual roles led to the architect adopting inconsistent positions in respect of the facts which his Honour was attempting to understand. Those inconsistent positions are illustrated by the evidence extracted above of the architect's conduct prior to the sale. When what was said by his Honour is seen in that proper context, and given the necessity for a contemporary trial judge to identify the issues and "to understand the evidence"124, and also given his Honour's assurances of keeping an open mind, there is nothing in his Honour's remarks taken individually, or considered cumulatively, which was capable of giving rise to a reasonable apprehension of bias. While correctly identifying the test to be applied, the Full Court, in assessing what the primary judge said in argument and in his later reasons, erred in failing to analyse, and give due weight to, the tension in the architect's dual roles and the inconsistent positions the architect adopted to the facts, at different stages of the dispute. The respondents' submissions on this aspect of the case must fail. The Full Court's finding should be set aside. Before leaving this topic it is necessary to say something more about the way in which the respondents pursued the complaint that the trial had miscarried by reason of an apprehension of bias in the primary judge. In the Full Court, the respondents sought no relief in their Notice of Appeal in respect of the allegations of apprehension of bias but made application orally in the hearing to the effect that even if all other grounds of appeal failed the orders made by the 123 Bienstein v Bienstein (2003) 195 ALR 225 at 232 [34] per McHugh, Kirby and 124 Almeida v Opportunity Equity Partners Ltd [2006] UKPC 44 at [103] per Lord Walker of Gestingthorpe (delivering the opinion of the Judicial Committee). Kirby Crennan primary judge should be set aside and a new trial ordered. In this Court the respondents again sought to rely on those allegations in the alternative. If their other submissions failed, they sought leave after the hearing to file a cross-appeal seeking an order that the matter be remitted back to the Federal Court for a retrial of the substantive action by a court free of apprehended bias. That application for leave was opposed. Allegations of this nature are serious. If made, the party making them is obliged to seek relief reflecting their seriousness. We agree generally with Callinan J's observations about the procedure followed in this case. An intermediate appellate court dealing with allegations of apprehended bias, coupled with other discrete grounds of appeal must deal with the issue of bias first. It must do this because, logically, it comes first. Actual or apprehended bias strike at the validity and acceptability of the trial and its outcome. It is for that reason that such questions should be dealt with before other, substantive, issues are decided. It should put the party making such an allegation to an election on the basis that if the allegation of apprehended bias is made out, a retrial will be ordered irrespective of possible findings on other issues. Even if a judge is found to be correct, this does not assuage the impression that there was an apprehension of bias125. Furthermore, if, as here, an intermediate appellate court finds the allegation made out, but grants no relief because it otherwise finds in favour of the party making the allegation, a defect in the administration of justice has been found to have occurred which, in the absence of any successful appeal on the point, will remain unremedied. Inevitably, this adversely affects public confidence in the administration of justice. The respondents' application for leave to file a cross-appeal should be granted. However, the cross-appeal, addressed to the bias issue, should be dismissed. Conclusion and orders The appeal should be allowed. We agree with the orders proposed by Callinan J and would also dismiss the cross-appeal with costs. 125 Antoun v The Queen (2006) 80 ALJR 497 at 499 [2] per Gleeson CJ; 224 ALR 51 Hayne 119 HAYNE J. I agree that the appeal should be allowed with costs, the cross-appeal dismissed with costs, and consequential orders made in the terms proposed by Gummow ACJ. I agree that the complaint of apprehended bias on the part of the primary judge was not made out. The copyright issues are to be resolved by the application of the relevant provisions of the Copyright Act 1968 (Cth), in particular s 15. In deciding whether the use by Concrete Pty Limited of the architectural plans and drawings was authorised by a licence binding Parramatta Design & Developments Pty Limited, as the owner of the copyright, it is essential to examine the particular contractual arrangements between Parramatta, Landmark Building Developments Pty Ltd, and Toyama Pty Ltd, to develop the site to which the plans and drawings related. The questions that arise are not to be resolved by attempting to characterise the arrangements as being between an architect and a client. (And even if that characterisation were possible, I would reserve for further consideration what, if anything, is to be said to follow from the existence of a relationship of that kind.) The arrangements between Parramatta, Landmark and Toyama were directed to completing the development, and turning the completed development to the profit of the participants in the venture. As the reasons of Callinan J show, the terms expressly agreed between participants were framed with those objectives in mind, and no express arrangements were made about what would happen if the objectives were not, or could not be, achieved. Although there was no single written document which recorded terms agreed between Parramatta, Landmark and Toyama, it would be wrong to treat the rights and obligations of one company wholly controlled by Mr Fares (Parramatta) as being wholly distinct and separate from the arrangements made by another of his companies (Landmark) with Toyama. Rather, as the reasons of the other members of the Court demonstrate, all three companies joined in the common business enterprise. Parramatta's revision of the plans and drawings, without additional fee, in order to enlarge the development, is explicable only on the basis that Parramatta prepared the amended plans as a participant in that common enterprise for the ultimate advantage of its principal (Mr Fares). Once it is recognised that all three companies – Parramatta, Landmark and Toyama – joined in a common business enterprise, it must also be recognised that the relationship between those participants was one of mutual trust and confidence. It matters not whether the participants could properly be described as partners, or whether it is only the necessarily less precise expression "joint Hayne venture"126 that can be applied to their relationship. The critical consideration is that the relationship was one of mutual trust and confidence127. The obligations of each of the participants, when the relations between them broke down, extended not only to realising, to the advantage of each of the participants, all of the assets that had been committed to the venture, but also to not impeding that realisation whether by pursuing the individual interests of one participant in conflict with the interests of others, or in some other way. As Gummow ACJ points out, for Parramatta to deny consent to the use by Concrete of the plans and drawings would be to pursue its interests in conflict with the interests of other participants. Section 15 of the Copyright Act was thus engaged. 126 United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1 at 10-11. 127 Birtchnell v Equity Trustees, Executors and Agency Co Ltd (1929) 42 CLR 384 at 407-408; McPherson, "Joint Ventures", in Finn (ed), Equity and Commercial Relationships, (1987) 19 at 26-30. Callinan CALLINAN J. This appeal raises issues of copyright, implied licence, contract, and apprehended bias in respect of a trial judge's conduct of a trial and his reasons for decision. The facts On 2 October 1998, Landmark Building Developments Pty Limited ("Landmark") and Toyama Pty Limited ("Toyama") bought land at Nelson Bay in New South Wales for $560,000 upon which they intended to construct and sell home units. The land was bought in furtherance of an oral joint venture agreement. Landmark held an interest of two thirds and Toyama of one third in the land. Landmark held its interest on behalf of Mr Fares, an architect, and Mr Benjamin Barrak, a solicitor, while Toyama held its one-third interest for Ms Jeanette Haviland, also a solicitor, and Mr Kevin Rix. All dealings on behalf of, and between the joint venturers were conducted by the natural persons for whose ultimate benefit the land was bought and was to be developed and sold. Mr Fares at all material times also spoke for and on behalf of the first respondent, Parramatta Design & Developments Pty Ltd ("Parramatta"). The joint venturers contracted with Mr Fares and as the principal of Parramatta, an architectural company which also held a builder's licence, to prepare such architectural plans as might be necessary to obtain development approval from the relevant planning authority, the Port Stephens Council ("the Council"). The development first contemplated was of eight home units. The parties expressly agreed that the fees for the plans should be $27,000. Payment of that sum was made, and development approval granted by the Council in September 1999. In the meantime, the owner of an adjoining parcel of land made an application to build 16 home units on it. That application, despite the joint venturers' objection to it, was successful. Their neighbour's successful application prompted Mr Fares to propose to the other joint venturers that they now seek development approval for a more intense development, of 14 home units. Toyama had initially been opposed to the larger development. According to Ms Haviland, Toyama relented however when it was agreed that Mr Fares' fees be confined to the sum of $27,000 already paid. The enlarged proposal was the subject of a conference on the telephone between Ms Haviland, Mr Barrak and Mr Fares on 8 October 1999: "MR BARRAK: We've found out that those idiots next door have sneaked through an approval for 16 units. We will have to get together to talk about it. We should reapply for more. Callinan MS HAVILAND: Kevin and I just want to go with what we have; we have already invested a lot of money and time and we don't want to start all over again. MR FARES: Yes, but we can get 14 units. 14's better than 8. I don't want any more money for doing the plans, but we will all just have to pay for fresh engineering plans and so on. MS HAVILAND: Well if you are satisfied to accept the $27,000.00 you have already been paid and all we [Toyama] have to pay is our share of the fresh engineering plans etc I suppose we should try for 14 units." Fresh plans for a building to contain 14 home units were drawn and lodged for approval with the Council on 20 January 2000. Development consent for this proposal was granted on 10 May 2000. Relations between the joint venturers began to deteriorate in July 2000. On 12 December 2002, trustees for sale of the land were appointed by the Supreme Court of New South Wales under s 66G of the Conveyancing Act 1919 (NSW). The approval of a building to contain 14 home units came to have particular but temporary utility, because, unless substantial development of the land was undertaken by May 2005, development of it would again probably be restricted to a building of eight units only. That this was so was apparently known to the appellant before it bought the land. On 7 August 2003, the appellant purchased the land for $2,760,000. The contract of sale contained these terms: "7.2 The vendors are unable to provide copies of the plans and designs which accompanied the First and Second Development Consents. The vendors disclose that a dispute exists in relation to the right to use the plans and designs which accompanied the Development Applications, including as to the existence of any licence to make use of the copyright in those plans and designs. The vendors further disclose that legal action has been foreshadowed in respect of any future use of those plans and designs. The vendors give no warranty as to the availability or the right to use the plans and designs which accompanied the First and Second Development Consents." These terms were included because the trustees for sale had sought and obtained the advice of the Supreme Court (Young CJ in Eq), pursuant to s 63(1) Callinan of the Trustee Act 1925 (NSW). The advice, given on 22 May 2003128, was as follows: "On the motion by the trustee, I advise the trustee by order under s 63 of the Trustee Act that they would be justified in selling the property, 5 Laman Street, Nelsons Bay, as expeditiously as circumstances allow, on the basis that the contract of sale would disclose the existence of the development approval issued by the local council but specifically giving no warranty as to the availability of or ability to use the plans in relation to that development approval." Following the sale of the land to the appellant, the respondents asserted copyright in the plans for the development of 14 home units, after refusing the appellant's request for permission to use them for, according to the Full Court of the Federal Court, a reasonable sum which it also described as a "modest sum"129. There was no question, nor could there be, as Kirby and Crennan JJ point out, that an architect, subject of course to agreement otherwise, owns the copyright in plans and drawings made by him or her. The evidence, including some of the expert architectural evidence here, did not disclose the extent to which, or even whether, the drafter of the plans for the larger development would have derived any advantage, or saving in time and expense, by reason of having already prepared plans for a development of eight units on the land. The appellant began proceedings in the Federal Court of Australia, under s 202 of the Copyright Act 1968 (Cth), seeking a declaration that the assertion of copyright was unjustified, and consequential relief. Section 202(1) of the Copyright Act is as follows: "Where a person, by means of circulars, advertisements or otherwise, threatens a person with an action or proceeding in respect of an infringement of copyright, then, whether the person making the threats is or is not the owner of the copyright or an exclusive licensee, a person aggrieved may bring an action against the first-mentioned person and may obtain a declaration to the effect that the threats are unjustifiable, and an injunction against the continuance of the threats, and may recover such damages (if any) as he or she has sustained, unless the first-mentioned person satisfies the court that the acts in respect of which the action or 128 Reproduced in the judgment of Conti J: Concrete Pty Ltd v Parramatta Design and Developments Pty Ltd [2004] FCA 1312 at [20]. 129 Parramatta Design & Developments Pty Ltd v Concrete Pty Ltd (2005) 144 FCR Callinan proceeding was threatened constituted, or, if done, would constitute, an infringement of copyright." Parramatta cross-claimed to allege infringement of copyright in the plans for the development of 14 apartments. Another issue which occupied much of the time of the hearing was the respondents' entitlement, if any, to design and build the proposed building for a payment to be calculated by reference to its cost. The other issues which were litigated appear from the orders which the Federal Court (Conti J) made. The trial judge made the declaration sought and other orders in these terms130: "THE COURT DECLARES THAT: The respondents' threats, or either of them (as contained in the letters dated 9 September and 1 October 2003 from Barrak Lawyers and further defined in the Statement of Claim), are unjustifiable within the meaning of s 202 of the Copyright Act 1968 (Cth). THE COURT ORDERS THAT: Each of the respondents by itself, himself and its or his servants or agents be restrained from making any further threat in the form substantially of the respondents' threats. There be an enquiry into the quantum of damages sustained by the applicant by reason of the respondents' threats. The amended cross-claim of the cross-claimant be dismissed. The costs of the proceedings to date be reserved pending: the receipt of written submissions of the applicant/cross- respondent on the issue of costs, and against whom such orders should be made, within three working days; and the receipt of written submissions of the respondents/cross- claimant in reply, on the issue of costs, and against whom such orders should be made, within three working days thereafter. 130 Concrete Pty Ltd v Parramatta Design and Developments Pty Ltd [2004] FCA Callinan Liberty to apply as to the making of orders as to costs, including as to default in complying with directions as to costs." The declaration and orders were unanimously overturned by the Full Court of the Federal Court (Branson, Kiefel and Finkelstein JJ)131. The Full Court held, in addition to its finding that there was no implied licence, that the trial before the Federal Court had miscarried in any event, on the ground of apprehended bias on the part of his Honour132. The trial It is necessary therefore to refer to the course of the trial. Before any oral evidence was given, but no doubt after the trial judge had read the affidavits and other evidence filed by the parties, his Honour raised some matters with the respondents' counsel: "HIS HONOUR: Doubtless the purchase price which Mr Rayment's client paid for this land was geared or related to the development consent that had been granted and the development consent related to certain plans. ... Does anything arise in the present context and the issues which have evolved between the parties as to the significance of – or apparent significance – of a relationship between certain of the corporators of Parramatta Design and Developments and the corporators of the – or one, at least one of the joint venture companies which was a registered proprietor at the time there was a sale of the land with the trustees for sale? Does anything turn on that? MR MURR: I'm sorry. I would have to ask your Honour to be more specific. HIS HONOUR: Well, as I understand it, Mr Fares was a corporator, involved as one of the corporators of Parramatta Design. ... The exact nature of his corporate interest, of course, is not before me but does anything turn on the circumstance that, as it were, he was a vendor – well, not a vendor. In the end he wasn't a vendor 131 Parramatta Design & Developments Pty Ltd v Concrete Pty Ltd (2005) 144 FCR 132 Parramatta Design & Developments Pty Ltd v Concrete Pty Ltd (2005) 144 FCR Callinan but he was one of the, as it were, he shared in the beneficial proceeds. He was a beneficial owner of the proceeds of the sale by the trustees for sale, being a sale which implicitly involved the quantification of the purchase price by reference to the value of the land and the value of the land in turn was geared to any existing consent. Does anything turn on that? ... Except that there is just this overriding troublesome element in the complex circumstances in this case, that is that the copyrighter has profited from the sale of the land by virtue of the fact that he prepared plans which were used to obtain a development consent and presumably the purchase price was geared to the existence of that development consent, it would be amazing if it was not. It would be an inference one would normally draw unless there was some strong evidence to the contrary, so that there is a – I am not saying that it falls with the equitable doctrine of clean hands but there is something of considerable concern as having profited indirectly by the sale of the land, the copyrighter then says: 'well, I've got the money in my pocket now. Bad luck, he can't use those plans.' Now is that a distorted way of looking at the facts of the case? ... These parties were in the nature – pardon me to interrupt for just a moment, but these parties were in the nature of joint ventures were they – the predecessors in title – one was making the contribution of design, etcetera, etcetera and one was probably making some other form of contribution, I don't know, but there was a joint venture was there in place? ... All right, that has given me a useful background, thank you. I think that, probably the best course for Mr Rayment, is if I read, continue the process of Mr Murr reading his affidavits and I presume there will be some cross-examination of the opponents. Yes." The trial judge made these interventions during the cross-examination of "HIS HONOUR: You can't, as it were, boot strap a case by virtue of informal entries in unaudited pieces of paper and endeavour to show that somehow or other you are entitled to cause this applicant, Concrete Pty Limited, who has bought in good faith from trustees for sale, cause it to be frustrated for its utility of land which it has purchased and the proceeds of which were received by Landmark and Toyama and you are doing this on pieces of paper. MR BARRAK: Your Honour has raised quite important points. Callinan HIS HONOUR: They are obvious, aren't they? MR BARRAK: They are very significant points, your Honour, and if I may state that this record is simply my record. HIS HONOUR: Well, yes, but you were the solicitor on the record until about two weeks or a week ago and you were involved in the preparation of the affidavits, I would have thought having been in the profession for 40 years it was axiomatic to your case to have exhibited to your affidavits the statutory records at least plus the full cheque butts to demonstrate the authenticity of the financial circumstances of and Developments Pty Limited. I mean the records are virtually, so far as they have been put before me, non-existent. I can't draw any inferences. company Parramatta Design this MR BARRAK: I'm not the accountant for Parramatta Design and Developments. This is simply my record that I give to the accountant to prepare the taxation return. To say that the records don't exist is, with all due respect, your Honour – HIS HONOUR: They are not in evidence. I don't know whether they exist or not but for some reason you have chosen, in the time you were a solicitor on the record, not to adduce that material into evidence. I just think I should tell you what is in my mind, because at the moment I find the whole of this evidence that's been put on on behalf of the respondents as extraordinary – MR BARRAK: Your Honour – HIS HONOUR: – and I've been in commercial law all my life. I haven't seen anything like it in 30 or 40 years' practice. MR BARRAK: Your Honour, this payment that you refer to relates to plans which are not the subject of these proceedings. HIS HONOUR: I'm talking about records at the moment. MR BARRAK: But this is why it's not included in documents which I've drafted when I was a solicitor on the record. These proceedings relate to a development of 14 units. This payment has no relevance to the 14 units. This is why it's not – HIS HONOUR: I've heard that particular evidence and I think I should say no more and I'll leave it to Mr Rayment and Mr Murr to continue, but I think it's only fairness to both parties I should tell you what is in my mind. It may well be that I've misunderstood Callinan the dispute, something or I haven't yet got an appreciation of the whole of the evidence, so I'll certainly keep an open mind but I just think you should know I've got very great concern about the circumstances on the basis of the material that I've thus far read, that this party who stands beyond this syndicate dispute between Landmark etcetera on the one hand, or your company and/or Mr Fares' company on the one hand and Ms Haviland and Mr Rix's company on the other. I just don't understand how legitimately, leaving aside questions of morality and ethics, I just don't understand how legitimately Concrete Pty Ltd has been drawn into this dispute which is basically a dispute between joint venturers, or that's certainly its genesis. MR RAYMENT[133]: I just wanted to – HIS HONOUR: Anyway, I think I should tell you what is in my mind because, as I say, I'm keeping an open mind because I've got, if I may say so, a lot of time for the advocacy of your counsel, as well as counsel of course for Concrete Pty Ltd, and I don't want anyone to think that I've foreclosed in any way my decision, but I've been sitting here for two days and struggling with trying to perceive or identify some kind of ordinary, business management involved in the financial affairs of Parramatta Design & Developments Pty Ltd, Landmark Building Developments Pty Ltd, those two companies. I'm struggling to find that there's any authentic, documentary material, which is at the heart of corporate governance. MR BARRAK: Your Honour, I wish to say on the record that as far as Landmark is concerned, that's not to say that the records don't exist. They're simply not – in my submission when I was a solicitor on the record, they're not relevant to these proceedings. HIS HONOUR: I'm sure Mr Murr will address me on that." There was also this exchange, between the trial judge and counsel for the respondents at the time: "HIS HONOUR: But I mean, it's as obvious as night follows day, that if you're an owner of property, particularly an owner who's bought it for the purpose of development, and the basis of a development approval that attached to these plans, that you're inherently aggrieved. 133 Counsel for the appellant. Callinan MR DONOVAN: No, no, because we don't know what Concrete proposes to do. HIS HONOUR: So we've – well, they're either going to – well, at any rate, look, I'll say no more, but you really are – I hope you've got some better submissions than that one." Junior counsel for the respondents took the view that the trial judge was, by the second day of the hearing, manifesting apparent bias. Counsel who led him did not. This may explain why subsequently another senior counsel was briefed to make an application that his Honour disqualify himself. In this Court, the respondents submitted that the remarks that I have quoted formed part of a pattern of apparent bias which came to infect the whole of his Honour's judgment. They pointed to this passage in it134: "It will thus be seen that the amount of $27,000.00 charged by PDD related to the eight home unit development alone, the approval to which, as I have earlier indicated, was granted by Port Stephens Council in about March 1999. More will be later discussed in these reasons concerning that controversial payment. Incidentally, the PDD income tax return for the fiscal year ended 30 June 1999 disclosed total income of $153,275 and total expenses of $154,211, thus reflecting a net loss of $936. Included in the expenses were subscription fees of $1,025 paid to the Board of Architects, and also 'payments to Associated Person GF', thereby referring to Mr Fares. PDD sustained a similar small deficit for the preceding fiscal year ended 30 June 1998 of $1,589.57. Those financial results could not be described as reflective of a thriving or substantial architectural practice then being conducted by Mr Fares, for what that might ultimately matter." (original emphasis) Attention was also drawn to this passage135: litigation could have occurred "I conclude by observing the underlying reasons for this litigation are mystifying. It is somewhat enigmatic that such expensive and in circumstances where protracted Landmark and Toyama made such a substantial capital profit from their Nelson Bay venture in such a relatively short period of time, and why the persons respectively standing behind those companies have become locked into expensive litigation in this Court and (shortly) in the Supreme Court, and why Concrete as a third party has become embroiled in such 134 [2004] FCA 1312 at [247]. 135 [2004] FCA 1312 at [303]. Callinan extraordinary litigation in the first place. Perhaps there is more to the circumstance of this litigation than 'meets the eye', but whatever the case may be, the Court has not been spared the task of a ten day hearing and of subsequent consideration of hundreds of pages of written submissions, and in the case of the respondents PDD and Mr Fares, containing a considerable body of material having no or no sufficient bearing upon the critical issues falling for resolution." In reaching his decision, his Honour reviewed the evidence, the authorities, and the extensive submissions of the parties. He summarized his opinion in this way136: "It reasonably follows that in the present circumstances, where the architect (PDD and/or Mr Fares) has prepared plans and drawings for the purpose of landowners (Landmark and Toyama) obtaining development consent in respect of their jointly owned land, and since that consent runs with the land in accordance with the principles enunciated in those local government authorities, the architect has implicitly licensed any entity (here of course Concrete) who thereafter comes to own that land, that is of course any immediate or ultimate successor in title, during the currency of the development consent, that is until 10 May 2005, to use those plans and drawings for the purpose of implementing the basis, terms and scope of that earlier consent. To hold otherwise would sterilise the land in terms of its usage, in conformity with that development consent, in the hands of successors in title, notwithstanding that the development consent would remain otherwise in force and effect vis-à-vis the original grantee of that consent for the requisite statutory or regulatory period of time. As I have earlier recounted, Concrete submitted, in my opinion correctly, that the requisite term may be implied in the contractual engagement of an architect, in the context for instance presently postulated, in at least three alternative ways: as a legal incident of the engagement, whether expressly or by implication (see my earlier review of Liverpool City Council[137], Codelfa Construction[138], Australis Media Holdings[139], Simonius Visher[140] and Byrne[141]); 136 [2004] FCA 1312 at [133]-[136] and [141]. 137 Liverpool City Council v Irwin [1977] AC 239. 138 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337. Callinan (iii) by reference to the circumstances and terms of a particular contract, and the need for business efficacy in relation thereto, even if there was no identifiable purpose in particular comprised or involved in the use of the copyright material by others (see my earlier citation from Acohs[142]); and in the event of a sale of property by the owner who commissioned the preparation of the architectural plans and drawings for that site, separately from any contractual arrangement previously entered into between the architect and commissioning owner (Blair[143]). This third alternate way by which an implied licence or permission arises in favour of a purchaser, during the currency of a development consent, would extend the dictum in Blair and Acohs but, in my opinion, would do so in a logical and coherent way. In that regard, I refer to Lord Denning's reference in Blair[144] to '... the people to whom they sold the plot, and by the surveyors and workmen of the purchasers ...', and to Merkel J's reference in Acohs[145] to '... those other persons [subsequent to the person who commissioned the copyright material] to carry out that purpose ... within the licence implied by law ...'. It should be observed moreover, that PDD and/or Mr Fares do not allege, nor could they on Concrete's submissions allege, that they expressly reserved copyright or prohibited the assignment or licensing of copyright in the relevant plans and drawings, whether at the time of their engagement or prior to or at the time plans were submitted to Port Stephens Council. The question of whether an architect is deemed to have impliedly licensed a future owner of land, during the subsistence or continuation in operation of a development consent, despite any express reservation or prohibition, so as to give effect to the operation of the EPA Act and Regulations, does not stand to be determined on the facts prevailing in this litigation. I express 139 Australis Media Holdings Pty Ltd v Telstra Corporation Ltd (1998) 43 NSWLR 140 Simonius Vischer & Co v Holt & Thompson [1979] 2 NSWLR 322. 141 Byrne v Australian Airlines Ltd (1995) 185 CLR 410. 142 Acohs Pty Ltd v R A Bashford Consulting Pty Ltd (1997) 144 ALR 528. 143 Blair v Osborne & Tomkins [1971] 2 QB 78. 144 [1971] 2 QB 78 at 85. 145 (1997) 144 ALR 528 at 547. Callinan no opinion as to the operation of any such latter proposition, other than that the law of copyright, and licensing in respect thereof, should not be seen to so subsume local government and planning law as to leave a purchaser for full value at arms length in the position of being unable to use the copyright in plans which form part of the operation of a development consent running with the land. In my opinion Concrete's first proposition is as correctly based in principle as it is meritorious generally, and should be upheld as soundly conceived. It accords with general principles of copyright in all relevant respects, and incidentally, contrary to the submissions of the respondents for reasons which I have found difficulty in terms of viability, is not vitiated or weakened by any principle emerging from Torpey[146]. For what it might matter, in this context, any claim for fees by an architect would in principle be recoverable by the architect from the principal or other client who originally retained the architect (see Ng[147] and Gruzman[148]). ... In those circumstances it inevitably follows, as a matter of mutually implied contractual intention and expectation, equally in the case of each of the co-owners, that the purchaser from the trustees for sale for value would have an implied entitlement of copyright. The circumstance that one of the two co-owners (Landmark) prevailed upon the trustees for sale to withhold from any promise or assurance of copyright in favour of any prospective purchaser is not to my mind to be in point. The special conditions of the Contract for Sale did not of course eschew the existence of copyright, but in summary withheld from making any warranty or undertaking in respect thereof. The terms of an implied licence of copyright falls to be determined by and incorporated into the relationship the subject of the architect's retainer as at the time of the retainer, explicitly and/or implicitly." The other issue of substance, the respondents' claim in respect of the alleged contract to design and construct the building, was also resolved against them149. 146 Torpey Vander Have Pty Ltd v Mass Constructions (2002) 55 IPR 542. 147 Ng v Clyde Securities [1976] 1 NSWLR 443. 148 Gruzman Pty Ltd v Percy Marks Pty Ltd (1989) 16 IPR 87. 149 [2004] FCA 1312 at [161]. Callinan In the section of his Honour's judgment rejecting the respondents' claim that the joint venturers had agreed to engage Parramatta to design and construct the apartments, he necessarily made findings respecting the arrangements made between the other joint venturers and Mr Fares. In doing so, he also rejected the evidence given by Mr Fares of the various conversations between him and the other joint venturers concerning the arrangements between them. His Honour, after reviewing the evidence of the conversations, concluded150: relation findings "In all essentially or important aspects of her evidence, particularly under cross-examination, my perceptions and Ms Haviland were those of a truthful and essentially reliable witness. Whilst she betrayed a measure of emotion at times under cross- examination, being an emotion dominated by intense resentment as well as anguish by reason of her involvement in these proceedings at the request of Concrete, especially in the context of having been subjected at material times to illness and prolonged hospitalisation, I was left in no doubt as to her essential integrity as a witness. I make those findings albeit that she is facing the trauma of Supreme Court proceedings pending against her at the instance of Messrs Fares and Barrak or any corporate interests of those person[s]." In his summary of it, his Honour quoted some evidence that had been given by Mr Kevin Rix of statements made to him by Mr Fares151: "I don't want any more money for the Plans, but we will have to pay for fresh engineers and hydraulic plans. I am sorry we have wasted so much money on the plans and things, but if we get the 14 units, it will be well worth the extra expense." A little later his Honour said this of Mr Rix152: "I have no hesitation in accepting the thrust and essence of Mr Rix's evidentiary account of both events and themes of conversations in issue. Obviously enough, in the absence of contemporaneous notes and records, it would be impossible for Mr Rix to have recalled the precise words used in the dialogue which he has purported to record. He struck me as a straightforward and intelligent witness with a reasonably reliable recall of events. The conversational material attributed to Mr Rix by 150 [2004] FCA 1312 at [182]. 151 [2004] FCA 1312 at [188]. 152 [2004] FCA 1312 at [203]. Callinan Messrs Fares and Barrak was in at least all important or material respects as fanciful as it was unlikely." His Honour was persuaded that Mr David Rix's evidence also should be preferred to the evidence of the respondents. His Honour should be taken therefore to have accepted that it was Mr Fares on his own behalf and on behalf of Parramatta who initiated the enlarged proposal and that he did so with an assurance that the requisite plans, apart from engineering plans, would be prepared and lodged for the benefit of the joint venturers without any charge to the joint venture. The Full Court The Full Court overturned the findings of the primary judge of an implied licence. Its reasoning appears from the following paragraphs153: interest), "These are the general principles. Now we must apply those principles here. It was earlier said that we know very little about the terms of the contract between Parramatta Design and the joint venture partners. Perhaps there is little to know. Parramatta Design certainly agreed to prepare the drawings and to do so for no fee. Mr Fares, its director, wanted to keep Toyama in the venture. While its agreement to stay in the venture might be sufficient consideration to support the contract, the agreement could not be characterised as the payment of a full fee for Parramatta Design's services. Moreover, the only reason why Parramatta Design agreed to prepare the drawings for no charge was to keep the joint venture going (a venture in which Mr Fares had a significant, albeit indirect, the 14-unit to obtain planning approval development, and then to see it constructed by the joint venture partners. It may be accepted that in those circumstances Parramatta Design granted a licence to the joint venture partners themselves to construct a building in accordance with the drawings if planning approval were obtained. But we see no reason to imply a term that this licence could be assigned by the partners to, say, a purchaser of the Nelson Bay site. Why should it be presumed that Parramatta Design would agree to such an assignment bearing in mind that it was not going to be paid for its work? Such a result might prove unfair, unjust and is, in any event, unnecessary. Architects should not be expected to work for free for the benefit of third parties. The position does not change merely because the architect has an interest in the proceeds of sale of the land. Equally, if it be relevant, a sensible purchaser would not expect to be permitted to use an architectural for 153 (2005) 144 FCR 264 at 271-273 [20]-[23]. Callinan drawing without having made any payment for the privilege either to the architect or to the vendor by way of reimbursement. A later offer to pay a reasonable fee, as was made here, cannot retrospectively alter the contract. Even if, contrary to our view, an assignable licence to reproduce the drawings was conferred upon the joint venture partners, that licence was not in fact transferred to Concrete. The judge thought otherwise. He said that the trustees for sale appointed under the Conveyancing Act stood 'in the shoes' of the co-owners and he accepted a submission from Concrete that 'the relevant factual and regulatory matrix strongly support the notion that the licence [has been] impliedly transferred with the land for the benefit of the purchaser'. With the greatest respect we do not accept this conclusion. There are at least two reasons why the judge's approach is in error. The most obvious is that the so-called 'implied term' is inconsistent with the tenor of cl 7 of the contract of sale. The principles upon which terms will be implied do not admit of an implication which is inconsistent with an express term: FA Tamplin Steamship Co Ltd v Anglo- Mexican Petroleum Products Co Ltd154; Equitable Life Assurance Society v Hyman155. There is in any event a more fundamental problem. Trustees for sale can only dispose of property which has been vested in them. According to the Conveyancing Act that property may be real or personal: see s 66G and the definition of 'property' in s 7. In this case the order of the Supreme Court only vested in the trustees the Nelson Bay land. The order could have but did not purport to vest in them any personal property, such as a licence to use the drawings. Therefore to hold that the transfer of the land by implication transferred a licence to use the drawings, if such licence existed, is to ignore the terms of the order. To this juncture we have only disposed of the alternative basis (the existence of an implied term) upon which the judge decided the case. Our reasons for rejecting the judge's approach come close to disposing of the principal basis for his decision. But it is best that we explain more directly why on that ground the judge also erred. Remember that the judge decided that an architect who prepares drawings for a development approval implicitly gives permission to any person who becomes the owner of the land to which the approval relates to reproduce the drawings so that the subject matter of the drawings (eg a building) may be built. That permission, as it is framed by the judge, is, so it seems, given to the world at large. It is a permission which exists independently of the terms upon which the client engages the architect. It is a permission which, at least as the judge sees it, does not depend upon the consent of the client on 154 [1916] 2 AC 397 at 422. Callinan whose instructions the drawings are prepared and who pays the architect for his (or her) services. It is a permission which would significantly detract from the rights of an owner of copyright in an architectural drawing: Copyright Act, s 13(2). It is difficult to know precisely how the judge was able to reach the conclusion that, in the circumstances he described, an architect implicitly licenses any entity who comes to own the land to use the plans. So far as we are able to tell his view seems to be based solely on the premise that the land would otherwise be sterilised 'in terms of its usage, in conformity with the development consent'. That premise is false. Land is not 'sterilised' in terms of usage (whatever that may mean) simply because a purchaser cannot, without the agreement of the architect, use the architect's plans to develop the land. The land will have an exchange value. Subject to local planning requirements it may be used for private, commercial or public purposes. So, provided the purchaser paid a fair price for the land (and whether he did or not is a matter for the purchaser) it suffers no loss by not being able to use the drawings. Looked at more broadly, there is simply no basis upon which to found a licence to use an architect's drawings in favour of a purchaser which has neither paid for those drawings nor altered its position in the belief, induced by the architect, that the drawings would be available for its use. Even if, by some new doctrine, there were such a licence, in the absence of any consideration or preclusion, it would be revokable at will." The Full Court's reasons for upholding the appeal on the ground of apprehended bias appear from these paragraphs156: "After anxious consideration we have reluctantly formed the view that the ground of appeal which alleges that the trial miscarried on the ground of apprehended bias succeeds. We stress that it has not been suggested, and we do not find, that his Honour was actually biased. We do not think it necessary to canvass in detail every complaint upon which reliance was made; what is important is the cumulative weight of the material that the appellants rely upon. We record, however, that we have placed particular weight on the substantial intervention made by the judge, during the course of the cross-examination of Mr Barrak, a witness for the appellants, which is recorded between pp 331-335 of Vol 1 of the appellants' Supplementary Appeal Book. We have also placed particular weight on comments made by the judge at pp 153-158 of the appellants' Supplementary Appeal Book and in [21], [37], [40], [52], [247] and [303] of the reasons for judgment. 156 (2005) 144 FCR 264 at 277 [41] and 278 [46]. Callinan A fair-minded lay observer who was aware of the observations made by his Honour during the course of the cross-examination of Mr Barrak and then saw them reflected in his Honour's reasons for judgment which were published some time later, might well, in our view, apprehend that his Honour had allowed his views to prejudice his approach to the case advanced by Parramatta Design. He or she might feel that support for that apprehension could be derived from the apparently gratuitous reflection in [247] of the reasons for judgment, at which it is not necessary to set out here, on the level of income apparently being generated by Mr Fares from his architectural practice through Parramatta Design." (The passages referred to by the Full Court are substantially those that I have quoted in discussing the course of the trial.) The appeal to this Court The joint venturers' agreement In seeking to identify and define the terms of the agreement for the joint venture, the Full Court immediately posed for itself the question whether there was, as the trial judge had found, a term implied by law in the relevant contractual relationship that the joint venturers and their successors in title were licensed to use the plans for the development approval of the larger development. Almost all of the ensuing discussion on this topic was of the authorities relevant to the implication of contractual terms "implied", as the Court said, "in fact" and, by contrast, by law. Their Honours then turned their attention to other cases157 of contracts with architects involving quite different factual situations. As to the actual terms, as opposed to any implied terms, of the contract here, they made this observation158: "Perhaps there is little to know." Next, they answered the following question in the negative159: 157 Meikle v Maufe [1941] 3 All ER 144; Beck v Montana Constructions Pty Ltd [1964-5] NSWR 229; Stovin-Bradford v Volpoint Properties Ltd [1971] Ch 1007; Blair v Osborne & Tomkins [1971] 2 QB 78; NG v Clyde Securities Ltd [1976] 1 NSWLR 443; Liverpool City Council v Irwin [1977] AC 239; Devefi Pty Ltd v Mateffy Pearl Nagy Pty Ltd (1993) 113 ALR 225; Acohs Pty Ltd v RA Bashford Consulting Pty Ltd (1997) 144 ALR 528. 158 (2005) 144 FCR 264 at 271 [20]. 159 (2005) 144 FCR 264 at 271 [20]. Callinan "Why should it be presumed that Parramatta Design would agree to such an assignment [to a successor in title, of a licence to use the plans in favour of the joint venturers] bearing in mind that it was not going to be paid for its work?" This approach, of immediately focussing upon the necessity or otherwise of implying a term, distracted the Full Court from an examination of the agreements actually made or varied by the joint venturers from time to time, which had been the subject of explicit findings, based heavily on credibility, by the trial judge, and which I have earlier set out. There were effectively three agreements, or two, and a variation of them: the agreement for the joint venture; the uncontroversial agreement for the architectural and related work between the joint venturers and the respondents for the obtaining of a development approval for eight home units; and the agreement for the preparation of the plans for the obtaining of approval for a development of 14 home units on the land, which might also, perhaps, be characterized as a variation of the joint venture agreement. Those agreements were, as I have already pointed out, made by the natural persons who spoke for the companies concerned. No one has suggested that Mr Fares did not speak for both the joint venturer, which held his interest in the land on his behalf, and indeed necessarily for Parramatta as the principal of it. It is a well settled rule of construction of contracts that each party owes to the other a duty to co-operate in the doing of acts which are necessary to the performance by the parties, or any of them, of the contract160. A corollary of that rule is that a party will not obstruct the performance of the contract. Not only should such a term be implied in the agreement for the joint venture here, but also regard should be had to the fiduciary relationship existing between joint venturers, giving rise to mutual rights and obligations161. Those matters do not mean that the respondents should, on account of them alone, necessarily forego any entitlement to, or intellectual property that they might possess in, the plans. But, as will appear, they are of considerable relevance to the resolution of the case. There is another term which is discernible from the nature of the primary agreement, the agreement for the joint venture itself. It is that the purpose of the agreement was to maximize the financial return of all parties to it. Again, that does not of itself exclude any entitlement that the respondents might have to charge for, and recover, professional fees properly payable. But it does throw 160 Secure Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596. 161 See United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1 at 11- Callinan light upon the intentions to be imputed to the parties, in the event, apparently unforeseen at the time of the making of the joint venture agreement, of its breakdown. At that point, both terms, of co-operation and non-obstruction, and of the application of joint and several effort to maximize the financial return, and the underlying fiduciary obligations came into play, subject of course to any other agreement in favour of one or more of the parties. Not only for the purposes of identifying the contract into which the parties have entered, but also in order to resolve uncertainties and ambiguities about their intentions and the meanings to be given to words and phrases constituting the contract, a court may have regard to relevant surrounding circumstances known to the parties at the time that they made their agreement162. What were the relevant surrounding circumstances known to the parties? They included these. A development application and approval were, and are, entirely site-specific. They can have no utility, or indeed value or even relevance to any other site. Plans for them are likely to be conceptual rather than detailed163. The respondents' case acknowledges this to be so by contending, unsuccessfully, that Parramatta had been engaged by the other joint venturers to design and construct the building. There may also be, as there was here, a temporal limitation upon the utilization of the approval. Furthermore, it was not contested that the development approval here ran with the land. The significance in combination of the matters to which I have referred appears to have been overlooked by the Full Court but not by the trial judge. For example, and it is an example only of several such observations by him, his Honour said this164: "Furthermore in circumstances where the architect is one of two or more joint venturers, directly or indirectly, involved as a principal in the purchase and subsequent exploitation of realty for mutual profit, as well as the design of improvements thereto in aid of such exploitation, it would be foreign as well as enigmatic to the implicit mutual intention and objective of the joint venturers that the architect would be entitled implicitly to 162 cf Codelfa Construction Pty Limited v State Rail Authority of NSW (1982) 149 CLR 337 at 347-352 per Mason J. 163 See s 81A of the Environmental Planning and Assessment Act 1979 (NSW) as to the effect of a development consent and ss 109C-109G which prescribe some of the matters relevant to the construction and certification for use and occupation of a building. 164 [2004] FCA 1312 at [146]. Callinan defeat or seriously prejudice fulfilment of the commercial objectives of the joint venture by denying to a co-venturer the capacity to effect or enjoy, to the best financial advantage of the co-venturers as a whole, the realisation of the joint venture property. The fact that at the time PDD and/or Mr Fares prepared the plans and drawings for the subject fourteen home unit development, PDD and/or Mr Fares did so indirectly as a one third syndicate member beneficially in relation to the project (albeit indirectly, as one of two equal corporators of Landmark), can have no relevant bearing in favour of the case propounded by PDD and/or Mr Fares. The asset or principal asset the subject of the joint venture and co-ownership arrangements, as in the case of syndicated project arrangements generally, is inherently subject to the normal incident of human business associations, namely that they might subsequently break down, thereby involving the usual consequence of the mutual need and corresponding obligation to maximise the proceeds of realisation of the joint venture or syndicated property the subject of co-ownership, for the benefit of all persons entitled thereto, directly or indirectly. The reasonably implicit mutual intention to be attributed to the persons thus financially involved, directly or indirectly, in the subject syndicate, namely Mr Fares himself, Mr Barrak, Ms Haviland and Mr Rix (and their respective corporations Landmark and Toyama), was that such property should be allowed to realise the maximum price reasonably obtainable for the mutual benefit of all syndicated members, both directly and indirectly. The proceeds of any such realisation would be mutually expected to be enhanced by the operation, upon the circumstances of this case, that a development consent runs with the land. Once those principles are recognised, as I think they must, there can be no sensible room for the architect involved, indirectly as a principal party to a joint venture, to sabotage the maximisation of the earnings of the joint venture by seeking to obviate the realisation of those earnings, as indeed PDD and Mr Fares, in combination with Mr Barrak, have sought to do to the detriment of Toyama and its corporators Ms Haviland and Mr Rix. As Concrete submitted, any such attempt by one, or more than one joint venturer would be equivalent to the committal of fraud upon the other or remaining joint venturer." (original emphasis) Before explaining the bearing that these matters have upon the appeal, there is another however to which reference should be made. The respondents were correct in submitting that there was no proper basis for the finding by the primary judge that the increase in value of the property from $560,000 to $2,760,000 was (all) inferentially attributable to the grant of the development approval by the Council on 10 May 2000 for the erection of 14 home units. On the other hand, it is unthinkable that the obtaining of the development approval for the larger development did not increase the value of the land, and therefore the financial return to the joint venturers to some extent at least on account of Callinan it165. By just how much the value would have been increased it is impossible however to say, in the absence of expert valuation evidence. I earlier referred to the third agreement, or agreed variation, between the parties, the agreement by the respondents that they would provide free of charge whatever was necessary for the obtaining of development approval for the 14 home units. That agreement is the subject of an explicit finding by the trial judge. It was not challenged in this Court. It was, if need be, supported by consideration, the consent given, albeit reluctantly, by the other joint venturers in return for the assumption of an obligation by, and on behalf of, the respondents to prepare the requisite plans free of charge. Having regard to the relevant surrounding circumstances and the terms necessarily implied in the joint venture agreement itself, that obligation was assumed for the benefit of the joint venture, that is, all parties to it, with a view to maximizing the financial return to all of the parties, whether the apartments were built by them, or, as was still not foreseen, if the joint venture disintegrated and the land had to be sold as undeveloped land. That last contingency having arisen, the joint venturers were able, and in the case of the respondents, obliged, to sell the land with any attributes of value that it had, including the development consent and the plans forming part of it, and by then, on the files of the Council, to the appellant. The respondents, having accepted that the development approval ran with the land166, must be taken to have been aware of that matter when the plans were provided and used for the purpose of obtaining the development approval. The development approval, they must also have understood, was of little or no utility without the plans, by then forming part of it, and the right to use them to give effect to it. The respondents' attempts to frustrate that obligation, and the terms of the contract of sale of the land to the appellant, inserted in the contract, following a prudent application to the Supreme Court made no doubt out of an excess of caution, did nothing to impair or diminish the appellant's right of purchase of the land, and to develop it in accordance with the plans and to implement the development approval. In the reasons for judgment the Full Court asked and answered in the negative, the rhetorical question which I earlier set out167: querying why it 165 cf Boland v Yates Property Corp Pty Ltd (1999) 74 ALJR 209 at 264-266 [265]- [275]; 167 ALR 575 at 647-650. 166 It is unnecessary therefore to decide whether a development consent will ordinarily run with the land, but for the reasons given by Kirby and Crennan JJ it is likely that this is so, and the concession properly made. 167 (2005) 144 FCR 264 at 271 [20]. Callinan should be presumed that Parramatta and Fares would agree to an assignment of its interest in the plans bearing in mind that it was not going to be paid for its work. The immediate question was not one of assignment. The question of substance was of the terms of the provision of the plans to the joint venture for the joint venturers' joint purpose. The answer was: "to secure the consent of the other joint venturers and to maximize the return to all". There is nothing in the Copyright Act which dictates any different a view. Section 15 of it states that an act is "deemed to have been done with the licence of the owner of a copyright if the doing of the act was authorized by a licence binding the owner". The use of the words "deemed" and "authorized" is an indication that the express use of the word "licence" is not necessary for the conferral of a licence under the Act. Section 36, which deals with infringement of copyright, also refers to the authorization of the doing of an act interchangeably with a licence. Nor do the cases suggest otherwise. As to them, it is important to appreciate however that they are largely concerned with traditional arms-length relationships between architect and client, and not with modern joint venture agreements in which the participants, often, as here, professionals, who may have different skills and knowledge, and may be able to make different contributions accordingly. Reference was made by the Full Court and the respondents to Stovin- Bradford v Volpoint Properties Ltd168. That case depended, as does this one, on its own facts. Unlike here, nothing had been said there by the architect and his principals about the conditions of the latter's engagement169. The judgments do identify however the differences apparent here, between plans supplied to obtain a development consent, and the more detailed plans and specifications required for the construction of the building. Beck v Montana Constructions Pty Limited170 was also cited in argument. Whether what the appellant acquired here should be expressed as an implied licence or a contractual permission validly conferred by the vendors to it, does not matter. But the events which happened were capable of producing the former, if that be the necessary characterization. With the exception of the complication of the absence of a holding out by the joint venturers, introduced, in breach of contract by the respondents, the observations of Jacobs J in Beck are relevant to this case171: 169 [1971] Ch 1007 at 1014. 170 [1964-5] NSWR 229. 171 [1964-5] NSWR 229 at 233-234. Callinan "It is my view that in the circumstances of this case the second- named defendant was entitled to the benefit of an implied licence, permission or consent to make such use of the plans. This aspect must be looked at in two steps. Firstly, did the person or persons who engaged the architects for reward to prepare these plans thereby obtain the right to use them in the manner in which they were ultimately used and secondly, if that be so, did the transferee of the land, in the circumstances where it was held out to him that plans were available and approved, obtain the like right? I think that both these questions must be answered in the affirmative and I deal firstly with the second of them. Assuming the right of the owner of land to make use of sketch plans for the purpose of erecting a building substantially in accordance with that sketch I think that when he sells the land and holds out to the purchaser that plans are available and approved from all authorities and shows those plans to the purchaser, then on the sale of the land there should be implied an agreement collaterally to the sale of the land whereby the vendor grants to the purchaser such right as he has to the use of the plans. This assumes that the right, that is to say the licence, permission or consent, however it is described, is assignable and that depends on the implied terms of grant of the original licence, permission or consent. It therefore seems to me that subject to the first matter then the second question may be answered in the affirmative." Torpey Vander Have Pty Ltd v Mass Constructions Pty Ltd172 too was cited. There the issue, which arose out of a quite different set of circumstances, was whether a mortgagee exercising power of sale could confer a licence upon the purchaser from it to use the plans prepared by an architect for the owners and mortgagor who were also joint venturers, to obtain a development approval. Spigelman CJ nonetheless had no difficulty in implying a licence in favour of the joint venturers and a purchaser from them173: "The implied licence was established by reason of the relationship between the appellant and the Citron Developments joint venture. On the authority of Beck it would readily be concluded, as her Honour did conclude, that such a licence conferred permission to construct the dwellings in accordance with the plans and to transfer the right to do so to 172 (2002) 55 IPR 542. 173 (2002) 55 IPR 542 at 549 [31]-[32]. Callinan a purchaser of the property. The transfer in the present case was effected by means of a mortgagee sale. Whether or not a mortgagee had a right to use the plans depends on whether or not the licence fell within the property the subject of the mortgage. This is a matter that has arisen on numerous occasions with respect to various kinds of licences relating to the conduct of businesses upon property or other aspects of the operation of the property. ... [T]he respondent did not tender the mortgage in this case. Accordingly it failed to prove that it had a licence. It cannot succeed on its defence in the present proceedings." What his Honour said was consistent also with the observations of Lord Denning MR in Blair v Osborne & Tomkins174: "[I]f the owner should sell the site, the implied licence extends so as to avail the purchaser also." The appellant was, in the circumstances of this case, entitled therefore to utilize the plans without falling into any breach of any copyright subsisting in the respondents, or either of them. Bias The other issue is whether the Full Court was right to hold that the trial judge's conduct and judgment gave rise to any apprehension of bias. It is not clear why the Full Court, having found against the appellant on the respondents' other grounds of appeal, thought it necessary to deal with the issue of apprehended bias. Sometimes it will be appropriate for courts other than final courts to deal with all issues. For example, in a case in which a plaintiff fail on the issue of liability, it will often be useful for a trial judge to assess damages to cover the possibility that an appellate court may take a different view of liability. But as a general proposition175, all civil courts, including intermediate appellate courts, should confine themselves to the issues which are necessary for the disposition of the case. The decision of the Full Court here, on the first issue, was sufficient to dispose of the case completely. The decision that the trial judge had manifested apprehended bias does not, and would have called for an order for a fresh trial rather than the orders consequential upon the Full Court's other holdings in favour of the respondents. 174 [1971] 2 QB 78 at 85. 175 There are other exceptions. For example, courts of criminal appeal often can, and should, deal with all issues whenever it is reasonably possible to do so. Callinan It is unfortunate that the trial judge did, on a few occasions, express himself in rather strong language. In my opinion he did not do so however in such terms as could be characterised as manifestations of apparent bias. His Honour's remarks need to be understood in the light of the way in which trials in the Federal Court, and indeed in some other jurisdictions on occasions, are now conducted. The Federal Court has adopted a docket system. In that system a number of cases are assigned to a particular judge who then oversees, and makes directions with respect to, all interlocutory matters before hearing a case assigned to him or her. The procedure for trials in the jurisdiction also involves the preparation, exchanging and filing of statements and documents in advance of the hearing which may, and almost always will, be read before the trial begins. This system has its disadvantages and dangers. On the one hand, the trial judge will be well educated in many of the details of the case on each side by the time that the hearing starts. But on the other hand, it may sometimes be difficult for the trial judge, apparently fully conversant with the facts and issues, not to have formed some provisional view at least of the outcome of the case. The justifications for the provision of written statements in advance of trial have been thought to be the avoidance of surprise and the shortening of hearing time. These advantages will often be more illusory than real. The provision of written statements by one side will afford to the other an opportunity to rehearse in some detail his or her response. It is also impossible to avoid the suspicion that statements on all sides are frequently the product of much refinement and polishing in the offices and chambers of the lawyers representing the parties, rather than of the unassisted recollection and expression of them and their witnesses. This goes some way to explaining the quite stilted and artificial language in which some of the evidence is expressed in writing from time to time, as it was here. Viva voce evidence retains a spontaneity and genuineness often lacking in pre-prepared written material. It is also open to question whether written statements in advance do truly save time and expense, even of the trial itself. Instead of hearing and analysing the evidence in chief as it is given, the trial judge has to read it in advance, and then has the task of listening to the cross-examination on it, and later, of attempting to integrate the written statements, any additional evidence given orally in chief, and the evidence given in cross-examination. I mention these matters because in sum they may well incline a trial judge towards a degree of outspokenness of a kind to which he or she would not be inclined in a conventional trial on largely oral evidence. That this is so does not provide any excuse for the manifestation of apparent bias on the part of a trial judge but it may explain why a judge finds himself or herself speaking more candidly and strongly than he or she might otherwise do, or even have been able to do, in the past or in other jurisdictions. The question nonetheless remains whether the fair-minded lay observer might reasonably have apprehended that the Callinan judge might not be bringing an impartial and unprejudiced mind to the resolution of the questions he was required to decide176. It is axiomatic that the perception of a lay observer will not be as informed as the perception of a lawyer, particularly a litigation lawyer. But the notional lay person should not be taken to be completely unaware of the way in which cases are brought to trial and tried. In any event, it would have been apparent to any observer from the trial judge's remarks here that his Honour was already well acquainted with the issues, and many of the details of the respective cases of the parties. Indeed, no other conclusion would have been open having regard to the matters which the trial judge raised and the way in which he expressed himself. That he had not formed any final view appears from the number and type of questions that he asked. For example, at one stage he enquired whether one way of looking at the case was a distorted way of doing so. A little later he said that the responses which had been made to him had given him useful background. In cross-examination of Mr Barrak, his Honour raised some points which the witness himself said were important and significant. It was certainly not wrong for his Honour to point out to the witness that written material to which the witness was referring was not in evidence. After a number of exchanges his Honour made it clear that he was telling the parties what he provisionally had in mind but emphasising that he was keeping an open mind, and was anxious neither to foreclose his decision, nor to cause any person to think that he might have done so. At one point, his Honour said to counsel for the respondents that he hoped that he had some better submissions than the one that he had just made. Almost every counsel of any experience has, on occasion, been the subject of a judicial observation of that kind. The respondents were correct in submitting, and the Full Court in holding, that it was right in determining this issue to look not only at the course of the trial, but also at the reasons for judgment, and to read them together to see whether the cumulative effect was one of apparent bias. As I have already indicated, the judicial interventions during the trial itself would not give rise to an apprehension of bias. Nor would the reasons for judgment, of themselves standing alone. It was not unreasonable for the trial judge to observe in his judgment that time and expense had been wasted on issues of no sufficient bearing upon the critical ones. Furthermore, it was not an expression of any apparently biased viewpoint, for his Honour to state that the nett income of Parramatta did not reflect a thriving or substantial architectural practice. There had been a real issue related to this matter, of Parramatta's entitlement to design and construct a building based on the plans for a substantial reward. Parramatta's 176 See Johnson v Johnson (2000) 201 CLR 488 at 492 [11] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ. Callinan experience and the extent of its architectural and building practice, were highly relevant to the likelihood or otherwise of an agreement by the joint venturers to engage Parramatta for these purposes. Taken cumulatively, his Honour's interventions and reasons for judgment do not give rise to an apprehension of bias. Critical, strong and candid they may have been, but excessively so they were not. To some extent they may be taken to be expressions of exasperation, unfortunately so perhaps, but as a matter of degree, still falling short of apparent bias. This Court is in the same position as the Full Court in deciding the ground of appeal on the issue of bias. Both courts have to do so on the basis of the written record. The view that I take of that is, as I have already foreshadowed, that the appellant has established an absence of apparent bias. The orders of the Court should be that the appeal be allowed; the orders made by the Full Court of the Federal Court of Australia on 29 July and 22 August 2005 be set aside; the respondents pay the appellant's costs of the appeal to the Full Court of the Federal Court and of this appeal; and remit to the trial judge the proceedings for the purpose of conducting the enquiry (the subject of par 3 of the Orders made by the trial judge on 13 October 2004) into the quantum of damages sustained by the appellant by reason of the respondents' threats.

HIGH COURT OF AUSTRALIA PROBUILD CONSTRUCTIONS (AUST) PTY LTD APPELLANT AND SHADE SYSTEMS PTY LTD & ANOR RESPONDENTS Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2018] HCA 4 14 February 2018 ORDER Appeal dismissed. On appeal from the Supreme Court of New South Wales Representation B W Walker SC with S Robertson and M R L Forgacs for the appellant (instructed by Maddocks Lawyers) M Christie SC with D P Hume for the first respondent (instructed by Moray Submitting appearance for the second respondent Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd Administrative law – Judicial review – Availability of certiorari – Error of law on face of record – Non-jurisdictional error – Building and Construction Industry Security of Payment Act 1999 (NSW) – Where Act confers entitlement to "progress payment" on persons who undertake to carry out construction work under construction contracts and provides scheme for determining disputed claims – Where first respondent made claim for progress payment – Where claim referred to adjudicator for determination – Where adjudicator made error of law in reasons for determination – Where reasons form part of record – Whether Act ousts jurisdiction of Supreme Court of New South Wales to make order in nature of certiorari to quash determination for non-jurisdictional error of law on face of record. Words and phrases – "clear legislative intention", "error of law on the face of the record", "interim entitlement", "jurisdictional error", "non-jurisdictional error", "order in the nature of certiorari". Building and Construction Industry Security of Payment Act 1999 (NSW), Pts 2, 3. Supreme Court Act 1970 (NSW), ss 22, 69. KIEFEL CJ, BELL, KEANE, NETTLE AND GORDON JJ. The Building and Construction Industry Security of Payment Act 1999 (NSW) ("the Security of Payment Act") establishes a scheme of rights and procedures relating to the receipt and recovery by contractors of progress payments for construction work. Under the scheme, disputed payment claims may be referred for determination by an adjudicator. The only question in this appeal is whether the scheme established by the Security of Payment Act for claims for, and payment of, progress payments ousts the jurisdiction of the Supreme Court of New South Wales to make an order in the nature of certiorari to quash a determination by an adjudicator for error of law on the face of the record that is not a jurisdictional error. The answer is yes: the Security of Payment Act does oust that jurisdiction. The Security of Payment Act Enacted in 1999, the Security of Payment Act was followed by closely equivalent statutes in Victoria, Queensland, the Australian Capital Territory, South Australia and Tasmania1. The object of the Security of Payment Act is "to ensure that any person who undertakes to carry out construction work (or who undertakes to supply related goods and services) under a construction contract is entitled to receive, and is able to recover, progress payments in relation to the carrying out of that work and the supplying of those goods and services"2. 1 Building and Construction Industry Security of Payment Act 2002 (Vic); Building and Construction Industry Payments Act 2004 (Q); Building and Construction Industry (Security of Payment) Act 2009 (ACT); Building and Construction Industry Security of Payment Act 2009 (SA); Building and Construction Industry Security of Payment Act 2009 (Tas). s 3(1) of the Security of Payment Act. That wording was inserted into the Security of Payment Act as part of extensive amendments effected by the Building and Construction Industry Security of Payment Amendment Act 2002 (NSW). Similar language was later adopted in the equivalent Acts in the other jurisdictions: s 3(1) of the Building and Construction Industry Security of Payment Act 2002 (Vic); s 7 of the Building and Construction Industry Payments Act 2004 (Q); s 6(1) of the Building and Construction Industry (Security of Payment) Act 2009 (ACT); s 3(1) (Footnote continues on next page) Bell Nettle Gordon The means by which the Security of Payment Act ensures that a person is entitled to a progress payment is by "granting a statutory entitlement to such a payment regardless of whether the relevant construction contract makes provision for progress payments"3. The statutory entitlement to progress payments is provided for in s 8. "[P]rogress payment" is defined in s 4(1) to include the final payment for construction work carried out (or for related goods and services supplied) under a construction contract, a single or one-off payment for such work or supplies, and a "milestone payment" (a payment that is based on an event or date). As explained in s 3(3), the procedure for recovering such a payment requires: the making of a payment claim by the person claiming payment, and the provision of a payment schedule by the person by whom the payment is payable, and the referral of any disputed claim determination, and to an adjudicator for the payment of the progress payment so determined." That procedure is set out in Pt 3 ("Procedure for recovering progress payments"). Section 13(1) provides that a person who is or who claims to be entitled to a progress payment (the "claimant") may serve a payment claim on the person who, under the construction contract concerned, is or may be liable to make a payment. The payment claim must identify the relevant construction work (or related goods and services) and the amount of the progress payment that the claimant claims to be due (the "claimed amount")4. of the Building and Construction Industry Security of Payment Act 2009 (SA); s 3 of the Building and Construction Industry Security of Payment Act 2009 (Tas). s 3(2) of the Security of Payment Act. s 13(2)(a) and (b) of the Security of Payment Act. Bell Nettle Gordon Section 14(1) provides that a person on whom a payment claim is served (the "respondent") may reply to the claim by providing a payment schedule to the claimant. The payment schedule must indicate the amount of the payment (if any) that the respondent proposes to make (the "scheduled amount")5. If the scheduled amount is less than the claimed amount, the payment schedule must indicate why that is so and, if the respondent is withholding payment, the respondent's reasons for withholding payment6. If a claimant serves a payment claim on a respondent and the respondent does not provide a payment schedule within 10 business days (or earlier, if required by the construction contract), s 14(4) makes the respondent liable to pay the claimed amount on the due date7 for the progress payment. Any outstanding amount not paid on or before the due date is recoverable as a debt in a court of competent jurisdiction8. The position is the same if the respondent provides a payment schedule but does not pay the scheduled amount by the due date9. Alternatively, the claimant may apply in either case for adjudication of the payment claim10. Division 2 of Pt 3 deals with the adjudication of disputes. Section 17(1) provides: "A claimant may apply (an adjudication application) if: for adjudication of a payment claim the respondent provides a payment schedule under Division 1 but: the scheduled amount indicated in the payment schedule is less than the claimed amount indicated in the payment claim, or s 14(2)(b) of the Security of Payment Act. s 14(3) of the Security of Payment Act. 7 See ss 4(1) and 11 of the Security of Payment Act. s 15(2)(a)(i) of the Security of Payment Act. s 16(2)(a)(i) of the Security of Payment Act. 10 ss 15(2)(a)(ii) and 16(2)(a)(ii) of the Security of Payment Act. Bell Nettle Gordon the respondent fails to pay the whole or any part of the scheduled amount to the claimant by the due date for payment of the amount, or the respondent fails to provide a payment schedule to the claimant under Division 1 and fails to pay the whole or any part of the claimed amount by the due date for payment of the amount." An adjudication application is to be made to an authorised nominating authority11, which must refer the application to an adjudicator as soon as practicable12. Where the respondent has failed to provide a payment schedule, an adjudication application cannot be made unless the claimant notifies the respondent, within 20 business days immediately following the due date for payment, of the claimant's intention to apply for adjudication of the payment claim and the respondent has been given an opportunity to provide a payment schedule to the claimant within five business days after receiving the claimant's notice13. The respondent may lodge with the adjudicator a response to the claimant's adjudication application only if the respondent provided a payment schedule within the time specified in s 14(4) or s 17(2)(b)14. That response must be lodged within five business days after receiving a copy of the application or two business days after receiving notice of the adjudicator's acceptance of the application, whichever is the later date15. The response may contain 11 s 17(3)(b) of the Security of Payment Act. 12 s 17(6) of the Security of Payment Act. The eligibility criteria for adjudicators are set out in s 18 of the Security of Payment Act. 13 s 17(2) of the Security of Payment Act. See also s 17(3)(c)-(e) for the other prescribed time limits. 14 s 20(2A) of the Security of Payment Act. 15 s 20(1) of the Security of Payment Act. Bell Nettle Gordon submissions16 but it cannot include reasons for withholding payment that were not included in the payment schedule provided to the claimant17. Section 21(3) requires the adjudicator to determine an application "as expeditiously as possible" and, in any case, within 10 business days after the date on which the adjudicator notified the claimant and the respondent of acceptance of the application or within such further time as agreed by the parties. Any proceedings to determine an adjudication application are conducted informally. They may be conducted by a conference and the parties are not entitled to legal representation at any such conference18. The task of the adjudicator is set out in s 22. Sub-sections (1) and (2) provide as follows: "(1) An adjudicator is to determine: the amount of the progress payment (if any) to be paid by the respondent to the claimant (the adjudicated amount), and the date on which any such amount became or becomes payable, and the rate of interest payable on any such amount. In determining an adjudication application, the adjudicator is to consider the following matters only: the provisions of this Act, the provisions of the construction contract from which the application arose, 16 s 20(2)(c) of the Security of Payment Act. 17 s 20(2B) of the Security of Payment Act. 18 s 21(4)(c) and (4A) of the Security of Payment Act. Bell Nettle Gordon the payment claim to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the claimant in support of the claim, the payment schedule (if any) to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the respondent in support of the schedule, the results of any inspection carried out by the adjudicator of any matter to which the claim relates." Under s 23(2), if the adjudicator determines that the respondent is required to pay an adjudicated amount, the respondent must pay that amount to the claimant on or before the "relevant date" as defined in s 23(1). The "relevant date" is the date occurring five business days after the adjudicator's determination is served on the respondent, unless the adjudicator determines a later date19. If the respondent fails to pay the whole or any part of the adjudicated amount to the claimant, the claimant may, under s 24, request the authorised nominating authority to whom the adjudication application was made to provide an adjudication certificate, and serve notice on the respondent of the claimant's intention to suspend carrying out construction work (or to suspend supplying related goods and services) under the contract20. Under s 25(1), the adjudication certificate may be filed as a judgment for a debt in any court of competent jurisdiction and is enforceable accordingly. However, s 25(4) also provides that, if the respondent commences proceedings to have the judgment set aside, the respondent: is not, in those proceedings, entitled: to bring any cross-claim against the claimant, or to raise any defence in relation to matters arising under the construction contract, or 19 See s 22(1)(b) of the Security of Payment Act. 20 See also s 27 of the Security of Payment Act. Bell Nettle Gordon (iii) to challenge the adjudicator's determination, and is required to pay into the court as security the unpaid portion of the adjudicated amount pending the final determination of those proceedings." Parties may not contract out of the scheme21. But the rights, duties and remedies arising under a construction contract are acknowledged and preserved by ss 3(4) and 32. In particular, s 32 clarifies that nothing in Pt 3 affects any right that a party to a construction contract may have under that contract. Moreover, nothing done under Pt 3 affects any civil proceedings arising under a construction contract except as provided in s 32(3), which provides that, in any such proceedings, a court or tribunal: "(a) must allow for any amount paid to a party to the contract under or for the purposes of this Part in any order or award it makes in those proceedings, and (b) may make such orders as it considers appropriate for the restitution of any amount so paid, and such other orders as it considers appropriate, having regard to its decision in those proceedings." Facts Probuild Constructions (Aust) Pty Ltd ("Probuild") and Shade Systems Pty Ltd ("Shade Systems") were parties to a subcontract under which Shade Systems agreed to supply and install external louvres for an apartment development. On 23 December 2015, Shade Systems served on Probuild a payment claim pursuant to s 13 of the Security of Payment Act stating that a progress payment of $294,849.33 (excluding GST) was due. On 11 January 2016, Probuild provided a payment schedule pursuant to s 14 of the Security of Payment Act indicating that it did not propose to pay any of the amount claimed. Probuild relevantly contended that it was entitled to set off, against the amount in the payment claim, a considerably higher amount for liquidated damages ($1,089,900.00) which it asserted was owing because works 21 s 34 of the Security of Payment Act. Bell Nettle Gordon were not completed before the "Date for Practical Completion" in the subcontract. Pursuant to s 17 of the Security of Payment Act, Shade Systems applied for adjudication of its payment claim. The adjudicator rejected Probuild's liquidated damages claim on the basis that liquidated damages could not be calculated until either "practical completion" (being actual completion of the works) or termination of the subcontract. The adjudicator determined that the amount of the progress payment payable by Probuild to Shade Systems was $277,755.03 (including GST). Proceedings for certiorari Probuild sought, under s 69 of the Supreme Court Act 1970 (NSW), an order in the nature of certiorari quashing the determination of the adjudicator. The primary judge (Emmett AJA) did not consider that the Security of Payment Act excluded the jurisdiction of the Supreme Court to make an order in the nature of certiorari for error of law on the face of the record22. Emmett AJA made the order sought by Probuild on two bases: first, the adjudicator erroneously considered that no entitlement to liquidated damages arose until the subcontract; and second, practical completion or the adjudicator erroneously considered that Probuild needed to demonstrate that Shade Systems was at fault for the delay for which it claimed liquidated damages. termination of Shade Systems appealed to the Court of Appeal of the Supreme Court of New South Wales. The only issue pressed at the hearing of the appeal was the jurisdictional issue: whether the Security of Payment Act excluded the jurisdiction of the Supreme Court to make an order in the nature of certiorari for error of law on the face of the record. Basten JA (with whom Bathurst CJ, Beazley P, Macfarlan and Leeming JJA agreed) held that the Supreme Court did not have jurisdiction to quash an adjudicator's determination for error of law on the face of the record23. 22 Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2016] NSWSC 23 Shade Systems Pty Ltd v Probuild Constructions (Aust) Pty Ltd (No 2) (2016) 344 ALR 355 at 375 [85]-[86]. Bell Nettle Gordon In its appeal by special leave to this Court, Probuild contended that the jurisdiction of the Supreme Court to make an order in the nature of certiorari to quash an adjudicator's determination for error of law on the face of the record that is not a jurisdictional error had not been ousted. Although it accepted that the jurisdiction could be ousted, it submitted that "clear words" to that effect were necessary. During the course of oral argument, Probuild accepted that if, as a matter of statutory construction, there was a clear legislative intention to oust the jurisdiction, that would be sufficient in the absence of an express statement to that effect. However, Probuild contended that, in the absence of express words, the Security of Payment Act otherwise revealed no clear legislative intention that the jurisdiction to quash an exercise or purported exercise of power for error of law on the face of the record was ousted in relation to an adjudicator's determination under that Act. Probuild's appeal to this Court was heard together with another appeal24, from a decision of the Full Court of the Supreme Court of South Australia, in which the same issue arose in relation to the equivalent statute in South Australia. There, the Full Court expressed support for the view that the South Australian legislation did not exclude the jurisdiction to make an order in the nature of certiorari for error of law on the face of the record25, but ultimately followed the reasoning of the Court of Appeal of the Supreme Court of New South Wales in the decision presently under appeal. Availability of certiorari The jurisdiction of the Supreme Court of New South Wales to make an order in the nature of certiorari is an aspect of its jurisdiction as "the superior court of record" in that State26. The jurisdiction is exercised by judgment or order, not by writ27. The function of an order in the nature of certiorari is to remove the legal consequences, or purported legal consequences, of an exercise or purported 24 Maxcon Constructions Pty Ltd v Vadasz [2018] HCA 5. 25 Maxcon Constructions Pty Ltd v Vadasz (No 2) (2017) 127 SASR 193 at 247-254 26 ss 22 and 69 of the Supreme Court Act. 27 s 69(1) of the Supreme Court Act. Bell Nettle Gordon exercise of power which has, at the date of the order, a discernible or apparent The principal basis for making such an order is jurisdictional error, thus enforcing the limits of a decision-maker's functions and powers. The jurisdiction of a State Supreme Court to review an exercise or purported exercise of power for jurisdictional error, and to grant relief in the nature of certiorari (and prohibition and mandamus) where jurisdictional error is found, serves to enforce the limits of State executive and judicial power. In that sense, it may aptly be described as a "supervisory jurisdiction"29. As was explained in Kirk v Industrial Court (NSW), that supervisory jurisdiction was and is a defining characteristic of the State Supreme Courts30. Unlike the supervisory jurisdiction enforcing the limits of executive and judicial power, the jurisdiction of a Supreme Court to review, and to make an order in the nature of certiorari, for error of law on the face of the record is not part of the defining characteristics of the State Supreme Courts. This jurisdiction may be ousted by statute31. In Craig v South Australia, this Court rejected what was described as an "expansive" approach to certiorari which conceived of the "record" of an inferior court as including both the reasons for decision and the transcript of proceedings, holding that, in the absence of statutory provision to the contrary, the record did not ordinarily include the reasons for decision32. After the decision in Craig, the Supreme Court Act was amended33 to declare in s 69(3) that the jurisdiction 28 Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 580; [1992] HCA 10; Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480 at 492 [25]; [2013] HCA 43 citing Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149 at 159; [1996] HCA 44. 29 Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 580-581 [98]; [2010] HCA 1. 30 (2010) 239 CLR 531 at 580-581 [98]. 31 See Kirk (2010) 239 CLR 531 at 581 [100]. 32 (1995) 184 CLR 163 at 180-183; [1995] HCA 58. 33 See Item 8 of Sched 1.8 to the Courts Legislation Amendment Act 1996 (NSW). Bell Nettle Gordon of the Supreme Court to grant any relief or remedy in the nature of a writ of certiorari includes jurisdiction to quash the ultimate determination of a court or tribunal if that determination has been made on the basis of an error of law that appears on the face of the record of the proceedings. The Supreme Court Act was also amended to provide in s 69(4) that "the face of the record" includes the reasons expressed by the court or tribunal for its ultimate determination. Section 69(5) of the Supreme Court Act recognises that the declaration in s 69(3) that the Supreme Court has jurisdiction to make an order in the nature of certiorari for error of law on the face of the record does not affect the operation of any legislative provision to the extent that that provision is, "according to common law principles and disregarding [s 69(3) and (4)], effective to prevent the Court from exercising its powers to quash or otherwise review a decision". It is a noteworthy feature of our legal history that it has long been taken as axiomatic34 that inferior courts or tribunals exercise their powers under the supervision of the superior courts in accordance with the law as expounded and applied by those courts35. As Brennan J said in Attorney-General (NSW) v Quin, "the scope of judicial review must be defined not in terms of the protection of individual interests but in terms of the extent of power and the legality of its exercise"36. An intention to alter the settled and familiar role of the superior courts must be clearly expressed37. But the question is a matter of statutory construction; and in the resolution of such a question, context is, as always, 34 Groenvelt v Burwell (1700) 1 Ld Raym 454 at 469 [91 ER 1202 at 1212]; R v The Chancellor, Masters and Scholars of the University of Cambridge (1723) 1 Str 557 at 564-565 [93 ER 698 at 702-703]; Cooper v Wandsworth Board of Works (1863) 14 CB (NS) 180 [143 ER 414]. 35 Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 35-36; [1990] HCA 21; Craig (1995) 184 CLR 163 at 175-176; SZFDE v Minister for Immigration and Citizenship (2007) 232 CLR 189 at 196-197 [17]; [2007] HCA 35. 36 (1990) 170 CLR 1 at 36. 37 Hockey v Yelland (1984) 157 CLR 124 at 130-131, 142; [1984] HCA 72; Public Service Association (SA) v Federated Clerks' Union (1991) 173 CLR 132 at 160; [1991] HCA 33; Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 492-493 [32], 505 [72], 516 [111]; [2003] HCA 2. Bell Nettle Gordon important38. The Security of Payment Act contains no privative clause providing in terms that an adjudicator's determination is not to be quashed by way of certiorari on the basis of error of law on the face of the record. But that is not the end of the inquiry. There remains for consideration the question whether, absent an express statement but read as a whole, the Security of Payment Act has that effect. Whether it does depends on examination of the text, context and purpose of the Security of Payment Act. In undertaking that process, "[w]hether and when the decision of an inferior court or other decision-maker should be treated as 'final' (in the sense of immune from review for error of law) cannot be determined without regard to a wider statutory and constitutional context"39. Certiorari for error of law on the face of the record ousted The Security of Payment Act evinces a clear legislative intention to exclude the jurisdiction of the Supreme Court to make an order in the nature of certiorari to quash an adjudicator's determination for non-jurisdictional error of law on the face of the record. First, it is to be recalled that the Security of Payment Act was enacted "to reform payment behaviour in the construction industry"40 by seeking to ensure that a person who undertakes to carry out construction work under a construction contract is entitled to receive, and is able to recover, progress payments promptly in relation to the carrying out of that work41. In particular, it was designed to "stamp out the practice of developers and contractors delaying payment to subcontractors and suppliers"42. And it achieves that objective by 38 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69]; [1998] HCA 28; Certain Lloyd's Underwriters v Cross (2012) 248 CLR 378 at 388-389 [23]-[24]; [2012] HCA 56. 39 Kirk (2010) 239 CLR 531 at 577-578 [86]. 40 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 8 September 1999 at 104. See also Southern Han Breakfast Point Pty Ltd (In liq) v Lewence Construction Pty Ltd (2016) 91 ALJR 233 at 235 [3]; 340 ALR 193 at 194; [2016] HCA 52. 41 s 3(1) of the Security of Payment Act. 42 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 12 November 2002 at 6542. See also Southern Han (2016) 91 ALJR 233 at 235 [4]; 340 ALR 193 at 195. Bell Nettle Gordon setting up a scheme, including a "unique form of adjudication of disputes over the amount due for payment"43, which is, as Basten JA observed in the Court of Appeal, "coherent, expeditious and self-contained"44. The intended result is that "each party knows precisely where they stand at any point of time"45. Second, it is important to appreciate the subject matter of the Security of Payment Act. The Security of Payment Act is not concerned with finally and conclusively determining the entitlements of parties to a construction contract. Section 8 confers an entitlement to a progress payment, which may be the final payment, a single or one-off payment or what is described as a "milestone payment". Part 3 of the Security of Payment Act creates a distinct procedure for enforcing that statutory entitlement, which includes the making of a payment claim, the provision of a payment schedule in response and the determination of a payment claim by an adjudicator (at the option of the claimant). The statutory entitlement to a progress payment and the procedure for recovery of a progress payment are separate from, and in addition to, a contractor's entitlement under a construction contract to receive payment for completed work46. The statutory entitlement is predicated upon the existence of a construction contract, but the entitlement and the means available for its enforcement stand apart from the parties' rights under that contract. Indeed, the Security of Payment Act has effect despite any contractual provision to the contrary: any purported derogation is void47. Moreover, the Security of Payment Act acknowledges and preserves parties' contractual entitlements48. Importantly, the Security of Payment Act provides that in any proceedings before a court or 43 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 12 November 2002 at 6542. 44 Shade Systems (2016) 344 ALR 355 at 369 [59]. See also R J Neller Building Pty Ltd v Ainsworth [2009] 1 Qd R 390 at 400-401 [39]-[40]; Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd (2005) 62 NSWLR 385 at 389 [22]. 45 Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd (2010) 78 NSWLR 393 at 406 46 See ss 8 and 13 of the Security of Payment Act. 47 s 34 of the Security of Payment Act. 48 s 32 of the Security of Payment Act. Bell Nettle Gordon tribunal in relation to any matter arising under a contract, the court or tribunal must allow for, and may make such orders as it considers appropriate for the restitution of, any amount paid under or for the purposes of Pt 349. As was described in Southern Han Breakfast Point Pty Ltd (In liq) v Lewence Construction Pty Ltd50, the Security of Payment Act was the subject of substantial amendments in 2002. Introducing the Bill for the Building and Construction Industry Security of Payment Amendment Act 2002 (NSW), the responsible Minister stated51: "[The Security of Payment Act] was designed to ensure prompt payment and, for that purpose, [the Security of Payment Act] set up a unique form of adjudication of disputes over the amount due for payment. Parliament intended that a progress payment, on account, should be made promptly and that any disputes over the amount finally due should be decided separately. The final determination could be by a court or by an agreed alternative dispute resolution procedure. But meanwhile the claimant's entitlement, if in dispute, would be decided on an interim basis by an adjudicator, and that interim entitlement would be paid." The Security of Payment Act does not speak of "interim" entitlements and payments, but the label aptly reflects how the statutory entitlement interacts with any underlying contractual liability. In that respect, the statutory entitlement established by the Security of Payment Act stands in marked contrast to the sort of final determination provided for in the legislative scheme considered in Hockey v Yelland52, the effect of which was permanent. Third, underpinning is an "interim" understanding that "[c]ash flow is the lifeblood of the construction industry"53. statutory entitlement the 49 s 32(3) of the Security of Payment Act. 50 (2016) 91 ALJR 233 at 235-236 [3]-[4]; 340 ALR 193 at 194-195. 51 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 12 November 2002 at 6542. 52 (1984) 157 CLR 124 at 130, 142. 53 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 12 November 2002 at 6542. Bell Nettle Gordon Put another way, any interruption to the cash flow of a person carrying out construction work is apt to create the risk of financial failure54. Consistent with that understanding, the procedure in Pt 3 is designed to operate quickly. So much is apparent from the detailed time limits that apply at each stage and have been described earlier in these reasons55. These time limits are "carefully calibrated"56. The time limits have been rightly described as imposing "brutally fast"57 deadlines on the claimant, the respondent and the adjudicator to ensure the prompt resolution of payment disputes. Moreover, the time frames are not conducive to lengthy consideration by an adjudicator of detailed submissions on all questions of law. Indeed, as a result of the combined operation of ss 20(1) and 21(3) of the Security of Payment Act, an adjudicator can have as few as five business days after receiving the respondent's response to the adjudication application to determine the amount of the progress payment to be paid by the respondent and the date on which it becomes payable. In that limited time, the adjudicator must consider the provisions of the Security of Payment Act, the provisions of the construction contract from which the application arose, the payment claim (and any accompanying submissions and documentation), the payment schedule (and any accompanying submissions and documentation) and the results of any inspection carried out by the adjudicator58. Fourth, the Security of Payment Act permits informal procedures in the to determine an adjudication application. conduct of any proceedings An adjudicator may, for example, call a conference of the parties, which is to be conducted informally and without any entitlement to legal representation59. 54 Neller [2009] 1 Qd R 390 at 400-401 [39]-[40]. 55 See, eg, ss 14(4)(b), 17(2), (3)(c)-(e), 20(1), 21(3), 23 of the Security of Payment Act. 56 Chase Oyster Bar (2010) 78 NSWLR 393 at 406 [47]. 57 Aronson, Groves and Weeks, Judicial Review of Administrative Action and Government Liability, 6th ed (2017) at 1070 [18.200]. 58 s 22(2) of the Security of Payment Act. 59 s 21(4)(c) and (4A) of the Security of Payment Act. Bell Nettle Gordon Fifth, consistent with the objective of providing a "speedy and effective means of ensuring cash flow to builders from the parties with whom they contract"60, there are other aspects of the scheme which reinforce the conclusion that an adjudicator's determination is not subject to judicial review for non-jurisdictional error of law. There is no right of appeal from the determination of an adjudicator under the Security of Payment Act. And that omission was deliberate61. Next, the Security of Payment Act provides that an adjudication certificate may be filed by the claimant as a judgment for a debt in a court of competent jurisdiction62. If the respondent commences proceedings to have the judgment set aside, the respondent is not entitled to bring any cross-claim against the claimant, to raise any defence in relation to matters arising under the construction contract or to challenge the adjudicator's determination63. In addition, the respondent must pay into court as security the unpaid portion of the adjudicated amount pending the final determination of those proceedings64. Having regard to the above matters, it is right to say that the Security of Payment Act creates an entitlement that is "determined informally, summarily and quickly, and then summarily enforced without prejudice to the common law rights of both parties which can be determined in the normal manner"65. That operation of the Security of Payment Act gives rise to two further propositions which together point to the exclusion of the jurisdiction of the Supreme Court to review and to quash an adjudicator's determination for non-jurisdictional error of law on the face of the record. 60 See Neller [2009] 1 Qd R 390 at 400-401 [39]. 61 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 8 September 1999 at 107; cf Div 2A of Pt 3 of the Building and Construction Industry Security of Payment Act 2002 (Vic). 62 s 25(1) of the Security of Payment Act. 63 s 25(4)(a) of the Security of Payment Act. 64 s 25(4)(b) of the Security of Payment Act. 65 Falgat (2005) 62 NSWLR 385 at 389 [22]. Bell Nettle Gordon First, the absence of judicial review for error of law on the face of the record does not entrench for all time the consequences of a non-jurisdictional error of law. To speak of an adjudicator's determination as being final obscures the fact that a party is not left without recourse where an adjudicator errs within jurisdiction in determining the amount of a progress payment. A determination does not of itself give rise to any issue estoppel for the purposes of civil proceedings arising under a construction contract. As ss 3(4) and 32 make plain, the ability of a party to enforce contractual rights, including where an adjudicator has erred in determining the amount of a progress payment, is undiminished. Second, the operation of the statutory scheme, including its preservation of parties' contractual entitlements, affirmatively supports the conclusion that review for non-jurisdictional error of law on the face of the record is excluded. The clear legislative intention is to ensure that the statutory entitlement can be determined and enforced with minimal delay. The Security of Payment Act defers the final determination of contractual rights to a different forum, in which the consequences of any erroneous determination can and must be taken into account. reviewed and quashed. By contrast, it would not be consistent with the terms, structure or purposes of the statutory scheme to read the Security of Payment Act as not interfering with the bases upon which an adjudicator's determination may be judicially To permit potentially costly and time-consuming judicial review proceedings to be brought on the basis of error of law on the face of the record, regardless of whether an adjudicator had exceeded the limits of their statutory functions and powers, would frustrate the operation and evident purposes of the statutory scheme66. The jurisdiction to make an order in the nature of certiorari to quash an adjudicator's determination for error of law on the face of the record has been excluded. It is not necessary in these circumstances to examine any wider question which might arise in relation to the jurisdiction of a State Supreme Court, in other kinds of cases, to grant relief in the nature of certiorari for error of law on the face of the record. As was explained in Re McBain; Ex parte Australian Catholic Bishops Conference67, the jurisdiction is long-established. There may 66 See Shade Systems (2016) 344 ALR 355 at 375 [85]. 67 (2002) 209 CLR 372 at 403 [56], 412-414 [86]-[91], 415-422 [95]-[110], 462-472 [253]-[280]; [2002] HCA 16. Bell Nettle Gordon or may not be difficulties and anomalies arising from or in connection with the jurisdiction, where it survives. If there are issues of those kinds, they were not raised or debated in the argument of this appeal (or the related appeal in Maxcon Constructions Pty Ltd v Vadasz68). They need not be, and are not, considered here. In this Court, Probuild relied on the fact that the Security of Payment Act does not exclude review for jurisdictional error, a matter of significance to the Full Court of the Supreme Court of South Australia in Maxcon Constructions Pty Ltd v Vadasz (No 2)69. It was said that this reduced the force of the argument that review for non-jurisdictional error of law on the face of the record would undermine the statutory purposes. That contention should be rejected. No inference can be drawn from the fact that the Security of Payment Act does not purport to exclude review for jurisdictional error. As Kirk shows, exclusion of that jurisdiction would be beyond the power of the Parliament of New South Wales70. That the Parliament has not attempted to legislate beyond power says nothing about whether the Security of Payment Act evinces a clear intention to exclude the review jurisdiction of the Supreme Court to the extent that the Parliament had power to do so: relevantly, to prevent an order in the nature of certiorari being made on the basis of non-jurisdictional error of law. Finally, it takes the matter no further to say, as Probuild submitted, that it is "absurd" that a "manifestly" erroneous determination, in the sense that it is affected by non-jurisdictional error of law, may stand. A non-jurisdictional error of law may have serious consequences. But those consequences are dealt with by s 32 of the Security of Payment Act. The limited exclusion of review does not irrevocably entrench the consequences of an erroneous determination. Where it is contended that an adjudicator has made an error of law within jurisdiction, resulting in a progress payment that is inadequate or excessive, the dispute may be resolved the construction contract. If necessary, a restitutionary order can be sought71. The risk that the party placed at an advantage by an underpayment or overpayment may later become incapable through civil proceedings under 68 [2018] HCA 5. 69 (2017) 127 SASR 193 at 246 [180]-[181]. 70 (2010) 239 CLR 531 at 580-581 [96]-[98]. 71 s 32(3)(b) of the Security of Payment Act. Bell Nettle Gordon of meeting such an order is a risk that is assigned to the other party72. What Probuild characterised as an "absurd" outcome is more aptly seen as the coherent application of a statutory choice of forum rule. And private law proceedings in relation to a progress payment under a construction contract can hardly be expected to be less convenient than judicial review proceedings. This understanding of the scheme of the Security of Payment Act accords with the earlier decision of the Court of Appeal of the Supreme Court of New South Wales in Brodyn Pty Ltd v Davenport73. In the present case, the Court of Appeal followed Brodyn in this respect74. It was right to do so. It would have been a strong thing for that Court, as indeed it would be for this Court, to have taken any other course. Since the decision in Brodyn, the Parliament of New South Wales has twice had occasion to revisit the Security of Payment Act to make substantial amendments to its provisions75. No amendment was made to alter the effect of the decision in Brodyn. That circumstance is a powerful reason for rejecting any suggestion that the understanding of the legislation adopted in Brodyn, and given effect in the decision of the Court of Appeal in this case, was other than a faithful reflection of the intention of the legislature. For these reasons, the Court of Appeal was correct to conclude that the Security of Payment Act has the effect that the Supreme Court does not have jurisdiction enabling it to quash an adjudicator's determination for error of law on the face of the record. This being so, it is neither necessary nor appropriate to consider how an order in the nature of certiorari might be framed in such a way as to recognise that the time limits fixed by the Security of Payment Act do not easily accommodate the intervention of judicial review proceedings which lead to a determination being quashed76. 72 Neller [2009] 1 Qd R 390 at 401 [40]. 73 (2004) 61 NSWLR 421. 74 Shade Systems (2016) 344 ALR 355 at 375 [84]-[85]. 75 See Building and Construction Industry Security of Payment Amendment Act 2010 (NSW); Building and Construction Industry Security of Payment Amendment Act 2013 (NSW). 76 cf Cardinal Project Services Pty Ltd v Hanave Pty Ltd (2011) 81 NSWLR 716 at Bell Nettle Gordon Order The appeal should be dismissed. It was a condition of the grant of special leave to appeal that Probuild would pay Shade Systems' costs of the appeal to this Court. It is therefore unnecessary to make an order as to costs. The sole question in this appeal is whether the Supreme Court of New South Wales has jurisdiction to make an order in the nature of certiorari to quash a determination made by an adjudicator under the Building and Construction Industry Security of Payment Act 1999 (NSW) ("the Security of Payment Act") on the basis of a non-jurisdictional error of law in the reasons for the determination. I agree with the conclusion of the Court of Appeal that the Supreme Court lacks that jurisdiction and, accordingly, I agree that the appeal to this Court must be dismissed. I prefer to express my own reasons. Departing from the approach of the Court of Appeal77, I cannot see that answering the question has anything to do with reconciling conflicting enactments of the same legislature78. That is not because I overlook that the Supreme Court is continued by s 22 of the Supreme Court Act 1970 (NSW) as "the superior court of record in New South Wales" or that the jurisdiction that the Supreme Court has as "may be necessary for the administration of justice" in that State is now conferred by s 23 of that Act. Rather, it is because I recognise the Supreme Court's specific jurisdiction under s 69(1) now to grant by judgment or order the relief that the Supreme Court formerly had jurisdiction to grant by writs of prohibition, mandamus and certiorari as a continuation of its former supervisory jurisdiction, which until 1970 was expressed in terms of having and exercising in New South Wales like jurisdiction to that exercised by the Court of King's Bench in England79. The scope and incidents of that historical, inherited, supervisory jurisdiction were defined by the common law. The statutory perpetuation of that former jurisdiction does not alter its common law character. The conferral on the Supreme Court by s 69(1) of specific jurisdiction to grant by judgment or order the relief that the Supreme Court formerly had jurisdiction to grant by writs of prohibition, mandamus and certiorari is subject to an implicit qualification. The qualification is that, within limits imposed on legislative power by the status afforded to the Supreme Court under Ch III of the Commonwealth Constitution, the jurisdiction yields to legislation which common law principles of interpretation indicate to manifest an intention that a decision or category of decisions is not to be quashed or otherwise reviewed. In respect of the confirmation by s 69(3) of inclusion within that jurisdiction of jurisdiction to make orders in the nature of certiorari quashing the ultimate determination of a court or tribunal on the basis of error of law on the face of the record, and the expansion for that purpose of the record effected by s 69(4), that qualification is made explicit by s 69(5). 77 Shade Systems Pty Ltd v Probuild Constructions (Aust) Pty Ltd (No 2) (2016) 344 ALR 355 at 363 [37], 366 [48]. 78 Cf Shergold v Tanner (2002) 209 CLR 126 at 136-137 [33]-[35]; [2002] HCA 19. 79 Australian Courts Act 1828 (Imp) (9 Geo IV c 83), s 3. The common law principles of interpretation applicable to determining whether legislation manifests an intention that a decision or category of decisions not be quashed or otherwise reviewed are not static. As with other common law principles or so-called "canons" of statutory construction, they have contemporary interpretative utility to the extent that they are reflective and protective of stable and enduring structural principles or systemic values which can be taken to be respected by all arms of government. And as with other common law principles of statutory construction, they are not immune from The applicable principles, in my opinion, are no longer adequately captured in the all-encompassing aphorism that "recourse to the courts is not to be taken away except by clear words"81 or in some variation of that aphorism82. In relation to review of a purported exercise of decision-making authority on the basis of jurisdictional error, there is now no doubt that recourse to the Supreme Court cannot be taken away by statute even by the clearest of words83. In relation to review of an exercise or purported exercise of decision-making authority on the basis of error of law on the face of the record, which unquestionably can be taken away by statute84, our contemporary understanding of the nature and scope of judicial review demands some further revision. The approach most consonant with our contemporary understanding of the nature and scope of judicial review, in my opinion, is that the question whether recourse to the Supreme Court to obtain an order in the nature of certiorari on the basis of error of law on the face of the record of a decision or category of decisions has been taken away by statute should now be answered through the application of ordinary statutory and common law principles of interpretation unencumbered by any presumption that it has not. 80 Bropho v Western Australia (1990) 171 CLR 1 at 17-18; [1990] HCA 24. 81 Hockey v Yelland (1984) 157 CLR 124 at 130; [1984] HCA 72. 82 Eg Clancy v Butchers' Shop Employés Union (1904) 1 CLR 181 at 204; [1904] HCA 9; Public Service Association (SA) v Federated Clerks' Union (1991) 173 CLR 132 at 160; [1991] HCA 33. 83 Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 581 [100]; [2010] HCA 1; Public Service Association of South Australia Inc v Industrial Relations Commission (SA) (2012) 249 CLR 398 at 413 [30], 422-423 [62]-[63], 426-427 [73]-[74]; [2012] HCA 25. 84 Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 581 [100]; Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480 at 492 [26]; [2013] HCA Explaining why that should be so necessitates some reference to the expansion and decline of the writ of certiorari at common law during the course of the twentieth century. The forest of detail does not need to be traversed. Noticing the highs and the lows is enough. Historically, and until well into the twentieth century, certiorari was conceived of primarily as a writ issued by a superior court of general jurisdiction to an inferior court of record of special and limited jurisdiction. The writ "called up", or "removed", into the superior court the record of a proceeding in the inferior court. If the proceeding had not been concluded by judgment in the inferior court, the proceeding could be continued to judgment in the superior court. If the proceeding had been concluded by judgment or order in the inferior court, the judgment or order could be "quashed" by the superior court. The jurisdiction of the superior court so to quash the judgment or order of the inferior court the record of which the superior court had called up was capable of being exercised on either of two bases, which were distinct in concept but which were capable of overlapping in practice: one was jurisdictional error on the part of the inferior court, which could be established to the satisfaction of the superior court by evidence led in the superior court; the other was error of law on the part of the inferior court, which could only be established to the satisfaction of the superior court by the superior court's examination of the removed record85. Quashing the judgment or order of the inferior court expunged that judgment or order from the public record, so as to "remove [it] out of the way, as one which should not be used to the detriment of any [citizen]"86. In the case of a judgment or order affected by jurisdictional error, the expunging was of that which had in law always been "invalid", "void" or a "nullity"87. In the case of a judgment or order affected by a non-jurisdictional error of law on the face of the record, the expunging itself rendered void that which had previously been "voidable only"88. The inferior court in the latter case lacked jurisdiction to 85 See generally Ex parte Mullen; Re Hood (1935) 35 SR (NSW) 289 at 295-296; Halsbury's Laws of England, 2nd ed, vol 9 at 838-845 [1420]-[1432]. 86 Overseers of the Poor of Walsall v London and North Western Railway Co (1878) 4 App Cas 30 at 39. 87 Eg Baxter v New South Wales Clickers' Association (1909) 10 CLR 114 at 157; [1909] HCA 90. See now Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597; [2002] HCA 11. 88 Parisienne Basket Shoes Pty Ltd v Whyte (1938) 59 CLR 369 at 391-392; [1938] HCA 7. remake the quashed order: its jurisdiction had been duly exercised and, having been duly exercised, its jurisdiction was spent89. During the nineteenth century90 and increasingly during the first half of the twentieth century91, certiorari came to be recognised as available at common law to enable a superior court to call up and to quash the public record of a purported exercise of statutory decision-making authority by a person or body that was not a court of record where it could be shown that the person or body had acted in excess of their statutory authority. That can be seen, at least with hindsight, to have accorded with the practice of the Court of King's Bench established at the beginning of the eighteenth century when it was said92: "[T]his Court will examine the proceedings of all jurisdictions erected by Act of Parliament. And if they, under pretence of such Act, proceed to incroach jurisdiction to themselves greater than the Act warrants, this Court will send a certiorari to them, to have their proceedings returned here; to the end that this Court may see, that they keep themselves within their jurisdiction: and if they exceed it, to restrain them." Of course, any repository of statutory decision-making authority might be shown to have committed a legal error which had the effect of causing the repository to act in excess of, or alternatively to fail to exercise, that authority. For example, an erroneous view of the law might have led the repository to consider and determine a question different from the question which the repository was statutorily authorised to consider and determine, to fail to take into account some statutorily mandated consideration or to take into account some statutorily impermissible consideration. Where an error of law could be shown to have led the repository of statutory decision-making authority into a jurisdictional error of that or some other kind, a purported decision made outside 89 Platz v Osborne (1943) 68 CLR 133 at 148; [1943] HCA 39. See also Overseers of the Poor of Walsall v London and North Western Railway Co (1878) 4 App Cas 30 90 See Evans v Donaldson (1909) 9 CLR 140 at 150-151, 156-157; [1909] HCA 46. See generally Stebbings, Legal Foundations of Tribunals in Nineteenth-Century England, (2006) at 254-258. 91 See R v Commissioner of Patents; Ex parte Weiss (1939) 61 CLR 240 at 251-252, 258; [1939] HCA 7. 92 R v Inhabitants in Glamorganshire (1700) 1 Ld Raym 580 at 580 [91 ER 1287 at 1288]. See generally Jaffe and Henderson, "Judicial Review and the Rule of Law: Historical Origins", (1956) 72 Law Quarterly Review 345 at 358-359, 362-364. of the decision-making authority could be quashed by a writ of certiorari93, enforcement of that purported decision could in any event be restrained by a writ of prohibition94, and performance of any statutory duty on the part of the repository to exercise the decision-making authority which in law remained unperformed could be compelled by a writ of mandamus95. Before 1950, however, no one (or at least no judge deciding any reported case for some centuries) appears to have thought that the writ of certiorari was available at common law to be used by a superior court to quash, for non- jurisdictional error on its face, the public record of a decision of a person or body that was not an inferior court of record. Even in a case of an inferior court of record, the availability of the writ in a case of non-jurisdictional error on the face of the record was conceived of in very limited terms. That was in part, but only in part, because statutory reforms a century before had reduced the size of the writ's target by cutting back on much of what an inferior court had previously been required to write down with the result that there was little opportunity for the record of the inferior court to disclose legal error96. The inferior court also needed to be one the record of which the superior court was not disentitled from calling up; with the result that certiorari would not be available to quash for non- jurisdictional error a decision of an inferior court of record where a statutory provision was expressed to prevent removal of the record of that inferior court97. Much more significantly, the jurisdiction which the inferior court had exercised in making the decision needed to be one which the superior court was itself capable of exercising on the merits; with the result that certiorari would not be available to quash for non-jurisdictional error on the face of the record a decision 93 Eg Boulus v Broken Hill Theatres Pty Ltd (1949) 78 CLR 177 at 191-192, 196; [1949] HCA 8; Potter v Melbourne and Metropolitan Tramways Board (1957) 98 CLR 337 at 343-344; [1957] HCA 43. 94 R v Hickman; Ex parte Fox and Clinton (1945) 70 CLR 598 at 606; [1945] HCA 95 R v War Pensions Entitlement Appeal Tribunal; Ex parte Bott (1933) 50 CLR 228 at 242-243; [1933] HCA 30; Ex parte Belling; Re Woollahra Council (1946) 47 SR (NSW) 166 at 169-170; Ex parte Hebburn Ltd; Re Kearsley Shire Council (1947) 47 SR (NSW) 416 at 420. 96 See generally Ex parte Lovell; Re Buckley (1938) 38 SR (NSW) 153 at 166-170. 97 Ex parte Blackwell; Re Hateley [1965] NSWR 1061 at 1063-1065; Spanos v Lazaris [2008] NSWCA 74 at [15]. made by an inferior court in the exercise of a special jurisdiction statutorily conferred exclusively on that court98. What occurred in 1950 can be seen in retrospect to have been an early and, on the whole, unsuccessful judicial attempt to adapt the ancient writ to grapple with the rise of the administrative state. What then occurred was that a Divisional Court of the King's Bench Division of the English High Court of Justice held for the first time (or at least for the first time in several centuries) that certiorari was available to remove a "speaking order" made by a statutory tribunal into the High Court of Justice, there to be quashed for error of law on the face of the record irrespective of whether the error was one which had resulted in the tribunal having exceeded or failed to exercise its statutory jurisdiction99. The holding of the Divisional Court was upheld by the English Court of Appeal100. Coming at a time when it was still thought generally to be "better that this Court should conform to English decisions which we think have settled the general law in that jurisdiction than that we should be insistent on adhering to reasoning which we believe to be right but which will create diversity in the development of legal principle"101, the holding of the Court of Appeal that certiorari was available to quash a decision of a statutory tribunal affected by non-jurisdictional error of law was uncritically accepted in this Court102. That 98 Ex parte Mullen; Re Hood (1935) 35 SR (NSW) 289 at 295-296, 301-302, affirmed in Mullen v Hood (1935) 54 CLR 35; [1935] HCA 67. See also Halsbury's Laws of England, 2nd ed, vol 9 at 854 [1446]. 99 R v Northumberland Compensation Appeal Tribunal; Ex parte Shaw [1951] 1 KB 100 R v Northumberland Compensation Appeal Tribunal; Ex parte Shaw [1952] 1 KB 101 Wright v Wright (1948) 77 CLR 191 at 210; [1948] HCA 33. 102 R v The District Court; Ex parte White (1966) 116 CLR 644 at 655-656; [1966] HCA 69; Minister for Works (WA) v Civil and Civic Pty Ltd (1967) 116 CLR 273 at 284; [1967] HCA 18; Gold Coast City Council v Canterbury Pipe Lines (Aust) Pty Ltd (1968) 118 CLR 58 at 76-77; [1968] HCA 3; Benggong v Bougainville Copper Pty Ltd (1971) 124 CLR 47 at 55, 56, 58-59; [1971] HCA 31; Houssein v Under Secretary of Industrial Relations and Technology (NSW) (1982) 148 CLR 88 at 91-92; [1982] HCA 2; Hockey v Yelland (1984) 157 CLR 124 at 130, 139, acceptance heralded a belated and somewhat tentative expansion by intermediate courts of appeal of the availability of certiorari at common law in Australia103. The expanded view of the availability of certiorari for non-jurisdictional error of law on the face of the record gave rise to a number of interrelated difficulties. Practical difficulties lay in identifying a satisfactory criterion by reference to which the record (or "quasi-record") of a repository of power not constituted as a court of record was to be identified, and in working out what more could or should be done by a repository whose valid decision had been quashed. Conceptual difficulties lay in explaining just how the common law could operate to invalidate an exercise of power that fell within the scope of an authority conferred by statute other than perhaps as an implied exception to the scope of that authority104, and in coming up with a rational justification for distinguishing between the consequences of those non-jurisdictional errors of law which happened to find reflection in some document which could be accepted to form part of the record and those non-jurisdictional errors of law which did not105. The last of those difficulties was exacerbated by the acknowledged absence of any common law duty to give reasons for making an administrative decision, let alone to make and keep some sort of record of the process of reasoning which led to the making of such a decision106. None of those difficulties had been resolved in the case law in England before the availability of certiorari for error of law on the face of an administrative record was for most, if not all, practical purposes seen to be superseded there by a decision of the House of Lords in 1968 which expanded the notion of jurisdictional error to include most, if not all, errors of law committed by an administrator107. Coming at a time when decisions of the House of Lords had ceased to attract uncritical acceptance in Australia108, this Court 103 See generally Commissioner for Motor Transport v Kirkpatrick (1988) 13 NSWLR 368 at 388-393; Kriticos v New South Wales (1996) 40 NSWLR 297 at 299-301. 104 Cf Minister for Works (WA) v Civil and Civic Pty Ltd (1967) 116 CLR 273 at 284. 105 Sawer, "Error of Law on the Face of an Administrative Record", (1954-1956) 3 University of Western Australia Annual Law Review 24 at 33-35. 106 See Public Service Board of NSW v Osmond (1986) 159 CLR 656; [1986] HCA 7. 107 Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147. See R v Hull University Visitor; Ex parte Page [1993] AC 682 at 701-702; Boddington v British Transport Police [1999] 2 AC 143 at 154. 108 Parker v The Queen (1963) 111 CLR 610 at 632-633; [1963] HCA 14; Australian Consolidated Press Ltd v Uren (1967) 117 CLR 221 at 238; [1969] 1 AC 590 at continued afterwards steadfastly to refuse to accept that all errors of law were jurisdictional109. This Court nevertheless itself embraced a significant expansion of the notion of jurisdictional error some 20 years later. The turning-point was Attorney-General (NSW) v Quin110. In the course of giving reasons for allowing an appeal against an order of the Court of Appeal of the Supreme Court of New South Wales, which order had been sought to be justified as an exercise of the Supreme Court's supervisory jurisdiction, Brennan J there formulated the principle that "[t]he duty and jurisdiction of the court to review administrative action do not go beyond the declaration and enforcing of the law which determines the limits and governs the exercise of the repository's power"111. His Honour added that "[i]n Australia, the modern development and expansion of the law of judicial review of administrative action have been achieved by an increasingly sophisticated exposition of implied limitations on the extent or the exercise of statutory power"112. His Honour went on to explain both reasonableness113 and procedural fairness114 as within the category of limitations on the exercise of a statutory power that are ordinarily implied. Ten years after Quin, in Enfield City Corporation v Development Assessment Commission115, Gleeson CJ, Gummow, Kirby and Hayne JJ explained the principle formulated by Brennan J as encapsulating "[t]he fundamental consideration in this field of discourse"116. That fundamental consideration, their Honours noted, had been expressed in terms that "there is in our society a profound, tradition-taught reliance on the courts as the ultimate guardian and assurance of the limits set upon [administrative] power by the constitutions and legislatures" and that, although "there has never been a pervasive notion that limited government mandated an all-encompassing judicial 109 Eg Houssein v Under Secretary of Industrial Relations and Technology (NSW) (1982) 148 CLR 88 at 92-95; Hockey v Yelland (1984) 157 CLR 124 at 130. 110 (1990) 170 CLR 1; [1990] HCA 21. 111 (1990) 170 CLR 1 at 35-36. 112 (1990) 170 CLR 1 at 36. 113 (1990) 170 CLR 1 at 36. 114 (1990) 170 CLR 1 at 39-40. 115 (2000) 199 CLR 135; [2000] HCA 5. 116 (2000) 199 CLR 135 at 152 [43]. duty to supply all of the relevant meaning of statutes", "the judicial duty is to ensure that [an] administrative agency stays within the zone of discretion committed to it by its organic act"117. To similar effect, Gaudron J referred in Enfield to the imperative for courts "within the limits of their jurisdiction and consistent with their obligation to act judicially" to "provide whatever remedies are available and appropriate to ensure that those possessed of executive and administrative powers exercise them only in accordance with the laws which govern their exercise"118. In the meantime, in Craig v South Australia119, in the course of examining the contemporary scope of certiorari at common law for error of law on the part of an inferior court of record, Brennan, Deane, Toohey, Gaudron and McHugh JJ drew a critical distinction between a statutory conferral of decision-making authority on a court and a statutory conferral of decision-making authority on a person or body other than a court. The distinction then drawn was that "the ordinary jurisdiction of a court of law encompasses authority to decide questions of law, as well as questions of fact, involved in matters which it has jurisdiction to determine" whereas "[a]t least in the absence of a contrary intent in the statute or other instrument which established it, an administrative tribunal lacks authority either to authoritatively determine questions of law or to make an order or decision otherwise than in accordance with the law"120. Their Honours adopted as expressive of the position in Australia the following statement of Lord Diplock in In re Racal Communications Ltd121: "Parliament can, of course, if it so desires, confer upon administrative tribunals or authorities power to decide questions of law as well as questions of fact or of administrative policy; but this requires clear words, for the presumption is that where a decision-making power is conferred on a tribunal or authority that is not a court of law, Parliament did not intend to do so." 117 (2000) 199 CLR 135 at 153 [43], quoting Monaghan, "Marbury and the Administrative State", (1983) 83 Columbia Law Review 1 at 32-33. 118 (2000) 199 CLR 135 at 157 [56]. 119 (1995) 184 CLR 163; [1995] HCA 58. 120 (1995) 184 CLR 163 at 179. See also Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at 351 [82]; [2001] HCA 30; Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 572-573 [68]-[70]. 121 [1981] AC 374 at 383, quoted in Craig v South Australia (1995) 184 CLR 163 at The common law presumption of statutory interpretation that has come to be adopted in Australia can therefore be stated as being that a statutory conferral of decision-making authority on a person or body other than a court is conditioned by an implied statutory requirement that the person or body can validly exercise that authority only on a correct understanding of the law applicable to the decision to be made. The presumption is similar in concept and in operation to the common law presumptions of statutory interpretation which support statutory implication of conditions of reasonableness122 and procedural fairness123. Absent "exclusion by plain words of necessary intendment", the repository of a statutorily conferred decision-making authority "must proceed by reference to correct legal principles, correctly applied"124. To proceed otherwise is for the repository to proceed in contravention of a limitation on the decision-making authority impliedly imposed by the legislature – to commit a jurisdictional error. In light of the Quin explanation of the foundation and extent of the jurisdiction exercised by a court engaged in judicial review of non-judicial action, preservation of a discrete jurisdiction on the part of a superior court to issue certiorari to quash for non-jurisdictional error of law has fairly been referred to as "anomalous"125. The continuing concurrent existence of such a jurisdiction to quash for non-jurisdictional error of law on the face of the record the decision of a person or body that is not a court of record might be described, in the same terms used to describe the lingering existence of a not dissimilar jurisdiction at common law to quash an arbitral award for error of law on the face of the award, as an "accident of legal history"126. Perhaps more accurately, it 122 Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at 349 [24], 351 [29], 362 [63], 370-371 [88]-[90]; [2013] HCA 18. 123 Plaintiff M61/2010E v The Commonwealth (2010) 243 CLR 319 at 353-354 [77]; [2010] HCA 41; Plaintiff S10/2011 v Minister for Immigration and Citizenship (2012) 246 CLR 636 at 658-659 [66], 666 [97]; [2012] HCA 31; Minister for Immigration and Border Protection v SZSSJ (2016) 259 CLR 180 at 205 [75]; [2016] HCA 29. 124 Plaintiff M61/2010E v The Commonwealth (2010) 243 CLR 319 at 354 [78]. 125 Re McBain; Ex parte Australian Catholic Bishops Conference (2002) 209 CLR 372 at 470 [276]; [2002] HCA 16. 126 Max Cooper & Sons Pty Ltd v University of New South Wales [1979] 2 NSWLR 257 at 262. See also TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 533 at 556-557 [36]-[39]; [2013] HCA 5. Cf R v Northumberland Compensation Appeal Tribunal; Ex parte Shaw [1951] (Footnote continues on next page) might be described as the aftermath of a failed mid-twentieth century experiment of the common law. If it is not yet to be buried, it is certainly not now to be exalted. To persist in light of the common law presumption of statutory interpretation that a statutory conferral of decision-making authority on a person or body other than a court does not encompass authority to decide a question of law, or to make a decision otherwise than on a correct understanding of the applicable law, with another common law presumption of statutory interpretation that certiorari for error of law on the face of the record is available to quash the decisions of that person or body would at best be supererogation and at worst be conducive of incoherence. It is one thing to accept, where there is an affirmative statutory indication that the decision of a particular repository of statutory power is susceptible of being quashed for error of law on the face of the record, that an order in the nature of certiorari can issue to quash the decision where a material error of law is found on the face of the record without need to consider whether or not that error of law also amounts to a jurisdictional error127. It is quite another thing to assert, where there is an affirmative statutory indication that the decision-making authority conferred on a particular repository of statutory power encompasses authority to decide a question of law, or to make a decision otherwise than on a correct understanding of the applicable law, that the resultant decision is nevertheless susceptible of being quashed by certiorari for error of law on the face of the record unless there is some further affirmative statutory indication that certiorari is not available to be issued on that basis. In the case of a statutory conferral of decision-making authority on a person or body other than a court, no further affirmative indication of an intention to exclude certiorari is required. The present case is an illustration of that point. Probuild conceded before the Court of Appeal and in its appeal to this Court that the error of law made by the adjudicator in the interpretation of the construction contract was a non- jurisdictional error. Probuild's concession was undoubtedly correct. The authority that s 22(1) of the Security of Payment Act confers on an adjudicator to determine the amount and timing of a progress payment is an authority to determine (in the event of the recovery procedure prescribed in Pt 3 being regularly invoked) the amount and timing of a progress payment a statutory entitlement to which exists 1 KB 711 at 721-722; R v Northumberland Compensation Appeal Tribunal; Ex parte Shaw [1952] 1 KB 338 at 351. 127 See Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480 at 491-494 by operation of s 8 separately and in parallel to such common law or other statutory rights as the parties to the construction contract may have under or in respect of that contract. The adjudicator's making of the determination is explicitly conditioned by the requirement of s 22(2) which is expressed in terms no higher than that the adjudicator "is to consider" enumerated "matters", one of which is "the provisions of the construction contract". The adjudicator's authority to make the determination is required by s 21 to be exercised "as expeditiously as possible", and in any event within no more than ten business days of the adjudicator notifying the parties of his or her acceptance of the application, and without the parties having an entitlement to legal representation in any conference which the adjudicator might choose to call. If the adjudicated amount is not promptly paid, a certificate of the determination is then permitted by s 25 to be filed as a judgment for a debt in any court of competent jurisdiction and to be enforced accordingly without the adjudicator's determination being able to be challenged in any proceeding to have the judgment set aside. The principal statutory object stated in s 3(1), to ensure that a person undertaking to carry out construction work under a construction contract "is entitled to receive, and is able to recover, progress payments in relation to the carrying out of that work", would be thwarted were mere error of law made by the adjudicator in the interpretation of the contract to vitiate the determination and thereby to render it liable to be quashed or declared invalid by the Supreme Court. But it is important to be clear about exactly what Probuild's concession necessarily involved. The concession involved acceptance that, despite the common law presumption that a statutory conferral of decision-making authority on a person or body other than a court is impliedly conditioned by a requirement that the authority be exercised only on a correct understanding of the applicable law, the textual and contextual indications are sufficiently strong to compel the conclusion that s 22(1) is properly interpreted within the totality of the statutory scheme of which it forms part as conferring authority on an adjudicator to make a determination based on the adjudicator's own interpretation of the construction contract irrespective of whether that interpretation be right or wrong in law. The concession also involved acceptance that s 22(1) confers that authority even though s 22(3) requires the determination made in the exercise of that authority to be in writing, and to include the adjudicator's reasons for the determination unless both parties have requested the contrary. The statutory scheme would be internally contradictory, and the authority granted to the adjudicator to go wrong in law would be illusory, were the determination made by the adjudicator validly in the exercise of the authority conferred by s 22(1) susceptible of being quashed by an order in the nature of certiorari in every case where the adjudicator in fact went wrong in law on the basis of an error of law appearing in the reasons for the determination on the face of a record which the adjudicator is statutorily obliged to create under s 22(3). That s 22(1) is properly interpreted as conferring authority on an adjudicator to make a determination notwithstanding that the determination is based on a legally erroneous interpretation of a construction contract, in my opinion, necessarily entails that s 22(1) is properly interpreted as ensuring that the adjudicator's misinterpretation provides no basis on which the determination is susceptible of being quashed or otherwise reviewed. The general supervisory jurisdiction of the Supreme Court to make an order in the nature of certiorari for error of law on the face of the record is displaced by the affirmative conferral of decision-making authority to err in law. Edelman Summary of the history and principles underlying this appeal For centuries, common law courts engaged in a power struggle with Parliaments over the meaning to be given to clauses that purported to restrict judicial review for errors made by a decision maker. Privative clauses that purported to exclude or to restrict judicial review were construed narrowly by the courts, even when doing so would deprive the clause of any effect128, and even when it could be said that there was no doubt that the legislative intention was to impose serious restrictions upon judicial review129. A détente emerged whereby that narrow approach to construction of privative clauses became a "working hypothesis ... known both to Parliament and the courts"130. A narrow approach to construction of privative clauses has always been applied whether or not the errors that the clauses purported to exclude were "jurisdictional" errors131 or, as in many cases, "non-jurisdictional" errors of law on the face of the record132. In other words, a narrow approach to construction was taken whether or not the errors concerned the decision maker's authority to make the decision. For hundreds of years the rationale for the narrow approach 128 R v Medical Appeal Tribunal; Ex parte Gilmore [1957] 1 QB 574 at 589. 129 Wade, "Constitutional and Administrative Aspects of the Anisminic Case", (1969) 85 Law Quarterly Review 198 at 199-200. 130 Electrolux Home Products Pty Ltd v Australian Workers' Union (2004) 221 CLR 309 at 329 [21] per Gleeson CJ; [2004] HCA 40; Lee v New South Wales Crime Commission (2013) 251 CLR 196 at 264 [171] per Kiefel J, 310 [312] per Gageler and Keane JJ; [2013] HCA 39. 131 R v Justices of Somersetshire (1826) 5 B & C 816 [108 ER 303]; R v Cheltenham Commissioners (1841) 1 QB 467 [113 ER 1211]; R v Wood (1855) 5 El & Bl 49 [119 ER 400]; Colonial Bank of Australasia v Willan (1874) LR 5 PC 417 at 442; Ex parte Bradlaugh (1878) 3 QBD 509. 132 See R v Plowright (1685) 3 Mod 94 [87 ER 60]; Taylor (formerly Kraupl) v National Assistance Board [1957] 2 WLR 189 at 193; [1957] 1 All ER 183 at 185; R v Medical Appeal Tribunal; Ex parte Gilmore [1957] 1 QB 574 at 588-589. See also Rubinstein, Jurisdiction and Illegality: A Study in Public Law, (1965) at 85. Edelman has been said133, in terms reiterated by this Court134, to be the protection of a person's freedom of access to the courts to correct legal errors. The rationale for the narrow approach has great force when applied to jurisdictional errors. An exclusion entirely of review on the basis of jurisdictional error could, in effect, allow the decision maker to assert unrestrained power135, which would almost never be the intention of the legislature. Indeed, the potential for the creation of "islands of power immune from supervision and restraint" was one reason why this Court, in 2010, said that it would be beyond State legislative power wholly to exclude judicial review for In contrast with privative clauses that purport to exclude review for jurisdictional error, those clauses that purport to exclude review for non- jurisdictional error do not create islands of unreviewable power. Instead, they preclude an assessment of whether a decision, made with authority, is "regular and according to law"137. In these cases the privative clause excludes review of the legality of the process of exercising power rather than the authority for the exercise of power. The rationale for a narrow approach to construction therefore applies with less force. The narrow approach was also, historically, an approach that was sometimes contrary to the intention of Parliament. Nevertheless, the narrow approach became an accepted approach and is today one of the working hypotheses upon which legislation is drafted. It is sometimes described as part of the principle of legality in the construction of legislation. The concept of "legality", in the principle of legality, must embrace the determination of whether decisions made with authority are legal – that is, whether they are made by a process that accords with the law: "[t]he rule of law and the ability to have 133 R v Jukes (1800) 8 TR 542 at 544-545 per Lord Kenyon CJ [101 ER 1536 at 1538]; Shaftesbury v Russell (1823) 3 Dow & Ry KB 84 at 91-92 per Bayley J; R (on the application of Privacy International) v Investigatory Powers Tribunal [2017] EWCA Civ 1868 at [19] per Sales LJ (Flaux and Floyd LJJ agreeing). 134 Hockey v Yelland (1984) 157 CLR 124 at 130 per Gibbs CJ (Brennan and Dawson JJ agreeing), 142 per Wilson J (Dawson J agreeing); [1984] HCA 72; Jamieson v The Queen (1993) 177 CLR 574 at 596 per Gaudron J; [1993] HCA 48; Darling Casino Ltd v NSW Casino Control Authority (1997) 191 CLR 602 at 633 per Gaudron and Gummow JJ; [1997] HCA 11. 135 Ex parte Bradlaugh (1878) 3 QBD 509 at 513 per Mellor J. 136 Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 581 [99]-[100]; [2010] HCA 137 R v Bolton (1841) 1 QB 66 at 72 per Lord Denman CJ [113 ER 1054 at 1057]. Edelman access to a court or tribunal to rule upon legal claims constitute principles of this fundamental character"138. Therefore, absent irresistible clarity, a construction will not be adopted which departs from the "general system of law" permitting review of authorised decisions for legal errors139. The appellant relied heavily upon the narrow approach to construction based upon the principle of legality. There was no dispute about the existence of the narrow approach to construction, which has supported the access of people to the courts to correct legal error for nearly four centuries. The principal issue in submissions was whether the narrow approach permits a construction of the Building and Construction Industry Security of Payment Act 1999 (NSW) ("the Security of Payment Act") that excludes judicial review for non-jurisdictional error of law. The appellant submitted that, since the Security of Payment Act contains no express privative clause excluding review for any error of law, the power of the court to review a decision under that Act for error of law could only be excluded by implication. The appellant then submitted, correctly, that an application of the narrow approach to construction of an express privative clause requires, at least, the same approach where a statute is said to contain a privative clause by implication. If the narrow approach to construction were to apply with its usual force to the Security of Payment Act then it must be concluded that the Security of Payment Act had not excluded review for non-jurisdictional error of law. Even assuming, contrary to some older authorities, that the narrow approach permits legislation to abolish review for non-jurisdictional error of law merely by implication based upon a background assumption of the legislation, the narrow approach would not permit that implication in this case. This is particularly because the rules concerning the discretion to issue a writ of certiorari to quash a decision mean that the Security of Payment Act can operate without the exclusion of review for non-jurisdictional error of law. However, for the reasons below, I consider that the narrow approach to construction applies with very little force to legislation in the nature of the Security of Payment Act, which requires an adjudicator to determine parties' rights but, in effect, only on an interim basis. 138 R (on the application of Privacy International) v Investigatory Powers Tribunal [2017] EWCA Civ 1868 at [21] per Sales LJ (Flaux and Floyd LJJ agreeing). 139 Electrolux Home Products Pty Ltd v Australian Workers' Union (2004) 221 CLR 309 at 329 [21] per Gleeson CJ; Lee v New South Wales Crime Commission (2013) 251 CLR 196 at 264 [171] per Kiefel J, 307-308 [307]-[308] per Gageler and Edelman For that reason, there should be little constraint on the ordinary rules of construction, with the effect that the appeal should be dismissed. Non-jurisdictional error and the narrow construction principle From the use of modern certiorari for errors of law in the 17th century140, and through the 18th and 19th centuries, courts rarely drew any clear or logical distinction between an error of law that was jurisdictional and one that was not141 although, confusingly to modern eyes, the phrase "excess of jurisdiction" was sometimes used in contrast with "want of jurisdiction" to describe errors that were made within jurisdiction142. Further, although certiorari initially only issued to a court of record, by the beginning of the tribunal movement in the early 19th century that requirement was transformed into one only for the existence of a record143. No distinction was drawn between the review of a decision that would today be recognised as being "administrative" and one that would today be regarded as "judicial"144. Justices of the peace, numbering in the thousands, commonly made both types of decision145. Indeed, Maitland described local government as "government by justices of the peace"146 and Jaffe and Henderson described them as the "administrators of England"147. As Vaughan Williams LJ 140 Henderson, Foundations of English Administrative Law: Mandamus in the Seventeenth Century, (1963) at 109. 141 Sawer, "Error of Law on the Face of an Administrative Record", (1954-1956) 3 University of Western Australia Annual Law Review 24 at 34-35. See also R (Cart) v Upper Tribunal [2012] 1 AC 663 at 683 [40] per Baroness Hale of Richmond JSC. 142 Rubinstein, Jurisdiction and Illegality: A Study in Public Law, (1965) at 66-69, explaining Groenvelt v Burwell (1700) 1 Ld Raym 454 [91 ER 1202] (also reported as Grenville v The College of Physicians (1700) 12 Mod 386 [88 ER 1398]). 143 Stebbings, Legal Foundations of Tribunals in Nineteenth-Century England, (2006) 144 Stebbings, Legal Foundations of Tribunals in Nineteenth-Century England, (2006) 145 Dawson, A History of Lay Judges, (1960) at 142-145. 146 Maitland, "The Shallows and Silences of Real Life", in Fisher (ed), The Collected Papers of Frederic William Maitland, (1911), vol 1, 467 at 468. 147 Jaffe and Henderson, "Judicial Review and the Rule of Law: Historical Origins", (1956) 72 Law Quarterly Review 345 at 363. Edelman explained, "in practice a certiorari ... issued in cases in which it is impossible to say that there was a Court and a 'lis.'"148 Nor was any distinction drawn between whether the decision in respect of which certiorari was sought was made by a justice or whether it was made by members of a statutory tribunal. Examples of tribunals to which certiorari was issued were the Commissioners of Sewers149, the College of Physicians and the Commissioners for the repair of Cardiff Bridge150, the General Commissioners for Income Tax151, and there was also an analogous jurisdiction over arbitral tribunals where the concept of error of law on the face of the award also had a "long history"152. Nevertheless, there were some consequences arising from the weaker force with which the rationale for the narrow construction principle applied to non-jurisdictional errors. In England, those consequences have now reduced to vanishing point since the vast expansion of the concept of jurisdictional error to include all material errors of law153. In contrast, in Australia the distinctions have been magnified by the sharp difference in effect between jurisdictional and non- jurisdictional error. The first consequence of a difference between jurisdictional and non- jurisdictional errors, as those concepts were then applied, arose in the middle of the 18th century when courts began to allow affidavit evidence to show an error 148 R v Woodhouse [1906] 2 KB 501 at 513. 149 Although, exceptionally, a court of record, it was also "a full-scale 'administrative' organ": Jaffe and Henderson, "Judicial Review and the Rule of Law: Historical Origins", (1956) 72 Law Quarterly Review 345 at 349. 150 R v Northumberland Compensation Appeal Tribunal; Ex parte Shaw [1952] 1 KB 338 at 350 per Denning LJ. 151 R v Commissioners of Income Tax for City of London; Ex parte Commissioners of Inland Revenue (1904) 91 LT 94 at 97 per Lord Alverstone CJ; Stebbings, "The origins of the application of certiorari to the General Commissioners of Income Tax", (1997) British Tax Review 119. 152 Westport Insurance Corporation v Gordian Runoff Ltd (2011) 244 CLR 239 at 264 [32] per French CJ, Gummow, Crennan and Bell JJ; [2011] HCA 37. See Kent v Elstob (1802) 3 East 18 [102 ER 502]; Hodgkinson v Fernie (1857) 3 CB (NS) 189 [140 ER 712]; In re Jones and Carter's Arbitration [1922] 2 Ch 599. 153 Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147, as explained in R v Hull University Visitor; Ex parte Page [1993] AC 682 at 701-702 per Lord Browne-Wilkinson. See also R (Cart) v Upper Tribunal [2012] 1 AC 663 at 683 [39] per Baroness Hale of Richmond JSC, 702 [110] per Lord Dyson JSC. Edelman of law in the proceedings. Probably for pragmatic reasons, affidavit evidence came to be permitted only to show jurisdictional errors154, leaving non- jurisdictional errors of law to be shown by reference only to the record. However, the classification of an error as jurisdictional was often functional based upon whether the judge wished to admit the affidavit evidence155. Further, as the leading 19th century decision in R v Bolton156 shows, the classification of errors as jurisdictional proceeded by a different approach from that which is taken in Australia today157. A second consequence of the distinction between jurisdictional and non- jurisdictional error was the weaker force of the narrow construction principle in cases of non-jurisdictional error. A carefully drafted privative clause could prevent review for non-jurisdictional error even if it could not do so for jurisdictional error. Hence, a "no certiorari" clause could be effective to exclude non-jurisdictional errors158 even if it was ineffective to exclude jurisdictional errors159. Although its force was weaker, a narrow approach was nevertheless still taken to the construction of clauses that purported to exclude non- jurisdictional errors. For instance, a "finality" clause was not effective to exclude 154 R v Wakefield (1758) 1 Burr 485 [97 ER 417]; Jaffe, "Judicial Review: Constitutional and Jurisdictional Fact", (1957) 70 Harvard Law Review 953 at 958. 155 Murray, "Process, Substance and the History of Error of Law Review", in Bell et al (eds), Public Law Adjudication in Common Law Systems: Process and Substance, 156 (1841) 1 QB 66 [113 ER 1054]. 157 Graham v Minister for Immigration and Border Protection (2017) 91 ALJR 890 at 916 [113]; 347 ALR 350 at 380; [2017] HCA 33. See also Rubinstein, Jurisdiction and Illegality: A Study in Public Law, (1965) at 69. 158 Ex parte Hopwood (1850) 15 QB 121 [117 ER 404]; R v Badger (1856) 6 El & Bl 137 at 154, 162-163, 167 [119 ER 816 at 822, 825, 827]; R v The Board of Works for the District of St Olave's, Southwark (1857) 8 El & Bl 529 [120 ER 198]. 159 R v Justices of Somersetshire (1826) 5 B & C 816 [108 ER 303]; R v Cheltenham Commissioners (1841) 1 QB 467 [113 ER 1211]; R v Wood (1855) 5 El & Bl 49 [119 ER 400]; Colonial Bank of Australasia v Willan (1874) LR 5 PC 417 at 442; Ex parte Bradlaugh (1878) 3 QBD 509; New Zealand Waterside Workers' Federation Industrial Association of Workers v Frazer [1924] NZLR 689 at 702 per Salmond J; R v Foster; Ex parte Isaacs [1941] VLR 77 at 82; R v Industrial Appeals Court; Ex parte Henry Berry & Co (Australasia) Ltd [1955] VLR 156 at 162-163; R v Medical Appeal Tribunal; Ex parte Gilmore [1957] 1 QB 574 at 588. Edelman review for any error of law160 and many courts insisted that their power to grant a writ of certiorari for any error of law, jurisdictional or non-jurisdictional, could not be removed merely by inference from words used, however plain the inference might have been161. Exclusion was said to require express words162. The use of a writ of certiorari to quash a non-jurisdictional error of law almost declined into desuetude by the 20th century. One reason for this was that the inability to rely upon affidavit evidence meant that non-jurisdictional error was entirely dependent upon the court record163 but legislative restraints, exemplified by the Summary Jurisdiction Act 1848164, had removed much of the record from the purview of review165. By 1943, nearly a century after the Summary Jurisdiction Act, Lord Greene MR said that he could find "no trace of any exercise" of the jurisdiction to order certiorari for an error of law within jurisdiction166. However, this decision was overturned as per incuriam, and the previously long-established judicial review for non-jurisdictional error of law 160 R v Plowright (1685) 3 Mod 94 [87 ER 60]; R v Reeve (1760) 1 Black W 231 [96 ER 127]; R v Moreley (1760) 2 Burr 1040 [97 ER 696]; R v Jukes (1800) 8 TR 542 [101 ER 1536]; R v Nat Bell Liquors Ltd [1922] 2 AC 128 at 159-160. 161 Tyrwhitt, Dickinson's Guide to the Quarter Sessions, 6th ed (1845) at 948-949, 950; Hawkins, A Treatise of the Pleas of the Crown: Or a System of the Principal Matters relating to that Subject, digested under their proper Heads, (1721), bk 2 at 162 See, eg, Smith's Case (1670) 1 Mod 44 at 45 [86 ER 719 at 720]; R v Reeve (1760) 1 Black W 231 at 233 [96 ER 127 at 128]; R v Moreley (1760) 2 Burr 1040 at 1042 [97 ER 696 at 697]; R v Jukes (1800) 8 TR 542 at 544-545 [101 ER 1536 at 1538]; R v Hanson (1821) 4 B & Ald 519 at 521 [106 ER 1027 at 1028]; R v The Trustees of the Norwich and Watton Road (1836) 5 Ad & E 563 at 579-580 [111 ER 1278 at 1284]; Symonds v Dimsdale (1848) 2 Ex 533 at 537 [154 ER 603 at 604-605]; R v Brier (1850) 14 QB 568 at 571 [117 ER 219 at 220]; R v The Inhabitants of Sandon (1854) 3 El & Bl 547 at 548 [118 ER 1247 at 1247]; R v Hunt (1856) 6 El & Bl 408 at 411, 414 [119 ER 918 at 919-920]; Furtado v City of London Brewery Co [1914] 1 KB 709 at 712; R v Nat Bell Liquors Ltd [1922] 2 AC 128 at 162. 163 R v Northumberland Compensation Appeal Tribunal; Ex parte Shaw [1952] 1 KB 338; Craig v South Australia (1995) 184 CLR 163; [1995] HCA 58. 164 11 & 12 Vict c 43. 165 But cf Graham v Minister for Immigration and Border Protection (2017) 91 ALJR 890; 347 ALR 350. 166 Racecourse Betting Control Board v Secretary for Air [1944] Ch 114 at 120. Edelman was revived, in R v Northumberland Compensation Appeal Tribunal; Ex parte Shaw167. Importantly, the decision in "Northumberland Compensation Appeal Tribunal no more changed the general law of certiorari than [R v Bolton] did"168. After the decision in Northumberland Compensation Appeal Tribunal the courts re-applied the same, long-standing, narrow approach to construction of privative clauses that purported to exclude review of non-jurisdictional errors. In 1957, in R v Medical Appeal Tribunal; Ex parte Gilmore169 Denning LJ reiterated the approach taken by the courts for nearly 350 years where the courts refused to treat a "finality" clause as excluding certiorari for any error of law because "the remedy by certiorari is never to be taken away by any statute except by the most clear and explicit words"170. As Professor Wade expressed the point after that decision, in the first edition of his text, the approach was based upon the natural hostility to any attempt to "legalize illegalities and exempt them from judicial control"171. Following the decision in Northumberland Compensation Appeal Tribunal, this Court continued to treat "finality" clauses for non-jurisdictional error in the same way as they had been treated for all errors of law for hundreds of years172. This Court reiterated that it was necessary for "clear words"173 to oust the authority of the Court to review non-jurisdictional errors of law. Although the narrow construction approach applied with less force to non-jurisdictional errors, the general approach remained the same for jurisdictional and non- jurisdictional errors of law. 167 [1951] 1 KB 711 (Divisional Court); [1952] 1 KB 338 (Court of Appeal). 168 R v West Sussex Quarter Sessions; Ex parte Albert and Maud Johnson Trust Ltd [1974] QB 24 at 42 per Lawton LJ. 169 [1957] 1 QB 574 at 583-585. 170 R v Medical Appeal Tribunal; Ex parte Gilmore [1957] 1 QB 574 at 583. 171 Wade, Administrative Law, (1961) at 115. 172 R v The District Court; Ex parte White (1966) 116 CLR 644 at 655 per Windeyer J; [1966] HCA 69; Hockey v Yelland (1984) 157 CLR 124 at 130 per Gibbs CJ (Brennan and Dawson JJ agreeing), 142 per Wilson J (Dawson J agreeing). 173 Hockey v Yelland (1984) 157 CLR 124 at 130 per Gibbs CJ (Brennan and Dawson JJ agreeing); Wentworth v NSW Bar Association (1992) 176 CLR 239 at 252; [1992] HCA 24; Jamieson v The Queen (1993) 177 CLR 574 at 596 per Gaudron J; Darling Casino Ltd v NSW Casino Control Authority (1997) 191 CLR 602 at 633 per Gaudron and Gummow JJ. Edelman There are modern decisions which, on one reading, might provide support for the older view according to which the narrow approach to construction apparently required express words and did not permit exclusion of judicial review for any error of law merely by implication, assuming that such a distinction between expression and implication could be sharply drawn. In Owners of "Shin Kobe Maru" v Empire Shipping Co Inc174, this Court said that "[i]t is quite inappropriate to read provisions conferring jurisdiction or granting powers to a court by making implications or imposing limitations which are not found in the express words". In one passage cited in support of that proposition, Gaudron J said that it was "contrary to long-established principle and wholly inappropriate that the grant of power to a court (including the conferral of jurisdiction) should be construed as subject to a limitation not appearing in the words of that grant"175. However, it was common ground on this appeal that the narrow approach did not preclude legislation from excluding judicial review for non-jurisdictional error of law without express words but, assuming a clear distinction could be drawn, by necessary implication176. I proceed on that basis. The narrow construction principle and the Security of Payment Act The narrow construction principle was preserved in the Supreme Court Act 1970 (NSW). After the scope of the record was narrowed by the decision of this Court in Craig v South Australia177, the Supreme Court Act was amended to confirm that a writ of certiorari could issue to quash the ultimate determination of a court or tribunal on the basis of an error of law that appears on the face of the record178 and to provide that the face of the record includes the reasons expressed by the court or tribunal for its ultimate determination179. The Supreme Court Act 174 (1994) 181 CLR 404 at 421 per Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ; [1994] HCA 54. 175 Knight v FP Special Assets Ltd (1992) 174 CLR 178 at 205; [1992] HCA 28. 176 Shergold v Tanner (2002) 209 CLR 126 at 136-137 [34] per Gleeson CJ, McHugh, Gummow, Kirby and Hayne JJ, with the qualifier "at least"; [2002] HCA 19. See also Hockey v Yelland (1984) 157 CLR 124 at 142 per Wilson J; Jamieson v The Queen (1993) 177 CLR 574 at 596 per Gaudron J; Darling Casino Ltd v NSW Casino Control Authority (1997) 191 CLR 602 at 633 per Gaudron and 177 (1995) 184 CLR 163. 178 Supreme Court Act 1970 (NSW), s 69(3). 179 Supreme Court Act 1970 (NSW), s 69(4). With possible origins in the Tribunals and Inquiries Act 1958 (UK), s 12. Edelman expressly preserved "common law principles ... effective to prevent the Court from exercising its powers to quash or otherwise review a decision"180. I accept the submission of the appellant that if this Court were to apply, with its usual strength, the traditional, narrow approach to construction of legislation that purports to exclude review for non-jurisdictional errors of law then this appeal should be allowed. Although the objects of the Security of Payment Act would be impaired by permitting review of non-jurisdictional errors, the Security of Payment Act does not contain clear or express words excluding judicial review for non-jurisdictional error of law. And if express words that are slightly ambiguous are ineffective to oust judicial review for non- jurisdictional error of law then, a fortiori, an implication derived from a background assumption must also be ineffective despite some impairment of the statutory objects of certainty of cash flow, speed, and efficiency, falling short of rendering the Security of Payment Act inutile. There is a significant reason why the impairment of the objects of the Security of Payment Act by allowing review for non-jurisdictional error falls well short of rendering the Act inutile. The existence of a power of review for non-jurisdictional error does not mean that the power must always be exercised to quash a decision when error is found. The policy of the Security of Payment Act would be a powerful consideration in favour of the discretionary refusal of certiorari in many cases, including where the error is trivial or where the same result would occur without the error. These discretionary grounds for refusal of certiorari have "been in existence for centuries"181. To those well-known grounds could be added the circumstance where there is no real injustice likely to arise from an error of law due to an imminent determination of final rights with no substantial prejudice to the payer in the interim, and no likelihood of insolvency of the recipient of the payment. However, I consider that the narrow construction principle applies with little force to the Security of Payment Act. Put another way, the principle of legality has "variable impact"182 and, in this case, it applies only weakly. The reason for this weak application is that the adjudicator's determination is not, in a practical sense, concerned with a final adjudication of rights. Section 32 of the Security of Payment Act ensures that the courts retain the power to correct any errors in an adjudicator's determination. In that sense, the adjudicator's 180 Supreme Court Act 1970 (NSW), s 69(5). 181 Shaw and Gwynne, "Certiorari and Error on the Face of the Record", (1997) 71 Australian Law Journal 356 at 365. 182 R (on the application of Privacy International) v Investigatory Powers Tribunal [2017] EWCA Civ 1868 at [25] per Sales LJ (Flaux and Floyd LJJ agreeing). Edelman determination can, loosely, be described as "interim". Indeed, the adjudicator's determination that was quashed by the primary judge has only an inchoate effect on interim rights because under s 25 of the Security of Payment Act the adjudication certificate, which can be requested by the claimant under s 24, cannot be enforced as a judgment for a debt until filed with an affidavit. The variable application of the narrow construction principle is not novel. Indeed, in circumstances where a privative clause does not, in practice, affect a person's rights then the narrow construction principle might not apply at all. For instance, courts historically permitted the legislative ouster of jurisdiction by general implication if the restriction on jurisdiction was "for the benefit of the prosecuted" so that the matter could be heard by another court where costs were lower183. The less need there is for the rationale for the narrow approach to construction, the weaker will be the operation of the narrow approach to construction. The Security of Payment Act construed with a weak application of the narrow construction principle The principal issue is, therefore, whether, on ordinary principles of construction taking into account only a weak application of the narrow construction principle, the Security of Payment Act excludes judicial review for non-jurisdictional error of law. Such exclusion does not result from any express words. Nor does it result from a construction of the Security of Payment Act as though it contained any necessary "additional" words184. Nor does it result from a necessary implication from particular sections, words or phrases. Instead, it could only arise as a result of a necessary implication based upon a background legislative assumption. Implications with direct effect, that are based only on background legislative assumptions, are not commonly drawn. Nevertheless, the process of understanding all language requires the reasonable person to whom words are communicated to make background assumptions. The same is true of the understanding of language in, and therefore the process of construction of, contracts, wills, trusts, and statutes. There are two reasons why the Security of Payment Act, on its proper construction, embodies a background assumption, with direct effect, that judicial review for non-jurisdictional error of law is excluded. First, in some, perhaps many, cases the beneficiary of a determination, who has obtained an adjudication certificate, will file the adjudication certificate in court as a judgment for the debt 183 Cates v Knight (1789) 3 TR 442 at 444 [100 ER 667 at 668]. 184 Taylor v Owners – Strata Plan No 11564 (2014) 253 CLR 531 at 548 [38]; [2014] HCA 9. Edelman found owing185. Restitution of a payment made as a result of the court judgment will be ordered if the judgment is set aside186. However, in a respondent's action to set aside the judgment, the respondent is not entitled to challenge the adjudicator's determination187. That would be effective to exclude certiorari for non-jurisdictional error of law188. Parliament cannot be taken to have intended to create a race to court between the beneficiary of an adjudicator's determination seeking a court judgment and the opposing party seeking that the determination be quashed so that a certificate cannot be issued or filed. Secondly, the Security of Payment Act provides a strict timetable within which a decision must be made, without any right of appeal. The existence of a jurisdictional error, where the decision maker had no authority to decide, means that no real decision was made. But where a decision was made, with authority to do so, the strict timetable is premised upon the assumption that a decision will not be challenged for error of law. An adjudicator is to determine an adjudication application "as expeditiously as possible"189 and, in any case, within 10 business days after the date on which the adjudicator notified the claimant and the respondent as to his or her acceptance of the adjudication application190, or within such further time as the claimant and the respondent agree191. The adjudicator may, in certain circumstances, have only five business days after receiving the adjudication response from the respondent to determine the 185 Building and Construction Industry Security of Payment Act 1999 (NSW), s 25(1). 186 The Commonwealth v McCormack (1984) 155 CLR 273 at 276; [1984] HCA 57. See also Building and Construction Industry Security of Payment Act 1999 (NSW), s 32(3)(b). 187 Building and Construction Industry Security of Payment Act 1999 (NSW), s 25(4)(a)(iii). 188 South East Asia Fire Bricks Sdn Bhd v Non-Metallic Mineral Products Manufacturing Employees Union [1981] AC 363 at 370. See also Houssein v Under Secretary of Industrial Relations and Technology (NSW) (1982) 148 CLR 88 at 93; [1982] HCA 2; Hockey v Yelland (1984) 157 CLR 124 at 141-142. 189 Building and Construction Industry Security of Payment Act 1999 (NSW), s 21(3). 190 Building and Construction Industry Security of Payment Act 1999 (NSW), s 21(3)(a). 191 Building and Construction Industry Security of Payment Act 1999 (NSW), s 21(3)(b). Edelman adjudication application192. If the adjudicator determines that a respondent is required to pay an adjudicated amount then, subject to one exception193, the respondent must pay that amount within five business days after the date on which the adjudicator's determination is served194. Conclusion The basic question on this appeal concerned whether the Security of Payment Act had excluded judicial review for non-jurisdictional error of law. Where legislation, properly construed, has the effect that the error of law does not make the decision beyond power then the legislation has sometimes been described as creating authority to go wrong or, less elegantly, as conferring jurisdiction to decide a question wrongly195. As the appellant correctly submitted, these expressions conflate (i) a conclusion that a particular error is within jurisdiction but, due to a privative clause, possibly unreviewable, with (ii) a conclusion that the particular error is not merely unreviewable but that it is authorised. The second circumstance is almost non-existent. Parliament almost never authorises legal error. The unfortunate expression, "authority to go wrong", commonly refers only to the first circumstance, where a privative clause purports to preclude review of a legal error that does not take the decision beyond power196. The expression connotes only an error made by taking unlawful steps, revealed on the record, in the course of reaching lawful decisions in the exercise of public power. It does not mean that the decision maker was authorised to make the error, nor does it mean that the legislation, in Professor Wade's language described above, has purported to "legalize illegalities". The Security of Payment Act did not authorise adjudicators to take unlawful steps by making errors of law. What it did do, by implication based upon a background legislative assumption, was to immunise from judicial review any non-jurisdictional error of law on the face of the record. The conclusion that 192 Building and Construction Industry Security of Payment Act 1999 (NSW), ss 20(1) and 21(3). 193 Building and Construction Industry Security of Payment Act 1999 (NSW), s 23(1)(b). 194 Building and Construction Industry Security of Payment Act 1999 (NSW), s 23(1)(a). 195 Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147 at 171 per Lord Reid. 196 Leeming, "The riddle of jurisdictional error", (2014) 38 Australian Bar Review 139 Edelman judicial review of a non-jurisdictional error of law could be excluded merely by a background implication despite the narrow approach to construction is unusual. The reason for the unusual result is that the narrow approach applies only weakly to the construction of the provisions excluding judicial review of non- jurisdictional errors of law on the face of the record. The rationale for the narrow approach to construction is protective of the reason for judicial review, namely access to the courts to correct legal errors relating to a person's rights. Where, as here, that access is generally preserved without much practical effect on rights then the rationale is not sufficiently engaged to overcome the inference that arises from ordinary principles of construction. The appeal should be dismissed.

HIGH COURT OF AUSTRALIA FARAH CONSTRUCTIONS PTY LTD & ORS APPELLANTS AND SAY-DEE PTY LTD RESPONDENT Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22 24 May 2007 S347/2006 & S461/2006 ORDER Appeal allowed. Set aside the orders of the Court of Appeal of the Supreme Court of New South Wales made on 21 December 2005 and varied on 28 November 2006 and in their place order that the appeal to that Court from the judgment and orders of the Supreme Court of New South Wales dated 19 August 2004 and 22 November 2004 be dismissed with costs. Respondent to pay the appellants' costs of the proceedings in this Court. On appeal from the Supreme Court of New South Wales Representation F M Douglas QC with V R W Gray and R J Hardcastle for the appellants (instructed by Strathfield Law) A J Sullivan QC with J K Kirk and J S Emmett for the respondent (instructed by Esplins) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Farah ConstructIons Pty Ltd v Say-Dee Pty Ltd Equity – Fiduciary duties – Joint venture to redevelop property between first appellant and respondent – Second appellant learnt that redevelopment would gain Council approval only if the property was amalgamated with adjoining properties – Adjoining properties purchased by the second appellant, his wife and children and another company controlled by the second appellant – Whether first appellant had an obligation to disclose to the respondent opportunities to purchase adjoining properties and information concerning the Council's attitude to redevelopment – Whether first appellant fulfilled any such obligation of disclosure. Equity – Recipient Liability – Whether property acquired through misuse of information by a fiduciary should be treated as trust property – Whether second appellant's wife and children were liable under the first limb of Barnes v Addy – Whether wife and children had notice of any breach of duty by the second appellant –Whether second appellant's knowledge could be imputed to wife and children – Whether second appellant was the agent of wife and children and, if so, whether information acquired outside scope of agency – Duty of principal to investigate conduct by agent. Equity – Assistance-based liability – Whether second appellant's wife and children were liable under the second limb of Barnes v Addy – Whether second appellant's wife and children were liable as knowing participants in a dishonest and fraudulent design – Knowledge requirement in the second limb of Barnes v Addy. Equity – Tracing – Whether property was the traceable proceeds of second appellant's breach of fiduciary duty – Whether wife and children of second appellant were volunteers. Equity – Remedies – Account of profits – Whether wife and children of second appellant were liable to account for profits made through their acquisition of the properties. Unjust enrichment – Restitutionary liability – Whether wife and children held their properties on constructive trust for the joint venture by reason of liability to make restitution based on unjust enrichment – Whether the notice test in the first limb of Barnes v Addy should be abandoned – Application of concept of unjust enrichment to recipient liability for breach of trust or fiduciary duty – Whether unjust enrichment at the expense of the respondent. Real Property – Indefeasibility – Second appellant's wife and children were registered proprietors – Whether their title was indefeasible pursuant to s 42 of the Real Property Act 1900 (NSW) – Whether registered title subject to an in personam claim – Whether registered title subject to a constructive trust – Whether title obtained by fraud within the meaning of s 42(1). Courts – Evidence – Appellate intervention – Whether Court of Appeal erred in reversing findings of fact made at trial – Weight to be given to trial judge's assessment of witness credibility by an intermediate court of appeal. Courts – Practice and procedure – Whether Court of Appeal erred in deciding the appeal on a ground not argued in that court – Whether Court of Appeal erred in deciding the appeal on a matter not pleaded by the respondent at trial. Words and Phrases – "dishonest and fraudulent design", "fraud", "in personam", "knowing receipt", "knowledge", "stock-in-trade", "unjust enrichment". Real Property Act 1900 (NSW), s 42. GLEESON CJ, GUMMOW, CALLINAN, HEYDON AND CRENNAN JJ. These somewhat complex appeals concern fiduciary duties in relation to land development. The reasons for judgment are organised under the following headings: The land [2] The nature of the proceedings in outline [3] The parties [4] The primary events [9] The principals of Farah and Say-Dee meet [9] The agreement of the parties [11] Performance of the agreement begins [12] Difficulties with the Council [13] Purchases by the Elias interests [16] Mr Elias's concealed offer to buy No 11 [20] Procedural history [21] Issues before this Court [29] The need to amalgamate: disclosure of the Council's view [30] The Court of Appeal's conclusions [30] The evidence [32] Did the Notice of Determination convey enough? [39] Disclosure to Say-Dee about the possible development of No 13, No 15 or No 20: preliminary points [43] The problem for the courts below [43] Callinan Crennan The trial judge's reasoning [45] Disclosure to Say-Dee about the possible development of No 13, No 15 or No 20: errors by the Court of Appeal [48] Demeanour-based findings [48] Contradictions in the Say-Dee affidavits [50] Acquisition of No 15 and No 20 [63] Acquisition of No 13 [66] Mr Elias's financial difficulties [69] Say-Dee's financial difficulties [78] The concealed offer [84] The probability that Mr Elias would ask Say-Dee to join in acquiring No 13 and No 15 [89] The Court of Appeal's reasoning considered [90] Did Mrs Elias and her daughters have actual knowledge of Say-Dee's rights? [100] Scope of Farah's fiduciary duty [101] Did Farah fulfil its obligations of disclosure? [106] Liability of Mrs Elias and her daughters under the first limb of Barnes v Addy [110] The "rule in Barnes v Addy" stated [111] The Court of Appeal's reasoning on the first limb [114] Non-application of the first limb: no receipt of property to which a fiduciary obligation attached [116] Non-application of the first limb: no agency and no notice [123] Callinan Crennan Restitutionary liability [130] The Court of Appeal's decision [130] Injustice to the parties [132] Resultant confusion [134] The structure of the Court of Appeal's reasoning [136] The Court of Appeal's reasoning: authorities in favour? [140] The Court of Appeal's reasoning: authorities against [147] The Court of Appeal's reasoning: principle [148] Second limb of Barnes v Addy [159] Tracing [187] The duty of Mrs Elias and her daughters in equity to account for profits Indefeasibility [190] The Court of Appeal's reasoning [190] Pleading difficulty [191] Fraud [192] In personam exception [193] Causation [199] Remedies [200] Orders [202] Callinan Crennan The land Burwood is an inner suburb of Sydney. The five plots of land with which these appeals are directly or indirectly concerned are situated near Burwood Railway Station, in a busy commercial area. Three are in Deane Street and two are in George Street. Standing in Deane Street looking north, the observer sees 11 Deane Street ("No 11"). To the west of it is 13 Deane Street ("No 13"). To the west of No 13 is 15 Deane Street ("No 15"), which is on the corner of Deane Street and Mary Street. On each of No 11, No 13 and No 15 is a block of four units. Behind No 11, No 13 and No 15 are two adjoining properties, 18 George Street ("No 18") and 20 George Street ("No 20"). The rear of No 20, which is on the corner of Mary Street and George Street, adjoins the rear of No 15, and the rear of No 18 adjoins the rear of No 11 and No 13. All these parcels comprise land under the provisions of the Real Property Act 1900 (NSW) ("the Real Property Act"). The nature of the proceedings in outline These are appeals against orders of the New South Wales Court of Appeal (Mason P, Giles and Tobias JJA) setting aside orders of Palmer J in the Supreme Court of New South Wales. The contentious aspect of the proceedings before Palmer J was a cross-claim, which he dismissed. By that cross-claim Say-Dee Pty Ltd ("Say-Dee") claimed various forms of equitable relief in relation to No 11, No 13, No 15 and No 20 against Farah Constructions Pty Ltd ("Farah") and five other cross-defendants. In this Court Say-Dee is the respondent and the six cross-defendants are the appellants. Palmer J also made orders sought in a summons filed by Farah seeking an order for the sale of No 11 upon the statutory trusts for sale under the Conveyancing Act 1919 (NSW), Pt IV, Div 61. The Court of Appeal substituted for the orders of the trial judge a declaration that there be constructive trusts over No 13 and No 15 in favour of a partnership between Farah and Say-Dee to develop No 11, and related relief2. The appeal to this Court against the orders of the New South Wales Court of Appeal should be allowed and the trial judge's orders restored for the reasons given below. 1 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2004] NSWSC 800 at [79]. 2 For the reasons for this outcome, see Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309. Two judgments have also been delivered in relation to the orders of the New South Wales Court of Appeal: Say-Dee Pty Ltd v Farah Constructions Pty Ltd (No 2) [2005] NSWCA 469 and Say-Dee Pty Ltd v Farah Constructions Pty Ltd (No 3) [2006] NSWCA 329. Callinan Crennan The parties Farah, the first appellant, is controlled by Mr Farah Elias, who is the second appellant. He is also called "George". He gave his occupation as developer of real estate. Lesmint Pty Ltd ("Lesmint"), the third appellant, is another company controlled by Mr Elias. Mrs Margaret Elias, the fourth appellant, is married to Mr Elias. Sarah Elias, the fifth appellant, and Jade Elias, the sixth appellant, are the daughters of Mr and Mrs Elias. Say-Dee is a company controlled by Dalida Dagher and Sadie Elias, and they are its directors. Although the trial judge found that they had no experience in real estate development, they had considerable business experience and ambitions. At the time of the relevant events, Ms Dagher owned two properties in her own name. They were mortgaged. One was her residence. She was a 50 per cent shareholder in a company named Pacific Islands Express Pty Ltd which owned two valuable blocks of land worth over $5 million, and there was evidence that she was a director of that company. On one of them a pub was being built, funded by large borrowings, which she had guaranteed. A petrol station stood on the other block. She was also a director and a 50 per cent shareholder in another company, Teilwar Pty Ltd, which was carrying on the business of running two service stations involving franchises with Caltex. She claimed to have an "interest", although she was not a shareholder, in a third company, Dagher A Family Company Pty Ltd, which ran a service station, in which she had been involved for 18 years. She had seen many sets of business accounts over the years and understood what those accounts showed. Ms Elias described herself as Operations General Manager of a multi- million dollar company called "Go Lo", being responsible for five area managers. Say-Dee itself had purchased a house in Campsie with a view to buying the adjoining property for redevelopment. Say-Dee also conducted two coffee shops in Chatswood and Miranda. The primary events The principals of Farah and Say-Dee meet. In 1998, Ms Dagher and Ms Elias decided to become involved in real estate development. Through a mutual friend, Mr Elie Becherra, they contacted Mr Elias. He was the brother-in-law of Ms Elias's uncle and had known her socially since childhood, but he did not know Ms Dagher. Callinan Crennan Mr Elias proposed that No 11, which comprised four rather run-down units, be bought using capital contributed by Say-Dee and borrowed monies; that No 11 be redeveloped for partly commercial and partly residential purposes; that while the development application was being prepared and approved by Burwood Council the units should be refurbished and rented out; that the rent be applied to pay the interest on the monies borrowed; and that on completion of the project No 11 be sold and the profits shared equally between Farah and Say-Dee. To this proposal Ms Dagher and Ms Elias agreed. The agreement of the parties. The terms of the parties' agreement, or some of them, were recorded in a letter from Say-Dee's solicitors dated 20 April 1998 to Farah's solicitors headed in part "Property: DEANE STREET, BURWOOD" thus: "1. Both parties are the purchasers in equal shares. Say-Dee is to advance to the joint venture $225,000.00. Balance of funds to be borrowed by the joint venture and secured by way of mortgage over the subject property. Upon completion of the project the profits are to be allocated as follows: 1st priority – repay Say-Dee $225,000.00. 2nd priority – pay all agents commission and legal expenses. 3rd priority – distribute balance 50/50 to joint ventures." In addition, it was agreed that Farah would be responsible for managing the progress of the development application, constructing the development and selling the land. Performance of the agreement begins. For a time matters proceeded smoothly. On 2 April 1998 contracts were exchanged for the purchase of No 11 by Farah and Say-Dee as tenants in common in equal shares for $630,000. On 17 September 1998 completion took place. Say-Dee provided $230,000 towards the purchase price and stamp duty. The balance of the purchase price came from a loan from the National Australia Bank. The units were refurbished and let. Farah prepared a development application for an eight storey building and on 5 January 2000 lodged it with Burwood Council. Although the applicant was Callinan Crennan described as "Deane Trust", and was so addressed in later correspondence, there was in fact no express trust of that name, but no party submitted that anything turns on that. On 26 April 2000 the Council's Building and Development Committee deferred consideration of the development application to enable consultation to take place. However, none did take place; instead Mr Elias submitted amended plans on 27 April 2000, reducing the height by one storey. the Council. Difficulties with The Council's Group Manager, Environmental and Community Services, prepared a report on the development application dated 20 June 2000. A copy was given to Mr Elias before 26 June 2000 and it was discussed at the Council's Building and Development Committee meeting on that day in his presence. The Group Manager recommended against approving the development application. This report stated: "The amendments proposed [on 27 April 2000] do not satisfy the Draft Town Centre Commercial LEP and DCP for a maximum of 4/5 storeys and a maximum FSR of 3:1. Even if the building did conform with such standards, it is considered that the site is too narrow to maximise its development potential. The proposed development is considered an over-development of a narrow 11m wide site as evidenced by the inability to provide for car parking due to the lack of manoeuvring space available. The site should be amalgamated with the adjoining properties to achieve its maximum development potential and a more appropriate development permissible under the Draft Town Centre Commercial LEP No 46 and DCP No 10." Mr Elias contended to the meeting that relaxation of the planning requirements might be made after discussion with the Department of Urban Affairs and Planning. The Committee resolved to defer consideration of the application to enable the issues to be discussed with the Department. On 11 July 2000 Mr Elias met two Council officers (the Group Manager, Environmental and Community Services and the Manager of Building and Development). On 12 July 2000 he wrote to the Chairman of the Council's Building and Development Committee making further submissions advocating approval for the development application. On 8 March 2001 the Department of Urban Affairs and Planning informed the Council that its Urban Design Advisory Service had prepared an urban design Callinan Crennan assessment. It suggested that No 11 was too small to achieve its full development potential, and that it needed to be amalgamated with other sites "to maximise its development potential". On 3 April 2001 the Council's Group Manager, Environmental and Community Services, provided a further report to the Council's Building and Development Committee. It referred to the urban design assessment and recommended refusing the application "as there is no scope for a redesign of the proposal". That Report was considered by the Committee on 3 April 2001, and Mr Elias addressed the meeting. However, the Committee unanimously adopted the Group Manager's recommendation, and this became the decision of the Council. Mr Elias was advised of that decision by a Notice of Determination dated 4 April 2001. The sixth of the stated reasons for refusal was: "The subject site is considered too small to achieve its full development potential and return a positive urban design outcome." Purchases by the Elias interests. On 30 June 2001 Mr Elias, Mrs Elias and their two daughters each entered a contract to buy one of the four units in the building on No 15, and one of the four units in the building on No 20. The total purchase price was $1,080,000 for No 15 and $980,000 for No 20. The trial judge found that this was after Say-Dee had declined an invitation by Mr Elias in May to participate in the acquisition of these properties, but that finding was reversed by the Court of Appeal. On 20 November 2001 those contracts were completed. On 7 December 2001 Farah lodged a second development application for No 11. On 12 March 2002 a Council officer advised Mr Elias (amongst other things) that No 11 was too narrow to maximise its development potential without amalgamation with neighbouring sites. On 15 August 2002 Lesmint entered into a contract to buy No 13 for $1,680,800, and that contract was completed on 6 November 2002. The trial judge found that this was after Say-Dee had declined an invitation by Mr Elias in August to participate in the development of No 13 with No 11, but that finding was reversed by the Court of Appeal. On 27 August 2002 Mr Elias withdrew the second development application. Mr Elias's concealed offer to buy No 11. The trial judge found that in late 2002 or early 2003 Mr Elias made an offer to Ms Dagher and Ms Elias to buy No 11. He falsely represented that he was a consultant to the offeror when in Callinan Crennan fact he solely controlled the offeror, and in that way he concealed his identity. This concealed offer weighed heavily in influencing the Court of Appeal to reverse the trial judge on a key question of what disclosures Mr Elias made to Say-Dee before the acquisitions of No 13, No 15 and No 20. Procedural history In late 2002 or early 2003 Say-Dee declined to sell its interest in No 11 to Farah. Thereafter relations deteriorated. The proceedings began on 19 March 2003 when Farah filed a summons against Say-Dee seeking an order that a trustee be appointed over No 11 and that it be sold pursuant to the statutory trusts for sale for which provision is made in the Conveyancing Act 1919 (NSW), Pt IV, Div 6. Say-Dee then filed a cross-claim, claiming that the present appellants held their interests in No 11, No 13, No 15 and No 20 on constructive trust for the partnership between Say-Dee and Farah. The claim in relation to No 20 was abandoned at the start of the trial. This may have been because Say-Dee, like the Court of Appeal, took the view that while "No 15 was an adjoining or adjacent property to No 11 for the purpose of site amalgamation as contemplated by the Council, No 20 ... was not." After amendments to the cross-claim were made on 25 June 2004, the trial began on 16 August 2004 and continued until 18 August 2004. The trial judge delivered judgment on the following day. He gave judgment for the cross- defendants on the amended cross-claim. He ordered that two trustees be appointed to No 11 on the statutory trusts for sale. The Court of Appeal heard an appeal by Say-Dee on 7 July 2005 and gave judgment on 15 September 2005 allowing the appeal. The Court of Appeal rejected the trial judge's finding that Mr Elias had invited Ms Dagher and Ms Elias to participate in the acquisition of No 13 and No 15. It found that Farah's fiduciary duties to Say-Dee were wider than the trial judge had found them to be. It found that Farah had breached its fiduciary duty by failing to tell Say-Dee that the Council regarded the acquisition of No 13 and No 15 and their amalgamation with No 11 as essential if No 11 were to be redeveloped to its maximum potential. It concluded that Mrs Elias and her daughters were liable in relation to their three units in No 15 under the so-called "first limb" of Barnes v Addy3, and (1874) LR 9 Ch App 244 at 251-252. Callinan Crennan hence held them in constructive trust. It also concluded that Mrs Elias and her daughters held their three units in No 15 on constructive trust for Say-Dee on a restitutionary basis turning on unjust enrichment. The Court of Appeal further held that the outcome was not affected by the fact that Mrs Elias and her daughters had acquired a registered title to their units in accordance with the provisions of the Real Property Act. It concluded by indicating that it favoured the relief claimed by Say-Dee, which centred on declaring constructive trusts over No 13 and No 15 in favour of the partnership between Farah and Say-Dee to develop No 11, and appointing receivers to obtain a development consent and sell No 11, No 13 and No 15 in one line. The Court of Appeal directed the parties to bring in draft short minutes of order reflecting that expression of opinion within 14 days. On 21 December 2005 the Court of Appeal delivered a further judgment4 resolving disputes between the parties about the orders. On 28 November 2006, after this Court had granted special leave to the appellants to appeal on 19 September 2006, and a fortnight before that appeal was listed for hearing on 12 December 2006, the Court of Appeal delivered a third judgment5. That judgment was occasioned by an application brought by Say-Dee seeking orders conferring power on the receivers to delay sale, and to engage experts to advise on how to deal with the Council in relation to obtaining a rezoning before sale. The Court of Appeal made orders to that effect. There are before this Court two appeals. One relates to the Court of Appeal's orders of 21 December 2005. The merits of the first appeal depend on the reasons for judgment given on that day and earlier on 15 September 2005. The other appeal is against the orders made on 28 November 2006. The respondent has filed a notice of contention in relation to the first appeal. 4 Say-Dee Pty Ltd v Farah Constructions Pty Ltd (No 2) [2005] NSWCA 469. 5 Say-Dee Pty Ltd v Farah Constructions Pty Ltd (No 3) [2006] NSWCA 329. Callinan Crennan Issues before this Court The appeals and the notice of contention raise the following issues for determination. (a) Did Farah disclose to Say-Dee the Council's view of the need to amalgamate the development of No 11 with other properties if any development application was to succeed? (b) Did the Court of Appeal err in reversing the trial judge's finding that Farah had disclosed to the directors of Say-Dee opportunities to buy No 15 and No 20 in 2001 and No 13 in 2002? (c) Did Mrs Elias and her daughters have actual knowledge of Say-Dee's rights? (d) Did the scope of the joint venture create a duty on Farah to disclose the Council's view of the need for amalgamation and to disclose the opportunities to buy No 15 and No 13, and to abstain from proceeding with those purchases in the absence of Say-Dee's informed consent? If so, did Farah comply with that duty? Did the Court of Appeal err in finding that Mrs Elias and her daughters were liable under the first limb in Barnes v Addy? (g) Did the Court of Appeal err in finding that Mrs Elias and her daughters were liable as recipients of trust property on the basis of unjust enrichment? (h) Were Mrs Elias and her daughters liable under the second limb of Barnes v Addy? Did Say-Dee have a tracing remedy against Mrs Elias and her daughters? Did Mrs Elias and her daughters have a duty in equity to account for profits? (k) Was there an adequate causal link between any breach of duty by Farah and harm to Say-Dee? Callinan Crennan Did the Court of Appeal err in failing to find that the second to sixth appellants had acquired an indefeasible title to the respective properties in their names pursuant to s 42 of the Real Property Act? (m) Were the remedies ordered by the Court of Appeal satisfactory? The need to amalgamate: disclosure of the Council's view The Court of Appeal's conclusions. The trial judge found that Mr Elias had not "in terms" conveyed to Say-Dee the view of the Council that No 11 was too narrow to maximise its development potential and that it should be amalgamated with the adjoining properties. Below this will be referred to as "the Council's view of the need for amalgamation". The Court of Appeal agreed with this finding, and went further. It held that not only had that information not been conveyed "in terms", it had not been conveyed "in effect or in substance". The Court of Appeal found two relevant deficiencies in Mr Elias's conduct. The first deficiency was that Farah had not sent to Say-Dee, or alerted it to the contents of, a copy of the Notice of Determination in which the Council said: "The subject site is considered too small to achieve its full development potential and return a positive urban design outcome." The second deficiency was that even if Say-Dee had been aware of those words, and even if a commonsense inference from the Council's view that the site was too small was that a larger site should be acquired, there had been no communication of an "additional dimension" – "a particular piece of information with respect to the Council's future attitude to any proposed development if No 11 was amalgamated with the adjoining properties, namely, that subject to achieving a positive urban design outcome, it would most likely be approved or, at least, recommended for approval." The evidence. The trial judge did not make a positive finding accepting Mr Elias's evidence, advanced specifically only in cross-examination, that he told Say-Dee about the Council's view of the need for amalgamation. Nor did he make a positive finding that Mr Elias always left a copy of the Council's reports with Ms Dagher and Ms Elias. His finding that the Council's view of the need for amalgamation was not "in terms" conveyed to Say-Dee suggests a reluctance – perhaps a refusal – to make these positive findings. It is therefore necessary to leave out of account Mr Elias's evidence of disclosure save where Say-Dee did not put it in issue or it is otherwise confirmed. The following matters of evidence are relevant. Callinan Crennan First, Say-Dee admitted and the trial judge found that Mr Elias told Ms Dagher and Ms Elias that the Council had rejected the first development application because it had too many units for No 11. Secondly, there is positive evidence that by October 2002 Say-Dee understood that one way of overcoming the Council problem was to develop No 11 with adjoining land. In her first affidavit, Ms Dagher deposed that in a meeting in late October 2002, discussed more fully below6, she said to Mr Elias in the presence of Ms Elias: "Why don't we do a development that is a bit smaller so the Council won't reject the development application?" She deposed that he replied: "It's not worth it." She deposed that she then said: "Then why don't we do a development with the building next door which you own?" – that is, with No 13. In her first affidavit, Ms Elias, apparently giving evidence about the same meeting, attributed to Ms Dagher the words: "Why don't we get together and do a big development with your other properties?" While in later affidavits each deponent retreated from parts of their evidence about this conversation, Ms Dagher continued to offer a version of the conversation consistent with an understanding that the development of adjoining properties with No 11 was a possibility. It should be inferred that Say-Dee knew of at least the real possibility that the Council would approve a development of No 11 in conjunction with No 13 and No 15. How could Say-Dee have got this knowledge unless Farah had made it available? Say-Dee offered no answer to that question. Thirdly, Farah tendered a letter of 16 July 2001 which Mr Elias sent on its behalf to Say-Dee. The letter said: "Over the past year or so we have regularly kept you informed of the current status of [No 11] ... The management of the trust has now requiring [sic] critical attention due to the culmination of the following events: After several months of submissions to the Burwood Council and the current the State government development application and we enclose copies of that correspondence. This process incurred a great deal of time and expense on our part with no foreseeable returns. the council has refused Callinan Crennan The situation is now more than urgent and we must come to some decision and arrangement in relation to the trust and the property without any further delays." (emphasis added) There is no evidence of any contemporary protest by Say-Dee that it was untrue for Mr Elias to have said that for the past year he had regularly kept it informed. In his main affidavit Mr Elias gave evidence that at a meeting at his office in late August 2001 the following took place: "I used the letter as an agenda for the meeting and ticked off each item as we discussed it ... We discussed the refusal of the Application from Council and agreed to resubmit a new plan with more commercial component." There is a tick against the item in the 16 July 2001 letter referring to the enclosure of copies of correspondence with the Council. Had the full correspondence been enclosed, one of the enclosures would have been the Notice of Determination of 4 April 2001, for that was the operative document rejecting the first development application. It referred explicitly in par 6 to the Council's view of the need for amalgamation in the words "[t]he subject site is considered too small to achieve its full development potential". Counsel for Say-Dee in this Court accepted that the Notice of Determination would have been an obvious thing to enclose. The enclosures referred to were not tendered and were not identified in evidence. Say-Dee did not object to the tender of the letter of 16 July 2001 on the ground that the enclosures were incomplete. Say-Dee did not cross-examine Mr Elias to suggest that he had failed to include the enclosures when he sent the letter. Neither Ms Dagher nor Ms Elias gave evidence to the effect that they protested about the the correspondence not being enclosed, either after Say-Dee received 16 July 2001 letter or at the meeting in late August 2001. Ms Dagher made a general denial of having received any indication before March 2003 that the Council had recommended that No 11 be amalgamated with adjoining properties for redevelopment. Ms Elias made a general denial of having received any indication before March 2003 that the Council had recommended that No 11 be amalgamated with adjoining properties for achievement of its maximum development potential. But neither Ms Dagher nor Ms Elias in terms denied receipt of either the Notice of Determination or the 16 July 2001 letter. They did not deny Mr Elias's account of the late August 2001 meeting at which the 16 July 2001 letter was used as an agenda. Callinan Crennan Leaving aside questions of onus – whether Say-Dee, endeavouring to prove a breach of fiduciary duty, had to prove non-receipt of the Notice of Determination, or whether Farah, endeavouring to prove a proper disclosure, had to prove receipt – it is to be inferred that the Notice of Determination was sent to Say-Dee. When the contents of par 6 of the Notice of Determination are taken with the first and second factors mentioned above, they support an inference that Say-Dee understood par 6 to be a statement that No 11 had to be amalgamated with adjoining properties if it were to achieve its full development potential. Counsel for Say-Dee in this Court rightly agreed that a statement that the site of No 11 was too small to achieve its full development potential meant that there were only five possibilities: first, reduction of the planned development; secondly, acquisition of more land; thirdly, termination of the joint venture as unprofitable; fourthly, variation of the joint venture so as to use No 11 for income-making purposes such as rental; and, fifthly, sale of the land. In short, if the development were to proceed unchanged (ie leaving aside possibilities 1 and 3-5), it was necessary to acquire more land. It follows that Say-Dee's contention that par 6 of the Notice of Determination did not disclose the Council's view of the need to amalgamate properties must be rejected, because to anyone of any business experience – and the principals of Say-Dee had plenty of business experience – par 6 must have suggested that the development could only proceed unchanged if more land were acquired. Fourthly, from Mr Elias's uncontradicted evidence that he "discussed the refusal" of the first development application by the Council with Ms Dagher and Ms Elias it is to be inferred that Say-Dee was aware not only of the fact that the Council had refused it, but also of why. It is difficult to believe, unless it went without saying, that in late August 2001, after the project had been on foot for three and a half years, but stalled for much of that time, with the interest paid out exceeding the rent received, and Say-Dee's other activities in financial difficulties7, the representatives of Say-Dee would not have discussed with Mr Elias why the Council had refused the first development application and how the Council's attitude could be changed. The absence of evidence about any explicit conversation to this effect at the late August 2001 meeting suggests that the nature of the Council's attitude to amalgamation did go without saying. It went without saying because it was already known to the three people present. This is a further reason for inferring that the appreciation of the Say-Dee directors in late October 2002 of the desirability of amalgamation derives from their receipt of the Notice of Determination with the letter of 16 July 2001. 7 See below at [78]-[83]. Callinan Crennan Did the Notice of Determination convey enough? It is necessary now to turn to the Court of Appeal's second point – that even if Mr Elias had caused Say-Dee to become aware of the Notice of Determination, that disclosure was insufficient. The Court of Appeal considered that Mr Elias should have told Say- Dee that the senior officers of the Council "were conveying or telegraphing" what it called "valuable information" and "vital intelligence" – that if No 11 were amalgamated with adjoining properties a development application in relation to No 11 "would most likely be approved or, at least, recommended for approval", or "would likely bear fruit". There are several difficulties in this conclusion. The language of the Court of Appeal's judgment in many places relies on assumptions about planning law and dealings with Councils, of varying degrees of validity, if any. Mr Elias was certainly a property developer, but it is far from clear that he made, or indeed would have even thought of making, the assumptions which the Court of Appeal considered itself entitled to make and to attribute to him. Those assumptions, no doubt because they were mere assumptions on the part of the Court of Appeal, were little explored in cross-examination. The Court of Appeal said that the means by which the Council officers "were conveying or telegraphing" the "valuable information" and "vital intelligence" was the Council reports. But those documents, far from telegraphing that amalgamation would "most likely" bring success, were calculated only to create pessimism in the reader, for the Council officers conveyed a range of criticisms they had of the first development application. Further, what they were saying was imprecise. What did "maximise" mean? What did "development potential" mean? These deficiencies might have been overcome if Mr Elias had made some relevant admissions. But there was no evidence that Mr Elias perceived that Council officers "were conveying or telegraphing" any message of "most likely" success. The fact that no answer in cross-examination indicating that perception was given is not surprising, for the point on which the Court of Appeal relied was a point taken for the first time by that Court. It attributed the idea to the trial judge, but his was a different point, namely that the Council saw an amalgamation of sites as necessary for a development of the proposal – not sufficient. In any event, the trial judge only raised the point in two interventions during counsel for Farah's final address, by which time the evidence had closed. It follows that Council officers were not communicating to Mr Elias any information about what conditions had to be satisfied to make success likely. All the Council officers were communicating was that one reason why the first development application had to be rejected was that No 11 was too narrow to maximise its development potential and that it should be amalgamated with the adjoining properties if that reason were to be nullified. Callinan Crennan Even if Mr Elias did not convey that information "in terms", he did convey it "in substance and in effect" by enclosing the Notice of Determination with the letter of 16 July 2001 from Farah to Say-Dee. Disclosure to Say-Dee about the possible development of No 13, No 15 or No 20: preliminary points The problem for the courts below. It must be acknowledged that the mode in which the parties presented their evidentiary cases, both testimonial and documentary, created considerable difficulties for both the trial judge and the Court of Appeal. This was so on the last issue. It was particularly so on this one. These difficulties were compounded by the fact that it was in various respects probable that there would be disputes between the parties – once partners, now bitter opponents – about their oral dealings. The difficulties were compounded further by the fact that in some respects all three key witnesses were of questionable veracity and of questionable reliability. A reading of the evidence leaves an impression that the full story has not been told. For example, Say-Dee had put about $230,000 into the joint venture in 1998, generating opportunity costs but not income, the rents received from No 11 were not even matching mortgage interest repayments owing to the bank, and that $230,000 had uses elsewhere to assist those of Say-Dee's businesses which were not doing well8, yet the evidence does not suggest any protests on the part of Say-Dee about the slow pace at which No 11 was being developed. The Court of Appeal correctly reminded itself that it was not sufficient for it to conclude that had it been conducting the trial it would have come to a different conclusion from that to which the trial judge came. The Court of Appeal differed from the trial judge because it said it found his findings glaringly improbable and contrary to compelling inferences. The parties did not contend before this Court that that test was wrong. Hence there is no need to examine whether it is incorrect. The appellants' invitation to this Court to correct errors by the Court of Appeal thus calls for an examination of whether the findings were in truth glaringly improbable and contrary to compelling inferences. That in turn calls for an understanding of how the trial judge arrived at them. The trial judge's reasoning. The trial judge accepted Mr Elias's evidence about his offers to Ms Dagher and Ms Elias. In outline, that evidence was that in May 2001 he met Ms Dagher, he told her he had been negotiating with the 8 See below at [78]-[83]. Callinan Crennan owners of No 15 and No 20, he asked whether she and Ms Elias were interested in those properties, and she said they were not. Further, Mr Elias's evidence was that in August 2002 he told Ms Dagher that No 13 was on the market and that No 13 was a good proposition for redevelopment with No 11, but that Ms Dagher declined participation on behalf of herself and Ms Elias. Consistently with his acceptance of Mr Elias's evidence, the trial judge made positive findings that Mr Elias had disclosed to Say-Dee the proposed acquisitions of No 13 and No 15, that he had invited Say-Dee to participate, and that his invitation was declined. The trial judge's reasons for his findings were that he considered the evidence of Ms Dagher and Ms Elias about how and when they learned of the acquisitions of No 13 and No 15 to be unsatisfactory; that Mr Elias found great difficulty in raising money to acquire No 13 and No 15; that it was inherently probable that he would seek funds from Say-Dee for that purpose; that it was inherently probable that Say-Dee would have declined because of financial inability to participate; and that despite Mr Elias's offer to Say-Dee to buy No 11 on the false representation that he was a consultant to a would-be purchaser of No 11 when in fact he controlled that would-be purchaser, which was "certainly not excusable", he was "an essentially truthful witness". The Court of Appeal accepted that, had Say-Dee been asked to participate, it would have declined because of financial incapacity. It also accepted that the evidence of Ms Dagher and Ms Elias was unsatisfactory, although the Court of Appeal gave this much less significance than the trial judge had. However, the Court of Appeal rejected or discounted every other aspect of the trial judge's reasoning. It is convenient to proceed by setting out various errors in the Court of Appeal's approach and then examining what force its reasoning has when those errors are taken into account. Disclosure to Say-Dee about the possible development of No 13, No 15 or No 20: errors by the Court of Appeal Demeanour-based findings. The trial judge gave several reasons for describing Mr Elias as "an essentially truthful witness". One of the reasons was the "impression" gained by the trial judge that under cross-examination Mr Elias "was making an honest endeavour to give his answers truthfully and carefully". Another was that he "remained unshaken in the essentials of his evidence although he was not very assertive in manner". Another was that some apparent contradictions were to be explained by "ambiguity and confusion" in Mr Elias's answers, arising from the fact that English is not his first language "and he sometimes expresses himself in a way that is not idiomatic, particularly in his use of tenses and moods". Decisions as to credibility are often based upon matters of Callinan Crennan impression9, and in this case rightly so. The impressions which the trial judge formed and the judgments he made about Mr Elias's manner are matters in respect of which the trial judge was in a position of distinct advantage over the Court of Appeal. The same is true to some extent of the trial judge's assessments of Mr Elias's English skills, although his abilities in that regard can be detected up to a point from the transcript. These impressions, judgments and assessments were recorded in a judgment delivered one working day after the trial judge had seen and heard Mr Elias in the witness box for nearly a day. They must be accorded due weight. This the Court of Appeal did not do. It uttered the truism that its reversal of the trial judge's finding was "not demeanour based", but failed to grapple with the fact that, in contrast, his finding was demeanour based. The Court of Appeal to some extent, and the respondent to a greater extent, relied on inconsistencies in Mr Elias's evidence. The trial judge said that counsel for the respondent had pointed to apparent contradictions in Mr Elias's evidence, and these were no doubt the same as those relied on in the Court of Appeal and this Court. The trial judge said he had not overlooked the submission. There is thus no reason to suppose that the trial judge was not aware of the contradictions or that he did not take them into account in reaching his generally favourable conclusion about Mr Elias's credibility. To the extent that they exist they do not justify a reversal of that generally favourable conclusion. Furthermore, the matters earlier referred to in this judgment, the parties' business experience, the opportunity and likelihood of the respondent making its own informed inquiries and judgment about the possibilities and economies of the proposed and other possible developments, give objective support to Mr Elias's evidence. Contradictions in the Say-Dee affidavits. In the amended cross-claim, Say-Dee alleged that No 13 and No 15 were transferred on the dates on which they were transferred, but did not allege that Say-Dee was ignorant of those transfers. In the defence to cross-claim, Farah admitted these transfers, but did not allege that Say-Dee had been made aware of those transfers before they were made. The first affidavit to be filed after the cross-claim had been filed was Ms Dagher's first affidavit, dated 18 June 2003. In par 26 of that affidavit she admitted that in mid-to late 2002, Mr Elias said to Ms Elias and to her: "I'm buying some other property in the area"; however, she also said: "Mr Elias never told me or [Ms Elias] in my presence which properties he was purchasing or any 9 Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at 88-89 [4] per Callinan Crennan details of the purchase. He never offered myself [sic] to become involved in the purchase." Ms Dagher's evidence that Mr Elias never told her what properties he purchased was contradicted by her evidence in the same affidavit, pars 30-33, that in late October 2002 the following conversation took place. Mr Elias said: "What we have been waiting for has finally come through. I've been approached by a group of people wanting to buy the Property." Ms Dagher said: "Why would we want to sell the Property rather than develop it ourselves?" Mr Elias responded: "We have already submitted two development applications to the Council and they have both been rejected." Ms Dagher said: "Why don't we do a development that is a bit smaller so the Council won't reject the development application?" Mr Elias said: "It's not worth it." Ms Dagher said: "Then why don't we do a development with the building next door which you own?" The attribution by Ms Dagher to herself of the last statement involves an assertion of knowledge by Ms Dagher in late October 2002 that Mr Elias by then owned No 13 – the only relevant building next door to No 11, since No 9 was a large and modern building not for sale, and Mr Elias did not own No 18. There is no evidentiary basis on which it can be inferred that Ms Dagher obtained the knowledge that Mr Elias owned No 13 from any source other than Mr Elias. The proposition deposed to by Ms Dagher in this affidavit that Mr Elias had never told her what properties he was purchasing is thus inconsistent with what she deposed to later in the affidavit – that she had reminded Mr Elias that he owned No 13. As the trial judge said, "there is no suggestion in this affidavit that it was at this meeting that Mr Elias had disclosed for the first time that his interests had acquired No 13". In an affidavit dated 19 February 2004, Mr Elias denied parts of these paragraphs of Ms Dagher's affidavit, but not the statement implying that he owned No 13. Mr Elias deposed to the fact that he told Ms Dagher of his impending purchase of No 15 in 2001 and No 13 in 2002 and that he offered Say-Dee participation, but Ms Dagher refused. In her affidavit of 17 June 2004, Ms Dagher gave another version of what appears to be the same conversation as the late October 2002 conversation set out above. On this version, Mr Elias said: "There is a buyer for Deane Street." Ms Dagher said: "Why are we selling, I thought the plan was to develop the site?" Mr Elias said: "No, I want to sell out. I'm going to sell all my other properties in the area as well." Ms Elias said to Mr Elias: "What other properties do you own in the area?" Mr Elias said: "Next door to 11 and next door to that." Ms Elias said: "Well, why aren't we building together?" Mr Elias replied: "It's to [sic] big even for me, I'm also selling all my properties." Ms Elias said: "If Callinan Crennan you are a developer and you own them all why don't you develop?" Mr Elias replied: "It's to [sic] big and I don't want to build." The trial judge said10: "It will be seen that in the first version of this conversation Ms Dagher suggests a joint development with Nos 11 and 13 and Mr Elias counters with the statement that he is selling his properties. In the second version, Mr Elias says that he is selling his properties and Ms Elias asks what those properties are, to be told that they are Nos 13 and 15. The inconsistency is a significant one. If the first version is correct, Ms Dagher knew of the acquisition of Nos 13 and 15 before October 2002 and found out about the acquisition in circumstances which she did not explain in her first affidavit, which would leave unchallenged the evidence of Mr Elias in his affidavit that he had told her before the proposed acquisitions were made. In Ms Dagher's second version of the conversation, she seeks to explain that she found out about the acquisition of the properties after they had already been acquired by Mr Elias' interests, by an enquiry made during the course of the October conversation." The contradiction in Ms Dagher's first affidavit, and her change of evidence in the second affidavit, created potential difficulties in the path of accepting her evidence so far as it was adverse to Farah, unless the contradiction and the change were explained. It is possible to imagine various ways in which the problem might have been explained, but no attempt to do so was ever made by the witness. In the Court of Appeal counsel for Say-Dee attempted an explanation by contending that the account of the conversation in Ms Dagher's first affidavit was expanded in her second affidavit, but the Court of Appeal rightly rejected that explanation as lacking any basis. The difficulties were increased by the course which Ms Elias's affidavit evidence took. In her first affidavit, dated 19 June 2003, the day after the date of Ms Dagher's first affidavit, she said in par 29, in words closely corresponding with those in par 26 of Ms Dagher's first affidavit, that Mr Elias said to her and Ms Dagher: "I'm buying some other property in the area." She then deposed: "Mr Elias never told me or Dagher in my presence which properties he was 10 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2004] NSWSC 800 at [41]-[42]. Callinan Crennan purchasing or any details of the purchase. He never offered Dagher or myself to become involved in the purchase." In par 30 she contradicted this in the version she gave of the conversation dealt with in par 33 of Ms Dagher's first affidavit. After describing how Mr Elias rejected an offer to buy No 11 for $1.5 million, the affidavit continued as follows: Ms Dagher said: "We have told you several times that we want to develop the property rather than sell it." Mr Elias said: "I've tried to get the development application through the council but we can't get anywhere and I think we are wasting our time." Ms Dagher said: "Maybe you are aiming to [sic] high and we need to cut down on the number of units on the property." Mr Elias said: "I think we are wasting our time and I am going to sell my other properties as well." Ms Dagher said: "We don't want to sell, we really want to develop this property and think it would be a really great site. Why don't we get together and do a big development with your other properties?" The words attributed by Ms Elias to Ms Dagher: "do a big development with your other properties" can only be a reference to No 13, No 15 and perhaps No 20. They were the only properties "owned" by Mr Elias which were capable of forming part of a "big development" with No 11. As the trial judge said, Ms Elias's affidavit does not suggest that she heard at the meeting for the first time that Mr Elias had acquired No 13 and No 15. Ms Elias did not record herself as denying any prior knowledge of Mr Elias's ownership of No 13 and No 15. Indeed she recorded the conclusion of the conversation as follows. Mr Elias said: "That sort of development would be out of my league. I think the best option is just to sell up." Ms Elias said: "We really want to develop this. We didn't buy the property and wait around for so many years just to sell it again, we are really keen to do this development." Ms Elias returned to the subject of this conversation in her third affidavit dated 16 August 2004. Her version was as follows. Mr Elias said: "I have a buyer for 11 Deane St. I've got a great price of $1.5 million." Ms Elias said: "We don't want to sell out, I thought we were supposed to be developing the site." Mr Elias said: "I'm selling out all my properties too, the development in the area is too big for me to handle on my own." Ms Elias said: "What other properties do you mean? What else do you own?" Mr Elias said: "13 and 15 Deane Street." The position thus is that in Ms Elias's first affidavit, as in Ms Dagher's, there is a contradiction; as between Ms Elias's first and third affidavits, as with Ms Dagher's first and second affidavits, there is a similar contradiction; and Ms Elias did not explain these contradictions any more than Ms Dagher did. As counsel for the appellant said: "[T]hey seemed to be somewhat consistent in their inconsistencies." The problems having emerged on the face of the Callinan Crennan affidavits, it was for the witnesses to take the initiative in explaining them. There was no duty on Farah to elicit explanations in cross-examination, and it did not seek to do so. The Court of Appeal pointed out – and it seems to have thought the error to be important since it referred to it twice – that the trial judge erred in suggesting that in Ms Dagher's first version of the relevant conversation she revealed knowledge that Mr Elias had bought No 15, and that in truth she only revealed knowledge that he had bought No 13. This is an unimportant error, since Ms Elias's first version of the conversation attributes to Ms Dagher knowledge that Mr Elias had bought both No 15 and No 13 and implicitly accepts that she possessed that knowledge herself. The Court of Appeal said of Ms Elias's evidence11: "His Honour's conclusion ... was that by October 2002, [Ms Elias] already knew that Mr Elias and his interests owned Nos 13 and 15. But even if that finding applied to both [Ms Elias] and [Ms Dagher], it did not warrant a finding that, on or prior to 30 June 2001 and, in particular, in May 2001, they had been made aware by Mr Elias that he was negotiating to purchase It is plain from the terms of Ms Elias's evidence that her knowledge that Mr Elias's interests owned both No 13 and No 15 was shared by Ms Dagher. And while the evidence standing alone might not warrant the trial judge's conclusion that Say-Dee was aware of the purchase of No 15 in May 2001, it tends to support that conclusion – for Say-Dee never suggested any means by which its principals learned of the purchase of No 15 other than by being told by Mr Elias, and they never suggested any time at which they learned it other than May 2001. A related error of the Court of Appeal is that while it accepted that Ms Dagher's versions of the October 2002 conversation were "inconsistent in a relevant respect", they thought this only left her evidence in an unsatisfactory state. This overlooks the equivalent inconsistency in Ms Elias's evidence. It overlooks the fact that the first versions in each case were advanced at the same time, and that the second versions in each case were advanced only about two months apart. It overlooks the fact that the inconsistencies support Mr Elias's claim that he told the Say-Dee principals about his acquisition of No 13 and 11 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [89]. Callinan Crennan No 15 at some time before the October 2002 conversation, and the fact that Say- Dee never excluded May 2001 for No 15 and August 2002 for No 13 as the times when he told them. For Ms Dagher to contradict herself in an unexplained way is a circumstance to which suspicion could attach. For Ms Elias to have done so in evidence which is the same in substance as that of Ms Dagher, though varying in details, is highly suspicious. The trial judge was entitled to give preference to the admissions they made in their affidavits over the self-serving statements in them. The Court of Appeal never explained why it could be said that the trial judge had erred in this process. It failed to integrate into its reasoning an explanation for the damaging statements in Ms Dagher's and Ms Elias's first affidavits. Whether convincingly or not, it narrowed the inconsistency by excluding No 15 from its ambit, but it never dealt with the continuing inconsistency in relation to No 13. Acquisition of No 15 and No 20. The Court of Appeal also made numerous suggestions that there was something sinister about the acquisition of No 15 "in one line or as a package" with No 20, instead of by itself. Thus the Court of Appeal asserted that No 15 was an "adjoining or adjacent property to No 11 for the purpose of site amalgamation as contemplated by the Council", but that No 20 was not. Both limbs of this proposition must be rejected. For so long a time as No 13 was not in the hands of anyone connected with the joint venture, it was in no sense "adjoining or adjacent": the only properties answering that description were No 9 or No 18. And if No 15 was adjoining or adjacent to No 11, No 20 was as well, because it adjoined No 15. Then the Court of Appeal appeared to question whether No 20 had to be bought with No 15. It also criticised Mr Elias's failure to suggest to Say-Dee that it consider "joining in the acquisition of No 15 alone, there being no suggestion by Mr Elias that there was any necessity for them also to be involved in the purchase of No 20". This was coupled with criticisms of Mr Elias for failing to explain why the acquisition of No 15 was desirable, namely Council's requirement for an amalgamated development. As to the last point, once it is accepted that Say-Dee was informed of the Council's attitude by receipt of the Notice of Determination, it was unnecessary for Mr Elias to repeat that information. As to the other points, the acquisition of No 15 by interests associated with Mr Elias owes its origin to an approach by Mr Elias in early 2001 to a real estate agent who controlled the company owning it. Number 15 was not then listed for sale. It was only available for purchase as a package, the owners being companies in common control. To criticise Mr Elias for not explaining the Callinan Crennan possibility of making an offer on No 15 alone is thus to criticise him for failing to suggest a futility. Acquisition of No 13. The Court of Appeal criticised Mr Elias for failing to tell Say-Dee that the real reason for why No 13 was, as on his evidence he said it was, "a good proposition for redevelopment in conjunction with" No 11 was the Council's requirement that No 11 be amalgamated with No 13 or No 13 and No 15 together. But the Notice of Determination had already conveyed that information to Say-Dee. A curious feature of the Court of Appeal's reasoning emerges at this point: while it later overturned the trial judge's finding that Mr Elias had offered No 13 to Say-Dee, in this part of the reasoning it treats it as correct, saying rather that Mr Elias chose the words just quoted "carefully". Another illustration of this approach to the trial judge's findings – seemingly accepting them at one point to reach a conclusion adverse to Mr Elias but rejecting them at another point to reach a different conclusion adverse to Mr Elias – exists. The Court of Appeal said: "[I]t is difficult to accept that Mr Elias acquired Nos 13 and 15 otherwise than for the purpose of their ultimate amalgamation with No 11 in order to maximise the development potential of the latter...". It then said that the trial judge made an implicit finding to this effect12: "[I]nherent in his Honour's acceptance that Mr Elias disclosed to [Ms Dagher] and [Ms Elias] his proposed acquisition of Nos 13 and 15 and invited their participation in the acquisition of those properties, and his finding ... that the properties were obviously suitable for an amalgamated development with No 11 so that it was inherently probable that Mr Elias would have asked [Ms Dagher] and [Ms Elias] if they were interested in acquiring them, is an implicit finding that No 15, and later No 13, were in fact acquired by Mr Elias to facilitate the redevelopment of The starting point in this reasoning is a finding by the trial judge, evidently accepted by the Court of Appeal, that Mr Elias disclosed his proposed acquisitions; that is a finding elsewhere overturned by the Court of Appeal. Apart from these criticisms, the Court of Appeal also relied on what it saw as inconsistencies in Mr Elias's cross-examination. However, the Court of Appeal overlooked the significance of the following facts. In 1998-1999 12 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [144]. Callinan Crennan Mr Elias made several approaches to the owner of No 13 to sell. The response was: "Don't contact me. When I'm ready to sell I will sell." Nothing more happened until August 2002, when Mr Becherra, who was a real estate agent, told Mr Elias that No 13 had been offered for sale. There is no evidence that at the time Mr Elias approached the owner of No 15 he was aware of any possibility of acquiring No 13 either then or in the future, whatever he hoped. Mr Elias's financial difficulties. Another group of criticisms made by the Court of Appeal relates to the following finding of the trial judge13: "I find it inherently probable that Mr Elias would have asked Ms Dagher and Ms Elias if they were interested in acquiring Nos 13 and 15. His unchallenged evidence was that he found great difficulty in raising the money for these acquisitions." In relation to the acquisition of No 13 in 2002, the Court of Appeal dealt with that finding principally by contending that "in neither his affidavit nor oral evidence is there a reference to any suggestion that he was seeking [Say-Dee's] interest in [No 15 and No 20] because he was finding difficulty in raising the purchase price." The Court of Appeal contended that the trial judge's proposition about Mr Elias's financial difficulties was based on only one piece of evidence; that that piece of evidence did not in fact support the proposition, because the trial judge misunderstood it; and hence that there was no evidence to support the trial judge's finding. In this there are three difficulties. One difficulty is that it is not the trial judge who misunderstood the evidence to which the Court of Appeal referred. The second difficulty is that the trial judge did not base his proposition only on that piece of evidence. The third difficulty is that the Court of Appeal overlooked two other pieces of evidence. The evidence which the Court of Appeal said judge misunderstood consists of the following part of one of Mr Elias's affidavits, which appears after he described how Ms Dagher told him, on his inviting Say- Dee's participation in buying No 13, that it could not do so because of the financial difficulties she and Ms Elias were experiencing. Mr Elias deposed that he said: "Dalida, it will be difficult for me to do it on my own. We should do it together. We must ...". Ms Dagher replied: "We can't do anything now George." Mr Elias said: "That's OK. I'll have to make other arrangements on my own then." trial the 13 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2004] NSWSC 800 at [54]. Callinan Crennan The Court of Appeal said that the trial judge's proposition about Mr Elias's financial difficulties was based, and only based, on the words he used to Ms Dagher in 2002 in relation to buying No 13: "[I]t will be difficult for me to do it on my own." The Court of Appeal then said that the words "It will be difficult for me to do it on my own" did not refer to Mr Elias's financial difficulties but to the difficulties of developing No 13 otherwise than in conjunction with No 11. They said14: "This follows from the immediately preceding statement ... of his affidavit where he attributed to [Ms Dagher's] lack of interest in more investment, a statement by her that Mr Elias should buy No 13 and that, if it was later developed with No 11, she and [Ms Elias] 'can take a space equivalent to our space in 11 Deane Street'." (emphasis in original judgment) That "immediately preceding statement" appears in the middle of a detailed account by Ms Dagher of Say-Dee's financial difficulties. Farah submitted that: "It takes quite a feat ... of mental gymnastics to get oneself into a situation of disagreeing with the trial judge on that particular aspect of the evidence." It is not necessary to go so far. It is sufficient to say that the Court of Appeal's reading of the evidence is not the better reading, and that the passage does in truth support the trial judge's proposition. The Court of Appeal also erred in saying that the trial judge's proposition about Mr Elias's financial difficulties was only based on the words "It will be difficult for me to do it on my own." The trial judge did not say that that was his only source, and there are two other categories of evidence that support it. One relates to the acquisition of No 15 and No 20. In cross-examination it was put to Mr Elias that the children made no contribution to the purchase price of their units. He said: "As the little contribution they've made from their little savings they've got but the most emphasis was on that, that was my wife's decision. When we purchased these properties we had to mortgage the house, withdraw every single cent possible on the house in my wife's name. We had to save – get all the saving from our accounts, from my wife's account. We had to borrow money from my brother. We had to borrow any dollar we could possibly get to really secure these properties and my wife had – I had a discussion with her and she made it quite clear if you ever want to 14 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [95]. Callinan Crennan use this sort of money, my house, I want to make sure it would be for the benefit of my daughters and I had a lot of discussion with her. Most time I try to convince her and that was the discussion I had, me and her." That is, the sources of the funds with which No 15 and No 20 were acquired were his children's savings, his wife's savings, a bank mortgage and a loan from his brother. Say-Dee accepted that the evidence showed that Mr Elias gave a mortgage on the family home which was either in Mrs Elias's name or joint names. Say-Dee said that the evidence was objectionable because it gave secondary evidence of documents and was not responsive to the question. The fact is that it was not objected to, it was received as evidence, and it invalidates the Court of Appeal's statement that there was no evidence of Mr Elias's financial difficulties. Mr Elias was not cross-examined on that evidence, and at a later stage the cross-examiner referred him to it as though it was not controversial. Although the Court of Appeal overlooked this evidence on the present point, it dealt with it on another issue, and although it found the evidence vague, it did not reject it15. Indeed the Court of Appeal held that it was reasonable to assume that Mrs Elias gave a personal guarantee for the repayment of the sum loaned by the bank in relation to No 15. Say-Dee accepted in this Court that the mortgage would have contained a personal covenant by Mrs Elias to repay the debt. Say-Dee submitted that it was implicit in the evidence that the financial contribution of the daughters was de minimis, and that there was no positive evidence that it was any more. There is no reason to suppose that it was de minimis. At a very late stage in the course of oral argument, Say-Dee challenged the evidence of Mr Elias set out above by reference to evidence which had only been tendered in late 2006, in connection with the variation of orders made by the Court of Appeal on 28 November 2006. The challenge made in oral argument turned on inconsequential points, such as which bank was the lender, and whether the loan was to Mr Elias's group of companies or not. However, a much more detailed challenge was made by Say-Dee in written submissions filed on 22 December 2006. Say-Dee contended that the material filed in relation to the variation of orders "raises real doubt about the reliability of the evidence given by Mr Elias ... It further fortifies the correctness of the [Court of Appeal's] decision to overturn relevant factual findings of the trial judge." Say-Dee contended that while Mrs Elias contributed to the acquisition of No 15, the 15 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [203]. Callinan Crennan children did not, and the Elias family home was not mortgaged. The appellants have had no opportunity to deal with Say-Dee's submissions about this evidentiary material. It is accordingly difficult to accept them without question. In particular, it cannot be concluded that the sum of $241,794, which came from a joint account in the names of Mr and Mrs Elias and was used to pay some of the purchase price, did not include contributions from the daughters. What is more, because this evidentiary material was only tendered in order to obtain the amendments to the orders made on 28 November 2006, it was not before the Court of Appeal at the time of its first judgment on 15 September 2005. The position thus remains that the Court of Appeal's account of the evidence before it on the question of whether Mr Elias was in financial difficulty is incorrect. In addition, the new evidence was not before the trial judge. No more can be expected of factual findings by a trial judge than that they conform to the evidence tendered before that judge, as distinct from other evidence never tendered before him. There is a further difficulty with the new evidence. In oral argument, when counsel for the respondent indicated reluctance to rely on the new material unless counsel for the appellants did not object, there was no objection. However, the respondent's written submissions of 22 December 2006 were of a different kind from the oral submissions. It cannot be inferred from the appellants' failure to object to the use of the new evidence to support inconsequential oral submissions that the appellants have waived objection to its use to support much more detailed and radical written submissions. The leave which this Court granted to the respondent to file the written submissions of 22 December 2006 related to the second appeal heard by this Court (which is against the orders of 28 November 2006). It did not relate to the first appeal (which is against the orders resulting from the reasoning in the Court of Appeal's first judgment). The leave granted was leave to file and exchange submissions on "the merits of that most recent order [that of 28 November 2006] as distinct from the consequences for that order of any success [the appellants] might enjoy in the [first] appeal." The smaller part of the respondent's submissions of 22 December 2006 is directed to the second appeal. The larger part of them is directed to the first appeal and, in particular, to the question of how the acquisition of No 15 was funded. So far as the written submissions of 22 December 2006 dealt with the question of how the purchase of No 15 was funded in relation to the correctness of the Court of Appeal's first judgment, they go beyond the leave granted. In these circumstances the respondent's submissions of 22 December 2006 on how the purchase of No 15 was funded will not be considered further, for four reasons. They depart radically from the conduct of the case at trial. They go far Callinan Crennan beyond what was canvassed in oral argument. No leave to file them was granted. The appellants have not had any opportunity to deal with them either by objection or rebuttal, since their submissions filed pursuant to leave by this Court were filed on 21 December 2006, one day before those of the respondent. The other category of evidence supporting the trial judge's proposition that Mr Elias had difficulty in funding the acquisitions on his own relates to No 13. The price for No 13 was $1,680,800. As the respondent accepted, Mr Elias borrowed the money from St George Bank, giving personal and company guarantees. The need to have resort to these borrowings reveals Mr Elias's incapacity to fund the purchase by himself. Indeed if he had difficulties in funding the purchase of No 15 in 2001, there is no reason to suppose that they would not have existed in relation to No 13 in 2002. Say-Dee's financial difficulties. A further criticism by the Court of Appeal relates to the trial judge's opinion that Say-Dee's financial difficulties made it probable that had Ms Dagher and Ms Elias been invited to participate in the acquisitions of No 13 and No 15 they would have declined. It was put thus by Tobias JA16: "I can accept [the trial judge's] conclusion that if [Ms Dagher] and/or [Ms Elias] had been asked to participate in those acquisitions, they would have declined for financial reasons. But it does not necessarily follow that his Honour was correct in finding that they were so asked: their financial difficulties may have been imparted by them to Mr Elias at different times and in different contexts. After all, it was common ground that they met up for coffee at Burwood on numerous occasions during the relevant period." The relevant affidavit of Mr Elias deposed that his invitation to participate in the acquisition of No 13 was extended in a meeting in August 2002, and that it was declined by Ms Dagher in the following words: "George, we are not in a position to purchase any thing at this time. We currently have financial difficulties. We are having problems with Westfield our business landlord at the Miranda centre. It looks as though we could loose [sic] $350,000.00. Our business is in a lot of trouble. I am not interested in more investment. You buy it and if we can later develop 16 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [101]. Callinan Crennan it with 11 Deane Street, we can take a space equivalent to our space in 11 Deane Street. Otherwise if we get a good price for our property we will consider selling it. It is too much pressure on us at this point of time." Miss Dagher responded to this part of Mr Elias's affidavit thus: "I ... say that the meeting referred to by Mr Elias ... never took place. I further say that the reason that Sadie Elias and I gave up our business in Miranda was that the lease on the premises had expired and we did not wish to renew it." In cross-examination Ms Dagher made concessions which the trial judge said, very mildly, revealed her affidavit to have been "less than frank and forthcoming". He summarised them as follows17: "Say-Dee had purchased a café business at Miranda in April 1999 for $285,000, $245,000 of which was apportioned to goodwill. The rent for the premises was $193,500 and the lease was to expire on 2 August 2000. Ms Dagher conceded that the Miranda café business proved very uneconomic and that it would have been very difficult to make the business profitable if the lease had been renewed. She conceded that Say- Dee was not able to sell the goodwill of the business and that by August 2002 it had lost its investment of $285,000 in the business." In cross-examination she said the rent was to increase "dramatically"; in re- examination she said it was close to a 10 per cent increase. The trial judge added the following further findings18: "Further, in March 2000 Ms Dagher had sold her interest in a restaurant business called 'Italian Flavour'. Ms Dagher conceded that that business had not been doing well. As at the date of sale, there were arrears of rent and interest amounting to just over $31,000. The income tax returns of Ms Dagher and Ms Elias for the years ended 30 June 2000, 2001 and 2002 disclose that neither received a substantial income in those years." 17 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2004] NSWSC 800 at [49]-[50]. 18 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2004] NSWSC 800 at [51]-[52]. Callinan Crennan The trial judge said that the evidence on which these findings were based was consistent with Mr Elias's account of the August 2002 conversation. During the hearing of the appeal to this Court, counsel for Say-Dee handed up a large schedule of evidence about the supposed financial ability of Say-Dee to have acquired No 13 and No 15 had Mr Elias offered them, and its willingness to do so. That "ability" depended on the employment of the personal assets of Ms Dagher, which included two blocks of land, a 50 per cent shareholding in Pacific Islands Express Pty Ltd, a 50 per cent shareholding in Teilwar Pty Ltd and an undefined non-shareholding interest in Dagher A Family Company Pty Ltd. The purchase price of No 15 and No 20 was $2,060,000 and the purchase price of No 13 was $1,680,800. Half of that total of $3,740,800 is $1,870,400. Half the purchase price of No 13 ($1,680,800) and No 15 ($1,080,000) is $1,380,400. Ms Dagher gave evidence that she "would ... have put forward [her] own personal assets in order to fund the purchase of half the equity in" No 13 and No 15. One of the blocks of land Ms Dagher owned was valued at $485,000 in 2001 and the other one was valued at $500,000 in 2003. In November 2001 the amount owing on the loans secured by mortgage on those properties was about $172,000. There was thus some equity to support further borrowings although Ms Dagher's capacity to service them was not clear. Ms Dagher also said in evidence that so far as she was a director of companies she would have voted to utilise their resources to assist in purchasing No 13 and No 15. Mr Dagher, who was Ms Dagher's business partner and former husband, said: "At all times since 1998 to the present I have been prepared to exercise my rights as a director of and shareholder in each of the Companies to assist Dalida Dagher and Say-Dee Pty Limited in purchasing 50% of each of [No 13 and No 15] and would have exercised my rights to have the Companies assist in the purchase of the Properties had they been offered to Ms Dagher or Say-Dee Pty Limited." This is a rather contrived piece of evidence, since No 15 was not for sale in the period 1998 to early 2001, and No 13 was not for sale in the period 1998 to mid 2002. The "Companies" to which he referred are the three just mentioned. There was conflicting evidence about whether Ms Dagher was a director of Pacific Islands Express Pty Ltd19, but in 2002 it had a net worth of $52,767, while in 2001 it had a net deficiency of assets of $155,774. Mr Dagher explained this by 19 See below at [85]. Callinan Crennan saying that the assets were recorded at book value, not market value. But the assets were certainly heavily encumbered. While in 2002 it made $208,541 after income tax, in 2001 it lost $79,327. Ms Dagher was a director of Teilwar Pty Ltd. It had substantial assets. In 2001 it made a post tax profit of $19,363 and in 2002 $264,652. Ms Dagher was not a director of Dagher A Family Company Pty Ltd. In 2001 it had assets of $10,881 and in 2002 assets of $43,758. In 2001 its post tax profit was $25,221 and in 2002 $32,877. Neither Ms Dagher nor Mr Dagher explained how it was thought bona fide to be in the best interests of each of the three companies as a whole to fund Say-Dee's purchase of a half share in No 13 or No 15. Nor did they explain which assets would be realised for that purpose, or how loans were to be raised for that purpose against company assets. The claim that Say-Dee was able and willing to have funded purchases of half shares of No 13 and No 15 had they been offered flies in the face of the trial judge's finding that had Say-Dee been asked to participate, it would have declined for financial reasons. The trial judge's finding involved a rejection of the evidence by Ms Dagher and Mr Dagher that they would have employed assets they controlled to acquire No 13 and No 15. The Court of Appeal accepted that finding. To challenge the Court of Appeal's acceptance of that finding would call for the point to be raised in the notice of contention, and it has not been. Further, the concurrent findings of the courts below on this point accord with the probabilities. To undertake a development involving three properties is a much bigger thing than undertaking a development involving one of them. The chance of profits might be greater, but so are the costs, the time involved, and the risks. What is more, in 2001 Ms Elias had been diagnosed with cancer, and this no doubt affected Say-Dee's financial capacity as well as its capacity to participate in a widened joint venture. The position, then, is this. Ms Dagher denied a meeting, and chose to invite acceptance of her denial by an implicit claim that Say-Dee was financially healthy. In fact that claim was quite untrue. It is not made true by the fact that Ms Dagher had some equity in her plots of land or interests in three companies of varying degrees of financial strength. Neither Ms Dagher nor Ms Elias pointed to any of the "numerous occasions" on which the parties met at which they disclosed their financial difficulties, nor to any "different" context in which this disclosure might have been made. And Mr Elias was not asked to accept that the disclosure was made "at different times and in different contexts" from the time and context of the meeting he described as having taken place in August 2002. Callinan Crennan The concealed offer. Another feature of the Court of Appeal's reasoning is a heavy reliance on the concealed offer which Mr Elias made in October 2002 to buy No 11, by representing that he was a consultant to the purchaser rather than the actual purchaser. In the admittedly lengthy part of the Court of Appeal's reasons for judgment which dealt with the extent of Say-Dee's knowledge of Mr Elias's acquisition of No 13 and No 15, this incident is mentioned in no fewer than 11 paragraphs. In particular this incident is used to support the conclusion that it was glaringly improbable that Mr Elias disclosed to Ms Dagher or Ms Elias his proposed acquisitions of No 13 and No 15. The Court of Appeal made too much of the concealed offer incident. It is true that the incident did not reflect well on Mr Elias as a person, and his evidence about it did not reflect well on his credibility as a witness. His counsel said that his conduct contravened his duty as principal of Farah, the manager of the joint venture; that he did not seek to suggest there was anything about the incident which he should be proud of; and that any profit he made by buying at an undervalue would have been recoverable by Say-Dee. But, quite apart from the difficulties the parties placed themselves under by an inefficient approach to document retention, a failure to make records of vital conversations, and a somewhat sloppy approach to the terms of their affidavits, the fact is that the conduct of each side conveys a chiaroscuro impression. Mr Elias made his concealed offer and gave untrue evidence about it; there are also other difficulties and inconsistencies in his evidence. On the other hand, both the principals of Say-Dee swore inconsistent affidavits. Ms Dagher was found by the trial judge to have been "less than frank and forthcoming" about why the lease of the Miranda coffee shop was not renewed20. Ms Dagher in cross-examination said she had never seen the development applications which Mr Elias had made to the Council, and in her next breath, on being shown the second one, admitted that she had signed it. Ms Dagher in an affidavit said she was a director of Pacific Islands Express Pty Ltd, a statement supported by Mr Dagher in an affidavit, but in oral evidence he said she was not and she said she was not sure. Neither side could be described as wholly reliable or wholly honest, and none of the judges below did so. Further, the significance of the concealed offer incident depends on the time at which it took place. By late October 2002, the parties were not on good terms. The Court of Appeal appeared to criticise the trial judge for finding that Mr Elias's motivation for making the concealed offer "was to avoid the 20 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2004] NSWSC 800 at [48]. Callinan Crennan disputation which was likely to arise if he himself made an offer directly". The Court of Appeal said that this motivation was not based on any submission made at the trial or on any evidence by Mr Elias. But this did not preclude the trial judge from making the finding he made. It is obvious that disputation was likely to arise, and the Court of Appeal did not actually reverse the trial judge's finding; in any event, it was plainly correct. If the Say-Dee principals are to be believed – and the Court of Appeal, who had not seen them, accepted them – much had been concealed from them, and this accounted for their distrust. If Mr Elias is to be believed – and the trial judge, who had seen him, believed him – he was in the following position: he had worked for four and a half years to bring the redevelopment of No 11 to fruition, his joint venture partner had twice refused to assist in the redevelopment of No 13 and No 15 which the Council saw as necessary, and he had no alternative but to attempt to get No 11 for himself, for their refusal to participate in a joint development meant that No 11 might not be developed at all. That is why the trial judge said that while his conduct in making the concealed offer was "certainly not excusable", it "may be understandable in the circumstances". But the state of affairs that existed in late October 2002 was not the same as that which existed on 30 June 2001, just before exchange took place on No 15, or 15 August 2002, just before exchange took place on No 13. The Court of Appeal's reasoning seems to treat the buying out of Say-Dee from No 11 as the goal of all Mr Elias's manoeuvrings over the years. It is fanciful, however, to attribute to Mr Elias, as the Court of Appeal's reasoning seems to, a long-devised grand plan to acquire No 15 and No 13 for himself and then to buy Say-Dee out of No 11. The reality is that the concealed offer incident is not an intrinsically decisive or even significant event. If, as the trial judge did, it is taken into account as going to credit but it is concluded for other reasons that Mr Elias disclosed the prospective purchases and invited Say-Dee's participation, the incident is not fatal to that conclusion. If, as the Court of Appeal did, that conclusion is rejected, the incident is a factor adverse to Mr Elias among other factors, but it is scarcely decisive: the Court of Appeal's view could stand without it, depending on the merits of the other considerations which the Court of Appeal took into account. The probability that Mr Elias would ask Say-Dee to join in acquiring No 13 and No 15. The trial judge said he found "it inherently probable that Mr Elias would have asked Ms Dagher and Ms Elias if they were interested in acquiring Nos 13 and 15." He also said that it "would have made obvious commercial sense for Mr Elias to endeavour to raise funds for the proposed Callinan Crennan acquisition of Nos 13 and 15 from his co-investors in No 11." The Court of Appeal in effect rejected this finding on the ground that Mr Elias had strong motives of self-interest not to invite Say-Dee in. It justified that view by reference, apart from the suitability of the sites for combined development, to three matters: the failure of Mr Elias to convey to Say-Dee the view of Council that amalgamation was essential if any development application was to be approved; the rejection of the trial judge's finding that Mr Elias had difficulty in raising money; and the concealed offer. It has already been concluded that Mr Elias did convey the Council's attitude21; that Mr Elias did have financial difficulties22; and that the significance of the concealed offer has been greatly exaggerated23. Since the premises for the Court of Appeal's conclusion as to the improbability of Mr Elias asking Say-Dee to join in developing No 13 and No 15 fail, the conclusion itself becomes unsupported. The Court of Appeal's reasoning considered. The Court of Appeal concluded that the trial judge's findings should be set aside as "both glaringly improbable and contrary to compelling inferences"24. The justifications given by the Court of Appeal for that conclusion were expounded over more than 20 pages of its reasons for judgment. Many of the matters referred to have been dealt with above: Mr Elias's failure to disclose why the acquisition of No 15 might be advantageous, subject to acquiring No 13, given the Council's attitude to the redevelopment of No 1125; Mr Elias's offer of an interest only in No 15 with No 20, not No 15 alone26; Mr Elias's failure to disclose why the acquisition of No 13 might be advantageous given the Council's attitude to the redevelopment of No 1127; exaggeration by the trial judge of the extent to which the evidence of Ms Dagher and Ms Elias was unsatisfactory28; misconstruction by the trial judge 21 See above at [30]-[42]. 22 See above at [69]-[77]. 23 See above at [84]-[88]. 24 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [131]. 25 See above at [63]-[65]. 26 See above at [65]. 27 See above at [66]-[68]. 28 See above at [50]-[62]. Callinan Crennan of evidence taken by the trial judge to suggest that Mr Elias was finding difficulty in raising money to buy No 13 and No 15 and in consequence the absence of any evidence to support that conclusion29; and the acceptance by the trial judge of Mr Elias's essential truthfulness as a witness being contradicted by the inconsistency of some of his findings with that evidence30. Then the Court of Appeal said that it was to the financial advantage of Mr Elias to keep secret from Say-Dee the fact that he or his interests had acquired No 13 and No 15 to enable them to be amalgamated with No 11 in order to meet the Council's requirement for a joint amalgamation designed to achieve the maximum development potential of No 11. It may be conceded that, depending on Mr Elias's perception of interest rates, other development costs, the extent to which a development application was opposed, future property values and other matters, it is possible that he perceived it as potentially advantageous to Farah for him to keep secret from Say-Dee the acquisition of No 13 and No 15. To conclude that the acquisition of No 13 and No 15 had been effected "to enable them to be amalgamated with No 11" is to beg the question. The Court of Appeal then set out eight factual matters by way of support for the conclusion just stated about the purpose of acquiring No 13 and No 1531. The first two were put thus32: "Such a conclusion is supported firstly, by the critical finding of the primary judge that the Council's consistent attitude that No 11 was too narrow to maximise its development potential and that it should be amalgamated with adjoining properties was not, in terms, conveyed to Say-Dee. Secondly, there was no finding by his Honour that such 29 See above at [69]-[77]. 30 See above at [48]-[49]. 31 Counsel for the appellants attacked these findings in part by reference to Mr Elias's evidence about what he said in disclosing the possible acquisition of No 13 and No 15. This is not a very useful course, since the very question under consideration is whether the trial judge's finding of disclosure based on that evidence should be restored. 32 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [122]. Callinan Crennan information was conveyed either in effect or in substance: nor should there have been." However, it was concluded above that in effect or in substance the attitude of the Council was conveyed by the Notice of Determination enclosed with the 16 July 2001 letter. The third factual matter was that the principals of Say-Dee "were completely inexperienced in the development of real estate whereas Mr Elias was highly experienced"33. This exaggerates the position, both in relation to Ms Dagher and Ms Elias and in relation to Mr Elias. One of Ms Dagher's companies was developing real estate by building a hotel. She herself had bought real estate for development. So had Say-Dee. And both Ms Dagher and Ms Elias were highly experienced in business. Further, their own affidavits reveal an appreciation of the idea that the larger the site the more likely it was that a large development would be approved34. As for Mr Elias, while he was certainly an experienced property developer, and some general problems in relation to property development were explored in his cross-examination, the precise quality of his experience is unclear. By itself his experience in property development does not justify the conclusion that the trial judge's findings on disclosure of the acquisitions should be reversed. The fourth factual matter was35: "[I]n cross-examination Mr Elias accepted that the whole purpose of redevelopment was to maximise the potential development of property ..., that his own view accorded with that of the Council that No 11 was too narrow to maximise its development potential ... and that that potential could only be realised if it was amalgamated with the adjoining properties." These are neutral factors. The fifth factual matter was36: "Mr Elias withdrew the second development application with respect to No 11 12 days after he had caused 33 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [122]. 34 See above at [34]. 35 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [122]. Callinan Crennan Lesmint to enter into a contract to purchase No 13." This is not significant: as the Court of Appeal said at a later point, "it was likely that [the second development application] would have been rejected if it had been pressed"37. Indeed the Council had already revealed its unsympathetic attitude on 12 March 2002. The sixth and seventh factual matters were put thus38: the purpose of "Sixthly, the second development [withdrawing application] was that it was 'a lot better' (and made commonsense as [Mr Elias] already owned No 15) to purchase No 13 and amalgamate the three sites ... Seventhly, at the time of the Council's first report referring to the necessity to amalgamate No 11 with the adjoining properties, he accepted that to minimise complications he should explore the possibility of acquiring the adjoining properties in order to get the development of No 11 through Council with the least resistance." (emphasis in original judgment) There is nothing sinister or determinative in the evidence summarised in relation to the sixth and seventh factors: they are neutral on the question of whether Mr Elias decided to develop the three sites together without advising Say-Dee, or whether he only decided to do so after offering Say-Dee a chance to participate and receiving a rejection. The eighth factual matter concerns the concealed offer. The exaggerated significance attached by the Court of Appeal to that incident has been considered already39. No doubt it is possible to take a different view from that taken by the trial judge in relation to the question whether Farah offered Say-Dee participation in a development involving No 13 and No 15. The Court of Appeal's view is a view which a trier of fact might have taken. However, the question is whether the Court of Appeal was right to reverse the different view which the trial judge 36 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [122]. 37 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [123]. 38 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [122]. 39 See above at [84]-[88]. Callinan Crennan took. The reasoning of the Court of Appeal – erroneous in parts, exaggerated in other parts, flawed in other ways – does not demonstrate that the trial judge's view, which was, in significant part, demeanour-based, was either glaringly improbable or contrary to compelling inferences. Accordingly the Court of Appeal's finding must be rejected and the trial judge's finding restored. Did Mrs Elias and her daughters have actual knowledge of Say-Dee's rights? Say-Dee contended that the Court of Appeal should have inferred that Mrs Elias and her daughters had actual knowledge of Farah's breach of fiduciary duty. Say-Dee argued that any inference available on the evidence suggesting that Mrs Elias and her daughters had actual knowledge could be drawn the more strongly because of their failure to give evidence denying it40. The difficulty in the reasoning is that there is no evidence supporting an inference that Mrs Elias and her daughters had actual knowledge. The respondent also submitted that the daughters, aged 15 and 17, were old enough to discuss their father's conduct, and this supported a presumption that what he knew they knew. This reasoning is invalid. Scope of Farah's fiduciary duty The trial judge decided that Farah was under no fiduciary duty to disclose to Say-Dee the opportunity to acquire No 13 and No 15, and under no fiduciary inhibition from acquiring them for itself. The trial judge's reasoning proceeded in three stages: The scope of Farah's fiduciary duty to Say-Dee was defined by the obligations it assumed in its contract with Say-Dee, the terms of which are recorded in the letter of 20 April 199841. Those contractual obligations were limited to the acquisition and development of No 11. Those contractual obligations, and hence Farah's fiduciary obligations, did not extend to any duty to make available to Say-Dee an opportunity to invest in development projects other than developing No 11, such as "a 40 Jones v Dunkel (1959) 101 CLR 298. 41 See above at [11]. Callinan Crennan possible development of No 13, or a possible development of No 15, or a possible amalgamated development of Nos 13 and 15, or a possible amalgamated development of Nos 11, 13 and 15"42. The Court of Appeal appeared to accept proposition (a). However, the Court of Appeal disagreed with propositions (b) and (c). It said that the agreement recorded in the letter of 20 April 1998 was "very bare in its terms and certainly did not set out in any detail or at all the fiduciary obligations which the parties ... undertook"43. That is true. But the Court of Appeal's conclusion was that the purpose of the joint venture was to redevelop No 11 "in such a manner and to such an extent as would, with the Council's approval, maximise the profit which might be generated therefrom"44. The difficulty in this conclusion is that a purpose of that kind is unsupported by anything in the letter of 20 April 1998 or the negotiations preceding it. The letter mentions sums of money sufficient to buy "the above property", ie No 11; it mentions the borrowing of money on the security of "the subject property", ie No 11; but it says nothing about the much larger sums of money which would be needed to buy and develop land adjacent to No 11. For that reason the conclusion of the trial judge in relation to proposition (b) is to be preferred. Contrary to proposition (c) in the trial judge's reasoning, Farah had a duty to disclose to Say-Dee the information that the Council saw amalgamation of the redevelopment of No 11 with adjoining properties as necessary in order to maximise its development potential, and the information that No 15 and No 20, and later No 13, were available for purchase. The information about the Council's attitude came to Farah in its fiduciary capacity; and while the other items of information did not, they represented opportunities which it was not open to Farah to exploit, consistently with its fiduciary duty, unless Say-Dee gave its informed consent to a contrary course. That is because to exploit those opportunities without informed consent would be to place Farah in a position of conflict between its self-interest and its duty to Say-Dee in relation to No 11. On occasion the appellants pressed an argument that even if there was an obligation of disclosure in relation to the opportunity to buy No 13, there was no such obligation in relation to No 15 on the basis that when the opportunity to buy 42 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2004] NSWSC 800 at [76]. 43 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [157]. 44 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [140]. Callinan Crennan it arose in 2001, No 13 was not available for redevelopment at that time or any foreseeable time. That argument is not sound. In 2001 the chance of a redevelopment of No 11 and No 15 together was lower than it became when No 13 came onto the market in 2002, but there was at least a theoretical possibility of the latter event, and the opportunity was still one which Farah had a duty to disclose to Say-Dee. Indeed the appellants, who supported the trial judge's conclusion that the joint venture was narrow in scope, conceded that Farah was obliged to disclose information which came into its possession in its capacity as manager of the joint venture (for example, the information about the Council's attitude), and also to disclose "information which affects the viability of development in respect of" No 11 (for example, the information about the opportunities to buy No 13 and No 15). If that concession were not correct, Farah would be in a position of conflict of interest and duty in negotiating with Say-Dee about how No 11 and No 13 could be developed together. Hence, even on the narrower approach of the trial judge, Farah had an obligation to disclose information about the Council's view and the opportunities to buy. The same obligation, of course, would exist on the wider approach of the Court of Appeal. Did Farah fulfil its obligations of disclosure? The Court of Appeal's factual findings led it to the conclusion that Farah breached its fiduciary duties because it used "valuable information" acquired from the Council about a method of exploiting the development potential of No 11: this led it into, and resulted in it obtaining a benefit by, acquiring No 13 and No 15, and this placed it in a position of conflict between its self-interest as purchaser of No 13 and No 15 and its duty to Say-Dee. But it was concluded above that the Court of Appeal's factual findings must be reversed45. The reversal of those findings means that Farah fulfilled its obligation of disclosure about the Council's attitude. On those findings, there is also no doubt that Say- Dee gave consent to what Mr Elias did. The question is whether the consent which Say-Dee gave to Farah pursuing the opportunities to buy No 13 and No 15 on behalf of Mr Elias's interests was sufficiently informed. Say-Dee submitted that it had not been given an opportunity to give informed consent to a development of aggregated plots of land including No 11. 45 See above at [30]-[99]. Callinan Crennan It is true that Farah's disclosures were at different times and in different ways46. There was no single occasion on which Mr Elias explained all he knew about the Council's attitudes and why the acquisition of adjoining properties was advantageous in the light of that attitude. But the sufficiency of disclosure can depend on the sophistication and intelligence of the persons to whom disclosure must be made. In their joint judgment in Maguire v Makaronis47, Brennan CJ, Gaudron, McHugh and Gummow JJ said: "What is required for a fully informed consent is a question of fact in all the circumstances of each case and there is no precise formula which will determine in all cases if fully informed consent has been given." The principals of Say-Dee had much business experience and intelligence. The remarks they made in conversations with Mr Elias, both as recorded by themselves and as recorded by him, showed them to be shrewd and astute. As counsel for the appellants said, they were not "babes in the woods". The glaring improbability in this case is that the officers of the respondent would not readily have deduced, from their own experience, what they accepted Mr Elias did tell them, and the prolonged course of the dealings with the Council, that the acquisition and amalgamation of adjoining parcels of land would be the best way to find favour with the Council for a development of the kind which the officers of the respondent claimed they wished to pursue. In those circumstances the disclosure of the Council's attitude by sending the Notice of Determination and the disclosure of the opportunities to buy No 15 and No 20 in 2001, and also No 13 in 2002, were sufficient disclosures, and the consent which Say-Dee expressed was informed consent. Say-Dee's indication of unwillingness to participate jointly with Farah in a larger redevelopment is thus not a barrier to Farah proceeding on its own behalf. In argument the question arose whether, if 46 While Farah's disclosure of the intended acquisition of No 15 took place before the exchange of contracts on 30 June 2001, its disclosure of the Council's attitude to an amalgamated development took place after that date, when the letter of 16 July 2001 was received. Say-Dee did not submit that this diminished the efficacy of disclosure, and it does not, because the named purchasers on the contracts for the sale of the units in No 15 were the members of the Elias family "or nominee": had Say-Dee accepted Mr Elias's invitation, or informed him after receipt of the 16 July 2001 letter that it wished to accept the invitation, the family members could have nominated the Say-Dee/Farah partnership as transferees. 47 (1997) 188 CLR 449 at 466 (footnote omitted). Callinan Crennan the only profitable way of redeveloping No 11 was as part of a joint redevelopment with adjoining land, Farah was debarred from proceeding even if Say-Dee gave its informed consent. The question does not arise, because it was not established that the redevelopment of No 11 by itself would not be profitable. Another possible question is whether, if Say-Dee, after being given full information, refused consent, Farah was debarred from proceeding. That question too does not arise, because it did give informed consent. Having reached the conclusion that Farah was under no fiduciary duty to disclose to Say-Dee the opportunity to acquire No 13 and No 15 and under no fiduciary inhibition against acquiring them for itself, the trial judge did not find it necessary to go further. It was, however, necessary for the Court of Appeal to go further. Since the further steps in its reasoning were, with respect, flawed, it is desirable to examine that reasoning, on the assumption (contrary to the conclusions just reached) that by reason of Mr Elias's conduct Farah was in breach of fiduciary duty to Say-Dee. Liability of Mrs Elias and her daughters under the first limb of Barnes v Addy There was no dispute about the fact that, subject to the operation of the Real Property Act, s 4248, if Farah was in breach of its fiduciary duty to Say-Dee, Mr Elias was liable, being in the same position, and that Lesmint was also liable, since it was Mr Elias's alter ego. Hence the imposition of constructive trusts over the items of property in the names of Mr Elias and Lesmint was an available remedy. The position was much more controversial in relation to the three units in No 15 in the names of Mrs Elias and her two daughters. The Court of Appeal found them liable under the "first limb" of Barnes v Addy, and also on a restitutionary basis. The respondent also argued for other bases of liability. The "rule in Barnes v Addy" stated. In Barnes v Addy49 Lord Selborne LC said: "Those who create a trust clothe the trustee with a legal power and control over the trust property, imposing on him a corresponding responsibility. That responsibility may no doubt be extended in equity to others who are not properly trustees, if they are found either making themselves trustees 48 Discussed below at [190]-[198]. 49 (1874) LR 9 Ch App 244 at 251-252. Callinan Crennan de son tort, or actually participating in any fraudulent conduct of the trustee to the injury of the cestui que trust. But, on the other hand, strangers are not to be made constructive trustees merely because they act as the agents of trustees in transactions within their legal powers, transactions, perhaps of which a Court of Equity may disapprove, unless those agents receive and become chargeable with some part of the trust property, or unless they assist with knowledge in a dishonest and fraudulent design on the part of the trustees." The form of liability referred to in the first part of the last sentence is often called the "first limb" of Barnes v Addy, and the form of liability referred to in the second part of the last sentence is often called the "second limb". In Barnes v Addy itself, the Court of Appeal in Chancery (Lord Selborne LC, James and Mellish LJJ) upheld the decision of Wickens VC50 that two solicitors, Mr Preston and Mr Duffield, had not received any trust property and had no knowledge of any dishonest and fraudulent design to make them parties to the breach of trust by the sole trustee. It was insufficient that Mr Preston had been alive to the danger of the course of appointing a sole trustee and that Mr Duffield had prepared the appointment of that trustee. the and limb second involving "knowing It has become common to describe the first limb as involving "knowing receipt" assistance". Lord Selborne LC did not use the expression "knowing receipt". It seems to have been employed first in 1966 by the editors of Snell's Principles of Equity51. Even then, it was only introduced by inserting under the pre-existing heading "Receipt of Trust Property by Stranger to Trust" a new sub-heading "Knowing Receipt or Dealing". However, in 1972 Brightman J adopted the expression in Karak Rubber Co Ltd v Burden (No 2)52. He said that the labels "knowing receipt or dealing" and "knowing assistance" employed by Snell were "an admirable shorthand description of their different natures". Those labels have been commonly used since then. In contrast, Lord Selborne LC's expression was "receive and become chargeable"53. Persons who receive trust property become chargeable if it is established that they received it with notice of the trust. 50 Barnes v Addy (1873) 28 LT (NS) 398. 51 Megarry and Baker (eds), Snell's Principles of Equity, 26th ed (1966) at 202; cf 25th ed (same editors) (1960) at 173. 52 [1972] 1 WLR 602 at 632-633; [1972] 1 All ER 1210 at 1234-1235. 53 Barnes v Addy (1874) LR 9 Ch App 244 at 251. Callinan Crennan In recent times it has been assumed, but rarely if at all decided, that the first limb applies not only to persons dealing with trustees, but also to persons dealing with at least some other types of fiduciary54. Since the appellants did not contend that the first limb was incapable of applying on the ground that neither Farah nor Mr Elias was a trustee, the correctness of this assumption need not be examined. The Court of Appeal's reasoning on the first limb. The Court of Appeal made the following finding55: "[T]he Elias family members and Lesmint were ... complicit in the acquisition of Nos 15 and 13 respectively in that they were not bona fide purchasers without notice and for value of the fruits of the valuable intelligence obtained by Mr Elias with respect to the Council's intransigent attitude to the redevelopment of No 11 of which, through Mr Elias as their agent, they took advantage by purchasing those properties." The Court of Appeal, which attributed this conclusion to a submission by Say- Dee, held that this meant that the first limb of Barnes v Addy applied. The Court of Appeal found that "neither the daughters (certainly) nor Mrs Elias (probably) were purchasers of their units in No 15 for value"56. At the time when contracts were exchanged on the units in No 15, one daughter was aged 15 and the other 17. The Court of Appeal said that Mrs Elias and her daughters "may have been unaware" of the breach of fiduciary duty it found had been committed, and that there was "no evidence" that they had "actual knowledge that their respective interests in No 15 had been acquired on their behalf by Mr Elias in breach of his fiduciary duties to Say-Dee"57. However, the Court of Appeal found58: 54 For example, in DPC Estates Pty Ltd v Grey and Consul Development Pty Ltd [1974] 1 NSWLR 443 at 459-460, Jacobs P assumed that if property were received by a stranger from a fiduciary in breach of fiduciary duty, the first limb applied. See also El Ajou v Dollar Land Holdings plc [1994] 2 All ER 685 at 700 per Hoffmann LJ. 55 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [175]. 56 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [213]. That conclusion is examined and rejected elsewhere at [72]-[75] and [157]. 57 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [210]. 58 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [215]. Callinan Crennan "[I]n arranging for three of the units in No 15 to be purchased in the names of each of Mrs Elias and their two daughters, Mr Elias was acting as their agent. It follows that his knowledge of the breaches of his and/or Farah's fiduciary duties to Say-Dee is thus imputed to the family members for whom he was transacting those purchases. Each therefore had constructive knowledge of their husband's/father's wrongful conduct. The first or recipient liability limb of Barnes v Addy was therefore satisfied." The Court of Appeal went on to state an alternative basis for granting relief against Mrs Elias and her daughters based on unjust enrichment. But it made no finding that the second limb of Barnes v Addy was satisfied. It is necessary to reject the Court of Appeal's conclusion that the first limb of Barnes v Addy applied for two reasons: there was no relevant receipt of property, and there was no relevant notice. Non-application of the first limb: no receipt of property to which a fiduciary obligation attached. Did the Court of Appeal establish that Mrs Elias and her daughters received property to which a fiduciary obligation attached? The breach of fiduciary duty by Farah found by the Court of Appeal lay in Farah's procurement of the acquisition by Mrs Elias and her daughters of their units in No 15 while not disclosing to Say-Dee why the acquisition of No 15 was advantageous in view of Council's refusal to permit the redevelopment of No 11 without adjoining properties being involved, and hence failing to get Say-Dee's informed consent to the acquisition. On the Court of Appeal's earlier findings, the fiduciary duty related to an item of information which Mr Elias learned from the Council reports. The relevance of the information was that59: "[T]he Council reports were conveying or telegraphing a particular piece of information with respect to the Council's future attitude to any proposed development if No 11 was amalgamated with the adjoining properties, namely, that subject to achieving a positive urban design outcome, it would most likely be approved or, at least, recommended for approval." this an "additional dimension", "valuable The Court of Appeal called information", vital intelligence" and "part of the intellectual stock-in-trade of the original joint venture if it needed to be wound up". The expression "vital intelligence" suggests, inaptly, the mystery and secrecy of a clandestine world far 59 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [60]. Callinan Crennan removed from the day to day dealings and easily ascertainable attitudes of planning bureaucrats. The accuracy of the expression "intellectual stock-in- trade" was specifically advocated by Say-Dee, but in truth it is misleading. The expression "stock-in-trade" usually refers to the goods kept on sale by a dealer, shopkeeper or peddler. It can also refer to a workman's tools, appliances or apparatus. A more figurative meaning is the abilities or resources characteristic of or belonging to a particular group. The information which the Court of Appeal considered Mr Elias had learned falls into none of these categories. For the following reasons there was no receipt of property within the meaning of the first limb of Barnes v Addy. The information which the Court of Appeal thought that Mr Elias ought to have disclosed was not confidential. So far as that information was in the Notice of Determination, that document was available for public inspection. The Notice of Determination was a document which had to be notified to the applicant and various other persons pursuant to s 81(1) of the Environmental Planning and Assessment Act 1979 (NSW). Clause 266 of the Environmental Planning and Assessment Regulation 2000 (NSW) created an obligation on the Council to retain the Notice of Determination. Clause 268(1)(b) imposed an obligation on the Council to make the Notice of Determination available for inspection by the public. So far as the relevant information was in the report of 3 April 2001 by the Council's Group Manager, Environmental and Community Services, to the Building and Development Committee, which, letter of 8 March 2001 from the Department of Urban Affairs and Planning, it was reported and discussed at the meeting of that Committee on 3 April 2001. That meeting was open to the public, and the minutes were available for inspection at the Council's Public Library60. The same applies to the Group Manager's report of 20 June 2000 and the Building and Development Committee meeting on 26 June 200061. An inquirer at the Council about the development potential of No 11 would be informed of the planning instruments affecting the development potential of No 11. A persistent inquirer, particularly one with a genuine commercial interest, would no doubt be able to obtain an interview with an informed Council officer. In Consul Development Pty Ltd v DPC Estates Pty Ltd62 Stephen J denied that knowledge of property development applications, "the inter alia, summarised the 60 The documents referred to are described at [15]. 61 See above at [13]. 62 (1975) 132 CLR 373 at 414. Callinan Crennan essence of which was wholly in the public domain", was property capable of being owned by anyone. Even if the information were confidential, that would not make it property for the purposes of the first limb of Barnes v Addy. The protection given by equitable doctrines and remedies causes confidential information sometimes to be described as having a proprietary character, "not because property is the basis upon which that protection is given, but because of the effect of that protection"63. Certain types of confidential information share characteristics with standard instances of property. Thus trade secrets may be transferred, held in trust and charged64. However, the information involved in this case is not a trade secret. Further, the evidence does not show that any attempt was made to transfer the relevant information to Mrs Elias and her daughters. It shows only that what they got was property the availability of which was ascertained by Mr Elias. It is erroneous to speak of the acquisition of the three units in No 15 by Mr Elias's family as receipt of trust property, because the three units cannot be described as trust property. Nor are they the traceable proceeds of trust property, because the "information cannot be traced into" the units65. Counsel for the respondent accepted that under received doctrine, the expression "trust property" does not include information, whether confidential or not66. He relied on a brief passage in DPC Estates Pty Ltd v Grey and Consul Development Pty Ltd67 tentatively suggesting that "the position of a third party obtaining from a fiduciary advantages in the form of information and assistance should be analogous to that of a third party obtaining property from a fiduciary." 63 Smith Kline & French Laboratories (Aust) Ltd v Secretary to Department of Community Services and Health (1990) 22 FCR 73 at 121 per Gummow J; see also Breen v Williams (1996) 186 CLR 71 at 129 per Gummow J. 64 Smith Kline & French Laboratories (Aust) Ltd v Secretary to Department of Community Services and Health (1990) 22 FCR 73 at 121 per Gummow J. 65 Satnam Investments Ltd v Dunlop Heywood & Co Ltd [1999] 3 All ER 652 at 671. 66 In this respect the view of Jacobs P in DPC Estates Pty Ltd v Grey and Consul Development Pty Ltd [1974] 1 NSWLR 443 at 460 stands in isolation. 67 [1974] 1 NSWLR 443 at 470 per Hutley JA. Callinan Crennan However, Hutley JA proceeded to quote Lord Selborne LC's speech in Barnes v Addy and to conclude that there was liability under the second limb of Barnes v Addy. Counsel for the respondent was not able to point to any case specifically decided on the first limb of Barnes v Addy which had involved a breach of fiduciary duty as distinct from a breach of trust in relation to property other than trust property. Counsel for the respondent frankly acknowledged that the respondent could not bring the case within the first limb of Barnes v Addy unless the law were changed. He submitted that if it were not changed to render the members of Mr Elias's family liable, it would be easy for persons who had misappropriated trust property or wrongly exploited opportunities in breach of fiduciary duty to evade equitable relief by the "device" of placing the gains in the names of "close family members or other third parties (including corporations)." He cited Attorney-General for Hong Kong v Reid where the Privy Council said68: "[P]roperty which a trustee obtains by use of knowledge acquired as trustee becomes trust property." But it does not follow under the law as it stands that the information which third parties obtain from a fiduciary is trust property, or that land bought by using that information is trust property, and indeed counsel only relied on the passage as "an indication of the possible extension of the first limb" to treat property acquired as the fruit of information misused by a fiduciary as trust property. The change in the law in Australia for which the respondent contended was part of a more comprehensive submission that the law conform to the following three propositions. "(i) A third party who has directly received a financial benefit as a result of a non-trivial breach of trust or fiduciary duty should be accountable for that benefit to the fiduciary of the trust/duty if he/she knew or had reason to know of the essential facts which constituted the breach. (ii) A third party who receives such a benefit without knowledge of the essential facts constituting the breach should still be accountable unless, and to the extent that, a relevant defence can be established by them – such as bona fide purchaser for value without notice, or change of position. 68 [1994] 1 AC 324 at 332. Callinan Crennan (iii) A third party who has not received such a benefit but has participated in a significant way in a significant breach of duty/trust with actual knowledge of the essential facts which constituted the breach should be liable to the beneficiary of the duty/trust for the consequences of the breach." Paragraph (i) is a modification of the first limb of Barnes v Addy, par (ii) reflects a theory of recovery based on unjust enrichment adopted by the Court of Appeal69 and par (iii) is a modification of the second limb of Barnes v Addy70. Here it is only necessary to discuss par (i). Paragraph (i) has some similarities with the first of the Court of Appeal's findings71 about the first limb of Barnes v Addy. However, to substitute par (i) for the first limb of Barnes v Addy would be a radical change: it abandons the requirement for receipt of property, and it alters the notice test. To introduce a change of that kind would call for very careful examination of the possible consequences. That examination was not conducted in argument. In any event, in view of the availability of relief under the second limb of Barnes v Addy, and the protection of confidential information under the general law, no sufficient reason was demonstrated for any change to legal doctrine in the manner advocated by the respondent. Even if such changes were made, they would not assist the respondent: Mrs Elias and her daughters would fall outside par (i) of the respondent's proposal. This is because even if Farah is assumed to have been in breach of fiduciary duty, Mrs Elias and her daughters have not been shown to have known, or to have had reason to know, the essential facts which constituted that breach by Farah. Non-application of the first limb: no agency and no notice. The Court of Appeal did not find that Mrs Elias and her daughters had express notice of any breach of duty by Farah or Mr Elias. Above a contention advanced by the respondent that the Court of Appeal ought to have found express notice was rejected72. But the Court of Appeal did find that because Mr Elias was acting as agent for Mrs Elias and her daughters, they had "constructive knowledge" of his 69 Discussed below at [130]-[158]. 70 Discussed below at [159]-[186]. 71 Quoted above at [114]. 72 See above at [100]. Callinan Crennan breach. The respondent preferred to describe the relevant notice as "imputed actual knowledge". The Court of Appeal's conclusion was wrong, and this is an additional reason why the first limb of Barnes v Addy does not apply. The proposition that Mr Elias was acting as the agent for his wife and daughters is highly questionable. The respondent submitted: "The Appellants do not dispute that Mr Elias was relevantly acting as the agent of Mrs Elias and her daughters in their acquisition of the units at No 15 ... They implicitly concede as much in ground 6 of the Notice of Appeal73. This concession is correctly made in light of the cross- examination of Mr Elias, in which he accepted that he had done all the negotiations with the vendor, whom he had sought out of his own initiative, and none of the 4th-6th Appellants dealt with the vendor at all. Further, neither Mrs Elias nor either of the daughters gave evidence." The second sentence is wrong. It does not follow from the proposition stated in the third sentence that Mr Elias was an agent for Mrs Elias and her daughters. In relation to the fourth sentence, the respondent submitted that it could be inferred from Mr Elias's testimony that he had "a lot of discussion" with his wife about the purchase of the units in No 15 that his conduct was discussed; in fact there was no cross-examination of Mr Elias about the discussion, this inference does not arise, and hence the failure of Mrs Elias to give evidence does not cause it to strengthen pursuant to the doctrine associated with Jones v Dunkel74. However, the submissions of the appellants did accept that to some extent Mr Elias was acting as an agent for his wife and daughters. The appellants argued that Mr Elias obtained the relevant information outside the scope of his agency and before it arose. It was not gained in the course of any transaction on 73 Ground 6 was as follows: "The Court of Appeal was in error ... in concluding that because the Second Appellant acted as agent for the Fourth, Fifth and Sixth Appellants in negotiating the contracts under which they severally purchased units in 15 Deane Street, therefore they were bound by his own knowledge of his own breaches of fiduciary duty to the Respondent arising under an entirely different legal relationship, ie the Say-Dee- Farah Constructions partnership." 74 (1959) 101 CLR 298. Callinan Crennan which he was employed on behalf of his wife and daughters75. Certainly there is no evidence that the information which Mr Elias knew about what is assumed to be his breach of duty came into existence after any agency he entered for Mrs Elias and her daughters. The respondent did not dispute this. For all the evidence shows, Mr Elias conducted negotiations with the vendors of No 15 and No 20 and settled the terms of the purchase before seeking the cooperation of his wife to mortgage the family home. The respondent did submit that it was "that very knowledge which led to the acquisition of units by Mr Elias on behalf of Mrs Elias and her daughters", and that to treat it as arising outside the agency 75 The appellants relied on s 164(1)(b) of the Conveyancing Act 1919 (NSW), which provides: "A purchaser shall not be prejudicially affected by notice of any instrument, fact, or thing, unless: in the same transaction with respect to which a question of notice to the purchaser arises, it has come to the knowledge of the purchaser's counsel as such, or of the purchaser's solicitor or other agent as such, or would have come to the knowledge of the purchaser's solicitor or other agent as such, if such searches, inquiries, and inspections had been made as ought reasonably to have been made by the solicitor or other agent." However, this provision does not apply in relation to Torrens land. There is an assumption to the contrary in Bursill Enterprises Pty Ltd v Berger Bros Trading Co Pty Ltd (1971) 124 CLR 73 at 92-93 per Windeyer J, but the point was not argued. Section 6(1) provides: "Except as hereinafter provided, this Act, so far as inconsistent with the Real Property Act 1900, shall not apply to lands, whether freehold or leasehold, which are under the provisions of that Act." Where the Conveyancing Act makes a contrary provision, it does so explicitly, for example ss 19(3), 19A(3), 52, 69, 90, 116, 134(9), 147(2), 175(3), 177(10), 181(2), 181A(4), 181B(3), 184(4), 191 and 215. There is no contrary provision relating to s 164. Accordingly, s 164(1)(b) does not assist the appellants. Callinan Crennan would be artificial and inequitable. This submission is consistent with the respondent's submission that the inquiry is "simply to ask whether the circumstances are such that equity should impute the knowledge of Mr Elias" to his family. One problem with this suggested inquiry in relation to the first limb of Barnes v Addy is that to say that Mr Elias acquired the units "on behalf of Mrs Elias and her daughters" is to assume something neither proved nor found by the courts below – for Mr Elias did not acquire those three units, his family did. Another problem is that the suggested inquiry in relation to the first limb of Barnes v Addy is not necessarily likely to prevent inequitable results. The respondent relied on cases holding that where the task assigned to an agent is the task of making appropriate disclosures, for example, the task assigned by a person seeking insurance to an insurance broker, it is not necessary or appropriate to distinguish between information "which the agent has acquired in the course of executing the agency and information acquired otherwise"76. These cases have nothing to do with the present problem, because even if Mr Elias was an agent, his principals did not assign to him any task of making The respondent also relied on statements in a case in which one question was whether the failure by one party to object to a judge hearing a case amounted to waiver where the party did not, but its counsel did, know of possible grounds to object, even though counsel gained that knowledge in another capacity78. That case turned on the special nature of counsel's role in the conduct of litigation: "[W]hen a characterisation of the legal nature and quality of counsel's acts and omissions depends upon knowledge of some fact or circumstance, then counsel's clients are affected by that knowledge." Those circumstances are very remote from the present. Hoffmann LJ said in El Ajou v Dollar Land Holdings plc79 that 76 Permanent Trustee Australia Ltd v FAI General Insurance Co Ltd (In Liq) (2003) 214 CLR 514 at 548 [87] per Gummow and Hayne JJ, approving Permanent Trustee Australia Co Ltd v FAI General Insurance Co Ltd (2001) 50 NSWLR 679 at 697 [89] per Handley JA. 77 See El Ajou v Dollar Land Holdings plc [1994] 2 All ER 685 at 702-703 per Hoffmann LJ. 78 Smits v Roach (2006) 80 ALJR 1309 at 1320 [47] per Gleeson CJ, Heydon and Crennan JJ; 228 ALR 262 at 276. 79 [1994] 2 All ER 685 at 703-704. Callinan Crennan he knew of "no authority for the proposition that in the absence of any duty on the part of the principal to investigate, information which was received by an agent otherwise than as agent can be imputed to the principal simply on the ground that the agent owed to his principal a duty to disclose it." Even if Mr Elias owed a duty to his family to disclose his conduct, they had no duty to investigate it. The respondent also argued that there was no doubt that Lesmint was fixed with Mr Elias's knowledge, and it would be anomalous if the family were not fixed with it as well. But they are not in the same position. Lesmint is liable as the alter ego of Mr Elias: his mind is its mind80. The members of the family are separate individuals. It has not been shown that they are mere ciphers for Mr Elias. The respondent submitted that the family had "entrusted [Mr Elias] with effectively the same control over their affairs" as he had over the affairs of Lesmint or any other company he controlled, but there is no evidence that this is so. The respondent submitted that the wife and daughters had put Mr Elias "in the position of sole control over their affairs in respect of all of [these] matters." In fact that submission has not been established. Each case will depend on its own facts. Here, if Lesmint were employed as a device, the device would have failed had other obstacles to the respondent's success not existed. In each case it remains necessary for plaintiffs claiming against third parties dealing with errant fiduciaries to establish the elements of whatever cause of action is relied on. It is not the law that a universal regime of absolute liability applies. The consequence is that Mrs Elias and her daughters had no notice of any breach of duty by Mr Elias. Restitutionary liability The Court of Appeal's decision. The Court of Appeal held that even if Mrs Elias and her daughters had no notice of the breach of fiduciary duty, a constructive trust should be imposed on the units in No 15 by reason of liability "for restitution based on the unjust enrichment of Mrs Elias and the daughters at the expense of Say-Dee"81. It said that they had no defence because they were not purchasers for value and had not changed their position. The Court of Appeal considered that that type of liability, which did not depend on the 80 See Hamilton v Whitehead (1988) 166 CLR 121 at 127. 81 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [217]. Callinan Crennan plaintiff proving that the defendant had any notice, was "advocated by Professor Birks"82 and favoured by Hansen J83. The Court of Appeal said that "in the absence of any High Court authority to the contrary", it saw "no reason why the proverbial bullet should not be bitten by this Court in favour of the Birks/Hansen approach"84. Hence the Court of Appeal held that Mrs Elias and her children held their units on constructive trust for the joint venture85. It was a grave error for the Court of Appeal to have taken this step. That is so for two reasons: it was very unjust and it has caused great confusion. Injustice to the parties. Although the matter is not wholly clear, and although the Court of Appeal found Mrs Elias and her daughters liable on another ground, so that the restitutionary basis was not essential to the outcome, the reasoning appears to be offered not as supposedly helpful obiter dicta but as an independent ground of decision. It was unjust to the appellants to decide the respondent's appeal to the Court of Appeal on an independent ground which was never pleaded by the respondent, never argued by the respondent before the trial judge, and never argued by the respondent in the Court of Appeal. The authorities and writings relied on by the Court of Appeal were not put to the Court of Appeal for that purpose. The relevant part of the Court of Appeal's judgment would have come as a complete surprise to all parties. The Court of Appeal said that the question of restitution-based liability "was not specifically exposed in any detail by the parties but nevertheless warrants consideration as it bears upon the true foundation of the first limb of Barnes v Addy upon which Say-Dee did clearly rely"86. The true position, as counsel for the respondent accepted with commendable candour and straightforwardness during argument on the special leave application, is that the question was not discussed at all – specifically or non-specifically, in detail or not in detail. It is conceivable that the appellants might have wished to defeat restitution-based liability, not merely 82 No particular book, chapter or article by that author was referred to. 83 A reference to Koorootang Nominees Pty Ltd v Australia and New Zealand Banking Group Ltd [1998] 3 VR 16 at 78-105. 84 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [232]. 85 The approach taken by the Court is similar to that stated in par (ii) of the respondent's proposed modification of Barnes v Addy, quoted above at [121]. 86 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [216]. Callinan Crennan by advancing argument about its want of intellectual merit and its inconsistency with Australian authority, but also by calling evidence to show, for example, a change of position. And the relevant part of the Court of Appeal's judgment was also unjust to the respondent, which might have wished to say something against deciding the case on that basis, or in that particular way. The judgment, which states no reason why restitutionary liability should be recognised, conveys the impression that the result was so foreordained and so inevitably correct that it was not necessary to seek any assistance, however modest, from the respondent. For its part, the respondent, which has its own good reasons for being aggrieved about the step which the Court of Appeal took, offered only the most lukewarm of support for the reasoning in this Court, and then only "very much as a subsidiary argument". The Court of Appeal's conduct contrasts with that of Hansen J in Koorootang Nominees Pty Ltd v Australia and New Zealand Banking Group Ltd87: although he said he favoured strict liability based on restitution, he declined to decide the point in issue in view of the fact that the plaintiff in that case had not conducted its case on that basis. Resultant confusion. The second reason why the Court of Appeal's treatment of this subject was a grave error is the confusion it is causing. Either the Court of Appeal is to be treated as abandoning the notice test for the first limb of Barnes v Addy, or it is to be treated rather as recognising a new avenue of recovery, which exists alongside the first limb. Although Say-Dee submitted that the law should develop by recognising a new but additional avenue of recovery, the Court of Appeal's approach was to abandon the notice test for the first limb. In doing so, it was flying in the face not only of the received view of the first limb of Barnes v Addy, but also of statements by members of this Court in Consul Development Pty Ltd v DPC Estates Pty Ltd88. It is true that those statements were dicta in the sense that the case was decided on the second limb of Barnes v Addy. But, contrary to the Court of Appeal's perception, the statements did not bear only "indirectly" on the matter: they were seriously considered. And, also contrary to the Court of Appeal's perception, they were not uttered only by two members of the Court, that is Stephen J, with whom 88 (1975) 132 CLR 373. Callinan Crennan Barwick CJ concurred89. Gibbs J took the same view90, so that it was shared by the entire majority. Gibbs J cited with approval Soar v Ashwell91 which approved the extension of Barnes v Addy to the case "where a person received trust property and dealt with it in a manner inconsistent with trusts of which he was cognizant". That language is also employed in another case Gibbs J cited, Lee v Sankey92. In a third case cited by Gibbs J, In re Blundell; Blundell v Blundell93, Stirling J said a stranger who received trust property was not liable unless "to his knowledge the money is being applied in a manner which is inconsistent with the trust"94. Leaving aside any technical question about whether the doctrine of stare decisis strictly applied, abandonment of the rule that the plaintiff must prove notice on the part of the defendant is not an appropriate step for an intermediate court of appeal to take in relation to so long-established an equitable rule – for other illustrations of it both before95 and after96 Barnes v Addy can be found, its 89 Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373 at 410. Stephen J's dicta approved a statement of Jacobs P in the court below, which strengthens their weight: DPC Estates Pty Ltd v Grey and Consul Development Pty Ltd [1974] 1 NSWLR 443 at 459. 90 Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373 at 396. 91 [1893] 2 QB 390 at 396-397 per Bowen LJ. 92 (1872) LR 15 Eq 204 at 211 per Sir James Bacon VC. 93 (1888) 40 Ch D 370 at 381. 94 That passage was quoted by Stephen J: (1975) 132 CLR 373 at 408-409. 95 Morgan v Stephens (1861) 3 Giff 225 at 237 per Sir John Stuart VC [66 ER 392 at 96 In re Dixon; Heynes v Dixon [1900] 2 Ch 561 at 574 per Sir Richard Webster MR; In re Eyre-Williams; Williams v Williams [1923] 2 Ch 533 at 539-540 per Romer J; Re Australian Elizabethan Theatre Trust; Lord v Commonwealth Bank of Australia (1991) 30 FCR 491 at 507 per Gummow J. For modern English statements to the same effect, see Karak Rubber Co Ltd v Burden (No 2) [1972] 1 WLR 602 at 632 per Brightman J; [1972] 1 All ER 1210 at 1234; Belmont Finance Corpn Ltd v Williams Furniture Ltd (No 2) [1980] 1 All ER 393 at 405 per Buckley LJ, 410 and 412 per Goff LJ; Rolled Steel Products (Holdings) Ltd v British Steel Corporation [1986] Ch 246 at 306-307 per Browne-Wilkinson LJ; Agip (Africa) Ltd v Jackson (Footnote continues on next page) Callinan Crennan existence had been acknowledged in the Court of Appeal itself the previous year97, and its correctness has been assumed in this Court98. If, on the other hand, the Court of Appeal is to be treated not as abandoning the notice test for the first limb of Barnes v Addy, but rather as recognising a new and additional avenue of relief, it is an avenue which tends to render the first limb otiose. That too is not a step which an intermediate court of appeal should take in the face of long- established authority and seriously considered dicta of a majority of this Court. The result of the statements by the Court of Appeal about restitution-based liability has been confusion among trial judges of a type likely to continue unless now corrected. As Hamilton J remarked and Barrett J agreed, a trial judge of the Supreme Court of New South Wales now "faces the difficult situation of obiter dicta in the High Court some 30 years ago conflicting with recent dicta in the Court of Appeal, which have met with substantial criticism"99. The confusion is not likely to be limited to New South Wales judges. Intermediate appellate courts and trial judges in Australia should not depart from decisions in intermediate appellate courts in another jurisdiction on the interpretation of Commonwealth legislation or uniform national legislation unless they are convinced that the interpretation is plainly wrong100. Since there is a common law of Australia rather than of each Australian jurisdiction, the same principle applies in relation to non-statutory law. There has already been an example of a single judge feeling obliged to follow the Court of Appeal despite counsel's submission that he was obliged not to do so101. [1990] Ch 265 at 291 per Millett J; and El Ajou v Dollar Land Holdings plc [1994] 2 All ER 685 at 700 per Hoffmann LJ. 97 Robb Evans of Robb Evans & Associates v European Bank Ltd (2004) 61 NSWLR 75 at 109 [178] per Spigelman CJ, Handley and Santow JJA concurring. 98 Mayne v Public Trustee (1945) 70 CLR 395 at 402-404 per Williams J (Latham CJ 99 Kalls Enterprises Pty Ltd (in liq) v Baloglow (2006) 58 ACSR 63 at 78 [47] per Hamilton J, quoted in Darkinjung Pty Ltd v Darkinjung Local Aboriginal Land Council; Hillig v Darkinjung Pty Ltd [2006] NSWSC 1217 at [30] per Barrett J. 100 Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 492 per Mason CJ, Brennan, Dawson, Toohey and Gaudron JJ. 101 Multan Pty Ltd v Ippoliti [2006] WASC 130 at [45] per Simmonds J. Callinan Crennan The structure of the Court of Appeal's reasoning. The appellants strongly attacked the Court of Appeal's reasoning, and it is therefore necessary to describe it. For the moment the fact that Mrs Elias and her daughters became registered proprietors of Torrens system land, as did Mr Elias and Lesmint, may be put on one side102. First, according to the Court of Appeal, the restitution based approach has some support in authority. Secondly, the Court of Appeal said that the only contrary statements in this Court were the dicta of two judges in Consul Development Pty Ltd v DPC Estates Pty Ltd103, a case on the second limb of Barnes v Addy, and a case in which those justices were not called upon to consider restitutionary principles as the foundation underpinning the first limb of Barnes v Addy. Thirdly, to favour the restitutionary approach over the traditional approach would make it unnecessary for the plaintiff to prove that the defendant received the property knowing of breach of the fiduciary's duties: that is left to the defendant to negate by way of defence. The plaintiff would only have to prove enrichment at the expense of the plaintiff which is unjust on the ground of some "recognised factor". This is said to be "a better-tailored response"104. The Court of Appeal's reasoning: authorities in favour? The first case relied on by the Court of Appeal is In Re Montagu's Settlement Trusts105. Sir Robert Megarry VC said: "The core of the question ... is what suffices to constitute a recipient of trust property a constructive trustee of it. I can leave on one side the equitable doctrine of tracing: if the recipient of trust property still has the 102 See below at [190]-[198]. 103 (1975) 132 CLR 373. 104 This is an expression quoted with approval by the Court of Appeal from Lord Nicholls, "Knowing Receipt: The Need for a New Landmark" in Cornish, Nolan, O'Sullivan and Virgo (eds), Restitution, Past Present and Future (1998) at 238- 239: Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [221]. 105 [1987] Ch 264 at 276. Callinan Crennan property or its traceable proceeds in his possession, he is liable to restore it unless he is a purchaser without notice." Hansen J in Koorootang Nominees Pty Ltd v Australia and New Zealand Banking Group Ltd106 said: "That passage indicates that in some cases (namely, those in which the recipient still holds the property transferred to him in breach of trust), even Sir Robert Megarry VC would hold that the liability of the recipient is strict – that is, not dependent upon the establishment of any particular state of knowledge on his part – subject only to the bona fide purchaser defence." The Court of Appeal in the present case said107: "The restoration of trust property still in the possession of the party said to be unjustly enriched by its receipt was hinted at by Vice-Chancellor Megarry ... His Lordship made it clear that restoration in these circumstances was required unless the recipient was a purchaser (assumingly for value) without notice." With respect, there is nothing to suggest that the Vice-Chancellor "would hold" or "hinted" at any of the things attributed to him. He was merely stating the orthodox view in relation to tracing. The Vice-Chancellor cannot have been intending, by using the word "unless" in a passage dealing with an aspect of the law not germane to the decision of the case before him, to suggest that the burden of proof was reversed and increased in the way it would be if restitution-based liability became the law. The next case relied on by the Court of Appeal is Lipkin Gorman (A Firm) v Karpnale Ltd108. That was not a case in which a breach of fiduciary duty or the first limb of Barnes v Addy arose, or was argued, or was mentioned by the House of Lords. 106 [1998] 3 VR 16 at 88. 107 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [217]. 108 [1991] 2 AC 548 at 578-579. Callinan Crennan The third case relied on by the Court of Appeal is Koorootang Nominees Pty Ltd v Australia and New Zealand Banking Group Ltd, where Hansen J discussed the first limb of Barnes v Addy at length109. That discussion was apparently occasioned by a submission that in order to avoid a difference between the notice test in the two limbs of Barnes v Addy, another submission that constructive notice sufficed under the first limb should be rejected. Hansen J said that in order to evaluate whether there should be that difference between the two limbs, the underlying rationale of the two forms of liability had to be examined. He said he found "considerable persuasion" in the view that the first limb was based not on a concern for the protection of equitable estates or interest, or on the avoidance of unconscientious conduct, but on the avoidance of unjust enrichment.110 He then noted various writings by Birks and others supporting that view, various writings by others opposing it, and a few cases. He said "the strongest support of all" for the unjust enrichment avoidance view is Lord Nicholls's statement in Royal Brunei Airlines Sdn Bhd v Tan111 that "[r]ecipient liability is restitution-based". Hansen J said he favoured that view and continued112: "If so, there is a strong argument that liability is strict but subject to defences of bona fide purchase and change of position". As indicated earlier, Hansen J concluded by leaving the question open because the point had not been argued. With respect, Hansen J did not identify any compelling reason why the law should be changed. The fourth case relied on by the Court of Appeal was National Australia Bank Ltd v Rusu113. Bryson J there noted Lord Nicholls's statement that "[r]ecipient liability is restitution-based", and said114: "The principles which deeply underlie equity suggest that a restitution- based remedy must have some basis in the position in conscience of the person against whom it is awarded so that it must be shown that a 109 [1998] 3 VR 16 at 78-105. 110 [1998] 3 VR 16 at 100. 111 [1995] 2 AC 378 at 386. 112 [1998] 3 VR 16 at 105. 113 [2001] NSWSC 32. 114 [2001] NSWSC 32 at [43]-[44]. Callinan Crennan recipient did not receive the payment for value or had notice of another person's equitable interest in the money; or at the very least, it should be open to him to show that he did give value and had no notice." These observations were only dicta, since Bryson J decided the case on the basis that the relevant defendants were not recipients at all. The fifth case referred to by the Court of Appeal as containing "dicta which seem to favour the restitutionary approach advocated by Professor Birks and favoured by Hansen J"115 is Tara Shire Council v Garner116. All Atkinson J said was: "A possible explanation for the absence of a dishonesty requirement under the first limb is that it is a restitution-based principle aimed at avoiding unjust enrichment." She said nothing about abandoning notice requirements or otherwise supporting the restitutionary approach. The last case is NIML Ltd v MAN Financial Australia Ltd117. That case turned on the fact that the defendant was not a recipient of property. Harper J referred to the decision by Hansen J but expressed no view on whether the unjust enrichment basis was sound. The Court of Appeal quoted the following words118: "[I]t is an essential ingredient in the cause of action pleaded by [the plaintiff] against [the defendant] that the latter either had constructive knowledge of the general nature of [the defaulting fiduciary's] dishonesty or was unjustly enriched by its receipt." This appears to reflect a view different from that of the Court of Appeal: it states not that the first limb of Barnes v Addy is wrong, but that it is right, and operates alongside restitution-based liability. The statements referred to by the Court of Appeal in these cases either do not support the restitutionary approach, or were uttered in circumstances where 115 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [226]. 116 [2003] 1 Qd R 556 at 576 [61]. 117 [2004] VSC 449. 118 [2004] VSC 449 at [53]: see Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [227]. Callinan Crennan no appropriate issue was presented or relevant argument advanced, or were otherwise entirely unnecessary for the decision of the cases in which they were uttered. The Court of Appeal's reasoning: authorities against. It is not necessary to go beyond the considered dicta of the three members of the majority in Consul Development Pty Ltd v DPC Estates Pty Ltd119. Those dicta are based on the numerous cases in the past, and conform with the numerous later authorities, in which the traditional understanding of the first limb of Barnes v Addy has been affirmed120. The Court of Appeal's conclusion is completely inconsistent with these authorities. The Court of Appeal's reasoning: principle. Except for a point made by Lord Nicholls in a passage which the Court of Appeal quoted and which is discussed below121 the Court of Appeal's reasoning did not allege, let alone demonstrate, any inconsistency of principle, any point of practical inconvenience, or any other reason which would justify changing the law in the manner it purported to. It did not state, for example, why its approach was a "better- tailored response", in Lord Nicholls's phrase122. The nearest it came to indicating where a statement of a reason for the change might be found was to refer to an article by one of its members. That article said123: "The call to abandon the fault-based idea of knowing receipt in favour of strict liability, subject to a change of position defence, originated with the restitution scholars' concerns over coherence. They argue that it is irrational for law and equity to occupy these near parallel fields on different terms." 119 (1975) 132 CLR 373. 120 See above at [134]-[135]. 121 See below at [153]. 122 "Knowing Receipt: The Need for a New Landmark" in Cornish, Nolan, O'Sullivan and Virgo (eds), Restitution, Past Present and Future (1998) at 238. 123 Mason, "Where has Australian restitution law got to and where is it going?" (2003) 77 Australian Law Journal 358 at 368. Callinan Crennan This is not a satisfactory reason for an intermediate appellate court to effect a radical change in the law. The article also said that in the article by Lord Nicholls just referred to, he "offered a compelling critique of fault-based liability". It is not proposed to examine that critique in view of the fact that neither the Court of Appeal nor the respondent described or explicitly adopted the reasoning. Nor, for the same reason, is it proposed to examine other legal writing which might offer support for the Court of Appeal. There are, however, several matters of principle pointing against the course taken by the Court of Appeal, none of which it dealt with, which is a state of affairs more likely to arise when courts make pronouncements without hearing argument than when they do so after argument. First, whether enrichment is unjust is not determined by reference to a subjective evaluation of what is unfair or unconscionable: recovery rather depends on the existence of a qualifying or vitiating factor falling into some particular category124. In David Securities Pty Ltd v Commonwealth Bank of Australia125, Mason CJ, Deane, Toohey, Gaudron and McHugh JJ gave as instances of a qualifying or vitiating factor mistake, duress or illegality. No such factor was identified in the present case by the Court of Appeal beyond what was identified as the breach of fiduciary duty by Mr Elias and by Farah126. But Mrs Elias and her daughters owed no fiduciary duty to Say-Dee. Further, principles respecting fiduciary duty have been said to be foreign to unjust enrichment notions because the unjust factors are commonly concerned with vitiation or qualification of the intention of a claimant127. 124 Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662 at 673 per Mason CJ, Wilson, Deane, Toohey and Gaudron JJ; David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 379 per Mason CJ, Deane, Toohey, Gaudron and McHugh JJ. 125 (1992) 175 CLR 353 at 379. 126 [2005] NSWCA 309 at [217]. 127 Edelman, "A Principled Approach to Unauthorised Receipt of Trust Property", (2006) 122 Law Quarterly Review 174 at 177-178. Callinan Crennan Unjust enrichment is not a "definitive legal principle according to its own terms"128. If it were not so, as Gummow J pointed out in Roxborough v Rothmans of Pall Mall Australia Ltd129: "[S]ubstance and dynamism may be restricted by dogma. In turn, the dogma will tend to generate new fictions in order to retain support for its thesis. It also may distort well settled principles in other fields, including those respecting equitable doctrines and remedies, so that they answer the newly mandated order of things. Then various theories will compete, each to deny the others. There is support in Australasian legal scholarship for considerable scepticism respecting any all-embracing theory in this field, with the treatment of the disparate as no more than species of the one newly discovered genus." This prediction about the consequences of unjust enrichment for the distortion of equitable doctrines is illustrated by the Court of Appeal's approach in this case. The areas in which the concept of unjust enrichment applies are specific and usually long-established. Recipient liability for breach of trust or fiduciary duty has not been one of them. Secondly, if any principle justifying the basing of recipient liability on unjust enrichment could be stated, one would expect it to be found in the writings of Birks, on whose opinion supporting that course both Hansen J and Lord Nicholls relied. Although the Court of Appeal did not cite any writings in which it was stated, it is notable that in 2002, well before the Court of Appeal's decision, Birks retracted his opinion that in lieu of the first limb of Barnes v Addy unjust enrichment should be recognised as a basis for recipient liability130. He said: "It now seems right to abandon that analysis once and for all. It was a mistake to insist that 'knowing receipt' was simply a species of unjust enrichment which had been slow to understand itself and, in particular, slow to understand that liability in unjust enrichment is strict though subject to defences." 128 David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 378-379 per Mason CJ, Deane, Toohey, Gaudron and McHugh JJ. 129 (2001) 208 CLR 516 at 545 [74]. 130 "Receipt" in Birks and Pretto (eds), Breach of Trust, (2002) 213 at 223. Callinan Crennan He did so because Nourse LJ criticised Lord Nicholls's advocacy of restitution- based recovery on the ground that it was "commercially unworkable"131. Birks' change of mind is a rather striking event, but it is not discussed by the Court of Appeal. Birks expressed a preference for the first limb to continue, but for a liability in unjust enrichment to exist alongside it132. He claimed that for Lord Nicholls supported Lord Nicholls appeared rather to favour a more general restructuring, which he described as "a radical step" to be carried out by "bold spirits"133. But whether or not Lord Nicholls supported that approach, the position finally adopted by Birks is not the position he took in earlier times, and it is not the position adopted by the Court of Appeal. that may be questioned, that approach; Thirdly, in a passage quoted by the Court of Appeal134 Lord Nicholls stated that he favoured a restitution basis for the first limb of Barnes v Addy. The only ground assigned for that position in that passage was that "equity should now follow the law"135. The problem is that in this field equity devised protections for the holders of equitable interests and those to whom fiduciary duties are owed which the common law had not: if it had, equitable intervention would have been unnecessary. For equity now to follow the law is to cut down on traditional equitable protection. Say-Dee submitted that the established doctrine under the first limb of Barnes v Addy should continue, but that the Court of Appeal's reformulation of it should also operate alongside it. Superficially this does less violence to authority, and does not cut down traditional equitable protection, but in practice it does erode the existing law, because it would tend to nullify the first limb: for what plaintiff would wish to take on the burden of showing that the defendant had notice under the "old" first limb if, by reliance on the new doctrine, that burden could be escaped and a contrary and even more onerous burden placed on the defendant? 131 Bank of Credit and Commerce International (Overseas) Ltd v Akindele [2001] Ch 437 at 456 (Ward LJ and Sedley LJ agreed). 132 "Receipt" in Birks and Pretto (eds), Breach of Trust, (2002) 213 at 224-225. 133 "Knowing Receipt: The Need for a New Landmark" in Cornish, Nolan, O'Sullivan and Virgo (eds), Restitution, Past Present and Future (1998) at 245. 134 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [221]. 135 "Knowing Receipt: The Need for a New Landmark" in Cornish, Nolan, O'Sullivan and Virgo (eds), Restitution, Past Present and Future (1998) at 238. Callinan Crennan Fourthly, the restitution basis is unhistorical. There is no sign of it in clear terms in any but the most recent authorities. It is inherent in the Court of Appeal's conclusion that for many decades the courts have misunderstood the tests for satisfying the first limb of Barnes v Addy: that is improbable. It is inherent in the conclusion advocated by Say-Dee that for many decades the courts have failed to notice the existence of a form of liability co-existing with the first limb: that is equally improbable. The restitution basis reflects a mentality in which considerations of ideal taxonomy prevail over a pragmatic approach to legal development. As Gummow J said136: "To the lawyer whose mind has been moulded by civilian influences, the theory may come first, and the source of the theory may be the writings of jurists not the decisions of judges. However, that is not the way in which a system based on case law develops; over time, general principle is derived from judicial decisions upon particular instances, not the other way around." The restitution basis was imposed as a supposedly inevitable offshoot of an all- embracing theory. To do that was to bring about an abrupt and violent collision with received principles without any assigned justification. Fifthly, Say-Dee defended the Court of Appeal's stand by contending that it avoided an unjust result. Where is the injustice? On the Court of Appeal's application of the first limb of Barnes v Addy as traditionally understood, Say- Dee won, and it would only fail if either no property were received or there were no notice. But why is failure in those circumstances unjust? Assuming in its favour certain factual conclusions rejected above, Say-Dee would retain a right to personal and proprietary remedies against the first three appellants. Say-Dee did not explain how there was any justice in permitting restitution against a defendant who received trust property without notice of that fact. Even if the first limb of Barnes v Addy is to be reinterpreted as restitution- based, the question of whether it would avail Say-Dee remains. The Court of Appeal said that the plaintiff must prove that there has been enrichment which is "unjust on the ground of some recognised factor". The Court of Appeal said that that requirement "is satisfied by the fact that Mr Elias caused Mrs Elias and their two daughters to acquire their respective interests in No 15 in breach of Farah's 136 Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516 at 544 Callinan Crennan fiduciary duty to Say-Dee"137. However, Mrs Elias and her daughters owed no fiduciary duty to Say-Dee. Nor did they know of Farah's fiduciary duty to Say- Dee: and if that knowledge is crucial, the analysis returns to a theory of fault- based liability which the restitution theory supposedly rejects. Say-Dee went even further than the Court of Appeal by submitting: "It is not necessary here to identify some separate 'unjust factor'." This creates a form of liability which is potentially extraordinarily wide. In the alternative, Say-Dee submitted that the enrichment was unjust because it was without Say-Dee's knowledge or fully informed consent. No case, even in England, has treated ignorance as a "reason Finally, restitution-based liability allows a defence to bona fide purchasers for value without notice. Mrs Elias and her children were within that category. They had no notice139 and they were not volunteers140. The changes by the Court of Appeal with respect to the first limb, then, were arrived at without notice to the parties, were unsupported by authority and flew in the face of seriously considered dicta uttered by a majority of this Court. They must be rejected. Second limb of Barnes v Addy In this Court, Say-Dee proposed various paths to relief other than those discussed by the Court of Appeal. The first of these was what has become known as the second limb of Barnes v Addy. As conventionally understood in Australia, the second limb makes a defendant liable if that defendant assists a trustee or fiduciary with knowledge of a dishonest and fraudulent design on the part of the trustee or fiduciary. Several points of a general nature should be made here. The first concerns the scope of the second limb. This was not expressed by Lord Selborne LC as an 137 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [222]. 138 Smith, "Tracing" in Burrows and Rodger (eds), Mapping the Law (2006) 119 at 139 See above at [100] and [123]-[129]. 140 See below at [187]-[188]. Callinan Crennan exhaustive statement of the circumstances in which a third party who has not received trust property and who has not acted as a trustee de son tort nevertheless may be accountable as a constructive trustee. Before Barnes v Addy141, there was a line of cases in which it was accepted that a third party might be treated as a participant in a breach of trust where the third party had knowingly induced or immediately procured breaches of duty by a trustee where the trustee had acted with no improper purpose; these were not cases of a third party assisting the trustee in any dishonest and fraudulent design on the part of the trustee142. Secondly, the distinction has been recognised in the Australian case law143 but, on one reading of Royal Brunei Airlines Sdn Bhd v Tan144, may have been displaced by the Privy Council in favour of a general principle of "accessory liability" expressed as follows145: "A liability in equity to make good resulting loss attaches to a person who dishonestly procures or assists in a breach of trust or fiduciary obligation. It is not necessary that, in addition, the trustee or fiduciary was acting dishonestly, although this will usually be so where the third party who is assisting him is acting dishonestly. 'Knowingly' is better avoided as a defining ingredient of the principle". Thirdly, whilst the different formulations of principle may lead to the same result in particular circumstances, there is a distinction between rendering liable a defendant participating with knowledge in a dishonest and fraudulent design, and rendering liable a defendant who dishonestly procures or assists in a 141 (1874) LR 9 Ch App 244 at 254. 142 Examples include the decisions of Lord Langdale MR in Fyler v Fyler (1841) 3 Beav 550 at 561-562, 567-568 [49 ER 216 at 221, 223-224], of the Irish Court of Chancery in Alleyne v Darcy (1854) 4 Ir Ch Rep 199 at 209, and of Sir John Romilly MR in Eaves v Hickson (1861) 30 Beav 136 [54 ER 840]. See, generally, Harpum, "The Stranger as Constructive Trustee", (1986) 102 Law Quarterly Review 114 at 141-144. 143 For example, Elders Trustee and Executor Co Ltd v E G Reeves Pty Ltd (1987) 78 ALR 193 at 238-239. 145 [1995] 2 AC 378 at 392. Callinan Crennan breach of trust or fiduciary obligation where the trustee or fiduciary need not have engaged in a dishonest or fraudulent design. The decision in Royal Brunei has been referred to in this Court several times146 but not in terms foreclosing further consideration of the subject in this Court, in particular, further consideration of the apparent necessity to displace the acceptance in Consul Development Pty Ltd v DPC Estates Pty Ltd147 of the formulation of the second limb of Barnes v Addy were Royal Brunei to be adopted in this country. Until such an occasion arises in this Court, Australian courts should continue to observe the distinction mentioned above and, in particular, apply the formulation in the second limb of Barnes v Addy. On the present appeal, specific reliance was not placed by Say-Dee upon Royal Brunei, although there was a suggestion, not soundly based, discounting any difference between what might be called the traditional approach and that adopted in Royal Brunei. The changes to the law in Australia which were sought by Say-Dee did not include any adoption of a cause of action of the kind expressed in the passage in Royal Brunei set out above. Accordingly, it is unnecessary to decide now how far Royal Brunei, and subsequent decisions in the House of Lords and Privy Council148, have modified the second limb of Barnes v Addy or, rather, restated the form of liability operating antecedently to and independently of Barnes v Addy, and if so, whether these changes should be adopted in Australia. However, for the sake of completeness, we should add that whatever view be taken of Royal Brunei, whether it be an independent doctrine or a replacement of the second limb of Barnes v Addy, its requirements are not satisfied in the present case. To apply the most recent formulation, by Lord Hoffmann in Barlow Clowes International Ltd (in liq) v Eurotrust International Ltd149, on the evidence there is nothing to show that Mrs Elias and her daughters had 146 Forestview Nominees Pty Ltd v Perpetual Trustees WA Ltd (1998) 193 CLR 154 at 165; Giumelli v Giumelli (1999) 196 CLR 101 at 112 [4]; Pilmer v The Duke Group Ltd (In Liq) (2001) 207 CLR 165 at 174 [3]. 147 (1975) 132 CLR 373. 148 Twinsectra Ltd v Yardley [2002] 2 AC 164; Barlow Clowes International Ltd (in liq) v Eurotrust International Ltd [2006] 1 WLR 1476; [2006] 1 All ER 333. 149 [2006] 1 WLR 1476 at 1481; [2006] 1 All ER 333 at 338. Callinan Crennan "consciousness of those elements of the transaction which make participation transgress ordinary standards of honest behaviour". Although the Court of Appeal did not attach liability to Mrs Elias and her daughters on the ground provided by the second limb of Barnes v Addy, Say-Dee contended that it ought to have done so. The appellants objected that neither the dishonest and fraudulent design by Farah nor the knowledge of it by Mrs Elias and her daughters had been pleaded in the amended cross-claim. This is true, but Say-Dee contended that, on well-established principles, this did not prevent reliance now being placed on the point150. Say-Dee submitted the trial had been conducted on the basis that second limb liability was an issue. Say-Dee referred to various passages in the written submissions presented by it and by the appellants to the trial judge and in the final address of counsel for the appellants on 18 August 2004. Those passages are as follows. In the written submissions of Say-Dee dated 18 August 2004, there appears: "It seems from the plaintiff's opening that [the] wife and children wish to resist any relief in relation to the units in their name in 15 Deane Street on the basis that they lack the requisite knowledge of their husband/father's breach of fiduciary duty as required in Royal Brunei. The answer to this proposition is that in relation to the children they are mere volunteers who cannot resist the cross-claimant's equity." This does not appear to be dealing with the second limb issue, for the question of whether a defendant is given value or is a volunteer is irrelevant in applying that limb. On 18 August 2004, nothing was said in oral address on this point on behalf of Say-Dee. In the written submissions presented by the appellants, dated 18 August 2004, the following appears: "Margaret, Sara and Jade Elias are accountable to Say-Dee if: 150 Water Board v Moustakas (1988) 180 CLR 491 at 497 per Mason CJ, Wilson, Callinan Crennan (c) Margaret, Sara and Jade Elias were guilty of commercial dishonesty in taking advantage of [the] opportunity [to acquire No 15] without verifying the status of Farah Constructions to make the opportunity to do so available to them." The submissions then referred to Royal Brunei. Accordingly, the submission is alluding, not to the second limb of Barnes v Addy as understood in Australia in the light of Consul151, but to the formulation found in Royal Brunei. In oral submissions to the trial judge, counsel for the appellants said: "The facts do not justify any imputation of commercial dishonesty." While these passages do not suggest that the second limb of Barnes v Addy was in fact put at trial, the trial judge may have thought that it was. The last issue he listed was "whether the Cross Defendants are knowing participants in Farah's breach of fiduciary duty". So far as Royal Brunei was relied on and is applicable, counsel for the appellants was correct to submit that there was no evidence of commercial dishonesty against any of Mrs Elias and her daughters. Had the Court of Appeal turned its mind to whether Mrs Elias and her daughters were liable as knowing participants in a dishonest and fraudulent design – an allegation the seriousness of which means that it ought to have been pleaded and particularised, and the assessment required by Briginshaw v Briginshaw152 kept in mind – it ought to have rejected the allegation. That rejection would follow from consideration of what was said in Consul respecting the second limb of Barnes v Addy, both in relation to "knowledge" and to "dishonest and fraudulent design". What is required by the requirement of "knowledge" expressed in the second limb? In the passage in which Lord Selborne formulated the second limb in terms of assisting with knowledge in a dishonest and fraudulent design on the part of the trustees, he contrasted those "actually participating in any fraudulent conduct of the trustee" and those "dealing honestly as agents"153. 151 (1975) 132 CLR 373. 152 (1938) 60 CLR 336. 153 (1874) 9 Ch App 244 at 251-252. Callinan Crennan As a matter of ordinary understanding, and as reflected in the criminal law in Australia154, a person may have acted dishonestly, judged by the standards of ordinary, decent people, without appreciating that the act in question was dishonest by those standards. Further, as early as 1801, Sir William Grant MR stigmatised those who "shut their eyes" against the receipt of unwelcome information155. Against this background, it has been customary to analyse the requirement of knowledge in the second limb of Barnes v Addy by reference to the five categories agreed between counsel in Baden v Société Générale pour Favoriser le Dévelopment du Commerce et de l'Industrie en France SA156: "(i) actual knowledge; (ii) wilfully shutting one's eyes to the obvious; (iii) wilfully and recklessly failing to make such inquiries as an honest and reasonable man would make; (iv) knowledge of circumstances which would indicate the facts to an honest and reasonable man; (v) knowledge of circumstances which would put an honest and reasonable man on inquiry." In Bank of Credit and Commerce International (Overseas) Ltd v Akindele ("BCCI")157, Nourse LJ observed that the first three categories have generally been taken to involve "actual knowledge", as understood both at common law and in equity, and the last two as instances of "constructive knowledge" as developed in equity, particularly in disputes respecting old system conveyancing. After noting that in Royal Brunei158 the Privy Council had discounted the utility 154 Macleod v The Queen (2003) 214 CLR 230 at 242 [36]-[37]. 155 Hill v Simpson (1801) 7 Ves Jun 153 at 170 [32 ER 63 at 69]. See further May v Chapman and Gurney (1847) 16 M & W 355 at 361 [153 ER 1225 at 1228]; Jones v Gordon (1877) 2 App Cas 616 at 625, 628-629, 635; English and Scottish Mercantile Investment Company v Brunton [1892] 2 QB 700 at 707-708. 156 Note [1993] 1 WLR 509 at 575-576, 582; [1992] 4 All ER 161 at 235, 242-243. The case was decided in 1983. 157 [2001] Ch 437 at 454. 158 [1995] 2 AC 378 at 392. Callinan Crennan of the Baden categorisation, Nourse LJ in BCCI159 went on to express his own view that the categorisation was often helpful in identifying the different states of knowledge for the purposes of a knowing assistance case. Although Baden post-dated the decision in Consul, the five categories found in Baden assist in an analysis of that for which Consul provides authoritative guidance on the question of knowledge for the second limb of Barnes v Addy. Thus, support in Consul can be found for categories (i), (ii) and (iii)160. Further, Consul also indicates that category (iv) suffices161. However, in Consul, Stephen J held that knowledge of circumstances which would put an honest and reasonable man on inquiry, later identified as the fifth category in Baden, would not suffice. Gibbs J left open the possibility that constructive notice of this description would suffice162. Barwick CJ agreed with Stephen J. The result is that Consul supports the proposition that circumstances falling within any of the first four categories of Baden are sufficient to answer the requirement of knowledge in the second limb of Barnes v Addy, but does not travel fully into the field of constructive notice by accepting the fifth category. In this way, there is accommodated, through acceptance of the fourth category, the proposition that the morally obtuse cannot escape by failure to recognise an impropriety that would have been apparent to an ordinary person applying the standards of such persons. These conclusions in Consul as to what is involved in "knowledge" for the second limb represent the law in Australia. They should be followed by Australian courts, unless and until departed from by decision of this Court. What then of the phrase "dishonest and fraudulent design"? Since the widening of the second limb of Barnes v Addy beyond breaches of express trust, 159 [2001] Ch 437 at 455. 160 (1975) 132 CLR 373 at 398 per Gibbs J, 412 per Stephen J; Barwick CJ concurring 161 (1975) 132 CLR 373 at 398 per Gibbs J, 412 per Stephen J; Barwick CJ concurring 162 (1975) 132 CLR 373 at 398. Callinan Crennan attempts commonly are made in corporate insolvencies to render liable on this footing directors, advisers and bankers of the insolvent company. This makes a proper understanding of the second limb important, lest its application prove unjust. As Lord Selborne LC said in Barnes v Addy163: "There would be no better mode of undermining the sound doctrines of equity than to make unreasonable and inequitable applications of them." The relevant passages in Consul establish for Australia that "dishonest and fraudulent designs" can include not only breaches of trust but also breaches of fiduciary duty; but any breach of trust or breach of fiduciary duty relied on must be dishonest and fraudulent. The reformulation proposed by the respondent, with its abandonment of the "dishonest and fraudulent design" integer and its stiffening of the notice requirements in a way adverse to plaintiffs, should not be adopted. No sufficient difficulty in the current rules has been demonstrated to justify the taking of any such step. In any event, Mrs Elias and her daughters would not be liable even under the reformulated test. They did not participate "in a significant way" in Farah's breach and they had no "actual knowledge of the essential facts which constituted the breach". Say-Dee relied upon the statement by Gibbs J in Consul164: "[A] person who knowingly participates in a breach of fiduciary duty is liable to account to the person to whom the duty was owed for any benefit he has received as a result of such participation." His Honour also said that the words "dishonest and fraudulent" included "a breach of trust or of fiduciary duty"165. However, Gibbs J did not categorise all breaches of trust or fiduciary duty as "dishonest and fraudulent" because he said that the expression was to be understood by reference to equitable principles"166. 163 (1874) LR 9 Ch App 244 at 251. 164 (1975) 132 CLR 373 at 397. 165 (1975) 132 CLR 373 at 398. 166 (1975) 132 CLR 373 at 398. Callinan Crennan Say-Dee relied on the former passage and on passages in the judgment of Stephen J167 to support the submission that in Australian law the "dishonest and fraudulent design" requirement had been superseded and that it was sufficient to plead and prove any knowing participation in a breach of trust or fiduciary duty, save for "a de minimis breach". However, Say-Dee accepted that this qualification had not been stated in Consul. In its final form, the submission put by Say-Dee was that a defendant who had not received a direct financial benefit "but has participated in a significant way in a significant breach of duty/trust with actual knowledge of the essential facts which constituted the breach should be liable to the beneficiary of the duty/trust for the consequence of the breach". This submission should be rejected. Breaches of trust and breaches of fiduciary duty vary greatly in their seriousness. Some breaches are well intentioned, some are trivial. In Maguire v Makaronis, this Court observed168: "The stringency apparent in some of the nineteenth century breach of trust cases displayed what Lord Lindley MR called 'a very hard state of the law, and one which shocked one's sense of humanity and of fairness'. The result was what his Lordship called the deliberate relaxation of the law by s 3 of the Judicial Trustees Act 1896 (UK). This conferred a power of curial relief in respect of breach of trust where the trustee had acted 'honestly and reasonably' and 'ought fairly to be excused'. There is no such general power of dispensation in respect of loss caused by breach of duty owed by other fiduciaries." However, some breaches of fiduciary duty by company officers, employees, auditors, experts, receivers, and receivers and managers and liquidators may be excused on similar grounds169. 167 (1975) 132 CLR 373 at 408, 412. 168 (1997) 188 CLR 449 at 473-474 (footnotes omitted). See also Youyang Pty Ltd v Minter Ellison Morris Fletcher (2003) 212 CLR 484 at 498 [33] and the Australian legislation: Trustee Act 1898 (Tas), s 50; Trustee Act 1925 (NSW), s 85; Trustee Act 1936 (SA), s 56; Trustee Act 1958 (Vic), s 67; Trustees Act 1962 (WA), s 75; Trusts Act 1973 (Q), s 76; Trustee Act 1925 (ACT), s 85; Trustee Act (NT), s 49A. Callinan Crennan The submission by Say-Dee as to the reformulation of the second limb of Barnes v Addy having been rejected, Mrs Elias and her daughters are not liable under the second limb of Barnes v Addy. This is for the following reasons. First, even if, contrary to the conclusion stated above, the disclosures found to have been made by Mr Elias did not constitute full disclosure sufficient to make the consent by Say-Dee to the acquisitions of Nos 13 and 15 informed consents, that dereliction of duty is insufficient to merit the description "dishonest and fraudulent". That is so particularly because a man like Mr Elias might not necessarily appreciate the difference between saying that No 13 "is a good proposition for redevelopment in conjunction with" No 11 and saying that the view of the Council was that the only way No 11 could be redeveloped so to as to achieve its full development potential was to redevelop it with No 13. There is a difference, but the failure to appreciate it is not necessarily "dishonest and fraudulent". Secondly, even if Mr Elias's conduct amounted to a dishonest and fraudulent design, there is no evidence that Mrs Elias and her daughters had any sufficient notice or knowledge of it. Tracing Another ground on which, according to Say-Dee, the Court of Appeal ought to have found in its favour depended on tracing. It submitted that the units in No 15 represented profits from a breach of fiduciary duty, and belonged in equity to Say-Dee. It submitted that Mrs Elias and her daughters were volunteers. It submitted that if they received the units knowing of the breach of duty, their consciences were affected from the moment of receipt of the units. Otherwise, their consciences were affected when they learned that the property belonged in equity to Say-Dee. This argument founders on the fact that Mrs Elias and her daughters were not volunteers. It is unnecessary to consider whether there are any other difficulties with it. Mrs Elias and her daughters were not volunteers because on the evidence before the trial judge and the Court of Appeal at the time of its judgment dated 15 September 2005, Mrs Elias and her daughters were purchasers 169 Corporations Act 2001 (Cth), s 1318. These statements are not to be taken as casting doubt on the possible liability of company officers, advisers or bankers, where it is established that their knowledge of circumstances would indicate to an honest and reasonable person facts which constituted a breach of trust or a breach of fiduciary duty. Callinan Crennan of their units in the sense that Mrs Elias provided money, the children provided money, property belonging to Mrs Elias was mortgaged and Mrs Elias entered a personal covenant to repay the debt. For reasons given earlier, that evidence should be accepted170. The Court of Appeal, however, in a different context, said171: "[T]he mere acceptance of personal covenants to repay a mortgage advance in the present circumstances is not to be treated as a provision by Mr and Mrs Elias of their own monies". For that three cases were cited172. Those cases deal with matters quite distinct from the bona fide purchaser doctrine, and are distinguishable. In the first, Paul A Davies (Australia) Pty Ltd (in liq) v Davies173, the question was whether property acquired partly by a company's money and partly by money borrowed by its directors from a bank should be held on constructive trust entirely for the company or treated as a mixed fund. The former conclusion was adopted, but the issue here is quite different: no money and no other property of the joint venture was used to acquire No 15; rather the acquisition was funded, apart from whatever Mr Elias provided, partly by cash from Mrs Elias and the children and partly by bank loans secured over distinct property not owned by the joint venture. The second, Hagan v Waterhouse174, concerned the question of whether, where property in which trustees had a two- thirds interest and beneficiaries a one-third interest had been mortgaged to benefit a profitable bookmaking business, the whole profit could be retained by the business. Kearney J held that it could not, but, again, here the property over which the mortgage was given by Mrs Elias was not property of the joint venture. The third case, Fraser Edmiston Pty Ltd v AGT (Qld) Pty Ltd175, held only that the fact that a person who had obtained a lease of a shop in breach of fiduciary duty had operated the business alone for some time did not deprive the plaintiff of any remedy, it merely merited an order for just allowances. In any event, even if Mrs Elias's personal covenant to repay a mortgage advance is not to be treated 170 See above at [72]-[75]. 171 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [250]. 172 Paul A Davies (Australia) Pty Ltd (in liq) v Davies [1983] 1 NSWLR 440 at 455; Hagan v Waterhouse (1991) 34 NSWLR 308 at 355; Fraser Edmiston Pty Ltd v AGT (Qld) Pty Ltd [1998] 2 Qd R 1 at 12. 173 [1983] 1 NSWLR 440. 174 (1991) 34 NSWLR 308. 175 [1988] 2 Qd R 1. Callinan Crennan as a provision of her own monies, the uncontradicted evidence before the trial judge was that, like her daughters, she provided monies of her own. The duty of Mrs Elias and her daughters in equity to account for profits A further basis on which Say-Dee contended that the Court of Appeal's conclusions could be supported lies in the submission that Mrs Elias and her daughters were liable to account for profits made as a result of their acquisition of the units. Leaving aside extreme doubts about the existence of any profits, the argument must fail, since Mrs Elias and her daughters were not mere volunteers, but provided consideration for the acquisition of their units and had no notice of any breach of fiduciary duty176. Indefeasibility177 The Court of Appeal's reasoning. The four units in the names of Mr Elias and his family in No 15 are land held under the Real Property Act. So is No 13, in the name of Lesmint. Subject to irrelevant exceptions, s 42(1) of that Act provides: "Notwithstanding the existence in any other person of any estate or interest which but for this Act might be held to be paramount or to have priority, the registered proprietor for the time being of any estate or interest in land recorded in a folio of the Register shall, except in case of fraud, hold the same, subject to such other estates and interests and such entries, if any, as are recorded in that folio, but absolutely free from all other estates and interests that are not so recorded ...". According to the Court of Appeal, it was contended that s 42(1) enabled Mrs Elias and her daughters to take upon registration an estate free of any claim by Say-Dee to their units, and that the fraud exception did not apply. Beyond recording a submission by Say-Dee that this point had not been the subject of any 176 See above at [100] and [123]-[129]. 177 This was evidently not relied on in Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373, for although it is likely that the land involved was Torrens land, nothing is said about indefeasibility. Callinan Crennan pleading or submission to the trial judge, the Court of Appeal did not deal with the fraud point. The Court of Appeal went on178: "However, the principle of immediate indefeasibility from registration is subject to any personal obligation by which the registered proprietor might be forced in personam to deal with the registered title in some particular manner." The Court of Appeal quoted Frazer v Walker179: "[T]his principle in no way denies the right of a plaintiff to bring against a registered proprietor a claim in personam founded in law or in equity, for such relief as a court acting in personam may grant." The Court of Appeal then said180: "A further fallacy in Farah's argument is that if it applies to Mrs Elias and the two daughters, then it must also apply to Mr Elias and Lesmint, each of whom became registered for an estate in fee simple in a unit in No 15 and the whole of No 13 respectively. It is not suggested by Farah that indefeasibility of title prevents a declaration that Mr Elias and Lesmint hold their interests in No 13 and 15 on constructive trust. If this be so, then the same principle applies to Mrs Elias and the two daughters where they have benefited from and are in receipt of an interest in the property the acquisition of which constituted a breach by their husband and/or father of his fiduciary duties. Accordingly, in my opinion, Mrs Elias and her daughters as well as Mr Elias and Lesmint hold their respective interests in Nos 13 and 15 on a constructive trust." Pleading difficulty. Can the relevant appellants rely on s 42(1) in this Court in view of the state of the pleadings? Say-Dee itself pleaded one matter necessary to support the contentions which the appellants wished to advance in relation to s 42(1), namely that Lesmint, Mr Elias, Mrs Elias and the two daughters are registered proprietors respectively of No 13 and the units in No 15. The more difficult problem stems from the appellants' wish to negate the 178 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [237]. 179 [1967] 1 AC 569 at 585. 180 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 at [238]. Callinan Crennan existence of fraud in the s 42(1) sense and personal equities in the Frazer v Walker sense. Fraud has been made a relevant issue in relation to Say-Dee's desire that this Court consider the second limb of Barnes v Addy. Further, as noted above181, although Say-Dee did not plead that the conduct of Farah was a dishonest and fraudulent design, a question appears to have arisen before the trial judge and the Court of Appeal as to whether Mrs Elias and her daughters were dishonest, and both the trial judge and the Court of Appeal recorded that one issue was whether the cross defendants were knowing participants in Farah's breach of fiduciary duty. Say-Dee has been permitted to deploy arguments in relation to those areas in this Court. Say-Dee's whole case in all courts has rested on claimed personal equities. In these circumstances there can be no unfairness in permitting Mrs Elias and her daughters in this Court, as they did in the Court of Appeal, to rely on s 42(1) and to seek to negate fraud and personal equities, which for other purposes Say-Dee relies on. For the same reason there can be no unfairness in permitting Mr Elias and Lesmint to do the same, despite their having abstained from doing so in the Court of Appeal and at the trial. Fraud. "Fraud" in s 42(1) means "actual fraud, moral turpitude"182. The findings above negate actual fraud or moral turpitude not only on the part of Mrs Elias and her daughters, but also on the part of Mr Elias; and Lesmint is in the same position as Mr Elias. Even if the Court of Appeal's factual findings about disclosure were not reversed, Mr Elias's non-disclosures cannot be described as amounting to "actual fraud", and the other parties are in no worse position. In personam exception. An exception operating outside the language of s 42(1) can exist in relation to certain legal or equitable causes of action against the registered proprietor. So far as Say-Dee was relying on Barnes v Addy, it was certainly alleging a recognised equitable cause of action. In Macquarie Bank Ltd v Sixty-Fourth Throne Pty Ltd183 Tadgell JA (Winneke P concurring, Ashley AJA 181 See above at [159]-[169]. 182 Butler v Fairclough (1917) 23 CLR 78 at 97 per Isaacs J. See also Bahr v Nicolay (No 2) (1988) 164 CLR 604 at 614 per Mason CJ and Dawson J, citing Assets Co Ltd v Mere Roihi [1905] AC 176 at 210 per Lord Lindley; Bank of South Australia Ltd v Ferguson (1998) 192 CLR 248 at 255 per Brennan CJ, Gaudron, McHugh 183 [1998] 3 VR 133 at 156-157. Callinan Crennan dissenting) held that a claim under Barnes v Addy was not a personal equity which defeated the equivalent of s 42(1) in Victoria, namely the Transfer of Land Act 1958, s 42(1). Tadgell JA said184: "[H]ere it is not possible to escape the circumstance that, if there was a 'knowing receipt' by the appellant, it was a receipt by virtue of registration under the Transfer of Land Act." He continued185: "The argument for the respondent appears to assume that the acquisition by a mortgagee, in that capacity, of a proprietary interest following registration of a forged instrument of mortgage in respect of property that is subject to a trust amounts to a receipt by the mortgagee of trust property. If it were so, it might be possible to treat the holder of the registered proprietary interest as a constructive trustee arising from 'knowing receipt' of trust property. As it seems to me, however, there is neither room nor the need, in the Torrens system of title, to do so. If registration of the mortgagee's interest is achieved dishonestly then the registration, and with it the interest, are liable to be set aside not because, on registration, the registered holder became a constructive trustee but because s 42(1) recognises that fraud renders the interest defeasible. If, on the other hand, the registration is not achieved by fraud the Act provides, subject to its terms, for an indefeasible interest. Those terms allow, it is true, a claim in personam founded in equity against the holder of a registered interest to be invoked to defeat the interest; and a claim in personam founded in equity may no doubt include a claim to enforce what is called a constructive trust ... [T]o recognise a claim in personam against the holder of a mortgage registered under the Transfer of Land Act, dubbing the holder a constructive trustee by application of a doctrine akin to 'knowing receipt' when registration of the mortgage was honestly achieved, would introduce by the back door a means of undermining the doctrine of indefeasibility which the Torrens system establishes. It is to be distinctly understood that, until a forged instrument of mortgage is registered, the mortgagee receives nothing: before registration the 184 [1998] 3 VR 133 at 156. 185 [1998] 3 VR 133 at 156-157. Callinan Crennan instrument is a nullity. As Street J pointed out in Mayer v Coe186 ... the proprietary rights of a registered mortgagee of Torrens title land derive 'from the fact of registration and not from an event antecedent thereto'. In truth, I think it is not possible, consistently with the received principle of indefeasibility as it has been understood since Frazer v Walker187 and Breskvar v Wall188, to treat the holder of a registered mortgage over property that is subject to a trust, registration having been honestly obtained, as having received trust property. The argument that the appellant is liable as a constructive trustee because it had 'knowingly received' trust property should in my opinion fail." That reasoning, with which four judges in the Full Court of the Supreme Court of Western Australia agreed in LHK Nominees Pty Ltd v Kenworthy189, and with which Davies JA agreed in Tara Shire Council v Garner190, applies here. In that latter case, however, Atkinson J (McMurdo P concurring), in deciding whether a claim was arguable on the pleadings, disagreed with Davies JA and with the majority in Macquarie Bank Ltd v Sixty-Fourth Throne Pty Ltd. Atkinson J and McMurdo P preferred the dissenting judgment of Ashley AJA in that case, the dicta of Hansen J in Koorootang Nominees Pty Ltd v Australia and New Zealand Banking Group Ltd191, where the indefeasibility point was not argued192, and where in any event there was dishonesty; and the dicta of 186 [1968] 2 NSWR 747 at 754. 188 (1971) 126 CLR 376. 189 (2002) 26 WAR 517 at 549 [186] per Murray J, 555 [210] per Anderson and Steytler JJ, 568-572 [273]-[299] per Pullin J. See also White v Tomasel [2004] 2 Qd R 438 at 455 [72] per McMurdo J. 190 [2003] 1 Qd R 566 at 568 [34]. 191 [1998] 3 VR 16 at 105. 192 [1998] 3 VR 16 at 75. Callinan Crennan de Jersey J in Doneley v Doneley193, where indefeasibility was not argued either194. The essential point on which Ashley AJA differed from the majority in Macquarie Bank Ltd v Sixty-Fourth Throne Pty Ltd was put thus195: "The proposition that an equity may be recognised and enforced so long as it involves no conflict with the indefeasability [sic] provisions has not prevented the High Court from imposing constructive trusts so as to recognise equities in cases where the transfer of real property was effected at different stages in the course of events giving rise to the equities". He referred to Bahr v Nicolay (No 2)196, Muschinski v Dodds197 and Baumgartner v Baumgartner198. Earlier, Ashley AJA had said199 that the "necessary balance" between personal equities and indefeasibility was "disclosed by the judgment of Wilson and Toohey JJ in Bahr v Nicolay (No 2)"200. However, as Pullin J pointed out in LHK Nominees Pty Ltd v Kenworthy201, in those cases "the defendant was the primary wrongdoer, attempting to ignore an obligation to share or convey the land with or to the plaintiff. In none of those cases was the defendant a party who merely had notice of an earlier interest or notice of third party fraud." There 193 [1998] 1 Qd R 602. 194 Tara Shire Council v Garner [2003] 1 Qd R 566 at 568-569 [36] and 584 [88] n 94. 195 [1998] 3 VR 133 at 166. 196 (1988) 164 CLR 604. 197 (1985) 160 CLR 583. 198 (1987) 164 CLR 137. 199 [1998] 3 VR 133 at 162. 200 (1988) 164 CLR 604 at 637-638. He also referred to Mason CJ and Dawson J at 613 and Brennan J at 653-655, to Baumgartner v Baumgartner (1987) 164 CLR 137 at 147-149 per Mason CJ, Wilson and Deane JJ and 151-153 per Toohey J, and to Muschinski v Dodds (1985) 160 CLR 583. 201 (2002) 26 WAR 517 at 571 [289]. Callinan Crennan is no analogy between the constructive trusts involved in those cases and that which can arise from application of the first limb of Barnes v Addy. Although the Court of Appeal referred to Macquarie Bank Ltd v Sixty- Fourth Throne Pty Ltd on another point, it did not refer to that case or LHK Nominees Pty Ltd v Kenworthy in relation to indefeasibility. It ought to have followed those cases. The Court of Appeal's suggestion that if Mrs Elias and her daughters obtained indefeasible title, Mr Elias and Lesmint would also do so, and that that is absurd, is erroneous. There is no absurdity unless fraud is established against Mr Elias and Lesmint, and this was not done. Had it been done, s 42 would not have assisted them. Hence the registered proprietors prevail over Say-Dee even if they are volunteers. Causation The Court of Appeal rejected an argument advanced by the appellants that since Say-Dee had financial difficulties which could have prevented it taking up the opportunities to buy No 13 and No 15, it could not be said that any breach of fiduciary duty was causative of loss. It is not necessary to examine the detail of the Court of Appeal's reasoning or the appellants' criticisms of it. Since the primary case against the second to sixth appellants rests on their supposed receipt of property, causal questions do not arise. Where a defendant has received trust property, or property in relation to which fiduciary duties existed, with notice, the cause of action is complete without having to examine causation questions. Remedies In view of the conclusions above in relation to Farah's disclosures, the relief granted to Say-Dee by the Court of Appeal cannot stand, and both appeals must be allowed. No general point of principle arises from the orders. However, they have a curious aspect. Ordinarily relief by way of constructive trust is imposed only if some other remedy is not suitable202. In the present circumstances, what other remedy applied would depend on an election by Say- Dee between equitable compensation (which Say-Dee requested in the amended 202 Giumelli v Giumelli (1999) 196 CLR 101 at 113-114 [10], 125 [49]-[50]. Callinan Crennan cross-claim) or an account of profits (which it did not). Say-Dee has not discharged the onus of proving that there was a loss, in the sense that it has not been shown that if Say-Dee had paid half the price of No 15 and No 13 when they were acquired it would not now be worse off. Although on 7 August 2006 Say-Dee undertook to pay the receivers sufficient sums to pay off arrears under mortgages over No 13 and No 15 and maintain payments, Say-Dee did not offer to pay half the price with interest since the time when the units were acquired as a term of the relief sought, and the Court of Appeal did not impose that term. The orders contemplate that the sale of No 11, No 13 and No 15, no part of which has been developed, is to be postponed for an uncertain time. If there were to be a sale, the appellants preferred an order for an immediate sale. Instead the parties, discordant as they are, are yoked together indefinitely. The premises are bringing in no rental income because they were vacated with a view to sale in mid 2006; and that sale was forestalled by an injunction obtained by Say-Dee. The properties, which cost $3.4 million in the years 1998 to 2002, are now, valued as separate sites, worth only $2.7 million. Other costs have been incurred – stamp duty, the difference between interest and rent – and yet others will have to be incurred in future. There is evidence that if the properties are sold with development consent, which can be obtained no earlier than November 2007, on various assumptions they will be worth $7.43 million. Both sides appear to be under financial pressure. Since the quantity of the appellants' capital tied up in No 13 and No 15 is much greater than the quantity of Say-Dee's capital tied up in No 11, there is force in the appellants' allegation that the practical effect of the orders is unjustly to permit Say-Dee to search for an elusive profit without bearing half the financial burdens incurred to this point, while compelling the appellants to share in any loss. All monetary accounting is postponed until eventual sale. On sale, the second to sixth appellants are to be reimbursed their costs of acquisition, retention, maintenance and improvement of No 13 and No 15. In the event of a loss, half of it is to be paid by Say-Dee, but it is not clear that Say-Dee could do so. In all the circumstances the orders made in this case furnish no satisfactory precedent. Callinan Crennan Orders The appeal by Farah and related parties should be allowed. There should be an order setting aside the orders of the Court of Appeal of the Supreme Court of New South Wales made on 21 December 2005 and varied on 28 November 2006. There should also be an order that the appeal by Say-Dee to the Court of Appeal from the judgment and orders of the Supreme Court of New South Wales dated 19 August 2004 and 22 November 2004 be dismissed, and an order that Say-Dee pay the appellants' costs of the proceedings in this Court and in the Court of Appeal.

HIGH COURT OF AUSTRALIA AND PLAINTIFF THE STATE OF VICTORIA & ANOR DEFENDANTS [2017] HCA 29 17 August 2017 ORDER The questions stated by the parties in the amended special case dated 17 February 2017 and referred for consideration by the Full Court be answered as follows: Question (a) Is s 74AA of the [Corrections Act 1986 (Vic)] invalid on the ground it is contrary to Ch III of the Constitution? Answer Question (b) Who should pay the costs of the proceeding? Answer The plaintiff. Representation K L Walker QC and D B Bongiorno with B C Gauntlett for the plaintiff (instructed by Stary Norton Halphen) R M Niall QC, Solicitor-General for the State of Victoria with G A Hill for the first defendant (instructed by Victorian Government Solicitor) Submitting appearance for the second defendant S P Donaghue QC, Solicitor-General of the Commonwealth with G J D del Villar the Commonwealth, the Attorney-General of intervening (instructed by Australian Government Solicitor) for M G Sexton SC, Solicitor-General for the State of New South Wales with J E Davidson for the Attorney-General for the State of New South Wales, intervening (instructed by Crown Solicitor (NSW)) P J Dunning QC, Solicitor-General of the State of Queensland with A D Keyes for the State of Queensland, intervening (instructed by Crown Solicitor (Qld)) the Attorney-General of P D Quinlan SC, Solicitor-General for the State of Western Australia with H C Richardson for the Attorney-General for the State of Western Australia, intervening (instructed by State Solicitor (WA)) C D Bleby SC, Solicitor-General for the State of South Australia with F J McDonald for the Attorney-General for the State of South Australia, intervening (instructed by Crown Solicitor (SA)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Constitutional law (Cth) – Constitution – Ch III – State Supreme Courts – Principle in Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51; [1996] HCA 24 – Where s 74AA of Corrections Act 1986 (Vic) prevents parole order in respect of plaintiff unless Adult Parole Board satisfied plaintiff in imminent danger of dying or seriously incapacitated and does not have physical ability to harm any person – Where s 74AA identifies plaintiff by name and only applies to plaintiff – Whether s 74AA interferes with sentences imposed by Supreme Court in manner which substantially impairs institutional integrity of Supreme Court – Whether Crump v New South Wales (2012) 247 CLR 1; [2012] HCA 20 distinguishable – Whether necessary or appropriate to decide if function conferred by s 74AA could validly be exercised by division of Adult Parole Board which includes current judicial officer. Words and phrases – "enlistment of judicial officers", "institutional integrity", "minimum term", "non-parole period", "parole", "party-specific legislation", "sentencing". Constitution, Ch III. Corrections Act 1986 (Vic), ss 61, 61A, 64, 74, 74AA, 74AAB. Corrections Amendment (Parole) Act 2014 (Vic), ss 1, 3. Interpretation of Legislation Act 1984 (Vic), ss 4, 6. Penalties and Sentences Act 1985 (Vic), s 17. Sentencing Act 1991 (Vic), Sched 1, cl 2. KIEFEL CJ, BELL, GAGELER, KEANE, NETTLE, GORDON AND EDELMAN JJ. On 10 November 1988, Julian Knight pleaded guilty in the Supreme Court of Victoria to seven counts of murder and 46 counts of attempted murder. The Supreme Court sentenced him to imprisonment for life in respect of each count of murder, and imprisonment for 10 years in respect of each count of attempted murder, and fixed a minimum term of 27 years as the term during which he was not to be released on parole. The minimum term was fixed under s 17 of the Penalties and Sentences Act 1985 (Vic) ("the Sentences Act") and since the enactment of the Sentencing Act 1991 (Vic) has been referred to as a non-parole period. The non-parole period fixed in respect of Mr Knight expired on or about 8 May 2014. On 2 April 2014, when expiration of the non-parole period was imminent, the Parliament of Victoria enacted the Corrections Amendment (Parole) Act 2014 (Vic) ("the Amending Act"). The Amending Act inserted a new s 74AA into the Corrections Act 1986 (Vic) ("the Corrections Act"). The effect of s 74AA of the Corrections Act is to prevent the Adult Parole Board ("the Board") from ordering that Mr Knight be released on parole unless satisfied, amongst other things, that Mr Knight is in imminent danger of dying or is seriously incapacitated and that, as a result, he no longer has the physical ability to do harm to any person. Mr Knight is not at present in imminent danger of dying. Nor is he seriously incapacitated. By special case in a proceeding brought by Mr Knight against the State of Victoria and the Adult Parole Board in the original jurisdiction of the High Court, a single substantive question has been stated for the opinion of the Full Court. Is s 74AA invalid on the ground that it is contrary to Ch III of the Constitution? In support of an affirmative answer to that question, Mr Knight advances two discrete arguments. Each seeks in a different way to invoke the principle, associated with Kable v Director of Public Prosecutions (NSW)1, that a law which substantially impairs the institutional integrity of a court so as to be incompatible with its role as a repository of federal jurisdiction under Ch III of (1996) 189 CLR 51; [1996] HCA 24. Bell Nettle Gordon the Constitution is invalid2. The first argument is that the section interferes with the sentences imposed by the Supreme Court. The second is that the section enlists judicial officers who are members of the Board in a function that is repugnant to or incompatible with the exercise of federal jurisdiction by the courts of which those judicial officers are members. The question is to be answered in the negative. The first argument fails because neither in its legal form nor in its substantial practical operation does the section interfere with the sentences imposed by the Supreme Court. The second argument fails because the Board has not in fact been constituted, and does not need to be constituted, to include a judicial officer for the purpose of performing the function conferred by the section. Whether the function conferred by the section would be repugnant to or incompatible with the exercise of federal jurisdiction by the court of which a judicial officer is a member is not appropriate for determination. The sentence Section 17 of the Sentences Act, in the form in which it stood on 10 November 1988, required a court imposing a sentence of two or more years to fix "as part of the sentence" a lesser term, called a "minimum term", which was to be at least six months less than the term of the sentence, "during which the offender shall not be eligible to be released on parole", unless the court considered that "the nature of the offence and the antecedents of the offender render[ed] the fixing of a minimum term inappropriate". When sentencing Mr Knight in the Supreme Court, Hampel J correctly characterised a minimum term not as a period at the end of which the prisoner was to be released but rather as "a period before the expiration of which, having regard to the interest of justice, he cannot be released"3. His Honour noted that the nature and purpose of a minimum term was that stated in Power v The 2 Forge v Australian Securities and Investments Commission (2006) 228 CLR 45 at 76 [63]; [2006] HCA 44; Attorney-General (NT) v Emmerson (2014) 253 CLR 393 at 424 [40]; [2014] HCA 13; North Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 256 CLR 569 at 593-595 [39]-[40], 617-620 [119]- [127], 637-638 [183]-[184]; [2015] HCA 41. 3 R v Knight [1989] VR 705 at 710. Bell Nettle Gordon Queen4: "to provide for mitigation of the punishment of the prisoner in favour of his rehabilitation through conditional freedom, when appropriate, once the prisoner has served the minimum time that a judge determines justice requires that he must serve having regard to all the circumstances of his offence"5. Noting that the prosecution did not contend that a minimum term should not be fixed, Hampel J considered that fixing a minimum term was appropriate having regard to Mr Knight's age and prospects of rehabilitation as well as to other mitigating factors. In fixing the minimum term at 27 years, Hampel J took into account, on the one hand, the need to ensure that the minimum term did not destroy the punitive effect of the sentences of imprisonment for life and, on the other hand, that an unduly high minimum term would defeat the purpose of Mr Knight's rehabilitation and possible release at a time when he would still be able to adjust to life in the community6. The parole regime Section 74AA was inserted into the parole regime created by Div 5 of Pt 8 of the Corrections Act. That regime establishes the Board7, which is to consist of persons appointed by the Governor in Council as well as the Secretary to the Department of Justice and Regulation8. Persons able to be so appointed to the Board include Judges and Associate Judges of the Supreme Court, Judges of the County Court and Magistrates9. They also include retired Judges of the Supreme Court or the County Court and retired Magistrates10. The Governor in Council (1974) 131 CLR 623 at 629; [1974] HCA 26. [1989] VR 705 at 710-711. [1989] VR 705 at 711. 7 Section 61(1) of the Corrections Act. 8 Section 61(2) of the Corrections Act. 9 Section 61(2)(a), (ab), (b) and (c) of the Corrections Act. 10 Section 61(2)(da) of the Corrections Act. Bell Nettle Gordon must appoint a member who is a Judge or retired Judge to be chairperson of the Board11. Membership of the Board currently includes a Judge of the County Court, two retired Judges of the County Court, a number of Magistrates and a number of retired Magistrates, some of whom are reserve Magistrates under the Magistrates' Court Act 1989 (Vic). No Judges or Associate Judges of the Supreme Court are currently members. The current chairperson of the Board is one of the two retired Judges of the County Court. The central functions of the Board are the making under s 74 and cancellation under s 77 of parole orders, a parole order being an order, by instrument, "that a prisoner serving a prison sentence in respect of which a non- parole period was fixed be released on parole at the time stated in the order (not being before the end of the non-parole period)"12. In determining whether to make or cancel a parole order, the Board is obliged to give paramount consideration to the safety and protection of the community13. The effect of the Board making a parole order under s 74 is that, unless the Board revokes the order before the time for release stated in the order, the prisoner must be released at that time14. The period beginning on the day on which the prisoner is released from prison on parole and ending at the end of the prison sentence is the parole period in relation to the prisoner15. If the parole period elapses without the Board cancelling the parole or the prisoner committing an offence for which he or she is sentenced to imprisonment, the prisoner is regarded as having served the prison sentence and is wholly discharged from the sentence. But until the parole period so elapses, or until the prisoner is otherwise 11 Section 61A(1) of the Corrections Act. 12 Section 74(1) of the Corrections Act. 13 Section 73A of the Corrections Act. 14 Section 74(1) of the Corrections Act. 15 Section 55(1) of the Corrections Act, definition of "parole period". Bell Nettle Gordon discharged from the prison sentence, the person released on parole is regarded as being still under sentence16. The Board is permitted to exercise its functions in divisions17. Each division consists of at least three members, at least one of whom must be a Judge, retired Judge, Associate Judge, Magistrate or retired Magistrate, who is to be chairperson of the division18. Subject to requirements for the existence of particular divisions to perform particular functions19, the chairperson of the Board has discretion to give directions as to the arrangement of the business of the Board and as to the persons who are to constitute divisions of the Board for the purposes of particular matters20. One division of the Board, which is required to exist by s 74AAB, is the Serious Violent Offender or Sexual Offender Parole division ("the SVOSO division"), membership of which is required to include the chairperson of the Board21. The sole function of the SVOSO division is to decide whether or not to release a prisoner on parole in respect of a sexual offence or a serious violent offence, including murder22. An order under s 74 that a prisoner be released on parole in respect of a sexual offence or a serious violent offence can only be made by the SVOSO division23, and the SVOSO division can only make such an 16 Section 76 of the Corrections Act. 17 Section 64(1) of the Corrections Act. 18 Section 64(2) of the Corrections Act. 19 Sections 64A and 74AAB of the Corrections Act. 20 Section 64(3) of the Corrections Act. 21 Section 74AAB(1) of the Corrections Act. 22 Sections 74AAB(2) and 77(9) of the Corrections Act and cl 2 of Sched 1 to the Sentencing Act 1991 (Vic). 23 Section 74AAB(3) of the Corrections Act. Bell Nettle Gordon order if another division has recommended that parole be granted and the SVOSO division has considered that recommendation24. In performing its functions, the Board is not bound by the rules of natural justice25, is not bound by the rules of evidence or any practices or procedures applicable to courts of record, and may inform itself on any matter as it sees fit26. The Amending Act The Amending Act stated its purpose as being to amend the Corrections Act "in relation to the conditions for making a parole order for the prisoner Julian Knight"27. The sole operative provision of the Amending Act was that which inserted s 74AA into the Corrections Act28. Section 74AA is headed "Conditions for making a parole order for Julian Knight". The section relevantly provides: "(1) The Board must not make a parole order under section 74 in respect of the prisoner Julian Knight unless an application for the order is made to the Board by or on behalf of the prisoner. The application must be lodged with the secretary of the Board. (3) After considering the application, the Board may make an order under section 74 in respect of the prisoner Julian Knight if, and only if, the Board— is satisfied (on the basis of a report prepared by the Secretary to the Department) that the prisoner— 24 Section 74AAB(5) of the Corrections Act. 25 Section 69(2) of the Corrections Act. 26 Section 71 of the Corrections Act. 27 Section 1 of the Amending Act. 28 Section 3 of the Amending Act. Bell Nettle Gordon is in imminent danger of dying, or is seriously incapacitated, and as a result he no longer has the physical ability to do harm to any person; and has demonstrated that he does not pose a risk to the community; and is further satisfied that, because of those circumstances, the making of the order is justified. In this section a reference to the prisoner Julian Knight is a reference to the Julian Knight who was sentenced by the Supreme Court in November 1988 to life imprisonment for each of 7 counts of murder." In the Second Reading speech for the Bill for the Amending Act in the Legislative Assembly on 13 March 2014, the Minister for Police and Emergency Services described the Bill as implementing "a key commitment of the Victorian coalition government in relation to community safety – to make certain the government's commitment to protect the community from Julian Knight by keeping him in jail until he can pose no threat to the community"29. The Minister explained30: "Julian Knight committed one of the most heinous crimes in the history of Victoria. Victorians can rightly expect that the government will do whatever we can to ensure Julian Knight is never released until he can do no harm, and with this bill, this government is delivering on that commitment. On 10 November 1988 Julian Knight was sentenced to life imprisonment, with a non-parole period of 27 years. That non-parole period is due to 29 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 13 March 2014 30 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 13 March 2014 Bell Nettle Gordon expire later this year. This bill means that Julian Knight will never be released except in very restrictive circumstances, essentially mirroring preconditions contained in New South Wales legislation upheld by the High Court in the decision of Crump v New South Wales (2012) 247 CLR 1. The effect of these provisions are that Julian Knight will die in jail, or will be in such a condition on release that he will be a threat to no-one." The Minister concluded that, with the Bill, "the Victorian community can be certain that they are protected forever from the possibility that Julian Knight will one day be free to commit another atrocity"31. The s 74AA application On 11 March 2016, Mr Knight lodged with the secretary of the Board an application under s 74AA(1) for the Board to make a parole order under s 74 in respect of him. On 27 July 2016, a division of the Board consisting of a retired Judge of the County Court and two non-judicial members considered the application and decided to require certain reports including a report from the Secretary to the Department of Justice and Regulation under s 74AA(3). Those reports have not yet been received and the Board has taken no further steps to progress the application. Mr Knight and the defendants are at issue as to whether s 74AAB applies to any parole order that might be made under s 74 in respect of him so as to require that the order be made only by the SVOSO division and after a recommendation of another division that parole be granted. That issue of statutory construction does not need to be resolved in order to dispose of the arguments advanced on the constitutional question. No interference with sentence Emphasising that the minimum term of his sentences fixed by Hampel J was, under s 17 of the Sentences Act, "part of" those sentences, Mr Knight argues that s 74AA interferes with the sentence imposed on him in a manner 31 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 13 March 2014 Bell Nettle Gordon which substantially impairs the institutional integrity of the Supreme Court. The interference is argued to lie in the practical operation of the section. That practical operation is said to be to replace a party-specific judicial judgment about eligibility for parole at a particular point in time with a party-specific legislative judgment about the same matter. Acknowledging that the preconditions to the making of a parole order imposed by s 74AA are the same in substance as the preconditions imposed by s 154A of the Crimes (Administration of Sentences) Act 1999 (NSW) ("the Administration of Sentences Act"), the validity of which was upheld in Crump v New South Wales32, Mr Knight seeks to distinguish Crump on the basis that s 74AA has a more specific operation. What distinguishes s 74AA from s 154A, he argues, is that s 74AA targets him alone. If and to the extent it cannot be distinguished, he argues, Crump should be reopened and overruled. Crump cannot be distinguished and should not be reopened. That s 74AA has an operation more specific than s 154A of the Administration of Sentences Act is a distinction without a difference. Section 154A targeted a closed class of prisoners each of whom was at the time of its enactment serving a sentence of imprisonment for life and each of whom answered the description in that section of a "serious offender the subject of a non-release recommendation". The legal and practical operation of s 154A in respect of each member of that class, including the plaintiff in Crump, was identical in substance to the legal and practical operation of s 74AA in respect of Mr Knight. The conclusion in Crump that s 154A "did not impeach, set aside, alter or vary the sentence under which the plaintiff suffers his deprivation of liberty"33 applies equally to s 74AA. That conclusion reflected the nature and purpose of a court's determination of a minimum term of imprisonment in the context of a statutory regime for parole as explained in Power v The Queen34 and as correctly identified by Hampel J to have been applicable to the fixing of a minimum term under s 17 of the Sentences Act. 32 (2012) 247 CLR 1; [2012] HCA 20. 33 (2012) 247 CLR 1 at 27 [60]. 34 (1974) 131 CLR 623 at 628-629. Bell Nettle Gordon There are circumstances in which the party-specific nature of legislation can be indicative of the tendency of that legislation to interfere with an exercise of judicial power35. This is not one of them. The sentences of imprisonment for life imposed by Hampel J provide the authority for the imprisonment of Mr Knight during the term of his natural life. The minimum term of those sentences fixed by Hampel J under s 17 of the Sentences Act as part of those sentences did no more than to set a period during which Mr Knight was not to be eligible to be released on parole. As Hampel J expressly recognised at the time, the fixing of that minimum term said nothing about whether or not he would be released on parole at the expiration of that minimum term. Whether or not Mr Knight would be released on parole at the expiration of the minimum term was simply outside the scope of the exercise of judicial power constituted by imposition of the sentences. The sentences imposed by Hampel J could not, and did not, speak to that question. By making it more difficult for Mr Knight to obtain a parole order after the expiration of the minimum term, s 74AA does nothing to contradict the minimum term that was fixed. Nor does it make the sentences of life imprisonment "more punitive or burdensome to liberty"36. The section did not replace a judicial judgment with a legislative judgment. It does not intersect at all with the exercise of judicial power that has occurred. No necessary enlistment of judicial officers Mr Knight's separate argument concerning the enlistment of judicial officers who are members of the Board in a function that is repugnant to or incompatible with the exercise of federal jurisdiction by the courts of which those judicial officers are members seeks to tread a fine line, denying the validity of s 74AA on that basis but maintaining the validity of s 74. 35 Eg Liyanage v The Queen [1967] 1 AC 259 at 291; Nicholas v The Queen (1998) 193 CLR 173 at 188 [20], 211-212 [83], 221 [113], 232-233 [146]-[148], 278-279 [253]-[255]; [1998] HCA 9. 36 Baker v The Queen (2004) 223 CLR 513 at 528 [29]; [2004] HCA 45. Bell Nettle Gordon The argument is advanced in a statutory context in which the function conferred on the Board by s 74AA can be performed by a division of the Board constituted by members who are not current judicial officers and in a factual context in which the division of the Board which to date has been considering the application that has been made under s 74AA(1) includes no members who are current judicial officers. That context is not relevantly different even if it is assumed that s 74AAB applies so as to require that any parole order that might be made under s 74 as a result of an application under s 74AA(1) be made only by the SVOSO division after considering a recommendation of another division: there is no statutory requirement and, in circumstances where the chairperson of the Board is a retired Judge, no practical necessity for membership of the SVOSO division to include a current judicial officer. As stated in Lambert v Weichelt37, and emphasised since38, "[i]t is not the practice of the Court to investigate and decide constitutional questions unless there exists a state of facts which makes it necessary to decide such a question in order to do justice in the given case and to determine the rights of the parties". That approach to the determination of constitutional questions means that it is ordinarily inappropriate for the Court to be drawn into a consideration of whether a legislative provision would have an invalid operation in circumstances which have not arisen and which may never arise if the provision, if invalid in that operation, would be severable and otherwise valid39. That is so even where the validity of the provision is challenged by a party sufficiently affected by the provision to have standing: a party will not be permitted to "roam at large" but will be confined to advancing those grounds of challenge which bear on the validity of the provision in its application to that party40. 37 (1954) 28 ALJ 282 at 283. 38 Eg Duncan v New South Wales (2015) 255 CLR 388 at 410 [52]; [2015] HCA 13. 39 British Medical Association v The Commonwealth (1949) 79 CLR 201 at 258; [1949] HCA 44; Tajjour v New South Wales (2014) 254 CLR 508 at 585-589 [168]-[176]; [2014] HCA 35. 40 The Real Estate Institute of NSW v Blair (1946) 73 CLR 213 at 227; [1946] HCA 43; Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 69 [156]; [2009] HCA 23. Bell Nettle Gordon Severance of s 74AA, if invalid in any of its potential operations, is governed by s 6 of the Interpretation of Legislation Act 1984 (Vic) ("the Interpretation Act"). That section mirrors s 15A of the Acts Interpretation Act 1901 (Cth) in requiring that every Act "shall be construed as operating to the full extent of, but so as not to exceed" legislative power "to the intent that where a provision of an Act, or the application of any such provision to any person, subject-matter or circumstance, would, but for [that] section, have been construed as being in excess of that power, it shall nevertheless be a valid provision to the extent to which it is not in excess of that power and the remainder of the Act and the application of to other persons, subject-matters or circumstances shall not be affected". Of numerous cases which have provided examples of provisions expressed in general terms being construed distributively so as to operate validly to the extent that they did not operate to infringe constitutional limitations on legislative power, that closest to the present is Wilson v Minister for Aboriginal and Torres Strait Islander Affairs41, where a reference to "a person"42 nominated by the Minister to prepare a report was construed to exclude a judge of a Ch III court43. that provision Application of s 6 of the Interpretation Act to a provision of another Act can, of course, be displaced by a contrary intention appearing in that other Act44. But it is obvious that an intention contrary to the application of the section cannot be found merely in an intention that a provision which would otherwise have been construed as being in excess of legislative power should apply to all persons, subject-matters or circumstances to which the provision would otherwise have been construed as applicable. A contrary intention, if one exists, is rather to be found in an intention that the provision should be wholly invalid if it could not apply to all of the persons, subject-matters or circumstances to which 41 (1996) 189 CLR 1 at 20, 26; [1996] HCA 18. 42 Section 10(1)(c) of the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth). 43 See also Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416 at 503; [1996] HCA 56, construing s 6 of the Industrial Relations Act 1988 (Cth). 44 Section 4(1)(a) of the Interpretation Act. Bell Nettle Gordon it would otherwise have been construed as applicable: that the provision "was intended to operate fully and completely according to its terms, or not at all"45. If s 74AA were to be invalid in circumstances in which the function conferred by the section was sought to be exercised by a division of the Board which included a judicial officer, s 74AA would be construed in accordance with s 6 of the Interpretation Act to have valid application in circumstances in which the function is sought to be exercised by a division of the Board which did not include a judicial officer. That is because, although Div 5 of Pt 8 of the Corrections Act plainly intends that judicial officers should be able to participate in performance of the functions of the Board, nothing in the Corrections Act manifests an intention that the Board should be wholly incapable of performing a function in which a judicial officer could not participate. There is no difficulty construing "the Board" in the provision conferring the function as the Board exercising the function in a division constituted in a manner which does not take the provision beyond legislative power. Enlistment of a judicial officer in performance of the function being neither required nor imminent, it is unnecessary and inappropriate to determine whether s 74AA would be invalid in circumstances in which the function conferred by the section might be sought to be exercised by a division of the Board which included a judicial officer. Questions and answers The questions formally stated for the opinion of the Full Court and their answers are as follows. Is s 74AA of the Corrections Act invalid on the ground it is contrary to Ch III of the Constitution? Answer: No. 45 Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416 at 502, quoting Pidoto v Victoria (1943) 68 CLR 87 at 108; [1943] HCA 37. See Tajjour v New South Wales (2014) 254 CLR 508 at 585-586 [169]. Bell Nettle Gordon (b) Who should pay the costs of the proceeding? Answer: The plaintiff.

HIGH COURT OF AUSTRALIA TIAN ZHEN ZHENG APPLICANT AND DEJU CAI RESPONDENT Zheng v Cai [2009] HCA 52 9 December 2009 ORDER Special leave to appeal granted. Appeal treated as instituted and heard instanter and allowed with costs. Set aside orders 1, 2, 3 and 4 of the orders of the Court of Appeal of the Supreme Court of New South Wales made on 25 February 2009 and in place thereof order that: the judgment at trial in favour of the appellant be set aside and in place thereof judgment be entered in favour of the appellant in the sum agreed pursuant to order 4 of these orders and with costs in her favour calculated accordingly; the respondent pay the costs of the appellant of the appeal in the Court of Appeal; and otherwise the appeal to the Court of Appeal be dismissed. 4. Within 28 days of the date of these orders the parties file agreed proposed orders implementing order 3(a) of these orders. On appeal from the Supreme Court of New South Wales Representation S Norton SC with M Fraser for the applicant (instructed by Brydens Law Office) S G Campbell SC with S E McCarthy for the respondent (instructed by McLachlan Chilton Solicitors) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Tort – Negligence – Damages – Motor vehicle accident – Personal injury – Assessment – Economic loss – Regular payments made by church to applicant following motor vehicle accident – Whether benevolent payments should be taken into account when calculating damages – Whether intention of giver of benevolent payments determinative – Where collateral benefit exists for giving benevolent payments – Relevance of public policy in disregarding benevolent payments in assessment of damages. Appeal – Issue not raised at trial – Motor vehicle accident – Personal injury – Economic loss – Issue at trial whether plaintiff an employee – Issue on appeal concerned real intent behind benevolent payments – Where applicant would have objected to admissibility of evidence or called further witnesses if issue raised at trial – Whether party bound by presentation of case at trial – Prejudice. Words and phrases – "assessment of damages", "benevolent payment", "gift", "intention", "public policy", "volunteer work". FRENCH CJ, GUMMOW, CRENNAN, KIEFEL AND BELL JJ. On 4 September 2009, Gummow and Bell JJ referred for hearing by an enlarged Bench two grounds upon which special leave is sought to appeal from the decision of the New South Wales Court of Appeal (Giles and Basten JJA and Hoeben J), and dismissed the balance of the special leave application. At trial in the District Court, Judge Garling entered a verdict for the applicant for $300,681 in damages for the injuries she suffered on 11 May 2000 in an accident at Chatswood between a taxi and the car driven by the respondent and in which she was a passenger. She suffered significant injuries to her back and neck and experienced chronic depression. The respondent had admitted breach of his duty of care. The Court of Appeal set aside that verdict and entered judgment for the applicant in the sum of $17,447.91. For reasons not presently material, the applicant accepts that the verdict should have been reduced to $144,886 plus interest. The difference between the parties which remains as to the recovery of $144,886 rather than $17,447.91, is encapsulated in the first of the two grounds argued before the enlarged Bench of this Court. These grounds are that the Court of Appeal erred: (a) in reducing the damages by taking into account certain payments of a benevolent nature made to the applicant; and (b) by making for itself findings of fact in response to a new argument raised by the respondent. For the reasons which follow, special leave should be granted and the appeal allowed with costs. The facts The applicant was born in China in 1956. She arrived in Australia in 1990 and has limited proficiency in the English language. Her evidence at the trial was given through an interpreter. The applicant's accountancy qualifications were not recognised in Australia and she worked in Sydney as a sewing machine operator for a cushion manufacturer. She is a member of the Christian Assembly of Sydney ("the Assembly"), which has a church at Roseville ("the Church"). The Assembly was incorporated on 1 November 2001 as a not-for-profit association and is accepted by the Australian Taxation Office as a charitable institution. The Church has a congregation of about 200. There are no employees and all offices and functions are performed by volunteers. Some time before the accident the applicant had applied to attend a bible college in Singapore to obtain the degree of Bachelor of Theology. She left Crennan Bell Sydney and attended the college between July 2001 and June 2005 and, after graduating, returned to Sydney. In his reasons for judgment, the primary judge remarked that what seemed a straight forward assessment of damages became complicated when, in a lengthy cross-examination, the respondent's counsel put to the applicant that she was not telling the truth and challenged her credibility. Counsel for the respondent had told his Honour that one of the precious few issues was whether the applicant was an employee of the Assembly and that her reliability and honesty was "a central theme in the case". However, the primary judge found that the applicant was a satisfactory and acceptable witness. His Honour found that the applicant cannot do work which requires a lot of sitting or standing or heavy lifting and cannot work as a seamstress. Her limited English is a handicap to employment in a clerical capacity. Following her return to Sydney in June 2005, the applicant performed voluntary work for the Church for about 20 hours per week. She worked on most days but without set times. The volunteer work, which was continuing at the time of the trial, included answering the telephone, speaking to people interested in the Church and, at times, the applicant did some preaching. Her efforts were limited by her disabilities. Between 26 June 2005 and 24 April 2006 the applicant received fortnightly payments into her bank account at an average of $580 per week. The payments were continuing at a slightly increased rate at the date of trial in August 2007. The primary judge found that the payments were made by the Assembly from donations to the Assembly, to assist the applicant with her rent and living expenses. His Honour held that the applicant was not an employee and, in so doing, rejected the case put by the respondent that moneys were received on account of the applicant's employment. The decision of the Court of Appeal In his grounds of appeal to the Court of Appeal, the respondent submitted that the primary judge erred in failing to characterise "the exertions of the [applicant] within [the Assembly] from July 2005 to the date of trial as employment" and the receipts as income gained through her personal exertion. However, that was not the basis upon which the Court of Appeal allowed the appeal. The Court of Appeal accepted the respondent's submission that the Crennan Bell "real intent behind the payments was to enable the [applicant] to perform volunteer work more effectively for the Church". The applicant submits to this Court that in so concluding the Court of Appeal allowed the respondent to succeed upon a new case. The Court of Appeal referred to a letter signed by the Public Officer and Treasurer of the Assembly, under its common seal, dated 1 May 2006, in response to a subpoena to produce documents at the trial. The text of the subpoena is not in evidence but it appears to have been seeking documents to support the respondent's case that the applicant was an employee of the Assembly. The letter included the statement that the Assembly had "provided financial support to [the applicant] for her daily living and accommodation expenses to allow her to function more effectively as a volunteer worker". (emphasis added) The Court of Appeal set out a passage from the reasons of Windeyer J in The National Insurance Co of New Zealand Ltd v Espagne1: "In assessing damages for personal injuries, benefits that a plaintiff has received or is to receive from any source other than the defendant are not to be regarded as mitigating his loss, if: (a) they were received or are to be received by him as a result of a contract he had made before the loss occurred and by the express or implied terms of that contract they were to be provided notwithstanding any rights of action he might have; or (b) they were given or promised to him by way of bounty, to the intent that he should enjoy them in addition to and not in diminution of any claim for damages. The first description covers accident insurances and also many forms of pensions and similar benefits provided by employers: in those cases it is immaterial that, by subrogation or otherwise, the contract may require a refund of moneys paid, or an adjustment of future benefits, to be made after the recovery of damages. The second description covers a variety of public charitable aid and some forms of relief given by the State as well as the produce of private benevolence. In both cases the decisive consideration is, not whether the benefit was received in consequence of, or as a result of the injury, but what was its character: and that is determined, in the one case by what under his contract the plaintiff had (1961) 105 CLR 569 at 599-600; [1961] HCA 15. See also Redding v Lee (1983) 151 CLR 117 at 136-138; [1983] HCA 16. Crennan Bell paid for, and in the other by the intent of the person conferring the benefit. The test is by purpose rather than by cause." (emphasis added) The Court of Appeal referred to the words from the letter of 1 May 2006, emphasised above, as indicative of "the real intent" of enabling the applicant to perform more effectively her volunteer work, thereby taking the payments outside the second category identified in Espagne and rendering them more analogous to payments for services. The Court of Appeal noted that the only evidence of the intent of the Church came from the letter. But in this Court the applicant properly submits that, had this been an issue at trial, it would have been open to her to object to the tender of the letter and, if that had failed, to call evidence on the issue. The respondent should have been bound by the presentation of his case at trial and the departure from that course in the Court of Appeal has so prejudiced the applicant's position as to call for remedy by this Court2. The nature of the payments Further, even if regard properly be had to the letter of 1 May 2006 and the issue of the benevolent nature of the payments to the applicant was to be determined upon the record before the Court of Appeal, the applicant should have succeeded there on that issue. In Parry v Cleaver3 Lord Wilberforce remarked that the decision not to make a deduction from damages for receipts from voluntary funds had been put either on public policy or the intention of the subscribers. His Lordship referred to what had been said to that effect by Andrews CJ in Redpath v Belfast and County Down Railway4. But these considerations are not discrete; rather, it is the policy of the law which informs the importance of the wishes of those providing the benefaction. 2 Coulton v Holcombe (1986) 162 CLR 1 at 7-8; [1986] HCA 33; Water Board v Moustakas (1988) 180 CLR 491 at 497; [1988] HCA 12. [1970] AC 1 at 39. [1947] NI 167 at 170. Crennan Bell This is apparent from the treatment of the subject by Windeyer J in Espagne5. His Honour began with the propositions that damages for personal injuries are not to be assessed by constructing a profit and loss account and that the compassion, kindness and sympathy of friends and the gifts of charitable persons cannot be weighed against pain and suffering caused by the wrongdoer, such that the balance of account favours that wrongdoer. From that basis his Honour reasoned that voluntary gifts should not diminish damages because "they are given for the benefit of the sufferer and not for the benefit of the The "intent" of the donor thus assumed great importance, but it was an intent of a particular character, contrasting an intention to benefit the wrongdoer with an intention to benefit the victim. Thus, Windeyer J said7: "If, out of sympathy for a man unfortunately responsible for a motor accident, someone gives money to the victim, stating that he does so in the interest of the tortfeasor and to diminish the damages he must pay, effect must be given to his intention. If, on the other hand, the donor's expressed intention is that the injured man shall enjoy his bounty in addition to whatever rights he may have to recover damages from the tortfeasor, effect must in my opinion, be given to that intention. And if nothing be said, the intention of the giver may be inferred from the circumstances." To that there may be added the observation by Professors Harper, James and Gray in their treatise upon United States tort law8: "Often of course the intent was never even thought out by the donor, certainly not expressed. In these cases of private generosity the best solution seems to be a rule of thumb that would give greatest scope to the donor's generosity and to the adjustment of moral obligations within the more or less intimate relationships that usually bring such generosity into play. The gift should be disregarded in assessing damages." (1961) 105 CLR 569 at 598. (1961) 105 CLR 569 at 598. (1961) 105 CLR 569 at 598-599. See also Kars v Kars (1996) 187 CLR 354 at 362-363; [1996] HCA 37. 8 The Law of Torts, 2nd ed (1986), vol 4, §25.22 at 663. Crennan Bell It is here that the decision of the Court of Appeal encounters well-founded complaints of error. The leading judgment was delivered by Hoeben J. Speaking of the letter of 1 May 2006, his Honour said: "That letter makes it clear that the payments were intended not merely to benefit [the applicant] insofar as her daily living and accommodation expenses were concerned, but to enable her to function more effectively as a volunteer church worker." (emphasis added) The letter is to be read as a whole and, if this be done, it is apparent that the Assembly was anxious to counter any argument that the applicant worked as its employee, rather than as a volunteer. The critical question, on the respondent's case, was whether the payments by the Assembly were intended by it to operate in the interest of the respondent and to diminish the damages he otherwise would be liable to pay. The conclusion expressed by Hoeben J does not address this consideration. Rather, his Honour concluded that the intention was to benefit the applicant in her circumstances after the accident, but denied the legal consequence which Espagne would attach to that conclusion by finding in the Assembly an additional intention with respect to voluntary work. The presence of a collateral benefit of this kind to the Assembly could not substitute for the necessary intention on its part to benefit the respondent by diminishing his liability for damages at the expense of the award recovered by the applicant, the object of the bounty provided by the Assembly. Reducing the applicant's award without finding such an intention would defeat rather than advance the policy of the law in this area. It may be added that the applicant's evidence was that she welcomed the opportunity to assist at the Church as an activity to fill her time and a response to the kindness which had been shown to her by members of the Church. Situations such as this emphasise the justice and wisdom of the statement by Professors Harper, James and Gray set out earlier in these reasons. Hoeben J went on to refer to the decision in Marinko v Masri9 as supporting the classification of the payments to the applicant as "a form of compensation for her inability to obtain employment". In this Court, counsel for (2000) Aust Torts Reports ¶81-581. Crennan Bell the respondent supported that classification as akin to the treatment of unemployment benefits in Evans v Muller10. Those benefits were provided pursuant to the Social Security Act 1947 (Cth) and, as later emphasised in Manser v Spry11, in such cases the ascertainment of whether the statutory benefit is to be enjoyed independently of and cumulatively upon the right to damages requires attention to the intention of the legislature. It will be apparent that this use of "intention", with examination by the judicial branch of government of the subject, scope and purpose of the text enacted by the legislature, differs from that discussed earlier in these reasons which deals with private benefaction by a donor such as the Assembly in the present case. It has been said that to attribute an intention to the legislature is to apply something of a fiction12. However, what is involved here is not the attribution of a collective mental state to legislators. That would be a misleading use of metaphor13. Rather, judicial findings as to legislative intention are an expression of the constitutional relationship between the arms of government with respect to the making, NAAV v Minister for Immigration and Multicultural and Indigenous Affairs14, the preferred construction by the court of the statute in question is reached by the application of rules of interpretation accepted by all arms of government in the system of representative democracy. interpretation and application of As explained laws. What these situations, whether or not arising under statute, have in common is the need to answer the ultimate question, framed by Mason and Dawson JJ in Redding v Lee15 as being: 10 (1983) 151 CLR 117. 11 (1994) 181 CLR 428 at 436; [1994] HCA 50. 12 Mills v Meeking (1990) 169 CLR 214 at 234; [1990] HCA 6; Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319 at 339-340; [1991] HCA 28. 13 Singh v The Commonwealth (2004) 222 CLR 322 at 385 [159]; [2004] HCA 43. 14 (2002) 123 FCR 298 at 410-412. 15 (1983) 151 CLR 117 at 137. Crennan Bell "Was the benefit conferred on [the plaintiff] independently of any right or redress against others and so that he might enjoy the benefit even if he enforced the right?" In Evans v Muller (reported with Redding v Lee) their Honours, who were part of the majority, concluded that unemployment benefits provided by the federal law had the character of a partial substitute for wages16. But that holding does not support the denial by the Court of Appeal that the private benefaction conferred upon the applicant by the Assembly was to be enjoyed by her independently of redress against the respondent. Nor does Marinko v Masri17 assist the respondent. In that case, the Protective Commissioner had the administration under the Protected Estates Act 1983 (NSW) of the estate of the seriously incapacitated wife of the plaintiff husband. The Court of Appeal held18 that in an action for nervous shock sustained by the husband at the time of the injury to his wife, the payments made by the Protective Commissioner to the husband should be treated as reducing the economic loss suffered by the husband and that his damages should be reduced accordingly. However, Handley JA, who gave the leading judgment, emphasised that the payments were not made to the husband as gifts from motives of charity or benevolence, and thus normally intended to benefit the recipient not any tortfeasor; the payments were made pursuant to the statutory power to apply the estate to the benefit of the family of the wife. Conclusion and orders The conclusion is that, special leave being granted, the appeal to this Court should be allowed with costs. Orders 1, 2, 3 and 4 of the orders of the Court of Appeal should be set aside. In place of order 3, the applicant should have her costs of the trial calculated as if judgment had been entered in her favour in the amount now to be entered as a result of the appeal to this Court plus the amount of $155,795.09, being the amount by which the damages were reduced by the Court of Appeal pursuant to s 151Z(1)(e) of the Workers Compensation Act 1987 (NSW); a matter raised by the respondent late in the 16 (1983) 151 CLR 117 at 145. 17 (2000) Aust Torts Reports 81-581. 18 (2000) Aust Torts Reports 81-581 at 64,208. Crennan Bell appeal to that Court. With respect to order 4, the applicant should have her costs of the appeal to the Court of Appeal. A difficulty arises with respect to order 2 and the calculation of the amount for which judgment should now be entered for the applicant. The parties should have 28 days within which to bring in an agreed proposed order disposing of the appeal to this Court. In default of agreement the appeal should be listed by the Registrar for further directions by a single Justice.

HIGH COURT OF AUSTRALIA APPLICANT AND MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS RESPONDENT Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26 8 May 2003 ORDER Application dismissed. On appeal from the Federal Court of Australia Representation: S Dranichnikov appeared in person J A Logan SC with R M Derrington for the respondent (instructed by Australian Government Solicitor) HIGH COURT OF AUSTRALIA GUMMOW, KIRBY, HAYNE AND CALLINAN JJ RE MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS & ORS RESPONDENTS EX PARTE SERGEY DRANICHNIKOV APPLICANT/PROSECUTOR Re Minister for Immigration and Multicultural Affairs; Ex parte Dranichnikov 8 May 2003 ORDER 1. Order absolute for a writ of certiorari directed to the fourth respondent quashing the decision of the fourth respondent in matter V97/06976 dated 11 August 1998. 2. Order absolute for a writ of prohibition directed to the first respondent prohibiting him from acting upon or giving effect to or proceeding further upon the decision of the first respondent by his delegate the third respondent dated 20 May 1997. 3. Order absolute for a writ of mandamus directed to the fourth respondent requiring it to review according to law the decision of the first respondent by his delegate the third respondent dated 20 May 1997. 4. First respondent to pay the costs of the prosecutor. Representation: S Dranichnikov appeared in person J A Logan SC with R M Derrington for the respondents (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Dranichnikov v Minister for Immigration and Multicultural Affairs Re Minister for Immigration and Multicultural Affairs; Ex parte Dranichnikov Immigration – Refugees – Protection visa – Fear of persecution for reason of membership of particular social group – Whether Refugee Review Tribunal considered applicant was member of broader class of social group than that claimed – Whether Tribunal misunderstood and failed to address applicant's case – Whether constructive failure by Tribunal to exercise jurisdiction – Whether failure to accord natural justice. Practice and procedure – High Court – Concurrent applications for special leave to appeal and for constitutional writs – Discretionary considerations in the grant of constitutional relief – Whether availability of appeal a discretionary bar to constitutional relief – Relevance of repeal of applicable legislation to the form of relief provided. Constitution, s 75(v). Migration Act 1958 (Cth), s 476. GLEESON CJ. I regret that I am unable to share the conclusion reached by the other members of the Court, not because of any disagreement on a matter of principle, but because I have a different understanding of the reasons of the Refugee Review Tribunal ("the Tribunal"), whose decision is under review. The facts are set out in the other judgments. Since mine is a dissenting view, on a purely factual issue, I will state my reasons briefly. It is contended that, so far, all who have considered Mr Dranichnikov's case – the delegate, the Tribunal, Kiefel J, and the Full Court of the Federal Court – have misunderstood, and therefore failed to address, that case. The particular question to be decided is whether that is true of the Tribunal. The essence of the contention is that the Tribunal wrongly thought that the relevant social group to be considered, for the purpose of deciding whether Mr Dranichnikov had a well-founded fear of persecution by reason of membership of such a group, was businessmen, whereas his case was that he was a member of a more limited group consisting of businessmen who publicly criticised law enforcement authorities for failing to take action against crime or criminals. The Tribunal, in its reasons, said: "The Tribunal was informed of the circumstances surrounding the Applicant's actions in relation to trying to stamp out the attacks on entrepreneurs which had been increasing in the latter part of 1993 and the beginning of 1994. He had joined a number of other business people and had made representations to the Mayor and attended public meetings to highlight the plague of corruption and lawlessness. In order to pursue his objective in the field in which he was employed, he worked for the formation of a committee for the registration of property titles; this was achieved. Both the Applicant and his wife gave a number of examples of police inaction after crimes had been committed and standover tactics employed when citizens were doing the right thing and reporting instances to the police. Indeed the Applicant claims that the police put pressure on him to sign a letter requesting the discontinuation of the investigation into the attempt on his own life. He signed the letter because he felt that request as a threat. That was in late February or early March 1994. The Tribunal finds that the harm feared is not motivated by a to a the Tribunal need not proceed Convention reason, hence consideration of whether the fear is well-founded ... The Applicant's adviser had posited in his submission that the Applicant was a member of a particular social group, namely, businessmen in Russia. Even if the Tribunal were to accept this proposition, there is no indication that the persecution is 'for reasons of' membership of this group. Following the attempt on the Applicant's life in 1994 the Applicant does not report anything other than dissatisfaction with the society and the political system as a whole; there have been no further attempts to harm him or his family, nor are there indications of behaviour on the part of the Applicant which would attract the adverse attention of anyone for reasons of being a businessman in Russia. The actions which the Applicant described, which he took with other businessmen, in making representations to the Mayor were those of a concerned citizen and not part of a cognizable unit which could be considered a particular social group under the Convention." The Tribunal's reasons were given on 11 August 1998. The submission to which the Tribunal was referring was contained in a letter of 3 August 1998 to the Tribunal from Mr Dranichnikov's solicitors. The letter said: "In recent years businessmen in Russia have been persecuted and murdered purely for belonging to that specific group of people known as 'businessmen'. Mr Dranichnikov by definition of his employment was recognised as a member of the business community who was also actively involved in the pursuit of justice. Mr Dranichnikov by virtue of his businessman status and his stance against crime was considered obstructive and worthy of elimination. The attempt on his life is a very real indication of the graveness of his situation and his justifiable fears of returning to his country of origin." (emphasis added) the social group". The solicitors evidently, and for good reason, recognised that there may be a difficulty in persuading the Tribunal to treat people who complained about failure to enforce the law, or people who took a "stance against crime", as a "particular stressed Accordingly, Mr Dranichnikov's status as a "businessman", and argued that businessmen constituted a "specific group of people". Mr Dranichnikov's stance against crime was given as a reason why he was at particular risk, but when it came to identifying the relevant social group, his status as a businessman was put in the forefront of the argument. The reasons of the Tribunal responded to the submission as it was put. The Tribunal considered that the most that could be said was that he was a "concerned citizen and not part of a cognizable unit which could be considered a particular social group". The Tribunal appears to me to have considered the argument advanced by Mr Dranichnikov's solicitors, in the light of the evidence and the Convention. submission I am not persuaded that the Tribunal misunderstood Mr Dranichnikov's case, or failed to address it. I would dismiss the application for special leave to appeal, and the application for constitutional writs, with costs. Callinan GUMMOW AND CALLINAN JJ. The applicant, Mr Dranichnikov, seeks special leave to appeal against a decision of the Full Court of the Federal Court, and prerogative relief under s 75(v) of the Constitution. The question which his application under s 75(v) raises is whether, in substance, the Refugee Review Tribunal ("the Tribunal") failed to exercise jurisdiction to review a decision of the delegate of the Minister. If special leave were granted the applicants would urge that the Federal Court erred in dismissing the applicant's application for a review of the Tribunal's decision under s 476 of the Migration Act 1958 (Cth) ("the Act"). The facts Mr Dranichnikov arrived in Australia on 8 January 1997 with his wife Olga Dranichnikov and their daughter Maria Dranichnikov. On 20 May 1997, an application that they made on 2 April 1997 for a protection visa under the Act was refused by a delegate of the Minister for Immigration and Multicultural Affairs. They sought a review of the refusal by the Tribunal. On 11 August 1998, the Tribunal decided to affirm the delegate's decision. In doing so it made a number of findings in the applicant's favour. The findings of the Tribunal Both Mr Dranichnikov and his wife gave credible accounts of their experiences in Vladivostok in Russia. They described, accurately it follows, several instances of police inaction after crimes had been committed and of oppression by police officers. Mr Dranichnikov was the General Manager of a company that provided real estate and legal services in respect of property transactions in the city. The business of the company was not a large one. It had a turnover of about $A15,000 a month and employed only eight people. Before February 1994, Mr Dranichnikov had tried to interest the authorities in ways and means of preventing attacks, including murderous ones, on entrepreneurs. These had been increasing in the latter part of 1993 and in early 1994. His efforts extended to the making of representations to the Mayor of Vladivostok, and attending public meetings to draw attention to endemic corruption and lawlessness in the city. Another of his endeavours, and one which was successful, was the formation of a committee for the registration of titles. His efforts apparently provoked a serious assault upon him in which he was stabbed at his home in Vladivostok in February 1994. He was so severely injured that he had to be admitted to hospital. Callinan The Tribunal also accepted Mr Dranichnikov's evidence that there was an inability and unwillingness on the part of the security forces within Russia to deal with crime. In late February or early March 1994, under duress by police officers in Vladivostok, he signed a letter requesting discontinuation of the investigation into the assault upon him. Mr Dranichnikov has a subjective fear of returning to Russia: that fear is of physical harm from criminal activities by unknown persons. But the fear, the Tribunal held, did not relate to a "Convention reason": there was no indication that any persecution that he has suffered was "for reasons of" his membership of a particular social group constituted by businessmen in Russia. Neither Mrs Dranichnikov nor their daughter advanced any separate case for the grant of protection visas. In its reasons the Tribunal stated what it apparently thought to be Mr Dranichnikov's case, that the particular social group to which he claimed to belong was of "businessmen in Russia". He contends however that in fact he submitted to both the Minister's delegate and the Tribunal that the relevant class was a narrower one, of businessmen who publicly criticised and sought reform of the law enforcement authorities to compel them to take effective measures to prevent crime in Vladivostok and to protect Russian businessmen who protested. It is apparent that Mr Dranichnikov placed emphasis in his initial application upon his membership of that narrower group. This appears from a summary of this aspect of his case made on 20 May 1997 by the Minister's delegate in his reasons for dismissing the application: "The applicant['s] claim is based on the principle that he belongs to a particular social group of 'Entrepreneurs' – as a businessman in Russia, he is at risk from the criminal organisations that operate in Russia and who have links with the authorities. He states that his profile is raised because he organised anti-crime meetings and spoke out in public against the authorities [sic] inability to defeat crime." (emphasis added) When the delegate came however to decide Mr Dranichnikov's application he overlooked that Mr Dranichnikov had put his case in the way in which he had. The delegate concluded: "I do not accept that there is evidence to suggest that there is general persecution of businessmen in Russia." On 8 September 1998 the Dranichnikovs lodged a further application for review with the Tribunal in respect of the delegate's refusal to grant them a protection visa. The Tribunal refused that application on 21 January 1999 on the basis that Callinan it had no jurisdiction because it had already, by its earlier decision, finally determined a request for review of the delegate's decision. The proceedings in the Federal Court On 15 February 1999, Mr Dranichnikov applied to the Federal Court for the judicial review of both decisions of the Tribunal. Later, in April 1999, he sought judicial review in the Court of a separate, but not unrelated, refusal of an application, this time for bridging visas. The applications to the Federal Court were heard together by Kiefel J who, on 7 February 2000, dismissed them. Mr Dranichnikov appealed to the Full Court of the Federal Court against her Honour's decisions. Then, as he had before Kiefel J, Mr Dranichnikov sought to press many, mostly hopeless contentions. It seems likely that his best case, that of membership of the smaller identifiable group of protesting businessmen which he maintained there, was lost in the morass of argumentative and illogical propositions that he advanced generally. The appeals were heard by the Full Court (Whitlam, Tamberlin and Sundberg JJ) which on 14 December 2000 unanimously dismissed them. On 28 June 2002 Gaudron and Gummow JJ referred an application for special leave to appeal from those decisions, and an application for constitutional relief pursuant to s 75(v), to this Court. The proceedings in the High Court Mr Dranichnikov wished to raise a number of different matters, but by reason of earlier rulings of the Court, argument was confined to the following question only: "[W]hether the Tribunal erred in law in treating the applicant as a member of the social group of entrepreneurs and/or businessmen and not of a more limited group consisting of entrepreneurs and/or businessmen who publicly criticised law enforcement authorities for failing to take action against crime or criminals". Mr Dranichnikov contends in this Court that the Tribunal misstated and failed to deal with the case presented to it. We accept this to be so. The passage that we have quoted from the decision of the delegate shows clearly the emphasis that Mr Dranichnikov placed upon his membership of a special group, not just of business people, but of business people in public protest, in effect, about state sanctioned corruption including, on occasions, violence. There is no reason why he would have presented his case any differently before the Tribunal. And in fact he did not. He not only referred to, and relied upon the material which had been presented to the delegate, and which in turn was before the Tribunal, but also included a written submission by his solicitor which reiterated Mr Dranichnikov's membership of a group of legitimate business people "who pose a threat to Callinan organised crime"; and, that he had taken a "stance against crime". It is clear that the Tribunal misunderstood and failed to deal with this important aspect of To fail to respond to a substantial, clearly articulated argument relying upon established facts was at least to fail to accord Mr Dranichnikov natural justice. A failure to accord natural justice did not provide a statutory basis for a review of a decision of the Tribunal. This followed from the language of s 476(2)(a) of the Act (as it was when the applications were made1) which provided as follows: "(2) The following are not grounds upon which an application may be made under subsection (1): that a breach of the rules of natural justice occurred in connection with the making of the decision". The question remains however whether what occurred, either characterised as a failure to accord natural justice or as that, and more, which we consider it to be, including a constructive failure to exercise jurisdiction, entitles Mr Dranichnikov to relief under s 75(v) of the Constitution. It is to that question that we will now turn. At the outset it should be pointed out that the task of the Tribunal involves a number of steps. First the Tribunal needs to determine whether the group or class to which an applicant claims to belong is capable of constituting a social group for the purposes of the Convention2. That determination in part at least involves a question of law. If that question is answered affirmatively, the next 1 Section 476 was repealed and substituted by the Migration Legislation Amendment (Judicial Review) Act 2001 (Cth) and subsequently amended by the Jurisdiction of the Federal Magistrates Service Legislation Amendment Act 2001 (Cth). 2 Article 1A(2) of the Convention relating to the Status of Refugees done at Geneva on 28 July 1951, as amended by the Protocol relating to the Status of Refugees done at New York on 31 January 1967 defines a refugee as a person who: "Owing to well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country; or who, not having a nationality and being outside the country of his former habitual residence, is unable or, owing to such fear, is unwilling to return to Callinan question, one of fact, is whether the applicant is a member of that class. There then follow the questions whether the applicant has a fear, whether the fear is well founded, and if it is, whether it is for a Convention reason. The Tribunal failed to decide the first question. It decided another question, whether Mr Dranichnikov's membership of a social group, namely, of "businessmen in Russia" was a reason for his persecution and relevantly nothing more. The Tribunal should have decided the matter which was put to it, whether Mr Dranichnikov was a member of a social group consisting of entrepreneurs and businessmen who publicly criticised law enforcement authorities for failing to take action against crime or criminals. It seems to us that had that question been addressed it would in all likelihood have permitted of one only answer, an affirmative one. This is so because the Tribunal accepted Mr Dranichnikov as a witness of credit, and therefore the correctness of his account of his activities, and their climax, the violent assault which he suffered. In Minister for Immigration and Multicultural Affairs v Khawar "As her case is argued, and as a matter of principle, it would not be sufficient for Ms Khawar to show maladministration, incompetence, or ineptitude, by the local police. That would not convert personally motivated domestic violence into persecution on one of the grounds set out in Art 1A(2). But if she could show state tolerance or condonation of domestic violence, and systematic discriminatory implementation of the law, then it would not be an answer to her case to say that such a state of affairs resulted from entrenched cultural attitudes." The Dranichnikovs' case as presented to the Tribunal has in common with Ms Khawar's case, an apparent deliberate abstention by the authorities from the affording of protection to a member of an identified group. Indeed in Mr Dranichnikov's case, it appears that the authorities may have facilitated criminal conduct by forcing him to withdraw his complaint. The group to which he belongs is one which is smaller than the group in Khawar and accordingly is easier to identify and define. The reasoning of McHugh and Gummow JJ in the same case is to a similar effect to that of Gleeson CJ. Their Honours said4: (2002) 76 ALJR 667 at 671 [26]; 187 ALR 574 at 581. (2002) 76 ALJR 667 at 681 [84]; 187 ALR 574 at 594. Callinan "It should, in our view, be accepted that, whilst malign intention on the part of State agents is not required, it must be possible to say in a given case that the reason for the persecution is to be found in the singling out of one or more of the five attributes expressed in the Convention definition, namely race, religion, nationality, the holding of a political opinion or membership of a particular social group. If the reason for the systemic failure of enforcement of the criminal law lay in the shortage of resources by law enforcement authorities, that, if it can be shown with sufficient cogency, would be a different matter to the selective and discriminatory treatment relied upon here." The failure of the Tribunal to exercise jurisdiction is also analogous to the situation in Minister for Immigration and Multicultural Affairs v Bhardwaj5. In that case the Tribunal effectively denied Mr Bhardwaj a hearing of his application for an adjournment, and, as a result, a hearing of his substantive case of the kind to which he was entitled. The Tribunal's decision to affirm the Minister's decision to cancel Mr Bhardwaj's student visa was therefore made not just in breach of the rules of natural justice, but without affording him a hearing of the kind the Act required he be given. The Tribunal failed to give Mr Bhardwaj a hearing of his application for an adjournment as if it had never been made. It accordingly did not exercise jurisdiction in respect of a live application validly made to it. Relief under s 75(v) of the Constitution is, like prerogative relief generally, discretionary. One often compelling discretionary bar is the availability of other relief. Whilst it may be arguable that Mr Dranichnikov might have been entitled to relief under s 476(1)(e)6 of the Act, the uncertainty of (2002) 76 ALJR 598; 187 ALR 117. 6 At the relevant time, s 476(1)(e) provided: Subject to subsection (2), application may be made for review by the Federal Court of a judicially-reviewable decision on any one or more of the following grounds: (e) that the decision involved an error of law, being an error involving an incorrect interpretation of the applicable law or an incorrect application of the law to the facts as found by the person who made the decision, whether or not the error appears on the record of the decision". Callinan such an outcome, the repeal of s 476 as it then was, and the fact that before he could in any event pursue his arguments in respect of the decision of the Full Court of the Federal Court he would need special leave, mean that there is no relevant discretionary bar to constitutional relief here. The applicant has made out his entitlement to relief under s 75(v) of the Constitution. Writs of certiorari to quash the Tribunal's decision, and of mandamus to compel it to review the delegate's decision according to law, together with prohibition to prohibit any implementation of the delegate's decision should issue. The application for special leave to appeal should be dismissed. The first respondent should pay the applicant's costs of the application under s 75(v) of the Constitution. Kirby KIRBY J. These proceedings involve another challenge to a decision to refuse an applicant a protection visa as a refugee. The circumstances in which a person is entitled to protection in accordance with obligations that Australia has assumed under the Refugees Convention 19517 are incorporated in the Migration Act 1958 (Cth) ("the Act")8. These proceedings concern a suggested error made by the Refugee Review Tribunal established by the Act9 ("the Tribunal") in identifying the category upon which it was claimed a protection visa should issue. This mistake, so it is said, led to an error on the part of the Tribunal in reaching its conclusion which was adverse to the applicant. Having failed in a challenge to the Tribunal's decision in the Federal Court of Australia, the applicant applied to this Court for special leave to appeal. That application was referred to the Court as now constituted to be heard as on the return of an appeal. Concurrently with those proceedings, and in case the complaints fell outside the relief available under the Act as it then stood10, an application was brought in the original jurisdiction of this Court for relief by way of mandamus and prohibition and for certiorari to make such relief complete. The facts Mr Sergey Dranichnikov ("the applicant") arrived in Australia in January 1997 with his wife and daughter. In April 1997, application for a protection visa was made to the Minister for Immigration and Multicultural Affairs ("the Minister") on behalf of the Dranichnikovs on the ground that they were refugees. All of them are nationals of the Russian Federation. In accordance with the Act, a form was lodged setting out the application. To this form was annexed a "submission" that contained the basis of the applicant's claim for refugee status. The applicant stated that he had been appointed in late 1993 as general manager of a company in Vladivostok, which is on the Pacific Ocean coast of the Russian Federation. The company was a small enterprise, employing eight persons, including the applicant's wife. It had a turnover of approximately $A15,000 a month. According to the applicant: 7 Convention relating to the Status of Refugees done at Geneva on 28 July 1951, Art 1A, 1954 Australia Treaty Series 5. See also the Protocol relating to the Status of Refugees done at New York on 31 January 1967, 1973 Australia Treaty Series 8 See especially the Act, s 36(2). 9 The Act, s 457. 10 The Act was amended by the Migration Legislation Amendment (Judicial Review) Act 2001 (Cth). Kirby "At the end of 1993 and the beginning of 1994 there were number of murders and attempted murders of entrepreneurs. Number of such crimes was increasing, and it was covered by the press, TV and radio. Most of these crimes were unsolved and criminals were never found. As someone who belongs to the social group of entrepreneurs, it worried me extremely, as could see myself as a target. I openly criticised the work of the law authorities at meetings and organised protest gatherings. I could not stay uninvolved, when people were killed, and no one was punished for it." The applicant stated that, in February 1994, an attempt was made to kill him. He alleged that he was struck on the back in the hallway of his home by an assailant using a knife. The police were called but "they were indifferent to what has happened, neither were they interested in catching the criminal". According to the applicant, the police did not even take the knife of the assailant that had been dropped in the attack. The applicant said that before and after this attack he had been making demands for action by the authorities against the lawlessness and corruption that were pervasive in Vladivostok. The applicant stated in his submission: "My only possible 'crime' was that I spoke openly and directly against unlawfulness of security authorities." After the attack the applicant claimed to have been "under constant stress and fear". Because both he and his wife had a "strong sense of justice" they "very often spoke against the lawlessness". According to the applicant, "it became clear for me that the attempt on my life was due to this fact. In Russia, at the moment, murder is one way of dealing with people who are unwanted". The Minister assigned the applicant's application to his delegate, an officer of his department. The delegate's decision recorded his understanding of the applicant's claim. The delegate summarised the claim as being based on the fact that the applicant was a "businessman" who had "organised protest gatherings and meetings where he criticised the work of the security authorities". He recorded the stabbing attack on the applicant, the lack of interest of the authorities and the applicant's feeling that the attack was caused by his speaking out against the authorities. It was his speaking out that the applicant felt had raised his profile. The delegate considered the applicant's case within the Convention category of "membership of a particular social group"11. The delegate identified 11 The Convention, Art 1A says, relevantly: "For the purposes of the present Convention, the term 'refugee' shall apply to any person who: … (2) owing to (Footnote continues on next page) Kirby the "social group" in question as "entrepreneurs" and went on to elaborate this class further as "[businessmen] in Russia … at risk from the criminal organisations … who have links with the authorities". The delegate recorded the applicant's belief that his profile had been raised because "he organised anti- crime meetings and spoke out in public against the authorities [sic] inability to defeat crime"12. However, when it came to expressing his decision, the delegate confined the applicant's stated fear to the fact "that he will face differential harm as a businessman"13. Approaching the application in this way the delegate concluded14: "I do not accept that there is evidence to suggest that there is general persecution of businessmen in Russia." On that footing, the delegate rejected the applicant's claim that he had been targeted "because of a membership of a particular social group". What the applicant had suffered was no more than "criminal actions directed by the perception that the applicant as an individual is a worthy target for intimidation by the criminal elements of society"15. The applicant did not therefore suffer fear of persecution for a Convention reason if he returned to Russia. Following this rejection of his application, the applicant sought a review of the delegate's decision16 by the Tribunal. In support of this application, he caused his migration agent, a solicitor, to write to the registrar of the Tribunal clarifying his claim for protection. In this letter, the agent emphasised the importance of attributing weight to the applicant's protest activities which raised his profile "within the community [in Vladivostok] and [to] the threats against himself and his family [that] can in part be attributed to his involvement in these activities". The agent stated: well-founded fear of being persecuted for reasons of … membership of a particular social group or political opinion, is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country". 12 Decision of the delegate, par 3.3.1. 13 Decision of the delegate, par 3.3.3 (emphasis added). 14 Decision of the delegate, par 3.3.5 (emphasis added). 15 Decision of the delegate, par 3.3.5. 16 The Act, s 412. The powers of the Tribunal are set out in s 415. Kirby "Our understanding of the situation would indicate that Mr Dranichnikov would not be a potential target if he was not affiliated to that group of legitimate business people who pose a threat to organised crime. In recent years businessmen in Russia have been persecuted and murdered purely for belonging to that specific group of people known as 'businessmen'. Mr Dranichnikov by definition of his employment was recognised as a member of the business community who was also actively involved in the pursuit of justice. … [B]y virtue of his businessman status and his stance against crime [he] was considered obstructive and worthy of elimination. The attempt on his life is a very real indication of the graveness of his situation and his justifiable fears of returning to his country of origin." It is clear from this letter that the case that the applicant was propounding before the Tribunal was something more than fear of return to Russia by reason of his membership of the particular social group of businessmen or entrepreneurs in that country. The added elements were that the applicant claimed to be a businessman who could not accept the increasing levels of corruption and violence in Russia, denounced the suggested complicity of the authorities in it and took a public stance against such developments. In his evidence before the Tribunal, the applicant reasserted and elaborated these aspects of his claim. He described how he had joined in an "attempt to actually do something about [the] problem" of attacks on businessmen, instanced by the attack on him. Thus, he said that he had joined in a round table meeting held at the City Council office in Vladivostok. Together with other entrepreneurs he took "part in the discussions about our operation". He went on: "We wanted to involve the government, the police and other government agencies in that campaign of fighting crime, fighting corruption in order to protect citizens, in order to maintain order in the country and to maintain order in the way of the businesses operating. We asked the law enforcement agency to provide us with some information". According to the applicant, the results of his efforts were inconclusive. Experience had taught that people were being killed either for big money or because they became "unwanted for their activity". It was within weeks of the meeting at the City Council that the applicant was attacked at his home. The applicant ascribed the attack to the fact that he was "unwanted" because of his activities in seeking to "right things" and "help people". After the attack, the police returned to speak to the applicant. According to his statement, the police officer sat in the police car and warned him that pursuit of his assailant would be fruitless and, if successful, would lead to revenge. In accordance with the advice Kirby he received, the applicant signed a paper to the effect that he withdrew his complaint. The Tribunal described the applicant as a "credible witness who provided clear answers to the questions" asked of him. It said that "his wife also presented evidence which the Tribunal finds credible"17. It accepted that the applicant had a "subjective fear of returning to Russia because of the events which he described"18. It therefore approached the issue before it as one of determining "whether the harm feared is grounded in the Convention". Unfortunately, in answering that question, the Tribunal also mis-stated the "social group" that was relied on by the applicant. It said19: "The Applicant's adviser had posited in his submission that the Applicant was a member of a particular social group, namely, businessmen in Russia. Even if the Tribunal were to accept this proposition, there is no indication that the persecution is 'for reasons of' membership of this group. Following the attempt on the Applicant's life in 1994 the Applicant does not report anything other than dissatisfaction with the society and the political system as a whole; there have been no further attempts to harm him or his family, nor are there indications of behaviour on the part of the Applicant which would attract the adverse attention of anyone for reasons of being a businessman in Russia." It was on this basis that the Tribunal affirmed the delegate's decision not to grant the applicant a protection visa. The decisions of the Federal Court The applications for judicial review of the Tribunal's decision were heard in the Federal Court first by the primary judge (Kiefel J) and subsequently by a Full Court. At both levels, the applicant failed. Most of the issues addressed by the primary judge are no longer in contention. Perhaps because the applicant represented himself, he did not focus on the point that was ultimately argued in this Court. Instead, he raised sundry points of marginal or no significance, all of which failed. 17 Application of Serguei Dranichnikov, Decision and reasons for decision of the Refugee Review Tribunal, 11 August 1998 ("Decision of the Tribunal") at 5. 18 Decision of the Tribunal at 6. 19 Decision of the Tribunal at 6 (emphasis added). Kirby From the reasons of the judges of the Federal Court, it appears that the applicant contested the factual conclusions of the Tribunal relating to the cause of the fear of harm described by him in his application. Unsurprisingly, advanced in this way, the primary judge20 and the Full Court dismissed the complaint as an impermissible attempt on the part of the applicant to impeach the Tribunal's decision for an error of fact – a ground not amenable to review under s 476(1) of the Act. Presumably because the applicant failed to raise the point submitted in this Court, there was no consideration of whether an error of law, cognisable in the Federal Court within s 476(1), had been made out warranting the setting aside of the decision of the Tribunal. At first instance, that decision was treated as no more than a decision on its own facts, open to the Tribunal on the evidence disclosed in the record. Like the primary judge, the Full Court appears to have been distracted by a multitude of untenable points argued by the applicant. One of these was described, fairly, as a "quite ridiculous quibble"21. Others were rejected as "slight" and "of no significance"22. Unfortunately, this is what commonly happens when litigants, unfamiliar with the intricacies of the law, are obliged (or choose) to present their cases without legal representation. The risk is that the compounded effect of so many irrelevancies and false grounds will divert the court and obscure a viable ground that passes unnoticed. In the Full Court, presumably in response to a complaint raised by the applicant, the judges considered whether the Tribunal had erred in failing to address whether the applicant's "involvement in protest meetings about corruption and illegality" was a "manifestation of political opinion"23. Their Honours determined that "such involvement was not central to [the applicant's] case"24 which was put in "the context of his exposure to risk of harm as an 'entrepreneur'"25, thereby invoking the Convention ground of "particular social group" rather than political opinion. 20 Dranichnikov v Minister for Immigration and Multicultural Affairs (2000) 60 ALD 21 Dranichnikov v Minister for Immigration and Multicultural Affairs [2000] FCA 22 [2000] FCA 1801 at [47]. 23 [2000] FCA 1801 at [49]. 24 [2000] FCA 1801 at [49]. 25 [2000] FCA 1801 at [49]. Kirby Whilst the Full Court was prepared to accept that "[a]n asylum claimant does not have to pick the correct Convention 'label' to describe his or her plight", it stated that "the Tribunal can only deal with the claims actually made"26. On that footing, the Full Court rejected what it saw as the attempt to expand the applicant's "claim" to one based on "political opinion" stemming from his involvement in protests against corruption and illegality, his advocacy of human rights and his suggested role as a "whistle-blower". Once this foundation for relief was put to one side, the Full Court found no error in the primary judge's decision that warranted its intervention. The appeal was therefore dismissed. The issues By the time the proceedings reached this Court, enlarged by the application for constitutional writs, the focus of argument had changed somewhat. The ground upon which special leave to appeal from the judgment of the Full Court was sought (and relief claimed in the form of mandamus, prohibition and certiorari) was that the Tribunal (and the Federal Court) had misunderstood and mis-stated the applicant's case grounded in the Convention. Leaving aside the issue of fear of persecution "for reasons of … political opinion" and assuming that ground to be excluded by the way the application had been presented to the Tribunal, the applicant complained that the "particular social group" upon which he had relied had been expressed too broadly. He submitted that the mis-statement was critical to the Tribunal's rejection of his claim that the "fear" that he had successfully established was "for reasons of … membership of [the] particular social group" specified. The issues arising are therefore: (1) Did the Tribunal mis-state the "particular social group" upon which the applicant relied? If so, did that mis-statement affect the decision of the Tribunal? If so, in the application for special leave to appeal to this Court, did the Tribunal's error warrant relief in an appeal on the basis that, on the record, the Full Court should have allowed the appeal before it, set aside the decision of the Tribunal and ordered a rehearing upon the grounds for review then provided in s 476 of the Act? 26 [2000] FCA 1801 at [49]. Kirby If not (or in any event if it is appropriate to consider the application for constitutional writs), should such writs be granted to quash the decision of the Tribunal, to prohibit action upon it and to require a rehearing on the basis (as propounded) of a constructive failure of the Tribunal to exercise the jurisdiction and the powers which the applicant had invoked? If so, are there any discretionary reasons for declining constitutional relief? The Tribunal mis-stated the class relied upon When regard is had to the history of the applicant's endeavours to express the basis of his entitlement to a protection visa under the Act27, by reference to the definition of "refugee" appearing in the Convention, it seems clear that the applicant's case was not based, relevantly, on "political opinion" but on his "membership of a particular social group". It seems equally clear that the "particular social group" that the applicant was propounding was not one limited to "entrepreneurs" or "businessmen in Russia". There were added ingredients that refined the "group" relied upon and that sharpened the focus of the claim. The principal ingredients involved the participation by the entrepreneurs or business people concerned in the making of representations to the authorities in Vladivostok; in attending public meetings to "highlight the plague of corruption and lawlessness"28; and in appealing to the authorities for protection which the authorities were either unwilling or unable to provide. No doubt the Tribunal was aware of these added considerations. They were mentioned in the well-focussed submission of the applicant's agent; in the applicant's testimony before the Tribunal; and indeed in the history which the Tribunal itself recorded, adding the observation that the applicant was "credible" and had convinced the Tribunal of the presence of subjective fear. the applicant's The Tribunal's reasons were delivered within a short time of the agent's letter and the Tribunal accepted. Notwithstanding this, when the Tribunal came to define the "particular social group" for the purposes of the Convention, it described it as "businessmen in Russia"29. It then proceeded to assume that this "social group" was the one by which the other considerations in the Convention definition had to be measured in the applicant's case. testimony which 27 [2000] FCA 1801 at [49]. 28 Decision of the Tribunal at 5. 29 Decision of the Tribunal at 6. Kirby With respect, it is not correct to say, as the Full Court did, that prior to the Tribunal's decision, the applicant did not refine the "particular social group" upon which he was relying. Whilst various formulations were used by him, it is sufficiently clear that the applicant was explaining his subjective "fear" by reference to the peculiar circumstances that had impinged on his life in Vladivostok. These included his involvement with a group of businessmen who had felt sufficiently concerned to participate in discussions at the City Council; who had expressed concern about the lack of effective action by the authorities; whose members had suffered dangers of death and injury (as the applicant in February 1994 was to do) and who had sought intervention by the authorities, only to be disappointed. The applicant's case was therefore much more precise than a claim of fear for "being a businessman in Russia"30 – a huge class, inferentially including many persons who would have no fear and no foundation for protection as refugees. By expressing the applicant's claim as it did, the Tribunal mis-stated the case before it. The mis-stated class affected the Tribunal's decision The decision of the Tribunal indicates that the claim by the applicant was rejected on the basis of causation31. The Tribunal did not accept that the persecution was "'for reasons of' membership of [a particular social] group"32. The claim was held to "have no nexus with the Convention"33. The Tribunal's mis-statement of the class of social group was central to these conclusions. This is not an occasion to review the explanation, given by this Court in earlier cases34, of the origins, purpose and meaning of the residual category of "particular social group" expressed in the Convention. It is sufficient to say that this residual category was proposed by the Swedish delegation during negotiation of the Convention. The Swedish representative, Mr Petren, stated35: 30 Decision of the Tribunal at 6. 31 See these reasons at [50]. 32 Decision of the Tribunal at 6 (emphasis added). 33 Decision of the Tribunal at 6. 34 eg Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225. 35 UN Doc A/Conf.2/SR.3 at 14 cited in Compton, "Asylum for Persecuted Social Groups: A Closed Door Left Slightly Ajar – Sanchez-Trujillo v INS, 801 F 2d 1571 (9th Cir 1986)", (1987) 62 Washington Law Review 913 at 925. Kirby "[E]xperience had shown that certain refugees had been persecuted because they belonged to particular social groups. The draft Convention made no provision for such cases, and one designed to cover them should be accordingly included." So it was. It was adopted to ensure that "the Convention would protect persecuted groups of people outside of the bounds of ethnic, religious, or political identity"36. The Swedish delegates, in their argument, adverted to well- known examples of social group persecution that had occurred in Eastern Europe following the rise of Communist regimes37. Cases in the courts of European nations, parties to the Convention, recognised as falling within the "social group" category quite large classes, many of whose members had resorted to countries of Western Europe in flight from countries of Eastern Europe. Thus, members of the "capitalist class", "independent businessmen" and their families were treated as valid "social groups" for the grant of refugee status to persons fleeing from Eastern Europe38. Such categories appear to be precisely what the originators of the "particular social group" category had in mind, although, in later years, the class has developed and been applied more broadly. Illustrations of the potential breadth of the class invoked in this case can be found in recent decisions of this Court, such as Applicant A v Minister for Immigration and Ethnic Affairs39; Chen Shi Hai v Minister for Immigration and Multicultural Affairs40; Minister for Immigration and Multicultural Affairs v Haji Ibrahim41; and Minister for Immigration and Multicultural Affairs v Khawar42. 36 Compton, "Asylum for Persecuted Social Groups: A Closed Door Left Slightly Ajar – Sanchez-Trujillo v INS, 801 F 2d 1571 (9th Cir 1986)", (1987) 62 Washington Law Review 913 at 926. 37 Grahl-Madsen, The Status of Refugees in International Law, vol 1 (1966) at 185- 186 cited in Compton, "Asylum for Persecuted Social Groups: A Closed Door Left Slightly Ajar – Sanchez-Trujillo v INS, 801 F 2d 1571 (9th Cir 1986)", (1987) 62 Washington Law Review 913 at 925-926. 38 Compton, "Asylum for Persecuted Social Groups: A Closed Door Left Slightly Ajar – Sanchez-Trujillo v INS, 801 F 2d 1571 (9th Cir 1986)", (1987) 62 Washington Law Review 913 at 927-928. 39 (1997) 190 CLR 225. 40 (2000) 201 CLR 293. 41 (2000) 204 CLR 1. 42 (2002) 76 ALJR 667; 187 ALR 574. Kirby The class has received a wide reading in other countries with legal systems similar to our own43 and in countries with quite different legal traditions44. Specifying with precision the "social group" that an applicant propounds as the one applicable to his or her case is important for at least two reasons. First, it ensures that the decision-maker addresses accurately the case that is put in respect of which the relevant jurisdiction and powers are invoked. But there is a second, practical reason for precision in this regard. It is one relevant to the present application. As the submissions for the Minister in this Court correctly pointed out (invoking the influential opinion of McHugh J in Applicant A45), an applicant faces a paradox in identifying the "particular social group" that he or she relies on in cases of this kind. Defining the group widely increases the ease of establishing membership of that group and, to that extent, of fulfilling a requirement of the Convention definition. However, the wider the definition of the "group" propounded, the more difficult it may be for the applicant to show that the suggested fear is one of "persecution" which is "well-founded" and exists "for reasons of" membership of that social group. If the category is defined too narrowly, the decision-maker might be justified in considering that the "particular social group" claimed is not a "social group" at all when that phrase is read as an element of an international treaty intended to have operation at the level of the obligations imposed upon nation states. A good illustration of the latter point may be seen in a recent English decision where it was submitted that a family could be a "particular social group" for the purposes of the Convention definition. The claim was made upon the basis that, as a male in a family which was involved in a blood feud in Albania, the applicant in that case had a well-founded fear of persecution if he returned to Albania. The English Court of Appeal accepted that particular social groups could be very large or very small, depending on the circumstances. It acknowledged that, in particular cases, the phrase could even comprise a clan or 43 eg R v Immigration Appeal Tribunal; Ex parte Shah [1999] 2 AC 629; Canada (Attorney General) v Ward [1993] 2 SCR 689; Sanchez-Trujillo v Immigration and Naturalization Service 801 F 2d 1571 (9th Cir 1986). 44 eg cases cited in Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225 at 260-263, 280-283, 299-308. See also cases collected in Compton, "Asylum for Persecuted Social Groups: A Closed Door Left Slightly Ajar – Sanchez-Trujillo v INS, 801 F 2d 1571 (9th Cir 1986)", (1987) 62 Washington Law Review 913 at 927-928. 45 (1997) 190 CLR 225 at 256-257. Kirby a family46. To decide whether, in the individual case, this was so, it would be necessary to consider whether the propounded "group of people" was recognised by society as a distinct "group" with particular characteristics47. In that case, the English Court did not accept that the applicant's family could be regarded "as a distinct group by Albanian society any more than, no doubt, most other families in the country"48. In a sense, the narrow category claimed for the applicant destroyed his argument that a "particular social group" within the meaning of the Convention existed. Such considerations may, on occasion, be determinative of an applicant's entitlement to protection under the Convention. So it was here. To the extent that the "social group" was defined broadly as "entrepreneurs" or "business people" in Russia, it became easier for the applicant to satisfy the element of membership in the definition. But it became commensurately more difficult for the applicant to satisfy the other elements of the Convention, most especially proof of a "well-founded fear"; proof that such "fear" was of being "persecuted"; and proof that the "fear" was "for reasons of … membership of a particular social group" as so defined. Before the Tribunal in the present case, the applicant failed on the last of these considerations (that is, the reason for the fear which he proved). It was therefore unnecessary, in the event, for the Tribunal to consider the other two remaining elements of the definition. But to the extent that the "social group" in question was defined over-broadly, the applicant faced severe difficulties in establishing his case. It became more likely that his "fear" would be ascribed to personal considerations relating to criminal activities directed against him and his family than to "persecution" within the Convention, which arose "for reasons of … membership of a particular social group". The mistake of the Tribunal in expressing the "social group" as it did was therefore critical for the foundation upon which it rejected the applicant's claim. It cannot be dismissed as an immaterial error. 46 Skenderaj v Secretary of State for the Home Department [2002] 4 All ER 555 at 47 R v Immigration Appeal Tribunal; Ex parte Shah [1999] 2 AC 629 at 657-658. 48 Skenderaj v Secretary of State for the Home Department [2002] 4 All ER 555 at Kirby The appeal: relief under the Act, s 476 Having concluded as I would that the Tribunal misdirected itself in such a fundamental way, the issue is whether the applicant was entitled to relief in the Federal Court in his application for review under s 476(1) of the Act, as that sub- section then stood. The primary process before this Court is an application for special leave to appeal, referred into a Full Court. There are two possible impediments, of the procedural kind, to the grant of special leave. The first is that, in his proceedings in the Federal Court, the applicant did not clearly propound the ground of appeal that he has now advanced before this Court. This failure does not amount to a constitutional barrier to this Court's permitting that ground to be raised for the first time in this Court. Although the proceedings would be by way of an "appeal", as contemplated by the Constitution49, and although such an "appeal" has been held to be a strict appeal50, this Court has made it clear that, subject to the exercise of discretion particular to the case, it can permit fresh grounds to be raised in an appeal without altering the character of the proceeding as an "appeal"51. The second relates to the function of the Tribunal and of the Federal Court. The Full Court correctly noted the degree of latitude that would be shown to a person such as the applicant representing himself without legal assistance. It recognised that he did not have to pick the correct Convention "label" to describe his plight52. The Tribunal acts in a generally inquisitorial way53. This does not mean that a party before it can simply present the facts and leave it to the Tribunal to search out, and find, any available basis which theoretically the Act provides for relief. This Court has rejected that approach to the Tribunal's duties54. The function of the Tribunal, as of the delegate, is to respond to the case 49 Constitution, s 73. 50 Eastman v The Queen (2000) 203 CLR 1 at 12-13 [16]-[17], 24 [68], 35 [111]- [112]; cf at 81-82 [248]-[249], 123 [370]. 51 Gipp v The Queen (1998) 194 CLR 106 at 116 [23], 151-153 [130]-[133]; cf at 52 [2000] FCA 1801 at [49]. 53 Muin v Refugee Review Tribunal (2002) 76 ALJR 966 at 1010 [263]; 190 ALR 601 54 Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Applicants S134/2002 (2003) 77 ALJR 437 at 442-443 [31]; 195 ALR 1 at 8. Kirby that the applicant advances. A fortiori this is the function of the Federal Court in determining any application to it for judicial review of a decision of the Tribunal. I do not consider that these procedural impediments bar any entitlement that the applicant has in this Court to a remedy under the Act. At least by the time the proceedings reached the Full Court, it is clear enough, from the reasons of that Court, that the applicant was making the point that he was not relying only on the risk of harm to himself as an "entrepreneur"55. The identification of the correct category applicable to the case is also fundamental to the proper performance by the Federal Court of its function of review, as of the Tribunal in its function to reconsider the decision of the Minister's delegate. However, in cases of this kind, the grounds upon which the Federal Court may provide judicial review are limited, relevantly by the terms of s 476(1) of the Act as it then stood. Those grounds are narrower than the grounds that exist for review at common law, under the provisions of the Judiciary Act 1903 (Cth)56 or the Administrative Decisions (Judicial Review) Act 1977 (Cth)57. No express provision appeared in s 476(1) of the Act to afford a ground for judicial review on the footing of a failure of a person, purporting to make a decision, to exercise that person's jurisdiction and power as the Act provided. In a case such as the present, to afford relief, it would be necessary to construe broadly the grounds that appeared in s 476(1) of the Act, perhaps beyond their apparent purpose. Counsel for the Minister conceded, fairly, that it was arguable that par (e) of s 476(1) was applicable to the case if this Court accepted the applicant's basic argument. At the time, that paragraph provided for review on the ground: "that the decision involved an error of law, being an error involving … an incorrect application of the law to the facts as found by the person who made the decision, whether or not the error appears on the record of the decision". In the event, it is unnecessary to explore the question of whether that ground, or any others in s 476(1), apply and survive the restrictions on those grounds stated in s 476(2) and (3) of the Act. This is because the commencement of the proceedings for constitutional relief affords this Court a more direct and 55 [2000] FCA 1801 at [49]. 56 s 39B. Kirby readily applicable foundation for the correction of the error that the applicant has demonstrated. Normally, where the Court has before it concurrently an appellate process and an invocation in the original jurisdiction of the constitutional writs and related relief, it will first decide whether the party succeeds in the appeal. If the party so succeeds, it will, depending on the circumstances, normally be possible to dispose of the constitutional application on the basis of the Court's discretion to refuse such relief because, in the circumstances, it is redundant58. In the present case, because of the repeal of s 476 of the Act in relation to future cases, and the limited operation of that section, there are strong reasons of convenience, another remedial process being available, for this Court to proceed directly to consider the claim for constitutional writs. The applicant has made out a clear case for relief of that character. The constitutional writs: a constructive failure to exercise jurisdiction The applicant submitted that he was entitled to the issue of constitutional writs under s 75(v) on the basis that the Tribunal had constructively failed to exercise its jurisdiction in the manner contemplated by the Act59. This principle of relief has been applied in recent times, including in immigration decisions, where it is shown that the decision-maker "failed to consider the substance of [the application] and could only have failed to do so because he misunderstood what is involved in the Convention definition of 'refugee'"60. This Court has repeatedly held that, for the issue of prohibition or mandamus under s 75(v) of the Constitution, it is necessary to demonstrate jurisdictional error on the part of the proposed subject of such relief61. Thus, it is essential to establish something more than an error of law within jurisdiction. Difficult as it may sometimes be to differentiate jurisdictional and non- 58 Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 59 R v Toohey; Ex parte Northern Land Council (1981) 151 CLR 170 at 267-268; cf Ex parte Hebburn Ltd; Re Kearsley Shire Council (1947) 47 SR (NSW) 416 at 422. 60 Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57 at 82 [81]. 61 Plaintiff S157/2002 v The Commonwealth (2003) 77 ALJR 454 at 471 [83]; 195 ALR 24 at 47. Kirby jurisdictional error with exactitude62, in a case where there has been a fundamental mistake at the threshold in expressing, and therefore considering, the legal claim propounded by an applicant, the error will be classified as an error of jurisdiction. It will be treated as a constructive failure of the decision-maker to exercise the jurisdiction and powers given to it. Obviously, it is not every mistake in understanding the facts, in applying the law or in reasoning to a conclusion that will amount to a constructive failure to exercise jurisdiction. But where, as here, the mistake is essentially definitional, and amounts to a basic misunderstanding of the case brought by an applicant, the resulting flaw is so serious as to undermine the lawfulness of the decision in question in a fundamental way. The applicant has established a constructive failure on the part of the Tribunal to exercise its jurisdiction and power in reviewing the decision of the delegate. Prima facie, he is therefore entitled to the issue of the constitutional writs that he seeks and the associated relief of certiorari to make such writs effective. No discretionary reasons to withhold relief Once this point is reached, it was conceded for the Minister, properly, that there was no discretionary ground for refusing constitutional relief to the applicant. It was also accepted that the applicant had acted correctly in first availing himself of his "appellate" entitlements in the Federal Court. The existence of orders in the Federal Court, undisturbed on appeal, does not bar the way to the provision of constitutional relief63. It was accepted that no other ground for refusing relief would arise from the short extension of time that the applicant requires for the issue of the writs as he has sought. I do not consider that the lack of focus, confusion, poor judgment about arguable issues and failure earlier to specify the basis on which he now succeeds constitute reasons, on discretionary grounds, for refusing the applicant constitutional relief64. Accordingly, a writ of prohibition in the first instance 62 Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at 227-228 [82]-[83]; Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at 136-137 [147]-[149]; Re McBain; Ex parte Australian Catholic Bishops Conference (2002) 76 ALJR 694 at 727 [175]; 188 ALR 1 at 46. 63 cf Abebe v The Commonwealth (1999) 197 CLR 510. 64 Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at 89 [5], 101-108 [43]-[55], 136-137 [145]-[150], 144 [172]; Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57 at 103 [150]-[152]; cf Re (Footnote continues on next page) Kirby should issue out of this Court addressed to the Minister (the first respondent) to prohibit him from acting on the purported decision of the Tribunal concerning the applicant and his family. A writ of certiorari should issue to quash the decision of the Tribunal. A writ of mandamus should issue to oblige the Tribunal to consider the applicant's application for review of the decision of the delegate and to determine that application according to law. This outcome does not ensure that the applicant will ultimately succeed in his claim for protection for himself and his family as refugees. There remain the questions of whether he can establish that the subjective fear that has been found to exist in his case is "well-founded", relates to "persecution" and exists "for reasons of" his membership of a particular social group. However, the starting point for the correct consideration of these inter-related questions is the correct identification of the "particular social group" that the applicant propounded. In this case, this was the group of businessmen or entrepreneurs in Vladivostok in the Russian Federation who grouped together in response to serious civic lawlessness and to the failure of the authorities to uphold the law and to address the grave violence to which the members of the group, including the applicant, were subjected. The decision on the merits will be one for the Tribunal. But if the correct "social group" is identified, it cannot be said that the return of the matter to the Tribunal is futile. Orders The Court should issue the writs of prohibition, certiorari and mandamus sought by the applicant. The Minister should pay the costs of the applicant's application for constitutional relief and certiorari in this Court. The applicant's application for special leave to appeal should be dismissed as unnecessary, with no order as to costs in this Court. McBain; Ex parte Australian Catholic Bishops Conference (2002) 76 ALJR 694 at 712-713 [95], 736 [229]; 188 ALR 1 at 25-26, 59. Hayne HAYNE J. I agree that, for the reasons given by Gummow and Callinan JJ, the Refugee Review Tribunal failed to exercise its jurisdiction, and did not give the applicant natural justice in conducting its review, because it did not consider the claim which the applicant was then making, and had earlier made, for protection. I also agree that certiorari, mandamus and prohibition should issue and that the first respondent should pay the applicant's costs of that application. It must be taken to follow from Abebe v The Commonwealth65 that there is no necessary disconformity between making those orders and not disturbing the orders of the Federal Court dismissing both his application for review by that Court of the Tribunal's decision and his appeal against that dismissal. Yet not to disturb those orders will leave, undisturbed, orders requiring the applicant to pay the respondent's costs of the proceedings in that Court, both at first instance and on appeal. In the circumstances of this matter, in which it is not clear whether the complaint made by the applicant was properly a ground for review under the then applicable, but now repealed, provisions of the Migration Act 1958 (Cth), but it is clear that it does ground the relief earlier mentioned, the application for special leave to appeal from the orders of the Full Court of the Federal Court should be dismissed. Neither the interests of justice in the particular case, nor more generally, warrant a grant of special leave. There should be no order as to the costs of that application for special leave. 65 (1999) 197 CLR 510.

HIGH COURT OF AUSTRALIA Matter No S35/2021 AHYA-UD-DIN ARSALAN APPELLANT AND Matter No S36/2021 AND AZAD CASSIM RESPONDENT APPELLANT RESPONDENT [2021] HCA 40 Date of Hearing: 8 September 2021 Date of Judgment: 8 December 2021 S35/2021 & S36/2021 ORDER Matter No S35/2021 Vary order 6 of the orders of the Court of Appeal of the Supreme Court of New South Wales made on 17 August 2020 by replacing "plaintiff's damages to be assessed in accordance with the reasons for judgment of the Court of Appeal" with "plaintiff's damages to be assessed in accordance with the reasons for judgment of the High Court of Australia and with the magistrate's reasons as to the credit hire costs". Appeal otherwise dismissed. The appellant to pay the costs of the respondent. Matter No S36/2021 Appeal dismissed with costs. On appeal from the Supreme Court of New South Wales Representation J T Gleeson SC with S Habib SC, K G Oliver and R J May for the appellant in each matter (instructed by MCK Lawyers) B W Walker SC with J L Gruzman, G E S Ng and W R Richey for the respondent in each matter (instructed by Spectre Law) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Damages – Torts – Negligence – Damage to chattels – Consequential loss – Physical inconvenience and loss of amenity of use – Where respondents owned prestige vehicles – Where prestige vehicles negligently damaged and unavailable during periods of repair – Where appellants liable for costs of repairing vehicles – Where respondents deprived of use of prestige vehicles including enjoyment of various functions – Where respondents incurred costs of hiring replacement vehicles of equivalent value to damaged vehicles – Whether costs of hiring replacement vehicles recoverable as damages – Whether respondents required to prove need for prestige replacement vehicles – Whether hiring replacement vehicles of equivalent value constitutes acts taken to mitigate loss – Whether hiring replacement vehicles of equivalent value unreasonable. Words and phrases – "act in mitigation", "compensatory principle", "concept of need", "consequential loss", "costs incurred in mitigation", "costs of hire", "equivalent replacement vehicle", "equivalent value", "heads of damage", "loss of amenity of use ", "loss of pleasure or enjoyment", "luxury vehicle", "mitigation of loss", "negligent damage to a chattel", "physical inconvenience", "prestige vehicle", "proof of loss", "reasonable hire costs", "replacement vehicle". KIEFEL CJ, GAGELER, KEANE, EDELMAN AND STEWARD JJ. Introduction Mr Rixon and Mr Cassim, the respondents, were involved in car accidents. The appellants, by their insurers, admitted liability for the accidents. The appellants are liable for the costs of repairing Mr Rixon's and Mr Cassim's damaged cars, respectively an Audi A3 sedan and a 2012 BMW 535i sedan. These appeals concern further liability of the appellants for Mr Rixon's and Mr Cassim's costs of hiring substitute cars while their damaged cars were being repaired. The question is one that has arisen many times in a variety of different circumstances in local courts across Australia. For which, if any, substitute vehicles can victims of negligence recover hire costs incurred during the period that their vehicles are being repaired? The simple answer is that a plaintiff will usually be able to recover from a negligent defendant the reasonable costs incurred in hiring, for the period of repair, a substitute vehicle that is broadly equivalent to their damaged vehicle. The basis for this answer is that it will not usually be difficult for a plaintiff to prove loss against a negligent defendant who causes the plaintiff's vehicle to be unavailable for a period of repair. That loss will commonly consist of (i) the physical inconvenience from the plaintiff's inability to use the damaged vehicle during the period of repair and (ii) loss of amenity or enjoyment of the use of the vehicle. Those heads of damage can usually be inferred from the plaintiff's ownership and past usage of the vehicle and, but for the damage, the plaintiff's ability to continue to use the vehicle during the period of repair. Recovery of damages under these heads of damage will usually be necessary to restore the plaintiff to the position they would have been in but for the defendant's actions that caused the accident. Once the plaintiff acts to mitigate that loss by hiring a substitute vehicle, the onus of proof will lie upon the defendant to show that the costs incurred in mitigation were unreasonable. Although it will not usually be unreasonable for a plaintiff to mitigate physical inconvenience and loss of amenity of use by the hire of a broadly equivalent substitute vehicle at a reasonable price, there may be further consequential issues at the margins: the extent to which the vehicles are broadly equivalent; the extent to which particular hire expenses, such as credit hire charges, can be said to have been incurred in mitigation of the losses; and the extent to which the quantum of hire costs is otherwise shown to be unreasonable. None of those issues arises in these appeals. The facts and background to these appeals Mr Rixon's case Mr Rixon owned an Audi A3 sedan which was damaged in a collision with a car driven negligently by Mr Arsalan. The repair of Mr Rixon's car took around two months. During that period of repair, Mr Rixon hired a replacement car of the same make and model. The hiring charge was $12,829.91. In the Local Court of New South Wales, the magistrate found that Mr Rixon needed a replacement car to travel to work, to drop off and collect a child at school, and for general errands. Mr Rixon also gave evidence that he needed a European car for reasons of safety but the magistrate found that Mr Rixon's safety concerns were a preference rather than a need. The magistrate also held that the hire costs incurred by Mr Rixon were based upon a credit hire rate which, it was said, did not represent the market rate of hire of the car. Mr Rixon was held to be entitled only to recover a hire charge of $4,226.25, which was the market rate of hiring a Toyota Corolla. An appeal by Mr Rixon to the Supreme Court of New South Wales was dismissed by Basten J. A majority of the Court of Appeal of the Supreme Court of New South Wales (White JA and Emmett A-JA; Meagher JA dissenting) allowed a further appeal by Mr Rixon, concluding that Mr Rixon was entitled to the reasonable hire charges that he incurred. The matter was remitted to the Local Court for assessment of the reasonable hire charge in accordance with the reasons of the Court of Appeal. Mr Cassim's case Mr Cassim owned a BMW 535i sedan which was damaged in an accident caused by the negligence of Mr Nguyen. Mr Cassim's case was treated as involving a non-income-earning car, although in addition to the use of his car for social and domestic purposes he used it for his home business, which included transporting toilet seat samples. The repair of Mr Cassim's car took 143 days. For 84 days of that period, Mr Cassim hired a Nissan Infiniti Q50 car for $17,158.02. The magistrate found that Mr Cassim needed his car for ordinary domestic purposes, including shopping and taking his children to sporting engagements, and that the Nissan car he had hired was of slightly lower value than his BMW. Mr Cassim also gave evidence that he "wanted a nice, luxury car". He accepted that any car with five seats would likely have been "feasible" but said that he "preferred to have a car similar to [his own]". The magistrate also found that a Toyota Corolla would have met Mr Cassim's needs for a total hire cost of $7,476, but rejected the contention that Mr Cassim's claim for recovery should be limited to the market rate of hire for a Toyota Corolla on the basis that it was not a car of "equivalent value" to Mr Cassim's BMW. The magistrate awarded Mr Cassim as damages the full amount of hire costs that he had incurred. An appeal by Mr Nguyen to the Supreme Court of New South Wales was allowed by Basten J. His Honour substituted an award of damages for the hire costs of $7,476, representing the hire costs of a Toyota Corolla for the relevant period. A further appeal by Mr Cassim to the Court of Appeal was allowed by a majority (White JA and Emmett A-JA; Meagher JA dissenting), who reinstated the award of hire costs determined by the magistrate. Ms Lee's and Mr Souaid's cases The Court of Appeal of the Supreme Court of New South Wales heard two further appeals together with those of Mr Rixon and Mr Cassim. Neither of those further appeals was the subject of an application for special leave to appeal to this Court. However, the facts of those appeals provide useful further illustrations of the application of the principles with which the two appeals before this Court are concerned. In Lee v Strelnicks, Ms Lee's Toyota Camry was damaged when Ms Strelnicks, driving negligently, collided with it. Ms Lee hired a replacement car for $2,340.09 for a period of 15 days while her car was being repaired. Her evidence was that she had used her car to visit family and friends and to take her children to and from school. An assessor appointed by the Local Court concluded that Ms Lee had not proved that she had a "need" for a replacement car. She was awarded only $30.73 in general damages, representing the interest on the capital value of her damaged car over the 15-day repair period. Ms Lee's application in the Supreme Court of New South Wales for judicial review of the decision of the assessor was dismissed. Her application for leave to appeal to the Court of Appeal was unanimously refused. In Souaid v Nahas, Mr Souaid's Lexus IS 250 sedan was damaged as a result of a collision with a car driven by Mr Nahas, for which Mr Nahas admitted liability. Mr Souaid's car was unavailable during the 40-day period of repairs. He hired a Lexus IS 250 sedan for part of the repair period and a BMW 318i sedan for the remainder of the repair period. The costs of hire were $11,128.41. In the Local Court, the magistrate held that Mr Souaid "required or needed" a replacement car for domestic and social purposes such as shopping, visiting friends, and family purposes such as picking up and dropping off his children at school. The magistrate noted that Mr Souaid had chosen to hire a car that was comparable to his damaged car and found that Mr Souaid did not need a luxury car for the replacement period and would have been happy with any replacement car. His damages for the costs of hire were limited to $2,805.60, being the "spot rate" costs of hiring a Toyota Camry. Mr Souaid's appeal to the Supreme Court was dismissed and his further application for leave to appeal to the Court of Appeal was refused by majority; Meagher JA would have granted leave to appeal but would have dismissed the appeal. The central issue in these appeals The central issue on the appeals, as ventilated by counsel in submissions, focused upon the decisions of Basten J at first instance in the Supreme Court and the decision of the Court of Appeal. It is unnecessary to consider the slight variations in approach taken in each of these careful and closely reasoned judgments. The essential difference between Basten J and Meagher JA, on the one hand, and White JA and Emmett A-JA, on the other, can be stated simply. On the one hand, Basten J and Meagher JA focused only upon the inconvenience to Mr Rixon and Mr Cassim arising from the loss of use of their cars, which gave rise to their "need" for a substitute vehicle. With a focus only upon inconvenience giving rise to "need" as the relevant head of damage suffered by Mr Rixon and Mr Cassim, their Honours considered that it was unreasonable for either of the respondents to claim as damages those hire costs that went beyond that which was reasonable to alleviate that inconvenience1. On the other hand, White JA and Emmett A-JA focused on the adverse consequences to Mr Rixon and Mr Cassim beyond that of inconvenience or "need". White JA held that Mr Rixon and Mr Cassim had lost the intangible benefits of their prestige cars, and he referred to Mr Cassim's preference for a car that had "higher levels of safety and luxury than the Toyota vehicle"2. Emmett A-JA held that the loss suffered by Mr Rixon and Mr Cassim was not simply the deprivation of the use of a car as a means of transportation but was also 1 Nguyen v Cassim (2019) 89 MVR 347 at 351-352 [15]-[16], 361-362 [53] (Basten J); Rixon v Arsalan (2019) 89 MVR 370 at 372 [7], 373 [13] (Basten J); Lee v Strelnicks (2020) 92 MVR 366 at 372 [17]-[18], 373 [23], 374 [25] (Meagher JA). Lee v Strelnicks (2020) 92 MVR 366 at 381 [60]. See also at 383-384 [69(5)-(7)]. the deprivation of a car with the specifications and performance of their damaged cars3. The reasoning of White JA and Emmett A-JA thus included in the compensable loss suffered by Mr Rixon and Mr Cassim intangible elements of the loss of pleasure or enjoyment in addition to the physical inconvenience that they suffered from the loss of use of those cars. Hence, their Honours concluded that it was not unreasonable for Mr Rixon and Mr Cassim to hire equivalent cars to mitigate their loss. The essence of this division of opinion reflects the lack of any clear recognition in Australian law of loss of amenity, in the sense of loss of pleasure or enjoyment, in the use of a chattel, as a recoverable head of damage for a tort that involves negligent damage to a chattel. Further uncertainty has been created by authorities that have required that, before hire costs can be recovered as damages, the plaintiff must have a "need" for the substitute vehicle. For the reasons below, the head of damage of loss of amenity of use of a chattel should be recognised and the loose concept of "need" should be eschewed. The conclusion of the majority of the Court of Appeal should be upheld on the basis that Mr Rixon and Mr Cassim suffered heads of damage of physical inconvenience and loss of amenity and it was not unreasonable for them to take steps to mitigate both aspects of their loss by the hire, at a reasonable rate, of an equivalent car for a reasonable period of repair. "Loss of use" is not a head of damage Where a plaintiff's chattel is damaged as a result of the negligence of a defendant, the plaintiff will generally be entitled to damages for the costs of repair and for consequential loss4. Some of the authorities in this field speak of "loss of use" as if that were, by itself, a head of damage. But, putting aside the different considerations raised by cases where a defendant has obtained the benefit of the use of the plaintiff's chattel5, the mere reference to the loss of use of a vehicle, or the loss of the availability of a vehicle for use, is inadequate because it does not identify the manner or extent of any loss to a plaintiff. An assessment of Lee v Strelnicks (2020) 92 MVR 366 at 395-396 [124], 396 [129]. Talacko v Talacko (2021) 95 ALJR 417 at 427 [45]; 389 ALR 178 at 189; Sainsbury's Supermarkets Ltd v Mastercard Inc [2020] 4 All ER 807 at 861 [200]. See also Dimond v Lovell [2002] 1 AC 384 at 406. See Lewis v Australian Capital Territory (2020) 94 ALJR 740 at 760-761 [83]-[84], 773-774 [147]-[148]; 381 ALR 375 at 394-395, 411-412. consequential loss always requires the identification of the manner in which the loss of use of a chattel has adversely affected the plaintiff. A decision relied upon by the parties to these appeals was The "Mediana"6. In that case, damages were claimed for "loss of use" of the plaintiffs' damaged lightship during a period of repair in which the plaintiffs deployed a spare lightship. Although Lord Halsbury referred to the "loss of the use" of the vessel7, he also relied upon the principle that he had articulated in an earlier decision, in which he had focused upon the detriment to the plaintiffs arising from the loss of use, being the delay or impairment of the progress of the works8. In The "Mediana", the loss was the inconvenience of no longer having a spare lightship available during the period of repair, the "margin of safety"9 which should be valued at the "expense of having [the spare] ready"10. The loss or detriment to owners from being without a chattel, for which damages were awarded in The "Mediana", can obviously also arise where no substitute or spare is available. As Meagher JA said in the Court of Appeal in these proceedings11, even where no substitute chattel is available or is hired, it is unquestionable that damages can still be awarded. But, in those circumstances, the damages are not quantified by reference to the costs of hiring an alternative vehicle or the costs of maintaining a spare, since they were not incurred and do not reflect 6 Owners of Steamship "Mediana" v Owners, Master and Crew of Lightship "Comet" (The "Mediana") [1900] AC 113. [1900] AC 113 at 118. [1900] AC 113 at 115, referring to Owners of No 7 Steam Sand Pump Dredger v Owners of SS "Greta Holme" (The "Greta Holme") [1897] AC 596. See especially [1897] AC 596 at 602. See Admiralty Commissioners v SS Susquehanna [1926] AC 655 at 665. [1900] AC 113 at 122. See also Admiralty Commissioners v SS Susquehanna [1926] AC 655 at 662, 665-666, 668-669; Beechwood Birmingham Ltd v Hoyer Group UK Ltd [2011] QB 357 at 369-371 [33]-[40]; West Midlands Travel Ltd v Aviva Insurance UK Ltd [2014] RTR 10 at 132-133 [23]. 11 Lee v Strelnicks (2020) 92 MVR 366 at 369 [3]. the loss or detriment which the owner sustained12. In older cases involving the loss of use of a ship where a substitute was not available or hired and no other loss was established, one approach was to award interest on the depreciated capital value of the ship for the period of repair because the detriment from the loss of use was the damaged ship's "capital value [being] infructuous for the time being, even though by special effort more benefit was got out of other ships, in which other capital was invested, than would otherwise have been the case"13. That older approach has been refined in some modern cases where the value to the owner is not confined to the "money tied up in the chattel" as interest on the capital value but can include expenses thrown away and an allowance for depreciation14. The older approach was followed by the assessor in Lee v Strelnicks, the facts of which are set out above. The assessor made a total award of $30.73 to Ms Lee for the 15 days that she had no use of her car. Ms Lee's damages were limited in this way because she was held not to have suffered any other loss, including a finding that she suffered no general physical inconvenience of being without a car. Physical inconvenience and loss of amenity of use of a chattel In the extremely common circumstances that gave rise to these appeals, involving negligent damage to a plaintiff's vehicle which is used for convenience and pleasure, it has been suggested that underlying the extensive case law recognising compensation for the consequences of the loss of use of a vehicle is that the plaintiff has been "deprived of the convenience or pleasure" that they 12 See The Hebridean Coast [1961] AC 545 at 578. 13 Admiralty Commissioners v SS Susquehanna [1926] AC 655 at 664. See also Mersey Docks and Harbour Board v Owners of the SS Marpessa [1907] AC 241; The Hebridean Coast [1961] AC 545 at 578. 14 West Midlands Travel Ltd v Aviva Insurance UK Ltd [2014] RTR 10 at 132-133 [23]. See also Consort Express Lines Ltd v J-Mac Pty Ltd [No 2] (2006) 232 ALR 341 at 356 [87]; Vautin v By Winddown Inc (formerly Bertram Yachts) [No 4] (2018) 362 ALR 702 at 773 [314]. would derive from that use15. That simple proposition was, in part, disputed on these appeals. But, for the reasons given below, it should be accepted. It was rightly common ground on these appeals that the consequential loss suffered by Mr Rixon and Mr Cassim included the "inconvenience" of not having access to their cars during the period of repair. A large body of case law supports the recognition of this type of loss, although it is commonly described as "physical inconvenience" to contrast it with "mere inconvenience, such as annoyance and loss of temper, or vexation, or for being disappointed in a particular thing which you have set your mind upon"16. For property torts, this "mere inconvenience" is generally treated as the basis for damages under the different head of loss of amenity of use of property although the boundary between these heads of "physical inconvenience" and loss of amenity of use is neither clear nor precise because "all inconvenience has to include some mental element"17. The appellants also accepted that loss of amenity might be available for some torts but they denied that the law recognises loss of amenity as recoverable loss for torts generally, even where that loss is within the scope of the duty and is not too remote. The appellants submitted that loss of amenity of use was not a recoverable type of loss where the plaintiff's chattel was damaged as a result of the defendant's negligence. The appellants' submission should not be accepted. There is no justification to restrict the recoverable heads of damage for consequential loss caused by the negligent infringement of a person's property right so that the lost amenity of use is excluded. In its concern with the consequences of a tortious act, the compensatory principle aims to provide the injured party with "compensation in a sum which, so far as money can do, will put that party in the same position as he 15 Tettenborn, The Law of Damages, 2nd ed (2010) at 351 [14.86]. 16 Hobbs v London and South Western Railway Co (1875) LR 10 QB 111 at 122. See Athens-MacDonald Travel Service Pty Ltd v Kazis [1970] SASR 264 at 274; Watts v Morrow [1991] 1 WLR 1421 at 1440, 1445; [1991] 4 All ER 937 at 955, 959-960; Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 361-363, 381, 383, 398-399; Moore v Scenic Tours Pty Ltd (2020) 268 CLR 326 at 350 [68]-[69]. 17 Athens-MacDonald Travel Service Pty Ltd v Kazis [1970] SASR 264 at 274. or she would have been in if ... the tort had not been committed"18. This general principle has the basic goal to undo, by monetary equivalent, the consequences of the wrong experienced by the plaintiff so far as is reasonable19. The lost amenity of use of a negligently damaged chattel can be experienced as a consequence of a wrong. The course of precedent and the close relationship between the heads of damage of physical inconvenience and loss of amenity also support the principled basis for recognition of loss of amenity of use as a head of damage for negligent damage to a property right. As a matter of precedent, loss of amenity of use of property has been recognised for negligent damage to land, where damages for physical inconvenience have been coupled with damages for the loss of amenity where the wrong caused the plaintiffs' lives to be "disrupted and their enjoyment of their home significantly reduced"20. The same principle has been recognised in damages for conversion involving loss of enjoyment of a hobby21. Further, in a decision subsequently followed in Australia22, the House of Lords recognised that, for the tort of nuisance, the loss of the amenity value of use of land to a plaintiff was recoverable separately from the diminution in market value of the land23. Although no clear authority has recognised loss of amenity of use consequent upon negligent damage to the plaintiff's chattel as a head of damage in 18 Haines v Bendall (1991) 172 CLR 60 at 63. See also Butler v Egg and Egg Pulp Marketing Board (1966) 114 CLR 185 at 191, citing Livingstone v Rawyards Coal Co (1880) 5 App Cas 25 at 39. 19 Descheemaeker, "The Standardisation of Tort Damages" (2021) 84 Modern Law Review 2 at 2. 20 Muirhead v Kingborough Council [No 2] [2000] TASSC 127 at [14]-[15]. Cf Perry v Sidney Phillips & Son [1982] 1 WLR 1297; [1982] 3 All ER 705; Campbelltown City Council v Mackay (1989) 15 NSWLR 501. 21 Graham v Voigt (1989) 89 ACTR 11 at 20-21. 22 Roberts v Rodier (2006) 12 BPR 23,453 at 23,473-23,474 [119]-[123]; Quick v Alpine Nurseries Sales Pty Ltd [2010] NSWSC 1248 at [336]-[338]. 23 Hunter v Canary Wharf Ltd [1997] AC 655 at 694, 696, 698, 706, 724. See also Lawrence v Fen Tigers Ltd [2014] AC 822 at 862 [157]. addition to physical inconvenience, such recognition is consistent with the broad recognition of loss of amenity of use in other instances of damage to property. Indeed, the lack of any clear boundary between the heads of damage for physical inconvenience and loss of amenity means that it is often convenient to quantify physical inconvenience and the loss of amenity of use of property together as part of a single award of general damages24. The irrelevance to these heads of damage of any concept of "need" The magistrate in Mr Rixon's case focused upon whether the plaintiff had a "need" for a replacement car. The magistrate did not identify Mr Rixon's heads of damage as physical inconvenience and loss of amenity of use of the car. Instead, the magistrate's focus on Mr Rixon's "need" naturally directed attention away from loss of amenity of use as a head of damage. The magistrate's focus upon "need" derived from, and followed, the decision of the Court of Appeal of the Supreme Court of New South Wales in Anthanasopoulos v Moseley25, in which, as the magistrate observed, Beazley JA had drawn an analogy with damages that make "provision for the injured plaintiff's needs" in the context where those needs have been met by the provision of gratuitous services of a third party. The discussion of this point by Beazley JA was reinforced by the reasoning of Ipp A-JA (with whom Handley JA agreed). Ipp A-JA in Anthanasopoulos26 held that, like the decisions concerning damages for care and services provided to an injured person gratuitously, the "true basis of claims for damages for injury to a non-income producing chattel is also based on need". The primary judge in these appeals, Basten J, also followed that approach from the Court of Appeal in Anthanasopoulos. But the principles of damages concerned with the "need" for services in circumstances in which services have 24 Muirhead v Kingborough Council [No 2] [2000] TASSC 127 at [15]; Willshee v Westcourt Ltd [2009] WASCA 87 at [79], citing Nouvelle Homes Pty Ltd v Smargiassi [2008] WASC 127 at [76]-[104]. See also Hunter v Canary Wharf Ltd [1997] AC 655 at 694: "discomfort or inconvenience"; Bone v Seale [1975] 1 WLR 797 at 804; [1975] 1 All ER 787 at 794: "inconvenience, discomfort and annoyance". (2001) 52 NSWLR 262 at 273-274 [57]-[58]. (2001) 52 NSWLR 262 at 276 [80]. been provided gratuitously by another cannot be transplanted to replace an analysis of the real loss that has been suffered as a result of damage to a chattel, especially in circumstances in which a gratuitous replacement is not available. Indeed, in a case in which a plaintiff obtained an equivalent replacement vehicle from a hire company without any costs, it was held that the plaintiff was not entitled to damages for the notional hire costs27. The scope of the concept of "need" is also highly uncertain. Does a plaintiff have a "need" to drive to work if leaving earlier to walk to work could make them healthier and happier? Or, to use the example given by senior counsel for the respondents, does a "need" extend to having a radio in the hire car? Or power steering, ABS brakes, and air-conditioning? Would a tiny car with three wheels suffice for the convenience of transport for a week? The import of this loose concept of "need" into questions of recovery of the hire costs incurred is a distraction from the proper focus upon the heads of damage identified by the plaintiff – such as physical inconvenience and loss of amenity of use – and the onus upon the defendant to establish the unreasonableness of the plaintiff's steps to attempt to mitigate that damage by the hire of a substitute vehicle. Mitigation of loss Where a plaintiff acts in an attempt to reduce a loss, the onus shifts to the defendant to show that the acts actually taken by the plaintiff were unreasonable acts of mitigation28. Unless the plaintiff's actions are shown to be unreasonable, costs that are incurred in an attempt to mitigate loss caused by wrongdoing become, themselves, a head of damage that can be recovered29. Even if the costs incurred by the plaintiff are greater than the loss that was attempted to be mitigated, 27 Dimond v Lovell [2002] 1 AC 384. 28 Watts v Rake (1960) 108 CLR 158 at 159, 163; TC Industrial Plant Pty Ltd v Robert's Queensland Pty Ltd (1963) 180 CLR 130 at 138. 29 Talacko v Talacko (2021) 95 ALJR 417 at 430 [60]; 389 ALR 178 at 193, citing Gray v Sirtex Medical Ltd (2011) 193 FCR 1 at 11 [24], [26], in turn quoting Berry v British Transport Commission [1962] 1 QB 306 at 321. those costs will be recoverable other than to the extent that they are shown to be unreasonable30. These principles were applied in Lagden v O'Connor31 in the context of a claim for damages for the consequences of the loss of use of a car. Mr Lagden's ten-year-old Ford Granada car was damaged as a result of Ms O'Connor's negligence. While his car was being repaired, Mr Lagden hired a Ford Mondeo car with the assistance of a credit hire company. The decision of the House of Lords concerned a question which these appeals need not resolve, namely the recoverability by an impecunious plaintiff of the costs of credit hire which exceed the spot rate for hire. Relevantly, however, Lord Hope of Craighead explained that a plaintiff's act of hiring a substitute car was an act in mitigation of loss. Echoing the approach earlier taken in Dimond v Lovell32 by Lord Hoffmann (with whom Lord Browne-Wilkinson agreed) and Lord Hobhouse of Woodborough, Lord Hope said that although there was no evidence that Mr Lagden would have suffered financial loss as a result of the inability to use his car during the period of repair, "inconvenience is another form of loss for which, in principle, damages are recoverable"33. His Lordship continued34: "[I]t was open to [the plaintiff], as it is to any other motorist, to avoid or mitigate that loss by hiring another vehicle while his own car was 30 Wilson v United Counties Bank Ltd [1920] AC 102 at 125, explaining Leyland Shipping Co v Norwich Union Fire Insurance Society [1918] AC 350 especially at 366. See also Esso Petroleum Co Ltd v Mardon [1976] QB 801 at 821; Ferneyhough v Westpac Banking Corporation (unreported, Federal Court of Australia, 18 November 1991) at 63-64; Thai Airways International Public Co Ltd v KI Holdings Co Ltd [2016] 1 All ER (Comm) 675 at 684-685 [32]. See further Burrows, Remedies for Torts, Breach of Contract, and Equitable Wrongs, 4th ed (2019) at [2002] 1 AC 384 at 401-402, 406. See also Dimond v Lovell [2000] QB 216 at 238-239 [93]-[95], 239 [99]; Giles v Thompson [1994] 1 AC 142 at 167. [2004] 1 AC 1067 at 1077 [27]. [2004] 1 AC 1067 at 1077-1078 [27]. unavailable to him. The expense of doing so will then become the measure of the loss which he has sustained under this head of his claim." Proof of loss and proof of unreasonable steps in mitigation Legal principles for proof of loss and mitigation Although a plaintiff must prove their loss, it will not usually be difficult for a plaintiff to establish heads of damage of physical inconvenience and loss of amenity of use consequential upon their lost ability to use their vehicle. There will, however, be exceptional cases where such loss to the plaintiff will be non-existent or so slight that the hire of a replacement vehicle will not be accepted to be a step in mitigation. Such exceptional cases might include where the plaintiff was hospitalised or abroad during the relevant period of repair35, or where the damaged vehicle could have been replaced from idle stock within the plaintiff's fleet of vehicles36. Apart from such cases, it will usually be sufficient for a plaintiff to identify a past suite of purposes for which the damaged vehicle was used in order to justify an inference that the plaintiff would have put the vehicle to the same uses during the period of repair and would be otherwise inconvenienced. As Lord Mustill recognised in Giles v Thompson37, it will not be hard to infer that a plaintiff who incurs the considerable expense of running a private vehicle does so for reasons of convenience. Similarly, it will usually be sufficient to infer that a plaintiff derives amenity from the various functions used in their vehicle, particularly an expensive, prestige vehicle in circumstances in which the plaintiff incurred significant capital or ongoing expenditure on that prestige vehicle. Once a plaintiff has proved heads of damage of physical inconvenience and loss of amenity of use, it will usually be difficult for a defendant to prove that the plaintiff acted unreasonably by seeking to hire a replacement vehicle. In some cases, a defendant might instead seek to establish that the amount of the hire costs 35 Giles v Thompson [1994] 1 AC 142 at 167; Lagden v O'Connor [2004] 1 AC 1067 36 Beechwood Birmingham Ltd v Hoyer Group UK Ltd [2011] QB 357 at 368-369 [28]-[29]; Singh v Yaqubi [2013] RTR 15 at 232 [33], 233 [39]. [1994] 1 AC 142 at 167. incurred was unreasonable for various reasons: the replacement vehicle hired, in light of the range of vehicles that might fairly be regarded as equivalent to the damaged vehicle; the period of hire, having regard to the reasonable period of time for repairs; or the extent of the costs included in the hire charge. But none of those matters of quantum arises on these appeals. The usual ease with which a plaintiff may establish heads of damage of physical inconvenience and loss of amenity of use explains why in Dimond v Lovell38 and in Lagden v O'Connor39 their Lordships assumed that it would generally be reasonable for a plaintiff to hire an equivalent vehicle, subject to any dispute about the unreasonableness of the quantum of the hire costs. For instance, in Lagden v O'Connor, Lord Hope assumed that a plaintiff would generally be able to recover as damages the costs of hire of an equivalent vehicle, but if "a larger or more powerful car was hired although vehicles equivalent to the damaged car were reasonably available at less cost – the amount expended on the hire must be reduced to the amount that would have been needed to hire the equivalent"40. The appellants on these appeals submitted that a different conclusion was supported by the earlier decision of the Court of Appeal of England and Wales in Watson Norie Ltd v Shaw and Nelson41. Properly understood, however, that decision is consistent with the general position that it is reasonable for a plaintiff to hire an equivalent vehicle. In that case, the plaintiff company had hired a replacement prestige car for the managing director, initially a Rover 100 and then a Jaguar 3.8. The car was hired at a cost of £400 to replace the plaintiff's Jensen car which had been damaged by the defendants' negligence. The Court of Appeal held that the plaintiff could recover only £185, which was the hire costs of a Ford Zephyr. The conclusion of the Court of Appeal was not due to the unreasonableness of the plaintiff in hiring the Jaguar or the Rover. To the contrary, Sellers LJ held that it would not have been unreasonable for the plaintiff to have hired those cars [2002] 1 AC 384 at 401-402, 406. See also Dimond v Lovell [2000] QB 216 at 238-239 [93]-[95], 239 [99]; Giles v Thompson [1994] 1 AC 142 at 167. [2004] 1 AC 1067 at 1078 [27]. [1967] 1 Lloyd's Rep 515. at a reasonable price42. Instead, the finding by the County Court judge, which the Court of Appeal accepted to have been open, was that the defendants had established that the plaintiff had acted unreasonably in circumstances including: (i) the plaintiff's hire from a company that was not in the habit of hiring cars; (ii) the plaintiff's failure to make any real enquiry about price; and (iii) the plaintiff's failure to avail itself of a 20 per cent hire discount by paying cash43. Mr Rixon and Mr Cassim As senior counsel for the appellants correctly submitted in oral argument, the proper description of the loss in terms of physical inconvenience that was suffered by each of Mr Rixon and Mr Cassim consequent upon the damage to their cars was "the loss of the availability of the vehicle for the suite of purposes or uses for which it was likely to be put during the repair period". Those purposes included domestic, household, and family purposes. But that did not exhaust the respondents' consequential loss. Each of Mr Rixon and Mr Cassim also suffered a loss of amenity of use of their cars from their deprivation of the use of their prestige cars, including their enjoyment of the safety features, pleasurable functions, and other specifications of those cars. There was no dispute that each of the cars hired by Mr Rixon and Mr Cassim was equivalent to the car that each had owned. Subject to the conclusion of the magistrate about the credit hire charges in Mr Rixon's case, a conclusion which was not the subject of any appeal, the appellants did not establish that either Mr Rixon or Mr Cassim acted unreasonably in incurring any of the hire charges for the replacement cars during the period of repair. Ms Lee and Mr Souaid Although there is no appeal before this Court in the matters of Lee v Strelnicks and Souaid v Nahas, which were heard together with the present appeals in the Court of Appeal, it is necessary to explain why, in light of the principles set out in these reasons, each of those cases should have been decided differently. Indeed, as senior counsel for the appellants properly accepted in oral argument on these appeals, it is difficult to understand why Mr Souaid should not succeed if [1967] 1 Lloyd's Rep 515 at 516. [1967] 1 Lloyd's Rep 515 at 516-517. Mr Rixon and Mr Cassim are entitled to the reasonable hire costs of a car equivalent to that which was damaged. As to Ms Lee's case, an inference that Ms Lee suffered the head of damage of physical inconvenience should have been readily established by her general evidence that she used her damaged car to visit family and friends and to take her children to and from school. More detailed particulars should not have been required to establish her head of damage of physical inconvenience. And there was no basis upon which the defendant could have established that it was unreasonable for Ms Lee to mitigate that loss by the hire of an equivalent replacement car for use for her suite of purposes. As to Mr Souaid, the decision of the magistrate in Souaid v Nahas, from which the appeals were dismissed, involved reasoning that Mr Souaid did not require or need a luxury car for his domestic, social, or family purposes. The magistrate accepted that Mr Souaid had told an officer of his insurer, in response to being asked whether he would have been "okay with just a Holden sedan or a Camry", that he would have been okay with "any car, just as long as I have a car there for my wife, for the kids and stuff", and that he "wasn't fussed at all"44. But none of this evidence was sufficient for the defendant to establish that it was unreasonable, in the objective sense required for expenses incurred in mitigation to be refused as damages, for Mr Souaid to prefer, for reasons of amenity that would otherwise be lost, a Lexus or BMW sedan that was equivalent to his damaged car. Conclusion In the Nguyen v Cassim appeal, the appeal should be dismissed with costs. In the Arsalan v Rixon appeal, order 6 of the orders of the Court of Appeal made on 17 August 2020 in relation to remittal of the matter to the Local Court should be varied to replace the words "plaintiff's damages to be assessed in accordance with the reasons for judgment of the Court of Appeal" with "plaintiff's damages to be assessed in accordance with the reasons for judgment of the High Court of Australia and with the magistrate's reasons as to the credit hire costs", and otherwise the appeal should be dismissed with costs. 44 Lee v Strelnicks (2020) 92 MVR 366 at 391 [106], 398 [137].

HIGH COURT OF AUSTRALIA ROADS AND TRAFFIC AUTHORITY OF NSW APPELLANT AND PHILIP JAMES DEDERER & ANOR RESPONDENTS Roads and Traffic Authority of NSW v Dederer [2007] HCA 42 30 August 2007 ORDER Appeal allowed. The first respondent to pay the appellant's costs. Set aside orders 4, 5, 6 and 7 of the Court of Appeal of the Supreme Court of New South Wales made on 5 October 2006 and in their place order that: the appeal to that Court by the Roads and Traffic Authority of NSW ("the RTA") be allowed; set aside so much of the orders made by Dunford J in the Supreme Court of New South Wales on 18 March 2005 as disposed of the action against the RTA and in their place order that there be judgment for the RTA against the plaintiff; and (c) Mr Dederer to pay the costs of the RTA at trial and in the Court of Appeal. Application for special leave to cross-appeal dismissed with costs. On appeal from the Supreme Court of New South Wales Representation B W Walker SC with A C Casselden for the appellant (instructed by Henry D F Jackson QC with D T Kennedy SC and G R Graham for the first respondent (instructed by Emery Partners) Submitting appearance for the second respondent Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Roads and Traffic Authority of NSW v Dederer Negligence – Duty of care – Scope of duty – Roads authority – The first respondent was injured after jumping into shallow water from a bridge erected by the appellant's predecessor – Whether the scope of the appellant's duty of care encompassed the circumstances in which the first respondent was injured – Distinction between the exercise of reasonable care and the prevention of harm. Negligence – Breach – Standard of care – Prospective assessment of breach – Characterisation of relevant risk – Assessment of probability of risk – Assessment of gravity of risk – Assessment of practicability of precautions – Relevance of voluntary conduct and obviousness of risk – Relevance of "allurement" – Whether Wyong Shire Council v Shirt (1980) 146 CLR 40 was correctly applied. Negligence – Contributory negligence – Reduction of damages by Court of Appeal – Whether Court of Appeal erred in disturbing trial judge's assessment. Courts – Appeals – Limitations on appellate review of findings of fact – Meaning of "concurrent findings of fact". Costs – Sanderson orders – Circumstances in which it is appropriate to make a Words and phrases – "allurement", "concurrent findings of fact", "reasonable care", "roads authority", "scope of duty". Civil Liability Act 2002 (NSW), s 5L. Roads Act 1993 (NSW), s 7(4). Transport Administration Act 1988 (NSW), Pt 6, Sched 7 Div 5. GLEESON CJ. The principal question to be decided is whether this Court should overturn findings on negligence and causation made in the Supreme Court of New South Wales by the primary judge (Dunford J)1 and the Court of Appeal (Ipp and Tobias JJA; Handley JA dissenting)2 in an action for damages for personal injuries brought by the first respondent. The facts and issues are set out in the reasons of Kirby J. The appellant is a public authority responsible for the construction and management of the Forster-Tuncurry bridge. The first respondent, then aged 14, dived from the bridge, with catastrophic consequences. It is not in dispute that the appellant owed the first respondent a duty to take reasonable care for his safety. That the first respondent's own serious carelessness contributed to his injuries is plain; a large deduction from the damages he was awarded was made on account of his contributory negligence. Nevertheless, the appellant owed him a duty of care, and there was an issue whether, by its acts or omissions, it failed to take reasonable care for the safety of the first respondent. There was also an issue whether such failure was a cause of his injuries. Those issues, essentially factual, were resolved by the primary judge, and the Court of Appeal, adversely to the appellant. The bridge was not designed to be a platform from which people might, for their own amusement, jump or dive into the water below. That was not its intended use. Yet it was a use that was regularly made of it, even though diving was prohibited. A claim, by a young person who disregarded the prohibition, that the bridge authority failed to take reasonable care for his safety is not immediately attractive, and would not be accepted lightly. Its wider implications are obvious. Even so, the first respondent succeeded in his claim for damages (subject to a substantial reduction for contributory negligence) and his success was affirmed on appeal. It is to be noted that the evidence in the case deals with the bridge and the railings as they were at the time of the injuries to the first respondent. They were still the same at the time of the trial. The bridge, in its present state, is there for anyone to see. At the time of the injury to the first respondent, and at the time of the trial, the railings on the northern side of the bridge consisted of three flat horizontal members. It was not difficult for a young person to mount the top rail and thereby use the bridge as a platform for jumping or diving. That is what the first respondent, and, according to the evidence, many others before him, did. The primary judge, and the majority in the Court of Appeal, criticised the appellant for not having installed a barrier (such as pool-type fencing) that would have been much more difficult to mount and use for diving. The fact that, in 1998, the design of the railings made it comparatively easy to climb on to or over 1 Dederer v Roads and Traffic Authority (2005) Aust Torts Reports ¶81-792. 2 Great Lakes Shire Council v Dederer (2006) Aust Torts Reports ¶81-860. the railings was an important part of the case against the appellant. There is no foundation in the evidence, or in common experience, for inferring that the only way to deter people from climbing and jumping would have been to adopt extreme and fanciful measures such as erecting a very high fence topped with shards of glass or razor wire. If the appellant had attempted, in argument, to persuade the Court to that view then it might have been challenged by questions prompted by the design of the present barrier. The conclusion of the trial judge and the Court of Appeal that the appellant was negligent turned upon findings of primary fact, some of which were disputed and some of which were undisputed, inferences from those primary facts, and judgment as to what reasonableness required in the circumstances. Similarly, the issue of causation turned upon primary facts, inferences, and judgment on questions of probability. In an appeal of this nature, the function of this Court, as a second appellate court and a court of final resort, is not simply to give a well-resourced litigant a third opportunity to persuade a tribunal to take a view of the facts favourable to that litigant. "It is well settled that a second appellate court, such as this Court is in the present case, should not, in the absence of special reasons such as plain injustice or clear error, disturb such concurrent findings"3. This is a principle of long standing, and its importance has not been diminished, but rather has been increased, in the circumstances of modern litigation. In Graham Barclay Oysters Pty Ltd v Ryan4, I referred to what was said about the principle by the House of Lords during the nineteenth century in Owners of the "P Caland" and Freight v Glamorgan Steamship Co Ltd5. That case concerned a collision between two ships. The question which vessel was to blame turned upon evidence about lighting. The Lord Chancellor, Lord Herschell, said that, weighing the probabilities, he would have been disposed to accept a particular view of the evidence, but he declined to give effect to that disposition because of what the House of Lords had said previously as to "the importance of not disturbing a mere finding of fact in which both the Courts below have concurred."6 Such a step should be taken, he said, only "when it can be clearly demonstrated that the finding was erroneous."7 Lord Watson said that 3 Louth v Diprose (1992) 175 CLR 621 at 634 per Deane J. (2002) 211 CLR 540 at 568-569 [53]-[54]. [1893] AC 207 at 215. [1893] AC 207 at 215. it was "a salutary principle that judges sitting in a Court of last resort ought not to disturb concurrent findings of fact by the Courts below, unless they can arrive at ... a tolerably clear conviction that [those] findings are erroneous."8 In Major v Bretherton9, a fraud case, Isaacs J discussed a "highly important question" which he said was raised "for the first time definitely in this Court". He referred to the "rule" as to the approach of a second appellate court to concurrent findings of fact. A judge in the Supreme Court of Victoria (Dixon AJ) had found that the defendant had not acted fraudulently. The Full Court of the Supreme Court upheld that finding. Isaacs J, after referring to decisions of the Privy Council and the House of Lords, said that the rule was as stated by Lord Herschell LC and Lord Watson in the case of The P Caland. He went on10: "By following it, I do not mean that as soon as I see there are concurrent findings I abstain from forming my own opinion. I am bound to consider the evidence and to form my own opinion consistently with judicial obligation and precedent. But when I have done so, the rule comes into play, and, unless I reach the point of clear conviction predicated by the House of Lords in the P Caland Case, the appeal should, in my opinion, fail." The principle was referred to by Barwick CJ, with whom Stephen, Mason, Jacobs and Aickin JJ agreed, in Baffsky v Brewis11 in relation to a finding as to whether a moneylender acted honestly and ought fairly to be excused for a breach of certain statutory requirements. It was also referred to by Mason J in connection with a finding about contributory negligence in The Commonwealth v Introvigne12. In Louth v Diprose13 (a case about unconscionable conduct) Deane J said: "[I]t is immaterial that the concurrent findings of fact by the court of first instance and the first appellate court encompass both findings of primary [1893] AC 207 at 216. (1928) 41 CLR 62 at 68. 10 (1928) 41 CLR 62 at 70-71 (references omitted). 11 (1976) 51 ALJR 170; 12 ALR 435. 12 (1982) 150 CLR 258 at 274. 13 (1992) 175 CLR 621 at 634 (references omitted). fact and conclusions and inferences of fact drawn from primary facts or that some conclusions or inferences of fact are based on different reasonings as between the two courts. Nor is it relevant that there has been a dissentient in the first appellate court." In the same case, Deane J referred to what he had earlier said in Waltons Stores (Interstate) Ltd v Maher14 (concerning findings about mistaken belief in a contractual setting) as to the modern rationale of the principle, and the importance of litigious finality as a means of preserving equitable access to justice: "[I]t is in the overall interests of ... the preservation of at least some vestige of practical equality before the law that, in the absence of special circumstances, there should be an end to the litigation of an issue of fact at least when the stage is reached that one party has succeeded upon it both on the hearing before the court of first instance and on a rehearing before the court of first appeal." Callinan J and I invoked the principle in our dissenting reasons in Bridgewater v Leahy15. It is a principle that stands alongside, and applies in addition to, the principle concerning appellate intervention in factual judgments where a primary judge enjoys some particular advantage16. The principles exist for different reasons, although in many cases they work to the same end. In past times, in most Australian jurisdictions, including New South Wales, a decision on the issue of negligence in an action for damages for personal injuries would be made by a jury as the tribunal of fact. Since no reasons would be given for such a decision, the practical possibility of an appeal on the issue would be very limited17. Nowadays, as in the present case, the issue of negligence is normally dealt with by a trial judge who sits without a jury and who delivers a fully reasoned decision. This procedure facilitates (and in some cases invites) appellate review. The decision of a court of appeal also takes the form of a reasoned judgment, or of reasoned judgments, delivered after a reconsideration of all the evidence and arguments. The law continues to value finality18, which, as Deane J pointed out, is related to questions of reasonable and 14 (1988) 164 CLR 387 at 434-435. 15 (1998) 194 CLR 457 at 471 [43]. 16 Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540 at 569 [54]. 17 Swain v Waverley Municipal Council (2005) 220 CLR 517 at 519-522 [1]-[8]. 18 D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1. equal access to justice. The more litigation becomes a process of attrition, the greater will be the tendency for the outcome of litigation to depend upon the resources, or financial support, available to litigants. That is not good for the administration of civil justice. Given the substantial reduction of jury trials in the administration of civil justice, the respect which a second appellate court shows to concurrent findings of fact is an important counterweight to the seemingly inexorable tendency to prolong litigation. As Isaacs J said, it does not mean that this Court abdicates those its own responsibilities; but responsibilities with an appreciation that, for good reason, it requires to be clearly convinced of error before it will disturb such findings. it discharges Two examples involved in the findings on negligence and causation in the present case illustrate the point. The primary judge and the majority in the Court of Appeal found that the appellant was aware, over a period of years, of the propensity of many people to jump, and of some people to dive, from the bridge. That inference was based largely on two facts: first, a number of witnesses said they saw these things happen, and there is no reason to think such occurrences were not widely known; secondly, the appellant erected a sign which appeared to reflect an awareness of the practice. Again, the primary judge and the majority in the Court of Appeal inferred that a more expansive sign, and a differently constructed railing or fence on the bridge, would have prevented the first respondent from diving. Those inferences were contestable, but they were open on the evidence, and the appellant's arguments on those matters were considered and rejected, for cogent reasons, by a trial judge and an appellate court. A conclusion that a differently designed railing or fence on the bridge, or a differently expressed warning sign, would have deterred an over-confident youth, prepared to disregard an existing prohibition, from diving is a matter on which judgments may differ. Yet it is a judgment of a kind routinely made in negligence actions. When, in a given case, such a finding is reviewed and affirmed by an intermediate appellate court, then this Court should reverse the finding only when it is clearly convinced of error. Subject to those additional observations as to the nature of the exercise that is involved, I agree with Kirby J, for the reasons he has given, that the findings on the issues of negligence and causation should not be overturned. I also agree with what Kirby J has said about the matters of contributory negligence and costs, and with the orders he proposes. GUMMOW J. In Berrigan Shire Council v Ballerini19, Callaway JA remarked that "[t]he relationship between duty and breach in the law of negligence is causing more perplexity than it used to do". This appeal bears out the force of that statement. The errors of which the appellant rightly complains, regarding both the reasons of the trial judge and those of the New South Wales Court of Appeal, did not turn on factual matters upon which reasonable minds might differ. Rather, they concerned the misapplication of basic and settled matters of legal principle. These principles may be restated shortly. First, the proper resolution of an action in negligence depends on the existence and scope of the relevant duty of care. Secondly, whatever its scope, a duty of care imposes an obligation to exercise reasonable care; it does not impose a duty to prevent potentially harmful conduct. Thirdly, the assessment of breach depends on the correct identification of the relevant risk of injury. Fourthly, breach must be assessed prospectively and not retrospectively. Fifthly, such an assessment of breach must be made in the manner described by Mason J in Wyong Shire Council v Shirt20. The facts The facts are set out in greater detail in the reasons of Callinan J, but it is convenient to set out the main aspects here. The estuary of the Wallamba River divides the twin towns of Forster and Tuncurry on the mid-north coast of New South Wales; Forster lying on the eastern bank, Tuncurry to the west. The estuary contains navigable channels as well as a large central sandbar of shifting depth and dimensions. The towns of Forster and Tuncurry are linked by a bridge which is 632 m long and which carries a two-lane bitumen roadway and a footpath on its northern side. The facts established at the trial included the following. The footpath was enclosed by a wooden post and rail fence around 1.2 m high and consisting of a flat wooden top railing, two horizontal wooden cross-members, horizontal wires and vertical posts. Depending on tidal conditions, the top of the railing was around 9 m from the surface of the water. There was a pictogram indicating the prohibition "no diving" at each end of the bridge, and signs in words prohibiting fishing from, and climbing on, the bridge. The then current "no diving" pictograms were erected by the second respondent, the Great Lakes Shire Council ("the Council"), in 1995, with funding obtained from the appellant, the Roads and Traffic Authority of NSW ("the RTA"). 19 (2005) 13 VR 111 at 115. 20 (1980) 146 CLR 40 at 47-48. The bridge was built in 1959 by the Department of Main Roads, the predecessor of the RTA. The RTA became the universal successor of that Department and the Commissioner for Main Roads pursuant to the Transport Administration Act 1988 (NSW), Sched 7 Div 5, and now exercises the powers and functions set out in Pt 6 of that Act. Pursuant to s 7(4) of the Roads Act 1993 (NSW), the Council was the relevant "roads authority" within the meaning of that statute. The extent of the obligations of such a "roads authority" was recently considered by this Court in Leichhardt Municipal Council v Montgomery21. The interplay between the statutory functions of the Council and the RTA with respect to the bridge was not fully considered at trial or in the Court of Appeal. It was concluded, however, that the RTA was responsible for the erection and maintenance of the bridge and that the Council was responsible for the day to day management of the bridge including, among other things, the enforcement of the prohibition contained in the various pictograms and signs. Each entity thus answered the common law description of a roads authority, namely, as Dixon J put it, "an authority exercising powers for the construction, maintenance, repair and control of highways"22. There was ample evidence that diving and jumping from the Forster- Tuncurry bridge was a widespread and longstanding practice among young people, although the precise frequency and extent of this practice was disputed in this Court. Be that as it may, there was no dispute that until the accident that befell the first respondent, Mr Dederer, there were no reported injuries to those who jumped or dived from the bridge. It was as a result of Council concern about jumping and diving that the "no diving" pictograms were erected. There had also been concern about the danger posed by divers to boats passing under the bridge rather than simply the danger to the divers themselves. Nor, for that matter, was the safety of divers the only potential risk associated with the bridge. Mr Alexander, an RTA officer, gave evidence that the safety issue relating to the bridge that was of most concern to the RTA was the potentially unsafe lack of separation between the traffic on the bridge and the large number of pedestrians and cyclists using the footpath. On 31 December 1998, Mr Dederer was rendered partially paraplegic after he dived from the bridge into shallow water and struck his head on the estuary bed. Mr Dederer was then aged 14. He climbed onto the railing of the bridge and although he originally intended to jump into the water he changed his mind 21 (2007) 81 ALJR 686; 233 ALR 200. 22 Buckle v Bayswater Road Board (1936) 57 CLR 259 at 286. and dived head first instead. Mr Dederer and his family were familiar with the area, and he had seen many other young people jump or dive from the bridge. He had done so himself on the previous day without any harm. He admitted that he saw and understood the signs forbidding diving and climbing, and that he knew that the sandbar moved and that the channels were of variable depth. The decision at trial At trial in the Supreme Court of New South Wales (Dunford J sitting without a jury) Mr Dederer succeeded against both the RTA and the Council. His Honour found that Mr Dederer saw, understood, and deliberately disregarded the "no diving" pictograms, and that he knew that the water was of variable depth and that jumping from heights could cause injury. Nonetheless, Dunford J placed great emphasis on the fact that many people jumped or dived from the bridge both before and after the then current signs prohibiting diving were erected in 1995. He said23: "I am satisfied that almost from the time of its construction and certainly for many years prior to the plaintiff's accident young, and not so young, persons were regularly using the railing and ledge of the bridge as launching pads for jumping and diving into the water below, particularly, but not limited to, during the summer holidays. The reason why jumping and diving off the bridge was so popular was in part due to the flat topped railing along the outside boundary of the bridge, and the ease of access to that railing by reason of the wooden cross members which provided steps up to the top railing. Even if it was not anticipated prior to the construction of the bridge that it would be used in this way, it soon became apparent after its completion and foreseeable that the culture was likely to continue. Although the jumpers and divers entered the water in or near the main navigation channel, both the RTA and the Council were aware of the moving sands and variable depths underneath the water, and it was therefore reasonably foreseeable, and not far fetched or fanciful, that if the practice continued someone engaging in the activity was liable to suffer serious injury. I say this notwithstanding the fact that no one had in fact been injured in nearly 50 years, because the risks should have been so apparent to the officers of both defendants with knowledge of the estuary bed that it was in effect 'an accident waiting to happen'." 23 (2005) Aust Torts Reports ¶81-792 at 67,528-67,529. The Council, but not the RTA, admitted that it was aware of this pattern of behaviour. Nonetheless, his Honour found that the RTA "must have known" of it, and because of the "continuing practice" or "culture" of diving Dunford J found that it was: "not sufficient to ignore the fact that the signs were being disregarded and it is necessary to consider what, if any, further steps should reasonably have been taken by way of further warning signs, modification of the bridge or otherwise, to prevent injury to persons such as the plaintiff; or to put it another way, the content of the duty of care"24. His Honour held that the RTA breached its duty of care and was negligent in failing to erect a "warning sign containing words similar to 'Danger, shifting sands, variable depth'"; in failing to replace the existing handrail with one composed of vertical (not horizontal) members like "a 'pool' type fence"; and in failing to modify the flat top of the handrail by attaching to it a triangular strip "making it difficult and uncomfortable to stand on, and almost impossible to balance on before jumping or diving"25. The evidence upon which the trial judge came to his conclusions respecting breach will require some explanation later in these reasons. His Honour reduced Mr Dederer's damages by 25 per cent on account of his contributory negligence. The decision of the Court of Appeal An appeal by the Council was allowed on the basis that it was not liable to Mr Dederer because his injuries were "a result of the materialisation of an obvious risk of a dangerous recreational activity" within the meaning of s 5L of the Civil Liability Act 2002 (NSW)26. That Act did not apply to Mr Dederer's action against the RTA. The Council was joined as second respondent in this Court but played no active part in the appeal. The appeal by the RTA to the Court of Appeal regarding contributory the proportion of Mr Dederer's contributory negligence succeeded, and negligence was increased from 25 per cent to 50 per cent. That order is the subject of an application for special leave to cross-appeal to this Court, which is addressed later in these reasons. However, by majority (Ipp and Tobias JJA, Handley JA dissenting) the appeal by the RTA on liability failed. 24 (2005) Aust Torts Reports ¶81-792 at 67,529. 25 (2005) Aust Torts Reports ¶81-792 at 67,531. 26 (2006) Aust Torts Reports ¶81-860 at 68,891-68,895. The Court of Appeal rejected the RTA's ground of appeal relating to the trial judge's finding that it knew of the continued jumping and diving from the bridge27. In any event, Ipp JA held that: "the serious risk of devastating injuries to those engaged in such activities must have been obvious to the RTA. The RTA knew or ought to have known that particularly in the summer months, jumping and diving was occurring with startling frequency, involving at times, groups of young people every five or ten minutes, with a group capable of comprising 10 to 15 children aged 10 years to 16 years."28 Tobias JA, who agreed with Ipp JA's disposition of the appeal, endorsed these remarks and added that29: "given the knowledge of … the RTA that for children to jump from the bridge was dangerous and that diving from the bridge was a fortiori dangerous … it is but a small step to conclude that, with the knowledge that children continued to dive from the bridge in circumstances where the water below (depending upon tidal influences) was of variable depth and at times quite shallow, it would be reasonably foreseeable that at low tide in particular, when the water was shallow on the one hand and the height between the railing and the surface of the water is some 9-10 metres on the other, sooner or later a child would dive in a manner resulting in serious injuries. As I have indicated, I would regard such a conclusion as a matter of common sense." For the majority in the Court of Appeal, it was of central importance that the risk was one "created" by the RTA itself through its statutory predecessor. Ipp JA stated that30: "In the present case the RTA is to be regarded as having created the danger by erecting the bridge and by constructing it in a position and configuration that, since its construction, attracted young people to jump and dive from it into the water some nine to ten metres below. In a 27 (2006) Aust Torts Reports ¶81-860 at 68,899. 28 (2006) Aust Torts Reports ¶81-860 at 68,900. 29 (2006) Aust Torts Reports ¶81-860 at 68,918. 30 (2006) Aust Torts Reports ¶81-860 at 68,908-68,909. See also at 68,896, 68,901, material sense, in the present context, creating the risk of harm is at least equivalent to increasing the risk." (emphasis in original) Tobias JA agreed, saying that31: "the RTA had made the danger worse as its predecessors were responsible for the construction of the bridge and, in particular, the type of external railing which provided an easy platform to the RTA's knowledge for children to utilise for the purpose of jumping into the waters below". Their Honours then fixed upon the fact that the "no diving" signs had not in fact prevented young people from diving from the bridge. Ipp JA stated32: "There have been many decisions, including decisions of the High Court, holding that the erection of prohibitory signs is sufficient to discharge the duty of care owed by an entity in control of land on which dangerous activities may be undertaken by members of the public. But, breach of a duty of care is a question of fact, and each case depends on its own circumstances. In the present case, the signs that were erected (and that includes the signs prohibiting climbing on the bridge as well as the pictographs) were not serving the purpose for which they had been erected. They were being ignored and the practice was continuing unabated. This was common knowledge. Mr Alexander referred to it as a 'well known event' and Mr [Pevitt] and the police had found enforcement of the prohibitions displayed on the sign impossible. On the evidence of Mr Dederer, his father, Mr [Pevitt], Mr Keegan [two officers of the Council], Mr Cunial [a friend of Mr Dederer, born in 1980 who was with him on the day of the accident] and Mr Alexander himself, the practice of jumping and diving off the bridge continued with considerable frequency after 1995 notwithstanding the erection of the pictographs and the other prohibitory signs. The signs were not preventing children and young adults from endangering themselves in relatively large numbers on what seems to have been a daily basis over the summer months. In these circumstances, the RTA must have known that the signs were, in a word, useless. And they must have known this from at least shortly after the pictographs were erected in 1995. 31 (2006) Aust Torts Reports ¶81-860 at 68,920-68,921. 32 (2006) Aust Torts Reports ¶81-860 at 68,900. As part of the general duty of care owed by the RTA to users of the bridge, it should – in any event – have ascertained whether the pictograph signs were proving effective. On that basis, the RTA ought to have known that they were not". His Honour amplified this conclusion under the heading "The reasonableness of the RTA's response to the risk"33: "The obvious risks involved in jumping and diving off the bridge were not a deterrent. Many of the visitors to the bridge were children and young people. The RTA could not assume that these persons would take reasonable care for their own safety. Experience over many years had shown that, in large numbers, this was not what they were doing. In my opinion, the RTA was not entitled to rely solely on the signs once it became apparent that they were not serving their purpose and were not having any noticeable effect on persons jumping or diving off the bridge." The result in the Court of Appeal was that the trial judge was correct to hold that "by the time Mr Dederer was injured … the erection of the signs was no longer a reasonable response to the risk that the RTA had created"34. Tobias JA held that it was not reasonable for the RTA "to simply ignore what it clearly knew to be a dangerous activity in which children were partaking and who could be expected to be oblivious to the risks involved"35. This statement sits rather oddly with the Court of Appeal's finding that the risk was of such obviousness even to a 14 year old that the Council was absolved of all liability. The majority thus upheld the trial judge's ruling that the RTA was negligent in failing to attach a triangular top to the handrail and in failing to install vertical pool-type fencing36. Although the Court of Appeal correctly considered, contrary to the trial judge, that a sign of prohibition did constitute a "warning", the majority regarded a "mere" sign of prohibition to be unreasonable 33 (2006) Aust Torts Reports ¶81-860 at 68,900, 68,902. 34 (2006) Aust Torts Reports ¶81-860 at 68,903. 35 (2006) Aust Torts Reports ¶81-860 at 68,921. 36 (2006) Aust Torts Reports ¶81-860 at 68,905-68,906. in the circumstances. However, their Honours considered the trial judge's proposed sign would have been similarly ineffective because "Mr Dederer in fact knew that there were shifting sands and variable depths and this did not prevent him from diving"37. Instead, their Honours found that a "composite sign" conveying the danger of "shallow water" would have been a reasonable response38. This conclusion was at odds with the trial judge's undisturbed finding that it was "probable that [such a] sign would also have been ignored, just as the 'diving prohibited' sign was ignored"39. Handley JA dissented. His Honour found that the trial judge had been in error in attributing to the RTA knowledge of continued diving from the bridge, as distinct from jumping therefrom, and that "[t]he absence of any recorded injury over the 39 years before the plaintiff's accident is eloquent testimony to the fact that the common practice of jumping off the bridge was not unsafe"40. His Honour added that "[i]f this was an accident waiting to happen it had been waiting for a very long time"41. So far as the exercise of reasonable care was concerned, his Honour summarised his views as follows42: "The signs proposed would not have told the plaintiff anything he did not already know, a triangular section on the handrail would not have discouraged the plaintiff from diving off the ledge, and a pool type handrail would not have stopped him getting onto the ledge." As his Honour pointed out, Mr Dederer did not give direct evidence about whether any of these matters would have caused him not to dive. A finding of causation in his favour was, at best, a matter of inference43. Handley JA concluded that, in light of the State-wide obligations of the RTA and in light of Mr Dederer's voluntary participation in a recreational activity involving inherent risk, "the foreseeable risk of a diving accident from 37 (2006) Aust Torts Reports ¶81-860 at 68,904. 38 (2006) Aust Torts Reports ¶81-860 at 68,905. 39 (2005) Aust Torts Reports ¶81-792 at 67,530. 40 (2006) Aust Torts Reports ¶81-860 at 68,876. 41 (2006) Aust Torts Reports ¶81-860 at 68,876. 42 (2006) Aust Torts Reports ¶81-860 at 68,880. 43 (2006) Aust Torts Reports ¶81-860 at 68,880. this bridge with a 39 year accident free history had no reasonable claim on [the RTA's] further attention or resources"44. The appeal to this Court The appeal by the RTA to this Court should be allowed. Unlike many recent appeals to this Court in negligence cases, the resolution of this appeal does not require consideration of factual matters regarding breach, upon which reasonable minds may differ45. Nor, despite submissions by the RTA, was the error of the Court of Appeal to be found in discrete and perhaps peripheral disputes of fact. Rather, the errors on the part of the majority of the Court of Appeal lay in fundamental matters of law: matters against which concurrent findings of fact are no insulation. The scope of the RTA's duty of care Although the existence of a duty of care owed by the RTA to Mr Dederer was not in dispute, two points must be made about the nature and extent of that obligation. First, duties of care are not owed in the abstract. Rather, they are obligations of a particular scope, and that scope may be more or less expansive depending on the relationship in question. Secondly, whatever their scope, all duties of care are to be discharged by the exercise of reasonable care. They do not impose a more stringent or onerous burden. Regarding the first point, a duty of care involves a particular and defined legal obligation arising out of a relationship between an ascertained defendant (or class of defendants) and an ascertained plaintiff (or class of plaintiffs). Sometimes, the determination of that legal obligation is more complicated than it was at the time Lord Atkin announced his "neighbour" principle in 193246. The law now recognises types of loss and kinds of relationships which are different from those of earlier days. Five members of this Court observed in their joint judgment in Sullivan v Moody47: 44 (2006) Aust Torts Reports ¶81-860 at 68,881-68,882. 45 Examples include Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540; Woods v Multi-Sport Holdings Pty Ltd (2002) 208 CLR 460; Dovuro Pty Ltd v Wilkins (2003) 215 CLR 317; Neindorf v Junkovic (2005) 80 ALJR 341; 222 ALR 631; Roman Catholic Church Trustees for the Diocese of Canberra and Goulburn v Hadba (2005) 221 CLR 161. 46 Donoghue v Stevenson [1932] AC 562 at 580. 47 (2001) 207 CLR 562 at 579-580 [50] per Gleeson CJ, Gaudron, McHugh, Hayne "Different classes of case give rise to different problems in determining the existence and nature or scope, of a duty of care. Sometimes the problems may be bound up with the harm suffered by the plaintiff, as, for example, where its direct cause is the criminal conduct of some third party. Sometimes they may arise because the defendant is the repository of a statutory power or discretion. Sometimes they may reflect the difficulty of confining the class of persons to whom a duty may be owed within reasonable limits. Sometimes they may concern the need to preserve the coherence of other legal principles, or of a statutory scheme which governs certain conduct or relationships. The relevant problem will then become the focus of attention in a judicial evaluation of the factors which tend for or against a conclusion, to be arrived at as a matter of principle." (citations omitted) Many of those matters were canvassed in Brodie v Singleton Shire Council48. The result of that case is that a road authority is obliged to exercise reasonable care so that the road is safe "for users exercising reasonable care for their own safety"49. The expression of the scope of the RTA's duty of care in those terms has long antecedents in the law relating to occupiers' liability. In Indermaur v Dames, giving the judgment of the Court of Common Pleas50, "we consider it settled law, that [a visitor], using reasonable care on his part for his own safety, is entitled to expect that the occupier shall on his part use reasonable care to prevent damage from unusual danger". The modern form of that principle has been frequently affirmed in recent times, both with regard to occupiers and roads authorities52. Of course, the weight to be given to an expectation that potential plaintiffs will exercise reasonable care for their own safety is a general matter in the assessment of breach in every 48 (2001) 206 CLR 512. 49 (2001) 206 CLR 512 at 581 [163]. 50 Erle CJ, Willes, Keating and Montague Smith JJ. 51 (1866) LR 1 CP 274 at 288. 52 Examples include Phillis v Daly (1988) 15 NSWLR 65 at 74; Romeo v Conservation Commission (NT) (1998) 192 CLR 431 at 478 [123]; Neindorf v Junkovic (2005) 80 ALJR 341 at 362 [99]; 222 ALR 631 at 656-657. case53, but in the present case it was also a specific element contained, as a matter of law, in the scope of the RTA's duty of care. A road authority such as the RTA is not obliged to exercise reasonable care in the abstract; still less is it obliged to ensure that a road be safe in all the circumstances. So much was recently reaffirmed in Leichhardt Municipal Council v Montgomery54. Such an expression of the duty's scope has an obvious and direct consequence when assessing breach. As Gaudron, McHugh and Gummow JJ stated in Brodie55: "In dealing with questions of breach of duty, whilst there is to be taken into account as a 'variable factor' the results of 'inadvertence' and 'thoughtlessness', a proper starting point may be the proposition that the persons using the road will themselves take ordinary care." (citations omitted) Their Honours went on to observe that persons exercising reasonable care will be able to avoid injury in some situations, whereas others will present "a foreseeable risk of harm even to persons taking reasonable care for their own safety"56. The RTA's duty of care was owed to all users of the bridge, whether or not they took ordinary care for their own safety; the RTA did not cease to owe Mr Dederer a duty of care merely because of his own voluntary and obviously dangerous conduct in diving from the bridge. However, the extent of the obligation owed by the RTA was that of a roads authority exercising reasonable care to see that the road is safe "for users exercising reasonable care for their own safety"57. The essential point is that the RTA did not owe a more stringent obligation towards careless road users as compared with careful ones. In each case, the same obligation of reasonable care was owed, and the extent of that obligation was to be measured against a duty whose scope took into account the exercise of reasonable care by road users themselves. 53 Thompson v Woolworths (Q'land) Pty Ltd (2005) 221 CLR 234 at 246 [35]. 54 (2007) 81 ALJR 686; 233 ALR 200. 55 (2001) 206 CLR 512 at 580 [160]. 56 (2001) 206 CLR 512 at 581 [163]. 57 Brodie (2001) 206 CLR 512 at 581 [163]. In the Court of Appeal58, Ipp JA referred to and adopted remarks he made in the earlier case of Edson v Roads and Traffic Authority59, in which the plaintiff and many others exercised an obvious disregard for their own safety when they crossed a busy highway on foot. After referring to the passage from Brodie set out above, his Honour remarked that60: "the factual underpinning of the proposition that a road authority is duty bound only to require a road to be safe not in all circumstances but for pedestrians exercising reasonable care for their own safety, was absent. Here, the RTA long knew that the pedestrians were not exercising reasonable care for their own safety and, in large numbers, were constantly not doing so. The RTA could not rely on residents in the vicinity of the path to look after themselves and to act with due care." In the present case, his Honour concluded that "the 'factual underpinning' was also absent"61. This was in error, as the expectation of reasonable care was not merely a "factual underpinning", but rather a legal aspect of the scope of the duty owed by the RTA. Reasonable care, not prevention In simple and complicated cases alike, one thing is fundamental: while duties of care may vary in content or scope, they are all to be discharged by the exercise of reasonable care. In Vairy v Wyong Shire Council, McHugh J explained62: "[T]he duty in negligence is generally described as a duty to take reasonable care. In some areas of the law of negligence, however, the duty is expressed in more limited and specific terms. Until the decision of this Court in Zaluzna63, for example, the duty owed to entrants upon privately owned land varied according to the category of the entrants. They were classified as invitees, licensees and trespassers. Similarly, the duty in respect of negligent statements is more specific and limited than a 58 (2006) Aust Torts Reports ¶81-860 at 68,901. 59 (2006) 65 NSWLR 453. 60 (2006) 65 NSWLR 453 at 468. 61 (2006) Aust Torts Reports ¶81-860 at 68,901. 62 (2005) 223 CLR 422 at 432 [25]. 63 Australian Safeway Stores Pty Ltd v Zaluzna (1987) 162 CLR 479. simple duty to take reasonable care in all the circumstances of the case. In negligence cases involving physical injury, however, the duty is always expressed in terms of reasonable care. As Prosser and Keeton have pointed out, 'the duty is always the same – to conform to the legal standard of reasonable conduct in the light of the apparent risk'64." His Honour dissented from the outcome in Vairy, but that does not qualify the cogency of the above observations. Leaving aside matters such as vicarious liability and the potential existence of non-delegable duties of care – neither of which are presently relevant – the exercise of reasonable care is always sufficient to exculpate a defendant in an action in negligence. In Blyth v Birmingham Waterworks, Alderson B laid down the nature of the action as long ago as 185665: "Negligence is the omission to do something which a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something which a prudent and reasonable man would not do." Blyth was a case in which the exercise of reasonable care was sufficient to exonerate the defendants notwithstanding the plaintiff's injuries. However, the standard of reasonable care also results in the inculpation, rather than exoneration, of defendants. In the earlier case of Vaughan v Menlove, Tindal CJ was able to say that66: "The care taken by a prudent man has always been the rule laid down … Instead, therefore, of saying that the liability for negligence should be co-extensive with the judgment of each individual ... we ought rather to adhere to the rule which requires in all cases a regard to caution such as a man of ordinary prudence would observe." It was therefore insufficient, in the judgment of his Lordship, that the defendant had acted "honestly and bonâ fide to the best of his own judgment"67. 64 Prosser and Keeton on the Law of Torts, 5th ed (1984) at 356. 65 (1856) 11 Exch 781 at 784 [156 ER 1047 at 1049]. 66 (1837) 3 Bing (NC) 468 at 475 [132 ER 490 at 493]. 67 (1837) 3 Bing (NC) 468 at 474 [132 ER 490 at 493]. Such an obligation to exercise reasonable care must be contrasted with an obligation to prevent harm occurring to others. The former, not the latter, is the requirement of the law. In Modbury Triangle Shopping Centre Pty Ltd v Anzil68, Gleeson CJ pointed to the remarks of Brennan J in Sutherland Shire Council v Heyman69 and observed that "the common law distinguishes between an act affecting another person, and an omission to prevent harm to another. If people were under a legal duty to prevent foreseeable harm to others, the burden imposed would be intolerable." In Heyman70, Brennan J had emphasised that the common law recognises "a duty to take reasonable care to avoid doing what might cause injury to another, not a duty to act to prevent injury being done to another by that other, by a third person, or by circumstances for which nobody is responsible". That recognition can be seen in the recent rejection by this Court in Montgomery71 of the existence of a non-delegable duty of care owed by roads authorities to road users. Whatever its content, the existence of such a non- delegable duty was inconsistent with the general obligation of reasonable care owed by roads authorities to the users of roads, including pedestrians. Gleeson CJ observed in Montgomery72: "The formulation of the duty of care given in Brodie, in its application to cases of misfeasance, and to a case where a roads authority has exercised its powers by engaging an independent contractor … is not a special duty to ensure anything; certainly not a duty to ensure that no worker behaves carelessly. It is a duty to exercise reasonable care." Likewise, as Hayne J succinctly put it, "the test for determining a highway authority's liability … [is] the ordinary test of liability in negligence"73. The RTA correctly complains that this orthodox approach was not applied at trial or in the Court of Appeal. The trial judge and the majority in the Court of Appeal each fixed on the failure of the "no diving" pictograms and "no climbing" signs to prevent diving or jumping from the bridge. The trial judge was 68 (2000) 205 CLR 254 at 266 [28]. 69 (1985) 157 CLR 424. 70 (1985) 157 CLR 424 at 478. 71 (2007) 81 ALJR 686; 233 ALR 200. 72 (2007) 81 ALJR 686 at 695 [26]; 233 ALR 200 at 209. 73 (2007) 81 ALJR 686 at 719 [148]; 233 ALR 200 at 241. "satisfied" that the signs "were not effective in the sense that large numbers of young people continued to jump, dive, do somersaults, etc from the bridge into the water", and his Honour found it "not sufficient to ignore the fact that the signs were being disregarded"74. In the Court of Appeal, Ipp JA reasoned that the signs "were not serving the purpose for which they had been erected"; that is, they "were not preventing children and young adults from endangering themselves in relatively large numbers on what seems to have been a daily basis over the summer months" and they were being "ignored and the practice was continuing unabated"75. Tobias JA asked whether the "known fact" of continued jumping called "for different measures to be adopted by the RTA to prevent the practice at least of jumping off the bridge". His Honour concluded that it was unreasonable "to ignore the well-known practice of children jumping from the bridge in defiance of 'No Diving' signs"76. The error in that approach lies in confusing the question of whether the RTA failed to prevent the risk-taking conduct with the separate question of whether it exercised reasonable care. If the RTA exercised reasonable care, it would not be liable even if the risk-taking conduct continued. If the contrary were true, then defendants would be liable in any case in which a plaintiff ignored a warning or prohibition sign and engaged in the conduct the subject of the warning. Whether or not other persons engaged in that conduct, such a defendant would ipso facto have failed to prevent at least the plaintiff from engaging in it. If this quasi-automatic form of liability represented the true state of the law, it would be startlingly at odds with the general proposition that liability in tort depends upon proof of fault through the intentional or negligent infliction of harm77. More particularly, it would also be at odds with the decision in Montgomery that roads authorities owe only a duty to take reasonable care, and do not owe a more stringent or non-delegable duty. The trial judge and the majority in the Court of Appeal impermissibly reasoned that if a warning is given, and if the conduct against which that warning is directed continues notwithstanding the warning, then the party who gave the warning is shown to have been negligent by reason of the warning having failed. Quite apart from its inconsistency with the scope of the RTA's duty of care, this reasoning erroneously short-circuits the inquiry into breach of duty that is required by Shirt, a matter discussed later in these reasons. 74 (2005) Aust Torts Reports ¶81-792 at 67,527, 67,529 (emphasis added). 75 (2006) Aust Torts Reports ¶81-860 at 68,900 (emphasis added). 76 (2006) Aust Torts Reports ¶81-860 at 68,919, 68,920 (emphasis added). 77 cf Northern Territory v Mengel (1995) 185 CLR 307 at 341-342. Even reasonable warnings can "fail", but the question is always the reasonableness of the warning, not its failure. Ipp JA's statement, based on a reference to another case78, to the effect that a warning sign is "not an automatic, absolute and permanent panacea"79 was no substitute for a proper assessment of reasonableness. Whether or not the passage referred to by his Honour did in fact bear the meaning attributed to it by him, the words of Windeyer J in Teubner v Humble are apposite80: "[D]ecisions on the facts of one case do not really aid the determination of another case. Observations made by judges in the course of deciding issues of fact ought not to be treated as laying down rules of law. Reports should not be ransacked and sentences apt to the facts of one case extracted from their context and treated as propositions of universal application … That would lead to the substitution of a number of rigid and particular criteria for the essentially flexible and general concept of negligence." looks What is demonstrated here is a by-product of the common law technique which to precedent and operates analogically as a means of accommodating certainty and flexibility in the law. Equity, by contrast, involves the application of doctrines themselves sufficiently comprehensive to meet novel cases. The question of a plaintiff "what is your equity?"81 thus has no common law counterpart. The utility of factual parallels lies not in determining the correctness of decisions of fact, but rather in determining whether the correct legal tests were applied. Apothegms relating to factual matters are unlikely to focus the mind on the resolution of the legal questions that were presented. The proper identification of the risk Even if the trial judge and the Court of Appeal had properly ascertained the scope of the RTA's duty of care, and had accurately discerned that its obligation extended only to the exercise of reasonable care, their Honours would still have been led into error if they did not accurately identify the actual risk of injury faced by Mr Dederer. It is only through the correct identification of the 78 Waverley Council v Lodge (2001) 117 LGERA 447 at 459. 79 (2006) Aust Torts Reports ¶81-860 at 68,903. 80 (1963) 108 CLR 491 at 503. 81 Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at 216 [8] per Gleeson CJ. risk that one can assess what a reasonable response to that risk would be. In this, too, the majority in the Court of Appeal erred. In the Court of Appeal, the risk faced by Mr Dederer was characterised by the majority as being "serious spinal injury flowing from the act of diving off the bridge"82. That risk, it was said, was one created by the RTA through the erection of the bridge by its predecessor. However, such a characterisation of the risk obscured the true source of potential injury. This arose not from the state of the bridge itself, but rather from the risk of impact upon jumping into the This potentially shallow water and shifting sands of mischaracterisation of the risk led to two consequent errors. First, the majority were distracted from a proper evaluation of the probability of that risk occurring. Secondly, they erroneously attributed to the RTA a greater control over the risk than it possessed. the estuary. The first error can be seen in Ipp JA's characterisation of the "startling frequency" of "large numbers" of people jumping and diving from the bridge; a practice that was "continuing unabated" notwithstanding the pictograms83. Such a characterisation incorrectly focused attention on the frequency of an antecedent course of conduct, namely jumping and diving, and not on the probability of the risk of injury occurring as a result of that conduct, namely impact in shallow water. As Lord Porter observed in Bolton v Stone, "in order that the act may be negligent there must not only be a reasonable possibility of its happening but also of injury being caused" (emphasis added)84. In the present case, the frequency of jumping and diving was only startling if one ignored the fact that no-one was injured until Mr Dederer's unfortunate accident. Far from being a risk with a high probability of occurrence, the probability was in truth very low, and this fact was masked by the Court of Appeal's characterisation of the relevant risk. Regarding the second error, by focusing on the RTA's role in constructing the bridge from which Mr Dederer dived, the majority in the Court of Appeal overlooked the limited nature of the RTA's control over the actual risk of injury faced by Mr Dederer. Ipp JA concluded that85: "The fact that a defendant actually created the structure that gave rise to the risk that materialised, and maintained the structure in a form that 82 (2006) Aust Torts Reports ¶81-860 at 68,892. 83 (2006) Aust Torts Reports ¶81-860 at 68,900. 84 [1951] AC 850 at 858. 85 (2006) Aust Torts Reports ¶81-860 at 68,912. maintained the risk, has always been regarded as a matter of great importance in determining liability for negligence." Perhaps that is so, but whatever its role in creating the bridge the RTA did not control Mr Dederer's voluntary action in diving, and nor did it create or control the natural variations in the depth of the estuary beneath the bridge. The present was not a case, for example, in which the plaintiff's injury arose because the bridge collapsed, or because the footpath was defective, or because the side handrail gave way. Nor was it a case in which the "incentives" discerned by Ipp JA were ones created by the RTA86. Rather, the risk arose because of the conjunction of the bridge's location and two factors outside the RTA's control: one human and the other environmental, namely Mr Dederer diving from the bridge and the natural variations of the estuary bed87. Both the RTA and Mr Dederer in this Court addressed the concept of "allurement" in their submissions. But this is a concept that is more likely to mislead than to assist. Even when the term had determinative legal significance, Barrowclough CJ was able to say in Napier v Ryan that the word "has been given a sanctity which I think it scarcely deserves"88. One can well agree with that sentiment today, especially as the former technical use of that term in occupiers' liability cases has long since been superseded by the decision in Australian Safeway Stores Pty Ltd v Zaluzna89. The continued use of the term "allurement" as a factual epithet tends to conceal more than it reveals. First, "allurement" might be used to indicate no more than that many people have encountered the risk, thus leading to a conclusion one way or another about the probability of that risk eventuating. Secondly, the term might focus attention on the responsibility of the defendant for creating the risk, or for encouraging or enticing people into a dangerous situation. However, in the present case the RTA did not create the risk of shallow water of variable depth, nor did it exhort or encourage young people to dive from the bridge. Thirdly, the term might simply indicate the factual proposition that the particular location or activity was attractive to certain kinds of people. Such an observation is of no legal consequence. 86 (2006) Aust Torts Reports ¶81-860 at 68,901. 87 cf Vairy v Wyong Shire Council (2005) 223 CLR 422 at 453 [92]. 88 [1954] NZLR 1234 at 1240. 89 (1987) 162 CLR 479. The proper assessment of breach Having dealt with the relevant risk, it is appropriate to return to the inquiry into the assessment of breach. Whether reasonable care was exercised in the particular case is a question of fact going to the breach of any duty owed, not to the existence of that duty. In each case, the question of whether reasonable care was exercised is to be adjudged prospectively, and not by retrospectively asking whether the defendant's actions could have prevented the plaintiff's injury. As Hayne J stated in Vairy90: "When a plaintiff sues for damages alleging personal injury has been caused by the defendant's negligence, the inquiry about breach of duty must attempt to identify the reasonable person's response to foresight of the risk of occurrence of the injury which the plaintiff suffered. That inquiry must attempt, after the event, to judge what the reasonable person would have done to avoid what is now known to have occurred. Although that judgment must be made after the event it must seek to identify what the response would have been by a person looking forward at the prospect of the risk of injury." (emphasis omitted) Each of these principles was misapplied by the trial judge and the majority in the Court of Appeal. As explained earlier in these reasons, their Honours erred by focusing in retrospect on the failure of the RTA to prevent Mr Dederer's dive, as opposed to asking what, in prospect, the exercise of reasonable care would require in response to a foreseeable risk of injury. The use of phrases such as "an accident waiting to happen" was redolent of a retrospective, not prospective, approach to the matter. What, then, was the correct approach towards assessing breach? The particular trap into which the majority of the Court of Appeal fell was that warned against by Hayne J in Vairy91: "If, instead of looking forward, the so-called Shirt calculus is undertaken looking back on what is known to have happened, the tort of negligence becomes separated from standards of reasonableness. It becomes separated because, in every case where the cost of taking alleviating action at the particular place where the plaintiff was injured is markedly less than the consequences of a risk coming to pass, it is well nigh inevitable that the defendant would be found to have acted without reasonable care if alleviating action was not taken." 90 (2005) 223 CLR 422 at 461 [126]. 91 (2005) 223 CLR 422 at 462 [128]. The relevant passage from the judgment of Mason J in Shirt should be set out yet again92: "[T]he tribunal of fact must first ask itself whether a reasonable man in the defendant's position would have foreseen that his conduct involved a risk of injury to the plaintiff or to a class of persons including the plaintiff. If the answer be in the affirmative, it is then for the tribunal of fact to determine what a reasonable man would do by way of response to the risk. The perception of the reasonable man's response calls for a consideration of the magnitude of the risk and the degree of the probability of its occurrence, along with the expense, difficulty and inconvenience of taking alleviating action and any other conflicting responsibilities which the defendant may have. It is only when these matters are balanced out that the tribunal of fact can confidently assert what is the standard of response to be ascribed to the reasonable man placed in the defendant's position. The considerations to which I have referred indicate that a risk of injury which is remote in the sense that it is extremely unlikely to occur may nevertheless constitute a foreseeable risk. A risk which is not far-fetched or fanciful is real and therefore foreseeable. But, as we have seen, the existence of a foreseeable risk of injury does not in itself dispose of the question of breach of duty. The magnitude of the risk and its degree of probability remain to be considered with other relevant factors." The continuing authority of this passage has recently been reaffirmed by this Court in New South Wales v Fahy93. In that case, Gummow and Hayne JJ observed that94: "There may be cases when the principles stated in Shirt have not been applied accurately. In particular, arguments of the kind made, and rejected, in Vairy and in Mulligan v Coffs Harbour City Council[95] may suggest a misunderstanding of the so-called 'calculus' that would seek to determine questions of breach in some cases by balancing the cost of a single warning sign against the catastrophic consequences of a particular accident. But the fact, if it be so, that Shirt has not always been applied properly does not provide any persuasive reason to reconsider its correctness." 92 (1980) 146 CLR 40 at 47-48. 93 (2007) 81 ALJR 1021. 94 (2007) 81 ALJR 1021 at 1038 [78]. 95 (2005) 223 CLR 486. What Shirt requires is a contextual and balanced assessment of the reasonable response to a foreseeable risk. Ultimately, the criterion is reasonableness, not some more stringent requirement of prevention. Here, the risk of injury consequent upon jumping or diving from the bridge into water of variable depth was reasonably foreseeable. Indeed, the Court of Appeal correctly found, contrary to the trial judge, that the risk was one that was obvious even to a 14 year old boy96, and it beggars belief that the RTA could not foresee the very conduct against which its signage warned. The RTA's evidentiary dispute about whether it did in fact know of the continued practice of diving is beside the point: reasonable foreseeability is to be determined objectively, and the present risk was plainly foreseeable on any objective standard. The magnitude of the risk was self-evidently grave. Mr Dederer's partial paralysis is among the worst kinds of injuries imaginable. The probability of that injury occurring was, however, low. Despite the frequency of jumping and diving from the bridge, no-one was injured until Mr Dederer's unfortunate dive. What, then, of the expense, difficulty and inconvenience of taking alleviating action? The erection of further warning signs would not have been expensive, but Mr Dederer provided no evidence that they would be reasonable. The installation of pool-type fencing and a triangular cap on the handrail would have been more expensive and intrusive. The estimate of the cost of the handrail modification was some $108,072, and it was accepted that the cost of new fencing would be around $150,000 but, again, the reasonableness of such measures is open to doubt. The course of the evidence In order to explain these doubts, it is necessary to return to the way the evidence unfolded at trial. Mr Dederer was never asked whether any of the suggested modifications would have deterred him from diving. Each suggestion arose only after he gave his testimony. Mr Dederer called Mr Robert Fogg as an expert on safety and signage. Mr Fogg's uncontradicted evidence was that a "no diving" pictogram was a reasonable response to the risk. As it happens, Mr Fogg mistakenly believed that such a pictogram had not already been installed, but this misapprehension did not 96 Mr Dederer challenged that conclusion by way of a Notice of Contention dated 14 May 2007. That challenge should be rejected for the reasons given by the Court of Appeal: (2006) Aust Torts Reports ¶81-860 at 68,892-68,895. otherwise undermine the force of his evidence about what a reasonable response to the risk would have been. The sign proposed by the trial judge was devised solely by his Honour and there was no evidence that such a sign would have been a reasonable response. The sign adopted by the Court of Appeal, a pictogram indicating "no diving, shallow water", scarcely seems reasonable in light of the trial judge's explicit finding that it would probably have been ignored as well, particularly as the large number of young persons jumping and diving without incident indicated that the water under the bridge was not generally shallow. In any event, Mr Dederer admitted that he knew about the variable depth of the estuary and the moving sandbar. A warning sign would not have told him anything he did not already know. The suggestion that it was negligent not to have installed "pool-type" fencing arose out of the 1992 Austroads Bridge Design Code, which recommended that bridges constructed after 1992 use such vertical balusters. That design code did not apply to bridges constructed before 1992, and the Forster-Tuncurry bridge conformed to the applicable standards at the time of its construction. The matter was put to Mr Fogg, whose evidence was that he would be satisfied with the provision of a sign as an alternative to such "pool-type" fencing, and that such fencing was unlikely to deter a person of Mr Dederer's height who wished to dive from the bridge. The Council's Works Engineer and Asset Manager, Mr Keegan, also gave evidence that such fencing had not prevented people jumping from the nearby Bulahdelah bridge. The suggestion of affixing a triangular cap to the handrail emerged only in the cross-examination of Mr Keegan. It was not otherwise the subject of any evidence. Mr Keegan said that it would be "possible" to affix such a cap to the railing, and that it would be more difficult to balance on such a cap before diving or jumping. Significantly, Mr Dederer's safety expert, Mr Fogg, gave no evidence about this aspect of the case. Even if the cap made balancing more difficult, it might be doubted whether this would have impeded Mr Dederer's dive, especially as the risk and danger of diving were part of its attraction. Returning, then, to the assessment of breach mandated by Shirt, it becomes apparent that the RTA did not breach its duty of care. Though grave, the risk faced by Mr Dederer was of a very low probability, and a reasonable response to that risk did not demand the measures suggested by him. Those measures lacked evidential support; were of doubtful utility; would have caused significant expense in the case of the modifications to the handrail and fencing; and were in some cases contrary to express findings of fact. This was not a case in which the defendant had done nothing in response to a foreseeable risk. To the contrary, the RTA had erected signs warning of, and prohibiting, the very conduct engaged in by Mr Dederer. As this Court stated in Nagle v Rottnest Island Authority, a prohibition is "one form of notice – perhaps the most effective form of notice – warning of the danger of diving"97. In the circumstances, that was a reasonable response, and the law demands no more and no less. Conclusion The appeal should be allowed with costs. The RTA did not breach the duty of care it owed to Mr Dederer. Handley JA was correct to conclude that the risk of a diving accident had "no reasonable claim on [the RTA's] further Mr Dederer's application for special leave to cross-appeal The appeal having been decided in the RTA's favour, there is no occasion to address Mr Dederer's application for special leave to cross-appeal regarding contributory negligence. Likewise, each defendant having now succeeded on appeal, there is no occasion to address his request for a Sanderson costs order. Orders The appeal to this Court by the RTA should be allowed with costs against Mr Dederer, and his application for special leave to cross-appeal dismissed with costs. Orders 4, 5, 6 and 7 made by the Court of Appeal on 5 October 2006 should be set aside, and in their place it should be ordered that the appeal by the RTA to that Court be allowed; that so much of the orders made by Dunford J on 18 March 2005 as disposed of the action against the RTA be set aside, and in their place order that there be judgment for the RTA; and that Mr Dederer pay the costs of the RTA of the trial and the appeal to that Court. 97 (1993) 177 CLR 423 at 432. The suggestion to the contrary by the trial judge, supported by Mr Dederer in his Notice of Contention, should thus be rejected. 98 (2006) Aust Torts Reports ¶81-860 at 68,881-68,882. Kirby KIRBY J. At about noon on 31 December 1998, Mr Philip Dederer, then a boy aged fourteen and a half years, dived from a bridge linking the adjoining towns of Forster and Tuncurry in New South Wales. He plunged some eight or nine metres to a water channel below. Having regard to the receding tide, the channel was then but two metres deep. Mr Dederer was a tall boy of about 182 cm (nearly six feet). His head came into abrupt contact with the bottom of the channel. As a result, he was rendered a partial paraplegic. Mr Dederer sued the Roads and Traffic Authority of NSW ("the RTA") and the Great Lakes Shire Council ("the Council"), claiming damages for negligence. The damages to which Mr Dederer was entitled if he succeeded in his action were agreed between the parties before trial. In the event, he succeeded against both defendants in the Supreme Court of New South Wales before Dunford J ("the primary judge"). On appeal to the Court of Appeal of New South Wales, his judgment against the Council was unanimously set aside. That Court held that the Civil Liability Act 2002 (NSW) relieved the Council of legal responsibility for Mr Dederer's injuries99. However, a majority100 upheld Mr Dederer's entitlement in negligence. recover against Unanimously, the Court of Appeal set aside the primary judge's conclusion that contributory negligence should be assessed at 25% and increased that figure to 50%101. Moreover, in a supplementary decision on costs102, the Court of Appeal dismissed Mr Dederer's application for an order requiring the RTA to pay the Council's costs103. the RTA By special leave, the RTA appeals to this Court challenging the judgment which the Court of Appeal upheld against it. Mr Dederer seeks special leave to cross-appeal against its decisions on contributory negligence and costs. The Council, which was joined as a party in this Court, submitted to the Court's orders. As Tobias JA acknowledged at the end of his reasons in the Court of Appeal, the competing views expressed in that Court (and now urged upon this) "contain powerful arguments in favour and against the RTA's appeal being 99 Great Lakes Shire Council v Dederer (2006) Aust Torts Reports ¶81-860 at 68,874 100 Ipp and Tobias JJA; Handley JA dissenting. 101 (2006) Aust Torts Reports ¶81-860 at 68,874 [1], 68,915 [323], 68,916 [325]. 102 Great Lakes Shire Council v Dederer [No 2] [2006] NSWCA 336. 103 In accordance with the principle stated in the decision in Sanderson v Blyth Theatre Co [1903] 2 KB 533. Kirby upheld"104. However, alike with his Honour, I have reached the same conclusions on the issues of negligence and contributory negligence as Ipp JA expressed in the Court of Appeal. The concurrent findings of fact relating to the negligence decision should stand. Those conclusions of the Court of Appeal contain no error of fact or law to justify disturbance by this Court. The costs order sought by Mr Dederer in the Court of Appeal should, however, be made. Otherwise, all of the orders of the Court of Appeal should be confirmed. The facts The Forster-Tuncurry bridge: Mr Dederer and his family had a practice of spending summer holidays in the Tuncurry area. They regularly spent time swimming, water skiing and fishing in the estuary where Mr Dederer was later injured. He knew that the estuary was "very much given to tidal action"105. Over the years, Mr Dederer had frequently observed children and adults jumping and diving off the bridge at the Forster end near Forster beach. The area is well known as a tourist resort that attracts many families and visitors on vacation. Swimming and water sports constitute a major attraction of the district. The bridge from which Mr Dederer dived is 632 metres long106. Along its northern side is a concrete walkway for pedestrians, which is about 1.5 metres wide and is bounded by a railing on the outer edge. The bridge rests on reinforced concrete piles and 47 piers. It contains two elevated curves over channels respectively at the Forster and Tuncurry ends. These channels are used by "big trawler boats, fishing boats, ski boats and jet skis" passing up and down the estuary107. The channel on the Forster side of the estuary flows between piers 43 and 44. However, boats also used the water passage between piers 44 and 45, closer to the Forster shore. On the water side of the railing, a ledge protruded northwards near the point where Mr Dederer dived. According to the evidence, this ledge and the more elevated upper railing on the northern side of the bridge (together with a water pipe on the southern side) constituted popular platforms for children and young people to dive or jump from the bridge into the water below. As Ipp JA found108: 104 (2006) Aust Torts Reports ¶81-860 at 68,923 [375]. 105 (2006) Aust Torts Reports ¶81-860 at 68,884 [90]. 106 (2006) Aust Torts Reports ¶81-860 at 68,883 [79]. 107 (2006) Aust Torts Reports ¶81-860 at 68,883 [81]. 108 (2006) Aust Torts Reports ¶81-860 at 68,884 [85]. Kirby "Mr Dederer's dive was by no means an unusual phenomenon. For many years, almost from the time the bridge was constructed, young people – particularly over the summer months – frequently (often in groups) jumped and (less often) dived off the bridge into the estuary below. Apparently, until Mr Dederer was rendered paraplegic, no person had sustained injuries in these activities." Construction of the bridge was completed in 1959 by the then Department of Main Roads ("the DMR") of the State. The bridge was (and remains) part of New South Wales Main Road No 111. In September 1959, in accordance with the Main Roads Act 1924 (NSW), the Governor of the State directed the DMR to carry out maintenance of the bridge. This was done with the consent of the two Councils then concerned109. When the RTA was established, it became the statutory successor to the DMR110. The direction to maintain the bridge continues to apply to the RTA by virtue of later legislation111. By that legislation, the RTA is authorised to carry out road work, defined to include work upon any building or structure, including a bridge, constructed for the purpose of facilitating the use of the road as a road112. Work as a "roads authority" in relation to the bridge is shared with the Council; but work of a capital nature is the responsibility of the RTA, where necessary acting through the Council pursuant to capital grants provided to the Council by the RTA113. Mr Dederer gave evidence that, over the years of holidaying in the vicinity of Forster, he had frequently observed children and adults jumping and diving off the bridge, a sight that led him to assume that the water beneath "must be deep". He had been under the bridge from time to time in a boat. From that vantage point, he said, "the bridge looked fairly high but the water also looked very deep"114. 109 Pursuant to the Main Roads Act 1924 (NSW), s 25. See (2006) Aust Torts Reports 110 Transport Administration Act 1988 (NSW), Sched 7, Div 5. 111 Roads Act 1993 (NSW), ss 62, 63. See (2006) Aust Torts Reports ¶81-860 at 112 Roads Act 1993 (NSW), s 71. 113 (2006) Aust Torts Reports ¶81-860 at 68,874 [5]. 114 (2006) Aust Torts Reports ¶81-860 at 68,884-68,885 [92]. Kirby There was no suggestion that the bridge had been built other than in accordance with the standards applicable to such constructions in 1959. Two factors, however, were advanced to support the proposition that the RTA was aware of the particular dangers involved in the manner in which the bridge, as constructed, came to be used, especially by children and young people. The first was its knowledge of the practice of such people to use the bridge (and especially the ledge and the upper railing) as a departure point from which to enter the water below (to use a neutral expression). The second was its regular testing of the depth of the water channels below the bridge (and hence in the vicinity of the point of entry into the water from the bridge). Inferentially, this was done essentially for the purpose of ensuring the safety of the boating traffic beneath the bridge. In answers to interrogatories, the RTA conceded that from 1 December 1993 it was aware that the river bed levels under the bridge were continually altering and thereafter soundings were carried out at approximately three-monthly intervals115. that Children diving and jumping: Whereas the Council admitted, for the purposes of the proceedings, that it was "aware of the fact persons had jumped and/or dived from the Bridge" before Mr Dederer's injury, the RTA steadfastly maintained that, although it was aware of jumping from the bridge, it had no notice that diving was also occurring. This point of distinction featured prominently in the RTA's submissions to the Court of Appeal. It was accepted by Handley JA and became an important feature of his dissenting reasons116. The same distinction was also pressed upon this Court. However, for reasons similar to those advanced by Ipp JA117 and Tobias JA118 in the Court of Appeal, the differentiation between "jumping" and "diving" is not ultimately material to, and certainly not determinative of, the RTA's liability to Mr Dederer. Discovery prior to suit, and evidence otherwise given during the trial, established that for a long time, probably from soon after the bridge was opened in 1959, it came to be used by young people as a de facto point of entry into the water channels. Mr John Pevitt had been a ranger for the Council since 1988. He gave evidence that over the years he had seen many people jumping off the bridge, some of them doing somersaults, although he said that he had never seen anyone dive. Mr Pevitt stated that in about 1990, he had on three separate 115 Dederer v Roads and Traffic Authority (2005) Aust Torts Reports ¶81-792 at 116 (2006) Aust Torts Reports ¶81-860 at 68,875-68,876 [18]-[20]. 117 (2006) Aust Torts Reports ¶81-860 at 68,897-68,899 [185]-[204]. 118 (2006) Aust Torts Reports ¶81-860 at 68,916-68,918 [327]-[339]. Kirby occasions spoken to people preparing to jump from the bridge. He had endeavoured to dissuade them from doing so and had, on at least one occasion, drawn to their attention signs forbidding such activities. Each time he had been wearing his official Council uniform. However, they had ignored him and jumped all the same119. Once, Mr Pevitt tried to pursue the offenders, but they swam to a sandbank some 20 metres out, waved to him and refused to come ashore. As a result of these incidents, Mr Pevitt became convinced that the Council was unable to enforce the signed prohibition on entering the water from the bridge. He therefore endeavoured to secure the intervention of the police superintendent to ensure compliance with the signs. He later saw police speaking to people on the bridge. However, the people "just continued to jump". Even the use of the police patrol boat was unsuccessful in halting the practice. The signs referred to by Mr Pevitt were the subject of more detailed evidence by Mr Michael Keegan, an officer of the Council. Mr Keegan was an asset manager responsible for roads, bridges and stormwater infrastructure within the Council area. He indicated that since the earlier part of the 1990s, the RTA had provided funding to the Council under an annual "Block Grant Agreement" for activities that included the construction, maintenance and improvement of certain roads, including Main Road 111. At some point prior to Mr Dederer's dive, there had been put in place at each end of the bridge a large sign containing words to the effect of "fishing and climbing prohibited". In addition, Mr Keegan stated that he had been aware of "no diving" pictograms (featuring a representation of a diver with arms outstretched superimposed by a prohibitory bar) positioned on the bridge from at least the late 1980s. In 1995 the Council, using funds derived from the Block Grant Agreement, replaced these pictograms, although it seems that the new signs had themselves deteriorated. The signs were certainly in place on the day of Mr Dederer's dive from the bridge. He acknowledged that he had seen and understood the pictogram120. His candour in this respect was an important reason why the trial judge was generally willing to accept his evidence as truthful121. Mr Dederer had been prepared to make admissions against his own interest. Mr Keegan, like Mr Pevitt, was a resident of the Forster area. He too was well aware of the culture that had developed of children and young people 119 (2006) Aust Torts Reports ¶81-860 at 68,886 [110]. 120 (2006) Aust Torts Reports ¶81-860 at 68,882 [71]. 121 (2005) Aust Torts Reports ¶81-792 at 67,524 [18]. Kirby jumping from the bridge into the water. In fact, he knew that it had been happening for years. He gave evidence that he had "actually remonstrated with his own children for jumping from the bridge"122. He accepted that, from an engineering point of view, it would have been comparatively simple and cheap to install a triangular attachment to the top railing of the bridge such as existed on the railing of the balustrade on the approach to the bridge from the town of Forster. This could have been added to deter the use of the top railing as a launching platform for entry into the water. However, Mr Keegan said that no request had been made for such a modification. He had no budget from the Council for such work. And anyway, he regarded the bridge structure as the responsibility of the RTA123. Council's complaint to the RTA: The RTA, as a State-wide statutory authority, had no officer resident in the Forster-Tuncurry district. There were two officers identified as being conversant with signage issues within the area, but the RTA did not call them to give evidence. Instead, the RTA called Mr John Alexander, planning and analysis officer for the Hunter Region. He had only joined the RTA in 1998. It was by that stage clear that the RTA had been expressly put on notice of the dangerous practice of young people jumping from the bridge to the water below. On 28 January 1993, a committee of the Council resolved to express its concern to the RTA about this practice. On 11 February 1993, the Council sent a facsimile message to the works engineer of the RTA stating124: Problem currently being experienced with youths jumping into navigable channels from the higher parts of bridge. Danger to boating. Needs at least signs. Please advise." Mr Alexander stated that he was not aware of any response to the facsimile on the part of the RTA. In 1995, the Council replaced the pictogram signs on the bridge, as noted above. However, the new signs contained no information as to the special danger occasioned by the tidal character of the estuary and the shifting sands underneath the bridge. The RTA was, inferentially, aware of this danger by reason of its regular soundings of water depths. By 1995, alternative pictograms were 122 (2005) Aust Torts Reports ¶81-792 at 67,526 [34]. 123 (2005) Aust Torts Reports ¶81-792 at 67,526 [35]. 124 (2006) Aust Torts Reports ¶81-860 at 68,875 [12], 68,887 [113]. Kirby available to symbolise the dangers of shallow water. Moreover, pictograms could be accompanied by verbal warnings where these were specially called for. Indeed, the relevant Australian Standard stipulated that signage indicating the fact of "shallow water" should be used in conjunction with the "diving prohibited" pictogram where it posed a risk of serious injury to divers125. Changes to the bridge: In 1992, a new Austroads Standard had come into force. This incorporated the Austroads Bridge Design Code. Under the Code, vertical and not horizontal members were made the norm for new bridge railings126. Evidence was adduced for Mr Dederer that other bridges in the area such as that at Bulahdelah (and others further afield, including the Anzac Bridge in Sydney) featured vertical bars compliant with the new prescription. In the same year, wires attached to the northern bridge railings were found to be rusted. In mid-1993, the RTA released funds to allow the Council to replace the wires without any modification to the horizontal bars supporting them, even in the immediate area of the jumping platform. This was notwithstanding the introduction of the new Bridge Design Code, and the fact that the RTA had been put on express notice of the "problem" of people jumping from the bridge some three months earlier127. By 1995, the narrowness (and consequent dangerousness) of the pedestrian walkway along the northern side of the bridge had become a focus of local community concern. As part of its response, the RTA engaged a firm of design consultants. The firm considered a number of options for widening the walkway, each of which involved the erection of a new handrail, featuring vertical members, along the northern edge of the bridge. The cost of its preferred option was estimated at approximately $1 million. However, the estimated cost of the new handrail alone was a modest sum. By inference, modification of the handrail confined to the area known to be used for access to the water would have been significantly cheaper still. In the outcome, nothing was done about the structure of the walkway or the railing fence. Mr Alexander, although aware of the alarm expressed about the practice of youths jumping off the bridge in 1993, and the erection of (new) signs in 1995, was seemingly diverted into other concerns. When officers of the RTA inspected the bridge in April 1998, they too reported that people were still jumping off, and fishing from, the bridge notwithstanding the signs. By 125 See (2006) Aust Torts Reports ¶81-860 at 68,904 [244]-[245]. 126 (2005) Aust Torts Reports ¶81-792 at 67,531 [71]. 127 (2005) Aust Torts Reports ¶81-792 at 67,531 [71]. Kirby inference, the RTA working parties that engaged in maintenance of the bridge over the years128 would also have observed the practice. Although no specific written reports had been made to it of people diving from the bridge, the RTA was certainly aware of the ongoing problem (contrary to the law)129 of use of the bridge contrary to the pictogram signs it had paid for as the "least" response to the Council committee's expression of concern. The primary judge found that "the RTA has no policy or programme for dealing with this type of issue, and there is no funding allocated for such an issue"130. Even six years after the injury to Mr Dederer, an internal memo of the RTA, in relation to the "latest proposal", stated131: "It is our intention to remove the handrail and to construct with a new handrail. The new handrail will have a top and bottom RHS 100 x 50 x 5. The balustrades will be made from flat bar and will be centred at least 154 mm. The reason RTA have adopted a new design is to help prevent people jumping off the bridge. The existing handrail can easily be climbed over due to the middle rail. The proposed fence is more like a pool fence and is harder to climb over. RTA have taken this course of action as the authority is being sued by a man who jumped off the bridge and broke his neck when his head hit a sand bar". The fateful dive: Mr Dederer's fateful dive was not the first time he had entered the water from the bridge. On 30 December 1998, the day before his injury, he had spent time with his friend Mr Grant Cunial and others swimming at Forster beach adjacent to the Forster end of the bridge. On two occasions that day, he had jumped into the estuary. He first entered the water from the ledge at the base of the bridge platform. He then jumped from the flat top of the bridge handrail132, which he accessed by using the two horizontal railings in the fence below the upper railing. Effectively, these provided helpful steps to the point of departure from the bridge. On both occasions, Mr Dederer's body became totally submerged in the water below. His feet did not touch the bottom. He gave evidence that he saw other people jumping and diving from the bridge that day, including, he believed, an adult who dived. Nothing untoward happened to any of them. 128 (2006) Aust Torts Reports ¶81-860 at 68,888 [119] per Ipp JA. 129 Roads (General) Regulation 1994 (NSW), reg 17. 130 (2005) Aust Torts Reports ¶81-792 at 67,527 [39]. 131 (2005) Aust Torts Reports ¶81-792 at 67,527 [40]. 132 (2005) Aust Torts Reports ¶81-792 at 67,523 [10]. Kirby On the last day of 1998, Mr Dederer returned to the bridge with Mr Cunial. They crossed the bridge from the Forster side with the initial intention of jumping from the bridge later in the day. However, spontaneously, Mr Dederer made the easy climb again to the flat top of the rail, assisted by an adjacent light pole. He had previously had experience in elevated diving in a swimming pool. Initially, on this day, he had intended simply to jump from the bridge. However, as he described it133: "At that time, I was a cocky 14 year old. I was not going to dive but jump, but when I got up there I changed my mind." Mr Dederer said that he listened for any boats that might be approaching under the bridge. He stood on the platform for perhaps two or three minutes. He then proceeded into the water "almost straight, but at an angle". He said that this was similar to the angle at which he had seen other people dive from the bridge. He did not remember striking the water or hitting the bottom. However, he immediately became aware that he had lost feeling in the lower part of his body134. He was assisted from the water by Mr Cunial, who confirmed the description of the way the injury had occurred. Mr Cunial also confirmed that he "had seen persons (ranging from about 10 to 30 years old) jumping off the bridge at the channel near the Forster shore including diving, doing back flips, somersaults, 'peg-legs' and bombs"135. Mr Cunial had also been going to the area for holidays for years, in his case since 1992. The emerging claims: In presenting his claim against the RTA, a number of suggested contentions of negligence, raised at earlier stages for Mr Dederer, fell away. Thus, no claim was advanced on the basis that the RTA, as successor to the DMR, had been negligent in the initial design of the bridge. Nor did Mr Dederer press a claim that the RTA had failed to ensure that safety on the bridge was enforced by police or by its own guards. Nor did he press a suggestion that a cage of some kind or some other impediment should have been erected to break the culture of young people entering the water from the bridge. Ultimately, his case asserted that the RTA had opted for the most inexpensive, but ineffective, gesture of installing verbal and pictorial signs which were defective for failure to convey the particular nature of the risk to which persons like himself were exposed. Instead of this minimal approach, of whose ineffectiveness the RTA was on notice, Mr Dederer claimed that it should have undertaken (but had failed to undertake) three initiatives: 133 (2005) Aust Torts Reports ¶81-792 at 67,523 [12]. 134 (2005) Aust Torts Reports ¶81-792 at 67,523 [14]. 135 (2005) Aust Torts Reports ¶81-792 at 67,524 [20]. Kirby In addition to the existing pictogram, it should have provided further information, pictorial or verbal, concerning the reasons for the prohibition on diving, in particular that the shifting sands beneath the bridge, of which the RTA was aware, made entering the water from the bridge dangerous, and diving especially so; It should have modified the flat level railing that provided a virtual diving platform some 9 or 10 metres above the water level (subject to tidal variation). The flat railing plane should have been overlaid or replaced with a triangular surface to discourage use of the upper railing as a platform; and It should have removed, at least in the section of the bridge known to be used for entering the water, the horizontal railings which, adjacent to the light pole, afforded a very easy access to the upper railing. Vertical members should have been substituted so as to mimic some of the features of standard Australian swimming pool fencing. The need for such modification had been specifically and repeatedly brought to the notice of the RTA. The primary The conclusions below: judge essentially upheld Mr Dederer's submission that the response of the RTA to a known danger to persons such as himself had been ineffective and inadequate. He concluded that, in combination, the initiatives proposed by Mr Dederer would have prevented him from diving as he did. With some variations in respect of the language of the signage required, the majority in the Court of Appeal found no error in the primary judge's approach in this respect and affirmed it, upholding the consequential judgment against the RTA in Mr Dederer's favour. In this Court, Mr Dederer did not contest the unanimous conclusion of the Court of Appeal overturning his judgment at trial against the Council. The parties did not suggest that any statutory provisions apart from those referred to by the Court of Appeal affected the resolution of the issues before this Court. The RTA accepted that it owed a duty of care to Mr Dederer in the circumstances in which he was injured. However, it denied that it had breached that duty. Moreover, it submitted that any breach found had not caused, or materially contributed to, the injury that occurred. The issues In consequence of the foregoing description of the case, three issues arise in this Court: Breach of duty issue: The first is whether the Court of Appeal erred in failing to reverse the conclusion of the primary judge that Mr Dederer had Kirby established negligence on the part of the RTA in a way causative of his injury. As explained, this issue raises contested factual questions put in issue by each of the parties. Thus, the RTA contested the conclusion of the primary judge and the majority of the Court of Appeal that it had been aware of the risks not only of jumping but also of diving from the bridge over many years before Mr Dederer's injury. Mr Dederer sought to challenge the conclusion of the majority in the Court of Appeal that, even without a "no diving" pictogram, it should have been obvious to him that a dive was very dangerous and that the "no diving" pictogram, displayed on the bridge, impliedly warned against that danger. Apart from disputing such factual findings (and others), the RTA complained that the primary judge and the majority in the Court of Appeal had applied an incorrect legal test in concluding the contested issues of negligence in favour of Mr Dederer. In particular, the RTA argued that the majority judges had determined the issues of negligence from a standpoint of hindsight rather than foresight, ie as the facts would have been perceived before Mr Dederer's injury; Contributory negligence issue: In the event that the first issue is resolved in favour of Mr Dederer, the second issue is whether he should be granted special leave to challenge the Court of Appeal's reassessment of his contributory negligence at 50%. He submitted that the assessment of the primary judge of 25% should be restored, having regard especially to his age and inexperience and the widespread practice of jumping and diving that he had witnessed before he was injured. Special costs order issue: In the event that the first issue is resolved in favour of Mr Dederer, the third issue is whether he should be granted special leave to cross-appeal against the refusal of a special costs order obliging the RTA, as the defendant liable to him, to pay the costs of the Council, whose joinder was reasonable in the circumstances of the case. Negligence: the factual findings The RTA knew of diving: In its pleadings, the RTA made no admission that it knew, before Mr Dederer's injury, that children and other young persons habitually dived off the bridge. In argument in this Court, it conceded that the evidence sustained the conclusion below that jumping and diving had been occurring, but it maintained its claim that it was unaware of the diving. It is true that the documentary evidence produced by the RTA (and the Council) referred only to persons "jumping" from the bridge. Mr Keegan, who knew that children Kirby jumped from the bridge, was not aware of diving136. Mr Pevitt had never seen anyone dive137. The primary judge expressly found that Mr Keegan had been "aware for years that young persons have been in the habit of jumping and diving off the bridge and asserted it was common knowledge in the community". This does appear to be a slip in fact-finding. However, it was not one meriting the importance that Handley JA attributed to it. The real question is not whether a particular officer of the RTA or the Council was aware that children and young people were entering the water from the bridge. It is whether an inference was available to the courts below that the RTA was on notice that this was a risk inherent in the use of the bridge, and that such risk extended to diving as well as jumping. On that issue, as the majority judges in the Court of Appeal pointed out, there was ample evidence to sustain the primary judge's conclusion that the RTA was on notice both of diving and of the risk of diving. The evidence included: The fact that the RTA was aware that "no diving" pictogram signs had been erected on the bridge in 1995; The fact that, with exuberant children incontestably known by the RTA to be "jumping" from the bridge, the risk was present that jumping manoeuvres could easily turn into diving; The proof of regular visits to the bridge and its environs by officers of the RTA, including to perform routine maintenance on the bridge. It could be inferred that such visits would have alerted the RTA to the presence of children jumping and diving from the northern side of the bridge; The actual awareness of the RTA (from the regular water depth assessments it conducted) of the special risks involved in any form of descent into the water from the bridge, taking into account the manifest failure of the installed signs to suppress the practice, and the specific alert which the RTA had of the desirability of replacing the railings that, in providing a kind of diving or jumping platform, comprised an allurement to children and young people; and 136 (2006) Aust Torts Reports ¶81-860 at 68,875 [18], referring to (2005) Aust Torts Reports ¶81-792 at 67,526 [34]. 137 (2006) Aust Torts Reports ¶81-860 at 68,876 [19]. Kirby The fact that the RTA omitted to call in its case the two officers (Messrs Saxby and Selway) said by its witness Mr Alexander to be much more familiar than he was with signage and other measures appropriate to the bridge in the circumstances. On this issue, in my opinion, Tobias JA was correct to say138: "[G]iven the knowledge of Mr Alexander and, therefore, the RTA that for children to jump from the bridge was dangerous and that diving from the bridge was a fortiori dangerous … it is but a small step to conclude that, with the knowledge that children continued to dive from the bridge in circumstances where the water below (depending upon tidal influences) was of variable depth and at times quite shallow, it would be reasonably foreseeable that at low tide in particular, when the water was shallow on the one hand and the height between the railing and the surface of the water is some 9-10 metres on the other, sooner or later a child would dive in a manner resulting in serious injuries. As I have indicated, I would regard such a conclusion as a matter of common sense." The signage was incomplete: The RTA also complained about what it suggested was the invention of the signage that it should have put in place by the primary judge and the majority of the Court of Appeal. With Handley JA139, the RTA asked, in effect: if Mr Dederer read and understood the two signs (verbal and pictorial) put in place to prevent the type of action that he then took, how could it reasonably be inferred that any other or different sign or notice would have restrained him from diving from the bridge to the water below? The specific complaint of Mr Dederer was that the pictogram sign actually used by the RTA did not (as it might have done) signal the specific danger of shallow water arising from tides and sand movements. The expert called in Mr Dederer's case, Mr Robert Fogg, acknowledged that either the "no diving" or "shallow water" pictogram would have been appropriate, whilst expressing a preference for the latter. Inferentially, this preference was attributable to the additional relevant information which a warning about shallow water gave to those potentially inclined to use the bridge for the purpose of entering the water. One possible interpretation of the prohibition of climbing on, and diving from, the bridge was that, like the prohibition of fishing, it was directed (as the facsimile message that the Council sent to the RTA itself suggested) to protecting 138 (2006) Aust Torts Reports ¶81-860 at 68,918 [340]. See also at 68,900 [212]-[214] per Ipp JA. 139 (2006) Aust Torts Reports ¶81-860 at 68,879 [43]. Kirby boats using the channels beneath. Neither the verbal sign nor the pictogram communicated the essential fact of greatest importance for self-protection to those tempted to jump or dive. Mr Dederer answered questions on this issue: "Q: Now you'd agree wouldn't you Mr Dederer, if a sign told you that you were not permitted to dive, another sign which told you that warned you against diving would be of no purpose? No I disagree. Q: Well once you're told not to dive that's the end of it isn't it? A: Well, 14 year olds you're always curious. If you [see] one sign that says yeah you shouldn't and then you see another sign that shows you the danger why you shouldn't, the one that shows you the danger is most likely going to affect you the most. I see, you're saying that now with the benefit of hindsight, aren't you? Yes. Is what you're saying that you agree with me that this sign would tell you that if you dive from this location there was a risk that before your full body entered the water half of it would enter and your head would hit the bottom? I don't believe I would have looked at it in that degree. I believe I would have looked at it and seen that it was just shallow water. I don't think I would've started looking at where the water is at the person on the sign … I would have just looked at it as in it's shallow water, I wouldn't have judged saying alright well it must be just half a body length. This sign [the 'shallow water' pictogram] would've meant nothing to you, wouldn't you agree at this location? It would've told me danger yes." At no point was it put to Mr Dederer that the evidence that he had given in his own case in this respect was false. In that evidence he had also said: Kirby "Q: … I'll just have you look at this [the 'shallow water' pictogram]. Are you able to tell us what message that sign would send to you? That's shallow water and if you dive you will hit bottom. And if such a sign had been erected on the bridge on the day that you were there, the day of your accident, what would your attitude have been to diving from the bridge? I wouldn't have dived because I would have – it would show me that it was shallow water." Evidence of such a kind is not necessarily decisive. It involves a response that, on one view, a person in the position of Mr Dederer could be expected to give. However, it assumes significance in the present case because, for the reasons which he gave, the primary judge was prepared to accept Mr Dederer as an honest witness, trying to give truthful answers to the court. Clearly, it was open to the primary judge to accept or reject Mr Dederer's evidence in this respect. He accepted it. Once that occurred, the RTA faced serious difficulties in overcoming that finding and in obtaining from an appellate court, which never saw or heard Mr Dederer, the opposite conclusion. Further, in the light of the demonstrated fact that the form of the warning sign paid for by the RTA was certainly in issue at the trial, and given further the expert evidence concerning the various pictograms that might have been used, together or in combination and with or without verbal supplementation, there is no substance in the RTA's complaint that successively the primary judge and the majority in the Court of Appeal invented forms of signage which had not been properly litigated at trial. It was Mr Dederer who complained that the RTA's pictogram did not convey to him the critical information specifically known to the RTA about the shallowness and variability of the water levels below the bridge, especially when the tide was receding or low. This point having been made in Mr Dederer's case, it was clearly open to the primary judge, and then to the Court of Appeal, to consider amongst the signs on offer, or by analogy to them, the type of sign that could have conveyed, in pictures and/or words, the critical information concerning the specific danger that diving from the bridge entailed. The RTA's failure to respond: It was also open to the primary judge and the majority in the Court of Appeal to conclude, on the evidence, that the "least" measure (which is all that the RTA took, despite its knowledge of the constant and frequent use of the bridge as a platform for jumping) was proving ineffective to prevent such use because the use clearly continued. To the extent that the RTA's complaint about the sign which the primary judge proposed was that it was not one of the standard pictograms nor one supported by expert evidence, this criticism was met by the sign ultimately preferred by the majority in the Kirby Court of Appeal. This was a pictogram with the symbol for prohibited diving and the addition of the verbal warning "shallow water". As Ipp JA said140: "[This sign] would provide an express reason for the prohibition and indicate the dangers of diving from the bridge. I would observe that the words 'shifting sands', if added to the words 'shallow water' would make the nature of the danger even clearer." In seeking to modify behaviour in the face of a known danger, interdiction, on its own, is likely to have less practical utility and effect than when combined with relevant information explaining its purpose and seriousness. Because Mr Dederer did not challenge in this Court the unanimous conclusion of the Court of Appeal adverse to his claim against the Council, the particular factual findings which he sought to contest by his notice of contention do not need to be decided as relevant to his claim to recover for the negligence of the RTA. Those findings are, however, relevant to his challenge to the reassessment of contributory negligence. They will be dealt with in that context. Conclusion: no factual errors: The result is that the complaints of the RTA concerning factual findings are not sustained. No error is demonstrated to warrant the intervention of this Court or the correction of the reasons and orders of the Court of Appeal. Negligence: breach of the duty of care The RTA's case on breach: In resisting liability, the RTA substantially endorsed the reasoning of Handley JA in the Court of Appeal. On the issue of breach, it pointed out that it had installed a sign that Mr Dederer's expert regarded as appropriate (although not preferable); the installation of a cage was not feasible; there had been no serious accident in 39 years; its chief concern was pedestrian safety on the bridge; control of youthful jumping had proved impossible and some degree of individual autonomy and responsibility was to be expected; Mr Dederer was generally aware of the character of the estuary; and, in any case, the RTA had many State-wide responsibilities. On the basis of such arguments, the RTA contended that the provision of the notices was a reasonable and proper discharge of its duty of care to a person such as Mr Dederer. The principle in Shirt: It was common ground between the parties that the critical legal analysis to be applied to the circumstances was that stated by this 140 (2006) Aust Torts Reports ¶81-860 at 68,904 [246]. Kirby Court in Wyong Shire Council v Shirt141. The principles expressed by Mason J in that decision142 have been applied in countless cases in this and other Australian courts since they were expressed. The attempt in New South Wales v Fahy143 to have this Court reconsider its authority in Shirt was rejected. An important aspect of the Court's reasoning in Fahy, both amongst those who were part of the majority and those who dissented, was an emphasis on the nuanced character of the approach explained in Shirt; the fact that the formula there stated is not mathematical in its application; and the fact that it permits a decision-maker, considering what a reasonable person would do by way of response to a foreseeable risk, to reach a conclusion that, in the particular circumstances of the case, it might indeed be that "nothing" or nothing more is required144. Like many decisions before it, Fahy emphasised that the formula in Shirt "does not focus only upon how the particular injury happened. It requires looking forward to identify what a reasonable person would have done, not backward to identify what would have avoided the injury"145. With these freshly restated principles in mind, it is relevant once again to remember the passage in Shirt explaining how a problem such as that now before this Court should be approached146: "[T]he tribunal of fact must first ask itself whether a reasonable man in the defendant's position would have foreseen that his conduct involved a risk of injury to the plaintiff or to a class of persons including the plaintiff. If the answer be in the affirmative, it is then for the tribunal of fact to determine what a reasonable man would do by way of response to the risk. The perception of the reasonable man's response calls for a consideration of the magnitude of the risk and the degree of the probability of its occurrence, along with the expense, difficulty and inconvenience of taking alleviating action and any other conflicting responsibilities which the defendant may have. It is only when these matters are balanced out that 141 (1980) 146 CLR 40. 142 (1980) 146 CLR 40 at 47-48. 143 (2007) 81 ALJR 1021 at 1026 [7], 1038 [78], 1046-1049 [119]-[133], 1065 [241]; cf at 1064 [225]. 144 (2007) 81 ALJR 1021 at 1034-1035 [57]-[58], 1046 [123]; cf Thompson v Woolworths (Q'land) Pty Ltd (2005) 221 CLR 234 at 246-247 [36]. 145 (2007) 81 ALJR 1021 at 1034 [57]. 146 (1980) 146 CLR 40 at 47-48. Kirby the tribunal of fact can confidently assert what is the standard of response to be ascribed to the reasonable man placed in the defendant's position." Correct application of Shirt: The Court of Appeal majority considered the challenge to the primary judge's decision in favour of Mr Dederer, giving proper attention to the foregoing instruction. As well, the majority gave due consideration to later decisions of this Court concerning warning signs in the context of diving injuries147. There is no indication that the majority overlooked the holdings of this Court on the approach to be taken to problems of the present kind. To the contrary, the relevant authorities were cited and accurately applied. Nevertheless, as Gleeson CJ pointed out in Fahy, citing what Alderson B said in Blyth v Birmingham Waterworks Co148 as long ago as 1856149: "'Negligence is the omission to do something which a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something which a prudent and reasonable man would not do.' Reasonableness is the touchstone, and considerations of foreseeability and risk avoidance are evaluated in that context." There is no indication in the majority reasons in the Court of Appeal that Ipp JA or Tobias JA overlooked any of the strictures against mechanistic reasoning or hindsight analysis contained in Fahy and in the other cases to which reference is made in their Honours' reasons. They could scarcely have fallen into such a basic error of reasoning in the light of the strongly expressed dissenting reasons of Handley JA. There being no misapprehension or oversight of the applicable law, the question is whether the majority in the Court of Appeal nevertheless reached a conclusion on the breach of duty issue that indicates error and warrants the intervention of this Court. Having identified the ambit of the RTA's duty of care150 and affirmed the primary judge's conclusion that the RTA knew of the continuing practice of 147 Nagle v Rottnest Island Authority (1993) 177 CLR 423; Vairy v Wyong Shire Council (2005) 223 CLR 422. See (2006) Aust Torts Reports 81-860 at 68,894 148 (1856) 11 Ex 781 at 784 [156 ER 1047 at 1049]. 149 (2007) 81 ALJR 1021 at 1026 [7]. 150 (2006) Aust Torts Reports ¶81-860 at 68,896 [183]-[184]. Kirby children and young people jumping or diving off the bridge (a finding sustained for the reasons already stated)151, Ipp JA analysed, prospectively, what, armed with such knowledge, the RTA ought reasonably to have done. Into the equation, Ipp JA added the knowledge that the RTA had gathered over the years about the sand movements and variable depth of the river bed beneath the bridge152. He also considered its inferred knowledge of the changeable drop from the bridge to both the water surface and the river bed, dependent upon tides153. Further, he noted that "[t]he RTA knew or ought to have known that particularly in the summer months, jumping and diving was occurring with startling frequency, involving at times, groups of young people every five or ten minutes, with a group capable of comprising 10 to 15 children aged 10 years to 16 years"154. The signs were useless: Added to this factual matrix was the realisation, which Ipp JA reasonably attributed to the RTA, that the prohibitory signs that were in place "were, in a word, useless"155. He concluded that, having been alerted to the dangers of children jumping from the bridge structure, the RTA should "have ascertained whether the pictograph signs were proving effective. On that basis, the RTA ought to have known that they were not"156. It is against this backdrop that Ipp JA addressed the reasonableness of the RTA's response to the clearly established risk to persons such as Mr Dederer157. Correctly, his Honour rejected the suggestion that the RTA was excused from action simply because no significant injury had previously occurred158. Handley JA's suggestion that the absence of prior injuries might demonstrate the effectiveness of the existing signs159 was contradicted by the obvious fact that the 151 (2006) Aust Torts Reports ¶81-860 at 68,897-68,899 [185]-[204]. 152 (2006) Aust Torts Reports ¶81-860 at 68,899 [205]-[210]. 153 (2006) Aust Torts Reports ¶81-860 at 68,900 [211]. 154 (2006) Aust Torts Reports ¶81-860 at 68,900 [214]. 155 (2006) Aust Torts Reports ¶81-860 at 68,900 [219]. 156 (2006) Aust Torts Reports ¶81-860 at 68,900 [220] citing Brodie v Singleton Shire Council (2001) 206 CLR 512 at 585 [180]. 157 (2006) Aust Torts Reports ¶81-860 at 68,900 [221]. 158 (2006) Aust Torts Reports ¶81-860 at 68,902 [231]. 159 (2006) Aust Torts Reports ¶81-860 at 68,878 [35]-[36]. Kirby signs were repeatedly and frequently ignored by a class of persons such as Mr Dederer, children and youths, who were amongst those most at risk. The foregoing made it important that the RTA should respond to its demonstrated knowledge of the sources of the risk of which it was aware by taking accident prevention measures beyond mere reliance on signs, which can never be an "automatic, absolute and permanent panacea" for that purpose160. Both Ipp JA (with whom Tobias JA agreed) and the primary judge concluded that reasonable steps involved the installation of a sign with a combination of symbols and words161. The RTA's reliance alone on a sign of unexplained prohibition was inadequate. Although he rejected the primary judge's conclusion that the pictogram should have addressed the specific problem and contained the warning "Danger, shifting sands, variable depth" (which was described in argument as a product of "judicial engineering"), Ipp JA upheld Mr Dederer's contention in the Court of Appeal that a specific warning of "shallow water" should have been added to the pictogram to make "the nature of the danger even clearer"162. The use of such a verbal warning together with a symbol – especially if placed near where children and young people were frequently seen to be entering the water from the bridge – would have been a reasonable response, in terms of signage. Questions of resources would scarcely come into such a modification. What was needed was something more than the "least" response to the problem which the Council committee drew to the notice of the RTA. This was not a case (as often occurs) where there was no warning or complaint about the risk that eventuated. Here, warnings and expressions of concern about the activities of children on the bridge were specifically drawn to the notice of the RTA. It was aware of them. What was needed was that someone in the RTA should consider the problem and do something effective about it. Ipp JA dealt in a convincing way with the lack of cogency of the excuse about the "availability of resources", with the justiciability of Mr Dederer's contentions and with the RTA's passing concentration on the need to upgrade the 160 (2006) Aust Torts Reports ¶81-860 at 68,903 [233] per Ipp JA, citing Waverley Council v Lodge (2001) 117 LGERA 447 at 459 [35] per Bryson J (Meagher and 161 (2006) Aust Torts Reports ¶81-860 at 68,903-68,905 [236]-[251]; (2005) Aust Torts Reports ¶81-792 at 67,530-67,531 [69]-[70]. 162 (2006) Aust Torts Reports ¶81-860 at 68,904 [246]. Kirby walkway and the suggested lack of resources available to it for that purpose163. The fact that there was community concern over other aspects of the safety of the bridge did not relieve the RTA of its obligation to address reasonably the notice it had received about the particular risks to young persons jumping from its structure. More than signs needed: Given the fact that the existing signs were ineffective to deter or prevent children diving from the bridge, Ipp JA supported, apart from improved signage, the two further initiatives which the primary judge had held that the RTA should have taken. In doing so, he gave effect to the observation of the Privy Council in Southern Portland Cement Ltd v Cooper that164: "[S]o far as their Lordships are aware no difficulty was ever felt in holding that, in a case where any warning would have been ineffective, the occupier was bound to do a good deal more than merely give warning." First, Ipp JA favoured the modification of the flat top of the upper railing of the bridge, which afforded an allurement to children tempted to use that railing as a platform for entry into the water165. The installation of a triangular surface would have been inexpensive. A similar surface is shown in a photograph in evidence of the balustrade leading to the bridge. Ipp JA acknowledged that such a modification would not, of itself, prevent access to the water from the bridge166. However, for a relatively insignificant amount of money, it would have diminished or removed what, unaltered, both facilitated and encouraged the kind of activities drawn to the RTA's attention in February 1993. Secondly, Ipp JA accepted the opinion of the primary judge that the horizontal railings should have been removed and replaced with vertical pool- type railings167. At the least, this should have been done in the section of the bridge which was obviously presenting an allurement to the children and young 163 (2006) Aust Torts Reports ¶81-860 at 68,907 [266], 68,907-68,910 [268]-[279], 164 (1973) 129 CLR 295 at 308 per Lord Reid; [1974] AC 623 at 643. 165 See Munnings v Hydro-Electric Commission (1971) 125 CLR 1 at 35 per 166 (2006) Aust Torts Reports ¶81-860 at 68,905 [257]. 167 (2006) Aust Torts Reports ¶81-860 at 68,906 [260]-[261]. Kirby people who were using it as a platform for jumping and diving. Specifically, Ipp JA endorsed the comment of the primary judge168: "Pool fences have been around for many years and there is no reason why such a structure could not have been installed earlier." Three developments, noted in the evidence, lend strength to Ipp JA's conclusion. The first was the introduction of the new Bridge Design Code in 1992, of which the RTA was aware. The second was the opportunity provided in 1993 by the replacement of wire in the area of the horizontal railings which afforded such ease of access to the flat upper railing. The third was the growing familiarity of the Australian community with the special need to protect young people in the vicinity of water. If it was good enough to impose such an obligation on domestic pool owners, in all of their variety and with their many different means, it was not unreasonable, at least from the 1990s, to expect a similar sense of responsibility on the part of a public authority which had been alerted to the special dangers and risks to young persons in the use of a structure for which it was responsible. Clearly Ipp JA and Tobias JA so concluded. That conclusion was open to them. Conclusion: no error on breach: It follows that the majority in the Court of Appeal did not err in holding that the RTA did not apply its mind to the question of whether it should remedy the dangers which its bridge presented to children and young persons who were attracted to use it as a platform for jumping and diving. The RTA did not give any, or any reasonable, consideration to the fact that because of its position, construction and configuration in relation to the water below, the bridge presented special dangers, particularly to children and young persons169. With respect, I do not agree that an allurement to children is a defendant's responsibility only if that party encourages the alluring feature170. This is not how allurement has been dealt with in the past. Allurements often arise in run-down, abandoned or disused premises. The question is not one of encouragement. It is one of foresight and responsibility. This was not a case, as the RTA suggested, of wisdom after the event. Instead, it was well open to the majority in the Court of Appeal to conclude, with the primary judge, that it was an instance of an "accident waiting to happen"171. 168 (2006) Aust Torts Reports ¶81-860 at 68,906 [260], quoting (2005) Aust Torts Reports ¶81-792 at 67,531 [73]. 169 (2006) Aust Torts Reports ¶81-860 at 68,913 [300]. 170 cf reasons of Gummow J at [64]. 171 (2006) Aust Torts Reports ¶81-860 at 68,912 [293], 68,919 [342]. Kirby Moreover, the RTA was put on specific notice of the accident risk, if in no other way, by reason of the communication to it on behalf of the Council committee in February 1993. The approach of the majority of the Court of Appeal on the issue of breach of duty disclosed no error of legal analysis or of factual conclusion. The opinion of the majority that the RTA breached its duty of care to Mr Dederer should be affirmed. Negligence: causation The RTA's case on causation: This leaves the alternative basis upon which the RTA challenged the conclusion of the majority of the Court of Appeal. Essentially, the RTA supported, in this respect also, the dissenting reasons of Handley JA. Those reasons sought to take apart the elements of the preventive measures urged for Mr Dederer and to suggest that, even if they had been taken, they would not have avoided the injury that occurred172. So far as the signage was concerned, the RTA submitted that a youth of Mr Dederer's age, who would "deliberately" ignore the sign which he had read and understood as prohibiting diving, would not be likely to obey a different sign, whether it contained words or symbols or a combination of both. Similarly, the RTA submitted that the suggested triangular section on the top of the handrail would not ultimately have prevented Mr Dederer from standing there. It might even have added a frisson of challenge. The vertical railings would likewise not have barred physical access to the bridge. In the case of a tall youth, such as Mr Dederer, the momentary difficulty of securing access to a chosen diving platform on the bridge would readily have been overcome. These arguments convinced Handley JA. However, the majority reasons, once again, are to be preferred. The primary judge's conclusions: As Ipp JA correctly pointed out, conclusions on questions of causation demand the drawing of sensible inferences, including on the basis of hypothetical facts that, by definition, have not occurred. Responding to such questions depends very much on the assessment of the character and personality of the plaintiff and what he or she would have done had other and different precautions been taken by the defendant173. Trial judges' assessments of such matters are conventionally given considerable respect by appellate courts, called upon to reconsider conclusions reached at trial on nothing 172 (2006) Aust Torts Reports ¶81-860 at 68,880 [50]. 173 Rosenberg v Percival (2001) 205 CLR 434 at 447 [36]. Kirby more than a transcript and their own assessment of how individuals, whom they have never seen or heard, would react to changed circumstances174. These observations do not deny the right and duty of an appellate court to discharge its own functions, as statute envisages. Nor do they revive an exaggerated deference to trial assessments which reasonably appear to defy appellate commonsense. However, for reasons given, the primary judge formed a good opinion of Mr Dederer's truthfulness as a witness. It was open to him, on the basis of Mr Dederer's oral evidence concerning the effect of a more informative sign alone, to conclude that causation was established. That conclusion is reinforced by the fact that the RTA failed, over an extended period and although on notice, to take the other measures that the primary judge and the Court of Appeal concluded it should have. In these circumstances, no error is demonstrated in the conclusion of Ipp JA (Tobias JA concurring) that175: "Taking into account the fact that Mr Dederer dived after changing his mind, and, moreover, on impulse, I think that, had the RTA altered the signs as I have proposed, modified the top railing, and installed pool-type fencing, it is probable that Mr Dederer would not have dived as he did and he would not have sustained his injuries." The reference in this passage to the momentary indecision and to the last- minute initiative of Mr Dederer to dive, rather than jump, is an answer to Handley JA's statement that the injury was the result of a "deliberate" act on Mr Dederer's part176. That characterisation of Mr Dederer's actions seriously overstates the will that is to be attributed to him in the circumstances disclosed by the uncontested evidence. Further, as Tobias JA pointed out in his reasons, in matters of causation "we are dealing with probabilities and not certainties" and "[t]here was no suggestion that [Mr Dederer] was of reckless or unthinking disposition"177. To picture Mr Dederer as a person blindly fixed upon a course of defying the signs on the bridge is not fairly to reflect his conduct which, according to the evidence, was not so different from that of many other young people, acting with holiday enthusiasm. The RTA's response to the risk that such conduct presented was minimal, ineffective and apparently lacking in proper consideration. More was required of a public authority. In particular this was so because the RTA had 174 Fox v Percy (2003) 214 CLR 118 at 127 [26]. 175 (2006) Aust Torts Reports ¶81-860 at 68,915 [315]. 176 (2006) Aust Torts Reports ¶81-860 at 68,879 [43]. 177 (2006) Aust Torts Reports ¶81-860 at 68,923 [370], [372]. Kirby been specifically warned of substantial and ongoing danger to many children in a popular holiday resort in connection with a bridge under its control. Conclusion: no error on causation: It follows that I cannot, with respect, agree with the opinion178 that the preventive measures suggested for Mr Dederer would not have been effective. That opinion is contrary to findings of the primary judge, who had advantages on this issue that this Court lacks. It disregards Mr Dederer's own evidence without warrant to do so. And it effectively condones the attitude of neglect and inactivity by the RTA which was inconsistent with the principles and purposes of the law of negligence. In the result, the conclusion of the majority of the Court of Appeal on the issue of causation is unattended by error. It too should be affirmed. Accordingly, Mr Dederer's judgment against the RTA should stand. Negligence: reversing concurrent findings of fact I accept that, in a final court such as this, no legal principle bars the court from reversing a conclusion based on concurrent findings of fact made by the primary judge and confirmed by the intermediate court. Whatever might have been the opinion of the Privy Council or the earlier practice of this Court, it cannot prevail against the statutory and constitutional functions that we possess179. To this extent I agree in the approach of Heydon J as to the jurisdiction and power of this Court to reach, and give effect to, contrary factual conclusions180. No principle of law or judicial practice stands in the way181. Nevertheless, more than a passing nod is required to a sense of "trepidation" against interfering in concurrent findings of fact182. Reasons in this Court in recent times have repeatedly explained why this is so183. It is not 178 Reasons of Gummow J at [75]-[77], reasons of Callinan J at [275]-[276]. 179 Warren v Coombes (1979) 142 CLR 531 at 551 explained in Woods v Multi-Sport Holdings Pty Ltd (2002) 208 CLR 460 at 495-496 [112]-[114]. 180 See reasons of Heydon J at [293]. 181 cf reasons of Gleeson CJ at [5] and see Louth v Diprose (1992) 175 CLR 621 at 182 Reasons of Heydon J at [287]. 183 cf Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 205 CLR 254 at 274 [58]; Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540 at 634 [262]; Aktiebolaget Hässle v Alphapharm Pty Ltd (2002) 212 CLR 411 at 447-448 [95]; (Footnote continues on next page) Kirby ordinarily the function of this Court to perform the tasks of fact-finding and factual review. The Court lacks advantages that other courts possess in this respect. Under the Constitution, the "appeal" we hear has been held to be a strict "appeal", concerned with error. It is not an appeal by way of rehearing, still less a trial184. These considerations and others as to the appropriate and seemly deployment of the time and functions of a final court combine to make such a court properly reluctant to condescend to substitute different conclusions on factual questions. Apart from anything else, such factual decisions cannot be further appealed if errors of fact or appreciation are revealed for the first time in the final court's opinion. It is for these reasons that a clear case of error is needed for interference in concurrent findings of fact made below. The present appeal is far from such a case. All that has occurred is the substitution of different factual opinions, in harmony with a trend that I have earlier called to notice185. That trend reflects a retreat from communitarian concepts of mutual legal responsibility and from concern with accident prevention. It evidences an attitude to the claims of plaintiffs and to the law of negligence that I cannot share. Contributory negligence The Court of Appeal's intervention: Two subsidiary questions arise. The first concerns the issue of contributory negligence and the unanimous decision of the Court of Appeal to double the discount on this basis to 50% of the verdict otherwise recoverable from the RTA186. In the Court of Appeal, the RTA raised the quantification of the reduction for contributory negligence, on the assumption that Mr Dederer was entitled to recover against it. In this Court, Mr Dederer sought special leave to cross-appeal so as to have the apportionment ordered by the primary judge restored. Nominal Defendant v GLG Australia Pty Ltd (2006) 80 ALJR 688 at 702 [74]; 225 ALR 643 at 660; Fahy (2007) 81 ALJR 1021 at 1052 [153]. 184 Mickelberg v The Queen (1989) 167 CLR 259 at 267. 185 Cole v South Tweed Heads Rugby League Football Club Ltd (2004) 217 CLR 469 at 499-500 [107]; Neindorf v Junkovic (2005) 80 ALJR 341 at 346-347 [19]-[20], 359-360 [84]-[85]; 222 ALR 631 at 635-636, 653; Fahy (2007) 75 ALJR 1021 at 186 (2006) Aust Torts Reports ¶81-860 at 68,874 [1], 68,915 [320]-[321], 68,916 [325]. Kirby This Court has said many times that appellate courts must show restraint in disturbing the apportionment ordered for contributory negligence as between a their respective shares of plaintiff and a defendant, having regard responsibility for the damage187. The point is self-evident. Involved in such an apportionment is a comparative examination of the whole conduct of each negligent party in relation to the circumstances of the accident and an evaluation of the comparative importance of the respective acts and omissions of the parties in causing the damage. Such decisions are evaluative and multi-factorial. Generally speaking, a trial judge, who has full knowledge of all of the evidence, will be in a better position to make such an apportionment correctly. An appellate court, even if it would have reached a different conclusion, will usually be hard pressed to identify an error that warrants disturbance of the primary judge's conclusion on such an issue. Tinkering with apportionments is to be discouraged. On the other hand, an intermediate appellate court is required by its statute to discharge its own functions of appellate review. If error is shown in the apportionment, it is not only entitled but obliged to set the apportionment aside and to substitute its own decision188. In a proper case, this Court will uphold the intermediate court's determination in that regard189, although sometimes it will be divided over where the correct line is to be drawn. Criticisms of appellate conclusion: For Mr Dederer, a number of criticisms were advanced of the decision of the Court of Appeal to disturb the primary judge's apportionment in this case. First, it was said, with some justification, that the treatment of this issue, of great significance to Mr Dederer, was extremely brief, especially by comparison to the very detailed analysis of the negligence issues that had gone before. Mr Dederer complained of a lack of reasoning to justify doubling the measure of his responsibility for his damage and the lack of a convincing analysis of the respective conduct of the RTA and himself in causing that damage. Secondly, Mr Dederer pointed to the specific advantages which the trial judge had enjoyed in his case, including the conduct of a view of the bridge and estuary which was not undertaken by the Court of Appeal. As against this, the primary judge accepted that it was impossible, on a view conducted many years 187 Pennington v Norris (1956) 96 CLR 10 at 15-16; Podrebersek v Australian Iron and Steel Ltd (1985) 59 ALJR 492 at 494; 59 ALR 529 at 532. 188 Fox v Percy (2003) 214 CLR 118 at 127-128 [27]-[29]. 189 Liftronic Pty Ltd v Unver (2001) 75 ALJR 867 at 879 [65]; 179 ALR 321 at 336. Kirby after the event, to re-create exactly the circumstances of the moment of Mr Dederer's injury190. Thirdly, Mr Dederer pointed to an element of tension in the majority reasoning in the Court of Appeal. For the purpose of determining the issue of negligence and meeting, in that context, the assertion that the danger of diving was obvious, the Court of Appeal emphasised Mr Dederer's age and the spontaneous, unconsidered character of his last-minute decision to effect a dive. On the other hand, when it came to the determination of the application of the Civil Liability Act to the claim against the Council and the apportionment for contributory negligence, emphasis was placed on the obviousness of the risk of a dangerous recreational activity engaged in by him191. The conclusion was open: As against these criticisms, the treatment of contributory negligence by Ipp JA (with whom on this issue Handley JA and Tobias JA agreed) followed immediately a most detailed examination of all of the facts of the case essential to a decision on the negligence issues. This was an appeal which could not have been decided, either in the Court of Appeal or in this Court, without the most painstaking examination of the facts. That was clearly undertaken by all of the members of the Court of Appeal. A separate statement or repetition of the facts to determine that part of the RTA's appeal which challenged the apportionment of contributory negligence was not essential. The alteration ordered by the Court of Appeal was certainly not subject to the criticism of tinkering. Obviously, all of the judges considered that the primary judge had erred, if only in the innominate way of reaching a conclusion which, in their view, was plainly wrong. There were many facts in the evidence at trial that made that conclusion available to the Court of Appeal. Although Mr Dederer was only fourteen and a half years of age, the evidence showed that he was an experienced diver. He would have known that a safe dive always requires water of adequate depth. He acknowledged that, notwithstanding visual inspection and the recollection of seeing other children entering the water, he was not aware of the actual depth into which he plunged. He was aware of the signs placed on the bridge and of the prohibition which each entailed. Whilst the standard of care that could be expected of him was only that of an ordinary person of his age192, even a much younger Australian child with less experience of diving would have known that serious risks were involved in proceeding as Mr Dederer did. 190 (2005) Aust Torts Reports ¶81-792 at 67,524 [19]. 191 See (2006) Aust Torts Reports ¶81-860 at 68,891-68,892 [148]-[150], discussing Civil Liability Act 2002 (NSW), ss 5L, 5K. 192 McHale v Watson (1964) 111 CLR 384 at 397 per Windeyer J. Kirby Conclusion: apportionment stands: It follows that a conclusion of error on the issue of contributory negligence was open to the Court of Appeal. In a full appeal by way of rehearing, I might not myself have concluded that the primary judge's view of contributory negligence was wrong. That is not the present question. The principles of restraint which limit intermediate courts' interference in apportionments of this kind are even more clearly applicable to any disturbance by this Court of the new apportionment unanimously arrived at by the Court of Appeal. That Court's apportionment of 50% for contributory negligence is not attended by doubt, and no new point of principle is raised by the challenge. Special leave to cross-appeal on this issue should therefore be refused. Mr Dederer's additional proposed ground of cross-appeal, complaining that the Court of Appeal erred in holding that a reasonable fourteen and a half year old boy should have appreciated that it was highly dangerous to dive as he did, must also be rejected. Costs: Sanderson order How the issue arose: The final issue before this Court relates to the second aspect of Mr Dederer's application for special leave to cross-appeal. It concerns a costs order made by the Court of Appeal in consequence of its determination that the judgment that Mr Dederer recovered at trial against the Council should be set aside. Initially, Mr Dederer brought his proceedings solely against the RTA. The Council was not joined as a defendant to the action until 22 September 2003. At the time the proceedings were initiated against the RTA, the Civil Liability Act had not commenced. However, by the time the Council was joined, that Act was in force193. It exempts defendants from liability in negligence for harm suffered by a plaintiff "as a result of the materialisation of an obvious risk of a dangerous recreational activity engaged in by the plaintiff"194. Although the primary judge rejected the Council's defence based on the Civil Liability Act on the footing that the risk would not have been obvious to Mr Dederer, even if it would have been to a mature adult195, that decision was unanimously reversed by the Court of Appeal. As stated, that conclusion was not challenged in this Court. Necessarily, it meant that Mr Dederer was ordered to 193 (2006) Aust Torts Reports ¶81-860 at 68,891 [146] per Ipp JA. 194 Civil Liability Act 2002 (NSW), s 5L. See (2006) Aust Torts Reports ¶81-860 at 195 (2005) Aust Torts Reports ¶81-792 at 67,533 [87]. Kirby pay the Council's costs, arising both from the trial and from its successful appeal. Self-evidently, such costs would be substantial. Obviously, they would diminish any recovery by Mr Dederer, itself already reduced by the reapportionment for contributory negligence. Normally, this Court will not become involved in disputes over costs. This is because, of their nature, such disputes usually involve large discretionary considerations, insusceptible of principled appellate review, especially in a final court. On the other hand, cases arise where this Court's intervention is warranted because the misapplication of a relevant consideration results in an erroneous order196. Mr Dederer urged that this was such a case. Moreover, the fact that the order in question, with its large practical consequences for the parties, was first made by the Court of Appeal means that the appeal to this Court, if special leave were granted, would be the first and only opportunity for its appellate reconsideration. Principle governing special orders: In the Court of Appeal, Mr Dederer sought what Ipp JA described as "a Sanderson order (that is, an order by which an unsuccessful defendant is ordered to pay the costs of the successful defendant directly to that defendant)"197. As his Honour pointed out, the Sanderson order is a type of Bullock order, although the latter involves the unsuccessful defendant being ordered to pay to the plaintiff the costs of the successful defendant for which the plaintiff is directly liable. Unsurprisingly, the principles governing such orders are substantially the same. Writing of a Bullock order, Gibbs CJ in Gould v Vaggelas198 approved a dictum of Blackburn CJ to the effect that199: "[T]here is a condition for the making of a Bullock order, in addition to the question whether the suing of the successful defendant was reasonable, namely that the conduct of the unsuccessful defendant has been such as to make it fair to impose some liability on it for the costs of the successful defendant." The latter aspect of the exercise of the costs discretion in cases of this kind is no more than a consequence of the usual rule that one party is not ordinarily liable for the costs of another unless that party is found answerable to a judgment against it and in favour of the party seeking the order. The RTA said, in effect, 196 CSR Ltd v Eddy (2005) 226 CLR 1 at 34-36 [78]-[81], 48-49 [117]-[120]. 197 Great Lakes Shire Council v Dederer [No 2] [2006] NSWCA 336 at [4]. 198 (1985) 157 CLR 215 at 230. 199 Steppke v National Capital Development Commission (1978) 21 ACTR 23 at 30- Kirby that the Council's costs were Mr Dederer's responsibility and should not be a burden on it. Neither Mr Dederer nor the RTA challenged the governing rule expressed by the Court of Appeal. It is appropriate for this Court to approach the present application on that footing. In support of Mr Dederer's application for a Sanderson order, an affidavit of his former solicitor, Mr Philip Watson, was read before the Court of Appeal. It was not contested, in the Court of Appeal or in this Court, that it was reasonable for Mr Dederer to have sued the Council. Upon the basis that the Civil Liability Act did not disentitle Mr Dederer from recovery against the Council, the primary judge upheld the claim against the Council for what was found to have been its separate liability in negligence to Mr Dederer200. The primary judge ordered the Council to bear 20% of the aggregate agreed damages and costs201. Mr Watson's affidavit was therefore addressed to the second issue identified by Blackburn CJ, namely whether it was fair to impose some liability on the RTA for the costs of the Council following the decision of the Court of Appeal. RTA was responsible for added costs: The affidavit discloses that Mr Dederer was in hospital when Mr Watson first received instructions from his parents in February 1999. Mr Watson immediately set about attempting to identify the public authority that was responsible in law for the conditions of, and signage on, the bridge. Letters were sent in March 1999 both to the Council and the RTA, asking each whether it was "the authority responsible for the Bridge and for the signs positioned at each end of the Bridge and along its length". In April 1999 both the Council and the RTA responded, advising, to quote the letter from the RTA, that: "[The RTA] is the authority responsible for the Forster/Tuncurry Bridge and for signs positioned at each end of and along the length of the Bridge." At the time of receipt of these letters, Mr Dederer's entitlements to damages for negligence were substantially governed by the common law. Moreover, because of his then minority, he had some years within which to commence proceedings. However, in March 2002, the Government of New South Wales announced its intention to seek amendments to the law affecting plaintiffs' rights from the State Parliament. After consultation with counsel, and as a matter of prudence, Mr Watson decided to commence proceedings in Mr Dederer's and other cases at once. In light of the concurrent advice of the two 200 (2005) Aust Torts Reports ¶81-792 at 67,534 [91]. 201 (2005) Aust Torts Reports ¶81-792 at 67,534-67,535 [97]. Kirby authorities, such proceedings were filed in the State Supreme Court on 3 April 2002, naming the RTA as the sole defendant. The action proceeded in the normal way. On 20 May 2002, the statement of claim was sent to the RTA. On 20 August 2002, the RTA caused a defence to be filed. By that defence, the RTA admitted that it was the authority responsible for the bridge. Particulars were exchanged. The matter was listed for hearing in Newcastle on 8 September 2003. However, a week before the notified hearing date, the RTA signalled an intention to seek an adjournment because it wished to join the Council as a party to the proceedings. According to Mr Watson, this was "the first indication from the RTA that it believed the Council had any responsibility for the Plaintiff's accident". The adjournment application was opposed for Mr Dederer, as was the filing of an amended defence and joinder of the Council. However, a judge of the Supreme Court granted leave to the RTA to take these steps. The consequence was the postponement of the hearing at which, on the basis of the Court of Appeal's decision and these reasons, Mr Dederer would have recovered against the RTA alone, without joinder of the Council. When the Council was joined as a defendant on the RTA's application, it was, according to Mr Watson, "clearly necessary" for Mr Dederer to commence his own proceedings against the Council. He was not privy to the details of the RTA's case or to any arrangements that might sustain the new contention that liability for the bridge belonged to the Council. The RTA's evidence might conceivably have shown that it belonged to the Council alone. This was the factual background to the costs application. Ipp JA, who gave the reasons for the Court of Appeal's dismissal of the application for a special costs order, concluded that the steps taken for Mr Dederer might have been understandable. However, as Mr Dederer was separately advised, it was for his advisers to obtain accurate information, including information concerning the operation of the supervening provisions of the Civil Liability Act202. Ipp JA pointed out that the RTA only withdrew its admission of responsibility for the bridge and signage when it filed its defence to the further amended statement of claim in October 2004. By that time the Council had been joined as a party for more than a year. Ipp JA observed that, in any case, the potential liability of the Council was obvious, as was the application of the Civil Liability Act once it had commenced operation. By inference, the suggestion was that Mr Dederer's advisers should have commenced proceedings against the Council at the time they began the action against the RTA. This would have left it to the defendants to fight out their respective liabilities. Mr Dederer would also have avoided any disentitlement under the Civil Liability Act. 202 Great Lakes Shire Council v Dederer [No 2] [2006] NSWCA 336 at [22]. Kirby Conclusion: Sanderson order required: Whilst this is a view compatible with the way in which common law litigation was traditionally fought, protecting the "treasured right of each litigant to store up, in secret, as many unpleasant surprises for his opponent as he could muster, and only reveal them at the last minute at the trial … in the presence of the judicial umpire"203, it would not have been an ideal, economic or fair way of conducting Mr Dederer's proceedings. An analogous opinion was expressed by Heydon JA in Nowlan v Marson Transport Pty Ltd204. The enquiry made by Mr Dederer's solicitor at the outset, the concurrent responses to it and the RTA's initial defence admitting its responsibility for the bridge and signage made the course that was adopted, of suing only the RTA, a perfectly reasonable one. Had the matter proceeded to trial on that footing, the problem of the Council's costs being ordered against Mr Dederer would not have arisen. Although it is true that Mr Dederer was professionally advised, he and his then solicitor were entitled at the outset to act on the admission made by the RTA, a responsible public authority. The RTA might have responded in the traditional manner, informing the solicitor that Mr Dederer must rely on his own enquiries. However, having indicated an acceptance of responsibility for the bridge and its signs (an acceptance reflected in the effective admission at trial and thereafter that the RTA owed Mr Dederer a duty of care) it was the switch of tactics by the RTA that changed the dynamic of the litigation. That switch of tactics virtually forced those representing Mr Dederer to bring their own proceedings against the Council lest the RTA was saving up some "unpleasant surprises" for the trial which would prove fatal to Mr Dederer's claim against it. In these circumstances, whatever the risks involved in proceeding against the Council by reason of the Civil Liability Act, Mr Dederer was obliged to accept those risks against the greater potential danger that the RTA might escape liability wholly or in large part. In the event there were no such large surprises. But the intervening commencement of the new legislation put Mr Dederer at a serious disadvantage. In the course of the events just described, the Court of Appeal erred in concluding that the conduct of the RTA had not been such as to make it fair to impose some liability on the RTA for the costs of the Council. Indeed, the correct conclusion is that the RTA, by its belated switch of tactics, was the true cause of the joinder of the Council at all. It is therefore fair to impose on it the 203 Donaldson v Harris (1973) 4 SASR 299 at 302 per Wells J. 204 (2001) 53 NSWLR 116 at 127 [27] quoting Sir George Jessel; cf Sweeney v Boylan Nominees Pty Ltd (2006) 226 CLR 161 at 195-196 [115]-[117]. Kirby entire costs that Mr Dederer is, by the Court of Appeal's order, obliged to pay the Council. This Court should therefore order the RTA to assume those costs and to pay them directly to the Council on a Sanderson basis. Resulting order for costs: To give effect to these conclusions, Mr Dederer should have special leave to cross-appeal on this point. The cross-appeal should be allowed. The costs order of the Court of Appeal should be set aside and a Sanderson order made. This conclusion justifies Mr Dederer's application for special leave and his cross-appeal. Although, in the conclusion that I favour, he has lost one point of the application, he has substantially succeeded in it. It is therefore just that the RTA should pay two-thirds of the costs of his application and cross-appeal. Orders The following orders should therefore be made by this Court: The appeal by the Roads and Traffic Authority of NSW dismissed with costs; and In the application for special leave to cross-appeal by Philip James Dederer: (a) Dismiss the application for special leave to cross-appeal against the judgment of the Court of Appeal of the Supreme Court of New South Wales made on 5 October 2006; (b) Grant special leave to cross-appeal against the order made by the Court of Appeal on 29 November 2006; set aside that order; and in its place order that the Roads and Traffic Authority of NSW pay to the Great Lakes Shire Council the costs payable in the appeal by Mr Dederer to the Great Lakes Shire Council pursuant to orders (1) and (2) of the orders made by the Court of Appeal on 5 October 2006; and (c) Order that the Roads and Traffic Authority of NSW pay two-thirds of Mr Dederer's costs in respect of his application and cross-appeal. Callinan CALLINAN J. The questions which this appeal raises are whether the primary judge and the Court of Appeal of New South Wales properly applied settled principles of breach of duty of care to the evaluation of the parties' conduct, and of causation. Facts On 31 December 1998, the first respondent, who was then 14, dived from a bridge across the Wallamba River in New South Wales. Steadying himself by holding on to a lamppost, he launched his dive from the highest of three horizontal railings on the northern side of the bridge. The top of the railing was flat and about nine metres above the surface of the water. He struck a submerged sandbank and suffered a very severe spinal injury. There were pictograph signs on the approaches to the bridge prohibiting diving, and signs in words prohibiting climbing on the bridge. The first respondent saw and understood the signs before he dived. He chose to disregard them. The first respondent sued the appellant and the municipality in which the bridge was situated ("the Council") the second respondent in this matter205, in the Supreme Court of New South Wales in negligence. The trial judge, Dunford J, found for the first respondent against both defendants. He held, further, that the first respondent had been guilty of contributory negligence and assessed his responsibility for his injuries at 25 per cent. As between the appellant and the Council, his Honour found that the appellant was 80 per cent responsible for the first respondent's damages (after the deduction for contributory negligence) and the Council 20 per cent. The quantum of damages was not in issue and judgment was entered for the first respondent in the sum of $1,050,000. The bridge links the twin towns of Forster and Tuncurry. It runs east to west. It spans the estuary at the mouth of the Wallamba River and is about one kilometre south-west of the junction of Wallis Lake and the Pacific Ocean. There are recreational parks on each side of the bridge. The Tuncurry town centre is about 500 metres to the north-west, and that of Forster, about 200 metres to the east. There is a small marina immediately to the north of the bridge, and a camping reserve adjoining it. 205 The second respondent's only interest in the proceedings in this Court was in retaining orders for costs made in its favour. Callinan The area attracts a large number of tourists: its population swells during the summer months. Families and children are among those tourists. Some families come annually. There is a parking area on the Forster side of the bridge with an amenities block including lavatories, a park, bench seats and tables. The bridge is constructed of steel and concrete, and is 632 metres long. It carries a two-lane bitumen roadway. There is a concrete walkway for pedestrians on its northern side. Each lane is 3.66 metres wide, and the walkway is 1.525 metres wide. Three people can walk abreast on the walkway. The roadway is part of Main Road 111. There was evidence that it was "extremely" busy. There is no physical separation between the walkway and the roadway. The bridge rests on reinforced concrete piles and 47 piers, numbered 1 to 47 from the Tuncurry side. It passes over a large sandbar as it traverses the estuary. The southern tip of the sandbar is about level with pier 41. Boats, including big trawlers, fishing boats, ski boats, and jet skis pass in deep channels near the Forster and Tuncurry sides of the estuary. Clearance for vessels using the channels was provided "by introducing a crest vertical curve [described by witnesses as 'humps'] into the longitudinal grade line over each channel". The level of the bridge therefore rises over the navigable channels and is correspondingly lower over the sandbar. The main channel for navigation on the Forster side is between piers 43 and 44. Boats also use the passage between piers 44 and 45. The first respondent dived between piers 44 and 45. The tidal flow in the area is strong. The action of the tide has a scouring and dispersing effect on sand from the sandbar causing the depths of the water in the estuary to change continually. The first respondent dived at a point where the visible edge of the sandbar above the surface of the water was about ten metres to his left. The depth of water where he dived was about two metres. According to the first respondent's father, although the position of the sandbar generally remained constant, its length and width changed from week to week. The tides on the day varied by about 1.4 metres. High tide was at 7.53 am and low at 2.08 pm. The first respondent dived at about midday. The first respondent's dive was by no means a rare event. For many years, almost from the time that the bridge was constructed, young people, particularly during the summer months, frequently, often in groups, jumped, and, less often, dived from the bridge into the water. There was no suggestion that anyone else had suffered injuries by doing so. Callinan The railing and ledge on the northern side of the bridge were apparently the more popular diving platforms, although people had also dived from a water pipe pinned along the south side of it. The pictograph sign that the first respondent saw before he dived was located on a telegraph pole between pier 47 and the Forster end of the bridge. It depicted a person diving with a diagonal line through the person. Other signs, in words, prohibiting fishing from, and climbing on the bridge, stood at each entrance to it. The first respondent was about 182 centimetres tall and "a fairly solid person" at the time of the accident. He was an able sportsman who played rugby league as a front row forward, and in 1998 was given the "Player of the Year Award" at his school. He participated in other sports. He had previously dived from a 10-metre tower at a swimming pool. The first respondent and his family had spent holidays in the area since he was a very small boy. They stayed at a caravan park north of the Tuncurry township over weekends and during school holidays. They regularly spent time swimming, water skiing and fishing in the estuary. The first respondent was aware that, in the area of the bridge, the estuary was "very much given to tidal action". He and his family often ran their boat on to the sandbar, jumped off the back of it and swam in the channel. He knew that the depth of the water dropped suddenly at the edge of the sandbar, and the water in the channel was "very deep". His feet had not, on these occasions, touched the bottom in that area. He knew that the tide shifted the sand around and resulted in scouring, particularly in and about the channel. He said that there were not "sudden shift[s] of sand" in the middle of a channel, but at times it was noticeable that "some sort of a shallowing up of the bottom" had occurred. When the water was clear he could see yellow patches in the channel. These were long stretches of sand indicating shallower areas. Whether the shallower areas within the channels could be seen depended on the tide at the time, and "a number of [other] factors". He accepted that the depth of the water in the channels was hard to judge "due to the flow of the water going under the bridge". Over the years, the first respondent had often seen children and adults jump and dive from the bridge. He assumed therefore that the water "must be deep". He had passed under the bridge from time to time in a boat. He said that from the boat, "the bridge looked fairly high but the water also looked very deep". On 30 December 1998, the day before the accident, the first respondent went with a friend, Mr Cunial, to Forster. They walked on to the bridge. As they approached it, the first respondent saw what he described as the "big sign" at the Callinan side of the bridge that read "Fishing and climbing on bridge prohibited". He had seen that sign and an identical sign at the Tuncurry end of the bridge previously. The first respondent advanced some distance along the bridge and jumped into the river twice, first from the ledge at the base of the bridge, and the second time from the top of the handrail. Both times his body was totally submerged after he jumped, and his feet did not touch the bottom. This was the first occasion on which he had jumped or dived from the bridge. That day he saw other people (whom he described as "a group of kids") jumping and diving from the bridge. On 31 December 1998, he and the same friend drove to the parking area on the Forster side of the bridge. It was a hot day and they sat for five to ten minutes on one of the benches. From there, they watched about 10 to 15 people jumping from the bridge. They walked on to the bridge intending to swim. The first respondent said that jumping from the bridge was an easy way to get into the water. He saw the pictograph sign. It "just showed, just told me I shouldn't dive. It didn't sort of put any danger to it." The first respondent climbed on to the rail without difficulty. When he reached the top of it he looked at the water for about two to three minutes or maybe longer. He said: "You couldn't make out the bottom, the water [was] a green murky colour, and it was a real dark green which told me it was deep." He explained why he thought it was safe to dive: "Just the look of it and on my knowledge of sort of that area with the boats passing by and people jumping and diving off that area and the colour in the water and sort of being in the middle of the channel I always thought it was deep." Initially, he had intended to jump, but on impulse, as he stood on the top railing, he decided to dive. He listened to make sure that no boats were approaching before diving, with his arms outstretched. He said: "At that time I was sort of a cocky 14 year old that had the attitude, well I wasn't going to dive, I was jump [sic], but then once I got up there I for some reason changed my mind." He said he dived "almost straight", but at an angle, similar to the way in which other people had dived. He said: Callinan "I didn't jump straight down but I didn't sort of belly-flop either, I sort of went in almost straight, but not dead straight." His next recollection was of coming up from under the water, and being unable to feel any sensation in the lower part of his body. His friend jumped in to assist him. By now, there was a very strong ebb tide. The first respondent was worried that they might end up in the sea. It took two hours for them both to be brought ashore. The first respondent's father first went to the area in the late 1960s or early 1970s. He regularly stayed there for about four weeks at a time. Every time, he saw people either jumping or diving from the bridge on the Forster side. He said that, while people were "jumping all the time", he had seen some "diving on a few occasions". Most of the people jumping and diving were 12 to 16 year olds. Later, the first respondent's father took his own family to the region for holidays. He had taken a van at the caravan site at the Wallamba River for about 22 years. He had driven over the bridge many times. When the weather was warm, it was not unusual for him to see groups of four to six young people jumping from the bridge at a time. The first respondent, from the age of about six or seven years, had seen people jump and dive from the bridge at the channel near the Forster shore. They were of all ages, but most were young. He said that he would see "a steady flow of people jumping and diving" and, "you'd get one group every five, ten minutes". He said a group would comprise from about three to about ten people. Their ages ranged from 10 years to adults. Mr Cunial had been visiting the area for holidays since about 1992 and had seen persons, from about 10 to 30 years old, jumping, diving, doing back flips, somersaults, "peg-legs" and "bombs" from the bridge at the channel near the Forster shore. Mr Keegan, who was called in the appellant's case, was the Asset Manager of the Council's roads, bridges and stormwater systems. Earlier he had been Works Engineer in charge of construction and maintenance. He had worked for the Council since 1975. He was aware that for years young people were in the habit of jumping from the bridge. He said that it was common knowledge in the community: he had actually remonstrated with his own children about it. Mr Keegan said that he was aware, 15 or 16 years before the trial in 2004, that there were signs on the bridge referring to "no diving". He knew from the records that the pictograph signs installed in 1995 had replaced other signs. The trial was conducted on the basis that in December 1995 the Council had replaced Callinan the existing pictorial "no diving" signs. The Council had informed the appellant that signs were needed. Mr Pevitt had been employed by the Council as a ranger since November 1988. He had seen many people, over the years, jump from the bridge. Some had done somersaults, but he had never seen anyone dive. He was asked whether jumping was a "constant thing, particularly in holiday periods" and he replied, "Most definitely, yes." Mr Alexander was the Planning and Analysis Officer of the appellant's Road Safety and Traffic Management Section. He had been employed by the appellant since 1998. He said that, from its records, he was aware of concerns expressed in February 1993 about persons jumping from the bridge. Officials inspected the bridge in April 1998 and reported that people were still jumping from it: that was general knowledge in his office. The first respondent had never seen police officers or Council rangers talking to any of the very many people whom he had seen jumping or diving. The first respondent's father had never seen a police officer patrolling the area or any rangers. This was his experience throughout the "countless times" that he had been there since the late 1960s or early 1970s. Mr Pevitt, on three separate occasions in about 1990, wearing his official Council uniform, spoke to persons who were climbing on to and appeared to be about to jump from the bridge. They were 16 years of age or younger. He drew their attention to the pictograph sign and told them not to jump. They ignored him and jumped all the same. He could not catch them. On one of these occasions Mr Pevitt tried to remonstrate with people who had jumped but "they just sat on the centre island, 20 yards away, and waved and laughed". At about the same time, Mr Pevitt raised his concerns with police officers. The police agreed to attempt to prevent people jumping from the bridge. Mr Pevitt, thereafter, did see police officers on numerous occasions, stop, and speak to persons who appeared to be ready to jump. They however ignored the warnings and continued to jump. Mr Pevitt said that he had seen police officers drive into the adjacent park and speak to people about jumping from the bridge. He had also seen a police boat being used to try to round up some youths who had jumped. People were still jumping while the police boat was there. This continued for about 30 minutes. The police attempts to prevent the practice were fruitless. He said that he had seen police in boats about three times, and other officers talking to youths near the bridge about five or six times, but all to no avail. Mr Pevitt said that the police from time to time telephoned the Council and asked the Council to take enforcement action to prevent people from jumping and diving from the bridge. Mr Pevitt, however, found that "it was just Callinan unenforceable". He said "the people just wouldn't take any notice". Mr Pevitt agreed that, since 1990, the practice of people jumping from the bridge was "a constant thing, particularly in holiday periods". On 11 February 1993, the Council sent a facsimile to the appellant expressing the concerns of the Council regarding "young persons jumping from the ... bridge". The facsimile referred to "[d]anger to boating" and "[the n]eed … [for] at least signs". It was after this, in 1995, that the Council replaced the existing signs and erected the "no diving" pictograph signs near each end of the bridge. The trial judge's findings The trial judge found that both the appellant and the Council owed users of the bridge, including the first respondent, a duty of care. His Honour, "I am satisfied that almost from the time of its construction and certainly for many years prior to the plaintiff's accident young, and not so young, persons were regularly using the railing and ledge of the bridge as launching pads for jumping and diving into the water below, particularly, but not limited to, during the summer holidays. The reason why jumping and diving off the bridge was so popular was in part due to the flat topped railing along the outside boundary of the bridge, and the ease of access to that railing by reason of the wooden cross members which provided steps up to the top railing. Even if it was not anticipated prior to the construction of the bridge that it would be used in this way, it soon became apparent after its completion and foreseeable that the culture was likely to continue. Although the jumpers and divers entered the water in or near the main navigation channel, both the [appellant] and the Council were aware of the moving sands and variable depths underneath the water, and it was therefore reasonably foreseeable, and not far fetched or fanciful, that if the practice continued someone engaging in the activity was liable to suffer serious injury. I say this notwithstanding the fact that no one had in fact been injured in nearly 50 years, because the risks should have been so apparent to the officers of both defendants with knowledge of the estuary bed that it was in effect 'an accident waiting to happen'." 206 Dederer v Roads and Traffic Authority (2005) Aust Torts Reports ¶81-792 at Callinan His Honour described the bridge as an allurement207: "The bridge, being a launching pad for jumping or diving into generally clear water at a holiday resort, particularly in summer was, I believe, a very strong allurement to youths of the plaintiff's age group, particularly as in a colloquial, though not accurate, sense, 'everybody else' was doing it." Dunford J who viewed the scene said this of it208: "My own observations at the view on 8 October 2004 were that from the place where the plaintiff indicated he dived what appeared to be the bottom could be seen, there were certainly different hues of green and there appeared to be some yellow patches some distance below the surface. The water in the navigation channel appeared to be a much deeper green and therefore much deeper ... But, of course, I saw it nearly 8 years after the plaintiff's accident at a different tide and when the sands had undoubtedly moved in the meantime." His Honour referred to the response made by the Council, with the consent, and at the expense of the appellant, to erect the "no diving" pictograph signs in 1995. He said that he was satisfied that the signs on the bridge were not effective "in the sense that large numbers of young people continued to jump, dive, do somersaults, etc from the bridge into the water"209. The Council admitted that it knew that the practice was continuing. The appellant did not. Although the appellant did not have an office or depot in Forster or Tuncurry, it had maintenance and other crews working in the area and taking soundings of the water. Dunford J found that because the practice of persons diving and jumping was so widespread, and because of the presence that the appellant had in the area, "it must have known of the continuing practice": certainly the appellant "had direct knowledge after its representatives reported it in April 1998"210. 207 (2005) Aust Torts Reports ¶81-792 at 67,530 [65]. 208 (2005) Aust Torts Reports ¶81-792 at 67,524 [19]. 209 (2005) Aust Torts Reports ¶81-792 at 67,527 [46]. 210 (2005) Aust Torts Reports ¶81-792 at 67,529 [57]. Callinan His Honour pointed to the fact that, unlike the plaintiffs in some other diving cases before the courts, the first respondent "dived from an artificial structure erected by the [appellant]"211. His Honour said212: "In my opinion, it was not sufficient to ignore the fact that the signs were being disregarded and it is necessary to consider what, if any, further steps should reasonably have been taken by way of further warning signs, modification of the bridge or otherwise, to prevent injury to persons such as the plaintiff; or to put it another way, the content of the duty of care." The first respondent argued that the appellant should have erected "shallow water" pictograph signs showing a person diving and striking his head on the bottom. His Honour said that it was "highly problematic" whether such "shallow water" signs would have been any more effective213: "Because of the large number of young persons jumping and diving without incident, it would have been obvious that the water was not generally shallow, and in those circumstances, I consider it probable that that sign would also have been ignored, just as the 'diving prohibited' sign was ignored." "The 'no diving' pictogram was a prohibition, it did not convey a warning of danger. On reflection it is easy to reason, as the plaintiff subsequently did, that the prohibition on diving was probably put in place because diving from the railing was dangerous, but that was not immediately apparent. Many prohibitory signs are disobeyed and not all of them are put in place because what they prohibit is dangerous to the persons to whom the signs are directed. For example, the sign prohibiting fishing on the bridge was also ignored but the prohibition was presumably in place because of the danger to boats passing underneath or pedestrians using the footway, not because fishing constituted a danger to the persons doing the fishing. The reasonable response to the risk of injury was a notice warning of the danger, not a mere prohibition for reasons unspecified. 211 (2005) Aust Torts Reports ¶81-792 at 67,529 [60]. 212 (2005) Aust Torts Reports ¶81-792 at 67,529 [58]. 213 (2005) Aust Torts Reports ¶81-792 at 67,530 [68]. 214 (2005) Aust Torts Reports ¶81-792 at 67,530-67,531 [69]-[70]. Callinan The danger here was not that the water was generally shallow, but that the sands were constantly shifting and accordingly, along with the tides, the depth of the water was variable. These facts were known to the defendants but not to the youths doing the jumping and diving. In my opinion, a warning sign containing words similar to 'Danger, shifting sands, variable depth' should have been displayed either on the telegraph post or the bridge railing near where the plaintiff dived. Such a sign would have alerted the plaintiff to the real danger and probably have inhibited him from diving, particularly if it inhibited large numbers of others from doing likewise and so tended to break the culture or practice which had developed." His Honour then gave consideration to the construction of the bridge. He accepted that in 1959, when it was built, the flat top railing and the horizontal flat central members complied with current standards215. By 1993 however, when the appellant's attention was drawn to what was happening on the bridge, standards had changed216. Vertical, rather than horizontal, pool-type members had become "the norm" and were specified in the 1992 Austroads Bridge Design Code217. His Honour did not overlook that the Design Code applied only to new bridges218. Nonetheless, he pointed out that when the wires spanning the railings rusted in 1993, they were replaced without modification to the horizontal members219. His Honour found that the appellant was confronted with a risk that required remedial action. Proposals were put before it in 1995, and thereafter, for a new cycleway and walkway. These included a new handrail and vertical members220. His Honour said that a "comparatively simple" modification could have been made to the flat top surface of the railing by attaching to it a triangular strip221. This would make the handrail difficult and uncomfortable to stand on, and almost impossible to balance on, before jumping or diving. His Honour 215 (2005) Aust Torts Reports ¶81-792 at 67,531 [71]. 216 (2005) Aust Torts Reports ¶81-792 at 67,531 [71]. 217 (2005) Aust Torts Reports ¶81-792 at 67,531 [71]. 218 (2005) Aust Torts Reports ¶81-792 at 67,531 [72]. 219 (2005) Aust Torts Reports ¶81-792 at 67,531 [71]. 220 (2005) Aust Torts Reports ¶81-792 at 67,531 [72]. 221 (2005) Aust Torts Reports ¶81-792 at 67,531 [74]. Callinan pointed out that a similar result could have been achieved by replacing the top flat member with an angled member such as already existed on the approaches to the bridge at both the Forster and Tuncurry ends. His Honour was of the view that a pool-type fence would be difficult to climb. He said222: "Subsequently plans have been prepared and funds approved for widening of the walkway and replacement of the post and rail fence with a fence containing vertical members in accordance with the [1992] Austroads Standard." The judge said that pool fences had been used for many years and there was no reason why one could not have been installed earlier223. His Honour, after referring to the notional modification to the handrail and the possible installation of vertical, pool-type members, went on224: "I am satisfied that the failure to make either or both of these modifications to the railing constituted a lack of reasonable care on the part of the [appellant] and that if they had been in place, the plaintiff would probably not have dived and suffered his injuries." His Honour concluded that, in failing to provide appropriate warning signs, and in constructing and repairing the railings without modification, the appellant failed to take reasonable care for the safety of the first respondent. He was therefore entitled to judgment against it225. With respect to the Council, Dunford J said226: "I am satisfied it owed a duty of care to persons jumping and diving off the bridge to warn them of the danger, and when the 'no diving' pictograms proved to be ineffective in this regard and the practice continued, it was not sufficient to do nothing, but it required the provision of warning, as opposed to prohibition, signs. I am therefore satisfied that 222 (2005) Aust Torts Reports ¶81-792 at 67,527 [46]. 223 (2005) Aust Torts Reports ¶81-792 at 67,531 [73]. 224 (2005) Aust Torts Reports ¶81-792 at 67,531 [74]. 225 (2005) Aust Torts Reports ¶81-792 at 67,531 [76]. 226 (2005) Aust Torts Reports ¶81-792 at 67,532-67,533 [83]. Callinan on this issue, like the [appellant] and on common law principles, the Council was in breach of its duty to take reasonable care." The Council had relied on Pt 1A of the Civil Liability Act 2002 (NSW) which was, because of the later joinder of it as a defendant, available to it as an arguable defence227. It submitted that228: 227 "5F Meaning of 'obvious risk' (1) … an obvious risk to a person who suffers harm is a risk that, in the circumstances, would have been obvious to a reasonable person in the position of that person. (3) A risk of something occurring can be an obvious risk even though it has a low probability of occurring. 5G Injured persons presumed to be aware of obvious risks (1) In determining liability for negligence, a person who suffers harm is presumed to have been aware of the risk of harm if it was an obvious risk, unless the person proves on the balance of probabilities that he or she was not aware of the risk. (2) For the purposes of this section, a person is aware of a risk if the person is aware of the type or kind of risk, even if the person is not aware of the precise nature, extent or manner of occurrence of the risk. 5H No proactive duty to warn of obvious risk (1) A person (the defendant) does not owe a duty of care to another person (the plaintiff) to warn of an obvious risk to the plaintiff. Division 5 Recreational activities 5K Definitions dangerous recreational activity means a recreational activity that involves a significant risk of physical harm. (Footnote continues on next page) Callinan "the plaintiff's action in diving off the bridge was a 'dangerous recreational activity', as defined by s 5K … the risk of harm was an 'obvious' risk as defined by s 5F … the plaintiff is therefore presumed to have been aware recreational activity includes: (b) any pursuit or activity engaged in for enjoyment, relaxation or leisure … 5L No liability for harm suffered from obvious risks of dangerous recreational activities (1) A person (the defendant) is not liable in negligence for harm suffered by another person (the plaintiff) as a result of the materialisation of an obvious risk of a dangerous recreational activity engaged in by the plaintiff. (2) This section applies whether or not the plaintiff was aware of the risk. 5M No duty of care for recreational activity where risk warning (1) A person (the defendant) does not owe a duty of care to another person who engages in a recreational activity (the plaintiff) to take care in respect of a risk of the activity if the risk was the subject of a risk warning to the plaintiff. (3) For the purposes of subsections (1) and (2), a risk warning to a person in relation to a recreational activity is a warning that is given in a manner that is reasonably likely to result in people being warned of the risk before engaging in the recreational activity. (5) A risk warning need not be specific to the particular risk and can be a general warning of risks that include the particular risk concerned (so long as the risk warning warns of the general nature of the particular risk). 228 (2005) Aust Torts Reports ¶81-792 at 67,533 [84]. Callinan of the risk of harm: s 5G, and … accordingly, there was no proactive duty to warn of the risk: s 5H". Although he was prepared to accept that the first respondent had been engaged in a "dangerous recreational activity"229 his Honour was not satisfied that diving from the bridge presented an "obvious risk"230. His Honour said231: "Here the plaintiff was a 14 year old who had seen a large number of persons jumping and diving off the bridge over many years, without any apparent attempt by police or Council rangers to stop them and no known cases of injury. He may have been aware that sandbars shifted (if he thought of it) and know of the variable depth of the water, but from what he had observed and having regard to his age and lack of maturity, the fact that he knew vessels passed through the channel, he looked and saw the water was dark murky green and he could not see the bottom, all of which indicated to him that the water was deep, the risk of serious permanent physical injury would not have been obvious to him, even if it would have been obvious to a mature adult. Accordingly s 5H does not apply in the circumstances of this case, and neither does s 5L which also depends on an 'obvious risk' as defined in s 5F. The Council also relies on s 5M which provides that there is no duty of care in respect of a recreational activity if the risk was the subject of a risk warning to the plaintiff, but for reasons already given, I do not consider that the signs which were displayed constituted a warning." Accordingly, his Honour held that the Council too was in breach of its duty of care to the first respondent in failing to provide adequate warning signs notifying of the danger of diving from the bridge232. Concerning the appellant's and the Council's alternate claims of contributory negligence, on the part of the first respondent, his Honour said233: "[A]lthough the plaintiff did not at the time regard the 'no diving' pictogram as denoting danger, he knew it meant that he should not dive, but he deliberately disregarded it. He also knew that the depth of the 229 (2005) Aust Torts Reports ¶81-792 at 67,533 [85]. 230 (2005) Aust Torts Reports ¶81-792 at 67,533 [85]. 231 (2005) Aust Torts Reports ¶81-792 at 67,533 [87]. 232 (2005) Aust Torts Reports ¶81-792 at 67,534 [91]. 233 (2005) Aust Torts Reports ¶81-792 at 67,534 [92]-[93]. Callinan water was variable, that jumping from heights could result in injury and he said that part of the thrill of diving and jumping from the bridge was the risk. He was however only a 14 year old, and the standard of care for his own safety required of him was that of a 14 year old person ... In all the circumstances, I am satisfied that the plaintiff was guilty of contributory negligence and I apportion his share of responsibility for his own injury at 25 per cent." In the result his Honour concluded that the appellant and the Council should bear 60 per cent and 15 per cent respectively of the responsibility for the first respondent's injuries and damages, and the first respondent himself 25 per cent. The Court of Appeal The appellant and the Council appealed to the Court of Appeal of New South Wales. That Court (Ipp and Tobias JJA, Handley JA dissenting) was satisfied that the practice of diving was so widespread that, although the appellant did not have an office or depot in Forster or Tuncurry, because it had maintenance and other crews working in the area and taking soundings of the water under the bridge, it must be taken to have known of the practice234. The majority accepted that the "no diving" signs were ineffective235. The appellant was in breach therefore, they held, of its duty of care, by failing to take further steps to prevent injury to persons such as the first respondent236. Their Honours referred to Wyong Shire Council v Shirt237. The majority were of the view that the appellant's reasonable response to the risk should have been to install swimming pool fencing (vertical posts without horizontal cross members) and to modify the top railing by adding to it an upward facing triangular section so as to make it more difficult to climb on to and balance on the top before diving238. 234 Great Lakes Shire Council v Dederer (2006) Aust Torts Reports ¶81-860 at 68,899 [204] per Ipp JA, 68,918 [339] per Tobias JA. 235 (2006) Aust Torts Reports ¶81-860 at 68,900 [217]-[219] per Ipp JA, 68,918 [339] per Tobias JA. 236 (2006) Aust Torts Reports ¶81-860 at 68,901 [222], 68,903 [235] per Ipp JA. 237 (1980) 146 CLR 40. 238 (2006) Aust Torts Reports ¶81-860 at 68,914-68,915 [310], [314] per Ipp JA. Callinan As to the trial judge's holding that the appellant should have erected a "Danger, shifting sands, variable depth" warning sign239 the majority of the Court of Appeal thought a composite sign containing the "no diving" pictograph with the words "shallow water"240 was preferable and should have been erected. The Court of Appeal took a different view of the Council's responsibility, concluding that the Civil Liability Act 2002 (NSW) relieved it from liability241. The majority of the Court of Appeal also adjusted the trial judge's assessment of the first respondent's responsibility for his injuries242, increasing it from 25 per cent to 50 per cent243. It is relevant to refer to the dissenting judgment of Handley JA because, in my opinion, in substance, his Honour's reasoning and conclusions are correct244: "Ipp JA holds that the No Diving signs did not comply with the 1995 Standard (AAS 2416-1995), and that a sign which prohibited diving with the words 'Shallow Water' would have been more effective. This involved a reversal of the Judge's finding that a shallow water sign of the kind recommended by Mr Fogg [safety expert for the first respondent] would also have been ignored by the plaintiff. With respect I consider that the trial Judge's inference based finding, which I accept, that a 'Beware of shallow water when diving' sign of the type recommended by Mr Fogg would probably have been ignored just as the 'Diving Prohibited' sign was ignored leaves no room for a finding that a diving prohibited sign with the words 'shallow water' would have been effective. The plaintiff knew, as the Judge recorded, that the 239 (2005) Aust Torts Reports ¶81-792 at 67,531 [70]. 240 (2006) Aust Torts Reports ¶81-860 at 68,914-68,915 [312]-[315] per Ipp JA, 68,923 [372]-[373] per Tobias JA. 241 (2006) Aust Torts Reports ¶81-860 at 68,874 [1] per Handley JA, 68,891-68,895 [146]-[173] per Ipp JA, 68,916 [325] per Tobias JA. 242 (2005) Aust Torts Reports ¶81-792 at 67,534 [93]. 243 (2006) Aust Torts Reports ¶81-860 at 68,915 [320] per Ipp JA. See also at 68,874 [1] per Handley JA. 244 (2006) Aust Torts Reports ¶81-860 at 68,879-68,881 [41]-[59]. Callinan sand moved with the current, that the depth of the channels was hard to judge and some parts were shallower than others. The Judge found that the plaintiff saw the sign, and knew that it meant that he should not dive, but he deliberately disregarded it. He also knew that the depth of the water was variable, and that diving from heights could cause injury. Thus none of the suggested signs would have told the plaintiff anything he did not already know and the failure to erect them could not be a breach of any duty owed to the plaintiff, and if there was any breach it was not a cause of his injuries245. The plaintiff's case is essentially that when he dived he was not aware of the full extent of the risk and that the No Diving signs did not give him that information. However this does not establish a breach of duty. The question was addressed by Gleeson CJ in Woods v Multi-Sport Holdings Pty Ltd246, quoted by Gummow J in Vairy247: 'It was argued that the appellant was not aware of the precise nature, and full extent, of the risk. But warnings of the kind here in question are not intended to address matters of precision.' The Judge was not satisfied that a cantilevered barrier outside the railing would have been effective, and thought it may only have encouraged jumpers to attempt to jump over it with a risk of serious injury if they failed to clear it. The plaintiff did not pursue this allegation in this Court. The other steps which the Judge held should have been taken were the installation of an external handrail with pool fencing and a triangular section on the top, or the addition of such a section to the existing handrail. Ipp JA could not decide whether a triangular handrail would have dissuaded the plaintiff from diving, but he holds that the attraction of the bridge as a place for jumping or diving would have been substantially reduced had the horizontal railings been replaced with pool fencing. The presence of a triangular section fitted to the external handrail would make it uncomfortable and difficult, but not impossible, for someone to stand on the top railing and dive into the water. It may have 245 Vairy v Wyong Shire Council (2005) 223 CLR 422 at 427 [7] per Gleeson CJ and Kirby J, 467 [148] per Hayne J, 479-480 [210] per Callinan and Heydon JJ. 246 (2002) 208 CLR 460 at 473-474 [43]. 247 (2005) 223 CLR 422 at 452-453 [91]. Callinan deterred the plaintiff from diving from the top railing but not from diving from the ledge which was only 1.2 metres lower. He would still have dived from a height of some 8 metres into 2 metres of water. There is no evidence and no basis for an inference that diving from the lower height would have made any difference. The plaintiff failed to prove that such a railing would have stopped him from diving from the ledge or prevented or substantially diminished his injuries. The installation of an external handrail of pool type fencing would have prevented the plaintiff and others from using the existing horizontal rails to climb up or over the handrail, but would not have stopped him getting over. It had to be suitable for use by pedestrians for hand support and would have been no obstacle to an agile teenager. Mr Keegan was shown a photograph of the handrail on the ANZAC Bridge and asked whether it would be exceedingly difficult to climb. He said that it would be harder to climb than the existing railing on the Forster/Tuncurry Bridge, but this would still be possible. His evidence continued: It'd be a lot harder wouldn't it? A. Depending on the size of the person. A young person, I think, would have difficulty getting over it. An adult or a teenager, I think they'd be able to spring over that.' The plaintiff was approximately 6 feet tall and the proposed pool type fencing would have been approximately 1.2 metres high. There is every reason for accepting Mr Keegan's evidence that such a fence would not have deterred a fit teenager such as the plaintiff who wished to jump or dive from the ledge. The signs proposed would not have told the plaintiff anything he did not already know, a triangular section on the handrail would not have discouraged the plaintiff from diving off the ledge, and a pool type handrail would not have stopped him getting onto the ledge. I conclude therefore that the plaintiff failed to establish that any breach of duty by the [appellant] was a cause of his injuries and its appeal should succeed on this ground. The appeal should also succeed on wider grounds. In the cases since Australian Safeway Stores Pty Ltd v Zaluzna248 that have come before the higher courts arising out of diving accidents on public land outside enclosed and controlled swimming pools, the plaintiff's complaint has been that there was no or no sufficient warning of the danger of 248 (1987) 162 CLR 479. Callinan diving249. This does not involve the reversal of a credit-based finding. The plaintiff did not give direct evidence of his reaction to a triangular section on the top of the handrail or pool type fencing or both. A finding on causation in his favour requires the drawing of inferences. It is always possible after the event, with the wisdom of hindsight, to identify some further step or steps that could have been taken by the defendant to avoid or reduce the risk of injury. However, as the High Court has held, the enquiry must always be prospective. The cases arising from injuries caused by diving in areas open to the public have not raised the question posed in this case where No Diving signs in prominent positions were seen, understood, and ignored by the diver. Although the bridge was an allurement to teenagers the Council and the [appellant], unlike the public authorities in Nagle, Berrigan and Mulligan, had not encouraged persons to use the bridge as a diving or jumping platform. This was considered relevant in Vairy250 and Mulligan251. The public, including unaccompanied teenagers, were entitled to use the walkway as of right, and short of closing it under the Act, which has not been suggested, neither the Council nor the [appellant] could stop them. The fact that the public can enter public land as of right was also considered relevant in Vairy252. Just as in Vairy where attempts by Council lifesavers to stop diving off the rock platform were unsuccessful and provoked abuse from 249 Public Trustee v Sutherland Shire Council (1992) Aust Torts Reports ¶81-149; Nagle v Rottnest Island Authority (1993) 177 CLR 423; Swain v Waverley Municipal Council (2005) 220 CLR 517; Vairy v Wyong Shire Council (2005) 223 CLR 422; Mulligan v Coffs Harbour City Council (2005) 223 CLR 486; Berrigan Shire Council v Ballerini (2005) 13 VR 111. 250 (2005) 223 CLR 422 at 442 [57], 450 [82]-[83], 453 [92] per Gummow J, 465 [139] per Hayne J. 251 (2005) 223 CLR 486 at 502 [53] per Hayne J, 504 [66] per Callinan and Heydon JJ. 252 (2005) 223 CLR 422 at 426 [5] per Gleeson CJ and Kirby J, 449-450 [81] per Gummow J, 459 [116], 461 [123] per Hayne J. Callinan intending divers253, earlier efforts in this case by uniformed Council officers and police to stop youths jumping or diving off the bridge were also conspicuously unsuccessful. Participation in recreational activity, and particularly where it involves inherent risks, is voluntary. Such activity is of a different character from that undertaken in the work place, on the roads, in the market place and in other areas where people must venture254. In [Vairy] Gummow J quoted255 a statement from the joint judgment in Brodie v Singleton Shire Council256 that the use of roads is a 'basic right and necessity'. The [appellant] knew that the No Diving signs had not stopped the practice of jumping off the bridge, but teenagers may reasonably have understood from the signs that this was not prohibited. It was not aware that youths were diving from the bridge and it is somewhat unreal to consider what its duty would have been if it was. Ipp JA refers to Wilkins v Council of the City of Broken Hill257 where the failure by Council staff at an enclosed swimming pool to enforce a prohibition on diving was held to be a breach of its duty of care to a teenager. In my judgment that case did not establish any principle relevant to the duty of care owed by a public authority to persons using an unpatrolled bridge open to the public as a diving platform contrary to No Diving signs on the bridge. The [appellant] has State wide responsibilities for roads and road traffic in general, and for the State's freeways in particular. The focus in this case on the diving accident involving one person on one day on one bridge is inherently retrospective. This was not perceived as a risk before it happened." (some references omitted) 253 (2005) 223 CLR 422 at 437 [41]-[42] per McHugh J, 450 [83] per Gummow J, 475-476 [194], 484-485 [226] per Callinan and Heydon JJ. 254 (2005) 223 CLR 422 at 481-482 [217] per Callinan and Heydon JJ. 255 (2005) 223 CLR 422 at 449 [80]. 256 (2001) 206 CLR 512 at 574 [141]. 257 [2005] NSWCA 468. Callinan The appeal to this Court It is necessary first to revisit questions which were recently considered by this Court in Fox v Percy258: whether an intermediate appellate court, or this Court may escape its expressly imposed statutory duty to intervene in cases in which the primary judge has made errors of, or in respect of fact, in the exercise of some quite unstated residual discretion to do so, by reason of judicial solidarity, misplaced sympathy259 for a severely disabled, however personally careless plaintiff, expediency, accommodation of an executive failure to appoint a sufficiency of judges, misconceived application of the uncertain principles of distributive justice, or a determined disinclination to distinguish between the roles of a department of social security and the courts, or otherwise; and the meaning and significance of "concurrency". The High Court is under at least as heavy an obligation to dispose of appeals to it on their legal and factual merits as an intermediate appellate court. This obligation is imposed by s 73 of the Constitution260 and, in further pursuance 258 (2003) 214 CLR 118 at 126-127 [24]-[25] per Gleeson CJ, Gummow and Kirby JJ, 157-166 [130]-[148] per Callinan J. 259 I say "misplaced sympathy" because of the consequences of undue generosity to plaintiffs in particular cases for deserving plaintiffs and would-be plaintiffs in other cases. The consequences, inevitably, have been enactments to reinforce and even extend defences of contributory negligence and the like, restrict access to the courts and to cap damages. See for example, Civil Liability Act 2002 (NSW), Wrongs Act 1958 (Vic) as amended by the Wrongs and Other Acts (Public Liability Insurance Reform) Act 2002 (Vic) and by the Wrongs and Other Acts (Law of Negligence) Act 2003 (Vic), Civil Liability Act 1936 (SA) as amended by the Law Reform (Ipp Recommendations) Act 2004 (SA), Civil Liability Act 2003 (Q), Civil Liability Act 2002 (WA), Civil Liability Act 2002 (Tas), Personal Injuries (Liabilities and Damages) Act 2003 (NT), Civil Law (Wrongs) Act 2002 (ACT). As to contributory negligence see: ss 5R, 5S, 5T (NSW); ss 62, 63 (Vic); ss 44 to 50 (SA); ss 23, 24 (Q); ss 5K, 5L (WA); ss 5, 23 (Tas); ss 14 to 17 (NT); s 47 (ACT). As to damages caps see: ss 12, 16, 18, 21 (NSW); ss 28F to 28H (Vic); ss 52, 54, 56 (SA); ss 52, 54, 60 to 62 (Q); ss 9 to 11 (WA); ss 26, 27 (Tas); ss 19, 20, 27, 29 (NT); s 98 (ACT). 260 "The High Court shall have jurisdiction … to hear and determine appeals from all judgments, decrees, orders, and sentences: of any other federal court, or court exercising federal jurisdiction; or of the Supreme Court of any State, or of any other court of any State from which (Footnote continues on next page) Callinan of it, ss 35261 and 35AA262 of the Judiciary Act 1903 (Cth). Once this Court is satisfied that a case has qualified for a grant of special leave263 it is bound to decide it. Because one or two other courts have earlier decided the questions one way, does not mean that this Court may stand aside and hold, that despite the grant of special leave and the correctness or otherwise of the decisions below, they should be left undisturbed, simply because they are the decisions of the courts below. Deference is one thing: abstention from righting a wrong is an altogether different matter. The task of an appellate court is not to deny any litigant, whether rich or poor the recourse to it that the Constitution, and the relevant legislation say that the litigant should have. Whether a distinction is to be made by appellate courts in carrying out their duties, between a well-resourced litigant and some other litigant, or a special advantage is to be conferred upon the former, are for the legislature, and not the courts to say. And, not surprisingly, no legislature has said that. Both the relevant legislation and the Constitution in providing for appeals draw no distinction between questions of fact and law. For my own part at the establishment of the Commonwealth an appeal lies to the Queen in Council; and the judgment of the High Court in all such cases shall be final and conclusive." 261 "(1) The jurisdiction of the High Court to hear and determine appeals from: judgments of the Supreme Court of a State, whether given or pronounced in the exercise of federal jurisdiction or otherwise; or judgments of any other court of a State given or pronounced in the exercise of federal jurisdiction; whether in civil or criminal matters ..." 262 "(1) … the High Court has jurisdiction to hear and determine appeals from judgments of the Supreme Court of a Territory." 263 Section 21 of the Judiciary Act 1903 (Cth): "(1) Applications for special leave to appeal to the High Court from a judgment of another court may be heard and determined by a single Justice or by a Full Court and the Rules of Court may provide for enabling such applications to be dealt with, subject to conditions prescribed by the Rules, without an oral hearing." Callinan I have no doubt that an error of fact is just as capable of causing an injustice, whether it is to be described as a plain, manifest, or gross error or some other form of error, as a mistake of law. If one thing is clear from a review of some of the recent cases in this Court in which pronouncements have been made about findings of fact, it is that the foundation for a more tender treatment of them than holdings of law is unsound. It is unsound because it has in the past been largely based upon the practice of appellate courts in relation to decisions at first instance in the unique admiralty jurisdiction. I drew attention to this in Fox v Percy. The "P Caland"264, with which I did not specifically deal, is also an admiralty case. The judge who decided that case at first instance, Jeune J, was a very experienced admiralty judge well accustomed to consulting the Trinity Masters in almost all cases of any doubt regarding seamanship265. Indeed, in the volume of the reports in which The "P Caland" appears, there are several stated instances of his Lordship's reference to his consultation with the Trinity Masters266. It is more than speculation to think that there was, there, in any event, a nineteenth century judicial reluctance to hear, let alone decide appeals267 on questions of fact by reason of the novelty of their availability, and a condescending view that facts 265 In the admiralty jurisdiction, if a cause depended upon "questions of nautical science and skill, relating to the management and movement of ships" the court would be assisted by two nautical assessors who were "not only technical advisers" but also were "sources of evidence as to the facts … [The court] obtain[ed] its information from them, not from sworn witnesses called by the parties": The Australia [1927] AC 145 at 152 per Lord Sumner. The assessors were members of the Corporation of the Trinity House, a charitable organization established by Royal Charter in 1514 to regulate the pilotage of ships in the King's streams, and drawn from the ranks of the Royal and Merchant Navies. See Derrington and Turner, The Law and Practice of Admiralty Matters, (2007) at 222-226 for a good discussion of the role of nautical assessors in admiralty, and of the Corporation of Trinity House. 266 For example, The Orion [1891] P 307 at 310. 267 A similar reluctance can be discerned to the upholding of appeals in criminal cases for years after the enactment of the Criminal Appeal Acts in the various Australian States: eg in relation to the Criminal Appeal Act 1912 (NSW) in Hargan v The King (1919) 27 CLR 13 at 23 where Isaacs J refers to the three grounds of appeal specified by s 6 of the Act as, if made out, providing only a "prima facie" basis for the allowance of appeals. See also Mallard v The Queen (2005) 224 CLR 125 at 128-129 [4] per Gummow, Hayne, Callinan and Heydon JJ. Callinan were for juries and not judges268. There is more than a hint of this in the language of the Lord Chancellor, Lord Herschell, in The "P Caland"269 in his description of a finding of fact as a "mere" matter270. What is remarkable about the cases referred to in Fox v Percy, and in other judgments of this Court in this case, namely Major v Bretherton271, Baffsky v Brewis272, The Commonwealth v Introvigne273, Waltons Stores (Interstate) Ltd v Maher274, Louth v Diprose275 and Bridgewater v Leahy276, is that there is not the slightest reference in any of them to the enactment under which each appeal was brought and in which nowhere is there any distinction made between appeals on questions of law and appeals on questions of fact. 268 Prior to the enactment of the Judicature Acts 1873-1875 (UK) the general appeal was unknown in England outside the courts of equity. In early times, the only form of review was the writ of attaint, by which the unsuccessful litigant might challenge the decision against him by charging the jury with fraud. The proceedings were brought against the members of the jury themselves, and if successful the verdict was set aside and the jurors punished. The writ of attaint was in due course supplemented and later superseded by the writ of error which survived until 1875. The writ of error was concerned exclusively with questions of law. The Judicature Act 1875 (UK) provided for the hearing of a general appeal of the kind available in the past only in equity by the new Court of Appeal. Equity, however, had never made use of juries nor of the common law mode of trial at which, by reason of the presence and role of the jury, evidence was given orally. See Jolowicz, "Appeal and Review in Comparative Law: Similarities, Differences and Purposes", (1986) 15 Melbourne University Law Review 618 at 623-625. 270 [1893] AC 207 at 215. 271 (1928) 41 CLR 62. 272 (1976) 51 ALJR 170; 12 ALR 435. 273 (1982) 150 CLR 258. 274 (1988) 164 CLR 387. 275 (1992) 175 CLR 621. 276 (1998) 194 CLR 457. Callinan Something should also be said about "concurrency" of findings of fact. Very often concurrency is no more than the acquiescence by the intermediate appellate court in the findings made at first instance. The Supreme Court Act 1970 (NSW) and its analogues elsewhere demand more than that. They require that the appellate court properly and fully review the case at trial, as onerous a task as that might on occasion be. In this case however, neither at first instance nor on appeal, were there any primary factual matters of substance in dispute. This is apparent from the material facts that I have summarized at some length, most of which are taken from the first respondent's evidence at trial. It is on the basis of that evidence that the first respondent's case should have failed in the courts below, and must be rejected here. It is not without irony however, that as to a key inferential matter of fact, indeed the one upon which the result turned in each court, there was no concurrency, actual or supposed, between the trial judge and the Court of Appeal, that is, as to the contents of the notional sign which it is said would have deterred the first respondent from climbing on, and diving from the bridge. It is a further irony that, as Gummow J points out, the first respondent was not asked about his likely reaction to the contents of the sign which the Court of Appeal favoured. Responses to that sort of question are predictable and usually not very convincing277, but the first respondent was asked and did answer such a question at the trial about a different one from the one preferred by the Court of Appeal. There was a sense of improvisation in the conduct of the first respondent's case in both of the courts below as to appropriate measures of deterrence of jumping and diving, both generally and in particular. Unfortunately the improvisation in question accepted and adopted in each of the courts differed. As to duty and the nature and extent of the obligations owed in circumstances of the kind in question here, I agree with Gummow J. All parties, as did the courts below, accepted that the well-known formulation of Mason J in Wyong Shire Council v Shirt278 should be applied here279: "In deciding whether there has been a breach of the duty of care the tribunal of fact must first ask itself whether a reasonable man in the defendant's position would have foreseen that his conduct involved a risk of injury to the plaintiff or to a class of persons including the plaintiff. If the answer be in the affirmative, it is then for the tribunal of fact to 277 See Rosenberg v Percival (2001) 205 CLR 434 at 501-502 [214] per Callinan J. 278 (1980) 146 CLR 40. 279 (1980) 146 CLR 40 at 47-48 per Mason J. Callinan determine what a reasonable man would do by way of response to the risk. The perception of the reasonable man's response calls for a consideration of the magnitude of the risk and the degree of the probability of its occurrence, along with the expense, difficulty and inconvenience of taking alleviating action and any other conflicting responsibilities which the defendant may have. It is only when these matters are balanced out that the tribunal of fact can confidently assert what is the standard of response to be ascribed to the reasonable man placed in the defendant's position." The evidence shows that there was a basis for holding that both the appellant and the second respondent should reasonably have foreseen that the bridge and the railing on it, in its current state might present these risks: that the latter might provide a platform for divers and jumpers; and that they might thereby injure themselves, severely, either by jumping or diving on to a passing boat or a submerged bank, or indeed in the water itself. The question then becomes, what was an appropriate response to those risks? That has to be answered by balancing the magnitude of the risk, the degree of probability of its occurrence, and the expense, difficulty and inconvenience of taking alleviating action, and any other conflicting responsibilities of the defendants. In my opinion the trial judge and the majority of the Court of Appeal erred, by failing to undertake this balancing exercise in a sufficient and proper way. Had they done so they would have identified and given full weight to these matters. As to "magnitude", I accept that diving from a height of 8 to 10 metres was itself a risky activity. It was for this reason that it was discouraged by police and officials, banned, and the subject of the pictograph signs. But even so, and despite flagrant defiance of the ban, not one out of the many who had dived in the 40 or so years that had elapsed since the construction of the bridge had been injured, so far as anyone could recall, let alone severely injured. This is to say that the risk, although undisputedly present, had a very low degree of probability of realization. And although the first respondent's injuries were grave, that is of great magnitude, seemingly minor mishaps can sometimes cause grave injuries. Also to be balanced, are the interests of the community in being able to walk across the bridge, to enjoy the view, and to pause and lean in comfort on a flat surface of a top rail as they do so. Only an extremely high unscaleable fence, with perhaps shards of glass embedded in its top, or barbed, or electric, or razor wire, might, on the evidence, have deterred determined and adventurous youths from climbing and jumping. Equally, the substitution of vertical bars for horizontal rails is unlikely to have been an effective deterrent. Other measures such as the provision permanently of a sufficient number of police or other officials would exceed the requirements of a reasonable response. It was only during the course of the trial, during the cross-examination of Mr Keegan, and as a matter of understandable opportunism rather than of deliberation, that the other Callinan measure came to be suggested as one apt to deter climbing and diving: the erection, either in substitution of, or in addition to the top rail, of a metal or wooden rail triangular in shape, laid flat so that a diver would have had to balance himself on its sharp edge before diving. It may be accepted that this measure might have been a relatively inexpensive one, but again, one not so formidable as to constitute a substantial deterrent. It would, in any event, have had these further disadvantages: that a person on it might more easily teeter, overbalance, fall unprepared into the water, or backwards, on to the unfenced roadway, and into the path of a motor vehicle. In any event, the notion that the first respondent and other youths would have heeded a worded sign when they flagrantly disregarded a pictograph sign of unmistakeable the excruciatingly fine distinctions, as each of the courts below did, between the content of the signs actually erected, and other allegedly preferable ones, as to which those courts themselves were not in agreement, was quite unconvincing. import, strains credibility. the making of Indeed, The first respondent was engaged in an activity of a purely recreational kind. The thrill of making, as he did, a high dive which he knew to be banned must have been an attraction for him. To say, as if it were an answer, that the bridge was therefore an allurement280 which the defendants should, on that account, have rectified, is to cease the inquiry at, or to treat as effectively decisive, the state of affairs antecedent to the first respondent's entirely voluntary, and premeditated, prohibited act of diving. But even so, it is something of an exaggeration, to describe a perfectly orthodox bridge constructed to endure for many years, and in accordance with the standards of the time, as an allurement, as if, because youths were accustomed to misuse it, it should be modified to put beyond all chance, that they would do so in the future. A defendant is not an insurer. Defendants are not under absolute duties to prevent injury, or indeed even to take all such measures as might make it less likely to occur. They are obliged only to make such responses as can be seen to be reasonable in the circumstances. A proper balancing exercise which takes all of the relevant circumstances into account leads inescapably to the conclusion that the appellant, in responding to a risk that had not been realized for 40 years, by erecting the pictograph signs, acted reasonably and adequately. The first respondent seeks to rely on a notice of contention as follows: The majority of the Court of Appeal was in error in determining, contrary to the determination of the trial judge, that even without the sign ('no diving' pictogram) it should have been obvious to a 280 [2007] HCATrans 233 at 3465-3535. Callinan reasonable 14 and a half year old that such a dive was dangerous and could lead to catastrophic injuries. That the majority of the Court of Appeal, was in error in determining, contrary to the determination of the trial judge, that the 'no diving' pictogram displayed on the bridge impliedly warned against danger." It is unnecessary to give that notice any additional consideration. What I have said, and the reasoning of Handley JA in the Court of Appeal to which I have referred are an answer to it. Causation was also argued. If it were necessary to determine the question, I would hold for the appellant on it also. The cause was the first respondent's defiance of the sign in full awareness of the presence of the sandbars. For these, and the reasons given by Handley JA which I have quoted, I would allow the appeal. I agree with the orders proposed by Gummow J. 283 HEYDON J. I agree with the orders proposed by Gummow J and with the reasons he gives, and would add only the following. Concurrent findings of fact? This is not an appeal in which it can be said that the courts below made "concurrent findings of fact" in such a way as to inhibit this Court from allowing the appeal. Discordant findings. The findings of the courts below on issues which were crucial to the resolution of the question whether the RTA was in breach of its duty of care were discordant, not concurrent. It is true that the trial judge and a majority of the Court of Appeal agreed that there had been a breach of duty, and in that sense their findings on breach were concurrent. The question of breach of duty is an issue of fact, but the ultimate conclusion about that issue of fact is one which operates at an extremely general level. The crucial findings of the courts below in relation to what measures the RTA, exercising reasonable care, should have adopted were not "concurrent" in the ordinary meaning of language. The trial judge found that a sign warning of "shallow water" would have been ignored by the plaintiff281; the Court of Appeal majority disagreed282. The trial judge thought that the relevant sign should have warned of "Danger, shifting sands, variable depth" and that that sign would probably have prevented the plaintiff's dive283; the Court of Appeal majority disagreed, saying that that sign would have been unlikely to have inhibited the plaintiff from diving, and that the RTA should have erected a composite sign containing a "No Diving" pictogram and the words "shallow water"284. The trial judge said that the RTA should have ensured either that the fence had a triangular top or that the fence should have been of swimming-pool 281 Dederer v Roads and Traffic Authority (2005) Aust Torts Reports ¶81-792 at 282 Great Lakes Shire Council v Dederer (2006) Aust Torts Reports ¶81-860 at 283 Dederer v Roads and Traffic Authority (2005) Aust Torts Reports ¶81-792 at 284 Great Lakes Shire Council v Dederer (2006) Aust Torts Reports ¶81-860 at 68,904-68,905 [243]-[251] per Ipp JA and 68,923 [373] per Tobias JA. style285; the Court of Appeal majority differed by saying that the triangular top "may have dissuaded" the plaintiff from diving, but declining to hold that it would have286, rather saying that that change, taken in combination with pool-type fencing and the different sign, would probably have prevented the accident287. The trial judge thought that the prohibition against diving communicated by the RTA was not a warning; the Court of Appeal majority said it was288. The trial judge thought that the risk was not obvious to a 14 year old boy289; the Court of Appeal majority thought it was290. The concurrency of the findings is further damaged by the fact that Handley JA, dissenting in the Court of Appeal, was at odds with many of the findings made by both the trial judge and the majority. Further, there is discordance on issues not directly material to the question whether the RTA was in breach of its duty of care, but factually closely related to that question: 285 Dederer v Roads and Traffic Authority (2005) Aust Torts Reports ¶81-792 at 286 Great Lakes Shire Council v Dederer (2006) Aust Torts Reports ¶81-860 at 68,906 287 Great Lakes Shire Council v Dederer (2006) Aust Torts Reports ¶81-860 at 68,906 [259]-[261] and 68,914 [310]. 288 Great Lakes Shire Council v Dederer (2006) Aust Torts Reports ¶81-860 at 68,903 289 Dederer v Roads and Traffic Authority (2005) Aust Torts Reports ¶81-792 at 67,533 [87] and 67,534 [93]. 290 Great Lakes Shire Council v Dederer (2006) Aust Torts Reports ¶81-860 at 68,894 The trial judge found the RTA 80 percent liable for the plaintiff's damages and the Council 20 percent liable291; the Court of Appeal found that the Council was not liable at all292. (ii) And the trial judge found 25 percent contributory negligence on the part of the plaintiff293; but the Court of Appeal found 50 percent294. If the basis of the supposed concurrent findings principle is that what two courts have found to be the case may be safely assumed to be the case, it has no operation here, for in every crucial respect the two courts below were in disagreement. It is true that some conclusions may be more acceptable if different lines of reasoning support them. But where conclusions are supported by inconsistent lines of reasoning, one's confidence in the correctness of those conclusions often declines rather than rises. If this case is an instance where the concurrent findings principle is to be applied, it has been misnamed: it should be called a concurrent orders principle. The authorities. It is common for lawyers to speak of the difficulties facing appellants seeking to overcome "concurrent findings" in two courts below. In one sense, all that is meant is that if four judges have agreed on what the facts are, it will be difficult in a practical sense to persuade three more to disagree. From this perspective, the existence of "concurrent findings" creates no technical or rigid bar to appellate intervention. But in another sense, what is meant is that concurrent findings create a barrier to appellate correction, that appellate correction will not take place if only error is demonstrated, and that the appellant must go further and show a different kind of error – error which is in some sense "clear" or which works a plain or manifest injustice. And in Louth v Diprose Deane J said that the relevant principle about concurrent findings applied even if "some conclusions or inferences of fact are based on different reasonings as between the two courts", and even if there was "a dissentient in the first appellate court"295. In principle these last two propositions are difficult to understand in 291 Dederer v Roads and Traffic Authority (2005) Aust Torts Reports ¶81-792 at 292 Great Lakes Shire Council v Dederer (2006) Aust Torts Reports ¶81-860 at 68,874 [1] per Handley JA, 68,891-68,895 [146]-[173] per Ipp JA and 68,916 [325] per Tobias JA. 293 Dederer v Roads and Traffic Authority (2005) Aust Torts Reports ¶81-792 at 294 Great Lakes Shire Council v Dederer (2006) Aust Torts Reports ¶81-860 at 68,874 [1] per Handley JA and 68,915 [316]-[321] per Ipp JA. 295 (1992) 175 CLR 621 at 634. modern Australian conditions. As to the first of Deane J's propositions, it is understandable that a third court might feel trepidation in disagreeing with factual findings on which all the judges of two other courts have already agreed: but it is difficult to understand the trepidation in cases like the present, where the courts below not only did not agree, but were at odds on almost every crucial issue except the ultimate issue of whether there had been a breach of duty. And, as to the second of Deane J's propositions, in cases like the present, where questions of credit are not involved, and where four judges have sat in the courts below, it is hard to see why the supposed concurrent findings principle applies where the dissentient judge sat in the intermediate appellate court and not where the dissentient judge was the trial judge. The reason assigned by Deane J in an earlier case for the concurrent findings principles he enunciated was the desirability of ending "litigation of an issue of fact at least when the stage is reached that one party has succeeded upon it both on the hearing before the court of first instance and on a rehearing before the court of first appeal". He noted that "the cost of litigation has gone a long way towards effectively denying access to the courts to the ordinary citizen who lacks access to government or corporate funding". He saw the finality of which he was speaking as being "in the overall interests of the administration of justice and of the preservation of at least some vestige of practical equality before the law"296. The reduction of cost and the non-denial of access to justice are, of course, important considerations. However, Deane J appears to treat them as supporting the view that it is unjust for a litigant who has succeeded twice on an issue of fact to be deprived of the fruits merely because a final appellate court thinks the courts below were wrong. A competing view is that it is also in the overall interests of the administration of justice that judges reach correct conclusions, and that if their conclusions are erroneous they be corrected on appeal. It may be thought that the likelihood of judges having reached a correct conclusion is greater where they are unanimous, and reduced if there is a dissentient. If so, it remains unclear why the precise court in which the dissentient sits is crucial, so that there is a concurrent findings principle if the dissentient was in the intermediate appellate court but not if the dissentient was the trial judge. Deane J cited authority for the two propositions quoted above – that the concurrent findings principle applies even if the courts below differ in their reasoning, and even if there is a dissentient in the first appellate court. That authority was the Privy Council decision of Devi v Roy. In that appeal, decided in 1946, the Board (Lord Thankerton, Lord du Parcq and Sir Madhavan Nair) examined many Privy Council decisions reached over the previous 85 years. 296 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 434-435. They concluded that the Privy Council had a practice of not disturbing concurrent findings of fact. Two aspects of that practice were297: "(2) That it applies to the concurrent findings of fact of two courts, and not to concurrent findings of the judges who compose such courts. Therefore a dissent by a member of the appellate court does not obviate the practice[298]. (3) That a difference in the reasons which bring the judges to the same finding of fact will not obviate the practice." They also said299: "(7) That the Board will always be reluctant to depart from the practice in cases which involve questions of manners, customs or sentiments peculiar to the country or locality from which the case comes, whose significance is specially within the knowledge of the courts of that country." That was a consideration mentioned as well in some of the authorities they analysed, and, for the Privy Council, it may well remain a powerful one. In 1946 it was a particularly powerful consideration. In that year, and for many decades earlier, the Privy Council could hear appeals from numerous jurisdictions spread across all five continents. Many appeals would have been heard by judges lacking an understanding of local conditions in these extremely diverse jurisdictions. The position of the Privy Council at that time and earlier was very 297 [1946] AC 508 at 521. 298 In this respect South Australia v Johnson (1982) 42 ALR 161 at 167 may qualify the doctrine, for there Gibbs CJ, Mason, Murphy, Wilson and Brennan JJ said: "This appeal requires the court to review and evaluate a vast body of evidence, much of which is in conflict, yet upon which the findings of the learned trial judge have been substantially confirmed by a unanimous Full Court. In such a case, the appellant naturally faces a difficult task in showing that the challenged findings were erroneous ... This court will give the greatest respect to such concurrent findings, although free of course to depart from them if convinced that they are wrong." Depending on the force of the word "convinced", that is a more defensible proposition. It would not assist the plaintiff, for here the Court of Appeal did not "substantially" confirm the trial judge's findings, nor was there unanimity in the Court of Appeal. 299 [1946] AC 508 at 521. different from that of this Court, which with limited exceptions hears appeals only from the federal courts and States and mainland Territories of Australia, to which one Constitution applies, and to which a single common law applies unless modified by Commonwealth legislation, usually of universal application, or State or Territorial legislation, often uniform in character. What is more, while there is some social heterogeneity to be observed among the residents affected by the laws of each jurisdiction, there is no radical difference between the jurisdictions in this respect. It is not the case that there are particular aspects of local conditions with which trial judges and intermediate appellate courts are far better equipped to deal than this Court. That difference in position is a reason for strongly doubting the applicability of the concurrent findings principle to this Court300. A further reason for doubting the applicability of the principle to this Court is that among the propositions stated at the end of the Privy Council's reasoning is the following301: "(4) That, in order to obviate the practice, there must be some miscarriage of justice or violation of some principle of law or procedure. That miscarriage of justice means such a departure from the rules which permeate all judicial procedure as to make that which happened not in the proper sense of the word judicial procedure at all. That the violation of some principle of law or procedure must be such an erroneous proposition of law that if that proposition be corrected the finding cannot stand; or it may be the neglect of some principle of law or procedure, whose application will have the same effect." It cannot be the law in Australia that this Court will only depart from concurrent findings where what "happened [was] not in the proper sense of the word judicial procedure at all". That is not how exceptions to the concurrent findings principle have been stated in this Court. If the second and third propositions quoted above lead to, or are integrally linked with, a proposition which is in this Court as erroneous as the fourth is, the applicability in this Court of the second and third propositions themselves must be questionable. Further, as the Privy Council made plain in Robins v National Trust Co302: 300 See Muschinski v Dodds (1985) 160 CLR 583 at 590-591 per Gibbs CJ. 301 [1946] AC 508 at 521. The language derives from that of Viscount Dunedin in Robins v National Trust Co [1927] AC 515 at 518. 302 [1927] AC 515 at 517 per Viscount Dunedin. "The rule as to concurrent findings is not a rule based on any statutory provision. It is rather a rule of conduct which the Board has laid down for itself. As such it has gradually developed." It must be seriously doubted whether it is right for this Court to adopt for itself a rule of conduct which the Board laid down without reference to any statutory provision, at least without counsel appearing before this Court, and the Court itself, conducting a close analysis of the constitutional and statutory provisions concerning appeals to this Court in a case in which the existence or non-existence of the supposed concurrent findings principle is crucial to the outcome. Finally, apart from Privy Council cases, the authorities that support the concurrent findings principle are, with respect, slight. The point is usually put in passing, as a makeweight for conclusions arrived at on other, more specific and substantial grounds. Thus in the first case on the point in this Court, Major v Bretherton, only Isaacs J devoted much attention to it303. Starke J mentioned it very briefly304. Knox CJ and Gavan Duffy J did not mention it at all. The fifth "The attitude of the Judicial Committee as the final tribunal of the Empire as to its own practice is not necessarily to be the attitude of this Court; and the question whether we shall treat ourselves as being subject to such a rule in our endeavours to do justice after weighing all the circumstances of the case before us should not be decided until the subject has received much more attention than has been possible in this case. In my opinion, the question should be left open until such a decision becomes necessary." The subject received no attention in argument from the parties on the present appeal, apart from a short submission by the plaintiff that there were some concurrent findings. The reports of the other well-known cases in this Court do not suggest that the subject received attention in argument in them306. What is 303 (1928) 41 CLR 62 at 68-71. 304 (1928) 41 CLR 62 at 74. 305 (1928) 41 CLR 62 at 74. 306 Baffsky v Brewis (1976) 51 ALJR 170; 12 ALR 435; The Commonwealth v Introvigne (1982) 150 CLR 258 at 274 (recording a concession by counsel); South Australia v Johnson (1982) 42 ALR 161 at 167; Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; Louth v Diprose (1992) 175 CLR 621; Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603 at 618 [39]; Bridgewater v Leahy (1998) 194 CLR 457; Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540. more, Gibbs CJ maintained that this Court had not adopted the Privy Council rule of practice, and said: "Where concurrent findings are challenged, it remains the duty of this Court to depart from them if it considers them to be erroneous."307 And in the House of Lords the Earl of Halsbury LC said of the Privy Council doctrine: "I have repeatedly protested against the views cited. I feel that where a tribunal has to review a question of fact, it must do it to the best of its ability."308 In the same case Lord Davey said that the Privy Council doctrine was sound if "regarded merely as a guide to the judgment of the tribunal and not as a rule of law or practice."309 He also said310: "In every case the appellant assumes the burden of shewing that the judgment appealed from is wrong, and when it depends on an estimate of probabilities or inferences so nicely balanced that it is impossible to say that a decision either way would be wrong, every material fact having received due consideration, your Lordships would, I make no doubt, be disposed to affirm the concurrent decision of the Courts below." In these circumstances it is undesirable to treat the concurrent findings principle as beyond argument until proper argument has taken place in a case in which "such a decision becomes necessary". Exception to concurrent findings principle. In any event, even if it is appropriate to treat the concurrent findings principle as a rule of law until such time as it is examined closely after full argument, the statements of it in the House of Lords and in this Court accept that it does not apply if the supposedly concurrent findings are "clearly demonstrated ... [to be] erroneous"311, or there is "a tolerably clear conviction"312 or a "clear conviction"313 that they are erroneous, or there are "special reasons such as plain injustice or clear error"314. The errors 307 Muschinski v Dodds (1985) 160 CLR 583 at 590-591. 308 Montgomerie & Co Ltd v Wallace-James [1904] AC 73 at 75 (in argument). 309 Montgomerie & Co Ltd v Wallace-James [1904] AC 73 at 83. 310 Montgomerie & Co Ltd v Wallace-James [1904] AC 73 at 83. 311 Owners of the "P Caland" and Freight v Glamorgan Steamship Co Ltd [1893] AC 207 at 215 per Lord Herschell LC. 312 Owners of the "P Caland" and Freight v Glamorgan Steamship Co Ltd [1893] AC 207 at 216 per Lord Watson. 313 Major v Bretherton (1928) 41 CLR 62 at 71 per Isaacs J. 314 Louth v Diprose (1992) 175 CLR 621 at 634 per Deane J. of factual inference identified by Gummow J and by Callinan J are clear, and they led to a plain injustice. Breach of duty In recent years attempts to argue that the test stated in Wyong Shire Council v Shirt315 is erroneous have not succeeded. Until they do, it is necessary to apply that test, properly understood. I agree with the reasons given by Gummow J for deciding that its application leads to the conclusion that the RTA was not in breach of duty. Costs In view of the fact that a majority favour the allowing of the appeal, it is not necessary to consider whether the Court of Appeal was correct in refusing the plaintiff's application for a Sanderson order. Had it been necessary to do so, I would have agreed with the reasoning of Kirby J on this point316, and would add only the following. Though no doubt this was not its purpose, the effect of the RTA's conduct was to mislead the plaintiff's advisers into a course which led to him not starting an action against the Council at a propitious time, only starting an action against it at an unpropitious time, failing in that action, and as a result incurring a responsibility for payment of the Council's costs. Counsel for the RTA defended the Court of Appeal's approach by saying that it was not for the RTA to advise the plaintiff's professional advisers as to whether the Council had any responsibility for the bridge and for the signs positioned on it. To this there are two answers. First, it may be open to some potential defendants to take that stand. It seems wrong for a corporation like the RTA to do so in resistance to an application for a Sanderson order. The RTA is, for the purposes of any Act, a statutory body representing the Crown: Transport Administration Act 1988 (NSW), s 46(2)(b). Its affairs are managed and controlled by its Chief Executive, who is appointed by the Governor: ss 47(1) and 48(1). The Chief Executive is, in the exercise of his or her functions, subject to the control and direction of a Minister: s 49. The RTA is in that sense a governmental organisation. It is a truism that statutory bodies of that kind should be model litigants: counsel for the RTA accepted that this was so "without question". A terrible thing had happened to a child. The solicitors for that child were not busybodies. Their 315 (1980) 146 CLR 40 at 47-48 per Mason J. 316 Reasons of Kirby J at [176]-[193]. request of the RTA was not a trivial one. It was possible that the RTA – a very wealthy and powerful organisation – was liable in tort. It was also possible that the Council – doubtless much less wealthy, but better resourced than the plaintiff and his parents – was liable. There is nothing wrong with wealthy and powerful defendants requiring plaintiffs to prove their cases, but in the circumstances, as a matter of common humanity, not legal duty, the RTA ought not only to have attempted to tell the plaintiff's advisers who controlled the bridge, as it did, but also to have stated the underlying facts correctly. This was particularly so in view of what the trial judge eventually found was the close relationship between the RTA and the Council317. Counsel for the RTA submitted that no responsibility could be attributed to the RTA because the plaintiff had "professional advisers who bring equality of arms", and hence there was no duty on the RTA to have answered the query of the plaintiff's solicitors at all. "Equality of arms" is a blessed phrase. However, many of the factual matters on which the trial judge relied to reach his conclusions as to the responsibilities of the RTA and the Council for the bridge were far from being readily ascertainable by an outsider, being internal to the workings of government, and to some extent being ancient. There was no equality of arms at all in that respect. If it be said that the question of who controlled the bridge was not an easy one even for insiders, the insiders had no apparent difficulty in making allegations in the RTA's pleadings about the control of the bridge which turned out to be correct. But whether or not the RTA was under any obligation to respond to the request made by the plaintiff's solicitors, and whether or not it was under any obligation to respond more fully or to respond correctly, the fact is that it did respond in the way it did. Its response was confirmed by the identical response from the Council. The response was erroneous. That error led the plaintiff to lose an opportunity to start proceedings against the Council at an advantageous time, before the germination and enactment of legislation which eventually caused his claim against the Council to fail. More crucially for present purposes, the reversal by the RTA of the stand it had taken about who was responsible for the bridge, and the RTA's suggestion, by its indication that it wished to amend its pleadings in September 2003, that the Council might be liable to the plaintiff, which it had up to that point denied, caused the plaintiff's advisers to join the Council, but at a much more disadvantageous time. Thus whether or not the RTA had any duty to cooperate when it was originally asked about who was responsible for the bridge, the fact that it responded as it did, and thereafter behaved as it did, would have made a Sanderson order just had the plaintiff succeeded against the RTA. 317 Dederer v Roads and Traffic Authority (2005) Aust Torts Reports ¶81-792 at

HIGH COURT OF AUSTRALIA HUTCHISON 3G AUSTRALIA PTY LTD APPELLANT AND CITY OF MITCHAM & ORS RESPONDENTS Hutchison 3G Australia Pty Ltd v City of Mitcham [2006] HCA 12 6 April 2006 ORDER Appeal allowed. Set aside so much of the order of the Full Court of the Supreme Court of South Australia made on 11 March 2005 as answered the questions set out in the Case Stated filed on 27 January 2004 and, in its place, order that the questions be answered as follows: In the events which have happened except at Clarence Gardens, are the stobie poles erected by ETSA when fitted with the facilities placed upon each by Hutchison, a tower within the Telecommunications Act 1997 (Cth)? the meaning of cl 6 of Sched 3 of No, because the stobie poles are not and do not become facilities for the purposes of the Telecommunications Act 1997 (Cth) notwithstanding the installation on them of Hutchison's facilities. Therefore, the stobie poles are not and do not become towers within the meaning of cl 6 of Sched 3 of that Act. In the events which have happened except at Clarence Gardens, has Hutchison erected low-impact facilities within the Telecommunications (Low-impact the meaning of Facilities) Determination 1997 (Cth) having regard to the facts that: the new or replaced stobie pole together with the facilities installed by Hutchison constitute more than a 25% increase in the apparent volume of the original stobie pole; or the air conditioning units in the equipment shelters for the facility emit noise; or the distance from the top of the stobie pole to the top of the panel antennae exceeds 3 metres? Yes, and on the basis that the fact referred to in question 1.2(a) is not relevant to the identification of low-impact facilities in the Telecommunications (Low-impact Facilities) Determination 1997 (Cth). In the events which have happened except at Clarence Gardens, is either or both Hutchison and ETSA required to obtain development approval from the relevant authority pursuant to the Development Act 1993 (SA) for the erection of the stobie poles replaced by ETSA and if so by which party? In the events which have happened at the Clarence Gardens site, is the downlink facility established by Hutchison a low- the impact Telecommunications (Low-impact Facilities) Determination 1997 (Cth) having regard to the facts that: the meaning facility within the air conditioning units shelter for the facility emit noise; or the equipment the distance from the top of the stobie pole to the top of the panel antennae exceeds 3 metres? Yes. Is the Council entitled to a declaration in respect of each site that the replacement of the stobie poles (save for Clarence Gardens) together with the installation of the telecommunications facilities thereon is development which requires the Development Act 1993 (SA)? development approval pursuant Set aside order 1 of the Full Court of the Supreme Court of South Australia made on 11 March 2005 and, in its place, order that the City of Mitcham pay the costs of Hutchison, CKI Utilities Development Ltd, HEI Utilities Development Ltd, CKI Utilities Holdings Ltd, HEI Utilities Holdings Ltd and CKI/HEI Utilities Distribution Ltd of and incidental to the Case Stated. The City of Mitcham and the Attorney-General for the State of South Australia pay Hutchison's costs of the appeal to this Court. On appeal from the Supreme Court of South Australia Representation: R J Whitington QC with S W Henry for the appellant (instructed by Minter Ellison). B R M Hayes QC with G Manos for the first respondent (instructed by Norman Waterhouse). Submitting appearance for the second to sixth respondents. C J Kourakis QC, Solicitor-General for the State of South Australia with C Jacobi for the seventh respondent (instructed by Crown Solicitor's Office South Australia). Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS HUTCHISON 3G AUSTRALIA PTY LTD v CITY OF MITCHAM Post and telecommunications – Telephonic and related services – Structures for telecommunications purposes – Appellant was a licensed telecommunications carrier under Div 3 of Pt 3 of the Telecommunications Act 1997 (Cth) – Appellant installed certain telecommunications facilities ("downlink sites") upon structures ("stobie poles") erected by second to sixth respondents ("ETSA") – Some stobie poles replaced by ETSA at the cost of the appellant for the purpose of installation of downlink sites – Appellant had notified first respondent of intention to do so without applying for development approval pursuant to the Development Act 1993 (SA) – First respondent issued enforcement notices pursuant to s 84 of the Development Act – Appellant challenged notices – Whether either or both of the appellant or ETSA were required to obtain development approval – Whether in relation to the replacement of certain stobie poles the appellant undertook "development" within the meaning of the Development Act – Whether stobie poles when fitted with downlink sites were "towers" within the meaning of cl 6 of Sched 3 to the Telecommunications Act – Whether replacement stobie poles were "towers" – Whether downlink sites were "low-impact facilities" within the meaning of Sched 3 to the Telecommunications Act – Whether downlink sites constituted "co-located facilities" for the purposes of Pt 7 of the Schedule to the Telecommunications (Low-impact Facilities) Determination 1997 (Cth) ("the Determination") – Whether noise emitted by an equipment shelter is relevant to "the levels of noise that are likely to result from the operation of the co-located facilities" for the purposes of Item 2 of Pt 7 of the Schedule to the Determination. Constitutional law (Cth) – Inconsistency of laws – Telecommunications Act did not "cover the field" of the regulation of the installation of the appellant's downlink facilities to the exclusion of the Development Act – Federal statutory policy included the efficient establishment and maintenance of nationwide and international telecommunications facilities in Australia – Relevance of statutory policy of co-operation between federal and State instrumentalities – Whether necessary to resolve possible constitutional questions of inconsistency of laws. Words and phrases – "low-impact facility", "tower", "co-located facilities", "facility", "to undertake development". Judiciary Act 1903 (Cth), ss 78A, 79. Telecommunications Act 1997 (Cth), s 7, Sched 3. Crown Proceedings Act 1992 (SA), s 9(2). Development Act 1993 (SA), ss 4, 32, 33, 49A, Sched 14A. Electricity Act 1996 (SA), s 23(1)(j). Constitution, s 109. GLEESON CJ, GUMMOW, KIRBY, HAYNE AND HEYDON JJ. In their joint reasons in Bayside City Council v Telstra Corporation Ltd1, Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ observed that: "[p]rovisions dealing with the application of State laws to the conduct of service providers carrying on activities authorised by the Commonwealth pursuant to s 51(v) [of the Constitution] are familiar." impose rates and charges on activities relating That case concerned the validity of certain provisions enacted by the legislatures of New South Wales and Victoria which empowered local authorities involving, telecommunications cables. This Court held that s 109 of the Constitution had been enlivened, and the State laws rendered inoperative, by the inclusion in the Telecommunications Act 1997 (Cth) ("the Telco Act") of a provision which denied the effect of any State law that discriminated against telecommunications carriers2. to, and The present litigation concerns interaction between the Telco Act and legislation of South Australia. Whilst s 109 of the Constitution appears to have been invoked in the conduct of the case in the Supreme Court of South Australia, this was not decisive in the result reached there. In this Court, any reliance upon constitutional inconsistency was eschewed by the appellant and the appeal falls to be determined upon issues of construction of concurrently operating federal and State laws. However, the constitutional paramountcy of federal law is a contextual consideration that informs the resolution of the contested issues of interpretation argued in this appeal. Moreover, as will be shown3, co-operation between the relevant federal and State instrumentalities is a policy mandated by both federal and State law. At the conclusion of these reasons, we will return to this issue of interaction of the two systems of law4. The appellant ("Hutchison") is a licensed telecommunications carrier under the provisions of Div 3, Pt 3 of the Telco Act. Hutchison denies any application to it, in respect of its erection of certain telecommunications facilities, (2004) 216 CLR 595 at 618 [11]. 2 Sched 3, Pt 1, Div 8, cl 44. 3 See at [42]. 4 See at [107]-[110]. Kirby Hayne of the requirement for development approvals under the provisions of the Development Act 1993 (SA) ("the Development Act"). Those facilities are known as "downlink sites" and were installed by Hutchison during 2002 and early in 2003 as part of its mobile telecommunications network. The downlink sites are at five locations in suburban Adelaide which are referred to, for convenience, as the Colonel Light Gardens site, the Bellevue Heights site, the Torrens Park site, the Kingswood site and the Clarence Gardens site. All five of these locations fall within the area of the first respondent, the City of Mitcham ("the Council"). Pursuant to s 34 of the Development Act, where a proposed development is to be undertaken within the area of the Council, the Council is, for the purposes of Div 1, Pt 4 of that statute, the "relevant authority" and thus empowered by s 33 to assess, and to grant or refuse approval to, the proposed development. The second to sixth respondents entered a submitting appearance to the appeal. They are a group of companies trading together as ETSA Utilities ("ETSA") under the terms of a licence which authorises the operation of an electricity distribution network. The licence was granted by the Essential Services Commission ("the Commission") pursuant to Pt 3 of the Electricity Act 1996 (SA) ("the Electricity Act"). As will become apparent, the facilities established by Hutchison were installed upon structures which ETSA either had already erected or replaced in pursuance of an arrangement with, and at the cost of, Hutchison itself. The litigation Between August 2002 and February 2003, Hutchison notified the Council of its intention to install its downlink facilities by a letter in respect of each of certain locations. However, neither Hutchison nor ETSA applied to the Council for development approval in respect of the downlink sites. In April 2003, pursuant to s 84 of the Development Act5, the Council issued a series of enforcement notices addressed to Hutchison relating to each 5 Section 84(2), so far as material, provides: "If a relevant authority has reason to believe on reasonable grounds that a person has breached this Act or a repealed Act, the relevant authority may do such of the following as the relevant authority considers necessary or appropriate in the circumstances: (Footnote continues on next page) Kirby Hayne downlink site and requiring Hutchison to cease work that had not been approved by the Council under the provisions of the Development Act. Hutchison challenged the notices by proceedings in the Environment, Resources and Development Court of South Australia ("the Environment Court"). The sole ground of challenge was that the downlink sites were low-impact facilities within the meaning of Sched 3 to the Telco Act, and, as such, did not require development approval under the Development Act. By a separate proceeding instituted in the Supreme Court on 18 December 2003, the Council sought declarations to the effect that each downlink site did require development approval under the provisions of the Development Act. The Council also sought injunctions requiring Hutchison to lodge development applications in respect of those downlink sites and to remove the facilities from the stobie poles on which they had been erected. Subsequently, the Council agreed with Hutchison to suspend the notices and to permit Hutchison to complete the installation of the downlink sites. Those parties also agreed that the proceedings in the Environment Court would be stayed pending the hearing and determination of the action in the Supreme Court. By an order dated 19 January 2004, and with the concurrence of all parties, Debelle J referred to the Full Court of the Supreme Court a case stated pursuant to r 72.01 of the Supreme Court Rules (SA) ("the Case Stated")6. In the proceedings before that Court, the Council was plaintiff, and both Hutchison and ETSA were defendants. The Full Court directed that notice of a constitutional matter be given to the Attorneys-General of the Commonwealth and the States pursuant to s 78B of the Judiciary Act 1903 (Cth) ("the Judiciary Act"). In response to that notice, the Attorney-General for South Australia intervened in the proceedings before the Full Court in support of the case advanced by the Council. That intervention was (a) direct a person to refrain, either for a specified period or until further notice, from the act, or course of action, that constitutes the breach." 6 Rule 72.01 provides: "The parties to a proceeding may by leave of the Court concur in stating the questions of law arising therein in the form of a special case for the opinion of the Court." Kirby Hayne described on the subsequent special leave application to this Court as having been supported by the Crown Proceedings Act 1992 (SA)7 ("the Crown Proceedings Act"). The Supreme Court was exercising federal jurisdiction and a State statute such as the Crown Proceedings Act could not apply of its own force8. The Solicitor-General submitted that the Crown Proceedings Act had been "picked up", presumably by s 79 of the Judiciary Act9, and applied in the exercise of federal jurisdiction by the Full Court. 7 Section 9(2) of the Crown Proceedings Act reads: "The Attorney-General may intervene, on behalf of the Crown, in any proceedings – (a) in which the interpretation or validity of a law of the State or Commonwealth is in question; (b) in which – (i) legislative or executive powers of the State or Commonwealth, or of an instrumentality or agency of the State or Commonwealth are in question; or (ii) judicial powers of a court or tribunal established under the law of the State or Commonwealth are in question; (c) in which the Court grants leave to intervene on the ground that the proceedings raise issues of public importance, for the purpose of submitting argument on issues of public importance." 8 Solomons v District Court (NSW) (2002) 211 CLR 119. 9 Section 79 provides: "The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable." Kirby Hayne However, the operation of s 79 is expressed to be subject to "the laws of the Commonwealth". Section 78A(1) of the Judiciary Act is one such law. That provision states: "The Attorney-General of the Commonwealth may, on behalf of the Commonwealth, and the Attorney-General of a State may, on behalf of the State, intervene in proceedings before the High Court or any other federal court or any court of a State or Territory, being proceedings that relate to a matter arising under the Constitution or involving its interpretation." Because s 79 requires that recourse be had to s 78A(1) before any attention is given to the Crown Proceedings Act, it would appear that s 78A is the more appropriate basis for intervention by the Attorney-General. It is unnecessary, however, to pursue the point any further, beyond noting that the Attorney- General is a party to the appeal in this Court, as the seventh respondent, and that the Solicitor-General appeared and made submissions in opposition to the appeal and in support of the Council. The questions posed in the Case Stated were in the following terms: In the events which have happened except at Clarence Gardens, are the stobie poles erected by ETSA when fitted with the facilities placed upon each by Hutchison, a tower within the meaning of clause 6 of Schedule 3 of [the Telco Act]? has Hutchison erected low-impact facilities within the meaning of the Telecommunications (Low-Impact Facilities) Determination 1997 [('the Determination')] having regard to the facts that: the new or replaced stobie pole together with the facilities installed by Hutchison constitute more than a 25% increase in the apparent volume of the original stobie pole; or the air conditioning units in the equipment shelters for the facility emit noise; or the distance from the top of the stobie pole to the top of the panel antennae exceeds 3 metres? Kirby Hayne is either or both Hutchison and ETSA required to obtain development approval from the relevant authority pursuant to [the Development Act] for the erection of the stobie poles replaced by ETSA and if so by which party? In the events which have happened at the Clarence Gardens site, is the downlink facility established by Hutchison a low-impact facility within the meaning of [the Determination] having regard to the facts that: the air conditioning units in the equipment shelter for the facility emit noise; or the distance from the top of the stobie pole to the top of the panel antennae exceed[s] 3 metres? Is the Council entitled to a declaration in respect of each site that the replacement of the stobie poles (save for Clarence Gardens) together with the installation of the telecommunications facilities thereon is development which requires development approval pursuant to [the Development Act]?" By an order made on 11 March 2005, the Full Court answered these questions as follows: 1.1 Yes. 1.2 Unnecessary to answer. Either of them is required to obtain development approval. It is not a low-impact facility, by reason of the emission of noise. Not answered. The entitlement, if any, to a declaration is a matter for the trial judge. The effect of the answers given by the Full Court10 (Perry and Gray JJ; Bleby J dissenting) to the questions posed in the Case Stated is that either one of Hutchison or ETSA was required to obtain development approvals from the 10 City of Mitcham v Hutchison 3G Australia Ltd (2005) 91 SASR 111. Kirby Hayne Council in respect of the establishment of the downlink sites. Hutchison now appeals to this Court, arguing that none of the federal or State legislation constrained its activities or those of ETSA in the present case. The appeal should be allowed. It should also be noted that the Council has not filed a notice of contention seeking to recontest the issues covered in question 1.2 or in par (b) of question 2. In particular, it made no submissions challenging the correctness of the Full Court's rejection of its contention that the downlink sites were not low-impact facilities because the distance from the top of each stobie pole to the top of the panel antennae installed upon it exceeded 3 metres. Nor did it seek to re-open the issue of the increase in volume caused by the replacement of the stobie poles at each of the locations other than the Clarence Gardens site. That issue had not been decided by the Full Court. Consequently, the issues to be decided in this appeal may be confined to questions 1.1, 1.2(b), 1.3, 2(a) and 3 in the Case Stated. Before turning to consider the circumstances surrounding the installation of the downlink sites further, something should be said of the legislative provisions upon which the litigation turns. The Telco Act The joint reasons in Bayside remarked that the Telco Act provides for11: "a regulatory framework which was intended to promote the development of an efficient and competitive telecommunications industry, including the supply of carriage services[12] to the public, and to ensure that such services are reasonably accessible, and are supplied efficiently and economically to meet the social and business needs of the Australian community (s 3)". 11 (2004) 216 CLR 595 at 616 [7]. 12 The term "carriage service" is defined in s 7 of the Telco Act to mean "a service for carrying communications by means of guided and/or unguided electromagnetic energy". Kirby Hayne To that end, the Telco Act contemplates a system of telecommunications under which carriage services are provided to the public by the owners of network units, subject to their holding carrier licences which are granted by the Australian Communications and Media Authority (ss 42 and 56). Part 2 of the Telco Act defines the term "network unit". In so doing, it gives recognition to four types of network unit, these being single line links, multiple line links, designated radiocommunications facilities and facilities specified in a Ministerial determination. The word "facility" is defined in s 7 to mean: any part of the infrastructure of a telecommunications network; or any line, equipment, apparatus, tower, mast, antenna, tunnel, duct, hole, pit, pole or other structure or thing used, or for use, in or in connection with a telecommunications network". The expression "telecommunications network" is in turn defined to mean "a system, or series of systems, is capable of carrying, communications by means of guided and/or unguided electromagnetic energy". that carries, or The focus of this litigation is Sched 3 to the Telco Act. This is headed "Carriers' powers and immunities" and contains two Parts. Part 2 deals with transitional arrangements. Part 1 is headed "General provisions" and contains 55 clauses spread across eight Divisions. Division 2 (cl 5) empowers a carrier, among other things, to enter on and inspect land for the purposes of determining whether that land is suitable for its purposes. Division 3 (cl 6) is headed "Installation of facilities". Pursuant to cl 6(1): "[a] carrier may, for purposes connected with the supply of a carriage service, carry out the installation of a facility if: the facility is a low-impact facility (as defined by subclause Clause 6(3) provides in turn that: "[t]he Minister may, by written instrument, determine that a specified facility is a low-impact facility for the purposes of this clause. The determination has effect accordingly." Kirby Hayne However, the Minister's power thus to determine is, to a significant degree, circumscribed by cl 6(5), (6) and (7). Those provisions are in the following terms: "(5) A tower must not be specified in an instrument under subclause (3) unless: the tower is attached to a building; and the height of the tower does not exceed 5 metres. To avoid doubt, a reference in subclause (5) to a tower does not include a reference to an antenna. (7) An extension to a tower must not be specified in an instrument under subclause (3) unless: the height of the extension does not exceed 5 metres; and there have been no previous extensions to the tower. For this purpose, tower has the same meaning as in clause 4." The term "tower" is defined in cl 4 of Sched 3 to mean "a tower, pole or mast". The effect of the provisions set out above is that any tower or extension to a tower that does not satisfy the requirements stipulated therein is necessarily excluded from the ambit of the expression "low-impact facility". Division 7 (cll 36-39) is headed "Exemptions from State and Territory laws" and, in particular, cl 37 is of great importance. Clause 37 applies to an activity carried on by a carrier if the activity is authorised by Div 313. Clause 37(2) relevantly provides that the carrier in question may engage in that activity: "despite a law of a State or Territory about: town planning; or 13 Or by Div 2 or Div 4; the latter Division deals with maintenance of facilities. Kirby Hayne the planning, design, siting, construction, alteration or removal of a structure". The installation of a low-impact facility by a telecommunications carrier thus attracts an exemption from the State laws identified in cl 37. The submissions advanced by Hutchison proceeded from the premise that cl 37 applies in the present case. It was Hutchison's contention that the downlink sites installed by it were all low-impact facilities within the meaning of cl 6(3) of Sched 3, and therefore that the operation of Div 1, Pt 4 of the Development Act was excluded in so far as it imposed a requirement of approval by the Council for the erection of those facilities. Whether this syllogism holds true is dependent upon the content to be given to the concept of a "low-impact facility". For that reason, detailed reference must be made to the Determination. That instrument was made pursuant to cl 6(3) of Sched 3. The Determination The Determination provides for seven categories of low-impact facility, each of which is described at some length in each of the seven Parts in the Schedule to the Determination. One of the criteria by which it is determined in the Schedule that a facility erected by a telecommunications carrier is a low-impact facility is the nature of the area in which it is installed (cl 3.1(1)). Column 2 of the Schedule sets out the specifications of each facility determined to be a low-impact facility, and column 3 identifies the areas in which such a facility may permissibly be installed. Clause 2.3(1) of the Determination provides that "[a]n area is a residential area if its principal designated use is for residential purposes". As was indicated in the Case Stated, all five locations at which Hutchison installed its downlink sites are in residential areas within the meaning of the Determination. Relevantly for this appeal, Pt 1 of the Schedule to the Determination is headed "Radio facilities" and Pt 7 "Co-located facilities". Clause 1.3 defines the expression "co-located facilities" to mean: "one or more facilities installed on or within: Kirby Hayne an original facility[14]; or a public utility structure". Included within the definition of "public utility structure" is a structure used, or for use, by a public utility, for the provision to the public of "reticulated products or services, such as electricity, gas, water, sewerage or drainage". The term "public utility" is in turn defined to have the same meaning as in Sched 3 to the Telco Act. Clause 2 of that Schedule defines "public utility" to mean, among other things, a body that provides to the public "reticulated products or services, such as electricity, gas, water, sewerage or drainage". It is not disputed that ETSA is, for the purposes of both Sched 3 to the Telco Act and the Determination, a public utility. Mention has already been made of the circumstance that Pt 1 of the Schedule to the Determination deals with radio facilities. Item 3 of Pt 1 describes as a low-impact facility, if installed in a residential area, any: "[p]anel, yagi or other like antenna: not more than 2.8 metres long; and if the antenna is attached to a structure – protruding from the structure by not more than 3 metres; and either: colour-matched to its background; or 14 The term "original facility" is defined in cl 1.3 of the Determination to mean: "the original structure that is currently used, or intended to be used, for connection to a telecommunications network where the original structure was: (a) in place on the date on which the Telecommunications (Low-impact Facilities) Determination 1997 (Amendment No 1 of 1999) took effect; (b) installed after that date by means other than in accordance with Part 7 of the Schedule." Kirby Hayne in a colour agreed in writing between the carrier and the relevant local authority". Item 2 of Pt 7 of the Schedule, which is concerned with co-located facilities, recognises as a low-impact facility, if installed within a residential area, any: "[f]acility mentioned in: Part 1, 5 or 6; or item 3 of Part 4; installed on or within: an original facility; or a public utility structure; where: the total volume of the co-located facilities is no more than 25 per cent greater than the volume of the original facility or the original infrastructure; and the levels of noise that are likely to result from the operation of the co-located facilities are less than or equal to the levels of noise that resulted from the operation of the original facility or the public utility structure." In this Court, as in the Full Court, Hutchison submitted that its downlink sites fell within the terms of the items set out above. Something further will be said in these reasons by way of description of these facilities. Presently, it is necessary to consider the steps by which ETSA became involved in the matters the subject of this litigation and the consequences which may be thought to flow from them. Kirby Hayne ETSA's relationship with Hutchison The Telco Act15 confers upon the Minister the power, by written instrument, to make a Code of Practice setting out conditions that are to be complied with by carriers in relation to any or all of the activities covered by Div 2, 3 or 4 of Pt 1 of the Schedule. As has already been indicated, those activities include the installation of a low-impact facility. The Telecommunications Code of Practice 1997 ("the Code of Practice") was made under this authority. Clause 4.13 of that instrument provides: "(1) Before engaging in a low-impact facility activity, a carrier must take all reasonable steps to find out whether any of the following things (existing facilities) is available for the activity: cabling, conduits or other facilities of the carrier or another carrier; or a facility of a public utility; or an easement attaching to the land for a public purpose. The carrier must take all reasonable steps to use existing facilities for the activity." Significantly, "public utility" is defined in the Code of Practice to include a body that provides to the public "reticulated products or services, such as electricity, gas, water, sewerage or drainage". The circumstance that ETSA holds a licence under Pt 3 of the Electricity Act has previously been adverted to in these reasons. It will be necessary later to consider the relationship between the provisions of the Electricity Act and those of the Development Act. Clause 20 of ETSA's licence under the Electricity Act provides that: "[t]he Licensee must comply with the requirements of the Electricity Transmission Code relating to: 15 Sched 3, cl 15. Kirby Hayne other bodies having access to the Licensee's distribution network for telecommunications purposes; and concerning the resolution of disputes relating to the access and use of the Licensee's distribution network referred to in paragraph The Electricity Transmission Code ("the Transmission Code") was made by the Commission pursuant to s 23(1)(j) of the Electricity Act16. Clause 12 of that instrument obliges a transmission entity and distributor to make, on reasonable commercial terms, an offer to a person who requests rights to use or have access to its transmission system or distribution system (as the case may be) for telecommunications purposes, having regard to various enumerated matters. 16 Section 23(1) of the Electricity Act provides: "The Commission must make a licence authorising the operation of a transmission or distribution network subject to conditions determined by the Commission – (j) requiring the electricity entity to comply with code provisions as in force from time to time (which the Commission must make under the Essential Services Commission Act 2002) establishing a scheme – (i) for other bodies to use or have access to the entity's transmission or distribution network for telecommunications purposes (subject to requirements as to technical feasibility and preservation of visual amenity); and (ii) for the resolution of disputes in relation to such use or access by a person other than the Commission who is appointed by the Commission." The Commission is empowered by s 28(1) of the Essential Services Commission Act 2002 (SA) ("the Commission Act") to "make codes or rules relating to the conduct or operations of a regulated industry or regulated entities". Under s 14D of the Electricity Act, the "electricity supply industry", which is defined in that statute to mean "the industry involved in the generation, transmission, distribution, supply or sale of electricity or other operations of a kind prescribed by regulation", is declared to be a regulated industry for the purposes of the Commission Act. Kirby Hayne Under cl 13 of the Transmission Code, recourse may be had to arbitration if a dispute arises under or in connection with the granting of access contemplated by cl 12 or the terms on which such access is offered. An alternative method of dispute resolution is available under Div 5, Pt 5, Ch 4 of the Code of Practice, which provides for the referral to the Telecommunications ("the Ombudsman") of any dispute between a Industry Ombudsman telecommunications carrier and the owner or occupier of land on which a low-impact facility is sought to be installed. In describing the effect of these provisions, Bleby J in his dissenting "[A]s a licensed distribution network operator, ETSA cannot refuse an approach of a telecommunications carrier requesting use of a particular part of its distribution system for the installation of telecommunications facilities. It is required to make its system available for a carrier to exercise its powers under the Telco Act. It is required to make an offer setting out the terms on which access is to be granted, and there are provisions for resolving disputes about that. But there is nothing that ETSA can do to prevent a carrier from making use of that part of its distribution system." To that it may be added that both the federal scheme, evidenced by the Code of Practice, and the State scheme, evidenced by the Transmission Code, postulated co-operation between parties in the position of Hutchison and ETSA. That is an important consideration for the issues of statutory construction upon which the appeal turns. Co-operation is what occurred. ETSA and Hutchison entered in April 2001 into what is called the Facilities Access Agreement ("the Agreement"). The Agreement provides for a procedure by which Hutchison may seek of ETSA consent to its having access to ETSA's facilities for the purpose of erecting telecommunications equipment. Pursuant to cl 2.1 of the Agreement, Hutchison may at any time apply in writing to ETSA for access to any one of its facilities, by which is meant "poles, structures, buildings, towers and land owned or leased by ETSA", in order to fulfil that purpose. The application must specify what, if any, "Make Ready Work" is required for the installation to be effected and must contain an offer to carry out that work. The term "Make Ready Work" is defined in the Agreement 17 (2005) 91 SASR 111 at 139. Kirby Hayne to mean any work that is reasonably necessary to be undertaken to allow Hutchison's equipment to be installed on ETSA's facilities. Clause 2.4 provides that ETSA may either accept, or reject in "exceptional circumstances", an application from Hutchison. If it does reject an application, ETSA must specify reasons for so doing and, where reasonably possible, offer an alternative facility for Hutchison's equipment (cl 2.4.2). If, on the other hand, ETSA accepts the application, it is obliged to grant to Hutchison a site licence or site licences for the period or periods over which Hutchison is to have access to the facility in question (cl 2.6). Where the application specifies any Make Ready Work necessary for the installation of Hutchison's equipment, the Agreement requires that ETSA either accept the offer to carry out that work at a cost which is either specified in the application or negotiated between the parties, or advise Hutchison that it does not intend to carry it out (cl 2.5). In the event that ETSA so advises, Hutchison itself may have that work performed. Bleby J described the effect of the Agreement as being "to do no more than implement a statutory scheme by taking a commercially realistic approach"18, bearing in mind the cost and time involved in the parties availing themselves of the Transmission Code and the Code of Practice. His Honour said19: the dispute resolution mechanisms offered by both "The fact that the extent and cost of the make-ready work may be agreed, by a process involved in the application for and grant of a site licence under the Agreement, does not signify agreement to a joint venture. Again it provides a commercial resolution to what might well otherwise have been determined in the same way by either [the Ombudsman] or an arbitrator acting under the provisions of [the Transmission Code]." The downlink sites Both the terms of the Agreement and the statutory framework in which it was intended to operate informed the procedure by which Hutchison selected the 18 (2005) 91 SASR 111 at 141. 19 (2005) 91 SASR 111 at 141. Kirby Hayne locations for its downlink sites. That procedure was described in the Case Stated as follows: "Hutchison has a procedure for identifying locations for its downlink sites with a view to co-locating with other carriers and/or existing public utility infrastructure. Shortly stated, that procedure is that its marketing personnel identify areas for coverage by the network; its radio frequency engineers then nominate sub-areas within the area of the coverage to be served by downlink sites; potential locations are then identified for the downlink sites; Hutchison then prepares plans for the site and negotiates with the owner for the installation of the facility. [In this case] Hutchison identified four stobie poles and a landing arrangement erected by ETSA within the area of the Council for the purpose of installing each of its downlink sites." The landing arrangement consisted of two landing poles, both 9 metres in height, erected at ETSA's Colonel Light Gardens substation. What was done both by Hutchison and ETSA at each of the five locations is described in the paragraphs that follow. As was required by the Agreement, Hutchison applied in writing to ETSA for permission to use the stobie poles it had identified. The respective heights of the stobie poles located at the Bellevue Heights site, the Kingswood site, the Torrens Park site and the Clarence Gardens site were 14.25 metres, 20.13 metres, 19.7 metres and 17.92 metres. ETSA undertook a structural analysis of these stobie poles in order to determine whether they were suitable for the purposes of both ETSA and Hutchison. The result of that analysis was that each stobie pole, with the sole exception of that which was located at the Clarence Gardens site, was determined to have been in need of replacement in order for the installation by Hutchison of its equipment to proceed. Those poles were replaced at the cost of Hutchison. The stobie pole at the Clarence Gardens site had previously been replaced by ETSA as part of an upgrade program and was determined to be structurally adequate to accommodate the downlink site. Following the replacements, the heights of the stobie poles located at the Bellevue Heights site, the Kingswood site and the Torrens Park site were 14.9 metres, 20.1 metres and 19.4 metres respectively. It was contended by the Council that these replacement poles were facilities within the meaning of the Telco Act, as they had been erected by ETSA with the purposes of Hutchison in mind. More specifically, it was submitted that the poles and those at the Colonel Light Gardens site were towers for the purposes of Div 3, Pt 1 of Sched 3, and Kirby Hayne because they were neither attached to a building nor of a height less than 3 metres each, they were not low-impact facilities. Something should be said at this point about the components of each downlink site. Panel antennae are erected at the top of each stobie pole. This is effected by attaching the panel antennae to a mounting pole which, in turn, is attached to the stobie pole, with the result that part of the mounting pole and the whole of the panel antennae protrude above the top of the stobie pole. It is agreed between the parties that the distance from the top of each stobie pole to the top of the panel antennae erected on that pole is greater than 3 metres. However, the distance from the top of the stobie pole to the base of the antennae is less than 3 metres. The relevance of this lies in the circumstance that, as has already been stated in these reasons, Pt 1 of the Schedule to the Determination provides that an antenna attached to a structure cannot be a low-impact facility unless it protrudes from that structure by not more than 3 metres. Each downlink site also comprises an equipment shelter. The shelter is located on ground level and contains electrical equipment necessary for the operation of the downlink site. Because a constant temperature must be maintained within an equipment shelter, each shelter is equipped with two air conditioning units, both of which emit noise. The equipment shelters for the Clarence Gardens site and the Kingswood site are located within existing ETSA substations, whereas the stobie poles are located on the adjacent road reserves. In contrast, the equipment shelters for the Bellevue Heights site and the Torrens Park site are located on land owned by Australian Rail Track Corporation Ltd and TransAdelaide respectively. However, as with the Clarence Garden and Kingswood sites, the stobie poles at these locations are situated on adjacent road reserves. The entire Colonel Light Gardens downlink site is located within an ETSA substation. In respect of those sites where the stobie poles had been replaced, the total apparent volume of the facilities installed by Hutchison on the replaced pole constitutes no more than a 25 per cent increase in the apparent volume of the new pole. However, the combined volume of those facilities and the new pole does constitute an increase in the apparent volume of the original stobie pole of more than 25 per cent. The Case Stated indicates that in respect of the Clarence Gardens site, where the stobie pole in question was not replaced, the total apparent volume of the co-located facilities constitutes no more than a 25 per cent increase in the apparent volume of the stobie pole. Kirby Hayne The Development Act We now turn to the State planning law which the appellant invoked in this case. Section 4 of the Development Act defines the term "development" to include, among other things, "building work" or "a change in the use of land". The phrase "building work" is defined to include "the construction, demolition or removal of a building", where the word "building" is given an extended definition to mean: "a building or structure or a portion of a building or structure (including any fixtures or fittings which are subject to the provisions of the Building Code of Australia), whether temporary or permanent, moveable or immovable". This appeal was argued on the basis that the stobie poles erected by ETSA were structures, thus engaging the definition of "development" in the Development Act. Relevantly, by s 4, the expression "to undertake development" is to mean the following: "to commence or proceed with development or to cause, suffer or permit development to be commenced or to proceed". Section 32 provides generally that only an approved development may be undertaken. The concept of an "approved development" is given content in s 33. That section provides that a development is an approved development "if, and only if, a relevant authority has assessed the development against, and granted a consent in respect of, each of" certain enumerated matters. As has previously been mentioned in these reasons, the Council had contended before the Full Court, and contends now, that either one of Hutchison or ETSA was required to seek development approval from the Council in respect of the work done in installing the downlink facilities. In so far as this contention touches upon what was or was not done exclusively by ETSA, it depends, not upon the interaction of federal and State laws, but rather upon the provisions of both the Development Act and the Development Regulations (SA) ("the Development Regulations"). In particular, it depends upon the immunities and exceptions conferred by both pieces of legislation upon what is referred to in the statute as a "prescribed person"20. 20 Pt 11, reg 68(1) of the Development Regulations provides: (Footnote continues on next page) Kirby Hayne It is indicated in the Case Stated that ETSA is a "prescribed person" for the purposes of s 49A of the Development Act. That section relevantly states: "(1) Subject to this section, if a prescribed person proposes to undertake development for the purposes of the provision of electricity infrastructure (within the meaning of [the Electricity Act]), not being development of a kind referred to in section 49(2) or (3), the person must – lodge an application for approval containing prescribed particulars with the Development Assessment Commission the Development Assessment assessment for Commission; and if the land in relation to which the development is proposed is within the area of a council – give notice containing prescribed particulars of the proposal to that council in accordance with the regulations. "For the purposes of section 49A of [the Development Act], the following are prescribed persons: (a) the holder of a licence under [the Electricity Act] issued in accordance with an order of the Minister under Part 5 of the Electricity Corporations (Restructuring and Disposal) Act 1999 [(SA)] authorising the operation of a distribution network or some other licence under [the Electricity Act] authorising the operation of all or part of that distribution network; (b) the holder of a licence under [the Electricity Act] issued in accordance with an order of the Minister under Part 5 of the Electricity Corporations (Restructuring and Disposal) Act 1999 authorising the generation of electricity or some other licence under [the Electricity Act] authorising the generation of electricity by means of an electricity generating plant previously operated pursuant to the licence issued in accordance with the order of the Minister; (c) the holder of a licence under [the Electricity Act] issued in accordance with an order of the Minister under Part 5 of the Electricity Corporations (Restructuring and Disposal) Act 1999 authorising the operation of a transmission network or some other licence under [the Electricity Act] authorising the operation of all or part of that transmission network." Kirby Hayne (3) No application for approval is required (either under this section or any other provision of this Act), and no notice to a council is required under subsection (1), if the development is of a kind excluded from the provisions of this section by regulation." Sub-section (3) set out above directs attention to Pt 11, reg 69(1) of the Development Regulations, which provides: "Pursuant to section 49A(3) of [the Development Act] (but subject to this regulation) the various forms of development specified in Schedule 14A, when carried on by a prescribed person, are excluded from the provisions of section 49A of [the Development Act]." Schedule 14A to the Development Regulations, to which reference is thus made, relevantly stated as follows at the time of the events which gave rise to this litigation: "The following forms of development, other than in relation to a State heritage place, are excluded from the provisions of section 49A of [the Development Act]: if the work is certified by a private certifier, or by some person nominated by the Minister for the purposes of this provision, as complying with the Building Rules (or the Building Rules to the extent that is appropriate in the circumstances after taking into account the requirements of the Building Rules and, insofar as may be relevant, the matters prescribed under regulation 70 for the purposes of section 49A of [the Development Act] – the construction, reconstruction or alteration of a building or equipment used for or associated with the supply, conversion, transformation or control of electricity (other than an electricity generating station or an electricity substation); the construction, reconstruction or alteration of an electricity power line, other than a transmission line of 33 000 volts or more." Kirby Hayne The Council submitted that the erection of the replacement stobie poles at the sites named above did not fall within the exemption from the development the Development Act and the approval process provided for by both Development Regulations. This was on the textual basis that, because the new poles had been erected by ETSA with Hutchison's purposes in mind, those poles could not be said to be "equipment used for or associated with the supply, conversion, transformation or control of electricity". The noise at the Clarence Gardens site It is convenient now to deal as the first issue with the noise said to be generated by the downlink facility established at the Clarence Gardens site, specifically by the air conditioning units in the equipment shelter. In this Court, as in the Full Court, the Council submitted that the level of noise thus produced was sufficient to take that facility beyond the ambit of the expression "low-impact facility". This submission proceeded from the premise that, for the purposes of the Determination, the panel antennae, the mounting pole, the existing stobie pole and the equipment shelter located at the Clarence Gardens site were together co-located facilities. The reason for adopting this premise may be understood by reference to Pt 3 of the Schedule to the Determination. Items 3 and 4 of that Part provide for the requirements which must be satisfied if an equipment shelter is to be treated as a low-impact facility. Neither item sets down a requirement as to the maximum level of noise which may permissibly be emitted by an equipment shelter installed in a residential area. Consequently, the only way in which the Council could have employed the noise generated by the equipment shelter at the Clarence Gardens site as a basis upon which to argue for the applicability of the Development Act was to rely upon the requirements, contained in Pt 7 of the Schedule to the Determination, respecting the emission of noise from co-located facilities in a residential or commercial area. That reliance met with success in the Full Court. Hutchison had submitted that the equipment shelter installed at the Clarence Gardens site did not fall within the definition of "co-located facilities" in cl 1.3 of the Determination. This was because it was not installed on or within either an original facility or a public utility structure. Perry J, who delivered the reasons of the majority in the Full Court, rejected this submission, saying21: 21 (2005) 91 SASR 111 at 133. Kirby Hayne "I do not think that that argument can prevail. It involves the notion that Hutchison's facility may be segregated into different components. Hutchison's facility at Clarence Gardens is a combination of the elements mounted on the stobie pole and the equipment shelter containing associated electrical equipment, with whatever interconnection there is between those two elements." The position thus expressed by his Honour found reflection in the Council's submission in this Court that "[Hutchison's] facility at Clarence Gardens is a combination of all of the elements necessary for the operation of the equipment and that included the equipment shelter". When read in the light of this last proposition, the reasoning which was accepted by the Full Court discloses an assumption that the application of Item 2 in Pt 7 of the Schedule to the Determination involves the following three steps: first, the identification of a "facility" as consisting of all those elements necessary for the operation of telecommunications equipment installed at a particular site; secondly, a determination as to whether any one of those elements has been installed on or within either an original facility or a public utility structure; and, thirdly, if so, the extension of the requirements set down in Item 2 to cover all of the elements identified in the first step as being part of a "facility", notwithstanding the possibility that they may be free-standing. However, to reason in this manner applies the definition of "co-located facilities" without regard to the definition, provided for in the Telco Act, of the term "facility". That definition is imported into the Determination by reason of cl 6(3), Pt 1 of Sched 3 to the Telco Act, which provides that only a "facility" may be determined by the Minister to be a low-impact facility. Significantly, there is nothing in the definition to suggest that necessity for the operation of telecommunications equipment at a particular site is a criterion for determining what collectively may constitute a "facility" for the purposes of either the Telco Act or the Determination. On the contrary, the definition indicates that several things or structures capable of having little independent function beyond supporting the operation of telecommunications facilities at a given site are themselves to be treated as facilities, and not parts of facilities. These include masts, holes, pits and poles. Kirby Hayne In Hutchison 3G Australia Pty Ltd v Director of Housing22, a decision of the Court of Appeal of Victoria, Morris AJA suggested that he had found the definition of "facility" in the Telco Act to be of little assistance in applying Pt 7 of the Schedule to the Determination. This was because that definition was itself: "capable of being considered at different levels of abstraction: starting at individual elements such as a pole or a line, moving to elements that form a component (such as an antenna), moving to a collection of elements that form a component of the network on a local basis (such as a base station), to part of a network as such (for example, the Melbourne metropolitan network) and, possibly, even extending the telecommunications network" (original emphasis). the whole of However, it is one thing to point to the variability in the levels of abstraction contemplated by that definition; it is another to say that the definition itself provides support for the criterion of necessity for which the Council contends, when in fact it tends towards the opposite conclusion. In any event, Morris AJA observed that, if a combination of facilities consisting of an antenna and other equipment, housed either above or below ground and installed for the purpose of processing the signals received or sent by the antenna, "was to be characterised at a higher level of abstraction, this could defeat the intention of [the Schedule to the Determination] that the facilities be regarded as low-impact facilities"23. Consideration should also be given to the text of cl 3.1(1) of the Determination. That provision states: "A facility described in column 2 of an item in the Schedule is a low-impact facility only if it is installed, or to be installed, in an area mentioned in column 3 of the item." Column 2 of Items 3 and 4 in Pt 3 of the Schedule deals with equipment shelters. Such shelters are therefore recognised as facilities, as distinct from parts of facilities, in the provisions of the Determination. 22 [2004] VSCA 99 at [39]. 23 [2004] VSCA 99 at [40]. Kirby Hayne It should also be borne in mind that Item 2 in Pt 7 of the Schedule does not merely address the situation of co-located facilities per se. Rather, it is concerned with facilities mentioned in Pt 1, 5 or 6 or in Item 3 of Pt 4 of the Schedule, where those facilities have been installed on or within either an original facility or a public utility structure. It is the specific reference to such facilities, rather than the general definition in cl 1.3 of the Determination, which gives content to the phrase "co-located facilities", as it appears in Item 2. That phrase is prefixed by the definite article, implying a degree of specificity which corresponds with that with which the facilities enumerated in Item 2 by reference to other provisions in the Schedule are identified. Accordingly, the reference in Item 2 to "the levels of noise that are likely to result from the operation of the co-located facilities" must be taken to be a reference to the levels of noise that are likely to result from the combined operation of (a) a facility mentioned in Pt 1, 5 or 6 or in Item 3 of Pt 4 of the Schedule; and (b) any original facility or public utility structure on which it is installed. This would necessarily exclude any noise emitted by an equipment shelter, regardless of whether or not it is part of a co-located facility. Such noise would therefore not prevent a co-located facility from being a low-impact facility for the purposes of the Determination. The result is that question 2 in the Case Stated was answered incorrectly by the Full Court. That question should have been answered in the affirmative. The reasons for so answering, as stated above, lead also to the conclusion that question 1.2 should have been answered to like effect. As at the Clarence Gardens site, the equipment shelters situated in the locations covered by question 1.2 were not installed on or within an original facility or a public utility structure. Those shelters were not part of the co-located facilities formed by the installation of panel antennae upon stobie poles at each of the locations in question. It remains then to consider the consequences attendant upon the replacement by ETSA of its poles at the Colonel Light Gardens site, the Bellevue Heights site, the Torrens Park site and the Kingswood site and the installation of downlink facilities thereon. "To undertake development" As has previously been noted in these reasons, the Council advanced the proposition that the replacement poles located at those sites were "towers"24. The 24 Within the meaning of cl 6(5) in Div 3, Pt 1 of Sched 3 to the Telco Act. Kirby Hayne Council also submitted that, because those poles were not attached to any buildings, they could not be taken, for the purposes of either the Telco Act or the Determination, to be low-impact facilities. As a consequence, the Telco Act25 did not exempt Hutchison from the application of those provisions in the Development Act respecting the approval of proposed developments by relevant authorities. However, in his dissenting reasons, Bleby J correctly observed that the question whether each of the replacement poles erected by ETSA can itself be characterised as a facility, specifically a tower, as those terms are defined in the Telco Act, has a bearing upon the resolution of this litigation only if, but for the exemption conferred by cl 37, Hutchison would have been obliged under Div 1, Pt 4 of the Development Act to seek development approvals in respect of the poles26. Such obligation could only have attached to Hutchison if, in respect of each of those poles, it had, within the meaning of the Development Act, undertaken development. In other words, it must be shown that Hutchison either commenced or proceeded with development or caused, suffered or permitted development to be commenced or to proceed. On this point, Perry J's findings were as follows27: "Even although ETSA was physically responsible for [the replacement of the poles], it occurred at the behest of Hutchison and at the expense of Hutchison. ETSA and Hutchison jointly carried out the development. To the extent that it was undertaken by ETSA, ETSA did so solely because Hutchison sought to utilise the infrastructure used by ETSA to transmit power, for Hutchison's own purposes. In those circumstances, Hutchison must be regarded, for the purposes of [the Development Act], as undertaking development either in the direct sense by commencing or proceeding with development within 25 Sched 3, Pt 1, Div 7, cl 37. 26 (2005) 91 SASR 111 at 143-144. 27 (2005) 91 SASR 111 at 127. Kirby Hayne the meaning of the phrase 'to undertake development', or by causing ETSA to commence or proceed with the development." (emphasis added) It is apparent, from the emphasised portion of the passage just quoted, that his Honour's conclusion that Hutchison had directly undertaken a development within the meaning of the Development Act was premised upon an assumption that Hutchison and ETSA were engaged in a form of joint venture. In United Dominions Corporation Ltd v Brian Pty Ltd, Mason, Brennan and Deane JJ said of the term "joint venture" that28: "[a]s a matter of ordinary language, it connotes an association of persons for the purposes of a particular trading, commercial, mining or other financial undertaking or endeavour with a view to mutual profit, with each participant usually (but not necessarily) contributing money, property or skill. ... The borderline between what can properly be described as a 'joint venture' and what should more properly be seen as no more than a simple contractual relationship may on occasion be blurred." The point made in the last sentence of this passage may be accepted. However, the Agreement between Hutchison and ETSA was not entered into for the purposes of a particular trading, commercial, mining or financial undertaking or endeavour with a view to either mutual profit or mutual commercial gain. It was instead a commercial arrangement designed to facilitate, and to minimise the costs and the risk of disputes attendant upon, compliance by Hutchison and ETSA with their obligations under the Code of Practice and the Transmission Code. That Hutchison bore the cost of replacing the stobie poles does not indicate that the task of making those replacements was a joint commercial enterprise. Rather, it was an incident of a pre-agreed set of terms upon which ETSA would offer to Hutchison access to its facilities for telecommunications purposes, where those terms had been settled within the Agreement in order to obviate the possibility that a dispute would arise on each occasion on which Hutchison sought to access those facilities. It cannot then be said that Hutchison had commenced or proceeded with a development within the meaning of the Development Act. 28 (1985) 157 CLR 1 at 10. Kirby Hayne Nor can it be said that Hutchison caused or permitted a development to be commenced or to proceed. In R v Hindmarsh Corporation29, the Supreme Court of South Australia (King CJ, Millhouse and Prior JJ) considered the definition of the phrase "to undertake" development, as it appeared in s 4 of the Planning Act 1982 (SA). That definition was in terms similar to that which now appears in the Development Act. Though he was the dissentient in the outcome of the decision in Hindmarsh, King CJ attracted the agreement of Prior J to the proposition that the content of the word "cause" in the definition was best understood by reference to what was said by this Court (in a different context) in O'Sullivan v Truth and Sportsman Ltd30. In that case, Dixon CJ, Williams, Webb and "No doubt before [an] end may be said to be 'caused' within the meaning of s 35(1) [of the Police Offences Act 1953 (SA)], it must appear that it was contemplated or desired. But preliminary or antecedent acts done in such contemplation or out of such a desire do not necessarily amount to a 'causing'. ... [The provision] should be interpreted as confined to cases where the prohibited act is done on the actual authority, express or implied, of the party said to have caused it or in consequence of his exerting some capacity which he possesses in fact or law to control or influence the acts of the other." Kitto J spoke to similar effect. His Honour said32: "[O]ne person cannot be said to cause another's act unless not only does the former express it as his will that the act shall be done by the latter but the latter's decision to do it is a submission to the former's will, that is to say a decision to make himself the instrument of the former for the effectuation of his will." It is important to recall, for present purposes, that, under the terms of the Agreement, ETSA is not obliged to carry out any Make Ready Work where such work is specified in an application by Hutchison for access to ETSA's facilities. 29 (1984) 37 SASR 388. 30 (1957) 96 CLR 220. 31 (1957) 96 CLR 220 at 227-228. 32 (1957) 96 CLR 220 at 231. Kirby Hayne ETSA is instead entitled to advise Hutchison that it does not intend to carry out the specified Make Ready Work, thus placing upon Hutchison the responsibility for ensuring that it is done. Moreover, it was ETSA in this case that undertook a structural analysis of the stobie poles to which Hutchison had requested access, and it was ETSA that determined that each stobie pole, with the sole exception of that which was located at the Clarence Gardens site, was required to be replaced in order to meet Hutchison's purposes. The facts placed before this Court thus do not permit the conclusion either that ETSA was controlled by, or acted with the authority of, Hutchison or that ETSA had submitted to Hutchison's will. Hence, even if the exemption provision in the Telco Act33 had not been enacted by the Federal Parliament, the provisions of State law in the Development Act relating to development approvals would not have required Hutchison to seek such approvals in respect of the replacement of the stobie poles at the Colonel Light Gardens site, the Bellevue Heights site, the Torrens Park site and the Kingswood site. It was ETSA that undertook the developments at those sites. Nonetheless, it was Hutchison's primary submission in this appeal that, in any event, the poles erected by ETSA at those sites were not "facilities" for the purposes of the Telco Act, and therefore were not "towers" within the meaning of Div 3 of Sched 3 to that statute. Indeed, rather than arguing for the correctness of Bleby J's refusal to answer question 1.1, it sought in relation to that question an answer in the negative. For reasons of completeness, then, it is appropriate to consider this issue. Were the replacement stobie poles "towers"? In this Court, much of the argument directed to answering question 1.1 was focused upon what was said concerning the definition of "facility" in the Telco Act by the New South Wales Court of Appeal in Hurstville City Council v Hutchison 3G Australia Pty Ltd34. The dispute in that case arose from a proposal by Hutchison to replace a council-owned light pole which served to illuminate a suburban park with a new pole to which antennae and a communications dish would be attached. The Court of Appeal allowed the appeal by Hurstville City 33 Sched 3, Pt 1, Div 7, cl 37. 34 (2003) 200 ALR 308. Kirby Hayne Council. The principal reasons in the Court of Appeal were given by Mason P, who said35: "The respondent argues that the words [in the definition of 'facility'] should be construed and applied literally, so that any conceivable structure or thing is a facility so long as it is used or for use, in or in connection with a telecommunications network. At this point, an alternative reading of the definition offers itself. Schedule 3 elsewhere distinguishes between 'facilities' and the land or structures to which they are fixed: see, for example, cl 2 (definition of 'installation'), cl 47. It makes perfect sense to say that the Harbour Bridge remains a bridge and does not itself become a facility even though facilities (low-impact or otherwise) might be installed upon or affixed to it. Likewise with existing buildings erected as residences etc but which have 'facilities' attached to their rooftops. The definition of 'facility' can operate to its full literal extent in such situations without turning the bridge or building into part of the facility itself. Part (b) of the definition makes perfect sense if construed as being confined to any line, equipment etc or thing that is purpose-built or dedicated by its inherent nature for use in or in connection with a telecommunications network or which is actually used accordingly. It is not necessary to treat an existing (non purpose-built) pole, structure or thing upon which a 'facility' is placed as the facility itself." (emphasis added) In its submissions to this Court, the Council fixed upon the words "an existing (non purpose-built) pole" in the passage just quoted, contending that the replacement poles installed by ETSA were not existing poles, but were instead built with the purposes of Hutchison in mind. The poles were therefore "for use ... in connection with a telecommunications network". However, merely establishing that ETSA erected stobie poles at the relevant sites in order to permit installation by Hutchison of its facilities does not necessarily demonstrate that those poles were intended for such use. This is because the definition of the term "facility" in the Telco Act requires that attention be directed, not to the motive for the installation of a structure or thing, but the function which that structure or thing serves or was designed to serve. 35 (2003) 200 ALR 308 at 319. Kirby Hayne The definition of the expression "telecommunications network" has previously been set out in these reasons. That definition contemplates a "system" or a "series of systems" engaged in the carrying of communications by means of guided and/or unguided electromagnetic energy. In attempting to characterise the function which was served or sought to be served by the replacement poles, the question thus arises: were the replacement poles intended for use in connection with a "system"? The Case Stated indicates that the poles were replaced in order to meet the structural demands of carrying such facilities as the three panel antennae, the microwave dish and the mounting pole which together form part of a downlink site. In other words, the replacement poles were designed, in part, to accommodate the physical act of installing telecommunications equipment. However, there is nothing to suggest that, as such, they were intended to satisfy the requirements of a "system" or a "series of systems" of the sort described in the definition of "telecommunications network". The locations of the poles, though conducive to the operation of a telecommunications network and recognised by Hutchison as such when it selected them as sites for the installation of its downlink facilities, were not selected in order to facilitate that operation. Instead, ETSA had erected poles at those locations as part of its electricity distribution business. Moreover, it was not the set of requirements attendant upon the operation of a system which prompted the need for poles of a larger cross-section at the Colonel Light Gardens site, the Bellevue Heights site, the Torrens Park site and the Kingswood site. It was instead the requirements attendant upon the task of installing individual items of equipment on those poles. Accordingly, question 1.1 in the Case Stated should have been answered in the negative. The replacement poles erected by ETSA were not facilities within the meaning of the Telco Act. Because of this, and because of the affirmative answer already given to question 1.2, Hutchison is entitled, in respect of the installation of its downlink sites, to the benefit of an exemption from the operation of the Development Act, as provided for in the Telco Act36. 36 Sched 3, Pt 1, Div 7, cl 37. Kirby Hayne To say this, however, is not to dispose fully of question 1.3 in the Case Stated. We turn now to consider the position of ETSA under the provisions of the Development Act. The position of ETSA Reference has been made earlier in these reasons to s 32 of the Development Act. This is a general provision, stating: "Subject to this Act, no development may be undertaken unless the development is an approved development." The opening words of s 32 subordinate its prohibition to s 49A. Section 49A(1) imposes a specific requirement for approval of development to provide electricity infrastructure within the meaning of the Electricity Act. However, s 49A(3), operating in conjunction with the Development Regulations37, confers upon prescribed persons (of whom ETSA is one), in respect of certain forms of development, an exemption from a requirement under any provision of the Development Act for development approval by the Development Assessment Commission. One form of development identified as attracting the exemption thus conferred is "the construction, reconstruction or alteration of a building or equipment used for or associated with the supply, conversion, transformation or control of electricity". Those words are to be found in par (a)(ii) of Sched 14A to the Development Regulations. In so far as it touches upon ETSA's obligations under the Development Act, question 1.3 in the Case Stated turns upon the issue whether the replacement poles erected by ETSA can be said to satisfy the statutory description of such development. In his reasons for judgment, Perry J, who determined that issue in the negative, described the purposes served by the replacement stobie poles as follows38: "The object of the development was to replace the existing installation, which served ETSA's purposes only, with a different kind of installation 37 Pt 11, reg 69; Sched 14A. 38 (2005) 91 SASR 111 at 128. Kirby Hayne which was capable of serving the requirements of both ETSA and Hutchison. Hutchison's purposes were not for the 'supply, conversion, transformation or control of electricity'. It is true that the replacement stobie pole was 'used for or associated with' such a purpose, but only in part. ETSA has undertaken the development for a purpose alien to that identified in the regulation defining the scope of the exclusion provided for in s 49A(3) [of the Development Act]. [Counsel] for ETSA contended that the provision of the pole for the purpose of carrying ETSA's power lines could be regarded separately and distinctly from the utilisation of the pole by Hutchison for its purposes. But such a separation would fly in the face of the fact that, after the replacement of the pole with another pole fitted with Hutchison's equipment, ETSA was no longer using its pole for purposes limited to the supply of electricity. It was using a new pole for the purpose, albeit in part, of supporting Hutchison's facility, for which ETSA received from Hutchison an annual charge, determined the Agreement." in accordance with His Honour's conclusions thus flowed from the proposition that, for the purpose of attracting the exemption provided for in s 49A(3) of the Development Act, the form of Sched 14A development in question be for the sole purpose of supplying, converting, transforming or controlling electricity. It is that construction of Sched 14A for which the Council and the Attorney-General now contend in this Court. the Development Regulations requires that However, the position thus advanced by these respondents runs into an immediate difficulty. The apparent width of the phrase "used for or associated with" in par (a)(ii) of Sched 14A suggests a nexus between a proposed development and the purpose of supplying, converting, transforming or controlling electricity which is not so stringent as to require that that purpose be the sole purpose of the proposed development. The requirement of sole purpose for which the respondents contend must therefore find support, not in the text of Sched 14A, but in the legislative context in which the Development Regulations were promulgated and the purpose for which s 49A of the Development Act was enacted. One reason for returning to consider s 49A at this point is that the Attorney-General submitted in this Court that the requirement of sole purpose has its basis, not in the wording of Sched 14A to the Development Regulations, Kirby Hayne but in the phrase "development for the purposes of the provision of electricity infrastructure", as it appears in s 49A(1). That phrase, it was said, "means that all of the purposes of [a] development must relate to the provision of electricity infrastructure". Where a proposed development serves multiple purposes, any one of which is unrelated to the provision of such infrastructure, it falls beyond the reach of s 49A(1), and therefore is not entitled to the benefit of the exemption conferred by s 49A(3). As is the case with the argument that seeks to ground the requirement of sole purpose in Sched 14A to the Development Regulations, there is nothing in the text of s 49A(1) to recommend the adoption of such a construction. It is necessary then to turn to the chief contextual consideration proffered by the Attorney-General in support of such adoption. This was the circumstance that: "the purpose of the Act is to achieve town planning objectives by subjecting most developments to an assessment and authorisation process. Exemptions should be narrowly construed so that the evident purpose of the legislation is not frustrated." However, s 49A(1) of the Development Act does not confer an exemption from the process of assessment and authorisation of proposed developments. Instead, it provides for the operation of such a process, albeit by means other than those contemplated by the general regime established by Div 1, Pt 4 of the Development Act (ss 32-45A), where the proposed development is sought to be undertaken by a prescribed person for the purposes of the provision of electricity infrastructure. Consequently, to give the phrase "development for the purposes of the provision of electricity infrastructure" a broad construction, specifically one which recognises the possibility of such a development serving multiple purposes, would not in any way frustrate the subjection of a development proposed by a prescribed person to the requirements of an assessment and authorisation process. Furthermore, s 49A(3) of the Development Act confers an exemption from approval, in circumstances where approval would otherwise be required, not merely pursuant to s 49A(1), but under any provision in the Development Act. Section 49A(1) is therefore subject to s 49A(3). It cannot be said to set down a threshold requirement which a development must satisfy before it can receive the benefit of the exemption in s 49A(3). If the notion of sole purpose is to be recognised, it must be on the basis of Sched 14A to the Development Regulations, reference to which is mandated by s 49A(3). Kirby Hayne However, construction of that Schedule must begin with further consideration of s 49A as a whole. As noted above, that section provides for a process of assessment and approval of development involving electricity infrastructure. The circumstance that such development is subject to an assessment process separate from that outlined in Div 1, Pt 4 of the Development Act is itself indicative of a legislative recognition that the objectives and obligations of those who provide transmission and distribution services are not shared by others in the community and as such need to be accommodated in that process, particularly in certain circumstances through an exemption of the sort conferred in s 43A(3). One of these obligations is imposed by cl 12 of the Transmission Code, to which reference has already been made in these reasons. That provision obliges a transmission entity and distributor to make, on reasonable commercial terms, an offer to a person who requests rights to use or have access to its transmission system or distribution system (as the case may be) for telecommunications purposes. A consequence of cl 12 is that a distributor is required to be mindful of the susceptibility of the purposes of a telecommunications carrier. Indeed, the obligation set down in cl 12 may even encourage distributors to erect infrastructure designed, not merely for the purpose of supplying, converting, transforming or controlling electricity, but also to accommodate those telecommunications purposes. infrastructure to use for its If, as the respondents contend it should be, Sched 14A to the Development Regulations were construed to impose a "sole purpose test" for determining the applicability in any given case of the exemption conferred in s 49A(3) of the Development Act, there would result a tension in the combined operation of the Development Act and the Transmission Code. On the one hand, s 49A is intended to accommodate, through both a separate development assessment regime and an exemption from all such assessment regimes, the obligations and objectives attaching to the supply, conversion, transformation and control of electricity. But, on the other hand, an attempt by a licensed operator of an electricity distribution network to facilitate compliance with its obligations under cl 12 of the Transmission Code by erecting infrastructure which serves a dual purpose would deny that distributor the benefit of the exemption in s 49A(3). In this way, the evident purpose of s 49A would be frustrated. Schedule 14A to the Development Regulations should not be construed to favour persistence of that tension. That item does not impose a sole purpose requirement as a pre-condition to enlivening the exemption conferred by s 49A(3) of the Development Act. Such a construction accords with the natural meaning of the language of the item. Kirby Hayne One final point should be made concerning the terms in which Sched 14A was drafted. On its face, the item requires that focus be directed to whether the building or equipment sought to be developed will be used for or in association with the supply, conversion, transformation or control of electricity. It is the purpose of the building or equipment developed, and not that of the development, upon which the availability of the exemption provided for in s 49A(3) of the Development Act is dependent. For this reason, the circumstance that the stobie poles were replaced by ETSA only because Hutchison had requested access to them is an irrelevant consideration. It is true that the replacement stobie poles erected by ETSA were designed, among other things, to allow for the installation by Hutchison of its downlink facilities. However, this did not mean that those poles were not "used for or associated with the supply, conversion, transformation or control of electricity". Perry J accepted that the poles were, in part, "used for or associated with" that purpose. That circumstance alone is sufficient to bring those poles within the meaning of Sched 14A to the Development Regulations, thus enlivening the exemption from the development approval process provided for in s 49A(3) of the Development Act. Question 1.3 in the Case Stated should be answered in the negative. Intersection of federal and State laws We part from this appeal with a final observation. The appeal was argued in this Court on the basis that the provisions of federal law, mentioned in these reasons, did not "cover the whole field"39 of the regulation of the installation of Hutchison's facility and telecommunications equipment to the exclusion of the Development Act of South Australia. In this sense, the argument followed the conclusion reached in the Supreme Court of South Australia that s 109 of the Constitution did not apply to render invalid the provisions of State law affecting the operations of Hutchison, acting in conjunction with ETSA. From the earliest days of telecommunications law in the Commonwealth, it has been a purpose of federal law to encourage the use for telecommunications of suitable facilities belonging to non-federal bodies, generally subject to 39 Clyde Engineering Co Ltd v Cowburn (1926) 37 CLR 466 at 488-489; Ex parte McLean (1930) 43 CLR 472 at 485. Kirby Hayne regulation by State law. Part VII (ss 140-150) of the Post and Telegraph Act 1901 (Cth) was headed "Protection of Telegraph Lines from Injurious Affection by Electric Lines or Works" and later was supplemented by the Telegraph Lines Protection Regulations40. and maintenance The policy behind such federal provisions the efficient establishment international telecommunications facilities in Australia as the Constitution envisages in s 51(v); the economic use of existing infrastructure facilities; and, more recently, the minimisation of environmental concerns. To the extent that federal law so provides, State law, including any with respect to town planning, may not validly detract from, or inconsistently burden, the federal regulation41. includes and nationwide We have been content to approach the issues in the present appeal on the basis chosen by both parties. However, in another case, the more fundamental question of constitutional inconsistency may need to be reconsidered, to decide whether it affords a more direct route to the conclusions now reached in this appeal. Assuming, as the parties did, that the federal law and the State Development Act can operate together without direct constitutional collision or incompatibility42, the answers to the questions in the Case Stated are those now offered. Those answers happen to be consistent with a conclusion that upholds the primacy of the federal law and avoids any conflict with its provisions caused by the operation of the South Australian Development Act. It is therefore unnecessary to consider the deeper constitutional questions that might otherwise have arisen. They can be put aside to another day. This Court normally approaches such questions only when other solutions, based on the elucidation of statutory language, do not yield answers as they do, adequately, in this case43. Orders The appeal should be allowed. The orders of the Full Court of the Supreme Court of South Australia dated 11 March 2005 and answering the 40 SR No 246/1920. 41 Constitution, s 109. 42 cf Australian Mutual Provident Society v Goulden (1986) 160 CLR 330 at 335-337 per Gibbs CJ, Mason, Brennan, Deane and Dawson JJ. 43 cf Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 186 per Latham CJ. Kirby Hayne questions in the Case Stated should be set aside and the questions asked in the Case Stated should be answered as follows: (1.1) No, because the stobie poles are not and do not become facilities for purposes of the Telecommunications Act 1997 (Cth) notwithstanding the installation on them of Hutchison's facilities. Therefore, the stobie poles are not and do not become towers within the meaning of cl 6 of Sched 3 to that Act. (1.2) Yes, and on the basis that the fact referred to in question 1.2(a) is not the relevant Telecommunications (Low-impact Facilities) Determination 1997 (Cth). identification of low-impact facilities the (2) Yes. The Council and the Attorney-General should pay the costs of Hutchison in this appeal. The Attorney-General took an active role in supporting and developing the Council's arguments in opposition to the appeal. No special provision should be made protecting him from the outcome in this Court. Orders numbered 1 and 2 in the Full Court orders dealt with costs. Order 1 should be set aside and in place thereof the Council should be ordered to pay the costs of Hutchison and ETSA of and incidental to the Case Stated. Order 2, dealing with the position of the Attorney-General, should not be displaced. It is sufficient in that regard to make the above provision for costs against the Attorney-General in this Court.

HIGH COURT OF AUSTRALIA APPELLANT AND DYCO HOTELS PTY LIMITED ATF THE PARRAS FAMILY TRUST & ORS RESPONDENTS Laundy Hotels (Quarry) Pty Limited v Dyco Hotels Pty Limited [2023] HCA 6 Date of Hearing: 9 December 2022 Date of Judgment: 8 March 2023 ORDER The appeal be allowed with costs. The orders of the Court of Appeal of the Supreme Court of New South Wales made on 21 December 2021 be set aside and, in their place, order that the appeal be dismissed with costs. 3. Within 28 days of the date of these orders, the respondents repay to the appellant the whole of any sum paid by the appellant to the respondents under or in accordance with Order 2(b) of the orders of the Court of Appeal of the Supreme Court of New South Wales made on 21 December 2021 (the deposit and interest thereon). If, within 14 days of the date of these orders, the parties agree upon the amount of further interest to be paid by the respondents to the appellant on the sum referred to in Order 3 of these orders, the parties are to file a minute of consent and the respondents are to pay the appellants that further sum of interest forthwith. Failing agreement, the issue and calculation of interest be remitted to the Supreme Court of New South Wales. On appeal from the Supreme Court of New South Wales Representation J T Gleeson SC with L G Moretti for the appellant (instructed by JDK Legal) N C Hutley SC with C D Freeman and E C Dunlop for the respondents (instructed by A.C. Comino & Associates) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Laundy Hotels (Quarry) Pty Limited v Dyco Hotels Pty Limited Contract – Construction – Where clause in contract for sale and purchase of property and assets of hotel business obliged vendor from contract date until completion to carry on business in "usual and ordinary course as regards its nature, scope and manner" – Where hotel business operated pursuant to licence and gaming machine entitlements – Where hotel business subject to variable licence conditions imposed under Liquor Act 2007 (NSW) and regulations – Where operation of business prior to completion restricted by public health order in response to COVID-19 pandemic – Whether vendor obliged to carry on business in manner conducted as at time of contract to extent lawful – Whether vendor "ready, willing and able to complete and ... not in default" at time vendor served notice to complete. Words and phrases – "breach", "carry on the business", "contractual construction", "contractual obligation", "COVID-19", "lawful operation", "nature, scope and manner", "ready, willing and able to complete", "reasonable businessperson", "usual and ordinary course", "warranty". KIEFEL CJ, GAGELER, GORDON, GLEESON AND JAGOT JJ. This appeal involves a contractual dispute arising from the effects of the COVID-19 pandemic in Australia. The issue is one of contractual construction. Under a contract for the sale and purchase of the property and assets of a hotel business, the Vendor was contractually obliged from the contract date until Completion to "carry on the Business in the usual and ordinary course as regards its nature, scope and manner". During that period, the operation of the business was restricted by a public health order in response to the COVID-19 pandemic. The question raised by this appeal is whether, while operating on the restricted basis required by the public health order, the Vendor was "ready, willing and able to complete and ... not in default" at the time the Vendor served a notice to complete. As these reasons will explain, the Vendor was "ready, willing and able to complete" and was not in default of its contractual obligations at the time it served the notice to complete. The Vendor was obliged to carry on the Business in the manner it was being conducted at the time of contract to the extent that doing so was lawful. There was no obligation (and could not have been an obligation) imposed on the Vendor to carry on the Business unlawfully. It follows that the appeal should be allowed, and consequential orders sought by the appellant should be made. The contract The contract was dated 31 January 2020. It provided for the sale of freehold hotel property in Pyrmont, Sydney (the Quarrymans Hotel) ("the Property"), together with an associated hotel Licence (being a specified hotel licence under the Liquor Act 2007 (NSW) and nine Gaming Machine Entitlements allocated to that Licence) and the Business1. The Business was defined as the hotel business trading as the Quarrymans Hotel which operates pursuant to the Licence (cl 33.1). The appellant was the Vendor. The first and second respondents together were the Purchaser. The first respondent was the purchaser of the Property and the Licence. The second respondent was the purchaser of the Goodwill, Plant and Equipment and remaining Business Assets2. Under cl 65.1 of the contract, the sale of the 1 The Property, Licence, and Gaming Machine Entitlements were defined as the "Assets" under cl 33.1. The Assets also included Plant and Equipment and the Business Assets. 2 The Business Assets were defined under cl 33.1 as the Business Records, the Goodwill, the Contracts, Stock, Business name, Domain name, Facebook & Instagram Account, and the Lease. Gordon Gleeson Jagot Property, Licence, and Gaming Machine Entitlements was conditional upon, and interdependent with, the sale of the Business Assets. The total purchase price was The Completion Date (specified in item 2 of Sch 1 to the contract) was 55 days after the contract date3 in respect of the assets to be purchased by the second respondent and 56 days after the contract date in respect of the assets to be purchased by the first respondent. The parties agreed these dates to be 30 and 31 March 2020 respectively. Clause 35.1 identified that until each of the Conditions Precedent in item 13 of Sch 1 to the contract was satisfied or waived, the parties were not obliged to complete the contract. There were two Conditions Precedent. One condition required that on the day of completion of the sale of the Business Assets, the Vendor (as lessor) and the second respondent (as lessee) were to enter into a Lease of the Quarrymans Hotel, as required by cl 65.6. The second condition was the satisfaction of cl 66.1, concerning a notice from Ausgrid requiring water and sewer works to be completed. the Vendor Clause 38 excluded warranties by including, under cl 38.1(b)(iv), any warranty as to the "present and future financial or income return to be derived from the Property or the Business". By cl 38.1(d)(ii), the Purchaser was not entitled to rescind, terminate or delay Completion because of any matter referred to in cl 38. In addition, cl 55.2(a) relevantly provided that the Vendor gave no representation or warranties about "future matters, including the future financial position or performance of the Business". Clauses 48.1 to 48.7 concerned the transfer of the Licence (the liquor licence and associated Gaming Machine Entitlements) from the Vendor to the Purchaser. Clause 48.8 contained the Vendor's warranties. The warranties specific to the Licence included that: the Vendor had authority to transfer the Licence (cl 48.8(o)(p)); the Licence would be subsisting and available to the Purchaser on Completion and was not liable to suspension or cancellation (cl 48.8(o)(q)); the Licence would not be subject to any conditions other than those already imposed (or automatically imposed) under the Liquor Act and the Regulations under that Act from time to time (cl 48.8(o)(r)); and there were no conditions on the Licence which had not been disclosed (cl 48.8(f)). The Vendor also warranted that: there 3 The contract date was 31 January 2020. Gordon Gleeson Jagot were no current, threatened or proposed police actions or proceedings and that there were no judgments, orders or convictions which were likely to render the Licence liable to cancellation, forfeiture, suspension or the subject of action under the Liquor Act (cll 48.8(o)(t), (v), (w)); and that the Vendor was not aware of any conditions of the Licence that had not been complied with and not disclosed in the contract (cl 48.8(o)(u)). Clause 50 is the key provision. It was headed "Management Prior to Completion". Clause 50.1, headed "Dealings Pending Completion", provided that: "Subject to clause 50.2, from the date of this contract until Completion, the Vendor must carry on the Business in the usual and ordinary course as regards its nature, scope and manner and repair and maintain the Assets in the same manner as repaired and maintained as at the date of this Contract and use reasonable endeavours to ensure all items on the Inventory are in good repair and in proper working order having regard to their condition at the date of this Contract, fair wear and tear excepted." (emphasis added) This appeal concerns the first limb of cl 50.1. The exceptions provided for in cl 50.2 may be put to one side. In general terms, they permitted the Vendor to deal with contracts to which it was a party, other than specified contracts. Under cl 50.4, the Purchaser could give prior written consent to the Vendor not complying with an obligation in cl 50.1. Clause 51 concerned Completion. By cl 51.2, at Completion, the Vendor had to transfer the Assets to the Purchaser in exchange for the Purchaser paying the Purchase Price (less the deposit). Clause 51.7 dealt with notices to complete. It provided that completion of the contract was to take place on the Completion Date and that if completion did not occur, a party which was ready, willing and able to complete, and was not in default, was permitted to serve the other party with a notice requiring the other party to complete the contract not less than ten business days after the date of that notice and making time of the essence. Clause 57 dealt with title, risk, and insurance. It provided that title to and risk in the Assets passed to the Purchaser on Completion and that, until Completion, the Vendor was required to take out and maintain current insurance policies in respect of the Assets covering such risks and for such amounts as would be maintained in accordance with prudent business practice. Gordon Gleeson Jagot Clause 58 concerned the goods and services tax ("GST"). Under cl 58.1, the parties agreed that the sale of the Assets under the contract constituted the supply of a going concern for the purposes of the A New Tax System (Goods and Services Tax) Act 1999 (Cth) ("the GST Act"). Under cl 58.2, the Vendor undertook "that it will carry on the enterprise transferred under this contract until the day that the supply is made for the purposes of the A New Tax System (Goods and Services Tax) Act 1999". The public health orders Section 7 of the Public Health Act 2010 (NSW) enabled the Minister by order to give directions if the Minister considered that a situation had arisen that was, or was likely to be, a risk to public health. Under s 10 of that Act, a failure to comply with such a direction was a criminal offence with, relevantly, a maximum penalty of a fine, including a fine for each day the offence continued. On 23 March 2020, the Minister made an order giving directions in response to the COVID-19 pandemic4. The order directed that pubs (meaning licensed premises under the Liquor Act) "must not be open to members of the public ... except for the purposes of ... selling food or beverages for persons to consume off the premises"5. The order applied to the Quarrymans Hotel. In response, the Quarrymans Hotel was closed on 23 March 2020 to enable a shift to a takeaway-only operation. By 26 March 2020, the Quarrymans Hotel had re-opened, but only for the purpose of selling takeaway craft beer and food. Two further public health orders were made on 14 and 29 May 2020 respectively6. The order made on 14 May 2020 permitted pubs to sell food or drinks for not more than ten persons to consume on the premises, as well as food or drinks for persons to consume off the premises7. The order made on 29 May 4 Public Health (COVID-19 Places of Social Gathering) Order 2020 (NSW). 5 Public Health (COVID-19 Places of Social Gathering) Order 2020 (NSW), s 5(1)(a)(i). 6 Public Health (COVID-19 Restrictions on Gathering and Movement) Order (No 2) 2020 (NSW); Public Health (COVID-19 Restrictions on Gathering and Movement) Order (No 3) 2020 (NSW). 7 Public Health (COVID-19 Restrictions on Gathering and Movement) Order (No 2) 2020 (NSW), s 7(2)(a)-(b). Gordon Gleeson Jagot 2020 permitted 50 persons in a separate seated food or drink area or the total number of persons calculated by allowing four square metres of space per each customer in a pub, whichever was the lesser8. The Quarrymans Hotel continued to offer takeaway food and alcohol only until 1 June 2020 when it re-opened in accordance with the customer number restrictions in the 29 May 2020 order (which commenced on 1 June 2020). In the meantime, on 25 March 2020, the Purchaser informed the Vendor that it would not complete the contract as the Vendor was not ready, willing and able to complete the contract as the Vendor was in breach of cll 50.1, 58.1 and 58.2. On 27 March 2020, the Purchaser wrote to the Vendor asserting also that the contract had been frustrated or that the Purchaser could issue a notice to complete with which the Vendor could not comply, enabling the Purchaser to terminate the contract and sue for damages. The Vendor responded on the same day that it was ready, willing and able to perform its contractual obligations and called upon the Purchaser to complete the contract. As noted, Completion was due to occur on 30 and 31 March 2020. On 31 March 2020, the Vendor confirmed that all Conditions Precedent to Completion prescribed by cl 35.1 had been satisfied and said it was "ready, willing and able to settle". The Vendor reiterated this position on 6 April 2020. On 22 April 2020, the Purchaser obtained an updated valuation of the hotel business of $10,250,000, being $1 million less than the contracted purchase price. Ultimately, the Vendor served a notice to complete on the Purchaser on 28 April 2020 calling for completion of the sale of the Business Assets by 12 May 2020 and of the Property, Licence, and Gaming Machine Entitlements by 13 May 2020. In response, the Purchaser commenced proceedings seeking declaratory relief to the effect that the contract had been frustrated or alternatively that the Vendor was not entitled to issue the notice to complete. On 21 May 2020, the Vendor served a notice of termination on the Purchaser on the basis of the Purchaser's failure to complete in accordance with the notice to complete. On 23 May 2020, the Purchaser responded to the effect that the contract was frustrated but, if that were not so, the Vendor was not entitled to issue the notice to complete and its issue of the notice of termination constituted a repudiation of the contract which the Purchaser accepted. 8 Public Health (COVID-19 Restrictions on Gathering and Movement) Order (No 3) 2020 (NSW), Sch 1, item 22. Gordon Gleeson Jagot The primary judge's decision In the Supreme Court of New South Wales, the primary judge (Darke J) concluded that the contract had not been frustrated9, and cl 50.1, properly construed, required the Vendor to "carry on the Business in the usual and ordinary course" as far as it remained possible to do so in accordance with law. It followed that the Vendor was not in breach of cl 50.110. Accordingly, the Vendor was entitled to serve the notice to complete, which was effective to make the time for completion essential11. As the Purchaser failed to complete, the Vendor was entitled to terminate the contract and was able to seek damages for loss of the bargain12. The Court of Appeal's decision The Purchaser appealed. The Purchaser alleged that the primary judge misconstrued cl 50.1 and ought to have held that from the coming into force of the first public health order the Vendor was unable to comply with cl 50.1 and, thereby, was not entitled to issue the notice to complete or to terminate when the Purchaser failed to comply with that notice. Accordingly, the Vendor's purported termination constituted a repudiation of the contract, which was accepted by the Purchaser. There was no appeal against the primary judge's conclusion that the contract was not frustrated. The Purchaser also did not allege that the Vendor was in breach of cl 50.1. Rather, the Purchaser's case on appeal was that as the Vendor could not comply with cl 50.1, the Vendor was not ready, willing and able to complete the contract, and therefore could not serve the notice to complete or terminate for the Purchaser's failure to complete. 9 Dyco Hotels Pty Ltd v Laundy Hotels (Quarry) Pty Ltd (2021) 20 BPR 41,403 at 10 Dyco Hotels Pty Ltd v Laundy Hotels (Quarry) Pty Ltd (2021) 20 BPR 41,403 at 11 Dyco Hotels Pty Ltd v Laundy Hotels (Quarry) Pty Ltd (2021) 20 BPR 41,403 at 12 Dyco Hotels Pty Ltd v Laundy Hotels (Quarry) Pty Ltd (2021) 20 BPR 41,403 at Gordon Gleeson Jagot A majority of the Court of Appeal of the Supreme Court of New South Wales (Bathurst CJ and Brereton JA) allowed the appeal and set aside the orders of the primary judge. Bathurst CJ concluded that cl 50.1 was not to be construed as if the Vendor's obligation to "carry on the Business in the usual and ordinary course as regards its nature, scope and manner" was limited to the extent permitted by law13. Bathurst CJ therefore considered that the public health order made on 23 March 2020 was a supervening event rendering the Vendor's compliance with cl 50.1 illegal14. By analogy to cases involving the enforceability of contracts during wartime restrictions15 and covenants in leases16, his Honour considered that the supervening illegality suspended the relevant contractual obligation in cl 50.117. His Honour concluded that cl 50.1 was an essential term with which the Vendor could not comply at the time it served the notice to complete. The purported termination relying on the Purchaser's failure to comply with the notice to complete, accordingly, involved a repudiation of the contract by the Vendor18. 13 Dyco Hotels Pty Ltd v Laundy Hotels (Quarry) Pty Ltd (2021) 396 ALR 340 at 349- 14 Dyco Hotels Pty Ltd v Laundy Hotels (Quarry) Pty Ltd (2021) 396 ALR 340 at 351 15 Arab Bank Ltd v Barclays Bank (Dominion, Colonial and Overseas) [1954] AC 495 and Libyan Arab Foreign Bank v Bankers Trust Co [1989] QB 728, cited in Dyco Hotels Pty Ltd v Laundy Hotels (Quarry) Pty Ltd (2021) 396 ALR 340 at 351 [62]- 16 Canary Wharf (BP 4) T1 Ltd v European Medicines Agency (2019) 183 ConLR 167, Gerraty v McGavin (1914) 18 CLR 152, Cricklewood Property and Investment Trust Ltd v Leighton's Investment Trust Ltd [1945] AC 221 and John Lewis Properties plc v Viscount Chelsea [1993] 2 EGLR 77, cited in Dyco Hotels Pty Ltd v Laundy Hotels (Quarry) Pty Ltd (2021) 396 ALR 340 at 352-353 [65]-[71]. 17 Dyco Hotels Pty Ltd v Laundy Hotels (Quarry) Pty Ltd (2021) 396 ALR 340 at 352 18 Dyco Hotels Pty Ltd v Laundy Hotels (Quarry) Pty Ltd (2021) 396 ALR 340 at 354 Gordon Gleeson Jagot Brereton JA agreed with Bathurst CJ19, but also considered that the Vendor was in breach of cl 50.1 at the time it purported to serve the notice to complete20. Basten JA (in dissent) considered that the obligation in cl 50.1 meant that the Vendor had to "carry on the Business in the usual and ordinary course as regards its nature, scope and manner" as permitted by law. Accordingly, in complying with the public health order, the Vendor was not in breach of cl 50.121. It followed that the appeal had to fail22. The proper construction of the contract This case is to be resolved on the proper construction of the contract, specifically cl 50.1. "It is well established that the terms of a commercial contract are to be understood objectively, by what a reasonable businessperson would have understood them to mean, rather than by reference to the subjectively stated intentions of the parties to the contract. In a practical sense, this requires that the reasonable businessperson be placed in the position of the parties. It is from that perspective that the court considers the circumstances surrounding the contract and the commercial purpose and objects to be achieved by it23." It is not necessary to do more than construe cl 50.1 in its context to conclude that the obligation on the Vendor to "carry on the Business in the usual and ordinary course as regards its nature, scope and manner" incorporated an inherent requirement to do so in accordance with law. That is, the obligation imposed on 19 Dyco Hotels Pty Ltd v Laundy Hotels (Quarry) Pty Ltd (2021) 396 ALR 340 at 371 20 Dyco Hotels Pty Ltd v Laundy Hotels (Quarry) Pty Ltd (2021) 396 ALR 340 at 372 21 Dyco Hotels Pty Ltd v Laundy Hotels (Quarry) Pty Ltd (2021) 396 ALR 340 at 368 22 Dyco Hotels Pty Ltd v Laundy Hotels (Quarry) Pty Ltd (2021) 396 ALR 340 at 368 23 Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544 at 551 [16], citing Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at 656-657 [35] and the cases therein cited at fnn 58 and 60. Gordon Gleeson Jagot the Vendor was to carry on the Business in the manner it was being conducted at the time of contract to the extent that doing so was lawful. There was no obligation (and could not have been an obligation) imposed on the Vendor to carry on the Business unlawfully. It is not necessary to have recourse to either the doctrine of implied contractual terms to impose on the Vendor an obligation to carry on the business to the extent that it was lawful, or the possible consequences of supervening illegality resulting in suspension rather than frustration of the contractual obligation imposed by cl 50.1. The obligation in cl 50.1 was for the Vendor to carry on the Business. The "Business" was defined to be "the hotel business trading as the 'Quarrymans Hotel' which operates pursuant to the Licence". The Licence, annexed as Sch 5 to the contract, stated that "Licence conditions imposed by the Liquor Act and Regulation apply". That legislative scheme contains an extensive regime of conditions applying to hotel licences24, for the regulation and control of licenced premises generally25 (including powers of the Independent Liquor and Gaming Authority to cancel, suspend, and impose new conditions on Licences26), and offences for The centrality of the lawful operation of the Business pursuant to the Licence is also exposed by other provisions of the contract. The Gaming Machine Entitlements were not free-standing. They were allocated to the Licence under the Gaming Machines Act 2001 (NSW)28. The Assets included the Licence and the Gaming Machine Entitlements. It was the Assets which were to be purchased (cl 51.2). The Vendor's obligation to procure approval for the transfer of the Licence to a transferee nominated by the Purchaser was intended to occur "on the morning of the Completion Date" (cll 48.3 and 48.6). The Vendor's warranties all related, directly or indirectly, to the past, current, and anticipated future lawful operation of the hotel, including in relation to the Licence (cl 48.8)29. In particular, 24 Liquor Act 2007 (NSW), Pt 3 Div 2. 25 Liquor Act 2007 (NSW), Pt 5. 26 Liquor Act 2007 (NSW), Pts 9 and 9A. 27 Liquor Act 2007 (NSW), Pt 6. 28 Under s 16 of the Gaming Machines Act 2001 (NSW), gaming machine entitlements are "held in respect of a hotel licence or club licence". 29 See above at [8]. Gordon Gleeson Jagot the warranty that as at the Completion Date the Licence would not be subject to any conditions "other than any condition already imposed on the Licence or automatically imposed by virtue of the Liquor Act and the Regulations under that act from time to time" (emphasis added) (cl 48.8(o)(r)) was an express acknowledgment that the requirements for the lawful operation of the Business were variable. Accordingly, a reasonable businessperson in the position of the parties would have understood cl 50.1 to mean that from the date of the contract until Completion, the Vendor was required to carry on the Business "in the usual and ordinary course as regards its nature, scope and manner" in accordance with law. The past, current, and anticipated future lawfulness of the operation of the Business was objectively essential and a commercial necessity to the parties. Without the Licence and associated Gaming Machine Entitlements, there would be no "Business". The Vendor's obligation to "carry on the Business in the usual and ordinary course as regards its nature, scope and manner", on the proper construction of that provision, could never extend to an obligation on the Vendor to act illegally. The Vendor's obligation was necessarily moulded by, and subject to, the operation of the law from time to time. Clause 50.1 is not a provision which, on its proper construction, has a "double intendment"30, in the sense of contemplating an operation both within and against the law so that the provision should be construed as meaning only the former intendment. Clause 50.1 has a single intendment – that the Vendor's obligation to "carry on the Business in the usual and ordinary course as regards its nature, scope and manner" is moulded by, and subject to, the law as in force from time to time. The contrary construction would require "intractable language"31 giving effect to an inferred objective intention of the parties that the Vendor be obliged to "carry on the Business in the usual and ordinary course as regards its 30 Langley v Foster (1906) 4 CLR 167 at 181, citing Sheppard, The Touchstone of Common Assurances being a Plain and Familiar Treatise on Conveyancing, 8th ed (1826), vol 1 at 88. 31 Global Network Services Pty Ltd v Legion Telecall Pty Ltd [2001] NSWCA 279 at Gordon Gleeson Jagot nature, scope and manner" contrary to the law as in force from time to time and thereby place at risk the continuation of the Licence32. This conclusion is reinforced by the description that the Business is to be carried on in its "usual and ordinary course". The Business, which operates pursuant to the Licence, in its usual and ordinary course must operate in accordance with law. The further description "as regards its nature, scope and manner" reflects the objectively assumed common position of the parties at the date of the contract that the nature, scope and manner of the Business at that time was in the usual and ordinary course – that is, in "the undistinguished common flow"33 of the business – which inherently encompasses that the business was lawful. The relevant obligation of the Vendor in cl 50.1 cannot be construed as if one part (the "usual and ordinary course") incorporates a requirement of lawfulness, but the other part (the "nature, scope and manner") does not. Otherwise, in the event of supervening illegality, the clause would contain potentially irreconcilable obligations in that the Vendor would be obliged to carry on the Business both in the "nature, scope and manner" that it operated at the contract date (on this hypothesis, unlawfully) and "in the usual and ordinary course" that it operated at the contract date (that is, lawfully). Construed as it must be, as a single obligation subject to an overriding qualification of lawfulness, the relevant part of cl 50.1 reflects the commercial reality that ongoing legal compliance was essential to the Business. The arguments against this construction are unpersuasive. It is appropriate to deal with each in turn. The requirement for the carrying on of the Business to be lawful did not need to be expressly stated in cl 50.1. Nor does it need to be implied. It is inherent within the words "the usual and ordinary course as regards its nature, scope and manner" construed in the context of the whole contract. This context includes that the subject-matter of the contract is a hotel business that required specific legal 32 Under Pts 9 and 9A of the Liquor Act, a failure to comply with a public health order could have engaged the disciplinary powers of the Independent Liquor and Gaming Authority which included cancellation, suspension, and the imposition of new conditions on the Licence. 33 Downs Distributing Co Pty Ltd v Associated Blue Star Stores Pty Ltd (In liq) (1948) 76 CLR 463 at 477. Gordon Gleeson Jagot authority to continue to operate and which, by the terms of the Vendor's warranties in cl 48.8, the parties accepted was and would be subject to ongoing and potentially changing regulatory requirements. The Vendor's warranties in cl 48.8 expose that the regulatory environment within which the Business operated was dynamic. The operation of the Business in the "usual and ordinary course as regards its nature, scope and manner" was subject to potential police actions, infringement notices, the consequences of assaults, and new or amended conditions on its Licence. The warranties that the Vendor could and did give were that, to the best of its knowledge, there were no such matters existing, proposed or likely. The Vendor could not warrant more, given the dynamic nature of the regulatory environment. Clause 50.1 was only a promise by the Vendor to act in a certain way between the contract date and Completion, and it did so. Further, the dynamic nature of the regulatory environment of the Business under the Liquor Act is inconsistent with the proposition that the Vendor might be in breach of or unable to comply with cl 50.1, or that the Purchaser would be permitted to delay Completion, because of any change in the law which, as in this case, did not have the effect of frustrating the contract34. Accordingly, the fact that cl 50.1 might be complied with in circumstances where the lawful carrying on of the Business before or at the Completion Date bore little resemblance to the 34 Regulatory actions available under the Liquor Act included: written directions from the Secretary of the Department of Industry "concerning any matter relating to the licensed premises (including any conduct on the licensed premises)" (s 75(1)); short-term or long-term closure orders if certain circumstances arise (ss 82 and 84); a late hour entry declaration to prevent patrons entering licensed premises during late trading hours even though the premises are authorised to trade during that time (s 87(2)); notices restricting or prohibiting the licensee selling or supplying a specified liquor product (s 101(1)), or restricting or prohibiting an activity that promotes the sale or supply of liquor in certain circumstances (s 102), or restricting or prohibiting conduct likely to encourage misuse or abuse of liquor (s 102A(1)); as well as regulations which enable declarations of a "restricted alcohol area" in respect of an alcohol free zone, or where the sale, supply, possession or consumption of liquor on any premises (whether or not licensed premises) may be restricted (s 115). Gordon Gleeson Jagot carrying on of the Business at the contract date also does not support a different construction of the provision35. The capacity of the Purchaser in cl 50.4 to agree not to require the Vendor to comply with its obligations in cl 50.1 is not inconsistent with the overarching requirement of lawfulness conditioning the Vendor's obligation to carry on the Business as specified until Completion. The Purchaser had no capacity to vary the obligation to permit the Vendor to carry on the Business other than in accordance with law. The Vendor had no choice other than to comply with the law. This does not mean that cl 50.1 was a dead letter. Clause 50.1 extended beyond the relevant obligation in respect of the Vendor carrying on the Business. It included repair and maintenance obligations in respect of the Assets and the items on the Inventory. Further, it may have been in the interests of both the Vendor and the Purchaser for there to have been some change to the usual and ordinary nature, scope or manner of the Business between the contract date and Completion which did not engage any aspect of the lawful authority of the Business to continue to operate. And it was in the interests of the Purchaser and the Vendor for the Vendor to continue to carry on the Business in the usual and ordinary course to the extent the Vendor could lawfully do so. Clause 50.4 would have been useful if the parties had sought to agree that an obligation contained in cl 50.1 did not apply but says nothing about the proper construction of the relevant obligation in cl 50.1. The Vendor did not warrant that the value of the Assets would remain the same between the contract date and Completion. Nor did the Vendor accept the risk that if the value of the Assets was reduced, even substantially, the Purchaser could elect not to complete. Similarly, if the underlying value of the Assets substantially increased between the contract date and Completion, the Vendor could not delay Completion. The deal the parties made was that the price was agreed, the Vendor would comply with cl 50.1, and Completion would occur subject only to the Conditions Precedent in cl 35.1 and the other contractual rights of rescission and termination. Clause 50.1 is not to be redrafted merely because the doctrine of frustration was not engaged on the facts of the case. The exclusion of warranties from the Vendor as to the "present and future financial or income return to be derived from the Property or the Business" under cl 38.1(b)(iv), and as to "future matters, including the future financial position or 35 Contrary to Dyco Hotels Pty Ltd v Laundy Hotels (Quarry) Pty Ltd (2021) 396 ALR Gordon Gleeson Jagot performance of the Business" under cl 55.2(a) does not support the contrary conclusion. They reinforce that the subject-matter of the contract was the Business, which was subject to a dynamic regulatory environment not within the Vendor's control. The Vendor warranted what it knew to the best of its knowledge in cl 48.8. It could not warrant the financial returns from the Business, given not only the regulatory environment within which the Business operated, but also the trends in the commercial environment which might substantially affect the Goodwill of the Business outside of the direct control of the Vendor. Far from this reality (embodied in cll 38.1(b)(iv) and 55.2(a)) reflecting that it was necessary for the Purchaser to obtain the benefit of cl 50.1 as an absolute guarantee of the continuing of the Business in the same form as it existed at the contract date, cll 38.1(b)(iv) and 55.2(a) reinforce that cl 50.1 could not operate in that manner. There was nothing the Vendor could do other than carry on the Business as it was doing to the extent permitted by law to safeguard, as far as possible, the Goodwill in the Business for the benefit of the Vendor (for revenue payable to it before Completion) and the Purchaser (for revenue payable to it after Completion)36. Clause 57, which dealt with title and risk, also does not support the contrary conclusion. Under that clause, title to and risk in the Assets were intended to pass on Completion in the sense that, from that moment on, the Purchaser bore the whole of the risk in the Assets (including the Goodwill). This does not mean that between the contract date and Completion, the Vendor could or did guarantee that the value of the Goodwill would remain the same. Goodwill is "intangible and ephemeral rather than tangible and permanent"37, and involves the "attractive force" of the business38 for customers, existing and prospective. For the period from the contract date until Completion, the Vendor had the risk of receiving In accordance with cl 45.1 of the contract. 37 Commissioner of State Revenue (WA) v Placer Dome Inc (2018) 265 CLR 585 at 603 [56], quoting Hey, "Goodwill – Investment in the Intangible", in Currie, Peel and Peters (eds), Microeconomic Analysis: Essays in Microeconomics and Economic Development (1981) 196 at 197. 38 Commissioner of State Revenue (WA) v Placer Dome Inc (2018) 265 CLR 585 at 604 [58], quoting Inland Revenue Commissioners v Muller & Co's Margarine Ltd [1901] AC 217 at 223-224. Gordon Gleeson Jagot reduced revenue from any circumstance, whether temporary or ongoing. From Completion, the Purchaser had that risk39. Fletcher v Manton40 does not assist. The case concerned the equitable principle that title to and risk in property pass on the date of the contract41. Clauses 57.1 and 57.2 of this contract displace that ordinary equitable principle. They do not otherwise alter the contract. Dixon J's statement, that the purchaser's risk after the exchange of contracts included "whatever loss or detriment may ... fortuitously befall the property or be placed by the law" on the owner42, reflected the fact that the purchaser was the "owner" from that date. This provides no support for the conclusion that, in respect of the contract in the present case, the Vendor warranted that the value of the Assets would not decline or that the Business would be able by law to operate at Completion as it had operated at the contract date. Meriton Apartments Pty Ltd v McLaurin & Tait (Developments) Pty Ltd43 rightly focused on the content of the relevant contractual promise44, rather than the court's own view of an essential expected benefit of the contract45. This is significant given that, in the present case, the Purchaser abandoned recourse to the doctrine of frustration by reason of impossibility or irreconcilability with the common contractual purpose of the parties46. Having done so, the Purchaser cannot seek to rewrite cl 50.1 into a form of warranty by the Vendor as to the way the Business would operate at Completion. 39 See cl 45.1 of the contract. (1940) 64 CLR 37. (1940) 64 CLR 37 at 48. 42 Fletcher v Manton (1940) 64 CLR 37 at 48. (1976) 133 CLR 671. (1976) 133 CLR 671 at 677-678. 45 Scanlan's New Neon Ltd v Tooheys Ltd (1943) 67 CLR 169 at 188. 46 Canary Wharf (BP4) T1 Ltd v European Medicines Agency (2019) 183 ConLR 167 Gordon Gleeson Jagot As Latham CJ explained in Scanlan's New Neon Ltd v Tooheys Ltd, to which Brereton JA referred47, "a promisor takes the risk of an event happening which prevents [the promisor] from performing [the] promise"48. But whether that risk is taken or not depends on the terms of the promise. In that case, the lessor did not promise that the sign would be illuminated. The lessee could not avoid the obligation to pay rent based on the supervening illegality of illumination. By analogy, the Vendor in the present case did not promise that the Business would operate at Completion as it operated at the contract date. The Purchaser was not thereby "excused from performance because the contract did not work out in the manner expected by one or even by both of the parties"49. Clause 58.1 is immaterial. It was concerned with a specific subject-matter, GST. The supply of the Assets as a "going concern" for the purposes of the GST Act was precisely that – a requirement to obtain GST benefits under that legislation and an associated ruling50. There is no dispute that the Business involved a going concern at the Completion Date. The nature, scope and manner of the Business under cl 50.1 had no connection with that fact. Bathurst CJ's statement that the Vendor could not convey "the hotel as a going concern" at the Completion Date51 can mean only that the Vendor could not then transfer the Business as it was being carried on at the contract date due to the public health order then in force. The Business remained a "going concern" for the purposes of the GST Act and otherwise52. The Vendor's obligations as lessor under the Lease also do not lead to a different view. Clause 65.6 required the Vendor to grant, and the second 47 Dyco Hotels Pty Ltd v Laundy Hotels (Quarry) Pty Ltd (2021) 396 ALR 340 at 374 (1943) 67 CLR 169 at 200. 49 Scanlan's New Neon Ltd v Tooheys Ltd (1943) 67 CLR 169 at 192. 50 Subdivision 38-J of the GST Act and Australian Taxation Office, Goods and services tax: when is a "supply of a going concern" GST-free? (GSTR 2002/5, 16 October 2002). 51 Dyco Hotels Pty Ltd v Laundy Hotels (Quarry) Pty Ltd (2021) 396 ALR 340 at 353- 52 eg, Commissioner of State Revenue (WA) v Placer Dome Inc (2018) 265 CLR 585 Gordon Gleeson Jagot respondent to enter into, the Lease. The second respondent was the purchaser of the Goodwill, Plant and Equipment and remaining Business Assets, while the first respondent was the purchaser of the Property, the Licence, and the Gaming Machine Entitlements53. Clauses 65.2 and 65.6 provided for the Lease to be granted on the Completion of the sale of the Business Assets, but one day prior to the Completion of the sale of the Property, the Licence, and the Gaming Machine Entitlements. By this means, on transfer of the Property, the Licence, and the Gaming Machine Entitlements on the following day54, the first respondent would become the lessor in place of the Vendor. As Bathurst CJ noted, there was an obligation under the Lease to "keep the Premises open for the Lessee's business during the usual hours of trade of such a business" (cl 9.2(i)). However, the obligation of the lessee to carry on and conduct the business was to do so "strictly in accordance with ... the Liquor Act and all other relevant law" under cl A2.1 of the Lease. Accordingly, the Lease provides contextual support to the contrary of the construction of the majority in the Court of Appeal55. For these reasons, the Vendor was complying with cl 50.1 (and cll 58.1 and 58.2) of the contract at the time of Completion. The fact that the then extant public health order prevented the Vendor from carrying on the Business in the same way as it had been carried on at the contract date did not mean that the Vendor was not complying or could not comply with cl 50.1. The Vendor was "ready, willing and able to complete and ... not in default" in accordance with cl 51.7(b). Accordingly, the Vendor was able to serve the notice to complete making time of the essence for Completion as provided for in cl 51.7(b)(ii). By not completing as required, the Purchaser was in breach of the contract in an essential respect, entitling the Vendor to terminate the contract by notice under cl 63.1 (and to keep the Deposit and sue for damages). On this basis, the status of cl 50.1 as an essential or intermediate term is immaterial. So too are the difficulties and uncertainties associated with any supposed doctrine of the suspension of a contractual promise temporarily incapable of being satisfied by reason of supervening illegality. 53 Clause 64 of the contract. 54 As required by cl 65.2 and item 2 of Sch 1 to the contract. 55 cf Dyco Hotels Pty Ltd v Laundy Hotels (Quarry) Pty Ltd (2021) 396 ALR 340 at Gordon Gleeson Jagot The orders which should be made are: The appeal be allowed with costs. The orders of the Court of Appeal of the Supreme Court of New South Wales made on 21 December 2021 be set aside and, in their place, order that the appeal be dismissed with costs. 3. Within 28 days of the date of these orders, the respondents repay to the appellant the whole of any sum paid by the appellant to the respondents under or in accordance with Order 2(b) of the orders of the Court of Appeal of the Supreme Court of New South Wales made on 21 December 2021 (the deposit and interest thereon). If, within 14 days of the date of these orders, the parties agree upon the amount of further interest to be paid by the respondents to the appellant on the sum referred to in Order 3 of these orders, the parties are to file a minute of consent and the respondents are to pay the appellants that further sum of interest forthwith. Failing agreement, the issue and calculation of interest be remitted to the Supreme Court of New South Wales.

HIGH COURT OF AUSTRALIA APPELLANT AND WESTPAC BANKING CORPORATION LIMITED & ANOR RESPONDENTS Aktas v Westpac Banking Corporation Limited [2010] HCA 25 4 August 2010 ORDER Appeal allowed. Set aside Order 1 of the orders of the Court of Appeal of the Supreme Court of New South Wales made on 9 February 2009 and in its place order that: the appeal by Mr Aktas be allowed with costs; set aside Order 1 of the orders made by Fullerton J on 7 November 2007 and in its place enter verdict and judgment for Mr Aktas for damages in the sum of $50,000 with interest. set aside Order 2 of the orders made by Fullerton J on 29 November 2007 and in its place order that Westpac Banking Corporation Limited ("Westpac") pay the costs of the action by Mr Aktas. Westpac to pay Mr Aktas's costs in this Court. The parties are at liberty within 28 days to re-list the appeal for further orders if an agreement is reached respecting the interest to be added to the verdict of $50,000. In the absence of agreement, the question of interest will be remitted for determination by a Judge of the Supreme Court of New South Wales. On appeal from the Supreme Court of New South Wales Representation T S Hale SC with A T S Dawson for the appellant (instructed by Penhall & Co Lawyers) J R Sackar QC with K P Smark SC and R J Hardcastle for the first respondent (instructed by Mallesons Stephen Jaques) Submitting appearance for the second respondent Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Aktas v Westpac Banking Corporation Limited Defamation – Defences – Qualified privilege – Common law – Respondent bank mistakenly dishonoured cheques of appellant and communicated dishonour to payees of cheques – Communication defamatory – Whether communication made on occasion of qualified privilege – Rationale for defence of qualified privilege – Whether reciprocity of interest between respondent bank and payees – Whether public to occasion of such in privilege attaching communication – Relevance of mistake leading to communication – Relevance of statutory obligations. interest Words and phrases – "community of interest", "malice", "occasion of qualified privilege", "reciprocity of interest", "refer to drawer". Cheques Act 1986 (Cth), ss 67, 69. Defamation Act 1974 (NSW), s 11. Property, Stock and Business Agents Act 1941 (NSW), s 36. FRENCH CJ, GUMMOW AND HAYNE JJ. The appellant (Mr Aktas) was the sole shareholder and, from time to time, a director, of the second respondent ("Homewise"). Pursuant to franchising arrangements with Century 21 Australia Pty Ltd ("the franchisor"), Homewise carried on a real estate agency business under the name "Century 21 Homewise Realty" at Auburn in the State of New South Wales. The first respondent ("Westpac") was the banker to Homewise, which maintained three accounts at the Auburn branch of Westpac, including two trust accounts. Homewise was obliged by the Property, Stock and Business Agents Act 1941 (NSW) ("the Business Agents Act"), as a licensee thereunder, to maintain a trust account on behalf of clients whose rental properties it managed. Section 36(2) of the Business Agents Act1 protected trust account moneys from any attachment at the instance of a creditor of the licensee2. The significance of s 36(2) for this case will appear later in these reasons3. One of the most important conditions in the contract between a banker and a customer who conducts a current account is the obligation of the banker to honour the customer's cheques to the extent of the customer's credit4. Part II of the Banking Act 1959 (Cth) regulates by a licensing system the carrying on of banking business in Australia. The conduct of an accurate and efficient banking system is a matter of what may be called "the common convenience and welfare of society"5. 1 Section 36(1) required Homewise to conduct a trust account and s 36(2) read: "The moneys [held in a trust account] shall not be available for the payment of the debts of the licensee to any other creditor of the licensee, or be liable to be attached or taken in execution under the order or process of any court at the instance of any such other creditor." (emphasis added) 2 Cf Plunkett v Barclays Bank Ltd [1936] 2 KB 107, in which the Court of Appeal held that on receipt of a garnishee order against the trust account of a solicitor the proper procedure was for the garnishee bank to stop the trust account and inform the court of the circumstances. 3 The Business Agents Act was repealed and replaced by the Property, Stock and Business Agents Act 2002 (NSW). Similar provision to s 36(2) is now made by Joachimson v Swiss Bank Corporation [1921] 3 KB 110 at 127; Collier, Banking in Australia, (1934) at 17. 5 Macintosh v Dun (1908) 6 CLR 303 at 305; [1908] AC 390 at 399. On 1 December 1997 Homewise drew 30 cheques on one of the trust accounts. The appellant was one of the signatories on the cheques. The cheques were regular on their face and were either directly deposited to the nominated account of a client, or mailed to the client. Some of the nominated accounts were with Westpac itself, and others were with a collecting bank. Cheques dishonoured None of the 30 cheques was honoured by Westpac on presentation. It is critical to an understanding of the issues before this Court to appreciate that it was the reason given by Westpac for the notice of dishonour, not the mere fact of dishonour or the fate of the cheques in some general sense, which founded the action by Mr Aktas against Westpac and established the relevant relationship between Westpac and the recipients of the notice of dishonour. Under cover of what was described in the evidence as "automatically generated correspondence" dated 3 December 1997, Westpac returned the cheques to its own customers with the endorsement "Refer to Drawer" stamped on the reverse side. In respect of cheques presented by a collecting bank, Westpac returned the cheques stamped "Refer to Drawer" with an automatically generated slip of paper marked in the same way. The pro forma letter sent to Westpac's customers was as follows: "On 1 December 1997 you deposited a cheque for [stated amount]. The cheque [details supplied] has been returned unpaid with the answer 'Refer to Drawer'. The cheque is enclosed and the amount has been reversed from account number [number specified]. A fee of $9.00 is applicable and has been charged to the account number [as specified]. If you would like to obtain information on this matter, please do not hesitate to call Westpac Telephone Banking on [number supplied]." At no time were there insufficient funds in the trust account to meet the cheques. The failure to honour the cheques was in breach of the term in the contract of banker and customer between Westpac and Homewise that the customer's cheques be honoured to the extent of its credit. It is well accepted in Australia6 that the circumstances attending wrongful dishonouring may also found a defamation action. The expression "Refer to Drawer", when used by a banker in the above circumstances, has long been widely understood in Australia to mean that there were insufficient funds to meet the cheque7. In the present case there was evidence that, in the first week of December 1997 and beyond, various people in Auburn (particularly, but not only, in the local Turkish community in which Mr Aktas moved) reacted adversely and with some hostility to Mr Aktas after it became known that trust account cheques had "bounced". When Mr Aktas attended the Auburn branch on 2 and 3 December 1997, he was given a less than satisfactory explanation of Westpac's error, and little confidence that the matter would be speedily resolved. The litigation The Defamation Act 1974 (NSW) ("the 1974 Act") was in force at the time of the events complained of, and despite its repeal by the Defamation Act 2005 (NSW), the 1974 Act continued to govern the litigation against Westpac instituted in the Supreme Court of New South Wales in 2002. Section 7A of the 1974 Act divided the functions of judge and jury in a fashion which differed from the procedures of the common law8. A jury determined that Westpac had published defamatory imputations in respect of Mr Aktas and Homewise. It fell thereafter to Fullerton J9 to determine any defences, assess damages and determine the claims on the other causes of action pleaded by Mr Aktas and Homewise against Westpac. The outcome was that (a) as noted above, the jury found proved imputations including those that Homewise had passed valueless trust account cheques and that Mr Aktas had caused this to happen; (b) absent a good defence by Westpac to their defamation actions, Fullerton J would have awarded Mr Aktas $50,000 and Homewise $117,000; (c) Westpac, however, had 6 See, for an early example, Miles v Commercial Banking Co of Sydney (1904) 1 CLR 470; [1904] HCA 54. 7 Weaver & Craigie, The Law Relating to Banker and Customer in Australia, (1975) John Fairfax Publications Pty Ltd v Gacic (2007) 230 CLR 291 at 303-304 [31]-[33]; [2007] HCA 28. 9 Aktas v Westpac Banking Corporation Ltd [2007] NSWSC 1261. established before her Honour its defence of qualified privilege; (d) on its claim in contract, Homewise recovered $84,500, increased on its appeal to the Court of Appeal to $117,000; (e) the recovery by Homewise on its contract claim made it unnecessary for Fullerton J to determine its alternative claim in negligence. The claims by Homewise are not before this Court, and it has filed a submitting appearance as second respondent. The appeal is brought by Mr Aktas against the dismissal by the Court of Appeal (Ipp and Basten JJA and McClellan CJ at CL)10 of his appeal against the entry of the verdict for Westpac in his defamation action. For the reasons which follow, the defence of qualified privilege was not made out by Westpac, and the appeal by Mr Aktas should be allowed. Qualified privilege Section 8 of the 1974 Act provided that slander, in the same way and to the same extent as libel, was actionable without special damage. Part 3 (ss 10-45) dealt with defences in civil proceedings. Sections 20-22 contained special provisions with respect to qualified privilege, but are not relevant to this appeal. The effect of s 11 of the 1974 Act was to preserve the common law defence of qualified privilege. As a general proposition, the common law protects the publication of defamatory matter made on an occasion where one person has a duty or interest to make the publication and the recipient has a corresponding duty or interest to receive it; but the privilege depends upon the absence of malice11. The requirement of reciprocity of interest generally denies the common law privilege where the matter has been disseminated to the public at large12. 10 Aktas v Westpac Banking Corporation Ltd [2009] NSWCA 9. 11 Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104 at 133; [1994] HCA 46; Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 570 and 572; [1997] HCA 25. 12 Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104 at 133; Stephens v West Australian Newspapers Ltd (1994) 182 CLR 211 at 261; [1994] HCA 45; Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 570 and 572. Cf Defamation Act 2005 (NSW), s 30, where no reciprocity of interest is required. Malice Something should be said of the significance of malice for such a defence of qualified privilege. The generally accepted statement of principle by Parke B in Toogood v Spyring13 uses the term in several senses. His Lordship said: "In general, an action lies for the malicious publication of statements which are false in fact, and injurious to the character of another (within the well-known limits as to verbal slander), and the law considers such publication as malicious, unless it is fairly made by a person in the discharge of some public or private duty, whether legal or moral, or in the conduct of his own affairs, in matters where his interest is concerned. In such cases, the occasion prevents the inference of malice, which the law draws from unauthorized communications, and affords a qualified defence depending upon the absence of actual malice. If fairly warranted by any reasonable occasion or such communications are protected for the common convenience and welfare of society; and the law has not restricted the right to make them within any narrow limits." (emphasis added) exigency, and honestly made, In referring to malicious publication of false and injurious words, the opening words are linked to the statement in the second sentence that one of the two consequences of such an occasion is to prevent "the inference of malice" otherwise drawn from unauthorised communications. But even at the time when Toogood was decided, the development of the distinct tort of malicious falsehood, now known as injurious falsehood, was underway14. It was also becoming settled15 that, where the falsity of defamatory matter was so charged in the declaration, the matter was then presumed to have been published maliciously16. The second of the two consequences identified by Parke B involved the protection of communications if "honestly made". 13 (1834) 1 Cr M & R 181 at 193 [149 ER 1044 at 1049-1050]. 14 Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388 at 405-406 [57]-[59]; [2001] HCA 69. 15 Bromage v Prosser (1825) 4 B & C 247 [107 ER 1051]. 16 Bullen & Leake, Precedents of Pleadings in Personal Actions in the Superior Courts of Common Law, 3rd ed (1868) at 304. Hence the now established position that (a) the averment that the matter in question was published maliciously is surplusage17; but (b) phrases such as "actual malice" and "express malice" identify a purpose or motive that is foreign to a privileged occasion and actuates the defamatory publication, so as to destroy what otherwise would be a defence of qualified privilege18. Of the passage in Toogood which is so often cited, it is the second consequence identified by Parke B, that the privileged occasion affords a qualified defence depending upon the absence of actual malice, which is of continued significance in the contemporary common law. In the present case, there was no express malice in this sense on the part of Westpac. Fullerton J found that Westpac acted as it did by reason of the erroneous operation of its internal procedures. In its response to a garnishee order issued to it at the instance of the franchisor, which had been in dispute with Homewise, and which had recovered a default judgment against Homewise, Westpac acted without regard to the prohibition imposed with respect to the relevant Homewise trust account by s 36(2) of the Business Agents Act. The prohibition denied the liability of the trust account moneys to attachment under any garnishee order; the order obtained by the franchisor did not operate upon the Homewise trust moneys. However, Westpac responded by changing the designation of the trust account from "normal" to "PCO" (ie "post credits only"), with the effect that customer initiated debits were not to be honoured. That is the significance of what in submissions was called the "mistake" by Westpac. However, mere carelessness or negligence is not indicative of malice19. The circumstances negated any ground for finding express malice which would destroy qualified privilege otherwise available to Westpac. But, as developed later in these reasons, it is significant that the error by Westpac in failing to observe the requirements of s 36(2) of the Business Agents Act itself did not supply a privileged occasion for the notice of dishonour. 17 Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574 at 619; [1996] HCA 38. 18 Roberts v Bass (2002) 212 CLR 1 at 30-31 [75]-[76]; [2002] HCA 57. 19 Moore v Canadian Pacific Steamship Co [1945] 1 All ER 128 at 133. The rationale for the qualified privilege The relevant principles were said by Gleeson CJ, Hayne and Heydon JJ in Bashford v Information Australia (Newsletters) Pty Ltd20 to be stated in the earlier authorities "at a very high level of abstraction and generality". Another member of the majority, Gummow J21, spoke to the same effect. In Justin v Associated Newspapers Ltd22, Walsh JA said that the "broad principle" underlying qualified privilege is that occasions exist in which it is desirable as a matter of public policy that freedom of communication should be given priority over the right of the individual to protection against loss of reputation. It also has been said that the categories (if there be utility in a system of categories) of occasions of qualified privilege are not closed and cannot be rendered exact23. Cases of reciprocity, or as Griffith CJ put it, "community of interest"24, supply a recognised category, which in turn has an indeterminate reference. The limits of that range of reference in a given case are to be placed by regard to the "broad principle" identified by Walsh JA and to the remarks of Dixon J in Guise v Kouvelis25 as follows: "But the very width of the principles governing qualified privilege for defamation makes it more necessary, in deciding how they apply, to make a close scrutiny of the circumstances of the case, of the situation of the parties, of the relations of all concerned and of the events leading up to and surrounding the publication." 20 (2004) 218 CLR 366 at 373 [10]; [2004] HCA 5. 21 (2004) 218 CLR 366 at 416-417 [137]. 22 (1966) 86 WN (Pt 1) (NSW) 17 at 32; [1967] 1 NSWR 61 at 75. 23 London Association for Protection of Trade v Greenlands Ltd [1916] 2 AC 15 24 Howe & McColough v Lees (1910) 11 CLR 361 at 369; [1910] HCA 67. 25 (1947) 74 CLR 102 at 116; [1947] HCA 13. The reasons of the Court of Appeal The leading reasons were given by McClellan CJ at CL. After stressing "the importance of efficient and effective communication of a bank's dealing with a cheque, even if it has made an error", his Honour continued26: they are apparently entitled, but "In many cases the drawer's reputation may be injured from the erroneous refusal by the drawee bank to honour a cheque. However, unless communication is made, the payee will not only not receive the funds to which the absence of any communication they would, at least for a time, be unable to address the problem. If a mistake has occurred and the payee does not receive the relevant funds the logical step for the payee is to raise the matter with the drawer. If a bank error is responsible for the communication it can be readily identified and remedied. Although the drawer's reputation may suffer, in most cases of error this will be transitory. Greater damage may be done, including damage to the payee, by a delay in the payee being made aware that the cheque has not been honoured. Even if occasioned by the bank's own mistake there are good reasons why the communication contemplated by the Cheques Act [1986 (Cth) ("the Cheques Act")] should be protected. To my mind those reasons are persuasive in the present circumstances." The reference to the Cheques Act is to s 67(1)27. This obliges the drawee bank to pay to the holder a cheque duly presented for payment, or to dishonour the cheque, "as soon as is reasonably practicable"; in default of so doing, the drawee bank loses what otherwise may have been the right to dishonour the cheque28 and is liable to pay it to the holder. In the present case, Westpac never had any right at all to dishonour the cheques. In the course of submissions to this Court, counsel for Westpac 26 Aktas v Westpac Banking Corporation Ltd [2009] NSWCA 9 at [70]. 27 The present short title was given to the Cheques and Payment Orders Act 1986 (Cth) by the Cheques and Payment Orders Amendment Act 1998 (Cth). 28 At the relevant time, s 69 stated: "A cheque is dishonoured if the cheque is duly presented for payment and payment is refused by the drawee bank, being a refusal that is communicated by the drawee bank to the holder or the person who presented the cheque on the holder's behalf." correctly eschewed any continued reliance upon s 67(1) as a source of a legal duty which could found the necessary community of interest for qualified privilege29. Nevertheless, Westpac submitted that, having regard to the commerce between all the stakeholders, the 30 payees had sufficient reciprocity of interest with Westpac in receiving the communication that the cheques were dishonoured, albeit in circumstances where the dishonour was provoked by an erroneous understanding on the part of Westpac. That submission should not be accepted. The issues Was communication of dishonour of the cheques made on an occasion of qualified privilege? Was there an occasion where there was a duty or an interest in making and receiving the defamatory communications? In each instance, by presenting its cheque for payment, the payee sought to have the bank on which it was drawn (Westpac) pay the amount of the cheque either to the payee's bank (if a bank other than Westpac) or to the payee's account (if that account was held by Westpac). This being so, there was a relationship between the paying bank (Westpac) and the payee. Further, it was in the interests (in the sense of being to the advantage) of each of the payee, the drawer of the cheque (Homewise, which was Westpac's customer) and Westpac (as the paying bank) for the cheque to be paid, if there were funds to meet it. If there were funds to meet the cheque, and the cheque was otherwise regular on its face, there was no reason for Westpac, as the paying bank, to make any communication about the fate of the cheque. Westpac would meet the cheque, and the appropriate entries would be made either in an account that the payee maintained with Westpac or in the interbank settlement accounts for the day of payment. Only if Westpac, as paying bank, wished not to pay the cheque, was there any occasion for Westpac to make any communication with anyone about that cheque. If Westpac, as paying bank, wished not to pay the cheque that was presented for payment, then s 67(1) of the Cheques Act obliged it to "dishonour the cheque as soon as is reasonably practicable". To dishonour the cheque, the paying bank had to refuse payment and communicate that refusal "to the holder or the person who presented the cheque on the holder's behalf"30. 29 Cf Moore v Canadian Pacific Steamship Co [1945] 1 All ER 128 at 133. 30 Cheques Act, s 69. Each of the communications by Westpac of its refusal to pay the cheques in question in this matter was defamatory. There was no issue at trial about the communication of Westpac's refusal, and there was, therefore, no examination of whether the refusal was communicated to the holder of the cheque or to the person who presented the cheque on the holder's behalf. Nothing turns on that fact in this case. No qualified privilege In Andreyevich v Kosovich31, Jordan CJ pointed out that in deciding whether society recognises a duty or interest in the publisher making, and the recipient receiving, the communication in question, it is necessary to "show by evidence that both the givers and the receivers of the defamatory information had a special and reciprocal interest in its subject matter, of such a kind that it was desirable as a matter of public policy, in the general interests of the whole community of New South Wales, that it should be made with impunity, notwithstanding that it was defamatory of a third party". An appeal to this Court (Latham CJ, Rich, Starke, McTiernan and Williams JJ) was dismissed for short reasons given orally by Latham CJ32. The point made by Jordan CJ may be put interrogatively, by adopting and adapting what Gummow J said in Bashford v Information Australia (Newsletters) Pty Ltd33, so as to ask whether the particular relationship between Westpac and the persons receiving a notice of dishonour was one in which the advantages which the law deems are to be had from free communication within such a relationship should enjoy a significance over and above the accuracy of a defamatory imputation conveyed by a notice of dishonour, in this case that Homewise had issued a valueless cheque. In assessing that question, it is, as remarked above, of the first importance to recognise that there will be a communication between a bank and the payee of a cheque drawn on that bank, if and only if the bank wishes to refuse to pay the cheque. That is, there will be an occasion for communication if and only if the cheque is to be dishonoured. 31 (1947) 47 SR (NSW) 357 at 363. 32 Kosovich v Andreyevich unreported, High Court of Australia, 23 April 1947. 33 (2004) 218 CLR 366 at 412 [126]. What then are the advantages to society from providing for freedom of communication between bank and payee on such an occasion, which outweigh the need for accuracy in conveying a defamatory imputation? What is the special and reciprocal interest in the subject matter of the communication which makes it desirable as a matter of public policy that, in the general interests of the whole community, the communication should be made with impunity, notwithstanding that it is defamatory of a third party34? Contrary to the opinion expressed in the Court of Appeal in the passage set out earlier in these reasons35, considerations of promptness in communication of notice of dishonour are not to the point. They are not to the point because, unless a dishonour is made and communicated "as soon as is reasonably practicable", the paying bank remains liable to pay the cheque to the holder "unless it has become aware of a defect in the holder's title or that the holder has no title to the cheque"36. Of course it is important to the payee of a cheque that the payee should know the fate of that cheque promptly. But that interest is achieved by the provisions of ss 67 and 69 of the Cheques Act. No engagement of principles of qualified privilege in the law of defamation is necessary to achieve that end or will affect its implementation. Yet no other benefit or advantage to society was identified in argument. Davidson v Barclays Bank Ltd Instead, attention was directed to what was said by Hilbery J in Davidson v Barclays Bank Ltd37 upon facts somewhat similar to the present. That case was decided against a statutory background provided by the Bills of Exchange Act 1882 (UK). In its application to cheques, s 49(12) of that Act required notice of dishonour to be given by the bank within a reasonable time thereafter. In Davidson, no general need was identified which required the engagement of principles of qualified privilege in respect of communication of a notice of dishonour. The Editor of the All England Reports appended a note to the report of Davidson, stating that it did not appear that the defence of qualified privilege had been taken in any previous case where the dishonour was occasioned by the 34 Andreyevich v Kosovich (1947) 47 SR (NSW) 357 at 363. 35 Aktas v Westpac Banking Corporation Ltd [2009] NSWCA 9 at [70]. 36 Cheques Act, s 67(1). 37 [1940] 1 All ER 316. mistake of a bank in keeping a customer's account. The bank had dishonoured a cheque drawn by the plaintiff, a credit bookmaker, after the bank had failed to comply with a stop order placed by the plaintiff on an earlier cheque. If the bank had implemented the stop order, there would have been funds available in the account to meet the cheque in question. The action was tried by Hilbery J sitting alone, and on 25 January 1940 he delivered his reasons. His Lordship held38 that there was no matter of common interest between the bank and the payee which called for a communication; there would have been such a matter of common interest only if the occasion had called for the rejection of the cheque. Where there were (or, here, should have been but for the error by the bank) sufficient funds to meet the cheque, the only matter of common interest had been in the bank paying the cheque. Particular attention was focussed in argument in this Court upon the proposition stated in Davidson39 that: "you cannot, by making a mistake, create the occasion for making the communication, and what the bank seek[s] to do here is to create an occasion of qualified privilege by making a mistake which called for a communication on their part". Argument in the present matter proceeded by examining whether some general principle could be extrapolated from the proposition that has been quoted. Particular attention was given to what was meant by "mistake", what kinds of "mistake" mattered and what kinds of "mistake" did not matter to a determination of whether qualified privilege existed. The mistake here, on Westpac's case in this Court, was said to be an error in the interpretation of the garnishee order. More accurately, Westpac erred in failing to appreciate that, by reason of s 36(2) of the Business Agents Act, the garnishee order could not operate upon the Homewise trust account. However, argument along these lines distracts attention from the context in which the particular proposition stated by Hilbery J was expressed. It also tends to obscure the importance of recognising, as his Lordship did, that there will be no communication between a paying bank and the payee of a cheque except in the case of a dishonour. More fundamentally, however, to focus upon notions of "mistake" distracts attention from the need to identify whether, as a 38 [1940] 1 All ER 316 at 322-323. 39 [1940] 1 All ER 316 at 322. matter of public policy, in the general interests of the whole community, qualified privilege should attach to the occasion of such a communication. No such public interest was identified in argument. The absence of a public interest The absence of such a public interest in Davidson, and in this case, can be demonstrated by the absence of any reciprocity of interests between bank and payee. The bank has an interest in communicating because it refuses to pay. But the payee has no interest in receiving a communication of refusal to pay a cheque which is regular on its face in a case where the drawer of the cheque has funds sufficient to meet its payment. And where a notice of dishonour is defamatory, the defamation will lie in the assertion either that the cheque is not regular, or that the drawer does not have funds sufficient to meet the payment ordered on the cheque. When a notice of dishonour is defamatory, the communication goes beyond informing the recipient that the bank refuses to pay the cheque; the communication gives the bank's reason for refusal. The defamatory imputation will be found in that reason, not in the bare fact of refusal. That being so, it is wrong to identify some community of interest in the communication actually made as arising out of a need or desire on the part of the bank to say that payment is refused or as founded in some more general notion of the payee needing or wanting to know "the fate" of the cheque. As explained earlier, the bank acts as it does in what it perceives to be its interests. And for the payee of the cheque, there will be no need for any communication from the bank about the fate of the cheque, if it is met on presentation. As indicated in the opening passages of these reasons, there is a large public interest in the maintenance of an efficient and stable banking system. That interest includes, but is not confined to, an interest in the stability of those who hold licences under the Banking Act. It also includes a very large and powerful interest in maintaining observance by licensees of other statutory requirements, such as those of s 36(2) of the Business Agents Act, and generally in the speed, accuracy and reliability of transactions conducted within the banking system. To hold that giving notice of dishonour of a cheque is an occasion of qualified privilege is not conducive to accuracy on the part of banks faced with the decision to pay or dishonour a cheque as soon as reasonably practicable. To hold banks responsible to their customers not only in contract, but also for damage to reputation, is conducive to maintaining a high degree of accuracy in the decisions that banks must make about paying cheques. Order The primary judge erred in upholding the claim of qualified privilege and the Court of Appeal erred in upholding that decision. The appeal should be allowed. Mr Aktas should have his costs against Westpac. Order 1 of the orders of the Court of Appeal made on 9 February 2009 should be set aside and in place thereof the appeal by Mr Aktas should be allowed with costs. Order 2 made by the primary judge on 29 November 2007 should be set aside and replaced by an order that Westpac pay the costs of the action by Mr Aktas. Order 1 made by Fullerton J on 7 November 2007 should be set aside. It should be replaced by a verdict and judgment for Mr Aktas for damages in the sum of $50,000 with interest. The parties should have liberty within 28 days to re-list the appeal for further orders if an agreement is reached respecting the amount of interest to be added to the verdict of $50,000. In the absence of that agreement, the question of interest should be remitted for determination by a Judge of the Supreme Court of New South Wales. HEYDON J. The appeal should be dismissed with costs for the following reasons. The facts The relevant events took place as long ago as 1997. In that year the second respondent carried on the business of a suburban real estate agency under the name of "Century 21 Homewise Realty" as franchisee of Century 21 Australia Pty Ltd. The appellant was well-known as the alter ego and chief executive of the second respondent. The second respondent had three accounts with the first respondent. One of the accounts was a trust account named "Homewise Rent Trust Account". The second respondent managed, inter alia, rental properties for clients. The rent it collected on behalf of the clients went into that account, and the monies payable to the clients came out of that account. On 1 December 1997 the second respondent drew 30 cheques on the Homewise Rent Trust Account. They were either directly deposited to the clients' accounts or forwarded by mail. On that day the first respondent refused payment of the cheques. The first respondent returned cheques payable to those of the second respondent's clients who had accounts with the first respondent directly to them, and it returned cheques payable to clients who banked with another bank to the collecting bank. Each of these returned cheques was endorsed with the words "Refer to Drawer". Why did the first respondent do these things? In the previous months there had been financial disputes between Century 21 Australia Pty Ltd and the second respondent. As a result, Century 21 Australia Pty Ltd obtained a default judgment for $35,238.40 against the second respondent, and on 24 November 1997 a garnishee order was issued by the Fairfield Local Court to the first respondent attaching all debts due from the first respondent to the second respondent. In an attempt to comply with that order, at 5.17pm on 1 December 1997 officers of the first respondent changed the status of the Homewise Rent Trust Account from "normal" to "PCO" (ie, post credit only, signifying that only credits were allowed on the account, not customer-initiated debits). The change to PCO status rested on a mistake of law, since the Homewise Rent Trust Account was protected from garnishee orders by s 36(2) of the now repealed Property, Stock and Business Agents Act 1941 (NSW)40. There were at all times sufficient funds in the Homewise Rent Trust Account to meet the cheques. The first respondent's refusal to pay on the 40 See [2] n 1 above. cheques drawn on the account was a breach of an implied term of the contract between the first and second respondents under which the first respondent was to exercise all due and reasonable skill, care and diligence in respect of the Homewise Rent Trust Account. The appellant alleged that he had been injured not only in his reputation but also in his feelings. Nearly five years later, he instituted the present proceedings against the first respondent for defamation, and four and a half years after that he had them brought on for the trial from which this appeal springs. The trial judge in the Supreme Court of New South Wales (Fullerton J) found that the imputations suggested that the appellant was an incompetent and careless businessman, but not that he was dishonest, and that the reactions of members of the local community accusing him of theft, which embarrassed and hurt him, were not the result of the imputations41. The Court of Appeal agreed42. The trial judge also upheld a defence of qualified privilege, and the Court of Appeal agreed with her. The legal issue The relevant body of law applicable to the defamation in this appeal is the common law defence of qualified privilege, which was preserved by s 11 of the now repealed Defamation Act 1974 (NSW). Whether a communication is privileged for the purpose of that defence depends on the satisfaction of three conditions. First, the occasion on which the defamation was published must be a "privileged" one. Secondly, the defamation must be related to the occasion. Thirdly, there must not be malice43. There is thus a distinction between the question raised by the first condition – "was the occasion privileged?" – and the ultimate question – "was the communication privileged?"44 In this appeal there is no controversy about the satisfaction of the second and third conditions. As to the second condition, if the occasion was privileged, the communications related to the occasion – although the first respondent did not concede this, it put no argument against it. As to the third condition, the defamation was made without malice: it was mistaken but it was honest. The controversy in this appeal relates to the first condition. 41 Aktas v Westpac Banking Corporation Ltd [2007] NSWSC 1261 at [93] and [99]- 42 Aktas v Westpac Banking Corporation Ltd [2009] NSWCA 9 at [92]. 43 Guise v Kouvelis (1947) 74 CLR 102 at 117; [1947] HCA 13. 44 Pullman v Walter Hill & Co Ltd [1891] 1 QB 524 at 529, approved in Guise v Kouvelis (1947) 74 CLR 102 at 117. It was common ground that a privileged occasion arose if the first respondent made the defamatory statement "in the discharge of some public or private duty, whether legal or moral, or in the conduct of [its] own affairs, in matters where [its] interest is concerned."45 It was also common ground that there be reciprocity: "a privileged occasion is, in reference to qualified privilege, an occasion where the person who makes a communication has an interest or duty, legal, social or moral, to make it to the person to whom it is made, and the person to whom it is so made has a corresponding interest or duty to receive it."46 The appellant's submissions may be grouped under four headings. Failure to scrutinise the circumstances The first specific submission made by the appellant was that, contrary to an injunction of Dixon J, the courts below had failed to "make a close scrutiny of the circumstances of the case, of the situation of the parties, of the relations of all concerned and of the events leading up to and surrounding the publication."47 That contention must be rejected. According to the appellant, the relevant facts were that there were sufficient funds in the Homewise Rent Trust Account, that there was no proper basis for dishonouring the cheques, and that the first respondent had a contractual obligation to pay on the cheques. These facts were in truth fully scrutinised and appreciated by the courts below. Mistake as to existence of occasion of qualified privilege The appellant's submission. In its second specific submission, the appellant contended that the first condition to be satisfied by a bank seeking to rely on qualified privilege in relation to communications about dishonouring a cheque is that the dishonour not arise from the bank's own mistake as to the existence of an occasion of qualified privilege. The appellant submitted that the first respondent "mistakenly believed it had reason to dishonour the cheques and 45 Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 at 373 [9]; [2004] HCA 5, quoting Toogood v Spyring (1834) 1 Cr M & R 181 at 193 [149 ER 1044 at 1050] per Parke B. 46 Adam v Ward [1917] AC 309 at 334 per Lord Atkinson, approved in Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 at 373 [9]. 47 Guise v Kouvelis (1947) 74 CLR 102 at 116, quoted with approval in Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 at 373 [10]. therefore mistakenly believed it needed to communicate that fact to the payees and the collecting banks." It was submitted that the first respondent had no duty to communicate, or interest in communicating, with the payees or the collecting banks. The first respondent, it was said, could not create an occasion of qualified privilege by mistakenly thinking that a matter existed which, if it did exist, caused the occasion to be an occasion of qualified privilege, but not if the matter did not exist. That is, it was said that the first respondent could not create a duty or interest by falling into an error about whether it was open to it to dishonour the cheques. The appellant relied on Davidson v Barclays Bank Ltd48 and Pyke v The Hibernian Bank Ltd49. Authorities against the submission. One difficulty with this submission is that there are unquestionably instances where the law recognises the existence of a privileged occasion notwithstanding the defendant's mistaken view of the circumstances. In Pyke v The Hibernian Bank Ltd50 Black J took as one example: "the cases of communications made bona fide alleging misconduct on the part of public officials which turn out to be untrue. In such cases the occasion is privileged, although in many of them there would be no occasion to make any communication but for the mistake of the person making it." 48 [1940] 1 All ER 316 at 321-323 per Hilbery J. Whatever its legal merits, this decision, printed as it is on wartime paper, yellowed now by the humidity of seventy sultry Sydney summers, at least illustrates the untruth, in common law systems, of the maxim "inter arma silent leges". There is much to admire in a legal system which, in the terrible year of 1940, ensured that one of its most senior judges devoted his energies to determining whether the dishonouring of a cheque for £2 15s 8d drawn by a credit bookmaker to settle a successful long odds bet on a horse race was actionable defamation, and deciding that the defendant should pay damages of £250 – another successful long odds bet, this time in the greater lottery of defamation litigation. Thus were traditional and fundamental cultural values, which had played so large a part in the rough island story, vindicated. Had Churchill, whose name is inextricably linked with 1940, been aware of the decision, he might have made the remark he made in another context: "It makes you feel proud to be British." 49 [1950] IR 195 at 207 per O'Byrne J (Geoghegan J concurring). 50 [1950] IR 195 at 222. He gave another example51: "The same applies to bona fide communications charging a person with a crime, if made to officers of the law whose duty it is to detect and prosecute criminals. Yet, in most cases of the kind the maker of the communication would have no duty to make, or interest in making, any communication whatever about the person in question, were it not for his own mistake in thinking that person had committed a crime." Black J also referred to Scrutton LJ's opinion that, if the friend of a ship's officer informs the owner of the ship of the officer's statement that the drunkenness of the ship's captain endangered the safety of the ship and the crew, qualified privilege applies even though the statement is false52. Black J accepted that in the categories of case he had referred to, "the privilege of the occasion is justified in the interest of public efficiency or safety or the prevention of crime, while there is not the same justification for communications made by a bank to the payee of a cheque drawn by its customer, whose mandatory the bank is."53 But "once the theory that a privileged occasion cannot be created by the mistake of the party seeking to rely on it has to be abandoned, as I think it has, then the principle that a privileged occasion exists wherever there is a reciprocity of duty or interest between the maker and receiver of the communication is wide enough to cover every case where that reciprocity is established." Elision of questions. Another difficulty with the appellant's submission is that it elides two questions. One question is whether the communication was privileged. The other question is whether the occasion on which the communication was made was a privileged occasion. When a "statement" is made on a particular "occasion", the "occasion" is distinct from the "statement". 51 [1950] IR 195 at 222. 52 [1950] IR 195 at 222. Scrutton LJ's opinion is stated in Watt v Longsdon [1930] 1 KB 130 at 146, recording his approval of the views of Tindal CJ in Coxhead v Richards (1846) 2 CB 569 at 596-598 [135 ER 1069 at 1080-1081], and of Willes J in Amann v Damm (1860) 8 CB (NS) 597 at 602 [141 ER 1300 at 1302] and Lindley LJ in Stuart v Bell [1891] 2 QB 341 at 347. See also Davies v Snead (1870) LR 5 QB 608 at 611 per Blackburn J. 53 [1950] IR 195 at 222. 54 [1950] IR 195 at 222. The submissions and the authorities on which the appellant relied are open to the criticism that they55: "misconceive the nature of the occasion that created the privilege. The occasion was the drawing of the cheque. This created a relationship not only between the drawer and his bank but also between the bank and the person who had an interest in receiving the money from the bank, the payee or his bank. The bank did not misconceive the nature of its duty as a bank, nor did it send the information to someone who was not the payee or authorized to present the cheque. It made a mistake regarding the information it conveyed". In short, the relevant "occasion" in this case commenced when cheques were drawn on the first respondent by the second respondent and continued at least until the time when the first respondent informed payees and collecting banks of its decision not to honour those cheques. The first respondent was not mistaken about those facts. A mistake underlay what it communicated to its customers and the collecting banks. But that mistake was not a mistake about the occasion. Privileged occasion without mistake. As Kiefel J explains, if the first respondent had not been mistaken when it refused to pay the cheque, the occasion would have been privileged56. The appellant did not satisfactorily explain why the outcome should be different by reason of the first respondent having been mistaken. Conclusion. The appellant's contention depends on a narrow identification of the "occasion". The wider identification of Fullerton J is preferable57: "The relationship [the first respondent] had with each of the payees and the collecting banks (namely, as the paying bank) warranted the communication of information about its attitude to the presentation of the cheques, notwithstanding that such information – but not the existence of the relationship between them and the reciprocity of interest they shared – was premised on a mistake." The "occasion" did not only begin just after the first respondent's decision not to pay on the cheques. The "occasion" began when the cheques were drawn, 55 Brown, The Law of Defamation in Canada, 2nd ed (1994), vol 1, par 13.2(5), n 68 56 See [103] below. 57 Aktas v Westpac Banking Corporation Ltd [2007] NSWSC 1261 at [82]. because from that time a course of events unfolded which caused the first respondent to communicate something. Either it had to communicate willingness to pay, and this it would ordinarily do simply by the conduct of honouring the cheques. Or it had to communicate unwillingness to pay, because to fail to do so would be damaging to the payees and collecting banks for the reasons given To conclude that the occasion on which the first respondent made the defamatory statements in this case was not a privileged occasion is to narrow the qualified privilege defence very greatly in relation to banks. A narrowing could be effected by denying that any qualified privilege defence can co-exist with negligent – or even non-negligent – mistakes. That would be to treat the word "malice" in this context as if it included "negligence", or non-negligent mistakes. The appellant did not urge that course, because he did not argue against the proposition that if the occasion in this case were privileged, the defamatory statements were related to it, and were made without malice. But the course which the appellant did urge involves an equally great narrowing of the qualified privilege defence. It would never be available where, in relation to a matter of fact or law, banks had made a "mistake" – an expression which the appellant did not limit to reckless mistakes, or negligent mistakes, but which extended to mistakes outside the control of banks, even mistakes caused by persons other than banks. It may be desirable to increase the pressure on banks to improve the extent to which their dishonouring of cheques approaches perfection. But to increase that pressure by denying them the defence of qualified privilege, which is open to all other persons, does not conform with principle and has very little support in authority. Reciprocity of duty or interest The appellant's submission. The appellant's third submission rested on s 67(1) of the Cheques and Payment Orders Act 1986 (Cth), which created a duty to pay or dishonour the cheques as soon as reasonably practicable. In view of that duty, the appellant argued that the first respondent had "no more than a private interest in making the [communications] for its own financial advantage. It has nothing to do with protecting its customer. Nor does it have anything to do with protecting the payee, because the payee is protected by the fact that the cheque must be honoured if the bank does not act promptly." The private financial interest lay in avoiding liability under s 67. And the appellant similarly said that the first respondent had no duty to communicate to the payees and the collecting banks. That submission must be rejected. The law. Dixon J said: "Where the defamatory matter is published in … protection of an interest …, the conception of a corresponding duty or interest in the recipient must be very widely interpreted."59 There need not be "a common interest"; it is sufficient if there is "[c]ommunity of interest"60. The ideas of "social or moral duty" and "interest", according to Griffith CJ, "often overlap"61. He also said62: "The term 'moral duty' is not used in a sense implying that a man who failed to make the communication under the circumstances would necessarily be regarded by his fellows as open to censure, but in the sense implying that it was made on an occasion on which a man who desired to do his duty to his neighbour would reasonably believe that he ought to make it." "Duties" in this sense are "moral and social duties of imperfect obligation."63 The first respondent's duties and interests. The first respondent had a greater interest in making the statements it made than the one described by the appellant in his submissions. And the first respondent was subject to a relevant duty. These considerations were briefly alluded to in argument, and in Pyke v The Hibernian Bank Ltd64, a case on which both parties relied for various purposes. The first respondent was in a position of conflict between two duties: the statutory duty to pay or dishonour the cheques as soon as reasonably practicable, and, as its officers appeared mistakenly to view its legal obligations, its duty to avoid acting in contempt of court by complying with the garnishee 59 Mowlds v Fergusson (1940) 64 CLR 206 at 214-215; [1940] HCA 38, repeated in Guise v Kouvelis (1947) 74 CLR 102 at 125. 60 Howe & McColough v Lees (1910) 11 CLR 361 at 369 per Griffith CJ; [1910] HCA 67. 61 Howe & McColough v Lees (1910) 11 CLR 361 at 368. 62 Howe & McColough v Lees (1910) 11 CLR 361 at 369. 63 Harrison v Bush (1855) 5 El & Bl 344 at 349 [119 ER 509 at 512] per Lord Campbell CJ. See also Watt v Longsdon [1930] 1 KB 130 at 144 per Scrutton LJ ("moral or social duties"). 64 [1950] IR 195 at 221. order. The first respondent did not rely on the first duty save as to background, but the second is relevant. If, in the circumstances as the first respondent viewed them, it had honoured the cheques, it would have been committing a knowing contempt of court. Having decided to comply with its understanding of the legal effect of the garnishee order, it had an interest in ensuring that the second respondent brought the account into order by paying the debt underlying the garnishee order. The first respondent also had an interest in ensuring that the payees, who were doubtless expecting and assuming that the cheques would be met, were informed of what had happened and why. The first respondent's interest lay in communicating not merely the fact of its refusal to pay on the cheques, but also the reason why – that the account did not contain funds available for transmission to payees of the cheques – so that, in Black J's words in Pyke v The Hibernian Bank Ltd, the payees "had better look to the drawer and need not waste time seeking payment from the [first respondent]."65 In that case "the bank would have a real interest in repudiating responsibility for the non-payment; for otherwise it might be thought that there was something wrong with them, or, at the least, that they were unfit for the duties a bank undertakes." Black J also said a duty existed67: "when a bank as mandatory of its own customer, who draws a cheque upon it, justifiably refuses to carry out its mandate, one may fairly say it has a moral duty to the person whom its mandate directs it to pay to refer that person to the giver of the mandate, and, certainly, that it has an interest in so doing." That reasoning is correct. The moral duty arises because persons of "ordinary intelligence and moral principle" would recognise that it was right to respond to the need of payees to know what the first respondent's position was68. A bank which desired to do its duty to those affected by its conduct would reasonably believe that it ought to make the communication69. The payees needed to know where they stood. 65 [1950] IR 195 at 221. 66 [1950] IR 195 at 221. 67 [1950] IR 195 at 221. 68 Stuart v Bell [1891] 2 QB 341 at 350 per Lindley LJ. 69 Howe & McColough v Lees (1910) 11 CLR 361 at 369. The payees' interests. The payees had a corresponding interest in knowing about the capacity of the first respondent to pay out of the account in question. They had an interest in being given information (directly, if they were customers of the first respondent, or indirectly, if they were customers of collecting banks who passed on the first respondent's communication) enabling them to approach the second respondent and either get the second respondent to clear up the position with the first respondent with a view to remedying any error made by the first respondent, or get the second respondent to provide payment in some other way. It was important that the payees knew that they would not receive funds from their cheques so that they could make alternative arrangements for payment. And as already noted, Black J persuasively said in Pyke v The Hibernian Bank Ltd70 that: "the payee of the cheque would have a very distinct interest in being given timely intimation that he had better look to the drawer and need not waste time seeking payment from the bank." This was particularly so if, for example, the payees had despatched cheques of their own in reliance on the second respondent's cheques being met, for it would be necessary for them to contact their banks to seek temporary accommodation, or to contact the payees of their cheques to warn them to delay presentation until their accounts could be put in funds. These considerations were not nullified by the fact that the Cheques and Payment Orders Act 1986 (Cth) operated to some degree to serve similar purposes. The collecting banks' interests. The collecting banks had a corresponding interest in receiving the information supplied by the first respondent so that they could inform their customers of the problem, with a view to enabling the customers to protect their interests in the ways just outlined. The common convenience and welfare of society General principles. The appellant advanced certain submissions turning on Parke B's reference to non-malicious defamatory statements being protected by qualified privilege where this was for the common convenience and welfare of society, which concluded with his statement that the law had not restricted the right to make statements of that kind within narrow limits71. The submissions concentrated on the words "the common convenience and welfare of society". The submissions appeared to assume that those words expressed a test which, if not satisfied, prevented qualified privilege from being established. McHugh J 70 [1950] IR 195 at 221. 71 Toogood v Spyring (1834) 1 Cr M & R 181 at 193 [149 ER 1044 at 1049-1050]. expressed a contrary opinion in Bashford v Information Australia (Newsletters) Pty Ltd72: "It is of the first importance to understand that references to concepts such as 'the common convenience and welfare of society' and similar phrases record a result and explain why the communication and the relevant duty or interest gave rise to an occasion of qualified privilege. Such concepts are not the determinants of whether the occasion is privileged." In the same case McHugh J also said73: "In determining the question of privilege, the court must consider all the circumstances and ask whether this publisher had a duty to publish or an interest in publishing this defamatory communication to this recipient. It does not ask whether the communication is for the common convenience and welfare of society." This passage was quoted by the appellant for other purposes. But, as the first respondent pointed out, the last sentence contradicts the submissions which the appellant made under the present heading. No detailed argument was directed to the status of McHugh J's pronouncements and their impact on the appellant's arguments. Since there are other grounds for rejecting the appellant's arguments, it is not necessary to consider these questions. The succeeding analysis of the common convenience and welfare of society is subject to the caveats which McHugh J has raised. In the present field, no doubt what is most for the common convenience and welfare of society is the honouring of cheques of customers whose accounts are in funds or inside permitted overdraft limits, and are otherwise available to be drawn on – that is, that in this respect, as in all others, the banking system always works perfectly. A related aspect of that proposition is that it is for the common convenience and welfare of society that defamatory statements not be made. But the law contemplates that non-malicious defamatory statements will on occasion be made, and that it can be for the common convenience and welfare of society that this be so. If the terms of the appellant's submissions are legitimate ones, a question which they raise in the present context is whether it is for the common convenience and welfare of society that, if cheques are not thought by the banks on which they are drawn to be properly payable, information to that effect is given speedily to the persons most likely to put this information to effective use. In the present context, each of the relevant interests – that of the first respondent, 72 (2004) 218 CLR 366 at 386-387 [55]. 73 (2004) 218 CLR 366 at 389 [63] (emphasis in original). those of the payees, and those of the collecting banks – is related to the interests of the others. In evaluating the conduct of the first respondent in relation to the intersection of those interests where it thought that a court order prevented payments out of the relevant account, one aspect of the common convenience and welfare of society is that each of the interests so described be accommodated: for in the circumstances as the first respondent thought them to be, the first respondent's course would increase the chance that credit would flow more speedily and into the correct channels. The appellant submitted that rejection of his first three submissions74 would be adverse to the common convenience and welfare of society in two ways. Contract and defamation. First, he submitted that this would be so because that rejection would create disharmony between the first respondent's immunity in defamation and its liability in contract: "it is difficult to see that it is for the common convenience and welfare of society to permit its banks to enjoy the protection of qualified privilege for communications occasioned by their own errors when those same errors are in breach of their contractual obligations to their customers." The appellant submitted that the dishonouring of the cheques could not simultaneously be conduct constituting a breach of contractual duty and conduct pursuant to an interest. One problem with this argument is that, if the legal position had been as the first respondent perceived it to be, its conduct would not have been in breach of contractual duty, but rather would have been in fulfilment of a court order. Another is that there is no contradiction between, on the one hand, conduct in breach of a bank's contractual duty and, on the other hand, conduct in advancement of the interests of the bank and persons other than the innocent party to the contract. If anything, the contractual outcome points against the appellant's argument in this case, because the vindication of the second respondent's contractual rights in the courts below tends to ameliorate the adverse effects of the first respondent's defamation defence on the appellant. It makes the law more harmonious, not less. The appellant put another variant of this first submission thus. To uphold the qualified privilege defence would lead to inconsistent findings: on the one hand, the first respondent had a duty not to communicate dishonour (because its contractual duty was not to dishonour); on the other hand, if the defence applied, it was because of a duty to communicate. But the two "duties" do not directly collide. The second duty was to communicate the fact of dishonour if the cheques were dishonoured. The question whether there was a duty to honour the 74 Discussed above in [58]-[71]. cheques is distinct from the question whether there was a duty to communicate the fact of dishonour if it took place. And the two duties are different in character. The duty to perform the contract was a legal duty of perfect obligation. The duty to publish was a social or moral duty of imperfect obligation. Qualified privilege as the driver of right conduct. The second submission put by the appellant in relation to the common convenience and welfare of society was as follows. To deny banks the defence of qualified privilege would "provide a proper basis for a review by banks of the processes which lead to decisions to dishonour being made so as to ensure that those decisions are made with greater care and diligence. On any view, that is a better outcome for the general welfare of society." The appellant's submission here moves away from the traditional analysis employed in the authorities which have flowed from Parke B's formulation in Toogood v Spyring75 to a theme repeatedly employed in the appellant's submissions which saw the case as turning on "a matter of public policy", a "policy question", a "question of public policy", a "public policy" or a "public policy question". It is true that Jordan CJ, Evatt J and Walsh J, for example, have used that language76. The appellant's words are in a sense correct – but not in the sense in which the appellant used them. Thus Jordan CJ was speaking in the context of analysing the reciprocal interests of the givers and receivers of defamatory information. Neither he nor the other judges were suggesting that the law of qualified privilege be used as a means of achieving the best possible social results. Nor were they suggesting that public policy criteria could be employed so as to prevent the defence of qualified privilege from existing in particular fields. The appellant's submission that the law of qualified privilege should be so fashioned as to bring about particular social goals in the manner he advocated is novel. The best should not here be treated as the enemy of the good. And the submission rests on an assumption that the shrinking of the defence which is advocated would actually have the effects desired on any significant scale. The truth of that assumption was neither demonstrated nor substantiated. 75 (1834) 1 Cr M & R 181 at 193 [149 ER 1044 at 1049-1050]. 76 Andreyevich v Kosovich (1947) 47 SR (NSW) 357 at 363-364. See also Telegraph Newspaper Co Ltd v Bedford (1934) 50 CLR 632 at 657; [1934] HCA 15; Justin v Associated Newspapers Ltd (1966) 86 WN (Pt 1) (NSW) 17 at 32-33; [1967] 1 NSWR 61 at 75. Conclusion The decisions of Fullerton J and the Court of Appeal upholding the first respondent's defence of qualified privilege were correct. KIEFEL J. The facts relevant to this appeal are set out in the reasons of French CJ, Gummow and Hayne JJ. One of the accounts which the second respondent ("Homewise") operated with the first respondent ("Westpac") was the Homewise Rent Trust Account. Mr Aktas was a director, sole shareholder and chief executive of Homewise. He was the counter-signatory to 30 cheques which were drawn on that account on 1 December 1997. The cheques were returned that day by Westpac stamped "Refer to Drawer". Where a cheque had been presented for payment by a customer of Westpac a letter was also sent containing the same advice. The cheques came to be stamped with the advice as a result of an error on the part of an employee of Westpac. That person had not realised that a garnishee order made by a Local Court, naming Homewise as the judgment debtor, could not be applied to the trust account. As a result of that mistake the status of the account was designated "PCO" ("post credits only"), which effectively prevented any cheques being paid from the account. The error was corrected the following day. The actions of Westpac were in breach of its contract with Homewise and defamatory of it and Mr Aktas. It has long been accepted that the advice "Refer to Drawer" would commonly be understood to convey that there are insufficient funds in the relevant account to meet a cheque presented for payment. This was not in fact the case. At trial the jury found further imputations, but they do not assume relevance on the appeal. It was common ground between the parties that the publication of defamatory matter had occurred as a result of the cheques being stamped and returned. Westpac also acknowledged its liability for republishing the defamatory matter when the collecting banks passed on the information about the cheques to its customers. Fullerton J awarded Homewise $84,500 in damages for breach of contract77. Had Homewise and Mr Aktas succeeded in their action for defamation, her Honour would have awarded damages at $117,000 and $50,000 respectively78. Those awards would have been higher had her Honour not taken into account the failure of the plaintiffs to accept an offer made by Westpac, in January 1998, to correct the error and apologise, albeit the offer was made after some unexplained delay79. Proceedings were brought by Homewise and Mr Aktas in November 2002. 77 Aktas v Westpac Banking Corporation Ltd [2007] NSWSC 1261 at [147]. 78 Aktas v Westpac Banking Corporation Ltd [2007] NSWSC 1261 at [138], [139]. 79 Aktas v Westpac Banking Corporation Ltd [2007] NSWSC 1261 at [125]. As French CJ, Gummow and Hayne JJ have observed, the effect of s 11 of the Defamation Act 1974 (NSW) was to preserve the common law defence of qualified privilege and, under s 7A(4)(a) of the Act, it fell to Fullerton J to determine whether the defence could be availed of by Westpac. Westpac pleaded that the advice "Refer to Drawer" was published on an occasion of qualified privilege and gave as particulars that it had a duty to communicate with its customers and collecting banks as to the status of the cheques and that the recipients of the advices had an interest in receiving such advice. Her Honour upheld the defence80. The Court of Appeal81 dismissed an appeal from her Honour's judgment. Their Honours held that82: "Having decided to refuse payment of the cheques Westpac had a duty to communicate its decision to the payees or their banks. The payees had the necessary interest in receiving that communication. The endorsement 'Refer to Drawer' was conventional advice using an expression common to banking arrangements. Its use by Westpac was relevant to the privileged occasion and accordingly the imputations which the jury found to arise were themselves privileged." In my view that conclusion was correct and this appeal should be dismissed. The defence of qualified privilege The basis – public interest regarding communications It cannot be denied that the statements made by Westpac about the cheques were defamatory of, and had adverse consequences for, Mr Aktas and Homewise. They were also statements made in the course of business and in terms which are usual where a bank has decided not to honour a cheque. The law recognises that there is a public interest in maintaining freedom of communications which are necessary to everyday life. It has been regarded as preferable "that individuals should occasionally suffer than that freedom of communication between persons in certain relations should be in any way impeded."83 80 Aktas v Westpac Banking Corporation Ltd [2007] NSWSC 1261 at [81], [82]. 81 Aktas v Westpac Banking Corporation Ltd [2009] NSWCA 9 per McClellan CJ at CL, Ipp and Basten JJA agreeing. 82 Aktas v Westpac Banking Corporation Ltd [2009] NSWCA 9 at [86]. 83 Bowen v Hall (1881) 6 QBD 333 at 343 per Lord Coleridge CJ. In Horrocks v Lowe84 Lord Diplock explained: "The public interest that the law should provide an effective means whereby a man can vindicate his reputation against calumny has nevertheless to be accommodated to the competing public interest in permitting men to communicate frankly and freely with one another about matters in respect of which the law recognises that they have a duty to perform or an interest to protect in doing so. What is published in good faith on matters of these kinds is published on a privileged occasion. It is not actionable even though it be defamatory and turns out to be untrue." In the often quoted judgment in Toogood v Spyring85 Parke B said that "[t]he business of life could not be well carried on" if communications, such as that in question, were restrained86. In the sphere of business, statements about the creditworthiness of individuals, in response to an enquiry, often feature in the cases87. In London Association for Protection of Trade v Greenlands Ltd Lord Parker of Waddington said88: "having regard to the way in which business is carried on in this country, occasions must arise in which it is not only legitimate but necessary for one trader to inquire into the financial circumstances and credit of another" and observed that it is in the interests of society generally that a person asked for information should be able to respond without the fear of an action for libel. It is consistent with the purpose of the defence that its scope should not be unduly restricted. In Toogood v Spyring Parke B said that89: 84 [1975] AC 135 at 149. 85 (1834) 1 Cr M & R 181 [149 ER 1044]. 86 Toogood v Spyring (1834) 1 Cr M & R 181 at 194 [149 ER 1044 at 1050]. 87 See for example Howe & McColough v Lees (1910) 11 CLR 361; [1910] HCA 67; London Association for Protection of Trade v Greenlands Ltd [1916] 2 AC 15. 88 London Association for Protection of Trade v Greenlands Ltd [1916] 2 AC 15 at 89 (1834) 1 Cr M & R 181 at 193 [149 ER 1044 at 1050]. "If fairly warranted by any reasonable occasion or exigency, and honestly made, such communications are protected for the common convenience and welfare of society; and the law has not restricted the right to make them within any narrow limits." This aspect of the judgment in Toogood v Spyring was regarded by Griffith CJ in Howe & McColough v Lees90 as providing the key to an understanding of the real principle upon which the defence is founded. Clearly enough, communications are to be taken to qualify as being in the public interest if they are "fairly warranted by any reasonable occasion or exigency, and honestly made". The public interest in freedom of communication, upon which the defence is based, does not require that what is communicated be accurate, so long as its maker and its recipient have a sufficient interest to warrant it being said. In Bashford v Information Australia (Newsletters) Pty Ltd91 a question was whether the application of the defence to the making of a defamatory imputation, on what was otherwise a privileged occasion, was affected by inaccuracies in what was reported as court proceedings. Gummow J said92: "while the substantial accuracy of a report of judicial proceedings is deemed necessary in order efficiently to place the general public in the same position as those in attendance upon the relevant proceedings, it is well established that the inaccuracy of an imputation is no bar to the availability of qualified privilege arising out of a reciprocal duty or interest. This is because the particular relationship between the defendant and the person in receipt of the communication, and the advantages which the law deems are to be had from free communication within such a relationship, enjoy a significance over and above the accuracy of the defamatory imputation in question." The occasion for publication – interests in making and receiving the communication For the defence of qualified privilege to apply there must, in the circumstances surrounding the publication of the defamatory matter, be an "occasion" for the communication in question, as the passage from Toogood v 90 (1910) 11 CLR 361 at 368. 91 (2004) 218 CLR 366; [2004] HCA 5. 92 Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 at 412 [126] (footnotes omitted). Spyring cited above requires. In addition, the communication must be necessary to that occasion ("fairly warranted"93) and made with honest purpose. In determining whether there was an occasion for the making of the statement communicated, attention is principally directed to the interest the defendant had in making it. Earlier in his judgment Parke B referred to such an occasion arising where the statement is94: "fairly made by a person in the discharge of some public or private duty, whether legal or moral, or in the conduct of his own affairs, in matters where his interest is concerned." In such cases, he explained, the occasion allows for the qualified defence. In Howe & McColough v Lees95 Griffith CJ said that there will often be an overlap between a statement made in the discharge of some social or moral duty and the interest a party has in making or receiving the statement. This is apparent when consideration is given to the principle upon which the defence is founded – the protection of communications for the common convenience and welfare of society. But the reference to "society" does not mean, for the defence to apply, that the person making the communication was under an obligation to make it, nor does it mean that the person was entitled to make it to the public at large. The point, his Honour said, is that "the interests of society in general require that a communication made under such circumstances to the particular person should be protected."96 In a case such as the present, the interests of society are in the making of statements in the ordinary course of business, albeit that they may contain defamatory imputations. Many of the earlier cases which were concerned with the application of the defence of qualified privilege involved statements regarding the character of persons such as employees. Communications necessary to be made in the course of business may also reflect upon a person's reputation but are privileged on account of the interest of the maker and recipient in what is conveyed. In Nevill v Fine Art and General Insurance Company97 the appellant was an agent of an insurance company and conducted that business from his own office. He 93 See Gatley on Libel and Slander, 11th ed (2008) at 437 [14.1], 442 [14.3]. 94 Toogood v Spyring (1834) 1 Cr M & R 181 at 193 [149 ER 1044 at 1049-1050]. 95 (1910) 11 CLR 361 at 368-369. 96 Howe & McColough v Lees (1910) 11 CLR 361 at 368-369. brought an action for libel when the company sent a notice to persons insured through the appellant, advising that the appellant's agency had "been closed by the Directors."98 It was not suggested that the occasion was not privileged. As Lord Halsbury LC observed, the notice was nothing more than an attempt "to make a business communication to persons who had the right to receive [those] communications"99. Closer to the nature of the communication made in the present case are those to which reference was made earlier in these reasons, which concern imputations as to the financial standing or creditworthiness of a plaintiff. The case of Howe & McColough v Lees provides an example. The defendants were members of an association of stock and station agents. One of the defendants reported to the secretary of the association, as he was obliged to do under its rules, the name of the plaintiff as a purchaser who had not paid the purchase price within the time prescribed by the rules of the association. It was held that he had a duty to do so and the secretary then had a duty to advise members. The members shared an interest in knowing about the solvency of persons who might bid at further auctions100. The occasion was held to be privileged101. There being no misuse of the occasion, the defence was made out. It was said in Adam v Ward102 that the defence requires that the interests of the person making the communication and the person receiving it be in common. Griffith CJ in Howe & McColough v Lees considered the expression "community of interest" to be more accurate103, suggesting that perfect correspondence was not necessary. In Guise v Kouvelis104 Dixon J105 suggested that it is possible to overstate the need for correspondence of interest, by pointing out that Parke B in 98 Nevill v Fine Art and General Insurance Company [1897] AC 68 at 69. 99 Nevill v Fine Art and General Insurance Company [1897] AC 68 at 75. 100 Howe & McColough v Lees (1910) 11 CLR 361 at 370 per Griffith CJ, Barton J agreeing, 377-378 per O'Connor J, 396 per Higgins J. 101 Cf Macintosh v Dun [1908] AC 390. The rejection of the defence in this case might be explained on the basis that the provision of information was voluntary and therefore officious – see Howe & McColough v Lees (1910) 11 CLR 361 at 371 per 102 [1917] AC 309 at 318. 103 Howe & McColough v Lees (1910) 11 CLR 361 at 369. 104 (1947) 74 CLR 102 at 125; [1947] HCA 13. 105 In dissent. Toogood v Spyring spoke of a person's interest in his own affairs, which demanded no community, reciprocity or correspondence of interest. In Howe & McColough v Lees Griffith CJ explained the interest of the members in receiving the communication, which supported the defence, as106: "an interest in knowing the fact communicated, in other words, an interest in the subject matter to which the communication is relevant, as for instance the solvency of a probable customer." The context for the giving of the advice "Refer to Drawer" in the present case was the conduct of the business of banking in which decisions must be made by banks as to whether to honour cheques. Westpac had an interest in advising its customers who had presented cheques and collecting banks of its decision. Its interest extended to doing so as soon as was reasonably practicable. So much follows from s 67(1) of the Cheques Act 1986 (Cth). Indeed it could be said that it came under an obligation to do so, given the interest of its customers and collecting banks in the status of the cheques107. To adapt the words of Griffith CJ108, they had an interest in knowing the fact communicated, which is to say Westpac's decision not to honour the cheque. That interest is sufficient for the "community of interest" of which Griffith CJ spoke. It would clearly have been more advantageous to them if the communication was not made, and the cheque simply met. Nevertheless, given the fact of the bank's decision not to honour the cheques, they clearly had an interest in knowing of it. The advice "Refer to Drawer" is an ordinary business communication which conveys the imputation mentioned. The factor which distinguishes it from other such advices is that the basis for it was erroneous. It was made as a result of a mistake on the part of Westpac's employee. The relevance of that mistake with respect to the interests of Westpac and the recipients of the advice may be tested in this way109. A first inquiry is whether customers or collecting banks could be considered to have a sufficient interest in the advice if the bank had not been mistaken when it refused to pay on the cheque. The answer must be in the affirmative. The question which then arises is whether the bank's mistake can then be said in law to have a bearing upon that duty or interest, which would 106 Howe & McColough v Lees (1910) 11 CLR 361 at 369-370. 107 A view expressed in Levy v Union Bank of Australia Ltd (1896) 21 VLR 738 at 742-743 per Madden CJ, Williams and Hodges JJ with reference to Laughton v The Bishop of Sodor and Man (1872) LR 4 PC 495 at 504. 108 Howe & McColough v Lees (1910) 11 CLR 361 at 369. 109 An approach suggested by Black J in Pyke v Hibernian Bank [1950] IR 195 at 220. otherwise give rise to an occasion of privilege. There is no obvious reason why it should. None is provided by the requirements for the privilege as stated in Toogood v Spyring. The fact that the mistake involved ignorance or a misunderstanding about a statutory provision and was made by the employee of a bank does not bear upon that question. The qualifications – communication fairly warranted; honesty of purpose The privilege upon which the defence is founded is not absolute. It may be lost if the occasion which gives rise to it is misused. It therefore follows that the motive with which a defamatory statement is made may often be crucial to the application of the defence110. This was explained by Dr Gatley in the first edition of his work111: "There are certain occasions on which a man is entitled to state what he believes to be the truth about another, and in which public policy requires that he should be protected in so doing provided that he made the statement honestly and not for any indirect or wrong motive. Such occasions are called occasions of qualified privilege, for the protection which the law affords is not an absolute protection, but depends entirely on the honesty of purpose with which the statement is made." The requirement of honesty of purpose does not require that the statement made be accurate, but that the maker have an honest belief that what is said is true112. Lord Diplock in Horrocks v Lowe113 pointed out that if a person publishes untrue defamatory matter recklessly, without considering whether it be true or not, he (or she) will be treated as if he (or she) knew it to be false, as in other branches of the law. But the law accepts that people may "leap to conclusions on inadequate evidence and fail to recognise the cogency of material which might cast doubt on the validity of the conclusions they reach."114 Nevertheless, their belief may still be "honest". As his Lordship said, "[t]he law demands no more." 110 As observed in Horrocks v Lowe [1975] AC 135 at 149 per Diplock LJ. 111 Gatley on Libel and Slander, (1920) at 167. 112 Stuart v Bell [1891] 2 QB 341 at 347 per Lindley LJ with reference to Whiteley v Adams 15 CB (NS) 418; Nevill v Fine Art and General Insurance Company [1897] AC 68 at 75. 113 [1975] AC 135 at 150. 114 Horrocks v Lowe [1975] AC 135 at 150. To this point regard has been had to the requirement of honesty of purpose. The phrase in Toogood v Spyring also requires that what was said be "fairly warranted" by the occasion. This requirement may in some cases necessitate a further inquiry into the particular conduct of the defendant in making the statement, beyond that of the defendant's honesty115. The case of Guise v Kouvelis falls into this category. In Guise v Kouvelis the plaintiff had been playing cards at a club of which the defendant was a member and committee member. The defendant, in a loud voice, accused the plaintiff of cheating. The majority of the Court appears to have accepted that members, and possibly also visitors, had an interest in the character of the persons attending the club, but held that this interest did not warrant broadcasting the accusation. As Latham CJ116 said117, the defendant could have told the plaintiff that he would report his conduct to the committee, without making any defamatory imputation. His Honour went on to say that the basis of the privilege is social welfare and it was not conducive to it that the privilege be extended to the expression of the defendant's opinion to persons in general. To hold to the contrary, he said, "would amount to granting a wide licence to officious and interfering mischief-makers."118 What his Honour could not countenance was a situation where what was necessary for the occasion of that privilege was grossly exceeded. The defamatory imputation was not "fairly warranted"119. Dixon J came to a contrary view, holding that in the circumstances, which fairly warranted an honest challenge to the plaintiff's conduct, the defendant had a sufficient interest in speaking, thus providing the occasion for the privilege120. The imputation in this case did not go further than what is ordinarily conveyed in the situation where a bank has determined to dishonour a cheque. No inquiry into the particular circumstances surrounding its publication, touching upon the reasonableness of Westpac's conduct121, is necessary. 115 Gatley on Libel and Slander, 11th ed (2008) at 442 [14.3]. 116 With whom McTiernan and Williams JJ agreed. 117 Guise v Kouvelis (1947) 74 CLR 102 at 111. 118 Guise v Kouvelis (1947) 74 CLR 102 at 112. 119 As observed by Gatley on Libel and Slander, 11th ed (2008) at 443 [14.3] and 437 120 Guise v Kouvelis (1947) 74 CLR 102 at 124. 121 Gatley on Libel and Slander, 11th ed (2008) at 442 [14.3]. The only requirement to be met, in addition to the identification of the necessary interests, was honesty of purpose on the part of Westpac. The case was conducted on the basis that no such issue was raised. Malice, in the nature of reckless indifference, was pleaded by way of reply but not pursued at trial. Leave to raise it later in the trial, and again on appeal, was refused. The basis upon which the case proceeded was that the employee had made an honest mistake. The appellant's argument must be that the defence is to be denied on that account. Davidson v Barclays Bank Ltd122 Unlike defences such as that of fair and accurate reporting, the defence of qualified privilege does not depend upon the quality of what is said. This point was made in the joint reasons in Bashford v Information Australia (Newsletters) Pty Ltd123. The accuracy of what is conveyed has not been considered relevant to the operation of the defence. In the 11th edition of Gatley on Libel and Slander it is said that the fact that a defendant is mistaken as to the facts does not deprive him (or her) of the defence, for its very purpose is to allow the making, in good faith, of untrue statements124. In Nevill v Fine Art and General Insurance Company the statement made was factually accurate, but Lord Halsbury LC observed that even if it had been wrong, the defence would nevertheless have been available. The matter which was relevant to the operation of the defence was not its accuracy, but that the persons who made the statement believed in the truth of what they were saying125. The decision in Davidson v Barclays Bank Ltd, to which much attention was given in submissions on the appeal, is at odds with this understanding as to the operation of the defence. In that case Hilbery J held that the bank's mistake, leading to the dishonour of a cheque, could not create the occasion for making a statement which conveyed an imputation similar to that in question here. His Honour accepted that the bank's mistake was honest, but described it as one "which ought never to have been made."126 So far as concerned the bank's obligation to convey its decision, Hilbery J identified the duty as that owed to its 122 [1940] 1 All ER 316. 123 Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 at 380 124 Gatley on Libel and Slander, 11th ed (2008) at 455 [14.15]. 125 Nevill v Fine Art and General Insurance Company [1897] AC 68 at 75. 126 Davidson v Barclays Bank Ltd [1940] 1 All ER 316 at 317. customer to make a payment of the amount of the cheque; and the interest of the payee, in common with the customer, as an interest in seeing that payment was met. So understood, the bank had no duty to make any communication about the cheque. Hilbery J's approach denies that a bank could have any interest in communicating its decision as to whether to honour a cheque. The duty owed to its customer, which Hilbery J identified as the relevant duty, would be maintained so long as the bank's consideration of the question whether to honour was not tainted by error. In truth, Hilbery J simply rejected the operation of the privilege in the event of mistake, whereas case law and commentary suggests to the contrary. Black J in Pyke v Hibernian Bank127 pointed out that the approach taken in Davidson v Barclays Bank Ltd overlooks that there are many occasions where there would be no privileged occasion but for the mistake of the party128. In his Honour's view, one with which I agree, the approach of Hilbery J creates an exception, in the case of banker and customer, to the application of settled principle129. Conclusion The advice in question "Refer to Drawer" was an ordinary business communication, but one which carried with it a defamatory imputation. The law recognises that there is a public interest in such communications being made freely, without fear of being sued for defamation. The interests which give rise to the occasion to make such a statement are, respectively, the interest of a bank in communicating its decision not to honour the cheque and that of a holder of a cheque or collecting bank in knowing of that decision. A "community of interest"130 is therefore evident. The statement went no further than was necessary, for the occasion was published only to those having an interest in what it conveyed. It was therefore fairly warranted by the occasion. In such circumstances, the only further requirement for the defence to operate is that the statement be made with honesty of purpose and absent malice. Those requirements presented no difficulties for Westpac in this case. However, it should not be assumed that recklessness will never be an issue for banks where wrong decisions are made concerning the dishonour of cheques. Much may depend upon the care taken to instruct 128 Pyke v Hibernian Bank [1950] IR 195 at 221-222. 129 Pyke v Hibernian Bank [1950] IR 195 at 222. 130 Howe & McColough v Lees (1910) 11 CLR 361 at 369 per Griffith CJ. employees about matters relating to the operation of accounts, including relevant statutory provisions. The awareness of banks that the defence might be denied should encourage the adoption of good practices. But in this case the plaintiff's allegation of reckless indifference on the part of Westpac was not pursued and cannot provide a basis for the denial of the defence. the The only feature which assumes relevance with respect communications in question in this case is that they resulted from a mistake as to the application of a garnishee order to the type of account in question. Here the law recognises the imperfection of human reasoning and understanding131 and the possibility of carelessness132. Mistake does not deny the operation of the defence. The question is whether, given the honest belief of its employee that the account could not be utilised to pay cheques, the bank could fairly be said to consider itself obliged to communicate its decision, a decision in which others were necessarily interested. In my view the answer must be "yes". The appeal should be dismissed with costs. 131 Horrocks v Lowe [1975] AC 135 at 150 per Diplock LJ. 132 Gatley on Libel and Slander, 11th ed (2008) at 437 [14.1].